Attached files
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EX-10.1 - EXHIBIT 10.1 - SUNHYDROGEN, INC. | ex101.htm |
EX-3.2 - EXHIBIT 3.2 - SUNHYDROGEN, INC. | ex32.htm |
EX-3.4 - EXHIBIT 3.4 - SUNHYDROGEN, INC. | ex34.htm |
EX-3.1 - EXHIBIT 31. - SUNHYDROGEN, INC. | ex31.htm |
EX-23.2 - EXHIBIT 23.2 - SUNHYDROGEN, INC. | ex232.htm |
EX-5.1 - EXHIBIT 5.1 - SUNHYDROGEN, INC. | ex51.htm |
As filed
with the Securities and Exchange Commission on February 4, 2010
Registration
No. 333-_____
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON
D.C. 20549
FORM
S-1
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
HYPERSOLAR,
INC.
(Name of
small business issuer in its charter)
Nevada
|
3674
|
26-4298300
|
||
(State
or other Jurisdiction
|
(Primary
Standard Industrial
|
(I.R.S.
Employer
|
||
of
Incorporation or Organization)
|
Classification
Code Number)
|
Identification
No.)
|
93-B
Castilian Dr.
Santa
Barbara, California 93117
(805)
968-0600
(Address
and telephone number of principal executive offices and principal place of
business)
Timothy
Young
Chief
Executive Officer
HyperSolar,
Inc.
93-B Castilian
Dr.
Santa
Barbara, California 93117
(805)
968-0600
(Name,
address and telephone number of agent for service)
Copies
to:
Gregory
Sichenzia, Esq.
Marcelle
S. Balcombe, Esq.
Sichenzia
Ross Friedman Ference LLP
61
Broadway, 32nd Flr.
New
York, New York 10006
(212)
930-9700
(212)
930-9725 (fax)
APPROXIMATE
DATE OF PROPOSED SALE TO THE PUBLIC:
From time
to time after this Registration Statement becomes effective.
Approximate date of commencement of
proposed sale to public: As soon as practicable after this
Registration Statement becomes effective.
If any of the securities being
registered on this Form are being offered on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act, check the following
box. o________
If this Form is filed to register
additional securities for an offering pursuant to Rule 462(b) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. o________
If this Form is a post-effective
amendment filed pursuant to Rule 462(c) under the Securities Act, check the
following box and list the Securities Act registration statement number of the
earlier registration statement for the same
offering. o________
If this Form is a post-effective
amendment filed pursuant to Rule 462(d) under the Securities Act, check the
following box and list the Securities Act registration statement number of the
earlier registration statement for the same
offering. o________
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
|
|
o
|
|
Accelerated
filer
|
|
o
|
Non-accelerated
filer
|
|
o (Do not
check if a smaller reporting company)
|
|
Smaller reporting company
|
|
x
|
TITLE
OF EACH CLASS OF SECURITIES TO BE
REGISTERED
|
AMOUNT
TO BE
REGISTERED
(1)
|
PROPOSED
MAXIMUM
OFFERING
PRICE
PER
SHARE (2)
|
PROPOSED
MAXIMUM
AGGREGATE
OFFERING
PRICE
|
AMOUNT
OF
REGISTRATION
FEE
|
|||||||||||||
|
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||||||||||||||||
Common
stock, $.001 par value
|
21,782,460 | $ | 0.10 | $ | 2,178,246 | $ | 155.31 |
(1)
|
Includes
shares of our common stock, par value $0.001 per share, issued to the
selling stockholders prior to the date of this prospectus which may be
offered pursuant to this registration
statement.
|
(2)
|
Estimated
solely for the purpose of calculating the registration fee required by
Section 6(B) of the Securities Act of 1933, as amended, and computed
pursuant to Rule 457 under the Securities Act. The selling stockholders
will offer their shares at $0.10 per share. There is currently no
established trading market in our common stock. The price of $0.10
is a fixed price at which the selling stockholders may sell their shares
until the Company’s common stock is quoted on the OTC Bulletin Board at
which time the shares may be sold at prevailing market prices or privately
negotiated prices. There can be no assurance that a market maker will
agree to file the necessary documents with FINRA, which operates the OTC
Electronic Bulletin Board, nor can there be any assurance that such an
application for quotation will be approved.
|
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.
2
THE
INFORMATION CONTAINED 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 IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PRELIMINARY
PROSPECTUS SUBJECT TO COMPLETION, DATED FEBRUARY 4, 2010
HYPERSOLAR,
INC.
21,782,460
SHARES OF
COMMON
STOCK
This
prospectus relates to the resale by the selling stockholders of up to 21,782,460
shares of our common stock presently outstanding. The selling stockholders may
be deemed underwriters of the shares of common stock, which they are offering.
We will pay the expenses of registering these shares.
We are
not selling any shares of common stock in this offering and therefore will not
receive any proceeds from this offering. We have paid the expenses of preparing
this prospectus and the related registration expenses.
There is
no public market for our securities. On or about the date of this
prospectus, we intend to have our common stock quoted for trading on the FINRA
OTC Bulletin Board. There can be no assurance that our common stock will ever be
quoted on a quotation service or a stock exchange or that any market for our
securities will develop.
The
selling stockholders will sell shares from time to time at a fixed price
equal $0.10 per share. If our shares become quoted on the Over-The-Counter
Bulletin Board, sales will be made at prevailing market prices or privately
negotiated prices.
INVESTING
IN THESE SECURITIES INVOLVES SIGNIFICANT RISKS. SEE "RISK FACTORS"
BEGINNING
ON PAGE 8.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this Prospectus is
truthful or complete. Any representation to the contrary is a criminal
offense.
The date
of this prospectus is ________________.
The
information in this Prospectus is not complete and may be changed. This
Prospectus is included in the Registration Statement that was filed HyperSolar,
Inc. with the Securities and Exchange Commission. The selling stockholders may
not sell these securities until the registration statement becomes 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 sale is not
permitted.
3
TABLE OF CONTENTS
Page | ||
Cautionary
Note Regarding Forward-Looking Statements
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5
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Prospectus
Summary
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6
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The
Offering
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||
Risk
Factors
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8
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Use
Of Proceeds
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11
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Selling
Stockholders
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14
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|
Management’s
Discussion And Analysis Of Financial Condition And Results Of
Operations
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18
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|
Business
|
21
|
|
Description
Of Property
|
23
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|
Legal
Proceedings
|
23
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|
Market
for Common Stock and related Shareholder Mattters
|
23
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Directors,
Executive Officers, Promoters and Control Persons
|
24
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|
Executive
Compensation
|
26
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Certain
Relationships And Related Transactions
|
27
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Security
Ownership Of Certain Beneficial Owners And Management
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27
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Description
Of Securities
|
27
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Commission’s
Position On Indemnification For Securities Act Liabilities
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28
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Plan
Of Distribution
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28
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Legal
Matters
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30
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Experts
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30
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Available
Information
|
30
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Index
to Financial Statements
|
F-1
|
4
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus and any prospectus supplement contain forward-looking statements. We
have based these forward-looking statements on our current expectations and
projections about future events.
In some
cases, you can identify forward-looking statements by words such as "may,"
"should," "expect," "plan," "could," "anticipate," "intend," "believe,"
"estimate," "predict," "potential," "goal," or "continue" or similar
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors, including the risks outlined under "Risk
Factors," that may cause our or our industry's actual results, levels of
activity, performance or achievements to be materially different from any future
results, levels of activity, performance or achievements expressed or implied by
such forward-looking statements.
Unless we
are required to do so under U.S. federal securities laws or other applicable
laws, we do not intend to update or revise any forward-looking
statements.
5
PROSPECTUS
SUMMARY
The
following summary highlights selected information contained in this prospectus.
This summary does not contain all the information you should consider before
investing in the securities. Before making an investment decision, you should
read the entire prospectus carefully, including the "risk factors" section, the
financial statements and the notes to the financial statements.
HYPERSOLAR,
INC.
Overview
We are
developing a solar concentrator technology to increase the power output of solar
cells. Based on micro-photonics and existing manufacturing processes, we are
developing a thin and flat solar concentrator that can deliver substantially
more sunlight onto solar cells. This new approach allows solar cells to produce
multiple times more power. The thin and flat nature of this solar
concentrator allows it to be placed as a layer directly on the surface of solar
cells in conventional photovoltaic flat panel designs. With HyperSolar as the
top layer, management believes solar manufacturers can use significantly fewer
solar cells in the production of solar panels, thereby reducing the cost per
watt of solar electricity.
By
providing photovoltaic manufacturers with a way to lower the cost per watt of
solar panels, we believe our technology will help solar become a cost-effective
source of clean, renewable energy to power the future needs of the
world.
We have
only been engaged in our current and proposed business operations since February
2009, and to date, we have been primarily involved in research and development
activities. Accordingly, we have no operating history, nor have we achieved any
revenues to date.
Organizational
History
We were
incorporated in the State of Nevada on February 18, 2009. Our authorized capital
was increased from 75,000,000 to 505,000,000 on September 11, 2009. Effective
also on September 11, 2009, we implemented a forward stock split in a ratio of
20 for 1. Currently, after giving effect to the forward split, there are
126,369,000 shares of common stock issued and outstanding.
Our
executive offices are located at 93-B Castilian Dr., Santa Barbara, CA 93117.
Our telephone number is (805) 968-0600. Our fiscal year end is June
30.
6
THE
OFFERING
Common
stock offered by selling stockholders
|
21,782,460
shares. The shares offered by the selling stockholders pursuant to this
prospectus represent approximately 17 % of the total number of shares of
common stock outstanding.
|
|
Common
stock to be outstanding after the offering
|
126,369,000
shares
|
|
Risk
Factors
|
The
shares involve a high degree of risk. Investors should carefully consider
the information set forth under “RISK FACTORS” beginning on page
8.
|
|
Use
of proceeds
|
We
will not receive any proceeds from the sale of our common stock offered
through this prospectus by the selling stockholders. All
proceeds from the sale of our common stock sold under this Prospectus will
go to the selling stockholders.
|
|
The above
information regarding common stock to be outstanding after the offering is based
on 126,369,000 shares of common stock outstanding as of February 4, 2010
which includes the shares being offered by the selling stockholders in this
prospectus.
7
RISK
FACTORS
This
investment has a high degree of risk. Before you invest you should carefully
consider the risks and uncertainties described below and the other information
in this prospectus. If any of the following risks actually occur, our business,
operating results and financial condition could be harmed and the value of our
stock could go down. This means you could lose all or a part of your
investment.
RISKS
RELATED TO OUR BUSINESS AND INDUSTRY
OUR
LIMITED OPERATING HISTORY DOES NOT AFFORD INVESTORS A SUFFICIENT HISTORY ON
WHICH TO BASE AN INVESTMENT DECISION.
We were
formed in February 2009 and are currently developing a new technology that has
not yet gained market acceptance. There can be no assurance that at
this time we will operate profitably or that we will have adequate working
capital to meet our obligations as they become due.
Investors
must consider the risks and difficulties frequently encountered by early stage
companies, particularly in rapidly evolving markets. Such risks include the
following:
·
|
competition;
|
·
|
need
for acceptance of products;
|
·
|
ability
to continue to develop and extend brand
identity;
|
·
|
ability
to anticipate and adapt to a competitive
market;
|
·
|
ability
to effectively manage rapidly expanding
operations;
|
·
|
amount
and timing of operating costs and capital expenditures relating to
expansion of our business, operations, and infrastructure;
and
|
·
|
dependence
upon key personnel.
|
We cannot
be certain that our business strategy will be successful or that we will
successfully address these risks. In the event that we do not successfully
address these risks, our business, prospects, financial condition, and results
of operations could be materially and adversely affected.
WE
WILL NEED ADDITIONAL FINANCING TO EXECUTE OUR BUSINESS PLAN AND FUND OPERATIONS,
WHICH ADDITIONAL FINANCING MAY NOT BE AVAILABLE ON REASONABLE TERMS OR AT
ALL.
Although
we recently raised an aggregate of $1,132,160 million in a private placement,
our ultimate success may depend upon our ability to raise additional capital.
There can be no assurance that additional funds will be available when needed
from any source or, if available, will be available on terms that are acceptable
to us.
We may be
required to pursue sources of additional capital through various means,
including joint venture projects and debt or equity financings. Future
financings through equity investments are likely to be dilutive to existing
stockholders. Also, the terms of securities we may issue in future capital
transactions may be more favorable for our new investors. Newly issued
securities may include preferences, superior voting rights, the issuance of
warrants or other derivative securities, and the issuances of incentive awards
under equity employee incentive plans, which may have additional dilutive
effects. Further, we may incur substantial costs in pursuing future capital
and/or financing, including investment banking fees, legal fees, accounting
fees, printing and distribution expenses and other costs. We may also be
required to recognize non-cash expenses in connection with certain securities we
may issue, such as convertible notes and warrants, which will adversely impact
our financial condition.
Our
ability to obtain needed financing may be impaired by such factors as the
capital markets, both generally and specifically in the renewable energy
industry, and the fact that we are not profitable, which could impact the
availability or cost of future financings. If the amount of capital we are able
to raise from financing activities is not sufficient to satisfy our capital
needs, even to the extent that we reduce our operations accordingly, we may be
required to cease operations.
WE MAY BE UNABLE TO MANAGE OUR GROWTH
OR IMPLEMENT OUR EXPANSION STRATEGY.
We may
not be able to develop our product and service offerings or implement the other
features of our business strategy at the rate or to the extent presently
planned. Our projected growth will place a significant strain on our
administrative, operational and financial resources. If we are unable to
successfully manage our future growth, establish and continue to upgrade our
operating and financial control systems, recruit and hire necessary personnel or
effectively manage unexpected expansion difficulties, our financial condition
and results of operations could be materially and adversely
affected.
8
WE
MAY NOT BE ABLE TO SUCCESSFULLY DEVELOP AND COMMERCIALIZE OUR TECHNOLOGIES WHICH
WOULD RESULT IN CONTINUED LOSSES AND MAY REQUIRE US TO CURTAIL OR CEASE
OPERATIONS.
We are
currently developing our technology. We have not generated any revenues and we
are unable to project when we will achieve profitability, if at all. As is the
case with any new technology, we expect the development process to continue. We
cannot assure that our engineering resources will be able to develop the product
fast enough to meet market requirements. We can also not assure that our product
will gain market acceptance and that we will be able to successfully
commercialize the technologies. The failure to successfully develop and
commercialize the technologies would result in continued losses and may require
us to curtail or cease operations.
OUR
REVENUES ARE DEPENDENT UPON ACCEPTANCE OF OUR PRODUCTS BY THE MARKET; THE
FAILURE OF WHICH WOULD CAUSE US TO CURTAIL OR CEASE OPERATIONS.
We
believe that virtually all of our revenues will come from the sale or license of
our products. As a result, we will continue to incur substantial operating
losses until such time as we are able to generate revenues from the sale or
license of our products. There can be no assurance that businesses and customers
will adopt our technology and products, or that businesses and prospective
customers will agree to pay for or license our products. In the event that we
are not able to significantly increase the number of customers that purchase or
license our products, or if we are unable to charge the necessary prices or
license fees, our financial condition and results of operations will be
materially and adversely affected.
THE REDUCTION OR ELIMINATION OF
GOVERNMENT SUBSIDIES AND ECONOMIC INCENTIVES FOR ON-GRID SOLAR ELECTRICITY
APPLICATIONS COULD REDUCE DEMAND FOR OUR SOLAR MODULES, LEAD TO A REDUCTION IN
OUR NET SALES AND HARM OUR OPERATING RESULTS.
The
reduction, elimination or expiration of government subsidies and economic
incentives for solar electricity could result in the diminished competitiveness
of solar energy relative to conventional and non-solar renewable sources of
energy, which would negatively affect the growth of the solar energy industry
overall and our net sales specifically. We believe that the near-term growth of
the market for on-grid applications, where solar energy is used to supplement
the electricity a consumer purchases from the utility network, depends
significantly on the availability and size of government and economic
incentives. Currently the cost of solar electricity substantially exceeds the
retail price of electricity in every significant market in the world. As a
result, federal, state and local governmental bodies in many countries have
provided subsidies in the form of tariffs, rebates, tax write-offs and other
incentives to end-users, distributors, systems integrators and manufacturers of
photovoltaic products. Many of these government incentives could expire,
phase-out over time, exhaust the allocated funding or require renewal by the
applicable authority. A reduction, elimination or expiration of government
subsidies and economic incentives for solar electricity could result in the
diminished competitiveness of solar energy, which would in turn hurt our sales
and financial condition.
TECHNOLOGICAL
CHANGES IN THE SOLAR POWER INDUSTRY COULD RENDER OUR SOLAR POWER PRODUCTS
UNCOMPETITIVE OR OBSOLETE, WHICH COULD REDUCE OUR MARKET SHARE AND CAUSE OUR
REVENUES TO DECLINE.
The solar
power market is characterized by continually changing technology requiring
improved features, such as increased efficiency, higher power output and lower
price. Our failure to further refine our technology and develop and introduce
new solar power products could cause our products to become uncompetitive or
obsolete, which could reduce our market share. The solar power industry is
rapidly evolving and competitive. We will need to invest significant financial
resources in research and development to keep pace with technological advances
in the solar power industry and to effectively compete in the future. A variety
of competing solar power technologies are under development by other companies
that could result in lower manufacturing costs or higher product performance
than those expected for our solar power products. Our development efforts may be
rendered obsolete by the technological advances of others, and other
technologies may prove more advantageous for the commercialization of solar
power products.
9
IF
SOLAR POWER TECHNOLOGY IS NOT SUITABLE FOR WIDESPREAD ADOPTION OR SUFFICIENT
DEMAND FOR SOLAR POWER PRODUCTS DOES NOT DEVELOP OR TAKES LONGER TO DEVELOP THAN
WE ANTICIPATE, OUR REVENUES WOULD NOT SIGNIFICANTLY INCREASE AND WE WOULD BE
UNABLE TO ACHIEVE OR SUSTAIN PROFITABILITY.
The
market for solar power products is emerging and rapidly evolving, and its future
success is uncertain. If solar power technology proves unsuitable for widespread
commercial deployment or if demand for solar power products fails to develop
sufficiently, we would be unable to generate enough revenues to achieve and
sustain profitability. In addition, demand for solar power products in the
markets and geographic regions we target may not develop or may develop more
slowly than we anticipate. Many factors will influence the widespread adoption
of solar power technology and demand for solar power products,
including:
•
|
cost-effectiveness
of solar power technologies as compared with conventional and non-solar
alternative energy technologies;
|
•
|
performance
and reliability of solar power products as compared with conventional and
non-solar alternative energy products;
|
•
|
success
of alternative distributed generation technologies such as fuel cells,
wind power and micro turbines;
|
•
|
fluctuations
in economic and market conditions that impact the viability of
conventional and non-solar alternative energy sources, such as increases
or decreases in the prices of oil and other fossil
fuels;
|
•
|
capital
expenditures by customers that tend to decrease when the United States or
global economy slows;
|
•
|
continued
deregulation of the electric power industry and broader energy industry;
and
|
•
|
availability
of government subsidies and
incentives.
|
WE
FACE INTENSE COMPETITION, AND MANY OF OUR COMPETITORS HAVE SUBSTANTIALLY GREATER
RESOURCES THAN WE DO.
We
operate in a competitive environment that is characterized by price fluctuation
and technological change. We will compete with major international and domestic
companies. Some of our current and future potential competitors may have greater
market recognition and customer bases, longer operating histories and
substantially greater financial, technical, marketing, distribution, purchasing,
manufacturing, personnel and other resources than we do. In addition,
competitors may be developing similar technologies with a cost similar to, or
lower than, our projected costs. As a result, they may be able to respond more
quickly to changing customer demands or to devote greater resources to the
development, promotion and sales of solar and solar-related products than we
can.
Our
business plan relies on sales of our solar power products and our competitors
with more diversified product offerings may be better positioned to withstand a
decline in the demand for solar power products. It is possible that new
competitors or alliances among existing competitors could emerge and rapidly
acquire significant market share, which would harm our business. If we fail to
compete successfully, our business would suffer and we may lose or be unable to
gain market share.
BECAUSE
OUR INDUSTRY IS HIGHLY COMPETITIVE AND HAS LOW BARRIERS TO ENTRY, WE MAY LOSE
MARKET SHARE TO LARGER COMPANIES THAT ARE BETTER EQUIPPED TO WEATHER A
DETERIORATION IN MARKET CONDITIONS DUE TO INCREASED COMPETITION.
Our
industry is highly competitive and fragmented, subject to rapid change and has
low barriers to entry. We may in the future compete for potential customers with
solar and heating companies and other providers of solar power equipment or
electric power. Some of these competitors may have significantly greater
financial, technical and marketing resources and greater name recognition than
we have.
We
believe that our ability to compete depends in part on a number of factors
outside of our control, including:
•
|
the
ability of our competitors to hire, retain and motivate qualified
personnel;
|
•
|
the
ownership by competitors of proprietary tools to customize systems to the
needs of a particular customer;
|
•
|
the
price at which others offer comparable services and
equipment;
|
•
|
the
extent of our competitors’ responsiveness to customer needs;
and
|
•
|
installation
technology.
|
Competition
in the solar power services industry may increase in the future, partly due to
low barriers to entry, as well as from other alternative energy resources now in
existence or developed in the future. Increased competition could result in
price reductions, reduced margins or loss of market share and greater
competition for qualified personnel. There can be no assurance that we will be
able to compete successfully against current and future competitors. If we are
unable to compete effectively, or if competition results in a deterioration of
market conditions, our business and results of operations would be adversely
affected.
10
WE
MAY BE VULNERABLE TO THE EFFORTS OF ELECTRIC UTILITY COMPANIES LOBBYING TO
PROTECT THEIR REVENUE STREAMS AM/FROM COMPETITION FROM SOLAR POWER
SYSTEMS.
Electric
utility companies could lobby for a change in the relevant legislation in their
markets to protect their current revenue streams. Any adverse changes to the
regulations and policies of the solar energy industry could deter end-user
purchases of solar power products and investment in the research and development
of solar power technology. In addition, electricity generated by solar power
systems mostly competes with expensive peak hour electricity, rather than the
less expensive average price of electricity. Modifications to the peak hour
pricing policies of utilities such as flat rate pricing, would require solar
power systems to achieve lower prices in order to compete with the price of
electricity. Any changes to government regulations or utility policies that
favor electric utility companies could reduce our competitiveness and cause a
significant reduction in demand for our products.
A
DROP IN THE RETAIL PRICE OF CONVENTIONAL ENERGY OR NON-SOLAR ALTERNATIVE ENERGY
SOURCES MAY NEGATIVELY IMPACT OUR PROFITABILITY.
We
believe that a customer’s decision to purchase or install solar power
capabilities is primarily driven by the cost of electricity from other sources
and their anticipated return on investment resulting from solar power systems.
Fluctuations in economic and market conditions that impact the prices of
conventional and non-solar alternative energy sources, such as decreases in the
prices of oil and other fossil fuels, could cause the demand for solar power
systems to decline, which would have a negative impact on our profitability.
Changes in utility electric rates or net metering policies could also have a
negative effect on our business.
OUR
BUSINESS DEPENDS ON PROPRIETARY TECHNOLOGY THAT WE MAY NOT BE ABLE TO PROTECT
AND MAY INFRINGE ON THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS.
Our
success will depend, in part, on our technology’s commercial viability and on
the strength of our intellectual property rights. The technology is not patented
and the only intellectual property rights that exist at present, if any, are
trade secret rights. However, trade secrets are difficult to protect and others
could independently develop substantially equivalent technology, otherwise gain
access to trade secrets relating to the technology, Accordingly, we may not be
able to protect the rights to our trade secrets. In addition, any agreements we
enter into with our employees, consultants, advisors, customers and strategic
partners will contain restrictions on the disclosure and use of trade secrets,
inventions and confidential information relating to the technology may not
provide meaningful protection in the event of unauthorized use or
disclosure.
We
recently filed a U.S. patent application. It could take several years for the
applications to be processed. However, patent protection may not be obtainable
for the technology whether in the U.S. or
internationally. Alternatively, any protection that is obtained may
not be broad enough to be effective and of value, or it may not withstand
challenges as to validity and enforceability.
Third
parties may assert that the technology, or the products we or our customers or
partners commercialize using the technology, infringes upon their proprietary
rights. We have yet to complete an infringement analysis and, even if such an
analysis were available at the current time, it is virtually impossible for us
to be certain that no infringement exists, particularly in our case where our
products have not yet been fully developed.
We may
need to acquire additional licenses from third parties in order to avoid
infringement. Any required license may not be available to us on acceptable
terms, or at all.
We could
incur substantial costs in defending ourselves in suits brought against us for
alleged infringement of another party’s intellectual property rights as well as
in enforcing our rights against others, and if we are found to infringe, the
manufacture, sale and use of our or our customers’ or partners’ products could
be enjoined. Any claims against us, with or without merit, would likely be
time-consuming, requiring our management team to dedicate substantial time to
addressing the issues presented. Furthermore, the parties bringing claims may
have greater resources than we do.
WE
DO NOT MAINTAIN THEFT OR CASUALTY INSURANCE, AND ONLY MAINTAIN MODEST LIABILITY
AND PROPERTY INSURANCE COVERAGE AND THEREFORE WE COULD INCUR LOSSES AS A RESULT
OF AN UNINSURED LOSS.
We do not
maintain theft, casualty insurance, liability or property insurance coverage. We
cannot assure that we will not incur uninsured liabilities and losses as a
result of the conduct of our business. Any such uninsured or insured loss or
liability could have a material adverse affect on our results of
operations.
IF
WE LOSE KEY EMPLOYEES AND CONSULTANTS OR ARE UNABLE TO ATTRACT OR RETAIN
QUALIFIED PERSONNEL, OUR BUSINESS COULD SUFFER.
Our
success is highly dependent on our ability to attract and retain qualified
scientific, engineering and management personnel. We are highly dependent on our
management, including Timothy Young, our President and CEO and Dr. Nadir Dagli
and Dr. Ronald Petkie, the inventors of our technology. The loss of the services
of any of these persons could have a material adverse effect on our operations.
Our officers are employed on “at will” basis. Accordingly, there can
be no assurance that they will remain associated with us. Our management’s
efforts will be critical to us as we continue to develop our technology and as
we attempt to transition from a development stage company to a company with
commercialized products and services. If we were to lose Mr. Young, Dr. Dagli or
Dr. Petkie, or any other key employees or consultants, we may experience
difficulties in competing effectively, developing our technology and
implementing our business strategies.
11
THE
LOSS OF STRATEGIC RELATIONSHIPS USED IN THE DEVELOPMENT OF OUR PRODUCTS AND
TECHNOLOGY COULD IMPEDE OUR ABILITY TO COMPLETE OUR PRODUCT AND RESULT IN A
MATERIAL ADVERSE EFFECT CAUSING THE BUSINESS TO SUFFER.
We may
rely on strategic relationships with technology development partners to provide
technology. A loss of these relationships for any reason could cause
us to experience difficulties in completing the development of our product and
implementing our business strategy. There can be no assurance that we could
establish other relationships of adequate expertise in a timely manner or at
all.
RISKS
RELATING TO OUR COMMON STOCK
THE
OFFERING PRICE HAS BEEN ARBITRARILY DETERMINED.
The
offering price of the Shares has been determined arbitrarily by the
Company. It does not necessarily bear any relationship to the
Company’s assets value, net worth, revenues or other established criteria of
value, and should not be considered indicative of the actual value of the
Shares. In addition, investors in this Offering will sustain
immediate substantial dilution per share based upon net tangible book value per
share.
THERE
ARE RESTRICTIONS ON THE TRANSFERABILITY OF THE SECURITIES.
Until
registered for resale, investors must bear the economic risk of an investment in
the Shares, for an indefinite period of time. Rule 144 promulgated under the
Securities Act (“Rule 144”), which provides for an exemption from the
registration requirements under the Securities Act under certain conditions,
requires, among other conditions, a six month holding period prior to the resale
(in limited amounts) of securities acquired in a non-public offering without
having to satisfy the registration requirements under the Securities Act. In
addition, the investors have agreed not to sell any of the shares purchased by
the investors that are not included in a registration statement for a period of
one year through the first anniversary of the effective date of this
registration statement of which this prospectus forms a part. There
can be no assurance that the Company will fulfill any reporting requirements in
the future under the Exchange Act or disseminate to the public any current
financial or other information concerning the Company, as is required by Rule
144 as part of the conditions of its availability.
LIQUIDITY
OF SHARES OF OUR COMMON STOCK IS LIMITED.
Our
shares are not and have not been listed or quoted on any exchange or quotation
system. We have arranged for a market maker to apply to have our common stock
quoted on the OTC Bulletin Board on or about the effective time of the
registration statement of which this prospectus forms a part. There can be
no assurance that such an application for quotation will be approved or that a
regular trading market will develop or that if developed, will be sustained. In
the absence of a trading market, investors may be unable to liquidate their
investment. Even if a market for our common stock does develop, the market price
of our common stock may continue to be highly volatile.
SHOULD
OUR STOCK BECOME LISTED ON THE OTC BULLETIN BOARD, IF WE FAIL TO REMAIN CURRENT
ON OUR REPORTING REQUIREMENTS, WE COULD BE REMOVED FROM THE OTC BULLETIN BOARD
WHICH WOULD LIMIT THE ABILITY OF BROKER-DEALERS TO TRADE OUR SECURITIES IN THE
SECONDARY MARKET.
Companies
trading on the OTC Bulletin Board must be reporting issuers under Section 12 of
the Securities Exchange Act of 1934, as amended, and must be current in their
reports under Section 13, in order to maintain price quotation privileges on the
OTC Bulletin Board. If we become listed on the OTC Bulletin Board,
but we fail to remain current in our reporting requirements, we could be
removed from the OTC Bulletin Board. As a result, the market liquidity of our
securities could be severely adversely affected by limiting the ability of
broker-dealers to trade our securities and the ability of stockholders to sell
their securities in the secondary market.
OUR
COMMON STOCK COULD BE SUBJECT TO EXTREME VOLATILITY.
The
trading price of our common stock may be affected by a number of factors,
including events described in the risk factors set forth in this prospectus, as
well as our operating results, financial condition and other events or factors.
In addition to the uncertainties relating to future operating performance and
the profitability of operations, factors such as variations in interim financial
results or various, as yet unpredictable, factors, many of which are beyond our
control, may have a negative effect on the market price of our common stock. In
recent years, broad stock market indices, in general, and smaller capitalization
companies, in particular, have experienced substantial price fluctuations. In a
volatile market, we may experience wide fluctuations in the market price of our
common stock and wide bid-ask spreads. These fluctuations may have a negative
effect on the market price of our common stock. In addition, the
securities market has from time to time experienced significant price and volume
fluctuations that are not related to the operating performance of particular
companies. These market fluctuations may also materially and adversely affect
the market price of our stock.
12
WE
HAVE NEVER PAID COMMON STOCK DIVIDENDS AND HAVE NO PLANS TO PAY DIVIDENDS
IN THE FUTURE, AS A RESULT OUR COMMON STOCK MAY BE LESS VALUABLE BECAUSE A
RETURN ON AN INVESTOR’S INVESTMENT WILL ONLY OCCUR IF OUR STOCK PRICE
APPRECIATES.
Holders
of shares of our common stock are entitled to receive such dividends as may be
declared by our board of directors. To date, we have paid no cash dividends on
our shares of common stock and we do not expect to pay cash dividends on our
common stock in the foreseeable future. We intend to retain future earnings, if
any, to provide funds for operations of our business. Therefore, any return
investors in our common stock may have will be in the form of appreciation, if
any, in the market value of their shares of common stock. There can
be no assurance that shares of our common stock will appreciate in
value or even maintain the price at which our stockholders have purchased their
shares.
OUR
COMMON STOCK MAY BE SUBJECT TO “PENNY STOCK” RULES OF THE SECURITIES AND
EXCHANGE COMMISSION, WHICH MAY MAKE IT MORE DIFFICULT FOR STOCKHOLDERS TO SELL
OUR COMMON STOCK.
Our
common stock may be subject to the “penny stock” rules adopted under Section
15(g) of the Exchange Act. The penny stock rules generally apply to companies
whose common stock is not listed on a national securities exchange and trades at
less than $4.00 per share, other than companies that have had average revenue of
at least $6,000,000 for the last three years or that have tangible net worth of
at least $5,000,000 ($2,000,000 if the company has been operating for three or
more years). These rules require, among other things, that brokers who trade
penny stock to persons other than “established customers” complete certain
documentation, make suitability inquiries of investors and provide investors
with certain information concerning trading in the security, including a risk
disclosure document and quote information under certain circumstances. Many
brokers have decided not to trade penny stocks because of the requirements of
the penny stock rules and, as a result, the number of broker-dealers willing to
act as market makers in such securities is limited. If we are subject to the
penny stock rules for any significant period, it could have an adverse effect on
the market liquidity of our stock and investors may find it more difficult to
dispose of our securities.
WE
MAY NEED ADDITIONAL CAPITAL, AND THE SALE OF ADDITIONAL SHARES OR OTHER EQUITY
SECURITIES COULD RESULT IN ADDITIONAL DILUTION TO OUR STOCKHOLDERS.
If our
resources are insufficient to satisfy our cash requirements, we may seek to sell
additional equity or debt securities or obtain a credit facility. The sale of
additional equity securities could result in additional dilution to our
stockholders. The incurrence of indebtedness would result in increased debt
service obligations and could result in operating and financing covenants that
would restrict our operations. Financing may not be available in
amounts and on terms acceptable to us, or at all. In addition, the successful
execution of our business plan requires significant cash resources,
including cash for investments and acquisition. Changes in business
conditions and future developments could also increase our cash requirements. To
the extent we are unable to obtain external financing, we will not be able
to execute our business plan effectively. To the extent that additional
capital is raised through the sale of equity or convertible debt securities, the
issuance of these securities could result in further dilution to our
stockholders.
13
USE
OF PROCEEDS
This
prospectus relates to shares of our common stock that may be offered and sold
from time to time by the selling stockholders. We will not receive any proceeds
from the sale of shares of common stock in this offering.
We have agreed to bear the expenses
relating to the registration of the shares for the selling security holders. Any
transfer taxes payable on these shares and any commissions and discounts payable
to underwriters, agents, brokers or dealers will be paid by the selling
stockholder.
Transaction
Being Registered In This Prospectus
In
January, 2010, we completed a private placement of $1,132,160 shares of our
common stock, or a total of 11,321,600 shares at a price of $0.10 per share (the
“Offering”). The Offering was made to accredited investors. Pursuant to the
terms of the Subscription Agreement with the investors in the Offering, we
granted piggy-back registration rights to the investors to register the first
15,000 shares purchased plus 10% of all shares purchased thereafter.
Accordingly, we are registering 2,414,660 shares sold to the investors in the
private placement in this Registration Statement of which this
prospectus forms a part.
Pursuant
to the terms of the Subscription Agreement, the investors agreed not to sell any
of the shares purchased by the investors that are not included in a registration
statement for a period of one year through the first anniversary of the
effective date of this Registration Statement of which this prospectus forms a
part.
In April,
2009, we entered into Subscription Agreements with accredited investors pursuant
to which the investors subscribed to purchase an aggregate amount of $6,939.50
in shares of our common stock, or a total of 92,526,600
shares. Pursuant to the terms of the Subscription Agreement we
granted the investors piggy-back registration rights to register the
shares. The investors have requested to register an aggregate of
18,000,000 shares.
In
January 2010, we issued 1,367,800 shares to a consultant in lieu of payment for
$136,780 of invoiced services. We granted the consultant piggy back
registration rights to register the shares.
*We
claim an exemption from the registration requirements of the Act for the private
placement of these securities pursuant to Section 4(2) of the Act and/or
Regulation D promulgated thereunder since, among other things, the transaction
did not involve a public offering, the investors were accredited investors
and/or qualified institutional buyers, the investors had access to information
about us and their investment, the investors took the securities for investment
and not resale, and we took appropriate measures to restrict the transfer of the
securities.
SELLING
STOCKHOLDERS
The table
below sets forth information concerning the resale of the shares of common stock
by the selling stockholders, which we previously issued to the selling
stockholders. We will not receive any proceeds from the resale of the common
stock by the selling stockholders. Assuming all the shares registered below are
sold by the selling stockholders, none of the selling stockholders will continue
to own any shares of our common stock. Any or all of the securities listed below
may be retained by any of the selling shareholders, and therefore, no accurate
forecast can be made as to the number of securities that will be held by the
selling shareholders upon termination of this offering. We believe
that the selling shareholders listed in the table have sole voting and
investment powers with respect to the securities indicated, unless otherwise
indicated. No selling shareholders are broker-dealers or affiliates of
broker-dealers. Further, none of the selling stockholders have held any
position, office or other material relationship with the Company or any of the
Company’s predecessors or affiliates within the past three years.
14
The
following table also sets forth the name of each person who is offering the
resale of shares of common stock by this prospectus, the number of shares of
common stock beneficially owned by each person, the number of shares of common
stock that may be sold in this offering and the number of shares of common stock
each person will own after the offering, assuming they sell all of the shares
offered. The percentage of shares owned after the offering is based upon
126,369,000 shares issued and outstanding as of February 4, 2010.
Stockholder
Name
|
Number
of Shares beneficially owned prior to the Offering
|
Percentage
of Shares owned before the Offering
|
Number
of shares offered pursuant to this Prospectus
|
Number
of Shares owned after the Offering (1)
|
Percentage
of Shares owned after the Offering
|
|||||||||||||||
Alan
W. Weiner
|
60,000 | 0.05 | % | 19,500 | 40,500 | 0.03 | % | |||||||||||||
Andrew
D. Berk
|
40,000 | 0.03 | % | 17,500 | 22,500 | 0.02 | % | |||||||||||||
Andrew
Goldsmith
|
500,000 | 0.40 | % | 63,500 | 436,500 | 0.35 | % | |||||||||||||
Anhua
Chin
|
50,000 | 0.04 | % | 18,500 | 31,500 | 0.02 | % | |||||||||||||
Arthur
Altounian and Kelli Altounian
|
50,000 | 0.04 | % | 18,500 | 31,500 | 0.02 | % | |||||||||||||
Ashkan
Namdaran
|
17,500 | 0.01 | % | 15,250 | 2,250 | 0.00 | % | |||||||||||||
Blair
Capital Inc. (2)
|
1,500,000 | 1.19 | % | 163,500 | 1,336,500 | 1.06 | % | |||||||||||||
Brandon
Chabner as Trustee for The Chabner Family Trust 12-11-2001
|
15,000 | 0.01 | % | 15,000 | 0 | 0.00 | % | |||||||||||||
Brent
Denlinger
|
25,000 | 0.02 | % | 16,000 | 9,000 | 0.01 | % | |||||||||||||
Brett
J. Cohen
|
15,000 | 0.01 | % | 15,000 | 0 | 0.00 | % | |||||||||||||
Brian
Ward
|
400,000 | 0.32 | % | 53,500 | 346,500 | 0.27 | % | |||||||||||||
Bruce
E. King
|
100,000 | 0.08 | % | 23,500 | 76,500 | 0.06 | % | |||||||||||||
Bryan
Tashjian
|
100,000 | 0.08 | % | 23,500 | 76,500 | 0.06 | % | |||||||||||||
Byron
and Linda Elton
|
15,000 | 0.01 | % | 15,000 | 0 | 0.00 | % | |||||||||||||
Calvin
M. Wong
|
20,000 | 0.02 | % | 15,500 | 4,500 | 0.00 | % | |||||||||||||
Chuck
K. Lew
|
15,000 | 0.01 | % | 15,000 | 0 | 0.00 | % | |||||||||||||
Colin
Miyajima
|
20,000 | 0.02 | % | 15,500 | 4,500 | 0.00 | % | |||||||||||||
Craig
Gutjahr
|
50,000 | 0.04 | % | 18,500 | 31,500 | 0.02 | % | |||||||||||||
David
Ludwig, Brandon Rule, Phillip Chang as Tenants-in-Common
|
30,000 | 0.02 | % | 16,500 | 13,500 | 0.01 | % | |||||||||||||
Dawn
M Stroupe
|
100,000 | 0.08 | % | 23,500 | 76,500 | 0.06 | % | |||||||||||||
Deamin,
Inc. (3)
|
100,000 | 0.08 | % | 23,500 | 76,500 | 0.06 | % | |||||||||||||
Demetri
Agryropoulos
|
250,000 | 0.20 | % | 38,500 | 211,500 | 0.17 | % | |||||||||||||
Denise
Cheng
|
15,000 | 0.01 | % | 15,000 | 0 | 0.00 | % | |||||||||||||
Derek
Johansen and Susan McConnell
|
50,000 | 0.04 | % | 18,500 | 31,500 | 0.02 | % | |||||||||||||
Erik
Brandin
|
100,000 | 0.08 | % | 23,500 | 76,500 | 0.06 | % | |||||||||||||
Eugene
G. Laufenberg
|
120,000 | 0.09 | % | 25,500 | 94,500 | 0.07 | % | |||||||||||||
Evan
S. Rubin
|
50,000 | 0.04 | % | 18,500 | 31,500 | 0.02 | % | |||||||||||||
Fenway
Advisory Group (4)
|
1,367,800 | 1.08 | % | 1,367,800 | 0 | 0.00 | % | |||||||||||||
Foland
Financial, Inc. (5)
|
25,000 | 0.02 | % | 16,000 | 9,000 | 0.01 | % | |||||||||||||
Frank
Alfieri
|
15,000 | 0.01 | % | 15,000 | 0 | 0.00 | % | |||||||||||||
Frank
Donatelli
|
20,000 | 0.02 | % | 15,500 | 4,500 | 0.00 | % | |||||||||||||
Frank
Lanore
|
15,000 | 0.01 | % | 15,000 | 0 | 0.00 | % | |||||||||||||
Fred
Stefany
|
50,000 | 0.04 | % | 18,500 | 31,500 | 0.02 | % | |||||||||||||
Gary
R. Wallace
|
500,000 | 0.40 | % | 63,500 | 436,500 | 0.35 | % | |||||||||||||
Gary
S. Wien
|
150,000 | 0.12 | % | 28,500 | 121,500 | 0.10 | % | |||||||||||||
Gecco
Consulting, LLC (6)
|
50,000 | 0.04 | % | 18,500 | 31,500 | 0.02 | % | |||||||||||||
Gecco
Consulting, LLC (7)
|
194,100 | 0.15 | % | 32,910 | 161,190 | 0.13 | % | |||||||||||||
George
B. Davis
|
100,000 | 0.08 | % | 23,500 | 76,500 | 0.06 | % | |||||||||||||
Holly
Williams
|
50,000 | 0.04 | % | 18,500 | 31,500 | 0.02 | % | |||||||||||||
Invest
West Financial II, LLC
|
750,000 | 0.59 | % | 88,500 | 661,500 | 0.52 | % | |||||||||||||
Jason
C. Lew
|
15,000 | 0.01 | % | 15,000 | 0 | 0.00 | % | |||||||||||||
Jason
Ludwig
|
20,000 | 0.02 | % | 15,500 | 4,500 | 0.00 | % | |||||||||||||
Jason
M. Dunster
|
30,000 | 0.02 | % | 16,500 | 13,500 | 0.01 | % | |||||||||||||
Jason
M. Gustafson
|
99,000 | 0.08 | % | 23,400 | 75,600 | 0.06 | % | |||||||||||||
Jeff
Morreale
|
50,000 | 0.04 | % | 18,500 | 31,500 | 0.02 | % | |||||||||||||
Jennifer
Cheng
|
15,000 | 0.01 | % | 15,000 | 0 | 0.00 | % | |||||||||||||
Jeremy
Roll
|
15,000 | 0.01 | % | 15,000 | 0 | 0.00 | % |
15
John
Brent Kuykendall
|
20,000 | 0.02 | % | 15,500 | 4,500 | 0.00 | % | |||||||||||||
John
D. Lund and Christina E. Lund Revocable Living Trust dated June 23,
1998
|
500,000 | 0.40 | % | 63,500 | 436,500 | 0.35 | % | |||||||||||||
John
Hui
|
100,000 | 0.08 | % | 23,500 | 76,500 | 0.06 | % | |||||||||||||
John
J. Ryan and Mary B. Ryan
|
50,000 | 0.04 | % | 18,500 | 31,500 | 0.02 | % | |||||||||||||
Joseph
and Angela Ippolito
|
100,000 | 0.08 | % | 23,500 | 76,500 | 0.06 | % | |||||||||||||
Joseph
P. Sienicki and Nancy J. Sienicki
|
15,000 | 0.01 | % | 15,000 | 0 | 0.00 | % | |||||||||||||
Joseph
Sachen III
|
50,000 | 0.04 | % | 18,500 | 31,500 | 0.02 | % | |||||||||||||
Joshua
Smith & Emily Zachary Smith
|
50,000 | 0.04 | % | 18,500 | 31,500 | 0.02 | % | |||||||||||||
Joshua
Smith & Emily Zachary Smith
|
50,000 | 0.04 | % | 18,500 | 31,500 | 0.02 | % | |||||||||||||
Karen
Rogers
|
15,000 | 0.01 | % | 15,000 | 0 | 0.00 | % | |||||||||||||
Kari
Negri
|
15,000 | 0.01 | % | 15,000 | 0 | 0.00 | % | |||||||||||||
Kathryn
Bailey
|
15,000 | 0.01 | % | 15,000 | 0 | 0.00 | % | |||||||||||||
Kathy
Aaronson
|
15,000 | 0.01 | % | 15,000 | 0 | 0.00 | % | |||||||||||||
Ken
Yao
|
50,000 | 0.04 | % | 18,500 | 31,500 | 0.02 | % | |||||||||||||
Kenneth
M Nepove
|
1,000,000 | 0.79 | % | 113,500 | 886,500 | 0.70 | % | |||||||||||||
Kent
Wheeler
|
30,000 | 0.02 | % | 16,500 | 13,500 | 0.01 | % | |||||||||||||
Kyubyung
Kwon
|
20,000 | 0.02 | % | 15,500 | 4,500 | 0.00 | % | |||||||||||||
Lloyd
Sax
|
15,000 | 0.01 | % | 15,000 | 0 | 0.00 | % | |||||||||||||
Lou
Routbard
|
500,000 | 0.40 | % | 63,500 | 436,500 | 0.35 | % | |||||||||||||
Merrill
Lynch Pierce Fenner & Smith, Inc. FBO Paul S. Tanzman
IRA
|
250,000 | 0.20 | % | 38,500 | 211,500 | 0.17 | % | |||||||||||||
Merrill
Lynch Pierce Fenner & Smith, Inc. FBO Paul S. Tanzman
IRRA
|
250,000 | 0.20 | % | 38,500 | 211,500 | 0.17 | % | |||||||||||||
Michael
Donatelli
|
16,000 | 0.01 | % | 15,100 | 900 | 0.00 | % | |||||||||||||
Michael
Solomon and Naomi Lieberman
|
50,000 | 0.04 | % | 18,500 | 31,500 | 0.02 | % | |||||||||||||
Mitchell
R. Farmer
|
15,000 | 0.01 | % | 15,000 | 0 | 0.00 | % | |||||||||||||
Neil
and Laura Jane Boushell
|
100,000 | 0.08 | % | 23,500 | 76,500 | 0.06 | % | |||||||||||||
Neil
S. Sullivan
|
100,000 | 0.08 | % | 23,500 | 76,500 | 0.06 | % | |||||||||||||
Nicholas
Vigorito and Maria Nawrocki
|
15,000 | 0.01 | % | 15,000 | 0 | 0.00 | % | |||||||||||||
Oppenheimer
& Co. Inc. FBO Robert R. Shefik RLVR IRA
|
150,000 | 0.12 | % | 28,500 | 121,500 | 0.10 | % | |||||||||||||
Paula
Stefany
|
50,000 | 0.04 | % | 18,500 | 31,500 | 0.02 | % | |||||||||||||
Peter
Lombardi
|
15,000 | 0.01 | % | 15,000 | 0 | 0.00 | % | |||||||||||||
Portofino
Capital Inc. (8)
|
100,000 | 0.08 | % | 23,500 | 76,500 | 0.06 | % | |||||||||||||
PTC
Cust IRA FBO Eric M. Campbell
|
300,000 | 0.24 | % | 43,500 | 256,500 | 0.20 | % | |||||||||||||
Reid
Harrison
|
120,000 | 0.09 | % | 25,500 | 94,500 | 0.07 | % | |||||||||||||
Richard
Travis Beifuss
|
6,000,000 | 4.75 | % | 6,000,000 | 0 | 0.00 | % | |||||||||||||
Robert
Lombardi and Lorraine Lombardi JTWR0S
|
15,000 | 0.01 | % | 15,000 | 0 | 0.00 | % | |||||||||||||
Robert
R. Shefik
|
250,000 | 0.20 | % | 38,500 | 211,500 | 0.17 | % | |||||||||||||
Roger
R. Rittenhouse
|
100,000 | 0.08 | % | 23,500 | 76,500 | 0.06 | % | |||||||||||||
Ronald
D. and Barbara A. Hejnal
|
60,000 | 0.05 | % | 19,500 | 40,500 | 0.03 | % | |||||||||||||
Scott
Lassers
|
15,000 | 0.01 | % | 15,000 | 0 | 0.00 | % | |||||||||||||
Scott
Lewis and Kelly Lewis
|
200,000 | 0.16 | % | 33,500 | 166,500 | 0.13 | % | |||||||||||||
Shirley
B. Lyon
|
50,000 | 0.04 | % | 18,500 | 31,500 | 0.02 | % | |||||||||||||
Sidney
and Annette Ludwig
|
20,000 | 0.02 | % | 15,500 | 4,500 | 0.00 | % | |||||||||||||
Simone
Rayden
|
300,000 | 0.24 | % | 43,500 | 256,500 | 0.20 | % | |||||||||||||
Steven
Friedland
|
25,000 | 0.02 | % | 16,000 | 9,000 | 0.01 | % | |||||||||||||
Susan
J. Sung
|
20,000 | 0.02 | % | 15,500 | 4,500 | 0.00 | % |
16
Tanner
Jon Elton
|
15,000 | 0.01 | % | 15,000 | 0 | 0.00 | % | |||||||||||||
Thomas
Zachary
|
25,000 | 0.02 | % | 16,000 | 9,000 | 0.01 | % | |||||||||||||
Tyler
Banks
|
15,000 | 0.01 | % | 15,000 | 0 | 0.00 | % | |||||||||||||
Varin
Udompanyanan
|
50,000 | 0.04 | % | 18,500 | 31,500 | 0.02 | % | |||||||||||||
William
Egan
|
50,000 | 0.04 | % | 18,500 | 31,500 | 0.02 | % | |||||||||||||
Wings
Fund, Inc. (9)
|
6,000,000 | 4.75 | % | 6,000,000 | 0 | 0.00 | % | |||||||||||||
Ying
Xue Huang
|
6,000,000 | 4.75 | % | 6,000,000 | 0 | 0.00 | % | |||||||||||||
Total
|
30,689,400 | 21,782,460 | 8,906,940 | |||||||||||||||||
The
number and percentage of shares beneficially owned is determined in accordance
with Rule 13d-3 of the Securities Exchange Act of 1934, and the information is
not necessarily indicative of beneficial ownership for any other purpose. Under
such rule, beneficial ownership includes any shares as to which the selling
stockholders has sole or shared voting power or investment power and also any
shares, which the selling stockholders has the right to acquire within 60
days.
(1)
|
Assumes
that all securities will be sold.
|
(2)
|
In
accordance with Rule 13d-2 under the Securities Exchange Act of 1934,Neil
S. Sullivan may be deemed a control person of the shares owned by such
entity, with final voting power and investment control over such
shares.
|
(3)
|
In
accordance with Rule 13d-2 under the Securities Exchange Act of 1934, Dean
Minerd may be deemed a control person of the shares owned by such entity,
with final voting and investment control over such
shares.
|
(4)
|
In
accordance with Rule 13d-2 under the Securities Exchange Act of 1934, Neil
S. Sullivan may be deemed a control person of the shares owned by such
entity, with final voting power and investment control over such
shares.
|
(5)
|
In
accordance with Rule 13d-2 under the Securities Exchange Act of 1934, Ryan
Foland may be deemed a control person of the shares owned by such entity,
with final voting power and investment control over such
shares.
|
(6)
|
In
accordance with Rule 13d-2 under the Securities Exchange Act of 1934,Wayne
Irving may be deemed a control person of the shares owned by such entity,
with final voting power and investment control over such
shares.
|
(7)
|
In
accordance with Rule 13d-2 under the Securities Exchange Act of 1934,
Wayne Irving may be deemed a control person of the shares owned by such
entity, with final voting power and investment control over such
shares.
|
(8)
|
In
accordance with Rule 13d-2 under the Securities Exchange Act of 1934, Neil
S. Sullivan may be deemed a control person of the shares owned by such
entity, with final voting power and investment control over such
shares.
|
(9)
|
In
accordance with Rule 13d-2 under the Securities Exchange Act of 1934,
Karen M. Graham may be deemed a control person of the shares owned by such
entity, with final voting power and investment control over such
shares.
|
17
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND
RESULTS OF OPERATIONS
Some of
the information in this prospectus contains forward-looking statements that
involve substantial risks and uncertainties. You can identify these statements
by forward-looking words such as "may," "expect," "anticipate," "believe,"
"estimate" and "continue," or similar words. You should read statements that
contain these words carefully because they:
·
|
discuss
our future expectations;
|
·
|
contain
projections of our future results of operations or of our financial
condition; and
|
·
|
state
other "forward-looking"
information.
|
We
believe it is important to communicate our expectations. However, there may be
events in the future that we are not able to accurately predict or over which we
have no control. Our actual results and the timing of certain events could
differ materially from those anticipated in these forward-looking statements as
a result of certain factors, including those set forth under "Risk Factors,"
"Business" and elsewhere in this prospectus. See "Risk Factors."
OVERVIEW
We are
developing a solar concentrator technology to increase the power output of solar
cells. Based on micro-photonics and existing manufacturing processes, we are
developing a thin and flat solar concentrator that can deliver substantially
more sunlight onto solar cells. This new approach allows solar cells to produce
multiple times more power. The thin and flat nature of this solar
concentrator allows it to be placed as a layer directly on the surface of solar
cells in conventional photovoltaic flat panel designs. With HyperSolar as the
top layer, management believes solar manufacturers can use significantly fewer
solar cells in the production of solar panels, thereby reducing the cost per
watt of solar electricity.
By
providing photovoltaic manufacturers with a way to lower the cost per watt of
solar panels, we believe our technology will help solar become a cost-effective
source of clean, renewable energy to power the future needs of the
world.
We are
currently underway with the development of a demonstration prototype of our
technology. We recently began operating our business, and have not
generated any revenues. When we have completed a commercial product
design based on our technology, we intend to use licensing and partnering
strategies to enter the market.
Critical Accounting
Policies
Our
discussion and analysis of our financial condition and results of operations are
based upon our financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States of America. The
preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosures of contingent assets and liabilities. On an
ongoing basis, we evaluate our estimates, including those related to impairment
of property, plant and equipment, intangible assets, deferred tax assets and
fair value computation using the Black Scholes option pricing model. We base our
estimates on historical experience and on various other assumptions, such as the
trading value of our common stock and estimated future undiscounted cash flows,
that we believe to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying value of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions; however,
we believe that our estimates, including those for the above-described items,
are reasonable.
Revenue
Recognition
Revenue on product sales is
recognized when persuasive evidence of an
arrangement exists, such as when a purchase order or contract is
received from the customer, the selling price is fixed, title to the goods
has changed and there is a reasonable assurance of collection of the
sales proceeds. We obtain written purchase authorizations from
our customers for a specified amount of product at a specified price
and consider delivery to have occurred at the time
of shipment. Revenue is recognized at shipment and we
record a reserve for estimated sales returns, which
is reflected as a reduction of revenue at the time of revenue
recognition.
18
Use
of Estimates
In
accordance with accounting principles generally accepted in the United States,
management utilizes estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements as well as the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. These estimates and assumptions relate to
recording net revenue, collectibility of accounts receivable, useful lives and
impairment of tangible and intangible assets, accruals, income taxes, inventory
realization, stock-based compensation expense and other factors. Management
believes it has exercised reasonable judgment in deriving these estimates.
Consequently, a change in conditions could affect these estimates.
Fair
Value of Financial Instruments
The
Company's cash, accounts payable, accrued interest, and note payable are stated
at cost which approximates fair value due to the short-term nature of these
instruments.
Recently
Issued Accounting Pronouncements
The
Company has adopted the accounting pronouncement for subsequent events, which
establish general standards of accounting for and disclosure of events that
occur after the balance sheet date but before financial statements are issued.
This guidance applies to interim or annual periods ending after June 15, 2009.
The adoption of this guidance did not have a material effect on the Company's
financial statements.
In June
2009, the FASB issued guidance under Accounting Standards Codification (“ASC”)
Topic 105, “Generally Accepted Accounting Principles” (SFAS No. 168, The FASB
Accounting Standards Codification TM and the Hierarchy of Generally Accepted
Accounting Principles). This guidance establishes the FASB ASC as the single
source of authoritative U.S. GAAP recognized by the FASB to be applied by
nongovernmental entities. Rules and interpretive releases of the SEC under
authority of federal securities laws are also sources of authoritative U.S. GAAP
for SEC registrants. SFAS 168 and the ASC are effective for financial statements
issued for interim and annual periods ending after September 15, 2009. The ASC
supersedes all existing non-SEC accounting and reporting standards. All other
non-grandfathered, non-SEC accounting literature not included in the ASC has
become non-authoritative. Following SFAS 168, the FASB will no longer issue new
standards in the form of Statements, FSPs, or EITF Abstracts. Instead, the FASB
will issue Accounting Standards Updates, which will serve only to update the
ASC, provide background information about the guidance, and provide the bases
for conclusions on the change(s) in the ASC. We adopted ASC 105 effective for
our financial statements issued as of December 31, 2009. The adoption of this
guidance did not have an impact on our financial statements but will alter the
references to accounting literature within the financial
statements.
In August
2009, the FASB issued guidance under Accounting Standards Update (“ASU”) No.
2009-05, “Measuring Liabilities at Fair Value”. This guidance clarifies how the
fair value a liability should be determined. This guidance is effective for the
first reporting period after issuance. We have adopted this guidance for our
interim period ending December 31, 2009. The adoption of this guidance has no
material impact on our financial statements
Liquidity
and Capital Resources
As of
December 31, 2009, we had $348,006 of working capital as compared to a working
deficit of $(42,533) from inception (February 18, 2009) through June 30, 2009.
This increase of $390,539 was due primarily to private placements of shares of
common stock pursuant to Subscription Agreements which we entered into with
accredited investors.
Cash flow
used in operating activities was $209,083 for the six months ended December 31,
2009 and $39,561 for the period of inception (February 18, 2009) through June
30, 2009. This cash used by operating activities was primarily due to the cost
of salaries and professional fees. The Company is in its development stage and
has had no revenues.
Cash used
in investing activities was $3,211 for the six months ended December 31, 2009
and $9,324 for the period of inception (February 18, 2009) through June 30,
2009. The cash used in investing activities was primarily due to the
purchase of fixed assets.
Cash
provided from financing activities during the six months ended December 31, 2009
was $740,597 and $52,542 for the period of inception (February 18, 2009) through
June 30, 2009. The cash provided from financing activities was due to
the sale of shares of our common stock through private placements. Of
the $52,542 from inception (February 18, 2009) through June 30, 2009, $44,553
related to proceeds from notes payable from a related party.
Our
financial statements as of December 31, 2009 have been prepared under the
assumption that we will continue as a going concern from inception (February 18,
2009) through December 31, 2009. Our independent registered public accounting
firm have issued their report dated January 20, 2010 that included an
explanatory paragraph expressing substantial doubt in our ability to continue as
a going concern without additional capital becoming available. Our ability to
continue as a going concern ultimately is dependent on our ability to generate a
profit which is dependent upon our ability to obtain additional equity or
debt financing, attain further operating efficiencies and, ultimately, to
achieve profitable operations. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
19
PLAN
OF OPERATION AND FINANCING NEEDS
Our plan
of operation within the next twelve months is to utilize our cash balances to
develop a demonstration prototype. The purpose of the prototype will
be to demonstrate how our technology can increase the output of power of a
typical solar cell overlaid with the HyperSolar concentration
layer.
This
prototype will be used for demonstration purposes only and is not meant for
commercial deployment. We are currently underway in the development
of this demonstration prototype.
We
believe that our current cash and investment balances will be sufficient to
support development activities until January 2011 at which time management
estimates that it will require additional cash resources.
Operating
Expenses
Operating expenses for the six months
ended December 31, 2009 were $389,099. The operating expenses consisted
primarily of $128,455 in professional fees, $74,375 in salaries, and $65,750 in
research and development. Operating expenses from inception (February
18, 2009) through June 30, 2009, were $40,931. The operating expenses consisted
primarily of $4,599 in marketing expenses and $32,425 in research and
development.
Net
Loss
For the
six months ended December 31, 2009, our net loss was $(391,854). The net loss
was related primarily to operating expenses for salaries and professional
fees. From inception (February 18, 2009) through June 30, 2009, our
net loss was $(41,523). The net loss was primarily related to
operating expenses for marketing and research and development. We
recently began operating our business, and no revenues were generated to cover
our operating costs, since we are in the development stage of our
Company.
20
BUSINESS
Organizational
History
We were
incorporated in the State of Nevada on February 18, 2009. Our authorized capital
was increased from 75,000,000 to 505,000,000 on September 11, 2009. Effective
also on September 11, 2009, we implemented a forward stock split in a ratio of
20 for 1. Currently after giving effect to the forward split, there are
113,526,600 shares of common stock issued and outstanding.
We have
only been engaged in our current and proposed business operations since February
2009, and to date, we have been primarily involved in research and development
activities. Accordingly, we have no operating history, nor have we achieved any
revenues to date.
Corporate
Information
Our
executive offices are located at 93-B Castilian Dr., Santa Barbara, CA 93117.
Our telephone number is (805) 968-0600.
Overview
We are
developing a solar concentrator technology to increase the power output of solar
cells. Based on micro-photonics and existing manufacturing processes, we are
developing a thin and flat solar concentrator that can deliver substantially
more sunlight onto solar cells. This new approach allows solar cells to produce
multiple times more power. The thin and flat nature of this solar
concentrator allows it to be placed as a layer directly on the surface of solar
cells in conventional photovoltaic flat panel designs. With HyperSolar as the
top layer, management believes solar manufacturers can use significantly fewer
solar cells in the production of solar panels, thereby reducing the cost per
watt of solar electricity.
By
providing photovoltaic manufacturers with a way to lower the cost per watt of
solar panels, we believe our technology will help solar become a cost-effective
source of clean, renewable energy to power the future needs of the
world.
Market
Opportunity
With an
unlimited amount of free sunlight, solar power can be considered to be the
ultimate source of clean, renewable energy leading to energy independence,
national security and a sustainable way of life. Management believes that the
key to realizing this promise is finding a way to reduce the cost per watt of
solar electricity to the point where it is cost competitive with conventional
electricity.
We intend
to reduce the cost of solar panels by replacing expensive solar cells with our
inexpensive optical solar concentrators. When fully developed, we
believe that our solar concentrator technology, based on polymer materials and
processes, will cost less to manufacture than photovoltaic solar cells based on
semiconductor materials and processes.
Our
Technology
Our
technology acts as a thin and flat “magnifying glass” that can be placed
directly on the surface of solar cells to magnify the power of the Sun to
significantly increase the power output of solar cells. This technology offers a
new approach to lower the cost per watt of solar panels by inexpensively
delivering more sunlight to the expensive solar cells. Instead of
covering the entire panel surface with solar cells, manufacturers can cover the
panel with HyperSolar layers to collect the sunlight and use fewer solar cells
underneath the HyperSolar layers for electricity conversion.
The
scientific principle behind the use of solar concentrators, such as lenses and
mirrors, to magnify the power of the Sun has been known for a very long
time. By marrying the scientific principle of solar concentration and
innovative photonics techniques, we are developing a thin and flat solar
concentrator for direct placement on the surface conventional solar cells in a
flat panel design.
When a
large area of solar energy is collected and concentrated onto a smaller area,
the solar power per unit area hitting the solar cell is magnified. Therefore,
the power output of the solar cell is magnified. Traditional silicon solar cells
can only handle low magnification levels, while very expensive high efficiency
solar cells, such as those made from gallium arsenide, can handle high
magnification levels. We intend to offer different versions of our technology to
address the full range of solar cells and applications.
21
Low
Magnification
|
High
Magnification
|
Mix-Mode
Magnification
|
Innovative
Photonics
Our
patent-pending technology is based on four primary innovations:
·
|
Micro
Concentrators – A matrix of small and highly efficient solar
concentrators are used to collect sunlight throughout the day from a wide
range of angles without requiring mechanisms to track the
sun.
|
·
|
Photonics
Light Routing – An innovative solid-state photonics network
underneath the Micro Concentrators transports light from points of
collection at the top, to points of concentrated output at the bottom.
This results in a very thin layer.
|
·
|
Photonics
Light Separation – Innovative techniques are employed in the
photonics network to separate the collected sunlight into different
spectrum ranges, where they can be routed to different output points at
the bottom where different types of solar cells may be
placed.
|
·
|
Photonics
Thermal Management – Solar cells can only convert a part of the
solar spectrum into electricity. The unused portion turns into heat, which
actually degrades the performance of the solar cell. Our technology
filters out the unused solar spectrum to deliver maximum useful solar
energy to the solar cell and avoid
overheating.
|
With
HyperSolar as the top layer, management believes that manufacturers can use
significantly fewer solar cells in the production of solar panels, thereby
dramatically reducing the cost per watt of electricity.
Compliance
with Environmental Laws and Regulations
Our
operations are subject to local, state and federal laws and regulations
governing environmental quality and pollution control. To date, our compliance
with these regulations has had no material effect on our operations, capital,
earnings, or competitive position, and the cost of such compliance has not been
material. We are unable to assess or predict at this time what effect additional
regulations or legislation could have on our activities.
Manufacturing
and Distribution
The
Company will use licensing and partnering strategies to enter the
market. The Company intends to distribute its technology through
licensing agreements and partnering strategies with unidentified third
parties.
Intellectual
Property
We have
filed a patent application with the U.S. Patent and Trademark Office to protect
the intellectual property rights for “Thin and Flat Solar Collector-Concentrator
and Method of Fabrication”. The invention is a photonics-based planar solar
concentrator designed to collect sunlight from a large area on top,
concentrating that solar energy, and directing it to a smaller area at the
bottom where a solar cell can be attached. The inventors listed on the patent
application are Nadir Dagli and Ronald Petkie. The Company is listed
as the assignee.
Competition
The
market for the manufacture, marketing and the sale of solar related products is
highly competitive. Such competition could drive up the cost of retaining
qualified engineers and other key employees, as well as other operating
expenses. Moreover, if production capacity in the industry increases faster than
demand for solar power, sales prices could be depressed. Increases in the solar
power industry may negatively affect demand and the competitive position of our
technology.
22
Competition
from other concentrated solar technologies will likely increase as the global
solar market expands. This could also have a negative impact on us or our
customers’ ability to obtain additional capital from investors. Larger foreign
owned and domestic companies which have been engaged in the alternative energy
business for substantially longer periods of time may have access to greater
financial and other resources. These companies may have greater success in the
recruitment and retention of qualified employees, as well as in conducting their
own solar technology manufacturing and marketing operations, which may give them
a competitive advantage. In addition, actual or potential competitors may be
strengthened through the acquisition of additional assets and interests. If we
or our customers are unable to compete effectively or adequately respond to
competitive pressures, this may materially adversely affect our results of
operation and financial condition.
DESCRIPTION
OF PROPERTY
Our
principal office is located at 93-B Castilian Dr. Suite C, Santa Barbara,
California 93117. We lease approximately 1,200 square feet, with an annual cost
of approximately $18,000. The term of the lease is one year which
expires on September 1, 2010, and thereafter will become month to month. We believe that our
current premises are sufficient to handle our activities for the near
future.
We are
not currently a party to any legal proceedings. There has been no bankruptcy,
receivership or similar proceedings.
Employees
As of the
date of this prospectus, we have two (2) full-time employees and several
consultants. We have not experienced any work stoppages and we consider
relations with our employees to be good.
MARKET
FOR COMMON STOCK
AND
RELATED SHAREHOLDER MATTERS
OTC
Bulletin Board Considerations
There is
no public market for our securities. On or before the date of this prospectus we
intend to have our common stock quoted for trading on the FINRA OTC Bulletin
Board. There can be no assurance that our common stock will ever be quoted on a
quotation service or a stock exchange or that any market for our securities will
develop.
Holders
As of
February 5, 2010, the Company had 108 stockholders of record.
Transfer
Agent
The
Company's registrar and transfer agent is Computershare Trust Company N.A.,
250 Royall Street,
Canton, MA 02021
Dividend
Policy
We
have never declared or paid any cash dividends on its common stock. We
currently intend to retain future earnings, if any, to finance the expansion of
our business. As a result, we do not anticipate paying any cash dividends in the
foreseeable future.
Securities
Authorized for Issuance under Equity Compensation Plans
We do not
have any compensation plans or arrangements under which equity securities are
authorized for issuance.
23
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The
following table sets forth the names and ages of our directors and executive
officers, and their positions with us:
Name
|
Age
|
Position
|
Timothy
Young
|
44
|
President,
CEO and Director
|
Ronald
Petkie
|
57
|
Chief
Technology Officer
|
Christopher
Marquis
|
27
|
Director
|
[need
to clearly show employment history for the prior 5 years as required by SEC
rules.
Executive
Biographies
Timothy
Young – President and CEO
Tim Young
is an accomplished executive with over 15 years of management experience in
media and Internet technology companies. Most recently September 2007 through
August 2009, Mr. Young was the President of Rovion, Inc., an internet media
startup company, where he increased revenues through a channel sales strategy
that included companies such as Clear Channel, Disney, CBS, and Fox Television
and bolstered the company's technical capabilities through strategic
acquisitions.
Prior to
Rovion, Mr. Young was employed by Time Warner Inc. from October 1998 through
July 2007, where he served as Vice President and Regional Vice President of
various divisions including America Online and Time Warner Cable. During his
tenure, Mr. Young built some of the highest performing sales organizations at
Time Warner with responsibilities ranging from product development, marketing,
staff training to leadership development. After Time Warner's acquisition of
Adelphia Media Services and Comcast in 2004, Mr. Young served as Regional Vice
President of Western Region, and was responsible for successfully integrating
the California sales teams which accounted for over $200 million in revenues
with 250 sales and marketing personnel, and launched several new product
offerings.
Ronald
Petkie, Ph.D. – Chief Technology Officer
Ronald
Petkie, co-inventor of the Company’s technology, has over 20 years of
diversified experience in advanced materials technology and thin and thick film
processes. From 2003 to 2009, Dr. Petkie worked on cutting edge alternative
energy technologies, with a heavy emphasis on photovoltaic solar cell
technologies for companies such as First Solar, Evergreen Solar and Advent
Solar. His industrial experience encompasses a broad range of solar cell
technology, from the quality of materials to a deep understanding of device
physics and manufacturing technologies and their interrelationships. This
experience enabled him to develop improvements and novel processes for
manufacturing solar cells with better yield and performance through
characterization and statistical performance modeling.
Prior to
working in the alternative energy industry, Dr. Petkie spent six years at
Diamonex as the principal investigator for development and application
engineering of synthetic diamond wafer technology, primarily involving advanced
high-performance microelectronic packaging. He began his career at an IBM
semiconductor pilot line as a Senior Engineer developing and managing
manufacturing processes for magnetic sensor chips, and several years at the
Materials Laboratory at the IBM Research Division involving thin film technology
and equipment. Dr. Petkie holds a Ph.D. degree in Materials Engineering from
Rensselaer Polytechnic Institute, a Masters degree in Electrical Engineering and
a Bachelors degree in Physics from Pennsylvania State University.
Dr.
Petkie has authored numerous patent applications involving thin film, thick
film, microelectronic manufacturing processes, and photovoltaics, and is the
listed inventor in 5 issued patents. He has authored or co-authored over 32
technical publications. Dr. Petkie’s realm of expertise includes knowledge and
hands-on work in thin and thick film technology, microelectronic packaging,
materials analysis and electrical characterization, statistical analysis /
neural networks, vacuum equipment and deposition (PVD, CVD, electroplating, wet
powder spraying, e-beam, rf and dc sputtering, electrochemical techniques),
metallization processes / metal-ceramic bonding, high-temperature processing /
sintering, optical filters, electron microscopy,
process-properties-microstructure relationships, crystallization processes,
crystallographic characterization-relationships, electronic materials / devices
/ sensors, photovoltaics, hydrogen separation for fuel cells, thermal management
materials and techniques, magnetic sensors, photography and
imaging.
Christopher
Marquis, Director
Christopher
Marquis is a real estate executive who provides advisory and transactional
services for investors of shopping centers, retail properties, and single tenant
assets throughout Southern California. Since 2008, he has been employed by
Sperry Van Ness, a real estate advisory firm located in Irvine, California.
Prior to his employment by Sperry Van Ness, from April 2006 through September
2006, Mr. Marquis was responsible for market research and financial analysis
assistance on new projects for the development team at Treadwell Robertson, Inc.
a real estate developer located in San Juan Capistrano, California. Mr.
Marquis graduated in 2007 from Brigham Young University in Provo, Utah with a
Bachelor of Science degree in Finance at the Marriott School of
Management. While working on his degree, Mr. Marquis held a
management position at DP Clothing in Provo, Utah from Noveember 2003 until
April 2006.
24
Advisory
Nadir
Dagli, Ph.D. – Chief Scientific Advisor
Nadir
Dagli, lead inventor of the Company’s technology, is an expert in the field of
photonics and nanophotonics for high-speed telecommunication devices. He
received his Ph.D. in electrical engineering from the Massachusetts Institute of
Technology, Cambridge, MA in 1986. Since 1987, Dr. Dagli has been a professor of
electrical and computer engineering at the University of California at Santa
Barbara (UCSB). His current research includes the design, fabrication and
modeling of guided-wave components for optical integrated circuits, ultra fast
electro-optic optical modulators, wavelength division multiplexed components and
photonic nanostructures. He has consulted with both government and international
agencies such as NSF and the United Nations as well as corporate enterprises
such as Tektronix and Teledyne. Dr. Dagli is a fellow of the Institute of
Electrical and Electronics Engineers (IEEE), an honor conferred to those with an
extraordinary record of accomplishments in the IEEE fields of
interest.
Over his
career, Dr. Dagli has pioneered many novel breakthrough technologies in
photonics and made significant contributions to compound semiconductor
electro-optic modulators that are critical to high-speed telecommunication
systems. His group was the first to demonstrate electron wave interference
effects and current switching in coupled electron wires. In enabling advanced
photonics research, Dr. Dagli made pioneering contributions to novel beam
propagation methods (BPMs) to account for wide angle and vector nature of
electromagnetic wave propagation. His BPMs are the most efficient in the world
today and are included in most commercial photonics simulation and engineering
software packages. Dr. Dagli’s novel slow wave traveling wave electrodes on
GaAs/AlGaAs epitaxial layers removed from their substrates allowed for the
realization and fabrication of optical modulators with bandwidths exceeding 40
GHz. Most recently, his research group broke the record for successfully making
the world’s lowest drive voltage optical modulator with drive voltages of 0.3
V.
Dr. Dagli
chaired and served on the technical program committees and advisory committees
of numerous leading conferences such as CLEO, CLEO Pacific Rim, IEEE Lasers and
Electro Optics Society Annual Meeting, IEEE International Topical Meeting on
Microwave Photonics, OSA Integrated Photonic and Nanophotonics Research and
Applications topical meeting, SPIE Photonics West and SPIE International
Symposium on Microtechnologies for the New Millennium. He served as a member of
editorial board of IEEE Transactions on Microwave Theory and Techniques,
1994-1998. Dr. Dagli was the Associate Editor for IEEE Photonics Technology
Letters from 1997 to 2000 and the Editor-in-Chief of IEEE Photonics Technology
Letters 2000-2005. He authored and coauthored over 150 referred journal and
conference publications, several book chapters as well an edited book entitled
“High Speed Photonic Devices” Published by Taylor and Francis.
Board
of Directors:
The
Directors of the Company are elected by the vote of a majority in interest of
the holders of the voting stock of the Company and hold office until the
expiration of the term for which he or she was elected and until a successor has
been elected and qualified.
A
majority of the authorized number of directors constitutes a quorum of the Board
for the transaction of business. The directors must be present at the
meeting to constitute a quorum. However, any action required or
permitted to be taken by the Board may be taken without a meeting if all members
of the Board individually or collectively consent in writing to the
action.
Directors
may receive compensation for their services and reimbursement for their expenses
as shall be determined from time to time by resolution of the
Board. The Company’s directors currently do not receive monetary
compensation for their service on the Board of Directors.
COMMITTEES
OF THE BOARD
We
currently have no audit committee, compensation committee, nominations and
governance committee of our board of directors.
INDEBTEDNESS
OF EXECUTIVE OFFICERS AND DIRECTORS
No
executive officer, director or any member of these individuals' immediate
families or any corporation or organization with whom any of these individuals
is an affiliate is or has been indebted to us since the beginning of our last
fiscal year.
25
FAMILY
RELATIONSHIPS
There are
no family relationships among our executive officers and directors.
LEGAL
PROCEEDINGS
As of the
date of this prospectus, there are no material proceedings to which any of our
directors, executive officers, affiliates or stockholders is a party adverse to
us.
CODE
OF ETHICS
We have
not adopted a Code of Ethics within the meaning of Item 406(b) of Regulation S-B
of the Securities Exchange Act of 1934.
EXECUTIVE
COMPENSATION
The table
below sets forth the compensation earned by each person acting as our Principal
Executive Officer, Principal Financial Officer and our other most highly
compensated executive officers whose total annual compensation exceeded $100,000
(together, the “Named Executive Officers”).
Name
& Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive Plan Compensation ($)
|
Non-Qualified
Deferred Compensation Earnings
($)
|
All
Other Compensation ($)
|
Total
($)
|
||||||||||||||||||||||||||
Timothy
Young, CEO and Acting CFO
|
2009
|
(1) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||
2010 | $ | 106,250 | (2) | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
(1)
|
The
Company was formed on February 18,
2009.
|
(2)
|
Pursuant
to the terms of the employment between the Company and Mr. Young, Mr.
Young shall receive a monthly compensation of $21,250 per month,
$255,000 annually.
|
Outstanding
Equity Awards at Fiscal Year-End
There
were no grants of options to purchase our common stock to the named executive
officers at June 30, 2009.
EMPLOYMENT
AGREEMENTS
Our CEO,
Timothy Young is employed as an “at- will” employee whose employment with the
Company may be terminated at any time by either party. We have agreed to pay Mr.
Young an annual salary of $255,000, subject to modification in accordance with
the Company’s policies, practices and procedures. In addition, we
have agreed to pay Mr. Young three months base salary, in the event his
employment is terminated by the Company. Mr. Young is eligible to receive a
quarterly bonus as determined by the Company’s Board of Directors and to
participate in any benefit plan implemented by the Company.
Our CTO,
Dr. Ronald Petkie, is also employed as an “at- will” employee whose employment
with the Company may be terminated at any time by either party. We have agreed
to pay Dr. Petkie an annual salary of $120,000, subject to modification in
accordance with the Company’s policies, practices and procedures. In
addition, we have agreed to pay Dr. Petkie three months base salary, in the
event his employment is terminated by the Company. Dr. Petkie is eligible to
receive a quarterly bonus as determined by the Company’s Board of Directors and
to participate in any benefit plan implemented by the Company.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
There are
no transactions, since the beginning of our last fiscal year, or any currently
proposed transaction, in which we are or was to be a participant and the amount
involved exceeds $ 120,000, and in which any related person had or will have a
direct or indirect material interest.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following tables sets forth, as of February 4, 2010, the number of and percent
of our common stock beneficially owned by:
·
|
all
directors and nominees, naming them,
|
·
|
our
executive officers,
|
·
|
our
directors and executive officers as a group, without naming them,
and
|
·
|
persons
or groups known by us to own beneficially 5% or more of our common
stock:
|
We
believe that all persons named in the table have sole voting and investment
power with respect to all shares of common stock beneficially owned by
them.
A person
is deemed to be the beneficial owner of securities that can be acquired by him
within 60 days from February 4, 2010 upon the exercise of options, warrants or
convertible securities. Each beneficial owner's percentage ownership is
determined by assuming that options, warrants or convertible securities that are
held by him, but not those held by any other person, and which are exercisable
within 60 days of February 4, 2010 have been exercised and
converted.
Name
of Beneficial Owner
|
Number
of Shares Beneficially Owned
|
Percentage of
Common Stock (1)
|
|
Common
Stock
|
Timothy
A. Young(2)
|
10,000,000
|
7.91%
|
Common
Stock
|
Dr.
Ronald Petkie (2)
|
5,000,000
|
3.96%
|
Common
Stock
|
Christopher
Marquis (2)
|
1,153,000
|
0.91%
|
Common
Stock
|
Cumorah
Capital, Inc.
|
32,363,300
(3)
|
25.61%
|
Common
Stock
|
Pearl
Innovations, LLC.
|
32,763,300
(4)
|
25.92%
|
Common
Stock
|
All
Executive Officers and Directors as a Group (3 persons)
|
16,000,000
|
12.66
%
|
(1)
|
Based
upon 126,369,000 shares issued and outstanding as of February 4
2010
|
(2)
|
Executive
Officers and Directors of the
Company
|
(3)
|
William
E. Beifuss holds voting and dispositive power over the shares held by
Cumorah Capital, Inc.
|
(4)
|
Elaine
Lei holds voting and dispositive power over the shares held by Pearl
Innovations, LLC.
|
DESCRIPTION
OF SECURITIES
We are
authorized by our Articles of Incorporation, as amended, to issue an aggregate
of 505,000,000 shares of capital stock, of which 500,000,000 are shares of
common stock, par value $.001 per share (the "Common Stock") and 5,000,000 are
shares of preferred stock, par value $.001 per share (the “Preferred Stock”). As
of February 4, 2010, we have 126,369,000 shares of Common Stock and no shares of
preferred issued and outstanding.
Common
Stock
All
outstanding shares of Common Stock are of the same class and have equal rights
and attributes. The holders of our Common Stock are entitled to one vote
per share on all matters submitted to a vote of our stockholders. All
stockholders are entitled to share equally in dividends, if any, as may be
declared from time to time by the Board of Directors out of funds legally
available. In the event of liquidation, the holders of our Common Stock are
entitled to share ratably in all assets remaining after payment of all
liabilities. The stockholders do not have cumulative or preemptive
rights.
27
The
payment by the Company of dividends, if any, in the future rests within the
discretion of its Board of Directors and will depend, among other things, upon
the Company’s earnings, capital requirements and financial condition, as well as
other relevant factors. The Company has not paid any dividends since
its inception and does not intend to pay any cash dividends in the foreseeable
future, but intends to retain all earnings, if any, for use in its
business.
Preferred
Stock
Our Articles of Incorporation authorize
the issuance of 5,000,000, par value $.001, shares of preferred
stock.
COMMISSION'S
POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Under the
Nevada General Corporation Law and our Articles of Incorporation, as amended,
and our Bylaws, our directors will have no personal liability to us or our
stockholders for monetary damages incurred as the result of the breach or
alleged breach by a director of his "duty of care." This provision does not
apply to the directors' (i) acts or omissions that involve intentional
misconduct or a knowing and culpable violation of law, (ii) acts or omissions
that a director believes to be contrary to the best interests of the corporation
or its stockholders or that involve the absence of good faith on the part of the
director, (iii) approval of any transaction from which a director derives an
improper personal benefit, (iv) acts or omissions that show a reckless disregard
for the director's duty to the corporation or its stockholders in circumstances
in which the director was aware, or should have been aware, in the ordinary
course of performing a director's duties, of a risk of serious injury to the
corporation or its stockholders, (v) acts or omissions that constituted an
unexcused pattern of inattention that amounts to an abdication of the director's
duty to the corporation or its stockholders, or (vi) approval of an unlawful
dividend, distribution, stock repurchase or redemption. This provision would
generally absolve directors of personal liability for negligence in the
performance of duties, including gross negligence.
The
effect of this provision in our Articles of Incorporation and Bylaws is to
eliminate the rights of our Company and our stockholders (through stockholder's
derivative suits on behalf of our Company) to recover monetary damages against a
director for breach of his fiduciary duty of care as a director (including
breaches resulting from negligent or grossly negligent behavior) except in the
situations described in clauses (i) through (vi) above. This provision does not
limit nor eliminate the rights of our Company or any stockholder to seek
non-monetary relief such as an injunction or rescission in the event of a breach
of a director's duty of care. In addition, our Bylaws provide that if the Nevada
General Corporation Law is amended to authorize the future elimination or
limitation of the liability of a director, then the liability of the directors
will be eliminated or limited to the fullest extent permitted by the law, as
amended. The Nevada General Corporation Law grants corporations the right to
indemnify their directors, officers, employees and agents in accordance with
applicable law.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 (the
"Act" or "Securities Act") may be permitted to directors, officers or persons
controlling our Company pursuant to the foregoing provisions, or otherwise, we
have 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.
PLAN
OF DISTRIBUTION
The
selling stockholders and any of their respective pledgees, donees, assignees and
other successors-in-interest may, from time to time, sell any or all of their
shares of common stock on any stock exchange, market or trading facility on
which the shares are traded or in private transactions. These sales may be at
fixed or negotiated prices. The selling stockholders may use any one or more of
the following methods when selling shares:
·
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits the purchaser;
|
·
|
block
trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
·
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for its
account;
|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
·
|
privately-negotiated
transactions;
|
·
|
broker-dealers
may agree with the selling stockholders to sell a specified number of such
shares at a stipulated price per
share;
|
·
|
a
combination of any such methods of sale;
and
|
·
|
any
other method permitted pursuant to applicable
law.
|
28
The
selling stockholders may also sell shares under Rule 144 under the Securities
Act, if available, or Regulation S, rather than under this prospectus. The
selling stockholders shall have the sole and absolute discretion not to accept
any purchase offer or make any sale of shares if they deem the purchase price to
be unsatisfactory at any particular time.
The
selling stockholders or their respective pledgees, donees, transferees or other
successors in interest, may also sell the shares directly to market makers
acting as principals and/or broker-dealers acting as agents for themselves or
their customers. Such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the selling stockholders and/or the
purchasers of shares for whom such broker-dealers may act as agents or to whom
they sell as principal or both, which compensation as to a particular
broker-dealer might be in excess of customary commissions. Market makers and
block purchasers purchasing the shares will do so for their own account and at
their own risk. It is possible that a selling stockholder will attempt to sell
shares of common stock in block transactions to market makers or other
purchasers at a price per share which may be below the then market price. The
selling stockholders cannot assure that all or any of the shares offered in this
prospectus will be sold by the selling stockholders. The selling stockholders
and any brokers, dealers or agents, upon effecting the sale of any of the shares
offered in this prospectus, may be deemed to be "underwriters" as that term is
defined under the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, or the rules and regulations under such acts. In such
event, any commissions received by such broker-dealers or agents and any profit
on the resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
We are
required to pay all fees and expenses incident to the registration of the
shares, including fees and disbursements of counsel to the selling stockholders,
but excluding brokerage commissions or underwriter discounts.
The
selling stockholders, alternatively, may sell all or any part of the shares
offered in this prospectus through an underwriter. No selling stockholder has
entered into any agreement with a prospective underwriter and there is no
assurance that any such agreement will be entered into.
The
selling stockholders may pledge their shares to their brokers under the margin
provisions of customer agreements. If a selling stockholders defaults on a
margin loan, the broker may, from time to time, offer and sell the pledged
shares. The selling stockholders and any other persons participating in the sale
or distribution of the shares will be subject to applicable provisions of the
Securities Exchange Act of 1934, as amended, and the rules and regulations under
such act, including, without limitation, Regulation M. These provisions may
restrict certain activities of, and limit the timing of purchases and sales of
any of the shares by, the selling stockholders or any other such person. In the
event that the selling stockholders are deemed affiliated purchasers or
distribution participants within the meaning of Regulation M, then the selling
stockholders will not be permitted to engage in short sales of common stock.
Furthermore, under Regulation M, persons engaged in a distribution of securities
are prohibited from simultaneously engaging in market making and certain other
activities with respect to such securities for a specified period of time prior
to the commencement of such distributions, subject to specified exceptions or
exemptions.
We have
agreed to indemnify the selling stockholders, or their transferees or assignees,
against certain liabilities, including liabilities under the Securities Act of
1933, as amended, or to contribute to payments the selling stockholders or their
respective pledgees, donees, transferees or other successors in interest, may be
required to make in respect of such liabilities.
If the
selling stockholders notify us that they have a material arrangement with a
broker-dealer for the resale of the common stock, then we would be required to
amend the registration statement of which this prospectus is a part, and file a
prospectus supplement to describe the agreements between the selling
stockholders and the broker-dealer.
PENNY
STOCK
The
Securities and Exchange Commission has adopted Rule 15g-9 which establishes the
definition of a "penny stock," for the purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions. For
any transaction involving a penny stock, unless exempt, the rules
require:
·
|
that
a broker or dealer approve a person's account for transactions in penny
stocks; and
|
·
|
the
broker or dealer receive from the investor a written agreement to the
transaction, setting forth the identity and quantity of the penny stock to
be purchased.
|
In order
to approve a person's account for transactions in penny stocks, the broker or
dealer must
·
|
obtain
financial information and investment experience objectives of the person;
and
|
·
|
make
a reasonable determination that the transactions in penny stocks are
suitable for that person and the person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks.
|
The
broker or dealer must also deliver, prior to any transaction in a penny stock, a
disclosure schedule prescribed by the Commission relating to the penny stock
market, which, in highlight form:
·
|
sets
forth the basis on which the broker or dealer made the suitability
determination; and
|
that
the broker or dealer received a signed, written agreement from the
investor prior to the transaction.
|
Disclosure
also has to be made about the risks of investing in penny stocks in both public
offerings and in secondary trading and about the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks.
29
Sichenzia
Ross Friedman Ference LLP, New York, New York will issue an opinion with respect
to the validity of the shares of common stock being offered hereby.
EXPERTS
Our
financial statements from inception (February 18, 2009) through June 30, 2009
appearing in this prospectus and registration statement have been audited by HJ
Associates & Consultants, LLP, independent registered public accountants, as
set forth on their report thereon appearing elsewhere in this prospectus, and
are included in reliance upon such report given upon the authority of such firm
as experts in accounting and auditing.
AVAILABLE
INFORMATION
We have
filed a registration statement on Form S-1 under the Securities Act of 1933, as
amended, relating to the shares of common stock being offered by this
prospectus, and reference is made to such registration statement. This
prospectus constitutes the prospectus of Hypersolar Inc., filed as part of the
registration statement, and it does not contain all information in the
registration statement, as certain portions have been omitted in accordance with
the rules and regulations of the Securities and Exchange
Commission.
We are
subject to the informational requirements of the Securities Exchange Act of 1934
which requires us to file reports, proxy statements and other information with
the Securities and Exchange Commission. Such reports, proxy statements and other
information may be inspected at public reference facilities of the SEC at 100 F
Street N.E. Washington, D.C. 20549. Copies of such material can be obtained from
the Public Reference Section of the SEC at 100 F Street N.E. Washington, D.C.
20549 at prescribed rates. Because we file documents electronically with the
SEC, you may also obtain this information by visiting the SEC's Internet website
at http://www.sec.gov.
30
INDEX
TO FINANCIAL STATEMENTS
HYPERSOLAR,
INC.
FINANCIAL
STATEMENTS
CONTENTS
Page | ||||
Balance Sheets for the period ending December 31, 2009 | F-2 | |||
Statements of Operations for the period ending December 31, 2009 | F-3 | |||
Statements of Shareholders' Equity (Deficit) for the period ending December 31, 2009 | F-4 | |||
Statements of Cash Flows for the period ending December 31, 2009 | F-5 | |||
Notes to financial statements for the period ending December 31, 2009 | F-6-F-8 | |||
Report of Independent Registered Public Accounting Firm | F-9 | |||
Balance Sheet for the period ending June 30, 2009 | F-10 | |||
Statement of Operations for the period ending June 30, 2009 | F-11 | |||
Statement of Shareholders' Deficit for the period ending June 30, 2009 | F-12 | |||
Statement of Cash Flows for the period ending June 30, 2009 | F-13 | |||
Notes to Financial Statements for the period ending June 30, 2009 | F-14-F-18 |
F-1
HYPERSOLAR. INC.
(A Development
Stage Company)
BALANCE SHEETS
December
31, 2009
|
June
30, 2009
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
CURRENT
ASSETS
|
||||||||
Cash
|
$ | 531,960 | $ | 3,657 | ||||
Prepaid
rent and security deposit
|
3,375 | - | ||||||
TOTAL
CURRENT ASSETS
|
535,335 | 3,657 | ||||||
PROPERTY
& EQUIPMENT
|
||||||||
Computers
and peripherals
|
3,211 | - | ||||||
Less:
accumulated depreciation
|
(277 | ) | - | |||||
NET
PROPERTY AND EQUIPMENT
|
2,934 | - | ||||||
OTHER
ASSETS
|
||||||||
Domain,
net of amortization $502 and $325, respectively
|
4,813 | 4,990 | ||||||
Patents
|
4,009 | 4,009 | ||||||
TOTAL
OTHER ASSETS
|
8,822 | 8,999 | ||||||
TOTAL
ASSETS
|
$ | 547,091 | $ | 12,656 | ||||
LIABILITIES
AND SHAREHOLDERS' EQUITY (DEFICIT)
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Accounts
payable
|
$ | 5,310 | $ | - | ||||
Accrued
expenses
|
181,463 | 1,045 | ||||||
Accrued
interest, related party
|
556 | 592 | ||||||
Note
payable, related party
|
- | 44,553 | ||||||
TOTAL
CURRENT LIABILITIES
|
187,329 | 46,190 | ||||||
SHAREHOLDERS'
EQUITY (DEFICIT)
|
||||||||
Preferred
Stock, $0.001 par value;
|
||||||||
5,000,000
authorized preferred shares
|
- | - | ||||||
Common
Stock, $0.001 par value;
|
||||||||
500,000,000
authorized common shares
|
||||||||
121,378,100
and 113,526,600 shares issued and outstanding,
respectively
|
121,377 | 113,526 | ||||||
Additional
Paid in Capital
|
671,762 | (105,537 | ) | |||||
Deficit
Accumulated during the Development Stage
|
(433,377 | ) | (41,523 | ) | ||||
TOTAL
SHAREHOLDERS' EQUITY (DEFICIT)
|
359,762 | (33,534 | ) | |||||
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
|
$ | 547,091 | $ | 12,656 | ||||
The
accompanying notes are an integral part of these financial statements
F-2
HYPERSOLAR. INC.
(A Development
Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
From
Inception on
|
||||||||||||
For
the Three
|
For
the Six
|
February
18, 2009
|
||||||||||
Months
Ended
|
Months
Ended
|
through
|
||||||||||
December
31, 2009
|
December
31, 2009
|
December
31, 2009
|
||||||||||
REVENUE
|
$ | - | $ | - | $ | - | ||||||
OPERATING
EXPENSES
|
||||||||||||
Selling
and marketing expenses
|
19,191 | 19,191 | 23,790 | |||||||||
General
and administrative expenses
|
222,648 | 303,704 | 307,286 | |||||||||
Research
and development
|
43,331 | 65,750 | 98,175 | |||||||||
Depreciation
and amortization
|
366 | 454 | 779 | |||||||||
TOTAL
OPERATING EXPENSES
|
285,536 | 389,099 | 430,030 | |||||||||
LOSS
FROM OPERATIONS BEFORE OTHER INCOME/(EXPENSES)
|
(285,536 | ) | (389,099 | ) | (430,030 | ) | ||||||
TOTAL
OTHER EXPENSES
|
||||||||||||
Interest
expense
|
(2,755 | ) | (2,755 | ) | (3,347 | ) | ||||||
LOSS
BEFORE PROVISION FOR INCOME TAXES
|
(288,291 | ) | (391,854 | ) | (433,377 | ) | ||||||
Provision
for income taxes
|
- | - | - | |||||||||
NET
LOSS
|
$ | (288,291 | ) | $ | (391,854 | ) | $ | (433,377 | ) | |||
BASIC
AND DILUTED LOSS PER SHARE
|
$ | (0.00 | ) | $ | (0.00 | ) | ||||||
WEIGHTED-AVERAGE
COMMON SHARES OUTSTANDING
|
||||||||||||
BASIC
AND DILUTED
|
117,080,736 | 115,303,668 | ||||||||||
The
accompanying notes are an integral part of these financial statements
F-3
HYPERSOLAR. INC.
(A Development
Stage Company)
STATEMENTS OF SHAREHOLDERS' EQUITY
(DEFICIT)
Deficit | ||||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||
Additional
|
during
the
|
|||||||||||||||||||||||||||
Preferred
stock
|
Common
stock
|
Paid-in
|
Development
|
|||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Stage
|
Total
|
||||||||||||||||||||||
Balance
at February 18, 2009
|
- | $ | - | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
Issuance
of common stock in April 2009 for cash
|
||||||||||||||||||||||||||||
(21,000,000
shares issued at $0.00005 per share)
|
- | - | 21,000,000 | 21,000 | (19,950 | ) | - | 1,050 | ||||||||||||||||||||
Issuance
of common stock in April 2009 for cash
|
||||||||||||||||||||||||||||
(92,526,600
shares issued at $0.000075 per share)
|
- | - | 92,526,600 | 92,526 | (85,587 | ) | - | 6,939 | ||||||||||||||||||||
Net
Loss from inception (February 18, 2009) through June 30,
2009
|
- | - | - | - | - | (41,523 | ) | (41,523 | ) | |||||||||||||||||||
Balance
at June 30, 2009
|
- | - | 113,526,600 | 113,526 | (105,537 | ) | (41,523 | ) | (33,534 | ) | ||||||||||||||||||
Issuance
of common stock in October 2009 for cash
|
||||||||||||||||||||||||||||
(1,270,000
shares issued at $0.10 per share) (unaudited)
|
- | - | 1,270,000 | 1,270 | 125,730 | - | 127,000 | |||||||||||||||||||||
Issuance
of common stock in November 2009 for cash
|
||||||||||||||||||||||||||||
(3,944,000
shares issued at $0.10 per share) (unaudited)
|
- | - | 3,944,000 | 3,944 | 390,456 | - | 394,400 | |||||||||||||||||||||
Issuance
of common stock in December 2009 for cash
|
||||||||||||||||||||||||||||
(2,637,500
shares issued at $0.10 per share) (unaudited)
|
- | - | 2,637,500 | 2,637 | 261,113 | - | 263,750 | |||||||||||||||||||||
Net
Loss for the six months ended December 31, 2009
(unaudited)
|
- | - | - | - | - | (391,854 | ) | (391,854 | ) | |||||||||||||||||||
Balance
at December 31, 2009 (unaudited)
|
- | $ | - | 121,378,100 | $ | 121,377 | $ | 671,762 | $ | (433,377 | ) | $ | 359,762 | |||||||||||||||
The
accompanying notes are an integral part of these financial statements
F-4
HYPERSOLAR.
INC.
(A Development
Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
For
the Six Months
Ended December
31, 2009 |
From
Inception on
February
18, 2009
through
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net
loss
|
$ | (391,854 | ) | $ | (433,377 | ) | ||
Adjustment
to reconcile net loss to net cash
|
||||||||
used
in operating activities
|
||||||||
Depreciation
& amortization expense
|
454 | 779 | ||||||
Change
in Assets and Liabilities:
|
||||||||
(Increase)
Decrease in:
|
||||||||
Deposits
|
(3,375 | ) | (3,375 | ) | ||||
Increase
(Decrease) in:
|
||||||||
Accounts
payable
|
5,310 | 5,310 | ||||||
Accrued
expenses
|
180,382 | 182,019 | ||||||
NET
CASH USED IN OPERATING ACTIVITIES
|
(209,083 | ) | (248,644 | ) | ||||
NET
CASH FLOWS USED IN INVESTING ACTIVITIES:
|
||||||||
Purchase
of fixed assets
|
(3,211 | ) | (3,211 | ) | ||||
Purchase
of intangible assets
|
- | (9,324 | ) | |||||
NET
CASH USED IN INVESTING ACTIVITIES
|
(3,211 | ) | (12,535 | ) | ||||
NET
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds
from note payable, related party
|
110,000 | 154,553 | ||||||
Payment
of notes payable, related party
|
(154,553 | ) | (154,553 | ) | ||||
Proceeds
from issuance of common stock
|
785,150 | 793,139 | ||||||
NET
CASH PROVIDED IN FINANCING ACTIVITIES
|
740,597 | 793,139 | ||||||
NET
INCREASE IN CASH
|
528,303 | 531,960 | ||||||
CASH,
BEGINNING OF PERIOD
|
3,657 | - | ||||||
CASH,
END OF PERIOD
|
$ | 531,960 | $ | 531,960 | ||||
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION
|
||||||||
Interest
paid
|
$ | 2,791 | $ | - | ||||
Taxes
paid
|
$ | - | $ | - | ||||
The
accompanying notes are an integral part of these financial statements
F-5
HYPERSOLAR,
INC.
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2009
1.
|
ORGANIZATION
AND LINE OF BUSINESS
|
Organization
HyperSolar,
Inc. (the "Company") was incorporated in the state of Nevada on February 18,
2009. The Company, based in Santa Barbara, California, began
operations on February 19, 2009 to develop and market a solar concentrator
technology.
The
accompanying interim unaudited condensed financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
for interim financial information and pursuant to the rules and regulations of
the Securities and Exchange Commission. Accordingly, they do not include all of
the information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the period ended December 31, 2009 are not necessarily indicative of
the results that may be expected for the year ending June 30, 2010. For further
information, refer to the audited financial statements for the period ended June
30, 2009 and the notes thereto included in the Company’s Report.
Line of
Business
The
Company is currently in the stage of developing a thin flat optical layer, that
can inexpensively collect and deliver substantially more sunlight onto solar
cells. With HyperSolar as the top layer, manufacturers can use significantly
fewer solar cells in the production of solar panels, thereby dramatically
reducing the cost per watt of electricity.
Going
Concern
The
accompanying financial statements have been prepared on a going concern basis of
accounting, which contemplates continuity of operations, realization of assets
and liabilities and commitments in the normal course of business. The
accompanying financial statements do not reflect any adjustments that might
result if the Company is unable to continue as a going concern. The
Company does not generate revenue, and has negative cash flows from operations,
which raise substantial doubt about the Company’s ability to continue as a going
concern. The ability of the Company to continue as a going concern
and appropriateness of using the going concern basis is dependent upon, among
other things, additional cash infusion. The Company has obtained
funds from its shareholders since its inception through the period ended
December 31, 2009. Management believes this funding will continue, and has also
obtained funding from new investors. Management believes the existing
shareholders and the prospective new investors will provide the additional cash
needed to meet the Company’s obligations as they become due, and will allow the
development of its core business.
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
|
This
summary of significant accounting policies of HyperSolar, Inc. is presented to
assist in understanding the Company’s financial statements. The financial
statements and notes are representations of the Company’s management, which is
responsible for their integrity and objectivity. These accounting policies
conform to accounting principles generally accepted in the United States of
America and have been consistently applied in the preparation of the financial
statements.
Development Stage Activities
and Operations
The
Company has been in its initial stages of formation and for the period ended
December 31, 2009, had no revenues. A development stage activity as one in which
all efforts are devoted substantially to establishing a new business and even if
planned principal operations have commenced, revenues are
insignificant.
F-6
HYPERSOLAR,
INC.
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2009
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
|
Revenue
Recognition
The
Company recognizes revenue when services are performed, and at the time of
shipment of products, provided that evidence of an arrangement exists, title and
risk of loss have passed to the customer, fees are fixed or determinable, and
collection of the related receivable is reasonably assured. To date, the Company
has had no revenues and is in the development stage.
Cash and Cash
Equivalent
The Company considers all highly liquid
investments with an original maturity of three months or less to be cash
equivalents.
Loss per Share
Calculations
Loss per
Share dictates the calculation of basic earnings per share and diluted earnings
per share. Basic earnings per share are computed by dividing income available to
common shareholders by the weighted-average number of common shares available.
Diluted earnings per share is computed similar to basic earnings per share
except that the denominator is increased to include the number of additional
common shares that would have been outstanding if the potential common shares
had been issued and if the additional common shares were dilutive. No shares for
employee options or warrants were used in the calculation of the loss per share
as they were all anti-dilutive. The Company’s diluted loss per share is the same
as the basic loss per share for the period ended December 31, 2009, as the
inclusion of any potential shares would have had an anti-dilutive effect due to
the Company generating a loss.
Recently issued
pronouncements
In June
2009, the FASB issued guidance under Accounting Standards Codification (“ASC”)
Topic 105, “Generally Accepted Accounting Principles” (SFAS No. 168, The FASB
Accounting Standards Codification TM and the Hierarchy of Generally Accepted
Accounting Principles). This guidance establishes the FASB ASC as the single
source of authoritative U.S. GAAP recognized by the FASB to be applied by
nongovernmental entities. Rules and interpretive releases of the SEC under
authority of federal securities laws are also sources of authoritative U.S. GAAP
for SEC registrants. SFAS 168 and the ASC are effective for financial statements
issued for interim and annual periods ending after September 15, 2009. The ASC
supersedes all existing non-SEC accounting and reporting standards. All other
non-grandfathered, non-SEC accounting literature not included in the ASC has
become non-authoritative. Following SFAS 168, the FASB will no longer issue new
standards in the form of Statements, FSPs, or EITF Abstracts. Instead, the FASB
will issue Accounting Standards Updates, which will serve only to update the
ASC, provide background information about the guidance, and provide the bases
for conclusions on the change(s) in the ASC. We adopted ASC 105 effective for
our financial statements issued as of December 31, 2009. The adoption of this
guidance did not have an impact on our financial statements but will alter the
references to accounting literature within the financial
statements.
In August
2009, the FASB issued guidance under Accounting Standards Update (“ASU”) No.
2009-05, “Measuring Liabilities at Fair Value”. This guidance clarifies how the
fair value a liability should be determined. This guidance is effective for the
first reporting period after issuance. We have adopted this guidance for our
interim period ending December 31, 2009. The adoption of this guidance has no
material impact on our financial statements
F-7
HYPERSOLAR,
INC.
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2009
3.
|
CAPITAL
STOCK
|
As of the
period ending June 30, 2009, the Company's authorized stock consisted of
70,000,000 shares of common stock with a par value of $0.001. On
September 9, 2009, the Company issued a twenty-to-one (20:1) split, and
increased the authorized shares to 500,000,000 of common stock with a par value
of $0.001. For the purpose of these notes, the effects of the forward
split have been reflected retroactively to the inception of the
Company.
As of
December 31, 2009, the Company’s authorized stock consisted of 500,000,000
shares of common stock, with a par value of $0.001. The Company is also
authorized to issue 5,000,000 shares of preferred stock with a par value of
$0.001 per share. The rights, preferences and privileges of the
holders of the preferred stock will be determined by the Board of Directors
prior to issuance of such shares. During the six months ended December 31, 2009,
the Company issued 7,851,500 shares of common stock at $0.10 per share for cash
in the amount of $785,150, through a private placement made pursuant to Rule 506
of Regulation D promulgated under section 4(2) of the Securities Act of 1933, as
amended
4.
|
PROMISSORY
NOTE PAYABLE RELATED PARTY
|
During
the six months ended December 31, 2009, an investor loaned the Company
additional funds for operations, in the amount of $110,000. The promissory notes
to the investor totaled $154,553, with interest bearing at 5% per annum. The
promissory notes were paid off as of December 31, 2009, which included interest
of $2,755.
5.
|
RENTAL
LEASE
|
The
Company entered into a lease for a one year term expiring on September 30, 2010.
The rent paid for the six months ended December 31, 2009 was
$6,751.
6.
|
SUBSEQUENT
EVENT
|
Management
evaluated subsequent events after the balance sheet date of December 31, 2009
through February 2, 2010.
On
January 26, 2010, the Company issued 1,520,800 shares of common stock for
services with a fair value of $152,080.
As of
January 29, 2010, through a private placement the Company issued 3,470,100
shares of common stock at a price of $0.10 per share for cash in the amount of
$347,010.
F-8
Report
of Independent Registered Public Accounting Firm
To the
Board of Directors
HyperSolar,
Inc.
We have
audited the accompanying balance sheet of HyperSolar, Inc. as of June 30, 2009,
and the related statements of operations, shareholders' equity (deficit), and
cash flows for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides 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 HyperSolar, Inc. as of June 30,
2009, and the results of its operations and its cash flows for the year then
ended, in conformity with U.S. generally accepted accounting
principles.
We were
not engaged to examine management's assessment of the effectiveness of
HyperSolar, Inc.'s internal control over financial reporting as of June 30, 2009
and accordingly, we do not express an opinion thereon.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in the Note 1 to the financial
statements, the Company has suffered a net loss from operations, and has
experienced negative cash flows from operations. This raises substantial doubt
about the Company's ability to continue as a going concern. Management's plans
in regard to these matters are also described in Note 1 to the financial
statements. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/
HJ Associates & Consultants, LLP
|
||||
HJ Associates & Consultants, LLP | ||||
Salt
Lake City, Utah
|
||||
January 20, 2010 |
F-9
HYPERSOLAR. INC.
(A Development
Stage Company)
BALANCE SHEET
June 30, 2009
ASSETS
|
||||
CURRENT
ASSETS
|
||||
Cash
|
$ | 3,657 | ||
TOTAL
CURRENT ASSETS
|
3,657 | |||
OTHER
ASSETS
|
||||
Domain,
net of amortization $325
|
4,990 | |||
Patents
|
4,009 | |||
TOTAL
OTHER ASSETS
|
8,999 | |||
TOTAL
ASSETS
|
$ | 12,656 | ||
LIABILITIES
AND SHAREHOLDERS' DEFICIT
|
||||
CURRENT
LIABILITIES
|
||||
Accrued
expenses
|
$ | 1,045 | ||
Accrued
interest, related party
|
592 | |||
Note
payable, related party
|
44,553 | |||
TOTAL
CURRENT LIABILITIES
|
46,190 | |||
SHAREHOLDERS'
DEFICIT
|
||||
Preferred
Stock, $0.001 par value;
|
||||
5,000,000
authorized preferred shares
|
- | |||
Common
Stock, $0.001 par value;
|
||||
500,000,000
authorized common shares
|
||||
113,526,600
shares issued and outstanding
|
113,526 | |||
Additional
Paid in Capital
|
(105,537 | ) | ||
Deficit
Accumulated during the Development Stage
|
(41,523 | ) | ||
TOTAL
SHAREHOLDERS' DEFICIT
|
(33,534 | ) | ||
TOTAL
LIABILITIES AND SHAREHOLDERS' DEFICIT
|
$ | 12,656 | ||
The
accompanying notes are an integral part of these financial statements
F-10
HYPERSOLAR. INC.
(A Development
Stage Company)
STATEMENT OF OPERATIONS
From
Inception on
|
||||
February
18, 2009
|
||||
through
|
||||
June
30, 2009
|
||||
REVENUE
|
$ | - | ||
OPERATING
EXPENSES
|
||||
Selling
and marketing expenses
|
4,599 | |||
General
and administrative expenses
|
3,582 | |||
Research
and development
|
32,425 | |||
Depreciation
and amortization
|
325 | |||
TOTAL
OPERATING EXPENSES
|
40,931 | |||
LOSS FROM OPERATIONS BEFORE OTHER INCOME/(EXPENSES) | (40,931 | ) | ||
TOTAL
OTHER EXPENSES
|
||||
Interest
expense
|
(592 | ) | ||
LOSS
BEFORE PROVISION FOR INCOME TAXES
|
(41,523 | ) | ||
Provision
for income taxes
|
- | |||
NET
LOSS
|
$ | (41,523 | ) | |
BASIC
AND DILUTED LOSS PER SHARE
|
$ | 0.00 | ||
WEIGHTED-AVERAGE
COMMON SHARES OUTSTANDING
|
||||
BASIC
AND DILUTED
|
57,941,532 | |||
The
accompanying notes are an integral part of these financial
statements
F-11
HYPERSOLAR. INC.
(A Development
Stage Company)
STATEMENT OF SHAREHOLDERS'
DEFICIT
Deficit
|
||||||||||||||||||||||||||||
Accumulated
|
||||||||||||||||||||||||||||
Additional
|
during
the
|
|||||||||||||||||||||||||||
Preferred
stock
|
Common
stock
|
Paid-in
|
Development
|
|||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Stage
|
Total
|
||||||||||||||||||||||
Balance
at February 18, 2009
|
- | $ | - | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
Issueance
of common stock in April 2009 for cash
|
||||||||||||||||||||||||||||
(21,000,000
shares issued at $0.001 per share)
|
- | - | 21,000,000 | 21,000 | (19,950 | ) | - | 1,050 | ||||||||||||||||||||
Issueance
of common stock in April 2009 for cash
|
||||||||||||||||||||||||||||
(92,526,600
shares issued at $0.0015 per share)
|
- | - | 92,526,600 | 92,526 | (85,587 | ) | - | 6,939 | ||||||||||||||||||||
Net
Loss from inception (February 18, 2009) through June 30,
2009
|
- | - | - | - | - | (41,523 | ) | (41,523 | ) | |||||||||||||||||||
Balance
at June 30, 2009
|
- | $ | - | 113,526,600 | $ | 113,526 | $ | (105,537 | ) | $ | (41,523 | ) | $ | (33,534 | ) | |||||||||||||
The accompanying notes are an integral part of these
financial statements
F-12
HYPERSOLAR. INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
From
Inception on
|
||||
February
18, 2009
|
||||
through
|
||||
June
30, 2009
|
||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||
Net
loss
|
$ | (41,523 | ) | |
Adjustment
to reconcile net loss to net cash
|
||||
used
in operating activities
|
||||
Depreciation
& amortization expense
|
325 | |||
Change
in Assets and Liabilities:
|
||||
Increase
(Decrease) in:
|
||||
Accrued
Expenses
|
1,637 | |||
NET
CASH USED IN OPERATING ACTIVITIES
|
(39,561 | ) | ||
NET
CASH FLOWS USED IN INVESTING ACTIVITIES:
|
||||
Purchase
of intangible assets
|
(9,324 | ) | ||
NET
CASH USED IN INVESTING ACTIVITIES
|
(9,324 | ) | ||
NET
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||
Proceeds
from note payable, related party
|
44,553 | |||
Proceeds
from issuance of common stock
|
7,989 | |||
NET
CASH PROVIDED IN FINANCING ACTIVITIES
|
52,542 | |||
NET
INCREASE IN CASH
|
3,657 | |||
CASH,
BEGINNING OF YEAR
|
- | |||
CASH,
END OF YEAR
|
$ | 3,657 | ||
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION
|
||||
Interest
paid
|
$ | - | ||
Taxes
paid
|
$ | - | ||
The accompanying notes are an integral part of these
financial statements
F-13
HYPERSOLAR,
INC.
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
JUNE
30, 2009
1. ORGANIZATION
AND LINE OF BUSINESS
Organization
HyperSolar,
Inc. (the "Company") was incorporated in the state of Nevada on February 18,
2009. The Company, based in Santa Barbara, California, began
operations on February 19, 2009 to develop and market a solar concentrator cell
technology.
Line of
Business
The
Company is currently in the stage of developing a thin flat optical layer, that
can inexpensively collect and deliver substantially more sunlight onto solar
cells. With HyperSolar as the top layer, manufacturers can use significantly
fewer solar cells in the production of solar panels, thereby dramatically
reducing the cost per watt of electricity.
Going
Concern
The
accompanying financial statements have been prepared on a going concern basis of
accounting, which contemplates continuity of operations, realization of assets
and liabilities and commitments in the normal course of business. The
accompanying financial statements do not reflect any adjustments that might
result if the Company is unable to continue as a going concern. The
Company does not generate revenue, and has negative cash flows from operations,
which raise substantial doubt about the Company’s ability to continue as a going
concern. The ability of the Company to continue as a going concern
and appropriateness of using the going concern basis is dependent upon, among
other things, additional cash infusion. The Company has obtained
funds from its shareholders since its inception through the period ended June
30, 2009. Management believes this funding will continue, and has also obtained
funding from new investors. Management believes the existing
shareholders and the prospective new investors will provide the additional cash
needed to meet the Company’s obligations as they become due, and will allow the
development of its core business.
2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
This
summary of significant accounting policies of HyperSolar, Inc. is presented to
assist in understanding the Company’s financial statements. The financial
statements and notes are representations of the Company’s management, which is
responsible for their integrity and objectivity. These accounting policies
conform to accounting principles generally accepted in the United States of
America and have been consistently applied in the preparation of the financial
statements.
Development Stage Activities
and Operations
The
Company has been in its initial stages of formation and for the period ended
June 30, 2009, had no revenues. A development stage activity as one in which all
efforts are devoted substantially to establishing a new business and even if
planned principal operations have commenced, revenues are
insignificant.
Revenue
Recognition
The
Company recognizes revenue when services are performed, and at the time of
shipment of products, provided that evidence of an arrangement exists, title and
risk of loss have passed to the customer, fees are fixed or determinable, and
collection of the related receivable is reasonably assured. To date, the Company
has had no revenues and is in the development stage.
Cash and Cash
Equivalent
The Company considers all highly liquid
investments with an original maturity of three months or less to be cash
equivalents.
F-14
HYPERSOLAR,
INC.
(A
Development Stage Company)
NOTES TO
FINANCIAL STATEMENTS
JUNE
30, 2009
2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Use of
Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the accompanying financial
statements. Significant estimates made in preparing these financial
statements include the estimate of useful lives of intangible assets, and the
deferred tax valuation allowance. Actual results could differ from those
estimates.
Fair Value of Financial
Instruments
Disclosures
about fair value of financial instruments, requires disclosure of the fair value
information, whether or not recognized in the balance sheet, where it is
practicable to estimate that value. As of June 30, 2009, the amounts reported
for cash, accrued interest and other expenses, and notes payable approximate the
fair value because of their short maturities.
Loss per Share
Calculations
Loss per
Share dictates the calculation of basic earnings per share and diluted earnings
per share. Basic earnings per share are computed by dividing income available to
common shareholders by the weighted-average number of common shares available.
Diluted earnings per share is computed similar to basic earnings per share
except that the denominator is increased to include the number of additional
common shares that would have been outstanding if the potential common shares
had been issued and if the additional common shares were dilutive. No shares for
employee options or warrants were used in the calculation of the loss per share
as they were all anti-dilutive. The Company’s diluted loss per share is the same
as the basic loss per share for the period ended June 30, 2009, as the inclusion
of any potential shares would have had an anti-dilutive effect due to the
Company generating a loss.
Income
Taxes
The
Company uses the liability method of accounting for income
taxes. Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to financial statements carrying amounts of
existing assets and liabilities and their respective tax bases and operating
loss and tax credit carry-forwards. The measurement of deferred tax
assets and liabilities is based on provisions of applicable tax
law. The measurement of deferred tax assets is reduced, if necessary,
by a valuation allowance based on the amount of tax benefits that, based on
available evidence, is not expected to be realized.
Advertising
Costs
The
Company expenses the cost of advertising and promotional materials when
incurred. Total advertising costs were $3,491 for the period ended
June 30, 2009.
Stock based
Compensation
Share-based
Payment applies to transactions in which an entity exchanges its equity
instruments for goods or services and also applies to liabilities an entity may
incur for goods or services that are to follow a fair value of those equity
instruments. The Company will be required to follow a fair value approach using
an option-pricing model, such as the Black Scholes option valuation model, at
the date of a stock option grant. The deferred compensation calculated under the
fair value method would then be amortized over the respective vesting period of
the stock option.
Recently issued
pronouncements
The
Company has adopted the accounting pronouncement for subsequent events, which
establish general standards of accounting for and disclosure of events that
occur after the balance sheet date but before financial statements are issued.
This guidance applies to interim or annual periods ending after June 15, 2009.
The adoption of this guidance did not have a material effect on the Company's
financial statements.
F-15
HYPERSOLAR,
INC.
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
JUNE
30, 2009
3.
CAPITAL
STOCK
As of
June 30, 2009, the Company’s authorized stock consisted of 70,000,000 shares of
common stock, with a par value of $0.001. Subsequently, the Company issued a
twenty-to-one (20:1) split, and increased the authorized shares to 500,000,000
shares of common stock, with a par value of $0.001 already being
effected. The Company is also authorized to issue 5,000,000 shares of
preferred stock with a par value of $0.001 per share. The rights,
preferences and privileges of the holders of the preferred stock will be
determined by the Board of Directors prior to issuance of such shares. During
the period ended June 30, 2009, the Company issued 1,050,000 founders shares of
common stock at $0.001 per share for cash in the amount of $1,050; Also, the
Company issued 4,626,330 shares of common at $0.0015 per share for cash in the
amount of $6,939.
4. INTANGIBLE
ASSETS
|
Intangible
assets that have finite useful lives continue to be amortized over their
useful lives, and are reviewed for impairment when warranted by economic
condition.
|
Useful Lives | 2009 | ||||
Domain - gross | 15 years | $ | 5,315 | ||
Less amortization | (325 | ) | |||
Domain - net | $ | 4,990 | |||
Patents - gross | 15 years | $ | 4,009 |
5.
INCOME TAXES
The Company files income tax returns in the U.S. Federal jurisdiction, and the state of California. The Company’s initial federal, state and local filings are subject to tax examinations for three years following the filing date.
Included
in the balance at June 30, 2009, are no tax positions for which the ultimate
deductibility is highly certain, but for which there is uncertainty about the
timing of such deductibility. Because of the impact of deferred tax
accounting, other than interest and penalties, the disallowance of the shorter
deductibility period would not affect the annual effective tax rate but would
accelerate the payment of cash to the taxing authority to an earlier
period.
The
Company's policy is to recognize interest accrued related to unrecognized tax
benefits in interest expense and penalties in operating expenses. During the
period ended June 30, 2009, the Company did not recognize interest and
penalties.
6.
DEFERRED
TAX BENEFIT
|
At
June 30, 2009, the Company had net operating loss carry-forwards of
approximately $40,900 that may be offset against future taxable income
from the year 2010 through 2030. No tax benefit has been reported in the
financial statements since the potential tax benefit is offset by a
valuation allowance of the same
amount.
|
|
The
income tax provision differs from the amount of income tax determined by
applying the U.S. federal income tax rate of 40% to pretax income from
continuing operations for the period ended June 30, 2009 due to the
following:
|
F-16
HYPERSOLAR,
INC.
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
JUNE
30, 2009
6.
DEFERRED
TAX BENEFIT (continued)
2009 | ||||
Book income | $ | (16,609 | ) | |
Amortization | - | |||
Related party accrual | - | |||
Valuation | 16,609 | |||
Income tax expense | $ | - |
|
Deferred
taxes are provided on a liability method whereby deferred tax assets are
recognized for deductible differences and operating loss and tax credit
carry-forwards and deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the difference between
the reported amounts of assets and liabilities and their tax bases.
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. Deferred tax assets and
liabilities are adjusted for the effects of changes in tax laws and rates
on the date of enactment.
|
|
Net
deferred tax liabilities consist of the following components as of June
30, 2009:
|
2009 | ||||
Deferred tax assets: | ||||
NOL carryover | $ | 16,354 | ||
Related party accrual | 237 | |||
Deferred tax liabilities: | ||||
Amortization | 8 | |||
Less Valuation Allowance | (16,609 | ) | ||
Net deferred tax asset | $ | - |
|
Due
to the change in ownership provisions of the Tax Reform Act of 1986, net
operating loss carry-forwards for Federal income tax reporting purposes
are subject to annual limitations. Should a change in ownership occur, net
operating loss carry-forwards may be limited as to use in future
years.
|
7.
PROMISSORY NOTE PAYABLE RELATED PARTY
During the period ended June 30, 2009,
the Company issued promissory notes in the amount of $44,553. The promissory
notes are from an investor, and the note bears interest at 5% per annum. The
notes are due and payable upon demand by the holder. Interest expense for the
period was $592.
F-17
HYPERSOLAR,
INC.
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
JUNE
30, 2009
7.
SUBSEQUENT EVENT
Management
evaluated subsequent events after the balance sheet date of June 30, 2009
through January 20, 2010.
|
The
Company entered into a one year lease agreement on August 31, 2009, to
commence renting space on September 1, 2009. The monthly rental is
$1,402.50.
|
|
On
September 1, 2009, the Company entered into an employment agreement with
Tim Young. Mr. Young was appointed President and CEO. Also, the Company
entered into an employment agreement with Ronald Petkie. Mr. Petkie was
appointed Chief Technology Officer.
|
|
On
September 9, 2009, the Company agreed upon a twenty-for-one (20:1) forward
split of its outstanding common stock. The financial statements have been
adjusted retroactively to reflect this split. Also, the Company gained
approval from the Board of Directors to increase its authorized common
stock to 500,000,000.
|
|
As
of January 15, 2010, through a private placement the Company issued
10,816,500 shares of common stock post split at a price of $0.10 per
share.
|
F-18
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
13. Other Expenses of Issuance and Distribution
The
following table sets forth the estimated costs and expenses to be incurred in
connection with the issuance and distribution of the securities registered under
this registration statement. All amounts are estimates except the Commission
registration fee. The following expenses will be borne solely by
us.
Commission
registration fee
|
$
|
155.31
|
||
Legal
fees and expenses
|
$
|
65,000.00
|
||
Accounting
fees and expenses
|
$
|
15,000.00
|
||
Miscellaneous
expenses
|
$
|
5,000.00
|
||
Total
|
$
|
85,155.31
|
We have
agreed to bear expenses incurred by the selling stockholders that relate to the
registration of the shares of common stock being offered and sold by the selling
stockholders.
Item
14. Indemnification of Directors and Officers
Under the
Nevada Revised Statutes and our Articles of Incorporation, as amended, our
directors will have no personal liability to us or our stockholders for monetary
damages incurred as the result of the breach or alleged breach by a director of
his "duty of care". This provision does not apply to the directors' (i) acts or
omissions that involve intentional misconduct or a knowing and culpable
violation of law, (ii) acts or omissions that a director believes to be contrary
to the best interests of the corporation or its shareholders or that involve the
absence of good faith on the part of the director, (iii) approval of any
transaction from which a director derives an improper personal benefit, (iv)
acts or omissions that show a reckless disregard for the director's duty to the
corporation or its shareholders in circumstances in which the director was
aware, or should have been aware, in the ordinary course of performing a
director's duties, of a risk of serious injury to the corporation or its
shareholders, (v) acts or omissions that constituted an unexcused pattern of
inattention that amounts to an abdication of the director's duty to the
corporation or its shareholders, or (vi) approval of an unlawful dividend,
distribution, stock repurchase or redemption. This provision would generally
absolve directors of personal liability for negligence in the performance of
duties, including gross negligence.
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 Securities 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 Securities Act and will be governed by the final
adjudication of such issue.
Item 15. Recent Sales of Unregistered
Securities
In April
2009, the Company issued a total of 1,050,000 (or 21,000,000 post 20-for-1
forward split) shares of the Company¹s common stock as founder's shares for
an aggregate sum of $1,050.00.
In April
2009 the Company issued a total of 4,626,330 (or 92,526,600 post 20-for-1
forward split) shares of the Company's common stock to accredited investors for
an aggregate sum of $6,940.00
In
January 2010 the Company completed a private placement for 11,321,600 shares of
the Company's common stock for an aggregate proceeds of
$1,132,160.
In
January 2010, the Company issued a total of 1,367,800 shares of the
Company's common stock to a consultant for services rendered.
In
January 2010, the Company issued a total of 153,000 shares of the Company's
common stock to the company's secretary for services
rendered.
II-1
* All of
the above offerings and sales were deemed or determined by HyperSolar, Inc. to
be exempt under rule 506 of Regulation D and Section 4(2) of the Securities Act
of 1933, as amended. No advertising or general solicitation was employed in
offering the securities. The offerings and sales were made to a limited number
of persons, all of whom were accredited investors, business associates of
HyperSolar, Inc. or executive officers of HyperSolar, Inc., and transfer was
restricted by HyperSolar, Inc. in accordance with the requirements of the
Securities Act of 1933. In addition to representations by the above-referenced
persons, we have made independent determinations that all of the
above-referenced persons were accredited or sophisticated investors, and that
they were capable of analyzing the merits and risks of their investment, and
that they understood the speculative nature of their investment.
ITEM
16. EXHIBITS.
The
following exhibits are included as part of this Form S-1.
Exhibit
No.
|
Description
|
|
Articles
of Incorporation of HyperSolar, Inc. filed with the Nevada Secretary
of State on February 18, 2009. *
|
||
3.2
|
Articles
of Amendment of Articles of Incorporation of HyperSolar, Inc. filed with
the Nevada Secretary of State on September 11, 2009. *
|
|
3.4
|
Bylaws
of HyperSolar, Inc. *
|
|
5.1
|
Opinion
of Sichenzia Ross Friedman Ference LLP.*
|
|
10.1
|
Form
of Subscription Agreement dated as of ____________, 2009.
*
|
|
23.1
|
Consent
of Sichenzia Ross Friedman Ference LLP (included in Exhibit
5.1).*
|
|
23.2
|
Consent
of HJ Associates & Consultants,
LLP*
|
*Filed
herewith.
II-2
Incorporated by reference to the
Form S-1, filed by the Company with the Securities and Exchange Commission on
November 12, 2008.
Item 17. Undertakings
The
undersigned Company hereby undertakes to:
(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 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
Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement,
and
(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 which remain unsold at the termination of the
offering.
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 Securities 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 Securities Act and will be governed by the final
adjudication of such issue.
The undersigned registrant hereby
undertakes:
That, for
the purpose of determining liability under the Securities Act of 1933 to any
purchaser, 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.
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:
II-3
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
II-4
SIGNATURES
In
accordance with 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 for filing on Form S-1 and authorized this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Santa Barbara, State of California, on February 4, 2010.
HyperSolar,
Inc.
|
||
By:
|
/s/ Timothy Young | |
Timothy
Young
|
||
CHIEF
EXECUTIVE OFFICER (PRINCIPAL EXECUTIVE OFFICER) AND ACTING CHIEF FINANCIAL
OFFICER (PRINCIPAL ACCOUNTING AND FINANCIAL
OFFICER)
|
POWER
OF ATTORNEY
Each
person whose signature appears below constitutes and appoints Timothy
Young as his true and lawful attorneys in fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments (including post
effective amendments) to the Registration Statement, and to sign any
registration statement for the same offering covered by this Registration
Statement that is to be effective upon filing pursuant to Rule 462(b) under the
Securities Act of 1933, as amended, and all post effective amendments thereto,
and to file the same, with all exhibits thereto, and all documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his or her 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 Registration Statement
on Form S-1 has been signed below by the following persons in the
capacities and on the dates indicated:
SIGNATURE
|
TITLE
|
DATE
|
||
CHIEF
EXECUTIVE OFFICER
|
February
4, 2010
|
|||
/s/ Timothy
Young
|
(PRINCIPAL
EXECUTIVE OFFICER),
ACTING
CHIEF FINANCIAL OFFICER
|
|||
Timothy
Young
|
(PRINCIPAL
ACCOUNTING AND
|
|||
FINANCIAL
OFFICER) AND
|
||||
CHAIRMAN
OF THE BOARD
|
||||
/s/ Christopher Marquis
|
DIRECTOR
|
February
4 2010
|
||
Christopher
Marquis
|
||||