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EX-99.1 - KinerjaPay Corp. | v203596_ex99-1.htm |
EX-23.1 - KinerjaPay Corp. | v203596_ex23-1.htm |
As
filed with the Securities and Exchange Commission on November 22,
2010
An
Exhibit List can be found on page II-5.
Registration
No.333-168068
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Amendment
No. 1 to
FORM
S-1
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
Solarflex
Corp.
(Exact
name of Registrant as specified in its charter)
Delaware
(State or
other jurisdiction of incorporation or organization)
3841
(Primary
Standard Industrial Classification Code Number)
42-1771817
(I.R.S.
Employer Identification Number)
c/o
Sergei Rogov
12 Abba
Hillel Silver Street, 11th
Floor
Ramat
Gan, 52506, Israel
Phone
number: 972-3-753-9888
Fax
number: 972-3-725-2632
(Address
and telephone number of Registrant's principal executive offices)
Solarflex
Corp.
113
Barksdale Professional Center
Newark,
DE 19711
Tel.
302-266-9367
(Name,
address, including zip code, and telephone number,
Including
area code, of agent for service)
Copies of
communications to:
SRK Law
Offices
7
Oppenheimer Street
Rabin
Science Park
Rehovot,
Israel 76701
Telephone
No.: (718) 360-5351
Facsimile
No.: +972 8-936-6000
Our
company plans to commence the proposed sale of our common stock to the public
within one month after the S-1 becomes effective.
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 of 1933, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. ¨
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. ¨
If this
Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act of 1933, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. ¨
If
delivery of the prospectus is expected to be made pursuant to Rule 434, please
check the following box. ¨
Indicate
by check mark whether registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See
definitions of “large accelerated filer,” “accelerated filer,” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large
accelerated filer
|
¨
|
Accelerated
Filer
|
¨
|
|
Non-accelerated
filer
|
¨
|
Smaller
reporting company
|
x
|
Calculation
of Registration Fee
Proposed
|
Proposed
|
Amount
|
||||||||||||||
Title
|
Amount
|
Maximum
|
Maximum
|
of
|
||||||||||||
Of Securities
|
to be
|
Offering Price
|
Aggregate
|
Registration
|
||||||||||||
To be Registered
|
Registered
|
Per Share
|
Offering Price (1)
|
Fee (1)
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||||||||||||
Common
Stock(1)
|
2,500,000 | $ | 0.03 | $ | 75,000 | $ | 6.00 | |||||||||
Par
value $0.0001
|
||||||||||||||||
Per
share
|
(1)
|
Estimated
pursuant to Rule 457(o) under the Securities Act of 1933 solely for the
purpose of computing the amount of the registration
fee.
|
Solarflex
Corp. does not intend to escrow any funds received through this offering. Once
funds are received as the result of a completed sale of common stock being
issued by us, those funds will be placed into our corporate bank account and may
be used at the discretion of the management (as per Item 501(b)(8)(iii) of
Regulation S-K).
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 this Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
THE
INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND IS SUBJECT TO COMPLETION AND
MAY BE CHANGED. THE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS
IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO
BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
Preliminary Prospectus Subject To
Completion Dated November 22,
2010
Solarflex
Corp.
Up
to a Maximum of 2,500,000 Shares of Common Stock at $0.03 Per Share
This
prospectus relates to our initial public offering of 2,500,000 shares of our
common stock at an offering price of $0.03 per share. The offering will commence
once this prospectus becomes effective and will close no later than 180 days
thereafter, unless we decide to extend the offering period, in our absolute
discretion, by a further 90 days. . We will pay all expenses incurred in this
offering. The common stock is being offered by us on a no-minimum basis. Since
there are no minimum purchase requirements, we may not receive any proceeds or
we may receive only minimal proceeds from this offering. To the extent that we
receive funds in this offering, they will be immediately available for our use
since we have no arrangements to place funds in escrow, trust or similar
account.
If all
of the shares offered by us are purchased, the net proceeds to us will be
$48,500. This is our initial public offering and no public market currently
exists for shares of our common stock. Our common stock is presently not traded
on any public market or securities exchange, and we have not applied for listing
or quotation on any public market.
We are
offering our shares of common stock on a best efforts basis. We are not required
to sell any specific number or dollar amount of securities but will use our best
efforts to sell the securities offered. This means there is no guarantee that we
will be able to sell all or any of the shares being offered. Our common stock
will be sold by our Directors and we will not be utilizing an underwriter for
this offering. The intended methods of communication with potential investors
include, without limitation, telephone and personal contacts. Such persons will
not be paid any commissions or any other form of compensation for such sales.
For more information, see the section of this prospectus entitled "Plan of
Distribution."
OUR BUSINESS IS SUBJECT TO MANY RISKS
AND AN INVESTMENT IN OUR COMMON STOCK WILL ALSO INVOLVE A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER THE
FACTORS DESCRIBED UNDER THE HEADING "RISK FACTORS" BEGINNING ON PAGE 8
BEFORE INVESTING IN OUR COMMON
STOCK.
Prior
to this offering, there has been no public market for our common stock and we
have not applied for listing or quotation on any public market. The offering
price of $0.03 per share offered hereby was determined to a large extent
arbitrarily, based on a determination by the Board of Directors of the price at
which they believe investors would be willing to purchase the shares, the lack
of liquidity resulting from the fact that there is no present market for our
stock, and the high level of risk considering our lack of profitable operating
history; however, the offering price bears no relationship to our assets, book
value, earnings or any other customary investment criteria, and has not been
determined by any independent financial evaluation. After the
effective date of the registration statement, we intend to have a market maker
file an application with the Financial Industry Regulatory Authority (“FINRA”)
to have our common stock quoted on the OTC Bulletin Board. We currently have no
market maker who is willing to list quotations for our stock. There is no
assurance that an active trading market for our shares will develop, or, if
developed, that it will be sustained.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS
TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The
information in this prospectus is not complete and may be amended. We may not
sell these securities until the Registration Statement filed with the Securities
and Exchange Commission is effective. This prospectus is not an offer to sell
these securities and it is not soliciting an offer to buy these securities in
any state where the offer or sale is not permitted.
The date
of this prospectus is ________ ___, 2010
TABLE
OF CONTENTS
Prospectus
Summary
|
5 | ||
Our
Company
|
5 | ||
Selected
Summary Financial Data
|
7 | ||
Risk
Factors
|
8 | ||
Use
of Proceeds
|
16 | ||
Our
Business
|
18 | ||
Management’s
Discussion and Analysis of Financial Condition or Plan of
Operation
|
22 | ||
Market
for Common Equity and Related Stockholder Matters
|
24 | ||
Directors,
Executive Officers, Promoters and Control Persons
|
26 | ||
Executive
Compensation
|
28 | ||
Certain
Relationships and Related Transactions
|
29 | ||
Security
Ownership of Certain Beneficial Owners and Management
|
30 | ||
Shares
Eligible for Future Sale
|
31 | ||
Plan
of Distribution
|
32 | ||
Changes
In and Disagreements with Accountants on Accounting and Financial
Disclosure
|
34 | ||
Indemnification for
Securities Act Liabilities
|
34 | ||
Legal
Matters
|
35 | ||
Experts
|
35 | ||
Interest
of Named Experts and Counsel
|
35 | ||
Available
Information
|
35 | ||
Index to
Financial Statements
|
F-1 |
2
You may
rely only on the information contained in this prospectus or that we have
referred you to. We have not authorized anyone to provide you with different
information. This prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any securities other than the common stock
offered by this prospectus. This prospectus does not constitute an offer to sell
or a solicitation of an offer to buy any common stock in any circumstances in
which such offer or solicitation is unlawful. Neither the delivery of this
prospectus nor any sale made in connection with this prospectus shall, under any
circumstances, create any implication that there has been no change in our
affairs since the date of this prospectus or that the information contained by
reference to this prospectus is correct as of any time after its
date.
3
DEALER
PROSPECTUS DELIVERY OBLIGATION
Until
______________ (90 days after the effective date of this prospectus), all
dealers that effect transactions in these securities, whether or not
participating in this offering, may be required to deliver a prospectus. This is
in addition to the dealers’ obligation to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or
subscriptions.
4
Prospectus
Summary
The
following summary highlights selected material information contained elsewhere
in this prospectus. This summary does not contain all the information you should
consider before investing in the securities. Before making an investment
decision, you should read the entire prospectus carefully, including the "Risk
Factors" section, the financial statements, and the notes to the financial
statements. All references to "we," "us," "our," "Solarflex," "Company,"
"Registrant" or similar terms used in this prospectus refer to Solarflex
Corp.
Our
Company
We
were incorporated in Delaware on February 12, 2010. We are a development stage
company established for the purpose of developing, manufacturing and selling a
solar photovoltaic element (also known as a photovoltaic cell) based on certain
proprietary technology that is expected to enable an increase in
solar energy conversion and thus provide energy at a lower cost. A
photovoltaic element is a device that converts light into electrical
flow.
On
March 10, 2010, we entered into a patent sale agreement (the "Patent Sale
Agreement ") with P.T Holding, represented by its owner, Dr. Boris Sigalov,
whereby P.T. Holding sold to us all of P.T. Holding’s right, title, and interest
in a patent application, Israel Patent Application Number 198369, (the “Patent
Application”), for the design of and manufacturing method for a solar
photovoltaic element. P.T. Holding transferred the Patent
Application to us in exchange for our agreeing to pay P.T. Holding a sum equal
to 10% of the royalties that we will receive in relation to the Patent
Application.
We
believe that the technology underlying the Patent Application has the potential
to be adopted and implemented in the home and business solar energy markets.
This belief is based on the twin assumptions that our proprietary technology is
able to offer a significant improvement in energy conversion efficiency and that
the solar energy market will react favorably to a product that has the potential
to deliver electricity at a lower cost. Nevertheless, we recognize
that we still need to establish that the technology will work as expected, and
that we can implement the technology in the production cycle of photovoltaic
cells at low cost, without causing problems to the solar energy
system.
The
Patent Application is for the design and manufacture of a solar photovoltaic
element that absorbs the solar spectrum and that is expected to enable an
increase in solar energy conversion. The device will be manufactured on the
basis of at least one vacuum chamber and will include five layers. As soon as we
raise the necessary funds, we will use the raised proceeds to develop a working
prototype of the invention. Although we have not yet engaged a
manufacturer to construct a working prototype, based on our preliminary
discussions with certain manufacturing vendors, we believe that it will take
approximately twelve months to produce a working prototype, from design through
construction. Once a working prototype has been developed and
produced, we will work to develop and manufacture the device in commercial
quantities, or license the manufacturing and related marketing and selling
rights to a third party.
Our
principal offices are currently located at 12 Abba Hillel Silver Street, 11
th
Floor, Ramat Gan, 52506 Israel. Our telephone number is +972-3-753-9888. Our
registered office in Delaware is located at 113 Barksdale Professional Center,
Newark, DE 19711, and our registered agent is Delaware Intercorp. Our fiscal
year end is December 31.
Our
auditors have issued an audit opinion which includes a statement describing
their doubts about whether we will continue as a going concern. Our financial
status creates substantial doubt whether we will continue as a going concern.
Investors should note that we have not generated any revenues to date, we do not
yet have any products available for sale, and we do not have a fully operational
valid working prototype of our proposed product.
As of
November 19, 2010, our company has no cash and will need to raise
additional capital within the next twelve months, even if we are able to sell
the maximum number of shares in this offering. The company has no full time
employees and our two current officers/Directors intend to devote approximately
five hours per week to our business activities.
Our
Direct Public Offering
We are
offering for sale up to a maximum of 2,500,000 shares of our common stock
directly to the public. There is no underwriter involved in this offering. We
are offering the shares without any underwriting discounts or commissions. The
purchase price is $0.03 per share. If all of the shares offered by us are
purchased, the gross proceeds before deducting expenses of the offering will be
up to $75,000. The expenses associated with this offering are estimated to be
$26,500, or approximately 35% of the gross proceeds of $75,000, if all the
shares offered by us are purchased. If all the shares offered by us are not
purchased, then the percentage of offering expenses to gross proceeds will be
higher and a lower amount of proceeds will be realized from this
offering.
5
We
currently do not intend to register or qualify our stock in any state or seek
coverage in one of the recognized securities manuals. Because the
shares of our common stock registered hereunder have not been registered for
resale under the blue sky laws of any state, and we have no current plans to
register or qualify our shares in any state, the holders of such shares and
persons who desire to purchase such shares in any trading market that might
develop in the future should be aware that there may be significant state blue
sky restrictions upon the ability of investors to purchase and sell such
shares. In this regard, each state's statutes and regulations must be
reviewed before engaging in any securities sales activities in a state to
determine what is permitted, or not permitted, in a particular
state. Nevertheless, we do intend to file a Form 8-A promptly after
this registration statement becomes effective, thereby subjecting our stock
registered hereunder to registration under Section 12 of the Securities Exchange
Act of 1934. Furthermore, even in those states that do not require
registration or qualification for the resale of registered securities, such
states may require the filing of notices or place additional conditions on the
availability of exemptions. Accordingly, since many states continue
to restrict the resale of securities that have not been qualified for resale,
investors should consider any potential secondary market for our securities to
be a limited one.
This is
our initial public offering and no public market currently exists for shares of
our common stock. We can offer no assurance that an active trading market will
ever develop for our common stock.
The
offering will terminate 180 days after this registration statement is declared
effective by the Securities and Exchange Commission. However, we may extend the
offering by up to 90 days following the 180 day offering period in our absolute
discretion.
The
Offering
Total
shares of common stock outstanding prior to the offering:
|
3,000,000
shares
|
|
Shares
of common stock being offered by us:
|
2,500,000
shares
|
|
Total
shares of common stock outstanding after the offering:
|
5,500,000
shares
|
|
Gross
proceeds:
|
Gross
proceeds from the sale of up to 2,500,000 shares of our common stock will
be $75,000. Use of proceeds from the sale of our shares will be used as
general operating capital to allow us to develop a fully operational valid
prototype of the device and attempt to bring our product to
market.
|
|
Net
proceeds:
|
Net
proceeds from the sale of up to 2,500,000 shares of our common stock will
be $48,500.
|
|
Risk
Factors:
|
There
are substantial risk factors involved in investing in our Company. For a
discussion of certain factors you should consider before buying shares of
our common stock, see the section entitled "Risk
Factors."
|
This is a
self-underwritten public offering, with no minimum purchase requirement. Shares
will be offered on a best efforts basis and we do not intend to use an
underwriter for this offering. We do not have an arrangement to place the
proceeds from this offering in an escrow, trust, or similar account. Any funds
raised from the offering will be immediately available to us for our immediate
use.
A
Cautionary Note on Forward-Looking Statements
This
prospectus contains forward-looking statements which relate to future events or
our future financial performance. In some cases, you can identify
forward-looking statements by terminology such as “may,” “should,” “expects,”
“plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or
“continue” or the negative of these terms or other comparable terminology. These
statements are only predictions and involve known and unknown risks,
uncertainties and other factors, including the risks in the section entitled
“Risk Factors,” that may cause our or our industry’s actual results, levels of
activity, performance, or achievements to be materially different from any
future results, levels of activity, performance, or achievements expressed or
implied by these forward-looking statements.
While
these forward-looking statements, and any assumptions upon which they are based,
are made in good faith and reflect our current judgment regarding the direction
of our business, actual results will almost always vary, sometimes materially,
from any estimates, predictions, projections, assumptions or other future
performance suggested herein. Except as required by applicable law, including
the securities laws of the United States, we do not intend to update any of the
forward-looking statements to conform these statements to actual
results.
6
Selected
Summary Financial Data
This
table summarizes our operating and balance sheet data as of the periods
indicated. You should read this summary financial data in conjunction with
"Management’s Discussion and Analysis of Financial Condition or Plan of
Operation" and our audited financial statements and notes thereto included
elsewhere in this prospectus.
(February 12,
2010
|
||||
Through
|
||||
September 30,
2010)
|
||||
(Audited)
|
||||
Statement
of Operations:
|
||||
Total
revenues
|
$ | - | ||
Total
operating expenses
|
$ | 11,981 | ||
(Loss)
from operations
|
$ | (11,981 | ) | |
Net
(loss)
|
$ | (11,981 | ) | |
(Loss)
per common share
|
$ | (0.01 | ) | |
Weighted
average number of common shares outstanding - Basic and
diluted
|
3,000,000 |
.
As of
|
||||
September 30,
2010
|
||||
(Audited)
|
||||
Balance
Sheet:
|
||||
Cash
in bank
|
$ | 600 | ||
Deferred
Offering Costs
|
$ | 25,000 | ||
Total
current assets
|
$ | 25,600 | ||
Total
assets
|
$ | 25,600 | ||
Total
current liabilities
|
$ | 44,781 | ||
Total
liabilities
|
$ | 44,781 | ||
Total
stockholders' (deficit)
|
$ | (19,181 | ) | |
Total
liabilities and stockholders' equity
|
$ | 25,600 |
7
RISK
FACTORS
This
investment has a high degree of risk. Before you invest you should carefully
consider the risks and uncertainties described below and the other information
in this prospectus. If any of the following risks actually occurs, our business,
operating results and financial condition could be harmed and the value of our
stock could go down. This means you could lose all or a part of your
investment.
RISKS
RELATING TO OUR COMPANY
1.
|
Our auditors have expressed
substantial doubt about our ability to continue as a going concern, and if
we do not raise at least $30,000 from our offering, we may have to suspend
or cease operations within twelve
months.
|
Our
audited financial statements for the period from February 12, 2010, through
September 30, 2010, were prepared based on the assumption that we will continue
our operations as a going concern. We were incorporated on February 12, 2010,
and do not have a history of earnings. As a result, our independent accountants
in their audit report have expressed substantial doubt about our ability to
continue as a going concern. Continued operations are dependent on our ability
to complete equity or debt financing activities or to generate profitable
operations. Such capital formation activities may not be available or may not be
available on reasonable terms. Our financial statements do not include any
adjustments that may result from the outcome of this uncertainty. We believe
that if we do not raise net proceeds of at least $30,000 from our offering, we
may have to suspend or cease operations within twelve months. Therefore, we may
be unable to continue operations in the future as a going concern. If we cannot
continue as a viable entity, our stockholders may lose some or all of their
investment in the Company.
2.
|
We are a development stage
company with no operating history and may never be able to carry out our
business plan or achieve any revenues or profitability; at this stage of
our business, even with our good faith efforts, potential investors have a
high probability of losing their entire
investment.
|
We are
subject to all of the risks inherent in the establishment of a new business
enterprise. We were established on February 12, 2010, for the purpose of
engaging in the development, manufacture, and sale of a solar photovoltaic
element that absorbs the solar spectrum and, in turn, enables an increase of
solar energy conversion. We have not generated any revenues nor have we realized
a profit from our operations to date, and there is little likelihood that we
will generate any revenues or realize any profits in the short term. Any
profitability in the future from our business will be dependent upon the
successful development of a solar photovoltaic element that absorbs the solar
spectrum and, in turn, enables an increase of solar energy conversion, which
itself is subject to numerous industry-related risk factors as set forth herein.
We may not be able to successfully carry out our business. There can be no
assurance that we will ever achieve any revenues or profitability. Accordingly,
our prospects must be considered in light of the risks, expenses, and
difficulties frequently encountered in establishing a new business in our
industry, and the fact that our Company is a highly speculative venture
involving significant financial risk.
3.
|
We expect to incur operating
losses in the next twelve months because we have no plan to generate
revenues unless and until we successfully develop a valid prototype of our
solar photovoltaic
element.
|
We have
never generated revenues. We intend to engage in the manufacture and sale of a
solar photovoltaic element that absorbs the solar spectrum and, in turn, enables
an increase of solar energy conversion. We own the right to exploit the patent
application for the new invention. However, our solar photovoltaic element is
not currently available for sale. We intend to develop a fully workable
prototype, which can then be used to develop and manufacture the actual product.
We plan to rely on third parties to develop a workable prototype and to work
with us to manufacture the product. We expect to incur operating losses over the
next twelve months because we have no source of revenues unless and until we are
successful in developing a workable prototype of our solar photovoltaic element.
We cannot guarantee that we will ever be successful in developing a workable
prototype or in generating revenues in the future. We recognize that if we are
unable to generate revenues, we will not be able to earn profits or continue
operations. We can provide investors with no assurance that we will generate any
operating revenues or ever achieve profitable operations.
8
4.
|
If we are unable to obtain
funding for development of a valid prototype, we will have to delay
development of our valid prototype and/or change our line of business,
which could result in the loss of all or a part of your
investment.
|
We
intend to use a part of the funds to be raised in this offering to develop and
produce a workable prototype for our solar photovoltaic element. As such, if we
are unable to raise at least $30,000 in net proceeds, we will not have
sufficient funds (a) to fund our administrative and operating expenses, (b) to
fund our proposed research and development program, and (c) to engage a
manufacturing company to work with us to produce a workable prototype. If we
raise only $30,000 in net proceeds, we believe that we will have sufficient
funds available to develop and produce a working prototype; however, we believe
we will need an additional $18,500 in net proceeds in order to engage in
marketing activities and to bring the product to market on a full-scale basis.
Since there are no refunds on the shares sold in this offering, if any, you may
be investing in a company that will not have the funds necessary to commence
operations.
5.
|
We do not have sufficient cash to
fund our operating expenses for the next twelve months, and we will
require additional funds through the sale of our common stock, which
requires favorable market conditions and interest in our activities by
investors. We may not be able to sell our common stock and funding may not
be available for continued
operations.
|
Currently,
without taking into consideration any funds to be raised through this offering,
we do not have sufficient cash on hand to fund our administrative expenses and
operating expenses nor our proposed research and development program for the
next twelve months, although our Directors have committed to loan us in the
aggregate up to $10,000 to help cover our costs to comply with the federal
securities laws over the next twelve months in the event that sufficient funds
are not raised in this offering to cover such costs. In addition,
even if we raise $48,500 in net proceeds from this offering, we will require
substantial additional capital following the development and construction of a
valid workable prototype for our solar photovoltaic element to arrange for the
manufacturing and sale of our product. Because we do not
expect to have any cash flow from operations within the next twelve months, we
will need to raise additional capital, which may be in the form of loans from
current stockholders and/or from public and private equity offerings. Our
ability to access capital will depend on our success in implementing our
business plan. It will also depend upon the status of the capital markets at the
time such capital is sought. Should sufficient capital not be available, the
implementation of our business plan could be delayed, and, accordingly, the
implementation of our business strategy would be adversely affected. If we are
unable to raise additional funds in the future, we may have to cease all
substantive operations. In such event, investors would likely not obtain a
profitable return on their investment or a return of their investment at
all.
6.
|
We have no track record that
would provide a basis for assessing our ability to conduct successful
business activities. We may not be successful in carrying out our business
objectives.
|
The
revenue and income potential of our proposed business and operations are
unproven and the lack of operating history makes it difficult to evaluate the
future prospects of our business. There is nothing at this time on which to base
an assumption that our business operations will prove to be successful or that
we will ever be able to operate profitably. Accordingly, we have no track record
of successful business activities, strategic decision-making by management,
fund-raising ability, and other factors that would allow an investor to assess
the likelihood that we will be successful in developing a valid workable
prototype of our product and thereafter making it available for sale. There is a
substantial risk that we will not be successful in implementing our business
plan, or, if initially successful, in thereafter generating any operating
revenues or in achieving profitable operations.
7.
|
Because we are not making
provisions for a refund to investors, you may lose your entire
investment.
|
Even
though our business plan is based upon the complete subscription of the shares
offered through this offering, the offering makes no provisions for refund to an
investor. We will utilize all amounts received from newly issued common stock
purchased through this offering even if the amount obtained through this
offering is not sufficient to enable us to go forward with our planned
operations. Any funds received from the sale of newly issued stock will be
placed into our corporate bank account. We do not intend to escrow any funds
received through this offering. Once funds are received as the result of a
completed sale of common stock being issued by us, those funds will be placed
into our corporate bank account and may be used at the discretion of
management.
9
8.
|
As a
development stage company, we may experience substantial cost overruns in
developing our prototype and creating a strategy for future stages, such
as manufacturing and marketing our product, and we may not have sufficient
capital to successfully complete the development and marketing of our
product.
|
We may
experience substantial cost overruns in manufacturing and marketing our
prototype and then the product itself, and we may not have sufficient capital to
successfully complete our project. We may not be able to manufacture or market
our product because of industry conditions, general economic conditions, and/or
competition from other manufacturers and distributors. In addition, the
commercial success of any product is often dependent upon factors beyond the
control of the company attempting to market the product, including, but not
limited to, market acceptance of the product, governmental restrictions, and
whether or not third parties promote the products through prominent marketing
channels and/or other methods of promotion. Even if we do succeed in raising the
capital to develop a prototype and begin manufacturing our proposed product, we
cannot ensure that the cost for this device will be found to be warranted and
reasonable by potential purchasers, and therefore we cannot ensure that the
product, if developed, will actually find popularity and
acceptance.
9.
|
We plan to
rely on third parties to develop a prototype and to manufacture our
proposed product.
|
We plan
to rely on third parties to develop a prototype and to work with us to
manufacture the product. If we are unable to enter into manufacturing or
distribution agreements, or if our manufacturing and distribution agreements are
not satisfactory, we may not be able to develop or commercialize our product as
planned. In addition, we may not be able to contract with third parties to
manufacture our product in an economical manner. Furthermore, third-party
manufacturers may not adequately perform their obligations, which may impair our
competitive position. If a manufacturer fails to perform, we could experience
significant time delays or we may be unable to commercialize or continue to
market our adapters, which would result in losses of sales and
goodwill.
10.
|
We are a small company with
limited resources and we may not be able to compete effectively and
increase market share.
|
Solar
photovoltaic elements are part of an industry that is highly regulated and
competitive, and although we believe our technology offers a distinct design and
construction method, we cannot guarantee that these distinct features are enough
to effectively capture a significant enough market share to successfully launch
and sustain our product. Although we are not aware of anyone in the
industry that has successfully brought a product like ours to market,
nonetheless, our current and potential competitors have longer operating
histories, significantly greater resources and name recognition, and a larger
base of distributors and customers than we have. As a result, these competitors
have greater name credibility with our potential distributors and customers. Our
competitors also may be able to adopt more aggressive pricing policies and
devote greater resources to the development, promotion, and sale of their
products and services than we can to ours. To be competitive, we must continue
to invest significant resources in research and development, sales and
marketing, and customer support. We may not have sufficient resources to make
these investments or to develop the technological advances necessary to be
competitive, which in turn could cause our business to suffer and restrict our
profitability potential.
11.
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Our success depends on third
party distribution channels.
|
We intend
to sell our product ourselves and through a series of resellers and
distributors. Our future revenue growth will depend in large part on sales of
our product through these relationships. We may not be successful in developing
distribution relationships. Entities that distribute our product may compete
with us. In addition, these distributors may not dedicate sufficient resources
or give sufficient priority to selling our product. Our failure to develop
distribution channels, the loss of a distribution relationship, or a decline in
the efforts of a material reseller or distributor could prevent us from
generating sufficient revenues to become profitable.
10
12.
|
Changing consumer preferences may
negatively impact our
business.
|
The
Company's success is dependent upon the ongoing need for, and appeal of, solar
photovoltaic elements. Consumer preferences with respect to such devices are
continuously changing and are difficult to predict. Not all areas are suitable
for this technology to gain widespread acceptance; not all consumers are
prepared to change or add onto their current power sources. As a result of
changing consumer preferences, we cannot assure you that our product will
achieve customer acceptance, or that it will continue to be popular with
consumers for any significant period of time. Our success is dependent upon our
ability to develop, introduce, and gain customer acceptance, and that customers
be willing to continue on a long term basis to adapt their standard power
sources to include utilization of our solar photovoltaic element. The failure of
our product to achieve and sustain market acceptance and to produce acceptable
margins could have a material adverse effect on our financial condition and
results of operations.
13.
|
Because our
Directors and officers have no experience in running a company that
sells solar
photovoltaic element devices, they
may not be able to successfully operate such a business, which could cause
you to lose your investment.
|
We are a
development stage company and we intend to manufacture, market, and sell solar
photovoltaic elements. Sergei Rogov, Vigars Kaktinieks, and Jonathan Berezovsky,
our current Directors and officers, have effective control over all decisions
regarding both policy and operations of our Company with no oversight from other
management. Our success is contingent upon the ability of these individuals to
make appropriate business decisions in these areas. However, our Directors and
officers have no experience in operating a company that sells solar photovoltaic
elements. It is possible that this lack of relevant operational experience could
prevent us from becoming a profitable business and hinder an investor from
obtaining a return on his investment in us.
14.
|
Because Sergei Rogov, Vigars
Kaktinieks, and Jonathan Berezovsky, have other outside business
activities and will only be devoting up to 10% of their time to our
operations, our operations may be sporadic, which may result in periodic
interruptions or suspensions of our business
activities.
|
Our
Directors and officers are only engaged in our business activities on a
part-time basis. This could cause the officers a conflict of interest between
the amount of time they devote to our business activities and the amount of time
required to be devoted to their other activities. Each of Sergei Rogov, Vigars
Kaktinieks, and Jonathan Berezovsky, our current Directors and officers, intends
to devote only approximately 5 hours per week to our business activities. After
completion of this offering, we intend to increase our business activities in
terms of development, marketing and sales. This increase in business activities
may require that either our Directors or our officers engage in our business
activities on a full-time basis or that we hire additional employees; however,
at this time, we do not have sufficient funds to pursue either
option.
15.
|
Our Directors and officers own
78% of the outstanding shares of our common stock, and may be able to
influence control of the company or decision making by management of the
Company.
|
Our
Directors and officers presently own 78% of our outstanding common stock. If all
of the 2,500,000 shares of our common stock being offered hereby are sold, the
shares held by our Directors and officers will constitute approximately 42.55%
of our outstanding common stock.
16.
|
If our intellectual property
protection is inadequate, competitors may gain access to our technology
and undermine our competitive
position.
|
We
regard our current and future intellectual property as important to our success,
and we rely on patent, copyright and trade secrecy law to protect our
proprietary rights. Despite our precautions, unauthorized third parties may copy
certain portions of our product or reverse engineer or obtain and use
information that we regard as proprietary. A patent application was filed at the
Israeli Patent Office on April 23, 2009 under the name “Solar Element and Method
of Manufacturing the Same” with regard to the technology underlying our proposed
product. The patent application is currently pending. We
do not know if a patent will be issued with the scope of the claims set forth in
this patent application, if at all, or whether any patent that may be granted
will be challenged or invalidated. Thus, we cannot assure you that our
intellectual property rights can be successfully asserted in the future or that
they will not be invalidated, circumvented or challenged. In addition, the laws
of some foreign countries do not protect proprietary rights to the same extent
as do the laws of Israel. Our means of protecting our proprietary rights in the
United States or abroad may not be adequate and competitors may independently
develop a similar technology. Any failure to protect our proprietary information
and any successful intellectual property challenges or infringement proceedings
against us could have a material adverse affect on our business, financial
condition, or results of operations.
11
17.
|
We may be subject to intellectual
property litigation, such as patent infringement claims, which could
adversely affect our
business.
|
Our
success will also depend in part on our ability to develop a commercially viable
product without infringing the proprietary rights of others. Although we have
not been notified of any infringement claims, other patents could exist or could
be filed which would prohibit or limit our ability to develop and market our
adapters in the future. In the event of an intellectual property dispute, we may
be forced to litigate. Intellectual property litigation would divert
management's attention from developing our product and would force us to incur
substantial costs regardless of whether or not we are successful. An adverse
outcome could subject us to significant liabilities to third parties, and force
us to cease operations.
18.
|
Our officers and Directors are
located in Israel and our assets may also be held from time to time
outside of the United
States.
|
Since
all of our officers and Directors are located in Israel, any attempt to enforce
liabilities upon such individuals under the U.S. securities and bankruptcy laws
may be difficult. In accordance with the Israeli Law on Enforcement
of Foreign Judgments, 5718-1958, and subject to certain time limitations (the
application to enforce the judgment must be made within five years of the date
of judgment or such other period as might be agreed between Israel and the
United States), an Israeli court has the discretion to declare a foreign civil
judgment enforceable if it finds that:
|
•
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the judgment was rendered by a
court which was, according to the laws of the State in which the court is
located, competent to render the
judgment;
|
|
•
|
the judgment may no longer be
appealed;
|
|
•
|
the tenor the judgment is not
repugnant to the laws of the State of Israel or to public policy in
Israel; and
|
|
•
|
the judgment is executory in the
State in which it was given.
|
It is
unlikely that an Israeli court would deem the tenor of a judgment of a court of
the United States in relation to federal securities law to be repugnant to the
laws of the State of Israel or to public policy in Israel. However,
given that the decision by Israeli courts to enforce foreign judgments is
discretionary, such a decision cannot be guaranteed.
An
Israeli court will not declare a foreign judgment enforceable if:
|
•
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the judgment was obtained by
fraud;
|
|
•
|
there is a finding of lack of due
process;
|
|
•
|
the
judgment is in conflict with another judgment that was given in the same
matter between the same parties and that is still
valid;
|
|
•
|
at the time the action was
instituted in the foreign court, a suit in the same matter and between the
same parties was pending before a court or tribunal in Israel;
or
|
|
•
|
the
judgment was rendered by a court not competent to render it according to
the laws of private international law in Israel. It should be
noted that Israeli courts deem U.S. courts competent to render a judgments
under federal securities law according to the laws of private
international law in Israel
|
Furthermore,
anyone bringing a claim against the Company or its directors in Israel will need
to show that the Israeli court is not a forum non conveniens, i.e.
inappropriate venue to hear such a claim. An Israeli court, in
considering whether it is a forum non conveniens, will
consider which legal forum is most connected to the dispute, the reasonable
expectations of the parties with respect to the place of jurisdiction of the
dispute, and public considerations, such as which forum has a true interest in
dealing with the dispute. If the Israeli court, having ruled that it
is an appropriate forum to hear the claim, decides that U.S. law has the
strongest linkage to the parties and other circumstances of the case, it will
apply U.S. law in adjudicating the claim. In that case, the content of
applicable U.S. law must be proven as a fact, which can be a time-consuming and
costly process.
Our
assets may also be held from time to time outside of the United
States. Currently, none of our tangible assets are held outside of
the United States. However, in the future, we expect our prototype, when
manufactured, to be held outside of the United States. Since our Directors
and executive officers do not reside in the United States, it may be difficult
for courts in the United States to obtain jurisdiction over our foreign assets
or persons, and as a result, it may be difficult or impossible for you to
enforce judgments rendered against us or our Directors or executive officers in
United States courts. Thus, investing in us may pose a greater risk
because should any situation arise in the future in which you would have a cause
of action against these persons or against us, you may face potential
difficulties in bringing lawsuits or, if successful, in collecting judgments
against these persons or against the Company.
12
19.
|
Conditions
in Israel, where our officers and Director and our corporate offices are
located, may adversely affect our
operations.
|
Since
the establishment of the State of Israel in 1948, a number of armed conflicts
have taken place between Israel and its Arab neighbors, and the continued state
of hostility, varying in degree and intensity, has led to security and economic
problems for Israel. Since October 2000, there has been a significant
increase in violence, primarily in the West Bank and the Gaza Strip. As a
result, negotiations between Israel and representatives of the Palestinian
Authority have been sporadic and have failed to result in peace. The
establishment in 2006 of a government in the Gaza territory by representatives
of the Hamas militant group has created additional unrest and uncertainty in the
region. At the end of December 2008, Israel engaged in an armed conflict with
Hamas lasting for over three weeks, which involved additional missile strikes
from the Gaza Strip into Israel and disrupted most day-to-day civilian activity
in the proximity of the border with the Gaza Strip. We could be
adversely affected by hostilities involving Israel, the interruption or
curtailment of trade between Israel and its trading partners, or a significant
downturn in the economic or financial condition of Israel. In
addition, the sale of products manufactured in Israel may be adversely affected
in certain countries by restrictive laws, policies or practices directed toward
Israel or companies having operations in Israel. In addition, our
Directors and officers are subject to being called upon to perform military
service in Israel, and their absence may have an adverse effect upon our
operations. Generally, unless exempt, male adult citizens of Israel under the
age of 41 are obligated to perform up to 36 days of military reserve duty
annually. Additionally, all such citizens are subject to being called to active
duty at any time under emergency circumstances.
20.
|
If and when we sell our
products, we may be liable for product liability claims and we presently
do not maintain product liability
insurance.
|
The solar
photovoltaic element that we are developing may expose us to potential liability
from personal injury or property damage claims by end-users of the product. We
currently have no product liability insurance to protect us against the risk
that in the future a product liability claim or product recall could materially
and adversely affect our business. The inability to obtain sufficient insurance
coverage at an acceptable cost or otherwise to protect against potential product
liability claims could prevent or inhibit the commercialization of our product.
We cannot assure you that when we commence distribution of our product that we
will be able to obtain or maintain adequate coverage on acceptable terms, or
that such insurance will provide adequate coverage against all potential claims.
Moreover, even if we maintain adequate insurance, any successful claim could
materially and adversely affect our reputation and prospects, and divert
management’s time and attention. If we are sued for any injury allegedly caused
by our future products our liability could exceed our total assets and our
ability to pay the liability.
Risks
Relating to our Common Stock
21.
|
NASD sales
practice requirements may limit a stockholder’s ability to buy and sell
our stock.
|
In
addition to the "penny stock" rules described below, the NASD has adopted rules
that require that in recommending an investment to a customer, a broker-dealer
must have reasonable grounds for believing that the investment is suitable for
that customer. Prior to recommending speculative low priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to
obtain information about the customer's financial status, tax status, investment
objectives and other information. Under interpretations of these rules, the NASD
believes that there is a high probability that speculative low priced securities
will not be suitable for at least some customers. The NASD requirements make it
more difficult for broker-dealers to recommend that their customers buy our
common stock, which may have the effect of reducing the level of trading
activity in our common stock. As a result, fewer broker-dealers may be willing
to make a market in our common stock, reducing a stockholder's ability to resell
shares of our common stock.
22.
|
We may in the future issue
additional shares of our common stock which would reduce investors’
ownership interests in the Company and which may dilute our share value.
We do not need stockholder approval to issue additional
shares.
|
Our
certificate of incorporation authorizes the issuance of 500,000,000 shares of
common stock, par value $0.0001 per share. The future issuance of all or part of
our remaining authorized common stock may result in substantial dilution in the
percentage of our common stock held by our then existing stockholders. We may
value any common stock issued in the future on an arbitrary basis. The issuance
of common stock for future services or acquisitions or other corporate actions
may have the effect of diluting the value of the shares held by our investors,
and might have an adverse effect on any trading market for our common
stock.
23.
|
Our common stock is subject to
the "penny stock" rules of the SEC and the trading market in our
securities is limited, which makes transactions in our stock cumbersome
and may reduce the value of an investment in our
stock.
|
If a
trading market does develop for our stock, it is likely we will be subject to
the regulations applicable to "Penny Stock," the regulations of the SEC
promulgated under the Exchange Act that require additional disclosure relating
to the market for penny stocks in connection with trades in any stock defined as
a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9
which establishes the definition of a "penny stock," for the purposes relevant
to us, as any non-NASDAQ equity security that has a market price of less than
$5.00 per share or with an exercise price of less than $5.00 per share, subject
to certain exceptions. For any transaction involving a penny stock, unless
exempt, the rules require: (i) that a broker or dealer approve a person's
account for transactions in penny stocks; and (ii) the broker or dealer receive
from the investor a written agreement to the transaction, setting forth the
identity and quantity of the penny stock to be purchased. In order to approve a
person's account for transactions in penny stocks, the broker or dealer must:
(i) obtain financial information and investment experience objectives of the
person; and (ii) make a reasonable determination that the transactions in penny
stocks are suitable for that person and the person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks.
13
The
broker or dealer must also deliver, prior to any transaction in a penny stock, a
disclosure schedule prescribed by the SEC relating to the penny stock market,
which, in highlight form: (i) sets forth the basis on which the broker or dealer
made the suitability determination; and (ii) that the broker or dealer received
a signed, written agreement from the investor prior to the
transaction.
Generally,
brokers may be less willing to execute transactions in securities subject to the
"penny stock" rules. This may make it more difficult for investors to dispose of
our common stock and cause a decline in the market value of our
stock.
Disclosure
also has to be made about the risks of investing in penny stocks in both public
offerings and in secondary trading and about the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks.
These
disclosure requirements may have the effect of reducing the level of trading
activity, if any, in the secondary market for a stock that becomes subject to
the penny stock rules. Consequently, these penny stock rules may affect the
ability of broker-dealers to trade our securities. We believe that the penny
stock rules discourage market investor interest in and limit the marketability
of our common stock.
24.
|
We have not
paid dividends in the past and do not expect to pay dividends in the
future. Any return on investment may be limited to the value of our common
stock.
|
Because
we do not intend to pay any cash dividends on our shares of common stock, our
stockholders will not be able to receive a return on their shares unless they
sell them.
We intend
to retain any future earnings to finance the development and expansion of our
business. We do not anticipate paying any cash dividends on our common stock in
the foreseeable future. Unless we pay dividends, our stockholders will not be
able to receive a return on their shares unless they sell them at a price higher
than that which they initially paid for such shares.
25.
|
The offering price of our
common stock could be higher than the market value, causing investors to
sustain a loss of their
investment.
|
The price
of our common stock in this offering has not been determined by any independent
financial evaluation, market mechanism or by our auditors, and is therefore, to
a large extent, arbitrary. Our audit firm has not reviewed management's
valuation, and therefore expresses no opinion as to the fairness of the offering
price as determined by our management. As a result, the price of the common
stock in this offering may not reflect the value perceived by the market. There
can be no assurance that the shares offered hereby are worth the price for which
they are offered and investors may therefore lose a portion or all of their
investment.
26.
|
There is no public market for
our stock and a public market may not be obtained or be liquid and
therefore investors may not be able to sell their
shares.
|
There is
no established public market for our common stock being offered under this
prospectus. While we intend to apply for quotation of our common stock on the
Over-The-Counter (OTC) Bulletin Board system, we have not yet engaged a market
maker for the purposes of submitting such application, and there is no assurance
that we will qualify for quotation on the OTC Bulletin Board. Therefore,
purchasers of our common stock in this offering may be unable to sell their
shares on any public trading market or elsewhere.
14
27.
|
State
securities laws may limit secondary trading, which may restrict the states
in which you may sell the
shares offered by this prospectus.
|
If you
purchase shares of our common stock sold in this offering, you may not be able
to resell the shares in any state unless and until the shares of our common
stock are qualified for secondary trading under the applicable securities laws
of such state or there is confirmation that an exemption, such as listing in
certain recognized securities manuals, is available for secondary trading in
such state. Thirty-three states have what is commonly referred to as
a “manual exemption” for secondary trading of securities such as those to be
resold by selling stockholders under this registration statement. In
these states, so long as the issuer obtains and maintains a listing in Mergent,
Inc. or Standard and Poor’s Corporate Manual, secondary trading of common stock
can occur without any filing, review or approval by state regulatory authorities
in these states. These states are: Alaska, Arizona,
Arkansas, Colorado, Connecticut, District of Columbia, Florida, Hawaii, Idaho,
Indiana, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Mississippi,
Missouri, Nebraska, New Jersey, New Mexico, North Carolina, North Dakota, Ohio,
Oklahoma, Oregon, Rhode Island, South Carolina, Texas, Utah, Washington, West
Virginia, and Wyoming. Ten states provide for an exemption for
non-issuer transactions in outstanding securities effected through a registered
broker-dealer when the securities have been subject to registration under
Section 12 of the Securities Exchange Act of 1934 for at least 90 days (180 days
in Alabama). These states are: Alabama, Colorado, District
of Columbia, Illinois, Kansas, Missouri, New Jersey, New Mexico, Oklahoma, and
Rhode Island.
We currently do not intend to register
or qualify our stock in any state or seek coverage in one of the
recognized securities manuals. Because the shares of our common stock
registered hereunder have not been registered for resale under the blue sky laws
of any state, and we have no current plans to register or qualify our shares in
any state, the holders of such shares and persons who desire to purchase such
shares in any trading market that might develop in the future should be aware
that there may be significant state blue sky restrictions upon the ability of
investors to purchase and sell such shares. In this regard, each
state's statutes and regulations must be reviewed before engaging in any
securities sales activities in a state to determine what is permitted, or not
permitted, in a particular state. Nevertheless, we do intend to file
a Form 8-A promptly after this registration statement becomes effective, thereby
subjecting our stock registered hereunder to registration under Section 12 of
the Securities Exchange Act of 1934. Furthermore, even in those
states that do not require registration or qualification for the resale of
registered securities, such states may require the filing of notices or place
additional conditions on the availability of exemptions. Accordingly,
since many states continue to restrict the resale of securities that have not
been qualified for resale, investors should consider any potential secondary
market for our securities to be a limited one..
28.
|
Efforts to comply with
recently enacted changes in securities laws and regulations will increase
our costs and require additional management resources, and we still may
fail to comply.
|
As
directed by Section 404 of the Sarbanes-Oxley Act of 2002, the SEC has adopted
rules requiring public companies to include a report of management on their
internal controls over financial reporting in their annual reports on Form 10-K.
In addition, the public accounting firm auditing a public company’s financial
statements must attest to and report on management’s assessment of the
effectiveness of its internal controls over financial reporting. These
requirements are not presently applicable to us, but we will become subject to
these requirements subsequent to the effective date of this prospectus. If and
when these regulations become applicable to us, and if we are unable to conclude
that we have effective internal controls over financial reporting or if our
independent auditors are unable to provide us with an unqualified report as to
the effectiveness of our internal controls over financial reporting as required
by Section 404 of the Sarbanes-Oxley Act of 2002, investors could lose
confidence in the reliability of our financial statements, which could result in
a decrease in the value of our securities. We have not yet begun a formal
process to evaluate our internal controls over financial reporting. Given the
status of our efforts, coupled with the fact that guidance from regulatory
authorities in the area of internal controls continues to evolve, substantial
uncertainty exists regarding our ability to comply by applicable
deadlines.
29.
|
The
amount of our authorized but unissued common equity could discourage a
takeover that stockholders may consider
favorable.
|
Under
our Certificate of Incorporation, the Company is authorized to issue 500,000,000
shares of stock. There are 3,000,000 shares of common stock
outstanding prior to this offering. A further 2,500,000 are being
offered in this offering, such that following the offering there will be
5,500,000 shares of common stock outstanding. Our board of directors
may issue, without stockholder approval, shares of undesignated preferred
stock. In light of the amount of our authorized but unissued share of
common stock, the Board’s ability to authorize undesignated preferred stock
makes it possible for our Board of Directors to issue preferred stock with
voting or other rights or preferences that could impede the success of any
attempt to acquire us. It is possible, however, that you would want a
takeover attempt to succeed because, for example, a potential acquiror may offer
a premium over the then-prevailing price of our common stock
30.
|
You will experience an
immediate and substantial dilution of the net tangible book value of the
common shares you purchase in this
offering.
|
The
initial public offering price per share of our common stock is substantially
higher than our net tangible book value per common share immediately after this
offering. For this purpose, the net tangible book value per share represents the
total amount of the Company’s tangible assets, less the total amount of
liabilities, divided by the total number of shares outstanding, and dilution is
determined by subtracting the net tangible book value per share after the
offering from the initial public offering price per share. As a
result, you may pay a price per share that substantially exceeds the book value
of our assets after subtracting our liabilities. Investors who
purchase common stock in this offering will be diluted by $0.0247 per share
after giving effect to the sale of shares of common stock in this offering at an
assumed initial public offering price of $0.03 per share. Further, we
may need to raise additional funds in the future to finance our
operations. If we obtain capital in future offerings on a per-share
basis that is less than the initial public offering price per share, the value
of the price per share of your common stock will likely be
reduced. In addition, if we issue additional equity securities in a
future offering and you do not participate in such offering, there will
effectively be dilution in your percentage ownership interest in the
Company.
31.
|
Stockholders
may have limited access to information because we are not yet a reporting
issuer and may not become one.
|
While
we intend to file a Form 8-A promptly after this registration statement becomes
effective and thereby become a “reporting issuer” under Section 12 of the
Securities Exchange Act of 1934, we are not currently a reporting issuer and
upon this registration statement becoming effective we will be required to
comply only with the limited reporting obligations required by Section 13(a) of
the Exchange Act. These reporting obligations may be automatically
suspended under Section 15(d) of the Exchange Act if on the first day of any
fiscal year other than the fiscal year in which our registration statement
became effective, there are fewer than 300
shareholders. If we do not become a reporting issuer and instead make
a decision to suspend our public reporting, we will no longer be obligated to
file periodic reports with SEC and your access to our business information will
be restricted. In addition, if we do not become a reporting issuer,
we will not be required to furnish proxy statements to security holders, and our
directors, officers and principal beneficial owners will not be required to
report their beneficial ownership of securities to the SEC pursuant to Section
16 of the Exchange Act
15
Use
of Proceeds
The
net proceeds to us from the sale of up to 2,500,000 shares offered at a public
offering price of $0.03 per share will vary depending upon the total number of
shares sold. Regardless of the number of shares sold, we expect to incur
offering expenses estimated at approximately $26,500, comprising $25,000 for
legal and accounting costs (incurred), and $1,500 of other costs in connection
with this offering (estimated transfer agent fees). The table below shows the
net proceeds from this offering that we expect to receive for scenarios where we
sell various amounts of the shares. Since we are making this offering without
any minimum requirement, there is no guarantee that we will be successful at
selling any of the securities being offered in this prospectus. Accordingly, we
may sell less than all of the securities offered hereby, which may significantly
reduce the actual amount of proceeds we will raise in this
offering.
Percent
of Net Proceeds Received
20%
|
40%
|
60%
|
80%
|
100%
|
||||||||||||||||
Shares
Sold
|
500,000 | 1,000,000 | 1,500,000 | 2,000,000 | 2,500,000 | |||||||||||||||
Gross
Proceeds
|
15,000 | $ | 30,000 | $ | 45,000 | $ | 60,000 | $ | 75,000 | |||||||||||
Less
Offering Expenses
|
(26,500 | ) | $ | (26,500 | ) | $ | (26,500 | ) | $ | (26,500 | ) | $ | (26,500 | ) | ||||||
Net
Offering Proceeds
|
(11,500 | ) | $ | 3,500 | $ | 18,500 | $ | 33,500 | $ | 48,500 |
We
expect to use any proceeds received from the offering for general corporate
purposes, including the working capital needs set forth in our plan of operation
as described below in the section entitled “Plan of Operation.”
Our
offering expenses are comprised of legal and accounting expenses and transfer
agent fees. Our officers and Directors will not receive any compensation for
their efforts in selling our shares.
We do
not intend to use the proceeds to acquire assets or finance the acquisition of
other businesses, nor to repay loans, including the unsecured , non-interest
bearing loans from our Directors, nor for salaries or other payments to our
officers or Directors. At present, no material changes are
contemplated. Should there be any material changes in the projected use of
proceeds in connection with this offering, we will issue an amended prospectus
reflecting the new uses.
In all
instances, after the effectiveness of this registration statement, the Company
will need some amount of working capital to maintain its general existence and
comply with its public reporting obligations. In addition to changing
allocations because of the amount of proceeds received, we may change the use of
proceeds because of required changes in our business plan. Investors should
understand that we have wide discretion over the use of proceeds. Therefore,
management decisions may not be in line with the initial objectives of investors
who will have little ability to influence these decisions.
Determination
of Offering Price
Our
common stock is presently not traded on any market or securities exchange and we
have not applied for listing or quotation on any public market. Our Company will
be offering the shares of common stock being covered by this prospectus at a
price of $0.03 per share. Such offering price does not have any relationship to
any established criteria of value, such as book value or earnings per share.
Because we have no significant operating history and have not generated any
revenues to date, the price of our common stock is not based on past earnings,
nor is the price of our common stock indicative of the current market value of
the assets owned by us. No valuation or appraisal has been prepared for our
business and potential business expansion.
16
The
offering price was determined arbitrarily based on a determination by the Board
of Directors of the price at which they believe investors would be willing to
purchase the shares. Additional factors that were included in determining the
offering price are the lack of liquidity resulting from the fact that there is
no present market for our stock and the high level of risk considering our lack
of profitable operating history.
Dilution
Purchasers
of our securities in this offering will experience immediate and substantial
dilution in the net tangible book value of their common stock from the initial
public offering price. The historical net tangible book value as of September
30, 2010 was $29,319, or $0.0053 per share. Historical net tangible book value
per share of common stock is equal to our total tangible assets less total
liabilities, divided by the number of shares of common stock outstanding as of
September 30, 2010, as adjusted to give effect to the receipt of net proceeds
from the sale of 2,500,000 shares of common stock for $0.03, which represents
net proceeds after deducting estimated offering expenses of $26,500. This
represents an immediate increase of $0.0052 per share to existing stockholders
and an immediate and substantial dilution of $0.0247 per share, or approximately
82%, to new investors purchasing our securities in this offering. Dilution in
net tangible book value per share represents the difference between the amount
per share paid by purchasers of shares of our common stock in this offering and
the net tangible book value per share of our common stock immediately following
this offering.
The
following tables sets forth as of September 30, 2010, the number of shares of
common stock purchased from us and the total consideration paid by our existing
stockholders and by new investors in this offering if new investors purchase
100%, 80%, 60%, 40% and 20% of the offering, before deducting offering expenses
payable by us, assuming a purchase price in this offering of $0.03 per share of
common stock.
100%
|
Shares
|
|||||||||||
Number
|
Percent
|
Contribution
($)
|
||||||||||
Existing
Stockholders
|
3,000,000 | 55 | % | $ | 300 | |||||||
New
Investors
|
2,500,000 | 45 | % | $ | 75,000 | |||||||
Total
|
5,500,000 | 100 | % | $ | 75,300 |
80%
|
Shares
|
|||||||||||
Number
|
Percent
|
Contribution
($)
|
||||||||||
Existing
Stockholders
|
3,000,000 | 60 | % | $ | 300 | |||||||
New
Investors
|
2,000,000 | 40 | % | $ | 60,000 | |||||||
Total
|
5,000,000 | 100 | % | $ | 60,300 |
60%
|
Shares
|
|||||||||||
Number
|
Percent
|
Contribution
($)
|
||||||||||
Existing
Stockholders
|
3,000,000 | 67 | % | $ | 300 | |||||||
New
Investors
|
1,500,000 | 33 | % | $ | 45,000 | |||||||
Total
|
4,500,000 | 100 | % | $ | 45,300 |
40%
|
Shares
|
|||||||||||
Number
|
Percent
|
Contribution
($)
|
||||||||||
Existing
Stockholders
|
3,000,000 | 75 | % | $ | 300 | |||||||
New
Investors
|
1,000,000 | 25 | % | $ | 30,000 | |||||||
Total
|
4,000,000 | 100 | % | $ | 30,300 |
20%
|
Shares
|
|||||||||||
Number
|
Percent
|
Contribution
($)
|
||||||||||
Existing
Stockholders
|
3,000,000 | 85.71 | % | $ | 300 | |||||||
New
Investors
|
500,000 | 14.29 | % | $ | 15,000 | |||||||
Total
|
3,500,000 | 100 | % | $ | 15,300 |
17
Our
Business
Background
and Business Overview
We
were incorporated in Delaware on February 12, 2010, and we are a development
stage company. We intend to engage in the development, manufacture, and
distribution of a solar photovoltaic element (also known as a photovoltaic cell)
based on certain proprietary technology that is expected to enable an
increase in solar energy conversion and thus provide energy at a lower
cost. A photovoltaic element is a device that converts light into
electrical flow.
We
plan to develop a working prototype of our invention for testing and
evaluation. We then plan to develop a manufacturing process for
producing the photovoltaic elements for sale to solar panel
producers. We intend either to manufacture and distribute the device
ourselves, or to license the manufacturing and distribution rights to a third
party.
Structure
of Solarflex PV Element
Our
proposed solar photovoltaic element will be comprised of five layers attached to
a substrate. The top and bottom layers will be
conductive. The three middle layers will be semi-conductive and
consist of a positive layer (P-layer), an intrinsic layer (i-layer), and a
negative layer (N-layer). The three semi-conductive layers will be
made of silicon. The P-layer and the N-layer will be
either a doped layer or a heterojunction metal oxide
layer. The i-layer will be a graded band-gap layer.
A
doped layer is a layer of material to which impurities have purposely been
introduced (mechanically, electrically, or optically) in order to change the way
the material reacts or performs in certain conditions. It is used in
photovoltaic cells to absorb light. A heterojunction metal
oxide layer is a layer of vanadium that changes its properties from conductor to
semiconductor at 67°C. The graded band-gap layer is a specially grown
thin film made mainly of silicon with a variable band-gap. The device
will be manufactured on the basis of at least one vacuum
chamber.
The
product will be based on our detailed patent application (Israel Patent
Application Number 198369), which includes both the design and manufacturing
details of the device. We believe that our solar photovoltaic (photoelectric)
element, once manufactured, will provide the performance of a solar element We
have not generated any revenues to date and our operations have been limited to
organizational, start-up, and capital formation activities, as well as execution
of the Patent Sale Agreement. We currently have no employees other than our
officers, who are also our Directors and work only part time.
18
We have
never declared bankruptcy, have never been in receivership, and have never been
involved in any legal action or proceedings. We have not made any significant
purchase or sale of assets, except for the purchase of all right, title, and
interest in the Patent Application and the future rights in relation to the
Patent Application. The Company has not been involved in any mergers,
acquisitions or consolidations. We are not a blank check registrant as that term
is defined in Rule 419(a)(2) of Regulation C of the Securities Act of 1933,
because we have a specific business plan and purpose. Neither Solarflex Corp.
nor its officers, Directors, promoters or affiliates, has had preliminary
contact or discussions with, nor do we have any present plans, proposals,
arrangements or understandings with any representatives of the owners of any
business or company regarding the possibility of an acquisition or
merger.
Our
principal office is located c/o Sergei Rogov, 12 Abba Hillel Silver Street, 11
th
Floor, Ramat Gan 52506, Israel. Our telephone number is
+972-3-753-9888.
Recent
Corporate Developments
A
Patent Sale Agreement was signed with P.T Holding, represented by its owner Dr.
Boris Sigalov, on March 10, 2010, whereby P.T. Holding transferred to Solarflex
all of P.T. Holding’s right, title and interest in and to the Patent Application
(Israel Patent Application Number 198369) for a solar photovoltaic element that
absorbs the solar spectrum and that is expected to enable an increase in solar
energy conversion. The Patent Application includes detailed
manufacturing instructions for developing and manufacturing this device. P.T.
Holding transferred the Patent Application to us in exchange for our agreeing to
pay P.T. Holding a sum equal to 10% of the royalties that we will receive in
relation to the Patent Application. The invention details the design and
manufacturing method for a solar photovoltaic element comprising a substrate, a
first conductive layer, at least one doped layer or at least one heterojunction
metal oxide layer, a graded band gap layer and a second conductive layer. The
solar photovoltaic element is formed by a combination of layers detailed in a
specific sequence.
The
Market
With the
exception of the year 2000, since 1999 there has been a steady increase in the
number of photovoltaic shipments in the United States, showing a marked increase
in the use of solar resources. According to Wikipedia, by the year 2030, solar
energy generated from photovoltaic panels and other methods should account for
generating the electricity needs of nearly 14% of the world’s population
(Source: See Wikipedia entry regarding “Photovoltaics”). The market for
photovoltaic solar devices has increased dramatically, and includes not only
domestic use (such as personal homes and residential properties), but also
industrial properties and even commercial usage (such as solar powering of
roadways), which is becoming more and more common.
Solar
power energy supplies are also relevant for rural areas in developing countries
where many villages and even cities are more than five kilometers away from the
national power grid. In these cases, photovoltaic devices, such as the one
covered by the Patent Application, may provide an advantageous way in which to
provide for local power requirements without intensive investment in
infrastructural development.
Financial
incentives for employing photovoltaic devices differ from country to country;
however, a number of key players have creative incentive plans to reward local
individual and businesses for using photovoltaic energy sources. Some of these
countries include the United States, China, Japan, Germany, Australia, Israel
and Germany.
Photovoltaic
Element Technology
While
similar patented devices (U.S. Pat. Nos. 2003/0079771; 2004/0168717;
2004/0046168; 2005/0181534; 2009/0032108; 2002/0062858; as well as Japanese
Patent No: 2004/172167 and others) address the challenges of improving
photovoltaic elements relating to solar conversion, each has various limitations
or complexities. Each of the above patents focuses on combining various layers
and elements. Each patent was evaluated before or during the patent application
process for our technology, and we believe, based on our review of the relevant
technology and on our expectation that our proprietary technology will improve
the conversion process and be able to deliver a more efficient solar energy
conversion rate, that our method, including in some cases different materials,
will deliver more efficient results.
19
In
most known solar elements, a homogenous i-layer or a cascade of these layers
with a definite band-gap layer and limited possibilities of light conversion is
used. We believe that Solarflex’s solar photovoltaic element and the method for
its creation will allow for the production of semi-conductors In our
product, the substrate of the solar element will be made of metal, glass or
plastic, with a graded band-gap layer mainly comprised of silicon. Because of
the structure of this layer, the band gap layer size is essentially changed and
it is able to absorb the solar spectrum better, which in turn is expected to
enable an increase in solar energy conversion. The device will be manufactured
on the basis of at least one vacuum chamber according to the patent application
manufacturing instructions.
We intend
for the design and development of a commercial product to be carried out by
specialist subcontractors offering expertise in several relevant disciplines,
including plastics and metal, device design, operation and control, automation,
and mechanics, all as required.
There
are many manufacturers of solar elements, some detailed in the above patents, as
well as others. However, we have concluded based on our review of
these patents and the relevant technology that none of these patents includes
the structure and manufacturing details found in Solarflex’s
technology. Although these other patents have been issued, and
notwithstanding that we have not yet produced a working prototype of our
proposed product, we are not aware of any competitive solution, whether related
to these or other patents, that has the potential to deliver the efficiency and
solar energy conversion rates that we believe can be achieved with our design,
which is expected to enable an increase in solar energy
conversion.
We intend
to use the money raised in this offering to create a working prototype of our
product to test the expected results.
Competition
The
top three solar cell manufacturers in the field are Sharp Solar Corporation,
based in Japan, Q-Cells from Germany, and Suntech Power Corporation, which has
several bases, including in the United States, Europe and Africa. Other notable
solar manufacturers around the world include BP Solar, Shell Solar, Kyocera
Solar, Mitsubishi Solar, and GE Solar. Each produces various solar devices based
on its assets and technologies. We intend to develop and manufacture our solar
photovoltaic element based on the manufacturing method detailed in the Patent
Application.
Because
the market is already well developed and already contains many companies that
have extensive experience in developing, manufacturing, and selling similar
products, we will be joining a field that is extensive and well populated.
Nevertheless, we believe that the distinct design and construction
method that our technology offers, as explained in detail in the
“Background and Business Overview” section above, provides the basis for
differentiating our future product from existing models.
Competitive
Advantages
We
believe, based on our review of the relevant technology, that the design of our
proposed product will enable our product to deliver a more efficient solar
energy conversion rate. As explained above, the distinct design and construction
method that our technology offers, as detailed in the “Background and Business
Overview” section above, is expected to produce a more effective,
cost-efficient, and better solar photovoltaic device.
Sources
and Availability of Raw Materials
The
main raw materials that will be required to manufacturer our proposed product
are semi-conducting silicon and Vanadium. Semi-conducting silicon is
a standard material in the semiconductors industry. Vanadium is
available from various sources as a raw material. Some suppliers of
these materials and other equipment are Edwards Vacuum Ltd., VST Vacuum
Systems & Technology Service Ltd.,
Kurt J. Lesker Company, Mark Technologies Ltd., Thin Films Ltd.
and Locus Optical Devices & Elements Ltd.
Third-Party
Manufacturers
We
intend to rely on third parties to produce a prototype and to work with us to
manufacture the product. If our manufacturing and distribution agreements are
not satisfactory, we may not be able to produce or commercialize our device as
planned. In addition, we may not be able to contract with third parties to
manufacture our device in an economical manner. Furthermore, third-party
manufacturers may not adequately perform their obligations, which may impair our
competitive position. If a manufacturer fails to perform, we could experience
significant time delays or we may be unable to commercialize or continue to
market our adapters. Finally, even if we succeed in approaching third-party
manufacturers, it is currently unknown whether the additional cost of
manufacturing via a third party will increase the overall cost of the device
such that integration may not be cost-effective.
Patent,
Trademark, License & Franchise Restrictions and Contractual Obligations
& Concessions
On March
10, 2010, we entered into a Patent Sale Agreement with P.T. Holding, represented
by its owner, Dr. Boris Sigalov, whereby we acquired P.T. Holding’s right,
title, and interest in the Patent Application for the design of and
manufacturing method for a solar photovoltaic element that absorbs the solar
spectrum and, in turn, enables an increase of solar energy conversion. No other
trademarks, licenses, franchises, concessions, royalty agreements or labor
contracts are in effect regarding this prospectus.
20
In
addition, we are developing a website related to our product, which we intend to
use to promote, advertise, and potentially market our invention, once the
prototype and development stages have been completed. We intend to fully protect
our invention and other intellectual property on the basis of patent, copyright
and trade secrecy laws.
Existing
or Probable Government Regulations
Compliance
with Environmental Laws and Regulations
Our
operations are subject to local, state and federal laws and regulations
governing environmental quality and pollution control. To date, our compliance
with these regulations has had no material effect on our operations, capital,
earnings, or competitive position, and the cost of such compliance has not been
material. We are unable to assess or predict at this time what effect additional
regulations or legislation could have on our activities.
Government
Subsidies and Incentives
Recognizing
the importance of finding alternative energy sources, many governments have
enacted laws and regulations encouraging the development and manufacturing of
various alternative energy sources, including encouraging photovoltaic research
and technology. In the United States, the Photovoltaic Industry Roadmap, a US
industry-led effort to help guide and promote domestic photovoltaic research,
technology, manufacturing, marketing, and policy, was released in 1999 to cover
the period 2000-2020. It represents a unified effort by industry and government
to promote this form of energy. Similarly, the American Recovery and
Reinvestment Act of 2009 (ARRA), Pub. L. 111-5, promotes a policy of residential
solar electric rebates from photovoltaic panels placed on residential
properties. In addition, individual states have passed numerous regulations
promoting the use of renewable photovoltaic electric generating facilities and
offering tax credits to individuals who join in the effort. One such an example
is the New York State Income Tax Credit program, which includes crediting tax
payers for up to 10kW of clean photovoltaic capacity generated from panels
placed on their homes. This is commonly referred to as "Net Metering." Similar
laws exist in a number of other states, including, for example, Minnesota's
Chapter 138 law passed in 2009, which outlines federal and state guidelines.
This effort to encourage the development and use of solar photovoltaic energy is
being repeated in many countries, including China, Israel, and several locations
in Europe as well.
Employees
We have
no full time or part-time employees. Our Directors and officers, Sergei Rogov,
Vigars Kaktinieks, and Jonathan Berezovsky, are each expected to devote
approximately five hours per week to our business activities. If and when we
develop a prototype for our solar photovoltaic element, and are able to begin
manufacturing and marketing a product, we may need additional employees for our
operations. We do not foresee any significant changes in the number of employees
we will have over the next twelve months.
Transfer
Agent
We have
engaged Nevada Agency and Trust as our stock transfer agent. Nevada Agency and
Trust is located at 50 West Liberty Street, Reno, Nevada 89501. Their telephone
number is (775) 322-0626 and their fax number is (775) 322-5623. The transfer
agent is responsible for all record-keeping and administrative functions in
connection with our issued and outstanding common stock.
Research
and Development Activities and Costs
We have
not incurred costs to date and are not currently conducting any research and
development activities. We do, however, have plans to undertake research and
development activities during our first year of operation.
If we
are able to raise funds in this offering, we will retain one or more third
parties to conduct research and development, including engineering services,
concerning our solar photovoltaic element and to develop a prototype model. We
have not yet entered into any agreements, negotiations, or discussions with any
third parties with respect to such research and development activities. We do
not intend to do so until we commence this offering. For a detailed description,
see "Management’s Discussion and Analysis of Financial Condition or Plan of
Operation."
Description
of Property
Our
Principal executive offices are located at c/o Sergei Rogov, 12 Abba Hillel
Silver Street, 11th Floor,
Ramat Gan 52506, Israel. This location is the home of the President and Director
and we have been allowed to operate out of such location at no cost to the
Company. We believe that this space is adequate for our current and immediately
foreseeable operating needs. We do not have any policies regarding investments
in real estate, securities, or other forms of property.
21
Reports
to Security Holders
We
will make available to securities holders an annual report, including audited
financials, on Form 10-K. While we intend to become a “reporting issuer” under
Section 12 of the Securities Exchange Act of 1934, we are not currently a
reporting company, but upon effectiveness of this registration statement, we
will be required to file reports with the SEC pursuant to the Securities
Exchange Act of 1934, such as annual reports on Form 10-K, quarterly reports on
Form 10-Q, and current reports on Form 8-K. We
intend to file a Form 8-A promptly after this registration statement becomes
effective.
While
we intend to file a Form 8-A promptly after this registration statement becomes
effective and thereby become a “reporting issuer” under Section 12 of the
Securities Exchange Act of 1934, we are not currently a reporting issuer and
upon this registration statement becoming effective we will be required under
Section 15(d) of the Exchange Act to file the periodic reports required by
Section 13(a) of the Exchange Act with respect to each class of securities
covered by our registration statement. These reporting obligations may be
automatically suspended under Section 15(d) of the Exchange Act if on the first
day of any fiscal year other than the fiscal year in which our registration
statement became effective there are fewer than 300
shareholders. On the other hand, if we become a reporting issuer under
Section 12 of the Securities Exchange Act of 1934, we will be subject to all of
the obligations incumbent on a company with securities registered under Section
12 of the Exchange Act, including the continuing obligation to file the Section
13(a) reports; the directors, officers, and principal stockholders beneficial
ownership disclosure requirements of Section 16 of the Exchange Act; and the
proxy rules and regulations of Section 14 of the Exchange Act.
Management's Discussion and Analysis of Financial Condition
or Plan of Operation
You
should read the following plan of operation together with our audited financial
statements and related notes appearing elsewhere in this prospectus. This plan
of operation contains forward-looking statements that involve risks,
uncertainties, and assumptions. The actual results may differ materially from
those anticipated in these forward-looking statements as a result of certain
factors, including, but not limited to, those presented under "Risk Factors" or
elsewhere in this prospectus.
Plan
of Operation
We are a
development stage company that has acquired the rights to a patent application
for the design of and manufacturing method for a solar photovoltaic conversion
element which is expected to reduce cost, enhance the flexibility of the
manufacturing process, improve manufacturing efficiency and absorb the solar
spectrum better than current models, which should enable our product to increase
solar energy conversion rates.
Our
goal in the next twelve months is to complete development and production of a
fully operational prototype of our solar photovoltaic conversion element,
identify sub-contractors or licensees which will have the ability to design and
manufacture our product in commercial quantities, and market our product to
solar panel producers.
Although
we have not yet engaged a manufacturer to develop a fully operational prototype
of the solar photovoltaic conversion element, based on our preliminary
discussions with certain manufacturing vendors, we believe that it will take
approximately twelve months, from design to manufacture, to produce a basic
prototype of our product. Once the prototype has been produced, we plan
for the design and development of a commercial product to be carried out by
specialist subcontractors offering expertise in several relevant disciplines,
including plastics and metal, electricity and electronics, device design,
operation and control, automation and mechanics, computer and microcomputers,
and others.
We
initially intend to focus on the following activities:
|
·
|
Locating
third parties to perform research and development and engineering
services
|
|
·
|
Completing development of our
solar photovoltaic conversion
element.
|
|
·
|
Producing a working prototype
of our product.
|
|
·
|
Locating sub-contractors or
licensees to design and manufacture our product in commercial
quantities
|
|
·
|
Marketing our product to solar
panel producers.
|
The
design and development of a working prototype of our product will be divided
into three stages:
a)
Technical Concept/Definition (three months) – to be performed by management and
a third party contractor.
b)
Engineering Specification (four months) – to be performed by management and a
third party contractor.
c)
Engineering & Preparation for Production & Actual Manufacture (four
months) – to be performed by management and a third party
contractor
22
If and
when we have a viable prototype, depending on the availability of funds, we
estimate that we would need approximately an additional four to six months to
bring this product to market. Our objective is either to manufacture the product
ourselves through third party sub-contractors, and market the product as an
off-the-shelf device, and/or to license the manufacturing rights to the product
and related technology to third party manufacturers who would then assume
responsibility for marketing and sales.
Proceeds
and Expenditures
The
table below shows the intended net proceeds from this offering that we expect to
receive for scenarios where we sell various amounts of the shares. Since
we are making this offering without any minimum requirement, there is no
guarantee that we will be successful at selling any of the securities being
offered in this prospectus. Accordingly, the actual amount of proceeds we
will raise in this offering, if any, may differ.
Percent
of Net Proceeds Received
20%
|
40%
|
60%
|
80%
|
100%
|
||||||||||||||||
Shares
Sold
|
500,000 | 1,000,000 | 1,500,000 | 2,000,000 | 2,500,000 | |||||||||||||||
Gross
Proceeds
|
15,000 | $ | 30,000 | $ | 45,000 | $ | 60,000 | $ | 75,000 | |||||||||||
Less
Offering Expenses
|
(26,500 | ) | $ | (26,500 | ) | $ | (26,500 | ) | $ | (26,500 | ) | $ | (26,500 | ) | ||||||
Net
Offering Proceeds
|
(11,500 | ) | $ | 3,500 | $ | 18,500 | $ | 33,500 | $ | 48,500 |
The
following chart provides an overview of our budgeted expenditures using the net
proceeds from this offering, by significant area of activity over the next 12
months. Depending on the relative success of this offering, we may
not raise sufficient funds to execute our plan of operation. All amounts
listed below are estimates.
Legal
and Accounting (including SEC compliance)
|
$
|
10,000
|
||
Technology
Development and Engineering Costs
|
$
|
10,500
|
||
Prototype
Manufacturing Costs
|
$
|
3,500
|
||
Overhead/Administrative
Costs
|
$
|
6,000
|
||
Marketing
Activities
|
$
|
18,500
|
||
Total
|
$
|
48,500
|
We
hope to sell all of the shares offered in this
offering in order to fully execute on our business plan, but we believe that we
would be able to complete development and production of a working prototype if
we raise at least $30,000 in net proceeds in this offering. We will be
unable to complete development and production of a working prototype if we raise
less than $30,000 in net proceeds in this offering. We must raise at least
$26,500 in gross proceeds to avoid losing money in this
offering.
Sale of 20% of Shares
Offered in this Offering: If we receive gross proceeds of $15,000, we
will not have any funds available following payment of the costs related to this
offering and we will not be able to implement our plan of operation as detailed
in this section.
Sale of 40% of Shares
Offered in this Offering: If we receive gross proceeds of $30,000, we
will only have $3,500 available following payment of the costs related to this
offering and we will not be able to implement our plan of operation as detailed
in this section. We will need to raise additional funds to continue
development of our product.
Sale of 60% of Shares
Offered in this Offering: If we receive gross proceeds of $45,000, we
will have only $18,500 available following payment of the costs related to this
offering, and we will not be able to implement our plan of operation as detailed
in this section. We will have to limit our spending, including costs related to
technology development, and we will need to raise additional funds to complete
development of our product, to manufacture a working prototype, and to engage in
marketing activities.
Sale of 80% of Shares
Offered in this Offering: If we receive gross proceeds of $60,000, we
will have $33,500 available following payment of the costs related to this
offering, and we expect to be able to complete development of our technology and
manufacture a working prototype. However, we will have less money to spend
on marketing, and we may not be able to locate sub-contractors or licensees to
enable us to commercialize our product.
Sale of 100% of Shares
Offered in this Offering: If we receive gross proceeds of $75,000, we
will have $48,500 available following payment of the costs related to this
offering, and we will be able to implement our plan of operation as detailed in
this section.
Milestones
Outlined
below is a chronological itemization of the milestones that we intend to achieve
over the next twelve months, assuming we sell 100% of the shares offered in this
offering. If we are able to sell only 20% or 40% of the shares offered in
this offering, we will be unable to implement our plan of operation. If we
are able to sell only 60% of the shares offered in this offering, we expect to
be able to complete only some of the milestones set forth below for the first
and second quarters, and we will not be able to complete development of our
product. If we are able to sell 80% of the shares offered in this
offering, we expect to be able to complete all of the milestones regarding the
development of our technology and the manufacture of a working prototype;
however, we will have barely any money to spend on marketing. In the event
we do not raise at least $30,000 in net proceeds, we will have to defer working
towards the achievement of most of our milestones until after we are able to
raise additional working capital.
First Quarter – December
2010 to February 2011
|
·
|
Search for and retain a third
party to perform R&D and engineering services for the development of a
working prototype
|
|
·
|
Complete technical concept and
design for the working
prototype
|
Second Quarter – March to
May 2011
During
the second three-month period, we expect to achieve the
following:
|
·
|
Work on engineering
specifications for the working
prototype
|
Third Quarter – June to
August 2011
During
the third three-month period, we expect to perform the
following:
|
·
|
Complete engineering
specifications for the working
prototype
|
|
·
|
Search
for and retain a third party to manufacture the working
prototype
|
|
·
|
Commence engineering and
production preparation for the manufacture of the working
prototype
|
23
Fourth Quarter –
September to November 2011
During
the fourth three-month period, we expect to perform the
following:
|
·
|
Complete engineering and
production preparation for the manufacture of the working
prototype
|
|
·
|
Manufacture the working
prototype
|
|
·
|
Engage in marketing
activities
|
|
Search for third parties to
design and manufacture the product in commercial
quantities
|
24
We intend
to use the proceeds of this offering in the manner and in order of priority set
forth above.
Even
if all of the offered shares are sold and the maximum amount is raised from this
offering, we will need to raise additional capital through the private sale of
our equity securities or borrowings from third party lenders. We have no
commitments from or arrangements with any person to provide us with any
additional capital or loans, except for a commitment by our Directors to loan us
in the aggregate up to $10,000 to help cover our costs to comply with the
federal securities laws over the next twelve months in the event that sufficient
funds are not raised in this offering to cover such costs, and there is no
assurance that such additional financing will be available when required in
order to proceed with the business plan or that our ability to respond to
competition or changes in the market place or to exploit opportunities will not
be limited by lack of available capital financing. If additional financing is
not available when needed, we may not be in a position to continue operations,
and thus we may need to dramatically change our business plan, sell the Company,
or cease operations. We do not presently have any plans, arrangements, or
agreements to sell or merge our Company.
Our
auditors have issued an opinion on our financial statements which includes a
statement describing our going concern status. This means that there is
substantial doubt that we can continue as an on-going business for the next
twelve months unless we obtain additional capital to pay our bills and meet our
other financial obligations. This is because we have not generated any revenues
and no revenues are anticipated until we begin marketing the product.
Accordingly, we must raise capital from sources other than the actual sale of
the product. We must raise capital to implement our project and stay in
business. Even if we raise the maximum amount of money in this offering, we do
not know how long the money will last; however, we do believe it will last at
least twelve months.
Nevertheless,
we may be wrong in our estimates of funds required in order to proceed with
developing a prototype and executing our general business plan described herein.
We realize that we may have to seek further financing through the placing of
equity and/or debt securities as early as the first quarter of
2011.
We are
not aware of any material trend, event or capital commitment, which would
potentially adversely affect the Company’s future operations or its
liquidity.
Quantitative
and Qualitative Disclosures about Market Risk.
Management
does not believe that we face any material market risk exposure with respect to
derivative or other financial instruments or otherwise.
Analysis
of Financial Condition and Results of Operations
The
Company has had limited operations since its inception and limited funds. The
Company plans to raise equity from this offering and through additional private
placements or by the issuance of convertible debt. There are currently no
arrangements in place for any form of financing, except for a commitment by our
Directors to loan us in the aggregate up to $10,000 to help cover our costs to
comply with the federal securities laws over the next twelve months in the event
that sufficient funds are not raised in this offering to cover such costs;
however, the Company is not aware of any uncertainties and or other events that
will preclude the Company from raising equity in the normal manner of its
business conducts. The Company has no commitments for capital expenditures and
is not aware of any material trends that will have a favorable and / or
unfavorable outcome on the Company seeking in the future equity financing. The
Company has no contractual obligations, long term debt, capital leases,
operating leases, or purchase obligations at this time, other than its current
liabilities in the amount of $44,781 as reflected in the Financial Statements as
at September 30, 2010.
Other
Except
for historical information contained herein, the matters set forth above are
forward-looking statements that involve certain risks and uncertainties that
could cause actual results to differ from those in the forward-looking
statements.
Off-Balance
Sheet Arrangements
We do not
have any off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that are material to
investors.
25
Inflation
The
amounts presented in the financial statements do not provide for the effect of
inflation on the Company’s operations or its financial position. Amounts shown
for machinery, equipment, and leasehold improvements and for costs and expenses
reflect historical cost and do not necessarily represent replacement cost. The
net operating losses shown would be greater than reported if the effects of
inflation were reflected either by charging operations with amounts that
represent replacement costs or by using other inflation
adjustments.
Market
for Common Equity and Related Stockholder Matters
Market
Information
There
has been no public market for our securities. Our common stock is not traded on
any exchange or on the over-the-counter market. After the effective date of the
registration statement relating to this prospectus, we hope to have a market
maker file an application with the Financial Industry Regulatory Authority
(FINRA) for our common stock to be eligible for trading on the OTC Bulletin
Board. We do not yet have a market maker who has agreed to file such
application. There is no assurance that a trading market will develop, or, if
developed, that it will be sustained. Consequently, a purchaser of our common
stock may find it difficult to resell the securities offered herein should the
purchaser desire to do so when eligible for public resale.
Security
Holders
As of
November 19, 2010, there were 3,000,000 shares of common stock issued and
outstanding, which were held by five (5) stockholders of record, including our
Directors and officers.
Dividend
Policy
We have
not declared or paid dividends on our common stock since our formation, and we
do not anticipate paying dividends in the foreseeable future. Declaration or
payment of dividends, if any, in the future, will be at the discretion of our
Board of Directors and will depend on our then current financial condition,
results of operations, capital requirements and other factors deemed relevant by
the Board of Directors. There are no contractual restrictions on our ability to
declare or pay dividends.
Securities
Authorized Under Equity Compensation Plans
We have
no equity compensation plans.
Directors,
Executive Officers, Promoters and Control Persons
Directors
and Executive Officers
The
following table sets forth certain information regarding the members of our
Board of Directors and our executive officers as of November 19,
2010.
Name
|
Age
|
Positions and Offices Held
|
||
Sergei
Rogov
|
52
|
President
and Director
|
||
Vigars
Kaktinieks
|
25
|
Director
|
||
Jonathan
Berezovksy
|
23
|
Secretary,
Treasurer and CFO
|
26
Our
Directors hold office until the next annual meeting of our stockholders or until
their successors is duly elected and qualified. Set forth below is a summary
description of the principal occupation and business experience of each of our
Directors and executive officers for at least the last five years.
Sergei Rogov has been our
Director since the Company’s inception in February 12, 2010, and our President
since February 22, 2010. Mr. Rogov received his Bachelor of Science degree in
Applied Mathematics from Polytechnic University in St. Petersburg, Russia in
1980. From 1999, he worked as a Senior Program Engineer in the Development
Department of Identify Software Ltd., which in 2006 was acquired by BMC
Software, to which he continued to provide services until 2009. As part of
his duties, Mr. Rogov works with various development teams. Following his work
for BMC Software and until present, Mr. Rogov has continues to provide senior
software development services to Rollsoft Ltd. Prior to his position at
Identity Software Ltd., he worked for Telegate Ltd. for two years as a Program
Engineer, and for Prudence Ltd. for two years developing programs related to the
electromagnetic fields for linear accelerators.
The Board has concluded that Mr. Rogov
should serve as a Director because of his broad experience working with
development teams and managing development efforts, which experience he
gained while working at Identify Software Ltd. as well as his experience in the
management of development efforts.
Vigars Kaktinieks has served
as our Director since February 12, 2010. Mr. Kaktinieks studied and received his
Bachelor of Science degree in Economics and Business Administration from the
Stockholm School of Economics in Riga, Latvia in 2006. Mr. Kaktinieks is fluent
in three languages and is learning a fourth. Since the beginning of 2009, he has
worked as a Client Executive officer with AS SEB Banka. His responsibilities
include banking, financial and investment advice to clients who receive
personalized service, serving as a main reference and contact point for those
clients. From 2006 to the end of 2008, he served in various sales and
management positions for AS Sampo Banka in Latvia and abroad, and attended
technical training and seminars organized by AS Sampo Banka. Between 2004 and
2010, Mr. Kaktinieks had also been involved in obtaining funding for projects
and companies from several European Union funding initiatives. From 2005 until
2006, he worked as an accounting assistant in Procter & Gamble’s marketing
department in Latvia.
The
Board has concluded that Mr. Kaktinieks should serve as a Director because of
his extensive experience in financing and accounting.
Jonathan Berezovsky has been
our Secretary, Treasurer, and Chief Financial Officer since February 22, 2010.
Mr. Berezovsky received his Bachelor of Science degree in Business Economics
from Universidad Torcuato Di Tella in Buenos Aires in 2008. Since 2009, he has
been the V.P. of Business Development at Rollsoft Ltd., a software company, in
Petach Tikvah, Israel. Prior to this, in parallel with his studies, he worked
for 5 years as founder and CEO of Lanicuer, a company dealing with the
manufacture and marketing of leather-made products, based in Buenos Aires,
Argentina. Mr. Berezovsky is multi-lingual, having an average to excellent
knowledge of English, Spanish, French and Hebrew.
There are
no familial relationships among any of our Directors or officers. None of our
Directors or officers is or has been a Director or has held any form of
directorship in any other U.S. reporting companies except as mentioned above.
None of our Directors or officers has been affiliated with any company that has
filed for bankruptcy within the last five years. The Company is not aware of any
proceedings to which any of the Company’s Officers or Directors, or any
associate of any such officer or Director, is a party that are adverse to the
Company. We are also not aware of any material interest of any of our officers
or directors that is adverse to our own interests.
Each
Director of the Company serves for a term of one year or until the successor is
elected at the Company's annual stockholders' meeting and is qualified, subject
to removal by the Company's stockholders. Each officer serves, at the pleasure
of the Board of Directors, for a term of one year and until the successor is
elected at the annual meeting of the Board of Directors and is
qualified.
Audit
Committee and Financial Expert
We do not
have an audit committee or an audit committee financial expert. Our corporate
financial affairs are simple at this stage of development and each financial
transaction can be viewed by any officer or Director at will.
Board
Leadership Structure
The
Company has chosen to combine the principal executive officer and Board chairman
positions. The Company believes that this Board leadership structure is the most
appropriate for the Company for several reasons. First, the Company is a
development stage company, and at this early stage it is more efficient to have
the leadership of the Board in the same hands as the principal executive officer
of the Company. The challenges faced by the Company at this stage – obtaining
financing, developing its photovoltaic element device, and implementing a
marketing and sales plan – are most efficiently dealt with by having one person
intimately familiar with both the operational aspects as well as the strategic
aspects of the Company’s business. Second, Mr. Rogov is uniquely suited to
fulfill both positions of responsibility because he possesses both technical
knowledge and management experience.
27
Code
of Ethics
We do not
currently have a Code of Ethics applicable to our principal executive, financial
and accounting officers; however, the Company plans to implement such a code in
the fourth quarter of 2010.
Potential
Conflicts of Interest
Since we
do not have an audit or compensation committee comprised of independent
Directors, the functions that would have been performed by such committees are
performed by our Board of Directors. Thus, there is a potential conflict of
interest in that our Directors have the authority to determine issues concerning
management compensation, in essence their own, and audit issues that may affect
management decisions. We are not aware of any other conflicts of interest with
any of our Executives or Directors.
Board’s
Role in Risk Oversight
The Board
assesses on an ongoing basis the risks faced by the Company. These risks include
financial, technological, competitive, and operational risks. The Board
dedicates time at each of its meetings to review and consider the relevant risks
faced by the Company at that time. In addition, since the Company does not have
an Audit Committee, the Board is also responsible for the assessment and
oversight of the Company’s financial risk exposures.
Involvement
in Certain Legal Proceedings
We are
not aware of any material legal proceedings that have occurred within the past
ten years concerning any Director or control person which involved a criminal
conviction, a pending criminal proceeding, a pending or concluded administrative
or civil proceeding limiting one's participation in the securities or banking
industries, or a finding of securities or commodities law
violations.
Executive
Compensation
We have
not paid, nor do we owe, any compensation to our executive officers. We have not
paid any compensation to our officers since our inception.
We have
no employment agreements with any of our executive officers or
employees.
Option/SAR
Grants
We do not
currently have a stock option plan. No individual grants of stock options,
whether or not in tandem with stock appreciation rights known as SARs or
freestanding SARs, have been made to any executive officer or any Director since
our inception; accordingly, no stock options have been granted or exercised by
any of the officers or Directors since we were founded.
Long-Term
Incentive Plans and Awards
We do not
have any long-term incentive plans that provide compensation intended to serve
as incentive for performance. No individual grants or agreements regarding
future payouts under non-stock price-based plans have been made to any executive
officer or any Director or any employee or consultant since our inception;
accordingly, no future payouts under non-stock price-based plans or agreements
have been granted or entered into or exercised by our officer or Director or
employees or consultants since we were founded.
28
Compensation
of Directors
There are
no arrangements pursuant to which our Directors are or will be compensated in
the future for any services provided as Directors.
Employment
Contracts, Termination of Employment, and Change-in-control
Arrangements
There are
currently no employment agreements or other contracts or arrangements with our
officers or Directors. There are no compensation plans or arrangements,
including payments to be made by us, with respect to our officers or Directors
that would result from either (a) the resignation, retirement or any other
termination of any of our Directors or officers, or (b) a
change-in-control.
Certain
Relationships and Related Transactions
Other
than the transactions discussed below, we have not entered into any transaction
nor are there any proposed transactions in which our Director, executive
officer, stockholders or any member of the immediate family of the foregoing had
or is to have a direct or indirect material interest.
On
February 24, 2010, we issued 1,200,000 shares of our common stock to Mr. Sergei
Rogov, our President and Director, for a payment of $120 in cash which was
received by the Company on June 10, 2010. We believe this issuance was deemed to
be exempt under Regulation S of the Securities Act. No advertising or general
solicitation was employed in offering the securities. The offering and sale were
made only to a non-U.S. citizen, and transfer was restricted by us in accordance
with the requirements of the Securities Act of 1933.
On
February 24, 2010, we issued 660,000 shares of our common stock to Mr. Vigars
Kaktinieks, our Director, for a payment of $66 in cash which was received by the
Company on June 10, 2010. We believe this issuance was deemed to be exempt under
Regulation S of the Securities Act. No advertising or general solicitation was
employed in offering the securities. The offering and sale were made only to a
non-U.S. citizen, and transfer was restricted by us in accordance with the
requirements of the Securities Act of 1933.
On
February 24, 2010, we issued 480,000 shares of our common stock to Mr. Jonathan
Berezovsky, our Secretary, Treasurer and CFO, for a payment of $48 in cash which
was received by the Company on June 10, 2010. We believe this issuance was
deemed to be exempt under Regulation S of the Securities Act. No advertising or
general solicitation was employed in offering the securities. The offering and
sale were made only to a non-U.S. citizen, and transfer was restricted by us in
accordance with the requirements of the Securities Act of 1933.
On
February 24, 2010, we issued 540,000 shares of our common stock to Mr. Ilmars
Blumbergs for a payment of $54 in cash which was received by the Company on June
10, 2010. We believe this issuance was exempt under Regulation S of the
Securities Act. No advertising or general solicitation was employed in offering
the securities. The offering and sale were made only to a non-U.S. citizen, and
transfer was restricted by us in accordance with the requirements of the
Securities Act of 1933.
On
February 24, 2010, we issued 120,000 shares of our common stock to Mr. Lapso
Endo for a payment of $12 in cash which was received by the Company on June 10,
2010. We believe this issuance was exempt under Regulation S of the Securities
Act. No advertising or general solicitation was employed in offering the
securities. The offering and sale were made only to a non-U.S. citizen, and
transfer was restricted by us in accordance with the requirements of the
Securities Act of 1933.
As of
September 30, 2010, the Company has received loans from our two Directors in a
total amount of $29,915 as working capital advances from Directors who are also
stockholders of the Company. The loans are unsecured, non-interest bearing, and
due on demand.
Director
Independence
We are
not subject to listing requirements of any national securities exchange or
national securities association and, as a result, we are not at this time
required to have our board comprised of a majority of “independent Directors.”
We do not believe that any of our directors currently meet the definition of
“independent” as promulgated by the rules and regulations of
NASDAQ.
29
Security
Ownership of Certain Beneficial Owners and Management
The
following table sets forth certain information concerning the ownership of the
Common Stock by (a) each person who, to the best of our knowledge, beneficially
owned on that date more than 5% of our outstanding common stock, (b) each of our
Directors and executive officers, and (c) all current Directors and executive
officers as a group. The following table is based upon an aggregate of 3,000,000
shares of our common stock outstanding as of November 19, 2010.
Name
of
Beneficial Owner
|
Number of Shares
of Common
Stock Beneficially
Owned or Right to
Direct Vote (1)
|
Percent of Common
Stock Beneficially
Owned or Right
to Direct Vote (1)
|
||||||
Sergei
Rogov
|
1,200,000 | 40 | % | |||||
Vigars
Kaktinieks
|
660,000 | 22 | % | |||||
Jonathan
Berezovsky
|
480,000 | 16 | % | |||||
Ilmars
Blumbergs
|
540,000 | 18 | % | |||||
Lapso
Endo
|
120,000 | 4 | % | |||||
All Officers
as a Group
|
2,340,000 | 78 | % |
(1)
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission (the "SEC") and generally includes voting or
investment power with respect to securities. In accordance with SEC rules,
shares of common stock issuable upon the exercise of options or warrants which
are currently exercisable or which become exercisable within 60 days following
the date of the information in this table are deemed to be beneficially owned
by, and outstanding with respect to, the holder of such option or warrant.
Except as indicated by footnote, and subject to community property laws where
applicable, to our knowledge, each person listed is believed to have sole voting
and investment power with respect to all shares of common stock owned by such
person.
Future
Sales by Existing Stockholders
As of the
date of this prospectus, there are five (5) stockholders of record holding
3,000,000 shares of our common stock. All of our issued shares of common stock
are "restricted securities," as that term is defined in Rule 144 of the Rules
and Regulations of the SEC promulgated under the Securities Act. Of the
3,000,000 shares, the 2,880,000 shares held by our “affiliates,” as such term is
defined in Rule 144, may be sold in the public market commencing one year after
their acquisition, subject to the availability of current public information,
volume restrictions, and certain restrictions on the manner of sale. Under Rule
144, the 120,000 shares held by a non-affiliate can be sold publicly, subject to
volume restrictions and certain restrictions on the manner of sale, commencing
one (1) year after their acquisition.
Shares
purchased in this offering, which will be immediately resalable, and sales of
all of our other shares after applicable restrictions expire, could have a
depressive effect on the market price, if any, of our common stock and the
shares we are offering. See the section entitled “Dilution” above.
We do not
have any issued and outstanding securities that are convertible into common
stock. We have not registered any shares for sale by our existing stockholders
under the Securities Act. None of our existing stockholders is entitled to
registration rights.
30
Legal
Proceedings
There are
no pending legal proceedings to which the Company or any Director, officer or
affiliate of the Company, any owner of record or beneficial holder of more than
5% of any class of voting securities of the Company, or security holder is a
party that is adverse to the Company. The Company’s property is not the subject
of any pending legal proceedings.
Description
of Securities
The
following description of our capital stock is a summary and is qualified in its
entirety by the provisions of our Articles of Incorporation, with amendments,
all of which have been filed as exhibits to our registration statement of which
this prospectus is a part.
Our
Common Stock
We are
authorized to issue 500,000,000 shares of our Common Stock, $0.0001 par value,
of which, as of November 19, 2010, 3,000,000 shares are issued and outstanding.
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 our 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. All of the outstanding shares of common stock are fully paid and
non-assessable. Holders of common stock have no preemptive rights to purchase
our common stock. There are no conversion or redemption rights or sinking fund
provisions with respect to the common stock.
Our
Preferred Stock
We are
not authorized to issue shares of preferred stock.
Shares
Eligible for Future Sale
Prior to
this offering, there has been no public market for our common stock. We cannot
predict the effect, if any, that market sales of shares of our common stock or
the availability of shares of our common stock for sale will have on the market
price of our common stock. Sales of substantial amounts of our common stock in
the public market could adversely affect the market prices of our common stock
and could impair our future ability to raise capital through the sale of our
equity securities.
Upon
completion of this offering, assuming all of the offered shares are purchased,
we will have a total of 5,500,000 shares of common stock outstanding. The shares
sold in this offering will be freely tradable without restriction, or further
registration under the Securities Act, unless those shares are acquired by our
“affiliates,” as that term is defined in Rule 144 under the Securities Act. The
remaining 3,000,000 shares of common stock outstanding will be restricted as a
result of securities laws. Restricted securities may be sold in the public
market only if they have been registered or if they qualify for an exemption
from registration under Rule 144 under the Securities Act.
Rule
144
In
general, under Rule 144 as currently in effect, a person who is not one of our
affiliates and who is not deemed to have been one of our affiliates at any time
during the three months preceding a sale and who has beneficially owned shares
of our common stock that are deemed restricted securities for at least six
months would be entitled after such six-month holding period to sell the common
stock held by such person, subject to the continued availability of current
public information about us (which current public information requirement is
eliminated after a one-year holding period).
31
A person
who is one of our affiliates and who has beneficially owned shares of our common
stock that are deemed restricted securities for at least six months would be
entitled after such six-month holding period to sell within any three-month
period a number of shares that does not exceed 1% of the number of shares of our
common stock then outstanding, which will equal 55,000 shares immediately after
this offering, subject to the continued availability of current public
information about us and the filing of a Form 144 notice of sale if the sale is
for an amount in excess of 5,000 shares or for an aggregate sale price of more
than $50,000 in a three-month period.
Plan
of Distribution
We are
offering for sale a maximum of 2,500,000 shares of our common stock in a
self-underwritten offering directly to the public at a price of $0.03 per share.
There is no minimum number of shares that we must sell in our direct offering,
and therefore no minimum amount of proceeds will be raised. No arrangements have
been made to place funds into escrow or any similar account. Upon receipt,
offering proceeds will be deposited into our operating account and used to
conduct our business and operations. We are offering the shares without any
underwriting discounts or commissions. The purchase price is $0.03 per share. If
all 2,500,000 shares are not sold within 180 days from the date hereof (which
may be extended an additional 90 days in our sole discretion), the offering for
the balance of the shares will terminate and no further shares will be
sold.
Our
offering price of $0.03 per share was to a large extent arbitrarily decided upon
by our management and is not based upon earnings or operating history, does not
reflect our actual value, and bears no relation to our earnings, assets, book
value, net worth, or any other recognized criteria of value. No independent
investment banking firm has been retained to assist in determining the offering
price for the shares. Such offering price was not based on the price of the
issuance to our founders. Accordingly, the offering price should not be regarded
as an indication of any future price of our stock.
We
anticipate applying for trading of our common stock on the over-the-counter
(OTC) Bulletin Board upon the effectiveness of the registration statement of
which this prospectus forms a part. To have our securities quoted on the OTC
Bulletin Board we must be a company that: (1) reports its current financial
information to the Securities and Exchange Commission, banking regulators or
insurance regulators; and (2) has at least one market maker who completes and
files a Form 211 with FINRA Regulation, Inc. The OTC Bulletin Board differs
substantially from national and regional stock exchanges because (1) it operates
through communication of bids, offers and confirmations between broker-dealers,
rather than one centralized market or exchange; and (2) securities admitted to
quotation are offered by one or more broker-dealers, rather than "specialists"
which operate in stock exchanges. We have not yet engaged a market maker to
assist us to apply for quotation on the OTC Bulletin Board and we are not able
to determine the length of time that such application process will take. Such
time frame is dependent on comments we receive, if any, from the FINRA regarding
our Form 211 application.
There
is currently no public market for our shares of common stock. There can be no
assurance that a market for our common stock will be established or that, if
established, such market will be sustained. Therefore, purchasers of our shares
registered hereunder may be unable to sell their securities, because there may
not be a public market for our securities. As a result, you may find it more
difficult to dispose of, or obtain accurate quotes of our common stock. Any
purchaser of our securities should be in a financial position to bear the risks
of losing their entire investment.
We
intend to sell the shares in this offering through Mr. Vigars Kaktinieks and/or
Mr. Sergei Rogov, who are Directors of the Company. The intended methods
of communication with potential investors include, without limitation, telephone
and personal contacts. They intend to offer the shares to business
associates and will receive no commission from the sale of any shares. They will
not register as a broker-dealer under section 15 of the Securities Exchange Act
of 1934 in reliance upon Rule 3a4-1. Rule 3a4-1 sets forth those conditions
under which a person associated with an issuer may participate in the offering
of the issuer's securities and not be deemed to be a broker/dealer. The
conditions are that:
1. The
person is not statutorily disqualified, as that term is defined in Section
3(a)(39) of the Act, at the time of his participation;
2. The
person is not compensated in connection with his participation by the payment of
commissions or other remuneration based either directly or indirectly on
transactions in securities;
3. The
person is not, at the time of his participation, an associated person of a
broker/dealer; and
32
4. The
person meets the conditions of Paragraph (a)(4)(ii) of Rule 3a4-1 of the
Exchange Act in that he (A) primarily performs, or is intended primarily to
perform at the end of the offering, substantial duties for or on behalf of the
Issuer otherwise than in connection with transactions in securities; and (B) is
not a broker or dealer, or an associated person of a broker or dealer, within
the preceding twelve (12) months; and (C) does not participate in selling and
offering of securities for any Issuer more than once every twelve (12) months
other than in reliance on Paragraphs (a)(4)(i) or (a)(4)(iii).
Sergei
Rogov and Vigars Kaktinieks are not statutorily disqualified, are not being
compensated, and are not associated with a broker/dealer. Mr. Rogov is and will
continue to be our President and director at the end of the offering and he
performs substantial duties for or on behalf of the Company otherwise than in
connection with transactions in securities, including serving as President of
the Company. Mr. Kaktinieks is and will continue to serve as a Director of
the Company at the end of the offering and he performs substantial duties for or
on behalf of the Company otherwise than in connection with transactions in
securities, including in the fields of oversight, risk assessment, fundraising,
and marketing. In addition, neither Mr. Rogov nor Mr. Kaktinieks has been
during the last twelve months, nor is currently, a broker/dealer or associated
with a broker/dealer. They have not during the last twelve months and will not
in the next twelve months offer or sell securities for another
corporation..
The
intended methods of communication with potential investors include, without
limitation, telephone and personal contacts. We will not utilize the Internet to
advertise our offering.
Offering
Period and Expiration Date
This
offering will start on the date of this registration statement is declared
effective by the SEC and continue for a period of 180 days. We may extend the
offering period for an additional 90 days in our absolute discretion, provided
that the offering has not been completed or otherwise terminated by us. We will
not accept any money until this registration statement is declared effective by
the SEC.
Procedures
for Subscribing
We will
not accept any money until this registration statement is declared effective by
the SEC. Once the registration statement is declared effective by the SEC, if
you decide to subscribe for any shares in this offering, you must:
1.
execute and deliver a subscription agreement that we will provide to you;
and
2.
deliver a check or certified funds to us for acceptance or
rejection
to
Solarflex Corp., c/o Sergei Rogov, 12 Abba Hillel Silver Street, 11th Floor,
Ramat Gan 52506, Israel . All checks for subscriptions must be made
payable to "Solarflex
Corp."
An
investor will receive his full rights as a shareholder upon our acceptance of a
subscription by such investor and we will issue stock certificates to investors
as soon as practicable after acceptance of the subscription.
Right
to Reject Subscriptions
We
have the right to accept or reject subscriptions in whole or in part, for any
reason or for no reason. All monies from rejected subscriptions will be returned
by us to the subscriber within twelve business days of such rejection, without
interest or deductions. We will determine whether to accept a subscription
within ten (10) business days of receipt of the investment
funds.
Underwriters
We have
no underwriter and do not intend to have one. In the event that we sell or
intend to sell by means of any arrangement with an underwriter, then we will
file a post-effective amendment to this S-1 to accurately reflect the changes to
us and our financial affairs and any new risk factors, and in particular to
disclose such material relevant to this Plan of Distribution.
Regulation
M
We are
subject to Regulation M of the Securities Exchange Act of 1934. Regulation M
governs activities of underwriters, issuers, selling security holders, and
others in connection with offerings of securities. Regulation M prohibits
distribution participants and their affiliated purchasers from bidding for
purchasing or attempting to induce any person to bid for or purchase the
securities being distribute.
33
Section
15(G) of the Exchange Act
Our
shares are covered by Section 15(g) of the Securities Exchange Act of 1934, as
amended, and Rules 15g-1 through 15g-6 promulgated thereunder. They impose
additional sales practice requirements on broker/dealers who sell our securities
to persons other than established customers and accredited investors (generally
institutions with assets in excess of $5,500,000, or individuals with net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouses).
Rule
15g-1 exempts a number of specific transactions from the scope of the penny
stock rules.
Rule
15g-2 declares unlawful broker/dealer transactions in penny stocks unless the
broker/dealer has first provided to the customer a standardized disclosure
document.
Rule
15g-3 provides that it is unlawful for a broker/dealer to engage in a penny
stock transaction unless the broker/dealer first discloses and subsequently
confirms to the customer current quotation prices or similar market information
concerning the penny stock in question.
Rule
15g-4 prohibits broker/dealers from completing penny stock transactions for a
customer unless the broker/dealer first discloses to the customer the amount of
compensation or other remuneration received as a result of the penny stock
transaction.
Rule
15g-5 requires that a broker/dealer executing a penny stock transaction, other
than one exempt under Rule 15g-1, disclose to its customer, at the time of or
prior to the transaction, information about the sales persons
compensation.
Rule
15g-6 requires broker/dealers selling penny stocks to provide their customers
with monthly account statements.
Rule
15g-9 requires broker/dealers to approve the customer's account for the
transaction. To approve a person's account for transactions in penny stocks, a
broker/dealer must: obtain a written agreement from the customer setting forth
the identity and quantity of the stock being purchased; obtain from the customer
information regarding his investment experience; make a determination that the
investment is suitable for the investor; deliver to the customer a written
statement for the basis for the suitability determination; and notify the
customer of his rights and remedies in cases of fraud in penny stock
transactions and of the FINRA's toll free telephone number and the central
number of the North American Administrators Association for information on the
disciplinary history of broker/dealers and their associated
persons.
Changes
In and Disagreements with Accountants on Accounting and Financial
Disclosure
Weinberg
and Baer, LLC is our registered independent auditor. There have not been any
changes in or disagreements with our auditors on accounting and financial
disclosure or any other matter.
Indemnification
for Securities Act Liabilities
Our
Certificate of Incorporation, as amended, provides that, to the fullest extent
permitted by Delaware law, our Directors or officers shall not be personally
liable to us or our stockholders for damages for breach of their fiduciary duty.
The effect of this provision of our Articles of Incorporation, as amended, is to
eliminate our right and the right of our stockholders (through stockholders'
derivative suits on behalf of our Company) to recover damages against a Director
or officer for breach of the fiduciary duty of care as a Director or officer
(including breaches resulting from negligent or grossly negligent behavior),
except under certain situations defined by statute. We believe that the
indemnification provisions in our Certificate of Incorporation, as amended, are
necessary to attract and retain qualified persons as Directors and
officers.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to Directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a Director, officer, or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
Director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
34
Legal
Matters
Certain
legal matters, including the legality of the securities offered, will be passed
upon for us by SRK Law Offices .
Experts
Our
financial statements as of September 30, 2010, and for the period then ended and
cumulative from inception (February 12, 2010), appearing in this prospectus and
registration statement have been audited by Weinberg and Baer, LLC, an
independent registered Public Accounting Firm, as set forth on their report
thereon appearing elsewhere in this prospectus, and are included in reliance
upon such report given upon the authority of such firm as experts in accounting
and auditing.
Interest
of Named Experts and Counsel
No expert
or counsel named in this prospectus as having prepared or certified any part of
this prospectus or having given an opinion upon the validity of the securities
being registered or upon other legal matters in connection with the registration
or offering of the common stock was employed on a contingency basis or had, or
is to receive, in connection with the offering, a substantial interest, directly
or indirectly, in the Registrant or any of its parents or subsidiaries. Nor was
any such person connected with the Registrant or any of its parents,
subsidiaries as a promoter, managing or principal underwriter, voting trustee,
Director, officer, or employee.
Available
Information
We have
filed a registration statement on Form S-1 under the Securities Act of 1933, as
amended, relating to the shares of common stock being offered by this
prospectus, and reference is made to such registration statement. This
prospectus constitutes the prospectus of Solarflex Corp. filed as part of the
registration statement, and it does not contain all information in the
registration statement, as certain portions have been omitted in accordance with
the rules and regulations of the Securities and Exchange
Commission.
Copies
of the registration statement and the accompanying exhibits and schedules may be
inspected without charge (and copies may be obtained at prescribed rates) at the
public reference facility of the SEC at Room 1024, 100 F Street, N.E.
Washington, D.C. 20549. Our filings, including the registration statement,
will also be available to you on the Internet web site maintained by the SEC at
http://www.sec.gov.
The
public may read and copy any materials with the Commission at the SEC's Public
Reference Room at 100 F Street, NE. Washington, DC 20549, on official business
days during the hours of 10 a.m. to 3 p.m. The public may obtain information on
the operation of the Public Reference Room by calling the Commission at
1–800–SEC–0330.
35
SOLARFLEX
CORP.
(A
DEVELOPMENT STAGE COMPANY)
INDEX
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2010
Report
of Registered Independent Auditors
|
F-2
|
Financial
Statements-
|
|
Balance
Sheet as of September 30, 2010
|
F-3
|
Statements
of Operations for the Period Ended September 30, 2010, and Cumulative from
Inception
|
F-4
|
Statement
of Changes in Stockholders’ Equity for the Period from Inception Through
September 30, 2010
|
F-5
|
Statements
of Cash Flows for the Period Ended September 30, and Cumulative from
Inception
|
F-6
|
Notes
to Financial Statements
|
F-7
|
F-1
REPORT
OF REGISTERED INDEPENDENT AUDITORS
To the
Board of Directors and Stockholders
of
Solarflex Corp.:
We
have audited the accompanying balance sheet of Solarflex Corp. (a Delaware
corporation in the development stage) as of September 30, 2010, and the related
statements of operations, stockholders’ equity, and cash flows for the period
ended September 30, 2010, and from inception (February 12, 2010) through
September 30, 2010. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We
conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States of America). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Solarflex Corp. as of September 30,
2010, and the results of its operations and its cash flows for the period ended
September 30, 2010, and from inception (February 12, 2010) through September 30,
2010, in conformity with accounting principles generally accepted in the United
States of America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company is in the development stage, and has not established any
source of revenue to cover its operating costs. As such, it has incurred an
operating loss since inception. Further, as of September 30, 2010, the cash
resources of the Company were insufficient to meet its planned business
objectives. These and other factors raise substantial doubt about the Company’s
ability to continue as a going concern. Management’s plan regarding 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.
Respectfully
submitted,
Weinberg
& Baer LLC
Baltimore,
Maryland
October
21, 2010
SOLARFLEX
CORP.
(A
DEVELOPMENT STAGE COMPANY)
BALANCE
SHEET
AS
OF SEPTEMBER 30, 2010
ASSETS
|
||||
Current
Assets:
|
||||
Cash
and cash equivalents
|
$ | 600 | ||
Deferred
offering costs
|
25,000 | |||
Total
current assets
|
25,600 | |||
Total
Assets
|
$ | 25,600 | ||
LIABILITIES AND STOCKHOLDERS'
(DEFICIT)
|
||||
Current
Liabilities:
|
||||
Accounts
payable and accrued liabilities
|
$ | 14,866 | ||
Loans
from related parties - Directors and stockholders
|
29,915 | |||
Total
current liabilities
|
44,781 | |||
Total
liabilities
|
44,781 | |||
Commitments
and Contingencies
|
||||
Stockholders'
(Deficit):
|
||||
Common
stock, par value $.0001 per share, 500,000,000 shares authorized;
3,000,000 shares issued and outstanding
|
300 | |||
(Deficit)
accumulated during the development stage
|
(19,481 | ) | ||
Total
stockholders' (deficit)
|
(19,181 | ) | ||
Total
Liabilities and Stockholders' (Deficit)
|
$ | 25,600 |
The
accompanying notes to financial statements
are an
integral part of these financial statements.
F-3
SOLARFLEX
CORP.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENTS
OF OPERATIONS
FOR
THE PERIOD ENDED SEPTEMBER 30, 2010
AND
CUMULATIVE FROM INCEPTION (FEBRUARY 12, 2010)
Three Months
|
||||||||||||
Ended
|
Inception to
|
Cumulative
|
||||||||||
September 30,
|
September 30,
|
From
|
||||||||||
2010
|
2010
|
Inception
|
||||||||||
Revenues
|
$ | - | $ | - | $ | - | ||||||
Expenses:
|
||||||||||||
General
and administrative-
|
||||||||||||
Professional
fees
|
3,115 | 4,115 | 4,115 | |||||||||
Consulting
|
5,000 | 10,000 | 10,000 | |||||||||
Transfer
agent fee
|
2,500 | 2,500 | 2,500 | |||||||||
Legal
- incorporation
|
- | 1,500 | 1,500 | |||||||||
Filing
fees
|
1,366 | 1,366 | 1,366 | |||||||||
Total
general and administrative expenses
|
11,981 | 19,481 | 19,481 | |||||||||
(Loss)
from Operations
|
(11,981 | ) | (19,481 | ) | (19,481 | ) | ||||||
Other
Income (Expense)
|
- | - | - | |||||||||
Provision
for income taxes
|
- | - | - | |||||||||
Net
(Loss)
|
$ | (11,981 | ) | $ | (19,481 | ) | $ | (19,481 | ) | |||
(Loss)
Per Common Share:
|
||||||||||||
(Loss)
per common share - Basic and Diluted
|
$ | (0.00 | ) | $ | (0.01 | ) | ||||||
Weighted
Average Number of Common Shares
|
||||||||||||
Outstanding
- Basic and Diluted
|
3,000,000 | 2,844,156 |
F-4
SOLARFLEX
CORP.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENT
OF CHANGES IN STOCKHOLDERS' EQUITY
FOR
THE PERIOD FROM INCEPTION (FEBRUARY 12, 2010)
THROUGH
SEPTEMBER 30, 2010
(Deficit)
|
||||||||||||||||
Accumulated
|
||||||||||||||||
During the
|
||||||||||||||||
Common stock
|
Development
|
|||||||||||||||
Description
|
Shares
|
Amount
|
Stage
|
Totals
|
||||||||||||
Balance
- at inception
|
- | $ | - | $ | - | |||||||||||
Common
stock issued for cash ($0.0001/share)
|
3,000,000 | 300 | - | 300 | ||||||||||||
Net
(loss) for the period
|
- | - | (19,481 | ) | (19,481 | ) | ||||||||||
Balance
- September 30, 2010
|
3,000,000 | $ | 300 | $ | (19,481 | ) | $ | (19,181 | ) |
The
accompanying notes to financial statements are
an
integral part of these financial statements.
F-5
SOLARFLEX
CORP.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENTS
OF CASH FLOWS
FOR
THE PERIOD ENDED SEPTEMBER 30, 2010
AND
CUMULATIVE FROM INCEPTION (FEBRUARY 12, 2010)
Inception to
|
Cumulative
|
|||||||
September 30,
|
From
|
|||||||
2010
|
Inception
|
|||||||
Operating
Activities:
|
||||||||
Net
(loss)
|
(19,481 | ) | $ | (19,481 | ) | |||
Adjustments
to reconcile net (loss) to net cash (used in) operating
activities:
|
||||||||
Changes
in net liabilities-
|
||||||||
Deferred
offering costs
|
(25,000 | ) | (25,000 | ) | ||||
Accounts
payable and accrued liabilities
|
14,866 | 14,866 | ||||||
Net
Cash Used in Operating Activities
|
(29,615 | ) | (29,615 | ) | ||||
Investing
Activities:
|
- | - | ||||||
Net
Cash Used in Investing Activities
|
- | - | ||||||
Financing
Activities:
|
||||||||
Proceeds
from stock issued
|
300 | 300 | ||||||
Loans
from related parties - directors and stockholders
|
29,915 | 29,915 | ||||||
Net
Cash Provided by Financing Activities
|
30,215 | 30,215 | ||||||
Net
(Decrease) Increase in Cash
|
600 | 600 | ||||||
Cash
- Beginning of Period
|
- | - | ||||||
Cash
- End of Period
|
$ | 600 | $ | 600 | ||||
Supplemental
Disclosure of Cash Flow Information:
|
||||||||
Cash
paid during the period for:
|
||||||||
Interest
|
$ | - | $ | - | ||||
Income
taxes
|
$ | - | $ | - |
The
accompanying notes to financial statements are
an
integral part of these financial statements.
F-6
SOLARFLEX
CORP.
NOTES
TO FINANCIAL STATEMENTS
(1) Summary of Significant Accounting
Policies
Basis
of Presentation and Organization
Solarflex
Corp. (“Solarflex” or the “Company”) is a Delaware corporation in the
development stage and has not commenced operations. The Company was incorporated
under the laws of the State of Delaware on February 12, 2010. The business plan
of the Company is to develop a commercial application of the design in a patent
of a “Solar element and method of manufacturing the same”. The Company also
intends to produce a prototype, and manufacture and market the product and/or
seek third party entities interested in licensing the rights to manufacture and
market the device. The accompanying financial statements of the Company were
prepared from the accounts of the Company under the accrual basis of
accounting.
Cash and Cash Equivalents
For
purposes of reporting within the statement of cash flows, the Company considers
all cash on hand, cash accounts not subject to withdrawal restrictions or
penalties, and all highly liquid debt instruments purchased with a maturity of
three months or less to be cash and cash equivalents.
Revenue
Recognition
The
Company is in the development stage and has yet to realize revenues from
operations. Once the Company has commenced operations, it will recognize
revenues when delivery of goods or completion of services has occurred provided
there is persuasive evidence of an agreement, acceptance has been approved by
its customers, the fee is fixed or determinable based on the completion of
stated terms and conditions, and collection of any related receivable is
probable.
Loss
per Common Share
Basic
loss per share is computed by dividing the net loss attributable to the common
stockholders by the weighted average number of shares of common stock
outstanding during the period. Fully diluted loss per share is computed similar
to basic loss per share except that the denominator is increased to include the
number of additional common shares that would have been outstanding if the
potential common shares had been issued and if the additional common shares were
dilutive. There were no dilutive financial instruments issued or outstanding for
the period ended September 30, 2010.
Income
Taxes
Income
taxes are accounted for under the asset and liability method. Deferred tax
assets and liabilities are determined based on temporary differences between the
bases of certain assets and liabilities for income tax and financial reporting
purposes. The deferred tax assets and liabilities are classified according to
the financial statement classification of the assets and liabilities generating
the differences.
The
Company maintains a valuation allowance with respect to deferred tax assets. The
Company establishes a valuation allowance based upon the potential likelihood of
realizing the deferred tax asset and taking into consideration the Company’s
financial position and results of operations for the current period. Future
realization of the deferred tax benefit depends on the existence of sufficient
taxable income within the carryforward period under the Federal tax
laws.
Changes
in circumstances, such as the Company generating taxable income, could cause a
change in judgment about the realizability of the related deferred tax asset.
Any change in the valuation allowance will be included in income in the year of
the change in estimate.
F-7
Fair
Value of Financial Instruments
The
Company estimates the fair value of financial instruments using the available
market information and valuation methods. Considerable judgment is required in
estimating fair value. Accordingly, the estimates of fair value may not be
indicative of the amounts the Company could realize in a current market
exchange. As of September 30, 2010, the carrying value of accounts payable,
accrued liabilities, and loans from directors and stockholders approximated fair
value due to the short-term nature and maturity of these
instruments.
Deferred
Offering Costs
The
Company defers as other assets the direct incremental costs of raising capital
until such time as the offering is completed. At the time of the completion of
the offering, the costs are charged against the capital raised. Should the
offering be terminated, deferred offering costs are charged to operations during
the period in which the offering is terminated.
Impairment
of Long-Lived Assets
The
Company evaluates the recoverability of long-lived assets and the related
estimated remaining lives when events or circumstances lead management to
believe that the carrying value of an asset may not be recoverable. For the
period ended September 30, 2010, no events or circumstances occurred for which
an evaluation of the recoverability of long-lived assets was
required.
Common
Stock Registration Expenses
The
Company considers incremental costs and expenses related to the registration of
equity securities with the SEC, whether by contractual arrangement as of a
certain date or by demand, to be unrelated to original issuance transactions. As
such, subsequent registration costs and expenses are expensed as
incurred.
Estimates
The
financial statements are prepared on the basis of accounting principles
generally accepted in the United States. The preparation of financial statements
in conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities as of September 30, 2010, and expenses for the period ended
September 30, 2010, and cumulative from inception. Actual results could differ
from those estimates made by management.
Fiscal
Year End
The
Company has adopted a fiscal year end of December 31.
Recent
Accounting Pronouncements
In April
2009, the FASB issued FSP No. FAS 157-4, “Determining Fair Value When the Volume
and Level of Activity for the Asset or Liability Have Significantly Decreased
and Identifying Transactions That Are Not Orderly” (“FSP FAS 157-4”), codified
in FASB ASC 820-10-65, which provides additional guidance for estimating fair
value in accordance with ASC 820-10 when the volume and level of activity for an
asset or liability have significantly decreased. ASC 820-10-65 also includes
guidance on identifying circumstances that indicate a transaction is not
orderly. The adoption of ASC 820-10-65 did not have an impact on the Company's
results of operations or financial condition.
In May
2009, the FASB issued SFAS No. 165, "Subsequent Events" ("SFAS 165") codified in
FASB ASC 855-10-05, which provides guidance to establish general standards of
accounting for and disclosures of events that occur after the balance sheet date
but before financial statements are issued or are available to be issued. FASB
ASC 855-10-05 also requires entities to disclose the date through which
subsequent events were evaluated as well as the rationale for why that date was
selected. FASB ASC 855-10-05 is effective for interim and annual periods ending
after June 15, 2009. FASB ASC 855-10-05 requires that public entities evaluate
subsequent events through the date that the financial statements are
issued.
F-8
In June
2009, the FASB issued SFAS No. 166, "Accounting for Transfers of Financial
Assets - an amendment of FASB Statement No. 140" ("SFAS 166"), codified as FASB
ASC 860, which requires entities to provide more information regarding sales of
securitized financial assets and similar transactions, particularly if the
entity has continuing exposure to the risks related to transferred financial
assets. FASB ASC 860 eliminates the concept of a "qualifying special-purpose
entity," changes the requirements for derecognizing financial assets and
requires additional disclosures. FASB ASC 860 is effective for fiscal years
beginning after November 15, 2009. The adoption of FASB ASC 860 did not have an
impact on the Company's financial condition, results of operations or cash
flows.
In June
2009, the FASB issued SFAS No. 167, "Amendments to FASB Interpretation No.
46(R)" ("SFAS 167"), codified as FASB ASC 810-10, which modifies how a company
determines when an entity that is insufficiently capitalized or is not
controlled through voting (or similar rights) should be consolidated. FASB ASC
810-10 clarifies that the determination of whether a company is required to
consolidate an entity is based on, among other things, an entity's purpose and
design and a company's ability to direct the activities of the entity that most
significantly impact the entity's economic performance. FASB ASC 810-10 requires
an ongoing reassessment of whether a company is the primary beneficiary of a
variable interest entity. FASB ASC 810-10 also requires additional disclosures
about a company's involvement in variable interest entities and any significant
changes in risk exposure due to that involvement. FASB ASC 810-10 is effective
for fiscal years beginning after November 15, 2009. The adoption of FASB ASC
810-10 did not have an impact on the Company's financial condition, results of
operations or cash flows.
In June
2009, the FASB issued FASB ASC 105, Generally Accepted Accounting Principles,
which establishes the FASB Accounting Standards Codification as the sole source
of authoritative generally accepted accounting principles. Pursuant to the
provisions of FASB ASC 105, we have updated references to GAAP in our financial
statements. The adoption of FASB ASC 105 did not impact the Company's financial
position or results of operations.
(2) Development Stage Activities and
Going Concern
The
Company is currently in the development stage, and has no operations. The
business plan of the Company is to develop a commercial application of the
design in a patent of an “Solar element and method of manufacturing the same”.
The Company also intends to produce a prototype, and manufacture and market the
product and/or seek third party entities interested in licensing the rights to
manufacture and market the device.
On March
10, 2010, the Company entered into a Patent Sale Agreement whereby the Company
acquired all of the rights, title and interest in the patent known as the “Solar
element and method of manufacturing the same”. In consideration of the sale the
Company agrees to pay to seller a sum equal to 10% of the royalties that the
Company will receive in relation to the patent for an indefinite period. The
Israeli Patent number is 198369.
The
Company has commenced a capital formation activity by filing a Registration
Statement on Form S-1 to the SEC to register and sell in a self-directed
offering 2,500,000 shares of newly issued common stock at an offering price of
$0.03 per share for proceeds of up to $75,000. As of September 30, 2010, the
Company accrued $25,000 of deferred offering costs related to this capital
formation activity.
The
accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America, which
contemplate continuation of the Company as a going concern. The Company has not
established any source of revenue to cover its operating costs, and as such, has
incurred an operating loss since inception. Further, as of September 30, 2010,
the cash resources of the Company were insufficient to meet its current business
plan, and the Company had negative working capital. These and other factors
raise substantial doubt about the Company’s ability to continue as a going
concern. The accompanying financial statements do not include any adjustments to
reflect the possible future effects on the recoverability and classification of
assets or the amounts and classification of liabilities that may result from the
possible inability of the Company to continue as a going
concern.
F-9
(3) Patent
On March
10, 2010, the Company entered into a Patent Sale Agreement whereby the Company
acquired all of the rights, title and interest in the patent application known
as the “Solar element and method of manufacturing the same”. In consideration of
the sale the Company agrees to pay to seller a sum equal to 10% of the royalties
that the Company will receive in relation to the patent application for an
indefinite period.
(4) Loans from Related Parties -
Directors and Stockholders
As of
September 30, 2010, loans from related parties amounted to $29,915 and
represented working capital advances from Directors who are also stockholders of
the Company. The loans are unsecured, non-interest bearing, and due on
demand.
(5) Common Stock
On
February 24, 2010, the Company issued 2,340,000 shares of its common stock to
individuals who are Directors and officers of the company for $234 subscriptions
receivable.
On
February 24, 2010, the Company issued 660,000 shares of its common stock to
individuals who are founders of the company for $66 subscriptions
receivable.
The
Company has commenced a capital formation activity by filing a Registration
Statement on Form S-1 to the SEC to register and sell in a self-directed
offering 2,500,000 shares of newly issued common stock at an offering price of
$0.03 per share for proceeds of up to $75,000. As of September 30, 2010, the
Company accrued $25,000 of deferred offering costs related to this capital
formation activity.
(6) Income Taxes
The
provision (benefit) for income taxes for the period ended September 30, 2010,
was as follows (assuming a 23% effective tax rate):
Current
Tax Provision:
|
||||
Federal-
|
||||
Taxable
income
|
$ | - | ||
Total
current tax provision
|
$ | - | ||
Deferred
Tax Provision:
|
||||
Federal-
|
||||
Loss
carryforwards
|
$ | 4,481 | ||
Change
in valuation allowance
|
(4,481 | ) | ||
Total
deferred tax provision
|
$ | - |
The
Company had deferred income tax assets as of September 30, 2010, as
follows:
Loss
carryforwards
|
$ | 4,481 | ||
Less
- Valuation allowance
|
(4,481 | ) | ||
Total
net deferred tax assets
|
$ | - |
F-10
The
Company provided a valuation allowance equal to the deferred income tax assets
for the period ended September 30, 2010, because it is not presently known
whether future taxable income will be sufficient to utilize the loss
carryforwards.
As of
September 30, 2010, the Company had approximately $11,981 in tax loss
carryforwards that can be utilized in future periods to reduce taxable income,
and expire by the year 2030.
(7) Related Party
Transactions
As
described in Note 4, as of September 30, 2010, the Company owed $29,915 to
Directors, officers, and principal stockholders of the Company for working
capital loans.
As
described in Note 5, on February 24, 2010, the Company issued 2,340,000 shares
of its common stock to Directors and officers for $234 subscriptions
receivable.
(8)
Commitments
On March
10, 2010, the Company entered into a Patent Sale Agreement whereby the Company
acquired all of the rights, title and interest in the patent known as the “Solar
element and method of manufacturing the same”. In consideration of the sale the
Company agrees to pay to seller a sum equal to 10% of the royalties that the
Company will receive in relation to the patent for an indefinite
period.
F-11
PART
II
Information
Not Required in Prospectus
Item
24. Indemnification of Directors and Officers
Our
Certificate of Incorporation, as amended, provides that, to the fullest extent
permitted by Delaware law, our Directors or officers shall not be personally
liable to us or our stockholders for damages for breach of their fiduciary duty.
The effect of this provision of our Articles of Incorporation, as amended, is to
eliminate our right and the right of our stockholders (through stockholders'
derivative suits on behalf of our Company) to recover damages against a Director
or officer for breach of the fiduciary duty of care as a Director or officer
(including breaches resulting from negligent or grossly negligent behavior),
except under certain situations defined by statute. We believe that the
indemnification provisions in our Certificate of Incorporation, as amended, are
necessary to attract and retain qualified persons as Directors and
officers.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to Directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a Director, officer, or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
Director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
Item
25. Other Expenses of Issuance and Distribution
The
following table sets forth an itemization of all estimated expenses, all of
which we will pay, in connection with the issuance and distribution of the
securities being registered:
Nature of Expense
|
Amount
|
|||
SEC
Registration fee
|
$
|
6
|
||
Transfer
Agent Fees (Estimated)
|
$
|
1,500
|
||
Accounting
fees and expenses (recorded in the FS)
|
$
|
10,000
|
||
Legal
fees and expenses (recorded in the FS)
|
$
|
15,000
|
||
Total:
|
$
|
26,506
|
Item
26. Recent Sales of Unregistered Securities
The
following sets forth information regarding all sales of our unregistered
securities during the past three years. None of the holders of the shares issued
below has subsequently transferred or disposed of his shares and the list is
also a current listing of the Company's stockholders.
On
February 24, 2010, we issued a total of 3,000,000 shares of our common stock to
five individuals, including to our Principal Executive Officer and Director, our
Director, and our Treasurer and Chief Financial Officer (CFO) and Secretary. The
purchase price for such shares was equal to their par value, $0.0001 per share,
amounting in the aggregate for all 3,000,000 shares to $300. None of these
transactions involved any underwriters, underwriting discounts or commissions or
any public offering, and we believe these issuances were exempt under Regulation
S of the Securities Act. No advertising or general solicitation was employed in
offering the securities. The offering and sale were made in an offshore
transaction and only to the following individuals who are all non-U.S. citizens,
all in accordance with the requirements of Regulation S of the Securities
Act.
II-1
Item
27. Undertakings
The
undersigned Registrant hereby undertakes to:
(a)(1)
File, during any period in which it offers or sells securities, a post-effective
amendment to this registration statement to:
(i)
Include any prospectus required by Section 10(a)(3) of the Securities
Act;
(ii)
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) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii)
Include any additional or changed material information on the plan of
distribution.
(2) For
determining liability under the Securities Act, each post-effective amendment
shall be deemed to be a new registration statement of the securities offered,
and the offering of the securities at that time shall be deemed to be the
initial bona fide offering.
(3) File
a post-effective amendment to remove from registration any of the securities
that remain unsold at the end of the offering.
(4) For
determining liability of the undersigned Registrant under the Securities Act to
any purchaser in the initial distribution of the securities, the undersigned
Registrant undertakes that in a primary offering of securities of the
undersigned Registrant pursuant to this registration statement, regardless of
the underwriting method used to sell the securities to the purchaser, if the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned Registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such
purchaser:
(i) Any
preliminary prospectus or prospectus of the undersigned Registrant relating to
the offering required to be filed pursuant to Rule 424;
(ii) Any
free writing prospectus relating to the offering prepared by or on behalf of the
undersigned Registrant or used or referred to by the undersigned
Registrant;
(iii) The
portion of any other free writing prospectus relating to the offering containing
material information about the undersigned Registrant or its securities provided
by or on behalf of the undersigned Registrant; and
(iv) Any
other communication that is an offer in the offering made by the undersigned
Registrant to the purchaser.
(b)
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") 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.
II-2
(c)
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a Director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such Director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.
(d) That,
for the purpose of determining liability under the Securities Act to any
purchaser, each prospectus filed pursuant to Rule 424(b) as part of a
registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectuses filed in reliance on
Rule 430A, shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness; provided,
however, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such first use, supersede or modify any statement
that was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to such
date of first use.
II-3
Signatures
In
accordance with the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements of filing this Amendment No. 1 to Form S-1 and authorizes this
registration statement to be signed on its behalf by the undersigned, in Ramat
Gan, Israel.
Solarflex
Corp.
|
||
Date
November 22, 2010
|
By:
|
/s/ Sergei Rogov
|
Sergei
Rogov
|
||
President
(Principal Executive
Officer)
|
In
accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated.
Name
|
Title
|
Date
|
||
/s/ Sergei Rogov
|
President
and Director (Principal
|
November
22, 2010
|
||
Sergei
Rogov
|
Executive
Officer)
|
|||
/s/Vigars Kaktinieks
|
Director
|
November
22, 2010
|
||
Vigars
Kaktinieks
|
||||
/s/Jonathan
Berezovsky
|
Secretary
Treasurer and CFO (and Principal
|
|||
Jonathan
Berezovsky
|
Accounting
Officer)
|
November
22, 2010
|
II-4
Exhibit
Table
EXHIBIT
|
||
NUMBER
|
DESCRIPTION
|
|
3.1*
|
Certificate
of Incorporation of the Company
|
|
|
||
3.2*
|
By-Laws
of the Company
|
|
|
||
3.3*
|
Common
Stock Certificate of the Company
|
|
|
||
5.1*
|
Opinion
of Legal Counsel
|
|
|
||
10.1*
|
Patent
Sale Agreement dated March 10, 2010
|
|
|
||
23.1
|
Consent
of Weinberg and Baer, LLC.
|
|
|
||
23.2*
|
Consent
of legal counsel (see Exhibit 5.1)
|
|
99.1
|
Subscription
Agreement
|
*Previously
filed.
II-5