IMAG Group, Inc. - FORM S-1 - January 25, 2013

Attached files

file	filename
EX-3.A.01 - EXHIBIT 3.A.01 - IMAG Group, Inc.	imags1_ex311172013a.htm
EX-5 - EXHIBIT 5 - IMAG Group, Inc.	imags1_ex511172013.htm
EX-23.2 - EXHIBIT 23.2 - IMAG Group, Inc.	imags1_ex2312172015.htm
EX-3.B.01 - EXHIBIT 3.B.01 - IMAG Group, Inc.	imags1_ex311172013b.htm

As filed with the U.S. Securities and Exchange Commission on January 24, 2013

Commission File No. ________

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

IMAG GROUP, INC.

(Exact name of registrant as specified in its charter)

Florida	3721	27-0541751
(State or jurisdiction of	(Primary Standard Industrial	(I.R.S. Employer
incorporation or organization)	Classification Code Number)	Identification No.)

144 Woodside Court, Safety Harbor, Florida 34695

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices )

Edwin B. Salmon

144 Woodside Court

Safety Harbor, Florida 34695

727-736-4724

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copy To:

Jackson L. Morris, Esq.

3116 W. North A Street

Tampa, Florida 33609-1544

Telephone: 813-874-8854

e-mail: jackson.morris@rule144solution.com

As soon as practicable after the effective date of this registration statement.

(Approximate date of commencement of proposed sale to the public)

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box:	o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.	o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.	o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.	o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	þ

Calculation of Registration Fee
Title of Each Class of Securities to be Registered	Amount to be Registered (2)	Proposed Maximum Offering Price Per Share (3)	Proposed Maximum Aggregate Offering Price	Amount of Registration Fee
Common Stock (1)	3,000,000	$0.000333	$1,000	$0.14
Total	3,000,000	$0.000333	$1,000	$0.14
(1) The shares are being registered for distribution by PV Enterprises International, Inc. as a dividend in kind to its stockholders.
(2) Such additional number of shares is being registered to accommodate a rounding up of fractional shares which would otherwise be distributable in the dividend distribution.
(3) Estimated solely for purposes of calculating the registration fee based on one-third of the par value in accordance with Rule 457(f)(2), as the provision of the Rule most analogous to the dividend distribution, in that there is no market for the registrant’s common stock and the registrant has an accumulated capital deficit.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay the 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 said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. PV Enterprises International, Inc. may not distribute these securities until the related 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.

PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION - DATED JANUARY 24, 2013

IMAG GROUP, INC.

PROSPECTUS

3,000,000 Shares of Common Stock

This prospectus covers the distribution of three million shares by PV Enterprises International, Inc. as a dividend in kind to its stockholders, comprising all of the shares of our common stock which PV Enterprises International owns and thirty-five percent of all of our shares of common stock outstanding. The record date for determination of PV Enterprises International’s stockholders entitled to receive the dividend will be _____, 2013. PV Enterprises International will distribute 0.008 of a share of our common stock for each one share of PV Enterprises International issued and outstanding on the record date. Fractional shares, if any, will be rounded up to the next whole share only when the recipient would own at least one whole share prior to rounding, and we will issue a sufficient number of additional shares to PV Enterprises International for distribution of the dividend as may be necessary to accommodate the rounding of fractional shares. A stockholder of PV Enterprises International who would own only a fractional share of our common stock will not receive any share. Neither PV Enterprises International, we nor any other person will receive proceeds from the dividend distribution. PV Enterprises International may be deemed to be a statutory underwriter of our shares in connection with the distribution of the dividend.

At the date of this prospectus, there is no public market for our common stock. Following the distribution of the dividend, we will be a publicly owned company. We expect our common stock to be traded in the over-the-counter market and quoted on the OTC Bulletin Board under the symbol of “_______”, subject publication of quotes by market makers.

THE COMMON STOCK OFFERED BY THIS PROSPECTUS INVOLVES A HIGH DEGREE OF RISK.

OUR AUDITOR’S HAVE RAISED SUBSTANTIAL DOUBT AS TO OUR ABILITY TO CONTINUE AS A “GOING CONCERN”.

YOU SHOULD CAREFULLY CONSIDER THE FACTORS DESCRIBED UNDER THE HEADING "RISK FACTORS" BEGINNING ON PAGE 2.

NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The date of this prospectus is ___________, 2013

USE OF PRONOUNS AND OTHER WORDS

The pronouns “we”, “us”, “our” and the equivalent used in this prospectus mean IMAG Group, Inc. In the notes to our financial statements, the “Company” means IMAG Group, Inc. The pronoun “you” means the reader of this prospectus.

REPORTS TO SECURITY HOLDERS

We intend to furnish to our stockholders annual reports containing audited financial statements and quarterly reports containing unaudited financial statements for each of the first three quarters of each fiscal year. In addition, we may from time to time furnish to stockholders additional information about us and our business as our management deems appropriate.

TABLE OF CONTENTS
	Page
Our Corporate History and Organization	1
Summaries of Referenced Documents	1
Forward-looking Statements	1
Risk Factors	2
Management’s Plan of Operations	10
Management’s Discussion and Analysis of Results of Operations and Liquidity During the Development Stage	13
Our Business	16
Our Management	21
Board Committees	23
How We Compensate Our Management	23
Employment Agreements	23
How We Compensate Our Directors	23
Who Owns Our Common Stock	23
Related Party Transactions	24
Market Information and Related Stockholder Matters	24
Description of Our Securities	25
How PV Enterprises International Will Distribute Our Shares	26
Federal Income Tax Treatment of the Dividend Distribution	26
Shares Eligible for Future Sale	26
Legal Matters	27
Experts	27
Where You Can Find More Information About Us	27
Index to Financial Statements	28

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide information different from that contained in this prospectus. PV Enterprises International will distribute our shares of common stock only in jurisdictions where such distribution is permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or the distribution of our common stock.

- i -

OUR CORPORATE HISTORY AND ORGANIZATION

We were incorporated in Florida on July 6, 2009 by Alvin Ayers and Edwin B. Salmon, who are our founders. We were founded for the purpose of developing, manufacturing and marketing unmanned aerial vehicles, the designs for which we acquired from Mr. Salmon’s consulting firm, Affiliated Business Services, Inc., which had acquired the designs from a client in a 2007 settlement of fees due. Mr. Salmon founded AirBots-UAV, Inc., a Florida corporation, in 2008 to utilize these designs. Mr. Salmon closed AirBots-UAV in 2009 due to lack of funding.

In February 2010, Messrs. Ayers and Salmon and our thirty-four other stockholders exchanged all of our common stock which they owned for shares of common stock of Lifestyle Innovations, Inc., a Nevada corporation and publicly traded company, resulting in us becoming a wholly owned subsidiary of the publicly traded company. Lifestyle Innovations subsequently changed its name to Vought Defense Systems, Inc., then to ALAS Defense Systems, Inc., then to ALAS International Holdings, Inc. These name changes were made in anticipation of pursuing the unmanned aerial vehicle business through us. ALAS International Holdings finally changed its name in 2011 to PV Enterprises International, Inc. (trading under the symbol “VDSC” but still showing “ALAS International Holdings, Inc.” as its corporate name at OTCMarkets.com). PV Enterprises International changed its business focus to ocean shipping with the acquisition of PV Enterprises, Inc. and a resulting change in control. As part of ALAS International Holdings’ acquisition of PV Enterprises, Affiliated Business Services, Inc., a Florida corporation controlled by Mr. Salmon, was to acquire us for $1. Affiliated Business Services has waived the acquisition of us with the agreement of PV Enterprises International to declare our stock as a dividend to its stockholders

The address of our executive offices is 144 Woodside Court, Safety Harbor, Florida 34695 and our telephone number at that address is 727-736-4724. We do not have a corporate web site at the date of this preliminary prospectus. We maintain that we have never been a “shell company” as defined under the federal securities laws, because of our ownership and development of the technology involving unmanned aerial vehicles from our inception.

SUMMARIES OF REFERENCED DOCUMENTS

This prospectus contains references to, summaries of and selected information from agreements and other documents. These agreements and other documents are not incorporated by reference; but, many of them are filed as exhibits to our registration statement of which this prospectus is a part and which we have filed with the U.S. Securities and Exchange Commission. We believe the summaries and selected information provide all material terms from these agreements and other documents, but the summaries and selected information are qualified in their entirely by the full text of the agreements and documents, those of which we have filed you may obtain from the Public Reference Section of or online from the Commission. See “Where You Can Find Additional Information About Us” for instructions as to how to access and obtain these agreements and other documents. Whenever we make reference in this prospectus to any of our agreements and other documents, the references are not necessarily complete and you should refer to the exhibits t attached to our registration statement of which this prospectus is a part for copies of the actual agreement or other document.

FORWARD-LOOKING STATEMENTS

This prospectus contains forward–looking statements that involve risks and uncertainties. We use words such as “project”, “believe”, “anticipate”, “plan”, “expect”, “estimate”, “intend”, “should”, “would”, “could”, or “may”, or other such words, verbs in the future tense and words and phrases that convey similar meaning and uncertainty of future events or outcomes to identify these forward–looking statements. There are a number of important factors beyond our control that could cause actual results to differ materially from the results anticipated by these forward–looking statements. While we make these forward–looking statements based on various factors and using numerous assumptions, you have no assurance the factors and assumptions will prove to be materially accurate when the events they anticipate actually occur in the future.

The forward–looking statements are based upon our beliefs and assumptions using information available at the time we make these statements. We caution you not to place undue reliance on our forward–looking statements as (i) these statements are neither predictions nor guaranties of future events or circumstances, and (ii) the assumptions, beliefs, expectations, forecasts and projections about future events may differ materially from actual results. We undertake no obligation to publicly update any forward–looking statement to reflect developments occurring after the date of this prospectus.

RISK FACTORS

In addition to the forward-looking statements outlined in the preceding topic in this prospectus and other comments regarding risks and uncertainties included in the description of our business and elsewhere in this prospectus, the following risk factors should be carefully considered when evaluating our business. Our business, financial condition and financial results could be materially and adversely affected by any of these risks. The following risk factors do not include factors or risks which may arise or result from general economic conditions that apply to all businesses in general or risks that could apply to any issuer or any offering.

RISKS RELATED TO OUR CORPORATION:

Our independent registered public accounting firm has issued an opinion with an explanatory paragraph to the effect that there is substantial doubt about our ability to continue as a going concern.

Our independent registered public accounting firm has issued an opinion with an explanatory paragraph to the effect that there is substantial doubt about our ability to continue as a going concern. This unqualified opinion with an explanatory paragraph could have a material adverse effect on our business, financial condition, results of operations and cash flows. See “Plan of Operations” and Notes to our financial statements for the period ended September 30, 2012 and fiscal years ended June 30, 2012 and 2011, included elsewhere in this prospectus.

We have no committed sources of capital and do not know whether additional financing will be available when needed on terms that are acceptable to us, if at all. This going concern statement from our independent registered public accounting firm may discourage some investors from purchasing our stock or providing alternative capital financing. The failure to satisfy our capital requirements will adversely affect our business, financial condition, results of operations and prospects. Unless we raise additional funds, either through the sale of equity securities or one or more collaborative arrangements, we will not have sufficient funds to begin operations. Even if we take these actions, they may be insufficient, particularly if our costs are higher than projected or unforeseen expenses arise.

Our limited liquidity and financial resources threaten our ability to remain in business and pursue our business plan.

Our liquidity and financial resources are limited. We do not have sufficient capital to fund our plan of operations without additional debt or equity funding. We may be unable to become a “going concern” in the event we are unable to obtain additional debt or equity funding or experience a material increase in revenues, the last of which we view as unlikely in the near term. In the event we are not able to obtain funding on terms and conditions that are acceptable to us or achieve an increase in revenues, we may cease operations, in which event you would lose your entire investment. The notes to our financial statements contain a “going-concern” qualification in which our auditor expresses substantial doubt about our ability to remain in business.

We have incurred losses from operations since inception and continued losses threaten our ability to remain in business and pursue our business plan.

Since inception in 2009 through September 30, 2012, we have earned no revenues and incurred cumulative losses of $1,027,774 from operations. We anticipate incurring additional losses from operating activities in the near future. Even if we are able to obtain additional debt or equity funding, you have no assurance we will be able achieve profitability in our operations. Until we achieve break even between revenues and expenses, we will remain dependent on obtaining additional debt and equity funding. Without sufficient revenues, we may be unable to create value in our common stock, to pay dividends and to become a going concern. And, our lack of or expectation of profitability in the near future, if at all, can be expected to hamper our efforts to raise additional debt or equity funding. In the event we do not become profitable within a reasonable period of time, we may cease operations, in which event you will lose your entire investment.

We may not be able to obtain capital when desired on favorable terms, if at all, or without dilution to our stockholders.

We operate in emerging and rapidly evolving markets, which makes our prospects difficult to evaluate. It is possible that we may not generate sufficient cash flow from operations or otherwise have the capital resources to meet our future capital needs. If this occurs, then we may need additional financing to pursue our business strategies, including to:

·	hire additional engineers and other personnel;
·	develop new or enhance existing products;
·	enhance our operating infrastructure;
·	fund working capital requirements;
·	acquire complementary businesses or technologies; or
·	otherwise respond to competitive pressures.

If we raise funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could be significantly diluted, and these newly-issued securities may have rights, preferences or privileges senior to those of existing stockholders. You have no assurance that additional financing will be available on terms favorable to us, or at all. Future debt financing may contain covenants or other provisions that limit our operational or financial flexibility. In addition, certain of our customers require that we obtain letters of credit to support our obligations under some of our contracts.

Our limited operating history makes it difficult for you to evaluate the merits of purchasing our common stock.

We have been in business for less than four years and are a development-stage enterprise. Our lack of revenues and sales do not provide a sufficient basis for you to assess of our business and prospects. You have no assurance we will be able to generate sufficient revenues from our business to reach a break-even level or to become profitable in future periods. We are subject to the risks inherent in any new business a highly competitive marketplace. Products and services that we plan to introduce in the near future increase our new-business risks and your difficulty in assessing our prospects. You must consider the likelihood of our success in light of the problems, uncertainties, unexpected costs, difficulties, complications and delays frequently encountered in developing and expanding a new business and the competitive environment in which we operate. If we fail to successfully address these risks, our business, financial condition and results of operations would be materially harmed. Your purchase of our common stock should be considered a high risk investment because of our unseasoned, early stage business which may likely encounter unforeseen costs, expenses, competition and other problems to which such businesses are often subject.

We will incur increased costs as a result of being a public company. These costs will adversely impact our results of operations.

As a public company, we will incur significant legal, accounting and other expenses that a private company does not incur. Even though the Jumpstart Our Business Startups Act (JOBS Act) has recently been passed for the purpose, in part, of reducing the cost for some newly reporting issuers, we are uncertain whether the JOBS Act will apply to us and, if it does, the amount of cost reduction we can expect. The Sarbanes-Oxley Act of 2002 (SOX) and related rules resulted in an increase in costs of maintaining compliance with the public reporting requirements, as well as making it more difficult and more expensive for us to obtain directors' and officers' liability insurance. These added costs will delay the time in which we may expect to achieve profitability, if at all.

We have not established disclosure controls and procedures and controls over financial reporting. Without these controls, we may not accurately account for our financial transactions and report material transactions on a timely basis.

The Sarbanes-Oxley Act of 2002 (SOX) requires public companies to establish disclosure controls and procedures and controls over financial reporting and to periodically assess the effectiveness of the controls and procedures. Establishing and maintaining these controls and procedures is expensive. Satisfying the criteria for adequate controls and procedures is especially difficult for small public companies, such as we are, because limited personnel must perform tasks which should be divided among a greater number of personnel to achieve checks and balances. Without adequate controls and procedures, and periodically assessing the effectiveness of controls and procedures we do establish, you have no assurance that we will timely and accurately report financial and other material information to the public securities markets. Such failures may result in errors in our reports. And, the prospect of such failures and errors due to weaknesses in our controls and procedures may diminish the credibility of our reports filed under the Securities Exchange Act of 1934.

If you invest in our stock, your investment may be disadvantaged by future funding, if we are able to obtain it.

To the extent we obtain equity funding by issuance of convertible securities or common stock, or common stock purchase warrants in connection with either type of funding, you may suffer significant dilution in percentage of ownership and, if such issuances are below the then value of stockholder equity, in stockholder equity per share. Future increases in the number of our shares outstanding will have a negative impact on earnings per share, increasing the earnings we must achieve to sustain higher prices for our common stock. In addition, any debt financing we may secure could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital with which to pursue our business plan, and to pay dividends. You have no assurance we will be able to obtain any additional financing on terms favorable to us, if at all.

Loss of key personnel could have a material adverse effect on our operations.

We are particularly dependent upon our current executive management during the period before we achieve commercially sustainable operations, of which you have no assurance. The termination of one or more members of our current executive management, all of whom we employ on a part-time basis, for any reason in the near future could be expected to have a materially adverse effect on us because we only have three members of management at the date of this prospectus and we believe we cannot employ replacements for any of them who would have their level of dedication to, vision for and financial interest in us. Furthermore, it is probable any qualified replacements would require full-time employment at the salary and benefits which can be expected to exceed our financial resources in the foreseeable future.

Our executive officers may not devote their full working time to our business and affairs, which could hamper our business development.

Our executive officers may from time to time devote a portion of their working time to providing consulting services through Affiliated Business Services, a company owned by Mr. Salmons’ daughter but effectively dependent on Mr. Salmon for management and providing client services. Mr. Ayers is an associate consultant of Affiliated Business Services. Affiliated Business Services is not actively seeking clients. In the event new or returning clients seek consulting services, Messrs. Ayers and Salmon believe any services which they provide will not deprive us of any significant time and attention.

Voting control by management and two other persons means it is unlikely you and other stockholders will be able to elect our directors and you will have little influence over our management.

Our management will own a total of approximately sixty-one percent of our shares after the dividend distribution made pursuant to this prospectus. Each issued and outstanding share of common stock is entitled to one vote on each nominee for a directorship and on other matters presented to stockholders for approval. Our Articles of Incorporation do not authorize cumulative voting for the election of directors. Any person or group who controls or can obtain more than fifty percent of the votes cast for the election of each director, as does management and the two other stockholders in the aggregate, will control the election of all directors and other stockholders will not be able to elect any directors or exert any influence over management decisions. Removal of a director for any reason requires a majority vote of our issued and outstanding shares of common stock.

If we are unable to effectively manage our growth, our ability to implement our business strategy and our operating results will likely be materially adversely affected.

Implementation of our business plan will likely place a significant strain on our management, administrative, operating and financial infrastructures, which are limited. To manage our business and planned growth effectively, we must successfully develop, implement, maintain and enhance our financial and accounting systems and controls, identify, hire and integrate new personnel and manage expanded operations. Our failure to do so could either limit our growth or cause our business to fail.

RISKS RELATED TO OUR BUSINESS:

We operate in evolving markets, which makes it difficult to evaluate our business and future prospects.

Our UAS and components, including electric vehicle charging systems and other energy technologies will be sold in new and rapidly evolving markets. Accordingly, our business and future prospects may be difficult for you to evaluate. We cannot accurately predict the extent to which demand for our products will increase, if at all. The challenges, risks and uncertainties frequently encountered by companies in rapidly evolving markets could impact our ability to do the following:

·	generate sufficient revenue to achieve profitability;
·	acquire and maintain market share;
·	manage growth in our operations;
·	develop and renew contracts;
·	attract and retain engineers and other highly-qualified personnel;
·	successfully develop and commercially market new products;
·	adapt to new or changing policies and spending priorities of governments and government agencies; and
·	access additional capital when required and on reasonable terms.

If we fail to address these and other challenges, risks and uncertainties successfully, our business, results of operations and financial condition would be materially harmed.

Our management’s lack of significant experience in designing, manufacturing and marketing unmanned aerial vehicles may prevent, delay or inhibit the development of our business.

Our management does not have significant experience in designing, manufacturing and marketing unmanned aerial vehicles. Previous experience is limited to efforts to obtain funding for an earlier company founded by Mr. Salmon. That company was unable to obtain sufficient funding to continue in business and was closed in 2009. Messrs. Ayers and Salmon have been seeking funding for our operations since our inception in 2009. Accordingly, we expect to need to employ personnel with experience in these areas of our business if we expect to become successful in the development of our business. Employment of experienced personnel will require funding, without which we too may be required to close our business.

If we are unable to manage our growth, our business could be adversely affected.

The number of our employees and size of our operations may grow rapidly over the foreseeable future. We expect rapid growth will place a strain on our management and our administrative, operational and financial infrastructure. We anticipate growth of headcount and facilities will be required to address expansion in our product offerings and the geographic scope of our customer base. Our success will depend in part upon the ability of our senior management to manage this growth effectively. To do so, we must hire, train, manage and integrate a significant number of qualified managers and engineers. If our new employees perform poorly, or if we are unsuccessful in hiring, training, managing and integrating these new employees, or retaining these or our existing employees, then our business may suffer.

We must recruit and retain highly-skilled employees to succeed in our competitive business.

We will depend on our ability to recruit and retain employees who have advanced engineering and technical services skills and who work well with our customers. These employees are in great demand and are likely to remain a limited resource in the foreseeable future. If we are unable to recruit and retain a sufficient number of these employees, then our ability to maintain our competitiveness and grow our business could be negatively affected. In addition, because of the highly technical nature of our products, the loss of any significant number of our personnel could have a material adverse effect on our business and operating results.

Our products are complex and could have unknown defects or errors, which may give rise to claims against us, diminish our brand or divert our resources from other purposes.

Our UAS will rely on complex avionics, sensors, user-friendly interfaces and tightly-integrated, electromechanical designs to accomplish their missions, and our electric vehicle charging and power cycling and test systems often rely upon the application of intellectual property for which there may have been little or no prior commercial application. Despite testing, our products may contain defects and errors or performance problems when first introduced, when new versions or enhancements are released, or even after these products have been used by our customers for a period of time. These problems could result in expensive and time-consuming design modifications or warranty charges, delays in the introduction of new products or enhancements, significant increases in our service and maintenance costs, exposure to liability for damages, damaged customer relationships and harm to our reputation, any of which could materially harm our results of operations and ability to achieve market acceptance. In addition, increased development and warranty costs could be substantial and could reduce our operating margins.

The existence of any defects, errors, or failures in our products or the misuse of our products could also lead to product liability claims or lawsuits against us. A defect, error or failure in one of our UAS could result in injury, death or property damage and significantly damage our reputation and support for our UAS in general. We anticipate this risk will grow as our UAS begin to be used in U.S. domestic airspace and urban areas.

We plan to maintain insurance policies, you have no assurance this insurance will be adequate to protect us from all material judgments and expenses related to potential future claims or that these levels of insurance will be available at economical prices or at all. A successful product liability claim could result in substantial cost to us. Even if we are fully insured as it relates to a claim, the claim could nevertheless diminish our brand and divert management's attention and resources, which could have a negative impact on our business, financial condition and results of operations.

Our products will require outfitting with third party systems meeting the specifications of each customer. Significant numbers of potential customers may be unwilling to experience the custom outfitting of our airframes and prefer off-the-shelf unmanned aerial systems provided by our competitors.

We will be marketing only the airframe for our unmanned aerial vehicles, which we will need to equip with a propulsion system, flight controls, communications equipment, camera, sensing and other equipment to meet each customer’s specific requirements. These component systems must be acquired from third party vendors. Our airframes must be customized to accommodate the mounting configurations of this third party equipment. These factors may place us at a competitive disadvantage in the marketplace and prevent us from becoming a going concern, in which event we would close our operations and you would lose your entire investment.

The operation of UAS in urban environments may be subject to risks, such as accidental collisions and transmission interference, which may limit demand for our UAS in such environments and harm our business and operating results.

Urban environments may present certain challenges to the operators of UAS. UAS may accidentally collide with other aircraft, persons or property, which could result in injury, death or property damage and significantly damage the reputation of and support for UAS in general. While we are aware of only one instance of an accidental collision involving one of our UAS to date, as the usage of UAS has increased, particularly by military customers, the danger of such collisions has increased. In addition, obstructions to effective communications transmissions in urban environments, such as large buildings, may limit the ability of the operator to utilize the aircraft for its intended purpose. The risks or limitations of operating UAS in urban environments may limit their value in such environments, which may limit demand for our UAS and consequently materially harm our business and operating results.

Failure to obtain necessary regulatory approvals from the FAA or other governmental agencies, or limitations put on the use of small UAS in response to public privacy concerns, may prevent us from expanding the sales of our small UAS to non-military customers in the United States.

In 2006, the FAA issued a clarification of its existing policies stating that, in order to engage in public use of small UAS in the U.S. National Airspace System, a public operator must obtain a COA from the FAA, or fly in restricted airspace. The FAA's COA approval process requires that the public operator certify the airworthiness of the aircraft for its intended purpose, that a collision with another aircraft or other airspace user is extremely improbable, that the small unmanned aircraft system complies with appropriate cloud and terrain clearances and that the operator or spotter of the small unmanned aircraft system is generally within one half-mile laterally and 400 feet vertically of the small unmanned aircraft system while in operation. Furthermore, the FAA's clarification of existing policy stated that the rules for radio-controlled hobby aircraft do not apply to public or commercial use of small UAS.

On February 14, 2012, the FAA Modernization and Reform Act of 2012 was enacted, establishing various deadlines for the FAA to allow expanded use of small UAS for both public and commercial applications. In response to this direction, the FAA and the DOJ established an agreement on May 14, 2012 that, if implemented in a timely and efficient manner, may allow more use of small UAS by U.S. law enforcement agencies. The FAA has also drafted updated regulations specifically for small UAS commercial operations and is in the process of obtaining approval to release for public comment. However, we cannot assure you that these actions will result in the expanded use of our small UAS by law enforcement or other non-military government agencies or commercial entities and we may not be able to expand our sales of small UAS beyond our military customers, which could harm our business prospects.

In addition, there exists public concern regarding the privacy implications of U.S. commercial and law enforcement use of small UAS. This concern has included calls to develop explicit written policies and procedures establishing usage limitations. We cannot assure you that the response from regulatory agencies, customers and privacy advocates to these concerns will not delay or restrict the adoption of small UAS by non-military customers.

Our business plan depends on marketing of our products, which may not be accepted in the marketplace.

Our industry is extremely competitive and we have not offered a product into that industry as of the date of this prospectus. In order to achieve successful operations we will depend on effective marketing to gain any significant market share. Without significant market share, we may not become profitable and could be forced to cease operations.

We plan to operate in and expand into extremely competitive environments, which could make it difficult for us to achieve market recognition and revenues.

We will operate in an extremely competitive environment and the markets for our products are characterized by rapidly changing technologies, frequent new product introductions, short product life cycles and evolving industry standards. Our success depends, in substantial part, on the timely and successful introduction of our new products and thereafter upgrades of our products to comply with emerging industry standards and to address competing technological and product developments by our competitors. The current designs for airframes may not lend themselves to significant improvements or innovations. The research and development of new, technologically advanced products is a complex and uncertain process requiring high levels of innovation and investment, as well as the accurate anticipation of technology, market trends and customer needs. We may focus our resources on technologies that do not become widely accepted, are not timely released or are not commercially viable. In addition, our products may contain defects or errors that are detected only after deployment. If our products are not competitive or do not work properly, our business could suffer and our financial performance could be negatively impacted. You have no assurance that new products will be accepted in the marketplace. If our products and services do not achieve market acceptance, our revenues will be significantly below the level we anticipate.

We face many risks because we do not own any proprietary intellectual property rights.

We do not have any patent or other rights to the designs of our unmanned aerial vehicles. If our unmanned aerial vehicles prove to be successful in the market, we have no legal protections or means to prevent others from copying or otherwise utilizing our designs. Such other parties may have greater financial resources and marketing contacts than we have. In this event, we would experience significant disadvantage in selling our planned product line, to the extent that we could be forced to cease operations.

The uncertainty of current economic and political conditions makes budgeting and forecasting difficult.

Current conditions in the domestic and world economies remain very uncertain. The global financial crisis, U.S. unemployment levels and ongoing political conflicts in the Middle East and elsewhere have created many economic and political uncertainties that have impacted worldwide markets. As a result, it is difficult to estimate changes in various parts of the world economy, including the markets in which we participate. Because all components of our allocation of resources, budgeting and forecasting are dependent upon estimates of demand for our products, which are based on consumer demand for products and services, the prevailing economic uncertainties render estimates of future income and expenditures difficult.

RISKS RELATED TO INVESTMENT IN OUR SHARES:

You may incur federal income tax as a result of your receipt of the dividend distribution.

We are not able to predict the fair market value of our shares that the Internal Revenue Service may claim immediately following the dividend distribution. To the extent such fair market value exceeds your taxable basis in the PV Enterprises International stock to which the dividend relates, the excess will be treated as short or long term capital gain, based on your holding period for the PV Enterprises International stock. As a result, you may be required to include some amount related to the dividend in your taxable income for federal and state income tax purposes, even though you receive no cash in connection with the transaction. You will be required to use other sources of cash to pay any increase in your income tax related to the dividend.

You may find it difficult to sell our shares because there is no public market for our shares and you have no assurance a public market will develop.

There is currently no market for our common stock. You will only be able to sell our shares if a public market develops for our stock. If a public market does develop, you have no assurance how sustained or active the public market for our common stock will become or remain. It is likely that the public market for our common stock will be volatile, in that it may be subject to wide and unpredictable price and volume swings. Accordingly, you may find it difficult to sell our common stock should you invest in it.

Outstanding shares that are eligible for future sale could adversely impact a public trading market for our common stock, if a public trading market develops.

The three million shares of our common stock that will be distributed under this prospectus, including dividend shares distributed to our management, are eligible for immediate resale in the public securities markets, if a public market develops for our common stock. However, dividend shares distributed to our management will not be part of the “public float” because our management must satisfy certain requirements of Rule 144 with respect to a limitation on the number of shares sold in a three month period, filing of Form 144 and the manner in which the shares are sold. We will have an additional 5,599,095 shares which are “restricted securities”, as defined in Rule 144, which will also be eligible for resale into the public securities markets after we have been a reporting company for ninety days, beginning on the effective date of the registration statement of which this prospectus is a part. The amount of restricted shares which are available for sale into the public market, should such a market be developed, with or without the sale of those shares, could depress our stock price until such time, if ever, that an active and liquid market for our common stock develops and the restricted shares are sold by their owners.

"Penny stock” rules may make buying and selling our common stock difficult.

We expect trading in our common stock will be subject to the "penny stock" rules of the Securities and Exchange Commission. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules generally require that prior to a transaction in a penny stock the broker-dealer 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 our common stock and limiting the number of broker-dealers who will accept our common stock in their customers’ accounts. As a result, you may find it more difficult to sell our common stock into the public market.

MANAGEMENT’S PLAN OF OPERATIONS FOR THE NEXT TWELVE MONTHS

Subject to obtaining funding to start operations, our plan of operations for the following six months is as follows:

We plan to target the United States domestic market which has begun to embrace the use of UAS. This co-insides with the expected easing of flying restrictions by the FAA as they move toward full implementation of integrating UAS flight operations in the US by 2015. In the interim we must secure a COA (certificate of authorization) from the FAA for specific flight operations to be conducted within the United States airspace. We plan to riley on the efforts of our distributors to develop business outside the USA.

Month One:

1. Develop known prospects. Our potential customers will come from several identified private and public segments. We currently have two distributers that promote our products. One distributor has exclusive territory marketing rights in Brazil, Ecuador, Peru and Mexico.

Private sector:

Water and power distribution facilities, reservoirs, pipelines, transmission lines and other public utility operations.

Ranch operations which normally are located in unpopulated areas. The use of our systems can be operator controlled or autonomous and each operate under different regulations. There are no restrictions for flight conducted below 400 ft OGL.

Large farming enterprises which requires constant crop monitoring for diseases, erosion, etc. are excellent prospects for our UAS products.

Public sector:

State and local police agencies for security, search and rescue and event monitoring.

Beaches and Ports

Federal Agencies:

Homeland Security

FEMA

U.S. Coast Guard

National Guard

Interior Forest Service

Military Organizations

CIA

2. Build one of each model for flight demonstration activity. Complete flight tests and technical documentation of performance.

Month Two:

1. Continue marketing activities.

2. Establish demonstration location that is strategically accessible to the Washington D.C. area to meet the Federal procurement demands.

3. Set up a mobile demonstration unit that can travel as required to prospects site for specific platform demos.

4. Close initial order for UAS.

Month Three:

1. Continue marketing activities working with our distributors and their agents.

2. Demonstrate products to a minimum of four target prospects.

3. Establish corporate office location.

4. Identify manufacturing location sites.

5. Close a minimum of one order.

6. Initiate trading as a public company.

Month Four:

1. Continue marketing efforts.

2. Demonstrate products to a minimum of four target prospects.

3. Establish corporate office.

4. Complete manufacturing site selection and begin preparations for production.

5. Conduct road show for securities brokers.

Month Five:

1. Continue marketing activities.

2. Demonstrate products to a minimum of four target prospects.

3. Open corporate office.

4. Quality control test of manufacturing facility.

5. Close a minimum of one order.

6. Attend the 2013 International conference on Unmanned Aircraft Systems, ICUAS'13, will be held in Atlanta, GA, the city called the Queen of the South, on May 28-31. May 28 will be a Workshop/Tutorial day, followed by a three day technical Conference. ICUAS'13 will host representatives from academia, industry, federal/state agencies, government, the private sector, users, practitioners and engineers who wish to be affiliated with and contribute technically to this highly demanding and rapidly evolving and expanding field. ICUAS'13 will be sponsored by the ICUAS Association, a non-profit organization; details about the organization may be found at www.icuas.com.

Month Six:

1. Continue marketing activities.

2. Demonstrate products to a minimum of four target prospects.

3. Begin manufacturing products.

4. Initiate development of new products and enhancements to current products.

5. Close a minimum of one order.

6. Promote the company to the investing public.

7. Additional plans:

Attend: 2-15 August 2013 Walter E. Washington Convention Center - Washington, DC

AUVSI's Unmanned Systems 2013 is the premier networking event for the unmanned systems community for the air, ground and maritime industries and draws over 8,000 attendees, more than 600 exhibitors and over 300 members of the press and media.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL STATEMENTS

AND RESULTS OF OPERATIONS

The following discussion covers only items of expense that demonstrate a material change for the years ended June 30, 2012 and 2011 and the quarters ended September 30, 2011 and 2012.

Professional fees
For the year ended June 30,

2012	2011	Increase (Decrease)	Percentage change

$6,950	$2,700	$4,250	100%

The reason for the increase was the incurrence of accounting fees in 2011 in preparation for filing the registration statement of which this prospectus is a part, and of transfer agent’s fees and costs.

General and adminstrative
For the year ended June 30,

2012	2011	Increase (Decrease)	Percentage change

$62,506	$157,952	($95,446)	-60%

The reason for the decrease was the elimination of two staff positions in 2011which were shifted to the parent company upon the acquisition by the parent company of PV Enterprises, Inc.

General and adminstrative
For the three months ended September 30,

2012	2011	Increase (Decrease)	Percentage change

$0	$8,518	($8,518)	-100%

The reason for the change was travel costs in 2011 that were not incurred in 2012.

LIQUIDITY, CAPITAL RESOURCES AND CAPITAL COMMITMENTS

Liquidity means our ability to generate adequate amounts of cash to meet our needs for cash on a short and long term basis. We have not earned any revenues which would be source of liquidity. At September 30, 2012, we had cash in bank of $4,489. Accordingly, our short and long term liquidity may be deemed to be nil. Our liquidity to date has been limited private placement of our common stock and has been insufficient to meet our expenses.

At September 30, 2012, we had no capital resources, negative working capital of $906,912 and no capital commitments. At that date, we had cash in bank of $489. We do not have any other assets on our balance sheet at September 30, 2012. Our balance sheet has been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business.

You have no assurance that we will be able to sell additional common stock in the future, or that if we can sell it, the terms of sale will be acceptable to us. Any such sales may be below the price you pay for our common stock in the market. To fully implement our plan of operations, we expect to require $____ million from the sale of our common stock over the next six months. In the event we require additional capital to fund operations and growth, we may need to sell securities in private placements or obtain debt funding. You have no assurance we will be able to make private sales of our securities or obtain debt funding, if we should have a need so to do.

GOING CONCERN

We have incurred net losses of $1,032,117 since inception (July 6, 2009) through September 30, 2012. The report of our independent registered public accounting firm on our financial statements for the period of inception through June 30, 2012 contains an explanatory paragraph regarding our ability to continue as a going concern based upon our accumulated deficit of $1,032,117 as of September 30, 2012 and a working capital deficit of $906,912. These factors, among others, raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty. You have no assurance we will be successful in our efforts to obtain funding for operations, generate revenues or report profitable operations or to continue as a going concern, in which event you would lose your entire investment.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The most critical accounting policies are those associated with stock as listed below:

Earnings (Loss) Per Share

Basic EPS is calculated by dividing the loss available to common shareholders by the weighted average number of common shares outstanding during each period. Diluted EPS is similarly calculated, except that the denominator includes common shares that may be issued subject to existing rights with dilutive potential, except when their inclusion would be anti-dilutive. Potential common stock equivalents were outstanding as of September 30, 2012 and 2011, related to the convertible notes payable. The Company’s stock is not currently traded; however, if converted at the agreed floor conversion price ($.01) there could, potentially, be 12,500,000 additional common shares issued.

Stock Based Compensation

The Company may issue restricted stock to consultants for various services. Cost for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty's performance is complete. The Company will recognize consulting expenses and a corresponding increase to additional paid-in-capital related to stock issued for services. There has been no issuances of stock based compensation for the years ended June 30, 2012 and 2011 or the three months ended September 30, 2012.

RECENT ACCOUNTING PRONOUNCEMENTS

The Company reviews new accounting standards as issued. No new standards had any material effect on these financial statements. The accounting pronouncements issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on these consolidated financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these consolidated financial statements as presented and does not anticipate the need for any future restatement of these consolidated financial statements because of the retro-active application of any accounting pronouncements issued subsequent to September 30, 2012 through the date these financial statements were issued.

DISCLOSURE CONTROLS AND PROCEDURES & INTERNAL CONTROL OVER FINANCIAL REPORTING

307 – Disclosure controls and procedures: As of June 30, 2012, we carried out an evaluation of the effectiveness of our disclosure controls and procedures, with the participation of our principal executive and principal financial officers. Disclosure controls and procedures are defined in Exchange Act Rule 15d–15(e) as “controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act (15 U.S.C. 78a, et seq.) is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms and include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.” Based on our evaluation, our Chief Executive Officer/Chief Executive Officer and Chief Financial Officer have concluded that, as of June 30, 2011 and June 30, 2012, we did not have adequate disclosure controls and procedures.

The primary reasons for management’s conclusions are that we did not have a plan in place for implementing controls and procedures and insufficient personnel to implement checks and balances. We believe that we will not have sufficient funds available to develop a plan in the foreseeable future. We do not anticipate that our business will need sufficient personnel in the foreseeable future that are needed to implement checks and balances.

308(b) – Changes in internal control over financial reporting: Based upon an evaluation by our management of our internal control over financial reporting, with the participation of our principal executive and principal financial officers, there were no changes made in our internal control over financial reporting during the periods ended June 30, 2011 and June 30, 2012 that have materially affected or are reasonably likely to materially affect this control.

Limitations on the Effectiveness of Internal Control: Our management does not expect that our disclosure controls and procedures, if any, or our internal control over financial reporting, if any, will necessarily prevent all fraud and material errors. An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations on all internal control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, and/or by management override of the control. The design of any system of internal control is also based in part upon certain assumptions about risks and the likelihood of future events, and there is no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in circumstances and the degree of compliance with the policies and procedures may deteriorate. Because of the inherent limitations in a cost-effective internal control system, financial reporting misstatements due to error or fraud may occur and not be detected on a timely basis.

OUR BUSINESS

OVERVIEW

We plan to manufacture and market a line of lightweight, comparatively inexpensive, low altitude, low speed unmanned aerial systems (UAS) utilizing our unmanned aerial vehicles (UAV) for civilian, law enforcement and non-combat military use. We believe our UAV airframe design is capable of handling a greater payload at a lower cost, compared to our competition. The company for which the original versions of our UAV airframe were developed sold a small number of UAVs to the U.S. Air Force, Army, Navy and National Security Agency and to an Australian government agency. Our UAV airframe has undergone improvements after that time, and we plan to continue the development of improvements and additions to our existing UAV airframe design. Our UAV airframe can be flexibly equipped with a variety of off-the-shelf propulsion systems, flight controls and navigation systems, camera and sensing, computer, communications and other equipment required by the individual customer and available from numerous suppliers. Our UAV airframe provides a platform for the equipment needed for deployment in service and, when fully equipped, is generally referred to as an UAS. We believe that the markets for UAS have significant growth potential.

OUR STRATEGY

Our strategy is to provide a flexible UAS platform in a variety of sizes that can be equipped to meet the specific needs of our customers, rather than offering a turn-key, take it or leave it solution which may not address the specific requirements and needs of a customer. We believe that the greater payload capacities of our UAV airframe make it a superior UAV which will be more attractive to a broad range of customers.

The airworthiness and functionality of our UAV airframe design has been proven by the company for which it was originally designed. That company manufactured and sold a limited number of airframes using the original designs for our UAV airframe.

MARKET BACKGROUND

The domestic and worldwide market for small UAS has grown significantly over the last decade, initially due to the U.S. military's post-cold war transformation, and more recent deployment in the Iraq and Afghanistan theatres, following the terrorist attacks of September 11, 2001, as the U.S. military has required improved, distributed observation and targeting of enemy combatants who operate in small groups, often embedded in dense population centers or dispersed in remote locations. These systems provide critical, real-time observation and communications. Today, military use of UAS, often referred to as “drones”, is generally accepted as an everyday fact, which has opened domestic and worldwide markets for UAS in border surveillance, law enforcement, first response, infrastructure monitoring and many other applications.

OUR UAV AIRFRAME

Our UAV airframe, which we have trade named the Border GuardTM model is “hand launched”, usually utilizing an electric propulsion system powered by rechargeable batteries which can be switched out in a matter of minutes. It can be launched in minutes from virtually anywhere, not requiring an airfield with a runway, catapult or launch platform for takeoff and landing, or significant ground support. It has a flexible modular system designed to snap in the payload components for a fully functional UAS. It is transportable to site and launched by hand. The Border GuardTM model has been proven in actual use by customers of the company for which the original designs of the Border GuardTM model were developed.

Our Border GuardTM model utilizes a soft wing of the Rogallo design developed by the National Atmospheric and Space Administration. Our Boarder GuardTM model is scalable. The small model with a wingspan of eight inches can carry a payload of up to two pounds with on-station endurance of up to two hours. The largest model with a wingspan of forty-eight inches can carry a thirty-pound payload with on-station endurance of up to ten hours. Airspeeds vary from as low as twenty mph to thirty-five mph, depending on size of the airframe and the propulsion system selected. A maximum altitude of 5,000 feet is achievable in all models.

USES OF UAS AND MARKETS

Permitted uses of UAS in the United States depend on federal regulation. See “Government Regulation”, below. Existing regulations specifically and functionally restrict UAS use in the United States to public or governmental entities. While we believe that significant commercial and research uses exist for UAS, we are not able to predict the extent to which non-public commercial and research uses may be permitted under government regulations. Accordingly, we expect to focus our attention on federal, state and local governmental units and agencies in the United States, including uses in:

Law enforcement	Border patrol
Military	Environmental quality
Forestry	Agriculture
Infrastructure monitoring and survey	Geological survey, mapping and events
Public events monitoring	Homeland Security

Permitted uses of UAS in foreign markets may be more or less restrictive than in U.S. air space. We plan to focus our marketing efforts on governmental units and commercial enterprise in foreign markets on a case-by-case basis, which we are unable to predict at the present time.

MARKETING, SALES AND OUR POTENTIAL CUSTOMERS

We plan to develop a direct sales force, as well as distributors and resellers. At the date of this prospectus, we do not have any sales force, distributors or resellers. We expect emphasize on the benefits of using our UAV airframe as a platform for the equipment needed to address the problems of each customer. We do not expect to sell the UAV airframes by themselves, but will work with each customer to select the equipment needed to address the purposes of intended use. We plan to deliver only fully functional UAS. We plan to engage in domestic and international marketing and sales efforts. We plan to offer a distributor license which will grant the holder a specific geographic territory and authorize the distributor sell and service our UAV airframe products subject to payment of a minimum fee each month. We plan to use resellers for persons or entities who do not want to purchase rights to a territory.

State and Local Agencies –
Police and fire, state, county and city	Public infrastructure operators
Port authorities	Waste treatment agencies
Water and power distribution operators	Sports authorities

Federal Agencies –
Homeland Security	Air Force
Border Patrol	Army
Federal Emergency Management Agency	Navy
U.S. Coast Guard	Central Intelligence Agency
Border Patrol	Defense Intelligence Agency
National Forest Service	National Park Service
U.S. Geological Survey

Obtaining orders from and selling products such as UAS to federal, state and local governments and agencies is typically a cumbersome and lengthy process, subject to budgetary limitations, often involving competitive bidding, requiring satisfaction of detailed specifications in requests for proposals, penalties for performance delays and delays in payment. You have no assurance either we or our distributors or resellers will be successful in selling UAS to governmental buyers.

MANUFACTURING

We own molds for three different sizes of our UAV airframe, ranging from twelve inches to sixty inches in length. Initially, each UAV airframe will be hand built based on a customer’s order. We believe we can deliver the first Border GuardTM within approximately forty-five days of receiving funding, which we expect to be tied to a specific order, in the event we are unable to obtain debt or equity funding for operations and inventory. We believe typical production will require approximately thirty days from start to delivery of the fully equipped UAS. Raw materials consist primarily of epoxy resin, fiberglass cloth, metal tubing and rip stop nylon for the wing. These raw materials are available from a variety of sources in the U.S. Each UAV airframe body will be laid up and finished by hand. The propulsion system, flight controls and navigation systems, camera and sensing, computer, communications and other equipment required by the individual customer and available from numerous suppliers. At a later time, subject to funding, we intend to establish our own manufacturing facility in a geographic area to be determined. We cannot predict when, if ever, our order volume may necessitate the mass production of one or more Border GuardTM models.

GOVERNMENT REGULATION

The market for non-military small UAS is in an early stage of development. The primary factors hindering the development of this market in the U.S. have included laws and regulations under the jurisdiction of the Federal Aviation Administration, which regulates airspace for all air vehicles and has severely restricted the use of small UAS in the National Airspace System, which is one of the most complex aviation systems in the world. In 2006, the FAA issued a clarification of its existing policies stating that, in order to engage in public use of small UAS in the National Airspace System, a public (government) operator must obtain a Certificate of Authorization, or COA, from the FAA or fly in restricted airspace. The FAA's COA approval process requires that the public operator certify the airworthiness of the aircraft for its intended purpose, that a collision with another aircraft or other airspace user is extremely improbable, that the small unmanned aircraft system complies with appropriate cloud and terrain clearances and that the operator or spotter of the small unmanned aircraft system is generally within one-half mile laterally and 400 feet vertically of the small unmanned aircraft system while in operation. Furthermore, the FAA's clarification of existing policy states that the rules for radio-controlled hobby aircraft do not apply to public or commercial use of small UAS. In February 2012, the U.S. Congress passed and the President signed the Federal Aviation Administration Modernization and Reform Act, mandating that the FAA develop rules providing for the full integration of small UAS into the National Airspace System by September 30, 2015. The FAA is in the process of drafting updated regulations specifically for small UAS operations. Initial likely non-military users of small UAS include public safety organizations such as law enforcement agencies, search and rescue teams and fire departments. Congress has expressed concern about privacy issues which should be addressed in the regulations. Privacy issues may restrict the use of UAS domestically.

Communication equipment in a UAS is subject to regulation by the National Telecommunications and Information Administration and the Federal Communications Commission, which regulate the wireless communications upon which UAS depend in the U.S. We believe that the providers of communications equipment selected by the buyers of our UAV will be required to satisfy the regulations regarding wireless communication, and such regulations will not have a direct impact on our business.

We are not able to provide information about government regulation of UAS outside of the U.S. at this time. However, we do expect to confront foreign regulation in our international sales efforts, which may hinder or prohibit sales in any particular country.

OUR INTELLECTUAL PROPERTY

Our intellectual property consists of the proprietary designs for our UAV airframe. We do not hold any patents and do not believe any features of our current UAV airframe are patentable; and, all of its features being readily apparent from inspection. Therefore, we do not have rights to any intellectual property which we can enforce by legal action. We cannot predict if any improvements to the design of our UAV airframe will provide an opportunity for patent protection.

RESEARCH AND DEVELOPMENT

We intend to begin efforts to improve and enhance the design of our UAV airframe and develop additional airframe designs as soon as we have funding for this purpose. We may expand into other basic airframe designs through acquisition or research and development.

COMPETITION

We believe our potential market for UAS will be in hand-launched models. Most of the competitors in the UAS market require an airfield or airfield like environment, catapult or other launch equipment. In a survey of companies producing UAS by specification or appearance suitable for hand launching, we have identified the companies noted below. The UAS market for smaller, price efficient models is highly competitive, dominated by a few major suppliers. Compared to us, these competitors are well established with a recognized reputation in the marketplace and have greater financial resources than we do. Notable competitors are:

Competitor	Model name	Competitor’s web site*
AAI Corporation	Orbiter	http://www.aaicorp.com/products/uas/uas_main.html
Aurora Flight Sciences Corp.	Skate	http://www.aurora.aero/Products/Skate.aspx
Aerovironment, Inc.	Raven	http://www.avinc.com/uas/
	Wasp	http://www.avinc.com/uas/

*The web sites provide in general photos and specifications for the products.

Honeywell International manufactures a wingless, vertical takeoff UAS. http://www.thawkmav.com/index.php.

We may not have been able to identify all competitors who offer hand-launched UAVS. If and when the market for low cost UAS expands, we anticipate additional competitors will enter the marked, perhaps even including major competitors currently offering larger UAS, such as Raytheon, Bell Helicopter and others. Our competitors may be able to provide customers with different or greater capabilities or benefits than we can provide in areas such as technical qualifications, past contract performance, geographic presence, price and the availability of key professional personnel, including those with security clearances. Furthermore, many of our competitors may be able to utilize their substantially greater resources and economies of scale to develop competing products and technologies, manufacture in high volumes more efficiently, divert sales away from us by winning broader contracts or hire away our employees by offering more lucrative compensation packages. Small business competitors may be able to offer more cost competitive services, due to their lower overhead costs, and take advantage of small business incentive and set-aside programs for which we are ineligible. In the event that the market for small UAS and services expands, we expect that competition will intensify as additional competitors enter the market and current competitors expand their product lines. In order to secure contracts successfully when competing with larger, well-financed companies, we may be forced to agree to contractual terms that provide for lower aggregate payments to us over the life of the contract, which could adversely affect our margins. In addition, larger diversified competitors serving as prime contractors may be able to supply underlying products and services from affiliated entities, which would prevent us from competing for subcontracting opportunities on these contracts. Our failure to compete effectively with respect to any of these or other factors could have a material adverse effect on our business, prospects, financial condition or operating results.

DESCRIPTION OF OUR PROPERTY

We do not have any property at the date of this prospectus. Our management is conducting our business in their respective home offices. In the event we are able to establish operations, of which you have no assurance, we will require general office space, which we anticipate we will lease on an annual or longer term basis. In the event we manufacture our UAVs, we will require general manufacturing space. We cannot predict the square footage of we may require for either offices or manufacturing, which will in each case depend on the level of our operations and number of employees. We believe both office and manufacturing space is readily available in the Greater Tampa Bay area.

OUR EMPLOYEES

Our executive officers are our only employees at the date of this prospectus. Our executive officers may devote a portion of their working time to businesses other than ours. We expect to add personnel in the future in the event we are able to establish operations.

LITIGATION

We are not engaged in any litigation at the date of this prospectus and do not expect to be engaged in litigation of a routine nature in the future. We are not aware of any claims, demands or threatened litigation. We may be subjected to personal injury and property damage claims resulting from operation of our UAVS. We may be subject to warranty claims related to our UAVS. We intend to maintain product and public liability insurance to limit the amount of any such claims which we must pay out-of-pocket.

OUR MANAGEMENT

The following table sets forth information about our directors, our executive officers and persons who have agreed to become our directors, subject to our purchase of directors and officers liability insurance, who have consented to be named in this prospectus.

NAME	AGE	POSITION	Director Since
Alvin Ayers	77	Director, Chief Financial Officer and Corporation Secretary	inception
Victor J. Hugo, Jr.	81	Director	inception
Edwin B. Salmon	75	Chairman of Board and Chief Executive Officer	inception

Our stockholders elect our directors. Our directors serve terms of one year and are generally elected at each annual stockholders meeting; provided, that there is no assurance we will hold a stockholders’ meeting annually. Each director will remain in office until his successor is elected. We do not have independent directors using the definition of independence contained in the NASDAQ listing rules. Our executive officers are elected by the board of directors and their terms of office are at the discretion of the board of directors, subject to terms and conditions of their respective employment agreements, if any. We have the authority under Florida law and our bylaws to indemnify our directors and officers against certain liabilities. We have been informed by the U.S. Securities and Exchange Commission that indemnification against violations of federal securities law is against public policy and therefore unenforceable.

Management Biographies

Alvin Ayers is one of our directors and serves as our corporation secretary beginning at inception. Mr. Ayer’s employment history during the past five years is as follows:

2007	to	present	Mr. Ayers is an associate consultant with Affiliated Business Services, Inc. For more information, see Mr. Salmon’s biographical information, below.

2010	to	06/30/2012	Mr. Ayers was the chief financial officer and corporation secretary of PV Enterprises International, Inc., our parent company prior to the dividend covered by the registration statement of which this prospectus is a part. PV Enterprises International was intended to engage in the UAV business, but recently focused its attention on ocean shipping. PV Enterprises International reported approximately $750,000 in revenues for the year ended June 30, 2012.

Victor J. Hugo, Jr. is one of our directors beginning at inception. He is a Maj. General, U.S. Army, Ret.

1996	to	present	Gen. Hugo is an independent consultant specializing in defense and management issues with focus on the Middle East and Southeast Asia. Clients include L3, Raytheon, and U.S. government departments and agencies.

2007	to	present	He serves on the Board of Directors of Help Wounded Troops, a (501(c)(3) organization focused on helping military personnel suffering from PTSD and TBI.

2007	to	present	Independent consultant specializing in Defense and Management issues with focus on the Middle East and Southeast Asia. Clients include L3, Raytheon and US government.

2004	to	07/01/2012	Gen. Hugo served on the Board of Directors, National War College Alumni Association, a 501(c)(3) organization which conducts of National Security Seminars outside the DC area.

2007	to	present	he is Senior Vice President of the OSS Society, a 501 (c)(3) organization which celebrates the historic accomplishments of the OSS during World War II—the first organized effort by the United States to implement a centralized system of strategic intelligence and the predecessor to the Central Intelligence Agency and the U.S. Special Operations Command — and educates the American public regarding the continuing importance of strategic intelligence and special operations to the preservation of freedom in this country and around the world.

Gen. Hugo earned a Bachelor of Science degree (1954) from the United States Military Academy, West Point. He earned two Masters of Science degrees: one (1966) in International Affairs from George Washington University and the other (1978) in Systems Management from the University of Southern California.

Edwin B. Salmon is our chairman of the board and our Chief Executive Officer, beginning at inception. Mr. Salmon’s employment history during the past five years is as follows:

2007	to	present	Mr. Salmon is the president of Affiliated Business Services, Inc., a Florida corporation legally owned by his step-daughter. Affiliated Business Services, which is now essentially dormant, provides consulting services to small businesses. When in operation, Affiliated Business had an average of five clients, four employees and approximately $250,000 in annual.

2008	to	2009	he was the chief financial officer of AirBot-UAV, Inc., a Florida corporation, a development stage company intending to design and manufacture hand-launched UAVs for the commercial and military markets. We will be using some of the same plans used by AirBot-UAC. AirBot-UAV was closed in July 2009 due to insufficient funding.

2010	to	12/12/2011	he was the chief executive officer of PV Enterprises International, Inc., our parent company prior to the dividend covered by the registration statement of which this prospectus is a part. PV Enterprises was intended to engage in the UAV business, but recently focused its attention on ocean shipping. PV Enterprises reported approximately $750,000 in revenues for the year ended June 30, 2012.

Mr. Salmon attended the University of Richmond, Virginia.

BOARD COMMITTEES

Our board of directors does not have compensation, nominating, audit committees or any other committees. Our board of directors has not adopted a code of ethics.

HOW WE COMPENSATE OUR MANAGEMENT

The following table sets forth information concerning the compensation we have accrued to the named executive officers for all services rendered in all capacities, for our fiscal year ended June 30, 2012.

Name	Position	Salary*	Total compensation*

Alvin Ayers	Corporation Secretary	$75,000	$75,000

Edwin B. Salmon	Chief Executive Officer	$120,000	$120,000

*Compensation has been accrued and not paid.

EMPLOYMENT AGREEMENTS

We have an employment agreement with Mr. Ayers and Mr. Salmon. The following table summarizes the terms of the employment agreements.

Name	Beginning	Ending	Annual Bonus	Non-compete

Alvin Ayers	08/01/2009	07/31/2010*	5% of EBITA	yes

Edwin B. Salmon	08/01/2009	07/31/2014**	10% of EBITA	yes

*Renews annually for one year terms, unless terminated by either party.

**Renews annually for five year terms, unless terminated by either party.

Each contract provides that the employee will receive additional benefits which are made available to employees generally, which would include paid vacation suitable to the position held.

HOW WE COMPENSATE OUR DIRECTORS

Two of our directors are also two of our executive officers. We do not compensate the directors separately from their executive compensation. We compensate Gen. Hugo, Jr. for his service as a director at a rate of $2,500 per quarter.

WHO OWNS OUR COMMON STOCK

Our principal stockholders are set forth in the following table. The number of shares owned by PV Enterprises International, the only shares we then had issued and outstanding, have been adjusted for a reverse stock split on December 13, 2012 which reduced our issued and outstanding shares to exactly three million shares. These principal stockholders include:

·	each of our directors and executive officers,
·	our directors and executive officers as a group, and
·	others who we know own more than five percent of our issued and outstanding common stock.

We believe each of these persons has sole voting and investment power over the shares they own, unless otherwise noted. The address of our directors and executive officers is our address.

	Number		Percentage
Name:	Before*	After*	Before*		After *
Alvin Ayers(1)	5,500,000	2,536,047	64.509	%	29.745	%
Victor J. Hugo, Jr.	100,000	100,200	1.173	%	1.175	%
Edwin B. Salmon(2)	5,500,000	2,542,924	64.509	%	29.745	%
All directors and officers as a group(3) (3 persons)	8,100,000	5,172,294	95.015	%	60.665	%
PV Enterprises International, Inc. (4)	3,000,000	none	35.191	%	0	%
Suite 305, 1850 SE 17th Street, Ft. Lauderdale, FL 33316

*Before and after the dividend distribution.

**Less than one percent.

(1)	Includes the three million shares legally owned by PV Enterprises International, which are the subject of the dividend distribution described in this prospectus. Messrs. Ayers and Salmon hold a joint proxy from PV Enterprises International, to vote our shares pending the dividend distribution.

(2)	Includes the three million shares legally owned by PV Enterprises International, which are the subject of the dividend distribution described in this prospectus. Messrs. Ayers and Salmon hold a joint proxy from PV Enterprises International, to vote our shares pending the dividend distribution.

(3)

The three million shares legally owned by PV Enterprises International, which are the subject of the dividend distribution described in this prospectus are included only once in the total shares owned by directors and officers, even though those shares are included in the total for each of Mr. Ayers and Mr. Salmon.

(4)	The three million shares are also included in the total number of shares legally and beneficially owned by Mr. Ayers and Mr. Salmon. These shares have been adjusted for a reverse stock split of the shares owned by PV Enterprises International to exactly three million shares on December 13, 2012.

RELATED PARTY TRANSACTIONS AND RELATIONSHIPS

We have not engaged in any related party transactions in our last fiscal year and current year to date of this prospectus.

MARKET INFORMATION AND RELATED STOCKHOLDER MATTERS

Public Market Information

At the date of this prospectus, there is no public market for our common stock. We have made arrangements with a securities broker-dealer as a market maker to apply for a trading symbol and, when issued, publish quotes for our common stock. We expect our common stock to be quoted on the OTC Bulletin Board under the symbol “____”. We have been advised by the Financial Industry Regulatory Authority (FINRA) that it will issue our symbol when notified that the registration statement of which this prospectus is a part has been declared effective.

Our Stockholders

At the date of this prospectus, we have five record and beneficial holders of our common stock. Following the dividend distribution by PV Enterprises International, we expect to have approximately 115 record holders and approximately 476 beneficial holders of our common stock. We expect that over 1,000 stockholders of PV Enterprises International who hold less than 105 shares of its common stock will each be entitled to a total dividend of less than one share of our common stock and, accordingly will not receive any shares. Based on the expected immediate market value of less than one share of our common stock, neither PV Enterprises International nor we will be paying any cash value for the fractional shares not distributed. Such fractional shares will either be accounted for in possible rounding up of fractional shares held by stockholders entitled to receive them or will be cancelled.

Dividends

We have not paid a cash dividend on our common stock and do not expect to pay a cash dividend in the foreseeable future. Our board of directors has the sole authority to declare dividends. Our payment of dividends in the future will depend on our earnings, capital requirements, expansion plans, financial condition and other relevant factors.

Our Transfer Agent

Our transfer agent is Olde Monmouth Stock Transfer Co., Inc., 200 Memorial Pkwy, Atlantic Highlands, New Jersey 07716. Olde Monmouth’s telephone number is 732-872-2727.

DESCRIPTION OF OUR SECURITIES

The following description of our common stock is qualified in our entirety by reference to our Articles of Incorporation, as amended, our bylaws and Florida corporation law. We are authorized to issue 250,000,000 shares of common stock, $0.001 par value per share. The number of shares owned by PV Enterprises International, the only shares we then had issued and outstanding, have been adjusted for a reverse stock split reducing our issued and outstanding shares to exactly three million shares. At the date of this prospectus, we have 8,526,000 shares issued and outstanding. Holders of our common stock:

·	have one vote per share on election of each director and other matters submitted to a vote of stockholders;
·	have equal rights with all holders of issued and outstanding common stock to receive dividends from funds legally available therefore, if any, when, as and if declared from time to time by the board of directors;
·	are entitled to share equally with all holders of issued and outstanding common stock in all of our assets remaining after payment of liabilities, upon liquidation, dissolution or winding up of our affairs;
·	do not have preemptive, subscription or conversion rights; and
·	do not have cumulative voting rights.

All shares of our common stock outstanding are duly authorized, legally issued, fully paid and non-assessable.

Preferred stock

Our board of directors, without further stockholder approval, may issue up to ten million shares of preferred stock in one or more series from time to time and fix or alter the designations, relative rights, priorities, preferences, qualifications, limitations and restrictions of the shares of each series.

The rights granted to the holders of any series of preferred stock could adversely affect the voting power of the holders of common stock and issuance of preferred stock may delay, defer or prevent a change in our control.

HOW PV ENTERPRISES INTERNATIONAL WILL DISTRIBUTE OUR SHARES

On June 21, 2012, PV Enterprises International’s board of directors declared a dividend to be paid to holders of its common stock consisting of all 3,000,000 shares, as adjusted for a reverse stock split on December 13, 2012, or 35.19 percent of our common stock which PV Enterprises International now owns. PV Enterprises International’s board of directors, which included at that time Messrs. Ayers and Salmon, determined that PV Enterprises International did not have an interest in pursuing our business. The record date for the dividend will be determined when and after we determine a probable effective date of the registration statement of which this prospectus is a part. PV Enterprises International has 374,510,970 common shares issued and outstanding. Accordingly, PV Enterprises International will distribute one share of our common stock for each 125 shares of PV Enterprises International common stock issued and outstanding. Fractional shares, if any, will be rounded up to the next whole only when the recipient would own at least one whole share prior to rounding, and we will issue a sufficient number of additional shares to PV Enterprises International for distribution of the dividend as may be necessary to accommodate the rounding of fractional shares. A stockholder of PV Enterprises who would own only a fractional share of our common stock (that is a stockholder of PV Enterprises International who owns less than 125 shares) will not receive any share.

PV Enterprises International may be deemed to be a statutory underwriter of our shares for purposes of the distribution of the dividend.

Holders of PV Enterprises International’s common stock will not be required to take any action to receive our common stock. As soon as practicable following the effective date of the registration statement of which this prospectus is a part, our transfer agent will mail a stock certificate of each PV Enterprises International stockholder of record and credit Cede & Co., the nominee of The Depository Trust & Clearing Corporation, with the number of our shares of common stock required to satisfy the distribution to beneficial holders of PV Enterprises International’s commons stock held in brokerage accounts.

Neither PV Enterprises International, we nor any other person will receive any proceeds in connection with the dividend distribution by PV Enterprises International. We are paying all of the costs of the registration statement of which this prospectus is a part. We are solely responsible for the content of the registration statement and of this prospectus. We have undertaken the registration of the shares because of the potential benefit our management believes we may derive from being a publicly traded company, both in raising additional debt or equity financing and in marketing our products.

FEDERAL INCOME TAX TREATMENT OF THE DIVIDEND DISTRIBUTION

PV Enterprises International owns less than eighty percent of our common stock. Therefore, we expect the dividend distribution to be taxable. However, the value of our stock for tax purposes immediately following the distribution (which we will not be able to determine prior to the distribution) will be first applied to reduce the taxable basis the stockholder has in his or her PV Enterprises International stock. Stockholders who are not individual U.S. citizen or resident taxpayers may experience a different federal income tax treatment. We are not obtaining a ruling from the Internal Revenue Service or an opinion of tax counsel covering the tax treatment as described in this paragraph. We encourage you to consult your tax adviser regarding the proper federal income tax treatment of the dividend for your individual circumstances.

SHARES ELIGIBLE FOR FUTURE SALE

Sales of substantial amounts of our common stock in the public market could adversely affect prevailing market prices of our common stock. We have 8,599,095 shares of our common stock issued and outstanding at the date of this prospectus. The 5,599,095 shares held by our directors, officers and others are restricted securities and the resale of the shares into the public securities market will be subject to Rule 144. The 72,294 shares issued to our directors, officers and controlling persons pursuant to the registration statement of which is prospectus is a part will not be restricted securities, but will, nevertheless, be subject to the reporting requirements, broker’s transaction requirements and one-percent per each three month limitation of Rule 144.

Under Rule 144, as now in effect, restricted securities of an issuer who has been filing reports with the U.S. Securities and Exchange Commission for at least ninety days may be resold into the public market held by non-affiliates of the issuer without any limitation on amount beginning six months after the respective stockholders purchased their shares from us or from one of our directors, officers or control persons. At the date of this prospectus, none of our restricted securities have been held for more than six months. After this six month period, our directors, officers and control persons (those who own ten percent or more of our common stock) will be limited to selling not more than one percent of the then issued and outstanding number of our shares in any three month period, must file a Form 144 with the Commission and must sell the shares in unsolicited “broker’s transactions”, as defined in the rule and are subject to other limitations.

LEGAL MATTERS

Certain legal matters with respect to the validity of the shares of common stock offered hereby will be passed upon for us by Jackson L. Morris, Attorney at Law, Tampa, Florida. Mr. Morris owns 426,000 shares of our common stock which he has received as partial payment of fees and he will receive 801 shares in the dividend distribution based on his share ownership in PV Enterprises International, for total share ownership of 426,801.

EXPERTS

Our financial statements at and for the years ended and at June 30, 2012 and 2011 have been included in this prospectus in reliance on the report of DMK Certified Public Accountants, Clearwater, Florida, an independent registered certified public accounting firm, given on the authority of such firm as experts in auditing and accounting. On December 17, 2012, the audit firm of Drake & Klein CPAs changed its name to DKM Certified Public Accountants. The change was reported to the PCAOB as a change of name. This is not a change of auditors for the Company.

WHERE YOU CAN FIND MORE INFORMATION ABOUT US

We have filed a registration statement on Form S-1 under the Securities Act with the U.S. Securities and Exchange Commission for the common stock offered by this prospectus. This prospectus does not include all of the information contained in the registration statement. You should refer to the registration statement and our exhibits for additional information. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are not necessarily complete and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreement or other document. When we complete this offering, we will also be required to file annual, quarterly and special reports and other information with the SEC.

You can read our SEC filings, including the registration statement of which this prospectus is a part, and exhibits, over the Internet at the SEC’s website at www.sec.gov. You may also read and copy any document we file with the SEC at our Public Reference Room located at 100 F Street, N.E., Washington, D.C. 20549. You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Room of the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room.

Index to Financial Statements

		Page

Report of Independent Registered Public Accounting Firm		F-1

Balance sheets at June 30, 2011 and 2012 and at September 30, 2012 (unaudited)		F-2

Statement of operations for the for the years ended June 30, 2012 and 2011, and the three months ended September 30, 2012 (unaudited) and 2011 (unaudited)		F-3

Statement of changes in stockholders equity deficit from inception to September 30, 2012 (unaudited)		F-4

Statement of cash flows for the for the years ended June 30, 2012 and 2011, and three months ended September 30, 2012 (unaudited) and 2011 (unaudited)		F-5

Notes to financial statements		F-6

Drake & Klein CPAs

A PCAOB Registered Accounting Firm

Report of Independent Registered Public Accounting Firm

We have audited the accompanying balance sheet of Redtide Defense Group, Inc. as of June 30, 2012 and 2011, and the related statement of operations, stockholders’ deficiency, and cash flows for the years 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 audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Redtide Defense Group, Inc. at June 30, 2012 and 2011, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying financial statements, the Company has significant net losses and cash flow deficiencies. Those conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding those matters are described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Drake & Klein CPAs

Drake & Klein CPAs

Clearwater, Florida

October 26, 2012

F-1

IMAG Group, Inc.

f/k/a Redtide Defense Group, Inc.

(a development stage entity)

Balance Sheet

	June 30,			June 30,			September 30,
	2012			2011			2012
							(unaudited)
Assets
Current assets
Cash	$	4		$	257		$	489
Accounts receivable		-			-			-
Prepaid expenses		-			-			-
Total current assets		4			257			489

Property and equipment, net of accumulated
depreciation of $748 and $187, respectively		935			1,496			795


Total assets	$	939		$	1,753		$	1,284

Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	3,250		$	800		$	4,522
Accrued expenses		594,768			387,458			647,078
Deferred revenue		-			-			-
Convertible notes payable		125,000			90,000			135,000
Derivative liability		-			-			-
Due to shareholders		126,045			92,792			126,045
Total current liabilities		849,063			571,050			907,401

Notes payable		-			-			-

Total liabilities		849,063			571,050			907,401

Stockholders' Deficit
Preferred Stock, no par value, 10,000,000 shares
authorized; none issued and outstanding		-			-			-
Common Stock, $0.001 par value, 250,000,000 shares
authorized; 3,000,000 and 3,000,000 shares
issued and outstanding, respectively		3,000			3,000			3,000
Additional paid-in capital		123,000			88,000			123,000
Accumulated deficit		(974,124	)		(660,297	)		(1,032,117	)
Total stockholders' deficit		(848,124	)		(569,297	)		(906,117	)

Total Liabilities and Stockholders' Deficit	$	939		$	1,753		$	1,284

The accompanying notes are an integral part of these financial statements.

F-2

IMAG Group, Inc.

f/k/a Redtide Defense Group, Inc.

(a development stage entity)

Statement of Operations

														July 06, 2009
														(inception)
	For the Year Ended						For the Three Months Ended							through
	June 30,						September 30,							September 30,
		2012			2011			2012			2011			2012
							(unaudited)			(unaudited)				(unaudited)
Revenues	$	-		$	-		$	-		$	-		$	-

Direct costs		-			-			-			-			-

Gross Margin		-			-			-			-			-

Operating expenses:
Compensation		195,000			195,000			48,750			48,750			617,500
Professional		6,950			2,700			1,200			1,450			10,850
Stock-based compensation		-			-			-			-			-
General and administrative		62,506			157,952			4,343			33,918			252,801
Depreciation and amortization		561			187			140			140			888
		-			-			-			-			-
Total operating expenses		265,017			355,839			54,433			84,258			882,039

Net loss from operations		(265,017	)		(355,839	)		(54,433	)		(84,258	)		(882,039	)

Other expense
Interest expense		(13,810	)		(7,708	)		(3,560	)		(2,990	)		(25,078	)
Beneficial conversions		(35,000	)		(90,000	)		-			(35,000	)		(125,000	)
Unrealized change in derivative		-			-			-			-			-
Net loss before provision for income taxes		(313,827	)		(453,547	)		(57,993	)		(122,248	)		(1,032,117	)

Provision for income taxes		-			-			-			-			-

Net loss	$	(313,827	)	$	(453,547	)	$	(57,993	)	$	(122,248	)	$	(1,032,117	)



Loss per share, primary and dilutive	$	(0.10	)	$	(0.15	)	$	(0.02	)	$	(0.04	)

Weighted average shares outstanding
primary and dilutive		3,000,000			3,000,000			3,00			3,000,000

The accompanying notes are an integral part of these financial statements.

F-3

IMAG Group, Inc.

f/k/a Redtide Defense Group, Inc.

(a development stage entity)

Statements of Stockholders' Deficit


										Additional						Stock-
	Preferred				Common					Paid in			Accumulated			Holders'
	Shares		No Par		Shares			No Par		Capital			Deficit			Deficit

Balance at July 9, 2009 (inception)		-	$	-		-		$	-	$	-		$	-		$	-

Common shares issued to founders for incorporation expenses						11,953,000			1,000								1,000

Retroactive reverse split and par value change						(8,953,000	)		2,000		(2,000	)					-

Net loss														(206,750	)		(206,750	)
Balance at June 30, 2010		-		-		3,000,000			3,000		(2,000	)		(206,750	)		(205,750	)

Beneficial conversion											90,000						90,000

Net loss														(453,547	)		(453,547	)
Balance at June 30, 2011		-		-		3,000,000			3,000		88,000			(660,297	)		(569,297	)

Beneficial conversion											35,000						35,000

Net loss														(313,827	)		(313,827	)
Balance at June 30, 2012		-	$	-		3,000,000			3,000		123,000			(974,124	)		(848,124	)

Net loss														(57,993	)		(57,993	)
Balance at September 30, 2012 (unaudited)		-		-	$	3,000,000		$	3,000	$	123,000		$	(1,032,117	)	$	(906,117	)

The accompanying notes are an integral part of these financial statements.

F-4

IMAG Group, Inc.

f/k/a Redtide Defense Group, Inc.

(a development stage entity)

Statements of Cash Flows

													July 06, 2009
	For the Year Ended						For the Three Months Ended						(inception)
	June 30,						September 30,						through
	2012			2011			2012			2011			September 30, 2012
							(unaudited)			(unaudited)			(unaudited)

Cash Flows from Operating Activities:
Net loss	$	(313,827	)	$	(453,547	)	$	(57,933	)	$	(122,248	)	$	(1,032,117	)
Adjustment to reconcile net loss to net
cash provided by operations:
Depreciation and amortization		561			187			140			140			888
Stock based compensation		-			-			-			-			-
Beneficial conversions		35,000			90,000			-			35,000			125,000
Change in derivative liability		-			-			-			-			-
Changes in assets and liabilities:
Accounts receivable		-			-			-			-			-
Prepaid expenses		-			-			-			-			-
Accounts payable		2,450			700			1,272			1,450			4,522
Accrued expenses		207,310			208,708			52,310			45,740			647,078
Deferred revenue		-			-			-			-			-
Shareholder advances		33,253			65,892			(5,244	)		4,759			120,801
Net Cash Used by Operating Activities		(35,253	)		(88,060	)		(9,515	)		(35,159	)		(133,828	)

Cash Flows from Investing Activities:
Purchase of fixed assets		-			(1,683	)		-			-			(1,683	)
Net Cash Used by Investing Activities		-			(1,683	)		-			-			(1,683	)

Cash Flows from Financing Activities:
Proceeds from notes payable		35,000			90,000			10,000			35,000			135,000
Proceeds from issuance of equity		-			-			-			-			1,000
Net Cash Provided by Financing Activities		35,000			90,000			10,000			35,000			136,000


Net increase (decrease) in Cash		(253	)		257			485			(159	)		4

Cash at beginning of period		257			-			4			257			-

Cash at end of period	$	4		$	257		$	489		$	98		$	489


Supplemental cash flow information:
Interest paid	$	-		$	-		$	-		$	-		$	-
Taxes paid	$	-		$	-		$	-		$	-		$	-

Non-cash disclosures
In-kind equity contribution by shareholders	$	-		$	-		$	-		$	-		$	1,000

The accompanying notes are an integral part of these financial statements.

F-5

Redtide Defense Group, Inc.

Notes to Financial Statements

September 30, 2012

1. History of the Company and Summary of Significant Accounting Policies

History of the Company

Redtide Defense Group, Inc. (“the Company”) was organized under the laws of the State of Florida, incorporated on July 6, 2009. The Company is a wholly-owned subsidiary of PV Enterprises International Inc.

Nature of Business

The Company was created to provide an inexpensive and technically superior solution to a growing worldwide demand for Unmanned Air Vehicles commonly referred to as UAV's. The Company provides support to foreign and domestic militaries as well as to public and private organizations internationally. Virtually every country spends a significant part of GNP averting terrorism, promoting National Defense, response to natural disasters as well as assist in crime fighting and civil unrest. The Company is a single choice providing affordable, easily maintained and complete surveillance systems without the significant expense of hiring "high tech personnel" capable of operating existing surveillance systems in remote areas of the world.

Based on a flexible modular system, our units utilize the most advanced technology including but not limited to soft wing, low impact, payload stability, target acquisition and targeting, and snap in technology.

2. Summary of Significant 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 not been any significant revenues derived from operations.

Basis of Accounting

The Company prepares its financial statements in conformity with generally accepted accounting principles in the United States of America. These principals require 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 of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that these estimates are reasonable and have been discussed with the Board of Directors; however, actual results could differ from those estimates.

Use of Estimates

F-6

Redtide Defense Group, Inc.

Notes to Financial Statements

September 30, 2012

2. Summary of Significant Accounting Policies (continued)

Financial Instruments

The Company’s balance sheets include the following financial instruments: cash, accounts payable, accrued expenses, note payable and notes payable to stockholder. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization. The carrying values of the note payable to stockholder approximates fair value based on borrowing rates currently available to the Company for instruments with similar terms and remaining maturities.

In September 2006, the Financial Accounting Standards Board (FASB) introduced a framework for measuring fair value and expanded required disclosure about fair value measurements of assets and liabilities. The Company adopted the standard for those financial assets and liabilities as of the beginning of the 2008 fiscal year and the impact of adoption was not significant. FASB Accounting Standards Codification (ASC) 820 “Fair Value Measurements and Disclosures” (ASC 820) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

·	Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
·	Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
·	Level 3 - Inputs that are both significant to the fair value measurement and unobservable.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2012. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash, accounts payable, accrued expenses. The fair value of the Company’s notes payable is estimated based on current rates that would be available for debt of similar terms which is not significantly different from its stated value.

The Company applied ASC 820 for all non-financial assets and liabilities measured at fair value on a non-recurring basis. The adoption of ASC 820 for non-financial assets and liabilities did not have a significant impact on the Company’s financial statements.

As of September 30, 2012 and 2011, the fair values of the Company’s financial instruments approximate their historical carrying amount.

Cash and Cash Equivalents

The Company maintains its cash with a major financial institution in the United States. Generally, deposits may be redeemed on demand and, therefore, bear minimal risk. The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

F-7

Redtide Defense Group, Inc.

Notes to Financial Statements

September 30, 2012

2. Summary of Significant Accounting Policies (continued)

Property and Equipment

Property and equipment is stated at cost. Depreciation is computed by the straight-line method over estimated useful lives (5 years). Historical costs are reviewed and evaluated for their net realizable value of the assets. The carrying amount of all long-lived assets is evaluated periodically to determine if adjustment to the depreciation and amortization period or the unamortized balance is warranted. Based upon its most recent analysis, the Company believes that no impairment of property and equipment existed at September 30, 2012.

Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. We did not recognize any impairment losses for any periods presented.

Stock Based Compensation

Advertising Costs

The costs of advertising are expensed as incurred. Advertising expenses are included in the Company’s operating expenses. Advertising expense was $0 for the three months ended September 30, 2012 and 2011.

Research and Development

The Company expenses research and development costs when incurred. Indirect costs related to research and developments are allocated based on percentage usage to the research and development. Research and development expense was $0 for the three months ended September 30, 2012 and 2011.

Income Taxes

The Company accounts for income taxes under the liability method. Deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose, referred to as temporary differences. Deferred tax assets and liabilities at the end of each period are determined using the currently enacted tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized.

F-8

Redtide Defense Group, Inc.

Notes to Financial Statements

September 30, 2012

2. Summary of Significant Accounting Policies (continued)

Earnings (Loss) Per Share

Impact of Recently Issued Accounting Pronouncements

Except for rules and interpretive releases of the SEC under authority of federal securities laws and a limited number of grandfathered standards, the FASB Accounting Standards Codification™ (“ASC”) is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company. Management has reviewed the aforementioned rules and releases and believes any effect will not have a material impact on the Company.

3. Going Concern

As of September 30, 2012, the Company has a working capital deficit and has incurred a loss from operations and recurring losses since its inception resulting in an accumulated deficit. The Company has had no revenues since its inception. As of June 30, 2012, the Company had negative working capital, and minimal cash with which to satisfy any future cash requirements. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The Company depends upon capital to be derived from future financing activities such as loans from its officers and directors, subsequent offerings of its common stock or debt financing in order to operate and grow the business. There can be no assurance that the Company will be successful in raising such capital. The key factors that are not within the Company's control and that may have a direct bearing on operating results include, but are not limited to, acceptance of the Company’s business plan, the ability to raise capital in the future, to continue receiving funding from its officers, directors and shareholders, the ability to expand its customer base, and the ability to hire key employees to grow the business. There may be other risks and circumstances that management may be unable to predict.

4. Property and Equipment

	September 30, 2012 (Unaudited)		June 30, 2012		June 30, 2011
Computer equipment	$	1,683	$	1,683	$	1,683
Less: Accumulated depreciation	$	888	$	748	$	187
	$	795	$	935	$	1,496

Depreciation expense was $140 for each of the three months ended September 30, 2012 and 2011.

F-9

Redtide Defense Group, Inc.

Notes to Financial Statements

September 30, 2012

5. Accrued Expenses

Accrued expenses at September 30, 2012 and June 30, 2012 were as follows:

	September 30, 2012 (Unaudited)		June 30, 2012		June 30, 2011
Accrued salaries	$	617,500	$	568,750	$	373,750
Accrued interest	$	25,078	$	21,518	$	7,708
Accrued expenses	$	4,500	$	4,500	$	6,000
	$	647,078	$	594,768	$	387,458

6. Convertible Notes Payable

The Company issued Promissory Notes, at various dates, to three individuals, in exchange for cash. These notes have identical terms: interest rate of 10%; due on demand; and no stated maturity date. The notes have a conversion feature, whereby the holder may convert any portion of their note into common shares at a 50% discount to the average five previous day closing price of the market, with a floor price of $.01.

The Company evaluated the terms of the new note in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity’s Own Stock and determined that the underlying common stock is indexed to the Company’s common stock. The Company determined that the conversion features did not meet the definition of a liability and therefore did not bi-furcate the conversion feature and account for it as a separate derivative liability. The Company evaluated the conversion feature for a beneficial conversion feature. The effective conversion price was compared to the market price on the date of the note and was deemed to be less than the market value of underlying common stock at the inception of the notes. The beneficial conversion feature was recorded as an increase in additional paid-in capital and a discount to the Convertible Notes Payable. The discount to the Convertible Notes Payable was expensed at origination date, as the notes are deemed to be demand notes with no maturity date.

Balances outstanding as of September 30, 2012, June 30, 2012 and June 30, 2011 were $135,000, $125,000 and $90,000, respectively. The Company has recognized a beneficial conversions resulting from the terms of the agreements in the amount of $0, $35,000 and $90,000 for the three months ended September 30, 2012 and the years ended June 30, 2012 and 2011, respectively.

7. Related Party Disclosures

Advances and Loans by Officers and Shareholders

In support of the Company’s efforts and cash requirements, it has relied on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by shareholders. Amounts represent advances or amounts paid in satisfaction of liabilities. The advances are considered temporary in nature and have not been formalized by a promissory note. Terms of the note have not been defined; however, the Company recognizes the nature of the financing and has commenced accruing interest at 3% interest rate. Interest is accrued and charged to interest expense. As of September 30, 2012, June 30, 2012 and June 30, 2011, the loans payable to shareholders were $120,801, $126,045 and $92,792, respectively.

F-10

Redtide Defense Group, Inc.

Notes to Financial Statements

September 30, 2012

7. Related Party Disclosures (continued)

Potential Conflicts

The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities that become available. They may face a conflict in selecting between the Company and other business interests. The Company has not formulated a policy for the resolution of such conflicts.

Employment Agreements

Edwin B. Salmon

Effective July 28, 2009, the Company entered into a five-year employment agreement with Edwin B. Salmon, one of the Company’s directors. The Agreement provides for (a) a base salary of $120,000 per annum; (b) a 10% bonus, based on the Company’s profit, as defined in the agreement; and (c) all group insurance plans and other benefit plans and programs made available to the Company’s management employees.

Alvin Ayers

Effective July 28, 2009, the Company entered into a five-year employment agreement with Alvin Ayers, one of the Company’s directors. The Agreement provides for (a) a base salary of $75,000 per annum; (b) a 5% bonus, based on the Company’s profit, as defined in the agreement; and (c) all group insurance plans and other benefit plans and programs made available to the Company’s management employees.

Facilities

The Company has minimal needs for office space. Currently the operations are performed from offices provided by the executives of the Company at a cost of $975 per month and the space is leased on a month to month basis. Rent expense of $2,925 and $0 has been recognized for the three months ended September 30, 2012 and 2011, respectively.

The amounts and terms of the above transactions may not necessarily be indicative of the amounts and terms that would have been incurred had comparable transactions been entered into with independent third parties.

8. Commitments and Contingencies

Legal Matters

From time to time the Company may be a party to litigation matters involving claims against the Company. Management believes that there are no current matters that would have a material effect on the Company’s financial position or results of operations.

9. Subsequent Events

The Company is anticipating a spin-out from its parent company, PV Enterprises International, Inc. The existing shareholders of the parent will receive a proportional share of the Company upon the formalization of the plan. At this time the number of shares of the Company that are to be issued to the existing shareholders of PV Enterprises International Inc. has not been determined.

F-11

Redtide Defense Group, Inc.

Notes to Financial Statements

September 30, 2012

9. Subsequent Events (continued)

Management has evaluated subsequent events through December 31, 2012, the date the financial statements were available to be issued. Management is not aware of any significant events that occurred subsequent to the balance sheet date that would have a material effect on the financial statements thereby requiring adjustment or disclosure.

On December 13, 2012, the Company filed an amendment to (i) change the name of the corporation to IMAG Group, Inc., to (ii) change the capital structure to 250,000,000 authorized shares of common stock at $0.001 par value and 10,000,000 authorized shares of preferred stock and (iii) combine the 11,953,000 shares of issued and outstanding shares of commons stock into 3,000,000 shares of common stock. These changes have been retroactively applied thorough out the statements. On December 18, 2012, the Company issued 5,526,000 shares of common stock to management and others.

F-12

[outside back cover of prospectus]

DEALER’S PROSPECTUS DELIVERY OBLIGATIONS

Until ___________________ (90 days after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this distribution, may be required to deliver a prospectus. This requirement is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 24. Indemnification of Directors and Officers.

Florida law authorizes us to indemnify our directors and executive officers against liability, damage or loss they may incur in their capacity as directors and executive officers, unless they breach their duty of loyalty to us, do not act in good faith, violate the law or receive improper personal benefit. These provisions limit our rights and the rights of our stockholders to recover damages against a director and executive officer. We have been informed by the U.S. Securities and Exchange Commission that insofar as indemnification for liabilities arising under the federal securities laws may be permitted to our directors, officers and controlling persons pursuant to Florida law, such indemnification is against public policy and is therefore unenforceable, except in limited circumstances and if certain procedures for independent approval are followed.

Item 25. Other Expenses of Issuance and Distribution.

The following table sets forth the costs and expenses, other than the underwriting fees, we expect to pay in connection with the sale of the common stock being registered. All amounts are estimates except the SEC registration fee and the NASD filing fees.

SEC registration fee	$	0.14
Printing and engraving costs	*
Legal fees and expenses (1)	$	30,000
Accounting fees and expenses		______
Transfer agent and registrar fees and expenses	______
Miscellaneous		*
Total	$

_____________

* To be filed by amendment.

(1)	Does not include 425,000 shares of the registrant issued to Jackson L. Morris, Esq., as additional compensation.

Item 26. Recent Sales of Unregistered Securities.

The registrant has issued the following shares of common stock without registration under the Securities Act of 1933 in the last three years:

Date	Name	Number of shares	Consideration	Relationship
December 18, 2012*	Alvin Ayers	2,500,000	Services	Director and Executive officer
December 18, 2012*	Victor J. Hugo, Jr.	100,000	Services	Director
December 18, 2012*	Jackson L. Morris	426,000	Services	Counsel
December 18, 2012*	Edwin B. Salmon	2,500,000	Services	Director and Executive officer

*Date of board approval.

The registrant issued all of the common stock identified above in reliance on the exemption from registration in Section 4(2) of the Securities Act of 1933, in that none of the sales involved a public offering. No broker or dealer was involved in the transactions and no commissions, fees or other compensation was paid in connection with the sales. The registrant’s existing relationships with the purchasers are indicated in the table. The registrant believes each purchaser had sufficient information about the registrant’s business and affairs, including financial condition and prospects, to make an informed investment decision.

II-1

Item 27. Index to Exhibits

	3.A.01	Articles of Incorporation and amendments
	3.B.01	Bylaws
	5	Opinion re: validity of the common stock
	23.1	Consent of Counsel, included in Exhibit 5
	23.2	Consent of Independent Registered Public Accounting Firm

Item 28. Undertakings.

(f)	The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

(h)

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the small business issuer pursuant to the foregoing provisions, or otherwise, the small business issuer has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against 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 the small business issuer of expenses incurred or paid by a director, officer or controlling person of the small business issuer in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the small business issuer will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

(i)	The undersigned Registrant hereby undertakes that:

	(1)	For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

	(2)	For the purpose of determining any liability under the Securities Act of 1933, each post- effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-2

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Safety Harbor, State of Florida on January 24, 2013.

IMAG Group, Inc.

By: /s/ Edwin B. Salmon

Edwin B. Salmon, Chief Executive Officer

Pursuant to 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 and Name	Capacity in which signed	Date

/s/ Alvin Ayers	Director and Chief Financial Officer	January 24, 2013
Alvin Ayers	(Principal financial and accounting officer)

/s/ Victor J Hugo, Jr.	Director	January 24, 2013
Victor J. Hugo, Jr.

/s/ Edwin B. Salmon	Director and Chief Executive Officer	January 24, 2013
Edwin B. Salmon	(principal executive officer)

II-3

IMAG Group, Inc. - FORM S-1 - January 25, 2013

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