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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report

(Date of earliest event reported): July 9, 2022

 

Colambda Technologies, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada (NV)

 

000-29243

 

98-0361773

(State or Other Jurisdiction

of incorporation)

 

(Commission File Number)

 

(IRS Employer

Identification No.)

Colambda Technologies, Inc.

1870 West Prince Road #41

Tucson, Arizona 85705

(Address of principal executive offices)

 

Telephone: (281) 928 4425

(Registrant’s telephone number, including area code)

 

(Former name or former address, if changed since last report)

 

New Century Resources Corp.

10 Dionysiou Solomou Street

Leona Building, Suite 501

2406 Engomi, Nicosia Cyprus 25631

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

(17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

(17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act: None.


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 


 

Table of Contents

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

1

EXPLANATORY NOTE

2

Item 1.01

Entry into a Martial Definitive Agreement

3

Item 2.01

Completion of Acquisition or Disposition of Assets

3

 

The Share Exchange and Related Transactions

3

 

Description of Business

6

 

Description of Properties

6

 

Risk Factors

16

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

28

 

Directors, Executive Officers, Promoters and Control Persons

40

 

Executive Compensation

43

 

Summary Compensation Table

43

 

Security Ownership of Certain Beneficial Owners and Management

48

 

Certain Relationships and Related Transactions

49

 

Market Price of and Dividends on Common Equity and Related Stockholder Matters

50

 

Description of Securities

50

 

Legal Proceedings

51

 

Indemnification of Directors and Officers

51

Item 3.02

Unregistered Sales of Equity Securities

52

Item 5.01

Changes in Control of Registrant

52

Item 5.02

Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers

52

Item 5.06

Change in Shell Company Status

52

Item 8.01

Other Information

52

Item 9.01

Financial Statements and Exhibits

53


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Current Report contains forward-looking statements, including, without limitation, in the sections captioned “Description of Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Plan of Operations,” and elsewhere.  Any and all statements contained in this Report that are not statements of historical fact may be deemed forward-looking statements. Terms such as “may,” “might,” “would,” “should,” “could,” “project,” “estimate,” “pro-forma,” “predict,” “potential,” “strategy,” “anticipate,” “attempt,” “develop,” “plan,” “help,” “believe,” “continue,” “intend,” “expect,” “future,” and terms of similar import (including the negative of any of the foregoing) may be intended to identify forward-looking statements.  However, not all forward-looking statements may contain one or more of these identifying terms.  Forward-looking statements in this Report may include, without limitation, statements regarding (i) the plans and objectives of management for future operations, including plans or objectives relating to the development of commercially viable pharmaceuticals, (ii) a projection of income (including income/loss), earnings (including earnings/loss) per share, capital expenditures, dividends, capital structure or other financial items, (iii) our future financial performance, including any such statement contained in a discussion and analysis of financial condition by management or in the results of operations included pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”), and (iv) the assumptions underlying or relating to any statement described in points (i), (ii) or (iii) above.

 

The forward-looking statements are not meant to predict or guarantee actual results, performance, events or circumstances and may not be realized because they are based upon our current projections, plans, objectives, beliefs, expectations, estimates and assumptions and are subject to a number of risks and uncertainties and other influences, many of which we have no control over. Actual results and the timing of certain events and circumstances may differ materially from those described by the forward-looking statements as a result of these risks and uncertainties. Factors that may influence or contribute to the inaccuracy of the forward-looking statements or cause actual results to differ materially from expected or desired results may include, without limitation, our inability to obtain adequate new financing and capital, fluctuations in our operating results and our ability to generate revenue in amounts which exceed our operating costs, our ability to install and maintain proper and adequate internal controls, our ability to protect our intellectual property and exploit and develop our intellectual property, increasing costs and expenses related to healthcare and other benefits, our ability to comply with existing and changing laws and regulations applicable to the employee leasing industry, and our ability to comply with data protection requirements and standards.  A description of some of the risks and uncertainties that could cause our actual results to differ materially from those described by the forward-looking statements in this Report appears in the section captioned “Risk Factors” and elsewhere in this Report.

 

Readers are cautioned not to place undue reliance on forward-looking statements because of the risks and uncertainties related to them and to the risk factors.  We disclaim any obligation to update the forward-looking statements contained in this Report to reflect any new information or future events or circumstances or otherwise.

 

Readers should read this Report in conjunction with the discussion under the caption “Risk Factors,” our financial statements and the related notes thereto in this Report, and other documents which we may file from time to time with the SEC.


1


 

EXPLANATORY NOTE

 

On November 19, 2021, New Century Resources Corporation (the “Company”) entered into an agreement (the “Merger Agreement”) whereby Emissions Zero Module, Inc., a Wyoming company (“Emissions Zero”), would be merged (the “Merger”) into New Century Resources Corporation.  Pursuant to the Merger Agreement, the Company agreed to issue an aggregate of 110,695,500 newly issued shares of its common stock, $.001 par value, in exchange for all of the issued and outstanding common shares of Emissions Zero.

 

The Company previously filed a Form 8-K with the Securities and Exchange Commission (“SEC”) on November 22, 2021, reporting the execution of the Merger Agreement and the material terms of the transaction (the “Share Exchange “or “Merger”).  Pursuant to the terms of the Merger, the Company is the legal surviving entity and remains a Nevada corporation.  In accordance with the terms of the Merger Agreement, the Company agreed to change its name to “Colambda Technology, Inc., which previously became effective on January 4, 2022.

 

The parties to the Merger Agreement completed the Merger as of July 9, 2022.  This Current Report is being filed in connection with the closing of the Merger and certain related events and actions taken by the Company.

 

In accordance with “reverse acquisition” accounting treatment, our historical financial statements as of period ends, and for periods ended, prior to the Share Exchange will be replaced with the historical financial statements of Emissions Zero Module, Inc. in all future filings with the SEC.

 

As used in this Current Report henceforward, unless otherwise stated or the context clearly indicates otherwise, the terms “Colambda,” the “Company,” the “Registrant,” “we,” “us,” and “our” refer to Colambda Technologies, Inc., and the business of Emissions Zero and its subsidiary Job Aire Group, Inc., after giving effect to the Merger.  As a result of the Merger, the separate legal existence of Emissions Zero was terminated.

 

This Current Report contains summaries of the material terms of various agreements executed in connection with the transactions described herein. The summaries of these agreements are subject to, and are qualified in their entirety by, reference to these agreements, which are filed as exhibits hereto and incorporated herein by reference.

 

This Current Report includes responses to the following Items in Form 8-K:

 

Item 2.01.  Completion of Acquisition or Disposition of Assets

 

Item 3.02.  Unregistered Sales of Equity Securities

 

Item 5.01.  Changes in Control of Registrant

 

Item 5.02   Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

 

Item 5.06.  Change in Shell Company Status

 

Item 8.01   Other Information

 

Item 9.01   Financial Statements and Exhibits


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Item 2.01    Completion of Acquisition or Disposition of Assets.

 

THE SHARE EXCHANGE AND RELATED TRANSACTIONS

 

On July 9, 2022, the Company completed the Merger with Emissions Zero Module, Inc, (“EZM” or “Emissions Zero”), a Wyoming corporation. Pursuant to the terms of the Merger agreement, as amended entered into by the parties on November 21, 2021.  The Company agreed to issue to the shareholders of EZM an aggregate of 110,695,500 newly issued shares of the Company’s common stock, $.001 par value, in exchange for all of the issued and outstanding shares of common stock (and all securities convertible into common stock) of Emissions Zero.  Our Board of Directors and our shareholders, by written consent of the holders of 75.71% of our Common Stock, approved the Merger Agreement, a name change of the Company to Colambda Technology, Inc. and the election of new directors (“Director Nominees”) to be affected upon completion of the Merger.

 

The Company previously filed with the Securities and Exchange Commission a definitive Information Statement on Schedule 14C with respect to the Merger and proposed related transactions, which was filed on December 12, 2021. See the SEC website for a copy of such filing: https://www.sec.gov/edgar/browse/?CIK=1104462.

 

The Merger Agreement required us to submit the Merger and Name Change to the Financial Industry Regulatory Authority (“FINRA”) which oversees the Over-the-Counter-Bulletin Board (“OTC”) and to obtain a new stock trading symbol.  The parties have been submitting information and material to OTC since its initial application in early December, 2021.  By amendment to the Merger Agreement, the parties have temporarily waived compliance with the provision of the Merger Agreement which originally required obtaining the new symbol prior to closing. The parties have agreed to continue their efforts to obtain a new symbol for the Company’s common stock.

 

We previously filed an amendment to our certificate of incorporation to change our name to Colambda Technologies, Inc. The Name Change became effective under Nevada law on January 4, 2022.

 

In addition, the parties to the Merger Agreement agreed that upon closing, the pre- Merger directors and officers of Colambda Technology would resign from all of their positions and new management would be appointed.  The new management are the officers and directors and nominees of Emissions Zero. See pages 4 and 42 and Item 5.02 below

 

At the Closing of the Merger, Emissions Zero is required to deliver the sum of $105,000 to Robert J. Nielson and $105,000 to George Christodoulou, the Company’s pre- Merger President/Chief Executive Officer/Chief Financial Officer/Director, as repayment of advances to the Company. Emissions Zero previously delivered the sum of $25,000 to George Christodoulou and $25,000 to Robert J. Nielson.

 

Pursuant to an amendment (Amendment No. 3) to the Merger Agreement executed effective July 9, 2022, the parties agreed that Closing of the Merger was deemed effective as of July 9, 2022.  Further, the parties agreed to defer the payments due to Robert Nielson and George Christodoulou which were conditions to Closing until the earlier of 30 days after closing or receipt of a new trading symbol from FINRA/OTC.  A copy of the Amendment No. 3 to the Merger Agreement is filed as an Exhibit to this Form 8-K.


3


 

The issuance of shares of our Common Stock to holders of EZM’s capital stock in connection with the Share Exchange was not registered under the Securities Act, in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act, which exempts transactions by an issuer not involving any public offering, and Regulation D and/or Regulation S promulgated by the SEC under that section. The shares issuable to the EZM shareholders will be deemed restricted securities under the SEC’s rules and regulations and will not be sellable under the SEC’s Rule 144 until certain conditions are satisfied.  These conditions are:

 

Ÿthe issuer of the securities has ceased to be a shell company; 

Ÿthe issuer is subject to the reporting requirements of section 13 or 15(d) of the Exchange Act; 

Ÿthe issuer has filed all reports and other materials required to be filed by section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months, other than Form 8-K reports; and 

Ÿone year has elapsed since the issuer has filed current ‘‘Form 10 information’’ with the SEC reflecting its status as an entity that is no longer a shell company. 

 

A copy of the Merger Agreement was previously filed as Exhibit 10.1 to the Company’s Form 8-K as filed with the SEC on November 22, 2021. All descriptions of the terms of the Merger Agreement contained herein are qualified in their entirety by reference to the text thereof filed as an exhibit to the November 22, 2021 Form 8-K, Amendment No. 1 to Merger Agreement, filed as an Exhibit to Form 8-K filed on March 30, 2022, and the Amendments No. 2 and No. 3 to Merger Agreement filed as Exhibits to this Form 8-K, all of which are incorporated herein by reference.

 

Departure and Appointment of Directors and Officers

 

Effective with the closing of the Merger (July 9, 2021), our Board of Directors consists of (5) members.  On the Closing Date, George Christodoulou, Mark Christodoulou, and Solon Piitarides, who were the officers and directors of Colambda Technologies Inc. before the Merger, resigned their positions as a directors and officers, and Sumit Isaranggunlnaayudhya, David Riggs, Kent Hush, Russell E Klawunn, and Kim Mitchell were appointed as new members to the Board of Directors.   

 

Also on the Closing Date, George Christodoulou, our President, Secretary, Treasurer and sole officer before the Share Exchange, resigned from these positions, and Sumit Isaranggunlnaayudhya was appointed as President, David Riggs was appointed as our Chief Executive Officer and Secretary, and Kent Hush was appointed Chief Financial Officer and Treasurer.

 

Name

 

Position

 

Age

 

Term

David Riggs

 

President, Chief Executive Officer, Director

 

63

 

1 Year

Kent Hush

 

Treasurer, Chief Financial Officer, Director

 

51

 

1 Year

Sumit Isaranggul Na Ayudhya

 

Secretary, Chief Technology Officer, Chairman

 

61

 

1 Year

Russell E. Klawunn

 

Chief Operating Officer, Director

 

56

 

1 Year

Kim Mitchell

  

Director

  

71

  

1 Year

 

Summary of Beneficial Ownership of Securities of Colambda (formerly named New Century Resources Corporation)

 

Prior to the Merger, the Company had 12,481,724 shares of common stock, of which, 7,950,000 shares were beneficially owned by the then existing Officers and Directors. Immediately after giving effect to the Merger and the issuance of the shares of common stock to the Emissions Zero shareholders, the Company’s total common shares outstanding is 123,176,724, of which 96,107,699 shares are beneficially owned by the newly appointed Officers and Directors.


4


In December 2021, Emissions Zero completed a private placement offering of convertible notes for total gross proceeds of $1,215,000. The Company may at any time, or from time to time, make a voluntary prepayment, whether in full or in part, of these Notes, without premium or penalty. The Notes mature in 24 months and bear annual interest of 12%.  The Notes were converted into Emissions Zero common stock immediately prior to Closing of the Merger, and are therefore considered part of the issued and outstanding shares of Common Stock of Emissions Zero, and thus converted into Colambda shares of common stock as part of the aggregate shares issued at closing of the Merger.

 

The Notes Offering was made to a limited number of investors pursuant to an exemption available under the Securities Act of 1933 (the "Act"), specifically Rule 506(b) promulgated under Regulation D, and under certain other laws, including the securities law of certain states.

 

The Notes have automatically converted as a result of the completion of the Merger.  The following reflects the proceeds received under their respective tiers and the number of common stock equity units issued at closing.

 

 

 

Tier 1

 

Tier 2

Price

 

$0.20 

 

$0.40 

Proceeds

 

$580,000 

 

$635,000 

Common Stock Issued

  

2,900,000 

 

1,587,500 

 

The number of shares issuable as a result of the Note conversions is included in the aggregate of 110,695,000 shares of stock to be issued by the Company to the Emissions Zero shareholders.

 

Accounting Treatment; Change of Control

 

The Share Exchange is being accounted for as a “reverse acquisition,” and EZM is deemed to be the acquirer in the reverse acquisition. Consequently, the assets and liabilities and the historical operations that will be reflected in the financial statements prior to the Share Exchange will be those of Colambda Technologies, Inc. and the consolidated financial statements after completion of the Share Exchange will include the assets and liabilities of EZM, historical operations of EZM and its subsidiary from the closing date of the Share Exchange. As a result of the issuance of the shares of our Common Stock pursuant to the Share Exchange, a change in control of the Company occurred as of the date of consummation of the Share Exchange. Except as described in this Current Report, no arrangements or understandings exist among present or former controlling stockholders with respect to the election of members of our Board of Directors and, to our knowledge, no other arrangements exist that might result in a change of control of the Company.

 

We continue to be a “smaller reporting company,” as defined under the Exchange Act, following the Share Exchange. We believe that as a result of the Share Exchange we have ceased to be a “shell company” (as such term is defined in Rule 12b-2 under the Exchange Act).


5


 

DESCRIPTION OF BUSINESS

 

Historical Background

 

Colambda Technologies, Inc., formerly New Century Resources Corporation, was incorporated under the laws of the State of Utah in July of 1979 as WEM Petroleum, Inc.  To fund its original business purpose, WEM Petroleum, Inc. filed a registration statement under the Utah Securities Act, and relied on the exemption from federal registration provided for in Section 3(a)11, Rule 147, of the Securities Act of 1933, as amended (the "Securities Act"), for the purpose of offering for sale an aggregate of 4,000,000 of its unregistered common shares on an intrastate basis.  The Issuer's Prospectus was declared effective on September 19, 1979 and the Company closed its offering with all shares offered sold to residents of the State of Utah for gross proceeds of $100,000.  The Company subsequently amended its Articles of Incorporation to increase in its capital from 10,000,000 common shares authorized to 50,000,000 common shares authorized.  From inception through 1981, the Company conducted operations in the oil and gas industry. Pursuant to an option granted the Company in August of 1979, the Company exercised its right to drill exploratory wells on 640 acres in Cache County, Utah. Although various wells were drilled and completed, the Company did not realize any revenues from these oil and gas operations. In 1984, the Company attempted to refocus its business efforts into the mining industry by entering into an option to lease property and mining equipment in Montana. It ceased any significant business operations in the latter part of the 1980's when it failed to exercise the option, due to lack of funding. In 1988, the Company made an effort to commence conducting business again by expanding its business purpose to include the marketing and development of high-tech products. The Company's Board was also authorized to seek out suitable candidates for acquisition or merger. In addition, the Company authorized a reverse split of its issued and outstanding shares one (1) share for ten (10) shares, although the same was never affected. The Company ceased doing business until late 1993.

 

In October 1993, the Corporation changed its name to New Century Resources Corporation, acquiring 100% of the outstanding stock of G.C. Gulf Western Trading Limited (G.C.) in exchange for 7,200,000 shares of stock, which gave the stockholders of G.C. control of the Corporation by which it has conducted its operations. This acquisition was accounted for as a reverse merger or recapitalization of G.C.  No goodwill or other write-up to fair market value of the assets of G.C. occurred at the time of the merger. In 1994, the company was re-domiciled in the state of Nevada. The Nevada entity became the surviving corporation and the Utah Corporation was dissolved on February 14, 1994. As a result of the merger/change of domicile, the Articles of Incorporation of the Nevada entity became the Articles of the Company.

 

The Company divested itself of its 100% owned subsidiary G.C. on December 12, 2000, thereby eliminating the Trekkopje mining claims, a capitalized cost of $10,533,252, the related liabilities amounting to $8,500,000 from its acquisition, the note payable to its principal stockholder, which aggregated, came to a total of $1,046,640, and any claims to accrued interest. This divestiture was the unanimous decision of the board of directors, which was based in part, upon the Corporation's inability to raise the necessary capital to fund the exploration and development of the Trekkopje Uranium reserves. In addition, a feasibility study conducted by Dr. Brian Hamilton Jones played crucial role in their decision-making process, concluding that, due to the current Uranium market, exploitation of the Uranium reserves on the property would not be financially viable, and did not foresee any immediate or mid-term prospects in world market conditions and pricing which would lead to a pricing level justifiable of the exploitation of the Uranium reserves. Upon the disposition, the Company re-entered the business development stage and accumulated deficits during the business development stage are reported effective as of January 1, 2005.


6


 

In January 2022, the Company changed its name to Colambda Technologies, Inc. as a condition precedent to closing of the Merger with Emissions Zero.  Immediately following the completion of the Merger on July 9, 2022, the business of Emissions Zero and its wholly owned subsidiary, Job Air Group, Inc. (“JAG”) became our businesses.

 

Emissions Zero Module

 

Development of Products

 

Emissions Zero Module, Inc. was a Wyoming company founded in 2021 by Sumit Isaranggul Na Ayudhya and William Tiley and is based in Tucson, Arizona.  Emissions Zero was founded to eliminate carbon monoxide in automobile emissions and simultaneously reduce all other elements in these emissions (including carbon monoxide, carbon dioxide, nitrous oxide, and methane). EZM intends specifically to bring a patented product (called the Emissions Zero Modules) to market that was developed to eliminate the harmful effects of tailpipe emissions produced by internal combustion engines. The Emissions Zero Module connects directly to the existing battery in any automobile or truck and works with the car's existing electrical apparatus to create conditions within the engine's combustion chamber that allows for a more complete combustion of fuel. The internal combustion engine powers 99% of all cars and trucks in use today. The Emissions Zero Module significantly reduces the carbon footprint of the standard automobile and will help enable any vehicle to comply with new emissions standards. We expect to continue to support clean air initiatives by improving the Emissions Zero Module and introducing ever-evolving products.

 

The improved combustion of fuel results in a significant reduction of total tailpipe emissions, increase performance, and increased miles per gallon of fuel. The EZM is intended to work on all types of vehicles including cars, SUVs, diesel trucks, large over-the-road semis and can also be utilized in aircraft engines.

 

The internal combustion engine powers 99% of all cars and trucks in use today. The EZM significantly reduces the carbon footprint of the standard automobile and will help enable any vehicle to comply with new emissions standards. Emissions Zero will continue to support clean air initiatives by improving the EZM and introducing ever-evolving products.

 

Just as the catalytic converter began to reduce the pollutants in the air in response to the 1963 Clean Air Act, the Emissions Zero Module will provide the automobile industry the ability to comply with the stricter emissions standards. We are currently performing a large-scale, detailed study of the Emissions Zero Module. Management is also applying for the various governmental approvals necessary to distribute an aftermarket product such as the Emissions Zero Module.


7


 

TECHNOLOGY

 

Combustion engines create energy from burning a fuel/air mixture. Spark ignition introduces a spark to a compressed fuel/air mix and the burning causes an expansion of hot gases to push a piston within a cylinder, converting the linear movement of the piston into the rotating movement of a crankshaft that turns the wheels of your car. Compression ignition, or diesel, only air is brought in and compressed before a measured amount of fuel is sprayed into the hot compressed air, causing it to ignite and power the vehicle. The EZM performs emissions control on all types of engines. The EZM is a patented and proprietary emissions control device. The Module is attached directly to the vehicle's battery with the supplied power leads. Upon starting the engine, the Module affects the characteristics of the fuel combustion in the combustion chambers. Through its design and novel use of components, it causes a more efficient and complete burn of the fuel. This enhanced combustion results in a dramatic drop in carbon monoxide, unburnt fuel, and other gasses. As a result of this complete combustion, vehicles will see an increase in fuel efficiency, overall performance, and emissions reduction. This effect occurs in both spark and compression ignition engines and can be adjusted for the size of the vehicle/engine.

 

PATENTS

 

Emissions Zero has been granted a United States patent with respect to the technology being used to reduce harmful emissions and improve overall engine efficiency.  Additional patents on products used on the same technology are currently planned and in progress to strengthen the Company’s position with regard to all current and future product lines.

 

MARKET ANALYSIS SUMMARY

 

Management believes that the Emissions Zero Module should be considered a part of the automobile aftermarket product category. For classification purposes, management believes that it may be considered as a battery enhancement device. The improvements in emissions and efficiency are equally beneficial to all vehicles that utilize an internal combustion engine. The market ranges from small single horsepower tractors to commercial and industrial vehicles or machines powered by engines with thousands of horsepower. Even though the main focus of the Emissions Zero Module is emissions reduction or elimination, the fact that it connects to the battery may, in management’s opinion, help the process of obtaining ASTM (American Society for Testing and Materials) certification. Management is unable to determine how large a share of the market the Emissions Zero Module will control.  Management believes that there are currently no competitive products that compares to the Emissions Zero Module.

 

The closest environmental equivalent to the Emissions Zero Module is the modern catalytic converter. The precursor to the catalytic converter was invented by Eugene Houdry, a French mechanical engineer and expert in catalytic oil refining who lived in the U.S. around 1950. The further refinements and perfection of this concept led the catalytic converter to be adopted by all US auto manufactures as standard equipment in 1975 to comply with the 1963 Clean Air Act. Management believes that the Emissions Zero Module will reach the same level of acceptance in a much shorter period, due to its immediate need and simplistic operational platform. The Emissions Zero Module will initially be sold as an aftermarket product.

 

EMPLOYEES

 

As of July 9, 2022, we had 232 full-time employees, including our executive officers, and 6 part-time employees. Our contractual relationship with employees consists of management agreements, consulting agreements, and employee agreements. We have never experienced a work stoppage and believe our relationship with our employees is good. None of our employees are part of a unionized workforce.


8


 

The Acquisition of and Business of Job Aire Group, Inc.

 

Effective January 1, 2022, Emissions Zero Module entered into a Stock Purchase Agreement with the sole shareholder of Job Aire Group (“JAG”) to acquire all of the outstanding shares of JAG. Job Aire Group was a privately owned entity and is a staffing company which provides employees to third parties such as airlines, aircraft engine shops, repair facilities and similar entities and the employees provide services to the airline maintenance business.   Pursuant to the terms of the acquisition agreement, Emissions Zero agreed to pay $745,000 in installments and 2% of net revenue received by the Company, up to $1,000,000, for the 36-month period following the closing date.  At closing, Emissions Zero paid an initial installment of $25,000 and will make 36 payments of $20,000 each, beginning January 2, 2022.  As a result of the Stock Purchase Agreement, JAG became a wholly owned subsidiary of Emissions Zero.

 

HISTORY OF JOB AIRE GROUP

Job Aire Group was incorporated under the laws of the State of Arizona.  Job Aire Group is a multi-technical aviation company whose employees specialize in aircraft and engine inspection and audit, plus hard-core aeronautical engineering. Also skilled in aircraft maintenance marketing, we place aircraft into FAR 145 facilities for repair, refurbishment, painting, modification and overhaul. JAG is well known for providing experienced and professional heavy transport aircraft maintenance technicians world-wide. We do not directly contract aircraft repair or maintenance; we are in essence an employee leasing company.

 

Job Aire Group was a corporate expansion of Job-Aire Aviation Services, a company created in 1997 by William D. Tiley, a retired Air Force Officer and Commercial Pilot.  Mr. Tiley retired in 2021 and Nick Ammons, as of January 1, 2022, commenced serving as the President and Chairman of the Board.

 

OVERVIEW OF INDUSTRY

 

Job Aire is an employee leasing company (sometimes also referred to as staff leasing). Job Aire contracts with airline maintenance facilities to provide the specialized employees needed for these maintenance facilities to complete their contracts with the major airlines.

 

Job Aire has been in the industry for over 14 years and has an extensive employee resource pool of highly desirable qualified employees from around the world. Job Aire hires the employees then places these employees with clients in the aviation maintenance, repair and operations (MRO) industry, based on the MRO requirements and employee’s certifications.

 

Job Aire is paid on a contract basis. Job Aire directly pays the employees and then invoices the individual MRO on a net-30 term using a cost-plus formula. Job Aire is the employer of record and provides and pays for workers’ compensation insurance, taxes and wages related to the employees.

 

We generally assume responsibility for, and manage certain risks associated with:

 

payments of salaries, wages and certain other compensation to work site employees (“WSE”) from our own bank accounts (based on client reports and payments), including the processing of garnishment and wage deduction orders, 

 

reporting of wages, withholding and deposit of associated payroll taxes as the employer of record, 

 

provision and maintenance of workers' compensation insurance and workers' compensation claims processing, 


9


access to, and administration of, group health, welfare, and retirement benefits to WSEs under our-sponsored benefit plans, 

 

administration of unemployment claims, and 

 

provision of various HR policies and agreements, including employee handbooks and worksite employee agreements. 

The Aircraft Maintenance, Repair and Overhaul (“MRO”) market in the U.S. is estimated at US$9.9 Billion in the year 2021. China, the world’s second largest economy, is forecast to reach a projected market size of US$6.3 Billion by the year 2026 trailing a compound annual growth rate (CAGR) of 5.9% over the analysis period. Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at 2.2% and 2.3% respectively over the analysis period. Within Europe, Germany is forecast to grow at approximately 2.8% CAGR. Low labor, service costs, easy access to skilled labor and enhanced service levels, have made Asia-Pacific a highly attractive outsourcing and MRO destination. Asian operators are driving maintenance, repair, and overhaul (MRO) growth with low-cost labor markets such as Vietnam and Thailand. Airline operators worldwide are currently outsourcing nearly 30% of wide-body heavy airframe maintenance needs to China and Asia­ Pacific region. The repatriation of wide-body heavy maintenance work is anticipated to create some revenue growth in stagnant MRO markets in North America and Western Europe.

 

The Line Maintenance Segment is to expected to reach $8.9 billion by 2026. Aircraft Line Maintenance involves inspection, identification and rectification of problem on the aircraft body. The process also comprises of crucial aircraft maintenance and regular repairs as per requirement. Line maintenance and planning which was preferred to be retained in-house accounts for a larger share of MRO outsourcing in recent years as several carriers are increasingly moving heavy and base maintenance work to the emerging regions, primarily in Asia, as they offer cheaper and efficient services. In the global Line Maintenance segment, USA, Canada, Japan, China and Europe will drive the 2.2% CAGR estimated for this segment. These regional markets accounting for a combined market size of US$5.5 Billion in the year 2020 will reach a projected size of US$6.4 Billion by the close of the analysis period. China will remain among the fastest growing in this cluster of regional markets. Led by countries such as Australia, India, and South Korea, the market in Asia-Pacific is forecast to reach US$1.2 Billion by the year 2026, while Latin America will expand at a 2.5% CAGR through the analysis period.

 

The Aviation Maintenance Group (AMG) predicts shortages for the next 10 years globally. This is supported by the Aviation Technician Education Council (ATEC, founded in 1961) 2021 Pipeline Report where ATEC concluded the shortage of Aviation Technicians will continue to be a global dynamic for the next 15 years.

 

Additional research by SOURCE Global Industry Analysts, Inc. shows that consumers in this industry primarily focus on the following factors when making purchasing decisions:

·Availability 

·Experience 

·Cost 

·Retention 

·Work History 

 

Once these criteria are met, the decision to utilize Job Aire Group is solely based on Job Aire Group's ability to provide. This condition will continue for the foreseeable future due to increasing global demand for maintenance specialists.


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JAG’s employees, which it leases to clients, specialize in:

·Contract Labor, Aircraft and Engine Inspection. 

· Audits. 

·Job Aire Group also provides hard-core aeronautical engineering, skilled personnel qualified in aircraft maintenance marketing. 

·Job Aire Group places aircraft into FAR 145 facilities for repair, refurbishment, painting, modification and overhaul. 

·Job Aire Group is well known for providing experienced and professional heavy transport aircraft maintenance technicians world-wide. 

·Job Aire Group services Foreign and Domestic 

 

MANAGEMENT TEAM

 

President - Nick Ammons, Strategic Program Manager with over 16 years of experience and expertise in overseeing US and Foreign government contracts, acquisitions, and project oversite. Past performance capabilities of managing an average caseload of 20 contracts at one time with a value of $800 million and pursuits on contracts worth up to $3.2 Billion. Experience and proven record for managing program life cycle from data gathering to contract award. Known for accurate DCAA & DCMA compliancy results. In depth knowledge of federal, state, and local regulations and policies. Overall ability to lead multiple diverse teams within the United States and abroad under a diverse group of civilian and government organizations.

Treasurer and CFO - Kent Hush, experienced financial executive with significant experience in federal banking and the private sector. Mr. Hush is a retired Federal Special Agent.

Chief Operations Officer - Courtney Jorden, has 12 plus years' experience as a policy analyst who worked into leadership roles within Social Security Administration demonstrating success with extensive knowledge of federal government policy, regulations, ability to detect fraud, mastery of management issues and Title II and Title XVI programs for the development and implementation of policies and regulations throughout the organization leading into business intelligence.

 

Senior Consultant - Norman Bradley, possesses an extensive understanding of numerous aviation sectors and is experienced in the procurement of government and civilian contracts.

 

MARKETS

 

We currently service only clients in the aviation MRO industry. According to the Federal Aviation Administration, contractors are a key solution to the MRO professional shortage the industry is facing.

 

Owing to the increasing number of both air travelers and aircraft fleet, the aviation MRO subsector has recently witnessed a strong demand for professionals, which is expected to last through 2024. According to a recent report by Global Industry Analysts Inc., engine overhaul, which is the most important aspect of aircraft upkeep, is witnessing the fastest growth followed by components maintenance.


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Unfortunately, the supply of MRO talent lags behind the demand. Although aviation schools have tried to keep up, there remains a wide gap between what's needed and what's on supply. Aviation companies are encouraged to turn to contract houses to fill any gaps. While not always an ideal option, contract workers allow airlines and other aviation players to fulfill short-term project needs, manage unpredictable workloads, fill positions for absentee employees, and fill temporary MRO gaps.

 

The estimated number of potential clients within the JAG's geographic scope.

·ST Engineering (TX & AL) 

·Fly Exclusive 

·ATS 

·STS 

·SNC 

·Collins Aerospace 

·Delta TechOps 

·FL Technics 

·UAB 

·GE Aviation 

·Singapore Technologies Engineering Ltd 

·ComAv 

·Defense contractors 

 

MARKET SEGMENTATION

 

A limited number of customers have accounted for a substantial portion of our revenue. For the period ending March 31, 2022, we had three customers that exceeded 10% of the Company’s revenue, accounting for approximately 97% of our total revenue.  For the years ending December 31, 2021 and 2020, we had three customers that exceeded 10% of our revenue, accounting for approximately 98% and 96% of our revenue, respectively. Our contracts with customers are typically annual, without obligation to renew upon expiration.  If one of our existing customers does not renew their contract with us, if our relationships with our largest customers are impaired or terminated, or if our customer seeks to renegotiate terms of their contracts on terms less favorable to us, our revenue could decline, and our results of operations would be adversely impacted.

 

MARKETING AND NEW SERVICES

Job Aire Group will promote sales and enhance recruitment using the following methods:

 

a.Expand on existing contracts. (All three of the major clients have request a 3- or 4-fold increase in employees 

b.Satellite office and strategic alliances with existing companies to provide logistical support. (First office in Mexico established April of 2022) 

c.Trade group associations 

d.Social media 

 

Job Aire Group is prepared to expand on existing contracts and add new services to the Maintenance, Repair and Overhaul (“MRO”) market:


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Staffing and management opportunities for growth:

a.Currently, JAG provides support in human resources and special skill requirements, DAR and DER engineering, plus drawing and drafting applications. 

b.Job Aire Group seeks to expand into additional areas within the general aviation and defense contractor sector. 

c.JAG seeks to establish a brick-and-mortar facility at the Benson Arizona Municipal Airport so that it can increase JAG's visibility within the airport service industry thus, providing a bridge in multiple service opportunities, including Fuel Base Operations (FBO).  JAG has a bid submitted for consideration to manage the Benson Municipal Airport. A favorable decision is expected in the next 90 days. 

 

As of March 31, 2022, Job Aire Group had 208 full-time employees, including 3 persons who are Job Aire’s executive management team. None of Job Aire’s employees are unionized workers.

 

Laws and Regulations that can Affect our Job Aire Group Business

 

Our business operates in a complex legal and regulatory environment due to a myriad of federal, state and local laws and regulations that impact our business. Below is a summary of what we believe are the most important legal and regulatory issues for our business. For additional information on the impact of these and other laws and regulations on our business and results of operations, refer to Part I, Item 1A. Risk Factors, of this Form 10-K, under the heading - "Legal and Compliance Risks".

 

Employer Status

We sponsor our employee benefit plan offerings as the employer of our WSEs under the Internal Revenue Code of 1986, as amended (the Code), ERISA and applicable state law. The term “employer” has different definitions for different purposes under the Code and ERISA, and for most purposes are interpreted under complex multi-factor tests under common law. We believe that we are an “employer” of our WSEs in the U.S. under the Code and the employer of our WSEs in the U.S. for the purposes of ERISA, as well as qualifying as an employer under various state laws, but this status could be subject to challenge by various regulators.

 

Health Insurance and Health Care Reform

 

Our sponsored employee health and welfare offerings are an important component of the services that we provide. The future of health care reform continues to evolve in the U.S. For example, the passage of the ACA in 2010 implemented sweeping health care reforms with staggered effective dates from 2010 through 2022, and many provisions in the ACA are still subject to the issuance of additional guidance from the DOL, the IRS, the U.S. Department of Health and Human Services and various U.S. states. Passage of the TCJA in 2017 eliminated the individual mandate tax penalty under the ACA beginning in 2019, while retaining employer ACA mandate obligations. States have developed, and will continue to develop, varying approaches to state-based health exchanges and mandates. Further significant changes to health care statutes, regulations and policy at the federal, state and local levels could occur in 2022 and beyond, including the potential further modification or amendment of the ACA, and we may need to adapt the manner in which we conduct our business as a result of any such changes.


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Data Privacy and Security Regulations

 

We collect, store, use, retain, disclose, transfer and otherwise process a significant amount of confidential, sensitive and personal information from and about our actual and potential clients, WSEs and corporate employees, and we are subject to a variety of federal, state and foreign laws, rules, and regulations in connection with such activities. We are also subject, among other applicable federal laws, rules and regulations, to the rules and regulations promulgated under the authority of the Federal Trade Commission. The U.S. Congress has considered, but not yet passed, several comprehensive federal data privacy bills over the past few years. Additionally, several federal agencies have issued rules, regulations or other forms of guidance that may impact the privacy and security obligations that apply to our operations. We expect that the federal government’s approach to data privacy and security will continue to evolve in the coming years.

 

At the state and local level, there is increased focus on regulating the collection, storage, use, retention, security, disclosure, transfer and other processing of confidential, sensitive and personal information. In recent years, we have seen significant changes to data privacy regulations across the U.S., including the enactment of the California Consumer Privacy Act of 2018 (CCPA), which went into effect in January 2020. The CCPA increases privacy rights for California residents and imposes obligations on companies that process their personal information, including an obligation to provide certain new disclosures to such residents. The CCPA provides for civil penalties for violations, as well as a private right of action for certain data breaches that result in the loss of personal information. This private right of action may increase the likelihood of, and risks associated with, data breach litigation. The CCPA was amended in September 2018 and October 2019, and further amendments may be enacted. In November 2020, California approved the California Privacy Rights Act (CPRA), which creates a new privacy oversight agency and further amends the CCPA to provide additional rights to consumers to access, edit and control the sale and sharing of personal information. The provisions of the CPRA go into effect in January 2023.

 

In 2021, two additional states—Virginia and Colorado—enacted comprehensive data privacy laws that will go into effect in 2023, while legislatures in several additional states considered data privacy laws. These laws impose, or have the potential to impose, additional obligations on companies that collect, store, use, retain, disclose, transfer and otherwise process confidential, sensitive and personal information, and will continue to shape the data privacy environment nationally. Although there are similarities between the data privacy laws enacted in California, Virginia and Colorado (along with the laws that have been proposed in other states), there are also substantive aspects of the laws that differ markedly. This lack of uniformity, which we expect to continue as other states enact data privacy laws, creates significant legal complexities for companies that operate nationwide and are required to comply with a patchwork of privacy laws. Moreover, all 50 U.S. states, the District of Columbia, Guam, Puerto Rico, the Virgin Islands and Canada have enacted data breach notification laws that may require us to notify WSEs, clients, employees, third parties or regulators in the event of unauthorized access to or disclosure of personal or confidential information. Complying with existing and new data privacy and security regulations could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business. Any failure to comply with existing and new data privacy and security regulations could result in significant penalties, damage our reputation and otherwise have a material adverse effect on our business.


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Payroll Taxes, Unemployment Taxes and Payroll Tax Credits

 

We must also comply with the federal and state payroll tax and unemployment tax requirements that apply where our clients are located. Tax reform efforts, and other payroll tax changes, at the federal, state and local level can impact our payroll tax reporting obligations. State unemployment tax rates vary by state based, in part, on prior years’ compensation and unemployment claims experience. As a result, depending on where clients are located, the fees we charge for unemployment taxes can be higher or lower than a client could obtain alone. In some cases, taxing authorities can retroactively increase the unemployment taxes we pay to cover deficiencies in the unemployment tax funds.

 

Other Employment Regulations

 

We must also comply with labor and employment laws, which can change frequently at the federal, state and local level. In particular, regulatory focus on the classification of employers, employees and independent contractors has the potential to significantly change how we and other similar staffing businesses operate and the services that we and these other companies can provide to our clients and WSEs. For example, in September 2019, California passed AB5, a law that could potentially reclassify client independent contractors as employees by establishing the ABC test to determine if a worker is an employee or independent contractor for most occupations. On September 30, 2021, and effective January 1, 2022, California expanded the number of occupations exempt from the ABC test. In November 2020, California voters passed Proposition 22, which supersedes AB5 for certain types of contractors. On August 20, 2021, a California state court found that portions of Proposition 22 were unconstitutional and further held that the entirety of Proposition 22 was unenforceable. Effective July 1, 2021, Alabama adopted the IRS’s 20-factor test to determine whether a worker is an employee or an independent contractor, while on August 1, 2021, Louisiana started using an 11-factor test under its unemployment law to determine worker classification.

 

The legal landscape is also in flux at the federal level. In 2020, the DOL issued a rule changing the definition of joint employer used under the Fair Labor Standards Act (FLSA) which was later rescinded in 2021. The National Labor Relations Board (NLRB) announced plans to create a new rule in 2022 for determining whether two businesses are joint employers under the National Labor Relations Act (NLRA), while the DOL plans to start on a new rule to raise the salary required for the executive, administrative and professional exemptions under the FLSA. We do not believe that we are, or will be, a joint employer under the FLSA rules, but the impact of new regulations like these could lead to increased legal claims against us or our clients, increase our compliance costs, or require changes to how we operate our business and the services we provide to our clients and WSEs.


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RISK FACTORS

 

An investment in our securities involves a high degree of risk.  You should not invest in our securities if you cannot afford to lose your entire investment. In deciding whether you should invest in our securities, you should carefully consider the following information together with all of the other information contained in this Current Report.  Any of the following risk factors can cause our business, prospects, financial condition or results of operations to suffer and you to lose all or part of your investment.

 

General Risks Relating to our Business, Operations, and Financial Condition

 

We have a limited operating history and are subject to the risks encountered by early-stage companies.

 

Because Colambda Technologies has a limited operating history, you should consider and evaluate our operating prospects in light of the risks and uncertainties frequently encountered by early-stage companies in rapidly evolving markets. For us, these risks include:

 

·risks that we may not have sufficient capital to achieve our growth strategy; 

 

·risks that we may not develop our product and service offerings in a manner that enables us to be profitable and meet our customers’ requirements; 

 

·risks that our growth strategy may not be successful; and 

 

·risks that fluctuations in our operating results will be significant relative to our revenues. 

 

These risks are described in more detail below. Our future growth will depend substantially on our ability to address these and the other risks described in this section.

 

We have a history of net losses, may incur substantial net losses in the future and may not achieve profitability.

 

Although we have begun to generate revenues, we have incurred significant losses since inception. We expect to incur increased costs to implement our business plan and increase revenues, such as costs relating to expanding our crowd funding platform into additional country markets. If our revenues do not increase to offset these additional expenses or if we experience unexpected increases in operating expenses, we will continue to incur significant losses and will not become profitable. If we are not able to significantly increase our revenues, we will likely not be able to achieve profitability in the future.

 

Our operating losses and working capital deficiency raise substantial doubt about our ability to continue as a going concern.  If we do not continue as a going concern, investors could lose their entire investment.

 

Our operating losses and working capital deficiency raise substantial doubt about our ability to continue as a going concern.  If we do not generate revenues, do not achieve profitability and do not have other sources of financing for our business, we may have to curtail or cease our development plans and operations, which could cause investors to lose the entire amount of their investment.


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If we lose the services of our founders or other members of our senior management team, we may not be able to execute our business strategy.

 

Our success depends in a large part upon the continued service of our senior management team. In particular, the continued service of our founders, David Riggs, Chief Executive Officer, Sumit Isaranggunlnaayudhya, Chief Technology Officer, Russell Kluwann, Chief Operating Officer and Kent Hush, Chief Financial Officer, is critical to our vision, strategic direction, culture, products and technology. We do not maintain key-man insurance for any of our founders or other members of our senior management team. The loss of any of our founders, even temporarily, or any other member of senior management could harm our business.

 

We may need additional financing.  Any limitation on our ability to obtain such additional financing could have a material adverse effect on our business, financial condition and results of operations.

 

There can be no assurance that we will not require additional capital and the raising of additional capital could result in dilution to our stockholders.  In addition, there is no assurance that we will be able to obtain additional capital if we need it, or that if available, it will be available to us on favorable or reasonable terms.  Any limitation on our ability to obtain additional capital as and when needed could have a material adverse effect on our business, financial condition and results of operations.

 

If we fail to maintain proper and effective internal controls, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating results, our ability to operate our business and investors’ views of us.

 

Ensuring that we have adequate internal financial and accounting controls and procedures in place so that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort that will need to be evaluated frequently.  Section 404 of the Sarbanes-Oxley Act requires public companies to conduct an annual review and evaluation of their internal controls.  Our failure to maintain the effectiveness of our internal controls in accordance with the requirements of the Sarbanes-Oxley Act could have a material adverse effect on our business.  We could lose investor confidence in the accuracy and completeness of our financial reports, which could have an adverse effect on the price of our common stock. In addition, if our efforts to comply with new or changed laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against us and our business may be harmed.

 

Risks Related Specifically to the Business of Emissions Zero Module

 

Increasing competition within our emerging industry could have an impact on our business prospects.

 

The alternative energy market is an emerging industry where new competitors are continuing to enter the market. These competing companies may have significantly greater financial and other resources than we have and may have been developing their products and services longer than we have been developing ours.  Increasing competition may have a negative impact on our profit margins.


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We may not be able to adequately protect our proprietary technology, and our competitors may be able to offer similar products and services, which would harm our competitive position.

 

Our success depends in part upon our proprietary technology. We rely primarily on trademark, copyright, service mark and trade secret laws, confidentiality procedures, license agreements and contractual provisions to establish and protect our proprietary rights. Despite these precautions, third parties could copy or otherwise obtain and use our technology without authorization, or develop similar technology independently. We cannot assure you that the protection of our proprietary rights will be adequate or that our competitors will not independently develop similar technology, duplicate our products and services or design around any intellectual property rights we hold.

 

If third parties claim that we infringe their intellectual property, it may result in costly litigation.

 

We cannot assure you that third parties will not claim our current or future products infringe their intellectual property rights. Any such claims, with or without merit, could cause costly litigation that could consume significant management time. As the number of product and services offerings in the crowd funding market increases and functionalities increasingly overlap, companies such as ours may become increasingly subject to infringement claims. Such claims also might require us to enter into royalty or license agreements. If required, we may not be able to obtain such royalty or license agreements, or obtain them on terms acceptable to us.

 

Many of our target customers are large commercial vehicle OEM customers and large volume customers, and the failure to obtain such customers, could have an adverse impact on our business. 

 

If any of our battery products fail to perform as expected, our ability to develop, market and sell our current products or future technology could be harmed. 

 

We operate in an extremely competitive industry and are subject to pricing pressures. Further, many other battery manufacturers have significantly greater resources than we have. 

 

Entering into strategic alliances and relying on third-party manufacturing, including from suppliers of components we include in our finished products, exposes us to risks. 

 

We are dependent on our suppliers to fulfill our customers’ orders, and if we fail to manage our relationships effectively with, or lose the services of, these suppliers and we cannot substitute suitable alternative suppliers, our operations would be materially adversely affected. 

 

Increases in costs, disruption of supply or shortage of any of our battery components, such as battery cells, electronic and mechanical parts, or raw materials used in the production of such parts, could harm our business. 

 

Our failure to keep up with rapid technological changes and evolving industry standards may cause our products to become obsolete and less marketable, resulting in loss of market share to our competitors or a decrease in demand for our battery packs and modules due to substitute products. 

 

If we cannot continue to develop new products in a timely manner and at favorable margins, we may not be able to compete effectively. 

 

Developments in alternative technology may adversely affect the demand for our battery modules. 


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Manufacturing or use of our products may cause accidents, which could result in significant production interruption, delay or claims for substantial damages. 

 

We may become subject to product liability claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims. 

 

Future product recalls could materially adversely affect our business, future prospects, financial condition and operating results. 

 

Third-party claims or litigation alleging infringement of patents or infringement or misappropriation of other proprietary rights, or seeking to invalidate our patents may adversely affect our business. 

 

We are currently dependent on a single assembly facility. If our facility becomes inoperable, we will be unable to produce our battery products and our business will be harmed. 

 

Our efforts to increase the scale and capacity of our assembly processes and systems, could be disruptive to our operations and adversely affect our results of operations and financial condition. 

 

We may be unable to successfully expand our operations or manage our growth effectively. 

 

Our operations are subject to a variety of environmental, health and safety rules that can bring scrutiny from regulatory agencies and increase our costs. 

 

We rely on information technology and any failure, inadequacy, interruption or security lapse of that technology, including any cybersecurity incidents, could harm our ability to operate our business effectively. 

 

Risks Specifically Related to the Business of Job Aire Group

 

Our business and results of operations have been, and our financial condition may be, impacted by the outbreak of COVID-19 and such impact could be materially adverse.

 

The global spread of COVID-19 created significant volatility, uncertainty and economic disruption. In the United States and globally, governmental authorities instituted certain preventative measures, including border closures, travel restrictions, operational restrictions on certain businesses, shelter-in-place orders, quarantines and recommendations to practice social distancing. These restrictions disrupted and may continue to disrupt economic activity, resulting in reduced commercial and consumer confidence and spending, increased unemployment, closure or restricted operating conditions for businesses, volatility in the global capital markets, instability in the credit and financial markets, labor shortages, regulatory recommendations to provide relief for impacted consumers, disruption in supply chains, and restrictions on many hospitality and travel industry operations.

 

The extent to which the coronavirus pandemic may impact our business, operations, and financial results in the future is uncertain and will depend on future developments, including the duration or recurrence, of the pandemic, the related length and severity of its impact on the U.S. and global economy, and the continued governmental, business and individual actions taken in response to the pandemic and economic disruption.


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Actual and potential impact on clients and prospects

 

Since the aviation industry is considered an essential industry in the context of the pandemic, the change in the economic environment due to the COVID-19 pandemic has not had a material adverse economic impact on our business. We have not experienced significant impacts seen across other industries such as frozen headcount, furloughed or terminated employees, or partially or completely shut down business operations.

 

Actual and potential impact of the laws affecting our industry and clients

 

New laws and programs have been enacted, and may continue to be enacted, at every level of government to help the economy, employers and employees. For example, the 2020 FFCRA and CARES Act and the 2021 PPPFA and ARPA, and subsequent agency guidance related to those acts, created the paycheck protection program (PPP), mandatory employee leave requirements, payroll tax deferral and tax credit programs, COBRA premium assistance facilitated via employer payroll tax credits, and other employment- and employment tax-related incentives.

 

Most of these laws and programs have not been, and we do not anticipate will be, enacted with the employee leasing industry in mind. As a result, we cannot guarantee we will be able to support any of these laws and programs in a timely and cost-effective manner or at all, which could reduce or eliminate the attractiveness of our services and/or affect the ability of our clients and WSEs to fully realize the benefits of these laws and programs, which would have a material adverse effect on our business, financial condition and results of operations

 

Our business, services, and financial condition may be adversely impacted by changes in government regulations and policies.

 

The services we provide to our clients are subject to numerous complex federal, state and local laws and regulations. These laws and regulations cover a diverse range of topics, including employer status, employee and independent contractor classifications, employee benefits, health and retirement plans, workers' compensation, employment and payroll tax, worksite safety, insurance and banking, wage and hour, anti-discrimination, and many topics specific to the industries of our clients. Many of these laws do not specifically address employee leasing relationships, and regulators are often unfamiliar with the employee leasing industry, which can lead to unpredictable application, interpretation and enforcement of these laws and regulations at the federal, state and local levels in relation to our business. Many of our services are designed according to government regulations that often change. Changes in regulations could affect the extent and type of benefits employers are required, or may choose, to provide employees or the amount and type of taxes employers and employees are required to pay. Such changes could reduce or eliminate the need for some of our services and substantially decrease our revenue. Added requirements could also increase our cost of doing business.

The definition of employers, employees and independent contractors is evolving. Changes to the laws and regulations that govern what it means to be an employer or an employee may require us to make significant changes in our operations and may negatively affect our business.

 

National views on employers, employees and independent contractors are changing at a rapid rate, as evidenced by recent federal and state rule changes. In September 2019, California passed AB5, a law that could potentially reclassify client independent contractors as employees. In November 2020, California voter passed Proposition 22, which supersedes AB5 for certain types of contractors. On August 20, 2021, a California state court found that portions of Proposition 22 were unconstitutional and further held that the


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entirety of Proposition 22 was unenforceable. Changes like these to the rules in any jurisdiction that define when a worker is an employee or independent contractor can increase or decrease the pool of WSEs that we can employ and include in our sponsored benefit plans, which may negatively impact client demand for the services we provide, require us to modify or change how we operate our business and have a material adverse effect on our business and results of operations.

 

The examples above highlight the impact to our business when regulations regarding the definitions or classification of employers, employees, independent contractors and other groups of workers change. Any such regulatory changes could affect the way in which we provide sponsored benefits to our WSEs, the way in which we report and remit payroll taxes to tax authorities, and our legal liability for the actions and inactions of our clients. Any of such regulatory changes could also require us to change the manner in which we operate our business, or provide our services, and could have an adverse effect on our business and results of operations.

 

Our business and reputation may be adversely impacted if we fail to comply with U.S. and foreign laws and regulations.

 

Our services are subject to various laws and regulations, including, but not limited to, the ACA and anti-money laundering rules. The enactment of new laws and regulations, modifications of existing laws and regulations, or the adverse application or interpretation of new or existing laws or regulations can adversely affect our business. Failure to update our services to comply with modified or new legislation in the area of health care reform as well as failure to educate and assist our clients regarding this legislation could adversely impact our business reputation and negatively impact our client base. Failure to comply with laws and regulations could result in the imposition of consent orders or civil and criminal penalties, including fines, which could damage our reputation and have an adverse effect on our results of operations or financial condition.

 

We may not be able to keep pace with changes in technology or provide timely enhancements to our products and services.

 

The market for our products is characterized by rapid technological advancements, changes in customer requirements, frequent new product introductions, and enhancements and changing industry standards. To maintain our growth strategy, we must adapt and respond to technological advances and technological requirements of our clients. Our future success will depend on our ability to: enhance our current products and introduce new products in order to keep pace with products offered by our competitors; enhance capabilities and increase the performance of our internal systems, particularly our systems that meet our clients’ requirements; and adapt to technological advancements and changing industry standards. We continue to make significant investments related to the development of new technology. If our systems become outdated, it may negatively impact our ability to meet performance expectations related to quality, time to market, cost and innovation relative to our competitors. The failure to provide more efficient and user-friendly customer-facing digital experience across internet and mobile platforms as well as in physical locations may adversely impact our business and operating results. There can be no assurance that our efforts to update and integrate systems will be successful. If we do not integrate and update our systems in a timely manner, or if our investments in technology fail to provide the expected results, there could be a material adverse effect to our business and results of operations. The failure to continually develop enhancements and use of technologies such as robotics and other workflow automation tools, natural language processing, and artificial intelligence/machine learning may impact our ability to increase the efficiency of and reduce costs associated with operational risk management and compliance activities.


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We could be subject to reduced revenues, increased costs, liability claims, or harm to our competitive position as a result of cyberattacks, security vulnerabilities or Internet disruptions.

 

We rely upon information technology (“IT”) networks, cloud-based platforms, and systems to process, transmit, and store electronic information, and to support a variety of business processes, some of which are provided by third-party vendors. Cyberattacks and security threats are a risk to our business and reputation. A cyberattack, unauthorized intrusion, malicious software infiltration, network disruption or outage, corruption of data, or theft of personal or other sensitive information, could have a material adverse effect on our business operations or that of our clients, result in liability or regulatory sanction, or cause harm to our business and reputation and result in a loss in confidence in our ability to serve clients all of which could have a material adverse effect on our business. The rapid speed of disruptive innovations involving cyberattacks, security vulnerabilities and Internet disruptions enabled by new and emerging technologies may outpace our organization's ability to compete and/or manage the risk appropriately. In addition, cybercriminals may seek to exploit the disruption caused by the COVID-19 pandemic by attempting to engage in payment-related fraud or by more frequently attempting to gain access to our systems through phishing or other means that may be more successful when most of our employees are working remotely.

 

Data Security and Privacy Leaks: We collect, use, and retain increasingly large amounts of personal information about our clients, employees of our clients, and our employees, including: bank account numbers, credit card numbers, social security numbers, tax return information, health care information, retirement account information, payroll information, system and network passwords, and other sensitive personal and business information. At the same time, the continued occurrence of high-profile cyber-attacks and data breaches provides evidence of an external environment increasingly hostile to information security. We may be particularly targeted for cyber-attack because of the amount and type of personal and business information that we collect, use, and retain. Vulnerabilities, threats, and more sophisticated and targeted computer crimes pose a risk to the security of our systems and networks, and the confidentiality, availability, and integrity of our data.

 

Data Loss and Business Interruption

 

If our systems are disrupted or fail for any reason, including Internet or systems failure, or if our systems are infiltrated by unauthorized persons, both the Company and our clients could experience data loss, financial loss, harm to reputation, or significant business interruption. Hardware, applications and services, including cloud-based services, that we procure from third-party vendors may contain defects in design or other problems that could compromise the integrity and availability of our services. Any delays or failures caused by network outages, software or hardware failures, or other data processing disruptions, could result in our inability to provide services in a timely fashion or at all. We may be required to incur significant costs to protect against damage caused by disruptions or security breaches in the future. Such events may expose us to unexpected liability, litigation, regulatory investigation and penalties, loss of clients’ business, unfavorable impact to business reputation, and there could be a material adverse effect on our business and results of operations.

 

Our reputation, results of operations, or financial condition may be adversely impacted if we fail to comply with data privacy laws and regulations.

 

Our services require the storage and transmission of proprietary and confidential information of our clients and their employees, including personal or identifying information, as well as their financial and payroll data. Our applications are subject to various complex government laws and regulations on the federal, state, and local levels, including those governing personal privacy. In the U.S., we are subject to rules and regulations promulgated under the authority of the Federal Trade Commission, the Health Insurance


22


Portability and Accountability Act of 1996, the Family Medical Leave Act of 1993, the ACA, federal and state labor and employment laws, and state data breach notification and data privacy laws, such as the California Consumer Protection Act, which became effective on January 1, 2020. Failure to comply with such laws and regulations could result in the imposition of consent orders or civil and criminal penalties, including fines, which could damage our reputation and have an adverse effect on our results of operations or financial condition. The regulatory framework for privacy issues is rapidly evolving and future enactment of more restrictive laws, rules, or regulations and/or future enforcement actions or investigations could have a materially adverse impact on us through increased costs or restrictions on our business and noncompliance could result in regulatory penalties and significant legal liability.


23


 

In the event of a catastrophe, our business continuity plan may fail, which could result in the loss of client data and adversely interrupt operations.

 

Our operations are dependent on our ability to protect our infrastructure against damage from catastrophe or natural disaster, severe weather including events resulting from climate change, unauthorized security breach, power loss, telecommunications failure, terrorist attack, public health emergency, or other events that could have a significant disruptive effect on our operations. We have a business continuity plan in place in the event of system failure due to any of these events. Our business continuity plan has been tested in the past by circumstances of severe weather, including hurricanes, floods, and snowstorms, and has been successful. However, these past successes are not an indicator of success in the future. If the business continuity plan is unsuccessful in a disaster recovery scenario, we could potentially lose client data or experience material adverse interruptions to our operations or delivery of services to our clients.

 

We may be adversely impacted by any failure of third-party service providers to perform their functions.

 

As part of providing services to clients, we rely on a number of third-party service providers. These service providers include, but are not limited to, couriers used to deliver client payroll checks and banks used to electronically transfer funds from clients to their employees. Failure by these service providers, for any reason, to deliver their services in a timely manner and in compliance with applicable laws and regulations could result in material interruptions to our operations, impact client relations, and result in significant penalties or liabilities to us.

Adverse changes in our insurance coverage, or in our relationships with key insurance carriers, could harm our business.

 

Our success depends in part on our ability to maintain competitive health and workers' compensation coverage options and insurance rates through well-known insurance carriers. If we are unable to maintain competitive insurance rates or obtain popular and desirable coverage plans through well-known insurance carriers, it could affect our ability to attract and retain employees, which could have a material adverse effect on our business. Where we sponsor insurance coverage and we are not responsible for any deductibles, our carriers set the fixed cost of the plan, which may lead to uncompetitive fees.

 

In addition, broad adoption of our services in certain geographic regions or industries may make it more difficult for us to obtain competitive health and/or workers' compensation insurance rates due to concentration of employees within a particular region. The loss of any one or more of our key insurance vendors in these areas, or our inability to partner with certain vendors that are better-known or more desirable to our employees or potential employees, could have a material adverse effect on our financial condition and results of operations.

 

We may be adversely impacted by volatility in the political and economic environment.

 

A majority of our workforce is hired through the TN visa process which is a result of the USMCA.  If the US Government changes or cancels the agreement with Mexico and Canada for free trade it will adversely affect our ability to attract and retain our current workforce. Furthermore, trade, monetary and fiscal policies, and political and economic conditions may substantially change, and credit markets may experience periods of constriction and variability. These conditions may impact our business due to lower transaction volumes or an increase in the number of clients going out of business. Current or potential clients may decide to reduce their spending on payroll and other outsourcing services. In addition, new business formation may be affected by an inability to obtain credit.


24


 

We may not be able to attract and retain qualified people, which could impact the quality of our services and customer satisfaction.

 

Our success, growth, and financial results depend in part on our continuing ability to attract, retain, and motivate highly qualified people at all levels, including management, technical, compliance, and sales personnel. Competition for these individuals can be intense, and we may not be able to retain our key people, or attract, assimilate, or retain other highly-qualified individuals in the future, which could harm our future success.

 

In the event we receive negative publicity, our reputation and the value of our brand could be harmed, which may have a material adverse effect on our business. Negative publicity relating to events or activities attributed to us, our corporate employees, or others associated with us, whether or not justified, may tarnish our reputation and reduce the value of our brand. If we are unable to maintain quality solutions, our reputation with our clients may be harmed and the value of our brand may diminish. In addition, if our brand is negatively impacted, it may have a material adverse effect on our business, including challenges retaining clients or attracting new clients and recruiting talent and retaining employees.

 

Risks Relating to our Securities

 

Because the Share Exchange will result in a deemed a reverse acquisition, we may not be able to attract the attention of major brokerage firms, which may limit the liquidity of our Common Stock and may make it more difficult for us to raise additional capital in the future.

 

Additional risks may exist because the Share Exchange will be considered a “reverse acquisition” under accounting and securities regulations. Certain SEC rules are more restrictive when applied to reverse acquisition companies, such as the ability of stockholders to resell their shares of Common Stock pursuant to Rule 144. In addition, securities analysts of major brokerage firms may not provide coverage of our Common Stock following the Share Exchange because there may be little incentive for brokerage firms to recommend the purchase of our Common Stock. As a result, our Common Stock may have limited liquidity and investors may have difficulty selling it. In addition, we cannot assure you that brokerage firms will want to conduct any secondary offerings on our behalf if we seek to raise additional capital in the future. Our inability to raise additional capital may have a material adverse effect on our business.

 

There is not now, and there may not ever be, an active market for the Company’s Common Stock.

 

There currently is no active public market for our Common Stock.  Further, although our Common Stock is currently quoted on the OTC Bulletin Board (the “OTCBB”) and on the OTC Markets QB Tier, trading of our Common Stock is sporadic and by appointment only.  Trading may continue to be extremely sporadic.  For example, several days may pass before any shares may be traded.  As a result, an investor may find it difficult to dispose of, or to obtain accurate quotations of the price of our Common Stock.  Accordingly, investors must assume they may have to bear the economic risk of an investment in our Common Stock for an indefinite period of time.  There can be no assurance that a more active market for the Common Stock will develop, or if one should develop, there is no assurance that it will be sustained.  This severely limits the liquidity of our Common Stock, and would likely have a material adverse effect on the market price of our Common Stock and on our ability to raise additional capital.


25


 

We cannot assure you that the Common Stock will become liquid or that it will be listed on a securities exchange.

 

Until our Common Stock is listed on a national securities exchange such as the New York Stock Exchange or the Nasdaq Stock Market, we expect our Common Stock to remain eligible for quotation on the OTCBB and OTC Markets QB Tier.  In those venues, however, an investor may find it difficult to obtain accurate quotations as to the market value of our Common Stock.  In addition, if we fail to meet the criteria set forth in SEC regulations, various requirements would be imposed by law on broker-dealers who sell our securities to persons other than established customers and accredited investors.  Consequently, such regulations may deter broker-dealers from recommending or selling our Common Stock, which may further affect the liquidity of the Common Stock.  This would also make it more difficult for us to raise capital.

 

Our Common Stock is deemed a Penny Stock

 

Our Common Stock is subject to the “penny stock” rules of the SEC and the trading market in the securities is limited, which makes transactions in the stock cumbersome and may reduce the value of an investment in the stock.

 

The SEC 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 SEC 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 common stock and cause a decline in the market value of stock.


26


 

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.

 

The price of our Common Stock may become volatile, which could lead to losses by investors and costly securities litigation.

 

The trading price of our Common Stock is likely to be highly volatile and could fluctuate in response to factors such as:

 

·actual or anticipated variations in our operating results; 

 

·announcements of developments by us or our competitors; 

 

·announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments; 

 

·adoption of new accounting standards affecting our Company’s industry; 

 

·additions or departures of key personnel; 

 

·sales of our Common Stock or other securities in the open market; and 

 

·other events or factors, many of which are beyond our control. 

 

The stock market is subject to significant price and volume fluctuations. In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been initiated against the company. Litigation initiated against us, whether or not successful, could result in substantial costs and diversion of our management’s attention and resources, which could harm our business and financial condition.

 

We do not anticipate dividends to be paid on our Common Stock, and investors may lose the entire amount of their investment.

 

Cash dividends have never been declared or paid on the Common Stock, and we do not anticipate such a declaration or payment for the foreseeable future. We expect to use future earnings, if any, to fund business growth. Therefore, stockholders will not receive any funds absent a sale of their shares. We cannot assure stockholders of a positive return on their investment when they sell their shares, nor can we assure that stockholders will not lose the entire amount of their investment.


27


 

If securities analysts do not initiate coverage or continue to cover our Common Stock or publish unfavorable research or reports about our business, this may have a negative impact on the market price of our common stock.

 

The trading market for the Common Stock will depend on the research and reports that securities analysts publish about our business and the Company. We do not have any control over these analysts. There is no guarantee that securities analysts will cover the Common Stock. If securities analysts do not cover the Common Stock, the lack of research coverage may adversely affect its market price. If we are covered by securities analysts, and our stock is the subject of an unfavorable report, our stock price and trading volume would likely decline. If one or more of these analysts ceases to cover the Company or fails to publish regular reports on the Company, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.

 

You may experience dilution of your ownership interests because of the future issuance of additional shares of the Common Stock.

 

In the future, we may issue our authorized but previously unissued equity securities, resulting in the dilution of the ownership interests of our present stockholders and the purchasers of Common Stock offered hereby.  We are currently authorized to issue an aggregate of 200,000,000 shares of Common Stock.  As of the closing of the Share Exchange, there will be 110,695,000 shares of our Common Stock outstanding.   We may also issue additional shares of our Common Stock or other securities that are convertible into or exercisable for our Common Stock in connection with hiring or retaining employees, future acquisitions, future sales of its securities for capital raising purposes, or for other business purposes.  The future issuance of any such additional shares of our Common Stock may create downward pressure on the trading price of the Common Stock.  There can be no assurance that we will not be required to issue additional shares, warrants or other convertible securities in the future in conjunction with any capital raising efforts, including at a price (or exercise prices) below the price at which shares of the Common Stock will be initially quoted on the OTCBB and the OTC Markets QB Tier.

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

 

The following management’s discussion and analysis should be read in conjunction with the historical financial statements and the related notes thereto contained in this report. The management’s discussion and analysis contains forward-looking statements, such as statements of our plans, objectives, expectations and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect” and the like, and/or future tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including those under “Risk Factors” in this Form 8-K, that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. The Company’s actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors. The Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this report.

 

As the result of the Share Exchange and the change in business and operations of the Company, the historical financial results of the Company are considered to be that of Emissions Zero Module (“EZM”) and its wholly owned subsidiary Job Aire Group (“JAG”), the accounting acquirer.


28


The following discussion highlights EZM and JAG’s results of operations and the principal factors that have affected our financial condition as well as our liquidity and capital resources for the periods described, and provides information that management believes is relevant for an assessment and understanding of the statements of financial condition and results of operations presented herein. The following discussion and analysis are based on EZM and JAG’s audited and unaudited financial statements contained in this Current Report, which we have prepared in accordance with United States Generally Accepted Accounting Principles. You should read this discussion and analysis together with such financial statements and the related notes thereto.

 

Basis of Presentation

 

The audited financial statements for our fiscal years ended December 31, 2021 and 2020, and the unaudited financial statements for the three months ended March 31, 2022, include a summary of our significant accounting policies and should be read in conjunction with the discussion below. In the opinion of management, all material adjustments necessary to present fairly the results of operations for such periods have been included in these audited financial statements.

 

Going Concern

 

The accompanying consolidated financial statements have been prepared assuming we will continue as a going concern. As discussed in this Current Report and in the notes to the consolidated financial statements, we have incurred operating losses from inception, and at March 31, 2022, we have working capital of approximately $474,914. These factors raise substantial doubt about our ability to continue as a going concern.  Additionally, our independent registered public accounting firm included an explanatory paragraph in their report for the years ended December 31, 2021 and 2020 regarding concerns about our ability to continue as a going concern.

 

Our ability to continue as a going concern is dependent upon our generating operating cash flow and raising capital sufficient to fund operations.  We have discussed our strategy and plans relating to these matters elsewhere in this Current Report although the consolidated financial statements included herein do not include any adjustments that might result from the outcome of these uncertainties.  We expect that with the successful closing of future financing vehicles, we will be able to fund ongoing operations and accelerate our growth for the next twelve months.  Our business strategy may not be successful in addressing these issues, however, and if we cannot continue as a going concern, our stockholders may lose their entire investment in us.

 

Critical Accounting Estimates

 

We regularly evaluate the accounting estimates that we use to prepare our financial statements. A complete summary of these policies is included in the Notes to our audited financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

 

We believe that of our significant accounting policies, which are described in note 2 to our consolidated financial statements, the following accounting policies involve a greater degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our financial condition and results of operations.


29


 

Revenue Recognition

 

For the twelve months ended December 31, 2021 and 2020, the Company did not earn revenues.  As a result of the acquisition of Job Aire Group during the interim period ending March 31, 2022, all of our revenue is generated through our wholly owned subsidiary, Job Aire Group.

 

Revenue generated through the business of Job Aire Group is typically characterized by long-term client relationships that result in recurring revenue. Our services are provided under written price quotations or service agreements having varying terms and conditions.  Revenue is recognized in the period services are rendered and earned under service arrangements with clients where service fees are fixed or determinable and collectability is reasonably assured. Our service revenue is largely attributable to processing services where the fee is based on a fixed amount per processing period or a fixed amount per processing period plus a fee per employee or transaction processed.  We do not receive advance payments for set-up fees from our clients.

 

We are continuously in the process of performing implementation services for new clients. Depending on the service agreement and/or the size of the client, the installation or conversion period for new clients can vary from a short period of time for a small Employer Services client (as little as 24 hours) to a longer period for a large Employer Services client with multiple deliverables (generally three to six months).  Although we monitor sales that have not yet been installed, we do not view this metric as material to an understanding of our overall business in light of the recurring nature of our business. This metric is not a reported number, but it is used by management as a planning tool to allocate resources needed to install services, and as a means of assessing our performance against the expectations of our clients.


30


 

Results of Operations for the three months ended March 31, 2022 and 2021

 

Emissions Zero Module, Inc.

Statements of Operations

 

 

 

Three Months

 

Three Months

 

 

March 31

 

March 31

 

 

2022

 

2021

 

 

 

 

 

Sales

 

$3,802,402  

 

$ 

Cost of Sales

 

3,433,382  

 

 

 

 

 

 

 

Gross profit

 

369,020  

 

 

 

 

 

 

 

General and administrative expenses:

 

 

 

 

Salaries

 

105,711  

 

 

Depreciation and Amortization

 

2,300  

 

 

Legal and professional fees

 

80,309  

 

30,000  

Marketing and Advertising

 

3,464  

 

 

Research and Development

 

4,741  

 

10,000  

Taxes

 

4,240  

 

 

Other general and administrative

 

193,912  

 

 

Total operating expenses

 

394,678  

 

40,000  

(Loss) from operations

 

(25,658) 

 

(40,000) 

 

 

 

 

 

Other income (expense):

 

 

 

 

Interest income

 

 

 

 

Forgiven debt

 

 

 

 

Interest (expense)

 

(35,507) 

 

(1,088) 

(Loss) before taxes

 

(61,165) 

 

(41,088) 

 

 

 

 

 

Provision (credit) for taxes on income

 

 

 

 

Net (loss)

 

$(61,165) 

 

$(41,088) 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per common share

 

$(0.00) 

 

$(0.00) 

 

 

 

 

 

Weighted average number of shares outstanding

  

12,481,724  

 

166,600,000  

 

Revenues

 

Total revenue for the three months ended March 31, 2022 and 2021 was $3,802,402 and $0, respectively.  Revenue was generated solely through the Company’s wholly owned subsidiary, Job Aire Group. A limited number of customers have accounted for a substantial portion of our revenue. For the period ending March 31, 2022, we had three customers that exceeded 10% of the Company’s revenue, accounting for 97% of our revenue. Our contracts with customers are typically annual, without obligation to renew upon expiration.  If one of our existing customers does not renew their contract with us, if our relationships with our largest customers are impaired or terminated, or if our customer seeks to renegotiate terms of their contracts on terms less favorable to us, our revenue could decline, and our results of operations would be adversely impacted.


31


 

Our business is typically characterized by long-term client relationships that result in recurring revenue. Our services are provided under written price quotations or service agreements having varying terms and conditions.  Service revenue is recognized in the period services are rendered and earned under service arrangements with clients where service fees are fixed or determinable and collectability is reasonably assured. Our service revenue is largely attributable to processing services where the fee is based on a fixed amount per processing period or a fixed amount per processing period plus a fee per employee or transaction processed.

 

We are continuously in the process of performing implementation services for new clients. Depending on the service agreement and/or the size of the client, the installation or conversion period for new clients can vary from a short period of time for a small Employer Services client (as little as 24 hours) to a longer period for a large Employer Services client with multiple deliverables (generally three to six months).  Although we monitor sales that have not yet been installed, we do not view this metric as material to an understanding of our overall business in light of the recurring nature of our business. This metric is not a reported number, but it is used by management as a planning tool to allocate resources needed to install services, and as a means of assessing our performance against the expectations of our clients.

 

Gross Profit

 

The company had gross profit of $369,020 and $0, for the three months ended March 31, 2022 and 2021, respectively.

 

Selling, General and Administrative Expenses

 

Selling, General and Administrative expenses in the first quarter of 2022 amounted to $394,678 and increased significantly compared to the same period in 2021. The increase was primarily due to an increase in payroll expenses, accounting, and legal fees associated with going public.

 

We anticipate that Selling, General and Administrative expenses will increase in dollar amount and increase as a percentage of revenue in 2023 compared to 2022 as a result of growth in headcount and headcount-related expenses in Job Aire Group. We plan to continue to increase employee headcount to support our growth and anticipate the inclusion of share-based compensation expenses.

 

Our selling, general and administrative expenses are consisted primarily of finance, legal, human resources, facilities, and other supporting administrative expenses.

 

Research and development

 

Research and development expenses in the first quarter of 2022 decreased by $5,259 compared to the same period in 2021. The decrease was primarily due to the completion of the EZM and EZB prototypes in 2021. Our products are now being evaluated under a long-term evaluation.

 

We anticipate that research and development expenses will, however, continue as a result of the expansion plans to other markets and the new products we aim to develop and introduce to the market in the future.

 

Liquidity and Capital Resources

 

As of March 31, 2022, we had cash on hand of $784,016, accounts receivable of $1,539,919, and working capital of $474,914.


32


Our principal sources of liquidity have been cash generated by issuing new shares in EZM (pre-merger) and cash generated from JAG operations.

 

Our liquidity position in 2022 increased as compared to the prior year by approximately $1,681,027. This increase in cash can be attributed to the operations of JAG for the year.

 

In order to be able to achieve our strategic goals, we need to further expand our business and financing activities. The Company is seeking to acquire a location for a pilot production plant, intended to be a small-scale production plant for the EZM and EZB products. Expanding our national network and marketing in Job Aire Group, together with continued research and development costs associated with bringing the EZM product(s) to market, will require significant future capital and liquidity expansion.

 

We plan to continue raising capital in order to meet our liquidity needs. However, we may be unable to raise sufficient additional capital when we need it or to raise capital on favorable terms. If we are unable to obtain adequate funds on reasonable terms, we may be required to significantly curtail or discontinue operations or obtain funds by entering into financing agreements on unattractive terms.

 

Cash Flow

 

The following table summarizes our cash flows for the periods indicated below:

 

 

For the
Three Months Ended March 31, 2022

Cash used in operating activities

(34,246)

Cash provided by investing activities

173,354

Cash used in financing activities

(0)

 

Cash Used in Operating Activities

 

During the three months ended March 31, 2022, we had cash used in operating activities of $34,246, which primarily reflects our net income for the period adjusted by non-cash charges.

 

Cash Provided by Investing Activities

 

During the three months ended March 31, 2022, cash provided by investing activities was $173,354, reflecting the cash balance of Job Aire Group on the day of acquisition.

 

Cash Provided by Financing Activities

 

During the three months ended March 31, 2022, no cash was provided by or used in financing activities.

 

Emissions Zero Module, Inc,

Results of Operations for the twelve months ended December 31, 2021 and 2020

 

The acquisition of Job Aire Group did not occur until the interim period ending March 31, 2022.  The discussion below relates to results of operations from our audited financial statements for the years ended December 31, 2021 and 2020 and therefore reflects the operational activity of Emissions Zero Module only.


33


 

Emissions Zero Module, Inc.

Statements of Operations

 

 

Year Ended

 

Year Ended

 

 

December 31

 

December 31

 

 

2021

 

2020

 

 

(Audited)

 

(Audited)

 

 

 

 

 

Sales

 

$ 

 

$- 

Cost of Sales

 

 

 

- 

 

 

 

 

 

Gross profit

 

 

 

- 

 

 

 

 

 

General and administrative expenses:

 

 

 

 

Legal and professional fees

 

248,055  

 

- 

Consulting

 

62,000  

 

- 

Research and Development

 

75,772  

 

- 

Other general and administrative

 

65,580  

 

- 

Total operating expenses

 

451,407  

 

- 

(Loss) from operations

 

(451,407) 

 

- 

 

 

 

 

 

Other income (expense):

 

 

 

 

Interest income

 

 

 

- 

Forgiven debt

 

 

 

- 

Interest (expense)

 

(60,652) 

 

- 

(Loss) before taxes

 

(512,059) 

 

- 

 

 

 

 

 

Income Tax Expense

 

 

 

- 

Net (loss)

 

$(512,059) 

 

$- 

 

 

 

 

 

Basic earnings (loss) per common share

 

$ 

 

$- 

 

 

 

 

 

Weighted average number of shares outstanding

  

166,600,000  

 

- 

 

Revenues

 

The Company had no revenues for the years ended December 31, 2021 or 2020.

 

Gross Profit

 

The company had no gross profit or loss for the years ended December 31, 2021 and 2020.

 

Selling, General, and Administrative Expenses

 

General, and administrative expenses for the years ended December 31, 2021 and 2020 were $451,407 and $0, respectively.  The company had no expenses for the year ending December 31, 2020. For the year ended December 31, 2021, the G&A expenses included legal and professional fees, consulting fees, and research and development expenses.


34


Our selling, general and administrative expenses are consisted primarily of finance, legal, human resources, facilities, and other supporting administrative expenses.

 

Operating Loss

 

We realized an operating loss of $451,407 before interest expense, for the year ended December 31, 2021. The company had no operations for the year ended December 31, 2020.

 

Interest Expense

 

Interest expense for the year ended December 31, 2021 was $60,652. The Company had no operations for the year ended December 31, 2020.

 

Net Loss

 

We incurred a net loss of $512,059 for the year ended December 31, 2021. The Company had no operations for the year ended December 31, 2020.

 

Research and development

 

Research and development expenses for the twelve months ended 2021 were $75,772. We expense substantially all of our research and development costs as they are incurred.

 

We anticipate that research and development expenses will, however, continue as a result of the expansion plans to other markets and the new products we aim to develop and introduce to the market in the future.

 

Liquidity and Capital Resources

 

We incurred a net loss for the year ended December 31, 2021 and had an accumulated deficit of $512,059 at December 31, 2021. At December 31, 2021, we had a cash balance of $642,908 and a working capital of $795,093. The Company’s existing and available capital resources are not sufficient to satisfy our funding requirements through one year from the date of this filing in the absence of share issuances or other sources of financing.

 

We have not been able to generate sufficient cash from operating activities to fund our ongoing operations. Since our inception, we have raised capital through private sales of common stock and debt securities.

 

We will be required to raise additional funds through public or private financing, additional collaborative relationships or other arrangements until we are able to raise revenues to a point of positive cash flow. We are evaluating various options to further reduce our cash requirements to operate at a reduced rate, as well as options to raise additional funds, including obtaining loans and selling common stock. There is no guarantee that we will be able to generate enough revenue and/or raise capital to support its operations.

 

Based on the above factors, substantial doubt exists about our ability to continue as a going concern for one year from the issuance of these financial statements.

 

The issuance of additional securities may result in a significant dilution in the equity interests of our current stockholders. Obtaining loans, assuming these loans would be available, will increase our liabilities and future cash commitments. There is no assurance that we will be able to obtain further funds required for our continued operations or that additional financing will be available for use when needed or, if available, that it can be obtained on commercially reasonable terms.


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The effect of existing or probable government regulations on our business is not known at this time. Due to the nature of our business, it is anticipated that there may be increasing government regulation that may cause us to have to take serious corrective actions or make changes to the business plan.

 

Cash Flow

 

The following table summarizes our cash flows for twelve months ending December 31, 2021.

 

 

For the Year Ended
December 31, 2021

Cash used in operating activities

(512,691) 

Cash used in investing activities

(90,900) 

Cash used in financing activities

1,246,500  

 

Cash Used in Operating Activities

 

During the year ended December 31, 2021, we had cash used in operating activities was $512,691, which reflects our net income for the period adjusted by non-cash charges.

 

Cash Used by Investing Activities

 

During the year ended December 31, 2021, cash used in investing activities was $90,900, reflecting our fixed assts net of depreciation of $40,900 and a down payment on a future subsidiary of $50,000.

 

Cash Provided by Financing Activities

 

During the year ended December 31, 2021, cash provided by financing was $1,246,500, primarily reflecting proceeds received under our PPM that was conducted during the year that raised $1,215,000.

 

Concentrations of Credit Risk

 

Cash held in banks: we maintain cash balances at a financial institution that is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to federally insured limits. At times balances may exceed FDIC insured limits. We have not experienced any losses in such accounts.

 

Accounts Receivable: Customer accounts typically are collected within a short period of time, and based on its assessment of current conditions and its experience collecting such receivables, management believes it has no significant risk related to its concentration within its accounts receivable.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements (as that term is defined in Item 303(a)(4)(ii) of Regulation S-K) as of March 31, 2022 that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.


36


 

Job Aire Group

Results of Operations for the twelve months ended December 31, 2021 and 2020

 

The acquisition of Job Aire Group did not occur until the interim period ending March 31, 2022.  The discussion below relates to Job Aire Group’s results of operations from our audited financial statements for the years ended December 31, 2021 and 2020.

 

Job Aire Group, Inc.

Statement of Operations

 

 

 

Year Ended
December 31

 

Year Ended
December 31

 

 

2021

 

2020

 

 

 

 

 

Sales

 

$13,053,643  

 

$10,287,146  

Cost of Sales

 

12,339,563  

 

9,804,890  

 

 

 

 

 

Gross profit

 

714,080  

 

482,257  

 

 

 

 

 

General and administrative expenses:

 

 

 

 

Salaries

 

442,510  

 

305,486  

Legal and professional fees

 

222,905  

 

15,731  

Rent

 

19,080  

 

23,640  

Other general and administrative

 

73,678  

 

72,412  

Total operating expenses

 

758,173  

 

417,269  

Income/(Loss) from operations

 

(44,093) 

 

64,988  

 

 

 

 

 

Interest income

 

 

 

 

Interest expense

 

12,860  

 

41,616  

Forgiveness of debt (loss)

 

 

 

96,683  

Loan Forgiven (income)

 

(942,146) 

 

 

Income (Loss) before taxes

 

885,193  

 

(73,311) 

 

 

 

 

 

Income Tax Expense

 

15,836  

 

17,026  

Net Income(loss)

 

$869,357  

 

$(90,337) 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per common share

 

$434.68  

 

$(45.17) 

 

 

 

 

 

Weighted average number of shares outstanding

  

2,000  

 

2,000  


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Revenues

 

For the years ended December 31, 2021 or 2020, Job Aire Group earned $13,053,643 and $10,287,146, respectively.  Revenue increased in 2021 by $2,766,496 as a result of an increase to the number of contracts entered into with customers.

 

Gross Profit

 

The company had $714,080 and $482,257 gross profit for the years ended December 31, 2021 and 2020, respectively.  The gross profit margin increased in 2021 by .78% compared to the year ended December 31, 2020.  The increase is attributed to newly added clients with more favorable contracts.

 

Selling, General, and Administrative Expenses

 

General and administrative expenses for the years ended December 31, 2021 and 2020 were $758,173 and $417,269, respectively.  The Company’s expenses for the year ending December 31, 2021 increased by $340,904 over the year ended 2020.  The increase is attributed to an increase in legal and professional fees associated with the audits of years ending 2021 and 2020 and an increase to the salaries paid to management and administrative employees of the Company. For the years ended December 31, 2021 and 2020, our selling, general and administrative expenses consisted primarily of finance, legal, human resources, facilities, and other supporting administrative expenses.

 

Operating Income or Loss

 

The Company realized an operating loss of $44,093 for the year ended December 31, 2021. For the year ended December 31, 2020, the company realized operating income of $64,988.  The loss realized in 2021 is a reflection of increased legal and professional fees of approximately $200,000 compared to 2020.  These fees were related to the requisite audits of years ending 2021 and 2020 as well as legal fees associated with the acquisition of the Company by Emissions Zero Module, made effective on January 1, 2022.

 

Interest Expense

 

Interest expense for the year ended December 31, 2021 was $12,860 compared to $41,616 for the year ended December 31, 2020.   The decrease in 2021 was due to the satisfaction of debt during the year ended December 31, 2020.

 

Net Income

 

For the year ended December 31, 2021, we incurred a net profit of $869,357 compared to a net loss of $90,337 for the year ended December 31, 2020.  The net increase in 2021 is primarily attributed to forgiveness of debt recorded by the Company on the PPP loan received in 2020 in the amount of $942,146, offset by a loss recorded in 2020 as forgiveness of debt in the amount of $96,683.  The loss on forgiveness of debt in 2020 was part of the agreement with Emissions Zero Module, whereby prior related party receivables were forgiven by the Company.

 

Liquidity and Capital Resources

 

We incurred net income for the year ended December 31, 2021 and had accumulated earnings of $1,402,157 at December 31, 2021.  At December 31, 2021, we had a cash balance of $229,854 and working capital of $1,404,157. Our primary source of cash is generated by our ongoing operations. While management continues to evaluate various options to further reduce our cash requirements to operate at a reduced rate,


38


management also intends to source unsecured credit facilities to meet short-term funding shortfalls, finance any working capital needs, and for general corporate purposes. If we determined the need for additional short-term liquidity, there is no assurance that such financing, if pursued and obtained, would be adequate or on terms acceptable to us.

 

Cash Flow

 

The following table summarizes our cash flows for the twelve months ending December 31, 2021.

 

 

For the Year Ended
December 31, 2021

Cash used in operating activities

(279,184) 

Cash used in investing activities

(0) 

Cash used in financing activities

(86,947) 

 

Cash Used in Operating Activities

 

During the year ended December 31, 2021, cash used in operating activities was $279,184, which reflects our net income for the period adjusted by non-cash charges.

 

Cash Provided by Financing Activities

 

During the year ended December 31, 2021, cash used in financing was $86,947, primarily reflecting an increase to related party loans.

 

Concentrations of Credit Risk

 

Cash held in banks: we maintain cash balances at a financial institution that is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to federally insured limits. At times balances may exceed FDIC insured limits. We have not experienced any losses in such accounts.

 

Accounts Receivable: Customer accounts typically are collected within a short period of time, and based on its assessment of current conditions and its experience collecting such receivables, management believes it has no significant risk related to its concentration within its accounts receivable.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements (as that term is defined in Item 303(a)(4)(ii) of Regulation S-K) as of March 31, 2022 that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.


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DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

 

Directors and Executive Officers

 

Below are the names of and certain information regarding the Company’s current executive officers and directors who were appointed effective as of the closing of the Share Exchange:

 

Name

Position

Age

Term

David Riggs

Chief Executive Officer and Director

63

1 Year

Kent Hush

Chief Financial Officer and Director

51

1 Year

Sumit Isaranggul Na Ayudhya

Chief Technology Officer and Chairman

61

1 Year

Russell E. Klawunn

Chief Operating Officer and Director

56

1 Year

Kim Mitchell

Director

71

1 Year

 

David Riggs, Chief Executive Officer and Director

 

Since February 2021, Mr. Riggs has been the Secretary of Emissions Zero Module, Inc. Since January 2020, Mr. Riggs has been a managing director of Pantex Technologies, an import/export company located in Tomball, Texas, specializing in exclusive spirits from the USA into Asia, where he oversees the management of daily operations. Since July 2019, Mr. Riggs has served as the Founder and Chief Executive Officer of Origgen Environmental Solutions, an aviation staffing company located in Tomball, Texas, where he oversees the management of daily operations. Since September 2018, Mr. Riggs has been the Founder and Chief Operating Officer of Origgen LLC, a technology-based company focused on leveraging Blockchain located in Casper, Wyoming, where he oversees the management of daily operations. From January 2006 to March 2012, Mr. Riggs was the Founder and Chief Executive Officer of Eagle Gold Company, a mining company located in Accra, Ghana, where he developed key operational initiatives and managed daily operations. From January 2003 to June 2005, Mr. Riggs was the Chief Operating Officer of The World Poker Store in Las Vegas, Nevada, where he performed a comprehensive analysis of registrations for securities and insurance and monitored compliance with processes, policies, procedures, and standards in regard to collection and management of annual contributions from shareholders and companies.

 

Kent Hush, Chief Financial Officer and Director

 

Since February 2021, Mr. Hush has been the Treasurer of Emissions Zero Module Inc. From January 2019 to January 2021, Mr. Hush was a Partner at ErgoFit-US in Tucson, Arizona, where he structured, developed, and managed financial operations and oversaw security operations. From December 1997 to April 2020, Mr. Hush was a Special Agent for the Federal Bureau of Investigation located in Tucson, Arizona, where he served as a special operations group team leader, managed complex investigations, analyzed evidence, and performed uncover operations. From June 1992 to December 1997, Mr. Hush was a Financial Institution Examiner for the Federal Deposit Insurance Company in Denver, Colorado, where he conducted investigations and made recommendations for actions to ensure compliance with laws and regulations.


40


 

Mr. Hush graduated from Abilene Christian University in Abilene, Texas, with a Bachelor of Business Administration Degree in 1992. Mr. Hush also received his Commercial Pilot Instrument Multi-Engine Rating License from Tucson Aeroservice Center Flight School in Tucson, Arizona, and has achieved US Government certification as a Financial Institution Examiner with additional training and certification in Safety and Soundness, Regulatory Compliance, and Information Systems.

 

Sumit Isaranggul Na Ayudhya, Chief Technology Officer, Chairman of the Board of Directors

 

Mr. Isaranggul Na Ayudhya founded Emissions Zero Module Inc in February of 2021, and since that time, has served as the Chief Executive Officer and Chairman. Prior to founding Emissions Zero Module Inc, Mr. Isaranggul Na Ayudhya spent 42 years in the aviation industry, including performing maintenance and inspections of large commercial aircraft with A-Tech Aerospace (Thailand) Inc, in Thailand, from January 2014 to October 2016 and again from October 2020 to present, with ComAv Technical Services, in Victorville, California, from September 2018 to October 2020, with Job Aire Group Inc, in Tucson, Arizona, as a contractor, from October 2016 to September 2018, with ADI-Aviation & Defense Inc, in San Bernardino, California, from August 2012 to December 2013, with Pulsar Aviation Service Inc, in San Bernardino, California, from May 2012 to August 2012, with Pacific Aerospace Resources & Technologies LLC, in Victorville, California, from December 2011 to May 2012, with Asgard for Victorville Aerospace located in Victorville, California from August 2007 to October 2007, and with A-Tech Aviation Corporation in Beaumont, California from October 2006 to August 2007.

 

From October 2007 to March 2012, Mr. Isaranggul Na Ayudhya was self-employed as a Managing Director and Consultant at A-Tech Aviation Corporation, located in Thailand, where he developed vehicle technology designed to dissolve pollution and foster economic growth. From April 2005 to October 2007, Mr. Isaranggul Na Ayudhya was an A&P Mechanic at NASA Lyndon Bjornson Space Center in El Paso, Texas, where he oversaw an astronaut training program and performed depot maintenance training. From July 2000 to April 2005, Mr. Isaranggul Na Ayudhya was an A&P Mechanic at AMS in Phoenix, Arizona, where he performed maintenance and inspections of aircraft systems. Prior to that, from February 1990 to April 2000, Mr. Isaranggul Na Ayudhya worked for Thai Airways as a mechanic, where he performed maintenance and inspections and troubleshooting for aircraft systems.

 

Mr. Isaranggul Na Ayudhya attended Airmen Technical Training School, Royal Thai Air Force (RTAF), located in Thailand, from June 1978 to April 1980, where he received a diploma in Airframe & Powerplant Mechanic/Avionics and became a Certified Aircraft Maintenance Technician. From February 1990 to October 1999, Mr. Isaranggul Na Ayudhya received multiple aircraft maintenance certifications through Thai Airways International Public Company Limited, located in Thailand. In June 2002, Mr. Isaranggul Na Ayudhya received his Bachelor of Fine Arts Degree with a concentration in Aeronautical Engineering from Unmanned Vehicle University in Phoenix, Arizona.

 

Russell E Klawunn¸ Chief Operating Officer and Director

 

Since February 2021, Mr. Klawunn has been the Vice President for Emissions Zero Module Inc. Since October 2020, Mr. Klawunn has been the President of Proveedora de Insumos Chaac De R.L. DE C.V., a wholesale merchant company located in Mexico. Since September 2016, Mr. Klawunn has been the founder and president of 1618CNC, LLC, a firearms dealer and FFL licensing company located in Tucson, Arizona, managing operations, including product development. From May 2018 to January 2019, Mr. Klawunn was Pilot in Command, ISR for L3 Communications, where he conducted ISR Deployments to Iraq and Syria. From April 1996 to June 2016, Mr. Klawunn was a Special Agent for the Federal Bureau of Investigation, where he conducted investigations, surveillance, and special operations. From January 2010 to September 2016, Mr. Klawunn was the co-founder and owner of Quartercircle10 LLC, a firearms dealer located in Tucson, Arizona, where he oversaw operations and led new product design and development. From July


41


1987 to March 1996, Mr. Klawunn served in the United States Marine Corps as a Naval Aviator, reaching the rank of Captain.

 

Mr. Klawunn received a Bachelor of Business Administration degree from Southwestern University in May 1987.

 

Kim Mitchell, Director

 

Mr. Mitchell has not been employed during the past 5 years. From January 2001 until his retirement in 2012, Mr. Mitchell was an Independent Consultant on Silicon and Compound Semiconductor Manufacturing.  From August 2009 until his retirement, Mr. Mitchell was the founder and President of EnergyWise Systems LLC, an energy conservation consulting company in St. George, Utah.

 

In 1976, Mr. Mitchell received a Ph.D. in Materials Science from Stanford University. In 1974, Mr. Mitchell received a Master’s of Science degree in Materials Science from Stanford University. In 1968, Mr. Mitchell received a bachelor’s degree in Applied Physics from the California Institute of Technology.

 

Code of Ethics

 

We have not adopted a formal Code of Ethics. The Board of Directors evaluated the business of the Company and the number of employees and determined that since the business is operated by only a limited number of employees, general rules of fiduciary duty and federal and state criminal, business conduct and securities laws are adequate ethical guidelines.   In the event our operations, employees and/or Directors expand in the future, we may take actions to adopt a formal Code of Ethics.

 

Compliance with Section 16(a) of the Exchange Act

 

Section 16(a) of the Exchange Act of 1934, as amended (the “Exchange Act”) requires our Directors and officers, and the persons who beneficially own more than ten percent of our common stock, to file reports of ownership and changes in ownership with the SEC. Copies of all filed reports are required to be furnished to us pursuant to Rule 16a-3 promulgated under the Exchange Act.  Based solely on our review of copies of such forms received by us, we believe that all filing requirements applicable to our officers, directors and 10% or more beneficial owners are complied with.

 

Corporate Governance

 

The Company promotes accountability for adherence to honest and ethical conduct; endeavors to provide full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with the Securities and Exchange Commission (the “SEC”) and in other public communications made by the Company; and strives to be compliant with applicable governmental laws, rules and regulations. The Company has not formally adopted a written code of business conduct and ethics that governs the Company’s employees, officers and Directors as the Company is not required to do so.

 

Significant Employees

 

We have no significant employees other than our officers and directors.


42


 

Involvement in Certain Legal Proceedings

 

None of our directors or executive officers has been involved in any of the following events during the past ten years:

 

·any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; 

 

·any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); 

 

·being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; or 

 

·being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated. 

 

Board Committees

 

The Company currently has not established any committees of the Board of Directors.  Our Board of Directors may designate from among its members an executive committee and one or more other committees in the future.  We do not have a nominating committee or a nominating committee charter.  Further, we do not have a policy with regard to the consideration of any director candidates recommended by security holders.  To date, other than as described above, no security holders have made any such recommendations.  The entire Board of Directors performs all functions that would otherwise be performed by committees.  Given the present size of our board it is not practical for us to have committees.  If we are able to grow our business and increase our operations, we intend to expand the size of our board and allocate responsibilities accordingly.

 

Audit Committee Financial Expert

 

We have no separate audit committee at this time.  The entire Board of Directors oversees our audits and auditing procedures.  The Board of Directors has at this time not determined whether any director is an “audit committee financial expert” within the meaning of Item 407(d)(5) for SEC regulation S-K.

 

EXECUTIVE COMPENSATION

 

Prior to the Merger, our officers and directors did not receive any compensation for their services rendered to us.  In addition, no remuneration of any nature has been paid for or on account of services rendered by a director in such capacity.  Effective with the Merger, we have installed new management and a Board, all of which were officers or directors of Emissions Module. The following table sets forth the cash and other compensation paid by the Company to our President and all other executive officers and directors during the period from inception through the date of this filing.


43


 

Name and Position

Year

Salary

Bonus

Option Awards

All other Compensation

Total

David Riggs, CEO, Secretary, Director

2021

2020

None

None

None

None

None

None

None

None

None

None

 

Name and Position

Year

Salary

Bonus

Option Awards

All other Compensation

Total

Kent Hush, CFO, Treasurer, Director

2021

2020

None

None

None

None

None

None

None

None

None

None

 

Name and Position

Year

Salary

Bonus

Option Awards

All other Compensation

Total

Sumit Isaranggunlnaayudhya, CTO, President, Director

2021

2020

None

None

None

None

None

None

None

None

None

None

 

 

Name and Position

Year

Salary

Bonus

Option Awards

All other Compensation

Total

Russell Klawunn, COO, Director

2021

2020

None

None

None

None

None

None

None

None

None

None

 

 

Name and Position

Year

Salary

Bonus

Option Awards

All other Compensation

Total

Kim Mitchell, Director

2021

2020

None

None

None

None

None

None

None

None

None

None

 

No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by us for the benefit of our employees.

 

Effective February 9, 2022, the Company entered into Employment Agreements with its Officers.  Unless or until such time the Company has sufficient cash flows, our Officers have agreed to defer some or all compensation due them under these agreements.  The following table reflects compensation amounts paid and deferred as of March 31, 2022.

 

Name and Position

Period to Date

Salary Paid

Deferred Salary

Bonus

Option Awards

All other Compensation

Total

David Riggs, CEO, Secretary, Director (1)

March 31, 2022

 

$12,000

 

$18,000

None

 

None

 

None

 

$30,000

 

 

Name and Position

Period to Date

Salary Paid

Deferred Salary

Bonus

Option Awards

All other Compensation

Total

Kent Hush, CFO, Treasurer, Director (2)

March 31, 2022

 

$      -0-

 

$24,166

None

 

None

 

None

 

$24,166

 


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Name and Position

Period to Date

Salary Paid

Deferred Salary

Bonus

Option Awards

All other Compensation

Total

Sumit Isaranggunlnaayudhya, CTO, President, Director (3)

March 31, 2022

 

$12,000

 

$ 12,166

None

 

None

 

None

 

$24,166

 

 

 

Name and Position

Period to Date

Salary Paid

Deferred Salary

Bonus

Option Awards

All other Compensation

Total

Russell Klawunn, COO, Director (4)

March 31, 2022

 

$     -0-

 

$24,166

None

 

None

 

None

 

$24,166

 

 

(1) On February 9, 2022, the Company entered into an Employment Agreement with David Riggs to perform as the Company’s Chief Executive Officer.  As consideration for services, Mr. Riggs will be compensated at $180,000 per year, with no less than 30% to be deferred to help facilitate the capital needs of the Company.  The amounts deferred are payable in cash or common stock.  The Officer is also entitled to fifteen days of paid vacation time, with a maximum of 10 days that may be carried over to the following year and five days of paid sick leave.  Employment by the Company is considered an At-Will arrangement whereby either party can terminate the Agreement with or without cause.  Any termination without cause requires a 30-day notice to the other party.  It was further agreed that if the Company severs the relationship without cause, the Employee would be eligible for severance pay equal to the amount of pay in effect at severance and continue for a period of twenty-four months.  The Company further agreed that any deferred salary at the time of termination would immediately be paid in either cash or stock, and at the Employee’s discretion.  In the event services are terminated with cause, the Company has agreed to immediately pay six months of severance pay and to settle any deferred pay in the form of cash or stock.  In addition, in the event the Company is purchased by another entity and the purchasing company does not elect to maintain Mr. Riggs as CEO, the Company has agreed that Employee will be entitled to severance of two years salary and immediate payment of any deferred salary in the form of cash or stock of the Company.  The contract is governed under the laws of the State of Arizona.

 

(2) On February 9, 2022, the Company entered into an Employment Agreement with Kent Hush to perform as the Company’s Chief Financial Officer.  As consideration for services, Mr. Hush will be compensated at $145,000 per year, with no less than 30% to be deferred to help facilitate the capital needs of the Company.  The amounts deferred are payable in cash or common stock.  The Officer is also entitled to fifteen days of paid vacation time, with a maximum of 10 days that may be carried over to the following year and five days of paid sick leave.  Employment by the Company is considered an At-Will arrangement whereby either party can terminate the Agreement with or without cause.  Any termination without cause requires a 30-day notice to the other party.  It was further agreed that if the Company severs the relationship without cause, the Employee would be eligible for severance pay equal to the amount of pay in effect at severance and continue for a period of twenty-four months.  The Company further agreed that any deferred salary at the time of termination would immediately be paid in either cash or stock, and at the Employee’s discretion.  In the event services are terminated with cause, the Company has agreed to immediately pay six months of severance pay and to settle any deferred pay in the form of cash or stock.  In addition, in the event the Company is purchased by another entity and the purchasing company does not elect to maintain Mr. Hush as CFO, the Company has agreed that Employee will be entitled to severance of two years salary and immediate payment of any deferred salary in the form of cash or stock of the Company.  The contract is governed under the laws of the State of Arizona.


45


 

(3) On February 9, 2022, the Company entered into an Employment Agreement with Sumit Isaranggunlnaayudhya to perform as the Company’s Chief Technology Officer.  As consideration for services, Mr. Isaranggunlnaayudhya will be compensated at $145,000 per year, with no less than 30% to be deferred to help facilitate the capital needs of the Company.  The amounts deferred are payable in cash or common stock.  The Officer is also entitled to fifteen days of paid vacation time, with a maximum of 10 days that may be carried over to the following year and five days of paid sick leave.  Employment by the Company is considered an At-Will arrangement whereby either party can terminate the Agreement with or without cause.  Any termination without cause requires a 30-day notice to the other party.  It was further agreed that if the Company severs the relationship without cause, the Employee would be eligible for severance pay equal to the amount of pay in effect at severance and continue for a period of twenty-four months.  The Company further agreed that any deferred salary at the time of termination would immediately be paid in either cash or stock, and at the Employee’s discretion.  In the event services are terminated with cause, the Company has agreed to immediately pay six months of severance pay and to settle any deferred pay in the form of cash or stock.  In addition, in the event the Company is purchased by another entity and the purchasing company does not elect to maintain Mr. Isaranggunlnaayudhya as CTO, the Company has agreed that Employee will be entitled to severance of two years salary and immediate payment of any deferred salary in the form of cash or stock of the Company.  The contract is governed under the laws of the State of Arizona.

 

(4) On February 9, 2022, the Company entered into an Employment Agreement with Russell Klawunn to perform as the Company’s Chief Operations Officer.  As consideration for services, Mr. Kluwann will be compensated at $145,000 per year, with no less than 30% to be deferred to help facilitate the capital needs of the Company.  The amounts deferred are payable in cash or common stock.  The Officer is also entitled to fifteen days of paid vacation time, with a maximum of 10 days that may be carried over to the following year and five days of paid sick leave.  Employment by the Company is considered an At-Will arrangement whereby either party can terminate the Agreement with or without cause.  Any termination without cause requires a 30-day notice to the other party.  It was further agreed that if the Company severs the relationship without cause, the Employee would be eligible for severance pay equal to the amount of pay in effect at severance and continue for a period of twenty-four months.  The Company further agreed that any deferred salary at the time of termination would immediately be paid in either cash or stock, and at the Employee’s discretion.  In the event services are terminated with cause, the Company has agreed to immediately pay six months of severance pay and to settle any deferred pay in the form of cash or stock.  In addition, in the event the Company is purchased by another entity and the purchasing company does not elect to maintain Mr. Kluwann as COO, the Company has agreed that Employee will be entitled to severance of two years salary and immediate payment of any deferred salary in the form of cash or stock of the Company.  The contract is governed under the laws of the State of Arizona.

 

Outstanding Equity Awards and Other Compensation Plans at Fiscal Year-End

 

We have not issued or agreed to issue any stock-based compensation to our executive officers. We have no plans in place and have never maintained any plans that provide for the payment of retirement benefits or benefits that will be paid primarily following retirement including, but not limited to, tax qualified deferred benefit plans, supplemental executive retirement plans, tax-qualified deferred contribution plans and nonqualified deferred contribution plans.

 

Except as indicated above, we have no contracts, agreements, plans or arrangements, whether written or unwritten, that provide for payments to the named executive officers listed above.


46


 

Indemnification of our Officers and Directors

 

The Nevada Revised Statutes and our Articles of Incorporation, as amended, allow us to indemnify our officers and Directors from certain liabilities and our Bylaws state that we shall indemnify every (i) present or former Director, advisory Director or officer of us, (ii) any person who while serving in any of the capacities referred to in clause (i) served at our request as a Director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, and (iii) any person nominated or designated by (or pursuant to authority granted by) the Board of Directors or any committee thereof to serve in any of the capacities referred to in clauses (i) or (ii) (each an “Indemnitee”).

 

Our Bylaws provide that we shall indemnify an Indemnitee against all judgments, penalties (including excise and similar taxes), fines, amounts paid in settlement and reasonable expenses actually incurred by the Indemnitee in connection with any proceeding in which he was, is or is threatened to be named as a defendant or respondent, or in which he was or is a witness without being named a defendant or respondent, by reason, in whole or in part, of his serving or having served, or having been nominated or designated to serve, if it is determined that the Indemnitee (a) conducted himself in good faith, (b) reasonably believed, in the case of conduct in his Official Capacity, that his conduct was in our best interests and, in all other cases, that his conduct was at least not opposed to our best interests, and (c) in the case of any criminal proceeding, had no reasonable cause to believe that his conduct was unlawful; provided, however, that in the event that an Indemnitee is found liable to us or is found liable on the basis that personal benefit was improperly received by the Indemnitee, the indemnification (i) is limited to reasonable expenses actually incurred by the Indemnitee in connection with the Proceeding and (ii) shall not be made in respect of any Proceeding in which the Indemnitee shall have been found liable for willful or intentional misconduct in the performance of his duty to us.

 

Except as provided above, the Bylaws provide that no indemnification shall be made in respect to any proceeding in which such Indemnitee has been (a) found liable on the basis that personal benefit was improperly received by him, whether or not the benefit resulted from an action taken in the Indemnitee's official capacity, or (b) found liable to us.  The termination of any proceeding by judgment, order, settlement or conviction, or on a plea of nolo contendere or its equivalent, is not of itself determinative that the Indemnitee did not meet the requirements set forth in clauses (a) or (b) above.  An Indemnitee shall be deemed to have been found liable in respect of any claim, issue or matter only after the Indemnitee shall have been so adjudged by a court of competent jurisdiction after exhaustion of all appeals there from.  Reasonable expenses shall, include, without limitation, all court costs and all fees and disbursements of attorneys’ fees for the Indemnitee.  The indemnification provided shall be applicable whether or not negligence or gross negligence of the Indemnitee is alleged or proven.

 

Neither our Bylaws nor our Articles of Incorporation include any specific indemnification provisions for our officer or Director against liability under the Securities Act of 1933, as amended. Additionally, insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the "Act") may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.


47


 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth information with respect to the beneficial ownership of our Common Stock as of July 9, 2022, after giving effect to the Merger, by (i) each stockholder known by us to be the beneficial owner of more than 5% of our Common Stock (our only class of voting securities), (ii) each of our directors and executive officers, and (iii) all of our directors and executive officers as a group.  To the best of our knowledge, except as otherwise indicated, each of the persons named in the table has sole voting and investment power with respect to the shares of our Common Stock beneficially owned by such person, except to the extent such power may be shared with a spouse.  To our knowledge, none of the shares listed below are held under a voting trust or similar agreement, except as noted.  Other than the Share Exchange, to our knowledge, there is no arrangement, including any pledge by any person of securities of the Company or any of its parents, the operation of which may at a subsequent date result in a change in control of the Company.

 

The following table sets forth, immediately after giving effect to the Share Exchange, the number of shares of common stock beneficially owned by executive officers, directors and persons who hold 5% or more of the outstanding common stock of the Company.

 

POST-MERGER

 

Name and Address of Beneficial Owner

Position(s) with
or Relationship
to Company

Amount of
Common Stock
Beneficially Owned

Percentage
Ownership of
Common stock (1)

George Christodoulou

10 DionysiouSolomou Street,

Leona Building, suite 501,

2406 Engomi, Nicosia

– Cyprus, P.O. Box 25631,

Nicosia

5% or more Shareholder

6,950,000(1) 

5.64% 

Shirley Christodoulou

10 DionysiouSolomou Street,

Leona Building, suite 501,

2406 Engomi, Nicosia

– Cyprus, P.O. Box 25631,

Nicosia

5% or more Shareholder

6,950,000(2) 

5.64% 

Shirley Properties, Inc. (4)

10 DionysiouSolomou Street,

Leona Building, suite 501,

2406 Engomi, Nicosia

– Cyprus, P.O. Box 25631,

Nicosia

5% or more Shareholder

6,950,000(3) 

5.64% 

David Riggs

25411 Stanolind Rd

Tomball, TX 773785

President, CEO, Director

16,031,645  

13.00% 

George Hruska

3204 Sienna Dr

Casper, WE 82604

Director

16,166,407  

13.11% 

Russell Klawunn

1870 W Prince Rd, #41

Tucson, AZ

COO, Director

17,379,262  

14.10% 


48


Kent Hush

4575 Dean Martin, #804

Las Vegas, NV 89103

Treasurer, CFO, Director

17,660,764  

14.33% 

Sumit Isaranggunlnaayudhya

19087 Allegheny Rd, #3

Apple Valley, CA 92307

Secretary, CTO, Director

28,948,799  

23.48% 

 

(1) George Christodoulou personally owns 1,650,000 common shares, and 1,000,000 common shares held in the name of Costa Vassiliades who passed away in January 2014.   George Christodoulou has yet to have Costa Vassiliades’ common shares transferred into his name.   George Christodoulou is deemed to beneficially own the shares of his wife Shirley Christodoulou, who owns 2,800,000 common shares, and the shares of Shirley Properties, Inc., an entity controlled by his wife, which owns1,500,000 shares.

 

(2) Shirley Christodoulou personally owns 2,800,000 common shares and is deemed to beneficially own the shares of her husband George Christodoulou, who owns 2,650,000 common shares and the shares of Shirley Properties, Inc., an entity she controls, which owns 1,500,000 shares.

 

(3) Shirley Christodoulou is the control person for Shirley Properties, Inc. a BVI corporation and is therefore deemed to beneficially own the common shares of Shirley Properties, Inc., in addition to the 2,800,000 shares she owns personally and the 2,650,000 shares held by George Christodoulou.

 

As used in this table, “beneficial ownership” means the sole or shared power to vote, or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose of, or to direct the disposition of, a security). In addition, for purposes of this table, a person is deemed, as of any date, to have “beneficial ownership” of any security that such person has the right to acquire within 60 days after such date.

 

 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

No director, executive officer, principal shareholder holding at least 5% of our common shares, or any family member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction, during the years ended December 31, 2021 and 2020, in which the amount involved in the transaction exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at the year-end for the last three completed fiscal years.

 

We have entered into employment agreements with several of our executive officers.  Please see the description of these arrangements at pages 49 to 50.


49


 

MARKET PRICE OF AND DIVIDENDS ON COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

 

There currently is no public market for our Common Stock.  Further, although our Common Stock is currently quoted on the OTC Bulletin Board (the “OTCBB”) and on the OTC Markets QB Tier, trading of our Common Stock is sporadic and by appointment only.  Trading may continue to be extremely sporadic.  For example, several days may pass before any shares may be traded.  As a result, an investor may find it difficult to dispose of, or to obtain accurate quotations of the price of our Common Stock.

 

If our securities are issued as part of an acquisition or business combination, such securities are required to be issued either in reliance upon exemptions from registration under applicable Federal or state securities laws or registered for public distribution.  The issuance of additional securities and their potential sale in any trading market which might develop in our common stock could depress the price of our common stock.  Further, such issuance of additional securities would result in a decrease in the percentage ownership of our shareholders.

 

Dividend Policy

 

We have never paid any cash dividends on our capital stock and do not anticipate paying any cash dividends on our Common Stock in the foreseeable future.  We intend to retain future earnings to fund ongoing operations and future capital requirements. Any future determination to pay cash dividends will be at the discretion of our Board of Directors and will be dependent upon financial condition, results of operations, capital requirements and such other factors as the Board of Directors deems relevant.

 

DESCRIPTION OF SECURITIES

 

Authorized Capital Stock

 

We have authorized capital stock consisting of 200,000,000 shares of Common Stock, $0.001 par value.

 

Issued and Outstanding Capital Stock

 

Immediately after giving effect to the Merger, including the shares issuable upon conversion of Emissions Zero’s convertible notes (which were deemed automatically converted into Emissions Zero common stock and then the Company’s common stock  upon closing of the Merger), the issuance of shares of our Common Stock issued to stockholders of Emissions Zero in the Merger, the Company’s total common shares outstanding is 110,695,000, of which 96,107,699 shares are beneficially owned by the newly appointed Officers and Directors who took office upon closing of the Merger.

 

Registration Rights

 

The issuance of shares of our Common Stock to holders of Emission Zero’s capital stock in connection with the Merger was not registered under the Securities Act, in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act, which exempts transactions by an issuer not involving any public offering, and Regulation D and/or Regulation S promulgated by the SEC under that section.  These securities may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement.

 

Further, the disclosures set forth in Item 2.01 of this Current Report under the heading “Completion of Acquisition or Disposition of Assets—The Share Exchange and Related Transactions - PPM”, are incorporated herein by reference.


50


 

Convertible Securities

 

As of the date hereof, the Company does not have any outstanding convertible securities.

 

Transfer Agent

The transfer agent for our Common Stock is Standard Registrar and Transfer Company.  The transfer agent’s address is 440 East 400 South, Suite 200, Salt Lake City, UT, 84111 and its telephone number is (801) 571-8844.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

 

The Nevada Private Corporation Law and our Articles of Incorporation allow us to indemnify our officers and directors from certain liabilities and our By-Laws state that we shall indemnify every (i) present or former director or officer of us, (ii) any person who while serving in any of the capacities referred to in clause (i) served at our request as a director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, and (iii) any person nominated or designated by (or pursuant to authority granted by) the Board of Directors or any committee thereof to serve in any of the capacities referred to in clauses (i) or (ii) (each an “Indemnitee”).

 

Our By-Laws provide that we shall indemnify an Indemnitee against all judgments, penalties (including excise and similar taxes), fines, amounts paid in settlement and reasonable expenses actually incurred by the Indemnitee in connection with any proceeding in which he was, is or is threatened to be named as defendant or respondent, or in which he was or is a witness without being named a defendant or respondent, by reason, in whole or in part, of his serving or having served, or having been nominated or designated to serve, if it is determined that the Indemnitee (a) conducted himself in good faith, (b) reasonably believed, in the case of conduct in his official capacity, that his conduct was in our best interests and, in all other cases, that his conduct was at least not opposed to our best interests, and (c) in the case of any criminal proceeding, had no reasonable cause to believe that his conduct was unlawful; provided, however, that in the event that an Indemnitee is found liable to us or is found liable on the basis that personal benefit was improperly received by the Indemnitee, the indemnification (i) is limited to reasonable expenses actually incurred by the Indemnitee in connection with the proceeding and (ii) shall not be made in respect of any proceeding in which the Indemnitee shall have been found liable for willful or intentional misconduct in the performance of his duty to us.

 

Other than in the limited situation described above, our By-Laws provide that no indemnification shall be made in respect to any proceeding in which such Indemnitee has been (a) found liable on the basis that personal benefit was improperly received by him, whether or not the benefit resulted from an action taken in the Indemnitee’s official capacity, or (b) found liable to us. The termination of any proceeding by judgment, order, settlement or conviction, or on a plea of nolo contendere or its equivalent, is not of itself determinative that the Indemnitee did not meet the requirements set forth in clauses (a) or (b) above. An Indemnitee shall be deemed to have been found liable in respect of any claim, issue or matter only after the Indemnitee shall have been so adjudged by a court of competent jurisdiction after exhaustion of all appeals therefrom. Reasonable expenses shall, include, without limitation, all court costs and all fees and disbursements of attorneys for the Indemnitee. The indemnification provided shall be applicable whether or not negligence or gross negligence of the Indemnitee is alleged or proven.


51


 

Other than discussed above, none of our By-Laws, our Articles of Incorporation or any indemnification agreement with any director of the Company includes any specific indemnification provisions for our officers or directors against liability under the Securities Act. Additionally, insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

 

ITEM 3.02   Unregistered Sales of Equity Securities.

 

Shares Issued in Connection with the Share Exchange

 

All share and per share stock numbers in this section are after giving effect to the Share Exchange made effective on July 9, 2022, in which each share of Emissions Zero’s common stock outstanding at the time of the Merger was automatically converted into an aggregate of 110,695,000 shares of our Common Stock. This transaction was exempt from registration under Section 4(2) of the Securities Act as not involving any public offering.  None of the securities were sold through an underwriter and, accordingly, there were no underwriting discounts or commissions involved.

 

The shares issuable to the EZM shareholders as a result of the Merger will be deemed restricted securities under the SEC’s rules and regulations and will not be sellable under the SEC’s Rule 144 until certain conditions are satisfied.  These conditions are:

 

Ÿthe issuer of the securities has ceased to be a shell company; 

Ÿthe issuer is subject to the reporting requirements of section 13 or 15(d) of the Exchange Act; 

Ÿthe issuer has filed all reports and other materials required to be filed by section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months, other than Form 8-K reports; and 

Ÿone year has elapsed since the issuer has filed current ‘‘Form 10 information’’ with the SEC reflecting its status as an entity that is no longer a shell company. 

 

ITEM 5.01   Changes in Control of Registrant

 

The information regarding change of control of the Company in connection with the Share Exchange set forth in Item 2.01, “Completion of Acquisition or Disposition of Assets—The Share Exchange and Related Transactions” is incorporated herein by reference.

 

ITEM 5.02   Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

 

The information regarding departure and election of directors and departure and appointment of principal officers of the Company in connection with the Share Exchange set forth in Item 2.01, “Completion of Acquisition or Disposition of Assets—The Share Exchange and Related Transactions” is incorporated herein by reference.

 

ITEM 5.06   Change in Shell Company Status

 

Prior to the Share Exchange, we were a “shell company” (as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)).  As a result of the Share Exchange, we have ceased to be a shell company.  The information contained in this Current Report constitutes the current “Form 10 information” necessary to satisfy the conditions contained in Rule 144(i)(2) under the Securities Act of 1933, as amended (the “Securities Act”).


52


 

ITEM 8.01   Other Events

 

Effective June 22, 2022, the Company moved its corporate offices to 1870 West Prince Road #41, Tucson, Arizona 85705.

 

ITEM 9.01    Financial Statements and Exhibits

 

(a)  Financial statements of business acquired.

 

In accordance with Item 9.01(a), included in this filing on Form 8-k are the following financial statements

 

Emissions Zero Module financial statements as of and for the years ended December 31, 2021 and 2020 including the audit opinion of Gries and Associates appearing as Exhibit 99.2 to this Report on Form 8-K.;

 

Job Aire Group, Inc. financial statements as of and for the years ended December 31, 2021 and 2020 including the audit opinion of Gries and Associates appearing as Exhibit 99.3 to this Report on Form 8-K.;

 

Unaudited condensed consolidated financial statements of Emissions Zero Module, Inc. as of, and for the three months ended March 31, 2022 and 2021 appearing as Exhibit 99.4 to this Report on Form 8-K.

 

(b)  Pro forma financial information.

 

In accordance with Item 9.01(b), unaudited pro forma condensed combined financial statements as of March 31, 2022 and the accompanying notes, reflecting the completion of the Merger between Colambda Technologies, Inc. and Emissions Zero Module, Inc. are included in this Report.

 

(d)  Exhibits

 

In reviewing the agreements included or incorporated by reference as exhibits to this Current Report on Form 8-K, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company or the other parties to the agreements. The agreements may contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the parties to the applicable agreement and:

 

should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; 

 

have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement; 

 

may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and 

 

were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments. 

 

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about the Company may be found elsewhere


53


in this Current Report on Form 8-K and the Company’s other public filings, which are available without charge through the SEC’s website at http://www.sec.gov.

 

EXHIBITS

 

Exhibit Number

 

Description of Exhibit

 

Filing

3.1*

 

Articles of Incorporation

 

 

3.2*

 

Bylaws

 

 

10.1**

 

Agreement and Plan of Merger and Reorganization dated as of the date set forth on the signature page hereto, is by and among NEW CENTURY RESOURCES CORPORATION, a Nevada corporation (the “NCR”), Emissions Zero Module, Inc, a Wyoming corporation (“EZM”).

 

 

10.2

 

Amendment No. 2 to Agreement and Plan of Merger and Reorganization made as of March 8, 2022 by and among New Century Resources Corporation, a Nevada corporation and Emissions Zero Module, Inc, a Wyoming corporation.

 

Filed Herewith

10.3

 

Amendment No. 3 to Agreement and Plan of Merger and Reorganization made as of March 8, 2022 by and among New Century Resources Corporation, a Nevada corporation and Emissions Zero Module, Inc, a Wyoming corporation.

 

Filed herewith

10.4

 

Purchase Agreement by and between Emissions Zero Module and Job Aire Group

 

Filed herewith

10.5

 

Employment Agreement dated as of February 9, 2021 between the Company and David Riggs

 

Filed herewith

10.6

 

Employment Agreement dated as of February 9, 2022 between the Company and Kent Hush

 

Filed herewith

10.7

 

Employment Agreement dated as of February 9, 2022 between the Company and Sumit Isaranggunlnaayudhya

 

Filed herewith

10.8

 

Employment Agreement dated as of February 9, 2022 between the Company and Russell Klawunn

 

Filed herewith

31.1

 

Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rule 13a-14

 

Filed herewith.

32.1

 

CEO and CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act

 

Filed herewith.

99.1

 

Pro Forma condensed combined financial statements as of March 31, 2022 and the accompanying notes, reflecting the completion of the Merger between Colambda Technologies, Inc.  and Emissions Zero Module, Inc

 

Filed herewith.

99.2

 

Emissions Zero Module financial statements as of and for the years ended December 31, 2021 and 2020, including the audit opinion of Gries and Associates

 

Filed herewith.

99.3

 

Job Aire Group, Inc. financial statements as of and for the years ended December 31, 2021 and 2020, including the audit opinion of Gries and Associates

 

Filed herewith.

99.4

 

Unaudited condensed consolidated financial statements of Emissions Zero Module, Inc. as of, and for the three months ended March 31, 2022 and 2021

 

Filed herewith.

101.INS*

 

XBRL Instance Document

 

Filed herewith.

101.SCH*

 

XBRL Taxonomy Extension Schema Document

 

Filed herewith.

101.CAL*

 

XBRL Taxonomy Extension Calculation Linkbase Document

 

Filed herewith.

101.LAB*

 

XBRL Taxonomy Extension Labels Linkbase Document

 

Filed herewith.

101.PRE*

 

XBRL Taxonomy Extension Presentation Linkbase Document

 

Filed herewith.

101.DEF*

 

XBRL Taxonomy Extension Definition Linkbase Document

 

Filed herewith.

 

* Incorporated by reference to our Form 10-12G/A filed December 3, 2014

** Filed as Exhibit 10.1 to the Company’s Form 8-k as filed with the Securities and Exchange Commission on November 22, 2021.

 

*Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.


54


SIGNATURE

 

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. 

 

COLAMBDA TECHNOLOGIES, INC.

 

 

(Formerly, New Century Resources Corporation)

 

 

 

 

 

 

 

 

 

 

/s/ David Riggs

 

/s/ Kent Hush

 

David Riggs

 

Kent Hush

 

Chief Executive Officer

 

Chief Financial Officer

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

COLAMBDA TECHNOLOGIES, INC.

 

 

(Formerly, New Century Resources Corporation)

 

 

 

 

 

 

 

 

 

 

/s/ David Riggs

 

/s/ Kent Hush

 

David Riggs

 

Kent Hush

 

Chief Executive Officer

 

Chief Financial Officer

 


55

AMENDMENT NO. 2 TO

AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

 

This Amendment No. 2 to Agreement and Plan of Merger and Reorganization (this “Agreement”), is made as of May 15, 2022 by and among NEW CENTURY RESOURCES CORPORATION, a Nevada corporation (the “NCR”), Emissions Zero Module, Inc, a Wyoming corporation (“EZM”). NCR and EZM are each a “Party” and referred to collectively herein as the “Parties.”

 

WHEREAS, the Parties have previously executed Agreement and Plan of Merger and Reorganization dated as of November 19, 2021, as amended by Amendment No.1 dated as of March 8, 2022 (Original Agreement”);

 

WHEREAS, the Parties have been diligently progressing towards completing the necessary documentation and conditions to close the Merger (as defined in the Original Agreement);

 

WHEREAS, a condition to Closing (as defined in the Original Agreement) is that NCR shall have obtained approval of the Merger from the Financial Industry Regulatory Authority (“FINRA”); and

 

WHEREAS, the Parties have determined to further extend the time period to obtain FINRA approval and consummate the Merger.

 

NOW THEREFORE, in consideration of the covenants, agreements, representations and warranties contained herein, and for other good and valuable consideration, the Parties agree as follows.

 

1.All terms not otherwise defined herein shall have the meaning ascribed to such terms in the Original Agreement. 

 

2.The Parties hereby re-confirm to each other that they shall continue to use their reasonable commercial efforts to provide information and documentation to FINRA on a timely basis to obtain approval from FINRA for the Merger. 

 

3.Section 1.1 of the Original Agreement is hereby modified to remove the last sentence and insert the following sentence: 

 

For the avoidance of doubt, the Parties acknowledge that a condition precedent to the enforcement of this Agreement is that the Financial Industry Regulatory Authority (“FINRA”) approve the Merger and if FINRA approval is not obtained before Wednesday, June 15, 2022 this Agreement shall be null and void, and the Parties shall be released from liability hereunder.

 

4.Section 1.2 of the Original Agreement is hereby amended and restated to read as follows: 

 

1.2 The Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on or before Friday, April 17, 2022, and shall take place remotely, via electronic exchange of documents, or, if all of the conditions to the obligations of the Parties to consummate the transactions contemplated hereby have not been satisfied or waived by such date, on such mutually agreeable later date as soon as practicable and in any event not later than Wednesday, June 15, 2022 (the “Closing Date”). As used in this Agreement, the term “Business Day” means any day other than a Saturday, a Sunday or a day on which banks in the state of New York are required or authorized by applicable Law to close. For the avoidance of doubt, the Closing shall not occur until such time as NCR has obtained Financial Industry Regulatory Authority (“FINRA”) approval of the Name Change and Merger and the Parties have complied with the requirements of Article V hereof. If FINRA approval has not been obtained by Wednesday, June 15, 2022, this Agreement shall be null and void.

 

6.NCR shall file on a timely basis a Form 8-k with the SEC reporting the execution of this Agreement. 


1


7.This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. 

 

8.This Agreement shall be governed by and construed in accordance with the internal Laws of the State of Nevada without giving effect to any choice or conflict of Law provision or rule (whether of the State of Nevada or any other jurisdiction) that would cause the application of Laws of any jurisdictions other than those of the State of Nevada. 

 

9.All other terms and conditions of the Original Agreement shall remain in full force and effect. 

 

10.Each of the Parties has been duly authorized by its respective Board of Directors to execute this Agreement. 

 

IN WITNESS WHEREOF, the Parties have executed this Agreement to be executed as of the 15th day of May, 2022.

 

COLAMBDA TECHNOLOGIES, INC.

(formerly NEW CENTURY RESOURCES CORPORATION)

 

By:  

Name: George Christodoulo Title: President

 

EMISSIONS ZERO MODULE, INC.

 

 

By:   

Name: David Riggs

Title: President


2

 

AMENDMENT NO. 3

TO AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

 

This Amendment No. 3 to Agreement and Plan of Merger and Reorganization is made as of July 8, 2022 by and among COLAMBDA TECHNOLOGIES, INC. (fka New Century Resources Corp.), a Nevada corporation, and EMISSIONS ZERO MODULE, INC a Wyoming corporation; collectively referred to herein as the “Parties”.

 

The Parties hereto agree as follows:

 

1.Section 1.1 of the Original Agreement is hereby modified to remove the last sentence and, insert the following sentence: 

 

for the avoidance of Doubt, the Parties acknowledge that all conditions precedent to the enforcement of this Agreement have been satisfied or otherwise waived by the Parties and the date of Closing as defined below shall be extended to on or before the 9th day of July,2022.

 

2.Section 1.2 of the Original Agreement is hereby amended and restated to read as Follows: 

 

l.2 The Clos1ng. The closing of the transactions contemplated by this Agreement shall occur on or before July 9, 2022, and shall take place remotely, via electronic exchange of documents.

 

3.1.3 Actions at Closing, 

 

1.3(d) of the Agreement is amended as follows:

 

(d) EZM shall deliver the sum of$105,000 each to Robert J Nielson and George Christodoulou for shareholder advances, payable as follows: $30,000 on the day following Closing; and $180,000 on or before the expiration of 30 days of dosing or the receipt of a new trading symbol from FINRA, whichever occurs first.

 

4.This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. 

 

This Agreement shall be governed by and construed in accordance with the internal laws of the State of Nevada without giving effect to any choice or conflict of Law provision or rule (whether of the state of Nevada or any other jurisdiction) that would cause the application of Laws of any Jurisdictions other than those of the State of Nevada.


6.All other terms and conditions of the Original Agreement shall remain in full force and 

effect.

 

7.Each of the parties has been duly authorized by its respective Board of. Directors to 

Execute this Agreement

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the 8th day of July

2022.

 

 

 

COLAMBDA TECHNOLOGIES, INC

(formerly New Century Resources Corporation)

 

 

 

 

EMISSI0NS ZERO MODULE, INC.

 

 

 

 

STOCK PURCHASE AGREEMENT

 

TIDS AGREEMENT (this "Agreement"), is effective as of the date set forth on the signature page hereto, and is by and among Emissions Zero Module, Inc, a Wyoming corporation ("Buyer"), and William D Tiley, a resident of the state of Arizona ("Seller"). Buyer and Seller are each a "Party" and referred to collectively herein as the "Parties."

 

WHEREAS, the Seller owns all of the outstanding Equity Securities of Job Aire Group Inc, a company formed under the laws of the state of Arizona (the "Company''), consisting of 1,000 shares of common stock, no par value representing 100% of the securities of the Company outstanding (the "Shares").

 

WHEREAS, the Parties wish to provide for Seller's sale of the Shares to Buyer and Buyer's purchase of the Shares from Seller on the terms and conditions of this Agreement.

 

NOW, THEREFORE, in consideration of the representations, warranties and covenants herein contained, and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the Parties, intending legally to be bound, agree as follows:

 

ARTICLE 1. THE ACQUISITION.

 

Section 1.1. Purchase and Sale. Subject to the terms and conditions of this Agreement, at the Closing to be held as provided in Section 2, Seller shall sell the Shares to Buyer, and Buyer shall purchase the Shares from Seller, free and clear of all Encumbrances. For purposes of this Agreement, "Encumbrances" shall mean any security interest, mortgage, lien, charge, adverse claim or restriction of any kind, including, but not limited to, any restriction on the use, voting, transfer, receipt of income or other exercise of any attributes of ownership, other than a restriction on transfer arising under Federal or state securities laws.

 

Section 1.2. Purchase Price. The aggregate purchase price for the Shares (the "Price") that the Buyer shall pay to the Seller in addition to $25,000 which Buyer previously delivered to Seller is as follows:

 

(a)  $25,000 upon execution hereof,

 

(b)  36 payments of $20,000 beginning on January 2, 2022, to be completed by December 31, 2024.

 

(c)  2% of the Net Revenue received by the Company for the 36-month period following the Effective Date up to a maximum of $1,000,000. The first payment for the yearly period following the execution of this Agreement, shall be due 45 days after the anniversary of the Closing Date and subsequent payments shall be paid annually on the anniversary of such date.

 

(d)  Buyer has the option of making any payment due under this Article 1 prior to its due date without

penalty or interest.

 

Section 1.3. Indebtedness. Immediately prior to the Closing, Seller shall cause the Company to extinguish the indebtedness set forth on Exhibit 1.3 hereto.

 

Section 1.4. Indebtedness. At the time of the Closing, the Company will have indebtedness of the sums set forth on Exhibit 1.4 hereto. The Buyer shall assume the indebtedness set forth on Exhibit 1.4 at the Closing. As used herein, indebtedness of the Seller means all obligations of the Company including without limitation, the "Intercompany Accounts" or "advances" or other terms used to describe indebtedness owed by the Company or that will be owed by the Company for the 12 months following closing.

 

Section 1.5 Assets. Immediately prior to the Closing, the Company will own the assets as set forth on Exhibit 1.5 hereto and own such assets free and clear of all Encumbrances unless otherwise indicated in Exhibit 1.5.

 

Section 1.6. Net Revenue. For purposes of this Agreement, Net Revenue shall mean the Company's gross income minus its direct and indirect costs.

 

Section 1.7. Post Closing Services. Seller shall provide up to 10 hours per month of service to the Buyer to support existing contracts and relationships and expansion of the Company's business. Said services shall be performed as requested by Buyer to be deemed necessary to continue normal business operation.



ARTICLE 2. THE CLOSING.

 

Section 2.1. Place And Time. The closing of the sale and purchase of the Shares (the "Closing") shall take place at 1870 West Prince Rd. #10, Tucson, Arizona 85705 before 5:00 PM PST on December 15, 2022, or at such other place, date and time as the parties may agree in writing. If the Closing has not occurred on or before December 17, 2021, this Agreement shall be null and void. "Closing Date" shall mean the "effective date" of the Closing to be January 1, 2022. The Closing is subject to the following:

 

Section 2.2. Deliveries By Seller. At the Closing, Seller shall deliver the following to Buyer:

 

(a)  Certificates representing the Shares, duly endorsed for transfer to Buyer and accompanied by any applicable stock transfer tax stamps; Seller shall cause the Buyer to immediately exchange those certificates for, and to deliver to Buyer at the Closing, a certificate representing the Shares registered in the Company (without any legend or other reference to any Encumbrance);

 

(b)  The documents contemplated by Section 3;

 

(c)  All other documents, instruments and writings required by this Agreement to be delivered by Seller at the Closing and any other documents or records relating to the Company's business requested by Buyer in connection with this Agreement; and

 

(d)  Evidence reasonably acceptable to Buyer that the liabilities set forth on Exhibit 1.3 have been satisfied except those being assumed by the Buyer as set forth on Exhibit 1.4.

 

(e)  Statements from all Bank and Financial institutions providing services to the Seller directly or indirectly related to business operations and transfers set forth in Exhibit 5.28.

 

Section 2.3. Deliveries By Buyer. At the Closing, Buyer shall deliver the following to Seller:

 

(a)  A wire transfer in immediately available funds to an account designated by Seller in the amount of

$25,000;

 

(b)  The documents contemplated by Section 4; and

 

(c)  All other documents, instruments and writings required by this Agreement to be delivered by Buyer at the Closing.

 

 

Section 2.4. Assumption of Liabilities. Prior to the Closing, Seller shall assume all liabilities set forth on Exhibit 1.4 hereto.

 

ARTICLE 3. CONDITIONS TO BUYER'S OBLIGATIONS.

 

The obligations of Buyer to effect the Closing shall be subject to the satisfaction at or prior to the Closing of the following conditions:

 

Section 3.1. No Injunction. There shall not be in effect any injunction, order or decree of a court of competent jurisdiction that prevents the consummation of the transactions contemplated by this Agreement, that prohibits Buyer's acquisition of the Shares, that will require any divestiture as a result of Buyer's acquisition of the Shares, or that will require all or any part of the business of the Company to be held separate and no litigation or proceedings seeking the issuance of such an injunction, order or decree or seeking to impose substantial penalties on Buyer or Seller if this Agreement is consummated shall be pending.

 

Section 3.2. Representations, Warranties and Agreements. The representations and warranties of Seller set forth in this Agreement shall be true and complete in all respects as of the Closing Date as though made at such time, and Seller shall have performed and complied in all respects with the agreements contained in this Agreement required to be performed and complied with by it at or prior to the Closing and Buyer shall have received a certificate to that effect signed by an authorized representative of the Company.

 

Section 3.3. Due Diligence. The Buyer shall have 30 days after execution hereof to conduct due diligence ("Due Diligence Period") of the Seller and the Company. Upon execution hereof until the Closing, Seller shall permit representatives of the Buyer to have access to all premises, properties, financial and accounting records, contracts, other records and documents, and personnel of or pertaining to the Company. In the event that the Buyer shall have determined, in its sole and absolute discretion, before the expiration of the Due Diligence Period that acquisition of the Company is not suitable for the Buyer's purposes, Buyer shall have the right to terminate this Agreement by giving to Seller written notice of termination before the expiration of the Due Diligence Period. If Buyer does not give written notice of termination before the expiration of the Due Diligence Period, this Agreement shall continue in full force and effect.

 

Section 3.4. Resignations of Directors. All of the Company's officers and directors shall resign immediately prior to the Closing and the Buyer shall elect new directors and appoint officers of the Company.



ARTICLE 4. CONDITIONS TO SELLER'S OBLIGATIONS.

 

The obligations of Seller to effect the Closing shall be subject to the satisfaction at or prior to the Closing of the following conditions:

 

Section 4.1. No Injunction. There shall not be in effect any injunction, order or decree of a court of competent jurisdiction that prevents the consummation of the transactions contemplated by this Agreement or that prohibits the sale of the Shares to Buyer and no litigation or proceedings seeking the issuance of such an injunction, order or decree or seeking to impose substantial penalties on Buyer or Seller if this Agreement is consummated shall be pending.

 

Section 4.2. Representations, Warranties and Agreements. The representations and warranties of Buyer set forth in this Agreement shall be true and complete in all material respects as of the Closing Date as agreements contained in this Agreement required to be performed and complied with by it prior to or at the Closing and Buyer shall have received a certificate to that effect signed by an officer of Buyer.

 

ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF SELLER.

 

Seller represents and warrants to Buyer that as of the Effective Date and the Closing Date:

 

Section 5.1. Organization of Seller; Authorization. Seller is a corporation duly organized, validly existing and in good standing under the laws of Arizona with full corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action of Seller and this Agreement constitutes a valid and binding obligation of Seller, enforceable against it in accordance with its terms.

 

Section 5.2. No Conflict as to Seller. Neither the execution and delivery of this Agreement nor the consummation of the sale of the Shares to Buyer will (a) violate any provision of the certificate of incorporation or by-laws of Seller or (b) violate, be in conflict with, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under any agreement to which Seller is a party or (c) violate any statute or law or any judgment, decree, order, regulation or rule of any Governmental Body applicable to Seller. For purposes of this Agreement, "Governmental Body" shall mean any domestic or foreign national, state or municipal or other local government or multi-national body (including, but not limited to, the European Economic Community), any subdivision, agency, commission or authority thereof.

 

Section 5.3. Ownership of Shares. The authorized Equity Securities of the Company consist of 1,000,000 shares of common stock, no par value, of which 1,000 shares are outstanding and constitute the Shares. Seller owns the Shares, of record and beneficially, free and clear of all Encumbrances. No legend or other reference to any purported Encumbrance appears upon any certificate representing the Shares. The delivery of certificates to Buyer provided in Section 2.2 and the payment to Seller provided in Section 2.3 will result in Buyer's immediate acquisition of record and beneficial ownership of the Shares, free and clear of all Encumbrances. There are no outstanding options, rights, conversion rights, agreements or commitments of any kind relating to the issuance, sale or transfer of any Equity Securities or other securities of the Company. For purposes of this Agreement, Equity Securities have the meaning of equity securities as set forth in Rule 3a-l l-1 under the Securities Exchange Act of 1934.

 

Section 5.4. Organization of the Company. The Company has no subsidiaries. The Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, with full corporate power and authority to own its properties and to engage in its business as presently conducted, is duly qualified and in good standing as a foreign corporation under the laws of each other jurisdiction in which it is authorized to do business and is not required to qualify as a foreign corporation in any other jurisdiction except where the failure to be so qualified would not have a material adverse effect on the business or financial condition of the Company. All of the outstanding Equity Securities are owned of record and beneficially by the Seller, free and clear of all Encumbrances. Such Equity Securities have been duly authorized and validly issued and are fully paid and non-assessable. There are no outstanding options, rights, conversion rights, agreements or commitments of any kind relating to the issuance, sale, or transfer of any Equity Securities. The Company does not own or have any option, right, agreement or commitment of any kind to acquire any Equity Securities or other securities of any other Person or any direct or indirect equity or ownership interest in any other business. The Company is not an "investment company" within the meaning of the Investment Company Act of 1940. For purposes of this Agreement, "Person" shall mean any individual, corporation, partnership, joint venture, trust, association, unincorporated organization, other entity, or Governmental Body.

 

Section S.S. No Conflict as to the Company. Neither the execution and delivery of this Agreement nor the consummation of the sale of the Shares to Buyer will (a) violate any provision of the certificate of incorporation or by-laws (or other governing instrument) of the Company or (b) violate, or be in conflict with, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or excuse performance by any Person of any of its obligations under, or cause the acceleration of the maturity of any debt or obligation pursuant to, or result in the creation or imposition of any Encumbrance upon any property or assets of the Company under, any material agreement or commitment to which the Company is a party or by which any of their respective property or assets



is bound, or to which any of the property or assets of the Company is subject, or (c) violate any statute or law or any judgment, decree, order, regulation or rule of any court or other Governmental Body applicable to the Company except, in the case of violations, conflicts, defaults, terminations, accelerations or Encumbrances described in clause (b) of this Section 5.5, for such matters which are not likely to have a material adverse effect on the business or financial condition of the Company.

 

Section 5.6. Consents and Approvals of Governmental Authorities. No consent, approval, or authorization of, or declaration, filing or registration with, any Governmental Body is required to be made or obtained by Seller or the Company in connection with the execution, delivery and performance of this Agreement by Seller or the consummation of the sale of the Shares to Buyer.

 

Section 5.7. Other Consents. No consent of any Person is required to be obtained by Seller or the Company to the execution, delivery and performance of this Agreement or the consummation of the sale of the Shares to Buyer, including, but not limited to, consents from parties to leases or other agreements or commitments, except for any consent which the failure to obtain would not be likely to have a material adverse effect on the business and financial condition of the Company.

 

Section 5.8. Financial Statements. Within five days prior to the Closing, the Seller will deliver to Buyer, for the two most recent fiscal years and 9 month period ended September 30, 2021 audited consolidated balance sheets of the Company, statements of income, changes in financial position, as well as consolidated summary statements of operating results and cash generation for such periods. Records, applied software and document, regardless of location or person holding documents. Such financial statements and notes shall fairly present the consolidated financial condition and results of operations of the Company as at the respective dates thereof and for the periods therein referred to, all in accordance with generally accepted United States accounting principles consistently applied throughout the periods involved, except as set forth in the notes thereto.

 

Section 5.9. Title to Properties; Encumbrances. Exhibit 5.9 describes all interests in real property owned or leased by the Company. The Company owns all the material properties and assets that they purport to own (real, personal and mixed, tangible and intangible), including, without limitation, all the material properties and assets reflected in the Balance Sheet (except for property sold since the date of the Balance Sheet in the ordinary course of business or leased under capitalized leases), and all the material properties and assets purchased or otherwise acquired by the Company since the date of the Balance Sheet. All properties and assets reflected in the Balance Sheet are free and clear of all material Encumbrances and are not, in the case of real property, subject to any material rights of way, building use restrictions, exceptions, variances, reservations or limitations of any nature whatsoever except, with respect to all such properties and assets, (a) mortgages or security interests shown on the Balance Sheet as securing specified liabilities or obligations, with respect to which no default (or event which, with notice or lapse of time or both, would constitute a default) exists, and all of which are listed in the Exhibit 5.9, (b) mortgages or security interests incurred in connection with the purchase of property or assets after the date of the Balance Sheet (such mortgages and security interests being limited to the property or assets so acquired), with respect to which no default (or event which, with notice or lapse of time or both, would constitute a default) exists, (c) as to real property, (i) imperfections of title, if any, none of which materially detracts from the value or impairs the use of the property subject thereto, or impairs the operations of the Company and (ii) zoning laws that do not impair the present or anticipated use of the property subject thereto, and (d) liens for current taxes not yet due. The properties and assets of the Company include all rights, properties, and other assets necessary to permit the Seller (and Buyer after the Closing) to conduct the Company's business in all material respects in the same manner as it is conducted on the date of this Agreement.

 

Section 5.10. Buildings, Plants and Equipment. The buildings, plants, structures and material items of equipment and other personal property owned or leased by the Company are, in all respects material to the business or financial condition of the Company, in good operating condition and repair (ordinary wear and tear excepted) and are adequate in all such respects for the purposes for which they are being used. the Company has not received notification that it is in violation of any applicable building, zoning, anti­ pollution, health, safety or other law, ordinance or regulation in respect of its buildings, plants or structures or their operations, which violation is likely to have a material adverse effect on the business or financial condition of the Company.

 

Section 5.11. No Condemnation or Expropriation. Neither the whole nor any portion of the property or leaseholds owned or held by the Company is subject to any governmental decree or order to be sold or is being condemned, expropriated, or otherwise taken by any Governmental Body or other Person with or without payment of compensation therefor, which action is likely to have a material adverse effect on the business or financial condition of the Company.

 

Section 5.12. Litigation. There is no action, suit, inquiry, proceeding or investigation by or before any court or Governmental Body pending or threatened in writing against or involving the Company.

 

Section 5.13. Absence of Certain Changes. Since the date of the Balance Sheet except as set forth on Exhibit

5.13 hereto, the Company has not:

 

(a)  suffered the damage or destruction of any of its properties or assets (whether or not covered by insurance) which is materially adverse to the business or financial condition of the Company, or made any disposition of any of its material properties or assets other than in the ordinary course of business;

 

(b)  made any change or amendment in its certificate of incorporation or by-laws, or other governing instruments;

 

(c)  issued or sold any Equity Securities or other securities, acquired, directly or indirectly, by redemption or otherwise,



any such Equity Securities, reclassified, split-up or otherwise changed any such Equity Security, or granted or entered into any options, warrants, calls or commitments of any kind with respect thereto;

 

(d)  organized any new Subsidiary or acquired any Equity Securities of any Person or any equity or ownership interest in any business;

 

(e)  borrowed any funds (other than from Seller or the Company) or incurred, or assumed or become subject to, whether directly or by way of guarantee or otherwise, any obligation or liability with respect to any such indebtedness for borrowed money; discharged, or satisfied any material claim, liability or obligation (absolute, accrued, contingent or otherwise), other than in the ordinary course of business;

 

(g)  prepaid any material obligation having a maturity of more than 90 days from the date such obligation was issued or incurred;

 

(h)  cancelled any material debts or waived any material claims or rights, except in the ordinary course of business;

 

(i)  disposed of or permitted to lapse any rights to the use of any material patent or registered trademark or copyright or other intellectual property owned or used by it;

 

(j)  granted any general increase in the compensation of officers or employees (including any such increase pursuant to any employee benefit plan);

 

(k)  purchased or entered into any contract or commitment to purchase any material quantity of raw materials or supplies, or sold or entered into any contract or commitment to sell any material quantity of property or assets, except (i) normal contracts or commitments for the purchase of, and normal purchases of, raw materials or supplies, made in the ordinary course business, (ii) normal contracts or commitments for the sale of, and normal sales of, inventory in the ordinary course of business, and (iii) other contracts, commitments, purchases or sales in the ordinary course of business;

 

(I) made any capital expenditures or additions to property, plant or equipment or acquired any other property or assets (other than raw materials and supplies);

 

(m)  written off or been required to write off any notes or accounts receivable;

 

(n)  written down or been required to write down any inventory;

 

(o)  entered into any collective bargaining or union contract or agreement; or

 

(p)  other than the ordinary course of business, incurred any liability required by generally accepted accounting principles to be reflected on a balance sheet and material to the business or financial condition of the Company taken as a whole.

 

Section 5.14. No Material Adverse Change. Since the date of the Balance Sheet, there has not been any material adverse change in the business or financial condition of the Company.

 

Section 5.15. Patents, Trademarks and Copyrights. Exhibit 5.15 contains a list of(a) all material patents and registered trademarks and copyrights ("Proprietary Rights"), and applications therefor, owned by the Company and (b) all material License agreements relating to Proprietary Rights to which the Company is a party. The sale of the Shares to Buyer will not adversely affect the use by the Company of any Proprietary Rights material to the business of the Company. These rights include, emails used in due course of business website access and website development agreements.

 

Section 5.16. Contracts and Commitments. The Company is not a party to any:

 

(a)  Contract or agreement including leases of personal or real property except as set forth on Exhibit 5.16;

 

(b)  Employee bonus, stock option or stock purchase, performance unit, profit-sharing, pension, savings, (as defined in Section 2(3) of The Employee Retirement Income Security Act of 1974, as amended ("ERISA") or program for any of the employees, former employees or retired employees of the Company;

 

(c)  Commitment, contract, or agreement that is currently expected by the management of the Company to result in any material loss upon completion or performance thereof;

 

(d)  Contract, agreement, or commitment that is material to the business of the Company with any officer, employee, agent, consultant, advisor, salesman, sales representative, value-added reseller, distributor or dealer; or

 

(e)  Employment agreement or other similar agreement that contains any severance or termination pay, liabilities or obligations.



(f)  All such contracts and agreements are in full force and effect. The Company is not in breach of, in violation of or in default under, any agreement, instrument, indenture, deed of trust, commitment, contract or other obligation of any type to which the Company is a party or is or may be bound that relates to tbe business of the Company or to which any of the assets or properties of the Company is subject, the effect of which breach, violation or default is likely to materially and adversely affect the business or financial condition of the Company. Seller has not guaranteed any obligations of the Company.

 

Section 5.17. Customers and Suppliers. Exhibit 5.17 sets forth a list of (a) the ten largest customers of the Company in terms of gross sales during the last two fiscal years up to the date of the Closing (b) the ten largest suppliers of the Company in terms of purchases during the last two fiscal years up to the date of the Closing. During the last two fiscal years up to the date of the Closing, there has not been any material adverse change in the business relationships of the Company with any customer or supplier named in Exhibit 5.17.

 

Section 5.18. Labor Relations. The Company is not a party to any collective bargaining agreement. Except for any matter which is not likely to have a material adverse effect on the business or financial condition of the Company, (a) the Company is in compliance with all applicable laws respecting employment and employment practices, terms and conditions of employment and wages and hours, and is not engaged in any unfair labor practice, (b) there is no unfair labor practice complaint against the Company pending before the National Labor Relations Board, (c) there is no labor strike, dispute, slowdown or stoppage pending or threatened against the Company, (d) no representation question exists respecting the employees of the Company, (e) the Company has not experienced any strike, work stoppage or other labor difficulty in the prior 10 years and (f) no collective bargaining agreement relating to employees of the Company is currently being negotiated.

 

Section 5.19. Employee Benefit Plans. Exhibit 5.19 contains a list of all employee pension and welfare benefit plans covering employees of the Company. No listed plan is (1) a multi-employer plan as defined in Section 3(37) of ERISA, or (2) a defined benefit plan as defined in Section 3(35) of ERISA, any listed individual account pension plan is duly qualified as tax exempt under the applicable sections of The Internal Revenue Code of 1986, as amended (the "Code"), each listed benefit plan and related funding arrangement, if any, has been maintained in all respects in compliance with its terms and the provisions of ERISA and the Code, and Exhibit 5.19 also lists all management incentive plans and all material employment contracts or severance arrangements pertaining to one or more specific employees.

 

Section 5.20. Key Personnel. Exhibit 5.20 contains a list of the names and current salaries of each employee, director and officer of the Company. None of such persons has informed Seller that he intends to terminate his employment with the Company. All key employees of the Company with access to confidential, proprietary information of the Company have entered into written agreements with the Company which provide for non-disclosure of such information and assignment to the Company of intellectual property rights with respect to technology developed in the context of employment by the Buyer.

 

Section 5.21. Compliance with Law. The operations of the Company have been conducted in accordance with all applicable laws and regulations of all Governmental Bodies having jurisdiction over them, except for violations thereof. The Company has never received any notification of any asserted present or past failure by it to comply with any such applicable laws or regulations. The Company has all material licenses, permits, orders or approvals from the Governmental Bodies required for the conduct of their businesses and are not in material violation of any such licenses, permits, orders and approvals. All such licenses, permits, orders ru1d approvals are in full force and effect, and no suspension or cancellation of any thereof has been threatened.

 

Section 5.22. Environmental Matters. At all times prior to the date hereof, The Company has complied in all respects with applicable environmental laws, orders, regulations, rules, and ordinances relating to the Properties (as hereinafter defined), the violation of which would have a material adverse effect on the business or financial condition of the Company. The environmental licenses, permits and authorizations that are material to the operations of the Company are in full force and effect. The Company has not released or caused to be released on or about the properties currently owned or leased by the Company (the "Properties") any (i) pollutants, (ii) contaminants, (iii) "Hazardous Substances," as that term is defined in Section I01(14) of the Comprehensive Environmental Response Act, as amended or (iv) "Regulated Substances," as that term is defined in Section 9001 of the Resource Conservation and Recovery Act, 42

U.S.C.A. Section 6901, et seq., as amended, which would be required to be remediated by any governmental agency with jurisdiction over the Properties under the authority of laws, regulations and ordinances as in effect and currently interpreted on the date hereof, which remediation would have a material adverse effect on the business or financial condition of the Company.

 

Section 5.23. Brokers or Finders. Seller has not employed any broker or finder or incurred any liability for any brokerage or finder's fees or commissions or similar payments in connection with the sale of the Shares to Buyer.



Section 5.24. Absence of Certain Commercial Practices. The Company has not directly or indirectly paid or delivered any fee, commission or other sum of money or item of property, however characterized, to any finder, agent, government official or other party, in the United States or any other country, which is in any manner related to the business or operations of the Company, which Seller or the Company knows or has reason to believe to have been illegal under any federal, state or local laws of the United States or any other country having jurisdiction; and the Company has not participated, directly or indirectly, in any boycotts or other similar practices affecting any of its actual or potential customers in violation of any applicable law or regulation.

 

Section 5.25. Transactions with Directors and Officers. The Company does not engage in business with any Person (other than Seller) in which any of the Buyer's directors or officers has a material equity interest. No director or officer of the Company owns any property, asset or right which is material to the business of the Company.

 

Section 5.26. Borrowing and Guarantees. Except as set forth on Exhibit 5.26, the Company (a) does not have any indebtedness for borrowed money, (b) is not lending or committed to lend any money (except for advances to employees in the ordinary course of business), and (c) is not a guarantor or surety with respect to the obligations of any Person.

 

Section 5.27. Product Warranties. Exhibit 5.27 contains the Buyer's standard form of product warranty and a summary description (by type) of product warranty claims made during the prior two years.

 

Section 5.28. Bank Accounts. Exhibit 5.28 contains the name and all signatories of each bank or other financial institution with which the Company has a bank account.

 

ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF BUYER.

 

Buyer represents and warrants to Seller as follows:

 

Section 6.1. Organization of Buyer; Authorization. Buyer is a corporation duly organized, validly existing and in good standing under the laws of Wyoming, with full corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action of Buyer and this Agreement constitutes a valid and binding obligation of Buyer, enforceable against it in accordance with its terms.

 

Section 6.2. Conflict as to Buyer. Neither the execution and delivery of this Agreement nor the performance of Buyer's obligations hereunder will (a) violate any provision of the certificate of incorporation or by-laws of Buyer, (b) violate, be in conflict with, or constitute a default (or an event which, with notice of lapse of time or both, would constitute a default) under any agreement or commitment to which Buyer is party or (c) violate any statute or law or any judgment, decree, order, regulation or rule of any court or other Governmental Body applicable to Buyer.

 

Section 6.3. Brokers or Finders. Buyer has not employed any broker or finder or incurred any liability for any brokerage or finder's fees or commissions or similar payments in connection with any of the transactions contemplated hereby.

 

Section 6.4. Consents and Approvals or Governmental Authorities. No consent, approval or authorization of, or declaration, filing or registration with, any Governmental Body is required to be made or obtained by Buyer in connection with the execution, delivery and performance of this Agreement by Buyer or the consummation of the purchase of the Shares by Buyer.

 

Section 6.5. Other Consents. No consent of any Person is required to be obtained by Buyer to the execution, delivery and performance of this Agreement by Buyer or the consummation of the purchase of the Shares by Buyer.

 

Section 6.6. Purchase for Investment. Buyer is purchasing the Shares solely for its own account for the purpose of investment and not with a view to, or for sale in connection with, any distribution of any portion thereof in violation of any applicable securities law.

 

ARTICLE 7. ACCESS AND REPORTING; FILINGS WITH GOVERNMENTAL AUTHORITIES.

 

Section 7.1. Access. Between the date of this Agreement and the Closing Date, Seller shall, and shall cause the Company to, (a) give Buyer and its authorized representatives reasonable access to all plants, offices, warehouse and other facilities and properties of the Company and to the books and records of the Company, (b) permit Buyer to make inspections thereof, and (c) cause its officers and its advisors to furnish Buyer with such financial and operating data and other information with respect to the business and properties of the Company and to discuss with Buyer and its authorized representatives the affairs of the Company, all as Buyer may from time to time reasonably request.



Section 7.2. Exclusivity. From the date hereof until the earlier of the Closing or the termination of this Agreement, the Company and the Seller shall not solicit or negotiate or enter into any agreement with any other Person with respect to or in furtherance of any proposal for a merger or business combination involving, or acquisition of any interest in, or (except in the ordinary course of business) sale of assets by, the Buyer, except for the acquisition of the Shares by Buyer.

 

Section 7.3 Tax Matters.

 

(a)  Tax Matters. Seller represents, warrants, covenants, agrees and promises as follows:

 

(i)  The Company has filed all nonconsolidated and non-combined Tax Returns and all consolidated or combined Tax Returns that include only the Company and/and not Seller or its other Affiliates (for the purposes of this Section 7.3, such tax Returns shall be considered nonconsolidated and non-combined Tax Returns) required to be filed through the date hereof and has paid any Tax due through the date hereof with respect to the time periods covered by such nonconsolidated and non-combined Tax Returns and shall timely pay any such Taxes required to be paid by it after the date hereof with respect to such Tax Returns and shall prepare and timely file all such nonconsolidated and non-combined Tax Returns required to be filed after the date hereof and through the Closing Date and pay all Taxes required to be paid by it with respect to the periods covered by such Tax Returns. All such Tax Returns filed after the date hereof shall, in each case, be prepared and filed in a manner consistent in all material respects (including elections and accounting methods and conventions) with such Tax Return most recently filed in the relevant jurisdiction prior to the date hereof, except as otherwise required by law or regulation or agreed to in writing by Buyer. Any such Tax Return filed or required to be filed after the date hereof shall not reflect any new elections or the adoption of any new accounting methods or conventions or other similar items, except to the extent such particular reflection or adoption is required to comply with any law or regulation, without the prior approval of Buyer.

 

(ii)  All consolidated or combined Tax Returns required to be filed by any person through the date hereof that are required or permitted to include the income, or reflect the activities, operations and transactions, of the Company for any taxable period have been timely filed, and the income, activities, operations and transactions of the Company have been properly included and reflected thereon.

 

(iii)  The Company has not agreed or is required to make any adjustment under Section 48l(a) of the Code by reason of a change in accounting method or otherwise or pursuant to any provision of the Tax Reform Act of 1986, the Revenue Act of 1987 or the Technical and Miscellaneous Revenue Act of 1988.

 

(iv)  The Seller, the Company or any predecessor or Affiliate of the foregoing has, at any time, filed a consent under Section 341(f)(l) of the Code, or agreed under Section 34l(f)(3) of the Code, to have the provisions of Section 341(f)(2) of the Code apply to any sale of its stock.

 

There is no (nor has there been any request for an) agreement, waiver or consent providing for an extension of time with respect to the assessment of any Taxes attributable to the Seller, the Company or its assets or operations and no power of attorney granted by the Company with respect to any Tax matter is currently in force.

 

(v)  There is no action, suit, proceeding, investigation, audit, claim, demand, deficiency or additional assessment in progress, pending or threatened against or with respect to any Tax attributable to Seller, the Company or their assets.

 

(vi)  All amounts required to be withheld as of the Closing Date for Taxes or otherwise have been withheld and paid when due to the appropriate agency or authority.

 

(vii)  Within 10 days prior to the Closing, Seller will deliver to Buyer true and complete copies of all income Tax Returns of the Company (or with respect to consolidated or combined returns, the portion thereof) and any other Tax Returns requested by Buyer as may be relevant the Company, or its assets or operations for any and all periods ending after the Closing Date, or for any Tax years which are subject to audit or investigation by any taxing authority or entity.

 

(viii)  There is no contract, agreement, plan or arrangement, including but not limited to the provisions of this Agreement, covering any employee or former employee of the Company that, individually or collectively, could give rise to the payment of any amount that would not be deductible pursuant to Section 280G or 162 of the Code.

 

(b)  Except as otherwise provided in this Section 7.3(b)(i) and Section 7.3(c), Seller shall be liable and responsible for, and shall indemnify and hold Buyer, the Buyer, , harmless form and against, (A) any and all Taxes of, due and payable by, or imposed with respect to, the Buyer, any predecessor thereof, and/or their assets or operations, for any and all Taxable periods ending on or prior to (or the portion of any Taxable periods through) the Closing Date (whether or not such Taxes have become due and payable); (B) any and all Taxes (irrespective of the period to which such Taxes relate or are attributable) resulting from the Company and/(or any predecessor thereof) having been (or ceasing to be) (x) affiliated with one or more of the Seller, its Affiliates, or any predecessor thereof or (y) included or required to be included in any consolidated, combined or unitary return for any period (or portion thereof) on or prior to the Closing Date; (C) any and all Taxes (irrespective of the period to which such Taxes relate or are attributable) of, due and payable by, or imposed with respect to Seller, or any



past or present parent, subsidiary or other Affiliate of Seller (or any predecessor thereof) other than the Company ; (D) any and all Taxes attributable to a breach of this Section 7.3 (subject to the survival provisions of Section 7.3(t) hereof); (E) any and all Taxes of, due and payable by, or imposed with respect to the Buyer, and/or their assets or operations arising out of any of the Contemplated Transactions (as defined below); and (F) any liability or obligation under any Tax Agreement or the termination thereof; provided, however, Seller shall not be liable for any Taxes due and payable by Buyer, the Buyer, resulting or arising from an election (or deemed election) under Section 338(a) of the Code (or foreign, state, or local equivalent thereof) (a "Buyer Section 338 Election"). For purposes of this Article 7, Contemplated Transactions means any transaction or event contemplated by this Agreement that occurs at or prior to the Closing, except any transaction or event directly relating to Buyer's financing and which, but for such financing (as opposed to Buyer having had sufficient funds on hand) would not have occurred.

 

(c)  Any Taxes with respect to the business, activities and assets of the Company that relate to a Tax period beginning on or before the Closing Date and ending after the Closing Date shall be paid by the Seller, in the case of real and personal property Taxes, on a per diem basis and, in the case of other Taxes, as determined from the books and records of the Company consistent with the Code and regulations thereunder and other applicable law, based on the actual operations of the Company or any such Subsidiary during the portion of such period ending on the Closing Date and the portion of such period beginning at the Closing, and each such portion of such period shall be deemed to be a Tax period subject to the provisions of Sections 7.3(b)(i) and 7.3(b)(ii) above. To the extent permitted by applicable law, Seller shall elect or take such other procedural action that is necessary or appropriate to treat a period that would otherwise end after the Closing Date as ending on Closing Date.

 

(d)  Except as provided in Section 7.3(c) hereof, any refunds or credits of Taxes that arise in, or are otherwise attributable to, a taxable year or Tax period (including a period deemed to be a tax period under Section 7.3(b)(iv)) ending on or before the Closing Date, shall be for the account of Seller. Any refunds or credits of Taxes that arise in, or are otherwise attributable to, a taxable year or Tax period (including a period deemed to be a Tax period under Section 7.3(b)(iv)) of Buyer, the Company ending after the Closing, including, without limitation, any refunds or credits that arise from the carryback of any deduction, loss or credit from a Tax period (including a period deemed to be a Tax period under Section 7.3(b)(iv)) ending subsequent to the Closing to a taxable year or Tax period (including a period deemed to be a Tax period under Section 7.3(b)(iv)) ending on or before the Closing, shall be for the account of Buyer. Seller shall cooperate in the filing of any carryback refund request.

 

(e)  The provisions of this Article 7 shall survive the Closing until five years following the latest of (i) the date upon which liability to which such claim may relate is barred by all applicable statutes of limitations (after taking into account any extensions); (ii) the date upon which any claim for refund or credit related to any such claim is barred by all applicable statutes of limitations (after taking into account any extensions); and (iii) with respect to any claim for which indemnity is being sought at the expiration of the periods described in clauses (i) and (ii) above, the date of a final determination in such proceeding with respect to such claim.

 

(f)  The provisions of this Article 7 set forth the exclusive and entire agreement of the parties relating to (i) sharing liabilities for Taxes, (ii) division of refunds of Taxes, (iii) control of proceedings relating to Taxes and (iv) filing of Tax Returns. The limitations contained in Section 9 of this Agreement shall not apply to the provisions of this Section 7.3.

 

(g)  Subsequent to the date hereof, the parties hereto shall provide each other, and Buyer shall cause the Company to provide Seller, with such cooperation and information relating to the Company as a pa1iy reasonably may request in (i) filing any Tax Return, amended Return, claim for refund, election or consent, (ii) determining any liability for Taxes or a right to refund of Taxes, (iii) conducting or defending any audit or other proceedings in respect of Taxes or(iv) conducting due diligence. Such cooperation and information shall include providing copies of all relevant Tax Returns, together with accompanying schedules and related work papers, documents relating to rulings or other determinations by taxing authorities and records concerning the ownership and tax basis of property which any party, the Seller or any of their affiliates or predecessors may possess. Seller shall make, and shall cause the Company to make, and Seller shall make, its employees, accountants and other advisors available on a mutually convenient basis to provide explanations of any documents or information required to be provided hereunder. The parties shall retain, and Buyer shall cause the Company to retain, all Tax Returns, schedules and work papers, and all material records and other documents relating thereto, until the expiration of the statute of limitations (and to the extent notified by any party, any extensions thereof) of the taxable years to which such Returns and other documents relate and, unless such returns and other documents are offered and delivered to Seller or Purchaser, as applicable, until the final determination of any Tax in respect of such years. In addition, the pa1ties shall comply, and Buyer shall cause the Company to comply with all applicable governmental record retention agreements entered into with any taxing authority with respect to the Company. Seller shall reimburse Buyer for reasonable out-of-pocket expenses incurred in connection with assisting each other under this Section 7.3(g). county, local, foreign and other taxes (including, without limitation, income, profits, premium, estimated, excise, sales, use, occupancy, gross receipts, franchise, ad valorem, severance, capital levy, production, transfer, withholding, employment and payroll related, and property taxes, import duties and other governmental charges and assessments), whether attributable to statutory or non-statutory rules and whether or not measured in whole or in part by net income, any included interest, additions to tax or interest, and penalties with respect thereto, and including expenses associated with contesting any proposed adjustment related to any of the foregoing "Tax Returns" (or "Tax Return" where the context requires) shall mean all returns, declarations, reports, information returns, and statements of whatsoever kind in respect of Taxes.



ARTICLE 8. CONDUCT OF THE SELLER'S BUSINESS PRIOR TO THE CLOSING.

 

Section 8.1. Operation in Ordinary Course. Between the date of this Agreement and the Closing Date, Seller shall cause the Company to conduct its businesses in all material respects in the ordinary course.

 

Section 8.2. Business Organization. Between the date of this Agreement and the Closing Date, Seller shall use its reasonable efforts, and shall cause the Company to use its respective reasonable efforts, to (a) preserve substantially intact the business organization of the Company and keep available the services of the present officers and employees of the Company and each of its Subsidiaries, and (b) preserve in all material respects the present business relationships and good will of the Company and each of its Subsidiaries.

 

Section 8.3. Corporate Organization. Between the date of this Agreement and the Closing Date, Seller shall not cause or permit any amendment of the certificate of incorporation or by-laws (or other governing instrument) of the Company, and shall cause the Company not to:

 

(a)  issue, sell or otherwise dispose of any of its Equity Securities, or create, sell or otherwise dispose of any options, rights, conversion rights or other agreements or commitments of any kind relating to the issuance, sale or disposition of any of its Equity Securities;

 

(b)  sell or otherwise dispose of any Equity Securities of the Company, or create or suffer to be created any Encumbrance thereon, or create, sell or otherwise dispose of any options, rights, conversion rights or other agreements or commitments of any kind relating to the sale or disposition of any Equity Securities of the Company;

 

(c)  reclassify, split up or otherwise change any of its Equity Securities;

 

(d)  be party to any merger, consolidation or other business combination;

 

(e)  sell, lease, license or otherwise dispose of any of its properties or assets (including, but not limited to rights with respect to patents and registered trademarks and copyrights or other proprietary rights), in ai1 amount which is material to the business or financial condition of the Company, taken as a whole, except in the ordinary course of business; or

 

(t) organize any new Subsidiary or acquire any Equity Securities of any Person or any equity or ownership interest in any business.

 

Section 8.4. Other Restrictions. Between the date of this Agreement and the Closing Date, Seller shall

cause the Company not to:

 

(a)  borrow any funds or otherwise become subject to, whether directly or by way of guarantee or otherwise, any indebtedness for borrowed money other than borrowings from Seller, the Company or another of its Subsidiaries;

 

(b)  create any material Encumbrance on any of its material properties or assets;

 

(c)  except in the ordinary course of business, increase in any manner the compensation of any director or officer or increase in any manner the compensation of any class of employees;

 

(d)  create or materially modify any material bonus, deferred compensation, pension, profit-sharing, retirement, insurance, stock purchase, stock option, or other fringe benefit plan, arrangement or practice or any other employee benefit plan (as defined in section 3(3) of ERISA);

 

(e)  make any capital expenditure or acquire any property or assets (other than raw materials and supplies) for a cost in excess of $5,000 in any one case or $7,500 in the aggregate;

 

(f)  enter into any agreement that materially restricts the Company from carrying on its business;

 

(g)  pay, discharge or satisfy any material claim, liability or obligation, absolute, accrued, contingent or otherwise, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities or obligations reflected in the Balance Sheet or incurred in the ordinary course of business and consistent with past practice since the date of the Balance Sheet; or

 

(b) cancel any material debts or waive any material claims or rights.



9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION.

 

Section 9.1. Survival. No representation or warranty contained in this Agreement or in any certificate or document delivered pursuant hereto shall survive the Closing, except for those contained in Sections 5.1, 5.2, 5.3, 5.6 (only as to Seller), 5.7 (only as to Seller), 5.23, 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7 and 6.8 (the "Surviving Representations and Warranties").

 

Section 9.2. Indemnification. Seller shall indemnify and hold harmless Buyer, and the Buyer and shall reimburse Buyer and the Company for any loss, liability, damage or expense (including reasonable attorneys fees) (collectively, "Damages") arising from or in connection with (a) any inaccuracy in any of the Representations and Warranties of Seller in this Agreement or (b) any failure by Seller to perform or comply with any agreement in this Agreement.

 

Section 9.3 Procedure for Indemnification. Promptly after receipt by an indemnified party under Section

9.3 or 9.4 of notice of the commencement of any action which give rise to Damages, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party under such Section, give notice to the indemnifying party of the commencement thereof. Failure so to notify the indemnifying party shall relieve it of any liability that it may have to any indemnified party to the extent that the defense of such action is materially prejudiced thereby, providing the indemnifying party did not receive or otherwise have actual notice thereof. If any such action shall be brought against an indemnified party and it shall give notice to the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, to assume the defense thereof with counsel satisfactory to such indemnified party and, after notice from the indemnifying party to such indemnified party of its election so the assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such Section for any fees of other counsel or any other expenses (unless such fees or expenses are incurred at the request of the indemnifying party), in each case subsequently incurred by such indemnified party in connection with the defense thereof, other than reasonable costs of investigation, provided, however, that Buyer and the Company shall be entitled, at their sole election, to retain control of any action or demand related to any intellectual property right matters or as to which the remedy would have a materially adverse on-going effect on the Company or its Subsidiaries. If the indemnifying party receives notice of any action or demand, it shall promptly notify the indemnified party as to whether it intends to control the defense thereof. ff an indemnifying party defends an action (a) no compromise or settlement thereof may be effected by the indemnifying party without the indemnified party's consent (which shall not be unreasonably withheld) unless (i) there is no finding or admission of any violation of law and no effect on any other claims that may be made against the indemnified party and (ii) the sole relief provided is monetary damages that are paid in full by the indemnifying party and (b) the indemnifying party shall have no liability with respect to any compromise or settlement thereof effected without its consent. If notice is given to an indemnifying party of the commencement of any action and it does not, within 20 days after the indemnified party's notice is given, give notice to the indemnified party of its election to assume the defense thereof, the indemnifying party shall not be bound by any compromise or settlement thereof effected by the indemnified party without its consent, which shall not be unreasonably withheld.

 

ARTICLE 10. TERMINATION.

 

Section 10.1 Termination. This Agreement may be terminated before the Closing occurs only as follows:

 

(a)  By written agreement of Seller and Buyer at any time;

 

(b)  By Seller, by notice to Buyer at any time, if one or more of the conditions specified in Section 4 is not satisfied at the time at which the Closing would otherwise occur or if satisfaction of such a condition is or becomes impossible;

 

(c)  By Buyer, by notice to Seller at any time, if one or more of the conditions specified in Section 3 is not satisfied at the time at which the Closing, would otherwise occur of if satisfaction of such a condition is or becomes impossible; or

 

(d)  By Buyer, for any reason during the Due Diligence Period.

 

Section 10.2. Effect of Termination. If this Agreement is terminated pursuant to Section 11.1, this Agreement shall terminate without any liability or further obligation of any party to another.

 

11. NOTICES.

 

Section 11.1 Notices. Signatures delivered by fax and/or e-maiV.pdf transmission shall be sufficient and binding as if they were originals, and such delivery shall constitute valid delivery of this Agreement. All notices, requests, demands, claims and other communications hereunder shall be in writing. Any notice, request, demand, claim or other communication hereunder shall be deemed duly delivered: (i) four Business Days after it is sent by registered or certified mail, return receipt requested, postage prepaid, or (ii) one Business Day after it is sent by fax for next Business Day delivery via a reputable nationwide overnight courier service, in each case to the intended recipient as set forth below:



If to EZM:Emissions Zero Module Inc 1870 West Prince Rd, Suite 41

Tucson, Arizona 85705 Via Email:

info@ezmusa.com

 

Job Aire Group Inc 13450 Piper Drive

Tucson, Arizona 85755 Via Email: tomlandryceo@gmail.com

 

Any Party may give any notice, request, demand, claim or other communication hereunder using any other means (including personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail or electronic mail), but no such notice, request, demand, claim or other communication shall be deemed to have been duly given unless and until it actually is received by the Party for whom it is intended. Any Party may change the address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth.

 

ARTICLE 12. MISCELLANEOUS.

 

Section 12.1. Exclusive Agreement; Amendment. This Agreement supersedes all prior agreements among the parties with respect to its subject matter and is intended (with the documents referred to herein) as a complete and exclusive statement of the terms of the agreement among the parties with respect thereto and cannot be changed or terminated orally. The Parties may mutually amend any provision of this Agreement at any time prior to the Effective Time, provided that no such amendment shall be valid unless the same shall be in writing and signed by all of the Parties. No waiver of any right or remedy hereunder shall be valid unless the same shall be in writing and signed by the Party giving such waiver. No waiver by any Party with respect to any default, misrepresentation or breach of warranty or covenant hereunder shall be deemed to extend to any prior or subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

 

Section 12.2. Expenses. Each party shall bear its own expenses incident to the preparation, negotiation,

execution and delivery of this Agreement and the performance of its obligations hereunder.

 

Section 12.3. Captions and beadings. The captions and headings in this Agreement are for convenience of reference only and shall not be given any effect in the interpretation of this agreement.

 

Section 12.4. No Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. Any waiver must be in writing.

 

Section 12.5. Covenant Not to Compete. For a period of five (5) years following the Closing Date, neither Seller nor any of its affiliates (other than those listed in Section 12.1 of the Exhibit A) shall, throughout the United States, Mexico, Canada and all other countries in which any products of The Company has been sold during the two-year period ending on the Closing Date, directly or indirectly, engage in any business that competes, directly or indirectly, with any business engaged in by the Company on the Closing Date; provided, however, that this Section 12.1 shall not (i) apply to Seller's ownership of not more than five percent (5%;) of any company whose securities are traded in the over-the-counter market or listed on a national securities exchange or foreign stock exchange if Seller does not exercise management control thereof, (ii) require Seller or any of its affiliates to divest itself of any properties or business now owned, or (iii) prohibit the acquisition of any properties, business or company a portion of which competes with the Company if Seller or such affiliate promptly announces its commitment to promptly divest itself of such portion or if the primary purpose of such acquisition is not the re-entry of such business. Buyer and Seller acknowledge and agree that the time, scope, geographic area and other provisions of this Section 12.1 have been specifically negotiated by sophisticated commercial parties and specifically hereby agree that such time, scope, geographic area and other provisions are reasonable under the circumstances. Buyer and Seller further agree that if, at any time, despite express agreement of the parties hereto, a court of competent jurisdiction holds that any portion of this Section 12.1 is unenforceable because any of the restrictions herein is unreasonable or for any other reason, the maximum restrictions of time, scope or geographic area reasonable under the circumstances, as determined by such court, will be substituted for any such restrictions held unenforceable. In the event of breach by Seller of any provision of this Section 12.1, Seller acknowledges that any such breach will cause irreparable damage to Buyer, the exact amount of which will be difficult or impossible to ascertain, and that remedies of law for any such breach will be inadequate. Accordingly, Buyer shall be entitled, in addition to any other rights or remedies existing in its favor, to obtain, without the necessity for any bond or other security, specific performance for injunctive relief in order to enforce, or prevent the breach of, any such provision.

 

Section 12.6. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be considered an original, but all of which together shall constitute the same instrument.



Section 12.7. Governing Law. This Agreement shall be governed by and construed in accordance with the internal Laws of the State of Arizona without giving effect to any choice or conflict of Law provision or rule (whether of the State of Arizona or any other jurisdiction) that would cause the application of Laws of any jurisdictions other than those of the State of Arizona.

 

Section 12.8 Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the Parties agree that the court making the determination of invalidity or unenforceability shall have the power to limit the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified.

 

Section 12.9 Remedies; Specific Performance. The Pai1ies agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof, and agree that in the event that any Party shall fail or refuse to consummate the transactions contemplated by this Agreement or if any default under or breach of any representation, warranty, covenant or condition of this Agreement on the part of any Party (the "Defaulting Party") shall have occurred that results m the failure to consummate the transactions contemplated by this Agreement, then in addition to the other remedies provided herein, the other Party or Parties (the "Non-Defaulting Party") shall be entitled to seek and obtain money damages from the Defaulting Party, and shall be entitled to an injunction or injunctions to prevent breaches of this Agreement or to an order of specific performance thereof against the Defaulting Party from a court of competent jurisdiction, in each case without the requirement of posting any other bond or other type of security. In addition, the Non-Defaulting Party shall be entitled to obtain from the Defaulting Party court costs and reasonable attorneys' fees incurred in connection with or in pursuit of enforcing the rights and remedies provided hereunder. Each of the Parties agrees that it will not oppose the granting of an injunction, specific performance or other equitable relief on the basis that any other party has an adequate remedy at Law or that any award of specific performance is not an appropriate remedy for any reason at Law or in equity.

 

Section 12.10. Construction. The language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any Party, including for drafting this Agreement. Any reference to any federal, state, local or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder unless the context requires otherwise.

 

Section 12.11. Press Releases and Announcements. No Party shall issue any press release or public announcement relating to the subject matter of this Agreement without the prior written approval of the other Parties: provided, however, that any Patty may make any public disclosure it believes in good faith is required by applicable law.

 

Section 12.12. No Third Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any person other than the Parties and their respective successors and permitted assigns.

 

Section 12.13. Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. No Party may assign either this Agreement or any of its rights, interests or obligations hereunder without the prior written approval of the other Parties.

 

Section 12.14. Counterparts and Facsimile Signature. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

Section 12.15. Miscellaneous Rights of the Seller. As set forth in Exhibit 12.15 The Seller shall be granted the opportunities and conditions as detailed in Exhibitl2.15 unless otherwise contraindicated in this Agreement.

 

 

 

***Intentionally Left Blank***



WITNESS WHEREOF, the Parties have executed this Agreement to be effective as of January 1, 2021.

 

(Signature)

 

JOB AIRE GROUP INC.

 

Seller:

Title:

 

Buyer:

EMISSIONS ZERO MODULE, INC.

 

 



Exhibit 12.15

 

Consideration of three essentials in the Agreement as follows:

 

1.  If for any reason EZM/Colambda Technologies cannot meet its responsibilities in completing the requirements of the Agreement the Seller {William Tiley), shall have the right to purchase the company at a price not to exceed the compensation he had received up to and including the date of his re­

purchase.

 

2.  If for any reason EZM/Colambda wishes to sell or transfer its interest in the company the Seller will retain the first right of refusal to purchase under the same terms and conditions.

3.  EZM/Colambda agrees to retain the Key Employees as designated in Exhibit 5.20 of the Agreement for no less than three years from the date of this agreement, in a manner consistent with their current employment agreement. The employees shall be compensated at no less than their current pay and benefits. In the event a current employment agreement cannot be produced by the date of this Agreement then, an employment agreement will be developed and put into place within 30 days of this Agreement.



Exhibit 1.3

 

Company to extinguish the following indebtedness



Exhibit 1.4

 

The Buyer shall assume the following indebtedness



Exhibit 1.5

 

Assets of Job Aire Group:

 

Company will own the following assets



Exhibit 5.9

 

Real Property held by Job Aire Group



Exhibit 5.13

 

 

Balance Sheet and Financial Statements (Attached)



Exhibit 5.15

 

Patents Trademarks, Email Address used in due course of business, Trade Names, Trademarks, Logos, Alias' and DBA's.



Exhibit 5.17

 

List of Suppliers and Ten Largest Customers



Exhibit 5.19

 

Employee Contracts and Benefit Plans



Exhibits 5.20

 

 

Key Employees



Exhibit 5.26

 

Guarantee and Borrowers

 

Except those listed the Company does not have any indebtedness for borrowed money.



Exhibit 5.28

 

Bank Accounts and Signatories


EMPLOYMENT AGREEMENT

 

This Employment Contract (“Agreement”) is made as of the 9th day of February, 2022 between Colambda Technologies, INC with a mailing address of 1870 W Prince Rd suite 41, Tucson, Arizona (“Employer”), and David Riggs (“Employee”).

 

WHEREAS the Employer desires to obtain the benefit of the services of the Employee, and the Employee desires to render such services on the terms and conditions set forth.

 

IN CONSIDERATION of the promises and other good and valuable consideration, the parties agree as follows:

 

I. Employment. The Employee acknowledges that they will, at all times, faithfully, industriously, and to the best of their skills, experience, and talents, perform all of the duties required of the Position. In carrying out these duties and responsibilities, the Employee shall comply with all Employer policies, procedures, rules, and regulations, both written and oral, as are announced by the Employer from time to time.

 

II. Position Title. As the Chief Executive Officer of Colambda Technologies, the Employee is required to perform all of their necessary job functions and duties, and all other duties that may be assigned to Employee from time to time by Employer. This is a Full-Time position with the expectation that the Employee will devote at least 40 hours per week to the Position. This may change from time to time as the Employer sees fit.

 

III. Compensation. As full compensation for all services provided, the Employee shall be paid at the rate of 180,000 dollars Annually and will be subject to review of their work on a periodic basis. Such payments shall be subject to standard mandatory deductions by the Employer (i.e., Federal & State Taxes, Social Security, Medicare) and shall be made on a Bi-Monthly basis. In order to facilitate the positive cash position for operations a portion of the salary, no less than 30% shall be deferred and payable in either cash or shares of stock based on the NCRE share value at the time of this document signing.

 

IV. Benefits. In addition, the Employee will be eligible to participate in bonuses and other employee benefit plans established by the Company for its employees.  

 

V. Probationary Period. It is understood and agreed that the first 45 days of employment shall constitute an initial term for the Employee (“Probationary Period”). During the Probationary Period, the Employee is not eligible for paid time off or other Benefits as mentioned in Section IV. During the Probationary Period, the Employer retains the right to exercise at will employment at any time and may terminate the Employee at any time without notice or cause in accordance with State and Federal laws.  The probationary period is considered closed at the signing due to prior satisfactory work with EZM, Inc prior to the merger.

 

VI. Paid Time Off. The Employee is not eligible for any type of paid or unpaid leave until after the Probationary Period has passed successfully.

 

The Employee shall be entitled to the following paid time off: (check all that apply)

 

- Paid Vacation time in the amount of 15 Days per year; 




- Paid Sick leave in the amount of 5 Days per year; 

 

- Other: A maximum of 10 days of vacation may be carried over to the following year. 

 

The Employer reserves the right to change or otherwise modify, in its sole discretion, any paid time off policies.

 

VII. Employment Type. The Employer and Employee agree to enter into an:

 

At-Will Employment Arrangement per Arizona law. As the Employer and Employee will attempt, in good-faith, to a long profitable and good standing relationship, the employment relationship shall be considered “At-Will” which means the relationship can be terminated by either party. Furthermore, termination may be for any reason, at any time, and with or without cause. Any statements or representation to the contrary should be regarded as void and invalid.

 

- Notice Required without cause. Termination of this Agreement must be made with at least  30 days notice to the other party. 

- No Notice Required. Under no circumstance shall notice, written or oral, be required to terminate this Agreement if it is for cause. 

 

VIII. Severance. Should Colambda Technologies terminate this Agreement at any time after the Probationary Period, the Employee:

 

Shall be Entitled to Severance if terminated without cause. Severance shall be equal to the Employee’s pay at the time of termination and shall last for a duration of 24 months after the termination date.  Employer will also pay the deferred salary immediately in either cash or stock at employee discretion.

 

Shall be Entitled to 6 months Severance if terminated with cause. If terminated with cause, the Employee’s pay, benefits, and any other privileges provided by the Employer shall terminate immediately and a severance payment will be made immediately.  Employer shall also pay the deferred salary immediately in either cash or stock at the employee discretion.

 

In the Event that Colambda Technologies is purchased by another entity.  If the purchasing company does not elect to maintain Riggs as CEO,  he is entitled to a severance of 2 years salary and immediate payment of deferred salary of employee choice.

 

IX. Non-Competition Covenant & Confidentiality. During the term of employment, the Employee may have access to certain confidential information and may develop certain proprietary information or inventions that will be the property of the Employer. Employee agrees not to disclose any such information that has been learned, created, or discuss future plans with anyone except for those within the company of the Employer and their qualified representatives, agents, and any authorized personnel. This shall be in effect for 12 Months after the termination of the Employee’s employment (“Non-Compete Period”). If the Non-Compete Period is longer than the State mandated time-frame, the Non-Compete Period shall be the maximum time-period allowed by law.




Employer requires that the Employee shall not bring any confidential or proprietary material of any former employer or to violate any other obligations the Employee may have to any former employer.

 

During the period that Employee renders services to the Employer, Employee agrees to not engage in any employment, business, or activity that is in any way competitive with the business or proposed business of the Employer. Employee shall disclose to the Employer in writing any other gainful employment, business, or activity that he or she is currently associated with or participating in that competes with the Employer. Employee shall not assist any other person or organization in competing with the Employer or in preparing to engage in competition with the business or prospective business(es) of the Employer.

 

Furthermore, it is agreed that during the Non-Compete Period the Employee shall not hire or attempt to employ any current employees of the Employer.

 

It is further acknowledged and agreed that during the Non-Compete Period the Employee shall not solicit business from the Employer, including but not limited to, current or past clients that were retained by the Employer.

 

X. Integration. This Agreement contains the entire agreement between the parties, superseding in all respects any and all prior oral or written agreements or understandings related to the employment of the Employee by the Employer and shall be amended or modified only by written instrument signed by both of the parties hereto.

 

XI. Authorization to Work. Please note that due to federal regulations adopted in the Immigration Reform and Control Act of 1986, within three (3) business days of starting the Position that the Employee will need to present documentation demonstrating their authorization to work in the United States.

 

XII. Severability of Contract. The parties hereto agree that in the event any article or part thereof of this contract is held to be unenforceable or invalid, then said article or part shall be struck, and all remaining provisions shall remain in full force and effect.

 

XIII. Choice of Law. This contract shall be governed, interpreted, and construed in accordance with the laws of the State of Arizona.

 

If the Employee decides to accept this Agreement, please sign in the space indicated. The signature will acknowledge this Agreement has been read, understood, and agreed to the aforementioned terms and conditions.

 

IN WITNESS WHEREOF the Employer has caused this Agreement to be executed by its duly authorized officers and the Employee has agreed as of the date first above written.

 

 

 

 

EMPLOYER

 

 

 

 

 

 

Date

 

Signature

 

 

 

 

 

 

 

 




Print Name

 

 

 

 

 

 

 

 

Title

 

 

 

 

 

EMPLOYEE

 

 

 

 

 

 

Date

 

Signature

 

 

 

 

 

 

 

 

Title

 

 



EMPLOYMENT AGREEMENT

 

This Employment Contract (“Agreement”) is made as of the 9th day of February, 2022 between Colambda Technologies, INC with a mailing address of 1870 W Prince Rd suite 41, Tucson, Arizona (“Employer”), and Russ Klawunn (“Employee”).

 

WHEREAS the Employer desires to obtain the benefit of the services of the Employee, and the Employee desires to render such services on the terms and conditions set forth.

 

IN CONSIDERATION of the promises and other good and valuable consideration, the parties agree as follows:

 

I. Employment. The Employee acknowledges that they will, at all times, faithfully, industriously, and to the best of their skills, experience, and talents, perform all of the duties required of the Position. In carrying out these duties and responsibilities, the Employee shall comply with all Employer policies, procedures, rules, and regulations, both written and oral, as are announced by the Employer from time to time.

 

II. Position Title. As the Chief Operations Officer of Colambda Technologies, the Employee is required to perform all of their necessary job functions and duties, and all other duties that may be assigned to Employee from time to time by Employer. This is a Full-Time position with the expectation that the Employee will devote at least 40 hours per week to the Position. This may change from time to time as the Employer sees fit.

 

III. Compensation. As full compensation for all services provided, the Employee shall be paid at the rate of 145,000 dollars Annually and will be subject to review of their work on a periodic basis. Such payments shall be subject to standard mandatory deductions by the Employer (i.e., Federal & State Taxes, Social Security, Medicare) and shall be made on a Bi-Monthly basis. In order to facilitate the positive cash position for operations a portion of the salary, no less than 30% shall be deferred and payable in either cash or shares of stock based on the NCRE share value at the time of this document signing.

 

IV. Benefits. In addition, the Employee will be eligible to participate in bonuses and other employee benefit plans established by the Company for its employees.  

 

V. Probationary Period. It is understood and agreed that the first 45 days of employment shall constitute an initial term for the Employee (“Probationary Period”). During the Probationary Period, the Employee is not eligible for paid time off or other Benefits as mentioned in Section IV. During the Probationary Period, the Employer retains the right to exercise at will employment at any time and may terminate the Employee at any time without notice or cause in accordance with State and Federal laws.  The probationary period is considered closed at the signing due to prior satisfactory work with EZM, Inc prior to the merger.

 

VI. Paid Time Off. The Employee is not eligible for any type of paid or unpaid leave until after the Probationary Period has passed successfully.




The Employee shall be entitled to the following paid time off: (check all that apply)

 

- Paid Vacation time in the amount of 15 Days per year; 

 

- Paid Sick leave in the amount of 5 Days per year; 

 

- Other: A maximum of 10 days of vacation may be carried over to the following year. 

 

The Employer reserves the right to change or otherwise modify, in its sole discretion, any paid time off policies.

 

VII. Employment Type. The Employer and Employee agree to enter into an:

 

At-Will Employment Arrangement per Arizona law. As the Employer and Employee will attempt, in good-faith, to a long profitable and good standing relationship, the employment relationship shall be considered “At-Will” which means the relationship can be terminated by either party. Furthermore, termination may be for any reason, at any time, and with or without cause. Any statements or representation to the contrary should be regarded as void and invalid.

 

- Notice Required without cause. Termination of this Agreement must be made with at least  30 days notice to the other party. 

- No Notice Required. Under no circumstance shall notice, written or oral, be required to terminate this Agreement if it is for cause. 

 

VIII. Severance. Should Colambda Technologies terminate this Agreement at any time after the Probationary Period, the Employee:

 

Shall be Entitled to Severance if terminated without cause. Severance shall be equal to the Employee’s pay at the time of termination and shall last for a duration of 24 months after the termination date.  Employer will also pay the deferred salary immediately in either cash or stock at employee discretion.

 

Shall be Entitled to 6 months Severance if terminated with cause. If terminated with cause, the Employee’s pay, benefits, and any other privileges provided by the Employer shall terminate immediately and a severance payment will be made immediately.  Employer shall also pay the deferred salary immediately in either cash or stock at the employee discretion.

 

In the Event that Colambda Technologies is purchased by another entity.  If the purchasing company does not elect to maintain Hush as CFO,  he is entitled to a severance of 2 years salary and immediate payment of deferred salary of employee choice.




IX. Non-Competition Covenant & Confidentiality. During the term of employment, the Employee may have access to certain confidential information and may develop certain proprietary information or inventions that will be the property of the Employer. Employee agrees not to disclose any such information that has been learned, created, or discuss future plans with anyone except for those within the company of the Employer and their qualified representatives, agents, and any authorized personnel. This shall be in effect for 12 Months after the termination of the Employee’s employment (“Non-Compete Period”). If the Non-Compete Period is longer than the State mandated time-frame, the Non-Compete Period shall be the maximum time-period allowed by law.

 

Employer requires that the Employee shall not bring any confidential or proprietary material of any former employer or to violate any other obligations the Employee may have to any former employer.

 

During the period that Employee renders services to the Employer, Employee agrees to not engage in any employment, business, or activity that is in any way competitive with the business or proposed business of the Employer. Employee shall disclose to the Employer in writing any other gainful employment, business, or activity that he or she is currently associated with or participating in that competes with the Employer. Employee shall not assist any other person or organization in competing with the Employer or in preparing to engage in competition with the business or prospective business(es) of the Employer.

 

Furthermore, it is agreed that during the Non-Compete Period the Employee shall not hire or attempt to employ any current employees of the Employer.

 

It is further acknowledged and agreed that during the Non-Compete Period the Employee shall not solicit business from the Employer, including but not limited to, current or past clients that were retained by the Employer.

 

X. Integration. This Agreement contains the entire agreement between the parties, superseding in all respects any and all prior oral or written agreements or understandings related to the employment of the Employee by the Employer and shall be amended or modified only by written instrument signed by both of the parties hereto.

 

XI. Authorization to Work. Please note that due to federal regulations adopted in the Immigration Reform and Control Act of 1986, within three (3) business days of starting the Position that the Employee will need to present documentation demonstrating their authorization to work in the United States.

 

XII. Severability of Contract. The parties hereto agree that in the event any article or part thereof of this contract is held to be unenforceable or invalid, then said article or part shall be struck, and all remaining provisions shall remain in full force and effect.

 

XIII. Choice of Law. This contract shall be governed, interpreted, and construed in accordance with the laws of the State of Arizona.

 

If the Employee decides to accept this Agreement, please sign in the space indicated. The signature will acknowledge this Agreement has been read, understood, and agreed to the aforementioned terms and conditions.




IN WITNESS WHEREOF the Employer has caused this Agreement to be executed by its duly authorized officers and the Employee has agreed as of the date first above written.

 

 

 

EMPLOYER

 

 

 

 

Date

 

Signature

 

 

 

 

 

 

 

 

Print Name

 

 

 

 

 

 

 

 

Title

 

 

 

 

 

EMPLOYEE

 

 

 

 

 

 

Date

 

Signature

 

 

 

 

 

 

 

 

Title

 

 



EMPLOYMENT AGREEMENT

 

This Employment Contract (“Agreement”) is made as of the 9th day of February, 2022 between Colambda Technologies, INC with a mailing address of 1870 W Prince Rd suite 41, Tucson, Arizona (“Employer”), and Sumit Isranggul Na Ayudaha (“Employee”).

 

WHEREAS the Employer desires to obtain the benefit of the services of the Employee, and the Employee desires to render such services on the terms and conditions set forth.

 

IN CONSIDERATION of the promises and other good and valuable consideration, the parties agree as follows:

 

I. Employment. The Employee acknowledges that they will, at all times, faithfully, industriously, and to the best of their skills, experience, and talents, perform all of the duties required of the Position. In carrying out these duties and responsibilities, the Employee shall comply with all Employer policies, procedures, rules, and regulations, both written and oral, as are announced by the Employer from time to time.

 

II. Position Title. As the Chief Technology Officer (CTO)of Colambda Technologies, the Employee is required to perform all of their necessary job functions and duties, and all other duties that may be assigned to Employee from time to time by Employer. This is a Full-Time position with the expectation that the Employee will devote at least 40 hours per week to the Position. This may change from time to time as the Employer sees fit.

 

III. Compensation. As full compensation for all services provided, the Employee shall be paid at the rate of 145,000 dollars Annually and will be subject to review of their work on a periodic basis. Such payments shall be subject to standard mandatory deductions by the Employer (i.e., Federal & State Taxes, Social Security, Medicare) and shall be made on a Bi-Monthly basis. In order to facilitate the positive cash position for operations a portion of the salary, no less than 30% shall be deferred and payable in either cash or shares of stock based on the NCRE share value at the time of this document signing.

 

IV. Benefits. In addition, the Employee will be eligible to participate in bonuses and other employee benefit plans established by the Company for its employees.  

 

V. Probationary Period. It is understood and agreed that the first 45 days of employment shall constitute an initial term for the Employee (“Probationary Period”). During the Probationary Period, the Employee is not eligible for paid time off or other Benefits as mentioned in Section IV. During the Probationary Period, the Employer retains the right to exercise at will employment at any time and may terminate the Employee at any time without notice or cause in accordance with State and Federal laws.  The probationary period is considered closed at the signing due to prior satisfactory work with EZM, Inc prior to the merger.

 

VI. Paid Time Off. The Employee is not eligible for any type of paid or unpaid leave until after the Probationary Period has passed successfully.




The Employee shall be entitled to the following paid time off: (check all that apply)

 

- Paid Vacation time in the amount of 15 Days per year; 

 

- Paid Sick leave in the amount of 5 Days per year; 

 

- Other: A maximum of 10 days of vacation may be carried over to the following year. 

 

The Employer reserves the right to change or otherwise modify, in its sole discretion, any paid time off policies.

 

VII. Employment Type. The Employer and Employee agree to enter into an:

 

At-Will Employment Arrangement per Arizona law. As the Employer and Employee will attempt, in good-faith, to a long profitable and good standing relationship, the employment relationship shall be considered “At-Will” which means the relationship can be terminated by either party. Furthermore, termination may be for any reason, at any time, and with or without cause. Any statements or representation to the contrary should be regarded as void and invalid.

 

- Notice Required without cause. Termination of this Agreement must be made with at least  30 days notice to the other party. 

- No Notice Required. Under no circumstance shall notice, written or oral, be required to terminate this Agreement if it is for cause. 

 

VIII. Severance. Should Colambda Technologies terminate this Agreement at any time after the Probationary Period, the Employee:

 

Shall be Entitled to Severance if terminated without cause. Severance shall be equal to the Employee’s pay at the time of termination and shall last for a duration of 24 months after the termination date.  Employer will also pay the deferred salary immediately in either cash or stock at employee discretion.

 

Shall be Entitled to 6 months Severance if terminated with cause. If terminated with cause, the Employee’s pay, benefits, and any other privileges provided by the Employer shall terminate immediately and a severance payment will be made immediately.  Employer shall also pay the deferred salary immediately in either cash or stock at the employee discretion.

 

In the Event that Colambda Technologies is purchased by another entity.  If the purchasing company does not elect to maintain Sumit as CTO,  he is entitled to a severance of 2 years salary and immediate payment of deferred salary of employee choice.




IX. Non-Competition Covenant & Confidentiality. During the term of employment, the Employee may have access to certain confidential information and may develop certain proprietary information or inventions that will be the property of the Employer. Employee agrees not to disclose any such information that has been learned, created, or discuss future plans with anyone except for those within the company of the Employer and their qualified representatives, agents, and any authorized personnel. This shall be in effect for 12 Months after the termination of the Employee’s employment (“Non-Compete Period”). If the Non-Compete Period is longer than the State mandated time-frame, the Non-Compete Period shall be the maximum time-period allowed by law.

 

Employer requires that the Employee shall not bring any confidential or proprietary material of any former employer or to violate any other obligations the Employee may have to any former employer.

 

During the period that Employee renders services to the Employer, Employee agrees to not engage in any employment, business, or activity that is in any way competitive with the business or proposed business of the Employer. Employee shall disclose to the Employer in writing any other gainful employment, business, or activity that he or she is currently associated with or participating in that competes with the Employer. Employee shall not assist any other person or organization in competing with the Employer or in preparing to engage in competition with the business or prospective business(es) of the Employer.

 

Furthermore, it is agreed that during the Non-Compete Period the Employee shall not hire or attempt to employ any current employees of the Employer.

 

It is further acknowledged and agreed that during the Non-Compete Period the Employee shall not solicit business from the Employer, including but not limited to, current or past clients that were retained by the Employer.

 

X. Integration. This Agreement contains the entire agreement between the parties, superseding in all respects any and all prior oral or written agreements or understandings related to the employment of the Employee by the Employer and shall be amended or modified only by written instrument signed by both of the parties hereto.

 

XI. Authorization to Work. Please note that due to federal regulations adopted in the Immigration Reform and Control Act of 1986, within three (3) business days of starting the Position that the Employee will need to present documentation demonstrating their authorization to work in the United States.

 

XII. Severability of Contract. The parties hereto agree that in the event any article or part thereof of this contract is held to be unenforceable or invalid, then said article or part shall be struck, and all remaining provisions shall remain in full force and effect.

 

XIII. Choice of Law. This contract shall be governed, interpreted, and construed in accordance with the laws of the State of Arizona.

 

If the Employee decides to accept this Agreement, please sign in the space indicated. The signature will acknowledge this Agreement has been read, understood, and agreed to the aforementioned terms and conditions.




IN WITNESS WHEREOF the Employer has caused this Agreement to be executed by its duly authorized officers and the Employee has agreed as of the date first above written.

 

 

EMPLOYER

 

 

 

 

 

 

Date

 

Signature

 

 

 

 

 

 

 

 

Print Name

 

 

 

 

 

 

 

 

Title

 

 

 

 

 

EMPLOYEE

 

 

 

 

 

 

Date

 

Signature

 

 

 

 

 

 

 

 

Title

 

 



EMPLOYMENT AGREEMENT

 

This Employment Contract (“Agreement”) is made as of the 9th day of February, 2022 between Colambda Technologies, INC with a mailing address of 1870 W Prince Rd suite 41, Tucson, Arizona (“Employer”), and Russ Klawunn (“Employee”).

 

WHEREAS the Employer desires to obtain the benefit of the services of the Employee, and the Employee desires to render such services on the terms and conditions set forth.

 

IN CONSIDERATION of the promises and other good and valuable consideration, the parties agree as follows:

 

I. Employment. The Employee acknowledges that they will, at all times, faithfully, industriously, and to the best of their skills, experience, and talents, perform all of the duties required of the Position. In carrying out these duties and responsibilities, the Employee shall comply with all Employer policies, procedures, rules, and regulations, both written and oral, as are announced by the Employer from time to time.

 

II. Position Title. As the Chief Operations Officer of Colambda Technologies, the Employee is required to perform all of their necessary job functions and duties, and all other duties that may be assigned to Employee from time to time by Employer. This is a Full-Time position with the expectation that the Employee will devote at least 40 hours per week to the Position. This may change from time to time as the Employer sees fit.

 

III. Compensation. As full compensation for all services provided, the Employee shall be paid at the rate of 145,000 dollars Annually and will be subject to review of their work on a periodic basis. Such payments shall be subject to standard mandatory deductions by the Employer (i.e., Federal & State Taxes, Social Security, Medicare) and shall be made on a Bi-Monthly basis. In order to facilitate the positive cash position for operations a portion of the salary, no less than 30% shall be deferred and payable in either cash or shares of stock based on the NCRE share value at the time of this document signing.

 

IV. Benefits. In addition, the Employee will be eligible to participate in bonuses and other employee benefit plans established by the Company for its employees.  

 

V. Probationary Period. It is understood and agreed that the first 45 days of employment shall constitute an initial term for the Employee (“Probationary Period”). During the Probationary Period, the Employee is not eligible for paid time off or other Benefits as mentioned in Section IV. During the Probationary Period, the Employer retains the right to exercise at will employment at any time and may terminate the Employee at any time without notice or cause in accordance with State and Federal laws.  The probationary period is considered closed at the signing due to prior satisfactory work with EZM, Inc prior to the merger.

 

VI. Paid Time Off. The Employee is not eligible for any type of paid or unpaid leave until after the Probationary Period has passed successfully.

 




The Employee shall be entitled to the following paid time off: (check all that apply)

 

- Paid Vacation time in the amount of 15 Days per year; 

 

- Paid Sick leave in the amount of 5 Days per year; 

 

- Other: A maximum of 10 days of vacation may be carried over to the following year. 

 

The Employer reserves the right to change or otherwise modify, in its sole discretion, any paid time off policies.

 

VII. Employment Type. The Employer and Employee agree to enter into an:

 

At-Will Employment Arrangement per Arizona law. As the Employer and Employee will attempt, in good-faith, to a long profitable and good standing relationship, the employment relationship shall be considered “At-Will” which means the relationship can be terminated by either party. Furthermore, termination may be for any reason, at any time, and with or without cause. Any statements or representation to the contrary should be regarded as void and invalid.

 

- Notice Required without cause. Termination of this Agreement must be made with at least  30 days notice to the other party. 

- No Notice Required. Under no circumstance shall notice, written or oral, be required to terminate this Agreement if it is for cause. 

 

VIII. Severance. Should Colambda Technologies terminate this Agreement at any time after the Probationary Period, the Employee:

 

Shall be Entitled to Severance if terminated without cause. Severance shall be equal to the Employee’s pay at the time of termination and shall last for a duration of 24 months after the termination date.  Employer will also pay the deferred salary immediately in either cash or stock at employee discretion.

 

Shall be Entitled to 6 months Severance if terminated with cause. If terminated with cause, the Employee’s pay, benefits, and any other privileges provided by the Employer shall terminate immediately and a severance payment will be made immediately.  Employer shall also pay the deferred salary immediately in either cash or stock at the employee discretion.

 

In the Event that Colambda Technologies is purchased by another entity.  If the purchasing company does not elect to maintain Klawunn as COO,  he is entitled to a severance of 2 years salary and immediate payment of deferred salary of employee choice.




IX. Non-Competition Covenant & Confidentiality. During the term of employment, the Employee may have access to certain confidential information and may develop certain proprietary information or inventions that will be the property of the Employer. Employee agrees not to disclose any such information that has been learned, created, or discuss future plans with anyone except for those within the company of the Employer and their qualified representatives, agents, and any authorized personnel. This shall be in effect for 12 Months after the termination of the Employee’s employment (“Non-Compete Period”). If the Non-Compete Period is longer than the State mandated time-frame, the Non-Compete Period shall be the maximum time-period allowed by law.

 

Employer requires that the Employee shall not bring any confidential or proprietary material of any former employer or to violate any other obligations the Employee may have to any former employer.

 

During the period that Employee renders services to the Employer, Employee agrees to not engage in any employment, business, or activity that is in any way competitive with the business or proposed business of the Employer. Employee shall disclose to the Employer in writing any other gainful employment, business, or activity that he or she is currently associated with or participating in that competes with the Employer. Employee shall not assist any other person or organization in competing with the Employer or in preparing to engage in competition with the business or prospective business(es) of the Employer.

 

Furthermore, it is agreed that during the Non-Compete Period the Employee shall not hire or attempt to employ any current employees of the Employer.

 

It is further acknowledged and agreed that during the Non-Compete Period the Employee shall not solicit business from the Employer, including but not limited to, current or past clients that were retained by the Employer.

 

X. Integration. This Agreement contains the entire agreement between the parties, superseding in all respects any and all prior oral or written agreements or understandings related to the employment of the Employee by the Employer and shall be amended or modified only by written instrument signed by both of the parties hereto.

 

XI. Authorization to Work. Please note that due to federal regulations adopted in the Immigration Reform and Control Act of 1986, within three (3) business days of starting the Position that the Employee will need to present documentation demonstrating their authorization to work in the United States.

 

XII. Severability of Contract. The parties hereto agree that in the event any article or part thereof of this contract is held to be unenforceable or invalid, then said article or part shall be struck, and all remaining provisions shall remain in full force and effect.

 

XIII. Choice of Law. This contract shall be governed, interpreted, and construed in accordance with the laws of the State of Arizona.

 

If the Employee decides to accept this Agreement, please sign in the space indicated. The signature will acknowledge this Agreement has been read, understood, and agreed to the aforementioned terms and conditions.




IN WITNESS WHEREOF the Employer has caused this Agreement to be executed by its duly authorized officers and the Employee has agreed as of the date first above written.

 

 

EMPLOYER

 

 

 

 

Date

 

Signature

 

 

 

 

 

 

 

 

Print Name

 

 

 

 

 

 

 

 

Title

 

 

 

 

 

EMPLOYEE

 

 

 

 

 

 

Date

 

Signature

 

 

 

 

 

 

 

 

Title

 

 


CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULE 13a-14

 

I, David Riggs, certify that:

 

1. I have reviewed this Report on Form 8-K of Colambda Technologies, Inc. (formerly New Century Resources Corporation);

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: July 14, 2022

 

 

 

/s/ David Riggs

 

David Riggs

 

Principal Executive Officer

 


 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULE 13a-14

 

I, Kent Hush, certify that:

 

1. I have reviewed this Report on Form 8-K of Colambda Technologies, Inc. (formerly New Century Resources Corporation);

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: July 14, 2022

 

 

 

/s/ Kent Hush

 

Kent Hush

 

Principal Financial Officer

 

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

 

In connection with this Report of Colambda Technologies (formerly New Century Resources Corporation), (the “Company”), on Form 8-K as filed with the Securities and Exchange Commission (the “Report”), I, David Riggs, President, Director, and CEO of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

 

 

(1)

the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

 

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

 

/s/ David Riggs

 

David Riggs

 

Principal Executive Officer

 

 

July 14, 2022

 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 


 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

 

In connection with this Report of Colambda Technologies (formerly New Century Resources Corporation), (the “Company”), on Form 8-K, as filed with the Securities and Exchange Commission (the “Report”), I, Kent Hush, Treasurer, Director, and CFO of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

 

 

(1)

the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

 

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

 

/s/ Kent Hush

 

Kent Hush

 

Principal Financial Officer

 

 

July 14, 2022

 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Proforma Balance Sheet

March 31, 2022

 

 

Adjustments

 

Colambda, Technologies, Inc.

Emissions Zero Module, LLC (Consolidated)

DR

CR

Pro Forma

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash

-

784,016

-

-

784,016

Accounts receivable

-

1,539,919

-

-

1,539,919

Due From NCRE

-

73,106

-

73,106

-

Prepaid expenses

-

27,000

-

-

27,000

Subscription Receivable

-

15,000

-

-

15,000

Other Current Assets

-

700

-

-

700

Right of Use Asset

-

70,540

-

-

70,540

Total current assets

-

2,510,280

 

 

2,437,175

 

 

 

 

 

 

Fixed Assets

 

 

 

 

 

Furniture and Equipment

-

46,000

-

-

46,000

Total Fixed Assets

-

46,000

-

-

46,000

Less Accumulated Depreciation

-

(7,400)

-

-

(7,400)

Net Fixed Assets

-

38,600

-

-

38,600

 

 

 

 

 

 

Total assets

-

2,548,880

-

73,106

2,475,775

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable and accrued expenses

14,784

2,605

-

-

17,389

Note Payable

73,106

-

73,106

-

-

Advances From Stockholders

184,227

-

-

-

184,227

Accrued Interest

16,509

-

-

-

16,509

Convertible Notes Payable

16,122

-

-

-

16,122

Acquisition Payable

 

240,000

-

-

240,000

Notes payable

-

1,215,000

1,215,000

-

-

Accrued interest

-

96,159

-

-

96,159

Payroll Liabilities

 

481,602

-

-

481,602

Total current liabilities

304,748

2,035,366

1,288,106

-

1,052,008

 

 

 

 

 

 

Long-term liabilities:

 

 

 

 

 

Acquisition Payable

-

334,888

-

-

334,888

Long Term Lease Liability

-

71,192

-

-

71,192

Total long-term liabilities

-

406,081

-

-

406,081

 

 

 

 

 

 

Total liabilities

304,748

2,441,447

1,228,106

-

1,458,089

 

 

 

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

Common Stock

12,482

167,158

56,462

-

123,178

Additional paid in capital

1,760,158

513,499

794,706

-

1,478,951

Accumulated Deficit

(2,077,388)

(573,224)

 

2,066,168

(584,444)

Total stockholders' equity/(deficit)

(304,748)

107,433

851,168

2,066,168

1,017,685

Total liabilities and stockholders' equity

-

2,548,880

2,139,274

2,139,274

2,475,775


 

 

 

Proforma Statement of Operations

March 31, 2022

 

 

 

Colambda Technologies

 

Emissions Zero Module (Consolidated)

 

Pro Forma

 

 

Three Months

 

Three Months

 

Three Months

 

 

March 31

 

March 31

 

March 31

 

 

2022

 

2022

 

2022

 

 

 

 

 

 

 

Sales

$

-

$

        3,802,402

$

      3,802,402

Cost of Sales

 

-

 

        3,433,382

 

      3,433,382

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

-

 

           369,020

 

         369,020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses:

 

 

 

 

 

 

Salaries

 

-

 

           105,711

 

         105,711

Depreciation and Amortization

 

-

 

               2,300

 

             2,300

Legal and professional fees

 

10,393

 

             80,309

 

           90,702

Marketing and Advertising

 

-

 

               3,464

 

             3,464

Acquisition Expense

 

-

 

                      -

 

                    -

Research and Development

 

-

 

               4,741

 

             4,741

 Taxes

 

-

 

               4,240

 

             4,240

 Other general and administrative

 

429

 

           193,912

 

         194,341

Total operating expenses

 

10,822

 

           394,678

 

         405,500

(Loss) from operations

 

(10,822)

 

           (25,658)

 

         (36,480)

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 Interest income

 

-

 

                      -

 

                    -

 Forgiven debt

 

-

 

                      -

 

                    -

 Interest (expense)

 

(398)

 

           (35,507)

 

         (35,905)

   (Loss) before taxes

 

(11,220)

 

           (61,165)

 

         (72,385)

 

 

 

 

 

 

 

Provision (credit) for taxes on income

 

-

 

                      -

 

                    -

   Net (loss)

$

(11,220)

$

(61,165)

$

(72,385)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per common share

$

(0.00)

$

-   

$

(0.00)

 

 

 

 

 

 

 

Weighted average number of shares outstanding

 

123,176,724

 

-

 

123,176,724

 

 

Report of Independent Registered Public Accounting Firm

 

Board of Directors and Shareholders

Emissions Zero Module, LLC

 

Opinion on the Financial Statements

 

We have audited the accompanying balance sheet of Emissions Zero Module, LLC (the “Company”) as of December 31, 2021, and the related statement of operations, statement of stockholders’ deficit, and cash flows for the period from inception (February 11, 2021) to December 31, 2021, and the related notes and schedules (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.

 

Basis for Opinion

 

These financial statements are the responsibility of the entity’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.


 

Going Concern Uncertainty

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in note 3 to the financial statements, the Company has incurred losses since inception of $519,059. These factors create an uncertainty as to the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Emphasis of Matters-Risks and Uncertainties

 

The Company is not able to predict the ultimate impact that COVID -19 will have on its business. However, if the current economic conditions continue, the pandemic could have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company plans to operate.

 

/s/ Gries & Associates, LLC

 

We have served as the Company's auditor since 2022.

Denver, CO

July 1, 2022


 

 

Emissions Zero Module, Inc.

BALANCE SHEET

 

December 31

 

2021

 

(Audited)

 

 

ASSETS

 

Current assets:

 

Cash

$642,908  

Due From NCRE

62,285  

Prepaid expenses

7,000  

Down Payment on Future Subsidiary

50,000  

Total current assets

762,193  

 

 

Fixed Assets

 

Furniture and Equipment

46,000  

Total Fixed Assets

46,000  

Less Accumulated Depreciation

(5,100) 

Net Fixed Assets

40,900  

 

 

Total assets

$803,093  

 

 

LIABILITIES

 

Current liabilities:

 

Accounts payable and accrued expenses

8,000  

Total current liabilities

8,000  

 

 

Long-term liabilities:

 

Notes Payable

1,200,000  

Accrued interest

60,652  

Total long-term liabilities

1,260,652  

 

 

Total liabilities

1,268,652  

 

 

STOCKHOLDERS' EQUITY

 

 

 

Common stock

167,158  

Additional paid in capital

(120,658) 

Accumulated Deficit

(512,059) 

Total stockholders' equity/(deficit)

(465,559) 

Total liabilities and stockholders' equity

$803,093  


 

Emissions Zero Module, Inc.

STATEMENTS OF OPERATIONS

 

Year Ended December 31, 2021

 

 

Sales

$ 

Cost of Sales

 

 

 

Gross profit

 

 

 

General and administrative expenses:

 

Legal and professional fees

248,055  

Consulting

62,000  

Research and Development

75,772  

Other general and administrative

65,580  

Total operating expenses

451,407  

(Loss) from operations

(451,407) 

 

 

Other income (expense):

 

Interest income

 

Forgiven debt

 

Interest (expense)

(60,652) 

(Loss) before taxes

(512,059) 

 

 

Income Tax Expense

 

Net (loss)

$(512,059) 

 

 

Basic earnings (loss) per common share

$(0.00) 

 

 

Weighted average number of shares outstanding

166,600,000  


 

Emissions Zero Module, Inc.

STATEMENT OF STOCKHOLDERS' DEFICIENCY

 

 

Preferred Stock

Common Stock

Additional Paid in

Accumulated

 

 

Shares

Amount

Shares

Amount

Capital

Deficit

Total Equity

Founders Shares Issued

-

-

166,600,000

166,600

(166,600)

 

-

Net income (loss)

 

 

 

 

 

(41,088)

(41,088)

 

 

 

 

 

 

 

 

Balance, March 31, 2021

-

-

166,600,000

166,600

(166,600)

(41,088)

(41,088)

 

 

 

 

 

 

 

 

Net income (loss)

 

 

 

 

 

(83,867)

(83,867)

 

 

 

 

 

 

 

 

Balance, June 30, 2021

-

-

166,600,000

166,600

(166,600)

(124,955)

(124,955)

 

 

 

 

 

 

 

 

Notes Payable Converted to Common Stock

-

-

558,000

558

45,942

 

46,500

Net income (loss)

 

 

 

 

 

(174,185)

(174,185)

 

 

 

 

 

 

 

 

Balance, September 30, 2021

-

-

167,158,000

167,158

(120,658)

(299,140)

(252,640)

 

 

 

 

 

 

 

 

Net income (loss)

 

 

 

 

 

(212,919)

(212,919)

 

 

 

 

 

 

 

 

Balance, December 31, 2021

-

-

167,158,000

167,158

(120,658)

(512,059)

(465,559)


 

Emissions Zero Module

STATEMENT OF CASH FLOWS

 

 

Twelve Months Ended December 31, 2021

 

 

Net income (loss)

$(512,059) 

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

Changes in operating assets and liabilities:

 

Expenses paid on behalf of future merger partner

(62,285) 

Accounts Receivable and other receivables

(7,000) 

Accounts Payable and Other Payables

8,000  

Accrued Interest

60,652  

Cash Used in Operating Activities

(512,691) 

Cash Flows from Investing Activities

 

Down Payment on Future Subsidiary

(50,000) 

Purchase of Fixed Assets

(40,900) 

Cash Used in Investing Activities

(90,900) 

 

 

Cash Flows from Financing Activities

 

Proceeds from Shareholder Loans

46,500  

Proceeds from Convertible Notes Payable

1,200,000  

Cash Provided by Financing Activities

1,246,500  

 

 

Net Change in Cash

642,909  

Cash at Beginning of Period

 

Cash a Period End

$642,909  


 

Emissions Zero Module, Inc.

NOTES TO CONDENSED FINANCIAL STATEMENTS

AUDITED

 

Note 1 – Organization and Summary of Significant Accounting Policies

 

Nature of Business

 

Emissions Zero Module, Inc. (“EZM”) was a Wyoming company founded in 2021 by Sumit Isaranggunlnaayudhya and William Tiley and is based in Tucson, Arizona.  Emissions Zero Module was established as a research and development company classified in the alternative energy sector. As such, Emissions Zero Module operates without the expectation of immediate profit. Instead, it is expected to contribute to the long-term profitability of The Company. Rather the activities of Emissions Zero Module is expected to lead to discoveries leading the creation of new products.

 

EZM intends specifically to bring a patented product to market that was developed to eliminate the harmful effects of tailpipe emissions produced by internal combustion engines. The Emissions Zero Module (EZM) connects directly to the existing battery in any automobile or truck and works with the car's existing electrical apparatus to create conditions within the engine's combustion chamber that allows for a more complete combustion of fuel. The results of complete combustion of fuel are up to a 95% reduction in total tailpipe emissions, increase performance and, increased miles per gallon of fuel. The EZM works on all types of vehicles including cars, SUVs, diesel trucks, and large over-the-road semis.

 

Due to the current wave of environmental directives in the USA, the author of the EZM technology was developing and manufacturing a product that eliminates carbon monoxide from the emission of automobiles. The EZM represents the fourth generation of this product and, more importantly, represents a product that is ready for the US market. The aforementioned wave of directives has set forth strict emissions (tailpipe) standards for all automobiles and trucks. The internal combustion engine powers 99% of all cars and trucks in use today. The EZM reduces the carbon footprint of the standard automobile by 25%-95% and will enable nearly any vehicle to comply with new emissions standards. EZM, LLC will continue to support clean air initiatives by improving the EZM and introducing ever-evolving products.

 

Just as the catalytic converter began to reduce the pollutants in the air in response to the 1963 Clean Air Act, the EZM will provide the automobile industry the ability to comply with the stricter emissions standards. We are currently performing a large-scale, detailed study of the EZM. Management is also applying for the various governmental approvals necessary to distribute an aftermarket product such as the EZM.


 

PRODUCTS

 

Combustion engines create energy from burning a fuel/air mixture. Spark ignition introduces a spark to a compressed fuel/air mix and the burning causes an expansion of hot gases to push a piston within a cylinder, converting the linear movement of the piston into the rotating movement of a crankshaft that turns the wheels of your car. Compression ignition, or diesel, only air is brought in and compressed before a measured amount of fuel is sprayed into the hot compressed air, causing it to ignite and power the vehicle. The EZM performs emissions control on all types of engines. The EZM is a patented and proprietary emissions control device. The Module is attached directly to the vehicle's battery with the supplied power leads. Upon starting the engine, the Module affects the characteristics of the fuel combustion in the combustion chambers. Through its design and novel use of components, it causes a more efficient and complete burn of the fuel. This enhanced combustion results in a dramatic drop in carbon monoxide, unburnt fuel, and other gasses. As a result of this complete combustion, vehicles will see an increase in fuel efficiency, overall performance, and emissions reduction. This effect occurs in both spark and compression ignition engines and can be adjusted for the size of the vehicle/engine.

 

Basis of Presentation

 

The accompanying audited financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) to reflect the accounts and operations of the Company. 

 

Risks and Uncertainties

 

An investment in our securities involves a high degree of risk.  You should not invest in our securities if you cannot afford to lose your entire investment. In deciding whether you should invest in our securities, you should carefully consider the following information together with all of the other information contained in this Current Report.  Any of the following risk factors can cause our business, prospects, financial condition or results of operations to suffer and you to lose all or part of your investment.

 

We have a limited operating history and are subject to the risks encountered by early-stage companies.

 

Because our operating company has a limited operating history, you should consider and evaluate our operating prospects in light of the risks and uncertainties frequently encountered by early-stage companies in rapidly evolving markets. For us, these risks include:

 

·risks that we may not have sufficient capital to achieve our growth strategy; 

 

·risks that we may not develop our product and service offerings in a manner that enables us to be profitable and meet our customers’ requirements; 

 

·risks that our growth strategy may not be successful; and 


·risks that fluctuations in our operating results will be significant relative to our revenues. 

 

These risks are described in more detail below. Our future growth will depend substantially on our ability to address these and the other risks described in this section.

 

We have a history of net losses, may incur substantial net losses in the future and may not achieve profitability.

 

Although we have begun to generate revenues, we have incurred significant losses since inception. We expect to incur increased costs to implement our business plan and increase revenues, such as costs relating to expanding our crowd funding platform into additional country markets. If our revenues do not increase to offset these additional expenses or if we experience unexpected increases in operating expenses, we will continue to incur significant losses and will not become profitable. If we are not able to significantly increase our revenues, we will likely not be able to achieve profitability in the future.

 

Our operating losses and working capital deficiency raise substantial doubt about our ability to continue as a going concern.  If we do not continue as a going concern, investors could lose their entire investment.

 

Our operating losses and working capital deficiency raise substantial doubt about our ability to continue as a going concern.  If we do not generate revenues, do not achieve profitability and do not have other sources of financing for our business, we may have to curtail or cease our development plans and operations, which could cause investors to lose the entire amount of their investment.

 

If we lose the services of our founders or other members of our senior management team, we may not be able to execute our business strategy.

 

Our success depends in a large part upon the continued service of our senior management team. In particular, the continued service of our founders, David Riggs, Chief Executive Officer, Sumit Isaranggunlnaayudhya, Chief Technology Officer, Russell Kluwann, Chief Operating Officer and Kent Hush, Chief Financial Officer, is critical to our vision, strategic direction, culture, products and technology. We do not maintain key-man insurance for any of our founders or other members of our senior management team. The loss of any of our founders, even temporarily, or any other member of senior management could harm our business.


 

We may need additional financing.  Any limitation on our ability to obtain such additional financing could have a material adverse effect on our business, financial condition and results of operations.

 

There can be no assurance that we will not require additional capital and the raising of additional capital could result in dilution to our stockholders.  In addition, there is no assurance that we will be able to obtain additional capital if we need it, or that if available, it will be available to us on favorable or reasonable terms.  Any limitation on our ability to obtain additional capital as and when needed could have a material adverse effect on our business, financial condition and results of operations.

 

If we fail to maintain proper and effective internal controls, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating results, our ability to operate our business and investors’ views of us.

 

Ensuring that we have adequate internal financial and accounting controls and procedures in place so that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort that will need to be evaluated frequently.  Section 404 of the Sarbanes-Oxley Act requires public companies to conduct an annual review and evaluation of their internal controls.  Our failure to maintain the effectiveness of our internal controls in accordance with the requirements of the Sarbanes-Oxley Act could have a material adverse effect on our business.  We could lose investor confidence in the accuracy and completeness of our financial reports, which could have an adverse effect on the price of our common stock. In addition, if our efforts to comply with new or changed laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against us and our business may be harmed.

 

Risks Related Specifically to the Business of Emissions Zero Module

 

Increasing competition within our emerging industry could have an impact on our business prospects.

 

The alternative energy market is an emerging industry where new competitors are continuing to enter the market. These competing companies may have significantly greater financial and other resources than we have and may have been developing their products and services longer than we have been developing ours.  Increasing competition may have a negative impact on our profit margins.


 

We may not be able to adequately protect our proprietary technology, and our competitors may be able to offer similar products and services, which would harm our competitive position.

 

Our success depends in part upon our proprietary technology. We rely primarily on trademark, copyright, service mark and trade secret laws, confidentiality procedures, license agreements and contractual provisions to establish and protect our proprietary rights. Despite these precautions, third parties could copy or otherwise obtain and use our technology without authorization, or develop similar technology independently. We cannot assure you that the protection of our proprietary rights will be adequate or that our competitors will not independently develop similar technology, duplicate our products and services or design around any intellectual property rights we hold.

 

If third parties claim that we infringe their intellectual property, it may result in costly litigation.

 

We cannot assure you that third parties will not claim our current or future products infringe their intellectual property rights. Any such claims, with or without merit, could cause costly litigation that could consume significant management time. As the number of product and services offerings in the crowd funding market increases and functionalities increasingly overlap, companies such as ours may become increasingly subject to infringement claims. Such claims also might require us to enter into royalty or license agreements. If required, we may not be able to obtain such royalty or license agreements, or obtain them on terms acceptable to us.

 

We may not be able to adequately plan, or may experiences changes in the business environment that could impact our success to attract and maintain customers in the alternate energy sector.  We also could experience unforeseen difficulties related to our product building and performance.   Some of the factors that could cause adverse impacts include:

 

Many of our target customers are large commercial vehicle OEM customers and large volume customers, and the failure to obtain such customers, could have an adverse impact on our business. 

 

If any of our battery products fail to perform as expected, our ability to develop, market and sell our current products or future technology could be harmed. 

 

We operate in an extremely competitive industry and are subject to pricing pressures. Further, many other battery manufacturers have significantly greater resources than we have. 

 

Entering into strategic alliances and relying on third-party manufacturing, including from suppliers of components we include in our finished products, exposes us to risks. 

 

We are dependent on our suppliers to fulfill our customers’ orders, and if we fail to manage our relationships effectively with, or lose the services of, these suppliers and we cannot substitute suitable alternative suppliers, our operations would be materially adversely affected. 


Increases in costs, disruption of supply or shortage of any of our battery components, such as battery cells, electronic and mechanical parts, or raw materials used in the production of such parts, could harm our business. 

 

Our failure to keep up with rapid technological changes and evolving industry standards may cause our products to become obsolete and less marketable, resulting in loss of market share to our competitors or a decrease in demand for our battery packs and modules due to substitute products. 

 

If we cannot continue to develop new products in a timely manner and at favorable margins, we may not be able to compete effectively. 

 

Developments in alternative technology may adversely affect the demand for our battery modules. 

 

Manufacturing or use of our products may cause accidents, which could result in significant production interruption, delay or claims for substantial damages. 

 

We may become subject to product liability claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims. 

 

Future product recalls could materially adversely affect our business, future prospects, financial condition and operating results. 

 

Third-party claims or litigation alleging infringement of patents or infringement or misappropriation of other proprietary rights, or seeking to invalidate our patents may adversely affect our business. 

 

We are currently dependent on a single assembly facility. If our facility becomes inoperable, we will be unable to produce our battery products and our business will be harmed. 

 

Our efforts to increase the scale and capacity of our assembly processes and systems, could be disruptive to our operations and adversely affect our results of operations and financial condition. 

 

We may be unable to successfully expand our operations or manage our growth effectively. 

 

Our operations are subject to a variety of environmental, health and safety rules that can bring scrutiny from regulatory agencies and increase our costs. 

 

We rely on information technology and any failure, inadequacy, interruption or security lapse of that technology, including any cybersecurity incidents, could harm our ability to operate our business effectively. 


Risks Relating to our Securities

 

Because the Share Exchange will result in a deemed a reverse acquisition, we may not be able to attract the attention of major brokerage firms, which may limit the liquidity of our Common Stock and may make it more difficult for us to raise additional capital in the future.

 

Additional risks may exist because the Share Exchange will be considered a “reverse acquisition” under accounting and securities regulations. Certain SEC rules are more restrictive when applied to reverse acquisition companies, such as the ability of stockholders to resell their shares of Common Stock pursuant to Rule 144. In addition, securities analysts of major brokerage firms may not provide coverage of our Common Stock following the Share Exchange because there may be little incentive for brokerage firms to recommend the purchase of our Common Stock. As a result, our Common Stock may have limited liquidity and investors may have difficulty selling it. In addition, we cannot assure you that brokerage firms will want to conduct any secondary offerings on our behalf if we seek to raise additional capital in the future. Our inability to raise additional capital may have a material adverse effect on our business.

 

There is not now, and there may not ever be, an active market for the Company’s Common Stock.

 

There currently is no public market for our Common Stock.  Further, although our Common Stock is currently quoted on the OTC Bulletin Board (the “OTCBB”) and on the OTC Markets QB Tier, trading of our Common Stock has not yet commenced.  When our stock does begin to trade, such trading may be extremely sporadic.  For example, several days may pass before any shares may be traded.  As a result, an investor may find it difficult to dispose of, or to obtain accurate quotations of the price of, our Common Stock.  Accordingly, investors must assume they may have to bear the economic risk of an investment in our Common Stock for an indefinite period of time.  There can be no assurance that a more active market for the Common Stock will develop, or if one should develop, there is no assurance that it will be sustained.  This severely limits the liquidity of our Common Stock, and would likely have a material adverse effect on the market price of our Common Stock and on our ability to raise additional capital.

 

We cannot assure you that the Common Stock will become liquid or that it will be listed on a securities exchange.

 

Until our Common Stock is listed on a national securities exchange such as the New York Stock Exchange or the Nasdaq Stock Market, we expect our Common Stock to remain eligible for quotation on the OTCBB and OTC Markets QB Tier.  In those venues, however, an investor may find it difficult to obtain accurate quotations as to the market value of our Common Stock.  In addition, if we fail to meet the criteria set forth in SEC regulations, various requirements would be imposed by law on broker-dealers who sell our securities to persons other than established customers and accredited investors.  Consequently, such regulations may deter broker-dealers from recommending or selling our Common Stock, which may further affect the liquidity of the Common Stock.  This would also make it more difficult for us to raise capital.


Our Common Stock is subject to the “penny stock” rules of the SEC and the trading market in the securities is limited, which makes transactions in the stock cumbersome and may reduce the value of an investment in the stock.

 

The SEC 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 SEC 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 common stock and cause a decline in the market value of 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.


 

The price of our Common Stock may become volatile, which could lead to losses by investors and costly securities litigation.

 

The trading price of our Common Stock is likely to be highly volatile and could fluctuate in response to factors such as:

 

·actual or anticipated variations in our operating results; 

 

·announcements of developments by us or our competitors; 

 

·announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments; 

 

·adoption of new accounting standards affecting our Company’s industry; 

 

·additions or departures of key personnel; 

 

·sales of our Common Stock or other securities in the open market; and 

 

·other events or factors, many of which are beyond our control. 

 

The stock market is subject to significant price and volume fluctuations. In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been initiated against the company. Litigation initiated against us, whether or not successful, could result in substantial costs and diversion of our management’s attention and resources, which could harm our business and financial condition.

 

We do not anticipate dividends to be paid on our Common Stock, and investors may lose the entire amount of their investment.

 

Cash dividends have never been declared or paid on the Common Stock, and we do not anticipate such a declaration or payment for the foreseeable future. We expect to use future earnings, if any, to fund business growth. Therefore, stockholders will not receive any funds absent a sale of their shares. We cannot assure stockholders of a positive return on their investment when they sell their shares, nor can we assure that stockholders will not lose the entire amount of their investment.

 

If securities analysts do not initiate coverage or continue to cover our Common Stock or publish unfavorable research or reports about our business, this may have a negative impact on the market price of our common stock.

 

The trading market for the Common Stock will depend on the research and reports that securities analysts publish about our business and the Company. We do not have any control over these analysts. There is no guarantee that securities analysts will cover the Common Stock. If securities analysts do not cover the Common Stock, the lack of research coverage may adversely affect its market price. If we are covered by securities analysts, and our stock is the subject of an unfavorable report, our stock price and trading volume would likely decline. If one or more of these analysts


ceases to cover the Company or fails to publish regular reports on the Company, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.  

 

You may experience dilution of your ownership interests because of the future issuance of additional shares of the Common Stock.

 

In the future, we may issue our authorized but previously unissued equity securities, resulting in the dilution of the ownership interests of our present stockholders and the purchasers of Common Stock offered hereby.  We are currently authorized to issue an aggregate of 300,000,000 shares of Common Stock.  As of the closing of the Share Exchange, there will be xx shares of our Common Stock outstanding.   We may also issue additional shares of our Common Stock or other securities that are convertible into or exercisable for our Common Stock in connection with hiring or retaining employees, future acquisitions, future sales of its securities for capital raising purposes, or for other business purposes.  The future issuance of any such additional shares of our Common Stock may create downward pressure on the trading price of the Common Stock.  There can be no assurance that we will not be required to issue additional shares, warrants or other convertible securities in the future in conjunction with any capital raising efforts, including at a price (or exercise prices) below the price at which shares of the Common Stock will be initially quoted on the OTCBB and the OTC Markets QB Tier.  

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

  

Recently Issued Accounting Pronouncements

 

FASB ASU No. 2016-02 (Topic 842), “Leases” – Issued in February 2016, ASU No. 2016-02 established ASC Topic 842, Leases, as amended by subsequent ASUs on the topic, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. ASU 2016-02 requires lessees to apply a two-method approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase. Lessees are required to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. Lessees will recognize expense based on the effective interest method for finance leases or on a straight-line basis for operating leases. The accounting applied by the lessor is largely unchanged from that applied under the existing lease standard. We were be required to record a right-of-use asset and lease liability equal to the present value of the remaining minimum lease payments and will continue to recognize expense on a straight-line basis upon adoption of this standard. ASU 2016-02 is effective for reporting periods for private companies beginning after December 15, 2021, with early adoption permitted. In July 2018, the FASB issued an update ASU 2018-11 Leases: Targeted Improvements, which provides companies with an additional transition option that would permit


the application of ASU 2016-02 as of the adoption date rather than to all periods presented. The Company plans to adopt this standard for the interim reporting period ending March 31, 2022. 

 

Note 2 – Going Concern

 

We incurred a net loss of $512,059 for the year ending December 31, 2021 and had an accumulated deficit of $512,059. At December 31, 2021, we had a cash balance of $642,908 and working capital of $754,193.

 

We have not been able to generate cash from operating activities to fund our ongoing operations. We will be required to raise additional funds through public or private financing, additional collaborative relationships or other arrangements until we are able to raise revenues to a point of positive cash flow. We are evaluating various options to further reduce our cash requirements to operate at a reduced rate, as well as options to raise additional funds, including obtaining loans and selling common stock. There is no guarantee that we will be able to generate enough revenue and/or raise capital to support operations.

 

Based on the above factors, substantial doubt exists about our ability to continue as a going concern for one year from the issuance of these financial statements.

  

Note 3 – Concentrations of Business and Credit Risk

 

The Company at times maintains balances in various operating accounts in excess of federally insured limits.

 

The Company has zero income at this time. The company will be licensing out the rights to manufacture their products at which time a concentration or business could become a risk. At this time, the company believes that the nature of their products will create many licensing opportunities and sees no risk of a concentration with any one client.

  

Note 4 – Commitments and Contingencies

 

Litigation and Claims

 

The Company may be involved in lawsuits and claims arising in the ordinary course of business from time to time. The Company reviews any such legal proceedings and claims on an ongoing basis and follows appropriate accounting guidance when making accrual and disclosure decisions. The Company establishes accruals for those contingencies where the incurrence of a loss is probable and can be reasonably estimated, and it discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for the Company’s financial statements not to be misleading. To estimate whether a loss contingency should be accrued by a charge to income, the Company evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of the loss. The Company does not record liabilities when the likelihood that the liability has been incurred is probable, but the amount cannot be reasonably estimated. Based upon present information, the Company determined that there were no matters that required an accrual as of


December 31, 2021, nor were there any asserted or unasserted material claims for which material losses are reasonably possible.

  

Note 5 – Convertible Notes Payable

  

During the twelve months ended December 31, 2021, the Company held a closing of its PPM in which it sold 4,487,500 shares of its securities for total proceeds of $1,215,000. The Subscription Agreement included an offering of a minimum of one hundred (100) and a maximum of six hundred (600) unsecured Promissory Notes at $5,000 per unit.  The Company may at any time, or from time to time, make a voluntary prepayment, whether in full or in part, of these Notes, without premium or penalty. The Notes mature in 24 months and bear annual interest of 12%.  At maturity, and at the election of the Noteholder, each $5,000 unit is convertible into common stock equity units at maturity. The Notes may not be sold, offered for sale, pledged, assigned, or otherwise disposed of unless certain conditions are satisfied, as more fully set forth in the Subscription Agreement. In addition, the Notes are deemed to have been made in the State of Wyoming, and any and all performance, or the breach thereof, will be interpreted and construed pursuant to the laws of the State of Wyoming without regard to conflict of laws rules applied in the State of Wyoming.

 

Upon the occurrence of an Event of Default, the Noteholder may, by written notice to the Company, declare the unpaid principal amount and all accrued interest of the Note immediately due and payable. Under the terms of the Promissory Note, a default is defined as one or more of the following events.

 

(a)The Maker shall fail to pay any interest payment on this Note when due for a period of thirty (30) days after notice of such default has been sent by the Holder to the Maker. 

 

(b)The Maker shall dissolve or terminate the existence of the Maker. 

 

(c)The Maker shall file a petition in bankruptcy, make an assignment for the benefit of its creditors, or consent to or acquiesce in the appointment of a receiver for all or substantially all of its property, or a petition for the appointment of a receiver shall be filed against the Maker and remain unstayed for at least ninety (90) days. 

 

The Company’s offering was for a minimum of One Hundred (100) and up to a maximum of Six Hundred (600) Notes at Five Thousand ($5,000) Dollars per Note, with a minimum subscription of two (2) Notes (the "Offering"). The minimum aggregate loan to the Company will be Five Hundred Thousand ($500,000) Dollars and the maximum aggregate loan to the Company from this Offering will be Three Million ($3,000,000) Dollars. Notes are convertible at maturity to Common Stock (equity units), based on tiered raise benchmarks.


 

The Offering was made to a limited number of investors pursuant to an exemption available under the Securities Act of 1933 (the "Act"), specifically Rule 506(c) promulgated under Regulation D, and under certain other laws, including the securities law of certain states.

 

The following reflects the proceeds received under their respective tiers and the number of common stock equity units issuable if converted to common shares of the Company.

 

 

Tier 1

Tier 2

Price

$0.20

$0.40

Proceeds

$580,000

$635,000

 

As of December 31, 2021, the Company owed $1,200,000 in principal and $60,652 in accrued interest on these Notes.  The number of shares of common stock issuable if converted at December 31, 2021 would be 4,487,500.

   

Note 6– Related Party Transactions

 

During the year ended December 31, 2021, the company had no related party transactions.

  

Note 7 – Subsequent Events

 

Effective January 1, 2022, Emissions Zero Module entered into a Stock Purchase Agreement with the sole shareholder of Job Aire Group (“JAG”) to acquire all of the outstanding shares of JAG. Job Aire Group was a privately owned entity and is a staffing company which provides employees to third parties such as airlines, aircraft engine shops, repair facilities and similar entities and the employees provide services to the airline maintenance business.   Pursuant to the terms of the acquisition agreement, Emissions Zero agreed to pay $745,000 in installments and 2% of net revenue received by the Company, up to $1,000,000, for the 36-month period following the closing date.  At closing, Emissions Zero paid an initial installment of $25,000 and will make 36 payments of $20,000 each, beginning January 2, 2022.  As a result of the Stock Purchase Agreement, JAG became a wholly owned subsidiary of Emissions Zero.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders
Job Aire Group, Inc.

 

Opinion on the Financial Statements

 

We have audited the accompanying balance sheets of Job Aire Group, Inc (the Company), which comprise the balance sheet as of December 31, 2021 and the related statements of Operations, Changes in Stockholder’s Equity, and Cash Flows for the years then ended, and the related notes to the financial statements.  In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for each of the periods then ended in conformity with accounting principles generally accepted in the United States of America.  

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United Sates) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we were required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. According we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluation of the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.


 

Emphasis of Matters-Risks and Uncertainties

 

The Company is not able to predict the ultimate impact that COVID -19 will have on its business. However, if the current economic conditions continue, the pandemic could have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company plans to operate.

 

/s/ Gries & Associates, LLC

 

We have served as the Company’s auditor since 2021.

 

Denver, Colorado

March 23, 2022


 

 

Job Aire Group, Inc.

BALANCE SHEET

 

 

December 31

 

December 31

 

 

2021

 

2020

 

 

(Audited)

 

(Audited)

 

 

 

 

 

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash

 

$229,854 

 

$595,984 

Accounts receivable

 

1,082,892 

 

883,247 

Due From Shareholder

 

90,612 

 

- 

Other Current Assets

 

800 

 

4,465 

Total current assets

 

1,404,157 

 

1,483,696 

 

 

 

 

 

Total assets

 

$1,404,157 

 

$1,483,696 

 

 

 

 

 

LIABILITIES

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable and accrued expenses

 

- 

 

6,750 

Loan Payable

 

- 

 

942,146 

Total current liabilities

 

- 

 

948,896 

 

 

 

 

 

Long-term liabilities:

 

 

 

 

Total long-term liabilities

 

- 

 

- 

 

 

 

 

 

Total liabilities

 

- 

 

948,896 

 

 

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

 

Common stock, $2 par value, 1,000 authorized, issued and outstanding

 

2,000 

 

2,000 

Additional paid in capital

 

- 

 

- 

Retained Earnings

 

1,402,157 

 

532,800 

Total stockholders' equity/(deficit)

 

1,404,157 

 

534,800 

Total liabilities and stockholders' equity

  

$1,404,158 

 

$1,483,696 


 

Job Aire Group, Inc.

STATEMENTS OF OPERATIONS

 

 

 

Year Ended

 

Year Ended

 

 

December 31

 

December 31

 

 

2021

 

2020

 

 

(audited)

 

(audited)

 

 

 

 

 

Sales

 

$13,053,643

 

$10,287,146

Cost of Sales

 

12,339,563

 

9,804,890

 

 

 

 

 

Gross profit

 

714,080

 

482,257

 

 

 

 

 

General and administrative expenses:

 

 

 

 

Salaries

 

442,510

 

305,486

Legal and professional fees

 

222,905

 

15,731

Rent

 

19,080

 

23,640

Other general and administrative

 

170,362

 

72,412

Total operating expenses

 

854,856

 

417,269

(Loss)/Income from operations

 

(140,776)

 

64,988

 

 

 

 

 

Other (Income)/Expense

 

 

 

 

Interest expense

 

12,860

 

41,616

Loan Forgiven (income)

 

(942,146)

 

-

Income before taxes

 

788,510

 

23,372

 

 

 

 

 

Income Tax Expense

 

15,836

 

17,026

Net Income

 

$772,674

 

$6,346

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per common share

 

$386.34

 

$3.17

 

 

 

 

 

Weighted average number of shares outstanding

  

2,000

  

2,000


 

 

Job Aire Group, Inc.

STATEMENTS OF STOCKHOLDERS' EQUITY

As of December 31, 2021

 

 

 

 

 

 

Additional

 

 

 

 

Common Stock

Paid In

Accumulated

Total

 

 

Shares

 

Amount

Capital

Deficit

Equity

Balance, December 31, 2019

 

1,000 

 

2,000 

- 

526,454 

528,454 

Net income (loss)

 

 

 

 

- 

6,346 

6,346 

 

 

 

 

 

 

 

 

Balance, December 31, 2020

 

1,000 

 

2,000 

- 

532,800 

534,800 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

 

 

- 

869,357 

869,357 

 

 

 

 

 

 

 

 

Balance, December 31, 2021

 

1,000 

 

2,000 

- 

1,402,157 

1,404,157 


 

Job Aire Group, Inc.

Statements of Cash Flows

 

 

 

December 31, 2021

 

December 31, 2020

Cash Flows From Operating Activities

 

 

 

 

Net Income

 

$869,357  

 

$(90,337) 

Adjustments to reconcile net income to net cash provided in operating activities:

 

 

 

 

Forgiveness of related party receivable

 

 

 

96,683  

Forgiveness of PPP Loan

 

(942,146) 

 

 

 

 

 

 

 

Increase (decrease) in:

 

 

 

 

Accounts receivable

 

(199,645) 

 

134,237  

Accounts payable

 

(6,750) 

 

(25,527) 

Accrued expenses

 

 

 

(27,599) 

Net Cash Provided By Operating Activities

 

(279,184) 

 

87,457  

Cash Flows From Financing Activities

 

 

 

 

Net advances to employees

 

3,665  

 

(140) 

Net repayments to related parties

 

(90,612) 

 

(321,848) 

Proceeds from PPP Loan

 

 

 

942,146  

Net repayments third party loans

 

 

 

(119,896) 

Net Cash Used In Financing Activities

 

(86,947) 

 

500,262  

Net Increase

 

(366,131) 

 

587,719  

Cash, Beginning Of Year

 

595,984  

 

8,265  

Cash. End Of Year

 

$229,853  

 

$595,984  

Supplemental Cash Flow Information:

 

 

 

 

Cash paid during the year for:

 

 

 

 

Income taxes

 

$ 

 

$ 

Interest

  

$ 

 

$ 


 

Job Aire Group, Inc.

NOTES TO CONDENSED FINANCIAL STATEMENTS

AUDITED

 

Note 1 – Organization and Summary of Significant Accounting Policies

 

Nature of Business

 

Job Aire Group was incorporated under the laws of the State of Arizona.  The Company is a multi-technical aviation company specializing in Contract Labor, Aircraft and Engine inspection and audit, plus hard-core aeronautical engineering. Also skilled in aircraft maintenance marketing, we place aircraft into FAR 145 facilities for repair, refurbishment, painting, modification and overhaul. JAG is well known for providing experienced and professional heavy transport aircraft maintenance technicians world-wide.

The Company was a corporate expansion of Job-Aire Aviation Services, a company created in 1997 by William D. Tiley, a retired Air Force Officer and Commercial Pilot.  Mr. Tiley retired in 2021 and Nick Ammons, as of January 1, 2022, is the President and Chairman of the Board.

Basis of Presentation

 

The accompanying audited financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) to reflect the accounts and operations of the Company. 

 

Risks and Uncertainties

 

An investment in our securities involves a high degree of risk.  You should not invest in our securities if you cannot afford to lose your entire investment. In deciding whether you should invest in our securities, you should carefully consider the following information together with all of the other information contained in this Current Report.  Any of the following risk factors can cause our business, prospects, financial condition or results of operations to suffer and you to lose all or part of your investment.

 

Our business and results of operations have been, and our financial condition may be, impacted by the outbreak of COVID-19 and such impact could be materially adverse.

 

The global spread of COVID-19 created significant volatility, uncertainty and economic disruption. In the United States and globally, governmental authorities instituted certain preventative measures, including border closures, travel restrictions, operational restrictions on certain businesses, shelter-in-place orders, quarantines and recommendations to practice social distancing. These restrictions disrupted and may continue to disrupt economic activity, resulting in reduced commercial and consumer confidence and spending, increased unemployment, closure or restricted operating conditions for businesses, volatility in the global capital markets, instability in the credit and financial markets, labor shortages, regulatory recommendations to provide relief for impacted consumers, disruption in supply chains, and restrictions on many hospitality and travel industry operations.


 

The extent to which the coronavirus pandemic may impact our business, operations, and financial results in the future is uncertain and will depend on future developments, including the duration or recurrence, of the pandemic, the related length and severity of its impact on the U.S. and global economy, and the continued governmental, business and individual actions taken in response to the pandemic and economic disruption.

Actual and potential impact on clients and prospects

 

Since the aviation industry is considered an essential industry in the context of the pandemic, the change in the economic environment due to the COVID-19 pandemic has not had a material adverse economic impact on business. We have not experienced significant impacts seen across other industries such as frozen headcount, furloughed or terminated employees, or partially or completely shut down business operations.

 

Actual and potential impact of the laws affecting our industry and clients

 

New laws and programs have been enacted, and may continue to be enacted, at every level of government to help the economy, employers and employees. For example, the 2020 FFCRA and CARES Act and the 2021 PPPFA and ARPA, and subsequent agency guidance related to those acts, created the paycheck protection program (PPP), mandatory employee leave requirements, payroll tax deferral and tax credit programs, COBRA premium assistance facilitated via employer payroll tax credits, and other employment- and employment tax-related incentives.

 

Most of these laws and programs have not been, and we do not anticipate will be, enacted with the employee leasing industry in mind. As a result, we cannot guarantee we will be able to support any of these laws and programs in a timely and cost-effective manner or at all, which could reduce or eliminate the attractiveness of our services and/or affect the ability of our clients and WSEs to fully realize the benefits of these laws and programs, which would have a material adverse effect on our business, financial condition and results of operations.

 

Our business, services, and financial condition may be adversely impacted by changes in government regulations and policies.

 

Many of our services, particularly payroll tax administration services and employee benefit plan administration services, are designed according to government regulations that often change. Changes in regulations could affect the extent and type of benefits employers are required, or may choose, to provide employees or the amount and type of taxes employers and employees are required to pay. Such changes could reduce or eliminate the need for some of our services and substantially decrease our revenue. Added requirements could also increase our cost of doing business.


 

Our business and reputation may be adversely impacted if we fail to comply with U.S. and foreign laws and regulations.

 

Our services are subject to various laws and regulations, including, but not limited to, the ACA and anti-money laundering rules. The enactment of new laws and regulations, modifications of existing laws and regulations, or the adverse application or interpretation of new or existing laws or regulations can adversely affect our business. Failure to update our services to comply with modified or new legislation in the area of health care reform as well as failure to educate and assist our clients regarding this legislation could adversely impact our business reputation and negatively impact our client base. Failure to comply with laws and regulations could result in the imposition of consent orders or civil and criminal penalties, including fines, which could damage our reputation and have an adverse effect on our results of operations or financial condition.

 

We may not be able to keep pace with changes in technology or provide timely enhancements to our products and services.

 

The market for our products is characterized by rapid technological advancements, changes in customer requirements, frequent new product introductions, and enhancements and changing industry standards. To maintain our growth strategy, we must adapt and respond to technological advances and technological requirements of our clients. Our future success will depend on our ability to: enhance our current products and introduce new products in order to keep pace with products offered by our competitors; enhance capabilities and increase the performance of our internal systems, particularly our systems that meet our clients’ requirements; and adapt to technological advancements and changing industry standards. We continue to make significant investments related to the development of new technology. If our systems become outdated, it may negatively impact our ability to meet performance expectations related to quality, time to market, cost and innovation relative to our competitors. The failure to provide more efficient and user-friendly customer-facing digital experience across internet and mobile platforms as well as in physical locations may adversely impact our business and operating results. There can be no assurance that our efforts to update and integrate systems will be successful. If we do not integrate and update our systems in a timely manner, or if our investments in technology fail to provide the expected results, there could be a material adverse effect to our business and results of operations. The failure to continually develop enhancements and use of technologies such as robotics and other workflow automation tools, natural language processing, and artificial intelligence/machine learning may impact our ability to increase the efficiency of and reduce costs associated with operational risk management and compliance activities.

 

We could be subject to reduced revenues, increased costs, liability claims, or harm to our competitive position as a result of cyberattacks, security vulnerabilities or Internet disruptions.

 

We rely upon information technology (“IT”) networks, cloud-based platforms, and systems to process, transmit, and store electronic information, and to support a variety of business processes, some of which are provided by third-party vendors. Cyberattacks and security threats are a risk to our business and reputation. A cyberattack, unauthorized intrusion, malicious software infiltration, network disruption or outage, corruption of data, or theft of personal or other sensitive information, could have a material adverse effect on our business operations or that of our clients, result in


liability or regulatory sanction, or cause harm to our business and reputation and result in a loss in confidence in our ability to serve clients all of which could have a material adverse effect on our business. The rapid speed of disruptive innovations involving cyberattacks, security vulnerabilities and Internet disruptions enabled by new and emerging technologies may outpace our organization's ability to compete and/or manage the risk appropriately. In addition, cybercriminals may seek to exploit the disruption caused by the COVID-19 pandemic by attempting to engage in payment-related fraud or by more frequently attempting to gain access to our systems through phishing or other means that may be more successful when most of our employees are working remotely.

 

Data Security and Privacy Leaks

 

We collect, use, and retain increasingly large amounts of personal information about our clients, employees of our clients, and our employees, including: bank account numbers, credit card numbers, social security numbers, tax return information, health care information, retirement account information, payroll information, system and network passwords, and other sensitive personal and business information. At the same time, the continued occurrence of high-profile cyber-attacks and data breaches provides evidence of an external environment increasingly hostile to information security. We may be particularly targeted for cyber-attack because of the amount and type of personal and business information that we collect, use, and retain. Vulnerabilities, threats, and more sophisticated and targeted computer crimes pose a risk to the security of our systems and networks, and the confidentiality, availability, and integrity of our data.

 

Data Loss and Business Interruption

 

If our systems are disrupted or fail for any reason, including Internet or systems failure, or if our systems are infiltrated by unauthorized persons, both the Company and our clients could experience data loss, financial loss, harm to reputation, or significant business interruption. Hardware, applications and services, including cloud-based services, that we procure from third-party vendors may contain defects in design or other problems that could compromise the integrity and availability of our services. Any delays or failures caused by network outages, software or hardware failures, or other data processing disruptions, could result in our inability to provide services in a timely fashion or at all. We may be required to incur significant costs to protect against damage caused by disruptions or security breaches in the future. Such events may expose us to unexpected liability, litigation, regulatory investigation and penalties, loss of clients’ business, unfavorable impact to business reputation, and there could be a material adverse effect on our business and results of operations.

 

Our reputation, results of operations, or financial condition may be adversely impacted if we fail to comply with data privacy laws and regulations.

 

Our services require the storage and transmission of proprietary and confidential information of our clients and their employees, including personal or identifying information, as well as their financial and payroll data. Our applications are subject to various complex government laws and regulations on the federal, state, and local levels, including those governing personal privacy. In the U.S., we are subject to rules and regulations promulgated under the authority of the Federal


Trade Commission, the Health Insurance Portability and Accountability Act of 1996, the Family Medical Leave Act of 1993, the ACA, federal and state labor and employment laws, and state data breach notification and data privacy laws, such as the California Consumer Protection Act, which became effective on January 1, 2020. Failure to comply with such laws and regulations could result in the imposition of consent orders or civil and criminal penalties, including fines, which could damage our reputation and have an adverse effect on our results of operations or financial condition. The regulatory framework for privacy issues is rapidly evolving and future enactment of more restrictive laws, rules, or regulations and/or future enforcement actions or investigations could have a materially adverse impact on us through increased costs or restrictions on our business and noncompliance could result in regulatory penalties and significant legal liability.

 

In the event of a catastrophe, our business continuity plan may fail, which could result in the loss of client data and adversely interrupt operations.

 

Our operations are dependent on our ability to protect our infrastructure against damage from catastrophe or natural disaster, severe weather including events resulting from climate change, unauthorized security breach, power loss, telecommunications failure, terrorist attack, public health emergency, or other events that could have a significant disruptive effect on our operations. We have a business continuity plan in place in the event of system failure due to any of these events. Our business continuity plan has been tested in the past by circumstances of severe weather, including hurricanes, floods, and snowstorms, and has been successful. However, these past successes are not an indicator of success in the future. If the business continuity plan is unsuccessful in a disaster recovery scenario, we could potentially lose client data or experience material adverse interruptions to our operations or delivery of services to our clients.

 

We may be adversely impacted by any failure of third-party service providers to perform their functions.

 

As part of providing services to clients, we rely on a number of third-party service providers. These service providers include, but are not limited to, couriers used to deliver client payroll checks and banks used to electronically transfer funds from clients to their employees. Failure by these service providers, for any reason, to deliver their services in a timely manner and in compliance with applicable laws and regulations could result in material interruptions to our operations, impact client relations, and result in significant penalties or liabilities to us.

Adverse changes in our insurance coverage, or in our relationships with key insurance carriers, could harm our business.

 

Our success depends in part on our ability to maintain competitive health and workers' compensation coverage options and insurance rates through well-known insurance carriers. If we are unable to maintain competitive insurance rates or obtain popular and desirable coverage plans through well-known insurance carriers, it could affect our ability to attract and retain employees, which could have a material adverse effect on our business. Where we sponsor insurance coverage and we are not responsible for any deductibles, our carriers set the fixed cost of the plan, which may lead to uncompetitive fees.


In addition, broad adoption of our services in certain geographic regions or industries may make it more difficult for us to obtain competitive health and/or workers' compensation insurance rates due to concentration of customers within a particular region. The loss of any one or more of our key insurance vendors in these areas, or our inability to partner with certain vendors that are better-known or more desirable to our employees or potential employees, could have a material adverse effect on our financial condition and results of operations.

 

We may be adversely impacted by volatility in the political and economic environment.

 

Trade, monetary and fiscal policies, and political and economic conditions may substantially change, and credit markets may experience periods of constriction and variability. These conditions may impact our business due to lower transaction volumes or an increase in the number of clients going out of business. Current or potential clients may decide to reduce their spending on payroll and other outsourcing services. In addition, new business formation may be affected by an inability to obtain credit.

 

We may not be able to attract and retain qualified people, which could impact the quality of our services and customer satisfaction.

 

Our success, growth, and financial results depend in part on our continuing ability to attract, retain, and motivate highly qualified people at all levels, including management, technical, compliance, and sales personnel. Competition for these individuals can be intense, and we may not be able to retain our key people, or attract, assimilate, or retain other highly-qualified individuals in the future, which could harm our future success.

 

In the event we receive negative publicity, our reputation and the value of our brand could be harmed, which may have a material adverse effect on our business.

 

Negative publicity relating to events or activities attributed to us, our corporate employees, or others associated with us, whether or not justified, may tarnish our reputation and reduce the value of our brand. If we are unable to maintain quality solutions, our reputation with our clients may be harmed and the value of our brand may diminish. In addition, if our brand is negatively impacted, it may have a material adverse effect on our business, including challenges retaining clients or attracting new clients and recruiting talent and retaining employees.

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.


 

Revenue Recognition

 

Revenue is recognized in accordance with ASC 606, Contracts with Customers. Our business is typically characterized by long-term client relationships that result in recurring revenue. Our services are provided under written price quotations or service agreements having varying terms and conditions.  Service revenue is recognized in the period services are rendered and earned under service arrangements with clients where service fees are fixed or determinable and collectability is reasonably assured. Our service revenue is largely attributable to processing services where the fee is based on a fixed amount per processing period or a fixed amount per processing period plus a fee per employee or transaction processed.  We do not receive advance payments for set-up fees on some of our service offerings from our clients.

 

We are continuously in the process of performing implementation services for new clients. Depending on the service agreement and/or the size of the client, the installation or conversion period for new clients can vary from a short period of time for a small Employer Services client (as little as 24 hours) to a longer period for a large Employer Services client with multiple deliverables (generally three to six months).  Although we monitor sales that have not yet been installed, we do not view this metric as material to an understanding of our overall business in light of the recurring nature of our business. This metric is not a reported number, but it is used by management as a planning tool to allocate resources needed to install services, and as a means of assessing our performance against the expectations of our clients.

 

Recently Issued Accounting Pronouncements

 

FASB ASU No. 2016-02 (Topic 842), “Leases” – Issued in February 2016, ASU No. 2016-02 established ASC Topic 842, Leases, as amended by subsequent ASUs on the topic, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. ASU 2016-02 requires lessees to apply a two-method approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase. Lessees are required to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. Lessees will recognize expense based on the effective interest method for finance leases or on a straight-line basis for operating leases. The accounting applied by the lessor is largely unchanged from that applied under the existing lease standard. We were be required to record a right-of-use asset and lease liability equal to the present value of the remaining minimum lease payments and will continue to recognize expense on a straight-line basis upon adoption of this standard. ASU 2016-02 is effective for reporting periods for private companies beginning after December 15, 2021, with early adoption permitted. In July 2018, the FASB issued an update ASU 2018-11 Leases: Targeted Improvements, which provides companies with an additional transition option that would permit the application of ASU 2016-02 as of the adoption date rather than to all periods presented. The Company plans to adopt this standard for the interim reporting period ending March 31, 2022. 


 

Note 2 – Going Concern

 

We incurred net income of $869,357 for the year ending December 31, 2021 and had retained earnings of $1,402,157. At December 31, 2021, we had a cash balance of $229,854 and a working capital surplus of $1,404,157.

 

We have been able to generate sufficient cash from operating activities to fund our ongoing operations.

 

Based on the above factors, no doubt exists about our ability to continue as a going concern for one year from the issuance of these financial statements.

 

Note 3 – Concentrations of Business and Credit Risk

 

The Company at times maintains balances in various operating accounts in excess of federally insured limits.

 

The Company has 4 clients that make up the majority of their revenue. The loss of one or more of these clients would create a hardship for the company. The company is constantly looking for more clients so that the risk of losing one of their major clients will not have a major effect on the financials.

 

Note 4 – Commitments and Contingencies

 

Litigation and Claims

 

The Company may be involved in lawsuits and claims arising in the ordinary course of business from time to time. The Company reviews any such legal proceedings and claims on an ongoing basis and follows appropriate accounting guidance when making accrual and disclosure decisions. The Company establishes accruals for those contingencies where the incurrence of a loss is probable and can be reasonably estimated, and it discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for the Company’s financial statements not to be misleading. To estimate whether a loss contingency should be accrued by a charge to income, the Company evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of the loss. The Company does not record liabilities when the likelihood that the liability has been incurred is probable, but the amount cannot be reasonably estimated. Based upon present information, the Company determined that there were no matters that required an accrual as of December 31, 2021 or 2020, nor were there any asserted or unasserted material claims for which material losses are reasonably possible.


 

Note 5 – Notes Payable

 

In May, 2020, the Company’s subsidiary received a Paycheck Protection Program loan in the amount of $942,146. The monthly payments on the note are deferred for a period of 6 months and the notes bear interest of 1%. Monthly payments were to have begun on December 21, 2021 and have been delayed multiple times; however all or a portion of this loan may be forgiven if the Company satisfies certain criteria as follows:

 

The Company may apply for forgiveness of the amount due on this loan in an amount equal to the sum of the following costs incurred during the 8-week period beginning on the date of first disbursement of this loan:

 

a.Payroll costs 

b.Any payment of interest on a covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation) 

c.Any payment on a covered rent obligation 

d.Any covered utility payment 

 

The amount of loan forgiveness shall be calculated (and may be reduced) in accordance with the requirements of the Paycheck Protection Program, including the provisions of Section 1106 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (P.L. 116-136). Not more than 25% of the amount forgiven can be attributable to non-payroll costs. The Company applied for and was granted forgiveness of this loan in May, 2021.

 

Note 6– Related Party Transactions

 

During the year ended December 31, 2021, the company loaned an officer of the company a total of $90,612 with no interest or payment plan. As of December 31, 2021 the balance owed to the company was $90,612.

 

Note 7 – Subsequent Events

 

Effective January 1, 2022, Emissions Zero Module entered into a Stock Purchase Agreement with the sole shareholder of Job Aire Group (“JAG”) to acquire all of the outstanding shares of JAG. Job Aire Group was a privately owned entity and is a staffing company which provides employees to third parties such as airlines, aircraft engine shops, repair facilities and similar entities and the employees provide services to the airline maintenance business.   Pursuant to the terms of the acquisition agreement, Emissions Zero agreed to pay $745,000 in installments and 2% of net revenue received by the Company, up to $1,000,000, for the 36-month period following the closing date.  At closing, Emissions Zero paid an initial installment of $25,000 and will make 36 payments of $20,000 each, beginning January 2, 2022.  As a result of the Stock Purchase Agreement, JAG became a wholly owned subsidiary of Emissions Zero.

 

Emissions Zero Module

BALANCE SHEET

 

 

 

March 31

 

December 31

 

 

2022

 

2020

 

 

(Unaudited)

 

(Audited)

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash

 

$784,016

 

$642,908

Accounts receivable

 

1,539,919

 

-

Due From NCRE

 

73,106

 

62,285

Prepaid expenses

 

27,000

 

7,000

Down Payment on Future Subsidiary

 

-

 

50,000

Other Current Assets

 

700

 

-

Right of Use Asset

 

70,540

 

-

Inventory

 

-

 

-

Total current assets

 

2,495,280

 

762,193

 

 

 

 

 

Fixed Assets

 

 

 

 

Furniture and Equipment

 

46,000

 

46,000

Total Fixed Assets

 

46,000

 

46,000

Less Accumulated Depreciation

 

(7,400)

 

(5,100)

Net Fixed Assets

 

38,600

 

40,900

 

 

 

 

 

Total assets

 

$2,533,880

 

$803,093

 

 

 

 

 

LIABILITIES

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable and accrued expenses

 

2,605

 

8,000

Acquisition Payable

 

240,000

 

-

Notes payable

 

1,200,000

 

1,200,000

Accrued interest

 

96,159

 

60,652

Payroll Liabilities

 

481,602

 

-

Total current liabilities

 

2,020,366

 

1,268,652

 

 

 

 

 

Long-term liabilities:

 

 

 

 

Acquisition Payable

 

334,888

 

-

Long Term Lease Liability

 

71,192

 

-

Total long-term liabilities

 

406,081

 

-

 

 

 

 

 

Total liabilities

 

2,426,447

 

1,268,652

 

 

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

 

Preferred stock, $.001 par value, 50,000,000 authorized;
no shares issued

 

-

 

-

Common stock, $.001 par value, 200,000,000 authorized;
12,481,724 and 12,481,724 shares issued and outstanding

 

167,158

 

167,158

Additional paid in capital

 

513,499

 

(120,658)

Retained Earnings (Accumulated Deficit)

 

(573,224)

 

(512,059)

Total stockholders' equity/(deficit)

 

107,433

 

(465,559)

Total liabilities and stockholders' equity

  

$2,533,880

  

$803,093


Emissions Zero Module

STATEMENTS OF OPERATIONS

 

 

Three Months

 

Three Months

 

 

March 31

 

March 31

 

 

2022

 

2021

 

 

 

 

 

Sales

 

$3,802,402  

 

$ 

Cost of Sales

 

3,433,382  

 

 

 

 

 

 

 

Gross profit

 

369,020  

 

 

 

 

 

 

 

General and administrative expenses:

 

 

 

 

Salaries

 

105,711  

 

 

Depreciation and Amortization

 

2,300  

 

 

Legal and professional fees

 

80,309  

 

30,000  

Marketing and Advertising

 

3,464  

 

 

Acquisition Expense

 

 

 

 

Research and Development

 

4,741  

 

10,000  

Taxes

 

4,240  

 

 

Other general and administrative

 

193,912  

 

 

Total operating expenses

 

394,678  

 

40,000  

(Loss) from operations

 

(25,658) 

 

(40,000) 

 

 

 

 

 

Other income (expense):

 

 

 

 

Interest income

 

 

 

 

Forgiven debt

 

 

 

 

Interest (expense)

 

(35,507) 

 

(1,088) 

(Loss) before taxes

 

(61,165) 

 

(41,088) 

 

 

 

 

 

Provision (credit) for taxes on income

 

 

 

 

Net (loss)

 

$(61,165) 

 

$(41,088) 

 

 

 

 

 

Basic earnings (loss) per common share

 

$(0.00) 

 

$(0.00) 

 

 

 

 

 

Weighted average number of shares outstanding

  

12,481,724  

 

166,600,000  


 

Emissions Zero Module

STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)

As of March 31, 2022

 

 

Preferred Stock

Common Stock

Additional Paid

Accum

 

 

Shares

Amount

Shares

Amount

in Capital

Deficit

Total Equity

Founders Shares Issued

- 

- 

166,600,000 

166,600 

(166,600) 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

 

 

 

(41,088) 

(41,088) 

 

 

 

 

 

 

 

 

Balance, March 31, 2021

- 

- 

166,600,000 

166,600 

(166,600) 

(41,088) 

(41,088) 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

 

 

 

(83,867) 

(83,867) 

 

 

 

 

 

 

 

 

Balance, June 30, 2021

- 

- 

166,600,000 

166,600 

(166,600) 

(124,955) 

(124,955) 

Notes Payable Converted to Common Stock

 

 

558,000 

558 

45,942  

 

46,500  

Net income (loss)

 

 

 

 

 

(174,185) 

(174,185) 

 

 

 

 

 

 

 

 

Balance, September 30, 2021

- 

- 

167,158,000 

167,158 

(120,658) 

(299,140) 

(252,640) 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

 

 

 

(212,919) 

(212,919) 

 

 

 

 

 

 

 

 

Balance, December 31, 2021

- 

- 

167,158,000 

167,158 

(120,658) 

(512,059) 

(465,559) 

 

 

 

 

 

 

 

 

Investment in Job Aire Group

 

 

 

 

634,157  

 

634,157  

Net income (loss)

 

 

 

 

 

(61,165) 

(61,165) 

 

 

 

 

 

 

 

 

Balance, March 31, 2022

- 

- 

167,158,000 

167,158 

513,499  

(573,224) 

107,433  


 

Emissions Zero Module

STATEMENTS OF CASH FLOWS

 

 

Three Months March 31, 2022

 

Three Months March 31, 2021

 

 

 

 

 

Net income (loss)

 

$(61,165) 

 

$(41,088) 

 

 

 

 

 

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

Depreciation

 

2,300  

 

 

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

Right Of Use & Lease Liability

 

653  

 

 

Accounts Receivable and other receivables

 

(467,748) 

 

 

Prepaid expenses and other current assets

 

(20,000) 

 

 

Accounts Payable and Accrued Expenses

 

511,714  

 

1,088  

 

 

 

 

 

Cash Used in Operating Activities

 

(34,246) 

 

(40,000) 

 

 

 

 

 

Cash Flows from Investing Activities

 

 

 

 

Investment in Subsidiary

 

175,354  

 

 

Purchase of Fixed Assets

 

 

 

(6,000) 

Cash Provided By/(Used In) Investing Activities

 

175,354  

 

(6,000) 

 

 

 

 

 

Cash Flows from Financing Activities

 

 

 

 

Proceeds from Shareholder Loans

 

 

 

46,500  

Proceeds from Convertible Notes

 

 

 

75,000  

Cash Provided by Financing Activities

 

 

 

121,500  

 

 

 

 

 

Net Change in Cash

 

141,108  

 

75,500  

 

 

 

 

 

Cash at Beginning of Year

 

642,908  

 

 

 

 

 

 

 

Cash at Period End

  

$784,016  

 

75,500  


 

Emissions Zero Module, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Note 1 – Organization and Summary of Significant Accounting Policies

 

Nature of Business

 

HISTORY

 

Emissions Zero Module, LLC (“EZM”) was a Wyoming company founded in 2021 by Sumit Isaranggunlnaayudhya and William Tiley and is based in Tucson, Arizona.    Emissions Zero Module was established as a research and development company classified in the alternative energy sector. As such, Emissions Zero Module operates without the expectation of immediate profit. Instead, it is expected to contribute to the long-term profitability of The Company. Rather the activities of Emissions Zero Module is expected to lead to discoveries leading the creation of new products.

 

EZM intends specifically to bring a patented product to market that was developed to eliminate the harmful effects of tailpipe emissions produced by internal combustion engines. The Emissions Zero Module (EZM) connects directly to the existing battery in any automobile or truck and works with the car's existing electrical apparatus to create conditions within the engine's combustion chamber that allows for a more complete combustion of fuel. The results of complete combustion of fuel are up to a 95% reduction in total tailpipe emissions, increase performance and, increased miles per gallon of fuel. The EZM works on all types of vehicles including cars, SUVs, diesel trucks, and large over-the-road semis.

 

Due to the current wave of environmental directives in the USA, the author of the EZM technology was developing and manufacturing a product that eliminates carbon monoxide from the emission of automobiles. The EZM represents the fourth generation of this product and, more importantly, represents a product that is ready for the US market. The aforementioned wave of directives has set forth strict emissions (tailpipe) standards for all automobiles and trucks. The internal combustion engine powers 99% of all cars and trucks in use today. The EZM reduces the carbon footprint of the standard automobile by 25%-95% and will enable nearly any vehicle to comply with new emissions standards. EZM, LLC will continue to support clean air initiatives by improving the EZM and introducing ever-evolving products.

 

Just as the catalytic converter began to reduce the pollutants in the air in response to the 1963 Clean Air Act, the EZM will provide the automobile industry the ability to comply with the stricter emissions standards. We are currently performing a large-scale, detailed study of the EZM. Management is also applying for the various governmental approvals necessary to distribute an aftermarket product such as the EZM.


 

PRODUCTS

 

Combustion engines create energy from burning a fuel/air mixture. Spark ignition introduces a spark to a compressed fuel/air mix and the burning causes an expansion of hot gases to push a piston within a cylinder, converting the linear movement of the piston into the rotating movement of a crankshaft that turns the wheels of your car. Compression ignition, or diesel, only air is brought in and compressed before a measured amount of fuel is sprayed into the hot compressed air, causing it to ignite and power the vehicle. The EZM performs emissions control on all types of engines. The EZM is a patented and proprietary emissions control device. The Module is attached directly to the vehicle's battery with the supplied power leads. Upon starting the engine, the Module affects the characteristics of the fuel combustion in the combustion chambers. Through its design and novel use of components, it causes a more efficient and complete burn of the fuel. This enhanced combustion results in a dramatic drop in carbon monoxide, unburnt fuel, and other gasses. As a result of this complete combustion, vehicles will see an increase in fuel efficiency, overall performance, and emissions reduction. This effect occurs in both spark and compression ignition engines and can be adjusted for the size of the vehicle/engine.

 

PATENTS

 

The EZM was granted a US patent and is the technology being used to reduce harmful emissions and improve overall engine efficiency.  Additional patents on products used on the same technology are currently planned and in progress to strengthen the Company’s position with regard to all current and future product lines.

 

MARKET ANALYSIS SUMMARY

 

The EZM falls into the automobile aftermarket product category. For classification purposes, it may be considered as a battery enhancement device. The improvements in emissions and efficiency are equally beneficial to all vehicles that utilize an internal combustion engine. The market ranges from small single horsepower tractors to commercial and industrial vehicles or machines powered by engines with thousands of horsepower. Even though the main focus of the EZM is emissions reduction or elimination, the fact that it connects to the battery may in fact help the process of getting ASTM certification. With respect to market analysis, the emissions control sector is about to explode. Therefore, it is very difficult to determine how big of a share of the market the EZM will control when the market is about to be redefined and there is currently no product out there that compares to the EZM.

 

MARKET SEGMENTATION

 

The closest environmental equivalent to the EZM is the modern catalytic converter. the precursor to the catalytic converter was invented by Eugene Houdry, a French mechanical engineer and expert in catalytic oil refining who lived in the U.S. around 1950. The further refinements and perfection of this concept led the catalytic converter to be adopted by all US auto manufactures as standard equipment in 1975 to comply with the 1963 Clean Air Act. Management believes that the EZM will reach the same level of acceptance in a much shorter period, due to its immediate need and simplistic operational platform. The EZM will initially be sold as an aftermarket product. As its effectiveness has been universally acknowledged, the bar for tailpipe emissions control will once again be raised. Governments will act in the best interest of their constituency to protect the


environment and require these new higher standards to be adopted. As in 1975, the automakers will participate by adapting the EZM to their production vehicles.

 

EMPLOYEES

 

As of March 31, 2022, we had 6 employees involved through a contractual relationship with the Company. Our contractual relationship with employees consists of management agreements, consulting agreements, and employee agreements. We have never experienced a work stoppage and believe our relationship with our employees is good.

 

The Acquisition of Job Aire Group, Inc.

 

Effective January 1, 2022, Emissions Zero Module entered into a Stock Purchase Agreement with Job Aire Group (“JAG”) to acquire all of the outstanding shares of JAG in exchange for $745,000 and 2% of Net Revenue received by the Company from new contracts brought to the company by former ownership, limited to $1,000,000 during the 36-month period following the closing date.  At closing, EZM disbursed $25,000 and will make 36 payments of $20,000, beginning January 2, 2022.  As a result of the Stock Purchase, JAG became a wholly owned subsidiary of EZM.

HISTORY

Job Aire Group, an employee leasing company, was incorporated under the laws of the State of Arizona.  The Company is a multi-technical aviation company specializing in Contract Labor, Aircraft and Engine inspection and audit, plus hard-core aeronautical engineering. Also skilled in aircraft maintenance marketing, we place aircraft into FAR 145 facilities for repair, refurbishment, painting, modification and overhaul. JAG is well known for providing experienced and professional heavy transport aircraft maintenance technicians world-wide.

The Company was a corporate expansion of Job-Aire Aviation Services, a company created in 1997 by William D. Tiley, a retired Air Force Officer and Commercial Pilot.  Mr. Tiley retired in 2021 and Nick Ammons, as of January 1, 2022, is the President and Chairman of the Board.

OVERVIEW

The Aircraft Maintenance, Repair and Overhaul (MRO) market in the U.S. is estimated at US$9.9 Billion in the year 2021. China, the world's second largest economy, is forecast to reach a projected market size of US$6.3 Billion by the year 2026 trailing a CAGR of 5.9% over the analysis period. Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at 2.2% and 2.3% respectively over the analysis period. Within Europe, Germany is forecast to grow at approximately 2.8% CAGR. Low labor, service costs, easy access to skilled labor and enhanced service levels, have made Asia-Pacific a highly attractive outsourcing and MRO destination. Asian operators are driving MRO growth with low-cost labor markets such as Vietnam and Thailand. Airline operators worldwide are currently outsourcing nearly 30% of wide-body heavy airframe maintenance needs to China and Asia­ Pacific region. The repatriation of wide-body heavy maintenance work is anticipated to create some revenue growth in stagnant MRO markets in North America and Western Europe.


 

The Line Maintenance Segment is expected to reach $8.9 Billion by 2026. Aircraft Line Maintenance involves inspection, identification and rectification of problem on the aircraft body. The process also comprises of crucial aircraft maintenance and regular repairs as per requirement. Line maintenance and planning which was preferred to be retained in-house accounts for a larger share of MRO outsourcing in recent years as several carriers are increasingly moving heavy and base maintenance work to the emerging regions, primarily in Asia, as they offer cheaper and efficient services. In the global Line Maintenance segment, USA, Canada, Japan, China and Europe will drive the 2.2% CAGR estimated for this segment. These regional markets accounting for a combined market size of US$5.5 Billion in the year 2020 will reach a projected size of US$6.4 Billion by the close of the analysis period. China will remain among the fastest growing in this cluster of regional markets. Led by countries such as Australia, India, and South Korea, the market in Asia-Pacific is forecast to reach US$1.2 Billion by the year 2026, while Latin America will expand at a 2.5% CAGR through the analysis period.

 

The Aviation Maintenance Group (AMG) predicts shortages for the next 10 years globally. This is supported by the Aviation Technician Education Council (ATEC, founded in 1961) 2021 Pipeline Report where ATEC concluded the shortage of Aviation Technicians will continue to be a global dynamic for the next 15 years.

 

Additional research by SOURCE Global Industry Analysts, Inc. shows that consumers in this industry primarily focus on the following factors when making purchasing decisions:

·Availability 

·Experience 

·Cost 

·Retention 

·Work History 

 

Once these criteria are met, the decision to utilize Job Aire Group is solely based on Job Aire Group's ability to provide the labor required. This condition will continue for the foreseeable future due to increasing global demand for maintenance specialists.

JAG specializes in:

·Contract Labor, Aircraft and Engine Inspection. 

· Audits. 

·Job Aire Group also provides hard-core aeronautical engineering, skilled personnel qualified in aircraft maintenance marketing. 

·Job Aire Group places aircraft into FAR 145 facilities for repair, refurbishment, painting, modification and overhaul. 

·Job Aire Group is well known for providing experienced and professional heavy transport aircraft maintenance technicians world-wide. 

·Job Aire Group services Foreign and Domestic 


 

MARKETS

 

According to the Federal Aviation Administration, contractors are a key solution to the Maintenance, Repair and Overhaul (“MRO”) professional shortage the industry is facing.

 

Owing to the increasing number of both air travelers and aircraft fleet, the aviation MRO subsector has recently witnessed a strong demand for professionals, which is expected to last through 2024. According to a recent report by Global Industry Analysts Inc., engine overhaul, which is the most important aspect of aircraft upkeep, is witnessing the fastest growth followed by components maintenance.

 

Unfortunately, the supply of MRO talent lags behind the demand. Although aviation schools have tried to keep up, there remains a wide gap between what's needed and what's on supply. Aviation companies are encouraged to turn to contract houses to fill any gaps. While not always an ideal option, contract workers allow airlines and other aviation players to fulfill short-term project needs, manage unpredictable workloads, fill positions for absentee employees, and fill temporary MRO gaps.

 

The estimated number of potential clients within the JAG's geographic scope.

·ST Engineering (TX & AL) 

·Fly Exclusive 

·ATS 

·STS 

·SNC 

·Collins Aerospace 

·Delta TechOps 

·FL Technics 

·UAB 

·GE Aviation 

·Singapore Technologies Engineering Ltd 

·ComAv 

·Defense contractors 

 

PROMOTIONAL STRATEGY

 

Job Aire Group will promote sales and enhance recruitment using the following methods:

 

a.Expand on existing contracts. (All three of the major clients have request a 3- or 4-fold increase in employees 

b.Satellite office and strategic alliances with existing companies to provide logistical support. (First office in Mexico established April of 2022) 

c.Trade group associations 

d.Social media 


 

NEW SERVICE

 

Job Aire Group is prepared to expand on existing contracts and add new services to the Maintenance, Repair and Overhaul (“MRO”) market:

 

Staffing and management opportunities for growth:

a.Currently, JAG provides support in human resources and special skill requirements, DAR and DER engineering, plus drawing and drafting applications. 

b.Job Aire Group seeks to expand into additional areas within the general aviation and defense contractor sector. 

c.JAG seeks to establish a brick-and-mortar facility at the Benson Arizona Municipal Airport so that it can increase JAG's visibility within the airport service industry thus, providing a bridge in multiple service opportunities, including Fuel Base Operations (FBO).  JAG has a bid submitted for consideration to manage the Benson Municipal Airport. A favorable decision is expected in the next 90 days. 

 

As of March 31, 2022, we had 208 employees involved through a contractual relationship with the Company. Our contractual relationship with employees consists of management agreements, service agreements, and employee agreements.

 

Basis of Presentation

 

The accompanying audited financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) to reflect the accounts and operations of the Company. 

 

Risks and Uncertainties

 

An investment in our securities involves a high degree of risk.  You should not invest in our securities if you cannot afford to lose your entire investment. In deciding whether you should invest in our securities, you should carefully consider the following information together with all of the other information contained in this Current Report.  Any of the following risk factors can cause our business, prospects, financial condition or results of operations to suffer and you to lose all or part of your investment.

 

General Risks Relating to our Business, Operations, and Financial Condition

 

We have a limited operating history and are subject to the risks encountered by early-stage companies.

 

Because our operating company has a limited operating history, you should consider and evaluate our operating prospects in light of the risks and uncertainties frequently encountered by early-stage companies in rapidly evolving markets. For us, these risks include:

 

·risks that we may not have sufficient capital to achieve our growth strategy; 


·risks that we may not develop our product and service offerings in a manner that enables us to be profitable and meet our customers’ requirements; 

 

·risks that our growth strategy may not be successful; and 

 

·risks that fluctuations in our operating results will be significant relative to our revenues. 

 

These risks are described in more detail below. Our future growth will depend substantially on our ability to address these and the other risks described in this section.

 

We have a history of net losses, may incur substantial net losses in the future and may not achieve profitability.

 

Although we have begun to generate revenues, we have incurred significant losses since inception. We expect to incur increased costs to implement our business plan and increase revenues, such as costs relating to expanding our crowd funding platform into additional country markets. If our revenues do not increase to offset these additional expenses or if we experience unexpected increases in operating expenses, we will continue to incur significant losses and will not become profitable. If we are not able to significantly increase our revenues, we will likely not be able to achieve profitability in the future.

 

Our operating losses and working capital deficiency raise substantial doubt about our ability to continue as a going concern.  If we do not continue as a going concern, investors could lose their entire investment.

 

Our operating losses and working capital deficiency raise substantial doubt about our ability to continue as a going concern.  If we do not generate revenues, do not achieve profitability and do not have other sources of financing for our business, we may have to curtail or cease our development plans and operations, which could cause investors to lose the entire amount of their investment.

 

If we lose the services of our founders or other members of our senior management team, we may not be able to execute our business strategy.

 

Our success depends in a large part upon the continued service of our senior management team. In particular, the continued service of our founders, David Riggs, Chief Executive Officer, Sumit Isaranggunlnaayudhya, Chief Technology Officer, Russell Kluwann, Chief Operating Officer and Kent Hush, Chief Financial Officer, is critical to our vision, strategic direction, culture, products and technology. We do not maintain key-man insurance for any of our founders or other members of our senior management team. The loss of any of our founders, even temporarily, or any other member of senior management could harm our business.


 

We may need additional financing.  Any limitation on our ability to obtain such additional financing could have a material adverse effect on our business, financial condition and results of operations.

 

There can be no assurance that we will not require additional capital and the raising of additional capital could result in dilution to our stockholders.  In addition, there is no assurance that we will be able to obtain additional capital if we need it, or that if available, it will be available to us on favorable or reasonable terms.  Any limitation on our ability to obtain additional capital as and when needed could have a material adverse effect on our business, financial condition and results of operations.

 

If we fail to maintain proper and effective internal controls, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating results, our ability to operate our business and investors’ views of us.

 

Ensuring that we have adequate internal financial and accounting controls and procedures in place so that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort that will need to be evaluated frequently.  Section 404 of the Sarbanes-Oxley Act requires public companies to conduct an annual review and evaluation of their internal controls.  Our failure to maintain the effectiveness of our internal controls in accordance with the requirements of the Sarbanes-Oxley Act could have a material adverse effect on our business.  We could lose investor confidence in the accuracy and completeness of our financial reports, which could have an adverse effect on the price of our common stock. In addition, if our efforts to comply with new or changed laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against us and our business may be harmed.

 

Risks Related Specifically to the Business of Emissions Zero Module

 

Increasing competition within our emerging industry could have an impact on our business prospects.

 

The alternative energy market is an emerging industry where new competitors are continuing to enter the market. These competing companies may have significantly greater financial and other resources than we have and may have been developing their products and services longer than we have been developing ours.  Increasing competition may have a negative impact on our profit margins.

 

We may not be able to adequately protect our proprietary technology, and our competitors may be able to offer similar products and services, which would harm our competitive position.

 

Our success depends in part upon our proprietary technology. We rely primarily on trademark, copyright, service mark and trade secret laws, confidentiality procedures, license agreements and contractual provisions to establish and protect our proprietary rights. Despite these precautions, third parties could copy or otherwise obtain and use our technology without authorization, or develop similar technology independently. We cannot assure you that the protection of our proprietary rights will be adequate or that our competitors will not independently develop similar


technology, duplicate our products and services or design around any intellectual property rights we hold.

 

If third parties claim that we infringe their intellectual property, it may result in costly litigation.

 

We cannot assure you that third parties will not claim our current or future products infringe their intellectual property rights. Any such claims, with or without merit, could cause costly litigation that could consume significant management time. As the number of product and services offerings in the crowd funding market increases and functionalities increasingly overlap, companies such as ours may become increasingly subject to infringement claims. Such claims also might require us to enter into royalty or license agreements. If required, we may not be able to obtain such royalty or license agreements, or obtain them on terms acceptable to us.

 

We may not be able to adequately plan, or may experiences changes in the business environment that could impact our success to attract and maintain customers in the alternate energy sector.  We also could experience unforeseen difficulties related to our product building and performance.   Some of the factors that could cause adverse impacts include:

 

Many of our target customers are large commercial vehicle OEM customers and large volume customers, and the failure to obtain such customers, could have an adverse impact on our business. 

 

If any of our battery products fail to perform as expected, our ability to develop, market and sell our current products or future technology could be harmed. 

 

We operate in an extremely competitive industry and are subject to pricing pressures. Further, many other battery manufacturers have significantly greater resources than we have. 

 

Entering into strategic alliances and relying on third-party manufacturing, including from suppliers of components we include in our finished products, exposes us to risks. 

 

We are dependent on our suppliers to fulfill our customers’ orders, and if we fail to manage our relationships effectively with, or lose the services of, these suppliers and we cannot substitute suitable alternative suppliers, our operations would be materially adversely affected. 

 

Increases in costs, disruption of supply or shortage of any of our battery components, such as battery cells, electronic and mechanical parts, or raw materials used in the production of such parts, could harm our business. 

 

Our failure to keep up with rapid technological changes and evolving industry standards may cause our products to become obsolete and less marketable, resulting in loss of market share to our competitors or a decrease in demand for our battery packs and modules due to substitute products. 

 

If we cannot continue to develop new products in a timely manner and at favorable margins, we may not be able to compete effectively. 


 

Developments in alternative technology may adversely affect the demand for our battery modules. 

 

Manufacturing or use of our products may cause accidents, which could result in significant production interruption, delay or claims for substantial damages. 

 

We may become subject to product liability claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims. 

 

Future product recalls could materially adversely affect our business, future prospects, financial condition and operating results. 

 

Third-party claims or litigation alleging infringement of patents or infringement or misappropriation of other proprietary rights, or seeking to invalidate our patents may adversely affect our business. 

 

We are currently dependent on a single assembly facility. If our facility becomes inoperable, we will be unable to produce our battery products and our business will be harmed. 

 

Our efforts to increase the scale and capacity of our assembly processes and systems, could be disruptive to our operations and adversely affect our results of operations and financial condition. 

 

We may be unable to successfully expand our operations or manage our growth effectively. 

 

Our operations are subject to a variety of environmental, health and safety rules that can bring scrutiny from regulatory agencies and increase our costs. 

 

We rely on information technology and any failure, inadequacy, interruption or security lapse of that technology, including any cybersecurity incidents, could harm our ability to operate our business effectively. 

 

Risks Specifically Related to the Business of Job Aire Group

 

Our business and results of operations have been, and our financial condition may be, impacted by the outbreak of COVID-19 and such impact could be materially adverse.

 

The global spread of COVID-19 created significant volatility, uncertainty and economic disruption. In the United States and globally, governmental authorities instituted certain preventative measures, including border closures, travel restrictions, operational restrictions on certain businesses, shelter-in-place orders, quarantines and recommendations to practice social distancing. These restrictions disrupted and may continue to disrupt economic activity, resulting in reduced commercial and consumer confidence and spending, increased unemployment, closure or restricted operating conditions for businesses, volatility in the global capital markets, instability in the credit and financial markets, labor shortages, regulatory recommendations to provide relief


for impacted consumers, disruption in supply chains, and restrictions on many hospitality and travel industry operations.

 

The extent to which the coronavirus pandemic impacts our business, operations, and financial results is uncertain and will depend on future developments, including the duration or recurrence, of the pandemic, the related length and severity of its impact on the U.S. and global economy, and the continued governmental, business and individual actions taken in response to the pandemic and economic disruption. Impacts related to the COVID-19 pandemic are expected to continue to pose risks to our business for the foreseeable future, heightened many of the risks and uncertainties identified below, and could have a materially adverse impact on our business, financial condition, and results of operations.

 

Our business, services, and financial condition may be adversely impacted by changes in government regulations and policies.

 

Many of our services, particularly payroll tax administration services and employee benefit plan administration services, are designed according to government regulations that often change. Changes in regulations could affect the extent and type of benefits employers are required, or may choose, to provide employees or the amount and type of taxes employers and employees are required to pay. Such changes could reduce or eliminate the need for some of our services and substantially decrease our revenue. Added requirements could also increase our cost of doing business.

 

Our business and reputation may be adversely impacted if we fail to comply with U.S. and foreign laws and regulations.

 

Our services are subject to various laws and regulations, including, but not limited to, the ACA and anti-money laundering rules. The enactment of new laws and regulations, modifications of existing laws and regulations, or the adverse application or interpretation of new or existing laws or regulations can adversely affect our business. Failure to update our services to comply with modified or new legislation in the area of health care reform as well as failure to educate and assist our clients regarding this legislation could adversely impact our business reputation and negatively impact our client base. Failure to comply with laws and regulations could result in the imposition of consent orders or civil and criminal penalties, including fines, which could damage our reputation and have an adverse effect on our results of operations or financial condition.

 

We may not be able to keep pace with changes in technology or provide timely enhancements to our products and services.

 

The market for our products is characterized by rapid technological advancements, changes in customer requirements, frequent new product introductions, and enhancements and changing industry standards. To maintain our growth strategy, we must adapt and respond to technological advances and technological requirements of our clients. Our future success will depend on our ability to: enhance our current products and introduce new products in order to keep pace with products offered by our competitors; enhance capabilities and increase the performance of our internal systems, particularly our systems that meet our clients’ requirements; and adapt to technological advancements and changing industry standards. We continue to make significant investments related to the development of new technology. If our systems become outdated, it may


negatively impact our ability to meet performance expectations related to quality, time to market, cost and innovation relative to our competitors. The failure to provide more efficient and user-friendly customer-facing digital experience across internet and mobile platforms as well as in physical locations may adversely impact our business and operating results. There can be no assurance that our efforts to update and integrate systems will be successful. If we do not integrate and update our systems in a timely manner, or if our investments in technology fail to provide the expected results, there could be a material adverse effect to our business and results of operations. The failure to continually develop enhancements and use of technologies such as robotics and other workflow automation tools, natural language processing, and artificial intelligence/machine learning may impact our ability to increase the efficiency of and reduce costs associated with operational risk management and compliance activities.

 

We could be subject to reduced revenues, increased costs, liability claims, or harm to our competitive position as a result of cyberattacks, security vulnerabilities or Internet disruptions.

 

We rely upon information technology (“IT”) networks, cloud-based platforms, and systems to process, transmit, and store electronic information, and to support a variety of business processes, some of which are provided by third-party vendors. Cyberattacks and security threats are a risk to our business and reputation. A cyberattack, unauthorized intrusion, malicious software infiltration, network disruption or outage, corruption of data, or theft of personal or other sensitive information, could have a material adverse effect on our business operations or that of our clients, result in liability or regulatory sanction, or cause harm to our business and reputation and result in a loss in confidence in our ability to serve clients all of which could have a material adverse effect on our business. The rapid speed of disruptive innovations involving cyberattacks, security vulnerabilities and Internet disruptions enabled by new and emerging technologies may outpace our organization's ability to compete and/or manage the risk appropriately. In addition, cybercriminals may seek to exploit the disruption caused by the COVID-19 pandemic by attempting to engage in payment-related fraud or by more frequently attempting to gain access to our systems through phishing or other means that may be more successful when most of our employees are working remotely.

 

Data Security and Privacy Leaks: We collect, use, and retain increasingly large amounts of personal information about our clients, employees of our clients, and our employees, including: bank account numbers, credit card numbers, social security numbers, tax return information, health care information, retirement account information, payroll information, system and network passwords, and other sensitive personal and business information. At the same time, the continued occurrence of high-profile cyber-attacks and data breaches provides evidence of an external environment increasingly hostile to information security. We may be particularly targeted for cyber-attack because of the amount and type of personal and business information that we collect, use, and retain. Vulnerabilities, threats, and more sophisticated and targeted computer crimes pose a risk to the security of our systems and networks, and the confidentiality, availability, and integrity of our data.

 

Data Loss and Business Interruption

 

If our systems are disrupted or fail for any reason, including Internet or systems failure, or if our systems are infiltrated by unauthorized persons, both the Company and our clients could experience data loss, financial loss, harm to reputation, or significant business interruption.


Hardware, applications and services, including cloud-based services, that we procure from third-party vendors may contain defects in design or other problems that could compromise the integrity and availability of our services. Any delays or failures caused by network outages, software or hardware failures, or other data processing disruptions, could result in our inability to provide services in a timely fashion or at all. We may be required to incur significant costs to protect against damage caused by disruptions or security breaches in the future. Such events may expose us to unexpected liability, litigation, regulatory investigation and penalties, loss of clients’ business, unfavorable impact to business reputation, and there could be a material adverse effect on our business and results of operations.

 

Our reputation, results of operations, or financial condition may be adversely impacted if we fail to comply with data privacy laws and regulations.

 

Our services require the storage and transmission of proprietary and confidential information of our clients and their employees, including personal or identifying information, as well as their financial and payroll data. Our applications are subject to various complex government laws and regulations on the federal, state, and local levels, including those governing personal privacy. In the U.S., we are subject to rules and regulations promulgated under the authority of the Federal Trade Commission, the Health Insurance Portability and Accountability Act of 1996, the Family Medical Leave Act of 1993, the ACA, federal and state labor and employment laws, and state data breach notification and data privacy laws, such as the California Consumer Protection Act, which became effective on January 1, 2020. Failure to comply with such laws and regulations could result in the imposition of consent orders or civil and criminal penalties, including fines, which could damage our reputation and have an adverse effect on our results of operations or financial condition. The regulatory framework for privacy issues is rapidly evolving and future enactment of more restrictive laws, rules, or regulations and/or future enforcement actions or investigations could have a materially adverse impact on us through increased costs or restrictions on our business and noncompliance could result in regulatory penalties and significant legal liability.

 

In the event of a catastrophe, our business continuity plan may fail, which could result in the loss of client data and adversely interrupt operations.

 

Our operations are dependent on our ability to protect our infrastructure against damage from catastrophe or natural disaster, severe weather including events resulting from climate change, unauthorized security breach, power loss, telecommunications failure, terrorist attack, public health emergency, or other events that could have a significant disruptive effect on our operations. We have a business continuity plan in place in the event of system failure due to any of these events. Our business continuity plan has been tested in the past by circumstances of severe weather, including hurricanes, floods, and snowstorms, and has been successful. However, these past successes are not an indicator of success in the future. If the business continuity plan is unsuccessful in a disaster recovery scenario, we could potentially lose client data or experience material adverse interruptions to our operations or delivery of services to our clients.


 

We may be adversely impacted by any failure of third-party service providers to perform their functions.

 

As part of providing services to clients, we rely on a number of third-party service providers. These service providers include, but are not limited to, couriers used to deliver client payroll checks and banks used to electronically transfer funds from clients to their employees. Failure by these service providers, for any reason, to deliver their services in a timely manner and in compliance with applicable laws and regulations could result in material interruptions to our operations, impact client relations, and result in significant penalties or liabilities to us.

 

We may be adversely impacted by volatility in the political and economic environment.

 

Trade, monetary and fiscal policies, and political and economic conditions may substantially change, and credit markets may experience periods of constriction and variability. These conditions may impact our business due to lower transaction volumes or an increase in the number of clients going out of business. Current or potential clients may decide to reduce their spending on payroll and other outsourcing services. In addition, new business formation may be affected by an inability to obtain credit.

 

We may not be able to attract and retain qualified people, which could impact the quality of our services and customer satisfaction.

 

Our success, growth, and financial results depend in part on our continuing ability to attract, retain, and motivate highly qualified people at all levels, including management, technical, compliance, and sales personnel. Competition for these individuals can be intense, and we may not be able to retain our key people, or attract, assimilate, or retain other highly-qualified individuals in the future, which could harm our future success.

 

In the event we receive negative publicity, our reputation and the value of our brand could be harmed, which may have a material adverse effect on our business. Negative publicity relating to events or activities attributed to us, our corporate employees, or others associated with us, whether or not justified, may tarnish our reputation and reduce the value of our brand. If we are unable to maintain quality solutions, our reputation with our clients may be harmed and the value of our brand may diminish. In addition, if our brand is negatively impacted, it may have a material adverse effect on our business, including challenges retaining clients or attracting new clients and recruiting talent and retaining employees.

 

Risks Relating to our Securities

 

Because the Share Exchange will result in a deemed a reverse acquisition, we may not be able to attract the attention of major brokerage firms, which may limit the liquidity of our Common Stock and may make it more difficult for us to raise additional capital in the future.

 

Additional risks may exist because the Share Exchange will be considered a “reverse acquisition” under accounting and securities regulations. Certain SEC rules are more restrictive when applied to reverse acquisition companies, such as the ability of stockholders to resell their shares of Common Stock pursuant to Rule 144. In addition, securities analysts of major brokerage firms may not provide coverage of our Common Stock following the Share Exchange because there may


be little incentive for brokerage firms to recommend the purchase of our Common Stock. As a result, our Common Stock may have limited liquidity and investors may have difficulty selling it. In addition, we cannot assure you that brokerage firms will want to conduct any secondary offerings on our behalf if we seek to raise additional capital in the future. Our inability to raise additional capital may have a material adverse effect on our business.

 

There is not now, and there may not ever be, an active market for the Company’s Common Stock.

 

There currently is no public market for our Common Stock.  Further, although our Common Stock is currently quoted on the OTC Bulletin Board (the “OTCBB”) and on the OTC Markets QB Tier, trading of our Common Stock has not yet commenced.  When our stock does begin to trade, such trading may be extremely sporadic.  For example, several days may pass before any shares may be traded.  As a result, an investor may find it difficult to dispose of, or to obtain accurate quotations of the price of, our Common Stock.  Accordingly, investors must assume they may have to bear the economic risk of an investment in our Common Stock for an indefinite period of time.  There can be no assurance that a more active market for the Common Stock will develop, or if one should develop, there is no assurance that it will be sustained.  This severely limits the liquidity of our Common Stock, and would likely have a material adverse effect on the market price of our Common Stock and on our ability to raise additional capital.

 

We cannot assure you that the Common Stock will become liquid or that it will be listed on a securities exchange.

 

Until our Common Stock is listed on a national securities exchange such as the New York Stock Exchange or the Nasdaq Stock Market, we expect our Common Stock to remain eligible for quotation on the OTCBB and OTC Markets QB Tier.  In those venues, however, an investor may find it difficult to obtain accurate quotations as to the market value of our Common Stock.  In addition, if we fail to meet the criteria set forth in SEC regulations, various requirements would be imposed by law on broker-dealers who sell our securities to persons other than established customers and accredited investors.  Consequently, such regulations may deter broker-dealers from recommending or selling our Common Stock, which may further affect the liquidity of the Common Stock.  This would also make it more difficult for us to raise capital.

 

Our Common Stock is subject to the “penny stock” rules of the SEC and the trading market in the securities is limited, which makes transactions in the stock cumbersome and may reduce the value of an investment in the stock.

 

The SEC 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 SEC 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 common stock and cause a decline in the market value of 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.

 

The price of our Common Stock may become volatile, which could lead to losses by investors and costly securities litigation.

 

The trading price of our Common Stock is likely to be highly volatile and could fluctuate in response to factors such as:

 

·actual or anticipated variations in our operating results; 

 

·announcements of developments by us or our competitors; 

 

·announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments; 

 

·adoption of new accounting standards affecting our Company’s industry; 

 

·additions or departures of key personnel; 

 

·sales of our Common Stock or other securities in the open market; and 


 

·other events or factors, many of which are beyond our control. 

 

The stock market is subject to significant price and volume fluctuations. In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been initiated against the company. Litigation initiated against us, whether or not successful, could result in substantial costs and diversion of our management’s attention and resources, which could harm our business and financial condition.

 

We do not anticipate dividends to be paid on our Common Stock, and investors may lose the entire amount of their investment.

 

Cash dividends have never been declared or paid on the Common Stock, and we do not anticipate such a declaration or payment for the foreseeable future. We expect to use future earnings, if any, to fund business growth. Therefore, stockholders will not receive any funds absent a sale of their shares. We cannot assure stockholders of a positive return on their investment when they sell their shares, nor can we assure that stockholders will not lose the entire amount of their investment.

 

If securities analysts do not initiate coverage or continue to cover our Common Stock or publish unfavorable research or reports about our business, this may have a negative impact on the market price of our common stock.

 

The trading market for the Common Stock will depend on the research and reports that securities analysts publish about our business and the Company. We do not have any control over these analysts. There is no guarantee that securities analysts will cover the Common Stock. If securities analysts do not cover the Common Stock, the lack of research coverage may adversely affect its market price. If we are covered by securities analysts, and our stock is the subject of an unfavorable report, our stock price and trading volume would likely decline. If one or more of these analysts ceases to cover the Company or fails to publish regular reports on the Company, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.  

 

You may experience dilution of your ownership interests because of the future issuance of additional shares of the Common Stock.

 

In the future, we may issue our authorized but previously unissued equity securities, resulting in the dilution of the ownership interests of our present stockholders and the purchasers of Common Stock offered hereby.  We are currently authorized to issue an aggregate of 300,000,000 shares of Common Stock.  As of the closing of the Share Exchange, there will be xx shares of our Common Stock outstanding.   We may also issue additional shares of our Common Stock or other securities that are convertible into or exercisable for our Common Stock in connection with hiring or retaining employees, future acquisitions, future sales of its securities for capital raising purposes, or for other business purposes.  The future issuance of any such additional shares of our Common Stock may create downward pressure on the trading price of the Common Stock.  There can be no assurance that we will not be required to issue additional shares, warrants or other convertible securities in the future in conjunction with any capital raising efforts, including at a price (or exercise prices) below the price at which shares of the Common Stock will be initially quoted on the OTCBB and the OTC Markets QB Tier.  

 


Use of Estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Revenue Recognition

 

For the twelve months ended December 31, 2021 and 2020, the Company did not earn revenues.  As a result of the acquisition of Job Aire Group during the interim period ending March 31, 2022, all of our revenue is generated through our wholly owned subsidiary, Job Aire Group.

 

Our business is typically characterized by long-term client relationships that result in recurring revenue. Our services are provided under written price quotations or service agreements having varying terms and conditions.  Service revenue is recognized in the period services are rendered and earned under service arrangements with clients where service fees are fixed or determinable and collectability is reasonably assured. Our service revenue is largely attributable to processing services where the fee is based on a fixed amount per processing period or a fixed amount per processing period plus a fee per employee or transaction processed. We do not receive advance payments for set-up fees on some of our service offerings from our clients.

 

We are continuously in the process of performing implementation services for new clients. Depending on the service agreement and/or the size of the client, the installation or conversion period for new clients can vary from a short period of time for a small Employer Services client (as little as 24 hours) to a longer period for a large Employer Services client with multiple deliverables (generally three to six months).  Although we monitor sales that have not yet been installed, we do not view this metric as material to an understanding of our overall business in light of the recurring nature of our business. This metric is not a reported number, but it is used by management as a planning tool to allocate resources needed to install services, and as a means of assessing our performance against the expectations of our clients.

 

Recently Issued Accounting Pronouncements

 

FASB ASU No. 2016-02 (Topic 842), “Leases” – Issued in February 2016, ASU No. 2016-02 established ASC Topic 842, Leases, as amended by subsequent ASUs on the topic, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. ASU 2016-02 requires lessees to apply a two-method approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase. Lessees are required to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. Lessees will recognize expense based on the effective interest method for finance leases or on a straight-line basis for operating leases. The accounting applied by the lessor is largely unchanged from that applied under the existing lease standard. We will be required to record a right-of-use asset and lease liability equal to the present value of the remaining minimum lease payments and will continue to recognize expense on a straight-line basis upon adoption of this standard. ASU 2016-02 is effective for


reporting periods for private companies beginning after December 15, 2021, with early adoption permitted. In July 2018, the FASB issued an update ASU 2018-11 Leases: Targeted Improvements, which provides companies with an additional transition option that would permit the application of ASU 2016-02 as of the adoption date rather than to all periods presented. The Company adopted this standard for the interim reporting period ending March 31, 2022. 

 

Note 2 – Going Concern

 

We incurred a net loss of $831,165 for the three months ending March 31, 2022, and had retained earnings of $58,933. At March 31, 2022, we had a cash balance of $784,016 and a working capital surplus of $1,771,074.

 

With the addition of our wholly owned subsidiary, Job Aire Group, we have been able to generate sufficient cash from operating activities to fund our ongoing operations.

 

Based on the above factors, no doubt exists about our ability to continue as a going concern for one year from the issuance of these financial statements.

 

Note 3 – Concentrations of Business and Credit Risk

 

The Company at times maintains balances in various operating accounts in excess of federally insured limits.

 

The Company’s wholly owned subsidiary has 4 clients that make up the majority of their revenue. The loss of one or more of these clients would create a hardship for the company. The company is constantly looking for more clients so that the risk of losing one of their major clients will not have a major effect on the financials.

 

Note 4 – Commitments and Contingencies

 

Litigation and Claims

 

The Company may be involved in lawsuits and claims arising in the ordinary course of business from time to time. The Company reviews any such legal proceedings and claims on an ongoing basis and follows appropriate accounting guidance when making accrual and disclosure decisions. The Company establishes accruals for those contingencies where the incurrence of a loss is probable and can be reasonably estimated, and it discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for the Company’s financial statements not to be misleading. To estimate whether a loss contingency should be accrued by a charge to income, the Company evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of the loss. The Company does not record liabilities when the likelihood that the liability has been incurred is probable, but the amount cannot be reasonably estimated. Based upon present information, the Company determined that there were no matters that required an accrual as of March 31, 2022 or 2021, nor were there any asserted or unasserted material claims for which material losses are reasonably possible.


 

Operating Lease Commitments

 

The Company leases an office space under a lease agreement that expires December 31, 2024. The Company does not have any significant capital leases.

 

The components of total lease costs are as follows:

Schedule of Components of Total Lease Cost

 

 

 

For The Three Months Ended March 31,

 

 

2022

Operating lease cost

 

7,090 

Total lease cost

  

$7,090 

 

Cash paid for amounts included in operating lease liabilities was $6,437 for the three months ended March 31, 2022. The table below presents total operating lease ROU assets and lease liabilities as of March 31, 2022:

 

Schedule of Operating Lease ROU Assets and Lease Liabilities

 

Operating lease ROU assets

 

$70,540 

 

 

 

Operating lease liabilities

  

 $71,192 

 

The table below presents the maturities of operating lease liabilities as of March 31,

Schedule of Maturities of Operating Lease Liabilities

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Schedule of Operating Weighted Average Remaining Lease and Discount Rate

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Note 5 – Convertible Notes Payable

 

During the twelve months ended December 31, 2021, the Company held a closing of its PPM in which it sold 4,487,500 shares of its securities for total proceeds of $1,215,000. The Subscription Agreement included an offering of a minimum of one hundred (100) and a maximum of six hundred (600) unsecured Promissory Notes at $5,000 per unit.  The Company may at any time, or from time to time, make a voluntary prepayment, whether in full or in part, of these Notes, without premium or penalty. The Notes mature in 24 months and bear annual interest of 12%.  At maturity, and at the election of the Noteholder, each $5,000 unit is convertible into common stock equity units at maturity. The Notes may not be sold, offered for sale, pledged, assigned, or otherwise disposed of unless certain conditions are satisfied, as more fully set forth in the Subscription Agreement. In addition, the Notes are deemed to have been made in the State of Wyoming, and any and all performance, or the breach thereof, will be interpreted and construed pursuant to the laws of the State of Wyoming without regard to conflict of laws rules applied in the State of Wyoming.

 

Upon the occurrence of an Event of Default, the Noteholder may, by written notice to the Company, declare the unpaid principal amount and all accrued interest of the Note immediately due and payable. Under the terms of the Promissory Note, a default is defined as one or more of the following events.

 

(a)The Maker shall fail to pay any interest payment on this Note when due for a period of thirty (30) days after notice of such default has been sent by the Holder to the Maker. 

 

(b)The Maker shall dissolve or terminate the existence of the Maker. 

 

(c)The Maker shall file a petition in bankruptcy, make an assignment for the benefit of its creditors, or consent to or acquiesce in the appointment of a receiver for all or substantially all of its property, or a petition for the appointment of a receiver shall be filed against the Maker and remain unstayed for at least ninety (90) days. 

 

The Company’s offering was for a minimum of One Hundred (100) and up to a maximum of Six Hundred (600) Notes at Five Thousand ($5,000) Dollars per Note, with a minimum subscription of two (2) Notes (the "Offering"). The minimum aggregate loan to the Company will be Five Hundred Thousand ($500,000) Dollars and the maximum aggregate loan to the Company from this Offering will be Three Million ($3,000,000) Dollars. Notes are convertible at maturity to Common Stock (equity units), based on tiered raise benchmarks.

 

The Offering was made to a limited number of investors pursuant to an exemption available under the Securities Act of 1933 (the "Act"), specifically Rule 506(c) promulgated under Regulation D, and under certain other laws, including the securities law of certain states.

 

The following reflects the proceeds received under their respective tiers and the number of common stock equity units issuable if converted to common shares of the Company.


 

 

Tier 1

Tier 2

Price

$0.20 

$0.40 

Proceeds

$580,000 

$635,000 

 

As of March 31, 2022, the Company owed $1,215,000 in principal and $96,159 in accrued interest on these Notes.  The number of shares of common stock issuable if converted at March 31, 2021 would be 4,487,500.

 

Note 6– Related Party Transactions

 

During the three months ended March 31, 2022, the Company had no related party transactions.

 

Note 7 – Subsequent Events