Attached files
As filed with the Securities and Exchange Commission on June 2, 2010
SEC File No. 333-163342
____________________________________________________________________________
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 2 TO
FORM S-1
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
PROMAP CORPORATION
(Exact name of registrant as specified in its charter)
Colorado 7379 20-8096131
---------------------------- ------------------------- -------------------
(State or other jurisdiction (Primary Standard (IRS Employer
of incorporation) Industrial Classification Identification No.)
Code Number)
7060B S. Tucson Way
Centennial, Colorado 80112
(720) 889-0510
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Steven A. Tedesco
President
Promap Corporation
7060B S. Tucson Way
Centennial, Colorado 80112
(720) 889-0510
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
With a Copy to:
Jon D. Sawyer, Esq.
Jin Schauer & Saad LLC
600 Seventeenth St., Suite 2700S
Denver, Colorado 80202
Office (720) 889-2211
Fax (720) 889-2222
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
1
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
Registration Statement number of the earlier effective Registration Statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
Registration Statement number of the earlier effective Registration Statement
for the same offering. [ ]
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 [__] Accelerated filer [__]
Non-accelerated filer [__] Smaller reporting company [ X]
(Do not check if a smaller reporting company)
CALCULATION OF REGISTRATION FEE
____________________________________________________________________________
Proposed Proposed
Maximum Maximum
Title of Each Class Amount Offering Aggregate Amount of
of Securities to to be Price Offering Registration
be Registered (1) Registered Per Share Price (2) Fee
____________________________________________________________________________
Common Stock 2,300,000 $0.25 $575,000 $32.09
____________________________________________________________________________
(1) We intend to offer a minimum of 160,000 shares of our common stock (the
"Shares") up to a maximum of 800,000 Shares. We will establish an escrow
account and all proceeds will be deposited into said account until such
time as the minimum subscription, or $40,000 is raised, at which time
the funds will be released to us for use in operations. In the event we
do not raise the minimum proceeds before the expiration date of the
offering, all funds raised will be returned promptly to the subscribers
without deductions or interest.
(2) This amount represents the proposed maximum aggregate offering price of
the securities registered hereunder to be sold by the Registrant and the
selling shareholders. Estimated solely for purposes of calculating the
registration fee pursuant to Rule 457(o).
________________________
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 Securities and Exchange
Commission, acting pursuant to such Section 8(a), may determine.
2
PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED JUNE 2, 2010.
PROSPECTUS
PROMAP CORPORATION
is registering
1,500,000 shares of its Common Stock already issued
and offering
800,000 shares of its Common Stock on a "self-underwritten,"
"best efforts" basis
with a minimum of 160,000 shares and a maximum of 800,000 shares
We are registering 1,500,000 shares for sale on behalf of selling
shareholders and 800,000 shares for sale on behalf of our company. We intend
to offer the 800,000 shares at $0.25 per share for up to 120 days, which may
be extended an additional 90 days, after the date of this prospectus, and
once this offering is closed we will deregister any shares of such 800,000
shares remaining unsold to the public by a post-effective amendment to the
registration statement, prior to the commencement of the secondary offering
on behalf of the selling shareholders. This post-effective amendment will
also indicate the results of the offering by the company and indicate that
once the shares are trading on the over-the-counter Bulletin Board the
selling shareholders may sell at prevailing market prices or privately
negotiated prices.
This is the initial offering of common stock of Promap Corporation. No
public market currently exists for these shares. Promap Corporation is
offering for sale a minimum of 160,000 shares, up to a maximum of 800,000
shares of its common stock on a "self-underwritten," best efforts basis,
which means our officers and directors will attempt to sell the shares. The
shares will be offered at a price of $0.25 per share for a period of one
hundred and twenty (120) days from the date of this prospectus, subject to a
ninety (90) day extension. There is no minimum amount of shares required to
be purchased by any particular investor.
Promap Corporation has operated for 22 years, but its founder and
President has never devoted his full time to the business. Therefore, it is
considered a company with a limited operating history. Any investment in the
shares offered herein involves a high degree of risk. You should only
purchase shares if you can afford a complete loss of your investment. Before
investing, you should carefully read this prospectus and, particularly, the
"Risk Factors" section, beginning on page 9.
After our offering of 800,000 shares to the public and after a market
develops for our common stock, of which there is no assurance, our selling
shareholders plan to sell their shares at such prices as the market may
dictate from time to time. If any selling shareholder determines to sell
before the shares are quoted on the Over-the-Counter Bulletin Board or listed
on a national securities exchange, they will sell at the stated, fixed price
of $.25 per share; and thereafter, the selling shareholders may sell at
prevailing market prices or privately negotiated prices. The selling
shareholders are not paying any of the offering expenses and we will not
receive any of the proceeds from the sale of the shares by the selling
shareholders. There is no market price for our common stock now and our
pricing is arbitrary with no relation to market value, liquidation value,
earnings or dividends. The price for our public offering was arbitrarily set
at $.25 per share, based on speculative concept unsupported by any other
comparables.
3
Neither the U.S. Securities and Exchange Commission nor any state
securities division has approved or disapproved these securities, passed upon
the truthfulness or accuracy, or determined if this prospectus is current or
complete. Any representation to the contrary is a criminal offense.
Public Underwriting
Offering or Sales Proceeds to
Price Commissions Promap Corporation
-------- ----------- ------------------
Common Stock (1)
Total Offering -
Minimum Offering (2)(3) $0.25 $ 0 $ 40,000
Maximum Offering $0.25 $ 0 $200,000
The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed with
the U.S. Securities and Exchange Commission is effective. This prospectus is
not an offer to sell these securities and it is not soliciting an offer to
buy these securities in any state where the offer or sale is not permitted.
______________________
(1) As of the date of this prospectus, there is no public trading market for
our common stock and no assurance that a trading market for our shares will
ever develop.
(2) Pending the receipt and payment of any checks gathered to satisfy the
$40,000 minimum, all proceeds will be held in a non-interest bearing escrow
account by the Escrow Agent for this offering. The Escrow Agent is Corporate
Stock Transfer, Inc., who has the sole signature authority over this account
and determines whether the minimum offering requirements are satisfied. Funds
will be deposited in this escrow account no later than noon on the business
day following receipt. In the event the minimum is not sold within the 120-
day offering period or any extension of an additional 90 days at our
discretion, this offering will terminate and all funds will be returned
promptly to subscribers by the Escrow Agent without any deductions or payment
of interest. Subscribers will not be entitled to a return of funds from such
escrow during the 120-day offering period or any extension period, for a
potential total of 210 days. See "Use of Proceeds" and "Plan of
Distribution".
(3) The proceeds to the Company are shown before deduction for legal,
accounting, printing, and other expenses, estimated at $30,000. See "Use of
Proceeds" and "Dilution."
________________________
Subject to Completion, Dated June 2, 2010
4
TABLE OF CONTENTS
Page
SUMMARY OF PROSPECTUS ........................................... 7
General Information About Our Company ...................... 7
The Offering ............................................... 7
RISK FACTORS .................................................... 9
Risks Associated with Our Company .......................... 9
Risks Associated with this Offering ........................ 13
USE OF PROCEEDS ................................................. 15
DETERMINATION OF OFFERING PRICE ................................. 16
DILUTION OF THE PRICE YOU PAY FOR YOUR SHARES ................... 16
SELLING SHAREHOLDERS ............................................ 17
INVESTOR SUITABILITY REQUIREMENTS ............................... 18
PLAN OF DISTRIBUTION ............................................ 18
LEGAL PROCEEDINGS ............................................... 20
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS .... 21
Background Information about Our Officers and Directors .... 21
EXECUTIVE COMPENSATION .......................................... 22
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT .. 23
Future Sales by Existing Stockholders ...................... 23
DESCRIPTION OF SECURITIES ....................................... 24
Common Stock ............................................... 24
Preferred Stock ............................................ 24
Options .................................................... 24
Shares Eligible for Future Sale ............................ 24
Rule 144 ................................................... 24
INDEMNIFICATION ................................................. 25
DESCRIPTION OF BUSINESS ......................................... 26
General Information ........................................ 26
Industry Overview .......................................... 26
Process of Making Maps ..................................... 26
Revenue Strategy ........................................... 27
Management and Employees ................................... 27
Customers .................................................. 28
Marketing .................................................. 28
Patents and Trademarks ..................................... 29
Competition ................................................ 29
Government and Industry Regulation ......................... 29
5
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS ..................................... 29
Results of Operations for the year ended December 31, 2009
compared to the year ended December 31, 2008 ............. 29
Results of Operations for the three months ended March 31,
2010 as compared to the three months ended March 31, 2009. 30
Liquidity and Capital Resources ............................ 31
Plan of Operation .......................................... 32
Proposed Milestones to Implement Business Operations ....... 32
Recently Issued Accounting Pronouncements .................. 33
Seasonality ................................................ 34
DESCRIPTION OF PROPERTY ......................................... 34
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS .................. 34
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS ........ 34
Reports .................................................... 36
Stock Transfer Agent ....................................... 36
SUBSCRIPTION AGREEMENT AND PROCEDURES ........................... 36
EXPERTS AND LEGAL COUNSEL ....................................... 36
AVAILABLE INFORMATION ........................................... 37
FINANCIAL STATEMENTS ............................................ F-1
6
PROMAP CORPORATION
7060B S. Tucson Way
Centennial, Colorado 80112
SUMMARY OF PROSPECTUS
General Information about Our Company
Promap Corporation was incorporated in the State of Colorado on November
12, 1987. References in this document to "us," "we," or "Company" refer to
Promap Corporation.
We sell GIS maps to oil and gas companies which are working in the major
oil and gas basins in the United States and Canada. Nearly all sales during
the last three years have been to affiliates of the Company. Our
headquarters are located at 7060B S. Tucson Way, Centennial Colorado 80112.
Our phone number at our headquarters is (720) 889-0510. Our fiscal year end
is December 31.
The Offering
Following is a brief summary of this offering. Please see the Plan of
Distribution section for a more detailed description of the terms of the
offering.
Securities Being Offered We are offering 800,000 shares of our common
stock on a "best-efforts" basis with a minimum
of 160,000 shares and a maximum of 800,000
shares. After the offering is closed we will
cease the offering of our shares by the Company
and file a post-effective amendment to the
Registration Statement to deregister any unsold
shares and our selling shareholders may then
commence to sell their 1,500,000 shares in
market sales, if a market ever develops after
the offering closes.
Offering Price per Share $0.25
Offering Period The 800,000 shares are being offered for a
period not to exceed 120 days, unless extended
by our board of directors for an additional 90
days. The 1,500,000 shares which are being
offered by selling shareholders will be offered
after our offering is closed and a market has
developed, of which there is no assurance, and
their offering will continue indefinitely.
Gross Proceeds to Our
Company $ 40,000 (Minimum Offering)
$200,000 (Maximum Offering)
7
Use of Proceeds We intend to use the proceeds of this offering
to pay for sales and marketing activities,
general administrative expenses and for the
costs of the offering. See "Use of Proceeds."
We will not receive any of the proceeds from the
sale of shares by the selling shareholders.
Number of Shares Outstanding
Before the Offering: 9,500,000
Number of Shares Outstanding
After the Offering: 9,660,000 (Minimum Offering)
10,300,000 (Maximum Offering)
Plan of Distribution This is a self-underwritten offering. This
prospectus is part of a registration statement
that permits our officers and directors to sell
the Shares directly to the public, with no
commission or other remuneration payable to them
for any Shares they sell. The officers and
directors will not purchase Shares in this
offering, including, but not limited to,
purchases of Shares in order to reach the
minimum offering amount.
Escrow Account Pending sale of the $40,000 minimum, all
proceeds will be held in a non-interest bearing
escrow account by the Escrow Agent for this
offering. The Escrow Agent is Corporate Stock
Transfer, Inc. Funds will be deposited in this
escrow account no later than noon on the
business day following receipt. In the event the
minimum is not sold within the 120-day offering
period or any extension of an additional 90 days
at our discretion, this offering will terminate
and all funds will be returned promptly to
subscribers by the Escrow Agent without any
deductions or payment of interest. Subscribers
will not be entitled to a return of funds from
such escrow during the 120-day offering period
or any extension period, for a potential total
of 210 days. See "Use of Proceeds" and "Plan of
Distribution."
Investor Suitability
Requirements This offering is limited to investors resident
in Colorado, ________ and __________.
Purchasers in any subsequent trading market must
comply with the applicable securities laws of
the State in which they purchase our common
stock.
Subscription Agreement and
Procedures We will accept no subscriptions or indications
of interest until our registration statement is
effective. At that point, all subscriptions must
be made by the execution and delivery of a
subscription agreement, a form of which is
attached to this prospectus as Annex A.
Subscriptions are not binding until accepted.
8
Risk Factors An investment in these securities involves an
exceptionally high degree of risk and is
extremely speculative in nature. You should
carefully consider the information set forth in
the "Risk Factors" section.
RISK FACTORS
An investment in these securities involves an exceptionally high degree of
risk and is extremely speculative in nature. Following are what we believe
are all of the material risks involved if you decide to purchase shares in
this offering.
RISKS ASSOCIATED WITH OUR COMPANY:
WE HAVE A HISTORY OF LIMITED OPERATIONS.
We commenced our operations in November 1989 as a sideline business of
Steven Tedesco, our founder and President, who has been engaged in various
businesses in the oil and gas and coal industries. Most of the sales since
inception have been made to companies with which Mr. Tedesco has been
affiliated. During the fiscal year ended December 31, 2008, our sales
exceeded $130,000 and we were marginally profitable, but during the fiscal
year ended December 31, 2009, our sales declined due to the slow down in the
oil and gas business and we had a net loss of $32,405.
We may continue to incur net losses for the foreseeable future as we
continue to further develop our business. Our ability to generate and sustain
significant additional revenues or achieve profitability will depend upon the
factors discussed elsewhere in this "Risk Factors" section. We cannot assure
you that we will achieve or sustain profitability or that our operating
losses will not increase in the future. If we do achieve profitability, we
cannot be certain that we can sustain or increase profitability on a
quarterly or annual basis in the future.
We expect to incur operating losses for one or two more quarters until
our sales level has picked back up. We expect approximately $75,000 in
operating costs over the next twelve months. We cannot guarantee that we will
be successful in generating sufficient revenues or other funds in the future
to cover these operating costs. Failure to generate sufficient revenues or
additional financing when needed could cause us to go out of business.
OUR LIMITED OPERATING HISTORY MAKES IT DIFFICULT FOR US TO EVALUATE OUR
FUTURE BUSINESS PROSPECTS AND MAKE DECISIONS BASED ON THOSE ESTIMATES OF OUR
FUTURE PERFORMANCE.
We have operated as a corporation for some time but with a limited
amount of marketing effort and sales. This makes it difficult to evaluate
our business on the basis of historical operations. As a consequence, our
past results may not be indicative of future results. Although this is true
for any business, it is particularly true for us because of our limited
operating history. Reliance on historical results may hinder our ability to
9
anticipate what the results will be when we increase our marketing efforts
and otherwise attempt to increase our business. If we make poor budgetary
decisions as a result of unreliable historical data, we could continue to
incur losses, which may result in a decline in our stock price.
WE HAVE NO EXPERIENCE AS A PUBLIC COMPANY.
We have never operated as a public company. We have no experience in
complying with the various rules and regulations which are required of a
public company. As a result, we may not be able to operate successfully as a
public company, even if our operations are successful. We plan to comply with
all of the various rules and regulations which are required of a public
company. However, if we cannot operate successfully as a public company, your
investment may be materially adversely affected. Our inability to operate as
a public company could be the basis of your losing your entire investment in
us.
WE ARE IMPLEMENTING A STRATEGY TO GROW AND EXPAND OUR BUSINESS, WHICH MAY NOT
GENERATE INCREASES IN OUR REVENUES.
We intend to expand our business, and we plan to incur expenses
associated with our growth and expansion. We will need to generate greater
revenues to offset expenses associated with our growth, and we may be
unsuccessful in achieving greater revenues, despite our attempts to grow our
business. If our growth strategies do not result in increased revenues, we
may have to abandon our plans for further growth or may even reduce the
current size of our operations.
WE MAY NEED TO RAISE ADDITIONAL FUNDS, AND THESE FUNDS MAY NOT BE AVAILABLE
WHEN WE NEED THEM.
We believe that we can be profitable or at break even by the end of the
fiscal year ending December 31, 2010, because we believe that the oil and gas
business has been improving and the drilling activity, at least for oil, is
improving. With a renewed effort to market our business and with the
assistance of one or two part-time salesmen, we believe that we can increase
sales back to the target levels. Based upon our current plans, we believe
that we can control our expenses which are closely tied to our level of
business activity so that cash generated from operations is expected to be
sufficient for the foreseeable future to fund our operations at our currently
forecasted levels. To try to operate at a break-even level based upon our
current level of anticipated business activity, we believe that we must
generate approximately $75,000 in revenue per year. However, if our forecasts
are inaccurate, we will need to raise additional funds. On the other hand, we
may choose to scale back our operations to operate at break-even with a
smaller level of business activity, while adjusting our overhead to meet the
revenue from current operations. In addition, we expect that we will need to
raise additional funds if we decide to pursue more rapid expansion, the
development of new or enhanced services and products, appropriate responses
to competitive pressures, or if we must respond to unanticipated events that
require us to make additional investments. We cannot assure that additional
financing will be available when needed on favorable terms, or at all.
10
BECAUSE WE ARE SMALL AND DO NOT HAVE MUCH CAPITAL, WE MUST LIMIT OUR
OPERATIONS. A COMPANY IN OUR INDUSTRY WITH LIMITED OPERATIONS HAS A SMALLER
OPPORTUNITY TO BE SUCCESSFUL.
Because we are small and do not have much capital, we must limit our
operations. We must limit our operations to providing a limited range of
products and services as the only area in which we operate. Because we may
have to limit our operations, we may not generate sufficient sales to make a
profit. If we do not make a profit, we may have to suspend or cease
operations.
BECAUSE OUR CURRENT OFFICERS AND DIRECTORS ARE INVOLVED WITH OTHER
BUSINESSES, SOME OF WHICH ARE IN THE SAME INDUSTRY, THE MANNER IN WHICH WE
OPERATE MAY CREATE THE POSSIBILITY OF A CONFLICT OF INTEREST.
All of our officers and directors are also involved with other
businesses, some of which are other businesses in the same industry. Messrs.
Tedesco and Carington are involved in other businesses in the same industry.
These other arrangements could create conflicts of interest with respect to
our operations. Each of our officers and directors is aware of their
responsibilities with respect to corporate opportunities and plans to operate
our Company in such a manner as to minimize the effect of any conflict of
interest. Each officer and director has agreed to contract with the Company
on the same or better terms and conditions than each would with unaffiliated
third parties. Each of these officers and directors will use their best
judgments to resolve all potential conflicts. We cannot guarantee that any
potential conflicts can be avoided.
OUR SUCCESS WILL BE DEPENDENT UPON OUR MANAGEMENT.
Our success will be dependent upon the decision making of our directors
and executive officers. These individuals intend to commit as much time as
necessary to our business, but this commitment is no assurance of success.
The loss of any or all of these individuals, particularly Messrs. Tedesco and
Carington, could have a material, adverse impact on our operations. We have
no written employment agreements with any officers and directors, including
Messrs. Tedesco and Carington. We have not obtained key man life insurance on
the lives of any of these individuals.
SINCE OUR PRESIDENT AND CHIEF EXECUTIVE OFFICER HAS OTHER BUSINESS INTERESTS,
HE MAY NOT BE ABLE OR WILLING TO DEVOTE A SUFFICIENT AMOUNT OF TIME TO OUR
BUSINESS OPERATIONS.
Steven Tedesco, our President and Chief Executive Officer, currently
devotes approximately five hours per week providing management services to
us. While he presently possesses adequate time to attend to our interests,
it is possible that the demands on him from other obligations could increase,
with the result that he would no longer be able to devote sufficient time to
the management of our business. The loss of Mr. Tedesco to our business
would negatively impact our business development.
He focuses most of his time as President and Chief Executive Officer of
Admiral Bay Resources, a Canadian junior resource company. He also serves as
President of Running Foxes Petroleum, Inc. and as President of Atoka Coalbed
Methane Laboratories Corp.
11
WE ARE A RELATIVELY SMALL COMPANY WITH LIMITED RESOURCES COMPARED TO SOME OF
OUR CURRENT AND POTENTIAL COMPETITORS, WHICH MAY HINDER OUR ABILITY TO
COMPETE EFFECTIVELY.
Some of our current and potential competitors have longer operating
histories, significantly greater resources, broader name recognition, and a
larger installed base of clients than we have. As a result, these competitors
may have greater credibility with our potential new clients. They also may be
able to adopt more aggressive pricing policies and devote greater resources
to the development, promotion and sale of their products than we can to ours,
which would allow them to respond more quickly than us to changes in client
requirements.
WE MAY BE UNABLE TO HIRE AND RETAIN KEY PERSONNEL.
Our future success depends on our ability to attract qualified sales
personnel. We may be unable to attract these necessary personnel. If we fail
to attract or retain skilled employees, we may be unable to generate
sufficient revenue to offset our operating costs.
WE MAY NEED TO SUBSTANTIALLY INVEST IN MARKETING EFFORTS IN ORDER TO GROW OUR
BUSINESS, WHICH WILL BE EXPENSIVE.
In order to grow our business, we will need to develop and maintain
wider spread recognition and acceptance of our Company and our products. We
plan to rely primarily on word of mouth from our existing contacts we develop
personally through industry events to promote and market ourselves. To date,
marketing and advertising expenses have been negligible. If we fail to
successfully market and promote our business, we could lose potential clients
to our competitors, or our growth efforts may be ineffective. If we incur
significant expenses promoting and marketing ourselves, it could delay or
completely forestall our profitability.
OUR BUSINESS IS NOT DIVERSIFIED, WHICH COULD RESULT IN SIGNIFICANT
FLUCTUATIONS IN OUR OPERATING RESULTS.
All of our business is involved in the marketing and selling of oil and
gas production maps, and, accordingly, is dependent upon trends in the
sector. Downturns in the oil and gas industry could have a material adverse
effect on our business. A downturn in the oil and gas industry could also
reduce our stock price, even if our business is successful.
OUR DIRECTORS HAVE THE ABILITY TO SIGNIFICANTLY INFLUENCE ANY MATTERS TO BE
DECIDED BY THE STOCKHOLDERS, WHICH MAY PREVENT OR DELAY A CHANGE IN CONTROL
OF OUR COMPANY.
The current members of our Board of Directors beneficially own, in the
aggregate, approximately 90% of our common stock, on a fully diluted basis.
As a result, if they choose to vote in concert, our directors are
collectively able to significantly influence the outcome of any corporate
matters submitted to our stockholders for approval, including any transaction
that might cause a change in control, such as a merger or acquisition. It is
unlikely that stockholders in favor of a matter, which is opposed by the
Board of Directors, would be able to obtain the number of votes necessary to
overrule the vote of the Board of Directors. Further, the control by the
directors means that they may make decisions for us with which you may
disagree or that you may feel are not in our best interests.
12
RISKS ASSOCIATED WITH THIS OFFERING:
BUYING LOW-PRICED PENNY STOCKS IS VERY RISKY AND SPECULATIVE.
The shares being offered are defined as a penny stock under the
Securities and Exchange Act of 1934, and rules of the Commission. The
Exchange Act and such penny stock rules generally impose additional sales
practice and disclosure requirements on broker-dealers who sell our
securities to persons other than certain accredited investors who are,
generally, institutions with assets in excess of $5,000,000 or individuals
with net worth in excess of $1,000,000 or annual income exceeding $200,000,
or $300,000 jointly with spouse, or in transactions not recommended by the
broker-dealer. For transactions covered by the penny stock rules, a broker-
dealer must make a suitability determination for each purchaser and receive
the purchaser's written agreement prior to the sale. In addition, the broker-
dealer must make certain mandated disclosures in penny stock transactions,
including the actual sale or purchase price and actual bid and offer
quotations, the compensation to be received by the broker-dealer and certain
associated persons, and deliver certain disclosures required by the
Commission. Consequently, the penny stock rules may affect the ability of
broker-dealers to make a market in or trade our common stock and may also
affect your ability to resell any shares you may purchase in this offering in
the public markets.
WE ARE SELLING THIS OFFERING WITHOUT AN UNDERWRITER AND MAY BE UNABLE TO SELL
ANY SHARES.
This offering is self-underwritten, that is, we are not going to engage
the services of an underwriter to sell the shares; we intend to sell them
through our officers and directors, who will receive no commissions. We will
hold investment meetings and invite our friends, acquaintances and relatives
in an effort to sell the shares to them; however, there is no guarantee that
we will be able to sell any of the shares. In the event we are unable to sell
most of the shares in this offering, we will be forced to reduce our proposed
business operations until such time as additional monies can be obtained,
either through loans or financings.
YOU WILL INCUR IMMEDIATE AND SUBSTANTIAL DILUTION OF THE PRICE YOU PAY FOR
YOUR SHARES.
Our existing stockholders acquired their shares at a cost substantially
less than that which you will pay for the shares you purchase in this
offering. Accordingly, any investment you make in these shares will result in
the immediate and substantial dilution of the net tangible book value of
those shares from the $0.25 you pay for them. As of March 31, 2010, our net
tangible book value (assuming that a total of 9,500,000 Common Shares were
issued and outstanding) was $41,073 or approximately $.004 per share.
Assuming that $170,000 of maximum net proceeds are realized from this
Offering, the dilution to new investors from the Offering price of $0.25 per
share will be approximately $0.230 per share, and the gain by existing
investors will be approximately $0.016 per share. Assuming that $10,000 of
minimum net proceeds are realized from this Offering, the dilution to new
investors from the Offering price of $0.25 per share will be approximately
$0.245 per share, and the gain by existing investors will be approximately
$0.001 per share.
13
OUR COMMON STOCK CURRENTLY HAS NO TRADING MARKET AND THERE IS NO GUARANTEE A
TRADING MARKET WILL EVER DEVELOP FOR OUR SECURITIES.
There is presently no demand for our common stock. There is presently no
public market for the shares being offered in this prospectus. While we do
intend to apply for quotation in the Over-the-Counter Bulletin Board, we
cannot guarantee that our application will be approved and our stock listed
and quoted for sale. If no market is ever developed for our common stock, it
will be difficult for you to sell any shares you purchase in this offering.
In such a case, you may find that you are unable to achieve any benefit from
your investment or liquidate your shares without considerable delay, if at
all. In addition, if we fail to have our common stock quoted on a public
trading market, your common stock will not have a quantifiable value and it
may be difficult, if not impossible, to ever resell your shares, resulting in
an inability to realize any value from your investment.
THE OVER-THE-COUNTER MARKET FOR STOCK SUCH AS OURS HAS HAD EXTREME PRICE AND
VOLUME FLUCTUATIONS.
The securities of companies such as ours have historically experienced
extreme price and volume fluctuations during certain periods. These broad
market fluctuations and other factors, such as new product developments and
trends in the our industry and in the investment markets generally, as well
as economic conditions and quarterly variations in our operational results,
may have a negative effect on the market price of our common stock.
ALL OF OUR COMMON STOCK IS RESTRICTED BUT COULD BECOME ELIGIBLE FOR RESALE
UNDER RULE 144; THIS COULD CAUSE THE MARKET PRICE OF OUR COMMON STOCK TO DROP
SIGNIFICANTLY, EVEN IF OUR BUSINESS IS DOING WELL.
Of our total outstanding shares following this offering, 9,500,000 or
98.3% (minimum) or 92.2% (maximum) are restricted from immediate resale but
may be sold into the market subject to volume and manner of sale limitations
under Rule 144 beginning in ____________, 2010 (90 days after date of this
prospectus). This could cause the market price of our common stock to drop
significantly, even if our business is doing well. After this offering, we
will have outstanding 10,300,000 shares (maximum) or 9,660,000 (minimum) of
common stock based on the number of shares outstanding at March 31, 2010.
This includes the common shares we are selling in this offering, which may be
resold in the public market immediately.
As restrictions on resale end, the market price of our stock could drop
significantly if the holders of restricted shares sell them or are perceived
by the market as intending to sell them.
WE DO NOT EXPECT TO PAY DIVIDENDS ON COMMON STOCK.
We have not paid any cash dividends with respect to our common stock,
and it is unlikely that we will pay any dividends on our common stock in the
foreseeable future. Earnings, if any, that we may realize will be retained in
the business for further development and expansion.
14
USE OF PROCEEDS
We will not receive any proceeds from the sale of any of the 1,500,000
shares of common stock being registered in this prospectus and which are
currently held by our selling shareholders.
We have estimated the total proceeds from this offering to be $40,000,
assuming a minimum subscription, or $160,000, assuming all shares are sold,
which we cannot guarantee. These proceeds do not include offering costs,
which we estimate to be $30,000. We expect to disburse the proceeds from this
offering in the priority set forth below, during the first 12 months after
successful completion of this offering:
Minimum Total Maximum
Offering Proceeds of Offering
($40,000) $120,000 ($160,000)
---------- ---------- ----------
Total Proceeds $ 40,000 $120,000 $ 200,000
Less: Estimated Offering
Expenses (1) 30,000 30,000 30,000
---------- -------- ---------
Proceeds to Us: $ 10,000 $ 90,000 $ 170,000
========== ======== =========
Sales(2) $ 10,000 $ 20,000 $ 40,000
Working Capital(3) $ 0 $ 70,000 $ 130,000
_________________________
(1) Offering expenses include legal, accounting, printing, and escrow agent
fees. The escrow agent fees are estimated at $1,000.
(2) We plan to spend these funds on marketing and sales of the Company's
maps. Depending on the amount of money we raise we will hire one or two
sales persons and one or both of these persons will be part-time.
(3) We plan to spend our working capital in the following areas: Some of the
funds will be used to upgrade our website. The remaining funds will be used
for general and administrative expenses and possibly some for sales. The
amount and timing of working capital expenditures may vary significantly
depending upon numerous factors such as:
* Sales generated from existing customers,
* The development of marketing and sales resources,
* Administrative expenses, and
* Other requirements not now known or estimable.
Until we use the net proceeds for the above purposes, we intend to
invest such funds in short-term, interest-bearing, investment grade
obligations and deposit accounts.
If we raise an amount between the minimum and maximum, we will use the
excess amount above the minimum but below the maximum to expand our
operations, as discussed above.
15
We believe that our available cash and existing sources of funding,
together with the minimum proceeds of this offering and interest earned
thereon, will be adequate to maintain our current and planned operations for
at least the next twelve months.
DETERMINATION OF OFFERING PRICE
The offering price of the shares has been determined arbitrarily by us.
We considered no aspect of our capital structure in determining the offering
price or the number of shares to be offered. The price does not bear any
relationship to our assets, book value, earnings, or other established
criteria for valuing a privately held company. Accordingly, the offering
price should not be considered an indication of the actual value of our
securities.
DILUTION OF THE PRICE YOU PAY FOR YOUR SHARES
Dilution represents the difference between the offering price and the
net tangible book value per share immediately after completion of this
offering. Net tangible book value is the amount that results from subtracting
total liabilities and intangible assets from total assets. Dilution arises
mainly as a result of our arbitrary determination of the offering price of
the shares being offered. Dilution of the value of the shares you purchase is
also a result of the lower book value of the shares held by our existing
stockholders. As of March 31, 2010, the net tangible book value of our shares
was $41,073, or approximately $0.004 per share, based upon 9,500,000 shares
outstanding.
Upon completion of this offering, but without taking into account any
change in the net tangible book value after completion of this offering,
other than that resulting from the sale of the minimum (maximum) Shares and
receipt of the proceeds of $40,000 ($200,000), less offering expenses of
$30,000, the net tangible book value of the 10,300,000 shares to be
outstanding, assuming a maximum subscription, will be $211,073, or
approximately $0.020 per Share. If the minimum number of Shares is sold, of
which there can be no guarantee, the net tangible book value of the 9,660,000
shares to be outstanding would be $51,073, or approximately $0.005 per share.
Accordingly, the net tangible book value of the Shares held by our existing
stockholders will be increased by $0.016 per share, assuming a maximum
subscription and by $.001 assuming a minimum subscription. Assuming a
maximum subscription, without any additional investment on their part, and
the purchasers of Shares in this Offering will incur immediate dilution (a
reduction in net tangible book value per Share from the offering price of
$0.25 per Share) of $0.230 per share. If we sell the minimum amount, they
will incur immediate dilution (a reduction in net tangible book value per
Share from the offering price of $0.25 per Share) of $0.245 per share.
After completion of the sale of the minimum number of shares in this
offering, the new shareholders will own approximately 1.66% of the total
number of shares then outstanding, for which they will have made a cash
investment of $40,000, or $0.25 per Share. Upon completion of the sale of the
maximum number of Shares in this offering, the new shareholders will own
approximately 8% of the total number of shares then outstanding, for which
they will have made a cash investment of $200,000, or $0.25 per Share. The
16
existing stockholders will own approximately 98.3% and 92% based on the
minimum and maximum proceeds received of the total number of shares then
outstanding, for which they have made contributions of cash and/or services
and/or other assets, totaling $20,000 or $.002 per share.
The following table illustrates the per share dilution to new investors,
assuming both the minimum and maximum number of shares being offered, and
does not give any effect to the results of any operations subsequent to March
31, 2010 or the date of this registration statement:
Minimum Maximum
Offering Offering
-------- --------
Public Offering Price Per Share $ 0.25 $ 0.25
Net Tangible Book Value Prior To This Offering $ 41,073 $ 41,073
Net Tangible Book Value After Offering $ 51,073 $211,073
Immediate Dilution Per Share To New Investors $ 0.245 $ 0.230
The following table summarizes the number and percentage of shares
purchased, the amount and percentage of consideration paid and the average
price per Share paid by our existing stockholders and by new investors in
this offering:
Total
----------------------------------------------------
Price Number of Percent of Consideration
Per Share Shares Held Ownership Paid
--------- ----------- ---------- --------------
Existing Stockholders $ 0.002 9,500,000 98.3% (min)
92.0% (max) $ 20,000
Investors in This
Offering (Minimum) $ 0.25 160,000 1.7% $ 40,000
Investors in This
Offering (Maximum) $ 0.25 800,000 8% $ 200,000
SELLING SHAREHOLDERS
We are registering 1,500,000 shares of our common stock that were sold
to the ten investors listed in the table below during July 2009 in a private
stock offering exempt from registration pursuant to the provisions of Section
4(2) of the Securities Act of 1933, as amended. All investors were
accredited investors.
The following table lists all selling shareholders and other information
regarding the beneficial ownership of the shares owned by each of the selling
shareholders. Except as indicated in the footnotes to the table, no selling
shareholder is an affiliate of the Company. None of our selling shareholders
is a registered broker-dealer or affiliate of a registered broker-dealer.
17
Share Share Percentage Percentage
Ownership Ownership Ownership Ownership
Before After Before After
Shareholder's Name Issue Date Offering Offering Offering Offering(1)
------------------ ---------- --------- --------- ---------- -----------
Steven Tedesco(2) 7/24/2009 8,225,000 8,000,000 86.6% 81.8%
Christine Tedesco(3) 7/24/2009 200,000 0 2.1% 0
Joseph O'Farrell 7/24/2009 50,000 0 .5% 0
Steven Quoy 7/24/2009 200,000 0 2.1% 0
Lynn Quoy 7/24/2009 200,000 0 2.1% 0
Underwood Family
Partners 7/24/2009 400,000 0 4.2% 0
David Bramhill(4) 7/24/2009 100,000 0 1.1% 0
Michael Thomsen 7/24/2009 75,000 0 0.8% 0
David Lavigne 7/24/2009 25,000 0 0.3% 0
Robert Carington(5) 7/24/2009 25,000 0 0.3% 0
____________________
(1) Assuming maximum offering is sold.
(2) President and Director since November 1987.
(3) The spouse of Steven Tedesco.
(4) Director since July 2009.
(5) Chief Financial Officer since July 2009.
INVESTOR SUITABILITY REQUIREMENTS
Geographical Requirements
This offering is limited to investors resident in Colorado, ___________
and ___________.
We reserve the right to accept or reject any subscription in whole or in
part, for any reason or for no reason. Subscriptions will be accepted or
returned promptly, and all monies from rejected subscriptions will be
returned immediately to the subscriber, without interest or deductions.
Purchasers in any subsequent trading market must comply with the
applicable securities laws of the State in which they purchase our common
stock.
PLAN OF DISTRIBUTION
We are offering 800,000 shares of our common stock on a "self-
underwritten," "best-efforts" basis with a minimum of 160,000 shares and a
maximum of 800,000 shares. After the offering is closed we will cease our
offering of our shares by the Company and file a post-effective amendment to
the registration Statement to deregister any unsold shares and our selling
shareholders may then commence to sell their 1,500,000 shares as described
below, if a market ever develops after the offering closes.
The officers and directors will not purchase Shares in this offering,
including, but not limited to, purchases of Shares in order to reach the
minimum offering amount.
18
In offering the securities on our behalf, our officers and directors
will rely on the safe harbor from broker dealer registration set out in Rule
3a4-1 under the Securities Exchange Act of 1934. We believe that Messrs.
Steven A. Tedesco, Robert Carington and David Bramhill specifically meet the
provisions of Rule 3a4-1(a)(1)-(3) and (4)(ii) because they are not subject
to a statutory disqualification, as that term is defined under Section 3(a)39
of the Securities Exchange Act of 1934; they will not be compensated,
directly or indirectly for their participation in the offering; they will not
be, at the time of his participation, an associated person of a broker or
dealer; and all three will meet all of the elements of Rule 3a4-1(a)(4)(ii).
The Shares will be sold at the fixed price of $0.25 per Share until the
completion of this offering. There is no minimum amount of subscription
required by any particular investor. After the closing of this offering, our
selling shareholders may sell their shares at market prices or at any price
in privately negotiated transactions.
This offering will commence on the date of this prospectus and continue
for a period of 120 days, unless we extend the offering period for an
additional 90 days, or unless the offering is completed or otherwise
terminated by us for a potential total of 210 days. (the "Expiration Date").
Pending the receipt and payment of any checks gathered to satisfy the
$40,000 minimum, all proceeds will be held in a non-interest bearing escrow
by the Escrow Agent for this offering. The Escrow Agent is Corporate Stock
Transfer, Inc., who has the sole signature authority over this account and
determines whether the minimum offering requirements are satisfied. Funds
will be deposited in this escrow account no later than noon on the business
day following receipt. In the event the minimum is not sold within the 120-
day offering period or any extension of an additional 90 days at our
discretion, this offering will terminate and all funds will be returned
promptly to subscribers by the Escrow Agent without any deductions or payment
of interest. Subscribers will not be entitled to a return of funds from such
escrow during the 120-day offering period or any extension period, for a
potential total of 210 days. Once the minimum offering requirements are
satisfied, the funds will be released to us for use in the implementation of
our business plans. (See "Use of Proceeds.") The offering will then continue
until the maximum offering is sold and the total of $200,000 is received, or
the offering expires, whichever first occurs. Once the maximum amount has
been raised, all funds collected up to the maximum will be deposited directly
into our operating bank account for use in operations. In the event the
minimum offering amount is not sold prior to the Expiration Date, all monies
will be returned to investors, without interest or deduction.
The selling shareholders may sell some or all of their shares in one or
more transactions, including block transactions:
1. In the public market if the common stock may from time to time be
trading;
2. In privately negotiated transactions; or
3. In any combination of these methods of distribution.
There is currently no market for any of our shares, and we cannot give
any assurance that our shares will have any market value. Although we intend
to apply for trading of our common stock on the Over-the-Counter Bulletin
Board electronic quotation service, public trading of our common stock may
never materialize. In addition, if a market for our stock does materialize,
we cannot give any assurances that a public market for our securities may be
sustained.
19
If our common stock becomes traded on the Over-the-Counter Bulletin
Board electronic quotation service, then the sales price to the public will
vary according to the selling decisions of each selling shareholder and the
market for our stock at the time of resale. In these circumstances, the
sales price to the public may be:
1. The market price of our common stock prevailing at the time of
sale;
2. A price related to such prevailing market price of our common stock;
or
3. Such other price as the selling shareholders determine from time to
time.
We can provide no assurance that all or any of the common stock offered
will be sold by the selling shareholders named in this prospectus.
We are bearing all costs relating to the registration of the common
stock. The selling shareholders, however, will pay any commissions or other
fees payable to brokers or dealers in connection with any sale of the common
stock.
The selling shareholders named in this prospectus must comply with the
requirements of the Securities Act of 1933 and the Exchange Act of 1934 in
the offer and sale of the common stock. The selling shareholders and any
broker-dealers who execute sales for the selling shareholders may be deemed
to be an "underwriter" within the meaning of the Securities Act of 1933 in
connection with such sales. In particular, during such times as the selling
shareholders may be deemed to be engaged in a distribution of the common
stock, and therefore be considered to be an underwriter, they must comply
with applicable law and they may, among other things:
1. Not engage in any stabilization activities in connection with our
common stock;
2. Furnish each broker or dealer through which common stock may be
offered, such copies of this prospectus, as amended from time to
time, as may be required by such broker or dealer; and
3. Not bid for or purchase any of our securities or attempt to induce
any person to purchase any of our securities other than as permitted
under the Exchange Act.
LEGAL PROCEEDINGS
We are not involved in any pending legal proceeding nor are we aware of
any pending or threatened litigation against us. In addition, there has been
no litigation filed against us during the last ten years, and during the same
period none of our officers and directors has been involved in any criminal
proceedings, bankruptcy filings or other litigation of the type which is
required to be disclosed.
20
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Each of our directors is elected by the stockholders to a term of one
year and serves until his successor is elected and qualified. Each of our
officers is elected by the board of directors to a term of one year and
serves until his or her successor is duly elected and qualified, or until he
or she is removed from office. The board of directors has no committees.
The name, address, age and position of our officers and directors is set
forth below:
Name and Address Age Position(s)
---------------- --- -----------
Steven A. Tedesco 54 President, Chief Executive Officer and
7060B S. Tucson Way Director
Centennial, Colorado 80112
Robert W. Carington Jr. 48 Chief Financial Officer, Secretary and
108 Gatewood Court Treasurer
San Antonio, TX 78209
David Bramhill 58 Director
Fircroft Lane
Berrynarbor, Devon
UK Ex349SU
The persons named above are expected to hold said offices/positions
until the next annual meeting of our stockholders. These officers and
directors are our only officers, directors, promoters and control persons.
Background Information about Our Officers and Directors
Steve Tedesco has been the President, Chief Executive Officer and a
Director of our Company since its inception in November 1987. Our Company has
been somewhat of a sideline business for him while he worked with several
other businesses in the oil and gas and coal industry. In the last 25 years
of Mr. Tedesco's involvement in the Oil and Gas and Coal Bed Methane
industries, he has come to rely on various mapping sources as an essential
production tool. He has determined that in lieu of outsourcing these custom
maps it is easier and more productive to create them himself and have
complete control of the data and configuration of his desired final product.
Since inception of Promap in 1987, he has diligently researched and
accumulated the comprehensive understanding of mapping techniques and
necessary requirements that industry professionals desire when purchasing
custom maps. He focuses most of his time as President and Chief Executive
Officer of Admiral Bay Resources, a Canadian junior resource company with
coal bed methane assets in Kansas and Pennsylvania, as President of Running
Foxes Petroleum, Inc. with producing assets in Utah, Colorado and Kansas and
as President of Atoka Coalbed Methane Laboratories Corp. providing
unconventional laboratory and surface geochemical services to the industry.
He has over 25 years experience working with coals and coal mining and over
22 years experience in oil and gas exploration and production. More
specifically, since 1988 he has been working in the coal bed methane industry
in North American and Europe with a specific focus on Mid-Continent and
Eastern US coals. He has handled such projects from cradle to grave and is
21
well versed in all aspects of oil, gas and coal bed methane operations. In
1981, he received an MS in Geology from Southern Illinois University
specializing in coal and he is presently in the Ph.D program at the Colorado
School of Mines. Mr. Tedesco is the founder of Atoka Coal Labs, a company
specializing in coal analysis for the coalbed methane industry. He has also
served as President, CEO and a Director of Admiral Bay Resources Inc., a
public company traded on the Toronto Exchange, since November 2005. During
the last 5 years Mr. Tedesco has devoted approximately 20 hours per month to
the business of our Company and once this offering is completed he expects to
continue to devote approximately 20 hours per month to our business.
Robert W. Carington Jr. has served as Chief Financial Officer, Secretary
and Treasurer of our Company since July 1, 2009. He has served as Chief
Financial Officer of Admiral Bay Resources Inc. since 2005. He served as
Executive Vice President of Abaxas Petroleum Corporation from July 1998 until
October, 2005, and as a director of Abaxas from July 1998 until December
1999. Prior to joining Abaxas, Mr. Carington was a Managing Director with
Jefferies & Company, Inc. Prior to joining Jefferies & Company, Inc. in
1993, Mr. Carington was a Vice President at Howard, Weil, Labouisse,
Friedrichs, Inc. Mr. Carington was a petroleum engineer with Unocal
Corporation from 1983 to 1990. He received a Bachelor of Science in
Mechanical Engineering from Rice University in 1983 and a Masters of Business
Administration from the University of Houston in 1990.
David Bramhill has served as a director of our Company since July 1,
2009. As a veteran in the oil and gas business, he has extensive foreign and
domestic contacts which routinely require mapping services, including his
current employer, Nighthawk Energy PLC. Mr. Bramhill will be able to assist
the Company in focusing its marketing efforts within the energy business to
expand its customer base and to aggressively grow the business. Since March
2006, he has served as Managing Director of Nighthawk Energy PLC, a UK based
oil and gas company with equity positions in four projects in the mid-
continent region of the United States. Nighthawk is public-traded on the
London Stock Exchange AIM. From 2001 to March 2006, he served as the
Managing Director of Oil Quest Resources PLC, a UK based oil and gas company.
He has previously consulted in an engineering capacity for over 20 years on
behalf of Rotork PLC on projects for Shell, ExxonMobil, Petrofina, BP and
other international energy companies.
EXECUTIVE COMPENSATION
None of our officers and directors are compensated for the work they
perform on our behalf. However, our officers and directors are reimbursed for
any out-of-pocket expenses they incur on our behalf. In addition, in the
future, we may approve payment of salaries for our management, but currently,
no such plans have been approved. In addition, none of our officers,
directors or employees is a party to any employment agreements.
During the years ended December 31, 2007 and 2008, Mr. Tedesco received
distributions in the amounts of $20,000 and $5,000, respectively. During
this period Mr. Tedesco owned 100% of the Company. Mr. Tedesco has not taken
any distributions during 2009 and he has no plans to take any distributions
in the future.
22
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the date of this prospectus, the
total number of shares owned beneficially by each of our directors, officers
and key employees, individually and as a group, and the present owners of 5%
or more of our total outstanding shares. The table also reflects what such
ownership will be assuming completion of the sale of all shares in this
offering, which we can't guarantee. The stockholders listed below have direct
ownership of their shares and possess sole voting and dispositive power with
respect to the shares, and they have no rights to acquire any shares within
sixty days from options, warrants, rights, conversion privileges or other
similar obligations. A total of 9,500,000 shares are issued and outstanding.
Percentage of Ownership
Number of Number of ----------------------------
Shares Shares After Offering
Name and Address Before After Before -----------------
of Beneficial Owner (1) Offering Offering Offering Minimum Maximum
----------------------- ----------- ----------- -------- ------- -------
Steven A. Tedesco
70608 S. Tuscon Way
Centennial, CO 80112 8,425,000(2) 8,425,000(2) 88.7% 87.2% 81.8%
David Bramhill 100,000 100,000 1.1% 1.0% 1.0%
Fircroft Lane
Berrynarbor, Devon,
UK Ex349SU
Robert W. Carington Jr. 25,000 25,000 .3% .3% .2%
108 Gatewood Court
San Antonio, TX 78209
All Officers and Directors 8,550,000 8,550,000 90.0% 88.5% 83.0%
as a Group (three persons)
__________________
(1) All shares owned beneficially or of record.
(2) Includes 200,000 shares owned by Christine Tedesco, the wife of Steven Tedesco.
Future Sales by Existing Stockholders
A total of 9,500,000 shares have been issued to the existing
stockholders, all of which are restricted securities, as that term is defined
in Rule 144 of the Rules and Regulations of the SEC promulgated under the
Act. Under Rule 144, such shares can be publicly sold, subject to volume
restrictions and certain restrictions on the manner of sale. Any sale of
shares held by the existing stockholders (after applicable restrictions
expire) and/or the sale of shares purchased in this offering (which would be
immediately resalable after the offering), may have a depressive effect on
the price of our common stock in any market that may develop, of which there
can be no assurance.
23
DESCRIPTION OF SECURITIES
Common Stock
Our authorized capital stock consists of 50,000,000 shares of common
stock, no par value per share and 1,000,000 shares of Preferred Stock, no par
value per share to have such preferences as our board of directors may
determine from time to time. At September 30, 2009, a total of 9,500,000
common shares and no shares of Preferred Stock were issued and outstanding.
Common Stock
The holders of common stock are entitled to one vote for each share
held. The affirmative vote of a majority of votes cast at a meeting which
commences with a lawful quorum is sufficient for approval of most matters
upon which shareholders may or must vote, including the questions presented
for approval or ratification at the Annual Meeting. However, an amendment of
the articles of incorporation requires the affirmative vote of a majority of
the total voting power for approval. Common shares do not carry cumulative
voting rights, and holders of more than 50% of the common stock have the
power to elect all directors and, as a practical matter, to control the
Company. Holders of common stock are not entitled to preemptive rights, and
the common stock may only be redeemed at our election.
Preferred Stock
Our preferred shares are entitled to such rights, preferences and
limitations as determined by our board of directors. At the present time, no
rights, preferences or limitations have been established for our preferred
shares.
Options
We have not issued any options or other derivative securities.
Shares Eligible for Future Sale
When we complete the maximum offering, we will have 10,300,000
outstanding shares of common stock. The 800,000 shares of our common stock
sold in this offering will be freely transferable unless they are purchased
by our affiliates, as that term is defined in Rule 144 under the Securities
Act. The remaining outstanding shares of our common stock will be restricted,
which means they were originally issued in offerings that were not registered
on a registration statement filed with the SEC. These restricted shares may
be resold only through registration under the Securities Act or under an
available exemption from registration, including the exemption provided by
Rule 144.
Rule 144
In general, under Rule 144, beginning 90 days after the date of this
prospectus, a person, or persons whose shares are aggregated, including a
person who may be deemed our affiliate, who has beneficially owned restricted
shares of common stock for at least six months would be entitled to sell
publicly within any three-month period a number of shares that does not
exceed the greater of:
24
1% of the number of shares of our common stock then outstanding,
which will equal approximately 103,000 shares immediately after the
maximum offering; or the average weekly trading volume of our common
stock on OTC Bulletin Board during the four calendar weeks before the
filing of a notice on Form 144 relating to the sale.
Sales under Rule 144 are governed by manner of sale provisions and
notice requirements and to the availability of current public information
about us. Commencing 90 days after the date of this prospectus, all of our
current shareholders will be eligible to begin selling up to 9,500,000 shares
of our common stock pursuant to Rule 144, if these volume and manner of sale
limitations are complied with. We are unable to estimate accurately the
number of restricted shares that will actually be sold under Rule 144 because
this will depend in part on the market price of our common stock, the
personal circumstances of the sellers and other factors.
INDEMNIFICATION
Pursuant to the Articles of Incorporation and By-Laws of the
corporation, we may indemnify an officer or director who is made a party to
any proceeding, including a law suit, because of his position, if he acted in
good faith and in a manner he reasonably believed to be in our best interest.
In certain cases, we may advance expenses incurred in defending any such
proceeding. To the extent that the officer or director is successful on the
merits in any such proceeding as to which such person is to be indemnified,
we must indemnify him against all expenses incurred, including attorney's
fees. With respect to a derivative action, indemnity may be made only for
expenses actually and reasonably incurred in defending the proceeding, and if
the officer or director is judged liable, only by a court order. The prior
discussion of indemnification in this paragraph is intended to provide
indemnification to the fullest extent permitted by the laws of the State of
Colorado.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to our directors, officers and controlling persons
pursuant to the provisions above, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission, such indemnification
is against public policy as expressed in the Securities Act, and is,
therefore, unenforceable.
In the event that a claim for indemnification against such liabilities,
other than the payment by us of expenses incurred or paid by one of our
directors, officers, or controlling persons in the successful defense of any
action, suit or proceeding, is asserted by one of our directors, officers, or
controlling persons in connection with the securities being registered, we
will, unless in the opinion of our counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification is against public policy as expressed
in the Securities Act, and we will be governed by the final adjudication of
such issue.
25
DESCRIPTION OF OUR BUSINESS
General Information
Promap Corporation was incorporated in the State of Colorado on November
12, 1987. We are an independent GIS and custom draft energy mapping company
for the oil and gas industry in the United States and Canada. We provide
hard copy and digital format oil and gas production maps which cover various
geologic basins in numerous areas including: Denver Basin, Powder River
Basin, Michigan Basin, Williston Basin, Arkoma Basin, Illinois Basin,
Cincinnati Arch, Uintah - Piceance Basins and The Nevada Basin. We also
provide maps of the North American Coal Basin and Coal Bed Methane Activity
and North American Devonian - Mississippian Shale Map with detailed pipeline
locations.
These maps provide a quick reference to determining what reservoir
existing wells produce from, where present activity is and where the location
of the existing fields are in relation to the activity in a particular state
or geologic basin. We acquire most of the data used in our maps from public
sources such as BLM and various state oil and gas commissions, state
geological surveys, the Department of Natural Resources and the U.S.
Geological Survey (the "USGS").
Our maps, which are color coded by pay zone, are unique in that unlike
competing products, they are not limited to a particular state and instead
are defined by a geologic basin. The maps are priced to be competitive and
to be of interest to a wide variety of industry and non-industry
professionals. We currently have maps covering eleven different oil and gas
basins, but after the completion of this offering we intend to prepare maps
for several new areas which are of interest to the oil and gas industry.
These maps are generally updated bi-annually to include any new activity or
developments in each specific area.
We also provide custom mapping services to a variety of oil and gas
companies by providing custom maps to our client's specifications,
integrating data into either hardcopy or digital form. Client specifications
are compiled, analyzed, documented and assembled into digital form and then
printed to the client's requirements for size, quantity and quality. We can
also access resources in cartography, geography, surveying and GPS
disciplines for a more comprehensive approach to achieve total client
satisfaction.
Industry Overview
The oil and gas production mapping sector is a highly competitive niche
business that is essential to energy producers and exploration companies.
Accuracy of mapping data is of critical importance in oil and gas exploration
and production efforts. The risk and costs involved in establishing where to
explore in a particular basin, or where to acquire new assets, are simply too
high to leave to inaccurate information. When so much economic risk is at
stake, it is obviously important to have precise, up-to-date production data.
Process of Making Maps
The first step in making a new map is creating the land grid and
location of the existing oil and gas fields. This is sometimes the largest
cost component because either the land grid has to be purchased or it is
digitized from the USGS topographical maps. Then the oil and gas fields are
26
digitized onto the maps. A map can take a GIS technician anywhere from 60 to
90 days to create. Next you add the stratigraphic column, cultural
information, specific terrain features and pipelines to the map. The final
step is actually printing the maps as they are needed. All of our basic maps
have been prepared in digital form, and from there we sometimes add
additional features requested by the client or we can just print out the map
as it is. We also expect to prepare new maps if and when they are requested
by clients.
Revenue Strategy
The petroleum business is continually expanding as the high dependence
of most modern industrial transport, agricultural, and industrial
infrastructures rely on the relatively low cost and high availability of oil
and natural gas. The possibility of production declines and probable
increases in the price of oil are expected to have negative implications for
the global economy unless additional hydrocarbons are discovered and current
field extraction is maximized. As more exploration companies endeavor to
extract maximum hydrocarbons they will need access to detailed, up-to-date
mapping products in order to be competitive in terms of leasing in new areas,
divesting, acquiring or just maintaining their existing assets. There are
numerous new areas being developed that will require the production of new
maps as well as constant updating of existing ones. Frequently, the first
step an exploration or development company, drilling contractor, investor
group, or independent consultant takes is to identify the regional area of
interest. Our maps are an excellent tool for evaluating potential exploration
sites covering large geographic areas. Field locations, general subsurface
structure and geologic age of productive reservoirs are depicted on one type
of our most popular multicolor map. Most of our maps are available in digital
format and can be customized for individual needs. Our revenue growth
strategy involves expanding the range of geographic information systems
services offerings, and increasing our penetration into the oil and gas
production mapping market. The addition of new geographical information
systems services is highly dependent on our ability to acquire additional
hardware and software applications to become a state of the art mapping
facility.
Management and Employees
At this time we have no full time employees and Mr. Tedesco is a part-
time employee. We have traditionally contracted with employees of affiliated
companies to perform the services necessary to produce the maps. If the
offering is successful and we obtain the minimum proceeds we will initiate
the hiring of one or two part-time Regional Sales Managers, depending on how
much is raised.
We will continue to hire part-time help as needed from time-to-time for
specific projects. We do not pay salaries to our officers. However, we
reimburse them for any out-of-pocket expenses they incur on our behalf. In
addition, in the future, we may approve the payment of salaries for our
management, but currently, no such plans have been approved. We do not
currently pay for vacation, holidays or provide major medical coverage. None
of our officers or directors is a party to any employment agreement. However,
we may adopt such plans in the future.
27
Customers
Our customers have traditionally been small to mid-size oil and gas
companies in the US and Canada, to which we provide a low-cost, high quality
graphic solution. Thus far all of our customers have been companies that
have some affiliation with us, but after we complete this offering we intend
to market our maps to others companies of the same size. These companies
typically do not have the resources to establish a GIS or graphics staff. In
the future we intend to market our maps to companies in other industries such
as the financial sector, which would use our maps for due diligence and asset
evaluation purposes. In 2008 our four largest customers accounted for over
80% of our sales. These companies were: Running Foxes Petroleum, Mountain
Oil and Gas, Nighthawk Energy and Admiral Bay Resources, Inc. In 2009 our
two largest customers accounted for about 98% or our sales. These companies
were Running Foxes Petroleum and Admiral Bay Resources. Each of Running
Foxes Petroleum, Nighthawk Energy and Admiral Bay Resources, Inc. are
affiliated companies which pay market prices for all of our products
including custom mapping designs. Steve Tedesco, our President and his wife
own 100% of Running Foxes Petroleum, and Steve serves as its President.
Steve Tedesco also serves as President, Chief Executive Officer and a
Director of Admiral Bay Resources, a publicly-held Canadian junior resource
company. David Bramhill, one of our directors, serves as Managing Director
of Nighthawk Energy, a UK based oil and gas company.
Running Foxes Petroleum has been active over the last two years in oil
and gas exploration and it often uses independent drilling partners when it
drills wells. Running Foxes and its partners require mapping services on an
ongoing basis as development of projects are advanced. The Company provides
critical services to Running Foxes and its partners on an as needed basis and
by doing so reduces the overall administrative expenses of the parties.
Sales to these parties in 2008 and 2009 were the result of multiple small to
medium size orders placed throughout the two year period. All of the billing
on the projects in which Running Foxes is involved is sent to Running Foxes,
which may in turn bill its partners for some of the costs.
All services provided by us to related and affiliated parties are non-
contractual and the prices are agreed to in advance by the parties. Rates
are periodically matched by the affiliates with third party rates and are
determined to be comparable. Orders placed with us may not be cancelled
after commencement of mapping services unless the purchaser remits full
payment for any partially completed documents.
We plan to continue with these transactions since no contractual
obligations exist and each affiliate is free to use the services of any
provider in the marketplace. The decision of these affiliates to reduce or
terminate the amount of business that they provide the Company would
adversely affect the Company.
Marketing
We have not engaged in any marketing activities over the last several
years. In prior years we had engaged in a direct mail marketing promotion to
oil and gas industry participants. If this offering is completed we intend
to establish one or two Regional Sales Managers in several sales regions
across the United States and Canada. Each Regional Sales Manager will start
marketing our maps to oil and gas professionals and others who might have a
use for our maps. Each Regional Sales Manager will report to the Company's
28
President and be responsible for developing and implementing a sales program
which meets our specific targets. To assist the Sales Managers in developing
their target regions, we intend on developing an extensive database of
potential customers, which includes oil and gas professionals, petroleum
engineers, educational and financial institutions. We will engage in direct-
sale marketing efforts, whereby we will require each of our Sales Managers to
establish relationships with our target customers in order to demonstrate the
capabilities and advantages of Promap products. We also anticipate a
comprehensive email campaign and mass mailing program. The directors and
officers of the Company have extensive personal and business contacts within
the industry, and we believe that this approach, combined with word of mouth
advertising will significantly increase our business.
Patents and Trademarks:
We do not currently have any patents or trademarks outstanding.
Competition
The oil and gas mapping business is very competitive. The market for
oil and gas maps is served by a number of companies such as Geomap Company,
the largest supplier of geologic mapping services in the United States, and
HIS Inc., a global company listed on the NYSE which provides extensive
critical information to its customers in a number of industries including
energy, and a number of smaller companies. Most of the large oil and gas
companies have their own in-house mapping departments.
As noted in "RISK FACTORS," many or all of these competitors have
greater financial and other resources than we have. Most of these companies
are focused on the larger customers. We plan to focus our energy on the
smaller accounts and believe this space will provide the necessary client
base and revenues to make our business profitable.
We intend to compete by providing to the smaller oil and gas companies
and other customers a low-cost, high quality graphic solution that meets
their specific needs.
Government and Industry Regulation
We are not subject to any material government or industry regulation.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This section of the prospectus includes a number of forward-looking
statements that reflect our current views with respect to future events and
financial performance. Forward-looking statements are often identified by
words like: believe, expect, estimate, anticipate, intend, project and
similar expressions, or words which, by their nature, refer to future events.
You should not place undue certainty on these forward-looking statements,
which apply only as of the date of this prospectus. These forward-looking
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from historical results or our
predictions.
Results of Operation for the year ended December 31, 2009 as compared to the
year ended December 31, 2008.
29
Revenues for the year ended December 31, 2009 were $38,003 as compared
to the revenues of $135,662 for the year ended December 31, 2008. This 72%
decrease in revenues in the year ended December 31, 2009 was due to a
significant decrease in new oil and gas drilling activity caused primarily by
the drop in the prices of oil and particularly natural gas.
The cost of goods sold for the year ended December 31, 2009 was $7,436
as compared to $14,167 for the year ended December 31, 2008. This small
decrease in cost of goods sold was due to the decrease in sales for the year
ended December 31, 2009.
The only operating expenses during these fiscal years consisted of
general and administrative expenses which were $63,311 in the year ended
December 31, 2009 as compared to $117,278 for the year ended December 31,
2008. The primary reason for the decrease is that officer compensation
dropped from $100,488 in 2008 to $31,425 in 2009. This decrease was offset
by the expenditure of $19,030 in legal and accounting fees in 2009 as
compared to no legal and accounting fees in 2008.
The net loss for the year ended December 31, 2009 was $32,405 as
compared to a net income of $5,679 for the year ended December 31, 2008. The
reason for the change from net income in the 2008 period to a loss in the
2009 nine month period is that the revenues declined by 72% between the two
fiscal year periods.
We plan to make every effort to keep operating expenses relatively
constant except for the addition of one or two part-time salesmen. If and
when they are able to increase sales, we will increase the amount of time
they work. If their efforts are unsuccessful or if the oil and gas drilling
activity slows down significantly, we will cut expenses as much as possible
and wait out the downturn. If we are able to increase sales significantly we
may decide to raise additional financing to help finance the growth. We
cannot assure that additional financing will be available when needed on
favorable terms, or at all.
We cannot guarantee that we will be successful in generating sufficient
revenues or other funds in the future to cover our operating costs. Failure
to generate sufficient revenues or additional financing when needed could
cause us to go out of business.
Results of Operation for the three months ended March 31, 2010 as compared to
the three months ended March 31, 2009.
Revenues for the three months ended March 31, 2010 were $18,114 as
compared to the revenues of $3,493 for the three months ended March 31, 2009.
This $14,621 increase in revenues in the three months ended March 31, 2010
was due to an increase in new oil and gas drilling activity during the
quarter.
The cost of goods sold for the three months ended March 31, 2010 was
$1,000 as compared to $7,035 for the three months ended March 31, 2009. This
small decrease in cost of goods sold was due to an unusually high amount in
the three months ended March 31, 2009.
30
The only operating expenses during these periods consisted of general
and administrative expenses which were $7,504 in the three months ended March
31, 2010 as compared to $114 for the three months ended March 31, 2009. The
amount for 2010 was approximately in line with historical expenses whereas
the amount for 2009 was unusually low because of the timing of when certain
charges were booked in 2009.
The net income for the three months ended March 31, 2010 was $7,392 as
compared to a net loss of $3,576 for the three months ended March 31, 2009.
The reason for the improvement from a loss of $3,576 to income of $7,392 was
the significant improvement in sales during the most recent three months.
We plan to make every effort to keep operating expenses relatively
constant except for the addition of one or two part-time salesmen. If and
when they are able to increase sales, we will increase the amount of time
they work. If their efforts are unsuccessful or if the oil and gas drilling
activity slows down significantly, we will cut expenses as much as possible
and wait out the downturn. If we are able to increase sales significantly we
may decide to raise additional financing to help finance the growth. We
cannot assure that additional financing will be available when needed on
favorable terms, or at all.
We cannot guarantee that we will be successful in generating sufficient
revenues or other funds in the future to cover our operating costs. Failure
to generate sufficient revenues or additional financing when needed could
cause us to go out of business.
Liquidity and Capital Resources
As of March 31, 2010, we had $41,073 of working capital compared to
$32,181 of working capital as of December 31, 2009.
Net cash used for operating activities was $6,620 during the three
months ended March 31, 2010 as compared to net cash used for operating
activities of $36,075 during the three months ended March 31, 2009.
Net cash used for operating activities was $27,520 during the year ended
December 31, 2009 as compared to net cash provided by operating activities of
$39,926 during the year ended December 31, 2008.
There was $15,000 of cash flows provided by financing activities during
the year ended December 31, 2009 as compared to $20,000 used for financing
activities during the year ended December 31, 2008. The $20,000 represented
a distribution to the sole shareholder at the time.
We believe that the offering will provide sufficient capital in the
short term for our current level of operations. This is because we believe
that we can generate sufficient sales and services within our present
organizational structure and resources to become profitable in our
operations. Additional resources will be needed to increase our sales staff
and to otherwise increase advertising and marketing.
Otherwise, we do not anticipate needing to raise additional capital
resources in the next twelve months.
31
Until the offering is complete and the operations return to cash flow
positive, our President may be willing to fund the operations on a limited
basis in order to continue the business. Our principle source of liquidity
will be our operations. We expect variation in revenues to account for the
difference between a profit and a loss. Our business activity is closely tied
to the oil and gas business. A slow down in the oil and gas business would
have a negative impact to our business. In any case, we try to operate with
minimal overhead. Our primary activity will be to seek to find new customers.
If we succeed in expanding our client base and generating sufficient sales,
we will become profitable. We cannot guarantee that this will ever occur. Our
plan is to build our Company in any manner which will be successful.
Plan of Operation
Our plan for the twelve months immediately after the closing of this
offering is to operate at a profit or at break even. Our plan is to generate
sufficient additional sales and services within our present organizational
structure and resources with the possible addition of part-time sales help to
return to profitability in our operations.
Currently, we are conducting business in only one location in the Denver
Metropolitan area. We have no plans to expand into other locations or areas.
The timing of the completion of the milestones needed to become profitable
are not directly dependent on the success of this offering. We believe that
we can return to profitability as we are presently organized with sufficient
business.
Other than the shares offered by this prospectus no other source of
capital has been identified or sought.
If we are not successful in our operations we will be faced with several
options:
1. Cut back operations as much as possible and attempt to wait out the
downturn in the business;
2. Cease operations and go out of business;
3. Continue to seek alternative and acceptable sources of capital;
4. Bring in additional capital that may result in a change of control;
or
5. Identify a candidate for acquisition that seeks access to the public
marketplace and its financing sources.
Currently, we have sufficient capital to implement our business
operations or to sustain them for the next twelve months. If we can become
profitable, we could operate at our present level indefinitely.
If we raise less than the maximum in this offering, we will use the
funds raised as disclosed in "Use of Proceeds" as discussed in this
registration statement. If we only raise the minimum offering, we will use
the funds raised as disclosed in "Use of Proceeds" as discussed in this
registration statement. With the proceeds of only the minimum offering, we
believe that we can adjust our sales and expenses to operate for at least one
year before we become profitable or go out of business.
Proposed Milestones to Implement Business Operations
At the present time, we are operating from one location in the Denver
Metropolitan area. Our plan is to return our operation to profitability by
the end of our next fiscal year. We estimate that we must generate
approximately $12,000 in sales per month to return to the level of
profitability we experienced in 2007 and 2008.
32
We believe that we can be profitable or at break even by the end of the
fiscal year ending December 31, 2010, because we believe that the oil and gas
business has been improving and the drilling activity, at least for oil, is
improving. With a renewed effort to market our business and with the
assistance of one or two part-time salesmen, we believe that we can increase
sales back to the target levels. Based upon our current plans, we believe
that we can control our expenses which are closely tied to our level of
business activity so that cash generated from operations is expected to be
sufficient for the foreseeable future to fund our operations at our currently
forecasted levels. To try to operate at a break-even level based upon our
current level of anticipated business activity, we believe that we must
generate approximately $75,000 in revenue per year. However, if our forecasts
are inaccurate, we will need to raise additional funds. On the other hand, we
may choose to scale back our operations to operate at break-even with a
smaller level of business activity, while adjusting our overhead to meet the
revenue from current operations. In addition, we expect that we will need to
raise additional funds if we decide to pursue more rapid expansion, the
development of new or enhanced services and products, appropriate responses
to competitive pressures, or if we must respond to unanticipated events that
require us to make additional investments. We cannot assure that additional
financing will be available when needed on favorable terms, or at all.
We expect to incur operating losses for one or two more quarters until
our sales level has picked back up. We expect approximately $75,000 in
operating costs over the next twelve months. We cannot guarantee that we will
be successful in generating sufficient revenues or other funds in the future
to cover these operating costs. Failure to generate sufficient revenues or
additional financing when needed could cause us to go out of business
No commitments to provide additional funds have been made by management
or current shareholders. There is no assurance that additional funds will be
made available to us on terms that will be acceptable, or at all, if and when
needed. We expect to continue to generate and increase sales, but there can
be no assurance we will generate sales sufficient to continue operations or
to expand.
We also are planning to rely on the possibility of referrals from
clients and will strive to satisfy our clients. We believe that referrals
will be an effective form of advertising because of the quality of service
that we bring to clients. We believe that satisfied clients will bring more
and repeat clients.
In the next 12 months, we do not intend to spend any material funds on
research and development and do not intend to purchase any large equipment.
Recently Issued Accounting Pronouncements
We do not expect the adoption of any recently issued accounting
pronouncements to have a significant impact on our net results of operations,
financial position, or cash flows.
33
Seasonality
We do not expect our sales to be impacted by seasonal demands for our
products and services.
DESCRIPTION OF PROPERTY
We rent office space from our President and major shareholder, Mr.
Steven Tedesco, under a verbal month to month lease for which we pay no rent
per month. This office space is located at 7060B S. Tucson Way, Centennial,
Colorado 80112. We currently carry no inventory and have no other property.
With the proceeds of this offering, we do not plan to acquire inventory.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We rent office space from our President and major shareholder, Mr.
Steven Tedesco, under a verbal month to month lease for which we pay no rent
per month.
In the year ended December 31,2009, approximately 98% of our sales were
to Running Foxes Petroleum and Admiral Bay Resources and in the year ended
December 31, 2008, over 80% of our sales were to these same two affiliates
and one other affiliate named Nighthawk Energy. Each of these affiliates
pays market prices for all of our products including mapping designs. All of
the mapping services provided to these affiliates are non-contractual and the
prices are agreed to in advance by the parties. Rates are periodically
matched by the affiliates with third party rates and are determined to be
comparable. We plan to continue with these transactions but each affiliate
is free to use the services of any provider in the marketplace if the
conflict of interest becomes an issue with either party. If the Company
needs to deal with a conflict of interest issue, the matter will be addressed
by the Board of Directors and any interested directors will abstain from
voting on the matter.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
No public market currently exists for shares of our common stock.
Following completion of this offering, we intend to apply to have our common
stock listed for quotation on the Over-the-Counter Bulletin Board. As of
March 31, 2010, we had 10 holders of our common stock.
The Securities and Exchange Commission has also adopted rules that
regulate broker-dealer practices in connection with transactions in penny
stocks. Penny stocks are generally equity securities with a price of less
than $5.00 (other than securities registered on certain national securities
exchanges or quoted on the Nasdaq system, provided that current price and
volume information with respect to transactions in such securities is
provided by the exchange or system).
A purchaser is purchasing penny stock which limits the ability to sell
the stock. The shares offered by this prospectus constitute penny stock under
the Securities and Exchange Act. The shares will remain penny stocks for the
foreseeable future. The classification of penny stock makes it more difficult
for a broker-dealer to sell the stock into a secondary market, which makes it
34
more difficult for a purchaser to liquidate his/her investment. Any broker-
dealer engaged by the purchaser for the purpose of selling his or her shares
in us will be subject to Rules 15g-1 through 15g-10 of the Securities and
Exchange Act. Rather than creating a need to comply with those rules, some
broker-dealers will refuse to attempt to sell penny stock.
The penny stock rules require a broker-dealer, prior to a transaction in
a penny stock not otherwise exempt from those rules, to deliver a
standardized risk disclosure document prepared by the Commission, which:
* contains a description of the nature and level of risk in the market
for penny stocks in both public offerings and secondary trading;
* contains a description of the broker's or dealer's duties to the
client and of the rights and remedies available to the client with
respect to a violation to such duties or other requirements of the
Securities Act of 1934, as amended;
* contains a brief, clear, narrative description of a dealer market,
including "bid" and "ask" prices for penny stocks and the
significance of the spread between the bid and ask price;
* contains a toll-free telephone number for inquiries on disciplinary
actions;
* defines significant terms in the disclosure document or in the
conduct of trading penny stocks; and
* contains such other information and is in such form (including
language, type, size and format) as the Securities and Exchange
Commission shall require by rule or regulation.
The broker-dealer also must provide, prior to effecting any transaction
in a penny stock, to the client:
* the bid and offer quotations for the penny stock;
* the compensation of the broker-dealer and its salesperson in the
transaction;
* the number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the
market for such stock; and
* monthly account statements showing the market value of each penny
stock held in the client's account.
In addition, the penny stock rules require that prior to a transaction
in a penny stock not otherwise exempt from those rules, the broker-dealer
must make a special written determination that the penny stock is a suitable
investment for the purchaser and receive the purchaser's written
acknowledgment of the receipt of a risk disclosure statement, a written
agreement to transactions involving penny stocks, and a signed and dated copy
of a written suitability statement. These disclosure requirements will have
the effect of reducing the trading activity in the secondary market for our
stock because it will be subject to these penny stock rules. Therefore,
stockholders may have difficulty selling their securities.
35
Reports
Once our registration statement under Form S-1 has been declared
effective, we will be subject to certain reporting requirements and will
furnish annual financial reports to our stockholders, certified by our
independent accountants, and will furnish unaudited quarterly financial
reports in our quarterly reports filed electronically with the SEC. All
reports and information filed by us can be found at the SEC website,
www.sec.gov.
Stock Transfer Agent
The stock transfer agent for our securities is Corporate Stock Transfer,
Inc. of Denver, Colorado. Their address is 3200 Cherry Creek Drive South,
Suite 430, Denver, Colorado 80209. Their phone number is (303) 282-4800.
SUBSCRIPTION AGREEMENT AND PROCEDURES
We will accept no subscriptions or indications of interest until our
registration statement is effective. At that point, all subscriptions must be
made by the execution and delivery of a subscription agreement, a form of
which is attached to this prospectus as Annex A. By executing the
subscription agreement, each purchaser will agree to pay the purchase price
of the shares subscribed for at the closing at which such subscription is
accepted. We have the right to revoke any offers made under this prospectus
and to refuse to sell shares to a particular subscriber if the subscriber
does not promptly supply all information we request or if we disapprove the
sale. Subscriptions are not binding until accepted. We will refuse any
subscription by giving written notice to the subscriber by personal delivery
or first-class mail. We may reject any subscription at any time prior to
acceptance, in whole or in part, in our sole discretion.
In order to subscribe for shares, a prospective investor must deliver
the following documents to us:
1. a complete and executed subscription agreement, in the form attached
to this prospectus as Annex A;
2. the full amount of the subscription price paid in United States
dollars in cash or by check, bank draft or money order made payable
to Promap Corporation-Corporate Stock Transfer, Inc. Escrow Account.
EXPERTS AND LEGAL COUNSEL
Our financial statements included in this prospectus have been audited
by independent certified public accountants. We include those financial
statements in reliance on the report of the firm of Ronald R. Chadwick, P.C.,
of Aurora, Colorado, given upon their authority as experts in accounting and
auditing.
The law firm of Jin Schauer & Saad LLC of Denver, Colorado has passed
upon the validity of the shares being offered and certain other legal matters
and is representing us in connection with this offering.
36
AVAILABLE INFORMATION
We have filed this registration statement on Form S-1, of which this
prospectus is a part, with the U.S. Securities and Exchange Commission. Upon
completion of this registration, we will be subject to the informational
requirements of the Exchange Act and, in accordance therewith, will file all
requisite reports, such as Forms 10-K, 10-Q and 8-K, proxy statements, under
Sec.15(d) of the Exchange Act, and other information with the Commission.
Such reports, proxy statements, this registration statement and other
information, may be inspected and copied at the public reference facilities
maintained by the Commission at 100 F. Street N.E., Washington, D.C. 20549.
Copies of all materials may be obtained from the Public Reference Section of
the Commission's Washington, D.C. office at prescribed rates. The Commission
also maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants that file
electronically with the Commission at http://www.sec.gov.
37
PROMAP CORPORATION
FINANCIAL STATEMENTS
December 31, 2008 and 2009
and March 31, 2010 (Unaudited)
PROMAP CORPORATION
TABLE OF CONTENTS
Page
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM ........................................... F-1
FINANCIAL STATEMENTS
Balance sheets .................................................. F-2
Statements of operations ........................................ F-3
Statements of stockholders' equity .............................. F-4
Statements of cash flows ........................................ F-5
Notes to financial statements ................................... F-7
RONALD R. CHADWICK, P.C.
Certified Public Accountant
2851 South Parker Road, Suite 720
Aurora, Colorado 80014
Telephone (303)306-1967
Fax (303)306-1944
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
Promap Corporation
Centennial, Colorado
I have audited the accompanying balance sheets of Promap Corporation as of
December 31, 2008 and 2009, and the related statements of operations,
stockholders' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial statements based
on my audit.
I conducted my audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. I believe that my
audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Promap Corporation as of
December 31, 2008 and 2009, and the results of its operations and its cash
flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
Aurora, Colorado /s/ Ronald R. Chadwick, P.C.
March 22, 2010 RONALD R. CHADWICK, P.C.
F-1
PROMAP CORPORATION
BALANCE SHEETS
Dec. 31, 2008 Dec. 31, 2009 March 31, 2010
------------- ------------- --------------
(Unaudited)
ASSETS
Current assets
Cash $40,651 $28,131 $21,511
Accounts receivable - related party 2,935 4,050 21,785
------- ------- -------
Total current assets 43,586 32,181 43,296
------- ------- -------
Total Assets $43,586 $32,181 $43,296
======= ======= =======
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities
Taxes payable $ - $ - $ 2,223
------- ------- -------
Total current liabilities - - 2,223
------- ------- -------
Total Liabilities - - 2,223
------- ------- -------
Stockholders' Equity
Preferred stock, no par value;
5,000,000 shares authorized;
No shares issued & outstanding - - -
Common stock, no par value;
100,000,000 shares authorized;
8,000,000 (2008) and 9,500,000 (2009
& 2010) shares issued and outstanding 5,000 20,000 20,000
Additional paid in capital 12,000 18,000 19,500
Retained earnings (deficit) 26,586 (5,819) 1,573
------- ------- -------
Total Stockholders' Equity 43,586 32,181 41,073
------- ------- -------
Total Liabilities and Stockholders' Equity $43,586 $32,181 $43,296
======= ======= =======
The accompanying notes are an integral part of the financial statements.
F-2
PROMAP CORPORATION
STATEMENTS OF OPERATIONS
Three Months Three Months
Year Ended Year Ended Ended Ended
Dec 31, 2008 Dec 31, 2009 Mar 31, 2009 Mar 31, 2010
------------- ------------ ------------ ------------
(Unaudited) (Unaudited)
Sales (net of returns) - related party $ 135,662 $ 38,003 $ 3,493 $ 18,114
Cost of goods sold 14,167 7,436 7,035 1,000
---------- --------- ---------- ----------
Gross profit 121,495 30,567 (3,542) 17,114
---------- --------- ---------- ----------
Operating expenses:
General and administrative 117,278 63,311 114 7,504
---------- --------- ---------- ----------
117,278 63,311 114 7,504
---------- --------- ---------- ----------
Income (loss) from operations 4,217 (32,744) (3,656) 9,610
---------- --------- ---------- ----------
Other income (expense):
Interest income 358 89 80 5
Other income 1,104 250 - -
---------- --------- ---------- ----------
1,462 339 80 5
---------- --------- ---------- ----------
Income (loss) before provision for
income taxes 5,679 (32,405) (3,576) 9,615
Provision for income tax - - - 2,223
---------- --------- ---------- ----------
Net income (loss) $ 5,679 $ (32,405) $ (3,576) $ 7,392
========== ========= ========== ==========
Net income (loss) per share
(Basic and fully diluted) $ 0.00 $ (0.00) $ (0.00) $ 0.00
========== ========= ========== ==========
Weighted average number of
common shares outstanding 8,000,000 8,750,000 8,000,000 9,500,000
========== ========= ========== ==========
PRO FORMA:
Income Tax Expense $ 1,136 $ - $ -
========== ========= ==========
Net income (loss) per share
(after pro forma income tax)
(Basic and fully diluted) $ 0.00 $ (0.00) $ (0.00)
========== ========= ==========
The accompanying notes are an integral part of the financial statements.
F-3
PROMAP CORPORATION
STATEMENTS OF STOCKHOLDERS' EQUITY
Common Stock Stock-
Amount Paid in Retained holders'
Shares(1) No Par Capital Earnings Equity
--------- ------- ------- -------- --------
Balances at December 31, 2007 8,000,000 $ 5,000 $ 6,000 $ 40,907 $ 51,907
Distributions (20,000) (20,000)
Donated services - officers 6,000 6,000
Net income (loss) for the year 5,679 5,679
--------- ------- ------- -------- --------
Balances at December 31, 2008 8,000,000 $ 5,000 $12,000 $ 26,586 $ 43,586
Sales of common stock 1,500,000 15,000 15,000
Donated services - officers 6,000 6,000
Net income (loss) for the year (32,405) (32,405)
--------- ------- ------- -------- --------
Balances at December 31, 2009 9,500,000 $20,000 $18,000 $ (5,819) $ 32,181
Donated services - officers 1,500 1,500
Net income (loss) for the period 7,392 7,392
--------- ------- ------- -------- --------
Balances at March 31, 2010 -
unaudited 9,500,000 $20,000 $19,500 $ 1,573 $ 41,073
========= ======= ======= ======== ========
(1) As restated for a 40 for 1 forward stock split effective June 30, 2009
The accompanying notes are an integral part of the financial statements.
F-4
PROMAP CORPORATION
STATEMENTS OF CASH FLOWS
Three Months Three Months
Year Ended Year Ended Ended Ended
Dec 31, 2008 Dec 31, 2009 Mar 31, 2009 Mar 31, 2010
------------- ------------ ------------ ------------
(Unaudited) (Unaudited)
Cash Flows From Operating Activities:
Net income (loss) $ 5,679 $(32,405) $(35,576) $ 7,392
Adjustments to reconcile net loss to
net cash provided by (used for)
operating activities:
Donated services 6,000 6,000 1,500
Accounts receivable - related party 21,247 (1,115) (499) (17,735)
Accrued payables 2,223
Other assets
Write-offs 7,000
------- -------- -------- --------
Net cash provided by (used for)
operating activities 39,926 (27,520) (36,075) (6,620)
------- -------- -------- --------
Cash Flows From Investing Activities:
- - - -
------- -------- -------- --------
Net cash provided by (used for)
investing activities - - - -
------- -------- -------- --------
(Continued On Following Page)
The accompanying notes are an integral part of the financial statements.
F-5
PROMAP CORPORATION
STATEMENTS OF CASH FLOWS
(Continued From Previous Page)
Three Months Three Months
Year Ended Year Ended Ended Ended
Dec 31, 2008 Dec 31, 2009 Mar 31, 2009 Mar 31, 2010
------------- ------------ ------------ ------------
(Unaudited) (Unaudited)
Cash Flows From Financing Activities:
Sales of common stock 15,000
Paid in Capital 12,000 1,500
Distributions (20,000) (11,425) -
-------- -------- -------- --------
Net cash provided by (used for)
financing activities (20,000) 15,000 575 -
-------- -------- -------- --------
Net Increase (Decrease) In Cash 19,926 (12,520) (35,500) (6,620)
Cash At The Beginning Of The Period 20,725 40,651 40,651 28,131
------- -------- -------- --------
Cash At The End Of The Period $40,651 $ 28,131 $ 5,151 $ 21,511
======= ======== ======== ========
Schedule Of Non-Cash Investing And Financing Activities
None
Supplemental Disclosure
Cash paid for interest $ - $ - $ - $ -
Cash paid for income taxes $ - $ - $ - $ -
The accompanying notes are an integral part of the financial statements.
F-6
PROMAP CORPORATION
NOTES TO FINANCIAL STATEMENTS
December 31, 2008 and 2009 and March 31, 2010 (Unaudited)
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Promap Corporation (the "Company"), was incorporated in the State of Colorado
on November 12, 1989. The Company sells oil and gas maps to oil and gas
industry businesses.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Cash and cash equivalents
The Company considers all highly liquid investments with an original maturity
of three months or less as cash equivalents.
Accounts receivable
The Company reviews accounts receivable periodically for collectability and
establishes an allowance for doubtful accounts and records bad debt expense
when deemed necessary. At December 31, 2008 and 2009, and March 31, 2010 the
Company had no balance in its allowance for doubtful accounts. In 2008 the
Company wrote off a $7,000 receivable to a related party.
Property and equipment
Property and equipment are recorded at cost and depreciated under accelerated
or straight line methods over each item's estimated useful life.
Revenue recognition
Revenue is recognized on an accrual basis as earned under contract terms.
Specifically, revenue from product sales is recognized subsequent to a
customer ordering a product at an agreed upon price, delivery has occurred,
and collectability is reasonably assured.
Advertising costs
Advertising costs are expensed as incurred. The Company had no advertising
costs in 2008 or 2009, or for the three months ended March 31, 2010.
F-7
PROMAP CORPORATION
NOTES TO FINANCIAL STATEMENTS
December 31, 2008 and 2009 and March 31, 2010 (Unaudited)
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued):
Income tax
The Company accounts for income taxes pursuant to ASC 740. Under ASC 740
deferred taxes are provided on a liability method whereby deferred tax assets
are recognized for deductible temporary differences and operating loss
carryforwards and deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the differences between the
reported amounts of assets and liabilities and their tax bases. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the
deferred tax assets will not be realized. Deferred tax assets and liabilities
are adjusted for the effects of changes in tax laws and rates on the date of
enactment.
Because the Company through December 2009 has operated as an S-corporation,
the Company through end 2009 was a pass-through entity for federal income tax
purposes and paid no income tax at the corporate level.
Net income (loss) per share
The net income (loss) per share is computed by dividing the net income (loss)
by the weighted average number of shares of common outstanding. Warrants,
stock options, and common stock issuable upon the conversion of the Company's
preferred stock (if any), are not included in the computation if the effect
would be anti-dilutive and would increase the earnings or decrease loss per
share.
Financial Instruments
The carrying value of the Company's financial instruments, as reported in the
accompanying balance sheets, approximates fair value.
Long-Lived Assets
In accordance with ASC 350, the Company regularly reviews the carrying value
of intangible and other long-lived assets for the existence of facts or
circumstances, both internally and externally, that suggest impairment. If
impairment testing indicates a lack of recoverability, an impairment loss is
recognized by the Company if the carrying amount of a long-lived asset
exceeds its fair value.
F-8
PROMAP CORPORATION
NOTES TO FINANCIAL STATEMENTS
December 31, 2008 and 2009 and March 31, 2010 (Unaudited)
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued):
Products and services, geographic areas and major customers
The Company earns revenue from the sale of oil and gas maps, but does not
separate sales of different maps into operating segments. All sales each year
were to domestic companies under common control of the Company's officers.
NOTE 2. RELATED PARTY TRANSACTIONS
All Company sales of $135,662, $38,003 and $18,114 for 2008, 2009 and for the
three months ended March 31, 2010 were to companies related by common control
of the Company's officers. Creation and sales of maps to the related
companies are made on "as needed" basis, with prices dependent on the map
work and complexity involved.
The Company recorded donated services expense of $500 per month for office
space donated by an officer. The allocated monthly amount was determined by
estimating space usage, and management believes this method to be reasonable.
Total donated services expense for 2008, 2009 and for the three months ended
March 31, 2010 was $6,000, $6,000 and $1,500.
F-9
ANNEX A
Form of Common Stock Subscription Agreement
Promap Corporation
7060B S. Tucson Way
Centennial, CO 80112
Gentlemen:
This subscription agreement relates to the offer made by Promap
Corporation, a Colorado corporation (the "Company"), to sell between $40,000
(the "Minimum Offering") and $200,000 (the "Maximum Offering") in shares of
Company's common stock (the "Shares"), pursuant to the prospectus filed with
the SEC, and as same may be amended or supplemented from time to time (the
"Prospectus"). The undersigned has received a copy of the Prospectus and
wishes to purchase Shares on the terms, and subject to the conditions, set
forth below and in the Prospectus. The undersigned understands that pending
sale of the $40,000 minimum, all proceeds will be held in a non-interest
bearing escrow account by the Escrow Agent for this offering.
1. Subscription
1.1 The undersigned hereby irrevocably subscribes, in accordance
with the terms and conditions of this Subscription Agreement (the
"Agreement"), for the purchase of the number of Shares, at the price per
Share, set forth on the signature page to the Agreement. The undersigned
hereby delivers to the Company (i) an executed copy of this Agreement, and
(ii) personal, bank, cashier's check or wire transfer for the aggregate
purchase price, as reflected on the signature page to this Agreement (the
"Purchase Price") payable to "Corporate Stock Transfer, Inc., Escrow Agent,
for Promap Corporation, as Escrow Agent", as follows:
[Escrow Agent]
[Bank]
[ABA Routing No.]
[Account No.]
[Reference]
1.2 The Purchase Price and the executed Agreement will be held, for
the benefit of the undersigned until accepted by the Company. If the
Agreement is not accepted by _____ , 2010 (the "Termination Date"), then, the
Purchase Price will be promptly returned to the undersigned.
1.3 After a determination has been made by the Company to accept
this subscription, the payment will be retained in the Escrow Account until
such time as the $40,000 minimum has been reached, at which time the funds
will be released to the Company. If the minimum amount is not raised before
the Termination Date, the funds will be returned promptly to the undersigned.
2. Acceptance of Agreement. It is understood and agreed that the Company
shall have the right to accept or reject this Agreement, in whole or in part,
for any reason whatsoever. The shares will be offered at a price of $0.25 per
share for a period of one hundred and twenty (120) days from the date of the
Prospectus, subject to a ninety (90) day extension, for a potential total of
210 days.
A-1
3. Representations and Warranties of Subscriber. The undersigned hereby
represents and warrants to the Company that the undersigned has received the
Prospectus.
4. The type of ownership in which the undersigned is applying to purchase
Shares is as follows: (Check One)
_______ INDIVIDUAL OWNERSHIP (One signature required)
_______ JOINT TENANTS WITH RIGHT OF SURVIVORSHIP (Both parties must sign)
_______ TRUST (Please include name of trustee, date trust was formed and
a copy of the Trust Agreement or other authorization)
_______ CORPORATION (Please include Certified Corporate Resolution
authorizing signature)
_______ PARTNERSHIP (Please include a copy of the Statement of
Partnership or Partnership Agreement authorizing signature)
_______ COMMUNITY PROPERTY (Two signatures required)
_______ TENANTS-IN-COMMON (Both parties must sign)
5. Miscellaneous.
5.1 Survival. The representations and warranties made herein shall
survive the consummation of the transaction contemplated hereby.
5.2 Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Colorado,
without regard to principles of conflicts of laws.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
A-2
IN WITNESS WHEREOF, the undersigned has executed this Agreement this
_______ day of ______________________, 2010.
________________________________________
Name(s) of Subscriber(s)
Address
_____________________________
_____________________________
_____________________________
_____________________________
Social Security or Tax I.D. No.
_____________________________
Purchaser Representative (if any)
_____________________________
Name and Address
_____________________________
_____________________________
_____________________________
ACCEPTANCE
The foregoing subscription is hereby accepted and receipt of payment is
hereby acknowledged with respect to Shares.
Dated: ____________ Promap Corporation
By_____________________________
Authorized Officer
A-3
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Indemnification of Directors and Officers.
Pursuant to the Articles of Incorporation and By-Laws of the
corporation, we may indemnify an officer or director who is made a party to
any proceeding, including a law suit, because of his position, if he acted in
good faith and in a manner he reasonably believed to be in our best interest.
In certain cases, we may advance expenses incurred in defending any such
proceeding. To the extent that the officer or director is successful on the
merits in any such proceeding as to which such person is to be indemnified,
we must indemnify him against all expenses incurred, including attorney's
fees. With respect to a derivative action, indemnity may be made only for
expenses actually and reasonably incurred in defending the proceeding, and if
the officer or director is judged liable, only by a court order. The prior
discussion of indemnification in this paragraph is intended to be to the
fullest extent permitted by the laws of the State of Colorado.
Indemnification for liabilities arising under the Securities Act of
1933, as amended, may be permitted to directors or officers pursuant to the
foregoing provisions. However, we are informed that, in the opinion of the
Commission, such indemnification is against public policy, as expressed in
the Act and is, therefore, unenforceable.
Item 13. Other Expenses of Issuance and Distribution.
Expenses incurred or (expected) relating to this Registration Statement
and distribution are as follows:
Legal fees and costs $ 20,000
Accounting 7,500
Registration fees 100
Printing of Prospectus 1,000
Escrow Agent 1,000
Miscellaneous 400
--------
TOTAL $ 30,000
========
Item 15. Recent Sales of Unregistered Securities.
Set forth below is information regarding the issuance and sales of
securities without registration since inception. No such sales involved the
use of an underwriter; no advertising or public solicitation were involved;
the securities bear a restrictive legend; and no commissions were paid in
connection with the sale of any securities.
On November 12, 1987, we issued 100,000 shares of our no par value
common stock to Steven A. Tedesco for $5,000 in cash. On September 19, 1990
we completed a two-for-one forward stock split and increased the shares owned
by Mr. Tedesco to 200,000, and on June 30, 2009 we completed a forty-for-one
stock split and increased the number of shares owned by Mr. Tedesco to a
total of 8,000,000.
II-1
On July 24, 2009, we issued common shares at $0.01 per share for cash to
the following persons and entities:
Name Number of Shares Consideration
Steven Tedesco 225,000 $ 2,250 in cash
Christine Tedesco 200,000 $ 2,000 in cash
Joseph O'Farrell 50,000 $ 500 in cash
Steven Quoy 200,000 $ 2,000 in cash
Lynne Quoy 200,000 $ 2,000 in cash
Underwood Family Partners 400,000 $ 4,000 in cash
David Bramhill 100,000 $ 1,000 in cash
Michael Thomsen 75,000 $ 750 in cash
David Lavigne 25,000 $ 250 in cash
Robert Carington 25,000 $ 250 in cash
--------- -------
Total 1,500,000 $15,000 in cash
In all of the transactions shown above, the issuance, delivery and sale
of our common stock were made pursuant to the private offering exemption
within the meaning of Section 4(2) of the Act because the offers were made to
a limited number of accredited investors, all of whom received all material
information concerning the investment and all of whom have had sophistication
and ability to bear economic risk based upon their representations to us and
their prior experience in such investments.
In all of the transactions shown above, we have issued stop transfer
orders concerning the transfer of certificates representing all the common
stock issued and outstanding as reported in this section.
There have been no further issuances of securities through the date of
this Registration Statement.
Item 16. Exhibits and Financial Statement Schedules.
The following exhibits are filed as part of this Registration Statement:
Exhibit
Number Description
3.1 Articles of Incorporation *
3.2 Articles of Amendment *
3.3 Amended and Restated Articles of Incorporation *
3.4 Bylaws *
5.1 Opinion re: Legality *
9.0 Form of Escrow Agreement *
23.1 Consent of Independent Auditors *
23.2 Consent of Counsel (See Exhibit 5.1) *
23.3 Consent of Independent Auditors (filed herewith electronically)
________________________
* Previously filed.
II-2
Item 17. Undertakings
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement to:
(a) Include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(b) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information
set forth in this registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was registered) and
any deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum offering price set
forth in the "Calculation of Registration Fee" table in the effective
registration statement; and
(c) Include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in the registration statement.
2. For determining liability under the Securities Act, treat each such
post-effective amendment as a new registration statement of the securities
offered, and the offering of such securities at that time to be the initial
bona fide offering.
3. File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
4. For determining liability of the undersigned registrant under the
Securities Act 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 the 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
II-3
(iv) Any other communication that is an offer in the offering made
by the undersigned registrant to the purchaser.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to our directors, officers and controlling persons
pursuant to the provisions above, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act, and is, therefore,
unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by us of expenses incurred or paid by one of our
directors, officers, or controlling persons in the successful defense of any
action, suit or proceeding) is asserted by one of our directors, officers, or
controlling persons in connection with the securities being registered, we
will, unless in the opinion of our counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification is against public policy as expressed
in the Securities Act, and we will be governed by the final adjudication of
such issue.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Amendment No. 2 to the registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in
the City Denver, State of Colorado, on June 2, 2010.
Promap Corporation
By: /s/ Steven A. Tedesco
Steven A. Tedesco, President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 2 to the registration statement has been signed by the
following persons in the capacities and on the dates indicated.
Date: June 2, 2010 By: /s/ Steven A. Tedesco
Steven A. Tedesco, President, Chief
Executive Officer and Director
(Principal Executive Officer)
Date: June 2, 2010 By: /s/ Robert W. Carington, Jr.
Robert W. Carington, Jr.
Chief Financial Officer (Principal
Financial Officer and Principal
Accounting Officer)
Date: June 2, 2010 By: /s/ David Bramhill
David Bramhill
Director
II-5
