As Filed With the Securities and Exchange Commission on April 1, 2013
Registration No. 333-______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
ANNONA ENERGY INC.
(Name of small business issuer in its charter)
Nevada 1081
(State or Other Jurisdiction (Primary Standard Industrial
of Organization) Classification Code)
2316 A Willemar Avenue
Courtenay, B.C. V9N 3M8
(250) 898 8882 Carson City, Nevada 89701 Resident Agents of Nevada
annona.energy@yahoo.com (775) 882-4641 711 S. Carson Street, Suite 4
(Address and telephone number of (Name, address and telephone number
registrant's executive office) of agent for service)
Copies to:
Kevin M. Murphy, Attorney at Law
6402 Scott Lane
Pearland, TX 77581
(281) 804-1174
info@kevinmurphylaw.com
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
If any of the securities being registered on the 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 common stock for an offering under
Rule 462(b) of the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering.
If this Form is a post-effective amendment filed under Rule 462(c) of 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 under Rule 462(d) of 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
the 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
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Securities to Amount To Be Offering Price Aggregate Registration
be Registered Registered Per Share Offering Price Fee [1]
--------------------------------------------------------------------------------
Common Stock: 6,000,000 $ 0.01 $60,000 $8.19
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[1] Estimated solely for purposes of calculating the registration fee under
Rule 457.
REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON 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 DATES
AS THE COMMISSION, ACTING UNDER SAID SECTION 8(a), MAY DETERMINE.
================================================================================
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PROSPECTUS
ANNONA ENERGY INC.
SHARES OF COMMON STOCK
3,000,000 MINIMUM - 6,000,000 MAXIMUM
We are offering 3,000,000 shares minimum, 6,000,000 shares maximum of our common
stock on a best efforts basis at an offering price of $0.01 per share (the
"Offering").
We are offering 3,000,000 shares of common stock minimum, 6,000,000 shares of
common stock maximum in a direct public offering, without any involvement of
underwriters or broker/dealers. The offering price is $0.01 per share. In the
event that 3,000,000 shares are not sold within 180 days, all money received by
us will be promptly, returned to you without deduction of any kind. The SEC
staff generally defines "promptly" as a period of up to three days. If at least
3,000,000 shares are sold within 180 days, all money received by us will be
retained by us and there will be no refund. Funds will be held in a standard
bank account. The foregoing account is not an escrow, trust or similar account.
It is merely a separate bank account under our control where we will segregate
your funds. Only our officer and director will have access to the account. You
will not have the right to withdraw your funds during the Offering. You will
only receive your funds back if we do not raise the minimum amount of the
Offering within 180 days. As a result, if we are sued for any reason and a
judgment is rendered against us, your subscription could be seized in a
garnishment proceeding. If that happens, you will lose your investment, even if
we fail to raise the minimum amount in this Offering. As a result, you may lose
your entire investment notwithstanding the purported minimum offering provisions
because the funds are not held in an escrow account and are potentially subject
to creditor claims.
Our common stock is presently not traded on any market or securities exchange.
Upon completing our public Offering, we intend to seek out an SEC registered
broker-dealer to file a Form 211 with the Financial Industry Regulatory
Authority ("FINRA"), to act as a market maker for our common stock and post a
quotation for our common stock on the OTCBB. There can be no assurance that a
market maker will agree to file the necessary documents with FINRA which
operates the OTCBB, nor can there be any assurance that such an application for
quotation will be approved.
Our common stock will be sold on our behalf by Lawrence Jean, our sole officer
and director. He will not receive any commissions or proceeds from the Offering
for selling shares on our behalf.
WE ARE AN "EMERGING GROWTH COMPANY" AS DEFINED UNDER THE FEDERAL SECURITIES LAWS
AND, AS SUCH, MAY ELECT TO COMPLY WITH CERTAIN REDUCED PUBLIC COMPANY REPORTING
REQUIREMENTS FOR FUTURE FILINGS.
Offering Price Proceeds to Us
-------------- --------------
Per Share - Minimum $ 0.01 $ 0.01
Per Share - Maximum $ 0.01 $ 0.01
Minimum $30,000 $30,000
Maximum $60,000 $60,000
INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" STARTING AT
PAGE 4. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is _______________________.
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TABLE OF CONTENTS
Page No.
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SUMMARY OF PROSPECTUS 2
General Information about Our Company 2
The Offering 2
RISK FACTORS 4
RISKS ASSOCIATED WITH OUR COMPANY 6
RISKS ASSOCIATED WITH THIS OFFERING 10
USE OF PROCEEDS 11
DETERMINATION OF OFFERING PRICE 12
DILUTION 12
PLAN OF DISTRIBUTION 14
Offering will be Sold by Our Officer and Director 14
Terms of the Offering 14
Deposit of Offering Proceeds 15
Procedures for and Requirements for Subscribing 15
DESCRIPTION OF SECURITIES 15
INTEREST OF NAMED EXPERTS AND COUNSEL 16
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION 16
DESCRIPTION OF OUR BUSINESS 19
General Information 19
Acquisition of Mineral Claim 19
Competition 21
Compliance with Government Regulations 23
Employees and Employment Agreements 27
DESCRIPTION OF PROPERTY 28
LEGAL PROCEEDINGS 28
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 29
WHERE YOU CAN FIND MORE INFORMATION 31
FINANCIAL STATEMENTS 31
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON FINANCIAL DISCLOSURE 31
DIRECTOR, EXECUTIVE OFFICER, PROMOTER AND CONTROL PERSON 31
EXECUTIVE COMPENSATION 33
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNER & MGMT 34
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 34
INDEMNIFICATION 35
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SUMMARY OF OUR OFFERING
OUR BUSINESS
We were incorporated on October 22, 2012. We are an exploration stage
corporation engaged in the search for oil and gas. Our business plan is to
develop oil and gas leases with the intent of reworking older drilled wells
which are not currently producing, but still have the well-bore in place. Due to
the higher price of crude oil and natural gas and utilizing new technology the
wells can be reworked with the intent of making them profitable.
We have no revenues, have a loss since inception, have minimal operations, have
been issued a going concern opinion and rely upon the sale of our securities and
loans from our officer and director to fund operations.
Our mailing address is located at 2316-A Willemar Avenue, Courtenay, B.C. V9N
3M8, Canada and our telephone number is (250) 898 8882. This is the home of
Lawrence Jean, our president. We use approximately 100 square feet on a rent
free basis. Our registered statutory office is located at 711 S. Carson Street,
Suite 4, Carson City, Nevada 89701.
There is no current public market for our securities. As our stock is not
publicly traded, investors should be aware they probably will be unable to sell
their shares and their investment in our securities is not liquid.
THE OFFERING
Following is a brief summary of this Offering:
Securities being offered A minimum of 3,000,000 of common stock and a
maximum of 6,000,000 shares of common stock,
par value $0.001.
Offering price per share $0.01
Offering period The shares are being offered for a period not
to exceed 180 days.
Net proceeds to us $30,000, assuming the minimum number of shares
are sold and $60,000, assuming the maximum
number of shares are sold.
Use of proceeds We will use the proceeds to pay for offering
expenses, research and exploration.
Number of shares outstanding
before the Offering 7,500,000
Number of shares outstanding
after the Offering if all of
the shares are sold 13,500,000
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RISK FACTORS
An investment in these securities involves an exceptionally high degree of risk
and is extremely speculative in nature. Following are what we believe to be all
the material risks involved if you decide to purchase shares in this Offering.
RISKS ASSOCIATED WITH THE BUSINESS OF ANNONA ENERGY
1. WE DO NOT OWN ANY INTERESTS IN ANY PROPERTIES.
We do not own any interests in any oil and gas properties. We intend to use the
proceeds from this public Offering to acquire an interest in one oil and gas
lease. There is no assurance, however, that we will ever acquire any interest in
any properties.
2. PRICES OF OIL AND NATURAL GAS ARE VOLATILE, AND A DECLINE IN SUCH PRICES
WOULD ADVERSELY AFFECT US.
Global economic conditions, political conditions, and energy conservation have
created volatile prices for oil and natural gas. Oil and natural gas prices may
fluctuate significantly in response to minor changes in supply, demand, market
uncertainty, political conditions in oil-producing countries, activities of
oil-producing countries to limit production, global economic conditions, weather
conditions and other factors that are beyond our control. The prices for
domestic oil and natural gas production have varied substantially over time and
may in the future decline, which would adversely affect us. Prices for oil and
natural gas have been and are likely to remain extremely volatile.
3. TITLE TO OUR OIL AND GAS LEASES COULD BE DEFECTIVE IN WHICH CASE WE MAY NOT
OWN THE INTERESTS THAT WE BELIEVE WE DO.
It is customary in the oil and gas industry that upon acquiring an interest in a
property, that only a preliminary title investigation be done at that time. We
intend to follow this custom. If the title to the prospects should prove to be
defective, we could lose the costs of acquisition, or incur substantial costs
for curative title work.
4. IF WE FIND GAS OUR WELLS COULD BE SHUT-IN AND REVENUES COULD BE CURTAILED.
Production from gas wells in many geographic areas of the United States has been
curtailed or shut-in for considerable periods of time due to a lack of market
demand, and such curtailments may continue for a considerable period of time in
the future. There may be an excess supply of gas in areas where our operations
will be conducted. In such event, it is possible that there will be no market or
a very limited market for our gas production. It is customary in many areas of
the U.S. to shut-in gas wells in the spring and summer when there is not
sufficient demand for gas. This could result in suspension of revenues.
5. OPERATING AND ENVIRONMENTAL HAZARDS COULD HAVE A NEGATIVE IMPACT ON OUR
OPERATIONS.
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Hazards incident to the operation of oil and gas properties, such as accidental
leakage of petroleum liquids and other unforeseen conditions, may be encountered
by us if we participate in developing a well and, on occasion, substantial
liabilities to third parties or governmental entities may be incurred. We could
be subject to liability for pollution and other damages or may lose substantial
portions of prospects or producing properties due to hazards which cannot be
insured against or which have not been insured against due to prohibitive
premium costs or for other reasons. We currently do not maintain any insurance
for environmental damages. Governmental regulations relating to environmental
matters could also increase the cost of doing business or require alteration or
cessation of operations in certain areas.
6. BECAUSE THE PROBABILITY OF AN INDIVIDUAL PROSPECT EVER HAVING OIL AND GAS IS
EXTREMELY REMOTE ANY FUNDS SPENT ON EXPLORATION WILL PROBABLY BE LOST.
The probability of an individual prospect ever having oil and gas is extremely
remote. In all probability the property does not contain any oil and gas. As
such, any funds spent on exploration will probably be lost which result in a
loss of your investment.
7. OIL AND NATURAL GAS INVESTMENTS ARE HIGHLY RISKY, AND THERE IS A POSSIBILITY
YOU WILL LOSE ALL OF YOUR INVESTMENT.
The selection of prospects for oil and natural gas drilling, the drilling,
ownership and operation of oil and natural gas wells, and the ownership of
non-operating interests in oil and natural gas properties are highly
speculative. There is a possibility you will lose all or substantially all of
your investment. We cannot predict whether any prospect will produce oil or
natural gas or commercial quantities of oil or natural gas, nor can we predict
the amount of time it will take to recover any oil or natural gas we do produce.
Our activities may be unprofitable, not only from non-productive wells, but from
wells that do not produce oil or natural gas in sufficient quantities or quality
to return a profit.
8. COMPETITION, MARKET CONDITIONS AND GOVERNMENT REGULATION MAY ADVERSELY AFFECT
US.
A large number of companies and individuals engage in the search for oil and
natural gas. As a result, there is intense competition for the most desirable
prospects. The sale of any oil or natural gas found and produced will be
affected by fluctuating market conditions and regulations, including
environmental standards, set by state and federal agencies. Governmental
regulations may fix rates of production wells, and the prices for oil and
natural gas produced from the wells may be limited. From time-to-time, a surplus
of oil and natural gas occurs in areas of the United States. The effect of a
surplus may be to reduce the price we may receive for our oil or natural gas
production, or to reduce the amount of oil or natural gas that we may produce
and sell.
9. ENVIRONMENTAL HAZARDS AND LIABILITIES MAY ADVERSELY AFFECT US.
There are numerous natural hazards involved with oil and natural gas wells,
including unexpected or unusual pressures, blowouts involving possible damages
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to property and third parties, surface damages, bodily injuries, damage to and
loss of equipment, reservoir damage and loss of reserves. There are also hazards
involved in the transportation of oil and natural gas from our wells to market.
Such hazards include pipeline leakage and risks associated with the spilling of
oil transported via barge instead of pipeline, both of which could result in
liabilities associated with environmental cleanup. Uninsured liabilities would
reduce the funds available to us and may result in the loss of properties.
10. THE PRODUCTION AND PRODUCING LIFE OF WELLS IS UNCERTAIN. PRODUCTION WILL
DECLINE.
It is not possible to predict the life and production of any well. The actual
lives could differ significantly from those anticipated. Sufficient oil or
natural gas may not be produced for you to receive a profit or even to recover
your initial investment. In addition, production from oil and natural gas wells,
if any, will decline over time, and does not indicate any consistent level of
future production. This production decline may be rapid and irregular when
compared to a well's initial production.
RISKS ASSOCIATED WITH OUR COMPANY
11. OUR AUDITORS HAVE ISSUED A GOING CONCERN OPINION, THEREFORE THERE IS
SUBSTANTIAL UNCERTAINTY WE WILL CONTINUE ACTIVITIES IN WHICH CASE YOU COULD LOSE
YOUR INVESTMENT.
Our auditors have issued a going concern opinion. This means that there is
substantial doubt that we can continue as an ongoing business for the next
twelve months. As such we may have to cease activities and you could lose your
investment.
12. WE LACK AN OPERATING HISTORY AND HAVE LOSSES WHICH WE EXPECT TO CONTINUE
INTO THE FUTURE. AS A RESULT, WE MAY HAVE TO SUSPEND OR CEASE ACTIVITIES.
We were incorporated in October 2012 and we have not started our proposed
business activities or realized any revenues. We have no operating history upon
which an evaluation of our future success or failure can be made. Our net loss
was $943 from inception to December 31, 2012. Our ability to achieve and
maintain profitability and positive cash flow is dependent upon:
* our ability to locate a profitable oil & gas property
* our ability to generate revenues
* our ability to reduce operating costs
Based upon current plans, we expect to incur operating losses in future periods.
This will happen because there are expenses associated with the research and
reactivation of oil & gas properties. As a result, we may not generate revenues
in the future. Failure to generate revenues may cause us to suspend or cease
activities.
13. BECAUSE WE ARE SMALL AND DO NOT HAVE MUCH CAPITAL, WE MAY HAVE TO LIMIT OUR
ACQUISITION ACTIVITY WHICH MAY RESULT IN A LOSS OF YOUR INVESTMENT.
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Because we are small and do not have much capital, we must limit our acquisition
activity. As such we may not be able to lease as many properties as we would
like. In that event, a profitable oil or gas reserve may go undiscovered.
Without producing wells we cannot generate revenues and you will lose your
investment.
14. WE WILL BE RELIANT UPON AN OUTSIDE OPERATOR TO REWORK THE WELLS AND MONITOR
THE DAY TO DAY OPERATION. IF THE OPERATOR FAILS TO CARRY OUT THE TERMS OF OUR
AGREEMENT OR WE LOSE THE SERVICES OF THE OPERATOR OUR BUSINESS MAY FAIL.
We do not currently have a well. If we are able to procure a well once our
Offering is complete, the re-working and monthly maintenance of the well once
production commences will be carried out by an independent operator in the area
where the well is located. Any failure to live up to the terms of any future
agreement or an outright cancellation of an agreement could have an adverse
effect on production and future revenues, consequently our operations, earnings
and ultimate financial success may suffer irreparable harm as a result.
15. BECAUSE OUR SOLE OFFICER AND/OR DIRECTOR DOES NOT HAVE ANY FORMAL TRAINING
SPECIFIC TO THE TECHNICALITIES OF OIL AND GAS EXPLORATION, THERE IS A HIGHER
RISK OUR BUSINESS WILL FAIL.
Our sole officer and director is Lawrence Jean. Mr. Jean has no formal training
as a geologist or in the technical aspects of management of an oil and gas
company. With no direct training or experience in the oil and gas industry, he
may not be fully aware of the specific requirements related to working within
this industry. His decisions and choices may not take into account standard
engineering or managerial approaches oil and gas companies commonly use.
Consequently, our operations, earnings, and ultimate financial success could
suffer irreparable harm due to his lack of experience in this industry.
16. BECAUSE OUR OFFICER AND DIRECTOR HAS OTHER OUTSIDE BUSINESS ACTIVITIES AND
WILL ONLY BE DEVOTING 7 TO 12% OF HIS TIME OR APPROXIMATELY THREE TO FIVE HOURS
PER WEEK TO OUR OPERATIONS, OUR OPERATIONS MAY BE SPORADIC WHICH MAY RESULT IN
PERIODIC INTERRUPTIONS OR SUSPENSIONS OF EXPLORATION.
Because our officer and director has other outside business activities and will
only be devoting 7 to 12% of his time or three to five hours per week to our
operations, our operations may be sporadic and occur at times which are
convenient to our officer and director. As a result our business plan may be
periodically interrupted or suspended.
17. OUR DIRECTOR WILL CONTINUE TO EXERCISE SIGNIFICANT CONTROL OVER OUR
OPERATIONS, WHICH MEANS AS A MINORITY STOCKHOLDER, YOU WOULD HAVE NO CONTROL
OVER CERTAIN MATTERS REQUIRING STOCKHOLDER APPROVAL THAT COULD AFFECT YOUR
ABILITY TO EVER RESELL ANY SHARES YOU PURCHASE IN THIS OFFERING.
After the completion of this Offering, if all 6,000,000 shares are sold, our
executive officer and director will own 56% of our common stock. He will have
significant influence in determining the outcome of all corporate transactions,
including the election of directors, approval of significant corporate
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transactions, changes in control of the company or other matters that could
affect your ability to ever resell your shares. His interests may differ from
the interests of the other stockholders and thus result in corporate decisions
that are disadvantageous to other stockholders.
18. OUR SOLE OFFICER AND DIRECTOR LIVES OUTSIDE THE UNITED STATES, MAKING IT
DIFFICULT FOR AN INVESTOR TO ENFORCE LIABILITIES IN FOREIGN JURISDICTIONS.
We are a Nevada corporation and, as such, are subject to the jurisdiction of the
State of Nevada and the United States courts for purposes of any lawsuit, action
or proceeding by investors herein. An investor would have the ability to effect
service of process in any action on the company within the United States.
However, since our officer and director resides outside the United States,
substantially all or a portion of his assets are located outside the United
States. As a result, it may not be possible for investors to effect service of
process within the United States upon him or to enforce any judgments obtained
in United States courts predicated upon the civil liability provisions of the
federal securities laws of the United States or any state thereof.
19. WE ARE AN "EMERGING GROWTH COMPANY" AND WE CANNOT BE CERTAIN IF THE REDUCED
DISCLOSURE REQUIREMENTS APPLICABLE TO EMERGING GROWTH COMPANIES WILL MAKE OUR
COMMON STOCK LESS ATTRACTIVE TO INVESTORS.
We are an "emerging growth company," as defined in the JOBS Act, and we are
eligible to take advantage of certain exemptions from various reporting
requirements that are applicable to other public companies that are not
"emerging growth companies" including, but not limited to, not being required to
comply with the auditor attestation requirements of Section 404 of the
Sarbanes-Oxley Act, reduced disclosure obligations regarding executive
compensation in our periodic reports and proxy statements, and exemptions from
the requirements of holding a nonbinding advisory vote on executive compensation
and shareholder approval of any golden parachute payments not previously
approved. In addition, Section 107 of the JOBS Act also provides that an
emerging growth company can take advantage of the extended transition period
provided in Section 7(a)(2)(B) of the Securities Act for complying with new or
revised accounting standards. An emerging growth company can therefore delay the
adoption of certain accounting standards until those standards would otherwise
apply to private companies. We have elected to take advantage of the benefits of
this extended transition period. Our financial statements may therefore not be
comparable to those of companies that comply with such new or revised accounting
standards. We will cease to be an emerging growth company as described in the
following risk factor. Until such time, however, we cannot predict if investors
will find our common stock less attractive because we may rely on these
exemptions. If some investors find our common stock less attractive as a result,
there may be a less active trading market for our common stock and our stock
price may be more volatile.
20. WHILE WE CURRENTLY QUALIFY AS AN "EMERGING GROWTH COMPANY" UNDER THE JOBS
ACT, WHEN WE LOSE THAT STATUS IT WILL INCREASE THE COSTS AND DEMANDS PLACED UPON
MANAGEMENT.
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We will continue to be deemed an emerging growth company until the earliest of
(i) the last day of the fiscal year during which we had total annual gross
revenues of $1,000,000,000 (as indexed for inflation), (ii) the last day of the
fiscal year following the fifth anniversary of the date of the first sale of
common stock under this registration statement; (iii) the date on which we have,
during the previous 3-year period, issued more than $1,000,000,000 in
non-convertible debt; or (iv) the date on which we are deemed to be a `large
accelerated filer' as defined by the SEC, which would generally occur upon our
attaining a public float of at least $700 million. Once we lose emerging growth
company status, we expect the costs and demands placed upon management to
increase, as we would have to comply with additional disclosure and accounting
requirements, particularly if our public float should exceed $75 million.
21. BECAUSE OUR COMMON STOCK IS NOT REGISTERED UNDER THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED, WE WILL NOT BE SUBJECT TO THE FEDERAL PROXY RULES AND OUR
DIRECTORS, EXECUTIVE OFFICERS AND 10% BENEFICIAL HOLDERS WILL NOT BE SUBJECT TO
SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. IN ADDITION OUR
REPORTING OBLIGATIONS UNDER SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, MAY BE SUSPENDED AUTOMATICALLY IF WE HAVE FEWER THAN 300
SHAREHOLDERS OF RECORD ON THE FIRST DAY OF OUR FISCAL YEAR.
Our common stock is not registered under the Exchange Act, and we do not intend
to register our common stock under the Exchange Act for the foreseeable future.
As long as our common stock is not registered under the Exchange Act, we will
not be subject to Section 14 of the Exchange Act, which, among other things,
prohibits companies that have securities registered under the Exchange Act from
soliciting proxies or consents from shareholders without furnishing to
shareholders and filing with the SEC a proxy statement and form of proxy
complying with the proxy rules. In addition, so long as our common stock is not
registered under the Exchange Act, our directors and executive officers and
beneficial holders of 10% or more of our outstanding common stock will not be
subject to Section 16 of the Exchange Act. Section 16(a) of the Exchange Act
requires executive officers and directors, and persons who beneficially own more
than 10% of a registered class of equity securities to file with the SEC initial
statements of beneficial ownership, reports of changes in ownership and annual
reports concerning their ownership of common shares and other equity securities,
on Forms 3, 4, and 5 respectively. Such information about our directors,
executive officers, and beneficial holders will only be available through
periodic reports and any registration statements on Form S-1 we file.
Furthermore, so long as our common stock is not registered under the Exchange
Act, our obligation to file reports under Section 15(d) of the Exchange Act will
be automatically suspended if, on the first day of any fiscal year (other than a
fiscal year in which a registration statement under the Securities Act has gone
effective), we have fewer than 300 shareholders of record. This suspension is
automatic and does not require any filing with the SEC. In such an event, we may
cease providing periodic reports and current or periodic information, including
operational and financial information, may not be available with respect to our
results of operations.
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RISKS ASSOCIATED WITH THIS OFFERING
22. IF A MARKET FOR OUR COMMON STOCK DOES NOT DEVELOP, STOCKHOLDERS MAY BE
UNABLE TO SELL THEIR SHARES AND WILL INCUR LOSSES AS A RESULT.
There is currently no market for our common stock and no certainty that a market
will develop. We currently plan to apply for quotation of our common stock on
FINRA's Over the Counter Bulletin Board ("OTCBB") upon the effectiveness of our
Registration Statement on Form S-1, of which this prospectus forms a part. Our
shares may never trade on the OTCBB. If no market is ever developed for our
shares, it will be difficult for stockholders to sell their stock. In such a
case, stockholders may find that they are unable to achieve benefits from their
investment.
23. A PURCHASER IS PURCHASING PENNY STOCK WHICH LIMITS HIS OR HER ABILITY TO
SELL THE STOCK.
The shares offered by this prospectus constitute penny stock under the Exchange
Act. The shares will remain penny stock for the foreseeable future. The
classification of penny stock makes it more difficult for a broker-dealer to
sell the stock into a secondary market, thus limiting investment liquidity. Any
broker-dealer engaged by the purchaser for the purpose of selling his or her
shares in our company will be subject to rules 15g-1 through 15g-10 of the
Exchange Act. Rather than creating a need to comply with those rules, some
broker-dealers will refuse to attempt to sell penny stock.
24. WE ARE SELLING THIS OFFERING WITHOUT AN UNDERWRITER AND MAY BE UNABLE TO
SELL ANY SHARES.
This Offering is self-underwritten, that is, we are not going to engage the
services of an underwriter to sell the shares; we intend to sell them through
our officer and director, who will receive no commissions. He will offer the
shares to friends, relatives and business associates, however; there is no
guarantee that he will be able to sell any of the shares. Unless he is
successful in selling all of the shares and we receive the proceeds from this
Offering, we may have to seek alternative financing to implement our business
plans.
25. YOU WILL INCUR IMMEDIATE AND SUBSTANTIAL DILUTION OF THE PRICE YOU PAY FOR
YOUR SHARES.
Our existing stockholder acquired his shares at a cost of $.001 per share, a
cost per share substantially less than that which you will pay for the shares
you purchase in this Offering. Upon completion of this Offering, and assuming
all 6,000,000 shares are sold, the net tangible book value of the shares held by
our existing stockholder (7,500,000 shares) will be increased by $.004 per share
without any additional investment on his part. The purchasers of shares in this
Offering will incur immediate dilution (a reduction in the net tangible book
value per share from the Offering price of $.01 per share) of $.005 per share.
As a result, after completion of the Offering, the net tangible book value of
the shares held by purchasers in this Offering would be $.0049 per share,
reflecting an immediate reduction in the $.01 price per share they paid for
their shares.
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26. WE WILL BE HOLDING ALL THE PROCEEDS FROM THE OFFERING IN A STANDARD BANK
CHECKING ACCOUNT UNTIL ALL SHARES ARE SOLD. BECAUSE THE SHARES ARE NOT HELD IN
AN ESCROW OR TRUST ACCOUNT THERE IS A RISK YOUR MONEY WILL NOT BE RETURNED IF
ALL THE SHARES ARE NOT SOLD.
All funds received from the sale of shares in this Offering will be deposited
into a standard bank checking account until all shares are sold or the Offering
is closed, at which time, the proceeds will be transferred to our business
operating account. In the event the minimum of 3,000,000 shares are not sold we
have committed to promptly return all funds to the original purchasers. However
since the funds will not be placed into an escrow, trust or other similar
account, any third party creditor who may obtain a judgment or lien against us
could satisfy the judgment or lien by executing on the bank account where the
Offering proceeds are being held, resulting in a loss of any investment you make
in our securities.
27. WE WILL INCUR ONGOING COSTS AND EXPENSES FOR U.S. SECURITIES AND EXCHANGE
COMMISSION REPORTING AND COMPLIANCE. WITHOUT REVENUE WE MAY NOT BE ABLE TO
REMAIN IN COMPLIANCE, MAKING IT DIFFICULT FOR INVESTORS TO SELL THEIR SHARES, IF
AT ALL.
Our business plan allows for the payment of the estimated costs of this
registration statement ($6,500) to be paid from existing cash on hand. We plan
to contact a market maker immediately following the close of the Offering and
apply to have the shares quoted on the OTCBB. To be eligible for quotation,
issuers must remain current in their filings with the U.S. Securities and
Exchange Commission. In order for us to remain in compliance we will require
future revenues to cover the cost of these filings, which could comprise a
substantial portion of our available cash resources. If we are unable to
generate sufficient revenues to remain in compliance it may be difficult for you
to resell any shares you may purchase, if at all.
28. OUR SOLE OFFICER AND DIRECTOR, BENEFICIALLY OWNS 100% OF THE OUTSTANDING
SHARES OF OUR COMMON STOCK. AFTER THE COMPLETION OF THIS OFFERING HE WILL OWN
56% OF THE OUTSTANDING SHARES. IF HE CHOOSES TO SELL HIS SHARES IN THE FUTURE,
IT MIGHT HAVE AN ADVERSE EFFECT ON THE PRICE OF OUR STOCK.
Due to the amount of Mr. Jean's share ownership in our company, if he chooses to
sell his shares in the public market, the market price of our stock could
decrease and all stockholders suffer a dilution of the value of their stock.
USE OF PROCEEDS
Our Offering is being made on a self-underwritten basis: no minimum number of
shares must be sold in order for the Offering to proceed. The Offering price per
share is $0.01. The following table sets forth the scenarios for the use of
proceeds assuming the sale of 3,000,000 to 6,000,000 shares of the securities
being offered for sale by the Company.
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Number of Shares Sold 3,000,000 4,000,000 5,000,000 6,000,000
--------------------- --------- --------- --------- ---------
Proceeds to the Company $30,000 $40,000 $50,000 $60,000
Purchase of One Lease $ 6,000 $ 6,000 $ 6,000 $ 6,000
Purchase of Second Lease $ 0 $ 0 $ 0 $ 6,000
Rework Program $16,000 $16,000 $16,000 $32,000
Monthly Maintenance (6 mo @ $400 mo) $ 2,400 $ 2,400 $ 2,400 $ 4,800
Audit & Legal $ 5,000 $ 5,000 $ 5,000 $ 5,000
Working Capital $ 600 $10,600 $20,600 $ 6,200
We will establish a separate bank account and all proceeds will be deposited
into that account until the minimum amount of the Offering (3,000,000 shares) is
received or the Offering is closed, at which time the funds will be released to
us for use in our operations. In the event we do not sell the minimum number of
shares before the expiration date of the Offering, all funds will be returned
promptly to the subscribers, without interest or deduction. If it becomes
necessary our director has verbally agreed to loan the company funds to complete
the registration process, but we will require full funding to implement our
business plan.
DETERMINATION OF OFFERING PRICE
The Offering price of the shares has been determined arbitrarily by us. The
price does not bear any relationship to our assets, book value, earnings, or
other established criteria for valuing a privately held company. In determining
the number of shares to be offered and the Offering price, we took into
consideration our cash on hand and the amount of money we would need to
implement our business plans. Accordingly, the offering price should not be
considered an indication of the actual value of the securities.
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.
As of December 31, 2012, the net tangible book value of our shares was $6,557 or
approximately $.0009 per share, based upon 7,500,000 shares outstanding.
Upon 100% completion of this Offering, but without taking into account any
change in the net tangible book value after completion of this Offering other
than that resulting from the sale of all the shares and receipt of the total
proceeds of $60,000, the net tangible book value of the 13,500,000 shares to be
outstanding will be $66,557, or approximately $.0049 per Share. Accordingly, the
net tangible book value of the shares held by our existing stockholder
(7,500,000 shares) will be increased by $.004 per share without any additional
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investment on his part. The purchasers of shares in this Offering will incur
immediate dilution (a reduction in the net tangible book value per share from
the Offering price of $.01 per Share) of $.005 per share. As a result, after
completion of the Offering, the net tangible book value of the shares held by
purchasers in this offering would be $.0049 per share, reflecting an immediate
reduction in the $.01 price per share they paid for their shares.
After 100% completion of the Offering, the existing stockholder will own 56% of
the total number of shares then outstanding, for which he will have made a cash
investment of $7,500, or $.001 per Share. Upon completion of the Offering, the
purchasers of the shares offered hereby will own 44% of the total number of
shares then outstanding, for which they will have made a cash investment of
$60,000, or $.01 per Share.
The following table illustrates the per share dilution to the new investors in
the event only a percentage of the shares are sold, and if all the shares are
sold, and does not give any effect to the results of any operations subsequent
to December 31, 2012:
Number of Shares 6,000,000 5,000,000 4,000,000 3,000,000
---------------- --------- --------- --------- ---------
Proceeds to the Company $60,000 $50,000 $40,000 $30,000
Price Paid per Share by Existing Stockholder $ .001 $ .001 $ .001 $ .001
Public Offering Price per Share $ .01 $ .01 $ .01 $ .01
Net Tangible Book Value Prior to this Offering $ .0009 $ .0009 $ .0009 $ .0009
Net Tangible Book Value After this Offering $ .0049 $ .0045 $ .0040 $ .0035
Increase in Net Tangible Book Value per Share
Attributable to cash payments from purchasers
of the shares offered $ .004 $ .004 $ .003 $ .003
Immediate Dilution per Share to New Investors $ .005 $ .005 $ .006 $ .007
The following table summarizes the number and percentage of shares purchased,
the amount and percentage of consideration paid and the average price per Share
paid by our existing stockholder and by new investors in this Offering:
Total Price Number of Percent of Consideration
Per Share Shares Held Ownership Paid
--------- ----------- --------- ----
Existing
Stockholder $ .001 7,500,000 56% $ 7,500
Investors in
This Offering $ .01 6,000,000 44% $60,000
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PLAN OF DISTRIBUTION
OFFERING WILL BE SOLD BY OUR OFFICER AND DIRECTOR
This is a self-underwritten offering. This Prospectus is part of a prospectus
that permits our officer and director to sell the shares directly to the public,
with no commission or other remuneration payable to him for any shares he may
sell. There are no plans or arrangements to enter into any contracts or
agreements to sell the shares with a broker or dealer. Lawrence Jean, our
officer and director, will sell the shares and intends to offer them to friends,
family members and business acquaintances. In offering the securities on our
behalf, he will rely on the safe harbor from broker dealer registration set out
in Rule 3a4-1 under the Securities Exchange Act of 1934.
Our officer and director will not register as a broker-dealer pursuant to
Section 15 of the Securities Exchange Act of 1934, in reliance upon Rule 3a4-1,
which sets forth those conditions under which a person associated with an Issuer
may participate in the Offering of the Issuer's securities and not be deemed to
be a broker-dealer.
a. Our officer and director is not subject to a statutory
disqualification, as that term is defined in Section 3(a)(39) of the
Act, at the time of his participation; and,
b. Our officer and director will not be compensated in connection with
his participation by the payment of commissions or other remuneration
based either directly or indirectly on transactions in securities; and
c. Our officer and director is not, nor will he be at the time of his
participation in the Offering, an associated person of a
broker-dealer; and
d. Our officer and director meets the conditions of paragraph (a)(4)(ii)
of Rule 3a4-1 of the Exchange Act, in that he (A) primarily performs,
or is intended primarily to perform at the end of the Offering,
substantial duties for or on behalf of our company, other than in
connection with transactions in securities; and (B) is not a broker or
dealer, or been an associated person of a broker or dealer, within the
preceding twelve months; and (C) has not participated in selling and
offering securities for any Issuer more than once every twelve months
other than in reliance on Paragraphs (a)(4)(i) or (a)(4)(iii).
Our officer, director, control person and affiliates do not intend to purchase
any shares in this Offering.
TERMS OF THE OFFERING
The shares will be sold at the fixed price of $.01 per share until the
completion of this Offering. There is no minimum amount of subscription required
per investor, and subscriptions, once received, are irrevocable.
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This Offering will commence on the date of this prospectus and continue for a
period of 180 days (the "Expiration Date"), unless extended by our Board of
Directors for an additional 90 days. If the board of directors votes to extend
the Offering for the additional 90 days, a post-effective amendment to the
registration statement will be filed to notify subscribers and potential
subscribers of the extended Offering period. Anyone who has subscribed to the
Offering prior to the extension will be notified by the company that their money
will be promptly refunded prior to the expiration of the original Offering
unless they provide an affirmative statement that they wish to subscribe to the
extended offer.
DEPOSIT OF OFFERING PROCEEDS
This is a "min-max" Offering and, as such, we will not be able to spend any of
the proceeds unless a minimum of 3,000,000 shares are sold. We intend to hold
all funds collected from subscriptions in a separate bank account, until the
minimum amount of $30,000 has been received. At that time, the funds will be
transferred to our business account for use in the implementation of our
business plan. In the event the minimum Offering is not sold out prior to the
Expiration Date, all money will be promptly returned to the investors, without
interest or deduction within 3 business days. We determined the use of the
standard bank account was the most efficient use of our current limited funds.
Please see the risk factor section to read the related risk to you as a
purchaser of any shares.
PROCEDURES AND REQUIREMENTS FOR SUBSCRIPTION
If you decide to subscribe for any shares in this Offering, you will be required
to execute a Subscription Agreement and tender it, together with a check, bank
draft or cashier's check payable to the company. Subscriptions, once received by
the company, are irrevocable. All checks for subscriptions should be made
payable to Annona Energy, Inc.
DESCRIPTION OF SECURITIES
COMMON STOCK
The authorized capital stock of the Company consists of 75,000,000 shares of
Common Stock, par value $.001. The holders of common stock currently (i) have
equal ratable rights to dividends from funds legally available therefore, when,
as and if declared by the Board of Directors of the Company; (ii) are entitled
to share ratably in all of the assets of the Company available for distribution
to holders of common stock upon liquidation, dissolution or winding up of the
affairs of the Company; (iii) do not have preemptive, subscription or conversion
rights and there are no redemption or sinking fund provisions or rights
applicable thereto; and (iv) are entitled to one non-cumulative vote per share
on all matters on which stockholders may vote. All shares of common stock now
outstanding are fully paid for and non-assessable and all shares of common stock
which are the subject of this Offering, when issued, will be fully paid for and
non-assessable. Please refer to the Company's Articles of Incorporation, Bylaws
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and the applicable statutes of the State of Nevada for a more complete
description of the rights and liabilities of holders of the Company's
securities.
NON-CUMULATIVE VOTING
The holders of shares of common stock of the Company do not have cumulative
voting rights, which means that the holders of more than 50% of such outstanding
shares, voting for the election of directors, can elect all of the directors to
be elected, if they so choose, and, in such event, the holders of the remaining
shares will not be able to elect any of the Company's directors. After this
Offering is completed, and assuming all 6,000,000 shares are sold, the present
stockholder will own 56% of the outstanding shares. (See "Principal
Stockholders".)
CASH DIVIDENDS
As of the date of this prospectus, the Company has not declared or paid any cash
dividends to stockholders. The declaration or payment of any future cash
dividend will be at the discretion of the Board of Directors and will depend
upon the earnings, if any, capital requirements and financial position of the
Company, general economic conditions, and other pertinent factors. It is the
present intention of the Company not to declare or pay any cash dividends in the
foreseeable future, but rather to reinvest earnings, if any, in the Company's
business operations.
INTEREST OF NAMED EXPERTS AND COUNSEL
None of the below described experts or counsel have been hired on a contingent
basis and none of them will receive a direct or indirect interest in the
Company.
Our financial statements for the period from inception ("October 22, 2012") to
the year ended December 31, 2012, included in this prospectus, have been audited
by Anton & Chia, LLP. We include the financial statements in reliance on their
reports, given upon their authority as experts in accounting and auditing.
Kevin M. Murphy, Attorney at Law, has acted as special counsel to Annona Energy,
Inc. for the limited purpose of rendering an opinion in connection with the
registration and proposed sale of the 6,000,000 shares of common stock at $0.01
per share.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION
This section of the prospectus includes a number of forward-looking statements
that reflect our current views with respect to future events and financial
performance. Forward-looking statements are often identified by words like:
believe, expect, estimate, anticipate, intend, project and similar expressions,
or words which, by their nature, refer to future events. You should not place
undue certainty on these forward-looking statements, which apply only as of the
date of this prospectus. These forward-looking statements are subject to certain
risks and uncertainties that could cause actual results to differ materially
from historical results or out predictions.
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PLAN OF OPERATION
We are a start-up, exploration stage company and have not yet generated or
realized any revenues from our business operations. An exploration stage company
is one engaged in the search for oil and gas reserves which are not in either
the development or production stage.
Our auditors have issued a going concern opinion. This means that there is
substantial doubt that we can continue as an on-going business for the next
twelve months unless we obtain additional capital to pay our bills. This is
because we have not generated any revenues and no revenues are anticipated until
we begin selling oil and gas. Accordingly, we must raise cash from sources other
than the sale of oil and gas. Our only other source for cash at this time is
investments by others in this Offering. We must raise cash to implement our
project and stay in business. The minimum amount of the Offering will allow us
to operate for at least one year. Our success or failure will be determined by
what we find under the ground. The more money we raise, the more oil and gas
leases we can acquire. We will not acquire an oil and gas lease until we raise
money from this Offering.
We believe we will need to raise the minimum amount in this Offering of $30,000
in order to acquire one lease with at least one drilled well bore that is
currently non-producing and rework it on the property. If we are able to raise
more than the minimum Offering this would allow us to acquire one or more
leases. We have targeted the geographical area of Caddo and Bossier Parishes in
northwest Louisiana.
Any oil and gas that may be produced on our lease would be distributed through
oil and gas gathering companies in the area. The local operator who we will hire
would make the arrangements with the trucking or gathering companies. If we do
find a lease with a drilled well bore that is currently non-producing and are
able to rework the well, the distribution agreements for oil generally provides
for it to be picked up and trucked to point of sale. We would then be paid for
our oil at the market price at the time of delivery less any transportation
charges from the trucking or gathering company. These charges can range from 5%
upward of the market value of the gas, depending on the competition among
transmission companies in the area of the wells.
If we are able to find a drilled well bore that is non-producing and is not able
to rework it, we would have to suspend operations until we raised more money. If
we are unable to raise more money, we may have to cease operations.
We do not intend to hire additional employees at this time. All of the work on
the property will be conducted by unaffiliated independent operators that we
will hire. The independent operators will be responsible for reworking the
wellbore on the lease and distributing and selling any oil or gas found.
In the event we complete our exploration program prior to the end of one year,
and it is anticipated we will do so as reflected in the milestones that follow,
if we find oil and/or gas, we will spend the balance of the year creating a
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program for development of the property. If we do not find oil and/or gas on the
property, we will attempt to locate a new property, raise additional money, and
explore the new property.
Our plan of operation for the twelve months following the date of this
prospectus is to raise funds from the Offering, secure a lease on a property and
complete the re-work and production program while also searching for other
affordable leases. We estimate it will take approximately three to six months to
complete the registration process and sell the shares in this Offering. Once we
receive funding it will take three to four months to secure a lease and get the
well operational.
If we are able to raise the full $60,000 from this Offering we anticipate
spending $6,000 for the purchase of the lease and the estimated cost of $16,000
for the rework program, we anticipate spending an additional $2,400 (approx.
$400 per month) for monthly maintenance fees once the well is operational
(anticipated to begin in month 6), $5,000 on professional fees, including fees
payable for complying with reporting obligations. If all proceeds as planned we
will also look into purchasing a second lease for $6,000 and the rework and
monthly maintenance fees would be comparable to those with our first well. We
anticipate having approximately $6,200 in working capital in this scenario.
Total expenditures over the next 12 months are expected to be approximately
$60,000. We will require the funds from this Offering to proceed.
If we are only able to raise $30,000 to $50,000 we would not purchase a second
well lease and our costs would be limited to $6,000 for the lease, $16,000 for
rework, $2,400 for maintenance, $5,000 for professional fees and the remainder
being working capital.
LIMITED OPERATING HISTORY; NEED FOR ADDITIONAL CAPITAL
There is no historical financial information about us upon which to base an
evaluation of our performance. We are an exploration stage corporation and have
not generated any revenues from operations. We cannot guarantee we will be
successful in our business operations. Our business is subject to risks inherent
in the establishment of a new business enterprise, including limited capital
resources, possible delays in the exploration of the property, and possible cost
overruns due to price and cost increases in services.
To become profitable and competitive, we must find oil and/or gas in paying
quantities. We are seeking equity financing to provide for the capital required
to purchase and rework one or two wells.
We have no assurance that future financing will be available to us on acceptable
terms. If financing is not available on satisfactory terms, we may be unable to
continue, develop or expand our operations. Equity financing could result in
additional dilution to existing shareholders.
LIQUIDITY AND CAPITAL RESOURCES
To meet our need for cash we are attempting to raise money from this Offering.
We will be able to stay in business for one year if we raise at least the
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minimum amount of $30,000. Whatever money we do raise, will be applied to the
items set forth in the Use of Proceeds section of this prospectus.
Our officer and director is willing to commit to loan us money for our
operations until this Offering has been completed or until the offering period
has expired. At the present time, we have not made any arrangements to raise
additional cash, other than through this Offering. If we need additional cash
and can't raise it we will either have to suspend operations until we do raise
the cash, or cease operations entirely. If we raise the minimum amount of money
from this Offering, it will last a year. Other than as described in this
paragraph, we have no other financing plans.
We issued 7,500,000 restricted shares of common stock to Lawrence Jean, our sole
officer and director. The purchase price of the shares was $7,500. This was
accounted for as an acquisition of shares. There is $425 owed to Mr. Jean that
is non-interest bearing, unsecured and due on demand.
As of December 31, 2012 our total assets were $6,982 and our total liabilities
were $425. From inception (October 22, 2012) through December 31, 2012 we had
net losses of $943.
BUSINESS
GENERAL
We are a start-up stage company formed under the laws of the State of Nevada on
October 22, 2012, for the purpose of purchasing and operating one oil and gas
lease. We are currently not earning any revenues. Since inception, we have
examined the U.S. geographical area and determined where we want to acquire an
oil and gas lease; prepared this registration statement; and, upon completion of
our public Offering, acquire one oil and gas lease with a re-workable wellbore
thereon.
ACQUISITION AND REWORKING OF PROSPECTS
We have not pre-selected any prospects. We have targeted Caddo and Bossier
Parishes in northwest Louisiana Regardless of location; we will evaluate all
prospective acquisitions on the basis of their oil and natural gas producing
potential.
Prospects will be acquired pursuant to an arrangement in which we will acquire
part of the working interest. For purposes of this prospectus, a working
interest includes any interest, which is subject to some portion of the costs of
development, operation or maintenance. This working interest will be subject to
landowners' royalty interests and other royalty interests payable to
unaffiliated third parties in varying amounts.
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In acquiring interests in leases, we may pay such consideration and make such
contractual commitments and agreements as we deem fair, reasonable and
appropriate. For purposes of this prospectus, the term "lease" means any full or
partial interest in:
* undeveloped oil and natural gas leases;
* oil and natural gas mineral rights;
* licenses;
* concessions;
* contracts;
* fee rights; or
* other rights authorizing the owner to drill for, reduce to possession
and produce oil and natural gas.
We will acquire the leases and interests in the leases to be developed us. The
actual number, identity and percentage of working interests or other interests
in prospects to be acquired will depend upon, among other things, the total
amount of capital contributions, the latest geological and geophysical data,
potential title or spacing problems, availability and price of reworking
services, tubular goods and services, approvals by federal and state departments
or agencies, agreements with other working interest owners in the prospects,
farm-ins, and continuing review of other prospects that may be available.
TITLE TO PROPERTIES
We will own the leasehold interest in the lease. Investors must rely on us to
use our best judgment to obtain appropriate title to leases. We will take such
steps as we deem necessary to assure that title to leases is acceptable for our
purposes. We are free, however, to use our judgment in waiving title
requirements if it is in our best interests and will not be liable for any
failure of title to leases we acquire, unless such mistakes were made in a
manner not in accordance with general industry standards in the geographic area
and such mistakes were the result of our negligence. Further, we will not make
any warranties as to the validity or merchantability of titles to any leases to
be acquired by us.
REWORK AND COMPLETION PHASE
We will enter into an agreement with an independent operator to rework the
wellbore and maintain it. The operator engaged will conduct, direct and have
full control of all operations on the lease. The operator we retain will be a
non-affiliate and its fees will not exceed the competitive rate in the area,
during the rework and production phases of operations.
The operator will rework each well deemed by it to be capable of production of
oil or natural gas in commercial quantities. The type of rework to be
encountered in each well is unknown. We will monitor the performance and
activities of the operator.
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PRODUCTION PHASE OF OPERATIONS
Through the operator we may sell oil and/or natural gas production to marketers,
refineries, foreign governmental agencies, industrial users, interstate
pipelines or local utilities. Revenues from production will be received directly
from these parties or paid to us.
Oil and natural gas production in Louisiana, the area in which we may conduct
our activities, is a mature industry with potential purchasers of oil and
natural gas.
As a result of effects of weather on costs, results may be affected by seasonal
factors. In addition, both sales volumes and prices tend to be affected by
demand factors with a significant seasonal component.
Our share of production revenue from a given well will be burdened by and/or
subject to royalties and overriding royalties, monthly operating charges, and
other operating costs. These items of expenditure involve amounts payable solely
out of, or expenses incurred solely by reason of, production operations.
COMPETITION
There are a large number of oil and natural gas companies in the United States.
Competition is strong among persons and companies involved in the exploration
for and production of oil and natural gas. We expect to encounter strong
competition at every phase of business. We will be competing with entities
having financial resources and staffs substantially larger than those available
to us.
The national supply of natural gas is widely diversified, with no one entity
controlling over 5%. As a result of deregulation of the natural gas industry by
Congress and FERC, competitive forces generally determine natural gas prices.
Prices of crude oil, condensate and natural gas liquids are not currently
regulated and are generally determined by competitive forces.
There will be competition among operators for equipment, goods, and crews. Such
competition may affect our ability to acquire leases suitable for development
and to expeditiously develop such leases once they are acquired.
MARKET FOR OIL AND GAS PRODUCTION
The market for oil and gas production is regulated by both the state and federal
governments. The overall market is mature and with the exception of gas, all
producers in a producing region will receive the same price. The major oil
companies will purchase all crude oil offered for sale at posted field prices.
There are price adjustments for quality difference from the Benchmark. Benchmark
is Saudi Arabian light crude oil employed as the standard on which OPEC price
changes have been based. Quality variances from Benchmark crude results in lower
prices being paid for the variant oil. Oil sales are normally contracted with a
purchaser or gatherer as it is known in the industry that will pick-up the oil
at the well site. In some instances there may be deductions for transportation
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from the well head to the sales point. At this time the majority of crude oil
purchasers do not charge transportation fees, unless the well is outside their
service area. The service area is a geographical area in which the purchaser of
crude oil will not charge a fee for picking upon the oil. The purchaser or oil
gatherer as it is called within the oil industry will usually handle all check
disbursements to both the working interest and royalty owners. Royalty owners
and over-riding royalty owners receive a percentage of gross oil production for
the particular lease and are not obligated in any manner whatsoever to pay for
the costs of operating the lease.
Gas sales are by contract. The gas purchaser normally pays the well operator
100% of the sales proceeds on or about the 25th of each and every month for the
previous month's sales. The operator is responsible for all checks and
distributions to the working interest and royalty owners. There is no standard
price for gas. Prices will fluctuate with the seasons and the general market
conditions.
The marketing of any oil and natural gas produced by us will be affected by a
number of factors that are beyond our control and whose exact effect cannot be
accurately predicted. These factors include:
* the amount of crude oil and natural gas imports;
* the availability, proximity and cost of adequate pipeline and other
transportation facilities;
* the success of efforts to market competitive fuels, such as coal and
nuclear energy and the growth and/or success of alternative energy
sources such as wind power;
* the effect of United States and state regulation of production,
refining, transportation and sales;
* the laws of foreign jurisdictions and the laws and regulations
affecting foreign markets;
* other matters affecting the availability of a ready market, such as
fluctuating supply and demand; and
* general economic conditions in the United States and around the world.
The supply and demand balance of crude oil and natural gas in world markets has
caused significant variations in the prices of these products over recent years.
The North American Free Trade Agreement eliminated trade and investment barriers
between the United States, Canada, and Mexico, resulting in increased foreign
competition for domestic natural gas production. New pipeline projects recently
approved by, or presently pending before, FERC as well as nondiscriminatory
access requirements could further substantially increase the availability of
natural gas imports to certain U.S. markets. Such imports could have an adverse
effect on both the price and volume of natural gas sales from wells.
Members of the Organization of Petroleum Exporting Countries establish prices
and production quotas for petroleum products from time to time with the intent
of affecting the current global supply of crude oil and maintaining, lowering or
increasing certain price levels. We are unable to predict what effect, if any,
such actions will have on both the price and volume of crude oil sales from the
wells.
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In several initiatives, FERC has required pipeline transportation companies to
develop electronic communication and to provide standardized access via the
Internet to information concerning capacity and prices on a nationwide basis, so
as to create a national market. Parallel developments toward an electronic
marketplace for electric power, mandated by FERC, are serving to create
multi-national markets for energy products generally. These systems will allow
rapid consummation of natural gas transactions. Although this system may
initially lower prices due to increased competition, it is anticipated to expand
natural gas markets and to improve their reliability.
REGULATION
Our operations will be affected from time to time in varying degrees by domestic
and foreign political developments, federal and state laws.
PRODUCTION. In most areas of operations within the United States the production
of oil and natural gas is regulated by state agencies that set allowable rates
of production and otherwise control the conduct of oil and natural gas
operations. Among the ways that states control production is through regulations
that establish the spacing of wells or in some instances may limit the number of
days in a given month during which a well can produce.
ENVIRONMENTAL. Our production operations will also be subject to environmental
protection regulations established by federal, state, and local agencies that in
turn may necessitate significant capital outlays that would materially affect
the financial position and our business operations. These regulations, enacted
to protect against waste, conserve natural resources and prevent pollution,
could necessitate spending funds on environmental protection measures, rather
than on drilling operations. If any penalties or prohibitions were imposed for
violating such regulations, our operations could be adversely affected.
NATURAL GAS TRANSPORTATION AND PRICING. FERC regulates the rates for interstate
transportation of natural gas as well as the terms for access to natural gas
pipeline capacity. Pursuant to the Wellhead Decontrol Act of 1989, however, FERC
may not regulate the price of natural gas. Such deregulated natural gas
production may be sold at market prices determined by supply and demand, Btu
content, pressure, location of wells, and other factors. We anticipate that all
of the natural gas produced by our wells will be considered price decontrolled
natural gas and that each natural gas will be sold at fair market value.
PROPOSED REGULATION. Various legislative proposals are being considered in
Congress and in the legislatures of various states, which, if enacted, may
significantly and adversely affect the petroleum and natural gas industries.
Such proposals involve, among other things, the imposition of price controls on
all categories of natural gas production, the imposition of land use controls,
such as prohibiting drilling activities on certain federal and state lands in
protected areas, as well as other measures. At the present time, it is
impossible to predict what proposals, if any, will actually be enacted by
Congress or the various state legislatures and what effect, if any, such
proposals will have on our operations. On December 19, 2007, President Bush
signed into law the Energy Independence and Security Act ("EISA"), a law
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targeted at reducing national demand for oil and increasing the supply of
alternative fuel sources. While EISA does not appear to directly impact on our
operations or cost of doing business, its impact on the oil and gas industry in
general is uncertain. No prediction can be made as to what additional
legislation may be proposed, if any, affecting the competitive status of an oil
and gas producer, restricting the prices at which a producer may sell its oil
and gas or the market demand for oil and gas nor can it be predicted which
proposals, including those presently under consideration, if any, might be
enacted, nor when any such proposals, if enacted, might become effective.
The Kyoto Protocol to the United Nations Framework Convention on Climate Change
became effective in February 2005 (the "Protocol"). Under the Protocol,
participating nations are required to implement programs to reduce emissions of
certain gases, generally referred to as greenhouse gases that are suspected of
contributing to global warming. The United States is not currently a participant
in the Protocol. However, the U.S. Congress is considering proposed legislation
directed at reducing greenhouse gas emissions. In addition, there has been
support in various regions of the country for legislation that requires
reductions in greenhouse gas emissions, and some states have already adopted
legislation addressing greenhouse gas emissions from various sources, primarily
power plants. The natural gas and oil industry is a direct source of certain
greenhouse gas emissions, namely carbon dioxide and methane, and future
restrictions on such emissions could impact our operations. At this time, it is
not possible to accurately estimate how potential future laws or regulations
addressing greenhouse gas emissions would impact our business.
Regulation of Production. Our proposed production operations are subject to
regulation under a wide range of state and federal statutes, rules, orders and
regulations. Among other matters, these statutes and regulations govern:
- the amounts and types of substances and materials that may be released
into the environment,
- the discharge and disposition of waste materials,
- the reclamation and abandonment of wells and facility sites, and
- the remediation of contaminated sites.
Oklahoma law contains:
- provisions for the unitization or pooling of oil and natural gas
properties,
- the establishment of maximum rates of production from oil and natural
gas wells, and
- the regulation of the spacing, plugging and abandonment of wells.
ENVIRONMENTAL REGULATIONS
General. Our operations are affected by the various state, local and federal
environmental laws and regulations, including the:
- Clean Air Act,
- Oil Pollution Act of 1990,
- Federal Water Pollution Control Act,
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<PAGE>
- Resource Conservation and Recovery Act ("RCRA"),
- Toxic Substances Control Act, and
- Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA").
these laws and regulations govern the discharge of materials into the
environment or the disposal of waste materials, or otherwise relate to the
protection of the environment. In particular, the following activities are
subject to stringent environmental regulations:
- drilling,
- development and production operations,
- activities in connection with storage and transportation of oil and
other liquid hydrocarbons, and
- use of facilities for treating, processing or otherwise handling
hydrocarbons and wastes.
Violations are subject to reporting requirements, civil penalties and criminal
sanctions. As with the industry generally, compliance with existing regulations
increases our overall cost of business. The increased costs cannot be easily
determined. Such areas affected include:
- unit production expenses primarily related to the control and
limitation of air emissions and the disposal of produced water,
- capital costs to drill exploration and development wells resulting
from expenses primarily related to the management and disposal of
drilling fluids and other oil and natural gas exploration wastes, and
- capital costs to construct, maintain and upgrade equipment and
facilities and remediate, plug and abandon inactive well sites and
pits.
Environmental regulations historically have been subject to frequent change by
regulatory authorities. Therefore, we are unable to predict the ongoing cost of
compliance with these laws and regulations or the future impact of such
regulations on its operations. However; we do not believe that changes to these
regulations will have a significant negative effect
A discharge of hydrocarbons or hazardous substances into the environment could
subject us to substantial expense, including both the cost to comply with
applicable regulations pertaining to the clean-up of releases of hazardous
substances into the environment and claims by neighboring landowners and other
third parties for personal injury and property damage. We do not maintain
insurance for protection against certain types of environmental liabilities.
The Clean Air Act requires or will require most industrial operations in the
United States to incur capital expenditures in order to meet air emission
control standards developed by the EPA and state environmental agencies.
Although no assurances can be given, we believe the Clean Air Act requirements
will not have a material adverse effect on our financial condition or results of
operations.
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RCRA is the principal federal statute governing the treatment, storage and
disposal of hazardous wastes. RCRA imposes stringent operating requirements, and
liability for failure to meet such requirements, on a person who is either:
- a "generator" or "transporter" of hazardous waste, or
- an "owner" or "operator" of a hazardous waste treatment, storage or
disposal facility.
At present, RCRA includes a statutory exemption that allows oil and natural gas
exploration and production wastes to be classified as non-hazardous waste. As a
result, we will not be subject to many of RCRA's requirements because its
operations will probably generate minimal quantities of hazardous wastes.
CERCLA, also known as "Superfund", imposes liability, without regard to fault or
the legality of the original act, on certain classes of persons that contributed
to the release of a "hazardous substance" into the environment. These persons
include:
- the "owner" or "operator" of the site where hazardous substances have
been released, and
- companies that disposed or arranged for the disposal of the hazardous
substances found at the site.
CERCLA also authorizes the EPA and, in some instances, third parties to act in
response to threats to the public health or the environment and to seek to
recover from the responsible classes of persons the costs they incur. In the
course of our ordinary operations, we could generate waste that may fall within
CERCLA's definition of a "hazardous substance". As a result, We may be liable
under CERCLA or under analogous state laws for all or part of the costs required
to clean up sites at which such wastes have been disposed.
Under such law we could be required to:
- remove or remediate previously disposed wastes, including wastes
disposed of or released by prior owners or operators,
- clean up contaminated property, including contaminated groundwater, or
- perform remedial plugging operations to prevent future contamination.
We could also be subject to other damage claims by governmental authorities or
third parties related to such contamination.
While the foregoing regulations appear extensive, we believe that because we
will initially be operating one oil or gas well, compliance with the foregoing
regulations will not have any material adverse effect upon us. Further, we
believe we will only spend minimal amounts of money to comply therewith in
connection with our one proposed well.
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<PAGE>
COMPANY'S OFFICE
The Company's offices are located at 2316 A Willemar Avenue, Courtenay, BC and
our telephone number is (250) 898 8882. This is the home of Lawrence Jean. We
use approximately 100 square feet on a rent free basis.
EMPLOYEES
The Company is an exploration stage company and currently has no employees other
than its Officer and Director.
EMERGING GROWTH COMPANY STATUS UNDER THE JOBS ACT
Annona Energy qualifies as an "emerging growth company" as defined in the
Jumpstart our Business Startups Act (the "JOBS Act").
The JOBS Act creates a new category of issuers known as "emerging growth
companies." Emerging growth companies are those with annual gross revenues of
less than $1 billion (as indexed for inflation) during their most recently
completed fiscal year. The JOBS Act is intended to facilitate public offerings
by emerging growth companies by exempting them from several provisions of the
Securities Act of 1933 and its regulations. An emerging growth company will
retain that status until the earliest of:
* The first fiscal year after its annual revenues exceed $1 billion;
* The first fiscal year after the fifth anniversary of its IPO;
* The date on which the company has issued more than $1 billion in
non-convertible debt during the previous three-year period; and
* The first fiscal year in which the company has a public float of at
least $700 million.
FINANCIAL AND AUDIT REQUIREMENTS
Under the JOBS Act, emerging growth companies are subject to scaled financial
disclosure requirements. Pursuant to these scaled requirements, emerging growth
companies may:
* Provide only two rather than three years of audited financial
statements in their IPO Registration Statement;
* Provide selected financial data only for periods no earlier than those
included in the IPO Registration Statement in all SEC filings, rather
than the five years of selected financial data normally required;
* Delay compliance with new or revised accounting standards until they
are made applicable to private companies; and
* Be exempted from compliance with Section 404(b) of the Sarbanes-Oxley
Act, which requires companies to receive an outside auditor's
attestation regarding the issuer's internal controls.
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OFFERING REQUIREMENTS
In addition, during the IPO offering process, emerging growth companies are
exempt from:
* Restrictions on analyst research prior to and immediately after the
IPO, even from an investment bank that is underwriting the IPO;
* Certain restrictions on communications to institutional investors
before filing the IPO registration statement; and
* The requirement initially to publicly file IPO Registration
Statements. Emerging growth companies can confidentially file draft
Registration Statements and any amendments with the SEC. Public
filings of the draft documents must be made at least 21 days prior to
commencement of the IPO "road show."
OTHER PUBLIC COMPANY REQUIREMENTS
Emerging growth companies are also exempt from other ongoing obligations of most
public companies, such as:
* The requirements under Section 14(i) of the Exchange Act and Section
953(b)(1) of the Dodd-Frank Act to disclose executive compensation
information on pay-for-performance and the ratio of CEO to median
employee compensation;
* Certain other executive compensation disclosure requirements, such as
the compensation discussion and analysis, under Item 402 of Regulation
S-K; and
* The requirements under Sections 14A(a) and (b) of the Exchange Act to
hold advisory votes on executive compensation and golden parachute
payments.
DESCRIPTION OF PROPERTY
We do not currently own any property. The Company's offices are located at 2316
A Willemar Avenue, Courtenay, BC and our telephone number is (250) 898-8882.
This is the home of Lawrence Jean. We use approximately 100 square feet on a
rent free basis. Management believes the current premises are sufficient for its
needs at this time.
We currently have no investment policies as they pertain to real estate, real
estate interests or real estate mortgages.
LEGAL PROCEEDINGS
We are not currently involved in any legal proceedings and we are not aware of
any pending or potential legal actions.
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MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
We plan to contact a market maker immediately following the completion of the
Offering and apply to have the shares quoted on the OTC Electronic Bulletin
Board (OTCBB). The OTCBB is a regulated quotation service that displays
real-time quotes, last sale prices and volume information in over-the-counter
(OTC) securities. The OTCBB is not an issuer listing service, market or
exchange. Although the OTCBB does not have any listing requirements per se, to
be eligible for quotation on the OTCBB, issuers must remain current in their
filings with the U.S. Securities and Exchange Commission or applicable
regulatory authority. Market Makers are not permitted to begin quotation of a
security whose issuer does not meet this filing requirement. Securities already
quoted on the OTCBB that become delinquent in their required filings will be
removed following a 30 or 60 day grace period if they do not make their required
filing during that time. We cannot guarantee that our application will be
accepted or approved and our stock listed and quoted for sale. As of the date of
this filing, there have been no discussions or understandings between Annona
Energy with any market maker regarding participation in a future trading market
for our securities.
As of the date of this filing, there is no public market for our securities.
There has been no public trading of our securities, and, therefore, no high and
low bid pricing. As of the date of this prospectus Annona had one stockholder of
record. We have paid no cash dividends and have no outstanding options.
PENNY STOCK RULES
The Securities and 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).
A purchaser is purchasing penny stock which limits the ability to sell the
stock. The shares offered by this prospectus constitute penny stock under the
Securities and Exchange Act. The shares will remain penny stocks for the
foreseeable future. The classification of penny stock makes it more difficult
for a broker-dealer to sell the stock into a secondary market, which makes it
more difficult for a purchaser to liquidate his/her investment. Any
broker-dealer engaged by the purchaser for the purpose of selling his or her
shares in us will be subject to Rules 15g-1 through 15g-10 of the Securities and
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Exchange Act. Rather than creating a need to comply with those rules, some
broker-dealers will refuse to attempt to sell penny stock.
The 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, which:
- contains a description of the nature and level of risk in the market
for penny stock 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 of the
Securities Act of 1934, as amended;
- contains a brief, clear, narrative description of a dealer market,
including "bid" and "ask" price for the penny stock 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 Securities and Exchange
Commission shall require by rule or regulation;
The broker-dealer also must provide, prior to effecting any transaction in a
penny stock, to the customer:
- the 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
their securities.
REGULATION M
Our officer and director, who will offer and sell the shares, is aware that he
is required to comply with the provisions of Regulation M, promulgated under the
Securities Exchange Act of 1934, as amended. With certain exceptions, Regulation
M precludes the officer and director, sales agent, any broker-dealer or other
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<PAGE>
person who participate in the distribution of shares in this Offering from
bidding for or purchasing, or attempting to induce any person to bid for or
purchase any security which is the subject of the distribution until the entire
distribution is complete.
WHERE YOU CAN FIND MORE INFORMATION
We intend to file annual, quarterly and special reports, and other information
with the SEC, as required. You may read or obtain a copy of the registration
statement to be filed or any other information we file with the SEC at the SEC's
Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may
obtain information regarding the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. Our SEC filings are also available to the
public from the SEC web site at www.sec.gov, which contains our reports, and
other information we file electronically with the SEC.
FINANCIAL STATEMENTS
The financial statements of Annona Energy for the year ended December 31, 2012,
and related notes, included in this prospectus have been audited by Anton &
Chia, CPA's, and have been so included in reliance upon the opinion of such
accountants given upon their authority as an expert in auditing and accounting.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON FINANCIAL DISCLOSURE
None.
DIRECTOR, EXECUTIVE OFFICER, PROMOTER AND CONTROL PERSON
The officer and director of Annona Energy, whose one year terms will expire
12/31/13, or at such a time as his successor(s) shall be elected and qualified
is as follows:
Name & Address Age Position Date First Elected Term Expires
-------------- --- -------- ------------------ ------------
Lawrence Jean 65 President, 10/22/12 12/31/13
2316 A Willemar Ave. Secretary,
Courtenay, BC Treasurer,
CFO, CEO &
Director
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The foregoing person is a promoter of Annona Energy, as that term is defined in
the rules and regulations promulgated under the Securities and Exchange Act of
1933. Directors are elected to serve until the next annual meeting of
stockholders and until their successors have been elected and qualified.
Officers are appointed to serve until the meeting of the board of directors
following the next annual meeting of stockholders and until their successors
have been elected and qualified.
Mr. Jean currently devotes 2-4 hours per week to company matters, in the future
he intends to devote as much time as the board of directors deems necessary to
manage the affairs of the company.
No executive officer or director of the corporation has been the subject of any
order, judgment, or decree of any court of competent jurisdiction, or any
regulatory agency permanently or temporarily enjoining, barring, suspending or
otherwise limiting him from acting as an investment advisor, underwriter, broker
or dealer in the securities industry, or as an affiliated person, director or
employee of an investment company, bank, savings and loan association, or
insurance company or from engaging in or continuing any conduct or practice in
connection with any such activity or in connection with the purchase or sale of
any securities.
No executive officer or director of the corporation has been convicted in any
criminal proceeding (excluding traffic violations) or is the subject of a
criminal proceeding which is currently pending.
BACKGROUND INFORMATION
LAWRENCE JEAN has been the President, CEO, Treasurer, CFO, Secretary, and
Director of the Company since inception.
WORK HISTORY
1999 -present Private Investor in equity securities and real estate
RADAR ACQUISITIONS CORP. - CALGARY CANADA
Director 1995 - 1999
A Canadian Public company trading under the symbol RAC on the TSXV involved in
the mining and processing of Ammolite for jewelry which was marketed
internationally.
WHITE GOLD VENTURES - LA RUMEROSA MEXICO
President and Director 1992 - 1995
Mining company listed on the Alberta Stock Exchange. The company owned and mined
a calcium carbonate mine in La Rumerosa, east of Tijuana, Baja California,
Mexico.
PATHFINDER INTERNATIONAL RECREATION CORP - CANADA
Founder, President and director 1986 - 1990
A Motor home vacation rental company listed on the Alberta Stock Exchange. The
company had 5 locations in Canada and the U.S. serving a global clientele.
EDUCATION
Graduate 1968 Concordia University, Montreal Canada - Majors in both History and
Philosophy Graduate 1971 Simon Fraser University, Vancouver Canada - MBA Program
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EXECUTIVE COMPENSATION
Our current officer receives no compensation. The current Board of Directors is
comprised of Lawrence Jean.
SUMMARY COMPENSATION TABLE
Change in
Pension
Value and
Non-Equity Nonqualified
Incentive Deferred All
Name and Plan Compen- Other
Principal Stock Option Compen- sation Compen-
Position Year Salary Bonus Awards Awards sation Earnings sation Totals
------------ ---- ------ ----- ------ ------ ------ -------- ------ ------
Lawrence 2012 0 0 0 0 0 0 0 0
Jean,
President,
CFO & CEO
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
Option Awards Stock Awards
----------------------------------------------------------------- ----------------------------------------------
Equity
Incentive
Equity Plan
Incentive Awards:
Plan Market or
Awards: Payout
Equity Number of Value of
Incentive Number Unearned Unearned
Plan Awards; of Market Shares, Shares,
Number of Number of Number of Shares Value of Units or Units or
Securities Securities Securities or Units Shares or Other Other
Underlying Underlying Underlying of Stock Units of Rights Rights
Unexercised Unexercised Unexercised Option Option That Stock That That That
Options (#) Options (#) Unearned Exercise Expiration Have Not Have Not Have Not Have Not
Name Exercisable Unexercisable Options (#) Price($) Date Vested(#) Vested Vested Vested
---- ----------- ------------- ----------- ----- ---- --------- ------ ------ ------
Lawrence 0 0 0 0 0 0 0 0 0
Jean, CEO
& CFO
DIRECTOR COMPENSATION
Change in
Pension
Value and
Fees Non-Equity Nonqualified
Earned Incentive Deferred
Paid in Stock Option Plan Compensation All Other
Name Cash Awards Awards Compensation Earnings Compensation Total
---- ---- ------ ------ ------------ -------- ------------ -----
Lawrence Jean, 0 0 0 0 0 0 0
Director
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There are no current employment agreements between the company and its executive
officer.
On November 21, 2012, Mr. Jean purchased 7,500,000 shares of our common stock at
$0.001 per share. The terms of these stock issuances were as fair to the
company, in the opinion of the board of directors, as could have been made with
an unaffiliated third party.
Mr. Jean currently devotes approximately 2-4 hours per week to manage the
affairs of the company. He has agreed to work with no remuneration until such
time as the company receives sufficient revenues necessary to provide management
salaries. At this time, we cannot accurately estimate when sufficient revenues
will occur to implement this compensation, or what the amount of the
compensation will be.
There are no annuity, pension or retirement benefits proposed to be paid to
officers, directors or employees in the event of retirement at normal retirement
date pursuant to any presently existing plan provided or contributed to by the
company or any of its subsidiaries, if any.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information on the ownership of Annona Energy's
voting securities by officers, directors and major stockholders as well as those
who own beneficially more than five percent of our common stock as of the date
of this prospectus:
No. of No. of
Name of Shares Shares Percentage of Ownership
Beneficial Before After Before After
Owner(1) Offering Offering Offering Offering(2)
-------- -------- -------- -------- -----------
Lawrence Jean 7,500,000 7,500,000 100% 56%
All Officers and
Directors as a Group 7,500,000 7,500,000 100% 56%
----------
(1) The person named may be deemed to be a "parent" and "promoter" of the
Company, within the meaning of such terms under the Securities Act of 1933,
as amended.
(2) Assuming all 6,000,000 shares are sold
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Jean will not be paid for any underwriting services that he performs on our
behalf with respect to this Offering. He will also not receive any interest on
any funds that he may advance to us for expenses incurred prior to the Offering
being closed.
On November 21, 2012, Mr. Jean purchased 7,500,000 shares of our common stock at
$0.001 per share. All of such shares are "restricted" securities, as that term
is defined by the Securities Act of 1933, as amended, and are held by the
officer and director of the Company. (See "Principal Stockholders".)
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As of December 31, 2012, $425 is owed to Mr. Jean for funds loaned by him to the
Company. The loan is non-interest bearing with no specific repayment terms.
INDEMNIFICATION
Pursuant to the Articles of Incorporation and By-Laws of the corporation, we may
indemnify an officer or director who is made a party to any proceeding,
including a law suit, because of his position, if he acted in good faith and in
a manner he reasonably believed to be in our best interest. In certain cases, we
may advance expenses incurred in defending any such proceeding. To the extent
that the officer or director is successful on the merits in any such proceeding
as to which such person is to be indemnified, we must indemnify him against all
expenses incurred, including attorney's fees. With respect to a derivative
action, indemnity may be made only for expenses actually and reasonably incurred
in defending the proceeding, and if the officer or director is judged liable,
only by a court order. The indemnification is intended to be to the fullest
extent permitted by the laws of the State of Nevada.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to our directors, officers and controlling persons pursuant to the
provisions above, or otherwise, we have been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act, and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities, other
than the payment by us of expenses incurred or paid by one of our directors,
officers, or controlling persons in the successful defense of any action, suit
or proceeding, is asserted by one of our directors, officers, or controlling
person sin connection with the securities being registered, we will, unless in
the opinion of our counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification is against public policy as expressed in the Securities Act, and
we will be governed by the final adjudication of such issue.
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[LETTERHEAD OF ANTON & CHIA, LLP]
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Annona Energy, Inc. (An Exploration Stage Company)
We have audited the accompanying balance sheet of Annona Energy, Inc. (the
"Company") as of December 31, 2012, and the related statement of operations,
changes in stockholders' equity and cash flows for the period from October 22,
2012 (Inception) through December 31, 2012. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States). 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 was 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 Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Company as of December 31,
2012 and the results of its operations and its cash flows for the period from
October 22, 2012 (Inception) through December 31, 2012, 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 the notes to
financial, the Company has no revenues and accumulated deficit of $943 since
inception. These conditions, among others, raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans concerning
these matters are also described in the financial statements, which includes the
raising of additional equity financing through a public offering. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/ Anton & Chia, LLP
--------------------------------
Newport Beach, California
March 22, 2013
F-1
<PAGE>
ANNONA ENERGY, INC.
(An Exploration Stage Company)
Balance Sheets
--------------------------------------------------------------------------------
December 31, 2012
-----------------
ASSETS
Current Assets
Cash $ 6,982
--------
Total Current Assets 6,982
--------
Total Assets $ 6,982
========
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
Officer advances $ 425
--------
Total Liabilities 425
--------
Stockholders' Equity
Common stock, ($.001 par value, 75,000,000 shares
authorized; 7,500,000 shares issued and outstanding
as of December 31, 2012 7,500
Additional paid-in capital --
Deficit accumulated during exploration stage (943)
--------
Total Stockholders' Equity 6,557
--------
Total Liabilities & Stockholders' Equity $ 6,982
========
See accompanying notes to financial statements
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<PAGE>
ANNONA ENERGY, INC.
(An Exploration Stage Company)
Statements of Operations
--------------------------------------------------------------------------------
October 22, 2012
(inception)
through
December 31, 2012
-----------------
Revenues $ --
Operating Costs
Administrative expenses 943
Taxes and licences --
----------
Total Operating Costs 943
----------
Net Loss $ (943)
==========
Basic and diluted earnings per share $ (0.00)
==========
Weighted average number of common shares
outstanding basic and diluted 4,285,714
==========
See accompanying notes to financial statements
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<PAGE>
ANNONA ENERGY, INC.
(An Exploration Stage Company)
Statement of Changes in Stockholders' Equity
From October 22, 2012 (inception) through December 31, 2012
--------------------------------------------------------------------------------
Deficit
Accumulated
Common Additional During
Common Stock Paid-in Exploration
Stock Amount Capital Stage Total
----- ------ ------- ----- -----
Balance October 22, 2012 (Inception) -- $ -- $ -- $ -- $ --
Stock issued for cash from the
founder on November 21, 2012
@ $.001 per share 7,500,000 7,500 -- -- 7,500
Net Loss, December 31, 2012 -- -- -- (943) (943)
--------- -------- -------- --------- --------
Balance, December 31, 2012 7,500,000 $ 7,500 $ -- $ (943) $ 6,557
========= ======== ======== ========= ========
See accompanying notes to financial statements
F-4
<PAGE>
ANNONA ENERGY, INC.
(An Exploration Stage Company)
Statements of Cash Flow
--------------------------------------------------------------------------------
October 22, 2012
(Inception)
through
December 31, 2012
-----------------
OPERATING ACTIVITIES:
Net loss $ (943)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Changes in operating assets and liabilities:
--------
Net cash provided by operating activities (943)
FINANCING ACTIVITIES:
Officer advances 425
Issuance of common stock for cash 7,500
--------
Net cash provided by financing activities 7,925
Net increase in cash 6,982
--------
Cash at beginning of period --
--------
Cash at end of period $ 6,982
========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during year for:
Interest $ --
========
Income Taxes $ --
========
See accompanying notes to financial statements
F-5
<PAGE>
ANNONA ENERGY INC.
Notes to Financial Statements
(An Exploration Stage Company)
December 31, 2012
--------------------------------------------------------------------------------
1. NATURE OF OPERATIONS
Annona Energy Inc. ("The Company") was incorporated in the State of Nevada on
October 22, 2012. The Company is an Exploration Stage Company as defined by
Accounting Standards Codification ("ASC") Topic 915. "Development Stage
Entities." The Company's plan of operations anticipates purchasing at least one
oil and gas lease. There is no assurance we will ever be able to acquire an oil
and gas lease of if we do acquire an oil and gas lease, that the oil and gas
lease will produce any oil or gas.
GOING CONCERN
The accompanying financial statements have been prepared on a "going concern"
basis, which assumes that the Company will continue to realize its assets and
discharge its liabilities in the normal course of business. At December 31,
2012, the Company had cash of $6,982 and incurred a net loss of $943 for the
period from October 22, 2012 (inception) to December 31, 2012. These factors
raise substantial doubt regarding the company's ability to continue as a going
concern. These financial statements do not include any adjustments to the
recoverability and classification of recorded asset amounts and classification
of liabilities that might be necessary should the Company be unable to continue
as a going concern.
The Company plans to conduct a public offering of up to 6,000,000 shares of
common stock at a price of $0.01 per share or $60,000 (minimum of 3,000,000
shares or $30,000). However, there is no assurance that the offering will be
completed.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America and are
presented in US dollars. The Company's year-end is December 31.
Cash
Cash consists of cash on deposit with a high quality major financial
institution.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with generally accepted
accounting principles requires that management makes estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the period. Actual results
could differ from those estimates.
Foreign Currency Translation
The financial statements are presented in United States dollars. In accordance
with ASC 830, "Foreign Currency Matters", foreign denominated monetary assets
and liabilities are translated into their United States dollar equivalents using
foreign exchange rates which prevailed at the balance sheet date. Revenue and
expenses are translated at average rates of exchange during the year. Gains or
losses resulting from foreign currency transactions are included in results of
operations.
Development Stage Company
The Company complies with Financial Accounting Standards Codification ("ASC")
915 and Securities and Exchange Commission Act Guide 7 for its characterization
of the Company as development stage enterprise.
F-6
<PAGE>
Financial Instrument
The carrying values of the Company's financial instruments, consisting of cash,
accounts payable and accrued liabilities, and due to related party, approximate
their fair value because of the short maturity of these instruments. The
Company's operations are outside the United States and some of its future assets
and liabilities may have exposure to market risks from changes in foreign
currency rates. The Company's financial risk is the risk that arises from
fluctuations in foreign exchange rates and the degree of volatility of those
rates. Currently, the Company does not use derivative instruments to reduce its
exposure to foreign currency risk.
Income Taxes
The Company follows the accrual method of accounting for income taxes. Under
this method, deferred income tax assets and liabilities are recognized for the
estimated tax consequences attributable to differences between the financial
statement carrying values and their respective income tax basis (temporary
differences). The effect on the deferred income tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date. At December 31, 2012, a full deferred tax asset valuation
allowance has been provided and no deferred tax asset has been recorded.
Basic and Diluted Net Income (Loss) per Share
The Company computes net income (loss) per share in accordance with ASC 260,
"Earnings per Share" which requires presentation of both basic and diluted
earnings per share (EPS) on the face of the income statement. Basic EPS is
computed by dividing net income (loss) available to common shareholders
(numerator) by the weighted average number of common shares outstanding
(denominator) during the period. Diluted EPS gives effect to all dilutive
potential common shares outstanding during the period including stock options,
using the treasury stock method, and convertible preferred stock, using the
if-converted method. In computing diluted EPS, the average stock price for the
period is used in determining the number of shares assumed to be purchased from
the exercise of stock options or warrants. Diluted EPS excludes all dilutive
potential common shares if their effect is anti-dilutive. As of December 31,
2012, there were no dilutive securities.
3. RELATED PARTY TRANSACTIONS
Lawrence H. Jean, Director and President of the Company may, in the future,
become involved in other business opportunities as they become available, thus
he may face a conflict in selecting between the Company and his other business
opportunities. The Company has not formulated a policy for the resolution of
such conflicts.
While the company is seeking additional capital, Mr. Jean has advanced funds to
the company to pay for any costs incurred by it. These funds are interest free.
The balance due Mr. Jean was $425 as of December 31, 2012.
4. COMMON SHARES
On November 21, 2012, the Company authorized the issue of 7,500,000 common
shares of the company at par value of $.001 to Lawrence H. Jean, Director and
President, for net cash proceeds of $7,500.
At December 31, 2012 there are total of 7,500,000 common shares of the Company
issued and outstanding.
5. SUBSEQUENT EVENTS
In accordance with ASC 855, SUBSEQUENT EVENTS, the Company has evaluated
subsequent events through March 21, 2013, the date of available issuance of
these audited financial statements. During this period, the Company did not have
any material recognizable subsequent events.
F-7
<PAGE>
DEALER PROSPECTUS DELIVERY OBLIGATION
"UNTIL ______________, ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE SECURITIES,
WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER A
PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS."
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Other Expenses of Issuance and Distribution
The estimated costs of the Offering are denoted below. Please note all amounts
are estimates other than the Commission's registration fee.
Securities and Exchange Commission registration fee $ 9
Accounting fees and expenses $3,000
Legal fees $ 750
Preparation and EDGAR conversion fees $1,800
Transfer Agent fees $ 650
Printing $ 291
------
Total $6,500
======
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The By-Laws of Annona Energy, Inc. allow for the indemnification of the officers
and directors in regard to their carrying out the duties of their offices. The
board of directors will make determination regarding the indemnification of the
director, officer or employee as is proper under the circumstances if he/she has
met the applicable standard of conduct set forth in the Nevada General
Corporation Law.
Section 78.751 of the Nevada Business Corporation Act provides that each
corporation shall have the following powers:
"1. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of any fact
that he is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorneys fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a pleas of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal action or
proceeding, he had a reasonable cause to believe that his conduct was unlawful.
II-1
<PAGE>
2. A corporation may indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or
in the right of the corporation to procure a judgment in its favor by reason of
the fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorneys fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation. Indemnification may not be made for
any claim, issue or matter as to which such a person has been adjudged by a
court of competent jurisdiction, after exhaustion of all appeals there from, to
be liable to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction, determines upon
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.
3. To the extent that a director, officer, employee or agent of a corporation
has been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in sections 1 and 2, or in defense of any claim, issue or
matter therein, he must be indemnified by the corporation against expenses,
including attorneys fees, actually and reasonably incurred by him in connection
with the defense.
4. Any indemnification under sections 1 and 2, unless ordered by a court or
advanced pursuant to section 5, must be made by the corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances. The
determination must be made:
a. By the stockholders;
b. By the board of directors by majority vote of a quorum consisting of
directors who were not parties to the act, suit or proceeding;
c. If a majority vote of a quorum consisting of directors who were not
parties to the act, suit or proceeding so orders, by independent legal
counsel, in a written opinion; or
d. If a quorum consisting of directors who were not parties to the act,
suit or proceeding cannot be obtained, by independent legal counsel in
a written opinion.
5. The certificate of articles of incorporation, the bylaws or an agreement made
by the corporation may provide that the expenses of officers and directors
incurred in defending a civil or criminal action, suit or proceeding must be
paid by the corporation as they are incurred and in advance of the final
disposition of the action, suit or proceeding, upon receipt of an undertaking by
or on behalf of the director or officer to repay the amount if it is ultimately
II-2
<PAGE>
determined by a court of competent jurisdiction that he is not entitled to be
indemnified by the corporation. The provisions of this section do not affect any
rights to advancement of expenses to which corporate personnel other than
director or officers may be entitled under any contract or otherwise by law.
6. The indemnification and advancement of expenses authorized in or ordered by a
court pursuant to this section:
a. Does not include any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the
certificate or articles of incorporation or any bylaw, agreement, vote
of stockholders or disinterested directors or otherwise, for either an
action in his official capacity or an action in another capacity while
holding his office, except that indemnification, unless ordered by a
court pursuant to section 2 or for the advancement of expenses made
pursuant to section 5, may not be made to or on behalf of any director
or officer if a final adjudication establishes that his acts or
omission involved intentional misconduct, fraud or a knowing violation
of the law and was material to the cause of action.
b. Continues for a person who has ceased to be a director, officer,
employee or agent and inures to the benefit of the heirs, executors
and administrators of such a person.
c. The Articles of Incorporation provides that "the Corporation shall
indemnify its officers, directors, employees and agents to the fullest
extent permitted by the General Corporation Law of Nevada, as amended
from time to time."
As to indemnification for liabilities arising under the Securities Act of 1933
for directors, officers or persons controlling Annona Energy, we have been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy and unenforceable.
RECENT SALES OF UNREGISTERED SECURITIES
Set forth below is information regarding the issuance and sales of securities
without registration since inception. No such sales involved the use of an
underwriter; no advertising or public solicitation was involved; the securities
bear a restrictive legend; and no commissions were paid in connection with the
sale of any securities.
In November 2012, a total of 7,500,000 shares of common stock were issued in
exchange for $7,500 US, or $.001 per share. These securities were issued to Mr.
Jean, the officer and director of the company.
II-3
<PAGE>
EXHIBITS
Exhibit 3.1 Articles of Incorporation
Exhibit 3.2 Bylaws
Exhibit 5.1 Opinion re: Legality
Exhibit 23.1 Consent of counsel (see Exhibit 5)
Exhibit 23.2 Consent of independent registered accounting firm
UNDERTAKINGS
a. The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
i. To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
ii. To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20% change
in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement.
iii. To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
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<PAGE>
3. To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the Offering.
4. That, for the purpose of determining liability under the Securities
Act of 1933 to any purchaser:
i. If the registrant is relying on Rule 430B (230.430B of this
chapter):
A. Each prospectus filed by the registrant pursuant to Rule
424(b)(3)shall be deemed to be part of the registration
statement as of the date the filed prospectus was deemed
part of and included in the registration statement; and
B. Each prospectus required to be filed pursuant to Rule
424(b)(2), (b)(5), or (b)(7) as part of a registration
statement in reliance on Rule 430B relating to an offering
made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the
purpose of providing the information required by section
10(a) of the Securities Act of 1933 shall be deemed to be
part of and included in the registration statement as of the
earlier of the date such form of prospectus is first used
after effectiveness or the date of the first contract of
sale of securities in the Offering described in the
prospectus. As provided in Rule 430B, for liability purposes
of the issuer and any person that is at that date an
underwriter, such date shall be deemed to be a new effective
date of the registration statement relating to the
securities in the registration statement to which that
prospectus relates, and the offering of such securities at
that time shall be deemed to be the initial bona fide
offering thereof. Provided, however, that no statement made
in a registration statement or prospectus that is part of
the registration statement or made in a document
incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time
of contract of sale prior to such effective date, supersede
or modify any statement that was made in the registration
statement or prospectus that was part of the registration
statement or made in any such document immediately prior to
such effective date; or
ii. If the registrant is subject to Rule 430C, each prospectus filed
pursuant to Rule 424(b) as part of a registration statement
relating to an offering, other than registration statements
relying on Rule 430B or other than prospectuses filed in reliance
on Rule 430A, shall be deemed to be part of and included in the
registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a
registration statement or prospectus that is part of the
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<PAGE>
registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement
or prospectus that is part of the registration statement will, as
to a purchaser with a time of contract of sale prior to such
first use, supersede or modify any statement that was made in the
registration statement or prospectus that was part of the
registration statement or made in any such document immediately
prior to such date of first use.
5. That, for the purpose of determining liability of the registrant under
the Securities Act of 1933 to any purchaser in the initial
distribution of the securities: The undersigned registrant undertakes
that in a primary offering of securities of the undersigned registrant
pursuant to this registration statement, regardless of the
underwriting method used to sell the securities to the purchaser, if
the securities are offered or sold to such purchaser by means of any
of the following communications, the undersigned registrant will be a
seller to the purchaser and will be considered to offer or sell such
securities to such purchaser:
i. Any preliminary prospectus or prospectus of the undersigned
registrant relating to the offering required to be filed pursuant
to Rule 424;
ii. Any free writing prospectus relating to the offering prepared by
or on behalf of the undersigned registrant or used or referred to
by the undersigned registrant;
iii. The portion of any other free writing prospectus relating to the
offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the
undersigned registrant; and
iv. Any other communication that is an offer in the Offering made by
the undersigned registrant to the purchaser.
Insofar as indemnification for liabilities, arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been informed that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe it meets all of
the requirements for filing Form S-1 and authorized this registration statement
to be signed on its behalf by the undersigned, in the city of Courtenay, BC on
April 1, 2013.
Annona Energy, Inc.
/s/ Lawrence Jean
-------------------------------------
By: Lawrence Jean, Director
(Principal Executive Officer)
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following person in the capacities and
date stated.
/s/ Lawrence Jean April 1, 2013
--------------------------------------- -------------
Lawrence Jean, President & Director Date
(Principal Executive Officer, Principal
Financial Officer, Principal Accounting
Officer)
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