SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 4, 2013
AVALANCHE INTERNATIONAL, CORP.
(Exact name of registrant as specified in its charter)
NEVADA 333-149299 77-0721432
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
2711 N. Sepulveda Blvd., Suite 323
Manhattan Beach, CA 90266
(Address of principal executive offices) (Zip Code)
323 449 2180
(Registrant's telephone number, including area code)
Stigu Street 26, Babites Pagasts, Rigas Rajon, Latvia LV 2101
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
[ ] Soliciting material pursuant to Rule 14a-12 under Exchange Act (17
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR240.13e-4(c))
ITEM 5.01. CHANGES IN CONTROL OF REGISTRANT
On February 4, 2013, our former president, Yulia Goldfinger, sold a total of
2,000,0000 shares of our restricted common stock, representing 78.9% of our
issued and outstanding common stock, to John Pulos.
Mr. Pulos paid $2,000 to Ms. Goldfinger in connection with the share purchase
from personal funds. There were no arrangements or understanding between Mr.
Pulos and Ms. Goldfinger and their associates with respect to the election of
directors or other matters.
ITEM 5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN
On February 4, 2013, we appointed John Pulos as our President, C.E.O.,
Secretary, Treasurer, as well as a director in place of Yulia Goldfinger, who
resigned from these positions and her director position on the same date. At the
time of her resignation, Ms. Goldfinger was our sole executive officer.
In connection with the change of control and the requirements of Form 8-K, we
provide the following Form 10 information:
DESCRIPTION OF BUSINESS
ORGANIZATION WITHIN THE LAST FIVE YEARS
We were incorporated in the State of Nevada on April 14, 2011. We have never
declared bankruptcy, have never been in receivership, and have never been
involved in any legal action or proceedings. Since incorporation, we have not
made any significant purchase or sale of assets. We maintain our statutory
registered agent's office at 2360 Corporate Circle, Suite 400, Henderson, Nevada
89074-7722. Our business office is located at 2711 N. Sepulveda Blvd., Suite
323, Manhattan Beach, CA, 90266. Our telephone number is 323-449-2180.
We were incorporated in the State of Nevada on April 14, 2011. We intend to
commence operations in the business of distributing crystallized glass tile in
North America. This material can be used in any residential, commercial indoor,
and outdoor surfacing applications generally for flooring. We have not generated
any revenues and our principal business activities to date consist of creating a
business plan and entering into a Marketing and Sales Distribution Agreement
with Jiangxi Dafeng Trading Co., Ltd. a private Chinese company that is an
established distributor of crystallized glass tile. The prices to be paid by us
under the Agreement are fixed and can be changed only with a supplemental
written agreement between Jiangxi Dafeng Trading Co., Ltd. and us.
We will require additional proceeds in order to commence our proposed plan of
operations for the next 12 months. Our plan of operation is forward-looking and
there is no assurance that we will ever begin operations. The total estimated
amount of funds required to develop our business is $ 40,000. We need funds for
general administrative expenses, business development, marketing costs, support
materials and costs associated with being a publicly reporting company. We are a
development stage company and have not earned any revenue from operations to
date. It is likely that we will not be able to achieve profitability and will
have to cease operations due to the lack of funding.
Our product is used principally in new developments, commercial and residential
construction, and in home improvement, remodeling, and repair work. The success
of our business plan will depend on the level of new construction and activity
in the retail sales market. A downturn in commercial and residential start-ups,
as well as a decrease in home improvement activity, can adversely affect our
We plan to distribute our crystallized glass tile in North American markets to
wholesale customers. We plan to fill placed orders and to supply the products
within a period of thirty days or less following receipt of any written order.
We do not intend to offer any credit terms relating to order payments. Our
customers will be asked to pay us 30% in advance and pay the remaining amount
due within three days after the product is loaded and has departed a sea port.
Customers will have two options to pay for products: by wire transfer or by
sending a check/money order. If a customer decides to pay by check/money order,
then we will wait a certain amount of days before shipping to ensure that the
check/money order has cleared. Customers will be responsible for shipping costs.
Since we anticipate having a 30 day period to process and fill orders, we do not
plan to purchase inventory in advance, but rather on a request basis. We do not
intend to store inventory for any period of time. The orders will be shipped to
the customers depending on customer requests. Customers will be responsible for
custom duties, taxes, or any other additional charges that might arise. All
shipments will be 100% insured for the value of the shipment and the insurance
cost for risk of damage or loss will be each customer's responsibility.
Crystallized glass is a synthetic building material that consists of natural
stone powder and crushed glass melted during 24 hours at the high temperature of
1500 degrees Celsius. Crystallized glass tile can be used in any residential,
commercial indoor, or outdoor surfacing applications. We chose to distribute
crystallized glass tile, as opposed to some other type of tile or flooring
material because we believe that it is new and an innovative construction
material. We also believe that it has true white color, high hardness, and wear
resistance as it made under extremely high temperatures. We anticipate that
crystallized glass will become a very popular flooring material. We plan to
distribute white crystallized glass tile. We will offer two sizes, 24" x 24" x
3/4" and 32" x 32" x 3/4".
Our president and director, John Pulos will market our product and negotiate
with potential customers. We intend to develop and maintain a database of
potential customers who may want to buy crystallized glass tile from us. We will
follow up with these clients periodically and offer them free samples,
presentations, and special discounts from time to time. We plan to attend trade
shows in our industry to showcase our product with a view to finding new
customers. If we sell more than 75% of the shares in this offering, we plan to
hire sales representatives to find potential customers.
We expect that our potential clients will consist of the following:
1. Flooring material distributors;
2. Specialized home building and restoration stores;
3. Chain stores that sell various types of building materials; and
4. Contractors, homebuilders and developers.
We will charge our clients wholesale prices for our product. Retailers and
distributors will resell our product at retail prices which are typically 25% to
40% higher. We cannot guarantee that we will be able to execute successful
contracts with the potential customers who will buy our crystallized glass tile,
in which case our business may fail and we will have to cease our operations.
The building products distribution industry is extremely fragmented and
competitive. Competitors will include companies with substantial customer bases
and working history. There can be no assurance that we can maintain a
competitive position against current or future competitors, particularly those
with greater financial, marketing, service, technical, and other resources. Our
failure to maintain a competitive position within the market could have a
material adverse effect on our business, financial condition, and results of
operations. There can be no assurance that we will be able to compete
successfully against current and future competitors, and competitive pressures
faced by us may have a material adverse effect on our business, financial
condition, and results of operations.
Some of the competitive factors that may affect our business are as follows:
1. Increase in Number of Competitors: other companies may follow our
business model of distributing lower priced crystallized glass tile,
which will reduce our competitive edge.
2. Price: Our competitors may be selling similar product at a lower price
forcing us to lower our prices as well and possibly sell our product
3. Substitute Products: crystallized glass tile may be substituted by
similar material such natural stone or porcelain tiles. Consumer
preferences for crystallized glass may change overtime which may
affect our business positively or negatively depending on whether
crystallized glass tile is preferred more or less.
We intend to enter into agreements with numerous local flooring distributors,
home building and restoration stores, developers, and homebuilders who can order
crystallized glass tile from us. As of today, we have not identified any
potential counterparties to these agreements and we have not entered into any
discussions with contractors and homebuilders. Our competitive advantage is that
we offer a high quality and innovative product, while maintaining reasonable
We intend to use marketing strategies, such as web advertisements, direct
mailing, and phone calls to acquire potential customers. We plan to develop a
website to market and display our products. As of the date of this report, we
have not yet identified or registered any domain names for our website. To
accomplish this, we plan to contract an independent web designing company. Our
website will describe our product in detail, show our contact information, and
include some general information and pictures of crystallized glass tile. We
intend to attract traffic to our website through a variety of online marketing
tactics, such as registering with top search engines using selected key words
and metatags, and utilizing link and banner exchange options. We intend to
promote our website by displaying it on our promotion materials.
We also plan to attend trade shows in the construction industry to showcase our
product with a view to finding new customers. We intend to spend from $14,000 to
$25,000 on marketing efforts during the first year of operations, subject to
financing. There is no guarantee that we will be able to attract, and more
importantly, retain enough customers to justify our expenditures. If we are
unable to generate a significant amount of revenue and to successfully protect
ourselves against those risks, then this would materially affect our financial
condition and our business could be harmed.
AGREEMENT WITH OUR SUPPLIER
On December 27, 2011 we signed a Marketing and Sales Distribution Agreement with
Jiangxi Dafeng Trading Co., Ltd., a private Chinese company. The agreement with
Jiangxi Dafeng Trading Co., Ltd. ("Jiangxi") contains the following material
1. Jiangxi grants to us the exclusive right to market, sell and
distribute the crystallized glass tile product (the "Product") in the
United States and Canada.
2. The initial term of the agreement shall be for a period of two years,
commencing on December 27, 2011. The Agreement may be extended by
mutual written consent of the parties.
3. The rights granted to us under the agreement shall terminate upon the
occurrence of any the following events: a) our failure to sell a
minimum of $250,000 of the Product annually during the first two years
of the Term ("Initial Minimum Sale Period"); or b) our failure to
increase the sale of the Product by a minimum of 10 percent each year
after the minimum sale period.
4. We will pay 30% fee as an advance and 70% within seven days after the
Product is loaded and departed from the sea and a bill of lading is
5. Prices are fixed as specified in pro forma and commercial invoices
that accompany each batch of goods. The price includes packaging,
normal marks, loading, and export custom charges.
6. The delivery of the Product shall be free on board as per INCOTERMS
2010, or the latest version available - pumped in ship's manifold,
Shanghai (local) Port, China.
7. Quality analysis is to be based on samples. Acceptance of the goods on
quality is made within 20 days from the moment of reception of the
goods in a warehouse of the final buyer.
8. All costs, duties, and audit taxes related to cargo at the loading
port at time of shipment shall be for Jiangxi's account.
As of the date of this report, we do not plan to retain other suppliers. If
Jiangxi Dafeng Trading Co., Ltd. decreased or terminated its relationship with
us, our business would likely fail if we were unable to find a substitute for
John Pulos, our president will be devoting approximately 20% of his business
time to our operations. Once we begin operations, and are able to attract more
and more customers to use our service, Mr. Pulos has agreed to commit more time
as required. Because Mr. Pulos will only be devoting limited time to our
operations, our operations may be sporadic and occur at times which are
convenient to him. As a result, operations may be periodically interrupted or
suspended, which could result in a lack of revenues and a cessation of
AN INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW AND THE OTHER INFORMATION IN THIS
PROSPECTUS BEFORE INVESTING IN OUR COMMON STOCK. IF ANY OF THE FOLLOWING RISKS
OCCUR, OUR BUSINESS, OPERATING RESULTS AND FINANCIAL CONDITION COULD BE
SERIOUSLY HARMED. THE TRADING PRICE OF OUR COMMON STOCK, WHEN AND IF WE TRADE AT
A LATER DATE, COULD DECLINE DUE TO ANY OF THESE RISKS, AND YOU MAY LOSE ALL OR
PART OF YOUR INVESTMENT.
BECAUSE OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS HAVE ISSUED A GOING
CONCERN OPINION, THERE IS SUBSTANTIAL UNCERTAINTY THAT WE WILL CONTINUE
OPERATIONS, IN WHICH CASE YOU COULD LOSE YOUR INVESTMENT.
Our independent registered public accountants have issued a going concern
opinion. This means that there is substantial doubt that we can continue as an
ongoing business for the next twelve months. The financial statements do not
include any adjustments that might result from the uncertainty about our ability
to continue in business. As such we may have to cease operations and you could
lose your investment. The Company can continue as a going concern without
obtaining additional working capital for approximately next two months from the
date of this report. We believe that existing cash on hand will be enough until
the next annual audit is due and we will have to pay auditors fees. Therefore,
we will need to obtain additional funds. If we are unable to obtain additional
working capital our business may fail.
WE HAVE NO OPERATING HISTORY AND HAVE MAINTAINED LOSSES SINCE INCEPTION, WHICH
WE EXPECT TO CONTINUE INTO THE FUTURE.
We were incorporated on April 14, 2011 and have limited operations. We have not
realized any revenues to date. Our proposed crystallized glass tile distribution
business is under development and we do not have crystallized glass tile for
commercial sale. We have no operating history at all upon which an evaluation of
our future success or failure can be made. Based upon our proposed plans, we
expect to incur significant operating losses in future periods. This will happen
because there are substantial costs and expenses associated with the
development, marketing, and distribution of our product. We may fail to generate
revenues in the future. If we cannot attract a significant number of customers,
we will not be able to generate any significant revenues or income. Failure to
generate revenues will cause us to go out of business because we will not have
the money to pay our ongoing expenses.
In particular, additional capital may be required in the event that:
* the actual expenditures required to be made are at or above the higher
range of our estimated expenditures;
* we incur unexpected costs in completing the development of our
business or encounter any unexpected difficulties;
* we incur delays and additional expenses related to the development of
our product or a commercial market for our product; or
* we are unable to create a substantial market for our product; or we
incur any significant unanticipated expenses.
The occurrence of any of the aforementioned events could adversely affect our
ability to meet our business plans and achieve a profitable level of operations.
THE FLOOR TILE DISTRIBUTION MARKET IS FRAGMENTED AND COMPETITIVE AND WE MAY NOT
BE ABLE TO COMPETE SUCCESSFULLY WITH OUR EXISTING COMPETITORS OR NEW ENTRANTS
INTO THE MARKETS WE SERVE.
The floor tile distribution market is fragmented and competitive. Our
competition varies by product line, customer classification, and geographic
market. The principal competitive factors in our industry are quality of
product, pricing, service, delivery capabilities, and availability of product.
We will compete with many local, regional, and national tile distributors and
dealers. In addition, some crystallized glass tile suppliers might sell and
distribute their products directly to our customers, and the volume of such
direct sales could increase in the future. Additionally, distributors of
products similar to those distributed by us, such as distributors of natural
stone tile and porcelain tile, may elect to sell and distribute to our customers
in the future or enter into exclusive supplier arrangements with other
distributors. Most of our competitors have greater financial resources and may
be able to withstand sales or price decreases more effectively than we can.
We also expect to continue to face competition from new market entrants. We may
be unable to continue to compete effectively with these existing or new
competitors, which could have a material adverse effect on our financial
condition and results of operations.
IF WE ARE UNABLE TO ATTRACT ENOUGH CUSTOMERS TO BUY OUR PRODUCT, OUR BUSINESS
We anticipate that our revenue will come from the distribution and sale of
crystallized glass tile; therefore, we need to attract enough customers to buy
our product. We have not identified any customers and we cannot guarantee that
we ever will have any customers. Even if we obtain customers, there is no
guarantee that we will generate a profit. If we are unable to attract enough
customers and generate a profit, our business will fail.
IF WE ARE UNABLE TO BUILD AND MAINTAIN OUR BRAND IMAGE AND CORPORATE REPUTATION,
OUR BUSINESS MAY SUFFER.
We are a new company, having been formed and commenced operations only in 2011.
Our success depends on our ability to build and maintain the brand image for our
crystallized glass tile. We cannot assure you, however, that any additional
expenditure on advertising and marketing will have the desired impact on our
products' brand image and on customer preferences. Actual or perceived product
quality issues or allegations of product flaws, even if false or unfounded,
could tarnish the image of our brand and may cause consumers to choose other
companies for similar products.
IF WE ARE UNABLE TO COMPLETE OUR PLAN TO DISTRIBUTE OUR CRYSTALLIZED GLASS TILE,
WE WILL NOT BE ABLE TO GENERATE REVENUES AND YOU WILL LOSE YOUR INVESTMENT.
We have not completed our plan to distribute crystallized glass tile, and we
have no revenues from the sale or use of our crystallized glass tile. The
success of our proposed business will depend on the completion of our plan and
the acceptance of our crystallized glass tile by the general public. Achieving
such acceptance will require significant marketing investment. Once we are
capable of distributing our crystallized glass tile, it may not be accepted by
consumers at sufficient levels to support our operations and build our business.
If our crystallized glass tile products are not accepted at sufficient levels,
our business will fail.
CHANGES IN ECONOMIC CONDITIONS THAT IMPACT CONSUMER SPENDING COULD HARM OUR
Our financial performance is sensitive to changes in overall economic conditions
that impact consumer spending. We are most impacted by changes in the demand for
new homes and commercial real estate, as well as renovations, and in general
economic conditions that impact the level of home and office improvements.
Future economic conditions affecting consumer income such as employment levels,
business conditions, interest rates, and tax rates could reduce consumer
spending or cause consumers to shift their spending to other tile products. A
general reduction in the level of consumer spending or shifts in consumer
spending to other products could have a material adverse effect on our growth,
sales, and profitability.
BECAUSE WE WILL DISTRIBUTE OUR PRODUCTS TO OVERSEAS, A DISRUPTION IN THE
DELIVERY OF EXPORTED PRODUCTS MAY HAVE A GREATER EFFECT ON US THAN ON OUR
We will export our product from China. Because we export our product and deliver
it directly to our customers, we believe that disruptions in shipping deliveries
may have a greater effect on us than on competitors who manufacture and/or
warehouse products in North America. Deliveries of our products may be disrupted
through factors such as:
* raw material shortages, work stoppages, strikes and political unrest;
* fuel price increases;
* problems with ocean shipping, including work stoppages and shipping;
* container shortages;
* increased inspections of import shipments or other factors causing
delays in shipments; and
* economic crises, international disputes and wars.
Some of our competitors warehouse products they import from overseas, which
allows them to continue delivering their products for the near term, despite
overseas shipping disruptions. If our competitors are able to deliver products
when we cannot, our reputation may be damaged and we may lose customers to our
PRICE COMPETITION COULD NEGATIVELY AFFECT OUR GROSS MARGINS.
Price competition could negatively affect our operating results. To respond to
competitive pricing pressures, we will have to offer our products at lower
prices in order to retain or gain market share and customers. If our competitors
offer discounts on products in the future, we will need to lower prices to match
the competition, which could adversely affect our gross margins and operating
ALL OF OUR PRODUCT PURCHASES WILL BE MADE FROM ONE SUPPLIER. IF THAT SUPPLIER
DECREASED OR TERMINATED ITS RELATIONSHIP WITH US OUR BUSINESS WOULD LIKELY FAIL
IF WE ARE UNABLE TO FIND A SUBSTITUTE FOR THAT COMPANY.
As a result of being totally dependent on a single wholesale supplier located in
China, we may be subject to certain risks, including changes in regulatory
requirements, tariffs and other barriers, increased pressure, timing and
availability of export licenses, foreign currency exchange fluctuations, the
burden of complying with a variety of foreign laws and treaties, and
uncertainties relative to regional, political and economic circumstances.
Initially, we plan to purchase substantially all of our products from Jiangxi
Dafeng Trading Co., Ltd. a private Chinese company. If this company decreased,
modified, or terminated its association with us for any reason, we would suffer
an interruption in our business unless and until we found a substitute for that
supplier. If we were unable to find a substitute for that supplier, our business
would likely fail. We cannot predict what the likelihood would be of finding an
acceptable substitute supplier.
WE DEPEND TO A SIGNIFICANT EXTENT ON CERTAIN KEY PERSONNEL, THE LOSS OF ANY OF
WHOM MAY MATERIALLY AND ADVERSELY AFFECT OUR COMPANY.
Currently, we have only one employee who is also our sole officer and director.
We depend entirely on Mr. John Pulos for all of our operations. The loss of Mr.
Pulos would have a substantial negative effect on our company and would cause
our business to fail. Mr. Pulos will not be compensated for his services unless
and until we generate substantial revenues. There is intense competition for
skilled personnel and there can be no assurance that we will be able to attract
and retain qualified personnel on acceptable terms. The loss of Mr. Pulos's
services could prevent us from completing the development of our business of
distributing crystallized glass tile. In the event of the loss of his services,
no assurance can be given that we will be able to obtain the services of
adequate replacement personnel.
We do not have any employment agreements or maintain key person life insurance
policies on our sole officer and director. We do not anticipate entering into
employment agreements with him or acquiring key man insurance in the foreseeable
BECAUSE OUR SOLE OFFICER AND DIRECTOR HAS OTHER BUSINESS INTERESTS, HE MAY NOT
BE ABLE OR WILLING TO DEVOTE A SUFFICIENT AMOUNT OF TIME TO OUR BUSINESS
OPERATIONS, CAUSING OUR BUSINESS TO FAIL.
Our sole officer and director, Mr. John Pulos, will only be devoting limited
time to our operations. He currently intends to devote approximately 20% of his
business time to our affairs. Because our sole officer and director will only be
devoting limited time to our operations, our operations may be sporadic and
occur at times which are convenient to him. As a result, operations may be
periodically interrupted or suspended, which could result in a lack of revenues
and a possible cessation of operations. It is possible that the demands on Mr.
Pulos from his other obligations could increase with the result that he would no
longer be able to devote sufficient time to the management of our business. In
addition, Mr. Pulos may not possess sufficient time for our business if the
demands of managing our business increase substantially beyond current levels.
BECAUSE OUR SOLE OFFICER AND DIRECTOR OWNS 78.9% OF THE COMPANY'S SHARES, HE
WILL MAKE AND CONTROL CORPORATE DECISIONS THAT MAY BE DISADVANTAGEOUS TO
As of the date of this report, Mr. Pulos, our sole officer and director, owns
78.9% of the company's shares. Accordingly, he has significant influence in
determining the outcome of all corporate transactions or other matters,
including the election of directors, mergers, consolidations, and the sale of
all, or substantially all of our assets, and also the power to prevent or cause
a change in control. The interests of Mr. Pulos may differ from the interests of
the other stockholders and may result in corporate decisions that are
disadvantageous to other shareholders.
OUR SHARES OF COMMON STOCK ARE SUBJECT TO THE "PENNY STOCK" RULES OF THE
SECURITIES AND EXCHANGE COMMISSION AND THE TRADING MARKET IN OUR SECURITIES WILL
BE LIMITED, WHICH WILL MAKE TRANSACTIONS IN OUR STOCK CUMBERSOME AND MAY REDUCE
THE VALUE OF AN INVESTMENT IN OUR STOCK.
The SEC has adopted rules that regulate broker-dealer practices in connection
with transactions in "penny stocks". Penny stocks generally are equity
securities with a price of less than $5.00 (other than securities registered on
certain national securities exchanges or quoted on the NASDAQ system, provided
that current price and volume information with respect to transactions in such
securities is provided by the exchange or system). Penny stock rules require a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt from
those rules, to deliver a standardized risk disclosure document prepared by the
SEC, which specifies information about penny stocks and the nature and
significance of risks of the penny stock market. A broker-dealer must also
provide the customer with bid and offer quotations for the penny stock, the
compensation of the broker-dealer, and sales person in the transaction, and
monthly account statements indicating the market value of each penny stock held
in the customer's account. In addition, the penny stock rules require that,
prior to a transaction in a penny stock not otherwise exempt from those rules,
the broker-dealer must make a special written determination that the penny stock
is a suitable investment for the purchaser and receive the purchaser's written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the trading activity in the secondary market for stock that becomes
subject to those penny stock rules. If a trading market for our common stock
develops, our common stock will probably become subject to the penny stock
rules, and shareholders may have difficulty in selling their shares.
There is no current trading market for our securities and if a trading market
does not develop, purchasers of our securities may have difficulty selling their
Although our shares of common stock are quoted for trading on the OTC Bulletin
Board, there is currently no active public trading market for our securities and
one may not develop, or, if developed, may not be sustained. Accordingly,
shareholders may have difficulty selling their common stock should they desire
to do so.
WE MAY IN THE FUTURE ISSUE ADDITIONAL SHARES OF COMMON STOCK, WHICH WILL DILUTE
SHARE VALUE OF INVESTORS IN THE OFFERING.
Our Articles of Incorporation authorize the issuance of 75,000,000 shares of
common stock, par value $0.001 per share, of which 2,535,000 shares are issued
and outstanding. The future issuance of common stock may result in substantial
dilution in the percentage of our common stock held by our then existing
shareholders. We may value any common stock issued in the future on an arbitrary
basis. The issuance of common stock for future services or acquisitions or other
corporate actions may have the effect of diluting the value of the shares held
by investors in the offering, and might have an adverse effect on any trading
market for our common stock.
BECAUSE WE ARE A "SHELL COMPANY", THE HOLDERS OF OUR RESTRICTED SECURITIES WILL
NOT BE ABLE TO SELL THEIR SECURITIES IN RELIANCE ON RULE 144 UNTIL WE CEASE
BEING A "SHELL COMPANY".
We are a "shell company" as that term is defined by the applicable federal
securities laws. Specifically, because of the nature and amount of our assets
and our very limited operations, pursuant to applicable federal rules, we are
considered a "shell company". Applicable provisions of Rule 144 specify that
during that time that we are a "shell company" and for a period of one year
thereafter, holders of our restricted securities cannot sell those securities in
reliance on Rule 144. As a result, one year after we cease being a shell
company, assuming we are current in our reporting requirements with the
Securities and Exchange Commission, holders of our restricted securities may
then sell those securities in reliance on Rule 144 (provided, however, those
holders satisfy all of the applicable requirements of that rule). For us to
cease being a "shell company", we must have more than nominal operations and
more that nominal assets or assets which do not consist solely of cash or cash
This current report contains forward-looking statements that involve risks and
uncertainties. We use words such as anticipate, believe, plan, expect, future,
intend and similar expressions to identify such forward-looking statements. You
should not place too much reliance on these forward-looking statements. Our
actual results may differ materially from those anticipated in these
forward-looking statements for many reasons, including the risks faced by us
described in the "Risk Factors" section and elsewhere in this current report.
REPORTS TO SECURITY HOLDERS
We are required to file annual, quarterly and current reports, and other
information with the Securities & Exchange Commission. The public may read and
copy any materials that we file with the Commission at the Commission's Public
Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public may
obtain information on the operation of the Public Reference Room by calling the
Commission at 1-800-SEC-0330. The Commission maintains an Internet site that
contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the Commission. The address of
that site is http://www.sec.gov.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
We are a development stage corporation and only recently started our operations.
We have not generated or realized any revenues from our business operations. Our
current cash balance will not be sufficient to fund our operations for the next
12 months. We anticipate relying upon loans from our president, John Pulos, who
has informally agreed to advance funds to allow us to pay for ongoing costs.
However, Mr. Pulos has no formal commitment, arrangement or legal obligation to
advance or loan funds to us. In order to achieve our business plan goals, we
will need to raise additional funds.
Our auditors have issued a going concern opinion. This means that our auditors
believe there is substantial doubt that we can continue as an on-going business
for the next twelve months unless we obtain additional capital to pay our bills.
This is because we have not generated any revenues. We do not expect to have
revenues until we commence selling crystallized glass tile products to
customers, of which there is no assurance. If we are unable to obtain additional
working capital, our business may fail. Accordingly, we must raise cash from
sources other than operations.
PLAN OF OPERATION
We were incorporated in the State of Nevada on April 14, 2011. We have never
declared bankruptcy, have never been in receivership, and have never been
involved in any legal action or proceedings. Since incorporation, we have not
made any significant purchase or sale of assets. We are a development stage
company that has not generated any revenue and just recently started our
Our intended business is to distribute crystallized glass tile in North America.
We have not generated any revenues and our principal business activities to date
consist of creating a business plan and entering into a Marketing and Sales
Distribution Agreement with Jiangxi Dafeng Trading Co., Ltd., a private Chinese
We will not be conducting any product research or development. We do not expect
to purchase or sell plant or significant equipment. Further, we do not expect
significant changes in our number of employees for some time. Our plan of
operations is as follows:
SET UP OFFICE.
TIME FRAME: 1ST - 3RD MONTHS.
Subject to raising additional financing, we plan to set up office and acquire
the necessary equipment to begin operations. We believe that it will cost at
least $2,000 to set up office and obtain the necessary equipment to begin
operations. John Pulos, our sole officer and director will handle our
DEVELOP OUR WEBSITE.
TIME FRAME: 3RD -5TH MONTHS.
When our office is set up, we intend to begin developing our website. Our sole
officer and director, John Pulos will be in charge of registering our web
domain. Once we register our web domain, we plan to hire a web designer to help
us design and develop our website. We do not have any written agreements with
any web designers at current time. We believe that it will cost between $3,000
and $5,000 for our website to be operational. It will take up to 90 days to
develop our website. There will be information about us, about crystallized
glass tile and it advantages, information on how to order our product, and other
information on our website. Updating and improving our website will continue
throughout the lifetime of our operations.
NEGOTIATE AGREEMENTS WITH POTENTIAL WHOLESALE CUSTOMERS.
TIME FRAME: 5TH -12TH MONTHS.
Once our website is operational, we will contact and start negotiation with
potential customers. We will negotiate terms and conditions of collaboration. At
the beginning, we plan to focus primarily on larger chain stores that sell
various types of building materials, specialized home building and restoration
stores, and distributors that are responsible for marketing and selling any kind
of flooring. Then we plan to expand our target market to contactors,
homebuilders, and developers. This activity will be ongoing throughout our
operations. Even though the negotiation with potential wholesale customers will
be ongoing during the life of our operations, we cannot guarantee that we will
be able to execute acceptable agreements, in which case our business may fail
and we will have to cease our operations.
COMMENCE MARKETING CAMPAIGN.
TIME FRAME: 6TH -12TH MONTHS.
At the same time as we start negotiation process with potential customers and
our website is operational, we will begin to market our product. We intend to
use marketing strategies, such as web advertisements, direct mailing, and phone
calls to acquire potential customers. We also plan to attend trade shows in the
construction industry to showcase our product with a view to find new customers.
We believe that we should begin to see results from our marketing campaign
within 120 days from its initiation. We also will use internet promotion tools
on Facebook and Twitter to advertise our products and company. We intend to
spend from $14,000 to $25,000 on marketing efforts during the first year.
Marketing is an ongoing matter that will continue during the life of our
Even if we are able to obtain sufficient number of service agreements at the end
of the twelve month period, there is no guarantee that we will be able to
attract and more importantly retain enough customers to justify our
expenditures. If we are unable to generate a significant amount of revenue and
to successfully protect ourselves against those risks, then it would materially
affect our financial condition and our business could be harmed.
HIRE A SALESPERSON.
TIME FRAME: 8TH -12TH MONTHS.
Once we commence generating significant revenue, we intend to hire one
salesperson with good knowledge and broad connections in the building material
distribution and construction industry to introduce our products. The
salesperson's job would be to find new potential purchasers, and to set up
agreements with wholesale customers to buy our crystallized glass tile. The
negotiation of additional agreements with potential customers will be ongoing
during the life of our operations.
RESULTS OF OPERATIONS
FROM INCEPTION ON APRIL 14, 2011 TO AUGUST 31, 2012
We have not generated any revenues since from inception on April 14, 2011 to
August 31, 2012 and our operating expenses total $13,962 and consisted entirely
of general and administrative expenses.
LIQUIDITY AND CAPITAL RESOURCES
We had cash of $9,305 as of August 31, 2012 and a working capital position of
$9,438. We expect to continue incurring losses in the next twelve months. We
have no agreements for additional financing and cannot provide any assurance
that additional funding will be available to finance our operations on
acceptable terms in order to enable us to complete our plan of operations. There
are no assurances that we will be able to achieve further sales of our common
stock or any other form of additional financing. If we are unable to achieve the
financing necessary to continue our plan of operations, then our business plan
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements including arrangements that would
affect our liquidity, capital resources, market risk support and credit risk
support or other benefits.
We have not attained profitable operations and are dependent upon obtaining
financing to pursue exploration activities. For these reasons our auditors
believe that there is substantial doubt that we will be able to continue as a
DESCRIPTION OF PROPERTY
We do not own any real property interest.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides the names and addresses of each person known to us
to own more than 5% of our outstanding common stock as of the date of this
current report, and by the officers and directors, individually and as a group.
Except as otherwise indicated, all shares are owned directly.
Amount of Percent
Title of Class Name of Beneficial Owner Ownership Class
-------------- ------------------------ --------- -----
Common stock John Pulos 2,000,000 78.9%
2711 N. Sepulveda Blvd., Suite 323
Manhattan Beach, CA 90266
Common stock All officers and directors as a 2,000,000 78.9%
group that consists of one person
The percent of class is based on 4,700,000 shares of common stock issued and
outstanding as of the date of this current report.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Our executive officers and directors and their ages as of the date of this
current report is as follows:
Name of Director Age
John Pulos 46
Name of Officer Age Office
--------------- --- ------
John Pulos 46 President, Secretary, Treasurer and
Chief Executive Officer
Set forth below is a brief description of the background and business experience
of our executive officer and director for the past five years.
MR. JOHN PULOS has served as a director of Liberty Silver Corp. since February
2007. From May 2010 to January 2012, he also acted as the Chief Financial
Officer and Vice-President of Liberty Silver Corp. As well, for the past 20
years, Mr. Pulos has been involved in the real estate market with a focus on
development, investment, and obtaining land entitlements throughout the United
States and Canada, as well as investing in many private and public companies.
Mr. Pulos obtained his Bachelor of Arts in Political Science from the University
of Washington and a Master of Science in Real Estate Finance from New York
Mr. Pulos intends to devote about 20% of his business time per week to our
TERM OF OFFICE
Our director is appointed for a one-year term to hold office until the next
annual general meeting of our shareholders or until removed from office in
accordance with our bylaws. Our officers are appointed by our board of directors
and hold office until removed by the board.
We have no significant employees other than the officers and directors described
STOCK OPTION GRANTS
We have not granted any stock options to the executive officers since our
We do not have any employment or consulting agreement with our directors or
officers. We do not pay Mr. John Pulos any amount for acting as our director.
SUMMARY COMPENSATION TABLE
The table below summarizes all compensation awarded to, earned by, or paid to
our executive officers by any person for all services rendered in all capacities
to us for the fiscal period from our inception to January 31, 2011:
Other Stock SARS LTP
Name Title Year Salary Bonus Comp. Awarded (#) payouts
---- ----- ---- ------ ----- ----- ------- --- -------
Yulia Former 2013 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Goldfinger President 2012 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
CEO, 2011 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None of the following parties has, since our date of incorporation, had any
material interest, direct or indirect, in any transaction with us or in any
presently proposed transaction that has or will materially affect us:
* Any of our directors or officers;
* Any person proposed as a nominee for election as a director;
* Any person who beneficially owns, directly or indirectly, shares
carrying more than 10% of the voting rights attached to our
outstanding shares of common stock;
* Our promoter, John Pulos, or our former promoter, Yulia Goldfinger;
* Any member of the immediate family of any of the foregoing persons.
We are not currently a party to any legal proceedings. Our address for service
of process in Nevada is 2360 Corporate Circle. Suite 400, Henderson, Nevada
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS.
Our shares of common stock are quoted for trading on the OTC Bulletin Board
under the symbol "AVLP". No trades of our shares of common stock have occurred
through the facilities of the OTC Bulletin Board.
There are no restrictions in our articles of incorporation or bylaws that
prevent us from declaring dividends. The Nevada Revised Statutes, however, do
prohibit us from declaring dividends where, after giving effect to the
distribution of the dividend:
1. we would not be able to pay our debts as they become due in the usual
course of business; or
2. our total assets would be less than the sum of our total liabilities
plus the amount that would be needed to satisfy the rights of
shareholders who have preferential rights superior to those receiving
We have not declared any dividends, and we do not plan to declare any dividends
in the foreseeable future.
RECENT SALES OF UNREGISTERED SECURITIES
We have not sold any securities in the past three years that were not registered
under the Securities Act other than the following:
Name and Address Date Shares Consideration
---------------- ---- ------ -------------
Yulia Goldfinger May 25, 2011 2,000,000 $ 2,000.00
We issued the foregoing restricted shares of common stock to our former officer
and director pursuant to Section 4(2) of the Securities Act of 1933. She is a
sophisticated investor, was our sole officer and director at the time, and had
possession of all material information relating to us. Further, no commissions
were paid to anyone in connection with the sale of the shares and general
solicitation was not made to anyone.
DESCRIPTION OF SECURITIES
Our authorized capital stock consists of 75,000,000 shares of common stock at a
par value of $0.001 per share.
Our authorized capital stock consists of 75,000,000 shares of common stock, par
value $0.001 per share. The holders of our common stock:
* have equal ratable rights to dividends from funds legally available if
and when declared by our board of directors;
* are entitled to share ratably in all of our assets available for
distribution to holders of common stock upon liquidation, dissolution
or winding up of our affairs; and
* do not have preemptive, subscription or conversion rights and there
are no redemption or sinking fund provisions or rights.
A holder of outstanding shares, entitled to vote at a meeting, may vote at such
meeting in person or by proxy. Every shareholder is entitled to one vote for
each share standing his or her name on the record of shareholders. All corporate
action shall be determined by a majority of the votes cast at a meeting of
shareholders by the holders of shares entitled to vote thereon.
As of the date of this report, there were 2,535,000 shares of our common stock
issued and outstanding that are held by 25 stockholders of record.
Holders of common stock are entitled to share in all dividends that the board of
directors, in its discretion, declares from legally available funds. In the
event of a liquidation, dissolution or winding up, each outstanding share
entitles its holder to participate pro rata in all assets that remain after
payment of liabilities and after providing for each class of stock, if any,
having preference over the common stock.
Holders of our common stock have no pre-emptive rights, no conversion rights and
there are no redemption provisions applicable to our common stock.
We do not have an authorized class of preferred stock.
We have never declared or paid any cash dividends on our common stock. We
currently intend to retain future earnings, if any, to finance the expansion of
our business. As a result, we do not anticipate paying any cash dividends in the
SHARE PURCHASE WARRANTS
We have not issued and do not have outstanding any warrants to purchase shares
of our common stock.
We have not issued and do not have outstanding any options to purchase shares of
our common stock.
We have not issued and do not have outstanding any securities convertible into
shares of our common stock or any rights convertible or exchangeable into shares
of our common stock.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our officers and directors are indemnified as provided by the Nevada Revised
Statutes (the "NRS") and our bylaws.
Under the NRS, director immunity from liability to a company or its shareholders
for monetary liabilities applies automatically unless it is specifically limited
by a company's articles of incorporation that is not the case with our articles
of incorporation. Excepted from that immunity are:
(1) a willful failure to deal fairly with the company or its shareholders
in connection with a matter in which the director has a material
conflict of interest;
(2) a violation of criminal law (unless the director had reasonable cause
to believe that his or her conduct was lawful or no reasonable cause
to believe that his or her conduct was unlawful);
(3) a transaction from which the director derived an improper personal
(4) willful misconduct.
Our bylaws provide that we will indemnify our directors and officers to the
fullest extent not prohibited by Nevada law; provided, however, that we may
modify the extent of such indemnification by individual contracts with our
directors and officers; and, provided, further, that we shall not be required to
indemnify any director or officer in connection with any proceeding (or part
thereof) initiated by such person unless:
(1) such indemnification is expressly required to be made by law;
(2) the proceeding was authorized by our Board of Directors;
(3) such indemnification is provided by us, in our sole discretion,
pursuant to the powers vested us under Nevada law; or
(4) such indemnification is required to be made pursuant to the bylaws.
Our bylaws provide that we will advance all expenses incurred to any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that he is or was our director or
officer, or is or was serving at our request as a director or executive officer
of another company, partnership, joint venture, trust or other enterprise, prior
to the final disposition of the proceeding, promptly following request. This
advanced of expenses is to be made upon receipt of an undertaking by or on
behalf of such person to repay said amounts should it be ultimately determined
that the person was not entitled to be indemnified under our bylaws or
Our bylaws also provide that no advance shall be made by us to any officer in
any action, suit or proceeding, whether civil, criminal, administrative or
investigative, if a determination is reasonably and promptly made: (a) by the
board of directors by a majority vote of a quorum consisting of directors who
were not parties to the proceeding; or (b) if such quorum is not obtainable, or,
even if obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, that the facts known to the
decision- making party at the time such determination is made demonstrate
clearly and convincingly that such person acted in bad faith or in a manner that
such person did not believe to be in or not opposed to our best interests.
Our financial statements for the fiscal year ended November 30, 2011 and our
unaudited interim financial statements for the period ended August 31, 2012 are
incorporated by reference into this current report.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
We have had no changes in or disagreements with our accountants.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AVALANCHE INTERNATIONAL, CORP.
Date: February 4, 2013 By: /s/ John Pulos
President, CEO, Secretary