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10/16/06 Element 21 Golf Co 10KSB/A 6/30/06 3:104 Vintage Filings LLC/FA
Amendment to Annual Report -- Small Business · Form 10-KSB
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10KSB/A · Amendment to Annual Report -- Small Business
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UNITED
STATES
Securities
and Exchange Commission
Washington,
D.C. 20549
FORM
10-KSB-A
AMENDMENT
NO. 1
x
ANNUAL
REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
o
TRANSITION
REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the
transition period from _________________ to __________________
Element
21 Golf Company
(Name
of
Small Business Issuer in its Charter)
|
|
|
88-0218411
|
|
(State
or Other Jurisdiction of incorporation or organization)
|
|
(I.R.S.
Employer I.D. No.)
|
200
Queens Quay East, Unit #1, Toronto, Ontario, Canada, M5A
4K9
(Address
of Principal Executive Offices)
Registrant’s
Telephone Number: 416-362-2121
Not
Applicable
(Former
name and former address, if changed since last Report)
Securities
Registered under Section 12(b) of the Exchange Act: None.
Securities
Registered under Section 12(g) of the Exchange Act: Common Stock, one-cent
($0.01) Par Value
Check
whether the issuer is not required to give reports pursuant to Section 13 or
15(d) of the Exchange Act. o
Check
whether the Issuer (1) filed all reports required to be filed by Section 13
or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the Registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
Check
if
disclosure of delinquent filers in response to Item 405 of Regulation S-B is
not
contained in this form, and no disclosure will be contained, to the best of
Registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10- KSB or any amendment
to
this Form 10-KSB. o
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes o No x
Issuer’s
revenues for its most recent fiscal year: June 30, 2006 = $51,569
As
of
October 12, 2006 there were approximately 91,874,457 shares of our common voting
stock held by non-affiliates having a market value of approximately $17,088,649
on such date. Without asserting that any director or executive officer of the
issuer, or the beneficial owner of more than five percent of the issuer’s common
stock, is an affiliate, the shares of which they are the beneficial owners
have
been deemed to be owned by affiliates solely for this calculation.
As
of
October 12, 2006, there were 99,630,554 shares of common stock of the Issuer
outstanding.
EXPLANATORY
NOTE: THIS 10-KSB-A (AMENDMENT NO. 1) TO ELEMENT 21 GOLF COMPANY’S FORM 10-KSB
IS BEING FILED IN ORDER TO REPLACE THE FORM 10-KSB FILED ON OCTOBER 13, 2006
IN
ITS ENTIRETY AS SUCH FORM WAS FILED INADVERTENTLY PRIOR TO ITS COMPLETION.
ONLY
THE INFORMATION SET FORTH IN THIS AMENDMENT NO.1 TO FORM 10-KSB SHOULD BE RELIED
UPON AS THE INFORMATION CONTAINED IN THE COMPANY’S ORIGINALLY FILED FORM 10-KSB
WAS INCOMPLETE.
Element
21 Golf Company
Table
of Contents
|
PART
I
|
|
1
|
|
ITEM
1.
|
DESCRIPTION
OF BUSINESS
|
1
|
|
ITEM
4.
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
|
17
|
| |
|
|
|
PART
II
|
|
18
|
|
ITEM
5.
|
MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
|
18
|
|
ITEM
6.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
|
21
|
|
ITEM
7.
|
FINANCIAL
STATEMENTS
|
27
|
|
ITEM
8.
|
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
|
27
|
|
ITEM
8A
|
CONTROLS
AND PROCEDURES
|
27
|
|
ITEM
8B
|
OTHER
INFORMATION
|
28
|
| |
|
|
|
PART
III
|
|
28
|
|
ITEM
9.
|
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
SECTION
16(a) OF THE EXCHANGE ACT
|
28
|
|
ITEM
10.
|
EXECUTIVE
COMPENSATION
|
30
|
|
ITEM
11.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
32
|
|
ITEM
12.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
|
35
|
|
ITEM
14.
|
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
|
37
|
| |
|
|
|
Signatures
|
|
31
|
|
Financial
Statements
|
F-1
|
PART
I
CAUTIONARY
STATEMENT REGARDING
FORWARD-LOOKING
INFORMATION
Under
the
Private Securities Litigation Reform Act of 1995, companies are provided with
a
“safe harbor” for making forward-looking statements about the potential risks
and rewards of their strategies. Forward-looking statements often include the
words “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or similar
expressions. In this Form 10-KSB, forward-looking statements also
include:
| · |
statements
about our business plans;
|
| · |
statements
about the potential for the development and public acceptance of
new
products;
|
| · |
estimates
of future financial performance;
|
| · |
predictions
of national or international economic, political or market conditions;
|
| · |
statements
regarding other factors that could affect our future operations or
financial position; and
|
| · |
other
statements that are not matters of historical
fact.
|
These
statements may be found under “Management’s Discussion and Analysis or Plan of
Operations” and “Description of Business” as well as in this Form 10-KSB
generally. Our ability to achieve our goals depends on many known and unknown
risks and uncertainties, including changes in general economic and business
conditions. These factors could cause our actual performance and results to
differ materially from those described or implied in forward-looking
statements.
These
forward-looking statements speak only as of the date of this Form 10-KSB. We
believe it is in the best interest of our investors to use forward-looking
statements in discussing future events. However, we are not required to, and
you
should not rely on us to, revise or update these statements or any factors
that
may affect actual results, whether as a result of new information, future events
or otherwise. You should carefully review the risk factors described in other
documents we file from time to time with the Securities and Exchange Commission,
and also review our Quarterly Reports on Form 10-QSB.
ITEM
1. DESCRIPTION
OF BUSINESS
Business
Development.
Element
21 Golf Company (the “Company,” “E21,” “we,” “us” or terms of similar meaning)
was originally formed as OIA, Inc., a Delaware corporation, in 1986. In 1992,
the Company changed its name to Biorelease Corp., and was engaged in the
business of biotechnology from 1992 through 1995. From mid-1995 through
September 2001, the Company sponsored a number of early-stage
ventures.
In
June
2001, the Company changed its name from Biorelease Corp. to BRL Holdings,
Inc.
Effective
November 9, 2001, we acquired 100% of the outstanding common stock of AssureTec
Systems, Inc., a Delaware corporation (“Systems”), in a stock-for-stock
transaction. We issued 6,354,000 shares of restricted common stock and converted
outstanding options to acquire 4,750,000 shares of Systems common stock into
options to acquire 4,750,000 shares of the Company’s common stock.
On
April
1, 2002, we exchanged 2,852,000 shares of Systems common stock that had been
issued in connection with the Systems acquisition for
5,704,000 shares of our common stock,
from
substantially all the founders and consultants from whom our interest in Systems
was initially acquired. In addition, options to acquire 4,750,000 shares of
our
common stock then held by these individuals were cancelled. As a result of
these
transactions and the issuance of additional shares of Systems to employees
upon
the exercise of stock options, our ownership of Systems decreased to 34.2%
of
Systems as of June 30, 2003.
On
June
12, 2002 we incorporated Tech Ventures, Inc. (now named AssureTec Holdings,
Inc.
or “AssureTec”) and transferred all our assets and liabilities to AssureTec in
exchange for 100% ownership of AssureTec common stock. At that time, our only
business was the business of AssureTec.
In
September, 2002, we
acquired 100% of the outstanding common stock of Element 21 Golf Company, a
Delaware corporation (“Element 21”), in exchange
for
42,472,420 restricted shares of our common stock (“the
Acquisition”). We also converted
options
to acquire 6,432,000 shares of Element 21 common stock into options to acquire
6,432,000 shares of our common stock. This Acquisition has been accounted for
as
a “reverse” acquisition using the purchase method of accounting, as the
shareholders of Element 21 owned
a
majority of the outstanding stock of
our
Company immediately following the Acquisition. Following the Acquisition, we
changed our name to Element 21 Golf Company.
We
now
own approximately 5.1% of the issued and outstanding stock of AssureTec, which,
as a result of a share exchange with the prior stockholders of Systems, now
owns
100% of the outstanding stock of Systems. We have agreed to distribute these
shares on a pro rata basis to our shareholders of record as of October 4, 2002
(excluding shareholders who received shares of our common stock in connection
with the Acquisition). We anticipate that this distribution will occur as soon
as possible after all appropriate documentation has been prepared and filed
with
the Securities and Exchange Commission.
During
the fiscal year of 2006, the Company issued an aggregate of 12,143,313 shares
of
common stock to consultants as payment for services rendered.
Recent
Events
On
July
31, 2006 (the “Initial Closing Date”), the Company agreed to a $4 million equity
financing by entering into two Series B Convertible Preferred Stock Subscription
Agreements (each a “Subscription Agreement” and collectively the “Subscription
Agreements”) with each of Clearline Capital, LLC and Vladimir Goryunov (each a
“Purchaser” and collectively, the “Purchasers”). Each Subscription Agreement
provides for the sale by the Company to the applicable Purchaser of 117,648
shares of the Company’s Series B Convertible Preferred Stock, par value $0.10
per share (the “Series B Preferred Stock”), and warrants to purchase an
aggregate of 17,647,059 shares of the Company’s common stock, in exchange for
and in consideration of an aggregate investment by each Purchaser of $2 million
in cash (each Purchaser’s “Investment Amount”), which amount is to be invested
by each Purchaser in two equal $1 million installments, the first of which
occurred on the Initial Closing Date and the second of which will occur at
a
subsequent closing to occur on or before November 30, 2006 (the “Subsequent
Closing”, and the date of such Subsequent Closing, the “Subsequent Closing
Date”); provided that the Company satisfies the necessary condition precedent to
the Subsequent Closing as described below.
On
the
Initial Closing Date, each Purchaser invested $1 million in the Company in
return for 58,824 shares of Series B Preferred Stock and two warrants (the
terms
of which are more fully described below) to purchase an aggregate of 8,823,530
shares of common stock. The Subscription Agreements obligate each Purchaser
to
invest the remaining $1 million of its Investment Amount (each Purchaser’s
“Additional Investment Amount”) in the Company no later than November 30, 2006,
subject only to the Company converting at least 80% of the aggregate outstanding
principal amount evidenced by those certain convertible promissory notes issued
by the Company between February 2006 and July 31, 2006 (collectively, the
“Promissory Notes”) into shares of common stock prior to the Subsequent Closing
Date. In exchange for each Purchaser’s Additional Investment Amount, the Company
will issue to each Purchaser an additional 58,824 shares of Series B Preferred
Stock and two additional warrants (the terms of which are more fully described
below) to purchase an aggregate of an additional 8,823,529 shares of common
stock.
On
the
Initial Closing Date the Company granted each Purchaser (i) one warrant to
purchase 3,750,000 shares of common stock at an exercise price of $0.22 per
share in the event the warrant is exercised on or prior to July 31, 2007, and
$0.28 per share in the event the warrant is exercised on or after August 1,
2007, and (ii) one warrant to purchase 5,073,530 shares of common stock at
an
exercise price of $0.28 per share (each an “Initial Warrant”, and collectively,
the “Initial Warrants”). Assuming that the conditions precedent to the
Subsequent Closing are satisfied, on the Subsequent Closing Date, the Company
will grant each Purchaser (i) one additional warrant to purchase 3,750,000
shares of common stock at an exercise price of $0.22 per share in the event
the
warrant is exercised on or prior to July 31, 2007, which increases to $0.28
per
share in the event the warrant is exercised on or after August 1, 2007, and
(ii)
one additional warrant to purchase 5,073,530 shares of common stock at an
exercise price of $0.28 per share (each a “Subsequent Warrant”, collectively,
the “Subsequent Warrants” and collectively with the Initial Warrants, the
“Warrants”). The Warrants expire on January 31, 2009. The exercise prices of the
Warrants are subject to adjustment in the event of certain dilutive issuances,
stock dividends, stock splits, share combinations or other similar
recapitalization events. The Warrants may only be exercised by the payment
of
the applicable exercise price to the Company in cash, no cashless exercise
is
permitte d.
The
terms of the Initial Warrants and the Subsequent Warrants are
identical.
Business
of the Issuer
Element
21 was formed on September 18, 2002 to acquire partially-developed golf
technology and to design, develop and bring to market golf club shafts and
golf
heads made from a patented scandium alloy exclusively licensed to the Company
(the “E21 Alloy”). The active ingredient in the E21 Alloy is Scandium, which is
element No. 21 in the Periodic Table of Elements. E21 Alloy shafts are believed
to exhibit properties that out-perform titanium with a higher strength-to-weight
ratio of up to 25% and a specific density advantage of 55%. The E21 Alloy is
lighter, stronger and more cost effective than titanium. This advanced metal
technology was originally developed in the former Soviet Union for military
applications during the 1970s. Scandium alloys have been used in
intercontinental ballistic missiles, jet aircraft, the Mir space station and
most recently, in the International Space Station. The Company is attempting
to
commercialize Scandium’s use in golf shafts and golf heads. During the past
year, we solidified our sales and marketing strategies and initiated an
international public relations event that has generated coverage in over 100
publications worldwide. Our team was bolstered by the hiring of addition golf
executives, including industry veteran Bill Dey, who was hired to run the
company’s golf program. E21’s Eagle One shafts made their first appearance on
the PGA Tour and were tested by a large number of PGA Tour professionals and
are
now in play on the tour on regular basis. In addition, the Company received
over
150 applications to distribute E21 golf equipment.
In
September, 2002, Element 21 acquired from Dr. Nataliya Hearn, our current Chief
Executive Officer, and David Sindalovsky, a consultant to the Company (the
“Assignors”), the exclusive right to use, produce and sell the E21 Alloy for
golf club shafts and golf heads. Although these rights do not cover all mixes
of
scandium alloy, the Company believes that any scandium alloy outside the range
of its patent-protected rights cannot be used to produce golf club shafts or
heads in an economically feasible manner. Upon completion of the Acquisition,
the previous officers and directors of the Company resigned and Dr. Hearn became
the Company’s President/ CEO and a Director and Jim Morin and Gerald Enloe also
became Directors. Mr. Morin also served as Vice President and Chief Financial
Officer of the Company prior to his resignation from the Board on July 31,
2006.
To
date,
the Company has operated solely through strategic consultants and without
full-time employees. Consultant Nataliya Hearn, PhD, who is our CEO and
President, is based in Toronto, Canada, and oversees the Company’s engineering,
alloy supply and production. Consultant David Sindalovsky is responsible for
material sourcing, manufacturing and production path developments, and
supervising the engineering and design of the golf club components. Bill Dey,
who joined the Company in January, 2006, as Executive Vice President and General
Manager, is an accomplished golf industry executive who has been involved in
the
industry since the late 1980’s. John Grippo, a consultant to the Company who was
appointed as the Company’s Chief Financial Officer in March, 2006, has over 15
years experience as a CFO for public and private companies ranging in size
up to
$250 million in annual revenues. This past year, the Company also retained
the
services of Mark Myrhum as Senior Designer. Mr. Myrhum has been providing club
design solutions to the golf industry for more than 15 years. Golf clubs
designed by Mr. Myrhum have been played by U.S. and British Open champions,
Masters and PGA champs, top-ranked PGA players and leading LPGA and Senior
PGA
money winners. After an 8-year career as the Principle Engineer and Chief
Designer for Wilson Golf, Mark Myrhum started MCM Golf, Inc. in 1996. His
clients have included Wilson Sporting Goods, McHenry Metals, Carbite Golf,
MasterGrip, Tour Edge and others. After earning a Bachelors of Science degree
in
Engineering Mechanics from the University of Wisconsin-Madison, Mr. Myrhum's
career began at NASA Ames Research Center and the Goodyear Tire and Rubber
Company. Consultant Howard
Butler, PhD, is one of the world’s leading golf designers. Dr. Butler has done
extensive design work on the various types of clubs incorporating the Company’s
advanced scandium technology as well as laboratory testing and informal player
testing and assessments. Consultant Stephen Meldrum has 17 years senior
executive experience in international sales and licensing, and is handling
investor relations for the Company.
Additionally,
several sales executives have been retained as consultants tasked with business
development and building retail distribution channels. Professional player
relations are handled by Andy Harris.
The
Company believes that this structure is advantageous because it allows the
Company to avoid having large marketing, administrative and development
organizations in order to be responsive to fluctuations in the marketplace
that
have plagued other start-up golf companies.
The
Company has a strategic supply agreement with an affiliate of Kamensk-Uralsky
Metallurgical Works Joint Stock Company, located in a number of locations in
Russia, also known as OAO KUMZ. Under this agreement, concentrated scandium
will
be produced to the specification of the Company by the KUMZ affiliate. KUMZ
will
also transfer the latest innovations in scandium alloys to the Company as they
become available. KUMZ is a well-established, diversified producer of aluminum,
aluminum alloys and products for aerospace, shipbuilding, automotive, and other
industries. KUMZ is also the world’s largest facility specializing in scandium
alloy products.
Work in
scandium initially began 20-25 years ago with the development of scandium
aerospace alloys for fighter aircraft.
The
second strategic partner of the Company is Yunan Aluminum, which is in the
business of manufacturing precision tubing for outdoor recreation and sporting
markets. Yunan Aluminum was established in 1979 in South Korea, and now
manufactures, for parties other than the Company, about 80,000 pounds per month
of high quality products made of high strength aluminum alloys. In August 2003
the company reached an agreement with Yunan Aluminum to produce E21
Alloy
golf shafts and club components exclusively for the Company in South Korea.
Pan
Osprey, a Chinese manufacturer of OEM golf equipment specializing in high-end
golf clubs manufactured under license for some of the leading brand names in
golf, will manufacture a full line of clubs with proprietary designs from
Element 21's design labs when the Company begins commercial production of its
clubs, of which there can be no assurance. The planned lineup includes drivers,
fairway woods, a full range of irons, wedges, hybrid clubs, and putters.
Pursuant to the Company’s exclusive manufacturing agreement with Pan Osprey, the
Company will provide the raw materials from which Pan Osprey will manufacture
a
full line of clubs under the E21 brand name. The Company is also seeking to
expand its manufacturing capabilities in China to include other top tier
production facilities.
Golf
Products
We
believe that E21 Alloy golf products have outstanding potential in the industry
based on several factors:
| · |
Results
of player and robotic testing indicate E21 Alloy’s improved performance
over leading titanium clubs, and
|
| · |
Improved
distance and less dispersion, allowing longer more accurate results,
which
are impossible to achieve with current metals.
|
The
interest in the E21 Alloy has been supported by several performance and
marketing features:
| · |
The
E21 Alloy is strategically incorporated into the production of metal
woods, irons and putters can result in heads with a larger “sweet spot”
for more consistency and accuracy;
|
| · |
If
increased club head size is not required, the reduced density and
improved
strength allows flexibility in placing perimeter weighting that can
affect
the trajectory (flight path) of the
ball;
|
| · |
The
E21 Alloy is softer than titanium providing superior feel and workability
for the player;
|
| · |
The
E21 Alloy is lower in cost and easier to fabricate than
titanium;
|
| · |
The
specific yield strength advantage of the E21 Alloy over steel and
high-end
aluminum alloys enables the design of shafts at substantially reduced
weight and higher performance;
|
| · |
The
homogeneous nature of the E21 Alloy allows for consistent shaft
production, a problem inherent with graphite
shafts.
|
During
the early part of this past fiscal year, we completed the design and development
of several golf new products. These products included irons, wedges, putters,
hybrid clubs and a driver.
Robotic
and player testing was carried out and a limited volume of product was ordered
in late 2005. E21’s irons and hybrids clubs both won Player’s Choice Awards
given out in the spring of 2006 by Golfing Magazine.
In
December our new E21 Alloy driver received approval from the United States
Golf
Association (USGA). Subsequent robotic testing conducted at an independent
laboratory demonstrated repeatedly that the E21 Alloy driver was approximately
3
times more accurate than titanium drivers. The average dispersion for E21’s
driver was less than 7 yards off center compared to 22 yards for the titanium
drivers tested E21's driver, which has a much larger ball response hitting
area,
produced the lowest recorded angle of deviation off-center of just 1.6 degrees
compared to 4.2 degrees for titanium driver heads.
In
March
2005, the Company began test marketing full iron sets to retailers and golf
pro
shops. In April 2005, the Company entered into an agreement with The GolfWorks
for the sale of the Company’s E21 Alloy metal shafts for irons, utility clubs
and wedges. The GolfWorks has been providing club makers and other golf
equipment experts with a complete complement of proprietary club head designs,
and a full selection of brand name shafts and grips for more than 25
years.
Golf
Shafts
E21
Alloy
golf shafts provide the light weight and flexibility of graphite with the
favorable playing characteristics of steel. Steel dominates the shaft market
for
irons, while graphite is the most popular shaft material for metal woods.
Graphite shafts are generally more expensive than steel, and golfers often
experience inconsistency from club to club due to reproducibility problems
inherent with graphite. The Company has produced prototype E21 Alloy shafts
with
several flex strengths that have been tested initially with irons and accepted
as complying with the rules of golf by the United States Golf Association.
In
an
effort to bring the Company’s shafts to the PGA Tour, E21 retained the services
of Andy Harris as its PGA Tour Director. During the year Mr. Harris attended
most PGA Tour events providing custom fitted E21 shafts to over 30 PGA Tour
players. To date several players have used E21 shafts in official PGA,
Nationwide and Champions Tour events.
We
believe E21 Alloy shafts show improved performance in a number of respects
to
graphite and stainless steel shafts. E21 Alloy's inherent metallurgical
properties combined with a proprietary 25-step seamless production process
results in a shaft that is nearly perfectly symmetrical, unlike graphite and
stainless steel shafts. Many golf customers do not realize that steel shafts
are
welded creating a seam or spine that is not visible to the eye. The difference
in the tube wall thickness at the point of welding creates an imbalance, which
affects the consistency of shots. Similarly, the production process for graphite
shafts also results in inconsistencies through the shaft with similar associated
problems. The Company believes that the E21 Alloy provides greater accuracy
and
improved consistency from club to club.
The
tests
conducted by Golf Labs Inc. on behalf of the Company showed remarkable 10-20
yard distance improvement when E21 Alloy shafts are tested against the best
Graffaloy graphite and True Temper steel shafts. Of
even
greater significance were the test results that showed superior accuracy
afforded by this new E21 Alloy technology. The dispersion pattern of shots
hit
with a robotic arm yielded a dispersion factor that was 250% smaller than
popular steel and graphite shafts, when measured by the total square footage
of
the footprint of hit balls and their dispersion off-center. Although testing
results cannot predict actual performance with certainty, the Company believes
that these test results are meaningful.
Concurrent
with the development of the overall shaft design, the Company has developed
a
shock absorbing system under the trademark ShockBlokTM
which
redirects shaft vibration back into the club head, generating an added energy
kick for extra distance and reducing the amount of vibration transfer to the
player's hands. Golfing
has a negative effect on the body. High shock energy transferred by the steel
shafts to the player’s hands during a round of golf creates fatigue. For
frequent golfers, this can lead to stress injuries to a player’s hands, wrist,
elbows or shoulders, much like ‘tennis elbow’. According to an analysis
commissioned by a consultant to the Company, Dr. Howard Butler, along with
two
orthopedic physicians, during a typical round of golf, the extra energy
transmitted to the hands of a golfer using steel shafts is 300% higher than
the
E21 Alloy shafts. The Company also believes that most users of its shafts would
immediately notice the superior shock absorption and that the E21 Alloy also
contributes to a measurably superior feel as compared with steel and graphite
clubs.
The
market for golf shafts was estimated by Golfdatatech to be close to 30 million
units in the US and 60 million units worldwide in 1999. Golfdatatech estimates
that the size of the market for high performance premium shafts that the
Company’s E21 Alloy shafts will initially be targeting represents approximately
27 million units worldwide.
The
Company is currently test marketing shafts designed for irons through the
Clubmakers and GolfWorks catalogues and website. Design and engineering of
shafts for all other club heads (drivers, wedges, hybrids and putters) is
complete and limited production runs are currently being tested.
Clubhead
Designs and Features
The
Company has completed the design and engineering process for a full line of
clubs, from drivers to putters. Under the guidance of Mark Myrhum
and David Sindalovsky, design improvements are being made to streamline mass
production of the various golf components. Prototypes of these various clubs
are
now undergoing testing, and production tooling is well underway. The golf shafts
have undergone lab testing, including testing with a robotic arm at
Golf
Laboratories, Inc. in San Diego.
These
tests conducted to date have demonstrated favorable results for our E21 Alloy
clubs as compared with competitive products, including greater distance,
significant improvements in accuracy and consistency, and the “feel” of the
clubs themselves. Although test results cannot predict actual performance
results, the Company believes these test results are meaningful.
The
E21
driver has one of the most responsive face areas of any driver on the market,
and because the head and shaft are
both
made of the same patented E21 Alloy, the energy passes from the head to the
shaft at the same frequency, providing the golfer with a fully “harmonized” golf
club. This harmonization is a unique feature of the E21 golf clubs and has
been
trademarked as E21’s True Contact Signature™ Shots are consistently both “off
the centerline” and “along the centerline” giving the golfer a very tight,
concise landing pattern resulting in a high level of control and repeatability.
The E21 Alloy club head also creates less ball spin at the point of impact
for
greater
distance.
The
Company believes its club will be distinctly recognizable due to its unique
design features that include a louvered effect on the crown plate of the club.
These features create a corrugated effect that provides additional strength
to
the clubhead design and allows more freedom to move weight to strategic points
within the sole of the clubhead to improve distance and accuracy. As with any
object moving at a high speed, louvers provide aerodynamic stabilization
benefits. The Company used advanced modeling software to optimize clubhead
design.
The
Company’s Low Gravity LogicTM
irons
have a cavity back design with a hollow body filled with a patented high rebound
aerospace polymer insert that transfers more energy to the ball for livelier
performance and maintains a low center of gravity. The head geometry is designed
to leverage maximum performance from E21 Alloy shafts. The clubs also feature
variable face thickness with over six square inches of playing surface to
maximize the sweet spot of the clubface. A large sole plate helps the player
avoid hitting the ball fat. The mass of the head is closely aligned with the
launch angles delivered by the shaft during contact with the ball. To maximize
this benefit, the crown is back slanted by 15°.
The
clubs
are designed to allow professional club makers and PGA tour players to fine-tune
the club to their unique preferences. This is accomplished by removing the
E21
insignia on the back of the club, gaining access to a tubular
weight port
to add
up to 28 grams of additional weight to the clubhead while maintaining
its low
center of gravity.
The
E21
line of wedges includes clubs with 52 degree, 56 degree and 60 degree lofts
that
also feature the revolutionary new Eagle One shafts made from E21's patented
alloy.
The
wedges use E21’s patented new Contact Signature Tuned System (CST
SystemTM)
that
uses advanced modeling software to calculate and match the club head performance
to E21’s advanced E21 Alloy shafts in order to provide enhanced head
responsiveness. Through
an optimum balance of launch angle and spin rate, E21 has developed what it
believes are easy-to-hit wedges that provide improved feel, accuracy and
consistency from club to club. These wedges with the E21 shafts will offer
players a greater spin rate with a higher launch angle enabling them to stop
the
ball on the green.
The
muscle back design, with Twin Peaks elongated on the center axis of the club
back, offers a solid feel with an extremely consistent ball flight and
trajectory. This peaked muscle back design actually raises the center of gravity
behind the sweet spot for more carry distance on center hit shots. This design
acts to focus the transfer of energy into the sweet spot of the club face.
An
additional benefit from the element gated Twin Peaks design is its ability
to
track straight through sand or turf by controlling the displacement of the
ground beneath the club as contact is being made with the golf
ball.
The
weighted sole plate affords the capability to cut through even the worst rough,
and get the ball up in the air. Simultaneously, the
leading edge radius
insures a true contact signature with the ball even from a poor
lie.
Element
21’s first putter is a traditional and proven Newport design. The new putter
incorporates the advanced properties of the E21 Alloy in both the shaft and
head
of the new putter. The putter head incorporates an E21 Alloy insert, which
is
milled for superior contact with the ball. The E21 Alloy’s superior strength to
weight ratio over existing golf metals has allowed E21 to redistribute weight
in
the head of the putter to create a larger sweet spot, which in turn provides
substantial forgiveness on mis-hits.
The
E21
Alloy in both the shaft and putter head take advantage of the E21 Alloy’s soft
feel and spin reduction, which translates to reduced ball “skid” upon contact
with the ball, and allows the ball to begin rolling more quickly and easily
off
the face of the club. The Company believes that these features provide enhanced
distance control and a more accurate ball trajectory. Initial player testing
of
these new clubs has provided very positive feedback on the improved “feel” that
the putter provides over competitive offerings.
The
Element 21 Alloy’s Evolution in the Golf Industry
The
Company derives its name from the 21st
element
in the “Periodic Table of the Elements,” which is the unique metal “scandium”
(the beginning of a new millennium). Scandium, when mixed with other metals,
has
a higher strength-to-weight ratio than titanium, graphite, steel or aluminum
alloys. The rights to develop other products not related to the golf industry
were retained by the Assignors solely for their own benefit. All applications
of
scandium to golf products that are covered by the Assignors’ patents have been
acquired by the Company.
In
August
2003, the Company finalized its golf shaft design criteria through the use
of
the most advanced CAD/CAM computer software programs available. These systems
are used by the major aerospace companies to produce aircraft such as the
Advanced Tactical Fighter, America’s fighter jet for the 21st
century.
Utilizing the designs created and analyzed with this software, the Company’s
Korean manufacturer can produce golf shafts to the exacting standards of
advanced aerospace products. The manufacturer has capacity to process in excess
of 100,000 pounds of material per month which equates to approximately 450,000
golf shafts. The manufacturer has negotiated a $50,000 credit line with
preferential payment terms to begin full production of E21’s golf shafts. In
return, the Company has purchased and provided to the manufacturer the
semi-automatic testing and calibration equipment necessary to produce high
quality golf products on a full production basis.
In
April
2004, the Company announced the full implementation of a new Linear Forging
Process, a proprietary method utilized in the mass product ion of E21 Alloy
golf
shafts. The unique “Linear Forging Process” utilizes a pulsed energy system in
matching the structures’ natural frequency resonance to elongate the metals
grains with the least dimensional change to the golf shaft’s design. The
process’ secondary benefit is in providing aligned straightness. All of these
benefits are realized in just a few seconds, which results in high production
rates and significant cost reduction in an otherwise labor-intensive
operation.
In
September 2005, the Company completed negotiations with Pan Osprey Golf
Apparatus
Co,
Limited,
a Chinese manufacturer of high-end golf equipment that manufactures golf clubs
under license for a number of leading OEMs. The Company will provide Pan Osprey
with the raw materials, as well as the necessary knowledge transfer, to properly
work with this advanced metal alloy.
To
date,
the Company has produced a test inventory of E21 Alloy shafts under the E21
brand name, and Eagle One sub brand. The shafts are currently available for
sale
through catalog and online via the Golfworks, a company that sells wholesale
parts to club makers around the world. The Company is also pursuing the possible
development of traditional retail channels of distribution.
With
the
proceeds from its recently completed financings, the Company intends to commence
the production and roll-out of its proprietary E21 Alloy metal wood driver
with
an E21 Alloy shaft to be sold to the retail golfer through a direct marketing
program. Ultimately, the complete lineup of clubs will be made available through
traditional retail channels of distribution. In the alternative, the Company
may
choose to license its products to other OEMs rather than develop the E21 brand
name on its own.
Element
21’s Competitive Advantage
We
believe that we have a competitive advantage in our industry for the following
reasons:
| 1. |
License
and supply agreements for scandium metal alloys in place.
|
| 2. |
Longtime
association with the world’s largest producer of the highest quality
scandium master alloy.
|
| 3. |
Strategic
association with the world’s largest producer of scandium products, which
has over 20 years of experience in producing scandium metal alloy
billet,
extruded products, and forged products. Lowest production costs due
to
location, size, and experience, as well as the advantage of waste
control
during the production process.
|
| 4. |
Experienced
team of alloy developers, processing specialists, production specialists,
light metal sports equipment designers, and product marketing
specialists.
|
| 5. |
Knowledge
and association with several production paths of semi-finished and
finished scandium products.
|
| 6. |
Consulting
agreements with leading golf product development and marketing
experts.
|
| 7. |
Growing
demand for high performance golf
products.
|
| 8. |
Added
value to an OEM’s golf club products providing for a longer and more
accurate golf shots as tested against steel and graphite shafts
manufactured by Royal Precision, Apollo, AldilaR,
UST, PenleyR,
True TemperR
and GrafalloyR.
|
| 9. |
Advanced
proprietary clubhead designs that take full advantage of the unique
properties of the E21 Alloy, and offer superior performance to existing
alternatives.
|
| 10. |
Significant
barriers to entry due to the complex nature of working with scandium,
and
patent protection for golf
applications.
|
| 11. |
Trademarked
ShockBlokTM
shock reduction system in E21 Alloy
shafts.
|
Scandium
Metal - “Element 21”
Scandium,
a little-known element, was developed primarily in secret aerospace programs
in
the former Soviet Union. It was used as an additive to traditional aluminum
alloys to create the highest strength scandium metal alloys and alloys with
significantly enhanced weldability. These super-alloys were used in missiles
and
MIG-29 aircraft and are currently used in MIG-31 and Sukhoi-27 aircraft. We
believe that the rights we have acquired from the Assignors cover scandium
metal
alloys that have achieved the highest “strength-to-weight ratio” for golf
applications.
Scandium
is most often found in nature as an oxide in relatively low concentrations,
from
5 to 100 parts per million. It is rarely concentrated in nature due to its
lack
of affinity to combine with the common ore-forming anions. Therefore, it is
usually derived as a by-product from uranium and other mineral leaching
operations. The cost of scandium is directly related to the relatively high
cost
of processing and its lack of widespread use in commercial products. It has
not
been commercially mined in the United States or Europe because only small
quantities have been used, primarily in high intensity halide lamps, lasers,
electronics, high tech ceramics, and research applications.
However,
in the former Soviet Union, scandium has been produced in significantly larger
quantities since it was an additive to traditional aluminum alloys to produce
ultra high strength scandium metal alloys for military aerospace uses. In
Russia, there is now less scandium production due to reduced military spending.
Currently however, Russia still possesses the world’s largest stockpile of pure
scandium oxide, which is available to the Company through the rights it acquired
from Assignors. When the current supply is exhausted, scandium can be obtained
through reactivating production of various waste streams of already identified
ore processing sites in Russia. In addition, several possible North American
scandium production sites have also been identified, if there is sufficient
demand to justify the investment.
History
of Commercial Scandium Metal Alloys
Scandium
metal alloys for sports applications were developed using the expertise of
Russian and Ukrainian scientific institutes. To date, more than 75 tons of
scandium metal master alloy have been sold for the production of over 2,500,000
pounds of final product, including several sports products, and for a variety
of
civil and government funded transportation related development
programs.
In
1997,
Easton Sports’ baseball and softball bats constituted the first production of a
large-scale scandium alloy sports product. The ultra light high-strength Easton
bats, known as the Scandium/Sc 7000 Redline series, quickly became the most
successful new product launch in Easton’s 75-year history. To date, the Company
believes that Easton has sold in excess of $1 billion of scandium metal alloy
baseball and softball bats. Easton then produced a weldable scandium metal
alloy
for use in bicycle frames, and handle bars. Both products have been highly
successful and the frame is now considered one of the lightest in the industry
and used by many top-racing teams. In addition to baseball bats and bicycle
frames, scandium golf shafts, metal wood drivers, putters, lacrosse sticks,
bicycle seat posts and handlebars and hockey stick prototypes have been
developed.
E21
Alloy - Product Advantages
The
E21
Alloy has advantages over other high strength aluminum and titanium alloys
and
composite materials, especially in heavily drawn and worked
products:
| · |
Up
to 50% strength increase over high-strength aluminum
alloys;
|
| · |
Over
20% specific strength advantage over titanium
alloys;
|
| · |
Significant
cost and design advantages over composite
materials;
|
| · |
Reduction
and elimination of surface
re-crystallization;
|
| · |
Increase
in weldability and weld strength;
|
| · |
Increase
in weld fatigue life of 200%;
|
| · |
Reduction
and elimination of hot-cracking in
welds;
|
| · |
Increased
plasticity, durability, and
formability.
|
Sports
Equipment
As
athletes and marketers demand improvement in sports equipment, designers push
material limitations when using existing metals and alloys. Most aluminum
products in the sports market today have alloy development origins from the
1930s, while other high-performance alloys were developed in the 1960s. Titanium
and composite materials have replaced aluminum in some sporting goods; however,
these materials are more expensive and more difficult to process. Consequently,
they have found major acceptance only in the highest end of the
market.
Our
objective is to develop and market new golf products with E21 alloys which
can
provide measurable advantages over existing high-end aluminum alloys, stainless
steel, titanium and composite materials.
Sales
and Marketing
This
product development effort has provided the Company with several sales and
marketing options. These options include the sale of semi-finished products
to
other original equipment manufacturers (OEMs), the sale of finished heads to
OEMs, and/or the Company’s own direct sale of branded E21 Alloy golf products to
the market place.
Currently,
E21 Alloy shafts are available to club makers and fabricators through the
Clubmakers and Golfworks
catalogues and web sites. Some initial inroads have also been made on a limited
basis to retail golf chains. As a product line unfolds, the Company will more
aggressively pursue the development of additional retail channels and sales
strategies.
As
the
various club designs and shafts are being updated, testing of these updated
products using a robotic arm will allow the company to validate the performance
improvements available through this advanced material design, and provide
documentation necessary to make substantive claims regarding the performance
of
the E21 lineup of clubs. It is anticipated that this testing will be conducted
on a regular basis at Golf Labs Inc. in San Diego.
E21
is
focused on attracting key retailers to carry its products, and for this reason
the Company’s previous plan to use an infomercial to introduce its products has
been postponed.
In
January 2006, E21 reported on its plans to drive a golf ball into orbit around
the Earth in celebration of the 35th anniversary of Alan B. Shepard Jr’s.
historic Apollo 14 Mission. Through the collaborative efforts of six nations
and
members of NASA, Canadian and Russian space agencies and the Rocket Building
Corporation Energia, every single record for distance in the golf industry
will
be shattered when one of the International Space Station’s astronauts will hit
an E21 golf ball around the world - using an E21, pure gold plated club. In
July
2006, a Flight Safety Certificate was signed by NASA approving the event for
Thanksgiving 2006. E21 expects that the event will continue to generate
international media coverage and interest from golfers around the world which
will in turn assist in the sale of E21 products in the future.
During
this past fiscal year, the Company contracted with two important international
distributors for the sale of its products in Australia and Europe. Headquartered
in Hamburg, Germany, Golf Professional Service GMBH (GPS) began selling E21
products in Germany, Austria, Switzerland, Spain and Portugal this summer.
GPS
has been marketing golf products in Europe and currently sells to over 1,200
pro
shops and retail outlets. In the summer edition of Golf House Golf Equipment
Catalogue, GPS placed an E21 driver on the full back cover of the catalogue's
customer address label side, calling the "Shock" Driver a Sensation. In
Australia and New Zealand, E21 also contracted with Power Sports International
(PSI). With their head office and warehouse located in Queensland, PSI has
13
sales representatives in South Australia, New South Wales, Queensland, Tasmania,
Northern Territory, Victoria, Western Australia and New Zealand. PSI is setting
up an extensive advertising program including the placement of ads in three
major golf publications, as well as in local press and state magazines. PSI
will
also be establishing a major Demo Day program with their agents, and will be
implementing a Tour program on the popular Australian PGA Tour.
Based
on
interest in the Company’s products from retailers, other golf companies and club
and shaft manufacturers in Asia, E21 management devised its future sales and
marketing strategy. Because E21 is in control of alloy production, product
manufacturing, patent protection, product design, and sales and marketing it
has
implemented a three-tiered marketing strategy that it feels will maximize
profits while maintaining control over its proprietary E21 Alloy. The
three-tiered strategy targets:
| · |
Retail
Sales -- equipment sales to a variety of domestic and international
retailers;
|
| · |
Component
Sales -- the selective sale of shafts and heads to other golf club
companies; and
|
| · |
Technology
Licensing -- limited licenses to off-shore golf component manufacturers.
|
In
preparation for sales, the Company established a new call-in and customer
service center, full assembly facilities, warehousing, and shipping and
receiving capabilities in March 2006. All business data generated can be
integrated into a comprehensive computerized tracking / database management
solution. This integrated system provides access to key information specific
to
running large-scale operations tailored to our needs as a golf company. The
Company has created a very cost-effective solution that will be highly scalable
in order to manage future growth.
Scandium
Raw Material Supply
The
raw
material that goes into production of the E21 Alloy comes from scandium oxide,
which has about 60% scandium metal content. Scandium oxide is used in the
production of “master alloy,” which is then added to nine other metals and other
alloy ingredients to create a concentration of approximately 0.001% - 10.00
%
scandium in the final alloy used in products. This is known as the E21 Alloy,
which has the technical advantages needed for production of high performance
equipment for sports, transportation, military and aerospace applications and
are the subject of the Assignors’ patents.
Because
of the experience and access to economic supply of scandium raw materials and
experience with the scandium alloys, the Company will initially rely on KUNZ
and
Yunan as sole suppliers and reprocessors of its precursor materials. However,
through its consultants, over time and with additional resources, of which
there
is no assurance, the Company intends to develop an independent resource for
supplying these materials and services.
Status
of Any Publicly Announced New Product or Service
The
Company’s web site, at
www.e21golf.com,
contains
its most recent press releases and financial reports as well as independent
test
results of the Company’s shafts against the leading high-performance golf shafts
in the world. For additional information or earlier press releases go to any
website’s financial bulletin board for Element 21 Golf Company (formerly BRL
Holdings, Inc. (OTCBB EGLF). None of the information contained on the Company’s
website is incorporated in this Form 10-KSB.
Competitive
Business Conditions
All
major
manufacturers of golf clubs, shafts and related equipment will be major
competitors of our planned business operations, and all have greater resources,
marketing capabilities and name recognition than we do. However, the Company
believes that it would be impossible for a competitor to use scandium alloys
in
golf club production without infringing on the two US patents exclusively
licensed to E21. The marketing and branding of the E21 Alloy has also received
a
high volume of world-wide media coverage, due to the upcoming golf shot from
the
International Space Station.
Sources
and Availability of Raw Materials
The
Company has a strategic supply agreement with an affiliate of OAO KUMZ. Under
this agreement, concentrated scandium alloy shall be produced to the
specification of the Company by the KUMZ affiliate. KUMZ also will transfer
the
latest innovations in scandium alloys to the Company as they become available.
KUMZ is a well-established, diversified producer of aluminum, aluminum alloys
and products for aerospace, shipbuilding, automotive, and other industries.
KUMZ
is also the world’s largest facility specializing in scandium alloy products.
Scandium work initially began 20-25 years ago with the development of scandium
aerospace alloys for fighter aircraft.
The
second strategic partner of the Company is Yunan Aluminum, which is in the
business of manufacturing precision tubing for outdoor recreation and sporting
markets. Yunan Aluminum was established in 1979 in South Korea, and now
manufactures, for customers other than the Company, about 80,000 pounds per
month of high quality products made of high strength aluminum alloys. Yunan
Aluminum intends to reprocess, in South Korea, alloy concentrate shipped by
KUNZ
on behalf of the Company and also intends to produce E21Alloy golf shafts
exclusively for the Company.
Shift
from Development to Sales
The
Company’s golf products are new to the market. The Company’s main focus is
shifting from the development to actual sales of scandium golf clubs. While
the
market is large, we cannot be sure that the Company’s products
will
achieve general market adoption. As of the date of this report, we have not
raised funds sufficient to significantly penetrate the golf market, although
our
recent financing will allow sufficient inventory production to supply key
retailers and introduce the E21 Alloy golf clubs to consumers across North
America.
Patents,
Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or Labor
Contracts
The
Company does not hold direct title to any patents. However, when it acquired
Element 21, it acquired the exclusive right to use, produce and sell a specified
range of scandium alloy for golf club shafts and golf heads. Although these
rights do not cover all mixes of scandium alloy, the Company believes that
any
scandium alloy outside the range of its patent protected rights cannot be used
to produce golf club shafts or heads in an economically feasible manner. The
golf applications under these patent rights acquired by us in the Element 21
Acquisition are U. S. Patent Nos. 5,597,529 issued on January 28, 1997, and
5,620,662, issued on April 15, 1997, initially filed by Ashurst Technologies,
Inc. and acquired on January 7, 2001 by Nataliya Hearn and David Sindalovsky.
Need
for any Government Approval of Principal Products or
Services
We
believe there is no need for any government approval or regulation of our
products. The game of golf in the United States is regulated by the USGA. To
date the Company’s products are in compliance with USGA regulations. There may
be a need to comply with certain trade agreements with our strategic partners
outside of the United States of America.
Effects
of Existing or Probable Governmental Regulations
Sarbanes-Oxley
Act
On
July
30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002 (the
“Sarbanes-Oxley Act”). The Sarbanes-Oxley Act imposes a wide variety of
regulatory requirements on publicly held companies and their insiders. Many
of
these requirements will affect us. For example:
| · |
Our
chief executive officer and chief financial officer must now certify
the
accuracy of all of our periodic reports that contain financial
statements;
|
| · |
Our
periodic reports must disclose our conclusions about the effectiveness
of
our disclosure controls and procedures;
and
|
| · |
We
may not make any loan to any director or executive officer and we
may not
materially modify any existing
loans.
|
The
Sarbanes-Oxley Act has required us to review our current procedures and policies
to determine whether they comply with the Sarbanes-Oxley Act and the new
regulations promulgated there under. We will continue to monitor our compliance
with all future regulations that are adopted under the Sarbanes-Oxley Act and
will take whatever actions are necessary to ensure that we are in
compliance.
Penny
Stock
Our
common stock is “penny stock” as defined in Rule 3a51-1 of the Securities and
Exchange Commission (“SEC”). Penny stocks are stocks:
| · |
with
a price of less than five dollars per share;
|
| · |
that
are not traded on a “recognized” national exchange;
|
| · |
whose
prices are not quoted on the NASDAQ automated quotation system; or
|
| · |
in
issuers with net tangible assets less than $2,000,000, if the issuer
has
been in continuous operation for at least three years, or $5,000,000,
if
in continuous operation for less than three years, or with average
revenues of less than $6,000,000 for the last three years.
|
Section
15(g) of the Exchange Act and Rule 15g-2 of the Securities and Exchange
Commission require broker/dealers dealing in penny stocks to provide potential
investors with a document disclosing the risks of penny stocks and to obtain
a
manually signed and dated written receipt of the document before making any
transaction in a penny stock for the investor’s account. You are urged to obtain
and read this disclosure carefully before purchasing any of our shares.
Rule
15g-9 of the Securities and Exchange Commission requires broker/dealers in
penny
stocks to approve the account of any investor for transactions in these stocks
before selling any penny stock to that investor. This procedure requires the
broker/dealer to:
| · |
get
information about the investor’s financial situation, investment
experience and investment goals;
|
| · |
reasonably
determine, based on that information, that transactions in penny
stocks
are suitable for the investor and that the investor can evaluate
the risks
of penny stock transactions;
|
| · |
provide
the investor with a written statement setting forth the basis on
which the
broker/dealer made his or her determination; and
|
| · |
receive
a signed and dated copy of the statement from the investor, confirming
that it accurately reflects the investors’ financial situation, investment
experience and investment goals.
|
Compliance
with these requirements may make it harder for our stockholders to resell their
shares.
Reporting
Obligations
Section
14(a) of the Exchange Act requires all companies with securities registered
pursuant to Section 12(g) of the Exchange Act to comply with the rules and
regulations of the Securities and Exchange Commission regarding proxy
solicitations, as outlined in Regulation 14A. Matters submitted to stockholders
of our Company at a special or annual meeting thereof or pursuant to a written
consent will require our Company to provide our stockholders with the
information outlined in Schedules 14A or 14C of Regulation 14; preliminary
copies of this information must be submitted to the Securities and Exchange
Commission at least 10 days prior to the date that definitive copies of this
information are forwarded to our stockholders.
We
are
also required to file annual reports on Form 10-KSB and quarterly reports on
Form 10-QSB with the Securities Exchange Commission on a regular basis, and
will
be required to timely disclose certain material events (e.g., changes in
corporate control; acquisitions or dispositions of a significant amount of
assets other than in the ordinary course of business; and bankruptcy) in a
Current Report on Form 8-K.
You
may
read and copy any materials filed with the SEC at the SEC’s Public Reference
Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain
information on the operation of the Public Referenc
