Attached files
File No.: 333-167249
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1/A
(Amendment No. 12)
REGISTRATION UNDER THE SECURITIES ACT OF 1933
BALLROOM DANCE FITNESS, INC.
(Exact name of registrant as specified in its charter)
Florida
(State or other jurisdiction of incorporation or organization)
8000
(Primary Standard Industrial Classification Code Number)
26-3994216
(I.R.S. Employer Identification Number)
1150 Hillsboro Mile
Suite 1004 2-102
Hillsboro Beach, Florida 33062
(954) 684 8288
(Principal Executive Offices and Telephone Number)
Diane D. Dalmy
Attorney at Law
8965 W. Cornell Place
Lakewood, Colorado 80227
303.985.9324 (telephone)
303.988.6954 (fax)
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
As soon as practicable after this Registration Statement is declared
effective.
(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," "non-
accelerated filer" and "smaller reporting company" in Rule 12b-2 of the
Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities Proposed Maximum Proposed Maximum Amount of
to be Registered Amount to be Registered (1) Offering Price Per Share Aggregate Offering Price Registration Fee
Common Stock, par value $0.0001
per share 6,000,000(1) $0.40 $2,400,000 $171.12(2)(3)
(1) Pursuant to Rule 415 of the Securities Act, these securities are being
offered by the Registrant on a delayed or continuous basis.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(a) under the Securities Act.
(3) Fee previously paid.
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, or until this Registration Statement shall become
effective on such date as the Securities and Exchange Commission (or the
"SEC"), acting pursuant to said Section 8(a), may determine.
________________________________________
2
SUBJECT TO COMPLETION, DATED FEBRUARY 16, 2012
The information in this Prospectus is not complete and may be changed.
Ballroom Dance Fitness, Inc. may not sell these securities until the
registration statement filed with the U.S. Securities and Exchange Commission
is deemed 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.
PROSPECTUS
6,000,000 Shares of Common Stock
BALLROOM DANCE FITNESS, INC.
$0.40 per Share
Ballroom Dance Fitness, Inc. ("Company") is offering on a "best-efforts" basis
up to 6,000,000 shares of its Common Stock at a price of $0.40 per share. This
is the initial public offering of Common Stock of the Company and no public
market currently exists for the securities being offered in this Prospectus.
The Company is offering the shares on self-underwritten, "best-efforts" basis.
The shares will be offered at a fixed price of $0.40 per share for a period
not to exceed 180 days from the date of this Prospectus. There is no minimum
number of shares required to be purchased and there can be no assurances that
any of the shares offered will be purchased. The Company's officers and
directors intend to sell the shares directly. No commission or other
compensation related to the sale of the shares will be paid. The intended
methods of communication include, without limitations, telephone, and personal
contact. For more information, see the section titled "Plan of Distribution"
and "Use of Proceeds" herein.
The share being registered represent 35% of total shares, if the 6,000,000
shares being offered by the Company pursuant to this Prospectus are sold. If
we sell all of the 6,000,000 shares offered by the Company, we will receive
$2,400,000 in gross proceeds. The Company estimates it will need to sell at
least 50% of the offering ($1,200,000), to fully implement the Company's
entire business plan and sustain such operations for the next 12 months
although it would be able to produce its fitness DVD (as discussed in the
prospectus) if it sells 25% of the shares in this offering.
The proceeds from the sale of the shares in this offering will be payable and
made immediately available to the Company and will not be held in escrow
account. The net proceeds will be used to fund our operations and for working
capital as management determines. The offering shall terminate on the earlier
of (i) the date when the sale of all 6,000,000 shares is completed or (ii) one
hundred and eighty (180) days from the date of this Prospectus. The Company
will not extend the offering period beyond one hundred and eighty (180) days
from the date of this Prospectus. Ballroom Dance Fitness, Inc. does not plan
to use this offering Prospectus before the effective date.
Subscriptions and payments for any of the shares shall be, when made,
irrevocable and will only be returned upon the Company's rejection of the
subscription.
The Company is a development stage company and has a limited operating
history.
THESE SECURITIES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK AND SHOULD
BE CONSIDERED ONLY BY PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE
INVESTMENT. PLEASE REFER TO "RISK FACTORS" BEGINNING ON PAGE 10.
THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE
NOT APPROVED OR DISAPPROVED OF THESE SECURITIES, OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
________________________________________
3
PROSPECTUS
----------------
BALLROOM DANCE FITNESS, INC.
6,000,000 SHARES COMMON STOCK
$0.40 per Share
----------------
TABLE OF CONTENTS
Item Page
Summary 5
Risk Factors 9
Description of Business 18
Description of Properties 19
Legal Proceedings 20
Use of Proceeds 20
Determination of Offering Price 21
Dilution 22
Plan of Distribution 23
Directors, Executive Officers, Promoters and Control Persons 24
Security Ownership of Certain Beneficial Owners and Management 26
Description of Securities 27
Interest of Named Experts and Counsel 28
Experts 28
Disclosure of Commission Position of Indemnification for Securities Act
Liabilities 29
Organization Within Last Five Years 29
Management's Discussion and Analysis of Financial Condition and Results of
Operations 29
Certain Relationships and Related Transactions and Corporate Governance 34
Market for Common Equity and Related Stockholder Matters 36
Changes in and Disagreements with Accountants and Financial Disclosure 36
Where You Can Find More Information 37
Financial Statements F-1
4
SUMMARY
The following summary is not complete and does not contain all of the
information that may be important to you. You should read the entire
Prospectus before making an investment decision to purchase our Common Stock.
General Information about the Company
Ballroom Dance Fitness, Inc. (the "Company" or "Ballroom Dance Fitness") was
incorporated in the State of Florida on January 2, 2009. The company has
generated limited revenues since its inception, totaling $26,350 through
September 30, 2011.The company has lost $(5,545) in nine months 2011 and
total loss from inception of $(27,892). We are a Development Stage Company.
The Company's business model includes the following:
1. Fitness DVD Routines: Producing, marketing and selling DVD's that will
feature six different ballroom dances: the Cha-Cha, Swing, Salsa, Meringue,
Rumba and Waltz. The program is to promote "Fun Exercise" to Ballroom Dance
and fitness enthusiasts. The videos will be marketed as exercise videos
designed for individuals that want to lose weight and also learn Ballroom
Dance steps. The fitness routines will stress dance steps and use them in
exercise routines, building the lower body, strengthening heart endurance,
plus show how the use of hand free weights will develop and tone the upper
body.
2. Certified Fitness Instructors: The Company intends to offer fitness
trainers and ballroom dance instructors an opportunity to become certified as
a Ballroom Dance Fitness instructor after completing a six hour training
session with Sean Forhan, the Company's Founder. The certified trainer will
offer Ballroom Dance Fitness classes in his/her city and keep all of the
revenue. It is intended that the instructors will pay a one-time fee of $250
to become certified. There will be an annual renewal fee of $175 to keep the
certification active. The Certification is not regulated by a sanctioning
body, it is a Certificate from Ballroom Dance Fitness Inc. verifying
participation in the one day of training for fitness classes using Ballroom
Dance Fitness Inc. dance fitness class routines. The fitness instructors will
receive an annual 8 x 11 inch framed Certificate from Ballroom Dance Fitness
Inc. when they complete their annual one day training and payment of $175
for the training, lunch. The Certified instructors keep 100% of the money
they receive for Ballroom Dance Fitness classes that they conduct.
To date, we haven't produced any DVDs and we believe that we will need
$194,000 to produce our first DVD. If the Company is not successful in
raising at least 25% of the shares in this Offering ($600,000), the Company
will reduce the cost of the DVD by reducing the proposed six dances to four or
five, in order to complete the DVD for sale. We estimate that the cost of the
shortened DVD will be $162,000 due to a reduction in production and editing
cost. If we don't sell enough shares in this offering, we might not have
enough money to produce our first DVD and you could lose your money.
If and when funds become available, the Company also plans to launch
infomercials which will promote the Company's DVDs. The Company also intends
to enter into marketing alliances with related companies (e.g., health food
and nutrition products, fitness equipment, clothing and shoes and ballroom
studios). To date, the Company has not taken any steps regarding the
foregoing and may not be able to do so.
The proceeds from the sale of the shares in this offering will be payable and
made immediately available to the Company and will not be held in escrow
account. The net proceeds will be used to fund our operations and for working
capital as management determines.
At December 31, 2010 we had $676 cash on hand, liabilities totaling
$(10,156), a stockholders' deficit of $(9,480) and an accumulated deficit of
$(22,346). At December 31, 2009, we had $4 cash on hand, liabilities totaling
$(256), a stockholder's deficit of $(252) and an accumulated deficit of
$(11,258). In their audit report, dated June 14, 2011, our auditors have
expressed their doubt as to our ability to continue as a going concern. To
date, the Company has financed its operations from revenues of $19,054
from inception until December 31, 2010 and non-interest bearing demand loans
from the Company's Chief Executive Officer, William G. Forhan, totaling
$2,156. These loans are not pursuant to any written agreement, are non-
interest bearing and payable upon demand. The Company has agreed to repay
such loans upon the receipt of sufficient capital.
5
At September 30, 2011 we had $1,952 cash on hand, liabilities totaling
$(16,978) a stockholders' deficit of $(15,026) and an accumulated deficit of
$(27,892). At December 31, 2010, we had $676 cash on hand, liabilities
totaling $(10,156), a stockholder's deficit of $(9,480) and an accumulated
deficit of $(22,346). In their audit report, dated June 14, 2011, our
auditors have expressed their doubt as to our ability to continue as a going
concern. To date, the Company has financed its operations from revenues of
$26,350 from inception until September 30, 2011 and non-interest bearing
demand loans from the Company's Chief Executive Officer, William G. Forhan,
totaling $8,228. These loans are not pursuant to any written agreement, are
non-interest bearing and payable upon demand. The Company has agreed to
repay such loans upon the receipt of sufficient capital. The company's
revenues for nine months 2011 were $7,302 compared to $10,650 for the same
period in 2010; and $26,350 since inception
We do not have enough capital to implement our business plan. We will depend
on generating sufficient proceeds from this offering to fund our operations
and implement our business plan. We will also need to raise additional capital
by the issuance of securities and from loans. In the event the Company is not
successful in selling any shares in this offering, the Company's Chief
Executive Officer has verbally agreed to continue to fund the Company's
operations until any such funding can be raised.
Management Team
Sean Forhan (Founder, Chief Operating Officer and Director) has taught
Ballroom dancing in Michigan and Florida for past 14 years. Sean's dance
experience includes teaching for the franchised dance studios of Fred Astaire
and Arthur Murray along with teaching at independent dance studios. Sean has
taught his Ballroom Dance Fitness classes at local community centers, gyms and
the YMCA.
William G. Forhan (CEO and Director) is an entrepreneur and has experience (30
years as CEO of private and public companies) in creating and building
companies. He has acquired over 60 businesses and sold over 10 companies. He
has been CEO and founder of seven private companies and three public
companies. The public companies were all quoted on the OTC Bulletin Board and
their names and symbols were: Casino Airlink, Inc. (POKR), Aviation Industries
(AVIA) and Invicta Group, Inc. (IVIT). All companies were subsequently sold to
private companies. Mr. Forhan is currently serving as the Chief Executive
Officer of Casino Players, Inc., a reporting company.
6
Selected Financial Data
The following audited financial information summarizes the more
complete historical financial information included at the end of this
prospectus.
At December 31, 2010 At December 31, 2009
Balance Sheet
Total Assets $676 $4
Total Liabilities $10,156 $256
Stockholders' (Deficit) $(9,480) $(252)
For the Fiscal Year For the Fiscal Year
Ended December 31, 2010 Ended December 31, 2009
Income Statement
Revenues $14,879 $4,175
Total Expenses $ 25,967 $15,433
Profit (Loss) $(11,088) $(11,258)
AVAILABLE INFORMATION
The Company is subject to the reporting and information requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and is
therefore required to file annual and quarterly reports and other reports and
statements with the SEC. Such reports and statements are available free of
charge on the SEC's website, www.sec.gov.
DIVIDEND POLICY
We have never paid or declared dividends on our securities. The payment of
cash dividends, if any, in the future is within the discretion of our Board
and will depend upon our earnings, our capital requirements, financial
condition and other relevant factors. We intend, for the foreseeable future,
to retain future earnings for use in our business.
PRINCIPAL EXECUTIVE OFFICES
The Company's executive offices are located at 1150 Hillsboro Mile . Suite
1004, Hillsboro Beach Florida 33062 and the Company telephone number is
(954) 684-8288. The Company's website is www.BallroomDanceFitness.info.
The contents of the website are not incorporated into this Prospectus.
________________________________________
7
OFFERING SUMMARY
The Issuer: Ballroom Dance Fitness, Inc., a Florida corporation
Securities Being Offered: 6,000,000 shares of our Common Stock, par value
$0.0001 per share
Offering Price: $0.40 per share
Minimum Number of Shares to
Be Sold in This Offering: None
Company Capitalization: Common Stock: 100,000,000 shares authorized;
11,113,750 shares outstanding as of the date of this Prospectus.
Common Stock Outstanding
Before and After the Offering: 11,113,750 shares of our Common Stock are
issued and outstanding as of the date of this Prospectus. Upon the completion
of this offering, 17,113,750 shares will be issued and outstanding assuming
all of the Shares offered are sold.
Use of Proceeds: We intend to use the proceeds to commence our business
operations and other general working capital and expenses incurred relating to
this registration statement. The funds will be made immediately available to
the Company and used at management's discretion to build the business.
Subscription agreements and monies paid are irrevocable and funds will only be
returned upon rejection of the subscription by the Company.
Subscription Directions: The proceeds from the sale of the shares in this
offering will be payable to "Ballroom Dance Fitness, Inc."
Risk Factors: See "Risk Factors" and the other information in this
Prospectus for a discussion of the factors you should consider before deciding
to invest in shares of our Common Stock.
________________________________________
8
RISK FACTORS
An investment in our Common Stock involves a high degree of risk. In addition
to the other information in this Prospectus, you should carefully consider the
following factors in evaluating us and our business before purchasing the
shares of Common Stock offered hereby. This Prospectus contains, in addition
to historical information, forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially.
Risks Related to Our Business
An investment in the shares offered hereby is highly speculative, involves a
high degree of risk and should be considered only by those persons who are
able to afford a loss of their entire investment.
The purchase of the Shares is suitable only for persons who have the financial
capability to make the required investment and hold the Shares for a long
period of time. A purchaser will not be able to resell the Shares readily.
Purchaser must, therefore, have adequate other means of providing for their
current personal needs and contingencies. Our business organization and
existing debt and other obligations on our balance sheet all involve elements
of substantial risk. In many instances, these risks arise from factors over
which we will have little or no control. Some adverse events may be more
likely than others and the consequence of some adverse events may be greater
than others. No attempt has been made to rank risks in the order of their
likelihood or potential harm. In addition to those general risks enumerated
elsewhere in this Prospectus, Subscribers should also consider the following
factors.
We are not currently profitable and may not become profitable.
From our inception until the fiscal year ended December 31, 2010, we have
generated revenues of $19,054. We have incurred $(22,346) operating losses
since our formation and expect to incur losses and negative operating cash
flows for the foreseeable future, and we may not achieve or maintain
profitability. Our failure to achieve or maintain profitability could
negatively impact the value of our common stock.
Our executive officers control the Company, set their own salaries and will be
paid out of the net proceeds of this Offering once $1,200,000 (50%) is raised.
We currently have employment agreements with CEO William Forhan and COO Sean
Forhan, paying each of them a salary of $72,000 a year. We have not paid any
salary, bonus or other compensation to our officers and directors since our
inception. Management will receive six months of wages ($36,000 each for a
total of $72,000) from the proceeds of this offering if and when $1,200,000
(50%) is raised in this offering and will not receive any more salary until we
are profitable. If and when $1,800,000 (50%) is raised in this offering, we
will pay our executive officers' full salary ($72,000 each for a total of
$144,000). See "Use of Proceeds." Our executive officers also serve as
directors of the Company and, as persons in control of the Company, set their
own compensation. Money we use to pay them will be deducted from proceeds we
need to implement our business strategy.
The current prolonged economic recession might prevent us from obtaining
additional financing or on our ability to sell fitness videos.
The U.S. is currently experiencing a prolonged economic recession during which
investor and discretionary consumer spending has drastically been reduced.
This might make it more difficult for us to obtain additional financing to
grow our business and implement our business strategy or even if we are able
to do so, harm our ability to sell fitness videos which are discretionary in
nature (i.e., nonessential consumer goods). Our inability to obtain
additional financing and/or sell fitness videos will cause our business to
fail.
No member of our management team is or will be required to work on a full time
basis which could result in their inability to properly manage company
affairs, resulting in our remaining a start-up company with no revenues or
profits.
9
No member of our management team is currently working full time on the
operations of our Company. Our Chief Executive Officer, William G. Forhan is
currently serving as the Chief Executive Officer Casino Players, Inc. which
may limit the time that he will spend managing our Company. Our business plan
does not provide for the hiring of any additional employees until revenue will
support the expense, of where there can be no assurances. Until that time, the
responsibility of developing the Company's business, offering and selling of
the shares through this prospectus, and fulfilling the reporting requirements
of a public company all fall upon the Company's management team who have
limited time to manage the affairs of the Company. In the event they are
unable to fulfill any aspect of their duties to the Company, we may experience
a shortfall or complete lack of revenue resulting in little or no profits and
eventual closure of the business.
Proceeds received in this Offering may not be sufficient.
Net proceeds from the Offering, if any, will be used to implement our business
plan and for working capital purposes. If we are not successful in raising
sufficient amounts in this Offering, any proceeds from this Offering will be
of little value to us. The Company estimates it will need to sell at least 50%
of the offering ($1,200,000), to fully implement the Company's entire business
plan and sustain such operations for the next 12 months although it would be
able to produce its fitness DVD (as discussed in the prospectus) if it sells
25% of the shares in this offering.
You may lose your entire investment if we sell less than 50% of shares in this
Offering.
We currently do not have enough money to fund our operations for the next 12
months. The Company expects the net proceeds from the sale of fifty percent
(50%) of the shares will allow the Company to fully implement its business
plan and sustain such operations for a period of 12 months although it would
be able to produce its fitness DVD (as discussed in the prospectus) if it
sells 25% of the shares in this offering. If we fail to sell at least 50% of
the shares in this Offering, we will not have enough proceeds to implement our
entire business plan and you may lose your entire investment in the shares.
Even if we sell more than 50% of the shares in this Offering, you may lose you
entire investment in the shares.
We might not have enough proceeds to continue operations or develop a market.
There is no required minimum amount of Shares that must be sold in this
offering. As a result, potential investors will not know how many shares of
our common stock will ultimately be sold and the amount of proceeds the
Company will receive from the offering. If the Company sells only a few
Shares, potential investors may end up holding shares in a company that:
* hasn't received enough proceeds from the offering to begin/sustain
operations; and
* has no market for its shares.
We will need to obtain additional financing.
We will be required to obtain additional financing to continue to operate our
business. At our current state of nominal operations, we need roughly $500,000
for the next 12 months. The monthly burn rate is based on: 5 staff ($20,000),
($12,000) G&A, and ($10,000) advertising is $42,000 per month; totaling
$504,000 burn per year. The Company expects we will need and additional
$500,000 to fully implement its business plan and sustain such operations for
a period of 12 months. There can be no assurance that any additional
financing, if required, will be available to us on acceptable terms, if at
all. Any inability of us to obtain additional financing, if required, could
have a material adverse effect on our financial condition and results of
operations.
10
Our product lines may never gain commercial acceptance.
There can be no guarantee that our plan of operation will be commercially
accepted at revenue levels sufficient to permit us to achieve or maintain
profitable operations.
A dispute concerning the infringement or misappropriation of our proprietary
rights or the proprietary rights of others could be time consuming and costly,
and an unfavorable outcome could harm our business.
We may be exposed to future litigation by third parties based on claims that
our programs infringe the intellectual property rights of others. If we become
involved in litigation, it could consume a substantial portion of our
managerial and financial resources, regardless of whether we win or lose. We
may not be able to afford the costs of litigation. Any legal action against us
or our collaborators could lead to:
* payment of damages, potentially treble damages, if we are found to have
willfully infringed a party's patent rights;
* injunctive or other equitable relief that may effectively block our
ability to further develop, commercialize and sell products; or
* we or our collaborators having to enter into license arrangements that
may not be available on commercially acceptable terms, if at all.
As a result, we could be prevented from commercializing current or future
products.
Consumers may not embrace our products, or preferences may change.
Our ability to operate our business successfully is dependent initially on the
success of a variety of factors, including our ability to sell our products to
the public. We anticipate that our business will be targeted at consumers who
assign high value to a healthy lifestyle and personal development. Our ability
to grow our customer base and generate sales will depend initially upon
customer-acceptance of our products and the importance consumers place on
healthy lifestyles and personal development. Our success also depends upon the
willingness of consumers to purchase goods and services that promote the
values we espouse. We cannot assure you that the demographic trends on which
they are based will continue or that the current levels of healthy lifestyles
and personal development will be sustained. The decrease of consumer interest
in purchasing goods and services that promote the values we espouse would
materially and adversely affect the growth of our customer base and sales
revenues and, accordingly, would have a material adverse effect on our
business, results of operations, and financial condition.
Further, consumer preferences are difficult to predict. Our future success
depends in part on our ability to anticipate and respond to changes in
consumer preferences and we may not respond in a timely or commercially
appropriate manner to such changes. Failure to anticipate and respond to
changing consumer preferences could have a material adverse effect on our
business, results of operations, and financial condition. There can be no
assurance regarding whether or when we will be able to successfully implement
our business plan or that we will achieve profitability
We are dependent of third party manufacturers for the manufacture and shipment
of our products.
We do not own or operate any manufacturing facilities and are, therefore,
dependent on third parties for the manufacture of our products (whether DVDs
or other products). We will rely on contract manufacturers to produce some of
our products. These contract manufacturers may also produce products for some
of our competitors. If any of our contract manufacturers were unable or
unwilling to produce and ship our products in a timely manner or to produce
11
sufficient quantities to support our growth, if any, we would have to identify
and qualify new contract manufacturers. There can be no assurance that we
would be able to identify and qualify new contract manufacturers in a timely
manner or that such manufacturers would allocate sufficient capacity to us in
order to meet our requirements, which could adversely affect our ability to
make timely deliveries of our products. In addition, there can be no assurance
that the capacity of the contract manufacturers will be sufficient to fulfill
our orders, and any supply shortfall could materially and adversely affect our
business, results of operations, and financial condition.
To successfully operate our business, we must receive timely delivery of
merchandise from our vendors and suppliers. As we grow, some of these vendors
may not have sufficient capital, resources or personnel to satisfy their
commitments to us. Any significant delay in the delivery of products by
vendors could have a material adverse effect on our business, results of
operations, and financial condition.
In addition, the contract manufacturers will be contractually required to
maintain the quality of the products we sell and to comply with applicable
laws and regulations relating to the production of such products. There can be
no assurance that our contract manufacturers will always produce products that
are consistent with our standards. The failure of any contract manufacturer to
produce products that conform to our standards could materially adversely
affect our reputation and result in product recalls, product liability claims
and severe economic loss.
Our sales and operating results may vary widely.
We expect to experience fluctuations in our operating results as a result of a
variety of factors, including:
(i) fluctuations in promotional, advertising, and marketing expenditures;
(ii) the introduction of new products or delays in such introductions;
(iii) the introduction or announcement of new products by our competitors;
(iv) customer acceptance of new products;
(v) shipment delays;
(vi) consumer perceptions of our products and operations;
(vii) competitive pricing pressures;
(viii) the adverse effect of our or our distributors' or suppliers' failure,
and allegations of their failure, to comply with applicable regulations;
(ix) the availability and cost of raw materials;
(x) economic conditions in general and in the media and lifestyles industry in
particular;
(xi) the negative effect of changes in or interpretations of regulations that
may limit or restrict the sale of certain of our products;
(xii) the expansion of our operations into new markets; and
(xiii) the introduction of our products into each such market.
Any of these factors could have a material adverse effect on our business,
results of operations, and financial condition. We have no operating history,
and therefore it is difficult to predict our future sales or its ability to
identify and adapt its products successfully to meet changing consumer
interest trends and other elements that affect our results of operations.
12
We must achieve trade and consumer acceptance in distribution channels.
Our growth will depend in part on our ability to attract and maintain
customers and expand our channels of marketing and distribution. These
channels of marketing and distribution are expected to present, competitive
challenges, risks and marketing and distribution costs. In addition, our
expansion in these channels of distribution will require us to attract and
retain consumers in broader demographic and geographic markets. There can be
no assurance that we will achieve successful distribution through nationwide
distribution channels and with consumers in other demographic and geographic
markets. The inability to obtain consumer acceptance in these markets could
have a material adverse effect on our business, results of operations, and
financial condition.
Our business may be affected by changes in trends.
The health & fitness industries are subject to changing consumer trends,
demands and preferences. Trends change often and unpredictably, and our
failure to anticipate, identify or react to changes in these trends could
lead, among other things, to reduced demand and price reductions, and could
have a material adverse effect on our business, results of operations, and
financial condition. These changes might include consumer demand for new
products or formulations. Our success depends, in part, on our ability to
anticipate the habits of consumers and to offer products that appeal to their
preferences on a timely and affordable basis.
Direct-response marketing is extremely competitive.
We plan to market our DVDs via direct response marketing (such as television
infomercials). The direct response industry is extremely competitive, rapidly
evolving and subject to constant change and intense marketing by providers of
similar products. We must be able to distinguish our products and develop new
products that address the needs of our customers. The inability to do so could
have a material adverse effect on our business, results of operations, and
financial condition.
We have a very narrow product line; dependence on new products.
We expect initially to have a very limited product line: a DVD video featuring
six different ballroom dances. There can be no assurance that our products
will achieve market acceptance. Any such failure could have a material adverse
effect on our business, results of operations, and financial condition. We
believe our ability to increase sales is partially dependent upon our ability
to introduce new and innovative products into its existing markets. The
success of new products depends on a number of factors, including our ability
to develop products that appeal to consumers and that are priced
competitively. There can be no assurance that our efforts to develop new
products will be successful, that consumers will accept new products, or that
our competitors will not introduce products that achieve greater market
acceptance than our products.
We may be dependent on significant retail customers and distributors.
We may sell our products through distributors that resell to retail customers.
We may also seek to establish sales to retail customers. Such distributors and
retail customers would likely purchase our products with standard purchase
orders and, in general, are not bound by long-term contracts. There can be no
assurance that any such distributors and retail customers will establish a
relationship with us. The lack of a distributor or a significant number of
retail customers, or a significant reduction in purchase volume by or
financial difficulty of such customers or distributors could have a material
adverse effect on our business, results of operations, and financial
condition.
13
We may be affected by adverse publicity.
We are highly dependent upon consumers' perception of the quality and possible
benefits of our products. As a result, negative publicity concerning products
similar to our products could lead to a loss of consumer confidence in our
products. Any of these events could have a material adverse effect on our
business, results of operations, and financial condition.
We are subject to all of the complications and difficulties associated with
new enterprises.
We have a limited history upon which an evaluation of our prospects and future
performance can be made. Our proposed operations are subject to all business
risks associated with new enterprises. The likelihood of our success must be
considered in light of the problems, expenses, difficulties, complications,
and delays frequently encountered in connection with the expansion of a
business operation in an emerging industry, and the continued development of
advertising, promotions, and a corresponding customer base. There is a
possibility that we could sustain losses in the future, and there are no
assurances that we will ever operate profitably.
We may undertake acquisitions that could increase our costs or liabilities or
be disruptive.
We do not currently have any commitments, agreements or understandings to
acquire any specific businesses or other material operations, but we will
consider acquisitions in the future. We may not be able to locate suitable
acquisition candidates at prices that we consider appropriate or to finance
acquisitions on terms that are satisfactory to us. If we do identify an
appropriate acquisition candidate, we may not be able to successfully
negotiate the terms of an acquisition, finance the acquisition or, if the
acquisition occurs, integrate the acquired business into our existing
business. Negotiations of potential acquisitions and the integration of
acquired business operations could disrupt our business by diverting
management away from day-to-day operations. Acquisitions of businesses or
other material operations may require additional debt or equity financing,
resulting in additional leverage or dilution of ownership. The difficulties of
integration may be increased by the necessity of coordinating geographically
dispersed organizations, integrating personnel with disparate business
backgrounds and combining different corporate cultures. We also may not
realize expected cost efficiencies or synergies. In addition, we may need to
record write-downs from future impairments of intangible assets, which could
reduce our future reported earnings. If any such acquisition occurs, there can
be no assurance as to the effect thereof on our business, results of
operations, and financial condition.
We may face intellectual property risks.
We will rely on a combination of common law trademark rights, U.S. federal
registration rights, and trade secret laws to protect our proprietary rights.
There can be no assurance that we will be able to enforce our trademark rights
for our products or register trademarks or obtain common law trademark rights
we desire. In addition, we expect to file applications for federal
registration of marks in the United States. Common law trademark rights do not
provide us with the same level of protection as afforded by a United States
federal registration of a trademark. In addition, common law trademark rights
are limited to the geographic area in which the trademark is actually used
plus a reasonable zone of future expansion, while U.S. federal registration on
the Principal Register gives the registrant superior rights throughout the
United States, subject to certain exceptions. We expect to register our
trademarks in certain foreign jurisdictions where our products will be sold.
The protection available in such jurisdictions may not be as extensive as the
protection available to us in the United States.
14
We are dependent on key officers
Our success is significantly dependent on the personal efforts, performance,
abilities, and continued service of Sean Forhan, our Chief Operating Officer.
The loss of service of Sean Forhan could have a material adverse effect on our
business, results of operations, and financial condition. We do not maintain
"key man" life insurance on Mr. Forhan. In addition, our future success
depends upon our ability to attract and retain highly qualified personnel.
Competition for such personnel is intense and there can be no assurance that
we will be able to attract and retain such qualified personnel. A failure to
do so could have a material adverse effect on our business, results of
operations, and financial condition.
We are subject to risks associated with advertising.
Advertising of our products is subject to regulation by the FTC under the
Federal Trade Commission Act, which prohibits unfair or deceptive trade
practices, including dissemination of false or misleading advertising. In
addition, the National Advertising Division of the Council of Better Business
Bureaus, Inc. ("NAD") administers a self-regulatory program by the advertising
industry to ensure truth and accuracy in national advertising. NAD both
monitors national advertising and entertains inquiries and challenges from
competing companies and consumers. Although we do not believe that such
regulations will materially negatively affect our marketing efforts, any
future changes to our advertising resulting from compliance with an adverse
NAD determination or FTC action or fines or penalties assessed in connection
therewith could adversely affect our product marketing efforts, and there can
be no assurance that such required changes in advertising would not have a
material adverse effect on our business, results of operations, and financial
condition.
We are responsible for the indemnification of our officers and directors,
which could result in substantial expenditures.
Our Charter documents provide for the indemnification of our directors,
officers, employees, and agents, under certain circumstances, against
attorney's fees and other expenses incurred by them in any litigation to which
they become a party arising from their association with or activities on
behalf of our company. This indemnification policy could result in substantial
expenditures, which we may be unable to recoup.
Risks Related to the Shares
There is presently no market for our securities and there is no assurance that
one will develop or if developed, be sustained.
There is presently no public market for our securities. Accordingly, the
shares may not be resold unless a Resale Registration Statement is filed and
declared effective by the SEC or an exemption from registration is available.
Similar restrictions on transferability are imposed under the securities or
"blue sky" laws of certain states. As a result of these limitations on
transferability, an investment in the shares should be considered illiquid. If
no market develops for our shares, it may be difficult or impossible for you
to resell your shares if you should desire to do so.
The offering price of the Shares was arbitrarily determined and is not related
to our asset value, projected future value net worth, our financial condition
or our results of operations.
The offering price of the Shares was determined by us in negotiation
arbitrarily and is not related to our asset value, projected future value, net
worth, results of operations, financial condition or any other established
criteria of value. Factors considered by us in determining such prices,
included our history, our business prospects, our assessment of our net worth
and financial condition and our evaluation of our management. The offering
price should in no event, however, be regarded as an indication of any future
market price of our common stock. As a new investor, you will experience
immediate, substantial dilution of the net tangible book value of
15
the shares. Assuming the sale of all of Shares, you will (i) pay a price per
Share that substantially exceeds the value, on a per share basis, of our
assets after we subtract from these assets, our intangible assets and
liabilities; (ii) contribute substantial funds but will only own, in the
aggregate, approximately less than 5% of our outstanding shares, and (iii)
experience further dilution in the net tangible value of your shares as a
result of future issuances of common stock and the conversion or exercise of
securities either outstanding or issued in the future. "Dilution" means the
difference between the offering price per share and the net tangible book
value per share as adjusted for the Offering.
We may not be able to secure the services of a placement agent to assist in
this Offering.
As of the date of this Prospectus, we have not secured the services of a
FINRA-registered broker-dealer to assist it with this Offering as a placement
agent. While we may obtain the services of a FINRA-registered broker-dealer to
serve as a placement agent, there can be no guarantee that we will be
successful in obtaining a broker-dealer or that we will be successful in
selling any Shares offered hereby. This Offering is being conducted solely on
a "best-efforts" basis by our officers and directors.
We will incur professional fees in connection with being a reporting company
under the Securities Exchange Act of 1934, as amended.
Our Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended, or the Exchange Act and as such, we are
required to file 10-K's, 10-Q's and 8-K's and other reports with the
Securities Exchange Commission. We will incur professional fees (i.e.,
attorney, auditors and filing agents) in connection with the preparation and
filing of such reports and we currently anticipate such costs to be $33,500
per year. If we are unable to file such reports, we will be delinquent in our
filings which could adversely affect the marketability of the Shares.
The failure to comply with the internal control evaluation and certification
requirements of Section 404 of Sarbanes-Oxley Act could harm our operations
and our ability to comply with our periodic reporting obligations.
As a reporting company under the Exchange Act, we are required to comply with
the internal control evaluation and certification requirements of Section 404
of the Sarbanes-Oxley Act of 2002. We are in the process of determining
whether our existing internal controls over financial reporting systems are
compliant with Section 404. This process may divert internal resources and
will take a significant amount of time, effort and expense to complete. If it
is determined that we are not in compliance with Section 404, we may be
required to implement new internal control procedures and reevaluate our
financial reporting. We may experience higher than anticipated operating
expenses as well as outside auditor fees during the implementation of these
changes and thereafter. Further, we may need to hire additional qualified
personnel in order for us to be compliant with Section 404. If we are unable
to implement these changes effectively or efficiently, it could harm our
operations, financial reporting or financial results and could result in our
being unable to obtain an unqualified report on internal controls from our
independent auditors, which could adversely affect our ability to comply with
our periodic reporting obligations under the Exchange Act.
Our shares of common stock are deemed to be "penny stocks" with a potential
limited trading market.
There is currently no market for our securities. When our shares of common
stock commence trading, of which no assurances can be given, they will, in all
likelihood, be subject to the "penny stock rules" adopted pursuant to Section
15(g) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act."). The penny stock rules apply to non-NASDAQ companies whose common stock
trades at less than $5.00 per share or companies which have tangible net worth
of less than $5,000,000 ($2,000,000 if the company has been operating for
three or more years). Such rules require, among other things, that brokers who
trade "penny stock" to persons other than" established customers" complete
certain documentation, make suitability inquiries of investors and provide
investors with certain information concerning trading in the security,
including a risk disclosure document and quote and other information under
certain circumstances. Many brokers have
16
decided not to trade" penny stock" because of the requirements of the penny
stock rules and, as result, the number of broker-dealers willing to act as
market makers in such securities is limited. In the event that we remain
subject to the "penny stock rules" for any significant period, there may
develop an adverse impact on the market, if any, for our securities. Because
our securities are subject to the" penny stock rules," investors will find it
more difficult to dispose of our securities. Further, for companies whose
securities are traded in the "Pink Sheets" and/or the Over the Counter
Bulletin Board, it is more difficult: (i) to obtain accurate quotations, (ii)
to obtain coverage for significant news events because major wire services,
such as the Dow Jones News Service, generally do not publish press releases
about such companies, and (iii) to obtain needed capital.
The price of our shares of common stock in the future may be volatile.
If a market develops for our common stock, the market price of our common
stock will likely be volatile and could fluctuate widely in price in response
to various factors, many of which are beyond our control, including:
technological innovations or new products and services by us or our
competitors; additions or departures of key personnel; sales of our common
stock; our ability to integrate operations, technology, products and services;
our ability to execute our business plan; operating results below
expectations; loss of any strategic relationship; industry developments;
economic and other external factors; and period-to-period fluctuations in our
financial results. Because we have a very limited operating history with
limited to no revenues to date, you may consider any one of these factors to
be material. Our stock price may fluctuate widely as a result of any of the
above. In addition, the securities markets have from time to time experienced
significant price and volume fluctuations that are unrelated to the operating
performance of particular companies. These market fluctuations may also
materially and adversely affect the market price of our common stock.
Our management has broad discretion over the use of proceeds from this
Offering, and the failure of management to apply these funds effectively could
seriously harm our business.
Our management will have broad discretion as to how we spend the proceeds from
this Offering, and stockholders may not agree with how we use the proceeds.
You will not have the opportunity to evaluate the economic, financial or other
information on which we base our decisions on how to use the proceeds. We may
not be successful in using the proceeds from this Offering in ways that will
yield favorable operating results.
You will experience immediate dilution of your entire investment and will
experience additional dilution upon our issuance of additional securities.
As of the date of this Prospectus, we have 11,113,750 shares of common stock
issued and outstanding. As a new investor, you will experience immediate,
substantial dilution of the net tangible book value of the shares. Assuming
the sale of all of shares of common stock, you will (i) pay a price per share
that substantially exceeds the value, on a per share basis, of our assets
after we subtract from these assets, our intangible assets and liabilities;
(ii) contribute substantial funds but will only own, in the aggregate,
approximately less than 5% of our outstanding shares, and (iii) experience
further dilution in the net tangible value of your shares as a result of
future issuances of common stock and the conversion or exercise of securities
either outstanding or issued in the future. Assuming all 6,000,000 shares
offered are sold, and the Company receives the maximum estimated proceeds of
this offering from shareholders, Ballroom Dance Fitness's net book value will
be approximately $0.14 per share. Therefore, any investor will incur an
immediate and substantial dilution of approximately $(0.26) per share while
the Ballroom Dance Fitness present stockholders will receive an increase of
$0.14 per share in the net tangible book value of the shares that she holds.
This will result in a 72% dilution for purchasers of stock in this offering.
"Dilution" means the difference between the offering price per share and the
net tangible book value per share as adjusted for the Offering. See the
section entitled "Dilution" in this Prospectus.
17
FORWARD LOOKING STATEMENTS
When used in this Prospectus, the words or phrases "will likely result," "we
expect," "will continue," "anticipate," "estimate," "project," "outlook,"
"could," "would," "may," or similar expressions are intended to identify
forward-looking statements. We wish to caution readers not to place undue
reliance on any such forward-looking statements, each of which speaks only as
of the date made. Such statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical earnings and those presently anticipated or projected. Such risks
and uncertainties include, among others, success in reaching target markets
for products in a highly competitive market and the ability to attract future
customers, the size and timing of additional significant orders and their
fulfillment, the success of our business emphasis, the ability to finance and
sustain operations, the ability to raise equity capital in the future, e and
the size and timing of additional significant orders and their fulfillment. We
have no obligation to publicly release the results of any revisions, which may
be made to any forward-looking statements to reflect anticipated or
unanticipated events or circumstances occurring after the date of such
statements.
DESCRIPTION OF BUSINESS
Organizational History:
Ballroom Dance Fitness, Inc. was incorporated in the state of Florida on
January 2, 2009 and is a development stage company.
The Company's Business:
Fitness DVD's: Our primary purpose and first objective is to create and
produce a DVD which will feature our Chief Operating Officer, Sean Forhan,
teaching six ballroom dances: the Cha-cha, Swing, Salsa, Meringue, Rumba, and
the Waltz. We believe that our DVD will appeal to people who want to either
lose weight or stay in shape while also learning ballroom dancing steps. The
lessons will stress dance steps and use them in exercise routines, building
the lower body, strengthening heart endurance, plus show how the use of hand
free weights will develop and tone the upper body.
To date, we haven't produced any DVDs and we believe that we will need at
least $194,000 to produce our first DVD. If the Company is not successful in
raising at least 25% of the shares in this Offering ($600,000), the Company
will reduce the cost of the DVD by reducing the proposed six dances to four or
five, in order to complete the DVD for sale. We estimate that the cost of the
shortened DVD will be $162,000, saving 15% in editing and production costs. If
we don't sell enough shares in this offering, we might not have enough money
to produce our first DVD and you could lose your money.
We intend to market our DVDs, once completed, through TV infomercials and
through a new consumer website we intend to create specifically for the
marketing of our DVDs. We believe we will need at least $190,000 to create
and produce our first infomercial and to buy air time.
The Company is raising funds to implement its business plan. The amount
raised will have a factor on how we promote and build the business. Assuming
we are successful with 50% raise of $1,200,000, the advertising budget will be
$500,000 vs. 25% raise reduces advertising budget to $70,000. The amount
raised will have a factor on working capital also: a 25% raise ($600,000)
provides $37,709 for working capital, a 50% ($1,200,000) raise provides
$15,709 for working capital, a 75% ($1,800,000) raise provides $23,709 for
working capital and a 100% ($2,400,000) raise provides $203,709 in working
capital
Certified Fitness Instructors: We also intend to offer classes to individuals
who want to become certified Ballroom Dance Fitness trainers and teach
Ballroom Dance Fitness classes. Anyone interested in becoming a Ballroom
Dance Fitness instructor will be required to attend a six hour training class
and to keep their instructor status current. We intend to charge a one-time
fee of around $250 and then charge an annual certification renewal fee.
18
The Company's success is dependent on raising sufficient working capital
necessary for DVD and infomercial production (estimated cost of $250,000) and
for marketing and advertising (estimated at $500,000). Management's goal is
to raise a minimum of 50% of the Prospectus ($1,200,000) to fully implement
the Company's full business plan and sustain its operations for the next 12
months although it would be able to produce its fitness DVD (as discussed in
the prospectus) if it sells 25% of the shares in this offering.
Growth Strategy Objective:
We project to receive revenues by selling Ballroom Dance Fitness DVDs to
consumers that purchase the DVD's online. We intend to use TV infomercials
to promote our DVDs by emphasizing our program's convenience of learning
ballroom dance steps in the comfort of their home. We have interviewed over
ten production companies that have experience in developing DVD's and creating
infomercials to market the DVD's. We have narrowed our choice to three
companies and will select one after we have a minimum of $250,000 to start and
complete the project. We estimate the cost of producing two infomercials (28
minutes and 2 minutes) plus a 45 minute Fitness DVD will cost between
$225,000 and $250,000; based on 5 to 7 days shooting and 6 to 8 talent working
5-6 days. The costs projected are based on actual time required to complete
all fitness routines and editing, the final cost could vary $25,000.
We need to generate working capital to produce the infomercials and DVDs and
have found it difficult to raise money for a start-up company, and more
difficult raising money as a private company. Investors are concerned they
have little opportunity for return on investment as a private company. We
have decided to raise the funding as a public company.
We intend to sell the DVD for $39 for the 6 dance routines. Each dance
exercise will have 3 songs to select from; offering the exerciser 3 different
sounds to appeal to and eliminate boredom from the same song daily.
Ballroom Dance Fitness will market infomercials on TV and videos online. The
repetition of advertising is necessary to confirm the sale, and the Internet
can provide a video demonstration when the viewer wants to watch versus a TV
infomercial they may miss some of the story.
The first objective is accomplished. We've developed a website
www.BallroomDanceFitness.info that tells "About the Company" and offers our
DVD and hyperlinks to products that will be sold online through strategic
partnerships with companies that produce and sell exercise clothing and shoes,
exercise equipment, nutrition products and health foods.
The second objective is to raise funds for working capital, to be used for 1)
production of the ballroom dance fitness DVD; 2) production of TV and Internet
infomercials; 3) kick-off a media buy of TV Infomercials that introduces the
Company and generates revenues. We plan on raising funds by selling Shares in
this offering and to start filming the DVD and infomercials in the third
quarter of 2011.
The third objective is to introduce our DVD to fitness centers, ballroom
studios and exercise clubs throughout the country and to certify instructors
so they too can teach Ballroom Dance Fitness in their respective cities. The
instructors will pay a $250 annual fee to attend our 6-hour training class;
learning the steps and fitness routines to assure success in their respective
hometowns as a Certified Ballroom Dance Fitness instructor. The instructor
will receive a certificate when completing the 1 day course and will receive a
fitness DVD, a shirt with our logo, imprinted hat, and nutrients that are sold
online. We estimate starting the certification programs in the 2nd quarter of
2012.
Competition and Competitive Advantages:
Competition comes from established exercise clubs and fitness videos and from
other fitness and dance companies which have greater resources than we have.
We will face competition from the foregoing and may not be able to penetrate
the marketplace. We believe, however, that our competitive advantage is based
on the fact that unlike exercise clubs, there is no need for travel or ongoing
membership fees to use our product.
19
DESCRIPTION OF PROPERTY
The Company's executive offices are located at 1150 Hillsboro Mile Suite
1004 , Hillsboro Beach Florida 33062.
LEGAL PROCEEDINGS
We are not currently a party to any legal proceedings nor do we have knowledge
of any pending or threatened legal claims.
USE OF PROCEEDS
Selling all of the Shares in the offering will result in $2,400,000 in gross
proceeds to Ballroom Dance Fitness, Inc., less estimated costs of $43,791
associated with this offering consisting of Transfer Agent Fees of $1,750,
Accounting Fees and Expenses of $10,500, Legal Fees and Expenses of $25,000,
Printer Fees of $5,500 and Miscellaneous Expenses of $1,000. After deducting
these estimated costs, the Company will receive a total of $2,356,209 if all
of the Shares are sold in this offering. We expect to disburse the proceeds
from this offering in the priority set forth below within the first 12 months
after successful completion of this offering:
Percentage of Shares Sold in this Offering:
Percentage of Shares Sold in this Offering:
Item: 25% 50% 75% 100%
DVD Production (1) $194,000 $194,000 $194,000 $194,000
Infomercial Production $56,000 $56,000 $56,000 $56,000
Advertising (2) $70,000 $500,000 $900,000 $1,200,000
Consumer Website Development
and Maintenance $45,000 $45,000 $45,000 $45,000
SEC Compliance $33,500 $33,500 $33,500 $33,500
Professional Fees (3) $120,000 $240,000 $360,000 $480,000
Officer Salaries (4) $0 $72,000 $144,000 $144,000
Working Capital (5) $37,709 $15,709 $23,709 $203,709
Total $556,209 $1,156,209 $1,756,209 $2,356,209
(1) The production cost of the DVD is estimated to be $194,000. If the DVD
production costs less than $194,000, the extra money will be put towards
Advertising and Working Capital. If the Company is not successful in raising
at least 25% of the shares in this Offering ($600,000), the Company will
reduce the cost of the DVD by reducing the proposed six dances to four or
five, in order to complete the DVD for sale. We estimate that the cost of the
shortened DVD will be $162,000 with a 15% savings in production and editing.
(2) Our advertising budget will increase based on how much money we raise and
we will spend the increased allotted money on producing and airing more
infomercials and advertising in fitness magazines.
(3) Professional fees consist of fees we will pay to sales people and fitness
instructors. Professional fees will increase based on how much money we raise
in this offering because we will hire more sales people and fitness
instructors
(4) We will pay our officers for six months if $1,200,000 (50%) is raised
and no additional wages will be paid unless cash flow increases from the sale
of DVD. We will pay our full officers' salaries ($72,000 each for a total of
$144,000) if $1,800,000 (75% ) or more is raised.
(5) The amount of available money we have for working capital depends on how
much it cost to produce our DVD.
The Company estimates it will need to sell at least 50% of the offering
($1,200,000), to fully implement the Company's entire business plan and
sustain such operations for the next 12 months although it would be able to
produce its fitness DVD (as discussed in the prospectus) if it sells 25% of
the shares in this offering.
20
PROJECTED INFOMERCIAL BUDGET Estimated Cost:
Planning, Scheduling and Production: talent, ballroom rentals and set design $5,500
Production Equipment & Shooting: lighting, cameras, director and producer $3,500
Photography Professionals: digital imagery $2,000
Graphics: logo design, graphic design and concepts $3,500
Audio: custom music production, copyright fees $3,000
Post Production: multi-cam syncing, color grading, editing, grinding, polish
and proofing. $17,500
Authoring navigation & programming, menu graphics and sequences $4,500
Infomercial Advertising Test Spots: sequence for 30 and 60 and 2 minute spots $3,000
Produce Infomercial $10,000
Consulting: Art Development, production and related business $2,500
TOTAL $56,000
PROJECTED DVD PRODUCTION BUDGET Estimated Cost:
Planning, Scheduling and Production: talent, ballroom rentals and set design $19,500
Production Equipment & Shooting: lighting, cameras, director and producer $15,500
Photography Professionals: digital imagery $7,000
Graphics: logo design, graphic design and concepts $8,500
Audio: custom music production, copyright fees $10,000
Post Production: multi-cam syncing, color grading, editing, grinding, polish
and proofing. $52,500
DVD Authoring: navigation & programming, menu graphics and sequences $7,000
DVD Packaging Design: entrapment design, package insert and design, face
design $2,500
DVD Advertising Test Spots: sequence for 60 and 2 minute spots $15,000
Produce DVD $46,500
Consulting: Art Development, production and related business $10,000
TOTAL $194,000(1)
21
(1) To date, we haven't produced any DVDs and we believe that we will need
$194,000 to produce our first DVD. If the Company is not successful in
raising at least 25% of the shares in this Offering ($600,000), the Company
will reduce the cost of the DVD by reducing the proposed six dances to four or
five, in order to complete the DVD for sale. We estimate that the cost of the
shortened DVD will be $162,000, with a 15% savings in production and editing
cost.
DETERMINATION OF OFFERING PRICE
The $0.40 per share offering price of our Common Stock was determined based on
our internal assessment of what the market would support. There is no
relationship whatsoever between this price and our assets, earnings, book
value or any other objective criteria of value.
Upon the effectiveness of the registration statement on Form S-1 of which this
prospectus is a part, we intend to solicit a broker-dealer to apply to FINRA
to have our Common Stock listed on the OTC Bulletin Board. If our Common Stock
becomes listed on the OTC Bulletin Board and a market for the stock develops,
the actual price of stock will be determined by prevailing market prices at
the time of sale. The offering price would thus be determined by market
factors outside of our control.
DILUTION
Upon purchasing share in this offering, you will experience immediate and
substantial dilution.
"Dilution" represents the difference between the offering price of the shares
of Common Stock and the net book value per share of Common Stock immediately
after completion of the offering. "Net Book Value" is the amount that results
from subtracting total liabilities from total assets. In this offering, the
level of dilution is increased as a result of the relatively low book value of
Ballroom Dance Fitness's issued and outstanding stock. This is due in part
because of the Common Stock issued to the Ballroom Dance Fitness officers,
directors, and employees totaling 6,000,000 shares at par value $0.0001 per
share versus the current offering price of $0.40 per share. Ballroom Dance
Fitness's net book value on December 31,2010 was $(0.00). Assuming all
6,000,000 shares offered are sold, and in effect Ballroom Dance Fitness
receives the maximum estimated proceeds of this offering from shareholders,
Ballroom Dance Fitness's net book value will be approximately $0.14 per share.
Therefore, any investor will incur an immediate and substantial dilution of
approximately $(0.72) per share while the Ballroom Dance Fitness present
stockholders will receive an increase of $0.14 per share in the net tangible
book value of the shares that she holds. This will result in a 72% dilution
for purchasers of stock in this offering.
This table represents a comparison of the prices paid by purchasers of the
Common Stock in this offering and the individual who received shares in
Ballroom Dance Fitness, Inc. previously:
Maximum
Offering
Book Value Per Share Before the Offering $0.00
Book Value Per Share After the Offering $0.14
Net Increase to Original Shareholders $0.14
Decrease in Investment to New Shareholders $(0.26)
Dilution to New Shareholders (%) 72%
22
PLAN OF DISTRIBUTION
The Shares will be Sold by Our Officer and Director
This is a self-underwritten "best-efforts" 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. There are no plans or arrangements
to enter into any contracts or agreements to sell the Shares with a broker or
dealer and our officers and directors are not brokers or dealers or associated
persons. Our officers and directors will sell the shares and intends to offer
them to friends, family members and personal and professional acquaintances.
In offering the securities on our behalf, they will rely on the safe harbor
from broker dealer registration set out in Rule 3a4-1 under the Securities
Exchange Act of 1934. In their endeavors to sell this offering, neither Sean
nor William Forhan intends to use any mass-advertising methods such as the
Internet or print media.
Sean Forhan and William Forhan will not register as a broker-dealer pursuant
to Section 15 of the Securities Exchange Act of 1934, in reliance upon Rule
3a4-1, which sets forth the conditions under which a person associated with an
Issuer, may participate in the offering of the Issuer's securities and not be
deemed to be a broker-dealer.
a. Our officers and directors and are not subject to a statutory
disqualification, as that term is defined in Section 3(a)(39)of the Act, at
the time of their participation; and
b. Our officers and directors and will not be compensated in connection
with their participation by the payment of commissions or other remuneration
based either directly or indirectly on transactions in securities; and
c. Our officers and directors and are not, nor will they be at the time of
their participation in the offering, associated persons of a broker-dealer;
and
d. Our offices and directors and meet the conditions of paragraph
(a)(4)(ii) of Rule 3a4-1 of the Exchange Act, in that they (A) primarily
perform, or are intended primarily to perform at the end of the offering,
substantial duties for or on behalf of our Company, other than in connection
with transactions in securities; and (B) are brokers or dealers, or been
associated person of a broker or dealer, within the preceding twelve months;
and (C) have not participated in selling and offering securities for any
issuer more than once every twelve months other than in reliance on Paragraphs
(a)(4)(i) (a) (4) (iii).
Our officers, directors, control persons and affiliates of same do not intend
to purchase any shares in this offering.
Terms of the Offering
The Company is offering on a best-efforts basis 6,000,000 shares of its Common
Stock at a price of $0.40 per share. This is the initial offering of Common
Stock of Ballroom Dance Fitness and no public market exists for the securities
being offered. The Company is offering the shares on a "self-underwritten,"
directly through officers and directors. The shares will be offered at a fixed
price of $0.40 per share for a period not to exceed 180 days from the date of
this Prospectus. There is no minimum number of shares required to be
purchased. This offering is on a best effort basis. No commission or other
compensation related to the sale of the shares will be paid to our officer and
director. The intended methods of communication include, without limitations,
telephone, and personal contact.
The offering shall terminate on the earlier of (i) the date when the sale of
all 6,000,000 shares is completed or (ii) one hundred and eighty (180) days
from the date of this Prospectus. The Company will not extend the offering
period beyond one hundred and eighty (180) days from the effective date of
this Prospectus.
23
There can be no assurance that any of the shares will be sold. As of the date
of this Prospectus, the Company has not entered into any agreements or
arrangements for the sale of the shares with any broker/dealer or sales
agent. However, if Ballroom Dance Fitness were to enter into such
arrangements, Ballroom Dance Fitness will file a post effective amendment to
disclose those arrangements because any broker/dealer participating in the
offering would be acting as an underwriter and would have to be so named in
the Prospectus.
In order to comply with the applicable securities laws of certain states, the
securities may not be offered or sold unless they have been registered or
qualified for sale in such states or an exemption from such registration or
qualification requirement is available and with which the Company has
complied. The purchasers in this offering and in any subsequent trading market
must be residents of such states where the shares have been registered or
qualified for sale or an exemption from such registration or qualification
requirement is available. As of the date of this Prospectus, Ballroom Dance
Fitness has not identified the specific states where the offering will be
sold. Ballroom Dance Fitness will file a pre-effective amendment indicating
which state(s) the securities are to be sold pursuant to this registration
statement.
Deposit of Offering Proceeds
The proceeds from the sale of the shares in this offering will be payable to
Ballroom Dance Fitness Inc. and the funds will be used as the officers of the
company determine, in the best interest in growing the business.
Procedures and Requirements for Subscription
Prior to the effectiveness of the Registration Statement, the Company has not
provided potential purchasers of the securities being registered herein with a
copy of this Prospectus. Investors can purchase Common Stock in this offering
by completing a Subscription Agreement and sending it together with payment in
full to Ballroom Dance Fitness Inc. All payments are required in the form of
United States currency either by personal check, bank draft, or by cashier's
check. There is no minimum subscription requirement. All subscription
agreements and checks are irrevocable. Ballroom Dance Fitness reserves the
right to either accept or reject any subscription. Any subscription rejected
within this 30-day period will be returned to the subscriber within five
business days of the rejection date. Furthermore, once a subscription
agreement is accepted, it will be executed without reconfirmation to or from
the subscriber. Once Ballroom Dance Fitness accepts a subscription, the
subscriber cannot withdraw it.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The names and ages of our Directors and Executive Officers are as follows:
Name Age Position Date Elected to Position
Sean Forhan 36 Founder, January 2, 2009
Chief Operating Officer and
Director
William G. Forhan 66 Chief Executive Officer,
and Director Chairman January 2, 2009
BIOGRAPHIES:
Sean Forhan has been serving as the Company's Chief Operating Officer since
the Company's formation on January 2, 2009. He has taught ballroom dancing in
Michigan and Florida for past 14 years and has participated in training at
Zumba classes and became a certified Zumba instructor. From June 1993 to June
1998, Sean was a Ballroom instructor at Fred Astaire studios. From April 2003
to December 2007, Sean worked at Buy Owner Realty as Customer Service Manager
focusing on Real Estate Internet Advertising. From January 2008 to December
2008, Sean gave private dance lessons and managed fitness studio in Coconut
Creek, Florida.
24
From January 2008 to December 2008, Sean continued private dance lessons and
began to move from ballroom dancing to Fitness, managing a Fitness studio in
Coconut Creek, Florida and teaching fitness to weight conscious students that
had an interest in learning Ballroom steps and losing weight.
William G. Forhan has been serving as the Company's Chief Executive Officer
since January 2, 2009. Since July 19, 2005, William has also been serving as
the Chief Executive Officer of Casino Players, Inc. (a reporting company).
From July 2008 to July 2009, Mr. Forhan provided consulting services to Next
Interactive, Inc., an OTCBB company (OTCBB: NXOI) specializing in travel
services. From July 2002 until June 2008, Mr. Forhan served as the Chief
Executive Officer and Co-Chairman of Invicta Group, Inc. (OTCBB: IVIT), an
Internet Media company that sells advertising online to travel suppliers
(hotels, tourist boards, tour operators and Cruise Lines). All companies were
subsequently sold to private companies. Mr. Forhan is currently serving as the
Chief Executive Officer of Casino Players, Inc., a reporting company.
Family Relationships. William Forhan is the father of Sean Forhan.
Sean's extensive experience as a ballroom dance instructor and as a licensed
fitness instructor is vital to the Company's success. We believe that Sean's
service as an officer and as director to the Company are pivotal to the
Company's success.
William's extensive business experience as an officer of various public
entities qualifies him to serve as a director of the Company's Board of
Directors. William's knowledge of the SEC rules and regulations and knowledge
of the public market qualifies him to serve as an officer and board member of
the Company.
DIRECTOR AND OFFICER COMPENSATION
Officer Compensation
We have not paid any salary, bonus or other compensation to our officers and
directors since our inception. Management will receive wages from the
proceeds ($72,000 each for a total of $144,000) of this offering after the
first $1,200,000 (50%) is raised.
Director Compensation
The Board of Directors have received stock for services rendered and once the
offering is completed, will paid $1,000 per meeting (quarterly).
Stock Option Grants
The Company has never issued any stock options to officers, employees or
otherwise.
Employment Agreements
We currently have employment agreements with CEO William Forhan and COO Sean
Forhan paying salaries of $72,000 a year. The officers have not received
compensation to date. They will not be paid until we have raised $1,200,000
(50%) in proceeds from this offering. The officers are not receiving deferred
wages. The term of the contracts are for 3 years and renewed unless the Board
wants to terminate the agreements.
Significant Employees
We have no significant employees other than our executive officers and
directors named in this Prospectus. We conduct our business through agreements
with consultants and arms-length third parties.
25
Committees of the Board of Directors
Our audit committee presently consists of our two officers and directors. We
do not have a compensation committee, nominating committee, an executive
committee of our board of directors, stock plan committee or any other
committees.
Code of Ethics
We have adopted a Code of Ethics and Code of Business Conduct that applies to
our officers and directors, and critical employees. The Code of Ethics and
Code of Business Conduct are attached to this registration statement as
Exhibits 14.1 and 14.2, respectively.
Term of Office
Our director is appointed for a one-year term to hold office until the next
annual general meeting of our stockholders or until removed from office in
accordance with our bylaws.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Company's directors and
officers, and persons who beneficially own more than 10% of a registered class
of the Company's equity securities, to file reports of beneficial ownership
and changes in beneficial ownership of the Company's securities with the SEC
on Forms 3, 4 and 5. Officers, directors and greater than 10% stockholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on the Company's review of the copies of the forms received by it
during the period from January 2, 2009 (inception) to the date of this
Prospectus and written representations that no other reports were required,
the Company believes that no person who, at any time during such fiscal year,
was a director, officer or beneficial owner of more than 10% of the Company's
Common Stock failed to comply with all Section 16(a) filing requirements
during such fiscal year.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding beneficial ownership as
of the date of this Prospectus of our common stock, by any person who is known
to us to be the beneficial owner of more than 5% of our voting securities and
by each Officer and Director of the Company. As of the date of this
Prospectus, we had 11,113,750 shares of common stock issued and outstanding.
26
Name and Position Shares of Common Stock Percentage of Class (Common)
Sean Forhan
Chief Operating Officer and Director
c/o Ballroom Dance Fitness, Inc.
700 W Hillsboro Blvd.
Suite 2-102
Deerfield, Florida 33441 6,000,000 53.99%
William Forhan
Chief Executive Officer and Chairman
c/o Ballroom Dance Fitness, Inc.
700 W Hillsboro Blvd.
Suite 2-102
Deerfield, Florida 33441 2,000,000 18.00%
Global Financial Group II Inc. (1)
700 W Hillsboro Blvd.
Suite 2-102
Deerfield, Florida 33441 2,000,000 18.00%
All officers and directors
as a group (2 persons) 8,000,000 72%
(1) Stephan Inezedy has voting and dispositive control over Global Financial
Group II Inc.
DESCRIPTION OF SECURITIES
The following description of certain matters relating to our securities does
not purport to be complete and is subject in all respects to applicable
Florida law and to the provisions of our certificate of incorporation
("Certificate of Incorporation") and By-laws (the "By-Laws").
Capitalization
Our authorized capital consists of 100,000,000 shares of common stock, par
value $0.0001per share.
No shares of Preferred Stock are authorized as of the date of this Prospectus.
Common Stock
We have authorized 100,000,000 shares of common stock, par value $0.0001 per
share. Prior to this offering, there were a total of 11,113,750 shares of
common stock issued and outstanding. Each share of our common stock is
entitled to one vote at all meetings of our stockholders. Our stockholders are
not permitted to cumulate votes in the election of directors. All shares of
our common stock are equal to each other with respect to liquidation rights
27
and dividend rights. There are no preemptive rights to purchase any additional
shares of our common stock. In the event of our liquidation, dissolution or
winding up, holders of our common stock will be entitled to receive, on a pro
rata basis, all of our assets remaining after satisfaction of all liabilities
and preferences of outstanding preferred stock, if any. Neither our
Certificate of Incorporation nor our By-Laws contain any provisions which
limit or restrict the ability of another person to take over our company;
however, our By-Laws do permit our Board of Directors to be classified.
There is no active market for our Common Stock.
Currently, there is no active trading market for our Common Stock. Following
the effectiveness of this registration statement, we intend to request that a
broker-dealer/market maker submit an application to make a market for our
Common Stock shares on the OTC Bulletin Board. There can be no assurance,
however, that the application will be accepted or that any trading market will
ever develop or be maintained on the OTC Bulletin Board. Any trading market
that may develop in the future for our Common Stock will most likely be very
volatile and numerous factors beyond our control may have a significant effect
on the market. Only companies that report their current financial information
to the SEC may have their securities included on the OTC Bulletin Board.
Therefore, only upon the effective date of this registration statement will
our Common Stock become eligible to be quoted on the OTC Bulletin Board. In
the event that we lose our status as a "reporting issuer," any future
quotation of our Common Stock on the OTC Bulletin Board may be jeopardized.
Dividend Policy
We have never declared or paid any cash dividends on our Common Stock. We
currently intend to retain future earnings, if any, to finance the expansion
of our business. As a result, we do not anticipate paying any cash dividends
in the foreseeable future.
Share Purchase Warrants
We have not issued and do not have outstanding any warrants to purchase shares
of our Common Stock.
Options
We have not issued and do not have outstanding any options to purchase shares
of our Common Stock.
Convertible Securities
We have not issued and do not have outstanding any securities convertible into
shares of our Common Stock or any rights convertible or exchangeable into
shares of our Common Stock.
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this Prospectus as having prepared or certified
any part of this Prospectus or having given an opinion upon the validity of
the securities being registered or upon other legal matters in connection with
the registration or offering of the Common Stock was employed on a contingency
basis, or had, or is to receive, in connection with the offering, a
substantial interest, direct or indirect, in our company or any of its parents
or subsidiaries. Nor was any such person connected with our company or any of
its parents or subsidiaries as a promoter, managing or principal underwriter,
voting trustee, director, officer, or employee.
EXPERTS
Diane D. Dalmy, Attorney at Law, has assisted us in the preparation of this
Prospectus and registration statement and will provide counsel with respect to
other legal matters concerning the registration and offering of the Common
Stock. Ms. Dalmy has consented to being named as an expert in the Company's
registration statement, of which this Prospectus forms a part. This consent
has been filed as an exhibit to the registration statement.
28
Malcolm Pollard CPA our certified public accountants, have audited our
financial statements included in this Prospectus and registration statement to
the extent and for the periods set forth in their audit reports. Malcolm
Pollard has presented its report with respect to our audited financial
statements. The report of Malcom Pollard CPA included in reliance upon
their authority as experts in accounting and auditing. Their consent to being
named as Experts is filed as Exhibit 23.1 to the Registration Statement of
which this Prospectus is a part.
The financials have been reviewed for nine months ended September 30, 2011 by
current PCAOB auditor Hamilton, PC, as Malcolm Pollard retired September 30,
2011 and did not review the current quarter. The consent of Hamilton, PC
being named as Experts is filed as Exhibit 23.3 to the Registration Statement
of which this Prospectus is a part.
DISCLOSURE OF COMMISSION POSITION OF
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Our Articles of Incorporation and Bylaws provide no director shall be liable
to the corporation or any of its stockholders for monetary damages for breach
of fiduciary duty as a director, except with respect to (1) a breach of the
director's duty of loyalty to the corporation or its stockholders, (2) acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (3) liability which may be specifically defined by
law or (4) a transaction from which the director derived an improper personal
benefit, it being the intention of the foregoing provision to eliminate the
liability of the corporation's directors to the corporation or its
stockholders to the fullest extent permitted by law. The corporation shall
indemnify to the fullest extent permitted by law each person that such law
grants the corporation the power to indemnify.
We have been advised that, in the opinion of the SEC, indemnification for
liabilities arising under the Securities Act 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 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 legal
counsel, submit the question of whether such indemnification is against public
policy to a court of appropriate jurisdiction.
ORGANIZATION WITHIN LAST FIVE YEARS
See "Certain Relationships and Related Transactions."
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
You should read the following discussion together with our consolidated
financial statements and the related notes included elsewhere in this
Prospectus. This discussion contains forward-looking statements, which involve
risks and uncertainties. Our actual results may differ materially from those
we currently anticipate as a result of many factors, including the factors we
describe under "Risk Factors," "Special Note Regarding Forward-Looking
Statements" and elsewhere in this Prospectus.
Forward Looking Statements
Some of the information in this section contains forward-looking statements
that involve substantial risks and uncertainties. You can identify these
statements by forward-looking words such as "may," "will," "expect,"
"anticipate," "believe," "estimate" and "continue," or similar words. You
should read statements that contain these words carefully because they:
* discuss our future expectations;
* contain projections of our future results of operations or of our
financial condition; and
* state other "forward-looking" information.
We believe it is important to communicate our expectations. However, there may
be events in the future that we are not able to accurately predict or over
which we have no control. Our actual results and the timing of certain events
could differ materially from those anticipated in these forward-looking
statements as a result of certain factors, including those set forth under
"Risk Factors," "Business" and elsewhere in this Prospectus. See "Risk
Factors."
29
Unless stated otherwise, the words "we," "us," "our," "the Company" or
"Ballroom Dance Fitness Impact" in this Prospectus collectively refers to the
Company, Ballroom Dance Fitness, Inc.
Organizational History
Ballroom Dance Fitness, Inc. was incorporated in the state of Florida on
January 2, 2009 and is a development stage company. The Company's Founder and
Chief Operating Officer, Sean Forhan, has taught Ballroom dancing in Michigan
and Florida for over the past 14 years and has participated in training at
Zumba classes and became a certified Zumba instructor. He has expanded that
experience and added his own fitness program to create Ballroom Dance Fitness.
Sean's dance experience includes teaching for the franchised dance studios of
Fred Astaire and Arthur Murray along with teaching at independent dance
studios. Sean has taught his Ballroom Dance Fitness classes at local community
centers, gyms and the YMCA.
The Company's Business:
Fitness Videos: The Company's primary business will be to create videos (DVDs)
that promote "Fun Exercise" to Ballroom Dance and fitness enthusiasts.
The videos (DVDs) will be designed for individuals that want to lose weight
and also learn Ballroom Dance steps. The videos will focus on beginner
ballroom dance steps, building the lower body, strengthening heart endurance,
plus show how the use of hand free weights will develop and tone the upper
body.
The Company intends to offer six dances all on one video for $39.95. Dances
featured will be: the Cha-cha, Swing, Salsa, Meringue, Rumba, and the Waltz.
The Company's success is dependent on raising sufficient working capital
necessary for DVD and infomercial production (estimated cost of between
$225,000 and $250,000) and $500,000 for marketing and advertising.
Management's goal is to raise a minimum of 50% of the Prospectus ($1,200,000)
to implement the business plan and to sustain such operations for the next 12
months although it would be able to produce its fitness DVD (as discussed in
the prospectus) if it sells 25% of the shares in this offering.
Certified Fitness Instructors: The Company will offer fitness trainers and
ballroom dance instructors an opportunity to become certified as a Ballroom
Dance Fitness instructor after completing a six hour training session with
Sean. The certified trainer will offer Ballroom Dance Fitness classes in
his/her city and keep all of the revenue. Instructors will pay a one-time fee
of $250 to become certified. There will be an annual renewal fee of $175 to
keep the certification active.
PROPOSED MILESTONES
Our proposed milestones assume that we raise at least $500,000 in this
offering.
First Quarter 2012: The Company intends to further develop its website:
www.BallroomDanceFitness.info that will offer online purchasing of fitness
clothing, shoes, nutrients and our DVD. We will target manufacturers of
fitness clothing, shoes and nutrients to advertise on our website and to
provide a hyperlink to us on their respective websites.
30
Second Quarter 2012: The Company intends to create a media buy and schedule to
start broadcasting infomercials.. BDF will start production of the fitness DVD
and the infomercials that promotes the Company's website and DVD.
Third Quarter 2012: The Company intends to complete the production of the
fitness DVD and infomercials, and start broadcasting on the Internet and
broadcasting TV infomercials. Internet infomercials will be done via streaming
videos promoting fitness our DVD to the Internet viewer via banner ads titled
Ballroom Dance Weight Loss. The cost of the banner ads has yet to be
determined.
Third Quarter 2012: The Company intends to complete 90 days' of advertising on
TV and the Internet. The Company will also seek strategic Internet partners to
promote the DVD and the Company's website. BDF will contact retail chains to
sell the Company's DVDs, creating consumer awareness and increased revenues.
The Company intends to announce a calendar for Certification of fitness
instructors in the Southeast United States and start the one-day Certification
programs.
Fourth Quarter 2012: The Company intends to focus on hiring additional
certifying fitness instructors to train customers in the Midwest and Northeast
United States and winding down the TV ad campaign by November 2011. Management
will hire PR companies to introduce Sean (COO and Instructor) to TV talk shows
that are seeking guests to promote weight loss and dancing. The Company
intends to continue its Certification of fitness instructors throughout the
year, expanding to the Southwest and western states.
The Company's success will encourage fitness instructors to become Certified
Ballroom Dance Fitness Instructors, via Certification seminars. The new
certified instructors will become teachers and operate their fitness classes
to exercisers, promoting Ballroom Dance Fitness. The company will target the
Midwest and Northeast marketplaces for Certification, cold weather markets,
offering seminars in Boston, NYC, Detroit and Chicago.
Regardless if we sell 25%, 50%, 75% or 100% of this offering, we intend to use
from $225,000 to $250,000 to produce the dance fitness DVD and infomercial
and $45,000 to further develop and maintain a consumer website and $33,500 to
maintain our public company status. The only line items which will change
depending on how much we raise will be Advertising, Capitalization and
Professional Fees and Working Capital. Our advertising budget will increase
based on how much money we raise and we will spend the increased allotted
money on producing and airing more infomercials and advertising in fitness
magazines. Our Advertising budget will be used primarily TV infomercials,
known as Direct Response TV. Advertising varies based on the time of airing
and local versus national airing. We estimate we will need $110,000 to
purchase 7,000 regional two minute spots ($10 for 2 minutes); and twenty eight
national spots ($5,000 each) of 28 minutes. We estimate that $515,000 will
purchase 26,500 two minute regional spots and 50 eight spots. Projections are
based on current rates and are subject to change. Professional fees will also
increase based on how much money we raise in this offering because we will
hire more sales people and fitness instructors. We intend to pay our
company's officers' salaries ($72,000 each for a total of $144,000) once we
raised $1,200,000 (50%) in this offering.
Industry Trends and the Marketplace:
Albert Einstein College of Medicine in New York City studied 469 people over
age 75 and found that ballroom dancing was associated with a lowered risk of
dementia. The mentally challenging aspects of dancing, following complex
dance steps, moving in time and staying with the rhythm of music, is believed
to be responsible (Source: New England Journal of Medicine, "Use it or Lose it
- Do Effortful Mental Activities Protect against Dementia" (J.T. Coyle, June
19, 2003).
31
Results of Operations
Our net loss for the nine month period ended September 30, 2011 was ($5,545)
compared to a net loss of ($9,643) during the nine month period
ended e September 30, 2010. During the nine month period ended September 30,
2011,we generated revenue of $ 7,302 compared to generation of revenue of
$10,650 during the nine month period ended September 30, 2010. Our revenues
consisted of fitness classes and private ballroom lessons. In the future, we
will focus on revenues to be generated from our fitness DVD and website
accessory orders. The fitness classes and private dance lessons are not
recurring revenues items.
During the nine month period ended September 30, 2011, we incurred operating
expenses of $12,847 compared to $20,293 incurred during the nine month period
ended September 30, 2010. The decrease in operating expenses was primarily
attributable to the following items: (i) office expense of $3,000 and
reduction in professional fees of $5,748.
Therefore, our net loss for the nine month period ended September 30, 2011
was ($5,545) or ($0.00) per share compared to a net loss ($9,643) or $0.00
per share incurred during the nine month period ended September 30, 2010.
Results for the year December 31, 2010 cash balance was $676 compared to
2009 cash balance of $4; assets in 2010 were $676 compared to December 31,
2009 assets of $4; liabilities December 31, 2010 were $10,156 compared to
$256 in December 31, 2009. The accumulated deficit December 2010 was
$(22,346) compared to $(11,258) in December 31, 2009. The accumulated
deficit increase was due to less revenues for the year, the deficit will
increase in 20011 and beyond, if financing is not available to implement
the business plan. The operating results for year end 2010 showed revenues
of $14,879 and loss of $(11,088) compared to the period January 20, 2009
(inception)through December 31, 2009 revenues of $4,175 and loss of
$(11,258).
Liquidity and Capital Resources
As of September 30, 2011, our current assets were $1,952 and our current
liabilities were $16,978 which resulted in a working capital deficit of
$($27,892). As of September 30, 2011, current assets were comprised of
$1,952 in cash. As of September 30, 2011, current liabilities were comprised
of: (i) $8,750 in accounts payable; and (ii) $8,228 due to shareholders.
Stockholders' equity (deficit) increased from ($9,480) for fiscal year ended
December 31, 2010 to ($15,026) for the nine month period ended September
30, 2011.
Cash Flows from Operating Activities
We have not generated positive cash flows from operating activities. For the
nine month period ended September 30, 2011, net cash flows from operating
activities was $1,276 compared to ($1,533) provided from operating activities
for the nine month period ended September 30, 2010. Net cash flows used in
operating activities consisted primarily of a net loss of ($5,545).
Cash Flows from Investing Activities
For the nine month periods ended September 30, 2011 and September 30, 2010,
net cash flows used in investing activities was $-0-.
Cash Flows from Financing Activities
For the nine month periods ended September 30, 2011 and September 30, 2010,
net cash flows used in financing activities was $-0- as compared to $1,750.
32
Plan of Operation
At September 30, 2011, we had $1,952 cash on hand, liabilities totaling
$16,978 and a stockholders' deficit of ($15,026). In their audit report, dated
June 14, 2011, our auditors have expressed their doubt as to our ability to
continue as a going concern. To date, the Company has financed its operations
from non-interest bearing demand loans from the Company's Chief Executive
Officer, William G. Forhan, totaling $8,228. These loans are not pursuant to
any written agreement. The Company has agreed to repay such loans upon the
receipt of sufficient capital.
At our current state of operations, we need roughly $500,000 for the next 12
months although we only need from $225,000 to $250,000 to produce a fitness
DVD and an infomercial. To date, we haven't produced any DVDs and we believe
that we will need at least $194,000 to produce our first DVD. If the Company
is not successful in raising at least 25% of the shares in this Offering
($600,000), the Company will reduce the cost of the DVD by reducing
the proposed six dances to four or five, in order to complete the DVD for
sale. We estimate that the cost of the shortened DVD will be $162,000, saving
15% in editing and production costs. If we don't sell enough shares in this
offering, we might not have enough money to produce our first DVD and you
could lose your money. To commence implementing our business plan, we will
need an additional $500,000. We will depend on generating sufficient proceeds
from this offering to fund our operations. We will also need to raise
additional capital by the issuance of securities and from loans. In the event
the Company is not successful in selling any shares in this offering, the
Company's Chief Executive Officer has verbally agreed to continue to fund the
company's operations until any such funding can be raised. There is no
written agreement between the Company and the CEO which requires him to fund
our operations.
The 6,000,000 shares offered by the Company in his offering is a self-
underwritten, best efforts basis, there is no minimum share purchase
requirement and there is no guarantee as to the amount of proceeds that will
result from this offering, if any. If we do not raise sufficient amount of
funds from this offering and/or subsequent private and public offerings and/or
receive loans, we might have to cease operations.
There is no assurance that the net proceeds will be received in time to meet
our needs. Our board of directors reserves the right to reallocate the use of
proceeds to meet unforeseen events. Pending their use, the Company may deposit
proceeds in commercial bank accounts or invest them in money market funds for
short-term government obligations.
Off -Balance Sheet Operations
The Company does not have any off-balance sheet operations.
33
CRITICAL ACCOUNTING POLICIES
Accounting Policies and Estimates
The preparation of our financial statements in conformity with accounting
principles generally accepted in the United States of America requires our
management to make certain estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Our management
periodically evaluates the estimates and judgments made. Management bases its
estimates and judgments on historical experience and on various factors that
are believed to be reasonable under the circumstances. Actual results may
differ from these estimates as a result of different assumptions or
conditions.
As such, in accordance with the use of accounting principles generally
accepted in the United States of America, our actual realized results may
differ from management's initial estimates as reported. A summary of
significant accounting policies are detailed in notes to the financial
statements which are an integral component of this filing.
Revenue Recognition
The Company recognizes revenue in accordance with the Securities and Exchange
Commission, Staff Accounting Bulletin (SAB) No. 104, "Revenue Recognition"
("SAB No. 104"). SAB 104 clarifies application of generally accepted
accounting principles related to revenue transactions. The Company also
follows the guidance in FASB Accounting Standards Codification (ASC) Topic
605-25, Revenue Arrangements with Multiple Deliverables (formerly "EITF Issue
No. 00-08-1"), in arrangements with multiple deliverables.
The Company recognizes revenues when all of the following criteria are met:
(1) persuasive evidence of an arrangement exists, (2) delivery of products and
services has occurred, (3) the fee is fixed or determinable and (4)
collectability is reasonably assured.
The Company will receive revenue for distribution and sale of videos and DVDs.
In addition the Company will provide certification to trainers and instructors
to be instructors and charge upfront fees and annual fees to maintain
certification.
Explicit return rights are not offered to customers; however, the Company may
accept returns in limited circumstances. There have been no returns through
July 2011. Therefore, a sales return allowance has not been established
since management believes returns will be insignificant.
Segment Information
The Company does not have separately reportable segments as defined by ASC
280, Disclosures about Segments of a Enterprise and Related Information.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND CORPORATE GOVERNANCE
On January 29, 2009, the Company issued 6,000,000 shares of Common Stock, par
value $0.0001, to Sean Forhan for an aggregate of $600 as founder stock. The
Company relied on the registration exemption available to the Company under
Section 4(2) of the Securities Act of 1933, as amended, due to the fact that
it was one issuance to one person and that person was a founder of the
Company.
On January 29, 2009, the Company issued 2,000,000 shares of Common Stock, par
value $0.0001, to William Forhan for an aggregate of $200 as founder stock.
The Company relied on the registration exemption available to the Company
under Section 4(2) of the Securities Act of 1933, as amended, due to the fact
that it was one issuance to one person and that person was a founder of the
Company.
34
On February 26, 2009, the Company issued 5,000 shares of Common Stock, at
$0.20 per share, to Karen Krystyan (Sean's mother) for an aggregate of $1,000
as common stock. The Company sold these shares of Common Stock under the
exemption from registration provided by Section 4(2) of the Securities Act of
1933, as amended, due to the fact that it was an isolated issuance to one
person and that person was an immediate family member of the one of the
Company's founders. No material was provided to the investor in connection
with this sale.
On March 15, 2010, the Company issued a total of 250,000 shares of Common
Stock to Clark Forhan for aggregate cash consideration of $25.00. The Company
sold these shares of Common Stock under the exemption from registration
provided by Section 4(2) of the Securities Act of 1933, as amended, due to the
fact it was an isolated issuance to one person and that person was an
immediate family member of the Company's founders. No material was provided to
the investor in connection with this sale.
To date, the Company has financed its operations from non-interest bearing
demand loans from the Company's Chief Executive Officer, William G. Forhan,
totaling $2,156. These loans are not pursuant to any written agreement. The
Company has agreed to repay such loans upon the receipt of sufficient capital.
INDEMNIFICATION
Pursuant to the Articles of Incorporation and By-Laws of the Company, 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
indemnification is intended to be to the fullest extent permitted by the laws
of the State of Florida.
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
person in connection with the securities being registered, we will, unless in
the opinion of our counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification is against public policy as expressed in the Securities
Act, and we will be governed by the final adjudication of such issue.
Director Independence
Our determination of independence of our directors is made using the
definition of "independent director" contained under NASDAQ Marketplace Rule
4200(a)(15), even though such definitions do not currently apply to us because
we are not listed on NASDAQ. Our officers are also our directors therefore are
not "independent" under this rule.
The OTCBB on which we intend to have our shares of Common Stock quoted does
not have any director independence requirements. In determining whether our
directors are independent, we refer to NASDAQ Stock Market Rule 4200(a)(15).
Based on those widely-accepted criteria, we have determined that our
Director(s) are not independent at this time.
No member of management is or will be required by us to work on a full time
basis. Accordingly, certain conflicts of interest may arise between us and our
officer(s) and director(s) in that they may have other business interests in
the future to which they devote their attention, and they may be expected to
continue to do so although management time must also be devoted to our
business. As a result, conflicts of interest may arise that can be resolved
only through their exercise of such judgment as is consistent with each
officer's understanding of his/her fiduciary duties to us.
35
The Sarbanes-Oxley Act of 2002, as well as rule changes proposed and enacted
by the SEC, the New York and American Stock Exchanges and the Nasdaq Stock
Market, as a result of Sarbanes-Oxley, require the implementation of various
measures relating to corporate governance. These measures are designed to
enhance the integrity of corporate management and the securities markets and
apply to securities that are listed on those exchanges or the Nasdaq Stock
Market. Because we are not presently required to comply with many of the
corporate governance provisions and because we chose to avoid incurring the
substantial additional costs associated with such compliance any sooner than
legally required, we have not yet adopted these measures.
Because none of our directors are independent directors, we do not currently
have independent audit or compensation committees. As a result, these
directors have the ability, among other things, to determine their own level
of compensation. Until we comply with such corporate governance measures,
regardless of whether such compliance is required, the absence of such
standards of corporate governance may leave our stockholders without
protections against interested director transactions, conflicts of interest,
if any, and similar matters and investors may be reluctant to provide us with
funds necessary to expand our operations.
We intend to comply with all corporate governance measures relating to
director independence as and when required. However, we may find it very
difficult or be unable to attract and retain qualified officers, directors and
members of board committees required to provide for our effective management
as a result of Sarbanes-Oxley Act of 2002. The enactment of the Sarbanes-Oxley
Act of 2002 has resulted in a series of rules and regulations by the SEC that
increase responsibilities and liabilities of directors and executive officers.
The perceived increased personal risk associated with these recent changes may
make it more costly or deter qualified individuals from accepting these roles.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
No Public Market for Common Stock
There is presently no public market for our Common Stock. We intend to request
a registered broker-dealer to apply to have our Common Stock quoted on the OTC
Bulletin Board upon the effectiveness of the registration statement of which
this Prospectus forms a part. However, we can provide no assurance that our
shares will be traded on the OTC Bulletin Board or, if traded, that a public
market will materialize.
The Securities and Exchange Commission has 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
quotation system. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock, to deliver a standardized risk disclosure
document prepared by the SEC, that: (a) contains a description of the nature
and level of risk in the market for penny stocks in both public offerings and
secondary trading; (b) contains a description of the broker's or dealer's
duties to the customer and of the rights and remedies available to the
customer with respect to a violation to such duties or other requirements of
Securities' laws; (c) 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; (d) contains a toll-
free telephone number for inquiries on disciplinary actions; (e) defines
significant terms in the disclosure document or in the conduct of trading in
penny stocks; and (f) 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, the customer
with: (a) bid and offer quotations for the penny stock; (b) the compensation
of the broker-dealer and its salesperson in the transaction; (c) 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 (d)
monthly account statements showing the market value of each penny stock held
in the customer'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 suitably written statement.
These disclosure requirements may have the effect of reducing the trading
activity in the secondary market for our stock if it becomes subject to these
penny stock rules. Therefore, if our Common Stock becomes subject to the penny
stock rules, stockholders may have difficulty selling those securities.
Holders of Our Common Stock
As of the date of this Prospectus, we had 43 holders of record of our Common
Stock.
Dividends
There are no restrictions in our articles of incorporation or bylaws that
prevent us from declaring dividends. We have not declared any dividends and we
do not plan to declare any dividends in the foreseeable future.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE
Changes in Certifying Accountant
We have engaged Hamilton PC ("Hamilton") as our principal independent
registered public accounting firm effective October 30, 2011. We accepted the
resignation of Malcolm L. Pollard CPA ("Pollard") effective October 30, 2011.
The decision to change our principal independent registered public accounting
firm has been approved by our board of directors.
36
The report of Pollard on our financial statements for fiscal years ended
December 31, 2010 and December 31, 2009 did not contain an adverse opinion or
disclaimer of opinion, nor was it modified as to uncertainty, audit scope or
accounting principles, other than to state that there is substantial doubt as
to our ability to continue as a going concern. During our fiscal year ended
December 31, 2010 and during the subsequent period through to the date of
Pollard's resignation, there were no disagreements between us and Pollard,
whether or not resolved, on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which, if not
resolved to the satisfaction of Pollard, would have caused Pollard to make
reference thereto in its report on our audited financial statements.
We have provided Pollard with a copy of this Registration Statement requested
that Pollard furnish us with a letter addressed to the Securities and Exchange
Commission stating whether or not Pollard agrees with the statements made in
this Registration Statement with respect to Pollard and, if not, stating the
aspects with which they do not agree. We received the requested letter from
Pollard wherein Pollard has confirmed his agreement to our disclosures in this
Registration Statement with respect to Pollard. A copy of Pollard's letter has
been filed as an exhibit to this Registration Statement.
In connection with our appointment of Hamilton as our principal registered
accounting firm at this time, we have not consulted Hamilton on any matter
relating to the application of accounting principles to a specific
transaction, either completed or contemplated, or the type of audit opinion
that might be rendered on our financial statements.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form S-1 under the Securities Act
with the Securities and Exchange Commission with respect to the shares of our
Common Stock offered through this Prospectus. This Prospectus is filed as a
part of that registration statement, but does not contain all of the
information contained in the registration statement and exhibits. Statements
made in the registration statement are summaries of the material terms of the
referenced contracts, agreements or documents of our Company. We refer you to
our registration statement and each exhibit attached to it for a more detailed
description of matters involving our Company and the statements we have made
in this Prospectus are qualified in their entirety by reference to these
additional materials. You may inspect the registration statement, exhibits and
schedules filed with the Securities and Exchange Commission at the SEC's
principal office in Washington, D.C. Copies of all or any part of the
registration statement may be obtained from the Public Reference Section of
the SEC, Room 1580, 100 F Street NE, Washington D.C. 20549. Please call the
Securities and Exchange Commission at 1-800-SEC-0330 for further information
on the operation of the public reference rooms. The Securities and Exchange
Commission also maintains a website at http://www.sec.gov that contains
reports, proxy statements and information regarding registrants that file
electronically with the SEC. Our registration statement and the referenced
exhibits can also be found on this site.
37
FINANCIAL INFORMATION
Item: Page No.:
Report of Independent Certified Public
Accountants dated January 20, 2012 F-1
Balance Sheet F-2
Statement of Operations F-3
Statement of Cash Flows F-4
Notes F-5
Auditor's Report, dated June 14, 2011 F-11
Balance Sheet F-12
Statement of Operations F-13
Statement of Cash Flows F-14
Statement of Shareholder Deficiency F-15
Notes F-16
Hamilton, PC
2121 S. Oneida St., Suite 312
Denver, CO 80224
P: (303) 548-8072
F: (888) 466-4216
ed@hamiltonpccpa.com
Report of Independent Certified Public Accountants
Board of Directors
Ballroom Dance Fitness, Inc
1150 Hillsboro Mile, Suite #1004
Hillsboro Beach, FL 33062
We have reviewed the accompanying balance sheet of Ballroom Dance Fitness,
Inc. as of September 30, 2011, and the related statements of operations, and
cash flows for the nine month and since inception periods then ended. These
interim financial statements are the responsibility of the Company's
management.
We conducted our review in accordance with the standards of the Public Company
Accounting Oversight Board. A review of interim financial statements consists
principally of applying analytical procedures and making inquiries of persons
responsible for financial and accounting matters. It is substantially less in
scope than an audit in accordance with the standards of the Public Company
Accounting Oversight Board, the object of which is the expression of an
opinion regarding the financial statements taken as a whole. Accordingly, we
do not express such an opinion.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in notes to the
financial statements, the Company has negative working capital, negative cash
flows from operations and recurring operating losses which raises substantial
doubt about its ability to continue as a going concern. Management's plans in
regard to these matters are also described in the notes to the financial
statements. These financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements in order for them to
be in conformity with generally accepted accounting principles accepted in the
United States of America.
Hamilton, PC
/s/ Hamilton, PC
January 20, 2012
Denver, Colorado
F-1
BALLROOM DANCE FITNESS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
September 30, December 31,
2011 2010
ASSETS:
Cash $1,952 $676
TOTAL ASSETS: $1,952 $676
LIABILITIES AND SHAREHOLDERS EQUITY:
LIABILITIES:
Acounts Payable $8,750 $8,000
Due to shareholders 8,228 2,156
TOTAL LIABILITIES: 16,978 10,156
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIENCY)
Common stock, $.0001 par value;
100,000,000 shares authorized;
11,113,750 shares outstanding at
September 30, 2011 and December
31, 2010, respectively 1,111 1,111
Additional Paid in Capital 11,755 11,755
Deficit Accumulated During the
Development Stage (27,892) (22,346)
TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY) (15,026) (9,480)
TOTAL LIABILITIES & STOCKHOLDERS
EQUITY (DEFICIENCY) $1,952 $676
See accompanying notes to the audited Condensed Consolidated
Financial Statements
F-2
BALLROOM DANCE FITNESS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(UNAUDITED)
For the period January 20,
Nine Months Ended Nine Months Ended 2009 (Inception)
September 30, September 30, through
2011 2010 September 30, 2011
Revenue $7,302 $10,650 $26,350
Total Revenue $7,302 $10,650 $26,350
Expenses:
Licenses and Fees $- $1,425 $4,844
Contract Labor 5,050 2,778 24,280
Professional Fees 6,000 11,745 17,745
Production 822 111 933
Insurance - 287 299
Travel 640 868 2,182
Office 335 3,079 3,959
Total Expenses 12,847 20,293 54,242
Net Loss $(5,545) $(9,643) $(27,892)
Basic and diluted loss
per common share $ (0.00) $ (0.00)
Weighted average common
shares outstanding 11,113,750 10,005,000
See accompanying notes to the audited Condensed Consolidated
Financial Statements
F-3
BALLROOM DANCE FITNESS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
For the period January 20,
Nine Months Ended Nine Months Ended 2009 (Inception)
September 30, September 30, through
2011 2010 September 30, 2011
Cash flows from operating activities:
Net Loss $(5,545) $(9,643) $(27,892)
Adjustments to reconcile net income to net
cash provided by operating activities:
Stock issued for services - 110 12,866
Changes in assets and liabilities:
Increase in accounts payable 750 8,000 8,750
Increase in due from shareholder 6,071 - 8,228
Cash flows provided from operating activities 1,276 (1,533) 1,952
Cash flows used in investing activities: - - -
Cash flows provided from financing activities:
Cash received for stock sale 1,750
Net change in cash and cash equivalents 1,276 217 1,952
Cash and cash equivalents, beginning of period 676 4 -
Cash and cash equivalents, end of period $1,952 $221 $1,952
Interest paid $- $- $-
Taxes paid $- $- $-
See accompanying notes to the audited Condensed Consolidated
Financial Statements
F-4
BALLROOM DANCE FITNESS, INC.
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2011 AND YEAR ENDED DECEMBER 31, 2010
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Organization
Ballroom Dance Fitness, Inc. was organized January 20, 2009 under the laws of
the State of Florida. The Company creates fitness videos and DVD's that
promote "Fun Exercise" to the Ballroom Dance and fitness enthusiasts.
The videos and DVD's are designed for individuals that want to lose weight and
also learn Ballroom Dance steps. The DVD's will be marketed via TV
infomercial, Corporate web site and Internet marketing. The company realizes
revenues when paid in full for purchase of DVD's and merchandise purchased
(DVD's, fitness clothes, nutrition's and exercise shoes) on the Company's
website. The company is competing in the Weight loss and Nutrition industry; a
$44 billion annual industry
Basis of Accounting
We have prepared the accompanying consolidated financial statements pursuant
to the rules and regulations of the Securities and Exchange Commission. In the
opinion of management, these financial statements give effect to all normal
recurring adjustments necessary to present fairly the financial position and
results of operations and cash flows of the Company.
Although we believe that the disclosures included in our financial statements
are adequate to make the information presented not misleading, certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
omitted. Accordingly, the accompanying financial statements should be read in
conjunction with the Company's latest annual report on Form 10-K for the year
ended December 31, 2010 filed with the Securities and Exchange Commission (the
"SEC").
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect amounts reported in
the financial statements and accompanying notes. Actual results could differ
from these estimates.
The results of operations for the nine months ended September 30, 2011 are not
necessarily indicative of the results to be expected for the full 2011 year.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates. The most
significant estimates included in the preparation of the financial statements
are related to asset lives and accruals.
F-5
BALLROOM DANCE FITNESS, INC.
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2011 AND YEAR ENDED DECEMBER 31, 2010
Income taxes
We account for income taxes in accordance with ASC 740, Accounting for Income
Taxes, as clarified by ASC 740-10, Accounting for Uncertainty in Income Taxes.
Under this method, deferred income taxes are determined based on the estimated
future tax effects of differences between the financial statement and tax
basis of assets and liabilities given the provisions of enacted tax laws.
Deferred income tax provisions and benefits are based on changes to the assets
or liabilities from year to year. In providing for deferred taxes, we consider
tax regulations of the jurisdictions in which we operate, estimates of future
taxable income, and available tax planning strategies. If tax regulations,
operating results or the ability to implement tax-planning strategies vary,
adjustments to the carrying value of deferred tax assets and liabilities may
be required. Valuation allowances are recorded related to deferred tax assets
based on the "more likely than not" criteria of ASC 740.
ASC 740-10 requires that we recognize the financial statement benefit of a tax
position only after determining that the relevant tax authority would more
likely than not sustain the position following an audit. For tax positions
meeting the "more-likely-than-not" threshold, the amount recognized in the
financial statements is the largest benefit that has a greater than 50 percent
likelihood of being realized upon ultimate settlement with the relevant tax
authority.
Earnings Per Share
Basic earnings per share is computed based on the weighted average number of
shares outstanding during the period. Diluted earnings per share is computed
using the weighted average common shares and all potentially dilutive common
shares outstanding during the period.
Recent Accounting Pronouncements
ASU 2011-05 - Presentation of comprehensive income
ASU 2011-05 was the result of a joint project with the IASB and amends the
guidance in ASC 220, Comprehensive Income, by eliminating the option to
present components of other comprehensive income (OCI) in the statement of
stockholders' equity. Instead, the new guidance now requires entities to
present all nonowner changes in stockholders' equity either as a single
continuous statement of comprehensive income or as two separate but
consecutive statements.
All entities that report OCI items will be impacted by the changes in this
ASU. The components of OCI have not changed, nor has the guidance on when OCI
items are reclassified to net income; however, the amendments require entities
to present all reclassification adjustments from OCI to net income on the face
of the statement of comprehensive income.
The amendments to ASC 220, Comprehensive Income, included in ASU 2011-05,
Presentation of Comprehensive Income, are effective for fiscal years and for
interim periods within those fiscal years, beginning after December 15, 2011
(that is, the fiscal year beginning January 1, 2012 for calendar-year
entities) for public entities and for interim and annual periods thereafter.
The amended guidance must be applied retrospectively and early adoption is
permitted.
F-6
BALLROOM DANCE FITNESS, INC.
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2011 AND YEAR ENDED DECEMBER 31, 2010
ASU 2011-04 - Amendments to achieve common fair value measurement and
disclosure requirements in U.S. GAAP and IFRSs
The amendments in ASU 2011-04 do not modify the requirements for when fair
value measurements apply; rather, they generally represent clarifications on
how to measure and disclose fair value under ASC 820, Fair Value Measurement,
including the following revisions:
* The concepts of highest and best use and valuation premise are relevant only
for measuring the fair value of nonfinancial assets and do not apply to
financial assets and liabilities.
* An entity should measure the fair value of an equity-classified financial
instrument from the perspective of the market participant that holds the
instrument as an asset.
* An entity that holds a group of financial assets and financial liabilities
whose market risk (that is, interest rate risk, currency risk, or other price
risk) and credit risk are managed on the basis of the entity's net risk
exposure may apply an exception to the fair value requirements in ASC 820 if
certain criteria are met. The exception allows such financial instruments to
be measured on the basis of the reporting entity's net, rather than gross,
exposure to those risks.
* Premiums or discounts related to the unit of account are appropriate when
measuring fair value of an asset or liability if market participants would
incorporate them into the measurement (for example, a control premium).
However, premiums or discounts related to size as a characteristic of the
reporting entity's holding (that is, a "blockage factor") should not be
considered in a fair value measurement.
The amendments to ASC 820, Fair Value Measurement, included in ASU 2011-04,
Amendments to Achieve Common Fair Value Measurement and Disclosure
Requirements in U.S. GAAP and IFRSs, are effective prospectively for public
entities for interim and annual periods beginning after December 15, 2011
(that is, the quarter ending March 31, 2012 for calendar-year entities). Early
adoption is not permitted for public entities
ASU 2011-03 - Reconsideration of effective control for repurchase agreements
The amendments to ASC 860-10 included in ASU 2011-03, simplified the
accounting for financial assets transferred under repurchase agreements
(repos) and similar arrangements, by eliminating the transferor's ability
criteria from the assessment of effective control over those assets as well as
the related implementation guidance.
Currently under ASC 860-10-40-24 a transferor must meet four criteria to
maintain effective control of securities transferred in a repo and to
therefore account for the transfer as a secured borrowing rather than a sale.
One of these criteria states that the transferor must be able to either
repurchase or redeem the transferred securities on substantially the agreed
terms, even if the transferee is in default. This criterion is satisfied only
if the transferor has cash or collateral sufficient to fund substantially the
entire cost of purchasing replacement securities.
The amendments in ASU 2011-03 remove this criterion and related implementation
guidance from the Codification, thereby reducing the criteria that transferors
must satisfy to qualify for secured borrowing accounting and, as a result,
likely reducing the number of transfers accounted for as sales.
The amendments to ASC 860-10, Transfers and Servicing, included in ASU 2011-
03, Reconsideration of Effective Control for Repurchase Agreements, are
effective for both public and nonpublic entities prospectively for new
transfers and existing transactions modified as of the first interim or annual
period beginning on or after December 15, 2011 (that is, the fiscal year
beginning January 1, 2012 for calendar-year entities). Early adoption is not
permitted.
F-7
BALLROOM DANCE FITNESS, INC.
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2011 AND YEAR ENDED DECEMBER 31, 2010
ASU 2011-02 - FASB amends creditor troubled debt restructuring guidance
This bulletin discusses ASU 2011-02, which was issued by the FASB to provide
creditors with additional guidance in evaluating whether a restructuring of
debt is a troubled debt restructuring. The new guidance does not amend the
guidance for debtors. It is generally effective for public entities in the
quarter ended September 30, 2011.
ASU 2011-01 - Troubled debt restructuring disclosures for public-entity
creditors deferred
The FASB issued Accounting Standards Update (ASU) 2011-01, Deferral of the
Effective Date of Disclosures about Troubled Debt Restructurings in Update No.
2010-20, which temporarily defers the date when public-entity creditors are
required to provide the new disclosures for troubled debt restructurings in
ASU 2010-20, Disclosures about the Credit Quality of Financing Receivables and
the Allowance for Credit Losses. The deferred effective date will coincide
with the effective date for the clarified guidance about what constitutes a
troubled debt restructuring, which the Board is currently deliberating. The
clarified guidance is expected to apply for interim and annual periods ending
after June 15, 2011.
When providing the new disclosures under ASU 2010-20, public entities would be
required to retrospectively apply the clarified guidance on what constitutes a
troubled debt restructuring to restructurings occurring on or after the
beginning of the year in which the proposed clarified guidance is adopted.
NOTE 2: GOING CONCERN
The accompanying Financial Statements have been prepared assuming that the
company will continue as a going concern. Going concern contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business over a reasonable period of time. The company has incurred an
operating loss of approximately $27,000 since inception. The future of the
company is dependent on its ability to obtain funding from its anticipated
funding of its S-1 with the Securities and Exchange Commission. Although the
company plans to pursue its equity funding, there can be no assurance that the
company will be able raise sufficient working capital to maintain its
operations. If the Company is unable to raise the necessary working capital
though the equity funding it will be forced to continue relying on cash from
operations and loans from related parties to satisfy its working capital
needs. There can be no assurance that the company will be able rely on these
sources to maintain its operations.
F-8
BALLROOM DANCE FITNESS, INC.
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2011 AND YEAR ENDED DECEMBER 31, 2010
NOTE 3: INCOME TAXES
The provision for income taxes and the effective tax rates for the nine months
ended September 30, 2011 and 2010 were computed by applying the federal and
state statutory corporate tax rates as follows:
2011 2010
Provisions for income taxes at statutory federal rate $0 $0
Valuation allowance - -
Net income tax provision $-0- $-0-
The reported income tax at the statutory rate 34% 34%
State rate, net of federal income tax 5% 5%
Valuation allowance -39% -39%
Effective income tax rate 0% 0%
Our Federal net operating loss ("NOL") carryforward balance as of December 31,
2010 was $22,400, expiring between 2011 and 2017. Management has reviewed the
provisions of ASC 740 regarding assessment of their valuation allowance on
deferred tax assets and based on that criteria determined that it does not
have sufficient taxable income to offset those assets. Therefore, Management
has assessed the realization of the deferred tax assets and has determined
that it is more likely than not that they will not be realized. .
The Company adopted the provisions of ASC 740, previously FASB Interpretation
No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes, on January 1,
2007. Previously the Company has accounted for tax contingencies in accordance
with Statement of Financial Accounting Standards 5, Accounting for
Contingencies. The statute of limitations is still open on years 2006 and
subsequent. The Company recognizes the financial statement impact of a tax
position only after determining that the relevant tax authority would more
likely than not sustain the position following an audit. For tax positions
meeting the more-likely-than-not threshold, the amount recognized in the
financial statements is the largest benefit that has a greater than 50 percent
likelihood of being realized upon ultimate settlement with the relevant tax
authority. At the adoption date the Company applied ASC 740 to all tax
positions for which the statute of limitations remained open. As a result of
the implementation of ASC 740, the Company did not recognize a material
increase in the liability for uncertain tax positions.
The Company is subject to income taxes in the U.S. federal jurisdiction and
the state of Florida. The tax regulations within each jurisdiction are subject
to interpretation of related tax laws and regulations and require significant
judgment to apply. With few exceptions, the Company is no longer subject to
U.S. federal, state and local examinations by tax authorities for the years
before 2009.
F-9
BALLROOM DANCE FITNESS, INC.
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2011 AND YEAR ENDED DECEMBER 31, 2010
NOTE 4: LOANS FROM SHAREHOLDERS
A shareholder has advanced various loans to the Company for the payment of
certain operating expenses. The loans are non-interest bearing and are due on
demand. Loans from shareholders at September 30, 2011 amounted to $8,228.
NOTE 5: STOCK BASED COMPENSATION
The Company accounts for employee and non-employee stock awards under ASC 718
- Stock Compensation, formerly SFAS 123(r), 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 6: STOCKHOLDERS' EQUITY
The Company issued a total of 10,005,000 shares of its common stock at $0.002
per share for services during the year ended December 31, 2009 and 1,108,750
shares at $0.002 per share for services during the year ended December 31,
2010.
F-10
MALCOLM L. POLLARD, INC
4845 W. LAKE ROAD, # 119
ERIE, PA 16505
(814)838-8258 FAX (814)838-8452
Report of Independent Certified Public Accountants
Board of Directors
Ballroom Dancing Fitness, Inc.
We have audited the accompanying balance sheets of Ballroom Dancing Fitness,
Inc(a Development Stage Company) as of December 31, 2010, and December 31,
2009 and the related statements of operations, changes in stockholders'
deficiency, and cash flows for the period from inception (January 20, 2009)
through December 31, 2009, the year ended December 31, 2010 and the
cumulative period from inception through December 31, 2010. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conduct our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
The Company has not generated significant revenues or profits to date. This
factor, among others, raises substantial doubt about its ability to continue
as a going concern. The Company's continuation as a going concern depends
upon its ability to generate sufficient cash flow to conduct its operations
and its ability to obtain additional sources of capital and financing. The
accompanying financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Company at December
31, 2010 and December 31, 2009 and the results of its operations, changes in
stockholders' deficiency, and its cash flows for the period from inception
(January 20, 2009) through December 31, 2009, the year ended December 31,
2010 and the cumulative period from inception through December 31, 2010, in
conformity with U.S. generally accepted accounting standards.
/s/ Malcolm L. Pollard, Inc.
Erie, Pennsylvania
June 14, 2011
F-11
BALLROOM DANCE FITNESS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
DECEMBER 31, 2010 AND DECEMBER 31, 2009
December 31, December 31,
2010 2009
ASSETS:
Cash $676 $4
TOTAL ASSETS: $676 $4
LIABILITIES AND SHAREHOLDERS EQUITY:
LIABILITIES:
Acounts Payable $8,000 $-
Due to shareholders 2,156 256
TOTAL LIABILITIES: 10,156 256
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIENCY)
Common stock, $.0001 par value; 100,000,000 shares
authorized; 11,113,750 and 10,005,000 shares
outstanding at December 31, 2010 and December 31, 2009 1,111 1,000
Additional Paid in Capital 11,755 10,006
Deficit Accumulated During the Development Stage (22,346) (11,258)
TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY) (9,480) (252)
TOTAL LIABILITIES & STOCKHOLDERS EQUITY (DEFICIENCY) $676 $4
See accompanying notes to the audited Condensed Consolidated
Financial Statements
F-12
BALLROOM DANCE FITNESS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
For the period For the period
January 20, January 20,
Year Ended 2009 (Inception) 2009 (Inception)
December 31, through through
2010 December 31, 2009 December 31, 2010
Revenue $14,879 $4,175 $19,054
Total Revenue $14,879 $4,175 $19,054
Expenses:
Licenses and Fees $4,825 $19 $4,844
Contract Labor 3,977 14,725 18,702
Professional Fees 11,745 - 11,745
Production 111 533 644
Insurance 299 - 299
Travel 1,542 - 1,542
Office 3468 156 3,624
Total Expenses 25,967 15,433 41,400
Net Loss $(11,088) $(11,258) $(22,346)
Basic and diluted loss per
common share $(0.001) $(0.001)
Weighted average common shares
outstanding 10,005,000 10,005,000
See accompanying notes to the audited Condensed Consolidated
Financial Statements
F-13
BALLROOM DANCE FITNESS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
For the period For the period
January 20, January 20,
Year ended 2009 (Inception) 2009 (Inception)
December 31, through through
2010 December 31, 2009 December 31, 2010
Cash flows from operating activities:
Net Loss $(11,088) $(11,258) $22,346
Adjustments to reconcile net income to net
cash provided by operating activities:
Stock issued for services 1,860 11,006 12,866
Changes in assets and liabilities:
Increase in accounts payable 8,000 - 8,000
Increase in due from shareholder 1,900 256 2,156
Cash flows provided from operating activities 672 4 676
Cash flows used in investing activities: - - -
Cash flows provided from financing activities: - - -
Net change in cash and cash equivalents 672 4 676
Cash and cash equivalents, beginning of period 4 - -
Cash and cash equivalents, end of period $676 $4 676
Interest paid $- $- $-
Taxes paid $- $- $-
See accompanying notes to the audited Condensed Consolidated
Financial Statements
F-14
BALLROOM DANCE FITNESS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF SHAREHOLDERS EQUITY
YEARS ENDED DECEMBER 31, 2010 AND
THE PERIOD JANUARY 20, 2009 (INCEPTION)
THROUGH DECEMBER 31, 2009
Deficit Accumulated
Common Stock Additional During the Development
Shares Amount Paid -In Capital Stage Total
Balance January 20, 2009 (Inception) - $- $- $- $-
Founder's Stock in Exchange for Service 10,005,000 1,000 10,006 11,006
Net Loss (11,258) (11,258)
Balance December 31, 2009 10,005,000 1,000 10,006 (11,258) (252)
Stock issued for services-June 2010 1,108,750 110.875 1,749 1,860
Net Loss (11,088) (11,088)
Balance December 31, 2010 11,113,750 $1,111 $11,755 $(22,346) $(9,480)
See accompanying notes to the audited Condensed Consolidated
Financial Statements
F-15
BALLROOM DANCE FITNESS, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2010
AND 2009
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Organization
Ballroom Dance Fitness, Inc. was organized January 20, 2009 under the laws of
the State of Florida. The Company creates fitness videos and DVD's that
promote "Fun Exercise" to the Ballroom Dance and fitness enthusiasts.
The videos and DVD's are designed for individuals that want to lose weight and
also learn Ballroom Dance steps. The DVD's will be marketed via TV
infomercial, Corporate web site and Internet marketing. The company realizes
revenues when paid in full for purchase of DVD's and merchandise purchased
(DVD's, fitness clothes, nutrition's and exercise shoes) on the Company's
website. The company is competing in the Weight loss and Nutrition industry; a
$44 billion annual industry
Basis of Accounting
We have prepared the accompanying consolidated financial statements pursuant
to the rules and regulations of the Securities and Exchange Commission and in
accordance with accounting principles generally accepted in the United States
of America. In the opinion of management, these financial statements give
effect to all normal recurring adjustments necessary to present fairly the
financial position and results of operations and cash flows of the Company..
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect amounts reported in
the financial statements and accompanying notes. Actual results could differ
from these estimates.
Certain prior period amounts have been reclassified to conform to current-
period presentation. These reclassifications had no effect on net loss for the
periods presented.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates. The most
significant estimates included in the preparation of the financial statements
are related to asset lives and accruals.
Income taxes
We account for income taxes in accordance with ASC 740, Accounting for Income
Taxes, as clarified by ASC 740-10, Accounting for Uncertainty in Income Taxes.
Under this method, deferred income taxes are determined based on the estimated
future tax effects of differences between the financial statement and tax
basis of assets and liabilities given the provisions of enacted tax laws.
Deferred income tax provisions and benefits are based on changes to the assets
or liabilities from year to year. In providing for deferred taxes, we consider
tax regulations of the jurisdictions in which we operate, estimates of future
taxable income, and available tax planning strategies. If tax regulations,
operating results or the ability to implement tax-planning strategies vary,
adjustments to the carrying value of deferred tax assets and liabilities may
be required. Valuation allowances are recorded related to deferred tax assets
based on the "more likely than not" criteria of ASC 740.
F-16
BALLROOM DANCE FITNESS, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2010
AND 2009
ASC 740-10 requires that we recognize the financial statement benefit of a tax
position only after determining that the relevant tax authority would more
likely than not sustain the position following an audit. For tax positions
meeting the "more-likely-than-not" threshold, the amount recognized in the
financial statements is the largest benefit that has a greater than 50 percent
likelihood of being realized upon ultimate settlement with the relevant tax
authority.
Earnings Per Share
Basic earnings per share is computed based on the weighted average number of
shares outstanding during the period. Diluted earnings per share is computed
using the weighted average common shares and all potentially dilutive common
shares outstanding during the period.
NOTE 2: GOING CONCERN
The accompanying Financial Statements have been prepared assuming that the
company will continue as a going concern. Going concern contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business over a reasonable period of time. The company has incurred an
operating loss since inception. The future of the company is dependent on its
ability to obtain funding from its anticipated funding of its S-1 with the
Securities and Exchange Commission. Although the company plans to pursue its
equity funding, there can be no assurance that the company will be able raise
sufficient working capital to maintain its operations. If the Company is
unable to raise the necessary working capital though the equity funding it
will be forced to continue relying on cash from operations and loans from
related parties to satisfy its working capital needs. There can be no
assurance that the company will be able rely on these sources to maintain its
operations.
NOTE 3: INCOME TAXES
The provision for income taxes and the effective tax rates for the year ended
December 31, 2010 and year ended December 31, 2009 were computed by applying
the federal and state statutory corporate tax rates as follows:
December 31, December 31,
2010 2009
Provisions for income taxes at statutory federal rate $2,857 $3,940
Valuation allowance (2,857) (3,940)
Net income tax provision $-0- $-0-
The reported income tax at the statutory rate 34% 34%
State rate, net of federal income tax 5% 5%
Valuation allowance -39% -39%
Effective income tax rate 0% 0%
Our Federal net operating loss ("NOL") carryforward balance as of December 31,
2010 was $22,400, expiring between 2010 and 2017. Management has reviewed the
provisions of ASC 740 regarding assessment of their valuation allowance on
deferred tax assets and based on that criteria determined that it does not
have sufficient taxable income to offset those assets. Therefore, Management
has assessed the realization of the deferred tax assets and has determined
that it is more likely than not that they will not be realized.
F-17
BALLROOM DANCE FITNESS, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2010
AND 2009
The Company adopted the provisions of ASC 740, previously FASB Interpretation
No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes, on January 1,
2007. Previously the Company has accounted for tax contingencies in accordance
with Statement of Financial Accounting Standards 5, Accounting for
Contingencies. The statute of limitations is still open on years 2009 and
subsequent. The Company recognizes the financial statement impact of a tax
position only after determining that the relevant tax authority would more
likely than not sustain the position following an audit. For tax positions
meeting the more-likely-than-not threshold, the amount recognized in the
financial statements is the largest benefit that has a greater than 50 percent
likelihood of being realized upon ultimate settlement with the relevant tax
authority. At the adoption date the Company applied ASC 740 to all tax
positions for which the statute of limitations remained open. As a result of
the implementation of ASC 740, the Company did not recognize a material
increase in the liability for uncertain tax positions.
The Company is subject to income taxes in the U.S. federal jurisdiction and
the state of Florida. The tax regulations within each jurisdiction are subject
to interpretation of related tax laws and regulations and require significant
judgment to apply.
NOTE 4: STOCK BASED COMPENSATION
The Company accounts for employee and non-employee stock awards under SFAS
123(r), 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 5: LOANS FROM SHAREHOLDERS
A shareholder has advanced various loans to the Company for the payment of
certain operating expenses. The loans are non-interest bearing and are due on
demand. Loans from shareholders at December 31, 2010 and December 31, 2009
amounted to $2156 and $256, respectively.
NOTE 6: STOCKHOLDERS EQUITY
The Company issued a total of 10,005,000 shares of its common stock at $0.002
per share for services during the year ended December 31, 2009 and 1,108,750
shares at $0.002 per share for services during the year ended December 31,
2010.
NOTE 7: RECENT ACCOUNTING PRONOUNCEMENTS
On January 1, 2009, the Company adopted accounting guidance issued by the
Financial Accounting Standards Board ("FASB") which had previously deferred
the effective date of fair value measurements for all nonfinancial assets and
nonfinancial liabilities, except for items that are recognized or disclosed in
financial statements at fair value on a recurring basis (at least annually).
The adoption of this guidance did not have a material impact on the financial
statements.
In May 2009, the FASB issued a statement to incorporate the accounting and
disclosure requirements for subsequent events into U.S. generally accepted
accounting principles which was amended in February 2010. The statement, as
amended, introduces new terminology, defines a date through which management
must evaluate subsequent events, and lists the circumstances under which an
entity must recognize and disclose events or transactions occurring after the
balance-sheet date. The Company adopted the statement as of June 30, 2009,
which was the required effective date.
F-18
BALLROOM DANCE FITNESS, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2010
AND 2009
The Company adopted authoritative guidance issued by the FASB codifying U.S.
GAAP. The adoption of this authoritative guidance changed how the Company
references U.S. GAAP in the financial statement disclosures. The guidance is
effective for financial statements issued for interim and annual periods
ending after September 15, 2009. Applying the guidance did not impact the
Company's financial condition and results of operations. The Company has
revised its references to pre-Codification GAAP in its financial statements.
In January 2010, the FASB issued the FASB Accounting Standards Update No.
2010-01 "Equity Topic 505 - Accounting for Distributions to Shareholders with
Components of Stock and Cash", which clarify that the stock portion of a
distribution to shareholders that allows them to elect to receive cash or
stock with a potential limitation on the total amount of cash that all
shareholders can elect to receive in the aggregate is considered a share
issuance that is reflected in EPS prospectively and is not a stock dividend
for purposes of applying Topics 505 and 260 (Equity and Earnings Per Share
("EPS")). Those distributions should be accounted for and included in EPS
calculations in accordance with paragraphs 480-10-25-14 and 260-10-45-45
through 45-47 of the FASB Accounting Standards codification. The amendments
in this Update also provide a technical correction to the Accounting Standards
Codification. The correction moves guidance that was previously included in
the Overview and Background Section to the definition of a stock dividend in
the Master Glossary. That guidance indicates that a stock dividend takes
nothing from the property of the corporation and adds nothing to the interests
of the stockholders. It also indicates that the proportional interest of each
shareholder remains the same, and is a key factor to consider in determining
whether a distribution is a stock dividend. The adoption of this guidance did
not have a material impact on the financial statements.
Management does not believe that any other recently issued, but not yet
effective accounting pronouncements, if adopted, would have a material effect
on the accompanying financial statements.
F-19
[OUTSIDE BACK COVER OF PROSPECTUS]
________________________________________
BALLROOM DANCE FITNESS, INC.
6,000,000 SHARES COMMON STOCK
Until ninety days after the date this registration statement is declared
effective, all dealers that effect transactions in these securities whether or
not participating in this offering, may be required to deliver a Prospectus.
This is in addition to the dealer's obligation to deliver a Prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
Item Page
Summary 5
Risk Factors 10
Description of Business 19
Description of Properties 21
Legal Proceedings 21
Use of Proceeds 21
Determination of Offering Price 22
Dilution 24
Plan of Distribution 25
Directors, Executive Officers, Promoters and Control Persons 26
Security Ownership of Certain Beneficial Owners and Management 28
Description of Securities 29
Interest of Named Experts and Counsel 30
Experts 30
Disclosure of Commission Position of Indemnification for Securities Act
Liabilities 31
Organization Within Last Five Years 31
Management's Discussion and Analysis of Financial Condition and Results of
Operations 31
Certain Relationships and Related Transactions and Corporate Governance 36
Market for Common Equity and Related Stockholder Matters 37
Changes in and Disagreements with Accountants and Financial Disclosure 38
Where You Can Find More Information 38
Financial Statements F-1
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The estimated costs of this offering are as follows:
Expenses(1) Amount
US ($)
SEC Registration Fee (not estimated) $41
Transfer Agent Fees $1,750
Accounting Fees and Expenses $10,500
Legal Fees and Expenses $25,000
Printers $5,500
Miscellaneous $1,000
Total $43,791
We are paying all expenses of the offering listed above. Proceeds from the
sale of this offering may go towards the satisfaction of some of these fees.
Item 14. Indemnification of Directors and Officers
We are incorporated in the State of Florida. Florida Corporate Law and our
certificate of incorporation and bylaws contain provisions for indemnification
of our officers and directors, and under certain circumstances, our employees
and other persons. The bylaws require us to indemnify such persons to the
fullest extent permitted by Florida law. Each such person will be indemnified
in any proceeding if such person acted in good faith and in a manner that such
person reasonably believed to be in, or not opposed to, our best interests.
The indemnification would cover expenses, including attorney's fees,
judgments, fines and amounts paid in settlement. Our bylaws also provide that
we may purchase and maintain insurance on behalf of any of our present or past
directors or officers insuring against any liability asserted against such
person incurred in their capacity as a director or officer or arising out of
such status, whether or not we would have the power to indemnify such person.
We have no other indemnification provisions in our Certificate of
Incorporation, Bylaws or otherwise specifically providing for indemnification
of directors, officers and controlling persons against liability under the
Securities Act.
Item 15. Recent Sales of Unregistered Securities
On January 29, 2009, the Company issued 6,000,000 shares of Common Stock, par
value $0.0001, to Sean Forhan for an aggregate of $600 as founder stock. The
Company relied on the registration exemption available to the Company under
Section 4(2) of the Securities Act of 1933, as amended, due to the fact that
it was one issuance to one person and that person was a founder of the
Company.
1
On January 29, 2009, the Company issued 2,000,000 shares of Common Stock, par
value $0.0001, to William Forhan for an aggregate of $200 as founder stock.
The Company relied on the registration exemption available to the Company
under Section 4(2) of the Securities Act of 1933, as amended, due to the fact
that it was one issuance to one person and that person was a founder of the
Company.
On February 26, 2009, the Company issued 5,000 shares of Common Stock, at
$0.20 per share, to Karen Krystyan (Sean's mother) for an aggregate of $1,000
as common stock. The Company sold these shares of Common Stock under the
exemption from registration provided by Section 4(2) of the Securities Act of
1933, as amended, due to the fact that it was an isolated issuance to one
person and that person was an immediate family member of the one of the
Company's founders. No material was provided to the investor in connection
with this sale.
On December 30, 2009, the Company issued 2,000,000 shares of Common Stock to
York & Kassing, Incorporated for future investor relations services. The
Company sold these shares of Common Stock under the exemption from
registration provided by Section 4(2) of the Securities Act of 1933, as
amended, due to the fact that it did not involve a public offering of
securities and it was for services rendered and it involved one recipient. The
amount of shares given to York & Kassing was a result of private negotiations
between the Company and York & Kassing and based on services the Company deems
to be worth $200.
On February 15, 2010, the Company issued a total of 850,000 shares of Common
Stock to The Sourlis Law Firm for aggregate cash consideration of $85.00 The
Company sold these shares of Common Stock under the exemption from
registration provided by Section 4(2) of the Securities Act of 1933, as
amended, due to the fact that it did not involve a public offering of
securities.
On March 15, 2010, the Company issued a total of 250,000 shares of Common
Stock to Clark Forhan for aggregate cash consideration of $25.00. The Company
sold these shares of Common Stock under the exemption from registration
provided by Section 4(2) of the Securities Act of 1933, as amended, due to the
fact it was an isolated issuance to one person and that person was an
immediate family member of the Company's founders. No material was provided to
the investor in connection with this sale.
Between April 15, 2010 and June 4, 2010 the Company issued a total of 8,750
shares of Common Stock to 35 accredited shareholders for aggregate cash
consideration of $1,750. The Company sold these shares of Common Stock under
the exemption from registration provided by Section 4(2) of the Securities Act
of 1933, as amended, due to the fact that it did not involve a public offering
of securities and it was a private placement of securities to accredited
investors who represented that they were purchasing the shares for their own
account and not with a view to distribution. We provided the investors with a
private placement memorandum. The $0.20 purchase price of the common stock in
this issuance was arbitrarily determined by the Company.
Item 16. Exhibits
Exhibit
Number Description of Exhibits
3.1* Articles of Incorporation of Ballroom Dance Fitness, Inc.
3.2* Bylaws
5.1 Legal Opinion of Diane D. Dalmy, Attorney at Law
10.1* Employment Agreement, dated June 1, 2009, between Ballroom Dance
Fitness, Inc. and William G. Forhan
10.2* Employment Agreement, dated June 1, 2009, between Ballroom Dance
Fitness, Inc. and Sean Forhan
2
10.3* Form of Subscription Agreement for this Offering.
14.1* Ballroom Dance Fitness, Inc. Code of Ethics
14.1* Ballroom Dance Fitness, Inc. Code of Business Conduct
23.1 Consent of Malcolm Pollard CPA
23.2 Consent of Diane D. Dalmy, Attorney at Law, (included in Exhibit 5.1)
23.3 Consent of Hamilton, PC
99.1** Statement by Malcolm Pollard CPA
* Filed as an exhibit to Registration Statement on Form S-1 (File No.: 333-
167249) filed on June 2, 2010 and incorporated by reference here.
** Filed as an exhibit to Registration Statement on Form S-1/A (File No.:
333-167249) filed on November 3, 2011 and incorporated by reference here.
Item 17. Undertakings
(a) Rule 415 Offering. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any Prospectus required by section 10(a)(3) of the Securities
Act of 1933;
(ii) To reflect in the Prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereto) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of Prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent no
more than 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 changes to such information in the registration statement.
(2) That for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(4) That for the purpose of determining liability under the Securities Act of
1933 (the "Act") to any purchaser, if the registrant is subject to Rule 430C
under the Act, 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 in the registration statement or Prospectus
that is part of the registration statement will, as to a purchaser with a time
of contract or 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
(5) That for the purpose of determining liability of the registrant under the
Securities Act of 1933 to any purchaser in the initial distribution of the
securities, the undersigned registrant undertakes that in a primary offering
of securities of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell the securities
to the purchaser, if the securities are offered or sold to such purchaser by
means of any of the following communications, the undersigned registrant will
be a seller to the purchaser and will be considered to offer or sell such
securities to such purchaser:
(i) Any preliminary Prospectus or Prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing Prospectus relating to the offering prepared by or on
behalf of the undersigned registrant or used or referred to by the undersigned
registrant;
(iii) The portion of any other free writing Prospectus relating to the
offering containing material information about the undersigned registrant or
its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the
undersigned registrant to the purchaser.
(d) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (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 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
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in Deerfield, Florida on February 16,
2012.
BALLROOM DANCE FITNESS, INC.
By: /s/ WILLIAM G. FORHAN
William G. Forhan
Chief Executive Officer and Chairman
(Principal Executive Officer and
Principal Financial and Accounting Officer)
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on
the dates indicated.
Signature Title Date
/s/ WILLIAM G. FORHAN Chief Executive Officer and Chairman Feb 16, 2012
William G. Forhan (Principal Executive Officer and
Principal Financial and Accounting Officer)
/s/ SEAN FORHAN Chief Operating Officer and Director Feb 16, 2012
Sean Forhan