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EX-23.1 - MANTHEY REDMOND Corp | v188755_ex23-1.htm |
As
filed with the Securities and Exchange Commission on
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Registration No.
333-161600
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SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Amendment
No. 2 to
FORM
S-1
REGISTRATION
STATEMENT UNDER
THE
SECURITIES ACT OF 1933
MANTHEY
REDMOND CORPORATION
(Exact
name of registrant as specified in its charter)
Delaware
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3510
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26-4722406
|
||
State
or other jurisdiction of
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Primary
Standard Industrial
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(I.R.S.
Employer
|
||
incorporation
or organization
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Classification
Code Number)
|
Identification
Number)
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10940
Wilshire Boulevard, Suite 1600
Los
Angeles, California 90024
(310)
443-4116
(Address,
including zip code, and telephone number, including area code
of
registrant’s principal executive offices)
Steven
Charles Manthey
10940
Wilshire Boulevard, Suite 1600
Los
Angeles, California 90024
(310)
443-4116
(Name,
address, including zip code, and telephone number,
including
area code, of agent for service)
with copy
to
Lee W.
Cassidy, Esq.
Cassidy
& Associates
215
Apolena Avenue
Newport
Beach, California
202/387-5400 949/673-4525
(fax)
Approximate
Date of Commencement
of proposed sale to the public:
As soon as practicable after the effective date of this Registration
Statement.
If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, check
the following box. x
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. ¨
If this
Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following
box and list the Securities Act registration statement number of the earlier
registration statement for the same offering. ¨
If this
Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following
box and list the Securities Act registration number of the earlier effective
registration statement for the same offering. ¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definitions “large accelerated filer,”“accelerated file,” and
“smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check
one):
Large
accelerated filer ¨
|
Accelerated
filed ¨
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Non-accelerated
filed ¨
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Smaller
reporting company x
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CALCULATION OF REGISTRATION
FEE
Proposed
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Proposed
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|||||||||||||
Amount
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Maximum
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Maximum
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Amount of
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|||||||||||
Title of Each Class of
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to be
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Offering Price
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Aggregate
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Registration
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||||||||||
Securities to be Registered
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Registered
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Per Unit(1)
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Offering Price |
Fee (2)
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||||||||||
Common
Stock held by Selling Shareholders
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3,729,200 shares
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$ | 0.10 | $ | 372,920 | $ | 14.66 | |||||||
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||||||||||||||
Total
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3,729,200
shares
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$ | 0.10 | $ | 372,920 | $ | 14.66 |
(1)
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There
is no current market for the securities and the price at which the Shares
are being offered has been arbitrarily set d by the Company at par value
and used for the purpose of computing the amount of the registration fee
in accordance with Rule 457 under the Securities Act of 1933, as
amended.
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(2)
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Paid
by electronic transfer.
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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.
The information contained in this
prospectus is not complete and may be changed. A registration statement
relating to these securities has been filed with the Securities and Exchange
Commission and these securities may not be sold until that registration
statement becomes 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.
PROSPECTUS
|
Subject
to Completion, Dated ______ ,
2010
|
MANTHEY
REDMOND CORPORATION
3,729,200 shares of
Common Stock
to
be sold by the holders of such stock
This
prospectus relates to 3,729,200 shares of common stock of Manthey Redmond
Corporation ("Manthey Redmond (US)" or the “Company”), a Delaware
company (the “Company”), $.0001 par value per share, to be sold by
the holders of such stock (the "selling shareholders"). The selling
shareholders' shares offered by this Prospectus may be sold from time to time by
the selling shareholders at a price of $0.10 per share until such time as the
Company’s shares are listed on the OTC Bulletin Board or a national exchange and
thereafter at prevailing market prices or at privately negotiated prices, in one
or more transactions that may take place on the over-the-counter market
including ordinary broker's transactions, privately-negotiated transactions or
through sales to one or more dealers for resale of such. Usual and
customary or specifically negotiated brokerage fees or commissions may be paid
by the selling shareholders in connection with such sales.
No
underwriting arrangements have been entered into by any of the selling
shareholders. The selling shareholders and any intermediaries through whom
such securities are sold may be deemed "underwriters" within the meaning of the
Securities Act of 1933, as amended (the "Securities Act") with respect to the
securities offered and any profits realized or commissions received may be
deemed underwriting compensation.
Proceeds to selling
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|||||||||
Assumed Price
|
shareholders before
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||||||||
To Public
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Commissions
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expenses and commissions
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|||||||
Per Share
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$ | 0.10 |
Not applicable
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$ | 0.10 | ||||
Total
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$ | 372,920 |
Not
applicable
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$ | 372,920 |
The
Company will not receive any of the proceeds from the sale of shares by the
selling shareholders. All costs incurred in the registration of the
selling shareholders shares being offered by the selling shareholders are being
borne by the Company.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR
ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
These
securities involve a high degree of risk. See “RISK FACTORS” contained in
this prospectus beginning on page __.
10940
Wilshire Boulevard, Suite 1600
Los
Angeles, California 90024
(310)
443-4116
Prospectus
dated __________________, 2010
TABLE
OF CONTENTS
Prospectus
Summary
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1
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Risk
Factors
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3
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Forward
Looking Statement
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7
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Use
of Proceeds
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7
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Determination
of Offering Price
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7
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Dilution
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8
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Selling
Shareholders
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8
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Plan
of Distribution
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13
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Description
of Securities
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14
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The
Business
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15
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The
Company
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18
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Plan
of Operation
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23
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Management's
Discussion and Analysis of Financial Condition and Results of
Operations
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24
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Management
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28
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Executive
Compensation
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29
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Security
Ownership of Certain Beneficial Owners and Management
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29
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Certain
Relationships and Related Transactions
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30
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Shares
Eligible for Future Sales
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31
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Interest
of Named Experts and Counsel
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31
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Experts
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31
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Disclosure
of Commission Position of Indemnification for Securities Act
Liabilities
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31
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Financial
Statements
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33
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Part
II
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34
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Other
Expenses of Issuance and Distribution
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34
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Indemnification
of directors and Officers
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34
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Recent
Sales of Unregistered Securities
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34
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Exhibits
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36
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Signatures
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Until
_______________, all dealers that effect transactions in these
securities, whether or not participating in this offering, may be required to
deliver a prospectus. This is in addition to the dealers' obligation to deliver
a prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
PROSPECTUS
SUMMARY
This
summary highlights some information from this prospectus, and it may not contain
all the information important to making an investment decision. A
potential investor should read the following summary together with the more
detailed information regarding the Company and the common stock being sold in
this offering, including “Risk Factors” and the financial statements and related
notes, included elsewhere in this prospectus.
The
Company
The
Business
Manthey
Redmond (US) is a development stage company incorporated in Delaware in April,
2009, to exploit and market certain internal combustion engine technology now
leased by it from its Australian affiliate, Manthey Redmond (Aust).
Manthey Redmond (Aust) Pty Ltd., an Australian corporation ("Manthey Redmond
(Aust)"), is the patent owner and developer of the technology and the Manthey
Redmond Eco-Engine, a fuel-efficient, lightweight, low-emission, multi-fuel
engine smaller and less expensive than conventional internal combustion engines
initially targeted for marine applications. The Company has entered into
two agreements with Manthey Redmond (Aust): (i) the licensing
agreement for the development, manufacture, use, sale, and sublicense of the
Manthey Redmond Eco-Engine and all developed technology and products related to
the technology (the "Technology") for a royalty payment to Manthey Redmond
(Aust) of 5% of annual gross profits and (ii) a investment agreement by which
Manthey Redmond (Aust) will fund the Company with monthly payments of $40,000,
up to a maximum of $4,200,000 to assist the Company in its commercialization and
development of the Technology. These two agreements and the development
agreement discussed below are with Australian affiliates that are owned and
controlled by the officer and directors of the Company.
Manthey
Redmond (US) has also entered into a development agreement with Manthey Holdings
Pty Limited for the use of Manthey Holdings' engineering facility and
employees for research and development of and related to the Technology for a
monthly fee of $30,000. Manthey Holdings is a 29.6% shareholder in the
Company. The Company anticipates that it will endeavor to form
co-development agreements and/or license agreements to succeed the development
agreement. However, in the event that such relationships are not developed
or not developed sufficiently to manufacture and develop the engines, the
Company maintains a direct relationship with the Manthey Holding's facility
which contemplates the possible extension of the development
agreement.
Although
the Technology is leased from an Australian company and the research and
development facility is outsourced to Australia, Manthey Redmond (US) intends to
market the Technology principally in the United States and will seek to form
alliances with U.S. based manufacturers for such market development. The
Company will, at least initially, utilize the facilities of its Australian
affiliate for the research, design and development of the Technology but the
focus of such research, design and development will be for use and success of
the Technology and Eco-Engine in the American market. Although outsourcing
the research and manufacturing., the Company anticipates building its sales and
marketing network in the United States with a business plan and focus directed
to the U.S. market.
In
addition to the revenue provided by Manthey Redmond (Aust), Manthey Redmond (US)
will seek to raise revenue through co-development and co-licensing agreements
with manufacturers principally located in the United States. Manthey
Redmond (US) intends to market and sell the Manthey Redmond Eco-Engines in the
United States and to develop the sale of such engines for use in the stationary
generator market in the United States. To develop such market, Manthey
Redmond (US) intends to commence private demonstrations of its prototype engines
targeted to manufacturers of internal combustion engines, government agencies
engaged in internal combustion engine research and development, and other
consumers, including governmental, of internal combustion engines. The
Company has not entered into any co-development or co-licensing agreements with
manufacturers in the United States as of the date of this
prospectus.
The
Company anticipates that Steven Manthey, President of the Company, will conduct
most of such demonstrations. Steven Manthey resides outside the United States
and when he is not in the U.S., the business operations of the Company are
conducted outside the U.S. as well. Likewise, prototypes built pursuant to the
Development Agreement will be built in Australia until transported to the United
States for the demonstrations or pursuant to a sale or other commercial
agreement. Accordingly, the Company has no assets in the United States as of the
date of this prospectus but maintains an executive office suite in Los Angeles,
California, to develop as its American company headquarters.
By
securing the use of the research and development facility, Manthey Redmond (US)
will be able to develop prototypes tailored to specific applications, such as
the stationary generator market, outboard and inboard marine market, heavy
freight vehicle market, construction vehicle market and agricultural vehicle
market. The research and development facility has the capability to
manufacture these tailored products on a commercial scale thereby allowing
Manthey Redmond (US) to market and sell the engines directly without utilizing
other manufacturers. Management realizes possible inherent limitations
associated with having a facility situated in Australia, but it believes that it
can initially meet production requirements from this facility and as demand
increases, it can establish manufacturing facilities within the United
States.
The
Agreements
The two
agreements with Manthey Redmond (Aust) contain no restrictions on the Company on
how to develop and commercialize the Technology but pursuant to the patent
licensing agreement the Company is obligated to cover all costs associated with
the protection of the Technology including patent application and maintenance
fees. The Company is not obligated to use funds received under the
investment agreement to pay obligations owed under the patent license agreement
or development agreement if it were able to raise funds elsewhere.
However, until such time as the Company can develop another source of revenue to
meet its patent license and development agreement obligations, it will be
necessary for it to use the funds from the investment agreement to pay those
obligations. Pursuant to the development agreement with Manthey Holdings,
the Company is obligated to fund the ongoing development of the Technology by
its inventor, Steven Charles Manthey, the president and a director of the
Company. The development agreement with Manthey Holdings not only secures
the ongoing use of a development facility, but also ensures the ongoing
involvement of Steven Charles Manthey, its sold director and shareholder.
Payments under the development agreement to Manthey Holdings are scheduled to
commence in November, 2009 to coincide with the delivery of the newest
prototype.
Steven
Charles Manthey is the president and a director of the Company and beneficial
owner of 29.6% of the Company's outstanding shares. He is also the sole
officer, director and shareholder of Manthey Holdings, the company with which
the Company has the development agreement.
In regard
to Manthey Redmond (Aust), the source of the Company's current funding, and
Manthey Redmond (US) the board of directors of each company is identical, namely
consisting of Steven Charles Manthey, Geoffrey Redmond and Timothy John Eric
Redmond. In addition, 82.8% of the outstanding shares of the Company are
beneficially owned by Steven Charles Manthey (29.6%) and Timothy and Geoffrey
Redmond (53.2%) whom are also the sole beneficial owners of Manthey Redmond
(Aust).
Until
such time as Manthey Redmond (US) is able to enter into co-development or
co-licensing agreements or to develop a sales market for its engines, it is
financially reliant on the funding provided by the agreements entered into with
Manthey Redmond (Aust).
Given
that the composition of the boards of directors of Manthey Redmond (Aust) and
Manthey Redmond (US) is identical, there is a risk that the directors could vary
or cancel the terms of the Investment Agreement by which Manthey Redmond
receives its current funding and thereby compromise the capacity of Manthey
Redmond (US) to continue its development and operations if it has not by such
time secured other sources of revenue.
The
principal offices of the Company are located at 10940 Wilshire Boulevard, Suite
1600, Los Angeles, California 90024 and its telephone number is
310/443-4116.
The
Technology
The
Manthey Redmond Eco-Engine is a newly-developed, patented, fuel-efficient,
lightweight, low-emission, multi-fuel engine smaller and less expensive than
conventional internal combustion engines. The Technology will be initially
targeted for use in marine engines, by both inboard and outboard engines but is
also applicable to, and will be marketed to, the stationary generator market,
heavy freight vehicle market, construction vehicle market and agricultural
vehicle market. During the two years in development, three prototypes of the
Technology have been produced with the fourth prototype to be available for
demonstration in the U.S. market in November, 2009. The two year development
period has been supervised by the inventor of the Technology (Steven Charles
Manthey) and the three prototypes have operated without any critical component
failure. Like other newly-developed technology, the Technology runs the risk
that the ultimate level of advancement from development will not be sufficiently
superior to existing technology to warrant market place advantage. Management
believes, from the results of its prototype testing and comparison of the
Technology to current internal combustion engines, that internal combustion
engines developed from the Technology are capable of halving the size of
internal combustion engines currently available in the market and dramatically
reducing the weight. Management believes that the Technology's sustainable
advantage arises from the reduction in uses of natural resources to build and
fuel internal combustion engines and the related reduction in
emissions.
2
Trading
Market
Currently,
there is no trading market for the securities of the Company. The Company
intends to initially apply for admission to quotation of its securities on the
OTC Bulletin Board. There can be no assurance that the Company will
qualify for quotation of its securities on the OTC Bulletin Board. See “RISK FACTORS” and
“DESCRIPTION OF SECURITIES”.
The
Offering
Sixty-two
shareholders of the Company are offering up to 3,729,200 shares of common stock
held by them ("the Shares"). These Shares are offered at a sales price of
$0.10 until such time as the Company's common stock is quoted on the OTC
Bulletin Board after which time such selling shareholders may sell their shares
at prevailing market or privately negotiated prices, in one or more transaction
that may take place on the over-the-counter market including ordinary broker's
transactions, privately-negotiated transactions or through sales to one or more
dealers for resale. Usual and customary or specifically negotiated
brokerage fees or commissions may be paid by the selling shareholders in
connection with such sales.
Common
stock outstanding before the offering
|
10,250,000
|
Common
Stock offered by selling shareholders
|
3,729,200
|
Proceeds
to Manthey Redmond (US)
|
Manthey
Redmond (US) will not receive any proceeds from the sale of the shares by
selling
shareholders.
|
Summary
Financial Information
The
following summary financial data should be read in conjunction with additional
discussions of the financial status of the Company and the Financial Statements
and Notes thereto, included elsewhere in this prospectus. The Company was
formed on April 20, 2009 and is a development stage company with no operating
revenues or profits. At March 31, 2010 and December 31, 2009, the Company had
$41 and $4,455 cash in bank accounts, respectively. Company has entered
into an investment agreement with Manthey Redmond (Aust) by which the Company
receives a monthly investment amount of $40,000. The Company has also
entered into an agreement with Manthey Holdings Pty Limited for the use of its
research facilities and staff at a monthly fee of $30,000.
RISK
FACTORS
A
purchase of any Shares is an investment in the Company’s common stock and
involves a high degree of risk. Investors should consider carefully the
following information about these risks, together with the other information
contained in this prospectus, before the purchase of the Shares. If any of
the following risks actually occur, the business, financial condition or results
of operations of the Company would likely suffer. In this case, the market price
of the common stock could decline, and investors may lose all or part of the
money they paid to buy the Shares.
3
The
Company is a development-stage company with no operating history of its own and
as such an investor cannot assess the Company’s profitability or
performance.
Because
the Company is a development-stage company with no operating history, it is
impossible for an investor to assess the performance of the Company or to
determine whether the Company will meet its projected business plan. The
Company has limited financial results upon which an investor may judge its
potential. The likelihood of its success must be considered in light of the
problems, expenses, difficulties, complications and delays frequently
encountered by a small developing company starting a new business enterprise and
the highly competitive environment in which it will operate. Since Manthey
Redmond does not have an operating history, it cannot assure an investor that
its business will be profitable or that it will ever generate sufficient
revenues to meet our expenses and support its anticipated
activities.
The
Investment Agreement between the Company and Manthey Redmond (Aust) Pty Ltd is
governed by and enforceable under the laws of Queensland, Australia and the
Company's officer and directors control Manthey Redmond (Aust), therefore if
Manthey Redmond (Aust) were to breach its agreement to fund the Company there
may be little or no likelihood that the officer and director would seek its
enforcement and even if they chose to so enforce such enforcement of the $40,000
monthly investment payment may be difficult or impossible.
Pursuant
to the investment contract between the Company and Manthey Redmond (Aust) Pty
Ltd, Manthey Redmond (Aust) makes a monthly payment to the Company of $40,000
for assistance in the development and commercialization of the Technology.
Should Manthey Redmond (Aust) Pty Ltd stop making or reducing such investment
payments, the Company would be required to enforce the contract in Queensland,
Australia and such enforcement may be too costly for the Company to
undertake. Also, because the directors and controlling shareholders of
Manthey Redmond (Aust) are also the directors of the Company, a conflict may
exist and the directors of the Company may determine, in breach of their duty to
the Company, not to attempt to enforce the Investment Agreement. In
addition, if the Company determined to enforce the contract in Queensland,
Australia, it may be at a significant disadvantage as such long distance legal
matter may be difficult to pursue and difficult to obtain a favorable judgment.
The loss of funding source for the Company would impact its ability
to proceed with its business plan in developing and marketing the commercial
applications of the Eco-Engine and developing additional
technology.
Previous
payments made by the Redmond Family Holdings provide no assurance that such
payments will continue.
Redmond
Family Holdings has provided at least $50,000 per month to Manthey Redmond
(Aust). This payment is the source of funds by which Manthey Redmond
(Aust) intends to meet its contractual obligation pursuant to the Investment
Agreement to fund the Company $40,000 per month. History of the payments
by the Redmond Family Holdings is not a guarantee such payments will
continue. Unforeseen circumstances or other changes may, for whatever
reason, make the Redmond Family Holdings unable or unwilling to continue such
monthly payments. As noted above, the Company has a contractual right to
the continuation of these payments, but enforcement of such contract may be
difficult if not impossible if such contract were breached.
The
success of the development and manufacturing of the Technology and related
internal combustion engines by the Company is unknown and contains many inherent
risks.
The
company is dependent upon the performance and ultimate marketability of the
Technology which is untested in the market place. The continuing
development stage of the Technology and related internal combustion engines may
reveal failures in the Technology presently unknown and unanticipated by the
Company and that can not be resolved with adequate research and development.
Such failures may not be immediately readily apparent and may occur only after
engines are placed in different applications or different climates throughout
the world. Likewise, at the manufacturing stage, development and/or cost
issues may arise presently unknown or unanticipated by the Company that render
the production of engines based on the Technology on a commercial scale
impractical.
4
The
Company may not be able to market the Technology as easily and readily as it
currently anticipates.
The
internal combustion engine market is a highly competitive market and new
technology related to the internal combustion engine attempting to make engines
more fuel efficient and more economical appears on the market frequently. The
successful marketing of the Technology will depend on the ability of the Company
to demonstrate sustainable advantages over existing proven and other newly
developed technology and the ability of the Company to fund the marketing of
these advantages. The Company believes that its Technology is highly competitive
and provides provable and sufficient advantages but the Company cannot predict
what new technology is being developed that may impact on the Company's
Technology and make it less attractive.
The
controlling directors and beneficial shareholders of Manthey Redmond (Aust) Pty
Ltd are the directors and officers of the Company which creates a conflict of
interest.
The
directors and beneficial and controlling shareholders of Manthey Redmond (Aust)
are Steven Charles
Manthey, Timothy John Eric Redmond and Geoffrey Redmond who are also the
directors of the Company. As such they control the actions of Manthey Redmond
(Aust). If for any reason, they should determine not to continue the research,
development and commercialization of the Manthey Redmond Eco-Engine, they could
effect Manthey Redmond (Aust) board action to terminate or breach the agreements
with the Company providing the monthly investment of $40,000 and the licensing
rights to the patent Eco-Engine and Technology; and as directors of the Company,
they would also be in a position to determine whether to pursue legal
enforcement of either or both of the agreements. In effect, they could breach
the development agreement and/or the patent licensing agreement with the Company
with no likely enforcement actions. As directors of the Company, Messrs. Redmond
and Mr. Manthey have an obligation and duty to act in the best interests of the
Company and make the best business judgment for it; however, they each have this
same duty and obligation to Manthey Redmond (Aust) as directors of it as well
and a breach of the agreements with the Company may be in the best interests and
be the best business judgment for that company despite its ramifications to the
Company. This would result in a conflict between the two companies and the
directors would be in a position to have to assist one at the expense of the
other.
The
sole officer and two directors of the Company beneficially own and will continue
to own a majority of the Company's common stock and, as a result, can exercise
control over shareholder and corporate actions.
The three
directors (one of whom is the sole officer) of the Company own 57.7% of the
Company's outstanding common stock. As such, they are able to control matters
requiring approval by shareholders, including the election of directors and
approval of significant corporate transactions. A director is required to act in
the best interest of the company and to make his best business judgments based
on such best interests of the company in approving corporate actions. As a
director, and when voting on matters under consideration by the board of
directors, the directors have a duty to act in the best interests of the
Company; there is no such required duty when acting as shareholders or voting on
matters under consideration by shareholders.
The
directors and executive officers all reside outside the United States which may
inhibit the ability of investors to bring any legal action or to enforce or
collect on any favorable judgement that in such case may be
received.
All the
directors and the executive officer of the Company reside outside of the United
States which may compromise the ability of investors to enforce their legal
rights or effect service of process upon directors or executive officer or
enforce civil or criminal judgments of United States courts against the Company,
its directors or executive officer. Likewise, other than the cash on hand, as of
the date of the registration statement, the Company has no assets in the United
States. In addition, the Company's licensed research facility is located outside
the United States and the jurisdiction of the United States legal system. This
may render any monetary penalty (whether civil or criminal in nature) obtained
by any investor for any reason against the Company or any of its directors or
executives difficult if not impossible to enforce.
5
As
the Technology licensed by the Company is not protected by patent, the Company
may find it difficult to protect it or additional developments based on the
Technology and competitors or others may develop or copy similar
technology.
The
Technology licensed by the Company is not protected by a patent. There is
no such thing as a world patent and the issuance of a patent in Australian does
not necessarily prohibit others from using or developing the same technology. To
protect its intellectual property, the Company will need to secure patent
protection for the Technology under the Patent Cooperation Treaty (PCT) and also
lodge separate patent applications in countries that are not members of the PCT.
Under the PCT, member states, which include the United States and Australia, may
initially lodge one application and all member states will recognize this
application as recording a "priority date" for the invention. The Company has
leased Technology that is the subject of a provisional patent lodged in
Australia and as Australia is a member of the PCT, the Company's leased
intellectual property can be secured by the prosecution of a full patent
application under the PCT process. Should the PCT process not be correctly
prosecuted, the Company may fail to secure a patent for the Technology in all
jurisdictions covered under the PCT and this could give rise to commercial harm.
Likewise, if the Company becomes unable to fund the prosecution of the PCT
process, or fund patent application process in non-member countries, the Company
would fail to secure ongoing patent protection for the Technology and this could
give rise to commercial harm. Moreover, to mitigate against the risk of
circumvention of its intellectual property, the Company will need to ensure that
all initial demonstrations of the technology are conducted on a private and
confidential basis and that confidentiality agreements are entered into
with
organizations
seeking to view and evaluate the Technology.
The
Company is a development stage company and has a correspondingly small financial
and accounting organization. Being a public company may strain the Company's
resources, divert management’s attention and affect its ability to attract and
retain qualified directors.
The
Company is a development stage company with a newly formed and developing
finance and accounting organization; the rigorous demands of being a public
reporting company will require a large and experienced finance and accounting
group. As a public company, the Company will be subject to the reporting
requirements of the Securities Exchange Act of 1934. The requirements of these
laws and the rules and regulations promulgated thereunder entail significant
accounting, legal and financial compliance costs, and have made, and will
continue to make, some activities more difficult, time consuming or costly and
may place significant strain on the Company's personnel, systems and
resources.
The
Securities Exchange Act requires, among other things, that the Company maintain
effective disclosure controls and procedures and internal control over financial
reporting. In order to establish the requisite disclosure controls and
procedures and internal control over financial reporting, significant resources
and management oversight are required. As a result, management’s attention may
be diverted from other business concerns, which could have a material adverse
effect on the Company's business, financial condition and results of
operations.
These
rules and regulations may also make it difficult and expensive for the Company
to obtain director and officer liability insurance. If the Company is unable to
obtain adequate director and officer insurance, its ability to recruit and
retain qualified officers and directors, especially those directors who may be
deemed independent, will be significantly curtailed.
Government
regulation could negatively impact the technology.
The
Manthey Redmond Eco-Engine has been developed to comply and surpass
environmental standards and regulations for air, water and noise as
well as meet and surpass regulations and guidelines for fuel efficiency and
consumption. However, unforeseen changes in these regulations and
standards could have an impact on the business if any such changes were not able
to be met by the Eco-Engine.
There has been no prior public market
for the Company’s Shares and the lack of such a market may make resale of the
stock difficult.
No prior
public market has existed for the Company’s securities and the Company cannot
assure any investor that a market will develop subsequent to this
offering. An investor must be fully aware of the long-term nature of an
investment in the Company. The Company intends to apply for quotation of
its common stock on the OTC Bulletin Board. However, the Company does not
know if it will be successful in such application, how long such application
will take, or, that if successful, that a market for the common stock will ever
develop or continue on the OTC Bulletin Board. If for any reason the common
stock is not listed on the OTC Bulletin Board or a public trading market does
not otherwise develop, investors in the offering may have difficulty selling
their common stock should they desire to do so. If the Company is not
successful in its application for quotation on the OTC Bulletin Board, it will
apply to have its securities quoted by the Pink OTC Markets, Inc.,
real-time quotation service for over-the-counter equities.
6
The
Company does not intend to pay dividends to its stockholders, so investors will
not receive any return on investment in the Company prior to selling their
interest in it.
The
Company does not project paying dividends but anticipates that it will retain
future earnings for funding the Company’s growth and development.
Therefore, investors should not expect the Company to pay dividends in the
foreseeable future. As a result, investors will not receive any return on
their investment prior to selling their Shares in the Company, if and when a
market for such Shares develops. Furthermore, even if a market for the
Company’s securities does develop, there is no guarantee that the market price
for the shares would be equal to or more than the initial per share investment
price paid by any investor. There is a possibility that the shares could
lose all or a significant portion of their value from the initial price paid in
this offering.
The
Company’s stock may be considered a penny stock and any investment in the
Company’s stock will be considered a high-risk investment and subject to
restrictions on marketability.
If the
Shares commence trading, the trading price of the Company's common stock may be
below $5.00 per share. If the price of the common stock is below such
level, trading in its common stock would be subject to the requirements of
certain rules promulgated under the Securities Exchange Act of 1934, as
amended. These rules require additional disclosure by broker-dealers in
connection with any trades generally involving any non-NASDAQ equity security
that has a market price of less than $5.00 per share, subject to certain
exceptions. Such rules require the delivery, before any penny stock
transaction, of a disclosure schedule explaining the penny stock market and the
risks associated therewith, and impose various sales practice requirements on
broker-dealers who sell penny stocks to persons other than established customers
and accredited investors (generally institutions). For these types of
transactions, the broker-dealer must determine the suitability of the penny
stock for the purchaser and receive the purchaser’s written consent to the
transactions before sale. The additional burdens imposed upon
broker-dealers by such requirements may discourage broker-dealers from effecting
transactions in the Company’s common stock which could impact the liquidity of
the Company’s common stock.
Forward-Looking
Statements
This
prospectus contains, in addition to historical information, certain information,
assumptions and discussions that may constitute forward-looking statements. Such
statements are subject to certain risks and uncertainties which could cause
actual results to differ materially than those projected or anticipated.
Actual results could differ materially from those projected in the
forward-looking statements. Although the Company believes its assumptions
underlying the forward-looking statements are reasonable, the Company cannot
assure an investor that the forward-looking statements set out in this
prospectus will prove to be accurate. The Company’s businesses can be
affected by, without limitation, such things as natural disasters, economic
trends, international strife or upheavals, consumer demand patterns, labor
relations, existing and new competition, consolidation, and growth patterns
within the industries in which the Company competes and any deterioration in the
economy may individually or in combination impact future results.
USE
OF PROCEEDS
The
Company will not receive any proceeds from the sale of the Shares by the selling
shareholders.
DETERMINATION
OF OFFERING PRICE
There is
no public market for the Company’s common stock and the price at which the
Shares are being offered has been arbitrarily determined by the Company based on
the Company’s belief in its internal projections, anticipated growth and market
potential. This price does not necessarily bear any direct relationship to
any assets, operations, book or other established criteria of value
of the Company but represents solely the opinion of management that the Company
will be able to develop and market the Eco-Engine and other technology and that
such engine will be successful in its application. Other than cash on hand
and value that one may ascribe to Lease Agreement, the Company has no assets and
no current operations.
7
DIVIDEND
POLICY
The
Company does not anticipate that it will declare dividends in the foreseeable
future but rather intends to use any future earnings for the development of the
business.
DILUTION
The
common stock to be sold by the selling shareholders is common stock that is
already issued and outstanding. The Company will not be issuing any
additional shares of common stock as part of this offering nor will the Company
be receiving any funds from the sale of any shares. The sale of the shares
will not result in any diminution or increase in net tangible book value to the
Company and consequently there will be no dilution to investors or
shareholders.
SELLING
SHAREHOLDERS
The
Company is registering for offer and sale by 62 holders thereof 3,729,200 shares
of common stock held by such shareholders.
The
Company will not receive any proceeds from the sale of the Shares. The
selling shareholders have no agreement with any underwriters with respect to the
sale of the Shares. The selling shareholders may from time to time offer
their Shares through underwriters, dealers or agents, which may receive
compensation in the form of underwriting discounts, concessions or commissions
from them and/or the purchasers of the Shares for whom they may act as
agents. The selling shareholders and any agents, dealers or underwriters
that participate in the distribution of the Shares may be deemed to be
"underwriters" under the Securities Act and any profit on the sale of the Shares
by them and any discounts, commissions or concessions received by any such
underwriters, dealers or agents might be deemed to be underwriting discounts and
commissions under the Securities Act.
All the
Shares registered hereby will become tradeable on the effective date of the
registration statement of which this prospectus is a part.
The
following table sets forth ownership of the shares held by each person who is a
selling shareholder.
Owned Before the Offering
|
Offered Herein
|
After the Offering (2)
|
||||||||||||||||||
Number
|
Percentage
|
Number
|
Shares
|
Percentage
|
||||||||||||||||
Name and Address
|
of Shares
|
Of Class (1)
|
of Shares
|
Owned
|
Of Class
(3)
|
|||||||||||||||
A
& J Stone Trust
|
||||||||||||||||||||
A
& J Stone Holdings, Trustee(1)
|
290,000 | 2 | % | 290,000 | 0 | 0 | % | |||||||||||||
Nau
Toutai Ahovelo
|
650 | * | 650 | 0 | 0 | % | ||||||||||||||
4
Antrim Street
|
||||||||||||||||||||
Hebersham,
NSW Australia 2770
|
||||||||||||||||||||
Allied
Securities Inc (2)
|
200,000 | 1.9 | % | 200,000 | 0 | 0 | % |
8
Vicky
Narelle Baker and
|
||||||||||||||||||||
Stephen
James Baker
|
10,000 | * | 10,000 | 0 | 0 | % | ||||||||||||||
11
Mace Drive
|
||||||||||||||||||||
Buderim,
QLD Australia 4556
|
||||||||||||||||||||
Paul
Battisti and
|
||||||||||||||||||||
Samantha
Battisti
|
13,000 | * | 13,000 | 0 | 0 | % | ||||||||||||||
11a
Helen Court
|
||||||||||||||||||||
Castle
Hills, NSW, Australia 2154
|
||||||||||||||||||||
Peter
Bottele Superannuation Fund,
|
||||||||||||||||||||
Peter
and Tess Bottele, Trustee
|
16,250 | * | 16,250 | 0 | 0 | % | ||||||||||||||
Level
1, 65 Kembla Street
|
||||||||||||||||||||
Wollongong,
NSW, Australia 2500
|
||||||||||||||||||||
Drago
Bozic
|
6,500 | * | 6,500 | 0 | 0 | % | ||||||||||||||
83
Eastern Avenue
|
||||||||||||||||||||
Kingsford,
NSW, Australia 2032
|
||||||||||||||||||||
Tobias
Essington Breen
|
100,000 | * | 100,000 | 0 | 0 | % | ||||||||||||||
60-62
Alexander Avenue
|
||||||||||||||||||||
Taren
Point, NSW, Australia 2229
|
||||||||||||||||||||
The
Byron Real Estate
|
||||||||||||||||||||
Consulting
Group Pty(3)
|
290,000 | 2 | % | 290,000 | 0 | 0 | % | |||||||||||||
310
Olsen Avenue
|
||||||||||||||||||||
Parkwood,
QLD Australia 4212
|
||||||||||||||||||||
Alexsandar
Citroski
|
26,000 | * | 26,000 | 0 | 0 | % | ||||||||||||||
48
Dalpra Crescent
|
||||||||||||||||||||
Bossley
Park, NSW Australia 2176
|
||||||||||||||||||||
Peter
Geoffrey Craig
|
100,000 | * | 100,000 | 0 | 0 | % | ||||||||||||||
John
Daniels
|
160,000 | 1.5 | % | 160,000 | 0 | 0 | % | |||||||||||||
Peter
Darcy
|
10,000 | * | 10,000 | 0 | 0 | % | ||||||||||||||
Gaiu
Dinu
|
650 | * | 650 | 0 | 0 | % | ||||||||||||||
Martin
Dunning
|
6,500 | * | 6,500 | 0 | 0 | % | ||||||||||||||
PO
Box 129
|
||||||||||||||||||||
Caringbah,
NSW, Australia 2229
|
||||||||||||||||||||
Maureen
Egan
|
4,550 | * | 4,550 | 0 | 0 | % | ||||||||||||||
7
Phoenix Crescent
|
||||||||||||||||||||
Erskine
Park, NSW Australia 2759
|
||||||||||||||||||||
Con
and Vick Elfes
|
40,000 | * | 40,000 | 0 | 0 | % | ||||||||||||||
307a
Port Hacking Road
|
||||||||||||||||||||
Miranda,
NSW, Australia 2228
|
||||||||||||||||||||
Kevin
Ellem and Beryl Ellem
|
6,500 | * | 6,500 | 0 | 0 | % | ||||||||||||||
5
Golf Street
|
||||||||||||||||||||
Tamworth,
NSW, Australia 2340
|
9
Ferriter
Super Fund
|
||||||||||||||||||||
Paul
Ferriter Pty Ltd, Trustee(4)
|
133,000 | 1.3 | % | 133,000 | 0 | 0 | % | |||||||||||||
Fock
Family Superannuation Fund,
|
||||||||||||||||||||
Zugspitze
Holdings Pty, Trustee(5)
|
16,250 | * | 16,250 | 0 | 0 | % | ||||||||||||||
Level
1, 65 Kembla Street
|
||||||||||||||||||||
Wollongong,
NSW, Australia 2500
|
||||||||||||||||||||
Anna
Gamulin
|
3,250 | * | 3.250 | 0 | 0 | % | ||||||||||||||
11/39-241
Doncaster Avenue
|
||||||||||||||||||||
Kensington,
NSW, Australia 2033
|
||||||||||||||||||||
GJA
Developments Pty Ltd(6)
|
6,500 | * | 6,500 | 0 | 0 | % | ||||||||||||||
PO
Box 1289
|
||||||||||||||||||||
Castle
Hill, NSW, Australia 1765
|
||||||||||||||||||||
Nathan
Ghosn
|
6,500 | * | 6,500 | 0 | 0 | % | ||||||||||||||
6
Nymboida Crescent
|
||||||||||||||||||||
Sylvania
Waters, NSW, Australia 2224
|
||||||||||||||||||||
Global
IP Traders Corporation(7)
|
380,000 | 4 | % | 380,000 | 0 | 0 | % | |||||||||||||
PO
Box 2588
|
||||||||||||||||||||
Burleigh
Heads, QLD, Australia 4220
|
||||||||||||||||||||
Elly
Marie Hohai
|
100,000 | * | 100,000 | 0 | 0 | % | ||||||||||||||
PO
Box 2588 Burleigh Heads
|
||||||||||||||||||||
Burleigh
Heads, QLD Australia 4213
|
||||||||||||||||||||
Brandon
Howard
|
650 | * | 650 | 0 | 0 | % | ||||||||||||||
Donald
Jessup
|
1,500 | * | 1,500 | 0 | 0 | % | ||||||||||||||
Geoffrey
Alan Johnston
|
||||||||||||||||||||
and
Ada Ida Stella Johnston
|
10,000 | * | 10,000 | 0 | 0 | % | ||||||||||||||
31
Belrose Boulevard
|
||||||||||||||||||||
Varsity
Lakes, QLD Australia 4220
|
||||||||||||||||||||
Sharyn
Alayne Johnston
|
84,000 | * | 84,000 | 0 | 0 | % | ||||||||||||||
34
Tribulation Circuit
|
||||||||||||||||||||
Buderim,
QLD Australia 4556
|
||||||||||||||||||||
Jodie
Manthey
|
1,500 | * | 1,500 | 0 | 0 | % | ||||||||||||||
Sally
Manthey
|
1,500 | * | 1,500 | 0 | 0 | % | ||||||||||||||
533
Bonogin Road
|
||||||||||||||||||||
Bonogin,
QLD Australia 4213
|
||||||||||||||||||||
Sylvania
Marina
|
6,500 | * | 6,500 | 0 | 0 | % | ||||||||||||||
25
Harrow Street
|
||||||||||||||||||||
Sylvania,
NSW, Australia 2224
|
||||||||||||||||||||
Marko
Matach
|
3,250 | * | 3,250 | 0 | 0 | % | ||||||||||||||
48a
Olola Avenue
|
||||||||||||||||||||
Vaucluse,
NSW, Australia 2030
|
10
Losh
Hazen Matthews
|
6,500 | * | 6,500 | 0 | 0 | % | ||||||||||||||
58
Flora Street
|
||||||||||||||||||||
Kirrawee,
NSW Australia 2232
|
||||||||||||||||||||
Peter
McDonald
|
100,000 | * | 100,000 | 0 | 0 | % | ||||||||||||||
Neilson
Family Trust
|
||||||||||||||||||||
Filmduke
Pty Limited, Trustee(8)
|
32,500 | * | 32,500 | 0 | 0 | % | ||||||||||||||
Level
1, 65 Kembla Street
|
||||||||||||||||||||
Wollongong,
NSW, Australia 2500
|
||||||||||||||||||||
Newstew
Family Trust,
|
||||||||||||||||||||
Newstew
Pty Ltd , Trustee(9)
|
32,500 | * | 32.500 | 0 | 0 | % | ||||||||||||||
Level
1, 65 Kembla Street
|
||||||||||||||||||||
Wollongong,
NSW, Australia 2500
|
||||||||||||||||||||
Arthur
and Con Nicolis
|
39,000 | * | 39,000 | 0 | 0 | % | ||||||||||||||
11
Brisbane Street
|
||||||||||||||||||||
Chifley,
NSW Australia 2036
|
||||||||||||||||||||
Chad
Parrish
|
6,500 | * | 6,500 | 0 | 0 | % | ||||||||||||||
10
Vista Place
|
||||||||||||||||||||
Little
Hartley, NSW, Australia 2790
|
||||||||||||||||||||
Elizabeth
Paskoski
|
6,500 | * | 6,500 | 0 | 0 | % | ||||||||||||||
48
Dalpra Crescent
|
||||||||||||||||||||
Bossley
park, NSW Australia 2176
|
||||||||||||||||||||
Branko
Jose Paunovic
|
362,500 | 3.5 | % | 362,500 | 0 | 0 | % | |||||||||||||
Vasil
Perovski
|
3,600 | * | 3,600 | 0 | 0 | % | ||||||||||||||
4
Fiddick Place
|
||||||||||||||||||||
Menai,
NSW, Australia 2234
|
||||||||||||||||||||
Mladenko
Radas
|
6,500 | * | 6,500 | 0 | 0 | % | ||||||||||||||
18
Allwood Crescent
|
||||||||||||||||||||
Lugano,
NSW, Australia 2210
|
||||||||||||||||||||
Kim
Redmond-Fewtrell
|
71,500 | * | 71,500 | 0 | 0 | % | ||||||||||||||
261
Woolooware Road
|
||||||||||||||||||||
Cronulla,
NSW Australia 2230
|
||||||||||||||||||||
Joshua
Redmond
|
9,500 | * | 9,500 | 0 | 0 | % | ||||||||||||||
4
Fitzroy Place
|
||||||||||||||||||||
Sylvania
Waters, NSW, Australia 2224
|
||||||||||||||||||||
Anne
Rice
|
3,250 | * | 3,250 | 0 | 0 | % | ||||||||||||||
2
Great Western Highway
|
||||||||||||||||||||
Emu
Plains, NSW Australia 2750
|
||||||||||||||||||||
Marsha
Roberts
|
1,950 | * | 1,950 | 0 | 0 | % | ||||||||||||||
39b
Gilba Road
|
||||||||||||||||||||
Girraween,
NSW, Australia 2145
|
11
Amanda
Scuglia
|
650 | * | 650 | 0 | 0 | % | ||||||||||||||
33
Roper Road
|
||||||||||||||||||||
Colyton,
NSW Australia 2760
|
||||||||||||||||||||
Anthony
Stefanac
|
400,000 | 3.9 | % | 400,000 | 0 | 0 | % | |||||||||||||
Julieanne
Stone
|
5,200 | * | 5,200 | 0 | 0 | % | ||||||||||||||
4
Brown Place
|
||||||||||||||||||||
Baulkham
Hills, NSW Australia 2153
|
||||||||||||||||||||
Janja
Studenovic
|
6,500 | * | 6,500 | 0 | 0 | % | ||||||||||||||
9/113
Doncaster Avenue
|
||||||||||||||||||||
Kensington,
NSW, Australia 2154
|
||||||||||||||||||||
Nada
Studenovic
|
3,250 | * | 3,250 | 0 | 0 | % | ||||||||||||||
12
Helen Court
|
||||||||||||||||||||
Castle
Hill, NSW, Australia 2154
|
||||||||||||||||||||
Ruza
Studenovich
|
290,000 | 2 | % | 290,000 | 0 | 0 | % | |||||||||||||
Tiber
Creek Corporation(10)
|
250,000 | 2.4 | % | 250,000 | 0 | 0 | % | |||||||||||||
215
Apolena Avenue
|
||||||||||||||||||||
Newport
Beach, CA 92662
|
||||||||||||||||||||
Brendan
Tresoglavic
|
3,250 | * | 3,250 | 0 | 0 | % | ||||||||||||||
12
Helen Court
|
||||||||||||||||||||
Castle
Hill, NSW Australia 2154
|
||||||||||||||||||||
Simon
Tresoglavic and
|
||||||||||||||||||||
Anna
Tresoglavic
|
9,750 | * | 9,750 | 0 | 0 | % | ||||||||||||||
12
Helen Court
|
||||||||||||||||||||
Castle
Hill, NWS Australia 2154
|
||||||||||||||||||||
Sili
Venusi Veamatahau
|
6,500 | * | 6,500 | 0 | 0 | % | ||||||||||||||
680
Bents Basin Road
|
||||||||||||||||||||
Wallacia,
NSW Australia 2745
|
||||||||||||||||||||
Telesia
Veamatahau and
|
||||||||||||||||||||
Sione
Ahovelo
|
6,500 | * | 6,500 | 0 | 0 | % | ||||||||||||||
134
Junction Road
|
||||||||||||||||||||
Ruse,
NSW Australia 2560
|
||||||||||||||||||||
Tevita
Veamatahau
|
1,300 | * | 1,300 | 0 | 0 | % | ||||||||||||||
680
Bents Basin Road
|
||||||||||||||||||||
Wallacia,
NSW Australia 2745
|
12
Julian
Walters
|
6,500 | * | 6,500 | 0 | 0 | % | ||||||||||||||
54/102
Miller Street
|
||||||||||||||||||||
Pyrmont,
NSW Australia 2009
|
||||||||||||||||||||
Darryl
Andrew Wandrey
|
16,000 | * | 16,000 | 0 | 0 | % | ||||||||||||||
15
Boronia Crescent
|
||||||||||||||||||||
Marcoola,
QLD, Australia 4564
|
||||||||||||||||||||
Jack
Warfield
|
6,500 | * | 6,500 | 0 | 0 | % | ||||||||||||||
4
Cristina Street
|
||||||||||||||||||||
Longueville,
NSW, Australia 2066
|
||||||||||||||||||||
Total
|
3,729,200 | 36.38 | % | 3,729,200 | 0 | 0 | % |
(1)
|
Mr.
Chris Roulstone has the voting and dispositive power for A & J Stone
Holdings.
|
(2)
|
Paul
Ferriter has the voting and dispositive power for Allied
Securities.
|
(3)
|
Ms.
Sally Fisher has the voting and dispositive power for The Byron Real
Estate Consulting Group Pty Ltd.
|
(4)
|
Mr.
Paul Ferriter has the voting and dispositive power for Ferriter Super
Fund
|
(5)
|
Ben
Fock has the voting and dispositive power for the Fock Family
Superannuation Fund.
|
(6)
|
George
Augerinas has the voting and dispositive power for GJA Developments Pty
Ltd.
|
(7)
|
Michael
Geoffrey Johnston has the voting and dispositive power for Global IP
Traders Corporation.
|
(8)
|
Brad
Nielson has the voting and dispositive power for the Neilson Family
Trust.
|
(9)
|
Andrew
Newhouse has the voting and dispositive power for the Newstew Family
Trust.
|
(10)
|
James
Cassidy, a principal in the law firm of Cassidy & Associates, the firm
which opined on the validity of the shares issued by the Company, is the
sole shareholder of Tiber Creek Corporation and may be deemed the
beneficial owner of the shares owned by
it.
|
PLAN
OF DISTRIBUTION
The
Company intends to maintain the currency and accuracy of this prospectus for a
period of up to two years.
Selling
Shareholders
The
Shares offered by the selling shareholders will be offered at $.10 until such
time as the Company's stock is quoted on the OTC Bulletin Board.
The
selling shareholders may from time to time offer the Shares through
underwriters, brokers, dealers, agents or other intermediaries. The distribution
of the Shares by the selling shareholders may be effected in one or more
transactions that may take place through customary brokerage channels, in
privately-negotiated sales, by a combination of these methods or by other
means. Transactions occurring after the stock is quoted on the OTC
Bulletin Board, if at all, will be effected at market prices prevailing at the
time of sale. Usual and customary or specifically negotiated brokerage fees or
commissions may be paid by the selling shareholders in connection with sales of
the Shares.
13
The
Company will not receive any portion or percentage of the proceeds from the sale
of the selling shareholders' Shares. Of the 3,729,200 Shares included in the
registration statement of which this prospectus is a part, none are held by
officers, directors or affiliates of the Company.
DESCRIPTION
OF SECURITIES
Capitalization
The
Company is authorized to issue 100,000,000 shares of common stock of which
10,250,000 shares were outstanding as of the date of the registration statement
of which this prospectus is a part. The Company is authorized to
issue 20,000,000 shares of undesignated preferred stock, none of which has been
designated nor issued.
Common
Stock
Holders
of shares of common stock are entitled to one vote for each share on all matters
to be voted on by the shareholders. Holders of common stock do not have
cumulative voting rights. Holders of common stock are entitled to share ratably
in dividends, if any, as may be declared from time to time by the board of
directors in its discretion from funds legally available therefor. In the event
of a liquidation, dissolution or winding up, the holders of common stock are
entitled to share pro rata all assets remaining after payment in full of all
liabilities.
Holders
of common stock have no preemptive rights to purchase the Company’s common
stock. There are no conversion or redemption rights or sinking fund provisions
with respect to the common stock. The Company may issue additional shares
of common stock which could dilute its current shareholder's share
value.
Additional
Information Describing Securities
Reference
is made to applicable statutes of the state of Delaware for a description
concerning statutory rights and liabilities of shareholders.
No
Trading Market
There is
currently no established public trading market for the Company’s securities. A
trading market in the securities may never develop.
14
Admission
to Quotation on the OTC Bulletin Board
If the
Company meets the qualifications, it intends to apply for quotation of its
securities on the OTC Bulletin Board. The OTC Bulletin Board differs from
national and regional stock exchanges in that it (1) is not situated in a single
location but operates through communication of bids, offers and confirmations
between broker-dealers and (2) securities admitted to quotation are offered by
one or more broker-dealers rather than the "specialist" common to stock
exchanges. To qualify for quotation on the OTC Bulletin Board, an equity
security must have one registered broker-dealer, known as the market maker,
willing to list bid or sale quotations and to sponsor the company
listing.
Penny
Stock Regulation
Penny
stocks generally are equity securities with a price of less than $5.00 per share
other than securities registered on national securities exchanges or listed on
the Nasdaq Stock Market, provided that current price and volume information with
respect to transactions in such securities are provided by the exchange or
system. The penny stock rules impose additional sales practice requirements on
broker-dealers who sell such securities to persons other than established
customers and accredited investors (generally those with assets in excess of
$1,000,000 or annual income exceeding $200,000, or $300,000 together with their
spouse). For transactions covered by these rules, the broker-dealer must make a
special suitability determination for the purchase of such securities and have
received the purchaser's written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the rules require the delivery, prior to the transaction, of a
disclosure schedule prescribed by the SEC relating to the penny stock market.
The broker-dealer also must disclose the commissions payable to both the
broker-dealer and the registered representative and current quotations for the
securities. Finally, monthly statements must be sent disclosing recent price
information on the limited market in penny stocks. Because of these penny stock
rules, broker-dealers may be restricted in their ability to sell the Company’s
common stock. The foregoing required penny stock restrictions will not apply to
the Company’s common stock if such stock reaches and maintains a market price of
$5.00 per share or greater.
THE
BUSINESS
Current
Operations
The
Company is a development stage company and has not commenced operations and has
not received any revenue from operations. The Company has entered into a
licensing agreement with Manthey Redmond (Aust) for the development and
commercialization of the Manthey Redmond Eco-Engine and related technology. The
Company has also entered into an investment agreement with Manthey Redmond
(Aust) by which the Company receives a monthly investment amount of $40,000. The
Company entered into an agreement with Manthey Holdings Pty Limited for the use
of its research facilities and staff at a monthly fee of
$30,000.
15
Manthey
Redmond Eco-Engine
The
Manthey Redmond Eco-Engine was developed by Steven Charles Manthey in
Australia. On June 26, 2009, Manthey Redmond (Aust) applied for an
Australian provisional patent on the Eco-engine and related technology. On July
6, 2009, the corporation was issued with provisional patent number
2009903136. The Manthey Redmond Eco-Engine is a fuel-efficient,
lightweight, low-emission, multi-fueled, small and inexpensive engine primarily
for use in marine applications competitive with conventional internal combustion
engines. The Manthey Redmond Eco-Engine is based on the opposed-piston
engine configuration providing much greater torque (power) production relative
to its cylinder displacement than traditionally configured engines. In
effect, the Manthey Redmond Eco-Engine converts thermal energy to kinetic energy
more efficiently than internal combustion engines currently on the market.
Unlike most commercially available internal combustion engines, the Manthey
Redmond Eco-Engine can run on any fuel although it is particularly suited to
diesel and natural gas.
The
Technology that underpins the configuration of the Manthey Redmond Eco-Engine
incorporates a number of new components that are not contained in a
traditional internal combustion engine. These new components, which are the
subject of patent applications, have resulted in prototypes producing
torque-per-liter performance data that can be compared with published
performance data on internal combustion engines already in the market place. It
is from these comparisons, that the Company has been able to predict that the
Technology appears to convert thermal energy to kinetic energy more efficiently
than internal combustion engines currently in the market place.
At
present, three prototypes of the Manthey Redmond Eco-Engine have been
manufactured. All prototypes are currently being tested at Manthey
Holding's research facility. The Company believes that
development of the prototypes has reached a stage that their performance can be
independently tested by government agencies and academic institutions. The
Company believes that such tests will validate the Company's testing of superior
performance on many levels from the conventional internal combustion engine
including brake thermal efficiency.
Patent Licensing Agreement with
Manthey Redmond (Aust) Pty Limited
On May 1,
2009, the Company entered into a Patent Licensing Agreement with Manthey Redmond
(Aust). Manthey Redmond is the owner, developer and patent applicant of
the Eco-Engine and all related technology (the "Technology") developed and to be
developed. Pursuant to the agreement, Manthey Redmond (Aust) has granted
to the Company, a license to develop, manufacture, have manufactured, use and
sell or supply the Technology in return for a royalty fee equal to 5% of the
Company's gross profits earned as a result of the license agreement. The
Company has the right to sublicense its rights under the agreement and is
entitled to information and use of any inventions or improvements on the
Technology made by Manthey Redmond (Aust) without additional charge.
Manthey Redmond (Aust) Pty Limited will apply for valid patents pursuant to each
invention or improvements on the Technology. The agreement may be
terminated at the option of Manthey Redmond (Aust) in the event that the Company
becomes insolvent, or seeks protection from its creditors under any United
States federal or state bankruptcy act or if an outside administrator or
controller is voluntary or involuntarily appointed to control the Company.
The agreement is subject to and governed by the law of Queensland,
Australia.
16
Investment
Agreement with Manthey Redmond (Aust) Pty Limited
On May 1,
2009, the Company entered into an Investment Agreement with Manthey Redmond
(Aust) by which Manthey Redmond (Aust) has agreed to invest a non-refundable
amount of $40,000 per month beginning July 1, 2009, aggregating $4,200,000 (USD)
to assist the Company in commercializing products based on the Technology.
Manthey Redmond (Aust) may terminate this agreement in the event that the Patent
Licensing Agreement is terminated. The agreement is subject to and
governed by the law of Queensland, Australia. In
November, 2009, and March 2010, the Company received $39,925 and $955 of capital
injection from Manthey Redmond (AUST) pursuant to the Investment Agreement which
was recorded as additional paid-in capital.
Development
Agreement with Manthey Holdings Pty Limited
On
November 6, 2009, the Company entered into an amended Development Agreement with
Manthey Holdings Pty Limited ("Manthey Holdings") by which, commencing May 1,
2009, Manthey Holdings will provide the unlimited use of its engineering
facility and employees for the purpose of research and development related to
the Technology. Pursuant to the agreement, the Company will pay Manthey Holdings
$30,000 per month up to a maximum of $540,000 at which time the agreement shall
terminate. The agreement will also terminate in the event that the Patent
Licensing Agreement is terminated. Manthey Holdings has agreed to build
and test prototypes based on the Technology at its research facility. The
agreement is subject to and governed by the law of Queensland, Australia. For the
period from April 20, 2009 (inception) through March 31, 2010, the Company
incurred $131,000 of service fees pursuant to the amended Development Agreement,
$37,773 of which was paid during the period, while the remaining $93,227 was
recorded as accrued expense as of March 31, 2010.
The
Manthey Holdings research facility currently employs five full-time employees
who assist Steven Manthey with the design and manufacture and testing of the
prototype engines. The facility has the capacity to build all the
necessary components for the prototypes. The facility includes three
separate CNC machining centers with two full-time trained operators. The
engineering capacity of these machining centers enables the facility to produce
multiple components.
In
addition to design and manufacture, the facility has the capability to test the
performance of engines it builds. The facility operates two testing cells
where engines can be run on Dynanometers so as to measure performance—in
particular torque and horsepower; and also other performance indicators such as
volumetric efficiency. At present, the facility does not operate its own
foundry—as such, components that require hardening are sent to a foundry
situated approximately 60 miles from the facility.
The
Company anticipates that by demonstrating the Technology for government
agencies, laboratories and manufacturers located in the United States, it will
endeavor to form co-development agreements and/or license agreements to succeed
the development agreement. However, in the event that such relationships
are not developed or not developed sufficiently to manufacture and develop the
engines, the Company maintains a direct relationship with the Manthey Holding's
facility which contemplates the possible extension of the development
agreement.
The
Market
The
Company believes that there is substantial discussion and pressure in the United
States and worldwide to develop better fuel efficient and greener engines for
all internal combustion end use applications including automobiles, marine
engines, aircraft, and others. Reports circulate continuously in the
news, internet, magazines and elsewhere about new ways and methods to increase
engine efficiency, decrease pollution and generally improve usability, with the
result, the Company believes, that the public has become somewhat immune to such
announcements. Because of this saturation of market reports on products that
very often don't match the results promised, the Company believes that it may be
more difficult to establish the Manthey Redmond Eco-Engine as a true alternative
to the traditional internal combustion engine for marine usage. The
Company has manufactured three prototypes that will be independently tested by
government agencies and academic institutions to validate the superior
performance of the Manthey Redmond Eco-Engine and overcome any market reluctance
to an alternative to the traditional internal combustion
engine.
17
Competition
The
Manthey Redmond Eco-Engine will be competing with traditional internal
combustion engines as well as redesigned and newly designed internal
combustion engines. The Company believes that with the often
increasing price of fuel and emphasis on developing greener and more efficient
engines for automobile as well as marine and other uses, many companies will be
allocating funds to the research, development and marketing of better
traditional internal combustion engines and newly designed alternative engine
types. These companies likely would have more resources, financial
and otherwise, than the company and more marketing and distribution channels
already developed and available.
Marketing
The
Company has established two offices: Los Angeles, California and Sydney,
Australia. From each of its offices, the Company intends to market to
manufacturers and government agencies for the purpose of forming joint
development agreements. The Company anticipates that it will conduct
workshops with selected manufacturers and government agencies throughout 2009
with a view to the formation of joint development agreements as a precursor to
license agreements. Beginning approximately in January, 2010, the Company also
intends to promote its marine products directly to marine dealers and to
participate in a number of international boat shows that year.
THE
COMPANY
Background
The
Company was formed in April, 2009, to develop the development and commercial
introduction to the market, including licensing to manufacturers, of the Manthey
Redmond Eco-Engine and related technology previously performed by Manthey
Redmond (Aust). As such the Company has entered into a licensing and
an investment agreement with Manthey Redmond (Aust), as discussed
below.
Manthey
Redmond (Aust) is an Australian company formed March 17, 2008 as the successor
to Manthey Redmond Pty Ltd which was formed in October, 2007, as a joint venture
between Manthey Holdings Pty Ltd and Tobana Pty Ltd. to design, manufacturer and
commercialize the Technology and other research concepts developed by Steven
Manthey.
18
The
primary function of the Company is to generate revenue from the
commercialization of the Technology. The Company anticipates that it
will fulfill that function through three distinct steps: (i) refinement of the
Technology; (ii) licensing of the Technology; and (iii), manufacturing of
products based on the Technology. With respect to stage (i), the Company has two
objectives- the first objective is to continue to advance the "core design" of
the Technology, and the second objective, to develop prototypes for specific
applications. Research into the "core design" of the Technology will be
conducted by Manthey Holdings in accordance with the Development Agreement.
However, through the formation of joint ventures and co-development agreements
(with private or public institutions), the Company envisages that "core design"
advancements may also be effected by these collaborative agreements. The second
objective, namely the tailoring of the Technology for specific applications,
will be the primary focus of joint venture and co-development agreements. In
general, the Company anticipates that it will coordinate and control this stage
with a view to generating profits for the resultant engine products. These
profits, as noted earlier, will be generated initially by licensing the
Technology and then by manufacturing engines based on the Technology. The
manufacturing may involve new agreements with Manthey Holdings Pty Limited or
the tendering of the manufacturing process or both.
Manthey
Redmond (Aust) is beneficially wholly owned by Steven Charles Manthey, Geoffrey
Redmond and Timothy John Eric Redmond, all directors and beneficial shareholders
of the Company, through their affiliated entities Manthey Holdings Pty Ltd and
the Redmond Family Holdings Pty Ltd (an assign of Tobana Pty
Limited). Steven Charles Manthey, Geoffrey Redmond and Timothy John
Eric Redmond are the directors of Manthey Redmond (Aust).
Pursuant
to the terms of the original joint venture creating Manthey Redmond (Aust),
Tobana Pty provided capital and Manthey Holdings provided the research facility,
staff and equipment for the development, testing and prototype production of the
Manthey Redmond Eco-Engine and other research concepts by Steven
Manthey.
Since
October, 2007 and as of July, 2009, Redmond Family Holdings Pty Ltd has
contributed $50,000 per month, plus $500,000 for manufacturing equipment
initially to Manthey Redmond Pty Limited and then to Manthey Redmond (Aust)
aggregating $1,550,000. Redmond Family Holding Pty Ltd will continue
its monthly contributions to Manthey Redmond (Aust) which in turn will make
monthly investments in the Company of $40,000.
Manthey
Redmond (Aust) replaced Manthey Redmond Pty Limited as the joint venture vehicle
on the recommendation of accountants representing Redmond Family Holdings Pty
Limited. The sole reason related to the generic constitution of Manthey Redmond
Pty Limited which was not to a satisfactory standard, and as the joint venture
owned no
assets other than cash on hand, it was more convenient to replace the joint
venture vehicle than to seek to amend the constitution. Likewise, it was also on
the recommendation of the accountants that Tobana Pty Limited, that original
held the interest of Geoffrey Redmond and Timothy John Eric Redmond, be replaced
by Redmond Family Holdings Pty Limited as a more suitable entity within the
overall corporate structuring of Messrs Redmonds' organization. These changes
were effected in December 2007.
Redmond
Family Holdings Pty Ltd is beneficially owned by Geoffrey Redmond and Timothy
John Eric Redmond who are founding shareholders of Redmond Company Pty Ltd, an
Australian company which owns hotels that incorporate gaming in Sydney,
Australia with an estimated value range of $100 to $200
million.
19
From its
inception, Manthey Redmond (Aust) has received funding solely from sources
associated with Redmond Family Holdings Pty Limited. The funding to
be provided to the Company will be from Manthey Redmond (Aust) that, as a joint
venture vehicle, holds no assets other than cash received from Redmond Family
Holdings Pty Limited (or its affiliates) and serves basically as an intermediary
to pass along the investment fund and follow the development and
commercialization of the Technology. The Investment Agreement was entered into
specifically between the Company and Manthey Redmond (Aust), not Redmond Family
Holdings Pty Limited or one of its affiliates, because royalties paid under the
Patent License Agreement will be received directly by Manthey Redmond
(Aust). In effect, the two agreements, namely the Investment
Agreement and Patent License Agreement are related agreements in that no royalty
would be received by Manthey Redmond (Aust) unless the Company is able to
generate revenue. It is therefore in the best interests of Manthey
Redmond (Aust) for the Company to develop and market the
Technology. In that light, to assist the Company to take the steps
necessary to generate revenue, an initial investment has been made by Manthey
Redmond (Aust). In practical terms, Manthey Redmond (Aust) will need
to continue to source funds to meet its obligations under the Investment
Agreement.
The
principals of the Redmond Family Holdings and Manthey Holdings i.e. steven
Charles Manthey, Geoffrey Redmond and Timothy John Eric Redmond chose to create
a United States entity for the marketing and exploitation of the Eco-Engine and
the Technology rather than simply Manthey Redmond (Aust) to handle such
marketing. As it exists, Manthey Redmond (Aust) funds $40,000 per
month to the Company (pursuant to the Investment Agreement) and the Company then
pays Manthey Holdings $30,000 per month for its research facility (pursuant to
the Technology Agreement). It appears that Manthey Redmond (Aust)
could have directly paid Manthey Holdings. However, by creating and
utilizing the United States entity, the principals anticipate that the intended
marketing of the Eco-Engine will be facilitated by more direct contact with
United States manufacturers and research laboratories. Manthey
Redmond (US) hopes to form co-development agreements with such U.S.
manufacturers and laboratories as it believes that the greatest market for its
products and development lie within the United States.
20
DIAGRAM
OF MANTHEY REDMOND AFFILIATES AND
CONTROLLING
PERSONS
21
Employees
Other
than Steven Charles Manthey, who serves as president and treasurer, the Company
has no employees.
Property
The
Company has an office in Sydney, Australia and leases 165 square feet of office
space at 10940 Wilshire Boulevard, Suite 1600, Los Angeles, California 90024 at
a rental rate of $1,096. The research facility used by the Company is
located in Queensland, Australia. The Company anticipates that this
facility will be used to produce outboard diesel marine engines. The
Company pays a flat inclusive fee of $30,000 per month pursuant to the
Development Agreement which provides the Company with unlimited use of the
research facility. No additional rental or usage fees are charged to
the Company. The facility is approximately 4000 square feet situated
on 18 acres and is owned by an affiliate of Manthey Holdings.
Subsidiaries
The
Company does not have any subsidiaries.
Patents
and Trademarks
The
Company has entered into a licensing agreement with Manthey Redmond (Aust) for
the licensing of the Manthey-Redmond Eco-Engine. Manthey Redmond
(Aust) has applied for provisional patent protection of the Manthey Redmond
Eco-Engine, filed June 26, 2009.
Industry
Regulation and Taxation
The
development and testing of the Manthey Redmond Eco-Engine is located in
Australia but the Company hopes to market its application to manufacturers in
Australia, the United States and other countries. Each country has
its own regulations regarding engines including noise, fuel and combustion
efficiency, air and particulate pollution, exhaust and smog converters, and so
forth. The Company believes that the design of the Manthey Redmond
Eco-Engine is so superior in efficiency and pollution issues than the standardly
used internal combustion engine, that it will have no difficultly meeting and
surprising any and all restrictions and regulations imposed by local and
national governments in those areas in which the Company hopes to market the
engine.
Reports
to Security Holders
The
Company intends to deliver a copy of its annual report to its security holders,
and will voluntarily send a copy of the annual report, including audited
financial statements, to any registered shareholder who requests
it. The Company will not be a reporting issuer with the Securities
and Exchange Commission until its registration statement on Form S-1 is declared
effective.
22
The
Company has filed a registration statement on Form S-1, under the Securities Act
of 1933, with the Securities and Exchange Commission with respect to the shares
of its common stock. This prospectus is filed as a part of that registration
statement, but does not contain all of the information contained in the
registration statement and exhibits. Statements made in the registration
statement are summaries of the material terms of the referenced contracts,
agreements or documents of the company. Reference is made to the Company’s
registration statement and each exhibit attached to it for a more detailed
description of matters involving the Company. A potential investor may inspect
the registration statement, exhibits and schedules filed with the Securities and
Exchange Commission at the Commission's principal office in Washington, D.C.
Copies of all or any part of the registration statement may be obtained from the
Public Reference Section of the Securities and Exchange Commission, 100 F Street
N.E., Washington, D.C. 20002. Please call the Commission at 1-800-SEC-0330 for
further information on the operation of the public reference rooms. The
Securities and Exchange Commission also maintains a web site at
http://www.sec.gov that contains reports, proxy statements and information
regarding registrants that file electronically with the Commission. The
Company’s registration statement and the referenced exhibits can also be found
at the web site address.
PLAN
OF OPERATION
Business
Plan
The
Company intends to have its three developed Manthey Redmond Eco-Engine
prototypes tested for performance validation by government agencies and academic
institutions. After such testing results are received, the Company
intends to begin marketing the Eco-Engine to manufacturers in the United States
and Australia to license the technology for production. The Company
is not aware of any specific government approvals that it must obtain before it
can license, manufacture or market the Technology throughout the United States.
However, due to the nature of the Technology and its marine use with possible
impact on natural resources and environmental matters, the Company will seek
validation or use approval or other commercial arrangements with various United
States government agencies including, but not limited to, the Department of
Energy, Environmental Protection Agency, Department of Transport and also the
United States Coast Guard. These agencies are all actively involved directly or
indirectly in the development of marine and transport technology and use
thereof, and the Company views these agencies as capable of providing assistance
in the introduction of the Technology to the market by testing or otherwise
approving the use of the Technology for the intended application.
The
Company intends to continue its research of other applications stemming from the
opposed-piston engine configuration technology used in the Manthey Redmond
Eco-Engine as well as improving and developing the Eco-Engine.
The
Company anticipates that it will begin manufacturing of commercial products
based on the Technology, possibly including the Eco-Engine or similar
applications. The Company may form a subsidiary as its manufacturing
arm including, but not limited to, a subsidiary to manufacture outboard diesel
engines both in the Gold Coast Australia and in the United
States.
23
Potential
Revenue
The
Company expects to generate income in four possible ways:
|
1.
|
Licensing
fees from manufacturers in return for the right to produce and sell the
Company's Technology. The Company expects that license fees
will be determined by territory size and market
potential.
|
|
2.
|
Royalty
payments for each Eco-Engine produced and sold. The Company
expects royalty payments to be determined by engine capacity and
application.
|
|
3.
|
Sale
of commercial products (which products will be manufactured at the Manthey
Holdings facility in Australia).
|
|
4.
|
Fees
from companies that purchase the right to sell products offered by the
Company or a subsidiary (which products will be manufactured at the
Manthey Holdings facility in
Australia).
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND
RESULTS OF OPERATIONS
Current
Operations
The
Company was formed on April 20, 2009 and is a development stage company with no
operating revenues or profits. The Company has developed three
prototypes of the Manthey Redmond Eco-Engine which will be tested for
performance validation by government agencies and academic
institutions. After validation of the tests, the Company will market
the Eco-Engine to manufacturers in the United States and Australia.
Expenses
and Capital Expenditures
Other
than the development agreement for use of the testing facilities at Manthey
Holdings, the Company has not incurred any large expenses nor made or planned
any large capital expenditures.
Results
of Operations
Results
of Operations for the Period from April 20, 2009 (Inception) to December 31,
2009:
Net
revenue
|
$ | - | ||
Operating
expenses
|
||||
Professional
services
|
31,503 | |||
Rent
expense
|
5,417 | |||
Other
general, selling and administrative expense
|
752 | |||
Research
and development expense
|
41,000 | |||
Total
operating expenses
|
78,672 | |||
Net
loss
|
$ | (78,672 | ) |
24
The
Company was incorporated in April 2009 to primarily engage business in the
development and commercialization of the Manthey Redmond Eco-Engine and related
Technologies. For the period from April 20, 2009 (inception) to
December 31, 2009, the Company had not generated any revenue.
The
Company intended to continue research and development of the Manthey Redmond
Eco-Engine during 2009. The Company expects to receive the updated
prototype of the Eco-Engine in July 2010. Upon receipt of the
prototype, the Company intends to begin selective and proprietary marketing of
the engine to potential end users and manufacturers and to possible interested
joint venture partners. The Company incurred $78,672 operating
expenses for the period from April 20, 2009 (inception) to December 31, 2009,
primarily consisted of professional services of $31,503 and research and
development expense of $41,000. The professional services were mainly
consulting fees, attorney fees, and accounting fees associated with the
Company’s registration statement filing. The research and development
expenses were incurred pursuant to the amended Development Agreement with
Manthey Holdings on November 6, 2009, which revises the commencement date of
development service fee payment from July 1, 2009 to November 20,
2009. For the period from April 20, 2009 (inception) to December 31,
2009, $37,773 was paid and $3,228 was recorded as accrued expense (Note 5) as of
December 31, 2009.
The
Company believes that the current trends in the market are increasing the demand
for greater fuel efficient engines with better environmental
performance. The Eco-Engine converts thermal energy to kinetic energy
more efficiently than other engines currently available in the global market
which provides better fuel efficiency and less negative environmental
impact. The Company anticipates that the market trend for such type
engines will increase thereby increasing the demand for the
Eco-Energy.
Results
of Operations for the Three Months Ended March 31, 2010 and for the Period
from April 20, 2009 (Inception) to March 31, 2010:
For the Period
|
||||||||
From April 20,
|
||||||||
For The Three
|
2009 (Inception)
|
|||||||
Months Ended
|
to March 31,
|
|||||||
March 31, 2010
|
2010
|
|||||||
Net
revenue
|
$ | - | $ | - | ||||
Operating
expenses
|
||||||||
Rent
expense
|
3,527 | 8,944 | ||||||
Professional
services
|
- | 31,503 | ||||||
Other
general, selling and administrative expenses
|
792 | 1,544 | ||||||
Research
and development expenses
|
90,000 | 131,000 | ||||||
Total
operating expenses
|
94,319 | 172,991 | ||||||
Net
loss
|
$ | (94,319 | ) | $ | (172,991 | ) |
25
The
Company was incorporated in April 2009 to primarily engage business in the
development and commercialization of the Manthey Redmond Eco-Engine and related
Technologies. For the first quarter of 2010 and for the period from
April 20, 2009 (inception) to March 31, 2010, the Company had not generated any
revenue.
The
Company intended to continue research and development of the Manthey Redmond
Eco-Engine during 2010. The Company expects to receive the updated
prototype of the Eco-Engine in July 2010. Upon receipt of the
prototype, the Company intends to begin selective and proprietary marketing of
the engine to potential end users and manufacturers and to possible interested
joint venture partners. The Company incurred $94,319 operating
expenses for the three months ended March 31, 2010 which primarily consisted of
research and development expense of $90,000 and rent expense of
$3,527. The research and development expenses were incurred pursuant
to the amended Development Agreement with Manthey Holdings on November 6, 2009,
which revises the commencement date of development service fee payment from July
1, 2009 to November 20, 2009. Research and development expense of
$90,000 incurred pursuant to the Development Agreement was not paid during the
quarter ended March 31, 2010, which was recorded as accrued expense as of March
31, 2010.
The
Company believes that the current trends in the market are increasing the demand
for greater fuel efficient engines with better environmental
performance. The Eco-Engine converts thermal energy to kinetic energy
more efficiently than other engines currently available in the global market
which provides better fuel efficiency and less negative environmental
impact. The Company anticipates that the market trend for such type
engines will increase thereby increasing the demand for the
Eco-Energy.
Liquidity
and Capital Resources
The
following summarizes the key component of the company’s cash flows for the
period from April 20, 2009 (inception) to December 31, 2009:
Net
cash used in operating activities
|
$ | (75,445 | ) | |
Net
cash provided by financing activities
|
79,900 | |||
Net
increase in cash and cash equivalents
|
$ | 4,455 |
Net cash
used in operating activities from April 20, 2009 (inception) to December 31,
2009 was mainly driven by net loss of $78,672 for the period, which principally
consisted of $31,503 professional services and $41,000 research and development
expenses as discussed above.
Net cash
provided by financing activities from April 20, 2009 (inception) to December 31,
2009 primarily resulted from advances and capital contribution from Manthey
Redmond (Aust). During its initial organization, the Company received
$38,950 in advances from Manthey Redmond (Aust) not pursuant to the Investment
Agreement, and is a loan, interest free, which must be repaid. No
formal loan terms were established, but the Company intends to repay the loan
once in a position to do so. In November 2009, the Company received
an aggregate of $39,925 of capital injection from Manthey Redmond (Aust)
pursuant to the Investment Agreement, which was recorded as additional paid-in
capital as of December 31, 2009.
26
The
following summarizes the key component of the company’s cash flows for the three
months ended March 31, 2010 and the period from April 20, 2009 (inception) to
March 31, 2010:
For the Period
|
||||||||
From April 20,
|
||||||||
For The Three
|
2009 (Inception)
|
|||||||
Months Ended
|
to March 31,
|
|||||||
March 31, 2010
|
2010
|
|||||||
Net
cash used in operating activities
|
$ | (5,369 | ) | $ | (80,814 | ) | ||
Net
cash provided by financing activities
|
955 | 80,855 | ||||||
Net
(decrease) increase in cash and cash equivalents
|
$ | (4,414 | ) | $ | 41 |
Net cash
used in operating activities was $5,369 and $80,814 for the three months ended
March 31, 2010 and for the period from April 20, 2009 (inception) to March 31,
2010, respectively, which were mainly driven by net losses in the amount of
$94,319 and $172,991, partially offset by increases in accrued expense and other
liabilities in the amount of $88,950 and $93,227. Increases in
accrued expense and other liabilities were primarily to record unpaid research
and development expenses to Manthey Redmond (Aust) pursuant to the Development
Agreement.
Net cash
provided by financing activities was $955 and $80,855 for the three months ended
March 31, 2010 and for the period from April 20, 2009 (inception) to March 31,
2010, respectively. During its initial organization, the Company
received $38,950 in advances from Manthey Redmond (Aust) not pursuant to the
Investment Agreement, and is a loan, interest free, which must be
repaid. No formal loan terms were established, but the Company
intends to repay the loan once in a position to do so. In November
2009 and March 2010, the Company received $39,925 and $955 of capital injection,
respectively from Manthey Redmond (Aust) pursuant to the Investment Agreement
(see Note 4), which was recorded as additional paid-in capital.
The
Company’s financial statements are prepared using generally accepted accounting
principles in the United States of America applicable to a going concern, which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. The Company has not yet established an
ongoing source of revenues sufficient to cover its operating costs and allow it
to continue as a going concern. The ability of the Company to
continue as a going concern is dependent on the Company obtaining adequate
capital to fund operating losses until it becomes profitable. If the
Company is unable to obtain adequate capital, it could be forced to cease
operations. The accompanying financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a
going concern.
Management’s
Plan to Continue as a Going Concern
In order
to continue as a going concern, the Company will need, among other things,
additional capital resources. Management’s plans to obtain such
resources for the Company include (1) obtaining capital from the sale of its
securities, (2) the sublicensing and sale of the Manthey Redmond Eco-Engine, (3)
additional capital injection from Manthey Redmond (Aust) pertaining to the
Investment Agreement (see Note 3), and (3) short-term borrowings from
shareholders or related party when needed. However, management cannot
provide any assurance that the Company will be successful in accomplishing any
of its plans.
The
ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plans described in the preceding
paragraph and eventually secure other sources of financing and attain profitable
operations.
27
MANAGEMENT
The
following table sets forth information regarding the members of the Company’s
board of directors and its executive officers:
Name
|
Age
|
Position
|
Date Directorship
Commenced
|
|||
Steven
Charles Manthey
|
President,
treasurer, director
|
April
24, 2009
|
||||
Timothy
John Eric Redmond
|
Director
|
April
24, 2009
|
||||
Geoffrey
Redmond
|
Director
|
April
24, 2009
|
The
number of directors to compose the Company’s Board of Directors is not fewer
than one nor more than five. Directors do not receive any
compensation. Directors may be shareholders of the
Company.
The
directors will serve until the annual meeting of the shareholders and until
their respective successors have been elected and qualified or until death,
resignation, removal or disqualification.
The
Company’s by-laws provide that the number of directors to serve on the Board of
Directors may be established, from time to time, by action of the Board of
Directors. Vacancies in the existing Board are filled by a majority vote of the
remaining directors on the Board. The Company’s executive officers are appointed
by and serve at the discretion of the Board.
Pursuant
to Rule 4200 of The NASDAQ Stock Market one of the definitions of an independent
director is a person other than an executive officer or employee of a
company. Neither of the Company’s directors may be deemed to
independent. In the event that the Company applies for listing of its
securities on an exchange in which an independent directorship is required, it
will seek to have such directors elected or appointed.
Committees
and Terms
The Board
of Directors has not established any committees.
The
Company anticipates that the annual meeting of shareholders will be held in
May. The Company will notify its shareholders that they may present
proposals for inclusion in the Company’s proxy statement to be mailed in
connection with any such annual meeting; such proposals must be received by the
Company at least 90 days prior to the meeting. No other specific
policy has been adopted in regard to the inclusion of shareholder nominations to
the Board of Directors.
Background
of the Directors and Executive Officers
Steven Charles Manthey, 48,
has served as president and a director of the Company since its
formation. Since 1994, Mr. Manthey has been engaged in the research
and development of internal combustion engines. From 2001 to 2004,
Mr. Manthey was a director of Advanced Engine Technologies, Inc.
Geoffrey Redmond, 51, has
served as a director of the Company since its formation. Since 1989,
Mr. Redmond has been a director of the Redmond Company, an Australian
corporation that owns and operates hotels in Sydney, Australia that incorporate
gaming facilities with an estimated value range of $100 to $200
million.
Timothy John Eric Redmond, 45,
has served as a director of the Company since its formation. Since
1989, Mr. Redmond has been a director of the Redmond Company, an Australian
corporation that owns and operates hotels that incorporate gaming facilities in
Sydney, Australia with an estimated value range of $100 to $200
million.
The
Redmond Company owns and operates hotels that incorporate gaming facilities in
Sydney, Australia. Current hotels of the Redmond Company
include:
28
St.
Patricks Mount Druitt
57 North
Parade
Mount
Druitt, Sydney, Australia
St.
Patricks Seven Hills
222
Prospect Highway
Seven
Hills, Sydney, Australia
Hurtsville
Ritz Hotel
350
Forest Road
Hurstville,
Sydney, Australia
Legal
Proceedings
As of the
date of this prospectus, the Company is not a party to any lawsuits or legal
proceedings.
EXECUTIVE
COMPENSATION
Remuneration
of Officers
Steven
Charles Manthey is the sole officer of the Company. Mr. Manthey has
not received any remuneration from the Company but is the sole shareholder and
director of Manthey Holdings Pty Ltd. and is the beneficiary of the Manthey
Holdings Trust and may be deemed the beneficial owner of the 3,040,000 shares of
the Company's common stock owned by it. Pursuant to the development
agreement, Manthey Holdings Pty Ltd. receives $30,000 per month from the Company
for use of its testing and research facilities.
Anticipated
Officer and Director Remuneration
Although
not presently offered, the Company anticipates that its officers and directors
may be provided with a group health, vision and dental insurance
program.
Employment
Agreements
The
Company has not entered into any employment agreements with the officers and key
personnel.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND
MANAGEMENT
The
following table sets forth information as of the date of this prospectus
regarding the beneficial ownership of the Company’s common stock by each of its
executive officers and directors, individually and as a group and by each person
who beneficially owns in excess of five percent of the common stock after giving
effect to any exercise of warrants or options held by that
person.
29
Number of
|
Percent of
|
Percent of
|
||||||||||||
Shares of
|
Class Before
|
Class After
|
||||||||||||
Position
|
Common Stock
|
Offering (1)
|
Offering
|
|||||||||||
Steven
Charles Manthey
|
President,
treasurer,
|
3,040,000 | (2) | 29.6 | % | 29.6 | % | |||||||
director
|
||||||||||||||
Timothy
John Eric Redmond
|
Director
|
2,590,800 | (3) | 25.2 | % | 25.2 | % | |||||||
Geoffrey
Redmond
|
Director
|
2,880,800 | (4) | 28 | % | 28 | % | |||||||
North
American Motors(5)
|
600,000 | 6 | % | 6 | % | |||||||||
Total
Officers and directors
|
5,920,800 | 57.7 | % | 57.7 | % | |||||||||
as
a group (3 persons)
|
(1)
|
The
total number of outstanding shares of common stock as of March 31, 2010 is
10,250,000.
|
(2)
|
Manthey
Holdings Trust owns 3,040,000 shares; Manthey Holdings Pty Ltd. serves as
the trustee for the Manthey Holdings Trust. Steven Charles
Manthey is the sole shareholder and director of Manthey Holdings Pty Ltd.
and is the beneficiary of the Manthey Holdings Trust and may be deemed the
beneficial owner of the shares owned by
it.
|
(3)
|
The
Redmond Family Investment Trust owns 2,590,800 shares; Redmond Family
Holdings Pty Ltd serves as the trustee for the Redmond Family Investment
Trust. Timothy John Eric Redmond and Geoffrey Redmond are the
only shareholders and directors of Redmond Family Holdings Pty Ltd and are
the sole beneficiaries of such trust and may therefore be deemed to be the
beneficial owner of those shares.
|
(4)
|
The
Redmond Family Investment Trust owns 2,590,800 shares; Redmond Family
Holdings Pty Ltd serves as the trustee for the Redmond Family Investment
Trust. Timothy John Eric Redmond and Geoffrey Redmond are the
only shareholders and directors of Redmond Family Holdings Pty Ltd and are
the sole beneficiaries of such trust and may therefore be deemed to be the
beneficial owner of those shares. Alison Redmond, wife of Geoffrey
Redmond, owns 290,000 shares of the Company's common
stock.
|
(5)
|
Micheal
Charles Manthey, the son of Steven Charles Manthey, is the controlling
person of North American Motors.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Timothy
John Eric Redmond and Geoffrey Redmond are brothers and are the sole directors
and shareholders of Redmond Family Holdings Pty Ltd which owns 360 shares (40%)
of the 900 outstanding shares of Manthey Redmond (Aust). In
2007, Redmond Family Holdings Pty Ltd agreed to invest $50,000 monthly in
Manthey Redmond (Aust) for the research and development of the Manthey Redmond
Eco-Engine. Manthey Redmond (Aust) has entered into an investment
agreement with the Company to invest $40,000 monthly to continue research,
development and commercialization of the Eco-Engine.
30
Steven
Charles Manthey is the sole director and shareholder of Manthey Holdings Pty Ltd
which owns 540 shares (60%) of the 900 outstanding shares of Manthey Redmond
(Aust). The Company has entered into an agreement with Manthey
Holdings for the use of its research facility, staff and prototype testing for a
monthly fee of $30,000.
During
its initial organization, the Company received $38,950 in advances from Manthey
Redmond (Aust) not pursuant to the Investment Agreement and, as such, is a loan,
interest free, which, unlike the funds received from the Investment Agreement,
must be repaid. No formal loan terms were established but the Company
intends to repay the loan as soon as possible.
SHARES
ELIGIBLE FOR FUTURE SALE
As of the
date of this prospectus, there are 10,250,000 shares of common stock outstanding
of which 5,920,800 shares are beneficially owned by officers and directors of
the Company. Of the outstanding shares, 3,729,200 are being
registered for sale by the holders thereof. At the time this
registration statement for the sale of the Shares by the selling shareholders
becomes effective, there will remain 6,520,800 shares of the Company's common
stock that will be considered “restricted securities” subject to the limitations
of Rule 144 under the Securities Act. In general, securities may be sold
pursuant to Rule 144 after being fully-paid and held for more than 12 months.
While affiliates of the Company are subject to certain limits in the amount of
restricted securities they can sell under Rule 144, there are no such
limitations on sales by persons who are not affiliates of the
Company. In the event non-affiliated holders elect to sell such
shares in the public market, there is likely to be a negative effect on the
market price of the Company's securities.
INTEREST
OF NAMED EXPERTS AND COUNSEL
Cassidy
& Associates, Washington, D.C., has given its opinion as attorneys-at-law
regarding the validity of the issuance of the Shares of common stock offered by
the Company. A member of the law firm of Cassidy & Associates is
the sole officer and director of Tiber Creek Corporation, a selling shareholder,
and may be considered the beneficial owner of the 250,000 shares of common stock
of the Company owned by Tiber Creek Corporation.
EXPERTS
KCCW
Accountancy Corp., an independent registered public accounting firm, has audited
the Company’s balance sheet as of December 31, 2009, and the related statements
of operations, changes in stockholders’ equity, and cash flows for the period
from April 20, 2009 (date of inception) to December 31, 2009, which are included
in this prospectus. The financial statements are included in reliance
on the report of KCCW Accountancy Corp. given their authority as experts in
accounting and auditing.
DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION
FOR
SECURITIES ACT LIABILITIES
The
Company’s Certificate of Incorporation include an indemnification provision that
provides that the Company shall indemnify directors against monetary damages to
the Company or any of its shareholders by reason of a breach of the director’s
fiduciary except (i) for any breach of the director’s duty of loyalty to the
Company or its shareholders or (ii) for acts or omissions not in good faith or
which involve intentional misconduct of (iii) for unlawful payment of dividend
or unlawful stock purchase or redemption or (iv) for any transaction from which
the director derived an improper personal benefit.
31
The
Certificate of Incorporation does not specifically indemnify the officers or
directors or controlling persons against liability under the Securities
Act.
The
Securities and Exchange Commission’s position on indemnification of officers,
directors and control persons under the Securities Act by the Company is as
follows:
INSOFAR
AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933 MAY
BE PERMITTED TO DIRECTORS, OFFICERS AND CONTROLLING PERSONS OF THE SMALL
BUSINESS ISSUER PURSUANT TO THE RULES OF THE COMMISSION, OR OTHERWISE, THE SMALL
BUSINESS ISSUER HAS BEEN ADVISED THAT IN THE OPINION OF THE SECURITIES AND
EXCHANGE COMMISSION SUCH INDEMNIFICATION IS AGAINST PUBLIC POLICY AS EXPRESSED
IN THE ACT AND IS, THEREFORE, UNENFORCEABLE.
32
MANTHEY
REDMOND CORPORATION
(A
Development Stage Company)
INDEX
TO UNAUDITED FINANCIAL STATEMENTS
March
31, 2010
Unaudited
Financial Statements:
Balance
Sheet
|
F-1
|
Statement
of Operations
|
F-2
|
|
|
Statement
of Cash Flows
|
F-3
|
Notes
to Unaudited Financial Statements
|
F-4
|
33
MANTHEY
REDMOND CORPORATION
|
||||
(A
Development Stage Company)
|
||||
BALANCE
SHEET
|
Assets
|
March
31,
2010
|
December
31,
2009
|
||||||
(Unaudited)
|
(Audited)
|
|||||||
Current
Assets
|
||||||||
Cash
and cash equivalents
|
$ | 41 | $ | 4,455 | ||||
Other
Assets
|
1,050 | 1,050 | ||||||
Total
Assets
|
$ | 1,091 | $ | 5,505 | ||||
Liabilities and Stockholders'
Deficit
|
||||||||
Current
Liabilities
|
||||||||
Accrued
expense
|
$ | 93,227 | $ | 4,278 | ||||
Due
to related party
|
38,950 | 38,950 | ||||||
Total
Current Liabilities
|
132,177 | 43,228 | ||||||
Stockholders'
Deficit
|
||||||||
Preferred
stock - $.0001 par value; 20,000 shares authorized, 0
shares
|
||||||||
issued
and outstanding
|
- | - | ||||||
Common
stock - $.0001 par value; 100,000,000 shares authorized,
|
||||||||
10,250,000
shares issued and outstanding
|
1,025 | 1,025 | ||||||
Additional
paid-in capital
|
40,880 | 39,925 | ||||||
Accumulated
deficit
|
(172,991 | ) | (78,672 | ) | ||||
Total
Stockholders' Deficit
|
(131,086 | ) | (37,722 | ) | ||||
Total
Liabilities and Stockholders' Deficit
|
$ | 1,091 | $ | 5,505 |
The
accompanying notes are an integral part of these financial
statements.
F-1
MANTHEY
REDMOND CORPORATION
|
||||
(A
Development Stage Company)
|
||||
STATEMENT
OF OPERATIONS
|
||||
(UNAUDITED)
|
For
The Three Months Ended March 31, 2010
|
For
The Period From April 20, 2009 (Inception) to March 31,
2010
|
|||||||
Net
revenue
|
$ | - | $ | - | ||||
Operating
expenses
|
||||||||
Rent
expense
|
3,527 | 8,944 | ||||||
Professional
services
|
- | 31,503 | ||||||
Other
general, selling and administrative expense
|
792 | 1,544 | ||||||
Research
and development expense
|
90,000 | 131,000 | ||||||
Total
operating expenses
|
94,319 | 172,991 | ||||||
Net
loss
|
$ | (94,319 | ) | $ | (172,991 | ) | ||
Basic
and diluted net loss per weighted-average number of common
shares
|
$ | (0.01 | ) | $ | (0.02 | ) | ||
Weighted
average shares outstanding, basic and diluted
|
10,250,000 | 9,017,595 |
The
accompanying notes are an integral part of these financial
statements.
F-2
MANTHEY
REDMOND CORPORATION
|
(A
Development Stage Company)
|
STATEMENTS
OF CASH FLOWS
|
(UNAUDITED)
|
For
The Three Months Ended March 31, 2010
|
For
The Period From April 20, 2009 (Inception) to March 31,
2010
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net
loss
|
$ | (94,319 | ) | $ | (172,991 | ) | ||
Adjustments
to reconcile net income to net cash
|
||||||||
provided
by operating activities:
|
||||||||
Decrease
(increase) in assets:
|
||||||||
Other
assets
|
- | (1,050 | ) | |||||
Increase
(decrease) in liabilities:
|
||||||||
Accrued
expense and other liabilities
|
88,950 | 93,227 | ||||||
Net
cash used in operating activities
|
(5,369 | ) | (80,814 | ) | ||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Borrowings
from related party
|
- | 38,950 | ||||||
Proceeds
from issuance of common stock
|
- | 1,025 | ||||||
Capital
contribution
|
955 | 40,880 | ||||||
Net
cash provided by financing activities
|
955 | 80,855 | ||||||
NET
INCREASE IN CASH & CASH EQUIVALENTS
|
(4,414 | ) | 41 | |||||
CASH
& CASH EQUIVALENTS, BEGINNING BALANCE
|
4,455 | - | ||||||
CASH
& CASH EQUIVALENTS, ENDING BALANCE
|
$ | 41 | $ | 41 | ||||
SUPPLEMENTAL
DISCLOSURES:
|
||||||||
Interest
paid
|
$ | - | $ | - | ||||
Income
tax paid
|
$ | - | $ | - |
The
accompanying notes are an integral part of these financial
statements.
F-3
MANTHEY
REDMOND CORPORATION
(A
Development Stage Company)
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
NOTE
1 – ORGANIZATION AND NATURE OF OPERATIONS
Manthey
Redmond Corporation (the “Company”) is a development stage company incorporated
in the State of Delaware in April, 2009 to research, design, manufacture, and
market technology now leased and to be developed by the
Company. Manthey Redmond (Aust) Pty Ltd., an Australian corporation
("Manthey Redmond (Aust)"), is the patent owner and developer of the Manthey
Redmond Eco-Engine, a fuel-efficient, lightweight, low-emission, multi-fuel
engine smaller and less expensive than conventional internal combustion engines
initially targeted for marine applications.
In May,
2009, the Company entered into a Patent Licensing Agreements with Manthey
Redmond (Aust) for the development, manufacture, use, sale, and sublicense of
the Manthey Redmond Eco-Engine and all developed technology and products related
to the technology patent (the "Technology") for a royalty payment to Manthey
Redmond (Aust) of 5% of annual gross profits. Pursuant to an
Investment Agreement entered into with the Company in May, 2009, Manthey Redmond
(Aust) agreed to fund to the Company monthly payments of $40,000 up to a maximum
of $4,200,000 in aggregate to assist the Company in commercializing products
based on the Technology. All three of the Company’s directors serve
as the directors of Manthey Redmond (Aust).
In May,
2009, the Company entered into a Development Agreement with Manthey Holdings Pty
Limited (“Manthey Holdings”) for the exclusive use of Manthey Holdings'
engineering facility and employees for research and development of and related
to the Technology at a monthly fee of $30,000 up to a maximum of $540,000 in
aggregate. In November, 2009, the Development Agreement was amended
to remove the exclusivity of the use of Manthey Holdings’ engineering facility
and employees, and to defer the commencement date of the agreement and first
payment to November 20, 2009. The Company’s president/director is the
sole shareholder and director of Manthey Holdings which serves as the trustee of
the Manthey Holdings Trust. The Company’s president/director is also
the beneficiary of the Manthey Holdings Trust and may be deemed the beneficial
owner of the 3,040,000 shares, or 29.6% of the Company’s common stock owned by
the Manthey Holdings Trust. On November 6, 2009, the agreement was
amended to revise the commencement date of payment from July 1, 2009 to November
20, 2009.
NOTE
2 – GOING CONCERN
The
Company’s financial statements are prepared using generally accepted accounting
principles in the United States of America applicable to a going concern, which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. The Company has not yet established an
ongoing source of revenues sufficient to cover its operating costs and allow it
to continue as a going concern. The ability of the Company to
continue as a going concern is dependent on the Company obtaining adequate
capital to fund operating losses until it becomes profitable. If the
Company is unable to obtain adequate capital, it could be forced to cease
operations. The accompanying financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a
going concern.
Management’s Plan to
Continue as a Going Concern
In order
to continue as a going concern, the Company will need, among other things,
additional capital resources. Management’s plans to obtain such
resources for the Company include (1) obtaining capital from the sale of its
securities, (2) the sublicensing and sale of the Manthey Redmond Eco-Engine, (3)
additional capital injection from Manthey Redmond (Aust) pertaining to the
Investment Agreement (see Note 3), and (3) short-term borrowings from
shareholders or related party when needed. However, management cannot
provide any assurance that the Company will be successful in accomplishing any
of its plans.
F-4
MANTHEY
REDMOND CORPORATION
(A
Development Stage Company)
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
The
ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plans described in the preceding
paragraph and eventually secure other sources of financing and attain profitable
operations.
NOTE
3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The
accompanying unaudited financial statements of the Company have been prepared in
accordance with generally accepted accounting principles for interim financial
information. Accordingly, they do not include all of the information
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the interim periods are not
necessarily indicative of the results for any future period. These
statements should be read in conjunction with the Company's audited financial
statements and notes thereto for the fiscal year ended December 31,
2009. The results of the three-month period ended March 31, 2010 are
not necessarily indicative of the results to be expected for the full fiscal
year ending December 31, 2010.
Fiscal
Year
The
fiscal year of the Company is January 1 to December 31.
Cash and Cash
Equivalents
Cash and
cash equivalents include unrestricted deposits and short-term investments with
an original maturity of three months or less. The Company minimizes
its risk associated with cash and cash equivalents by periodically evaluating
the credit quality of its primary financial institution. The balance
at times may exceed federally insured limits. At March 31, 2010, the
balance did not exceed the federally insured limit. As of March 31, 2010 and
December 31, 2009, cash and cash equivalent amounted to $41 and $4,455,
respectively.
Revenue
Recognition
We
recognize product revenue when the following fundamental criteria are met: (i)
persuasive evidence of an arrangement exists, (ii) delivery has occurred, (iii)
our price to the customer is fixed or determinable and (iv) collection of the
resulting accounts receivable is reasonably assured. We recognize
revenue for product sales upon transfer of title to the
customer. Customer purchase orders and/or contracts are generally
used to determine the existence of an arrangement. Shipping documents
and the completion of any customer acceptance requirements, when applicable, are
used to verify product delivery or that services have been
rendered. We assess whether a price is fixed or determinable based
upon the payment terms associated with the transaction and whether the sales
price is subject to refund or adjustment. We will record reductions
to revenue for estimated product returns and pricing adjustments in the same
period that the related revenue is recorded. These estimates will be
based on historical sales returns when available, analysis of credit memo data,
and other factors known at the time.
Use of
Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
F-5
MANTHEY
REDMOND CORPORATION
(A
Development Stage Company)
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
Net Loss per Common
Share
Basic net
loss per share is calculated by dividing net loss by the weighted-average number
of common shares outstanding during the period. Diluted net loss per
share reflects the potential dilution of securities by including common stock
equivalents, such as stock options, stock warrants and convertible preferred
stock, in the weighted average number of common shares outstanding for a period,
if dilutive. At March 31, 2010, there were no potentially dilutive
securities.
Recently Issued Accounting
Pronouncements
The
Company has adopted all recently issued accounting
pronouncements. The adoption of the accounting pronouncements,
including those not yet effective, is not anticipated to have a material effect
on the financial position or results of operations of the Company.
NOTE
4 – RELATED PARTY TRANSACTIONS
Advances from Related
Party
On June
3, 2009, the Company received $38,950 of advances from Manthey Redmond (Aust),
all directors of which are also directors of the Company. The
advances were non-interest bearing loan to be repaid at the discretion of the
Board of Directors of the Company.
Patent Licensing
Agreement
On May 1,
2009, the Company entered into a Patent Licensing Agreement with Manthey Redmond
(Aust). Manthey Redmond is the owner, developer and patent applicant
of the Eco-Engine and all related technology (the "Technology") developed and to
be developed. Pursuant to the agreement, Manthey Redmond (Aust) has
granted to the Company, a license to develop, manufacture, have manufactured,
use and sell or supply the Technology in return for a royalty fee equal to 5% of
the Company's gross profits earned as a result of the license
agreement. The Company has the right to sublicense its rights under
the agreement and is entitled to information and use of any inventions or
improvements on the Technology made by Manthey Redmond (Aust) without additional
charge. Manthey Redmond (Aust) will apply for valid patents pursuant
to each invention or improvements on the Technology. The agreement
may be terminated at the option of Manthey Redmond (Aust) in the event that the
Company becomes insolvent, or seeks protection from its creditors under any
United States federal or state bankruptcy act or if an outside administrator or
controller is voluntary or involuntarily appointed to control the
Company. The agreement is subject to and governed by the law of
Queensland, Australia.
Investment
Agreement
On May 1,
2009, the Company entered into an Investment Agreement with Manthey Redmond
(Aust) by which Manthey Redmond (Aust) has agreed to invest a non-refundable
amount of $40,000 per month beginning July 1, 2009, aggregating $4,200,000 to
assist the Company in commercializing products based on the
Technology. Manthey Redmond (Aust) may terminate this agreement in
the event that the Patent Licensing Agreement is terminated. The
agreement is subject to and governed by the law of Queensland,
Australia.
In
November 2009 and March 2010, the Company received $39,925 and $955 of capital
injection, respectively from Manthey Redmond (Aust) pursuant to the Investment
Agreement, which was recorded as additional paid-in capital.
F-6
MANTHEY
REDMOND CORPORATION
(A
Development Stage Company)
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
Development
Agreement
On May 1,
2009 the Company entered into a Development Agreement with Manthey Holdings by
which, commencing July 1, 2009, Manthey Holdings will provide exclusive use of
its engineering facility and employees for the purpose of research and
development related to the Technology for which the Company will pay Manthey
Holdings $30,000 per month beginning July 1, 2009 up to a maximum of $540,000 at
which time the agreement shall terminate. On November 6, 2009 the Company
entered into an amended Development Agreement dated May 1, 2009 with Manthey
Holdings. The amended agreement removed the exclusivity of the use of
Manthey Holdings’ engineering facility and employees, and deferred the
commencement date of the agreement and first payment to November 20,
2009. Our president/director is the sole shareholder and director of
Manthey Holdings which serves as the trustee of the Manthey Holdings
Trust. Our president/director is also the beneficiary of the Manthey
Holdings Trust and may be deemed the beneficial owner of the 3,040,000 shares,
or 29.6% of the Company’s common stock owned by the Manthey Holdings
Trust.
On
November 6, 2009, the agreement was amended to revise the commencement date of
payment from July 1, 2009 to November 20, 2009. For the three months
ended March 31, 2010, the Company incurred $90,000 of service fees pursuant to
the amended agreement with Manthey Holdings and recorded in accrued
expense.
The
agreement will also terminate in the event that the Patent Licensing Agreement
is terminated. Manthey Holdings has agreed to build and test
prototypes based on the Technology at its research facility. The
agreement is subject to and governed by the law of Queensland,
Australia.
NOTE
5 - ACCRUED EXPENSES
Accrued
expenses consisted of the following:
March
31,
2010
|
December
31,
2009
|
|||||||
Accrued
rent
|
$
|
-
|
$
|
1,050
|
||||
Accrued
research and development expense – related party
|
93,227
|
3,228
|
||||||
Total
|
$
|
93,227
|
$
|
4,278
|
NOTE
6 – STOCKHOLDERS’ DEFICIT
The
Company is authorized to issue 100,000,000 shares of common stock with a par
value of $.0001 and 20,000,000 shares of preferred stock with a par value of
$.0001. On June 1, 2009, the Company issued 10,250,000 shares of
common stock at par value to its sixty-six (66) initial
stockholders.
Holders
of shares of common stock are entitled to one vote for each share on all matters
to be voted on by the stockholders. Holders of common stock do not
have cumulative voting rights. Holders of common stock are entitled
to share ratably in dividends, if any, as may be declared from time to time by
the board of directors in its discretion from funds legally available
therefore. In the event of a liquidation, disolution or winding up,
the holders of common stock are entitled to share pro rata all assets remaining
after payment in full of all liabilities. Holders of common stock
have no preemptive rights to purchase the Company’s common
stock. There are no conversion or redemption rights or sinking fund
provisions with respect to the common stock.
F-7
MANTHEY
REDMOND CORPORATION
(A
Development Stage Company)
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
In
November 2009 and March 2010, the Company received $39,925 and $955 of capital
injection, respectively from Manthey Redmond (Aust) pursuant to the Investment
Agreement (see Note 4), which was recorded as additional paid-in
capital.
NOTE
7 – OPERATING LEASES
On July
10, 2009, the Company entered into a lease agreement with Premier Business
Centers, under which the Company will lease approximately 165 square feet of
office space located at 10940 Wilshire Boulevard, Suite 1600, Los Angeles,
California 90024 at a monthly rate of $1,050. The lease term is
month-to-month commencing August 3, 2009 with security posit of one-month rent
of $1,050 recorded as Other Assets as of March 31, 2010 and December 31,
2009.
F-8
MANTHEY
REDMOND CORPORATION
(A
Development Stage Company)
INDEX
TO FINANCIAL STATEMENTS
December
31, 2009
Report
of Independent Registered Public Accounting Firm
|
F-10
|
Financial
Statements:
|
|
Balance
Sheet
|
F-11
|
Statement
of Operations
|
F-12
|
Statement
of Changes in Stockholders’ Deficit
|
F-13
|
Statement
of Cash Flows
|
F-14
|
Notes
to Financial Statements
|
F-15
|
F-9
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors and Stockholders of
Manthey
Redmond Corporation:
We have
audited the accompanying balance sheet of Manthey Redmond Corporation (the
“Company”) (a development stage company) as of December 31, 2009, and the
related statement of operations, changes in stockholders' deficit, and cash
flows for the period from April 20, 2009 (date of inception) to December 31,
2009. 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 audits.
We
conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. The
Company is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting. Accordingly, we express no
such opinion. An audit 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 audits provide a reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Manthey Redmond Corporation as of
December 31, 2009 and the results of its operations and its cash flows for the
period from April 20, 2009 (date of inception) to December 31, 2009 in
conformity with accounting principles generally accepted in the United States of
America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As described in Note 2 of the
financial statements, the Company has been in the development stage since its
inception (April 20, 2009) and continues to incur expenses. The
Company’s viability is dependent upon its ability to obtain future financing and
the success of its future operations. These matters raise substantial
doubt about the Company’s ability to continue as a going
concern. Management’s plan in regard to these matters is also
described in Note 2 to the financial statements. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/ KCCW
Accountancy Corp.
Diamond
Bar, California
April 23,
2010
F-10
MANTHEY
REDMOND CORPORATION
|
||
(A
Development Stage Company)
|
||
BALANCE
SHEET
|
||
December
31, 2009
|
||
Assets
|
||||
Current
Assets
|
||||
Cash
and cash equivalents
|
$ | 4,455 | ||
Other
Assets
|
1,050 | |||
Total
Assets
|
$ | 5,505 | ||
Liabilities and Stockholders'
Deficit
|
||||
Current
Liabilities
|
||||
Accrued
expense
|
$ | 4,278 | ||
Due
to related party
|
38,950 | |||
Total
Current Liabilities
|
43,228 | |||
Stockholders'
Deficit
|
||||
Preferred
stock - $.0001 par value; 20,000 shares authorized, 0
shares
|
||||
issued
and outstanding
|
- | |||
Common
stock - $.0001 par value; 100,000,000 shares authorized,
|
||||
10,250,000
shares issued and outstanding
|
1,025 | |||
Additional
paid-in capital
|
39,925 | |||
Accumulated
deficit
|
(78,672 | ) | ||
Total
Stockholders' Deficit
|
(37,722 | ) | ||
Total
Liabilities and Stockholders' Deficit
|
$ | 5,505 |
The
accompanying notes are an integral part of these audited financial
statements.
F-11
MANTHEY
REDMOND CORPORATION
|
||
(A
Development Stage Company)
|
||
STATEMENT
OF OPERATIONS
|
||
For
the Period from April 20, 2009 (Inception) to December 31,
2009
|
||
Net
revenue
|
$ | - | ||
Operating
expenses
|
||||
Professional
services
|
31,503 | |||
Rent
expense
|
5,417 | |||
Other
general, selling and administrative expense
|
752 | |||
Research
and development expense
|
41,000 | |||
Total
operating expenses
|
78,672 | |||
Net
loss
|
$ | (78,672 | ) | |
Basic
and diluted net loss per weighted-average number of common
shares
|
$ | - | ||
Weighted
average shares outstanding, basic and diluted
|
8,575,697 |
The
accompanying notes are an integral part of these audited financial
statements.
F-12
MANTHEY
REDMOND CORPORATION
|
(A
Development Stage Company)
|
STATEMENT
OF CHANGES IN STOCKHOLDERS' DEFICIT
|
For
the Period from April 20, 2009 (Inception) to December 31,
2009
|
Common
Stock
|
Total
|
|||||||||||||||||||
Additional
|
Accumulated
|
Stockholders'
|
||||||||||||||||||
Shares
|
Amount
|
Paid-in
Capital
|
Deficit
|
Deficit
|
||||||||||||||||
Balance
at April 20, 2009 (Inception)
|
- | $ | - | $ | - | $ | - | $ | - | |||||||||||
Issuance
of common stock
|
10,250,000 | 1,025 | - | - | 1,025 | |||||||||||||||
Capital
contribution
|
- | - | 39,925 | - | 39,925 | |||||||||||||||
Net
loss for the period ended December 31, 2009
|
- | - | - | (78,672 | ) | (78,672 | ) | |||||||||||||
Balance
at December 31, 2009
|
10,250,000 | $ | 1,025 | $ | 39,925 | $ | (78,672 | ) | $ | (37,722 | ) |
The
accompanying notes are an integral part of these audited financial
statements.
F-13
MANTHEY
REDMOND CORPORATION
|
|||||
(A
Development Stage Company)
|
|||||
STATEMENT
OF CASH FLOWS
|
For
the Period from April 20, 2009 (Inception) to December 31,
2009
|
||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||
Net
loss
|
$ | (78,672 | ) | |
Adjustments
to reconcile net loss to net cash provided by operating
activities:
|
||||
Decrease
(increase) in assets:
|
||||
Other
assets
|
(1,050 | ) | ||
Increase
(decrease) in liabilities:
|
||||
Accrued
expense
|
4,278 | |||
Net
cash used in operating activities
|
(75,445 | ) | ||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||
Borrowings
from related party
|
38,950 | |||
Proceeds
from issuance of common stock
|
1,025 | |||
Capital
contribution from shareholder
|
39,925 | |||
Net
cash provided by financing activities
|
79,900 | |||
NET
INCREASE IN CASH & CASH EQUIVALENTS
|
4,455 | |||
CASH
& CASH EQUIVALENTS, BEGINNING BALANCE
|
- | |||
CASH
& CASH EQUIVALENTS, ENDING BALANCE
|
$ | 4,455 | ||
SUPPLEMENTAL
DISCLOSURES:
|
||||
Interest
paid
|
$ | - | ||
Income
tax paid
|
$ | - |
The
accompanying notes are an integral part of these audited financial
statements.
F-14
MANTHEY
REDMOND CORPORATION
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
NOTE
1 – ORGANIZATION AND NATURE OF OPERATIONS
Manthey
Redmond Corporation (the “Company”) is a development stage company incorporated
in the State of Delaware in April, 2009 to research, design, manufacture, and
market technology now leased and to be developed by the
Company. Manthey Redmond (Aust) Pty Ltd., an Australian corporation
("Manthey Redmond (Aust)"), is the patent owner and developer of the Manthey
Redmond Eco-Engine, a fuel-efficient, lightweight, low-emission, multi-fuel
engine smaller and less expensive than conventional internal combustion engines
initially targeted for marine applications.
In May,
2009, the Company entered into a Patent Licensing Agreements with Manthey
Redmond (Aust) for the development, manufacture, use, sale, and sublicense of
the Manthey Redmond Eco-Engine and all developed technology and products related
to the technology patent (the "Technology") for a royalty payment to Manthey
Redmond (Aust) of 5% of annual gross profits. Pursuant to an
Investment Agreement entered into with the Company in May, 2009, Manthey Redmond
(Aust) agreed to fund to the Company monthly payments of $40,000 up to a maximum
of $4,200,000 in aggregate to assist the Company in commercializing products
based on the Technology. All three of the Company’s directors serve
as the directors of Manthey Redmond (Aust).
In May,
2009, the Company entered into a Development Agreement with Manthey Holdings Pty
Limited (“Manthey Holdings”) for the exclusive use of Manthey Holdings'
engineering facility and employees for research and development of and related
to the Technology at a monthly fee of $30,000 up to a maximum of $540,000 in
aggregate. In November, 2009, the Development Agreement was amended
to remove the exclusivity of the use of Manthey Holdings’ engineering facility
and employees, and to defer the commencement date of the agreement and first
payment to November 20, 2009. The Company’s president/director is the
sole shareholder and director of Manthey Holdings which serves as the trustee of
the Manthey Holdings Trust. The Company’s president/director is also
the beneficiary of the Manthey Holdings Trust and may be deemed the beneficial
owner of the 3,040,000 shares, or 29.6% of the Company’s common stock owned by
the Manthey Holdings Trust. On November 6, 2009, the agreement was
amended to revise the commencement date of payment from July 1, 2009 to November
20, 2009.
NOTE
2 – GOING CONCERN
The
Company’s financial statements are prepared using generally accepted accounting
principles in the United States of America applicable to a going concern, which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. The Company has not yet established an
ongoing source of revenues sufficient to cover its operating costs and allow it
to continue as a going concern. The ability of the Company to
continue as a going concern is dependent on the Company obtaining adequate
capital to fund operating losses until it becomes profitable. If the
Company is unable to obtain adequate capital, it could be forced to cease
operations. The accompanying financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a
going concern.
Management’s Plan to
Continue as a Going Concern
In order
to continue as a going concern, the Company will need, among other things,
additional capital resources. Management’s plans to obtain such
resources for the Company include (1) obtaining capital from the sale of its
securities, (2) the sublicensing and sale of the Manthey Redmond Eco-Engine, (3)
additional capital injection from Manthey Redmond (Aust) pertaining to the
Investment Agreement (see Note 3), and (3) short-term borrowings from
shareholders or related party when needed. However, management cannot
provide any assurance that the Company will be successful in accomplishing any
of its plans.
F-15
MANTHEY
REDMOND CORPORATION
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
The
ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plans described in the preceding
paragraph and eventually secure other sources of financing and attain profitable
operations.
NOTE
3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Fiscal
Year
The
fiscal year of the Company is January 1 to December 31.
Cash and Cash
Equivalents
Cash and
cash equivalents include unrestricted deposits and short-term investments with
an original maturity of three months or less. The Company minimizes
its risk associated with cash and cash equivalents by periodically evaluating
the credit quality of its primary financial institution. The balance
at times may exceed federally insured limits. At December 31, 2009,
the balance did not exceed the federally insured limit. As of December 31, 2009,
cash and cash equivalent amounted to $4,455.
Revenue
Recognition
We
recognize product revenue when the following fundamental criteria are met: (i)
persuasive evidence of an arrangement exists, (ii) delivery has occurred, (iii)
our price to the customer is fixed or determinable and (iv) collection of the
resulting accounts receivable is reasonably assured. We recognize
revenue for product sales upon transfer of title to the
customer. Customer purchase orders and/or contracts are generally
used to determine the existence of an arrangement. Shipping documents
and the completion of any customer acceptance requirements, when applicable, are
used to verify product delivery or that services have been
rendered. We assess whether a price is fixed or determinable based
upon the payment terms associated with the transaction and whether the sales
price is subject to refund or adjustment. We will record reductions
to revenue for estimated product returns and pricing adjustments in the same
period that the related revenue is recorded. These estimates will be
based on historical sales returns when available, analysis of credit memo data,
and other factors known at the time.
Use of
Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
Net Loss per Common
Share
Basic net
loss per share is calculated by dividing net loss by the weighted-average number
of common shares outstanding during the period. Diluted net loss per
share reflects the potential dilution of securities by including common stock
equivalents, such as stock options, stock warrants and convertible preferred
stock, in the weighted average number of common shares outstanding for a period,
if dilutive. At December 31, 2009, there were no potentially dilutive
securities.
F-16
MANTHEY
REDMOND CORPORATION
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
Recently Issued Accounting
Pronouncements
The
Company has adopted all recently issued accounting
pronouncements. The adoption of the accounting pronouncements,
including those not yet effective, is not anticipated to have a material effect
on the financial position or results of operations of the Company.
NOTE
4 – RELATED PARTY TRANSACTIONS
Advances from Related
Party
On June
3, 2009, the Company received $38,950 of advances from Manthey Redmond (Aust),
all directors of which are also directors of the Company. The
advances were non-interest bearing loan to be repaid at the discretion of the
Board of Directors of the Company.
Patent Licensing
Agreement
On May 1,
2009, the Company entered into a Patent Licensing Agreement with Manthey Redmond
(Aust). Manthey Redmond is the owner, developer and patent applicant
of the Eco-Engine and all related technology (the "Technology") developed and to
be developed. Pursuant to the agreement, Manthey Redmond (Aust) has
granted to the Company, a license to develop, manufacture, have manufactured,
use and sell or supply the Technology in return for a royalty fee equal to 5% of
the Company's gross profits earned as a result of the license
agreement. The Company has the right to sublicense its rights under
the agreement and is entitled to information and use of any inventions or
improvements on the Technology made by Manthey Redmond (Aust) without additional
charge. Manthey Redmond (Aust) will apply for valid patents pursuant
to each invention or improvements on the Technology. The agreement
may be terminated at the option of Manthey Redmond (Aust) in the event that the
Company becomes insolvent, or seeks protection from its creditors under any
United States federal or state bankruptcy act or if an outside administrator or
controller is voluntary or involuntarily appointed to control the
Company. The agreement is subject to and governed by the law of
Queensland, Australia.
Investment
Agreement
On May 1,
2009, the Company entered into an Investment Agreement with Manthey Redmond
(Aust) by which Manthey Redmond (Aust) has agreed to invest a non-refundable
amount of $40,000 per month beginning July 1, 2009, aggregating $4,200,000
to assist the Company in commercializing products based on the
Technology. Manthey Redmond (Aust) may terminate this agreement in
the event that the Patent Licensing Agreement is
terminated. The agreement is subject to and governed by the law
of Queensland, Australia. In November 2009, the Company received an
aggregate of $39,925 of capital injection from Manthey Redmond (Aust) pursuant
to the Investment Agreement, which was recorded as additional paid-in capital as
of December 31, 2009.
Development
Agreement
On May 1,
2009 the Company entered into a Development Agreement with Manthey Holdings by
which, commencing July 1, 2009, Manthey Holdings will provide exclusive use
of its engineering facility and employees for the purpose of research and
development related to the Technology for which the Company will pay Manthey
Holdings $30,000 per month beginning July 1, 2009 up to a maximum of $540,000 at
which time the agreement shall terminate. On November 6, 2009 the Company
entered into an amended Development Agreement dated May 1, 2009 with Manthey
Holdings. The amended agreement removed the exclusivity of the use of Manthey
Holdings’ engineering facility and employees, and deferred the commencement
date of the agreement and first payment to November 20, 2009. Our
president/director is the sole shareholder and director of Manthey Holdings
which serves as the trustee of the Manthey Holdings Trust. Our
president/director is also the beneficiary of the Manthey Holdings Trust and may
be deemed the beneficial owner of the 3,040,000 shares, or 29.6% of the
Company’s common stock owned by the Manthey Holdings Trust.
F-17
MANTHEY
REDMOND CORPORATION
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
On
November 6, 2009, the agreement was amended to revise the commencement date of
payment from July 1, 2009 to November 20, 2009. For the period from
April 20, 2009 (inception) to December 31, 2009, the Company incurred $41,000 of
service fees pursuant to the amended agreement with Manthey Holdings, $37,773 of
which were paid during the period and recorded as research and development
expense, while $3,228 was recorded in accrued expense (see Note 5).
The
agreement will also terminate in the event that the Patent Licensing Agreement
is terminated. Manthey Holdings has agreed to build and test prototypes
based on the Technology at its research facility. The agreement
is subject to and governed by the law of Queensland, Australia.
NOTE
5 - ACCRUED EXPENSE
Accrued
expense consisted of the following:
December
31,
2009
|
||||
Accrued
rent
|
$
|
1,050
|
||
Accrued
research and development expense – related party
|
3,228
|
|||
Total
|
$
|
4,278
|
NOTE
6 – STOCKHOLDERS’ DEFICIT
The
Company is authorized to issue 100,000,000 shares of common stock with a par
value of $.0001 and 20,000,000 shares of preferred stock with a par value of
$.0001. On June 1, 2009, the Company issued 10,250,000 shares of
common stock at par value to its sixty-six (66) initial
stockholders.
Holders
of shares of common stock are entitled to one vote for each share on all matters
to be voted on by the stockholders. Holders of common stock do not
have cumulative voting rights. Holders of common stock are entitled
to share ratably in dividends, if any, as may be declared from time to time by
the board of directors in its discretion from funds legally available
therefore. In the event of a liquidation, disolution or winding up,
the holders of common stock are entitled to share pro rata all assets remaining
after payment in full of all liabilities. Holders of common stock
have no preemptive rights to purchase the Company’s common
stock. There are no conversion or redemption rights or sinking fund
provisions with respect to the common stock.
In
November 2009, the Company received an aggregate of $39,925 of capital injection
from Manthey Redmond (Aust) pursuant to the Investment Agreement (see Note 4),
which was recorded as additional paid-in capital as of December 31,
2009.
NOTE
7 – OPERATING LEASES
On July
10, 2009, the Company entered into a lease agreement with Premier Business
Centers, under which the Company will lease approximately 165 square feet of
office space located at 10940 Wilshire Boulevard, Suite 1600, Los Angeles,
California 90024 at a monthly rate of $1,050. The lease term is
month-to-month commencing August 3, 2009 with security posit of one-month rent
of $1,050 recorded as Other Assets as of December 31, 2009.
F-18
PART
II
Item
13. Other expenses of Issuance and Distribution
The
following table sets forth the Company’s expenses in connection with this
registration statement. All of the listed expenses are estimates, other than the
filing fees payable to the Securities and Exchange Commission.
Registration
Fees
|
$ | |||
State
filing fees
|
$ | |||
Edgarizing
fees
|
$ | |||
Transfer
agent fees
|
$ | |||
Accounting
fee
|
$ | |||
Legal
fees
|
$ | |||
Printing
|
$ |
Item
14. Indemnification of Directors and
Officers
The
Company’s articles of incorporation includes an indemnification provision that
provides that a director shall not be liable to the Company or any shareholder
for monetary damages for breach of fiduciary duty as a director except (i) for
any breach of the director’s duty of loyalty to the Company or its shareholders
or (ii) for acts or omissions not in good faith or which involve intentional
misconduct of (iii) for unlawful payment of dividend or unlawful stock purchase
or redemption or (iv) for any transaction from which the director derived an
improper personal benefit.
The
Company does not believe that such indemnification affects the capacity of such
person acting as officer, director or control person of the
Company.
Item
15. Recent Sales of Unregistered Securities
The
Company has sold the following securities within the past three years which were
not registered under the Securities Act of 1933:
Since
inception in April, 2009, the Company issued 10,250,000 shares of its common
stock at par ($.0001) pursuant to an exemption from registration under Section
3(b) of the Securities Act of 1933, as amended, as a transaction by an issuer
not involving any public offering. Each of the transactions listed
below was a private transaction with a person or entity related to or personally
known to the founder of the Company or one of its officers or
shareholders. There was no public solicitation or
advertisement.
34
Names
|
Number of Shares
|
|||
Ruza
Studenovich
|
290,000 | |||
A
& J Stone Trust
|
290,000 | |||
Con
and Vick Elfes
|
40,000 | |||
The
Byron Real Estate Consulting Group Pty
|
290,000 | |||
Sharyn
Alayne Johnston
|
84,000 | |||
Peter
Geoffrey Craig
|
100,000 | |||
Peter
McDonald
|
100,000 | |||
Peter
Darcy
|
10,000 | |||
Sally
Manthey
|
1,500 | |||
Jodie
Manthey
|
1,500 | |||
John
Daniels
|
160,000 | |||
Ferriter
Super Fund
|
133,000 | |||
Allied
Securities Inc
|
200,000 | |||
Branko
Jose Pavnovic
|
362,500 | |||
Elly
Marie Hohai
|
100,000 | |||
Donald
Jessup
|
1,500 | |||
Tiber
Creek Corporation
|
250,000 | |||
Anthony
Stefanac
|
400,000 | |||
Vicky
Narelle Baker and Stephen James Baker
|
10,000 | |||
Geoffrey
Alan and Ada Ida Stella Johnston
|
10,000 | |||
Arthur
and Con Nicolis
|
39,000 | |||
Kim
Redmond-Fewtrell
|
71,500 | |||
Brendan
Tresoglavic
|
3,250 | |||
Simon
Tresoglavic and Anna Tresoglavic
|
9,750 | |||
Julian
Walters
|
6,500 | |||
Alexsandar
Citroski
|
26,000 | |||
Elizabeth
Paskoski
|
6,500 | |||
Anne
Rice
|
3,250 | |||
Julieanne
Stone
|
5,200 | |||
Marsha
Roberts
|
1,950 | |||
Maureen
Egan
|
4,550 | |||
Amanda
Scuglia
|
650 | |||
Telesia
Veamatahau and Sione Ahovelo
|
6,500 | |||
Tevita
Veamatahau
|
1,300 | |||
Sili
Venusi Veamatahau
|
6,500 | |||
Brandon
Howard
|
650 | |||
Nau
Toutai Ahovelo
|
650 | |||
Gaiu
Dinu
|
650 | |||
Losh
Hazen Matthews
|
6,500 | |||
Kevin
Ellem and Beryl Ellem
|
6,500 | |||
Tobias
Essington Breen
|
100,000 | |||
Vasil
Perovski
|
3,600 | |||
Paul
Battisti and Samantha Battisti
|
13,000 | |||
Nathan
Ghosn
|
6,500 | |||
Sylvania
Marina
|
6,500 | |||
Chad
Parrish
|
6,500 | |||
GJA
Developments Pty Ltd
|
6,500 | |||
Joshua
Redmond
|
9,500 | |||
Jack
Warfield
|
6,500 | |||
Marko
Matach
|
3,250 | |||
Anna
Gamulin
|
3,250 | |||
Nada
Studenovic
|
3,250 | |||
Janja
Studenovic
|
6,500 | |||
Martin
Dunning
|
6,500 | |||
Newstew
Family Trust
|
32,500 | |||
Drago
Bozic
|
6,500 | |||
Mladenko
Radas
|
6,500 | |||
Peter
Bottele Superannuation Fund
|
16,250 | |||
Fock
Family Superannuation Fund
|
16,250 | |||
Neilson
Family Trust
|
32,500 | |||
Global
IP Traders Corporation
|
380,000 | |||
Darryl
Andrew Wandrey
|
16,000 | |||
Manthey
Holdings Pty Ltd
|
3,040,000 | |||
Redmond
Family Holdings Pty Ltd
|
2,590,800 | |||
Alison
Redmond
|
290,000 | |||
North
American Motors Pty Ltd
|
600,000 |
35
Item
16. Exhibits and Financial Statement Schedules.
EXHIBITS
3.1
|
Certificate
of Incorporation
|
|
3.2
|
By-laws
|
|
10.1
|
Patent
Licensing Agreement between Manthey Redmond Corporation and Manthey
Redmond (Aust) Pty Limited
|
|
10.2
|
Investment
Agreement between Manthey Redmond Corporation and Manthey Redmond (Aust)
Pty Limited
|
|
10.3
|
Development
Agreement between Manthey Redmond Corporation and Manthey Holdings Pty
Limited
|
|
5.0*
|
Opinion
of Counsel on legality of securities being registered
|
|
23.1
|
Consent
of Accountants
|
|
23.2*
|
Consent
of Attorney (as part of Exhibit
5.0)
|
* To
be filed
36
Item
17. Undertakings
Undertaking Pursuant to Rule
415 Under the Securities Act of 1933
The
undersigned registrant hereby undertakes:
(1).
|
To
file, during any period in which it offers or sales securities, 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 which, individually or together,
represent a fundamental change in the information 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) any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% 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 additional 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 the securities at that time to be the initial bona fide
offering thereof.
|
(3).
|
To
remove from registration by means of a post-effective amendment any of the
securities that remain unsold at the termination of the
offering.
|
(4).
|
That,
for the purpose of determining liability under the Securities Act of 1933
to any purchaser in the initial distribution of
securities:
|
Each
prospectus filed pursuant to Rule 424(b) as part of a registration statement
relating to this offering, other than registration statements relying on Rule
403B 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.
37
(5).
|
That,
for the purpose of determining liability under the Securities Act of 1933
to any purchaser in the initial distribution of
securities:
|
The
undersigned registrant undertakes that in a primary offering of securities of
the undersigned registrant pursuant to this registration statement, regardless
of the underwriting method used to sell the securities to the purchaser, if the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such
purchaser.:
|
i
|
Any
preliminary prospectus or prospectus of the undersigned registrant
relating to this offering required to be filed pursuant to Rule
424;
|
|
ii.
|
Any
free writing prospectus relating to this 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.
|
Undertaking Request for
acceleration of effective date or filing of registration statement becoming
effective upon filing.
The
undersigned registrant hereby undertakes:
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
38
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Los Angeles, State of
California, on June 22, 2010.
MANTHEY
REDMOND CORPORATION
|
|
Date:
6/22/2010
|
/s/
Steven Charles Manthey
|
President,
principal executive officer
|
|
Date:
6/22/2010
|
/s/
Steven Charles Manthey
|
Treasurer,
controller, principal financial officer,
|
|
Principal
accounting officer
|
Pursuant
to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed below by the following persons in the capacities and
on the dates indicated.
Signature
|
Capacity
|
Date
|
||
|
||||
Steven
Charles Manthey
|
Director
|
6/22/2010
|
||
|
|
|||
Timothy
John Eric Redmond
|
Director
|
6/22/2010
|
||
|
||||
Geoffrey
Redmond
|
Director
|
6/22/2010
|