Attached files
As filed with the Securities and Exchange Commission on August 8, 2012
Registration No. 333-181606
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-1/A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
MODERN PVC INC.
(Name of small business issuer in its charter)
Nevada 1700 EIN 99-0368969
(State or Other Jurisdiction of (Primary Standard Industrial (IRS Employer
Incorporation or Organization) Classification Number) Identification Number)
51-01 39th Avenue Unit HH-12
Queens, NY 11104
773 782 6273
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
INCORP SERVICES, INC.
2360 Corporate Circle Suite 400, Henderson NV 89074-7722
Tel: (702) 866-2500, Fax: (702) 866-2689
(Address, including zip code, and telephone number, including area code,
of agent for service)
Copies of all correspondence to:
David Lubin & Associates, PLLC
10 Union Avenue
Suite 5
Lynbrook, NY 11563
Tel: (516) 887-8200, Fax: (516) 887-8250
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please 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, 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 registration statement 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 registration statement filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering: [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller Reporting Company [X]
(Do not check if a smaller reporting company)
CALCULATION OF REGISTRATION FEE
===========================================================================================================
Title of Each Class Proposed Maximum Proposed Maximum Amount of
of Securities to be Amount of Shares Offering Price Aggregate Offering Registration
Registered to be Registered per Share (1) Price Fee
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Common Stock 10,000,000 $ 0.01 $100,000 $ 11.46
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(a) and (o) of the Securities Act.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
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PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED _________, 2012
PROSPECTUS
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE
SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
MODERN PVC INC.
10,000,000 SHARES OF COMMON STOCK
This is the initial offering of common stock of Modern PVC Inc. and no public
market currently exists for the securities being offered. We are offering for
sale a total of 10,000,000 shares of common stock at a fixed price of $.01 per
share. There is no minimum number of shares that must be sold by us for the
offering to proceed, and we will retain the proceeds from the sale of any of the
offered shares. We are making this offering without the involvement of
underwriters or broker-dealers. The shares of our common stock to be sold by us
will be sold on our behalf by our sole executive officer and director. Mr.
Vadims Horosevskis will not receive any compensation or commission on the
proceeds from the sale of our shares on our behalf, if any.
Offering Price Proceeds to Company
Per Share Commissions Before Expenses
--------- ----------- ---------------
Common Stock $ 0.01 Not Applicable $100,000
Total $ 0.01 Not Applicable $100,000
Modern PVC Inc. is a development stage company and currently has limited
operations. Any investment in the shares offered herein involves a high degree
of risk. You should only purchase shares if you can afford a loss of your
investment. Our independent registered public accountant has issued an audit
opinion for Modern PVC INC. which includes a statement expressing substantial
doubt as to our ability to continue as a going concern.
We are an "emerging growth company" as defined in the Jumpstart Our Business
Startups Act ("JOBS Act").
SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN INFORMATION THAT SHOULD BE
CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE COMMON STOCK OFFERED HEREBY.
There has been no market for our securities and a public market may never
develop, or, if any market does develop, it may not be sustained. Our common
stock is not traded on any exchange or on the over-the-counter market. After the
effective date of the registration statement relating to this prospectus, we
hope to have a market maker file an application with the Financial Industry
Regulatory Authority ("FINRA") for our common stock to be eligible for trading
on the Over-the-Counter Bulletin Board. We do not yet have a market maker who
has agreed to file such application. There can be no assurance that our common
stock will ever be quoted on a stock exchange or a quotation service or that any
market for our stock will develop.
THE PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH
DEGREE OF RISK. YOU SHOULD CAREFULLY READ AND CONSIDER THE SECTION OF THIS
PROSPECTUS ENTITLED "RISK FACTORS" ON PAGES 5 THROUGH 11 BEFORE BUYING ANY
SHARES OF MODERN PVC INC.'S COMMON STOCK.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED _________, 2012
TABLE OF CONTENTS
PROSPECTUS SUMMARY 3
RISK FACTORS 5
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS 11
USE OF PROCEEDS 11
DETERMINATION OF OFFERING PRICE 12
DILUTION 12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS 13
DESCRIPTION OF BUSINESS 17
EMPLOYEES AND EMPLOYMENT AGREEMENTS 19
LEGAL PROCEEDINGS 20
DIRECTORS, EXECUTIVE OFFICERS, PROMOTER AND CONTROL PERSONS 20
EXECUTIVE COMPENSATION 21
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 22
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 22
PLAN OF DISTRIBUTION 23
DESCRIPTION OF SECURITIES 24
DISCLOSURE OF COMMISSION POSITION INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES 25
LEGAL MATTERS 25
INTERESTS OF NAMED EXPERTS AND COUNSEL 25
EXPERTS 25
AVAILABLE INFORMATION 25
FINANCIAL STATEMENTS 26
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE 26
INDEX TO THE FINANCIAL STATEMENTS F-1
WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE ANY
INFORMATION OR REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU SHOULD
NOT RELY ON ANY UNAUTHORIZED INFORMATION. THIS PROSPECTUS IS NOT AN OFFER TO
SELL OR BUY ANY SHARES IN ANY STATE OR OTHER JURISDICTION IN WHICH IT IS
UNLAWFUL. THE INFORMATION IN THIS PROSPECTUS IS CURRENT AS OF THE DATE ON THE
COVER. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS.
2
PROSPECTUS SUMMARY
AS USED IN THIS PROSPECTUS, UNLESS THE CONTEXT OTHERWISE REQUIRES, "WE," "US,"
"OUR," AND "MODERN PVC INC." REFERS TO MODERN PVC INC. 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.
MODERN PVC INC.
We are a development stage company in the business of installation stretch
ceiling and re-selling of stretch fabric membrane to wholesale customers. Being
a development stage company, we have no revenues and have limited operating
history. Modern PVC Inc. was incorporated in Nevada on July 14, 2011. Our
principal executive office is located at 51-01 39th Avenue, Unit HH-12, Queens,
NY 11104. Our phone number is (773) 782- 6273. We intend to use the net proceeds
from this offering to develop our business operations (See "Description of
Business" and "Use of Proceeds").
Our company was formed to re-sell stretch fabric membrane. Stretch fabric
membrane is using to create stretch ceiling. We are planning to re-sell stretch
fabric membrane with installation this fabric at the customer's premises. Also
we are planning to develop a dealer network to resell fabric membrane to them.
Our target customers are owners of private homes and owners of business. Our
main competitors are homebuilders, contractors and other distributors of stretch
ceiling. We have developed our business plan, and entered into an agreement
dated November 14, 2011, with European Home Development Inc. ("EHDI"). EHDI
shall pay Modern PVC Inc. for all labor and materials the sum of $17 per square
feet. EHDI agrees to provide work to Modern PVC Inc. at EHD property. Modern PVC
shall furnish all labor and materials to install the PVC stretch ceiling on the
EHD property. With reasonable cause, either Owner or Contractor may terminate
this Agreement effective immediately by giving written notice of cause for
termination. Reasonable cause includes: nonpayment of Contractor's compensation
after 20 days written demand for payment. We have not commenced work on this
project yet.
Also we have paid deposit for stretch ceiling PVC membrane the amount of $2000
on 08/02/2012.From inception until the date of this filing, we have had very
limited operating activities. Our financial statements from inception (July 14,
2011) through the year ended April 30, 2012, reports no revenues and a net loss
of $3,344. Our independent registered public accounting firm has issued an audit
opinion for Modern PVC Inc. which includes a statement expressing substantial
doubt as to our ability to continue as a going concern.
We anticipate that we will derive income from two main sources: income from
installation stretch ceiling and from reselling fabric membrane. We do not
anticipate earning revenues until we enter into commercial operation. Since we
are presently in the development stage of our business, we can provide no
assurance that we will successfully assemble, construct and sell any products or
services related to our planned activities.
As of the date of this prospectus, there is no public trading market for our
common stock and no assurance that a trading market for our securities will ever
develop.
THE OFFERING
The Issuer: MODERN PVC INC.
Securities Being Offered: 10,000,000 shares of common stock
Price Per Share: $0.01
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Duration of the Offering: The offering shall terminate on the earlier of:
(i) the date when the sale of all 10,000,000
common shares is completed;
(ii) one year from the date of this prospectus; or
(iii) prior to one year at the sole determination
of the board of directors.
Net Proceeds: $100,000
Securities Issued and
Outstanding: There are 4,000,000 shares of common stock issued
and outstanding as of the date of this prospectus,
held solely by our President, Secretary, Vadims
Horosevskis
If we are successful at selling all the shares in
this offering, we will have 14,000,000 shares
issued and outstanding.
Registration Costs: We estimate our total offering registration costs
to be approximately $10,000.
Risk Factors: See "Risk Factors" and the other information in
this prospectus for a discussion of the factors
you should consider before deciding to invest in
shares of our common stock.
SUMMARY FINANCIAL INFORMATION
The tables and information below are derived from our audited financial
statements for the period from July 14, 2011 (Inception) to April 30, 2012.
April 30, 2012 ($)
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FINANCIAL SUMMARY
Cash and Deposits 3,856
Total Assets 3,856
Total Liabilities 3,749
Total Stockholder's Equity 3,856
Accumulated From
July 14, 2011 (Inception) to
April 30, 2012 ($)
------------------
STATEMENT OF OPERATIONS
Total Expenses 3,344
Net Loss for the Period (3,344)
Net Loss per Share 0.00
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RISK FACTORS
In addition to the other information in this prospectus Modern PVC Inc. has
identified a number of risk factors that the Company faces. You should carefully
consider the risks described below and the other information in this prospectus
before investing in our common stock. Investors should be aware of the existence
of these factors and should consider them carefully in evaluating our business
before purchasing the shares offered in this prospectus.
An investment in our common stock involves a high degree of risk. If any of the
following risks, or any other risks not described below because they are
currently unknown to us or we currently deem such risks as immaterial, but they
later become material, actually occurs, it is likely that our business,
financial condition, and operating results could be seriously harmed. The
trading price of our common stock, when and if we trade at a later date, could
decline due to any of these risks, and you may lose all or part of your
investment.
RISKS ASSOCIATED TO OUR BUSINESS
OUR INDEPENDENT AUDITOR HAS ISSUED A GOING CONCERN OPINION; OUR ABILITY TO
CONTINUE IS DEPENDENT ON OUR ABILITY TO RAISE ADDITIONAL CAPITAL AND OUR
OPERATIONS COULD BE CURTAILED IF WE ARE UNABLE TO OBTAIN REQUIRED ADDITIONAL
FUNDING WHEN NEEDED.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. For the period July 14, 2011 (date of
inception) through April 30, 2012 we had a net loss of $3,344. As of April 30,
2012, the Company has not emerged from the development stage. Our independent
auditor has expressed substantial doubt about our ability to continue as a going
concern. In view of these matters, recoverability of any asset amounts shown in
the accompanying financial statements is dependent upon the Company's ability to
begin operations and to achieve a level of profitability.
OUR SHORT OPERATING HISTORY MAKES OUR BUSINESS DIFFICULT TO EVALUATE
We are a development stage company, with no significant history of operations.
We were incorporated on July 14, 2011, and are a startup company with very
little operating history or revenues. Our business is in the early stage of
development and we have not generated any profit to date. Significant additional
development and marketing of our business is necessary prior to our achieving
significant revenues or profitability.
Accordingly, we have a limited operating history upon which to base an
evaluation of our business and prospects. Our business and prospects must be
considered in light of the risks, expenses and difficulties frequently
encountered by companies in their early stage of development, particularly
companies in rapidly evolving markets such as ours. To address these risks, we
must successfully implement our business plan and marketing strategies (See
"Plan of Operation" herein). We may not successfully implement all or any of our
business strategies or successfully address the risks and uncertainties that we
encounter. These potential uncertainties include, but are not limited to,
unanticipated problems relating to the ability to generate sufficient cash flow
to operate our business, and additional costs and expenses that may exceed
current estimates. Prior to having an inventory to sell, we anticipate that we
will incur increased operating expenses without realizing any revenues. We
expect to incur significant losses into the foreseeable future. We recognize
that if the effectiveness of our business plan is not forthcoming, we will not
be able to continue business operations. There is no history upon which to base
any assumption as to the likelihood that we will prove successful, and it is
doubtful that we will generate any operating revenues or ever achieve profitable
operations. If we are unsuccessful in addressing these risks, our business will
most likely fail.
AS WE ARE A DEVELOPMENT STAGE COMPANY, OUR FAILURE TO SECURE ADDITIONAL
FINANCING MAY AFFECT OUR ABILITY TO SURVIVE.
We will require additional financing in order to establish profitable operations
such financing may not be forthcoming. Even if additional financing is
available, it may not be available on terms we find favorable. Failure to secure
needed additional financing will have a very serious effect on our ability to
develop operations or maintain our business.
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IF WE DO NOT ATTRACT CUSTOMERS, WE WILL NOT MAKE A PROFIT, WHICH WILL ULTIMATELY
RESULT IN A CESSATION OF OPERATIONS.
We currently have no customers to purchase any goods or services from us. We
have not identified any customers and we cannot guarantee we ever will have any
customers. Even if we obtain customers, there is no guarantee that we will
generate a profit. If we cannot generate a profit, we will have to suspend or
cease operations. You are likely to lose your entire investment if we cannot
sell our product at prices which generate a profit.
GOVERNMENT REGULATION AND ENVIRONMENTAL MATTERS COULD ADVERSELY AFFECT OUR
OPERATIONS.
We must obtain the approval of numerous governmental authorities regulating
matters. We are also subject to local, state and federal statutes and rules
regulating environmental matters, zoning, building design which could result in
delays and cause us to incur substantial compliance costs.
Our ability to obtain necessary approvals and permits will be often beyond our
control and could restrict and delay our operations, which could adversely
affect our company financial condition.
FAILURE OF THIRD PARTIES TO MANUFACTURE QUALITY PRODUCTS OR PROVIDE RELIABLE
SERVICES IN A TIMELY MANNER COULD CAUSE DELAYS IN THE DELIVERY OF OUR SERVICES
AND COMPLETION OF OUR PROJECTS, WHICH COULD DAMAGE OUR REPUTATION, HAVE A
NEGATIVE IMPACT ON OUR RELATIONSHIPS WITH OUR CUSTOMERS AND ADVERSELY AFFECT OUR
GROWTH.
Our success depends on our ability to provide services and complete projects in
a timely manner, which in part depends on the ability of third parties to
provide us with timely and reliable services and PVC products, lighting and
other complex components. In providing our services and completing our projects,
we rely on products that meet our design specifications
The warranties provided by our third-party suppliers typically limit any direct
harm we might experience as a result of our relying on their products and
services. However, there can be no assurance that a supplier will be willing or
able to fulfill its contractual obligations and make necessary repairs or
replace equipment. In addition, these warranties generally expire within one to
five years or may be of limited scope or provide limited remedies. If we are
unable to avail ourselves of warranty protection, we may incur liability to our
customers or additional costs related to the affected products and components,
including replacement and installation costs, which could have a material
adverse effect on our business, financial condition and operating results.
Moreover, any delays, malfunctions, inefficiencies or interruptions in these
products or services -- even if covered by warranties -- could adversely affect
the quality and performance of our solutions. This could cause us to experience
difficulty retaining current customers and attracting new customers, and could
harm our brand, reputation and growth. In addition, any significant interruption
or delay by our suppliers in the manufacture or delivery of products or services
on which we depend could require us to expend considerable time, effort and
expense to establish alternate sources for such products and services.
WE ARE EXPOSED TO THE CREDIT RISK OF SOME OF OUR FUTURE CUSTOMERS.
Our revenue will be dependent to a large extent on the creditworthiness of our
future customers. During periods of economic downturn in the global economy, our
exposure to credit risks from our customers increase, and our efforts to monitor
and mitigate the associated risks may not be effective in reducing our credit
risks. In the event of non-payment by one or more of our customers, our
business, financial condition and operating results could be adversely affected.
THE NATURE OF OUR BUSINESS EXPOSES US TO POTENTIAL LIABILITY CLAIMS AND CONTRACT
DISPUTES WHICH MAY REDUCE OUR PROFITS.
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Although we have not been party to any legal claims against us, we may in future
be named as a defendant in legal proceedings where parties may make a claim for
damages or other remedies with respect to our projects or other matters. If it
is determined that we have liability, we may not be covered by insurance or, if
covered, the dollar amount of these liabilities may exceed our policy limits.
Any liability not covered by our insurance, in excess of our insurance limits
or, if covered by insurance but subject to a high deductible, could result in a
significant loss for us, which claims may reduce our profits and cash available
for operations.
OPERATING HAZARDS
A significant portion of the Company's business will consist of the assembly and
installation of PVC ceiling. This process can cause personal injury and loss of
life, severe damage to or destruction of property and equipment and
environmental damage, and may result in suspension of operations of all or part
of the facility being serviced. While the Company will maintain insurance
coverage in the amounts and against the risks that it believes are in accordance
with industry practice, no assurance can be given that this insurance will be
adequate to cover all losses or liabilities the Company may incur in its
operations or that the Company will be able to maintain insurance of the types
or at levels it deems necessary or adequate or at rates it considers reasonable.
SHIPPING
We will rely on independent third-party transportation providers for
substantially all of our merchandise shipments. We could be subject to increased
shipping cost as well as the potential inability of our third-party
transportation providers to deliver on a timely basis.
Our utilization of these delivery services for shipments is subject to risks,
including increases in fuel prices, which would increase our shipping costs,
labor strikes and inclement weather, which may impact a shipping company's
ability to provide delivery services that adequately meet our shipping needs. If
we change the shipping companies we use, we could face logistical difficulties
that could adversely affect deliveries and we would incur costs and expend
resources in connection with such change. Moreover, we may not be able to obtain
terms as favorable as those received from our current third-party transportation
providers which in turn would increase our costs.
CURRENCY RATE FLUCTUATIONS MAY HAVE A NEGATIVE EFFECT ON OUR PROFITABILITY.
We will endeavor to source our potential clients around the world, so we are
likely to be affected by changes in foreign exchange rates. To protect our
business, we may enter into foreign currency exchange contracts with major
financial institutions to hedge the overseas purchase transactions and limit our
exposure to those fluctuations. If we are not able to successfully protect
ourselves against those currency rate fluctuations, then our profits on the
products subject to those fluctuations would also fluctuate and could cause us
to be less profitable or incur losses, even if our business is doing well.
COMPETITION
We are going to work in industry which is highly fragmented and competitive and
is serving principally by small, owner-operated private companies. The Company
will compete for sales with numerous companies in each of its markets. Certain
of these smaller competitors have lower overhead cost structures and maybe able
to provide their services at lower rates than the Company. There can be no
assurance that the Company will not encounter increased competition from
existing competitors or new market entrants that may be significantly larger and
have greater financial and marketing resources. In addition, to the extent
existing or future competitors seek to gain or retain market share by reducing
prices, the Company may be required to lower its prices, which may adversely
affect operating results.
GENERAL ECONOMIC CONDITIONS
The Company believes that our industry is sensitive to economic and competitive
conditions, including national, regional and local slowdowns in construction,
commercial, industrial and/or real estate activity. In addition, the Company's
operating results may be adversely affected by increases in interest rates that
may lead to a decline in economic activity. There can be no assurance that
adverse or other economic or competitive conditions will not have a material
adverse effect on the Company's operating results and financial condition.
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OUR SOLE OFFICER AND DIRECTOR HAS NO EXPERIENCE MANAGING A PUBLIC COMPANY WHICH
IS REQUIRED TO ESTABLISH AND MAINTAIN DISCLOSURE CONTROLS AND PROCEDURES AND
INTERNAL CONTROL OVER FINANCIAL REPORTING.
We have never operated as a public company. Vadims Horosevskis, our sole officer
and director has no experience managing a public company which is required to
establish and maintain disclosure controls and procedures and internal control
over financial reporting. As a result, we may not be able to operate
successfully as a public company, even if our operations are successful. We plan
to comply with all of the various rules and regulations, which are required for
a public company. However, if we cannot operate successfully as a public
company, your investment may be materially adversely affected. Our inability to
operate as a public company could be the basis of losing your entire investment
in us.
WE HAVE NO EMPLOYEES. OUR SOLE OFFICER AND DIRECTOR, VADIMS HOROSEVSKIS, IS AN
INDEPENDENT CONTRACTOR TO US
Mr. Horosebskis currently devotes approximately 50% of his time, providing
management services to us. While he presently possesses adequate time to attend
to our interest, it is possible that the demands on him from other obligations
could increase, with the result that he would no longer be able to devote
sufficient time to the management of our business. The loss of Mr..Horosevskis
to our company could negatively impact our business development.
AS AN "EMERGING GROWTH COMPANY" UNDER THE JOBS ACT, WE ARE PERMITTED TO RELY ON
EXEMPTIONS FROM CERTAIN DISCLOSURE REQUIREMENTS.
We qualify as an "emerging growth company" under the JOBS Act. As a result, we
are permitted to, and intend to, rely on exemptions from certain disclosure
requirements. For so long as we are an emerging growth company, we will not be
required to:
- have an auditor report on our internal controls over financial
reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;
- comply with any requirement that may be adopted by the Public Company
Accounting Oversight Board regarding mandatory audit firm rotation or
a supplement to the auditor's report providing additional information
about the audit and the financial statements (i.e., an auditor
discussion and analysis);
- submit certain executive compensation matters to shareholder advisory
votes, such as "say-on-pay" and "say-on-frequency;" and
- disclose certain executive compensation related items such as the
correlation between executive compensation and performance and
comparisons of the Chief Executive's compensation to median employee
compensation.
In addition, Section 107 of the JOBS Act also provides that an emerging growth
company can take advantage of the extended transition period provided in Section
7(a)(2)(B) of the Securities Act for complying with new or revised accounting
standards. In other words, an emerging growth company can delay the adoption of
certain accounting standards until those standards would otherwise apply to
private companies. We have elected to take advantage of the benefits of this
extended transition period. Our financial statements may therefore not be
comparable to those of companies that comply with such new or revised accounting
standards.
We will remain an "emerging growth company" for up to five years, or until the
earliest of (i) the last day of the first fiscal year in which our total annual
gross revenues exceed $1 billion, (ii) the date that we become a "large
accelerated filer" as defined in Rule 12b-2 under the Securities Exchange Act of
1934, which would occur if the market value of our ordinary shares that is held
by non-affiliates exceeds $700 million as of the last business day of our most
recently completed second fiscal quarter or (iii) the date on which we have
issued more than $1 billion in non-convertible debt during the preceding three
year period.
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Until such time, however, we cannot predict if investors will find our common
stock less attractive because we may rely on these exemptions. If some investors
find our common stock less attractive as a result, there may be a less active
trading market for our common stock and our stock price may be more volatile.
RISKS ASSOCIATED WITH THIS OFFERING
THE REGULATION OF PENNY STOCKS BY THE SEC AND FINRA MAY DISCOURAGE THE
TRADABILITY OF THE COMPANY'S SECURITIES.
The shares being offered are defined as a penny stock under the Securities and
Exchange Act of 1934, as amended (the "Exchange Act"), and rules of the
Commission. We are subject to a Securities and Exchange Commission rule that
imposes special sales practice requirements upon broker-dealers who sell such
securities to persons other than established customers or accredited investors.
For purposes of the rule, the phrase "accredited investors" means, in general
terms, institutions with assets in excess of $5,000,000, or individuals having a
net worth in excess of $1,000,000 or having an annual income that exceeds
$200,000 (or that, when combined with a spouse's income, exceeds $300,000). For
transactions covered by the rule, the broker-dealer must make a special
suitability determination of the purchaser and receive the purchaser's written
agreement to the transaction prior to the sale. Effectively, this discourages
broker-dealers from executing trades in penny stocks. Consequently, the rule
will affect the ability of purchasers in this offering to sell their securities
in any market that might develop, because it imposes additional regulatory
burdens on penny stock transactions.
WE ARE SELLING THIS OFFERING WITHOUT AN UNDERWRITER AND MAY BE UNABLE TO SELL
ANY SHARES.
This offering is self-underwritten, that is, we are not going to engage the
services of an underwriter to sell the shares; we intend to sell our shares
through our President Vadims Horosevskis, who will receive no commissions. He
will offer the shares to friends, family members, and business associates.
However, there is no guarantee that he will be able to sell any of the shares.
Unless he is successful in selling all of the shares and we receive the proceeds
from this offering, we may have to seek alternative financing to implement our
business plan.
DUE TO THE LACK OF A TRADING MARKET FOR OUR SECURITIES, YOU MAY HAVE DIFFICULTY
SELLING ANY SHARES YOU PURCHASE IN THIS OFFERING.
We are not registered on any market or public stock exchange. There is presently
no demand for our common stock and no public market exists for the shares being
offered in this prospectus. We plan to contact a market maker immediately
following the completion of the offering and apply to have the shares quoted on
the Over-the-Counter Bulletin Board ("OTCBB"). The OTCBB is a regulated
quotation service that displays real-time quotes, last sale prices and volume
information in over-the-counter securities. The OTCBB is not an issuer listing
service, market or exchange. Although the OTCBB does not have any listing
requirements per se, to be eligible for quotation on the OTCBB, issuers must
remain current in their filings with the SEC or applicable regulatory authority.
Market makers are not permitted to begin quotation of a security whose issuer
does not meet this filing requirement. Securities already quoted on the OTCBB
that become delinquent in their required filings will be removed following a 30
to 60 day grace period if they do not make their required filing during that
time. We cannot guarantee that our application will be accepted or approved and
our stock listed and quoted for sale. As of the date of this filing, there have
been no discussions or understandings between Modern PVC Inc. and anyone acting
on our behalf, with any market maker regarding participation in a future trading
market for our securities. If no market is ever developed for our common stock,
it will be difficult for you to sell any shares you purchase in this offering.
In such a case, you may find that you are unable to achieve any benefit from
your investment or liquidate your shares without considerable delay, if at all.
In addition, if we fail to have our common stock quoted on a public trading
market, your common stock will not have a quantifiable value and it may be
difficult, if not impossible, to ever resell your shares, resulting in an
inability to realize any value from your investment.
9
WE WILL INCUR ONGOING COSTS AND EXPENSES FOR SEC REPORTING AND COMPLIANCE.
WITHOUT REVENUE WE MAY NOT BE ABLE TO REMAIN IN COMPLIANCE, MAKING IT DIFFICULT
FOR INVESTORS TO SELL THEIR SHARES, IF AT ALL.
We plan to contact a market maker immediately following the close of the
offering and apply to have the shares quoted on the OTC Electronic Bulletin
Board. To be eligible for quotation, issuers must remain current in their
filings with the SEC. In order for us to remain in compliance we will require
future revenues to cover the cost of these filings, which could comprise a
substantial portion of our available cash resources. If we are unable to
generate sufficient revenues to remain in compliance it may be difficult for you
to resell any shares you may purchase, if at all.
THE COMPANY'S INVESTORS MAY SUFFER FUTURE DILUTION DUE TO ISSUANCES OF SHARES
FOR VARIOUS CONSIDERATIONS IN THE FUTURE.
Our Articles of Incorporation authorizes the issuance of 75,000,000 shares of
common stock, par value $.001 per share, of which 4,000,000 shares are currently
issued and outstanding. If we sell the 10,000,000 shares being offered in this
offering, we would have 14,000,000 shares issued and outstanding. As discussed
in the "Dilution" section below, the issuance of the shares of common stock
described in this prospectus will result in substantial dilution in the
percentage of our common stock held by our existing shareholders. The issuance
of common stock for future services or acquisitions or other corporate actions
may have the effect of diluting the value of the shares held by our investors,
and might have an adverse effect on any trading market for our common stock.
STATE SECURITIES LAWS MAY LIMIT SECONDARY TRADING, WHICH MAY RESTRICT THE STATES
IN WHICH AND CONDITIONS UNDER WHICH YOU CAN SELL THE SHARES OFFERED BY THIS
PROSPECTUS.
Secondary trading in common stock sold in this offering will not be possible in
any state until the common stock is qualified for sale under the applicable
securities laws of the state or there is confirmation that an exemption, such as
listing in certain recognized securities manuals, is available for secondary
trading in the state. If we fail to register or qualify, or to obtain or verify
an exemption for the secondary trading of, the common stock in any particular
state, the common stock could not be offered or sold to, or purchased by, a
resident of that state. In the event that a significant number of states refuse
to permit secondary trading in our common stock, the liquidity for the common
stock could be significantly impacted thus causing you to realize a loss on your
investment.
WE MAY BE EXPOSED TO POTENTIAL RISKS AND SIGNIFICANT EXPENSES RESULTING FROM THE
REQUIREMENTS UNDER SECTION 404 OF THE SARBANES-OXLEY ACT OF 2002.
We will be required, pursuant to Section 404 of the Sarbanes-Oxley Act of 2002,
to include in our annual report our assessment of the effectiveness of our
internal control over financial reporting. We expect to incur significant
continuing costs, including accounting fees and staffing costs, in order to
maintain compliance with the internal control requirements of the Sarbanes-Oxley
Act of 2002. Development of our business will necessitate ongoing changes to our
internal control systems, processes and information systems. If our business
develops and grows, our current design for internal control over financial
reporting will not be sufficient to enable management to determine that our
internal controls are effective for any period, or on an ongoing basis.
Accordingly, as we develop our business, such development and growth will
necessitate changes to our internal control systems, processes and information
systems, all of which will require additional costs and expenses.
In the future, if we fail to complete the annual Section 404 evaluation in a
timely manner, we could be subject to regulatory scrutiny and a loss of public
confidence in our internal controls. In addition, any failure to implement
required new or improved controls, or difficulties encountered in their
implementation, could harm our operating results or cause us to fail to meet our
reporting obligations. However, as an "emerging growth company," as defined in
the JOBS Act, our independent registered public accounting firm will not be
required to formally attest to the effectiveness of our internal control over
financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002
until the later of the year following our first annual report required to be
filed with the SEC, or the date we are no longer an emerging growth company. At
10
such time, our independent registered public accounting firm may issue a report
that is adverse in the event it is not satisfied with the level at which our
controls are documented, designed or operating.
BECAUSE WE ARE NOT SUBJECT TO COMPLIANCE WITH RULES REQUIRING THE ADOPTION OF
CERTAIN CORPORATE GOVERNANCE MEASURES, OUR SHAREHOLDERS HAVE LIMITED PROTECTIONS
AGAINST INTERESTED DIRECTOR TRANSACTIONS, CONFLICTS OF INTEREST AND SIMILAR
MATTERS.
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 which 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 necessary, we
have not yet adopted these measures.
Because none of our directors are independent, we do not currently have
independent audit or compensation committees. As a result, the director has the
ability, among other things, to determine his 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 shareholders without protections against interested director
transactions, conflicts of interest and similar matters and investors may be
reluctant to provide us with funds necessary to expand our operations.
THE COSTS TO MEET OUR REPORTING AND OTHER REQUIREMENTS AS A PUBLIC COMPANY
SUBJECT TO THE EXCHANGE ACT OF 1934 ARE SUBSTANTIAL AND MAY RESULT IN US HAVING
INSUFFICIENT FUNDS TO EXPAND OUR BUSINESS OR EVEN TO MEET ROUTINE BUSINESS
OBLIGATIONS.
As a public entity subject to the reporting requirements of the Exchange Act of
1934, we incur ongoing expenses associated with professional fees for
accounting, legal and SEC filings and compliance. We estimate that these costs
will increase if our business volume and activity increases. As a result of such
expenses, we may not have sufficient funds to grow our operations.
FORWARD LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve risk and
uncertainties. We use words such as "anticipate", "believe", "plan", "expect",
"future", "intend", and similar expressions to identify such forward-looking
statements. Investors should be aware that all forward-looking statements
contained within this filing are good faith estimates of management as of the
date of this filing. Our actual results could differ materially from those
anticipated in these forward-looking statements for many reasons, including the
risks faced by us as described in the "Risk Factors" section and elsewhere in
this prospectus.
USE OF PROCEEDS
Our offering is being made on a self-underwritten basis: no minimum number of
shares must be sold in order for the offering to proceed. The offering price per
share is $0.01. The following table sets forth the uses of proceeds assuming the
sale of 50% and 100%, respectively, of the securities offered for sale by the
Company. There is no assurance that we will raise the full $100,000 as
anticipated.
$25,000 $50,000 $75,000 $100,000
------- ------- ------- --------
Legal and professional fees $10,000 $10,000 $10,000 $10,000
Net proceeds $15,000 $40,000 $65,000 $90,000
The net proceed will be used:
Tools, equipment $ 1,000 $ 2,000 $14,000 $14,000
Marketing, advertising $ 5,000 $10,000 $10,000 $12,000
Establishing an office $ 2,000 $ 2,000 $ 2,000 $ 2,000
Sales person salary $ -- $ -- $ 8,000 $ 8,000
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Inventory of stretch membrane $ 4,000 $ 5,000 $10,000 $31,000
Warehouse rent $ -- $18,000 $18,000 $18,000
Transportation $ 3,000 $ 3,000 $ 3,000 $ 5,000
Except for fixed costs, the amounts actually spent by us for any specific
purpose may vary and will depend on a number of factors. Non-fixed cost, sales
and marketing and general and administrative costs may vary depending on the
business progress and development efforts, general business conditions and
market reception to our services. Accordingly, our management has broad
discretion to allocate the net proceeds to non-fixed costs.
An example of changes to this spending allocation for non-fixed costs include
Management deciding to spend less of the allotment on product development and
more on sales and marketing. Such changes to spending may occur due to seasonal
variations in market demand for our products and services relative to when the
funds are received.
Vadims Horosevskis, our sole officer and director, has verbally agreed to loan
the company funds to complete the registration process but we will require full
funding to implement our complete business plan.
DETERMINATION OF OFFERING PRICE
The offering price of the shares has been determined arbitrarily by us. It is
not based upon an independent assessment of the value of our shares and should
not be considered as such. The price does not bear any relationship to our
assets, book value, earnings, or other established criteria for valuing a
privately held company. In determining the number of shares to be offered and
the offering price, we took into consideration our cash on hand and the amount
of money we would need to implement our business plan. Accordingly, the offering
price should not be considered an indication of the actual value of the
securities.
DILUTION
The price of the current offering is fixed at $0.01 per common share. This price
is significantly higher than the price paid by our sole director and officer for
common equity since the Company's inception on July 14, 2011. Vadims
Horosevskis, our sole officer and director, paid $0.001 per share for the
4,000,000 common shares
Assuming completion of the offering, there will be up to 14,000,000 common
shares outstanding. The following table illustrates the per common share
dilution that may be experienced by investors at various funding levels.
Funding Level $100,000 $75,000 $50,000 $25,000
------------- -------- ------- ------- -------
Offering price $0.01 $0.01 $0.01 $0.01
Net tangible book $0.001 $0.001 $0.001 $ .001
value per common
share before offering
Increase per common $0.0065 $0.0060 $0.0051 $0.0035
share attributable to
investors
Pro forma net tangible $0.0074 $0.0068 $0.0059 $0.0044
book value per common
share after offering
Dilution to investors $0.0026 $0.0032 $0.0041 $0.0056
Dilution as a percentage 26% 32% 41% 56%
of offering price
Based on 4,000,000 common shares outstanding as of January 31, 2012 and total
stockholder's equity of $3451 utilizing audited January 31, 2012 financial
statements.
12
Since inception, the officers, directors, promoters and affiliated persons have
paid an aggregate average price of $.001 per common share in comparison to the
offering price of $.01 per common share.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
You should read the following discussion and analysis of our financial condition
and results of operations together with our consolidated financial statements
and the related notes and other financial information included elsewhere in this
prospectus. Some of the information contained in this discussion and analysis or
set forth elsewhere in this prospectus, including information with respect to
our plans and strategy for our business and related financing, includes
forward-looking statements that involve risks and uncertainties. You should
review the "Risk Factors" section of this prospectus for a discussion of
important factors that could cause actual results to differ materially from the
results described in or implied by the forward-looking statements contained in
the following discussion and analysis.
We qualify as an "emerging growth company" under the JOBS Act. As a result, we
are permitted to, and intend to, rely on exemptions from certain disclosure
requirements. For so long as we are an emerging growth company, we will not be
required to:
* have an auditor report on our internal controls over financial
reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;
* comply with any requirement that may be adopted by the Public Company
Accounting Oversight Board regarding mandatory audit firm rotation or
a supplement to the auditor's report providing additional information
about the audit and the financial statements (i.e., an auditor
discussion and analysis);
* submit certain executive compensation matters to shareholder advisory
votes, such as "say-on-pay" and "say-on-frequency;" and
* disclose certain executive compensation related items such as the
correlation between executive compensation and performance and
comparisons of the CEO's compensation to median employee compensation.
In addition, Section 107 of the JOBS Act also provides that an emerging growth
company can take advantage of the extended transition period provided in Section
7(a)(2)(B) of the Securities Act for complying with new or revised accounting
standards. In other words, an emerging growth company can delay the adoption of
certain accounting standards until those standards would otherwise apply to
private companies. We have elected to take advantage of the benefits of this
extended transition period. Our financial statements may therefore not be
comparable to those of companies that comply with such new or revised accounting
standards.
We will remain an "emerging growth company" for up to five years, or until the
earliest of (i) the last day of the first fiscal year in which our total annual
gross revenues exceed $1 billion, (ii) the date that we become a "large
accelerated filer" as defined in Rule 12b-2 under the Securities Exchange Act of
1934, which would occur if the market value of our ordinary shares that is held
by non-affiliates exceeds $700 million as of the last business day of our most
recently completed second fiscal quarter or (iii) the date on which we have
issued more than $1 billion in non-convertible debt during the preceding three
year period.
PLAN OF OPERATION
To meet our need for cash we are attempting to raise money from this offering.
We believe that we will be able to raise enough money through this offering to
run our operations but we cannot guarantee this. If we are unable to
successfully find customers we may quickly use up the proceeds from this
offering and will need to find alternative sources. At the present time, we have
not made any arrangements to raise additional cash, other than through this
offering.
13
We plan to implement our business plan based on when funds become available. We
do not intend to hire employees during the first year. Our sole officer and
director will handle our administrative duties. Based on availability of funds,
our proposed 12 month business plan will consists of the following specific
milestones:
SET UP OFFICE, PRINT ADVERTISING MATERILALS
Period: 1st -2nd months
The steps in this milestone are as follows:
1) Establish our office.
2) Print advertising materials such as color brochure describing stretch
ceiling and advantage of using our company for installation of stretch
ceiling.
3) Purchase tools.
4) Start to install stretch ceiling.
Minimum expenses: Computer (laptop): $1,000, office table and chairs: $1,000.
Printing of brochures: $1,000.Tools: $1,000. Total: $4,000.
DISTRIBUTE PROMOTIONAL MATERIAL, DEVELOP WEBSITE
Period: 3rd - 4th months
The steps in this milestone are as follows:
1) Hire an independent contractor to develop our website. Our website will be
used to show different styles and colors of stretch ceilings and prices.
Potential customers will see pictures of examples where and how stretch
ceiling could be used.
2) Distribute printed materials at New York area constructions and renovations
companies aiming to execute agreements with construction and renovations
companies for use of our product and services.
3) Search Engine Optimizer:
Hire contractor for following tasks: Add search engine optimized content to our
website profile to increase page rank, and traffic by making content relevant,
well written, and making good use of keywords and key phrases. This service will
cost approximately $500 monthly.
4) Purchase minivan for transportation needs. (Dodge Caravan or similar).
5) Start search for potential European supplier of PVC membrane. Also we will
start to look for wholesale purchasers of membrane.
Minimum expenses: Developing of web site $1,000, hosting, $100 per year
Newspaper advertising $2900. Minivan $5,000. Total: $9,500.
HIRE ONE SALES /PROMOTER PERSON
Period: 5th-6th month
The steps in this milestone are as follows:
1) Hire one sales/promoter person to help us deal with customer service and
promote ours services. Sales person will earn 10% commission from sales.
2) Locate warehouse space to store popular colors and finishes. This will be
convenient for our customers and dealers because they do not have to wait
for delivery from Europe. This warehouse will also be used for our own
stretch ceiling production. We are going to place High Frequency Plastic
Welding Machine there. According to the manufacturer of welding machine
this place has to meet following requirements: 1) size: minimum 15 feet
wide and 50 feet long; 1) Premises must be dry, with good air circulation;
3) Floor must be painted with 3 layers of paint.
3) Purchase membrane most popular colors and finishes to keep at our
warehouse.
Minimum expenses: Warehouse rent $3,000 monthly. Warehouse equipment and
preparing warehouse for work $4000. Stretch ceiling inventory $25,000. Total
$32,000
OPEN LINE OF STRETCH CEILING PRODUCTION AND WHOLESALE.
Period: 7th-8th month
The steps in this milestone are as follows:
Purchase High Frequency Plastic Welding Machine from Taiwanese manufacturer
(www.weldech), which has agreed to sell to us their High Frequency Plastic
Welding Machine for $8,000 with delivery to New York port.
Start manufacturing of PVC stretch membrane; the following three steps are
involved:
i) Purchasing raw materials: (PVC membrane in rolls) from European
manufacturers.
ii) Measuring and cutting each order as specified by customer.
iii) Welding pieces at special High Frequency Plastic Welding Machine.
14
Our plan is to start selling our product to wholesale buyers at this time.
Minimum expenses: High Frequency Plastic Welding Machine $8,000.
HIRE SERVICE PERSON
Period: 9th-10th month
1) Hire one service person to assist with installation of stretch ceiling.
2) Purchase special computer software which will make drawings of specific
measurements ordered by customers. This software will be distributed to our
dealers and will be used to accept orders.
Minimum expenses: Service person salary $2,000 monthly, developing of software:
$1,000.
START TO BUILD DEALERS NETWORK
11th-12th month
1) Execute agreement with distributors and independent installers. We will
provide: complete information support, consulting, software for measuring
and calculation of ceiling, convenient shipping, and fast delivery.
2) Advertise in New York area newspapers and radio.
3) Purchase additional stretch ceiling inventory.
Minimum expenses: Advertising $3,000, Inventory $16,000.
COMPLETE OUR PUBLIC OFFERING
We expect to complete our public offering within 180 days after the
effectiveness of our registration statement by the Securities and Exchange
Commissions. We intend to concentrate our efforts on raising capital during this
period. Our operations will be limited due to the limited amount of funds on
hand.
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources.
LIMITED OPERATING HISTORY
There is no historical financial information about us upon which to base an
evaluation of our performance. We are in start-up stage operations and have not
generated any revenues. We cannot guarantee we will be successful in our
business operations. Our business is subject to risks inherent in the
establishment of a new business enterprise, including limited capital resources
and possible cost overruns due to price and cost increases in services and
products.
RESULTS OF OPERATIONS
FROM INCEPTION ON JULY 14, 2011 TO APRIL 30,2012
During the period we incorporated the company, prepared a business plan and
executed an Agreement with European Home Development Inc. ("EHDI"). Pursuant to
this agreement, we will furnish the material and install to install PVC stretch
ceiling on the property of EHDI. Within 30 days of us sending them an invoice,
which we intend to do upon completion, EHDI shall pay us for all labor and
materials at the sum of $17 per square feet.
Our loss since inception is3,344 for filing costs related to the incorporation
of the Company. We have not meaningfully commenced our proposed business
operations and will not do so until we have completed this offering.
We have generated no revenue since inception due to the fact that we are a
development stage company and have not yet made any installation or re-selling
of stretch ceiling our products.
Since inception, we have sold 4,000,000 shares of common stock to our sole
officer and director for net proceeds of $4,000.
15
LIQUIDITY AND CAPITAL RESOURCES
As of April 30, 2012 the Company had $ 3,856 cash and our liabilities were
$3,749, comprising $ 3,749 owed to Vadims Horosevskis, our sole officer and
director.
Since inception, we have sold 4,000,000 shares of common stock in one offer and
sale, which was to our sole officer and director, at a price of $0.001 per
share, for aggregate proceeds of $4,000.
To meet a part our need for cash we are attempting to raise money from this
offering. We cannot guarantee that we will be able to sell all the shares
required. If we are successful, any money raised will be applied to the items
set forth in the Use of Proceeds section of this prospectus. We will attempt to
raise the necessary funds to proceed with all phases of our plan of operation.
The sources of funding we may consider to fund this work include a public
offering, a private placement of our securities or loans from our director or
others.
Therefore, the failure thereof would result in the need to seek capital from
other resources such as taking loans, which would likely not even be possible
for the Company. However, if such financing were available, because we are a
development stage company with no operations to date, we would likely have to
pay additional costs associated with high risk loans and be subject to an above
market interest rate. At such time these funds are required, management would
evaluate the terms of such debt financing. If the Company cannot raise
additional proceeds via a private placement of its equity or debt securities, or
secure a loan, the Company would be required to cease business operations. As a
result, investors would lose all of their investment.
Our auditors have issued a "going concern" opinion, meaning that there is
substantial doubt if we can continue as an on-going business for the next twelve
months unless we obtain additional capital. No substantial revenues are
anticipated until we have completed the financing from this offering and
implemented our plan of operations. Our only source for cash at this time is
investments by others in this offering. We must raise cash to implement our
strategy and stay in business. The amount of the offering will likely allow us
to operate for at least one year and have the capital resources required to
cover the material costs with becoming a publicly reporting. The company
anticipates over the next 12 months the cost of being a reporting public company
will be approximately $10,000.
Should the Company fail to sell less than all its shares under this offering the
Company would be forced to scale back or abort completely the implementation of
its 12-month plan of operation.
SIGNIFICANT ACCOUNTING POLICIES
Our financial statements have been prepared in accordance with generally
accepted accounting principles in the United States. Because a precise
determination of many assets and liabilities is dependent upon future events,
the preparation of financial statements for a period necessarily involves the
use of estimates which have been made using careful judgment. The financial
statements have, in our opinion, been properly prepared within reasonable limits
of materiality and within the framework of the significant accounting policies
summarized below:
BASIS OF PRESENTATION
The Company reports revenues and expenses use the accrual method of accounting
for financial and tax reporting purposes. The accounting and reporting policies
of the Company conform to U.S. generally accepted accounting principles (US
GAAP) applicable to development stage companies
USE OF ESTIMATES
Management uses estimates and assumption in preparing these financial statements
in accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses.
16
DEPRECIATION, AMORTIZATION AND CAPITALIZATION
The Company records depreciation and amortization when appropriate using both
straight-line and declining balance methods over the estimated useful life of
the assets (five to seven years). Expenditures for maintenance and repairs are
charged to expense as incurred. Additions, major renewals and replacements that
increase the property's useful life are capitalized. Property sold or retired,
together with the related accumulated depreciation is removed from the
appropriated accounts and the resultant gain or loss is included in net income.
INCOME TAXES
The Company accounts for income taxes under ASC 740 "INCOME TAXES" which
codified SFAS 109, "ACCOUNTING FOR INCOME TAXES" and FIN 48 "ACCOUNTING FOR
UNCERTAINTY IN INCOME TAXES - AN INTERPRETATION OF FASB STATEMENT NO. 109."Under
the asset and liability method of ASC 740, deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences
between the financial statements carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. Under ASC 740, the effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period the enactment occurs.
A valuation allowance is provided for certain deferred tax assets if it is more
likely than not that the Company will not realize tax assets through future
operations.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Financial Accounting Standards statements No. 107, "Disclosures About Fair Value
of Financial Instruments", requires the Company to disclose, when reasonably
attainable, the fair market values of its assets and liabilities which are
deemed to be financial instruments. The Company's financial instruments consist
primarily of cash.
PER SHARE INFORMATION
The Company computes per share information by dividing the net loss for the
period presented by the weighted average number of shares outstanding during
such period.
DESCRIPTION OF BUSINESS
GENERAL
We were incorporated in the State of Nevada on July 14, 2011. We are in the
business of installation stretch ceiling and re-selling of stretch fabric
membrane. We plan to purchase inventory of stretch PVC fabric membrane directly
from manufacturers and re-sell them to private and commercial buyers. We plan to
develop a website that will display a variety of stretch PVC fabric membranes
and describe where customers can use that membrane and our installation prices.
We have not generated any revenues and the only operation we have engaged in to
date is executing a subcontractor agreement with European Home Development Inc.
Our principal office address is located at 51-01 39th Avenue Unit HH-12, Queens,
NY 11104. Our telephone number is (773) 782-6273. Our plan of operation is
forward-looking and there is no assurance that we will ever reach profitable
operations. We are a development stage company and have not earned any revenue
to date
PRODUCT
Stretch Ceiling is a suspended ceiling system consisting of two basic components
- a perimeter track and lightweight fabric membrane made from PVC which
stretches and clips into the track. In addition to ceilings the system can be
used for wall coverings, light diffusers, floating panels, exhibitions and
creative shapes. Advantage of installing stretch ceiling: Blends with
traditional and modern decor, can be installed quickly; is leak proof, water
proof & stain resistant; is durable, and don't crack or peel. Additionally:
17
1. Meets fire regulations
2. easy to clean
3. Performs well in humid environments
4. lightweight
5. Resists bacteria and mold growth
6. Improve thermal & sound insulation
7. Emits no odor or fumes
8. Requires no special cleaning techniques
Fabric is made from Polyvinyl Chloride, commonly abbreviated PVC, is a
thermoplastic polymer. PVC is widely used in construction because it is cheap,
durable, and easy to assemble. PVC production is expected to exceed 40 million
tons by 2016 (en.wikipedia.org). The material comes in a vast array of Colors
and Finishes including Matt, Satin, Lacquer (mirror like), Metallic, Perforated,
and Translucent for lighting diffusers, backlighting & projection. The material
can be printed or painted for additional effects, is entirely waterproof,
washable and impermeable to vapors. The Material is maintenance free,
non-corrosive, hygienic, non-toxic and non-flammable. Track is typically the
aluminum or pvc semi-concealed track is the preferred choice for most architects
and designers, enabling curves, domes, vaults and many other shapes to be formed
with ease. Installing stretch ceiling is relatively quick and simple for trained
installers. To install a stretch ceiling, a wall-rail is mounted around the
perimeter of the room, on either flat or curved surfaces. There's no need for
interior tracks or supports. Rails are available in a variety of styles, and can
be either visible or fully concealed. Once the rail is installed, custom-cut
film stretched into place, starting with the corners. Its semi-rigid edge is
fitted into the wall rail, securing the film without intermediate supports.
Lighting fixtures, alarms, sprinklers and ventilation equipment can all be
accommodated. Installing the system in a typical room or small office takes
about two to four hours, depending on the complexity of the room.
The versatility of the stretch ceiling system makes it suitable for use in a
wide range of environments.
RESIDENTIAL
Stretch Ceilings are also able to achieve similar appearance as conventional
ceilings within the home whileproviding many additional benefits such as
approximately 81% light reflection and improved acoustics. The product is
extremely quick to install as panel sizes can be fabricated up to 50 sq. meters
and being a finished product which will require no further decoration.
Any type of light fitting or aperture can be accommodated within the Stretch
Ceiling material, such as speakers, grilles, extractor fans and sensors. The
material is also resistant to moisture making it ideal for bathroom areas,
kitchens, steam rooms and swimming pools, whilst also being water impermeable
and will therefore act as a containment membrane in the event of a water leak.
COMMERCIAL
With superb range of colors and ability to form shapes, Stretch Ceilings allow
to create exceptional feature ceilings as well as conventional flat designs.
Suitable for all types of applications including Offices, Retail Outlets, Bars,
Restaurants, Leisure Centres,, Galleries, Theatres, Museums, Churches, Shopping
centres and many more.
AGREEMENT WITH EUROPEAN HOME DEVELOPMENT INC.
Modern PVC Inc. has executed an agreement with European Home Development Inc.
European Home Development Inc will use time to time Modern PVC Inc as
independent contractor for installing stretch ceiling in European Home
Development Inc constructed property. European Home Development Inc is
independent construction company which is in the business of constructing
residential and commercial property. During the period we incorporated the
company, prepared a business plan and executed an Agreement with European Home
Development Inc. ("EHDI") Agreements are filed as exhibits to this registration
statement, the main terms are:
1. Contractor shall furnish all labor and materials to install the PVC
stretch ceiling on the Owner property.
18
2. Owner shall pay Contractor for all labor and materials the sum of $17
per square feet. Upon completing Contractor's services under this
Agreement, Contractor shall submit an invoice. Owner shall pay
Contractor within 30 days from the date of Contractor's invoice.
3. Time of Completion The work to be performed under this Agreement shall
commence on time to time basis and as needed by Owner.
4. Contractor warrants that all work shall be completed in a good
workmanlike manner and in compliance with all building codes and other
applicable laws.
5. Contractor is an independent contractor, not Owner's employee.
Contractor's employees or subcontractors are not Owner's employees.
Contractor has the right to perform services for others during the
term of this Agreement.
6. With reasonable cause, either Owner or Contractor may terminate this
Agreement effective immediately by giving written notice of cause for
termination. Reasonable cause includes: nonpayment of Contractor's
compensation after 20 days written demand for payment. Contractor
shall be entitled to full payment for services performed prior to the
effective date of termination.
7. If a dispute arises under this Agreement, any party may take the
matter to court. If any court action is necessary to enforce this
Agreement, the prevailing party shall be entitled to reasonable
attorney fees, costs and expenses in addition to any other relief to
which he or she may be entitled. The work to be performed under this
Agreement shall commence on time to time basis and as needed by Owner.
MARKETING OUR SERVICES
We intend to rely on our sole officer and director, Vadims Horosevskis to market
our services and products. Majority of advertising will be done through our
website. When we have the resources, we intend to hire an outside web designer
to assist us in designing and building our website.
COMPETITION
There are few barriers of entry in the stretch ceiling business and level of
competition is extremely high. There are many domestic small and large sized
businesses. We will be in direct competition with them. Many large companies
have greater financial capabilities than us and will be able to provide more
favorable terms to the customers. Many of these companies may have a greater,
more established customer base than us. We mya lose business to such companies.
Also, many of these companies will be able to afford to offer greater price
discounts than us which may also cause us to lose business. In addition, we will
be competing with unlicensed installers, who can sell their services with
relative cheap prices.
EMPLOYEES; IDENTIFICATION OF CERTAIN SIGNIFICANT EMPLOYEES
We are a development stage company and currently have no employees. Vadims
Horosevskis, our sole officer and director, in a non-employee officer and
director of the Company. We intend to hire employees on an as needed basis.
OFFICES
Our business office is located at 51-01 39th Avenue Unit HH-12, Queens, NY
11104. This is the office provided by our Sole Officer and Director, Vadims
Horosevskis. Our telephone number is (773) 782-6273. We do not pay any rent to
Mr.Vadims Horosevskis and there is no agreement to pay any rent in the future.
Upon the completion of our offering, we intend to establish an office elsewhere.
As of the date of this prospectus, we have not sought or selected a new office
site.
GOVERNMENT REGULATION
Many aspects of the Company's operations are subject to various federal, state
and local laws and regulations, including, among others, (i) permitting and
licensing requirements applicable to service technicians in their respective
trades, (ii) building and electrical codes and zoning ordinances, (iii) laws and
regulations relating to consumer protection, including laws and regulations
governing service contracts for residential services, and (iv) laws and
regulations relating to worker safety and protection of the environment.
19
The Company believes it will get required permits and licenses to conduct its
operations. Failure of the Company to comply with the applicable regulations
could result in substantial fines or revocation of the Company's operating
permits. We are going to operate in New York City area. New York City businesses
must comply with all relevant federal, state, and City laws and rules. To
operate in NYC we must have for Home Improvement Contractor license. Also we
must have a Home Improvement Salesperson license to solicit, negotiate, or offer
to negotiate a home improvement contract with a property owner in NYC.
LEGAL PROCEEDINGS
During the past ten years, none of the following occurred with respect to a
President of the Company: (1) any bankruptcy petition filed by or against any
business of which such person was a general partner or executive officer either
at the time of the bankruptcy or within two years prior to that time; (2) any
conviction in a criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor offenses); (3) being
subject to any order, judgment or decree, not subsequently reversed, suspended
or vacated, of any court of any competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or otherwise limiting his involvement
in any type of business, securities or banking activities; and (4) being found
by a court of competent jurisdiction (in a civil action), the SEC or the
commodities futures trading commission to have violated a federal or state
securities or commodities law, and the judgment has not been reversed, suspended
or vacated.
We are not a party to any pending material legal proceedings and are not aware
of any threatened or contemplated proceeding by any governmental authority
against the Company.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTER AND CONTROL PERSONS
The following table sets forth as of May 10, 2012, the names, positions and ages
of our current executive officers and directors:
Name and Address of Executive
Officer and/or Director Age Position
----------------------- --- --------
Vadims Horosevskis 40 President, Secretary, Treasurer and
51-01 39th Avenue Unit HH-12 Director
Queens , NY 11104
The following is a brief description of the business experience of our executive
officers, director and significant employees:
Vadims Horosevskis has acted as our President, Secretary, Treasurer and sole
Director since our incorporation on July 14, 2011.Mr. Horosevskis has more than
8 year of construction and home improvement related experience. From January
2012 to present Vadims Horosevskis devoted his time to researching PVC membrane
installation industry. He researched information in books and on internet. He
also traveled to different European country to study business there. From April
2009 till present, Mr.Horosevskis has been owner of "US Locks and Safe", a
private company in Chicago IL. From 2005- 2009 Mr. Horosevskis has worked at
Stockholm, Sweden as an independent builder contractor. His responsibilities
were managing and supervising various constrictions projects.
Our director was selected based on above mentioned experience in construction
and home improvement industry as well as an established network of business
contacts.
Our president will be devoting approximately 50% of his business time to our
operations. Once we expand operations, and are able to attract more customers to
purchase our product, Vadims Horosevskis has agreed to commit more time as
required. Because Vadims Horosevskis will only be devoting limited time to our
operations, our operations may be sporadic and occur at times which are
convenient to him. As a result, operations may be periodically interrupted or
suspended which could result in a lack of revenues and a cessation of
operations.
20
TERM OF OFFICE
Each of our directors is appointed to hold office until the next annual meeting
of our stockholders or until his respective successor is elected and qualified,
or until he resigns or is removed in accordance with the provisions of the
Nevada Revised Statues. Our officers are appointed by our Board of Directors and
hold office until removed by the Board or until their resignation.
DIRECTOR INDEPENDENCE
Our board of directors is currently composed of one member,Vadims Horosevskis,
who does not qualify as an independent director in accordance with the published
listing requirements of the NASDAQ Global Market. The NASDAQ independence
definition includes a series of objective tests, such as that the director is
not, and has not been for at least three years, one of our employees and that
neither the director, nor any of his family members has engaged in various types
of business dealings with us. In addition, our board of directors has not made a
subjective determination as to each director that no relationships exists which,
in the opinion of our board of directors, would interfere with the exercise of
independent judgment in carrying out the responsibilities of a director, though
such subjective determination is required by the NASDAQ rules. Had our board of
directors made these determinations, our board of directors would have reviewed
and discussed information provided by the directors and us with regard to each
director's business and personal activities and relationships as they may relate
to us and our management.
COMMITTEES OF THE BOARD OF DIRECTORS
Our Board of Directors has no committees. We do not have a standing nominating,
compensation or audit committee.
SIGNIFICANT EMPLOYEES
We have no employees. Our sole officer and director, Vadims Horosevskis, is an
independent contractor to us and currently devotes approximately twenty hours
per week to company matters. We decided to hire Mr. Horesevskis as an
independent contractor because this form of employment allows for greater
flexibility. It also avoids the issues of benefits, deductions and employment
insurance. After receiving funding pursuant to our business plan Mr.Horosevskis
intends to devote as much time as the Board of Directors deems necessary to
manage the affairs of the company.
EXECUTIVE COMPENSATION
MANAGEMENT COMPENSATION
The following tables set forth certain information about compensation paid,
earned or accrued for services by our President, and Secretary and all other
executive officers (collectively, the "Named Executive Officers") from inception
on July 14, 2011 until April 30, 2012:
SUMMARY COMPENSATION TABLE
Non-Equity Nonqualified
Name and Incentive Deferred
Principal Stock Option Plan Compensation All Other
Position Year Salary($) Bonus($) Awards($) Awards($) Compensation($) Earnings($) Compensation($) Totals($)
-------- ---- --------- -------- --------- --------- --------------- ----------- --------------- ---------
Vadims July 4, -0- -0- -0- -0- -0- -0- -0- -0-
Horosevskis, 2011 to
President, April 30,
Treasurer 2012
and Secretary
21
There are no current employment agreements between the company and its officers.
Mr.Horosevskis currently devotes approximately twenty hours per week to manage
the affairs of the Company. He has agreed to work with no remuneration until
such time as the company receives sufficient revenues necessary to provide
management salaries. At this time, we cannot accurately estimate when sufficient
revenues will occur to implement this compensation, or what the amount of the
compensation will be.
No retirement, pension, profit sharing, stock option or insurance programs or
other similar programs have been adopted by us for the benefit of our officer or
director or employees.
DIRECTOR COMPENSATION
The following table sets forth director compensation as of April 30, 2012:
Fees Non-Equity Nonqualified
Earned Incentive Deferred
Paid in Stock Option Plan Compensation All Other
Name Cash($) Awards($) Awards($) Compensation($) Earnings($) Compensation($) Total($)
---- ------- --------- --------- --------------- ----------- --------------- --------
Vadims -0- -0- -0- -0- -0- -0- -0-
Horosevskis
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Vadims Horosevskis will not be paid for any underwriting services that he
performs on our behalf with respect to this offering.
On October 14, 2011, we issued a total of 4,000,000 shares of restricted common
stock to Vadims Horosevskis, our sole officer and director in consideration of
$4,000.
Mr. Horosevskis will not be repaid from the proceeds of this offering. There is
no due date for the repayment of the funds advanced by Mr. Horosevskis. Mr.
Horosevskis will be repaid from revenues of operations if and when we generate
revenues to pay the obligation. There is no assurance that we will ever generate
revenues from our operations. The obligation to Mr. Horosevskis does not bear
interest. There is no written agreement evidencing the advancement of funds by
Mr. Horosevskis or the repayment of the funds to Mr. Horosevskis. The entire
transaction was oral.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning the number of
shares of our common stock owned beneficially as of May 10, 2012 by: (i) each
person (including any group)known to us to own more than five percent (5%) of
any class of our voting securities, (ii) our director, and or (iii) our officer.
Unless otherwise indicated, the stockholder listed possesses sole voting and
investment power with respect to the shares shown.
Title of Name and Address of Amount and Nature of
Class Beneficial Owner Beneficial Ownership (1) Percentage
----- ---------------- -------------------- ----------
Common Stock Vadims Horosevskis 4,000,000 shares 100%
51-01 39th Avenue of common stock
Unit HH-12 (direct)
Queens, NY 11104
----------
(1) A beneficial owner of a security includes any person who, directly or
indirectly, through any contract, arrangement, understanding, relationship,
or otherwise has or shares: (i) voting power, which includes the power to
vote, or to direct the voting of shares; and (ii) investment power, which
includes the power to dispose or direct the disposition of shares. Certain
shares may be deemed to be beneficially owned by more than one person (if,
for example, persons share the power to vote or the power to dispose of the
shares). In addition, shares are deemed to be beneficially owned by a
22
person if the person has the right to acquire the shares (for example, upon
exercise of an option) within 60 days of the date as of which the
information is provided. In computing the percentage ownership of any
person, the amount of shares outstanding is deemed to include the amount of
shares beneficially owned by such person (and only such person) by reason
of these acquisition rights. As a result, the percentage of outstanding
shares of any person as shown in this table does not necessarily reflect
the person's actual ownership or voting power with respect to the number of
shares of common stock actually outstanding on May 12, 2012. As of May 12,
2012, there were 4,000,000 shares of our common stock issued and
outstanding.
PLAN OF DISTRIBUTION
We are registering 4,000,000 shares of our common stock for sale at the price of
$0.01 per share.
This offering is being made by us without the use of outside underwriters or
broker-dealers. The shares of common stock to be sold by us will be sold on our
behalf by Mr. Vadims Horosevskis, our executive officer and director. He officer
will not receive commissions, proceeds or other compensation from the sale of
any shares on our behalf.
This offering is self-underwritten, which means that it does not involve the
participation of an underwriter or broker, and as a result, no broker for the
sale of our securities will be used. In the event a broker-dealer is retained by
us to participate in the offering, we must file a post-effective amendment to
the registration statement to disclose the arrangements with the broker-dealer,
and that the broker-dealer will be acting as an underwriter and will be so named
in the prospectus. Additionally, FINRA must approve the terms of the
underwriting compensation before the broker-dealer may participate in the
offering.
To the extent required under the Securities Act, a post-effective amendment to
this registration statement will be filed disclosing the name of any
broker-dealers, the number of shares of common stock involved, the price at
which the common stock is to be sold, the commissions paid or discounts or
concessions allowed to such broker-dealers, where applicable, that such
broker-dealers did not conduct any investigation to verify the information set
out or incorporated by reference in this prospectus and other facts material to
the transaction.
We are subject to applicable provisions of the Exchange Act and the rules and
regulations under it, including, without limitation, Rule 10b-5 and a
distribution participant under Regulation M. All of the foregoing may affect the
marketability of the common stock.
All expenses of the registration statement including, but not limited to, legal,
accounting, printing and mailing fees are and will be borne by us.
PENNY STOCK REGULATIONS
You should note that our stock is a penny stock. The SEC has adopted Rule 15g-9
which generally defines "penny stock" to be any equity security that has a
market price (as defined) less than $5.00 per share or an exercise price of less
than $5.00 per share, subject to certain exceptions. Our securities are covered
by the penny stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
"accredited investors". The term "accredited investor" refers generally to
institutions with assets in excess of $5,000,000 or individuals with a net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the SEC which
provides information about penny stocks and the nature and level of risks in the
penny stock market. The broker-dealer also must provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction and monthly account
23
statements showing the market value of each penny stock held in the customer's
account. The bid and offer quotations, and the broker-dealer and salesperson
compensation information, must be given to the customer orally or in writing
prior to effecting the transaction and must be given to the customer in writing
before or with the customer's confirmation. In addition, the penny stock rules
require that prior to a transaction in a penny stock not otherwise exempt from
these 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 agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.
STATE SECURITIES - BLUE SKY LAWS
There is no established public market for our common stock, and there can be no
assurance that any market will develop in the foreseeable future. Transfer of
our common stock may also be restricted under the securities or securities
regulations laws promulgated by various states and foreign jurisdictions,
commonly referred to as "Blue Sky" laws. Absent compliance with such individual
state laws, our common stock may not be traded in such jurisdictions. Because
the securities registered hereunder have not been registered for resale under
the blue sky laws of any state, the holders of such shares and persons who
desire to purchase them in any trading market that might develop in the future,
should be aware that there may be significant state blue-sky law restrictions
upon the ability of investors to sell the securities and of purchasers to
purchase the securities. Accordingly, investors may not be able to liquidate
their investments and should be prepared to hold the common stock for an
indefinite period of time.
In order to comply with the applicable securities laws of certain states, the
securities will be offered or sold in those only if they have been registered or
qualified for sale; an exemption from such registration or if qualification
requirement is available and with which Modern PVC Inc. has complied.
In addition and without limiting the foregoing, the Company will be subject to
applicable provisions, rules and regulations under the Exchange Act with regard
to security transactions during the period of time when this Registration
Statement is effective.
DESCRIPTION OF SECURITIES
GENERAL
Our authorized capital stock consists of 75,000,000 shares of common stock, par
value $0.001 per share. Our Articles of Incorporation do not authorized us to
issue and preferred stock. As of May 12, 2012, there were 4,000,000 shares of
our common stock issued and outstanding that was held by one registered
stockholder of record, and no shares of preferred stock issued and outstanding.
COMMON STOCK
The following is a summary of the material rights and restrictions associated
with our common stock.
The holders of our common stock currently have (i) equal ratable rights to
dividends from funds legally available therefore, when, as and if declared by
the Board of Directors of the Company; (ii) are entitled to share ratably in all
of the assets of the Company available for distribution to holders of common
stock upon liquidation, dissolution or winding up of the affairs of the Company
(iii) do not have preemptive, subscription or conversion rights and there are no
redemption or sinking fund provisions or rights applicable thereto; and (iv) are
entitled to one non-cumulative vote per share on all matters on which stock
holders may vote. All shares of common stock now outstanding are fully paid for
and non-assessable and all shares of common stock which are the subject of this
offering, when issued, will be fully paid for and non-assessable. There is no
provision in our Articles of Incorporation or By-laws that would delay, defer or
prevent a change in control of our company
24
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.
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Our Articles of Incorporation provide that we will indemnify an officer,
director, or former officer or director, to the full extent permitted by law. 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 (other than the
payment of expenses incurred or paid by a director, officer or controlling
person in the successful defense of any action, suit or proceeding) is asserted
by one of our director, officers, or controlling persons in connection with the
securities being registered, we will, unless in the opinion of our legal counsel
the matter has been settled by controlling precedent, submit the question of
whether such indemnification is against public policy to a court of appropriate
jurisdiction. We will then be governed by the court's decision.
LEGAL MATTERS
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.
INTEREST 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, directly or indirectly, in the registrant or any of its parents or
subsidiaries. Nor was any such person connected with the registrant or any of
its parents, subsidiaries as a promoter, managing or principal underwriter,
voting trustee, director, officer or employee.
EXPERTS
Thomas J Harris, CPA, our independent registered public accountant, has audited
our financial statements included in this prospectus and registration statement
to the extent and for the periods set forth in their audit report. Thomas J
Harris, CPA, has presented its report with respect to our audited financial
statements.
LEGAL MATTERS
David Lubin & Associates, PLLC has opined on the validity of the shares of
common stock being offered hereby.
AVAILABLE INFORMATION
We have not previously been required to comply with the reporting requirements
of the Securities Exchange Act. We have filed with the SEC a registration
statement on Form S-1 to register the securities offered by this prospectus. For
future information about us and the securities offered under this prospectus,
you may refer to the registration statement and to the exhibits filed as a part
of the registration statement. In addition, after the effective date of this
prospectus, we will be required to file annual, quarterly and current reports,
or other information with the SEC as provided by the Securities Exchange Act.
You may read and copy any reports, statements or other information we file at
25
the SEC's public reference facility maintained by the SEC at 100 F Street, N.E.,
Washington, D.C. 20549. You can request copies of these Thomas J Harris, CPA
documents, upon payment of a duplicating fee, by writing to the SEC. Please call
the SEC at 1-800-SEC-0330 for further information on the operation of the public
reference room. Our SEC filings are also available to the public through the SEC
Internet site at www.sec.gov.
FINANCIAL STATEMENTS
The financial statements of MODERN PVC INC. for the period ended April 30, 2012,
and related notes, included in this prospectus have been audited by, and have
been so included in reliance upon the opinion of such accountants given upon
their authority as an expert in auditing and accounting.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
We have had no changes in or disagreements with our independent registered
public accountant.
26
MODERN PVC INC.
INDEX TO FINANCIAL STATEMENTS
Financial Statements
Balance Sheet as of April 30, 2012 (unaudited) and January 31, 2012 F-2
Statement of Operations (unaudited) for the period of three months
ended April 30, 2012 and from July 12, 2011 (Date of Inception) to
April 30, 2012 F-3
Statement of Stockholders' Equity as of April 30, 2012 (unaudited) F-4
Statement of Cash Flows (unaudited) for the period of three months
ended April 30, 2012 and from July 12, 2011 (Date of Inception)
to April 30, 2012 F-5
Notes to the Financial Statements F-6
F-1
MODERN PVC INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS AS OF APRIL 30, 2012 (unaudited)
AND AS OF JANUARY 31, 2012
April 30, 2012 January 31, 2012
-------------- ----------------
(unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 3,856 $ 4,200
-------- --------
Total Assets $ 3,856 $ 4,200
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Current Liabilities
Loan from director $ 3,749 $ 749
-------- --------
Total Liabilities 3,749 749
-------- --------
Stockholders' Equity
Common stock, par value $0.001; 75,000,000 shares authorized,
4,000,000 shares issued and outstanding 4,000 4,000
Additional paid in capital 0 0
Retained Earnings (549) 0
Deficit accumulated during the development stage (3,344) (549)
-------- --------
Total Stockholders' Equity 107 3,451
-------- --------
Total Liabilities and Stockholders' Equity $ 3,856 $ 4,200
======== ========
See accompanying notes to financial statements.
F-2
MODERN PVC INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS (unaudited)
FOR THE THREE MONTHS ENDED APRIL 30, 2012;
FOR THE PERIOD FROM JULY 12, 2011 (INCEPTION) TO APRIL 30, 2012
For the period from
For the three July 12, 2011
months ended (Inception) to
April 30, 2012 April 30, 2012
-------------- --------------
REVENUES $ 0 $ 0
---------- ----------
OPERATING EXPENSES
Professional fees 3,250 3,250
Bank fees 94 94
Business Licenses and Permits 0 549
General and administrative expenses 0 0
---------- ----------
TOTAL OPERATING EXPENSES 3,344 3,893
---------- ----------
NET LOSS FROM OPERATIONS (3,344) (3,893)
PROVISION FOR INCOME TAXES 0 0
---------- ----------
NET LOSS $ (3,344) $ (3,893)
========== ==========
NET LOSS PER SHARE: BASIC AND DILUTED $ (0.00)
==========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
BASIC AND DILUTED 4,000,000
==========
See accompanying notes to financial statements.
F-3
MODERN PVC INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY (unaudited)
FOR THE PERIOD FROM JULY 12, 2011 (INCEPTION) TO APRIL 30, 2012
Deficit
Accumulated
Common Stock Additional during the Total
------------------- Paid-in Development Stockholders'
Shares Amount Capital Stage Equity
------ ------ ------- ----- ------
Inception, July 12, 2011 -- $ -- $ -- $ -- $ --
Shares issued for cash at
$0.001 per share 4,000,000 4,000 -- -- 4,000
Net loss for the year ended
January 31, 2012 -- -- -- (549) (549)
--------- ------- ------- ------- -------
Balance, January 31, 2012 4,000,000 4,000 -- (549) 3,451
Net loss for the three months
ended April 30, 2012 -- -- -- (3,344) (3,344)
--------- ------- ------- ------- -------
Balance, April 30, 2012 4,000,000 $ 4,000 $ -- $(3,893) $ 107
========= ======= ======= ======= =======
See accompanying notes to financial statements.
F-4
MODERN PVC INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS (unaudited)
FOR THE THREE MONTHS ENDED APRIL 30, 2012
FOR THE PERIOD FROM JULY 12, 2012 (INCEPTION) TO APRIL 30, 2012
For the period from
For the three July 12, 2011
months ended (Inception) to
April 30, 2012 April 30, 2012
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period $ (3,344) $ (3,893)
Adjustments to reconcile net loss to net
cash (used in) operating activities:
Changes in assets and liabilities:
Increase (decrease) in accrued expenses 0 0
-------- --------
CASH FLOWS USED IN OPERATING ACTIVITIES (3,344) (3,893)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock 0 4,000
Loans from shareholder 3,000 3,749
-------- --------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES 3,000 7,749
-------- --------
NET INCREASE (DECREASE) IN CASH (344) 3,856
Cash, beginning of period 4,200 --
-------- --------
CASH, END OF PERIOD $ 3,856 $ 3,856
======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ 0 $ 0
======== ========
Income taxes paid $ 0 $ 0
======== ========
See accompanying notes to financial statements
F-5
MODERN PVC INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
APRIL 30, 2012
NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS
Modern PVC Inc. was incorporated under the laws of the State of Nevada on July
12, 2011. We are a development stage company in the business of installation
stretch ceiling and re-selling of stretch fabric membrane to wholesale
customers. Our plan is to purchase stretch fabric membrane from trusted supplier
and install this fabric to the private person's homes or businesses. Also, we
are planning to develop our dealer network to resell fabric membrane.
NOTE 2 - SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES
Development Stage Company
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles related to development stage companies.
A development-stage company is one in which planned principal operations have
not commenced or if its operations have commenced, there has been no significant
revenues there from.
Basis of Presentation
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America and are
presented in US dollars.
Accounting Basis
The Company uses the accrual basis of accounting and accounting principles
generally accepted in the United States of America ("GAAP" accounting). The
Company has adopted a January 31 fiscal year end.
Cash and Cash Equivalents
The Company considers all highly liquid investments with the original maturities
of three months or less to be cash equivalents. The Company had $3,856 of cash
as of April 30, 2012.
Fair Value of Financial Instruments
The Company's financial instruments consist of cash and cash equivalents and
amounts due to shareholder. The carrying amount of these financial instruments
approximates fair value due either to length of maturity or interest rates that
approximate prevailing market rates unless otherwise disclosed in these
financial statements.
Income Taxes
Income taxes are computed using the asset and liability method. Under the asset
and liability method, deferred income tax assets and liabilities are determined
based on the differences between the financial reporting and tax bases of assets
and liabilities and are measured using the currently enacted tax rates and laws.
A valuation allowance is provided for the amount of deferred tax assets that,
based on available evidence, are not expected to be realized.
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 reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date the financial statements and the
reported amount of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Revenue Recognition
The Company recognizes revenue when products are fully delivered or services
have been provided and collection is reasonably assured.
Stock-Based Compensation
Stock-based compensation is accounted for at fair value in accordance with ASC
Topic 718. To date, the Company has not adopted a stock option plan and has not
granted any stock options.
F-6
MODERN PVC INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
APRIL 30, 2012
NOTE 2 - SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES (CONTINUED)
Basic Income (Loss) Per Share
Basic income (loss) per share is calculated by dividing the Company's net loss
applicable to common shareholders by the weighted average number of common
shares during the period. Diluted earnings per share is calculated by dividing
the Company's net income available to common shareholders by the diluted
weighted average number of shares outstanding during the year. The diluted
weighted average number of shares outstanding is the basic weighted number of
shares adjusted for any potentially dilutive debt or equity. There are no such
common stock equivalents outstanding as of April 30, 2012.
Comprehensive Income
The Company has which established standards for reporting and display of
comprehensive income, its components and accumulated balances. When applicable,
the Company would disclose this information on its Statement of Stockholders'
Equity. Comprehensive income comprises equity except those resulting from
investments by owners and distributions to owners. The Company has not had any
significant transactions that are required to be reported in other comprehensive
income.
Recent Accounting Pronouncements
Modern PVC Inc. does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on the Company's results of
operations, financial position or cash flow.
NOTE 3 - LOAN FROM DIRECTOR
On July 12, 2011, director loaned $224 to Incorporate the Company.
On July 25, 2011, director loaned the Company $325 to purchase business license
and file initial list with Nevada Secretary of State.
On September 12, 2011, director loaned $200 to open bank account.
On February 29, 2012, director loaned $3,000 to the Company. The loans are
unsecured, non-interest bearing and due on demand.
The balance due to the director was $3,749 as of April 30, 2012 and $749 as of
January 31, 2012.
NOTE 4 - COMMON STOCK
The Company has 75,000,000, $0.001 par value shares of common stock authorized.
On October 14, 2011, the Company issued 4,000,000 shares of common stock for
cash proceeds of $4,000 at $0.001 per share.
There were 4,000,000 shares of common stock issued and outstanding as of April
30, 2012 January 31, 2012.
NOTE 5 - COMMITMENTS AND CONTINGENCIES
The Company neither owns nor leases any real or personal property. An officer
has provided office services without charge. There is no obligation for the
officer to continue this arrangement. Such costs are immaterial to the financial
statements and accordingly are not reflected herein. The officers and directors
are involved in other business activities and most likely will become involved
in other business activities in the future.
F-7
MODERN PVC INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
APRIL 30, 2012
NOTE 6 - INCOME TAXES
As of April 30, 2012, the Company had net operating loss carry forwards of
approximately $3,344 that may be available to reduce future years' taxable
income in varying amounts through 2031. Future tax benefits which may arise as a
result of these losses have not been recognized in these financial statements,
as their realization is determined not likely to occur and accordingly, the
Company has recorded a valuation allowance for the deferred tax asset relating
to these tax loss carry-forwards.
The provision for Federal income tax consists of the following:
April 30, 2012
--------------
Federal income tax benefit attributable to:
Current Operations $ 1,137
Less: valuation allowance (1,137)
--------
Net provision for Federal income taxes $ 0
========
The cumulative tax effect at the expected rate of 34% of significant items
comprising our net deferred tax amount is as follows:
April 30, 2012
--------------
Deferred tax asset attributable to:
Net operating loss carryover $ 1,137
Less: valuation allowance (1,137)
--------
Net deferred tax asset $ 0
========
Due to the change in ownership provisions of the Tax Reform Act of 1986, net
operating loss carry forwards of approximately $3,344 for Federal income tax
reporting purposes are subject to annual limitations. Should a change in
ownership occur net operating loss carry forwards may be limited as to use in
future years.
NOTE 7 - GOING CONCERN
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principle, which contemplate continuation of the
Company as a going concern. However, the Company had no revenues as of April 30,
2012. The Company currently has limited working capital, and has not completed
its efforts to establish a stabilized source of revenues sufficient to cover
operating costs over an extended period of time.
Management anticipates that the Company will be dependent, for the near future,
on additional investment capital to fund operating expenses The Company intends
to position itself so that it may be able to raise additional funds through the
capital markets. In light of management's efforts, there are no assurances that
the Company will be successful in this or any of its endeavors or become
financially viable and continue as a going concern.
NOTE 8 - SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASC 855-10) the Company has analyzed its operations
subsequent to April 30, 2012 to May 7, 2012, the date these financial statements
were issued, and has determined that it does not have any material subsequent
events to disclose in these financial statements.
F-8
MODERN PVC INC.
(A DEVELOPMENT STAGE COMPANY)
INDEX TO FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm F-10
Balance Sheet as of January 31, 2012 F-11
Statement of Operations for the period from July 12, 2011
(Date of Inception) to January 31, 2012 F-12
Statement of Stockholders' Equity as of January 31, 2012 F-13
Statement of Cash Flows for the period from July 12, 2011
(Date of Inception) to January 31, 2012 F-14
Notes to the Financial Statements F-15
F-9
THOMAS J. HARRIS
CERTIFIED PUBLIC ACCOUNTANT
3901 STONE WAY N., SUITE 202
SEATTLE, WA 98103
206.547.6050
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
Modern PVC Inc.
Bellevue, WA
We have audited the balance sheets of Modern PVC Inc. a development stage
company, as at January 31, 2012, the statements of operations, stockholders'
deficiency and cash flows for the period then ended. These financial statements
are the responsibility of the company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for my opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Modern PVC Inc. a development
stage company, as of January 31, 2012 and the results of its operations and its
cash flows for the periods then ended in conformity with generally accepted
accounting principles accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. As discussed in Note 2, the company's
significant operating losses, working capital deficiency and need for new
capital raise substantial doubt about its ability to continue as a going
concern. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/ Thomas J Harris
-------------------------------
Thomas J Harris, CPA
May 10, 2012
F-10
MODERN PVC INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF JANUARY 31, 2012
January 31,
2012
--------
ASSETS
Current Assets
Cash and cash equivalents $ 4,200
--------
Total Assets $ 4,200
========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Current Liabilities
Accrued expenses $ 0
Loan from director 749
--------
Total Liabilities 749
--------
Stockholders' Equity
Common stock, par value $0.001; 75,000,000 shares authorized,
4,000,000 shares issued and outstanding 4,000
Additional paid in capital 0
Deficit accumulated during the development stage (549)
--------
Total Stockholders' Equity 3,451
--------
Total Liabilities and Stockholders' Equity $ 4,200
========
See accompanying notes to financial statements.
F-11
MODERN PVC INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM JULY 12, 2011 (INCEPTION) TO JANUARY 31, 2012
For the period from
July 12, 2011
(Inception) to
January 31,
2012
----------
REVENUES $ 0
----------
OPERATING EXPENSES
Business License and Permits 549
Bank fees 0
General and administrative expenses 0
----------
TOTAL OPERATING EXPENSES 549
----------
NET LOSS FROM OPERATIONS (549)
PROVISION FOR INCOME TAXES 0
----------
NET LOSS $ (549)
==========
NET LOSS PER SHARE: BASIC AND DILUTED $ (0.00)
==========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
BASIC AND DILUTED 4,000,000
==========
See accompanying notes to financial statements.
F-12
MODERN PVC INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM JULY 12, 2011 (INCEPTION) TO JANUARY 31, 2012
Deficit
Accumulated
Common Stock Additional during the Total
------------------- Paid-in Development Stockholders'
Shares Amount Capital Stage Equity
------ ------ ------- ----- ------
Inception, July 12, 2011 -- $ -- $ -- $ -- $ --
Shares issued for cash at
$0.001 per share 4,000,000 4,000 -- -- 4,000
Net loss for the year ended
January 31, 2012 -- -- -- (549) (549)
--------- ------- ------- ------- -------
Balance, January 31, 2012 4,000,000 $ 4,000 $ -- $ (549) $ 3,451
========= ======= ======= ======= =======
See accompanying notes to financial statements.
F-13
MODERN PVC INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM JULY 12, 2011 (INCEPTION) TO JANUARY 31, 2012
For the period from
July 12, 2011
(Inception) to
January 31,
2012
--------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period $ (549)
Adjustments to reconcile net loss to net
cash (used in) operating activities:
Changes in assets and liabilities:
Increase (decrease) in accrued expenses 0
--------
CASH FLOWS USED IN OPERATING ACTIVITIES (549)
--------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock 4,000
Loans from director 749
--------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES 4,749
--------
NET INCREASE IN CASH 4,200
Cash, beginning of period 0
--------
CASH, END OF PERIOD $ 4,200
========
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ 0
========
Income taxes paid $ 0
========
See accompanying notes to financial statements.
F-14
MODERN PVC INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
JANUARY 31, 2012
NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS
Modern PVC Inc. was incorporated under the laws of the State of Nevada on July
14, 2011. We are a development stage company in the business of installation
stretch ceiling and re-selling of stretch fabric membrane to wholesale
customers. Our plan is to purchase stretch fabric membrane from trusted supplier
and install this fabric to the private person's homes or businesses. Also, we
are planning to develop our dealer network to resell fabric membrane.
NOTE 2 - SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES
Development Stage Company
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles related to development stage companies.
A development-stage company is one in which planned principal operations have
not commenced or if its operations have commenced, there has been no significant
revenues there from.
Basis of Presentation
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America and are
presented in US dollars.
Accounting Basis
The Company uses the accrual basis of accounting and accounting principles
generally accepted in the United States of America ("GAAP" accounting). The
Company has adopted a January 31 fiscal year end.
Cash and Cash Equivalents
The Company considers all highly liquid investments with the original maturities
of three months or less to be cash equivalents. The Company had $4,200 of cash
as of January 31, 2012.
Fair Value of Financial Instruments
The Company's financial instruments consist of cash and cash equivalents and
amounts due to shareholder. The carrying amount of these financial instruments
approximates fair value due either to length of maturity or interest rates that
approximate prevailing market rates unless otherwise disclosed in these
financial statements.
Income Taxes
Income taxes are computed using the asset and liability method. Under the asset
and liability method, deferred income tax assets and liabilities are determined
based on the differences between the financial reporting and tax bases of assets
and liabilities and are measured using the currently enacted tax rates and laws.
A valuation allowance is provided for the amount of deferred tax assets that,
based on available evidence, are not expected to be realized.
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 reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date the financial statements and the
reported amount of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Revenue Recognition
The Company recognizes revenue when products are fully delivered or services
have been provided and collection is reasonably assured.
Stock-Based Compensation
Stock-based compensation is accounted for at fair value in accordance with ASC
Topic 718. To date, the Company has not adopted a stock option plan and has not
granted any stock options.
F-15
MODERN PVC INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
JANUARY 31, 2012
NOTE 2 - SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES (CONTINUED)
Basic Income (Loss) Per Share
Basic income (loss) per share is calculated by dividing the Company's net loss
applicable to common shareholders by the weighted average number of common
shares during the period. Diluted earnings per share is calculated by dividing
the Company's net income available to common shareholders by the diluted
weighted average number of shares outstanding during the year. The diluted
weighted average number of shares outstanding is the basic weighted number of
shares adjusted for any potentially dilutive debt or equity. There are no such
common stock equivalents outstanding as of January 31, 2012.
Comprehensive Income
The Company has which established standards for reporting and display of
comprehensive income, its components and accumulated balances. When applicable,
the Company would disclose this information on its Statement of Stockholders'
Equity. Comprehensive income comprises equity except those resulting from
investments by owners and distributions to owners. The Company has not had any
significant transactions that are required to be reported in other comprehensive
income.
Recent Accounting Pronouncements
Modern PVC Inc. does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on the Company's results of
operations, financial position or cash flow.
NOTE 3 - LOAN FROM DIRECTOR
On July 12, 2011, director loaned $224 to Incorporate the Company.
On July 25, 2011, director loaned the Company $325 to purchase business license
and file initial list with Nevada Secretary of State. On September 12, 2011,
director loaned $200 to open bank account.
The loans are unsecured, non-interest bearing and due on demand.
The balance due to the director was $749 as of January 31, 2012.
NOTE 4 - COMMON STOCK
The Company has 75,000,000, $0.001 par value shares of common stock authorized.
On October 14, 2011, the Company issued 4,000,000 shares of common stock for
cash proceeds of $4,000 at $0.001 per share.
There were 4,000,000 shares of common stock issued and outstanding as of January
31, 2012.
NOTE 5 - COMMITMENTS AND CONTINGENCIES
The Company neither owns nor leases any real or personal property. An officer
has provided office services without charge. There is no obligation for the
officer to continue this arrangement. Such costs are immaterial to the financial
statements and accordingly are not reflected herein. The officers and directors
are involved in other business activities and most likely will become involved
in other business activities in the future.
F-16
MODERN PVC INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
JANUARY 31, 2012
NOTE 6 - INCOME TAXES
As of January 31, 2012, the Company had net operating loss carry forwards of
approximately $549 that may be available to reduce future years' taxable income
in varying amounts through 2031. Future tax benefits which may arise as a result
of these losses have not been recognized in these financial statements, as their
realization is determined not likely to occur and accordingly, the Company has
recorded a valuation allowance for the deferred tax asset relating to these tax
loss carry-forwards.
The provision for Federal income tax consists of the following:
January 31, 2012
----------------
Federal income tax benefit attributable to:
Current Operations $ 187
Less: valuation allowance (187)
--------
Net provision for Federal income taxes $ 0
========
The cumulative tax effect at the expected rate of 34% of significant items
comprising our net deferred tax amount is as follows:
January 31, 2012
----------------
Deferred tax asset attributable to:
Net operating loss carryover $ 187
Less: valuation allowance (187)
--------
Net deferred tax asset $ 0
========
Due to the change in ownership provisions of the Tax Reform Act of 1986, net
operating loss carry forwards of approximately $549 for Federal income tax
reporting purposes are subject to annual limitations. Should a change in
ownership occur net operating loss carry forwards may be limited as to use in
future years.
NOTE 7 - GOING CONCERN
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principle, which contemplate continuation of the
Company as a going concern. However, the Company had no revenues as of January
31, 2012. The Company currently has limited working capital, and has not
completed its efforts to establish a stabilized source of revenues sufficient to
cover operating costs over an extended period of time.
Management anticipates that the Company will be dependent, for the near future,
on additional investment capital to fund operating expenses The Company intends
to position itself so that it may be able to raise additional funds through the
capital markets. In light of management's efforts, there are no assurances that
the Company will be successful in this or any of its endeavors or become
financially viable and continue as a going concern.
NOTE 8 - SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASC 855-10) the Company has analyzed its operations
subsequent to January 31, 2012 to May 23, 2012, the date these financial
statements were issued, and has determined that it does not have any material
subsequent events to disclose in these financial statements.
F-17
[Back Page of Prospectus]
PROSPECTUS
10,000,000 SHARES OF COMMON STOCK
MODERN PVC INC.
DEALER PROSPECTUS DELIVERY OBLIGATION
UNTIL _____________ ___, 2012, ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE
SECURITIES WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO
DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER
A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.
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:
SEC Registration Fee $ 11.46
Printing Expenses $ 88.54
Accounting Fees and Expenses $ 600.00
Auditor Fees and Expenses $ 3,500.00
Legal Fees and Expenses $ 3,000.00
Transfer Agent Fees $ 2,300.00
----------
TOTAL $10,000.00
==========
----------
(1) All amounts are estimates, other than the SEC's registration fee.
ITEM 14. INDEMNIFICATION OF DIRECTOR AND OFFICERS
a) The Directors shall cause the Corporation to indemnify a Director or former
Director of the Corporation and the Directors may cause the Corporation to
indemnify a director or former director of a corporation of which the
Corporation is or was a shareholder and the heirs and personal representatives
of any such person against all costs, charges and expenses, including an amount
paid to settle an action or satisfy a judgment, actually and reasonably incurred
by him or them including an amount paid to settle an action or satisfy a
judgment inactive criminal or administrative action or proceeding to which he is
or they are made a party by reason of his or her being or having been a Director
of the Corporation or a director of such corporation, including an action
brought by the Corporation or corporation. Each Director of the Corporation on
being elected or appointed is deemed to have contracted with the Corporation on
the terms of the foregoing indemnity.
b) The Directors may cause the Corporation to indemnify an officer, employee or
agent of the Corporation or of a corporation of which the Corporation is or was
a shareholder (notwithstanding that he is also a Director), and his or her heirs
and personal representatives against all costs, charges and expenses incurred by
him or them and resulting from his or her acting as an officer, employee or
agent of the Corporation or corporation. In addition the Corporation shall
indemnify the Secretary or an Assistance Secretary of the Corporation (if he is
not a full time employee of the Corporation and notwithstanding that he is also
a Director), and his or her respective heirs and legal representatives against
all costs, charges and expenses incurred by him or them and arising out of the
functions assigned to the Secretary by the Corporation Act or these Articles and
each such Secretary and Assistant Secretary, on being appointed is deemed to
have contracted with the Corporation on the terms of the foregoing indemnity.
c) The Directors may cause the Corporation to purchase and maintain insurance
for the benefit of a person who is or was serving as a Director, officer,
employee or agent of the Corporation or as a director, officer, employee or
agent of a corporation of which the Corporation is or was a shareholder and his
or her heirs or personal representatives against a liability incurred by him as
a Director, officer, employee or agent.
II-1
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Set forth below is information regarding the issuance and sales of securities
without registration since inception.
On October 14, 2011, MODERN PVC INC. offered and sold 4,000,000 share of common
stock to our sole officer and director, Vadims Horosevskis, for a purchase price
of $0.001 per share, for aggregate offering proceeds of $4,000. MODERN PVC INC.
made the offer and sale in reliance on the exemption from registration afforded
by Section 4(2) to the Securities Act of 1933, as amended (the "Securities
Act"), on the basis that the securities were offered and sold in a non-public
offering to a "sophisticated investor" who had access to registration-type
information about the Company. No commission was paid in connection with the
sale of any securities an no general solicitations were made to any person.
ITEM 16. EXHIBITS
Exhibit
Number Description of Exhibit
------ ----------------------
3.1 Articles of Incorporation of the Registrant *
3.2 Bylaws of the Registrant *
5.1 Opinion of David Lubin & Associates, PLLC *
10.1 Agreement dated November 14, 2011by and between the MODERN PVC INC.
and European Home Development Inc. LLC *
23.1 Consent of David Lubin & Associates, PLLC (contained in exhibit 5.1) *
23.2 Consent of Thomas J Harris, CPA
----------
* Filed previously
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to:
(a) Include any prospectus required by Section 10(a)(3) of the Securities Act;
(b) Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in
the volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(c) Include any additional or changed material information on the plan of
distribution.
2. To, for the purpose of determining any liability under the Securities Act,
treat each post-effective amendment as a new registration statement relating to
the securities offered herein, and to treat the offering of such securities at
that time to be the initial bona fide offering thereof.
3. To remove from registration, by means of a post-effective amendment, any of
the securities being registered hereby that remains unsold at the termination of
the offering.
II-2
4. For determining liability of the undersigned Registrant under the Securities
Act to any purchaser in the initial distribution of the securities, 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:
(a) Any preliminary prospectus or prospectus of the undersigned Registrant
relating to the offering required to be filed pursuant to Rule 424;
(b) 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;
(c) 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
(d) Any other communication that is an offer in the offering made by the
undersigned Registrant to the purchaser.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to our director, officers and controlling
persons pursuant to the provisions above, or otherwise, we have been advised
that in the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act, 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 director,
officers, or controlling persons in the successful defense of any action, suit
or proceeding, is asserted by one of our director, officers, or controlling
person sin connection with the securities being registered, we 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 is against public policy as expressed in the Securities Act, and
we will be governed by the final adjudication of such issue.
For the purposes of determining liability under the Securities Act for any
purchaser, each prospectus filed pursuant to Rule 424(b) as part of a
registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectuses filed in reliance on
Rule 430A, shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness. Provided,
however, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such first use, supersede or modify any statement
that was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to such
date of first use.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements of filing on Form S-1 and authorized this registration statement to
be signed on its behalf by the undersigned, in New York, NY on August 8, 2012.
MODERN PVC INC.
By: /s/ Vadims Horosevskis
---------------------------------------
Name: Vadims Horosevskis
Title: President
(Principal Executive, Financial and
Accounting Officer)
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Vadims Horosevskis, as his true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this Registration
Statement on Form S-1 of MODERN PVC INC., and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, grant unto said attorney-in-fact and agent,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the foregoing, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or his substitutes, may
lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated.
Signature Title Date
--------- ----- ----
/s/ Vadims Horosevskis President, Treasurer, Secretary, August 8, 2012
---------------------------- Director and Principal Accounting
Vadims Horosevskis Officer
II-4
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
------ ----------------------
3.1 Articles of Incorporation of the Registrant *
3.2 Bylaws of the Registrant *
5.1 Opinion of David Lubin & Associates, PLLC *
10.1 Agreement dated November 14, 2011by and between the MODERN PVC INC.
and European Home Development Inc. LLC *
23.1 Consent of David Lubin & Associates, PLLC (contained in exhibit 5.1) *
23.2 Consent of Thomas J Harris, CPA
----------
* Filed previously