As filed with the Securities and Exchange Commission on July 27, 2007
Registration No. 333-_____
 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
 
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
  
CARBON SCIENCES, INC.
(Name of small business issuer in its charter)
 
Nevada  
 
1481
 
20-5451302
(State or other Jurisdiction
 
(Primary Standard Industrial  
 
(I.R.S. Employer  
of Incorporation or Organization)
 
Classification Code Number)
 
Identification No.)
 
  50 Castilian Dr. Suite C
Santa Barbara, California 93117
(805) 690-9090
(Address and telephone number of principal executive offices and principal place of business)
 
Derek W. McLeish
Chief Executive Officer
Carbon Sciences, Inc.
  50 Castilian Dr. Suite C
Santa Barbara, California 93117
(805) 690-9090
(Name, address and telephone number of agent for service)

Copies to:
Gregory Sichenzia, Esq.
Marcelle S. Balcombe, Esq.
Sichenzia Ross Friedman Ference LLP
61 Broadway, 32nd Flr.
New York, New York 10006
(212) 930-9700
(212) 930-9725 (fax)

APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement becomes effective.

If any securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box: x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o ________

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o ________

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o ________
 
If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. o ________




 
     
 
   
 
   
PROPOSED
       
  TITLE OF EACH CLASS OF SECURITIES TO BE  REGISTERED    
AMOUNT TO BE 
REGISTERED (1)
   
PROPOSED
MAXIMUM  
OFFERING PRICE 
PER SHARE (2)   
   
MAXIMUM 
 AGGREGATE 
OFFERING PRICE    
   
AMOUNT OF 
REGISTRATION 
FEE   
 
                           
 Common stock, $.001 par value (3)
   
32,100,000
 
$
0.10
 
$
3,210,000
 
$
98.55
 
 Total
           
$
3,210,000
 
$
98.55
 

 
(1) Includes shares of our common stock, par value $0.001 per share, issued to the selling stockholders prior to the date of this prospectus which may be offered pursuant to this registration statement.

(2) Estimated solely for the purpose of calculating the registration fee required by Section 6(B) of the Securities Act of 1933, as amended, and computed pursuant to Rule 457 under the Securities Act.
 
(3) Includes 100% of the shares of our common stock which we issued to the selling stockholders prior to the date of this prospectus under certain Subscription Agreements in October 2006 and March 2007.
 
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
 


 
2

 
 
THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
 
PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION, DATED JULY 27, 2007
 
CARBON SCIENCES, INC.
 
32,100,000 SHARES OF
 
COMMON STOCK
 
This prospectus relates to the resale by the selling stockholders of up to 32,100,000 shares of our common stock presently outstanding. The selling stockholders may be deemed underwriters of the shares of common stock, which they are offering. We will pay the expenses of registering these shares.

We are not selling any shares of common stock in this offering and therefore will not receive any proceeds from this offering. We have paid the expenses of preparing this prospectus and the related registration expenses.

The selling stockholders will sell shares from time to time at a fixed price equal $0.10 per share. Our common stock is not traded on any national securities exchange and is not quoted on any over-the-counter market. If our shares become quoted on the Over-The-Counter Bulletin Board, sales will be made at prevailing market prices or privately negotiated prices.
 
INVESTING IN THESE SECURITIES INVOLVES SIGNIFICANT RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 9.
 
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
 
The date of this prospectus is July 27, 2007.
 
The information in this Prospectus is not complete and may be changed. This Prospectus is included in the Registration Statement that was filed Carbon Sciences, Inc. with the Securities and Exchange Commission. The selling stockholders may not sell these securities until the registration statement becomes effective. This Prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the sale is not permitted.
 


 
3

 
 
TABLE OF CONTENTS  
 
 
 
 
Cautionary Note Regarding Forward-Looking Statements
 
5
Prospectus Summary
 
6
Risk Factors
 
8
Use Of Proceeds
 
11
Management’s Discussion And Analysis Of Financial Condition And Results Of Operations
 
12
Description Of Business
 
15
Description Of Property
 
16
Legal Proceedings
 
16
Management
 
17
Executive Compensation
 
19
Certain Relationships And Related Transactions
 
19
Security Ownership Of Certain Beneficial Owners And Management
 
19
Description Of Securities
 
20
Commission’s Position On Indemnification For Securities Act Liabilities
 
20
Plan Of Distribution
 
21
Selling Stockholders
 
23
Legal Matters
 
25
Experts
 
25
Available Information
 
26
Index to Financial Statements
 
F-1
 


 
4

 
 
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
This prospectus and any prospectus supplement contain forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events.
 
In some cases, you can identify forward-looking statements by words such as "may," "should," "expect," "plan," "could," "anticipate," "intend," "believe," "estimate," "predict," "potential," "goal," or "continue" or similar terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks outlined under "Risk Factors," that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements.
 
Unless we are required to do so under U.S. federal securities laws or other applicable laws, we do not intend to update or revise any forward-looking statements.
 

 
5

 
 
PROSPECTUS SUMMARY
 
The following summary highlights selected information contained in this prospectus. This summary does not contain all the information you should consider before investing in the securities. Before making an investment decision, you should read the entire prospectus carefully, including the "risk factors" section, the financial statements and the notes to the financial statements.

 
CARBON SCIENCES, INC.
OUR BUSINESS

We are developing a technology to convert the greenhouse gas, carbon dioxide (CO2), into a useful form that will not contribute to global warming. We call this technology GreenCarbon™ Technology.  By eliminating harmful CO2 from human created sources, such as power plants and industrial factories, management believes that our technology will provide a partial solution to the problem of global warming.

GreenCarbon™ Technology is initially targeted at coal-fired electrical power plants and fuel production plants.
 
We were incorporated in the State of Nevada on August 25, 2006, as Zingerang, Inc. Our name was changed to Carbon Sciences, Inc. on April 9, 2007. Our principal executive offices are located at 50 Castilian Dr. Suite C, Santa Barbara, California 93117, and our telephone number is (805) 690-9090. Our fiscal year end is December 31.
 
 
The Offering
 
 
 
 
 
Common stock offered by selling stockholders  
 
Up to 32,100,000 shares, including the following:  
 
 
 
 
 
-      up to 28,000,000 shares of common stock issued prior to the date of this prospectus to certain of the selling stockholders pursuant to certain Subscription Agreements in October 2006 for an aggregate purchase price of $420,000, and  
 
 
 
 
 
-       1,200,000 shares of common stock issued prior to the date of this prospectus to certain of the selling stockholders pursuant to certain Subscription Agreements in October 2006, for an aggregate purchase price of $120,000, and
 
-        2,900,000 shares of common stock issued prior to the date of this prospectus to certain of the selling stockholders pursuant to certain Subscription Agreements in March 2007 for an aggregate purchase price of $290,000.
 
 
 
 
 
This number represents 21.76% of our current outstanding stock.  
 
 
 
Common stock to be outstanding after the offering  
 
Up to 147,542,000 shares
 
 
 
Use of proceeds
 
We will not receive any proceeds from the sale of the common stock hereunder. 
 
 
 
 
The above information regarding common stock to be outstanding after the offering is based on 147,542,000 shares of common stock outstanding as of July 16, 2007 which includes the shares being offered by the selling stockholders in this prospectus.
 

 
6

 
 
TRANSACTIONS BEING REGISTERED IN THIS PROSPECTUS
 
ROUND 1   2006 OFFERING*
 
In October 2006, we entered into Subscription Agreements with several accredited investors pursuant to which the investors subscribed to purchase an aggregate amount of up to $420,000 in shares of our common stock, or a total of 28,000,000 shares.

We granted “piggy-back” registration rights to the investors in our Round 1 2006 Offering by agreeing to include their shares of common stock in registration statements (other than on Form S-8, S-4 or similar Forms) subsequently filed by us.
 
ROUND   2 2006 OFFERING*

In October 2006, we entered into Subscription Agreements with several accredited investors pursuant to which the investors subscribed to purchase an aggregate amount of up to $120,000 in shares of our common stock, or a total of 1,200,000 shares.

We granted “piggy-back” registration rights to the investors in our Round 2 2006 Offering by agreeing to include their shares of common stock in registration statements (other than on Form S-8, S-4 or similar Forms) subsequently filed by us.

ROUND   3 2007 OFFERING*

In March 2007, we entered into Subscription Agreements with several accredited investors pursuant to which the investors subscribed to purchase an aggregate amount of up to $290,000 in shares of our common stock, or a total of 2,900,000 shares.

We granted “piggy-back” registration rights to the investors in our Round 3 2007 Offering by agreeing to include their shares of common stock in registration statements (other than on Form S-8, S-4 or similar Forms) subsequently filed by us.
 
*We claim an exemption from the registration requirements of the Act for the private placement of these securities pursuant to Section 4(2) of the Act and/or Regulation D promulgated thereunder since, among other things, the transaction did not involve a public offering, the investors were accredited investors and/or qualified institutional buyers, the investors had access to information about us and their investment, the investors took the securities for investment and not resale, and we took appropriate measures to restrict the transfer of the securities.


 
 
RISK FACTORS
 
This investment has a high degree of risk. Before you invest you should carefully consider the risks and uncertainties described below and the other information in this prospectus. If any of the following risks actually occur, our business, operating results and financial condition could be harmed and the value of our stock could go down. This means you could lose all or a part of your investment.
 
RISKS RELATED TO OUR BUSINESS AND INDUSTRY

OUR LIMITED OPERATING HISTORY DOES NOT AFFORD INVESTORS A SUFFICIENT HISTORY ON WHICH TO BASE AN INVESTMENT DECISION.

We were formed in August 2006 and are currently developing a new technology that has not yet gained market acceptance. There can be no assurance that at this time we will operate profitably or that we will have adequate working capital to meet our obligations as they become due.

Investors must consider the risks and difficulties frequently encountered by early stage companies, particularly in rapidly evolving markets. Such risks include the following:
 
·
competition;
 
·
need for acceptance of products;
 
·
ability to continue to develop and extend brand identity;
 
·
ability to anticipate and adapt to a competitive market;
 
·
ability to effectively manage rapidly expanding operations;
 
·
amount and timing of operating costs and capital expenditures relating to expansion of our business, operations, and infrastructure; and
 
·
dependence upon key personnel.

We cannot be certain that our business strategy will be successful or that we will successfully address these risks. In the event that we do not successfully address these risks, our business, prospects, financial condition, and results of operations could be materially and adversely affected.
 
WE MAY BE UNABLE TO MANAGE OUR GROWTH OR IMPLEMENT OUR EXPANSION STRATEGY.

We may not be able to expand our product and service offerings, our client base and markets, or implement the other features of our business strategy at the rate or to the extent presently planned. Our projected growth will place a significant strain on our administrative, operational and financial resources. If we are unable to successfully manage our future growth, establish and continue to upgrade our operating and financial control systems, recruit and hire necessary personnel or effectively manage unexpected expansion difficulties, our financial condition and results of operations could be materially and adversely affected.

WE MAY NOT BE ABLE TO SUCCESSFULLY DEVELOP AND COMMERCIALIZE OUR TECHNOLOGIES WHICH WOULD RESULT IN CONTINUED LOSSES AND MAY REQUIRE US TO CURTAIL OR CEASE OPERATIONS.

We are currently developing our technology and a commercial product. We have not generated any revenues and we are unable to project when we will achieve profitability, if at all. As is the case with any new technology, we expect the development process to continue. We cannot assure that our engineering resources will be able to develop the product fast enough to meet market requirements. There can also be no assurance that our product will gain market acceptance and that we will be able to successfully commercialize the technologies. The failure to successfully develop and commercialize the technologies would result in continued losses and may require us to curtail or cease operations.

OUR REVENUES ARE DEPENDENT UPON ACCEPTANCE OF OUR PRODUCTS BY THE MARKET; THE FAILURE OF WHICH WOULD CAUSE TO CURTAIL OR CEASE OPERATIONS.

We believe that virtually all of our revenues will come from the sale or license of our products. As a result, we will continue to incur substantial operating losses until such time as we are able to generate revenues from the sale or license of our products. There can be no assurance that businesses and customers will adopt our technology and products, or that businesses and prospective customers will agree to pay for or license our products. In the event that we are not able to significantly increase the number of customers that purchase or license our products, or if we are unable to charge the necessary prices or license fees, our financial condition and results of operations will be materially and adversely affected.


 
8
WE DO NOT MAINTAIN THEFT OR CASUALTY INSURANCE, AND ONLY MAINTAIN MODEST LIABILITY AND PROPERTY INSURANCE COVERAGE AND THEREFORE WE COULD INCUR LOSSES AS A RESULT OF AN UNINSURED LOSS.

We cannot assure that we will not incur uninsured liabilities and losses as a result of the conduct of our business. Any such uninsured or insured loss or liability could have a material adverse affect on our results of operations.

IF WE LOSE KEY EMPLOYEES AND CONSULTANTS OR ARE UNABLE TO ATTRACT OR RETAIN QUALIFIED PERSONNEL, OUR BUSINESS COULD SUFFER.

Our success is highly dependent on our ability to attract and retain qualified scientific, engineering and management personnel. We are highly dependent on our management, including Mr. Derek McLeish, who has been critical to the development of our technology and business. The loss of the services of Mr. McLeish could have a material adverse effect on our operations. We do not have an employment agreement with Mr. McLeish. Accordingly, there can be no assurance that he will remain associated with us. His efforts will be critical to us as we continue to develop our technology and as we attempt to transition from a development stage company to a company with commercialized products and services. If we were to lose Mr. McLeish, or any other key employees or consultants, we may experience difficulties in competing effectively, developing our technology and implementing our business strategies.

THE LOSS OF STRATEGIC RELATIONSHIPS USED IN THE DEVELOPMENT OF OUR PRODUCTS AND TECHNOLOGY COULD IMPEDE OUR ABILITY TO COMPLETE OUR PRODUCT AND RESULT IN A MATERIAL ADVERSE EFFECT CAUSING OUR BUSINESS TO SUFFER.

We may rely on strategic relationships with technology development partners to provide technology and operating systems. A loss of these relationships for any reason could cause us to experience difficulties in completing the development of our product and implementing our business strategy. There can be no assurance that we could establish other relationships of adequate expertise in a timely manner or at all.


THE OFFERING PRICE HAS BEEN ARBITRARILY DETERMINED.

The offering price of the Shares has been determined arbitrarily by the Company. It does not necessarily bear any relationship to the Company’s assets value, net worth, revenues or other established criteria of value, and should not be considered indicative of the actual value of the Shares. In addition, investors in this Offering will sustain immediate substantial dilution per share based upon net tangible book value per share.

THERE ARE RESTRICTIONS ON THE TRANSFERABILITY OF THE SECURITIES.
 
Until registered for resale, investors must bear the economic risk of an investment in the Shares, for an indefinite period of time. Rule 144 promulgated under the Securities Act (“Rule 144”), which provides for an exemption from the registration requirements under the Securities Act under certain conditions, requires, among other conditions, a one-year holding period prior to the resale (in limited amounts) of securities acquired in a non-public offering without having to satisfy the registration requirements under the Securities Act. There can be no assurance that the Company will fulfill any reporting requirements in the future under the Exchange Act or disseminate to the public any current financial or other information concerning the Company, as is required by Rule 144 as part of the conditions of its availability.

OUR PATENT APPLICATION FOR OUR TECHNOLOGY IS PENDING AND THERE IS NO ASSURANCE THAT THIS APPLICATION WILL BE GRANTED. FAILURE TO OBTAIN THE PATENT FOR OUR APPLICATION COULD PREVENT US FROM SECURING ROYALTY PAYMENTS IN THE FUTURE, IF APPROPRIATE.

We have filed a patent to protect the intellectual property rights for “Fine Particle Carbon Dioxide Transformation and Sequestration”. To date our patent application has not been granted. We cannot be certain that this patent will be granted nor can we be certain that other companies have not filed for patent protection for this technology before us. Even if we are granted patent protection for our technology, there is no assurance that we will be in a position to enforce our patent rights. Failure to be granted patent protection for our technology could result in greater competition or in limited royalty payments. This could result in inadequate revenue and cause us to cease operations.
 
OUR CURRENT AND POTENTIAL COMPETITORS, SOME OF WHOM HAVE GREATER RESOURCES THAN WE DO, MAY DEVELOP PRODUCTS AND TECHNOLOGIES THAT MAY CAUSE DEMAND FOR, AND THE PRICES OF, OUR PRODUCTS TO DECLINE.
 
While we are not aware of any direct competitors offering commercial products to convert CO2 from coal-fired power plants to usable carbonates, there are various competitive offering such as underground carbon sequestration systems. Our potential customers may choose to buy or build their own carbon capture and sequestration systems instead of purchasing our carbon transformation system and technology. Furthermore, our competitors may combine with each other, and other companies may enter our markets by acquiring or entering into strategic relationships with our competitors. Current and potential competitors have established, or may establish, cooperative relationships among themselves or with third parties to increase the abilities of their products to address the needs of our prospective customers.
 

 
9

Many of our current and potential competitors have longer operating histories, significantly greater financial, technical, product development and marketing resources, greater name recognition and larger customer bases than we do. Our present or future competitors may be able to develop products comparable or superior to those we offer, adapt more quickly than we do to new technologies, evolving industry trends and standards or customer requirements, or devote greater resources to the development, promotion and sale of their products than we do. Accordingly, we may not be able to compete effectively in our markets, competition may intensify and future competition may harm our business.

OUR BUSINESS IS DEPENDENT ON GOVERNMENT AND INTERNATIONAL REGULATIONS MANDATING THE REDUCTION OF CARBON DIOXIDE EMISSIONS.

We believe that greenhouse gases, such as carbon dioxide, contribute to global warming and climate change. New laws and regulations are currently being drawn up that may affect our industry and the industry of our customers. There is no assurance that new governmental regulations will be favorable to our business model and business plan. There is no assurance that mandated reduction in carbon emissions will provide enough of an incentive to use our new technology as opposed to other competitive products. The increasing use of alternative energy technology such as solar power, nuclear power, wind power, fuel cells and other energy sources that do not emit greenhouses gases will limit the market for our technology.

WE ARE CONTROLLED BY CURRENT OFFICERS, DIRECTORS AND PRINCIPAL STOCKHOLDERS.

Our directors, executive officers and principal stockholders and their affiliates beneficially own approximately 41.85% of outstanding shares of common stock. Accordingly, our executive officers, directors, principal stockholders and certain of their affiliates will have the ability to control the election of our Board of Directors and the outcome of issues submitted to our stockholders.
 
RISKS RELATING TO OUR COMMON STOCK

THERE IS NO PUBLIC (TRADING) MARKET FOR OUR COMMON STOCK AND THERE IS NO ASSURANCE THAT THE COMMON STOCK WILL EVER TRADE ON A RECOGNIZED EXCHANGE OR DEALER’S NETWORK; THEREFORE, YOU MAY NOT BE ABLE TO SELL YOUR SHARES.

There is no established public trading market for our securities. Hence, there is no central place, such as a stock exchange or electronic trading system, to resell your common stock. If you want to resell your shares, you will have to locate a buyer and negotiate your own sale. It is our plan to utilize a market maker who will apply to have our common stock quoted on the Over-the-Counter Bulletin Board in the United States. Our shares are not and have not been listed or quoted on any exchange or quotation system. There can be no assurance that a market maker will agree to file the necessary documents with the National Association of Securities Dealers, which operates the Over-the-Counter Bulletin Board, nor can there be any assurance that such an application for quotation will be approved or that a regular trading market will develop or that if developed, will be sustained. In the absence of a trading market, an investor will be unable to liquidate his investment except by private sale.
 
 
SHOULD OUR STOCK BECOME LISTED ON THE OTC BULLETIN BOARD, IF WE FAIL TO REMAIN CURRENT ON OUR REPORTING REQUIREMENTS, WE COULD BE REMOVED FROM THE OTC BULLETIN BOARD WHICH WOULD LIMIT THE ABILITY OF BROKER-DEALERS TO SELL OUR SECURITIES AND THE ABILITY OF STOCKHOLDERS TO SELL THEIR SECURITIES IN THE SECONDARY MARKET.
 
Companies trading on the Over-The-Counter Bulletin Board, such as us we are seeking to become, must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTC Bulletin Board. If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board. As a result, the market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market. In addition, we may be unable to get re-listed on the OTC Bulletin Board, which may have an adverse material effect on our Company.

ONCE PUBLICLY TRADING, THE APPLICATION OF THE "PENNY STOCK" RULES COULD ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON SHARES AND INCREASE YOUR TRANSACTION COSTS TO SELL THOSE SHARES.
 
The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:
 
·
that a broker or dealer approve a person's account for transactions in penny stocks; and
 
·
the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.
 
In order to approve a person's account for transactions in penny stocks, the broker or dealer must:
 
·
obtain financial information and investment experience objectives of the person; and
 
·
make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.
 
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:
 
·
sets forth the basis on which the broker or dealer made the suitability determination; and
 
·
that the broker or dealer received a signed, written agreement from the investor prior to the transaction.
 
Generally, brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.
 
Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

 
10

 
USE OF PROCEEDS

This prospectus relates to shares of our common stock that may be offered and sold from time to time by the selling stockholders. We will not receive any proceeds from the sale of shares of common stock in this offering. We have agreed to bear the expenses relating to the registration of the shares for the selling security holders. Any transfer taxes payable on these shares and any commissions and discounts payable to underwriters, agents, brokers or dealers will be paid by the selling stockholder.
 
Market for Securities

Our common stock is not traded on any national securities exchange and is not quoted on any over-the-counter market. If our shares become quoted on the Over-The-Counter Bulletin Board, sales will be made at prevailing market prices or privately negotiated prices.
 
HOLDERS
 
As of July 16, 2007, our common stock was held by 148 stockholders of record and we had 147,542,000 shares of common stock issued and outstanding, which includes the shares being offered by the selling stockholders in this prospectus. The transfer agent of our common stock is U.S. Stock Transfer Corporation, 1745 Gardena Avenue, Glendale, CA 91204.
 
We have not declared any dividends to date. We have no present intention of paying any cash dividends on our common stock in the foreseeable future, as we intend to use earnings, if any, to generate growth. The payment by us of dividends, if any, in the future, rests within the discretion of our Board of Directors and will depend, among other things, upon our earnings, our capital requirements and our financial condition, as well as other relevant factors. There are no restrictions in our articles of incorporation or bylaws that restrict us from declaring dividends.
 
Equity Compensation Plan Information

The following table shows information with respect to each equity compensation plan under which our common stock is authorized for issuance as from inception (August 25, 2006) through December 31, 2006.
 
EQUITY COMPENSATION PLAN INFORMATION
 
Plan category
 
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
 
Weighted average
exercise price of
outstanding options,
warrants and rights
 
Number of securities
remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)
 
 
 
(a)
 
(b)
 
(c)
 
Equity compensation plans approved by security holders
 
-0-
 
-0-
 
-0-
 
 
 
 
 
 
 
 
 
Equity compensation plans not approved by security holders
 
-0-
 
-0-
 
-0-
 
 
 
 
 
 
 
 
 
Total
 
-0-
 
-0-
 
-0-
 
 

 
11

 
 
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
 
Some of the information in this prospectus contains forward-looking statements that involve substantial risks and uncertainties. You can identify these statements by forward-looking words such as "may," "expect," "anticipate," "believe," "estimate" and "continue," or similar words. You should read statements that contain these words carefully because they:
 
·
discuss our future expectations;
 
·
contain projections of our future results of operations or of our financial condition; and
 
·
state other "forward-looking" information.
 
We believe it is important to communicate our expectations. However, there may be events in the future that we are not able to accurately predict or over which we have no control. Our actual results and the timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under "Risk Factors," "Business" and elsewhere in this prospectus. See "Risk Factors."
 
OVERVIEW
 
We are developing a technology to convert the greenhouse gas, carbon dioxide (CO2), into a useful form that will not contribute to global warming. We call this technology GreenCarbon™ Technology.  By eliminating harmful CO2 from human created sources, such as power plants and industrial factories, management believes that our technology will provide a partial solution to the problem of global warming.

GreenCarbon™ Technology is initially targeted at coal-fired electrical power plants and fuel production plants.
 
We were incorporated in the State of Nevada on August 25, 2006, as Zingerang, Inc. Our name was changed to Carbon Sciences, Inc. on April 9, 2007. Our principal executive offices are located at 50 Castilian Dr. Suite C, Santa Barbara, California 93117, and our telephone number is (805) 690-9090. Our fiscal year end is December 31.
 
Critical Accounting Policies
 
Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to impairment of property, plant and equipment, intangible assets, deferred tax assets and fair value computation using the Black Scholes option pricing model. We base our estimates on historical experience and on various other assumptions, such as the trading value of our common stock and estimated future undiscounted cash flows, that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions; however, we believe that our estimates, including those for the above-described items, are reasonable.
 
Revenue Recognition

Revenue on product sales is recognized when persuasive evidence of an arrangement exists, such as when a purchase order or contract is received from the customer, the selling price is fixed, title to the goods has changed and there is a reasonable assurance of collection of the sales proceeds.  We obtain written purchase authorizations from our customers for a specified amount of product at a specified price and consider delivery to have occurred at the time of shipment.  Revenue is recognized at shipment and we record a reserve for estimated sales returns, which is reflected as a reduction of revenue at the time of revenue recognition. We defer revenue on products sold directly to the consumer with a fifteen day right of return. Revenue is recognized upon the expiration of the right of return.

Revenues from research and development activities relating to firm fixed-price contracts are generally recognized on the percentage-of-completion method of accounting as costs are incurred (cost-to-cost basis).  Revenues from research and development activities relating to cost-plus-fee contracts include costs incurred plus a portion of estimated fees or profits based on the relationship of costs incurred to total estimated costs.  Contract costs include all direct material and labor costs and an allocation of allowable indirect costs as defined by each contract, as periodically adjusted to reflect revised agreed upon rates. These rates are subject to audit by the other party. 

 

 
12
Use of Estimates

In accordance with accounting principles generally accepted in the United States, management utilizes estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These estimates and assumptions relate to recording net revenue, collectibility of accounts receivable, useful lives and impairment of tangible and intangible assets, accruals, income taxes, inventory realization, stock-based compensation expense and other factors. Management believes it has exercised reasonable judgment in deriving these estimates. Consequently, a change in conditions could affect these estimates.

Fair Value of Financial Instruments

The Company's cash, cash equivalents, investments, accounts receivable and accounts payable are stated at cost which approximates fair value due to the short-term nature of these instruments.

Recently Issued Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board issued two FASB Staff Positions - FSP FAS 109-1, Application of FASB Statement 109 "Accounting for Income Taxes" to the Tax Deduction on Qualified Production Activities Provided by the American Jobs Creation Act of 2004, and FSP FAS 109-2 Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004. Neither of these affected the Company as it does not participate in the related activities.
 
In May 2005, the FASB issued FASB Statement No. 154, “Accounting Changes and Error Corrections.” This new standard replaces APB Opinion No. 20, “Accounting Changes, and FASB Statement No. 3, Reporting Accounting Changes in Interim Financial Statements,” and represents another step in the FASB’s goal to converge its standards with those issued by the IASB. Among other changes, Statement 154 requires that a voluntary change in accounting principle be applied retrospectively with all prior period financial statements presented on the new accounting principle, unless it is impracticable to do so. Statement 154 also provides that (1) a change in method of depreciating or amortizing a long-lived non-financial asset be accounted for as a change in estimate (prospectively) that was effected by a change in accounting principle, and (2) correction of errors in previously issued financial statements should be termed a “restatement.” The new standard is effective for accounting changes and correction of errors made in fiscal years beginning after December 15, 2005. Early adoption of this standard is permitted for accounting changes and correction of errors made in fiscal years beginning after June 1, 2005. The Company has evaluated the impact of the adoption of Statement 154 and does not believe the impact will be significant to the Company's overall results of operations or financial position
 
Liquidity and Capital Resources

 As of June 30, 2007, we had $206,135 of working capital as compared to $109,578 from inception (August 25, 2006) through December 31, 2006. This increase of $96,557 was due primarily to private placements of shares of common stock pursuant to Subscription Agreements which we entered into with accredited and/or institutional buyers.

Cash flow used in operating activities was $480,697 for six months ended June 30, 2007, as compared to cash used of $446,674 from inception (August 25, 2006) through December 31, 2006. This increase of $34,023was primarily attributable to a increase in professional fees and salaries.

Cash used in investing activities was $0 for the six months ended June 30, 2007, as compared to cash used of $17,559 from inception (August 25, 2006) through December 31, 2006. The decrease of cash used in investing activities was primarily due to having sufficient office equipment .
 
Cash provided from financing activities during the six months ended June 30, 2007 was $637,500 as compared to $539,375 from inception (August 25, 2006) through December 31, 2006. From inception to June 30, 2007, we received a total of $1,176,875 from the sale of shares of our common stock through private placements of shares of common stock pursuant to Subscription Agreements which we entered into with accredited and/or institutional buyers.

Our financial statements as of June 30, 2007 have been prepared under the assumption that we will continue as a going concern from inception (August 25, 2006) through June 30, 2007. Our independent registered public accounting firm has issued their report dated January 22, 2007 that included an explanatory paragraph expressing substantial doubt in our ability to continue as a going concern without additional capital becoming available. Our ability to continue as a going concern ultimately is dependent on our ability to generate a profit which is dependent upon our ability to obtain additional equity or debt financing, attain further operating efficiencies and, ultimately, to achieve profitable operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 
13

 
 
Financing

On September 18, 2006, we issued an aggregate of 99,500,000 shares of our common stock, par value $.001 per share, to the founders of our company, including our Chief Executive Officer, for an aggregate purchase price of $24,875.

In October 2006, we entered into Subscription Agreements with several accredited investors pursuant to which the investors subscribed to purchase an aggregate amount of up to $420,000 in shares of our common stock, or a total of 28,000,000 shares.
 
In October 2006, we entered into Subscription Agreements with several accredited investors pursuant to which the investors subscribed to purchase an aggregate amount of up to $120,000 in shares of our common stock, or a total of 1,200,000 shares.
 
In March 2007, we entered into Subscription Agreements with several accredited investors pursuant to which the investors subscribed to purchase an aggregate amount of up to $290,000 in shares of our common stock, or a total of 2,900,000 shares.
 
In April 2007, we entered into Subscription Agreements with several accredited investors pursuant to which the investors subscribed to purchase an aggregate amount of up to $1,594,200 in shares of our common stock, or a total of 15,942,000 shares.

PLAN OF OPERATION AND FINANCING NEEDS

We are engaged in developing a technology to convert the greenhouse gas, carbon dioxide (CO2), into a useful form that will not contribute to global warming. We plan to develop our products and thereafter focus our efforts on establishing markets in the power plants and industrial factories sectors by 2010. 
 
Operating Expenses

Operating expenses for the six months ended June 30, 2007 were $542,668 and consisted primarily of $414,547 in selling and marketing expenses, $128,121 in general and administrative expenses
 
Net Loss

Our net loss for the six months ended June 30, 2007 was $543,870. We recently began operating our business and have not generated any revenues to cover our operating costs.
 
Off-Balance Sheet Arrangements

We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, results of operations, liquidity or capital expenditures. 


 
 
BUSINESS

INTRODUCTION

We are developing a technology to convert the greenhouse gas, carbon dioxide (CO2), into a useful form that will not contribute to global warming. We call this technology GreenCarbon™ Technology.  By eliminating harmful CO2 from human created sources, such as power plants and industrial factories, management believes that our technology will provide a partial solution to the problem of global warming.

GreenCarbon™ Technology is initially targeted at coal-fired electrical power plants and fuel production plants.
 
We were incorporated in the State of Nevada on August 25, 2006, as Zingerang, Inc. Our name was changed to Carbon Sciences, Inc. on April 9, 2007. Our principal executive offices are located at 50 Castilian Dr. Suite C, Santa Barbara, California 93117, and our telephone number is (805) 690-9090. Our fiscal year end is December 31.

Industry Overview
 
The electrical power industry is currently pursuing ways to either convert or capture and store carbon dioxide in the campaign against global warming. At this time, there are few known technologies for converting CO2 that are commercially viable.
 
 
Carbon dioxide is believed to be the principal "greenhouse" gas because as it concentrates in the atmosphere it creates a blanket-like effect that many scientists believe is warming the earth. While carbon dioxide is released in the burning of all fossil fuels, coal produces greater amounts of carbon dioxide because of the fuel's high carbon content. It is likely that coal, which accounts for half of the country's electricity production, will remain the fuel of choice to produce electricity in the United States because it is relatively cheap and abundant. But if carbon limits are imposed to address climate change, that could change unless technologies or programs are developed to either convert or capture and store the tens of millions of tons of carbon dioxide that now spew from coal-burning smokestacks into the atmosphere.
 
 
Carbon dioxide “capture and store” programs currently being considered by the electrical power industry rely on sequestration. Geo-sequestration or geological storage involves injecting carbon dioxide directly into underground geological formations. Declining oil fields, saline aquifers, and unmineable coal seams have been suggested as storage sites.
 
We believe that the carbon “capture and store” method will not be a viable solution to the problem of CO2 as it is simply not practical to capture and deposit in deep geological formations several million tons of carbon a year. Instead, a technology solution must be applied at the source.  We believe that GreenCarbon™ Technology will be the solution.
 
Research and Development

We have retained a number of scientific advisors and technical consultants to help us develop and commercialize our GreenCarbon™ Technology and system. Our next step is to develop a research and development plan that will result in the production of a commercially viable GreenCarbon™ Technology system.

Marketing Strategy

Once we have completed our product development, we intend to create a favorable market environment to sell our GreenCarbon™ Technology system.  We intend to enhance, promote and support the entry of our GreenCarbon™ Technology system into the marketplace. Our goal is to position GreenCarbon™ Technology as a commercially viable method of converting CO2.

Our marketing communications strategy will include media and analyst communication, on-line promotions, blogs, and selected trade show attendance. We will be using every opportunity to place our brand in general and industry specific publications, using press releases, white papers and authored articles and Internet publications.

Backlog of Orders

There are currently no orders for sales at this time.

Government Contracts

There are no government contracts at this time.

 

 
15
Compliance with Environmental Laws and Regulations
 
Our operations are subject to local, state and federal laws and regulations governing environmental quality and pollution control . To date, our compliance with these regulations has had no material effect on our operations, capital, earnings, or competitive position, and the cost of such compliance has not been material. We are unable to assess or predict at this time what effect additional regulations or legislation could have on our activities.
 
Manufacturing and Distribution
 
We currently do not have any mechanism for the manufacture and distribution of products using our GreenCarbon™ , nor do we have adequate financing to undertake these efforts on our own. We intend to outsource manufacturing and distribution efforts to existing manufacturing and distributions firms.

Intellectual Property

We have filed a patent application with the U.S. Patent and Trademark Office to protect the intellectual property rights for “Fine Particle Carbon Dioxide Transformation and Sequestration”. The inventor listed on the patent application is Michael D. Wyrsta, the Company’s Chief Scientific Advisor. The Company is listed as the assignee.

Competition

The carbon capture and storage industry is a fairy new industry. We are not aware of any CO2 emitter, such as power plants, or technology vendors offering a commercial product or process to transform CO2 from the source into mineral carbonate products. The most common approach is to bury the CO2 in underground rock formations or the ocean floor. For example, a major research project examining the geological sequestration of carbon dioxide is currently being performed at an oil field at Weyburn in south-eastern Saskatchewan . In the North Sea, Norway's Statoil natural-gas platform Sleipner strips carbon dioxide out of the natural gas with amine solvents and disposes of this carbon dioxide by geological sequestration. As of April 2005, BP is considering a trial of large-scale sequestration of carbon dioxide stripped from power plant emissions in the Miller oilfield as its reserves are depleted. Currently, the United States government has approved the construction of what is claimed to be the world's first integrated carbon capture and storage power plant, FutureGen . However, management believes that this does not address the problem of the existing power plants.

Technology Development Partners

We may enter into technology development partnerships with other companies.


DESCRIPTION OF PROPERTY
 
 
Our principal office is located at 50 Castilian Dr. Suite C, Santa Barbara, California 93117. We lease approximately 1700 square feet, with an annual cost of $12,000. The term of the lease is month to month.
 
LEGAL PROCEEDINGS
 
We are not currently a party to any legal proceedings. There has been no bankruptcy, receivership or similar proceedings.
 
Employees
 
As of the date of this prospectus, we had one (1) employee. We have not experienced any work stoppages and we consider relations with our employee to be good.


 
16
 
MANAGEMENT  
 
EXECUTIVE OFFICERS, DIRECTORS AND KEY EMPLOYEES
 
The following table sets forth information about our executive officers, key employees and directors as of July 26, 2007.

Name
 
Age
 
Position
Derek McLeish
 
60
 
Chief Executive Officer, President, Acting Chief Financial Officer and Director
Michael Stone
 
54
 
Director
Daniel Elenbaas  
44
  Director
           
Directors serve until the next annual meeting and until their successors are elected and qualified. The Directors of our company are elected by the vote of a majority in interest of the holders of the voting stock of our company and hold office until the expiration of the term for which he or she was elected and until a successor has been elected and qualified.  

A majority of the authorized number of directors constitutes a quorum of the Board for the transaction of business. The directors must be present at the meeting to constitute a quorum. However, any action required or permitted to be taken by the Board may be taken without a meeting if all members of the Board individually or collectively consent in writing to the action.

Directors receive compensation for their services and reimbursement for their expenses as shall be determined from time to time by resolution of the Board. Our directors currently do not receive monetary compensation for their service on the Board of Directors.
 
Officers are appointed to serve for one year until the meeting of the board of directors following the annual meeting of stockholders and until their successors have been elected and qualified.
 
The principal occupations for the past five years (and, in some instances, for prior years) of each of our executive officers and directors, followed by our key employees, are as follows:
 
Derek McLeish - President, Chief Executive Officer, Acting Chief Financial Officer and Chairman of the Board. Mr. McLeish has over 30 years of domestic and international corporate management, marketing and sales experience in the areas of technology, and software. Prior to founding Carbon Sciences, Mr. McLeish was the President and CEO of Digital Interactive System Corporation, Inc., a digital distribution company, from 2004 to 2005. From 2003 to 2004, Mr. McLeish served as the President and CEO of Broadband Group, a consulting company. Prior to that, he was the Chief Operating Officer of NetCatalyst, Inc., a technology incubator company, from 2000 to 2002. In his career as senior executive of companies, such as DISCover, Hasbro/MicroProse, The Gillette Company, Atari, Panavision and Activision, Mr. McLeish was responsible for driving innovative strategic direction and successfully creating stockholder value by developing new markets and lines of business. At The Gillette Company, Mr. McLeish managed a large manufacturing plant producing billions of high value parts per year. At Panavision, Mr. McLeish was responsible for worldwide manufacturing. He served on the Board of Directors of Amaze, the largest independent interactive game developer in North America. Mr. McLeish undertook his MBA studies at Pepperdine University and received his BS from the California State University at Long Beach.

Daniel Elenbaas - Director. Mr. Elenbaas has over 20 years experience as a technology entrepreneur. From 1997 to 2007, was the President and CEO of Amaze Entertainment, Inc. Mr. Elenbaas recently sold Amaze Entertainment, Inc. which he founded in 1996 and built into one of the world's largest, most successful independent video game development companies. Amaze Entertainment created dozens of best-selling games, many based on major entertainment brands such as Harry Potter and The Lord of the Rings. Under his leadership, A maze developed over 90 game titles which sold in excess of 30 million units accounting for over $1 billion in retail sales. Prior to that, Mr. Elenbaas started, funded, and sold, amaze inc!, a consumer software developer/publisher that enjoyed significant success with its best-selling calendar software based on The Far Side comic and other popular content.  He received a BA in Political Science from Brigham Young University in Provo, Utah.

Michael Stone - Director. Mr. Stone is currently an independent management consultant. From 1999 to 2004, he was the co-founder and Chief Financial Officer of CardioNow, a medical imaging software company. Over the years, Mr. Stone has provided consulting services in strategy, marketing, litigation support and business development to many technology companies including Symantec, Microsoft, Earthlink, Avery Dennison, Creative Labs and Toshiba. In his over 25 years of experience he has served as a McKinsey and Company consultant, product marketing director at Ashton-Tate, VP Marketing at Citrix Systems and Quarterdeck Software.  He has also served on the Advisory Board and Board of Directors for Persistence Software, IntelliQuest and iTaggit.  Mr. Stone received his MBA and BBA from the University of Texas at Austin.
 

 
17

Scientific Advisors

Dr. Michael Wyrsta

Michael D. Wyrsta, inventor of our GreenCarbon Technology, has more than 10 years of technical experience in chemistry and novel materials as well as business experience in multiple technical start-up ventures. Dr. Wyrsta recently served as the Senior Chemist at GRT, Inc., an innovator in the commercialization of processes in both the fuels and chemicals markets. At GRT, he directed the research and development efforts for a number of large customers in the chemical and petroleum industry in the area of novel materials and catalysts for the conversion of natural gas to liquids and other chemicals. He previously served as the Chief Technology Officer of SBA Materials, establishing strategic business contracts, guiding intellectual property development and breaking new ground in solid-state composite materials for the electronics, photonics and pharmaceutical industries. Dr. Wyrsta holds a PhD in Materials from the University of California at Santa Barbara.

COMMITTEES OF THE BOARD
 
We currently have no audit committee, compensation committee, nominations and governance committee of our board of directors.
 
INDEBTEDNESS OF EXECUTIVE OFFICERS AND DIRECTORS
 
No executive officer, director or any member of these individuals' immediate families or any corporation or organization with whom any of these individuals is an affiliate is or has been indebted to us since the beginning of our last fiscal year

 
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FAMILY RELATIONSHIPS
 
There are no family relationships among our executive officers and directors.
 
LEGAL PROCEEDINGS
 
As of the date of this prospectus, there are no material proceedings to which any of our directors, executive officers, affiliates or stockholders is a party adverse to us.
 
CODE OF ETHICS
 
We have not adopted a Code of Ethics within the meaning of Item 406(b) of Regulation S-B of the Securities Exchange Act of 1934.
 
EXECUTIVE COMPENSATION

The following table sets forth the cash compensation (including cash bonuses) paid or accrued by us to our Chief Executive Officer and our four most highly compensated officers other than the Chief Executive Officer from inception (August 25, 2006) to December 31, 2006.
 
Name & Principal Position
 
Year
 
Salary
($)
 
Bonus
($)
 
Stock
Awards
($)
 
Option Awards
($)
 
Non-Equity Incentive Plan Compensation ($)
 
Change in Pension Value and Non-Qualified Deferred Compensation Earnings
($)
 
All Other Compensation ($)
 
Total
($)
 
Derek W. McLeish
CEO and Acting CFO
    2006  
$
80,000
   
0
   
0
   
0
   
0
   
0
   
0
 
$
80,000
 
 
 
OPTIONS/SAR GRANTS IN THE LAST FISCAL YEAR
 
No individual grants of stock options, whether or not in tandem with stock appreciation rights ("SARs") and freestanding SARs have been made to any executive officer or any director from inception (August 25, 2006) to June 30, 2007.
 
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION/SAR VALUES
 
 
No individual exercises of stock options, whether or not in tandem with stock appreciation rights ("SARs") and freestanding SARs have been made by executive officer or any director from inception (August 25, 2006) to June 30, 2007.
 
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
 
We had no long-term incentive plans and made no stock awards from inception (August 25, 2006) to June 30, 2007.
 
EMPLOYMENT AGREEMENTS
 
The Company current has no employment agreements with its executive officers.
 
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
There were no material related party transactions which we entered into from inception (August 25, 2006) to the date of this prospectus.
 
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
The following tables sets forth, as of July 16, 2007, the number of and percent of our common stock beneficially owned by:
 
·
all directors and nominees, naming them,
  ·
our executive officers,
  ·
our directors and executive officers as a group, without naming them, and
  ·
persons or groups known by us to own beneficially 5% or more of our common stock:
 

 
19


We believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them.
 
A person is deemed to be the beneficial owner of securities that can be acquired by him within 60 days from July 16, 2007 upon the exercise of options, warrants or convertible securities. Each beneficial owner's percentage ownership is determined by assuming that options, warrants or convertible securities that are held by him, but not those held by any other person, and which are exercisable within 60 days of July 16, 2007 have been exercised and converted.

 
Title of Class
 
Name of
Beneficial Owner
 
Number of Shares
Beneficially Owned
 
Prior to Offering as a
Percent of Total
 
Post-Offering as a
Percent   of Total
 
Common Stock
 
Derek McLeish
 
 
49,750,000
 
 
33.95
 
 
33.95
 
Common Stock
 
Richard Travis Beifuss
   
10,000,000
   
6.82
   
6.82
 
Common Stock
 
Michael Stone
 
 
1,000,000
 
 
.7
 
 
.7
 
Common Stock
 
Daniel Elenbaas
   
1,000,000
   
.7
   
.7
 
Common Stock
 
All Executive Officers and Directors as a Group (3 persons )
 
 
51,750,000
 
 
34.09
 
 
34.09
 
 
 
DESCRIPTION OF SECURITIES
 
Our Articles of Incorporation, as amended, authorize the issuance of 500,000,000 shares of common stock, $.001 par value per share. Holders of shares of common stock are entitled to one vote for each share on all matters to be voted on by the stockholders. Holders of common stock have cumulative voting rights. Holders of shares of common stock are entitled to share ratably in dividends, if any, as may be declared, from time to time by the Board of Directors in its discretion, from funds legally available therefor. In the event of a liquidation, dissolution, or winding up of our company, the holders of shares of common stock are entitled to share pro rata all assets remaining after payment in full of all liabilities. Holders of common stock have no preemptive or other subscription rights, and there are no conversion rights or redemption or sinking fund provisions with respect to such shares.
 
COMMISSION'S POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
 
Under the Nevada General Corporation Law and our Articles of Incorporation, as amended, and our Bylaws, our directors will have no personal liability to us or our stockholders for monetary damages incurred as the result of the breach or alleged breach by a director of his "duty of care." This provision does not apply to the directors' (i) acts or omissions that involve intentional misconduct or a knowing and culpable violation of law, (ii) acts or omissions that a director believes to be contrary to the best interests of the corporation or its stockholders or that involve the absence of good faith on the part of the director, (iii) approval of any transaction from which a director derives an improper personal benefit, (iv) acts or omissions that show a reckless disregard for the director's duty to the corporation or its stockholders in circumstances in which the director was aware, or should have been aware, in the ordinary course of performing a director's duties, of a risk of serious injury to the corporation or its stockholders, (v) acts or omissions that constituted an unexcused pattern of inattention that amounts to an abdication of the director's duty to the corporation or its stockholders, or (vi) approval of an unlawful dividend, distribution, stock repurchase or redemption. This provision would generally absolve directors of personal liability for negligence in the performance of duties, including gross negligence.
 
The effect of this provision in our Articles of Incorporation and Bylaws is to eliminate the rights of our Company and our stockholders (through stockholder's derivative suits on behalf of our Company) to recover monetary damages against a director for breach of his fiduciary duty of care as a director (including breaches resulting from negligent or grossly negligent behavior) except in the situations described in clauses (i) through (vi) above. This provision does not limit nor eliminate the rights of our Company or any stockholder to seek non-monetary relief such as an injunction or rescission in the event of a breach of a director's duty of care. In addition, our Bylaws provide that if the Nevada General Corporation Law is amended to authorize the future elimination or limitation of the liability of a director, then the liability of the directors will be eliminated or limited to the fullest extent permitted by the law, as amended. The Nevada General Corporation Law grants corporations the right to indemnify their directors, officers, employees and agents in accordance with applicable law.
 

 
20

Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act" or "Securities Act") may be permitted to directors, officers or persons controlling our Company pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.
 
PLAN OF DISTRIBUTION
 
The selling stockholders and any of their respective pledgees, donees, assignees and other successors-in-interest may, from time to time, sell any or all of their shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These sales may be at fixed or negotiated prices. The selling stockholders may use any one or more of the following methods when selling shares:
 
·
ordinary brokerage transactions and transactions in which the broker-dealer solicits the purchaser;
 
·
block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
 
·
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
 
·
an exchange distribution in accordance with the rules of the applicable exchange;
 
·
privately-negotiated transactions;
 
·
broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;
 
·
a combination of any such methods of sale; and
 
·
any other method permitted pursuant to applicable law.
 
The selling stockholders may also sell shares under Rule 144 under the Securities Act, if available, or Regulation S, rather than under this prospectus. The selling stockholders shall have the sole and absolute discretion not to accept any purchase offer or make any sale of shares if they deem the purchase price to be unsatisfactory at any particular time.
 
The selling stockholders or their respective pledgees, donees, transferees or other successors in interest, may also sell the shares directly to market makers acting as principals and/or broker-dealers acting as agents for themselves or their customers. Such broker-dealers may receive compensation in the form of discounts, concessions or commissions from the selling stockholders and/or the purchasers of shares for whom such broker-dealers may act as agents or to whom they sell as principal or both, which compensation as to a particular broker-dealer might be in excess of customary commissions. Market makers and block purchasers purchasing the shares will do so for their own account and at their own risk. It is possible that a selling stockholder will attempt to sell shares of common stock in block transactions to market makers or other purchasers at a price per share which may be below the then market price. The selling stockholders cannot assure that all or any of the shares offered in this prospectus will be sold by the selling stockholders. The selling stockholders and any brokers, dealers or agents, upon effecting the sale of any of the shares offered in this prospectus, may be deemed to be "underwriters" as that term is defined under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or the rules and regulations under such acts. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.
 
We are required to pay all fees and expenses incident to the registration of the shares, including fees and disbursements of counsel to the selling stockholders, but excluding brokerage commissions or underwriter discounts.
 
The selling stockholders, alternatively, may sell all or any part of the shares offered in this prospectus through an underwriter. No selling stockholder has entered into any agreement with a prospective underwriter and there is no assurance that any such agreement will be entered into.
  
The selling stockholders may pledge their shares to their brokers under the margin provisions of customer agreements. If a selling stockholders defaults on a margin loan, the broker may, from time to time, offer and sell the pledged shares. The selling stockholders and any other persons participating in the sale or distribution of the shares will be subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations under such act, including, without limitation, Regulation M. These provisions may restrict certain activities of, and limit the timing of purchases and sales of any of the shares by, the selling stockholders or any other such person. In the event that the selling stockholders are deemed affiliated purchasers or distribution participants within the meaning of Regulation M, then the selling stockholders will not be permitted to engage in short sales of common stock. Furthermore, under Regulation M, persons engaged in a distribution of securities are prohibited from simultaneously engaging in market making and certain other activities with respect to such securities for a specified period of time prior to the commencement of such distributions, subject to specified exceptions or exemptions.

 
21

 
We have agreed to indemnify the selling stockholders, or their transferees or assignees, against certain liabilities, including liabilities under the Securities Act of 1933, as amended, or to contribute to payments the selling stockholders or their respective pledgees, donees, transferees or other successors in interest, may be required to make in respect of such liabilities.
 
If the selling stockholders notify us that they have a material arrangement with a broker-dealer for the resale of the common stock, then we would be required to amend the registration statement of which this prospectus is a part, and file a prospectus supplement to describe the agreements between the selling stockholders and the broker-dealer.
 
PENNY STOCK
 
The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:
 
·
that a broker or dealer approve a person's account for transactions in penny stocks; and
 
·
the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.
 
In order to approve a person's account for transactions in penny stocks, the broker or dealer must
 
·
obtain financial information and investment experience objectives of the person; and
 
·
make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.
 
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:
 
·
sets forth the basis on which the broker or dealer made the suitability determination; and
 
that the broker or dealer received a signed, written agreement from the investor prior to the transaction.
 
Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.


 
22
 
SELLING STOCKHOLDERS

The table below sets forth information concerning the resale of the shares of common stock by the selling stockholders , which we previously issued to the selling stockholders . We will not receive any proceeds from the resale of the common stock by the selling stockholders. Assuming all the shares registered below are sold by the selling stockholders, none of the selling stockholders will continue to own any shares of our common stock.
 
The following table also sets forth the name of each person who is offering the resale of shares of common stock by this prospectus, the number of shares of common stock beneficially owned by each person, the number of shares of common stock that may be sold in this offering and the number of shares of common stock each person will own after the offering, assuming they sell all of the shares offered.
 

Shareholder Name
 
Number of Shares Beneficially owned prior to the Offering
 
Number of shares offered pursuant to this Prospectus
 
Number of Common Stock Owned After the Offering (1)
 
Percentage of Common Stock Owned After the Offering (1)
 
Abram Fuks
   
15,000
   
15,000
   
0
   
0
 
Alessandro Ucciferri
   
15,000
   
15,000
   
0
   
0
 
Andrew Berk
   
15,000
   
15,000
   
0
   
0
 
Andrew Yu & Anna Yu
   
15,000
   
15,000
   
0
   
0
 
Arden S. Law
   
15,000
   
15,000
   
0
   
0
 
Arthur E. Altounian & Kelli Altounian
   
15,000
   
15,000
   
0
   
0
 
Blair Capital (2)
   
15,000
   
15,000
   
0
   
0
 
Blair Capital, Inc. (3)
   
2,500,000
   
2,500,000
   
0
   
0
 
Blair M. Sullivan (UGMA)
   
15,000
   
15,000
   
0
   
0
 
Brian Levy
   
15,000
   
15,000
   
0
   
0
 
Candacia A. Hebda
   
15,000
   
15,000
   
0
   
0
 
Catherine Smith
   
15,000
   
15,000
   
0
   
0
 
Charles Douglas Plank Jr.
   
15,000
   
15,000
   
0
   
0
 
Charles H. Harris and Kim K. Harris
   
15,000
   
15,000
   
0
   
0
 
Chris Brown & Deanne Broglio, JTWRO
   
15,000
   
15,000
   
0
   
0
 
Chuck K. Lew
   
15,000
   
15,000
   
0
   
0
 
Chuck M. Liu
   
15,000
   
15,000
   
0
   
0
 
Clive Otsuka and Mari Otsuka
   
15,000
   
15,000
   
0
   
0
 
Colin Miyajima
   
15,000
   
15,000
   
0
   
0
 
David A. Patterson, Jr.
   
7,500
   
7,500
   
0
   
0
 
David Carlson
   
15,000
   
15,000
   
0
   
0
 
Dennis Le Pon and Nancy Le Pon
   
15,000
   
15,000
   
0
   
0
 
Diana Lippert
   
15,000
   
15,000
   
0
   
0
 
E.S. Lippert
   
15,000
   
15,000
   
0
   
0
 
E-Business Direct, Inc. (4)
   
3,500,000
   
3,500,000
   
0
   
0
 
Edward Bouryng and Esther Bouryng
   
15,000
   
15,000
   
0
   
0
 
Edward Bouryng and Esther C. Bouryng
   
300,000
   
300,000
   
0
   
0
 
Elizabeth Swolgaard
   
15,000
   
15,000
   
0
   
0
 
Emmanuel Vasilomanolakis
   
15,000
   
15,000
   
0
   
0
 
Epic Innovations, Inc.
   
15,000
   
15,000
   
0
   
0
 
Fenway Advisory Group (5)
   
15,000
   
15,000
   
0
   
0
 
Fenway Advisory Group Pensions & Profit Sharing (6)
   
15,000
   
15,000
   
0
   
0
 
Fred J. Choy
   
15,000
   
15,000
   
0
   
0
 
Fred J. Choy
   
100,000
   
100,000
   
0
   
0
 
Gemberling Family Trust (7)
   
15,000
   
15,000
   
0
   
0
 
Gregory B. Rawls
   
15,000
   
15,000
   
0
   
0
 
Helen Cheung
   
15,000
   
15,000
   
0
   
0
 
 
23
 
Helene E.Pretsky
   
15,000
   
15,000
   
0
   
0
 
Ivan Ivankovich
   
15,000
   
15,000
   
0
   
0
 
James A. Webb II
   
15,000
   
15,000
   
0
   
0
 
Jason C. Lew
   
15,000
   
15,000
   
0
   
0
 
Jena Holdings (8)
   
15,000
   
15,000
   
0
   
0
 
Jennifer Cheng
   
15,000
   
15,000
   
0
   
0
 
Jimmy Standaert
   
15,000
   
15,000
   
0
   
0
 
Joe Grimes
   
15,000
   
15,000
   
0
   
0
 
John C. Beifuss
   
7,000,000
   
7,000,000
   
0
   
0
 
Joseph Chang Woo Koh
   
15,000
   
15,000
   
0
   
0
 
Kari Negri
   
15,000
   
15,000
   
0
   
0
 
Kathryn A.B. Bailey
   
15,000
   
15,000
   
0
   
0
 
Kerry M. Kinney
   
15,000
   
15,000
   
0
   
0
 
Kimberlee Beifuss
   
15,000
   
15,000
   
0
   
0
 
Kristen M. Sullivan
   
15,000
   
15,000
   
0
   
0
 
Larry J. Kaufman
   
15,000
   
15,000
   
0
   
0
 
Liam C. Sullivan (UGMA)
   
15,000
   
15,000
   
0
   
0
 
Lionel Rodriguez, Jr.
   
15,000
   
15,000
   
0
   
0
 
Matthew Skefich
   
15,000
   
15,000
   
0
   
0
 
Michael Brown and Linda Engelsiepen
   
15,000
   
15,000
   
0
   
0
 
Michael H. Fields
   
15,000
   
15,000
   
0
   
0
 
Michael Schreibman and Michelle Schreibman
   
15,000
   
15,000
   
0
   
0
 
Neil C. Sullivan
   
15,000
   
15,000
   
0
   
0
 
Patrick J. Howard
   
15,000
   
15,000
   
0
   
0
 
Paul Kmiec
   
15,000
   
15,000
   
0
   
0
 
Philippe Erwin
   
15,000
   
15,000
   
0
   
0
 
Ralph Ribaya
   
15,000
   
15,000
   
0
   
0
 
Ramin Ramhormozi & Jennifer Romeyn
   
15,000
   
15,000
   
0
   
0
 
Raymond L. Bolduc
   
15,000
   
15,000
   
0
   
0
 
Richard T. Beifuss
   
15,000
   
15,000
   
0
   
0
 
Robin Cheng and Miranda Cheng
   
15,000
   
15,000
   
0
   
0
 
Ronald Pretlac
   
15,000
   
15,000
   
0
   
0
 
Rosalie Skefich
   
15,000
   
15,000
   
0
   
0
 
Russell D. Wong, Revocable Trust (9)
   
15,000
   
15,000
   
0
   
0
 
Scott C. Bublin
   
15,000
   
15,000
   
0
   
0
 
Stacy E. Patterson
   
7,500
   
7,500
   
0
   
0
 
Stanley B. Levy
   
15,000
   
15,000
   
0
   
0
 
Stanley K. Kawanishi
   
15,000
   
15,000
   
0
   
0
 
Steven C. Bartling and Yvonne C. Bartling
   
15,000
   
15,000
   
0
   
0
 
Sufeng I. Chung
   
15,000
   
15,000
   
0
   
0
 
Susan H. Lang
   
15,000
   
15,000
   
0
   
0
 
The Levy Family Trust of 1997 (10)
   
15,000
   
15,000
   
0
   
0
 
Thunder Innovations, LLC (11)
   
3,500,000
   
3,500,000
   
0
   
0
 
Tom M. Djokovich & Tamara A. Djokovich
   
15,000
   
15,000
   
0
   
0
 
Tony Ucciferri
   
15,000
   
15,000
   
0
   
0
 
Tram Richards
   
15,000
   
15,000
   
0
   
0
 
Uyen Thy Cain
   
15,000
   
15,000
   
0
   
0
 
Vahigh Gorji
   
15,000
   
15,000
   
0
   
0
 
Walton O. Anderson Jr. and Rita M. Anderson
   
15,000
   
15,000
   
0
   
0
 
William E. Beifuss Jr. & Alice Beifuss
   
7,000,000
   
7,000,000
   
0
   
0
 
William E. Boyd
   
15,000
   
15,000
   
0
   
0
 
Wings Fund, Inc. (12)
   
7,000,000
   
7,000,000
   
0
   
0
 
Total
   
32,100,000
   
32,100,000
         
 
 
24
 
The number and percentage of shares beneficially owned is determined in accordance with Rule 13d-3 of the Securities Exchange Act of 1934, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rule, beneficial ownership includes any shares as to which the selling stockholders has sole or shared voting power or investment power and also any shares, which the selling stockholders has the right to acquire within 60 days.
    
(1) Assumes that all securities will be sold.

(2) In accordance with rule 13d-3 under the securities exchange act of 1934, Neil Sullivan, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(3) In accordance with rule 13d-3 under the securities exchange act of 1934, Neil Sullivan, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(4) In accordance with rule 13d-3 under the securities exchange act of 1934, Roger Endo may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(5) In accordance with rule 13d-3 under the securities exchange act of 1934, Neil Sullivan, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(6) In accordance with rule 13d-3 under the securities exchange act of 1934, Neil Sullivan, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares

(7) In accordance with rule 13d-3 under the securities exchange act of 1934, Mel Gemberling, as trustee, may be deemed control persons of the shares owned by such entity, with final voting power and investment control over such shares.

(8) In accordance with rule 13d-3 under the securities exchange act of 1934, Neil Sullivan may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares

(9) In accordance with rule 13d-3 under the securities exchange act of 1934, Russell Wong, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(10) In accordance with rule 13d-3 under the securities exchange act of 1934, Charles M. Levy, as trustee, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(11) In accordance with rule 13d-3 under the securities exchange act of 1934, Elaine Lei, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.

(12) In accordance with rule 13d-3 under the securities exchange act of 1934, Karen M. Graham, may be deemed a control person of the shares owned by such entity, with final voting power and investment control over such shares.
 
LEGAL MATTERS
 
Sichenzia Ross Friedman Ference LLP, New York, New York will issue an opinion with respect to the validity of the shares of common stock being offered hereby.
 
EXPERTS
 
Our financial statements from inception (August 25, 2006) through June 30, 2007 appearing in this prospectus and registration statement have been audited and reviewed by HJ Associates & Consultants, LLP, independent registered public accountants, as set forth on their report thereon appearing elsewhere in this prospectus, and are included in reliance upon such report given upon the authority of such firm as experts in accounting and auditing.

 
25

AVAILABLE INFORMATION
 
We have filed a registration statement on Form SB-2 under the Securities Act of 1933, as amended, relating to the shares of common stock being offered by this prospectus, and reference is made to such registration statement. This prospectus constitutes the prospectus of Carbon Sciences Inc., filed as part of the registration statement, and it does not contain all information in the registration statement, as certain portions have been omitted in accordance with the rules and regulations of the Securities and Exchange Commission.
 
We are subject to the informational requirements of the Securities Exchange Act of 1934 which requires us to file reports, proxy statements and other information with the Securities and Exchange Commission. Such reports, proxy statements and other information may be inspected at public reference facilities of the SEC at 100 F Street N.E. Washington, D.C. 20549. Copies of such material can be obtained from the Public Reference Section of the SEC at 100 F Street N.E. Washington, D.C. 20549 at prescribed rates. Because we file documents electronically with the SEC, you may also obtain this information by visiting the SEC's Internet website at http://www.sec.gov.


26

 
INDEX TO FINANCIAL STATEMENTS
 
CARBON SCIENCES, INC.
 
FINANCIAL STATEMENTS
 
CONTENTS
 
 
 Auditor Report    
F-1
 
         
Balance Sheet as at June 30, 2006    
F-2
 
         
Statement of Operations from Inception on August 25, 2006 through December 31, 2006    
F-3
 
         
Statement of Shareholders' Equity    
F-4
 
         
Statement of Cash Flows    
F-5
 
         
Notes to Financial Statement December 31, 2006     
F-6 - F-10
 
         
Balance Sheet as at June 30, 2007    
F-11
 
         
Statement of Operations from Inception on August 25, 2006 through June 30, 2007    
F-12
 
         
Statement of Shareholders' Equity    
F-13
 
         
Statement of Cash Flows    
F-15
 
         
Notes to Financial Statement June 30, 2007     
F-16 - F-17 
 
         


 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors
Zingerang, Inc.
(A Development Stage Company)
Santa Barbara, California

We have audited the accompanying balance sheet of Zingerang, Inc. (a development stage company) as of December 31, 2006, and the related statements of operations, stockholders’ equity and cash flows for the period from inception on August 25, 2006 through December 31, 2006. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Zingerang, Inc. (a development stage company) as of December 31, 2006, and the results of its operations and their cash flows for the period from inception on August 25, 2006 through December 31, 2006, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered losses from operations and has no current revenues . This raises substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.



HJ Associates & Consultants, LLP
Salt Lake City, Utah
January 22, 2007
 
 
F-1
 
ZINGERANG, INC.
(A Development Stage Company)
BALANCE SHEET
DECEMBER 31, 2006

       
ASSETS
     
       
CURRENT ASSETS
     
   Cash
  $
75,142
 
   Prepaid Expenses
   
50,000
 
         
                        Total Current Assets
   
125,142
 
         
PROPERTY & EQUIPMENT, at cost
       
   Computer Equipment
   
17,559
 
    Less Accumulated Depreciation
    (1,403 )
         
                        Net Property and Equipment
   
16,156
 
         
                       TOTAL ASSETS
  $
141,298
 
         
         
         
LIABILITIES AND SHAREHOLDERS' EQUITY
       
         
TOTAL CURRENT LIABILITIES
       
    Accrued Expenses
  $
15,564
 
         
SHAREHOLDERS' EQUITY EQUITY
       
   Common Stock, $0.001 par value;
       
   500,000,000 authorized common shares
       
   128,445,000 shares issued and outstanding
   
128,445
 
   Additional Paid in Capital
   
410,930
 
   Accumulated Deficit during the development stage
    (413,641 )
         
                      TOTAL SHAREHOLDERS' EQUITY
   
125,734
 
         
                      TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
  $
141,298
 
         
 
 
The accompanying notes are an integral part of these financial statements
 
F-2
 
 
ZINGERANG, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS

       
   
From Inception on
 
   
August 25,2006
 
   
through
 
   
December 31, 2006
 
       
       
REVENUE
  $
-
 
         
         
SELLING & MARKETING EXPENSES
   
348,232
 
         
GENERAL & ADMINISTRATIVE EXPENSES
   
65,409
 
         
TOTAL COSTS AND EXPENSES
   
413,641
 
         
NET LOSS
    (413,641 )
         
BASIC AND DILUTED LOSS PER SHARE
  $ (0.00 )
         
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING
       
      BASIC AND DILUTED
   
100,004,805
 
         
 
The accompanying notes are an integral part of these financial statements

F-3
 
 
ZINGERANG, INC.
(A Development Stage Company)
STATEMENTS OF SHAREHOLDERS' EQUITY
 

                     
Deficit
       
                     
Accumulated
       
               
Additional
   
during the
       
   
Common stock
         
Paid-in
   
Development
       
   
Shares
   
Amount
   
Capital
   
Stage
   
Total
 
Inception August 25, 2006
   
-
    $
-
    $
-
    $
-
    $
-
 
                                         
Issuance of common stock for cash to founders in September 2006
                                       
(99,500,000 shares issued at $0.00025 for cash)
   
99,500,000
     
99,500
      (74,625 )            
24,875
 
                                         
Issuance of common stock for cash in September 2006
                                       
(7,000,000 shares issued at $0.015 for cash)
   
7,000,000
     
7,000
     
98,000
             
105,000
 
                                         
Issuance of common stock for cash in October 2006
                                       
(21,000,000 shares issued at $0.015 for cash)
   
21,000,000
     
21,000
     
294,000
             
315,000
 
                                         
Issuance of common stock for cash in November 2006
                                       
(390,000 shares issued at $0.10 for cash)
   
390,000
     
390
     
38,610
             
39,000
 
                                         
Issuance of common stock for cash in December 2006
                                       
(555,000 shares issued at $0.10 for cash)
   
555,000
     
555
     
54,945
             
55,500
 
                                         
Net Loss from Inception through December 31, 2006
                               (413,641 )     (413,641 )
                                         
Balance at December 31, 2006
   
128,445,000
    $
128,445
    $
410,930
    $ (413,641 )   $
125,734
 
                                         
                                         
 
The accompanying notes are an integral part of these financial statements

 
F-4
 
ZINGERANG, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS

       
   
From Inception on
 
   
August 25,2006
 
   
through
 
   
December 31, 2006
 
CASH FLOWS FROM OPERATING ACTIVITIES:
     
Net loss
  $ (413,641 )
Adjustment to reconcile net loss to net cash
       
  used in operating activities
       
 Depreciation expense
   
1,403
 
         (Increase) Decrease in:
       
             Prepaid expenses
    (50,000 )
        Increase (Decrease) in:
       
             Accrued Expenses
   
15,564
 
         
NET CASH USED IN OPERATING ACTIVITIES
    (446,674 )
         
CASH FLOWS USED IN INVESTING ACTIVITIES:
       
Purchase of Equipment
    (17,559 )
         
NET CASH USED IN INVESTING ACTIVITIES
    (17,559 )
         
CASH FLOWS FROM FINANCING ACTIVITIES:
       
    Advances from Officer
   
11,000
 
    Loan from Investor
   
110,000
 
    Repayment of advances and loans
    (121,000 )
Proceeds from issuance of common stock
   
539,375
 
         
NET CASH PROVIDED BY FINANCING  ACTIVITIES
   
539,375
 
         
NET INCREASE IN CASH
   
75,142
 
         
CASH, BEGINNING OF YEAR
   
-
 
         
CASH, END OF YEAR
  $
75,142
 
         
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
       
   Interest paid
  $
-
 
   Taxes paid
  $
-
 
         
         
 
The accompanying notes are an integral part of these financial statements
 

 
F-5

 
 
ZINGERANG, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006       
 
 

1.      ORGANIZATION AND LINE OF BUSINESS

Organization

Zingerang, Inc. (the "Company") was incorporated in the state of Nevada on August 25, 2006.  The Company, based in Santa Barbara, California, began operations on September 1, 2006 to develop and market mobile messaging technology.

Line of Business

The Company is developing mobile messaging services for both businesses and consumers. These mobile services make it easy to send and receive important information in real time across wired and wireless devices.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of Zingerang, Inc. is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

Going Concern
The accompanying financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business.  The accompanying financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern.  The Company has not generated any revenue as of December 31, 2006, and has negative cash flows from operations, which raise substantial doubt about the Company’s ability to continue as a going concern.  The ability of the Company to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, additional cash infusion.  As discussed in Note 3, the Company has obtained funds from its shareholders since its inception through December 31, 2006. Management believes this funding will continue, and is also actively seeking new investors.  Management believes the existing shareholders and the prospective new investors will provide the additional cash needed to meet the Company’s obligations as they become due, and will allow the development of its core of business.

Development Stage Activities and Operations
The Company is in its initial stages of formation and has no revenues as of December 31, 2006. FASB #7 defines a development stage activity as one in which all efforts are devoted substantially to establishing a new business and even if planned principal operations have commenced, revenues are insignificant.

Revenue Recognition
The Company will recognize revenue when services are performed, and at the time of shipment of products, provided that evidence of an arrangement exists, title and risk of loss have passed to the customer, fees are fixed or determinable, and collection of the related receivable is reasonably assured. To date, the Company has had no revenues and is in the development stage.

Cash and Cash Equivalent
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.


F-6
 
 
ZINGERANG, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006       
 

 
2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
Use of Estimates
 
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements.  Significant estimates made in preparing these financial statements include the estimate of useful lives of property and equipment, the deferred tax valuation allowance, and the fair value of stock options. Actual results could differ from those estimates.

Property and Equipment
Property and equipment are stated at cost, and are depreciated using the straight-line method over 3-10 years. Depreciation expense for the period ended December 21, 2006 was $1,403.

Fair Value of Financial Instruments
SFAS No. 107, “Disclosures About Fair Value of Financial Instruments”, requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of December 31, 2006, the amounts reported for cash, accounts receivable, accounts payable, accrued interest and other expenses, and notes payable approximate the fair value because of their short maturities.

     Loss per Share Calculations
The Company adopted Statement of Financial Standards (“SFAS”) No. 128 for the calculation of “Loss per Share”.  SFAS No. 128 dictates the calculation of basic earnings per share and diluted earnings per share. Basic earnings per share are computed by dividing income available to common shareholders by the weighted-average number of common shares available. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company’s diluted loss per share is the same as the basic loss per share for the period ended December 31, 2006 as the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss.

Income Taxes
The Company uses the liability method of accounting for income taxes.  Deferred tax assets and liabilities are recognized for the future tax consequences attributable to financial statements carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards.  The measurement of deferred tax assets and liabilities is based on provisions of applicable tax law.  The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance based on the amount of tax benefits that, based on available evidence, is not expected to be realized.

Recently Issued Accounting Pronouncements
In December 2002, the Financial Accounting Standards Board (“FASB”) issued SFAS 148, Accounting for Stock-Based Compensation – Transition and Disclosure. This Statement amends SFAS 123, Accounting for Stock-Based Compensation, to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this Statement amends the disclosure requirements of Statement 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on the reported results.


F-7
 
 
ZINGERANG, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006       



2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recently Issued Accounting Pronouncements (Continued)
In November 2004, the FASB issued SFAS No. 151 "Inventory Costs, an amendment of ARB No. 43, Chapter 4. The amendments made by Statement 151 clarify that abnormal amounts of idle facility expense, freight, handling costs, and wasted materials (spoilage) should be recognized as current-period charges and require the allocation of fixed production overheads to inventory based on the normal capacity of the production facilities. The guidance is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. Earlier application is permitted for inventory costs incurred during fiscal years beginning after November 23, 2004. The Company has evaluated the impact of the adoption of SFAS 151, and does not believe the impact will be significant to the Company's overall results of operations or financial position.

In December 2004, the FASB issued Statement of Financial Accounting Standards No. 123R, Share-based Payment. SFAS 123R revises SFAS 123 and supersedes APB 25. SFAS 123R will be effective for the period ending December 31, 2006, and applies to transactions in which an entity exchanges its equity instruments for goods or services and also applies to liabilities an entity may incur for goods or services that are to follow a fair value of those equity instruments. Under SFAS 123R, we will be required to follow a fair value approach using an option-pricing model, such as the Black Scholes option valuation model, at the date of a stock option grant. The deferred compensation calculated under the fair value method would then be amortized over the respective vesting period of the stock option. The adoption of SFAS 123R is expected to have a material impact on our results of operations.

In December 2004, the FASB issued SFAS No.153, "Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29, Accounting for Nonmonetary Transactions."The amendments made by Statement 153 are based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. Further, the amendments eliminate the narrow exception for nonmonetary exchanges of similar productive assets and replace it with a broader exception for exchanges of nonmonetary assets that do not have commercial substance. Previously, Opinion 29 required that the accounting for an exchange of a productive asset for a similar productive asset or an equivalent interest in the same or similar productive asset should be based on the recorded amount of the asset relinquished. Opinion 29 provided an exception to its basic measurement principle (fair value) for exchanges of similar productive assets. The Board believes that exception required that some nonmonetary exchanges, although commercially substantive, be recorded on a carryover basis. By focusing the exception on exchanges that lack commercial substance, the Board believes this Statement produces financial reporting that more faithfully represents the economics of the transactions. The Statement is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. Earlier application is permitted for nonmonetary asset exchanges occurring in fiscal periods beginning after the date of issuance. The provisions of this Statement shall be applied prospectively. The Company has evaluated the impact of the adoption of SFAS 153, and does not believe the impact will be significant to the Company's overall results of operations or financial position.

In December 2004, the Financial Accounting Standards Board issued two FASB Staff Positions - FSP FAS 109-1, Application of FASB Statement 109 "Accounting for Income Taxes" to the Tax Deduction on Qualified Production Activities Provided by the American Jobs Creation Act of 2004, and FSP FAS 109-2 Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004. Neither of these affected the Company as it does not participate in the related activities.

F-8
 
 
ZINGERANG, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006       

 
2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recently Issued Accounting Pronouncements (Continued)
In March 2005, the SEC released Staff Accounting Bulletin No. 107, “Share-Based Payment” (“SAB 107”), which provides interpretive guidance related to the interaction between SFAS 123(R) and certain SEC rules and regulations. It also provides the SEC staff’s views regarding valuation of share-based payment arrangements. In April 2005, the SEC amended the compliance dates for SFAS 123(R), to allow companies to implement the standard at the beginning of their next fiscal year, instead of the next reporting period beginning after June 15, 2005. Management is currently evaluating the impact SAB 107 will have on our condensed financial statements.

In March 2005, the FASB issued FASB Interpretation No. 47, “Accounting for Conditional Asset Retirement Obligations” (“FIN 47”). FIN 47 provides guidance relating to the identification of and financial reporting for legal obligations to perform an asset retirement activity. The Interpretation requires recognition of a liability for the fair value of a conditional asset retirement obligation when incurred if the liability’s fair value can be reasonably estimated. FIN 47 also defines when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation. The provision is effective no later than the end of fiscal years ending after December 15, 2005. The Company will adopt FIN 47 beginning the first quarter of fiscal year 2006 and does not believe the adoption will have a material impact on its financial position or results of operations or cash flows.

In May 2005, the FASB issued FASB Statement No. 154, “Accounting Changes and Error Corrections.” This new standard replaces APB Opinion No. 20, “Accounting Changes, and FASB Statement No. 3, Reporting Accounting Changes in Interim Financial Statements,” and represents another step in the FASB’s goal to converge its standards with those issued by the IASB. Among other changes, Statement 154 requires that a voluntary change in accounting principle be applied retrospectively with all prior period financial statements presented on the new accounting principle, unless it is impracticable to do so. Statement 154 also provides that (1) a change in method of depreciating or amortizing a long-lived non-financial asset be accounted for as a change in estimate (prospectively) that was effected by a change in accounting principle, and (2) correction of errors in previously issued financial statements should be termed a “restatement.” The new standard is effective for accounting changes and correction of errors made in fiscal years beginning after December 15, 2005. Early adoption of this standard is permitted for accounting changes and correction of errors made in fiscal years beginning after June 1, 2005. The Company has evaluated the impact of the adoption of Statement 154 and does not believe the impact will be significant to the Company's overall results of operations or financial position.

In February of 2006, the FASB issued SFAS No. 155, “Accounting for Certain Hybrid Financial Instruments”, which is intended to simplify the accounting and improve the financial reporting of certain hybrid financial instruments (i.e., derivatives embedded in other financial instruments). The statement amends SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”, and SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities—a replacement of FASB Statement No. 125.” SFAS No. 155 is effective for all financial instruments issued or acquired after the beginning of an entity's first fiscal year that begins after September 15, 2006. The Company is currently evaluating the impact SFAS No. 155 will have on its consolidated financial statements, if any.

F-9
 
 
ZINGERANG, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006       

 

3.      CAPITAL STOCK

At December 31, 2006, the Company’s authorized stock consists of 500,000,000 shares of common stock, par value $0.001 per share. During the period ended December 31, 2006, the Company issued 99,500,000 founders shares of common stock for $24,875; The Company commenced a private placement of 28,000,000 shares of its common stock at a price of one and one-half cents ($0.015) per share and received funds in the amount of $420,000; The Company commenced an additional private placement of 945,000 shares of its common stock at a price of ten cents ($0.10) per share and received funds in the amount of $94,500.   The private placements, which were made in reliance upon an exemption from registration under Rule 506 of Regulation D promulgated under Section 4(2) of the Securities Act of 1933.

4.
RENTAL LEASE
 
The Company entered into a month to month agreement for office space with monthly rents of $4,000 per month.
 
5.
DEFERRED TAX BENEFIT

 
At December 31, 2006, the Company had net operating loss carry-forwards of approximately $162,000 that may be offset against future taxable income from the year 2007 through 2027. No tax benefit has been reported in the December 31, 2006 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.

 
The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income from continuing operations for the period ended December 31, 2006 due to the following:

 
   
2006
 
Book Income
    (161,320 )
Valuation Allowance
   
161,320
 
         
    $
-
 
         
 
 
 
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible differences and operating loss and tax credit carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the difference between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Net deferred tax liabilities consist of the following components as of December 31, 2006:
 
 
F-10
 
ZINGERANG, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006       

   
2006
 
Deferred tax assets:
     
  NOL Carryover
  $
165,456
 
         
Deferred tax liabilites:
       
  Depreciation
   
-
 
         
Less Valuation Allowance
    (165,456 )
         
Net deferred tax asset
  $
-
 
         

 
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry-forwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years.

6 .    LOAN PAYABLE

During the period ended December 31, 2006, the Company borrowed funds from a private party in the amount of $110,000 for operating expenses. The loan payable was paid within the period with no interest due.

7 .    RELATED PARTY

 
During the period ended December 31, 2006 the Company’s President and Chief Executive Officer, advanced funds to the Company in the amount of $11,000 to pay for operating expenses. The funds were reimbursed within the period.

8.    SUBSEQUENT EVENTS
 
On or about January 1, 2007, the Company raised an additional $25,500 from the issuance of 255,000 shares of common stock.
 
9.    COMMITMENTS AND CONTINGENCIES

The Company entered into an exclusive technology license agreement with Warp9 on September 18, 2006, whereby the Company would pay $100,000 as a recoupable advance against royalties. The Company paid $50,000 of the advance, and a $50,000 balance remains as of December 31, 2006.
 
 
 
F-11
 
CARBON SCIENCES, INC.
(formerly ZINGERANG, INC.)
(A Development Stage Company)
BALANCE SHEET
(Unaudited)

       
       
       
       
       
ASSETS
     
       
CURRENT ASSETS
 
June 30, 2007
 
Cash
 
$
231,945
 
Prepaid expenses
   
4,889
 
TOTAL CURRENT ASSETS
   
236,834
 
         
PROPERTY & EQUIPMENT, at cost
       
Computer Equipment
   
17,559
 
Less Accumulated Depreciation
   
(4,330
)
         
Net Property and Equipment
   
13,229
 
         
TOTAL ASSETS
 
$
250,063
 
         
         
         
LIABILITIES AND SHAREHOLDERS' EQUITY
       
         
TOTAL CURRENT LIABILITIES
       
Accrued Expenses
 
$
30,699
 
         
SHAREHOLDERS' EQUITY EQUITY
       
Common Stock, $0.001 par value;
       
500,000,000 authorized common shares
       
134,820,000 shares issued and outstanding
   
134,820
 
Additional Paid in Capital
   
1,042,055
 
Accumulated Deficit during the development stage
   
(957,511
)
         
TOTAL SHAREHOLDERS' EQUITY
   
219,364
 
         
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
 
$
250,063
 

 

 
F-12
 
 
CARBON SCIENCES, INC.
(formerly ZINGERANG, INC.)
(A Development Stage Company)
STATEMENT OF OPERATIONS
(Unaudited)
 

               
               
               
               
           
From Inception on
 
           
August 25,2006
 
   
Three Months Ended
 
Six Months Ended
 
through
 
   
June 30, 2007
 
June 30, 2007
 
June 30, 2007
 
   
 
         
               
REVENUE
 
$
-
 
$
-
 
$
-
 
                     
                     
SELLING & MARKETING EXPENSES
   
121,021
   
414,547
   
762,779
 
                     
GENERAL & ADMINISTRATIVE EXPENSES
   
85,037
   
128,121
   
193,530
 
                     
TOTAL COSTS AND EXPENSES
   
206,058
   
542,668
   
956,309
 
                     
LOSS FROM OPERATIONS BEFORE OTHER INCOME
   
(206,058
)
 
(542,668
)
 
(956,309
)
                     
TOTAL OTHER INCOME/(EXPENSE)
                   
Interest Expense
   
(265
)
 
(1,202
)
 
(1,202
)
                     
NET LOSS
 
$
(206,323
)
$
(543,870
)
$
(957,511
)
                     
BASIC AND DILUTED LOSS PER SHARE
 
$
(0.00
)
$
(0.00
)
     
                     
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING
                   
BASIC AND DILUTED
   
132,752,857
   
130,950,856
       

 
 
F-13
 
 
CARBON SCIENCES, INC.
(formerly ZINGERANG, INC.)
(A Development Stage Company)
STATEMENTS OF SHAREHOLDERS' EQUITY
 

                
Deficit
     
                
Accumulated
     
           
  Additional
 
during the
     
   
Common stock
 
  Paid-in
 
Development
     
   
Shares
 
Amount
 
  Capital
 
Stage
 
Total
 
Inception August 25, 2006
   
-
 
$
-
 
$
-
 
$
-
 
$
-
 
                                 
Issuance of common stock for cash to founders in September 2006
                               
(99,500,000 shares issued at $0.00025 for cash)
   
99,500,000
   
99,500
   
(74,625
)
 
-
   
24,875
 
                                 
Issuance of common stock for cash in September 2006
                               
(7,000,000 shares issued at $0.015 for cash)
   
7,000,000
   
7,000
   
98,000
   
-
   
105,000
 
                                 
Issuance of common stock for cash in October 2006
                               
(21,000,000 shares issued at $0.015 for cash)
   
21,000,000
   
21,000
   
294,000
   
-
   
315,000
 
                                 
Issuance of common stock for cash in November 2006
                               
(390,000 shares issued at $0.10 for cash)
   
390,000
   
390
   
38,610
   
-
   
39,000
 
                                 
Issuance of common stock for cash in December 2006
                               
(555,000 shares issued at $0.10 for cash)
   
555,000
   
555
   
54,945
   
-
   
55,500
 
                                 
Net Loss from Inception through December 31, 2006
                     
(413,641
)
 
(413,641
)
     
128,445,000
 
$
128,445
 
$
410,930
 
$
(413,641
)
$
125,734
 
Issuance of common stock for cash in January 2007
                               
(255,000 shares issued at $0.10 for cash) (unaudited)
   
255,000
   
255
   
25,245
   
-
   
25,500
 
                                 
Issuance of common stock for cash in March 2007
                               
(2,900,000 shares issued at $0.10 for cash) (unaudited)
   
2,900,000
   
2,900
   
287,100
   
-
   
290,000
 
                                 
Issuance of common stock for cash in May 2007
                               
(1,770,000 shares issued at $0.10 for cash) (unaudited)
   
1,770,000
   
1,770
   
175,230
   
-
   
177,000
 
                                 
Issuance of common stock for cash in May 2007
                               
(1,450,000 shares issued at $0.10 for cash) (unaudited)
   
1,450,000
   
1,450
   
143,550
   
-
   
145,000
 
                                 
Net Loss for the six months ended June 30, 2007 (unaudited)
   
-
   
-
   
-
   
(543,870
)
 
(543,870
)
                                 
Balance at June 30, 2007 (unaudited)
   
134,820,000
 
$
134,820
 
$
1,042,055
 
$
(957,511
)
$
219,364
 

 
F-14
 
 
CARBON SCIENCES, INC.
(formerly ZINGERANG, INC.)
(A Development Stage Company)
STATEMENT OF CASH FLOWS
(Unaudited)
 

       
From Inception on
 
       
August 25, 2006
 
   
Six Months Ended
 
through
 
   
June 30, 2007
 
June 30, 2007
 
CASH FLOWS FROM OPERATING ACTIVITIES:
         
Net loss
 
$
(543,870
)
$
(957,511
)
Adjustment to reconcile net loss to net cash
             
used in operating activities
             
Depreciation expense
   
2,927
   
4,330
 
(Increase) Decrease in:
             
Prepaid expenses
   
45,111
   
(4,889
)
Increase (Decrease) in:
             
Accounts Payable
   
-
   
-
 
Accrued Expenses
   
15,135
   
30,699
 
               
NET CASH USED IN OPERATING ACTIVITIES
   
(480,697
)
 
(927,371
)
               
CASH FLOWS USED IN INVESTING ACTIVITIES:
             
Purchase of Equipment
   
-
   
(17,559
)
               
NET CASH USED IN INVESTING ACTIVITIES
   
-
   
(17,559
)
               
CASH FLOWS FROM FINANCING ACTIVITIES:
             
Advances from Officer
   
-
   
73,000
 
Loan from Investor
   
-
   
160,000
 
Repayment of advances and loans
   
-
   
(233,000
)
Proceeds from issuance of common stock
   
637,500
   
1,176,875
 
               
NET CASH PROVIDED BY FINANCING ACTIVITIES
   
637,500
   
1,176,875
 
               
NET INCREASE IN CASH
   
156,803
   
231,945
 
               
CASH, BEGINNING OF YEAR
   
75,142
   
-
 
               
CASH, END OF YEAR
 
$
231,945
 
$
231,945
 
               
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
             
Interest paid
 
$
265
 
$
1,202
 
Taxes paid
 
$
800
 
$
800
 

 
 
F-15

CARBON SCIENCES, INC.
(formerly ZINGERANG, INC.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007

1.   ORGANIZATION AND LINE OF BUSINESS
 
  Organizational History
 
The Company was incorporated in the State of Nevada on August 25, 2006, as Zingerang, Inc. On April 2, 2007 the Company changed its name to Carbon Sciences, Inc.
 
  Overview of Business
 
The Company was initially in the business of offering mobile communication services under the Zingerang trade name. As of April, 2007 the Company has entered into an agreement to sell substantially all the assets of this business. The Company is now pursuing a new line of business. The company is developing a technology to convert harmful carbon dioxide (CO2) into a useful form that will not contribute to global warming. This technology is based on a patent filed by the company and developed under the brand name, GreenCarbon™ Technology.  By eliminating harmful CO2 from human created sources, such as power plants and industrial factories, the technology will provide a partial solution to the problem of global warming. GreenCarbon™ Technology is initially targeted at electrical power plants.

Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included. Operating results for the six month period ended June 30, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2007. For further information refer to the financial statements and footnotes thereto included in the Company's Form 10-KSB for the year ended December 31, 2006.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of Carbon Sciences, Inc. is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

Going Concern
The accompanying financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. The accompanying financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. The Company has not generated any revenue as of June 30, 2007, and has negative cash flows from operations, which raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, additional cash infusion. As discussed in Note 3, the Company has obtained funds from its shareholders since it’s’ inception through June 30, 2007. Management believes this funding will continue, and is also actively seeking new investors. Management believes the existing shareholders and the prospective new investors will provide the additional cash needed to meet the Company’s obligations as they become due, and will allow the development of its core of business.
 
 
F-16
 
CARBON SCIENCES, INC.
(formerly ZINGERANG, INC.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2007


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
Development Stage Activities and Operations
The Company is in its initial stages of formation and has no revenues as of June 30, 2007. FASB #7 defines a development stage activity as one in which all efforts are devoted substantially to establishing a new business and even if planned principal operations have commenced, revenues are insignificant.
 
    Revenue Recognition
The Company will recognize revenue when services are performed, and at the time of shipment of products, provided that evidence of an arrangement exists, title and risk of loss have passed to the customer, fees are fixed or determinable, and collection of the related receivable is reasonably assured. To date, the Company has had no revenues and is in the development stage.

3.   CAPITAL STOCK

At June 30, 2007, the Company’s authorized stock consists of 500,000,000 shares of common stock, par value $0.001 per share. During the six months ended June 30, 2007, the Company issued through a private placement 6,375,000 shares of common stock for $637,500; the private placements, which were made in reliance upon an exemption from registration under Rule 506 of Regulation D promulgated under Section 4(2) of the Securities Act of 1933.
 
4. SUBSEQUENT EVENTS

In July 2007, through a private offering the Company issued an additional 12,722,000 shares of common stock at a price per share of $0.10 for cash of $1,272,200. The private placement, which was made in reliance upon an exemption from registration under Rule 506 of Regulation D promulgated under Section 4(2) of the Securities Act of 1933.
 
F-17
 
 
 
PART II
 
INFORMATION NOT REQUIRED IN PROSPECTUS  
 
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
 
Under the Nevada General Corporation Law and our Articles of Incorporation, as amended, and our Bylaws, our directors will have no personal liability to us or our stockholders for monetary damages incurred as the result of the breach or alleged breach by a director of his "duty of care." This provision does not apply to the directors' (i) acts or omissions that involve intentional misconduct or a knowing and culpable violation of law, (ii) acts or omissions that a director believes to be contrary to the best interests of the corporation or its stockholders or that involve the absence of good faith on the part of the director, (iii) approval of any transaction from which a director derives an improper personal benefit, (iv) acts or omissions that show a reckless disregard for the director's duty to the corporation or its stockholders in circumstances in which the director was aware, or should have been aware, in the ordinary course of performing a director's duties, of a risk of serious injury to the corporation or its stockholders, (v) acts or omissions that constituted an unexcused pattern of inattention that amounts to an abdication of the director's duty to the corporation or its stockholders, or (vi) approval of an unlawful dividend, distribution, stock repurchase or redemption. This provision would generally absolve directors of personal liability for negligence in the performance of duties, including gross negligence.
 
The effect of this provision in our Articles of Incorporation and Bylaws is to eliminate the rights of our Company and our stockholders (through stockholder's derivative suits on behalf of our Company) to recover monetary damages against a director for breach of his fiduciary duty of care as a director (including breaches resulting from negligent or grossly negligent behavior) except in the situations described in clauses (i) through (vi) above. This provision does not limit nor eliminate the rights of our Company or any stockholder to seek non-monetary relief such as an injunction or rescission in the event of a breach of a director's duty of care. In addition, our Bylaws provide that if the Nevada General Corporation Law is amended to authorize the future elimination or limitation of the liability of a director, then the liability of the directors will be eliminated or limited to the fullest extent permitted by the law, as amended. The Nevada General Corporation Law grants corporations the right to indemnify their directors, officers, employees and agents in accordance with applicable law.
 
Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act" or "Securities Act") may be permitted to directors, officers or persons controlling our Company pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.
 
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
 
The following table sets forth an itemization of all estimated expenses, all of which we will pay, in connection with the issuance and distribution of the securities being registered:
 
NATURE OF EXPENSE AMOUNT

 
$
98.55
 
Accounting fees and expenses
 
 
15,000
*  
Legal fees and expenses
 
 
40,000
*  
Miscellaneous
 
 
4,901.45
* 
                                         TOTAL
 
$
60,000
* 
 
*   Estimated.
 
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
 
Following is a summary of unregistered securities issued from inception (August 25, 2006) through July 26, 2007.
 
On September 18, 2006, we issued an aggregate of 99,500,000 shares of our common stock, par value $.001 per share, to the founders of our company, including our Chief Executive Officer, for an aggregate purchase price of $24,875.

In October 2006, we entered into Subscription Agreements with several accredited investors pursuant to which the investors subscribed to purchase an aggregate amount of up to $420,000 in shares of our common stock, or a total of 28,000,000 shares.
 
In October 2006, we entered into Subscription Agreements with several accredited investors pursuant to which the investors subscribed to purchase an aggregate amount of up to $120,000 in shares of our common stock, or a total of 1,200,000 shares.

 
II-1

 
In March 2007, we entered into Subscription Agreements with several accredited investors pursuant to which the investors subscribed to purchase an aggregate amount of up to $290,000 in shares of our common stock, or a total of 2,900,000 shares.
 

In April 2007, we entered into Subscription Agreements with several accredited investors pursuant to which the investors subscribed to purchase an aggregate amount of up to approximately $1,594,200 in shares of our common stock, or a total of 15,942,000 shares.
 
 
* All of the above offerings and sales were deemed or determined by Carbon Sciences, Inc. to be exempt under rule 506 of Regulation D and Section 4(2) of the Securities Act of 1933, as amended. No advertising or general solicitation was employed in offering the securities. The offerings and sales were made to a limited number of persons, all of whom were accredited investors, business associates of Carbon Sciences, Inc. or executive officers of Carbon Sciences, Inc., and transfer was restricted by Carbon Sciences, Inc. in accordance with the requirements of the Securities Act of 1933. In addition to representations by the above-referenced persons, we have made independent determinations that all of the above-referenced persons were accredited or sophisticated investors, and that they were capable of analyzing the merits and risks of their investment, and that they understood the speculative nature of their investment.
 
ITEM 27. EXHIBITS.
 
The following exhibits are included as part of this Form SB-2.
 
Exhibit No.
 
Description
 
 
 
 
 
 
 
3.2
 
 
 
 
3.4
 
     
 
 
 
 
10.1
 
 
 
 
10.2
 
     
10.3
 
     
10.4
 
 
 
 
23.1
 
 Consent of Sichenzia Ross Friedman Ference LLP (included in Exhibit 5.1).*
 
 
 
23.2
 
 
*Filed herewith.
 

 
II-2
 
ITEM 28. UNDERTAKINGS.
 
The undersigned registrant hereby undertakes to:
 
(1) File, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to:
 
(i) Include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act");
 
(ii) Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of the 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 a 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 the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement, and
 
(iii) Include any additional or changed material information on the plan of distribution.
 
(2) For determining liability under the Securities Act, treat each post-effective amendment as a new registration statement of the securities offered, and the offering of the securities at that time to be the initial bona fide offering.
 
(3) File a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering.
 
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
 
In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
 
Each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

 
II-3


SIGNATURES
 
In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form SB-2 and authorized this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Santa Barbara, State of California, on July 27, 2007.
 
 
 
 
 
Carbon Sciences, Inc.
 
 
 
 
 
 
 
By:  
Derek W. McLeish
 
Derek W. McLeish
 
CHIEF EXECUTIVE OFFICER (PRINCIPAL EXECUTIVE OFFICER) AND ACTING CHIEF FINANCIAL OFFICER (PRINCIPAL ACCOUNTING AND FINANCIAL OFFICER)

In accordance with the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates stated.
 
SIGNATURE
 
  TITLE
 
DATE
 
 
 
 
 
 
 
CHIEF EXECUTIVE OFFICER
 
July 27, 2007
/ s/ Derek W. McLeish  
Derek W. McLeish
 
(PRINCIPAL EXECUTIVE OFFICER),
ACTING CHIEF FINANCIAL OFFICER
 
 
 
 
(PRINCIPAL ACCOUNTING AND
 
 
 
 
FINANCIAL OFFICER) AND
 
 
 
 
CHAIRMAN OF THE BOARD
 
 
 
 
 
 
 
/s/ Micheal Stone
 
DIRECTOR
 
July 27, 2007
Michael Stone
 
 
 
 
         
/s/Daniel Elenbaas
 
DIRECTOR
 
July 27 2007
Daniel Elenbaas
 
 
 
 
         
         
         
         
         
         
         
 
 
 
 
 
 

 
 
Dean Heller
           Secretary of State
           206 North Carson Street
           Carson City, Nevada 89701-4299
           (775) 684 5708
         
  Entity # 
  E0634762006-6
  Document Number  
  20066547589-26
   
            ARTICLES OF INCORPORATION   Date Filed  
           (PERSUANT TO NRS 78) 
8/25/2006 4:42:35 PM
  In the office of  
  /s/ Dean Heller  
  Dean Heller  
  Secretary of state 
 
Important: Read attached instructions before completing form.                                                       ABOVE SPACE IS FOR OFFICE USE ONLY.
1. 
 
N ame of Corporation: 
 
Zingerang, Inc.
2. 
 
Resident Agent  Name and Street Address:
(must be nevada adress where process may be served)
Registered Agent Solutions, Inc.
Name
726 S Casino Center Blvd. Suite 207                         Las Vegas            Nevada         89101-6712
Street Address                                           City                    State              Zip Code  
 
Optional mailing Address                                                                   City                                 State          Zip Code
3. 
 
Shares:
(number of shares corporation authorized to issue) 
Number of shares with par value:      505,000,000         Par Value: $       .001        Number of shares without par value                            
  (number of shares corporationn authorized to issue)   
4.  Names &Addresses of Board of Directors/Trustees
(attach additional pages oif there is more than 3 directors/trustees)
1. Derek Mcleish
Name
50 Costillian Drive, Suite A ________________ Santa Barbara ____________ CA _______ 93117 _
Street Address                                  City                   State     Zip Code
5. 
Purpose:
( Optional-see instructions)
 
 
The purpose of  this Corporation shall be:
 
6. 
Names, Address and  Signature of Incorporator:
(attach additional pages if there is more than 1 incorporator)
Lance A Martinez                                                                                                       /s/ Lance A. Martinez
Name
 
500 S Grand Ave Suite 2050                                                         Los Angeles                         CA                   90071
Street Address                                           City                    State              Zip Code  
7.  Certificate of Acceptence of Appointment of Resident Agent:
I hereby accept appointment as Resident Agent for the above named corporation.
CSC Services of Nevada, Inc.
By:   /s/ Ricardo                                                                                                   8/25/2006
Authorized Signature of R.A. or On Behalf of R.A Company            Date
     
 
This form must be accompanied by approriate fees. See attached fee schedule.
 
 
 
 
 
 

ARTICLES OF INCORPORATION
OF
ZINGERANG, INC.


ARTICLE I

The name of the corporation is Zingerang, Inc..

ARTICLE II

The purpose of the corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of Nevada.

ARTICLE III

The name and address in the State of Nevada of this corporation’s initial agent for service of process is:
 
Registered Agent Solutions, Inc.
726 S. Casino Center, Blvd.
Suite 207
Las Vegas, Nevada 89101-6742

ARTICLE IV

The corporation is authorized to issue two classes of shares. One class of shares shall be designated as common stock, par value $.001, and the total number of common shares that the corporation is authorized to issue 500,000,000. The other class of shares shall be designated as preferred stock, par value $.001, and the total number preferred stock shall have such rights, preferences and privileges as may be determined by the corporation’s Board of Directors prior to the issuance of such shares. The preferred stock may be issued in such series as are designated by the corporation’s Board of Directors, and the Board of Directors may fix the number of authorized shares of preferred stock for each series, and the rights, preferences and privileges of each series of preferred stock.

ARTICLE V

(a)   The liability of the directors of the corporation for monetary damages shall be eliminated to the fullest extent permissible under Nevada law.

(b)   The corporation is authorized to indemnify the directors and offices of the corporation to the fullest extent permissible under Nevada Law.
 
     
 
 
  		 
  		 
 
  By:   /s/ Lance A. Martinez
 
Lance A. Martinez, Incorporator
   

 
 

 
ROSS MILLER
Secretary of State
 
 
OFFICE OF THE
SECRETARY OF STATE
SCOTT W. ANDERSON
Deputy Secretaty for Commercial Recordings  
 
  Certified Copy
 
 
 
April 9, 2007
 
Job Number: C20070409-2216
  Reference Number: 
Expedite:
Through Date:
 
 
 
The undersigned filing officer hereby certifies that the attached copies are true and exact copies of all requested statements and related subsequent documentation filed with the Secretary of State's Office, Commercial Recordings Division listed on the attached report.
 
 
 
 
  Document Number(s)   Description Number of Pages
     
 20070248383-27   Amendment  1 Pages/1 Copies
   
 
 
                                            Respectfully,
 
 
/s/ Ross Miller
ROSS MILLER 
Secretary of State
 
By: /s/ Mary N. Petters
Mary N. Petters
Certification Clerk
 
 
 
Commercial Recording Division
200 N. Carson Street
Carson City, Nevada 89701-4069
Telephone (775) 684-5708
Fax (775) 684-5630
 
 
Ross Miller
           Secretary of State
           206 North Carson Street
           Carson City, Nevada 89701-4299
           (775) 684 5708
           Webside: secretaryofstate.biz
 
 
 
  Entity # 
  E0634762006-6
  Document Number  
  20070248383-27
   
            CERTIFICATE OF AMENDMENT Date Filed  
           (PERSUANT TO NRS 78 78,365 and 78,390) 
04/09/2007 2:56 PM
  In the office of  
  /s/ Ross Miller
  Ross Miller
  Secretary of state 
 
 
 
Important: Read attached  instructions before completing form:
 
Certificate of Amendment to Articles of Incorporation
For Nevada Profit Corporation
(PURSUANT to NRS 78,385 and 78,390-After Issuance of Stock)
 
1. Name of Corporation:  Zingerang, Inc.
 
2. The articles have been amended as follows (provide article numbers, If available):
 
Article I is hereby amended to as follows:
 
"The Name of the Corporation is Carbon Sciences, Inc."
 
3. The vote by which the stockholders holding shares in the corporation entitling them to exercise at least majority of the voting power, or such greater proportion of the voting power as may be required in the case  of a vote by classes or series, or as may be required by the provisions of the articles of incorporation have voted in favor of this amendment is:  
 
4. Effective date of filing (optional): 
 
5. Officer Signature (required): /s/
 
*If any proposed amendment would alter or change any preference or any relative or other right given to any class or series of outstanding shares then the amendment must be approved by the vote. In addition to the affirmative vote otherwise required of the holders of shares representing a majority of the voting power of each class or series affected by the amendment  regardless of limitations or restrictions on the voting power thereof.
 
IMPORTANT: Failure to include any of the above information and submit the proper fees may cause this filing to be rejected.
 
 
This form must be accompanied by appropriate fees.
 
 
 
 

______________________________________________________________________
 
BYLAWS
 
OF
 
CARBON SCIENCES, INC.
 

 
 
Effective as of
 
 
April 9, 2007
 

 
 
1
 

 
______________________________________________________________________
 
 
BYLAWS
 
 
OF
 
 
CARBON SCIENCES, INC.
 
   ARTICLE 1
 
OFFICES
 
Section 1.1 Offices
 
Carbon Sciences, Inc., a Nevada corporation, (the “Corporation”), may have offices at such places both within and without the State of Nevada as the board of directors of the Corporation (the “Board of Directors”) may from time to time determine or the business of the Corporation may require.
 
   ARTICLE 2
 
MEETINGS OF STOCKHOLDERS
 
Section 2.1 Annual Meeting
 
An annual meeting of the stockholders for the election of directors shall be held at such place either within or without the State of Nevada as shall be designated on an annual basis by the Board of Directors and stated in the notice of the meeting. Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Nevada, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof. Any other proper business may be transacted at the annual meeting.
 
Section 2.2 Notice of Annual Meeting
 
Written notice of the annual meeting stating the place, if any, date, hour of the meeting and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than sixty days before the date of the meeting.
 
Section 2.3 Voting List
 
The officer who has charge of the stock ledger of the Corporation shall prepare and make, or cause a third party to prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of at least ten days prior to the meeting: (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (b) during ordinary business hours, at the principal place of business of the Corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.
 

 
 
2
 

 
Section 2.4 Special Meetings
 
Special meetings of the stockholders of this Corporation, for any purpose or purposes, unless otherwise prescribed by statute or by the articles of incorporation of the Corporation (as amended from time to time, the “Articles of Incorporation”), shall be called by the President or Secretary of the Corporation at the request in writing of (a) a majority of the members of the Board of Directors or (b) holders of at least ten percent of the total voting power of all outstanding shares of stock of the Corporation then entitled to vote, and may not be called absent such a request. Such request shall state the purpose or purposes of the proposed meeting.
 
Section 2.5 Notice of Special Meetings
 
As soon as reasonably practicable after receipt of a request as provided in Section 2.4 , written notice of a special meeting, stating the place, if any, date (which shall be not less than ten nor more than sixty days from the date of the notice), hour and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such special meeting and the purpose or purposes for which the special meeting is called, shall be given to each stockholder entitled to vote at such special meeting.
 
Section 2.6 Scope of Business at Special Meeting
 
Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.
 
Section 2.7 Quorum
 
The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or by means of remote communication, if any, or represented by proxy, shall constitute a quorum at all meetings of stockholders of the Corporation for the transaction of business, except as otherwise provided by statute or by the Articles of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the chairman of the meeting or the stockholders entitled to vote thereat, present in person or by means of remote communication, if any, or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting as provided in Section 2.5 .
 
Section 2.8 Qualifications to Vote
 
The stockholders of record on the books of the Corporation at the close of business on the record date as determined by the Board of Directors and only such stockholders shall be entitled to vote at any meeting of stockholders or any adjournment thereof; provided, however, that the Board of Directors may fix a new record date for any adjourned meeting.
 

 
 
3
 
Section 2.9   Record Date
 
The Board of Directors may fix a record date for the determination of the stockholders entitled to notice of or to vote at any stockholders’ meeting and at any adjournment thereof, or to express consent to corporate action in writing without a meeting, or to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action. The record date shall not be more than sixty nor less than ten days before the date of such meeting, and not more than ten days prior to any action without a meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for any adjourned meeting.
 
Section 2.10 Action at Meetings
 
When a quorum is present at any meeting, the vote of the holders of a majority of the shares of stock having voting power present in person, by means of remote communication, if any, or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of applicable law or of the Articles of Incorporation, a different vote is required, in which case such express provision shall govern and control the decision of such question.
 
Section 2.11 Voting and Proxies
 
Unless otherwise provided in the Articles of Incorporation and subject to applicable law, each stockholder shall, at every meeting of the stockholders of the Corporation, be entitled to one vote in person, by means of remote communication, if any, or by proxy, for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on or after three years from its date, unless the proxy provides for a longer period. Each proxy shall be revocable unless expressly provided therein to be irrevocable and unless and for so long and only to the extent it is coupled with an interest sufficient at law to support an irrevocable power.
 
Section 2.12 Action by Stockholders Without a Meeting .
 
Unless otherwise provided in the Articles of Incorporation, any action required to be taken at any annual or special meeting of stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in the State of Nevada (by hand or by certified or registered mail, return receipt requested), to its principal place of business or to an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Prompt notice of the taking of corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of stockholders to take the action were delivered to the Corporation by delivery to its registered office in the State of Nevada (by hand or by certified or registered mail, return receipt requested), to its principal place of business or to an officer or agent of the Corporation having custody of the book in which proceedings or meetings of stockholders are recorded.
 

 
 
4
 

 
 
ARTICLE 3
 
DIRECTORS
 
Section 3.1 Powers
 
The business of the Corporation shall be managed by or under the direction of the Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by applicable law or by the Articles of Incorporation or by these bylaws of the Corporation (as in effect from time to time, the “Bylaws”), directed or required to be exercised or done by the stockholders.
 
Section 3.2 Number; Election; Tenure and Qualification
 
The number of directors which shall constitute the whole Board of Directors shall be fixed from time to time by resolution of the Board of Directors; provided that the number of directors shall be not less than one, nor more than seven . With the exception of the first Board of Directors, which shall be elected by the incorporator of the Corporation, and except as provided in the Articles of Incorporation or in Section 3.3 , the directors shall be elected at the annual meeting of stockholders by a plurality vote of the shares represented in person, by means of remote communication, if any, or by proxy and each director elected shall hold office until his or her successor is elected and qualified unless he or she shall resign, become disqualified, disabled, or otherwise removed. Directors need not be stockholders.
 
Section 3.3 Vacancies and Newly Created Directorships
 
Unless otherwise provided in the Articles of Incorporation, vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director. The directors so chosen shall serve until the next annual election and until their successors are duly elected and qualified, unless he or she shall resign, become disqualified, disabled, or otherwise removed. If there are no directors in office, then an election of directors may be held in the manner provided by applicable law.
 
Section 3.4 Location of Meetings
 
The Board of Directors may hold meetings, both regular and special, either within or without the State of Nevada.
 
Section 3.5 Meeting of Newly Elected Board of Directors
 
The first meeting of each newly elected Board of Directors shall be held immediately following the annual meeting of stockholders and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting; provided that a quorum shall be present. In the event such meeting is not held at such time, the meeting may be held at such time and place as shall be specified in a notice given in the manner specified for special meetings of the Board of Directors, or as shall be specified in a written waiver signed by all of the directors.
 

 
 
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Section 3.6 Regular Meetings
 
Regular meetings of the Board of Directors may be held without notice at such time and at such place, if any, as shall from time to time be determined by the Board of Directors; provided that any director who is absent when such a determination is made shall be given notice of such location, if any.
 
Section 3.7 Special Meetings
 
Special meetings of the Board of Directors may be called by the Chairman of the Board of Directors, if there be one, President of the Corporation or any director on two days’ notice to each director by mail or overnight courier service or one days’ notice to each director by telephone, facsimile, telegram or by a form of electronic transmission consented to by director to whom notice is given or such shorter notice as the person or persons calling such meeting may deem necessary or appropriate in the circumstance. Notice may be waived in accordance with Section 78.375 of the Nevada Revised Statutes (as in effect from time to time, the “NRS”).
 
Section 3.8 Quorum and Action at Meetings
 
At all meetings of the Board of Directors, a majority of the directors then in office shall constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute or by the Articles of Incorporation. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.
 
Section 3.9 Action Without a Meeting
 
Unless otherwise restricted by the NRS, the Articles of Incorporation or the Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if all members of the Board of Directors or committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or such committee. Such filing shall be in paper form (including a paper copy of an electronic transmission) if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
 
Section 3.10 Telephonic/Electronic Meeting
 
Unless otherwise restricted by the Articles of Incorporation or the Bylaws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or any committee, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.
 

 
 
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Section 3.11   Committees
 
The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors, or in the Bylaws of the Corporation, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and the affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to the following matters: (a) approving or adopting, or recommending to the stockholders, any action or matter expressly required by this chapter to be submitted to stockholders for approval or (b) adopting, amending or repealing any bylaw of the Corporation.
 
Section 3.12 Committee Authority
 
Any such committee, to the extent allowed by law and provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors.
 
Section 3.13 Committee Minutes
 
Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required to do so by the Board of Directors.
 
Section 3.14 Directors Compensation
 
Unless otherwise restricted by the Articles of Incorporation or the Bylaws, the Board of Directors shall have the authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.
 
Section 3.15 Resignation
 
Any director or officer of the Corporation may resign at any time. Each such resignation shall be made in writing or by electronic transmission and shall take effect at the time specified therein, or, if no time is specified, at the time of its receipt by either the Board of Directors, the President of the Corporation or the Secretary of the Corporation. The acceptance of a resignation shall not be necessary to make it effective unless expressly so provided in the resignation.
 

 
 
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Section 3.16   Removal
 
Unless otherwise restricted by the Articles of Incorporation, the Bylaws or applicable law, any director or the entire Board of Directors may be removed, with or without cause, by the holders of a majority of shares entitled to vote at an election of directors.
 
ARTICLE 4
 
NOTICES
 
Section 4.1 Notice to Directors and Stockholders
 
Whenever, under the provisions of applicable law, the Articles of Incorporation or the Bylaws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his or her address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail or, by a form of electronic transmission consented to by stockholder or director to whom notice is given. An affidavit of the Secretary or an Assistant Secretary or of the transfer agent or other agent of the Corporation that the notice has been given shall in the absence of fraud, be prima facie evidence of the facts stated therein. Notice to directors may also be given by telephone, facsimile, telegram or electronic transmission.
 
Section 4.2 Waiver
 
Whenever notice is required to be given under applicable law, the Articles of Incorporation or the Bylaws, a written waiver, signed by the person or persons entitled to said notice, or a waiver by electronic transmission by the person entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. The written waiver or any waiver by electronic transmission need not specify the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors, or members of a committee of directors. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Attendance at the meeting is not a waiver of any right to object to the consideration of matters required by the NRS to be included in the notice of the meeting but not so included, if such objection is expressly made at the meeting.
 
ARTICLE 5
 
OFFICERS
 
Section 5.1 Enumeration
 
The officers of the Corporation shall be chosen by the Board of Directors and shall include a President, a Secretary, a Chief Financial Officer and such other officers with such other titles as the Board of Directors shall determine. The Board of Directors may elect from among its members a Chairman or Chairmen of the Board and a Vice Chairman of the Board. The Board of Directors may also choose one or more Vice Presidents and Assistant Secretaries. Any number of offices may be held by the same person, unless the Articles of Incorporation or the Bylaws otherwise provide.

 
 
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Section 5.2 Election
 
The Board of Directors at its first meeting after each annual meeting of stockholders shall elect a President, a Secretary, a Chief Financial Officer and such other officers with such other titles as the Board of Directors shall determine.
 
Section 5.3 Appointment of Other Agents
 
The Board of Directors may appoint such other officers and agents as it shall deem necessary, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors.
 
Section 5.4 C ompensation
 
The salaries of all officers of the Corporation shall be fixed by the Board of Directors or a committee thereof. The salaries of agents of the Corporation shall, unless fixed by the Board of Directors, be fixed by the President or any Vice President of the Corporation.
 
Section 5.5 Tenure
 
The officers of the Corporation shall hold office until their successors are elected and qualify or until such officer’s earlier resignation or removal. Any officer elected or appointed by the Board of Directors may be removed at any time by the affirmative vote of a majority of the directors of the Board of Directors. Any vacancy occurring in any office of the Corporation shall be filled by the Board of Directors.
 
Section 5.6 Chairman of the Board and Vice-Chairman of the Board
 
The Chairman of the Board, if any, shall preside at all meetings of the Board of Directors and of the stockholders of the Corporation at which he or she shall be present. The Chairman shall have and may exercise such powers as are, from time to time, assigned to the Chairman by the Board of Directors and as may be provided by law. In the absence of the Chairman of the Board, the Vice Chairman of the Board, if any, shall preside at all meetings of the Board of Directors and of the stockholders of the Corporation at which the Vice Chairman shall be present. The Vice Chairman shall have and may exercise such powers as are, from time to time, assigned to such person by the Board of Directors and as may be provided by law.
 
Section 5.7 President
 
The President shall be the Chief Executive Officer of the Corporation unless such title is assigned to another officer of the Corporation; in the absence of a Chairman and Vice Chairman of the Board, the President shall preside as the chairman of meetings of the stockholders of the Corporation and the Board of Directors; and the President shall have general and active management of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. The President or any Vice President shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation.
 

 
 
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Section 5.8   Vice President
 
In the absence of the President or in the event of the President’s inability or refusal to act, the Vice President, if any (or in the event there be more than one Vice President, the Vice Presidents in the order designated by the Board of Directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the President, and when so acting shall have all the powers of and be subject to all the restrictions upon the President. The Vice President shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.
 
Section 5.9 Secretary
 
The Secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders of the Corporation and record all the proceedings of the meetings of the Corporation and of the Board of Directors in a book on electronic record to be kept for that purpose and shall perform like duties for the standing committees when required. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders of the Corporation and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or President, under whose supervision the Secretary shall be subject. The Secretary shall have custody of the corporate seal of the Corporation and the Secretary, or an Assistant Secretary, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the Secretary’s signature or by the signature of such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by such officer’s signature.
 
Section 5.10 Assistant Secretary
 
The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election) shall, in the absence of the Secretary or in the event of the Secretary’s inability or refusal to act, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.
 
Section 5.11 Chief Financial Officer
 
The Chief Financial Officer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors and the Board of Directors may, by resolution, delegate such power of designation to any officer or officers of the Corporation. The Chief Financial Officer shall disburse the funds of the Corporation as may be ordered by the Board of Directors or any officer of the Corporation to whom the Board of Directors may, by resolution, delegate such power, taking proper vouchers for such disbursements, and shall, upon request, render to the President and the Board of Directors, an account of all such transactions as Chief Financial Officer and of the financial condition of the Corporation. If required by the Board of Directors, Chief Financial Officer shall give the Corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of the Chief Financial Officer’s office and for the restoration to the Corporation, in case of the Chief Financial Officer’s death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in the possession or under the control of the Chief Financial Officer that belongs to the Corporation.
 
ARTICLE 6
 
CAPITAL STOCK
 
Section 6.1 Certificates
 
The shares of capital stock of the Corporation shall be represented by a certificate, unless and until the Board of Directors adopts a resolution permitting shares to be uncertificated. Certificates shall be signed by, or in the name of the Corporation by, (a) the President or any Vice President, and (b) the Secretary or any Assistant Secretary, certifying the number of shares owned by such stockholder in the Corporation.
 
Section 6.2 Signature
 
Any of or all of the signatures on a certificate may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile or conformed signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.
 
Section 6.3 Lost Certificates
 
The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or such owner’s legal representative, to advertise the same in such manner as it shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed.
 
Section 6.4 Transfer of Stock
 
Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Upon receipt of proper transfer instructions from the registered owner of uncertificated shares such uncertificated shares shall be canceled and issuance of new equivalent uncertificated shares or certificated shares shall be made to the person entitled thereto and the transaction shall be recorded upon the books of the Corporation.
 
Section 6.5 Record Date
 
In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholder or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for any adjourned meeting.
 
Section 6.6 Registered Stockholders
 
The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Nevada.
 
ARTICLE 7
 
GENERAL PROVISIONS
 
Section 7.1 Dividends
 
The Board of Directors, subject to the applicable provisions, if any, of the Articles of Incorporation and the NRS, may declare and pay dividends upon the capital stock of the Corporation. Dividends may be paid in cash, in property or in shares of capital stock, subject to the provisions of the Articles of Incorporation. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in their absolute discretion, deem proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purposes as the Board of Directors shall deem conducive to the interest of the Corporation, and the Board of Directors may modify or abolish any such reserve in the manner in which it was created.
 
Section 7.2 Checks
 
All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.
 
Section 7.3 Fiscal Year
 
The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.
 
Section 7.4 Seal
 
The Board of Directors may adopt a corporate seal having inscribed thereon the name of the Corporation, the year of its organization and the words “Corporate Seal, Nevada.” The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
 
Section 7.5 Loans
 
The Board of Directors of this Corporation may, without stockholder approval, authorize loans to, or guaranty obligations of, or otherwise assist, including, without limitation, the adoption of employee benefit plans under which loans and guarantees may be made, any officer or other employee of the Corporation or of any of its subsidiaries, including any officer or employee who is a director of the Corporation or any of its subsidiaries, whenever, in the judgment of the Board of Directors, such loan, guaranty or assistance may reasonably be expected to benefit the Corporation. The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the Board of Directors shall approve, including, without limitation, a pledge of shares of stock of the Corporation.
 
ARTICLE 8
 
INDEMNIFICATION
 
Section 8.1 Scope
 
The Corporation shall, to the fullest extent permitted by the NRS, as it may be amended and supplemented from time to time, or any other applicable provision or law, indemnify any director, officer, employee or agent of the Corporation, against expenses (including attorneys’ fees), judgments, fines, amounts paid in settlement and/or other matters referred to in or covered by that section, by reason of the fact that such person is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise.   Without limiting the generality of the foregoing, the Corporation is authorized to provide indemnification of agents in excess of that otherwise permitted by sections 78.7502 and 78.751 of the Nevada General Corporation Law for those agents of the Corporation for breach of duty to the Corporation and its stockholders; provided, however, that the Corporation is not authorized to provide indemnification of any agent for any acts or omissions or transactions from which a director may not be relieved of liability as set forth in section 78.037(1) of the NRS.
 
Section 8.2 Advancing Expenses
 
Expenses (including attorneys’ fees) incurred by a present or former director or officer of the Corporation in defending a civil, criminal, administrative or investigative action, suit or proceeding by reason of the fact that such person is or was a director, officer, employee or agent of the Corporation (or is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise) shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized by relevant provisions of the NRS or other applicable provision or law; provided, however, the Corporation shall not be required to advance such expenses to a director (i) who commences any action, suit or proceeding as a plaintiff unless such advance is specifically approved by a majority of the Board of Directors, or (ii) who is a party to an action, suit or proceeding brought by the Corporation and approved by a majority of the Board of Directors which alleges willful misappropriation of corporate assets by such director, disclosure of confidential information in violation of such director’s fiduciary or contractual obligations to the Corporation, or any other willful and deliberate breach in bad faith of such director’s duty to the Corporation or its stockholders.
 
Section 8.3 Liability Offset
 
If the Corporation provides indemnification under this Article 8 such indemnification shall be offset to the extent the indemnified party is indemnified by any other source including, but not limited to, any applicable insurance coverage under a policy maintained by the Corporation, the indemnified party or any other person.
 
Section 8.4 Continuing Obligation
 
The provisions of this Article 8 shall be deemed to be a contract between the Corporation and each director of the Corporation who serves in such capacity at any time while this bylaw is in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any state of facts then or theretofore existing or any action, suit or proceeding theretofore or thereafter brought based in whole or in part upon any such state of facts.
 
Section 8.5 Nonexclusive
 
The indemnification and advancement of expenses provided for in this Article 8 shall (a) not be deemed exclusive of any other rights to which those indemnified may be entitled under any bylaw, agreement or vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office, (b) continue as to a person who has ceased to be a director and (c) inure to the benefit of the heirs, executors and administrators of such a person.
 
Section 8.6 Other Persons
 
In addition to the indemnification rights of directors, officers, employees, or agents of the Corporation, the Board of Directors in its discretion shall have the power on behalf of the Corporation to indemnify any other person made a party to any action, suit or proceeding who the Corporation may indemnify under Section 78.7502 of the NRS or other applicable provision or law.
 
ARTICLE 9
 
AMENDMENTS
 
Section 9.1 Amendments
 
Except as otherwise provided in the Articles of Incorporation, the Bylaws may be altered, amended or repealed, or new Bylaws may be adopted, by the holders of a majority of the outstanding voting shares of the Corporation or by the Board of Directors, when such power is conferred upon the Board of Directors by the Articles of Incorporation, at any regular meeting of the stockholders or of the Board of Directors or at any special meeting of the stockholders or of the Board of Directors if notice of such alteration, amendment, repeal or adoption of new Bylaws be contained in the notice of such special meeting. If the power to adopt, amend or repeal Bylaws is conferred upon the Board of Directors by the Articles of Incorporation, it shall not divest or limit the power of the stockholders to adopt, amend or repeal Bylaws.

 
 
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CERTIFICATE OF SECRETARY
 
 
I, the undersigned, do hereby certify:
 
1.   That I am the duly elected and acting Secretary of Carbon Sciences, Inc. , a Nevada corporation; and
 
2.   That the foregoing amended and restated bylaws, comprising 14 pages, constitute a true copy of the bylaws of said corporation as duly adopted by the Board of Directors thereof.
 
IN WITNESS WHEREOF, I have hereunto subscribed my name this 9th day of April, 2007.
 
 
 
 
_______________, Secretary

 


EXHIBIT 5.1
 
SICHENZIA ROSS FRIEDMAN FERENCE
ATTORNEYS AT LAW
 
 

July 27, 2007

VIA ELECTRONIC TRANSMISSION
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549

RE:         Carbon Sciences, Inc.
Form SB-2 Registration Statement (File No. 333- )

Ladies and Gentlemen:

We refer to the above-captioned registration statement on Form SB-2 (the “Registration Statement”) under the Securities Act of 1933, as amended (the “Securities Act”), filed by Carbon Sciences, Inc., a Nevada corporation (the “Company”), with the Securities and Exchange Commission.

We have examined the originals, photocopies, certified copies or other evidence of such records of the Company, certificates of officers of the Company and public officials, and other documents as we have deemed relevant and necessary as a basis for the opinion hereinafter expressed. In such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as certified copies or photocopies and the authenticity of the originals of such latter documents.

Based on our examination mentioned above, we are of the opinion that: (a) the outstanding shares of common stock being sold pursuant to the Registration Statement are legally and validly issued, fully paid and non-assessable; and (b) the shares of common stock issuable upon exercise of outstanding warrants are duly authorized and will be, when issued in the manner described in the Registration Statement, legally and validly issued, fully paid and non-assessable.

We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement and to the reference to our firm under “Legal Matters” in the related Prospectus. In giving the foregoing consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act, or the rules and regulations of the Securities and Exchange Commission.
 
     
  Very truly yours,
 
  		 
  		 
 
  By:   /s/ Sichenzia Ross Friedman Ference LLP
 
Sichenzia Ross Friedman Ference LLP
   

September 18, 2006

To the Board of Directors of
Zingerang, Inc. (the "Company"):

Gentlemen:

The undersigned (the Subscriber”) hereby subscribes to purchase ______ shares of Zingerang, Inc.’s common stock (the “Founders Shares”) at a price of $0.00025 per share, representing a total purchase price of ________

As a purchaser of Founders Shares offered to founders, the Subscriber understands that, the Company intends to offer additional shares of common stock in one or more private offerings (the "Private Offerings"). After the completion of the Private Offerings, the Company has agreed to file with the Securities and Exchange Commission ("SEC") an SB-2 registration statement (the "Registration Statement") to register certain shares of common stock described in its Private Offerings and to exercise its reasonable best efforts to cause the Registration Statement to become effective. The Company has also agreed to request a broker-dealer to file with the National Association of Securities Dealers, Inc. (the "NASD") to secure the listing or quotation of its Common Stock on the Over the Counter Bulletin Board market maintained by the NASD.

As an inducement to the purchasers of the Private Offerings and to NASD market makers to establish a public market for the common stock, the undersigned hereby agrees that from the date hereof and until two (2) years after the Registration Statement is declared effective by the SEC (the “Lock-up Term”), the Subscriber will not sell or offer to sell any unregistered shares of the Company's common stock which the Subscriber owns as may be permitted pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended (the “Securities Act”).

Any shares of common stock acquired by the undersigned in the Private Offerings and included in the Registration Statement will not be subject to the lock-up provisions of this Agreement.

Once the Lock-up Term has expired, the Subscriber will be entitled to piggyback registration rights. If the Company proposes to file a registration statement under the Securities Act with respect to an offering for its own account of any class of its equity securities (other than a registration statement on Form S-8 (or any successor form) or any other registration statement relating solely to employee benefit plans or filed in connection with an exchange offer, a transaction to which Rule 145 (or any successor provision) under the Securities Act applies or an offering of securities solely to the Company's existing shareholders), then the Company shall in each case give written notice of such proposed filing to the Subscriber as soon as practicable (but no later than 20 business days) before the anticipated filing date, and such notice shall offer the Subscriber the opportunity to register such number of Founders Shares the Subscriber may request. The Subscriber shall so advise the Company in writing within 10 business days after the date on which the Company’s notice is so given, setting forth the number of Founders Shares for which registration is requested. If the Company’s offering is to be an underwritten offering, the Company shall use its reasonable best efforts to cause the managing underwriter or underwriters to permit the Subscriber to include the requested number of Founders Shares in such offering on the same terms and conditions as any similar securities of the Company included therein. Once the registration statement is declared effective by the SEC, the Subscriber will not sell or distribute more than 25% of Subscriber’s Founders Shares included in the registration every ninety (90) days.
 
 

 
In furtherance of the foregoing, the Company and its transfer agent and registrar are hereby authorized to decline to remove restrictive legends from any share certificates held by the undersigned if such removal would constitute a violation or breach of this Agreement.

This agreement shall be binding on the Subscriber and the successors, heirs, personal representatives and assigns of the Subscriber.


_______________________________    
Signature        

_______________________________
Name of Subscriber (printed)

_______________________________
Street Address

_______________________________
City       State   Zip

_______________________________
Tax I.D. Number

_______________________________
Telephone

_______________________________
Email

This Subscription Agreement is agreed to and accepted as of September   , 2006.
 
 
     
  ZINGERANG, INC.
 
  		 
  		 
 
  By:   /s/ 
 
Name: Derek McLeish
Title: Chief Executive Officer
   
 

 

SUBSCRIPTION AGREEMENT
 
SUBSCRIPTION AGREEMENT (this “Agreement”) made as of the last date set forth on the signature page hereof between Zingerang, Inc. (the “Company”), and the undersigned (the “Subscriber”).
 
W I T N E S S E T H:
 
WHEREAS, the Company is conducting a private offering (the “Offering”) consisting of up to 1,500,000 shares of common stock, par value $.001 per share (“Shares”); and
 
WHEREAS, the Subscriber desires to purchase that number of Shares set forth on the signature page hereof on the terms and conditions hereinafter set forth.
 
NOW, THEREFORE, in consideration of the premises and the mutual representations and covenants hereinafter set forth, the parties hereto do hereby agree as follows:
 
I.
SUBSCRIPTION FOR SHARES AND REPRESENTATIONS BY SUBSCRIBER
 
1.1   Subject to the terms and conditions hereinafter set forth and in the Confidential Offering Memorandum dated October 24, 2006 (such memorandum, together with all amendments thereof and supplements and exhibits thereto, the “Memorandum”), the Subscriber hereby irrevocably subscribes for and agrees to purchase from the Company such number of Shares, and the Company agrees to sell to the Subscriber as is set forth on the signature page hereof, at a per share price equal to $0.10 per Share. The purchase price is payable by personal or business check or money order made payable to “Zingerang, Inc.” contemporaneously with the execution and delivery of this Agreement by the Subscriber. Subscribers may also pay the subscription amount by, wire transfer of immediately available funds to:
 
Name:               Zingerang, Inc
 
Bank:     Bank of America
 5892 Calle Real=
  Goleta, CA 93117    

Account:        04165-43337  

ABA:     026009593    

1.2   The Subscriber recognizes that the purchase of the Shares involves a high degree of risk including, but not limited to, the following: (a) the Company remains a development stage business with limited operating history and requires substantial funds in addition to the proceeds of the Offering; (b) an investment in the Company is highly speculative, and only investors who can afford the loss of their entire investment should consider investing in the Company and the Shares; (c) the Subscriber may not be able to liquidate its investment; (d) transferability of the Shares (sometimes hereinafter collectively referred to as the “Securities”) is extremely limited; (e) in the event of a disposition, the Subscriber could sustain the loss of its entire investment; (f) the Company has not paid any dividends since its inception and does not anticipate paying any dividends; and (g) the Company may issue additional securities in the future which have rights and preferences that are senior to those of the Common Stock. Without limiting the generality of the representations set forth in Section 1.5 below, the Subscriber represents that the Subscriber has carefully reviewed the section of the Memorandum captioned “Risk Factors.”
 

 
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1.3   The Subscriber represents that the Subscriber is an “accredited investor” as such term is defined in Rule 501 of Regulation D (“Regulation D”) promulgated under the Securities Act of 1933, as amended (the “Securities Act”), as indicated by the Subscriber’s responses to the questions contained in Article VII hereof, and that the Subscriber is able to bear the economic risk of an investment in the Shares.
 
1.4   The Subscriber hereby acknowledges and represents that (a) the Subscriber has knowledge and experience in business and financial matters, prior investment experience, including investment in securities that are non-listed, unregistered and/or not traded on a national securities exchange nor on the National Association of Securities Dealers, Inc. (the “NASD”) automated quotation system (“NASDAQ”), or the Subscriber has employed the services of a “purchaser representative” (as defined in Rule 501 of Regulation D), attorney and/or accountant to read all of the documents furnished or made available by the Company both to the Subscriber and to all other prospective investors in the Shares to evaluate the merits and risks of such an investment on the Subscriber’s behalf; (b) the Subscriber recognizes the highly speculative nature of this investment; and (c) the Subscriber is able to bear the economic risk that the Subscriber hereby assumes.
 
1.5   The Subscriber hereby acknowledges receipt and careful review of this Agreement, the Memorandum (which includes the Risk Factors), including all exhibits thereto, and any documents which may have been made available upon request as reflected therein (collectively referred to as the “Offering Materials”) and hereby represents that the Subscriber has been furnished by the Company during the course of the Offering with all information regarding the Company, the terms and conditions of the Offering and any additional information that the Subscriber has requested or desired to know, and has been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other representatives of the Company concerning the Company and the terms and conditions of the Offering.
 
1.6   a)   In making the decision to invest in the Shares the Subscriber has relied solely upon the information provided by the Company in the Offering Materials. To the extent necessary, the Subscriber has retained, at its own expense, and relied upon appropriate professional advice regarding the investment, tax and legal merits and consequences of this Agreement and the purchase of the Shares hereunder. The Subscriber disclaims reliance on any statements made or information provided by any person or entity in the course of Subscriber’s consideration of an investment in the Shares other than the Offering Materials.
 
(b)   The Subscriber represents that (i) the Subscriber was contacted regarding the sale of the Shares by the Company (or an authorized agent or representative thereof) with whom the Subscriber had a prior substantial pre-existing relationship and (ii) no Shares were offered or sold to it by means of any form of general solicitation or general advertising, and in connection therewith, the Subscriber did not (A) receive or review any advertisement, article, notice or other communication published in a newspaper or magazine or similar media or broadcast over television or radio, whether closed circuit, or generally available; or (B) attend any seminar meeting or industry investor conference whose attendees were invited by any general solicitation or general advertising.
 

 
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1.7   The Subscriber hereby represents that the Subscriber, either by reason of the Subscriber’s business or financial experience or the business or financial experience of the Subscriber’s professional advisors (who are unaffiliated with and not compensated by the Company or any affiliate or selling agent of the Company, directly or indirectly), has the capacity to protect the Subscriber’s own interests in connection with the transaction contemplated hereby.
 
1.8   The Subscriber hereby acknowledges that the Offering has not been reviewed by the United States Securities and Exchange Commission (the “SEC”) nor any state regulatory authority since the Offering is intended to be exempt from the registration requirements of Section 5 of the Securities Act pursuant to Regulation D promulgated thereunder. The Subscriber understands that the Securities have not been registered under the Securities Act or under any state securities or “blue sky” laws and agrees not to sell, pledge, assign or otherwise transfer or dispose of the Securities unless they are registered under the Securities Act and under any applicable state securities or “blue sky” laws or unless an exemption from such registration is available.
 
1.9   The Subscriber understands that the Securities comprising the Shares have not been registered under the Securities Act by reason of a claimed exemption under the provisions of the Securities Act that depends, in part, upon the Subscriber’s investment intention. In this connection, the Subscriber hereby represents that the Subscriber is purchasing the Securities for the Subscriber’s own account for investment and not with a view toward the resale or distribution to others. The Subscriber, if an entity, further represents that it was not formed for the purpose of purchasing the Securities.
 
1.10   The Subscriber understands that there is no public market for the Common Stock and that no market may develop for any of such Securities. The Subscriber understands that even if a public market develops for such Securities, Rule 144 (“Rule 144”) promulgated under the Securities Act requires for non-affiliates, among other conditions, a one-year holding period prior to the resale (in limited amounts) of securities acquired in a non-public offering without having to satisfy the registration requirements under the Securities Act. The Subscriber understands and hereby acknowledges that the Company is under no obligation to register any of the Securities under the Securities Act or any state securities or “blue sky” laws other than as set forth in Article V.
 
1.11   The Subscriber consents to the placement of a legend on any certificate or other document evidencing the Securities that such Securities have not been registered under the Securities Act or any state securities or “blue sky” laws and setting forth or referring to the restrictions on transferability and sale thereof contained in this Agreement. The Subscriber is aware that the Company will make a notation in its appropriate records with respect to the restrictions on the transferability of such Securities. The legend to be placed on each certificate shall be in form substantially similar to the following:
 

 
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“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES OR “BLUE SKY LAWS,” AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”
 
1.12   The Subscriber understands that the Company will review this Agreement and is hereby given authority by the Subscriber to call Subscriber’s bank or place of employment or otherwise review the financial standing of the Subscriber; and it is further agreed that the Company, at its sole discretion, reserves the unrestricted right, without further documentation or agreement on the part of the Subscriber, to reject or limit any subscription, to accept subscriptions for fractional Shares and to close the Offering to the Subscriber at any time and that the Company will issue stop transfer instructions to its transfer agent with respect to such Securities.
 
1.13   The Subscriber hereby represents that the address of the Subscriber furnished by Subscriber on the signature page hereof is the Subscriber’s principal residence if Subscriber is an individual or its principal business address if it is a corporation or other entity.
 
1.14   The Subscriber represents that the Subscriber has full power and authority (corporate, statutory and otherwise) to execute and deliver this Agreement and to purchase the Shares. This Agreement constitutes the legal, valid and binding obligation of the Subscriber, enforceable against the Subscriber in accordance with its terms.
 
1.15   If the Subscriber is a corporation, partnership, limited liability company, trust, employee benefit plan, individual retirement account, Keogh Plan, or other tax-exempt entity, it is authorized and qualified to invest in the Company and the person signing this Agreement on behalf of such entity has been duly authorized by such entity to do so.
 
1.16   The Subscriber acknowledges that if he or she is a Registered Representative of an NASD member firm, he or she must give such firm the notice required by the NASD’s Rules of Fair Practice, receipt of which must be acknowledged by such firm in Section 7.4 below.
 
1.17   The Subscriber acknowledges that at such time, if ever, as the Securities are registered (as such term is defined in Article V hereof), sales of the Securities will be subject to state securities laws.
 
1.18   b)   The Subscriber agrees not to issue any public statement with respect to the Subscriber’s investment or proposed investment in the Company or the terms of any agreement or covenant between them and the Company without the Company’s prior written consent, except such disclosures as may be required under applicable law or under any applicable order, rule or regulation.

 
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(b)   The Company agrees not to disclose the names, addresses or any other information about the Subscribers, except as required by law; provided, that the Company may use the name of the Subscriber for any offering or in any registration statement filed pursuant to Article V in which the Subscriber’s shares are included.
 
1.19   The Subscriber agrees to hold the Company and its directors, officers, employees, affiliates, controlling persons and agents and their respective heirs, representatives, successors and assigns harmless and to indemnify them against all liabilities, costs and expenses incurred by them as a result of (a) any sale or distribution of the Securities by the Subscriber in violation of the Securities Act or any applicable state securities or “blue sky” laws; or (b) any false representation or warranty or any breach or failure by the Subscriber to comply with any covenant made by the Subscriber in this Agreement (including the Confidential Investor Questionnaire contained in Article VII herein) or any other document furnished by the Subscriber to any of the foregoing in connection with this transaction.
 

II.
REPRESENTATIONS BY AND COVENANTS OF THE COMPANY
 
The Company hereby represents and warrants to the Subscriber that:
 
2.1   Organization, Good Standing and Qualification . The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has full corporate power and authority to conduct its business.
 
2.2   Capitalization and Voting Rights . The Company has authorized 500,000,000 shares of Common Stock, par value $.001 per share, of which 127,500,000 shares are outstanding as of the date hereof. Except as set forth in the Offering Materials, there are no outstanding options, warrants, agreements, convertible securities, preemptive rights or other rights to subscribe for or to purchase any shares of capital stock of the Company. Except as set forth in the Offering Materials and as otherwise required by law, there are no restrictions upon the voting or transfer of any of the shares of capital stock of the Company pursuant to the Company’s Articles of Incorporation (the “Articles of Incorporation”), By-Laws or other governing documents or any agreement or other instruments to which the Company is a party or by which the Company is bound.
 
2.3   Authorization; Enforceability . The Company has all corporate right, power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. All corporate action on the part of the Company, its directors and stockholders necessary for the (i) authorization execution, delivery and performance of this Agreement by the Company; and (ii) authorization, sale, issuance and delivery of the Securities contemplated hereby and the performance of the Company’s obligations hereunder has been taken. This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies, and to limitations of public policy. The Common Stock, when issued and fully paid for in accordance with the terms of this Agreement, will be validly issued, fully paid and nonassessable. The issuance and sale of the Common Stock contemplated hereby will not give rise to any preemptive rights or rights of first refusal on behalf of any person which have not been waived in connection with this offering.
 

 
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2.4   No Conflict; Governmental Consents .
 
(a)   The execution and delivery by the Company of this Agreement and the consummation of the transactions contemplated hereby will not result in the violation of any material law, statute, rule, regulation, order, writ, injunction, judgment or decree of any court or governmental authority to or by which the Company is bound, or of any provision of the Articles of Incorporation or By-Laws of the Company, and will not conflict with, or result in a material breach or violation of, any of the terms or provisions of, or constitute (with due notice or lapse of time or both) a default under, any lease, loan agreement, mortgage, security agreement, trust indenture or other agreement or instrument to which the Company is a party or by which it is bound or to which any of its properties or assets is subject, nor result in the creation or imposition of any lien upon any of the properties or assets of the Company.
 
(b)   No consent, approval, authorization or other order of any governmental authority is required to be obtained by the Company in connection with the authorization, execution and delivery of this Agreement or with the authorization, issue and sale of the Shares, except such filings as may be required to be made with the SEC, NASD, NASDAQ and with any state or foreign blue sky or securities regulatory authority.
 
2.5   Licenses . Except as otherwise set forth in the Memorandum, the Company has sufficient licenses, permits and other governmental authorizations currently required for the conduct of its business or ownership of properties and is in all material respects in compliance therewith.
 
2.6   Litigation . The Company knows of no pending or threatened legal or governmental proceedings against the Company which could materially adversely affect the business, property, financial condition or operations of the Company or which materially and adversely questions the validity of this Agreement or any agreements related to the transactions contemplated hereby or the right of the Company to enter into any of such agreements, or to consummate the transactions contemplated hereby or thereby. The Company is not a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality which could materially adversely affect the business, property, financial condition or operations of the Company. There is no action, suit, proceeding or investigation by the Company currently pending in any court or before any arbitrator or that the Company intends to initiate.
 
2.7   Disclosure . The information set forth in the Offering Materials as of the date hereof contains no untrue statement of a material fact nor omits to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading.

 
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2.8   Investment Company . The Company is not an “investment company” within the meaning of such term under the Investment Company Act of 1940, as amended, and the rules and regulations of the SEC thereunder.
 
2.9   Intellectual Property .
 
(i)   To the best of its knowledge, the Company owns or possesses sufficient legal rights to all patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information and other proprietary rights and processes necessary for its business as now conducted and as presently proposed to be conducted, without any known infringement of the rights of others. Except as disclosed in the Memorandum, there are no material outstanding options, licenses or agreements of any kind relating to the foregoing proprietary rights, nor is the Company bound by or a party to any material options, licenses or agreements of any kind with respect to the patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information and other proprietary rights and processes of any other person or entity other than such licenses or agreements arising from the purchase of “off the shelf” or standard products. The Company has not received any written communications alleging that the Company has violated or, by conducting its business as presently proposed to be conducted, would violate any of the patents, trademarks, service marks, trade names, copyrights or trade secrets or other proprietary rights of any other person or entity.
 
(ii)   Except as disclosed in the Memorandum, the Company is not aware that any of its employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with their duties to the Company or that would conflict with the Company’s business as presently conducted.
 
(iii)   Neither the execution nor delivery of this Agreement, nor the carrying on of the Company’s business by the employees of the Company, nor the conduct of the Company’s business as presently conducted, will, to the Company’s knowledge, conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract, covenant or instrument under which any employee is now obligated.
 
(iv)   To the Company’s knowledge, no employee of the Company, nor any consultant with whom the Company has contracted, is in violation of any term of any employment contract, proprietary information agreement or any other agreement relating to the right of any such individual to be employed by, or to contract with, the Company because of the nature of the business conducted by the Company; and to the Company’s knowledge the continued employment by the Company of its present employees, and the performance of the Company’s contracts with its independent contractors, will not result in any such violation. The Company has not received any written notice alleging that any such violation has occurred. Except as described in the Memorandum, no employee of the Company has been granted the right to continued employment by the Company or to any compensation following termination of employment with the Company except for any of the same which would not have a material adverse effect on the business of the Company. The Company is not aware that any officer, key employee or group of employees intends to terminate his, her or their employment with the Company, nor does the Company have a present intention to terminate the employment of any officer, key employee or group of employees.
 

 
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2.10   Title to Properties and Assets; Liens, Etc . The Company has good and marketable title to its properties and assets, including the properties and assets reflected in the most recent balance sheet included in the Financial Statements, and good title to its leasehold estates, in each case subject to no mortgage, pledge, lien, lease, encumbrance or charge, other than (a) those resulting from taxes which have not yet become delinquent; (b) liens and encumbrances which do not materially detract from the value of the property subject thereto or materially impair the operations of the Company; and (c) those that have otherwise arisen in the ordinary course of business. The Company is in compliance with all material terms of each lease to which it is a party or is otherwise bound.
 
2.11   Obligations to Related Parties . Except as described in the Memorandum, there are no obligations of the Company to officers, directors, stockholders, or employees of the Company other than (a) for payment of salary or other compensation for services rendered, (b) reimbursement for reasonable expenses incurred on behalf of the Company and (c) for other standard employee benefits made generally available to all employees (including stock option agreements outstanding under any stock option plan approved by the Board of Directors of the Company). Except as may be disclosed in the Memorandum, the Company is not a guarantor or indemnitor of any indebtedness of any other person, firm or corporation.
 

III.
TERMS OF SUBSCRIPTION
 
3.1   There is no requirement that any minimum number of Shares be sold and therefore no escrow will be established for subscription funds. Subscription funds may be deposited by the Company directly into its operating account for use as described in this Confidential Offering Memorandum.
 
3.2   Certificates representing the Common Stock purchased by the Subscriber pursuant to this Agreement will be prepared for delivery to the Subscriber within 15 business days following the Closing at which such purchase takes place. The Subscriber hereby authorizes and directs the Company to deliver the certificates representing the Common Stock purchased by the Subscriber pursuant to this Agreement directly to the Subscriber’s residential or business address indicated on the signature page hereto.
 

IV.
CONDITIONS TO OBLIGATIONS OF THE SUBSCRIBERS
 
4.1   The Subscriber’s obligation to purchase the Shares at the Closing at which such purchase is to be consummated is subject to the fulfillment on or prior to such Closing of the following conditions, which conditions may be waived at the option of each Subscriber to the extent permitted by law:
 

 
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(a)   Covenants . All covenants, agreements and conditions contained in this Agreement to be performed by the Company on or prior to the date of such Closing shall have been performed or complied with in all material respects.
 
(b)   No Legal Order Pending . There shall not then be in effect any legal or other order enjoining or restraining the transactions contemplated by this Agreement.
 
(c)   No Law Prohibiting or Restricting Such Sale . There shall not be in effect any law, rule or regulation prohibiting or restricting such sale or requiring any consent or approval of any person, which shall not have been obtained, to issue the Securities (except as otherwise provided in this Agreement).
 
V.
REGISTRATION RIGHTS
 
5.1   Definitions . As used in this Agreement, the following terms shall have the following meanings.
 
(a)   The term “Holder” shall mean any person owning or having the right to acquire Registrable Securities or any permitted transferee of a Holder.
 
(b)   The terms “register,” “registered” and “registration” refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Securities Act, and the declaration or order of effectiveness of such registration statement or document.
 
(c)   The term “Registrable Securities” shall mean: (i) the Common Stock; and (ii) any other shares of Common Stock with respect to which the Company has granted or may in the future grant registration rights pursuant to separate agreements; provided, however, that securities shall only be treated as Registrable Securities if and only for so long as they (A) have not been disposed of pursuant to a registration statement declared effective by the SEC; (B) have not been sold in a transaction exempt from the registration and prospectus delivery requirements of the Securities Act so that all transfer restrictions and restrictive legends with respect thereto are removed upon the consummation of such sale; (C) are held by a Holder or a permitted transferee of a Holder pursuant to Section 5.10; and (D) may not be disposed of under Rule 144(k) under the Securities Act without restriction.
 
5.2   Piggy-Back Registration . The Holders will be entitled to “piggy-back” registration rights of the shares of Common Stock on registration statements (other than on Form S-8, S-4 or similar Forms) filed by the Company. The Company shall use its best efforts to cause such Registration Statement to become effective as soon as possible.
 
5.3   Registration Procedures . Whenever required under this Article V to include Registrable Securities in a Company registration statement, the Company shall, as expeditiously as reasonably possible:
 
(a)   Use best efforts to (i) cause such registration statement to become effective, and (ii) cause such registration statement to remain effective until the earliest to occur of (A) such date as the sellers of Registrable Securities (the “Selling Holders”) have completed the distribution described in the registration statement and (B) such time that all of such Registrable Securities are no longer, by reason of Rule 144(k) under the Securities Act, required to be registered for the sale thereof by such Holders. The Company will also use its best efforts to, during the period that such registration statement is required to be maintained hereunder, file such post-effective amendments and supplements thereto as may be required by the Securities Act and the rules and regulations thereunder or otherwise to ensure that the registration statement does not contain any untrue statement of material fact or omit to state a fact required to be stated therein or necessary to make the statements contained therein, in light of the circumstances under which they are made, not misleading; provided, however, that if applicable rules under the Securities Act governing the obligation to file a post-effective amendment permits, in lieu of filing a post-effective amendment that (i) includes any prospectus required by Section 10(a)(3) of the Securities Act or (ii) reflects facts or events representing a material or fundamental change in the information set forth in the registration statement, the Company may incorporate by reference information required to be included in (i) and (ii) above to the extent such information is contained in periodic reports filed pursuant to Section 13 or 15(d) of the Exchange Act in the registration statement.
 

 
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(b)   Prepare and file with the SEC such amendments and supplements to such registration statement, and the prospectus used in connection with such registration statement, as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement.
 
(c)   Make available for inspection upon reasonable notice during the Company’s regular business hours by each Selling Holder, any underwriter participating in any distribution pursuant to such registration statement, and any attorney, accountant or other agent retained by such Selling Holder or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such Selling Holder, underwriter, attorney, accountant or agent in connection with such registration statement.
 
(d)   Furnish to the Selling Holders such numbers of copies of a prospectus, including a preliminary prospectus as amended or supplemented from time to time, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them.
 
(e)   Use best efforts to register and qualify the securities covered by such registration statement under such other federal or state securities laws of such jurisdictions as shall be reasonably requested by the Selling Holders; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act.
 
(f)   In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering. Each Selling Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement.
 

 
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(g)   Notify each Holder of Registrable Securities covered by such registration statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, (i) when the registration statement or any post-effective amendment and supplement thereto has become effective; (ii) of the issuance by the SEC of any stop order or the initiation of proceedings for that purpose (in which event the Company shall make every effort to obtain the withdrawal of any order suspending effectiveness of the registration statement at the earliest possible time or prevent the entry thereof); (iii) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose; and (iv) of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing.
 
(h)   Cause all such Registrable Securities registered hereunder to be listed on each securities exchange or quotation service on which similar securities issued by the Company are then listed or quoted or, if no such similar securities are listed or quoted on a securities exchange or quotation service, apply for qualification and use best efforts to qualify such Registrable Securities for inclusion on the New York Stock Exchange, American Stock Exchange or listing on a quotation system of the National Association of Securities Dealers, Inc.
 
(i)   Provide a transfer agent and registrar for all Registrable Securities registered pursuant hereunder and CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration.
 
(j)   Cooperate with the Selling Holders and the managing underwriters, if any, to facilitate the timely preparation and delivery of certificates representing the Registrable Securities to be sold, which certificates will not bear any restrictive legends; and enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriters, if any, shall request at least two business days prior to any sale of the Registrable Securities to the underwriters.
 
(k)   In connection with an underwritten offering, cause the officers of the Company to provide reasonable assistance in the preparation of, any “road show” presentation to potential investors as the managing underwriter may determine.
 
(l)   Comply with all applicable rules and regulations of the SEC and make generally available to its security holders earning statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than 50 calendar days after the end of any 3-month period (or 105 calendar days after the end of any 12-month period if such period is a fiscal year) (i) commencing at the end of any fiscal quarter in which Registrable Securities are sold to underwriters in a firm commitment or best efforts underwritten offering, and (ii) if not sold to underwriters in such an offering, commencing on the first day of the first fiscal quarter of the Company, after the effective date of a registration statement, which statements shall cover said period.
 

 
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(m)   If the offering is underwritten and at the request of any Selling Holder, use its best efforts to furnish on the date that Registrable Securities are delivered to the underwriters for sale pursuant to such registration: (i) opinions dated such date of counsel representing the Company for the purposes of such registration, addressed to the underwriters and the transfer agent for the Registrable Securities so delivered, respectively, to the effect that such registration statement has become effective under the Securities Act and such Registrable Securities are freely tradable, and covering such other matters as are customarily covered in opinions of issuer’s counsel delivered to underwriters and transfer agents in underwritten public offerings and (ii) a letter dated such date from the independent public accountants who have certified the financial statements of the Company included in the registration statement or the prospectus, covering such matters as are customarily covered in accountants’ letters delivered to underwriters in underwritten public offerings.
 
5.4   Furnish Information . It shall be a condition precedent to the obligation of the Company to take any action pursuant to this Article V with respect to the Registrable Securities of any Selling Holder that such Holder shall furnish to the Company such information regarding the Holder, the Registrable Securities held by the Holder, and the intended method of disposition of such securities as shall be reasonably required by the Company to effect the registration of such Holder’s Registrable Securities.
 
5.5   Registration Expenses . The Company shall bear and pay all Registration Expenses incurred in connection with any registration, filing or qualification of Registrable Securities with respect to registration pursuant to Section 5.2 for each Holder, but excluding underwriting discounts and commissions relating to Registrable Securities and excluding any professional fees or costs of accounting, financial or legal advisors to any of the Holders.
 
5.6   Underwriting Requirements . In connection with any offering involving an underwriting of shares of the Company’s capital stock, the Company shall not be required under Section 5.2 to include any of the Holders’ Registrable Securities in such underwriting unless they accept the terms of the underwriting as agreed upon between the Company and the underwriters selected by it (or by other persons entitled to select the underwriters), and then only in such quantity as the underwriters determine in their sole discretion will not jeopardize the success of the offering by the Company. If the total amount of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the amount of securities sold other than by the Company that the underwriters determine in their sole discretion is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters determine in their sole discretion will not jeopardize the success of the offering (the securities so included to be apportioned pro rata among the selling stockholders according to the total amount of securities entitled to be included therein owned by each selling stockholder or in such other proportions as shall mutually be agreed to by such selling stockholders). For purposes of the preceding parenthetical concerning apportionment, for any selling stockholder who is a holder of Registrable Securities and is a partnership or corporation, the partners, retired partners and stockholders of such holder, or the estates and family members of any such partners and retired partners and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single “selling stockholder,” and any pro-rata reduction with respect to such “selling stockholder” shall be based upon the aggregate amount of shares carrying registration rights owned by all entities and individuals included in such “selling stockholder,” as defined in this sentence.
 

 
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5.7   Delay of Registration . No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Article.
 
5.8   Indemnification . In the event that any Registrable Securities are included in a registration statement under this Article V:
 
(a)   To the extent permitted by law, the Company will indemnify and hold harmless each Holder, any underwriter (as defined in the Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, or the Exchange Act, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “Violation”): (i) any untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation by the Company of the Securities Act, the Exchange Act, or any rule or regulation promulgated under the Securities Act, or the Exchange Act, and the Company will pay to each such Holder, underwriter or controlling person, as incurred, any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity agreement contained in this Section 5.8(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability, or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by any such Holder, underwriter or controlling person.
 
(b)   To the extent permitted by law, each Selling Holder will indemnify and hold harmless the Company, each of its directors, each of its officers, each person, if any, who controls the Company within the meaning of the Securities Act, any underwriter, any other Holder selling securities in such registration statement and any controlling person of any such underwriter or other Holder, against any losses, claims, damages, or liabilities (joint or several) to which any of the foregoing persons may become subject, under the Securities Act, or the Exchange Act, insofar as such losses, claims, damages, or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration; and each such Holder will pay, as incurred, any legal or other expenses reasonably incurred by any person intended to be indemnified pursuant to this Section 5.8(b), in connection with investigating or defending any such loss, claim, damage, liability, or action; provided , however , that the indemnity agreement contained in this Section 5.8(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; provided , further, that, in no event shall any indemnity under this Section 5.8(b) exceed the greater of the cash value of the (i) gross proceeds from the Offering received by such Holder or (ii) such Holder’s investment pursuant to this Agreement as set forth on the signature page attached hereto.
 

 
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(c)   Promptly after receipt by an indemnified party under this Section 5.8 of notice of the commencement of any action (including any governmental action), such indemnified party shall, if a claim in respect thereof is to be made against any indemnifying party under this Section 5.8, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly notified, to assume the defense thereof with counsel selected by the indemnifying party and approved by the indemnified party (whose approval shall not be unreasonably withheld); provided, however, that an indemnified party (together with all other indemnified parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 5.8, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 5.8.
 
(d)   If the indemnification provided for in this Section 5.8 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage, or expense referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage, or expense as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.
 
(e)   Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in an underwriting agreement entered into in connection with an underwritten public offering are in conflict with the foregoing provisions, the provisions in such underwriting agreement shall control.
 

 
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(f)   The obligations of the Company and Holders under this Section 5.8 shall survive the completion of the Offering.
 
5.9   Reports Under Securities Exchange Act of 1934 . With a view to making available to the Holders the benefits of Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company agrees to:
 
(a)   make and keep public information available, as those terms are understood and defined in Rule 144, at all times after 90 days after the effective date of the registration statement;
 
(b)   file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and
 
(c)   furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (ii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC which permits the selling of any such securities without registration or pursuant to such form.
 
5.10   Permitted Transferees . The rights to cause the Company to register Registrable Securities granted to the Holders by the Company under this Article V may be assigned in full by a Holder in connection with a transfer by such Holder of its Registrable Securities if: (a) such Holder gives prior written notice to the Company; (b) such transferee agrees to comply with the terms and provisions of this Agreement; (c) such transfer is otherwise in compliance with this Agreement; and (d) such transfer is otherwise effected in accordance with applicable securities laws. Except as specifically permitted by this Section 5.10, the rights of a Holder with respect to Registrable Securities as set out herein shall not be transferable to any other Person, and any attempted transfer shall cause all rights of such Holder therein to be forfeited.
 
VI.
MISCELLANEOUS
 
6.1   Any notice or other communication given hereunder shall be deemed sufficient if in writing and sent by registered or certified mail, return receipt requested, or delivered by hand against written receipt therefor, addressed as follows:
 
if to the Company, to it at:
Zingerang, Inc.
50 Castilian Drive Ste. Z
Santa Barbara, California 93117
Attn: Derek McLeish , Chief Executive Officer

15
With a copy to:

Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas
New York, NY 10018
Attn: Gregory Sichenzia, Esq.

if to the Subscriber, to the Subscriber’s address indicated on the signature page of this Agreement.
 
Notices shall be deemed to have been given or delivered on the date of mailing, except notices of change of address, which shall be deemed to have been given or delivered when received.
 
6.2   Except as otherwise provided herein, this Agreement shall not be changed, modified or amended except by a writing signed by the parties to be charged, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged.
 
6.3   Subject to the provisions of Section 5.10, this Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.
 
6.4   Upon the execution and delivery of this Agreement by the Subscriber, this Agreement shall become a binding obligation of the Subscriber with respect to the purchase of Common Stock as herein provided, subject, however, to the right hereby reserved by the Company to enter into the same agreements with other subscribers and to add and/or delete other persons as subscribers.
 
6.5   NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT ALL THE TERMS AND PROVISIONS HEREOF SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEVADA WITHOUT REGARD TO SUCH STATE’S PRINCIPLES OF CONFLICTS OF LAW. IN THE EVENT THAT A JUDICIAL PROCEEDING IS NECESSARY, THE SOLE FORUM FOR RESOLVING DISPUTES ARISING OUT OF OR RELATING TO THIS AGREEMENT IS THE SUPREME COURT OF THE STATE OF NEVADA IN AND FOR CLARK COUNTY OF NEVADA OR THE FEDERAL COURTS FOR SUCH STATE AND COUNTY, AND ALL RELATED APPELLATE COURTS, THE PARTIES HEREBY IRREVOCABLY CONSENT TO THE JURISDICTION OF SUCH COURTS AND AGREE TO SAID VENUE.
 
6.6   In order to discourage frivolous claims the parties agree that unless a claimant in any proceeding arising out of this Agreement succeeds in establishing his claim and recovering a judgment against another party (regardless of whether such claimant succeeds against one of the other parties to the action), then the other party shall be entitled to recover from such claimant all of its/their reasonable legal costs and expenses relating to such proceeding and/or incurred in preparation therefor.
 
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6.7   The holding of any provision of this Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Agreement, which shall remain in full force and effect. If any provision of this Agreement shall be declared by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced in whole or in part, such provision shall be interpreted so as to remain enforceable to the maximum extent permissible consistent with applicable law and the remaining conditions and provisions or portions thereof shall nevertheless remain in full force and effect and enforceable to the extent they are valid, legal and enforceable, and no provisions shall be deemed dependent upon any other covenant or provision unless so expressed herein.
 
6.8   It is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate, or be construed, as a waiver of any subsequent breach by that same party.
 
6.9   The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Agreement.
 
6.10   This Agreement may be executed in two or more counterparts each of which shall be deemed an original, but all of which shall together constitute one and the same instrument.
 
6.11   Nothing in this Agreement shall create or be deemed to create any rights in any person or entity not a party to this Agreement, except (a) for the holders of Registrable Securities.
 
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17
 
VII.      CONFIDENTIAL INVESTOR QUESTIONNAIRE
7.1   The Subscriber represents and warrants that he, she or it comes within one category marked below, and that for any category marked, he, she or it has truthfully set forth, where applicable, the factual basis or reason the Subscriber comes within that category. ALL INFORMATION IN RESPONSE TO THIS SECTION WILL BE KEPT STRICTLY CONFIDENTIAL. The undersigned agrees to furnish any additional information which the Company deems necessary in order to verify the answers set forth below.
 
CategoryA__   The undersigned is an individual (not a partnership, corporation, etc.) whose individual net worth, or joint net worth with his or her spouse, presently exceeds $1,000,000.

Explanation. In calculating net worth you may include equity in personal property and real estate, including your principal residence, cash, short-term investments, stock and securities. Equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property.

Category B__   The undersigned is an individual (not a partnership, corporation, etc.) who had an income in excess of $200,000 in each of the two most recent years, or joint income with his or her spouse in excess of $300,000 in each of those years (in each case including foreign income, tax exempt income and full amount of capital gains and losses but excluding any income of other family members and any unrealized capital appreciation) and has a reasonable expectation of reaching the same income level in the current year.

Category C__   The undersigned is a director or executive officer of the Company which is issuing and selling the Securities.

Category D__   The undersigned is a bank; a savings and loan association; insurance company; registered investment company; registered business development company; licensed small business investment company (“SBIC”); or employee benefit plan within the meaning of Title 1 of ERISA and (a) the investment decision is made by a plan fiduciary which is either a bank, savings and loan association, insurance company or registered investment advisor, or (b) the plan has total assets in excess of $5,000,000 or (c) is a self directed plan with investment decisions made solely by persons that are accredited investors. (describe entity)
   ______________________________________________________________________________________________________________
   ______________________________________________________________________________________________________________
 
Category E__   The undersigned is a private business development company as defined in section 202(a) (22) of the Investment Advisors Act of 1940. (describe entity)
______________________________________________________________________________________________________________
______________________________________________________________________________________________________________
 
Category F__    The undersigned is either a corporation, partnership, business trust, or non-profit organization within the meaning of Section 501(c) (3) of the Internal Revenue Code, in
each case not formed for the specific purpose of acquiring the Common Stock and with total assets in excess of $5,000,000. (describe entity)
______________________________________________________________________________________________________________
______________________________________________________________________________________________________________
 
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Category G__   The undersigned is a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, where the purchase is directed by a
“sophisticated investor” as defined in Regulation 506(b)(2)(ii) under the Act.
 
Category H__   The undersigned is an entity (other than a trust) in which all of the equity owners are “accredited investors” within one or more of the above categories. If relying upon
this Category alone, each equity owner must complete a separate copy of this Agreement. (describe entity)
 
Category I__  The undersigned is not within any of the categories above and is therefore not an accredited investor.
 
  The undersigned agrees that the undersigned will notify the Company at any time on or prior to the Closing Date in the event that the representations and warranties in
  this Agreement shall cease to be true, accurate and complete.
 
7.2   SUITABILITY (please answer each question)
 
(a)   For an individual Subscriber, please describe your current employment, including the company by which you are employed and its principal business:
 
(b)   For an individual Subscriber, please describe any college or graduate degrees held by you:
 
(c)   For all Subscribers, please list types of prior investments:
 
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(d)   For all Subscribers, please state whether you have participated in other private placements before:
 
YES_______       NO_______
 
(e)   If your answer to question (d) above was “YES”, please indicate frequency of such prior participation in private placements of:
 
 
Public
Companies
Private
Companies
 
Frequently
     
Occasionally
     
Never
     

(f)   For individual Subscribers, do you expect your current level of income to significantly decrease in the foreseeable future:
 
YES_______       NO_______
 
(g)   For trust, corporate, partnership and other institutional Subscribers, do you expect your total assets to significantly decrease in the foreseeable future:
 
YES_______       NO_______
 
(h)   For all Subscribers, do you have any other investments or c ontingent liabilities which you reasonably anticipate could cause you to need sudden cash requirements in excess of cash readily available to you:
 
YES_______       NO_______
 
(i)   For all Subscribers, are you familiar with the risk aspects and the non-liquidity of investments such as the securities for which you seek to subscribe?
 
YES_______       NO_______
 
(j)   For all Subscribers, do you understand that there is no guarantee of financial return on this investment and that you run the risk of losing your entire investment?
 
YES_______       NO_______
 
7.3   MANNER IN WHICH TITLE IS TO BE HELD . (circle one)
 
(a)   Individual Ownership
(b)   Community Property
(c)   Joint Tenant with Right of  Survivorship (both parties must sign)
(d)   Partnership*
(e)   Tenants in Common
(f)   Company*
(g)   Trust*
(h)   Other*
*If Securities are being subscribed for by an entity, the attached Certificate of Signatory must also be completed.
 
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7.4   NASD AFFILIATION .
 
Are you affiliated or associated with an NASD member firm (please check one):
 
Yes _________     No __________
 
If Yes, please describe:
__________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________

*If Subscriber is a Registered Representative with an NASD member firm, have the following acknowledgment signed by the appropriate party:
 
The undersigned NASD member firm acknowledges receipt of the notice required by Article 3, Sections 28(a) and (b) of the Rules of Fair Practice.
 
_________________________________
Name of NASD Member Firm

By: ______________________________
Authorized Officer

Date: ____________________________

7.5   The undersigned is informed of the significance to the Company of the foregoing representations and answers contained in the Confidential Investor Questionnaire contained in this Article VII and such answers have been provided under the assumption that the Company will rely on them.
 
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NUMBER OF SHARES 15,000 X $0.10 = $1500.00 (the “Purchase Price”)  


 
Signature
  Signature (if purchasing jointly)
   
Name Typed or Printed  
Name Typed or Printed
   
  Title (if Subscriber is an Entity)
Title (if Subscriber is an Entity)
   
Entity Name (if applicable)
Entity Name (if applicable
   
Address  
Address
 
City, State and Zip Code
City, State and Zip Code
   
  Telephone-Business
Telephone-Business
   
Telephone-Residence
Telephone-Residence
   
Facsimile-Business        
Facsimile-Business
   
Facsimile-Residence
Facsimile-Residence
   
Email  
Email
   
  Tax ID # or Social Security # 
  Tax ID # or Social Security #
   
     
Name in which securities should be issued:            


Dated:_____________________ , 2006

This Subscription Agreement is agreed to and accepted as of ________________   , 2006.
 
     
 
ZINGERANG, INC.
 
  		 
  		 
 
  By:   /s/ 
 
Name: Derek McLeish
Title: President and CEO
   


 
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CERTIFICATE OF SIGNATORY

(To be completed if Shares are
being subscribed for by an entity)


I, ____________________________, am the ____________________________ of __________________________________________ (the “Entity”).

I certify that I am empowered and duly authorized by the Entity to execute and carry out the terms of the Subscription Agreement and to purchase and hold the Common Stock, and certify further that the Subscription Agreement has been duly and validly executed on behalf of the Entity and constitutes a legal and binding obligation of the Entity.

IN WITNESS WHEREOF, I have set my hand this ________ day of _________________, 2006


_______________________________________
(Signature)




SUBSCRIPTION AGREEMENT
 
SUBSCRIPTION AGREEMENT (this “Agreement”) made as of the last date set forth on the signature page hereof between Zingerang, Inc. (the “Company”), and the undersigned (the “Subscriber”).
 
W I T N E S S E T H:
 
WHEREAS, the Company is conducting a private offering (the “Offering”) consisting of up to 1 5,000,000 shares of common stock, par value $.001 per share (“Shares”); and
 
WHEREAS, the Subscriber desires to purchase that number of Shares set forth on the signature page hereof on the terms and conditions hereinafter set forth.
 
NOW, THEREFORE, in consideration of the premises and the mutual representations and covenants hereinafter set forth, the parties hereto do hereby agree as follows:
 
I.
SUBSCRIPTION FOR SHARES AND REPRESENTATIONS BY SUBSCRIBER
 
1.1   Subject to the terms and conditions hereinafter set forth and in the Confidential Offering Memorandum dated March 1, 2007 (such memorandum, together with all amendments thereof and supplements and exhibits thereto, the “Memorandum”), the Subscriber hereby irrevocably subscribes for and agrees to purchase from the Company such number of Shares, and the Company agrees to sell to the Subscriber as is set forth on the signature page hereof, at a per share price equal to $0.10 per Share. The purchase price is payable by personal or business check or money order made payable to “Zingerang, Inc.” contemporaneously with the execution and delivery of this Agreement by the Subscriber. Subscribers may also pay the subscription amount by, wire transfer of immediately available funds to:
 
Name:               Zingerang, Inc
 
Bank:     Bank of America
 5892 Calle Real
  Goleta, CA 93117    

Account:          04165-43337  

ABA:     026009593    

1.2   The Subscriber recognizes that the purchase of the Shares involves a high degree of risk including, but not limited to, the following: (a) the Company remains a development stage business with limited operating history and requires substantial funds in addition to the proceeds of the Offering; (b) an investment in the Company is highly speculative, and only investors who can afford the loss of their entire investment should consider investing in the Company and the Shares; (c) the Subscriber may not be able to liquidate its investment; (d) transferability of the Shares (sometimes hereinafter collectively referred to as the “Securities”) is extremely limited; (e) in the event of a disposition, the Subscriber could sustain the loss of its entire investment; (f) the Company has not paid any dividends since its inception and does not anticipate paying any dividends; and (g) the Company may issue additional securities in the future which have rights and preferences that are senior to those of the Common Stock. Without limiting the generality of the representations set forth in Section 1.5 below, the Subscriber represents that the Subscriber has carefully reviewed the section of the Memorandum captioned “Risk Factors.”
 

 
 
1.3   The Subscriber represents that the Subscriber is an “accredited investor” as such term is defined in Rule 501 of Regulation D (“Regulation D”) promulgated under the Securities Act of 1933, as amended (the “Securities Act”), as indicated by the Subscriber’s responses to the questions contained in Article VII hereof, and that the Subscriber is able to bear the economic risk of an investment in the Shares.
 
1.4   The Subscriber hereby acknowledges and represents that (a) the Subscriber has knowledge and experience in business and financial matters, prior investment experience, including investment in securities that are non-listed, unregistered and/or not traded on a national securities exchange nor on the National Association of Securities Dealers, Inc. (the “NASD”) automated quotation system (“NASDAQ”), or the Subscriber has employed the services of a “purchaser representative” (as defined in Rule 501 of Regulation D), attorney and/or accountant to read all of the documents furnished or made available by the Company both to the Subscriber and to all other prospective investors in the Shares to evaluate the merits and risks of such an investment on the Subscriber’s behalf; (b) the Subscriber recognizes the highly speculative nature of this investment; and (c) the Subscriber is able to bear the economic risk that the Subscriber hereby assumes.
 
1.5   The Subscriber hereby acknowledges receipt and careful review of this Agreement, the Memorandum (which includes the Risk Factors), including all exhibits thereto, and any documents which may have been made available upon request as reflected therein (collectively referred to as the “Offering Materials”) and hereby represents that the Subscriber has been furnished by the Company during the course of the Offering with all information regarding the Company, the terms and conditions of the Offering and any additional information that the Subscriber has requested or desired to know, and has been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other representatives of the Company concerning the Company and the terms and conditions of the Offering.
 
1.6   a)   In making the decision to invest in the Shares the Subscriber has relied solely upon the information provided by the Company in the Offering Materials. To the extent necessary, the Subscriber has retained, at its own expense, and relied upon appropriate professional advice regarding the investment, tax and legal merits and consequences of this Agreement and the purchase of the Shares hereunder. The Subscriber disclaims reliance on any statements made or information provided by any person or entity in the course of Subscriber’s consideration of an investment in the Shares other than the Offering Materials.
 
(b)   The Subscriber represents that (i) the Subscriber was contacted regarding the sale of the Shares by the Company (or an authorized agent or representative thereof) with whom the Subscriber had a prior substantial pre-existing relationship and (ii) no Shares were offered or sold to it by means of any form of general solicitation or general advertising, and in connection therewith, the Subscriber did not (A) receive or review any advertisement, article, notice or other communication published in a newspaper or magazine or similar media or broadcast over television or radio, whether closed circuit, or generally available; or (B) attend any seminar meeting or industry investor conference whose attendees were invited by any general solicitation or general advertising.
 

 

 
1.7   The Subscriber hereby represents that the Subscriber, either by reason of the Subscriber’s business or financial experience or the business or financial experience of the Subscriber’s professional advisors (who are unaffiliated with and not compensated by the Company or any affiliate or selling agent of the Company, directly or indirectly), has the capacity to protect the Subscriber’s own interests in connection with the transaction contemplated hereby.
 
1.8   The Subscriber hereby acknowledges that the Offering has not been reviewed by the United States Securities and Exchange Commission (the “SEC”) nor any state regulatory authority since the Offering is intended to be exempt from the registration requirements of Section 5 of the Securities Act pursuant to Regulation D promulgated thereunder. The Subscriber understands that the Securities have not been registered under the Securities Act or under any state securities or “blue sky” laws and agrees not to sell, pledge, assign or otherwise transfer or dispose of the Securities unless they are registered under the Securities Act and under any applicable state securities or “blue sky” laws or unless an exemption from such registration is available.
 
1.9   The Subscriber understands that the Securities comprising the Shares have not been registered under the Securities Act by reason of a claimed exemption under the provisions of the Securities Act that depends, in part, upon the Subscriber’s investment intention. In this connection, the Subscriber hereby represents that the Subscriber is purchasing the Securities for the Subscriber’s own account for investment and not with a view toward the resale or distribution to others. The Subscriber, if an entity, further represents that it was not formed for the purpose of purchasing the Securities.
 
1.10   The Subscriber understands that there is no public market for the Common Stock and that no market may develop for any of such Securities. The Subscriber understands that even if a public market develops for such Securities, Rule 144 (“Rule 144”) promulgated under the Securities Act requires for non-affiliates, among other conditions, a one-year holding period prior to the resale (in limited amounts) of securities acquired in a non-public offering without having to satisfy the registration requirements under the Securities Act. The Subscriber understands and hereby acknowledges that the Company is under no obligation to register any of the Securities under the Securities Act or any state securities or “blue sky” laws other than as set forth in Article V.
 
1.11   The Subscriber consents to the placement of a legend on any certificate or other document evidencing the Securities that such Securities have not been registered under the Securities Act or any state securities or “blue sky” laws and setting forth or referring to the restrictions on transferability and sale thereof contained in this Agreement. The Subscriber is aware that the Company will make a notation in its appropriate records with respect to the restrictions on the transferability of such Securities. The legend to be placed on each certificate shall be in form substantially similar to the following:
 
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES OR “BLUE SKY LAWS,” AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”

 
 
1.12   The Subscriber understands that the Company will review this Agreement and is hereby given authority by the Subscriber to call Subscriber’s bank or place of employment or otherwise review the financial standing of the Subscriber; and it is further agreed that the Company, at its sole discretion, reserves the unrestricted right, without further documentation or agreement on the part of the Subscriber, to reject or limit any subscription, to accept subscriptions for fractional Shares and to close the Offering to the Subscriber at any time and that the Company will issue stop transfer instructions to its transfer agent with respect to such Securities.
 
1.13   The Subscriber hereby represents that the address of the Subscriber furnished by Subscriber on the signature page hereof is the Subscriber’s principal residence if Subscriber is an individual or its principal business address if it is a corporation or other entity.
 
1.14   The Subscriber represents that the Subscriber has full power and authority (corporate, statutory and otherwise) to execute and deliver this Agreement and to purchase the Shares. This Agreement constitutes the legal, valid and binding obligation of the Subscriber, enforceable against the Subscriber in accordance with its terms.
 
1.15   If the Subscriber is a corporation, partnership, limited liability company, trust, employee benefit plan, individual retirement account, Keogh Plan, or other tax-exempt entity, it is authorized and qualified to invest in the Company and the person signing this Agreement on behalf of such entity has been duly authorized by such entity to do so.
 
1.16   The Subscriber acknowledges that if he or she is a Registered Representative of an NASD member firm, he or she must give such firm the notice required by the NASD’s Rules of Fair Practice, receipt of which must be acknowledged by such firm in Section 7.4 below.
 
1.17   The Subscriber acknowledges that at such time, if ever, as the Securities are registered (as such term is defined in Article V hereof), sales of the Securities will be subject to state securities laws.
 
1.18   b)   The Subscriber agrees not to issue any public statement with respect to the Subscriber’s investment or proposed investment in the Company or the terms of any agreement or covenant between them and the Company without the Company’s prior written consent, except such disclosures as may be required under applicable law or under any applicable order, rule or regulation.
 
(b)   The Company agrees not to disclose the names, addresses or any other information about the Subscribers, except as required by law; provided, that the Company may use the name of the Subscriber for any offering or in any registration statement filed pursuant to Article V in which the Subscriber’s shares are included.
 

 

1.19   The Subscriber agrees to hold the Company and its directors, officers, employees, affiliates, controlling persons and agents and their respective heirs, representatives, successors and assigns harmless and to indemnify them against all liabilities, costs and expenses incurred by them as a result of (a) any sale or distribution of the Securities by the Subscriber in violation of the Securities Act or any applicable state securities or “blue sky” laws; or (b) any false representation or warranty or any breach or failure by the Subscriber to comply with any covenant made by the Subscriber in this Agreement (including the Confidential Investor Questionnaire contained in Article VII herein) or any other document furnished by the Subscriber to any of the foregoing in connection with this transaction.
 

II.
REPRESENTATIONS BY AND COVENANTS OF THE COMPANY
 
The Company hereby represents and warrants to the Subscriber that:
 
2.1   Organization, Good Standing and Qualification . The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has full corporate power and authority to conduct its business.
 
2.2   Capitalization and Voting Rights . The Company has authorized 500,000,000 shares of Common Stock, par value $.001 per share, of which 128,700,000 shares are outstanding as of the date hereof. Except as set forth in the Offering Materials, there are no outstanding options, warrants, agreements, convertible securities, preemptive rights or other rights to subscribe for or to purchase any shares of capital stock of the Company. Except as set forth in the Offering Materials and as otherwise required by law, there are no restrictions upon the voting or transfer of any of the shares of capital stock of the Company pursuant to the Company’s Articles of Incorporation (the “Articles of Incorporation”), By-Laws or other governing documents or any agreement or other instruments to which the Company is a party or by which the Company is bound.
 
2.3   Authorization; Enforceability . The Company has all corporate right, power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. All corporate action on the part of the Company, its directors and stockholders necessary for the (i) authorization execution, delivery and performance of this Agreement by the Company; and (ii) authorization, sale, issuance and delivery of the Securities contemplated hereby and the performance of the Company’s obligations hereunder has been taken. This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies, and to limitations of public policy. The Common Stock, when issued and fully paid for in accordance with the terms of this Agreement, will be validly issued, fully paid and nonassessable. The issuance and sale of the Common Stock contemplated hereby will not give rise to any preemptive rights or rights of first refusal on behalf of any person which have not been waived in connection with this offering.
 
2.4   No Conflict; Governmental Consents .
 

 

(a)   The execution and delivery by the Company of this Agreement and the consummation of the transactions contemplated hereby will not result in the violation of any material law, statute, rule, regulation, order, writ, injunction, judgment or decree of any court or governmental authority to or by which the Company is bound, or of any provision of the Articles of Incorporation or By-Laws of the Company, and will not conflict with, or result in a material breach or violation of, any of the terms or provisions of, or constitute (with due notice or lapse of time or both) a default under, any lease, loan agreement, mortgage, security agreement, trust indenture or other agreement or instrument to which the Company is a party or by which it is bound or to which any of its properties or assets is subject, nor result in the creation or imposition of any lien upon any of the properties or assets of the Company.
 
(b)   No consent, approval, authorization or other order of any governmental authority is required to be obtained by the Company in connection with the authorization, execution and delivery of this Agreement or with the authorization, issue and sale of the Shares, except such filings as may be required to be made with the SEC, NASD, NASDAQ and with any state or foreign blue sky or securities regulatory authority.
 
2.5   Licenses . Except as otherwise set forth in the Memorandum, the Company has sufficient licenses, permits and other governmental authorizations currently required for the conduct of its business or ownership of properties and is in all material respects in compliance therewith.
 
2.6   Litigation . The Company knows of no pending or threatened legal or governmental proceedings against the Company which could materially adversely affect the business, property, financial condition or operations of the Company or which materially and adversely questions the validity of this Agreement or any agreements related to the transactions contemplated hereby or the right of the Company to enter into any of such agreements, or to consummate the transactions contemplated hereby or thereby. The Company is not a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality which could materially adversely affect the business, property, financial condition or operations of the Company. There is no action, suit, proceeding or investigation by the Company currently pending in any court or before any arbitrator or that the Company intends to initiate.
 
2.7   Disclosure . The information set forth in the Offering Materials as of the date hereof contains no untrue statement of a material fact nor omits to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading.
 
2.8   Investment Company . The Company is not an “investment company” within the meaning of such term under the Investment Company Act of 1940, as amended, and the rules and regulations of the SEC thereunder.
 
2.9   Intellectual Property .
 
(i)   To the best of its knowledge, the Company owns or possesses sufficient legal rights to all patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information and other proprietary rights and processes necessary for its business as now conducted and as presently proposed to be conducted, without any known infringement of the rights of others. Except as disclosed in the Memorandum, there are no material outstanding options, licenses or agreements of any kind relating to the foregoing proprietary rights, nor is the Company bound by or a party to any material options, licenses or agreements of any kind with respect to the patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information and other proprietary rights and processes of any other person or entity other than such licenses or agreements arising from the purchase of “off the shelf” or standard products. The Company has not received any written communications alleging that the Company has violated or, by conducting its business as presently proposed to be conducted, would violate any of the patents, trademarks, service marks, trade names, copyrights or trade secrets or other proprietary rights of any other person or entity.
 

 

 
(ii)   Except as disclosed in the Memorandum, the Company is not aware that any of its employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with their duties to the Company or that would conflict with the Company’s business as presently conducted.
 
(iii)   Neither the execution nor delivery of this Agreement, nor the carrying on of the Company’s business by the employees of the Company, nor the conduct of the Company’s business as presently conducted, will, to the Company’s knowledge, conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract, covenant or instrument under which any employee is now obligated.
 
(iv)   To the Company’s knowledge, no employee of the Company, nor any consultant with whom the Company has contracted, is in violation of any term of any employment contract, proprietary information agreement or any other agreement relating to the right of any such individual to be employed by, or to contract with, the Company because of the nature of the business conducted by the Company; and to the Company’s knowledge the continued employment by the Company of its present employees, and the performance of the Company’s contracts with its independent contractors, will not result in any such violation. The Company has not received any written notice alleging that any such violation has occurred. Except as described in the Memorandum, no employee of the Company has been granted the right to continued employment by the Company or to any compensation following termination of employment with the Company except for any of the same which would not have a material adverse effect on the business of the Company. The Company is not aware that any officer, key employee or group of employees intends to terminate his, her or their employment with the Company, nor does the Company have a present intention to terminate the employment of any officer, key employee or group of employees.
 
2.10   Title to Properties and Assets; Liens, Etc . The Company has good and marketable title to its properties and assets, including the properties and assets reflected in the most recent balance sheet included in the Financial Statements, and good title to its leasehold estates, in each case subject to no mortgage, pledge, lien, lease, encumbrance or charge, other than (a) those resulting from taxes which have not yet become delinquent; (b) liens and encumbrances which do not materially detract from the value of the property subject thereto or materially impair the operations of the Company; and (c) those that have otherwise arisen in the ordinary course of business. The Company is in compliance with all material terms of each lease to which it is a party or is otherwise bound.
 

 

2.11   Obligations to Related Parties . Except as described in the Memorandum, there are no obligations of the Company to officers, directors, stockholders, or employees of the Company other than (a) for payment of salary or other compensation for services rendered, (b) reimbursement for reasonable expenses incurred on behalf of the Company and (c) for other standard employee benefits made generally available to all employees (including stock option agreements outstanding under any stock option plan approved by the Board of Directors of the Company). Except as may be disclosed in the Memorandum, the Company is not a guarantor or indemnitor of any indebtedness of any other person, firm or corporation.
 

III.
TERMS OF SUBSCRIPTION
 
3.1   There is no requirement that any minimum number of Shares be sold and therefore no escrow will be established for subscription funds. Subscription funds may be deposited by the Company directly into its operating account for use as described in this Confidential Offering Memorandum.
 
3.2   Certificates representing the Common Stock purchased by the Subscriber pursuant to this Agreement will be prepared for delivery to the Subscriber within 15 business days following the Closing at which such purchase takes place. The Subscriber hereby authorizes and directs the Company to deliver the certificates representing the Common Stock purchased by the Subscriber pursuant to this Agreement directly to the Subscriber’s residential or business address indicated on the signature page hereto.
 

IV.
CONDITIONS TO OBLIGATIONS OF THE SUBSCRIBERS
 
4.1   The Subscriber’s obligation to purchase the Shares at the Closing at which such purchase is to be consummated is subject to the fulfillment on or prior to such Closing of the following conditions, which conditions may be waived at the option of each Subscriber to the extent permitted by law:
 
(a)   Covenants . All covenants, agreements and conditions contained in this Agreement to be performed by the Company on or prior to the date of such Closing shall have been performed or complied with in all material respects.
 
(b)   No Legal Order Pending . There shall not then be in effect any legal or other order enjoining or restraining the transactions contemplated by this Agreement.
 
(c)   No Law Prohibiting or Restricting Such Sale . There shall not be in effect any law, rule or regulation prohibiting or restricting such sale or requiring any consent or approval of any person, which shall not have been obtained, to issue the Securities (except as otherwise provided in this Agreement).
 
V.
REGISTRATION RIGHTS
 
5.1   Definitions . As used in this Agreement, the following terms shall have the following meanings.
 

 

(a)   The term “Holder” shall mean any person owning or having the right to acquire Registrable Securities or any permitted transferee of a Holder.
 
(b)   The terms “register,” “registered” and “registration” refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Securities Act, and the declaration or order of effectiveness of such registration statement or document.
 
(c)   The term “Registrable Securities” shall mean: (i) the Common Stock; and (ii) any other shares of Common Stock with respect to which the Company has granted or may in the future grant registration rights pursuant to separate agreements; provided, however, that securities shall only be treated as Registrable Securities if and only for so long as they (A) have not been disposed of pursuant to a registration statement declared effective by the SEC; (B) have not been sold in a transaction exempt from the registration and prospectus delivery requirements of the Securities Act so that all transfer restrictions and restrictive legends with respect thereto are removed upon the consummation of such sale; (C) are held by a Holder or a permitted transferee of a Holder pursuant to Section 5.10; and (D) may not be disposed of under Rule 144(k) under the Securities Act without restriction.
 
5.2   Piggy-Back Registration . The Holders will be entitled to “piggy-back” registration rights of the shares of Common Stock on registration statements (other than on Form S-8, S-4 or similar Forms) filed by the Company. The Company shall use its best efforts to cause such Registration Statement to become effective as soon as possible.
 
5.3   Registration Procedures . Whenever required under this Article V to include Registrable Securities in a Company registration statement, the Company shall, as expeditiously as reasonably possible:
 
(a)   Use best efforts to (i) cause such registration statement to become effective, and (ii) cause such registration statement to remain effective until the earliest to occur of (A) such date as the sellers of Registrable Securities (the “Selling Holders”) have completed the distribution described in the registration statement and (B) such time that all of such Registrable Securities are no longer, by reason of Rule 144(k) under the Securities Act, required to be registered for the sale thereof by such Holders. The Company will also use its best efforts to, during the period that such registration statement is required to be maintained hereunder, file such post-effective amendments and supplements thereto as may be required by the Securities Act and the rules and regulations thereunder or otherwise to ensure that the registration statement does not contain any untrue statement of material fact or omit to state a fact required to be stated therein or necessary to make the statements contained therein, in light of the circumstances under which they are made, not misleading; provided, however, that if applicable rules under the Securities Act governing the obligation to file a post-effective amendment permits, in lieu of filing a post-effective amendment that (i) includes any prospectus required by Section 10(a)(3) of the Securities Act or (ii) reflects facts or events representing a material or fundamental change in the information set forth in the registration statement, the Company may incorporate by reference information required to be included in (i) and (ii) above to the extent such information is contained in periodic reports filed pursuant to Section 13 or 15(d) of the Exchange Act in the registration statement.
 

 

(b)   Prepare and file with the SEC such amendments and supplements to such registration statement, and the prospectus used in connection with such registration statement, as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement.
 
(c)   Make available for inspection upon reasonable notice during the Company’s regular business hours by each Selling Holder, any underwriter participating in any distribution pursuant to such registration statement, and any attorney, accountant or other agent retained by such Selling Holder or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such Selling Holder, underwriter, attorney, accountant or agent in connection with such registration statement.
 
(d)   Furnish to the Selling Holders such numbers of copies of a prospectus, including a preliminary prospectus as amended or supplemented from time to time, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them.
 
(e)   Use best efforts to register and qualify the securities covered by such registration statement under such other federal or state securities laws of such jurisdictions as shall be reasonably requested by the Selling Holders; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act.
 
(f)   In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering. Each Selling Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement.
 
(g)   Notify each Holder of Registrable Securities covered by such registration statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, (i) when the registration statement or any post-effective amendment and supplement thereto has become effective; (ii) of the issuance by the SEC of any stop order or the initiation of proceedings for that purpose (in which event the Company shall make every effort to obtain the withdrawal of any order suspending effectiveness of the registration statement at the earliest possible time or prevent the entry thereof); (iii) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose; and (iv) of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing.
 
(h)   Cause all such Registrable Securities registered hereunder to be listed on each securities exchange or quotation service on which similar securities issued by the Company are then listed or quoted or, if no such similar securities are listed or quoted on a securities exchange or quotation service, apply for qualification and use best efforts to qualify such Registrable Securities for inclusion on the New York Stock Exchange, American Stock Exchange or listing on a quotation system of the National Association of Securities Dealers, Inc.

 

 
 
(i)   Provide a transfer agent and registrar for all Registrable Securities registered pursuant hereunder and CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration.
 
(j)   Cooperate with the Selling Holders and the managing underwriters, if any, to facilitate the timely preparation and delivery of certificates representing the Registrable Securities to be sold, which certificates will not bear any restrictive legends; and enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriters, if any, shall request at least two business days prior to any sale of the Registrable Securities to the underwriters.
 
(k)   In connection with an underwritten offering, cause the officers of the Company to provide reasonable assistance in the preparation of, any “road show” presentation to potential investors as the managing underwriter may determine.
 
(l)   Comply with all applicable rules and regulations of the SEC and make generally available to its security holders earning statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than 50 calendar days after the end of any 3-month period (or 105 calendar days after the end of any 12-month period if such period is a fiscal year) (i) commencing at the end of any fiscal quarter in which Registrable Securities are sold to underwriters in a firm commitment or best efforts underwritten offering, and (ii) if not sold to underwriters in such an offering, commencing on the first day of the first fiscal quarter of the Company, after the effective date of a registration statement, which statements shall cover said period.
 
(m)   If the offering is underwritten and at the request of any Selling Holder, use its best efforts to furnish on the date that Registrable Securities are delivered to the underwriters for sale pursuant to such registration: (i) opinions dated such date of counsel representing the Company for the purposes of such registration, addressed to the underwriters and the transfer agent for the Registrable Securities so delivered, respectively, to the effect that such registration statement has become effective under the Securities Act and such Registrable Securities are freely tradable, and covering such other matters as are customarily covered in opinions of issuer’s counsel delivered to underwriters and transfer agents in underwritten public offerings and (ii) a letter dated such date from the independent public accountants who have certified the financial statements of the Company included in the registration statement or the prospectus, covering such matters as are customarily covered in accountants’ letters delivered to underwriters in underwritten public offerings.
 
5.4   Furnish Information . It shall be a condition precedent to the obligation of the Company to take any action pursuant to this Article V with respect to the Registrable Securities of any Selling Holder that such Holder shall furnish to the Company such information regarding the Holder, the Registrable Securities held by the Holder, and the intended method of disposition of such securities as shall be reasonably required by the Company to effect the registration of such Holder’s Registrable Securities.
 

 

5.5   Registration Expenses . The Company shall bear and pay all Registration Expenses incurred in connection with any registration, filing or qualification of Registrable Securities with respect to registration pursuant to Section 5.2 for each Holder, but excluding underwriting discounts and commissions relating to Registrable Securities and excluding any professional fees or costs of accounting, financial or legal advisors to any of the Holders.
 
5.6   Underwriting Requirements . In connection with any offering involving an underwriting of shares of the Company’s capital stock, the Company shall not be required under Section 5.2 to include any of the Holders’ Registrable Securities in such underwriting unless they accept the terms of the underwriting as agreed upon between the Company and the underwriters selected by it (or by other persons entitled to select the underwriters), and then only in such quantity as the underwriters determine in their sole discretion will not jeopardize the success of the offering by the Company. If the total amount of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the amount of securities sold other than by the Company that the underwriters determine in their sole discretion is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters determine in their sole discretion will not jeopardize the success of the offering (the securities so included to be apportioned pro rata among the selling stockholders according to the total amount of securities entitled to be included therein owned by each selling stockholder or in such other proportions as shall mutually be agreed to by such selling stockholders). For purposes of the preceding parenthetical concerning apportionment, for any selling stockholder who is a holder of Registrable Securities and is a partnership or corporation, the partners, retired partners and stockholders of such holder, or the estates and family members of any such partners and retired partners and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single “selling stockholder,” and any pro-rata reduction with respect to such “selling stockholder” shall be based upon the aggregate amount of shares carrying registration rights owned by all entities and individuals included in such “selling stockholder,” as defined in this sentence.
 
5.7   Delay of Registration . No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Article.
 
5.8   Indemnification . In the event that any Registrable Securities are included in a registration statement under this Article V:
 
(a)   To the extent permitted by law, the Company will indemnify and hold harmless each Holder, any underwriter (as defined in the Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, or the Exchange Act, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “Violation”): (i) any untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation by the Company of the Securities Act, the Exchange Act, or any rule or regulation promulgated under the Securities Act, or the Exchange Act, and the Company will pay to each such Holder, underwriter or controlling person, as incurred, any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity agreement contained in this Section 5.8(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability, or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by any such Holder, underwriter or controlling person.
 

 
 
(b)   To the extent permitted by law, each Selling Holder will indemnify and hold harmless the Company, each of its directors, each of its officers, each person, if any, who controls the Company within the meaning of the Securities Act, any underwriter, any other Holder selling securities in such registration statement and any controlling person of any such underwriter or other Holder, against any losses, claims, damages, or liabilities (joint or several) to which any of the foregoing persons may become subject, under the Securities Act, or the Exchange Act, insofar as such losses, claims, damages, or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration; and each such Holder will pay, as incurred, any legal or other expenses reasonably incurred by any person intended to be indemnified pursuant to this Section 5.8(b), in connection with investigating or defending any such loss, claim, damage, liability, or action; provided , however , that the indemnity agreement contained in this Section 5.8(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; provided , further, that, in no event shall any indemnity under this Section 5.8(b) exceed the greater of the cash value of the (i) gross proceeds from the Offering received by such Holder or (ii) such Holder’s investment pursuant to this Agreement as set forth on the signature page attached hereto.
 
(c)   Promptly after receipt by an indemnified party under this Section 5.8 of notice of the commencement of any action (including any governmental action), such indemnified party shall, if a claim in respect thereof is to be made against any indemnifying party under this Section 5.8, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly notified, to assume the defense thereof with counsel selected by the indemnifying party and approved by the indemnified party (whose approval shall not be unreasonably withheld); provided, however, that an indemnified party (together with all other indemnified parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 5.8, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 5.8.
 

 
 
(d)   If the indemnification provided for in this Section 5.8 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage, or expense referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage, or expense as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.
 
(e)   Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in an underwriting agreement entered into in connection with an underwritten public offering are in conflict with the foregoing provisions, the provisions in such underwriting agreement shall control.
 
(f)   The obligations of the Company and Holders under this Section 5.8 shall survive the completion of the Offering.
 
5.9   Reports Under Securities Exchange Act of 1934 . With a view to making available to the Holders the benefits of Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company agrees to:
 
(a)   make and keep public information available, as those terms are understood and defined in Rule 144, at all times after 90 days after the effective date of the registration statement;
 
(b)   file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and
 
(c)   furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (ii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC which permits the selling of any such securities without registration or pursuant to such form.
 
5.10   Permitted Transferees . The rights to cause the Company to register Registrable Securities granted to the Holders by the Company under this Article V may be assigned in full by a Holder in connection with a transfer by such Holder of its Registrable Securities if: (a) such Holder gives prior written notice to the Company; (b) such transferee agrees to comply with the terms and provisions of this Agreement; (c) such transfer is otherwise in compliance with this Agreement; and (d) such transfer is otherwise effected in accordance with applicable securities laws. Except as specifically permitted by this Section 5.10, the rights of a Holder with respect to Registrable Securities as set out herein shall not be transferable to any other Person, and any attempted transfer shall cause all rights of such Holder therein to be forfeited.
 
VI.
MISCELLANEOUS
 
6.1   Any notice or other communication given hereunder shall be deemed sufficient if in writing and sent by registered or certified mail, return receipt requested, or delivered by hand against written receipt therefor, addressed as follows:
 
if to the Company, to it at:
Zingerang, Inc.
50 Castilian Drive Ste. Z
Santa Barbara, California 93117
Attn: Derek McLeish , Chief Executive Officer
 

 
With a copy to:

Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas
New York, NY 10018
Attn: Gregory Sichenzia, Esq.

if to the Subscriber, to the Subscriber’s address indicated on the signature page of this Agreement.
 
Notices shall be deemed to have been given or delivered on the date of mailing, except notices of change of address, which shall be deemed to have been given or delivered when received.
 
6.2   Except as otherwise provided herein, this Agreement shall not be changed, modified or amended except by a writing signed by the parties to be charged, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged.
 
6.3   Subject to the provisions of Section 5.10, this Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.
 
6.4   Upon the execution and delivery of this Agreement by the Subscriber, this Agreement shall become a binding obligation of the Subscriber with respect to the purchase of Common Stock as herein provided, subject, however, to the right hereby reserved by the Company to enter into the same agreements with other subscribers and to add and/or delete other persons as subscribers.
 
6.5   NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT ALL THE TERMS AND PROVISIONS HEREOF SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEVADA WITHOUT REGARD TO SUCH STATE’S PRINCIPLES OF CONFLICTS OF LAW. IN THE EVENT THAT A JUDICIAL PROCEEDING IS NECESSARY, THE SOLE FORUM FOR RESOLVING DISPUTES ARISING OUT OF OR RELATING TO THIS AGREEMENT IS THE SUPREME COURT OF THE STATE OF NEVADA IN AND FOR CLARK COUNTY OF NEVADA OR THE FEDERAL COURTS FOR SUCH STATE AND COUNTY, AND ALL RELATED APPELLATE COURTS, THE PARTIES HEREBY IRREVOCABLY CONSENT TO THE JURISDICTION OF SUCH COURTS AND AGREE TO SAID VENUE.
 
 
6.6   In order to discourage frivolous claims the parties agree that unless a claimant in any proceeding arising out of this Agreement succeeds in establishing his claim and recovering a judgment against another party (regardless of whether such claimant succeeds against one of the other parties to the action), then the other party shall be entitled to recover from such claimant all of its/their reasonable legal costs and expenses relating to such proceeding and/or incurred in preparation therefor.
 
6.7   The holding of any provision of this Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Agreement, which shall remain in full force and effect. If any provision of this Agreement shall be declared by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced in whole or in part, such provision shall be interpreted so as to remain enforceable to the maximum extent permissible consistent with applicable law and the remaining conditions and provisions or portions thereof shall nevertheless remain in full force and effect and enforceable to the extent they are valid, legal and enforceable, and no provisions shall be deemed dependent upon any other covenant or provision unless so expressed herein.
 
6.8   It is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate, or be construed, as a waiver of any subsequent breach by that same party.
 
6.9   The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Agreement.
 
6.10   This Agreement may be executed in two or more counterparts each of which shall be deemed an original, but all of which shall together constitute one and the same instrument.
 
6.11   Nothing in this Agreement shall create or be deemed to create any rights in any person or entity not a party to this Agreement, except (a) for the holders of Registable Securities.
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


 
 
VII.      CONFIDENTIAL INVESTOR QUESTIONNAIRE
 
7.1   The Subscriber represents and warrants that he, she or it comes within one category marked below, and that for any category marked, he, she or it has truthfully set forth, where applicable, the factual basis or reason the Subscriber comes within that category. ALL INFORMATION IN RESPONSE TO THIS SECTION WILL BE KEPT STRICTLY CONFIDENTIAL. The undersigned agrees to furnish any additional information which the Company deems necessary in order to verify the answers set forth below.
 
CategoryA__   The undersigned is an individual (not a partnership, corporation, etc.) whose individual net worth, or joint net worth with his or her spouse, presently exceeds $1,000,000.
 
Explanation. In calculating net worth you may include equity in personal property and real estate, including your principal residence, cash, short-term investments, stock and securities. Equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property.

Category B__   The undersigned is an individual (not a partnership, corporation, etc.) who had an income in excess of $200,000 in each of the two most recent years, or joint income with his or her spouse in excess of $300,000 in each of those years (in each case including foreign income, tax exempt income and full amount of capital gains and losses but excluding any income of other family members and any unrealized capital appreciation) and has a reasonable expectation of reaching the same income level in the current year.

Category C__   The undersigned is a director or executive officer of the Company which is issuing and selling the Securities.

Category D__   The undersigned is a bank; a savings and loan association; insurance company; registered investment company; registered business development company; licensed small business investment company (“SBIC”); or employee benefit plan within the meaning of Title 1 of ERISA and (a) the investment decision is made by a plan fiduciary which is either a bank, savings and loan association, insurance company or registered investment advisor, or (b) the plan has total assets in excess of $5,000,000 or (c) is a self directed plan with investment decisions made solely by persons that are accredited investors. (describe entity)
   ______________________________________________________________________________________________________________
   ______________________________________________________________________________________________________________
 
Category E__   The undersigned is a private business development company as defined in section 202(a) (22) of the Investment Advisors Act of 1940. (describe entity)
______________________________________________________________________________________________________________
______________________________________________________________________________________________________________
 
Category F__    The undersigned is either a corporation, partnership, business trust, or non-profit organization within the meaning of Section 501(c) (3) of the Internal Revenue Code, in
each case not formed for the specific purpose of acquiring the Common Stock and with total assets in excess of $5,000,000. (describe entity)
______________________________________________________________________________________________________________
______________________________________________________________________________________________________________
 
 
 
 
Category G__   The undersigned is a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, where the purchase is directed by a
“sophisticated investor” as defined in Regulation 506(b)(2)(ii) under the Act.
 
Category H__   The undersigned is an entity (other than a trust) in which all of the equity owners are “accredited investors” within one or more of the above categories. If relying upon
this Category alone, each equity owner must complete a separate copy of this Agreement. (describe entity)
 
Category I__  The undersigned is not within any of the categories above and is therefore not an accredited investor.
 
  The undersigned agrees that the undersigned will notify the Company at any time on or prior to the Closing Date in the event that the representations and warranties in
  this Agreement shall cease to be true, accurate and complete.
 
7.2   SUITABILITY (please answer each question)
 
(a)   For an individual Subscriber, please describe your current employment, including the company by which you are employed and its principal business:
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
 
(b)   For an individual Subscriber, please describe any college or graduate degrees held by you:
 
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
 
(c)   For all Subscribers, please list types of prior investments:
 
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
 
 
(d)   For all Subscribers, please state whether you have participated in other private placements before:
 
YES_______       NO_______
 
(e)   If your answer to question (d) above was “YES”, please indicate frequency of such prior participation in private placements of:
 
 
Public
Companies
Private
Companies
 
Frequently
     
Occasionally
     
Never
     

(f)   For individual Subscribers, do you expect your current level of income to significantly decrease in the foreseeable future:
 
YES_______       NO_______
 
(g)   For trust, corporate, partnership and other institutional Subscribers, do you expect your total assets to significantly decrease in the foreseeable future:
 
YES_______       NO_______
 
(h)   For all Subscribers, do you have any other investments or c ontingent liabilities which you reasonably anticipate could cause you to need sudden cash requirements in excess of cash readily available to you:
 
YES_______       NO_______
 
(i)   For all Subscribers, are you familiar with the risk aspects and the non-liquidity of investments such as the securities for which you seek to subscribe?
 
YES_______       NO_______
 
(j)   For all Subscribers, do you understand that there is no guarantee of financial return on this investment and that you run the risk of losing your entire investment?
 
YES_______       NO_______
 
7.3   MANNER IN WHICH TITLE IS TO BE HELD . (circle one)
 
(a)   Individual Ownership
(b)   Community Property
(c)   Joint Tenant with Right of  Survivorship (both parties must sign)
(d)   Partnership*
(e)   Tenants in Common
(f)   Company*
(g)   Trust*
(h)   Other*
*If Securities are being subscribed for by an entity, the attached Certificate of Signatory must also be completed.
 
 
7.4   NASD AFFILIATION .
 
Are you affiliated or associated with an NASD member firm (please check one):
 
Yes _________     No __________
 
If Yes, please describe:
__________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________

*If Subscriber is a Registered Representative with an NASD member firm, have the following acknowledgment signed by the appropriate party:
 
The undersigned NASD member firm acknowledges receipt of the notice required by Article 3, Sections 28(a) and (b) of the Rules of Fair Practice.
 
_________________________________
Name of NASD Member Firm

By: ______________________________
Authorized Officer

Date: ____________________________

7.5   The undersigned is informed of the significance to the Company of the foregoing representations and answers contained in the Confidential Investor Questionnaire contained in this Article VII and such answers have been provided under the assumption that the Company will rely on them.
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 
 


NUMBER OF SHARES _______ X $0.10 = $________ (the "Purchase Price")


 
Signature
  Signature (if purchasing jointly)
   
Name Typed or Printed  
Name Typed or Printed
   
  Title (if Subscriber is an Entity)
Title (if Subscriber is an Entity)
   
Entity Name (if applicable)
Entity Name (if applicable
   
Address  
Address
 
City, State and Zip Code
City, State and Zip Code
   
  Telephone-Business
Telephone-Business
   
Telephone-Residence
Telephone-Residence
   
Facsimile-Business        
Facsimile-Business
   
Facsimile-Residence
Facsimile-Residence
   
Email  
Email
   
  Tax ID # or Social Security # 
  Tax ID # or Social Security #
   
     
Name in which securities should be issued:            


Dated:_____________________ , 2006

This Subscription Agreement is agreed to and accepted as of ________________   , 2006.
 
     
 
ZINGERANG, INC.
 
  		 
  		 
 
  By:   /s/ 
 
Name: Derek McLeish
Title: President and CEO
   


 
22

CERTIFICATE OF SIGNATORY

(To be completed if Shares are
being subscribed for by an entity)


I, ____________________________, am the ____________________________ of __________________________________________ (the “Entity”).

I certify that I am empowered and duly authorized by the Entity to execute and carry out the terms of the Subscription Agreement and to purchase and hold the Common Stock, and certify further that the Subscription Agreement has been duly and validly executed on behalf of the Entity and constitutes a legal and binding obligation of the Entity.

IN WITNESS WHEREOF, I have set my hand this ________ day of _________________, 2007


_______________________________________
(Signature)



 

SUBSCRIPTION AGREEMENT
 
SUBSCRIPTION AGREEMENT (this “Agreement”) made as of the last date set forth on the signature page hereof between Carbon Sciences, Inc. (the “Company”), and the undersigned (the “Subscriber”).
 
W I T N E S S E T H:
 
WHEREAS, the Company is conducting a private offering (the “Offering”) consisting of up to 1 5,000,000 shares of common stock, par value $.001 per share (“Shares”); and
 
WHEREAS, the Subscriber desires to purchase that number of Shares set forth on the signature page hereof on the terms and conditions hereinafter set forth.
 
NOW, THEREFORE, in consideration of the premises and the mutual representations and covenants hereinafter set forth, the parties hereto do hereby agree as follows:
 
I.
SUBSCRIPTION FOR SHARES AND REPRESENTATIONS BY SUBSCRIBER
 
1.1   Subject to the terms and conditions hereinafter set forth and in the Confidential Offering Memorandum dated April 16, 2007 (such memorandum, together with all amendments thereof and supplements and exhibits thereto, the “Memorandum”), the Subscriber hereby irrevocably subscribes for and agrees to purchase from the Company such number of Shares, and the Company agrees to sell to the Subscriber as is set forth on the signature page hereof, at a per share price equal to $0.10 per Share. The purchase price is payable by personal or business check or money order made payable to “Carbon Sciences, Inc.” contemporaneously with the execution and delivery of this Agreement by the Subscriber. Subscribers may also pay the subscription amount by, wire transfer of immediately available funds to:
 
Name:              Carbon Sciences, Inc
 
Bank:     Bank of America
5892 Calle Real
Goleta, CA 93117    

Account:         04165-43337  

ABA:     026009593    

1.2   The Subscriber recognizes that the purchase of the Shares involves a high degree of risk including, but not limited to, the following: (a) the Company remains a development stage business with limited operating history and requires substantial funds in addition to the proceeds of the Offering; (b) an investment in the Company is highly speculative, and only investors who can afford the loss of their entire investment should consider investing in the Company and the Shares; (c) the Subscriber may not be able to liquidate its investment; (d) transferability of the Shares (sometimes hereinafter collectively referred to as the “Securities”) is extremely limited; (e) in the event of a disposition, the Subscriber could sustain the loss of its entire investment; (f) the Company has not paid any dividends since its inception and does not anticipate paying any dividends; and (g) the Company may issue additional securities in the future which have rights and preferences that are senior to those of the Common Stock. Without limiting the generality of the representations set forth in Section 1.5 below, the Subscriber represents that the Subscriber has carefully reviewed the section of the Memorandum captioned “Risk Factors.”
 

 
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1.3   The Subscriber represents that the Subscriber is an “accredited investor” as such term is defined in Rule 501 of Regulation D (“Regulation D”) promulgated under the Securities Act of 1933, as amended (the “Securities Act”), as indicated by the Subscriber’s responses to the questions contained in Article VII hereof, and that the Subscriber is able to bear the economic risk of an investment in the Shares.
 
1.4   The Subscriber hereby acknowledges and represents that (a) the Subscriber has knowledge and experience in business and financial matters, prior investment experience, including investment in securities that are non-listed, unregistered and/or not traded on a national securities exchange nor on the National Association of Securities Dealers, Inc. (the “NASD”) automated quotation system (“NASDAQ”), or the Subscriber has employed the services of a “purchaser representative” (as defined in Rule 501 of Regulation D), attorney and/or accountant to read all of the documents furnished or made available by the Company both to the Subscriber and to all other prospective investors in the Shares to evaluate the merits and risks of such an investment on the Subscriber’s behalf; (b) the Subscriber recognizes the highly speculative nature of this investment; and (c) the Subscriber is able to bear the economic risk that the Subscriber hereby assumes.
 
1.5   The Subscriber hereby acknowledges receipt and careful review of this Agreement, the Memorandum (which includes the Risk Factors), including all exhibits thereto, and any documents which may have been made available upon request as reflected therein (collectively referred to as the “Offering Materials”) and hereby represents that the Subscriber has been furnished by the Company during the course of the Offering with all information regarding the Company, the terms and conditions of the Offering and any additional information that the Subscriber has requested or desired to know, and has been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other representatives of the Company concerning the Company and the terms and conditions of the Offering.
 
1.6   a)   In making the decision to invest in the Shares the Subscriber has relied solely upon the information provided by the Company in the Offering Materials. To the extent necessary, the Subscriber has retained, at its own expense, and relied upon appropriate professional advice regarding the investment, tax and legal merits and consequences of this Agreement and the purchase of the Shares hereunder. The Subscriber disclaims reliance on any statements made or information provided by any person or entity in the course of Subscriber’s consideration of an investment in the Shares other than the Offering Materials.
 
(b)   The Subscriber represents that (i) the Subscriber was contacted regarding the sale of the Shares by the Company (or an authorized agent or representative thereof) with whom the Subscriber had a prior substantial pre-existing relationship and (ii) no Shares were offered or sold to it by means of any form of general solicitation or general advertising, and in connection therewith, the Subscriber did not (A) receive or review any advertisement, article, notice or other communication published in a newspaper or magazine or similar media or broadcast over television or radio, whether closed circuit, or generally available; or (B) attend any seminar meeting or industry investor conference whose attendees were invited by any general solicitation or general advertising.
 

 
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1.7   The Subscriber hereby represents that the Subscriber, either by reason of the Subscriber’s business or financial experience or the business or financial experience of the Subscriber’s professional advisors (who are unaffiliated with and not compensated by the Company or any affiliate or selling agent of the Company, directly or indirectly), has the capacity to protect the Subscriber’s own interests in connection with the transaction contemplated hereby.
 
1.8   The Subscriber hereby acknowledges that the Offering has not been reviewed by the United States Securities and Exchange Commission (the “SEC”) nor any state regulatory authority since the Offering is intended to be exempt from the registration requirements of Section 5 of the Securities Act pursuant to Regulation D promulgated thereunder. The Subscriber understands that the Securities have not been registered under the Securities Act or under any state securities or “blue sky” laws and agrees not to sell, pledge, assign or otherwise transfer or dispose of the Securities unless they are registered under the Securities Act and under any applicable state securities or “blue sky” laws or unless an exemption from such registration is available.
 
1.9   The Subscriber understands that the Securities comprising the Shares have not been registered under the Securities Act by reason of a claimed exemption under the provisions of the Securities Act that depends, in part, upon the Subscriber’s investment intention. In this connection, the Subscriber hereby represents that the Subscriber is purchasing the Securities for the Subscriber’s own account for investment and not with a view toward the resale or distribution to others. The Subscriber, if an entity, further represents that it was not formed for the purpose of purchasing the Securities.
 
1.10   The Subscriber understands that there is no public market for the Common Stock and that no market may develop for any of such Securities. The Subscriber understands that even if a public market develops for such Securities, Rule 144 (“Rule 144”) promulgated under the Securities Act requires for non-affiliates, among other conditions, a one-year holding period prior to the resale (in limited amounts) of securities acquired in a non-public offering without having to satisfy the registration requirements under the Securities Act. The Subscriber understands and hereby acknowledges that the Company is under no obligation to register any of the Securities under the Securities Act or any state securities or “blue sky” laws other than as set forth in Article V.
 
1.11   The Subscriber consents to the placement of a legend on any certificate or other document evidencing the Securities that such Securities have not been registered under the Securities Act or any state securities or “blue sky” laws and setting forth or referring to the restrictions on transferability and sale thereof contained in this Agreement. The Subscriber is aware that the Company will make a notation in its appropriate records with respect to the restrictions on the transferability of such Securities. The legend to be placed on each certificate shall be in form substantially similar to the following:
 
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES OR “BLUE SKY LAWS,” AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”

 
3

 
1.12   The Subscriber understands that the Company will review this Agreement and is hereby given authority by the Subscriber to call Subscriber’s bank or place of employment or otherwise review the financial standing of the Subscriber; and it is further agreed that the Company, at its sole discretion, reserves the unrestricted right, without further documentation or agreement on the part of the Subscriber, to reject or limit any subscription, to accept subscriptions for fractional Shares and to close the Offering to the Subscriber at any time and that the Company will issue stop transfer instructions to its transfer agent with respect to such Securities.
 
1.13   The Subscriber hereby represents that the address of the Subscriber furnished by Subscriber on the signature page hereof is the Subscriber’s principal residence if Subscriber is an individual or its principal business address if it is a corporation or other entity.
 
1.14   The Subscriber represents that the Subscriber has full power and authority (corporate, statutory and otherwise) to execute and deliver this Agreement and to purchase the Shares. This Agreement constitutes the legal, valid and binding obligation of the Subscriber, enforceable against the Subscriber in accordance with its terms.
 
1.15   If the Subscriber is a corporation, partnership, limited liability company, trust, employee benefit plan, individual retirement account, Keogh Plan, or other tax-exempt entity, it is authorized and qualified to invest in the Company and the person signing this Agreement on behalf of such entity has been duly authorized by such entity to do so.
 
1.16   The Subscriber acknowledges that if he or she is a Registered Representative of an NASD member firm, he or she must give such firm the notice required by the NASD’s Rules of Fair Practice, receipt of which must be acknowledged by such firm in Section 7.4 below.
 
1.17   The Subscriber acknowledges that at such time, if ever, as the Securities are registered (as such term is defined in Article V hereof), sales of the Securities will be subject to state securities laws.
 
1.18   b)   The Subscriber agrees not to issue any public statement with respect to the Subscriber’s investment or proposed investment in the Company or the terms of any agreement or covenant between them and the Company without the Company’s prior written consent, except such disclosures as may be required under applicable law or under any applicable order, rule or regulation.
 
(b)   The Company agrees not to disclose the names, addresses or any other information about the Subscribers, except as required by law; provided, that the Company may use the name of the Subscriber for any offering or in any registration statement filed pursuant to Article V in which the Subscriber’s shares are included.
 

 
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1.19   The Subscriber agrees to hold the Company and its directors, officers, employees, affiliates, controlling persons and agents and their respective heirs, representatives, successors and assigns harmless and to indemnify them against all liabilities, costs and expenses incurred by them as a result of (a) any sale or distribution of the Securities by the Subscriber in violation of the Securities Act or any applicable state securities or “blue sky” laws; or (b) any false representation or warranty or any breach or failure by the Subscriber to comply with any covenant made by the Subscriber in this Agreement (including the Confidential Investor Questionnaire contained in Article VII herein) or any other document furnished by the Subscriber to any of the foregoing in connection with this transaction.
 

II.
REPRESENTATIONS BY AND COVENANTS OF THE COMPANY
 
The Company hereby represents and warrants to the Subscriber that:
 
2.1   Organization, Good Standing and Qualification . The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has full corporate power and authority to conduct its business.
 
2.2   Capitalization and Voting Rights . The Company has authorized 500,000,000 shares of Common Stock, par value $.001 per share, of which 131,600,000 shares are outstanding as of the date hereof. Except as set forth in the Offering Materials, there are no outstanding options, warrants, agreements, convertible securities, preemptive rights or other rights to subscribe for or to purchase any shares of capital stock of the Company. Except as set forth in the Offering Materials and as otherwise required by law, there are no restrictions upon the voting or transfer of any of the shares of capital stock of the Company pursuant to the Company’s Articles of Incorporation (the “Articles of Incorporation”), By-Laws or other governing documents or any agreement or other instruments to which the Company is a party or by which the Company is bound.
 
2.3   Authorization; Enforceability . The Company has all corporate right, power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. All corporate action on the part of the Company, its directors and stockholders necessary for the (i) authorization execution, delivery and performance of this Agreement by the Company; and (ii) authorization, sale, issuance and delivery of the Securities contemplated hereby and the performance of the Company’s obligations hereunder has been taken. This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies, and to limitations of public policy. The Common Stock, when issued and fully paid for in accordance with the terms of this Agreement, will be validly issued, fully paid and nonassessable. The issuance and sale of the Common Stock contemplated hereby will not give rise to any preemptive rights or rights of first refusal on behalf of any person which have not been waived in connection with this offering.
 
2.4   No Conflict; Governmental Consents .
 

 
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(a)   The execution and delivery by the Company of this Agreement and the consummation of the transactions contemplated hereby will not result in the violation of any material law, statute, rule, regulation, order, writ, injunction, judgment or decree of any court or governmental authority to or by which the Company is bound, or of any provision of the Articles of Incorporation or By-Laws of the Company, and will not conflict with, or result in a material breach or violation of, any of the terms or provisions of, or constitute (with due notice or lapse of time or both) a default under, any lease, loan agreement, mortgage, security agreement, trust indenture or other agreement or instrument to which the Company is a party or by which it is bound or to which any of its properties or assets is subject, nor result in the creation or imposition of any lien upon any of the properties or assets of the Company.
 
(b)   No consent, approval, authorization or other order of any governmental authority is required to be obtained by the Company in connection with the authorization, execution and delivery of this Agreement or with the authorization, issue and sale of the Shares, except such filings as may be required to be made with the SEC, NASD, NASDAQ and with any state or foreign blue sky or securities regulatory authority.
 
2.5   Licenses . Except as otherwise set forth in the Memorandum, the Company has sufficient licenses, permits and other governmental authorizations currently required for the conduct of its business or ownership of properties and is in all material respects in compliance therewith.
 
2.6   Litigation . The Company knows of no pending or threatened legal or governmental proceedings against the Company which could materially adversely affect the business, property, financial condition or operations of the Company or which materially and adversely questions the validity of this Agreement or any agreements related to the transactions contemplated hereby or the right of the Company to enter into any of such agreements, or to consummate the transactions contemplated hereby or thereby. The Company is not a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality which could materially adversely affect the business, property, financial condition or operations of the Company. There is no action, suit, proceeding or investigation by the Company currently pending in any court or before any arbitrator or that the Company intends to initiate.
 
2.7   Disclosure . The information set forth in the Offering Materials as of the date hereof contains no untrue statement of a material fact nor omits to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading.
 
2.8   Investment Company . The Company is not an “investment company” within the meaning of such term under the Investment Company Act of 1940, as amended, and the rules and regulations of the SEC thereunder.
 
2.9   Intellectual Property .
 
(i)   To the best of its knowledge, the Company owns or possesses sufficient legal rights to all patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information and other proprietary rights and processes necessary for its business as now conducted and as presently proposed to be conducted, without any known infringement of the rights of others. Except as disclosed in the Memorandum, there are no material outstanding options, licenses or agreements of any kind relating to the foregoing proprietary rights, nor is the Company bound by or a party to any material options, licenses or agreements of any kind with respect to the patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information and other proprietary rights and processes of any other person or entity other than such licenses or agreements arising from the purchase of “off the shelf” or standard products. The Company has not received any written communications alleging that the Company has violated or, by conducting its business as presently proposed to be conducted, would violate any of the patents, trademarks, service marks, trade names, copyrights or trade secrets or other proprietary rights of any other person or entity.
 

 
6
 
(ii)   Except as disclosed in the Memorandum, the Company is not aware that any of its employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with their duties to the Company or that would conflict with the Company’s business as presently conducted.
 
(iii)   Neither the execution nor delivery of this Agreement, nor the carrying on of the Company’s business by the employees of the Company, nor the conduct of the Company’s business as presently conducted, will, to the Company’s knowledge, conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract, covenant or instrument under which any employee is now obligated.
 
(iv)   To the Company’s knowledge, no employee of the Company, nor any consultant with whom the Company has contracted, is in violation of any term of any employment contract, proprietary information agreement or any other agreement relating to the right of any such individual to be employed by, or to contract with, the Company because of the nature of the business conducted by the Company; and to the Company’s knowledge the continued employment by the Company of its present employees, and the performance of the Company’s contracts with its independent contractors, will not result in any such violation. The Company has not received any written notice alleging that any such violation has occurred. Except as described in the Memorandum, no employee of the Company has been granted the right to continued employment by the Company or to any compensation following termination of employment with the Company except for any of the same which would not have a material adverse effect on the business of the Company. The Company is not aware that any officer, key employee or group of employees intends to terminate his, her or their employment with the Company, nor does the Company have a present intention to terminate the employment of any officer, key employee or group of employees.
 
2.10   Title to Properties and Assets; Liens, Etc . The Company has good and marketable title to its properties and assets, including the properties and assets reflected in the most recent balance sheet included in the Financial Statements, and good title to its leasehold estates, in each case subject to no mortgage, pledge, lien, lease, encumbrance or charge, other than (a) those resulting from taxes which have not yet become delinquent; (b) liens and encumbrances which do not materially detract from the value of the property subject thereto or materially impair the operations of the Company; and (c) those that have otherwise arisen in the ordinary course of business. The Company is in compliance with all material terms of each lease to which it is a party or is otherwise bound.
 

 
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2.11   Obligations to Related Parties . Except as described in the Memorandum, there are no obligations of the Company to officers, directors, stockholders, or employees of the Company other than (a) for payment of salary or other compensation for services rendered, (b) reimbursement for reasonable expenses incurred on behalf of the Company and (c) for other standard employee benefits made generally available to all employees (including stock option agreements outstanding under any stock option plan approved by the Board of Directors of the Company). Except as may be disclosed in the Memorandum, the Company is not a guarantor or indemnitor of any indebtedness of any other person, firm or corporation.
 

III.
TERMS OF SUBSCRIPTION
 
3.1   There is no requirement that any minimum number of Shares be sold and therefore no escrow will be established for subscription funds. Subscription funds may be deposited by the Company directly into its operating account for use as described in this Confidential Offering Memorandum.
 
3.2   Certificates representing the Common Stock purchased by the Subscriber pursuant to this Agreement will be prepared for delivery to the Subscriber within 15 business days following the Closing at which such purchase takes place. The Subscriber hereby authorizes and directs the Company to deliver the certificates representing the Common Stock purchased by the Subscriber pursuant to this Agreement directly to the Subscriber’s residential or business address indicated on the signature page hereto.
 

IV.
CONDITIONS TO OBLIGATIONS OF THE SUBSCRIBERS
 
4.1   The Subscriber’s obligation to purchase the Shares at the Closing at which such purchase is to be consummated is subject to the fulfillment on or prior to such Closing of the following conditions, which conditions may be waived at the option of each Subscriber to the extent permitted by law:
 
(a)   Covenants . All covenants, agreements and conditions contained in this Agreement to be performed by the Company on or prior to the date of such Closing shall have been performed or complied with in all material respects.
 
(b)   No Legal Order Pending . There shall not then be in effect any legal or other order enjoining or restraining the transactions contemplated by this Agreement.
 
(c)   No Law Prohibiting or Restricting Such Sale . There shall not be in effect any law, rule or regulation prohibiting or restricting such sale or requiring any consent or approval of any person, which shall not have been obtained, to issue the Securities (except as otherwise provided in this Agreement).
 
V.
LOCK-UP AGREEMENT
 
5.1   The Subscriber understands that the Company may file with the Securities and Exchange Commission ("SEC") a registration statement on Form SB-2 (the "Registration Statement") to register certain shares of the Company’s common stock and to exercise its reasonable best efforts to cause the Registration Statement to become effective. The Company may also request a broker-dealer to file with the National Association of Securities Dealers (the "NASD") to secure the listing or quotation of its Common Stock on the Over the Counter Bulletin Board market maintained by the National Association of Securities Dealers, Inc.
 

 
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5.2   As an inducement to NASD market makers to establish a public market for the common stock, the Subscriber hereby agrees that from the date of the Confidential Offering Memorandum and until one (1) year after the Registration Statement is declared effective by the SEC, the Subscriber will not exercise any rights to sell any unregistered shares of the Company's Common Stock as may be permitted under SEC Rule 144.
 
VI.
MISCELLANEOUS
 
6.1   Any notice or other communication given hereunder shall be deemed sufficient if in writing and sent by registered or certified mail, return receipt requested, or delivered by hand against written receipt therefor, addressed as follows:
 
if to the Company, to it at:
Carbon Sciences, Inc.
50 Castilian Drive Suite C
Santa Barbara, California 93117
Attn: Derek McLeish , Chief Executive Officer

With a copy to:

Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas
New York, NY 10018
Attn: Gregory Sichenzia, Esq.

if to the Subscriber, to the Subscriber’s address indicated on the signature page of this Agreement.
 
Notices shall be deemed to have been given or delivered on the date of mailing, except notices of change of address, which shall be deemed to have been given or delivered when received.
 
6.2   Except as otherwise provided herein, this Agreement shall not be changed, modified or amended except by a writing signed by the parties to be charged, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged.
 
6.3   Subject to the provisions of Section 5.10, this Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.
 

 
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6.4   Upon the execution and delivery of this Agreement by the Subscriber, this Agreement shall become a binding obligation of the Subscriber with respect to the purchase of Common Stock as herein provided, subject, however, to the right hereby reserved by the Company to enter into the same agreements with other subscribers and to add and/or delete other persons as subscribers.
 
6.5   NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT ALL THE TERMS AND PROVISIONS HEREOF SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEVADA WITHOUT REGARD TO SUCH STATE’S PRINCIPLES OF CONFLICTS OF LAW. IN THE EVENT THAT A JUDICIAL PROCEEDING IS NECESSARY, THE SOLE FORUM FOR RESOLVING DISPUTES ARISING OUT OF OR RELATING TO THIS AGREEMENT IS THE SUPREME COURT OF THE STATE OF NEVADA IN AND FOR CLARK COUNTY OF NEVADA OR THE FEDERAL COURTS FOR SUCH STATE AND COUNTY, AND ALL RELATED APPELLATE COURTS, THE PARTIES HEREBY IRREVOCABLY CONSENT TO THE JURISDICTION OF SUCH COURTS AND AGREE TO SAID VENUE.
 
6.6   In order to discourage frivolous claims the parties agree that unless a claimant in any proceeding arising out of this Agreement succeeds in establishing his claim and recovering a judgment against another party (regardless of whether such claimant succeeds against one of the other parties to the action), then the other party shall be entitled to recover from such claimant all of its/their reasonable legal costs and expenses relating to such proceeding and/or incurred in preparation therefor.
 
6.7   The holding of any provision of this Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Agreement, which shall remain in full force and effect. If any provision of this Agreement shall be declared by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced in whole or in part, such provision shall be interpreted so as to remain enforceable to the maximum extent permissible consistent with applicable law and the remaining conditions and provisions or portions thereof shall nevertheless remain in full force and effect and enforceable to the extent they are valid, legal and enforceable, and no provisions shall be deemed dependent upon any other covenant or provision unless so expressed herein.
 
6.8   It is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate, or be construed, as a waiver of any subsequent breach by that same party.
 
6.9   The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Agreement.
 
6.10   This Agreement may be executed in two or more counterparts each of which shall be deemed an original, but all of which shall together constitute one and the same instrument.
 

 
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6.11   Nothing in this Agreement shall create or be deemed to create any rights in any person or entity not a party to this Agreement, except (a) for the holders of Registable Securities.
 
VII.
CONFIDENTIAL INVESTOR QUESTIONNAIRE
 
7.1   The Subscriber represents and warrants that he, she or it comes within one category marked below, and that for any category marked, he, she or it has truthfully set forth, where applicable, the factual basis or reason the Subscriber comes within that category. ALL INFORMATION IN RESPONSE TO THIS SECTION WILL BE KEPT STRICTLY CONFIDENTIAL. The undersigned agrees to furnish any additional information which the Company deems necessary in order to verify the answers set forth below.
 
Category A__ The undersigned is an individual (not a partnership, corporation, etc.) whose individual net worth, or joint net worth with his or her spouse, presently exceeds $1,000,000.

Explanation. In calculating net worth you may include equity in personal property and real estate, including your principal residence, cash, short-term investments, stock and securities. Equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property.

Category B__   The undersigned is an individual (not a partnership, corporation, etc.) who had an income in excess of $200,000 in each of the two most recent years, or joint income with his or her spouse in excess of $300,000 in each of those years (in each case including foreign income, tax exempt income and full amount of capital gains and losses but excluding any income of other family members and any unrealized capital appreciation) and has a reasonable expectation of reaching the same income level in the current year.

Category C__   The undersigned is a director or executive officer of the Company which is issuing and selling the Securities.

Category D__   The undersigned is a bank; a savings and loan association; insurance company; registered investment company; registered business development company; licensed small business investment company (“SBIC”); or employee benefit plan within the meaning of Title 1 of ERISA and (a) the investment decision is made by a plan fiduciary which is either a bank, savings and loan association, insurance company or registered investment advisor, or (b) the plan has total assets in excess of $5,000,000 or (c) is a self directed plan with investment decisions made solely by persons that are accredited investors. (describe entity)
   ______________________________________________________________________________________________________________
   ______________________________________________________________________________________________________________
 
Category E__   The undersigned is a private business development company as defined in section 202(a) (22) of the Investment Advisors Act of 1940. (describe entity)
______________________________________________________________________________________________________________
______________________________________________________________________________________________________________
 
Category F__    The undersigned is either a corporation, partnership, business trust, or non-profit organization within the meaning of Section 501(c) (3) of the Internal Revenue Code, in
each case not formed for the specific purpose of acquiring the Common Stock and with total assets in excess of $5,000,000. (describe entity)
______________________________________________________________________________________________________________
______________________________________________________________________________________________________________
 
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Category G__   The undersigned is a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, where the purchase is directed by a
“sophisticated investor” as defined in Regulation 506(b)(2)(ii) under the Act.
 
Category H__   The undersigned is an entity (other than a trust) in which all of the equity owners are “accredited investors” within one or more of the above categories. If relying upon
this Category alone, each equity owner must complete a separate copy of this Agreement. (describe entity)
 
Category I__  The undersigned is not within any of the categories above and is therefore not an accredited investor.
 
  The undersigned agrees that the undersigned will notify the Company at any time on or prior to the Closing Date in the event that the representations and warranties in
  this Agreement shall cease to be true, accurate and complete.
 
7.2   SUITABILITY (please answer each question)
 
(a)   For an individual Subscriber, please describe your current employment, including the company by which you are employed and its principal business:
 
(b)   For an individual Subscriber, please describe any college or graduate degrees held by you:
 
(c)   For all Subscribers, please list types of prior investments:
 
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(d)   For all Subscribers, please state whether you have participated in other private placements before:
 
YES_______       NO_______
 
(e)   If your answer to question (d) above was “YES”, please indicate frequency of such prior participation in private placements of:
 
 
Public
Companies
Private
Companies
 
Frequently
     
Occasionally
     
Never
     

(f)   For individual Subscribers, do you expect your current level of income to significantly decrease in the foreseeable future:
 
YES_______       NO_______
 
(g)   For trust, corporate, partnership and other institutional Subscribers, do you expect your total assets to significantly decrease in the foreseeable future:
 
YES_______       NO_______
 
(h)   For all Subscribers, do you have any other investments or c ontingent liabilities which you reasonably anticipate could cause you to need sudden cash requirements in excess of cash readily available to you:
 
YES_______       NO_______
 
(i)   For all Subscribers, are you familiar with the risk aspects and the non-liquidity of investments such as the securities for which you seek to subscribe?
 
YES_______       NO_______
 
(j)   For all Subscribers, do you understand that there is no guarantee of financial return on this investment and that you run the risk of losing your entire investment?
 
YES_______       NO_______
 
7.3   MANNER IN WHICH TITLE IS TO BE HELD . (circle one)
 
(a)   Individual Ownership
(b)   Community Property
(c)   Joint Tenant with Right of  Survivorship (both parties must sign)
(d)   Partnership*
(e)   Tenants in Common
(f)   Company*
(g)   Trust*
(h)   Other*
*If Securities are being subscribed for by an entity, the attached Certificate of Signatory must also be completed.
 
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7.4   NASD AFFILIATION .
 
Are you affiliated or associated with an NASD member firm (please check one):
 
Yes _________     No __________
 
If Yes, please describe:
__________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________

*If Subscriber is a Registered Representative with an NASD member firm, have the following acknowledgment signed by the appropriate party:
 
The undersigned NASD member firm acknowledges receipt of the notice required by Article 3, Sections 28(a) and (b) of the Rules of Fair Practice.
 
_________________________________
Name of NASD Member Firm

By: ______________________________
Authorized Officer

Date: ____________________________

7.5   The undersigned is informed of the significance to the Company of the foregoing representations and answers contained in the Confidential Investor Questionnaire contained in this Article VII and such answers have been provided under the assumption that the Company will rely on them.
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 
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NUMBER OF SHARES __________ X $0.10 = $__________ (the “Purchase Price”)  

 
Signature
  Signature (if purchasing jointly)
   
Name Typed or Printed  
Name Typed or Printed
   
  Title (if Subscriber is an Entity)
Title (if Subscriber is an Entity)
   
Entity Name (if applicable)
Entity Name (if applicable
   
Address  
Address
 
City, State and Zip Code
City, State and Zip Code
   
  Telephone-Business
Telephone-Business
   
Telephone-Residence
Telephone-Residence
   
Facsimile-Business        
Facsimile-Business
   
Facsimile-Residence
Facsimile-Residence
   
Email  
Email
   
Tax ID # or Social Security # 
Tax ID # or Social Security #
   
Name in which securities should be issued:            


Dated:____________________ , 2007

This Subscription Agreement is agreed to and accepted as of ________________   , 2007.
 
 
 
     
  CARBON SCIENCES, INC.
 
  		 
  		 
 
By:   /s/ 
 
Name: Derek McLeish
Title: President and CEO    
   
 

 
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CERTIFICATE OF SIGNATORY

(To be completed if Shares are
being subscribed for by an entity)


I, ____________________________, am the ____________________________ of __________________________________________ (the “Entity”).

I certify that I am empowered and duly authorized by the Entity to execute and carry out the terms of the Subscription Agreement and to purchase and hold the Common Stock, and certify further that the Subscription Agreement has been duly and validly executed on behalf of the Entity and constitutes a legal and binding obligation of the Entity.

IN WITNESS WHEREOF, I have set my hand this ________ day of _________________, 2007


_______________________________________
(Signature)


 
 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors and Shareholders of
Carbon Sciences, Inc. (formerly Zingerang, Inc.)
(A Development Stage Company)
Santa Barbara, California

We hereby consent to the use in this Registration Statement of Carbon Sciences, Inc. (formerly Zingerang, Inc.) of our report, dated January 22, 2007, which includes an emphasis paragraph relating to an uncertainty as to the Company’s ability to continue as a going concern, for the year ended December 31, 2006, and to all other references of our firm included in this Registration Statement on Form SB-2.





HJ Associates & Consultants, LLP  
Salt Lake City, Utah
July 25, 2007