0001079974-19-000017.txt : 20190117 0001079974-19-000017.hdr.sgml : 20190117 20190117154301 ACCESSION NUMBER: 0001079974-19-000017 CONFORMED SUBMISSION TYPE: 1-A/A PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 20190117 DATE AS OF CHANGE: 20190117 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Ultimate Holdings Corp CENTRAL INDEX KEY: 0001713757 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 822274221 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 1-A/A SEC ACT: 1933 Act SEC FILE NUMBER: 024-10813 FILM NUMBER: 19530940 BUSINESS ADDRESS: STREET 1: 4663 SOUTH ENTERPRISE STREET CITY: BOISE STATE: ID ZIP: 83705 BUSINESS PHONE: 6123860606 MAIL ADDRESS: STREET 1: 4663 SOUTH ENTERPRISE STREET CITY: BOISE STATE: ID ZIP: 83705 1-A/A 1 primary_doc.xml 1-A/A LIVE 0001713757 XXXXXXXX 024-10813 Ultimate Holdings Corp NV 2017 0001713757 4213 82-2274221 4 0 4663 South Enterprise Street BOISE ID 83705 6123860606 William Rieser Other 10449.00 0.00 0.00 0.00 10449.00 55.00 0.00 55.00 10394.00 10449.00 0.00 0.00 0.00 -7306.00 0.00 0.00 common 16627175 65339W203 otclink preferred 0 65339W203 none none 0 65339W203 none true true Tier1 Unaudited Equity (common or preferred stock) Y N Y Y N N 1500000 16627175 2.0000 3000000.00 0.00 0.00 0.00 3000000.00 E Dowling 10000.00 2980000.00 other expenses such as printing and mailing to total $20,000 true NV Ultimate Holdings Corp common 16000 0 16000 at one dollar per share 4 2 sold to friends and business associates without public solicitation PART II AND III 2 partiiandiii.htm PART II AND III

 

AMENDMENT4 to PART II AND III

 

 

 An offering statement pursuant to Regulation A relating to these securities has been filed with the Securities and Exchange Commission.  Information contained in this Preliminary Offering Circular is subject to completion or amendment.  These securities may not be sold nor may offers to buy be accepted before the offering statement filed with the Commission is qualified.  This Preliminary Offering Circular shall not constitute an offer to sell or the solicitation of an offer to buy nor may there be any sales of these securities in any state in which such offer, solicitation or sale would be unlawful before registration or qualification under the laws of any such state.  We may elect to satisfy our obligation to deliver a Final Offering circular by sending you a notice within two business days after the completion of our sale to you that contains the URL where the Final Offering Circular or the offering statement in which such Final Offering Circular was filed may be obtained.


OFFERING CIRCULAR


ULTIMATE HOLDINGS CORPORATION


1,500,000 Shares of Common Stock


We are offering up to 1,500,000 shares of our common stock in a best efforts, no minimum offering. The proceeds from the sale of these shares will be available for immediate use by the Company. Prior to this qualification, there has been only a limited public trading market for the common stock of the Company. Trading of our common stock on OTC Link under the symbol NXTN is limited and sporadic, so that investors cannot expect that they will be able to readily liquidate their investment. The Company will sell the common stock offered hereby at a fixed price of $2.00 per share for the duration of the offering.


Generally, no sale may be made to you in this offering if the aggregate purchase price you pay is more than 10% of the greater of your annual income or net worth.  Different rules apply to accredited investors and non-natural persons.  Before making any representation that your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(C) of Regulation A.  For general information on investing, we encourage you to refer to www.investor.gov.



 

Number of Shares

Offering Price

Underwriting Discounts & Commissions (1)

Proceeds to the Company

Per Share

1

$2.00

$0.00

$ 2.00

Maximum

1,500,000

$3,000,000

$0.00

$3,000,000


 (1) This offering is made directly by the Company and no brokers will be employed. These amounts do not includes legal and other expenses of this offering, estimated at $20,000, to be borne by the Company.


The securities offered in this Offering Circular involve a high degree of risk. You should consider the risk factors beginning on page 5 before purchasing our common stock.


The United States Securities and Exchange Commission does not pass upon the merits of or give its approval to any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering circular or other solicitation materials.  These securities are offered pursuant to an exemption from registration with the Commission; however, the Commission has not made an independent determination that the securities offered are exempt from registration.


We are providing the disclosure in the format prescribed by Part I of the S-1 format of Form 1-A.

Our address is 4663 S. Enterprise St., Boise, ID 83705 and our telephone number is (612) 386-0606;  

Website address: www.ultimateholdingscorp.com

 

The date of this [Preliminary] Offering Circular is January _____, 2019 The offering will commence on __________, 2019






 

 

 

 

 

 

 

 

Unless otherwise specified, the information in this Offering Circular is set forth as of January _____, 2019, and we anticipate that changes in our affairs will occur after such date. We have not authorized any person to give any information or to make any representations, other than as contained in this Offering Circular, in connection with the offer contained in this Offering Circular. If any person gives you any information or makes representations in connection with this offer, do not rely on it as information we have authorized. This Offering Circular is not an offer to sell our common stock in any state or other jurisdiction to any person to whom it is unlawful to make such offer.





2



OFFERING CIRCULAR SUMMARY


Please read this offering circular carefully. It describes our business, our financial condition and results of operations. We have prepared this offering circular so that you will have the information necessary to make an informed investment decision.


You should rely only on information contained in this offering circular. We have not authorized any other person to provide you with different information. This offering circular is not an offer to sell, nor is it seeking an offer to buy, these securities in any state where the offer or sale is not permitted. The information in this offering circular is complete and accurate as of the date on the front cover, but the information may have changed since that date.  See Cautionary Note Regarding Forward Looking Statements on page 12.


Our Company


Ultimate Holdings Corporation (“we,” “Ultimate,” or the “Company”) was formed on July 10, 2017 under the name UHC Corporation. The Company is the product of a holding company reorganization effected under Oklahoma law, from a corporation formerly knowns as Next 10, Inc. and trading under the symbol NXTN.  We intend to file for a symbol change with FINRA. The name change to Ultimate Holdings Corporation was effected on July 21, 2017. See discussion under the caption “The Reorganization.”

Business Strategy

Ultimate is headquartered in Boise, Idaho, and is newly organized to engage in truck shipping of refrigerated and frozen food products, initially concentrating in Idaho and surroundings states. 81% of everything that is used, or consumed, in our country is hauled with a big truck.  The balance of the product is moved by rail, air, ship and pipeline.  Our business model involves engaging carefully selected independent drivers, assisting them in acquiring truck tractors under capital lease financing, and assisting them in complying with the ever-increasing regulatory burdens associated with freight transportation. Management plans to bid on freight contracts and hire drivers as fast as it can obtain cash for acquisition of equipment.


The US trucking industry currently is suffering from a serious shortage of qualified drivers. Our business model, we believe, increases the monthly income which truckers can achieve based on our management assistance. We expect to earn revenues from freight shipments as well as receiving revenue from leasing equipment to our drivers.


Our executive offices are located at 4663 S. Enterprise St., Boise, ID 83705 and our telephone number is (612) 386-0606.


The Company is an emerging growth company under the Jumpstart Our Business Startups Act.

 

The Company shall continue to be deemed an emerging growth company until the earliest of--

 

(A) the last day of the fiscal year of the issuer during which it had total annual gross revenues of $1,070,000,000  (as such amount is indexed for inflation every 5 years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, setting the threshold to the nearest 1,000,000) or more;

 

(B) the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the issuer pursuant to an effective registration statement under this title;

 

(C) the date on which such issuer has, during the previous 3-year period, issued more than $1,000,000,000 in non-convertible debt; or

 

(D) the date on which such issuer is deemed to be a ‘large accelerated filer’, as defined in section 240.12b-2 of Title 17, Code of Federal Regulations, or any successor thereto.

 

As an emerging growth company, the Company is exempt from Section 404(b) of Sarbanes Oxley. Section 404(a) requires Issuers to publish information in their annual reports concerning the scope and adequacy of the internal control structure and procedures for financial reporting. The statement in the annual reports shall also assess the effectiveness of such internal controls and procedures. The Company believes its internal controls and procedures are not effective due to two identified material weaknesses: a) we lack an audit committee and b) we have limited or no segregation of duties.

 

3

Section 404(b) requires that the registered accounting firm shall, in the same report, attest to and report on the assessment on the effectiveness of the internal control structure and procedures for financial reporting.

 

As an emerging growth company, the Company is exempt from Section 14A and B of the Securities Exchange Act of 1934 which require the shareholder approval of executive compensation and golden parachutes. As an emerging growth company the company is exempt from Section 14A and B of the Securities Exchange Act of 1934 which require the shareholder approval of executive compensation and golden parachutes.

 

The Company has irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the Act. 


The Offering


This Offering Circular covers up to 1,500,000 shares to be issued and sold by the company at a price of $2.00 per share in a direct public offering.


ABOUT THIS OFFERING

 

 

 

 

Securities Being Offered

Up to 1,500,000 shares of common stock of Ultimate at a price of $2.00 per share. We currently have 16,627,175 shares outstanding.

 

 

 

 

Terms of the Offering

Ultimate is offering shares of its common stock on a best efforts, no minimum offering. This is a  direct offering to the public.

 

 

Termination of the Offering

The offering will conclude when Ultimate has sold all of the 1,500,000 shares of common stock offered, or one year from the date of this Offering Circular, which ever is earlier. The offering may be terminated at any time without notice.

 

 

Risk Factors

An investment in our common stock is highly speculative and involves a high degree of risk. See Risk Factors beginning on page 5.




4



RISK FACTORS


An investment in our common stock is highly speculative, involves a high degree of risk, and should be made only by investors who can afford a complete loss of their investment. You should carefully consider the following risk factors, together with the other information in this Offering Circular, including our financial statements and the related notes, before you decide to buy our common stock. If any of the following risks actually occur, our business, financial condition, or results of operations could be materially adversely affected, the trading of our common stock could decline, and you may lose all or part of your investment therein.


Risks Relating to the Early Stage of our Company


We are at a very early operational stage and our success is subject to the substantial risks inherent in the establishment of a new business venture.


The implementation of our business strategy is in a very early stage. Our business and operations should be considered to be in a very early stage and subject to all of the risks inherent in the establishment of a new business venture. Accordingly, our intended business and operations may not prove to be successful in the near future, if at all. Any future success that we might enjoy will depend upon many factors, several of which may be beyond our control, or which cannot be predicted at this time, and which could have a material adverse effect upon our financial condition, business prospects and operations and the value of an investment in our company.


We have a very limited operating history and our business plan is unproven and may not be successful.


Our company was formed on July 10, 2017. We have not yet begun full scale operations under the current business model. We have not proven that our business model will allow us to generate a profit.


We have suffered operating losses since inception and we may not be able to achieve profitability.


We had an accumulated deficit of ($7,036) as of December 31, 2017 and we expect to continue to incur in the foreseeable future related to the completion of development and commercialization of our program. As a result, we are sustaining substantial operating and net losses, and it is possible that we will never be able to sustain or develop the revenue levels necessary to attain profitability.


We may have difficulty raising additional capital, which could deprive us of necessary resources.


We expect to continue to devote significant capital resources for working capital purposes. In order to support the initiatives envisioned in our business plan, we will need to raise additional funds through public or private debt or equity financing, collaborative relationships or other arrangements. Our ability to raise additional financing depends on many factors beyond our control, including the state of capital markets, the market price of our common stock and the development or prospects for development of real estate projects. Because our common stock is not listed on a major stock market, many investors may not be willing or allowed to purchase it or may demand steep discounts. Sufficient additional financing may not be available to us or may be available only on terms that would result in further dilution to the current owners of our common stock.


We expect to raise additional capital during 2017 and 2018 but we do not have any firm commitments from any party. If we are unsuccessful in raising funds in this offering, or other additional capital, or the terms of raising such capital are unacceptable, we may have to modify our business plan and/or significantly curtail our planned activities and other operations.


There are substantial doubts about our ability to continue as a going concern and if we are unable to continue our business, our shares may have little or no value.


The company’s ability to become a profitable operating company is dependent upon its ability to generate revenues and/or obtain financing adequate to acquire truck tractors, and obtaining a level of revenues adequate to support our cost structure. These factors have raised substantial doubts about our ability to continue as a going concern. We plan to attempt to raise additional equity capital by selling shares in this offering and, if necessary, through one or more private placement or public offerings. However, the doubts raised, relating to our ability to continue as a going concern, may make our shares an unattractive investment for potential investors. These factors, among others, may make it difficult to raise any additional capital.





5




 

 

Our Articles of Incorporation limit the liability of our officers and directors therefore limiting shareholder actions.

The company’s articles state in part “[a] director [or] officer of the corporation shall not be personally liable to this corporation or its stockholders for damages for breach of fiduciary duty as a director or officer…” therefore a shareholder may be limited in actions which can be taken against the officers and directors. The company does not believe and it is the policy of the SEC that this limitation does not apply to federal securities laws. The exclusive forum for disputes related to a subscription herein is Clark County, Nevada.

The terms of the subscription agreement may deter the initiation of actions against the company by subscribers.

The company’s subscription agreement notes the following: “the party prevailing in such litigation shall be entitled… to a reasonable sum as and for their or his or its attorney’s fees and costs in such litigation” and provides an exclusive forum provision for claims brought by the undersigned of the Subscription Agreement with respect to the Subscription Agreement. These sections restrict the amount of potential attorneys fees such the full cost of a party to an action in relation to the subscription agreement may not be covered and limit where such action can be initiated which may impose added difficulty and cost to the initiation of any such action. 

Risks Relating to Our Business


Our business is subject to general economic, credit, business, and regulatory factors affecting the truckload industry that are largely beyond our control, any of which could have a materially adverse effect on our results of operations.


The truckload industry is highly cyclical, and our business is dependent on a number of factors that may have a materially adverse effect on our results of operations, many of which are beyond our control.  We believe that some of the most significant of these factors include (i) excess tractor and trailer capacity in the trucking industry in comparison with shipping demand; (ii) declines in the resale value of used equipment; (iii) strikes, work stoppages, or work slowdowns at our facilities or at customer, port, border crossing, or other shipping-related facilities; (iv) increases in interest rates, fuel, taxes, tolls, and license and registration fees; and (v) rising costs of healthcare.


We may also be affected by (i) recessionary economic cycles, such as the period from 2007 through 2009 and the 2016 freight environment, which was characterized by weak demand and downward pressure on rates; (ii) changes in customers’ inventory levels and in the availability of funding for their working capital; (iii) changes in the way our customers choose to source or utilize our services; and (iv) downturns in our customers’ business cycles. Economic conditions may adversely affect our customers and their demand for and ability to pay for our services. Customers encountering adverse economic conditions represent a greater potential for loss and we may be required to increase our allowance for doubtful accounts.


Economic conditions that decrease shipping demand or increase the supply of available tractors and trailers can exert downward pressure on rates and equipment utilization, thereby decreasing asset productivity. The risks associated with these factors are heightened when the U.S. economy is weakened, such as the period from 2007 through 2009. Some of the principal risks during such times, which risks we have experienced during prior recessionary periods, are as follows:


/

●

we may experience a reduction in overall freight levels, which may impair our asset utilization;

 

 

●

freight patterns may change as supply chains are redesigned, resulting in an imbalance between our capacity and our customers' freight demand;

 

 

●

customers may solicit bids for freight from multiple trucking companies or select competitors that offer lower rates from among existing choices in an attempt to lower their costs, and we might be forced to lower our rates or lose freight;

 

 

●

we may be forced to accept freight from freight brokers, where freight rates are typically lower, or may be forced to incur more non-revenue miles to obtain loads; and

 

 

●

lack of access to current sources of credit or lack of lender access to capital, leading to an inability to secure credit financing on satisfactory terms, or at all.

  

We also are subject to potential increases in various costs and other events that are outside of our control that could materially reduce our profitability if we are unable to increase our rates sufficiently.  Such cost increases include, but are not limited to, fuel and energy prices, driver and office employee wages, purchased transportation costs, taxes and interest rates, tolls, license and registration fees, insurance premiums and claims, revenue equipment and related maintenance costs, tires and other components, and healthcare and other benefits for our employees.  We could be affected by strikes or other work stoppages at our service centers or at customer, port, border, or other shipping locations. Further, we may not be able to appropriately adjust our costs and staffing levels to changing market demands. In periods of rapid change, it is more difficult to match our staffing level to our business needs.

Changing impacts of regulatory measures could impair our operating efficiency and productivity, decrease our operating revenues and profitability, and result in higher operating costs. In addition, declines in the resale value of revenue equipment can also affect our profitability and cash flows. From time-to-time, various U.S. federal, state, or local taxes are also increased, including taxes on fuels.  We cannot predict whether, or in what form, any such increase applicable to us will be enacted, but such an increase could adversely affect our results of operations and profitability.

In addition, we cannot predict future economic conditions, fuel price fluctuations, or how consumer confidence could be affected by actual or threatened armed conflicts or terrorist attacks, government efforts to combat terrorism, military action against a foreign state or group located in a foreign state, or heightened security requirements.  Enhanced security measures in connection with such events could impair our operating efficiency and productivity and result in higher operating costs.

 

 

6

 

 

Insurance and claims expenses could significantly impact our earnings.

We plan to maintain insurance with licensed insurance carriers.  Although we believe our aggregate insurance limits should be sufficient to cover reasonably expected claims, it is possible that the amount of one or more claims could exceed our aggregate coverage limits.  If any claim were to exceed our coverage, we would bear the excess.  Insurance carriers have raised premiums for many businesses, including transportation companies.  As a result, our insurance and claims expense could increase.  Our results of operations and financial condition could be materially and adversely affected if (i) cost per claim, premiums, or the number of claims significantly exceeds our coverage limits or retention amounts; (ii) we experience a claim in excess of our coverage limits; (iii) our insurance carriers fail to pay on our insurance claims; or (iv) we experience a claim for which coverage is not provided. Healthcare legislation and inflationary cost increases could also negatively affect our financial results.

Healthcare legislation and inflationary cost increases also could negatively impact financial results by increasing annual employee healthcare costs.  We cannot presently determine the extent of the impact healthcare costs will have on our financial performance.  In addition, rising healthcare costs could force us to make changes to existing benefit programs, which could negatively impact our ability to attract and retain employees.

 

We expect to have significant ongoing capital requirements that could affect our profitability if we are unable to generate sufficient cash from operations and obtain financing on favorable terms.

The truckload industry is capital intensive, and our policy of operating newer equipment will require us to expend significant amounts annually.  We expect to pay for projected capital expenditures with cash flows from operations or financing available under any line of credit which we may be able to obtain. However, we do not believe that we will be able to obtain any bank line of credit until we achieve significant sales.   If we were unable to generate sufficient cash from operations, we would need to seek alternative sources of capital, including financing, to meet our capital requirements.  In the event that we are unable to generate sufficient cash from operations or obtain financing on favorable terms in the future, we may have to limit our fleet size, enter into less favorable financing arrangements, or operate our revenue equipment for longer periods, any of which could have a materially adverse effect on our profitability.

 

Increased prices for new revenue equipment, design changes of new engines, decreased availability of new revenue equipment, and the failure of manufacturers to meet their sale or trade-back obligations to us could have a materially adverse effect on our business, financial condition, results of operations, and profitability.

We are subject to risk with respect to higher prices for new tractors for our trucking operations.  There has been a steady increase in prices for new tractors over the past few years, while the resale value of the tractors has not increased to the same extent.  Prices have increased and may continue to increase, due to, among other reasons, (i) increases in commodity prices; (ii) government regulations applicable to newly manufactured tractors, trailers, and diesel engines; and (iii) the pricing discretion of equipment manufacturers.  In addition, the engines installed in our newer tractors are subject to emissions control regulations issued by the EPA.  Increased regulation has increased the cost of our new tractors and could impair equipment productivity, in some cases, result in lower fuel mileage, and increase our operating expenses.  Further regulations with stricter emissions and efficiency requirements have been proposed that would further increase our costs and impair productivity.  These adverse effects, combined with the uncertainty as to the reliability of the vehicles equipped with the newly designed diesel engines and the residual values realized from the disposition of these vehicles, could increase our costs or otherwise adversely affect our business or operations as the regulations become effective.  Over the past several years, some manufacturers have significantly increased new equipment prices, in part to meet new engine design and operations requirements.  Our business could be harmed if we are unable to obtain an adequate supply of new tractors and trailers for these or other reasons. As a result, we expect to pay increased prices for equipment and incur additional expenses for the foreseeable future. Furthermore, reduced equipment efficiency may result from new engines designed to reduce emissions, thereby increasing our operating expenses.

 

Tractor and trailer vendors may reduce their manufacturing output in response to lower demand for their products in economic downturns or shortages of component parts.  A decrease in vendor output may have a materially adverse effect on our ability to purchase a quantity of new revenue equipment that is sufficient to sustain our desired growth rate and to maintain a late-model fleet.  Moreover, an inability to obtain an adequate supply of new tractors or trailers could have a materially adverse effect on our business, financial condition, and results of operations.

 

7

 

 

 

If fuel prices increase significantly, our results of operations could be adversely affected.

Our trucking operations will be dependent upon the price of diesel fuel.  Prices and availability of petroleum products are subject to political, economic, weather-related, and market factors that are generally outside our control and each of which may lead to fluctuations in the cost of fuel. Fuel prices also are affected by the rising demand for fuel in developing countries, and could be materially adversely affected by the use of crude oil and oil reserves for purposes other than fuel production and by diminished drilling activity.  Such events may lead not only to increases in fuel prices, but also to fuel shortages and disruptions in the fuel supply chain.  Because our trucking operations will be dependent upon diesel fuel, significant increases in diesel fuel costs could materially and adversely affect our results of operations and financial condition if we are unable to pass increased costs on to customers through rate increases or fuel surcharges.

 

Increases in driver compensation or difficulties attracting and retaining qualified drivers could have a materially adverse effect on our profitability and the ability to maintain or grow our fleet.

With respect to our trucking services, difficulty in attracting and retaining sufficient numbers of qualified drivers, which includes the engagement of independent contractors, could have a materially adverse effect on our growth and profitability.  The truckload transportation industry periodically experiences a shortage of qualified drivers, particularly during periods of economic expansion, in which alternative employment opportunities are more plentiful and freight demand increases, or during periods of economic downturns, in which unemployment benefits might be extended and financing is limited for independent contractors who seek to purchase equipment or for students who seek financial aid for driving school.  Regulatory requirements, including those related to safety ratings, ELDs, and hours-of-service changes, and an improved economy could further reduce the number of eligible drivers or force us to increase driver compensation to attract and retain drivers.  We believe that stricter hours-of-service regulations adopted by the DOT have tightened, and may continue to tighten, the market for eligible drivers, and the required implementation of ELDs in December 2017 may further tighten the market.  We believe the shortage of qualified drivers and intense competition for drivers from other trucking companies may create difficulties in maintaining or increasing the number of drivers and may restrain our ability to engage a sufficient number of drivers and independent contractors; our inability to do so may negatively affect our operations. Further, the compensation we offer our drivers and independent contractor expenses are subject to market conditions, and we may find it necessary to increase driver and independent contractor compensation in future periods.

 

Our independent contractors will be responsible for paying for their own equipment, fuel, and other operating costs, and significant increases in these costs could cause them to seek higher compensation from us or seek other opportunities within or outside the trucking industry.   In addition, we may suffer from a high turnover rate of drivers and independent contractors.  This high turnover rate would require us to continually recruit a substantial number of drivers and independent contractors in order to operate existing revenue equipment and maintain our independent contractor fleet.  If we are unable to attract and contract with independent contractors, we could be forced to, among other things, limit our growth, decrease the number of our tractors in service, adjust our driver compensation package or independent contractor compensation, or pay higher rates to third-party truckload carriers, which could adversely affect our profitability and results of operations if not offset by a corresponding increase in customer rates.

 

We operate in a highly regulated industry, and changes in existing regulations or violations of existing or future regulations could have a materially adverse effect on our operations and profitability.

We operate in the United States pursuant to operating and brokerage authority granted by the DOT, and we are also regulated by the EPA, DHS, and other agencies in states in which we operate.  Our independent contractors also must comply with the applicable safety and fitness regulations of the DOT, including those relating to drug and alcohol testing, driver safety performance, and hours-of-service.  Matters such as weight, equipment dimensions, exhaust emissions, and fuel efficiency are also subject to government regulations.  We also may become subject to new or more restrictive regulations relating to fuel efficiency, exhaust emissions, hours-of-service, ergonomics, on-board reporting of operations, collective bargaining, security at ports, speed limiters, driver training, and other matters affecting safety or operating methods.  Future laws and regulations may be more stringent, require changes in our operating practices, influence the demand for transportation services, or require us to incur significant additional costs.  Higher costs incurred by us, or by our suppliers who pass the costs onto us through higher supplies and materials pricing, could adversely affect our results of operations.  In addition, the Trump administration has indicated a desire to reduce regulatory burdens that constrain growth and productivity, and also to introduce legislation such as infrastructure spending, that could improve growth and productivity. Changes in regulations, such as those related to trailer size limits, hours-of-service, and mandating ELDs, could increase capacity in the industry or improve the position of certain competitors, either of which could negatively impact pricing and volumes, or require additional investments by us.  The short and long term impacts of changes in legislation or regulations are difficult to predict and could materially adversely affect our operations.  The "Regulation" section the Business section of this Offering Circular discusses in detail several proposed, pending, suspended, and final regulations that could materially impact our business and operations.

 

 

8

 

 

The CSA program adopted by the FMCSA could adversely affect our profitability and operations, our ability to maintain or grow our fleet, and our customer relationships.

Under CSA, drivers and fleets are evaluated and ranked against their peers based on certain safety-related standards.  As a result, certain potential drivers may not be hired to drive for us and our fleet could be ranked poorly as compared to our peer carriers.  We do not intend to recruit and retain first-time drivers to be part of our fleet, but if we did those drivers may have a higher likelihood of creating adverse safety events under CSA.  The occurrence of future deficiencies could affect driver recruitment by causing high-quality drivers to seek employment with other carriers or could cause our customers to direct their business away from us and to carriers with higher fleet safety rankings, either of which would adversely affect our results of operations.  Additionally, competition for drivers with favorable safety ratings may increase and thus could necessitate increases in driver-related compensation costs.  Further, we may incur greater than expected expenses in our attempts to improve our scores or as a result of those scores.

 

Receipt of an unfavorable DOT safety rating could have a materially adverse effect on our operations and profitability.

If we were to receive a conditional or unsatisfactory DOT safety rating, it could materially adversely affect our business, financial condition, and results of operations as customer contracts may require a satisfactory DOT safety rating, and a conditional or unsatisfactory rating could materially adversely affect or restrict our operations.

The FMCSA also has proposed regulations that would modify the existing rating system and the safety labels assigned to motor carriers evaluated by the DOT.  Under the proposed regulations, the methodology for determining a carrier’s DOT safety rating would be expanded to include the on-road safety performance of the carrier’s drivers and equipment, as well as results obtained from investigations. Exceeding certain thresholds based on such performance or results would cause a carrier to receive an unfit safety rating.  If these proposed regulations are enacted, and we were to receive an unfit safety rating, our business would be materially adversely affected in the same manner as if we received a conditional or unsatisfactory safety rating under the current regulations.

 

If our independent contractor drivers are deemed by regulators or judicial process to be employees, our business, financial condition, and results of operations could be adversely affected.

Tax and other regulatory authorities, as well as independent contractors themselves, have increasingly asserted that independent contractor drivers in the trucking industry are employees rather than independent contractors for a variety of purposes, including income tax withholding, workers' compensation, wage and hour compensation, unemployment, and other issues. Federal legislators have introduced legislation in the past to make it easier for tax and other authorities to reclassify independent contractor drivers as employees, including legislation to increase the recordkeeping requirements for those that engage independent contractor drivers and to increase the penalties of companies who misclassify their employees as independent contractors and are found to have violated employees' overtime and/or wage requirements.  Additionally, federal legislators have sought to abolish the current safe harbor allowing taxpayers meeting certain criteria to treat individuals as independent contractors if they are following a long-standing, recognized practice, extend the Fair Labor Standards Act to independent contractors, and impose notice requirements based upon employment or independent contractor status and fines for failure to comply.  Some states adopted initiatives to increase their revenues from items such as unemployment, workers' compensation, and income taxes, and a reclassification of independent contractor drivers as employees would help states with these initiatives.  We could potentially be a party to class actions from time-to-time alleging violations of the Fair Labor Standards Act and other labor laws seeking to reclassify independent contractors as employees.  Taxing and other regulatory authorities and courts apply a variety of standards in their determination of independent contractor status.  If our independent contractor drivers were determined to be our employees, we would incur additional exposure under federal and state tax, workers' compensation, unemployment benefits, labor, employment, and tort laws, including for prior periods, as well as potential liability for employee benefits and tax withholdings.

Compliance with various environmental laws and regulations to which our operations are subject may increase our costs of operations, and non-compliance with such laws and regulations could result in substantial fines or penalties.

In addition to direct regulation by the DOT and related agencies, we are subject to various federal, state, and local environmental laws and regulations dealing with the transportation, storage, discharge, presence, use, disposal, and handling of hazardous materials, wastewater, storm water, waste oil, and fuel storage tanks.  We are also subject to various environmental laws and regulations involving air emissions from our equipment and facilities, and discharge and retention of storm water.  Our operations involve the risks of fuel spillage or seepage, environmental damage, and hazardous waste disposal, among others.  We do not plan to carry any hazardous substances.   however, if soil or groundwater contamination is found at our facilities or results from our operations, or we are found to be in violation of or fail to comply with applicable environmental laws or regulations, then we could be subject to clean-up costs and liabilities, including substantial fines or penalties or civil and criminal liability, any of which could have a materially adverse effect on our business and results of operations.

In addition, tractors and trailers used in our trucking operations have been and are affected by federal, state, and local statutory and regulatory requirements related to air emissions and fuel efficiency.  In order to reduce exhaust emissions and traffic congestion, some states and municipalities have restricted the locations and amount of time where diesel-powered tractors, such as ours, may idle or travel.  These and other similar restrictions could cause us to alter our drivers' behavior and routes, purchase additional auxiliary or other on-board power units to replace or minimize engine power and idling, or experience decreases in productivity.  Our tractors and trailers could also be adversely affected by related or similar legislative or regulatory actions in the future.

9

 

 

EPA regulations limiting exhaust emissions became more restrictive in 2010, when an executive memorandum was signed directing the NHTSA and the EPA to develop new, stricter fuel efficiency standards for heavy trucks. In 2011, the NHTSA and the EPA adopted final rules that established the Phase 1 Standards.  The Phase 1 Standards apply to tractor model years 2014 to 2018, which are required to achieve an approximate 20 percent reduction in fuel consumption by 2018, and equates to approximately four gallons of fuel for every 100 miles traveled. In addition, in October 2016, the EPA and NHTSA published the final rule establishing the Phase 2 Standards that will apply to trailers beginning with model year 2018 and tractors beginning with model year 2021.  The Phase 2 Standards require nine percent and 25 percent reductions in emissions and fuel consumption for trailers and tractors, respectively, by 2027.  We believe these requirements will result in additional increases in new tractor and trailer prices and additional parts and maintenance costs incurred to retrofit our tractors and trailers with technology to achieve compliance with such standards, which could adversely affect our results of operations and profitability, particularly if such costs are not offset by potential fuel savings. We cannot predict, however, the extent to which our operations and productivity will be impacted.  In addition, future additional emissions regulations are possible.  Any such regulations that impose restrictions, caps, taxes, or other controls on emissions of greenhouse gases could adversely affect our operations and financial results.  Until the timing, scope, and extent of any future regulation becomes known, we cannot predict its effect on our cost structure or our results of operations; however, any future regulation could impair our operating efficiency and productivity and result in higher operating costs.

 

We operate in a highly competitive and fragmented industry, and numerous competitive factors could limit growth opportunities and could have a materially adverse effect on our results of operations.

We operate in a highly competitive transportation industry, which includes thousands of trucking and logistics companies.  In our trucking segment, we primarily compete with other truckload carriers that provide dry van, temperature-controlled, and drayage services similar to those provided by our Dry Van, Refrigerated, and Drayage operating units.  Less-than-truckload carriers, private carriers, intermodal companies, railroads, and logistics companies compete to a lesser extent with our trucking segment but are direct competitors of the Brokerage and Intermodal operating units in our Logistics segment.  We transport or arrange for the transportation of various types of freight, and competition for such freight is based mainly on customer service, efficiency, available capacity and shipment modes, and rates that can be obtained from customers.  Such competition in the transportation industry could adversely affect our freight volumes, the freight rates we charge our customers, or profitability and thereby limit our growth opportunities.  Additional factors may have a materially adverse effect on our results of operations.  These factors include the following:

 

●

many of our competitors periodically reduce their freight rates to gain business, especially during times of reduced growth rates in the economy, which may limit our ability to maintain or increase freight rates or maintain significant growth in our business;

 

 

●

many customers reduce the number of carriers they use by selecting so-called "core carriers" as approved service providers or by engaging dedicated providers, and in some instances we may not be selected;

 

 

●

many customers periodically accept bids from multiple carriers for their shipping needs, and this process may depress freight rates or result in the loss of some of our business to competitors;

 ●

the market for qualified drivers is increasingly competitive, and our inability to attract and retain drivers could reduce our equipment utilization or cause us to increase compensation, both of which would adversely affect our profitability;

 

 

●

competition from non-asset-based and other logistics and freight brokerage companies may adversely affect our customer relationships and freight rates;

 

 

●

economies of scale that may be passed on to smaller carriers by procurement aggregation providers may improve their ability to compete with us;

 

 

●

some of our competitors may not yet be fully compliant with pending regulations, such as regulations requiring the use of ELDs, which may allow such competitors to take advantage of additional driver productivity;

 

 

●

advances in technology may require us to increase investments in order to remain competitive, and our customers may not be willing to accept higher freight rates to cover the cost of these investments; and

 

 

●

higher fuel prices and, in turn, higher fuel surcharges to our customers may cause some of our customers to consider freight transportation alternatives, including rail transportation.

 

 


10

 

 

Risks Relating to our Stock


The offering price of $2.00 per share is arbitrary.


The offering price of $2.00 per share has been arbitrarily determined by our management and does not bear any relationship to the assets, net worth or projected earnings of the Company, or any other generally accepted criteria of value.


We have no firm commitments to purchase any shares.


We have no firm commitment for the purchase of any shares. Therefore, there is no assurance that a broad trading market will develop or be sustained. The Company has not engaged a placement agent or broker for the sale of the shares. The Company may be unable to identify investors to purchase the shares and may have inadequate capital to support its ongoing business obligations.


All proceeds from the sale of shares offered by the Company will be immediately available for use by the Company.


There is no minimum offering amount and we have not established an escrow to hold any of the proceeds from the sale of the shares offered by the company. As a result, all proceeds from the sale of shares offered by the Company will be available for immediate use by the company. The proceeds of the sale may not be sufficient to implement the Company’s business strategy.


Our shares are not quoted on any market or exchange other than on the over the counter market sponsored by OTC Link.  Liquidity on OTC Link may be limited.


As a security quoted only on the over the counter market, our common stock is expected to have fewer market makers, lower trading volumes and larger spreads between bid and asked prices than securities listed on an exchange such as the New York Stock Exchange or The NASDAQ Stock Market. These factors may result in higher price volatility and less market liquidity for the common stock. It is possible that the company’s shares may never be listed on an exchange.


A low market price would severely limit the potential market for our common stock.


Our common stock is expected to trade at a price substantially below $5.00 per share, subjecting trading in the stock to certain SEC rules requiring additional disclosures by broker-dealers. These rules generally apply to any non-NASDAQ equity security that has a market price share of less than $5.00 per share, subject to certain exceptions (a “penny stock”). Such rules require the delivery, prior to any penny stock transaction, of a disclosure schedule explaining the penny stock market and the risks associated therewith and impose various sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and institutional or wealthy investors. For these types of transactions, the broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to the sale. The broker-dealer also must disclose the commissions payable to the broker-dealer, current bid and offer quotations for the penny stock and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Such information must be provided to the customer orally or in writing before or with the written confirmation of trade sent to the customer. Monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. The additional burdens imposed upon broker-dealers by such requirements could discourage broker-dealers from effecting transactions in our common stock.


FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.


In addition to the penny stock rules promulgated by the SEC, which are discussed in the immediately preceding risk factor, FINRA rules require that in recommending an investment to a customer, a broker -dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative, low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit the ability to buy and sell our stock and have an adverse effect on the market value for our shares.


An investor’s ability to trade our common stock may be limited by trading volume.


A consistently active trading market for our common stock may not occur on OTC Link.  A limited trading volume may prevent our shareholders from selling shares at such times or in such amounts as they may otherwise desire.

 


11

 

 

Our company has a concentration of stock ownership and control, which may have the effect of delaying, preventing, or deterring a change of control.


Our common stock ownership is highly concentrated. Through ownership of shares of our common stock, our officers beneficially own 98.9% of our total outstanding shares of common stock before this offering. As a result of the concentrated ownership of the stock, these stockholders, acting in concert, will be able to control all matters requiring stockholder approval, including the election of directors and approval of mergers and other significant corporate transactions. This concentration of ownership may have the effect of delaying, preventing or deterring a change in control of our company. It could also deprive our stockholders of an opportunity to receive a premium for their shares as part of a sale of our company and it may affect the market price of our common stock.


We have not voluntarily implemented various corporate governance measures, in the absence of which, shareholders may have more limited protections against interested director transactions, conflicts of interest and similar matters.


Recent federal legislation, including the Sarbanes-Oxley Act of 2002, 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 and NASDAQ, are those that address the board of Directors independence, audit committee oversight, and the adoption of a code of ethics. While our Board of Directors has adopted a Code of Ethics and Business Conduct, we have not yet adopted any of these corporate governance measures, and since our securities are not listed on a national securities exchange or NASDAQ, we are not required to do so. It is possible that if we were to adopt some or all of these corporate governance measures, shareholders 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 officers 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.


Because we will not pay dividends in the foreseeable future, stockholders will only benefit from owning common stock if it appreciates.


We have never paid dividends on our common stock and we do not intend to do so in the foreseeable future. We intend to retain any future earnings to finance our growth. Accordingly, any potential investor who anticipates the need for current dividends from his investment should not purchase our common stock.


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS


This Offering Circular contains forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, among other things:


Factors that might cause these differences include the following:

 

    ·the ability of the company to offer and sell the shares of common stock offered hereby;

     

    ·the integration of multiple technologies and programs;

     

    ·the ability to successfully complete development and commercialization of sites and our company’s expectations regarding market growth;

     

    ·changes in existing and potential relationships with collaborative partners;

     

    ·the ability to retain certain members of management;

     

     


    12

     

 

·our expectations regarding general and administrative expenses;

 

·our expectations regarding cash balances, capital requirements, anticipated revenue and expenses, including infrastructure expenses; and

 

·other factors detailed from time to time in filings with the SEC.