Pre-Effective Amendment to Registration Statement (General Form) — Form S-1 Filing Table of Contents
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Approximate
date of proposed sale to the public: From time to time after this registration
statement becomes effective.
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. x
If
this Form is filed to register additional securities for an offering pursuant to
Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. o
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. o
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. o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.
See
definitions of “large accelerated filer,”“accelerated filer,” and
“smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check
one)
(1 The
proposed maximum offering price per share is estimated solely for the purpose of
calculating the registration fee pursuant to Rule 457(c) under the Securities
Act. The proposed maximum offering price per share is based upon the average of
the high and low prices of our common stock as quoted on the Over the Counter
Bulletin Board on March 18, 2009 (within 5 business days prior to filing this
registration statement).
The
registrant hereby amends this registration statement on such date or dates as
may be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until this registration statement shall
become effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
The
information in this prospectus is not complete and may be changed. The selling
shareholders will not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and it is not soliciting an offer to
buy these securities in any state or other jurisdiction where the offer or sale
of these securities is not permitted.
Preliminary
Prospectus
______________________
Bio-Solutions
Corp.
a Nevada
corporation
5,600,000 Shares of Common
Stock
This
prospectus relates to 5,600,000 shares of common stock of Bio-Solutions Corp.,
which are issued and outstanding shares of our common stock, acquired by the
selling security holders in private placement transactions which were exempt
from the registration and prospectus delivery requirements of the Securities Act
of 1933.
Our
common stock is quoted on the Over the Counter Bulletin Board under the symbol
"BISU". As of March 18, 2009, the closing price was $0.47 per share. The
selling stockholders have advised us that they will sell the shares of common
stock from time to time in the open market, on the OTC Bulletin Board, in
privately negotiated transactions or a combination of these methods, at market
prices prevailing at the time of sale, at prices related to the prevailing
market prices, or at negotiated prices.
We will
not receive any of the proceeds from the sale of those shares being offered by
the selling shareholders.
There is
a limited trading market for our common stock. We cannot give you any assurance
that a more active trading market in our common stock will develop, or if such a
market does develop, that it will continue. You should read this prospectus
carefully before you invest in our common stock offered hereby.
See
“Risk Factors” on Pages 5 to7 for factors to be considered before purchasing
shares of our common 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
information in this prospectus is not complete and may be
changed. This prospectus is not an offer to sell these securities and
it is not soliciting an offer to buy these securities in any state or other
jurisdiction where the offer or sale of these securities is not
permitted.
The date
of this prospectus is _________.
Subject
to completion.
2
TABLE OF
CONTENTS
Prospectus
Summary
4
Risk
Factors
5
Forward Looking
Statements
8
Use of
Proceeds
8
Determination of
Offering Price
8
Dilution
8
Selling Security
Holders
8
Plan of
Distribution
9
Legal
Proceedings
9
Directors Executive
Officers Promoters and Control Persons
10
Security Ownership
of Certain Beneficial Owners and Management
10
Description of
Securities
11
Interest of Named
Experts and Counsel
11
Disclosure of
Commission Position on Indemnification for Securities Act
Liabilities
11
Organization Within
Last Five Years
11
Description of
Business
12
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
13
Description of
Property
15
Certain
Relationships and Related Transactions
16
Market for Common
Equity and Related Stockholder Matters
16
Executive
Compensation
18
Financial
Statements
19
Changes in and
Disagreements with Accountants on Accounting and Financial
Disclosure
31
Legal
Matters
31
Experts
31
Additional
Information
31
Indemnification of
Directors and Officers
32
Other Expenses of
Issuance and Distribution
32
Recent Sales of
Unregistered Securities
32
Exhibits
33
Undertakings
34
Signatures
35
Outside
Back Cover Page
Dealer
Prospectus Delivery Obligation
Until
_______, all dealers that effect transactions in these securities, whether or
not participating in this offering, may be required to deliver a prospectus.
This is in addition to the dealers' obligations to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
3
Prospectus
Summary
You
should read this summary together with the entire prospectus, including the more
detailed information in our financial statements and related notes appearing
elsewhere in this prospectus.
Our
Business:
Our
principal business address is 14517, Joseph Marc Vermette, Mirabel
(Québec), Canada J7J 1X2. Our telephone number (888)
686-2611.
We
are a manufacturer of a premix product for the poultry industry called
Nutra-Animal. Nutra-Animal is an anti-oxidant containing wheat middlings,
vitamin E, calcium carbonate, shrimp flour, sodium, selenite and fish
oil.We have conducted studies that we believe demonstrate the positive
impact of Nutra-Animal on growth and reinforcement of the immune
system.
The
summary financial information set forth below is derived from the more
detailed financial statements appearing elsewhere in this
prospectus. We have prepared our financial statements contained
in this prospectus in accordance with accounting principles generally
accepted in the United States. All information should be considered in
conjunction with our financial statements and the notes contained
elsewhere in this prospectus.
The
selling security holders want to sell 5,600,000 shares of our issued and
outstanding common stock. The selling stockholders have advised us that
they will sell the shares of common stock from time to time in the open
market, on the OTC Bulletin Board, in privately negotiated transactions or
a combination of these methods, at market prices prevailing at the time of
sale, at prices related to the prevailing market prices, or at negotiated
prices.
Estimated
use of
proceeds:
We will not
receive any of the proceeds from the sale of those shares being offered by
the selling security
holders.
4
RISK
FACTORS
In
addition to the other information in this prospectus, the following risk factors
should be considered carefully in evaluating our business before purchasing any
of our shares of common stock. A purchase of our common stock is speculative in
nature and involves a lot of risks. Any person who cannot afford the loss of his
or her entire purchase price for the offered shares should not purchase of the
offered shares because such a purchase is highly speculative and involves
significant risks. Our business objectives must also be considered speculative,
and we cannot guaranty that we will satisfy those objectives. Purchasers of the
offered shares may not realize any return on their purchase of the offered
shares. Purchasers may lose their investments in us completely.
Risks Related to our
Business:
We
have a limited operating history upon which an evaluation of our prospects can
be made.
We were
formed on March 27, 2007. Our lack of operating history in the animal feed
industry, which makes an evaluation of our business and prospects very
difficult. Our prospects must be considered speculative, considering the risks,
expenses, and difficulties frequently encountered in the establishment of a new
business. We cannot be certain that our business will be successful or that we
will generate significant revenues and become profitable.
We
have limited revenues to sustain our operation
We are a
small company that is currently developing our business. To date, we have
only generated very limited revenues. The success of our business operations
will depend on our ability to obtain clients and provide quality products to
those clients. We are not able to predict if we will be able to develop our
business and generate significant revenues. If we are not able to complete the
successful development of our business plan, generate significant revenues and
attain sustainable operations, then our business will fail.
We have incurred a net loss since
inception and expect to incur net losses for the foreseeable
future.
Our
accumulated deficit through December 31, 2008 was $593,942. We expect to
incur operating and capital expenditures for the next year and, as a result, we
expect significant net losses in the future. We will need to generate
significant revenues to achieve and maintain profitability. We may not be able
to generate sufficient revenues to achieve profitable operations.
We
are dependent on one supplier for the main ingredient used in our product, and
we do not currently have any other source for that ingredient.
We rely on one key
supplier for the main ingredient used in our product. We cannot guaranty that
the said supplier will continue to supply us with the main ingredient used in
our product. In the event that we cannot buy the ingredient from that
supplier, we will need to develop a relationship with another supplier. Our
failure to develop another relationship with a different supplier will
significantly affect our ability to generate significant revenues.
Four
customers account for a majority of our revenue, and the loss of those customers
would result in a loss of a significant amount of our revenues.
Approximately
93% of our revenue was generated by four customers that were all considered to
be major customers. A major customer is one that represents at least 10% of our
revenue. If we were to lose any of those major customers, we would lose a
significant amount of our revenues.
We may not be able to compete
effectively with other resellers, manufacturers and wholesalers of animal
feed.
The
animal feed industry is significantly competitive. We have competitors that have
been providing traditional animal feed, including chicken pre-mix, for many
years and have more resources than we do. Many of those competitors have
significantly greater financial, human and marketing resources than we have. As
a result, these competitors may be able to devote greater resources to the
development, promotion, sale and support of their products than we do. If we do
not compete effectively with current and future competitors, we may be unable to
secure client contracts, or we may be required to reduce our rates in order to
compete effectively. This could result in a reduction in our revenues, resulting
in lower earnings or operating losses.
We
anticipate that we may need to raise additional capital to market our products
and expand our operations. Our failure to raise additional capital will
significantly affect our ability to fund our proposed activities.
We are
currently not engaged in any sophisticated marketing program to market our
products, because we lack capital and revenues to justify the expenditure. Our
strategy is to negotiate distribution agreements to lower these expenses. We
believe that we will need to raise $250,000 to fully implement our business
plan.
If
we are unable to successfully execute our growth strategy, our business and
future results of operations may suffer.
Our
growth strategy includes increasing the number of clients that we serve,
selectively expanding the geographic reach of our products and broadening the
scope of our products offerings. In connection with our growth strategy, we will
be required to increase our sales and marketing efforts. Our growth strategy
exposes us to a number of risks, including the following:
·
geographic
expansion requires start-up costs, and often requires lower rates to
generate initial business. In addition, geographic expansion may disrupt
our patterns to and from and within the expanded area and may expose us to
areas where we are less familiar with customer rates, operating issues and
the competitive environment;
·
growth
may strain our management, capital resources and customer
service;
·
hiring
new employees may increase training costs and may result in temporary
inefficiencies as the employees learn their jobs;
and
·
expanding
our products offerings may require us to enter into new markets and
compete with additional
competitors.
We cannot
guaranty that we will overcome the risks associated with our growth. If we fail
to overcome such risks, we may not realize additional revenue or profitability
from our efforts and we may incur additional expenses.
5
Outbreaks
of livestock disease can adversely affect sales of our products.
Outbreaks
of livestock diseases can significantly affect demand for our products. An
outbreak of disease could result in governmental restrictions on the sale of
livestock products to or from customers, or require our customers to destroy
their chickens. This could result in the cancellation of orders by our customers
and create adverse publicity that may have a material adverse effect on the
agricultural products industry and our ability to market our products
successfully.
We
have limited marketing and sales capabilities.
Our
future success depends, to a great extent, on our ability to successfully market
our products. We currently have limited sales and marketing capabilities.
Consequently, we will need to identify and successfully target particular market
segments in which we believe we will have the most success. These efforts will
require a substantial, but unknown, amount of effort and resources. We cannot
assure you that any marketing and sales efforts undertaken by us will be
successful or will result in any significant sales. Our strategy is to negotiate
distribution agreements to increase our market penetration.
Our
products and processes can expose us to product liability claims.
Product
liability claims or product recalls can adversely affect our business reputation
and expose us to increased scrutiny by provincial and governmental regulators.
The packaging, marketing and distribution of agricultural feed products entail
an inherent risk of product liability and product recall and the resultant
adverse publicity. We may be subject to significant liability if the consumption
of any of our products causes injury, illness or death of livestock, other
animals or humans. We could be required to recall certain of our products in the
event of contamination or damage to the products. In addition to the risks of
product liability or product recall due to deficiencies caused by our production
or processing operations, we may encounter the same risks if any third party
tampers with our products. We cannot assure you that we will not be required to
perform product recalls, or that product liability claims will not be asserted
against us, in the future. Any claims that may be made may create adverse
publicity that would negatively affect our ability to market our products
successfully.
Our
officers and directors are engaged in other activities that could conflict with
our interests. Therefore our officers and directors may not devote sufficient
time to our affairs, which may affect our ability to conduct marketing
activities and generate revenues.
The
individuals serving as officers and directors have existing responsibilities and
may have additional responsibilities to provide management and services to other
entities. As a result, conflicts of interest between us and the other activities
may occur from time to time, in that our officers and directors shall have
conflicts of interest in allocating time, services and functions between the
other business ventures in which they may or become involved and our
affairs. Outside demands on our management’s time may prevent them from
devoting sufficient time to our operations.
We
depend on the efforts and abilities of our management to continue
operations.
Our
management is our only employees with experience relevant to the business. In
addition, the demand on their time will increase because of our status as a
public company. The interruption of the services of our management could
significantly hinder our operations, profits and future development, if suitable
replacements are not promptly obtained. We do not currently have any executive
compensation agreements. We cannot guaranty that our management will remain with
us.
Our ability to raise additional
capital through the sale of our stock may be harmed by competing resales of our
common stock by the selling security holders.
The price
of our common stock could fall if the selling security holders sell substantial
amounts of our common stock. These sales would make it more difficult
for us to sell equity or equity-related securities in the future at a time and
price that we deem appropriate because the selling security holders may offer to
sell their shares of common stock to potential investors for less than we
do. Moreover, potential investors may not be interested in purchasing
shares of our common stock if the selling security holders are selling their
shares of common stock.
The
costs to meet our reporting requirements as a public company subject to the
Exchange Act of 1934 will be substantial and may result in us having
insufficient funds to operate our business.
We will
incur ongoing expenses associated with professional fees for accounting and
legal expenses associated with being a public company. We estimate that these
costs will range up to $50,000 per year for the next few years. Those fees will
be higher if our business volume and activity increases. Those obligations will
reduce and possibly eliminate our ability and resources to fund our operations
and may prevent us from meeting our normal business obligations.
Our
auditors have questioned our ability to continue operations as a “going
concern.” Investors may lose all of their investment if we are unable to
continue operations and generate revenues.
We hope
to obtain significant revenues from future product sales. In the
absence of significant sales and profits, we may seek to raise additional funds
to meet our working capital needs principally through the additional sales of
our securities. However, we cannot guaranty that we will be able to
obtain sufficient additional funds when needed, or that such funds, if
available, will be obtainable on terms satisfactory to us. As a result, our
auditors believe that substantial doubt exists about our ability to continue
operations.
6
Risks Related to Owning Our
Common Stock
Our
officers, directors and principal shareholders own approximately 66.8% of our
outstanding shares of common stock, allowing these shareholders control matters
requiring approval of our shareholders.
Our
officers, director and principal shareholders beneficially own, in the
aggregate, approximately 66.8% of our outstanding shares of common
stock. If the officers, directors and principal shareholders sell all
of their shares that are being registered in this offering, they will own
approximately 21.3% of our outstanding shares of common stock. Such
concentrated control of the company may negatively affect the price of our
common stock. Our officers, directors and principal shareholders can
control matters requiring approval by our security holders, including the
election of directors.
Shares of our common stock may
continue to be subject to price volatility and illiquidity because our shares
may continue to be thinly traded and may never become eligible for trading on a
national securities exchange.
While we
may at some point be able to meet the requirements necessary for our common
stock to be listed on a national securities exchange, we cannot assure you that
we will ever achieve a listing of our common stock on a national securities
exchange. Our shares are currently only eligible for quotation on the
Over-The-Counter Bulletin Board, which is not an exchange. Initial listing on a
national securities exchange is subject to a variety of requirements, including
minimum trading price and minimum public “float” requirements, and could also be
affected by the general skepticism of such markets concerning companies that are
the result of mergers with inactive publicly-held companies. There are also
continuing eligibility requirements for companies listed on public trading
markets. If we are unable to satisfy the initial or continuing eligibility
requirements of any such market, then our stock may not be listed or could be
delisted. This could result in a lower trading price for our common stock and
may limit your ability to sell your shares, any of which could result in you
losing some or all of your investments.
The
market valuation of our business may fluctuate due to factors beyond our control
and the value of your investment may fluctuate correspondingly.
The
market valuation of emerging growth companies, such as us, frequently fluctuate
due to factors unrelated to the past or present operating performance of such
companies. Our market valuation may fluctuate significantly in
response to a number of factors, many of which are beyond our control,
including:
•
changes
in securities analysts’ estimates of our financial performance, although
there are currently no analysts covering our stock;
•
fluctuations
in stock market prices and volumes, particularly among securities of
emerging growth companies;
•
changes
in market valuations of similar companies;
•
announcements
by us or our competitors of significant contracts, new technologies,
acquisitions, commercial relationships, joint ventures or capital
commitments;
•
variations
in our quarterly operating results;
•
fluctuations
in related commodities prices; and
•
additions
or departures of key personnel.
As a
result, the value of your investment in us may fluctuate.
Investors
should not look to dividends as a source of income.
In the
interest of reinvesting initial profits back into our business, we do not intend
to pay cash dividends in the foreseeable future. Consequently, any
economic return will initially be derived, if at all, from appreciation in the
fair market value of our stock, and not as a result of dividend
payments.
Our
common stock may be subject to penny stock regulations which may make it
difficult for investors to sell their stock.
The
Securities and Exchange Commission has adopted rules that regulate broker-dealer
practices in connection with transactions in “penny stocks”. Penny
stocks generally are equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the NASDAQ system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system). The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from those rules, deliver a
standardized risk disclosure document prepared by the Commission, which
specifies information about penny stocks and the nature and significance of
risks of the penny stock market. The broker-dealer also must provide
the customer with bid and offer quotations for the penny stock, the compensation
of the broker-dealer and salesperson in the transaction, and monthly account
statements indicating the market value of each penny stock held in the
customer's account. In addition, the penny stock rules require that,
prior to a transaction in a penny stock not otherwise exempt from those rules,
the broker-dealer must make a special written determination that the penny stock
is a suitable investment for the purchaser and receive the purchaser's written
agreement to the transaction. These disclosure requirements may have
the effect of reducing the trading activity in the secondary market for a stock
that becomes subject to the penny stock rules. If our common stock
becomes subject to the penny stock rules, holders of our shares may have
difficulty selling those shares.
We
are registering 5,600,000 shares of common stock owned by our former officer and
director and our current officers and directors. The selling security holders,
including our officers and directors, may sell all of their shares as soon as
possible, which could significantly decrease the price of our common stock and
reduce our officers’ and directors’ desire to see us succeed.
A large
percentage of the stock owned by the selling security holders, who are our
former and current officers and directors, will be registered by the
registration statement of which this prospectus is a part. The selling security
holders, who are our former and current officers and directors, may sell a large
percentage of their shares immediately after they are registered. In
the event that the selling security holders sell some of their shares, the price
of our common stock could decrease significantly. We cannot assure you that the
officers and directors will not sell some of their shares as soon as they are
registered.
7
Forward Looking
Statements
Information
in this prospectus contains “forward looking statements” which can be identified
by the use of forward-looking words such as “believes”, “estimates”, “could”,
“possibly”, “probably”, “anticipates”, “estimates”, “projects”, “expects”,
“may”, or “should” or other variations or similar words. No
assurances can be given that the future results anticipated by the
forward-looking statements will be achieved. The following matters
constitute cautionary statements identifying important factors with respect to
those forward-looking statements, including certain risks and uncertainties that
could cause actual results to vary materially from the future results
anticipated by those forward-looking statements. Among the key
factors that have a direct bearing on our results of operations are the effects
of various governmental regulations, the fluctuation of our direct costs and the
costs and effectiveness of our operating strategy. Other factors
could also cause actual results to vary materially from the future results
anticipated by those forward-looking statements.
Use of
Proceeds
We will
not receive any of the proceeds from the sale of shares being offered by the
selling security holders.
Determination of Offering
Price
Factors Used to Determine Share
Price. The selling stockholders will determine at what price they may
sell the shares of common stock offered by this prospectus, and such sales may
be made at prevailing market prices, or at privately negotiated prices.
Therefore, the offering price of the shares being offered by the selling
shareholders has no relationship to any established criteria of value, such as
book value or earnings per share.
Dilution
The
shares offered for sale by the selling security holders are already outstanding
and, therefore, do not contribute to dilution.
Selling Security
Holders
The
following table sets forth information concerning the selling security holders
including:
1.
the
number of shares owned by the selling security holders prior to this
offering;
2.
the
total number of shares that are to be offered by the selling security
holders;
3.
the
total number of shares of common stock that will be owned by the selling
security holders upon completion of the offering;
and
4.
the
percentage of common stock that will be owned by the selling security
holders upon completion of the offering if all of the offered shares are
sold by the selling security
holders.
The
shares offered for sale constitute all of the shares known to us to be
beneficially owned by the selling security holders. The selling security holders
have no position or office with us, nor any material relationship with us,
except as listed below. The selling security holders are not broker-dealers or
affiliates of broker-dealers to our knowledge.
Name
of Selling Security Holder
Amount
of Shares of Common Stock Owned by Selling Security Holder Before the
Offering
Amount
of Shares of Common Stock to be Offered by the Selling Security
Holder
Amount
of Shares of Common Stock Owned by Selling Security Holder After the
Offering
Percentage
of Common Stock Owned if all of the Offered Shares Are
Sold
Roger
Corriveau (1)
6,000,000
5,000,000
1,000,000
8.1%
Ghislaine
St-Hilaire (2)
1,500,000
500,000
1,000,000
8.1%
Gilbert
Pomerleau (3)
720,000
100,000
620,000
5.0%
Total
8,220,
000
5,600,000
2,620,000
21.3%
(1) Roger
Corriveau is our former officer and director.
(2)
Ghislaine St-Hilaire, our vice-president, secretary and director, who owns
1,500,000 shares, is the common law spouse of Roger Corriveau, our
former officer and director, who owns 6,000,000 shares. Therefore,
each of Ghislaine St-Hilaire and Roger Corriveau may be considered to
beneficially own 7,500,000 shares of common stock, which equals approximately
61.0% of our issued and outstanding common stock.
(3)
Gilbert Pomerleau is our vice president, chief financial officer and one of our
directors.
8
Plan of
Distribution
The
offering by the selling shareholders may start as soon as this registration
statement is declared effective. The selling shareholders
may offer all or part of their shares for resale from time to time through
public or private transactions, at either prevailing market prices or at
privately negotiated prices. The selling security holders may sell our common
stock in the over-the-counter market, or on any securities exchange on which our
common stock is or becomes listed or traded, in negotiated transactions or
otherwise. The shares will not be sold in an underwritten public offering. The
shares may be sold directly or through brokers or dealers. The methods by which
the shares may be sold include:
·
purchases
by a broker or dealer as principal and resale by such broker or dealer for
its account;
·
ordinary
brokerage transactions and transactions in which the broker solicits
purchasers; and
·
privately
negotiated transactions.
Brokers
and dealers engaged by selling security holders may arrange for other brokers or
dealers to participate. Brokers or dealers may receive commissions or
discounts from selling security holders, or, if any such broker-dealer acts as
agent for the purchaser of such shares, from such purchaser, in amounts to be
negotiated. Broker-dealers may agree with the selling security holders to sell a
specified number of such shares at a stipulated price per share, and, to the
extent such broker-dealer is unable to do so acting as agent for a selling
security holder, to purchase as principal any unsold shares at the price
required to fulfill the broker-dealer commitment to such selling security
holder. Broker-dealers who acquire shares as principal may resell those shares
from time to time in the over-the-counter market or otherwise at prices and on
terms then prevailing or then related to the then-current market price or in
negotiated transactions and, in connection with such resales, may receive or pay
commissions. In the event that a broker-dealer is added as a formal participant
to the marketing effort of the selling security holders, we will file a post
effective amendment to disclose such event.
The
selling security holders and any broker-dealers participating in the
distributions of the shares may be deemed to be “underwriters” within the
meaning of Section 2(11) of the Securities Act of 1933. Any profit on the sale
of shares by the selling security holders and any commissions or discounts given
to any such broker-dealer may be deemed to be underwriting commissions or
discounts. The shares may also be sold pursuant to Rule 144 under the Securities
Act of 1933 beginning one year after the shares were issued.
We have
filed the registration statement, of which this prospectus forms a part, with
respect to the sale of the shares by the selling security holders.
Under the
Securities Exchange Act of 1934 and the regulations thereunder, any person
engaged in a distribution of the shares of our common stock offered by this
prospectus may not simultaneously engage in market making activities with
respect to our common stock during the applicable "cooling off" periods prior to
the commencement of such distribution. Also, the selling security holders are
subject to applicable provisions which limit the timing of purchases and sales
of our common stock by the selling security holders.
We will
pay all expenses in connection with the registration and sale of our common
stock. None of the expenses will be paid by the selling security holders. The
estimated expenses of issuance and distribution for all the shares being
registered by this registration statement are set forth below.
Registration
Fees
Approximately
$124.99
Transfer
Agent Fees
Approximately
$250.00
Costs
of Printing and Engraving
Approximately
$500.00
Legal
Fees
Approximately
$10,000.00
Accounting
Fees
Approximately
$5,000.00
We have
informed the selling security holders that, during such time as they may be
engaged in a distribution of any of the shares we are registering by this
registration statement, they are required to comply with Regulation M. In
general, Regulation M precludes any selling security holder, any affiliated
purchasers and any broker-dealer or other person who participates in a
distribution from bidding for or purchasing, or attempting to induce any person
to bid for or purchase, any security which is the subject of the distribution
until the entire distribution is complete. Regulation M defines a
“distribution” as an offering of securities that is distinguished from ordinary
trading activities by the magnitude of the offering and the presence of special
selling efforts and selling methods. Regulation M also defines a
“distribution participant” as an underwriter, prospective underwriter, broker,
dealer, or other person who has agreed to participate or who is participating in
a distribution.
Regulation
M prohibits any bids or purchases made in order to stabilize the price of a
security in connection with the distribution of that security, except as
specifically permitted by Rule 104 of Regulation M. These stabilizing
transactions may cause the price of our common stock to be more than it would
otherwise be in the absence of these transactions. We have informed the selling
security holders that stabilizing transactions permitted by Regulation M allow
bids to purchase our common stock if the stabilizing bids do not exceed a
specified maximum. Regulation M specifically prohibits stabilizing that is the
result of fraudulent, manipulative, or deceptive practices. Selling
security holders and distribution participants are required to consult with
their own legal counsel to ensure compliance with Regulation M.
Legal
Proceedings
There are
no legal actions pending against us nor are any legal actions contemplated by us
at this time.
9
Directors, Executive
Officers, Promoters and Control Persons
The
following table sets forth information regarding our executive officer and
director.
Name
Age
Position
Dr.
Gilles Chaumillon
46
president,
chief executive officer
Gilbert
Pomerleau
43
vice
president, chief financial officer, director
Ghislaine
St-Hilaire
59
vice
president and secretary, director
Dr. Gilles
Chaumillon. Dr. Gilles Chaumillon has been the
president and chief executive officer since April 22, 2009. From 2004 to 2008,
Dr. Gilles Chaumillon served as Senior Director, Project Management for
BioSyntech Inc., a biotechnology company located in Canada and listed on the TSX
stock exchange. Prior to 2004, he was General Manager and Business Development
Director of a Contract Research Organization. He began his career at
Æterna-Zentaris as Director in charge of collaboration network and process
development. His experience encompasses product and process development,
manufacturing and also business development, strategic planning and
commercialisation. Dr. Chaumillon is a member of Quebec MBA Association (AMBAQ)
and also an active member Quebec Biotech Association (BIOQUEBEC) where he is
president of the membership committee. Dr. Chaumillon holds a PhD degree in
marine biology from Laval University of Québec City and a MBA in Biotech
Management from University of Quebec at Montreal. Dr. Chaumillon is not an
officer or director of any other reporting company.
Gilbert Pomerleau. Mr.
Pomerleau has been vice president, chief financial officer and a director since
our inception. In 1980, Mr. Pomerleau started his career in his family business
of breeding poultry, pigs and cows. During this time, Mr. Pomerleau developed an
interest for new and innovative breeding techniques. The family owned farm
produces more than 165,000 chickens per year. Mr. Pomerleau initiated the use of
the marine based natural supplements in the daily diet of 30,000 chickens. Mr.
Pomerleau is not a director or officer of any other reporting
company.
Ghislaine St-Hilaire.
Ghislaine St-Hilaire has been a vice-president, secretary and a director since
our inception. She is responsible for the daily management of our operations.
Ghislaine St-Hilaire has been working in business management for the past thirty
years, with small and medium size businesses, supporting them with her expertise
in accounting. She has worked in international business with the Canadian
International Development Agency. Mrs. St-Hilaire is not a director of any other
reporting company.
All
directors hold office until the completion of their term of office, which is not
longer than one year, or until their successors have been elected. As
such, Gilbert Pomerleau and Ghislaine St-Hilaire will continue to serve as
directors until replacements are appointed, or until shareholders elect new
directors. All officers are appointed annually by the board of directors and,
subject to employment agreements (which do not currently exist) serve at the
discretion of the board. Currently, directors receive no
compensation.
There are
no family relationships between any of our officers or
directors. There are no orders, judgments, or decrees of any
governmental agency or administrator, or of any court of competent jurisdiction,
revoking or suspending for cause any license, permit or other authority to
engage in the securities business or in the sale of a particular security or
temporarily or permanently restraining any of our officers or directors from
engaging in or continuing any conduct, practice or employment in connection with
the purchase or sale of securities, or convicting such person of any felony or
misdemeanor involving a security, or any aspect of the securities business or of
theft or of any felony. Nor are any of the officers or directors of any
corporation or entity affiliated with us so enjoined.
Security Ownership of
Certain Beneficial Owners and Management
The
following table sets forth certain information regarding the beneficial
ownership of our common stock as of March 18, 2009, by each person or entity
known by us to be the beneficial owner of more than 5% of the outstanding shares
of common stock, each of our directors and named executive officers, and all of
our directors and executive officers as a group.
All
directors and named executive officers as a group
2,220,000
shares
18.1%*
* Figures
may vary due to rounding.
(1)
Includes 220,000 shares of common stock held by Gestion Gilbert Pomerleau
Inc., which is controlled by Gilbert Pomerleau, our vice president, chief
financial officer and one of our directors. Gilbert Pomerleau is
deemed to beneficially own those shares.
(2)
Ghislaine St-Hilaire, our vice-president, secretary and director, who owns
1,500,000 shares, is the common law spouse of Roger Corriveau, our former
officer and director, who owns 6,000,000 shares. Therefore, each of
Ghislaine St-Hilaire and Roger Corriveau may be considered to beneficially own
7,500,000 shares of common stock, which equals approximately 61.0% of our issued
and outstanding common stock.
Beneficial
ownership is determined in accordance with the rules of the Securities and
Exchange Commission and generally includes voting or investment power with
respect to securities. In accordance with Securities and Exchange
Commission rules, shares of our common stock which may be acquired upon exercise
of stock options or warrants which are currently exercisable or which become
exercisable within 60 days of the date of the table are deemed beneficially
owned by the optionees. Subject to community property laws, where applicable,
the persons or entities named in the table above have sole voting and investment
power with respect to all shares of our common stock indicated as beneficially
owned by them.
10
Changes in
Control. Our management is not aware
of any arrangements which may result in “changes in control” as that term is
defined by the provisions of Item 403(c) of Regulation S-K.
Audit Committee. Presently,
the board of directors acts as the audit committee. The board of directors does
not have an audit committee financial expert. The board of directors has not yet
recruited an audit committee financial expert to join the board of directors
because we have only recently commenced a significant level of financial
operations.
Description of Capital Stock.
We are authorized to issue 75,000,000 shares of $.001 par value common
stock. As of April 22, 2009, there were 12,299,350 shares
of common stock that were issued and outstanding.
Common Stock. Each
shareholder of our common stock is entitled to a pro rata share of cash
distributions made to shareholders, including dividend payments. The
holders of our common stock are entitled to one vote for each share of record on
all matters to be voted on by shareholders. There is no cumulative voting with
respect to the election of our directors or any other matter. Therefore, the
holders of more than 50% of the shares voted for the election of those directors
can elect all of the directors. The holders of our common stock are entitled to
receive dividends when, as and if declared by our Board of Directors from funds
legally available therefore. Cash dividends are at the sole discretion of our
Board of Directors. In the event of our liquidation, dissolution or winding up,
the holders of common stock are entitled to share ratably in all assets
remaining available for distribution to them after payment of our liabilities
and after provision has been made for each class of stock, if any, having any
preference in relation to our common stock. Holders of shares of our common
stock have no conversion, preemptive or other subscription rights, and there are
no redemption provisions applicable to our common stock.
Dividend Policy. We have never
declared or paid a cash dividend on our capital stock. We do not expect to pay
cash dividends on our common stock in the foreseeable future. We currently
intend to retain our earnings, if any, for use in our business. Any dividends
declared in the future will be at the discretion of our board of directors and
subject to any restrictions that may be imposed by our lenders.
Our
Articles of Incorporation and our Bylaws do not contain any other provisions
which were included to delay, defer, discourage or prevent a change in
control.
Interest of Named Experts
and Counsel
No
“expert” or our “counsel” was hired on a contingent basis, or will receive a
direct or indirect interest in us, or was a promoter, underwriter, voting
trustee, director, officer, or employee of the company, at any time prior to the
filing of this registration statement.
Disclosure of Commission
Position on Indemnification for Securities Act Liabilities
Article
Twelfth of our Articles of Incorporation provides, among other things, that our
officers and directors shall not be personally liable to us or our shareholders
for monetary damages for breach of fiduciary duty as an officer or a director,
except for liability:
·
for
acts or omissions not in good faith or which involve intentional
misconduct, fraud or a knowing violation of law;
or
·
for
unlawful payments of dividends or unlawful stock purchase or redemption by
us.
Accordingly,
our directors may have no liability to our shareholders for any mistakes or
errors of judgment or for any act of omission, unless the act or omission
involves intentional misconduct, fraud, or a knowing violation of law or results
in unlawful distributions to our shareholders.
Article V
of our Bylaws also provides that our officers and directors shall be indemnified
and held harmless by us to the fullest extent permitted by the provisions of
Section 78.7502 of the Nevada Revised Statutes.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to our directors, officers and controlling persons pursuant to the
foregoing 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 that act and is, therefore, unenforceable.
Organization Within Last
Five Years
Transactions with
Promoters. Roger Corriveau, Gilbert Pomerleau and Ghislaine
St-Hilaire were our promoters. In May 2007, we issued 6,000,000 shares of
our common stock to Roger Corriveau, 500,000 shares of our common stock to
Gilbert Pomerleau, and 1,500,000 shares of our common stock to Ghislaine
St-Hilaire for a total cash consideration of $8,000, or $0.001 per share. There
is no other information that would be required to be disclosures by Item 401(d)
or Item 404(d) of Regulation S-K.
11
Description
of Business
Our Background. We were
incorporated under the laws of the State of Nevada on March 27,2007.
Our Business. We are a
manufacturer of a premix product for the poultry industry called Nutra-Animal.
Nutra-Animal is an anti-oxidant containing wheat middlings, vitamin E, calcium
carbonate, shrimp flour, sodium, selenite and fish oil. We have
conducted studies that we believe demonstrate the positive impact of
Nutra-Animal on growth, reinforcement of the immune system, as well as the ratio
of net weight of flesh. We plan to expand the chicken feed product line in the
next twelve months. We also plan to conduct additional tests to improve and
adjust our products for the different types of poultry. We hope to conduct
studies on pigs and calves beginning in 2009.
Our Supplier. Our supplier for
the raw material used in our Nutra-Animal blend is called Oceanutrasciences,
Inc., (“Ocean”) and is also known as Aqua-Biokem. Our first order
of raw materials was purchased from Natural Solutions International, a private
company controlled by our Roger Corriveau, our former officer and director,
which purchased the materials from Ocean. However, on September 11,2008, we entered into a License Agreement (“Agreement”) with Ocean
Inc. The Agreement grants us an exclusive license to market and sell
Ocean’s Nutra-Pro 80-20 animal feed product under Ocean’s trademarks in the
sales territory of North America. The terms of the license agreement
provide for our payment to Ocean of an aggregate of CDN$150,000, with payments
of CDN$50,000 on each of these dates: July 31, 2008, October 31, 2008 and
December 31, 2008. To date, we have paid CDN$75,000, and Ocean
has agreed to defer payment of the balance of CDN$75,000 until Ocean provides us
with the detailed formulation of the product formula and production process. We
have also agreed to purchase the product under this Agreement in agreed-upon
amounts during the term of the Agreement, beginning with 1,250kg the first year
of the Agreement.
A copy of
that Agreement is attached to our Current Report on Form 8-K as filed with the
Securities and Exchange Commission on September 16, 2008, as Exhibit 10.1 and is
incorporated herein by reference. This brief description of the
Agreement is not intended to be complete and is qualified in its entirety by
reference to the full text of the Agreement.
We may
need to develop relationships with additional suppliers so that we will have
alternative suppliers in the event that our current supplier does not desire or
is unable to supply a sufficient amount of products to meet our customers’
requirements. We also plan to enter arrangements with other suppliers to
diversify our product offerings.
Our Target Markets and Marketing
Strategy. We believe that our primary market is chicken
integrators as well as chicken feed manufacturers in Canada. We hope to expand
our operations in the United States and, to that extent, we have initiated talks
with various customers in the United States. Our management has started
approaching major chicken integrators for them to test the product, as those
approached have expressed the wish to conduct some in house tests.
We intend
aggressively market and promote the “Nutra-Animal” brand. We have initiation pig
farms to educate their clients on new product developments and improvements to
existing products. We intend to provide educational seminars in chicken breeding
regions to explain the benefits of Nutra-Animal and educate the farmers to
properly prepare and mix the various feed components. As we market and sell
directly to chicken integrators, we are able to collect and analyze data from
those parties which assists in preparation and design of new products. We also
plan to attend agricultural conventions that take place in the market areas
where we currently conduct business as well as in provinces that we expect to
enter. We may also place advertisements and promotional pieces in agricultural
trade journals.
Growth Strategy. Our primary
objective is to become one of the dominant providers of chicken pre-mix, to
offer the chicken industry the possibility to raise healthier chickens and
obtain a better yield on the market. We originally concentrated our efforts in
the province of Quebec, Canada. Recently, we started conducting some tests with
integrators in the province of Ontario and Western Canada. We also recently
started using a similar strategy in the United States and plan to market our
products in the United States in the early 2009.
We
believe that we will be able to generate additional revenues by increasing the
size of our product line, thereby increasing the number of pre-mixes or feeds
that we can sell. We intend to look for opportunities to produce other types of
pre-mixes or feeds. We also believe that there may be opportunities to enter
into joint venture agreements with companies that produce other pre-mixes or
feeds other than our own. In addition to continually developing and evaluating
new pre-mixes or feeds, we may consider the acquisition of other companies
operating in a similar fashion.
Our Website. Our
websitewww.bio-solutionscorp.com
is under construction and will provide scientific information on the products
sold by the Company as well as new products being tested. Our website will also
provide a description of our business together with our contact information
including our address, telephone number and e-mail address. We also believe that
we can use our website to facilitate sales of our products as well as increase
brand awareness.
Our Competition. The animal
feed industry is significantly competitive. We have competitors that have been
providing traditional animal feed, including chicken pre-mix, for many years and
have more resources than we do. Many of those competitors have significantly
greater financial, human and marketing resources than we have. As a result,
these competitors may be able to devote greater resources to the development,
promotion, sale and support of their products than we do. If we do not compete
effectively with current and future competitors, we may be unable to secure
client contracts, or we may be required to reduce our rates in order to compete
effectively. This could result in a reduction in our revenues, resulting in
lower earnings or operating losses.
Many of
our competitors have substantially greater financial, technical, managerial,
marketing and other resources than we do and they may compete more effectively
than we can. We anticipate that competition will increase in the future. We may
not successfully compete in any market in which we conduct or may conduct
operations.
Although
we believe our product is unique, other products containing anti-oxidants,
mainly from Vitamin E and selenium are available on the market. We have spent a
significant amount of time and energy researching and conducting studies and
tests of our Nutra-Animal product. We hope that provides an advantage for us
over our competitors. In addition, our ability to compete effectively will be
dependent on our management establishing close relationships with a number of
keys clients to constantly work with the client to improve our
products.
12
Government Regulation. Through
the laws and regulations of Canada and the provincial governments of Quebec and
Ontario, our products and services are subject to material regulation by
governmental agencies responsible for the agricultural and commerce industries.
As such, business and company registrations, production license, and our
products are certified and must be in compliance with the laws and regulations
of provincial and other local governments and industry agencies. Our
Nutra-Animal pre-mix has been approved for sale by the Canadian Food Inspection
Agency under No. 982676 and we believe we are authorized to sell Nutra-Animal in
the United States.
We are
also subject to federal, state and local laws and regulations generally applied
to businesses, such as payroll taxes on the state and federal levels. We believe
that we are in conformity with all applicable laws in Nevada and the United
States.
Our Research and Development.
Our research and clinical studies have been conducted by Mr. Daniel Venne, a
veterinarian, originally on the premises of our director Gilbert Pomerleau and
then on the premises of third parties. To maintain a competitive advantage in
the marketplace and keep pace with current developments, we will need to engage
in continuous research and development.
Intellectual Property. We do
not presently own any copyrights, patents, trademarks, licenses, concessions or
royalties, and we may rely on certain proprietary technologies, trade secrets,
and know-how that are not patentable. We own the trademark for "NutraAnimal" in
Canada.
As
discussed herein, in August 2008, we entered into the Agreement with Ocean
granting us an exclusive license to market and sell Ocean’s Nutra-Pro 80-20
animal feed product under Ocean’s trademarks in the sales territory of North
America. Ocean has agreed to provide us with the detailed
formulation of the product and the production process.
Our
success will depend on our ability to continue to develop and pre-mix and feed
products. We currently have not applied for patents for our products or
formulas, as our management believes an application for such patents would
result in public knowledge of our proprietary technology and formulas. As we do
not have patent protection for this technology or formula, we may not be able to
protect our rights to this intellectual property, if our competitors discover or
illegally obtain this technology or formula. Our inability to protect our rights
to this intellectual property may adversely affect our ability to prevent
competitors from using our products and developments.
We own
the Internet domain name “www.bio-solutions-corp.com” Under current domain name
registration practices, no one else can obtain an identical domain name, but
someone might obtain a similar name, or the identical name with a different
suffix, such as “.org”, or with a country designation. The regulation of domain
names in the United States and in foreign countries is subject to change, and we
could be unable to prevent third parties from acquiring domain names that
infringe or otherwise decrease the value of our domain names.
Employees. As of April 22,2009, we have one full-time employee. We believe we may need to hire two
additional employees in the next six months so that we can service the orders.
From time-to-time, we anticipate that we may use the services of independent
contractors and consultants to support our expansion and business
development.
Facilities. Our executive,
administrative and operating offices are located at 14517, Joseph Marc Vermette,
Mirabel (Québec), Canada J7J 1X2. Ghislaine St-Hilaire, our vice
president, secretary and director, provides approximately 200 square feet
of office space and 250 feet of warehousing space at no charge. Our financial
statements reflect the fair market value of that space which is approximately
$500 per month. Ms. St-Hilaire does not expect to be reimbursed for
providing these facilities. That amount has been included in the financial
statements as additional capital contribution by Ms. St-Hilaire. We do not have
a lease or written lease or sublease agreement with Ms. St-Hilaire. We believe
that our facilities are adequate for our needs and that additional suitable
space will be available on acceptable terms as required. We do not own any real
estate.
Management's Discussion and
Analysis of Financial Condition and Results of Operations
Critical Accounting Policy and
Estimates. Our Management’s Discussion and Analysis of Financial
Condition and Results of Operations section discusses our financial statements,
which have been prepared in accordance with accounting principles generally
accepted in the United States of America. The preparation of these financial
statements requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. On an on-going basis, management evaluates its estimates and
judgments, including those related to revenue recognition, accrued expenses,
financing operations, and contingencies and litigation. Management bases its
estimates and judgments on historical experience and on various other factors
that are believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying value of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions. The most
significant accounting estimates inherent in the preparation of our financial
statements include estimates as to the appropriate carrying value of certain
assets and liabilities which are not readily apparent from other
sources.
These
accounting policies are described at relevant sections in this discussion and
analysis and in the notes to the financial statements included elsewhere in this
Registration Statement and in our Annual Report on Form 10-K for the year ended
December 31, 2008.
Revenues. We had revenues of
$51,647 for the year ended December 31, 2008, and revenues of $37,951 for the
period from inception on March 27, 2007 to December 31, 2007. We hope
to generate greater revenues as we continue operations and implement our
business plan. For the year ended December 31, 2008, we had
$62,350 in total cost of revenues. This is comprised of $68,936 in beginning
inventory, $69,793 in purchases, less $76,379 in ending inventory, resulting in
a gross loss of $10,703. This in comparison to the period from
inception on March 27, 2007 through December 31, 2007, where we had zero in
beginning inventory, $85,081 in purchases, less $68,936 in ending inventory,
resulting in total costs of revenues of $16,145 resulting in a gross profit of
$21,806.
Operating
Expenses. For the year ended December 31, 2008, we had total
operating expenses of $514,180. This included professional expenses of $432,786,
accounting fees of $9,999, general and administrative expenses of $59,118, and
amortization of $12,277. The professional and consulting fees are comprised of
legal and consulting expenses related to becoming a public company. We expect
that we will continue to incur significant legal and accounting expenses related
to being a public company. This is in comparison to the period from
March 27, 2007 (inception) through December 31, 2007, where we had total
operating expenses of $86,459, which were comprised of professional fees of
$49,400, accounting fees of $20,200 and general and administrative expenses of
$16,859.
Net Income or
Loss. For the year ended December 31, 2008, and after
interest expense of $4,406, we had a net loss of $529,289, with a net loss per
share of $0.06. In comparison, for the period from March 27, 2007
(inception) through December 31, 2007, we had a net loss of $64,653 and $0.01
per share. We expect to continue to incur net losses for the foreseeable future
and until we generate significant revenues.
Liquidity and Capital
Resources. We had cash of $810, accounts receivable of $6,240 and
inventory of $76,379 as of December 31, 2008, which equals our total current
assets of $83,429 as of that date. With our other asset of $111,180 represented
by a license, net of amortization, our total assets as of December 31, 2008 were
$194,609. In comparison, as of December 31, 2007, we had cash of $7,990,
accounts receivable of $2,522 and inventory of $68,936, all of which equals are
current total assets of $79,448 as of that date. Our current liabilities were
$14,281, as of December 31, 2007, all of which was represented by accounts and
accrued expenses.
Our
current liabilities were $169,040 as of December 31, 2008, which was represented
by accounts payable and accrued expenses of $126,107 short term loans of
$38,966, and $3,967 due to an officer. In comparison, as of December 31, 2007,
our current liabilities were $14,281, all of which was represented by accounts
and accrued expenses.
During
the quarter ended December 31, 2008, we retired certain short term loans
totaling $125,000 which were from individuals/companies for amounts ranging
between $5,000 and $45,000 (CD$) each and were provided to us for working
capital. These amounts are short-term in nature as they were due on demand, and
we have accrued interest at 5% per annum. Additionally, this amount was
converted into 1,041,348 shares of common stock before December 31,2008. Our total liabilities were also $169,040 as of December 31,2008, as compared to total liabilities of $14,281 as of December 31,2007. We had no other liabilities and no long term commitments or
contingencies as of December 31, 2008 and as of December 31, 2007.
Pursuant
to a private placement offering, on December 18, 2008, we issued an aggregate of
421,502 shares of our restricted common stock at a price of $0.20 USD per share
in exchange for cash of $25,000 USD, and $59,725 CDN raised from July to
September 2008. Those funds were used for working capital. We will need to raise
additional capital to expand our operations to the point at which we are able to
operate profitably.
During
2009, we expect that the legal and accounting costs of being a public company
will continue to impact our liquidity and we will need to obtain funds to pay
those expenses. Other than the anticipated increases in legal and accounting
costs due to the reporting requirements of being a reporting company, we are not
aware of any other known trends, events or uncertainties, which may affect our
future liquidity.
Our
auditors have questioned our ability to continue operations as a “going
concern.” We hope to obtain significant revenues from future product
sales. In the absence of significant sales and profits, we will seek
to raise additional funds to meet our working capital needs principally through
the additional sales of our securities. However, we cannot guaranty
that we will be able to obtain sufficient additional funds when needed, or that
such funds, if available, will be obtainable on terms satisfactory to us. As a
result, our auditors believe that substantial doubt exists about our ability to
continue operations.
14
Our Plan of Operation for the Next
Twelve Months. To effectuate our business plan during the next
twelve months, our main focus is to secure intellectual property on existing
products as well as seeking rights on complementary products. With the second
phase of tests being presently conducted by one of the major chicken integrator
in the Canada, the first phase having been successful, we should be able to
start selling our product across Canada in the second half of 2009. We are
currently pursuing additional accounts by researching and contacting medium to
large size integrators in the United States to convince them to conduct in house
tests on our products. We are developing new updated sales and marketing
materials including brochures describing the products that we provide so that we
can provide a professional appearance to potential clients.
During
the next three to six months, our primary objective is to strengthen our
knowledge of the mode of action of the product to better our positioning in the
market. In addition, we need to increase our client base so we can generate
revenues to support our operations. We need to obtain additional clients as four
customers account for approximately 93% of our revenues. During the next six to
twelve months, we hope to expand our operations, based on the successful testing
by prospective clients. We also hope to finalize a pan Canadian
distribution agreement to increase our presence on the market
We had
cash of $810 as of December 31, 2008. In the opinion of management, our
available funds will not satisfy our working capital requirements for the next
twelve months. Our forecast for the period for which our financial
resources will be adequate to support our operations involves risks and
uncertainties and actual results could fail as a result of a number of factors.
Besides generating revenue from our current operations, we will need to raise
additional capital to expand our operations to the point at which we are able to
operate profitably. Other than anticipated increases in the legal and accounting
costs of becoming a public company, we are not aware of any other known trends,
events or uncertainties, which may affect our future liquidity.
We intend
to pursue capital through public or private financing as well as borrowings and
other sources, such as our officers, directors and principal shareholders. We
cannot guaranty that additional funding will be available on favorable terms, if
at all. If adequate funds are not available, then our ability to
expand our operations may be significantly hindered. If adequate funds are not
available, we believe that our officers, directors and principal shareholders
will contribute funds to pay for our expenses to achieve our objectives over the
next twelve months. However, our officers, directors and principal shareholders
are not committed to contribute funds to pay for our expenses.
We are
not currently conducting any research and development activities, although we
anticipate we may conduct such activities in the next twelve months. We do not
anticipate that we will purchase or sell any significant equipment. In the event
that we expand our customer base, then we may need to hire additional employees
or independent contractors as well as purchase or lease additional
equipment
Off-Balance Sheet Arrangements.
We have no off-balance sheet arrangements.
Description of
Property
Property held by us. As of the
dates specified in the following table, we held no real property. We
do not presently own any interests in real estate.
Our Facilities. Our
executive, administrative and operating offices are located at 14517, Joseph
Marc Vermette, Mirabel (Québec), Canada J7J 1X2. Ghislaine St-Hilaire, our vice
president, secretary and one of our directors, provides approximately 200 square
feet of office space as well as 250 feet of warehousing space at no charge. Our
financial statements reflect the fair market value of that space which is
approximately $500 per month. That amount has been included in the financial
statements as additional capital contribution by Ms. St-Hilaire. We do not have
a lease, written lease or sublease agreement for the premises with Ms.
St-Hilaire. Ms. St-Hilaire does not expect to be reimbursed for providing these
facilities. We believe that our facilities are adequate for our needs and that
additional suitable space will be available on acceptable terms as
required.
15
Certain Relationships and
Related Transactions
Certain Relationships. Roger
Corriveau, our former officer and director, and Ghislaine St-Hilaire may be
considered common law spouses.
Related
Party Transactions.
In May
2007, we issued Roger Corriveau, our former officer and director,
6,000,000 shares, Gilbert Pomerleau 500,000 shares, and Ghislaine St-Hilaire
1,500,000 of our common stock for a total cash consideration of $8,000, or
$0.001 per share.
From
inception to the present, Roger Corriveau, our former officer,
and director, provides approximately 200 square feet of office space, as
well as 250 feet of warehousing space, to us at no charge. Financial statements
reflect as occupancy costs, the fair market value of that space which is
approximately $500 per month. That amount has been included in the financial
statements as additional capital contribution by Mr. Corriveau. As of March 16,2009, Ghislaine St-Hilaire has been providing that space to us.
Our first
order of raw materials was purchased from Natural Solutions International, a
private company controlled by our Roger Corriveau, our former officer and
director. We anticipate that we will continue to purchase goods from Natural
Solutions International until we negotiate a direct supply agreement with Ocean
for the direct supply of products. For the year ended December 31, 2008 and the
period March 27, 2007 through December 31, 2007, we incurred $89,820 and $73,900
respectively in inventory and other expenses to this company and $7,882 and
$2,933 in rent. Approximately $11,905 is owed to this company at December 31,2008 which is included in accounts and accrued expenses payable.
In
addition, the formula for Nutra-Animal was developed by Roger Corriveau, our
former officer, and director. Mr. Corriveau has agreed to allow us to
use that formula at no charge, although we do not have a formal agreement or
arrangement relating to the use of that formula. Beginning in August
2008, we have entered into an exclusive license Agreement
described herein with Ocean to market and sell its Nutra-Pro 80-20 animal feed
product under Ocean’s trademarks in the sales territory of North America, so
that we are no longer dependent on Mr. Corriveau’s company as a
supplier.
We were
advanced $3,967 from officers during the year ended December 31, 2008. These
amounts are short-term in nature as they are due on demand, and we have not been
charged interest. We anticipate repayment of these advances within the next
twelve months.
There
have been no other related party transactions, or any other transactions or
relationships required to be disclosed pursuant to Item 404 of Regulation
S-K.
With
regard to any future related party transaction, we plan to fully disclose any
and all related party transactions, including, but not limited to, the
following:
·
disclose
such transactions in prospectuses where
required;
·
disclose
in any and all filings with the Securities and Exchange Commission, where
required;
·
obtain
disinterested directors consent;
and
·
obtain
shareholder consent where required.
Market for Common Equity and
Related Stockholder Matters
Reports to Security
Holders. We are a reporting company with the Securities and
Exchange Commission. The public may read and copy any materials filed with the
Securities and Exchange Commission at the Security and Exchange Commission’s
Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The
public may also obtain information on the operation of the Public Reference Room
by calling the Securities and Exchange Commission at
1-800-SEC-0330. The Securities and Exchange Commission maintains an
Internet site that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the Securities and
Exchange Commission. The address of that site is
http://www.sec.gov.
As
of March 18, 2009, there were 56 record holders of our common
stock.
There are
no outstanding shares of our common stock which can be sold pursuant to Rule
144. There are no outstanding options or warrants to purchase, or securities
convertible into, shares of our common stock. We have not agreed to register for
sale any shares of common stock held any of our shareholders.
There
have been no cash dividends declared on our common stock. Dividends
are declared at the sole discretion of our Board of Directors.
No Equity Compensation Plan.
We do not have any securities authorized for issuance under any equity
compensation plan. We also do not have an equity compensation plan
and do not plan to implement such a plan.
16
Recent Sales of Unregistered
Securities. There have been no sales of unregistered securities within
the last three (3) years which would be required to be disclosed pursuant to
Item 701 of Regulation S-K, except for the following:
In May
2007, we issued Roger Corriveau, our former officer and director, 6,000,000
shares, Gilbert Pomerleau 500,000 shares, and Ghislaine St-Hilaire 1,500,000 of
our common stock for a total cash consideration of $8,000, or $0.001 per share.
The shares were issued in a transaction which we believe satisfies the
requirements of that certain exemption from the registration and prospectus
delivery requirements of the Securities Act of 1933, as amended, which exemption
is specified by the provisions of Section 5 of that act and Regulation
S.
From June
to September 2007, we issued 1,286,500 shares of our common stock for $0.10 per
share. The gross proceeds to us were $128,650.00. The shares were issued in a
transaction which we believe satisfies the requirements of that certain
exemption from the registration and prospectus delivery requirements of the
Securities Act of 1933, as amended, , which exemption is specified by the
provisions of Section 5 of that act and Regulation S.
Pursuant
to a private placement offering, on December 18, 2008, we issued an aggregate of
421,502 shares of our restricted common stock at a price of $0.20 USD per share
in exchange for cash of $25,000 USD, and $59,725.00 CDN raised from July to
September 2008, as reported in
our most recent quarterly report on Form 10-Q. The shares were issued
to a total of seven purchasers in transactions which we believe satisfies the
requirements of that exemption from the registration and prospectus delivery
requirements of the Securities Act of 1933, which exemption is specified by the
provisions of Section 5 of that act and Regulation S promulgated pursuant to
that act by the Securities and Exchange Commission. The proceeds were used for
working capital. The amount was reflected as a liability for
stock to be issued on the balance sheet as of the quarter ending September 30,2008 since we did not issue the shares at the time of subscription.
To
convert outstanding loans to stock, on December 18, 2008, we issued an aggregate
of 916,343 shares of our common stock to certain holders of certain outstanding
promissory notes in the amount of $115,000 CDN, who elected to convert the
amounts due at the conversion price of $0.12 USD per share. We issued
an aggregate of 124,998 shares of our common stock to certain holders of certain
outstanding promissory notes in the amount of $15,000 USD, who elected to
convert the amounts due at the conversion price of $0.12 USD per
share. The shares were issued in transactions which we believe
satisfies the requirements of that exemption from the registration and
prospectus delivery requirements of the Securities Act of 1933, which exemption
is specified by the provisions of Section 5 of that act and Regulation S
promulgated pursuant to that act by the Securities and Exchange Commission. The
original promissory notes were short term loans for amounts ranging between
$5,000 and $45,000 (CD$) each and were provided to us for working
capital.
On
October 30, 2008, we issued to 1,550,000 shares of common stock to three
consultants in exchange for services provided to us, which
were valued at $310,000 or $0.20 per share. The shares were issued
in transactions which we believe satisfies the requirements of that exemption
from the registration and prospectus delivery requirements of the Securities Act
of 1933, which exemption is specified by the provisions of Section 5 of that act
and Regulation S promulgated pursuant to that act by the Securities and Exchange
Commission.
Penny stock
regulation. Shares of our common stock will probably be
subject to rules adopted by the Securities and Exchange Commission that regulate
broker-dealer practices in connection with transactions in “penny
stocks.” Penny stocks are generally equity securities with a price of
less than $5.00, except for securities registered on certain national securities
exchanges or quoted on the NASDAQ system, provided that current price and volume
information with respect to transactions in those securities is provided by the
exchange or system. The penny stock rules require a broker-dealer,
prior to a transaction in a penny stock not otherwise exempt from those rules,
deliver a standardized risk disclosure document prepared by the Securities and
Exchange Commission, which contains the following:
·
a
description of the nature and level of risk in the market for penny stocks
in both public offerings and secondary
trading;
·
a
description of the broker’s or dealer’s duties to the customer and of the
rights and remedies available to the customer with respect to violation to
such duties or other requirements of securities’
laws;
·
a
brief, clear, narrative description of a dealer market, including “bid”
and “ask” prices for penny stocks and the significance of the spread
between the “bid” and “ask” price;
·
a
toll-free telephone number for inquiries on disciplinary
actions;
·
definitions
of significant terms in the disclosure document or in the conduct
of trading in penny stocks;
and
·
such
other information and is in such form, including language, type, size and
format, as the Securities and Exchange Commission shall require by rule or
regulation.
Prior to
effecting any transaction in penny stock, the broker-dealer also must provide
the customer the following:
·
the
bid and offer quotations for the penny
stock;
·
the
compensation of the broker-dealer and its salesperson in the
transaction;
·
the
number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the market
for such stock; and
·
monthly
account statements showing the market value of each penny stock held in
the customer’s account.
In
addition, the penny stock rules require that prior to a transaction in a penny
stock not otherwise exempt from those rules, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser’s written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitably
statement. These disclosure requirements may have the effect of
reducing the trading activity in the secondary market for a stock that becomes
subject to the penny stock rules. Holders of shares of our common
stock may have difficulty selling those shares because our common stock will
probably be subject to the penny stock rules.
17
Executive
Compensation
Any
compensation received by our officers, directors, and management personnel will
be determined from time to time by our Board of Directors. As
of March 18, 2009, our directors and officers are not paid any
compensation. They are nevertheless reimbursed for their reasonable expenses
incurred upon presentation of the appropriate documentary evidence.
Summary Compensation
Table. The table set forth below summarizes the annual and
long-term compensation for services in all capacities to us payable to our chief
executive officer and our other executive officers for the period from March 27,2007 (inception) to December 31, 2008. Our Board of Directors may
adopt an incentive stock option plan for our executive officers which would
result in additional compensation.
Annual
Compensation
Long
Term Compensation
Name
and Principal Position
Year
Salary
($)
Bonus
($)
Other
Annual Compensation ($)
Awards
Payouts
All
Other Compensation
Restricted
Stock Awards ($)
Securities
Underlying Options/SARs (#)
LTIP
Payouts ($)
Roger
Corriveau former officer, and director
2008
None
None
None
None
None
None
None
Gilbert
Pomerleau, chief financial officer, director
2008
None
None
None
None
None
None
None
Ghislaine
St-Hilaire, vice president, secretary, director
Outstanding Equity Awards. As
of December 31, 2008, the following named executive officers had the following
unexercised options, stock that has not vested, and equity incentive plan
awards:
Option Awards
Stock
Awards
Name
Number
of Securities Underlying Unexercised Options
#
Exercisable
#
Un-exercisable
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Options
Option
Exercise Price
Option
Expiration Date
Number
of Shares or Units of Stock Not Vested
Market
Value of Shares or Units Not Vested
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights
Not Nested
Value
of Unearned Shares, Units or Other Rights Not Vested
Roger
Corriveau former officer, and director
0
0
0
0
0
0
0
0
0
Gilbert
Pomerleau, chief financial officer, director
0
0
0
0
0
0
0
0
0
Ghislaine
St-Hilaire, vice president, secretary, director
0
0
0
0
0
0
0
0
0
No Equity Compensation Plan.
We do not have any securities authorized for issuance under any equity
compensation plan.
Stock Options/SAR Grants. No
grants of stock options or stock appreciation rights were made since our date of
incorporation on March 27, 2007.
Long-Term Incentive Plans. There are no
arrangements or plans in which we provide pension, retirement or similar
benefits for directors or executive officers. We do not have any material bonus
or profit sharing plans pursuant to which cash or non-cash compensation is or
may be paid to our directors or executive officers.
Director Compensation. Our
directors received the following compensation for their service as directors
during the period from March 27, 2008, our date of formation, through December31, 2008:
Name
Fees
Earned or Paid in Cash
Stock
Awards
$
Option
Awards
$
Non-Equity
Incentive Plan Compensation
$
Non-Qualified
Deferred Compensation Earnings
$
All
Other Compensation
$
Total
$
Roger
Corriveau former officer, and director
0
0
0
0
0
0
0
Gilbert
Pomerleau, chief financial officer, director
0
0
0
0
0
0
0
Ghislaine
St-Hilaire, vice president, secretary, director
0
0
0
0
0
0
0
18
Financial
Statements
The
financial statements required are presented in the following
order:
Report
of Independent Registered Public Accounting Firm
Report
of Independent Registered Public Accounting Firm
To the
Directors of
Bio-Solutions
Corp.
We have
audited the accompanying balance sheets of Bio-Solutions Corp. (the "Company")
as of December 31, 2008 and 2007, and the related statements of operations and
accumulated other comprehensive loss, changes in stockholders' equity (deficit)
and cash flows for the year ended December 31, 2008 and period March 27, 2007
(Inception) through December 31, 2007. Our responsibility is to express an
opinion on these financial statements based on our audits.
.
We
conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. We were
not engaged to perform an audit of the Company’s internal control over financial
reporting. Our audits 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 audits provide a reasonable basis
for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Bio-Solutions Corp. as of December31, 2008 and 2007, and the results of its statements of operations and
accumulated other comprehensive loss, changes in stockholders’ equity (deficit),
and cash flows for the year ended December 31, 1008 and period March 27, 2007
(Inception) through December 31, 2007 in conformity with U.S. generally accepted
accounting principles.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 1 to the financial
statements, the Company is in process of executing its business plan and
expansion. The Company has not generated significant revenue to this point,
however, has been successful in raising funds in their private placement. The
lack of profitable operations and the need to continue to raise funds raise
significant doubt about the Company’s ability to continue as a going concern.
Management’s plans in this regard are described in Note 1. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
On March27, 2007, Bio-Solutions Corp. (the “Company”) was incorporated in the State of
Nevada.
The
Company is a manufacturer of a pre-mix for chicken integrators called
Nutra-Animal, a pre-mix anti-oxidant containing wheat middlings, vitamin E,
calcium carbonate, silicone dioxyde, shrimp flour, sodium selenite and fish
oil.
The
Company to date has conducted three clinical studies that have demonstrated the
positive impact of Nutra-Animal (chicken) on growth, reinforcement of the immune
system, as well as the ratio of net weight of flesh. The product has been
approved for sale in Canada by the Canadian Food Inspection Agency under number
982676.
The
Company’s supplier for the distinctive raw material used in the Nutra-Animal
blend has worldwide exclusive rights.
Going
Concern
These
financial statements have been prepared on a going concern basis, which implies
the Company will continue to realize its assets and discharge its liabilities in
the normal course of business. The Company has not generated significant
revenues since inception and has generated losses totaling $593,942 in their
initial two years, and needs to raise additional funds to carry out their
business plan. The continuation of the Company as a going concern is dependent
upon the continued financial support from its shareholders, and the ability of
the Company to obtain necessary equity financing to continue operations. The
Company has had very little operating history to date. These financial
statements do not include any adjustments to the recoverability and
classification of recorded asset amounts and classification of liabilities that
might be necessary should the Company be unable to continue as a going concern.
These factors raise substantial doubt regarding the ability of the Company to
continue as a going concern.
In the
opinion of management, the current funds raised to date will satisfy the working
capital requirements for the next twelve months. Besides generating revenues
from current operations, the Company may need to raise additional capital to
expand operations to the point at which the Company can achieve profitability.
The terms of equity that may be raised may not be on terms acceptable by the
Company. If adequate funds cannot be raised outside of the Company, the
Company’s officers and directors may need to contribute funds to sustain
operations.
NOTE
2-
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
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 and disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those
estimates.
Currency
Translation
The
Company operates in Canada, and certain accounts of the Company are reflected in
currencies other than the U.S. dollar. The Company translates income and expense
amounts at average exchange rates for the year, translates assets and
liabilities at year-end exchange rates and equity at historical rates for
currencies in the Canadian dollar. The Company’s functional currency is the
Canadian dollar, while the Company reports its currency in the US dollar. The
Company records these translation adjustments as accumulated other comprehensive
income (loss). Gains and losses from foreign currency transactions are included
in other income (expense) in the results of operations. For the year ended
December 31, 2008 and the period from March 27, 2007 (inception) to December 31,2007, the Company recorded approximately $27,971 and $6,830 in translation
losses, respectively.
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
(CONTINUED)
Comprehensive Income
(Loss)
The
Company follows the provisions of Financial Accounting Standards No. 130,
“Reporting Comprehensive Income” (FAS 130). FAS 130 governs the financial
statement presentation of changes in stockholders’ equity (deficit) resulting
from non-owner sources. Accumulated other comprehensive income (loss) as
reported in the accompanying financial statements represent gains (losses) from
foreign currency translation.
Cash and Cash
Equivalents
The
Company considers all highly liquid debt instruments and other short-term
investments with maturity of three months or less, when purchased, to be cash
equivalents.
The
Company maintains cash and cash equivalent balances at one financial institution
that is insured by the Federal Deposit Insurance Corporation.
Fixed
Assets
Although
the Company does not have any fixed assets at this point. Any fixed
assets acquired in the future will be stated at cost, less accumulated
depreciation. Depreciation will be provided using the straight-line method over
the estimated useful lives of the related assets. Costs of maintenance and
repairs will be charged to expense as incurred.
Recoverability of Long-Lived
Assets
Although
the Company does not have any long-lived assets at this point, for any
long-lived assets acquired in the future the Company will review their
recoverability on a periodic basis whenever events and changes in circumstances
have occurred which may indicate a possible impairment. The assessment for
potential impairment will be based primarily on the Company’s ability to recover
the carrying value of its long-lived assets from expected future cash flows from
its operations on an undiscounted basis. If such assets are determined to be
impaired, the impairment recognized is the amount by which the carrying value of
the assets exceeds the fair value of the assets. Fixed assets to be disposed of
by sale will be carried at the lower of the then current carrying value or fair
value less estimated costs to sell.
Fair Value of Financial
Instruments
The
carrying amount reported in the balance sheets for cash and cash equivalents,
accounts payable, accrued expenses, and accounts receivable approximate fair
value because of the immediate or short-term maturity of these financial
instruments. The Company does not utilize derivative
instruments.
Income
Taxes
The
Company accounts for income taxes utilizing the liability method of
accounting. Under the liability method, deferred taxes are determined
based on differences between financial statement and tax bases of assets and
liabilities at enacted tax rates in effect in years in which differences are
expected to reverse. Valuation allowances are established, when
necessary, to reduce deferred tax assets to amounts that are expected to be
realized.
Revenue
Recognition
The
Company generates revenue from the sales of their products in accordance with
Staff Accounting Bulletin 101. The criteria for recognition are as
follows:
1)
Persuasive
evidence of an arrangement exists;
2)
Delivery
has occurred or services have been
rendered;
3)
The
seller’s price to the buyer is fixed or determinable,
and
4)
Collectable
is reasonably assured.
The
Company’s revenues are generated through the manufacturing of their products.
The Company ships their product to their suppliers. It is policy that the
Company recognizes revenues upon placement of the purchase order. This is the
time when the criteria established above has been determined to have been met.
The Company primarily ships product the same day as the purchase order is
received. The customer typically pays for product within a 30 day period;
therefore management has determined no allowance is required as of December 31,2008 and 2007, respectively. The right of return does exist for a small period
subsequent to sale. However, their have been no refunds since
inception.
(Loss) Per Share of Common
Stock
Basic net
loss per common share is computed using the weighted average number of common
shares outstanding. Diluted earnings per share (EPS) include
additional dilution from common stock equivalents, such as stock issuable
pursuant to the exercise of stock options and warrants. Common stock
equivalents are not included in the computation of diluted earnings per share
when the Company reports a loss because to do so would be anti-dilutive for
periods presented.
Inventory
is stated at the lower of cost (FIFO: first-in, first-out) or market,
and includes raw materials and finished goods. The cost of finished
goods includes the cost of packaging supplies, direct and indirect labor and
other indirect manufacturing costs. As of December 31, 2008 and 2007, inventory
of $76,379 and $68,936 includes $62,213 and $63,453 of raw materials with the
balance being finished goods, respectively.
Uncertainty in Income
Taxes
In July
2006, the FASB issued Interpretation No. 48 (FIN No. 48), “Accounting for
Uncertainty in Income Taxes.” This interpretation requires recognition and
measurement of uncertain income tax positions using a “more-likely-than-not”
approach. FIN No. 48 is effective for fiscal years beginning after December 15,2006. Management has adopted FIN 48 for 2007, and they evaluate their tax
positions on an annual basis, and has determined that as of December 31, 2008,
no additional accrual for income taxes is necessary.
Recent Issued Accounting
Standards
In
September 2006, the FASB issued SFAS 157, “Fair Value Measurements.” This
standard defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles, and expands disclosure about fair
value measurements. This statement is effective for financial statements issued
for fiscal years beginning after November 15, 2007. Early adoption is
encouraged. The adoption of SFAS 157 is not expected to have a material impact
on the financial statements.
In
February 2007, the FASB issued FAS No. 159, “The Fair Value Option for Financial
Assets and Financial Liabilities – Including an amendment of FASB Statement No.
115”, (“FAS 159”) which permits entities to choose to measure many financial
instruments and certain other items at fair value at specified election dates. A
business entity is required to report unrealized gains and losses on items for
which the fair value option has been elected in earnings at each subsequent
reporting date. This statement is expected to expand the use of fair value
measurement. FAS 159 is effective for financial statements issued for fiscal
years beginning after November 15, 2007, and interim periods within those fiscal
years.
In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements, an amendment of Accounting Research Bulletin
No 51” (SFAS 160). SFAS 160 establishes accounting and reporting standards for
ownership interests in subsidiaries held by parties other than the parent,
changes in a parent’s ownership of a noncontrolling interest, calculation and
disclosure of the consolidated net income attributable to the parent and the
noncontrolling interest, changes in a parent’s ownership interest while the
parent retains its controlling financial interest and fair value measurement of
any retained noncontrolling equity investment.
SFAS 160
is effective for financial statements issued for fiscal years beginning after
December 15, 2008, and interim periods within those fiscal years. Early adoption
is prohibited. Management is determining the impact that the adoption of SFAS
No. 160 will have on the Company’s financial position, results of operations or
cash flows.
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
(CONTINUED)
Recent Issued Accounting
Standards (Continued)
In
December 2007, the FASB issued SFAS 141R, Business Combinations (“SFAS
141R”), which replaces FASB SFAS 141, Business
Combinations. This Statement retains the fundamental
requirements in SFAS 141 that the acquisition method of accounting be used for
all business combinations and for an acquirer to be identified for each business
combination. SFAS 141R defines the acquirer as the entity that obtains control
of one or more businesses in the business combination and establishes the
acquisition date as the date that the acquirer achieves control. SFAS
141R will require an entity to record separately from the business combination
the direct costs, where previously these costs were included in the total
allocated cost of the acquisition. SFAS 141R will require an entity
to recognize the assets acquired, liabilities assumed, and any non-controlling
interest in the acquired at the acquisition date, at their fair values as of
that date. This compares to the cost allocation method previously
required by SFAS No. 141. SFAS 141R will require an entity to
recognize as an asset or liability at fair value for certain contingencies,
either contractual or non-contractual, if certain criteria are
met. Finally, SFAS 141R will require an entity to recognize
contingent consideration at the date of acquisition, based on the fair value at
that date. This Statement will be effective for business combinations
completed on or after the first annual reporting period beginning on or after
December 15, 2008. Early adoption of this standard is not permitted
and the standards are to be applied prospectively only. Upon adoption
of this standard, there would be no impact to the Company’s results of
operations and financial condition for acquisitions previously
completed. The adoption of SFAS No. 141R is not expected to have a
material effect on the Company’s financial position, results of operations or
cash flows.
In
December 2007, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 110, “Use of a Simplified Method in Developing Expected Term of
Share Options” (“SAB 110”). SAB 110 expresses the current view of the
staff that it will accept a company’s election to use the simplified method
discussed in Staff Accounting Bulletin 107, Share Based Payment, (“SAB
107”), for estimating the expected term of “plain vanilla” share options
regardless of whether the company has sufficient information to make more
refined estimates. SAB 110 became effective for the Company on
January 1, 2008. The adoption of SAB 110 is not expected to have a
material impact on the Company’s financial position.
In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
and Hedging Activities, an amendment of FASB Statement No. 133 (“SFAS 161”).
SFAS 161 requires enhanced disclosures about an entity’s derivative and hedging
activities. These enhanced disclosures will discuss: how and why an entity uses
derivative instruments; how derivative instruments and related hedged items are
accounted for under SFAS 133 and its related interpretations; and how derivative
instruments and related hedged items affect an entity’s financial position,
financial performance, and cash flows. SFAS 161 is effective for financial
statements issued for fiscal years and interim periods beginning after November15, 2008. The Company does not believe that SFAS 161 will have an impact on
their results of operations or financial position.
In April
2008, the FASB issued FSP No. FAS 142-3, “Determination of the Useful Life of
Intangible Assets”. This FSP amends the factors that should be considered in
developing renewal or extension assumptions used to determine the useful life of
a recognized intangible asset under SFAS No. 142, “Goodwill and Other Intangible
Assets”. The Company was required to adopt FSP 142-3 on October 1, 2008. The
guidance in FSP 142-3 for determining the useful life of a recognized intangible
asset shall be applied prospectively to intangible assets acquired after
adoption, and the disclosure requirements shall be applied prospectively to all
intangible assets recognized as of, and subsequent to, adoption. The Company
does not believe FSP 142-3 will materially impact their financial position,
results of operations or cash flows.
In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles” (SFAS 162). SFAS 162 makes the hierarchy of generally
accepted accounting principles explicitly and directly applicable to preparers
of financial statements, a step that recognizes preparers’ responsibilities for
selecting the accounting principles for their financial statements. The
effective date for SFAS 162 is 60 days following the U.S. Securities and
Exchange Commission’s approval of the Public Company Accounting Oversight
Board’s related amendments to remove the GAAP hierarchy from auditing standards,
where it has resided for some time. The adoption of SFAS 162 will not have an
impact on the Company’s results of operations or financial
position.
In May
2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee
Insurance Contracts – an interpretation of SFAS No. 60” (SFAS 163). SFAS 163
prescribes accounting for insures of financial obligations, bringing consistency
to recognizing and recording premiums and to loss recognition. SFAS 163 also
requires expanded disclosures about financial guarantee insurance contracts.
Except for some disclosures, SFAS 163 is effective for financial statements
issued for fiscal years beginning after December 15, 2008. The adoption of SFAS
163 will not have an impact on the Company’s results of operations or financial
position.
Other
accounting standards that have been issued or proposed by the FASB or other
standards-setting bodies that do not require adoption until a future date and
are not expected to have a material impact on the financial statements upon
adoption.
NOTE
3-
STOCKHOLDERS’ EQUITY
(DEFICIT)
The
Company was established with one class of stock, common stock – 75,000,000
shares authorized at a par value of $0.001.
In
October 2008 the Company entered into agreements with consultants that performed
services for the Company. At that time, the Company issued the consultants
1,550,000 shares of common stock valued at $.20 per share (the value the Company
received cash for their shares at the same time). The value of $310,000 is
reflected in the statements of operations for the year ended December 31,2008.
The
Company in December 2008 issued 1,041,348 shares of stock in conversion of
$125,000 of notes payable (approximately $.12 per share).
The
Company has not issued any options or warrants to date.
NOTE
4-
RELATED PARTY
TRANSACTIONS
The
Company conducts business with another company owned by an officer of the
Company. The Company purchases goods and uses office space in the other
company’s offices. The Company is currently being charged rent on a month to
month basis. For the year ended December 31, 2008 and the period March 27, 2007
through December 31, 2007, the Company incurred $89,820 and $73,900,
respectively in inventory and other expenses to this company and $7,882 and
$2,933 in rent. Approximately $11,905 is owed to this company at December 31,2008 which is included in accounts and accrued expenses payable.
The
Company was advanced $3,967 from officers during the year ended December 31,2008. These amounts are short-term in nature as they are due on demand, and the
Company has not been charged interest. The Company anticipates repayment of
these advances within the next twelve months.
The
Company was advanced $125,000 from seventeen (17) individuals/companies for
amounts ranging between $5,000 and $45,000 each during the year ended December31, 2008. These amounts were converted into 1,041,348 shares of common
stock.
In
December 2008, the Company entered into three notes payable on demand in the
amounts of $20,000 (CD$), $10,000 (CD$) and $24,990 (CD$) loan. All of these
loans accrue interest at 5% per annum. The Company has repaid $7,530 (CD$) at
the end of December 2008, and has $17,460 (CD$) remaining due on this note. The
total outstanding due on these notes as of December 31, 2008 is $47,460 (CD$) or
$38,966 (US$).
The
Company had accrued interest at 5% per annum on these notes and accrued $4,723
as of December 31, 2008. Interest expense for the year ended December 31, 2008
is $4,406.
NOTE
6-
MAJOR
CUSTOMERS
93% and
80% of the Company’s revenue was generated by four and three customers for the
year ended December 31, 2008 and period March 27, 2007 through December 31,2007, respectively that were all considered to be major customers. A major
customer is one that represents at least 10% of the Company’s revenue. The
Company does not consider this risk to be significant.
Deferred
income taxes are determined using the liability method for the temporary
differences between the financial reporting basis and income tax basis of the
Company’s assets and liabilities. Deferred income taxes are measured
based on the tax rates expected to be in effect when the temporary differences
are included in the Company’s tax return. Deferred tax assets and
liabilities are recognized based on anticipated future tax consequences
attributable to differences between financial statement carrying amounts of
assets and liabilities and their respective tax bases.
As of
December 31, 2008, there is no provision for income taxes, current or
deferred.
Net operating
losses
$
201,940
Valuation
allowance
(201,940
)
$
-
At
December 31, 2008, the Company had a net operating loss carry forward in the
amount of $593,942, available to offset future taxable income through
2028. The Company established valuation allowances equal to the full
amount of the deferred tax assets due to the uncertainty of the utilization of
the operating losses in future periods.
A
reconciliation of the Company’s effective tax rate as a percentage of income
before taxes and federal statutory rate for the year ended December 31, 2008 and
the period March 27, 2007 (inception) through December 31, 2007 is summarized
below.
2008
2007
Federal
statutory rate
(34.0)%
(34.0)%
State
income taxes, net of federal benefits
0.0
0.0
Valuation
allowance
34.0
34.0
0%
0%
NOTE
8-
LICENSE
AGREEMENT
On
September 11, 2008, the Company entered into a License Agreement with
Oceanutrasciences Inc., a Canadian company (“ONS”) (the “Agreement”)/ The
Agreement is for a term of three years from September 11, 2008 to
September 11, 2011. Under the terms of the Agreement, the Company has
acquired the license and trademark rights to produce the “Nutra-Pro 80-20”
product from ONS in the North America animal feed territory. The Company
has acquired these rights for $150,000 (CD$) ($141,525 US$ at September11, 2008). The Company paid the initial payment of $50,000 (CD$), with the
remaining payments due $50,000 (CD$) on October 31, 2008 and $50,000 (CD$)
on December 31, 2008. The Company has made a $25,000 (CD$) payment in
December 2008, and as of December 31, 2008 owes $75,000 (CD$), which is
reflected in accounts payable and accrued expenses on the balance sheet at
December 31, 2008. The Company is amortizing the license fee over the 36
month term of the Agreement. Amortization expense through December 31,2008 amounted to $12,277.
NOTE
9-
FAIR VALUE
MEASUREMENTS
On
January 1, 2008, the Company adopted SFAS 157. SFAS 157 defines fair value,
provides a consistent framework for measuring fair value under generally
accepted accounting principles and expands fair value financial statement
disclosure requirements. SFAS 157’s valuation techniques are based on observable
and unobservable inputs. Observable inputs reflect readily obtainable data from
independent sources, while unobservable inputs reflect our market assumptions.
SFAS 157 classifies these inputs into the following hierarchy:
Level 1
inputs: Quoted prices for identical instruments in active markets.
Level 2
inputs: Quoted prices for similar instruments in active markets; quoted prices
for identical or similar instruments in markets that are not active; and
model-derived valuations whose inputs are observable or whose significant value
drivers are observable.
Level 3
inputs: Instruments with primarily unobservable value drivers.
The
following table represents the fair value hierarchy for those financial assets
and liabilities measured at fair value on a recurring basis as of December 31,2008:
Level 1
Level
2
Level
3
Total
Cash
810
-
-
810
Total
assets
810
-
-
810
Short-term
notes
38,966
-
-
38,966
Total
liabilities
38,966
-
-
38,966
30
Changes in and Disagreements
with Accountants on Accounting and Financial Disclosure
In
September 2007 our board of directors appointed Michael Pollack, CPA, LLC
(“Pollack”), independent accountant, to audit our financial statements for the
period ended September 30, 2007. On January 7, 2008, we were
notified that effective January 1, 2008, Pollack had merged into the accounting
firm of KBL, LLP (“KBL”), and that Pollack resigned as our independent
registered public accounting firm. A copy of Pollack’s letter regarding the
resignation is included as Exhibit 16.1 to our Form 8-K filed on February 1,2008.
We made
the contents of our Form 8-K available to Pollack and requested it to furnish a
letter to the Securities and Exchange Commission as to whether Pollack agreed or
disagreed with, or wished to clarify our expression of our views. A copy of
Pollack’s letter to the Securities and Exchange Commission is included as
Exhibit 16.2 to that Form 8-K.
The
report of Pollack on our financial statements for the period from March 27, 2007
(inception) to September 30, 2007, contained an explanatory paragraph relating
to our ability to continue as a going concern. Other than this report
modification, the report of Pollack on our financial statements for the period
from March 27, 2007 (inception) to September 30, 2007 did not contain any
adverse opinion or disclaimer of opinion, and was not modified as to
uncertainty, audit scope, or accounting principles.
We
engaged KBL, as our new independent auditors, effective as of January 29, 2008,
to audit our financial statements for the year ended December 31, 2008, and to
perform procedures related to the financial statements included in our current
reports on Form 8-K and quarterly reports on Form 10-QSB or Form 10-Q. The decision
to engage KBL was approved by our Board of Directors on January 29,2008.
Other
than in connection with our engagement of KBL, during the period from March 27,2007 (inception) to September 30, 2007, and through the date of this
registration statement, we did not consult KBL, regarding either: (i) the
application of accounting principles to a specified transaction, completed or
proposed, or the type of audit opinion that might be rendered on our financial
statements, or (ii) any matter that was either the subject of a
disagreement as defined in Item 304(a)(1)(iv) of Regulation S-B or the
related instructions thereto or a “reportable event” as described in
Item 304(a)(1)(v) of Regulation S-B.
Legal
Matters
The
validity of the issuance of the shares of common stock offered by the selling
shareholders has been passed upon by M2 Law Professional Corporation, located in
Newport Beach, California.
Experts
Our
financial statements for the period from March 27, 2007, our date of formation
to December 31, 2007 and for the year ended December 31, 2008, appearing in
this prospectus which is part of a Registration Statement were audited by KBL
and are included in reliance upon such reports given upon the authority of KBL,
as experts in accounting and auditing.
Additional
Information
We have
filed a registration statement on Form S-1 with the Securities and Exchange
Commission pursuant to the Securities Act of 1933. This prospectus
does not contain all of the information set forth in the registration statement
and the exhibits and schedules to the registration statement. For further
information regarding us and our common stock offered hereby, reference is made
to the registration statement and the exhibits and schedules filed as a part of
the registration statement.
31
PART
II - INFORMATION NOT REQUIRED IN PROSPECTUS
Indemnification of Directors
and Officers
Article
Twelfth of our Articles of Incorporation provides, among other things, that our
officers and directors shall not be personally liable to us or our shareholders
for monetary damages for breach of fiduciary duty as an officer or a director,
except for liability:
·
for
acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
or
·
for
unlawful payments of dividends or unlawful stock purchase or redemption by
us.
Accordingly,
our directors may have no liability to our shareholders for any mistakes or
errors of judgment or for any act of omission, unless the act or omission
involves intentional misconduct, fraud, or a knowing violation of law or results
in unlawful distributions to our shareholders.
Article V
of our Bylaws also provides that our officers and directors shall be indemnified
and held harmless by us to the fullest extent permitted by the provisions of
Section 78.7502 of the Nevada Revised Statutes.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to our directors, officers and controlling persons pursuant to the
foregoing 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.
Other Expenses of Issuance
and Distribution
We will
pay all expenses in connection with the registration and sale of our common
stock. None of the expenses will be paid by the selling security holders. The
estimated expenses of issuance and distribution are set forth
below.
Registration
Fees
Approximately
$124.99
Transfer
Agent Fees
Approximately
$250.00
Costs
of Printing and Engraving
Approximately
$500.00
Legal
Fees
Approximately
$10,000.00
Accounting
Fees
Approximately
$5,000.00
Recent Sales of Unregistered
Securities
There
have been no sales of unregistered securities within the last three years, which
would be required to be disclosed pursuant to Item 701 of Regulation S-K, except
for the following:
In May
2007, we issued Roger Corriveau, our former officer and director, 6,000,000
shares, Gilbert Pomerleau 500,000 shares, and Ghislaine St-Hilaire 1,500,000 of
our common stock for a total cash consideration of $8,000, or $0.001 per share.
The shares were issued in a transaction which we believe satisfies the
requirements of that certain exemption from the registration and prospectus
delivery requirements of the Securities Act of 1933, as amended, , which
exemption is specified by the provisions of Section 5 of that act and Regulation
S. There were no commissions paid on the sale of these shares. The investor was
a non-U.S. person and the sale was made in an offshore transaction. No directed
selling efforts were made in the United States by us or any person acting on our
behalf. The offer or sale was not made to a U.S. person or for the account or
benefit of a U.S. person. The purchaser of the securities certified that it was
not a U.S. person and was not acquiring the securities for the account or
benefit of any U.S. person. The purchaser of the securities has agreed to resell
such securities only in accordance with the provisions of Regulation S or
pursuant to registration under the Securities Act of 1933. The shares of common
stock issued to the purchaser contain a legend to the effect that transfer is
prohibited except in accordance with the provisions of this Regulation S or
pursuant to registration under the Securities Act of 1933. We will not register
any transfer of the securities unless such transfer is made in accordance with
the provisions of Regulation S or pursuant to registration under the Securities
Act of 1933.
From June
to September 2007, we issued 1,286,500 shares of our common stock for $0.10 per
share. The gross proceeds to us were $128,650.00. The shares were issued in a
transaction which we believe satisfies the requirements of that certain
exemption from the registration and prospectus delivery requirements of the
Securities Act of 1933, as amended, , which exemption is specified by the
provisions of Section 5 of that act and Regulation S. There were no commissions
paid on the sale of these shares. The investor was a non-U.S. person and the
sale was made in an offshore transaction. No directed selling efforts were made
in the United States by us or any person acting on our behalf. The offer or sale
was not made to a U.S. person or for the account or benefit of a U.S. person.
The purchaser of the securities certified that it was not a U.S. person and was
not acquiring the securities for the account or benefit of any U.S. person. The
purchaser of the securities has agreed to resell such securities only in
accordance with the provisions of Regulation S or pursuant to registration under
the Securities Act of 1933. The shares of common stock issued to the purchaser
contain a legend to the effect that transfer is prohibited except in accordance
with the provisions of this Regulation S or pursuant to registration under the
Securities Act of 1933. We will not register any transfer of the securities
unless such transfer is made in accordance with the provisions of Regulation S
or pursuant to registration under the Securities Act of 1933.
Pursuant
to a private placement offering, on December 18, 2008, we issued an aggregate of
421,502 shares of our restricted common stock at a price of $0.20 USD per share
in exchange for cash of $25,000 USD, and $59,725.00 CDN raised from July to
September 2008, as reported in
our most recent quarterly report on Form 10-Q. The shares were issued
to a total of seven purchasers in transactions which we believe satisfies the
requirements of that exemption from the registration and prospectus delivery
requirements of the Securities Act of 1933, which exemption is specified by the
provisions of Section 5 of that act and Regulation S promulgated pursuant to
that act by the Securities and Exchange Commission. The proceeds were used for
working capital. The amount was reflected as a liability for
stock to be issued on the balance sheet as of the quarter ending September 30,2008 since we did not issue the shares at the time of subscription.
32
To
convert outstanding loans to stock, on December 18, 2008, we issued an aggregate
of 916,343 shares of our common stock to certain holders of certain outstanding
promissory notes in the amount of $115,000 CDN, who elected to convert the
amounts due at the conversion price of $0.12 USD per share. We issued
an aggregate of 124,998 shares of our common stock to certain holders of certain
outstanding promissory notes in the amount of $15,000 USD, who elected to
convert the amounts due at the conversion price of $0.12 USD per
share. The shares were issued in transactions which we believe
satisfies the requirements of that exemption from the registration and
prospectus delivery requirements of the Securities Act of 1933, which exemption
is specified by the provisions of Section 5 of that act and Regulation S
promulgated pursuant to that act by the Securities and Exchange Commission. The
original promissory notes were short term loans for amounts ranging between
$5,000 and $45,000 (CD$) each and were provided to us for working
capital.
On
October 30, 2008, we issued 1,550,000 shares of common stock to three
consultants in exchange for services provided to us, which
were valued at $310,000 or $0.20 per share. The shares were issued in
transactions which we believe satisfies the requirements of that exemption from
the registration and prospectus delivery requirements of the Securities Act of
1933, which exemption is specified by the provisions of Section 5 of that act
and Regulation S promulgated pursuant to that act by the Securities and Exchange
Commission.
Exhibits
Copies of
the following documents are filed with this registration statement, Form S-1, as
exhibits:
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)
Reflect
in the prospectus any facts or events which, individually or together,
represent a fundamental change in the information in the registration
statement; and Notwithstanding the forgoing, 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 prospects filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in the volume and price
represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement;
and
(iii)
Include
any additional or changed material information on the plan of
distribution.
(2)
For
determining liability under the Securities Act, treat each post-effective
amendment as a new registration statement of the securities offered, and
the offering of the securities at that time to be the initial bona fide
offering.
(3)
File
a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
(4)
For
determining liability of the undersigned small business issuer under the
Securities Act to any purchaser in the initial distribution of the
securities, the undersigned small business issuer undertakes that in a
primary offering of securities of the undersigned small business issuer
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 small business issuer will be a seller to
the purchaser and will be considered to offer or sell such securities to
such purchaser:
Insofar
as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions,
or otherwise, the small business issuer 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.
(2)
In
the event that a claim for indemnification against such liabilities (other
than the payment by the small business issuer of expenses incurred or paid
by a director, officer or controlling person of the small business issuer
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 small business issuer 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.
C.
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.
34
SIGNATURES
Pursuant
to the requirements of the Securities Act, the Registrant has duly caused this
Registration Statement on Form S-1 to be signed on its behalf by the
undersigned, thereunto duly authorized.
Principal Financial
and Accounting Officer, Chief Financial Officer, Director
In accordance with the
requirements of the Securities Act of 1933, this registration statement was
signed by the following persons in the capacities and on the dates
stated:
