Initial Public Offering (IPO): Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1 Powered Corporation S-1 7-13-2007 70 246K
2: EX-3.11 Articles of Incorporation/Organization or By-Laws 5 17K
3: EX-3.12 Articles of Incorporation/Organization or By-Laws 4 17K
4: EX-3.13 Articles of Incorporation/Organization or By-Laws 7 35K
5: EX-3.14 Articles of Incorporation/Organization or By-Laws 5 20K
6: EX-3.21 Articles of Incorporation/Organization or By-Laws 10 44K
7: EX-4.1 Instrument Defining the Rights of Security Holders 1 6K
8: EX-5.1 Opinion re: Legality 2± 9K
9: EX-9.1 Voting Trust Agreement 4 19K
10: EX-10.1 Material Contract 2 10K
11: EX-23.1 Consent of Experts or Counsel 1 7K
As filed with the Securities and Exchange Commission on July 13, 2007
Registration No. 333------------
United States
Securities and Exchange Commission
Washington, D.C. 20549
Form S-1
Registration Statement
Under The Securities Act of 1933
Powered Corporation
(Exact name of small business issuer in its charter)
Texas 4991 76-0534152
(State or other jurisdiction of (Primary standard (I.R.S. Employer
incorporation or organization) industrial code) Identification Number)
Powered Corporation
2925 Briarpark Dr, Suite 930
Houston, Texas 77042
voice: 713-992-4755
fax: (281) 493-3444
(Address and telephone number of principal executive offices and principal place
of business)
James Jeffrey
2925 Briarpark Dr, Suite 930
Houston, Texas 77042
voice: : 713-992-4755
fax: (281) 493-3444
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
With a Copy to:
Joel Seidner, Esq.
880 Tully Road #50
Houston, Texas 77079
voice: (281) 493-1311
fax: (281) 667-3292
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration Statement number of the earlier effective
Registration Statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
Registration Statement number of the earlier effective Registration Statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
Registration Statement number of the earlier effective Registration Statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
1
CALCULATION OF REGISTRATION FEE
Title Of Each Proposed Proposed
Class Of Maximum Maximum
Securities Amount Offering Aggregate Amount of
To Be To Be Price Offering Registration
Registered Registered (1) Per Share Price Fee
--------------------------------------------------------------------------------
Selling
Shareholder
Common Stock 4,610,000 shares $10.00 (2) $46,100,000 $ 1,430.00
per share ------------
Total Fee $ 1,430.00
============
--------------------------
(1) In accordance with Rule 416 promulgated under the Securities Act of 1933,
this Registration Statement also covers an indeterminate number of additional
shares of common stock as may be issuable upon pursuant to terms which provide
for a change in the amount of securities being offered or issued to prevent
dilution resulting from stock splits, stock dividends, or similar transactions
(2) The Proposed Maximum Offering Price Per Share was computed pursuant to Rule
457. This fee is calculated based on the reasonable estimate of the company as
to the price at which the shares will trade when there is a market for trading
our common stock. This offering is our initial public offering by selling
stockholders. Our stock has not and does not now have a public trading market.
THE INFORMATION IN THIS PROSPECTUS IS SUBJECT TO COMPLETION OR AMENDMENT.
THE SECURITIES COVERED BY THIS PROSPECTUS CANNOT BE SOLD UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BECOMES EFFECTIVE.
THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN
WHICH AN OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF THAT STATE.
2
PART I
INFORMATION REQUIRED IN A PROSPECTUS
3
WE HAVE FILED A REGISTRATION STATEMENT RELATING TO THESE SECURITIES WITH
THE SECURITIES AND EXCHANGE COMMISSION. WE WILL AMEND AND COMPLETE THE
INFORMATION IN THIS PROSPECTUS. THE INFORMATION IN THIS PROSPECTUS IS NOT
COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE
REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS
EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND WE ARE
NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR
SALE IS NOT PERMITTED.
THIS IS OUR INITIAL PUBLIC OFFERING BY SELLING STOCKHOLDERS
SUBJECT TO COMPLETION July 13, 2007
PROSPECTUS
Powered Corporation
2925 Briarpark Dr, Suite 930
Houston, Texas 77042
voice: : 713-992-4755
fax: (281) 493-3444
4,610,000 Shares of Common Stock
This prospectus relates to the sale of up to 4,610,000shares of our
common stock by selling stockholders. We will not receive proceeds from the
sale of our shares by the Selling Stockholders.
There is no market for our common stock.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 10 OF THIS PROSPECTUS
BEFORE MAKING A DECISION TO PURCHASE OUR STOCK.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is ____ , 2007
4
Until __ , 2007, 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.
5
TABLE OF CONTENTS
Page
Available Information 7
Prospectus Summary 8
Selected Financial Data 9
Risk Factors 11
Information Regarding Forward-Looking Statements 16
Use of Proceeds 16
Determination of Offering Price 17
Dilution 17
Description of Business 18
Description of Property 20
Financial Statements 20 and F-1
Management's Discussion and Analysis 20
Market Risk 23
Market for Common Equity and Related Stockholder Matters 24
Directors, Executive Officers, Promoters and Control Persons 25
Executive Compensation 33
Security Ownership of Certain Beneficial Owners and Management 35
Organization Within Last Five Years 37
Certain Relationships and Related Transactions 37
Description of Securities 38
Selling Stockholders 41
Plan of Distribution 42
Changes In and Disagreements With Accountants
on Accounting and Financial Disclosure 43
Legal Proceedings 43
Interest of Named Experts and Counsel 43
Disclosure of Commission Position on Indemnification
for Securities Act Liabilities 43
6
AVAILABLE INFORMATION
We are not currently subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). At such time
as this registration statement is effective, we will begin filing periodic
reports, proxy materials and other information with the Securities and Exchange
Commission (the "Commission"). In addition, we will furnish stockholders with
annual reports containing audited financial statements certified by our
independent registered public accounting firm and interim reports containing
unaudited financial information as may be necessary or desirable. We will
provide without charge to each person who receives a copy of this prospectus,
upon written or oral request, a copy of any information that is incorporated by
reference in this prospectus (not including exhibits to the information that is
incorporated by reference unless the exhibits are themselves specifically
incorporated by reference). Such request should be directed to: James Jeffrey,
Powered Corporation, 2925 Briarpark Dr, Suite 930, Houston, Texas 77042, voice:
(713) 992-4755, fax: (281) 493-3444.
Our web site is www.poweredcorp.com. When this registration statement is
effective we will begin providing free of charge on our web site our annual
report on Form 10-KSB, quarterly reports on Form 10-QSB, current reports on Form
8-K, and amendments to those reports filed or furnished pursuant to Section
13(a) or 15(d) of the Exchange Act as soon as reasonably practicable.
We have filed a Registration Statement with the Commission under the
Securities Act of 1933, as amended (the "Securities Act") with respect to the
securities offered by this prospectus. This prospectus does not contain all of
the information set forth in the Registration Statement, parts of which are
omitted in accordance with the rules and regulations of the Commission. For
further information with respect to us and this offering, reference is made to
the Registration Statement, including its exhibits, that may be inspected
without charge at the public reference room maintained by the Commission at 100
F Street N.E., Washington , D.C. 20549, tel. 1-800-SEC-0330. Copies of such
material may also be obtained from the Public Reference Section of the
Commission at 100 F Street N.E., Washington , D.C. 20549.
The web site of the Commission is www.sec.gov and it contains reports,
proxy and information statements and other information regarding issuers that
file electronically with the Commission. Visitors to the Commission's web site
may access such information by searching the EDGAR database. This registration
statement and any amendments thereto will be on the Commission's web site.
7
PROSPECTUS SUMMARY
Our name is Powered Corporation. This is our initial public offering. In
this registration statement we refer to ourselves as Powered Corporation,
Powered, We, Us and Our. We have no subsidiaries. We were incorporated in
Texas in 1996. Our address is: Powered Corporation, 2925 Briarpark Dr, Suite
930, Houston, Texas 77042, voice: : 1-713-992-4755, fax: (281) 493-3444. Our
CEO is James Jeffrey.
Powered was formed to design, build and operate nuclear power plants and
related infrastructure facilities in various countries. We also prepare and
coordinate preliminary risk analysis and assessment studies for electric power
generation facilities. Ultimately we hope to be a joint venture partner or hold
an ownership position in power generation projects for which we conduct
preliminary risk analysis and assessment studies. We also hope to take on the
role of the builder of power generation projects. In 2006, Khalid Al-Sunaid, a
Director, engaged us and paid us $25,000 to prepare a preliminary risk analysis
and assessment study concerning a power generation project in the Republic of
Yemen. We completed that preliminary risk analysis and assessment study in
2006.
THE OFFERING
Outstanding 41,364,000 shares outstanding as of July 13, 2007.
Common Stock
Before This
Offering
Common Stock 4,610,000 shares offered by selling stockholders.
Offered
Outstanding 41,364,000 shares of if all offered shares are sold.
Common Stock
After This
Offering
Offering Price Shares held by selling stockholders will be sold for a price
to be determined at the time of sale by the Selling
Stockholders. The Selling Stockholders are not required to
sell any shares.
Proceeds We will not receive proceeds from the sale of our shares by
the Selling Stockholders.
Risk Factors The securities offered hereby involve a high degree of risk.
See "Risk Factors."
8
[Enlarge/Download Table]
SELECTED FINANCIAL DATA
Years ended
December 31,
-------------------------------------------------------------------------------
2002 2003 2004 2005 2006
-------------------------------------------------------------------------------
Statement of operations data:
Revenues:
Consulting fees to
related party $ - $ - $ - $ - $ 25,000
Operating expenses:
General and administrative 10,000 3,000 1,111,562 634,765 1,449,930
Depreciation
------------ ------------- ------------- ------------- --------------------
Total operating expenses 10,000 3,000 1,111,562 634,765 1,449,930
------------ ------------- ------------- ------------- --------------------
Loss from operations (10,000) (3,000) (1,111,562) (634,765) (1,424,930)
Other income (expenses):
Dividend income 305
Currency exchange (1,010)
------------ ------------- ------------- ------------- --------------------
Total other expenses - - - - (705)
------------ ------------- ------------- ------------- --------------------
Net loss $ (10,000) $ (3,000) $ (1,111,562) $ (634,765) $ (1,425,635)
------------ ------------- ------------- ------------- --------------------
Net loss per share $ 0.00 $ 0.00 $ (0.02) $ (0.01) $ (0.02)
------------ ------------- ------------- ------------- --------------------
Weighted average number
of common shares 9,786,753 10,043,192 62,166,424 64,436,582 67,800,904
------------ ------------- ------------- ------------- --------------------
As of December 31,
-------------------------------------------------------------------------------
2002 2003 2004 2005 2006
-------------------------------------------------------------------------------
Balance sheet data:
Cash $ - $ - $ - $ - $ 60,541
Total assets - - 5,000 5,000 66,902
Long-term debt - - - - -
Convertible preferred stock - - - - -
Total stockholders' equity - - 5,000 5,000 46,902
9
[Download Table]
Three months
ended March 31,
------------------------------------
2006 2007
------------------------------------
Statement of operations data:
Revenues:
Consulting fees to
related party $ - $ -
Operating expenses:
General and administrative 172,358 30,958,813
Depreciation 5,103
----------------- -----------------
Total operating expenses 172,358 30,963,916
----------------- -----------------
Loss from operations (172,358) (30,963,916)
Other income (expenses):
Dividend income - 24
Currency exchange - (103)
----------------- -----------------
Total other expenses - (79)
----------------- -----------------
Net loss $ (172,358) $ (30,963,995)
----------------- -----------------
Net loss per share $ 0.00 $ (0.76)
----------------- -----------------
Weighted average number
of common shares 66,358,267 40,964,000
----------------- -----------------
As of March 31,
-----------------
2007
-----------------
Balance sheet data:
Cash $ 1,520,794
Total assets 2,021,407
Long-term debt -
Convertible preferred stock -
Total stockholders' equity 2,000,407
10
RISK FACTORS
You should carefully consider the following risk factors before purchasing
our common stock. The risks and uncertainties described below are not the only
ones we face. There may be additional risks and uncertainties that are not known
to us or that we do not consider to be material at this time. If the events
described in these risks occur, our business, financial condition and results of
operations would likely suffer. This prospectus contains forward-looking
statements that involve risks and uncertainties. Our actual results may differ
significantly from the results discussed in the forward-looking statements. This
section discusses the risk factors that might cause those differences.
Risks About Our Financial Condition
-----------------------------------
WE HAVE LIMITED CAPTIAL TO EXECUTE OUR BUSINESS PLAN.
We will need to raise sufficient funds to finance our activities. We may
not be able to achieve or sustain profitability.
WE MUST RAISE CAPITAL.
To raise capital, we may sell additional equity securities, or accept debt
financing or obtain financing through a bank or other entity. There is no limit
as to the amount of debt we may incur. Additional financing may not be available
to us or may not be available on terms acceptable to us. If additional funds are
raised through the issuance of additional stock, there may be a significant
dilution in the value of both classes of our outstanding Common Stock.
WE MAY NOT BE ABLE TO RAISE THE REQUIRED CAPITAL TO CONDUCT OUR OPERATIONS.
We will require additional capital resources in order to conduct our
operations. We expect that our available cash and contributions from our
Directors and Officers will be insufficient to finance our planned activities
beyond 2007. In order to grow and expand our business, we will need to raise
additional funds within approximately twelve months.
11
Risks About Our Foreign Operations
----------------------------------
WE MAY BECOME SUBJECT TO FOREIGN GOVERNMENTAL REGULATIONS.
All of our power generation preliminary risk analysis and assessment
studies will be conducted in foreign countries. The same will be true for any
future power construction projects. These activities may be subject to
extensive foreign government regulation whereby a foreign government may
interrupt or terminate a preliminary risk analysis and assessment study or
project because of ecological and other considerations. A foreign government
could also impose untenable conditions on us. Such conditions would mean that
we would have to halt our activity. It is impossible to predict future
proposals that might be enacted into law and the effect they might have on us.
Government restrictions on our activities may have an adverse effect on us.
State and local statutes and regulations require permits for drilling
operations, drilling bonds and reports concerning operations. In addition, there
are state statutes, rules and regulations governing conservation matters,
including the unitization or pooling of oil and gas properties, establishment of
maximum rates of production from oil and gas wells and the spacing, plugging and
abandonment of such wells. Such statutes and regulations may limit the rate at
which oil and gas could otherwise be produced from our properties and may
restrict the number of wells that may be drilled on a particular lease or in a
particular field.
LOCAL AND REGIONAL HOSTILITIES.
Our first preliminary risk analysis and assessment study was about electric
power generation in the Republic of Yemen, which is in a region of the world
where there have been recent regional hostilities. Although the Republic of
Yemen is a peaceful nation, external or internal forces could potentially
create a political or military climate that might cause a change in political
leadership or the outbreak of local or regional hostilities. Such a change
could result in our having to cease our operations in the Republic of Yemen and
result in the loss of business opportunities there.
REPERCUSSIONS FROM THE TERRORIST ACTS COULD HARM US.
Terrorist attacks many cause instability where we may have business
activity. Armed conflict, civil unrest, terrorist activities and the attendant
political instability and societal disruption may reduce demand for our services
and prevent us for competing our work
LOCAL POLITICS.
Our non-U.S. activities may be substantially affected by factors beyond our
control, any of which could materially adversely affect our financial position
or results of operations. Furthermore, in the event of a dispute arising from
our non-U.S. operations, we may be subject to the exclusive jurisdiction of
courts outside the United States or may not be successful in subjecting non-U.S.
persons to the jurisdiction of the courts in the United States.
We expect most of our business activity to occur in foreign counties which
will make us subject to:
-- political uncertainties, and changes in governmental electric power
policies or the personnel administering them;
-- expropriation of property;
-- cancellation or modification of contract rights and construction permits;
-- foreign exchange restrictions;
-- currency fluctuations;
-- risks of loss due to civil strife, acts of war, terrorist activities and
insurrection;
-- royalty and tax increases; and
-- other risks arising out of foreign governmental sovereignty over the areas
in which our operations are conducted.
12
WE HAVE NO INSURANCE AT THIS TIME. WE DO NOT INSURE AGAINST POTENTIAL LOSSES. WE
COULD BE SERIOUSLY HARMED BY UNEXPECTED LIABILITIES AND LOSSES.
We do not currently maintain insurance against any potential losses or
liabilities arising from our operations.
Risks About the Business of Preliminary Risk Analysis and Assessment Studies and
--------------------------------------------------------------------------------
Electric Power Generation Construction.
---------------------------------------
THE UNAVAILABILITY OF POWER GENERATION EQUIPMENT COULD ADVERSELY IMPACT US.
At such time as when, if and as we begin a power construction project, the
domicile nation of the source of equipment could prevent us from exporting such
equipment. Conversely, a foreign country could prevent imports from the
domicile nation of the source of equipment. Any of unavailability, shortages or
increases in the cost of equipment, supplies or personnel could delay or
adversely affect us. There can be no assurance that we will be able to obtain
the necessary equipment or that services will be available at economical prices.
EXPANSION OF OUR PRELIMINARY RISK ANALYSIS AND ASSESSMENT STUDY CAPABILITIES OR
CONSTRUCTION CAPABILITIES WILL REQUIRE CAPITAL FROM OUTSIDE SOURCES.
Absent raising additional capital or entering into joint venture agreements
with larger businesses, we will not be able to increase the scope of our
activities. There is no assurance that capital will be available in the future
to us or that capital will be available to us under terms that are acceptable
to us. We will need to raise additional money, either through the sale of equity
securities (which could dilute the existing stockholders' interest), through the
entering of joint venture agreements (which, while limiting our risk, could
reduce our ownership interest in particular assets), or from borrowings from
third parties (which could result in our assets being pledged as collateral and
which would increase our debt service requirements).
Additional capital could be obtained from a combination of funding sources,
many of which could have an adverse effect on our business, results of
operations and financial condition. These potential funding sources, and the
potential adverse effects attributable thereto, include:
- cash flow from operating activities, which is sensitive to income we
receive;
- borrowings from financial institutions, which may subject us to
restrictive covenants, including covenants restricting our ability to
raise additional capital or pay dividends;
- debt offerings, which would increase our leverage and add to our need
for cash to service such debt (which could result in additional assets
being pledged as collateral and which could increase our debt service
requirements);
- additional offerings of equity securities, which would cause dilution
of our common stock;
- additional sales of interests in our projects, which could reduce
future revenues.
Our ability to raise additional capital will depend on the results of
operations and the status of various capital markets and industry markets at the
time additional capital is sought. Capital may not become available to us from
any particular source or at all from any source. Even if additional capital
becomes available, it may not be on terms acceptable to us or on favorable
terms. Failure to obtain additional financing on acceptable terms may have an
adverse effect on our business, results of operations and financial condition.
WE HAVE COMPETITION FROM OTHER COMPANIES.
A large number of large companies are engaged in power generation
feasibility studies and construction projects., and
13
there is competition for the most desirable projects. We expect intense
competition from other companies. We could be competing with large companies
which may have financial resources significantly greater than ours.
WE DEPEND ON CONTRACTORS AND VENDORS.
We will be dependent on contractors and vendors for the success of our
power generation feasibility studies and construction projects. We could be
harmed if we fail to attract quality contractors and vendors to work for us. We
will have little control over factors that would influence the performance of
our vendors.
RISKS RELATED TO OUR FINANCIAL OPERATIONS
-----------------------------------------
WE HAVE A HISTORY OF LOSSES.
We have experienced substantial operating losses. We expect to incur
significant operating losses until our revenues grow substantially. We will
also need to raise sufficient funds to finance our activities. We may be unable
to achieve or sustain profitability.
WE HAVE AN ACCUMULATED DEFICIT AND MAY INCUR ADDITIONAL LOSSES.
We have a substantial accumulated deficit. We may not be able to meet our
debts as they become due. If we are unable to generate sufficient cash flow or
obtain funds to pay debt, we will be in default.
IF WE CANNOT OBTAIN ADDITIONAL FINANCING, WE MAY HAVE TO CURTAIL OPERATIONS AND
MAY ULTIMATELY CEASE TO EXIST.
Our financial statements reflect recurring, ongoing and substantial yearly
net losses, and negative cash flows from operations. These conditions require
sufficient additional funding or alternative sources of capital to meet our
working capital needs. We have raised capital and used our stock to pay
consultants. However, future financing may not be available in amounts or on
terms acceptable to us, if at all. If we cannot raise funds on acceptable terms,
or achieve positive cash flow, we may be forced to curtail operations or may
ultimately cease to exist. We may require additional capital resources in order
to conduct our operations. If we cannot obtain additional funding, we may be
forced to reduce our scope of operations. In order to grow and expand our
business, and to introduce our services to the marketplace, we will need to
raise additional funds.
RISKS ABOUT OUR SECURITIES
--------------------------
THERE HAS BEEN NO PRIOR MARKET FOR OUR SECURITIES AND A PUBLIC MARKET FOR OUR
SECURITIES MAY NOT DEVELOP OR BE SUSTAINED.
Our Common Stock is not registered. There is not now, and there has never
been a public trading market for our Common Stock, nor a trading symbol. We have
never had a market maker for our stock. There is no assurance that there will
ever be trading market for our common stock.
WHEN, IF AND AS OUR COMMON STOCK STARTS TRADING IN A PUBLIC MARKET, THE STOCK
PRICE MAY NOT INITIALLY, NOR OVER TIME, REFLECT OUR TRUE VALUE.
The market price of our common stock may not accurately reflect the future
value of our stock in any market. Our stock price may fluctuate significantly.
We do not know what the value of our common shares will be in the future.
WE MAY ISSUE ADDITIONAL SHARES OF COMMON STOCK IN THE FUTURE, WHICH COULD CAUSE
DILUTION TO ALL SHAREHOLDERS.
We may seek to raise additional equity capital in the future. Any issuance
of additional shares of our common stock will dilute the percentage ownership
interest of all shareholders and may dilute the book value per share of our
common stock.
14
SHAREHOLDERS COULD INCUR NEGATIVE IMPACT DUE TO THE REGSITRATION OR REMOVAL OF
THE LEGEND ON A SIGNIFICANT PERCENTAGE OF OUR OUTSTANDING SHARES OF COMMON
STOCK, OR THE EXERCISE OF OPTIONS.
As of July 13, 2007, all shares of our common stock and preferred stock are
restricted stock. In the future we may issue other shares of restricted stock
or options on common stock. We are registering a substantial number of shares
of common stock. In the event that a substantial number of these shares are
offered for sale in the marketplace by selling stockholders, the market price of
our common stock could be adversely affected.
OUR MANAGEMENT CONTROLS A SIGNIFICANT PERCENTAGE OF OUR CURRENT OUTSTANDING
COMMON STOCK; THEIR INTERESTS MAY CONFLICT WITH THOSE OF OUR SHAREHOLDERS.
As of July 13, 2007, we have outstanding 4,000 shares of Series B Preferred
Stock, which at this time has a constant 51% of the voting power until the year
2099. These shares are owned by our Directors. This concentration of voting
control gives our Directors substantial influence over any matters which require
a shareholder vote, including, without limitation, the election of Directors,
even if their interests may conflict with those of other shareholders. It could
also have the effect of delaying or preventing a change in control of or
otherwise discouraging a potential acquirer from attempting to obtain control of
us. This could have an adverse effect on the market price of our common stock
or prevent our shareholders from realizing a premium over the then prevailing
market prices for their shares of common stock.
IF A TRADING MARKET DEVELOPS FOR OUR COMMON STOCK, WE ANTICIPATE OUR STOCK PRICE
TO BE HIGHLY VOLATILE AND YOU MAY LOSE SOME OR ALL OF YOUR INVESTMENT.
Trading prices of our common stock may fluctuate in response to a number of
events and factors, such as:
- general economic conditions changes in interest rates;
- conditions or trends in the power industry;
- new products, services, innovations, and strategic developments by our
competitors or us, or business combinations and investments by our
competitors or us;
- changes in environmental regulation;
- changes in our capital structure, including issuance of additional
debt or equity to the public;
- corporate restructurings, including layoffs or closures of facilities;
- Financial analyst reports, news and speculation.
Any of these events may cause our stock price to rise or fall and may
adversely affect our business and financing opportunities.
WE DO NOT INTEND TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE; YOU MAY NEVER SEE A
RETURN ON YOUR INVESTMENT.
We do not anticipate being able to pay cash dividends on our common stock
in the foreseeable future. We anticipate that any profits from our operations
will be devoted to our future operations. Any decision to pay dividends will
depend upon our profitability at the time, cash available, the desire of the
Board of Directors and other factors. In all likelihood, an investor in this
offering will realize a profit on their investment only if the market price of
our common stock increases in value and he sells his stock.
15
SELLING STOCKHOLDERS MAY SELL SECURITIES AT ANY PRICE OR TIME WHICH COULD REDUCE
THE MARKET PRICE OF OUR COMMON STOCK.
The Selling Stockholders may offer and sell their shares at prices and
times determined by them. However, the Selling Stockholders are not required to
engage in any stock selling at all. The timing of sales and the prices at which
the shares are sold by the Selling Stockholders could have an adverse effect
upon the public market for our common stock. If the Selling Stockholders offer
or sell their shares at less than the then prevailing market price, our stock
price may decline.
IF THERE IS EVER A PUBLIC MARKET FOR OUR COMMON STOCK, IT MAY TRADE UNDER $5.00
PER SHARE. THE PENNY STOCK REGULATIONS COULD ADVERSELY AFFECT THE MARKET PRICE
OF OUR COMMON STOCK AND MAY AFFECT THE ABILITY OF HOLDERS OF OUR COMMON STOCK TO
SELL THEIR SHARES.
Our securities may be considered a penny stock in the future. Penny stocks
generally are securities with a price of less than $5.00 per share other than
securities registered on national securities exchanges or quoted on the Nasdaq
stock market, provided that the current price and volume information with
respect to transactions in such securities is provided by the exchange or
system. Our securities may be subject to penny stock rules that impose
additional sales practice requirements on broker-dealers who sell penny stock
securities to persons other than established customers and accredited investors.
For transactions covered by these rules, the broker-dealer must make a special
suitability determination for the purchase of penny stock securities and have
received the purchaser's written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the penny stock rules require the delivery, prior to the transaction, of
a disclosure schedule prescribed by the Securities and Exchange Commission
relating to the penny stock market. The broker-dealer also must disclose the
sales commissions payable to both the broker-dealer and the registered
representative and current quotations for the securities. Monthly statements
must be sent by the broker-dealer disclosing recent price information on the
limited market in penny stocks. The penny stock rules may restrict the ability
of broker-dealers to sell our securities and may have the effect of reducing the
level of trading activity of our Common Stock in the public market, if any.
MATERIAL RISKS RELATED TO OUR CORPORATE GOVERNANCE
--------------------------------------------------
OUR OFFICERS AND DIRECTORS HAVE INDEMNITY RIGHTS.
The corporate law of Texas, our Articles of Incorporation and our By-Laws
provide that we may indemnify our Officers and Directors. The effect of these
provisions could be to dissuade lawsuits against our Officers and Directors.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to our Directors, Officers and controlling persons pursuant to
the foregoing provisions, 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.
INFORMATION ABOUT
FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus, including, without
limitation, statements containing the words "believes," "anticipates,"
"expects," and other words of similar import, are "forward-looking statements."
Forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause our actual results, performance or achievements to
be materially different from any future results, performance, or achievements
expressed or implied by forward-looking statements. Given these uncertainties,
readers are cautioned not to place undue reliance on forward-looking statements.
USE OF PROCEEDS
We will not receive proceeds from the sale of our shares by the Selling
Stockholders. We will pay for the cost of registering the shares of common
stock in this offering.
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DETERMINATION OF OFFERING PRICE
There is no established public market for the common stock being
registered. The offering price is based on the reasonable estimate of the
company as to the price at which the shares will trade when there is a market
for trading our common stock.
DILUTION
Our net tangible book value, based on our unaudited financial statements as
of March 31, 2007 was $2,000,407 or $0.05 per share of outstanding common stock.
Net tangible book value per share is determined by dividing our tangible
book value (total tangible assets less total liabilities) by the number of
outstanding shares of our common stock which was 40,964,000 shares outstanding
as of March 31, 2007.
Our net tangible book value is not effected by sales by made by the selling
securities holders to new investors.
Assumed public offering
price: $10.00
Net tangible book value
per share before this
Offering: $ 0.05
Net tangible book value
after this offering $ 0.05
Net tangible book value
per share after this
offering assuming all
offered shares are sold: $ 0.05
Dilution of net tangible
book value per share
to new investors: $ 9.95
Increase in net tangible
book value per share
to existing shareholders $ 0.00
Immediate dilution
per share
to new investors $ 9.95
17
DESCRIPTION OF BUSINESS
HISTORY
Powered Corporation, a Texas Corporation, was formed in 1996 by James
Jeffrey for the original purpose of entering the evolving deregulated USA
electric power market. At that time, our focus was to reduce electrical power
costs in public schools. This effort and Mr. Jeffrey's participation in
Congressional hearings helped pave the way for schools and others to purchase
electricity from competitive sources. Prior to 2002, we exited that line of
business.
Our growth is dependent on our attaining profit from our operations and our
raising capital through the sale of equity or debt. There is no assurance that
we will be able to raise any funds from financing activities or operations. Our
functional currency at this time is the U.S. dollar.
THE COMPANY TODAY
Powered was formed to design, build and operate nuclear power plants and
related infrastructure facilities in various countries. We also prepare and
coordinate preliminary risk analysis and assessment studies for electric power
generation facilities. Ultimately we plan to be a joint venture partner or hold
equity in power generation projects for which we have conducted preliminary risk
analysis and assessment studies. We also plan to take on the role of the builder
of power generation projects.
In addition to providing power generation preliminary risk analysis and
assessment studies for others, we look forward to the day when we are in a
position to acquire or participate in power generation facilities. We plan to
include advanced nuclear power technologies in the development of electric power
projects. Concurrent with the development of electric power facilities, we will
also develop desalination plants to help meet growing concerns over safe water
resources. We will use existing desalination technology and will choose from the
best applications of reverse osmosis and distillation technologies for each
location. We are developing alliances with major technology developers and
entities that possess the requisite knowledge and capabilities.
We are currently in negotiations with the Republic of Yemen about the
construction of a power project consisting of a minimum of 5,000 MW. These
discussions are at the Memorandum of Understanding stage. We are also in
negotiations with the Republic of Yemen about our participation in the same
5,000 MW project.
BUSINESS STRATEGY
In addition to revenue from electric power project preliminary risk
analysis and assessment studies, other sources of revenue in the future may
include participation in electric power generation projects, desalination plants
and oil and gas production and E&P. Such revenues may be in the form of
development fees from farm-in agreements with others, carried and royalty
interests from project revenue, and gains from the sale of all or a portion of
our ownership interest in a project. We will initially focus our efforts in
China and the Middle East.
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COMPETITION
The nuclear power industry appears to be poised to experience a period of
renewal, as there is a tremendous amount of interest in developing new nuclear
power facilities worldwide. This is in part driven by peak oil concerns and the
need for energy security. Concerns for the environment and cessation of carbon
emissions can also been attributable for some of the interest in new nuclear
electric power facilities. We have identified a potential for the development
of over 50,000 MW nuclear power facilities in our target markets. This number
represents a significant amount of development. When one considers the interest
for similar development in other markets, one may conclude ample opportunity
exists for any firm that is capable and desires to participate in this industry.
Our ability to compete will be dependent upon the level of quality and
service we provide and our ability to manage the finances and operations of
acquired facilities. There can be no assurances that we will be able to
accomplish our goals or compete on a profitable basis within our target market.
REGULATION AND ENVIRONMENTAL REGULATIONS
There are significant jurisdictional regulations in place in most nations
regulating the nuclear power industry. These include environmental compliance
regulations as well as product quality specifications.
EMPLOYEES
We currently have five Executive Officers: Jalal Alghani, James Jeffrey,
John Malone, Dr. David Baldwin and Joel Seidner.
Jalal Alghani is our Co-Chairman, Director and CEO--Middle East and Africa.
James Jeffrey is our Co-Chairman, Director and CEO--North & South America and
Asia. John Malone is our Director, CFO, Principal Accounting Officer, Secretary
and Treasurer. Joel Seidner is our Chief Legal Officer. Dr. David Baldwin is
Chief Nuclear Technology Officer. Jalal Alghani, Dr. Baldwin and James Jeffrey
devote most of their time to our business. John Malone and Joel Seidner devote
part-time to our business.
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DESCRIPTION OF PROPERTY
Our executive offices are located at 2925 Briarpark Drive, Suite 930,
Houston, Texas 77042. Our telephone number is 713-992-4755. We may seek larger
offices at a later date. We believe that there is ample space available in
Houston to which we may relocate at competitive rates if necessary.
We also have branch offices in Dubai, U.A.E. and Sanaa, Republic of Yemen.
FINANCIAL INFORMATION
Our financial statements begin on page F-1.
MANAGEMENT'S DISCUSSION AND ANALYSIS
ABOUT FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus, including, without
limitation, statements containing the words "believes," "anticipates,"
"expects," and other words of similar import, are "forward-looking statements."
Forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause our actual results, performance or achievements to
be materially different from any future results, performance, or achievements
expressed or implied by forward-looking statements. Given these uncertainties,
readers are cautioned not to place undue reliance on forward-looking statements.
We prepare electric power generation preliminary risk analysis and
assessment studies. Ultimately we plan to be a joint venture partner or hold
equity in power generation projects for which we conduct preliminary risk
analysis and assessment studies.
At the present time our functional currency is the US dollar.
We recognize revenue when all four of the following criteria are met: (i)
persuasive evidence that an arrangement exists; (ii) delivery of the products
and/or services has occurred; (iii) the selling price is both fixed and
determinable and; (iv) collectability is reasonably probable. Our revenues are
presently derived from the preparation of preliminary risk analysis and
assessment studies for power projects. In the future we hope to have income
related to ownership of generation projects.
Our fiscal year end is December 31.
Our growth is dependent on attaining profit from our operations, or our
raising additional capital either through the sale of stock or borrowing. There
is no assurance that we will be able to raise any equity financing or sell any
of our products at a profit.
Our future capital requirements will depend upon many factors, including:
- The cost to acquire equipment that we then would resell.
- The cost of sales and marketing.
- The rate at which we expand our operations.
20
- The results of our consulting business.
- The response of competitors.
The following discussion and analysis of our financial condition and
results of operations should be read in conjunction with the audited financial
statements and accompanying notes and the other financial information appearing
elsewhere herein.
The financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or amounts and
classification of liabilities that might be necessary should we be unable to
continue in existence. Our ability to continue as a going concern is dependent
upon our ability to generate sufficient cash flows to meet our obligations on a
timely basis, to obtain additional financing as may be required, and ultimately
to attain profitable operations. However, there is no assurance that profitable
operations or sufficient cash flows will occur in the future.
Our main office is Houston, Texas. Powered was formed to design, build and
operate nuclear power plants and related infrastructure facilities outside of
the US. We also prepare electric power generation preliminary risk analysis and
assessment studies. Ultimately we hope to be a joint venture partner or hold
equity in power generation projects for which we conduct preliminary risk
analysis and assessment studies.
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CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our discussion and analysis of our financial condition and results of
operations is based upon our consolidated financial statements, which have been
prepared in accordance with generally accepted accounting principles. The
preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenue and
expenses, and related disclosure of contingent assets and liabilities. On an
ongoing basis, we evaluate our estimates. We base our estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances. These estimates and assumptions provide a basis for us
to make judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Our actual results may differ from
these estimates under different assumptions or conditions, and these differences
may be material.
We recognize revenue when all four of the following criteria are met: (i)
persuasive evidence that an arrangement exists; (ii) delivery of the products
and/or services has occurred; (iii) the selling price is both fixed and
determinable and; (iv) collectibility is reasonably probable. Our revenues are
presently derived from us preparing preliminary risk analysis and assessment
studies. In the future we hope to have income related to ownership of
generation projects.
PLAN OF OPERATION.
During 2006 and 2007, we have had success in obtaining funds through the
sale of stock. As of March 31, 2007, we had $33,404 in cash and cash held by
officer of $1,487,390. We believe that this amount of funds is sufficient to
fund our operations through December 31, 2008 at the activity level at which we
presently operate. If we need more funds, such as to participate in an electric
power generation project, then we will have to raise more funds through the sale
of stock.
RESULTS OF OPERATIONS-YEARS ENDED DECEMBER 31, 2006 AND 2005.
We had revenue of $25,000 in 2006 compared to revenue of $-0- in 2005. This
increase in revenue is due to revenue from our first preliminary risk analysis
and assessment studies.
We had a net loss of $1,425,635 in 2006 compared to a net loss of $634,765
in 2005. The increase in net loss was due to the ramping up of our operations
in 2006. Net loss in 2006 includes imputed officers' salaries equal to
$480,000 per year. These salaries are recorded as a contribution to capital
based upon the Company's recognition that a salary arrangement of equivalent
amount will be negotiated when the Company obtains funding.
Net cash used by operating activities was $483,775 in 2006 compared to
$120,625 net cash used by operating activities in 2005. The increase in net
cash used is due to the ramping up of our operations in 2006.
RESULTS OF OPERATIONS-YEARS ENDED DECEMBER 31, 2005 AND 2004.
We had revenue of $-0- in both 2005 and 2004.
We had a net loss of $634,765 in 2005 compared to a net loss of $1,111,562
in 2004. The decrease in net loss was due to a scaling back of our operations
in 2005. Net loss in both 2005 and 2004 includes officers' salaries equal to
$480,000 per year. These salaries are recorded as a contribution to capital
based upon the Company's recognition that a salary arrangement of equivalent
amount will be negotiated when the Company obtains funding.
Net cash used by operating activities was $120,625 in 2005 compared to
$105,532 net cash used by operating activities used in 2004.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006.
We had revenue of -0- in the three months ended March 31, 2007 compared to
revenue of -0-in the three months ended March 31, 2006.
We had a net loss of $30,963,916 in the three months ended March 31, 2007
compared to a net loss of $172,358 in the three months ended March 31, 2006. The
increase in net loss is due to stock issued for services rendered.
22
Net cash used by operating activities was $750,103 in the three months
ended March 31, 2007 compared to $50,498 net cash used by operating activities
used in the three months ended March 31, 2006. The increase is due to our
ramping up of operation in 2007.
LIQUIDITY
As of March 31, 2007, we had cash on hand of $33,404 and cash held by
officer of $1,487,390. We anticipate raising funds in 2007 through financing
activities.
MARKET RISK
Our functional currency is the US dollar. We do not hedge any risk.
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MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER
PURCHASES OF EQUITY SECURITIES.
There is no public trading market for our common stock.
As of July 13, 2007, we had outstanding:
(A) 41,364,000 shares of common stock.
(B) 30,000 shares of Series A preferred Stock, each share of which is
convertible into a minimum of 1,000 shares of common stock. None of the Series
A Preferred Stock is being registered hereby, nor are any shares underlying the
Series A Preferred Stock being registered hereby; and
(C) 4,000 shares of Series B Preferred Stock, none of which is being registered
hereby.
There are no options, warrants or similar securities outstanding.
As of July 13, 2007, we have 105 shareholders of record.
Our transfer agent is American Stock Transfer & Trust Company located at 59
Maiden Lane New York, NY 10038, tel. (800) 937-5449. www.amstock.com.
We have not paid any cash dividends on our common stock and we do not
expect to declare or pay any cash dividends on our common stock in the
foreseeable future. Payment of any cash dividends will depend upon our future
earnings, if any, our financial condition, and other factors as deemed relevant
by the Board of Directors.
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DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
OUR DIRECTORS AND EXECUTIVE OFFICERS ARE:
[Download Table]
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NAME AGE TITLE
-------------------- --- ------------------------------------------------
Jalal Alghani 47 Co-Chairman, Director, Co-CEO - Middle East and
Africa, and COO
-------------------- --- ------------------------------------------------
James Jeffrey 54 Co-Chairman, Director, President, Co-CEO - North
& South America, Asia
-------------------- --- ------------------------------------------------
Khalid Al-Sunaid 46 Director
-------------------- --- ------------------------------------------------
John Malone 53 Director, Chief Financial Officer, Secretary,
Principal Accounting Officer and Treasurer
-------------------- --- ------------------------------------------------
Joel Seidner 59 Chief Legal Officer
-------------------- --- ------------------------------------------------
Dr. David E. Baldwin 70 Chief Nuclear Technology Officer
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JALAL ALGHANI
Mr. Alghani possesses public and private company experience in debt
financing, assets and financial management, profit sharing agreements (PSA),
Royalty contracts negotiations, Joint Venture Agreements (JVA), Joint Operating
Agreement (JOA), financial risk assessment of oil and gas exploration, seismic
acquisition, drilling, pipeline transportation, refining both Oil and Gas
productions, cash flow and profit structure of upstream and downstream
operations of oil and gas operations. Mr. Alghani has additional experience in
international and domestic banking in United States, Europe, and Middle East
including private banking, commercial credit analysis and lending, letters of
credit, Real Estate syndication, assets conversion, mergers and reverse
acquisitions, public and private placement, and portfolio assets management. Mr.
Alghani is the Founder and Chairman of Adin Investment Company in the Republic
of Yemen. Mr. Alghani served as Vice Chairman and CFO of Adair International
Oil & Gas Inc. from 1990 to 2002.
In 2002, Mr. Alghani was not reelected to the position of Vice Chairman of
Adair International as a result of a hostile proxy contest led by a group of
stockholders and former members of management, who called themselves the Score
Group. Subsequent to the hostile proxy contest, Mr. Alghani was terminated by
Adair from his position as CFO by the newly-elected board. During the course of
the hostile proxy contest, the Score Group made numerous allegations that Mr.
Alghani had committed fraud, had mismanaged Adair and had misrepresented
management's ability to raise funds for Adair's business plan. The Score Group
also made numerous personal attacks against Mr. Alghani. Subsequent to the
proxy contest, Adair, then renamed EnDevCo, sued Mr. Alghani seeking to recover
damages, claiming that Mr. Alghani had allegedly caused harm to EnDevCo. Mr.
Alghani denied the allegations. Mr. Alghani countersued for defamation, slander
and libel. With respect to the previous allegations regarding criminal
investigations, Mr. Alghani has never been informed by any governmental agency
in any jurisdiction that he is, or was, the subject of any criminal
investigation and he has never been subject to any governmental agency civil or
criminal charges in any jurisdiction, at any time, for any matter, whether
related to his time at Adair or otherwise. The lawsuit against Mr. Alghani was
dismissed with prejudice in February 2005, resulting in: (A) EnDevCo having
repurchased shares of stock of EnDevCo held by Mr. Alghani; (B) Mr. Alghani
having sold his other shares of EnDevCo in the open market; (C) EnDevCo having
released and indemnified Mr. Alghani from any and all liability; (D) Mr. Alghani
having paid nothing and having given nothing to EnDevCo for the
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dismissal. Mr. Alghani is of the opinion that the dismissal with prejudice of
the lawsuit against him was a complete vindication of his service to EnDevCo
(f-k-a Adair International Oil and Gas).
Mr. Alghani is a citizen of the United States.
JAMES JEFFREY
James Jeffrey has been self-employed as a business consultant since 1995,
and a Director and the President of Powered Corporation since 1996. Mr. Jeffrey
served as President of a Houston-based investment-banking firm. He began his
working career in the engineering technical support section for EXXON, a major
U.S. oil refiner. This position primarily involved issues relating to equipment
reliability. Mr. Jeffrey's tenure with the refiner included several years
overseas with a major Middle East oil and gas producer. More recently, Mr.
Jeffrey has served as key principle in the planning and financing of a 50,000
barrel per day petroleum refinery project in the Middle East. Mr. Jeffrey's
background includes mortgage banking, private and public corporate finance, and
heavy mechanical and HVAC contracting. Mr. Jeffrey developed two U.S. patents
that served as the basis for a start-up mechanical contracting company servicing
the petroleum, petrochemical and power industries. Mr. Jeffrey was elected to
public office twice as a Houston area public school district trustee.
Mr. Jeffrey is a citizen of the United States.
KHALID AL-SUNAID
Since 1987, Khalid Al-Sunaid has been a transactional law specialist with a
broad background in business formation and management. He has been licensed to
practice law in The Kingdom of Saudi Arabia since 1987 and has been licensed
more recently in the United Arab Emirates. His practice is primarily composed
of international general corporate and banking law. He has been active in the
promotion of alternative dispute resolution throughout the Gulf Cooperation
Council (GCC) states. Increasingly his time is being devoted to transactions
involving significant commercial and industrial projects throughout the GCC
states. He is a founding partner in the law firm of Khalid Al-Sunaid & Talal
Al-Ahmadi Co. in Saudi Arabia. Mr. Al-Sunaid is a founding member and director
of a number of companies in the region involved in a variety of activities
including cement, HVAC, investments, transportation and health. These companies
are a mix of private and publicly traded concerns with registration in GCC
exchanges as well as on the London Exchange. Mr. A-Sunaid received his law
degree from the King Saud University in Riyadh in 1987.
Mr. Al-Sunaid is a citizen of the Kingdom of Saudi Arabia.
JOHN C. MALONE
John C. Malone, JD, CPA, co-founded Malone & Bailey, PC, in 1996. Malone &
Bailey specializes in audits of small, publicly-held companies. Malone &
Bailey's clients include companies in industries such as entertainment, high
technology, information services, retailing, the service industry, and
manufacturing companies. Services provided to U.S. and Canadian publicly-traded
companies include private placements, public offerings and related SEC and state
filings. Mr. Malone received his BBA, Cum Laude, from the University of North
Texas in Denton Texas, 1975. He completed his law degree from South Texas
College of Law in May 2000. Mr. Malone was admitted to the practice of law in
Texas in 2000. In prior years, Mr.
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Malone worked at Goldberg, Westheimer & Co.; Weinstein, Spira & Co.; and
Deloitte & Touche. He began his own practice in 1982, merging it into Malone &
Bailey, PC in 1996.
He is a member of the American Institute of Certified Public Accountants,
the Houston Chapter of the Texas Society of Certified Public Accountants, and
the American and Houston Bar Associations.
Mr. Malone is a citizen of the United States.
JOEL SEIDNER
Joel Seidner has been in the private practice of law since 1996. He is
involved in the preparation of securities registration statements, public
company periodic reports and regulatory filings with the SEC. He is also
involved in the preparation of disclosure documents utilized in mergers,
acquisitions, and private placements, and in the formation and compliance
aspects of securities broker-dealers. Mr. Seidner also testifies as an expert
in securities litigation matters and securities arbitration matters. Mr.
Seidner received his law degree from the Thurgood Marshall School of Law at
Texas Southern University, J.D. (1996) with honors, and he was admitted to the
practice of law in Texas in 1996. From 1983 until 2002, Mr. Seidner was
licensed as a stockbroker and as a securities firm principal. Mr. Seidner has
started several securities broker-dealers for others and he has started and
owned one broker-dealer. Mr. Seidner received a B.B.A. degree in Marketing from
the City University of New York in 1971. From 1971 through 1983, Mr. Seidner
was in the home furnishings business as a marketing executive for department
stores and manufacturers.
Mr. Seidner is a citizen of the United States.
DR. DAVID E. BALDWIN
Dr. Baldwin received his B.S. in plasma physics from MIT in 1958, and his
Ph.D. in plasma physics from MIT in 1962. From 1962 to 1970 he held research
and faculty positions at Stanford University, Culham Laboratory (England), and
Yale University. In 1970 he joined Lawrence Livermore National Laboratory (LLNL)
as a theoretical plasma physicist for Magnetic Fusion Energy (MFE) and in 1983
became Deputy Associate Director for MFE. In 1988 he was named Professor of
Physics and Director of the Institute for Fusion Studies at the University of
Texas at Austin. He returned to LLNL in 1991 as Associate Director for Energy.
From 1995 through May 2007, Dr. Baldwin was a Senior Vice-President, Energy
Group, General Atomics (GA) in San Diego (www.ga.com). Dr. Baldwin joined us
in May 2007.
Dr. Baldwin is a Fellow of the American Physical Society and in 1988 served
as Chair of the Division of Plasma Physics. He has also served as technical
editor for plasma physics for several scientific journals.
Dr. Baldwin is a citizen of the United States.
OUR ADVISORS:
The following persons are our advisors. Their extensive experience and
expertise in their respective fields is of great value to us. At this time, no
advisor has a contractual arrangement with us with respect to compensation.
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ISMAIL AL-NOAMAN
Ismail Al-Noaman has been the General Manager of Yemen Export Co (LPG Sales
& Export) (2002 - 2003); General Manager of Crude Oil Marketing Directorate,
Sanaa, Yemen (1996 - 2001); Chairman of JCC, Yemen Hunt Oil Company (1990 -
1996); General Manager, Office of Ministry of Oil & Minerals, Sanaa, Yemen (1987
- 1990); Manager, Marketing Department, Abu Dhabi National Oil Company
(www.adnoc.com), Abu Dhabi, U.A.E. (1976 - 1987).
RASHID H. AL-SHAMSI
Rashid has actively been working in the marketing and distribution of
petroleum products for over 22 years and is currently the General Manager of
Emirates General Petroleum Corporation, a state owned downstream marketing and
distribution entity governed by a board consisting of senior government
officials representing the energy, utilities and electricity authorities in the
United Arab Emirates. He spearheaded growth strategy through products and
services innovation and was instrumental in overseeing its implementation
(http://www.emarat.ae/about/management.php).
He is currently serving as board Chairman of many subsidiaries and
affiliated companies and joint ventures covering a range of activities in Auto
light vehicle repair services, petroleum products and aviation fuel marketing,
bulk storage, logistics and distribution in collaboration with a number of
multi-national oil majors such as Shell, BP and ExxonMobil. He is a Board Member
of the General Assembly Council of EmaratMisr Petroleum Company in Egypt.
Besides serving in the U.A.E official government and public sector, He is a
founding partner in the firm for architectural and engineering consultancy
private practice (MEECON) in Dubai and owner of Al Shamsi Property Management
Company in Dubai, an exclusive official agent of the world famous Shangri la
Hotel management group. He received his BS in Civil Engineering and Building
Science from the University of Southern California, USA in 1982.
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In addition to his responsibilities, he enjoys a successful business and
social life. He served as a board member of the Dubai Financial Market (DFM) and
is currently a Vice President of a Dubai Government committee formed to
transform the DFM into a public joint stock company. He served as a Board member
of the Dubai Chamber of Commerce and Industry for more than six years (91-97).
He is a member of the Institute of Petroleum and the Institute of Management in
the UK.
SAMI RASHED AL-SUNAID
Currently he is Manager, Trade Finance Group within the Project & Trade
Finance Department of Arab Petroleum Investments Corporation (APICORP).
APICORP, established in 1976, is owned by the 10 member States of the
Organization of the Arab Petroleum Exporting Countries (OAPEC). APICORP is one
of the leading financial institutions in the Middle East specializing in the
hydrocarbon related industries. Sami has 10 years of experience with APICORP.
He has worked on most of the financings concluded by APICORP in Saudi Arabia,
Qatar, Oman and Kuwait. He has considerable knowledge about most of the major
government as well as private sector petrochemical projects in the GCC area and
their financing structures. He also has extensive experience in the bank market
and its development in Saudi and the GCC area, as well as regional and
international markets. He enjoys an excellent relationship with the majority of
the regional banks and financial institutions. He is also experienced in the
Islamic financing. Additionally, he enjoys a wide base of contacts with
international, regional and local companies working in the oil & gas sector.
Before joining APICORP, he was a financial analyst with Rana Investment Co.
(Rana). Rana was the local partner with JP Morgan for the privatization of the
telecom sector in Saudi Arabia. Sami has B.S. degree in Finance from KFUPM.
DR. RAYMOND G. BAILEY
Dr. Bailey has over 40 years experience in chemical and petroleum
engineering and executive management in both Upstream and Downstream operations.
He is a noted Middle East expert and member of the Middle East Policy Council.
Dr. Bailey has served on a number of executive boards and has held various
senior executive positions. Dr. Bailey's experience as President, Exxon-Arabian
Gulf; General Manager of Abu Dhabi Onshore Oil Company; Operations Manager of
Qatar General Petroleum Corp. and; various operations superintendencies in
Aruba, Libya and the U.S. makes Dr. Bailey uniquely qualified to undertake and
lead Powered in its targeted oil and gas ventures. Dr. Bailey received his BS
Chemical Engineering from University of Houston in 1963; MS Chemical Engineering
from the New Jersey Institute of Technology in 1970; Engineering Doctoral
Studies - Lamar University in 1974 and; Ph.D. Colombia Pacific University in
1991.
He is a Registered Professional Engineer in Texas, a Life Member of the
American Institute of Chemical Engineers, a life member of the University of
Houston Alumni Association and; a Member of the Middle East Policy Council in
Washington D.C.
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RAFIC R. KOUSSA
Rafic Koussa has over 23 years of diversified and progressive experience as
a mechanical engineer, projects manager and business development executive. He
has extensive background and knowledge in the petroleum industry and in the
design, construction and maintenance of water and waste water distribution and
treatment systems. He is a recognized and sought after specialist in the water
industry having served in the Middle East for decades. Currently Rafic is the
Managing Director of Flutech L.L.C. in Dubai. He received a Bachelor of Science
degree in Mechanical Engineering from the University of Southern California.
AMER EL-KURDI
Current Division Chief, Treasury & Investment Department, Arab Monetary
Fund, Abu Dhabi, U.A.E. (www.amf.org.ae) Former Investment Analyst/Portfolio
Manager, U.A.E. Central Bank, Abu Dhabi, U.A.E. Former Global Equities Portfolio
Manager (VP), ABC International Ltd., London, England.
ADMIRAL JAMES A. "ACE" LYONS, JR. [U.S.NAVY-RETIRED].
Admiral Lyons retired from the US Navy after 36 years as an officer in both
command and staff positions of increasing responsibility and sensitivity.
Command positions culminated in command of the US Pacific Fleet (the largest
single military command in the world). Staff positions culminated in Deputy
Chief of Naval Operations (Plans, Policy and Operations) and Senior U.S.
Military Representative to the United Nations.
DR. LARRY LIXIN LIU
Dr. Liu received his BA in Materials Engineering from the Luoyang Institute
of Technology in China in 1983 and his MA and Ph.D. in Materials Science and
Engineering from the Harbin Institute of Technology - China over the years
between 1983 and 1989. He has published numerous peer review articles related to
material science and is frequently requested to speak at notable conferences
throughout Asia. Dr. Liu has served in a variety of key management positions in
several material related companies and most recently is serving as Chairman and
CEO of Fiberand Co., Ltd. (China). Fiberand is in the forefront of addressing
the structure of asphaltic road materials and the benefits of fiber
reinforcement in extending the useful life of roadways.
MICHAEL B. SELLMAN
Michael B. Sellman brings more than 25 years of nuclear experience to his
job as President and Chief Executive Officer of Nuclear Management Company
(NMC).
Michael joined Wisconsin Electric Power Company, owner of the NMC-operated
Point Beach plant, as senior vice president, Nuclear Power Business Unit, and
chief nuclear officer in 1998. He previously was vice president of Operations of
Entergy Nuclear, Inc. and served as president of Maine Yankee Atomic Power Co.
He was hired by Entergy Operations, Inc. in 1993 as general manager, Arkansas
Nuclear One. Later that year, he was named general manager, River Bend Nuclear
Plant, and in 1996 he became vice president of the Waterford Nuclear Plant.
30
Before joining Entergy, Sellman held various positions with Northern States
Power Co. between 1974 and 1993. From 1969 to 1974, he served in the U.S. Navy
under Admiral Rickover in the Division of Naval Reactors after being qualified
in submarines in 1968.
Michael serves on the Board of Directors of: (a.) Institute of Nuclear
Power Operations; (b.) Nuclear Energy Institute; (c.) American Nuclear Society
and; (d.) Nuclear Management Company. In addition he is (a.) Chairman of the
Utility Oversight Board for the Idaho National Laboratory, (b.) a member of the
Nuclear Energy Research Advisory Committee for the US Department of Energy, (c.)
Co-Chairman of the Industry Oversight Board of General Atomics (GT-MHR Project),
(d.) Member of the Industry Liaison Committee of the University of Wisconsin -
Nuclear Engineering Department.
He earned a Certificate of Completion from the Bettis Reactor Engineering
School, Westinghouse Bettis Atomic Power Laboratory in 1970, and in 1976 he
received his Senior Reactor Operator's License. He received a Bachelor of
Science degree in physics with high distinction from the University of Minnesota
in 1969. In 1973 he received a Master of Science in nuclear engineering from
Catholic University and in 1987 he earned a certificate of completion from the
Kellogg School of Business, Northwestern University.
TROY W. TUCKER
Troy has actively been working in the oil and gas industry for over 24
years and received a BS in Petroleum Engineering from the University of Texas in
1985. Troy is Vice President of Tucker Operating Company, Inc. (TOC) where he
works with his father, Tommy W. Tucker, Registered Professional Engineer No.
34544. TOC, which was formerly called Tommy W. Tucker & Associates, Inc., was
formed in 1972. TOC's primary scope of business is performing contract
engineering and operations for independent oil and gas companies from the Gulf
of Mexico to inland waters and all along the Texas and Louisiana Coast including
South and East Texas. Since inception TOC has planned drilled and completed in
excess of 2,000 wells from 650 feet to 18,000 feet. Recently Troy has
supervised all phases of a 175 well drilling program for an independent
operator. Some of his responsibilities included pre-spud negotiations with
landowners, sit preparations, open-hole logging and evaluation to final well
completions and facilities.
Troy is also President and owner of Edde Drilling Company, Inc. which is a
drilling contractor working in South Texas performing turnkey drilling
operations on wells in the 4,000 foot to 12,000 foot range. In December, Edde
finished building Rig #3, which is a newly built 1,000 hp mechanical rig with a
depth rating of 13,000 feet and is now currently in the process of building Rig
#4 which will be a twin to Rig #3. Edde Drilling turnkey drills approximately
70 wells per year in South Texas area for various operators and is currently
contracted into 2005.
31
PETER WILKINSON
Peter is a Licensed Professional Geoscientist (Texas State Board of
Professional Scientists) with 20 years Exploration and Production experience. He
has extensive experience in the execution of reserve and risk assessments. Peter
possesses advanced technical and business competencies including 3-D reservoir
characterization and modeling, 3D seismic data integration, seismic
interpretation, log analysis, well completion and testing recommendations,
sub-surface mapping, geostatistical analysis, depositional setting analysis,
drilling location planning, well site geology, exploration play concept and
prospect generation, project scoping, planning and management, risk and reserve
assessments, data management, QC and integration, remote sensing data analysis
and integration, petroleum systems diagrams and analysis, maturation modeling,
post drilling evaluations, applied sequence stratigraphy, geochemical data
integration and competitor analysis.
Peter has performed related work and lived abroad in places such as Brazil,
Caspian Sea Region, Russia, Thailand and, The Middle East. He has held key
positions with Halliburton Energy Services - (2002 - Present) and Texaco
Exploration (Multiple Assignments International and Domestic) - (1982-2000).
Peter has been an active member of The American Association of Petroleum
Geologists since 1982.
DR. CHANGLIN WU
Certified Petroleum Geologist with over 20 years experience in oil and gas
exploration and production. Changlin is the Chief Geologist / Exploration
Manager for Kerr-McGee (KMG) China and is the Deputy Chairman of KMG's Joint
Management Committee. He previously served as a senior geologist with the
International E&P division of Kerr-McGee Corporation in Houston. Before joining
Kerr-McGee, he was a petroleum engineer in the China National Petroleum Company
(CNPC) for eight years. He has also been a visiting scholar at the University of
London, UK, and a sequence stratigrapher at ARCO Exploration and Production
Technology.
Changlin received a B.Sc. degree in marine geology from the China Ocean
University, China in 1982 and a M.Sc. degree in sedimentology and stratigraphy
from Louisiana State University in 1994. Changlin is a PhD. candidate in
sedimentology and stratigraphy at the Department of Geology and Geophysics,
Louisiana State University. He completed the Executive Program for Management at
Rice University in 1997. Currently, he is Editor of the Editorial Board for The
Journal of Petroleum Science & Engineering Elsevier Science Publishers B. V.,
Amsterdam (since 1990) and is Chairman of The Chinese American Petroleum
Association and a Board Member of The Houston Chinese Cultural Center.
32
COMMITTEES
We do not have any audit, nominating, or compensation committees of the
Board, or committees performing similar functions. We intend plan to establish
such Board committees in early 2008.
FOUNDERS
Our founders are Jalal Alghani, James Jeffrey and Khalid Al-Sunaid.
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors did not meet during 2006.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
At such time as this registration statement is effective, our Officers,
Directors and 10% shareholders will file the appropriate forms.
CODE OF ETHICS
We do not have a Code of Ethics at this time. We plan to establish such a
Code in early 2008.
EXECUTIVE COMPENSATION
The following table sets forth certain information as to our highest paid
Officers and Directors for our fiscal year ended December 31, 2006 and 2005. No
other compensation was paid to any such Officers or Directors other than the
compensation set forth below.
[Enlarge/Download Table]
SUMMARY COMPENSATION TABLE
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 Total
$ $ $ $ $ $ $ $
James 2006 54,000 -0- 1,860 -0- -0- -0- -0- -0-
Jeffrey 2005 -0- -0- 7,000 -0- -0- -0- -0- -0-
Co-CEO
Jalal 2006 79,379 -0- -0- -0- -0- -0- -0- -0-
Alghani 2005 -0- -0- 27,140- -0- -0- -0- -0- -0-
Co-CEO
OUTSTANDING STOCK OPTIONS
We have not granted any options to purchase common stock and we do not have
any outstanding options to purchase common stock.
COMPENSATION OF DIRECTORS
No compensation plan is in effect at this time for Directors. The Board of
Directors acts as the compensation committee. All Directors take part in
determining compensation matters.
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EMPLOYEE STOCK OPTION PLANS
We believe that our future success will depend in part on our continuing
ability to attract and retain highly qualified personnel. We plan to pay wages
and
salaries that we believe are competitive. We also believe that equity ownership
is an important factor in our ability to attract and retain skilled personnel.
Our Board of Directors may adopt a Stock and Stock Option Compensation Plan in
the future.
NO EMPLOYMENT AGREEMENT
We have no employment agreements with any employee. However, our net loss
in 2006 includes imputed officers' salaries equal to $480,000 per year. These
salaries are recorded as a contribution to capital based upon our recognition
that a salary arrangement of equivalent amount will be negotiated when we obtain
funding in the future.
34
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS.
There are no securities authorized for issuance under equity compensation
plans
The following table sets forth certain information concerning the number of
shares of common stock owned beneficially as of July 13, 2007, by: (I) each
person (including any group) known by us to own more than five percent (5%) of
any class of our voting securities, (ii) each of our Directors and Executive
Officers, and (iii) and our Executive Officers and Directors as a group. Unless
otherwise indicated, the shareholders listed possess sole voting and investment
power with respect to the shares shown.
[Enlarge/Download Table]
Beneficially
Owned
Name Amount of Shares Percentage
of Common of Class of
Stock Beneficially Common
Owned Stock
---------------------------------------------------------------------------------------------------
Jalal Alghani 50%
2925 Briarpark Dr, Suite 930
Houston, Texas 77042
Common Stock 10,000,000
10,000 Shares of Series A Preferred Stock,
whose Common Stock ownership
---------
equivalent at this time is 10,000,000
1,000 Shares of Series B Preferred Stock,
whose Common Stock voting equivalent
------
at this time is 10,763,081
-----------
Total beneficial ownership 30,763,081
==========
Khalid Al-Sunaid 50%
2925 Briarpark Dr, Suite 930
Houston, Texas 77042
Common Stock 10,000,000
10,000 Shares of Series A Preferred Stock,
whose Common Stock ownership
---------
equivalent at this time is 10,000,000
1,000 Shares of Series B Preferred Stock,
whose Common Stock voting equivalent
------
at this time is 10,763,081
-----------
Total beneficial ownership 30,763,081
==========
35
James Jeffrey 50%
2925 Briarpark Dr, Suite 930
Houston, Texas 77042
Common Stock 10,000,000 (A)
10,000 Shares of Series A Preferred Stock,
whose Common Stock ownership
---------
equivalent at this time is 10,000,000
1,000 Shares of Series B Preferred Stock,
whose Common Stock voting equivalent
------
at this time is 10,763,081
-----------
Total beneficial ownership 30,763,081
==========
John Malone 21%
2925 Briarpark Dr, Suite 930
Houston, Texas 77042
Common Stock 500,000
1,000 Shares of Series B Preferred Stock,
whose Common Stock voting equivalent is 10,763,081
Joel Seidner
880 Tully Road #50
Houston, Texas 77079
Common Stock 500,000 1%
Dr. David Baldwin
2925 Briarpark Dr, Suite 930
Houston, Texas 77042
Common Stock 500,000 (B) 1%
Executive Officers and Directors
as a Group (6 Persons) 104,552,324 (C) 89%
--------------------------------
(A) Includes 10,000,000 shares owned indirectly through Jeffrey Family Trust
2006.
(B) Includes 300,000 shares that are not vested at this time.
(C) Includes 31,500,000 shares of common stock. Includes 30,000,000 shares
of common stock beneficially owned through 30,000 shares of Series A Preferred
Stock. Includes the voting power of 43,052,326 votes through 4,000 shares of
Series B Preferred Stock.
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VOTING TRUST
The holders of Series B Preferred Stock have entered into a voting trust
whereby all of the Series B Preferred Stock will be voted the same way based on
a poll of the holders for each matter requiring a vote. If an impasse is
reached for a matter, then the holders of the Series B Preferred Stock will
abstain from voting on that matter. The voting trust terminates on December 31,
2099 unless terminated earlier by unanimous vote of the holders of Series B
Preferred Stock. Mr. Jeffrey and Mr. Alghani act as co-trustees. Mr. Jeffrey's
address is: 2925 Briarpark Drive, Suite 930, Houston, TX 77042. Mr. Alghani's
address is P.O. Box 213487, Dubai, U.A.E.
We are not aware of any arrangements that could result in a change of
control.
ORGANIZATION WITHIN LAST FIVE YEARS
James Jeffrey was our founder in 1996 and has been our CEO and a principal
shareholder since then. We issued as founders stock 10 million shares of common
stock, 10,000 shares of Series A Preferred Stock and 2,000 shares of Series B
Preferred Stock to each of Mr. Jeffries, Mr. Alghani and Mr. Al-Sunaid. Mr.
Malone joined us in 2004 and we issued 500,000 shares of common stock and 2,000
shares of Series B Preferred Stock to him. Mr. Seidner joined us in 2004 and we
issued 500,000 shares of common stock to him. Dr. Baldwin joined us in 2006 and
we issued 500,000 shares of common stock to him of which 200,000 shares have
vested at this time.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We have a policy that our business affairs will be conducted in all
respects by standards applicable to publicly held corporations and that we will
not enter into any future transactions and/or loans between us and our Officers,
Directors and 5% shareholders unless the terms are: (a) no less favorable than
could be obtained from independent third parties, and (b) will be approved by a
majority of our independent and disinterested Directors. In our view, all of the
transactions described below meet this standard.
During 2006, Khalid Al-Sunaid, a Director, paid us $25,000 for a
preliminary risk analysis and assessment studies. Also during 2006, we paid Mr.
Khalid Al-Sunaid legal fees of $120,000.
37
DESCRIPTION OF SECURITIES
The authorized capital stock consists of 500,000,000 shares of common stock
and 5,000,000 shares of preferred stock. There is no public trading market for
any of our securities.
As of July 13, 2007, there are currently outstanding:
- 41,364,000 shares of common stock.
- 30,000 shares of Series A Preferred Stock which has the aggregate
common stock ownership equivalent and voting equivalent of an
aggregate amount of 30,000 000 shares of common stock at this time.
- 4,000 shares of Series B Preferred Stock which has the aggregate 51%
voting equivalent of 43,052,327 shares of common stock at this time.
COMMON STOCK
The holders of Common Stock are entitled to one vote per share on all
matters submitted to a vote of the shareholders, to receive dividends, if any,
declared by the board from time to time, out of legally available funds.
SERIES A PREFERRED STOCK
The Series A Preferred Stock contains an anti-dilution feature whereby the
class of Series A Preferred Stock may be converted into, in the aggregate, that
number of shares of common stock that is 30% of the then outstanding common
stock at the time of conversion. This feature expires on December 31, 2099 at
which time the aggregate number of shares that the Series A Preferred Stock may
be converted into will be fixed at that number of shares that the Series A
Preferred Stock could have been converted into on December 31, 2099. This
feature results in the continuous dilution of common stock holders until
December 31, 2099. Series A Preferred Stock votes pro rata to its conversion
ratio along with common stock on matters requiring a vote of common stock
holders. Each share of Series A Preferred Stock votes pro rata that number of
shares of common stock that represents 30% of the voting power of the class of
common stock on the record date. The minimum conversion ratio provides that
each share of Series A Preferred Stock may be converted into 1,000 shares of
common stock. Series A Preferred Stock has a stated value of $1,000.00 per
share and has the same dividend (as if fully converted) as that which may be
declared on common stock. The calculation of the conversion ratio and voting
power of the Series A Preferred Stock is done without regard to the effect of
the Series B Preferred Stock. Series A Preferred Stock votes along with our
common stock.
SERIES B PREFERRED STOCK
The Series B Preferred Stock contains a super voting feature whereby
the class of Series B Preferred Stock has a continuous 51% of the voting power
of the class of common stock and votes along with the common stock. This
feature expires on December 31, 2099 at which time the number of votes that
38
Series B Preferred Stock may vote will be fixed at that number of votes that the
Series B Preferred Stock could have voted on December 31, 2099. This feature
results in continuous super voting until December 31, 2099. Series B Preferred
Stock has a stated value of $100.00 per share and has a cumulative dividend of
1%. The calculation of the voting power of the Series B Preferred Stock is done
without regard to the effect of the Series A Preferred Stock. Series A Preferred
Stock votes along with our common stock.
The voting power of each of Series A and Series B Preferred Stock is calculated
without regard to each other, but rather is on based on actual number of shares
of common stock outstanding.
EXAMPLES OF CALCULATIONS OF PREFERRED STOCK FEATURES
Series A Preferred Stock Example.
As of July 13, 2007, we have 41,364,000 shares of common stock outstanding.
The class of Series A Preferred Stock is convertible into 30% of the then
outstanding common stock. However, at a minimum, each share of Series A
Preferred Stock is convertible into 1,000 shares of common stock, or an
aggregate minimum of 30 million shares of common stock. The class of Series
A Preferred Stock votes its common stock equivalent.
Calculation: 41,364,000 common shares outstanding X 30% = 12,409,200. In
this example, the minimum Series A Preferred Stock conversion amount of 30
million shares comes into effect.
The result is that if all Series A Preferred Stock was converted, then upon
such conversion we would issue 30 million shares of common stock. If there
were no conversion, the class of Series A Preferred Stock would have 30
million votes.
Series B Preferred Stock Example
As of July 13, 2007, we have 41,364,000 shares of common stock outstanding.
The class of Series B Preferred Stock has 51% of the voting power. Thus the
class of common stock has 49% of the voting power.
Calculation: 41,364,000 common shares outstanding divided by 49% =
84,416,327 total voting power votes, of which the class of Series B
Preferred Stock has 43,052,326 votes.
Combined Voting Effect of Preferred Stock Features:
As of July 13, 2007,
41,364,000 shares of common stock with 41,364,000 votes;
30,000,000 votes from the class of Series A Preferred Stock; and
43,052,326 votes from the class of Series B Preferred Stock.
Our total voting power is 114,416,326 votes for all classes of securities.
OTHER SHAREHOLDER MATTERS
Election of Directors requires a plurality of votes cast at a shareholder
meeting at which a quorum is present. Other general stockholder action requires
the affirmative vote of a majority of the voting power represented at a meeting
at which a quorum is present. Special shareholder matters, such as merger,
requires the Texas statutory two-thirds super majority vote at a meeting in
which a quorum is present.
We have 105 shareholders of record of common stock.
We have not paid any cash dividends on our common stock and we do not
expect to declare or pay any cash dividends on our common stock in the
foreseeable future. Payment of any cash dividends will depend upon our future
earnings, if any, our financial condition, and other factors as deemed relevant
by the Board of Directors.
39
THE PENNY STOCK RULES
Our securities may be considered a penny stock if it trades at a price of
less than $5.00 per share. Penny stocks are securities with a price of less than
$5.00 per share other than securities registered on national securities
exchanges or quoted on the Nasdaq stock market, provided that current price and
volume information with respect to transactions in such securities is provided
by the exchange or system. Our securities may be subject to "penny stock rules"
that impose additional sales practice requirements on broker-dealers who sell
penny stock securities to persons other than established customers and
accredited investors. For transactions covered by these rules, the broker-dealer
must make a special suitability determination for the purchase of penny stock
securities and have received the purchaser's written consent to the transaction
prior to the purchase. Additionally, for any transaction involving a penny
stock, unless exempt, the "penny stock rules" require the delivery, prior to the
transaction, of a disclosure schedule prescribed by the Commission relating to
the penny stock market. The broker-dealer also must disclose the commissions
payable to both the broker-dealer and the registered representative and current
quotations for the securities. Monthly statements must be sent disclosing recent
price information on the limited market in penny stocks. The "penny stock rules"
may restrict the ability of broker-dealers to sell our securities and may have
the effect of reducing the level of trading activity of our common stock in the
secondary market. The penny stock restrictions will not apply to our securities
when our market price is $5.00 or greater. The price of our securities may not
reach or maintain a $5.00 price level.
40
SELLING STOCKHOLDERS
The following table sets forth the name of each Selling Stockholder, the
number of shares of common stock offered by each Selling Stockholder, the number
of shares of common stock to be owned by each Selling Stockholder if all shares
were to be sold in this offering and the percentage of our common stock that
will be owned by each Selling Stockholder if all shares are sold in this the
offering. The shares of common stock being offered hereby are being registered
to permit public secondary trading and the Selling Stockholders may offer all,
none or a portion of the shares for resale from time to time.
[Enlarge/Download Table]
------------------------------------------------------------------------------------------
Name Shares Shares Shares Percentage
Of Owned Offered Owned Owned After
Selling Before For After Offering If
Stockholder Offering Sale Offering All
If All Shares Shares Are
Are Sold Sold
(1) (2) (2)
------------------------------------------------------------------------------------------
Fahad Sunaid Abdularhman Al Sunaid 1,000,000 1,000,000 0 0
Rashed Sunaid A. Al Sunaid 1,000,000 1,000,000 0 0
Fahad Abdullah M. Bunhayah 700,000 700,000 0 0
Jalal Alghani 10,000,000 300,000 9,700,000 23%
Jeffrey Family Trust 2006 10,000,000 300,000 9,700,000 23%
Khalid Al-Sunaid 10,000,000 300,000 9,700,000 23%
John C. Malone 500,000 300,000 200,000 0.05%
Joel Seidner 500,000 300,000 200,000 0.05%
Adm. James A. Lyons Jr.(Ret.) 100,000 100,000 0 0
Peter Wilkinson 10,000 10,000 0 0
David E. and Eleanore H. Baldwin 500,000 200,000 300,000 0.07%
Amer El-Kurdi 10,000 10,000 0 0
Sami Rashed Al-Sunaid 100,000 10,000 90,000 0.03%
Rashid H. Al-Shamsi 50,000 10,000 40000 0.01%
Troy W. Tucker 10,000 10,000 0 0
Ismael Alnoam 10,000 10,000 0 0
Gene Livingston 10,000 10,000 0 0
Dr. Raymond G. Bailey 10,000 10,000 0 0
Dr. Lixin Liu 10,000 10,000 0 0
Dr. Changlin Wu 10,000 10,000 0 0
Michael Sellman 10,000 10,000 0 0
--------------------------
(1) To the best of our knowledge, no Selling Stockholder has a short position
in our common stock. To the best of our knowledge, no Selling Stockholder that
is a beneficial owner of any of these shares is a broker-dealer or an affiliate
of a broker-dealer (a broker- dealer may be a record holder). The following
selling stockholders are affiliates: Jalal Alghani, Khalid Al-Sunaid, James
Jeffrey, John Malone, Dr. David Baldwin and Joel Seidner.
(2) Assumes no sales or purchases are transacted by the Selling Stockholder
during the offering period other than in this offering.
41
PLAN OF DISTRIBUTION
The Selling Stockholders (of record ownership and of beneficial ownership)
and any of their pledgees, assignees, and successors-in-interest may, from time
to time, sell any or all of their shares of common stock on any stock exchange,
market, or trading facility on which the shares are traded or in private
transactions. These sales may be at fixed or negotiated prices. There is no
assurance that the Selling Stockholders will sell any or all of the common stock
in this offering. The Selling Stockholders may use any one or more of the
following methods when selling shares:
- Ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers.
- Block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction.
- Purchases by a broker-dealer as principal and resale by the broker-dealer
for its own account.
- An exchange distribution following the rules of the applicable exchange.
- Privately negotiated transactions.
- Short sales or sales of shares not previously owned by the seller.
- An agreement between a broker-dealer and a Selling Stockholder to sell a
specified number of such shares at a stipulated price per share.
- A combination of any such methods of sale.
- Any other lawful method.
The Selling Stockholder may also engage in:
- Short selling against the box, which is making a short sale when the seller
already owns the shares.
- Buying puts, which is a contract whereby the person buying the contract may
sell shares at a specified price by a specified date.
- Selling calls, which is a contract giving the person buying the contract
the right to buy shares at a specified price by a specified date.
- Selling under Rule 144 under the Securities Act, if available, rather than
under this prospectus.
- Other transactions in our securities or in derivatives of our securities
and the subsequent sale or delivery of shares by the stock holder.
- Pledging shares to their brokers under the margin provisions of customer
agreements. If a Selling Stockholder defaults on a margin loan, the broker
may, from time to time, offer and sell the pledged shares.
Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
42
or discounts from the Selling Stockholder in amounts to be negotiated. If any
broker-dealer acts as agent for the purchaser of shares, the broker-dealer may
receive commission from the purchaser in amounts to be negotiated. We do not
expect these commissions and discounts to exceed what is customary in the types
of transactions involved.
We are required to pay all fees and expenses incident to the registration
of the shares in this offering. However, we will not pay any commissions or any
other fees in connection with the resale of the common stock in this offering.
If we are notified by a Selling Stockholder that they have a material
arrangement with a broker-dealer for the resale of the common stock, then we
would be required to amend the Registration Statement of which this prospectus
is a part, and file a prospectus supplement to describe the agreements between
the Selling Stockholder and the broker-dealer.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
In 2007 we engaged Comiskey & Company, P.C. of Denver, Colorado as our
first independent registered public accounting firm.
LEGAL PROCEEDINGS
We are not a plaintiff or defendant in any litigation, nor is any
litigation threatened against us.
INTEREST OF NAMED EXPERTS AND COUNSEL
Joel Seidner, Esq., Attorney At Law, 880 Tully Road #50, Houston, Texas
77079, voice: (281) 493-1311, fax: (281) 667-3292, is our Chief Legal Officer
("CLO"). Mr. Seidner has acted as our legal counsel for this offering. The
validity of the shares offered by this prospectus has been passed upon for
Powered Corporation by Mr. Seidner. As of the date of this prospectus, Mr.
Seidner owns 500,000 shares of our common stock.
Our consolidated balance sheets as of December 31, 2006, 2005 and the
consolidated statements of operations, stockholders' deficit, and cashflows, for
the years ended December 31, 2006, 2005 and 2004, and the period from August 14,
1996 (Inception) through December 31, 2006, are included in the registration
statement on Form S-1 of which this prospectus forms a part, in reliance on the
report of Comiskey & Company, P.C. of Denver, Colorado an independent registered
public accounting firm, given on the authority of that firm as experts in
auditing and accounting.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Texas law allows, and the articles of incorporation and bylaws provide for,
the indemnification of Officers and Directors. We will indemnify our Officers
and Directors. Our Articles of Incorporation and Bylaws provide, as permitted by
governing Texas law, that our Directors, Officers and employees are indemnified
to the fullest extent of Texas law. These provisions may discourage stockholders
from bringing suit against a Director for breach of fiduciary duty and may
reduce the likelihood of derivative litigation brought by stockholders on our
behalf against a Director.
The Texas Business Corporation Act provides that we may indemnify a person
who was, is, or is threatened to be made a named defendant or respondent in a
proceeding because the person is or was a Director. An Officer of the
corporation may be indemnified to the same extent. We may indemnify to an
Officer, employee, or agent of the corporation to the same extent that it may
indemnify and advance expenses to Directors.
We may indemnify persons who are not or were not Officers, employees, or
agents of the corporation but who are or were serving at the request of the
corporation as a Director, Officer, partner, venturer, proprietor, trustee,
employee, agent, or similar functionary of another foreign or domestic
corporation, employee benefit plan, other enterprise, or other entity to the
same extent that it may indemnify and advance expenses to Directors.
43
We may indemnify an Officer, employee, agent, or person who is not a
Director to such extent, consistent with law, as may be provided by its articles
of incorporation, bylaws, general or specific action of its board of Directors,
or contract or as permitted or required by common law.
We may purchase and maintain insurance or another arrangement on behalf of
any person who is or was a Director, Officer, employee, or agent of the
corporation or who is or was serving at the request of the corporation as a
Director, Officer, partner, venturer, proprietor, trustee, employee, agent, or
similar functionary.
44
Our Articles of Incorporation at Article VIII state that we may indemnify
Directors and Officers to the extent allowed by Texas law.
Our bylaws at Section ARTICLE VII ----- INDEMNIFICATION, STATE AS FOLLOWS:
Section 1. Limitation of Certain Liabilities of Directors. To the
--------------------------------------------------------------
fullest extent permitted by the laws of the State of Texas, a Director of the
Corporation shall not be liable to the Corporation or the stockholders for
monetary damages for breach of fiduciary duty as Director.
Section 2. Indemnification and Insurance. (a) Each person who was or is
----------------------------------------
made a party or is threatened to be made a party to or is involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), by reason of the fact that he or
she, or a person of whom he or she is the legal representative, is or was a
Director or Officer of the Corporation or is or was serving at the request of
the corporation as a Director, Officer, employee or agent of another corporation
or of a partnership, joint venture, trust or other enterprise, including service
with respect to employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity as a Director, Officer, employee or agent
or in any other capacity while serving as a Director, Officer, employee or
agent, shall be indemnified and held harmless by the Corporation to the fullest
extent authorized by the laws of the State of Texas, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than said law permitted the Corporation to provide prior to such
amendment), against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid
in settlement) reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to a person who has ceased
to be a Director, Officer, employee or agent and shall inure to the benefit of
his or her heirs, executors and administrators; provided, however, that, except
as provided in paragraph (b) hereof, the Corporation shall indemnify any such
person seeking indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the Board. The right to indemnification conferred in this Section
2 shall be a contract right and shall include the right to be paid by the
Corporation the expenses incurred in defending any such proceeding in advance of
its final disposition, provided, however, that if the laws of the State of Texas
require, the payment of such expenses incurred by a Director or Officer in his
or her capacity as a Director or Officer (and not in any other capacity in which
service was or is rendered by such person while a Director or Officer, including
without limitation service to an employee benefit plan) in advance of the final
disposition of a proceeding shall be made only upon delivery to the Corporation
of an undertaking, by or on behalf of such Director or Officer, to repay all
amounts so advanced if it shall ultimately be determined that such Director or
Officer is not entitled to be indemnified under this Section 2 or otherwise. The
Corporation may, by action of the Board, provide indemnification to employees
and agents of the Corporation with the same scope and effect as the foregoing
indemnification of Directors and Officers.
(b) If a claim under paragraph (a) of this Section 2 is not paid in full by
the Corporation within ninety days after a written claim has been received by
the Corporation, the claimant may at any time thereafter bring suit against the
corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Corporation) that the claimant has
not met the standards of conduct which make it permissible under the laws of the
State of Texas for the Corporation to indemnify the claimant for the amount
claimed, but the burden of proving such defense shall be on the Corporation.
Neither the failure of the Corporation (including the Board, independent legal
counsel, or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he or she has met the applicable standard of conduct
set forth in the laws of the State of Texas, nor an actual determination by the
Corporation (including the Board's independent legal counsel, or the
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct.
45
Section 3. Non-Exclusivity of Rights. The right to indemnification and the
-------------------------------------
payment of expenses conferred in this Article VIII shall not be deemed exclusive
of any other right to which any person seeking indemnification or payment of
expenses may be entitled under any statute, provision of the Certificate of
Incorporation, by-law, agreement, vote of stockholders or disinterested
Directors or otherwise, both as to action in such person's official capacity and
as to action in another capacity while holding such office, and shall continue
as to a person who has ceased to be a Director, Officer, employee or agent and
shall inure to the benefit of the heirs, executors and administrators of such a
person.
Section 4. Insurance. The Corporation may maintain insurance, at its
--------------------
expense, to protect itself and any Director, Officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the laws of the State of Texas.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to our Directors, Officers and controlling
persons pursuant to the forgoing provisions or otherwise, we have been advised
that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
46
FINANCIAL STATEMENTS
PAGE
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM F-2
Balance Sheets
December 31, 2006 and 2005 F-3
Statements of Operations
Years Ended December 31, 2006, 2005 and 2004, and F-4
August 14, 1996 (Date of Inception) to
December 31, 2006
Statements of Cash Flows
Years Ended December 31, 2006, 2005 and 2004, and F-5
August 14, 1996 (Date of Inception) to
December 31, 2006
Notes to Financial Statements F-6
Balance Sheets (Unaudited)
March 31, 2007 and December 31, 2006 FF-1
Statements of Operations (Unaudited) FF-2
Three months ended March 31, 2007 and 2006, and
August 14, 1996 (Date of Inception) to
March 31, 2007
Statements of Cash Flows (Unaudited) FF-3
Three months ended March 31, 2007 and 2006, and
August 14, 1996 (Date of Inception) to
March 31, 2007
Notes to Financial Statements FF-4
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Powered Corporation
(A Development Stage Company)
Houston, Texas
We have audited the accompanying balance sheets of Powered Corporation (A
Development Stage Company), as of December 31, 2006 and 2005, and the related
statements of operations, changes in stockholders' deficit and cash flows for
the years ended December 31, 2006, 2005 and 2004 and the period from August 14,
1996 (Inception) through December 31, 2006. These financial statements are the
responsibility of 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 misstatements. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Company as of December 31,
2006 and 2005, and the results of its operations and its cash flows for the
periods described in conformity with accounting principles generally accepted in
the United States of America.
/s/ Comiskey & Company
Professional Corporation
Denver, Colorado
July 11, 2007
F-2
[Download Table]
Powered Corporation
(A Development Stage Company)
Balance Sheets
December 31, 2006 and 2005
2006 2005
---------- ----------
ASSETS
Current assets:
Cash in bank $ 53,434 $ -
Cash held by officer 7,107 -
----------- -----------
Total current assets 60,541 -
Deposits 6,361 5,000
----------- -----------
Total assets $ 66,902 $ 5,000
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accrued liabilities $ 20,000 $ -
Stockholders' equity
Common stock; $.001 par value; 500,000,000
Shares authorized; 70,964,000 shares
issued and outstanding 70,964 66,338
Paid in capital 7,851,110 1,788,199
Subscription receivable (4,600,000) -
Deficit accumulated during the development stage (3,275,172) (1,849,537)
----------- -----------
Total stockholders' equity 46,902 5,000
----------- -----------
Total liabilities and stockholders' equity $ 66,902 $ 5,000
=========== ===========
See accompanying summary of accounting policies
and notes to financial statements.
F-3
[Enlarge/Download Table]
Powered Corporation
(A Development Stage Company)
Statements of Operations
August 14,
1996 (Date
Years Ended December 31, of Inception)
---------------------------------------------- to December
2006 2005 2004 31, 2006
--------------- -------------- -------------- --------------
Revenue:
Consulting fees paid to
related party $ 25,000 $ - $ - $ 25,000
Operating Expenses:
General and administrative 1,449,930 634,765 1,111,562 3,299,467
--------------- -------------- -------------- --------------
Net loss from operations (1,424,930) (634,765) (1,111,562) (3,274,467)
Other income (expense):
Dividend income 305 - - 305
Currency exchange (1,010) - - (1,010)
--------------- -------------- -------------- --------------
Total other income (705) - - (705)
--------------- -------------- -------------- --------------
Net loss $ (1,425,635) $ (634,765) $ (1,111,562) $ (3,275,172)
=============== ============== ============== ==============
Basic and diluted
net loss per share $ (0.02) $ (0.01) $ (0.02)
Weighted average number of
common shares 67,800,904 64,436,582 62,166,424
See accompanying summary of accounting policies
and notes to financial statements.
F-4
[Download Table]
Powered Corporation
(A Development Stage Company)
Statement of Changes in Stockholders' Deficit
For the Period August 14, 1996 (Date of Inception) to December 31, 2006
Deficit
Accumulated
Common Stock During
------------------- Paid in Subscription Development
Shares Amount Capital Receivable Stage
---------- ------- ----------- -------------- -------------
Shares issued to
founders for
services 10,321,000 $10,321 $ 92,889 $ - $ -
Net loss (103,210)
---------- ------- ----------- -------------- -------------
Balances,
December 31, 2003 10,321,000 10,321 92,889 - (103,210)
Shares issued for
services 52,603,000 52,603 473,427 - -
Expenses paid by
shareholders - - 110,532 - -
Imputed officer - - 480,000 - -
salaries
Net loss (1,111,562)
---------- ------- ----------- -------------- -------------
Balances,
December 31, 2004 62,924,000 62,924 1,156,848 - (1,214,772)
Shares issued for
services 3,414,000 3,414 30,726 - -
Expenses paid by
shareholders - - 120,625 - -
Imputed officer
salaries - - 480,000 - -
Net loss (634,765)
---------- ------- ----------- -------------- -------------
Balances,
December 31, 2005 66,338,000 66,338 1,788,199 - (1,849,537)
Shares issued for
cash 4,000,000 4,000 4,996,000 (4,600,000) -
services 626,000 626 441,234 - -
Fundraising costs - - (20,000) - -
Expenses paid by
shareholders - - 165,677 - -
Imputed officer
salaries - - 480,000 - -
Net loss (1,425,635)
---------- ------- ----------- -------------- -------------
Balances,
December 31, 2006 70,964,000 $70,964 $7,851,110 $ (4,600,000) $ (3,275,172)
========== ======= =========== ============== =============
See accompanying summary of accounting policies
and notes to financial statements.
F-5
[Enlarge/Download Table]
Powered Corporation
(A Development Stage Company)
Statements of Cash Flows
August 14,
1996 (Date
Years Ended December 31, of Inception)
-------------------------------------------- to December
2006 2005 2004 31, 2006
--------------- -------------- ------------- --------------
OPERATING ACTIVITIES
Net loss $ (1,425,635) $ (634,765) $ (1,111,562) $ (3,275,172)
Adjustments to reconcile net
loss to net cash used by
operating activities:
Shares issued for services 441,860 34,140 526,030 1,105,240
Imputed officer salaries 480,000 480,000 480,000 1 1,440,000
Increase in accounts payable 20,000 20,000
--------------- -------------- ------------- --------------
Net cash used in
operating activities (483,775) (120,625) (105,532) (709,932)
--------------- -------------- ------------- --------------
INVESTING ACTIVITIES
Increase in deposits (1,361) - (5,000) (6,361)
--------------- -------------- ------------- --------------
FINANCING ACTIVITIES
Proceeds from issuance of
common stock 400,000 - - 400,000
Less: costs of fundraising (20,000) (20,000)
Less: cash held by officer (7,107) - - (7,107)
Expenses paid by shareholders 165,677 120,625 110,532 396,834
--------------- -------------- ------------- --------------
Net cash provided by
financing activities 538,570 120,625 110,532 769,727
--------------- -------------- ------------- --------------
NET INCREASE (DECREASE) IN CASH 53,434 - - 53,434
CASH AT BEGINNING OF PERIOD - - - -
--------------- -------------- ------------- --------------
CASH AT END OF PERIOD $ 53,434 $ - - $ 53,434
=============== ============== ============= ==============
Supplementary disclosures
Interest paid in cash $ - $ - $ - $ -
Income taxes paid in cash - - - -
Non-cash investing and
financing disclosures - - - -
See accompanying summary of accounting policies
and notes to financial statements.
F-6
Powered Corporation
(A Development Stage Company)
Notes to Financial Statements
NOTE 1 - NATURE OF OPERATIONS AND ACCOUNTING POLICIES
Powered Corporation, a Texas corporation, was formed August 14, 1996, and has
been in the development stage since inception. Powered was formed to design,
build and operate nuclear power plants and related infrastructure facilities in
various countries.
Use of Estimates
----------------
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date of
the financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Basic and Diluted Net Loss per Share
------------------------------------
Basic and diluted net loss per share calculations are presented in accordance
with Financial Accounting Standards Statement 128, and are calculated on the
basis of the weighted average number of common shares outstanding during the
year. They include the dilutive effect of common stock equivalents in years with
net income. Basic and diluted loss per share are the same due to the absence of
common stock equivalents.
Cash and Cash Equivalents
-------------------------
For purposes of the statements of cash flows, cash equivalents include all
highly liquid investments with original maturities of three months or less.
Cash held by Officer
--------------------
This cash is held in a personal account by an officer and principal shareholder
because Powered was waiting for the issuance of a business license in Dubai,
which was subsequently issued on July 5, 2007.
Income Taxes
------------
Income tax expense is based on reported earnings before income taxes. Deferred
income taxes reflect the impact of temporary differences between assets and
liabilities recognized for financial reporting purposes and such amounts
recognized for tax purposes, and are measured by applying enacted tax rates in
effect in years in which the differences are expected to reverse.
Recently Issued Accounting Pronouncements
-----------------------------------------
Powered Corporation does not expect the adoption of any recently issued
accounting pronouncements to have a significant impact on its financial
position, results of operations or cash flows.
F-7
NOTE 2 - COMMON STOCK
From inception (August 14, 1996) through December 31, 2004:
- Powered issued 62,924,000 shares of common stock for services. These
shares were valued and recorded at their fair value of $629,240.
- Shareholders contributed services valued at $480,000 and paid
corporate expenses out of pocket for $110,532.
During the year ended December 31, 2005:
- Powered issued 3,414,000 shares of common stock for services. These
shares were recorded at their fair value of $34,140.
- Shareholders contributed services valued at $480,000 and paid
corporate expenses out of pocket for $120,625.
During the year ended December 31, 2006:
- Powered sold 4,000,000 shares of common stock for $5,000,000. As of
December 31, 2006, Powered has received $400,000 in cash. During 2007
through June 15, 2007, Powered received another $2,650,000.
- Powered issued 626,000 shares of common stock for services. These
shares were recorded at their fair value of $441,860.
- Shareholders contributed services valued at $480,000 and paid
corporate expenses out of pocket for $165,677.
NOTE 3 - INCOME TAXES
Powered Corporation uses the liability method, where deferred tax assets and
liabilities are determined based on the expected future tax consequences of
temporary differences between the carrying amounts of assets and liabilities for
financial and income tax reporting purposes. During fiscal 2006, Powered
Corporation incurred net losses and, therefore, has no tax liability. The net
deferred tax asset generated by the loss carry-forward has been fully reserved.
The cumulative net operating loss carry-forward is approximately $700,000 at
December 31, 2006, and will expire in the years 2024 - 2026.
At December 31, 2006, deferred tax assets consisted of the following:
Deferred tax assets
Net operating losses $ 242,000
Less: valuation allowance (242,000)
----------
Net deferred tax asset $ -
==========
F-8
NOTE 4 - COMMITMENTS
Powered Corporation leases its Yemen and Dubai offices with leases expiring
December 31, 2008 and February 19, 2010, respectively. In addition, a villa is
leased in Dubai on a month-to-month basis for $4,098 per month. Total rent
expense for 2006, 2005, and 2004 was $77,214, $64,800 and $43,200, respectively.
Future rent obligations are as follows
2007 $ 244,899
2008 195,719
2009 165,719
2010 -0-
---------
$ 606,337
=========
The Dubai office is being moved to Saba Tower, and total leasehold improvements
will cost $151,500. $60,598 (40%) was paid in February 2007 and the balance
will be due in Summer 2007.
In September 2006, Powered agreed to pay a commission of 5% of all stock sales
proceeds to Energy Advisors, LLC, a Dubai corporation.
NOTE 5 - RELATED PARTY TRANSACTIONS
During 2006, Powered received $25,000 in consulting revenue & paid $120,000 in
legal fees to a founding shareholder and director, Khalid Al-Sunaid.
NOTE 6 - SUBSEQUENT EVENTS
During the three months ended March 31, 2007:
- Powered issued 4,000 shares of preferred stock Series B to its 3 directors and
CFO for services. These shares were recorded at their fair value of $400,000.
- Powered cancelled 30,000,000 shares of common stock and issued 30,000 shares
of preferred stock Series A to its 3 principal shareholders for services at
their fair value of $30,000,000.
- During 2007 through June 15, 2007, Powered received $2,650,000 in cash from
the subscriptions receivable. This cash is held in a personal account by one of
the principal shareholders because Powered was waiting for the issuance of a
business license in Dubai.
F-9
[Download Table]
Powered Corporation
(A Development Stage Company)
Balance Sheets
March 31, 2007 and December 31, 2006
(Unaudited)
2007 2006
------------ ------------
ASSETS
Current assets:
Cash in bank $ 33,404 $ 53,434
Cash held by officer 1,487,390 7,107
Prepaid rent 212,211 -
------------ ------------
Total current assets 1,733,005 60,541
------------ ------------
Vehicles and leasehold improvements, net of
accumulated depreciation of $5,103 282,041 -
Security deposits 6,361 6,361
------------ ------------
Total assets $ 2,021,407 $ 66,902
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 21,000 $ 20,000
------------ ------------
Commitments - -
Stockholders' equity:
Common stock; $.001 par value; 500,000,000
shares authorized; 40,964,000 shares
issued and outstanding 40,964 70,964
Preferred stock; $.001 par value; 5,000,000
shares authorized
Series A; 30,000 issued and outstanding 30 -
Series B; 4,000 issued and outstanding 4 -
Paid in capital 38,148,576 7,851,110
Subscription receivable (1,950,000) (4,600,000)
Deficit accumulated during the development stage (34,239,167) (3,275,172)
------------ ------------
Total stockholders' equity 2,000,407 46,902
------------ ------------
Total liabilities and stockholders' equity $ 2,021,407 $ 66,902
============ ============
FF-1
[Enlarge/Download Table]
Powered Corporation
(A Development Stage Company)
Statements of Operations
(Unaudited)
August 14, 1996
Three months ended (Date of
March 31, Inception)to
----------------------------- March 31,
2007 2006 2007
-------------- ------------- ----------------
Revenue:
Consulting fees to related party $ - $ - $ 25,000
-------------- ------------- ----------------
Operating costs and expenses:
General and administrative 30,958,813 172,358 34,258,280
Depreciation 5,103 - 5,103
-------------- ------------- ----------------
Total operating costs and expenses 30,963,916 172,358 34,263,383
-------------- ------------- ----------------
Loss from operations (30,963,916) (172,358) (34,238,383)
Other income (expense):
Dividend income 24 - 329
Currency exchange (103) - (1,113)
-------------- ------------- ----------------
Total other expense (79) - (784)
-------------- ------------- ----------------
Net loss $ (30,963,995) $ (172,358) $ (34,239,167)
============== ============= ================
Net loss per share $ (0.76) $ (0.00)
============== =============
Weighted average number of
common shares 40,964,000 66,358,267
============== =============
FF-2
[Enlarge/Download Table]
Powered Corporation
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
August 14,
1996
Three months ended (Date of
March 31, Inception)to
---------------------------- March 31,
2007 2006 2007
-------------- ------------ -------------
OPERATING ACTIVITIES
Net loss $ (30,963,995) $ (172,358) $(34,239,167)
Adjustments to reconcile net loss to net
cash used by operating activities:
Depreciation 5,103 - 5,103
Imputed officer salaries - 120,000 1,440,000
Shares issued for services
Common shares - 1,860 1,105,240
Preferred A shares 30,000,000 - 30,000,000
Preferred B shares 400,000 - 400,000
Change in:
Prepaid rent (212,211) - (212,211)
Accounts payable 21,000 - 21,000
-------------- ------------ -------------
Net cash used in operating activities (750,103) (50,498) (1,480,035)
-------------- ------------ -------------
INVESTING ACTIVITIES
Purchase of vehicles and leasehold
improvements (287,144) - (287,144)
Deposits - (1,361) (6,361)
-------------- ------------ -------------
Net cash used in investing activities (287,144) (1,361) (293,505)
-------------- ------------ -------------
FINANCING ACTIVITIES
Proceeds from issuance of common stock 2,650,000 - 3,050,000
Less: costs of fundraising (152,500) - (152,500)
Expenses paid by shareholders - 51,859 91,834
Less: cash held by officer (1,480,283) - (1,487,390)
-------------- ------------ -------------
Net cash provided by financing activities 1,017,217 51,859 1,806,944
-------------- ------------ -------------
NET INCREASE (DECREASE) IN CASH (20,030) - 33,404
CASH AT BEGINNING OF PERIOD 53,434 - -
-------------- ------------ -------------
CASH AT END OF PERIOD $ 33,404 $ - $ 33,404
============== ============ =============
FF-3
Powered Corporation
(A Development Stage Company)
Notes to Financial Statements
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of Powered Corporation
have been prepared in accordance with accounting principles generally accepted
in the United States of America and the rules of the Securities and Exchange
Commission, and should be read in conjunction with the audited financial
statements and notes thereto contained elsewhere in this Form S-1. In the
opinion of management, all adjustments, consisting of normal recurring
adjustments, necessary for a fair presentation of financial position and the
results of operations for the interim periods presented have been reflected
herein. The results of operations for interim periods are not necessarily
indicative of the results to be expected for the full year. Notes to the
financial statements which would substantially duplicate the disclosure
contained in the audited financial statements for fiscal 2006 as reported
elsewhere herein have been omitted.
NOTE 2 - COMMON STOCK
During the three months ended March 31, 2007:
- Powered issued 4,000 shares of preferred stock Series B to its 3 directors and
CFO for services. These shares were recorded at their fair value of $400,000.
- Powered cancelled 30,000,000 shares of common stock and issued 30,000 shares
of preferred stock Series A to its 3 principal shareholders for services at
their fair value of $30,000,000.
- During 2007 through June 15, 2007, Powered received $2,650,000 in cash from
the subscriptions receivable. This cash is held in a personal account by one of
the principal shareholders because Powered was waiting on the issuance of a
business license in Dubai.
FF-4
FORM S-1
PART II--INFORMATION NOT REQUIRED IN PROSPECTUS
47
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Texas law allows, and the articles of incorporation and bylaws provide for,
the indemnification of Officers and Directors. We will indemnify our Officers
and Directors. Our Articles of Incorporation and Bylaws provide, as permitted by
governing Texas law, that our Directors, Officers and employees are indemnified
to the fullest extent of Texas law. These provisions may discourage stockholders
from bringing suit against a Director for breach of fiduciary duty and may
reduce the likelihood of derivative litigation brought by stockholders on our
behalf against a Director.
The Texas Business Corporation Act provides that we may indemnify a person
who was, is, or is threatened to be made a named defendant or respondent in a
proceeding because the person is or was a Director. An Officer of the
corporation may be indemnified to the same extent. We may indemnify an Officer,
employee, or agent of the corporation to the same extent that it may indemnify
and advance expenses to Directors.
We may indemnify persons who are not or were not Officers, employees, or
agents of the corporation but who are or were serving at the request of the
corporation as a Director, Officer, partner, venturer, proprietor, trustee,
employee, agent, or similar functionary of another foreign or domestic
corporation, employee benefit plan, other enterprise, or other entity to the
same extent that it may indemnify and advance expenses to Directors.
We may indemnify an Officer, employee, agent, or person who is not a
Director to such extent, consistent with law, as may be provided by its articles
of incorporation, bylaws, general or specific action of its board of Directors,
or contract or as permitted or required by common law.
We may purchase and maintain insurance or another arrangement on behalf of
any person who is or was a Director, Officer, employee, or agent of the
corporation or who is or was serving at the request of the corporation as a
Director, Officer, partner, venturer, proprietor, trustee, employee, agent, or
similar functionary.
Our Articles of Incorporation at Article VIII state that we may indemnify
Directors and Officers to the extent allowed by Texas law.
Our bylaws at Section ARTICLE VII ----- INDEMNIFICATION, STATE AS FOLLOWS:
Section 1. Limitation of Certain Liabilities of Directors. To the
--------------------------------------------------------------
fullest extent permitted by the laws of the State of Texas, a Director of the
Corporation shall not be liable to the Corporation or the stockholders for
monetary damages for breach of fiduciary duty as Director.
Section 2. Indemnification and Insurance. (a) Each person who was or is
----------------------------------------
made a party or is threatened to be
47
made a party to or is involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she, or a person of whom he or she is the legal
representative, is or was a Director or Officer of the Corporation or is or was
serving at the request of the corporation as a Director, Officer, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official capacity as a
Director, Officer, employee or agent or in any other capacity while serving as a
Director, Officer, employee or agent, shall be indemnified and held harmless by
the Corporation to the fullest extent authorized by the laws of the State of
Texas, as the same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits the Corporation
to provide broader indemnification rights than said law permitted the
Corporation to provide prior to such amendment), against all expense, liability
and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid or to be paid in settlement) reasonably incurred or
suffered by such person in connection therewith and such indemnification shall
continue as to a person who has ceased to be a Director, Officer, employee or
agent and shall inure to the benefit of his or her heirs, executors and
administrators; provided, however, that, except as provided in paragraph (b)
hereof, the Corporation shall indemnify any such person seeking indemnification
in connection with a proceeding (or part thereof) initiated by such person only
if such proceeding (or part thereof) was authorized by the Board. The right to
indemnification conferred in this Section 2 shall be a contract right and shall
include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition, provided,
however, that if the laws of the State of Texas require, the payment of such
expenses incurred by a Director or Officer in his or her capacity as a Director
or Officer (and not in any other capacity in which service was or is rendered by
such person while a Director or Officer, including without limitation service to
an employee benefit plan) in advance of the final disposition of a proceeding
shall be made only upon delivery to the Corporation of an undertaking, by or on
behalf of such Director or Officer, to repay all amounts so advanced if it shall
ultimately be determined that such Director or Officer is not entitled to be
indemnified under this Section 2 or otherwise. The Corporation may, by action of
the Board, provide indemnification to employees and agents of the Corporation
with the same scope and effect as the foregoing indemnification of Directors and
Officers.
(b) If a claim under paragraph (a) of this Section 2 is not paid in full by
the Corporation within ninety days after a written claim has been received by
the Corporation, the claimant may at any time thereafter bring suit against the
corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Corporation) that the claimant has
not met the standards of conduct which make it permissible under the laws of the
State of Texas for the Corporation to indemnify the claimant for the amount
claimed, but the burden of proving such defense shall be on the Corporation.
Neither the failure of the Corporation (including the Board, independent legal
counsel, or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he or she has met the applicable standard of conduct
set forth in the laws of the State of Texas, nor an actual determination by the
Corporation (including the Board's independent legal counsel, or the
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct.
Section 3. Non-Exclusivity of Rights. The right to indemnification and the
-------------------------------------
payment of expenses conferred in this Article VIII shall not be deemed exclusive
of any other right to which any person seeking indemnification or payment of
expenses may be entitled under any statute, provision of the Certificate of
Incorporation, by-law, agreement, vote of stockholders or disinterested
Directors or otherwise, both as to action in such person's official capacity and
as to action in another capacity while holding such office, and shall continue
as to a person who has ceased to be a Director, Officer, employee or agent and
shall inure to the benefit of the heirs, executors and administrators of such a
person.
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Section 4. Insurance. The Corporation may maintain insurance, at its
--------------------
expense, to protect itself and any Director, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the laws of the State of Texas.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to our Directors, Officers and controlling
persons pursuant to the forgoing provisions or otherwise, we have been advised
that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
49
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The amounts set forth are all estimates:
[Download Table]
Amount Paid or
be Paid
SEC registration fee $ 1,430.00
Printing and engraving expenses 4,000.00
Attorneys' fees and expenses 25,000.00
Accountants' fees and expenses 10,000.00
Transfer agent's and registrar's fees and expenses 3,000.00
Edgar service provider fee 3,000.00
CUSIP fee 134.00
Miscellaneous 1,000.00
---------------
Total $ 47,564.00 (*)
===============
---------------
(*)
The amounts set forth are all estimates.
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ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
During the period from inception (August 14, 1996) through ended July 13,
2007, we issued unregistered securities.
From inception (August 14, 1996) through December 31, 2004, we issued an
aggregate of 62,924,000 shares of common stock to our founders and to third
party vendors for services rendered. These shares were valued and recorded at
their fair value of $629,240. Shareholders contributed services valued at
$480,000 and paid corporate expenses out of pocket for $110,532. We issued these
securities in reliance on Section 4(2) of the Securities Act. These transactions
did not involve a public offering. The investors were knowledgeable about our
operations and financial condition. The investors had knowledge and experience
in financial and business matters that allowed them to evaluate the merits and
risk of receipt of these securities. Each stock certificate contained a legend
stating that the securities were not registered under the Securities Act and
setting forth the restrictions on the transferability and the sale of the
securities. No underwriter participated in, nor did we pay any commissions or
fees to any underwriter in connection with any of these transactions.
In 2005, we issued 3,414,000 shares of common stock to our founders and to
third party vendors for services rendered. These shares were recorded at their
fair value of $34,140. Shareholders contributed services valued at $480,000 and
paid corporate expenses out of pocket for $120,625. We issued these securities
in reliance on Section 4(2) of the Securities Act. These transactions did not
involve a public offering. The investors were knowledgeable about our
operations and financial condition. The investors had knowledge and experience
in financial and business matters that allowed them to evaluate the merits and
risk of receipt of these securities. Each stock certificate contained a legend
stating that the securities were not registered under the Securities Act and
setting forth the restrictions on the transferability and the sale of the
securities. No underwriter participated in, nor did we pay any commissions or
fees to any underwriter in connection with any of these transactions.
In 2006, we issued 626,000 shares of common stock to our founders and to
third party vendors for services rendered. These shares were recorded at their
fair value of $441,860. Shareholders contributed services valued at $480,000 and
paid corporate expenses out of pocket for $165,677. We issued these securities
in reliance on Section 4(2) of the Securities Act. These transactions did not
involve a public offering. The investors were knowledgeable about our operations
and financial condition. The investors had knowledge and experience in financial
and business matters that allowed them to evaluate the merits and risk of
receipt of these securities. Each stock certificate contained a legend stating
that the securities were not registered under the Securities Act and setting
forth the restrictions on the transferability and the sale of the securities. No
underwriter participated in, nor did we pay any commissions or fees to any
underwriter in connection with any of these transactions.
In 2006, three investors subscribed for an aggregate of 4,000,000 shares of
common stock for $1.00 per share, for which we have received $2,700,000 in cash
as of July 1, 2007. 1,300,000 shares have not been paid for at this time and
remain unissued. We issued these securities in reliance on Section 4(2) of the
Securities Act. These transactions did not involve a public offering. The
investors were knowledgeable about our operations and financial condition. The
investors had knowledge and experience in financial and business matters that
allowed them to evaluate the merits and risk of receipt of these securities.
Each stock certificate contained a legend stating that the securities were not
registered under the Securities Act and setting forth the restrictions on the
transferability and the sale of the securities. No underwriter participated in,
nor did we pay any commissions or fees to any underwriter in connection with any
of these transactions.
In 2007, we issued 10,000 shares of Series A Preferred Stock each to our
founders, Jalal Alghani, James Jeffrey and Khalid Al-Sunaid.
51
In exchange, they each retuned to us for cancellation 10,000,000 shares of
common stock. At the same time we issued as replacement shares to each of them
10,000,000 shares of common stock. We issued these securities in reliance on
Section 4(2) of the Securities Act. These transactions did not involve a public
offering. The investors were knowledgeable about our operations and financial
condition. The investors had knowledge and experience in financial and business
matters that allowed them to evaluate the merits and risk of receipt of these
securities. Each stock certificate contained a legend stating that the
securities were not registered under the Securities Act and setting forth the
restrictions on the transferability and the sale of the securities. No
underwriter participated in, nor did we pay any commissions or fees to any
underwriter in connection with any of these transactions.
In 2007, we issued 2,000 shares of Series B Preferred Stock each to our
Directors, Jalal Alghani, James Jeffrey, John Malone and Khalid Al-Sunaid.
These shares were recorded at their fair value of $400,000. We issued these
securities in reliance on Section 4(2) of the Securities Act. These transactions
did not involve a public offering. The investors were knowledgeable about our
operations and financial condition. The investors had knowledge and experience
in financial and business matters that allowed them to evaluate the merits and
risk of receipt of these securities. Each stock certificate contained a legend
stating that the securities were not registered under the Securities Act and
setting forth the restrictions on the transferability and the sale of the
securities. No underwriter participated in, nor did we pay any commissions or
fees to any underwriter in connection with any of these transactions.
52
ITEM 27. EXHIBITS
Exhibit
Number Description
3.1.1 Articles of Incorporation----Provided herewith.
3.1.2 Amendment to Articles of Incorporation----Provided herewith.
3.1.3 Designation Certificate of Series A Convertible Preferred
Stock----Provided herewith.
3.1.4 Designation Certificate of Series B Convertible Preferred
Stock----Provided herewith.
3.2.1 By-laws----Provided herewith.
4.1 Specimen Stock Certificate----Provided herewith.
5.1 Opinion re: legality----Provided herewith.
9.1 Voting Trust--- Provided herewith.
10.1 Contract with Khalid Al-Sunaid----Provided herewith.
23.1 Consent of Independent Auditors----Provided herewith.
23.2 Consent of Counsel----(see Exhibit 5.1)
ITEM 28. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to Directors, Officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
Director, Officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such Director, Officer
or controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
53
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.
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:
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 field
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
54
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 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
55
iv. Any other communication that is an offer in the offering
made by the undersigned registrant to the purchaser.
The undersigned registrant hereby undertakes to provide to the
underwriter at the closing specified in the underwriting agreements
certificates in such denominations and registered in such names as
required by the underwriter to permit prompt delivery to each
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
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a Director, Officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such Director, Officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
The undersigned registrant hereby undertakes that:
For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon
Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form
of prospectus 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.
56
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, Texas on July 13, 2007.
Powered Corporation
July 13, 2007. /s/ James Jeffrey
James Jeffrey
Director, Co-Chairman,
CEO - North & South America, Asia
and President.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/James Jeffrey Director, Co-Chairman, July 13, 2007
James Jeffrey CEO - North & South America, Asia
and President
/s/ John Malone CFO, Principal Accounting July 13, 2007
John Malone Officer and Director
/s/ Jalal Alghani Director, Co-Chairman, July 13, 2007
Jalal Alghani CEO - Middle east and Africa
and COO
/s/ Khalid Al-Sunaid Director July 13, 2007
Khalid Al-Sunaid
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Dates Referenced Herein and Documents Incorporated by Reference
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