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EX-23.1 - EXHIBIT 23.1 - Genufood Energy Enzymes Corp.consentofindependentregister.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1/A

 

Amendment No.  5   

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

GENUFOOD ENERGY ENZYMES CORP.
(Exact name of registrant as specified in its charter)

Nevada

2833

68-0681158

(State or jurisdiction of incorporation
or organization)

Primary Standard Industrial
Classification Code Number

IRSEmployer
Identification Number

 

Two Allen Center

1200 Smith Street, Suite 1600

Houston, TX, 77002

Telephone: (713) 353-8834  Facsimile: (713) 353-4601
(Address and telephone number of principal executive offices)

 

Incsmart.biz, Inc.
4421 Edward Avenue
Las Vegas, Nevada 89108
Telephone: (702) 403-8432

(Name, address and telephone number of agent for service)

 

with a copy to:

 

Dean Law Corp.

601 Union Street, Suite 4200

Seattle, Washington 98101

Telephone:(206) 274-4598  Facsimile:  (206) 493-2777

 

Approximate date of proposed sale to the public:

as soon as practicable after the effective date of this Registration Statement. 

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box |X|

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, 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, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  |__|

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definitions 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 |

 

(Do not check if a smaller reporting company)

 

                
             

 


CALCULATION OF REGISTRATION FEE

TITLE OF EACH
CLASS OF
SECURITIES
TO BE
REGISTERED




AMOUNT TO BEREGISTERED

PROPOSED
MAXIMUM
OFFERING
PRICE PER
SHARE

PROPOSED
MAXIMUM
AGGREGATE
OFFERING
PRICE



AMOUNT OF
REGISTRATION
FEE (1)

Common Stock

888,472

$0.30 per share

$266,541.60

$30.95

Common Stock

10,000,000 (2)

$0.30 per share

$3,000,000

$348.30

TOTAL

10,888,472

$0.30 per share

$3,266,541.60

$379.25

 

           1.                  Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457 under the Securities Act.

           2.                  Being sold in a Direct Public Offering.

 

 

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY DETERMINE.

 

The information in this prospectus is not complete and may be changed.  The selling stockholders 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 is not soliciting an offer to buy these securities in any state or other jurisdiction where the offer or sale is not permitted.

 

SUBJECT TO COMPLETION, Dated January___, 2012

2                

             




PROSPECTUS

 

GENUFOOD ENERGY ENZYMES CORP.

 

10,888,472 SHARES
COMMON STOCK

 

The selling shareholders named in this prospectus are offering  888,472 shares of common stock and we are offering 10,000,000 shares of common stock on our own account through this prospectus for a period of one hundred and eighty (180) days from the effective date of this prospectus, unless extended by our board of directors for an additional 90 days.

Our common stock is presently not traded on any market or securities exchange.

----------------

THE PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH DEGREE OF RISK.  See section entitled "Risk Factors" on pages 7 to 10 of this prospectus.

The information in this prospectus is not complete and may be changed.  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 selling shareholders will sell our shares at $0.30 per share until our shares are quoted on the OTC Bulletin Board, and thereafter at prevailing market prices or privately negotiated prices. The offering price has been arbitrarily determined by us and does not necessarily bear any relationship to assets, earnings, book value or any other objective criteria of value. 

There is no assurance of when, if ever, our stock will be listed on an exchange.
  We are offering up to 10,000,000 shares of our common stock in a direct public offering, on a self-underwritten, best efforts basis, which means that our officer and directors will attempt to sell the shares, without any involvement of underwriters or broker-dealers.  This prospectus will permit our officer and directors   to sell the shares directly to the public, with no commission or other remuneration payable to themfor any shares that theymay sell.  Our officer and directors will sell the shares and intends to offer them to friends, family members and business acquaintances.  In offering the securities on our behalf, theywill rely on the safe harbor from broker-dealer registration set out in Rule 3a4-1 under the Securities and Exchange Act of 1934.  The intended methods of communication include, without limitations, telephone and personal contact.  For more information, see the section of this prospectus entitled "Plan of Distribution”.  The shares will be offered at a fixed price of $0.30 per share for a period of one hundred and eighty (180) days from the effective date of this prospectus, unless extended by our board of directors for an additional 90 days.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus.  Any representation to the contrary is a criminal offense.


----------------

The Date of This Prospectus Is:  Janaury ___, 2012



3                

             


 

Table of Contents

 

 

PAGE 

Summary

5

Risk Factors

8

Forward-Looking Statements

13

Use of Proceeds

13

Determination of Offering Price

14

Dilution

15

Selling Shareholders

17

Plan of Distribution

18

Description of Securities

21

Interest of Named Experts and Counsel

22

Description of Business

22

Legal Proceedings

41

Market for Common Equity and Related Stockholder Matters

41

Plan of Operations

42

Changes in and Disagreements with Accountants

45

Available Information

45

Directors, Executive Officers, Promoters and Control Persons

46

Executive Compensation

48

Security Ownership of Certain Beneficial Owners and Management

49

Certain Relationships and Related Transactions

50

Disclosure of Commission Position of Indemnification for Securities Act Liabilities

51

Financial Statements

52


4                

             

Summary

Prospective investors are urged to read this prospectus in its entirety.

 

We are a development stage company.  From inception to  September  30, 2011, we have earned revenues of $120,558 from the sale of some of our products .  We have minimal assets, and have incurred losses since inception.

 

We are a marketing, distribution and export company specialized in enzyme products for human and animal consumption.  Enzyme is a catalyst responsible for biochemical reactions in living things (including animals, plants, microorganisms), synthesis, decomposition, oxidation, transfer and isomerization.  Isomerization is the chemical process by which one molecule is transferred into another molecule which has exactly the same atoms, but the atoms are rearranged. The biotic phenomena would stop without enzymes, or the lack of it, or with its destruction.  DNA would undergo a drastic change, unusual illness would occur and metabolism would become abnormal, among others.  Thus, we can conclude that “Biotic phenomena are testimonies of enzyme’s activities.”  Enzyme is actually a complex globule protein.  It reacts optimally under body temperature.  Reaction is many times faster with added enzymes.  Therefore, regular consumption of enzyme does good to our well-being.  In fact it has been categorized under “GRAS” (Generally Regarded As Safe) by the Food and Drug Administration.  Our body loses enzymes as we grow old.  It has been proven that many chronic, hereditary diseases and functional imbalance are caused by the deficiency of certain enzymes, for example, lipase (fat enzyme) deficiency causes hepatic diseases, diabetes and Vitamin A deficiency.  Amylase (carbohydrate enzyme) deficiency results in liver diseases and gastro enteric diseases.  Enzyme is neither a drug, medicine nor a herb.  It is extracted from fruits and vegetables.  It can be a natural complex enzyme, plant-based complex enzyme or microbial enzyme.  It is for the body cell.  It is the “Cell Activator.”  A Cell Activator refers to the enzymes that catalyze and regulate every biochemical reaction that occurs within the human body, making them essential to cellular function and health. Human beings and animal will die without enzyme.  We have recently begun to market and export a limited number of our enzyme products. We believe that we will be able to  successfully commence full  operations within the next 12 months as we already have key agreements in place withmanufacturersof our enzymeproducts, a Country Sole Distributor for Taiwan,  as well as sufficient cash resources to begin operations(we had approximately  $  494,606 in our bank accounts as of January 4, 2012 ).  Our initial target market is Asia, which includes: Taiwan, China, Hong Kong, Macau, Singapore, Malaysia, Thailand and Sri Lanka.  Our goal is to appoint a Country Sole Distributor in each country, each distributing our enzyme products for human consumption, animal consumption and special outlet category

 

We have minimal revenues, have achieved significant losses since inception, have had only limited operations and have been issued a going concern opinion by our auditors.  To date, we have entered into agreements with the following parties:        

             
  •       On July 1, 2010, we entered into a Sole Export Marketing Agent Agreement with Origo Biochemical Technologies Inc. to represent them and to market their enzyme products to Thailand.  These enzyme products are for human consumption.  On February 16, 2011  we provided Origo with a notice of termination for our agreement due to breach of contract, and as such have terminated our relationship with them.   Two of our former directors, Mr. Chen Yi Chou and Mr. Chen I Jen, are brothers, and are the sons of the Madam Wang Feng Peng, the President of Origo, and Mr. Chen I Jen is the general manager of Origo.
     
  •       On July 6, 2010, we entered into an Agreement with Access Finance and Securities (NZ) Limited (the “Advisor”) to provide Manager Consulting Service.  The Advisor will assist us in going public in the US and also seeking a listing on the OTCBB.  As part of this process, the Advisor will source, select and recommend the appointment of various experienced and qualified professionals to participate in the process and coordinate the flow of work therefrom.  In addition, the Advisor will prepare or make available a Business Plan and to participate with us in the determination of a public listing strategy, and will provide such services until our Registration Statement is declared effective by the US Securities and Exchange Commission (SEC) and it is granted a trading symbol by FINRA.  In consideration of these services provided by the Advisor, we have agreed to pay a total fee of US $500,000, to be payable in cash of US $300,000 and the balance by way of issuance of our common shares at a price of $0.001 per share.
  •       On July 26, 2011, we reached an understanding with an enzyme manufacturer,  Specialty Enzymes and Biochemicals Co, of Chino, California, to become our OEM Manufacture or Contract Manufacturer of a range of enzyme products for both Human and Animal Consumption under our private label – ProCellax and ProAnilax.  Shipment and delivery will be provided by their associated company, AST Enzymes.  While these products are formulated for our marketing and distribution, they will assure us of their quality assurance, good manufacturing practice, provide us with full technical support including the provision of product information, ingredients and specification, third party source and laboratory testing facilities as may be required from time to time.  This covers the provision of information for Product Registration with relevant Health Authority and Agriculture Authority in the target markets we intend to market and distribute ProCellax and ProAnilax.  Halal Certification of the ProCellax is included.  To-date we have placed three purchase orders with AST Enzymes with a total value of US $94,438.10 of which US $68,748.70 has been shipped and delivered.  We believe that more inventory will be required within the next twelve months following the completion of Product Registration in the target markets of which we expect to order about US $500,000.00 worth of inventory.
  •       On September 21, 2010, we entered into an OEM Manufacturing Agreement with Origo Biochemical Technologies Inc. for contract manufacturing of enzyme products for human and animal consumption under our private label.  The brand name for the OEM Enzyme Products for human consumption is Cellax-NCE, Cellax-NCE Plus, Cellax-GFL, Cellax-GFL Plus, Cellax-TT and Cellax-TT Plus.  They come in powder form as well as in capsules.  For animal consumption, the brand name is Anilax-Super.  For human consumption, enzyme products cater hospitals, medical centers, clinics, pharmacies and drug stores which are classified as Special Outlet, the brand name is Medilax, and Armilax the brand name for the enzyme products supplying to armed forces and the police forces.  These brand names belong to us.  On February 16, 2011  we provided Origo with a notice of termination for our agreement due to breach of contract, and as such have terminated our relationship with them.
  •       On September 21, 2010, we entered into an Agreement with Access Management Consulting and Marketing Pte Ltd, Singapore (the “Marketing Agent”) appointing the Marketing Agent as our Sole Marketing Agent for the sourcing, selection and interviewing of suitable parties, to be our Sole Country Distributors for the promotion, marketing and distribution of ProCellax and ProAnilax range of enzyme products, both for Human and Animal Consumption throughout the world at large.  As the Sole Marketing Agent, they also participate in the formulation and determination of marketing strategies, the market plan and segmentation, advising on sales advertising and promotion plans, market research and innovation of suitable multi-level marketing scheme such as the Multi-Level Marketing – Franchised Dealer Investor Related (MLM-FDIR), and the recommendation of annual purchase quota of the Sole Country Distributors.  The contract is for a period of five years with an option to renew for an additional five years at the discretion of the Sole Marketing Agent.  In consideration of the services provided by the Sole Marketing Agent, we have agreed to remunerate them on a sale commission basis of twenty percent (20%) on every purchase order placed and paid by the Sole Country Distributors.  There will be no sale commission payable if there are no orders placed and paid by the Sole Country Distributors.  The concept has proved significantly beneficial and advantageous to us in that we have saved upfront financing in the start-up marketing operations cost, thus enjoying the specialization of labor and trade.  To-date, we have Taiwan Cell Energy Enzymes Corp (TCEEC) as our Sole Country Distributor for ProCellax range of enzyme products for the Territory of Taiwan (Republic of China) in which their first paid order amounts to US $181,150, with goods to be shipped to them sometime in September 2011 .  TCEEC’s annual purchase quota is US $2 million.  Potential Sole Country Distributors have been interviewed for the Territories of Singapore, Malaysia and Sri Lanka and barring any unforeseen circumstances, closing is expected to be completed on or before June 30, 2012.
  •       On October 11, 2010, we entered into a Sole Distributorship Agreement (General Outlet-Human Consumption) and Private Placement with Taiwan Cell Energy Enzymes Corporation for marketing and distribution of our range of enzyme products in the Republic of China (Taiwan).
  •       On October 11, 2010, we entered into an agreement to appoint Taiwan Cell Energy Enzymes Corp. (“TCEEC”) to be our ProCellax Sole Country Distributor (Human Consumption) for the territory of Taiwan, Republic of China.  This is the first target market we intend to start exporting range of enzyme products.  On the same day, TCEEC placed their first order worth $181,158. On November 16, 2010, we received from TCEEC the required 30% deposit of $54,348.  We commenced graphic label design work, GS1 bar code licensing, product registration, and communicating with the two OEM manufacturers, Origo and Specialty Enzymes Biochemical (“SEB”) for product samples and to initiate a trial production run.
  •       On January 1, 2011, we received the final balance payment of $126,810 from TCEEC in respect to their first order.  On January 4, 2011, we placed a confirmed purchase order of $105,600 with Origo and on January 10, 2011, we placed a confirmed purchase order of $66,966 with SEB.  Unfortunately, Origo could not perform on their obligations and therefore, on February 16, 2011, we issue a termination notice to them, ending the September 1, 2010 Agreement we had with them.
     
  •       On March 31, 2011, we submitted documents and samples of ProCellax to the Taiwan Ministry of Health (TMOH) for Product Registration.

 

5                

             

 
       

As of  January 4, 2012 , we have total cash on hand of $ 494,606 in our bank accounts.  We may need to raise additional funds through public or private debt or sale of equity to achieve our current business strategy.  The financing we need may not be available when needed.  Even if financing is available, it may be on terms that we deem unacceptable or are materially adverse to your interests with respect to dilution of book value, dividend preferences, liquidation preferences or other terms.  Our inability to obtain financing will inhibit to implement our development strategy, which could require us to diminish or suspend our operations and possibly cease our operations.

We were incorporated on June 21, 2010 under the laws of the state of Nevada.  Our principal office is located at Two Allen Center, 1200 Smith Street, Suite 1600, Houston, Texas 77002.  Our telephone number is (713) 353-8834.

 


  

 The Offering

 

Securities Being Offered

Up to 10,888,472 shares of common stock. 

Offering Price

The selling shareholders will sell our shares at $0.30 per share until our shares are quoted on the OTC Bulletin Board, and thereafter at prevailing market prices or privately negotiated prices.  The offering price has been arbitrarily determined by us and does not necessarily bear any relationship to assets, earnings, book value or any other objective criteria of value. We determined the offering price by considering, among other factors, a business valuation that was conducted by our management. There is no assurance of when, if ever, our stock will be listed on the OTCBB or another exchange.

Terms of the Offering

The selling shareholders will determine when and how they will sell the common stock offered in this prospectus. In addition, we are offering up to 10,000,000 shares of our common stock in a direct public offering, on a self-underwritten, best efforts basis, which means that our officer and directors will attempt to sell the shares, without any involvement of underwriters or broker-dealers.

Termination of the Offering

The offering will conclude when all of the  10,888,472 shares of common stock that are being offered by us  and the selling shareholders have been sold, or we decide at any time to terminate the registration of the shares at our sole discretion.  In any event, the offering shall be terminated no later than  one hundred and eighty (180) days from the effective date of this prospectus, unless extended by our board of directors for an additional 90 days.  

Securities Issued And to be Issued

383,308,472 shares of our common stock are issued and outstanding as of the date of this prospectus.  888,472 shares of common stock to be sold under this prospectus will be sold by existing shareholdersIn addition, we are offering up to 10,000,000 in a direct public offering

 

Use of Proceeds

We will not receive any proceeds from the sale of the common stock by the selling shareholders.  However, we will receive proceeds from the shares of our common stock that we sell we sell pursuant to our Direct Public Offering.  See “Use of Proceeds.”

Market for the common stock

There has been no 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 FINRA for our common stock to become eligible for quotation on the Over-the-Counter 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.


 

6                

             

 

Summary Financial Information (unaudited) 

The following financial information summarizes the more complete historical financial information at the end of this prospectus.

 

 

September 30, 2011

 

As of September 30, 2010

Balance Sheet 

 

 

 

 

Total Assets                                                                               

$

599,332

45,115

Total Liabilities 

$

83,442

309,561

Stockholders’ Equity (Deficit) 

$

515,890

(264,446)

 

For the year ended September 30, 2011

 

 

Period from June 21, 2010

(date of inception) to

September 30, 2011

Income Statement 

 

 

 

 

Revenue 

$

120,558

120,558

Total Cost of Goods Sold

$

368,372      

368,372

Total Operating Expenses 

$

257,139

281,086

Net Loss 

$

(504,381)

(528,327)

 

 

Risk Factors

An investment in our common stock involves a high degree of risk.  You should carefully consider the risks described below and the other information in this prospectus before investing in our common stock.  If any of the following risks occur, our business, operating results and financial condition could be seriously harmed.  The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment.

RISKS RELATED TO OUR BUSINESS

 

 

IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL.

 

Our business plan calls for ongoing expenses in connection with the marketing and development of enzyme products.  We have  generated revenues of $120,558 from our inception to  September 30, 2011.  


While at   September 30 , 2011 , we had cash on hand of  $ 543,764 we have accumulated a of  $ 257,139 in business development and administrative expenses.  At this rate, we anticipate that additional funding will be needed for general administrative expenses and marketing costs.


7                

             

 

In order to expand our business operations, we anticipate that we will have to raise additional funding.  If we are not able to raise the capital necessary to fund our business expansion objectives, we may have to delay the implementation of our business plan.

 

We do not currently have any arrangements for financing.  Obtaining additional funding will be subject to a number of factors, including general market conditions, investor acceptance of our business plan and initial results from our business operations.  These factors may impact the timing, amount, terms or conditions of additional financing available to us.  The most likely source of future funds available to us is through the sale of additional shares of common stock or advances from our sole director.

 

WE ONLY HAVE LIMITED OPERATIONS AND WE HAVE NOT GENERATED SIGNIFICANT REVENUES OR PROFIT TO DATE.  THERE IS NO ASSURANCE OUR FUTURE OPERATIONS WILL RESULT IN PROFITABLE REVENUES.  IF WE CANNOT GENERATE SUFFICIENT REVENUES TO OPERATE PROFITABLY, WE MAY HAVE TO CEASE OPERATIONS

We were incorporated on June 21, 2010.  We have just started our proposed business operations and have only realized minimal revenues.  We  only  have  limited operations upon which an evaluation of our future success or failure can be made.  Our ability to achieve and maintain profitability and positive cash flow is dependent upon our ability to earn profit by developing and marketing enzyme products.  We cannot guarantee that we will be successful in generating significant revenues and profit in the future.  Failure to generate significant revenues and profit will cause us to suspend or cease operations.

 

BECAUSE OUR AUDITORS HAVE ISSUED A GOING CONCERN OPINION, THERE IS SUBSTANTIAL UNCERTAINTY THAT WE WILL CONTINUE OPERATIONS IN WHICH CASE YOU COULD LOSE YOUR INVESTMENT.

 Our auditors have issued a going concern opinionThis means that there is substantial doubt that we can continue as an ongoing business for the next twelve monthsThe financial statements do not include any adjustments that might result from the uncertainty about our ability to continue in businessAs such we may have to cease operations and you could lose your investment.

 

THERE IS NO MINIMUM OFFERING AND THEREFORE YOUR INVESTMENT MAY BE USED EVEN THOUGH SUCH INVESTMENT WILL NOT SATISFY OUR CAPITAL REQUIREMENTS TO COMPLETE ANY PROJECT.

 Our directors have not specified a minimum offering amount and there in no escrow account in operation. Because there is no escrow account and no minimum offering amount, investors could be in a position where they have invested in our company, but we are unable to fulfill our objectives or proceed with our operations due to a lack of interest in this offering. If this were to occur, we might be forced to curtail or abandon our operations with a loss to investors who purchase stock under this Prospectus.

 

If Yi Lung Lin, our sole officer, should resign or die, we will not have a chief executive officer.  thIS could result in our operations suspending, AND you could lose your investment.

We depend on the services of our sole officer and director, Yi Lung Lin, for the future success of our business.  The loss of the services of Mr. Lin could have an adverse effect on our business, financial condition and results of operations.  If he should resign or die we will not have a chief executive officer.  If that should occur, until we find another person to act as our chief executive officer, our operations could be suspended.  In that event it is possible you could lose your entire investment.  We do not carry any key personnel life insurance policies on Mr. Lin and we do not have a contract for his services. 

 

8                

             

 

 

WE MAY HAVE DIFFICULTY ATTRACTING AND RETAINING SKILLED PERSONNEL.  OUR FAILURE TO DO SO COULD CAUSE US TO GO OUT OF BUSINESS.

 

Our future success will depend in large part on our ability to attract and retain highly skilled management, sales, marketing, and finance and product development personnel.  Competition for such personnel is intense, and there can be no assurance that we will be successful in attracting or retaining such personnel.  Failure to attract and retain such personnel could have a material adverse effect on our operations and financial condition or cause us to go out of business.

 

 

WE WILL NEED SIGNIFICANT CAPITAL REQUIREMENTS TO CARRY OUT OUR BUSINESS PLAN, AND WE WILL NOT BE ABLE TO FURTHER IMPLEMENT OUR BUSINESS STRATEGY UNLESS SUFFICIENT FUNDS ARE RAISED, WHICH COULD CAUSE US TO DISCONTINUE OUR OPERATIONS.

 

We will require significant expenditures of capital in order to acquire and develop our planned operations.  We plan to obtain the necessary funds through private equity offerings.  We may not be able to raise sufficient amounts from our planned sources.  In addition, if we drastically underestimate the total amount needed to fully implement our business plan, our ability to continue our business will be adversely affected.

 

Our ability to obtain additional financing is subject to a number of factors, including market conditions, investor acceptance of our business plan, and investor sentiment.  These factors may make the timing, amount, terms and conditions of additional financing unattractive or unavailable to us.  If we are unable to raise additional financing, we will have to significantly reduce our spending, delay or cancel planned activities or substantially change our current corporate structure.  In such an event, we intend to implement expense reduction plans in a timely manner.  However, these actions would have material adverse effects on our business, revenues, operating results and prospects, resulting in a possible failure of our business.

 

 

WE MAY BE SUSCEPTIBLE TO AN ADVERSE EFFECT ON OUR BUSINESS DUE TO THE CURRENT WORLDWIDE ECONOMIC CRISIS

 

Our market and sales results could be greatly impacted by the current worldwide economic crisis, making it difficult to reach sales goals and thus generate significant revenue.

 

 

WE HAVE NO EXPERIENCE AS A PUBLIC COMPANY.  OUR INABILITY TO SUCCESSFULLY OPERATE AS A PUBLIC COMPANY COULD CAUSE YOU TO LOSE YOUR ENTIRE INVESTMENT.

 

We have never operated as a public company.  We have no experience in complying with the various rules and regulations, which are required of a public company.  As a result, we may not be able to operate successfully as a public company, even if our operations are successful.  We plan to comply with all of the various rules and regulations, which are required of a public company.  However, if we cannot operate successfully as a public company, your investment may be materially adversely affected.  Our inability to operate as a public company could be the basis of your losing your entire investment.

9               

             

 

WE WILL INCUR INCREASED COSTS AS A RESULT OF BEING A PUBLIC COMPANY

 

Upon completion of this offering, we will become a public company and expect to incur significant legal, accounting and other expenses that we did not incur as a private company.  Moreover, the Sarbanes-Oxley Act of 2002, as well as new rules subsequently implemented by the Securities and Exchange Commission and the Nasdaq Stock Market, has imposed additional requirements on corporate governance practices of public companies.  We expect these new rules and regulations to increase our legal and financial compliance costs and to make some corporate activities more time-consuming and costly, which may have a materially adverse impact on our business.

 

U.S. INVESTORS MAY EXPERIENCE DIFFICULTIES IN ATTEMPTING TO EFFECT SERVICE OF PROCESS AND TO ENFORCE JUDGMENTS BASED UPON U.S. FEDERAL SECURITIES LAWS AGAINST THE COMPANY AND ITS SOLE NON-U.S. RESIDENT OFFICER AND OUR DIRECTORS AND A U.S. OR FOREIGN PLAINTIFF MAY LACK STANDING OR OTHERWISE BE UNABLE TO BRING A LAWSUIT IN A TAIWANESE OR CHINESE COURT, INCLUDING A CASE WHICH IS PREDICATED UPON U.S. SECURITIES LAWS.

 

Our sole officer and all of our directors are not residents of the United States.  Consequently, it may be difficult for investors to effect service of process on Mr. Lin and our other directors in the United States and to enforce judgments obtained in United States courts against Mr. Lin based on the civil liability provisions of the United States securities laws.  Since all our assets are located in Taiwan it may be difficult or impossible for U.S. investors to collect a judgment against us.  As well, any judgment obtained in the United States against us may not be enforceable in the United States.  

 

In addition, a U.S. or foreign plaintiff may lack standing or otherwise be unable to bring a lawsuit in a Taiwanese court, including a case which is predicated upon U.S. securities laws.

 

THE SAFETY AND EFFECTIVENESS OF OUR PRODUCTS IS NOT SUBJECT TO CLINICAL TESTING AND THE VARIOUS GOVERNMENTAL REGULATORY BODIES OVERSEEING THE PROMOTION AND SALE OF OUR PRODUCTS IN OUR TARGET MARKETS HAVE NOT VERIFIED ANY OF THE POSITIVE HEALTH BENEFITS THAT WE ATTRIBUTE TO OUR PRODUCTS, AND THAT ANY CLAIM OF HEALTH BENEFITS THAT WE MAKE WITH RESPECT TO OUR PRODUCTS HAS NOT BEEN INDEPENDENTLY SUBSTANTIATED AND THEREFORE OUR PRODUCTS MAY NOT PRODUCE THE POSITIVE HEALTH BENEFITS THAT WE ASCRIBE TO THEM.

 

The safety and effectiveness of our products is not subject to clinical testing and the various governmental regulatory bodies overseeing the promotion and sale of our products in our target markets have not verified any of the positive health benefits that we attribute to our products, and that any claim of health benefits that we make with respect to our products has not been independently substantiated and therefore our products may not produce the positive health benefits that we ascribe to them.  If our products are deemed not be safe or effective or if our products our clinically tested and found not to provide the health benefits that we ascribe to them, this could have material adverse effects on our business, revenues, operating results and prospects, resulting in a possible failure of our business and the loss of your investment.

 
OUR TWO DIRECTORS HAVE OTHER BUSINESS INTERESTS OFFICERS HAVE OTHER BUSINESS INTERESTS WHICH MAY LIMIT THE AMOUNT OF TIME THEY CAN DEVOTE TO OUR COMPANY AND POTENTIALLY CREATE CONFLICTS OF INTEREST.

Our directors have other business interests in that Mr. Lin Yi Lung is also the Managing Director of Access Finance, Securities (NZ) Limited and Access Management Consulting and Marketing Pte Ltd and Chief Executive Officer for Access Equity Capital Management Corp.  As well, Mr. Chen Wen Hsu is the General Manager of Taiwan Cell Energy Enzymes Corp. . (Taiwan Cell Energy Enzymes Corp.'s main business is to market and distribute ProCellax range of enzyme products in Taiwan acting in the capacity as the Sole Country Distributor.  They are not selling any other enzyme products, and therefore, there is no conflict of interest or competition with our business).  This means that both gentlemen are unable to work full time for our Company.  This might eventually lead to business failure.  Mr. Lin plans to devote 35 hours a week to our business and Mr. Hsu plans to devote 5 hours a week to our affairs which may lead to periodic interruptions of business operations.  Unforeseen events may cause this amount of time to become even less.

10                

             
 

WE ONLY HAVE ONE OFFICER AND TWO DIRECTORS, MESSRS. LIN AND HSU, WHICH MAY LEAD TO FAULTY CORPORATE GOVERNANCE.

We have two directors and one executive officer who make all the decisions regarding corporate governance.  This includes their (executive) compensation, accounting overview, related party transactions and so on.  They will also have full control over matters that require Board of Directors approval.  This may introduce conflicts of interest and prevent the segregation of executive duties from those that require Board of Directors’ approval.  This may lead to ineffective disclosure and accounting controls.  None compliance with laws and regulations may result in fines and penalties.  They would have the ability to take any action as they themselves review them and approve them.  They would exercise control over all matters requiring shareholder approval including significant corporate transactions.  We have not implemented various corporate governance measures nor have we adopted any independent committees as we presently do not have any independent directors. 

OUR SOLE OFFICER AND TWO DIRECTORS MESSRS. LIN AND HSU HAVE ENTERED INTO SEVERAL AGREEMENTS ENCOMPASSING THE MAJORITY OF OUR COMPANY’S OPERATIONS WITH ENTITIES CONTROLLED BY MESSRS. LIN AND HSU.

Our sole officer and two directors Messrs. Lin and Hsu have entered into several agreements encompassing the majority of our company’s operations with entities that they control..   Mr. Lin (through entities that he controls) has entered into the following agreements:  Sole Marketing Agent Agreement dated September 21, 2010; Manager Consulting Service Agreement dated July 6, 2010 and Securities Placement Agent Service Agreement dated July 6, 2010.  Mr. Hsu (through entities that he controls) has entered into the following agreements: Sole Distributorship Agreement (General Outlet - Human Consumption) and Private Placement both dated October 11, 2010.   Because of that, there are no independent directors to approve the terms of the agreements, and that the agreements may not be as favorable to shareholders as agreements that would have been negotiated with non-affiliated entities. No conflicts exist arising from any of the agreements as the nature of the services provided and/or business of these entities is different from our business.

OUR SOLE OFFICER AND TWO DIRECTORS HAVE NO FORMAL TRAINING IN FINANCIAL ACCOUNTING AND THEY ARE NOT CAPABLE OF PREPARING U.S. GAAP FINANCIAL STATEMENTS AND THEREFORE ARE REQUIRED TO HIRE ADDITIONAL EXPERIENCED PERSONNEL TO ASSIST US WITH THE PREPARATION THEREOF.

Because our sole officer and two directors have no formal training in financial accounting or preparing U.S. GAAP Financial Statements, they will be required to hire additional experienced personnel to assist us with the preparation thereof.  In the event that we are unable to engage experienced personnel to prepare the financial statements according to U.S. GAAP, we may not be able to provide effective disclosure and accounting controls to comply with applicable laws and regulations which could result in fines, penalties or assessments against us.

RISKS RELATED TO OUR INDUSTRY

 

CURRENCY EXCHANGE RATE FLUCTUATIONS MAY INCREASE OUR COSTS.

 

The exchange rates between the U.S. dollar and non-U.S. currencies in which we conduct our business have and will likely fluctuate in the future.  Any appreciation in the value of these non-U.S. currencies would result in higher expenses for our company.  We do not have any hedging arrangements to protect against such exchange rate exposures.

 

IMPORT/EXPORT REGULATIONS AND TARIFFS MAY CHANGE AND INCREASE OUR COSTS.

 

We are subject to risks associated with the regulations relating to the export of products. We cannot predict whether the export of our products will be adversely affected by changes in, or enactment of new quotas, duties, taxes or other charges or restrictions imposed by the Asian countries in the future. Any of these factors could have a material adverse effect on our operating costs.

11                

             

 

RISKS RELATED TO OUR OFFERING

 

Our shares of common stock are subject to the “penny stock’ rules of the Securities and Exchange Commission and the trading market in our securities will be limited, which will make transactions in our stock cumbersome and may reduce the value of an investment in our stock.

 

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in "penny stocks.”  Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).  Penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document prepared by the SEC, which specifies information about penny stocks and the nature and significance of risks of the penny stock market.  A broker-dealer must also provide the customer with bid and offer quotations for the penny stock, the compensation of the broker-dealer, and sales person in the transaction, and monthly account statements indicating the market value of each penny stock held in the customer's account.  In addition, the penny stock rules require that, prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction.  These disclosure requirements may have the effect of reducing the trading activity in the secondary market for stock that becomes subject to those penny stock rules.  If a trading market for our common stock develops, our common stock will probably become subject to the penny stock rules, and shareholders may have difficulty in selling their shares.

 

There is no current trading market for our securities and if a trading market does not develop, purchasers of our securities may have difficulty selling their shares.

 

There is currently no established public trading market for our securities and an active trading market in our securities may not develop or, if developed, may not be sustained.  We intend to have a market maker apply for admission to quotation of our securities on the Over-the-Counter Bulletin Board after the Registration Statement relating to this prospectus is declared effective by the SEC.  We do not yet have a market maker who has agreed to file such application.  If for any reason our common stock is not quoted on the Over-the-Counter Bulletin Board or a public trading market does not otherwise develop, purchasers of the share may have difficulty selling their common stock should they desire to do so.  No market makers have committed to becoming market makers for our common stock and none may do so.

 

ANY ADDITIONAL FUNDING WE ARRANGE THROUGH THE SALE OF OUR COMMON STOCK WILL RESULT IN DILUTION TO EXISTING SHAREHOLDERS.

 

We must raise additional capital in order for our business plan to succeed.  Our most likely source of additional capital will be through the sale of additional shares of common stock.  Such stock issuances will cause stockholders' interests in our company to be diluted.  Such dilution will negatively affect the value of investors’ shares.

 

YOUR PERCENTAGE OWNERSHIP IN US MAY BE DILUTED BY FUTURE ISSUANCES OF CAPITAL STOCK, WHICH COULD REDUCE YOUR INFLUENCE OVER MATTERS ON WHICH STOCKHOLDERS VOTE.

 

Our Board of Directors has the authority, without action or vote of our stockholders, to issue all or any part of our authorized but unissued shares of common stock, including shares issuable upon the exercise of options or shares that may be issued to satisfy our payment obligations.  Issuances of additional common stock would reduce your influence over matters on which our stockholders vote. 

12               

             

 

WE DO NOT EXPECT TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE WHICH MAY MAKE IT MORE DIFFICULT FOR YOU TO EARN A RETURN ON YOUR INVESTMENT WITH US.

 

We have never paid any dividends on our common stock.  We do not expect to pay cash dividends on our common stock at any time in the foreseeable future.  The future payment of dividends directly depends upon our future earnings, capital requirements, financial requirements and other factors that our board of directors will consider.  Since we do not anticipate paying cash dividends on our common stock, return on your investment, if any, will depend solely on an increase, if any, in the market value of our common stock.  Therefore, you may have difficulty earning a return on your investment with us.

 

Forward-Looking Statements

 

This prospectus contains forward-looking statements that involve risks and uncertainties.  We use words such as anticipate, believe, plan, expect, future, intend and similar expressions to identify such forward-looking statements.  You should not place too much reliance on these forward-looking statements.  Our actual results are most likely to differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us described in the “Risk Factors” section and elsewhere in this prospectus.

 

Use of Proceeds

 

We will not receive any proceeds from the sale of the common stock offered through this prospectus by the selling shareholders.  However, we will be receiving funds from our direct public offering.  We are offering up to 10,000,000 shares in a direct public offering, withoutthe involvementof underwriters or broker-dealers.  

 

Based on the maximum offering price, we estimate that our net proceeds from the Offering, after deducting commission and other estimated expenses payable in relation to the Offering (estimated to be $ 331,500 ) will be approximately $ 2,668,500 .  We cannot guarantee that we will sell any or all of the shares being offered by us.  This is a best efforts offering with no minimum offering amount.  

 

We intend to use our net proceeds from the Offering for the following purposes:

  • approximately $500,000 for enzyme research and development including the establishment of laboratory research with clinical test facility;
  • approximately $200,000 for the purchase of computers, computer software, office equipment and furniture and fittings; and
  • approximately  $1,968,500 for working capital.

The foregoing represents our best estimate of our allocation of our net proceeds from the Offering based on our current plans and estimates regarding our anticipated expenditures.  Actual expenditures may vary from these estimates, and we may find it necessary or advisable to re-allocate our net proceeds within the categories described above or to use portions of our net proceeds for other purposes. 

 

Pending the use of our net proceeds in the manner described above, we may also use our net proceeds for our working capital, place the funds in fixed deposits with banks and financial institutions or use the funds to invest in short-term money market instruments, as our Directors may deem appropriate in their absolute discretion.

 

We estimate that the expenses of the Offering and the application for listing, including the underwriting fees and selling commission, and all other incidental expenses relating to the Offering, will amount to approximately $ 331,500 .

13             

             

 

Our direct public offering is being made on a self-underwritten basis - with no minimum and a maximum of $3,000,000.  The table below sets forth the use of proceeds if 25%, 50%, 75% or 100% is sold.  

 

 

25%

50%

75%

100%

Gross Proceeds

$750,000

$1,500,000

$2,250,000

$3,000,000

Offering Expenses

$331,500

$331,500

$331,500

$331,500

Net Proceeds

$418,500

$1,168,500

$1,918,500

$2,668,500

The proceeds will be used as follows:

 

 

25%

50%

75%

100%

Enzyme research and development           

$200,000

$300,000

$400,000

$500,000

Purchase of computer, office equipment, furniture & fixtures                       

$50,000

$100,000

$150,000

$200,000

Working Capital

$168,500

$768,500

$1,368,500

$1,968,500

Total

$418,500

$1,168,500

$1,918,500

$2,668,500

 

 

Determination of Offering Price

 

The selling shareholders will sell our shares at $0.30 per share until our shares are quoted on the OTC Bulletin Board, and thereafter at prevailing market prices or privately negotiated prices.  

There is no assurance of when, if ever, our stock will be listed on the OTCBB or another exchange.

 

We will be selling the shares in our direct public offering at $0.30 per share.  There is no established public market for the securities being registered.  As a result, the offering price and other terms and conditions relative to our shares have been arbitrarily determined by us and do not necessarily bear any relationship to assets, earnings, book value or any other objective criteria of value.  In addition, no investment banker, appraiser or other independent, third party has been consulted concerning the offering price for the shares or the fairness of the price used for the shares.  Accordingly, the offering price should not be considered an indication of the actual value of our securities.

 

In determining the initial public offering price of the shares we considered several factors including the following:

·         the risks we face as a business;

·         prevailing market conditions, including the history and prospects for the industry in which we compete;

·         our future prospects; and

·         our capital structure.

The above is an exhaustive list of factors we used to determine our initial public offering price.  Taking into consideration a review of the above factors, our management was of the view that $0.30 per share is a fair valuation of our initial public offering price due to our capital structure, strong financial position, our advanced development of our products as well as our unique position within the enzymes industry.


         


14              

             
 

Dilution

 

Dilution represents the difference between the offering price and the net tangible book value per share immediately after completion of this offering.  Net tangible book value is the amount that results from subtracting total liabilities and intangible assets from total assets.  Dilution arises mainly as a result of our arbitrary determination of the offering price of the shares being offered.  Dilution of the value of the shares you purchase is also a result of the lower book value of the shares held by our existing stockholders.

 

The calculations below are based upon  383,308,472  common shares issued and outstanding and, a net tangible book value of $490,069 or $0.001 per share of common stock as of   September 30, 2011.  


You will suffer substantial dilution in the purchase price of your stock compared to the net tangible book value per share immediately after the purchase.

 

The following assumes the sale of 100% of the shares of common stock in this offering.  After giving effect to the sale of 10,000,000 shares at an offering price of $0.30 per share of common stock our net tangible book value as of the closing of this offering would increase from  $0.001 to $0. 009 per share.  This represents an immediate increase in the net tangible book value of approximately $ 0.008 per share to current shareholders, and immediate dilution of about  $ 0.291 per share to new investors, as illustrated in the following table:

Public offering price per share of common stock

$

$0.300

Net tangible book value per share prior to offering

$

0.001

Increase per share attributable to new investors

$

0.008

Net tangible book value per share after offering

$

0.009

Dilution per share to new investors

$

0.291

Percentage dilution

$

97%

 

 

The following assumes the sale of 75% of the shares of common stock in this offering.  After giving effect to the sale of 7,500,000 shares at an offering price of $0.30 per share of common stock our net tangible book value as of the closing of this offering would increase from  $0.001 to $0.007per share.  This represents an immediate increase in the net tangible book value of approximately  $0.006per share to current shareholders, and immediate dilution of about  $0.293 per share to new investors, as illustrated in the following table:

 

Public offering price per share of common stock

$

0.3000

Net tangible book value per share prior to offering

$

0.001

Increase per share attributable to new investors

$

0.006

Net tangible book value per share after offering

$

0.007

Dilution per share to new investors

$

0.293

Percentage dilution

$

98%

 


15              

             

 

The following assumes the sale of 50% of the shares of common stock in this offering.  After giving effect to the sale of 5,000,000 shares at an offering price of $0.30 per share of common stock our net tangible book value as of the closing of this offering would increase from $0.001 to $0.005 per share.  This represents an immediate increase in the net tangible book value of approximately $0.004 per share to current shareholders, and immediate dilution of about $0.295 per share to new investors, as illustrated in the following table:

 

Public offering price per share of common stock

$

0.300

Net tangible book value per share prior to offering

$

0.001

Increase per share attributable to new investors

$

0.004

Net tangible book value per share after offering

$

0.005

Dilution per share to new investors

$

0.295

Percentage dilution

$

98%

 

 

The following assumes the sale of 25% of the shares of common stock in this offering.  After giving effect to the sale of 2,500,000 shares at an offering price of $0.30 per share of common stock our net tangible book value as of the closing of this offering would increase from $0.001 to $0.003 per share.  This represents an immediate increase in the net tangible book value of approximately $0.002 per share to current shareholders, and immediate dilution of about $0.297 per share to new investors, as illustrated in the following table:

 

Public offering price per share of common stock

$

0.300

Net tangible book value per share prior to offering

$

0.001

Increase per share attributable to new investors

$

0.002

Net tangible book value per share after offering

$

0.003

Dilution per share to new investors

$

0.297

Percentage dilution

$

99%

 

 

16             

             

 

 

Selling Shareholders

 

The selling shareholders named in this prospectus are offering all of the 888,472shares of common stock offered through this prospectus, not including our direct public offering.  These shares were acquired from us in private placements that were exempt from registration provided under Regulation S of the Securities Act of 1933.  Our reliance upon the exemption under Rule 903 of Regulation S of the Securities Act was based on the fact that the sale of the securities was completed in an "offshore transaction,” as defined in Rule 902(h) of Regulation S.  We did not engage in any directed selling efforts, as defined in Regulation S, in the United States in connection with the sale of the securities.  Each investor was not a US person, as defined in Regulation S, and was not acquiring the securities for the account or benefit of a US person.

The following table provides as of the date of this prospectus, information regarding the beneficial ownership of our common stock held by each of the selling shareholders, including:

-          the number of shares owned by each prior to this offering;

-          the total number of shares that are to be offered for each;

-          the total number of shares that will be owned by each upon completion of the offering; and

-          the percentage owned by each upon completion of the offering.

Name Of Selling Shareholder

Shares Owned Prior To This Offering

Total Number Of Shares To Be Offered For Selling Shareholders Account

Total Shares to Be Owned Upon Completion Of  This Offering

Percentage of Shares owned Upon Completion of  This Offering

Access Equity Capital Management Corp. (1)

50,000,000

25,000

49,975,000

13.0%

Access Finance and Securities (NZ) Limited (2)

100,000,000

25,000

99,975,000

26.1%

Hsi-Ling Chang

6,667

6,667

Nil

Nil

I-Jen Chen (3)

20,010,000

50,000

19,960,000

5.2%

Jen-Yi Chen

6,667

6,667

Nil

Nil

Mei-Yu Chen

7,000

7,000

Nil

Nil

Ming-Sheng Chen

4,800

4,800

Nil

Nil

Yi-Chou Chen (4)

20,010,000

50,000

19,960,000

5.2%

Yong-Liang Chen

7,000

7,000

Nil

Nil

Chiu-Hsiang Chen Wu

7,000

7,000

Nil

Nil

Ssu-Yu Chou

2,800

2,800

Nil

Nil

Chun-Min Chu

2,800

2,800

Nil

Nil

Chu-Ao Fang

25,000

25,000

Nil

Nil

Chao-Yuan Hsieh

6,667

6,667

Nil

Nil

Chen-Wen Hsu (5)

6,000,000

50,000

5,950,000

1.6%

Ching-Ming Hsu

2,000,000

50,000

1,950,000

(8)

Fu-Chung Hsu

6,667

6,667

Nil

Nil

Hui-Cheng Hsu Lin

1,875,000

50,000

1,825,000

(8)

Chien-Yi Huang

6,667

6,667

Nil

Nil

Hsiu-Lien Huang

10,000

10,000

Nil

Nil

Pi-Chiu Huang

2,800

2,800

Nil

Nil

Shih-Ming Huang

2,800

2,800

Nil

Nil

Ya-Lin Jao

6,000,000

50,000

5,950,000

1.6%

Chi-Ju Lee

2,800

2,800

Nil

Nil

Shun-Li Li

6,667

6,667

Nil

Nil

Hsuan-I Lin

7,000

7,000

Nil

Nil

Jong-Tsun Lin

25,000

25,000

Nil

Nil

Shu-Chen Lin

6,667

6,667

Nil

Nil

Shu-Hui Lin

6,667

6,667

Nil

Nil

Tzu-Yin Lin

18,000

18,000

Nil

Nil

Hsiao-Ping Liu

18,000

18,000

Nil

Nil

Yueh-E Lo

18,000

18,000

Nil

Nil

Hsin-Yin Lu

6,667

6,667

Nil

Nil

Pei-Ching Pai

1,875,000

50,000

1,825,000

(8)

Chi-Hua Shih

6,667

6,667

Nil

Nil

Chin-Lien Sun

7,000

7,000

Nil

Nil

Taiwan Cell Energy Enzymes Corp. (6)

125,000,000

50,000

124,950,000

32.6%

Kuei-Hua Tsai

5,625,000

50,000

5,575,000

1.5%

Ching-Tsung Tseng

6,667

6,667

Nil

Nil

Tz-Jie Tseng

6,667

6,667

Nil

Nil

Yen-Lun Tseng

6,667

6,667

Nil

Nil

Chiung-Hui Wang

6,667

6,667

Nil

Nil

Hsiu-Yu Wang

6,667

6,667

Nil

Nil

Huei-Ling Wang (7)

38,625,000

50,000

38,575,000

10.1%

An-Ya Wu

6,000,000

50,000

5,950,000

1.6%

Ching-Pao Wu

6,667

6,667

Nil

Nil

En-Chi Wu

7,000

7,000

Nil

Nil

Hsueh-Wei Yang

7,000

7,000

Nil

Nil

 
 
 

17              

             


 

(1)   Yi Lung Lin, our President, has voting and investment control over shares held by Access Equity Capital Management Corp.

(2)   Yi Lung Lin, our President, has voting and investment control over shares held by Access Finance and Securities (NZ) Limited.

(3)   I-Jen Chen is a former director on our Board of Directors.

(4)   Yi-Chou Chen is a former director on our Board of Directors.

(5)   Chen Wen Hsu is a director on our Board of Directors.

(6)   Chen Wen Hsu is a director on our Board of Directors, and has voting and investment control over shares held by Taiwan Cell Energy Enzymes Corp.

(7)   Huei-Ling Wang is the wife of our President Yi Lung Lin.

(8)   Less than 1%.

The numbers in this table assume that none of the selling shareholders sells shares of common stock not being offered in this prospectus or purchases additional shares of common stock, and assumes that all shares offered are sold.  The percentages are based on  383,308,472 shares of common stock outstanding on the date of this prospectus.

Other than disclosed above, none of the selling shareholders:

1.                  has had a material relationship with us other than as a shareholder at any time within the past three years;

2.                  has ever been one of our officers or directors;

3.                  is a broker-dealer; or broker-dealer's affiliate.

In addition, we are offering up to 10,000,000 shares of common stock on a direct public offering, without any involvement of underwriters or broker-dealers, no minimum.  The offering price is $0.30 per share or prevailing market prices.  All of the shares covered by this prospectus are being offered for a period not to exceed 180 days, unless extended by our Board of Directors for an additional 90 days.

18             

             

Plan of Distribution

We are offering up to 10,000,000 shares of our common stock in a direct public offering, on a self-underwritten, best efforts basis, which means that our officer and directors will attempt to sell the shares, without any involvement of underwriters or broker-dealers.  This prospectus will permit our officer and directors   to sell the shares directly to the public, with no commission or other remuneration payable to them for any shares that they may sell.  Our officer and directors will sell the shares and intends to offer them to friends, family members and business acquaintances.  In offering the securities on our behalf, they will rely on the safe harbor from broker-dealer registration set out in Rule 3a4-1 under the Securities and Exchange Act of 1934.  The intended methods of communication include, without limitations, telephone and personal contact.  For more information, see the section of this prospectus entitled "Plan of Distribution”.  The shares will be offered at a fixed price of $0.30 per share for a period of one hundred and eighty (180) days from the effective date of this prospectus, unless extended by our board of directors for an additional 90 days.

The selling shareholders may sell some or all of their common stock in one or more transactions, including block transactions.  There are no arrangements, agreements or understandings with respect to the sale of these securities.

The selling shareholders will sell our shares at $0.30 per share until our shares are quoted on the OTC Bulletin Board, and thereafter at prevailing market prices or privately negotiated prices.  The offering price has been arbitrarily determined by us and does not necessarily bear any relationship to assets, earnings, book value or any other objective criteria of value.  There is no assurance of when, if ever, our stock will be listed on an exchange or quotation system.

The shares may also be sold in compliance with the Securities and Exchange Commission's Rule 144, when eligible.

If applicable, the selling shareholders may distribute shares to one or more of their partners who are unaffiliated with us.  Such partners may, in turn, distribute such shares as described above.  If these shares being registered for resale are transferred from the named selling shareholders and the new shareholders wish to rely on the prospectus to resell these shares, then we must first file a prospectus supplement naming these individuals as selling shareholders and providing the information required concerning the identity of each selling shareholder and he or her relationship to us.  There is no agreement or understanding between the selling shareholders and any partners with respect to the distribution of the shares being registered for resale pursuant to this registration statement.

We can provide no assurance that all or any of the common stock offered will be sold by the selling shareholders.

We are bearing all costs relating to the registration of the common stock.  The selling shareholders, however, will pay any commissions or other fees payable to brokers or dealers in connection with any sale of the common stock.

19            

             

The selling shareholders must comply with the requirements of the Securities Act and the Securities Exchange Act in the offer and sale of the common stock.  In particular, during such times as the selling shareholders may be deemed to be engaged in a distribution of the common stock, and therefore be considered to be an underwriter, they must comply with applicable law and may, among other things:

1.      Not engage in any stabilization activities in connection with our common stock;

2.      Furnish each broker or dealer through which common stock may be offered, such copies of this prospectus, as amended from time to time, as may be required by such broker or dealer; and

3.      Not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities other than as permitted under the Securities Exchange Act.

The Securities Exchange Commission has also adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.  Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).

The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, deliver a standardized risk disclosure document prepared by the Commission, which:

-          contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;

-          contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements;

-          contains a brief, clear, narrative description of a dealer market, including "bid" and "ask" prices for penny stocks and the significance of the spread between the bid and ask price;

-          contains a toll-free telephone number for inquiries on disciplinary actions;

-          defines significant terms in the disclosure document or in the conduct of trading penny stocks; and

-          contains such other information and is in such form (including language, type, size, and format) as the Commission shall require by rule or regulation;

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with:

-          bid and offer quotations for the penny stock;

-          the compensation of the broker-dealer and its salesperson in the transaction;

-          the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and

-          monthly account statements showing the market value of each penny stock held in the customer's account.

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.  These disclosure requirements will have the effect of reducing the trading activity in the secondary market for our stock because it will be subject to these penny stock rules.  Therefore, stockholders may have difficulty selling those securities.

In addition, we are offering up to 10,000,000 shares of common stock on a direct public offering, without any involvement of underwriters or broker-dealers, no minimum.  The offering price is $0.30 per share or prevailing market prices.  The shares are being offered for a period not to exceed 180 days, unless extended by our Board of Directors for an additional 90 days.

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Description of Securities

General

Our authorized capital stock consists of 500,000,000 shares of common stock at a par value of $0.001 per share.

Common Stock

As of   September 30 , 2011 , there were  383,308,472 shares of our common stock issued and outstanding that are held by  50 stockholders of record.

Holders of our common stock are entitled to one vote for each share on all matters submitted to a stockholder vote.  Holders of common stock do not have cumulative voting rights.  Therefore, holders of a majority of the shares of common stock voting for the election of directors can elect all of the directors.  Holders of our common stock representing a majority of the voting power of our capital stock issued, outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of our stockholders.  A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to our articles of incorporation.

Holders of common stock are entitled to share in all dividends that the board of directors, in its discretion, declares from legally available funds.  In the event of liquidation, dissolution or winding up, each outstanding share entitles its holder to participate pro rata in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over the common stock.  Holders of our common stock have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to our common stock.

Preferred Stock

We do not have an authorized class of preferred stock.

Dividend Policy

We have never declared or paid any cash dividends on our common stock.  We currently intend to retain future earnings, if any, to finance the expansion of our business.  As a result, we do not anticipate paying any cash dividends in the foreseeable future.

Share Purchase Warrants

We have not issued and do not have outstanding any warrants to purchase shares of our common stock.

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Options

We have not issued and do not have outstanding any options to purchase shares of our common stock.

Convertible Securities

We have not issued and do not have outstanding any securities convertible into shares of our common stock or any rights convertible or exchangeable into shares of our common stock.

Interests 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, an interest, direct or indirect, in the registrant or any of its parents or subsidiaries.  Nor was any such person connected with the registrant or any of its parents or subsidiaries as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.

Dean Law Corp. has provided an opinion on the validity of our common stock.

The financial statements included in this prospectus have been audited by M&K CPAS, PLLC to the extent and for the periods set forth in their report appearing elsewhere in this document and in the registration statement filed with the SEC, and are included in reliance upon such report given upon the authority of said firm as experts in auditing and accounting.

Description of Business

General

 

We were incorporated in the State of Nevada on June 21, 2010.

 

We are a start-up company and our main focus is to promote, market, distribute and export enzyme products to the Asian market, to begin with, Taiwan, and then followed by China, Hong Kong, Macau, Thailand, Malaysia, Singapore and Sri Lanka.  These enzyme products are specifically formulated for our marketing and distribution under contract manufacturing arrangements.  There are two contracted OEM manufacturers, one in Taiwan and the other in the United States. We have contracted with Specialty Enzymes and Biochemicals Co. (Advanced Supplemental Therapies or AST Enzymes) to be our OEM Manufacturer in the United States.  They are located in Chino, California.

 

In addition, the materials terms of our agreement with them are as follows:

  •                   products ordered by us are specially formulated for our distribution;
  •                   products will be marketed under our private label;
  •                   we will have access to laboratory testing facilities; and
  •                   they will supply us with technical product informationand support.

 

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Enzymes are not living things, they are inanimate like minerals.  But unlike minerals, they are made by living cells.  Thus, enzyme is a catalyst responsible for biochemical reactions in living things (including animals, plants, microorganisms), synthesis, decomposition, oxidation, transfer and isomerization ; is the process by which one molecule is transferred into another molecule which has exactly the same atoms, but the atoms are rearranged.

 

Without enzyme, the lack of it or with its destruction, biotic phenomena would stop, DNA would undergo a drastic change, unusual illnesses would occur and metabolism would become abnormal, among others.  Hence, we can conclude that “Biotic phenomena are testimonies of enzyme’s activities.”

 

Enzyme is actually a complex globule protein.  It reacts optimally under body temperature.  Reaction takes many times faster with added enzymes.  Therefore, regular consumption of enzyme is good to our well-being.  In fact it has been categorized under “GRAS” (Generally Regarded As Safe) by the Food and Drug Administration.  Our body loses enzymes as we grow old.  It has been proven that many chronic, hereditary diseases and functional imbalance are caused by the deficiency of certain enzymes, for example, lipase (fat enzyme) deficiency causes hepatic diseases, diabetes and Vitamin A deficiency.  Amylase (carbohydrate enzyme) deficiency results in liver diseases and gastro enteric diseases.  An enzyme is neither a drug, medicine nor a herb.  It is the “Cell Activator.”  It is extracted from fruits and vegetables.  It can be a natural complex enzyme, plant-based complex enzyme or microbial enzyme.  It is for the body cell.  It is the “Cell Activator; refers to the enzymes catalyze and regulate every biochemical reaction that occurs within the human body, making them essential to cellularfunction and health.”  Human beings and animal will die without enzyme.  Therefore, there are two types of enzyme products, Enzyme for Human Consumption and Enzyme for Animal consumption that we intend to promote, market, distribute and export.

 

We were  appointed by Origo Biochemical Technologies Inc, Taiwan as their Sole Export Marketing Agent to market their enzyme products for human consumption to Thailand and business has started since July 1, 2010.  On February 16, 2011 we provided Origo with a notice of termination for our agreement due to breach of contract, and as such have terminated our relationship with them. 

 

The termination of the agreement with Origo has had a minimal impact on our business.  In fact, we were able to replace them as our enzyme manufacture and have been able to introduce two new products, namely, ProCellax DG2 and ProCellax VDIHF.  These two new products will be manufactured and supplied by Specialty and Biochemicals Co (Advance Supplemental Therapies) in Chino, California, USA.  They are our present OEM Manufacturer.  Since Specialty and Biochemicals Co. is based in the United States, it will allow us to change our strategy to promoting US-made enzyme products.

 

Our goal is to commence promoting, marketing, distribution and export of the enzyme products specifically formulated for us, packed under our private label, pursuant to the contract manufacturing arrangements for the Asian market by the appointment of country sole distributor for each category of the enzyme products.  These country sole distributors will in turn distribute it to wholesalers and retailers for resale to the general public for consumption, following the Multi-Level Marketing – Franchise Investor Dealer Related (MLM-FIDR) concept. 

 

We intend to distribute ourenzyme products to wholesalers who will then re-distribute to dealers.  The dealers will then distribute it to retailers for retailing to consumers, the general public.  Attractive incentive bonus will be awarded to wholesalers, dealers, retailers and to consumers.  The attractive bonuses that we will be offering are issuing inventory or stock-in-trade to country sole distributors who has qualified or met their annual purchase quota.  In addition, we will pay for the air tickets and hotel accommodation (room only) for the top tenstate distributors, dealers and retailers of each country and the country sole distributor for tourism to a country or destination determined by us.

 

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These wholesalers, dealers and retailers are probably shareholders of the country sole distributor and the country sole distributor is entitled to invest in our business by way of private placement.  Therefore, effective sales and marketing is achieved through strong one on one selling but also effective retail distribution and management.  This is supported by our GEEC Enzyme Club activities for our enzyme consumers whose membership is free of charge.

 

 

Concept of Multi-Level Marketing – Franchise Investor Dealer Related (MLM-FIDR)is the direct selling of ourrange of enzyme products to consumers which products are distributed through a chain of distribution channel, for example, the country sole distributor (importer) will supply the products to appointed state distributors (wholesalers) who re-distribute the products to dealers and retailers.  Dealers can be individualsor companies.  This system requires the country sole distributor, state distributors, dealers and retailers, to all collectively invest in our business while overriding commissionsarepaid by the country sole distributor all the way downthe chain.  This concept does not attract a membership system to sell our products.  The investors were given a franchised dealership to sell our products.

 

The Multi-Level Marketing-Franchised Investor Dealer Related (MLM-FIDR) is a marketing concept to encourage Sole Country Distributors to market and distribute our ProCellax range of enzyme products in their respective countries by way of franchising dealership (wholesalers and retailers whether they are corporate or individual) under the Sole Country Distributor’s distribution channel, to sell our ProCellax range of enzyme products.  This type of Outlet is called or referred to as the General Outlet.  It is distinguished from other Outlets in the sense that the selling process adopted by the Sole Country Distributor may be in a form of a combination of traditional distribution and/or a partial Multi-Level Networking concept.  The elements in the MLM-FIDR concept are:

 

1.      The grant of permission to the Sole Country Distributor to establish as many dealerships in their Territory as they think fit and proper under the franchising model: “GEEC – Eat Right, Long Life” banner.  This means that all of their appointed dealers are permitted to label themselves as the “Authorized GEEC Dealer”.  GEEC is one of our Trademarks.

 

2.      As our Sole Country Distributor, they enjoy in the participation of our GEEC Enzyme Club Members Activities – worldwide, also in the obtainment of enzyme education and exchange of Enzyme Club Members Exchange Program, with or without charge.

 

3.      To encourage the Sole Country Distributors to put in their effort in the marketing and distribution of our range of enzyme products, we are prepared to consider and permit them, if they wish, to invest in our Company’s business.  In this way, we are able to establish long and fruitful business relationship between GEEC and the Sole Country Distributors.  They become an investor or shareholder of GEEC, if they invest.  This is a long term strategy.  In fact, an objective strategy, beneficial to both parties.

 

4.      Initially, it is the Sole Country Distributor that will invest in our Company’s business, not their dealers.  But because we intend to become a public company and our Company’s shares may one day be available for purchase on a market or exchange, the Sole Country Distributor may transfer part of their shares to their dealers as an incentive.  As well, their dealers may purchase shares on the open market.  An analogy to this system flow, the dealers may also transfer some of their shares to their individual customers.  As a result of which, at the end of the day, our Company’s shareholder base is expanded by all these investors who are our consumers, dealers appointed by the Sole Country Distributor, and the Sole Country Distributor.

 

5.      We do not deal with or sell directly to the general public (direct consumer).  Also, we do not deal or sell directly to the dealers that have been appointed by the Sole Country Distributor.  We only deal or sell to Sole Country Distributors.

 

6.      The MLM-FIDR concept does not attract membership in order to sell which is a must under the Multi Marketing Networking concept.  As well, we do not pay any commissions because we are not selling memberships.

 

Aside for the general public consumption or General Outlet Category, a country sole distributor each for Special Outlet – Category A, such as the hospital, medical center, clinic, pharmacies and drug stores.  Category B, for the country armed forces and police force, and Category C, for animal and bird racing such as pigeon racing, will be appointed.

To date, through our duly appointed Marketing Agent, Access Management Consulting and Marketing Pte Ltd, we have entered into one sole distributorship agreement in which a distributor with exclusive right has been appointed for the marketing and distribution of our range of enzyme products for human consumption in the territory of the Republic of China (Taiwan).  The agreement was entered into with Taiwan Cell Energy Enzymes Corporation(“TCEEC”), a marketing and distribution company in Taiwan specialized in the promotion and distribution of enzyme products.  The agreement provides that TCEEC will act as the sole distributor for our products in Taiwan and that we will sell them our products so that they can resell the products to the general public in Taiwan.  In addition, TEEC is required to annually purchase a minimum of $2 million or 10,000 cartons of our products, whichever amount is higher.  This is a performance quota. 

 

The duration of the agreement with Taiwan Cell Energy Enzymes Corporation in their capacity as the Sole Country Distributor for the Territory of Taiwan is five years, expiring on October 11, 2015 (Section 14).  Further, the key provisions of the agreement are as follows:

 

•           Section 14.1 gives Taiwan Cell Energy Enzymes Corporation the option to renew the agreement for a further five years.

 

•           Section 14.2 requires Taiwan Cell Energy Enzymes Corporation to give three months advance written notice if they do not intend to renew the agreement.

 

•           The termination provisions are set out as per Section 15.  Section 15.2.5 permits Taiwan Cell Energy Enzymes Corporation to give three months advance written notice if they wish to terminate the agreement early.

 

•           Section 16.5 requires a good and acceptable reason for early termination failing which, the injured party can claim damages, including loss of profits.

           

Our Company’s marketing policy on distribution channels is on the basis of outlet segmentation.  While, there are two types of outlets: General Outlet and Special Outlet.  General Outlet means the mass general market (the general public) that flow our ProCellax range of products for Human Consumption through the MLM-FIDR concept

 

In order to successfully promote, market and distribute our range of enzyme products for human consumption throughout the general public, we intend to establish a GEEC Enzyme Club and to educate the general public through a series of enzyme education programs including enzyme club exchange program with other enzyme clubs established elsewhere.

 

As part of our expansion plans, we have begun to target and hope to make contact formal commitments with other marketing and distribution companies for marketing and distribution of our range of enzyme products for human consumption and animal consumption in targeted countries.  This includes the Special Outlet Category, but there is no guarantee that we will be able to do so.

 

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To date, we have succeeded in the appointment of Taiwan Cell Energy Enzymes Corporation, a marketing and distribution company in Taiwan specialized in the promotion and distribution of enzyme products.  They will distribute our range of enzyme products for human consumption to the general public in Taiwan with an annual purchase quota of US $2 million.  The enzyme market for human consumption is very substantial and how successful we can penetrate and capture the market like Taiwan for example will depend on how successful we are implementing our business plan.  Both enzyme products for human consumption and animal consumption have a tremendous consumption volume in the Asian market.  We plan to begin  to fully  market and distribute our range of enzyme products, under our private label, within the next 12 months. We believe that we will be able to successful commence operations within the next 12 months as we already have key agreements in place with manufacturers of our enzyme products, country sole distributors, as well as sufficient cash resources to begin operations (we had approximately  $  494,606 in our bank accounts as of   January 4, 2012 ).   During the year ended September 30, 2011 we generated revenues of $120,558.

To date, we have taken the following steps to market our products.

 

Singapore Market – ProAnilax (Animal Consumption):

 

Our Sole Marketing Agent in Singapore, Access Management Consulting and Marketing Pte. Ltd. (“AMCM”) has sourced an interested party, Yahgo Holdings Pte. Ltd., who wishes to be the ProCellax Sole Country Distributor for Singapore.  However, after we conducted an internal review and understanding of Singapore consumers’ behaviors and buying habits of health supplement products, we determined that it would be more beneficial for us to distribute our products through a pharmaceutical chain store network.  Therefore, AMCM recommended that Guardian Pharmacy, the leading retail chain store in Singapore, with 150 outlets to be our distributor and that we should open up a branch office to service Guardian Pharmacy. We are currently in discussion with Guardian Pharmacy to reach a distribution agreement.


Once we have registered our Branch Office with the relevant Singapore Authorities, we will apply for an import license from the Agri-Food & Veterinary Authority of Singapore and commence exporting ProAnilax into Singapore.  We believe that marketing and distribution will start sometime in middle of 2012.  We intend to employ a local Singaporean as a Salesman to manage this portfolio covering all other target markets where we do not have a Sole Country Distributor for ProAnilax.

 

Sri Lanka Market – ProCellax (Human Consumption):


AMCM has sourced and introduced A. Baurs & Co Ltd (a public company listed on the Sri Lanka Stock Exchange) to be the ProCellax Sole Country Distributor for Sri Lanka.  They have submitted the ProCellax range of enzyme products for Product Registration in Sri Lanka and are now waiting for a final Product Classification from the Cosmetic, Devices and Drugs Authority.  We believe that exports to Sri Lanka will occur sometime after middle of 2012.

 

Sri Lanka Market – ProAnilax (Animal Consumption):

 

AMCM has sourced and introduced CIC Holdings PLC (“CIC”) (a public company listed on the Sri Lanka Stock Exchange) to be the ProAnilax Sole Country Distributor for Sri Lanka.  A sample of ProAnilax has been given to CIC and shortly they will be submitting ProAnilax to the relevant authority for Product Registration.  We expect that exports will commence once approval sought, which should take approximately 6 months or so.

 

Other ProCellax Markets – Malaysia, Thailand, China, Macau and Hong Kong:

 

We will commence Product Registration for ProCellax in these markets sometime after the middle of 2012.  Therefore, we expect export to these markets will commence sometime in 2013.

 

We now have an office in the United States.  It is situated at Two Allen Center, 1200 Smith Street, Suite 1600, Houston, Texas 77002.  Our telephone number is 713 353 8834.  We pay rent for this office.  We intend to upgrade the present office with employment of suitable qualified personnel to manage the sales administration department and product development department.  We also have plans to recruit an enzymologist and establish a laboratory for enzyme research and development with the view to improve our present range of enzyme products, innovation of new enzyme products and to carry out clinical tests.  Our ability to do all these will depend on our financial condition and our ability to secure additional financing, whether through public or private equity or debt financing, arrangements with security holders or other sources to fund the operations.  However, these sources of additional funding may not be available, or if available, may be on terms unacceptable to us.

 

 

 

Enzyme for Human Consumption

 

On July 1, 2010, we entered into a Sole Export Marketing Agent Agreement with Origo Biochemical Technologies Inc to market their enzyme products for human consumption to Thailand.  On September 21, 2010, we entered into an OEM Manufacturing Agreement with Origo Biochemical Technologies Inc for contract manufacturing a range of enzyme products for human consumption under our private label.  Origo has a monthly production output capacity of about 12 to 15 tons of enzymes in powder form. On February 16, 2011  we provided Origo with a notice of termination for our agreement due to breach of contract, and as such have terminated our relationship with them,

 

There is a limited enzyme manufacturer in the United States for contract manufacturing for our private label.  On September 21, 2010, we reached an agreement with Specialty Enzymes and Biochemicals Co. (Advanced Supplemental Therapies or AST Enzymes), USA for supplying various types of enzyme product to us under our private label.  Specialty Enzymes and Biochemicals Co.  has been in operation since 1957 and is the largest enzyme manufacturer and enzymes provider in the US.

 

Both enzyme manufacturers operate under ISO 9001:2000 certified manufacturing facilities using advanced fermentation technologies.

 

The termination of the agreement with Origo has had a minimal impact on our business.  In fact, we were able to replace them as our enzyme manufacture and have been able to introduce two new products, namely, ProCellax DG2 and ProCellax VDIHF.  These two new products will be manufactured and supplied by Specialty and Biochemicals Co (Advance Supplemental Therapies) in Chino, California, USA.  They are our present OEM Manufacturer.  Since Specialty and Biochemicals Co. is based in the United States, it will allow us to change our strategy to promoting US-made enzyme products.

 

*** PLEASE NOTE THAT WE ARE NOT SELLING ALL OF THE PRODUCTS WHOSE IMAGES ARE INCLUDED IN OUR PROSPECTUS, AND THAT SOME OF THE PRODUCTS ARE GENERATING MINIMAL REVENUES.  THE PRODUCTS DISPLAYED BELOW ARE PRODUCTS THAT WE EITHER SELL OR THAT WE INTEND TO SELL.***


 

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We do not manufacture the above enzyme product.  It is specifically formulated for our distribution.  It is packed under our private label pursuant to the contract manufacturing arrangements.  The brand name “ ProCellax FG1” belongs to us, and trademark application filed in the target markets.  We currently sell this product and have earned revenues of $22,680 from the sale of it during the year ended September 30, 2011.

 

It is a microbial enzyme.  A full-spectrum blend of probiotics; prebiotics and enzymes expertly formulated to help maintain a proper balance of intestinal micro flora and may prevent the growth of Candida.  Micro flora are the billions of tiny organisms that live naturally within the digestive tract.  Candida refers to a yeast-like fungus that may thrive in the intestinal tract, mouth, skin and vagina. 

 

ProCellax FG1 is a dietary supplement.  It comes in capsule form each capsule 500 mg.  There are 180 capsules per bottle.

 

 

 

We do not manufacture the above enzyme product.  It is specifically formulated for our distribution.  It is packed under our private label pursuant to the contract manufacturing arrangements.  The brand name “ProCellax SP” belongs to us, and the trademark application filed in the target markets. We currently sell this product and have earned revenues of $17,010 from the sale of it during the year ended September 30, 2011.

 

It is a microbial enzyme.  ProCellax SP Serrapeptase is enterically coated to survive the acidic conditions of the stomach.  This allows for greater absorption in the small intestine and thus, greater fibrinolytic activity.  It is a dietary supplement that comes in capsule form, each capsule being 500mg.  There are 60 capsules per bottle.

 

26           

             

  

 

  

 

We do not manufacture the above enzyme product.  It is specifically formulated for our distribution.  It is packed under our private label pursuant to the contract manufacturing arrangements.  The brand name “ ProCellax E2AF”belongs to us, and trademark application filed in the target markets. We currently sell this product and have earned revenues of $17,010 from the sale of it during the year ended September 30, 2011.

 

It is a microbial enzyme. ProCellax E2AF is a dietary supplement providing nutritional support for healthy joint function.  An enzyme therapy solution for inflammation management that comes in capsule form; each capsule being 750mg.  There are 90 capsules per bottle.

 

 

 

 

 

 

We do not manufacture the above enzyme product.  It is specifically formulated for our distribution.  It is packed under our private label pursuant to the contract manufacturing arrangements.  The brand name “ProCellax E” belongs to us, and trademark application filed in the target markets. We currently sell this product and have earned revenues of $22,668 from the sale of it during the year ended September 30, 2011.

 

 

 

It is a microbial enzyme.  ProCellax E is a powerful systemic enzyme blend formulated to support normal fibrin metabolism and healthy response to inflammation.  Fibrin metabolism is the breakdown of fibrin, an insoluble protein formed during the normal clotting of blood.  


ProCellax E features an enterically coated serrapeptase that can survive the acidic conditions of the stomach.  It is a dietary supplement.  It comes in capsule form each capsule 500mg.  There are 450 capsules per bottle.


27            

             

 

 

 

 

 

 

We do not manufacture the above enzyme product.  It is specifically formulated for our distribution.  It is packed under our private label pursuant to the contract manufacturing arrangements. The brand name “ProCellax SNU” belongs to us, and trademark application filed in the target markets. We currently sell this product and have earned revenues of $22,680 from the sale of it during the year ended September 30, 2011.

 

It is a microbial enzyme, plant enzyme, herbs and vitamins.  ProCellax SNU is a powerful systemic enzyme blend formulated to support a healthy cardiovascular system and to maintain normal fibrin metabolism.  It promotes healthy circulation by reducing excessive fibrin levels and reducing blood viscosity.  It is a dietary supplement.  It comes in capsule form each capsule 500mg.  There are 150 capsules per bottle.

 

 

 

 

 

We do not manufacture the above enzyme product.  It is specifically formulated for our distribution.  It is packed under our private label pursuant to the contract manufacturing arrangements. The brand name “ProCellax DG1” belongs to us,and trademark applications have been filed in the target markets. We currently sell this product and have earned revenues of $11,780 from the sale of it during the year ended September 30, 2011.

 

It is a microbial enzyme, plant enzyme, herbs and vitamins.  ProCellax DG1 is a broad-spectrum digestive enzyme blend formulated to enhance nutrient absorption and bioavailability.  It supports proper digestion of dairy, legumes, cruciferous vegetables, cereal grains, proteins and other foods.  It is a dietary supplement.  It comes in capsule form each capsule 500mg.  There are 90 capsules per bottle.

 

28           

             

 

 

 

 

We do not manufacture the above enzyme product.  It is specially formulated for our distribution. It is packed under our private label pursuant to the contract manufacturing arrangements.  The brand name “ProCellax DG2” belongs to us, and trademark applications have been filed in the target markets. We currently do not sell this product but do intend to sell it in the near future.

 

It is a digestive enzyme for gluten relief, with DPP-IV, is formulated to breakdown gluten and casein, as well as other difficult-to-digest proteins in modern foods.  It helps relieve indigestion, gas, bloating, constipation and diarrhea caused by grain and dairy proteins.  It utilizes an array of various proteases for high and low pH conditions of Gl tract.  It is a dietary supplement.  It comes in capsule form each capsule 300 mg.  There are 90 capsules per bottle.

 

 

 

 

 

We do not manufacture the above enzyme product.  It is specially formulated for our distribution. It is packed under our private label pursuant to the contract manufacturing arrangements.  The brand name “ProCellax VDIHF” belongs to us, and trademark applications have been filed in the target markets. We currently do not sell this product but do intend to sell it in the near future.

 

ProCellax VDIHF is a powerful proprietary blend of herbs, plant and microbial proteases, and other antioxidant, antimicrobial and immune-modulating enzymes.  It contains SEBPro V, a unique blend of five protease enzymes.  Proteases – systemic enzymes that break down proteins – support the body’s response to inflammation, promoting immune health.  Therefore, it enhances immune cell function and metabolism.  It is a dietary supplement.  It comes in capsule form each capsule 500 mg.  There are 180 capsules per bottle.

 

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In summary, our ProCellax range of enzyme products in capsule is displayed below:

 

 

 

 

ProCellax Range of Enzyme Products in Capsule

 

 

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The following is a ProCellax Enzymes for Human Body Cells Chart, which shows the ProCellax enzyme products applicability to the human body cells to the respective organs:

  

 

 

  

 

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We do not manufacture the above enzyme product.  It is specifically formulated for our distribution.  It is packed under our private label pursuant to the contract manufacturing arrangements.  The brand name “ProAnilax-SP3” belongs to us, and trademark applications have been filed in the target markets.   We currently do not sell this product but do intend to sell it in the near future.

 

ProAnilax-SP3 is a product specially formulated for the digestive system of dogs and cats.  It provides natural relief such as dry or scaly hair coat, skin problems, digestive disorders, joint difficulties, immune disorders, excessive shedding, weight problems, allergies, bloating, lethargy, hairballs, flatulence, coprophagia and wound healing.

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We do not manufacture the above enzyme product.  It is specifically formulated for our distribution.  It is packed under our private label pursuant to the contract manufacturing arrangements.  The brand name “ProAnilax-EPET” belongs to us, and trademark applications have been filed in the target markets.   We currently do not sell this product but do intend to sell it in the near future.

 

ProAnilax-EPET is a multi-enzyme blend of non-animal source enzymes containing a combination of proteases as well as other enzymes to facilitate movement as well as tissue and muscle healing.  It contains Rutin, an important bioflavonoid that may help repair damaged tissue.

 

 

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We do not manufacture the above enzyme product.  It is specifically formulated for our distribution.  It is packed under our private label pursuant to the contract manufacturing arrangements.  The brand name “ProAnilax-SW1013” belongs to us, and trademark applications have been filed in the target markets  We currently do not sell this product but do intend to sell it in the near future.

 

ProAnilax-SW1013 is a unique blend of enzymes developed especially for swine feed supplementation.  The enzymes encompassing a wide range of activities, aid in the breakdown of organic feed substrates, thereby encouraging the bio-availability of otherwise trapped nutrients, while improving live weight and feed conversion efficiency (feed:gain) in diets based on barley, corn, soybean meal, sunflower meal, whet meal, rapeseed meal and others.  Bio-availability, in pharmacology, is used to described the function of the administered dose of unchanged drug that reaches the systemic circulation.

 

 

34            

             

 

 

 

 

We do not manufacture the above enzyme product.  It is specifically formulated for our distribution.  It is packed under our private label pursuant to the contract manufacturing arrangements.  The brand name “ProAnilax-SEB” belongs to us, and trademark applications have been filed in the target markets.   We currently do not sell this product but do intend to sell it in the near future.

 

ProAnilax-SEB is a unique blend of enzymes developed especially for poultry feed supplementation.  The enzymes encompassing a wide range of activities, aid in the breakdown of organic feed substrates, thereby encouraging the bio-availability of otherwise trapped nutrients, while improving live weight and feed conversion efficiency (feed:gain) in diets based on corn, soybean meal, sunflower meal, wheat meal, rapeseed meal and others.

 

 

35            

             

 

 

 

 

 

We do not manufacture the above enzyme product.  It is specifically formulated for our distribution.  It is packed under our private label pursuant to the contract manufacturing arrangements.  The brand name “ProAnilax-AFL2500” belongs to us, and trademark applications have been filed in the target markets.   We currently do not sell this product but do intend to sell it in the near future.

 

ProAnilax-AFL2500 is a highly concentrated, non-animal, liquid multi-enzyme blend derived from non GMO Trichoderma spp.  It is specially designed to maximize the digestibility and nutritional value of pelletized feed, silage and other forms of ruminant feed.

 

 

 

Sales and Marketing Strategy

 

We rely on our appointed Marketing Agent to source, select and interview suitable qualified country sole distributor for each Category of our enzyme products.  We therefore intend to rely on those appointed country sole distributors to promote, market and distribute our ProCellax and ProAnilaxrange of enzyme products to the Asian and Asean markets.  We will begin with the Republic of China (Taiwan).  We will require our Marketing Agents to source, select and interview suitable candidates to be our Sole Country Distributors for our range of enzyme products.  Appointing an agent to do this for us will save us from incurring substantial start-up and working expenses related to travelling to various countries to appoint distributors. 

 

36           

             

 

 

Our enzyme range of products for human consumption

 

Under the General Outlet Category, the country sole distributor has an annual purchase quota to achieve for the promotion, marketing and distribution of ProCellax range of enzyme products.  The annual purchase quota varies from country to country.  The marketing effort the country sole distributor will follow adopting our Multi-Level Marketing – Franchise Investor Dealer Related concept (MLM-FIDR) concept.  This means that the country sole distributor will distribute the ProCellax range of enzyme products to wholesalers who then re-distribute to dealers.  The dealers will then distribute it to retailers for retailing to consumers, the general public.  Attractive incentive bonus will be awarded to wholesalers, dealers, retailers and to consumers.  These wholesalers, dealers and retailers are probably shareholders of the country sole distributor and the country sole distributor is entitled to invest in our business by way of private placement.  Therefore, effective sales and marketing is achieved through strong one on one selling but also effective retail distribution and management.  This is supported by our GEEC Enzyme Club activities for our enzyme consumers whose membership is free of charge.

 

Under the Special Outlet Category, the sole country distributor has an annual purchase quota to achieve for the promotion, marketing and distribution of our range of enzyme products directly to hospital, medical center, clinics, pharmacies and drug stores.  Another country sole distributor will be appointed for the supply of our range of enzyme products directly to the country armed forces and police force.

 

Our enzyme range of products for animal consumption

 

A sole country distributor each will be appointed for the promotion, marketing and distribution of ProAnilax range of enzyme products to area sub-distributors who in turn re-distribute it directly to farmers and animal clinics, and to dealers providing feed supplement for racing pigeons.

 

 

 

 

ProAnilax Range of Enzyme Products in Bulk Packed Powder Form

 

We intend, through our Marketing Agent, to contact as many sole country distributors for we can market our range of enzyme products more effectively.  We could then give them and their wholesalers, dealers and retailers proper enzyme education and dealership program – the MLM-FIDR concept.

 

To enhance our sales and to advertise our range of enzyme products we distribute, we have registered a domain name: www.geecenzymes.com.  This website is currently under construction and we anticipate that it will display and expose our products, provide free registration to the GEEC Enzyme Club membership, provide enzyme education, and to allow our sole country distributors to place orders for our products.  We will also have a password secured portion of the website where our GEEC Enzyme Club members can log in for enzyme education and membership activities, and a possible link to our appointment sole country distributor’s website for placing orders by its customers. 

 

We also intend to invest and establish GEEC Internet Sales (Pvt) Ltd, a private company to be wholly owned by us base at Sri Lanka responsible for all worldwide internet sales, directly from consumers where in country there is no country sole distributor.

 

Once launched, our website and GEEC Internet Sales (Pvt) Ltd’s website will be available 24 hours a day, seven day a week allowing our customer service to entertain sole country distributors and dealers and customers to shop our range of enzyme products from their home, office or even from their mobile phone. 

 

37            

             

 

 

Competition

 

The enzyme market in Asia and Asean region is still a fairly undeveloped market.  The public is aware about medicine, drug, herb and vitamin pills but not enzymes.  We plan to enter the enzyme business with a chance to be the leader in the distribution of enzyme products in Asia and the Asean region.  For example, our first target market, Taiwan, there is no enzyme product similar to our ProCellax and ProAnilax range of enzyme products.  Notable enzyme manufacturers like Kuo-chi Biotechnology Corp. producing enzymes for Chinese herbal health products; Linden Biological Technology Co. Ltd. producing enzyme for cosmetics; Easy Cure Biotechnology Co. Ltd. produces enzyme as nutrition supplement added with vitamins and minerals under the brand “Lohas”, and China Chemical Pharmaceutical Co. Ltd. producing enzyme mix with additives as a feed for animal.  Imported brand like NOW, a plant-based enzyme product from the US is perhaps the only imported enzyme product promoted in Taiwan.

 

Competition in this market revolves around price, quality, reliability, product features and activities.  At the dealer/retailer level, competition is based mainly on sales and marketing support programs, such as the dealer’s bonus incentive, advertisement support and GEEC Enzyme Club activities.  We need to create deeper distribution channels via our MLM-FIDR concept and strong brand awareness but do not possess such financial capabilities at this current time.  We may never be able to effectively enter the enzyme business and thus may not be in a position to complete with competitors who enters the market with strong financial means.


Enzyme consumption volume in Asian market – Taiwan

 

Source: Director-General of Customs, Ministry of Finance, Taiwan

 

38            

             
                                  

VALUE AND QUANTITY OF IMPORT

Commodity:  Other Enzymes, and Prepared Enzymes

HS Code:  35079000003

Year

Quantity in KG

Value in

NT $1,000

Value in

USD

2009

2,720,607

797,873

24,933,531

2008

3,183,778

760,062

23,751,938

2007

2,955,170

728,081

22,752,531

2006

2,594,085

641,297

20,040,531

 

  •        The above table does not indicate whether the enzymes are for human consumption or animal consumption nor it is categorized into the types of enzymes.
  •     Statistic for year 2010 is not available. Our sole distributorship agreement with Taiwan Cell Energy Enzymes Corp calls for an annual purchase quota of US$2 million.  This will represent approximately 7.64% of the imports market share.     
  •     The above statistic excludes domestic production volume.

 

Compliance with Government Regulation

 

We currently do not have substantial operations.  However, once we do have a substantial operations, our business will be affected by numerous laws and regulations.  To ensure that our operations are conducted in full and substantial regulatory compliance, as part of our current internal procedures and policies, we will verify and ensure that the OEM manufacturers we contracted in the US have obtained the ISO 9001:2000 certification and to qualify for health food supplement regulations in the Asian and Asean regions.  In Taiwan and other countries suchas China, Hong Kong, Macau, Singapore, Malaysia, Thailand and Sri Lanka, enzyme products are classified as “Food Supplement” and are regulated or governed by the Ministry of Health.  

Our ProCellax range of enzyme products come under "Dietary Supplement" in all the target marketsthat we intend to enter.  In Thailand, for example, the complianceprocedure areas follows:

 

  1.              Firstly, is to file Trademark Application with the Thailand Trademark Office;

  2.              Secondly, we will supply sample, product specifications and quality assurance certification to our appointed Sole Country Distributor.  The importer,  will then apply for the Product License along with the sample, product specifications and quality assurance     certification by way a product registration process with the Food and Drug Authority, Ministry of Health, Thailand. 

  3.       Once the Product License is sought, the importer can then commence to import our products.  The Product License is deemed to be the Import License.   

 

 

39            

             
 

All target markets (countries) have similar procedures.

 

Failure to comply with any laws and regulations may result in the assessment of administrative, civil and criminal penalties, the imposition of injunctive relief or both.  Moreover, changes in any of these laws and regulations could have a material adverse effect on business.  In view of the many uncertainties with respect to current and future laws and regulations, including their applicability to us, we cannot predict the overall effect of such laws and regulations on our future operations.

 

It is important to note that there no actual Statement of Claim of any health benefits on any of our product’s labels.  If we were to have a Statement of Claim on the label, the product could be classified as a medicine, drug or herb, which would require additional regulation.  In all of our target countries, health safety regulations imposed by each relevant Health Authority for food grade enzyme products are all the same.  We do not intend to have any Statement of Claim on any of our labels.

 

Currently we do not have substantial operations and believe that once we do have substantial operations, we will comply in all material respects with applicable laws and regulations, and that the existence and enforcement of such laws and regulations have no more restrictive an effect on our operations than on other similar companies in the enzyme industry.  We do not anticipate any material capital expenditures to comply with federal and state environmental requirements.

 

Employees

 

We currently do not have any employees other than our sole officer who devotes approximately 40 hours per week to our operations. 

 

 

Research and Development Expenditures

 

We have not incurred any expenditure on research and development since our inception.

 

Subsidiaries

 

We currently have one subsidary GEEIS, which is incorporated. 
 

40            

             

 

Patent and Trademarks

 

 

We have engaged a patent and  trademark  attorney to file various  trademarks on our behalfOn February 21, 2011, three applications, namely, ProCellax, ProAnilax, and GEEC have been filed with the United States Patent and Trademark Office In addition, we have also filed the three trademarks application in Thailand, Taiwan, Hong Kong, Macau, Singapore, Sri Lanka,  Malaysia and China. We may also file in other jurisdictions, but have not done so yet. 

 

We do not own any patents but the following trademarks belong to us:

 

  •                   ProCellax-FG1
  •                   ProCellax-SP
  •                   ProCellax-E2AF
  •                   ProCellax-E
  •                   ProCellax-SNU
  •                   ProCellax-DG1
  •                   ProCellax-DG2
  •                   ProCellax VDIHF
  •                   ProAnilax-SP3
  •                   ProAnilax-EPET
  •                 ProAnilax-SW1013
  •                   ProAnilax-SEB
  •                   ProAnilax-AFL2500

 Offices

 

Our business office is located at Two Allen Center, 1200 Smith Street, Suite 1600, Houston, Texas 77002.  Our telephone number is (713) 353-8834.  We pay monthly rent of $219 for our office.

 

Legal Proceedings

 

We are not currently a party to any legal proceedings.  Our address for service of process in Nevada is 4421 Edward Avenue, Las Vegas, Nevada 89108.


Market for Common Equity and Related Stockholder Matters

No Public Market for Common Stock

There is presently no public market for our common stock.  We anticipate applying for quotation of our common stock on the over the counter bulletin board upon the effectiveness of the registration statement of which this prospectus forms a part.  However, we can provide no assurance that our shares will be traded on the bulletin board or, if traded, that a public market will materialize.

Stockholders of Our Common Shares

As of the date of this registration statement, we have 48 registered shareholders.

Rule 144 Shares

The SEC has recently adopted amendments to Rule 144 which became effective on February 15, 2008 and applies to securities acquired both before and after that date.  Under these amendments, a person who has beneficially owned restricted shares of our common stock for at least six months is entitled to sell their securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding the sale and (ii) we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale.

 

41            

             

 

Persons who have beneficially owned restricted shares of our common stock for at least six months but who are our affiliates at the time of, or at any time during the three months preceding the sale, are subject to additional restrictions.  Such person is entitled to sell within any three-month period only a number of securities that does not exceed the greater of either of the following:

 

  •                   1% of the total number of securities of the same class then outstanding, which will equal 54,200 shares as of the date of this prospectus; or 
  •                   the average weekly trading volume of such securities during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale;

 

provided, in each case that we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale.

 

Such sales must also comply with the manner of sale and notice provisions of Rule 144.

As of the date of this prospectus none of our shares are eligible for resale pursuant to Rule 144.

Stock Option Grants

To date, we have not granted any stock options.

Registration Rights

We have not granted registration rights to the selling shareholders or to any other persons.

Dividends

There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends.  The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:

  1. we would not be able to pay our debts as they become due in the usual course of business; or
  2. our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.

We have not declared any dividends, and we do not plan to declare any dividends in the foreseeable future.

Plan of Operation

Our plan of operation for the next twelve months following the date of this prospectus is to implement the sole distributorship agreement we had signed and to enter into formal sole distributorship agreement with other country sole distributors.  We plan to promote, market, distribute and export our range of enzyme products to the Asian market, to begin with Taiwan and then to China.

 

42          

             

 

We expect to incur the following expenses in the next 12 months in connection with our business operations:

 

Inventory                                                                                           $   1,263,864

General Administration, Sales and Marketing Overhead                      $   250,000

Sales Advertisement and Promotion Support Overhead                      $   250,000

 

We expect to need approximately $520,000 for the next six months of operations and an additional $1,243,864 until we achieves profitability.  The funds will be used for the purposes of retaining a more-qualified management team, purchase of inventory, administrative expenses and for professional fees.

 

Currently our monthly burn rate is approximately $ 14,500 .  However, this number is not an accurate reflection of our actual monthly cash requirement, as it will likely to be much higher once we commence operations.  Currently we have enough cash on hands to sustain our operations for approximately  37 months.  Our country sole distributor for Taiwan responsible for distributing our range of enzyme for human consumption to the general public, Taiwan Cell Energy Enzymes Corporation has committed to invest in our business by the subscription of our common stock of $1 million.  However, there is no guarantee that Taiwan Cell Energy Enzymes Corporation will not breach the private placement agreement.  The details of Taiwan Cell Energy Enzymes Corporation, Taiwan (“TCEEC”)$1 million investment are as follows:

 

 

1.    TCEEC is the Country Sole Distributor for ProCellax range of enzyme products, distributing  to the general outlet in the territory of Taiwan only.

2.    TCEEC has agreed to invest US $1 million payable by five installments of $200,000 each the first to commence on October 10, 2010.  As of the date of this prospectus TCEEC has paid us all $1,000,000 . 

3.    TCEEC  was issued shares at a price of $0.008 per share.  As of the date of this prospectus TCEEC has been issued  125,000,000 shares of common stock and  has invested the entire $1,000,000 it has committed to do so.

4.    This program falls within the Multi-Level Marketing – Franchise Dealer Investor Related (MLM-FDIR) concept adopted by the Company since TCEEC is our country sole distributor.

 

We do not have sufficient cash and cash equivalents to execute our operations and will need to obtain additional financing to operate our business for the next six months.  Additional financing, whether through public or private equity or debt financing, arrangements with security holders or other sources to fund operations, may not be available, or if available, may be on terms unacceptable to us.

 

Results of Operations for the Period Ending September 30, 2010

 

We have not generated any revenues from our inception on June 21, 2010 to September 30, 2010.  We have not yet started distribution of our range of enzyme products to the Asian market.  We incurred operating expenses in the amount of $23,947 for the period from our inception on June 21, 2010 to September 30, 2010.  These operating expenses were comprised of general and administrative fees relating to our incorporation and business development.

 


43            

             

 

Revenues

 

We have not generated any revenues from our inception on June 21, 2010 to September 30, 2010.  We have not yet started distribution of our range of enzyme products to the Asian market.

 

Expenses

 

We have incurred total operating expenses of $23,947 since our inception on June 21, 2010 to September 30, 2010.  These expenses were comprised of professional fees of $8,500, transfer agent fees of $10,000, filing fees of $2,945 and other office and general expenses of $2,502.

 

Liquidity and Capital Resources

 

As at September 30, 2010, we had total current assets of $45,115, comprising of $38,677 in cash and $6,438 in prepaid expenses.  As of September 30, 2010, we had a working capital deficit of $264,446.

 

Cash Used in Operating Activities


Cash used in operating activities was $23,117 for 2010.  We anticipate that cash used in operating activities will increase in 2011 as discussed under "Plan of Operations.”

 

Cash from Financing Activities

 

We have funded our business to date primarily from sales of our common stock.  From our inception, on June 21, 2010, to September 30, 2010, we have raised a total of $105,000 from private offerings of our securities.

 

We have not attained profitable operations and are dependent upon obtaining financing to pursue marketing and distribution activities.  For these reasons, our independent auditor’s report contains a note that there is substantial doubt that we will be able to continue as a going concern.

 

Results of Operations for the Year ended September 30, 2011 and from the period from June 21, 2010 (Date of Inception) to September 30, 2011

 

Revenues

 

We earned revenues of $120,558 during the year ended September 30, 2011 and from the period from June 21, 2010 to September 30, 2011.  All of these revenues were generated in Taiwan through our Sole Country Distributor, Taiwan Cell Energy Enzymes Corp.   These revenues were attributed to the sale of the following products:

 

ProCellax FG1:                         $22,680

ProCellax SP                            $17,010

ProCellax E2AF                       $23,760

ProCellax E                              $22,668

ProCellax SNU                        $22,680

ProCellax DG1                         $11,760

                        TOTAL:                                $120,558

 

Cost of Goods Sold

We have spent a total of $368,372 on cost of goods sold during the year ended September 30, 2011 and from the period from June 21, 2010 to September 30, 2011.  The major components of these costs were comprised of compensation to distributors of $274,705, product costs of $66,966 and sales commission expenses of $24,112.

44            

             

 

Expenses

 

We have incurred total operating expenses of $257,139 during the year ended September 30, 2011 and total operating expenses of $281,086 from the period from June 21, 2010 to September 30, 2011.  The major components of these expenses for the year ended September 30, 2011 were comprised of professional fees of $189,397, travel expense of $17,344, website design of $10,950, advertising and business promotion of $4,331, transfer agent fees of $6,023, rent expense of $6,631, BOD meeting expenses of $7,243 and filing fees of $5,156. 

 

From the period from June 21, 2010 to September 30, 2011 the major components of the expenses were comprised of professional fees of $197,897, travel expense of $17,344, website design of $10,950, advertising and business promotion of $4,331, transfer agent fees of $16,023, rent expense of $7,422, BOD meeting expenses of $7,243 and filing fees of $5,994.

 

   

Liquidity and Capital Resources

 

As at September 30 , 2011, we had cash reserves of $ 543,764 and working capital surplus of $ 487,683 .

 

Cash Used in Operating Activities

 

Cash used in operating activities was $ 174,106 for the nine months ended  September 30, 2011

 

Cash from Financing Activities

 

Cash received from financing activities was $ 708,106 for the year ended September 30, 2011 . Of which,  $1,000,000  was cash proceeds for sales of stock to TCEEC and other investors; $ 245,000 was payments for offering costs;$5,400 was for capital contribution by shareholders and  $52,294 was repayments on advances from related party.

  
 

 

Changes In and Disagreements with Accountants

We have had no changes in or disagreements with our accountants.

Available Information

We have filed a registration statement on Form S-1 under the Securities Act of 1933 with the Securities and Exchange Commission with respect to the shares of our common stock offered through this prospectus.  This prospectus is filed as a part of that registration statement, but does not contain all of the information contained in the registration statement and exhibits.  Statements made in the registration statement are summaries of the material terms of the referenced contracts, agreements or documents of the company.  We refer you to our registration statement and each exhibit attached to it for a more detailed description of matters involving the company, and the statements we have made in this prospectus are qualified in their entirety by reference to these additional materials.  You may inspect the registration statement, exhibits and schedules filed with the Securities and Exchange Commission at the Commission's principal office in Washington, D.C. Copies of all or any part of the registration statement may be obtained from the Public Reference Section of the Securities and Exchange Commission, 100 F Street NE, Washington, D.C. 20549.  D.C. 20549.  Please call the Commission at 1-800-SEC-0330 for further information on the operation of the public reference rooms.

The Securities and Exchange Commission also maintains a web site at http://www.sec.gov that contains reports, proxy statements and information regarding registrants that file electronically with the Commission.  Our registration statement and the referenced exhibits can also be found on this site.

45           

             

Directors, Executive Officers, Promoters and Control Persons

Our executive officer and directors and their ages as of the date of this prospectus is as follows:

 

 

 

       Name of Director                                      Age

 

Yi Lung Lin                                                     60

 

Chen Wen Hsu                                                54

 

 

 

 

 

 

Executive Officer:

 

       Name of Officer                                       Age                                      Office_____________________

 

Yi Lung Lin                                                     60                    President, Chief Executive Officer, Secretary, Treasurer,

           Chief Financial Officer, Principal Accounting Officer

 

Biographical information

 

Set forth below is a brief description of the background and business experience of our sole officer and our directors for the past five years.

 

Yi Lung Lin, Director and President, Chief Executive Officer, Secretary, Treasurer, Chief Financial Officer, Principal Accounting Officer

 

Since our inception on July 22, 2010, Yi Lung Lin has been our president, chief executive officer, secretary, chief financial officer, principal accounting officer and a member of the board of directors.  Mr. Lin is a Chartered Marketer (UK) cum Accountant (UK) and a banker by profession.  He is also currently a stage  3 student of the Nottingham Law School (UK), undergoing the LL.B (Hons) law degree course.  After his professional studies, he has been employed by international organizations like SKF and Nestle as their accountant.  He then ventured into the financial services businesses for more than 10 years.  From July1994to March 2009, he became the duly appointed Trade Commissioner for the Republic of Vanuatu to head the Vanuatu Trade Office in New Zealand and then, to responsible for the Vanuatu Trade Office in Taiwan.  Prior to his retirement as the Vanuatu Trade Commissioner, he has been appointed by the President of the Sanma Province, Vanuatu as the Ambassador.  From June 2009 to present, Mr. Lin has been the chairman and managing director of Access Finance and Securities (NZ) Limited – (“AFS’), a financial institution duly incorporated under the laws of New Zealand providing offshore merchant banking/investment banking services in the area associated and/or incidental to capital markets – taking companies public in the US, mergers and acquisitions, securities placement agent service and underwriting securities.  He is also the President and Managing Director of other companies under the AFS Group of Companies, namely, Access Equity Capital Management Corp, USA and Access Management Consulting and Marketing Pte Ltd, Singapore.  Mr. Lin is highly knowledgeable and has many years of experience in marketing, accounting and finance which make him an ideal candidate to serve as a director.

 

46            

             

 

Chen Wen Hsu, Director

 

Mr. Hsu has been our director since our inception on July 22, 2010.  He is a chemical engineer by profession.  In 1978, he obtained his bachelor degree in chemical engineering from the Minghsin University of Science Technology, Taiwan.  From September 1981 to April, 1985, he was employed by Yu Lon Automobile Co Ltd, Taiwan as a chemical engineer responsible for quality control.  In addition, between 1983 and 2003, he has been actively involved in direct sales activities.  From a Dealer to an Emerald Distributor for AMWAY MLN Co Ltd, Taiwan (1983/1985), he became a Distributor and then promoted to a Manager with King Shop Direct Marketing, Taiwan (1986/1990) and subsequently a Director with Gobo Group Co Ltd, Taiwan (2000/2003).  He then became a Manager for Chunghwa United Telecom Communication Co Ltd, Taiwan from October 2004 to March 2008 responsible for group training programs.  In 2010, he became the General Manager for Jia Tang Co Ltd, Taiwan an associated company of Origo Biochemical Technologies, Inc, Taiwan that export enzyme products manufactured by Origo.  He is now the General Manager of Taiwan Cell Energy Enzymes Corporation, Taiwan, a marketing and distribution company appointed by us as the country sole distributor for our range of enzyme product for human consumption in the territory of Republic of China (Taiwan).  Mr. Hsu is a Chemical Engineer by profession and has wide knowledge in enzyme market in Taiwan after having accredited with more than 20 years of experience in direct selling, which makes him an ideal candidate to serve as our director.   

 

 

Independent Directors

 

The rules of the SEC require that we, because we are not listed on any national securities exchange, choose a definition of director “independence” for purposes of determining which directors are independent.  We have chosen to follow the definition of independence as determined by the Marketplace Rules of The Nasdaq National Market (“NASDAQ”).  Pursuant to NASDAQ’s definition, we do not have any independent directors.

 

Term of Office

 

Our officers and our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws.

 

Significant Employees

 

There are no persons other than our officers and directors above are expected by us to make a significant contribution to our business.

 

47          

             

 

Executive Compensation

Summary Compensation Table

The table below summarizes all compensation awarded to, earned by or paid to our executive officer by any person for all services rendered in all capacities to us for the fiscal period from our inception on June 21, 2010 to September 30, 2010(our fiscal year end).

   SUMMARY COMPENSATION TABLE   



 

 

 




Name
and
Principal
Position








 

 



Year








Salary

FY 2010
($)








 

 


Bonus
($)






 

 



Stock
Awards
($)(1)






 

 



Option
Awards
($)(1)




 

 



Non-Equity
Incentive
Plan
Compensation
($)

 

 


Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)



 

 




All
Other
Compens-
ation
($)





 

 





Total
($)

Yi Lung Lin, President, CEO,
Secretary, Treasurer, CFO, Principal Accounting Officer and Director

2010

 

 

 

None

None

None

None

None

None

None

None

Chen Wen Hsu, Director

2010

 

 

 

None

None

None

None

None

None

None

None

Yi Chou Chen, former Director

2010

 

 

 

None

None

None

None

None

None

None

None

I Jen Chen, former Director

2010

 

 

 

None

None

None

None

None

None

None

None

 

Stock Option Grants

 

We have not granted any stock options to the executive officers since our inception.

 

Employment Agreements

We do not have any employment agreements.

 

48           

             

Security Ownership of Certain Beneficial Owners and Management

The following tables set forth the ownership, as of the date of this Prospectus, of our common stock by each person known by us to be the beneficial owner of more than 5% of our outstanding common stock, our directors, and our executive officers and directors as a group.  To the best of our knowledge, the persons named have sole voting and investment power with respect to such shares, except as otherwise noted.  There are not any pending or anticipated arrangements that may cause a change in control.

The information presented below regarding beneficial ownership of our voting securities has been presented in accordance with the rules of the Securities and Exchange Commission and is not necessarily indicative of ownership for any other purpose.  Under these rules, a person is deemed to be a "beneficial owner" of a security if that person has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition of the security.  A person is deemed to own beneficially any security as to which such person has the right to acquire sole or shared voting or investment power within 60 days through the conversion or exercise of any convertible security, warrant, option or other right.  More than one person may be deemed to be a beneficial owner of the same securities.  The percentage of beneficial ownership by any person as of a particular date is calculated by dividing the number of shares beneficially owned by such person, which includes the number of shares as to which such person has the right to acquire voting or investment power within 60 days, by the sum of the number of shares outstanding as of such date plus the number of shares as to which such person has the right to acquire voting or investment power within 60 days.  Consequently, the denominator used for calculating such percentage may be different for each beneficial owner.  Except as otherwise indicated below and under applicable community property laws, we believe that the beneficial owners of our common stock listed below have sole voting and investment power with respect to the shares shown.  The mailing address for all persons is Two Allen Center, 1200 Smith Street, Suite 1600, Houston, Texas 77002, United States of America.

Shareholders

Number of Shares

Percentage

 

Yi Lung Lin (1)

150,000,000

39.1%

 

 

 

 

 

 

 

 

 

Chen-Wen Hsu (2)

31,000,000

8.1%

 

All directors and executive officers as a group [2 persons]

181,000,000

47.2%

 

Huei-Ling Wang (3)

38,625,000

10.1%

I-Jen Chen (4)

20,010,000

5.2%

 

Yi-Chou Chen (4)

20,010,000

5.2%

 

49           

             

 

 

 

(1)   Yi Lung Lin is our President.  Mr. Lin’s beneficial ownership includes 50,000,000 shares held by Access Equity Capital Management Corp. and 100,000,000 shares held by Access Finance and Securities (NZ) Limited, both companies which Mr. Lin has voting and investment control over.

(2)   Chen Wen Hsu is a director on our Board of Directors.  Mr. Hsu’s beneficial ownership includes 6,000,000 shares held in his own name and 25,000,000 shares held by Taiwan Cell Energy Enzymes Corp., a company Mr. Hus has voting and investment control over.

(3)   Huei-Ling Wang is the wife of our President Yi Lung Lin.

(4)   Former directors

 

This table is based upon information derived from our stock records.  Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, each of the shareholders named in this table has sole or shared voting and investment power with respect to the shares indicated as beneficially owned.  Applicable percentages are based upon  383,308,472 shares of common stock outstanding as of  January 10, 2012 . 

Certain Relationships and Related Transactions 

On August 9, 2010, we sold 20,000 shares of common stock at $0.25 a share to our directors for total consideration of $5,000.

 

Our CEO is the managing director of a consulting company, Access Finance and Securities (NZ) Limited (the “Consulting Company”), who provides consulting services to us.  The Consulting Company, will assist us in going public in the US and also obtaining a listing on the OTCBB.  As part of this process, the Consulting Company will source, select and recommend the appointment of various experienced and qualified professionals to participate in the process and coordinate the flow of work therefrom.  In addition, the Consulting Company will prepare or make available a Business Plan and to participate with us in the determination of a public listing strategy, and will provide such services until our Registration Statement is declared effective by the U.S. Securities and Exchange Commission and it is granted a trading symbol by FINRA.  In January 2011, we converted $50,000 owed to the Consulting Company into 50,000,000 shares of our common stock at a price of $0.001 per share.  We issued the Consulting Company an additional 50,000,000 shares and paid a total of $331,500 for offering costs from inception through June 30, 2011. We also paid $100,000 for consulting services to the Consulting Company during the nine months ended June 30, 2011

“…for consulting services to strategically position the Company in the both capital market and the industry. The services include but not limited to:

1.         To prepare Business Plan;

2.         To assist in the negotiation with Market Maker;

3.         To assist in selecting Public Relation and Investor Relation Firm; and

4.         To assist in formulating business and financial strategies.”

services directly related to the S-1 registration and offering. 

 

On September 7, 2010, we received advances total $30,000 from a related party.

 

As of September 30, 2010, our director advanced funds totaling $22,294 to us for our working capital.

 

During October, 2010, we paid off the advances of $ 22,294 to the director and $30,000 to the related party.


During the period ending June 30, 2011, we received a total of $5,400 of contributions from a related party.

 

On July 1, 2010, we entered into a Sole Export Marketing Agent Agreement with Origo Biochemical Technologies Inc. (“Origo”) to market Origo’s enzyme products for human consumption to Thailand.  On September 21, 2010, we entered into an OEM Manufacturing Agreement with Origo for contract manufacturing a range of enzyme products for human consumption under our private label.  Origo has a monthly production output capacity of about 12 to 15 tons of enzymes in powder form. Two of our former directors, Mr. Chen Yi Chou and Mr. Chen I Jen, are brothers, and are the sons of the Madam Wang Feng Peng, the President of Origo, and Mr. Chen I Jen is the general manager of Origo.  This agreement was terminated early in February of 2011 due to Origo's breach to perform its part of the obligations contained in the agreement.  

 

On September 21, 2010, we entered into a Sole Marketing Agent Agreement with Access Management Consulting and Marketing Pte. Ltd. (“Access Management Consulting”) for the marketing of our range of enzyme products and to source, select and interview country sole distributors for the distribution of our range of enzyme products to the world at large.  Our President, Chief Executive Officer, Chief Financial Officer, and director, Mr. Yi Lung Lin, is also the President and Managing Director of Access Management Consulting.  According to the agreement, we will pay Access Management Consulting a twenty percent (20%) commission of the total value of the products sold and invoiced by us to the appointed country sole distributor and agent. As of April 30, 2011, the commission payable is $24,112 for the sales of the nine months ended  September 30, 2011.

 

On October 11, 2010, we entered into a Sole Distributorship Agreement (General Outlet-Human Consumption) with Taiwan Cell Energy Enzymes Corporation (“TCEEC”) for marketing and distribution of the Company’s enzyme products in the Republic of China (Taiwan).  Mr. Chen Wen Hsu, one of the Company’s directors, has voting and investment control over TCEEC.  As provided for under the Sole Distributorship Agreement, TCEEC has committed to invest in us by subscribing to the Company’s common stock for a total of $1 million on or before June 10, 2011. As of the date of this prospectus, TCEEC has invested the entire $1 million dollar investment and has been issued 125,000,000 common shares, at a price of $0.008 per share.


Except as disclosed above,
none of the following parties has, since our date of incorporation, had any material interest, direct or indirect, in any transaction with us
or in any presently proposed transaction that has or will materially affect us:

  •                   Any of our directors or officers;
  •                   Any person proposed as a nominee for election as a director;
  •                   Any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our outstanding shares of common stock;
  •                   Our sole promoter, Yi Lung Lin;
  •                   Any relative or spouse of any of the foregoing persons who has the same house as such person; 
  •           Immediate family members of directors, director nominees, executive officers and owners of 5% or more of our common stock.

We do not have a formal written policy for review and approval of transactions required to be disclosed pursuant to Item 404(a) of Regulation S-K.  Our board members are responsible for review, approval and ratification of “related-person transactions” between us and any related person.  Under SEC rules, a related person is an officer, director, nominee for director or beneficial holder of more than 5% of any class of our voting securities since the beginning of the last fiscal year or an immediate family member of any of the foregoing.


50            

             

 

Disclosure of Commission Position of Indemnification for
Securities Act Liabilities

Our sole officer and our directors are indemnified as provided by the Nevada Revised Statutes and our Bylaws.  We have been advised that in the opinion of the Securities and Exchange Commission indemnification for liabilities arising under the Securities Act 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 is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our legal counsel the matter has been settled by controlling precedent, submit the question of whether such indemnification is against public policy to court of appropriate jurisdiction.  We will then be governed by the court's decision.


51        

             

 

Financial Statements

 

INDEX TO FINANCIAL STATEMENTS

 

 

Report of Independent Registered Public Accounting Firm

 

F-1

 

 

 

Consolidated Balance Sheets as of  September 30, 2011 and 2010

 

F-2

 

 

 

Consolidated Statements of  Operations for the years ended September 30, 2011 and 2010, and for the

period from June 21, 2010 (Date of Inception) to September 30, 2011

 

F-3

 

 

 

ConsolidatedStatements of  Stockholders’ Equity (Deficit) for the period from June 21, 2010 (Date of Inception) to September 30, 2011

 

F-5 

 

 

Consolidated Statements of Cash Flows for the years ended September 30, 2011 and 2010, and for the

period from June 21, 2010 (Date of Inception) to September 30, 2011

 

F-6

 

 

 

Notes to Consolidated Financial Statements

 

F-8

 

 

 

52            

             

 

 


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

To the Board of Directors

Genufood Energy Enzymes Corp.

(A Development Stage Company)

  

We have audited the accompanying balance sheets of Genufood Energy Enzymes Corp. (a development stage company) as of September 30, 2011 and 2010, and  the related statements of operations, changes in stockholders' deficit, and cash flows for the year and period then ended and for the period from inception (June 21, 2010) through September 30, 2011. 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 audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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 also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Genufood Energy Enzymes Corp. as of September 30, 2011 and 2010, and the results of its operations, changes in stockholders' deficit and cash flows for the periods described above 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 3 to the financial statements, the Company had a cumulative net loss from operations of $528,327 as of September 30, 2011 and expects to incur additional losses in the near future. Management's plans regarding those matters also are described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

 

/s/ M&K CPAS, PLLC 

www.mkacpas.com

Houston, Texas

January 10, 2012

 

F-1            

             

 

GENUFOOD ENERGY ENZYMES CORP

 

(A Development Stage Company)

 

CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

September 30,

 2011

 

 

September 30, 2010

ASSETS

 

 

 

 

 

Current assets

 

 

 

 

    Cash

$

543,764

 

$

38,677

    Prepaid expenses

 

24,680

 

 

6,438

    Inventory

2,681

 

 

-

Total current assets

 

571,125

 

 

45,115

 

 

 

 

 

 

Other assets

 

 

 

 

 

    Computer equipment and software, net of accumulated depreciation

 

2,386

 

 

-

    Trademarks

 

25,821

 

 

-

 

 

 

 

 

 

Total assets

$

599,332

 

$

45,115

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

Current liabilities

 

 

 

 

 

    Accounts payable

$

18,672

 

$

3,767

    Accounts payable to related party

 

3,169

 

 

53,500

    Accrued expenses

 

1,001

 

 

-

    Convertible accounts payable owed to related party

 

-

 

 

200,000

    Due to related parties

 

-

 

 

52,294

    Customer deposit

 

60,600

 

 

-

Total current liabilities

 

83,442

 

 

309,561

 

 

 

 

 

 

Total liabilities

 

83,442

 

 

309,561

 

 

 

 

 

Stockholders' equity (deficit)

 

 

 

 

 

    Common Stock, $0.001 par, 500,000,000 shares authorized,    383,308,472 and 208,308,472 shares issued and outstanding as of September 30, 2011 and  2010

 

383,308

 

 

208,308

    Additional paid in capital

 

661,297

 

 

 (448,808)

    Deficit accumulated during development stage

 

(528,327)

 

 

 (23,946)

    Cumulative translation adjustment

 

(388)

 

 

-

Total stockholders' equity (deficit)

 

515,890

 

 

(264,446)

 

 

 

 

 

 

Total liabilities and stockholders' equity (deficit) 

$

599,332

 

$

45,115

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 
 

F-2            

             

 

 

 


GENUFOOD ENERGY ENZYMES CORP

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

 

 

Year Ended September 30, 2011

 

 

Year Ended September 30, 2010

 

 

June 21, 2010 (Inception) Through September 30, 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

$

120,558

 

$

-

 

$

120,558

 

Total revenue

 

 

 

 

120,558

 

 

-

 

 

120,558

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

 

 

 

 

 

 

 

 

 

 

 

Product costs

 

 

 

 

66,966

 

 

-

 

 

66,966

 

Label costs

 

 

 

 

2,589

 

 

-

 

 

2,589

 

Sales commission expenses

 

 

 

 

24,112

 

 

 

24,112

 

Compensation to distributors

 

 

 

 

274,705

 

 

-

 

 

274,705

 

Total cost of goods sold

 

 

 

 

368,372

 

 

-

 

 

368,372

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

 

 

(247,814)

 

 

-

 

 

(247,814)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

   Product label design

 

 

 

 

4,290

 

 

-

 

 

4,290

 

   Advertising and business promotion

 

 

 

 

4,331

 

 

-

 

 

4,331

 

   Website design

 

 

 

 

10,950

 

 

-

 

10,950

 

   Bank service charge

 

 

 

 

2,618

 

 

130

 

 

2,748

 

   Computer and internet expenses

 

 

 

 

-

 

 

151

 

 

151

 

   Filing fees

 

 

 

 

5,156

 

 

838

 

 

5,994

 

   License and permits

 

 

 

 

633

 

 

2,945

 

3,578

 

   Meals and entertainment

 

 

 

 

338

 

 

561

 

 

899

 

   Office supplies

 

 

 

 

663

 

 

31

 

 

694

   Rent expense

 

 

 

 

6,631

 

 

791

 

7,422

   Transfer agent fees

 

 

 

 

6,023

 

 

10,000

 

 

16,023

 

   Travel expense

 

 

 

 

17,344

 

 

-

 

 

17,344

   Professional fees

 

 

 

 

189,397

 

 

8,500

 

 

197,897

 

   Postage & shipping

 

 

 

 

439

 

 

-

 

 

439

   Telephone expense

 

 

 

 

765

 

 

                          -  

 

 

765

 

   BOD meeting expenses

 

 

 

 

7,243

 

 

-

 

 

7,243

 

   Depreciation

 

 

 

 

318

 

 

                          -  

 

 

318

 

Total operating expenses

 

 

 

 

257,139

 

 

23,947

 

 

281,086

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating loss

 

 

 

 

(504,953)

 

 

(23,947)

 

(528,900)

 

  Other income

 

 

 

 

 

 

 

 

         Interest income

 

 

 

 

572

 

 

1

 

 

573

 

   Net loss

 

 

 

 

(504,381)

 

 

(23,946)

 

 

(528,372)

 

        Cumulative translation adjustment

 

 

 

 

(388)

 

 

-

 

 

(388)

 

   Comprehensive loss

 

 

 

 

(504,769)

 

 

(23,946)

 

 

(528,715)

 

  Weighted average number of common shares
  outstanding-basic and diluted

 

 

 

 

292,075,595

 

 

185,978,699

 

 

 

 

  Net loss per share-basic and diluted

 

 

 

 

(0.00)

 

 

(0.00)

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
  

The accompanying notes are an integral part of these consolidated financial statements

 

 

 F-3           

             
 

 

GenuFood Energy Enzymes Corp.

(A Development Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
From June 21, 2010 (Inception) To September 30, 2011

 

 

 

Common stock

 

Additional paid in capital

 

Deficit accumulated during the development

stage

 

Foreign currency translation  adjustment

 

Total

Shares

 

Amount

Balance at June 21, 2010 (Inception)

-

$

-

 

-

$

-

$

-

$

-

Common stock issued for cash

308,472

 

308

 

46,692

 

-

 

-

 

47,000

Common stock issued to founders for cash

58,000,000

 

58,000

 

-

 

-

 

-

 

58,000

Capital contribution by shareholders

-

 

-

 

4,500

 

-

 

-

 

4,500

Common stock issued for offering costs

150,000,000

 

150,000

 

 (150,000)

 

-

 

-

 

-

Cash paid for offering costs

-

 

                 -  

 

 (100,000)

 

-

 

-

 

(100,000)

Cash owed for offering costs
($200,000 subsequently paid in cash and $50,000
subsequently converted into shares in fiscal 2011)

-

 

                 -  

 

 (250,000)

 

-

 

-

 

(250,000)

Net loss 

                       - 

 

-  

 

-  

 

 (23,946)

 

-

 

(23,946)

Balance at September 30,  2010

208,308,472

$

208,308

$

(448,808)

$

(23,946)

$

-

$

(264,446)

Common stock issued for cash-

125,000,000

 

125,000

 

875,000

 

-

 

-

 

1,000,000

Capital contribution by shareholders

-

 

 

 

5,400

 

-

 

-

 

5,400

Cash paid for offering costs

-

 

 

 

(45,000)

 

-

 

-

 

(45,000)

Convertible accounts payable owed to related party converted into common shares

50,000,000

 

50,000

 

-

 

-

 

-

 

50,000

Cumulative translation adjustment

-

 

-

 

-

 

-

 

(388)

 

(388)

 

Stock compensation to distributors

-

 

-

 

274,705

 

-

 

-

 

274,705

 

Net loss 

-

 

-

 

-

 

(504,381)

 

-

 

(504,381)

 

Balance at September  30,  2011

383,308,472

$

383,308

$

661,297

$

(528,327)

$

(388)

$

515,890

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

F-4          

             
 

 

GENUFOOD ENERGY ENZYMES CORP

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS 

 

 

 

Year Ended September 30, 2011

 

Year Ended September 30, 2010

 

From June 21, 2010 (Inception)

Through  September 30, 2011

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Net loss

$

(504,381)

$

(23,946)

$

(528,327)

 

 

Adjustments to reconcile net loss to net cash:

 

 

 

 

 

 

    Depreciation

318

-

 

318

 

 

    Stock compensation to distributors

274,705

-

 

274,705

 

 

Change in operating assets and liabilities:

 

 

 

 

 

 

    Prepaid expenses

 

(18,242)

 

(6,438)

 

(24,680)

 

 

    Inventory

(2,681)

-

 

(2,681)

 

 

    Accounts payable

14,905

3,767

 

18,672

 

 

    Accounts payable to related party

(331)

3,500

 

(3,169)

 

 

    Accrued expenses

1,001

-

 

1,001

 

 

    Customer deposits

60,600

-

 

60,600

 

 

Net cash used in operating activities

 

(174,106)

 

(23,117)

 

(197,223)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

Purchase of computer equipment & software

 

(2,704)

 

-

 

(2,704)

 

 

Cash paid for trademark registration

(25,821)

-

 

(25,821)

 

 

Net cash used in investing activities

 

(28,525)

 

-

 

(28,525)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

Proceeds from sale of common shares

 

1,000,000

 

47,000

 

1,047,000

 

 

Proceeds from sale of common shares  to founders

 

-

 

58,000

 

58,000

 

 

Capital contribution by shareholders

 

5,400

 

4,500

 

9,900

 

 

Cash paid for offering costs

 

(245,000)

 

(100,000)

 

(345,000)

 

 

Advances to related party, net

 

(52,294)

 

52,294

 

-

 

 

Net cash provided by financing activities

 

708,106

 

61,794

 

769,900

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

(388)

-

 

(388)

 

 

 

 

 

 

NET INCREASE IN CASH

 

505,087

 

38,677

 

543,764

 

 

CASH AT THE BEGINNING PERIOD

 

38,677

 

-

 

-

 

 

CASH AT THE END OF THE PERIOD

$

543,764

$

38,677

$

543,764

 

 

 

 

 

 

Supplemental disclosure of cash flow information

 

 

 

 

 

 

   Cash paid during period for:

 

 

 

 

 

 

    Interest

$

-

$

-

$

-

 

 

    Income taxes

$

-

$

-

$

-

 

 

 

 

 

 

Non-cash financing activities:

 

$

 

 

Cash owed for offering costs to related party

$

-

$

250,000

$

250,000

 

 

Shares issued for offering costs

$

-

$

150,000

$

150,000

 

 

Convertible accounts payable owed to related party – converted to shares

$

50,000

$

-

$

50,000

 

 

Issuance of stock payable

$

600,000

$

-

$

600,000

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

F-5           

             

 

GENUFOOD ENERGY ENZYMES CORP

 (A Development Stage Company)

Notes to Consolidated Financial Statements

 

NOTE 1- BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

 

Organization and Business Operations

 

GenuFood Energy Enzymes Corp., USA (the “Company” or “GEEC”) was incorporated under the laws of the State of Nevada on June 21, 2010. GEEC is a start-up company and its main focus is to promote market, distribute and export a range of enzyme products for human and animal consumption manufactured in the Unites States for the Asian and ASEAN markets. The Company is the owner of the following trademarks, ProCellax and ProAnilax.  These trademarks and GEEC as a trademark have been filed with the United States Patent and Trademark Office under Class 005. Similarly, these trademarks have been filed in the jurisdiction of China (PRC), Hong Kong, Macau, Taiwan, Thailand, Malaysia, Singapore and Sri Lanka.

 

The Company’s objective is to commence marketing and distribution of American range of enzyme products for human and animal consumption to sole country distributors, wholesalers, dealers and retailers, as well as to the general public following the Company’s Multi Level Marketing – Franchise Investor Dealer Related (MLM-FIDR) concept, to begin with, in Taiwan, and then to China, Hong Kong, Macau, Thailand, Malaysia, Singapore and Sri Lanka.

 

On May 24, 2011, GEEC Internet Sales (Private) Limited (“GEECIS”), a wholly owned subsidiary of GEEC, was established in the Democratic Socialist Republic of Sri Lanka. GEECIS is established primarily to be responsible for GEEC’s internet sales worldwide.

 

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary GEEC Internet Sales (Private) Limited. All significant inter-company accounts and transactions have been eliminated in consolidation.

The Company is in its development stage with no significant revenues. The Company’s initial operations include organization, capital formation, target markets identification and developing marketing plans.  

 

The Company’s fiscal year end is September 30.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Development Stage Activities

 

 The accompanying consolidated financial statements have been prepared in accordance with ASC 915-10-05, Development Stage Entities. A development - stage company is one in which planned principal operations have not commenced or, if its operations have commenced, but there have been no significant revenues.

 

Use of Estimates

 

The preparation of the consolidated financial statements in conformity with generally accepted accounting principles in the United States of America (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  

 

 Revenue Recognition

 

Our revenues are generated from sales of enzyme products under our private label.

 

For sales of enzyme products under our private label – the Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition.  The Company recognizes revenue when it is realized or realizable and reduces it for the amount of estimated future doubtful accounts.  The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the products have been shipped to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.


Foreign Currency Translation and Transactions

 

The reporting and functional currency of GEEC is the United States Dollar (“U.S. dollar”). The functional currency of GEECIS, a wholly owned subsidiary of GEEC, is the Sri Lanka Rupee (“LKR”).

 

For financial reporting purposes, the financial statements of the Company’s Sri Lanka subsidiary, which are prepared using the LKR, are translated into the Company’s reporting currency, the U.S. dollar. Assets and liabilities are translated using the exchange rate on the balance sheet date, which was 0.00910 as of September 30, 2011. Revenue and expenses are translated using average exchange rates prevailing during each reporting period.  The $0.00900 average exchange rate was used to translate revenues and expenses for the reporting period ended September 30, 2011. Stockholders’ equity is translated at historical exchange rates. Historical rates of 0.00919 and 0.00920 were used to translate GEECIS equity transactions occurred during the year ended September 30, 2011. Adjustments resulting from the translation are recorded as a separate component of accumulated other comprehensive income in stockholders’ equity.

 

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transactions.  The resulting exchange differences are included in the statements of operations.

 

No representation is made that the LKR amounts could have been, or could be converted into U.S. dollar at the above rates.

 

F-6           

             

 

Cash and Cash Equivalents

 

The Company considers all highly liquid debt instruments with original maturities of three months or less when acquired to be cash equivalents.  The Company places the majority of its cash and cash equivalents with financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000.  As of September 30, 2011, the Company had $543,764 cash in banks, $524,030 of which with one financial institution, which is $274,030 in excess of FDIC limit. Company mitigates this concentration of credit risk by monitoring the credit worthiness of financial institutions and its customers. 

 

In October 2008, the Federal government temporarily increased the FDIC insured limits up to a maximum of $250,000 per depositor until January 1, 2014, after which time the insured limits will return to $100,000.  


Beneficial Conversion Features


From time to time, the Company may issue convertible debt that may have conversion prices that create an embedded beneficial conversion feature pursuant to the Emerging Issues Task Force guidance on beneficial conversion features. A beneficial conversion feature exists on the date a convertible liability is issued when the fair value of the underlying common stock to which the liability is convertible into is in excess of the face value of the liability. In accordance with this guidance, the intrinsic value of the beneficial conversion feature is recorded as a discount on the liability with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the term of the liability using the effective interest method. In cases where the liability relates to amounts owed for direct offering costs of an equity offering, the discount is charged to additional paid in capital with amortization.

 

Inventories

The Company’s inventories include enzyme products, packaging and labeling materials. Inventories are stated at the lower of cost or market value. Cost is determined using the first-in, first-out (“FIFO”) method. As of September 30, 2011, the Company had inventory balance of $2,681, which was comprised solely of packaging and labeling materials. The company did not hold any inventories at September 31, 2010.

 

Enzyme products are typically shipped from manufacturer directly to our customer, with the Company never taking title to the enzymes products prior to shipment. All related shipping costs are expensed when incurred.

 

Intangible Assets

The Company’s intangible assets consist primarily of trademarks, which are carried at amortized cost.  The company capitalizes filing and legal fees related to the trademark registration.  As of September 30, 2011, the Company did not record any trademark amortization (see Note 5-Trademarks).

 

The Company reviews its intangible assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable.  The Company assesses recoverability by reference to future cash flows from the products underlying these intangible assets.  If these estimates change in the future, the Company may be required to record impairment charges for these assets. As of September 30, 2011, no impairment was recorded.


Customer Deposit

The customer deposit represents money received by the Company in advance and will not be recognized as revenue until the products are shipped to customer. As of September 30, 2011 and 2010, the Company recorded customer deposits of $60,600 and $0, respectively.


Property, Plant and Equipment

Property, plant and equipment (PP&E) are stated at cost less accumulated depreciation. Gains or losses on disposals are recorded in the year of disposal. The cost of improvements that extend the life of property, plant, and equipment are capitalized. These capitalized costs may include structural improvements, equipment, and fixtures. All ordinary repair and maintenance costs are expensed as incurred.

 

The Company’s PP&E as of September 30, 2011 consisted of computer equipment and software with useful lives of five and three years, respectively. Depreciation is computed using the straight line method over estimated useful lives.

 

 

F-7           

             

 

Fair Value of Financial Instruments.

FASB ASC Topic 825 – Financial Instruments requires the Company to disclose, when reasonably attainable, the fair market values of its assets and liabilities which are deemed to be financial instruments. The Company's financial instruments consist primarily of cash, prepaid expenses, customer deposit, accounts payable and some other current liabilities. The Company believes that the carrying values of these financial instruments approximate their fair value due to the short-term nature of these items.

 

As defined in FASB ASC Topic No. 820 – 10 (formerly SFAS 157-Fair Value Measurements), fair value is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC Topic No. 820 – 10 requires disclosure that establishes a framework for measuring fair value and expands disclosure about fair value measurements. The statement requires fair value measurements be classified and disclosed in one of the following categories:

 

Level 1:

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.