Registration
No. _________
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_________________
FORM
S-1
REGISTRATION
STATEMENT UNDER
THE
SECURITIES ACT OF 1933
SURNA
INC.
(Name of
small business issuer in its charter)
|
Nevada
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7380
|
|
(State
or Other Jurisdiction of Organization)
|
(Primary
Standard Industrial Classification
Code)
|
_________________
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2nd
Floor, 1901 Avenue of the Stars
|
National
Registered Agents Inc. of NV
|
|
Los
Angeles, CA 90067
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1000
East Williams Street, Suite 204
|
|
213-985-1939
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Carson
City, Nevada 89701
|
|
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800-550-6724
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(Address
and telephone number of registrant’s
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(Name,
address and telephone
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|
executive
office)
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number
of agent for service)
|
_________________
Copies
to:
The
Law Office of Conrad C. Lysiak, P.S.
601
West First Avenue, Suite 903
Spokane,
Washington 99201
509-624-1475
APPROXIMATE DATE OF COMMENCEMENT OF
PROPOSED SALE TO THE PUBLIC:
If any of
the securities being registered on the Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the
following box:
[X]
If this
Form is filed to register additional common stock for an offering under Rule
462(b) of the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering.
If this
Form is a post-effective amendment filed under Rule 462(c) of the Securities
Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering.
If this
Form is a post-effective amendment filed under Rule 462(d) of the Securities
Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering.
[ ]
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check one):
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|
Large
Accelerated Filer
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[ ]
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Accelerated
Filer
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[ ]
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Non-accelerated
Filer
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[ ]
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Smaller
Reporting Company
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[X]
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(Do
not check if a smaller reporting company)
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CALCULATION
OF REGISTRATION FEE
|
Securities
to be
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Amount
To Be
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Offering
Price
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Aggregate
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Registration
Fee
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|
Registered
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Registered
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Per
Share
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Offering
Price
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[1]
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|
|
|
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Common
Stock:
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1,500,000
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$
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0.10
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$
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150,000
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$
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10.70
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[1] Estimated
solely for purposes of calculating the registration fee under Rule
457.
REGISTRANT
HEREBY AMENDS THIS REGISTRATION STATEMENT ON DATES AS MAY BE NECESSARY TO DELAY
ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME
EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933, OR
UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON DATES AS THE
COMMISSION, ACTING UNDER SAID SECTION 8(a), MAY DETERMINE.
Prospectus
SURNA
INC.
Shares
of Common Stock
750,000
minimum - 1,500,000 Maximum
Before this offering, there has been no
public market for the common stock and after this offering there will be no
public market for the common stock.
This offering will begin on the
effective date of this registration statement. That date is set forth
below as “The date of this prospectus is ___________________ and will terminate
270 days later on _________________, 2010, or on the date the maximum number of
shares are sold, which ever date is earlier.
We are offering up to a total of
1,500,000 shares of common stock in a direct public offering, without any
involvement of underwriters or broker-dealers, 750,000 shares minimum, 1,500,000
shares maximum. The offering price is $0.10 per
share. Funds from this offering will be placed in a separate bank
account with the Hongkong and Shanghai Banking Corporation Limited (HSBC) Main
Branch, 1 Queen’s Road Central, Hong Kong. Its telephone number is
(852) 2748-8288. There is no escrow, trust or similar account in
which your subscription will be deposited. The bank account is merely
a separate interest bearing multi-currency savings account under our control
where we have segregated your funds. As a result, creditors could
attach the funds. Only Richard Clarke, one of our officers and
directors, will have access to the account. You will not have the
right to withdraw your funds during the offering. You will only receive your
funds back if we do not raise the minimum amount of the offering within 270
days. The funds will be maintained in the separate bank until we
receive a minimum of $75,000 at which time we will remove those funds and use
the same as set forth in the Use of Proceeds section of this
prospectus. In the event that 750,000 shares are not sold within 270
days, all money received by us will be promptly, returned to you without
interest and without deduction of any kind. We will return your funds
to you in the form a cashier’s check sent by courier service on the 271
st
day. Sold securities are deemed securities which have been paid for
with collected funds prior to expiration of 270 days. Collected funds
are deemed funds that have been paid by the drawee bank. The Hongkong
and Shanghai Banking Corporation Limited (HSBC) will determine if the securities
have been paid for with collected funds prior to the expiration of 270 days from
the date of this prospectus.
There is no minimum purchase
requirements for each investor.
Our common stock will be sold by
Richard Clarke and Cherry Ping-Wai Lim, our directors.
Investing in our common stock involves
risks. See “Risk Factors” starting at page 8.
|
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Offering
Price
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Expenses
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Proceeds
to Us
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Per
Share – Minimum
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$
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0.10
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$
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0.04
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$
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0.06
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Per
Share – Maximum
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$
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0.10
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$
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0.02
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$
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0.08
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Minimum
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$
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75,000
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$
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30,000
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$
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45,000
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Maximum
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$
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150,000
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$
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30,000
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$
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120,000
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The difference between the aggregate
offering price and the proceeds to us is $30,000. The $30,000 will be paid to
unaffiliated third parties for expenses connected with this offering. The
$30,000 will be paid from the first proceeds of this offering.
Neither the Securities and Exchange
Commission nor any state securities commission has approved or disapproved of
these securities or determined if this prospectus is truthful or complete. It is
illegal to tell you otherwise.
The date of this prospectus is
____________________.
TABLE
OF CONTENTS
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Page
No.
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Summary
of Prospectus
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6
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Risk
Factors
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8
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Use
of Proceeds
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11
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Determination
of Offering Price
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13
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Dilution
of the Price You Pay for Your Shares
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13
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Plan
of Distribution; Terms of the Offering
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15
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Management’s
Discussion and Analysis of Financial Condition or Plan of
Operation
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18
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Business
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22
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Management
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27
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Executive
Compensation
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29
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Principal
Stockholders
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31
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Description
of Securities
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32
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Certain
Transactions
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34
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Litigation
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34
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Experts
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34
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Legal
Matters
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34
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Financial
Statements
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34
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SUMMARY
OF OUR OFFERING
Our
business
We are a start-up stage company. We are
a company without revenues or operations; we have minimal assets and have
incurred losses since inception. We are developing software products
and associated websites (surna.com and surna.org ) that will be used to promote
our presence in the business community. Our business focuses on
providing software and statistical consulting services to enterprises seeking to
better manage and exploit information contained in their databases and enhance
their position in the market place.
As a part of this we plan to develop
software and commercial applications that will deal with “Complex Event
Processing” (or CEP). CEP is an information analysis technique that helps
discover information that can be inferred by analyzing and correlating aspects
of many other pieces of information or events. The focus of our initial software
development will be on enhance existing publically available Open-Source
Software applications for CEP, specifically through our surna.org website. After
this we plan to develop commercial software applications and related consulting
services through out surna.com website.
We have not generated any revenues and
the only operations we have engaged in is the development of a business plan,
planning our website and preliminary work on the development of our software
applications.
Our principal executive office is
located at 2nd Floor, 1901 Avenue of the Stars, Los Angeles, California
90067. Our telephone number is 213-985-1939 and our registered agent
for service of process is the National Registered Agents Inc. of NV, located at
1000 East William Street, Suite 204, Carson City, Nevada 89701. Our fiscal year
end is November 30.
The
offering
Following is a brief summary of this
offering:
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Securities
being offered
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Up
to 1,500,000 shares of common stock, par value
$0.00001.
|
|
Offering
price per share
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$
0.10
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Offering
period
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The
shares are being offered for a period not to exceed 270
days.
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Net
proceeds to us
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$45,000
assuming the minimum number of shares is sold. $120,000
assuming the maximum number of shares is sold.
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Use
of proceeds
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We
will use the proceeds to pay for administrative expenses, the
implementation of our business plan, and working
capital.
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Number
of shares outstanding before the offering
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15,000,000
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Number
of shares outstanding after the offering if all of the shares are
sold
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16,150,000
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Selected
financial data
The following financial information
summarizes the more complete historical financial information at the end of this
prospectus.
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As
of November 30, 2009
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(Audited)
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Balance
Sheet
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Total
Assets
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$
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0
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Total
Liabilities
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$
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0
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Stockholders’
Equity
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$
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0
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Period
from
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October
15, 2009 (date of inception) to
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November
30, 2009 (Audited)
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Income
Statement
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Revenue
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$
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0
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Total
Expenses
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$
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15,000
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Net
Loss
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$
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15,000
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Blank
Check Issue
We are not a blank check corporation.
Section 7(b)(3) of the Securities Act of 1933, as amended defines the term
“blank check company” to mean, any development stage company that is issuing a
penny stock that, “(A) has no specific plan or purpose, or (B) has indicated
that its business plan is to merge with an unidentified company or companies.”
We have a specific plan and purpose. Our business purpose and our specific plan
is to provide business and statistical consulting services to enterprises
seeking to enhance their position in the market place. In
Securities Act Release No. 6932 which adopted rules relating to blank check
offerings, the Securities and Exchange Commission stated in II DISCUSSION OF THE
RULES, A.
Scope of Rule
419
, that, “Rule 419 does not apply to . . . start-up companies with
specific business plans . . . even if operations have not commenced at the time
of the offering.” Further, we have not indicated in any manner whatsoever, that
we plan to merge with an unidentified company or companies, nor do we have any
plans to merge with an unidentified company or companies.
We have no plans or intentions to be
acquired or to merge with an operating company, nor do our shareholders, have
plans to enter into a change of control or similar transaction or to change our
management.
RISK
FACTORS
Please consider the following risk
factors before deciding to invest in our common stock.
Risks
associated with SURNA INC.
1.
Because our auditors have issued a
going concern opinion and because our officers and directors will not loan any
additional money to us, we have to complete this offering to commence
operations. If we do not complete this offering, we will not start our
operations.
Our auditors have issued a going
concern opinion. This means that there is doubt that we will be an ongoing
business for the next twelve months. As of the date of this prospectus, we have
not commenced operations. Because our officers and directors are unwilling to
loan or advance any additional capital to us, except to prepare and file reports
with the SEC, we will have to complete this offering in order to commence
operations.
2.
We lack an operating history and
have losses that we expect to continue into the future. There is no assurance
our future operations will result in profitable revenues. If we cannot generate
sufficient revenues to operate profitably, we may suspend or cease
operations.
We were incorporated on October 15,
2009 and we have not started our proposed business operations or realized any
revenues. We have no operating history upon which an evaluation of our future
success or failure can be made. Our net loss since inception is $15,000.00 which
was paid for legal fees. Our ability to achieve and maintain
profitability and positive cash flow is dependent upon:
* completion
of this offering
* our
ability to locate distributors who will sell their products to us
* our
ability to attract customers who will buy our services and products
* our
ability to generate revenues through the sale of our services
and products
Based upon current plans, we expect to
incur operating losses in future periods because we will be incurring expenses
and not generating revenues. We cannot guarantee that we will be successful in
generating revenues in the future. Failure to generate revenues will
cause us to suspend or cease operations.
3.
We have no customers and we cannot
guarantee we will ever have any. Even if we obtain customers, there is no
assurance that we will make a profit.
We have no customers. We have not
identified any customers and we cannot guarantee we ever will have any. Even if
we obtain customers, there is no guarantee that we will be able to locate our
customers who will buy our products. If we are unable to attract enough
suppliers to offer their products for resale to us to offer our customers, or
enough customers to buy the products from us and our website to operate
profitably we will have to suspend or cease operations.
4.
We are solely dependent upon the
funds to be raised in this offering to start our business, the proceeds of which
may be insufficient to achieve revenues. We may need to obtain additional
financing which may not be available to us.
We need the proceeds from this offering
to start our operations. If the minimum of $75,000 is raised, this
amount will enable us, after paying the expenses of this offering, to begin
operations. It will also enable us to initiate development on our
website, begin the gathering of information for our database and initiate the
development of our marketing program. We may need additional funds to
complete further development of our business plan to achieve a sustainable sales
level where ongoing operations can be funded out of revenues. There is no
assurance that any additional financing will be available or if available, on
terms that will be acceptable to us.
5.
Because we are small and do not have
much capital, we must limit our services to customers. As a result, we may not
be able to attract enough customers to operate profitably. If we do not make a
profit, we may have to suspend or cease operations
.
Because we are small and do not have
much capital, we must limit our products services. The sale of our
products and services via our website is how we will initially generate
revenues. Because we will be limiting our marketing activities, we may not be
able to attract enough customers to buy or suppliers to sell products to operate
profitably. If we cannot operate profitably, we may have to suspend or cease
operations.
6.
Because our
officers and directors will only be devoting limited time to our operations, our
operations may be sporadic which may result in periodic interruptions or
suspensions of operations. This activity could prevent us from attracting
customers and result in a lack of revenues that may cause us to suspend or cease
operations.
Our officers and directors will only be
devoting limited time to our operations. They will each be devoting
approximately 15 hours per week of their time to our
operations. Because our officers and directors will only be devoting
limited time to our operations, our operations may be sporadic and occur at
times which are convenient to them. As a result, operations may be
periodically interrupted or suspended which could result in a lack of revenues
and a possible cessation of operations.
7.
Because our management does not have
prior experience in the marketing of products or services via the Internet, we
may have to hire individuals or suspend or cease operations.
Because our management does not have
prior experience in the marketing of products or services via the Internet, we
may have to hire additional experienced personnel to assist us with our
operations. If we need the additional experienced personnel and we do not hire
them, we could fail in our plan of operations and have to suspend operations or
cease operations entirely.
8.
Because our
officers and directors have limited formal training or experience in financial
accounting and management, there may not be effective disclosure and
accounting controls to comply with applicable laws and regulations which could
result in fines, penalties and assessments against us.
Our officers and directors have limited
formal training or experience in financial accounting and management, however,
they responsible for our managerial and organizational structure which will
include preparation of disclosure and accounting controls under the Sarbanes
Oxley Act of 2002. While T.C. Tan, our principal financial officer
has limited formal training in financial accounting matters and no previous
experience with U.S. companies or U.S. Generally Accepted Accounting Principals,
he has been preparing the financial statements that have been audited and
reviewed by our auditors and included in this prospectus. When the disclosure
and accounting controls referred to above are implemented, he will be
responsible for the administration of them. Should he not have
sufficient experience, he may be incapable of creating and implementing the
controls. Lack of proper controls could cause our financial
statements to be inaccurate which will give us an incorrect view of our
financial condition and mislead us into believing our operations are being
conducted correctly. As a result, investors will be misled about our
financial condition and the quality of our operations. This
inaccurate reporting could cause us to be subject to sanctions and fines by the
SEC which ultimately could cause you to lose your investment, however, because
of the small size of our expected operations, we believe that he will be able to
monitor the controls he will have created and will be accurate in assembling and
providing information to investors.
9.
Because we do not have
an escrow or trust account for your subscription, if we file for bankruptcy
protection or are forced into bankruptcy, or a creditor obtains a judgment
against us and attaches the subscription, or one of our officers and directors
misappropriate the funds for their own use, you will lose your
investment.
Your funds will not be placed in an
escrow or trust account. Accordingly, if we file for bankruptcy
protection or a petition for involuntary bankruptcy is filed by creditors
against us, your funds will become part of the bankruptcy estate and
administered according to the bankruptcy laws. If a creditor sues us
and obtains a judgment against us, the creditor could garnish the bank account
and take possession of the subscriptions. As such, it is possible
that a creditor could attach your subscription which could preclude or delay the
return of money to you. Further, our officers and directors will have
the power to appropriate the money we raise. As such, they could
withdraw the funds without your knowledge for their own use. If that
happens, you will lose your investment and your funds will be used to pay
creditors.
10.
A permanent loss of data or a
permanent loss of service on the Internet will have an adverse affect on our
operations and will cause to cease doing business.
Our operations depend on the Internet
and Internet based services from third-party vendors. If we
permanently lose data or permanently lose Internet service for any reason, be it
technical failure or criminal acts, we will have to cease operations and you
will lose your investment.
Risks
associated with this offering:
11.
Because our Directors, who are also
our sole promoters, will own more than 50% of the outstanding shares after this
offering, they will retain control of us and be able to decide who will be
directors and you may not be able to elect any directors which could decrease
the price and marketability of the shares.
Even if we sell all 1,500,000 shares of
common stock in this offering, our officers and directors will still own
15,000,000 shares of common stock and will continue to control us. As
a result, after completion of this offering, regardless of the number of shares
we sell, our current officers and directors will be able to elect all of our
directors and control our operations, which could decrease the price and
marketability of the shares.
12.
Because there is no public trading
market for our common stock, you may not be able to resell your
stock
.
There is currently no public trading
market for our common stock. Therefore there is no central place, such as stock
exchange or electronic trading system, to resell your shares. If you do want to
resell your shares, you will have to locate a buyer and negotiate your own
sale.
13.
Because the SEC imposes additional
sales practice requirements on brokers who deal in our shares that are penny
stocks, some brokers may be unwilling to trade them. This means that you may
have difficulty reselling your shares and this may cause the price of the shares
to decline.
Our shares would be classified as penny
stocks and are covered by Section 15(g) of the Securities Exchange Act of 1934
and the rules promulgated thereunder which impose additional sales practice
requirements on brokers/dealers who sell our securities in this offering or in
the aftermarket. For sales of our securities, the broker/dealer must
make a special suitability determination and receive from you a written
agreement prior to making a sale for you. Because of the imposition
of the foregoing additional sales practices, it is possible that brokers will
not want to make a market in our shares. This could prevent you from
reselling your shares and may cause the price of the shares to
decline.
USE
OF PROCEEDS
Our offering is being made on a
self-underwritten $75,000 minimum, $150,000 maximum basis. The table
below sets forth the use of proceeds if $75,000, $100,000, or $150,000 of the
offering is sold.
|
|
$75,000
|
$100,000
|
$150,000
|
|
Gross
proceeds
|
$
|
75,000
|
$
|
100,000
|
$
|
150,000
|
|
Offering
expenses
|
$
|
30,000
|
$
|
30,000
|
$
|
30,000
|
|
Net
proceeds
|
$
|
45,000
|
$
|
70,000
|
$
|
120,000
|
The net proceeds will be used as
follows:
|
Website
development
|
$
|
5,000
|
$
|
7,500
|
$
|
10,000
|
|
Product
Development
|
$
|
5,000
|
$
|
12,500
|
$
|
20,000
|
|
Marketing
and advertising
|
$
|
15,000
|
$
|
25,000
|
$
|
35,000
|
|
Establishing
an office
|
$
|
10,000
|
$
|
10,000
|
$
|
10,000
|
|
Salaries
|
$
|
0
|
$
|
12,500
|
$
|
25,000
|
|
Working
capital
|
$
|
10,000
|
$
|
2,500
|
$
|
20,000
|
Total offering expenses to be paid from
the proceeds of the offering are $25,000 for legal fees; $200 for printing our
prospectus; $4,500 for accounting/administrative fees; $500 for state securities
registration fees; $200 for our transfer agent; and $10.70 for our SEC filing
fee. The foregoing are approximations.
We will be able to begin operations
with the minimum funds described above. By raising additional
amounts, we will have the ability to create more software products with more
features; a better data base and better software tools that will allow us to
analyze the data more completely and in more ways; increase marketing and
advertising; add one or two additional employees; and provide for additional
working capital.
We will spend between $5,000 and
$10,000 for the preparation of our website which includes the cost of content
creation and links to and from our website. We have spent
nominal time designing the website. We intend to retain the services
of a website developer to create the website.
We will be developing software to
implement our business operations. The estimated cost to develop the
software is $5,000 to $20,000.
Marketing and advertising will be
focused on promoting products to the public. We also intend to print
sales material for distribution in newspapers. The cost of developing
the campaign is estimated to cost between $15,000 to $35,000.
We have leased office space at a
monthly minimum rate of $125. We will use $10,000 of the proceeds of
this offering to cover the cost of the office space and develop and maintain the
website and software tools. The $10,000 will pay for computer
equipment, leased computer processing time, telecommunications and other assets
as required to maintain the operations.
If we raise at least $100,000, we
intend to pay small salaries to our officers and principal contract software
engineers. In addition, subject to raising the maximum amount, we
intend to hire one or two sales employees to handle Internet and direct
transactions with our customers.
Working capital is the cost related to
operating our office. It is comprised of expenses for rent, telephone
service, mail, stationary, accounting, acquisition of office equipment and
supplies, expenses of filing reports with the SEC, travel, and general working
capital.
DETERMINATION
OF OFFERING PRICE
The price of the shares we are offering
was arbitrarily determined in order for us to raise up to a total of $150,000 in
this offering. The offering price bears no relationship whatsoever to our
assets, earnings, book value or other criteria of value. Among the factors
considered were:
* our
lack of operating history
* the
proceeds to be raised by the offering
|
*
|
the
amount of capital to be contributed by purchasers in this offering in
proportion to the amount of stock to be retained by our existing
stockholders, and
|
* our
relative cash requirements.
DILUTION
OF THE PRICE YOU PAY FOR YOUR SHARES
Dilution represents the difference
between the offering price and the net tangible book value per share immediately
after completion of this offering. Net tangible book value is the amount that
results from subtracting total liabilities and intangible assets from total
assets. Dilution arises mainly as a result of our arbitrary determination of the
offering price of the shares being offered. Dilution of the value of the shares
you purchase is also a result of the lower book value of the shares held by our
existing stockholders.
As of November 30, 2009, the net
tangible book value of our shares of common stock was a deficit of ($0.00) or
approximately ($0.00) per share based upon 15,000,000 shares
outstanding.
If
100% of the Shares Are Sold:
Upon completion of this offering, in
the event all of the shares are sold, the net tangible book value of the
16,500,000 shares to be outstanding will be $120,000 or approximately $0.00727
per share. The net tangible book value of the shares held by our existing
stockholders will be increased by $0.00727 per share without any additional
investment on their part. You will incur an immediate dilution from $0.10 per
share to $0.00727 per share.
After completion of this offering, if
1,500,000 shares are sold, you will own approximately 9.09% of the total number
of shares then outstanding for which you will have made a cash investment of
$150,000, or $0.10 per share. Our existing stockholders will own approximately
90.91% of the total number of shares then outstanding, for which they have made
contributions of cash totaling $15,000 or approximately $0.001 per
share.
If
1,125,000 Shares Are Sold:
Upon completion of this offering, in
the event all of the shares are sold, the net tangible book value of the
16,125,000 shares to be outstanding will be $82,500 or approximately $0.00512
per share. The net tangible book value of the shares held by our existing
stockholders will be increased by $0.00512 per share without any additional
investment on their part. You will incur an immediate dilution from $0.10 per
share to $0.00512 per share.
After completion of this offering, if
1,125,000 shares are sold, you will own approximately 6.98% of the total number
of shares then outstanding for which you will have made a cash investment of
$112,500, or $0.10 per share. Our existing stockholders will own approximately
93.02% of the total number of shares then outstanding, for which they have made
contributions of cash totaling $15,000 or approximately $0.001 per
share.
If
750,000 Shares Are Sold:
Upon completion of this offering, in
the event all of the shares are sold, the net tangible book value of the
15,750,000 shares to be outstanding will be $45,000 or approximately $0.00286
per share. The net tangible book value of the shares held by our existing
stockholders will be increased by $0.00286 per share without any additional
investment on their part. You will incur an immediate dilution from $0.10 per
share to $0.00286 per share.
After completion of this offering, if
1,500,000 shares are sold, you will own approximately 4.76% of the total number
of shares then outstanding for which you will have made a cash investment of
$75,000, or $0.10 per share. Our existing stockholders will own approximately
95.24% of the total number of shares then outstanding, for which they have made
contributions of cash totaling $15,000 or approximately $0.001 per
share.
The following table compares the
differences of your investment in our shares with the investment of our existing
stockholders.
Existing
Stockholders if all of the Shares are Sold:
|
Price
per share
|
$
|
0.001
|
|
Net
tangible book value per share before offering
|
$
|
0.00
|
|
Potential
gain to existing shareholders
|
$
|
0.00727
|
|
Net
tangible book value per share after offering
|
$
|
0.00727
|
|
Increase
to present stockholders in net tangible book value per
share
|
|
|
|
after
offering
|
$
|
0.00727
|
|
Capital
contributions
|
$
|
15,000.00
|
|
Number
of shares outstanding before the offering
|
|
15,000,000
|
|
Number
of shares after offering assuming the sale of the maximum
|
|
|
|
number
of shares
|
|
16,500,000
|
|
Percentage
of ownership after offering
|
|
90.91%
|
Purchasers of Shares in this Offering
1,500,000 Shares Sold
|
Price
per share
|
$
|
0.10
|
|
Dilution
per share
|
$
|
0.0927
|
|
Capital
contributions
|
$
|
150,000
|
|
Number
of shares after offering held by public investors
|
|
1,500,000
|
|
Percentage
of capital contributions by existing shareholders
|
|
9.09%
|
|
Percentage
of capital contributions by new investors
|
|
90.9%
|
|
Percentage
of ownership after offering
|
|
9.09%
|
Purchasers
of Shares in this Offering if 1,125,000 Shares Sold
|
Price
per share
|
$
|
0.10
|
|
Dilution
per share
|
$
|
0.0949
|
|
Capital
contributions
|
$
|
112,500
|
|
Number
of shares after offering held by public investors
|
|
1,125,000
|
|
Percentage
of capital contributions by existing shareholders
|
|
11.8%
|
|
Percentage
of capital contributions by new investors
|
|
88.2%
|
|
Percentage
of ownership after offering
|
|
6.98%
|
Purchasers
of Shares in this Offering if 750,000 Shares Sold
|
Price
per share
|
$
|
0.10
|
|
Dilution
per share
|
$
|
0.0971
|
|
Capital
contributions
|
$
|
75,000
|
|
Percentage
of capital contributions by existing shareholders
|
|
16.7%
|
|
Percentage
of capital contributions by new investors
|
|
83.3%
|
|
Number
of shares after offering held by public investors
|
|
750,000
|
|
Percentage
of ownership after offering
|
|
4.76%
|
PLAN
OF DISTRIBUTION; TERMS OF THE OFFERING
We are offering 1,500,000 shares of
common stock on a self-underwritten basis, 750,000 shares minimum, 1,500,000
shares maximum basis. The offering price is $0.10 per share. Funds from this
offering will be placed in a separate bank account with the Hongkong and
Shanghai Banking Corporation Limited (HSBC), Main Branch, 1 Queen’s Road
Central, Hong Kong. Its telephone number is
852-2748-8288. The funds will be maintained in the separate bank
account until we receive a minimum of $75,000 at which time we will remove those
funds and use the same as set forth in the Use of Proceeds section of this
prospectus. This account is not an escrow, trust or similar
account. It is merely a separate interest bearing multi-currency
savings account under our control where we have segregated your
funds. Your subscription will only be deposited in a separate bank
account under our name. As a result, if we are sued for any reason
and a judgment is rendered against us, your subscription could be seized in a
garnishment proceeding and you could lose your investment, even if we fail to
raise the minimum amount in this offering. Further, if we file a
voluntary bankruptcy petition or our creditors file an involuntary bankruptcy
petition, our assets will be seized by the bankruptcy trustee, including your
subscription, and used to pay our creditors. If that happens, you will lose your
investment, even if we fail to raise the minimum amount in this
offering. As a result, there is no assurance that your funds will be
returned to you if the minimum offering is not reached. Any funds
received by us thereafter will immediately used by us.
If we do not receive the minimum amount
of $75,000 within 270 days of the effective date of our registration statement,
all funds will be promptly returned to you without interest and without a
deduction of any kind. We will return your funds to you in the form a
cashier’s check sent Federal Express on the 271
st
day. During the 270 day period, no funds will be returned to you. You
will only receive a refund of your subscription if we do not raise a minimum of
$75,000 within the 270 day
period
referred to above. There are no finders involved in our
distribution. You will only have the right to have your funds
returned if we do not raise the minimum amount of the offering or there would be
a change in the material terms of the offering. The following are
material terms that would allow you to be entitled to a refund of your
money:
* extension
of the offering period beyond 270 days;
* change
in the offering price;
* change
in the minimum sales requirement;
* change
to allow sales to affiliates in order to meet the minimum sales
requirement;
|
*
|
change
in the amount of proceeds necessary to release the proceeds held in the
separate bank account; and,
|
If the changes above occur, any new
offering may be made by means of a post-effective amendment.
We will sell the shares in this
offering through our officers and directors. They will receive no
commission from the sale of any shares. They will not register as broker-dealers
under section 15 of the Securities Exchange Act of 1934 in reliance upon the
exemption from registration contained in Rule 3a4-1. Rule 3a4-1 sets forth those
conditions under which a person associated with an issuer may participate in the
offering of the issuer's securities and not be deemed to be a broker/dealer. The
conditions are that:
1. The person is not
statutorily disqualified, as that term is defined in Section 3(a)(39) of the
Act, at the time of his participation; and,
2. The person is not
compensated in connection with his participation by the payment of commissions
or other remuneration based either directly or indirectly on transactions in
securities;
3. The person is not at the
time of their participation, an associated person of a broker/dealer;
and,
4. The person meets the
conditions of Paragraph (a)(4)(ii) of Rule 3a4-1 of the Exchange Act, in that he
(A) primarily performs, or is intended primarily to perform at the end of the
offering, substantial duties for or on behalf of the Issuer otherwise than in
connection with transactions in securities; and (B) is not a broker or dealer,
or an associated person of a broker or dealer, within the preceding twelve (12)
months; and (C) do not participate in selling and offering of securities for any
Issuer more than once every twelve (12) months other than in reliance on
Paragraphs (a)(4)(i) or (a)(4)(iii).
Our officers and directors are not
statutorily disqualified, are not being compensated, and are not associated with
broker/dealers. They are and will continue to be our officers and directors at
the end of the offering and have not been during the last twelve months and are
currently not broker/dealers or associated with broker/dealers. They
will not participate in selling and offering securities for any issuer more than
once every twelve months.
Only after our registration statement
is declared effective by the SEC, do we intend to advertise, through tombstones,
and hold investment meetings in various states where the offering will be
registered. We will not utilize the Internet to advertise our
offering. Our officers and directors will also distribute the
prospectus to potential investors at the meetings, to business associates and to
their friends and relatives who are interested in us and a possible investment
in the offering. No shares purchased in this offering will be subject to any
kind of lock-up agreement.
Management and affiliates thereof will
not purchase shares in this offering to reach the minimum.
We intend to sell our shares in outside
the United States of America.
Section
15(g) of the Exchange Act
Our shares are covered by Section 15(g)
of the Securities Exchange Act of 1934, as amended, and Rules 15g-1 through
15g-6 and Rule 15g-9 promulgated there under. They impose additional sales
practice requirements on broker/dealers who sell our securities to persons other
than established customers and accredited investors (generally institutions with
assets in excess of $15,000,000 or individuals with net worth in excess of
$1,000,000 or annual income exceeding $150,000 or $300,000 jointly with their
spouses). While Section 15(g) and Rules 15g-1 through 15g-6 apply to
brokers-dealers, they do not apply to us.
Rule 15g-1 exempts a number of specific
transactions from the scope of the penny stock rules.
Rule 15g-2 declares unlawful
broker/dealer transactions in penny stocks unless the broker/dealer has first
provided to the customer a standardized disclosure document.
Rule 15g-3 provides that it is unlawful
for a broker/dealer to engage in a penny stock transaction unless the
broker/dealer first discloses and subsequently confirms to the customer current
quotation prices or similar market information concerning the penny stock in
question.
Rule 15g-4 prohibits broker/dealers
from completing penny stock transactions for a customer unless the broker/dealer
first discloses to the customer the amount of compensation or other remuneration
received as a result of the penny stock transaction.
Rule 15g-5 requires that a
broker/dealer executing a penny stock transaction, other than one exempt under
Rule 15g-1, disclose to its customer, at the time of or prior to the
transaction, information about the sales persons compensation.
Rule 15g-6 requires broker/dealers
selling penny stocks to provide their customers with monthly account
statements.
Rule 15g-9 requires broker/dealers to
approved the transaction for the customer's account; obtain a written agreement
from the customer setting forth the identity and quantity of the stock being
purchased; obtain from the customer information regarding his investment
experience; make a determination that the investment is suitable for the
investor; deliver to the customer a written statement for the basis for the
suitability determination; notify the customer of his rights and remedies in
cases of fraud in penny stock transactions; and, the NASD's toll free telephone
number and the
central
number of the North American Administrators Association, for information on the
disciplinary history of broker/dealers and their associated
persons. Because the penny stock rules impose additional
obligations on broker/dealers, many broker/dealers are unwilling to buy or sell
penny stock s or open accounts for customers who wish to buyer or sell penny
stock. As a result the penny stock rules may affect your ability to
resell your shares.
Offering
Period and Expiration Date
This offering will start on the date of
this prospectus and continue for a period of up to 270 days.
Procedures
for Subscribing
If you decide to subscribe for any
shares in this offering, you must
1. execute
and deliver a subscription agreement; and
2. deliver
a check or certified funds to us for acceptance or rejection.
All checks for subscriptions must be
made payable to SURNA INC.
Right
to Reject Subscriptions
We have the right to accept or reject
subscriptions in whole or in part, for any reason or for no reason. All monies
from rejected subscriptions will be returned immediately by us to the
subscriber, without interest or deductions. Subscriptions for securities will be
accepted or rejected within 48 hours after we receive them.
MANAGEMENT'S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This section of the prospectus includes
a number of forward-looking statements that reflect our current views with
respect to future events and financial performance. Forward-looking
statements are often identified by words like: believe, expect, estimate,
anticipate, intend, project and similar expressions, or words which, by their
nature, refer to future events. You should not place undue certainty
on these forward-looking statements, which apply only as of the date of this
prospectus. These forward-looking statements are subject to certain
risks and uncertainties that could cause actual results to differ materially
from historical results or our predictions.
We are a start-up stage corporation and
have not started operations or generated or realized any revenues from our
business operations.
Our auditors have issued a going
concern opinion. This means that our auditors believe there is
substantial doubt that we can continue as an on-going business for the next
twelve months unless we obtain additional capital to pay our
bills. This is because we have not generated any revenues and no
revenues are anticipated until we complete the development of our website,
locate suppliers of products, and sell products to our
customers. We have spent nominal time designing the
website. We intend to retain the services of a website developer to
create the website. Accordingly, we must raise
cash from
sources other than operations. Our only other source for cash at this
time is investments by others in our company. We must raise cash to
implement our project and begin our operations. Even if we raise the
maximum amount of money in this offering, we do not know how long the money will
last, however, we do believe it will last twelve months. We will not
begin operations until we raise money from this offering.
To meet our need for cash we are
attempting to raise money from this offering. We believe that we will
be able to raise enough money through this offering to maintain operations for
twelve months, but we cannot guarantee that once we begin operations we will
stay in business after twelve months. If we are unable to secure
enough suppliers of products at suitably low pricing or enough customers willing
to buy the products at higher than the price we have negotiated with our
suppliers, we may quickly use up the proceeds from the minimum amount of money
from this offering and will need to find alternative sources, like a second
public offering, a private placement of securities, or loans from our officers
or others in order for us to maintain our operations. At the present
time, we have not made any arrangements to raise additional cash, other than
through this offering. If we need additional cash and cannot raise it
we will either have to suspend operations until we do raise the cash, or cease
operations entirely. If we raise the minimum amount of money from
this offering, it will last a year but with limited funds available to develop
growth strategy. If we raise the maximum amount, we believe the
money will last a year and also provide funds for growth strategy.
If we raise less than the maximum
amount and we need more money we will have to revert to obtaining additional
money as described in this paragraph. Other than as described
in this paragraph, we have no other financing plans.
Plan
of Operation
Upon completion of our public offering,
our specific goal is to profitably sell products on our Internet website to the
public. We intend to accomplish the foregoing by the following
steps.
1. Complete
our public offering. We believe that we will raise sufficient capital
to begin our operations. We believe this could take up to 270
days. We will not begin operations until we have closed this
offering. We intend to concentrate all of our efforts on raising as
much capital as we can during this period. After we complete
our public offering, we intend to spend the funds as described in the Use of
Proceeds section of this prospectus.
2. After
completing the offering, we will immediately begin to establish our office and
acquire the equipment we need to begin operations. Establishing our
offices will take approximately a week. We have allocated $10,000 for
the initial setup of the office. We do not intend to hire
employees unless we raise at least $150,000.00. Richard Clarke, our
president and a member of the board of directors will handle our administrative
duties.
3.
We have spent time designing the website. We plan to retain a
website developer create a state of the art website to promote our
products. We expect to spend $5,000 to $10,000 for the website which
will include graphics and links from our site.
4. Marketing
and advertising will be focused on promoting our website and software
products. The advertising campaign may also include the design and
printing of various sales materials. We intend to market our website
through traditional sources such as advertising in magazines, billboards,
telephone directories and preparing and sending out flyers and mailers both
through the regular mail and via email. Advertising and promotion
will be an ongoing effort but the initial cost of developing the campaign is
estimated to cost between $15,000 and $35,000.
5. We
intend to continue to develop our software. We anticipate spending
between $5,000 and $20,000.
We anticipate that we will generate
revenues as soon as we beginning providing services to customers.
We will be conducting continuing
research with respect to our software. We are not going to buy or
sell any plant or significant equipment during the next twelve
months.
If we cannot generate sufficient
revenues to continue operations, we will suspend or cease
operations. If we cease operations, we do not know what we will do
and we do not have any plans to do anything.
Limited
operating history; need for additional capital
There is no historical financial
information about us upon which to base an evaluation of our
performance. We are in a start-up stage operations and have not
generated any revenues. We cannot guarantee we will be successful in
our business operations. Our business is subject to risks inherent in
the establishment of a new business enterprise, including limited capital
resources and possible cost overruns due to price and cost increases in services
and products.
To become profitable and competitive,
we have to locate and negotiate agreements with manufacturers to offer their
products for sale to us at pricing that will enable us to establish and sell the
products to our clientele at a profit. We are seeking equity
financing to provide for the capital required to implement our
operations.
We have no assurance that future
financing will be available to us on acceptable terms. If financing
is not available on satisfactory terms, we may be unable to continue, develop or
expand our operations. Equity financing could result in additional
dilution to existing shareholders.
Results
of operations
From
Inception on October 15, 2009 to November 30, 2009
During the period we incorporated the
company, hired the attorney, and hired the auditor for the preparation of this
registration statement. We have prepared an internal business
plan. We have reserved the domain names www.surna.com and
www.surna.org and commenced construction of our web site. Our loss since
inception is $15,000 for legal fees. We have not started our proposed
business operations and will not do so until we have completed this offering. We
expect to begin operations 100 days after we complete this
offering.
Since inception, we sold 15,000,000
shares of common stock to 7bridge Capital Partners Limited for
$15,000.00.
Liquidity
and capital resources
As of the date of this prospectus, we
have yet to generate any revenues from our business operations.
We issued 15,000,000 shares of common
stock pursuant to the exemption from registration contained in Regulation S of
the Securities Act of 1933. This was accounted for as a sale of
common stock.
As of November 30, 2009, our total
assets were $0.00 and our total liabilities were $0.00.
BUSINESS
General
We were incorporated in the State of
Nevada on October 15, 2009. We intend to develop software products and engage in
the business of providing software and statistical consulting services to
enterprises seeking to better manage and exploit information contained in their
databases and enhance their position in the market place.
As a part of this we plan to develop
software and commercial applications that will deal with “Complex Event
Processing” (or CEP). CEP is an information analysis technique that helps
discover information that can be inferred by analyzing and correlating aspects
of many other pieces of information, which are referred to as Events. The focus
of our initial software development will be to enhance existing “Open-Source
Software” applications for CEP, specifically through our surna.org website.
After this we plan to develop commercial software applications and related
consulting services through out surna.com website.
We have not generated any revenues and
the only operations we have engaged in is the development of a business plan,
planning our website and preliminary work on the development of our software
applications.
We have no plans to change our business
activities or to combine with another business, and we are not aware of any
events or circumstances that might cause its plans to change.
We have not begun operations and will
not begin operations until we completed this offering. Our plan of
operation is forward looking and there is no assurance that we will ever begin
operations. Our prospects for profitability are not favorable if you
consider numerous Internet-based companies have failed to achieve profits with
similar plans.
Blank
Check Issue
We are not a blank check corporation.
Section 7(b)(3) of the Securities Act of 1933, as amended defines the term
“blank check company” to mean, any development stage company that is issuing a
penny stock that, “(A) has no specific plan or purpose, or (B) has indicated
that its business plan is to merge with an unidentified company or companies.”
We have a specific plan and purpose. Our business purpose is to provide business
and statistical consulting services to enterprises seeking to enhance their
position in the market place. In Securities Act Release No. 6932 which adopted
rules relating to blank check offerings, the Securities and Exchange Commission
stated in II DISCUSSION OF THE RULES, A.
Scope of Rule 419
, that,
“Rule 419 does not apply to . . . start-up companies with specific business
plans . . . even if operations have not commenced at the time of the offering.”
Further, we have not indicated in any manner whatsoever, that we plan to merge
with an unidentified company or companies, nor do we have any plans to merge
with an unidentified company or companies.
We have no plans or intentions to be
acquired or to merge with an operating company nor do we have plans to enter
into a change of control or similar transaction or to change our
management.
Planned
Services and Products
Services
We intend to provide business
consulting services to enterprises seeking to enhance their understanding of
their internal operations and position in the market place. Our business will
provide the following services:
|
|
Management
consulting services will focus on issues such as skills assessment;
clarifying goals and identifying targets; evaluation of current staff
skill-sets for specific geospatial related capabilities; creation of
executive-level dashboards with customized geospatial views; adapting to a
specific corporate culture; creating educational plans for remediating
geospatial skills; and providing training classes in geospatial concepts
and time management.
|
|
|
Marketing
consulting services will focus on increasing the enterprise’s share of the
market place. This includes statistical models designed to
evaluate multiple events and identify factors which have a positive effect
upon sales, and analysis and cost justification for enterprise geospatial
software projects.
|
|
|
Consulting
services will also be designed to assist companies with proper
implementation of our suite of software products, including planning and
on-site commissioning for Surna software; support for software products
via phone and e-mail; and periodic updates for new software
releases.
|
Products
We intend to initially manufacture the
three software components and products, which for development purposes are
currently known as the Geospatial Complex Event Processing Engine, the Location
Aware Real-Time Resource Tracking Product, and the Geospatially Enabled Business
Intelligence Solution.
The Geospatial Complex Event Processing
Engine (GCEPE) is a software program written in the Java programming language
that will accepts real time events as inputs, will analyze that event against
the logic rules built into the program, and will then trigger additional actions
as an output. The GCEPE in its basic form is purely a server based component and
will not contain any end-user interfaces. The only interfaces to the GCEPE are
administrative tools to that will be used to describe the events, define the
logic rules, and specify the desired actions. Additionally there will be an
interface to monitor the performance of the engine.
The Location Aware Real-Time Resource
Tracking Product will be an integrated system of several open-source and
commercially available software programs. The system will include a web-browser
based interface that presents end-user information and a set of middleware
components that will process for the web-browser items and events that are being
tracked in tabular, graphic and map formats. Real-time position information in
reported to the Location Aware Real-Time Resource Tracking Product through
mobile networks and originates with third-party systems and hardware that have
capabilities for reporting their positional information. The GCEPE will be one
of the middleware
components
of the Location Aware Real-Time Resource Tracking product. The final composition
of the other components to be used, has not yet been determined, but it is
currently intended that one of these will be Esper for Java. Esper for Java is
descried by its developers as an Event Stream Processing and Event Correlation
Engine, and is designed for high-volume event processing. It is an open-source
software distribution available under a GNU General Public License from the web
site esper.codehaus.org.
The Geospatially Enabled Business
Intelligence Solution will be an integrated system of several open-source and
commercially available software packages. The system will include an interface
to present data in Reports and on a Dashboard layout that can be viewed and
printed, along with interactive data presentations in tabular, graphic and map
formats. This will in part consist of server-based software modules for
extracting, transforming and loading information from geospatially-enabled
third-party databases.
Geospatial Complex Event Processing,
Location Aware Real-Time Resource Tracking and Geospatially Enabled Business
Intelligence are internal development-stage descriptions for our products and
bundled software suites. We have not yet developed any brand names or branding
schemes for these products.
Target
Market
We intend to target corporations
located in the United States, Canada and on the Pacific Rim.
Marketing
Initially, our services will be
promoted by our officers and directors. They will discuss our services with
executives with which they have had previous contact. We also anticipate
utilizing several other marketing activities in our attempt to make our services
known to corporations and attract clientele. These marketing activities will be
designed to inform potential clients about the benefits of using our services
and will include the following: development and distribution of marketing
literature; direct mail and email; advertising; promotion of our web site; and
industry analyst relations.
Revenue
Initially, we intend to generate
revenue from three sources:
1. Term
Fee - By charging a fee for a given term for software and ongoing
support;
2. Fixed
Fee - By charging a fixed fee for projects and software
implimentation;
3. Hourly
Fee - By charging an hourly fee for advisory services.
We intend to develop and maintain a
database of all our clients so that we can anticipate various needs and
continuously build and expand our advisory services and software
products.
Competition
We compete with managerial and
technology consulting services. We will not be differentiating ourselves from
the foregoing, but merely competing with them. The managerial consulting market
is large and fragmented, and may be difficult to penetrate. Our competitive
position within the industry is negligible in light of the fact that we have not
started our operations. Older, well-established managerial consulting and
technology consulting firms with records of success currently attract customers.
Since we have not started operations, we cannot compete with them on the basis
of reputation. We do expect to compete with them on the basis of the range of
advisory services and the quality of advisory services that we intend to
provide. At this time, our principal method of competition will be through
personal contact with potential clients.
Insurance
We do not maintain any insurance and do
not intend to maintain insurance in the future. Because we do not have any
insurance, if we are made a party to a liability action, we may not have
sufficient funds to defend the litigation. If that occurs a judgment could be
rendered against us that could cause us to cease operations.
Websites
We currently have two websites:
surna.com and surna.org. Both websites are partially developed for
use in promoting and promoting services and products, with surna.org for
collaboration on open-source software development projects and surna.com for our
commercial software offerings. We also have registered the web domain surna.net.
We currently do not have a use for this but it may be utilized in the promotion
of our business in the future. The websites were developed by our officers and
directors without the assistance of independent website developers.
Source
and Availability of Products and Services
Our software will be developed by
independent developers on a contract basis and our own programmers, if we hire
them. Any packaged software will be manufactured by a number of suppliers and on
a unit basis. There is no shortage of raw material for our
software.
Seasonality and
Cyclicality
We do not believe we will be impacted
by seasonal changes, however; expenditures by direct marketers and advertisers
tend to vary in cycles that reflect overall economic conditions as well as
budgeting and buying patterns.
Proprietary
Rights
We have no patents, copyrights or
trademarks to protect our software. We protect it only by keeping it
a secret. If someone learns to reproduce it, they will be able to
compete with us.
Research
and Development
Our officers and directors have not
spent anything on research and development since our inception. Our
software and websites are only partially complete and development work so far
has been undertaken by contractors on a part-time, no-fee basis with the
expectation of potential remuneration in the future. Our officers and
directors have spent minimal time since our incorporation on the creation of
products or services and no other costs have been incurred. The money
budgeted for the software and website is based on these contractors being paid a
minimal amount to finish the initial development work; but further work will
likely be required after this and unless we can offer the developers a higher
level of compensation in the future it is unlikely they will be able to continue
to work on the development of these products. Our officers and
directors do not have the necessary expertise to undertake this and will not be
spending time on the task.
Properties
We own no property.
Government
Regulation
We are not currently subject to direct
federal, state or local regulation other than regulations applicable to
businesses generally or directly applicable to electronic
commerce. However, the Internet is increasingly
popular. As a result, it is possible that a number of laws and
regulations may be adopted with respect to the Internet. These laws
may cover issues such as user privacy, freedom of expression, pricing, content
and quality of products and services, taxation, advertising, intellectual
property rights and information security. Furthermore, the growth of
electronic commerce may prompt calls for more stringent consumer protection
laws. Several states have proposed legislation to limit the uses of personal
user information gathered online or require online services to establish privacy
policies. The Federal Trade Commission has also initiated action
against at least one online service regarding the manner in which personal
information is collected from users and provided to third parties. We
will not provide personal information regarding our users to third parties.
However, the adoption of such consumer protection laws could create uncertainty
in Web usage and reduce the demand for our products.
We not certain how business may be
affected by the application of existing laws governing issues such as property
ownership, copyrights, encryption and other intellectual property issues,
taxation, libel, obscenity and export or import matters. The vast
majority of such laws were adopted prior to the advent of the
Internet. As a result, they do not contemplate or address the unique
issues of the Internet and related technologies. Changes in laws
intended to address such issues could create uncertainty in the Internet market
place. Such uncertainty could reduce demand for services or increase the cost of
doing business as a result of litigation costs or increased service delivery
costs.
In addition, because our products are
available over the Internet in multiple states and foreign countries, other
jurisdictions may claim that we are required to qualify to do business in each
such state or foreign country. We are qualified to do business only
in Nevada. Our failure to qualify in a jurisdiction where it is
required to do so could subject it to taxes and penalties. It could
also hamper our ability to enforce contracts in such
jurisdictions. Currently, we are qualified to do business in
Nevada and will be qualified to do business in Hong Kong prior to commencing
operations. Other than Nevada and Hong Kong, we do not believe we
will have to qualify to do business in any other jurisdiction.
In Nevada, we are required to pay an
annual fee to the Nevada Secretary of State of $165. Nevada has no
corporate income taxes. That is why it is so attractive to do
business there.
Other than the foregoing, no
governmental approval is needed for the sale of our products in the United
States or the State of Nevada.
Employees;
Identification of Certain Significant Employees.
We are a development stage company and
currently have no employees, other than our officers and directors. We intend to
hire additional employees, primarily software developers and programmers, on an
as-needed basis. Employees will only be hired if we have sufficient
revenues and/or cash to pay for their services. Until we have
sufficient revenues and/or cash all work and development will be done by
independent contractors on a part-time, no-fee basis, but whom we will need to
retain on a commercial basis to be able to support future business
activities.
Offices
Our principal office is located at 2nd
Floor, 1901 Avenue of the Stars, Los Angeles, California, 90067. We
do not use any space at this office currently but pay a monthly fee of $125 for
use of the address and have the right to use space on an as-needed basis, for
additional fees. We will not utilize this until circumstances call
for it; our telephone number is 213-985-1939. Our registered agent
for service of process is the National Registered Agents Inc. of NV, located at
1000 East William Street, Suite 204, Carson City, Nevada 89701. Our
directors also occupy space in the offices 7bridge Capital Partners Limited, our
sole shareholder, located at 39th floor, One Exchange Square, 8 Connaught Road,
Central, Hong Kong. We use approximately 50 square feet of space in
this location on a rent free basis for six months commencing January 1, 2010.
The office space is currently adequate for our needs. If we grow and
more space is required, we intend to move our operations or rent additional
space in the Los Angeles office to supplement our existing
facilities.
MANAGEMENT
Officers
and directors
Our directors will serve until their
successor is elected and qualified. Our officers are elected by the board of
directors to a term of one (1) year and serves until his or his successor is
duly elected and qualified, or until he or she is removed from office. The board
of directors has no nominating, auditing or compensation
committees.
The names, addresses, ages and
positions of our present officers and directors are set forth
below:
|
Name
and Address
|
Age
|
Position(s)
|
|
Richard
Clarke
|
36
|
President,
Principal Executive Officer, Secretary,
|
|
1524,
10 Chater Road
|
|
and
a member of the Board of Directors
|
|
Central,
Hong Kong
|
|
|
|
|
|
|
|
T.C.
Tan
|
45
|
Principal
Financial Officer, Principal Accounting
|
|
99
Richardson Quay
|
|
Officer
and Treasurer
|
|
#18-13
Singapore 238258
|
|
|
|
|
|
|
|
Cherry
Ping-Wai Lim
|
44
|
Director
|
|
16F,
North Point Terrace
|
|
|
|
North
Point, Hong Kong
|
|
|
The people named above are expected to
hold their offices/positions until the next annual meeting of our
stockholders.
Background
of officers and directors
Richard
Clarke
Since our inception on October 15,
2009, Richard Clarke has been our President, principal executive officer,
Secretary, and a member of the board of Directors. He is currently
also a partner with Lim Clarke & Co, a Hong Kong based private equity and
venture capital group, and a director of ExpressTone (HK) Limited, a Hong Kong
based licensed telecommunications operator.
Teng-Chong
Tan
Since November 24, 2009, Teng-Chong
(“T.C.”) Tan has been our principal financial officer, principal
accounting officer. Since 2006, Mr Tan has been a private equity
investor, managing a family office. He invests mainly in Singapore, Hong Kong
and Chinese equity markets. He is also currently Chief Financial Officer for Lim
Clarke & Co, a Hong Kong based private equity and venture capital group.
From 2001 to 2006, he was a director and general manager in Shanghai of Actix
International, a U.K. based software company focused on the mobile
telecommunications industry.
Cherry
Ping-Wai Lim
Ping-Wai Lim, also known as Cherry Lim,
has been a member of our board of directors since January 10, 2010. Ms. Lim is
currently a partner with Lim Clarke & Co, a Hong Kong based private equity
and venture capital group; and also Executive Director (since July 2009) and
Chief Executive Officer (since December 2009) of Heyspace International Limited,
a private corporation headquartered in Hong Kong that develops and operates
online multi-player adventure games. From May 2008 until February
2009 she served as Vice President and Chief Operating Officer of Advanced ID
Corp., a Radio-frequency identification (RFID) technology company whose common
stock is traded on the Bulletin Board operated by the Financial Industry
Regulatory Authority (FINRA) under the symbol AIDO. Prior to this,
from March 2005 until May 2008, she was CEO of Tsing-Tech Innovations Co. Ltd.,
a Hong Kong based venture capital incubation and industrialization
fund. From June 30, 2008 to February 24, 2009 Ms. Lim was a Director
of EcoloCap Solutions Inc., which at the time was engaged in the business of
providing services and products related to the reduction of greenhouse gases and
whose common stock traded on the Bulletin Board under the symbol ECOS. From
January 10, 2003 to January 13, 2006 Ms. Lim was a Director of Manaris
Corporation (formerly C-Chip Technologies Corporation and now Avensys Corp.),
whose stock traded on the Bulletin Board under the symbol MANS.
During the past five years, Messrs.
Clarke, Tan and Ms. Lim have not been the subject of the following
events:
1. Any bankruptcy petition filed by or
against any business of which Messrs. Clarke, Tan and Ms. Lim were a general
partner or executive officer either at the time of the bankruptcy or within two
years prior to that time.
2. Any conviction in a criminal
proceeding or being subject to a pending criminal proceeding.
3. An order, judgment, or decree, not
subsequently reversed, suspended or vacated, or any court of competent
jurisdiction, permanently or temporarily enjoining, barring, suspending or
otherwise limiting Messrs. Clarke’s, Tan’s or Ms. Lim’s involvement in any type
of business, securities or banking activities.
4. Found by a court of competent
jurisdiction (in a civil action), the Securities and Exchange Commission or the
Commodity Future Trading Commission to have violated a federal or state
securities or commodities law, and the judgment has not been reversed, suspended
or vacated.
Audit
Committee Financial Expert
We do not have an audit committee
financial expert. We do not have an audit committee financial expert
because we believe the cost related to retaining a financial expert at this time
is prohibitive. Further, because we have no operations, at the
present time, we believe the services of a financial expert are not
warranted.
Conflicts of
Interest
The only conflict that we foresee is
that our officers and directors will devote time to projects that do not involve
us.
EXECUTIVE
COMPENSATION
The following table sets forth the
compensation paid by us for the last three fiscal years ending November 30, 2009
for each of our officers. This information includes the dollar value of base
salaries, bonus awards and number of stock options granted, and certain other
compensation, if any. The compensation discussed addresses all
compensation awarded to, earned by, or paid or named executive
officers.
Executive
Officer Compensation Table
|
|
|
|
|
|
|
Non-
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
Equity
|
Deferred
|
All
|
|
|
Name
|
|
|
|
|
|
Incentive
|
Compensa-
|
Other
|
|
|
and
|
|
|
|
Stock
|
Option
|
Plan
|
tion
|
Compen-
|
|
|
Principal
|
|
Salary
|
Bonus
|
Awards
|
Awards
|
Compensation
|
Earnings
|
sation
|
Total
|
|
Position
|
Year
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
|
Richard
Clarke
|
2009
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
President
|
2008
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
|
2007
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
T.C.
Tan
|
2009
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
CFO
|
2008
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
|
2007
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
We have no employment agreements with
any of our officers. We do not contemplate entering into any employment
agreements until such time as we begin profitable operations.
The compensation discussed herein
addresses all compensation awarded to, earned by, or paid to our named executive
officers.
There are no other stock option plans,
retirement, pension, or profit sharing plans for the benefit of our officers and
directors other than as described herein.
Compensation
of Directors
The members of our board of directors
are not compensated for their services as directors. The board has not
implemented a plan to award options to any directors. There are no contractual
arrangements with any member of the board of directors. We have no director’s
service contracts. The following table sets forth compensation paid
to our directors from inception on October 15, 2009 to our year end on November
30, 2009. Since that time, we have not paid any compensation to Mr.
Clarke or Ms. Lim as a director.
Director’s
Compensation Table
|
|
Fees
|
|
|
|
|
|
|
|
|
Earned
|
|
|
|
Nonqualified
|
|
|
|
|
or
|
|
|
Non-Equity
|
Deferred
|
|
|
|
|
Paid
in
|
Stock
|
Option
|
Incentive
Plan
|
Compensation
|
All
Other
|
|
|
|
Cash
|
Awards
|
Awards
|
Compensation
|
Earnings
|
Compensation
|
Total
|
|
Name
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
|
Richard
Clarke
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Cherry
Ping-Wai Lim
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Long-Term
Incentive Plan Awards
We do not have any long-term incentive
plans that provide compensation intended to serve as incentive for
performance.
Indemnification
Under our Articles of Incorporation and
Bylaws of the corporation, we may indemnify an officer or director who is made a
party to any proceeding, including a lawsuit, because of his position, if he
acted in good faith and in a manner he reasonably believed to be in our best
interest. We may advance expenses incurred in defending a proceeding. To the
extent that the officer or director is successful on the merits in a proceeding
as to which he is to be indemnified, we must indemnify him against all expenses
incurred, including attorney's fees. With respect to a derivative action,
indemnity may be made only for expenses actually and reasonably incurred in
defending the proceeding, and if the officer or director is judged liable, only
by a court order. The indemnification is intended to be to the fullest extent
permitted by the laws of the State of Nevada.
Regarding indemnification for
liabilities arising under the Securities Act of 1933, which may be permitted to
directors or officers under Nevada law, we are informed that, in the opinion of
the Securities and Exchange Commission, indemnification is against public
policy, as expressed in the Act and is, therefore, unenforceable.
PRINCIPAL
STOCKHOLDERS
The following table sets forth, as of
the date of this prospectus, the total number of shares owned beneficially by
our directors, officers and key employees, individually and as a group, and the
present owners of 5% or more of our total outstanding shares. The table also
reflects what their ownership will be assuming completion of the sale of all
shares in this offering. The stockholders listed below have direct ownership of
their shares and possesses sole voting and dispositive power with respect to the
shares
|
|
|
|
Number
of
|
Percentage
of
|
|
|
|
|
Shares
After
|
Ownership
After
|
|
|
Number
of
|
Percentage
of
|
Private
|
the
Private
|
|
|
Shares
|
Ownership
|
placement
|
placement
|
|
|
Before
the
|
Before
the
|
Assuming
all
|
Assuming
all of
|
|
Name
and Address
|
Private
|
Private
|
the
Shares are
|
the
Shares are
|
|
Beneficial
Owner
|
placement
|
placement
|
Sold
|
Sold
|
|
Richard
Clarke [1]
|
7,500,000
|
50.00%
|
7,500,000
|
45.45%
|
|
1524,
10 Chater Road
|
|
|
|
|
|
Central
|
|
|
|
|
|
Hong
Kong
|
|
|
|
|
|
|
|
|
|
|
|
Cherry
Ping-Wai Lim [1]
|
7,500,000
|
50.00%
|
7,500,000
|
45.45%
|
|
16F,
North Point Terrace
|
|
|
|
|
|
North
Point
|
|
|
|
|
|
Hong
Kong
|
|
|
|
|
|
|
|
|
|
|
|
T.C.
Tan
|
0
|
0.00%
|
0
|
0.00%
|
|
99
Robertson Quay #18-13
|
|
|
|
|
|
238258
|
|
|
|
|
|
Singapore
|
|
|
|
|
|
|
|
|
|
|
|
All
officers and directors
|
|
|
|
|
|
as
a group
|
|
|
|
|
|
(3
individuals)
|
15,000,000
|
100.00%
|
15,000,000
|
90.91%
|
[1] Title
to the common stock is held in the name of 7bridge Capital Partners Limited
which is owned entirely by Lim Clarke & Co Limited which is co-owned by Mr.
Clarke and Ms. Lim.
Messrs. Clarke and Tan and Ms. Lim are
our only promoters.
Future sales by existing
stockholders
A total of 15,000,000 shares of common
stock were issued to 7bridge Capital Partners Limited, a company indirectly
owned by our directors, all of which are restricted securities, as defined in
Rule 144 of the Rules and Regulations of the SEC promulgated under the
Securities Act. Under Rule 144, the shares can be publicly sold by affiliates,
subject to volume restrictions and restrictions on the manner of sale,
commencing six months after their acquisition, provided the Company was not a
shell company when the shares were issued or prior thereto. A shell
company is a corporation with no or nominal assets or its assets consist solely
of cash and no or nominal operations. Accordingly, 7bridge Capital
Partners Limited, our sole shareholder, may not resell its shares under Rule 144
of the Act for a period on one year from the date we are no longer a shell
company and we have filed a Form 8-K with the SEC and disclosed the information
required by Item 5.06 thereof.
Shares purchased in this offering,
which will be immediately resalable. The resale of shares could have a
depressive effect on the market price should a market develop for our common
stock. There is no assurance a market will ever develop for our
common stock.
There is no public trading market for
our common stock. There are no outstanding options or warrants to purchase, or
securities convertible into, our common stock. There is one holder of record for
our common stock.
DESCRIPTION OF
SECURITIES
Common
Stock
Our authorized capital stock consists
of 100,000,000 shares of common stock, par value $0.00001 per share. The holders
of our common stock:
* have
equal ratable rights to dividends;
|
*
|
are
entitled to share ratably in all of our assets available for distribution
to holders of common stock upon liquidation, dissolution or winding up of
our affairs;
|
*
do not
have preemptive, subscription or conversion rights and there are no redemption
or sinking fund provisions or rights; and
*
are
entitled to one non-cumulative vote per share on all matters on which
stockholders may vote.
We refer you to our Articles of
Incorporation, Bylaws and the applicable statutes of the State of Nevada for a
more complete description of the rights and liabilities of holders of our
securities.
Non-cumulative
voting
Holders of shares of our common stock
do not have cumulative voting rights, which means that the holders of more than
50% of the outstanding shares, voting for the election of directors, can elect
all of the directors to be elected, if they so choose, and, in that event, the
holders of the remaining shares will not be able to elect any of our directors.
After this offering is completed, assuming the sale of all of the shares of
common stock, Richard Clarke, one of our officers and directors, will own
approximately 90.91% of our outstanding shares.
Cash
dividends
As of the date of this prospectus, we
have not paid any cash dividends to stockholders. The declaration of any future
cash dividend will be at the discretion of our board of directors and will
depend upon our earnings, if any, our capital requirements and financial
position, our general economic conditions, and other pertinent conditions. It is
our present intention not to pay any cash dividends in the foreseeable future,
but rather to reinvest earnings, if any, in our business
operations.
Preferred
Stock
We are authorized to issue 100,000,000
shares of preferred stock with a par value of $0.00001 per share. The terms of
the preferred shares are at the discretion of the board of directors. Currently
no preferred shares are issued and outstanding.
Anti-takeover
provisions
There are no Nevada anti-takeover
provisions that may have the affect of delaying or preventing a change in
control.
Reports
After we complete this offering, we
will not be required to furnish you with an annual report. Further, we will not
voluntarily send you an annual report. We will be required to file reports with
the SEC under section 15(d) of the Securities Act. The reports will be filed
electronically. The reports we will be required to file are Forms 10-K, 10-Q,
and 8-K. You may read copies of any materials we file with the SEC at the SEC’s
Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may
obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. The SEC also maintains an Internet site that will contain
copies of the reports we file electronically. The address for the Internet site
is www.sec.gov.
Stock
transfer agent
Our stock transfer agent for our
securities will be Pacific Stock Transfer Company, 500 East Warm Springs Road,
Suite 240, Las Vegas, Nevada 89119. Its telephone number is (702)
361-3033.
CERTAIN
TRANSACTIONS
On October 15, 2009, we issued a total
of 15,000,000 shares of restricted common stock to 7bridge Capital Partners
Limited for $15,000.00. 7bridge Capital Partners Limited is
indirectly owned and controlled by Richard Clarke, our president and a director,
and by Cherry Ping-Wai Lim, one of our directors.
LITIGATION
We are not a party to any pending
litigation and none is contemplated or threatened.
EXPERTS
Our financial statements for the period
from inception to November 30, 2009, included in this prospectus have been
audited by Malone & Bailey, P.C., Independent Public Accountants, 10350
Richmond Avenue, Suite 800, Houston, Texas 77042, telephone (713) 343-4200 as
set forth in their report included in this prospectus. Their report is given
upon their authority as experts in accounting and auditing.
LEGAL MATTERS
The Law Office of Conrad C. Lysiak,
P.S. 601 West First Avenue, Suite 903, Spokane, Washington 99201, telephone
(509) 624-1475 passed on the legality of the shares being offered in this
prospectus.
FINANCIAL
STATEMENTS
Our fiscal year end is November 30. We
will provide audited financial statements to our stockholders on an annual
basis; the statements will be prepared by a firm of Chartered
Accountants.
Our financial statements from inception
to November 30, 2009 (audited) immediately follow:
|
Report
of Independent Registered Public Accounting Firm
|
F-1
|
|
|
|
|
Balance
Sheet as of November 30, 2009
|
F-2
|
|
|
|
|
Statement
of Expenses for the period from October 15, 2009 (inception) to November
30, 2009
|
F-3
|
|
|
|
|
Statement
of Stockholders’ Deficit for the period from October 15, 2009 (inception)
to November 30, 2009
|
F-4
|
|
|
|
|
Statement
of Cash Flows for the period from October 15, 2009 (inception) to November
30, 2009
|
F-5
|
|
|
|
|
Notes
to the Financial Statements – November 30, 2009
|
F-6
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors
Surna,
Inc.
(A
Development Stage Company)
Carson
City, Nevada
We have
audited the accompanying balance sheet of Surna, Inc. as of November 30, 2009,
and the related statements of expenses, cash flows and changes in stockholders’
deficit for the period from October 15, 2009 (inception) through November 30,
2009. These financial statements are the responsibility of Surna’s management.
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. Surna is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of Surna’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 Surna, Inc., as of November 30,
2009, and the results of its operations and its cash flows for the period from
October 15, 2009 (inception) through November 30, 2009, in conformity with
accounting principles generally accepted in the United States of
America.
The
accompanying financial statements have been prepared assuming that Surna Inc.
will continue as a going concern. As discussed in Note 2 to the financial
statements, Surna has suffered losses from operations which raise substantial
doubt about its ability to continue as a going concern. Management’s plans
regarding those matters also are described in Note 2. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
Malone
& Bailey, PC
www.malone-bailey.com
Houston,
Texas
January
27, 2010
F-1
|
|
|
(A
Development Stage Company)
|
|
Balance
Sheet as of
|
|
November
30, 2009
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
|
Total
Current Assets
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
$
|
-
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
TOTAL
CURRENT LIABILITIES
|
|
-
|
|
|
|
|
|
|
COMMITMENTS
AND CONTINGENCIES
|
|
-
|
|
|
|
|
|
STOCKHOLDERS’
Equity
|
|
|
|
|
|
|
|
|
|
Preferred
stock, $0.00001 par value, 100,000,000 shares authorized,
-
|
|
|
|
shares
issued and outstanding
|
|
-
|
|
|
|
|
|
|
Common
stock, $0.00001 par value; 100,000,000 shares authorized,
|
|
|
|
15,000,000
shares issued at $0.001and outstanding
|
|
15,000
|
|
|
Additional
paid-in capital
|
|
-
|
|
|
Deficit
accumulated during the development stage
|
|
(15,000)
|
|
|
|
TOTAL
STOCKHOLDERS’ DEFICIT
|
|
0
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
$
|
0
|
See the
accompanying summary of accounting policies and notes to the financial
statements
F-2
|
Surna
Inc.
|
|
(A
Development Stage Company)
|
|
Statement
of Expenses
|
|
For
the Period from October 15, 2009 (Inception) to November 30,
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
$
|
-
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
Professional
fees (company set up and legal fees)
|
|
15,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Expenses
|
|
15,000
|
|
|
|
|
|
LOSS
FROM OPERATIONS
|
|
(15,000)
|
|
|
|
|
|
NET
LOSS
|
$
|
(15,000)
|
|
|
|
|
|
BASIC
AND DILUTED NET LOSS PER SHARE
|
$
|
(0.00)
|
|
|
|
|
|
WEIGHTED
AVERAGE NUMBER OF
|
|
|
|
COMMON
SHARES OUTSTANDING,
|
|
|
|
BASIC
AND DILUTED
|
|
15,000,000
|
See the
accompanying summary of accounting policies and notes to the financial
statements
F-3
|
Surna
Inc.
|
|
(A
Development Stage Company)
|
|
Statement
of Stockholders' Deficit
|
|
For
the Period from October 15, 2009 (Inception) to November 30,
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
Deficit
|
|
|
|
|
|
|
|
Additional
|
|
|
During
|
|
Total
|
|
|
Common
Stock
|
|
|
Paid-in
|
|
|
Development
|
|
Stockholders'
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
stage
|
|
Fund
|
|
Balance
at inception,
|
|
|
|
|
|
|
|
|
|
|
October
15, 2009
|
-
|
|
|
-
|
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock issued to founder
|
|
|
|
|
|
|
|
|
|
|
for
cash on October 15, 2009
|
|
|
|
|
|
|
|
|
|
|
for
$0.001 per share
|
15,000,000
|
|
|
15,000
|
|
|
-
|
|
15,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the period
|
|
|
|
|
|
|
|
|
|
|
ended
November 30, 2009
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
-
|
|
|
(15,000)
|
|
(15,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
as of
|
|
|
|
|
|
|
|
|
|
|
November
30, 2009
|
15,000,000
|
|
$
|
15,000
|
|
$
|
(15,000)
|
$
|
-
|
See the
accompanying summary of accounting policies and notes to the financial
statements
F-4
|
Surna,
Inc
|
|
(A
Development Stage Company)
|
|
Statement
of Cash Flow
|
|
For
the Period from October 15, 2009 (Inception) to November 30,
2009
|
|
|
|
|
|
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
Net
loss
|
|
(15,000)
|
|
|
|
|
|
Adjustments
to reconcile net loss to cash used by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
NET
CASH USED BY OPERATING ACTIVITIES
|
|
(15,000)
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from sale of stock to investor
|
|
15,000
|
|
|
|
|
|
NET
INCREASE IN CASH AND CASH EQUIVALENTS
|
|
-
|
|
|
|
|
|
Cash
and cash equivalents, beginning of period
|
$
|
-
|
|
|
|
|
|
Cash
and cash equivalents, end of period
|
$
|
-
|
See the
accompanying summary of accounting policies and notes to the financial
statements
F-5
Surna,
Inc
(A
DEVELOPMENT STAGE Company)
Notes
to the Financial Statements
NOTE
1 – ORGANIZATION AND BUSINESS OPERATIONS
Surna Inc
was incorporated in Nevada, USA, on October 15, 2009. The Company has limited
operations and in accordance with FASB AC 915-15, is considered a development
stage company, and has had no revenues from operations to date.
Initial
operations have included organization, capital formation, target market
identification, and marketing plans. Management is planning to develop a website
(surna.com) and will offer to major corporations globally state of the art
management software that will enhance business competiveness.
The
Company fiscal year end is June 30. This is an interim audit from
inception on October 15, 2009 to November 30, 2009.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America
(“GAAP”) and the Securities and Exchange Commission Act 1934.
The
preparation of financial statements in conformity with generally accepted
accounting principles in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting periods. Actual results could materially differ from those
estimates.
Cash
and Cash Equivalents
For
purposes of the statement of cash flows, the Company considers all highly liquid
investments and short-term debt instruments with original maturities of three
months or less to be cash equivalents. As of Nov 30, 2009, there were no cash
equivalents.
Development
Stage Company
The
Company complies with Statement of Financial Accounting Standard ASC 915-15 and
the Securities and Exchange Commission Exchange Act 7 for its characterization
of the Company as development stage.
F-6
Income
Taxes
The
Company accounts for income taxes under the Financial Accounting Standards Board
of Financial Accounting Standard ASC 740, "Accounting for Income Taxes." Under
ASC 740, deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
basis. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Under ASC 740, the effect
on deferred tax assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date. There was no current or
deferred income tax expense or benefits for the periods ending November 30,
2009.
Basic
and Diluted Net Loss per Common Share
Basic net
loss per common share is computed by dividing net loss by the weighted-average
number of common shares outstanding during the period. Diluted net loss per
common share is determined using the weighted-average number of common shares
outstanding during the period, adjusted for the dilutive effect of common stock
equivalents. In periods when losses are reported, the weighted-average number of
common shares outstanding excludes common stock equivalents, because their
inclusion would be anti-dilutive.
Fair
Value of Financial Instruments
The
carrying value of cash and cash equivalents, accounts payable and accrued
expenses and other liabilities approximates fair value due to the short term
maturity of these instruments. The carrying value of the notes payable,
approximate their fair value as November 30, 2009.
Recent
Accounting Pronouncements
NOTE
3 - GOING CONCERN
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern, which contemplates, among other things, the
realization of assets and satisfaction of liabilities in the normal course of
business. The Company has net losses for the period from inception to
November 30, 2009 of $15,000. The Company intends to fund operations
through sales and equity financing arrangements, which may be insufficient to
fund its capital expenditures, working capital and other cash requirements
through the next fiscal year ending June 30, 2010.
The
ability of the Company to emerge from the development stage is dependent upon
the Company's successful efforts to raise sufficient capital and then attaining
profitable operations. These factors, among others, raise substantial doubt
about the Company's ability to continue as a going concern. These financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
F-7
NOTE
4 – INCOME TAXES
The
Company has tax losses which may be applied against future taxable income. The
potential tax benefits arising from these loss carry forwards expire beginning
in 2029 and are offset by a valuation allowance due to the uncertainty of
profitable operations in the future. The net operating loss carry forward was
$15,000 at November 30, 2009. The significant components of the deferred tax
asset as of November 30, 2009 are as follows:
|
Net
operating loss carry forwards
|
$
|
15,000
|
|
Valuation
allowance
|
|
(15,000)
|
|
Net
deferred tax asset
|
$
|
-
|
NOTE 5 – STOCKHOLDERS’
EQUITY
Surna
issued 15,000,000 shares of common stock (founder’s shares) at par value of
$0.00001 on and about October 15, 2009 to 7Bridge Capital Partners.
NOTE
6 – COMMITMENTS
We
neither own nor lease any real or personal property. Our principal office
is in the office of our president, pursuant to a verbal agreement on a
rent-free month-to-month basis. Such costs are immaterial to the
financial statements and accordingly have not been reflected therein.
F-8
Until _____________ 2010, ninety days
after the date of this prospectus, all dealers effecting transactions in our
registered securities, whether or not participating in this distribution, may be
required to deliver a prospectus. This is in addition to the obligation of
dealers to deliver a prospectus when acting as underwriters and with respect to
their unsold allotments or subscriptions.
PART
II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM
13. OTHER EXPENSES OF ISSUANCE
AND DISTRIBUTION.
The estimated expenses of the offering
(assuming all shares are sold), all of which are to be paid by the registrant,
are as follows:
|
SEC
Registration Fee
|
$
|
10.70
|
|
Printing
Expenses
|
|
200.00
|
|
Accounting
Fees and Expenses
|
|
4,089.30
|
|
Legal
Fees and Expenses
|
|
25,000.00
|
|
Blue
Sky Fees/Expenses
|
|
500.00
|
|
Transfer
Agent Fees
|
|
200.00
|
|
TOTAL
|
$
|
30,000.00
|
ITEM
14. INDEMNIFICATION OF DIRECTORS
AND OFFICERS.
The only statute, charter provision,
bylaw, contract, or other arrangement under which any controlling person,
director or officer of the Registrant is insured or indemnified in any
manner
against
any liability which he may incur in his capacity as such, is as
follows:
|
1.
|
Article
3 of the Articles of Incorporation of the company, filed as Exhibit 3.1 to
the Registration Statement.
|
|
2.
|
Article
X of the Bylaws of the company, filed as Exhibit 3.2 to the Registration
Statement.
|
|
3.
|
Nevada
Revised Statutes, Chapter 78.
|
The general effect of the foregoing is
to indemnify a control person, officer or director from liability, thereby
making the company responsible for any expenses or damages incurred by such
control person, officer or director in any action brought against them based on
their conduct in such capacity, provided they did not engage in fraud or
criminal activity.
ITEM
15. RECENT SALES OF UNREGISTERED
SECURITIES.
Since inception, the Registrant has
sold the following securities that were not registered under the Securities Act
of 1933, as amended.
|
Name
and Address
|
Date
|
Shares
|
Consideration
|
|
7bridge
Capital Partners Limited
|
October
15, 2009
|
15,000,000
|
$
|
15,000.00
|
|
39
th
Floor, One Exchange Square
|
|
|
|
|
|
8
Connaught Place
|
|
|
|
|
|
Central,
Hong Kong
|
|
|
|
|
We issued the foregoing restricted
shares of common stock to one of our officers and directors pursuant to the
exemption from registration contained in Regulation S of the Securities Act of
1933. The transaction took place outside the United States of America
with a non-US person.
ITEM
16.
EXHIBITS
.
The following exhibits are filed as
part of this registration statement, pursuant to Item 601 of Regulation
S-K.
|
Exhibit
No.
|
Document
Description
|
|
3.1
|
Articles
of Incorporation.
|
|
3.2
|
Bylaws.
|
|
4.1
|
Specimen
Stock Certificate.
|
|
5.1
|
Opinion
of The Law Office of Conrad C. Lysiak, P.S.
|
|
23.1
|
Consent
of MaloneBailey LLP, Registered Public Accounting Firm.
|
|
23.2
|
Consent
of The Law Office of Conrad C. Lysiak, P.S.
|
|
99.1
|
Subscription
Agreement.
|
ITEM
17. UNDERTAKINGS.
A.
The
undersigned Registrant hereby undertakes:
(1)
To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement to:
(a) include
any prospectus required by Section 10(a)(3) of the Securities Act;
(b) reflect
in the prospectus any facts or events arising after the effective date of this
Registration Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the
information set forth in this Registration Statement. Notwithstanding the
foregoing, any increase or decrease in the volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) under the Securities Act if, in the
aggregate, the changes in volume and price represent no more than a 20% change
in maximum aggregate offering price set forth in the “Calculation of
Registration Fee” table in the effective registration statement;
and
(c) include
any additional or changed material information with respect to the plan of
distribution.
(2) That, for the
purpose of determining any liability under the Securities Act, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3)
To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) To provide to
the underwriters at the closing specified in the underwriting agreement
certificates in such denominations and registered in such names as required by
the underwriter to permit prompt delivery to each purchaser.
(5) For purposes
of determining any liability under the Securities Act, the information omitted
from the form of prospectus filed as part of a registration statement in
reliance upon Rule 430A and contained in the form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of the registration statement as of the time it was
declared effective.
(6) For the
purpose of determining any liability under the Securities Act, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(7) For the
purpose of determining liability under the Securities Act to any
purchaser:
Each prospectus filed pursuant to
Rule 424(b) under the Securities Act 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 (§§230.430A of this
chapter), 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.
(8) For the
purpose of determining liability of the registrant under the Securities Act to
any purchaser in the initial distribution of securities:
The undersigned registrant undertakes
that in a primary offering of securities of the undersigned registrant pursuant
to this registration statement, regardless of the underwriting method used to
sell the securities to the purchaser, if the securities are offered or sold to
such purchaser by means of any of the following communications, the undersigned
registrant will be a seller to the purchaser and will be considered to offer or
sell such securities to such purchaser:
(a) Any
preliminary prospectus or prospectus of the undersigned registrant relating to
the offering required to be filed pursuant to Rule 424 of this
chapter;
(b) Any
free writing prospectus relating to the offering prepared by or on behalf of the
undersigned registrant or used or referred to by the undersigned
registrant;
(c) The
portion of any other free writing prospectus relating to the offering containing
material information about the undersigned registrant or its securities provided
by or on behalf of the undersigned registrant; and
(d) Any
other communication that is an offer in the offering made by the undersigned
registrant to the purchaser.
B.
Insofar
as indemnification for liabilities arising under the Securities 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
Securities Act and is, therefore, unenforceable. 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.
To
provide to the underwriter at the closing specified in the Underwriting
Agreement certificates in such denominations and registered in such names as
required by the underwriter to permit prompt delivery to each
purchaser.
D.
The
undersigned Registrant hereby undertakes that:
(1) For purposes
of determining any liability under the Securities Act of 1933, the information
omitted from the form of prospectus filed as part of this registration statement
in reliance upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this registration statement as of the time it was
declared effective.
(2) For the
purpose of determining any liability under the Securities Act of 1933, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide
offering
thereof.
SIGNATURES
Pursuant to the requirements of the
Securities Act of 1933, the registrant certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing of this Form S-1
Registration Statement and has duly caused this Form S-1 Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in
Hong Kong, China on this 27
th
day
of January 2010.
|
|
SURNA
INC.
|
|
|
|
|
BY:
|
RICHARD
CLARKE
|
|
|
|
Richard
Clarke
|
|
|
|
President
and Principal Executive Officer
|
|
|
|
|
BY:
|
T. C.
TAN
|
|
|
|
T.
C. Tan
|
|
|
|
Treasurer,
Principal Financial Officer and Principal Accounting
Officer
|
KNOW ALL MEN BY THESE PRESENT, that
each person whose signature appears below constitutes and appoints Richard
Clarke as true and lawful attorney-in-fact and agent, with full power of
substitution, for her and in her name, place and stead, in any and all
capacities, to sign any and all amendment (including post-effective amendments)
to this registration statement, and to file the same, therewith, with the
Securities and Exchange Commission, and to make any and all state securities law
or blue sky filings, granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in about the premises, as fully to all intents and purposes
as she might or could do in person, hereby ratifying the confirming all that
said attorney-in-fact and agent, or any substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the
Securities Act of 1933, this Form S-1 Registration Statement has been
signed by the following persons in the capacities and on the dates
indicated:
|
Signature
|
Title
|
Date
|
|
|
|
|
|
RICHARD
CLARKE
|
President,
Principal Executive Officer and
|
January
27, 2010
|
|
Richard
Clarke
|
a
member of the Board of Directors
|
|
|
|
|
|
|
T. C.
TAN
|
Treasurer,
Principal Financial Officer,
|
January
27, 2010
|
|
T.
C. Tan
|
Principal
Accounting Officer and a member
|
|
|
|
of
the Board of Directors
|
|
|
|
|
|
|
CHERRY PING-WAI
LIM
|
Member
of the Board of Directors
|
January
27, 2010
|
|
Cherry
Ping-Wai Lim
|
|
|
EXHIBIT
INDEX
|
Exhibit
No.
|
Document
Description
|
|
3.1
|
Articles
of Incorporation.
|
|
3.2
|
Bylaws.
|
|
4.1
|
Specimen
Stock Certificate.
|
|
5.1
|
Opinion
of The Law Office of Conrad C. Lysiak, P.S., regarding the legality of the
Securities being registered.
|
|
23.1
|
Consent
of MaloneBailey LLP, Registered Public Accounting Firm.
|
|
23.2
|
Consent
of The Law Office of Conrad C. Lysiak, P.S.
|
|
99.1
|
Subscription
Agreement.
|