Attached files
As filed with the Securities and Exchange Commission on ______, 2011.
Commission File No. 333-171658
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
Amendment No. 3
Registration Statement Under
THE SECURITIES ACT OF 1933
COLORADO CERAMIC TILE, INC.
(Exact name of registrant as specified in charter)
Colorado 3281 84-1307164
--------------------------- ------------------------- --------------------
(State or other jurisdiction (Primary Standard Classi- (IRS Employer
of incorporation) fication Code Number) I.D. Number)
4151 E. County Line Rd.
Centennial, CO 80122
(303) 721-9198
-------------------------------------------------------------
(Address and telephone number of principal executive offices)
4151 E. County Line Rd.
Centennial, CO 80122
(303) 721-9198
---------------------------------------------------
(Address of principal place of business or intended
principal place of business)
Sandie Venezia
4151 E. County Line Rd.
Centennial, CO 80122
(303) 721-9198
---------------------------------------------------------
(Name, address and telephone number of agent for service)
Copies of all communications, including all communications sent
to the agent for service, should be sent to:
William T. Hart, Esq.
Hart & Trinen, LLP
1624 Washington Street
Denver, Colorado 80203
303-839-0061
As soon as practicable after the effective date of this Registration Statement
------------------------------------------------------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box: [x]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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 12b2 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
===============================================================================
Title of each Proposed Proposed
Class of Maximum Maximum
Securities Securities Offering Aggregate Amount of
to be to be Price Per Offering Registration
Registered Registered Share (1) Price Fee
---------- ---------- ----------- ------------- ------------
Common Stock (2) 4,125,000 $0.02 $82,500 $9.58
(1) Offering price computed in accordance with Rule 457(a).
(2) Shares of common stock offered by selling shareholders.
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 l933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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PROSPECTUS
COLORADO CERAMIC TILE, INC.
Common Stock
By means of this prospectus a number of our shareholders are offering to
sell up to 4,125,000 shares of our common stock at a price of $0.02 per share.
If and when our common stock becomes quoted on the OTC Bulletin Board, the
shares owned by selling shareholders may be sold in the over-the-counter market,
or otherwise, at prices and terms then prevailing or at prices related to the
then current market price, or in negotiated transactions.
We will not receive any proceeds from the sale of the common stock by the
selling stockholders. We will pay for the expenses of this offering which are
estimated to be $36,500.
There is no public market for our common stock.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
THESE SECURITIES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK. FOR A
DESCRIPTION OF CERTAIN IMPORTANT FACTORS THAT SHOULD BE CONSIDERED BY
PROSPECTIVE INVESTORS, SEE "RISK FACTORS" BEGINNING ON PAGE 8 OF THIS
PROSPECTUS.
The date of this prospectus is ___________, 2011.
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PROSPECTUS SUMMARY
Colorado Ceramic Tile, Inc. was incorporated in Colorado in March 1995. We
sell tile, marble and stone for residential and commercial projects.
Our offices and showroom are located at 4151 E. County Line Rd.,
Centennial, CO 80122. Our telephone number is (303) 721-9198 and our fax number
is (303) 721-9572. We lease our 3,600 square foot showroom and 2,700 square foot
warehouse on a month-to-month basis for $4,500 per month.
As of the date of this prospectus we had one showroom. We plan on opening
new showrooms in in the Colorado cities of Fort Collins, Boulder, Castle Rock,
Parker and Colorado Springs. We also plan on expanding our product line to
include sinks, bath tubs, and other kitchen and bath appliances. We estimate
that the cost of opening, stocking and operating each new showroom for one year
will be approximately $150,000 (approximately $750,000 for all five showrooms).
If sufficient capital is abailable we expect that we will be able to open a new
showroom once every twelve months. Since the expansion of our business will
depend on our ability to raise additional capital, we cannot predict if or when
we will be able to open any new showrooms or expand our product line. See the
"Business" section of this prospectus for more information.
The Offering
Between June 2010 and December 2010, we sold 4,125,000 shares of common
stock to a group of private investors. The shares were sold at a price of $0.02
per share.
By means of this prospectus, the investors who purchased our common stock
in 2010 are offering to sell their shares. See the section of this prospectus
entitled "Selling Shareholders" for more information. Since any shares purchased
from the selling shareholders will be free trading, the existence of free
trading shares will permit an application to be filed for the quotation of our
common stock on the OTC Bulletin Board. Although as of the date of this
prospectus, no application had been made to have our common stock quoted on the
OTC Bulletin Board, and although we cannot guarantee that our common stock will
be quoted on the OTC Bulletin Board, we believe that, after the normal review
process, our common stock will be quoted on the OTC Bulletin Board. Once our
common stock is quoted, we believe it will be easier to raise capital since most
investors prefer to invest in companies that have a public market.
The purchase of the securities offered by this prospectus involves a high
degree of risk. Risk factors include the lack of any relevant operating history,
losses since we were incorporated, the possible need for us to sell shares of
our common stock to raise capital and our auditors, in their report on our June
30, 2010 financial statements, expressed substantial doubt as to our ability to
continue in business. See the "Risk Factors" section of this prospectus below
for additional Risk Factors.
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Forward-Looking Statements
This prospectus contains or incorporates by reference forward-looking
statements, concerning our financial condition, results of operations and
business. These statements include, among others:
o statements concerning the benefits that we expect will result from
the business activities that we contemplate; and
o statements of our expectations, beliefs, future plans and strategies,
anticipated developments and other matters that are not historical
facts.
You can find many of these statements by looking for words such as
"believes", "expects", "anticipates", "estimates" or similar expressions used in
this prospectus.
These forward-looking statements are subject to numerous assumptions, risks
and uncertainties that may cause our actual results to be materially different
from any future results expressed or implied in those statements. Because the
statements are subject to risks and uncertainties, actual results may differ
materially from those expressed or implied. We caution you not to put undue
reliance on these statements, which speak only as of the date of this
prospectus.
To the extent, the information contained in this prospectus, changes in any
material respect, we will amend this prospectus.
RISK FACTORS
This section of the prospectus discloses all material risks known to us .
We do not make, nor have we authorized any other person to make, any
representation about the future market value of our common stock. In addition to
the other information contained in this prospectus, the following factors should
be considered carefully in evaluating an investment in our securities. If any of
the risks discussed below materialize, our common stock could decline in value
or become worthless.
THE POSSIBILITY THAT WE MAY NEVER BE PROFITABLE MAY NEGATIVELY IMPACT THE VALUE
OF OUR COMMON STOCK. For the year ended June 30, 2010, and the six months ended
December 31, 2010, we suffered losses of $(68,718) and $(92,603) respectively.
Unless and until we are profitable, we will need to raise enough capital to be
able to fund the costs of our operations. As a result there can be no assurance
that we can implement our business plan, that we will be profitable, or that the
securities which may be sold in this offering will have any value.
OUR FAILURE TO OBTAIN CAPITAL MAY SIGNIFICANTLY RESTRICT OUR PROPOSED OPERATIONS
AND HAVE A NEGATIVE IMPACT ON OUR BUSINESS. We need additional capital to fund
our operating losses and to expand our business. We do not know what the terms
of any future capital raising may be but any future sale of our equity
securities would dilute the ownership of existing stockholders and could be at
prices substantially below the price investors paid for the shares of common
stock sold in this offering. Our failure to obtain the capital, which we require
will result in the slower implementation of our business plan or our inability
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to implement our business plan. There can be no assurance that we will be able
to obtain the capital which we will need. If we are unable to implement our
business plan as a result of a failure to obtain capital the common stock, which
may be sold in this offering may not have any value.
THE SALE OF COMMON STOCK BY OUR EXISTING SHAREHOLDERS MAY HINDER OUR ABILITY TO
RAISE CAPITAL. As of the date of this prospectus we had 8,125,000 outstanding
shares of common stock. By means of this prospectus, up to 4,125,000 of these
shares may be sold at any time and without restriction. Should a public market
for our common stock ever develop, the sale of these shares in the public
market, or the perception that these shares could be sold, could depress the
price of our common stock with the result that our ability to raise capital may
be more difficult and the cost of any capital would be higher.
THE FACT THAT OUR AUDITORS HAVE EXPRESSED DOUBT AS TO OUR ABILITY TO CONTINUE IN
BUSINESS MAY IMPAIR OUR ABILITY TO OBTAIN CAPITAL. In their report on our June
30, 2010 financial statements, our auditors expressed substantial doubt as to
our ability to continue as a going concern. This qualification could impair our
ability to finance operations through the sale of debt or equity securities. Our
ability to continue as a going concern will depend, in large part, on our
ability to obtain additional financing and generate positive cash flow from
operations, neither of which is certain. If we are unable to achieve these
goals, our business would be jeopardized and we may not be able to continue
operations. If we are unable to continue operations the common stock sold in
this offering may not have any value
THE INDUSTRY IN WHICH WE COMPETE IS HIGHLY CYCLICAL AND THE RECENT DOWNTURN IN
RESIDENTIAL AND COMMERCIAL CONSTRUCTION AND HOME IMPROVEMENT COULD HAVE A
MATERIALLY ADVERSE IMPACT ON OUR FINANCIAL RESULTS WHICH WOULD INCREASE OUR NEED
FOR CAPITAL. The building products distribution industry is subject to cyclical
market pressures caused by a number of factors that are beyond our control, such
as general economic and political conditions, levels of new construction, home
and office improvement and remodeling activity, interest rates, weather and
population growth. We are most impacted by changes in the demand for new homes
and commercial real estate as well as renovations and in general economic
conditions that impact the level of home and office improvements. Changes in
market demand for new homes and commercial real estate as well as for home and
office improvements occur periodically and vary in severity. Because of subprime
mortgage crisis and current recession there is severe downturn in the
construction industry. There is no assurance that our industry will recover in
the near future. As a result we may never be profitable and may need to cease
operations in which case our common stock may be worthless.
To the extent that cyclical market factors adversely impact overall demand
for building products or the prices that we can charge for our products, our net
sales and margins will likely decline. In addition, the unpredictable nature of
the market factors that impact our industry make it difficult to forecast our
operating results.
THE BUILDING PRODUCTS DISTRIBUTION INDUSTRY IS FRAGMENTED AND COMPETITIVE AND WE
MAY NOT BE ABLE TO COMPETE SUCCESSFULLY WITH OUR EXISTING COMPETITORS OR NEW
ENTRANTS INTO THE MARKETS WE SERVE AND AS A RESULT WE MAY NEED TO CEASE
OPERATIONS. The building products distribution industry is fragmented and
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competitive. Our competition varies by product line, customer classification and
geographic market. The principal competitive factors in our industry are pricing
and availability of product, service and delivery capabilities, ability to
assist with problem-solving, customer relationships and breadth of product
offerings. We compete with many local, regional and national building materials
distributors and dealers. In addition, some product manufacturers sell and
distribute their products directly to our customers, and the volume of direct
sales could increase in the future. Additionally, manufacturers of products
similar to those distributed by us may elect to sell and distribute to our
customers in the future or enter into exclusive supplier arrangements with other
distributors. Many of our competitors have greater financial resources and may
be able to withstand sales or price decreases more effectively than we can. We
also expect to continue to face competition from new market entrants. We may be
unable to continue to compete effectively with these existing or new
competitors, which could have a material adverse effect on our financial
condition results of operations and the value of our common stock.
OUR OPERATIONS ARE DEPENDENT UPON THE CONTINUED SERVICES OF OUR OFFICERS. The
loss of any of these officers, whether as a result of death, disability or
otherwise, may have a material adverse effect upon our business. Any material
adverse effect upon our business that would result form the loss of our officers
would negatively impact the value of our common stock.
OUR TWO OFFICERS AND DIRECTORS OWN APPROXIMATELY 50% OF OUR OUTSTANDING SHARES
AND WILL BE ABLE TO CONTROL ALL ASPECTS OF OUR OPERATIONS. As a result,
investors in this offering will not have the ability to elect any of our
directors or to adopt any resolution at any meeting of our shareholders. Refer
to the "Principal Shareholders" section of this prospectus for more information
AS OF THE DATE OF THIS PROSPECTUS THERE WAS NO PUBLIC MARKET FOR OUR COMMON
STOCK. AS A RESULT, PURCHASERS OF THE SECURITIES OFFERED BY THIS PROSPECTUS MAY
BE UNABLE TO SELL THEIR SECURITIES OR RECOVER ANY AMOUNTS WHICH THEY PAID FOR
THEIR SECURITIES.
DISCLOSURE REQUIREMENTS PERTAINING TO PENNY STOCKS MAY REDUCE THE LEVEL OF
TRADING ACTIVITY IN OUR SECURITIES AND INVESTORS MAY FIND IT DIFFICULT TO SELL
THEIR SHARES OR WARRANTS. Trades of our common stock, if a public market ever
develops, will be subject to Rule 15g-9 of the Securities and Exchange
Commission, which rule imposes certain requirements on broker/dealers who sell
securities subject to the rule to persons other than established customers and
accredited investors. For transactions covered by the rule, brokers/dealers must
make a special suitability determination for purchasers of the securities and
receive the purchaser's written agreement to the transaction prior to sale. The
Securities and Exchange Commission also has rules that regulate broker/dealer
practices in connection with transactions in "penny stocks". Penny stocks
generally are 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 that security is provided by the exchange or system). The
penny stock rules require a broker/ dealer, prior to a transaction in a penny
stock not otherwise exempt from the rules, to deliver a standardized risk
disclosure document prepared by the Commission that provides information about
penny stocks and the nature and level of risks in the penny stock market. The
broker/dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker/dealer and its
salesperson in the transaction, and monthly account statements showing the
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market value of each penny stock held in the customer's account. The bid and
offer quotations, and the broker/dealer and salesperson compensation
information, must be given to the customer orally or in writing prior to
effecting the transaction and must be given to the customer in writing before or
with the customer's confirmation.
OUR BOARD OF DIRECTORS MAY, WITHOUT SHAREHOLDER APPROVAL, ISSUE UP TO 10,000,000
SHARES OF PREFERRED STOCK WITH MULTIPLE VOTES PER SHARE AND DIVIDEND RIGHTS
WHICH WOULD HAVE PRIORITY OVER ANY DIVIDENDS PAID WITH RESPECT TO THE HOLDERS OF
OUR COMMON STOCK. The issuance of preferred stock with these rights may make the
removal of management difficult even if the removal would be considered
beneficial to shareholders generally, and will have the effect of limiting
shareholder participation in certain transactions such as mergers or tender
offers if these transactions are not favored by our management.
MARKET FOR OUR COMMON STOCK
As of the date of this prospectus, there was no public trading market for
our common stock.
As of February 28, 2011 we had 8,125,000 outstanding shares of common stock
and 36 shareholders.
As of the date of this prospectus we did not have any outstanding options
or warrants or any outstanding securities convertible into shares of our common
stock.
By means of this prospectus 4,125,000 shares of our common stock have been
registered under the Securities Act of 1933 for resale to the public. Ninety
days after the date of this prospectus, the remaining 4,000,000 shares of our
common stock can be sold pursuant to Rule 144.
We are not offering any shares by means of this prospectus.
Holders of our common stock are entitled to receive dividends as may be
declared by the Board of Directors. Our Board of Directors is not restricted
from paying any dividends but is not obligated to declare a dividend. No
dividends have ever been declared and it is not anticipated that dividends will
ever be paid.
MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION
We were incorporated in Colorado on March 27, 1995.
The following discussion analyzes our financial condition and summarizes
the results of operations for the year ended June 30, 2010 and the six months
ended December 31, 2010. This discussion and analysis should be read in
conjunction with our financial statements included as part of this prospectus.
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Results of Operations
Material changes of items in our Statement of Operations for the year ended
June 30, 2010 as compared to the same period in the prior year are discussed
below:
Increase (I)
Item or Decrease (D) Reason
---- --------------- ------
Sales D Downturn in residential and
commercial construction due to
recession.
Depreciation D Some of our vehicles and equipment
are fully depreciated.
Loss on disposal D One-time write off of some
leasehold.
Receivable write offs D One-time write off of old
receivables in fiscal 2009.
Inventory write-offs D One-time write off in fiscal 2009
of a large amount of slow moving
inventory.
General and
administrative expenses D Reduction in salaries and wages
due to downturn in construction
activity.
Material changes of items in our Statement of Operations for the six months
ended December 31, 2010 as compared to the same period in the prior year are
discussed below:
Increase (I)
Item or Decrease (D) Reason
---- --------------- ------
Sales D Downturn in residential and
commercial construction due to
recession.
General and
administrative expenses D Reduction in salaries and wages
due to downturn in construction
activity.
The factors that will most significantly affect our results of operations
will be:
i)the prices of tile, marble and stone; and
ii)the condition of the residential and commercial construction markets.
Other than the foregoing, we do not know of any trends, events or
uncertainties that will have, or are reasonably expected to have, a material
impact on our sales, revenues, expenses or results of operations.
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Liquidity and Capital Resources
Our sources and (uses) of funds for the years ended June 30, 2010 and 2009
and the six months ended December 31, 2010 are shown below:
Six Months
Year Ended June 30, Ended December 31,
---------------------- ------------------------
2009 2010 2009 2010
---- ---- ---- ----
Cash provided by (used in)
operations $(52,905) $ 21,338 $ 25,020 $ (19,935)
Loans 89,400 21,000 12,200 11,300
Repayment of loans (67,804) (42,911) (27,814) (15,303)
Bank overdrafts 3,756 573 (3,756) (4,329)
Sale of common stock -- -- -- 82,500
Cash on hand at beginning
of period 27,533
As explained in the "Business" section of this prospectus, we plan to open
new showrooms in select cities in Colorado and expand our product line.
Our anticipated cash requirements over the twelve month period ending March
31, 2012 are as follows:
Operations $ 40,000 (1)
Loan payments 36,000 (2)
Opening one new showroom 150,000 (3)
---------
$226,000
=========
(1) During the six months ended December 31, 2011 our operations were using
cash at the rate of approximately $3,300 per month.
(2) As of December 31, 2010 the current portion of our notes payable was
$216,124. However, since a substantial portion of our notes payable are
owed to current or former shareholders, who we do not expect will call for
payment prior to March 31, 2012, we expect that our loan payments, which
include payments on our line of credit and our car loans, will be
approximately $36,000 during the twelve month period ending March 31, 2012.
(3) Our plans to open a new showroom will depend on our ability to raise
additional capital. If sufficient capital is available, we expect that we
will be able to open a new showroom once every twelve months.
It is expected that our principal source of cash flow will be from the sale
of tile, marble and stone. Cash flow from the sale of tile, marble and stone
depends upon the cost of supplies, the sale price and the amount of sales we are
able to generate. An increase in sales may permit us to finance our operations
to a greater extent with internally generated funds and may allow us to obtain
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equity financing more easily or on better terms. However, until we generate a
profit, we will need to raise the capital we require through the sale of our
securities or from loans from third parties.
We do not have any commitments or arrangements from any person to provide
us with any additional capital. If additional financing is not available when
needed, we may need to cease operations. We may not be successful in raising the
capital needed.
The following table lists our debt obligations and the material terms of
each obligation as of December 31, 2010.
Principal Interest Secured(s)
Creditor Amount Rate Maturity Unsecured(u)
-------- ------ ------------- -------- ------------
David Crosby $59,000 0 On Demand (s)
David Crosby $7,059 0 On Demand (u)
Mark Rodenbeck $44,515 0 On Demand (u)
Mark Rodenbeck $25,000 0 On Demand (u)
Sal and Sandie
Venezia $19,163 0 On Demand (u)
Line of Credit (1) $48,286 5.65%(2) Revolving (s)
Auto Loans $24,124 6.5-9.3% 11/12-12/13 (s)
(1) We are authorized to borrow up to $50,000 under this line.
(2) Interest rate as of January 31, 2011.
As of December 31, 2010 our days sales outstanding ratio, (i.e. receivable
turnover ratio) calculated by dividing accounts receivable by sales and then
multiplying that quotient by the number of days in the six month period, was
approximately 8 days.
Our inventory turnover ratio for the six months ended December 31, 2010,
calculated by dividing cost of sales for the six month period by our average
inventory balances as of June 30, Spetember 30, and December 31, 2010 was,
approximately 19.
Other than as disclosed above, we do not know of any
o trends, demands, commitments, events or uncertainties that will
result in, or that are reasonably likely to result in, any material
increase or decrease in our liquidity; or
o significant changes in our expected sources and uses of cash.
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Contractual Obligations
Our material future contractual obligations as of June 30, 2010 are as
follows:
Amounts due during years ending June 30,
----------------------------------------
Item Total 2011 2012 2013 2014 Thereafter
---- ----- ---- ---- ---- ---- ----------
Notes Payable $231,150 $213,127 $12,805 $5,218 -- --
Accounting Policies
See Note 1 to the financial statements included as part of this prospectus
for a description of our critical accounting policies and the potential impact
of the adoption of any new accounting pronouncements.
BUSINESS
General
We were incorporated on March 27, 1995 in Colorado. We sell a variety of
hard surfacing products, including ceramic and porcelain tile, natural stone,
glass, metal accents, hardwood flooring, rubber and leather flooring, engineered
counter surfaces, as well as custom shower doors.
Our products can be used in numerous applications including:
o Flooring
o Wall Coverings
o Kitchens
o Decks and Patios
o Bath and Shower Enclosures
o Swimming Pool and Spas
We also offer installation services through experienced independent
contractors.
During the year ended June 30, 2010 approximately 36% of our revenue was
derived from installation services and 64% of our revenue was derived from sales
of our products. During the year ended June 30, 2009 approximately 31% of our
revenue was derived from these services and 69% of our revenue was derived from
sales of our products.
Our offices and showroom are located in Centennial, Colorado, which is a
suburb of Denver. We lease our space on a month-to-month basis for $4,500 per
month. Our offices consist of a 3,600 square foot showroom and a 2,700 square
foot warehouse.
As of February 28, 2011, we had two full time employees and three part time
employees.
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Products
The following is a description of our principal products:
Ceramic Tile. Long wearing, ceramic tile will not fade or discolor. The
varied colors, textures, and designs of ceramic provide numerous design options,
and the durable glaze prevents staining and scratching
Porcelain Tile. Porcelain tile is extremely durable, wear resistant, stain
resistant and frost-proof. Porcelain has numerous uses for both interior and
exterior applications, including floors, walls, counters, steam rooms, and
fireplace surrounds.
Marble. Suggesting grace, diversity, and endurance, marble is one of the
most basic building materials. Tumbled marble adds a warm contrast to granite
counters. Behind a stove it protects the wall from heat damage, and on vanity
tops it provides a low maintenance, beautiful compliment to bathroom tile and
cabinetry.
Granite. A granite slab is the height of elegance and functionality for
kitchen counter tops. Granite also makes a bold statement in bathrooms and
showers.
Travertine/Limestone. Travertine and limestone's subtlety are perfect for
installations where the objective is to avoid over ornamentation and provide a
warm and inviting space. Travertine/limestone is beautiful on floors, counters,
tabletops, benches, stairs, archways, columns, mosaics, and border designs.
Slate. A natural stone that conveys feelings from starkly modern to rustic
casual, slate has many applications including floors, walls, entryways,
fireplaces, backsplashes and is used in a variety of exterior projects.
Terracotta. Terracotta presents a comfortable, warm, and even rustic
interior, conveying simplicity and beauty.
Glass. The handcrafted feel of glass gives an illusion of depth and
openness. Applications include decorative accents or field tile for
backsplashes, walls, and fireplaces.
Metals. Metals bring a rich glow to any room, particularly in kitchens
where many appliances and fixtures incorporate stainless steel, copper, bronze,
or brass. Metals coordinate easily with a variety of porcelain, ceramic, and
natural stone tiles.
Shower Doors. Our custom shower doors include 3/8" frameless euro doors,
custom framed and semi-frameless doors, and custom back painted glass.
We are distributors for both large and small manufactures including:
American Olean, Arizona Tile, Azuvi, Bedrosians, Capco, Cosa Marble, Crossville,
Dal, Design Materials, Emser, Florida Tile, Interceramic, Jeffrey Court, Mohawk,
Porcelanosa, Puccini, Source, Stonepeak, and Vita Nova.
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All of the products we sell are available from a number of suppliers. We
have not generally experienced difficulty in obtaining products and we believe
that alternative sources are readily available. During the year ended June 30,
2010 and the three months ended September 30, 2010 no single supplier accounted
for more than 7% of our inventory purchases.
Customers and Marketing
Our customers consist of large and small contractors, architects, design
professionals, builders, and developers. We also sell to the do-it-yourself and
buy-it-yourself market.
We sell and market our products and services from our showroom in
Centennial, Colorado. We also advertise in local print media.
We do not rely on any one customer or group of customers for a material
amount of our net sales. The largest customer for our fiscal year ended Jun 30,
2010 accounted for less than 5% of our sales.
Historically, our operations have experienced certain seasonal patterns.
Generally, our sales are highest in the second and third quarters and lowest in
the first quarter of each calendar year due primarily to slow down of
construction activity in the winter months.
Competition
The hard surfacing products industry in the United States is highly
fragmented at both the manufacturing and distribution levels. Competition in our
industry is based on design, price, customer service and quality. Our products
compete with numerous other wall and floor coverings for residential and
commercial uses, including carpet, resilient flooring, paint, wallpaper,
laminates and wood paneling. Although the cost of tile, marble and other hard
surface products is higher than the cost of carpet, wood flooring and some wall
coverings, it is generally believed that tile, marble and other hard surface
products have a lower cost over their useful lives, primarily due to durability.
We believe we have a niche market between low priced box stores (which are
low on selection and customer service) and high end designer stores. We also
believe that "one-stop shopping," which requires a full product line at our
showroom, is an important competitive advantage in servicing our core customers.
Future Operations
At the present time we have one showroom. We plan on opening new showrooms
over the next five years in the Colorado cities of Fort Collins, Boulder, Castle
Rock, Parker and Colorado Springs. Opening a new showroom involves purchasing or
leasing a commercial retail space, hiring additional sales and management staff
and purchasing additional supplies. Opening new showrooms may also require us to
lease additional storage space. We also plan on expanding our product line to
include sinks, bath tubs, toilets, and other kitchen and bath appliances.
14
We estimate that the cost of opening, stocking and operating a new showroom
for one year will be approximately $150,000. If sufficient capital is available,
we will be able to open a new showroom once every twelve months. We do not have
any commitments, arrangements, understandings or agreements with respect to
opening any new showrooms. Our ability to open new showrooms will depend on our
ability to raise additional capital. Since we do not have any commitmentsfrom
any person to provide us with any additional capital, we cannot predict when we
will be able to open any new showrooms or expand our product line.
MANAGEMENT
Name Age Position
---- --- --------
Sandie Venezia 62 President, Principal Executive, Financial and
Accounting Officer and a Director
Mark Rodenbeck 61 Vice President and a Director
Directors serve for one-year terms and are elected annually by our
stockholders. Our executive officers are appointed by and serve at the pleasure
of the board of directors.
The principal occupations of our two officers and directors during the past
several years are as follows:
Sandie Venezia has been our President, Principal Executive and Financial Officer
and a director since December 2006. Between March 1995 and December 2006 Ms.
Venezia was employed by us in the areas of accounting, finance, sales and
design.
Mark Rodenbeck has been our Vice President and a director since December 2006.
Between Mark 1995 and December 2006 Mr. Rodenbeck was employed by us in the
areas of personnel, job estimation and inventory control.
We believe that Ms. Venezia and Mr. Rodenbeck are qualified to serve as
directors due to their long standing relationship with us.
Our two directors are not independent as that term is defined in section
803 of the listing standards of the NYSE AMEX. None of our directors qualify as
a financial expert as that term is defined by the Securities and Exchange
Commission. We do not believe a financial expert is necessary since our revenues
for the year ended June 30, 2010 were less than $1,100,000.
We have not adopted a Code of Ethics applicable to our principal executive,
financial, and accounting officers and persons performing similar functions. We
do not believe a Code of Ethics is needed at this time since we have only two
officers.
We do not have a compensation committee. Our two directors serve as our
audit committee.
15
Executive Compensation
The following table shows in summary form the compensation received by our
two officers during the two years ended June 30, 2010.
All
Other
Annual
Restric- Com-
Name and ted Stock Option pensa-
Principal Fiscal Salary Bonus Awards Awards tion
Position Year (1) (2) (3) (4) (5) Total
------------ ------ ------ ----- --------- ------ --------- -----
Sandie Venezia 2010 $70,500 -- -- -- -- $70,500
President, Principal
Executive, 2009 $70,500 -- -- -- -- $70,500
Financial and
Accounting Officer
Mark Rodenbeck 2010 $35,250 -- -- -- -- $35,250
Vice President 2009 $35,250 -- -- -- -- $35,250
(1) The dollar value of base salary (cash and non-cash) earned.
(2) The dollar value of bonus (cash and non-cash) earned.
(3) The value of the shares of restricted stock issued as compensation for
services computed in accordance with ASC 718 on the date of grant.
(4) The value of all stock options computed in accordance with ASC 718 on the
date of grant.
(5) All other compensation received that could not be properly reported in any
other column of the table.
We do not have employment agreements with any of our officers.
The following shows the amounts we expect to pay to our two officers during
the twelve months ending September 30, 2011 and the amount of time these persons
expect to devote to us.
Projected Percent of Time to be Devoted
Name Compensation to the Company's Business
---- ------------ -----------------------------
Sandie Venezia $112,800 100%
Mark Rodenbeck $ 56,400 100%
LONG-TERM INCENTIVE PLANS. We do not provide our two officers or employees with
pension, stock appreciation rights, long-term incentive or other plans.
16
EMPLOYEE PENSION, PROFIT SHARING OR OTHER RETIREMENT PLANS. We do not have a
defined benefit, pension plan, profit sharing or other retirement plan, although
we may adopt one or more of such plans in the future.
COMPENSATION OF DIRECTORS DURING YEAR ENDED JUNE 30, 2010. We do not compensate
our two directors for acting as such.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. Our two directors
act as our compensation committee. During the year ended June 30, 2010 each
director participated in deliberations concerning executive officer
compensation. During the year ended June 30, 2010, none of our officers were
also a member of the compensation committee or a director of another entity,
which other entity had one of its executive officers serving as one of our
directors.
Related Party Transactions
In 1995 Mark Rodenbeck loaned us $35,000. The loan does not bear interest,
is unsecured, and is due on demand. As of September 30, 2010 the balance on this
loan was $34,515.
In 2009 Mark Rodenbeck loaned us $25,000. The loan does not bear interest,
is unsecured, and is due on demand. As of September 30, 2010 the balance on this
loan was $25,000.
In 1995 Sal Venezia, the husband of Sandie Venezia, loaned us $35,000. This
loan does not bear interest, is unsecured, and is due on demand. The balance on
this loan at September 30, 2010 was $24,123.
PRINCIPAL SHAREHOLDERS
The following table shows, as of December 31, 2010, information with
respect to those persons owning beneficially 5% or more of our common stock and
the number and percentage of outstanding shares owned by each of our officers
and directors, and by all the officers and directors as a group. Unless
otherwise indicated, each owner has sole voting and investment powers over his
shares of common stock.
Number Percent
Name of Shares of Class
---- --------- --------
Sandie Venezia 2,000,000 25%
Mark Rodenbeck 2,000,000 25%
All officers and directors
as a group (2 persons) 4,000,000 50%
17
SELLING SHAREHOLDERS
Between June 2010 and December 2010 we sold 4,125,000 shares of our common
stock to private investors at a price of $0.02 per share. The offering price of
$0.02 is based on the price that the selling shareholders paid for their shares
in the private offering.
By means of this prospectus, the investors who purchased our common stock
in 2010, and who are referred to as the "selling shareholders", are offering to
sell their shares.
We will not receive any proceeds from the sale of the securities by the
selling shareholders. We will pay all costs of registering the securities
offered by the selling shareholders. The selling shareholders will pay all sales
commissions and other costs of the sale of the securities offered by them.
Share
Shares To Ownership
Name of Shares Be Sold In After
Selling Shareholder Owned This Offering Offering
------------------- ----- ------------- ----------------
Chris M. Grey 275,000 275,000 --
Anna Villalvazo 200,000 200,000 --
Michelle L. Grey 200,000 200,000 --
Philip F. Grey 350,000 350,000 --
Daniela S. Grey 375,000 375,000 --
Jon T. Burgin 375,000 375,000 --
Scott Miller 325,000 325,000 --
Bruce H. Penrod 250,000 250,000 --
Anthony S. Venezia 25,000 25,000 --
Michael Barela 50,000 50,000 --
Ryan Rodenbeck 50,000 50,000 --
Kevin R. Caughman 25,000 25,000 --
Marian R. Silcox 25,000 25,000 --
Vladimir A. Karatsoupa 25,000 25,000 --
Ivan Muzgehenko 50,000 50,000 --
C. James Padgett 75,000 75,000 --
Theodore W. Struhs 50,000 50,000 --
Donald L. Cox 100,000 100,000 --
Bryan Y, Rodenbeck 50,000 50,000 --
Randall J. Kendrick 25,000 25,000 --
Timothy C. Evans 50,000 50,000 --
Philip G. Barclay 25,000 25,000 --
Patricia L. Malunat 75,000 75,000 --
Paul E. Mendell 50,000 50,000 --
Delt 100 Alumni Counsel, LLC 250,000 250,000 --
Salvatore M. Venezia 25,000 25,000 --
Oleg V. Naumenko 25,000 25,000 --
Cindy Mc Coy 50,000 50,000 --
18
Steven Gellatly 50,000 50,000 --
Koby Westerholm 50,000 50,000 --
Sue Ann Guth 25,000 25,000 --
Chystal Durnan 375,000 375,000 --
Morgan Pylant 150,000 150,000 --
We are not affiliated with any of the selling shareholders.
The controlling persons of the non-individual selling shareholders are:
Name of Shareholder Controlling Person
------------------- ------------------
Delt 100 Alumni Counsel, LLC Dr. David Jung
Plan of Distribution
The shares of common stock owned by the selling shareholders may be offered
and sold by means of this prospectus at a price of $0.02 per share. If and when
our common stock becomes quoted on the OTC Bulletin Board, the shares owned by
selling shareholders may be sold in the over-the-counter market, or otherwise,
at prices and terms then prevailing or at prices related to the then current
market price, or in negotiated transactions.
The shares of common stock may be sold by one or more of the following
methods, without limitation:
o a block trade in which a broker or dealer so engaged will attempt
to sell the securities as agent but may position and resell a
portion of the block as principal to facilitate the transaction;
o purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this prospectus;
o ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and
o face-to-face transactions between sellers and purchasers without
a broker/dealer.
In competing sales, brokers or dealers engaged by the selling shareholders
may arrange for other brokers or dealers to participate. Brokers or dealers may
receive commissions or discounts from selling shareholders in amounts to be
negotiated. As to any particular broker-dealer, this compensation might be in
excess of customary commissions. Neither we nor the selling stockholders can
presently estimate the amount of such compensation. Notwithstanding the above,
no FINRA member will charge commissions that exceed 8% of the total proceeds
from the sale.
The selling shareholders and any broker/dealers who act in connection with
the sale of their securities may be deemed to be "underwriters" within the
meaning of ss.2(11) of the Securities Acts of 1933, and any commissions received
19
by them and any profit on any resale of the securities as principal might be
deemed to be underwriting discounts and commissions under the Securities Act.
If any selling shareholder enters into an agreement to sell his or her
securities to a broker-dealer as principal, and the broker-dealer is acting as
an underwriter, we will file a post-effective amendment to the registration
statement, of which this prospectus is a part, identifying the broker-dealer,
providing required information concerning the plan of distribution, and
otherwise revising the disclosures in this prospectus as needed. We will also
file the agreement between the selling shareholder and the broker-dealer as an
exhibit to the post-effective amendment to the registration statement.
Beginning 90 days after the date of this prospectus, and provided we have
filed all reports on 10-K or 10-Q required by the Securities and Exchange Act of
1934,the selling stockholders may also sell their shares pursuant to Rule 144
under the Securities Act of 1933.
We have advised the selling shareholders that they, and any securities
broker/dealers or others who sell the common stock or warrants on behalf of the
selling shareholders, may be deemed to be statutory underwriters and will be
subject to the prospectus delivery requirements under the Securities Act of
1933. We have also advised each selling shareholder that in the event of a
"distribution" of the securities owned by the selling shareholder, the selling
shareholder, any "affiliated purchasers", and any broker/dealer or other person
who participates in the distribution may be subject to Rule 102 of Regulation M
under the Securities Exchange Act of 1934 ("1934 Act") until their participation
in that distribution is completed. Rule 102 makes it unlawful for any person who
is participating in a distribution to bid for or purchase securities of the same
class as is the subject of the distribution. A "distribution" is defined in Rule
102 as an offering of securities "that is distinguished from ordinary trading
transactions by the magnitude of the offering and the presence of special
selling efforts and selling methods". We have also advised the selling
shareholders that Rule 101 of Regulation M under the 1934 Act prohibits any
"stabilizing bid" or "stabilizing purchase" for the purpose of pegging, fixing
or stabilizing the price of the common stock in connection with this offering.
DESCRIPTION OF SECURITIES
Common Stock
We are authorized to issue 100,000,000 shares of common stock. Holders of
common stock are each entitled to cast one vote for each share held of record on
all matters presented to shareholders. Cumulative voting is not allowed; hence,
the holders of a majority of the outstanding common stock can elect all
directors.
Holders of common stock are entitled to receive such dividends as may be
declared by the Board of Directors out of funds legally available therefore and,
in the event of liquidation, to share pro rata in any distribution of our assets
after payment of liabilities. The board is not obligated to declare a dividend.
It is not anticipated that dividends will be paid in the foreseeable future.
20
Holders of common stock do not have preemptive rights to subscribe to
additional shares if issued by us. There are no conversion, redemption, sinking
fund or similar provisions regarding the common stock. All outstanding shares of
common stock are fully paid and nonassessable.
Preferred Stock
We are authorized to issue 10,000,000 shares of preferred stock. Shares of
preferred stock may be issued from time to time in one or more series as may be
determined by our Board of Directors. The voting powers and preferences, the
relative rights of each such series and the qualifications, limitations and
restrictions of each series will be established by the Board of Directors. Our
directors may issue preferred stock with multiple votes per share and dividend
rights which would have priority over any dividends paid with respect to the
holders of our Common Stock. The issuance of preferred stock with these rights
may make the removal of management difficult even if the removal would be
considered beneficial to shareholders generally, and will have the effect of
limiting shareholder participation in transactions such as mergers or tender
offers if these transactions are not favored by our management. As of the date
of this prospectus we had not issued any shares of preferred stock.
Transfer Agent
--------------
TranShare Corporation
5105 DTC Parkway
Suite 325
Greenwood Village CO 80111
Phone: (303) 662-1112
Fax: (303) 770-2222
LEGAL MATTERS
The validity of the securities offered by this prospectus is being passed
upon by Hart & Trinen, LLP, Denver, Colorado.
LEGAL PROCEEDINGS
We are not involved in any legal proceedings and we do not know of any
legal proceedings which are threatened or contemplated.
INDEMNIFICATION
Our Bylaws authorize indemnification of a director, officer, employee or
agent against expenses incurred by him in connection with any action, suit, or
proceeding to which he is named a party by reason of his having acted or served
in such capacity, except for liabilities arising from his own misconduct or
negligence in performance of his duty. In addition, even a director, officer,
employee, or agent found liable for misconduct or negligence in the performance
of his duty may obtain such indemnification if, in view of all the circumstances
21
in the case, a court of competent jurisdiction determines such person is fairly
and reasonably entitled to indemnification. Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be permitted to our
directors, officers, or controlling persons pursuant to these provisions, we
have been informed that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is therefore unenforceable.
AVAILABLE INFORMATION
We have filed with the Securities and Exchange Commission a Registration
Statement on Form S-1 (together with all amendments and exhibits) under the
Securities Act of 1933, as amended, with respect to the securities offered by
this prospectus. This prospectus does not contain all of the information in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Securities and Exchange Commission. For further
information, reference is made to the Registration Statement which may be read
and copied at the Commission's Public Reference Room at 100 F. Street, N.E.,
Washington, D.C. 20549. The public may obtain information on the operation of
the Public Reference Room by calling the Commission at 1-800-SEC-0330. The
registration statement is also available at www.sec.gov, the website of the
Securities and Exchange Commission.
22
COLORADO CERAMIC TILE, INC.
FINANCIAL STATEMENTS
June 30, 2009 and 2010,
& December 31, 2010 (Unaudited)
COLORADO CERAMIC TILE, INC.
Financial Statements
TABLE OF CONTENTS
Page
----
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM 1
FINANCIAL STATEMENTS
Balance sheets 2
Statements of operations 3
Statements of stockholders' equity 4
Statements of cash flows 5
Notes to financial statements 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
Colorado Ceramic Tile, Inc.
Centennial, Colorado
I have audited the accompanying balance sheets of Colorado Ceramic Tile, Inc. as
of June 30, 2009 and 2010, 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 Colorado Ceramic Tile, Inc. as of
June 30, 2009 and 2010, and the results of its operations and its cash flows for
the years then ended in conformity with accounting principles generally accepted
in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 6 to the
financial statements, the Company has suffered recurring losses from operations
and has a working capital deficit and stockholders' deficit. These conditions
raise substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 6. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Aurora, Colorado Ronald R. Chadwick, P.C.
December 22, 2010 RONALD R. CHADWICK, P.C.
1
COLORDO CERAMIC TILE, INC.
BALANCE SHEETS
Dec. 31, 2010
June 30, 2009 June 30, 2010 (Unaudited)
--------------- --------------- ----------------
ASSETS
Current assets
Cash $ - $ - $ 54,233
Accounts receivable 84,087 43,129 18,454
Inventory 26,150 15,595 15,646
--------------- --------------- ----------------
Total current assets 110,237 58,724 88,333
--------------- --------------- ----------------
Deposits 4,193 4,193 4,193
Fixed assets - net 28,948 14,164 6,813
--------------- --------------- ----------------
Total Assets $ 143,378 $ 77,081 $ 99,339
=============== =============== ================
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities
Bank overdraft $ 3,756 $ 4,329 $ -
Accounts payable 141,531 165,334 205,884
Notes payable - current 222,631 213,127 209,124
Accrued interest payable 506 462 605
--------------- --------------- ----------------
Total current liabilities 368,424 383,252 415,613
--------------- --------------- ----------------
Long term liabilities
Notes payable 30,430 18,023 18,023
--------------- --------------- ----------------
Total long term liabilities 30,430 18,023 18,023
--------------- --------------- ----------------
Total Liabilities 398,854 401,275 433,636
--------------- --------------- ----------------
Stockholders' Equity
Preferred stock, $.001
par value; 10,000,000 shares
authorized; No shares issued &
outstanding - - -
Common stock, $.001
par value; 100,000,000 shares
authorized; 4,000,000 (June
2009 & 2010) and 8,125,000
(Dec. 2010) shares issued and
outstanding 4,000 4,000 8,125
Additional paid in capital 34,124 34,124 112,499
Accumulated deficit (293,600) (362,318) (454,921)
--------------- --------------- ----------------
Total Stockholders' Equity (255,476) (324,194) (334,297)
--------------- --------------- ----------------
Total Liabilities and Stockholders'
Equity $ 143,378 $ 77,081 $ 99,339
=============== =============== ================
The accompanying notes are an integral part of the financial
statements.
2
COLORDO CERAMIC TILE, INC.
STATEMENTS OF OPERATIONS
Six Months Six Months
Ended Ended
Year Ended Year Ended Dec. 31, 2009 Dec. 31, 2010
------------- -------------
June 30,
June 30, 2009 2010 (Unaudited) (Unaudited)
----------------- ------------ --------------- --------------
Sales (net of
returns) $ 1,257,931 $ 1,026,076 $ 498,255 $ 434,862
Cost of goods sold 918,943 732,748 336,279 304,855
Gross Profit 338,988 293,328 161,976 130,007
Operating expenses:
Depreciation 23,789 14,784 7,502 7,351
Loss on disposal 13,939 - - -
Receivable write offs 77,794 - - -
Inventory write offs 32,666 1,006 - -
General and
administrative 381,140 340,846 210,269 209,662
------------ ------------ ---------- ----------
529,328 356,636 217,771 217,013
Gain (loss) from
operations (190,340) (63,308) (55,795) (87,006)
------------ ------------ ---------- ----------
Other income (expense):
Interest expense (6,832) (5,410) (2,701) (5,597)
------------ ------------ ---------- ----------
Income (loss) before
provision for income
taxes (197,172) (68,718) (58,496) (92,603)
Provision for income tax - - - -
------------ ------------ ---------- ----------
Net income (loss) $ (197,172) $ (68,718) $ (58,496) $ (92,603)
============ ============ ========== ==========
Net income (loss) per
share
(Basic and fully diluted) $ (0.05) $ (0.02) $ (0.01) $ (0.02)
============ ============ ========== ==========
Weighted average number
of common shares
outstanding 4,000,000 4,000,000 4,000,000 6,062,500
============ ============ ========== ==========
The accompanying notes are an integral part of the financial
statements.
3
COLORADO CERAMIC TILE, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
Common Stock
Amount Paid in Retained Stockholders'
Shares(1) $0.001 Capital Earnings Equity
---------- -------- ------- ---------- -------------
Balances at June 30, 2008 4,000,000 $ 4,000 $34,124 $ (96,428) $ (58,304)
Net income (loss) for
the year (197,172) (197,172)
---------- -------- ------- ---------- -------------
Balances at June 30, 2009 4,000,000 $ 4,000 $34,124 $ (293,600) $(255,476)
Net income (loss) for
the year (68,718) (68,718)
---------- -------- ------- ---------- -------------
Balances at June 30, 2010 4,000,000 $ 4,000 $34,124 $ (362,318) $(324,194)
Stock issued for cash 4,125,000 4,125 78,375 82,500
---------- -------- ------- -------------
Net income (loss) for
the period (92,603) (92,603)
---------- -------- ------- ---------- -------------
Balances at December 31,
2010 - Unaudited 8,125,000 $ 8,125 $112,499 $ (454,921) $(334,297)
========= ======== ======== =========== =============
(1) As restated for a 6,757 for 1 forward stock split on May 17, 2010
The accompanying notes are an integral part of the financial
statements.
4
COLORADO CERAMIC TILE, INC.
STATEMENTS OF CASH FLOWS
Six Months Six Months
Ended Ended
Dec. 31, Dec. 31,
Year Ended Year Ended 2009 2010
June 30, 2009 June 30, 2010 (Unaudited) (Unaudited)
-------------- -------------- ---------- --------------
Cash Flows From Operating
Activities:
Net income (loss) $ (197,172) $ (68,718) $ (58,496) $ (92,603)
Adjustments to reconcile
net loss to net cash
provided by (used for)
operating activities:
Depreciation 23,789 14,784 7,502 7,351
Accounts receivable (18,852) 40,958 43,822 24,675
Inventory 9,705 9,549 3,166 (51)
Deposits (1,013) -
Fixed asset disposal 13,939 -
Write offs 110,460 1,006
Accrued payables 6,239 23,759 25,020 40,693
-------------- -------------- ---------- --------------
Net cash provided
by (used for)
operating activities (52,905) 21,338 21,014 (19,935)
Cash Flows From Investing
Activities:
- - - -
-------------- -------------- ---------- --------------
Net cash provided
by (used for)
investing activities - - - -
-------------- -------------- ---------- --------------
The accompanying notes are an integral part of the financial
statements.
5
Six Months Six Months
Ended Ended
Dec. 31, Dec. 31,
Year Ended Year Ended 2009 2010
June 30, 2009 June 30, 2010 (Unaudited) (Unaudited)
-------------- -------------- ---------- --------------
Cash Flows From Financing
Activities:
Notes payable - borrowings 89,400 21,000 12,200 11,300
Notes payable - payments (67,804) (42,911) (27,814) (15,303)
Bank overdraft 3,756 573 (3,756) (4,329)
Sales of common stock - - - 82,500
-------------- -------------- ---------- --------------
Net cash provided
by (used for)
financing activities 25,352 (21,338) (19,370) 74,168
-------------- -------------- ---------- --------------
Net Increase (Decrease) In Cash (27,553) - 1,644 54,233
Cash At The Beginning Of The Period 27,553 - - -
-------------- -------------- ---------- --------------
Cash At The End Of The Period $ - $ - $ 1,644 $ 54,233
============== ============== ========== ==============
Schedule Of Non-Cash Investing
And Financing Activities:
------------------------------
None
Supplemental Disclosure:
------------------------
Cash paid for interest $ 6,952 $ 5,454 $ 2,664 $ 5,454
-------- ---------
Cash paid for income taxes $ - $ - $ - $ -
-------- ---------
The accompanying notes are an integral part of the financial
statements.
<
6
COLORADO CERAMIC TILE, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2010, & December 31, 2010 (Unaudited)
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Colorado Ceramic Tile, Inc. (the "Company"), was incorporated in the State of
Colorado on March 27, 1995. The Company sells and installs stone and tile.
Fiscal year
The Company employs a fiscal accounting year ending June 30.
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 June 30, 2009 and 2010, and December 31, 2010 the Company
had no balance in its allowance for doubtful accounts.
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.
Inventories
Inventories, consisting of ceramic tile, are stated at the lower of cost or
market (first-in, first-out method). Costs capitalized to inventory include the
purchase price, transportation costs, and any other expenditures incurred in
bringing the goods to the point of sale and putting them in saleable condition.
Costs of good sold include those expenditures capitalized to inventory.
7
COLORADO CERAMIC TILE, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2010, & December 31, 2010 (Unaudited)
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued):
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 advertising costs in
fiscal year 2009 and 2010, and for the six months ended December 31, 2010 of
$5,930, $824 and $155.
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.
At June 30, 2009 and 2010 the Company had net operating loss carryforwards of
approximately $250,000 and $320,000 which begin to expire in 2024. The deferred
tax asset of approximately $52,000 and $65,000 in 2009 and 2010 created by the
net operating losses have been offset by a 100% valuation allowance. The change
in the valuation allowance in fiscal year 2009 and 2010 was $36,000 and $13,000.
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.
8
COLORADO CERAMIC TILE, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2010, & December 31, 2010 (Unaudited)
NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued):
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.
Products and services
The Company earns revenue from the sale and installation of stone and tile, but
does not separate sales into different operating segments.
Stock based compensation
The Company accounts for employee and non-employee stock awards under ASC 718,
whereby equity instruments issued to employees for services are recorded based
on the fair value of the instrument issued and those issued to non-employees are
recorded based on the fair value of the consideration received or the fair value
of the equity instrument, whichever is more reliably measurable.
NOTE 2. FIXED ASSETS
Fixed asset values recorded at cost are as follows:
June 30, June 30, Dec. 31,
2009 2010 2010
------------- ------------- -------------
Vehicles $ 138,016 $ 138,016 $ 138,016
Office equipment 11,800 11,800 11,800
Machinery & equipment 16,987 16,987 16,987
----------- ----------- -----------
166,803 166,803 166,803
Less accumulated depreciation (137,855) (152,639) (159,990)
----------- ----------- -----------
Total $ 28,948 $ 14,164 $ 6,813
=========== =========== ===========
Depreciation expense in fiscal year 2009, 2010 and for the six months ended
December 31, 2010 was $23,789, $14,784 and $7,351.
9
COLORADO CERAMIC TILE, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2010, & December 31, 2010 (Unaudited)
NOTE 3. NOTES PAYABLE
The Company has been advanced unsecured, non-interest bearing, due on demand
working capital loans from various related parties. The balance on these loans
at June 30, 2009 and 2010, and December 31, 2010 was $103,038, $85,178, and
$88,678.
The Company has also been advanced secured by inventory, non-interest bearing,
due on demand working capital loans from a non-related party. The balance on
these loans at June 30, 2009 and 2010, and December 31, 2010 was $66,609,
$66,609, and $66,059. The Company carries a revolving, due on demand, variable
interest rate line of credit with a bank, providing for a credit line up to
$50,000, secured by all Company assets, with an outstanding balance at June 30,
2009 and 2010, and December 31, 2010 of $39,661, $49,505 and $48,286, and a
corresponding remaining available balance for borrowing at each date of $10,339,
$495, and $1,714. There are no financial covenants associated with the line of
credit. The Company has various vehicle loans outstanding, secured by Company
vehicles, with interest rates from 6.5% to 9.3%, requiring monthly payments, and
with due dates from November 2012 through January 2013. The outstanding balance
on vehicle loans at June 30, 2009 and 2010, and December 31, 2010 was $43,753,
$29,858, and $24,124. One of the vehicles with a purchase price of approximately
$36,000 is held in the name of a related party shareholder.
The principal balance due on all notes payable at June 30, 2009 and 2010, and
December 31, 2010 was $253,061 (current $222,631 and long term $30,430),
$231,150 (current $213,127 and long term $18,023), and $227,147 (current
$209,124) and long term $18,023). Future required principal payments under all
notes payable by year from June 30, 2010 forward are: year end June 30, 2011
$209,124, year end June 30, 2012 $12,805, year end June 30, 2013 $5,218, Total
$227,147.
Accrued interest payable under all notes payable at June 30, 2009 and 2010, and
December 31, 2010 was $506, $462, and $605. Interest expense in fiscal year 2009
and 2010, and for the six months ended December 31, 2010 was $6,832, $5,410, and
$5,597.
NOTE 4. LEASE COMMITMENTS
The Company rents space under a month to month commercial operating lease with
payments of approximately $7,000 per month plus costs. Beginning in January 2008
the landlord has allowed the Company to pay $5,000 per month while accruing the
balance due. This arrangement has led to an accrued rent payable balance at June
30, 2009 and 2010, and December 31, 2010 of $24,100, $48,025 and $61,487. Rent
expense in fiscal year 2009, 2010 and for the six months ended December 31, 2010
was $83,925, $83,925 and $41,962.
10
COLORADO CERAMIC TILE, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 2009 and 2010, & December 31, 2010 (Unaudited)
NOTE 5. GOING CONCERN
The Company has suffered recurring losses from operations and has a working
capital deficit and stockholders' deficit, and in all likelihood will be
required to make significant future expenditures in connection with continuing
marketing efforts along with general administrative expenses. These conditions
raise substantial doubt about the Company's ability to continue as a going
concern.
The Company may raise additional capital through the sale of its equity
securities, through an offering of debt securities, or through borrowings from
financial institutions. By doing so, the Company hopes through increased
marketing efforts to generate greater revenues from sales of stone and tile.
Management believes that actions presently being taken to obtain additional
funding provide the opportunity for the Company to continue as a going concern.
NOTE 6. SUBSEQUENT EVENTS
The Company has evaluated subsequent events through the date of issuance of
these financial statements and determined that there are no reportable
subsequent events.
11
TABLE OF CONTENTS
Prospectus Summary .........................................................
Risk Factors ...............................................................
Market for our Common Stock ................................................
Management's Discussion and Analysis and Plan of Operation .................
Business ...................................................................
Management .................................................................
Principal Shareholders .....................................................
Selling Shareholders .......................................................
Description of Securities ..................................................
Legal Matters ..............................................................
Legal Proceedings ..........................................................
Indemnification ............................................................
Available Information ......................................................
Financial Statements .......................................................
No dealer, salesperson or other person has been authorized to give any
information or to make any representation not contained in this prospectus, and
if given or made, such information or representations must not be relied upon as
having been authorized by Colorado Ceramic Tile, Inc. This prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, any of the
securities offered in any jurisdiction to any person to whom it is unlawful to
make an offer by means of this prospectus.
Until _________, 2011, all dealers effecting transactions in the registered
securities, whether or not participating in this distribution, may be required
to deliver a prospectus. This is in addition to the obligation of dealers to
deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
1
PART II
Information Not Required in Prospectus
Item 13. Other Expenses of Issuance and Distribution.
The following table show the costs and expenses payable by the Company in
connection with this registration statement.
SEC Filing Fee $ 10
Blue Sky Fees and Expenses 500
Printing Expenses 500
Legal Fees and Expenses 25,000
Accounting Fees and Expenses 10,000
Miscellaneous Expenses 490
-------
TOTAL $36,500
=======
All expenses other than the SEC filing fee are estimated.
Item 14. Indemnification of Officers and Directors
The Colorado Business Corporation Act provides that the Company may
indemnify any and all of its officers, directors, employees or agents or former
officers, directors, employees or agents, against expenses actually and
necessarily incurred by them, in connection with the defense of any legal
proceeding or threatened legal proceeding, except as to matters in which such
persons shall be determined to not have acted in good faith and in the Company's
best interest.
Item 15. Recent Sales of Unregistered Securities.
Between June 2010 and December 2010 the Company sold 4,125,000 shares of
its common stock to thirty four private investors at a price of $0.02 per share.
The Company relied upon the exemption provided by Section 4(2) of the
Securities Act of 1933 with respect to the issuance of these shares. The persons
who acquired these shares were sophisticated investors and were provided full
information regarding the Company. There was no general solicitation in
connection with the offer or sale of these securities. The persons who acquired
these shares acquired them for their own accounts. The certificates representing
these shares bear a restricted legend providing that they cannot be sold except
pursuant to an effective registration statement or an exemption from
registration. No commission or other form of remuneration was given to any
person in connection with the issuance of these shares. Share numbers are
post-split.
1
Item 16. Exhibits and Financial Statement Schedules
The following exhibits are filed with this Registration Statement:
Exhibits Page Number
3.1.1 Articles of Incorporation ___
3.1.2 Amendment to Articles of Incorporation ___
3.2 Bylaws ___
5. Opinion of Counsel ___
10.1 Line of Credit Terms ___
23.1 Consent of Hart & Trinen ___
23.2 Consent of Ronald R. Chadwick, P.C. ___
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:
(i) To include any prospectus required by Section l0 (a)(3) of the
Securities Act:
(ii) To reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information in
the registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration statement;
and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
2
(3) To remove from registration by means of a post-effective amendment any
of the securities that remain unsold at the termination of the offering.
Insofar as indemnification for liabilities arising under the Securities Act
of l933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(4) That, for the purpose of determining liability under the Securities
Act of 1933 to any purchaser:
(i) If the registrant is subject to Rule 430C, each prospectus filed
pursuant to Rule 424(b) as part of a registration statement relating to an
offering, other than registration statements relying on Rule 430B or other than
prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and
included in the registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a
document incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as to a
purchaser with a time of contract of sale prior to such first use, supersede or
modify any statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any such document
immediately prior to such date of first use.
3
SIGNATURES
Pursuant to the requirements of the Securities Act of l933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Denver, Colorado on the 18th day
of March, 2011.
COLORADO CERAMIC TILE, INC.
By: /s/ Sandie Venezia
-------------------------------------
Sandie Venezia, President and Principal
Executive Officer
In accordance with the requirements of the Securities Act of l933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Sandie Venezia
---------------------- Principal Executive, March 18, 2011
Sandie Venezia Financial and Accounting
Officer and a Director
/s/ Mark Rodenbeck
---------------------- Director March 18, 2011
Mark Rodenbeck
4
