Attached files
file | filename |
---|---|
EX-5.1 - Empire Post Media, Inc. | v175707_ex5-1.htm |
EX-3.1 - Empire Post Media, Inc. | v175707_ex3-1.htm |
EX-3.2 - Empire Post Media, Inc. | v175707_ex3-2.htm |
EX-10.2 - Empire Post Media, Inc. | v175707_ex10-2.htm |
EX-23.1 - Empire Post Media, Inc. | v175707_ex23-1.htm |
EX-23.2 - Empire Post Media, Inc. | v175707_ex23-2.htm |
EX-10.1 - Empire Post Media, Inc. | v175707_ex10-1.htm |
As filed with the Securities and Exchange Commission on February
26, 2010.
|
Registration No. 333-163782
|
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C., 20549
FORM S-1/A
Amendment
No. 2
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
EMPIRE POST MEDIA, INC.
|
(Exact
name of Registrants specified in its
charter)
|
Nevada
|
7812
|
27-1122308
|
||
(State or other jurisdiction of incorporation
or organization) |
(Primary Standard Industrial Classification
Code Number)
|
(I.R.S. Employer
Identification Number) |
Peter
Dunn, President
280 South
Beverly Drive, Suite 205, Beverly Hills, CA 90212
(310)
472-5138
(Address
and telephone number of principal executive offices)
Paracorp,
Incorporated
318 North
Carson Street, Suite 208
Carson
City, Nevada 89032
Tel.:
1-775-883-8104
(Name,
Address and Telephone Number of Agent for Service)
Copies of all correspondence
to:
Law
Offices of William B. Barnett, PC
Attn:
William B. Barnett, Esq.
21550
Oxnard Street, Ste. 200
Woodland
Hills, CA 91367
Tel:
(818) 595-7717
Fax:
(818) 999-6922
Approximate
date of commencement of proposed sale to the public: As soon as practicable
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: ¨
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act Registration Statement number of the earlier effective
Registration Statement for the same offering. o
If this
Form is post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective Registration Statement for the same
offering. o
If this
Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act Registration
Statement number of the earlier effective Registration Statement for the same
offering. o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company’ in Rule 12b-2 of the
Exchange Act.
Large
accelerated filer o
|
Accelerated
filer o
|
Non-accelerated
filer o
|
Smaller
reporting company x
|
CALCULATION
OF REGISTRATION FEE
Title of Each Class of Securities to be Registered
|
Amount to be
Registered (1)
|
Proposed
Maximum
Offering Price
Per Unit (2)
|
Proposed
Maximum
Aggregate
Offering Price
|
Amount of
Registration Fee (3)
|
||||||||||||
Common
Stock offered by the Selling Stockholder (4)
|
12,000,000
|
$
|
0.005
|
$
|
60,000
|
$
|
3.35
|
(1) In
accordance with Rule 416(a), the registrant is also registering hereunder an
indeterminate number of shares that may be issued and resold resulting from
stock splits, stock dividends or similar transactions.
(2) Estimated
in accordance with Rule 457(o) of the Securities Act of 1933 solely for the
purpose of computing the amount of the registration fee. The offering price has
been arbitrarily determined by Empire and bears no relationship to assets,
earnings, or any other valuation criteria. No assurance can be given that the
shares offered hereby will have a market value or that they may be sold at this,
or at any price.
(3) The
registration fee for securities to be offered to the public is based on an
estimate of the Proposed Maximum Aggregate Offering Price of the securities, and
such estimate is solely for the purpose of calculating the registration fee
pursuant to Rule 457(o).
(4) Represents
shares of the registrant’s common stock being registered for resale that have
been issued to the selling security holder named in this registration
statement.
The
registrant hereby amends this registration statement on such date or dates as
may be necessary to delay our 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 Section 8(a) may
determine.
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 SECTION 8(a), MAY
DETERMINE.
SUBJECT
TO COMPLETION, DATED February 26, 2010
PROSPECTUS
EMPIRE
POST MEDIA, INC.
12,000,000
SHARES OF COMMON STOCK
This
prospectus relates to the sale by Peter Dunn, the selling security holder, of an
aggregate of 12,000,000 shares of Empire Post Media, Inc. (referred to hereafter
as “Empire”, “we”, “us”, or “our”) common stock. The selling security holder
will offer his shares through this prospectus for a period of 90 days from the
date of this prospectus at a fixed price of $0.005 per share for an aggregate
amount of $60,000, assuming all shares are sold. These securities will be
offered for sale by the selling security holder identified in this prospectus in
accordance with the methods and terms described in the section of this
prospectus entitled "Plan of Distribution."
Our
common stock is not now, nor has ever been, traded on any market or securities
exchange, and we have not applied for listing or quotation on any public market.
Although we intend to seek to have our common stock quoted on the OTC Bulletin
Board, we cannot provide any assurance that our common stock will ever be quoted
on the OTC Bulletin Board or traded on any securities exchange. In
order to apply for quotation of our common stock, a market maker must file a
Form 15c-211 to allow the market maker to make a market in our shares of common
stock. At the date hereof, we are not aware that any market maker has any such
intention. We cannot provide any assurance that we will be able to locate a
market maker willing to file a Form 15c-211 for our company or that if a Form
15c-211 is filed that such an application for quotation will be
approved. Consequently, the purchaser in this offering may be
receiving an illiquid security.
Empire
will not receive any of the proceeds from the sale of these shares. Empire will
pay all expenses, except for the brokerage expenses, fees, discounts and
commissions, which will all be paid by the selling security holder, incurred in
connection with the offering described in this prospectus. Our common stock is
more fully described in the section of this prospectus entitled "Description of
Securities."
The
selling security holder is an "underwriter" within the meaning of the Securities
Act of 1933, as amended, with respect to all shares being offered
hereby.
AN
INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. See "Risk
Factors" on page __ for risks of an investment in the securities offered by this
prospectus, which you should consider before you purchase any
shares.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS
APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date
of this prospectus is ____________ ,
2010.
This
prospectus is not an offer to sell any securities other than the shares of
common stock offered hereby. This prospectus is not an offer to sell securities
in any circumstances in which such an offer is unlawful.
We have
not authorized anyone, including any salesperson or broker, to give oral or
written information about this offering, Empire, or the shares of common stock
offered hereby that is different from the information included in this
prospectus. You should not assume that the information in this prospectus, or
any supplement to this prospectus, is accurate at any date other than the date
indicated on the cover page of this prospectus or any supplement to
it.
TABLE
OF CONTENTS
Page
|
|
Prospectus
Summary
|
3
|
Risk
Factors
|
5
|
Use
of Proceeds to Issuer
|
11
|
Determination
of Offering Price
|
11
|
Dilution
|
12
|
Selling
Security Holder
|
12
|
Plan
of Distribution
|
12
|
Description
of Securities to be Registered
|
15
|
Stock
Transfer Agent
|
16
|
Interests
of Named Experts and Counsel
|
16
|
Information
with Respect to the Registrant
|
17
|
Description
of Property
|
20
|
Legal
Proceedings
|
20
|
Market
for Common Equity and Related Shareholder Matters
|
20
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operation
|
20
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
|
23
|
Directors
and Executive Officers
|
24
|
Executive
Compensation
|
26
|
Security
Ownership of Certain Beneficial Owners and Management
|
27
|
Interest
of Management and Others in Certain Transactions
|
28
|
Shares
Eligible for Future Sales
|
28
|
Disclosure
of Commission Position of Indemnification for Securities Act
Liabilities
|
28
|
Where
You Can Find More Information
|
28
|
Financial
Statements
|
F-1
|
2
PROSPECTUS
SUMMARY
THIS
SUMMARY HIGHLIGHTS INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS. IT DOES
NOT CONTAIN ALL OF THE INFORMATION THAT YOU SHOULD CONSIDER BEFORE INVESTING IN
OUR COMMON STOCK. YOU ARE URGED TO READ THE ENTIRE PROSPECTUS CAREFULLY,
INCLUDING THE SECTION ENTITLED "RISK FACTORS" AND OUR CONSOLIDATED FINANCIAL
STATEMENTS AND THE RELATED NOTES. IN THIS PROSPECTUS, WE REFER TO EMPIRE POST
MEDIA, INC. AS "WE," "US," "OUR," "EMPIRE" AND THE "COMPANY."
EMPIRE
Empire
Post Media, Inc. was founded in the State of Nevada on October 13, 2009. Empire
is currently marketing its services on a limited basis. Empire’s services
include most aspects of post-production, including, among other things, editing,
sound and music finishing, special effects, main and end titles, and mastering
to producers and owners of independent feature films; television movies,
specials and series; short subjects; and documentaries who have exhausted their
financial resources and budgets. Empire will subcontract the post-production
services to post-production companies, principally in the Southern California
area. Empire also intends to arrange third person financing for these
producers/owners, for these services. This will allow the producer or owner to
complete the film by deferring the post production costs and expenses until the
film is distributed and begins to generate revenue. Any and all financing may be
collateralized by the film and any license or distribution rights associated
therewith. There is no assurance that financing sources will accept such
collateral.
Management
believes that much of its initial business will come from the various
post-production companies that we will contract with for services as
cash-conscious producers attempt to spread out various aspects of
post-production costs on a future payment basis among multiple vendors in order
to complete their films. These post-production companies, as Empire’s
sub-contractors, will have the ability to capture the whole of post-production
work on a deferred payment basis, assuming the producer has acceptable
collateral. In addition, producers and/or owners who have exhausted their funds
completing principal photography and therefore not having the necessary funds
for post-production services and unable to raise monies elsewhere, would be a
likely client for our services.
Empire
is in the development stage and has a limited history of operations. The
Company’s expenditures to date are $22,297 which was for organizational costs
and expenses associated with this filing. The Company’s current “burn rate” is
approximately $4,000 per month. Other than some marketing costs and expenses
associated with being a public company estimated to be $20,000, we do not have
any other near term capital requirements. However, we plan to raise additional
capital at a future date, through a private placement or from our principal
shareholder, to build up our business by increasing our marketing program and
name recognition. There is no assurance that such additional capital will be
available to us.
GENERAL
Empire
started operations in October, 2009 and is in its early development stage.
Empire has not yet generated any revenues. Since its inception, in October,
2009, Empire has incurred losses of $22,297. As of November 30, 2009, Empire had
assets totaling $17,831 in cash and equipment liabilities of $16,128, resulting
in a Net Worth of $1,703. During this same period, Mr. Dunn, President of the
Company, received 19,500,000 shares of the Company’s common stock, valued at
$19,500 for services provided to the Company during the early stages of its
business.
We expect
to continue to incur losses for at least the next year. We do not expect to
generate sufficient revenue to cover our expenses, and we do not have sufficient
cash and cash equivalents to execute our plan of operations. We will need to
obtain additional financing to conduct our day-to-day operations and to fully
execute our business plan. We anticipate raising capital necessary to fund our
business through the future sale of equity securities although there is no
certainty that we will be able to raise the required funds (See "Plan of
Operation").
Our
independent auditors have added an explanatory paragraph to their report of our
financial statements for the period ended November 30, 2009, stating that our
net loss, lack of revenues and dependence on our ability to raise additional
capital to continue our business, raise substantial doubt about our ability to
continue as a going concern. Our financial statements and their explanatory
notes included as part of this prospectus assume that Empire will continue as a
going business. If we fail to obtain additional financing, either through an
offering of our securities or by obtaining loans, we may be forced to abandon
our planned business operations altogether.
Empire's
principal address is at 280 South Beverly Drive, Suite 205, Beverly Hills,
California 90212. Empire's telephone and facsimile number is (310)
472-5138.
3
Common
stock offered by selling security holder
|
12,000,000
shares of common stock. This number represents approximately 50% of our
current outstanding common stock.
|
|
Selling
security holder
|
Peter
Dunn
|
|
Offering
price
|
$0.005
|
|
Minimum
number of shares to be sold in this offering
|
None
|
|
Common
stock outstanding before the offering
|
24,000,000
shares
|
|
Common
stock outstanding after the offering
|
24,000,000
shares.
|
|
Terms
of the Offering
|
The
selling security holder will determine when and how he will sell the
common stock offered in this prospectus. See “Plan of
Distribution”.
|
|
Termination
of the Offering
|
The
offering will conclude upon the earliest of (i) such time as all of the
common stock has been sold pursuant to the registration statement or (ii)
within 60 days of the registration statement being declared
effective (iii) such time as all the selling security holder
determines to terminate this offering.
|
|
Use
of proceeds
|
Empire
will receive none of the proceeds. The selling security holder
will receive all of the proceeds.
|
|
Risk
Factors
|
The
Common Stock offered hereby involves a high degree of risk and should not
be purchased by investors who cannot afford the loss of their entire
investment. See “Risk Factors” beginning on page
_.
|
Information
regarding the selling security holder, the common shares being offered for sale
under this prospectus, and the times and manner in which he may offer and sell
those shares, is provided in the sections of this prospectus entitled "Selling
Security Holder" and "Plan of Distribution." The registration of common shares
pursuant to this prospectus does not necessarily mean that any of those shares
will ultimately be offered or sold by the selling security holder.
SUMMARY
OF FINANCIAL INFORMATION
The
following table provides summary financial statement data as of the fiscal year
ended November 30, 2009 and the period from Inception (October 13, 2009) through
November 30, 2009. The financial statement data as of the fiscal year ended
November 30, 2009 has been derived from our audited financial statements. The
results of operations for past accounting periods are not necessarily indicative
of the results to be expected for any future accounting period. The data set
forth below should be read in conjunction with “Management’s Discussion and
Analysis of Financial Condition and Results of Operations,” our financial
statements and the related notes included in this prospectus, and the statements
and related notes included in this prospectus.
BALANCE SHEET
|
|
AS OF
NOVEMBER 30, 2009
|
|
|
Total Assets
|
|
$
|
17,831
|
|
Total Liabilities
|
|
$
|
16,128
|
|
Shareholder’s
Equity
|
$
|
1,703
|
OPERATING DATA
|
|
OCTOBER 13, 2009
(INCEPTION) THROUGH NOVEMBER 30, 2009 |
||
Revenue
|
$
|
0.00
|
||
Net
Income (Loss)
|
$
|
(22,297
|
)
|
|
Net
Income (Loss) Per Share
|
$
|
( 0.00
|
)
|
4
Please
consider the following risk factors and other information in this prospectus
relating to our business and prospects before deciding to invest in our common
stock.
This
offering and any investment in our common stock involves a high degree of risk.
You should carefully consider the risks described below and all of the
information contained in this prospectus before deciding whether to purchase our
common stock. If any of the following risks actually occur, our business,
financial condition and results of operations could be harmed. The value of our
common stock could decline due to any of these risks, and you may lose all or
part of your investment.
Empire
considers the following to be the material risks for an investor regarding this
offering. Empire should be viewed as a high-risk investment and speculative in
nature. An investment in our common stock may result in a complete loss of the
invested amount. Please consider the following risk factors before deciding to
invest in our common stock.
RISKS RELATED TO EMPIRE'S
MARKET AND STRATEGY
WE
ARE A NEW COMPANY WITH NO OPERATING HISTORY AND WE FACE A HIGH RISK OF BUSINESS
FAILURE WHICH WOULD RESULT IN THE LOSS OF YOUR INVESTMENT.
We are a
development stage company formed recently to carry out the activities described
in this prospectus and thus have only a limited operating history upon which an
evaluation of its prospects can be made. We were incorporated on October 13,
2009 and to date have been involved primarily in the design of our business plan
and preliminary marketing of our services. We have not yet generated any
revenues from our business operations. Thus, there is no internal or
industry-based historical financial data upon which to estimate our planned
operating expenses.
Empire
expects that its results of operations may also fluctuate significantly in the
future as a result of a variety of market factors including, among others, the
entry of new competitors offering similar service; the availability of motivated
and qualified personnel; the creation and maintenance of our customer base;
pricing changes by us or our competitors, and specific economic conditions in
the financial markets. Accordingly, our future sales and operating results are
difficult to forecast.
As of the
date of this prospectus, we have earned no revenue. Failure to generate revenue
will cause us to go out of business, which could result in the complete loss of
your investment.
BECAUSE
WE ARE SMALL AND DO NOT HAVE MUCH CAPITAL, WE MUST LIMIT OUR MARKETING
ACTIVITIES. AS A RESULT, OUR REVENUES MAY BE DELAYED OR INSUFFICIENT TO OPERATE
PROFITABLY. IF WE DO NOT MAKE A PROFIT, WE MAY HAVE TO SUSPEND OR CEASE
OPERATIONS.
Due to
the fact we are small and do not have much capital, we must limit our marketing
activities to a relatively small number of potential customers having the
likelihood of purchasing our services. We intend to generate revenue through the
sale of our services. Because we will be limiting the scope of our marketing
activities, we may not be able to generate timely or sufficient sales to operate
profitably. If we cannot operate profitably, we may have to suspend or cease
operations.
WE
MAY BE UNABLE TO GAIN ANY SIGNIFICANT MARKET ACCEPTANCE FOR OUR SERVICES OR
ESTABLISH A SIGNIFICANT MARKET PRESENCE.
Empire's
growth strategy is substantially dependent upon its ability to market its
services successfully to prospective clients. However, its planned services may
not achieve significant acceptance. Such acceptance, if achieved, may not be
sustained for any significant period of time. Failure of Empire's services to
achieve or sustain market acceptance could have a materially adverse effect on
our business, financial conditions and the results of our
operations.
MANAGEMENT
MAY BE UNABLE TO IMPLEMENT THE BUSINESS STRATEGY
Although
Empire intends to pursue a strategy of marketing its services to the movie and
television industry, our business success depends on a number of factors. These
include: our ability to establish a significant customer base and maintain
favorable relationships with customers and partners; obtain adequate business
financing on favorable terms in order to finance the post-production services;
develop and maintain appropriate operating procedures, policies and systems;
hire, train and retain skilled employees. Our inability to manage any or all of
these factors could impair our ability to implement our business strategy
successfully, which could have a materially adverse effect on the results of
operations and financial condition.
5
If we are
successful in initiating our business plans, any extraordinary growth may place
a significant strain on management, financial, operating and technical
resources. Failure to manage this growth effectively could have a materially
adverse effect on Empire's financial condition or the results of its
operations.
EMPIRE'S
PRINCIPAL OFFICER AND DIRECTOR MAY NOT BE IN A POSITION TO DEVOTE A MAJORITY OF
HIS TIME TO EMPIRE’S BUSINESS, WHICH MAY RESULT IN PERIODIC INTERRUPTIONS AND
EVEN BUSINESS FAILURE.
Mr. Dunn,
the president and director, has other business interests and currently devotes
approximately 25% of his time to our operations. Our operations may be sporadic
and occur at times which are not convenient to Mr. Dunn, which may result in
periodic interruptions or suspensions of our business plan. If the demands of
Empire's business require Mr. Dunn’s full business time, he is prepared to
adjust his timetable to devote more time to Empire. However, he may not be able
to devote sufficient time to the management of the business, which may result in
periodic interruptions in implementing Empire's plans in a timely manner. Such
delays could have a significant negative effect on the success of the
business.
THE
INDUSTRY IN WHICH EMPIRE OPERATES IS HIGHLY COMPETITIVE
Empire
has identified a market opportunity for its services. Existing or new
competitors may introduce superior products, services, conditions and/or
benefits. This would infringe on our proposed customer base, have an adverse
affect upon our business and the results of our operations
The
post-production business and the financing industry are highly competitive
markets. We will compete with both large and small corporations already
providing services in this sector. Almost all of these companies have greater
financial and personnel resources than we do.
WE
ARE DEPENDENT ON KEY PERSONNEL.
Empire's
success will largely rely on the efforts and abilities of certain key personnel.
While Empire does not foresee any reason why such key personnel will not remain
with Empire, if for any reason they do not, Empire could be adversely affected.
Empire has not purchased key man life insurance for any of these
individuals.
RISKS RELATED TO OUR
FINANCIAL CONDITION
THE
AUDITOR’S REPORT STATES THERE IS SUBSTANTIAL UNCERTAINTY ABOUT THE ABILITY OF
EMPIRE TO CONTINUE ITS OPERATIONS AS A GOING CONCERN
In their
audit report dated December 15, 2009, our auditors have expressed an opinion
that substantial doubt exists as to whether we can continue as an ongoing
business. Because our current stockholders may be unwilling or unable to loan or
advance any additional capital to Empire we believe that if we do not raise
additional capital within 9 months of the effective date of this registration
statement, we may be required to suspend or cease the implementation of our
business plans. Therefore any purchaser of our shares may be
investing in a company that will not have the funds necessary to develop its
business strategies. As such we may have to cease operations and you could lose
your entire investment. See the November 30, 2009 Audited Financial Statements –
“Report of Independent Registered Public Accounting Firm". Because Empire has
been issued an opinion by its auditors that substantial doubt exists as to
whether it can continue as a going concern it may be more difficult to attract
investors.
SINCE
EMPIRE ANTICIPATES OPERATING EXPENSES WILL INCREASE PRIOR TO EARNING REVENUE, IT
MAY NEVER ACHIEVE PROFITABILITY
We
were incorporated on October 13, 2009 and we have not realized any revenues to
date. Empire anticipates an increase in its operating expenses, without
realizing any revenues from the sale of its services. Within the next 6 months,
Empire will have costs related to (i) the development of services, (ii)
administrative expenses and (iii) the expenses of this offering and continuing
costs associated with being a public company of between $24,000 and
$30,000. Unless Empire desires to finance its clients out of its own
available assets, instead of utilizing 3 rd party
lenders, there is currently no requirement to seek long term capital at this
time.
There is
no history upon which to base any assumption as to the likelihood that Empire
will prove successful. We cannot provide investors with any assurance that our
products will attract customers; generate any operating revenue or ever achieve
profitable operations. If we are unable to address these risks, there is a high
probability that our business can fail, which will result in the loss of your
entire investment.
6
OUR
BUSINESS WILL FAIL IF WE DO NOT OBTAIN ADEQUATE FINANCING, RESULTING IN THE
COMPLETE LOSS OF YOUR INVESTMENT
We will
require additional financing to initiate and sustain our business operations.
Currently, we do not have any arrangements for financing and can provide no
assurances to investors that we will be able to obtain any when required.
Obtaining additional financing will be subject to a number of factors, including
Empire's lack of revenue. These factors may have an affect on the timing,
amount, terms or conditions of additional financing and make such additional
financing unavailable to us. See "Description of Business."
No
assurance can be given that Empire will obtain access to capital markets in the
future or that adequate financing to satisfy the cash requirements of
implementing our business strategies will be available on acceptable terms. The
inability of Empire to gain access to capital markets or obtain acceptable
financing will have a material adverse effect upon the results of its operations
and its financial conditions. The proceeds from the sale of the securities
offered in this registration statement will go directly to the selling security
holder and not to Empire. As such, this offering might negatively affect
Empire's ability to raise needed funds through a primary offering of Empire's
securities in the future.
WE
MAY INCUR SIGNIFICANT COSTS TO BE A PUBLIC COMPANY TO ENSURE COMPLIANCE WITH
U.S. CORPORATE GOVERNANCE AND ACCOUNTING REQUIREMENTS AND WE MAY NOT BE ABLE TO
ABSORB SUCH COSTS.
We may
incur significant costs associated with our public company reporting
requirements, costs associated with newly applicable corporate governance
requirement, including requirements under the Sarbanes-Oxley Act of 2002 and
other rules implemented by the SEC. Until the Company is in a position to employ
more experts, we expect all of these applicable rules and regulations to
significantly increase our legal and financial compliance costs and to make some
activities more time consuming and costly. With only three part-time employees,
it is difficult to predict how long it will take to complete management’s
assessment of the effectiveness of our internal control over financial reporting
for each year. As a result, we may not be able to complete the assessment and
process on a timely basis. This may affect our standing as a reporting company
or the market price of our shares. We also expect that these applicable rules
and regulations may make it more difficult and more expensive for us to obtain
director and officer liability insurance and we may be required to accept
reduced policy limits and coverage or incur substantially higher costs to obtain
the same or similar coverage. As a result, it may be more difficult for us to
attract and retain qualified individuals to serve on our board of directors or
as executive officers. We are currently evaluating and monitoring developments
with respect to these newly applicable rules, and we cannot predict or estimate
the amount of additional costs we may incur or the timing of such costs. In
addition, we may not be able to absorb these costs of being a public company,
which will negatively affect our business operations.
OUR
OPERATING RESULTS MAY PROVE UNPREDICTABLE
Our
operating results are likely to fluctuate significantly in the future due to a
variety of factors, many of which we have no control over. Factors that may
cause our operating results to fluctuate significantly include: our inability to
generate enough working capital from future equity sales; the level of
commercial acceptance by the public of our services; fluctuations in the demand
for our services and capital expenditures relating to expansion of our business,
operations and infrastructure and general economic conditions. If realized, any
of these risks could have a materially adverse effect on our business, financial
condition and operating results.
RISKS RELATED TO THIS
OFFERING
INVESTING
IN EMPIRE IS HIGHLY SPECULATIVE AND COULD RESULT IN THE ENTIRE LOSS OF YOUR
INVESTMENT
Purchasing
the offered shares is highly speculative and involves significant risk. The
offered shares should not be purchased by any person who cannot afford to lose
their entire investment. Our business objectives are also speculative, and it is
possible that we would be unable to accomplish them. Empire's shareholders may
be unable to realize a substantial or any return on their purchase of the
offered shares and may lose their entire investment. For this reason, each
prospective purchaser of the offered shares should read this prospectus and all
of its exhibits carefully and consult with their attorney, business and/or
investment advisor.
INVESTING
IN OUR COMPANY MAY RESULT IN AN IMMEDIATE LOSS BECAUSE BUYERS WILL PAY MORE FOR
OUR COMMON STOCK THAN THE PRO RATA PORTION OF THE ASSETS ARE WORTH
Empire
has only been recently formed and has only a limited operating history and no
earnings, therefore, the price of the offered shares is not based on any data.
On October 15, 2009, the selling security holder was issued 22,460,000 in
exchange for cash and services rendered valued at $22,460 or $.001 per share.
The offering price and other terms and conditions regarding Empire's shares have
been arbitrarily determined and do not bear any relationship to current assets,
earnings, book value or any other objective criteria of value. No investment
banker, appraiser or other independent third party has been consulted concerning
the offering price for the shares or the fairness of the offering price used for
the shares.
The
arbitrary offering price of $0.005 per common share as determined herein is
substantially higher than the net tangible book value per share of Empire's
common stock and the price per share paid by the selling security holder.
Empire’s assets do not substantiate a share price of $0.005. This premium in
share price applies to the terms of this offering and does not attempt to
reflect any forward looking share price subsequent to Empire obtaining a listing
on any exchange, or becoming quoted on the OTC Bulletin Board.
BECAUSE
EMPIRE HAS 60, 000,000 AUTHORIZED SHARES, MANAGEMENT COULD ISSUE ADDITIONAL
SHARES, DILUTING THE CURRENT SHAREHOLDERS' EQUITY
Empire
has 60,000,000 authorized shares, consisting of 50,000,000 common stock, of
which only 24,000,000 are currently issued and outstanding and will remain
issued and outstanding after this offering terminates, and 10,000,000 shares of
preferred stock, of which no such shares have been issued. Empire's management
could and intends to, without the consent of the existing shareholders, issue
substantially more shares, causing a large dilution in the equity position of
Empire's current shareholders. Additionally, large share issuances would
generally have a negative impact on Empire's share price. It is possible that,
due to additional share issuance, you could lose a substantial amount, or all,
of your investment.
7
Empire's
president owns 93.6% of the outstanding shares and will own approximately 43.6%
after this offering is completed. As a result, he will have effective control of
Empire and be able to choose all of its directors. His interests may differ from
those of other stockholders. Factors that could cause his interests to differ
from the other shareholders include the impact of corporate transactions on the
timing of business operations and his ability to continue to manage the business
given the amount of time he is able to devote to Empire.
All
decisions regarding the management of Empire's affairs will be made mainly by
Mr. Dunn. Purchasers of the offered shares may not participate in the management
of Empire and, therefore, are dependent upon his management abilities. The only
assurance that the shareholders of Empire, including purchasers of the offered
shares, have, that it's primary officer and director will not abuse his
discretion in executing Empire's business affairs, is his fiduciary obligation
and business integrity. Such discretionary powers include, but are not limited
to, decisions regarding all aspects of business operations, corporate
transactions and financing. Accordingly, no person should purchase the offered
shares unless willing to entrust all aspects of management to the President, or
his successors. Potential purchasers of the offered shares must carefully
evaluate the personal experience and business performance of Empire's
management.
THERE
IS NO ACTIVE TRADING MARKET FOR OUR COMMON STOCK AND IF A MARKET FOR OUR COMMON
STOCK DOES NOT DEVELOP, OUR INVESTORS MAY BE UNABLE TO SELL THEIR SHARES IN A
TIMELY MANNER.
There is
currently no active trading market for our common stock and such a market may
not develop or be sustained. We currently plan to have our common stock quoted
on the OTC Bulletin Board. In order to do this, a market maker must file a Form
15c-211 to allow the market maker to make a market in shares of our common
stock. At the date hereof, we are not aware that any market maker has any such
intention. We cannot provide our investors with any assurance that our common
stock will be quoted on the OTC Bulletin Board or, if quoted, that a public
market will materialize. Further, the OTC Bulletin Board is not a listing
service or exchange, but is instead a dealer quotation service for subscribing
members. If our common stock is not quoted on the OTC Bulletin Board or if a
public market for our common stock does not develop, then investors may not be
able to resell the shares of our common stock that they have purchased making
this an illiquid investment. If we establish a trading market for our common
stock, the market price of our common stock may be significantly affected by
factors such as actual or anticipated fluctuations in our operating results,
general market conditions and other factors. In addition, the stock market has
from time to time experienced significant price and volume fluctuations that
have particularly affected the market prices of the shares of developmental
stage companies like Empire, which may adversely affect the market price of our
common stock in a material manner.
BECAUSE
OUR COMMON STOCK IS DEEMED A LOW-PRICED “PENNY” STOCK, AN INVESTMENT IN OUR
COMMON STOCK SHOULD BE CONSIDERED HIGH RISK AND SUBJECT TO MARKETABILITY
RESTRICTIONS.
Empire's
common shares may be deemed to be "penny stock" as that term is defined in
Regulation Section "240.3a51-1" of the Securities and Exchange Commission (the
"SEC"). Penny stocks are stocks: (a) with a price of less than U.S. $5.00 per
share; (b) that are not traded on a "recognized" national exchange; (c) whose
prices are not quoted on the NASDAQ automated quotation system (NASDAQ - where
listed stocks must still meet requirement (a) above); or (d) in issuers with net
tangible assets of less than U.S. $2,000,000 (if the issuer has been in
continuous operation for at least three years) or U.S. $5,000,000 (if in
continuous operation for less than three years), or with average revenues of
less than U.S. $6,000,000 for the last three years.
Section
"15(g)" of the United States Securities Exchange Act of 1934, as amended, and
Regulation Section "240.15g(c)2" of the SEC require broker dealers dealing in
penny stocks to provide potential investors with a document disclosing the risks
of penny stocks and to obtain a manually signed and dated written receipt of the
document before effecting any transaction in a penny stock for the investor's
account. Potential investors in Empire's common shares are urged to obtain and
read such disclosure carefully before purchasing any common shares that are
deemed to be "penny stock". See “Plan of Distribution – Penny Stock
Regulations”.
THE
FINANCIAL INDUSTRY REGULATORY AUTHORITY SALES PRACTICE REQUIREMENTS MAY ALSO
LIMIT A STOCKHOLDER’S ABILITY TO BUY AND SELL OUR STOCK.
In
addition to the “penny stock” rules referred to above, the Financial Industry
Regulatory Authority, which we refer to as FINRA, has adopted rules that require
that in recommending an investment to a customer, a broker-dealer must have
reasonable grounds for believing that the investment is suitable for that
customer. Prior to recommending speculative low priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to
obtain information about the customer’s financial status, tax status, investment
objectives and other information. Under interpretations of these rules, the
FINRA believes that there is a high probability that speculative low priced
securities will not be suitable for at least some customers. The FINRA
requirements make it more difficult for broker-dealers to recommend that their
customers buy our common stock, which may limit your ability to buy and sell our
stock and have an adverse effect on the market for shares of our common
stock.
8
THE
SALE OF OUR COMMON STOCK COULD CAUSE THE PRICE OF OUR COMMON STOCK TO DECLINE.
THIS MAY RESULT IN SUBSTANTIAL LOSSES TO INVESTORS IF INVESTORS ARE UNABLE TO
SELL THEIR SHARES AT OR ABOVE THEIR PURCHASE PRICE.
A sale of
shares under this offering at any given time could cause the trading price of
our common stock to decline. The sale of our common stock under this offering
could make it more difficult for us to sell equity securities in the future at a
time and at a price that we might not otherwise want to affect
sales.
THE
VALUE OF OUR COMMON STOCK MAY DECREASE DUE TO FACTORS BEYOND OUR CONTROL. THESE
FACTORS MAY RESULT IN SUBSTANTIAL LOSSES TO INVESTORS IF INVESTORS ARE UNABLE TO
SELL THEIR SHARES AT OR ABOVE THEIR PURCHASE PRICE.
The
trading price of our common stock is subject to significant fluctuations due to
a number of factors, including:
|
*
|
our
status as a development stage company with a limited operating
history
|
|
*
|
no
revenues to date, which may make risk-averse investors more inclined to
sell their shares on the market more quickly and at greater discounts than
may be the case with the shares of a seasoned issuer in the event of
negative news or lack of progress and announcements of new products by us
or our competitors
|
|
*
|
the
timing and development of products and services that we may
offer
|
|
*
|
general
and industry-specific economic
conditions
|
|
*
|
actual
or anticipated fluctuations in our operating
results
|
|
*
|
our
capital commitments
|
|
*
|
the
loss of any of our key management
personnel
|
In
addition, the financial markets have experienced extreme price and volume
fluctuations. The market prices of securities in this industry have been highly
volatile and may continue to be highly volatile in the future, some of which may
be unrelated to the operating performance of particular companies. The sale or
attempted sale of a large amount of common stock into the market may also have a
significant impact on the trading price of our common stock. Many of these
factors are beyond our control and may decrease the market price of our common
stock, regardless of our operating performance. In the past, securities class
action litigation has often been brought against companies that experience
volatility in the market price of their securities. Whether or not meritorious,
litigation brought against us could result in substantial costs, divert
management's attention and resources and harm our financial condition and
results of operations.
WE
DO NOT ANTICIPATE PAYING ANY DIVIDENDS IN THE FORESEEABLE FUTURE, WHICH MAY
REDUCE THE RETURN ON YOUR INVESTMENT IN OUR COMMON STOCK.
To date,
Empire has not paid any cash dividends on its Common Stock and does not
anticipate paying any such dividends in the foreseeable future. Payment of
future dividends will depend on earnings and the capital requirements of Empire,
and Empire's debt facilities and other factors considered appropriate by
Empire's Executive Officers and Directors. We cannot guarantee that we will, at
any time, generate sufficient profits or surplus cash that would be available
for distribution as a dividend to the holders of our common stock. Our current
plans are to use any profits that we may generate, if we generate any profits at
all, to fund our operations. Therefore, any return on your investment would
derive from an increase in the price of our stock, which may or may not
occur.
9
WE WILL NEED TO RAISE
ADDITIONAL CAPITAL AND, IN SO DOING, WILL FURTHER DILUTE THE TOTAL NUMBER OF
SHARES ISSUED AND OUTSTANDING.
We will
need to raise additional capital by issuing additional shares of common stock
and will, thereby, increase the number of common shares outstanding. There can
be no assurance that this additional capital will be available and, if the
capital is available at all, that it will be available on terms acceptable to
us. The issuances of additional equity securities by Empire may result in a
significant dilution in the equity interests of its current security holders.
Alternatively, we may have to borrow large sums, and assume debt obligations
that require us to make substantial interest and capital payments. If we are
able to raise additional capital, we cannot assure that it will be on terms that
enhance the value of our common shares. If we are unable to obtain financing in
the amounts and on terms deemed acceptable, the business and future success will
almost certainly be adversely affected.
IF
WE ARE DISSOLVED, IT IS UNLIKELY THAT THERE WILL BE SUFFICIENT ASSETS REMAINING
TO DISTRIBUTE TO THE SHAREHOLDERS.
In the
event of our dissolution, any proceeds realized from the liquidation of our
assets will be distributed to the shareholders only after all claims of our
creditors and preferred shareholders, if any, are satisfied. In that case, the
ability of purchasers of the offered common shares to recover any portion of his
or her purchase price for the offered shares will depend on the amount of funds
realized and the claims to be satisfied there from.
IF
WE DO NOT REGISTER OUR COMMON STOCK UNDER SECTION 12 OF THE SECURITIES EXCHANGE
ACT OF 1934, WE WILL NOT BE A FULLY REPORTING COMPANY. IF SO, POTENTIAL
INVESTORS IN OUR COMMON STOCK WILL NOT HAVE ACCESS TO CERTAIN INFORMATION THAT
IS REQUIRED TO BE DISCLOSED BY A FULLY REPORTING COMPANY AND DIRECTORS, OFFICERS
AND CERTAIN STOCKHOLDERS OF A FULLY REPORTING COMPANY.
Subsequent
to the effective date of our registration statement, we intend to register our
common stock under Section 12 of the Securities Act of 1934 and therefore become
a fully reporting company with the SEC
If we do
not register our common stock under Section 12 of the Securities Exchange Act of
1934 (the “Exchange Act”), we will be considered a Section 15(d) filer rather
than a fully reporting company. In such a case, we will be only required to file
annual reports on Form 10-K containing audited financial statements following
the end of our fiscal year, quarterly reports on Form 10-Q containing unaudited
financial statements for the first three quarters of our fiscal year following
the end of such fiscal quarter, and current reports on Form 8-K shortly after
the occurrence of certain material events with the SEC. We will also be required
to comply with Rules 13e-3 and 13e-4 of the Exchange Act relating to going
private and tender offers.
In such a
case, unlike a fully reporting company, we will not be subject to the proxy
rules and, and therefore, we will not be required to send proxy statements or
information statements to our stockholders or file them with the SEC. Also the
short swing reporting and profit recovery rules will not be applicable to our
directors and officers and any person who is the beneficial owner of more than
10% of the shares of our common stock. In addition, any person who acquires
beneficial ownership of more than 5% of the shares of our common stock will not
be required to report such ownership to the SEC by filing a Schedule 13D or
Schedule 13G or provide a copy of such filing to us. Therefore, potential
investors in our common stock will not have access to certain information that
is required to be disclosed by a fully reporting company and directors, officers
and certain stockholders of a fully reporting company.
AS
WE MAY BE UNABLE TO CREATE OR SUSTAIN A MARKET FOR OUR SHARES, THEY MAY BE
EXTREMELY ILLIQUID
If no
market develops, the holders of our common stock may find it difficult or
impossible to sell their shares. Further, even if a market develops, our common
stock will be subject to fluctuations and volatility and Empire cannot apply
directly to be quoted on the FINRA Over-The-Counter Bulletin Board (OTCBB).
Additionally, the stock may be listed or traded only to the extent that there is
interest by broker-dealers in acting as a market maker in Empire's stock.
Despite Empire's efforts, it may not be able to convince any broker/dealers to
act as market-makers and make quotations on the OTC Bulletin Board. Empire may
consider pursuing a listing on the OTCBB after this registration becomes
effective and this is completed.
KEY
MANAGEMENT PERSONNEL MAY LEAVE EMPIRE WHICH COULD ADVERSELY AFFECT THE ABILITY
OF EMPIRE TO CONTINUE OPERATIONS.
Because
Empire is entirely dependent on the efforts of its president and director, his
departure or the loss of other key personnel in the future, could have a
materially adverse effect on the business. Empire believes that all commercially
reasonable efforts have been made to minimize the risks associated with the
departure by key personnel from service. However, there is no guarantee that
replacement personnel, if any, will help Empire to operate profitably. Empire
does not maintain key person life insurance on its sole officer and
director.
10
FORWARD-LOOKING
STATEMENTS
This
prospectus contains certain forward-looking statements regarding management's
plans and objectives for future operations, including plans and objectives
relating to our planned entry into our service business. The forward-looking
statements and associated risks set forth in this prospectus include or relate
to, among other things, (a) our projected profitability, (b) our growth
strategies, (c) anticipated trends in our industry, (d) our ability to obtain
and retain sufficient capital for future operations, and (e) our anticipated
needs for working capital. These statements may be found under "Management's
Discussion and Analysis or Plan of Operation" and "Description of Business," as
well as in this prospectus generally. Actual events or results may differ
materially from those discussed in these forward-looking statements as a result
of various factors, including, without limitation, the risks outlined under
"Risk Factors" and matters described in this prospectus generally. In light of
these risks and uncertainties, the forward-looking statements contained in this
prospectus may not in fact occur.
The
forward-looking statements herein are based on current expectations that involve
a number of risks and uncertainties. Such forward-looking statements are based
on the assumptions that we will be able to continue our business strategies on a
timely basis, that we will attract customers, that there will be no materially
adverse competitive conditions under which our business operates, that our sole
officer and director will remain employed as such, and that our forecasts
accurately anticipate market demand. The foregoing assumptions are based on
judgments with respect to, among other things, future economic, competitive and
market conditions, and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond our control.
Accordingly, although we believe that the assumptions underlying the
forward-looking statements are reasonable, any such assumption could prove to be
inaccurate and therefore there can be no assurance that the results contemplated
in forward-looking statements will be realized. In addition, as disclosed
elsewhere in this "Risk Factors" section of this prospectus, there are a number
of other risks inherent in our business and operations, which could cause our
operating results to vary markedly and adversely from prior results or the
results contemplated by the forward-looking statements. Increases in the cost of
our services, or in our general or administrative expenses, or the occurrence of
extraordinary events, could cause actual results to vary materially from the
results contemplated by these forward-looking statements.
Management
decisions, including budgeting, are subjective in many respects and subject to
periodic revisions in order to reflect actual business conditions and
developments. The impact of such conditions and developments could lead us to
alter our marketing, capital investment or other expenditures and may adversely
affect the results of our operations. In light of the significant uncertainties
inherent in the forward-looking information included in this prospectus, the
inclusion of such information should not be regarded as a representation by us
or any other person that our objectives or plans will be achieved.
INFORMATION
REGARDING SHARES BEING OFFERED FOR SALE UNDER THIS PROSPECTUS, AND THE TIMES AND
MANNER IN WHICH THE SELLING SECURITY HOLDER MAY OFFER AND SELL THOSE SHARES, IS
PROVIDED IN THE SECTIONS OF THIS PROSPECTUS ENTITLED "SELLING SECURITY HOLDER"
AND "PLAN OF DISTRIBUTION." EMPIRE WILL NOT RECEIVE ANY OF THE PROCEEDS FROM
THESE SALES. THE REGISTRATION OF COMMON SHARES PURSUANT TO THIS PROSPECTUS DOES
NOT NECESSARILY MEAN THAT ANY OF THOSE SHARES WILL ULTIMATELY BE OFFERED OR SOLD
BY THE SELLING SECURITY HOLDER.
USE
OF PROCEEDS TO ISSUER
We will
not receive any proceeds from the sale of the shares by the selling security
holder. All proceeds from the sale of the shares offered hereby will be for the
account of the selling security holder, as described below in the sections
entitled "Selling Security Holder" and "Plan of Distribution."
DETERMINATION
OF OFFERING PRICE
The
selling security holder may sell his shares of our common stock at a fixed price
of $0.005 per share pursuant to this prospectus. In the future he may
sell shares of our common stock, as and if quoted on the OTC Bulletin Board, or
listed for trading or quoted on any other public market, other than quotation in
the pink sheets, and thereafter at prevailing market prices or privately
negotiated prices. Our common stock is not now, nor has ever been, traded on any
market or securities exchange and we have not applied for listing or quotation
on any public market. We cannot provide our investors with any assurance that
our common stock will ever be quoted on the OTC Bulletin Board or traded on any
exchange. The offering price of $0.005 per share has been determined arbitrarily
by us and does not have any relationship to any established criteria of value,
such as book value or earning per share. Additionally, because we have no
significant operating history and have not generated any material revenues to
date, the price of the common stock determined by us is not based on past
earnings, nor is the price of the common stock indicative of the current market
value of the assets owned by us. No valuation or appraisal has been prepared for
our business and potential business expansion. On October 15, 2009, Empire
issued 22,460,000 shares to the selling security holder in exchange or cash and
services rendered valued at $22,460 or $.001 per share.
11
DILUTION
The
common stock to be sold by the selling security holder is common stock that is
currently issued and outstanding. Accordingly, there will be no further dilution
to our existing shareholders.
SELLING
SECURITY HOLDER
The
following table sets forth the name of the selling security holder who may sell
his shares under this prospectus from time to time. In addition, the following
table provides certain information with respect to the selling security holders’
ownership of our securities as of the date of this prospectus, the total number
of securities he may sell under this prospectus from time to time, and the
number of securities he will own thereafter assuming no other acquisitions or
dispositions of our securities. The selling security holder can offer all, some
or none of his securities, thus we have no way of determining the number he will
hold after this offering. Therefore, we have prepared the table below on the
assumption that the selling security holder will sell all shares covered by this
prospectus.
Other
than the costs of preparing this prospectus and a registration fee to the SEC,
we are not paying any costs relating to the sales by the selling security
holder.
We may
amend or supplement this prospectus from time to time to update the disclosure
set forth herein. See our discussion entitled "Plan of Distribution" for further
information regarding the selling security holders’ method of distribution of
these shares.
Empire
issued 22,460,000 shares of common stock to its founder, Peter Dunn, on October
15, 2009 with a value of $0.001 per share for a total of $22,460.00. These
shares were issued pursuant to Section 4(2) of the Securities Act. The
22,460,000 shares of common stock are restricted shares as defined in the
Securities Act.
Beneficial Ownership
Before Offering
|
Number of Shares
|
Beneficial Ownership
After Offering
|
||||||||||||||||||
Name of Selling Stockholder
|
Number of Shares
|
Percent
|
Being Offered
|
Number of Shares
|
Percent
|
|||||||||||||||
Peter
Dunn (1)
|
22,460,000
|
93.6
|
%
|
12,000,000
|
10,460,000
|
43.6
|
%
|
(1) Peter
Dunn is the founder, President, Chief Financial Officer, Principal Accounting
Officer, and a Director of the Company.
PLAN
OF DISTRIBUTION
We are
registering the shares currently held by our principal shareholder to permit him
and his transferees or other successors in interest to offer the shares from
time to time. We will not offer any shares on behalf of Empire, and we will not
receive any of the proceeds from any sales of shares by such selling security
holder. The price at which the selling security holder may sell the shares
pursuant to this prospectus has arbitrarily been determined by the selling
security holder to be at $0.005 per share. The selling security holder and any
of his pledgees, assignees and successors-in-interest may, from time to time,
sell any or all of their registered shares of common stock on any stock exchange
market or trading facility on which our shares may be traded or in private
transactions. The selling security holder is an “underwriter” within the meaning
of the Securities Act of 1933, as amended, with respect to the shares being
offered by him.
The
selling security holders, which as used herein includes donees, pledgees,
transferees or other successors-in-interest selling shares of common stock or
interests in shares of common stock received after the date of this prospectus
from a selling security holder as a gift, pledge, partnership distribution or
other transfer, may, from time to time sell, transfer or otherwise dispose of
any or all of their shares of common stock or interests in shares of common
stock on any stock exchange, market or trading facility on which the shares are
traded or in private transactions, if our shares are ever approved for trading
on an exchange or by other means. In the event that any donee, pledgee,
transferee or other successor-in-interest sells shares received from a person
set forth on the “Selling Security Holder” table after the date of this
prospectus, we will amend this prospectus by filing a post effective amendment
to include the names of such donee, pledgee, transferee or other
successor-in-interest selling such shares and disclose the applicable
compensation arrangements.
12
If our
shares are approved for such trading, as to which we cannot provide any
assurance, these dispositions may be at fixed prices, at prevailing market
prices at the time of sale, at prices related to the prevailing market price, at
varying prices determined at the time of sale, or at negotiated prices. The
selling security holders may use any one or more of the following methods when
disposing of shares or interests therein if our shares are approved for listing
on an exchange or for trading on the OTC Bulletin Board:
●
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
●
|
block
trades in which the broker-dealer will attempt to sell the shares as
agent, but may position and resell a portion of the block as principal to
facilitate the transaction;
|
●
|
purchases
by a broker-dealer as principle and resale by the broker-dealer for its
account;
|
●
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
●
|
privately
negotiated transaction;
|
●
|
broker-dealers
may agree with the selling security holders to sell a specified number of
such shares at a stipulated price per
share;
|
●
|
specified
number of such shares at a stipulated price per
share;
|
●
|
a
combination of any such methods of sale;
and
|
●
|
any
other method permitted pursuant to applicable
law.
|
As of the
date of this prospectus, we have no information on the manner or method by which
the selling security holder may intend to sell shares. The selling security
holder has the sole and absolute discretion not to accept any purchase offer or
make or not make any sale of shares if they deem the purchase price to be
unsatisfactory at any particular time.
If a
trading market for our common stock develops, the selling security holder may
also sell the shares directly to market makers acting as principals and/or
broker-dealers acting as agents for themselves or their customers. Such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the selling security holders and/or the purchasers of shares
for whom such broker-dealers may act as agents or to whom they sell as
principal, or both, which compensation as to a particular broker-dealer might be
in excess of customary commissions. Market makers and block purchasers
purchasing the shares will do so for their own account and at their own risk. It
is possible that the selling security holder will attempt to sell shares of
common stock in block transactions to market makers or other purchasers at a
price per share which, pursuant to this prospectus, may be below the then market
price. We cannot assure you that all or any of the shares offered by this
prospectus will be sold by the selling security holder. The selling security
holder and any brokers, dealers or agents, upon effecting the sale of any of the
shares offered by this prospectus, may be deemed "underwriters" as that term is
defined under the Securities Act or the Securities Exchange Act of 1934, or the
rules and regulations thereunder.
The
selling security holder, alternatively, may sell all or any part of the shares
offered by this prospectus through an underwriter. No selling security holder
has entered into an agreement with a prospective underwriter. If a selling
security holder enters into such an agreement or agreements, the relevant
details will be set forth in a supplement or revision to this
prospectus.
Under the
regulations of the Securities Exchange Act of 1934, any person engaged in a
distribution of the shares offered by this prospectus may not simultaneously
engage in market making activities with respect to our common stock during the
applicable "cooling off" periods prior to the commencement of such distribution.
In addition, and without limiting the foregoing, the selling security holder
will be subject to applicable provisions, rules and regulations of the
Securities Exchange Act of 1934 and the rules and regulations thereunder, which
provisions may limit the timing of future purchases and sales of common stock by
the selling security holder.
We have
advised the selling security holder that, during such time as he may be engaged
in a distribution of any of the shares we are registering on their behalf in
this registration statement, he is required to comply with Regulation M as
promulgated under the Securities Exchange Act of 1934. In general, Regulation M
precludes any selling security holders, any affiliated purchasers and any
broker-dealer or other person who participates in such distribution from bidding
for or purchasing, or attempting to induce any person to bid for or purchase any
security which is the subject of the distribution until the entire distribution
is complete. Regulation M defines a "distribution" as an offering of securities
that is distinguished from ordinary trading activities by the magnitude of the
offering and the presence of special selling efforts and selling methods.
Regulation M also defines a "distribution participant" as an underwriter,
prospective underwriter, broker, dealer, or other person who has agreed to
participate or who is participating in a distribution. Our officers and
directors, along with affiliates, will not engage in any hedging, short, or any
other type of transaction covered by Regulation M. Regulation M prohibits any
bids or purchases made in order to stabilize the price of a security in
connection with the distribution of that security, except as specifically
permitted by Rule 104 of Regulation M. These stabilizing transactions may cause
the price of the common stock to be higher than it would otherwise be in the
absence of those transactions. We have advised the selling security holder that
stabilizing transactions permitted by Regulation M allow bids to purchase our
common stock so long as the stabilizing bids do not exceed a specified maximum,
and that Regulation M specifically prohibits stabilizing that is the result of
fraudulent, manipulative, or deceptive practices. The selling security holder
and distribution participants will be required to consult with their own legal
counsel to ensure compliance with Regulation M.
13
Prior to
the date of this prospectus, there has not been any established trading market
for our common stock. Following the consummation of this offering, we do not
anticipate that any such trading market will develop. Accordingly, purchasers of
our shares in this offering should be prepared to hold those shares
indefinitely. We will seek a market maker to sponsor our common stock on the OTC
Bulletin Board. Application will then be made by the market maker to sponsor our
shares of common stock on the OTC Bulletin Board. No market maker has yet
undertaken to sponsor our common stock on the OTC Bulletin Board, and there can
be no assurance that any market maker will make such an application or if a
market does develop for our common stock as to the prices at which the our
common stock will trade, if at all. Until our common stock is fully distributed
and an orderly market develops in our common stock, the price at which it trades
may fluctuate significantly. Prices for our common stock will be determined in
the marketplace and may be influenced by many factors, including the depth and
liquidity of the market for shares of our common stock, developments affecting
our businesses generally, including the impact of the factors referred to in
"Risk Factors," on page __, above, investor perception of Empire and general
economic and market conditions. No assurances can be given that an orderly or
liquid market will ever develop for the shares of our common stock.
Shares of
common stock distributed pursuant to this prospectus will be freely
transferable, except for shares of our common stock received by persons who may
be deemed to be "affiliates" of Empire under the Securities Act. Persons who may
be deemed to be affiliates of Empire generally include individuals or entities
that control, are controlled by or are under common control with us, and may
include our senior officers and directors, as well as principal stockholders.
Persons who are affiliates will be permitted to sell their shares of common
stock only pursuant to an effective registration statement under the Securities
Act or an exemption from the registration requirements of the Securities Act,
such as the exemption afforded by Section 4(1) of the Securities Act or Rule 144
adopted under the Securities Act.
Penny
Stock Regulations
Our
common stock will be considered a "penny stock" as defined by Section 3(a)(51)
and Rule 3a51-1 under the Securities Exchange Act of 1934. A penny stock is any
stock that:
●
|
sells
for less than $5 a share,
|
●
|
is
not listed on an exchange, and
|
●
|
is
not a stock of a "substantial
issuer."
|
We are
not now a "substantial issuer" and cannot become one until we have net tangible
assets of at least $5 million, which we do not now have.
Statutes
and SEC regulations impose strict requirements on brokers that recommend penny
stocks. Before a broker-dealer can recommend and sell a penny stock to a new
customer who is not an institutional accredited investor, the broker-dealer must
obtain from the customer information concerning the person's financial
situation, investment experience and investment objectives. Then, the
broker-dealer must "reasonably determine"
●
|
that
transactions in penny stocks are suitable for the person
and
|
●
|
the
person, or his/her advisor, is capable of evaluating the risks in penny
stocks.
|
After
making this determination, the broker-dealer must furnish the customer with a
written statement describing the basis for this suitability determination. The
customer must sign and date a copy of the written statement and return it to the
broker-dealer. Finally the broker-dealer must also obtain from the customer a
written agreement to purchase the penny stock, identifying the stock and the
number of shares to be purchased. Compliance with these requirements can often
delay a proposed transaction and can result in many broker-dealer firms adopting
a policy of not allowing their representatives to recommend penny stocks to
their customers.
14
The above
penny stock regulatory scheme is a response by the Congress and the SEC to
abuses in the marketing of low-priced securities by “boiler room” operators. The
scheme imposes market impediments on the sale and trading of penny stocks. It
limits a stockholder's ability to resell a penny stock.
Our
management believes that the market for penny stocks has suffered from patterns
of fraud and abuse. Such patterns include:
●
|
Control
of the market for the security by one or a few broker-dealers that are
often related to the promoter or
issuer;
|
●
|
Manipulation
of prices through prearranged matching of purchases and sales and false
and misleading press releases;
|
●
|
“Boiler
room” practices involving high pressure sales tactics and unrealistic
price projections by inexperienced sales
persons;
|
●
|
Excessive
and undisclosed bid-ask differentials and markups by selling
broker-dealers; and
|
●
|
Wholesale
dumping of the same securities by promoters and broker-dealers after
prices have been manipulated to a desired level, along with the inevitable
collapse of those prices with consequent investor
losses.
|
State
Securities – Blue Sky Laws
Transfer
of our common stock may also be restricted under the securities laws or
securities regulations promulgated by various states and foreign jurisdictions,
commonly referred to as "Blue Sky" laws. Absent compliance with such individual
state laws, our common stock may not be traded in such jurisdictions. Because
the securities registered hereunder have not been registered for resale under
the blue sky laws of any state, the holders of such shares and persons who
desire to purchase them in any trading market that might develop in the future,
should be aware that there may be significant state blue-sky law restrictions
upon the ability of investors to resell the securities and of purchasers to
purchase the securities. Accordingly, investors may not be able to liquidate
their investments and should be prepared to hold the common stock for an
indefinite period of time.
DESCRIPTION
OF SECURITIES TO BE REGISTERED
Capital
Stock
Our
authorized capital stock consists of 50,000,000 shares of common stock, par
value $0.001 per share, and 10,000,000 shares of preferred stock, par value
$0.001 per share. As of November 30, 2009, a total of 24,000,000 shares of
common stock are issued and outstanding, of which 22,460,000 shares are held by
Peter Dunn, our President and a Director. There is no preferred stock
issued and outstanding. All issued and outstanding shares of common
stock are fully paid and non-assessable.
Common
Stock
The
holders of our common stock:
●
|
have
equal ratable rights to dividends from funds legally available if and when
declared by our Board of Directors;
|
●
|
are
entitled to share ratably in all of our assets available for distribution
to holders of common stock upon liquidation, dissolution or winding up of
our affairs;
|
●
|
do
not have preemptive, subscription or conversion rights and there are no
redemption or sinking fund provisions or rights;
and
|
●
|
have
unlimited voting rights, with each share being entitled to one
non-cumulative vote on all matters on which stockholders may vote.
Non-cumulative voting rights means that the holders of more than 50% of
the outstanding shares, voting for the election of directors, can elect
all of the directors to be elected, if they so choose, and, in that event,
the holders of the remaining shares will not be able to elect any of our
directors. Peter Dunn, our president and director owns 93.6% of our
outstanding shares.
|
15
Preferred
Stock
At this
time we have no plans to issue any preferred stock. Empire’s Articles of
Incorporation authorize the Board of Directors, without stockholder action, to
provide for the issuance of preferred stock in one or more series and to
determine with respect to each such series the voting powers, if any (which
voting powers, if granted, may be full or limited), designations, preferences,
and relative, participating, option, or other special rights, and the
qualifications, limitations, or restrictions relating thereto. For example, our
Board of Directors can determine the voting rights relating to preferred stock
of any series (which may be one or more votes per share or a fraction of a vote
per share, which may vary over time, and which may be applicable generally or
only upon the happening and continuance of stated events or conditions), the
rate of dividend to which holders of preferred stock of any series may be
entitled (which may be cumulative or noncumulative), the rights of holders of
preferred stock of any series in the event of liquidation, dissolution, or
winding up of the affairs of our company, the rights, if any, of holders of
preferred stock of any series to convert or exchange such preferred stock of
such series for shares of any other class or series of capital stock or for any
other securities, property, or assets of our company or any subsidiary
(including the determination of the price or prices or the rate or rates
applicable to such rights to convert or exchange and the adjustment thereof, the
time or times during which the right to convert or exchange shall be applicable,
and the time or times during which a particular price or rate shall be
applicable), whether or not the shares of that series shall be redeemable, and
if so, the terms and conditions of such redemption, including the date or dates
upon or after which they shall be redeemable, and the amount per share payable
in case of redemption, which amount may vary under different conditions and at
different redemption dates, and whether any shares of that series shall be
redeemed pursuant to a retirement or sinking fund or otherwise and the terms and
conditions of such obligation.
Cash
Dividends
As of the
date of this prospectus, we have not declared or paid any cash dividends to
stockholders. The declaration of any future cash dividend will be at the
discretion of our Board of Directors and will depend upon our earnings, if any,
our capital requirements and financial position, our general economic
conditions, and other pertinent conditions. It is our present intention not to
pay any cash dividends in the foreseeable future, but rather to reinvest future
earnings, if any, in our business operations.
Anti-Takeover
Provisions
There are
no Nevada anti-takeover provisions that may have the effect of delaying or
preventing a change in our control. Sections 78.378 through 78.3793 of the
Nevada Revised Statutes relate to control share acquisitions that may delay to
make more difficult acquisitions or changes in our control. However, these
provisions only apply when we have 200 or more stockholders of record, at least
100 of whom have addresses in the State of Nevada appearing on our stock ledger,
and we do business in this state directly or through an affiliated corporation.
Neither of the foregoing events seems likely to occur. Currently, we have no
Nevada shareholders. Further, we do not do business in Nevada directly or
through an affiliate corporation and we do not intend to do business in the
State of Nevada in the future. Accordingly, there are no anti-takeover
provisions that have the effect of delaying or preventing a change in our
control.
In
addition, neither the Articles of Incorporation nor the Bylaws of the Company
contain any anti-takeover provisions that may have the effect of delaying or
preventing a change in our control.
We have
not engaged the services of a transfer agent at this time. However, within the
next twelve months we anticipate doing so. Until such a time a transfer agent is
retained, we will act as our own transfer agent.
INTERESTS
OF NAMED EXPERTS AND COUNSEL
Our
financial statements for the period from inception on October 13, 2009 through
November 30, 2009 included in this prospectus have been audited by Rose, Snyder
& Jacobs, Certified Public Accountants, 15821 Ventura Boulevard., Suite 490,
Encino, California 91436, as set forth in their report included in this
prospectus. Their report is provided on their authority as experts in accounting
and auditing.
The
legality of the shares offered hereby will be passed upon for us by The Law
Offices of William B, Barnett 21550 Oxnard Street, Suite 200, Woodland Hills,
California 91367. William B. Barnett, Esq., the principal of the firm owns
750,000 shares of Empire’s common stock. Mr. Barnett received the 750,000 shares
on October 15, 2009, valued at $750 for legal services rendered to the Company
relating to the formation of the Company.
Other
then as set forth above, neither of Rose, Snyder & Jacobs or the Law Offices
of William B. Barnett has been hired on a contingent basis, will receive a
direct or indirect interest in Empire or have been a promoter, underwriter,
voting trustee, director, officer, or employee of Empire.
16
INFORMATION
WITH RESPECT TO THE REGISTRANT
GENERAL
OVERVIEW
Empire
Post Media, Inc. was founded in the State of Nevada on October 13, 2009. Empire
is currently marketing services that include most aspects of post-production,
including, among other things, editing, sound and music finishing, special
effects, main and end titles, mastering, digital intermediates and deliverables
to producers and owners of independent feature films; television movies,
specials and series; short subjects; and documentaries who have exhausted their
financial resources and budgets. Empire also intends to arrange for these
producers/owners, third person financing for these services. This will allow the
producer or owner to complete the film by deferring the post production costs
and expenses until the film is distributed and begins to generate revenue. Any
and all financing may be collateralized by the film and/or the distribution
rights.
Empire
is in the development stage and has a limited history of operations. The
Company’s current “burn rate” is approximately $4,000 per month. Other than some
marketing costs and expenses associated with being a public company, estimated
to be $20,000, we do not have any other near term capital requirements. However,
we may attempt to raise additional capital at a future date, through a private
placement or from our principal shareholder, if necessary, to build up our
business by increasing our marketing program and name recognition. There is no
assurance that such additional capital will be available to us.
Empire
started operations October, 2009 and is in its early development stage. Empire
has not yet generated any revenues. Since its inception, in October, 2009,
Empire has incurred losses of $22,297. As of November 30, 2009, Empire had
assets totaling $17,831 in cash and equipment and liabilities of $16,128,
resulting in a Net Worth of $1,703.
ORGANIZATION
WITHIN LAST FIVE YEARS
DESCRIPTION
OF BUSINESS
Empire
intends to provide services that include most aspects of post-production,
including, among other things, editing, sound and music finishing, special
effects, main and end titles, and mastering to producers and owners of
independent feature films; television movies, specials and series; short
subjects; and documentaries who have exhausted their financial resources and
budgets. Empire intends to arrange financing for the producer and/or
owner for these post production services, thus allowing the producer and/or
owner to complete the film by deferring the post production costs and expenses
until the film is distributed and begins to generate revenue. Any and all
arranged financing may be collateralized by the film and the distribution and
license rights associated therewith.
Empire
believes there are a substantial number of productions which will not be able to
directly purchase these services due to inadequate funding. Empire
believes its program meets those needs.
Empire
intends to apply industry-standard retail charges for the post production
services and then sub-contract such services to established post-production
vendors at discounted wholesale rates. Empire believes that it can
achieve these discounted rates because of the volume of business it intends to
sub-contract. At this time there are no present agreements with
post-production vendors, but management has had several conversations with
qualified post production providers.
Empire
initially intends to arrange the financing through third party lenders for the
post production costs and to collateralize such financing with perfected, first
position secured interests in each project’s distribution receipts, ahead of all
other financing participants. The collateral available, on a project by project
basis, is anticipated to range from distribution or sponsorship contracts
payable on delivery of finished projects or on a schedule starting with various
stages of post-production work or an assignment of rights in different medias
and territories.
In view
of management’s aggregate 70 plus years of experience in the entertainment
industry, its history of relationships and contacts with established funding
sources, and its experience in evaluating the various types and forms of
collateral, management believes that it has the ability to execute its intended
business plan.
The
following describes some of the kinds of distribution security we may accept on
a project-by-project basis:
Domestic Multi-rights Distribution
Agreements: These are generally from substantial
credit-worthy companies and payment terms tend to be straightforward and
dependent only on objective trigger events, such as delivery of specified
materials(which Empire will have control over), first theatrical showing or
“street date” of a DVD release.
Domestic Television Licenses:
These are generally from premium cable networks and, to a lesser degree, from
basic cable and broadcast networks. Again, payment terms tend to be
straightforward and dependent only on objective trigger events, e.g., delivery
or first air date. In the case of episodic television series,
post-production work, delivery and payment will normally be on an episode by
episode basis and conform to the same trigger events per episode.
International Sales: Usually
a sales agent or the producer licenses specified rights or media for a defined
term. These agreements usually set forth the amounts to be paid and
the trigger events for making such payments, with the bulk of the payment
generally coming on the delivery or availability of the finished film. Empire
anticipates that some of its clients will offer assignment of the post-delivery
contractual payments on such distribution agreements as part of their collateral
against post-production services.
17
Soft Money:
Although location-based tax rebates or credits are most often used
in connection with the financing of productions, there are occasions where a
producer has elected not to pledge the value of these rebates and therefore they
are available to collateralize post-production services. There are
certain arms-length experts in this area who can confirm the projected value of
the tax rebates or credits based on a film’s budget and the parameters of the
individual program and Empire will obtain an expert opinion, when and if such
expertise is required.
Estimated Sales:
Estimates are projections of saleable but unsold rights or
territories. Such projections require the knowledge of experienced
sales agents and international distributors who know the potential buyers in all
territories can judge the likelihood of sales and sales amounts, along with the
general financial status and expected timeliness of payments from
licensees. We believe that many of our customers will come with a
sales agent already attached and an estimate of sales values. In
these instances, we will contract with experts to make an independent analysis
on Empire’s behalf. We may also retain the services of global
collection agents to confirm the paying ability and overall reliability of
territorial sub-distributors around the world when necessary.
MARKET
AND MARKETING
With
several hundred local independent motion picture and television productions
launched each year, Empire believes that at any given time there are dozens of
producers who have completed principal photography and are seeking
post-production, completion and delivery services on a deferred payment basis
and have the collateral that would qualify under Empire’s
criteria. Los Angeles is a well-established post-production center
and even films that are produced elsewhere tend to gravitate back to this
community for post services.
Management
believes that much of its initial business will come from the various
post-production companies that we will contract with for services as
cash-conscious producers attempt to spread out various aspects of
post-production costs on a future payment basis among multiple vendors in order
to complete their films. These post-production companies, as Empire’s
sub-contractors, will have the ability to capture the whole of post-production
work on a deferred payment basis, assuming the producer has acceptable
collateral.
We also
intend to market our services to the wider production and talent agency
community and perhaps also to strike parallel arrangements with other qualified
post-production houses, commensurate with its resources and ability to undertake
a volume of qualified projects in excess of the work flow projected for the
first year of operations. Using personal relationships nurtured over
many years, management plans to introduce its services to the broad
entertainment industry infrastructure that would be aware of projects needing
those services—producers, lawyers, bankers, accountants, non-institutional and
boutique funders, production companies, completion guarantors, etc.
The
Company is in the development stage and therefore intends to rely totally on
external sources of financing to fund the arranged financial segment of its
intended business plan. This would include financing from professional and
institutional financiers that are already committed to broad investment programs
in the entertainment industry. There is no assurance that we will be
able to secure any financing commitments which would have a materially adverse
affect on our business.
GROWTH
OPPORTUNITIES
We expect
to grow sales by both increasing the number of projects we undertake and
increasing the size of those projects, subject to the limitations of available
financing. Other areas for growth, based on success in the initial
program, include establishing similar programs in other
production/post-production centers in Canada, the UK and France, where there are
attractive subsidies and rebates.
THE
POST-PRODUCTION INDUSTRY
Movie
making is a complicated business, but the workload is generally split into three
sections: pre-production, principal shooting and post-production. Pre-production
involves matters such as scriptwriting, financial backing, hiring of cast and
crew, and scouting for locations. Once all of these details have been worked
out, principal shooting can begin. This is the actual filming of individual
scenes, without any special effects or musical background.
All of
this planning and filming leads up to the most vital aspect of film making —
post-production work. Post-production turns individual scenes, called raw
footage, into a finished motion picture. Editors splice all of the usable
footage together into a coherent storyline according to the script. Composers
add background music to create dramatic or comical effects. Special effects
teams add computer generated images and backgrounds to enhance the set or
provide an as-yet-unseen character. All of this work can only be performed
during post-production.
18
Post-production
may also involve fixing mistakes not corrected during principal shooting. Quite
often an actor's microphone will not pick up crucial bits of dialogue or another
microphone may pick up extraneous noises. During post-production, an actor may
have to return to a sound booth in order to re-record lost dialogue or improve
the original delivery. This is called looping . Another function of
post-production is to add incidental sound effects not captured during the
original scenes. A specialist called a foley artist will record such sounds as
an actor's footsteps, a creaking door or gunshots.
Many
directors and producers rely heavily on the ability of post-production teams to
create a marketable film. Since principal shooting can be a hectic time for both
actors and directors, some footage may prove to be unusable during the
post-production editing process. A film's original ending may also be unpopular
with test audiences. This could lead to reshoots with the principal actors
before a final film is produced. Other responsibilities during post-production
may include publicity tours, promotional posters, and contracts with
distributors and the creation of auxiliary formats such as DVDs and soundtrack
albums.
Los
Angeles is the center of the post-production industry in the US, with more
vendors than any other post-production center, including Toronto, Montreal or
London. For instance, according to LA411.com, there are almost 200 full service
post-production houses and approximately 160 audio houses that just do sound in
the Los Angeles area.. Therefore, management expects to have no difficulty
finding sufficient vendors to deliver quality post-production services on a
discounted basis.
COMPETITION
As
indicated above, there are approximately 200 full service post-production
companies in the Los Angeles area and many more located in other areas of the
United States who are engaged in the post-production and finance business and
this segment is highly competitive. Many of our competitors have
significantly greater financial and other resources as well as greater
managerial capabilities than we do and are therefore, in certain respects, in a
better position than we are to provide post-production services. There can be no
assurance that we will be able to successfully compete against these
businesses.
OUR
COMPETITIVE STRENGTHS
Our
management team consists of three senior executives who have over 70 years of
combined experience in various aspects of movie making including film finance
and post production. We believe that, even though currently, our three
executives only devote less than 25 hours a week to our business, through their
contacts with financing sources and post-production service providers, we will
be able to meet our business goals.
EMPLOYEES
Mr. Dunn
is the President, Chief Financial Officer, Secretary, and a Director (Principal
Executive Officer and Principal Accounting Officer) of
Empire. Currently, in addition to Mr. Dunn, Empire has two other
part-time officers and no other employees; however Empire plans to employ
individuals on an as needed basis. Most of our services will be performed by
approved sub-contractors in the L.A. area thus reducing the number of employees
required. Empire anticipates that it will need to hire additional
employees as the business grows.
In
addition, Empire may expand the size of its Board of Directors in the future.
Currently Mr. Dunn, the president, Mr. Fink, the executive vice-president, and
Mr. Jackson, the vice-president post-production, devote fewer than 25 hours per
week to the affairs of Empire and neither he nor any other officer receives a
salary or benefits in any form. However, commencing December 1, 2010, we have
begun accruing $1,000 per month for Mr. Dunn and $250 per month and $100 per
month for Mr. Fink and Mr. Jackson, respectively. Empire does not have any plans
to begin paying salaries, cash or otherwise, or offering any form of benefits to
our Board of Directors until we begin generating revenues. See “Executive
Compensation – Employment Agreements.”
RESEARCH
AND DEVELOPMENT EXPENDITURES
We have
not incurred any research expenditures since our incorporation.
PATENTS
AND TRADEMARKS
We do not
own, either legally or beneficially, any patent or trademark.
19
DESCRIPTION
OF PROPERTY
Currently,
Empire has not entered into any lease agreement for office facilities. We are
using the offices of a company affiliated with Mr. Dunn, Empire’s president as
our principal executive offices, which are located at 280 South Beverly Drive,
Beverly Hills, California 90212l, Telephone (310) 472-5138. . We believe our
current premises are adequate for our current operations and we do not
anticipate that we will require any additional premises in the foreseeable
future.
LEGAL
PROCEEDINGS
Our
securities are not listed on any exchange or quotation service. We are not
required to comply with the timely disclosure policies of any exchange or
quotation service. The requirements to which we would be subject if our
securities were so listed typically include the timely disclosure of a material
change or fact with respect to our affairs and the making of required filings.
Although we are not required to deliver an annual report to security holder,
Empire intends to provide an annual report to our shareholders, which will
include audited financial statements.
As of
the date of this Prospectus we have five shareholders.
When we
become a reporting company with the SEC, the public may read and copy any
materials filed with the SEC at the Security and Exchange Commission's Public
Reference Room at 100 F Street N.E., Washington, D.C. 20549. The public may also
obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports,
proxy and information statements, and other information regarding issuers that
file electronically with the SEC. The address of that site is
www.sec.gov.
DIVIDEND
POLICY
There
have been no cash dividends declared on our common stock and we do not expect to
pay any in the foreseeable future. Dividends are declared at the discretion of
the board of directors.
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The
following discussion of our financial condition and results of operations should
be read in conjunction with our consolidated financial statements and the notes
to those statements included elsewhere in this prospectus. In addition to the
historical consolidated financial information, the following discussion and
analysis contains forward-looking statements that involve risks and
uncertainties. Operating results are not necessarily indicative of results that
may occur in future periods.
Our
business and results of operations are affected by a wide variety of factors as
we discuss under the caption "Risk Factors" and elsewhere in this prospectus,
which could materially and adversely affect actual results. As a result of these
factors, we may experience material fluctuations in future operating results on
a quarterly or annual basis, which could materially and adversely affect our
business, financial condition, operating results and stock price.
GENERAL
OVERVIEW
Empire
was incorporated under the laws of the State of Nevada on October 13, 2009, with
a business plan for providing and financing post-production services to the
movie and television industry. Empire is in the development stage and has not
generated any revenues as of the date of this prospectus.
Empire is
paying the expenses of the offering because it seeks to (i) become a reporting
company with the Commission under the Securities Exchange Act of 1934 (the "1934
Act"); and (ii) enable our common stock to be traded on the OTC Bulletin Board.
We believe that the registration of the sale of shares on behalf of our largest
existing security holder may facilitate the development of a public market in
our common stock if our common stock is approved for trading on the OTC Bulletin
Board.
20
GENERAL
DISCUSSION ON RESULTS OF OPERATIONS AND ANALYSIS OF FINANCIAL
CONDITION
We begin
our General Discussion and Analysis with a discussion of the Results of
Operations for Empire, since its inception on October 13, 2009, followed by a
discussion of Liquidity and Capital Resources available to finance our
operations.
Critical accounting policies
and estimates
Financial
Reporting Release No. 60, “Cautionary Advice Regarding Disclosure About Critical
Accounting Policies” (“FRR60”) issued by the SEC, suggests companies provide
additional disclosure and commentary on those accounting policies considered
most critical. FRR 60 considers an accounting policy to be critical if it is
important to Empire’s financial condition and results of operations, and
requires significant judgment and estimates on the part of management in its
application. For a summary of Empire’s significant accounting policies,
including the critical accounting policies discussed below, see the accompanying
notes to the consolidated financial statements.
The
preparation of Empire’s financial statements in conformity with accounting
principles generally accepted in the United States of America (“GAAP”) requires
management to make estimates, judgments and assumptions that affect the reported
amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amount of
expenses during the reporting period. On an ongoing basis, Empire evaluates its
estimates, which are based on historical experience and on various other
assumptions that are believed to be reasonable under the circumstances. The
result of these evaluations forms the basis for making judgments about the
carrying values of assets and liabilities and the reported amount of expenses
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions. The following accounting policies
require significant management judgments and estimates:
Empire
bases its estimates on historical experience and on various other assumptions
that are believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. There is no
assurance that actual results will not differ from these estimates.
See
footnotes in the accompanying financial statements regarding recent financial
accounting developments.
INCOME
TAXES
RESULTS
OF OPERATION
Empire is
a development stage company that has a limited history of operations. Since our
inception on October 13, 2009 to November 30, 2009, we have generated no
revenues. As of November 30, 2009, we had $3,000 in current assets. We presently
do not have the capital to commence the operations outlined and detailed in this
prospectus.
We
incurred a net loss of $22,297, from inception on October 13, 2009 to the period
ended November 30, 2009. Empire has had no revenues over the same period and has
incurred expenses of $22,297, during the same period relating to the initial
formation of Empire and other initial operating costs.
PLAN
OF OPERATION
We
will not receive any proceeds from the sale of shares under this prospectus. Our
continued existence is dependent upon our ability to obtain additional
financing. We estimate that our capital requirements for the next 6
months will be in the range of $24,000 to $30,000.
Based on
our current operating plan, we do not expect to generate revenue that is
sufficient to cover our expenses for the next six months, and we will need to
obtain additional financing to operate our business for the next six months. Our
“burn rate” is approximately $4,000 per month. Most of our expenses are
anticipated to be legal, accounting, transfer agent, and other costs associated
with being a public company. Since we intend to utilize our officers and
directors, who currently are part time and whose salaries are being accrued, to
sell our services, our marketing costs should be minimal. Additional financing,
whether through public or private equity or debt financing, arrangements with
the security holder or other sources to fund operations, may not be available,
or if available, may be on terms unacceptable to us. Our ability to maintain
sufficient liquidity is dependent on our ability to raise additional
capital.
21
If we
issue additional equity securities to raise funds, the ownership percentage of
our existing security holder would be reduced. New investors may demand rights,
preferences or privileges senior to those of existing holders of our common
stock. Debt incurred by us would be senior to equity in the ability of debt
holders to make claims on our assets. The terms of any debt issued could impose
restrictions on our operations. If adequate funds are not available to satisfy
either short or long-term capital requirements, our operations and liquidity
could be materially adversely affected and we could be forced to cease
operations.
Our
independent auditors have added an explanatory paragraph to their report of our
financial statements for the period ended November 30, 2009, stating that our
net loss of $22,297, lack of revenues and dependence on our ability to raise
additional capital to continue our existence, raise substantial doubt about our
ability to continue as a going concern. Our financial statements and their
explanatory notes included as part of this prospectus do not include any
adjustments that might result from the outcome of this uncertainty. If we fail
to obtain additional financing, either through an offering of our securities or
by obtaining loans, we may be forced to cease our business.
We are
bearing all costs relating to the registration of the common stock, which are
estimated at approximately $25,000.00. The selling security holder,
however, will pay any distribution costs and commissions or other fees payable
to brokers or dealers in connection with any sale of the common stock. If we
issue additional equity securities to raise funds, the ownership percentage of
our existing security holder would be reduced. New investors may demand rights,
preferences or privileges senior to those of the current existing shareholder of
our common stock. Debt incurred by us would be senior to equity in the ability
of debt holders to make claims on our assets. The terms of any debt issued could
impose restrictions on our operations. If adequate funds are not available to
satisfy either short or long-term capital requirements, our operations and
liquidity could be materially adversely affected and we could be forced to cease
operations.
LIQUIDITY
Since our
inception on October 13, 2009 to November 30, 2009, we have incurred a loss of
$22,297. Our cash and cash equivalent balances were $3,000 as of November 30,
2009. At November 30, 2009 we had an accumulated deficit of $22,297
and our total current liabilities due to accounts payable and amounts due to
related parties were $16,128.
On
October 15, 2009, Empire issued 24,000,000 shares of its common stock, at $0.001
per share, for an aggregate value of $24,000.00.
Based on
our current operating plan, we do not expect to generate revenue that is
sufficient to cover our expenses for at least the next year. In addition, we do
not have sufficient cash and cash equivalents to execute our operations for at
least the next year. We will need to obtain additional financing to conduct our
day-to-day operations, and to fully execute our business plan. We anticipate
raising the capital necessary to fund our business through a subsequent offering
of equity securities. Additional financing, whether through public or private
equity or debt financing, arrangements with security holder or other sources to
fund operations, may not be available, or if available, may be on terms
unacceptable to us.
We
estimate that our “burn rate” is approximately $4,000 per month. Management has
estimated the cost over the next six months to be (a) between $6,000 and $15,000
to continue to marketing and financing of post-production services to the
entertainment industry, and (b) $9,000 to maintain our reporting status.
Therefore our current cash on hand will not satisfy our cash requirements for
the next six months and as such our CEO and director, Mr. Dunn, will need to
arrange additional financial commitments to our company, which is not
guaranteed. On January 25, 2010, Mr. Dunn agreed to loan us up to $25,000
pursuant to an Agreement to Advance Funds between Empire and Mr. Dunn. We will
use these funds for use towards fees and expenses related to this offering and
to sustain our business over the next six month period, as the expenses are
incurred, in the form of a non-secured loan. Although Mr. Dunn may be willing to
make some personal additional financial commitments, the total additional amount
that he is willing to invest has not yet been determined.
We plan
to satisfy our future cash requirements - primarily the working capital required
for the marketing of our services and to offset legal and accounting fees - by
additional financing. This will likely be in the form of future debt or equity
financing.
Management
believes that if we obtain sufficient funds to operate our business through
future debt or equity financing, we may generate sales revenue within the
following twelve months thereof. However, additional debt or equity financing
may not be available to us on acceptable terms or at all, and thus we could fail
to satisfy our future cash requirements.
If we are
unsuccessful in raising the additional proceeds through future equity financing
we will then have to seek additional funds through debt financing, which would
be highly difficult for a new development stage company to secure. Therefore, we
are highly dependent upon the future equity financing and/or support from our
existing shareholders. However, if such debt financing were available, because
we are a development stage company with no operations to date, we would likely
have to pay additional costs associated with high risk loans and be subject to
an above market interest rate. At such time these funds are required, management
would evaluate the terms of such debt financing and determine whether the
business could sustain operations and growth and manage the debt load. If we
cannot raise additional proceeds via future debt or equity financing we would be
required to cease business operations. As a result, investors in our common
stock would lose all of their investment. Also management believes if we cannot
raise sufficient revenues or maintain our reporting status with the SEC we will
have to cease all efforts directed towards our business. As such, any investment
previously made would be lost in its entirety.
22
If we are
unable to complete any phase of our development or marketing efforts because we
don't have enough money, we will cease our development and/or or marketing
operations until we raise the necessary money. Attempting to raise capital after
failing in any phase of our development plan could be difficult. As such, if we
cannot secure additional proceeds we will have to cease operations and investors
would lose their entire investment.
Our
auditors have issued a "going concern" opinion, which is included in the
financial statements included in this Form S-1 filing. . This means that there
is substantial doubt that we can continue as an on-going business for the next
twelve months unless we obtain additional capital to pay our bills. This is
because we have not generated any revenues and no substantial revenues are
anticipated. Our only other source for cash at this time is investments by our
CEO and director. We must raise cash to implement our business strategy and stay
in business.
As of
November 30, 2009, we had a demand note payable to Mr. Dunn totaling $15,407.64.
The note represents the purchase by Empire of computer equipment and software
totaling $15,407.64.
Financing
Activities
Financing
activities resulted in a net cash inflow of $3,000 from October 13, 2009 (date
of inception) to November 30, 2009.
Satisfaction
of Our Cash Obligations for the Next Twelve Months
As of
November 30, 2009, our cash balance was $3,000. Our plan for
satisfying our cash requirements for the next six months, estimated to be
between $24,000, and $30,000, is through generating revenue from our services,
sale of shares of our common stock, third party financing, and/or traditional
bank financing. We anticipate some services-generated income during that same
period of time, but do not anticipate generating sufficient amounts of revenues
to meet our working capital requirements. Consequently, we intend to make
appropriate plans to insure sources of additional capital in the future to fund
growth and expansion through additional equity or debt financing or credit
facilities.
Expected
Purchase or Sale of Significant Equipment
We do not
anticipate the purchase or sale of any significant equipment, as such items are
not required by us at this time or in the next twelve months.
Additional
Disclosure of Outstanding Share Data
As of
November 30, 2009, we had 24,000,000 shares of common stock issued and
outstanding.
Off-Balance
Sheet Arrangements
We
currently have no off-balance sheet arrangements, including any outstanding
derivative financial statements, off-balance sheet guarantees, interest rate
swap transactions or foreign currency contracts. We do not engage in trading
activities involving non-exchange traded contracts.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND
FINANCIAL DISCLOSURE
There
have been no disagreements regarding accounting and financial disclosure matters
with our independent certified public accountants.
23
DIRECTORS
AND EXECUTIVE OFFICERS
The
following table sets forth and identifies our Executive Officers and Directors,
and the respective date of election or appointment:
Name
|
Age
|
Position
|
||
Peter
Dunn
|
69
|
President,
Chief Financial Officer, Secretary and Director
|
||
Martin
Fink
|
70
|
Executive
Vice-President and Director
|
||
Kyle
Jackson
|
28
|
Vice-President-Post-production
|
The
Executive Officers and Directors hold office until the next annual meeting
following the appointment and until a successor has been appointed and
qualified.
Set forth
below is a description of the recent employment and business experience of our
Executive Officer’s and Director’s.
MANAGEMENT
BIOGRAPHIES
PETER
DUNN
Mr. Dunn,
the founder of Empire was appointed President, Chief Financial Officer,
Secretary and a Director October 15, 2009. He has forty years of
experience as a creator, owner, investor and manager of entrepreneurial
companies in the media, communications, technology, energy and financial
services sectors.
Since
2001, Mr. Dunn has been President of Norris Capital Partners, Inc, a private
management firm, specializing in public stock investments in the energy
field. In 1997, Peter created VNOW, a public company which developed
proprietary high speed internet video software and produced internet/CDROM
videos for a wide range of corporate clients including Victoria’s Secret,
Cheesecake Factory and Arco.
For
nearly two decades beginning in 1980, Mr. Dunn created, produced and in some
cases directed over 138 major sporting and entertainment events. His
Classic Golf International company produced a variety of golf home programs for
Paramount Home Video and “Fairways to Heaven,” a television special for
BBC/Lifetime. His Integrated Special Promotions marketing consultancy
produced many major projects for The Coca-Cola Company in the late l980s and
early 1990s, including a live show called “A Gala Premiere: Introducing Diet
Coke,” starring Paul Anka at the Los Angeles Music Center, which was the
centerpiece of the Western states rollout of Diet Coke; ‘A Centennial
Celebration,” a live show at the Universal Amphitheatre starring George Burns
and Kenny Loggins celebrating Coke’s hundredth birthday; and the gala
entertainment event at the Queen Mary in Long Beach celebrating the West Coast
end of the line for “Hands Across America”. Mr. Dunn also consulted
for Coca-Cola in connection with the pre-opening ceremonies of the 1984 Summer
Olympics in Los Angeles and the hundredth birthday celebration of the Statue of
Liberty in New York, attended by President Ronald Reagan.
In 1972,
Mr. Dunn founded and became the first President of Western Corporate Services,
owner of U.S. Stock Transfer Corp., the third largest independent stock transfer
agency in the United States. He remained an owner and a member of the
Board of Directors until U.S. Stock Transfer was sold in 2007, to Computershare
Ltd., the largest share registry company in the world.
Mr. Dunn
graduated from Clarkson College of Technology, Potsdam, New
York.
24
MARTIN
FINK
Mr. Fink
was appointed Executive Vice-President and Director of Empire on October 15,
2009. He has been involved in the financing, production and risk
management of motion pictures for over 40 years. Mr. Fink entered film
production in the 1960’s at 20 th Century
Fox as part of the team that produced “Von Ryan’s Express,” starring Frank
Sinatra, “Fantastic Voyage,” starring Raquel Welch, “Our Man Flint” and “In Like
Flint,” both of which starred James Coburn. He was the producer of
the critically acclaimed “Payday” in 1973 and associate producer of “One Flew
Over The Cuckoo’s Nest,” which won five Academy Awards including Best Picture in
1976. During the 1980s he was president of Eagle Entertainment, Inc.,
a fully-reporting NASDAQ company which was active in both the development and
production of motion pictures and completion bonding. From 1990 to
1996, he was the president of Complete Film Corporation, a wholly owned
subsidiary of Carolco Pictures, a producer and financier of high budget “event”
movies.
Mr. Fink
has provided completion bond and/or production management and advisory services
for more than 30 feature films, including “Total Recall” and “Terminator 2:
Judgment Day,” both of which starred Arnold Schwarzenegger; “Basic Instinct,”
starring Michael Douglas and Sharon Stone; “The Doors.” starring Val Kilmer;
“Rambling Rose,” starring Laura Dern; “Cliffhanger” and “Judge
Dredd,” starring Sylvester Stallone; “Stargate,” starring Kurt Russell; “Die
Hard with a Vengeance,” starring Bruce Willis; “The Scarlet Letter,”
starring Demi Moore; “Shadow Conspiracy,” starring Charlie Sheen; “Nixon,”
starring Anthony Hopkins; “Lolita,” starring Jeremy Irons; and “Evita,” starring
Madonna and Antonio Banderas.
From
l996-2000, Mr. Fink, as manager of New Beginnings Enterprises LLC, provided
monitoring and support services to a London-based financier in connection with
approximately 25 lower budget feature films, including Oscar-winner “Gods and
Monsters.”. These services included the design and construction of a
new state-of-the-art digital post-production facility and supervision of
production, post-production and sales of the films. During the same
period, he was executive producer of “Beautiful,” starring Minnie
Driver and directed by Sally Field, and “ Young Blades ,” starring Ben
Cross, production executive on “Exhuming Mr. Rice,” starring David Bowie, and
co-producer of “ The
Opportunists,” starring Christopher Walken and Cyndi Lauper.
Mr. Fink
was also Chairman of the Board of U.S. Stock Transfer Corporation, the third
largest independent stock transfer agency in the United States, for over 25
years until it was sold in February 2007 to Computershare Ltd., the largest
share registry company in the world. Since 2003, he has been a
principal of Complete Rights Management LLC, which provides advisory, back
office and production services to financiers, producers, distributors, sales
agents, libraries and completion guarantors. He was an associate
producer of Sir Trevor Nunn’s London production of “GONE WITH THE WIND: The
Musical” in 2008.
KYLE
JACKSON
Mr.
Jackson was appointed Vice-President-Post-production on October 15,
2009. He was a founding partner in 2005, of Santa Monica-based Tunnel
Post, a post-production company, of which he is president. He has a
long track record of technology-based creative endeavors. At only fourteen
years of age, Mr. Jackson went to work as a graphic designer and 3D
animator. His clients during his high school years included ABC,
Pentax Cameras, Big O Tires and Autodesk, among several others. In 2002, while
getting his college degree at the University of Southern California School of
Cinema-Television Production, he also worked on the development of Final Cut Pro
for Apple and lent his hand in editing several feature length
projects.
Immediately
following his last semester of college, Mr. Jackson left Apple to direct his
first full-length feature film, "Chasing Ghosts", which was acquired by Sony
Pictures Home Entertainment in 2005. It was while in post-production on
"Chasing Ghosts" that, out of necessity, he created the concept and developed
the software for a new technology now known as Desktop Digital
Intermediate. From this pioneering development he launched Tunnel
Post. Less than two years later the resulting software was acquired
by Apple which incorporated it as Color in Final Cut Pro, the industry’s
dominant digital editing technology.
Since its
inception, Tunnel has repeatedly been an innovator in post-production
technologies and work-flow processes, including several newly-created software
solutions. Under Mr. Jackson’s leadership, Tunnel has grown into an
industry recognized and respected business, working on over 40 film and
television productions annually, enabling him to participate in producing,
directing, and editing content as well as developing several new technologies
related to the entire filmmaking process, from development to
distribution.
Over the
past five years, Mr. Jackson has been in charge of providing post-production
services on a deferred, collateralized basis to approximately a dozen feature
films. He is credited as post-production producer on many films
during that period, including “How To Rob A Bank,” “Reservations,” “The Art of
Travel,” Love Lies Bleeding,” “The Hustle,” “Toxic,” “Love ‘N Dancing,” “Cabin
Fever 2: Spring Fever,” “Across The Hall” and the documentary “The People
Speak.”
Mr.
Jackson has often been invited to both technology and film finance seminars and
conventions to contribute as a panelist or guest speaker.
25
AUDIT
COMMITTEE
Empire
does not presently have an Audit Committee and the entire Board acts in such
capacity for the immediate future due to the limited size of the Board. Empire
intends to increase the size of its Board in the future, at which time it may
appoint an Audit Committee.
In lieu
of an Audit Committee the Board is empowered to make such examinations as are
necessary to monitor the corporate financial reporting and the external audits
of Empire, to provide to the Board of Directors (the "Board") the results of its
examinations and recommendations derived there from, to outline to the Board
improvements made, or to be made, in internal control, to nominate independent
auditors, and to provide to the Board such additional information and materials
as it may deem necessary to make the Board aware of significant financial
matters that require Board attention.
COMPENSATION
COMMITTEE
Empire
does not presently have a Nominating Committee and the Board acts in such
capacity for the immediate future due to the limited size of the Board. Empire
intends to increase the size of its Board in the future, at which time it may
appoint a Compensation Committee.
The
Compensation Committee will be authorized to review and make recommendations to
the Board regarding all forms of compensation to be provided to the executive
officers and directors of Empire, including stock compensation, and bonus
compensation to all employees.
NOMINATING
COMMITTEE
Empire
does not have a Nominating Committee and the Board acts in such
capacity.
COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT
Upon
becoming registered under the Securities Exchange Act of 1934 (the “Exchange Act
of 1934”), Section 16(a) of the Exchange Act of 1934, will require that Empire's
directors and executive officers and persons who beneficially own more than ten
percent (10%) of a registered class of its equity securities, file with the SEC
reports of ownership and changes in ownership of its common stock and other
equity securities. Executive officers, directors, and greater than ten percent
(10%) beneficial owners are required by SEC regulation to furnish Empire with
copies of all Section 16(a) reports that they file.
EXECUTIVE
COMPENSATION
The
following table sets forth the compensation of our sole Executive Officer for
the period from inception on October 13, 2009 through the period ending November
30, 2009.
Summary
compensation table
Name
and
principal
position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive Plan
Compensation
($)
|
Nonqualified
Deferred
Compensation
Earnings ($)
|
All Other
Compensation
($)
|
Total
($)
|
||||||||||||||||||||||
Peter
Dunn, President
|
2009
|
(1)
|
0
|
0
|
19,500
|
0
|
0
|
0
|
$
|
0
|
$
|
19,500
|
(1) For
the period October 13, 2009 (inception) to November 30, 2009.
Mr. Dunn
received 19,500,000 shares of Empire’s common stock, valued at $19,500 for
services provided to Empire during the early stages of our business. As our
business progresses and grows, we expect to begin paying salaries to each of our
officers. We also expect to hire part-time and full-time employees and
consultants who will be paid compensation and consulting fees.
26
Employment
Agreement
To date,
Empire has no written employment agreements in effect, with its Executive
Officers. Messrs. Dunn, Fink, and Jackson have agreed commencing January 1,
2010, to a monthly salary of $1,000, $250, and $100, respectively, until
revenues from operations reach $30,000 per month. In addition, each of these
executives has also agreed to have Empire accrue such salaries until revenues
from operations reach $30,000 per month. When Empire does generate revenues of
$30,000 per month, Messrs. Dunn, Fink, and Jackson may negotiate with Empire,
salaries and benefits that are reasonable to all parties.
Stock
option plan
We do not
have a stock option plan and we have not issued any warrants, options or other
rights to acquire our securities. However, we intend to adopt an incentive and
non-statutory stock option plan during the first half of the year
2010.
Employee
Pension, Profit Sharing or other Retirement Plans
We do not
have a defined benefit, pension plan, profit sharing or other retirement plan,
although we may adopt one or more of such plans in the future.
Director's
compensation
At
present we do not pay our directors compensation for attending meetings of our
Board of Directors, although we expect to adopt a director compensation policy
by the end of the year 2010. We have no standard arrangement pursuant to which
our directors are compensated for any services provided as a director or for
committee participation or special assignments, but may reimburse Directors for
reasonable expenses incurred in attending meetings.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following tables set forth certain information regarding beneficial ownership of
our securities as of January __, 2010 by (i) each person who is known by us to
own beneficially more than five percent (5%) of the outstanding shares of each
class of our voting securities, (ii) each of our directors and executive
officers, and (iii) all of our directors and executive officers as a group. 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:
As of
January 27, 2010, 24,000,000 shares of common stock were issued and
outstanding
Percentage of Outstanding Shares
|
||||||||||||
Name and Address (1)
|
Number of Shares
Beneficially Owned |
Prior to Offering
|
After
Offering
|
|||||||||
Peter
Dunn
|
22,460,000 | 93.6 | % | 43.6 | %(2) | |||||||
Martin
Fink
|
750,000 | 3.1 | % | 3.1 | % | |||||||
Kyle
Jackson
|
20,000 |
nil
|
nil
|
|||||||||
Officers
and Directors as a group (3 persons)
|
23,230,000 | 96.8 | % | 46.8 | %(2) |
(1)
The address of each of the beneficial owners identified is 280 South Beverly
Drive, Suite 205 Beverly Hills, California 90210
(2)
Assumes sale of 12,000,000 shares in the offering
27
INTEREST
OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
On
October 15, 2009, Empire purchased computer equipment and software from its
President, Mr. Dunn, for $15,407.64, evidenced by a promissory note, bearing
interest at $8% per annum, due on demand. The equipment and software
was valued at Mr. Dunn’s cost and Empire believes that such price was reasonable
and the same that would be paid if it were in an arms-length
transaction.
On
January 25, 2010, Mr. Dunn, President of Empire, executed an Agreement to
Advance Funds up to $25,000 (the “Agreement”) with Empire. Pursuant
to the terms of this Agreement, this loan will be on an interest-free basis,
documented by a promissory note and payable only (a) quarterly payments equal to
10% of Empire’s net profits, (b) payment in full upon receipt by Empire of not
less than $500,000 in capital, or (c) payment in full upon the sale of
substantially all of Empire’s assets or 80% of its capital. We intend to use the
funds to be received in connection with this promissory note, for costs and
expenses related to this offering, and for other business expenses during our
development stage.
Other
than as set forth above, there are no, and have not been since inception, any
material agreements or proposed transactions, whether direct or indirect, with
any of the following:
*The
Director or Officer;
* any
nominee for election as a director;
* any
principal security holder identified in the preceding "Security Ownership of
Selling security holders and Management" section; or
* any
relative, spouse, or relative of such spouse, of the above referenced
person.
SHARES
ELIGIBLE FOR FUTURE SALE
Upon
completion of the offering, we will have outstanding 24,000,000 shares of common
stock. Of these shares, the 12,000,000 shares to be sold in the offering, will
be freely tradable in the public market without restriction under the Securities
Act, unless the shares are held by our "affiliates," as that term is defined in
Rule 144 under the Securities Act.
The
remaining shares of common stock outstanding upon completion of the offering
will be "restricted securities," as that term is defined in Rule 144. Restricted
securities may be sold in the public market only if they are registered or if
they qualify for an exemption from registration, such as the exemption afforded
by Rule 144.
DISCLOSURE
OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
We have
adopted provisions in our certificate of incorporation that limit the liability
of our Directors for monetary damages for breach of their fiduciary duty as
directors, except for liability that cannot be eliminated under the Nevada
Revised Statutes. Nevada law provides that directors of a company will not be
personally liable for monetary damages for breach of their fiduciary duty as
directors, except for liabilities:
* for any
breach of their fiduciary duty of loyalty to Empire or its security
holders;
* for
acts or omissions which involve intentional misconduct, fraud or a knowing
violation of law;
* for
unlawful payment of dividend or unlawful stock repurchase or redemption, as
provided under Section 78.300 of the Nevada Revised Statutes; or,
* for any
transaction from which the director derived an improper personal
benefit.
In
addition, our bylaws provide for the indemnification of officers, directors and
third parties acting on our behalf, to the fullest extent permitted by Nevada
Revised Statutes, if our board of directors authorizes the proceeding for which
such person is seeking indemnification (other than proceedings that are brought
to enforce the indemnification provisions pursuant to the bylaws).
These
indemnification provisions may be sufficiently broad to permit indemnification
of the Empire’s executive officers and directors for liabilities (including
reimbursement of expenses incurred) arising under the Securities Act of
1933.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to our directors, officers and controlling persons pursuant to the
foregoing provisions, or otherwise, we have been advised that in the opinion of
the SEC such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. 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.
WHERE
YOU CAN FIND MORE INFORMATION
We have
filed with the SEC a registration statement on Form S-1 (File Number 333-163782)
under the Securities Act of 1933 regarding the shares of common stock offered
hereby. This prospectus does not contain all of the information found in the
registration statement, portions of which are omitted as permitted under the
rules and regulations of the SEC. For further information regarding us and the
securities offered by this prospectus, please refer to the registration
statement, including its exhibits and schedules. Statements made in this
prospectus concerning the contents of any contract, agreement or other document
filed as an exhibit to the registration statement are summaries of the terms of
those documents. The registration statement of which this prospectus forms a
part, including its exhibits and schedules, may be inspected and copied at the
public reference room maintained by the SEC at 100 F Street, N.E., Washington,
D.C. 20549. You may obtain information on the operation of the public reference
room by calling the SEC at 1-800-SEC-0330.
28
The SEC
maintains a web site on the Internet at www.sec.gov. Our registration statement
and other information that we file with the SEC are available at the SEC's
website.
We intend
to make available to our stockholders annual reports (on Form 10-K) containing
our audited consolidated financial statements and make available quarterly
reports (on Form 10-Q) containing our unaudited interim consolidated financial
information for the first three fiscal quarters of each of our fiscal
years.
If you
are a stockholder, you may request a copy of these filings at no cost by
contacting us at:
Empire
Post Media, Inc.
280 South
Beverly Drive, Suite 205
Beverly
Hills, CA 90212
(310)
472-5138 (o)
(310)
472-5138 (f)
29
FINANCIAL
STATEMENTS
EMPIRE
POST MEDIA, INC.
CONTENTS
PAGE
|
||
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
F-2
|
|
BALANCE
SHEET
|
F-3
|
|
STATEMENT
OF OPERATIONS
|
F-4
|
|
STATEMENT
OF CASH FLOWS
|
F-5
|
|
STATEMENT
OF SHAREHOLDERS' EQUITY
|
F-6
|
|
NOTES
TO FINANCIAL STATEMENTS
|
F-7
|
F-1
EMPIRE
POST MEDIA, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES TO
FINANCIAL STATEMENTS
NOVEMBER
30, 2009
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors and Shareholders
Empire
Post Media, Inc.
We have
audited the accompanying balance sheet of Empire Post Media, Inc. (a development
stage Company) (the “Company”) as of November 30, 2009 and the related
statements of operations, shareholders’ equity and cash flows for the period
from October 13, 2009 (date of inception) through November 30,
2009. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We
conducted our audit in accordance with the standards established by the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our 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, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Empire Post Media, Inc. as of
November 30, 2009, and the results of its operations and cash flows for the
period from October 13, 2009 through November 30, 2009, in conformity with
accounting principles generally accepted in the United States of
America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 1 to the financial
statements, the Company has no revenue, generates operating losses, and has a
negative working capital and an accumulated deficit at November 30,
2009. These conditions raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans regarding those
matters also are described in Note 1. The financial statements do not include
any adjustments that might result from the outcome of this
uncertainty.
/s/Rose,
Snyder & Jacobs
Rose,
Snyder & Jacobs
A
Corporation of Public Accountants
Encino,
California
February
26, 2010
F-2
EMPIRE
POST MEDIA, INC.
(A
DEVELOPMENT STAGE COMPANY)
BALANCE
SHEET
November
30, 2009
ASSETS
|
||||
CURRENT
ASSETS
|
||||
Cash
and cash equivalents
|
$
|
3,000
|
||
TOTAL
CURRENT ASSETS
|
3,000
|
|||
PROPERTY
AND EQUIPMENT, net of accumulated depreciation of $577
|
14,831
|
|||
TOTAL
ASSETS
|
$
|
17,831
|
||
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
||||
CURRENT
LIABILITIES
|
||||
Accounts
payable to shareholder
|
$
|
565
|
||
Accrued
interest
|
155
|
|||
Note
payable to shareholder
|
15,408
|
|||
TOTAL
CURRENT LIABILITIES
|
16,128
|
|||
COMMITMENTS
AND CONTINGENCIES, note 4
|
||||
SHAREHOLDERS'
EQUITY:
|
||||
Preferred
stock, $0.001 par value, 10,000,000 shares authorized, 0 share issued and
outstanding
|
-
|
|||
Common
stock, $0.001 par value, 50,000,000 shares authorized, 24,000,000 shares
issued and outstanding
|
24,000
|
|||
Deficit
accumulated during the development stage
|
(22,297
|
)
|
||
TOTAL
SHAREHOLDERS' EQUITY
|
1,703
|
|||
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
17,831
|
See
report of independent registered public accounting firm
F-3
EMPIRE
POST MEDIA, INC.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENT
OF OPERATIONS
FOR THE
PERIOD FROM OCTOBER 13, 2009 (DATE OF INCEPTION)
THROUGH
NOVEMBER 30, 2009
REVENUE
|
$
|
-
|
||
EXPENSES:
|
||||
Consulting
fees
|
20,250
|
|||
Professional
fees
|
750
|
|||
Depreciation
expense
|
577
|
|||
Other
fees
|
565
|
|||
Interest
expense
|
155
|
|||
TOTAL
EXPENSES
|
22,297
|
|||
LOSS
FROM OPERATIONS
|
(22,297
|
)
|
||
NET
LOSS
|
$
|
(22,297
|
)
|
|
Basic
and diluted loss per share
|
$
|
(0.00
|
)
|
|
Weighted
average shares outstanding
|
24,000,000
|
See
report of independent registered public accounting firm and notes to financial
statements.
F-4
EMPIRE
POST MEDIA, INC.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENT
OF CASH FLOWS
FOR THE
PERIOD FROM OCTOBER 13, 2009 (DATE OF INCEPTION)
THROUGH
NOVEMBER 30, 2009
CASH
FLOW FROM OPERATING ACTIVITIES
|
||||
Net
loss
|
$
|
(22,297
|
)
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||
Common
stock issued for services
|
21,000
|
|||
Depreciation
expense
|
577
|
|||
Increase
in:
|
||||
Accounts
payable to shareholder
|
565
|
|||
Accrued
interest
|
155
|
|||
NET
CASH USED IN OPERATING ACTIVITIES
|
-
|
|||
CASH
FLOW FROM FINANCING ACTIVITIES
|
||||
Proceeds
from sale of common stock
|
3,000
|
|||
NET
CASH PROVIDED BY FINANCING ACTIVITIES
|
3,000
|
|||
NET
INCREASE IN CASH
|
3,000
|
|||
CASH
AT BEGINNING OF PERIOD
|
-
|
|||
CASH
AT END OF PERIOD
|
$
|
3,000
|
||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
|
||||
Income
taxes paid in cash
|
$
|
-
|
||
Interest
expense paid in cash
|
$
|
-
|
||
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING
ACTIVITIES:
|
||||
Acquisition
of computer equipment through assumption of a note payable to
shareholder
|
$
|
15,408
|
See
report of independent registered public accounting firm and notes to financial
statements.
F-5
EMPIRE
POST MEDIA, INC.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENT
OF SHAREHOLDERS' EQUITY
FOR THE
PERIOD FROM OCTOBER 13, 2009 (DATE OF INCEPTION)
THROUGH
NOVEMBER 30, 2009
Additional
|
||||||||||||||||||||
Common Stock
|
Paid in
|
Accumulated
|
||||||||||||||||||
Shares
|
Amount
|
Capital
|
Deficit
|
Total
|
||||||||||||||||
BALANCE,
October 13, 2009 (Date of Inception)
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||||||||
Issuance
of shares for cash in
|
||||||||||||||||||||
October
2009 ($0.001 per share)
|
3,000,000
|
3,000
|
-
|
-
|
3,000
|
|||||||||||||||
Issuance
of shares for services in
|
||||||||||||||||||||
October
2009 ($0.001 per share)
|
21,000,000
|
21,000
|
-
|
-
|
21,000
|
|||||||||||||||
Net
loss
|
-
|
-
|
-
|
(22,297
|
)
|
(22,297
|
)
|
|||||||||||||
BALANCE,
NOVEMBER 30, 2009
|
24,000,000
|
$
|
24,000
|
$
|
-
|
$
|
(22,297
|
)
|
$
|
1,703
|
See
report of independent registered public accounting firm and notes to financial
statements.
F-6
EMPIRE
POST MEDIA, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES TO
FINANCIAL STATEMENTS
NOVEMBER
30, 2009
1.
|
ORGANIZATION AND BASIS OF
PRESENTATION
|
Organization and Nature of
Operations
Empire
Post Media, Inc. (the “Company”) was founded in the State of Nevada on October
13, 2009. The Company is in the business of providing post production
services to the movie and television industry. The services include
both two-dimensional and three-dimensional formats and are offered on a
collateralized-deferred basis to producers and owners of feature films;
television movies, specials and series; short subjects and
documentaries.
Development Stage
Activities
Since
inception the Company has not conducted any revenue-producing business
operations, all of the operating results and cash flows reported in the
accompanying financial statements from October 13, 2009 through November 30,
2009 are considered to be those related to the development stage activities and
represent the 'cumulative from inception' amounts required to be reported
pursuant to the accounting standards for Development Stage
Enterprises. The Company is focusing its efforts on developing its
business of providing post production services.
Going
Concern
The
Company has no revenue and has generated a net operating loss since its
inception. The Company also has a negative working capital and
accumulated deficit at November 30, 2009. The accompanying financial
statements have been prepared on a going concern basis of accounting, which
contemplates continuity of operations, realization of assets and liabilities and
commitments in the normal course of business. The accompanying
financial statements do not reflect any adjustments that might result if the
Company is unable to continue as a going concern. The Company’s ability to
continue as a going concern and the appropriateness of using the going concern
basis is dependent upon, among other things, additional cash
infusions. Management plans to raise additional capital through stock
offerings in order to build up the business and name
recognition. However, there can be no assurance that the Company will
be able to raise sufficient capital to fully implement its business
model.
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
|
Cash and Cash
Equivalents
The
Company considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents.
Property and
Equipment
Property
and equipment are stated at cost and consists solely of computer
equipment. All of the computer equipment was purchased by an
officer/shareholder of the Company immediately preceding its transfer to the
Company. Therefore the transferor’s historical cost is the same as the cost of
the asset. Depreciation of computer equipment is computed on the
straight-line basis over 3 years, the estimated useful life of the
equipment.
Use of
Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Management uses its
knowledge of its business in making estimates. Accordingly, actual results
could differ from those estimates.
See
report of independent registered public accounting firm
F-7
EMPIRE
POST MEDIA, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES TO
FINANCIAL STATEMENTS
NOVEMBER
30, 2009
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
|
Fair Value of Financial
Instruments
The
carrying amount of certain financial instruments, including cash and cash
equivalents, accounts payable and notes payable, approximates fair value due to
the relatively short maturity of such instruments.
The fair
value of financial instruments is categorized based upon the level of judgment
associated with the inputs used to measure their fair value. The categories are
as follows:
Level Input:
|
Input Definition:
|
|
Level
I
|
Inputs
are unadjusted, quoted prices for identical assets or liabilities in
active markets at the measurement date.
|
|
Level
II
|
Inputs,
other than quoted prices included in Level I, that are observable for the
asset or liability through corroboration with market data at the
measurement date.
|
|
Level
III
|
Unobservable
inputs that reflect management's best estimate of what market participants
would use in pricing the asset or liability at the measurement
date.
|
The
following table summarizes fair value measurements by level at November 30,
2009, for assets and liabilities measured at fair value:
Level I
|
Level II
|
Level III
|
Total
|
|||||||||||||
Note
payable to shareholder
|
$
|
-
|
$
|
-
|
$
|
15,408
|
$
|
15,408
|
The
following table is a reconciliation of Level III items
Issuance
of note payable
|
$
|
15,408
|
||
Changes
|
$
|
0
|
||
Note
payable at November 30, 2009
|
$
|
15,408
|
Revenue
Recognition
Revenue
will be recognized in accordance with the guidance of FASB ASC 605-10-25, which
is when the revenue is realized or realizable, and when revenue is
earned. Revenue is considered earned when the services to be rendered
under the contracts are substantially completed. All contracts will
be collateralized with a legally perfected, secured interest in each project’s
distribution receipts and other revenues.
Consulting
Fees
Consulting
fees include fees for services provided by an officer/shareholder of the Company
and an attorney. During the period ended November 30, 2009, the Company issued
20,250,000 shares of common stock as payment for consulting services rendered,
which were valued at $20,250. The shares of common stock were valued at the
estimated fair market value of $0.001 per share.
Income
Taxes
The
Company accounts for income taxes under the liability method in accordance with
FASB ASC 740-10. Under this standard, deferred income tax liabilities and
assets are determined based on the difference between the financial statement
and tax bases of assets and liabilities using the enacted tax rates expected to
be in effect for the year in which the differences are expected to reverse.
Deferred income tax assets are reduced by a valuation allowance when the
Company is unable to make the determination that it is more likely than not that
some portion or all of the deferred income tax asset will be
realized.
Earnings (Loss) per
Share
Basic
earnings per share is computed by dividing income available to common
shareholders by the weighted-average number of common shares outstanding.
Diluted earnings per share is computed similar to basic earnings per share
except that the denominator is increased to include the number of additional
common shares that would have been outstanding if the potential common shares
had been issued and if the additional common shares were dilutive. Common
equivalent shares are excluded from the computation if their effect is
anti-dilutive.
Recently Issued Accounting
Pronouncements
The
Company adopted the changes issued by the Financial Accounting Standards Board
(“FASB”) to the authoritative hierarchy of Generally Accepted Accounting
Principles (“GAAP”). These changes establish the FASB Accounting Standards
Codification TM
(“Codification”) as the source of authoritative accounting principles recognized
by the FASB to be applied by nongovernmental entities in the preparation of
financial statements in conformity with GAAP. Rules and interpretive releases of
the Securities and Exchange Commission (“SEC”) under authority of federal
securities laws are also sources of authoritative GAAP for SEC registrants. The
FASB will no longer issue new standards in the form of Statements, FASB Staff
Positions, or Emerging Issues Task Force Abstracts; instead the FASB will issue
Accounting Standards Updates (“ASU”). ASU’s will not be authoritative in their
own right as they will only serve to update the Codification. These changes and
the Codification itself do not change GAAP. Other than the manner in which new
accounting guidance is referenced, the adoption of these changes had no impact
on the Company’s financial statements.
The
Company recently adopted changes issued by the FASB to accounting for and
disclosure of events that occur after the balance sheet date but before
financial statements are issued or are available to be issued, otherwise known
as “subsequent events” (ASC 855). Specifically, these changes set forth the
period after the balance sheet date during which management of a reporting
entity should evaluate events or transactions that may occur for potential
recognition or disclosure in the financial statements, the circumstances under
which an entity should recognize events or transactions occurring after the
balance sheet date in its financial statements, and the disclosures that an
entity should make about events or transactions that occurred after the balance
sheet date. The adoption of these changes had no impact on the Company’s
financial statements.
See
report of independent registered public accounting firm
F-8
EMPIRE
POST MEDIA, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES TO
FINANCIAL STATEMENTS
NOVEMBER
30, 2009
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
|
In August
2009, the FASB issued ASU 2009-15, which changes the fair value accounting for
liabilities. These changes clarify existing guidance that in circumstances in
which a quoted price in an active market for the identical liability is not
available, an entity is required to measure fair value using either a valuation
technique that uses a quoted price of either a similar liability or a quoted
price of an identical or similar liability when traded as an asset, or another
valuation technique that is consistent with the principles of fair value
measurements, such as an income approach (e.g., present value technique). This
guidance also states that both a quoted price in an active market for the
identical liability and a quoted price for the identical liability when traded
as an asset in an active market when no adjustments to the quoted price of the
asset are required are Level 1 fair value measurements. This ASU is effective on
January 1, 2010. Adoption of this ASU is not expected to have a material impact
on the Company’s financial statements.
3.
|
NOTE PAYABLE TO
SHAREHOLDER
|
At
November 30, 2009, the Company has an outstanding note payable balance, bearing
8% interest, due on demand, due from an officer/shareholder of the Company in
the amount of $15,408.
4.
|
COMMITMENTS AND
CONTINGENCIES
|
Cash
Deposits
The
Company maintains its cash at a financial institution. The account is
insured by the Federal Deposit Insurance Corporation (“FDIC”) up to
$100,000. On May 20, 2009, the FDIC temporarily increased its
coverage from $100,000 to $250,000 per depositor through December 31,
2013. The Company’s cash account, at times, may exceed federally
insured limits.
5.
|
INCOME
TAXES
|
At
November 30, 2009, total deferred income tax assets consist principally of net
operating loss carryforwards in amounts still to be determined. For
financial reporting purposes, a valuation allowance has been recognized in an
amount equal to such deferred income tax assets due to the uncertainly
surrounding their ultimate realization.
6.
|
RELATED PARTY
TRANSACTIONS
|
The
Company uses the offices of a company affiliated with its president, as its
principal executive offices. The space occupied by Empire Post Media,
Inc. is de minimus.
7.
|
SUBSEQUENT
EVENTS
|
On
January 25, 2010, an officer/shareholder of the Company agreed to advance up to
$25,000 to the Company for use towards fees and expenses relating to the
offering of 12,000,000 shares of the Company’s common stock owned by the
officer/shareholder and for other business costs. The advanced funds
bear no interest and becomes due as the Company earns profits, receives a
certain level of capital financing, or upon sale of substantially all of the
Company’s assets or 80% of the Company’s capital stock.
In
accordance with ASC 855, “Subsequent Events,” the Company has performed a review
of events subsequent to the balance sheet date through February 26, 2010, the
date the financial statements were available for issuance.
See
report of independent registered public accounting firm
F-9
DEALER
PROSPECTUS DELIVERY OBLIGATION
Until the
90th day after the later of (1) the effective date of the registration statement
or (2) the first date on which the securities are offered publicly, all dealers
that effect transactions in these securities, whether or not participating in
this offering, may be required to deliver a prospectus. This is in addition to
the dealers' obligation to deliver a prospectus when acting as underwriters and
with respect to their unsold allotments or subscriptions.
INFORMATION
NOT REQUIRED IN THIS PROSPECTUS
Item
13. Other Expenses of Issuance and Distribution
The
estimated costs of this Offering are as follows:
Expenses
(1)
|
|
|||
Accounting
Fees and Expenses
|
$
|
|||
Legal
Fees and Expenses
|
$
|
|||
SEC
Registration Fee
|
$
|
3.35
|
||
Transfer
Agent Fees
|
|
|||
Miscellaneous
Expenses
|
$
|
|||
TOTAL
|
$
|
|
Notes:
(1) All
amounts are estimates, other than the Security and Exchange Commission's
registration fee.
We are
paying all expenses of the Offering listed above. No portion of these expenses
will be paid by the selling stockholders. The selling stockholders, however,
will pay any other expenses incurred in selling their common stock, including
any brokerage commissions or costs of sale.
Item
14. Indemnification of Directors and Officers
Our
officers and directors are indemnified as provided by the Nevada Revised
Statutes (the “NRS”), our Articles of Incorporation and our Bylaws.
Indemnification
Chapter
78 of the NRS, pertaining to private corporations, provides that we are required
to indemnify our officers and directors to the extent that they are successful
in defending any actions or claims brought against them as a result of serving
in that position, including criminal, civil, administrative or investigative
actions and actions brought by or on behalf of Empire.
Chapter
78 of the NRS further provides that we are permitted to indemnify our officers
and directors for criminal, civil, administrative or investigative actions
brought against them by third parties and for actions brought by or on behalf of
Empire, even if they are unsuccessful in defending that action, if the officer
or director:
(a) is
not found liable for a breach of his or her fiduciary duties as an officer or
director or to have engaged in intentional misconduct, fraud or a knowing
violation of the law; or
(b) acted
in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of Empire, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe that his conduct was
unlawful.
However,
with respect to actions brought by or on behalf of Empire against its officers
or directors, Empire is not permitted to indemnify its officers or directors
where they are adjudged by a court, after the exhaustion of all appeals, to be
liable to Empire for amounts paid in settlement to Empire, unless, and only to
the extent that, a court determines that the officers or directors are entitled
to be indemnified.
Our
Articles of Incorporation and our Bylaws provide that we will indemnify our
officers and directors to the full extent permitted by law for any threatened,
pending or completed actions or proceedings, whether they be civil, criminal,
administrative or investigative, including actions or proceedings brought by or
in the right of our company.
Advance
of Expenses
As
permitted by Chapter 78 of the NRS, our Articles of Incorporation and our
Bylaws, we are to advance funds to our officers or directors for the payment of
expenses incurred in connection with defending a proceeding brought against them
in advance of a final disposition of the action, suit or proceeding. However, as
a condition of our doing so, the officers or directors to which funds are to be
advanced must provide us with undertakings to repay any advanced amounts if it
is ultimately determined that they are not entitled to be indemnified for those
expenses.
II -
1
Insurance
Chapter
78 of the NRS and our Bylaws also allow us to purchase and maintain insurance on
behalf of our officers or directors, regardless of whether we have the authority
to indemnify them against such liabilities or expenses.
Item
15. Recent Sales of Unregistered Securities
On
October 15, 2009, Peter Dunn, our founder, president and a director, acquired
22,460,000 shares of the Empire ’ s common stock at a price of $0.001 per share,
for total consideration, consisting of cash and services rendered valued at
$22,460. In addition, On October 15, 2009, 750,000 shares of common
stock were issued to Martin Fink, our executive vice-president and director;
20,000 shares of common stock were issued to Kyle Jackson, our vice-president
post production; 20,000 shares of common stock was issued to Alan Pao, a
programmer and 750,000 shares of common stock were issued to William B. Barnett,
one of Empire’s attorneys. The 1,540,000 shares of common stock were
issued for cash and services rendered to Empire by the
issuees. Messrs. Fink, Jackson, and Pao rendered services relating to
Empire preparation of its business and marketing plans, and Mr. Barnett rendered
legal services relating to the formation of Empire. The shares were valued at
$0.001 per share, for a total consideration of $1,540. All 24,000,000
shares were issued pursuant to Section 4(2) of the Securities Act and are
restricted shares as defined in the Securities Act.
Item
16. Exhibits
Exhibit Number
|
Description of Exhibits
|
|
3.1 ◊
|
Articles
of Incorporation
|
|
3.2 ◊
|
Bylaws
|
|
5.1*
|
Opinion
of the Law Offices of William B. Barnett, P.C. re: the legality of the
securities being registered
|
|
10.1
◊
|
Promissory
Note between Peter Dunn and Registrant dated October 15,
2009
|
|
10.2
◊
|
Agreement
to Advance Funds between Peter Dunn and Registrant dated January 25,
2010
|
|
23.1
|
Consent
of Rose, Snyder & Jacobs, a corporation of CPAs
|
|
23.2*
|
Consent
of the Law Offices of William B. Barnett, P.C. (included in Exhibit
5.1)
|
* To
be filed
Item
17. Undertakings
A. The
undersigned Registrant hereby undertakes:
1. To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(a) To
include any prospectus required by Section 10(a)(3) of the Securities Act of
1933;
(b) To
reflect in the prospectus any facts or events arising after the effective date
of 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
Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in the volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the “Calculation of Registration
Fee” table in the effective registration statement; and
(c) To
include any material information with respect to the plan of distribution not
previously disclosed in 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 herein, and the offering of such
securities at that time 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.
Intentionally omitted.
5.
That, for the purpose of determining liability under the Securities Act of 1933
to any purchaser:
i.
Intentionally omitted.
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.
6.
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.
II -
2
B. Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers and controlling persons of the Registrant
pursuant to the provisions described under Item 14 above or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II -
3
SIGNATURES
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 Los Angeles, California,
on February 26, 2010.
EMPIRE
POST MEDIA, INC.
By:
/s/ PETER DUNN
|
Peter
Dunn
|
President,
Treasurer, and Director
|
(Principal
Executive Officer, Principal Financial Officer, and
Principal Accounting Officer) |
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.
By:
/s/ PETER DUNN
|
Peter
Dunn
|
President,
Treasurer, and Director
|
(Principal
Executive Officer, Principal Financial Officer, and
Principal Accounting Officer) |
Date:
February 26, 2010
|
By:
/s/MARTIN FINK
|
Martin
Fink
|
Executive
Vice-President and Director
|
Date:
February 26, 2010
|
II -
4
EXHIBIT
INDEX
Exhibit Number
|
Description of Exhibit
|
|
Exhibit
3.1◊
|
Articles
of Incorporation
|
|
Exhibit
3.2◊
|
Bylaws
|
|
Exhibit
5.1*
|
Opinion
of the Law Offices of William B. Barnett, P.C. re: the legality of the
shares being registered
|
|
Exhibit
10.1◊
|
Promissory
Note between Peter Dunn and Registrant dated October 15,
2009
|
|
Exhibit
10.2◊
|
Agreement
to Advance Funds between Peter Dunn and Registrant dated January 25,
2010
|
|
Exhibit
23.1
|
Consent
of Rose, Snyder & Jacobs, a corporation of CPAs
|
|
Exhibit
23.2*
|
Consent
of Law Offices of William B. Barnett, P.C. (included in Exhibit
5.1)
|
* To
be filed.