UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
 
FORM 10
Amendment No. 3
GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or (g) of The Securities Exchange Act of 1934
 
NUSTATE ENERGY HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
 
Nevada
87-04496677
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
 
 
1201 Main Street, Suite 1980,
29201
Columbia, South Carolina
 
(Address of principal executive offices)
(Zip Code)
 
 
Registrant's telephone number, including area code:
(803) 748-1309
 
Securities registered under Section 12(b) of the Act:
 
Title of each class
to be so registered
Name of each exchange on which registered
each class is to be registered
None
Not applicable
 
Securities registered under Section 12(g) of the Act:
 
Common Stock, par value $0.001 per share
(Title of class)
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company:
 
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
[X]
 
 
 

 
 
NuState Energy Holdings, Inc.
FORM 10
TABLE OF CONTENTS

   
Page No.
Item 1.
Business.
3
Item 1A.
Risk Factors.
5
Item 2.
Financial Information.
8
Item 3.
Properties.
15
Item 4.
Security Ownership of Certain Beneficial Owners and Management.
15
Item 5.
Directors and Executive Officers.
18
Item 6.
Executive Compensation.
18
Item 7.
Certain Relationships and Related Transactions, and Director Independence.
20
Item 8.
Legal Proceedings.
21
Item 9.
Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters.
21
Item 10.
Recent Sales of Unregistered Securities.
22
Item 11.
Description of Registrant’s Securities to be Registered.
23
Item 12.
Indemnification of Directors and Officers.
25
Item 13.
Financial Statements and Supplementary Data.
25
Item 14.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
25
Item 15.
Exhibits, Financial Statement Schedules.
26
 
OTHER PERTINENT INFORMATION
 
Unless specifically set forth to the contrary, when used in this registration statement the terms “NuState", "we", "our", the "Company" and similar terms refer to NuState Energy Holdings, Inc., a Nevada corporation. In addition, when used herein and unless specifically set forth to the contrary, “2012” refers to the year ended June 30, 2012 and “2011” refers to the year ended June 30, 2011.
 
Additional Information
 
We are filing this General Form for Registration of Securities on Form 10 to amend the Form 10 we filed on May 8, 2013 to register our common stock, par value $0.001 per share, pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended, or the Exchange Act. As a result of our previously-filed registration statement, we are subject to the informational requirements of the Securities Exchange Act of 1934 and, consequently, are required to file annual and quarterly reports, proxy statements and other information with the Securities and Exchange Commission, or SEC. The registration statement, including exhibits, may be inspected without charge at the SEC’s principal office in Washington, D.C., and copies of all or any part thereof may be obtained from the Public Reference Section, Securities and Exchange Commission, 100 F Street, NW, Washington, D.C. 20549 upon payment of the prescribed fees. You may obtain information on the operation of the Public Reference Room by calling the SEC at l.800.SEC.0330. The SEC maintains a Website that contains reports, proxy and information statements and other information regarding registrants that file electronically with it. The address of the SEC’s Website is http://www.sec.gov.
 
2

 
 
Item 1. Business
 
Description of Business
We do not have any business or operations and are considered a "shell" company under Federal securities laws. We are actively seeking to acquire assets or shares of an entity actively engaged in business which generates revenues, in exchange for our securities. Our purpose is to seek, investigate and, if such investigation warrants, acquire an interest in business opportunities presented to us by persons or firms who or which desire to seek the perceived advantages our company may offer. We will not restrict our search to any specific business, industry, or geographical location and we may participate in a business venture of virtually any kind or nature. This discussion of the proposed business is purposefully general and is not meant to be restrictive of our virtually unlimited discretion to search for and enter into potential business opportunities. Management anticipates that it may be able to participate in only one potential business venture because we have nominal assets and limited financial resources. This lack of diversification should be considered a substantial risk to our stockholders because it will not permit us to offset potential losses from one venture against gains from another.
 
As of June 11, 2013 , we had less than $1,000 cash on hand . We anticipate a monthly operating burn rate of approximately $57,000 per month post-registration ($684,000 annually), as compared to our pre-registration monthly operating burn rate of $40,000. Our anticipated monthly operating burn rate consists of $47,000 of costs to continue operations and $10,000 of incremental costs to implement our plan of operations.  Based on this burn rate, we will run out of funds immediately without additional capital. We estimate that we must raise minimum additional capital of $564,000, up to $684,000 to cover our incremental costs of implementing our plan of operations. In addition, we will need to raise additional funds of approximately $4.5 million to satisfy our outstanding obligations as of March 31, 2013. If we are unable to raise the additional capital necessary to support our estimated near-term costs, we will likely 1) fail to comply with current reporting regulations, 2) be unable to find a business opportunity, and 3) we could potentially be forced to seek relief through a filing under the U.S. Bankruptcy Code.
 
The accompanying financial statements have been prepared on a going concern basis. We used net cash in its operating activities of approximately $123,000 during the nine-month period ended March 31, 2013 and had a working capital deficit of approximately $4,500,000 at March 31, 2013, consisting of $2,513 in current assets and $4,518,169 in current liabilities.  Our auditors have issued a going concern opinion, as our ability to continue as a going concern is dependent upon our ability to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due, to fund possible future acquisitions, and to generate profitable operations in the future, once a merger with an operating company is consummated. Our plans may continue to provide for our capital requirements by issuing additional equity securities and debt and we will continue to find possible acquisition target. The outcome of these matters cannot be predicted at this time and there are no assurances that if achieved, we will have sufficient funds to execute our business plan or generate positive operating results.
 
New Business Opportunity
 
We may seek a business opportunity with entities which have recently commenced operations, or which wish to utilize the public marketplace in order to raise additional capital in order to expand into new products or markets, to develop a new product or service, or for other corporate purposes. We may acquire assets and establish wholly-owned subsidiaries in various businesses or acquire existing businesses as subsidiaries. We anticipate that the selection of a business opportunity in which to participate will be complex and extremely risky. Due to general economic conditions, rapid technological advances being made in some industries and shortages of available capital, management believes that there are numerous firms seeking the perceived benefits of a publicly registered corporation. These perceived benefits may include facilitating or improving the terms on which additional equity financing may be sought, providing liquidity for incentive stock options or similar benefits to key employees, providing liquidity, subject to restrictions of applicable statutes, for all stockholders and other factors. Potentially, available business opportunities may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.
 
The analysis of new business opportunities will be undertaken by, or under the supervision of, Mr. Kevin Yates, our Chief Executive Officer, who may not be considered a professional business analyst. Mr. Yates will be the key person in the search, review and negotiation with potential acquisition or merger candidates. We intend to concentrate on identifying preliminary prospective business opportunities that may be brought to our attention through present associations of Mr. Yates and legal counsel or by our stockholders. In analyzing prospective business opportunities, we will consider such matters as:
 
 
the available technical, financial and managerial resources;
 
working capital and other financial requirements;
 
history of operations, if any;
 
prospects for the future;
 
nature of present and expected competition;
 
the quality and experience of management services which may be available and the depth of that management;
 
the potential for further research, development, or exploration;
 
specific risk factors not now foreseeable but which then may be anticipated to impact our proposed activities;
 
the potential for growth or expansion;
 
the potential for profit;
 
the perceived public recognition of acceptance of products, services, or trades; name identification; and
 
other relevant factors.
 
We will use the details listed above to evaluate and select a business opportunity. In evaluating and selecting a business opportunity, we will use a multi-step process consisting of the following:
 
 
1.
Search for like-minded parties, this step is expected to take approximately 0-6 months, and will consist of environmental scanning for parties with similar goals. Step 2 will not take place until completion of this search;
 
2.
Feasibility analysis, this step is expected to take approximately 1 week and will involve consideration of the matters listed above, with an emphasis on marketing potential and financing requirements. The feasibility analysis will either result in abandonment to begin a new search, or continuation onto step 3;
 
3.
Goal setting and criteria establishment, this step is expected to take approximately 1 week and will require the establishment of specific, attainable long and short-term performance goals for the business opportunity, in addition to the establishment of specific criteria by which to measure the business’s performance;
 
4.
Evaluation , this step is expected to take approximately 2-4 weeks and will consist of an analysis of relevant data collected to determine if minimum expectations were met from step 3. If goals were achieved, we will move onto step 5, if not, we will re-assess step 3 and begin another evaluation or start a new search altogether;
 
5.
Memorialize letter of intent, this step is expected to take approximately 1 week and will call for the drafting of a non-binding letter of intent to be agreed upon between the like-minded parties. If no agreement is reached after necessary negotiations, we will begin a new search from step 1;
 
6.
Transaction financing, this step is expected to take approximately 1-2 months and will require us to raise sufficient funding to complete the potential acquisition or merger, in addition to funding short-term operations. If this step is unsuccessful we will have to begin a new search;
 
7.
Consummate Transaction, this step is expected to take approximately 1 week and will involve the formal completion of all legal contracts to complete the related merger or acquisition.
 
We will not acquire or merge with any company for which audited financial statements cannot be obtained within the time period prescribed by applicable rules of the United States Securities and Exchange Commission which is presently four business days from the closing date of the transaction. This requirement for readily available audited financial statement may require us to preclude a transaction with a potential candidate that might otherwise be beneficial to our stockholders.
 
 
3

 
 
We will not restrict our search for any specific kind of company, but may acquire a venture that is in its preliminary or development stage, which is already in operation, or in essentially any stage of its corporate life. It is impossible to predict at this time the status of any business in which we may become engaged, in that such business may need to seek additional capital, may desire to have its shares publicly traded, or may seek other perceived advantages which we may offer. However, we do not intend to obtain funds in one or more private placements to finance the operation of any acquired business opportunity until such time as we have successfully consummated such a merger or acquisition.
 
In implementing a structure for a particular business acquisition, we may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another corporation or entity. We may also acquire stock or assets of an existing business. On the consummation of a transaction, it is possible that our present management and stockholders will no longer be in control of our company. In addition, our sole director may, as part of the terms of the acquisition transaction, resign and be replaced by new directors without a vote of our stockholders.
 
We anticipate that any securities issued in any such reorganization would be issued in reliance upon exemption from registration under applicable federal and state securities laws. In some circumstances, however, as a negotiated element of a transaction, we may agree to register all or a part of such securities immediately after the transaction is consummated or at specified times thereafter. If such registration occurs, of which there can be no assurance, it will be undertaken by the surviving entity after we have successfully consummated a merger or acquisition and we are no longer considered a "shell" company. Until such time as this occurs, we will not attempt to register any additional securities. The issuance of substantial additional securities and their potential sale into any trading market which may develop in our securities may have a depressive effect on the value of our securities in the future, if such a market develops, of which there is no assurance.
 
Identify Potential Merger or Acquisition Candidates
In August 2011, the Company entered into a Share Exchange Agreement (“SEA”) with GLINS International NV (“GLINS”), a Curacao company doing business in the country of Suriname, which would have resulted in a change of control. In December 2011, the closing date of the SEA was extended to July 31, 2012. By mutual agreement, the SEA was terminated in August 2012. The Company continues to have relationships throughout the country of Suriname and anticipates developing new business arrangements in the future. We have not identified a potential merger or acquisition candidate at this time. Our search for a business opportunity is not limited to the country of Suriname.
 
The Country of Suriname General Data
The Republic of Suriname is a country in the north-east part of South America bordered by two rivers, the Corantijne River at the west (Guyana) and the Marowijne River at the east (French Guyana). Suriname has a coastline of about 350 kilometers and the distance from north to south is about 450 kilometers. Most of the population lives along the coastline in the capital city of Paramaribo. In total, an estimated 566,846 people live in Suriname as of July 2013.
 
One of the smallest, yet most ethnically diverse and ecologically significant nations in Latin America, Suriname also is one of the Caribbean’s top economic performers. The World Bank recently ranked Suriname among the 10 potentially richest countries. Indeed, its wealth of natural resources is vast yet still largely unexplored, and the country is a net exporter of agriculture products. Tourism is growing as more people become aware of its pristine rainforests and eco-tourism possibilities.
 
Company Background
The company was incorporated in Nevada as Jaguar Investments, Inc. during October 1987. During March 2003, a wholly owned subsidiary of the Company merged with Freight Rate, Inc., a development stage company in the logistics software business. During May 2003, the Company changed its name to Power2Ship, Inc. During October 2006, the Company merged with a newly formed, wholly owned subsidiary, Fittipaldi Logistics, Inc., a Nevada corporation, with the Company surviving but its name changed to Fittipaldi Logistics, Inc. effective November 2006. During December 2007, the Company merged with a newly formed, wholly owned subsidiary, NuState Energy Holdings, Inc., a Nevada corporation, with the Company surviving but renamed NuState Energy Holdings, Inc. effective December 2007.
 
 
4

 
 
The Company has two wholly owned subsidiaries, Commodity Express Transportation, Inc. or CXT, a former provider of truck transportation and third-party logistics services, and Power2Ship Intermodal, Inc. or P2SI, a former provider of intermodal drayage transportation services, which ceased operations in May 2009 and June 2006, respectively. CXT has a wholly owned subsidiary, Commodity Express Brokerage, Inc.
 
On February 12, 2009, the Company filed Form 15 to terminate registration of its common stock under section 12(g) of the Securities Exchange Act of 1934 and subsequently has not submitted any filings to the Securities and Exchange Commission.
 
During the period from February 2009 through April 2010, the Company had several changes to its officers and directors and moved its offices twice. Presently, the Company’s Chairman and President, since April 2010, and its Chief Executive Officer, since July 2010, is Kevin Yates. The Company’s headquarters is located at 1201 Main Street, Suite 1980, Columbia, S.C. 29201.
 
Since April 2010, the Company’s current management developed, and began implementing, the following strategic plan designed to increase the Company’s shareholders’ value:
 
 
1.
Improve the Company’s balance sheet by reducing liabilities and regaining use of certain of its intellectual property and software,
 
2.
Settle litigation,
 
3.
Identify potential merger or acquisition candidates with whom the Company could enter into a transaction upon the Company achieving items 1 and 2 above, and
 
4.
License its intellectual property and software, also known as My Driver’s Seat, which it regained in April 2010.
 
This strategic plan has resulted in the following material events:
 
Reduced Liabilities
Since filing its Form 10-Q for the quarterly period ended September 30, 2008, total liabilities have decreased by $5,169,781 or 53% from $9,687,950 on September 30, 2008 to $4,518,169 on March 31, 2013.
 
In August 2012, its subsidiaries CXT and P2SI each filed a Voluntary Bankruptcy Petition and Schedules in the United States Bankruptcy Court in the District of South Carolina. On October 19, 2012 the Company was awarded the bankruptcy and will be filing the proper paperwork and as result will reduce its liabilities by $1,494,406.
 
Regained Use of Intellectual Property
As part of an agreement entered into with Rentar Environmental Solutions, Inc. (“Rentar”) in April 2010, the Company agreed to provide Rentar  a non-exclusive right  to intellectual properties and software, My Driver’s Seat, which it had developed for the worldwide transportation and security industries and had sold in April 2008 to Rentar Logic, a Delaware corporation incorporate Rentar. The Company’s intellectual property also includes two patents titled “Dynamic and Predictive Information System and Method for Shipping Assets and Transport” assigned to it by the inventors, former officers of the Company. The Company’s management believes that this intellectual property may, with some further development, become a viable business opportunity.
 
Licensing Use of Intellectual Property
We are currently discussing the potential licensing of our software, My Driver’s Seat, with certain third-parties.
 
Employees
At Juen 11, 2013, we had 1 full time employee.
 
Item 1A. Risk Factors
 
The common shares of our Company are considered speculative. You should carefully consider the following risks and uncertainties in addition to other information in this registration statement in evaluating our Company and our business before purchasing our common shares. Our business, operating or financial condition could be harmed due to any of the following risks:
 
 
5

 
 
Our auditors have raised substantial doubts as to our ability to continue as a going concern .
 
Our consolidated financial statements have been prepared assuming we will continue as a going concern. Since inception we have experienced recurring losses from operations, which losses have caused an accumulated deficit of approximately $40.2 million as of March 31, 2013. These factors, among others, raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty. However, we anticipate that we will continue to incur losses in future periods until we are successful in completing a business combination with an operating entity, with an expected monthly burn rate of $57,000 post-registration. If for some reason we are not able to consummate a business combination within a reasonable period of time, we may not have sufficient resources to continue meeting our reporting obligations with the Securities and Exchange Commission or other obligations which arise from our minimal operations. If we were to fail to continue to meet our SEC reporting obligations the attractiveness of our vehicle to an operating company would be severely diminished and our ability to consummate a business combination would be in jeopardy.
 
We currently have a working capital deficit and are uncertain if and when we will be able to pay our current liabilities.
 
Our working capital deficit was $4,515,656 as of March 31, 2013. This deficit consists of $2,513 in current assets, offset by $4, 518,169 in current liabilities. We do not have any liquid or other assets that can be liquidated to pay our current liabilities while we continue to incur additional liabilities to our officer and certain service providers who are working to prepare the documents required to be filed with the Securities and Exchange Commission to enable our common shares to be registered for trading. Since we currently have limited operations, the only ways we have of paying our current liabilities are to issue our common or preferred shares to our creditors or to issue unsecured promissory notes which may include certain features such as convertibility into common or preferred shares or warrants to purchase additional common or preferred shares in the future.
 
We currently do not have sufficient capital to finance the anticipated recurring costs of being a publicly-traded company.
 
As of June 11, 2013, we had less than $1,000 cash on hand. We anticipate incurring incremental annual costs of approximately $180,000 related to being a publicly-traded company. We currently do not have sufficient resources to finance these costs, and will need to raise additional capital to support our public-company-related activities. If we are unable to raise sufficient capital, we may fail to comply with current reporting regulations.
 
We may still have some exposure to creditors of two of our subsidiaries which filed for bankruptcy.
 
Unpaid creditors of our subsidiaries may look to us as a target to recover on their claims under any number of legal theories, including piercing the corporate veil, breach of fiduciary duty, and deepening insolvency. We also   may find that we have exposure to the subsidiaries’ creditors under various state and federal statutes, or under contracts among the parties.
 
We currently do not have an operating business and cannot provide any assurance that we will have an operating business in the future.
 
We currently do not have any operating business. We continue to incur operating expenses while we consider alternative operating plans. These plans may include business combinations with or investments in other operating companies, or entering into a completely new line of business. We cannot assure you that we will be able to identify any appropriate business opportunities. Even if we are able to identify business opportunities that our Board deems appropriate, we cannot assure you that such a strategy will provide you with a positive return on your investment, and it may in fact result in a substantial decrease in the value of your stock. These factors will substantially increase the uncertainty, and thus the risk, of investing in our shares.
 
We have $930,400 of accrued compensation as of March 31, 2013 and we do not have the funds necessary to pay these obligations.
 
In addition to funding our operating expenses, we need capital to pay accrued compensation aggregating $930,400. The existence of these obligations provides additional challenges to us in our efforts to raise capital to fund our operations. If we are unable to restructure these liabilities and we are unable to raise the capital necessary to satisfy the obligations, it is possible we will be forced to cease operations. Due to our lack of liquidity, we may be forced to satisfy some or all of these obligations through the issuance of our common stock. During the nine-month period ended March 31, 2013 we have issued an aggregate 100,000,000 shares of our common stock to satisfy certain accrued compensation liabilities of $500,000. Such issuances of our common stock, and any future issuances necessary to satisfy outstanding obligations, will further dilute the existing stockholders’ interest in our Company.
 
We have $3,193,028 of convertible notes, notes payable, and accrued interest as of March 31, 2013 which is presently past due and we do not have the funds necessary to pay these obligations.
 
In addition to funding our operating expenses, we need capital to pay various debt obligations totaling approximately $3.2 million as of March 31, 2013 which are either currently past due or which are due in the current fiscal year. Currently, there are $1,694,311 principal amount of the convertible notes payable which are past due, $265,241 principal of the notes payable which are past due, and 1,233,476 of accrued interest which are past due. The interest on the past due principal amounts will continue to accrue monthly at their stated rates. Holders of past due notes do not have a security interest in our assets. The existence of these obligations provides additional challenges to us in our efforts to raise capital to fund our operations. If we are unable to restructure these notes and we are unable to raise the capital necessary to satisfy the obligations, it is possible we will be forced to cease operations.
 
We have $430,100 of accrued dividends as of March 31, 2013 and we may not be able to settle this obligation in cash or stocks.
 
In addition to funding our operating expenses, we need capital to pay accrued dividends totaling approximately $430,100 as of March 31, 2013. The existence of these obligations provides additional challenges to us in our efforts to raise capital to fund our operations. If we are unable to raise the capital necessary to satisfy the obligations, it is possible we will be forced to cease operations.
 
Our sole officer and director does not devote all of his time and attention to our business which may result in his not being able to identify and consummate an acquisition with an operating company.
 
Mr. Yates, who serves as our sole officer and director, devotes only approximately 90% of his time to the business and affairs of our company. Because Mr. Yates is primarily responsible for the identification and consummation of an acquisition of an operating company for us, we are materially dependent upon his efforts on our part. It is possible that because he does not spend his full time and efforts on our behalf that it may take longer to identify and close an acquisition of an operating company than if he was employed by us on a full-time basis.
 
Our internal control over financial reporting was considered ineffective as of June 30, 2012, and may continue to be ineffective in the future, which could result in our financial statements being unreliable, government investigation or loss of investor confidence in our financial reports.
 
Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, and the SEC rules promulgated thereunder, we are required to furnish an annual report by our management assessing the effectiveness of our internal control over financial reporting. This assessment must include disclosure of any material weaknesses in our internal control over financial reporting identified by management. Management's reports as of the year ended June 30, 2012 identified several material weaknesses and concluded that we did not have effective internal control over financial reporting. Ineffective internal controls can result in errors or other problems in our financial statements. Even if material weaknesses identified do not cause our financial statements to be unreliable, if we continue to be unable to assert that our internal controls are effective, our investors could still lose confidence in the accuracy and completeness of our financial reports, which in turn could cause our stock price to decline. Failure to maintain effective internal control over financial reporting could also result in investigation or sanctions by regulatory authorities. We will be unable to achieve acceptable internal controls with only one officer and director.  
 
In the event that our independent registered public accounting firm is unable to rely on our internal controls in connection with their audit of our financial statements, and in the further event that they are unable to devise alternative procedures in order to satisfy themselves as to the material accuracy of our financial statements and related disclosures, it is possible that we would receive a qualified or an adverse audit opinion on those financial statements which could also adversely affect the market price of our Common Stock and our ability to secure additional financing as needed.
 
We may not be able to identify or fully capitalize on any appropriate business opportunities due to many factors which may negatively impact your investment in our company.
 
Due to a variety of factors outside of our control, we may not be able to identify or fully capitalize on any business opportunities we may identify. These factors include:
 
 
competition from other potential acquirers and partners of and investors in potential acquisitions, many of whom may have greater financial resources than we do;
 
in specific cases, failure to agree on the terms of a potential acquisition, such as the amount or price of our acquired interest, or incompatibility between us and management of the Company we wish to acquire; and
 
the possibility that we may lack sufficient capital and/or expertise to develop promising opportunities.
 
Even if we are able to identify business opportunities that our Board deems appropriate, we cannot assure you that such a strategy will provide you with a positive return on your investment, and may in fact result in a substantial decrease in the value of your stock.
 
 
6

 
 
Any potential acquisition or merger with a foreign company may subject us to additional risks.
 
If we enter into a business combination with a foreign company, we will be subject to risks inherent in business operations outside of the United States.  These risks include, for example, currency fluctuations, regulatory problems, punitive tariffs, unstable local tax policies, trade embargoes, risks related to shipment of raw materials and finished goods across national borders and cultural and language differences.  Foreign economies may differ favorably or unfavorably from the United States economy in growth of gross national product, rate of inflation, market development, rate of savings, and capital investment, resource self-sufficiency, and balance of payments positions, and in other respects. The country of Suriname carries several specific risks to business operations; due to the mineral industry’s dominance of country, the local economy is highly vulnerable to mineral price volatility. Additionally, to control rising inflation, the country of Suriname has devalued their local currency by 20% in 2011 in addition to raising local income taxes.  
 
In the event we consummate a transaction with a profitable company, we may not be able to utilize our net operating loss carryover which may have a negative impact on your investment.
 
If we enter into a combination with a business that has operating income, we cannot assure you that we will be able to utilize all or even a portion of our existing net operating loss carryover for federal or state tax purposes following such a business combination. If we are unable to make use of our existing net operating loss carryover, the tax advantages of such a combination may be limited, which could negatively impact the price of our stock and the value of your investment. These factors will substantially increase the uncertainty, and thus the risk, of investing in our shares.
 
Economic conditions may affect our ability to obtain financing and to complete a merger or acquisition.
 
Due to general economic conditions, rapid technological advances being made in some industries, and shortages of available capital, our management believes that there are numerous firms seeking even the limited additional capital which we will need. In the presence of these economic conditions, we may have difficulty raising sufficient capital to support the investigation of potential business opportunities, and to consummate a merger or acquisition. These factors substantially increase the uncertainty, and thus the risk, of investing in our shares.
 
There are a number of factors related to our common stock which may have an adverse effect on our shareholders.
 
Shareholders' interests in our Company will be diluted and investors may suffer dilution in their net book value per share if we issue additional shares or raise funds through the sale of equity securities. In the event that we are required to issue additional shares, enter into private placements to raise financing through the sale of equity securities or acquire business interests in the future from the issuance of shares of our common stock to acquire such interests, the interests of existing shareholders in our Company will be diluted and existing shareholders may suffer dilution in their net book value per share depending on the price at which such securities are sold. If we do issue additional shares, it will cause a reduction in the proportionate ownership and voting power of all existing shareholders.
 
We are a shell company, and liquidity of shares of our common stock is limited.
 
The fact that we are a “shell company” within the meaning of certain regulations means that holders of our common stock are subject to certain restrictions on their ability to sell their shares pursuant to the resale exemptions from registration provided by Rule 144 (“Rule 144”) under, or Section 4(1) of, the Securities Act, and this further limits the liquidity of our common stock.  Specifically, holders of shares of common stock of a “shell company” are only permitted to sell their shares of common stock under Rule 144, subject to certain restrictions, starting one year after (i) the completion of a business combination with a private company in a merger or other transaction after which the company would cease to be a “shell company” (as defined in Rule 12b-2 under the Exchange Act) and (ii) the disclosure of certain financial and information regarding the company in relation to which the business combination was consummated on a Current Report on Form 8-K within four business days thereafter.
 
We are an "emerging growth company," and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our common stock less attractive to investors.
 
We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act, or the JOBS Act. As part of the JOBS Act, companies with less than $1 billion in gross revenue can qualify as an “emerging growth company.” Therefore, we qualify as an emerging growth company, and we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include, but are not limited to:
 
·
Not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act;
 
·
Reduced disclosure obligations regarding executive compensation in our periodic and annual reports;
 
·
Not being required to comply with certain new requirements adopted by the Public Company Accounting Oversight Board, or PCAOB, and;
 
·
Not being required to obtain stockholder approval of any golden parachute payments not previously approved.
 
We plan to take advantage of the reduced disclosure obligations. Additionally, we will qualify as a “smaller reporting company” and thus have the advantage of not being required to provide the same level of disclosure as larger public companies. Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in the Securities Act for complying with new or revised accounting standards. We have elected not to opt in to Section 107 and, therefore, will not delay adoption of certain accounting standards applicable to public companies. This election is irrevocable.  
 
We could remain an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier. We could lose our emerging growth status on the earliest of 1) the last day of the first fiscal year in which we have annual gross revenues of $1 billion or more, 2) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt, or 3) the date on which we are deemed to be a “large accelerated filer” as  defined by rule 12b-2 under the Securities Act of 1934, as amended, or the Exchange Act, which would occur if the market value of the Company’s common units that are held by non-affiliates exceeds $700 million as of the last business day of the Company’s most recently completed second fiscal quarter. At this time we expect to remain both a “small reporting company” and an “emerging growth company” for the foreseeable future.
 
The concentration of share ownership by Company insiders could pose conflicts of interest which may adversely affect all other Company shareholders.
 
Shareholders with beneficial ownership of at least 5%, senior management and directors have significant ownership of our shares amounting to 91% as of June 11, 2013. This concentration could lead to conflicts of interest and difficulties for non-insider investors effecting corporate changes, and could adversely affect our Company's share price and influence all matters submitted to our Company's shareholders for approval. Accordingly, this concentration of ownership may have the effect of delaying, deferring or preventing a change in control of our Company, impeding a merger, consolidation, takeover or other business combination involving our Company or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of our Company, which in turn could have a material adverse effect on the market price of our shares. Employee, Director and consultant stock options and warrants could lead to greater concentration of share ownership among insiders and could lead to dilution of share ownership which could lead to depressed share prices.
 
We have certain provisions in our Articles of Incorporation and Bylaws, and there are other provisions under Nevada law, that may serve to make a takeover of our Company more difficult.
 
Provisions of our articles of incorporation and bylaws may delay or prevent a takeover which may not be in the best interests of our stockholders. Provisions of our articles of incorporation and bylaws may be deemed to have anti-takeover effects, which include when and by whom special meetings of our stockholders may be called, and may delay, defer or prevent a takeover attempt. In addition, certain provisions of Nevada law also may be deemed to have certain anti-takeover effects which include that control of shares acquired in excess of certain specified thresholds will not possess any voting rights unless these voting rights are approved by a majority of a corporation's disinterested stockholders.
 
Our common stock is quoted in the over the counter market on the OTC Pink.
 
Our common stock is quoted on the OTC Pink. OTC Pink offers a quotation service to companies that are unable to list their securities on an exchange or for companies, such as ours, whose securities are not eligible for quotation on the OTC Bulletin Board. The requirements for quotation on the OTC Pink are considerably lower and less regulated than those of the OTC Bulletin Board or an exchange. Because our common stock is quoted on the OTC Pink, it is possible that even fewer brokers or dealers would be interested in making a market in our common stock which further adversely impacts its liquidity.
 
 
7

 
 
The tradability of our common stock is limited under the penny stock regulations which may cause the holders of our common stock difficulty should they wish to sell their shares.
 
Because the quoted price of our common stock is less than $5.00 per share, our common stock is considered a "penny stock," and trading in our common stock is subject to the requirements of Rule 15g-9 under the Exchange Act. Under this rule, broker/dealers who recommend low-priced securities to persons other than established customers and accredited investors must satisfy special sales practice requirements. The broker/dealer must make an individualized written suitability determination for the purchaser and receive the purchaser's written consent prior to the transaction. SEC regulations also require additional disclosure in connection with any trades involving a "penny stock," including the delivery, prior to any penny stock transaction, of a disclosure schedule explaining the penny stock market and its associated risks. These requirements severely limit the liquidity of securities in the secondary market because few broker or dealers are likely to undertake these compliance activities and this limited liquidity will make it more difficult for an investor to sell his shares of our common stock in the secondary market should the investor wish to liquidate the investment. In addition to the applicability of the penny stock rules, other risks associated with trading in penny stocks could also be price fluctuations and the lack of a liquid market.
 
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
 
This registration statement contains forward-looking statements. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, the impact of the pending bankruptcy of our subsidiaries, our ability to consummate the acquisition of an operating entity and/or assets, our ability to generate revenues and pay our operating expenses, our ability to raise capital as necessary, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements and readers should carefully review this registration statement in its entirety. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. These forward-looking statements speak only as of the date of this registration statement, and you should not rely on these statements without also considering the risks and uncertainties associated with these statements and our business.
 
Item 2.
 
Management’s Discussion and Analysis of Financial Condition and Results Of Operations
 
The following discussion of our financial condition and results of operation for 2011 through 2012 should be read in conjunction with the financial statements and the notes to those statements that are included elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Item 1A. Risk Factors, Cautionary Notice Regarding Forward-Looking Statements and Business sections in this Form 10. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.
 
Plan of Operations
 
Our current business objective is to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. Our principal business objective is to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. We will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.
 
In evaluating and selecting a business opportunity, we intend will consider the following factors:
 
 
the available technical, financial and managerial resources;
 
working capital and other financial requirements;
 
history of operations, if any;
 
prospects for the future;
 
nature of present and expected competition;
 
the quality and experience of management services which may be available and the depth of that management;
 
the potential for further research, development, or exploration;
 
specific risk factors not now foreseeable but which then may be anticipated to impact our proposed activities;
 
the potential for growth or expansion;
 
the potential for profit;
 
the perceived public recognition of acceptance of products, services, or trades; name identification; and
 
other relevant factors.
 
We will use the details listed above to evaluate and select a business opportunity. In evaluating and selecting a business opportunity, we will use a multi-step process consisting of the following:
 
 
1.
Search for like-minded parties, this step is expected to take approximately 0-6 months, and will consist of environmental scanning for parties with similar goals. Step 2 will not take place until completion of this search;
 
2.
Feasibility analysis, this step is expected to take approximately 1 week and will involve consideration of the matters listed above, with an emphasis on marketing potential and financing requirements. The feasibility analysis will either result in abandonment to begin a new search, or continuation onto step 3;
 
3.
Goal setting and criteria establishment, this step is expected to take approximately 1 week and will require the establishment of specific, attainable long and short-term performance goals for the business opportunity, in addition to the establishment of specific criteria by which to measure the business’s performance;
 
4.
Evaluation , this step is expected to take approximately 2-4 weeks and will consist of an analysis of relevant data collected to determine if minimum expectations were met from step 3. If goals were achieved, we will move onto step 5, if not, we will re-assess step 3 and begin another evaluation or start a new search altogether;
 
5.
Memorialize letter of intent, this step is expected to take approximately 1 week and will call for the drafting of a non-binding letter of intent to be agreed upon between the like-minded parties. If no agreement is reached after necessary negotiations, we will begin a new search from step 1;
 
6.
Transaction financing, this step is expected to take approximately 1-2 months and will require us to raise sufficient funding to complete the potential acquisition or merger, in addition to funding short-term operations. If this step is unsuccessful we will have to begin a new search;
 
7.
Consummate Transaction, this step is expected to take approximately 1 week and will involve the formal completion of all legal contracts to complete the related merger or acquisition.
 
 
8

 
 
We currently engage in limited business activities and have limited cash resources. As such, the costs of investigating and analyzing business combinations will be paid through capital raises. The incremental cost to implement a plan of operations is anticipated to cost approximately $120,000.  We also anticipate incurring costs incremental costs of $180,000 related to the filing of quarterly, annual and other reports with the Securities and Exchange Commission and costs relating to consummating an acquisition. We do not have any firm commitments, however, for the provision of any additional capital to our company to fund these costs.
 
We may consider a business which has recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets, is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating difficulties and is in need of additional capital. In the alternative, a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital, but which desires to establish a public trading market for its shares, while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.
 
Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.
 
Our management anticipates that it will likely be able to effect only one business combination, due primarily to our limited financing, and the dilution of interest for present and prospective stockholders, which is likely to occur as a result of our management’s plan to offer a controlling interest to a target business in order to achieve a tax free reorganization. This lack of diversification should be considered a substantial risk in investing in us, because it will not permit us to offset potential losses from one venture against gains from another.
 
We anticipate that the selection of a business combination will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, our management believes that there are numerous firms seeking even the limited additional capital which we will have and/or the perceived benefits of becoming a publicly traded corporation. Such perceived benefits include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.
 
NuState Energy Holdings, Inc.
RESULTS OF OPERATIONS
 
   
Three-month period ended
March 31,
   
Increase/
(Decrease)
in $ 2013
   
Increase/
(Decrease)
in % 2013
   
Nine-month period ended
March 31,
   
Increase/
(Decrease)
in $ 2013
   
Increase/
(Decrease)
in % 2013
 
   
2013
   
2012
   
vs 2012
   
vs 2012
   
2013
   
2012
   
vs 2012
   
vs 2012
 
                                                 
                                                 
Operating expenses:
                                               
Selling, general and administrative
    95,550       139,598       (44,048 )     -31.6 %     320,535       556,759       (236,224 )     -42.4 %
Total operating expenses
    95,550       139,598       (44,048 )     -31.6 %     320,535       556,759       (236,224 )     -42.4 %
                                                                 
Operating loss
    95,550       139,598       (44,048 )     -31.6 %     320,535       556,759       (236,224 )     -42.4 %
                                                                 
Other expense:
                                                               
Decrease in fair value of derivative liabilities
    -       26,606       (26,606 )     -100.0 %     5,556       87,197       (81,641 )     -93.6 %
Interest expense
    (113,619 )     (101,290 )     12,329       12.2 %     (233,847 )     (279,023 )     (45,176 )     -16.2 %
      (113,619 )     (74,684 )     38,935       -52.1 %     (228,291 )     (191,826 )     36,465       -19.0 %
                                                                 
Net loss from continuing operations
    (209,169 )     (214,282 )     (5,113 )     2.4 %     (548,826 )     (748,585 )     (199,759 )     26.7 %
                                                                 
Discontinued operations:
                                                               
Gain on extinguishment of debt
    -       -       -    
NM
      1,494,406       -       1,494,406    
NM
 
Net income from discontinued operations
    -       -       -    
NM
      1,494,406       -       1,494,406    
NM
 
                                                                 
Net (loss) income
    (209,169 )     (214,282 )     5,113       -2.4 %     945,580       (748,585 )     1,694,165       -226.3 %
 
NM: Not meaningful
 
 
9

 
 
Selling, General, and Administrative Expenses
 
Selling, general, and administrative expenses primarily consist of compensation to officers, legal and professional fees, and consulting fees.
 
The decrease in selling, general and administrative expenses during the three and nine-month periods ended March 31, 2013, when compared with the prior year periods, is primarily due to the following:
 
 
·
During fiscal 2012, the consulting agreements with two related parties expired. Those contracts were not renewed during the nine-month period ended March 31, 2013, resulting in lower consulting fees during the period;
 
·
This decrease was offset slightly by an increase in legal and professional fees related to the filing of our registration statement and the bankruptcy filing of our former subsidiaries, CXT and P2SI.
 
Gain on Extinguishment of Debt
Gain on extinguishment of debt consists of a gain on extinguishment of discontinued of $1,494,406, which resulted from the deconsolidation of our two subsidiaries which filed for bankruptcy during the nine-month period ended March 31, 2013.
 
Decrease in Fair Value of Derivative Liabilities
Decrease in fair value of derivative liabilities results from the changes in the fair value of the derivative liability due to the application of ASC 815, resulting in either income or expense, depending on the difference in fair value of the derivative liabilities between their measurement dates. The decrease in fair value of derivative liabilities recognized during the nine-month period ended March 31, 2013 is primarily due to the setting of a conversion price floor on all outstanding convertible notes payable convertible at a variable rate. The decrease in fair value of derivative liabilities recognized during the nine-month period ended March 31, 2012 is primarily due to an increase of our common stock quoted price between measurement dates and during such periods, respectively. Our common stock quoted price is one of the primary assumptions used in the computation of our derivative liabilities.
 
Interest Expense
Interest expense represents stated interest of notes and convertible notes payable as well as amortization of debt discount. The increase in interest expense during the three-month period ended March 31, 2013 is primarily due to the $50,000 increase in a certain promissory note recognized as interest expense. The decrease in interest expense during the nine-month period ended March 31, 2013 is primarily due to lower amortization of debt discount during the nine-month period ended March 31, 2013, when compared to the prior year period. The decrease is primarily due to the issuance of $150,000 in convertible notes payable during fiscal 2011 with embedded conversion features amounting to approximately $107,000, all of which was amortized prior to the nine-month period ended March 31, 2013. The embedded conversion features were accounted for as debt discount and amortized over the terms of the related convertible notes, which ranged between 6 and 12 months.
 
Results of Operations for the Year ended June 30, 2012 as compared to the Year ended June 30, 2011
 
NuState Energy Holdings, Inc.
RESULTS OF OPERATIONS
 
   
Year ended
June 30,
   
Increase/
(Decrease)
in $ 2012
   
Increase/
(Decrease)
in % 2012
 
   
2012
   
2011
   
vs 2011
   
vs 2011
 
                         
Operating expenses:
                       
Selling, general and administrative
    1,042,144       372,189       669,955       180.0 %
Total operating expenses
    1,042,144       372,189       669,955       180.0 %
                                 
Operating loss
    1,042,144       372,189       669,955       180.0 %
                                 
Other expense:
                               
Decrease in fair value of derivative liabilities
    26,086       14,733       11,353    
NM
 
Interest expense
    (307,337 )     (223,572 )     (83,765 )     37.5 %
      (281,251 )     (208,839 )     (72,412 )     34.7 %
                                 
Net loss
    (1,323,395 )     (581,028 )     (742,367 )     127.8 %
 
NM: Not meaningful
 
 
10

 
 
Selling, General, and Administrative Expenses
 
Selling, general, and administrative expenses primarily consist of compensation to officers, legal and professional fees, and consulting fees.
 
The increase in selling, general and administrative expenses during fiscal 2012, when compared with the prior year, is primarily due to the following:
 
 
·
During fiscal 2012, we hired an interim Chief Operating Officer with an annual compensation of $120,000. The interim chief operating officer provided services for 12 months during fiscal 2012. We did not have an interim Chief Operating Officer during fiscal 2011. Additionally, a Chairman of the Board’s employment agreement which provides for an annual compensation of $240,000 was effective for 12 months during fiscal 2012 and 8 months during fiscal 2011. During 4 months of fiscal 2011, we suspended this employment agreement due to lack of corporate activity;
 
·
The increase in compensation was primarily due to finding an acquisition target for our company, time devoted to legal matters, and the preparatory work for this registration statement;
 
·
The increase in legal fees during fiscal 2012 was primarily from the legal resources we had to devote to settling certain claims from certain vendors and one of our former officers. The settlement occurred in October 2011;
 
·
Additionally, our professional fees during fiscal 2012 increased primarily as a result of the preparation and the audit of our financial statements in anticipation of this registration statement. No such resources were devoted to this project during fiscal 2011.
 
Decrease in Fair Value of Derivative Liabilities
Decrease in fair value of derivative liabilities results from the changes in the fair value of the derivative liability due to the application of ASC 815, resulting in either income or expense, depending on the difference in fair value of the derivative liabilities between their measurement dates. The decrease in fair value of derivative liabilities recognized during fiscal 2012 and 2011 is primarily due to an increase of our common stock quoted price between measurement dates and during such periods, respectively. Our common stock quoted price is one of the primary assumptions used in the computation of our derivative liabilities.
 
Interest Expense
Interest expense represents stated interest of notes and convertible notes payable as well as amortization of debt discount. The increase in interest expense is primarily due to higher amortization of debt discount during fiscal 2011 and 2012. The increase is primarily due to the issuance of $237,000 and $150,000 in convertible notes payable during fiscal 2012 and 2011, respectively, with embedded conversion features amounting to approximately $90,000 and $107,000, respectively, of which approximately $159,000 and $33,000 was amortized during fiscal 2012 and 2011, respectively. The embedded conversion features were accounted for as debt discount and amortized over the terms of the related convertible notes, which ranged between 6 and 12 months. Additionally, interest expense increased due to higher weighted average interest bearing debt during fiscal 2012 when compared to the prior year.
 
 
11

 
 
Liquidity and Capital Resources
 
   
Ending balance at
March 31,
   
Average balance during
nine-months ended March 31,
 
   
2013
   
2012
   
2013
   
2012
 
Cash
  $ 2,513     $ 1,012     $ 1,763     $ 6,954  
                                 
Accounts payable and accrued expenses
    394,741       338,113       366,427       461,175  
Notes and convertible notes payable and accrued  interest, excluding debt discount
    3,193,028       1,787,552       2,490,290       2,075,971  
 
At March 31, 2013 and 2012, 100% of our total assets consisted of cash and cash equivalents.
 
We do not have any material commitments for capital expenditures.
 
The objective of liquidity management is to ensure that we have ready access to sufficient funds to meet commitments and effectively implement our growth strategy. Our primary sources are financing activities such as the issuance of notes payable and convertible notes payable. In the past, we have mostly relied on debt and equity financing to provide for our operating needs.
 
Our other receivable consisted of a judgment in favor of the Company. We do not expect that other receivables will be a significant source of liquidity for the foreseeable future.
 
We are unable to generate sufficient funds from operations to fund our ongoing operating requirements through June 30, 2013. As of June 11, 2013 we had less than $1,000 on hand . We will need to raise funds to enhance our working capital and use them for strategic purposes. We intend to generate proceeds from either debt or equity financing.
 
We intend to finance our operations using a mix of equity and debt financing. We do not anticipate incurring capital expenditures for the foreseeable future. We anticipate that we will need to raise approximately $180,000 per year in the near term to finance the recurring costs of being a publicly-traded company, $564,000 to continue operations, and $120,000 to implement a plan of operations, with additional funding necessary to pay our outstanding obligations of approximately $4.5 million as of March 31, 2013. In the long-term, we anticipate we will need to raise a substantial amount of capital to complete an acquisition. We are unable to quantify the resources we will need to successfully complete an acquisition. If these funds cannot be obtained, we may not be able to consummate an acquisition or merger, and our business may fail as a result.
 
Going Concern
The accompanying financial statements have been prepared on a going concern basis. The Company has used net cash in its operating activities of approximately $122,000 and $250,000 during the nine-month period ended March 31, 2013 and the year ended June 30, 2012, respectively, and has a working capital deficit of approximately $4.5 million and $6.2 million at March 31, 2013 and December 31, 2012, respectively. The Company's ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, to fund possible future acquisitions, and to generate profitable operations in the future, once a merger with an  operating company is consummated. Management plans may continue to provide for its capital requirements by issuing additional equity securities and debt and the Company will continue to find possible acquisition target. The outcome of these matters cannot be predicted at this time and there are no assurances that if achieved, the Company will have sufficient funds to execute its business plan or generate positive operating results.
 
 
12

 
 
   
Nine-Month Periods Ended
March 31,
 
   
2013
   
2012
 
Cash flows from operating activities
           
             
Net loss from continuing operations
  $ (548,826 )   $ (748,585 )
Non-cash adjustments
               
Amortization of debt discount
    3,712       130,597  
Decrease in fair value of derivative liability
    (5,556 )     (87,197 )
Other
    -       11,500  
                 
Changes in assets and liabilities
               
Other receivable
    -       315,000  
Accrued interest
    230,136       148,426  
Accrued compensation
    192,000       172,500  
Other
    6,037       (114,125 )
Net cash provided by (used in) continuing operations
    (122,497 )     (171,884 )
                 
Cash flows from investing activities
               
Proceeds from issuance of common stock
    70,000       -  
Proceeds from issuance of convertible notes payable
    55,000       160,000  
      125,000       160,000  
                 
Net variation in cash
  $ 2,503     $ (11,884 )
 
Nine months ended March 31, 2013
 
The increase in accrued compensation during the nine-month period ended March 31, 2012 is primarily due to slower payments to our officers resulting from a lack of resources to pay such payables timely, offset by the forfeiture of $282,000 in compensation by one of our officers and the satisfaction of $150,000 to the same officer through the cashless exercise of stock options. The increase in accrued interest during the nine-month period ended March 31, 2013 is primarily attributable to the issuance of interest-bearing convertible notes payable during the prior year.
 
Cash generated from financing activities consists of proceeds of $55,000 from the issuance of convertible notes payable and proceeds of $70,000 from the issuance of common stock during the nine-month period.
 
The decrease in cash flows used in operating activities during the nine-month period ended March 31, 2013, when compared to the prior year period, is primarily due to a decrease in operating expenses and interest expense during the nine-month period ended March 31, 2013.
 
Nine months ended March 31, 2012
 
The increase in accrued interest and accrued compensation during the nine-month period ended March 31, 2012 resulted primarily from our lack of financial resources to pay such payables.
 
Cash provided by financing activities consisted of proceeds of $160,000 from the issuance of convertible notes payable during the nine-month period.
 
Cash used in operating activities during the nine-month period ended March 31, 2012 is due primarily to higher operating expenses and interest expense, offset by the collection of our other receivable.
 
 
Year ended June 30, 2012
                       
Sources of liquidity and capital resources
                       
   
Ending balance at
June 30,
       
Average balance during
 
   
2012
   
2011
   
2012
   
2011
 
Cash
  $ 10     $ 12,896     $ 6,453     $ 6,466  
Other receivable
    -       315,000       157,500       315,000  
Notes and convertible notes payable, excluding debt discount
    2,923,725       2,364,389       2,644,057       1,888,521  
 
 
13

 
 
Year ended June 30, 2012
 
The decrease in other receivable during fiscal 2012 resulted from the receipt of settlement during the period. The decrease in accounts payable during fiscal 2012 is primarily due to the payment of certain liabilities related to such settlement, which were paid upon receipt of the proceeds. Additionally, certain liabilities were satisfied by the issuance of notes payable of $132,000. The increase in accrued interest during fiscal 2012 is primarily attributable to the issuance of interest-bearing convertible notes payable during the year. The increase in accrued compensation during fiscal 2012 is primarily due to slower payments to our officers resulting from a lack of resources to pay such payables timely.
 
Cash generated from financing activities consists of proceeds of $237,000 from the issuance of convertible notes payable during the year.
 
Year ended June 30, 2011
 
The increase in accrued interest and accrued compensation during fiscal 2011 resulted primarily from our lack of financial resources to pay such payables.
 
Cash provided by financing activities consisted of proceeds of $150,000 from the issuance of convertible notes payable during the year
 
Obligations under Material Contracts
 
None.
 
Seasonality
None.
 
Inflation
None.
 
Critical Accounting Policies and Significant Estimates
The SEC recently issued proposed guidance for disclosure of critical accounting policies and estimates. The Company’s most critical accounting policies relate to derivative liabilities. The SEC defines “critical accounting estimates” as those that require application of management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain and may change in subsequent periods.
 
The Company’s critical accounting policies are as follows:
 
Convertible Instruments - The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with ASC 815.
 
ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments in accordance with EITF 00-19. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provide an exception to this rule when the host instrument is deemed to be conventional (as that term is described).
 
The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with the provisions of ASC 470 20 “Debt with Conversion Options” Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note.
 
 
14

 
 
The Company believes the certain conversion features embedded in convertible notes payable are not clearly and closely related to the economic characteristics of the Company’s stock price. Accordingly, the Company has recognized derivative liabilities in connection with such instruments. The Company uses judgment in determining the fair value of derivative liabilities at the date of issuance at every balance sheet thereafter. The Company uses judgment in determining which valuation is most appropriate for the instrument (e.g., Black Scholes), the expected volatility, the implied risk free interest rate, as well as the expected dividend rate.
 
Recently Issued Accounting Pronouncements
 
Recent accounting pronouncements have been issued but deemed by management to be outside the scope of relevance to the Company.
 
Off Balance Sheet Arrangements
 
We do not have any obligations that are not reflected on our balance sheet.
 
Item 3. Properties
 
We rent our principal executive offices from an unrelated third party on a month-to-month basis for a monthly rental of $350.
 
Item 4. Security Ownership of Certain Beneficial Owners and Management
 
The following table sets forth information available to us as of June 11, 2013 with respect to the beneficial ownership of the outstanding shares of each class of our voting stock by:
 
 
each person who is the beneficial owner of more than 5% of the outstanding shares of any class of voting stock;
 
each director
 
each executive officer; and
 
all executive officers and directors as a group.
 
Unless otherwise indicated, the business address of each person listed is in care of 1201 Main St., Suite 1980, Columbia, SC 29201. We believe that all persons named in the table have sole voting and investment power with respect to all shares beneficially owned by them. Under securities laws, a person is considered to be the beneficial owner of securities he owns and that can be acquired by him within 60 days from June 11, 2013 upon the exercise of options, warrants, convertible securities or other understandings. We determine a beneficial owner's percentage ownership by assuming that options, warrants or convertible securities that are held by him, but not those held by any other person and which are exercisable within 60 days of June 11, 2013, have been exercised or converted.
 
Name of Beneficial Owner
 
Amount and Nature of
Beneficial Ownership
   
% of Class
   
% Voting
Control (1)
 
Common Stock:
                 
Kevin Yates (2)
    115,000,000       22.6 %     22.0 %
All officers and directors as a group
    115,000,000       22.6 %     22.0 %
(one person)
                       
The Amber Capital Fund Ltd (3)
    48,298,613       9.0 %     9.3 %
Carmelo Luppino (4)
    70,776,289       13.1 %     13.6 %
Michael Garnick (5)
    42,107,759       8.3 %     8.1 %
Arthur Notini (6)
    35,683,678       6.8 %     6.8 %
Harvey Altholtz (7)
    39,420,000       7.6 %     7.6 %
                         
                         
Robert F. Green, Jr. (8)
    28,015,422       5.5 %     5.4 %
Elisha Cheung (9)
    27,970,738       5.4 %     5.4 %
Frank Reilly (10)
    51,360,666       10.2 %     9.8 %
                         
Series Y Convertible Preferred Stock:
                       
Kevin Yates
    -       *       *  
All officers and directors as a group
    -       *       *  
(one person)
                       
Richard Hersh
    87,000       100 %     3.3 %
                         
Total
    458,720,565               91.23 %
 
 
15

 
 
 
*
represents less than 1%
 
 
1
Percent of Voting Control is based upon the number of issued and outstanding shares of our common stock and our Series Y Convertible Preferred Stock on April 30, 2013. On that date we had 504,383,202 outstanding shares of common stock with one vote per share and 87,000 shares of Series Y Convertible Preferred Stock with 200 votes per share for an aggregate of 521,783,202 votes.
 
2
Mr. Yates is the control person of Mobile Software Team, LLC. His beneficial ownership related to Mobile Software Team, LLC includes 5,000,000 shares underlying a warrant exercisable at $0.005 per share that expires on September 1, 2014.
 
3
Michael B. Collins is a control person of The Amber Capital Fund Ltd. which is located at 5 Park Road, Hamilton, Bermuda HM09. Its beneficial ownership includes:
 
§
3,000,000 shares underlying a warrant exercisable at $0.025 per share that expires on May 15, 2015,
 
§
21,000,000 shares underlying $55,000 of 12% unsecured convertible notes, a $15,000 10% convertible debenture, a $25,000 18% unsecured convertible note, and a $25,000 12% unsecured convertible note all of which convert at $0.005 per share,
 
§
5,500,000 shares underlying warrants issuable upon conversion of $55,000 of unsecured convertible notes at $0.025 per share that expires on the three-year anniversary of the notes conversion dates, and
 
§
1,500,000 shares underlying a $15,000 convertible debenture at a conversion price of $0.01 per share based on 50% of the average closing price per share for the ten trading days immediately prior to the date the Company receives a notice of conversion from the investor, which in no event may be less than $0.01.
 
4
Mr. Luppino’s address is 77 Sheather Road, Mt. Kisko, New York 10549. Mr. Luppino is the control person of Luppino Landscaping & Masonry, LLC. His beneficial ownership includes:
 
§
1,000,000 shares of common stock underlying a warrant exercisable at $0.025 per share that expires on November 1, 2014,
 
§
1,500,000 shares of common stock underlying a warrant exercisable at $0.025 per share that expires on March 5, 2015.
 
§
6,550,000 shares of common stock underlying a warrant exercisable at $0.025 per share that expires on May 25, 2015,
 
§
19,000,000 shares underlying $95,000 of 12% unsecured convertible notes that convert at $0.005 per share, and
 
§
2,500,000 shares underlying a warrant issuable upon conversion of $20,000 of a 12% unsecured convertible note that is exercisable at $0.025 per share and expires on the three-year anniversary of the note conversion date.
 
§
In addition, his beneficial ownership related to Luppino Landscaping & Masonry, LLC includes:
 
§
666,667 shares underlying a warrant exercisable at $0.025 per share that expires on May 15, 2015
 
§
4,000,000 shares underlying a $20,000 12%, unsecured convertible note that converts at $0.005 per share and
 
§
2,000,000 shares underlying warrants issuable upon conversion of a $20,000 12% unsecured convertible note exercisable at $0.025 per share that expires on the three-year anniversary of the note conversion date.
 
5
Mr. Garnick’s address is 1590 Stockton Road, Meadowbrook, Pennsylvania 19046.  Mr. Garnick’s beneficial ownership includes:
 
·
3,333,333 shares underlying a $50,000 16% convertible note that converts at $0.015 per share.
 
6
Mr. Notini’s address is 1055 Mammoth Road, Dracut, Massachusetts 01826. His beneficial ownership includes:
 
§
4,333,333 shares underlying a warrant exercisable at $0.025 per share that expires on May 25, 2015,
 
§
2,000,000 shares underlying a warrant issuable upon conversion of $20,000 of 12% unsecured convertible notes that are exercisable at $0.025 per share and expire on the three-year anniversary of the notes conversion dates,
 
§
11,000,000 shares underlying a $25,000 18% unsecured convertible note and $30,000 of 12% unsecured convertible notes all of which are convertible at $0.005 per share,
 
§
1,666,700 shares underlying $16,667 of convertible debentures at a conversion price of $0.01 per share based on 50% of the average closing price of our common stock for the ten trading days immediately preceding the date the Company receives a notice of conversion from Investor but in no event less than $0.01 per share,
 
§
2,000,000 shares underlying 10 shares of Series F preferred stock costing an aggregate of $50,000 that are convertible at $0.025 per share and
 
§
33,200 shares underlying 332 shares of Series C preferred stock costing an aggregate of $9,960 that are convertible at $0.30 per share.
 
7
Mr. Harvey Altholtz is the General Partner of Wealth Strategy Partners LLP which is the General Partner of the Adamas Fund, LLLP. Wealth Strategy Partners LLP is located at 1800 Second St., Suite 758,      Sarasota, Florida 34236. Its beneficial ownership includes 15,000,000 shares of common stock underlying 30,000 shares of Series I preferred stock convertible at 500 common shares per preferred share.
 
 
16

 
 
 
8
Mr. Green’s address is 607 Dwyer Avenue, Arlington Heights, Illinois 60005. His beneficial ownership includes:
 
500,000 shares underlying a warrant exercisable at $0.025 per share that expires on November 1, 2014,
 
783,333 shares underlying a warrant exercisable at $0.025 per share that expires on May 25, 2015 and
 
2,400,000 shares underlying a $12,000 12% unsecured convertible note that converts at $0.025 per share.
 
9
Mr. Cheung’s address is 11709 Shadow Drive, Dublin, California 94568. His beneficial ownership includes:
 
·
1,500,000 shares underlying a warrant issuable upon conversion of $15,000 of 12% unsecured convertible notes that are exercisable at $0.025 per share and expires on the three-year anniversary of the note conversion date and
 
·
10,000,000 shares underlying $25,000 of an 18% unsecured convertible note and $25,000 of 12% unsecured convertible notes all of which are convertible at $0.005 per share.
 
10
Mr. Reilly’s beneficial ownership includes:
 
120,000 shares of common stock underlying a warrant exercisable at $0.025 per share which expires on May 25, 2015.
 
 
17

 
 
Item 5. Directors and Executive Officers
 
All directors of our company hold office until the next annual meeting of the security holders or until their successors have been elected and qualified. The officers of our company are appointed by our board of directors and hold office until their death, resignation or removal from office. Our directors and executive officers, their ages, positions held, and duration as such, are as follows:
 
Name
Position
Age
Date First Elected or Appointed
Mr. Kevin Yates
Chairman of the Board of Director
47
April, 2010
       
 
Chief Executive Officer
 
July, 2010
 
Business Experience
Mr. Kevin Yates has served as Chairman of the Company’s Board of Directors since April 2010 and as the Company’s Chief Executive Officer, Treasurer and Secretary since July 2010. Mr. Yates formally served as Chief Operating Officer of the company in 2006-2007.
 
For the past eight years, Mr. Yates has served as President and Director of PocketMD. Mr. Yates has also served as Director of Mobile Software Team, LLC from August 2008 through July 2012, and C3I  Services, LLC from July 2012 to present.
 
Mr. Yates’ devotes approximately 90% of his time to the business and affairs of our company. Mr. Yates experience in working with public companies’ operational strategy and market plan makes him an asset to the Company.
 
There are no family relationships among our directors or executive officers.
 
Item 6. Executive Compensation
 
Summary Compensation Table
The following table summarizes all compensation recorded by us in the two completed fiscal years for:
 
a.
our principal executive officer or other individual serving in a similar capacity;
 
b.
our two most highly compensated executive officers other than our principal executive officer who were serving as executive officers at June 30, 2012 as that term is defined under Rule 3b-7 of the Securities Exchange Act of 1934; and
 
c.
up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as an executive officer at June 30, 2012.
 
Summary Compensation Table
 
Name and principal position
Year
 
Salary
($)
   
Other Compensation ($)
   
Stock
Awards
($)
   
Option
Awards
($)
   
Total
($)
 
CEO
2011
  $ 9,500     $ 36,000 (1)     N/A       N/A     $ 45,500  
Kevin Yates, Chairman of the Board
                                         
CEO
2012
  $ 1,500     $ 164,400 (1)     N/A       N/A     $ 165,900  
Kevin Yates, Chairman of the Board
                                         
                                           
Interim COO
                                         
Will Williams
2012
  $ 120,000       N/A       N/A     $ 5,000 (2)   $ 125,000  
 
 
1.
Other compensation for Mr. Yates during fiscal 2011 and 2012 represented funds paid to Mobile Software Team, LLC and C3I Services, LLC, related parties by means of common ownership and management to the Company during fiscal 2012 and 2011. The related parties provided assistance to Mr. Yates in his duties.
 
2.
Option awards for Mr. Williams during fiscal 2012 represented 5,000,000 warrants to purchase our Common Stock  with an aggregate grant date fair value of $5,000, calculated in accordance with FASB ASC Topic 718. The assumptions made in the calculation of the fair value of these warrants are disclosed in Note 7: Stockholders’ Deficit in the accompanying Audited Financial Statements as of and for the year ended June 30, 2012 .
 
 
18

 
 
Employment Agreements and Narrative Regarding Executive Compensation
 
Kevin Yates’ employment agreement
 
On May 6, 2010, we entered in an executive employment agreement with Kevin Yates, as our President. The agreement provides for the following, among other things:
 
 
Base annual salary of $240,000;
 
 
Base salary may increase from time to time with the approval of our Compensation Committee;
 
 
Grant of options convertible in 60,000,000 shares of our common stock and exercisable at $0.0025 per share;
 
 
Termination clause: upon death, retirement or permanent disability of Kevin Yates, or at any time by us, or upon thirty-day notice by Kevin Yates
 
 
If the employment is terminated by Kevin Yates for good reason, as defined, or by us, other than for cause, as defined, death, retirement or permanent disability of Kevin Yates, Kevin yates is entitled to two years base salary (currently, the equivalent of $480,000) and unpaid bonuses or incentive compensation, if any.
 
On June 3, 2010, Kevin Yates and the Company suspended the employment agreement for lack of corporate activity. On October 30, 2010, the employment agreement was reinstated. On April 30, 2010, we entered in a consulting agreement with Mobile Software Team, LLC (‘Mobile Software”). Kevin Yates, our Chairman of the Board is also a managing member of Mobile Software. The agreement provides for the following, among other things:
 
 
Base annual consulting fee of $120,000;
 
 
Grant of warrants convertible in 5,000,000 shares of our common stock at an exercise price of $0.005 per share.
 
 
Termination clause: the earliest of April 30, 2012, the date we become a reporting company, or upon 30 day written notice by each party. Mobile Software used proceeds from the consulting agreement to pay certain of our operating expenses.
 
On April 1, 2012, we entered in a consulting agreement with C3I Services, LLC (‘C3I Services”). Kevin Yates, our Chairman of the Board is also a managing member of C3i Services, LLC. The agreement provides for the following, among other things:
 
 
Base annual consulting fee of $120,000;
 
 
Termination clause: the earliest of July 1, 2013, the date we become a reporting company, or upon 30 day written notice by each party. C3I Services used proceeds from the consulting agreement to pay certain of our operating expenses.
 
Will William’s consulting agreement
On July 1, 2011, we entered in a consulting agreement with Williams Global Holdings, LLC. The agreement provided for the following:
 
 
Will Williams would act as the Interim Chief Operating Officer for the duration of the agreement;
 
 
Base annual consulting fee of $120,000;
 
 
Grant of warrants convertible in 5,000,000 shares of our common stock at an exercise price of $0.005 per share.
 
 
Termination clause: the earliest of July 1, 2013, or upon 30 day written notice by each party.
 
The agreement was terminated, effective July 1, 2012.
 
Stock Option Plan
In January 2001, we adopted the 2001 Employee Stock Compensation Plan, or the Plan. The Plan provided for stock compensation through the award of shares of our common stock.
 
Our board of directors could appoint a Compensation Committee of the board of directors to administer the Plan. In the absence of such appointment, the board of directors was responsible for the administration of the Plan. We did not appoint a Compensation Committee to administer the plan. The board of directors had the sole power to award shares of common stock under the Plan, as well as determining those eligible to receive an award of Plan shares. Awards of shares under the Plan may be made as compensation for services rendered, directly or in lieu of other compensation payable, as a bonus in recognition of past service or performance or may be sold to an employee.
 
 
19

 
 
The maximum number of shares which may be awarded under the plan is 5,000,000. Awards were generally granted to:
 
 
executive officers, officers and directors (including advisory and other special directors);
 
full-time and part-time employees;
 
natural persons engaged by us as a consultant, advisor or agent; and;
 
a lawyer, law firm, accountant or accounting firm, or other professional or professional firm engaged by us.
 
Grants to employees may be made for cash, property, services rendered or other form of payment constituting lawful consideration under applicable law. Shares awarded other than for services rendered may not be sold at less than the fair value of our common stock on the date of grant.
 
The plan terminated in January 2011. The board of directors had absolute discretion to amend the plan
 
with the exception that the board had no authority to extend the term of the plan, to increase the number of shares subject to award under the plan or to amend the definition of "Employee" under the plan.
 
Outstanding Equity Awards at Fiscal Year End
The following table provides information concerning unexercised options, stock that has not vested, and equity incentive plan awards for each named executive officer outstanding at June 30, 2012:
 
Option Awards
 
Stock Awards
 
Name
 
Number of securities underlying unexercised options (#) exercisable
   
Number of securities underlying unexercised options (#) unexercisable
   
Equity incentive plan awards: Number of securities underlying unexercised unearned options (#)
   
Option exercise price ($)
 
Option expiration date
 
Number of shares or units of stock that have not vested (#)
   
Market value of shares or units of stock that have not vested ($)
   
Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#)
   
Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested (#)
 
Kevin Yates
    5,000,000  (1)                     0.005  
09/01/14
                               
 
 
1) 
5,000,000 warrants, exercisable at $0.005 per share, expiring in September 2014, issued to Mobile Software Team, a related party by common ownership and management with the Company.
 
Director Compensation
Our Board of Directors is comprised of Mr. Yates, who is also an executive officer of our company, and does not receive any compensation specifically for his Board services.
 
Item 7. Certain Relationships and Related Transactions, and Director Independence
 
Other than compensation arrangements, we describe below transactions, during our last fiscal year, to which we were a party, in which:
 
·
The amounts involved exceeded or will exceed the lesser of $120,000 or 1% of the average of our total assets at year end for the last two completed fiscal years; and
 
·
Any of our directors, executive officers, or holders of more than 5% of our common stock, or any member of the immediate family of the foregoing persons, had or will have a direct or indirect material interest.
 
Consulting Agreements
 
During fiscal 2012 we entered into a consulting agreement with Williams Global Holdings, LLC, managed by Will Williams, our interim chief operating officer. The consulting agreement provided for base annual consulting fees of $120,000 and the grant of 5,000,000 warrants to purchase our common stock, with an exercise price of $0.005 per share and expiring in September 2014. The warrants had a grant date fair value of $5,000. The consulting agreement terminates on the earliest of July 1, 2013, or upon 30 day written notice by each party.
 
During fiscal 2010 we entered into a consulting agreement with Mobile Software Team, LLC, managed by Kevin Yates, our Chairman of the Board. Under this agreement, we incurred $100,000 and $120,000 in annual consulting fees during fiscal 2012 and 2011, respectively. The consulting agreement terminated on April 30, 2012. Mobile Software Team, LLC used proceeds from the consulting agreement to pay certain of our operating expenses.
 
During fiscal 2012 we entered into a consulting agreement with C3I Services, LLC, managed by Kevin Yates, our Chairman of the Board. The consulting agreement provided for base annual consulting fees of $120,000. The consulting agreement terminates on the earliest of July 1, 2013, the date we become a reporting company, or upon 30 days written notice by each party. C3I Services, LLC used proceeds from the consulting agreement to pay certain of our operating expenses.
 
Warrants
 
During fiscal 2012 we issued warrants to purchase 5,000,000 shares of our common stock, with an exercise price of $0.005 per share and expiring in September 2014, to Will Williams, our interim chief operating officer, with a fair value of $5,000.
 
Convertible Notes Payable
 
During fiscal 2012 we issued a $10,000 convertible note payable to Arthur Notini, a holder of more than 5% of our common stock. The convertible note payable matured in April 2013 and is currently past due. The convertible note bears interest at a rate of 12% per annum, payable upon conversion. Interest continues to accrue at 12% per annum monthly until conversion. The convertible note is convertible into shares of our common stock at a rate equal to 80% of the average closing price of our common stock for the 30 trading days immediately preceding the date of conversion. In no event shall the conversion price per share be less than $0.005 or more than $0.10. As of December 31, 2012, $10,814 of principal and accrued interest is outstanding on this convertible note.
 
During fiscal 2012 we issued a $25,000 convertible note payable to Arthur Notini, a holder of more than 5% of our common stock. The convertible note payable matures in December 2013 and bears interest at a rate of 18% per annum, payable upon conversion. The convertible note is convertible into shares of our common stock at a rate equal to the lesser of: 1)80% of the average closing price of our common stock for the 30 trading days immediately preceding the date of conversion, or 2) $0.005. As of December 31, 2012, $29,728 of principal and accrued interest is outstanding on this convertible note.  
 
During fiscal 2012 we issued a $10,000 convertible note payable to Elisha Cheung, a holder of more than 5% of our common stock. The convertible note payable matured in August 2012 and is currently past due. The convertible note bears interest at a rate of 12% per annum, payable upon conversion. Interest continues to accrue at 12% per annum monthly until conversion. The convertible note is convertible into shares of our common stock at a rate equal to the lesser of: 1)20% of the market price of our common stock for the 10 trading days immediately preceding the date of conversion, or 2) $0.005. As of December 31, 2012, $10,820 of principal and accrued interest is outstanding on this convertible note.
 
During fiscal 2012 we issued a $12,000 convertible note payable to Robert Green, Jr., a holder of more than 5% of our common stock. The convertible note payable matured in April 2013 and is currently past due. The convertible note bears interest at a rate of 12% per annum, payable upon conversion. Interest continues to accrue at 12% per annum monthly until conversion. The convertible note is convertible into shares of our common stock at a rate equal to the lesser of: 1)20% of the market price of our common stock for the 10 trading days immediately preceding the date of conversion, or 2) $0.005. As of December 31, 2012, $12,984 of principal and accrued interest is outstanding on this convertible note.
 
During fiscal 2012 we issued two $25,000 convertible notes payable, aggregating $50,000, to The Amber Capital Fund Ltd., a holder of more than 5% of our common stock. The convertible note payable matured in April 2013 and is currently past due. The convertible note bears interest at a rate of 12% per annum, payable upon conversion. Interest continues to accrue at 12% per annum monthly until conversion. The convertible note is convertible into shares of our common stock at a rate equal to 80% of the average closing price of our common stock for the 30 trading days immediately preceding the date of conversion. In no event shall the conversion price per share be less than $0.005 or more than $0.10. As of December 31, 2012, $55,891 of principal and accrued interest is outstanding on these convertible notes.
 
During fiscal 2012 we issued a $25,000 convertible note payable to Carmelo Luppino, a holder of more than 5% of our common stock. The convertible note payable matured in December 2012 and is currently past due. The convertible note bears interest at a rate of 18% per annum, payable upon conversion. The convertible note is convertible into shares of our common stock at a rate equal to the lesser of: 1)80% of the average closing price of our common stock for the 30 trading days immediately preceding the date of conversion, or 2) $0.005. As of December 31, 2012, $28,382 of principal and accrued interest is outstanding on this convertible note.  
 
During fiscal 2012 we issued a $20,000 convertible note payable to Carmelo Luppino, a holder of more than 5% of our common stock. The convertible note payable matured in April 2013 and is currently past due. The convertible note bears interest at a rate of 12% per annum, payable upon conversion. Interest continues to accrue at 12% per annum monthly until conversion. The convertible note is convertible into shares of our common stock at a rate equal to 80% of the average closing price of our common stock for the 30 trading days immediately preceding the date of conversion. In no event shall the conversion price per share be less than $0.005 or more than $0.10. As of December 31, 2012, $21,641 of principal and accrued interest is outstanding on this convertible note.
 
During fiscal 2012 we issued a $25,000 convertible note payable to Elisha Cheung, a holder of more than 5% of our common stock. The convertible note payable matures in December 2013 and bears interest at a rate of 18% per annum, payable upon conversion. The convertible note is convertible into shares of our common stock at a rate equal to the lesser of: 1)80% of the average closing price of our common stock for the 30 trading days immediately preceding the date of conversion, or 2) $0.005. As of December 31, 2012, $29,629 of principal and accrued interest is outstanding on this convertible note.  
 
Common Stock
 
During fiscal 2012 we issued 2,000,000 shares of our common stock to Carmelo Luppino, a holder of more than 5% of our common stock, upon conversion of a $10,000 convertible note payable.
 
 
20

 
 
Director Independence
Our sole director is not considered “independent” within the meaning of meaning of Rule 5605 of the NASDAQ Marketplace Rules.
 
Item 8. Legal Proceedings
 
We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest.
 
Item 9. Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matter
 
Our current market price on OTC Pink was $0.0006 on June 11, 2013.
 
Market Information
Our common shares are quoted on the OTC Pink Quotation System under the symbol “NSEH,” but trade infrequently.
 
The high and low bid prices of our common stock for the periods indicated below are as follows:
 
Quarter Ended
High
Low
March 31, 2013 0.0012  
December 31, 2012
0.0012
0.0005
September 30, 2012
0.0018
0.0005
June 30, 2012
0.0018
0.0007
March 31, 2012
0.0019
0.0005
December 31, 2011
0.0029
0.0003
September 30, 2011
0.0035
0.0007
June 30, 2011
0.0032
0.0011
March 31, 2011
0.0036
0.0016
December 31, 2010
0.0046
0.0011
September 30, 2010
0.006
0.001
 
Holders
As of June 11, 2013 there were 435 shareholders of record.
 
Dividends
We have not paid any cash dividends since 2008 and do not anticipate or contemplate paying dividends in the foreseeable future, with the exception of dividends on our Series B Preferred Shares. It is the present intention of management to utilize all available funds for the development of our business. The holders of Series B Preferred Stock are entitled to receive annual dividends of 10% payable in cash or shares of our common stock, at our option.
 
At March 31, 2013, we have not declared the payment of dividends on the Series B Preferred Stock aggregating approximately $430,100.
 
 
21

 
 
Securities Authorized for Issuance under Equity Compensation Plans.
 
The following table sets forth securities authorized for issuance under any equity compensation plans approved by our stockholders as well as any equity compensation plans not approved by our stockholder as of June 30, 2012.
 
   
Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)
   
Weighted average exercise price of outstanding options, warrants and rights (b)
   
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
 
Plan category
                 
                   
Plans approved by our shareholders:
                 
2012 Employee Stock Compensation Plan
    0       0       0  
Plans not approved by stockholders
    0       0       0  
 
Item 10. Recent Sales of Unregistered Securities
During the three-month period ended December 31, 2009, we issued 2,000,000 shares of our common stock to a consultant for services performed at a fair value of $4,800, or $0.0024 per share. This private transaction is exempt from registration under the Securities Act of 1933 in reliance on exemptions provided by Section 4(2) of that Act.
 
During the three-month period ended December 31, 2009, we issued 2,000,000 shares of our common stock to an accredited investor pursuant to a private placement which generated gross proceeds of $5,000, or $0.0025 per share. This private transaction is exempt from registration under the Securities Act of 1933 in reliance on exemptions provided by Section 4(2) of that Act.
 
During the three-month period ended June 30, 2010, we issued 2,000,000 shares of our common stock to an accredited investor pursuant to a private placement which generated gross proceeds of $5,000, or $0.0025 per share. This private transaction is exempt from registration under the Securities Act of 1933 in reliance on exemptions provided by Section 4(2) of that Act.
 
During the period of November 30, 2010 to August 8, 2011, we issued convertible notes payable to ten accredited investors and one company at a fair value of $200,000. These notes are convertible at a rate equal to 80% of the average closing price of the Common Stock for the 30 trading days immediately preceding the date of conversion. Notwithstanding the foregoing, in no event shall the conversion price per share be less than $0.005 or more than $0.10. The convertible notes mature between August 2011 and May 2012. Upon conversion, these convertible notes payable holders are entitled to 20,000,000 warrants with an exercise price of $0.025 per share, expiring 3 years from the date of conversion. This private transaction is exempt from registration under the Securities Act of 1933 in reliance on exemptions provided by Section 4(2) of that Act.
 
During the three-month period ended December 31, 2011, we issued a convertible note payable to an entity affiliated with the former officer. The note payable is due the earlier of 1) 180 days following our merger with an acquisition candidate or 2) January 1, 2013. If on the due date, the price per share of our common stock is more than $0.05 per share, we have the option to convert such note by issuing shares of our common stock at their then market price. If the obligations under the note are not satisfied by January 1, 2013, the amount payable under the note increases to $150,000. This private transaction is exempt from registration under the Securities Act of 1933 in reliance on exemptions provided by Section 4(2) of that Act.
 
 
22

 
 
During the three-month period ended June 30, 2012, we issued 15,713,960 warrants to four consultants for services performed at a fair value of $103,284, or $0.006 per share. This private transaction is exempt from registration under the Securities Act of 1933 in reliance on exemptions provided by Section 4(2) of that Act.
 
During the three-month period ended June 30, 2012, we issued 15,333,333 warrants to five accredited investors for interest at a fair value of $92,000, or $0.006 per share. This private transaction is exempt from registration under the Securities Act of 1933 in reliance on exemptions provided by Section 4(2) of that Act.
 
During the period of November 14, 2011 to September 30, 2012, we issued convertible notes payable to nine accredited investors at a fair value of $277,000. These notes are convertible at a rate equal to 80% of the average closing price of the Common Stock for the 30 trading days immediately preceding the date of conversion. Notwithstanding the foregoing, in no event shall the conversion price per share be less than $0.005 or more than $0.10. The convertible notes mature between September 2012 and June 2013. Upon conversion, these convertible note payable holders are entitled to 27,700,000 warrants with an exercise price of $0.025 per share, expiring 3 years from the date of conversion. This private transaction is exempt from registration under the Securities Act of 1933 in reliance on exemptions provided by Section 4(2) of that Act.
 
In January 2013, we issued 5,000,000 shares of our common stock to an accredited investor to satisfy accrued compensation at a fair value of $250,000. This private transaction is exempt from registration under the Securities Act of 1933 in reliance on exemptions provided by Section 4(2) of that Act.
 
In April 2013, we issued 50,000,000 shares of our common stock to an officer and director to satisfy accrued compensation at a fair value of $250,000. This private transaction is exempt from registration under the Securities Act of 1933 in reliance on exemptions provided by Section 4(2) of that Act.
 
Item 11. Description of Registrant’s Securities to be Registered
 
General
Our authorized capital stock consists of 750,000,000 shares of common stock at a par value of $0.001 per share and 1,000,000 shares of preferred stock, par value $0.01 per share, issuable in such series, and with such designations, rights and preferences as shall be determined by our Board of Directors from time to time. As of March 31, 2013, we have designated the following series of preferred stock:
 
 
Shares Authorized
Preferred B
200,000
Preferred C
20,000
Preferred D
40
Preferred F
500,000
Preferred G
6
Preferred H
1,600
Preferred I
100,000
Preferred J
80
Preferred Y
87,000
 
Preferred Stock
 
All issued and outstanding shares of the Company's preferred stock has a par value of $0.01 per share and rank prior to any class or series of the Company's common stock as to the distribution of assets upon liquidation, dissolution or winding up of the Company or as to the payment of dividends, except for Series Y Preferred Stock.
 
Series B Preferred Stock
The Series B Preferred Stock has a stated value of $5.00 per share. Each share of Series B preferred Stock is convertible in 20 shares of the Company's common stock. In addition, the holders of the preferred stock are entitled to receive annual dividends of 10% payable in cash or shares of the Company's common stock, at the Company’s option.
 
At March 31, 2013, the Company has not declared the payment of dividends aggregating approximately $411,400.
 
 
23

 
 
Series C Preferred Stock
The Series C Preferred Stock has a stated value of $30.00 per share. Each share of Series C Preferred Stock is convertible in 100 shares of the Company's common stock.
 
Series D Preferred Stock
The Series D Preferred Stock has a stated value of $25,000 per share. Each share of the Series D preferred Stock is convertible in 1,000,000 shares of the Company's common stock. In addition, the holders of the Series D Preferred Stock are entitled to receive a participation interest in the annual net profits generated from any future business activities undertaken by the Company in Brazil.
 
Series F Preferred Stock
The Series F Preferred Stock has a stated value of $5,000 per share. Each share of Series F Preferred Stock is convertible in 200,000 shares of the Company's common stock.
 
Series G Preferred Stock
The Series G Preferred Stock has a stated value of $25,000 per share. Each share of Series G Preferred Stock is convertible in 1,000,000 shares of the Company's common stock. In addition, the holders of the preferred stock are entitled to receive a participation interest in the annual net profits generated from any future business activities undertaken by the Company in Brazil.
 
Series H Preferred Stock
The Series H Preferred Stock has a stated value of $1,000 per share. Each share of Series H Preferred Stock is convertible in 1,000,000 shares of the Company's common stock.
 
Series I Preferred Stock
The Series I Preferred Stock has a stated value of $10.00 per share. Each share of Series I Preferred Stock is convertible into 500 shares of the Company's common stock.
 
During fiscal 2010, the Company and the beneficiary of 70,000 shares of Series I Preferred Stock held in escrow agreed that such beneficiary would return such shares to the Company’s treasury.
 
Series J Preferred Stock
The Series J Preferred Stock has a stated value of $2,500 per share. Each share of the Series J Preferred Stock is convertible into the Company’s common shares using a conversion price equal to 50% of the average closing price of the Company's common stock for the ten trading days immediately preceding the conversion date, although in no instance less than $0.01 per share or greater than $0.03 per share.
 
Series Y Preferred Stock
The Series Y Preferred Stock has a stated value and par value of $.01 and has no liquidity preference. Each share of Series Y Preferred Stock has 200 votes per share and has the right to vote with the common shareholders in all matters. The shares are convertible into 230,405 shares of the Company's common stock at the holder's option. The shares are held by one of the Company’s former Chairman of the Board.
 
Common Stock
Holders of shares of common stock are entitled to one vote for each share on all matters to be voted on by the stockholders. Holders of common stock do not have cumulative voting rights. Holders of common stock are entitled to share ratably in dividends, if any, as may be declared from time to time by the Board of Directors in its discretion from funds legally available therefor. In the event of a liquidation, dissolution or winding up of our company, the holders of common stock are entitled to share pro rata all assets remaining after payment in full of all liabilities. Holders of common stock have no preemptive rights to purchase our common stock. There are no conversion or redemption rights or sinking fund provisions with respect to the common stock
 
 
24

 
 
Item 12. Indemnification of Directors and Officers
 
The Nevada Revised Statutes allows us to indemnify each of our officers and directors who are made a party to a proceeding if:
 
(a) the officer or director conducted himself or herself in good faith;
 
(b) his or her conduct was in our best interests, or if the conduct was not in an official capacity, that the conduct was not opposed to our best interests; and
 
(c) in the case of a criminal proceeding, he or she had no reasonable cause to believe that his or her conduct was unlawful. We may not indemnify our officers or directors in connection with a proceeding by or in our right, where the officer or director was adjudged liable to us, or in any other proceeding, where our officer or director are found to have derived an improper personal benefit.
 
Our by-laws require us to indemnify directors and officers against, to the fullest extent permitted by law, liabilities which they may incur under the circumstances described above.
 
Item 13. Financial Statements and Supplementary Data
 
We set forth below a list of our audited financial statements included in this Registration Statement on Form 10.
 
 
i
Audited Financial Statements of NuState Energy Holdings, Inc. for the year ending June 30, 2012.
 
a
NuState Financials June 30, 2012
 
b
Notes to the Financial Statements June 30, 2012
 
ii
Audited Financial Statements of NuState Energy Holdings, Inc. for the twelve-month period ending June 30, 2011.
 
a
Financials June 30, 2011
 
b
Notes to the Financial Statements June 30, 2011
 
We set forth below a list of our unaudited financial statements included in this Registration Statement on Form 10.
 
 
i
Unaudited Financial Statements of NuState Energy Holdings, Inc. for the period ending March 31, 2013 and 2012.
 
The financial statements follow the signature page to this Registration Statement on Form 10.
 
Item 14. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
 
None.
 
 
25

 
 
Item 15. Financial Statements and Exhibits
 
The financial statements included in this Registration Statement on Form 10 are listed in Item 13 and commence following the signature page to this Registration Statement on Form 10.
 
Exhibit
No.
Description of Exhibit
 
2.1
Merger Agreement Between Jaguar Investments, Inc., Freight Rate, Inc., and Jag2 Corporation (1)
 
2.2
Agreement and Plan of Merger Between Fittipaldi Logistics, Inc. and State Petroleum Distributors, Inc. (30)
 
3.1
Articles of Incorporation (2)
 
3.2
Certificate of Amendment to Articles of Incorporation (3)
   
3.3
Certificate of Amendment to the Articles of Incorporation (4)
 
3.4
Certificate of Voting Powers, Designations, Preferences and Rights to Series B Convertible Preferred Stock (10)
   
3.5
Certificate of Voting Powers, Designations, Preferences and Rights to Series C Convertible Preferred Stock (10)
   
3.6
Certificate of Voting Powers, Designations, Preferences and Rights to Series Y Preferred Stock (5)
 
3.7
Certificate of Correction of Certificate of Voting Powers, Designations, Preferences and Right to Series Y Preferred Stock (5)
 
3.8
Certificate of Amendment to Articles of Incorporation Increasing Authorized Shares of Common Stock to 250,000,000 filed on August 13, 2004 (9)
 
3.9
Certificate of Voting Powers, Designations, Preferences and Rights to Preferred Stock of Series X Convertible Preferred Stock (5)
 
3.10
Bylaws (2)
 
3.11
Amended Bylaws dated March 31, 2003 (5)
 
3.12
Certificate to Set Forth Designations, Preferences and Rights to Series D Convertible Preferred Stock (23)
 
3.13
Certificate to Set Forth Designations, Preferences and Rights to Series E Convertible Preferred Stock (29)
 
3.14
Certificate to Set Forth Designations, Preferences and Rights to Series F Convertible Preferred Stock (29)
 
3.15
Certificate to Set Forth Designations, Preferences and Rights to Series G Convertible Preferred Stock (29)
 
3.16
Certificate to Set Forth Designations, Preferences and Rights to Series H Convertible Preferred Stock (29)
 
3.17
Certificate to Set Forth Designations, Preferences and Rights to Series I Convertible Preferred Stock (29)
   
3.18
Certificate to Set Forth Designations, Preferences and Rights to Series J Convertible Preferred Stock **
 
4.1
Form of Common Stock Purchase Warrant to Newbridge Securities Corporation for Business Advisory Agreement (10)
 
 
26

 
 
4.2
Form of 14.25% secured convertible debenture**
 
4.3
$100,000 principal amount promissory note pursuant to settlement agreement with Stokes Logistics Consulting, LLC**
 
4.4
$100,000 principal amount 8% secured convertible promissory note**
 
4.5
Letter of agreement dated February 8, 2008 evidencing $25,000 principal promissory note to Canberra Financial Services II, Inc**
 
4.6
$14,000 principal 12.5% promissory note for services**
 
4.7
Form of unsecured promissory note**
 
4.8
Form of non-plan option agreement (10)
 
4.9
Form of common stock purchase warrant (10)
 
4.10
Form of Common Stock Purchase Warrant re: 14.25% secured convertible debentures (10)
 
4.11
Form of Common Stock Purchase Warrant issued to Newbridge Securities Corporation as Placement Agent for 14.25% secured convertible debentures (10)
 
4.12
Form of Series C 10% unsecured convertible debenture (20)
 
4.13
Form of Warrant for Series C 10% unsecured convertible debenture offering **
 
4.14
Form of Series D 8% unsecured convertible debenture**
 
4.15
Form of 10% convertible debenture**
 
4.16
Form of Warrant for Series D 8% unsecured convertible debenture (22)
 
4.17
Articles of Merger between Power2Ship, Inc. and Fittipaldi Logistics, Inc. (25)
 
4.18
Form of Term Sheet for Purchase of Outstanding Debentures (Version 2) (28)
 
4.19
Form of Term Sheet for Purchase of Outstanding Debentures (Version 1) (28)
 
4.20
Form of Non-Plan Stock Option Agreement for Employees (29)
   
4.21
Form of Non-Plan Stock Options Agreement for Executives (29)
 
4.22
Articles of Merger between Fittipaldi Logistics, Inc. and NuState Energy Holdings, Inc. (31)
     
4.23
$10,000 principal amount 12% convertible promissory note**
 
4.24
$5,000 principal amount 12% convertible promissory note**
 
4.25
$25,000 principal amount 12% convertible promissory note**
 
4.26
$25,000 principal amount 12% convertible promissory note**
 
4.27
$20,000 principal amount 12% convertible promissory note**
 
4.28
$20,000 principal amount 12% convertible promissory note**
 
4.29
$5,000 principal amount 12% convertible promissory note**
 
4.30
$20,000 principal amount 12% convertible promissory note**
 
4.31
$25,000 principal amount 12% convertible promissory note**
 
4.32
$25,000 principal amount 18% convertible promissory note**
 
4.33
$12,000 principal amount 12% convertible promissory note**
 
4.34
$10,000 principal amount 12% convertible promissory note**
 
4.35
$20,000 principal amount 12% convertible promissory note**
 
4.36
$18,000 principal 12.5% promissory note for services**
 
4.37
$30,000 principal amount 12% convertible promissory note**
 
4.38
$15,000 principal amount 12% convertible promissory note**
 
4.39
$10,000 principal amount 12% convertible promissory note**
 
4.40
$25,000 principal amount 18% convertible promissory note**
 
4.41
$25,000 principal amount 18% convertible promissory note**
 
4.42
$15,000 principal amount 12% convertible promissory note**
 
4.43
$25,000 principal amount 12% convertible promissory note**
   
4.44
$10,000 principal amount 12% convertible promissory note**
   
4.45 $25,000 principal amount 12% convertible promissory note**
   
4.46 $10,000 principal amount 12% convertible promissory note**
 
10.1
Securities Purchase Agreement (6)
   
10.2
Investor Registration Rights Agreement (6)
 
10.3
2001 Employee Stock Compensation Plan (3)
 
10.4
Employment Agreement with Richard Hersh (8)
 
10.5
Form of Intellectual Property Assignment Agreement between Power2Ship, Inc. and each of Richard Hersh, Michael J. Darden and John Urbanowicz (10)
 
10.6
Security Agreements for 14.25% secured convertible debentures (10)
   
10.7
Registration Rights Agreement for 14.25% secured convertible debentures (10)
 
10.8
Asset Purchase Agreement with GFC, Inc. (14)
 
10.9
Mutual Agreement with Commodity Express Transportation, Inc. (15)
   
10.10
Asset Purchase Agreement with GFC, Inc. (16)
   
10.11
Form of Unsecured Promissory Note (13)
   
10.12
Separation and Severance Agreement with Richard Hersh (23)
 
 
27

 
 
10.13
Consulting Agreement with Richard Hersh (23)
 
10.14
Consulting Agreement with David S. Brooks and S. Kevin Yates (as amended) (23)
 
10.15
Software Transaction Agreement Between NuState Energy Holdings, Inc., Rentar Environmental Solutions, Inc. and the organizers of a new company to be formed (33)
 
10.16
Capital Contribution Agreement Between Rentar Logic, Inc., Rentar Environmental Solutions, Inc. and NuState Energy Holdings, Inc. (33)
 
10.17
Rentar Logic, Inc. Shareholders Agreement (33)
 
10.18
Voting Trust Agreement Between Rentar Logic, Inc., Rentar Environmental Solutions, Inc. and NuState Energy Holdings, Inc. (33)
 
10.19
NuState/Rentar Agreement April 2010**
 
10.20
Employment Agreement with Kevin Yates**
 
10.21
Consulting Agreement with Will Williams**
 
10.22
Consulting Agreement with Mobile Software Team, LLC**
 
10.23
Consulting Agreement with C3i Sports, LLC**
 
14.1
Code of Ethics (11)
 
21.1
Subsidiaries of Registrant (20)
 
 
**
Filed herewith
 
(1)
Incorporated by reference to Current Report on Form 8-K filed on March 26, 2003.
(2)
Incorporated by reference to registration statement on Form 10-SB, as amended.
(3)
Incorporated by reference to definitive Schedule 14C Information Statement filed on February 2, 2001.
(4)
Incorporated by reference to definitive Schedule 14C Information Statement filed on April 22, 2003.
(5)
Incorporated by reference to Annual Report on Form 10-K for the fiscal year ended December 31, 2002.
(6)
Incorporated by reference to Current Report on Form 8-K filed on July 8, 2004.
(7)
Incorporated by reference to Current Report on Form 8-K filed on January 3, 2002.
(8)
Incorporated by reference to Quarterly Report on Form 10-QSB for the period ended March 31, 2003.
(9)
Incorporated by reference to Preliminary Information Statement on Schedule 14C filed on July 8, 2004.
(10)
Incorporated by reference to registration statement on Form SB-2, SEC File No. 333-118792, filed on September 3, 2004.
(11)
Incorporated by reference to Amendment No. 1 to registration statement the Form SB-2, SEC File No. 333-118792, filed on October 20, 2004.
(12)
Incorporated by reference to Amendment No. 3 to the registration statement on Form SB-2, SEC File No. 333-118792, filed on December 15, 2004.
(13)
Incorporated by reference to Quarterly Report on Form 10-QSB for the period ended December 31, 2004 filed on February 14, 2005.
(14)
Incorporated by reference to Current Report on Form 8-K/A filed on February 25, 2005.
(15)
Incorporated by reference to Current Report on Form 8-K filed on March 25, 2005.
(16)
Incorporated by reference to Current Report on Form 8-K filed on March 28, 2005.
(17)
Incorporated by reference to Quarterly Report on Form 10-QSB for the period ended March 31, 2005.
(18)
Incorporated by reference to Current Report on Form 8-K filed on June 3, 2005.
(19)
Incorporated by reference to Current Report on Form 8-K filed on July 28, 2005.
 
 
28

 
 
(20)
Incorporated by reference to registration statement on Form SB-2, SEC File No. 333-131832 filed on February 14, 2006.
(21)
Incorporated by reference to Current Report on Form 8-K filed on February 17, 2006.
(22)
Incorporated by reference to Amendment No. 1 to registration statement the Form SB-2, SEC File No. 333-131832 filed on May 5, 2006.
(23)
Incorporated by reference to Annual Report on Form 10-K for the fiscal year ended June 30, 2006 filed on October 13, 2006.
(24)
Incorporated by reference to Current Report on Form 8-K filed on October 17, 2006.
(25)
Incorporated by reference to Current Report on Form 8-K filed on October 24, 2006.
(26)
Incorporated by reference to Current Report on Form 8-K filed on January 26, 2007.
(27)
Incorporated by reference to Current Report on Form 8-K filed on April 30, 2007.
(28)
Incorporated by reference to Current Report on Form 8-K filed on July 25, 2007.
(29)
Incorporated by reference to Annual Report on Form 10-KSB filed on October 15, 2007.
(30)
Incorporated by reference to Current Report on Form 8-K filed on November 15, 2007.
(31)
Incorporated by reference to Current Report on Form 8-K filed on December 31, 2007.
(32)
Incorporated by reference to Current Report on Form 8-K filed on March 25, 2008.
(33)
Incorporated by reference to Current Report on Form 8-K filed on June 13, 2008.
(34)
Incorporated by reference to Current Report on Form 8-K filed on October 16, 2008.
 
 
29

 
 
Signatures
 
Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly cased this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
NuState Energy Holdings, Inc.
 
       
Date: June 14, 2013
     
       
 
By:
/s/ Kevin Yates  
   
Kevin Yates, Chief Executive Officer
 
 
 
30

 
 
TABLE OF CONTENTS
 
   
Reports of Independent Registered Public Accounting Firms
F-1
   
Financial Statements:
 
   
Consolidated Balance Sheets
F-2
   
Consolidated Statements of Operations
F-3
   
Consolidated Statements of Changes in Shareholders' Equity (Deficit)
F-4
   
Consolidated Statements of Cash Flows
F-5
   
Notes to Consolidated Financial Statements
F-6
 
 
i
Audited Financial Statements of NuState Energy Holdings, Inc. for the year ending June 30, 2012.
 
a
NuState Financials June 30, 2012
 
b
Notes to the Financial Statements June 30, 2012
 
ii
Audited Financial Statements of NuState Energy Holdings, Inc. for the twelve-month period ending June 30, 2011.
 
a
Financials June 30, 2011
 
b
Notes to the Financial Statements June 30, 2011
 
i
Unaudited Financial Statements of NuState Energy Holdings, Inc. for the quarter ending March 31, 2013 and 2012.
 
 
31

 
 
7900 Glades Rd, Suite 540,
Boca Raton, FL 33434
Tel: 561-886-4200
Fax: 561-886-3330
e-mail: info@sherbcpa.com
Offices in New York and Florida
Certified Public Accountants
 
To the Board of Directors and
 
Stockholders of Nustate Energy Holdings, Inc.
 
We have audited the accompanying balance sheets of Nustate Energy Holdings, Inc. as of June 30, 2012 and 2011, and the related statements of income, comprehensive income, stockholders’ deficit, and cash flows for each of the years in the two year period ended June 30, 2012. Nustate Energy Holdings, Inc. management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.
 
We conducted our audits 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 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 also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Nustate Energy Holdings, Inc. as of June 30, 2012 and 2011, and the results of its operations and its cash flows for each of the years in the two years period ended June 30, 2012 in conformity with accounting principles generally accepted in the United States of America.
 
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has a net working capital deficiency, a stockholders’ deficiency and an accumulated deficit that raises substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
 

 
Sherb & Co.,LLP
Certificated Public Accountant
 
Boca Raton, Florida
January 11, 2013
 
 
F-1

 

NuState Energy Holdings, Inc.
CONSOLIDATED BALANCE SHEETS
 
ASSETS
 
June 30,
2012
   
June 30,
2011
 
Current Assets:
           
Cash
  $ 10     $ 12,896  
Other receivable
    -       315,000  
Total assets
  $ 10       327,896  
LIABILITIES AND STOCKHOLDERS' DEFICIT
               
Current Liabilities:
               
Accounts payable and accrued expenses
  $ 388,704     $ 584,237  
Accrued compensation
    1,420,400       1,148,500  
Liabilities of discontinued operations
    1,494,406       1,494,406  
Derivative liability
    5,556       92,273  
Notes and Convertible notes payable and accrued interest less unamortized discount
    2,920,013       2,290,660  
Total liabilities
    6,229,079       5,610,076  
Stockholders' Deficit:
               
Preferred stock, $0.001 par value, 2,000,000 shares authorized:
               
Series B, 200,000 shares authorized, 149,600 shares issued and outstanding
    1,496       1,496  
Series C, 20,000 shares authorized, 332 shares issued and outstanding
    3       3  
Series D, 40 shares authorized, 19 shares issued and outstanding
    -       -  
Series F, 500,000 shares authorized, 128 shares issued and outstanding
    1       1  
Series G, 6 shares authorized, -0- issued and outstanding
    -       -  
Series H, 1,600 shares authorized, 70 shares issued and outstanding.
    -       -  
Series I, 100,000 shares authorized, 30,000 shares issued and outstanding
    300       300  
Series J, 80 shares authorized, 2 shares issued and outstanding
    -       -  
Series Y, 87,000 shares authorized, 87,000 shares issued and outstanding
    870       870  
Common stock; $.001 par value; 750,000,000 shares authorized; 327,216,535 and 317,216,535 issued and outstanding
    327,216       317,216  
Additional paid-in capital
    34,562,775       34,121,469  
Accumulated deficit
    (41,121,730 )     (39,723,535 )
Total stockholders’ deficit
    (6,229,069 )     (5,282,180 )
Total liabilities and stockholders’ deficit
  $ 10     $ 327,896  
 
See Notes to Consolidated Financial Statements.
 
 
F-2

 
 
NuState Energy Holdings, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
 
   
For the year ended
 
   
June 30,
2012
   
June 30,
2011
 
Operating expenses:
           
Selling, general and administrative
  $ 1,042,144     $ 372,189  
Total operating expenses
    1,042,144       372,189  
Operating loss
    1,042,144       372,189  
Other expense:
               
Decrease in fair value of derivative liabilities
    26,086       14,733  
Interest expense
    (307,337 )     (223,572 )
      (281,251 )     (208,839 )
Net loss
    (1,323,395 )     (581,028 )
Less dividends Series B Preferred stock
    (74,800 )     (74,800 )
Net loss attributable to common shareholders
  $ (1,398,195 )   $ (655,828 )
Earnings (loss) per share:
               
Basic and diluted
  $ (0.00 )   $ (0.00 )
Basic and diluted weighted average common shares outstanding
    335,126,124       306,880,881  
 
See Notes to Consolidated Financial Statements.
 
 
F-3

 
 
NuState Energy Holdings, Inc.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
From July 1, 2010 to June 30, 2012
 
   
Series B
Prefe rred
Stock
   
Series C
Prefe rred
Stock
   
Series D
Prefe rred
 Stock
   
Series F
Prefe rred
Stock
   
Series H
Prefe rred
Stock
   
Series I
Prefe rred
Stock
   
Series J
Prefe rred
Stock
   
Series Y
Prefe rred
Stock
   
Common
Stock
   
Trea sury
   
Additional
Paid -in
   
Accum ulated
   
Total
Stock holders'
 
   
Sha res
   
$
   
Sha res
   
$
   
Sha res
   
$
   
Sha res
   
$
   
Sha res
   
$
   
Sha res
   
$
   
Sha res
   
$
   
Sha res
   
$
   
Sha res
   
$
   
Sto ck
   
Capital
   
Deficit
   
Deficit
 
Balance, July 1, 2010
    149,600       1,496       332       3       25       -       128       1       70       -       30,000       300       2     $ -       87,000       870       301,313,187       301,313       -       34,010,735       (39,067,707 )     (4,752,989 )
                                                                                                                                                                                 
Conversion of Series D Preferred Stock
    -       -       -       -       (6 )     -       -       -       -       -       -       -       -       -       -       -       6,000,000       6,000       -       (6,000 )     -       -  
Conversion of convertible note payable
    -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       9,903,348       9,903       -       41,934       -       51,837  
Preferred stock dividends
    -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       -       74,800       (74,800 )     -  
Net loss
    -       -       -       -