Securities
Issued and to be Issued
|
2,150,000
shares of our common stock are issued and outstanding as of the
date of
this prospectus. All of the common stock to be sold under this
prospectus
will be sold by existing shareholders. There will be no increase
in our
issued and outstanding shares as a result of this
offering.
|
Use
of Proceeds
|
We
will not receive any proceeds from the sale of the common stock
by the
selling shareholders.
|
Offering
Period
|
The
shares are being offered for a period up to 90 days from the date
this
Prospectus is effective with the Securities and Exchange Commission,
unless extended by us for an additional 90
days.
|
Summary
Financial Information
Balance
Sheet Data
|
From
inception May 8, 2006, to August 31, 2006
(Audited).
|
Cash
|
$
15,000
|
Total
Assets
|
$
19,000
|
Liabilities
|
$
19,985
|
Total
Stockholder’s Deficit
|
$
(985)
|
|
|
Statement
of Loss and Deficit
|
From
inception May 8, 2006, to August 31, 2006
(Audited).
|
Revenue
|
$
0
|
Loss
for the Period
|
$
(43,985)
|
An
investment in our common stock involves a high degree of risk. You should
carefully consider the risks described below and the other information in
this
prospectus before investing in our common stock. If any of the following
risks
occur, our business, operating results and financial condition could be
seriously harmed. Currently, shares of our common stock are not publicly
traded.
In the event that shares of our common stock become publicly traded, the
trading
price of our common stock could decline due to any of these risks, and you
may
lose all or part of your investment.
As
of
August 31, 2006, we had cash in the amount of $15,000. Operating expenses
from
inception to period ended August 31, 2006, totaled $43,985, and we experienced
a
net loss of ($43,985) against no revenue. Our accumulated deficit for the
period
ended August 31, 2006 is ($43,985).
Our
future is dependent upon our ability to obtain financing and upon future
profitable operations by the sale or license of our mixed gasoline formula
to
petrochemical companies.
Our
auditors have issued a going concern opinion and raised substantial doubt
as to
our continuance as a going concern. When an auditor issues a going concern
opinion, the auditor has substantial doubt that the company will continue
to
operate indefinitely and not go out of business and liquidate its assets.
This
is a significant risk to investors who purchase shares of our common stock
because there is an increased risk that we may not be able to generate and/or
raise enough resources to remain operational for an indefinite period of
time.
The auditor’s going concern opinion may inhibit our ability to raise financing
because we may not remain operational for an indefinite period of time resulting
in potential investors failing to receive any return on their investment.
In the
event we are unsuccessful in obtaining additional funds and/or operating
profitably, the business will fail and you will lose your entire
investment.
We
have
just begun the initial stages of developing our mixed gasoline formula. As
a
result, we have no way to evaluate the likelihood that we will be able to
operate the business successfully. We were incorporated on May 8,
2006,
and
to
date have been involved primarily in organizational activities, the development
of our formula and establishing marketing channels in which to sell or license
our formula. We have not earned any revenues as of the date of this prospectus,
and thus face a high risk of business failure.
Unanticipated
problems, expenses and delays are frequently encountered in achieving revenues
in development stage companies. Our ability to generate significant operating
revenues will depend on our ability to, among other things, successfully
develop
our mixed gasoline formula; successfully market, distribute and sell our
formula; and obtain the financing required to implement
our
business plan. Any one or combination of these contingencies occurring subjects
our company to a high risk of business failure.
We
do not
currently have a marketable mixed gasoline formula. In the development of
our
mixed gasoline formula, a quality end-product is important to our success
and
competitive position, and the inability to offer and develop our formula
to end
users could harm our business. If we are unable to anticipate problems in
the
use of our formula, we may not be able to achieve market acceptance and produce
revenues. There are no assurances that our developing formula will be
successful, and in that regard, a formula that does not match consumer needs
could adversely affect our business.
Our
formula must not harm the vehicles and machinery that will use it. Since
we have
never tested our formula in any engine, much less tested the long term effect
of
our formula in a wide array of vehicles and machinery, we can offer no assurance
that our formula will work in the short or long term. Moreover, gasoline
is a
standard commodity, and our ability to successfully compete with existing
gasoline products turns on whether we are able to offer advantages that we
are
seeking to obtain, including better miscibility, proper evaporation nature,
high
antiknock characteristics and anticorrosion nature, high stability and low
cost.
If we are unable to offer these advantages against existing gasoline products,
we will not be able to effectively market our formula and we will go out
of
business.
Potential
investors should be aware of the difficulties normally encountered by emerging
companies developing products to compete with those already recognized in
the
market and the high rate of failure of such enterprises. The likelihood of
success must be considered in light of the problems, expenses, difficulties,
complications and delays encountered in connection with the business activities
that we plan to undertake. These potential problems include, but are not
limited
to, unanticipated problems relating to our research and development, roadblocks
in finding avenues to market our formula, resistance from competing businesses,
and additional costs and expenses that may exceed current estimates, to name
a
few.
Any of
these factors have the potential to complicate, if not permanently ruin our
chance for success.
The
gasoline industry is highly competitive. This industry has a multitude of
competitors, all of which have greater financial resources than us. As a
result,
we may experience difficulty competing with other businesses when attempting
to
market our mixed gasoline formula, and may never achieve profitable operations
because of our small status in this intense market.
Numerous
factors beyond our control may affect the marketability of our formula. These
factors include market fluctuations, the proximity and capacity of natural
resource markets and processing equipment, government regulations, including
regulations relating to prices, taxes, royalties, land tenure, land use,
importing and exporting of oil and environmental protection. These factors
could
inhibit our ability to sell or license our formula
.
The
gasoline industry requires substantial investment in research and development
in
order to develop and bring to market new and enhanced technologies and products.
Although we plan to stay competitive with continued research and development,
there can be no assurances that we will have sufficient resources to maintain
the level of investment in research and development that is required to remain
competitive.
Prior
to
completion of our mixed gasoline formula, we anticipate that we will incur
increased operating expenses without realizing any revenues. We expect to
incur
continuing and significant losses into the foreseeable future. As a result
of
continuing losses, we may exhaust all of our resources and be unable to complete
the development of our formula. Our accumulated deficit will continue to
increase as we continue to incur losses. We may not be able to earn profits
or
continue operations if we are unable to generate significant revenues from
the
sale or licensure of our formula. There is no history upon which to base
any
assumption as to the likelihood that we will be successful, and we may not
be
able to generate any operating revenues or ever achieve profitable operations.
If we are unsuccessful in addressing these risks, our business will most
likely
fail.
The
extent and value of our intellectual property is necessarily uncertain, and
our
efforts to protect our intellectual property rights may not be successful.
Our
formula comes from ingredients commonly used and available to the public.
However, we believe our formula has advantages above that of traditional
gasoline products. We are in the process of researching patent rights, and
we
are not aware of anyone in Philippines having any patents, trademarks and/or
copyright protection for the technologies and any proprietary rights to these
technologies. As such, a third party may copy or otherwise obtain our formula
without authorization. If this occurs, we are uncertain whether we will be
able
to enforce our rights in the Philippines or other countries in Asia where
we
expect to do business. If we are able to engage in litigation to enforce
our
rights to our formula, we expect the process to be inherently expensive and
unpredictable. Any such litigation may be unsuccessful and could require
us to
incur substantial costs and divert significant valuable resources, including
the
efforts of our technical and management personnel, which may harm our
business
materially. Moreover, we may have a judicial forum declare our rights to
the
formula invalid or unenforceable or have claims of such narrow scope as to
be of
little economic value.
Ms.
Susanna Hilario and Mr. Rey V. Supera, our officers and directors, do not
have
any training in the areas of marketing and business management. While these
persons have significant experience in the fuel industry, our management
may not
be fully aware of many of the specific business requirements related to working
within this industry. As a result, our management may lack certain skills
that
are advantageous in managing a company of this nature, which could be very
detrimental to our business.
Ms.
Susanna Hilario and Mr. Rey V. Supera, our officers and directors, devote
20 to
40 hours per week to our business affairs. We do not have an employment
agreement with either Ms. Hilario or Mr. Supera, nor do we maintain key man
life
insurance policies for these individuals. Currently, we do not have any full
or
part-time employees. If the demands of our business require the full business
time of our officers and directors, it is possible that Ms. Hilario and Mr.
Supera may not be able to devote sufficient time to the management of our
business, as and when needed. If our management is unable to devote a sufficient
amount of time to manage our operations, our business will fail.
Ms.
Susanna Hilario and Mr. Rey V. Supera are our officers and directors. They
own
approximately 58% of the outstanding shares of our common stock. Accordingly,
they will have a significant influence in determining the outcome of all
corporate transactions or other matters, including mergers, consolidations
and
the sale of all or substantially all of our assets, and also the power to
prevent or cause a change in control. While we have no current plans with
regard
to any merger, consolidation or sale of substantially all of its assets,
the
interests of these individuals may still differ from the interests of the
other
stockholders.
Ms.
Hilario owns 625,000 shares of our common stock and Mr. Supera owns 625,000
shares of our common stock which equates to 58% of our outstanding common
stock.
There is presently no public market for our common stock and we plan to apply
for quotation of our common stock on the NASD over-the-counter bulletin board
upon the effectiveness of the registration statement of
which
this prospectus forms a part. If our shares are publicly traded on the
over-the-counter bulletin board, these officers and directors will be eligible
to sell their shares publicly subject to the volume limitations in Rule 144.
The
offer or sale of a large number of shares at any price may cause the market
price to fall. Sales of substantial amounts of common stock or the perception
that such transactions could occur, may materially and adversely affect
prevailing markets prices for our common stock.
Currently,
we have not experienced any difficulty with compliance of any laws or
regulations which affect our business. However, there is a risk that new
regulations could increase our costs of doing business, prevent us from
marketing our mixed gasoline formula, and make compliance with new regulations
unduly burdensome.
One
or
more of the ingredients in our mixed gasoline formula may be carcinogenic.
A
carcinogen is a chemical known or believed to cause cancer in humans. The
number
of proven carcinogens is comparatively small, but many more chemicals are
suspected to be carcinogenic. We may face political or consumer resistance
to
our formula if it is suspected to be carcinogenic, which would be detrimental
to
our business.
Because
creating a gasoline formula is highly complex, we may produce a formula that
contains design defects. If errors defects are discovered after we have licensed
the rights to third-parties, we could be materially adversely affected in
one or
more of the following ways:
§
|
replacement
formulas could impose substantial costs on us;
|
§
|
rumors,
false or otherwise, may be circulated by the press and other media,
which
could cause a decrease in demand for our formula; and
|
§
|
customers
or end users may file suits or assert other legal claims against
us
alleging damages caused by defects in our formula. If we do not
successfully defend such suits, we could be required to pay substantial
damages. Even if we prevail in suits filed by customers or end users,
we
may be required to expend significant funds in
defense.
|
We
plan
to conduct our business in the Philippines, and from there to other locations
in
Asia. These countries have been subject to political instability and terrorist
activities. We cannot assure you that we will be successful in overcoming
the
risks that relate to or arise from operating in international markets. Risks
inherent in doing business on an international level include:
§
|
economic
and political instability;
|
§
|
changes
in regulatory requirements, tariffs, customs, duties and other trade
barriers;
|
§
|
power
supply shortages and shutdowns;
|
§
|
difficulties
in staffing and managing foreign operations and other labor
problems;
|
§
|
existence
of language barriers and cultural
distinctions;
|
§
|
acts
of God, including floods, typhoons and earthquakes;
and
|
§
|
other
uncertainties relating to the administration of, or changes in, or
new
interpretation of, the laws, regulations and policies of the jurisdictions
in which we conduct our business.
|
In
addition, our activities outside the United States are subject to risks
associated with fluctuating currency values and exchanges rates, hard currency
shortages and controls on currency exchange.
The
risks
inherent in our international operations have been increased by the threat
of
terrorist attacks. These attacks, coupled with an international military
response, have created an uncertain economic environment, and we cannot predict
the impact of these political threats or any related military action, on
our
customers or our business.
A
market
for our common stock may never develop. We currently plan to apply for quotation
of our common stock on the NASD over-the-counter bulletin board upon the
effectiveness of the registration statement of which this prospectus forms
a
part. However, our shares may never be traded on the bulletin board, or,
if
traded, a public market may not materialize. If our common stock is not traded
on the bulletin board or if a public market for our common stock does not
develop, investors may not be able to re-sell the shares of our common stock
that they have purchased and may lose all of their investment.
The
selling shareholders are offering 900,000 shares of our common stock through
this prospectus. Our common stock is presently not traded on any market or
securities exchange, but should a market develop, shares sold at a price
below
the current market price at which the common stock is trading will cause
that
market price to decline. Moreover, the offer or sale of a large number of
shares
at any price may cause the market price to fall. The outstanding shares of
common stock covered by this prospectus represent approximately 42% of the
common shares outstanding as of the date of this prospectus.
Broker-dealer
practices in connection with transactions in "penny stocks" are regulated
by
penny stock rules adopted by the Securities and Exchange Commission. Penny
stocks generally are equity securities with a price of less than $5.00 (other
than securities registered on some national securities exchanges or quoted
on
Nasdaq). The penny stock rules require a broker-dealer, prior to a transaction
in a penny stock not otherwise exempt from the rules, to deliver a standardized
risk disclosure document that provides information about penny stocks and
the
nature and level of risks in the penny stock market. The broker-dealer also
must
provide the customer with current bid and offer quotations for the penny
stock,
the compensation of the broker-dealer and its salesperson in the transaction,
and, if the broker-dealer is the sole market maker, the broker-dealer must
disclose this fact and the broker-dealer's presumed control over the market,
and
monthly account statements showing the market value of each penny stock held
in
the customer's account. In addition, broker-dealers who sell these securities
to
persons other than established customers and "accredited investors" must
make a
special written determination that the penny stock is a suitable investment
for
the purchaser and receive the purchaser's written agreement to the transaction.
Consequently, these requirements may have the effect of reducing the level
of
trading activity, if any, in the secondary market for a security subject
to the
penny stock rules, and investors in our common stock may find it difficult
to
sell their shares.
In
the
event that our shares are quoted on the over-the-counter bulletin
board,
we
will
be required order to remain current in our filings with the SEC in order
for
shares of our common stock to be eligible for quotation on the
over-the-counter
bulletin board
.
In the
event that we become delinquent in our required filings with the SEC, quotation
of our common stock will be terminated following a 30 or 60 day grace period
if
we do not make our required filing during that time. If our shares are not
eligible for quotation on the
over-the-counter
bulletin board
,
investors in our common stock may find it difficult to sell their shares.
This
prospectus contains forward-looking statements that involve risks and
uncertainties. We use words such as anticipate, believe, plan, expect, future,
intend and similar expressions to identify such forward-looking statements.
The
actual results could differ materially from our forward-looking statements.
Our
actual results are most likely to differ materially from those anticipated
in
these forward-looking statements for many reasons, including the risks faced
by
us described in this Risk Factors section and elsewhere in this
prospectus.
We
will
not receive any proceeds from the sale of the common stock offered through
this
prospectus by the selling shareholders.
The
$0.02
per share offering price of our common stock was arbitrarily chosen using
the
last sales price of our stock from our most recent private offering of common
stock. There is no relationship between this price and our assets, earnings,
book value or any other objective criteria of value.
We
intend
to apply to the NASD over-the-counter bulletin board for the quotation of
our
common stock upon our becoming a reporting entity under the Securities Exchange
Act of 1934. We intend to file a registration statement under the Exchange
Act
concurrently with the effectiveness of the registration statement of which
this
prospectus forms a part. If our common stock becomes so traded and a market
for
the stock develops, the actual price of stock will be determined by prevailing
market prices at the time of sale or by private transactions negotiated by
the
selling shareholders. The offering price would thus be determined by market
factors and the independent decisions of the selling shareholders.
The
common stock to be sold by the selling shareholders is common stock that
is
currently issued and outstanding. Accordingly, there will be no dilution
to our
existing shareholders.
The
selling shareholders named in this prospectus are offering all of the 900,000
shares of common stock offered through this prospectus. All of the shares
were
acquired from us by the selling shareholders in an offering that was exempt
from
registration pursuant to Regulation S of the Securities Act of 1933 and
completed on May 31, 2006.
The
following table provides information regarding the beneficial ownership of
our
common stock held by each of the selling shareholders as of August 31, 2006
including:
1.
the
number of shares owned by each prior to this offering;
2.
the
total number of shares that are to be offered by each;
3.
the
total number of shares that will be owned by each upon completion of the
offering;
4.
the
percentage owned by each upon completion of the offering; and
5.
the
identity of the beneficial holder of any entity that owns the
shares.
The
named
party beneficially owns and has sole voting and investment power over all
shares
or rights to the shares, unless otherwise shown in the table. The numbers
in
this table assume that none of the selling shareholders sells shares of common
stock not being offered in this prospectus
or
purchases additional shares of common stock, and assumes that all shares
offered
are sold. The percentages are based on 2,150,000 shares of common stock
outstanding on August 31, 2006.
Name
of Selling Shareholder
|
Shares
Owned
Prior
to this
Offering
|
Total
Number
of
Shares
to be
Offered
for
Selling
Shareholder
Account
|
Total
Shares
to
be
Owned
Upon
Completion
of
this
Offering
|
Percent
Owned
Upon Completion
of
this
Offering
|
Belen
D. Leyesa
32
Sto Nino Village, Bolbok Batangas City Philippines
|
30,000
|
30,000
|
0
|
0
|
Carlo
L Gutierrez
Aboboto
Street Calapan, Oriental Mindoro Philippines
|
30,000
|
30,000
|
0
|
0
|
Catherine
Dionisio
1578
Mayhaligue Street Sta Cruz Manila Philippines
|
30,000
|
30,000
|
0
|
0
|
Clint
Asehan
Block
12, Lot 6, Katherine Townhomes, Progressive 12, Molino Rd 3, Bacoor
Cavite
Philippines
|
30,000
|
30,000
|
0
|
0
|
Dennis
Gepiga Bermoy
9301
Diamond Extension, Umali Subdivision, Los Baños, Laguna 4030
Philippines
|
30,000
|
30,000
|
0
|
0
|
Divinofiel
Jaras
928
Kundiman Street, Sampaloc, Manila 1008 Philippines
|
30,000
|
30,000
|
0
|
0
|
Dolores
T Ramos
Lot
7B, BLK 7, Emerald Street Montalban Rizal Philippines
|
30,000
|
30,000
|
0
|
0
|
Eloisa
Larman
Tuyo,
Balanga, Bataan Philippines
|
30,000
|
30,000
|
0
|
0
|
Ernesto
Mamalateo
Capitangan,
Abucay Bataan Philippines
|
30,000
|
30,000
|
0
|
0
|
Felipe
Aquino
31
Lincoln St., SFDM, QC Philippines
|
30,000
|
30,000
|
0
|
0
|
German
T. Torres
8567
E Ramos Street, Marikina City Philippines
|
30,000
|
30,000
|
0
|
0
|
Grace
Remolador
47
Lot Blk 78, Golden City Subd, Sta Rosa Laguna Philippines
|
30,000
|
30,000
|
0
|
0
|
Jaime
R Lim
74
ML Quezon St. Tagig City Philippines
|
30,000
|
30,000
|
0
|
0
|
Jessubel
Herrero
115
Valhalla Street Pasay Philippines
|
30,000
|
30,000
|
0
|
0
|
Joan
De Guzman
47
Riverside Bulihan, Malolos Bulacan Philippines
|
30,000
|
30,000
|
0
|
0
|
Jocelyn
Agno
8234
Constancia Street, Makati City Philippines
|
30,000
|
30,000
|
0
|
0
|
Jose
Gabriel Reyes
100
Lalakay Los Banos Laguna 4030 Philippines
|
30,000
|
30,000
|
0
|
0
|
Kriska
Dinglasan
246
Sitio Seekers, Banaba West, Batangas City Philippines
|
30,000
|
30,000
|
0
|
0
|
Leandrito
Asuncion
2565
Alabastro Street, San Andres Bukid Manila Philippines
|
30,000
|
30,000
|
0
|
0
|
Liza
Q. Castillo
2928
E A. Bautista Street, Punta Sta. Ana Manila Philippines
|
30,000
|
30,000
|
0
|
0
|
Lolita
P Alindayu
Blk
78, Lot 47 Phase II, Golden City, Sta. Rosa, Laguna
Philippines
|
30,000
|
30,000
|
0
|
0
|
Nenet
Macatangay
31
Lincoln St., SFDM, QC Philippines
|
30,000
|
30,000
|
0
|
0
|
Racquel
Carreos
2482-D,
Crisolita Street, San Andres Bukid Manila Philippines
|
30,000
|
30,000
|
0
|
0
|
Raul
Edquila
3598
Durango Street Palanan Makati City Philippines
|
30,000
|
30,000
|
0
|
0
|
Wilfredo
T. Ramos
#14
Callejon, Sulucan Street, Malabon Metro Manila Philippines
|
30,000
|
30,000
|
0
|
0
|
Willvenn
Tracy Felipe
2649D
Felix Huertas Street, Sta. Cruz, Manila Philippines
|
30,000
|
30,000
|
0
|
0
|
Zenaida
Meriales
Tambubong,
Tayuman, Binangonan, Rizal Philippines
|
30,000
|
30,000
|
0
|
0
|
Maila
Mariano
2482-D,
Crisolita Street, San Andres Bukid Manila Philippines
|
30,000
|
30,000
|
0
|
0
|
Domiciana
Perez
17-10
th
Ave. Murphy Cubao QC Philippines
|
30,000
|
30,000
|
0
|
0
|
Josephine
M. Visayana
B15
L15 Bacoor Cavite Philippines
|
30,000
|
30,000
|
0
|
0
|
None
of
the selling shareholders;
(1)
|
has
had a material relationship with us other than as a shareholder at
any
time within the past three years or;
|
(2)
|
has
been one of our officers or directors.
|
The
selling shareholders may sell some or all of their common stock in one or
more
transactions, including block transactions:
1.
|
on
such public markets or exchanges as the common stock may from time
to time
be trading;
|
2.
|
in
privately negotiated transactions;
|
3.
|
through
the writing of options on the common
stock;
|
5.
|
in
any combination of these methods of
distribution.
|
The
sales
price to the public is fixed at $0.02 per share until such time as the shares
of
our common stock become traded on the NASD Over-The-Counter Bulletin Board
or
another exchange. Although we intend to apply for quotation of our common
stock
on the NASD Over-The-Counter Bulletin Board, public trading of our common
stock
may never materialize. If our common stock becomes traded on the NASD
Over-The-Counter Bulletin Board, or another exchange, then the sales price
to
the public will vary according to the selling decisions of each selling
shareholder and the market for our stock at the time of resale. In these
circumstances, the sales price to the public may be:
1.
|
the
market price of our common stock prevailing at the time of
sale;
|
2.
|
a
price related to such prevailing market price of our common stock,
or;
|
3.
|
such
other price as the selling shareholders determine from time to
time.
|
The
shares may also be sold in compliance with the Securities and Exchange
Commission’s Rule 144.
The
selling shareholders may also sell their shares directly to market makers
acting
as agents in unsolicited brokerage transactions. Any broker or dealer
participating in such transactions as an agent may receive a commission from
the
selling shareholders or from such purchaser if they act as agent for the
purchaser. If applicable, the selling shareholders may distribute shares
to one
or more of their partners who are unaffiliated with us. Such partners may,
in
turn, distribute such shares as described above.
We
are
bearing all costs relating to the registration of the common stock. The selling
shareholders, however, will pay any commissions or other fees payable to
brokers
or dealers in connection with any sale of the common stock.
The
selling shareholders must comply with the requirements of the Securities
Act of
1933 and the Securities Exchange Act in the offer and sale of the common
stock.
In particular, during such times as the selling shareholders may be deemed
to be
engaged in a distribution of the common stock, and therefore be considered
to be
an underwriter, they must comply with applicable law and may, among other
things:
1.
|
not
engage in any stabilization activities in connection with our common
stock;
|
2.
|
furnish
each broker or dealer through which common stock may be offered,
such
copies of this prospectus, as amended from time to time, as may be
required by such broker or dealer; and;
|
3.
|
not
bid for or purchase any of our securities or attempt to induce any
person
to purchase any of our securities other than as permitted under the
Securities Exchange Act.
|
We
are
not currently a party to any legal proceedings.
Our
agent
for service of process in Nevada is Business First Formations, Inc., 3702
S.
Virginia Street, #G12-401, Reno, Nevada 89509.
Our
executive officers and directors and their respective ages as of August 31,
2006
are as follows:
Name
|
Position
Held with the Company
|
Age
|
Date
First Elected or Appointed
|
Ms.
Susanna Hilario
|
President,
Director, Treasurer (Principal Accounting Officer) and
Secretary
|
34
|
May
8, 2006
|
Mr.
Rey V. Supera
|
Director
and Chief Technology Officer
|
29
|
May
8, 2006
|
Set
forth
below is a brief description of the background and business experience of
executive officers and directors.
Ms.
Susanna Hilario
is our
President, Director, Treasurer (Principal Accounting Officer), Secretary
and a
member of our board of directors. Since January 2001, Ms. Susanna Hilario
has
been the Operations Manager/Owner of
CCW,
Inc.
Ms. Hilario has not held any directorships in any public companies prior
to
service with our company.
Mr.
Rey V. Supera
is
our
Chief Technology Officer and a member of our board of directors. Mr. Rey
V.
Supera was a technician/researcher in Kali Chemical Inc. from 1996 to 2005.
Mr.
Supera has not held directorships in public companies prior to service with
our
company.
Term
of Office
Our
Directors are appointed for a one-year term to hold office until the next
annual
general meeting of our shareholders or until removed from office in accordance
with our bylaws. Our officers are appointed by our board of directors and
hold
office until removed by the board.
Significant
Employees
We
do not
currently have any significant employees aside from our directors and officers.
Family
Relationships
There
are
no family relationships between or among the directors, executive officers
or
persons nominated or chosen by us to become directors or executive
officers.
Involvement
in Certain Legal Proceedings
To
the
best of our knowledge, during the past five years, none of the following
occurred with respect to our present or former director, executive officer,
or
employee: (1) 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; (2) any conviction in
a
criminal proceeding or being subject to a pending criminal proceeding (excluding
traffic violations and other minor offenses); (3) 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; and (4) being found by a court of competent
jurisdiction (in a civil action), the SEC or the Commodities Futures Trading
Commission to have violated a federal or state securities or commodities
law,
and the judgment has not been reversed, suspended or vacated.
The
following table sets forth, as of August 31, 2006, certain information as
to
shares of our common stock owned by (i) each person known by us to beneficially
own more than 5% of our outstanding common stock, (ii) each of our directors,
and (iii) all of our executive officers and directors as a group:
Title
of class
|
Name
and address of beneficial owner
|
Amount
of beneficial ownership
|
Percent
of class
|
Common
|
Ms.
Susanna Hilario
7636
Guijo cor Sacred Heart Street, San Antonio Village, Makati City,
Philippines
|
625,000
|
29%
|
Common
|
Mr.
Rey V. Supera
3596
Durango Street, Palanan, Makati City, Philippines
|
625,000
|
29%
|
Total
of all directors and executive officers
|
1,250,000
|
58%
|
(1)
|
The
persons named above have full voting and investment power with respect
to
the shares indicated. Under the rules of the Securities and Exchange
Commission, a person (or group of persons) is deemed to be a "beneficial
owner" of a security if he or she, directly or indirectly, has or
shares
the power to vote or to direct the voting of such security, or the
power
to dispose of or to direct the disposition of such security. Accordingly,
more than one person may be deemed to be a beneficial owner of the
same
security. A person is also deemed to be a beneficial owner of any
security, which that person has the right to acquire within 60 days,
such
as options or warrants to purchase our common
stock.
|
(2)
|
The
percent of class is based on 2,150,000 shares of common stock issued
and
outstanding as of August 31, 2006.
|
Our
authorized capital stock consists of 75,000,000 shares of common stock, with
a
par value of $0.001 per share. As of August 31, 2006, there were 2,150,000
shares of our common stock issued and outstanding. Our shares are held by
thirty-two (32) stockholders of record.
Common
Stock
Our
common stock is entitled to one vote per share on all matters submitted to
a
vote of the stockholders, including the election of directors. Except as
otherwise required by law or provided in any resolution adopted by our board
of
directors with respect to any series of preferred stock, the holders of our
common stock will possess all voting power. Generally, all matters to be
voted
on by stockholders must be approved by a majority (or, in the case of election
of directors, by a plurality) of the votes entitled to be cast by all shares
of
our common stock that are present in person or
represented
by proxy, subject to any voting rights granted to holders of any preferred
stock. Holders of our common stock representing fifty percent (50%) of our
capital stock issued, outstanding and entitled to vote, represented in person
or
by proxy, are necessary to constitute a quorum at any meeting of our
stockholders. A vote by the holders of a majority of our outstanding shares
is
required to effectuate certain fundamental corporate changes such as
liquidation, merger or an amendment to our Articles of Incorporation. Our
Articles of Incorporation do not provide for cumulative voting in the election
of directors.
Holders
of our common stock have no pre-emptive rights, no conversion rights and
there
are no redemption provisions applicable to our common stock.
Dividend
Policy
Each
stockholder is entitled to receive the dividends as may be declared by our
board
of directors out of funds legally available for dividends and, in the event
of
liquidation, to share pro rata in any distribution of our assets after payment
of liabilities. Our board of directors is not obligated to declare a dividend.
We have never declared or paid any cash dividends on our common stock. We
currently intend to retain future earnings, if any, to finance the expansion
of
our business. As a result, we do not anticipate paying any cash dividends
in the
foreseeable future.
Share
Purchase Warrants
We
have
not issued and do not have outstanding any warrants to purchase shares of
our
common stock.
Options
We
have
not issued and do not have outstanding any options to purchase shares of
our
common stock.
Convertible
Securities
We
have
not issued and do not have outstanding any securities convertible into shares
of
our common stock or any rights convertible or exchangeable into shares of
our
common stock.
Nevada
Anti-Takeover Laws
Nevada
Revised Statutes sections 78.378 to 78.379 provide state regulation over
the
acquisition of a controlling interest in certain Nevada corporations unless
the
articles of incorporation or bylaws of the corporation provide that the
provisions of these sections do not apply. Our articles of incorporation
and
bylaws do not state that these provisions do not apply. The statute creates
a
number of restrictions on the ability of a person or entity to acquire control
of a Nevada company by setting down certain rules of conduct and voting
restrictions in any acquisition attempt, among other things. The statute
is
limited to corporations that are organized in the state of Nevada and that
have
200 or more stockholders, at least 100 of whom are stockholders of record
and
residents of the
State
of
Nevada; and does business in the State of Nevada directly or through an
affiliated corporation. Because of these conditions, the statute currently
does
not apply to our company.
No
expert
or counsel named in this prospectus as having prepared or certified any part
of
this prospectus or having given an opinion upon the validity of the securities
being registered or upon other legal matters in connection with the registration
or offering of the common stock was employed on a contingency basis, or had,
or
is to receive, in connection with the offering, a substantial interest, direct
or indirect, in the registrant or any of its parents or subsidiaries. Nor
was
any such person connected with the registrant or any of its parents or
subsidiaries as a promoter, managing or principal underwriter, voting trustee,
director, officer, or employee.
The
Corporate Law Center, attorney Ronald Serota, Esq., our independent legal
counsel, has provided an opinion on the validity of our common stock, and
Ronald
N. Silberstein CPA PLLC, independent certified public accountants, has audited
our financial statements included in this Prospectus and registration statement
to the extent and for the periods set forth in their audit report. Ronald
N.
Silberstein CPA PLLC has presented their report with respect to our audited
financial statements. The report of Ronald N. Silberstein CPA PLLC is included
in reliance upon their authority as experts in accounting and
auditing.
Our
articles of incorporation provide that we will indemnify an officer, director,
or former officer or director, to the full extent permitted by law. We have
been
advised that in the opinion of the Securities and Exchange Commission
indemnification for liabilities arising under the Securities Act of 1933
is
against public policy as expressed in the Securities Act of 1933, and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities is asserted by one of our directors, officers, or controlling
persons in connection with the securities being registered, we will, unless
in
the opinion of our legal counsel the matter has been settled by controlling
precedent, submit the question of whether such indemnification is against
public
policy to a court of appropriate jurisdiction. We will then be governed by
the
court’s decision.
We
were
incorporated on May 8, 2006, under the laws of the state of Nevada. Ms. Susanna
Hilario and Mr. Rey V. Supera, our officers and directors, have been promoters
of our company since its inception.
Overview
We
were
formed as a Nevada corporation on May 8, 2006. Our principal executive offices
are located at 3598 Durango St. Palanan, Makati City 1235, Philippines. Our
telephone number is
(632)
728
1626
.
We
are in
the business of developing a technology for ethanol-methanol gasoline which
is
prepared from light oil, naphtha, straight-run gasoline and key additives.
Our
mixed gasoline formula is not yet completed and will require further research
and development before it is ready for commercial use. Once developed, we
intend
to license our formula initially in the Philippines, and if demand warrants,
into China and other countries in Asia.
We
believe our mixed gasoline formula will offer a number of advantages over
existing gasoline products. Our formula should provide better miscibility
than
traditional gasoline. Miscibility refers to the property of various substances,
liquids in particular, to be mixed together and form a homogenous material.
The
better the miscibility available in gasoline, the cleaner it will burn,
resulting in better overall engine performance and cleaner pistons, rings,
plugs
and exhaust ports. In addition, we believe our formula will have a lower
evaporation rate. A main ingredient in gasoline is ethanol, which evaporates
easily. An excessive amount of unburned evaporated fuel tends to result in
higher quantities of smog in the atmosphere. Our formula is designed to prevent
an excessive amount of evaporation.
We
also
believe our product will prevent premature detonation (or “knocking”) in the
engine. Lead was previously used as an effective anti-knocking agent by
increasing the fuel’s octane rating. Our formula uses anti-knocking additives
that similarly increase the octane rating for greater efficiency and power.
Our
formula is expected to have higher stability. When gasoline is stagnant for
a
certain period of time, gums and varnishes tend to build up and precipitate
in
the gasoline, causing what is known as“stale fuel.” This results in build up in
the cylinders and fuel lines, complicating engine start-up. A stabilizer,
which
will be used in our formula, is expected to help prevent build up and extend
the
life of the engine.
Finally,
we believe our mixed gasoline formula will cost less to consumers than
traditional gasoline. According to a CNNMoney.com article in early 2005,
consumers in some parts of the world are paying around $6.50 USD per gallon
of
gasoline. As we close in on 2007, the price of gasoline continues to sour.
We
believe that our mixed gasoline formula will help alleviate the burden on
the
consuming public. We plan to license our formula initially in the Philippines,
and
then
branch off to other nations if demand grows. The regular gas price at the
pump
in the Philippines is about $3 per gallon similar to that in United States,
only
the GDP per capita in the Philippines is only 3% of that in the United States,
so an increase in gas prices has a more drastic impact in the Philippines
than
in the United States. President Macapagal-Arroyo warned that rising oil prices
threatens the country’s foreign exchange reserves as well as its energy supply.
According to one source, for every $10 increase in world crude oil prices,
the
Philippines government has to spend an extra $1.26 billion of its foreign
exchange reserves (
http://news.inq7.net/nation/index.php
?index=1&story_id=48078).
With these repercussions in place, we are hopeful that our low-cost mixed
gasoline formula will have a positive impact in the Filipino
market.
We
are a
development stage company and have not generated any sales to date. We are
in
the initial stages of developing our formula, have very limited cash resources
and are in need of substantial additional capital to execute our business
plan.
For these and other reasons, our independent auditors have raised substantial
doubt about our ability to continue as a going concern.
Our
principal executive offices are located at 3598 Durango St. Palanan, Makati
City
1235, Philippines. Our telephone number is
(632)
728
1626
.
Demand
for Crude Oil
As
explained in the
International
Energy Outlook 2006 (IEO2006)
,
world
oil demand is expected to grow from 80 million barrels per day in 2003 to
98
million barrels per day in 2015 and 118 million barrels per day in 2030.
Demand
increases strongly despite world oil prices that are 35 percent higher in
2025
than projected in last year’s outlook
(http://www.eia.doe.gov/oiaf/ieo/world.html). Much of the growth in oil
consumption is projected for the nations of non-OECD Asia, where strong economic
growth is expected. Non-OECD Asia (including China and India) accounts for
43
percent of the total increase in world oil use over the projected period.
While
the country of the Philippines was not specifically mentioned in the IEO2006
projections, we believe that it falls within Non-OECD Asia and will experience
much growth in oil consumption as well.
To
meet
the projected increase in world oil demand in the IEO2006 reference case,
total
petroleum supply in 2030 will need to increase by 38 million barrels per
day, to
118 million barrels per day, from the 2003 level of 80 million barrels per
day.
OPEC producers are expected to provide 14.6 million barrels per day of the
increase. Higher oil prices will cause a substantial increase in non-OPEC
oil
production—23.7 million barrels per day, which represents 62 percent of the
increase in total world oil supplies over the projection period. The estimates
of production increases are based on current proved reserves and a
country-by-country assessment of ultimately recoverable petroleum.
Much
of
the world’s incremental oil demand is projected for use in the transportation
sector, where there are few competitive alternatives to petroleum; however,
several of the technologies associated with unconventional liquids
(gas-to-liquids, coal-to-liquids, and ethanol and biodiesel produced from
energy
crops) are expected to meet a growing share of demand for petroleum liquids
during the projection period. Of the projected increase in oil use in the
reference case over the 2003 to 2030 period, one-half occurs in the
transportation sector. The industrial sector accounts for a 39-
percent
share of the projected increase in world oil consumption, mostly for chemical
and petrochemical processes.
With
the
projected growth in oil for both the transportation and industrial sectors,
we
believe that our mixed gasoline formula will be met with strong demand in
Non-OECD Asia countries such as the Philippines.
How
Gasoline is Made
Gasoline
is a mixture of hydrocarbons blended with a few additives to meet the
performance needs of automobile engines. The major raw material for gasoline
is
crude oil, which contains numerous compounds ranging from methane to those
having 85 carbon atoms. Gasoline can be produced by “distilling” crude oil or by
maintaining the oil at high temperatures until the different oil components,
or
“fractions” as they are called, reach boiling point and vaporize. Some of the
major crude oil fractions obtained upon initial distillation are “light ends,”
such as propane and butane; “straight run” gasoline, the higher boiling part of
which is sometimes called naphtha; kerosene; diesel fuel; heating oil; and
lubricating oils.
Several
refinery processes have developed to produce the blending factions used to
make
gasoline. Simple distillation converts approximately 10 percent of a barrel
of
crude oil to gasoline. A process known as “cracking,” a breaking down of heavy
oil fractions under high temperatures and pressures, produces about 25 percent
of a barrel of crude oil to gasoline. In catalytic cracking, a process where
oil
is fed into a reaction vessel containing a catalyst, even higher percentages
of
gasoline are produced from crude oil. In “reforming,” the gasoline fraction is
mixed with hydrogen and heated with a catalyst, causing a rearrangement of
its
molecular structure.
Gasoline
in is usually blended from straight run gasoline, reformate, alkylate, and
some
butane. A number of additives are blended into gasoline. Some are used to
reduce
oxidation and tarnish formation. Alcohols are used to reduce icing and corrosion
processes from occurring. Finally, detergents are used to remove deposits
resulting from combustion from the engine and fuel injectors.
Important
Measures for Gasoline
Two
important measures for gasoline are the Reid vapor pressure (RVP) and the
octane
number. Gasoline has to be volatile enough to vaporize and mix with air to
burn,
but one problem is that the vapor pressure can go up or down with a change in
temperature or with altitude. Summer months require a lower RVP so that gasoline
does not evaporate before it combusts in a gasoline engine. Winter months
require a higher RVP so that gasoline does not vapor lock before combusts.
One
way to control vapor pressure is by adding more or less butane.
The
octane number of gasoline tells you how much the fuel can be compressed before
it spontaneously ignites. Lower octane fuels can handle less compression
before
igniting. Octanes are therefore an important component of gasoline because
they
help provide smoother combustion in the car’s cylinders and prevent knocking.
Knocking-- the pinging noise sometimes heard from an
engine--is
caused by irregular pressure waves inside a cylinder that arise from nonuniform
combustion. Unchecked, knocking can crack the cylinder heads or pistons and
destroy an engine.
Our
Mixed Gasoline Formula
Our
core
technology is a formula of ethanol-methanol gasoline which is prepared from
light oil, naphtha, straight-run gasoline and key additives. As opposed to
traditional gasoline, its advantages are better miscibility, proper evaporation
nature, high antiknock characteristics and anticorrosion nature, high stability
and lower cost to consumers.
Our
mixed
gasoline formula consists mainly of the following ingredients:
§
|
Light
oil, naphtha, straight-run gasoline:
70-80%
|
§
|
Carbon
nine solvent naphtha: 3-8%
|
§
|
Methylnaphthalene:
0.2-1%
|
§
|
Dispersing
agent: 0.3-0.8%
|
§
|
Lauryl
benzene sulfonic acid: 0.02-0.03%
|
§
|
Anti-knocking
compound: 0.03-0.06%
|
§
|
C5
Petroleum Resins: 2-8%
|
Straight-Run-Gasoline
Gasoline
produced by the direct distillation of crude oil is known as straight-run
gasoline. It is usually distilled continuously, which separates the gasoline
from the other fractions of the oil having higher boiling points, such as
kerosene and heating oil. The range of temperatures in which gasoline boils
and
is distilled off is roughly between 38° and 205° C (100° and 400° F). The yield
of gasoline from this process varies from about 1 percent to about 50 percent,
depending on the crude oil and the process used.
Naphtha
Naphtha
is a group of various volatile flammable liquid hydrocarbon mixtures used
primarily as either feedstock for petrochemical cracking or gasoline reforming
and blending. Naptha is a highly volatile product, manufactured from crude
oil
by distillation and by catalytic cracking of heavy residues. Naphtha is obtained
from petroleum refineries as a small percentage (around 4%) of the distillation
of crude oil. It is an intermediate between the lighter gasoline and the
heavier
fractions.
Methyl
alcohol is commonly called Methanol or wood alcohol. Methanol is used in
the
production of a variety of chemical derivatives and in the production of
methyl
tertiary butyl ether (MTBE), an oxygenate and an octane enhancer for gasoline.
In the United States, MTBE has been substantially removed from gasoline for
environmental reasons. MTBE is currently more economic than many other
components of gasoline and this has caused strong demand for MTBE, outside
of
the United States. To date, the net loss of methanol demand as a result of
the
changes occurring to gasoline formulations in the United States has had a
relatively minor impact on the global methanol market.
Ethanol
Ethanol
is a chemical produced by the fermentation of sugars found in grains and
other
biomass. Ethanol can be produced from a number of different types of grains,
such as wheat and sorghum, as well as from agricultural waste products such
as
sugar, rice hulls, cheese whey, potato waste, brewery and beverage wastes
and
forestry and paper wastes.
Ethanol
has many industrial uses. Pertinent to our business, ethanol can be used
as a
fuel component that serves as an octane enhancer in fuels, an oxygenated
fuel
additive that can reduce carbon monoxide vehicle emissions, and a
non-petroleum-based gasoline extender.
C9
Solvent Naphtha
This
ingredient consists mainly of aromatic hydrocarbons, including benzene and
the
alkyl derivatives of benzene. Hydrocarbons are molecules consisting of atoms
of
carbon and hydrogen. Benzene has the elemental composition C
6
H
6
and is a
flat, six-membered ring with three carbon-carbon double bonds. Aromatic
hydrocarbons are important components of petroleum and its refined products.
The
name “aromatic” for these hydrocarbons comes from the fact that many have a
strong, pungent aroma. Among the most important aromatic petroleum hydrocarbons
in our formula are benzene and its derivatives (alkylbenzenes) toluene
(methylbenzene) and xylenes (dimethylbenzenes).
C5
Petroleum Resins
Petroleum
resin is a kind of thermal plasticizing resin produced in the refining process.
Petroleum resins are mainly used for adhesives, marking paints, synthetic
rubbers, but are also used in gasoline blending process.
Isobutyl
Alcohol
Isobutyl
Alcohol, as know as Isobutanol, is a colorless, flamable, organic compound.
It
is classified as an alcohol and as such it is widely used as a solvent in
chemical reactions, as well as being a useful starting material for organic
synthesis.
Isobutanol
is produced naturally during the fermentation of carbohydrates. It may also
be a
by-product of the decay process of organic matter. The main use of Isobutanol
is
as starting material
in
the
manufacture of isobutyl acetate, which is mostly used in the production of
lacquer and similar coatings. For our purposes, it is used as a gasoline
additive for spark-ignition engines where it helps to prevent carburettor
icing.
Dimethyl
Ether
Dimethyl
ether is colorless gaseous ether with an ethereal odor and is used as an
aerosol
spray propellant. Dimethyl ether is also a clean-burning alternative to
liquified petroleum gas, liquified natural gas, diesel and gasoline. It can
be
made from natural gas, coal, or biomass.
Nitrobenzene
Nitrobenzene
is an industrial chemical. It is an oily yellow liquid with an almond-like
odor.
It dissolves only slightly in water and will evaporate to air. Nitrobenzene
is
used to produce lubricating oils such as those used in motors and machinery.
A
small amount of nitrobenzene is used in the manufacture of dyes, drugs,
pesticides, and synthetic rubber.
Methylnaphthalene
Methylnaphthalene
(C
11
H
10
or
CH
3
C
10
H
7
)
is a
colorless liquid oil. It does not dissolve in water, but it will dissolve
in
ethanol, ethyl ether, and most organic solvents. It is used for organic
synthesis.
Research
and Development
Our
Chief
Technology Officer and one of our directors, Mr. Rey Supera, has conducted
numerous experiments of this mixed gasoline formula. Mr.Rey Supera has been
a
long time researcher in the petrochemical industry, in particular, the use
of
additives in gasoline products. At this time, he has concluded that our formula
will work with acceptable experiment results. However, we are continually
refining our formula to reduce emissions and prevent engine damage. We plan
to
continue conducting experiments on our formula to achieve a product that
will
rival traditional gasoline products. Our current experimental results, explained
in the table below, include emission and damage testing of our formula compared
with traditional gasoline.
Serial
|
Examination
project
|
Unit
|
Regular
Gas Specification
|
Target
Examination
result
|
1
|
Octane
value
|
/
|
>=90
|
90
|
2
|
Temperature
of Evaporation
|
10%
Evaporation
|
C
|
<=7
|
68
|
20%
Evaporation
|
C
|
<=120
|
95
|
50%
Evaporation
|
C
|
<=190
|
185
|
Stop
point
|
C
|
<=205
|
200
|
Left
content
|
%
|
<=2
|
2.1
|
3
|
Steam
Barometric Pressure
|
March
16 - September 15
|
KPa
|
<=74
|
72
|
September
16 -March 15
|
KPa
|
<=88
|
86
|
4
|
Sol
|
Mg/100ml
|
<=5
|
5
|
5
|
Sheet
copper corrosion (50C, 3h)
|
/
|
<=1
|
1
|
6
|
Water-soluble
acid and alkali
|
/
|
No
|
No
|
7
|
Mechanical
impurity
|
/
|
No
|
No
|
8
|
Water
content
|
m/m
|
<=0.15
|
0.16
|
Our
target examination results in the next 12 months consist of the
following:
Serial
|
Examination
project
|
Unit
|
Regular
Gas Specification
|
Target
Examination
result
|
1
|
Octane
value
|
/
|
>=90
|
91
|
2
|
Temperature
of Evaporation
|
10%
Evaporation
|
C
|
<=70
|
56
|
20%
Evaporation
|
C
|
<=120
|
90
|
50%
Evaporation
|
C
|
<=190
|
165
|
Stop
point
|
C
|
<=205
|
190
|
Left
content
|
%
|
<=2
|
1
|
3
|
Steam
Barometric Pressure
|
March
16 - September 15
|
KPa
|
<=74
|
65
|
September
16 -March 15
|
KPa
|
<=88
|
78
|
4
|
Sol
|
Mg/100ml
|
<=5
|
4
|
5
|
Sheet
copper corrosion (50C, 3h)
|
/
|
<=
|
1
|
6
|
Water-soluble
acid and alkali
|
/
|
No
|
No
|
7
|
Mechanical
impurity
|
/
|
No
|
No
|
8
|
Water
content
|
m/m
|
<=0.15
|
0.13
|
As
at
August 31, 2006 we have not spent any money on research and development.
Much of
the work in this area has been provided by Mr. Rey Supera free of charge.
Our
projected research and development expenses will be around $18,000.00-$28,000.00
in the next 12 months. Currently, we have two employees dedicated to research
and development. We believe that new and timely development of products and
technologies are important to our competitive position in the market and
intend
to continue to invest in research and development activities.
Present
stage of development
Our
Chief
Technology Officer and one of our directors, Mr. Rey Supera, has conducted
numerous experiments of our gasoline formula. However, we have not yet completed
the development of formula. Our examination results are still not good enough.
Our target results are listed in the table above. We expect to complete
experimentation and become commercially available in late 2007.
To
remain
competitive in the mixed gasoline industry, we must continue to develop highly
effective and efficient key components. Our current technologies are based
on
the initial research activities conducted by Rey Supera. The costs associated
with our research and development activities are not borne by customers since
we
will not have any customers, if we do at all, until the completion of the
marketing and development of our mixed gasoline technology. We will either
raise
more funds from investors or borrow from existing directors to cover our
projected research and development expenses.
Key
Success Factors
Strategy
Our
goal
is for our mixed gasoline formula to become a leading formula in the market.
In
order to achieve our goal, we intend to increase awareness of our products
with
potential customers, such as major gasoline suppliers. We intend to do this
by
engaging in the following:
à
|
Attending
Oil Gas Technology Trade Meetings, Promotional Events and Conferences:
We
plan to attend a number of events attended by biotech institutions
in
order to further expose our products. These events will include biotech
trade meetings and promotional events which are attended by oil gas
companies and related seminars and conferences.
|
à
|
Promoting
through Internet-Based and Traditional Media Advertising: We intend
to use
Internet-based and traditional media to promote our technology and
products directly to petro chemical companies. We believe that by
increasing our consumer base we will attract petro chemical companies
to
use our mixed gasoline formula.
|
Our
anticipated costs to implement the strategy for the next 12 months are estimated
as follows:
à
|
research
and development - $18,000.00-$28,000.00
|
We
intend
to obtain funds to cover these costs by private equity fundraising or
shareholder's loans, although we are not able to guarantee that funds will
be
available or on terms that are favorable to our company. We anticipate that
the
Company will start to receive revenues by sale or license of mixed gasoline
formula to petro chemical companies before the end of December
2007.
Skilled
Management Team
We
intend
to expand our current management to retain skilled directors, officers and
employees with experience relevant to our business focus. Our current management
team is highly skilled in technical areas such as researching and developing
our
technologies, but not as skilled in areas such as marketing and business
management. Obtaining the assistance of individuals with in-depth knowledge
of
operations, technology and markets will allow us to build market share more
effectively.
Competition
We
are
not aware of any competitors in Philippines that are developing a competing
mixed gasoline formula. However, we face a significant amount of competition
in
the gasoline industry in general.
Patents
and Intellectual Property
Our
formula comes from ingredients commonly used and available to the public.
However, we believe our formula has advantages above that of traditional
gasoline products. We are in the process of researching patent rights, and
we
are not aware of anyone in Philippines having any patents, trademarks and/or
copyright protection for the technologies and any proprietary rights to these
technologies. We believe that the formula developed by us should be protected.
In order to protect our products we plan to apply for patent protection and/or
copyright protection in the United States, Philippines and other jurisdictions,
and will require purchasers of our products to enter into non-disclosure
agreements with us.
Marketing
Plan
Our
directors have developed business contacts through their past and current
employment in the petro chemical industry in the Philippines and have developed
an intimate understanding of business practices and customs in this area.
They
intend on actively promoting interest in mixed gasoline among their business
contacts in the petro chemical industry. In addition, we intend to promote
our
mixed gasoline formula through traditional advertising and promotional media,
such as newspaper and trade publications, and advanced media, such as targeted
electronic mail, internet banner advertising and internet webpage links,
to
effect maximum exposure and penetration in the petro chemical marketplace.
We
also anticipate joining some petro chemical conferences to introduce our
mixed
gasoline and services to petro chemical companies.
Brand
Equity
We
have
selected the name of our company to establish our brand name. Atheron will
be
the name of our mixed gasoline formula.
Advertising
We
intend
to develop our website as the primary medium to promote our mixed gasoline
formula. We also intend to market our mixed gasoline formula by placing banner
advertising on the home pages of relevant petro chemical websites.
We
intend
to produce promotional material for direct marketing. However, if we are
unable
to complete the development of our mixed gasoline formula, or if we are unable
to sell our formula sufficiently, for any reason, we may go out of
business.
Legal
We
have
not obtained any copyrights, patents or trademarks in respect of our mixed
gasoline formula, which is currently undergoing research and development.
We
intend to obtain all necessary copyrights, patents or trademarks, as applicable,
in the United States and Philippines, when we are in a financial position
to do
so. We have not entered into any licensing, franchise, concession or royalty
agreements in respect of our proposed mixed gasoline formula. At present,
we
have non-disclosure agreements with our employees to protect our
technology.
Employees
Our
President Mrs. Sussanna Hilario, and our Vice President Dr. Rey Supera, are
the
only employees of the company. They handle all of the responsibilities in
the
area of corporate administration, business development and research.
Government
Regulation and Supervision
We
are
subject to the laws and regulations of those jurisdictions in which we plan
to
sell or license our gasoline formula technology that are generally applicable
to
operate a business, such as business license requirements, income taxes and
payroll taxes. In general, the sale or licensing of our mixed gasoline formula
in Philippines is subject to limited regulatory and/or supervisory requirements.
The Philippine National Alcohol Commission under the Ministry of Trade and
Industry is responsible for programs designed to use less hazardous octane
enhancers, including ethanol versus tetraethyl lead (TEL) in
gasoline.
Since
we
have only recently begun development of our gasoline formula and have not
generated any revenue, our independent auditors have issued an opinion about
our
ability to continue as a going concern in connection with our audited financial
statements for the period from our inception on May 8, 2006 to August 31,
2006.
This means that our auditors believe there is doubt that we can continue
as an
on-going business for the next twelve months unless we obtain additional
capital
to pay our bills. This is because we have generated no revenues and no revenues
are anticipated unless and until we complete the development and marketing
of
our proposed gasoline formula. Accordingly, we must raise cash from sources
other than the sale of our formula. Our only other source for cash at this
time
is equity investments by others in our company. Our accumulated deficit is
$43,985 as of August 31, 2006. The discussion below provides an overview
of our
operations, discusses our results of operations, our plan of operations and
our
liquidity and capital resources.
The
following discussion should be read in conjunction with our financial statements
and the related notes that appear elsewhere in this prospectus. The following
discussion contains forward-looking statements that reflect our plans, estimates
and beliefs. Our actual results could differ materially from those discussed
in
the forward-looking statements. Factors that could cause or contribute to
such
differences include, but are not limited to those discussed below and elsewhere
in this prospectus, particularly in the section entitled "Risk
Factors".
Our
primary objective in the next twelve months will be to complete development
of
our mixed gasoline formula, establish our marketing plan, and license our
formula in the Philippines. If successful, we plan to license our formula
in
China and other countries in Asia.
Since
our
incorporation on May 8, 2006, we have taken active steps to implement our
business plan. Our Chief Technology Officer and one of our directors, Rey
Supera, has completed several experiments of our proposed gasoline formula.
Much
of the work in this area has been provided by Mr. Rey Supera free of charge.
At
this time, he has concluded that our formula will work with acceptable
experiment results. However, we are continually refining our formula to reduce
emissions and prevent engine damage. We plan to continue conducting experiments
on our formula to achieve a product that will rival traditional gasoline
products. Our projected research and development expenses will be around
$18,000.00-$28,000.00 in the next 12 month. Currently, we have two employees
dedicated to research and development. We believe that new and timely
development of products and technologies are important to our competitive
position in the market and intend to continue to invest in research and
development activities.
We
plan
to establish customer and partner relationships in the Philippines once our
proposed gasoline formula is fully developed. We expect that the international
market for our proposed gasoline formula will grow, and we intend to expand
our
presence in strategic international markets in response. To address a potential
global opportunity, we may hire sales, service and support personnel locally
to
establish new relationships with petrochemical companies abroad. However,
we do
not expect to hire any employees in the next twelve months.
The
following sets out the timeline of our proposed operations:
§
|
Develop
the first sample of our proposed gasoline formula by late 2006 to
early
2007. This will allow users to see the results of the gasoline formula
technology and determine its effectiveness.
|
§
|
Develop
the complete and commercial version of our proposed gasoline formula
by
mid to late 2007. This will be the completed version of gasoline
formula,
which will be marketed to potential customers in Phillipines. Commence
an
advertising campaign for our proposed gasoline formula following
its
development.
|
§
|
Commence
development of prospects for higher standard gasoline formula by
early
2008.
|
Furthermore,
in our management’s opinion, we can expect to incur the following expenses to
fund our plan of operation for the next twelve months:
§
|
Audit
fee, which consists primarily of accounting and auditing fees for
the
yearend audit. We estimate that our audit fees for the next twelve
months
will be approximately $10,000, which includes
quarterly
reviews;
|
§
|
Bank
charges, which consist primarily of charges by our bank for processing
transactions through our checking account. We estimate that our bank
charges for the next twelve months will be approximately $100;
|
§
|
Legal
and organizational fees, which consist primarily of legal fees paid
by us
regarding securities advice and organizing the company. We estimate
that
our legal and organizational fees for the next twelve months will
be
approximately $20,000 to $35,000; and
|
§
|
Other
operating expenses, which consist primarily of the expenses incurred
for
further development of our proposed gasoline formula; for the advertising
campaign for our proposed gasoline formula; and for development of
prospects for third party applications for our proposed containment
system
and other administrative expenses. We estimate that our other operating
expenses for the next twelve months will be approximately
$30,000.
|
We
anticipate that, in time, the primary source of revenues for our business
model
will be the license fees paid by business enterprises for the use of our
proposed gasoline formula. We also anticipate that we may receive compensation
for professional services such as customized research and development of
our
proposed gasoline formula. Currently, we do not have any customers as our
gasoline formula is not yet fully developed.
Purchase
or Sale of Equipment
We
do not
have plans to purchase any significant equipment in the next twelve months.
Off
Balance Sheet Arrangements
As
of
December 31, 2005, there were no off balance sheet arrangements.
Results
of Operations for Period Ending August 31, 2006
We
did
not earn any revenues from inception through the period ending August 31,
2006.
We do not anticipate earning revenues until such time that we have fully
developed our mixed gasoline formula and are able to market that product
effectively. We are presently in the development stage of our business and
we
can provide no assurance that we will develop our formula or successfully
market
it.
We
incurred operating expenses in the amount of $43,985 from our inception on
May
8, 2006, until August 31, 2006, consisting entirely of legal, accounting
and
audit fees in connection with our corporate organization and this offering.
We
anticipate our operating expenses will increase as we undertake our plan
of
operations. The increase will be attributable to undertaking the additional
research phases of our mixed gasoline formula and the professional fees that
we
will incur in connection with the filing of a registration statement with
the
Securities Exchange Commission under the Securities Act of 1933. We anticipate
our ongoing operating expenses will also increase once we become a reporting
company under the Securities Exchange Act of 1934.
Liquidity
and Capital Resources
As
of
August 31, 2006, we had total current assets of $19,000, $15,000 of which
consisted of cash and $4,000 of which consisted of prepaid expenses. Our
total
current liabilities as of August 31, 2006 were $19,985. As a result, we had
working capital deficit of ($985) as of August 31, 2006.
Operating
activities used $47,985 in cash for the period ended August 31, 2006. Our
net
loss of $43,985 for this period was the primary component of our negative
operating cash flow. We primarily relied on cash from the sale of our common
stock and loans to fund our operations during the period ended August 31,
2006.
The
success of our business plan beyond the next 12 months is contingent upon
us
obtaining additional financing. We intend to fund operations through debt
and/or
equity financing arrangements, which may be insufficient to fund our capital
expenditures, working capital, or other cash requirements. We do not have
any
formal commitments or arrangements for the sales of stock or the advancement
or
loan of funds at this time. There can be no assurance that such additional
financing will be available to us on acceptable terms, or at all.
We
own no
real property. We have office space at 3598 Durango St. Palanan, Makati City
1235, Philippines. These facilities are provided to us at no charge by our
director, Ms. Susanna Hilario, since May 2006.
None
of
the following parties has, since our date of incorporation, had any material
interest, direct or indirect, in any transaction with us or in any presently
proposed transaction that has or will materially affect us:
§
|
Any
of our directors or officers;
|
§
|
Any
person proposed as a nominee for election as a
director;
|
§
|
Any
person who beneficially owns, directly or indirectly, shares carrying
more
than 10% of the voting rights attached to our outstanding shares
of common
stock;
|
§
|
Any
relative or spouse of any of the foregoing persons who has the same
house
address as such person.
|
There
is
presently no public market for our common stock. We anticipate making an
application for trading of our common stock on the NASD over the counter
bulletin board upon the effectiveness of the registration statement of which
this prospectus forms a part. We can provide no assurance that our shares
will
be traded on the bulletin board, or if traded, that a public market will
materialize.
The
Securities Exchange Commission has adopted rules that regulate broker-dealer
practices in connection with transactions in penny stocks. Penny stocks are
generally equity securities with a price of less than $5.00, other than
securities registered on certain national securities exchanges or quoted
on the
NASDAQ system, provided that current price and volume information with respect
to transactions in such securities is provided by the exchange or system.
The
penny stock rules require a broker-dealer, prior to a transaction in a penny
stock, to deliver a standardized risk disclosure document prepared by the
Commission, that: (a) contains a description of the nature and level of risk
in
the market for penny stocks in both public offerings and secondary trading;(b)
contains a description of the broker's or dealer's duties to the customer
and of
he rights and remedies available to the customer with respect to a violation
to
such duties or other requirements of Securities' laws; (c) contains a brief,
clear, narrative description of a dealer market, including bid and ask prices
for penny stocks and the significance of the spread between the bid and ask
price;(d) contains a toll-free telephone number for inquiries on disciplinary
actions;(e) defines significant terms in the disclosure document or in the
conduct of trading in penny stocks; and;(f) contains such other information
and
is in such form, including language, type, size and format, as the Commission
shall require by rule or regulation.
The
broker-dealer also must provide, prior to effecting any transaction in a
penny
stock, the customer with; (a) bid and offer quotations for the penny stock;(b)
the compensation of the broker-dealer and its salesperson in the transaction;(c)
the number of shares to which such bid and ask prices apply, or other comparable
information relating to the depth and liquidity of the market for such stock;
and (d) a monthly account statements showing the market value of each penny
stock held in the customer's account.
In
addition, the penny stock rules require that prior to a transaction in a
penny
stock not otherwise exempt from those rules; the broker-dealer must make
a
special written determination that the penny stock is a suitable investment
for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability
statement.
These
disclosure requirements may have the effect of reducing the trading activity
in
the secondary market for our stock if it becomes subject to these penny stock
rules. Therefore, because our common stock is subject to the penny stock
rules,
stockholders may have difficulty selling those securities.
Holders
of Our Common Stock
Currently,
we have thirty-two (32) holders of record of our common stock.
Rule
144 Shares
1,250,000
shares of our common stock will be available for resale to the public after
May
31, 2007 in accordance with the volume and trading limitations of Rule 144
of
the Securities Act of 1933.
In
general, under Rule 144 as currently in effect, a person who has beneficially
owned shares of a company's common stock for at least one year is entitled
to
sell within any three month period a number of shares that does not exceed
the
greater of:
1.
|
one
percent of the number of shares of the company's common stock then
outstanding, which, in our case, will equal approximately 21,500
shares as
of the date of this prospectus, or;
|
2.
|
the
average weekly trading volume of the company's common stock during
the
four calendar weeks preceding the filing of a notice on form 144
with
respect to the sale.
|
Sales
under Rule 144 are also subject to manner of sale provisions and notice
requirements and to the availability of current public information about
the
company.
Under
Rule 144(k), a person who is not one of the company's affiliates at any time
during the three months preceding a sale, and who has beneficially owned
the
shares proposed to be sold for at least two years, is entitled to sell shares
without complying with the manner of sale, public information, volume limitation
or notice provisions of Rule 144.
Stock
Option Grants
To
date,
we have not granted any stock options.
We
have
not granted registration rights to the selling shareholders or to any other
persons.
We
are
paying the expenses of the offering because we seek to: (i) become a reporting
company with the Commission under the Securities Exchange Act of 1934; and
(ii)
enable our common stock to be traded on the NASD over-the-counter bulletin
board. We plan to file a Form 8-A registration statement with the Commission
prior to the effectiveness of the Form SB-2 registration statement. The filing
of the Form 8-A registration statement will cause us to become a reporting
company with the Commission under the 1934 Act concurrently with the
effectiveness of the Form SB-2 registration statement. We must be a reporting
company under the 1934 Act in order that our common stock is eligible for
trading on the NASD over-the-counter bulletin board. We believe that the
registration of the resale of shares on behalf of existing shareholders may
facilitate the development of a public market in our common stock if our
common
stock is approved for trading on a recognized market for the trading of
securities in the United States.
We
consider that the development of a public market for our common stock will
make
an investment in our common stock more attractive to future investors. In
the
near future, in order for us to continue with our business plan, we will
need to
raise additional capital. We believe that obtaining reporting company status
under the 1934 Act and trading on the OTCBB should increase our ability to
raise
these additional funds from investors.
Dividends
There
are
no restrictions in our articles of incorporation or bylaws that prevent us
from
declaring dividends. The Nevada Revised Statutes, however, do prohibit us
from
declaring dividends where after giving effect to the distribution of the
dividend:
1.
|
we
would not be able to pay our debts as they become due in the usual
course
of business, or;
|
2.
|
our
total assets would be less than the sum of our total liabilities
plus the
amount that would be needed to satisfy the rights of shareholders
who have
preferential rights superior to those receiving the
distribution.
|
We
have
not declared any dividends and we do not plan to declare any dividends in
the
foreseeable future.
Summary
Compensation Table
The
table
below summarizes all compensation awarded to, earned by, or paid to both
to our
officers and to our directors for all services rendered in all capacities
to us
for our fiscal year ended August 31, 2006.
Annual
Compensation
|
Long
Term Compensation
|
Name
|
Title
|
Year
|
Salary
|
Bonus
|
Other
annual
Compensation
|
Restricted
Stock
Awarded
|
Options/
SARs
(#)
|
LTIP
payouts
|
All
Other
Compensation
|
Rey
V. Supera
|
Chief
Technology Officer & Director
|
FYE
August 31, 2006
|
$0
|
$0
|
$0
|
0
|
0
|
0
|
0
|
Susanna
Hilario
|
President,
Chief Executive Officer, Chief Financial Officer, Treasurer (Principal
Accounting Officer), Secretary & Director
|
FYE
August 31, 2006
|
$0
|
$0
|
$0
|
0
|
0
|
0
|
0
|
Hsiang
Ling Liu
|
Former
President, Secretary, Treasurer, and Director
|
FYE
August 31, 2006
|
$0
|
$0
|
$0
|
0
|
0
|
0
|
0
|
We
do not
pay to our directors or officers any salary or consulting fee. We anticipate
that compensation may be paid to officers in the event our formula becomes
marketable.
Stock
Option Grants
We
have
not granted any stock options to the executive officers or directors since
our
inception.
Index
to
Financial Statements:
1.
|
Audited
financial statements for the period from inception (May 8, 2006)
to August
31, 2006, including:
|
30201
O
RCHARD
L
AKE
R
OAD
,
S
UITE
150
F
ARMINGTON
H
ILLS
,
M
ICHIGAN
48334
T
EL:
(248)
330-6226 ● F
AX:
(248)
479-0578
www.ronscpa.com
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board
of
Directors
Atheron,
Inc.
Makati
City 1235, Philippines
We
have
audited the accompanying balance sheet of Atheron, Inc. (a development
stage
company) as of August 31, 2006 and the related statements of operations,
changes
in stockholders’ deficit and cash flows for the period from inception (May 8,
2006) to August 31, 2006. These financial statements are the responsibility
of
the Company’s management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that
we plan
and perform the audit to obtain reasonable assurance about whether the
financial
statements are free of material misstatement
.
The
Company has determined that it is not required to have, nor were we engaged
to
perform, an audit of its internal control over financial reporting. Our
audit included consideration of internal control over financial reporting
as a
basis for designing audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of
the
Company’s internal control over financial reporting. Accordingly, we express no
such opinion. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also
includes
assessing the accounting principles used and significant estimates made
by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our
opinion.
In
our
opinion, the financial statements referred to above present fairly, in
all
material respects, the financial position of Atheron, Inc. as of August
31,
2006, and the results of its operations and its cash flows for the period
from
inception (May 8, 2006) to August 31, 2006 in conformity with U.S. generally
accepted accounting principles.
The
accompanying financial statements have been prepared assuming that the
Company
will continue as a going concern. As discussed in Note 5 to the financial
statements, the Company has limited working capital, has not yet received
revenue from sales of products or services, and has incurred losses from
operations. These factors raise substantial doubt about the Company’s ability to
continue as a going concern. Management’s plans with regard to these matters are
described in Note 5. The accompanying financial statements do not include
any
adjustments that might result from the outcome of this uncertainty.
Ronald
N.
Silberstein, CPA, PLLC
Farmington
Hills, Michigan
September
19, 2006
ATHERON,
INC.
(A
DEVELOPMENT STAGE COMPANY)
As
of August 31, 2006
ASSETS
|
|
|
|
Current
Assets
|
|
|
Cash
and equivalents
|
$
|
15,000
|
Prepaid
expenses
|
|
4,000
|
|
|
|
TOTAL
ASSETS
|
$
|
19,000
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
Current
Liabilities
|
|
|
Loan
payable - related party
|
$
|
19,985
|
|
|
|
Stockholders’
Deficit
|
|
|
Common
Stock, $.001 par value, 75,000,000 shares authorized, 2,150,000
shares
issued and outstanding
|
|
2,150
|
Additional
paid-in capital
|
|
40,850
|
Deficit
accumulated during the development stage
|
|
(43,985)
|
Total
stockholders’ deficit
|
|
(
985)
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
$
|
19,000
|
See
accompanying notes to financial statements.
ATHERON,
INC.
(A
DEVELOPMENT STAGE COMPANY)
Period
from May 8, 2006 (Inception) to August 31, 2006
Revenues
|
$
|
-0
-
|
|
|
|
General
and administrative expenses:
|
|
|
Professional
fees
|
|
43,985
|
|
|
|
Net
loss
|
$
|
(43,985)
|
|
|
|
Net
loss per share:
|
|
|
Basic
and diluted
|
$
|
(0.02)
|
|
|
|
Weighted
average shares outstanding:
|
|
|
|
|
|
Basic
and diluted
|
|
2,150,000
|
See
accompanying notes to financial statements.
ATHERON,
INC.
(A
DEVELOPMENT STAGE COMPANY)
Period
from May 8, 2006 (Inception) to August 31, 2006
|
Common
stock
|
|
Additional
paid-in capital
|
|
Deficit
accumulated during the development stage
|
|
|
Total
|
|
Shares
|
|
Amount
|
|
|
|
Issuance
of common stock
for
cash @$.001
|
|
2,150,000
|
|
$
|
2,150
|
|
$
|
40,850
|
|
$
|
-
|
|
|
$
|
43,000
|
Net
loss for the period
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(43,985
|
|
|
|
(43,985)
|
Balance,
August 31, 2006
|
|
2,150,000
|
|
$
|
2,150
|
|
$
|
40,850
|
|
$
|
(43,985
|
|
|
$
|
(
985)
|
See
accompanying notes to financial statements.
ATHERON,
INC.
(A
DEVELOPMENT STAGE COMPANY)
Period
from May 8, 2006 (Inception) to August 31, 2006
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
Net
loss
|
$
|
(43,985
)
|
Change
in non-cash working capital items
Prepaid
expenses
|
|
(
4,000)
|
CASH
FLOWS USED BY OPERATING ACTIVITIES
|
|
(47,985
)
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|
|
Proceeds
from sales of common stock
|
|
43,000
|
Loan
from related party
|
|
19,985
|
CASH
FLOWS PROVIDED BY FINANCING ACTIVITIES
|
|
62,985
|
|
|
|
NET
INCREASE IN CASH
|
|
15,000
|
|
|
|
Cash,
beginning of period
|
|
-0
-
|
Cash,
end of period
|
$
|
15,000
|
|
|
|
SUPPLEMENTAL
CASH FLOW
INFORMATION
|
|
|
Interest
paid
|
$
|
-0
-
|
Income
taxes paid
|
$
|
-0
-
|
See
accompanying notes to financial statements.
ATHERON,
INC.
(A
DEVELOPMENT STAGE COMPANY)
August
31, 2006
NOTE
1 -
SUMMARY OF ACCOUNTING POLICIES
Nature
of
Business
Atheron,
Inc. (“Atheron”) was incorporated in Nevada on May 8, 2006. Atheron is a
development stage company located in Makati City 1235, Philippines. Atheron
is
developing technology for ethanol-methanol gasoline. Atheron operates out
of
office space owned by a director and stockholder of the Company. The facilities
are provided at no charge. There can be no assurances that the facilities
will
continue to be provided at no charge in the future.
Development
Stage Company
The
accompanying financial statements have been prepared in accordance with
the
Statement of Financial Accounting Standards No. 7 ”Accounting and Reporting by
Development-Stage Enterprises”. A development-stage enterprise is one in which
planned principal operations have not commenced or if its operations have
commenced, there has been no significant revenues there from.
Cash
and
Cash Equivalents
Atheron
considers all highly liquid investments with maturities of three months
or less
to be cash equivalents. At August 31, 2006 the Company had $15,000 of
unrestricted cash that was being held in an escrow account by its outside
attorneys, to be used for future business operations.
Fair
Value of Financial Instruments
Atheron’s
financial instruments consist of cash and cash equivalents. The carrying
amount
of these financial instruments approximates fair value due either to length
of
maturity or interest rates that approximate prevailing market rates unless
otherwise disclosed in these financial statements.
Income
Taxes
Income
taxes are computed using the asset and liability method. Under the asset
and
liability method, deferred income tax assets and liabilities are determined
based on the differences between the financial reporting and tax bases
of assets
and liabilities and are measured using the currently enacted tax rates
and laws.
A valuation allowance is provided for the amount of deferred tax assets
that,
based on available evidence, are not expected to be realized.
ATHERON,
INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO THE FINANCIAL STATEMENTS
August
31, 2006
NOTE
1 -
SUMMARY OF ACCOUNTING POLICIES (continued)
Use
of
Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date the financial statements
and the
reported amount of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Basic
loss per share
Basic
loss per share has been calculated based on the weighted average number
of
shares of common stock outstanding during the period.
Recent
Accounting Pronouncements
Atheron
does not expect the adoption of recently issued accounting pronouncements
to
have a significant impact on the Company’s results of operations, financial
position or cash flow.
NOTE
2 -
PREPAID EXPENSES
Prepaid
expenses at August 31, 2006 consisted of an advance retainer paid to the
firms
outside independent auditors for services to be rendered for periods after
Atheron’s year-end.
NOTE
3 -
LOAN PAYABLE - RELATED PARTY
Atheron
received a $19,985 loan from a shareholder and officer of the Company.
The loan
is non-interest bearing and is due upon demand.
NOTE
4 -
INCOME TAXES
For
the
period ended August 31, 2006, Atheron has incurred net losses and, therefore,
has no tax liability. The net deferred tax asset generated by the loss
carry-forward has been fully reserved. The cumulative net operating loss
carry-forward is approximately $43,985 at August 31, 2006, and will expire
in
the year 2026.
ATHERON,
INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO THE FINANCIAL STATEMENTS
August
31, 2006
NOTE
4 -
INCOME TAXES (continued)
The
cumulative tax effect at the expected rate of 34% of significant items
comprising our net deferred tax amount is as follows:
|
2006
|
Deferred
tax asset attributable to:
|
|
|
Net
operating loss carryover
|
$
|
15,000
|
Valuation
allowance
|
|
(15,000)
|
Net
deferred tax asset
|
$
|
-
|
NOTE
5 -
LIQUIDITY AND GOING CONCERN
Atheron
has limited working capital and has not yet received revenues from sales
of
products or services. These factors create substantial doubt about the
Company’s
ability to continue as a going concern. The financial statements do not
include
any adjustment that might be necessary if the Company is unable to continue
as a
going concern.
The
ability of Atheron to continue as a going concern is dependent on the Company
generating cash from the sale of its common stock and/or obtaining debt
financing and attaining future profitable operations. Management’s plans include
selling its equity securities and obtaining debt financing to fund its
capital
requirement and ongoing operations; however, there can be no assurance
the
Company will be successful in these efforts.
We
have
had no changes in or disagreements with our accountants.
We
have
filed a registration statement on form SB-2 under the Securities Act of 1933
with the Securities and Exchange Commission with respect to the shares of
our
common stock offered through this prospectus. This prospectus is filed as
a part
of that registration statement, but does not contain all of the information
contained in the registration statement and exhibits. Statements made in
the
registration statement are summaries of the material terms of the referenced
contracts, agreements or documents of the company. We refer you to our
registration statement and each exhibit attached to it for a more detailed
description of matters involving the company, and the statements we have
made in
this prospectus are qualified in their entirety by reference to these additional
materials. You may inspect the registration statement, exhibits and schedules
filed with the Securities and Exchange Commission at the Commission's principal
office in Washington, D.C. Copies of all or any part of the registration
statement may be obtained from the Public Reference Section of the Securities
and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549.
Please
Call the Commission at 1-800-SEC-0330 for further information on the operation
of the public reference rooms. The Securities and Exchange Commission also
maintains a web site at http://www.sec.gov that contains reports, proxy
Statements and information regarding registrants that files electronically
with
the Commission. Our registration statement and the referenced exhibits can
also
be found on this site.
If
we are
not required to provide an annual report to our security holders, we intend
to
still voluntarily do so when otherwise due, and will attach audited financial
statements with such report.
Until
________________, all dealers that effect transactions in these securities
whether or not participating in this offering may be required to deliver
a
prospectus. This is in addition to the dealers' obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
Part
II
Information
Not Required In the Prospectus
Item
24. Indemnification of Directors and Officers
Our
officers and directors are indemnified as provided by the Nevada Revised
Statutes and our Articles of Incorporation.
Under
the
governing Nevada statutes, director immunity from liability to a company
or its
shareholders for monetary liabilities applies automatically unless it is
specifically limited by a company's articles of incorporation. Our articles
of
incorporation do not contain any limiting language regarding director immunity
from liability. Excepted from this immunity are:
1.
|
a
willful failure to deal fairly with the company or its shareholders
in
connection with a matter in which the director has a material conflict
of
interest;
|
2.
|
a
violation of criminal law (unless the director had reasonable cause
to
believe that his or her conduct was lawful or no reasonable cause
to
believe that his or her conduct was
unlawful);
|
3.
|
a
transaction from which the director derived an improper personal
profit;
and
|
Our
Articles of Incorporation, Article XI, provides as follows:
The
Corporation shall indemnify all directors, officers, employees, and agents
to
the fullest extent permitted by Nevada law as provided within NRS 78.7502
and
NRS 78.751 or any other law then in effect or as it may hereafter be
amended.
The
Corporation shall indemnify each present and future director, officer, employee
or agent of the Corporation who becomes a party or is threatened to be made
a
party to any suit or proceeding, whether pending, completed or merely
threatened, and whether said suit or proceeding is civil, criminal,
administrative, investigative, or otherwise, except by an action by or in
the
right of the Corporation, by reason of the fact that he is or was a director,
officer, employee, or agent of the Corporation, or is or was serving at the
request of the corporation as a director, officer, employee, or agent of
another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses, including, but not limited to, attorneys’ fees, judgments, fines, and
amounts paid in settlement actually and reasonably incurred by him in connection
with the action, suit, proceeding or settlement, provided such person acted
in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interest of the Corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful.
The
expenses of directors, officers, employees or agents of the Corporation incurred
in defending a civil or criminal action, suit, or proceeding may be paid
by the
Corporation as they are incurred and in advance of the final disposition
of the
action, suit, or proceeding, if and only if the director, officer, employee
or
agent undertakes to repay said expenses to the Corporation if it is ultimately
determined by a court of competent jurisdiction, after exhaustion of all
appeals
therefrom, that he is not entitled to be indemnified by the Corporation.
No
indemnification shall be applied, and any advancement of expenses to or on
behalf of any director, officer, employee or agent must be returned to the
Corporation, if a final adjudication establishes that the person’s acts or
omissions involved a breach of fiduciary duties, where applicable, intentional
misconduct, fraud or a knowing violation of the law which was material to
the
cause of action.
Item
25. Other Expenses of Issuance and Distribution
The
estimated costs of this offering are as follows:
Securities
and Exchange Commission
registration fee
|
$
|
2.28
|
Federal
Taxes
|
$
|
0
|
State
Taxes and Fees
|
$
|
0
|
Transfer
Agent Fees
|
$
|
1,000
|
Accounting
fees and expenses
|
$
|
5,000
|
Legal
fees and expenses
|
$
|
35,000
|
Total
|
$
|
41,067
|
All
amounts are estimates, other than the Commission's registration
fee.
We
are
paying all expenses of the offering listed above. No portion of these expenses
will be borne by the selling shareholders. The selling shareholders, however,
will pay any other expenses incurred in selling their common stock, including
any brokerage commissions or costs of sale.
Item
26. Recent Sales of Unregistered Securities
On
May
31, 2006, we accepted subscription agreements for sale of shares our common
stock, having a par value of $0.001 per share, at the offering price of $0.02
per share for gross offering proceeds of $43,000, in offshore transactions
pursuant to Regulation S of the Securities Act. We completed the offering
pursuant to Regulation S of the Securities Act. Each purchaser represented
to us
that he was a non-US person as defined in Regulation S. We did not engage
in a
distribution of this offering in the United States. Each purchaser represented
his intention to acquire the securities for investment only and not with
a view
toward distribution. Each investor was given adequate access to sufficient
information about us to make an informed investment decision. None of the
securities were sold through an underwriter and accordingly, there were no
underwriting discounts or commissions involved.
Item
27. Exhibits
Exhibit
Number
|
Description
|
|
|
|
|
|
|
|
|
Item
28. Undertakings
The
undersigned registrant hereby undertakes:
(1)
To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement: (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii)
to
reflect in the prospectus any facts or events arising after the effective
date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental
change
in the information set forth in the registration statement. Notwithstanding
the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the “Calculation of Registration Fee” table in the
effective registration statement; and (iii) to include any material information
with respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in the
registration statement.
(2)
That,
for the purpose of determining any liability under the Securities Act of
1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3)
To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(4)
That,
for the purpose of determining liability under the Securities Act to any
purchaser,
(a)
If
the Company is relying on Rule 430B:
i.
Each
prospectus filed by the Company pursuant to Rule 424(b)(3) shall be deemed
to be
part of the registration statement as of the date the filed prospectus was
deemed part of and included in the registration statement; and
ii.
Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7)
as
part of a registration statement in reliance on Rule 430B relating to an
offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose
of
providing the information required by section 10(a) of the Securities Act
shall
be deemed to be part of and included in the registration statement as of
the
earlier of the date such form of prospectus is first used after effectiveness
or
the date of the first contract of sale of securities in the offering described
in the prospectus. As provided in Rule 430B, for liability purposes of the
issuer and any person that is at that date an underwriter, such date shall
be
deemed to be a new effective date of the registration statement relating
to the
securities in the registration statement to which that prospectus relates,
and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof; provided,
however,
that no statement made in a registration statement or prospectus that is
part of
the registration statement or made in a document incorporated or deemed
incorporated by reference into the registration statement or prospectus that
is
part of the registration statement will, as to a purchaser with a time of
contract of sale prior to such effective date, supersede or modify any statement
that was made in the registration statement or prospectus that was part of
the
registration statement or made in any such document immediately prior to
such
effective date; or
(b)
If
the Company is subject to Rule 430C:
Each
prospectus filed pursuant to Rule 424(b) as part of a registration statement
relating to an offering, other than registration statements relying on Rule
430B
or other than prospectuses filed in reliance on Rule 430A, shall be deemed
to be
part of and included in the registration statement as of the date it is first
used after effectiveness; provided, however, that no statement made in a
registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into
the
registration statement or prospectus that is part of the registration statement
will, as to a purchaser with a time of contract of sale prior to such first
use,
supersede or modify any statement that was made in the registration statement
or
prospectus that was part of the registration statement or made in any such
document immediately prior to such date of first use.
(5)
That,
for the purpose of determining liability of the registrant under the Securities
Act of 1933 to any purchaser in the initial distribution of securities: The
undersigned registrant undertakes that in a primary offering of securities
of
the registrant pursuant to this registration statement, regardless of the
underwriting method used to sell the securities to the purchaser, if the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned registrant will be a seller to
the
purchaser and will be considered to offer and sell such securities to the
purchaser: (i) any preliminary prospectus or prospectus of the undersigned
registrant relating to the offering required to be filed pursuant to Rule
424;
(ii) any free writing prospectus relating to the offering prepared by or
on
behalf of the undersigned registrant or used or referred to by the undersigned
registrant; (iii) the portion of any other free writing prospectus relating
to
the offering containing material information about the undersigned registrant
or
its securities provided by or on
behalf
of
the undersigned registrant; and (iv) Any other communication that is an offer
in
the offering made by the undersigned registrant to the purchaser.
(6)
Insofar as Indemnification for liabilities arising under the Securities Act
of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provision, or otherwise, the registrant
has
been advised that in the opinion of the Securities and Exchange Commission
such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being
registered, the registrant will, unless in the opinion of its counsel the
matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
SIGNATURES
In
accordance with the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of
the
requirements for filing on Form SB-2 and authorized this registration statement
to be signed on its behalf by the undersigned, in Philippines on October
20,
2006.
ATHERON,
INC.
By:
|
/s/ Susanna Hilario
|
|
[Susanna Hilario]
|
|
President, Chief Executive Officer,
Chief Financial Officer, Treasurer
(Principal Accounting Officer),
Secretary and
Director
|
In
accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities
and
on the dates stated:
By:
|
/s/ Susanna Hilario
|
|
[Susanna Hilario]
|
|
President, Chief Executive Officer,
Chief Financial Officer, Treasurer
(Principal Accounting Officer),
Secretary and Director
October 20,
2006
|