UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-1/A
AMENDMENT No. 6
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Hidden Ladder, Inc.
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(Exact name of registrant as specified in its charter)
Florida
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(State or other jurisdiction of incorporation or organization)
5020
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(Primary Standard Industrial Classification Code Number)
27-1933597
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(I.R.S. Employer Identification Number)
David Johnson
2803 Isle Street, Rocklin, CA 95765
530-409-0453
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(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
As soon as practicable after the effective date of this registration statement
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(Approximate date of commencement of proposed sale to the public)
This is the initial public offering of the Company's common stock. There is no
minimum amount of shares that must be sold in the offering, the net proceeds
from this offering may be $(5,000) to $25,000 after expenses.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box: [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting Company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting Company" in Rule 12b-2 of the Exchange Act. (Check one)
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting Company [X]
(Do not check if a smaller reporting Company)
CALCULATION OF REGISTRATION FEE
Title of Each Proposed Proposed
Class of Amount Maximum Maximum Amount of
Securities to to be Offering Price Aggregate Registration
be Registered Registered Per Unit(1) Offering Price Fee(2)
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Common Stock
by Company 3,000,000 $0.01 $30,000 $2.14
(1) The offering price has been arbitrarily determined by the Company and bears
no relationship to assets, earnings, or any other valuation criteria. No
assurance can be given that the shares offered hereby will have a market value
or that they may be sold at this, or at any price.
(2) Estimated solely for the purpose of calculating the registration fee based
on Rule 457(o).
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
There is no minimum amount of shares that must be sold in the offering. If we do
not sell any shares, the Company will lose $5,000 in expenses. If the Company
sells all the shares, the Company will net $25,000 after expenses. If the
Company sells only 50% of the shares (1,500,000 shares), the net proceeds will
be $10,000.
Hidden Ladder, Inc.
3,000,000 SHARES OF COMMON STOCK
This registration statement constitutes the initial public offering of Hidden
Ladder's common stock. Hidden Ladder is registering 3,000,000 shares of common
stock at an offering price of $0.01 per share for a total amount of $30,000. The
Company will sell the securities in $500 increments. There are no underwritings
or broker dealers involved with the offering.
The Company is not a blank check company and we have no plans or intentions to
be acquired or merge with an operating company. We also have no plans to change
our management nor enter into change of control or similar transaction. In
addition, Mr. David Johnson, our sole shareholder, has no plans to enter into a
change of control or similar transaction or to change management.
The Company's sole officer and director, Mr. David Johnson, will be responsible
to market and sell these securities. The Company will offer the securities on a
best efforts basis and there will be no minimum amount required to close the
transaction. If all the shares are not sold, there is the possibility that the
amount raised may be minimal and might not even cover the costs of the offering
which the Company estimates at $5,000. The offering price of $0.01 per share may
not reflect the market price of the shares after the offering. The proceeds from
the sale of the securities will be placed directly into the Company's account
and there will not be an escrow account. All proceeds from the sale of the
securities are non-refundable, except as may be required by applicable laws. The
Company will pay all expenses incurred in this offering. There has been no
public trading market for the common stock of Hidden Ladder.
The offering will be closed at the earlier of 90 days after the registration
statement becomes effective or all of the shares are sold in the offering.
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE SHARES ONLY
IF YOU CAN AFFORD A COMPLETE LOSS. SEE "RISK FACTORS" BEGINNING ON PAGE 5.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of the prospectus. Any representation to the contrary is a
criminal offense.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
The date of this prospectus is August __, 2010
TABLE OF CONTENTS
Page No.
Part I
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SUMMARY OF OUR OFFERING................................................. 3
SUMMARY OF FINANCIAL DATA............................................... 5
DESCRIPTION OF PROPERTY................................................. 5
RISK FACTORS............................................................ 6
USE OF PROCEEDS......................................................... 13
DETERMINATION OF OFFERING PRICE......................................... 14
DILUTION OF THE PRICE YOU PAY FOR YOUR SHARES........................... 14
THE OFFERING BY THE COMPANY............................................. 15
PLAN OF DISTRIBUTION.................................................... 16
LEGAL PROCEEDINGS....................................................... 17
BUSINESS................................................................ 17
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION............... 18
CODE OF BUSINESS CONDUCT AND ETHICS..................................... 23
BACKGROUND OF OFFICER AND DIRECTOR...................................... 24
CERTAIN TRANSACTIONS AND RELATED TRANSACTIONS........................... 24
EXECUTIVE COMPENSATION.................................................. 24
PRINCIPAL STOCKHOLDERS.................................................. 25
DESCRIPTION OF SECURITIES............................................... 25
REPORTING............................................................... 26
STOCK TRANSFER AGENT.................................................... 27
STOCK OPTION PLAN....................................................... 27
LITIGATION.............................................................. 27
LEGAL MATTERS........................................................... 27
EXPERTS................................................................. 27
FINANCIAL STATEMENTS.................................................... F-1
Part II
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ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION ................... II-1
ITEM 14. INDEMNIFICATION OF DIRECTOR AND OFFICER ....................... II-1
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES ....................... II-2
ITEM 16. EXHIBITS ...................................................... II-2
ITEM 17. UNDERTAKINGS .................................................. II-3
SIGNATURES ............................................................. II-5
2
SUMMARY OF OUR OFFERING
Hidden Ladder, Inc. has 9,000,000 shares of common stock issued and outstanding
and is registering an additional 3,000,000 shares of common stock for offering
to the public. The company plans to sell all 3,000,000 shares of common stock
after this registration becomes effective. The price at which the company offers
these shares is fixed at $0.01 per share for the duration of the offering.
Hidden Ladder will receive all proceeds from the sale of the common stock.
3,000,000 shares of common stock are offered by the company.
Offering price per share by the The price, if and when the company
company sells the shares of common stock, is set
at $0.01.
Number of shares outstanding before 9,000,000 common shares are currently
the offering of common shares issued and outstanding.
Number of shares outstanding after 12,000,000 common shares will be issued
the offering of common shares and outstanding after this offering is
completed if all shares are sold. If the
offering is not fully subscribed, less
than 12,000,000 will be outstanding
after the offering. For example, if the
Company sells 50% of the total offering
of 3,000,000 shares of common stock, the
Company will receive $10,000 in net
proceeds under these circumstances.
The minimum number of shares to be
sold in this offering None.
Market for the common shares There is no public market for the common
shares. The shares are being offered at
$0.01 per share. Hidden Ladder may not
be able to meet the requirement for a
public listing or quotation of its
common stock. Further, even if Hidden
Ladder common stock is quoted or granted
listing, a market for the common shares
may not develop. If a market develops,
the price of the shares in the market
may not be greater than or equal to the
price in this offering.
Use of proceeds The Company intends to use the proceeds
of this offering to further the
development of the business and
marketing plan, and for other general
corporate and working capital purposes.
The expenses of this offering, including
the preparation of this prospectus and
the filing of this registration
statement, estimated at $5,000, are
being paid for by Hidden Ladder. The net
proceeds will be the gross proceeds from
the offering less the expenses of
$5,000. Therefore, if the all shares are
sold in the offering, the net proceeds
will be $25,000 ($30,000 Gross proceeds
3
- $5,000 expenses). If only 50% of the
shares are sold, the net proceeds will
be $10,000 ($15,000 gross - $5,000 of
expenses). The proceeds will be used
first for essential business operations
(ex. SEC filings, audit, etc) and the
remaining portion will be used to
further the development of the business
and marketing plan. None of the proceeds
will be used for product development.
Termination of the offering The offering will conclude at the
earlier of when all 3,000,000 shares of
common stock have been sold, or 90 days
after this registration statement is
declared effective by the Securities and
Exchange Commission.
Terms of the offering The Company's President, Chief Executive
Officer, Sole Member of the Board of
Directors Chief Financial Officer
Principal Accounting Officer Secretary
will sell the common stock upon
effectiveness of this registration
statement.
Risk Factors You should read the "Risk Factors"
section beginning on page 5 and consider
these factors carefully before deciding
to invest in shares of our common stock.
You should rely only upon the information contained in this prospectus. Hidden
Ladder has not authorized anyone to provide you with information different from
that which is contained in this prospectus. Hidden Ladder is offering to sell
shares of common stock and seeking offers to buy shares of common stock only in
jurisdictions where offers and sales are 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 of any sale of the common stock.
This summary provides an overview of selected information contained in this
prospectus. It does not contain all the information that you should consider
before making a decision to purchase the shares offered by Hidden Ladder. You
should very carefully and thoroughly read the more detailed information in this
prospectus and review our financial statements.
SUMMARY INFORMATION ABOUT HIDDEN LADDER
Hidden Ladder plans to create and market a set of safety product for homeowners.
Hidden Ladder's first product will be a hidden safety escape ladder for
homeowners. The intent is to provide the homeowner comfort knowing that if there
is a fire in their home they will be able to escape safely from the 2nd story.
It will neatly fold up and hang under the window and it will not be an eyesore
in the home, but at the same time it will be easily accessible.
Hidden Ladder's plan is to sell wholesale only, targeting select retailers. The
Company has identified four segments in the retail industry: Chain-retailers,
single retailers, homebuilders, and mail order & Internet catalogs. The Company
believes that based on the ability of home builders and chain-retailers to buy
in bulk, these segments have the greatest opportunity.
4
As of the date of this prospectus, we have not generated any revenue from our
business operations.
The Company's business and marketing plans have not been completed and are
subject to change.
The Company's auditors have raise substantial doubt as to the Company's ability
to continue as a going concern.
Our business and registered office is located at the residence of Mr. David
Johnson located at 2803 Isle Street, Rocklin, CA95765. Our contact number is
530-409-0453.
As of May 31, 2010, Hidden Ladder had $4,863 of cash on hand in the corporate
bank account. The Company currently has incurred liabilities of $400. The
Company anticipates incurring costs associated with this offering totaling
approximately $5,000.
The following financial information summarizes the more complete historical
financial information found in the audited financial statements of the Company
filed with this prospectus.
SUMMARY FINANCIAL DATA
The following summary financial data should be read together with our financial
statements and the related notes and "Management's Discussion and Analysis or
Plan of Operation" appearing elsewhere in this prospectus. The summary financial
data is not intended to replace our financial statements and the related notes.
Our historical results are not necessarily indication of the results to be
expected for any future period.
AS OF MAY 31, 2010
BALANCE SHEET (Unaudited)
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Total Assets ............ $ 4,863
Total Liabilities ....... $ 400
Shareholder's Equity .... $ 4,463
THREE MONTHS ENDED
YEAR ENDED MAY 31, 2010
OPERATING DATA FEBRUARY 28, 2010 (Unaudited)
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Revenue ................. $ 0 $ 0
Net Loss ................ $ 3,600 $ 937
Net Loss Per Share * .... $ 0 $ 0
* Diluted loss per share is identical to basic loss per share as the Company has
no potentially dilutive securities outstanding.
As indicated in the financial statements accompanying this prospectus, Hidden
Ladder has had no revenue to date and has incurred only losses since inception.
The Company has had no operations and has been issued a "going concern" opinion
from their auditors, based upon the Company's reliance upon the sale of our
common stock as the sole source of funds for our future operations.
DESCRIPTION OF PROPERTY
The company does not own any real estate or other properties. The company's
office is located at 2803 Isle Street, Rocklin, CA 95765. The business office is
located at the residence of David Johnson, the CEO, of the company at no charge.
5
RISK FACTORS
Please consider the following risk factors and other information in this
prospectus relating to our business and prospects before deciding to invest in
our common stock.
This offering and any investment in our common stock involves a high degree of
risk. You should carefully consider the risks described below and all of the
information contained in this prospectus before deciding whether to purchase our
common stock. If any of the following risks actually occur, our business,
financial condition and results of operations could be harmed.
The Company considers the following to be the material risks for an investor
regarding this offering. Hidden Ladder should be viewed as a high-risk
investment and speculative in nature. An investment in our common stock may
result in a complete loss of your entire investment. Please consider the
following risk factors before deciding to invest in our common stock.
RISKS RELATED TO OUR FINANCIAL CONDITION AND CAPITAL REQUIREMENTS
- -----------------------------------------------------------------
AUDITOR'S GOING CONCERN
- -----------------------
THERE IS SUBSTANTIAL UNCERTAINTY ABOUT THE ABILITY OF HIDDEN LADDER, INC. TO
CONTINUE ITS OPERATIONS AS A GOING CONCERN
In their audit report for the period ending February 28, 2010 and dated March
24, 2010; our auditors have expressed an opinion that substantial doubt exists
as to whether we can continue as an ongoing business. Because our sole officer
may be unwilling or unable to loan or advance any additional capital to Hidden
Ladder, Inc. we believe that if we do not raise additional capital within 12
months of the effective date of this registration statement, we may be required
to suspend or cease the development of our business and marketing plans. Due to
the fact that there is no minimum investment and no refunds on sold shares, you
may be investing in a Company that will not have the funds necessary to develop
its business strategies. As such we may have to cease operations and you could
lose your entire investment. See the February 28, 2010 Audited Financial
Statements - Auditors Report". Because the Company has been issued an opinion by
its auditors that substantial doubt exists as to whether it can continue as a
going concern it may be more difficult to attract investors.
SINCE HIDDEN LADDER ANTICIPATES OPERATING EXPENSES WILL INCREASE PRIOR TO
GENERATING A PRODUCT FOR SALE, IT MAY NEVER ACHIEVE PROFITABILITY AND IF THE
COMPANY CAN NOT ACHIEVE PROFITABILITY OR RAISE ADDITIONAL CAPITAL, IT MAY FAIL
RESULTING IN A COMPLETE LOSS OF YOUR INVESTMENT
The Company must complete the business and marketing plans before any
development can start on the design of the product suite. Over the next twelve
months, the Company anticipates increasing its operating expenses and will need
$150,000 to complete the business and marketing plan and to fund basic
operations of the Company.
There is no history upon which to base any assumption as to the likelihood that
the Company will be successful in creating a product. We cannot provide
investors with any assurance that if we create a product, that we will be
successful in attracting customers and have the ability to generate any revenue.
If we are unable to address these risks, there is a high probability that our
business can fail, which will result in the loss of your entire investment.
6
OUR BUSINESS WILL FAIL IF WE DO NOT OBTAIN ADEQUATE FINANCING, RESULTING IN THE
COMPLETE LOSS OF YOUR INVESTMENT
We will require additional financing to sustain our business operations. Over
the next 12 months, we anticipate needing at least $150,000 to complete the
marketing and business plan and other operating expenses. Currently, we do not
have any arrangements for financing and can provide no assurances to investors
that we will be able to obtain any when required. If we don't raise additional
capital, our business will fail.
RISKS RELATED TO INVESTING IN OUR COMPANY
- -----------------------------------------
OUR LACK OF AN OPERATING HISTORY GIVES NO ASSURANCE THAT OUR FUTURE OPERATIONS
WILL RESULT IN ANY REVENUES, WHICH COULD RESULT IN THE SUSPENSION OR TERMINATION
OF OUR OPERATIONS AND INVESTORS MAY LOOSE THEIR ENTIRE INVESTMENT
We were incorporated on February 23, 2010 and we have not created any product
which is required to generate revenue. We are an early entry stage company in a
very competitive market. We have no operating history upon which an evaluation
of our future success or failure can be made.
Based upon current plans, we expect to incur operating losses in future periods
because we will be incurring expenses and not generating revenues because we
don't have a product. If and when we have a product, we cannot guarantee that we
will be successful in generating revenues in the future. Failure to generate
revenues will cause us to go out of business and you will lose your entire
investment.
OUR OPERATING RESULTS MAY PROVE UNPREDICTABLE WHICH MAY IMPACT THE COMPANY AND
THE VALUE OF THE INVESTMENT
Our operating results are likely to fluctuate significantly in the future due to
a variety of factors, many of which we have no control over. Currently, we don't
have a product or prototype. Factors that may cause our operating results to
fluctuate significantly include: our inability to generate enough working
capital from future equity sales, our ability to hire key personnel to help
create a product, our inability to develop a product, and Mr. Johnson's time
allocation to drive the business; and after we create a commercial product, the
factors include: the level of commercial acceptance by the home improvement and
home building market of our products; competitive landscape with other product
suppliers, pricing, fluctuations in the demand for our product, and capital
expenditures relating to expansion of our future business, operations and
infrastructure and general economic conditions. If realized, any of these risks
could have a materially adverse effect on our business, financial condition and
operating results.
THE COMPANY'S SOLE OFFICER AND DIRECTOR MAY NOT BE IN A POSITION TO DEVOTE A
MAJORITY OF HIS TIME TO THE COMPANY, WHICH MAY RESULT IN PERIODIC INTERRUPTIONS
AND EVEN BUSINESS FAILURE.
Mr. Johnson, our sole officer and director, has other business interests and
currently devotes approximately 25 to 30 hours per week to our operations. He
provides limited consulting advise and services to L&H Air Co, a construction
company. If Mr. Johnson is not able to devote sufficient time to run the
Company, it may result in periodic interruptions in developing our business.
Such delays could have a significant negative effect on the success of the
business.
7
THE CEO MAY LEAVE THE COMPANY WHICH COULD ADVERSELY AFFECT THE ABILITY OF THE
COMPANY TO CONTINUE OPERATIONS. IF THE COMPANY CEASES OPERATIONS, YOU WILL LOOSE
YOUR INVESTMENT
Because the Company is entirely dependent on the efforts of its CEO, sole
officer and director, his departure or the loss of other key personnel in the
future, could have a materially adverse effect on the business. His expertise in
the building industry as well as his technical expertise are critical to the
success of the business. The loss of this resource would have a significant
impact on our business.
The Company does not maintain key person life insurance on its sole officer and
director. The loss of this key personnel will materially impact the business and
we might have to cease operations if a replacement cannot be found on a timely
basis.
IF THE COMPANY CEASES OPERATIONS, IT IS HIGHLY LIKELY THAT THERE WILL NOT BE
SUFFICIENT ASSETS TO SELL AND RETURN THAT CAPITAL TO INVESTORS. UNDER THESE
CIRCUMSTANCES, YOU WILL LOSE YOUR INVESTMENT.
In the event of the dissolution of the Company, the proceeds realized from the
liquidation of its assets, if any, will be used primarily to pay the claims of
the Company's creditors, if any, before there can be any distribution to the
shareholders. In that case, the ability of purchasers of the offered shares to
recover all or any portion of the purchase price for the offered shares will
depend on the amount of funds realized, if any, after the settlement of claims.
RISKS RELATED TO THE COMPANY'S MARKET AND STRATEGY
- --------------------------------------------------
IF, AFTER DEMONSTRATING PROOF-OF-CONCEPT, WE ARE UNABLE TO ESTABLISH
RELATIONSHIPS WITH DEVELOPMENT PARTNERS AND/OR CUSTOMERS, THE BUSINESS WILL
FAIL.
Because there may be a substantial delay between the completion of this offering
and the execution of the business plan, our expenses may be increased and it may
take us longer to generate revenues. We have no way to predict when we will
begin delivering our products. In addition, it takes time, money, and resources
to build relationships with customers and partners. If these efforts are
unsuccessful or take longer than anticipated, the Company may run out of capital
and the business will fail.
WE MAY BE UNABLE TO GAIN ANY SIGNIFICANT MARKET ACCEPTANCE FOR OUR PRODUCTS OR
ESTABLISH A SIGNIFICANT MARKET PRESENCE WITH THE HOME BUILDER AND IMPROVEMENT
RETAILERS AND CONSUMERS. IF WE CAN NOT GAIN MARKET ACCEPTANCE, WE WILL NOT BE
ABLE TO GENERATE REVENUE AND OUR BUSINESS WILL FAIL.
The Company's growth strategy is substantially dependent upon its ability to
market its future products successfully to large retailer and large home
builders. However, it may be very difficult to achieve significant acceptance
due to cost, product appeal, functionality, and other factors outside of the
Company's control. Such acceptance, if achieved, may not be sustained for any
significant period of time nor build to an acceptable volume that is sufficient
to maintain our business. In addition, there is no guarantee that any acceptance
by customers will remain. Failure of the Company's products to achieve or
sustain market acceptance could have a materially adverse effect on our
business, financial conditions and the results of our operations.
8
OBTAINING CONTRACTS TO SELL PRODUCTS WITH HOME IMPROVEMENT AND BUILDING STORES
IS VERY DIFFICULT AND TIME CONSUMING. WITHOUT THESE TYPES OF CONTRACTS, THE
COMPANY WILL NOT BE ABLE TO SELL ITS PRODUCTS AND IT'S BUSINESS WILL FAIL.
In the home improvement and building suppliers, shelf space is very expensive
and difficult to obtain. Since we are small early stage company, it will be very
time consuming and expensive to obtain these types of contracts which are
required to sell our products. If we are not able to secure these contracts, we
will not be able to sell our product and our business will fail.
THE HOME IMPROVEMENT AND BUILDING RETAILERS GENERALLY SELL PRODUCTS IN HIGH
VOLUME BUT HAVE VERY LOW MARGINS. WE MUST BE ABLE TO OPERATE OUR BUSINESS TO
SUPPLY THESE DISTRIBUTION PARTNERS WITH PRODUCT VOLUMES THAT FIT WITH THEIR
BUSINESS. IF WE ARE NOT ABLE TO SERVICE THESE DISTRIBUTION PARTNERS AND MATCH
THEIR VOLUME REQUIREMENTS, WE WILL LOSE THEM AS DISTRIBUTION PARTNERS, OUR
REVENUES WILL FALL, AND WE MIGHT HAVE TO CEASE OPERATION WHICH COULD RESULT IN A
LOSS OF YOUR INVESTMENT.
The Company expects to sell products through a small number of home improvement
and building retailers. These retailers will require that we accommodate certain
volume requirements and if we cannot accommodate those volume requirements, they
might choose to discontinue selling our products. If we lose a distribution
partner, our revenues will be materially impacted and we might have to cease
operations. If these circumstances occur, investors will lose their investment.
THE COMPANY ANTICIPATES THAT ESTABLISHING AND MAINTAINING A CUSTOMER BASE IN THE
HOME BUILDING AND IMPROVEMENT MARKETS WILL BE DIFFICULT TO ACHIEVE ESPECIALLY
SINCE CONSUMERS ARE ALWAYS COST CONSCIENCE. IF WE CAN NOT ATTRACT A CUSTOMER
BASE, WE FACE A HIGH RISK OF BUSINESS FAILURE WHICH WOULD RESULT IN THE LOSS OF
YOUR INVESTMENT.
The Company expects that attracting, building and managing a customer base is
very difficult to accomplish in the home building market space. Customers are
very cost sensitive and will switch to any other product based on cost. We plan
to provide a product that is functional and economical. Accordingly, when we are
ready, if we cannot build a customer base, our future sales and operating
results will be negatively impacted and our business could fail.
RISKS RELATED TO INVESTING IN OUR BUSINESS
- ------------------------------------------
IF THE COMPANY ENCOUNTERS ADDITIONAL EXPENSES OR CHARGES AND CAN NOT RESOLVE
THEM AT ACCEPTABLE COSTS, THE COMPANY WILL RUN OUT OF CAPITAL AND MAY CAUSE US
TO CEASE OPERATIONS.
Because we are a small business, with limited assets, we are not in a position
to assume unanticipated costs and expenses. If we encounter these type of
circumstances and do not have the financial resources to fix them, we may have
to suspend operations or cease operations entirely which could result in a total
loss of your investment.
THE COMPANY MAY RETAIN INDEPENDENT RESOURCES OR CONSULTANTS TO HELP GROW THE
BUSINESS. IF THESE RESOURCES DO NOT PERFORM, THE COMPANY MAY HAVE TO CEASE
OPERATIONS AND YOU MAY LOOSE YOUR INVESTMENT
The company's management may retain independent contractors to provide services
to the company. Those independent individuals and organizations have no
fiduciary duty to the shareholders of the company and may not perform as
expected.
9
HOME BUILDING MARKET IS A MATURE MARKET WITH AGGRESSIVE COMPETITION ON PRICING,
SERVICES AND SUPPORT. FAILURE TO PROVIDE ATTRACTIVE MARGINS AND ADEQUATE
SERVICES AND SUPPORT TO HOME BUILDER RETAILERS WILL RESULT IN DECREASED
REVENUES. WITHOUT REVENUES OUR BUSINESS WILL FAIL.
The Company believes the home improvement and home building market is very
competitive and aggressive on pricing, service, and support. Competitors may
enter this sector with superior products, services, financial resources,
conditions and/or benefits. This would infringe on our ability to attract
customers, lengthen our sales cycle, increase marketing costs, which in turn
will have an adverse affect upon our business and the results of our operations.
COMPETITION MAY DECREASE OUR FUTURE ABILITY TO GAIN CUSTOMERS AND MARKET SHARE.
Several of our competitors have substantially more capital, longer operating
histories, greater brand recognition, larger customer bases than we do. The
competitors include First Alert EL52-2 Two-Story, FesQLadder FL 25SL Three
Story, Kidde's Fire Safety Ladder (KL-2S Two-Story), Red Rung and others. All of
these companies have safety ladders that are carried in home building and
improvement retailers like Home Depot, Lowes, ACE Hardware. These companies
market their products at industry trade shows, conferences, and expos. The
Company believe that these brands are well recognize among consumers. These
competitors may also adopt more aggressive pricing policies and establish more
comprehensive marketing and advertising campaigns than we can. Our competitors
may develop product offerings that we do not offer or that are more
sophisticated or more cost effective. For these and other reasons, our
competitors' products may achieve greater acceptance in the marketplace,
limiting our ability to attract customers. Our failure to adequately address
these factors could harm our business and operating results.
RISKS RELATED TO THIS OFFERING
- ------------------------------
BECAUSE THERE IS NO PUBLIC TRADING MARKET FOR OUR COMMON STOCK, YOU MAY NOT BE
ABLE TO RESELL YOUR STOCK AND NOT BE ABLE TO TURN YOUR INVESTMENT INTO CASH
There is currently no public trading market for Hidden Ladder's common stock.
Therefore, there is no central place, such as a stock exchange or electronic
trading system, to resell your shares. If you do want to resell your shares, you
will have to locate a buyer and negotiate your own sale.
INVESTING IN OUR COMPANY WILL RESULT IN AN IMMEDIATE LOSS BECAUSE BUYERS WILL
PAY MORE FOR OUR COMMON STOCK THAN THE PRO RATA PORTION OF THE ASSETS ARE WORTH
The Company has only been recently formed and has only a limited operating
history and no earnings, therefore, the price of the offered shares is not based
on any data. The offering price and other terms and conditions regarding the
Company's shares have been arbitrarily determined and do not bear any
relationship to assets, earnings, book value or any other objective criteria of
value. No investment banker, appraiser or other independent third party has been
consulted concerning the offering price for the shares or the fairness of the
offering price used for the shares.
The offering price of $0.01 per common share as determined herein is
substantially higher than the net tangible book value per share of the Company's
common stock. Hidden Ladder's assets do not substantiate a share price of $0.01.
This premium in share price applies to the terms of this offering and does not
attempt to reflect any forward looking share price subsequent to the Company
obtaining a listing on any exchange, or becoming quoted on the OTC Bulletin
Board.
10
THERE IS NO MINIMUM AMOUNT REQUIRED TO BE RAISED IN THIS OFFERING, AND IF WE
CANNOT GENERATE SUFFICIENT FUNDS FROM THIS OFFERING, THE BUSINESS WILL FAIL.
There is not a minimum amount of shares that need to be sold in this Offering
for the Company to access the funds. Therefore, the proceeds of this Offering
will be immediately available for use by us and we don't have to wait until a
minimum number of Shares have been sold to keep the proceeds from any sales. We
can't assure you that subscriptions for the entire Offering will be obtained. We
have the right to terminate the offering of the Shares at any time, regardless
of the number of Shares we have sold since there is no minimum subscription
requirement. Our ability to meet our financial obligations, cash needs, and to
achieve our objectives, could be adversely affected if the entire offering of
Shares is not fully subscribed for.
BECAUSE THE COMPANY HAS 300,000,000 AUTHORIZED SHARES, MANAGEMENT COULD ISSUE
ADDITIONAL SHARES, DILUTING THE CURRENT SHAREHOLDERS' EQUITY
The Company has 300,000,000 authorized shares, of which only 9,000,000 are
currently issued and outstanding and an up to a maximum amount of 12,000,000
will be issued and outstanding after this offering terminates if the full
offering is subscribed. The Company's management could, without the consent of
the existing shareholders, issue substantially more shares, causing a large
dilution in the equity position of the Company's current shareholders.
Additionally, large share issuances would generally have a negative impact on
the Company's share price. It is possible that, due to additional share
issuance, you could lose a substantial amount, or all, of your investment.
INVESTING IN THE COMPANY IS HIGHLY SPECULATIVE AND COULD RESULT IN THE ENTIRE
LOSS OF YOUR INVESTMENT
Purchasing the offered shares is highly speculative and involves significant
risk. The offered shares should not be purchased by any person who cannot afford
to lose their entire investment. The business and marketing plan of the Company
is not completed, and it is possible that we would be unable to finish it. The
Company's shareholders may be unable to realize a substantial or any return on
their purchase of the offered shares and may lose their entire investment. For
this reason, each prospective purchaser of the offered shares should read this
prospectus and all of its exhibits carefully and consult with their attorney,
business and/or investment advisor.
AS WE DO NOT HAVE AN ESCROW OR TRUST ACCOUNT WITH SUBSCRIPTIONS FOR INVESTORS,
IF WE FILE FOR OR ARE FORCED INTO BANKRUPTCY PROTECTION, THEY WILL LOSE THE
ENTIRE INVESTMENT
Invested funds for this offering will not be placed in an escrow or trust
account and if we file for bankruptcy protection or a petition for involuntary
bankruptcy is filed by creditors against us, your funds will become part of the
bankruptcy estate and administered according to the bankruptcy laws. As such,
you will lose your investment and your funds will be used to pay creditors.
THE COMPANY DOES NOT ANTICIPATE PAYING DIVIDENDS IN THE FORESEEABLE FUTURE, SO
THE ONLY WAY IN WHICH YOU CAN MAKE A GAIN ON ANY INVESTMENT IN THIS COMPANY IS
TO SELL THE STOCK IF AND ONLY IF A MARKET DEVELOPS.
We do not anticipate paying dividends on our common stock in the foreseeable
future, but plan rather to retain earnings, if any, for the operation growth and
expansion of our business. Therefore, the only way to liquidate your investment
is to sell your stock.
11
IN THE EVENT THAT THE COMPANY'S SHARES ARE TRADED, THEY MAY TRADE UNDER $5.00
PER SHARE AND THUS WILL BE A PENNY STOCK. TRADING IN PENNY STOCKS HAS MANY
RESTRICTIONS AND THESE RESTRICTIONS COULD ADVERSELY AFFECT THE PRICE AND
LIQUIDITY OF THE COMPANY'S SHARES CREATING A POTENTIAL LOSS OF INVESTMENT
In the event that our shares are traded, and our stock trades below $5.00 per
share, our stock would be known as a "penny stock", which is subject to various
regulations involving disclosures to be given to you prior to the purchase of
any penny stock. The U.S. Securities and Exchange Commission (the "SEC") has
adopted regulations which generally define a "penny stock" to be any equity
security that has a market price of less than $5.00 per share, subject to
certain exceptions. Depending on market fluctuations, our common stock could be
considered to be a "penny stock". A penny stock is subject to rules that impose
additional sales practice requirements on broker/dealers who sell these
securities to persons other than established customers and accredited investors.
For transactions covered by these rules, the broker/dealer must make a special
suitability determination for the purchase of these securities. In addition, he
must receive the purchaser's written consent to the transaction prior to the
purchase. He must also provide certain written disclosures to the purchaser.
Consequently, the "penny stock" rules may restrict the ability of broker/dealers
to sell our securities, and may negatively affect the ability of holders of
shares of our common stock to resell them. These disclosures require you to
acknowledge that you understand the risks associated with buying penny stocks
and that you can absorb the loss of your entire investment. Penny stocks are low
priced securities that do not have a very high trading volume. Consequently, the
price of the stock is often volatile and you may not be able to buy or sell the
stock when you want to.
BLUE SKY LAWS MAY LIMIT YOUR ABILITY TO SELL YOUR SHARES. IF THE STATE LAWS ARE
NOT FOLLOWED, YOU WILL NOT BE ABLE TO SELL YOUR SHARES AND YOU MAY LOOSE YOUR
INVESTMENT
State Blue Sky laws may limit resale of the Shares. The holders of our shares of
common stock and persons who desire to purchase them in any trading market that
might develop in the future should be aware that there may be significant state
law restrictions upon the ability of investors to resell our shares.
Accordingly, even if we are successful in having the Shares available for
trading on the OTCBB, investors should consider any secondary market for the
Company's securities to be limited.
SINCE OUR SOLE OFFICER AND DIRECTOR CURRENTLY OWNS 100% OF THE OUTSTANDING
COMMON STOCK, INVESTORS MAY FEEL THAT HIS DECISIONS ARE CONTRARY TO THEIR
INTERESTS
The Company's sole officer and director, Mr. David Johnson, owns 100% of the
outstanding shares and will own no less than 75% after this offering is
completed. For example, if 50% of the offering is sold, Mr. Johnson will retain
85.7% of the shares outstanding. As a result, he will maintain control of the
Company and be able to choose all of our directors. His interests may differ
from those of other stockholders. Factors that could cause his interests to
differ from the other stockholders include the impact of corporate transactions
on the timing of business operations and his ability to continue to manage the
business given the amount of time he is able to devote to the Company.
12
FORWARD-LOOKING STATEMENTS
This prospectus contains certain forward-looking statements regarding
management's plans and objectives for future operations, including plans and
objectives relating to our planned entry into our service business. The
forward-looking statements and associated risks set forth in this prospectus
include or relate to, among other things, (a) our projected profitability, (b)
our growth strategies, (c) anticipated trends in our industry, (d) our ability
to obtain and retain sufficient capital for future operations, and (e) our
anticipated needs for working capital. These statements may be found under
"Management's Discussion and Analysis or Plan of Operation" and "Description of
Business," as well as in this prospectus generally. Actual events or results may
differ materially from those discussed in these forward-looking statements as a
result of various factors, including, without limitation, the risks outlined
under "Risk Factors" and matters described in this prospectus generally. In
light of these risks and uncertainties, the forward-looking statements contained
in this prospectus may not in fact occur.
The forward-looking statements herein are based on current expectations that
involve a number of risks and uncertainties. Such forward-looking statements are
based on the assumptions that we will be able to continue our business
strategies on a timely basis, that we will attract customers, that there will be
no materially adverse competitive conditions under which our business operates,
that our sole officer and director will remain employed as such, and that our
forecasts accurately anticipate market demand. The foregoing assumptions are
based on judgments with respect to, among other things, future economic,
competitive and market conditions, and future business decisions, all of which
are difficult or impossible to predict accurately and many of which are beyond
our control. Accordingly, although we believe that the assumptions underlying
the forward-looking statements are reasonable, any such assumption could prove
to be inaccurate and therefore there can be no assurance that the results
contemplated in forward-looking statements will be realized. In addition, as
disclosed elsewhere in this "Risk Factors" section of this prospectus, there are
a number of other risks inherent in our business and operations, which could
cause our operating results to vary markedly and adversely from prior results or
the results contemplated by the forward-looking statements. Increases in the
cost of our services, or in our general or administrative expenses, or the
occurrence of extraordinary events, could cause actual results to vary
materially from the results contemplated by these forward-looking statements.
Management decisions, including budgeting, are subjective in many respects and
subject to periodic revisions in order to reflect actual business conditions and
developments. The impact of such conditions and developments could lead us to
alter our marketing, capital investment or other expenditures and may adversely
affect the results of our operations. In light of the significant uncertainties
inherent in the forward-looking information included in this prospectus, the
inclusion of such information should not be regarded as a representation by us
or any other person that our objectives or plans will be achieved.
USE OF PROCEEDS
Our offering is being made on a self-underwritten basis: no minimum number of
shares must be sold in order for the offering to proceed. The offering price per
share is $0.01. The following table sets forth the potential net proceeds and
the uses of proceeds assuming the sale of 25%, 50%, 75% and 100%, respectively,
of the securities offered for sale by the Company.
IF 25% OF IF 50% OF IF 75% OF IF 100% OF
SHARES SOLD SHARES SOLD SHARES SOLD SHARES SOLD
----------- ----------- ----------- -----------
NET PROCEEDS FROM
THIS OFFERING $2,500 $10,000 $17,500 $25,000
13
Our offering is being made on a self-underwritten basis: no minimum number of
shares must be sold in order for the offering to proceed. The offering price per
share is $0.01. The net proceeds in the table above assume $5,000 in costs
associated with this offering.
The funds raised through this offering will first be used to cover mandatory
operating expenses over the next year such as public company requirements with
audit, SEC filings, and reporting. We anticipate these costs to be approximately
$5,000-6,000 which are expected to last until the end of the Company's fiscal
year. The balance of the funds raised will be used to complete the business and
marketing plan.
The business and marketing plan must be completed before any product development
starts. We plan to raise a subsequent round of capital after this offering and
will use those proceeds to implement the business plan. We anticipate the
implementation will cost approximately $125,000. The additional capital will be
allocated 1/3 toward product development, 1/3 toward marketing, and the
remaining toward manufacturing. The costs associated with this plan include
hiring three consultants (1 for product design, 1 marketing, and 1 manufacturing
resources), each costing $30,000 and the balance of $35,000 for general working
capital purposes. These resources will create the marketing and product
strategy, manufacturing strategy, business operations, and develop a financial
plan that estimates the cost to design, manufacture and bring the first product,
the Hidden Ladder, to market in order to start generating revenues. These
resources will estimate these costs based on their experience. There can be no
assurances by the Company that these strategies and estimates will not change in
the future. The Company will not use any of the offering proceeds for product
development.
DETERMINATION OF OFFERING PRICE
As there is no established public market for our shares, the offering price and
other terms and conditions relative to our shares have been arbitrarily
determined by Hidden Ladder and do not bear any relationship to assets,
earnings, book value, or any other objective criteria of value. In addition, no
investment banker, appraiser, or other independent third party has been
consulted concerning the offering price for the shares or the fairness of the
offering price used for the shares.
The price of the current offering is fixed at $0.01 per share. This price is
significantly greater than the price paid by the company's sole officer and
director for common equity since the company's inception on February 23, 2010.
The company's sole officer and director paid $0.001 per share, a difference of
$0.009 per share lower than the share price in this offering.
DILUTION OF THE PRICE YOU PAY FOR YOUR SHARES
Dilution represents the difference between the offering price and the net
tangible book value per share immediately after completion of this offering. Net
tangible book value is the amount that results from subtracting total
liabilities and intangible assets from total assets. Dilution arises mainly as a
result of our arbitrary determination of the offering price of the shares being
offered. Dilution of the value of the shares you purchase is also a result of
the lower book value of the shares held by our existing stockholders. The
following tables compare the differences of your investment in our shares with
the investment of our existing stockholders.
14
EXISTING SHAREHOLDER PER SHARE DATA IF ALL OF THE SHARES ARE SOLD
- --------------------------------------------------------------------------------
Price per share .................................................... $0.01
Net tangible book value per share before offering .................. $0.0006
Potential gain to existing shareholders ............................ $0.0019
Net tangible book value per share after offering ................... $0.0025
Increase to present stockholders in net tangible book value
per share after offering ........................................ $0.0019
Capital contributions .............................................. $9,000
Number of shares outstanding before the offering ................... 9,000,000
Number of shares after offering held by existing stockholders ...... 9,000,000
Percentage of ownership after offering ............................. 75%
PURCHASERS PER SHARE DATA AND OWNERSHIP OF SHARES IN THIS OFFERING
IF ALL SHARES SOLD
- --------------------------------------------------------------------------------
Price per share .................................................... $0.01
Dilution per share ................................................. $0.0075
Net Capital contributions .......................................... $25,000
Percentage of capital contributions (gross)......................... 77%
Number of shares after offering held by public investors ........... 3,000,000
Percentage of ownership after offering ............................. 25%
THE OFFERING BY THE COMPANY
Hidden Ladder is registering 3,000,000 shares of its common stock for offer and
sale.
There is currently no active trading market for our common stock, and such a
market may not develop or be sustained. After we become effective with the SEC,
we plan to develop a trading market. In order to do so, we have to retain an
authorized OTC Bulletin Board market maker. The market maker will file Form 211
with FINRA (Financial Industry Regulatory Authority). Once we are approved with
FINRA, our stock will be quoted on the OTC BB.
There can be no assurances that we will be able to retain an authorized OTC BB
market maker and furthermore, there are no assurances that we will be approved
by FINRA. At the date hereof, we are not aware that any market maker has any
such intention.
All of the shares registered herein will become effective for sale to investors.
The company will not offer the shares through a broker-dealer or anyone
affiliated with a broker-dealer.
NOTE: As of the date of this prospectus, our sole officer and director, Mr.
David Johnson, owns 9,000,000 common shares, which are subject to Rule 144
restrictions. There is currently one (1) shareholder of our common stock.
The company is hereby registering 3,000,000 common shares. The price per share
is $0.01.
In the event the company receives payment for the sale of their shares, Hidden
Ladder will receive all of the proceeds from such sales. Hidden Ladder is
bearing all expenses in connection with the registration of the shares of the
company.
15
PLAN OF DISTRIBUTION
We are offering the shares on a "self-underwritten" basis directly through Mr.
Johnson our executive officer and director named herein, who will not receive
any commissions or other remuneration of any kind for selling shares in this
offering, except for the reimbursement of actual out-of-pocket expenses incurred
in connection with the sale of the common stock. The offering will conclude at
the earlier of when all 3,000,000 shares of common stock have been sold or 90
days after this registration statement becomes effective with the Securities and
Exchange Commission.
This offering is a self-underwritten offering, which means that it does not
involve the participation of an underwriter to market, distribute or sell the
shares offered under this prospectus. We will sell shares on a continuous basis.
We reasonably expect the amount of securities registered pursuant to this
offering to be offered and sold within 90 days from this initial effective date
of this registration.
In connection with his selling efforts in the offering, Mr. Johnson will not
register as broker-dealer pursuant to Section 15 of the Exchange Act, but rather
will rely upon the "safe harbor" provisions of Rule 3a4-1 under the Exchange
Act. Generally speaking, Rule 3a4-1 provides an exemption from the broker-dealer
registration requirements of the Exchange Act for persons associated with an
issuer that participate in an offering of the issuer's securities. David Johnson
is not subject to any statutory disqualification, as that term is defined in
Section 3(a)(39) of the Exchange Act. David Johnson will not be compensated in
connection with his participation in the offering by the payment of commissions
or other remuneration based either directly or indirectly on transactions in our
securities. Mr. Johnson is not and has not been within the past 12 months, a
broker or dealer, and is not within the past 12 months, an associated person of
a broker or dealer. At the end of the offering, Mr. Johnson will continue to
primarily perform substantial duties for us or on our behalf otherwise than in
connection with transactions in securities. Mr. Johnson has not participated in
selling an offering of securities for any issuer more than once every 12 months
other than in reliance on Exchange Act Rule 3a4-1(a)(4)(i) or (iii).
9,000,000 common shares are issued and outstanding as of the date of this
prospectus. The company is registering an additional 3,000,000 shares of its
common stock for possible resale at the price of $0.01 per share.
Hidden Ladder will receive all proceeds from the sale of the shares by the
company. The price per share is $0.01. However, Hidden Ladder common stock may
never be quoted on the OTC Bulletin Board or listed on any exchange.
The company's shares may be sold to purchasers from time to time directly by,
and subject to, the discretion of the company. Further, the company will not
offer their shares for sale through underwriters, dealers, or agents or anyone
who may receive compensation in the form of underwriting discounts, concessions
or commissions from the company and/or the purchasers of the shares for whom
they may act as agents. The shares sold by the company may be sold occasionally
in one or more transactions at a fixed price of $0.01 per share.
The shares may not be offered or sold in certain jurisdictions unless they are
registered or otherwise comply with the applicable securities laws of such
jurisdictions by exemption, qualification or otherwise. We intend to sell the
shares only in the states in which this offering has been qualified or an
exemption from the registration requirements is available, and purchases of
shares may be made only in those states.
16
In addition and without limiting the foregoing, the company will be subject to
applicable provisions, rules and regulations under the Exchange Act with regard
to security transactions during the period of time when this Registration
Statement is effective.
Hidden Ladder will pay all expenses incidental to the registration of the shares
(including registration pursuant to the securities laws of certain states).
LEGAL PROCEEDINGS
We are not a party to any material legal proceedings and to our knowledge; no
such proceedings are threatened or contemplated by any party.
BUSINESS
Company Summary
Hidden Ladder is a home improvement company intending to develop products and
sell them on a wholesale basis to various types of retailers. The Company is
based in Rocklin, California. The Company was started by David Johnson and
incorporated on February 23, 2010.
Hidden Ladder's operations are located in a home office.
Mission
Hidden Ladder will strive for quality in its safety products for consumers. The
Company plans on creating a suite of products that all can be used by the
consumer for fire safety and protection.
Products
Hidden Ladder plans to create a set of safety oriented products for homeowners.
The first product will be a hidden escape ladder for homeowners. It will provide
the homeowner comfort knowing that if there is a fire in their home they will be
able to escape safely from the 2nd or higher story. The Company believes it is
important that he ladder neatly fold up and hang under the window. It will need
to be appeal to the consumer and easily accessible. Other products in the
Company's plan include flashlights, fire retardant blankets, and protective
eyeglasses.
Market Analysis Summary
Hidden Ladder believes the great potential to distribute the product to the
consumer is on a wholesale basis through well established and trusted select
retailers. The Company has identified four potential types of retailers:
Chain-retailers, single retailers, homebuilders, and mail order/Internet
catalogs. The Company believes that home builders like Home Depot and Lowes are
most appealing due to their market presence and customer base. The Company also
anticipates that these home builders can be time consuming and very aggressive
on pricing. On the other hand, the Company plans to sell their safety products
to consumers through mail order and Internet catalogs. Catalogs are easy to use
and efficient, however they traditionally do not have the same market reach and
customer base as the home builder or chain-retailers. Therefore, the Company
plans to evaluate and select multiple types of retailers to market and sell
their products.
Marketing
We plan to evaluate a variety of marketing methods, including in store displays,
radio, newspaper, trade shows, conferences, and expos to reach potential
customers. We believe safety in the home is a top priority to all consumers.
17
Competition and Buying Patterns
Among the retail businesses, the Company believes competition among home
builders and chain-retailers tends to be less about products of similar nature
and more about shelf space. The Company believes that typical stores have
limited display space and devote most of that space to brand name products
because the sell quicker. Many larger manufacturers offer the merchant some form
of incentive, either as a discount, or through the use of promotional materials.
It's the Company's view that in larger stores, with a multitude of offerings,
visibility places a big part of customer selection. The Company plans to offer
promotional materials and discount incentives to retailers.
The Company believes that one concern among most retail stores is that of
supply. In general, it's the Company's belief that the manufacturer requires a
supplier to have a system in place to ensure timely deliveries of the expected
quota. Failure to fulfill these contracts can result in loss of exposure and
loss of customers, and the Company believes can be one of the leading causes of
failure among start-up manufacturers.
Strategy and Implementation Summary
Hidden Ladder believes that in order to market to the home builder retailers
like Home Depot and Lowe's, the Company will need to start in one geographical
area. Since the Company is based in California, the Company would target the
home builder's retail stores within the Western part of the United States which
include Washington, Oregon, California, and Arizona. The Company will work
directly with the retailer to understand their in-store marketing techniques and
promotions. The Company anticipates that they will work with the local in-store
employees to provide these promotions to their customers.
Competitive Positioning
The Company plans to be competitive in our market by making sure our product is
safe, functional, and properly constructed so that it can support the consumer's
weight using the ladder. In addition, Hidden Ladder plans to create a ladder
that is easy to use, folds up into a small space, and lightweight. According to
the Company's research, it is the Company's believe that there are several
ladders on the market that difficult to use, hard to store, and heavy. In
addition, the Company believes that since the product needs to be easily
accessible, it must have an appealing look which the Company believes other
ladders are missing.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This section of the prospectus includes a number of forward-looking statements
that reflect our current views with respect to future events and financial
performance. Forward-looking statements are often identified by words like:
"believe", "expect", "estimate", "anticipate", "intend", "project" and similar
expressions, or words which, by their nature, refer to future events. You should
not place undue certainty on these forward-looking statements, which apply only
as of the date of this prospectus. These forward-looking statements are subject
to certain risks and uncertainties that could cause actual results to differ
materially from historical results or our predictions.
Hidden Ladder plans to create and market a set of safety product for homeowners.
We have not yet generated or realized any revenues from business operations.
From inception to February 28, 2010, the company's business operations have
primarily been focused on developing our business plan and market research.
18
LIMITED OPERATING HISTORY; NEED FOR ADDITIONAL CAPITAL
THERE IS NO HISTORICAL FINANCIAL INFORMATION ABOUT US UPON WHICH TO BASE AN
EVALUATION OF OUR PERFORMANCE. HIDDEN LADDER, INC. WAS INCORPORATED IN THE STATE
OF FLORIDA ON FEBRUARY 23, 2010; WE ARE A DEVELOPMENT STAGE COMPANY THE COMPANY
WILL DESIGN, DEVELOP, AND MARKET HOME SAFETY PRODUCTS FOR CONSUMERS. WE HAVE NOT
GENERATED ANY REVENUES FROM OUR OPERATIONS. WE CANNOT GUARANTEE WE WILL BE
SUCCESSFUL IN OUR BUSINESS OPERATIONS. OUR BUSINESS IS SUBJECT TO RISKS INHERENT
IN THE ESTABLISHMENT OF A NEW BUSINESS ENTERPRISE, INCLUDING THE FINANCIAL RISKS
ASSOCIATED WITH THE LIMITED CAPITAL RESOURCES CURRENTLY AVAILABLE TO US FOR THE
IMPLEMENTATION OF OUR BUSINESS STRATEGIES (SEE "RISK FACTORS"). TO BECOME VIABLE
AND COMPETITIVE, WE MUST DEVELOP AND COMPLETE THE BUSINESS AND MARKETING PLAN,
EXECUTE THE PLAN AND ESTABLISH SALES VIA THE HOME BUILDING AND IMPROVEMENT
RETAILERS WITH CONSUMERS. OUR AUDITORS HAVE EXPRESSED AN OPINION THAT
SUBSTANTIAL DOUBT EXISTS AS TO WHETHER WE CAN CONTINUE AS AN ONGOING BUSINESS.
PLAN OF OPERATION
Over the 12 month period starting upon the effective date of this registration
statement, the Company anticipates needing $150,000 of capital in order to
complete the Business and Marketing Plan and to commence its execution. The
Company believes this event is the most critical to our success. The Company
estimates that it will take up to six months after this registration statement
becomes effective and the costs will be similar to this offering, however the
Company is uncertain on the timeframe for raising the follow on capital to
complete the business and marketing plan.
There are two major parts to the business and marketing plan, the product
development strategy and marketing strategy. The company plans on using
consultants and contractors to develop both strategies, estimated to be
completed in two months, and will cost approximately $25,000. The product
development strategy costs consists of two resources, one product design and the
other a manufacturing expert. The marketing strategy will require one resource.
The Company will not commence any product development and prototypes until the
business and marketing plans are completed.
After the business and marketing plans are completed, Company intends to hire
independent consultants, and contractors to develop the product prototypes. The
Company believes finding experienced consultants in the home building and
improvement industry is critical to ensure the success of the Company's
development plans. The Company expects to complete the product development and
prototypes within twenty four (24) months from this offering.
Hidden Ladder has incurred a loss of $937 for the period ending May 31, 2010 and
total loss of $4,537 since inception. The Company has not generated any revenue
from business operations. All proceeds currently held by the company are the
result of the sale of common stock to its officer. The Company does not have any
contractual arrangement with our CEO, Mr. David Johnson to fund the Company on
an on-going basis for either operating capital or a loan. The CEO may elect to
fund the Company as he did initially, however there are no assurances that he
will in the future.
19
The Company incurred expenditures of $937 for operating expenses for the period
ending May 31, 2010 and $3,500 for audit services and $100 for general
administrative costs for the period ending February 28, 2010. Since inception,
the majority of the company's time has been spent on developing its business
plan and conducting industry research, and preparing for a primary financial
offering. This loss occurred over a period of five (5) days from February 23,
2010 (inception) to February 28, 2010.
LIQUIDITY AND CAPITAL RESOURCES
As of the date of this registration statement, we have yet to generate any
revenues from our business operations. For the period ended February 28, 2010,
Hidden Ladder, Inc. issued 9,000,000 shares of common stock to our sole officer
and director for cash proceeds of $9,000 at $0.001 per share.
We anticipate needing a $150,000 in order to complete our business and marketing
plan over the next twelve (12) months and to identify the necessary resources to
implement our plan. In addition, the subsequent offering will allow us to
complete the the product design, prototype, and to bring the product to market
in order to generate revenues. At this time, we cannot estimate the financial
resources required for the product development, prototype and bring the product
to market to generate revenues. We expect that after the business and marketing
plan is completed, we will know the financial resources that are required to
bring the product to market and start generating revenues.
Again, the Company believes this event of raising additional capital is critical
to implement our plan. The costs associated with this plan include hiring three
consultants (1 for product design, 1 marketing, and 1 manufacturing resources),
each costing $30,000 and the balance of $35,000 for general working capital
purposes. These resources will create the marketing and product strategy,
manufacturing strategy, business operations, and develop a financial plan that
estimates the cost to design, manufacture and bring the first product, the
Hidden Ladder, to market in order to start generating revenues. The working
capital expenses are estimated as follows: $5,000 for public company costs that
include EDGAR fees for SEC filings, $10,000 for legal, $10,000 for accounting,
$3,000 for travel, $2,000 for telephone and internet, and $5,000 for office
supplies. Currently, the Company believes these figures are accurate based on
current economic conditions, unemployment numbers, and the recent positive
growth trends in the home building and improvement industry. However, the
available cash is not sufficient to allow us to commence full execution of our
business plan. Based on our success of raising additional capital over the next
twelve (12) months, which is the Company's greatest uncertainty and therefore
top priority, we anticipate employing various consultants and contractors to
commence the development strategy for the product prototypes. Until the Business
and Marketing plan are completed, we are not able to quantify with any certainty
any planned capital expenditures beyond the business and marketing plan.
Currently, the only planned capital expenditures are the public company
operating costs. As of May 31, 2010, the Company has no firm commitments for any
capital expenditures.
20
Our business will require additional capital resources that may be funded
through the issuance of common stock or of notes payable or other debt
arrangements. The Company will explore all financing possibilities and
alternatives. Despite our current financial status we believe that we may be
able to issue notes payable or debt instruments in order to further develop our
Business and Marketing Plan. We anticipate that receipt of such financing may
require granting a security interest in the Company, and are willing to grant
such interest to secure the necessary funding. This security interest would be
UCC1 lien on all of the Company's assets. Any security interest would take
preference over equity in a liquidation.
Through May 31, 2010 we incurred a $937 loss for operational expenses. For the
year ending February 28, 2010, we have incurred a total of $3,600 in general and
administration expenses including $3,500 in professional fees. This loss
occurred over a period of five (5) days from February 23, 2010 to February 28,
2010 and our current cash reflects less than one (1) month of operation.
To date, we have managed to keep our monthly cash flow requirement low for two
reasons. First, our sole officer has agreed not to draw a salary until the
Company has raised $500,000 of cash in either equity or debt for working capital
or has at least $500,000 in revenues. Second, we have been able to keep our
operating expenses to a minimum by operating in space owned by our sole officer
and are only paying the direct expenses associated with our business operations.
We believe managing costs is very important to our success, especially under the
current economic times.
Given our low monthly cash flow requirement and the compensation arrangement
with our sole officer, management believes that, while our auditors have
expressed substantial doubt about our ability to continue as a going concern,
and assuming that we do not commence our anticipated operations until sufficient
financial resources are available, we believe we will be able to meet our
obligations for at least the next twelve months.
In the early stages of our company, we will need cash for completing the
business and marketing plans. We anticipate that during the first year, in order
to develop our business plan to any meaningful degree, we would need to spend a
minimum of $150,000 on such endeavors. After this offering, we will seek
additional financing through means such as equity offerings, borrowings from
institutions and/or private individuals. We estimate the costs with additional
equity offerings will be similar to this offering, however we are uncertain as
to the costs with loans because we have not entered into any of those types of
arrangements. Even if we sell all shares offered through this registration
statement, we expect that we will seek additional financing in the future.
However, we may not be able to obtain additional capital or generate sufficient
revenues to fund our operations. If we are unsuccessful at raising sufficient
funds, for whatever reason, to fund our operations, we may be forced to seek a
buyer for our business or another entity with which we could create a joint
venture. If all of these alternatives fail, we expect that we will be required
to seek protection from creditors under applicable bankruptcy laws.
The Company has entered into no contractual obligations or commitment
agreements.
21
MANAGEMENT
OFFICER AND DIRECTOR
Our sole officer and director will serve until his successor is elected and
qualified. Our officer is elected by the board of directors to a term of one (1)
year and serve until their successor is duly elected and qualified, or until
they are removed from office. The board of directors has no nominating, auditing
or compensation committees.
The name, address, age and position of our President, Secretary, Treasurer,
Principal Executive Officer, Principal Financial Officer, and sole member of the
Board of Directors is set forth below:
Name and Address Age Position(s)
- ---------------- --- -----------
David Johnson 27 President, Secretary, Treasurer, Principal
Executive Officer, Principal Financial Officer,
and sole member of the Board of Directors
The person named above has held his offices/positions since the inception of our
company and is expected to hold his offices/positions until the next annual
meeting of our stockholders.
COMMITTEES OF THE BOARD OF DIRECTORS
Our Board of Directors has not established any committees, including an Audit
Committee, a Compensation Committee, a Nominating Committee or any committee
performing a similar function. The functions of those committees are being
undertaken by the entire board as a whole. Because we do not have any
independent directors, our Board of Directors believes that the establishment of
committees of the Board would not provide any benefits to our company and could
be considered more form than substance.
We do not have a policy regarding the consideration of any director candidates
which may be recommended by our stockholders, including the minimum
qualifications for director candidates, nor has our Board of Directors
established a process for identifying and evaluating director nominees. We have
not adopted a policy regarding the handling of any potential recommendation of
director candidates by our stockholders, including the procedures to be
followed. Our Board has not considered or adopted any of these policies as we
have never received a recommendation from any stockholder for any candidate to
serve on our Board of Directors. Given our relative size and lack of directors
and officers insurance coverage, we do not anticipate that any of our
stockholders will make such a recommendation in the near future. While there
have been no nominations of additional directors proposed, in the event such a
proposal is made, all members of our Board will participate in the consideration
of director nominees.
When we are able to expand our Board of Directors to include one or more
independent directors, we intend to establish an Audit Committee of our Board of
Directors.
WE DO NOT HAVE ANY INDEPENDENT DIRECTORS AND WE HAVE NOT VOLUNTARILY IMPLEMENTED
VARIOUS CORPORATE GOVERNANCE MEASURES, IN THE ABSENCE OF WHICH, STOCKHOLDERS MAY
HAVE MORE LIMITED PROTECTIONS AGAINST INTERESTED DIRECTOR TRANSACTIONS,
CONFLICTS OF INTEREST AND SIMILAR MATTERS.
22
Federal legislation has resulted in the adoption of various corporate governance
measures designed to promote the integrity of the corporate management and the
securities markets. Some of these measures have been adopted in response to
legal requirements. Others have been adopted by companies in response to the
requirements of national securities exchanges, such as the NYSE or The NASDAQ
Stock Market, on which their securities are listed. Among the corporate
governance measures that are required under the rules of national securities
exchanges are those that address board of directors' independence, audit
committee oversight, and the adoption of a code of ethics. Our Board of
Directors is comprised of one individual who is also our executive officer. Our
executive officer makes decisions on all significant corporate matters such as
the approval of terms of the compensation of our executive officer and the
oversight of the accounting functions.
Although we have adopted a Code of Ethics and Business Conduct, we have not yet
adopted any of these other corporate governance measures and, since our
securities are not yet listed on a national securities exchange, we are not
required to do so. We have not adopted corporate governance measures such as an
audit or other independent committees of our board of directors as we presently
do not have any independent directors. If we expand our board membership in
future periods to include additional independent directors, we may seek to
establish an audit and other committees of our board of directors. It is
possible that if our Board of Directors included independent directors and if we
were to adopt some or all of these corporate governance measures, stockholders
would benefit from somewhat greater assurances that internal corporate decisions
were being made by disinterested directors and that policies had been
implemented to define responsible conduct. For example, in the absence of audit,
nominating and compensation committees comprised of at least a majority of
independent directors, decisions concerning matters such as compensation
packages to our senior officer and recommendations for director nominees may be
made by a majority of directors who have an interest in the outcome of the
matters being decided. Prospective investors should bear in mind our current
lack of corporate governance measures in formulating their investment decisions.
CODE OF BUSINESS CONDUCT AND ETHICS
In February 2010 we adopted a Code of Ethics and Business Conduct which is
applicable to our future employees and which also includes a Code of Ethics for
our President, Secretary, Treasurer, Principal Executive Officer, Principal
Financial Officer, and sole member of the Board of Directors and persons
performing similar functions. A code of ethics is a written standard designed to
deter wrongdoing and to promote
o honest and ethical conduct,
o full, fair, accurate, timely and understandable disclosure in
regulatory filings and public statements,
o compliance with applicable laws, rules and regulations,
o the prompt reporting violation of the code, and
o accountability for adherence to the code.
A copy of our Code of Business Conduct and Ethics has been filed with the
Securities and Exchange Commission as an exhibit to this Form S-1 filing. Any
person desiring a copy of the Code of Business Conduct and Ethics, can obtain
one by going to www.sec.gov and looking at the attachments to this Form S-1.
23
BACKGROUND OF OFFICER AND DIRECTOR
Mr. David Johnson, President, Chief Executive Officer, Sole Member of the Board
of Directors Chief Financial Officer Principal Accounting Officer Secretary
RESUME
Mr. Johnson has over 8 years of experience in building industry with extensive
experience in the building and construction Industry. Prior to starting Hidden
Ladder, Mr. Johnson worked as a project manager for Davis Electric, a building
and construction company based in Sacramento, California from 2001 till 2009.
From 2009 to June 2010, Mr. Johnson has been providing consulting services to
local building contractors in the Sacramento Area.
CERTAIN TRANSACTIONS AND RELATED TRANSACTIONS
None.
EXECUTIVE COMPENSATION
David Johnson will not be taking any compensation until the Company has raised
$500,000 of cash in either equity or debt for working capital or has at least
$500,000 in revenues.
SUMMARY OF COMPENSATION
We did not pay any salaries in 2010. We do not anticipate beginning to pay
salaries until we have adequate funds to do so. There are no stock option plans,
retirement, pension, or profit sharing plans for the benefit of any officer or
director other than as described herein.
SUMMARY COMPENSATION TABLE
The following table provides certain summary information concerning cash and
certain other compensation we paid to our Chief Executive Officer for the fiscal
year ending February 28, 2010.
Non-
Non-Equity Qualified
Incentive Deferred
Stock Option Plan Compensation All Other
Name & Fiscal Salary Bonus Award(s) Award(s) Compensation Earnings Compensation Total
Principal Position Year ($) ($) ($) ($) ($) ($) ($) ($)
- ----------------------- ------ ------ ----- -------- -------- ------------ ------------ ------------ -----
David Johnson 2010 0 - - - - - - 0
Chief Executive Officer
DIRECTOR COMPENSATION
Mr. Johnson the sole member of our Board of Directors is also our executive
officer. We do not pay fees to any director, however we will reimburse any
director for out-of-pocket expenses incurred with board meetings.
LONG-TERM INCENTIVE PLAN AWARDS
We do not have any long-term incentive plans including options and SARs that
provide compensation intended to serve as incentive for performance.
EMPLOYMENT AGREEMENTS
At this time, Hidden Ladder has not entered into any employment agreements with
our sole officer and director.
24
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of the date of this prospectus, the total
number of shares owned beneficially by our sole officer and director, and key
employees, individually and as a group, and the present owners of 5% or more of
our total outstanding shares.
The stockholder listed below has direct ownership of his shares and possesses
sole voting and dispositive power with respect to the shares.
Number of Percentage
Title of Class Name Shares Owned of Shares(1)
- -------------- ---- ------------ ------------
Shares of Common Stock David Johnson (2) 9,000,000 100%
2803 Isle Street
Rocklin, CA 95765
__________________
(1) Based on 9,000,000 shares outstanding as of February 28, 2010.
(2) The person named above may be deemed to be a "parent" and "promoter" of our
company, within the meaning of such terms under the Securities Act of 1933, Mr.
Johnson is the only "parent" and "promoter" of the company.
For the period ended February 28, 2010, a total of 9,000,000 shares of common
stock were issued to our sole officer and director, all of which are restricted
securities, as defined in Rule 144 of the Rules and Regulations of the SEC
promulgated under the Securities Act. Under Rule 144, the shares can be publicly
sold, subject to volume restrictions and restrictions on the manner of sale,
commencing one year after their acquisition. Under Rule 144, a shareholder can
sell up to 1% of total outstanding shares every three months in brokers'
transactions. Shares purchased in this offering, which will be immediately
resalable, and sales of all of our other shares after applicable restrictions
expire, could have a depressive effect on the market price, if any, of our
common stock and the shares we are offering.
Our sole officer and director will continue to own the majority of our common
stock after the offering, regardless of the number of shares sold. Since he will
continue control our company after the offering, investors in this offering will
be unable to change the course of our operations. Thus, the shares we are
offering lack the value normally attributable to voting rights. This could
result in a reduction in value of the shares you own because of their
ineffective voting power. None of our common stock is subject to outstanding
options, warrants, or securities convertible into common stock.
The company is hereby registering 3,000,000 of its common shares, in addition to
the 9,000,000 shares currently issued and outstanding. The price per share is
$0.01 (please see "Plan of Distribution" below).
The 9,000,000 shares currently issued and outstanding were acquired by our sole
officer and director for the period ended, February 28, 2010. We issued a total
of 9,000,000 common shares for consideration of $9,000, which was accounted for
as a purchase of common stock.
DESCRIPTION OF SECURITIES
In the event the company receives payment for the sale of their shares, Hidden
Ladder will receive all of the proceeds from such sales. Hidden Ladder is
bearing all expenses in connection with the registration of the shares of the
Company.
25
COMMON STOCK
The authorized common stock is three hundred million (300,000,000) shares with a
par value of $.0001 for an aggregate par value of thirty thousand dollars
($30,000).
Common Stock has the following rights:
* 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;
* do not have preemptive, subscription or conversion rights and there are no
redemption or sinking fund provisions or rights;
* and are entitled to one non-cumulative vote per share on all matters on
which stockholders may vote.
We refer you to the Bylaws of our Articles of Incorporation and the applicable
statutes of the State of Florida for a more complete description of the rights
and liabilities of holders of our common stock securities.
NON-CUMULATIVE VOTING
Holders of shares of our common stock do not have cumulative voting rights,
which means that the holders of more than 50% of the outstanding shares, voting
for the election of directors, can elect all of the directors to be elected, if
they so choose, and, in that event, the holders of the remaining shares will not
be able to elect any of our directors. After this offering is completed, and
assuming all 3,000,000 shares being offered are sold, present stockholders will
own approximately 75% of our outstanding shares.
CASH DIVIDENDS
As of the date of this prospectus, we have not declared or paid any cash
dividends to stockholders. The declaration of any future cash dividend will be
at the discretion of our Board of Directors and will depend upon our earnings,
if any, our capital requirements and financial position, our general economic
conditions, and other pertinent conditions. It is our present intention not to
pay any cash dividends in the foreseeable future, but rather to reinvest
earnings, if any, in our business operations.
REPORTING
After we complete this offering, we will not be required to furnish you with an
annual report. Further, we will not voluntarily send you an annual report. We
will be required to file reports with the SEC under section 15(d) of the
Securities Act. The reports will be filed electronically. The reports we will be
required to file are Forms 10-K, 10-Q, and 8-K. You may read copies of any
materials we file with the SEC at the SEC's Public Reference Room at 100 F
Street, N.E., Washington, D.C. 20549. You may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The
SEC also maintains an Internet site that will contain copies of the reports we
file electronically. The address for the Internet site is www.sec.gov.
26
STOCK TRANSFER AGENT
We have not engaged the services of a transfer agent at this time. However,
within the next twelve months we anticipate doing so. Until such a time a
transfer agent is retained, Hidden Ladder will act as its own transfer agent.
STOCK OPTION PLAN
The Board of Directors of Hidden Ladder has not adopted a stock option plan
("Stock Option Plan"). The company has no plans to adopt a stock option plan but
may choose to do so in the future. If such a plan is adopted, this plan may be
administered by the board or a committee appointed by the board (the
"Committee"). The committee would have the power to modify, extend or renew
outstanding options and to authorize the grant of new options in substitution
therefore, provided that any such action may not, without the written consent of
the optionee, impair any rights under any option previously granted. Hidden
Ladder may develop an incentive based stock option plan for its officer and
director and may reserve up to 10% of its outstanding shares of common stock for
that purpose.
LEGAL MATTERS
The validity of the securities offered by this prospectus will be passed upon
for us by Schneider Weinberger & Beilly LLP.
EXPERTS
Our financial statements have been audited for the period ending February 28,
2010 by Lake & Associates CPA's, LLC, as set forth in their report included in
this prospectus. Their report is given upon their authority as experts in
accounting and auditing.
27
Hidden Ladder, Inc.
(A Development Stage Company)
Balance Sheets
May 31, 2010
ASSETS
------
MAY 31, AS OF
2010 FEBRUARY 28,
UNAUDITED 2010
--------- ------------
CURRENT ASSETS
Cash and cash equivalents ....................... $ 4,863 $ 9,000
--------- ---------
Total current assets .......................... $ 4,863 $ 9,000
--------- ---------
--------- ---------
TOTAL ASSETS .................................... $ 4,863 $ 9,000
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
-------------------------------------------------
CURRENT LIABILITIES
Accounts payable & Accrued liabilities .......... $ 400 $ 3,600
--------- ---------
Total liabilities ............................. 400 3,600
========= =========
STOCKHOLDERS' EQUITY (DEFICIENCY)
Capital Stock (Note 4)
Authorized:
250,000,000 common shares, $0.0001 par value
Issued and outstanding shares:
$ 900 $ 900
Additional paid-in capital ...................... 8,100 8,100
Deficit accumulated during the development stage (4,537) (3,600)
--------- ---------
Total Stockholders' Equity (Deficiency) ......... 4,463 5,400
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ...... $ 4,863 $ 9,000
========= =========
The accompanying notes are an integral part of these financial statements.
F-1
Hidden Ladder, Inc.
(A Development Stage Company)
Statements of Operations
For the period February 23, 2010 to May 31, 2010
FOR THE PERIOD
FROM INCEPTION
THREE MONTHS FEBRUARY 23,
ENDED 2010 TO
MAY 31, 2010 MAY 31, 2010
------------ --------------
REVENUES ................................... $ - $ -
------------ -------------
EXPENSES
General & Administrative ................. $ 37 $ 137
Professional Fees ........................ 900 4,400
------------ -------------
937 4,537
Loss Before Income Taxes ................... $ (937) $ (4,537)
------------ -------------
Provision for Income Taxes ................. - -
------------ -------------
Net Loss ................................... $ (937) $ (4,537)
============ =============
PER SHARE DATA:
Basic and diluted loss per common share $ - $ -
============ =============
Basic and diluted weighted Average
Common shares outstanding ............... 9,000,000 9,000,000
============ =============
The accompanying notes are an integral part of these financial statements.
F-2
Hidden Ladder, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity (Deficiency)
Deficit
Accumulated
Common Stock Additional During the
------------------ Paid-in Development
Shares Amount Capital Stage Total
--------- ------ ---------- ----------- --------
Inception - February 23, 2010 ......... - $ - $ - $ - $ -
Common shares issued to Founder for
cash at $0.001 per share (par value
$0.0001) on February 23, 2010 ...... 9,000,000 900 8,100 - 9,000
Loss for the period from inception
on February 23, 2010 to
February 28, 2010 .................. - - - (3,600) (3,600)
--------- ------ ---------- ---------- --------
Balance - February 28, 2010 ........... 9,000,000 $ 900 $ 8,100 $ (3,600) $ 5,400
========= ====== ========== ========== ========
Loss for the quarter ended
May 31, 2010 ....................... - - - (937) (937)
--------- ------ ---------- ---------- --------
Balance - May 31, 2010 ................ 9,000,000 $ 900 $ 8,100 $ (4,537) $ 4,463
========= ====== ========== ========== ========
The accompanying notes are an integral part of these financial statements.
F-3
Hidden Ladder, Inc.
(A Development Stage Company)
Statements of Cash Flow
For the period February 23, 2010 to May 31, 2010
FOR THE PERIOD
FROM INCEPTION
THREE MONTHS FEBRUARY 23,
ENDED 2010 TO
MAY 31, 2010 MAY 31, 2010
------------ --------------
OPERATING ACTIVITIES
Net Loss ...................................... $ (937) $ (4,537)
------------ -------------
Changes in Operating Assets and Liabilities:
Increase (decrease) in accounts payable and
accrued liabilities ........................ (3,200) 400
------------ -------------
Net cash used in operating activities ......... (4,137) (4,137)
------------ -------------
FINANCING ACTIVITIES
Common stock issued for cash .................. - 9,000
------------ -------------
Net cash provided by financing activities ..... - 9,000
------------ -------------
INCREASE IN CASH AND CASH EQUIVALENTS ........... (4,137) 4,863
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 9,000 -
------------ -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ...... $ 4,863 $ 4,863
============ =============
Supplemental Cash Flow Disclosures:
Cash paid for:
Interest expense ............................ $ - $ -
============ =============
Income taxes ................................ $ - $ -
============ =============
The accompanying notes are an integral part of these financial statements.
F-4
Hidden Ladder, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(MAY 31, 2010)
NOTE 1. GENERAL ORGANIZATION AND BUSINESS
Hidden Ladder, Inc. is a development stage company, incorporated in the State of
Florida on, February 23, 2010, to design a safety product for homeowners. The
Hidden Ladder will provide a hidden escape ladder for homeowners. The intent is
to provide the homeowner comfort knowing that if there is a fire in their home
they will be able to escape safely from the 2nd story. It will neatly fold up
and hang under the window and it will not be an eyesore in the home, but at the
same time it will be easily accessible.
Hidden Ladder's plan is to sell wholesale only, targeting select retailers. The
Company has identified four segments in the retail industry: Chain-retailers,
single retailers, homebuilders, and mail order & Internet catalogs The Company
believes that based on the ability of chain-retailers to buy in bulk, this
segment has the greatest opportunity. In this segment, the Company identified
two categories of interest: home-improvement and safety.
Through May 31, 2010 the Company was in the development stage and has not
carried on any significant operations and has generated minimal revenues. The
Company has incurred losses since inception aggregating $4,537. The accompanying
financial statements have been prepared assuming that the Company will continue
as a going concern. These matters, among others, raise substantial doubt about
the ability of the Company to continue as a going concern. These financial
statements do not include any adjustments to the amounts and classification of
assets and liabilities that may be necessary should the Company be unable to
continue as a going concern.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
Accounting Basis
- ----------------
The Company is currently a development stage enterprise reporting under the
provisions of Accounting Standards Codification ("ASC") 915 "Development Stage
Entities", which was previously Statement of Financial Accounting Standards
("SFAS") No. 7.
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles in the United States of America
for interim financial information and with the instructions to Form 10-Q and
Regulation S-X. Accordingly, the financial statements do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
considered necessary for a fair presentation have been included and such
adjustments are of a normal recurring nature. These financial statements should
be read in conjunction with the financial statements for the year ended December
31, 2009 and notes thereto and other pertinent information contained in our Form
S-1/A the Company has filed with the Securities and Exchange Commission (the
"SEC").
The results of operations for the three-month period ending May 31, 2010 are not
necessarily indicative of the results for the full fiscal year ending February
28, 2011.
F-5
Hidden Ladder, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(MAY 31, 2010)
Cash and Cash Equivalents
- -------------------------
For the purpose of the financial statements cash equivalents include all highly
liquid investments with maturity of three months or less.
Earnings (Loss) per Share
- -------------------------
The basic earnings (loss) per share are calculated by dividing the Company's net
income available to common shareholders by the weighted average number of common
shares outstanding during the year. The diluted earnings (loss) per share are
calculated by dividing the Company's net income (loss) available to common
shareholders by the diluted weighted average number of shares outstanding during
the year. The diluted weighted average number of shares outstanding is the basic
weighted number of shares adjusted as of the first of the year for any
potentially dilutive debt or equity. There are no diluted shares outstanding for
any periods reported.
Dividends
- ---------
The Company has not adopted any policy regarding payment of dividends. No
dividends have been paid during the periods shown, and none are contemplated in
the near future.
Income Taxes
- ------------
The Company adopted FASB ASC 740, Income Taxes, at its inception deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred tax
assets, including tax loss and credit carryforwards, and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date.
Deferred income tax expense represents the change during the period in the
deferred tax assets and deferred tax liabilities. The components of the deferred
tax assets and liabilities are individually classified as current and
non-current based on their characteristics. Deferred tax assets are reduced by a
valuation allowance when, in the opinion of management, it is more likely than
not that some portion or all of the deferred tax assets will not be realized. No
deferred tax assets or liabilities were recognized as of May 31, 2010.
Advertising
- -----------
The Company will expense advertising as incurred. The advertising for the period
ending May 31, 2010 was $0.00.
F-6
Hidden Ladder, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(MAY 31, 2010)
Use of Estimates
- ----------------
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect 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 revenue and expenses during
the reporting period. Actual results could differ from those estimates.
Revenue and Cost Recognition
- ----------------------------
The Company has no current source of revenue; therefore the Company has not yet
adopted any policy regarding the recognition of revenue or cost.
Property
- --------
The company does not own any real estate or other properties. The company's
office is located 2803 Isle Street, Rocklin CA 95765. Our contact number is
530-409-0453. The business office is located at the home of David Johnson, the
CEO of the company at no charge to the company.
Recently Issued Accounting Pronouncements
- -----------------------------------------
The Company has adopted all recently issued accounting pronouncements. The
adoption of the accounting pronouncements, including those not yet effective, is
not anticipated to have a material effect on the financial position or results
of operations of the Company.
NOTE 3. INCOME TAXES
The Company provides for income taxes under ASC Topic 740 which requires the use
of an asset and liability approach in accounting for income taxes. Deferred tax
assets and liabilities are recorded based on the differences between the
financial statement and tax bases of assets and liabilities and the tax rates in
effect currently.
ASC Topic 740 requires the reduction of deferred tax assets by a valuation
allowance if, based on the weight of available evidence, it is more likely than
not that some or all of the deferred tax assets will not be realized. In the
Company's opinion, it is uncertain whether they will generate sufficient taxable
income in the future to fully utilize the net deferred tax asset. Details for
the period ending May 31, 2010:
Period ending May 31, 2010
- --------------------- ------
Deferred Tax Asset ..... $ 0.00
Valuation Allowance .... 0.00
Current Taxes Payable .. 0.00
------
Income Tax Expense ..... $ 0.00
======
F-7
Hidden Ladder, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(MAY 31, 2010)
NOTE 4. STOCKHOLDERS' EQUITY
Common Stock
- ------------
There are 300,000,000 Common Shares at $0.0001 par value authorized with
9,000,000 Issued and Outstanding as of May 31, 2010.
NOTE 5. RELATED PARTY TRANSACTIONS
The officer and director 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.
NOTE 6. GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. For the period March 1, 2010 through
May 31, 2010 the Company has had a net loss of $937. As of May 31, 2010, the
Company has not emerged from the development stage. In view of these matters,
recoverability of any asset amounts shown in the accompanying financial
statements is dependent upon the Company's ability to begin operations and to
achieve a level of profitability. Since inception, the Company has financed its
activities principally from the sale of equity securities. The Company intends
on financing its future development activities and its working capital needs
largely from loans and the sale of public equity securities with some additional
funding from other traditional financing sources, including term notes, until
such time that funds provided by operations are sufficient to fund working
capital requirements.
NOTE 7. CONCENTRATIONS OF RISKS
Cash Balances
- -------------
The Company maintains its cash in institutions insured by the Federal Deposit
Insurance Corporation (FDIC). All other deposit accounts at FDIC-insured
institutions were insured up to at least $250,000 per depositor until December
31, 2009. On January 1, 2010, FDIC deposit insurance for all deposit accounts,
except for certain retirement accounts, returned to $100,000 per depositor. The
Company had no deposits in excess of insured amounts as of May 31, 2010.
NOTE 8. SUBSEQUENT EVENTS
We have evaluated events and transactions that occurred subsequent to May 31,
2010 through July 2, 2010, the date the financial statements were issued, for
potential recognition or disclosure in the accompanying financial statements.
Other than the disclosures above, we did not identify any events or transactions
that should be recognized or disclosed in the accompanying financial statements.
F-8
LAKE & ASSOCIATES, CPA'S
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Hidden Ladder, Inc.
We have audited the accompanying balance sheets of Hidden Ladder, Inc. (a
development stage Company) (the "Company") as of February 28, 2010, and the
related statements of operations, stockholders' deficit, and cash flows for the
period February 23, 2010 (inception) through February 28, 2010. Hidden Ladder,
Inc.'s management is responsible for these financial statements. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit 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 also 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 Hidden Ladder, Inc. (a
development stage Company) as of February 28, 2010, and the results of its
operations and its cash flows for the period February 23, 2010 (inception)
through February 28, 2010, in conformity with accounting principles generally
accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed further in Note 6, the
Company has been in the development stage since its inception (February 23,
2010) and continues to incur significant losses. The Company's viability is
dependent upon its ability to obtain future financing and the success of its
future operations. These factors raise substantial doubt as to the Company's
ability to continue as a going concern. Management's plan in regard to these
matters is also described in Note 6. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Lake & Associates, CPA's LLC
Lake & Associates, CPA's LLC
Boca Raton, FL
March 24, 2010
1905 Wright Boulevard 20283 State Road 7, Suite 300
Schaumburg, IL 60193 Boca Raton, Florida 33498
Phone: 847.524.0800 Phone: 866.982.9874
Fax: 847.524.1655 Fax: 561.982.7985
F-9
Hidden Ladder, Inc.
(A Development Stage Company)
Balance Sheet
February 28, 2010
ASSETS
------
FEBRUARY 28,
2010
------------
CURRENT ASSETS
Cash and cash equivalents ..................................... $ 9,000
-----------
Total current assets ........................................ 9,000
-----------
-----------
TOTAL ASSETS .................................................. $ 9,000
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Accounts payable & Accrued liabilities ........................ $ 3,600
-----------
Total liabilities ........................................... 3,600
-----------
STOCKHOLDERS' EQUITY
Capital Stock (Note 4)
Authorized:
300,000,000 common shares, $0.0001 par value
Issued and outstanding shares:
9,000,000 ................................................. $ 900
Additional paid-in capital .................................... 8,100
Deficit accumulated during the development stage .............. (3,600)
-----------
Total Stockholders' Equity .................................... 5,400
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .................... $ 9,000
===========
The accompanying notes are an integral part of these financial statements.
F-10
Hidden Ladder, Inc.
(A Development Stage Company)
Statement of Operations
For the Period February 23, 2010 (Inception) to February 28, 2010
For the Period
from Inception
February 23,
2010 to
February 28,
2010
--------------
REVENUES ...................................................... $ -
-------------
EXPENSES
General & Administrative .................................... 100
Professional Fees ........................................... $ 3,500
-------------
Loss Before Income Taxes ...................................... $ (3,600)
-------------
Provision for Income Taxes .................................... -
-------------
Net Loss ...................................................... $ (3,600)
=============
PER SHARE DATA:
Basic and diluted loss per common share ..................... $ -
=============
Basic and diluted weighted Average Common shares outstanding 9,000,000
=============
The accompanying notes are an integral part of these financial statements.
F-11
Hidden Ladder, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity (Deficiency)
Deficit
Accumulated
Common Stock Additional During the
------------------ Paid-in Development
Shares Amount Capital Stage Total
--------- ------ ---------- ----------- --------
Inception - February 23, 2010 ......... - $ - $ - $ - $ -
Common shares issued to Founder for
cash at $0.001 per share (par value
$0.0001) on February 23, 2010 ...... 9,000,000 900 8,100 - 9,000
Loss for the period from inception
on February 23, 2010 to
February 28, 2010 .................. - - - (3,600) (3,600)
--------- ------ ---------- ---------- --------
Balance - February 28, 2010 ........... 9,000,000 $ 900 $ 8,100 $ (3,600) $ 5,400
========= ====== ========== ========== ========
The accompanying notes are an integral part of these financial statements.
F-12
Hidden Ladder, Inc.
(A Development Stage Company)
Statement of Cash Flow
For the Period February 23, 2010 (Inception) to February 28, 2010
For the Period
from Inception
February 23,
2010 to
February 28,
2010
--------------
OPERATING ACTIVITIES
Net Loss ..................................................... $ (3,600)
-------------
Changes in Operating Assets and Liabilities:
Increase (decrease) in accounts payable
and accrued liabilities ................................... 3,600
-------------
Net cash used in operating activities ........................ -
-------------
FINANCING ACTIVITIES
Common stock issued for cash ................................. 9,000
-------------
Net cash provided by financing activities .................... 9,000
-------------
INCREASE IN CASH AND CASH EQUIVALENTS .......................... 9,000
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ............... -
-------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ..................... $ 9,000
=============
Supplemental Cash Flow Disclosures:
Cash paid for:
Interest expense ........................................... $ -
=============
Income taxes ............................................... $ -
=============
The accompanying notes are an integral part of these financial statements.
F-13
Hidden Ladder, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 23, 2010 (INCEPTION) TO FEBRUARY 28, 2010
NOTE 1. GENERAL ORGANIZATION AND BUSINESS
Hidden Ladder, Inc. ("Hidden Ladder") is a development stage company,
incorporated in the State of Florida on February 23, 2010. Hidden Ladder intends
to design a hidden escape ladder for homeowners. It is intended to provide the
homeowner comfort knowing that if there is a fire in their home they will be
able to safely escape from the 2nd story. The ladder is intended to be both
durable and simple to use. It should neatly fold up and hang under the window
for easy accessibility.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
Accounting Basis
- ----------------
These financial statements are prepared on the accrual basis of accounting in
conformity with accounting principles generally accepted in the United States of
America.
Cash and Cash Equivalents
- -------------------------
For the purpose of the financial statements cash equivalents include all highly
liquid investments with maturity of three months or less.
Earnings (Loss) per Share
- -------------------------
The basic earnings (loss) per share are calculated by dividing the Company's net
income available to common shareholders by the weighted average number of common
shares outstanding during the year. The diluted earnings (loss) per share are
calculated by dividing the Company's net income (loss) available to common
shareholders by the diluted weighted average number of shares outstanding during
the year. The diluted weighted average number of shares outstanding is the basic
weighted number of shares adjusted as of the first of the year for any
potentially dilutive debt or equity. There are no diluted shares outstanding.
Dividends
- ---------
The Company has not adopted any policy regarding payment of dividends. No
dividends have been paid during the period shown, and none are contemplated in
the near future.
F-14
Hidden Ladder, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 23, 2010 (INCEPTION) TO FEBRUARY 28, 2010
Income Taxes
- ------------
The Company adopted FASB ASC 740, Income Taxes, at its inception deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred tax
assets, including tax loss and credit carryforwards, and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date.
Deferred income tax expense represents the change during the period in the
deferred tax assets and deferred tax liabilities. The components of the deferred
tax assets and liabilities are individually classified as current and
non-current based on their characteristics. Deferred tax assets are reduced by a
valuation allowance when, in the opinion of management, it is more likely than
not that some portion or all of the deferred tax assets will not be realized. No
deferred tax assets or liabilities were recognized as of February 28, 2010.
Advertising
- -----------
The Company will expense advertising as incurred. The advertising since
inception has been $0.00.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect 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 revenue and expenses during
the reporting period. Actual results could differ from those estimates.
Revenue and Cost Recognition
- ----------------------------
The Company has no current source of revenue; therefore the Company has not yet
adopted any policy regarding the recognition of revenue or cost.
Property
- --------
The company does not own any real estate or other properties. The company's
office is located 2803 Isle Street, Rocklin CA 95765. Our contact number is
530.409.0453. The business office is located at the home of David Johnson, the
CEO of the company, at no charge to the company.
F-15
Hidden Ladder, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 23, 2010 (INCEPTION) TO FEBRUARY 28, 2010
Recently Issued Accounting Pronouncements
- -----------------------------------------
The Company has adopted all recently issued accounting pronouncements. The
adoption of the accounting pronouncements, including those not yet effective, is
not anticipated to have a material effect on the financial position or results
of operations of the Company.
NOTE 3. INCOME TAXES
The Company provides for income taxes under ASC Topic 740 which requires the use
of an asset and liability approach in accounting for income taxes. Deferred tax
assets and liabilities are recorded based on the differences between the
financial statement and tax bases of assets and liabilities and the tax rates in
effect currently.
ASC Topic 740 requires the reduction of deferred tax assets by a valuation
allowance if, based on the weight of available evidence, it is more likely than
not that some or all of the deferred tax assets will not be realized. In the
Company's opinion, it is uncertain whether they will generate sufficient taxable
income in the future to fully utilize the net deferred tax asset. Details for
the last three years follow:
Year Ended February 28, 2010
- ----------------------- ------
Deferred Tax Asset ..... $ 0.00
Valuation Allowance .... 0.00
Current Taxes Payable .. 0.00
------
Income Tax Expense ..... $ 0.00
======
The Company has filed no income tax returns since inception.
NOTE 4. STOCKHOLDERS' EQUITY
Common Stock
- ------------
On February 23, 2010, the Company issued 9,000,000 of its $0.0001 par value
common stock for $9,000 cash to the founder of the Company. The issuance of the
shares was made to the sole officer and director of the Company and an
individual who is a sophisticated and accredited investor, therefore, the
issuance was exempt from registration of the Securities Act of 1933 by reason of
Section 4 (2) of that Act.
There are 300,000,000 Common Shares at $0.0001 par value Authorized with
9,000,000 Issued and Outstanding as of February 28, 2010.
F-16
Hidden Ladder, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 23, 2010 (INCEPTION) TO FEBRUARY 28, 2010
NOTE 5. RELATED PARTY TRANSACTIONS
The officer and director 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.
NOTE 6. GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. For the period February 23, 2010 (date
of inception) through February 28, 2010 the Company has had a net loss of
$3,600. As of February 28, 2010, the Company has not emerged from the
development stage. In view of these matters, recoverability of any asset amounts
shown in the accompanying financial statements is dependent upon the Company's
ability to begin operations and to achieve a level of profitability. Since
inception, the Company has financed its activities principally from the sale of
equity securities. The Company intends on financing its future development
activities and its working capital needs largely from loans and the sale of
public equity securities with some additional funding from other traditional
financing sources, including term notes, until such time that funds provided by
operations are sufficient to fund working capital requirements.
NOTE 7. CONCENTRATIONS OF RISKS
Cash Balances
- -------------
The Company maintains its cash in institutions insured by the Federal Deposit
Insurance Corporation (FDIC). All other deposit accounts at FDIC-insured
institutions were insured up to at least $250,000 per depositor until December
31, 2009. On January 1, 2010, FDIC deposit insurance for all deposit accounts,
except for certain retirement accounts, returned to $100,000 per depositor. The
Company had no deposits in excess of insured amounts as of February 28, 2010.
NOTE 8. SUBSEQUENT EVENTS
The Company has evaluated subsequent events through March 24 2010, the date
which the financial statements were available to be issued, and no such events
have occurred.
F-17
DEALER PROSPECTUS DELIVERY OBLIGATION
Until _______________, (90 days after the effective date of this prospectus) all
dealers that effect transactions in these securities, whether or not
participating in this offering, may be required to deliver a prospectus. This is
in addition to the dealers' obligation to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or subscriptions.
PART II. INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The registrant will pay for all expenses incurred by this offering. Whether or
not all of the offered shares are sold, these expenses are estimated as follows:
SEC Filing Fee and Printing .. $ 1,000 *
Legal Services ............... 3,500
Transfer Agent ............... 500
-------
TOTAL ................... $ 5,000
-------
* estimate
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
To the fullest extent permitted by the Florida Business Corporation Act, the
Corporation shall indemnify, or advance expenses to, any person made, or
threatened to be made, a party to any action, suit or proceeding by reason of
the fact that such person (i) is or was a director of the Corporation; (ii) is
or was serving at the request of the Corporation as a director of another
corporation, provided that such person is or was at the time a director of the
Corporation; or (iv)is or was serving at the request of the Corporation as an
officer of another Corporation, provided that such person is or was at the time
a director of the corporation or a director of such other corporation, serving
at the request of the Corporation. Unless otherwise expressly prohibited by the
Florida Business Corporation Act, and except as otherwise provided in the
previous sentence, the Board of Directors of the Corporation shall have the sole
and exclusive discretion, on such terms and conditions as it shall determine, to
indemnify, or advance expenses to, any person made, or threatened to be made, a
party to any action, suit, or proceeding by reason of the fact such person is or
was an officer, employee or agent of the Corporation as an officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise.
Our bylaws provide for the indemnification of our directors and officers to the
fullest extent permitted by the Florida Business Corporation Act. We are not,
however, required to indemnify any director or officer in connection with any
(a) willful misconduct or (b) a conscious disregard for the best interests of
the corporation in a proceeding by or in the right of the corporation to procure
a judgment in its favor or in a proceeding by or in the right of a shareholder
toward or on behalf of us in the performance of his or his duties as a director
or officer. We are required to advance, prior to the final disposition of any
proceeding, promptly on request, all expenses incurred by any director or
officer in connection with that proceeding on receipt of any undertaking by or
on behalf of that director or officer to repay those amounts if it should be
determined ultimately that he or she is not entitled to be indemnified under our
bylaws or otherwise.
We have been advised that, in the opinion of the SEC, any indemnification for
liabilities arising under the Securities Act of 1933 is against public policy,
as expressed in the Securities Act, and is, therefore, unenforceable.
II-1
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
(a) Prior sales of common shares
Hidden Ladder, Inc. is authorized to issue up to 300,000,000 shares of common
stock with a par value of $0.0001. For the period ended February 28, 2010, we
had issued 9,000,000 common shares to our sole officer and director for a total
consideration of $9,000. The issuance of the shares was made to the sole officer
and director of the Company and an individual who is a sophisticated and
accredited investor, therefore, the issuance was exempt from registration of the
Securities Act of 1933 by reason of Section 4 (2) of that Act.
Hidden Ladder, Inc. is not listed for trading on any securities exchange in the
United States, and there has been no active market in the United States or
elsewhere for the common shares.
During the past year, Hidden Ladder, Inc. has sold the following securities
which were not registered under the Securities Act of 1933, as amended:
For the period ended February 28, 2010, Hidden Ladder, Inc. issued 9,000,000
shares of common stock to the sole officer and director for cash proceeds of
$9,000 at 0.001 per share.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The following exhibits are filed as part of this registration statement,
pursuant to Item 601 of Regulation K. All exhibits have been previously filed
unless otherwise noted.
EXHIBIT NO. DOCUMENT DESCRIPTION
- ----------- --------------------
3.1 Articles of Incorporation of Hidden Ladder, Inc.*
3.2 Bylaws of Hidden Ladder, Inc.*
4.1 Specimen Stock Certificate of Hidden Ladder, Inc.*
5.1 Opinion of Counsel.*
14.1 Code of Business Conduct and Ethics.*
23.1 Consent of Accountants.**
23.2 Consent of Counsel.*
99.1 Subscription Documents and Procedure of Hidden Ladder, Inc.*
_________________
* Previously Filed
** Filed herewith
II-2
(B) DESCRIPTION OF EXHIBITS
EXHIBIT 3.1 Articles of Incorporation of Hidden Ladder, Inc.
EXHIBIT 3.2 Bylaws of Hidden Ladder, Inc.
EXHIBIT 4.1 Specimen Stock Certificate of Hidden Ladder, Inc.
EXHIBIT 5.1 Opinion of Counsel.
EXHIBIT 14.1 Code of Business Conduct and Ethics.
EXHIBIT 23.1 Consent of Accountants
EXHIBIT 23.2 Consent of Counsel.
EXHIBIT 99.1 Subscription Documents and Procedure of Hidden Ladder, Inc.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
i. To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
ii. To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in the volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more
than 20% change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement.
iii. To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
2. That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any of
the securities being registered that remain unsold at the termination of
the offering.
II-3
4. That, for the purpose of determining liability under the Securities Act of
1933 to any purchaser:
i. If the registrant is subject to Rule 430C, each prospectus filed
pursuant to Rule 424(b) as part of a registration statement relating
to an offering, other than registration statements relying on Rule
430B or other than prospectuses filed in reliance on Rule 430A,
shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness.
Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part
of the registration statement will, as to a purchaser with a time of
contract of sale prior to such first use, supersede or modify any
statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any such
document immediately prior to such date of first use.
5. That, for the purpose of determining liability of the registrant under the
Securities Act of 1933 to any purchaser in the initial distribution of the
securities: The undersigned registrant undertakes that in a primary
offering of securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell
the securities to the purchaser, if the securities are offered or sold to
such purchaser by means of any of the following communications, the
undersigned registrant will be a seller to the purchaser and will be
considered to offer or sell such securities to such purchaser:
i. Any preliminary prospectus or prospectus of the undersigned
registrant relating to the offering required to be filed pursuant to
Rule 424;
ii. Any free writing prospectus relating to the offering prepared by or
on behalf of the undersigned registrant or used or referred to by
the undersigned registrant;
iii. The portion of any other free writing prospectus relating to the
offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the
undersigned registrant; and
iv. Any other communication that is an offer in the offering made by the
undersigned registrant to the purchaser.
Insofar as indemnification for liabilities arising under the Securities Act of
1933, may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements of filing on this Form S-1. Furthermore, the registrant has
authorized this registration statement and has duly caused this Form S-1
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Rocklin, CA 95765, on this 17th day of August, 2010.
Hidden Ladder, Inc.
/s/ David Johnson
- -----------------
David Johnson
President, Chief Executive Officer, Sole Member of the Board of Directors
Chief Financial Officer
Principal Accounting Officer
Secretary
Know all men by these present, that each person whose signature appears below
constitutes and appoints David Johnson, as agent, with full power of
substitution, for his and in his name, place and stead, in any and all
capacities, to sign any and all amendments, including post-effective amendments,
to this registration statement, and to file the same, therewith, with the
Securities and Exchange Commission, and to make any and all state securities law
filings, granting unto said attorney-in-fact and agent, full power and authority
to do and perform each and every act and thing requisite or necessary to be done
in about the premises, as fully to all intents and purposes as he might or could
do in person, hereby ratifying the confirming all that said attorney-in-fact and
agent, or any substitute or substitutes, may lawfully do or cause to be done by
virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this
Form S-1 registration statement has been signed by the following persons in the
capacities and on the dates indicated:
/s/ David Johnson August 17, 2010
- -----------------
President, Chief Executive Officer, Sole Member of the Board of Directors
Chief Financial Officer
Principal Accounting Officer
Secretary
II-5