ITEM
1. BUSINESS.
Background
Yacht
Finders, Inc. (the “Company”) was incorporated in Delaware on August 15, 2000 as Sneeoosh Corporation. On October
20, 2000 the company filed an amended Certificate of Incorporation to change the name to Snohomish Corporation. On April 15, 2003
the company filed a subsequent amendment to change the name to Yacht Finders, Inc. Yacht Finder’s Inc. business plan was
to create an online database for public buyers and yacht brokers to interface immediately with each other while capturing the
benefits of targeting a larger market. On November 6, 2007, the Company discontinued its prior business and changed its business
plan. The Company’s business plan now consists of exploring potential targets for a business combination through the purchase
of assets, share purchase or exchange, merger or similar type of transaction
The
Company’s current business plan is to seek, investigate, and, if warranted, acquire one or more properties or businesses,
and to pursue other related activities intended to enhance shareholder value. The acquisition of a business opportunity may be
made by purchase, merger, exchange of stock, or otherwise, and may encompass assets or a business entity, such as a corporation,
joint venture, or partnership. The Company has limited capital, and it is unlikely that the Company will be able to take advantage
of more than one such business opportunity. The Company intends to seek opportunities demonstrating the potential of long-term
growth as opposed to short-term earnings.
The
Company’s principal shareholders are in contact with broker-dealers and other persons with whom they are acquainted who
are involved in corporate finance matters to advise them of the Company’s existence and to determine if any companies or
businesses they represent have an interest in considering a merger or acquisition with the Company. No assurance can be given
that the Company will be successful in finding or acquiring a desirable business opportunity, given that limited funds are available
for acquisitions, or that any acquisition that occurs will be on terms that are favorable to the Company or its stockholders.
The
Company’s search is directed toward small and medium-sized enterprises which have a desire to become public corporations
and which are able to satisfy or anticipate in the reasonably near future being able to satisfy, the minimum asset and other requirements
in order to qualify shares for trading on one of the OTC or NASDAQ Markets or a stock exchange (See “Investigation and Selection
of Business Opportunities”). The Company anticipates that the business opportunities presented to it may (i) be recently
organized with no operating history, or a history of losses attributable to under-capitalization or other factors; (ii) be experiencing
financial or operating difficulties; (iii) be in need of funds to develop a new product or service or to expand into a new market;
(iv) be relying upon an untested product or marketing concept; or (v) have a combination of the characteristics mentioned in (i)
through (iv). The Company intends to concentrate its acquisition efforts on properties or businesses that it believes to be undervalued.
Given the above factors, investors should expect that any acquisition candidate may have a history of losses or low profitability.
The
Company does not propose to restrict its search for investment opportunities to any particular geographical area or industry,
and may, therefore, engage in essentially any business, to the extent of its limited resources. This includes industries such
as service, finance, natural resources, manufacturing, high technology, product development, medical, communications and others.
The Company’s discretion in the selection of business opportunities is unrestricted, subject to the availability of such
opportunities, economic conditions, and other factors.
Any
entity which has an interest in being acquired by, or merging into the Company, is expected to be an entity that desires to become
a public company and establish a public trading market for its securities. In connection with such a merger or acquisition, it
is highly likely that an amount of stock constituting control of the Company would be issued by the Company or purchased from
the current principal shareholders of the Company by the acquiring entity or its affiliates. If stock is purchased from the current
shareholders, the transaction is very likely to result in substantial gains to them relative to their purchase price for such
stock. In the Company’s judgment, none of its officers and directors would thereby become an “underwriter” within
the meaning of the Section 2(11) of the Securities Act of 1933, as amended. The sale of a controlling interest by certain principal
shareholders of the Company could occur at a time when the other shareholders of the Company remain subject to restrictions on
the transfer of their shares.
It
is anticipated that business opportunities will come to the Company’s attention from various sources, including its principal
shareholders, professional advisors such as attorneys and accountants, securities broker-dealers, venture capitalists, members
of the financial community, and others who may present unsolicited proposals. The Company has no plans, understandings, agreements,
or commitments with any individual for such person to act as a finder of opportunities for the Company.
The
Company does not foresee that it would enter into a merger or acquisition transaction with any business with which its officers,
directors or principal shareholders are currently affiliated. Should the Company determine in the future, contrary to foregoing
expectations, that a transaction with an affiliate would be in the best interests of the Company and its stockholders, the Company
is, in general, permitted by Delaware law to enter into such a transaction if:
1.
The material facts as to the relationship or interest of the affiliate and as to the contract or transaction are disclosed or
are known to the Board of Directors, and the Board in good faith authorizes the contract or transaction by the affirmative vote
of a majority of the disinterested directors, even though the disinterested directors constitute less than a quorum; or
2.
The material facts as to the relationship or interest of the affiliate and as to the contract or transaction are disclosed or
are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith
by vote of the stockholders; or
3.
The contract or transaction is fair as to the Company as of the time it is authorized, approved or ratified, by the Board of Directors
or the stockholders.
Investigation
and Selection of Business Opportunities
To
a large extent, a decision to participate in a specific business opportunity may be made upon the principal shareholders’
analysis of the quality of the other company’s management and personnel, the anticipated acceptability of new products or
marketing concepts, the merit of technological changes, the perceived benefit the Company will derive from becoming a publicly
held entity, and numerous other factors which are difficult, if not impossible, to analyze through the application of any objective
criteria. In many instances, it is anticipated that the historical operations of a specific business opportunity may not necessarily
be indicative of the potential for the future because of the possible need to access capital, shift marketing approaches substantially,
expand significantly, change product emphasis, change or substantially augment management, or make other changes. The Company
will be dependent upon the owners of a business opportunity to identify any such problems which may exist and to implement, or
be primarily responsible for the implementation of, required changes. Because the Company may participate in a business opportunity
with a newly organized firm or with a firm which is entering a new phase of growth, it should be emphasized that the Company will
incur further risks, because management in many instances will not have proved its abilities or effectiveness, the eventual market
for such company’s products or services will likely not be established, and such company may not be profitable when acquired.
It
is anticipated that the Company will not be able to diversify, but will essentially be limited to one such venture because of
the Company’s limited financial resources. This lack of diversification will not permit the Company to offset potential
losses from one business opportunity against profits from another, and should be considered an adverse factor affecting any decision
to purchase the Company’s securities.
It
is emphasized that the Company may affect transactions having a potentially adverse impact upon the Company’s shareholders
pursuant to the authority and discretion of the Company’s management and board of directors to complete acquisitions without
submitting any proposal to the stockholders for their consideration. Holders of the Company’s securities should not anticipate
that the Company will necessarily furnish such holders, prior to any merger or acquisition, with financial statements, or any
other documentation, concerning a target company or its business. In some instances, however, the proposed participation in a
business opportunity may be submitted to the stockholders for their consideration, either voluntarily by such directors to seek
the stockholders’ advice and consent or because state law so requires.
The
analysis of business opportunities will be undertaken by or under the supervision of the Company’s principal shareholders,
who are not professional business analysts. Although there are no current plans to do so, the Company might hire outside consultants
to assist in the investigation and selection of business opportunities, and might pay a finder’s fee. Since the Company
has no current plans to use any outside consultants or advisors to assist in the investigation and selection of business opportunities,
no policies have been adopted regarding use of such consultants or advisors, the criteria to be used in selecting such consultants
or advisors, the services to be provided, the term of service, or regarding the total amount of fees that may be paid. However,
because of the limited resources of the Company, it is likely that any such fees the Company agrees to pay would be paid in stock
and not in cash. Otherwise, the Company anticipates that it will consider, among other things, the following factors:
1.
Potential for growth and profitability, indicated by new technology, anticipated market expansion, or new products;
2.
The Company’s perception of how any particular business opportunity will be received by the investment community and by
the Company’s stockholders;
3.
Whether, following the business combination, the financial condition of the business opportunity would be, or would have a significant
prospect in the foreseeable future of becoming sufficient to enable the securities of the Company to qualify for listing on an
exchange or on a national automated securities quotation system, such as OTC Markets or NASDAQ, so as to permit the trading of
such securities to be exempt from the requirements of Rule 15c2-6 adopted by the Securities and Exchange Commission.
4.
Capital requirements and anticipated availability of required funds, to be provided by the Company or from operations, through
the sale of additional securities, through joint ventures or similar arrangements, or from other sources;
5.
The extent to which the business opportunity can be advanced;
6.
Competitive position as compared to other companies of similar size and experience within the industry segment as well as within
the industry as a whole;
7.
Strength and diversity of existing management, or management prospects that are scheduled for recruitment;
8.
The cost of participation by the Company as compared to the perceived tangible and intangible values and potential; and
9.
The accessibility of required management expertise, personnel, raw materials, services, professional assistance, and other required
items.
In
regard to the possibility that the shares of the Company would qualify for listing on one of the OTC or NASDAQ Markets, the current
standards include the requirements that the issuer of the securities satisfy, among other requirements, certain minimum levels
of shareholder equity, market value or net income. Many of the business opportunities that might be potential candidates for a
combination with the Company would not satisfy any of the OTC or NASDAQ Market listing criteria.
Not
one of the factors described above will be controlling in the selection of a business opportunity, and the Company will attempt
to analyze all factors appropriate to each opportunity and make a determination based upon reasonable investigative measures and
available data. Potentially available business opportunities may occur in many different industries and at various stages of development,
all of which will make the task of comparative investigation and analysis of such business opportunities difficult and complex.
Potential investors must recognize that, because of the Company’s limited capital available for investigation, the Company
may not discover or adequately evaluate adverse facts about the opportunity to be acquired.
The
Company is unable to predict when it may participate in a business opportunity. Prior to making a decision to participate in a
business opportunity, the Company will generally request that it be provided with written materials regarding the business opportunity
containing such items as a description of products, services and company history; management resumes; financial information; available
projections, with related assumptions upon which they are based; an explanation of proprietary products and services; evidence
of existing patents, trademarks, or services marks, or rights thereto; present and proposed forms of compensation to management;
a description of transactions between such company and its affiliates during relevant periods; a description of present and required
facilities; an analysis of risks and competitive conditions; a financial plan of operation and estimated capital requirements;
audited financial statements, or if they are not available, unaudited financial statements, together with reasonable assurances
that audited financial statements would be able to be produced within a reasonable period of time following completion of a merger
transaction; and other information deemed relevant.
As
part of the Company’s investigation, the Company’s principal shareholders may meet personally with management and
key personnel, may visit and inspect material facilities, obtain independent analysis or verification of certain information provided,
check references of management and key personnel, and take other reasonable investigative measures, to the extent of the Company’s
limited financial resources.
It
is possible that the range of business opportunities that might be available for consideration by the Company could be limited
by the impact of Securities and Exchange Commission regulations regarding purchase and sale of “penny stocks.” The
regulations would affect, and possibly impair, any market that might develop in the Company’s securities until such time
as they qualify for listing on NASDAQ or on another exchange which would make them exempt from applicability of the “penny
stock” regulations.
The
Company believes that various types of potential merger or acquisition candidates might find a business combination with the Company
to be attractive. These include acquisition candidates desiring to create a public market for their shares in order to enhance
liquidity for current shareholders, acquisition candidates which have long-term plans for raising capital through the public sale
of securities and believe that the possible prior existence of a public market for their securities would be beneficial, and acquisition
candidates which plan to acquire additional assets through issuance of securities rather than for cash, and believe that the possibility
of development of a public market for their securities will be of assistance in that process. Acquisition candidates who have
a need for an immediate cash infusion are not likely to find a potential business combination with the Company to be an attractive
alternative.
There
are no loan arrangements or arrangements for any financing whatsoever relating to any business opportunities currently available.
Form
of Acquisition
It
is impossible to predict the manner in which the Company may participate in a business opportunity. Specific business opportunities
will be reviewed as well as the respective needs and desires of the Company and the promoters of the opportunity and, upon the
basis of that review and the relative negotiating strength of the Company and such promoters, the legal structure or method deemed
by management to be suitable will be selected. Such structure may include, but is not limited to leases, purchase and sale agreements,
licenses, joint ventures and other contractual arrangements. The Company may act directly or indirectly through an interest in
a partnership, corporation or other form of organization. Implementing such structure may require the merger, consolidation or
reorganization of the Company with other corporations or forms of business organization, and although it is likely, there is no
assurance that the Company would be the surviving entity. In addition, the present management, board of directors and stockholders
of the Company most likely will not have control of a majority of the voting shares of the Company following a reorganization
transaction. As part of such a transaction, the Company’s existing management and directors may resign and new management
and directors may be appointed without any vote by stockholders.
It
is likely that the Company will acquire its participation in a business opportunity through the issuance of Common Stock or other
securities of the Company. Although the terms of any such transaction cannot be predicted, it should be noted that in certain
circumstances the criteria for determining whether or not an acquisition is a so-called “tax free” reorganization
under the Internal Revenue Code of 1986, depends upon the issuance to the stockholders of the acquired company of a controlling
interest (i.e. 80% or more) of the common stock of the combined entities immediately following the reorganization. If a transaction
were structured to take advantage of these provisions rather than other “tax free” provisions provided under the Internal
Revenue Code, the Company’s current stockholders would retain in the aggregate 20% or less of the total issued and outstanding
shares. This could result in substantial additional dilution in the equity of those who were stockholders of the Company prior
to such reorganization. Any such issuance of additional shares might also be done simultaneously with a sale or transfer of shares
representing a controlling interest in the Company by the principal shareholders.
It
is anticipated that any new securities issued in any reorganization would be issued in reliance upon exemptions, if any are available,
from registration under applicable federal and state securities laws. In some circumstances, however, as a negotiated element
of the transaction, the Company may agree to register such securities either at the time the transaction is consummated, or under
certain conditions or at specified times thereafter. The issuance of substantial additional securities and their potential sale
into any trading market that might develop in the Company’s securities may have a depressive effect upon such market.
The
Company will participate in a business opportunity only after the negotiation and execution of a written agreement. Although the
terms of such agreement cannot be predicted, generally such an agreement would require specific representations and warranties
by all of the parties thereto, specify certain events of default, detail the terms of closing and the conditions which must be
satisfied by each of the parties thereto prior to such closing, outline the manner of bearing costs if the transaction is not
closed, set forth remedies upon default, and include miscellaneous other terms normally found in an agreement of that type.
As
a general matter, the Company anticipates that it, and/or its officers and principal shareholders will enter into a letter of
intent with the management, principals or owners of a prospective business opportunity prior to signing a binding agreement. Such
letter of intent will set forth the terms of the proposed acquisition but will generally not bind any of the parties to consummate
the transaction. Execution of a letter of intent will by no means indicate that consummation of an acquisition is probable. Neither
the Company nor any of the other parties to the letter of intent will be bound to consummate the acquisition unless and until
a definitive agreement concerning the acquisition as described in the preceding paragraph is executed. Even after a definitive
agreement is executed, it is possible that the acquisition would not be consummated should any party elect to exercise any right
provided in the agreement to terminate it on specified grounds.
It
is anticipated that the investigation of specific business opportunities and the negotiation, drafting and execution of relevant
agreements, disclosure documents and other instruments will require substantial costs for accountants, attorneys and others. If
a decision is made not to participate in a specific business opportunity, the costs theretofore incurred in the related investigation
might not be recoverable. Moreover, because many providers of goods and services require compensation at the time or soon after
the goods and services are provided, the inability of the Company to pay until an indeterminate future time may make it impossible
to procure such goods and services.
In
all probability, upon completion of an acquisition or merger, there will be a change in control through issuance of substantially
more shares of common stock. Further, in conjunction with an acquisition or merger, it is likely that the principal shareholders
may offer to sell a controlling interest at a price not relative to or reflective of a price which could be achieved by individual
shareholders at the time.
Investment
Company Act and Other Regulation
The
Company may participate in a business opportunity by purchasing, trading or selling the securities of such business. The Company
does not, however, intend to engage primarily in such activities. Specifically, the Company intends to conduct its activities
so as to avoid being classified as an “investment company” under the Investment Company Act of 1940 (the “Investment
Act”), and therefore to avoid application of the costly and restrictive registration and other provisions of the Investment
Act, and the regulations promulgated thereunder.
Section
3(a) of the Investment Act contains the definition of an “investment company,” and it excludes any entity that does
not engage primarily in the business of investing, reinvesting or trading in securities, or that does not engage in the business
of investing, owning, holding or trading “investment securities” (defined as “all securities other than government
securities or securities of majority-owned subsidiaries”) the value of which exceeds 40% of the value of its total assets
(excluding government securities, cash or cash items). The Company intends to implement its business plan in a manner which will
result in the availability of this exception from the definition of “investment company.” Consequently, the Company’s
participation in a business or opportunity through the purchase and sale of investment securities will be limited.
The
Company’s plan of business may involve changes in its capital structure, management, control and business, especially if
it consummates a reorganization as discussed above. Each of these areas is regulated by the Investment Act, in order to protect
purchasers of investment company securities. Since the Company will not register as an investment company, stockholders will not
be afforded these protections.
Any
securities which the Company might acquire in exchange for its Common Stock are expected to be “restricted securities”
within the meaning of the Securities Act of 1933, as amended (the “Act”). If the Company elects to resell such securities,
such sale cannot proceed unless a registration statement has been declared effective by the U. S. Securities and Exchange Commission
or an exemption from registration is available. Section 4(1) of the Act, which exempts sales of securities not involving a distribution,
would in all likelihood be available to permit a private sale. Although the plan of operation does not contemplate resale of securities
acquired, if such a sale were to be necessary, the Company would be required to comply with the provisions of the Act to affect
such resale.
An
acquisition made by the Company may be in an industry which is regulated or licensed by federal, state or local authorities. Compliance
with such regulations can be expected to be a time-consuming and expensive process.
Competition
The
Company expects to encounter substantial competition in its efforts to locate attractive opportunities, primarily from business
development companies, venture capital partnerships and corporations, venture capital affiliates of large industrial and financial
companies, small investment companies, and wealthy individuals. Many of these entities will have significantly greater experience,
resources and managerial capabilities than the Company and will therefore be in a better position than the Company to obtain access
to attractive business opportunities.
Employees
As
of December 31, 2018, the Company had no employees.