Form 1-A Issuer Information UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 1-A
REGULATION A OFFERING STATEMENT
UNDER THE SECURITIES ACT OF 1933
OMB APPROVAL

FORM 1-A

OMB Number: 3235-0286


Estimated average burden hours per response: 608.0

1-A: Filer Information

Issuer CIK
0001391426
Issuer CCC
XXXXXXXX
DOS File Number
Offering File Number
Is this a LIVE or TEST Filing? LIVE TEST
Would you like a Return Copy?
Notify via Filing Website only?
Since Last Filing?

Submission Contact Information

Name
Phone
E-Mail Address

1-A: Item 1. Issuer Information

Issuer Infomation

Exact name of issuer as specified in the issuer's charter
Byzen Digital, Inc.
Jurisdiction of Incorporation / Organization
NEVADA
Year of Incorporation
2005
CIK
0001391426
Primary Standard Industrial Classification Code
SERVICES-ENGINEERING SERVICES
I.R.S. Employer Identification Number
85-1449444
Total number of full-time employees
3
Total number of part-time employees
2

Contact Infomation

Address of Principal Executive Offices

Address 1
2711 N. Sepulveda Blvd
Address 2
City
Manhattan Beach
State/Country
CALIFORNIA
Mailing Zip/ Postal Code
90266
Phone
424-835-1845

Provide the following information for the person the Securities and Exchange Commission's staff should call in connection with any pre-qualification review of the offering statement.

Name
David Ficksman
Address 1
Address 2
City
State/Country
Mailing Zip/ Postal Code
Phone

Provide up to two e-mail addresses to which the Securities and Exchange Commission's staff may send any comment letters relating to the offering statement. After qualification of the offering statement, such e-mail addresses are not required to remain active.

Financial Statements

Industry Group (select one) Banking Insurance Other

Use the financial statements for the most recent period contained in this offering statement to provide the following information about the issuer. The following table does not include all of the line items from the financial statements. Long Term Debt would include notes payable, bonds, mortgages, and similar obligations. To determine "Total Revenues" for all companies selecting "Other" for their industry group, refer to Article 5-03(b)(1) of Regulation S-X. For companies selecting "Insurance", refer to Article 7-04 of Regulation S-X for calculation of "Total Revenues" and paragraphs 5 and 7 of Article 7-04 for "Costs and Expenses Applicable to Revenues".

Balance Sheet Information

Cash and Cash Equivalents
$ 740.00
Investment Securities
$ 0.00
Total Investments
$
Accounts and Notes Receivable
$ 0.00
Loans
$
Property, Plant and Equipment (PP&E):
$ 0.00
Property and Equipment
$
Total Assets
$ 20740.00
Accounts Payable and Accrued Liabilities
$ 155024.00
Policy Liabilities and Accruals
$
Deposits
$
Long Term Debt
$ 0.00
Total Liabilities
$ 1684226.00
Total Stockholders' Equity
$ -1663486.00
Total Liabilities and Equity
$ 20740.00

Statement of Comprehensive Income Information

Total Revenues
$ 0.00
Total Interest Income
$
Costs and Expenses Applicable to Revenues
$ 0.00
Total Interest Expenses
$
Depreciation and Amortization
$ 0.00
Net Income
$ -2164653.00
Earnings Per Share - Basic
$ 0.00
Earnings Per Share - Diluted
$ 0.00
Name of Auditor (if any)
NA

Outstanding Securities

Common Equity

Name of Class (if any) Common Equity
Common
Common Equity Units Outstanding
107183131
Common Equity CUSIP (if any):
12465T109
Common Equity Units Name of Trading Center or Quotation Medium (if any)
OTC

Preferred Equity

Preferred Equity Name of Class (if any)
Series A Convertible Preferred
Preferred Equity Units Outstanding
2000000
Preferred Equity CUSIP (if any)
000000000
Preferred Equity Name of Trading Center or Quotation Medium (if any)
NA

Preferred Equity

Preferred Equity Name of Class (if any)
Series B Preferred
Preferred Equity Units Outstanding
2000000
Preferred Equity CUSIP (if any)
000000000
Preferred Equity Name of Trading Center or Quotation Medium (if any)
NA

Preferred Equity

Preferred Equity Name of Class (if any)
Series C Preferred
Preferred Equity Units Outstanding
2000000
Preferred Equity CUSIP (if any)
000000000
Preferred Equity Name of Trading Center or Quotation Medium (if any)
NA

Debt Securities

Debt Securities Name of Class (if any)
NA
Debt Securities Units Outstanding
1069375
Debt Securities CUSIP (if any):
000000000
Debt Securities Name of Trading Center or Quotation Medium (if any)
NA

1-A: Item 2. Issuer Eligibility

Issuer Eligibility

Check this box to certify that all of the following statements are true for the issuer(s)

1-A: Item 3. Application of Rule 262

Application Rule 262

Check this box to certify that, as of the time of this filing, each person described in Rule 262 of Regulation A is either not disqualified under that rule or is disqualified but has received a waiver of such disqualification.

Check this box if "bad actor" disclosure under Rule 262(d) is provided in Part II of the offering statement.

1-A: Item 4. Summary Information Regarding the Offering and Other Current or Proposed Offerings

Summary Infomation

Check the appropriate box to indicate whether you are conducting a Tier 1 or Tier 2 offering Tier1 Tier2
Check the appropriate box to indicate whether the financial statements have been audited Unaudited Audited
Types of Securities Offered in this Offering Statement (select all that apply)
Equity (common or preferred stock)
Does the issuer intend to offer the securities on a delayed or continuous basis pursuant to Rule 251(d)(3)? Yes No
Does the issuer intend this offering to last more than one year? Yes No
Does the issuer intend to price this offering after qualification pursuant to Rule 253(b)? Yes No
Will the issuer be conducting a best efforts offering? Yes No
Has the issuer used solicitation of interest communications in connection with the proposed offering? Yes No
Does the proposed offering involve the resale of securities by affiliates of the issuer? Yes No
Number of securities offered
375000000
Number of securities of that class outstanding
107183131

The information called for by this item below may be omitted if undetermined at the time of filing or submission, except that if a price range has been included in the offering statement, the midpoint of that range must be used to respond. Please refer to Rule 251(a) for the definition of "aggregate offering price" or "aggregate sales" as used in this item. Please leave the field blank if undetermined at this time and include a zero if a particular item is not applicable to the offering.

Price per security
$ 0.1100
The portion of the aggregate offering price attributable to securities being offered on behalf of the issuer
$ 7500000.00
The portion of the aggregate offering price attributable to securities being offered on behalf of selling securityholders
$ 0.00
The portion of the aggregate offering price attributable to all the securities of the issuer sold pursuant to a qualified offering statement within the 12 months before the qualification of this offering statement
$ 0.00
The estimated portion of aggregate sales attributable to securities that may be sold pursuant to any other qualified offering statement concurrently with securities being sold under this offering statement
$ 0.00
Total (the sum of the aggregate offering price and aggregate sales in the four preceding paragraphs)
$ 7500000.00

Anticipated fees in connection with this offering and names of service providers

Underwriters - Name of Service Provider
None
Underwriters - Fees
$ 0.00
Sales Commissions - Name of Service Provider
NA
Sales Commissions - Fee
$ 0.00
Finders' Fees - Name of Service Provider
NA
Finders' Fees - Fees
$ 0.00
Audit - Name of Service Provider
NA
Audit - Fees
$ 0.00
Legal - Name of Service Provider
TroyGould PC
Legal - Fees
$ 30000.00
Promoters - Name of Service Provider
NA
Promoters - Fees
$ 0.00
Blue Sky Compliance - Name of Service Provider
TroyGould PC
Blue Sky Compliance - Fees
$ 5000.00
CRD Number of any broker or dealer listed:
Estimated net proceeds to the issuer
$ 7465000.00
Clarification of responses (if necessary)

1-A: Item 5. Jurisdictions in Which Securities are to be Offered

Jurisdictions in Which Securities are to be Offered

Using the list below, select the jurisdictions in which the issuer intends to offer the securities

Selected States and Jurisdictions
COLORADO
CONNECTICUT
DELAWARE
GEORGIA
MASSACHUSETTS
MONTANA
NEVADA
NEW YORK
WYOMING
PUERTO RICO

Using the list below, select the jurisdictions in which the securities are to be offered by underwriters, dealers or sales persons or check the appropriate box

None
Same as the jurisdictions in which the issuer intends to offer the securities
Selected States and Jurisdictions

1-A: Item 6. Unregistered Securities Issued or Sold Within One Year

Unregistered Securities Issued or Sold Within One Year

None

Unregistered Securities Issued

As to any unregistered securities issued by the issuer of any of its predecessors or affiliated issuers within one year before the filing of this Form 1-A, state:

(a)Name of such issuer
Byzen Digital, Inc.
(b)(1) Title of securities issued
Series A Preferred Stock
(2) Total Amount of such securities issued
2000000
(3) Amount of such securities sold by or for the account of any person who at the time was a director, officer, promoter or principal securityholder of the issuer of such securities, or was an underwriter of any securities of such issuer.
0
(c)(1) Aggregate consideration for which the securities were issued and basis for computing the amount thereof.
For shares of 100BIO, LLC
(2) Aggregate consideration for which the securities listed in (b)(3) of this item (if any) were issued and the basis for computing the amount thereof (if different from the basis described in (c)(1)).

Unregistered Securities Issued

As to any unregistered securities issued by the issuer of any of its predecessors or affiliated issuers within one year before the filing of this Form 1-A, state:

(a)Name of such issuer
Byzen Digital, Inc.
(b)(1) Title of securities issued
Series B Preferred Stock
(2) Total Amount of such securities issued
2000000
(3) Amount of such securities sold by or for the account of any person who at the time was a director, officer, promoter or principal securityholder of the issuer of such securities, or was an underwriter of any securities of such issuer.
0
(c)(1) Aggregate consideration for which the securities were issued and basis for computing the amount thereof.
Compensatory Services
(2) Aggregate consideration for which the securities listed in (b)(3) of this item (if any) were issued and the basis for computing the amount thereof (if different from the basis described in (c)(1)).

Unregistered Securities Issued

As to any unregistered securities issued by the issuer of any of its predecessors or affiliated issuers within one year before the filing of this Form 1-A, state:

(a)Name of such issuer
Byzen Digital, Inc.
(b)(1) Title of securities issued
Series C Preferred
(2) Total Amount of such securities issued
2000000
(3) Amount of such securities sold by or for the account of any person who at the time was a director, officer, promoter or principal securityholder of the issuer of such securities, or was an underwriter of any securities of such issuer.
0
(c)(1) Aggregate consideration for which the securities were issued and basis for computing the amount thereof.
Compensatory services
(2) Aggregate consideration for which the securities listed in (b)(3) of this item (if any) were issued and the basis for computing the amount thereof (if different from the basis described in (c)(1)).

Unregistered Securities Issued

As to any unregistered securities issued by the issuer of any of its predecessors or affiliated issuers within one year before the filing of this Form 1-A, state:

(a)Name of such issuer
Byzen Digital, Inc.
(b)(1) Title of securities issued
Common Stock
(2) Total Amount of such securities issued
5500000
(3) Amount of such securities sold by or for the account of any person who at the time was a director, officer, promoter or principal securityholder of the issuer of such securities, or was an underwriter of any securities of such issuer.
0
(c)(1) Aggregate consideration for which the securities were issued and basis for computing the amount thereof.
For services rendered as follows: 2,000,000 shares valued at $0.19 per share. 500,000 shares valued at $0.105. 3,000,000 shares valued at $0.19
(2) Aggregate consideration for which the securities listed in (b)(3) of this item (if any) were issued and the basis for computing the amount thereof (if different from the basis described in (c)(1)).

Unregistered Securities Issued

As to any unregistered securities issued by the issuer of any of its predecessors or affiliated issuers within one year before the filing of this Form 1-A, state:

(a)Name of such issuer
Byzen Digital, Inc.
(b)(1) Title of securities issued
Common Stock
(2) Total Amount of such securities issued
13942210
(3) Amount of such securities sold by or for the account of any person who at the time was a director, officer, promoter or principal securityholder of the issuer of such securities, or was an underwriter of any securities of such issuer.
0
(c)(1) Aggregate consideration for which the securities were issued and basis for computing the amount thereof.
Conversion of debt of approximately $1000000
(2) Aggregate consideration for which the securities listed in (b)(3) of this item (if any) were issued and the basis for computing the amount thereof (if different from the basis described in (c)(1)).

Unregistered Securities Act

(e) Indicate the section of the Securities Act or Commission rule or regulation relied upon for exemption from the registration requirements of such Act and state briefly the facts relied upon for such exemption
These securities were sold in reliance upon the exemption provided by Section 4(a)(2) of the Securities Act of 1933, as amended for transactions not involving a public market.

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

 

FORM 1-A

 

REGULATION A OFFERING CIRCULAR UNDER THE SECURITIES ACT OF 1933

 

BYZEN DIGITAL INC.
(Exact name of issuer as specified in its charter)

 

Nevada

(State of other jurisdiction of incorporation or organization)

 

2711 N Sepulveda Blvd #1051
Manhattan Beach, CA 90266-2725

(424)835-1845

(Address, including zip code, and telephone number,

including area code of issuer’s principal executive office)

 

David Ficksman

TroyGould PC

1801 Century Park East, Suite 1600

Los Angeles, CA 90067

dficksman@troygould.com 

(Name, address, including zip code, and telephone number

including area code, of agent for service)

 

This Preliminary Offering Circular shall only be qualified upon order of the Commission, unless a subsequent amendment is filed indicating the intention to become qualified by operation of the terms of Regulation A.

 

 8711   85-1449444
(Primary Standard Industrial Classification Code Number)   (I.R.S. Employer Identification Number)

 

 
 

 

AN OFFERING STATEMENT PURSUANT TO REGULATION A RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE INFORMATION IN THIS PRELIMINARY OFFERING CIRCULAR IS NOT COMPLETE AND MAY BE CHANGED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE OFFERING STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS QUALIFIED. THIS PRELIMINARY OFFERING CIRCULAR IS NOT AN OFFER TO SELL NOR DOES IT SEEK AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

SUBJECT TO COMPLETION, DATED April 7, 2021.

 

PART II – INFORMATION REQUIRED IN OFFERING CIRCULAR

Preliminary Offering Circular Form 1-A: Tier 1

 

Byzen Digital, Inc.

 

2711 N Sepulveda Blvd #1051
Manhattan Beach, CA 90266-2725

(424)835-1845
Website: www.byzendigital.com

 

8711 85-1449444
Primary Standard Industrial Classification Code Number (I.R.S. Employer Identification Number)

 

We are offering a number of shares of our common stock at a fixed price of $0.02 to $0.20 per share with no minimum to be sold up to a maximum of 375,000,000 shares, in a self-underwritten best-efforts public offering for gross proceeds of up to $7,500,000. The offering will terminate one year from the date of this offering circular. We plan to commence sales of our common stock as soon as the Regulation A Offering Statement of which this offering circular is a part is qualified by the U.S. Securities and Exchange Commission. See, “Description Of Securities We Are Offering”, page 25, of this offering circular. We are providing the information and disclosure format required by Part 1 of Form S-1 pursuant to the general instructions of Part II(a)(ii) of Form 1-A and are following the requirements for a smaller reporting company as it meets the definition of that term in Rule 405.

 

Investment in our common stock involves a high degree of risk. See, “Risk Factors”, beginning on page 9 of this offering circular.

 

THE U.S. SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION.

 

GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(D)(2)(I)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO WWW.INVESTOR.GOV.

 

Price to the Public*   Underwriting discount and commissions   Total net proceeds we will receive
$0.02 to $0.20 per share   $ 0.00     $ 7,500,000 **

 

2
 

 

 *If we achieve the maximum offering price of $0.20 per share, we will issue a maximum of 37,500,000 shares.

 

 ** This amount includes the aggregate principal amount of promissory notes if all of our note holders exchange their notes for common shares of the Company.

 

(1) The Company currently has not enlisted the services of a broker-dealer or underwriter, but may at some time in the future. See “PLAN OF DISTRIBUTION.”
   
(2) Does not reflect payment of expenses of this Offering, which are estimated to not exceed $95,000 and which include, among other things, legal fees, accounting costs, reproduction expenses, due diligence, marketing, consulting, administrative services other costs of blue sky compliance, technology providers, and actual out-of-pocket expenses incurred by the Company selling the Shares. If the Company engages the services of broker-dealers in connection with the Offering, their commissions will be an additional expense of the Offering. See the “Plan of Distribution” for details regarding the compensation payable in connection with this Offering. This amount represents the proceeds of the Offering to the Company, which will be used as set out in “USE OF PROCEEDS TO COMPANY.”
   
(3) There are no finder’s fees or other fees being paid to third parties from the proceeds, other than those disclosed below. See “PLAN OF DISTRIBUTION.”

 

GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(D)(2)(I)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO WWW.INVESTOR.GOV.

 

This Offering (the “Offering”) consists of up to 375,000,000 Shares of the Company’s Common Stock (the “Shares” or individually, each a “Share”) that are being offered on a “best efforts” basis, which means that there is no guarantee that any minimum amount will be sold. The Shares are being sold by Byzen Digital Inc., a Nevada Corporation (“Byzen” or the “Company”). There are up to 375,000,000 Shares being offered at a price of up to $0.20 per Share with no minimum purchase of Shares per investor. The Shares are being offered on a best efforts basis directly by the Company. The maximum aggregate amount of the Shares offered is $7,500,000 which includes up to $1,069375 in principal amount of promissory notes which may be exchanged for shares of our Common Stock at the Offering price. (the “Maximum Offering”). There is no minimum number of Shares that needs to be sold in order for funds to be released to the Company and for this Offering to close.

 

The Shares are being offered pursuant to Regulation A of Section 3(b) of the Securities Act of 1933, as amended, for Tier 1 Offerings. The Shares will only be issued to purchasers who satisfy the requirements set forth in Regulation A. The Offering is expected to expire on the first of: (i) all of the Shares offered are sold; or (ii) unless sooner terminated by the Company. Upon each closing under the terms as set out in this Offering Circular, funds will be immediately transferred to the Company where they will be available for use in the operations of the Company’s business in a manner consistent with the “USE OF PROCEEDS TO COMPANY” in this Offering Circular. This Offering may remain open for a twelve (12) month period but may extend past the Closing Date at the discretion of the Company and in accordance with the rules and provisions of Regulation A promulgated under the “Jumpstart Our Business Startups Act” (the JOBS Act).

 

3
 

 

THIS OFFERING CIRCULAR DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION WOULD BE UNLAWFUL. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS CONCERNING THE COMPANY OTHER THAN THOSE CONTAINED IN THIS OFFERING CIRCULAR, AND IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON.

 


 

PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS OFFERING CIRCULAR, OR OF ANY PRIOR OR SUBSEQUENT COMMUNICATIONS FROM THE COMPANY OR ANY OF ITS EMPLOYEES, AGENTS OR AFFILIATES, AS INVESTMENT, LEGAL, FINANCIAL OR TAX ADVICE.

 


 

BEFORE INVESTING IN THIS OFFERING, PLEASE REVIEW ALL DOCUMENTS CAREFULLY, ASK ANY QUESTIONS OF THE COMPANY’S MANAGEMENT THAT YOU WOULD LIKE ANSWERED AND CONSULT YOUR OWN COUNSEL, ACCOUNTANT AND OTHER PROFESSIONAL ADVISORS AS TO LEGAL, TAX AND OTHER RELATED MATTERS CONCERNING THIS INVESTMENT.

 

NASAA UNIFORM LEGEND

 

FOR RESIDENTS OF ALL STATES: THE PRESENCE OF A LEGEND FOR ANY GIVEN STATE REFLECTS ONLY THAT A LEGEND MAY BE REQUIRED BY THAT STATE AND SHOULD NOT BE CONSTRUED TO MEAN AN OFFER OR SALE MAY BE MADE IN A PARTICULAR STATE. IF YOU ARE UNCERTAIN AS TO WHETHER OR NOT OFFERS OR SALES MAY BE LAWFULLY MADE IN ANY GIVEN STATE, YOU ARE HEREBY ADVISED TO CONTACT THE COMPANY. THE SECURITIES DESCRIBED IN THIS OFFERING CIRCULAR HAVE NOT BEEN REGISTERED UNDER ANY STATE SECURITIES LAWS (COMMONLY CALLED “BLUE SKY” LAWS).

 

IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

 

NOTICE TO FOREIGN INVESTORS

 

IF THE PURCHASER LIVES OUTSIDE THE UNITED STATES, IT IS THE PURCHASER’S RESPONSIBILITY TO FULLY OBSERVE THE LAWS OF ANY RELEVANT TERRITORY OR JURISDICTION OUTSIDE THE UNITED STATES IN CONNECTION WITH ANY PURCHASE OF THE SECURITIES, INCLUDING OBTAINING REQUIRED GOVERNMENTAL OR OTHER CONSENTS OR OBSERVING ANY OTHER REQUIRED LEGAL OR OTHER FORMALITIES. THE COMPANY RESERVES THE RIGHT TO DENY THE PURCHASE OF THE SECURITIES BY ANY FOREIGN PURCHASER.

 

4
 


TABLE OF CONTENTS

 

 

    Page No. 
Forward-Looking Disclosure   6
     
Exemptions Under JOBS Act   7
     
Summary of Offering Circular   8
     
Risk Factors   9
     
Use of Proceeds   22
     
Determination of Offering Price   25
     
Dilution of the Price You Pay for Your Shares   25
     
Plan of Distribution   26
     
Management’s Discussion and Analysis of Financial Condition and Plan of Operations   41
     
Description of the Business   28
     
Management   45
     
Executive Compensation   48
     
Principal Shareholders  
     
Securities Being Offered   51
     
Description of Capital Stock   52
     
Investor Eligibility Standards   54
     
Disqualifying Event Disclosure   55
     
Related Party Transactions   55
     
Experts  
     
Legal Matters   56
     
Interests of Named Experts and Counsel   57
     
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure   57
     
Disclosure of Commission Position On Indemnification for Securities Act Liabilities   57
     
Available Information   57
     
Financial Statements   F-1

 

5
 

  

Forward Looking Statement Disclosure

 

This Form 1-A Offering Circular, and any documents incorporated by reference herein or therein contain forward-looking statements and are subject to risks and uncertainties. All statements other than statements of historical fact or relating to present facts or current conditions included in this Form 1-A, Offering Circular, and any documents incorporated by reference are forward-looking statements. Forward-looking statements give the Company’s current reasonable expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “should,” “can have,” “likely” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. The forward-looking statements contained in this Form 1-A Offering Circular, and any documents incorporated by reference herein or therein are based on reasonable assumptions the Company has made in light of its industry experience, perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. As you read and consider this Form 1-A Offering Circular, and any documents incorporated by reference, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (many of which are beyond the Company’s control) and assumptions. Although the Company believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect its actual operating and financial performance and cause its performance to differ materially from the performance anticipated in the forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of these assumptions prove incorrect or change, the Company’s actual operating and financial performance may vary in material respects from the performance projected in these forward-looking statements. Any forward-looking statement made by the Company in this Form 1-A Offering Circular or any documents incorporated by reference herein speaks only as of the date of this Form 1-A Offering Circular or any documents incorporated by reference herein. Factors or events that could cause our actual operating and financial performance to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. 

 

6
 

 

State Law Exemption

 

As a Tier 1 offering, pursuant to Regulation A under the Securities Act, this Offering will be subject to compliance with state “Blue Sky” law including meeting certain state filing requirements and complying with certain anti-fraud provisions.

 

About This Form 1-A and Offering Circular

 

In making an investment decision, you should rely only on the information contained in this Form 1-A and Offering Circular. The Company has not authorized anyone to provide you with information different from that contained in this Form 1-A and Offering Circular. We are Offering to sell and seeking offers to buy the Shares only in jurisdictions where offers and sales are permitted. You should assume that the information contained in this Form 1-A and Offering Circular is accurate only as of the date of this Form 1-A and Offering Circular, regardless of the time of delivery of this Form 1-A and Offering Circular. Our business, financial condition, results of operations, and prospects may have changed since that date. Statements contained herein as to the content of any agreements or other documents are summaries and, therefore, are necessarily selective and incomplete and are qualified in their entirety by the actual agreements or other documents. The Company will provide the opportunity to ask questions of and receive answers from the Company’s management concerning terms and conditions of the Offering, the Company or any other relevant matters and any additional reasonable information to any prospective investor prior to the consummation of the sale of the Shares. This Form 1-A and Offering Circular do not purport to contain all of the information that may be required to evaluate the Offering and any recipient hereof should conduct its own independent analysis. The statements of the Company contained herein are based on information believed to be reliable. No warranty can be made as to the accuracy of such information or that circumstances have not changed since the date of this Form 1-A and Offering Circular. The Company does not expect to update or otherwise revise this Form 1-A, Offering Circular or other materials supplied herewith. The delivery of this Form 1-A and Offering Circular at any time does not imply that the information contained herein is correct as of any time subsequent to the date of this Form 1-A and Offering Circular. This Form 1-A and Offering Circular are submitted in connection with the Offering described herein and may not be reproduced or used for any other purpose.

 

EXEMPTIONS UNDER JUMPSTART OUR BUSINESS STARTUPS ACT

 

We are an emerging growth company. An emerging growth company is one that had total annual gross revenues of less than $1,000,000,000 (as such amount is indexed for inflation every 5 years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, setting the threshold to the nearest 1,000,000) during its most recently completed fiscal year. We would lose our emerging growth status if we were to exceed $1,000,000,000 in gross revenues. We are not sure this will ever take place.

 

Because we are an emerging growth company, we have the exemption from Section 404(b) of Sarbanes-Oxley Act of 2002 and Section 14A(a) and (b) of the Securities Exchange Act of 1934. Under Section 404(b), we are now exempt from the internal control assessment required by subsection (a) that requires each independent auditor that prepares or issues the audit report for the issuer shall attest to, and report on, the assessment made by the management of the issuer. We are also not required to receive a separate resolution regarding either executive compensation or for any golden parachutes for our executives so long as we continue to operate as an emerging growth company.

 

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We hereby elect to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1).

 

We will lose our status as an emerging growth company in the following circumstances:

 

The end of the fiscal year in which our annual revenues exceed $1.0 billion.
   
The end of the fiscal year in which the fifth anniversary of our IPO occurred.
   
The date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt.
   
The date on which we qualify as a large accelerated filer.

  
OFFERING SUMMARY

 

The following summary is qualified in its entirety by the more detailed information appearing elsewhere in this Offering Circular and/or incorporated by reference in this Offering Circular. For full Offering details, please (1) thoroughly review this Form 1-A filed with the Securities and Exchange Commission (2) thoroughly review this Offering Circular and (3) thoroughly review any attached documents to or documents referenced in, this Form 1-A and Offering Circular.

 

Type of Stock Offering: Shares of our Common Stock
   
Price Per Share: $0.02 - 0.20 per share
   
Minimum Investment: No minimum investment
   
Maximum Offering: $7,500,000. The Company will not accept investments greater than the Maximum Offering amount. This amount includes the aggregate principal amount of outstanding promissory notes which may be exchanged for shares of our Common Stock at the offering price.
   
Maximum Shares Offered: 375,000,000 Shares of Common Stock which includes shares which may be issued in connection with the exchange of up to $1,069,375 in promissory notes for shares of Common Stock at the Offering price
   
Use of Proceeds: See the description in section entitled “USE OF PROCEEDS TO COMPANY” on page 22 herein.
   
Voting Rights: The Shares have voting rights.
   
Length of Offering: Shares will be offered on a continuous basis until either (1) the maximum number of Shares are sold; or (2) if the Company in its sole discretion withdraws this Offering.
   
Shares Outstanding: As of March 31, 2021, the Company had 107,183,131 shares of Common Stock issued and outstanding.
   
Derivative Securities Outstanding:  As of March 31, 2021, the Company has 2,000,000 Class A redeemable Preferred Shares,.2,000,000 Class B non-voting Preferred Shares which have been granted for services provided, issuable as of March 31,2021 and 2,000,000 Class C Preferred Shares. The Company also has an aggregate of $1,069,375 in principal amount of promissory notes, which if exchanged into shares of Common Stock, could result in the issuance of up to 20,443,439 shares of Common Stock
   
Trading Our Common Stock is traded on the Pink Current Market of the OTC Markets.

 

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The Company may not be able to sell the Maximum Offering Amount. The Company will conduct one or more closings on a rolling basis as funds are received from investors. Funds tendered by investors will be kept in an account in the Company’s name and will be immediately available to the Company. Once a subscription agreement is accepted by the Company, funds are non-refundable. The Company plans to begin sales immediately after this Preliminary Offering Circular has been qualified by the Securities and Exchange Commission (the “SEC”). The net proceeds of the Offering will be the gross proceeds of the Shares sold minus the expenses of the Offering.

 

RISK FACTORS

 

The purchase of the Company’s securities involves substantial risks. You should carefully consider the following risk factors in addition to any other risks associated with this investment. The Shares offered by the Company constitute a highly speculative investment and you should be in an economic position to lose your entire investment. The risks listed do not necessarily comprise all those associated with an investment in the Shares and are not set out in any particular order of priority. Additional risks and uncertainties may also have an adverse effect on the Company’s business and your investment in the Shares. An investment in the Company may not be suitable for all recipients of this Offering Circular. You are advised to consult an independent professional adviser or attorney who specializes in investments of this kind before making any decision to invest. You should consider carefully whether an investment in the Company is suitable in light of your personal circumstances and the financial resources available to you.

 

The discussions and information in this Offering Circular may contain both historical and forward-looking statements. To the extent that the Offering Circular contains forward-looking statements regarding the financial condition, operating results, business prospects, or any other aspect of the Company’s business, please be advised that the Company’s actual financial condition, operating results, and business performance may vary materially from that projected or estimated by the Company in forward-looking statements. The Company has attempted to identify, in context, certain of the factors it currently believes may cause actual future experience and results may vary from the Company’s current expectations.

 

Before investing, you should carefully read and carefully consider the following risk factors:

 

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Risks Relating to the Company and Its Business

 

We have future capital needs and without adequate capital we will not be able to develop our business plan.

 

We are a development stage company. Our growth and continued operations could be impaired by limitations on our access to capital markets. Furthermore, the limited capital we have raised, and the capital we hope will be available to us from our principals, if any, may not be adequate for our long-term growth. If financing is available, it may involve issuing securities senior to our common stock which would be dilutive to holders of our common stock. In addition, in the event we do not raise additional capital from conventional sources, such as our existing investors or commercial banks, there is every likelihood that our growth will be restricted and we may be forced to scale back or curtail implementing our business plan in which event investors in the Company may lose part or all of their investment.

 

Our future success depends on broad market acceptance of our products and services, which may not happen.

 

Our entire business is based on the assumption that the demand for our products and services will develop and grow. We cannot assure you that this assumption is or will be correct. The market for fuel converted from plastic is new and accordingly quite small. As is typical of a new and rapidly evolving industry, the demand for, and market acceptance of, “green-based” products and services is highly uncertain. In order to be successful, we must be able to keep our understandings in place with the suppliers of our products, and educate consumers that our products perform as well as the products they currently use. We can provide no assurances that these efforts will be successful. Similarly, we cannot assure you that the demand for our products and services will become widespread. If the market for our products fails to develop or develops more slowly than we anticipate, our business could be adversely affected.

 

As public awareness of the benefits of fuel converted from plastic grows, we expect competition to increase, which could make it more difficult for us to grow and achieve profitability.

 

We expect competition to increase as awareness of the environmental advantages of converting plastic into fuel increases. A rapid increase in competition could negatively affect our ability to develop a profitable client base. Many of our competitors and potential competitors may have substantially greater financial resources, customer support, technical and marketing resources, larger customer bases, longer operating histories, greater name recognition and more established relationships than we do. We cannot be sure that we will have the resources or expertise to compete successfully. Compared to us, our competitors may be able to:

 

develop and expand their products and services more quickly;
adapt faster to new or emerging technologies and changing customer needs and preferences;
take advantage of acquisitions and other opportunities more readily;
negotiate more favorable agreements with vendors and customers; and
devote greater resources to marketing and selling their products or services.

 

Some of our competitors may also be able to increase their market share by providing customers with additional benefits or by reducing their prices. We cannot be sure that we will be able to match price reductions by our competitors. In addition, our competitors may form strategic relationships to better compete with us. These relationships may take the form of strategic investments, joint-marketing agreements, licenses or other contractual arrangements that could increase our competitors’ ability to serve customers. If our competitors are successful in entering our market, our ability to grow or even sustain our current business could be adversely impacted.

 

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We face risks associated with obtaining raw materials.

 

With regard to our Clean-Seas subsidiary, even though there seems to be an inexhaustible supply of used plastic in our society, our success will depend upon our ability to collect or pay someone else to collect plastic for commercially reasonable costs. In the event there becomes increased competition for these plastic resources, it could have an effect on our profitability that we do not foresee at this time. With regard to our 100BIO subsidiary, we rely on third parties to deliver raw materials like virgin wood fiber, recycled fiber, and starch. Increases in costs of delivery and energy prices, as well as an increase in demand for these materials, could substantially increase the price of these materials that we need.

 

We face risks associated with a reduction in demand for carbon-based fuels.

 

Our world is committing vast amounts of resources toward research and development for the purpose of replacing carbon based fuels with other sources of energy such as sunlight, ocean wave power, wind power and various forms of electrical power, to name a few. Our primary business focus is based upon a strategy for replacing the traditional source for carbon-based fuels, namely crude oil. If there is a major breakthrough in technology that reduces the need for carbon-based fuels, prospect for the success of our company could suffer.

 

We will not be able to negotiate exclusive rights to the technology we will need to acquire.

 

Our intent is to use existing technologies in plastics de-polymerization and to implement equipment that is readily available in the industrial marketplace. We will not have exclusive rights to this technology. Accordingly, others may license or otherwise obtain the use of the same technology and enter into competition with us in our same locality. If this should be the case, it may be difficult or impossible to obtain a competitive advantage over others that desire to enter into this industry.

 

The Company Has Limited Operating History

 
The Company has a limited operating history and there can be no assurance that the Company’s proposed plan of business can be realized in the manner contemplated and, if it cannot be, shareholders may lose all or a substantial part of their investment. There is no guarantee that it will ever realize any significant operating revenues or that its operations will ever be profitable.

 

The Company Is Dependent Upon Its Top Management

 

The Company’s success is heavily dependent upon the continued active participation of Dan Bates, the Company’s current Chief Executive Officer, and Jea So, our Vice President and principal officer of our 100BIO subsidiary, as well as other key personnel and consultants which the Company plans to hire. Loss of the services of our top management could have a material adverse effect upon the Company’s business, financial condition or results of operations. Further, the Company’s success and achievement of the Company’s growth plans depend on the Company’s ability to recruit, hire, train and retain other highly qualified scientific, technical and managerial personnel. Competition for qualified employees and consultants among companies in the applicable industries is intense, and the loss of any of such persons, or an inability to attract, retain and motivate any additional highly skilled employees and consultants required for the initiation and expansion of the Company’s activities, could have a materially adverse effect on it. The inability to attract and retain the necessary personnel, consultants and advisors could have a material adverse effect on the Company’s business, financial condition or results of operations.

 

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Although Dependent Upon the Company’s Chief Executive Officer, the Company Does Not Have Any Key Man Life Insurance Policies On Any Such Individual At The Time Of This Offering.

 

The Company is dependent upon its Chief Executive Officer in order to conduct its operations and execute its business plan. However, the Company has not purchased any insurance policies with respect to him in the event of his death or disability. Therefore, should the Company’s Chief Executive Officer die or becomes disabled, the Company will not receive any compensation that would assist with such person’s absence. The loss of such person could negatively affect the Company and its operations.

 

The Company Is Not Subject To Certain Sarbanes-Oxley Regulations And Lack The Financial Controls And Safeguards Required Of Public Companies.

 

The Company does not presently have the internal infrastructure necessary, and is not required, to complete an attestation about our financial controls that would be required under Section 404 of the Sarbanes-Oxley Act of 2002. There can be no assurances that there are no significant deficiencies or material weaknesses in the quality of our financial controls. The Company expects to incur additional expenses and diversion of management’s time if and when it becomes necessary to perform the system and process evaluation, testing and remediation required in order to comply with the management certification and auditor attestation requirements.

 

Our Chief Executive Officer currently has effective control over actions requiring shareholder approval.

 

Dan Bates, our Chief Executive Officer is the owner of 2,000,000 shares of our Class C Convertible Preferred Stock with each share entitled to 100 votes on all matters submitted to a vote of our shareholders. As a result, Mr. Bates currently has the ability to control the outcome of matters submitted to our shareholders for approval, including election of directors and any merger, consolidation or sale of all or substantially all of our assets. In addition, he would have the ability to control management and affairs of our company. Accordingly, this concentration of ownership might harm the price of our stock by delaying or preventing a change of control, impeding a merger or other business combination or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.

 

Changes In Laws Or Regulations Could Harm The Company’s Performance.

 

Various federal and state laws, including labor laws, govern the Company’s relationship with our employees and affect operating costs. These laws may include minimum wage requirements, overtime pay, healthcare reform and the implementation of various federal and state healthcare laws, unemployment tax rates, workers’ compensation rates, citizenship requirements, union membership and sales taxes. A number of factors could adversely affect our operating results, including additional government-imposed increases in minimum wages, overtime pay, paid leaves of absence and mandated health benefits, mandated training for employees, changing regulations from the National Labor Relations Board and increased employee litigation including claims relating to the Fair Labor Standards Act.

 

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The Company’s Business Plan Is Speculative

 

The Company’s present business and planned business are speculative and subject to numerous risks and uncertainties. There is no assurance that the Company will generate significant revenues or profits

 

The Company Faces Significant Competition in the United States and Elsewhere

 

The Company will face significant competition in the United States and elsewhere (please see the sub- section entitled “Competition” below in this Offering Circular.)

 

The Company Will Likely Incur Debt

 

The Company will likely incur debt (including secured debt) in the future and in the continuing operations of its business. Complying with obligations under such indebtedness may have a material adverse effect on the Company and on your investment.

 

If We Are Unable To Effectively Protect Our Intellectual Property, It May Impair Our Ability To Compete

 

Our success will depend on our ability to obtain and maintain meaningful intellectual property protection for any such intellectual property. The names and/or logos of Company brands may be challenged by holders of trademarks who file opposition notices, or otherwise contest, trademark applications by the Company for its brands. Similarly, domains owned and used by the Company may be challenged by others who contest the ability of the Company to use the domain name or URL. Our business depends on proprietary technology that may be infringed. Some or all of our products depend or will depend on our proprietary technology for their success. We rely on a combination of trade secrets, copyrights and trademarks, together with non-disclosure agreements, confidentiality provisions in sales, procurement, employment and other agreements and technical measures to establish and protect proprietary rights in our products. While we may seek patents for some or all of our products and technology, there is no guarantee that such patents will be granted. Our ability to successfully protect our technology may be limited because intellectual property laws in certain jurisdictions may be relatively ineffective, detecting infringements and enforcing proprietary rights may divert management’s attention and company resources, contractual measures such as non-disclosure agreements and confidentiality provisions may afford only limited protection, any patents we may receive will expire, thus providing competitors access to the applicable technology, competitors may independently develop products that are substantially equivalent or superior to our products or circumvent our intellectual property rights; and competitors may register patents in technologies relevant to our business areas. In addition, various parties may assert infringement claims against us. The cost of defending against infringement claims could be significant, regardless of whether the claims are valid. If we are not successful in defending such claims, we may be prevented from the use or sale of certain of our products, or liable for damages and required to obtain licenses, which may not be available on reasonable terms, any of which may have a material adverse impact on our business, results of operation or financial condition.

 

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Computer, Website or Information System Breakdown Could Affect The Company’s Business 

 

Computer, website and/or information system breakdowns as well as cyber security attacks could impair the Company’s ability to service its customers leading to reduced revenue from sales and/or reputational damage, which could have a material adverse effect on the Company’s financial results as well as your investment.

 

Changes In The Economy Could Have a Detrimental Impact On The Company

 

Changes in the general economic climate could have a detrimental impact on the Company’s revenue. It is possible that recessionary pressures and other economic factors (such as declining incomes, future potential rising interest rates, higher unemployment and tax increases) may adversely affect the Company. Any of such events or occurrences could have a material adverse effect on the Company’s financial results and on your investment.

 

The Amount Of Capital The Company Is Attempting To Raise In This Offering May Not Be Enough To Sustain The Company’s Current Business Plan

 

In order to achieve the Company’s near and long-term goals, the Company may need to procure funds in addition to the amount raised in the Offering. There is no guarantee the Company will be able to raise such funds on acceptable terms or at all. If we are not able to raise sufficient capital in the future, we will not be able to execute our business plan, our continued operations will be in jeopardy and we may be forced to cease operations and sell or otherwise transfer all or substantially all of our remaining assets, which could cause you to lose all or a portion of your investment.

 

We May Not Be Able To Obtain Adequate Financing To Continue Our Operations

 

The Company may require additional debt and/or equity financing to pursue our growth and business strategies. These include but are not limited to enhancing our operating infrastructure and otherwise respond to competitive pressures. Given our limited operating history and existing losses, there can be no assurance that additional financing will be available, or, if available, that the terms will be acceptable to us. Lack of additional funding could force us to curtail substantially our growth plans. Furthermore, the issuance by us of any additional securities pursuant to any future fundraising activities undertaken by us would dilute the ownership of existing shareholders and may reduce the price of our Shares.

 

Terms Of Subsequent Financing, If Any, May Adversely Impact Your Investment

 

We may have to engage in common equity, debt, or preferred stock financings in the future. Your rights and the value of your investment in the Common Stock could be reduced by the dilution caused by future equity issuances. Interest on debt securities could increase costs and negatively impact operating results. In the event we are permitted to issue preferred stock pursuant to the terms of our Company documents, preferred stock could be issued in series from time to time with such designation, rights, preferences, and limitations as needed to raise capital. The terms of preferred stock would be more advantageous to those investors than to the holders of our Common Stock. In addition, if we need to raise more equity capital from the sale of common stock, institutional or other investors may negotiate terms at least as, and possibly more, favorable than the terms of your investment. Shares of common stock which we sell could be sold into any market that develops, which could adversely affect the market price.

 

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There is A Substantial Doubt About Our Ability To Continue As A Going Concern.

 

We have not yet entered into the commercialization stage of our products and therefore commercialization is uncertain and expected to require substantial expenditures. We have not yet generated sufficient revenues from our operations to fund our activities, and are therefore dependent upon external sources for financing our operations. There is a risk that we will be unable to obtain necessary financing to continue our operations on terms acceptable to us or at all. As a result, we expect that when we complete our audited financial statements our independent auditor firm will express in its auditors’ report on the financial statements a substantial doubt regarding our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of the uncertainty regarding our ability to continue as a going concern. This going concern opinion could materially limit our ability to raise additional funds through the issuance of equity or debt securities or otherwise. Future reports on our financial statements may include an explanatory paragraph with respect to our ability to continue as a going concern. If we cannot continue as a going concern, our stockholders may lose their entire investment in the Company’s Common Stock.

 

Our Operating Plan Relies In Large Part Upon Assumptions And Analyses Developed By The Company. If These Assumptions Or Analyses Prove To Be Incorrect, The Company’s Actual Operating Results May Be Materially Different From Our Forecasted Results

 

Whether actual operating results and business developments will be consistent with the Company’s expectations and assumptions as reflected in its forecast depends on a number of factors, many of which are outside the Company’s control, including, but not limited to:

 

whether the Company can obtain sufficient capital to sustain and grow its business
our ability to manage the Company’s growth
whether the Company can manage relationships with key vendors
demand for the Company’s services and products
the timing and costs of new and existing marketing and promotional efforts
competition
the Company’s ability to retain existing key management, to integrate recent hires and to attract, retain and motivate qualified personnel
the overall strength and stability of domestic and international economies

 

Unfavorable changes in any of these or other factors, most of which are beyond the Company’s control, could materially and adversely affect its business, results of operations and financial condition.

 

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Issues Regarding Management of 100BIO

 

Our ability to manage our subsidiary, 100BIOLLC, is limited by the fact that we hold only 51% of its outstanding equity. As a result, we may be constrained in managing 100BIO by reason of our fiduciary duty owed to the minority shareholders.

 

The Company May Be Unable To Manage Its Growth Or Implement Its Expansion Strategy

 

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

 

The Company Faces Competition In The Company’s Markets From Various Large And Small Companies, Some Of Which Have Greater Financial, Research And Development, Production And Other Resources Than Does The Company

 

In many cases, the Company’s potential competitors have longer operating histories, established ties to the market and consumers, greater brand awareness, and greater financial, technical and marketing resources. The Company’s ability to compete will depend, in part, upon a number of factors outside the Company’s control, including the ability of the Company’s competitors to develop alternatives that are superior. If the Company fails to successfully compete in its markets, or if the Company incurs significant expenses in order to compete, it could have a material adverse effect on the Company’s results of operations. With specific regard to 100BIO, package manufacturing is one of the most competitive industries.

 

We face risks associated with international operations.

 

We currently plan to operate outside the United States.

 

Our business internationally will be subject to a number of risks. These include:

 

  linguistic and culturaldifferences;
     
  inconsistent regulations and unexpected changes in regulatory requirements;
     
  potentially adverse tax consequences;
     
  wage and price controls;
     
  political instability and social unrest;
     
  uncertain protection of our intellectual property rights; and
     
  imposition of trade barriers.

 

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We have no control over many of these matters and any of them may adversely affect our ability to conduct our business internationally.

 

Currency fluctuations and exchange control regulations may adversely affect our business.

 

Our reporting currency is the United States dollar. Our customers outside the United States, however, will be generally billed in local currencies. Our accounts receivable from these customers and overhead assets will decline in value if the local currencies depreciate relative to the United States dollar. Although we may enter into hedging transactions, we may not be able to do so effectively. In addition, any currency exchange losses that we suffer may be magnified if we become subject to exchange control regulations restricting our ability to convert local currencies into United States dollars.

 

Litigation may adversely affect our business, financial condition, and results of operations.

 

From time to time in the normal course of our business operations, we may become subject to litigation that may result in liability material to our financial statements as a whole or may negatively affect our operating results if changes to our business operations are required. The cost to defend such litigation may be significant and may require a diversion of our resources. There also may be adverse publicity associated with litigation that could negatively affect customer perception of our business, regardless of whether the allegations are valid or whether we are ultimately found liable. Insurance may not be available at all or in sufficient amounts to cover any liabilities with respect to these or other matters. A judgment or other liability in excess of our insurance coverage for any claims could adversely affect our business and the results of our operations.

 

Our insurance coverage may be inadequate to cover all significant risk exposures.

 

We will be exposed to liabilities that are unique to the products we provide. While we intend to maintain insurance for certain risks, the amount of our insurance coverage may not be adequate to cover all claims or liabilities, and we may be forced to bear substantial costs resulting from risks and uncertainties of our business. It is also not possible to obtain insurance to protect against all operational risks and liabilities. The failure to obtain adequate insurance coverage on terms favorable to us, or at all, could have a material adverse effect on our business, financial condition, and results of operations. We do not have any business interruption insurance. Any business disruption or natural disaster could result in substantial costs and diversion of resources.

 

Risks Relating to This Offering and Investment

  

Our Business, Results of Operations and Financial Condition may be Adversely Impacted by the Recent COVID-19 Pandemic.

 

The COVID-19 pandemic has negatively affected the U.S. and global economy, resulted in significant travel restrictions, including mandated closures and orders to “shelter-in-place,” and created significant disruption of the financial markets. We are closely monitoring the impact of the COVID-19 pandemic on all aspects of our business, including how it will impact our customers, employees and, suppliers. We are unable to predict the ultimate impact that it may have on our business, future results of operations, financial position or cash flows.

 

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The extent to which our operations may eventually be impacted by the COVID-19 pandemic will depend largely on future developments, which are highly uncertain and cannot be accurately predicted, including new information which may emerge concerning the severity of the outbreak and actions by government authorities to contain the outbreak or treat its impact. Even after the COVID-19 pandemic has subsided, we may experience materially adverse impacts to our business due to any resulting economic recession or depression. Furthermore, the impacts of a potential worsening of global economic conditions and the continued disruptions to and volatility in the financial markets remain unknown. The impact of the COVID-19 pandemic may also exacerbate other risks discussed in these risk factors, any of which could have a material effect on us. This situation is changing rapidly and additional impacts may arise that we are not aware of currently.

 

The Exchange of Our Notes May Result in a Substantial Increase in Our Outstanding Shares

 

We currently have outstanding an aggregate of $1.069,375 in principal amount of promissory notes. We anticipate that all or substantially all of the notes will be exchanged for shares of our Common Stock at the final offering price of this Offering. If all of the notes are so exchanged, we will be required to issue a substantial number of shares, the amount of which will depend upon the per share price of this Offering.

 

The Company May Undertake Additional Equity or Debt Financing That May Dilute The Shares In This Offering

 

The Company may undertake further equity or debt financing which may be dilutive to existing shareholders, including you, or result in an issuance of securities whose rights, preferences and privileges are senior to those of existing shareholders, including you, and also reducing the value of Shares subscribed for under this Offering.

 

An Investment In The Shares Is Speculative And There Can Be No Assurance Of Any Return On Any Such Investment

 

An investment in the Company’s Shares is speculative and there is no assurance that investors will obtain any return on their investment. Investors will be subject to substantial risks involved in an investment in the Company, including the risk of losing their entire investment.

 

The Shares Are Offered On A “Best Efforts” Basis And The Company May Not Raise The Maximum Amount Being Offered

 

Since the Company is Offering the Shares on a “best efforts” basis, there is no assurance that the Company will sell enough Shares to meet its capital needs. If you purchase Shares in this Offering, you will do so without any assurance that the Company will raise enough money to satisfy the full USE OF PROCEEDS TO COMPANY which the Company has outlined in this Offering Circular or to meet the Company’s working capital needs.

 

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If The Maximum Offering Is Not Raised, It May Increase The Amount Of Long-Term Debt Or The Amount Of Additional Equity It Needs To Raise

 

There is no assurance that the maximum amount of Shares in this Offering will be sold. If the maximum Offering amount is not sold, we may need to incur additional debt or raise additional equity in order to finance our operations. Increasing the amount of debt will increase our debt service obligations and make less cash available for distribution to our shareholders. Increasing the amount of additional equity that we will have to seek in the future will further dilute those investors participating in this Offering.

 

We Have Not Paid Dividends In The Past And Do Not Expect To Pay Dividends In The Foreseeable Future, So Any Return On Investment May Be Limited To The Value Of Our Shares

 

We have never paid cash dividends on our Shares and do not anticipate paying cash dividends in the foreseeable future. The payment of dividends on our Shares will depend on earnings, financial condition and other business and economic factors affecting it at such time that management may consider relevant. If we do not pay dividends, our Shares may be less valuable because a return on your investment will only occur if its stock price appreciates.

 

The Company May Not Be Able To Obtain Additional Financing

 

Even if the Company is successful in selling the maximum number of Shares in the Offering, the Company may require additional funds to continue and grow its business. The Company may not be able to obtain additional financing as needed, on acceptable terms, or at all, which would force the Company to delay its plans for growth and implementation of its strategy which could seriously harm its business, financial condition and results of operations. If the Company needs additional funds, the Company may seek to obtain them primarily through additional equity or debt financings. Those additional financings could result in dilution to the Company’s current shareholders and to you if you invest in this Offering.

 

An Investment in the Company’s Shares Could Result In A Loss of Your Entire Investment

 

An investment in the Company’s Shares offered in this Offering involves a high degree of risk and you should not purchase the Shares if you cannot afford the loss of your entire investment. You may not be able to liquidate your investment for any reason in the near future.

 

There Is No Assurance The Company Will Be Able To Pay Distributions To Shareholders

 

While the Company may choose to pay distributions at some point in the future to its shareholders, there can be no assurance that cash flow and profits will allow such distributions to be made.

 

There is Presently Limited Public Trading Market for the Company’s Shares

 

At present, there is limited public trading market for the Company’s securities and the Company cannot assure that an active trading market will develop.

 

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Sales Of Our Shares By Insiders Under Rule 144 Or Otherwise Could Reduce The Price Of Our Shares, If A Trading Market Should Develop

 

Certain officers, directors and/or other insiders may hold shares in the Company and may be able to sell their stock in a trading market if one should develop. The availability for sale of substantial amounts of stock by officers, directors and/or other insiders could reduce prevailing market prices for our securities in any trading market that may develop.

 

Sales Of A Substantial Number Of Shares Of Our Type Of Stock May Cause The Price Of Our Type Of Stock To Decline

 

Should an active market develop and our shareholders sell substantial amounts of our shares in the public market, shares sold may cause the price to decrease below the current Offering price. These sales may also make it more difficult for us to sell equity or equity-related securities at a time and price that we deem reasonable or appropriate.

 

The Company Has Made Assumptions In Its Projections and In Forward-Looking Statements That May Not Be Accurate

 

The discussions and information in this Offering Circular may contain both historical and “forward-looking statements” which can be identified by the use of forward-looking terminology including the terms “believes,” “anticipates,” “continues,” “expects,” “intends,” “may,” “will,” “would,” “should,” or, in each case, their negative or other variations or comparable terminology. You should not place undue reliance on forward-looking statements. These forward-looking statements include matters that are not historical facts. Forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward-looking statements contained in this Offering Circular, based on past trends or activities, should not be taken as a representation that such trends or activities will continue in the future. To the extent that the Offering Circular contains forward-looking statements regarding the financial condition, operating results, business prospects, or any other aspect of the Company’s business, please be advised that the Company’s actual financial condition, operating results, and business performance may differ materially from that projected or estimated by the Company. The Company has attempted to identify, in context, certain of the factors it currently believes may cause actual future experience and results to differ from its current expectations. The differences may be caused by a variety of factors, including but not limited to adverse economic conditions, lack of market acceptance, reduction of consumer demand, unexpected costs and operating deficits, lower sales and revenues than forecast, default on leases or other indebtedness, loss of suppliers, loss of supply, loss of distribution and service contracts, price increases for capital, supplies and materials, inadequate capital, inability to raise capital or financing, failure to obtain customers, loss of customers and failure to obtain new customers, the risk of litigation and administrative proceedings involving the Company or its employees, loss of government licenses and permits or failure to obtain them, higher than anticipated labor costs, the possible acquisition of new businesses or products that result in operating losses or that do not perform as anticipated, resulting in unanticipated losses, the possible fluctuation and volatility of the Company’s operating results and financial condition, adverse publicity and news coverage, inability to carry out marketing and sales plans, loss of key executives, changes in interest rates, inflationary factors, and other specific risks that may be referred to in this Offering Circular or in other reports issued by us or by third-party publishers.

 

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The Company Has Significant Discretion Over The Net Proceeds Of This Offering

 

The Company has significant discretion over the net proceeds of this Offering. As is the case with any business, particularly one without a proven business model, it should be expected that certain expenses unforeseeable to management at this juncture will arise in the future. There can be no assurance that management’s use of proceeds generated through this Offering will prove optimal or translate into revenue or profitability for the Company. Investors are urged to consult with their attorneys, accountants and personal investment advisors prior to making any decision to invest in the Company.

 

The Offering Price For the Shares Has Been Determined By The Company

 

The price at which the Shares are being offered has been arbitrarily determined by the Company. There is no relationship between the Offering price and our assets, book value, net worth, or any other economic or recognized criteria of value. Rather, the price of the Shares was derived as a result of internal decisions based upon various factors including prevailing market conditions, our future prospects and our capital structure. These prices do not necessarily accurately reflect the actual value of the Shares or the price that may be realized upon disposition of the Shares.

 

The Shares In This Offering Have No Protective Provisions.

 

The Shares in this Offering have no protective provisions. As such, you will not be afforded protection, as a shareholder in the event of a transaction that may adversely affect you, including a reorganization, restructuring, merger or other similar transaction involving the Company. If there is a “liquidation event” or “change of control” the Shares being offered do not provide you with any protection. In addition, there are no provisions attached to the Shares in the Offering that would permit you to require the Company to repurchase the Shares in the event of a takeover, recapitalization or similar transaction.

 

No Guarantee of Return on Investment

 

There is no assurance that you will realize a return on your investment or that you will not lose your entire investment. For this reason, you should read this Form 1-A Offering Circular and all exhibits and referenced materials carefully and should consult with your own attorney and business advisor prior to making any investment decision.

 

Our Series A Redeemable Preferred Stock Contains Redemption Provisions

 

Commencing on the first day of the month immediately following the date when we receive $1,000,000 in net proceeds from this Offering, and on the first day of each three month anniversary thereafter, we are required to redeem 25% of the net proceeds received during the applicable three month period up to 250,000 shares of preferred stock at a price payable equal to $1 per share until all 2,000,000 shares ($2,000,000) have been redeemed. The aggregate amount of redemption payments will be used to provide working capital to our 100BIO subsidiary.

 

Our Series B and Series C Preferred Stock Contain Anti-Dilution Protection

 

The holders of our Series B and Series C Preferred Stock have anti-dilution rights protecting their interests in the Company from the issuance of any additional shares of capital stock (such as the issuance of shares of Common Stock pursuant to this offering) for a two year period following conversion of the Series B and Series C Preferred Stock into Common Stock each calculated at the rate of 20% on a fully diluted basis. The anti-dilution provisions may have the effect of making it more difficult for us to raise funds for the period that such provision is in effect.

 

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IN ADDITION TO THE RISKS LISTED ABOVE, BUSINESSES ARE OFTEN SUBJECT TO RISKS NOT FORESEEN OR FULLY APPRECIATED BY THE MANAGEMENT. IT IS NOT POSSIBLE TO FORESEE ALL RISKS THAT MAY AFFECT THE COMPANY. MOREOVER, THE COMPANY CANNOT PREDICT WHETHER THE COMPANY WILL SUCCESSFULLY EFFECTUATE THE COMPANY’S CURRENT BUSINESS PLAN. EACH PROSPECTIVE PURCHASER IS ENCOURAGED TO CAREFULLY ANALYZE THE RISKS AND MERITS OF AN INVESTMENT IN THE SECURITIES AND SHOULD TAKE INTO CONSIDERATION WHEN MAKING SUCH ANALYSIS, AMONG OTHER FACTORS, THE RISK FACTORS DISCUSSED ABOVE.

 

USE OF PROCEEDS TO COMPANY

 

The Use of Proceeds is an estimate based on the Company’s current business plan. We may find it necessary or advisable to reallocate portions of the net proceeds reserved for one category to another, or to add additional categories, and we will have broad discretion in doing so. For example, if our research and development activities need to be bolstered beyond our initial estimates, we may allocate additional resources by reallocating proceeds from other categories such as marketing for the purposes of research and development. We do not believe we will reallocate from our fixed costs such as equipment or rent.

 

The maximum gross proceeds from the sale of the Shares in this Offering are $7,500,000. The net proceeds from the Offering, assuming it is fully subscribed, are expected to be approximately $7,425,000 after the payment of Offering costs excluding potential broker-dealer and selling commissions, printing, mailing, marketing, legal and accounting costs, and other compliance and professional fees that may be incurred, which we estimate at $95,000. The estimate of the budget for Offering costs is an estimate only and the actual Offering costs may differ from those expected by management.

 

A portion of the proceeds from this Offering may ultimately be used to compensate or otherwise make payments to officers or directors of the Company. The officers and directors of the Company may be paid salaries or fees and receive benefits that are commensurate with similar companies, and a portion of the proceeds may be used to pay these ongoing business expenses.

 

The Company has issued promissory notes in the aggregate principal amount of $1,069,375 We expect to have all or a substantial portion of these notes exchanged for shares of our common stock at the Offering Price. The amount of shares so issued will in part depend upon the per share price of this offering.

 

Additionally, up to $2,000,000 of the net proceeds will be used to redeem shares of the Company’s Series A Redeemable Preferred Stock owned by the Company’s 51% owned subsidiary, 100BIO, LLC which will be used for the business of 100BIO.

 

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The Company reserves the right to change the use of proceeds set out herein based on the needs of the ongoing business of the Company and the discretion of the Company’s management. The Company may reallocate the estimated use of proceeds among the various categories or for other uses if management deems such a reallocation to be appropriate. Until sufficient funds are raised by the Company to sufficiently fund our activities, management may utilize some or all of the funds from this Offering for further capital raising efforts, rather than as set out in this Use of Proceeds section of the Offering Circular.

  

Use of Funds
Capital Raised     25 %*     50 %     75 %     100 %
Net Offering Proceeds     1,875,000       3,750,000       5,625,000       7,500,000  
                                 
100Bio Acquisition     150,000       600,000       1,400,000       2,000,000  
Payroll     391,547       863,349       1,433,520       1.911,360  
Audit     50,000       50,000       50,000       50,000  
Marketing Expenses     74,664       189,328       248,992       308,656  
Legal     50,000       50,000       50,000       50,000  
Other SG&A     74,414       324,952       770,117       891,143  
Transfer Agent     15,000       15,000       15,000       15,000  
Notes Payable     1,069,375       1,069,375       1,069,375       1,069,375  
Equity in Project Finance           360,000       360,000       720,000  
Project Finance Interest           227,996       227,996       484,466  
                               
Debt Service for Project Finance                                
Total     1,875,000       3,750,000       5,625,000       7,500,000  
*                                

 

  *Six Months

 


1. Total expenditures for this Offering are anticipated to be $95,000. These direct and indirect expenditures include primarily SEC legal, preliminary legal and accounting, auditing services, Transfer Agent fees, OTC Market fees, marketing expenses, digital advertising expenses, and filing fees, and other similar expenses related to the Regulation A Offering.
   
2. The Company has not currently engaged a registered Broker/Dealer but may do so at some time in the future.
   
6. It is the intention of Management to utilize working capital to specifically fund the capital requirements for ongoing day-to-day operations other than those which are otherwise detailed above. This will include legal, accounting, and licensing fees.

 

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DESCRIPTION OF NOTES
    Date of Note Issuance   Outstanding Balance ($)   Principal Amount at Issuance ($)   Interest Accrued ($)   Maturity Date   Name of Noteholder
  1     November 25, 2020   $ 110,000     $ 110,000     $ 1,266     The earlier of first Proceeds from the Reg A Offering or November 25, 2021   Greentree Financial Group
  2     January 8, 2021   $ 200,000     $ 200,000       0     The earlier of first Proceeds from the Reg A Offering or January 8, 2022   Crosslake Capital, LLC
  3     January 11, 2021   $ 50,000     $ 50,000       0     The earlier of first Proceeds from the Reg A Offering or January 11, 2022   Michael Magliochetti
  4     January 11, 2021   $ 50,000     $ 50,000       0     The earlier of first Proceeds from the Reg A Offering or January 11, 2022   Always Energy, LLC
  5     January 12, 2021   $ 100,000     $ 100,000       0     The earlier of first Proceeds from the Reg A Offering or January 12, 2022   Magliochetti Family 2009 Irrevocable Trust
  6     January 12, 2021   $ 200,000     $ 200,000       0     The earlier of first Proceeds from the Reg A Offering or January 12, 2022   GW Holdings Group, LLC
  7     January 12, 2021   $ 200,000     $ 200,000       0     The earlier of first Proceeds from the Reg A Offering or January 12, 2022   Tiger Trout Capital Puerto Rico, LLC
  8     January 27, 2021   $ 159,375     $ 159,375       0     The earlier of first Proceeds from the Reg A Offering or September 27, 2022   Eagle Equities, LLC

  

Description of Liabilities   Amount
Accrued Compensation:Dan Bates   $ 45,000  
Accrued Compensation:Christopher Percy   $ 87,500  
Loan payable:Brad Stuart   $ 114,500  
Accounts Payable:        
Sheppard Mullin   $ 44,263  
Tracy Anderson   $ 4,896  
    $ 262,159  

 

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DETERMINATION OF OFFERING PRICE

 

This Offering is a self-underwritten Offering, which means that it does not involve the participation of an underwriter to market, distribute or sell the common stock offered under this Offering. Our Offering Price is arbitrary with no relation to value of the company.

 

Prior to the Offering, there has been no public market for the Offered Shares. The public offering price was determined by the Company. The principal factors considered in determining the public offering price include:

 

 -the information set forth in this Offering Circular and otherwise available;

 

-our history and prospects and the history of and prospects for the industry in which we compete;

 

-our past and present financial performance;

 

-our prospects for future earnings and the present state of our development;

 

-the general condition of the securities markets at the time of this Offering;

 

-the recent market prices of, and demand for, publicly traded common stock of generally comparable companies; and

 

-other factors deemed relevant by us.

 

If all of the Shares in this Offering are fully subscribed and sold at the lowest Offering Price, the 375,000,000 Shares offered herein will constitute approximately 61% of the total Shares of Common Stock of the Company.

 

DILUTION

 

The term “dilution” refers to the reduction (as a percentage of the aggregate Shares outstanding) that occurs for any given share of stock when additional Shares are issued. If all of the Shares in this Offering are fully subscribed and sold at the lowest offering price, the Shares offered herein will constitute approximately 51% of the total Common Shares of stock of the Company. The Company anticipates that subsequent to this Offering the Company may require additional capital and such capital may take the form of Common Stock, other stock or securities or debt convertible into stock. Such future fund raising will further dilute the percentage ownership of the Shares sold herein in the Company.

 

If you invest in our Common Stock, your interest will be diluted immediately to the extent of the difference between the Offering price per share of our Common Stock and the pro forma net tangible book value per share of our Common Stock after this Offering. Based on 97,208,515 Shares of Common Stock issued and outstanding as of the date of this Offering Circular, that equates to a net tangible book value of approximately $(0.02) per share of Common Stock on a pro forma basis. Net tangible book value per share consists of shareholders’ equity adjusted for the retained earnings (deficit), divided by the total number of Shares of Common Stock outstanding. The pro forma net tangible book value, assuming full subscription in this Offering and receipt of $7,500,000 in net proceeds, would be $0.04 per share of Common Stock. The following table compares the differences of your investment in our shares with the investment of our existing shareholders.

 

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Existing shareholders if all of the shares are sold:

 

Existing shareholders based upon percentage of shares being offered     100%       75%       50%       25%  
Shares issued in the offering     37,500,000       28,125,000       18.750.000       9,375,000  
Public offering price per share   $ 0.20     $ 0.20     $ 0.20     $ 0.20  
Net tangible book value per share before the offering   $ (0.02 )   $ (0.02 )   $ (0.02 )   $ (0.02 )
Net tangible book value per share after the offering   $ 0.04     $ 0.03     $ 0.02     $ 0.00  
Increase to present shareholders in net tangible book                                
value per share after offering   $ 0.04     $ 0.03     $ 0.04     $ 0.02  
Dilution to new investors per share   $ 0.16     $ 0.17     $ 0.18     $ 0.20  
Percentage of ownership after offering     27.8 %     22.4 %     32.5 %     8.8 %
Total shares issued and outstanding after the offering     134,708,515       125,333,515       115,958,515       106,583,515  

 

PLAN OF DISTRIBUTION

 
We are Offering a maximum of 375,000,000 Shares that are being offered on a “best efforts” basis, which means that there is no guarantee that any minimum amount will be sold. There are up to 375,000,000 Shares being offered at a price of between $0.02 to $0.20 per Share with no minimum purchase. The Shares are being offered on a best-efforts basis to an unlimited number of accredited investors and an unlimited number of non-accredited investors only by the Company. The maximum aggregate amount of the Shares offered is 375,000,000 (the “Maximum Offering”). There is no minimum number of Shares that needs to be sold in order for funds to be released to the Company and for this Offering to close.


The Company will not initially sell the Shares through commissioned broker-dealers, but may do so after the commencement of the Offering. Any such arrangement will add to our expenses in connection with the Offering. If we engage one or more commissioned sales agents or underwriters, we will supplement this Form 1-A to describe the arrangement. Funds tendered by investors will be kept in an account in the name of the Company and will be immediately available to the Company. All subscribers will be instructed by the Company or its agents to transfer funds by wire, check, credit or debit cards or ACH transfer directly to the bank account established for this Offering or deliver checks made payable to “Byzen Digital Inc.” Subscribers have no right to a return of their funds unless the Company rejects a subscription agreement within ten (10) days of tender, in which event investor funds will promptly be refunded to each investor without interest. The Company may terminate the Offering at any time for any reason at its sole discretion and may extend the Offering past the Closing Date in the absolutely discretion of the Company and in accordance with the rules and provisions of Regulation A of the JOBS Act. None of the Shares being sold in this Offering are being sold by existing securities holders.


After the Offering Statement has been qualified by the Securities and Exchange Commission (the “SEC”), the Company will accept tenders of funds to purchase the Shares. The Company does not intend to use an escrow agent as this is a “best efforts” Offering and funds will be available immediately to the Company for use.


We initially will use our existing website, www.byzendigital.com, to provide notification of the Offering. This Preliminary Offering Circular will be furnished to prospective investors via download 24 hours per day, 7 days per week on the www.byzendigital.com website.

 

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You will be required to complete a subscription agreement in order to invest. The subscription agreement includes a representation to the effect that, if you are not an “accredited investor” as defined under securities law, you are investing an amount that does not exceed the greater of 10% of your annual income or 10% of your net worth, as described in the subscription agreement.

 

Funds will be made immediately available to the Company. No escrow account will be utilized. If a subscription is rejected, funds will be returned to subscribers within ten days of such rejection without deduction or interest. Upon acceptance by us of a subscription, a confirmation of such acceptance will be sent to the subscriber by the Company. All inquiries regarding this Offering should be made directly to the Company.

 

This Offering will commence on the qualification of this Offering Circular, as determined by the Securities and Exchange Commission and continue indefinitely until all of the offered Shares are sold or the Offering is terminated in the Company’s sole discretion. Funds received from investors will be counted towards the Offering only if the form of payment, such as a check, clears the banking system and represents immediately available funds held by us prior to the termination of the subscription period, or prior to the termination of the extended subscription period if extended by the Company.

 

If you decide to subscribe for any of the Shares in this Offering, you must deliver a check, certified funds or another acceptable form of payment for acceptance or rejection. All subscription wire transfers, checks or money orders should be payable to Byzen Digital Inc. and mailed or transmitted to the Company at the following address: 2711 N. Sepulveda Blvd. #1051 Manhattan Beach, California 90266-2725. If a subscription is rejected, all funds will be returned to subscribers within ten days of such rejection without deduction or interest. Upon acceptance by the Company of a subscription, an immediate confirmation of such acceptance will be sent to the investor.

 

The Company maintains the right to accept or reject subscriptions in whole or in part, for any reason or for no reason. All monies from rejected subscriptions will be returned by the Company to the investor, without interest or deductions.

 

This is an Offering made under “Tier 1” of Regulation A, and the shares will not be listed on a registered national securities exchange upon qualification. Therefore, the shares will be sold only to a person if the aggregate purchase price paid by such person is no more than 10% of the greater of such person’s annual income or net worth, not including the value of his primary residence, as calculated under Rule 501 of Regulation D promulgated under Section 4(a)(2) of the Securities Act of 1933, as amended. In the case of sales to fiduciary accounts (Keogh Plans, Individual Retirement Accounts (IRAs) and Qualified Pension/Profit Sharing Plans or Trusts), the above suitability standards must be met by the fiduciary account, the beneficiary of the fiduciary account, or by the donor who directly or indirectly supplies the funds for the purchase of the shares. Investor suitability standards in certain states may be higher than those described in this Form 1-A and/or Offering Circular. These standards represent minimum suitability requirements for prospective investors, and the satisfaction of such standards does not necessarily mean that an investment in the Company is suitable for such persons. Different rules apply to accredited investors.

 

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Each investor must represent in writing that he/she/it meets the applicable requirements set forth above and in the Subscription Agreement, including, among other things, that (i) he/she/it is purchasing the shares for his/her/its own account and (ii) he/she/it has such knowledge and experience in financial and business matters that he/she/it is capable of evaluating without outside assistance the merits and risks of investing in the shares, or he/she/it and his/her/its purchaser representative together have such knowledge and experience that they are capable of evaluating the merits and risks of investing in the shares. Broker-dealers and other persons participating in the Offering must make a reasonable inquiry in order to verify an investor’s suitability for an investment in the company. Transferees of the shares will be required to meet the above suitability standards.

 

The shares may not be offered, sold, transferred, or delivered, directly or indirectly, to any person who (i) is named on the list of “specially designated nationals” or “blocked persons” maintained by the U.S. Office of Foreign Assets Control (“OFAC”) at www.ustreas.gov/offices/enforcement/ofac/sdn or as otherwise published from time to time, (ii) an agency of the government of a Sanctioned Country, (iii) an organization controlled by a Sanctioned Country, or (iv) is a person residing in a Sanctioned Country, to the extent subject to a sanctions program administered by OFAC. A “Sanctioned Country” means a country subject to a sanctions program identified on the list maintained by OFAC and available at www.ustreas.gov/offices/enforcement/ofac/sdn or as otherwise published from time to time. Furthermore, the shares may not be offered, sold, transferred, or delivered, directly or indirectly, to any person who (i) has more than fifteen percent (15%) of its assets in Sanctioned Countries or (ii) derives more than fifteen percent (15%) of its operating income from investments in, or transactions with, sanctioned persons or Sanctioned Countries.

 

The sale of other securities of the same class as those to be offered for the period of distribution will be limited and restricted to those sold through this Offering. Because the Shares being sold are not publicly or otherwise traded, the market for the securities offered is presently stabilized.

 

DESCRIPTION OF THE BUSINESS

 

Overview:

 

Byzen Digital was established in 2017 as a company focused on the acquisition of disruptive technologies that will impact the digital economy. Byzen has worked with and nurtured companies across a broad spectrum of technologies. Byzen’s scope of interest is to include companies operating within the clean energy and sustainable market sector. Acquisitions of strategic interest for the company include renewable energy, including wind, solar and sustainable fuels, sustainable packaging, water purification, AI technologies, and blockchain-based data collection, management, and delivery. Byzen Digital plans to change its name to Clean Vision Corporation.

 

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Clean Seas, Inc.:

 

Clean-Seas, Inc. is Byzen Digital’s first investment within its newly expanded scope. The acquisition of 100% of Clean Seas is Byzen Digital’s first entry into the clean energy space. Clean Seas has made significant progress in identifying and developing a new business model around the clean energy and waste to energy sectors. Byzen’s management team will integrate the two companies into a single, clean energy-focused corporation.

 

Clean Seas, a Solutions Provider:

 

Clean Seas, Inc. was established to solve the problem of cost-effectively upcycling the vast amount of waste plastic generated on-land before it flows into the world’s oceans. As a “solutions provider,” Clean Seas has identified best in class technologies that are uniquely suited to upcycle plastic waste into valuable commodities and provide these technologies to its customers. The Clean Seas team of business development professionals and engineers will use its experience in the sustainable energy space to deliver high-quality upcycling technologies to its customers and strategic partners. Depending on customer requirements, recycling facilities will be designed to convert waste plastic into clean-burning hydrogen, synthetic liquid fuels and/or generate electricity from synthesis gas (syngas). The solutions provided will utilize technologies uniquely designed to the specific waste feedstock available and the customer’s requirements.

 

System design includes upcycling of all types of mixed plastics with a minimal sorting and cleaning requirement. Each solution will be designed to a customer’s situation. Each engagement will begin with a thorough analysis of a customers’ needs and individual situation.

 

Technology Overview:

 

Plastics Explored:

 

Plastic is a generic term for a wide range of polymers produced using highly refined fractionation of crude oil, or chemicals derived from crude oil, known as monomers. Polymers are formed by the chemical combination of these monomers, which results in chain lengths of tens or hundreds of thousands of carbon atoms.

 

The process of conversion of plastics into hydrogen and other sustainable products comprises of two steps. First, the long polymer chains need to be broken down to produce compounds with shorter chains of hydrocarbons. Second, impurities such as chlorine and sulfur need to be removed reduce toxicity of emissions. Both steps are performed with minimal presence of oxygen to avoid combustion.

 

Recycled plastic waste has the highest calorific value of any waste stream. This energy-rich waste material is an obvious target for upcycling to recapture the benefit of its stored chemical energy.

 

Pyrolysis: The Solution for Waste Reduction, Hydrogen Production, and Cleaner Fuels

 

Pyrolysis is a thermochemical treatment, which can be applied to any organic (carbon-based) product. In this treatment, the material is exposed to temperatures in the 300 C – 800 C range and then, in the absence of oxygen, goes through chemical and physical decomposition into smaller molecules.

 

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Plastic pyrolysis is a chemical reaction involving the molecular breakdown of large group molecules into smaller group molecules in the presence of heat. Pyrolysis is also known as thermal cracking, cracking, thermolysis, depolymerization, etc.

 

Pyrolysis is a mature and proven technology that has existed since World War II. Indigenous tribes in Central and South America used pyrolysis as early as five hundred years ago to convert agricultural residue into carbon-based fertilizer by burning it underground with limited oxygen. Still, there have been relatively few large-scale implementations of this technology to date, primarily stemming from the availability of less expensive alternatives and lax environmental regulations in waste management. Recently, with the attention being given to plastic usage and its negative impact on climate change, there has been a significant increase in demand for pyrolysis to remediate plastic waste safely and reliably.

 

Pyrolysis Process:

 

The pyrolysis mechanism can be broken down into two steps: primary and secondary pyrolysis.

 

During the primary pyrolysis step, depolymerization and cross-linking reactions occur.

 

The plastic is pyrolyzed at 370ºC – 420ºC, and the pyrolysis gases are condensed, and liquid separated using fractional distillation to produce the liquid fuel products. Plastic waste is continuously treated in a cylindrical chamber, and the pyrolytic gases are condensed in a purpose built condenser system to yield a hydrocarbon distillate comprising straight and branched-chain aliphatics, cyclic aliphatics, and aromatic hydrocarbons. The resulting mixture is essentially equivalent to petroleum distillate.

 

The essential steps in the pyrolysis of plastic waste involve:

  1. Evenly heating the plastic to a narrow temperature range without excessive temperature variations.
  2. Purging oxygen from the pyrolysis chamber.
  3. Managing the carbonaceous bio-char by-product before it acts as a thermal insulator and lowers the heat transfer to the plastic.
  4. Careful condensation and fractionation of the pyrolysis vapors to produce distillate of good quality and consistency.

 

Pyrolysis Process Methods:

 

Pyrolysis can produce hydrogen and other syngases (primarily carbon monoxide, methane, nitrogen, carbon dioxide, ethane and ethene) along with liquid and solid char, of which the relative proportions depend upon the method of pyrolysis and the operating conditions of the pyrolysis reactor. This is a function of the rate of heating, the operating temperature, and the residence time within the pyrolysis reactor.

 

As the residence time is reduced and the heating rate is increased, the proportion of liquids produced increases as there is sufficient heat in the system to boil off any compounds formed by the breaking of polymer chains.

 

Short residence times and higher temperatures (> 800 C) lead to conditions where pyrolysis turns into gasification and produce larger quantities of hydrogen and other marketable syngases and less solid and liquid byproducts.

 

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The Hydrogen Economy:

 

Hydrogen is the most abundant element in the universe, yet it does not naturally exist in pure form on earth in large quantities. Humans are therefore just beginning to take advantage of the many usages of hydrogen in daily life by leveraging technologies such as pyrolysis and gasification (steam-methane reforming from fossil fuels is the more popular source of commercially available hydrogen in the world today). With recent advances in sustainable technologies, people today can have better access to carbon-neutral sources of hydrogen to meet their energy needs.

 

Hydrogen is extremely versatile and will play a key role in the transformation of the global economy’s decarbonization since it does not produce carbon dioxide or other greenhouse gases (GHG) when it is burnt. There is massive potential for end use applications such as transportation, replacement for fossil fuels used in industrial process, energy generation and residential heating/cooling.

 

Hydrogen Production:

 

For plastics to continue to be accepted in the marketplace, it is essential that appropriate technologies are developed and deployed that can effectively manage the waste plastic at the end of its useful life. These technologies should maintain as much value in the material as possible, in line with the principles of the circular carbon economy. Pyrolysis provides a solution that fits within these principles and can alleviate global environmental concerns regarding plastic usage and waste disposal.

 

Overview of the Hydrogen Market:

 

The global green hydrogen market size is valued at approx. 750 million dollars in 2019. It is expected to have a 14.2% growth rate from 2020 to 2027, according to an analysis conducted by Grand View Research1.

 

The movement towards the reduction in greenhouse gas emissions has been an established mandate over the past decade. Hydrogen will be a key part of this transition, as a source of clean and economical energy. Increasing government regulation regarding emissions will create a financial incentive for firms to seek more alternatives to fossil fuel usage. Hydrogen will be a major part of all levels of this decarbonization of the economy by providing an alternative to natural gas. This includes enabling of distributed power generation, passenger and cargo transportation as well as forklifts and heavy machinery.

 

Storage of energy from intermittent renewable energy sources (solar and wind power) is one of the most immediate issues that need to be resolved before decarbonization of energy production can be fully realized. Hydrogen is an economical and practical way to provide large scale energy storage capacity for intermittent energy sources that are being deployed on a global scale today.

 

Currently, industrial applications constitute the main usage of hydrogen. Much of this hydrogen is derived from natural gas as the feedstock, so there is significant potential for reducing greenhouse gas emissions by producing “clean” hydrogen from carbon neutral renewable energy sources.

 


1https://www.grandviewresearch.com/industry-analysis/green-hydrogen-market

 

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Hydrogen also has a significant application for commercial, multifamily, and single-family residential heating. In the near-term future, hydrogen can be blended into existing natural gas networks, taking advantage of existing infrastructure. The long-term outlook for hydrogen usage in heating applications is especially promising, with the potential for hydrogen boilers or fuel cells being built into commercial and multifamily units.

 

Within the next decade, roughly 80 million zero-emission vehicles will be deployed. Hydrogen-powered vehicles will be a significant percentage of these vehicles. As the number of hydrogen-powered vehicles increases, the market for consumer hydrogen will likewise increase. Domestically, most infrastructure for consumer hydrogen is within California, with over 40 hydrogen fueling stations. The foreign market has examples of more advanced development of infrastructure for hydrogen vehicles. Japan has been one of the largest public investors in hydrogen technology and has a publicly stated goal of placing over 800,000 hydrogen-powered vehicles on the road within the next decade.

 

Other Fuels from Pyrolysis

 

Liquid oils from pyrolysis of different plastic waste types contain large numbers of carbon chains with different percentages that can be used as an energy source. Pyrolysis liquid oil utilization as transport fuel may be blended with conventional diesel to improve its quality, as the pyrolysis oils contain a high percentage of aromatic hydrocarbons (like benzene).

 

The use of pyrolysis liquid oil as a substitute transport fuel has been used successfully and in blending with conventional diesel at different ratios produces a highly efficient fuel for either road grade or marine grade diesel. The use of pyrolysis liquid oil in a diesel engine (gen-set) is also an efficient way to generate electricity. In addition, the produced liquid oil shows the presence of aromatic compounds such as styrene, ethylbenzene, and toluene, along with other styrene monomers. The recovery of these aromatic compounds from produced liquid oils can be a source of precursor chemicals in industries for the polymerization of new plastic monomers. These compounds create the circular carbon economy of recycling waste plastic into new forms of hydrocarbons to power engines, generate electricity, or new types of plastic products.

 

Char or carbon black is also a highly reusable by-product of the pyrolysis process that has numerous existing applications. Secondary treatment for activation of char increases its surface area, enhancing its ability to be used as an absorbent filtration material for heavy metals, odor, and toxic gases removal from wastewater and exhaust emissions. The activated char is widely used for the absorption of dyes and other contaminants in wastewater. Char has also been used as a fertilizer to increase crop yields. Carbon black can also be used to make graphene and carbon fiber using advanced nanotechnologies. This process can reduce the need for mining natural graphite and the related environmental pollution.

 

Electricity Production:

 

Pyrolysis oils are found to have ranges of dynamic viscosity of 1.77-1.9O mPa and kinematic viscosity of 1.92-2.09 c and HHV of 41.4-41.8MJ/kg, like conventional diesel, thus have the potential for use as an alternative energy source for electric generation.

 

The other main product of pyrolysis is a volatile fraction composed of gases depending on the elasticity of the feedstock. The above is also true for the pyrolysis gases “syngas” when produced, can subsequently be used for electricity generation.

 

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Clean-Seas will use the recycled pyrolysis diesel oil and hydrogen for on-site green power generation. This will come in the form of multiple large generators with direct feeds from the pyrolysis plants to efficiently produce electricity and eliminate the need for transportation of hazardous materials and storage costs.

 

The quality of the recycling by-products generated depends greatly on the quality of the feedstock being utilized by the system. The higher the quality, the higher the yield of reusable by-products. Access to feedstock will be a key matrix by which the facility will achieve profitability.

 

With the world’s supply of waste plastic growing daily, it is a given that there will be an abundant supply of plastic waste feedstock from which Clean-Seas will generate the desired reusable fuels and electricity to meet any customer’s requirement.

 

Business Model:

 

As the owner/operator of the recycling facility, Clean Seas generates revenue from operations in several ways:

 

Gate Fees or Tipping Fees – these fees are paid to the company to accept the waste plastic from a government, municipality, or corporate entity that must dispose of its waste. Fees are paid to the company to accept this feedstock and are paid on a per ton basis. Gate fees vary in range from $20 USD to as high as $150 USD depending on the jurisdiction, land availability, and daily volumes of waste.

 

Power Purchase Agreement (PPA) – a PPA is a contract with a utility company or off-taker which defines the price of electricity paid to the company on a per kWh or MWh basis. A typical PPA has a term of 20 years with escalations over time. A recycling facility with a consistent source of feedstock will generate power 24/7 with approximately 90% capacity factor, resulting in a much more consistent source of energy than a solar or wind farm, which typically will have capacity factors ranging from 20 to 35% annually without large scale electric storage.

 

Sale of Hydrogen and other fuels – A plastic recycling facility converts waste plastic into hydrogen and other clean-burning fuels. This hydrogen and other fuels can be sold to off-takers as an alternative cleaner fuel for marine use, electrical generators, or refined into a clean-burning road grade fuel. Depending on the installation, this fuels output product can be sold to a local fuel distributor or used in the gen-sets for the generation of electricity as above.

 

Commodity Sales – an additional output product of the technologies is “char” or “carbon black,” which is used for the manufacturing of tires, bonding agents, roadway surfaces, and more. Agreements will be established with consumers of carbon black, which will serve as an additional revenue stream to the company.

 

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Environmental Credits – recycling of waste plastic mitigates the need for fossil fuels for energy generation and the production of clean-burning diesel. These off-sets will be aggregated and sold to users of fossil fuels in the form of carbon credits or renewable energy credits depending on the location of the facilities and local market conditions. The company expects that these environmental commodities will be in great demand on the carbon market and serve as an additional high-value revenue stream. These can be used as off-set as more governments impose “Carbon-tax” on the end users of fossil fuels. In addition, the company expects that in the coming years, there will be new exchanges coming online specifically focused on plastic waste, and credits will be sought after, allowing producers of plastic waste to off-set their plastic footprint, much like what has happened in the carbon markets.

 

Equipment sales – in some cases, Clean Seas will sell, through its distribution agreements with technology providers, the recycling equipment needed to start up a fully functional recycling facility. This sale will provide a revenue stream to the company as well as recurring revenue through a royalty model and ongoing service and maintenance contracts.

 

Consulting – using the company’s technical and waste handling expertise, the Clean Seas team may, in some cases, provide consulting services for a fee to customers seeking to engage the company for an analysis of the viability of a recycling facility.

 

Market Size and Opportunity:

 

The world produces more than 381 million tons of plastic waste annually and is expected to double by 2034.2 It is estimated that greater than 1 million plastic bottles are sold every minute worldwide. It is estimated that by 2050, there will be more plastic in the ocean by weight than fish. Fifty percent of the world’s plastic since 1950 has been manufactured since the year 2000, yet only 9% of that plastic has been recycled to date.

 

According to a McKinsey and Company analysis, the waste plastics recycling industry is poised to become a $55 billion dollar industry by 2030.3 Pyrolysis/gasification is an invaluable technology to treat mixed polymer streams, which mechanical recycling technologies currently cannot handle. Pyrolysis/gasification is also an important alternative solution to handling polymers that have exhausted their potential for further mechanical recycling.

 

Several pyrolysis/gasification players are coming forward, offering a range of facilities from large-scale plants with capacities of 30,000 to 100,000 metric tons a year to many smaller-scale modular units with capacity up to 3,000 metric tons a year.

 

The emerging markets of the world are especially critical to the plastic pollution problem, where waste handling and collection are not supported with the same infrastructure as in developed nations. This market condition presents a unique opportunity for the company. Clean-Seas is poised to use its experience in the renewable energy sector in emerging economies and leverage that experience to provide upcycling solutions and energy generation.

 


2https://www.condorferries.co.uk/plastic-in-the-ocean-statistics

 

3https://www.mckinsey.com/industries/chemicals/our-insights/how-plastics-waste-recycling-could-transform-the-chemical-industry

 

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Competitive landscape:

 

As a solutions provider, Clean Seas is well positioned to source best in class pyrolysis/gasification technologies to meet the demands of any specific installation requirement. There are many pyrolysis/gasification technology providers with whom the company expects to seek a strategic partnership as we move forward. This flexibility allows the company to enlist new and emerging technologies as they come to market without the capital requirement of designing and developing proprietary technology.

 

In the near term, the company has developed relationships with several companies that will provide systems for initial installations. It is the belief of the company that direct access to decision-makers in governments and municipalities will be the key differentiator and driver of the Clean Seas business model and securing trusted partnerships through these strategic business relationships will off-set potential competition in the marketplace.

 

Market Traction:

 

Clean Seas has established an operating company in Massachusetts, Clean Seas MA, to serve opportunities located on the East Coast. The company is focusing its efforts to establish recycling facilities in states and municipalities that are environmentally conscious, aware of the plastic pollution problem and have a desire for a positive impact on reducing their carbon footprint.

 

100BIO™

 

Effective October 1, 2020, Byzen Digital acquired a 51% controlling interest in the sustainable packaging company, 100BIO, LLC. 100BIO was established in 2016 to create a 100% plant based, compostable packaging solution to replace conventional Styrofoam packaging. The company has developed and patented a proprietary technology allowing it to offer its technology, under license, to manufacturers of food ware products to replace their current lines with an environmentally friendly solution, demonstrating to its customers and shareholders the company’s commitment to sustainability while promoting positive environmental impact. These products can be used by a myriad of end users in the food packaging, fast food, and food service industries as a well as in traditional packaging solutions where traditional Styrofoam solutions are currently being used.

 

Industry Overview:

 

Globally the state of the food packaging industry is currently split into two parts: low-cost & heat tolerant but environmentally unfriendly foam products, and high-cost poor-performing paper or recyclable products. There has always been a desire for a cost effective and compostable high-performance packaging product, yet until now a solid technological barrier has prevented such a product from coming to market.

 

As countries, municipalities and corporations are moving towards legislation and corporate initiatives, banning or transitioning away from the use of foam cups and containers, they are seeking to get out in front of these legislative changes. To do this, they will need heat-tolerant, quickly composting packaging at low costs in-line with current foam packaging.

 

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100BIO™, a plant-derived compostable food ware line, uses patented foam technology to create a low-cost, resource-friendly, and high-performing solutions for the food-packaging and traditional packaging industries. Equipped with all the attractive performance features of Styrofoam, 100BIO™ is lightweight, sturdy, heat-resistant, and leak resistant, without the toxic, non-renewable features of Styrofoam.

 

Solution:

 

100BIO™, a plant-derived compostable food ware line, uses patented foam technology to create a low-cost, resource-friendly, and high-performing solution for the food-packaging industry. Equipped with all the attractive performance features of Styrofoam, 100BIO™ is lightweight, sturdy, heat-resistant, and leak resistant, without the toxic, non-renewable features of Styrofoam. In addition to having these high-performance features in comparison to its sustainable competitors, 100BIO™ will be able to drastically cut costs by utilizing 60% less raw material due to its foaming process. 100BIO™ represents green innovation at its prime, catering to one of the biggest areas in need: packaging. The sleek, modern grey design looks nothing like what is currently available, putting an attractive face to a much-needed product for both rural and urban communities alike.

 

Some of the attributes of the 100BIO™ technology are:

 

  Sturdy – holds more weight than traditional Styrofoam without snapping or breaking
  Insulating – keeps beverage temperatures stable on the inside with minimum transfer to the outside barrier
  Cut resistant – holds up against cutlery action, preventing leaks
  Shock absorbing – protects fragile produce and products in transport

 

Product Specifications:

 

Description:

100BIO™ is an expanded polylactic acid (PLA) material used for food service packaging and insulation applications. It has excellent insulation characteristics, cut resistant, and leak-proof, as well as high resistance to water and freeze-thaw tolerance.

 

Material Analysis:

Chemical characteristic is analyzed in order to determine any heavy metals that may be found during composting.

 

Biodegradation:

Aerobic biodegradation is tested under a controlled environment in order to mimic a compost facility as well as determining gas emissions whilst composting.

 

Plant Toxicity:

Compost soil is tested to determine ecotoxicity of soil in order to predict plant growth. This plant biomass will later be used in its repurposed form.

 

Material Analysis Result:   Applicable Standards:
     
Zinc 111 ppm   ASTM D5338 PASS
Copper < 1 ppm   ASTM D6400 PASS
Nickel < 1 ppm   ASTM D6868 PASS
Cadmium < .1 ppm   ISO 14855-1 PASS
Lead < 1 ppm   ISO 16929 PASS
Mercury < .1 ppm   ISO 17088 PASS
Chromium < 1 ppm   ISO 18606 PASS
Molybdenum < 1 ppm   EN 13432 PASS
Selenium < .75 ppm   EN 13657 PASS
Arsenic < 1 ppm   EN 14046 PASS
Cobalt < 1 ppm   CAN/BNQ 0017-008 PASS

 

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Technical Data:

Material analysis, biodegradation and plant toxicity test are evaluated in order to meet regulation standards. Because use conditions and applicable law differ from one region to another, Customer must verify local standards.

 

Certifying Agencies:

 

  BPI®-BiodegradableProductsInstitute OKCompost-TÜVAustria
  CedarGrove CradletoCradle
  USDABioPreferredProgram™ GreenRestaurantAssociation
  EN-EuropeanStandard USCompostingCouncil
  CMA - CompostManufacturingAlliance DIN CERTCO

 

Oven Test :

This test is to determine the heat stability of product to determine shipping, handling, and storage instructions. Be advised this test is conducted internally and should not be absolute, but rather a general guide.

 

         Test Result :

Blast Freezer Freezer Refrigerator Room Temp. Heated Display Microwave Oven
0°F / -18°C < StorageTemperatureRange > 130°F / 55°C

 

Hot Water Contact Test:

Product heat tolerance is tested to ensure the heat stability is suitable for intended use. Although product may slightly expand on the surface, true tolerance is determined when the integrity and performance of the product has changed.

 

      Test Result :

Blast Freezer Freezer Refrigerator Room Temp. Heated Display Microwave Oven
0°F / -18°C < StorageTemperatureRange > 180°F / 80°C

 

The 100BIO™ products carry the following certifications:

 

  European Union: EN13432
  United States:

 

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  BPI
  Cedar Grove
  ASTM D6400

  Asia: EL724

 

Business Model:

 

100BIO™ licenses its technology to EPS food packaging manufacturers. These manufactures do not need to invest in additional equipment, rather, use existing machinery in their facilities. A basic analysis is made of said equipment to ensure 100BIO’s manufacturing specifications are met for optimal performance of the products. The licensee will assume the cost to adjust the machinery in addition to the royalty cost per unit of bioplastic that is passed through.

 

Equipment Adjustment/Alignment Cost – In order to process a sensitive compound such as bioplastics, engineers must adjust the machinery for adequate heat distribution. Otherwise, the bioplastic can underperform, not perform at all, or ruin the equipment by melting internally. The cost to make these adjustments require performance review as well as efficiency review. If a machine is outdated or need of repairs, it will be noticed at this stage and further review shall be presented to the management team. Shall the equipment deem fit for performance, it will continue on to the alignment process, which includes a deep clean in order to prevent any event of cross-contamination.

 

Equipment Sales – In addition to EPS manufacturers, a much bigger industry of packaging exists, where companies are sourcing more and more sustainable raw material, including bioplastic.4

 


4The global bioplastic production will be over 2.4 million ton in 2020 and set to double by 2023. Although PLA leads in top bioplastic sales, a shortage exists due to growing demand.

https://www.european-bioplastics.org/new-market-data-the-positive-trend-for-the-bioplastics-industry-remains-stable/

 

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Market Size and Opportunity:

 

The global packaging industry is valued at $871 Billion, growing 4% annually, making it one of the largest sectors for market penetration. The sustainable packaging industry is the fastest growing segment, expanding to $267 billion in 2018 and expected to grow to $412 billion by 20275. This growth will be found primarily in the food packaging sector, which, if realized, will call for a major shift in the market. Styrofoam (also known as EPS - Expanded Polystyrene), is a cheap, sturdy, insulating, but environmentally unfriendly material, largely dominating the industry. Regulations across the globe have called for a ban on this environmentally unfriendly material. Alternatives to Styrofoam thus far have been costly and offer fewer returns on performance.

 

Large corporations like Starbucks, Marriott, American Airlines and others have already moved away from the use of plastic straws switching to paper based alternatives. Single use plastic bags are now banned in over 60 countries and over 100 cities in the United States have banned the use of Styrofoam.

 

However, the world still produces greater than 14 million tons of environmentally unfriendly Styrofoam annually. This use of Styrofoam exists primarily in 4 categories: single use consumer goods, food service, construction and shipping. Styrofoam is a great insulator; it is inexpensive to produce and light weight and serves as an excellent sound barrier, protecting products in shipping.

 

The 100BIO™ products look, feels and performs just like traditional Styrofoam but with the added benefits of being: 100% plant based, 100% compostable and uses NO toxic chemicals.

 

Competitive Landscape:

 

100BIO critically analyses the market for competition by assessing companies and products in the following categories: material, price, technology and volume. Keeping track of the competition allows the Company to offer solutions that meet or exceed the competition based on the criteria above.

 

The packaging industry relies heavily on glass, plastic, paper and metal to make-up most of the packaging material utilized today, but even these materials face waste management challenges. With climate change at the front of corporate sustainability goals, we look at bioplastic technology as an effective end-of-life waste solution for large volume commercial usability. 100BIO’s patented extrusion technology takes this challenge one step further by expanding the bioplastic which was once viewed as impossible in packaging. This allows manufacturers to price a 100% compostable package competitively not only with other sustainable packaging material, but with other plastic, wood, glass, and metal packages.

 

Working Capital

 

Pursuant to the Exchange Agreement relating to the acquisition of 51% of the membership units 100BIO, LLC, the Company issued 2,000,000 shares of its Series A Redeemable Preferred Stock to 100BIO, LLC. Under the Exchange Agreement, the proceeds from the redemption of the Series A Preferred Stock is to be used for working capital of 100BIO, LLC.

 


5https://www.grandviewresearch.com/press-release/global-green-packaging-market

 

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Government Regulation

 

 The Company, through its subsidiary, Clean-Seas, Inc. will be subject to various federal statutes including the Toxic Substances Control Act administered by the US Environmental Protection Agency and the Clean Water Act and related regulations as well as state laws and regulations depending on where the Company locates its facilities. The Company’s subsidiary, 100BIO, LLC, is subject to various specifications that pertain to composability and compostable products, specifically ASTM D6400 and ASTM D6868.

 

Employees

 

 The Company has five employees two of whom are part-time.

 

Properties

 

 The Company currently operates out of a virtual office

 

Description of Rights of Classes of Stock

 

The total number of shares of stock the Company is authorized to issue is 190 million Shares of Common Stock ($0.001 par value). On December 31, 2020, the Company had 97,208,516 shares of Common Stock issued and outstanding, and 10 million shares of Preferred Stock of which 2,000,000 shares of its Series A Redeemable Preferred Stock and 2,000,000 shares its Series C Preferred Stock are outstanding and 2,000,000 shares of its Series B Convertible Non-Voting Preferred Stock which have been granted and are issuable. The Company plans to increase it authorized shares of Common Stock to 2,000,000,000.

 

All Shares of Common Stock shall be identical and have full voting rights. The Series A Redeemable Preferred Stock is owned by the Company’s 51% subsidiary, 100BIO, LLC and ranks senior to the Company’s Common Stock upon the liquidation, dissolution or winding up of the Company. The Series A Preferred Stock does not bear a dividend or have voting rights and is not convertible into shares of our Common Stock.. Once the Company has received $1,000,000 in net proceeds from this Offering, on the first day of each three month anniversary thereafter, the Company is required to redeem 25% of the net proceeds up to an aggregate amount of $2,000,000 which redemption payments will be used for the working capital of 100BIO.

 

The Series B Preferred Stock does not have voting rights. The Series B Preferred Stock will automatically be converted on January 1, 2023 into shares of common stock at the rate of 10 shares of Common Stock for each share of Preferred Stock. Holders of the Series B Preferred Stock have anti-dilution rights protecting their interests in the Company from the issuance of any additional shares of capital stock (such as the issuance of shares of Common Stock pursuant to this Offering) for a two year period following conversion of the Series B Preferred Stock calculated at the rate of 20% on a fully diluted basis.

 

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The Series C Preferred Stock has voting rights based on 100 votes for each share and on January 1, 2023 is automatically convertible into Common Stock at the rate of ten common shares for each preferred share. Holders of the Series C Preferred Stock have anti-dilution rights protecting their interests from the issuance of any additional shares of capital stock (such as the issuance of shares of Common Stock pursuant to this offering) for a two period following conversion of the Series C Preferred Stock calculated at the rate of 20% on a fully diluted basis.

 

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

 

The following discussion of our plan of operation and results of operations should be read in conjunction with the financial statements and related notes to the financial statements included elsewhere in this offering circular. This discussion contains forward-looking statements that relate to future events or our future financial performance. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks and other factors include, among others, those listed under “forward-looking statements” and “risk factors” and those included elsewhere in this report.

 

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

 

Revenue

The Company had no revenue for the years ended December 31, 2020 and 2019.

 

Officer compensation 

For the years ended December 31, 2020 and 2019, the Company had officer compensation expense of $385,000 and $417,500, respectively, a decrease of $35,200 or 7.7%. The decrease is mainly due to a decrease in stock compensation expense. In the prior year we incurred non-cash stock compensation expense of $142,500. This decrease was offset by the additional of monthly compensation to our CEO.

 

Consulting expense

For the years ended December 31, 2020 and 2019, the Company had consulting expense of $139,000 and $0. All consulting expense in the prior year is part of the discontinued operations.

 

General and Administrative expense 

For the years ended December 31, 2020 and 2019, the Company had General and Administrative expense (“G&A”) of $91,694 and $689, respectively. Our G&A expense has increased in the current year due to non-cash stock compensation of $77,500 for stock issued in the current year.

 

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Other Income and Expense

In the current year we incurred $521,715 of debt discount amortization, a $2,006,944loss on the issuance of convertible debt, offset by a gain on the change in fair value of $1,493,293, all due to our newly issued convertible debt. We also recognized interest expense of $1,266.

 

Net loss from discontinued operations

Net loss from discontinued operations for the years ended December 31, 2020 and 2019, was $432,500 and $155,98, respectively. Most of the loss in both years is due to non-cash stock compensation expense.

 

Net Loss from continuing operations

Net loss from continuing operations for the years ended December 31, 2020 and 2019, was $1,732,153 and $418,189. The large decrease to our net loss is mainly contributed to our loss on the issuance of convertible debt and non-cash stock compensation expense.

 

Liquidity and Capital Resources; Plan of Operations

 

We have incurred negative cash flow from operations since our inception. As of December 31, 2020, we had a $740in cash, notes payable in an aggregate amount of $921,961and an accumulated deficit of $6,874,394. As of the date of this offering, we have enough funds to meet our current monthly obligations of payroll, marketing, transfer agent, professional fees, working capital and expenses of this Offering through 2021, assuming that all or substantially all of our outstanding promissory notes are exchanged for Shares in this Offering.

 

We anticipate that the following will take place:

 

Quarter 2, 2021

 

Rebrand the company and launch new website
Continued Clean Seas business development for projects in Central America and the East Coast of the U.S.
100 BIO expects to file for IP coverage with WIPO
100 BIO expects to launch/refresh its website

 

Quarter 3, 2021

 

Identify additional target companies for acquisition
Engage key hires in business development and sales and marketing
Complete permitting and approvals for potential Clean Seas recycling sites
100 BIO expects to acquire needed machinery for production
Onboard chemical and mechanical engineering talent for 100BIO

 

Quarter 4, 2021

 

Identify additional target companies for acquisition
Expand Clean Seas technology offering to new markets

 

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Partner with NGO’s for plastics recycling efforts globally
100 BIO continued sales outreach
Expand manufacturing capability as needed

 

Our ability to achieve these milestones will depend on availability of capital. To the extent that a minimum amount of $1,875,000 from this offering is not achieved, we will be required to delay all or part of the milestones. See “Use of Proceeds.”

 

We will require substantial additional capital over the next several years in order to implement our business plan. We expect capital outlays and operating expenditures to increase as we expand our product and service offerings and marketing activities. Our business or operations may change in a manner that would consume available funds more rapidly than anticipated, and substantial additional funding may be required to maintain operations, fund expansions, develop new or enhanced product or services, acquire complimentary products, businesses or technologies, or otherwise respond to competitive pressured opportunities. Accordingly, we anticipate that we will need to attempt to raise additional capital through the sale of additional securities or through other methods of obtaining financing such as through loans or other types of debt. We cannot assure that we will have sufficient capital to finance the growth and business operation or that capital will be available on terms that are favorable to us, or at all.

 

Impact of the Covid-19 Pandemic

 

The COVID-19 pandemic has negatively affected the U.S. and global economy, resulted in significant travel restrictions, including mandated closures and orders to “shelter-in-place,” and created significant disruption of the financial markets. We are closely monitoring the impact of the COVID-19 pandemic on all aspects of our business, including how it will impact our customers, employees, suppliers and sales network. We are unable to predict the ultimate impact that it may have on our business, future results of operations, financial position or cash flows.

 

Critical Accounting Polices

 

In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Our critical accounting policies are disclosed in Note 2 of our unaudited consolidated financial statements included in this Offering Circular with the Securities and Exchange Commission.

 

Off Balance Sheet Arrangements

 

As of December 31, 2020 and 2019, there were no off-balance sheet arrangements.

 

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Recent Accounting Pronouncements

 

The recent accounting pronouncements that are material to our financial statements are disclosed in Note 2 of our financial statements included in this Offering Circular filed with the Securities and Exchange Commission and in Note 2 of our consolidated financial statements included herein.

 

Current and Future Financing Needs

 

Management recognizes the Company’s need for capital is paramount to its future success and requires obtaining the funds being raised in this Offering. Management believes that this is the primary key to achieving success. The actual funds we will need to operate are subject to many factors, some of which are beyond our control.

 

Going Concern

 

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. As shown in the accompanying financial statements, we have incurred a cumulative net loss of $6,874,394 as of December 31, 2020 and used substantially all of our cash in our operating activities since inception. The Company’s ability to continue as a going concern is contingent on securing additional debt or equity financing from outside investors. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

 

Management plans to continue to implement its business plan and to fund operations by raising additional capital through the issuance of debt and equity securities. The Company’s existence is dependent upon management’s ability to implement its business plan and/or obtain additional funding. There can be no assurance that the Company’s financing efforts will result in profitable operations or the resolution of the Company’s liquidity problems. Even if the Company is able to obtain additional financing, it may include undue restrictions on our operations in the case of debt or cause substantial dilution for our stockholders in the case of equity financing.

 

In December 2019, a novel strain of coronavirus, COVID-19, surfaced in Wuhan, China. This virus continues to spread around the world, resulting in business and social disruption. The coronavirus was declared a Public Health Emergency of International Concern by the World Health Organization on January 30, 2020. The operations and business results of the company could be materially adversely affected. The extent to which the coronavirus may impact business activity or results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and the actions required to contain the coronavirus or treat its impact, among others

 

 Off-Balance Sheet Arrangements

 

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

 

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Critical Accounting Policies

 

We have identified the policies outlined in this Offering Circular and attachments as critical to our business operations and an understanding of our results of operations. Those policies outlined are not intended to be a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by accounting principles generally accepted in the United States, with no need for management’s judgment in their application. The impact and any associated risks related to these policies on our business operations is discussed throughout Management’s Discussion and Analysis of Financial Condition and Results of Operation where such policies affect our reported and expected financial results. Note that our preparation of the consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of our consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. There can be no assurance that actual results will not differ from those estimates.

 

MANAGEMENT

 

Directors, Executive Officers and Significant Employees

 

The directors, executive officers and significant employees of the Company as of the date of this filing are as follows:

 

Name   Position   Age   Term of Office   Approximate Hours per Week for Part-Time Employees
Executive Officers                
                 
Dan Bates   Chief Executive Officer, Director.   63   Through May 27, 2025    
                 
Christopher Percy   President, Director   42   May 31, 2021 with the expectation of entering into a new employment agreement    
                 
Jea So   Vice President, Director   39    Through October 1, 2023    
                 
Rachel Boulds     Chief Financial Officer   51   At will   15 hours per week
                 
Erfan Ibrahim   Chief Technical Officer   56   Through June 30, 2021 with the expectation of a new employment arrangement upon funding   20 hours per week and then full time on funding

  

Biographical information regarding the executive officers and directors is as follows:

 

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Dan Bates

 

Dan is the CEO of Byzen Digital and has recently served as the President of Impact PPA, an innovative renewable energy company providing blockchain technologies to solve the challenging problems commonly seen in the environment of distributed energy solutions globally. Mr. Bates has spent the last 12 years in the renewable energy industry leading WindStream Technologies, a recognized leader in hybrid renewable energy systems. Under Bates’ guidance the Company has deployed projects of all sizes in over 35 countries and established manufacturing facilities in the United States and in India. The Company has won international awards for product design, efficiency and sustainability and has developed strong relationships in the international renewable energy community.

 

Prior to starting WindStream Mr. Bates spent 15 years in the technology sector and has launched successful technology ventures in both hardware and software. Mr. Bates’ first technology venture, Extreme Audio Reality (EAR) developed and patented the first interactive audio API for game developers, designed for the PC and set-top box gaming arena. EAR successfully licensed its products to all major game publishers including Electronic Arts, Activision, Id Software, Ubisoft and many others. After EAR, Mr. Bates founded Avant Interactive, which developed a neural net and AI based technology for object recognition, creating a patented interactive video solution for content owners, publishers and advertisers. Avant was the market leader in this emerging sector, holding licenses and/or contracts with many of the Fortune 100 companies, television and cable networks, ad agencies as well as developing proprietary applications for the U.S. Army.

 

Christopher Percy

 

Chris began his early career in electronic security, where he quickly progressed from engineer to a challenging business development role. In 2003, he used the broad skills acquired over years in the industry to set up Direct CCTV & Security Systems, servicing a broad international clientele, including Bank of America, Amazon and Geopost.

 

When the company went public as Direct Security Integration Inc. in 2014, Chris stepped down to consult technology companies on structure and sales. In May 2018, he was approached by Byzen Digital to take the reins and completed a successful corporate action with FINRA.

 

Jea So

 

Jea is a sustainability team captain with extensive hands-on experience in bioplastics, manufacturing, procurement and is motivated to acquire zero-waste goals. As founder and CEO of 100Bio since 2009, she facilitated product launch from concept to $5.5 million purchase order, sourced raw materials, including bioplastics, blowing agents, minerals, and chain extenders, as well as hired agents to assist with biochemistry, mechanical engineering, OEM, licensing, supply chain efficiency, and lean manufacturing. Jea also works as principal consultant for Tag Packaging, since 2014, where she consulted clients on packaging design, material health, strategic sourcing and labeling, reduced material cost with open sourcing strategy, and advised brands on zero-waste initiatives, achieving neutral emissions, and implementing corporate sustainability goals. Jea was nominated Most Innovative Entrepreneur by Pipeline Ventures in 2017, has 4 patents in Korea, and 1 provisional patent in the U.S.

 

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Rachel Boulds

 

Ms. Boulds has been engaged in her sole accounting practice which she has led since 2009 and which provides all aspects of consulting and accounting services to clients, including the preparation of full disclosure financial statements for public companies to comply with GAAP and SEC requirements. Ms. Boulds also currently provides outsourced chief financial officer services. From August 2004 through July 2009, she was employed as a Senior Auditor for HJ & Associates, LLC, where she performed audits and reviews of public and private companies, including the preparation of financial statements to comply with GAAP and SEC requirements. From 2003 through 2004, Ms. Boulds was employed as a Senior Auditor at Mohler, Nixon and Williams. From September 2001 through July 2003, Ms. Boulds worked as an ABAS Associate for Price Waterhouse Coopers. From April 2000 through February 2001, Ms. Boulds was employed as an e-commerce Accountant for the Walt Disney Group’s GO.com. Ms. Boulds earned a B.S. in Accounting from San Jose University in 2001 and is licensed as a CPA in the state of Utah.

 

Erfan Ibrahim, PhD

 

Dr. Erfan Ibrahim professional career spans over 32 years and includes hands-on experience in nuclear engineering, information technology, communications, networking, cybersecurity, smart grid, and renewable energy.

 

During his 3-decade career Erfan has worked for Lawrence Livermore National Lab, UCLA, Pacific Bell, Jyra Research, Electric Power Research Institute (EPRI) and National Renewable Energy Lab (NREL). At EPRI he led the Smart Meter and Cybersecurity R&D Programs during 2008 – 2011 for electric utility and high-tech companies.

 

While at EPRI, he organized and led the first 2 workshops for Smart Grid Interoperability Roadmap Project for the National Institute of Standards & Technology (NIST) in 2009 to build consensus on standards for interoperability in the smart grid.

 

While at NREL he led the Cyber-Physical Systems Security & Resilience Center (CPSS&R) for 3 years (2015 – 2018) and pioneered the concept of a 9-layer cybersecurity architecture to protect power systems from insider and external cyber threats. He designed and built a Secure Distribution Grid Management testbed at NREL Energy Systems Integration Facility (ESIF) in Golden Colorado.

 

Erfan has a Bachelor of Science in Physics with honors from Syracuse University in 1983, a Master of Science in Mechanical Engineering with emphasis in Nuclear Engineering from University of Texas Austin in 1984 and a PhD in Nuclear Engineering from University of California Berkeley in 1987.

 

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COMPENSATION OF DIRECTORS AND
EXECUTIVE OFFICERS

 

 The following table sets forth the annual compensation of the persons who were executive officers or directors during the fiscal year ended December 31, 2020.

 

    Capacities in which            
    Compensation was   Cash   Other   Total
Name   received   Compensation   Compensation   Compensation
Dan Bates   Chief Executive Officer   $ 75,000     $     $ 75,000  
Christopher Percy   President   $     $     $  
Jea So   Vice President   $     $ 15,000     $ 15,000  
        $     $     $  

 

Employment Agreements

 

The Company has entered into an employment agreement with Dan Bates, our Chief Executive Officer. The term is three years subject to early termination prior to the Company receiving at least $2,000,000 in funding. Mr. Bates is to receive monthly cash compensation of $20,000 with $7,500 to be deferred until at least $2,500,000 has been received. Additionally, Mr. Bates is to receive at the end of each quarterly period 10% of net income to be paid in cash or stock at the election of the Board of Directors. Effective February 9,2021, the Company and Mr. Bates entered into an Amendment to the Employment Agreement pursuant to which the term was extended to May 27,2025 and as additional compensation, he received a grant of 2,000,000 shares of Series C Convertible Preferred Stock.

 

The Company renewed its employment agreement with Chris Percy, our President, and director on June 1, 2020. The term is two years. Mr. Percy is to receive monthly cash compensation of $19,250.

 

The Company has entered into an employment agreement with Jea So, the founder of 100BIO, LLC to act as a Vice-President of the Company and as director of the Company. The term is 3 years. Ms. So is to receive monthly cash compensation of $5,000 and a signing bonus of 500,000 restricted shares.

 

The Company has entered into a consulting agreement with Erfan Ibrahim to act as Chief Technical Officer of the Company from February 1, 2021 though June 30, 2021. Mr. Ibrahim is to receive monthly cash compensation of $7,500 and $7,500 per month deferred to be paid from the proceeds of the Reg A offering. Mr. Ibrahim is also entitled to receive 20,000 restricted shares per month.

 

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The Company has entered into an at-will consulting agreement with Rachel Boulds to serve as a part-time Chief Financial Officer. Ms. Boulds is to receive $3,500 a month.

 

Stock Incentive Plan

 

In the future, the Company may establish a management stock incentive plan pursuant to which stock options and awards may be authorized and granted to our directors, executive officers, employees and key employees or consultants. Details of such a plan, should one be established, have not been decided upon as of the date of this Offering. Stock options or a significant equity ownership position in the Company may be utilized by us in the future to attract one or more new key senior executives to manage and facilitate our growth.

 

Board of Directors

 

Our board of directors currently consists of three directors:

  Dan Bates
  Christopher Percy
  Jea So

 

Mssrs. Bates and Percy and Ms. So are not considered to be “independent” as defined in Rule 4200 of FINRA’s listing standards. We may appoint independent director(s) to our board of directors in the future, particularly to serve on appropriate committees should they be established.

 

Committees of the Board of Directors

 

We have not established any committees of the Board of Directors. Until the committees are established, matters that would otherwise be addressed by such committees will be acted upon by the entire Board of Directors.

 

Director Compensation

 

The directors do not receive any compensation for acting as a director.

 

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Limitation of Liability and Indemnification of Officers and Directors

 

Our Bylaws limit the liability of directors and officers of the Company. The Bylaws state that the Company shall indemnify, in accordance with and to the full extent now or hereafter permitted by law, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (including, without limitation, an action by or in the right of the corporation), by reason of his or her acting as a director or officer of the corporation (or a director or officer serving at the request of the corporation in any other capacity for or on behalf of the corporation) against any expenses (including attorneys’ fees, judgments, fines, ERISA or other excise taxes, penalties and amounts paid in settlement) actually and reasonably incurred by such director or officer in respect thereof; provided, however, that, the corporation shall not be obligated to indemnify any such director or officer with respect to proceedings, claims or actions initiated or brought voluntarily by such director and not by way of defense. Expenses that may be subject to indemnification hereunder shall be paid in advance of the final disposition of the action, suit or proceeding to the full extent permitted by Nevada law subject to the corporation’s receipt of any undertaking required thereby. The provisions of this article of the Company’s Bylaws shall be deemed to constitute a contract between the Company and each director or officer who serves in such capacity at any time while this article and the relevant provisions of Nevada law are in effect, and each such director or officer shall be deemed to be serving as such in reliance on the provisions of this article of the Company’s Bylaws, and any repeal of any such provisions or of such article of the Company’s Bylaws shall not affect any rights or obligations then existing with respect to any state of facts then or theretofore existing or any action, suit or proceeding theretofore or thereafter brought or threatened based in whole or in part upon any such state of facts. If a claim under this article of the Company’s Bylaws is not paid in full within thirty (30) days after a written claim has been received by the corporation, the claimant may at any time thereafter bring suit against the corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant also shall be entitled to be paid the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any, has been provided to the corporation) that the claimant has not met the standards of conduct that make it permissible under Nevada law for the corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the corporation. Neither the failure of the corporation to have made a determination prior to the commencement of such action that indemnification of the claimant is proper under the circumstances because the claimant has met the applicable standard of conduct set forth in the Nevada law, nor an actual determination by the corporation that the claimant has not met such standard of conduct shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.

 

The rights of indemnification and advancement provided by this article of the Company’s Bylaws are not exclusive of any other right to indemnification or advancement provided by law, agreement or otherwise, and shall apply to actions, suits or proceedings commenced after the date hereof, whether or not arising from acts or omissions occurring before or after the adoption hereof, and shall continue as to a person who has ceased to be a director or officer of the corporation and shall inure to the benefit of the heirs, executors and administrators of such a person.

 

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our Officers, Directors, and controlling purposes by our Certificate of Incorporation, our By-Laws and the laws of the State of Nevada, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

 

There is no pending litigation or proceeding involving any of our directors or officers as to which indemnification is required or permitted, and we are not aware of any threatened litigation or proceeding that may result in a claim for indemnification. For additional information on indemnification and limitations on liability of our directors and officers, please review the Company’s Bylaws, which are an Exhibit to this Offering Circular.

 

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SECURITY OWNERSHIP OF MANAGEMENT AND 

CERTAIN SECURITY HOLDERS

 

Beneficial ownership is determined according to the rules of the SEC, and generally means that person has beneficial ownership of a security if he or she possesses sole or shared voting or investment power of that security,and includes options that are currently exercisable or exercisable within 60 days. Each director or officer, as the case may be, has furnished us with information with respect to beneficial ownership. Except as otherwise indicated, we believe that the beneficial owners of common stock listed below, based on the information each of them has given to us, have sole investment and voting power with respect to their shares, except where community property laws may apply. Except as otherwise noted below, the address for each person or entity listed in the table is c/o Byzen Digital Inc., 2711 N. Sepulveda Blvd., #1051, Manhattan Beach, CA 90266-2725.

 

The following table sets forth information regarding beneficial ownership of our Common Stock by any of our directors or executive officers, our Directors and Officers as a group, and holders of 5% or more of our Common Stock as of March 31, 2021:

 

Name and Address of Beneficial Owner   Amount and Nature of Beneficial Ownership   Amount and Nature of Beneficial Ownership Acquirable   Percent of Class(1)
5% or Greater Stockholders:            
Michael Freckleton
London, UK
  7,000,000 common shares             7.2%  
Robert Walter
St. Albans, UK
  7,973,950 common shares             8.2%  
Gary Potter
Leigh-on-Sea, UK
  6,303,700 common shares             6.5%  
                     
Executive Officers and Directors                    
    2,500,000 common shares             2.3%  
Dan Bates   2,000,000 Series C Preferred shares(2)             100%  
Christopher Percy   6,500,000 common shares             6.67%  
Jea So   500,000 common shares              
Rachel Boulds   --            
                     
Executive Officers and Directors as a Group (4 persons)   9,500,000 common shares             8.86%  
    2,000,000 shares of Series C Preferred Stock             100%  

 

(1)   The table does not include any shares of the Series A Redeemable Preferred Stock which is not convertible and has no voting rights and cannot be converted until January 2023.

 

(2)    Each share of Series C Preferred Stock has 100 voting rights and on January 1, 2023 is automatically convertible into common shares at the rate of 10 common shares for each preferred share.

 

SECURITIES BEING OFFERED

 

This Offering (the “Offering”) consists of up to 375,000,000 Shares that are being offered on a “best efforts” basis, which means that there is no guarantee that any minimum amount will be sold. The Shares are being sold directly by the Company. There are up to,375,000,000 Shares being offered at a price of between $0.02- $0.20 per Share with no minimum purchase per investor. The Shares are being offered on a best-efforts basis to an unlimited number of accredited investors and an unlimited number of non-accredited investors only by the Company. The maximum aggregate amount of the Shares offered is $7,500,000 (the “Maximum Offering”). There is no minimum number of Shares that needs to be sold in order for funds to be released to the Company and for this Offering to close. The Shares, when issued, will be fully paid and non-assessable.

 

Other than Preferred Stock, there are no other authorized classes of stock in the Company as of the date of this Offering. The Company does not expect to create any additional classes of stock during the next 12 months, but the Company is not limited from creating additional classes which may have preferred dividend, voting and/or liquidation rights or other benefits not available to holders of its Common Stock if it chooses to do so.

 

The Company does not expect to declare dividends for holders of Common Stock in the foreseeable future. Dividends will be declared, if at all (and subject to the rights of holders of additional classes of securities, if any), in the discretion of the Company’s Board of Directors. Dividends, if ever declared, may be paid in cash, in property, or in shares of the capital stock of the Company, subject to the provisions of law, the Company’s Bylaws and the Certificate of Incorporation. Before payment of any dividend, there may be set aside out of any funds of the Company available for dividends such sums as the Board of Directors, in its absolute discretion, deems proper as a reserve for working capital, to meet contingencies, for equalizing dividends, for repairing or maintaining any property of the Company, or for such other purposes as the Board of Directors shall deem in the best interests of the Company.

 

There is no minimum number of Shares that need to be sold in order for funds to be released to the Company and for this Offering to close. The Company anticipates numerous closings to take place during the Offering.

 

A subscription for Shares may be made only by tendering to the Company’ the executed Subscription Agreement (electronically or in writing) delivered with the subscription price in a form acceptable to the Company, via check, wire or ACH (or other payment methods the Company may later add). The execution and tender of the documents required, as detailed in the materials, constitutes a binding offer to purchase the number of Shares stipulated therein and an agreement to hold the offer open until the expiration date or until the offer is accepted or rejected by the Company, whichever occurs first.

 

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The Company reserves the unqualified discretionary right to reject any subscription for Shares, in whole or in part. If the Company rejects any offer to subscribe for the Shares, it will return the subscription payment, without interest or reduction. The Company’s acceptance of your subscription will be effective when an authorized representative of the Company issues you written or electronic notification that the subscription was accepted.

 

DESCRIPTION OF CAPITAL STOCK

 

The following summary is a description of the material terms of our capital stock and is not complete. You should also refer to the Company’s articles of incorporation and bylaws, which are included as exhibits to the offering statement of which this offering circular forms a part, and the applicable provisions of the Nevada Revised Statutes.

 

Our articles of incorporation prior to the completion of this offering authorize us to issue up to 190,000,000 shares of common stock and 10,000,000 shares of preferred stock. We plan to increase the authorized shares of our Common Stock to 2,000,000,000.

 

Common Stock

 

Shares of our common stock have the following rights, preferences and privileges:

 

Voting

Each holder of common stock is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Any action at a meeting at which a quorum is present will be decided by a majority of the voting power present in person or represented by proxy, except in the case of any election of directors, which will be decided by a plurality of votes cast. There is no cumulative voting.

 

Dividends

Holders of our common stock are entitled to receive dividends when, as and if declared by our board of directors out of funds legally available for payment, subject to the rights of holders, if any, of any class of stock having preference over the common stock. Any decision to pay dividends on our common stock will be at the discretion of our board of directors. Our board of directors may or may not determine to declare dividends in the future. See “Dividend Policy.” The board’s determination to issue dividends will depend upon our profitability and financial condition any contractual restrictions, restrictions imposed by applicable law and the SEC, and other factors that our board of directors deems relevant.

 

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Liquidation Rights

In the event of a voluntary or involuntary liquidation, dissolution or winding up of the company, the holders of our common stock will be entitled to share ratably on the basis of the number of shares held in any of the assets available for distribution after we have paid in full, or provided for payment of, all of our debts and after the holders of all outstanding series of any class of stock have preference over the common stock, if any, have received their liquidation preferences in full.

 

Other

Our issued and outstanding shares of common stock are fully paid and nonassessable. Holders of shares of our common stock are not entitled to preemptive rights. Shares of our common stock are not convertible into shares of any other class of capital stock, nor are they subject to any redemption or sinking fund provisions.

 

PREFERRED STOCK

 

The Company’s Board of Directors is authorized to issue shares of Preferred Stock in one or more series with each series containing such rights, privileges and preferences as may be established by the Board of Directors from time to time.

 

Series A Redeemable Preferred Stock

 

The Series A Redeemable Preferred Stock have priority over the Common Stock upon liquidation, dissolution or winding up. The Stock does not bear a dividend or have voting rights. After the Company has received $1,000,000 in net proceeds from this Offering, beginning on the third month anniversary thereafter, the Company is required to redeem the Preferred Stock on the basis of 25% of the net proceeds up to $2,000,000 which redemption proceeds will be used for the working capital of 100BIO, LLC.

 

Series B Convertible Non-Voting Preferred Stock

 

The Series B Convertible Non-Voting Preferred Stock shall be automatically converted on January 1, 2023 unless unanimously approved to be extended by the Series B Convertible Non-Voting Preferred holders of record. The conversion rate shall be 10 shares of common stock for each share of Series B Convertible Non-Voting Preferred Stock. The holders of the Series B Convertible Non-Voting Preferred Stock have anti-dilution rights during the two-year period after the Series B Convertible Preferred has been converted into shares of Common Stock at the rate of 20% on a fully diluted basis.

 

Series C Convertible Preferred Stock

 

The Series C Preferred Stock shall be automatically converted on January 1,2023 unless unanimously approved to be extended by the Series C Preferred holders of record. The Series C Preferred Stock has voting rights based on 100 votes for each share and is convertible into common shares at the rate of 10 common shares for each preferred share. The holders of the Series C Convertible Stock have anti-dilution rights during the two year period after the Series C Convertible Preferred Stock has been converted at the rate of 20% on a fully diluted basis.

 

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SHARES ELIGIBLE FOR FUTURE SALE

 

Future sales of substantial amounts of our common stock in the public market after this offering could adversely affect market prices prevailing from time to time and could impair our ability to raise capital through the sale of our equity securities. We are unable to estimate the number of shares of common stock that may be sold in the future.

 

Upon the completion of this offering, we will have 247,208,516 outstanding shares of common stock if we complete the maximum offering at the lowest offering price hereunder. All of the shares sold in this offering will be freely tradable without restriction under the Securities Act unless purchased by one of our affiliates as that term is defined in Rule 144 under the Securities Act, which generally includes directors, officers or 10% stockholders.

 

Rule 144

 

Shares of our common stock held by any of our affiliates, as that term is defined in Rule 144 of the Securities Act, may be resold only pursuant to further registration under the Securities Act or in transactions that are exempt from registration under the Securities Act. In general, under Rule 144 as currently in effect, any of our affiliates would be entitled to sell, without further registration, within any three-month period 1% of the number of shares outstanding.

 

Sales under Rule 144 by our affiliates will also be subject to manner of sale provisions and notice requirements and to the availability of current public information about us.

 

INVESTOR ELIGIBILITY STANDARDS

 
The Shares will be sold only to a person who is NOT an accredited investor if the aggregate purchase price paid by such person is no more than 10% of the greater of such person’s annual income or net worth, not including the value of his primary residence, as calculated under Rule 501 of Regulation D promulgated under Section 4(a)(2) of the Securities Act of 1933, as amended. In the case of sales to fiduciary accounts (Keogh Plans, Individual Retirement Accounts (IRAs) and Qualified Pension/Profit Sharing Plans or Trusts), the above suitability standards must be met by the fiduciary account, the beneficiary of the fiduciary account, or by the donor who directly or indirectly supplies the funds for the purchase of Shares. Investor suitability standards in certain states may be higher than those described in this Offering Circular. These standards represent minimum suitability requirements for prospective investors, and the satisfaction of such standards does not necessarily mean that an investment in the Company is suitable for such persons.

 

Each investor must represent in writing that he/she/it meets the applicable requirements set forth above and in the Subscription Agreement, including, among other things, that (i) he/she/it is purchasing the Shares for his/her/its own account and (ii) he/she/it has such knowledge and experience in financial and business matters that he/she/it is capable of evaluating without outside assistance the merits and risks of investing in the Shares, or he/she/it and his/her/its purchaser representative together have such knowledge and experience that they are capable of evaluating the merits and risks of investing in the Shares. Transferees of Shares will be required to meet the above suitability standards.

 

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DISQUALIFYING EVENTS DISCLOSURE

 

Recent changes to Regulation A promulgated under the Securities Act prohibit an issuer from claiming an exemption from registration of its securities under such rule if the issuer, any of its predecessors, any affiliated issuer, any director, executive officer, other officer participating in the Offering of the interests, general partner or managing member of the issuer, any beneficial owner of 20% or more of the voting power of the issuer’s outstanding voting equity securities, any promoter connected with the issuer in any capacity as of the date hereof, any investment manager of the issuer, any person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with such sale of the issuer’s interests, any general partner or managing member of any such investment manager or solicitor, or any director, executive officer or other officer participating in the Offering of any such investment manager or solicitor or general partner or managing member of such investment manager or solicitor has been subject to certain “Disqualifying Events” described in Rule 506(d)(1) of Regulation D subsequent to September 23, 2013, subject to certain limited exceptions. The Company is required to exercise reasonable care in conducting an inquiry to determine whether any such persons have been subject to such Disqualifying Events and is required to disclose any Disqualifying Events that occurred prior to September 23, 2013 to investors in the Company. The Company believes that it has exercised reasonable care in conducting an inquiry into Disqualifying Events by the foregoing persons and is aware of no such Disqualifying Events.

 

It is possible that (a) Disqualifying Events may exist of which the Company is not aware and (b) the SEC, a court or other finder of fact may determine that the steps that the Company has taken to conduct its inquiry were inadequate and did not constitute reasonable care. If such a finding were made, the Company may lose its ability to rely upon exemptions under Regulation A, and, depending on the circumstances, may be required to register the Offering of the Company’s Common Stock with the SEC and under applicable state securities laws or to conduct a rescission offer with respect to the securities sold in the Offering.

 

RELATED PARTY TRANSACTIONS

 

During the year ended December 31, 2018, the Company granted 16,153,200 shares of common stock to its officers for services. The shares were values at $0.095 per share for total non-cash stock compensation expense of $1,617,679. As of December 31, 2018, 3,000,000 shares of those granted had not yet been issued by the transfer agent and are credited to common stock to be issued.

 

As of December 31, 2020, and 2019, the Company owed related parties $11,011 and $11,011, respectively, for funds that had been loaned to the company to pay for operating expenses. The loans were intended to be due on demand and non-interest bearing.

 

As of December 31, 2020, and 2019, the Company owed Chris Percy, President and CCO, $87,500 and $397,500, respectively, for accrued compensation.

 

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During the year ended December 31, 2019, the Company granted 3,000,000 shares of common stock to Mr. Percy for services rendered. The shares were values at $0.048 per share for total non-cash stock compensation expense of $142,500. As of December 31, 2019, the shares had not yet been issued by the transfer agent and are credited to common stock to be issued.

 

As of December 31, 2020, and 2019, the Company owed Dan Bates, CEO, $45,000 and $0, respectively, for accrued compensation. In addition, Mr. Bates, loaned the Company $100 to be used to open the Company’s bank account.

 

On May 19, 2020, the Company entered into an Exchange Agreement with Clean-Seas, Inc, (“CSI”) a Delaware corporation owned by Dan Bates, CEO. Pursuant to the terms of the agreement the Company issued 2,500,000 shares of common stock, at $0.01 per share, the agreed upon purchase price, to CSI for 100% of the outstanding stock of CSI. CSI shall become a wholly owned subsidiary of the Company. At the time of the acquisition CSI had no operations, asset or liabilities.

 

The Company renewed its employment agreement with Chris Percy, our President, Treasurer and Chief Commercial Officer on June 1, 2020. The term is two years. Mr. Percy is to receive monthly cash compensation of $19,250.

 

On September 17, 2020, the Company granted Jea So, VP and Director, 500,000 shares of common stock for services. The shares were valued at the closing stock price on the date of grant of $0.11, for total non-cash compensation of $55,000. Ms. So is also the founder and principal member of 100BIO, LLC.

 

The Company has entered into an at-will consulting agreement with Rachel Boulds to serve as a part-time Chief Financial Officer. Ms. Boulds is to receive $3,500 a month. On February 22, 2021, the Company granted 500,000 shares of common stock to Ms. Boulds for services.

 

The Company has entered into employment agreements with Dan Bates, the Company’s Chief Executive Officer and Jea So, the Company’s Vice President and a director. Ms. So is also the founder of 100BIO, LLC and the principal member of that subsidiary other than the Company.

 

TRANSFER AGENT

 

Our Transfer Agent is Equiniti, 3200 Cherry Creek Drive South, Suite 430, Denver, CO 80209. The Transfer Agent is registered with the U.S. Securities and Exchange Commission.

 

LEGAL MATTERS

 

We are not a party to any pending or threatened legal proceedings or disputes, and we do not anticipate the institution of any legal proceedings. Troy Gould PC has acted as our legal counsel in providing a legal opinion for this filing.

 

56
 

 

INTERESTS OF NAMED EXPERTS AND COUNSEL

 

No expert or counsel named in this Offering Circular as having prepared or certified any part of this Offering Circular, or having given any opinion with respect to the validity of the securities offered herein or upon other legal matters in connection with this Offering, was employed on a contingency basis or had, or is to receive, in connection with this Offering, a substantial interest, direct or indirect, in the Company, or otherwise is or has been at any time connected to the Company as a promoter, Officer, Director, or employee.

 

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

There have been no disagreements regarding accounting and financial disclosure matters with our independent certified public accountants.

 

DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

 

Under our Articles of Incorporation and Bylaws, we may indemnify an officer or director who is made a party to any proceeding, including a lawsuit, because of their position, if they acted in good faith and in a manner they reasonably believed to be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding as to which they are to be indemnified, we must indemnify them against all expenses incurred, including attorney’s fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of Nevada.

 

U.S Securities and Exchange Opinion on Indemnification

 

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our Officers, Directors, and controlling purposes by our Certificate of Incorporation, our By-Laws and the laws of the State of Nevada, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

 

AVAILABLE INFORMATION

 

We have filed with the U.S. Securities and Exchange Commission (“SEC”) a Tier 1 Offering Circular pursuant to Regulation “A” promulgated under the Securities Act of 1933, as amended. This Offering Circular does not contain all of the information contained in the Form 1-A as some portions have been omitted in accordance with the rules and regulations of the SEC. For further information concerning our Company and our shares of Common Stock in this Offering Circular, reference is made to the Form 1-A and the Exhibits filed therewith.

 

The public may read and copy any materials that we file with the SEC at the SEC’s Public reference Room at 100 F Street N.E. Washington D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-0330. The SEC also maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC on the EDGAR system. The address of that site is www.sec.gov.

 

57
 

 

BYZEN DIGITAL, INC.

INDEX TO UNAUDITED FINANCIAL STATEMENTS

 

Consolidated Balance Sheets as of December 31, 2020 and 2019 (unaudited) F-2
   
Consolidated Statements of Operations and Other Comprehensive Loss for the years ended December 31, 2020 and 2019 (unaudited) F-3
   
Consolidated Statement of Stockholders’ Equity (Deficit) for the years ended December 31, 2020 and 2019 (unaudited) F-5
   
Consolidated Statements of Cash Flows for years ended December 31, 2020 and 2019 (unaudited) F-4
   
Notes to the Consolidated Financial Statements (unaudited) F-6

 

F-1
 

 

BYZEN DIGITAL, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)

 

    December 31, 2020   December 31, 2019
ASSETS                
Current Assets:                
Cash   $ 740     $  
Other current asset     20,000          
Total Current Assets   $ 20,740     $  
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)                
Current Liabilities:                
Accounts payable   $ 21,258     $  
Accrued compensation     132,500       397,500  
Accrued expenses     1,266        
Convertible notes, net of discount of $535,746     271,715        
Loan payable     114,500        
Derivative liability     1,075,794        
Advance from an officer     100        
Liabilities of discontinued operations     67,093       484,152  
Total current liabilities     1,684,226       881,652  
Total Liabilities     1,684,226       881,652  
                 
Commitments and contingencies            
                 
Stockholders’ Equity (Deficit):                
Preferred stock, $0.001 par value, 8,000,000 shares authorized; no shares issued and outstanding            
Series A Preferred stock, $0.001 par value, 2,000,000 shares authorized; 2,000,000 and 0 shares issued and outstanding, respectively     2,000        
Series B Preferred stock, $0.001 par value, 2,000,000 shares authorized; no shares issued and outstanding, respectively            
Common stock, $0.001 par value, 190,000,000 shares authorized,97,208,516 and 103,408,516 shares issued and outstanding, respectively     97,208       103,408  
Common stock to be issued     225,625       446,125  
Preferred stock to be issued     25,000        
Additional paid-in capital     4,861,075       3,278,556  
Accumulated deficit     (6,874,394 )     (4,709,741 )
Total stockholders’ equity (deficit)     (1,663,486 )     (881,652 )
Total liabilities and stockholders’ equity   $ 20,740     $  

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

F-2
 

 

BYZEN DIGITAL, INC.
STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE LOSS
(Unaudited)

 

    For the Years Ended December 31,
    2020   2019
         
Operating Expenses:                
Officer compensation   $ 385,000     $ 417,500  
Consulting     139,000        
Professional fees     79,827        
General and administration expenses     91,694       689  
Total operating expense     695,521       418,189  
                 
Loss from Operations     (695,521 )     (418,189 )
                 
Other income (expense):                
Interest expense     (522,981 )      
Change in fair value of derivative     1,493,293        
Loss on issuance of convertible debt     (2,006,944 )      
Total other expense     (1,036,632 )      
                 
Net loss before provision for income tax     (1,732,153 )     (418,189 )
Provision for income tax expense            
Net loss from continuing operations     (1,732,153 )     (418,189 )
Net loss from discontinued operations before provision for income tax     (432,500 )     (155,958 )
Provision for income tax expense from discontinued operations            
Net loss from discontinued operations           (155,958 )
                 
Net loss   $ (2,164,653 )   $ (574,147 )
                 
Other comprehensive loss:                
Loss on sale of discontinued operations           (606,083 )
                 
Comprehensive loss   $ (2,164,653 )   $ (1,180,230 )
                 
Basic and fully diluted loss per share from continuing operations   $ (0.02 )   $ (0.00 )
Basic and fully diluted loss per share from discontinued operations   $     $ (0.00 )
Basic and fully diluted loss per share   $ (0.02 )   $ (0.00 )
                 
Weighted average shares outstanding—basic and diluted     93,617,831       132,490,047  

  

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

F-3
 

 

BYZEN DIGITAL, INC.-
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

 

    For the Years Ended December 31,
    2020   2019
Cash Flows from Operating Activities:                
Net loss   $ (2,164,653 )   $ (418,189 )
Less net loss from discontinued operations           (155,958 )
Adjustments to reconcile net loss to net cash used   by operating activities:                
Stock issued for services     125,000        
Stock issued for services – related party     55,000       142,500  
Stock issued for acquisition – related party     25,000        
Debt discount amortization     521,715        
Change in fair value of derivative     (1,493,293 )      
Loss on issuance of convertible debt     2,006,945        
Loss on sale of discontinued operations           606,083  
Changes in operating assets and liabilities:                
Accounts payable     21,258        
Accruals     11,668        
Accrued compensation     255,000       275,000  
Operating cash flow from discontinued operations     432,500       (449,436 )
Net cash used by operating activities     (203,860 )      
                 
Cash Flows from Investing Activities:            
                 
Cash Flows from Financing Activities:                
Advance – related party     100        
Proceeds from convertible debt     90,000        
Proceeds from loans payable     114,500        
Net cash provided by financing activities     204,600        
                 
Net change in cash     740        
Effects of currency translation on cash           606,083  
Cash at beginning of year            
Cash at end of year   $ 740        
                 
Supplemental schedule of cash flow information:                
Interest paid   $     $  
Income taxes   $     $  
Supplemental non-cash disclosure:                
Common stock issued for conversion of accrued compensation   $     $ 77,500  
Common stock issued for conversion of debt   $ 250,000        

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

F-4
 

 

CONSOLIDATED BYZEN DIGITAL, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT
For the Years Ended December 31, 2019 and 2020
(unaudited)

 

      Series A Preferred Stock     Common Stock     Additional paid       Common Stock       Preferred Stock               Accumulated Other          
      Shares       Amount       Shares       Amount       In Capital       To be Issued       To be Issued       Accumulated
Deficit
      Comprehensive
Income
      Total  
Balance, December 31, 2018     —       $ —         154,196,416     $ 154,196     $ 7,833,182     $ 178,125     $ —       $ (3,529,511 )   $ (711,388 )   $ 3,924,604  
Common stock issued for services     —         —         6,212,100       6,212       3,000       48,000       —         —         —         57,212  
Common stock issued for services – related party     —         —         —         —         —         142,500       —         —         —         142,500  
Common stock returned     —         —         (57,000,000 )     (57,000 )     (4,557,626 )     —         —         —         —         (4,614,626 )
Common stock issued for conversion of accrued compensation     —         —         —         —         —         77,500       —         —         —         77,500  
Loss on sale of discontinued operations     —         —         —         —         —         —         —         (606,083 )     606,083       —    
Net loss     —         —         —         —         —         —         —         (574,147 )     105,305       (468,842 )
Balance, December 31, 2019     —         —         103,408,516       103,408       3,278,556       446,125       —         (4,709,741 )     —         (881,652 )
Cancellation of common stock     —         —         (20,000,000 )     (20,000 )     20,000       —         —         —         —         —    
Common stock issued for share exchange – related party     —         —         2,500,000       2,500       22,500       —         —         —         —         25,000  
Stock issued for acquisition     2,000,000       2,000       —         —         (2,000 )     —         —         —         —         —    
Common stock issued for services – related party     —         —         500,000       500       54,500       —         —         —         —         55,000  
Stock issued for services     —         —         5,800,000       5,800       747,200       (220,500 )     25,000       —         —         557,500  
Conversion of debt     —         —         5,000,000       5,000       740,319       —         —         —         —         745,319  
Net loss     —         —         —         —         —         —         —         (2,164,653 )     —         (2,164,653 )
Balance, December 31, 2020     2,000,000     $ 2,000       97,208,516     $ 97,208     $ 4,861,075     $ 225,625     $ 25,000     $ (6,874,394 )   $ —       $ (1,663,486 )

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

F-5
 

 

Byzen Digital Inc. 

Notes to consolidated Financial Statements

December 31, 2020

(Unaudited)

 

NOTE 1 –ORGANIZATION AND NATURE OF BUSINESS

 

Byzen Digital, Inc. (the “Company”) was incorporated on September 15, 2006 in Nevada under the name Emergency Pest Services. On November 4, 2017, the Company finalized a reverse merger with Byzen Digital, Inc., a Seychelles Corporation. Currently, the Company is quoted on the OTC markets under ticker symbol BYZN.

 

Byzen’s scope of interest is to acquire companies operating within the clean energy and sustainable market sector. Acquisitions of strategic interest for the company include renewable energy, including wind, solar and sustainable fuels, sustainable packaging, water purification, AI technologies, and blockchain-based data collection, management, and delivery.

 

Clean-Seas, Inc. is Byzen Digitals’ first investment within its newly expanded scope. The acquisition of 100% of Clean Seas is Byzen Digitals’ first entrance into the clean energy space. Clean Seas has made significant progress in identifying and developing a new business model around the clean energy and waste to energy sectors. Byzen’s management team will incorporate the two companies into a single-minded, clean energy-focused entity.

 

Effective October 1, 2020 the Company acquired a 51% controlling interest in the sustainable packaging company, 100BIO, LLC. 100BIO was established in 2016 to create a 100% plant based, compostable packaging solution to replace conventional Styrofoam packaging. The company has developed and patented a proprietary technology allowing it to offer its technology, under license, to manufacturers of food ware products to replace their current lines with an environmentally friendly solution, demonstrating to its customers and shareholders the company’s commitment to sustainability while promoting positive environmental impact. These products can be used by a myriad of end users in the food packaging, fast food, and food service industries as a well as in traditional packaging solutions where traditional Styrofoam solutions are currently being used.

 

NOTE 2 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

The Company’s unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

 

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

 

Concentrations of Credit Risk

We maintain our cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. We continually monitor our banking relationships and consequently have not experienced any losses in our accounts. We believe we are not exposed to any significant credit risk on cash.

 

Cash equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents for the year ended December 31, 2020 or 2019.

 

Principles of Consolidation

The accompanying consolidated financial statements for the year ended December 31, 2020, include the accounts of the Company and its wholly owned subsidiary, Clean-Seas, Inc. There was no activity with Clean-Seas for the year ended December 31, 2020. The accompanying consolidated financial statements year ended December 31, 2019 include the accounts of the Company and its wholly owned subsidiary, Telecoin (see Note 4).

 

Stock-based Compensation

In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Non employee Share-Based Payment Accounting. ASU 2018-07 allows companies to account for nonemployee awards in the same manner as employee awards. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those annual periods. We adopted this ASU on January 1, 2019. The adoption of ASU 2018-07 did not have a material impact on our consolidated financial statements.

 

F-6
 

 

Fair value of financial instruments 

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

 

Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

 

Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

 

Level 3: Pricing inputs that are generally unobservable inputs and not corroborated by market data.

 

The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses and accrued expenses approximate their fair value because of the short maturity of those instruments. The Company’s notes payable amates the fair value of such instruments as the notes bear interest rates that are consistent with current market rates.

 

The following table classifies the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of December 31, 2020: 

Description   Level 1   Level 2   Level 3
Derivative     $     $     $ 1,075,794  
Total     $     $     $ 1,075,794  

  

Income taxes

The Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Income in the period that includes the enactment date.

 

The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertainty income taxes. Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.

 

Net income (loss) per common share

Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common shares outstanding and potentially outstanding common shares assumes that the Company incorporated as of the beginning of the first period presented.

 

The Company’s diluted loss per share is the same as the basic loss per share for the years ended December 31, 2020 and 2019, as the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss.

 

F-7
 

 

Recently issued accounting pronouncements

The Company has implemented all new applicable accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

NOTE 3 - GOING CONCERN

 

The accompanying unaudited consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has an accumulated deficit of $6,874,394 at December 31, 2020 and had a net loss of $2,164,653 (approximately $1,647,200 was non-cash expense related to derivatives and stock compensation) for year ended December 31, 2020. The Company’s ability to raise additional capital through the future issuances of common stock and/or debt financing is unknown. The obtainment of additional financing, the successful development of the Company’s contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. These conditions and the ability to successfully resolve these factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

 

Management plans to continue to implement its business plan and to fund operations by raising additional capital through the issuance of debt and equity securities. The Company’s existence is dependent upon management’s ability to implement its business plan and/or obtain additional funding. There can be no assurance that the Company’s financing efforts will result in profitable operations or the resolution of the Company’s liquidity problems. Even if the Company is able to obtain additional financing, it may include undue restrictions on our operations in the case of debt or cause substantial dilution for our stockholders in the case of equity financing.

 

NOTE 4 – TELECOIN ASSET

 

On May 12, 2016, the Company acquired 17,000,000 telecoins. TeleCoin is a digital currency created using encrypted data/codes which partner and work in synchronization with the Blockchain. The acquisition was accounted for as a business acquisition under ASC 805-10-20. During the year ended December 31, 2017, 2,864,197 of those telecoins were given to third party services providers for services performed. Based on the service provided the Company valued the telecoin at $0.25 (GBP) each for total non cash expense of $922,436. As of December 31, 2018, the company had 14,135,803 telecoins valued at $0.25 (GBP) each for a total value of $4,509,320 after adjusting to US currency. On November 19, 2018, as part of the Company’s exit from the cryptocurrency and blockchain arena, the Company’s agreed to the sale of its UK Subsidiary, Telecoin, and it’s Telecoin cryptocurrency asset, to XALPA Technologies Inc. Per the agreement, 16,000,000 shares of common stock held by XALPA Directors would be returned to the Company. In February 2019 the shares were returned, and the telecoin asset and related accumulated other comprehensive loss was removed from the balance sheet, resulting in a gain on the sale of $605,302. In addition, the sale constitutes a disposal/discontinued operations under ASC 2015-20-45, as such all operations and balance sheet items have been disclosed separately as discontinued operations.

 

NOTE 5 – ACQUISITION

 

Effective October 1,2020, the Company acquired a 51% controlling interest in the sustainable packaging company, 100BIO, LLC. 100BIO was established in 2016 to create a 100% plant based, compostable packaging solution to replace conventional Styrofoam packaging. Pursuant to the terms of the agreement 100BIO agreed to exchange newly issued membership units representing a 51% ownership in 100BIO in exchange for 2,000,000 shares of the Series A Redeemable Preferred Stock of the Company. Commencing on the first day of the month immediately following the date when the Company has received $1,000,000 in net proceeds from the first public offering of its securities (the “Public Offering”) and on the first day of each three month anniversary thereafter, the Company can redeem 25% during the applicable three month period up to 250,000 shares of the Series A Preferred Stock, at a price payable in cash equal to $1.00 per share until all of the shares of the Series A Preferred Stock have been redeemed. The company has repurchased 50,000 shares of the Series A Redeemable Preferred Stock. 100BIO is currently in the process of preparing its books from the date of acquisition. An initial evaluation shows no revenue and minimal assets and liabilities.

 

NOTE 6 – LOAN PAYABLE

 

During the year ended December 31, 2020, a third party loaned the Company a total of $114,500. The loan was used to cover general operating expenses, is non-interest bearing and due on demand.

 

F-8
 

 

NOTE 7 – CONVERTIBLE NOTES

 

On August 7, 2020, 2142723 Alberta, Ltd. (“Alberta”) purchased accrued payables from their respective holders in the total amount of $947,461. The Company agreed to a Settlement Agreement with Alberta in which it will issue shares of common stock sufficient to satisfy the liability at a discounted conversion price, equal to the lesser of $0.05 per share or the lessor of 50% of the lowest trading price in the twenty days preceding the conversion request. On August 19, 2020, Alberta converted $250,000 into 5,000,000 shares of common stock. As of December 31, 2020, the balance on this note is $697,461.

 

On November 25, 2020, the Company executed a Convertible Promissory Note for $110,000 with Greentree Financial Group, Inc (“Greentree”). The Note was issued to fund the service fee per a consulting agreement with Greentree. The note bear interest at 12% and matures on November 25, 2021. The Note is convertible into shares of common stock at 50% of the average of the lowest three trades in the twenty days prior to conversion.

 

A summary of the activity of the derivative liability for the notes above is as follows:

 

Balance at December 31, 2019      
Increase to derivative due to new issuances     3,064,406  
Decrease to derivative due to conversion     (495,319 )
Derivative loss due to mark to market adjustment     (1,493,293 )
Balance at December 31, 2020   $ 1,075,794  

 

A summary of quantitative information about significant unobservable inputs (Level 3 inputs) used in measuring the Company’s derivative liability that are categorized within Level 3 of the fair value hierarchy as of December 31, 2020 is as follows:

 

Inputs   December 31, 2020     Initial
Valuation
 
Stock price   $ .084     $ 0.075 – 0.171  
Conversion price   $ .0395 – .0398     $ 0.036 – 0.05  
Volatility (annual)     131.37% – 132%       131.36% – 255.89%  
Risk-free rate     .10% – .11%       .11% – .14%  
Dividend rate            
Years to maturity     .60 – .90       1  

 

A summary of quantitative information about significant unobservable inputs (Level 3 inputs) used in measuring the Company’s derivative liability that are categorized within Level 3 of the fair value hierarchy at the time of conversion is as follows:

 

Inputs    
Stock price   $ 0.1568  
Conversion price   $ 0.50  
Volatility (annual)     253,88  
Risk-free rate     .13 %
Dividend rate      
Years to maturity     .97  

 

The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s management.

 

NOTE 8 – RELATED PARTY TRANSACTIONS

 

As of December 31, 2020, and 2019, the Company owed Chris Percy, President and CCO, $87,500 and $397,500, respectively, for accrued compensation.

 

During the year ended December 31, 2019, the Company granted 3,000,000 shares of common stock to Mr. Percy for services rendered. The shares were values at $0.048 per share for total non-cash stock compensation expense of $142,500. As of December 31, 2019, the shares had not yet been issued by the transfer agent and are credited to common stock to be issued.

 

As of December 31, 2020, and 2019, the Company owed Dan Bates, CEO, $45,000 and $0, respectively, for accrued compensation. In addition, Mr. Bates, loaned the Company $100 to be used to open the Company’s bank account.

 

F-9
 

 

On May 19, 2020, the Company entered into an Exchange Agreement with Clean-Seas, Inc, (“CSI”) a Delaware corporation owned by Dan Bates, CEO. Pursuant to the terms of the agreement the Company issued 2,500,000 shares of common stock, at $0.01 per share, the agreed upon purchase price, to CSI for 100% of the outstanding stock of CSI. CSI shall become a wholly owned subsidiary of the Company. At the time of the acquisition CSI had no operations, asset or liabilities.

 

On September 17, 2020, the Company granted Jea So, VP and Director, 500,000 shares of common stock for services. The shares were valued at the closing stock price on the date of grant of $0.11, for total non-cash compensation of $55,000.Ms. So is also the founder and principal member of 100BIO, LLC.

 

NOTE 9 – COMMON STOCK

 

In September 2019, Axiom returned 40,000,000 shares of common stock issued to them in 2018 to the Company per the terms of the cancellation of the original agreement.

 

During the year ended December 31, 2019, the Company granted 200,000 shares of common stock for services. The shares were valued at $0.24 per share for total non-cash stock compensation expense of $48,000. The shares were valued based upon the value of the services rendered. As of December 31, 2019, the shares had not yet been issued by the transfer agent and are credited to common stock to be issued. The shares were in issued in 2020.

 

During the year ended December 31, 2019, the Company issued 6,212,100 shares of common stock for services provided in a prior year for total non-cash expense of $9,212. The shares were valued based upon the value of the services rendered.

 

During the year ended December 31, 2019, 1,000,000 shares of common stock were returned to the Company and cancelled.

 

In March 2020, Axiom returned 40,000,000 shares of common stock issued to them in 2018 to the Company per the terms of the cancellation of the original agreement.

 

On April 20, 2020, the Company executed a consulting agreement with Ronin Equity Partners, Inc. (“Ronin”) for a term of one year. Per the terms of the agreement the Company will compensate Ronin $10,000 per month and issue them 2,000,000 shares of common stock. The shares were valued at $0.19 for total non-cash compensation of $100,000.

 

During the year ended December 31, 2020, the Company granted 500,000 shares of common stock for service. The shares were valued at the closing stock price on the date of grant of $0.105 for total non-cash compensation of $52,500.

 

On July 1, 2020, the Company granted 3,000,000 shares of common stock for services. The shares were valued at $0.19 for total non-cash compensation of $380,000.

 

On August 19, 2020, Alberta converted $250,000 into 5,000,000 shares of common stock (note 7).

 

During the year ended December 31, 2020, the Company issued 1,300,000 shares of common stock that had been granted in a prior period.

 

Refer to Note 5 for shares issued to related parties.

 

Refer to Note 4 for discussion of shares returned from Telecoin.

 

NOTE 10 – PREFERRED STOCK

 

The Company is authorized to issue 10,000,000 shares of Preferred Stock at $0.001 par value per share of which 1,000,000 shares are designated as Convertible Series A Stock. The Series A Preferred Stock does not bear a dividend or have voting rights and is not convertible into shares of our Common Stock.

 

Series A Redeemable Preferred Stock

On September 21, 2020, the Company created a series of Preferred Stock designating 2,000,000 shares as Series A Redeemable Preferred Stock. The Series A Redeemable Preferred Stock is owned by the Company’s 51% subsidiary, 100BIO, LLC (Note 5) and ranks senior to the Company’s Common Stock upon the liquidation, dissolution or winding up of the Company. The Series A Preferred Stock does not bear a dividend or have voting rights and is not convertible into shares of our Common Stock.

 

F-10
 

 

Series B Preferred Stock

On December 14, 2020, the Company designated 2,000,000 shares of its authorized preferred stock as Series B convertible, non-voting preferred Stock. The Series B Preferred Stock does not bear a dividend or have voting rights. The Series B Preferred Stock will automatically be converted on January 1, 2023 into shares of common stock at the rate of 10 shares of Common Stock for each share of Preferred Stock. Holders of our Series B Preferred Stock have anti-dilution rights protecting their interests in the Company from the issuance of any additional shares of capital stock (such as the issuance of shares of Common Stock pursuant to this Offering) for a two year period following conversion of the Preferred Stock calculated at the rate of 20% on a fully diluted basis.

 

On December 17, 2020, the Company entered into a three-year consulting agreement with Leonard Tucker LLC. Per the terms of the agreement, Leonard Tucker LLC will receive 2,000,000 shares of Series B Preferred Stock for services provided. As of December 31, 2020, the shares of preferred stock are issuable to Leonard Tucker LLC.

 

NOTE 11 – INCOME TAX

 

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company has evaluated Staff Accounting Bulletin No. 118 regarding the impact of the decreased tax rates of the Tax Cuts & Jobs Act. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The U.S. federal income tax rate of 21% is being used.

 

Net deferred tax assets consist of the following components as of December 31:

 

    2020   2019
Deferred Tax Assets:                
NOL Carryover   $ (127,000 )   $ (113,00 )
Related party accrual     2,300       2,300  
Payroll accrual     1,500       1,500  
Deferred tax liabilities:                
Less valuation allowance     123,200       109,200  
Net deferred tax assets   $     $  

 

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

 

    2020   2019
Book loss   $ (454,600 )   $ (120,600 )
Other nondeductible expenses     351,300       41,900  
Related party accrual            
Valuation allowance     103,300       78,700  
    $     $  

 

At December 31, 2020, the Company had net operating loss carry forwards of approximately $957,000 that may be offset against future taxable income from the year 2021 to 2040. No tax benefit has been reported in the December 31, 2020 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.

 

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal Income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years before 2016.

 

NOTE 12 – SUBSEQUENT EVENTS

 

In accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date that the financial statements were issued and has determined that it does not have any material subsequent events to disclose in these unaudited consolidated financial statements other than the following.

 

Subsequent to December 31, 2020, the Company redeemed 50,000 shares of the Series A preferred stock from 100Bio for $50,000.

 

F-11
 

 

Subsequent to December 31, 2020, the Company received total proceeds of $525,000 from the issuance of notes payable. All the notes were issued with original issue discounts so that the total amount due is $959,375.

 

On February 9, 2021, the Company amended its Articles of Incorporation whereby 2,000,000 shares of preferred stock were designated Series C Convertible Preferred Stock. The holders of the Series C preferred stock are entitled to 100 votes and shall vote together with the holders of common stock. Each share of the Series C preferred stock is convertible in ten shares of common stock.

 

Subsequent to December 31, 2020, Alberta converted $697,461 of their note payable into 13,949,210 shares of common stock. 

 

On February 19, 2021, the Company amended its Articles of Incorporation whereby 2,000,000 shares of preferred stock were designated Series C Convertible Preferred Stock. The holders of the Series C preferred stock are entitled to 100 votes and shall vote together with the holders of common stock. Each share of the Series C preferred stock is convertible in ten shares of common stock.

 

On February 21, 2021, the Company amended the employment agreement with Dan Bates, CEO. The amendment extended the term of his agreement from three years commencing May 27, 2020 to expire on May 27, 2025. In addition, Mr. Bates was granted 2,000,000 shares of Series C preferred convertible stock.

 

The Company has entered into an at-will consulting agreement with Rachel Boulds to serve as a part-time Chief Financial Officer. Ms. Boulds is to receive $3,500 a month. On February 22, 2021, the Company granted 500,000 shares of common stock to Ms. Boulds for services.

 

On March 12, 2021, the Company amended its Articles of Incorporation to change its name from Byzen Digital Inc. to Clean Vision Corporation.

 

F-12
 

 

PART III - EXHIBITS

 

ITEM 16. INDEX TO EXHIBITS

 

Exhibit #

 

2.1   Articles of Incorporation*
2.2   Byzen Digital Inc. By-Laws
2.3   Certificate of Designation of Series A Redeemable Preferred Stock*
2.4   Certificate of Designation of Series B Non-voting Convertible Preferred Stock*
2.5   Certificate of Designation of Series C Convertible Preferred Stock*
6.1   Exchange Agreement between Clean-Seas, Inc. and Byzen Digital Inc.*  
6.2   Exchange Agreement between 100BIO,LLC and Byzen Digital, Inc.* 
6.3   Employment Agreement between Dan Bates and Byzen Digital, Inc*  
6.4   Employment Agreement between Jea So and Byzen Digital, Inc.*
6.5   Employment Agreement between Christopher Percy and Byzen Digital, Inc*
6.6   Amendment to Employment Agreement between Dan Bates and Byzen Digital, Inc. *
6.7   Employment Agreement between Erfan Ibrahim and Byzen Digital, Inc.*
6.8   Tiger Trout Capital Promissory Note*
6.9   Michael Magliochetti Promissory Note*
6.10   Magliochetti Family Trust Promissory Note*
6.11   G.W. Holdings Group, LLC Promissory Note*
6.12   Greentree Financial Group Inc. Convertible Note*
6.13   Eagle Equities Convertible Redeemable Note*
6.14   CrossLake Capital LLC Convertible Promissory Note Agreement*
6.15   Always Energy Promissory Note*
6.16   Consulting Agreement between Leonard Tucker LLC and Byzen Digital, Inc.*
12.1   Opinion of TroyGould PC*

 

*Filed herewith

SIGNATURES

 

Pursuant to the requirements of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this draft offering statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Los Angeles, State of California, on April 7, 2021.

 

  BYZEN DIGITAL INC.  
       
  By: /s/ DAN BATES  
  Name: Dan Bates  
  Title: Chief Executive Officer  

 

58
 

 

Name and Signature     Title     Date
             
/s/ Dan Bates     Chief Executive Officer and Director     April 7, 2021
             
/s/ Christopher Percy     President and Director     April 7, 2021
             
/s/ Rachel Boulds     Chief Financial Officer
(Principal Financial and Accounting Officer)
    April 7, 2021

 

59

 

 

 

 

EXHIBIT 2.1

 

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37
 

 

38
 

 

39
 

 

40
 

 

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42
 

 

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44

 

 

 

EXHIBIT 2.2

 

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5
 

 

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8
 

 

9
 

 

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11
 

 

12
 

 

13
 

 

14
 

 

15
 

 

16
 

 

17
 

 

18

 

 

 

EXHIBIT 2.3

 

CERTIFICATE OF DESIGNATION
OF
RIGHTS, PREFERENCES AND PRIVILEGES
OF
SERIES A REDEEMABLE PREFERRED STOCK
OF
BYZEN DIGITAL,INC.

 

The undersigned Dan Bates certifies that:

 

1.                  He is the duly acting Chief Executive Officer of Byzen Digital, Inc., a corporation organized and existing under Chapter 78 of the Nevada Revised Statutes (the “Corporation”).

 

2.                  Pursuant to authority conferred upon the Board of Directors by the Amended and Restated Articles of Incorporation of the Corporation, and pursuant to the provisions of Section 78.195 of Chapter 78 of the Nevada Revised Statutes, said Board of Directors, pursuant to action taken by unanimous written consent on September--, 2020, adopted a resolution establishing the rights, preferences, privileges and restrictions of, and the number of shares comprising, the Corporation’s Series A Redeemable Preferred Stock, which resolution is as follows:

                

WHEREAS, the Articles of Incorporation of the Corporation, as amended, authorize a class of stock designated as Preferred Stock, with a par value of $0.001 per share, comprising 10,000,000 shares, and provide that the Board of Directors of the Corporation may by written resolution designate one or more series of the Preferred Stock and fix the rights, preferences, privileges and restrictions of, and the number of shares constituting, each such series of Preferred Stock;

 

WHEREAS, the Board of Directors has not authorized any series of Preferred Stock:;

 

WHEREAS, the Board of Directors believes it is in the best interests of the Corporation and its shareholders to create a new series of Preferred Stock designated as the “Series A Redeemable Preferred Stock”:

 

NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby create a series of Preferred Stock and does hereby in this Certificate of Designation (this “Certificate of Designation”) establish and fix and herein state and express the designation, rights, preferences, powers, restrictions and limitations of such series of Preferred Stock as follows:

 

DESIGNATION AND AMOUNT. There is hereby created a series of Preferred Stock that shall be designated as “Series A Redeemable Preferred Stock” (the “Series A Preferred Stock”) and the number of shares constituting such series shall be 2,000,000. The rights, preferences, powers, restrictions and limitations of the Series A Preferred Stock shall be as set forth herein.

 

DEFINITIONS. As used herein, in addition to those terms otherwise defined herein, the following terms shall have the following meanings:

 

1
 

 

Board of Directors” shall mean the Board of Directors of the Corporation or, with respect to any action to be taken by the Board of Directors, any committee of the Board of Directors duly authorized to take such action.

 

Common Stock” shall mean the common stock, par value $0.001 per share, of the Corporation, or any other class of stock resulting from successive changes or reclassifications of such common stock consisting solely of changes in par value, or from no par value to par value, or as a result of a subdivision, combination, or merger, consolidation or similar transaction in which the Corporation is a constituent corporation.

 

Deemed Liquidation Event” shall mean a merger or consolidation in which the shareholders of the Corporation receive, in exchange for their shares, consideration that does not include any voting securities of one of the merging entities or a parent entity of one of the merging entities.

 

Holder” shall mean a holder of record of an outstanding share or shares of the Series A Preferred Stock.

 

Parity Stock” shall mean each class of capital stock or series of preferred stock the terms of which expressly provide that such class or series will rank on parity with the Series A Preferred Stock upon the liquidation, winding-up or dissolution of the Corporation.

 

Person” shall mean any individual, corporation, general partnership, limited partnership, limited liability partnership, joint venture, association, joint-stock corporation, trust, limited liability corporation, unincorporated organization or government or any agency or political subdivision thereof.

 

“Redemption Price shall have the meaning set forth in Section 6.1

 

Series A Liquidation Amount” shall have the meaning set forth in Section 3.1.

 

Series A Original Issue Price” shall mean $1.00 per share, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A Preferred Stock.

 

Senior Stock” shall mean each class of capital stock or series of preferred stock the terms of which expressly provide that such class or series will rank senior to the Series A Preferred Stock upon the liquidation, winding-up or dissolution of the Corporation.

 

2
 

 

LIQUIDATION.

 

Preferential Payments to Holders of Series A Preferred Stock. The Series A Preferred Stock shall rank senior to the Common Stock upon the voluntary or involuntary liquidation, dissolution or winding up of the Corporation or a Deemed Liquidation Event. In such event, following any payment of preferential amounts required to be paid to the holders of any Senior Stock, the Holders shall be entitled to be paid out of the assets of the Corporation available for distribution to its shareholders before any payment shall be made to the holders of Junior Stock by reason of their ownership thereof, an amount per share equal to the Series A Original Issue Price with respect to the shares of Series A Preferred Stock then outstanding immediately prior to such liquidation, dissolution, winding up or Deemed Liquidation Event (the amount payable pursuant to this sentence is hereinafter referred to as the “Series A Liquidation Amount”). If upon any such liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, the assets of the Corporation available for distribution to its shareholders shall be insufficient to pay the Holders and the holders of all other classes of Parity Stock the full amount to which they shall be entitled, the Holders of shares of Series A Preferred Stock and holders of all other Parity Stock shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.

 

Payments to Holders of Junior Stock. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or a Deemed Liquidation Event, after the payment of all preferential amounts required to be paid to the holders of Senior Stock, the Series A Preferred Stock and Parity Stock, the remaining assets of the Corporation available for distribution to its shareholders shall be distributed among the holders of shares of Junior Stock an in such order of priority as may be required if some holders of Junior Stock have priority over others.

 

Effecting a Deemed Liquidation Event. The Corporation shall not have the power to effect a Deemed Liquidation Event unless the agreement or plan of merger or consolidation for such transaction (the “Merger Agreement”) provides that the consideration payable to the shareholders of the Corporation shall be allocated among the shareholders in accordance with Sections 0 and 0.

 

Amount Deemed Paid or Distributed. The amount deemed paid or distributed to the holders of capital stock of the Corporation upon any Deemed Liquidation Event shall be the cash or the value of the property, rights or securities paid or distributed to such holders by the Corporation or the acquiring Person. The value of such property, rights or securities shall be determined in good faith by the Board of Directors.

 

Allocation of Escrow. In the event of a Deemed Liquidation Event, if any portion of the consideration payable to the shareholders of the Corporation is placed into escrow and/or is payable to the shareholders of the Corporation subject to contingencies, the Merger Agreement shall provide that: (a) the portion of such consideration that is not placed in escrow and not subject to any contingencies (the “Initial Consideration”) shall be allocated among the holders of capital stock of the Corporation in accordance with Sections 0 and 0 as if the Initial Consideration were the only consideration payable in connection with such Deemed Liquidation Event; and (b) any additional consideration which becomes payable to the shareholders of the Corporation upon release from escrow or satisfaction of contingencies shall be allocated among the holders of capital stock of the Corporation in accordance with Sections 0 and 0 after taking into account the previous payment of the Initial Consideration as part of the same transaction.

 

3
 

VOTING RIGHTS.

 

General. The Series A Preferred Stock shall not be entitled to any voting rights except pursuant to Section 4.2

 

Series A Preferred Stock Protective Provisions. The Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Articles of Incorporation) the written consent or affirmative vote of the Holders of at least a majority of the then outstanding shares of Series A Preferred Stock, given in writing or by vote at a meeting, consenting or voting (as the case may be) separately as a class, and any such act or transaction entered into without such consent or vote shall be null and void ab initio, and of no force or effect:

 

Change the rights, preferences, privileges or restrictions of the Series A Preferred Stock.

 

DIVIDENDS.

 

No Dividends. The Series A Preferred Stock shall not be entitled to dividends.

 

REDEMPTION.

 

Commencing on the first day of the month immediately following the date when the Corporation has received $1,000,000 in net proceeds from the first public offering of its securities (the “Public Offering”) after the filing of this Certificate of Determination. and on the first day of each three month anniversary thereafter, subject to the legal availability of funds therefor, the Corporation shall redeem 25% of the net proceeds from the Public Offering received during the applicable three month period up to 250,000 shares of the Series A Preferred Stock, at a price payable in cash equal to $1.00 per share (the “Redemption Price”) until all of the shares of the Series A Preferred Stock have been redeemed. In the event of redemption of less than all of the outstanding Series A Preferred Stock, such redemption shall be pro rata or by lot as determined by the Board of Directors.

 

The aggregate amount of the Redemption Price shall be used as provided in that certain Exchange Agreement dated as of September 17, 2020 between the Corporation and 100BIO, LLC.

 

MISCELLANEOUS

 

If any Series A Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation shall, upon the request and at the expense of the Holder, issue, in exchange and in substitution for and upon cancellation of the mutilated Series A Preferred Stock certificate, or in lieu of and substitution for the Series A Preferred Stock certificate lost, stolen or destroyed, a new Series A Preferred Stock certificate of like tenor and representing an equivalent amount of shares of the Series A Preferred Stock, but only upon receipt of evidence of such loss, theft or destruction of such Series A Preferred Stock certificate, and receipt of an indemnity and a bond (or other adequate security) satisfactory to the Corporation.

 

Any notice required or permitted by the provisions of this Certificate of Designation to be given to a Holder shall be mailed, postage prepaid, to the address last shown on the records of the Corporation, or given by electronic communication in compliance with the provisions of the Nevada General Corporation Law and the Bylaws of the Corporation, and shall be deemed sent upon such mailing or electronic transmission. Neither failure to deliver such notice, nor any defect therein or in the delivery thereof, to any particular Holder shall affect the sufficiency of the notice or the validity of the proceedings referred to in such notice with respect to the other Holders or affect the legality or validity of any redemption, conversion, distribution, rights, warrant, reclassification, consolidation, merger, conveyance, transfer, dissolution, liquidation, winding-up or other action, or the vote upon any action with respect to which the Holders are entitled to vote. All notice periods referred to herein shall commence on the date of the mailing or electronic transmission of the applicable notice. Any notice which was mailed or delivered in the manner herein provided shall be conclusively presumed to have been duly given whether or not the Holder receives the notice.

 

4
 

 

Shares of the Series A Preferred Stock redeemed by the Corporation shall be retired and canceled and shall have the status of authorized but unissued shares of Preferred Stock of the Corporation undesignated as to series and may with any and all other authorized but unissued shares of Preferred Stock of the Corporation be designated or redesignated and issued or reissued, as the case may be, as part of any series of preferred stock of the Corporation.

 

In case, at any time while any of the shares of the Series A Preferred Stock are outstanding:

 

The Corporation shall not declare a dividend (or any other distribution) on any Junior Stock other than a dividend paid in like shares of Junior Stock.

 

The headings of the various sections and subsections of this Certificate of Designation are for convenience of reference only and shall not affect the interpretation of any of the provisions of this Certificate of Designation.

 

Whenever possible, each provision of this Certificate of Designation shall be interpreted in a manner as to be effective and valid under applicable law and public policy. If any provision set forth herein is held to be invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating or otherwise adversely affecting the remaining provisions of this Certificate of Designation. No provision herein set forth shall be deemed dependent upon any other provision unless so expressed herein. If a court of competent jurisdiction should determine that a provision of this Certificate of Designation would be valid or enforceable if a period of time were extended or shortened, then such court may make such change as shall be necessary to render the provision in question effective and valid under applicable law.

 

Any of the rights, powers, preferences and other terms of the Series A Preferred Stock set forth herein may be waived on behalf of all Holders by the affirmative written consent or vote of the Holders of at least 50% of the shares of Series A Preferred Stock then outstanding

 

The Holders as such are not entitled to any preemptive or preferential right to purchase or subscribe to any capital stock, obligations, warrants or other securities of the Corporation.

 

Except as may otherwise be required by law, the shares of the Series A Preferred Stock shall not have any powers, designations, preferences and relative, participating, optional or other special rights, other than those specifically set forth in this Certificate of Designation or the Articles of Incorporation.”

 

5
 

 

In Witness Whereof, the undersigned has signed this Certificate on September 29, 2020.

 

  Byzen Digital, Inc.
   
  By: /s/ Dan Bates
    Dan Bates, Chief Executive Officer

 

6

 

 

 

 

EXHIBIT 2.4

ARTICLES OF AMENDMENT

TO

ARTICLES OF INCORPORATION 

OF

BYZEN DIGITAL, INC.

 

DESIGNATING

SERIES B CONVERTIBLE NON-VOTING PREFERRED STOCK

 

Pursuant to Chapter 78.195 of the of the Nevada Revised Statutes, Byzen Digital, Inc., a Nevada corporation (the “Corporation”), does hereby certify:

 

The Articles of Incorporation of the Corporation (the “Charter”) confer upon the Board of Directors of the Corporation (the “Board of Directors”) the authority to provide for the issuance, from time to time, in one or more series, of shares of preferred stock and, in the resolution or resolutions providing for such issue, establish for each such series the number of shares, the designations, powers, privileges, preferences and rights, if any, of the shares of such series, and the qualifications, limitations and restrictions, if any, of such series, to the fullest extent permitted by the Nevada Revised Statutes as the same exists or may hereafter be amended. On December 14th, 2020, the Board of Directors duly adopted the following resolution creating a series of preferred stock designated as the Series B Convertible Non-Voting Preferred Stock, comprised of Two Million (2,000,000) authorized shares, and such resolution has not been modified and is in full force and effect on the date hereof:

 

RESOLVED that, pursuant to the authority vested in the Board of Directors in accordance with the provisions of the Charter, a series of the class of authorized preferred stock, par value $0.001 per share, of the Corporation is hereby created and that the designation and number of shares thereof and the powers, preferences and rights of the shares of such series, and the qualifications, limitations and restrictions thereof are as follows:

 

FIRST:   These Articles of Amendment were adopted by the Board of Directors on December 14th, 2020 in the manner prescribed by Chapter 78.195 of the of the Nevada Revised Statutes (“NRS”). Shareholder action was not required.
   
SECOND:   That pursuant to the authority vested in the Board of Directors of the Corporation in accordance with the provisions of the Articles of Incorporation, as amended, of the Corporation (the “Articles of Incorporation”), the Board of Directors adopted the following resolution on December 14th, 2020 designating 2,000,000 shares of the Company’s authorized preferred stock as “Series B Convertible Non-Voting Preferred Stock”:

 

RESOLVED, that pursuant to the authority vested in the Board of Directors of this Corporation in accordance with the provisions of the Articles of Incorporation, a series of Preferred Stock, having a par value of $0.001 per share, of the Corporation be and hereby is created, and that the designation and number of shares thereof, and the voting and other powers, preferences and relative, participating, optional or other rights of the shares of such series, and the qualifications, limitations and restrictions thereof, are as follows:

 

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TERMS OF 

SERIES “B” CONVERTIBLE NON-VOTING PREFERRED STOCK

 

Two Million (2,000,000) shares of the authorized and unissued Preferred Stock of the Corporation are hereby designated “Series B Convertible Non-Voting Preferred Stock” with the following rights, preferences, powers, privileges, restrictions, qualifications, and limitations.

 

1.      Fractional Shares. Series B Convertible Non-Voting Preferred Stock may be issued in fractional shares.

 

2.   Dividends. Series B Convertible Non-Voting Preferred Stock shall be treated pari passu with Common Stock except that the dividend on each share of Series B Convertible Preferred Stock shall be equal to the amount of the dividend declared and paid on each share of Common Stock multiplied by the Conversion Rate.

 

3.   Liquidation, Dissolution, or Winding Up. Payments to Holders of Series B Convertible Non-Voting Preferred Stock shall be treated pari passu with Common Stock except that the payment on each share of Series B Convertible Non-Voting Preferred Stock shall be equal to the amount of the payment on each share of Common Stock multiplied by the Conversion Rate.

 

4.   Voting. The shares of Series B Convertible Non-Voting Preferred Stock shall not vote on any matter and not be entitled to the number of votes per share equal to the Conversion Rate.

 

5.   Conversion Rate and Adjustments.

 

(a) Conversion Rate. The Conversion Rate shall be 10 shares of Common Stock (as adjusted pursuant to this Section 5) for each share of Series B Convertible Non-Voting Preferred Stock.

 

(b) Adjustment for Stock Splits and Combinations. If the Corporation shall at any time or from time to time after the issuance of the Series B Convertible Non-Voting Preferred Stock effect a subdivision of the outstanding Common Stock, the Conversion Rate then in effect immediately before that subdivision shall be proportionately increased. If the Corporation shall at any time or from time to time after the issuance of the Series B Convertible Non-Voting Preferred Stock combine the outstanding shares of Common Stock, the Conversion Rate then in effect immediately before the combination shall be proportionately decreased. Any adjustment under this paragraph shall become effective at the close of business on the date the subdivision or combination becomes effective.

 

(c) Adjustment for Merger or Reorganization, etc. If there shall occur any reorganization, recapitalization, reclassification, consolidation, or merger involving the Corporation in which the Common Stock (but not the Series B Convertible Non-Voting Preferred Stock) is converted into or exchanged for securities, cash, or other property, then, following any such reorganization, recapitalization, reclassification, consolidation, or merger, each share of Series B Convertible Non-Voting Preferred Stock shall thereafter be convertible in lieu of the Common Stock into which it was convertible prior to such event into the kind and amount of securities, cash or other property that a holder of the number of shares of Common Stock of the Corporation issuable upon conversion of one share of Series B Convertible Non-Voting Preferred Stock immediately prior to such reorganization, recapitalization, reclassification, consolidation, or merger would have been entitled to receive pursuant to such transaction.

 

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6.   Automatic Conversion. On January 1st, 2023 unless unanimously approved to be extended by the Series B Convertible Non-Voting Preferred Stockholders of record.

 

7.  

Anti-Dilution Provision.

 

(a) The holders of the Series B Convertible Non-Voting Preferred Stock shall have anti-dilution rights (the “Anti-Dilution Rights”) during the Two-year period after the Series B Convertible Preferred converted into shares of Common Stock at its then effective Conversion Rate. The anti-dilution rights shall be pro-rata to the holder’s ownership of the Series B Convertible Non-Voting Preferred Stock. The Company agrees to assure that the holders of the Series B Convertible Non-Voting Preferred Stock shall have and maintain at all times, full ratchet anti-dilution protection rights as to the total number of issued and outstanding shares of common stock and preferred stock of the Company from time to time, at the rate of 20%, calculated on a fully diluted basis. In the event that the Company issues any shares of common stock, preferred stock or any security convertible into or exchangeable for common stock or preferred stock to any person or entity, the Company agrees to undertake all necessary measures as may be necessary or expedient to accommodate its performance under this Series B Convertible Non-Voting Preferred Stock Designation, including, without limitation, the amendment of its articles of incorporation to the extent necessary to provide for a sufficient number of shares of authorized common stock or preferred stock to be issued to Series B Convertible Non-Voting Preferred Stock holders so as to maintain in Series B Convertible Non-Voting Preferred Stock holders, a 20% interest in the common stock and preferred stock of the Company, calculated on a fully-diluted basis.

 

8.   Waiver. Any of the rights, powers, or preferences of the holders of Series B Convertible Non-Voting Preferred Stock set forth herein may be waived by the affirmative consent or vote of the holders of at least a majority of the shares of Series B Convertible Non-Voting Preferred Stock then outstanding.

 

RESOLVED, FURTHER, that any executive officer of the Corporation be and they hereby is authorized and directed to prepare and file a Certificate of Designation of Preferences, Rights and Limitations in accordance with the foregoing resolution and the provisions of Nevada law.

 

IN WITNESS WHEREOF, the undersigned have executed these Articles of Amendment this 14th day of December 2020.

 

   
  Name: Dan Bates
  Title: CEO

 

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EXHIBIT 2.5

 

ARTICLES OF AMENDMENT TO

ARTICLES OF INCORPORATION OF

BYZEN DIGITAL, INC.

 

DESIGNATING

SERIES C CONVERTIBLE PREFERRED STOCK

 

Pursuant to Chapter 78.195 of the of the Nevada Revised Statutes, Byzen Digital, Inc., a Nevada corporation (the “Corporation”), does hereby certify:

 

The Articles of Incorporation of the Corporation (the “Charter”) confer upon the Board of Directors of the Corporation (the “Board of Directors”) the authority to provide for the issuance, from time to time, in one or more series, of shares of preferred stock and, in the resolution or resolutions providing for such issue, establish for each such series the number of shares, the designations, powers, privileges, preferences and rights, if any, of the shares of such series, and the qualifications, limitations and restrictions, if any, of such series, to the fullest extent permitted by the Nevada Revised Statutes as the same exists or may hereafter be amended. On February 9, 2021, the Board of Directors duly adopted the following resolution creating a series of preferred stock designated as the Series C Convertible Preferred Stock, comprised of 2,000,000 authorized shares, and such resolution has not been modified and is in full force and effect on the date hereof:

 

RESOLVED that, pursuant to the authority vested in the Board of Directors in accordance with the provisions of the Charter, a series of the class of authorized preferred stock, par value $0.001 per share, of the Corporation is hereby created and that the designation and number of shares thereof and the powers, preferences and rights of the shares of such series, and the qualifications, limitations and restrictions thereof are as follows:

 

FIRST: These Articles of Amendment were adopted by the Board of Directors on February 9, 2021 in the manner prescribed by Chapter 78.195 of the of the Nevada Revised Statutes (“NRS”). Shareholder action was not required.
   
SECOND: That pursuant to the authority vested in the Board of Directors of the Corporation in accordance with the provisions of the Articles of Incorporation, as amended, of the Corporation (the “Articles of Incorporation”), the Board of Directors adopted the following resolution on February 9, 2021 designating 2,000,000 shares of the Company’s authorized preferred stock as “Series C Convertible Preferred Stock”:

 

RESOLVED, that pursuant to the authority vested in the Board of Directors of this Corporation in accordance with the provisions of the Articles of Incorporation, a series of Preferred Stock, having a par value of $0.001 per share, of the Corporation be and hereby is created, and that the designation and number of shares thereof, and the voting and other powers, preferences and relative, participating, optional or other rights of the shares of such series, and the qualifications, limitations and restrictions thereof, are as follows:

 

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TERMS OF SERIES “C” CONVERTIBLE PREFERRED STOCK

 

Two Million (,2,000,000) shares of the authorized and unissued Preferred Stock of the Corporation are hereby designated “Series C Convertible Preferred Stock” with the following rights, preferences, powers, privileges, restrictions, qualifications, and limitations.

 

1.      Fractional Shares. Series C Convertible Preferred Stock may be issued in fractional shares.

 

2.      Dividends. Series C Convertible Preferred Stock shall be treated pai passu with Common Stock and Series B Convertible Non-Voting Preferred Stock except that the dividend on each share of Series C Convertible Preferred Stock shall be equal to the amount of the dividend declared and paid on each share of Common Stock multiplied by the Conversion Rate.

 

3.      Liquidation, Dissolution, or Winding Up. Payments to Holders of Series C Preferred Stock shall be treated pari passu with Common Stock and the Series B Convertible Non-Voting Preferred Stock except that the payment on each share of Series C Preferred Stock shall be equal to the amount of the payment on each share of Common Stock multiplied by the Conversion Rate.

 

4.      Voting. The holders of the Series C Convertible Preferred Stock shall vote together with the holders of the Common Stock of the Corporation as a single class on all matters submitted to a vote of the stockholders with each share of Series C Convertible Preferred Stock entitled to 100 votes and shall be entitled to notice of any stockholders meeting in accordance with the Bylaws of the Corporation.
                  

5.     

Conversion Rate and Adjustments.

 

(a)      Conversion Rate. The Conversion Rate shall be 10 shares of Common Stock (as adjusted pursuant to this Section 5) for each share of Series C Convertible Preferred Stock.

 

(b)      Adjustment for Stock Splits and Combinations. If the Corporation shall at any time or from time to time after the issuance of the Series C Convertible Preferred Stock effect a subdivision of the outstanding Common Stock, the Conversion Rate then in effect immediately before that subdivision shall be proportionately increased. If the Corporation shall at any time or from time to time after the issuance of the Series C Convertible Preferred Stock combine the outstanding shares of Common Stock, the Conversion Rate then in effect immediately before the combination shall be proportionately decreased. Any adjustment under this paragraph shall become effective at the close of business on the date the subdivision or combination becomes effective.

 

(c)     Adjustment for Merger or Reorganization, etc. If there shall occur any reorganization, recapitalization, reclassification, consolidation, or merger involving the Corporation in which the Common Stock (but not the Series C Convertible Preferred Stock) is converted into or exchanged for securities, cash, or other property, then, following any such reorganization, recapitalization, reclassification, consolidation, or merger, each share of Series C Convertible Preferred Stock shall thereafter be convertible in lieu of the Common Stock into which it was convertible prior to such event into the kind and amount of securities, cash or other property that a holder of the number of shares of Common Stock of the Corporation issuable upon conversion of one share of Series C Convertible Preferred Stock immediately prior to such reorganization, recapitalization, reclassification, consolidation, or merger would have been entitled to receive pursuant to such transaction.

 

 

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6.      Automatic Conversion. The Series C Convertible Preferred Stock shall not be convertible prior to January 1, 2023 and shall be automatically convertible on such date unless such date is extended if unanimously approved to be extended by the Series C Convertible Preferred stockholders of record.

 

7.     

 Anti-Dilution Provision.

 

(a)        The holders of the Series C Convertible Preferred Stock shall have anti-dilution rights (the “Anti-Dilution Rights”) during the two-year period after the Series C Convertible Preferred has been converted into shares of Common Stock at its then effective Conversion Rate. The anti-dilution rights shall be pro- rata to the holder’s ownership of the Series C Convertible Preferred Stock. The Company agrees to assure that the holders of the Series C Convertible Preferred Stock shall have and maintain at all times, full ratchet anti-dilution protection rights as to the total number of issued and outstanding shares of common stock and preferred stock of the Company from time to time, at the rate of 20%, calculated on a fully diluted basis. In the event that the Company issues any shares of common stock, preferred stock or any security convertible into or exchangeable for common stock or preferred stock to any person or entity, the Company agrees to undertake all necessary measures as may be necessary or expedient to accommodate its performance under this Series C Convertible Preferred Stock Designation, including, without limitation, the amendment of its articles of incorporation to the extent necessary to provide for a sufficient number of shares of authorized common stock or preferred stock to be issued to Series C Convertible Preferred Stock holders so as to maintain in Series C Convertible Preferred Stock holders, a 20% interest in the common stock and preferred stock of the Company, calculated on a fully-diluted basis.

 

 

8.      Waiver. Any of the rights, powers, or preferences of the holders of Series C Convertible Preferred Stock set forth herein may be waived by the affirmative consent or vote of the holders of at least a majority of the shares of Series C Convertible Preferred Stock then outstanding.

        

RESOLVED, FURTHER, that any executive officer of the Corporation be and he hereby is authorized and directed to prepare and file a Certificate of Designation of Preferences, Rights and Limitations in accordance with the foregoing resolution and the provisions of Nevada law.

 

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IN WITNESS WHEREOF, the undersigned have executed these Articles of Amendment this 9th day of February, 2021.

 

  /s/ Dan Bates
  Name: Dan Bates
  Title: Chief Executive Officer

 

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EXHIBIT 6.1

 

EXCHANGE AGREEMENT

 

This Exchange Agreement, dated as of May 15, 2020 (this “Agreement”) by and among Byzen Digital, Inc., a Nevada corporation (“Byzen”), on the one hand, and Clean-Seas, Inc. (“CSI”), a Delaware corporation and Dan Bates (the “Shareholder”), on the other hand. For purposes of this Agreement, Byzen, and the Shareholder are sometimes collectively referred to as the “Parties” and individually as a “Party.”

 

WHEREAS, the Shareholder owns all the issued and outstanding common shares (the “CSI Shares”) of Clean-Seas, Inc., a Delaware corporation (“CSI”); and

 

WHEREAS, (i) the Shareholder believes it is in its best interests for the Shareholder to exchange 100% of the CSI Shares for Two Million Five Hundred Thousand (2,500,000) shares of common stock of Byzen (the “Byzen Shares”); and (ii) Byzen believes it is in its best interest and the best interest of its stockholders to acquire the CSI Shares in exchange for the Byzen Shares, all upon the terms and subject to the conditions set forth in this Agreement (the “Exchange”); and

 

WHEREAS, it is the intention of the parties that the Exchange shall qualify as a transaction exempt from registration or qualification under the Securities Act of 1933, as amended (the “Securities Act”); and

 

WHEREAS, it is the intention of the parties that upon the Closing (as hereinafter defined) CSI shall become a wholly owned subsidiary of Byzen.

 

NOW, THEREFORE, in consideration of the mutual terms, conditions and other agreements set forth herein, the parties hereto agree as follows:

 


EXCHANGE OF CSI SHARES FOR BYZEN SHARES

 

Agreement to Exchange CSI Shares for Byzen Shares. On the Closing Date (as hereinafter defined) and upon the terms and subject to the conditions set forth in this Agreement, the Shareholder shall assign, transfer, convey and deliver the CSI Shares to Byzen and, in consideration and exchange for the CSI Shares, Byzen shall issue, transfer, convey and deliver the Byzen Shares to the Shareholder.

 

Closing and Actions at Closing. The closing of the Exchange (the “Closing”) shall take place remotely via the exchange of documents and signatures at such time and date as the parties hereto shall agree orally or in writing (the “Closing Date”).

 

Restrictions on Byzen Shares. The Byzen Shares have not been registered and are being issued pursuant to a specific exemption under the Securities Act, as well as under certain state securities laws for transactions by an issuer not involving any public offering or in reliance on limited federal preemption from such state securities registration laws, based on the suitability and investment representations made by the Shareholders to Byzen. The Byzen Shares must be held and may not be sold, transferred, or otherwise disposed of for value unless such securities are subsequently registered under the Securities Act or an exemption from such registration is available, and that the certificates representing the Byzen Shares will bear a legend in substantially the following form so restricting the sale of such securities:

 

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The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and are “restricted securities” within the meaning of Rule 144 promulgated under the Securities Act. The securities have been acquired for investment and may not be sold or transferred without complying with Rule 144 in the absence of an effective registration or other compliance under the Securities Act.

 


REPRESENTATIONS AND WARRANTIES OF BYZEN

 

Byzen represents, warrants and agrees that all statements in the following subsections of this Article II are true and complete as of the date hereof.

 

Corporate Organization.

 

Byzen is a corporation duly organized, validly existing and in good standing under the laws of Nevada, and has all requisite corporate power and authority to own its properties and assets and governmental licenses, authorizations, consents and approvals to conduct its business as now conducted and is duly qualified to do business and is in good standing in each jurisdiction in which the nature of its activities makes such qualification and being in good standing necessary, except where the failure to be so qualified and in good standing will not have a Material Adverse Effect on the activities, business, operations, properties, assets, condition or results of operation of Byzen. “Material Adverse Effect” means, when used with respect to Byzen or CSI, any event, occurrence, fact, condition, change or effect, which, individually or in the aggregate, would reasonably be expected to be materially adverse to the business, operations, properties, assets, condition (financial or otherwise), or operating results of Byzen, or materially impair the ability of Byzen to perform its obligations under this Agreement, excluding any change, effect or circumstance resulting from (i) the announcement, pendency or consummation of the transactions contemplated by this Agreement; or (ii) changes in the U.S. securities markets generally.

 

Copies of the Articles of Incorporation and Bylaws of Byzen with all amendments thereto, as of the date hereof (the “Byzen Charter Documents”), have been, or will be upon request, furnished to CSI, and such copies are accurate and complete as of the date hereof.

 

Capitalization of Byzen.

 

The authorized capital stock of Byzen consists of: (i) 190,000,000 shares of common stock, par value $0.001, of which 103,408,516 shares of common stock are issued and outstanding; and (ii) 10,000,000 shares of preferred stock, par value $0.001, of which there are no shares of preferred stock which are issued and outstanding.

 

All of the issued and outstanding shares of common stock of Byzen immediately prior to the Exchange are, and all Byzen Shares when issued in accordance with the terms hereof will be, duly authorized, validly issued, fully paid and non-assessable, will have been issued in compliance with all applicable U.S. federal and state securities laws and state corporate laws, and will have been issued free of preemptive rights of any security holder.

 

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Authorization, Validity and Enforceability of Agreements. Byzen has all corporate power and authority to execute and deliver this Agreement and all agreements, instruments and other documents to be executed and delivered in connection with the transactions contemplated by this Agreement (collectively the “Agreements”) to perform its obligations hereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery of the Agreements by Byzen and the consummation by Byzen of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate action of Byzen, and no other corporate proceedings on the part of Byzen are necessary to authorize the Agreements or to consummate the transactions contemplated hereby and thereby. The Agreements constitute the valid and legally binding obligation of Byzen and is enforceable in accordance with its terms, except as such enforcement may be limited by general equitable principles, or by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors rights generally. Byzen does not need to give any notice to, make any filings with, or obtain any authorization, consent or approval of any government or governmental agency or other party in order for it to consummate the transactions contemplated by any of the Agreements, resulting from the issuance of the Byzen Shares in connection with the Exchange.

 

No Conflict or Violation. Neither the execution and delivery of the Agreements by Byzen, nor the consummation by Byzen of the transactions contemplated thereby will: (i) contravene, conflict with, or violate any provision of the Byzen charter documents; (ii) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge or other restriction of any government, governmental agency, court, administrative panel or other tribunal to which Byzen is subject; (iii) conflict with, result in a breach of, constitute a default (or an event or condition which, with notice or lapse of time or both, would constitute a default) under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel, or require any notice under any agreement, contract, lease, license, instrument or other arrangement to which Byzen is a party or by which it is bound, or to which any of its assets or properties are subject; or (iv) result in or require the creation or imposition of any encumbrance of any nature upon or with respect to any of Byzen’s assets, including without limitation, the Byzen Shares.

 

Litigation. There is no action, suit, proceeding or investigation pending or, to the knowledge of Byzen, currently threatened against Byzen or any of its affiliates, that may affect the validity of this Agreement or the right of Byzen to enter into this Agreement or to consummate the transactions contemplated hereby or thereby. Neither Byzen nor any of its affiliates is a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality.

 

Financial Statements. Byzen’s financial statements for the fiscal year ended December 31, 2019 (the “Financial Statements”) as set forth on the Annual Report of Byzen filed on February 26, 2020 (the “Annual Report”) with the OTC Markets have been prepared in accordance with generally accepted accounting principles applicable in the United States of America (“U.S. GAAP”) applied on a consistent basis. The Financial Statements fairly present the financial condition and operating results of Byzen as of the date, and for the period, indicated therein.

 

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No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or anticipated by Byzen to arise, between Byzen and any accountants and/or lawyers formerly or presently engaged by Byzen. Byzen is current with respect to fees owed to its accountants and lawyers.

 

Absence of Undisclosed Liabilities. Except as specifically disclosed herein or in the Annual Report: (A) there has been no event, occurrence or development that has resulted in or could result in a Material Adverse Effect; (B) Byzen has not incurred any liabilities, obligations, claims or losses, contingent or otherwise, including debt obligations, other than incurred in the ordinary course of business; (C) Byzen has not declared or made any dividend or distribution of cash or property to its shareholders, purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, or issued any equity securities other than with respect to transactions contemplated hereby; (D) Byzen has not made any loan, advance or capital contribution to or investment in any person or entity; and (E) Byzen has not discharged or satisfied any lien or encumbrance or paid any obligation or liability (absolute or contingent), other than current liabilities paid in the ordinary course of business.

 


REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER

 

Shareholder represents, warrants and agrees that all of the statements in the following subsections of this Article III, pertaining to CSI, are true and complete as of the date hereof.

 

Organization. CSI is a company duly organized, validly existing, and in good standing under the laws of Delaware and has the corporate power and is duly authorized under all applicable laws, regulations, ordinances, and orders of public authorities to carry on its business in all material respects as it is now being conducted. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any provision of CSI’s Bylaws, or similar documents. CSI has taken all actions required by law, its Bylaws or otherwise to authorize the execution and delivery of this Agreement. CSI has full power, authority, and legal capacity and has taken all action required by law,, and otherwise to consummate the transactions herein contemplated.

 

Authorized Shares.. The CSI Shares are validly issued, fully paid, and non-assessable and not issued in violation of the preemptive or other rights of any person. The CSI Shares represent all of the outstanding capital stock of CSI and there are no outstanding rights on the part of any person to acquire any shares of the capital stock of CSI.

 

No Conflict With Other Instruments. The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or provision of, constitute a default under, or terminate, accelerate or modify the terms of any indenture, mortgage, deed of trust, or other material agreement, or instrument to which CSI is a party or to which any of its assets, properties or operations are subject

 

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REPRESENTATIONS AND WARRANTIES OF CSI SHAREHOLDER

 

The Shareholder hereby represents and warrants to Byzen:

 

Authority. The Shareholder has the right, power, authority and capacity to execute and deliver this Agreement to which the Shareholder is a party, to consummate the transactions contemplated by this Agreement, and to perform Shareholder’s obligations under this Agreement. This Agreement has been duly and validly authorized and approved, executed and delivered by Shareholder. Assuming this Agreement has been duly and validly authorized, executed and delivered by the parties thereto other than Shareholder, this Agreement is duly authorized, executed and delivered by Shareholder and constitutes the legal, valid and binding obligations of Shareholder, enforceable against Shareholder in accordance with their respective terms, except as such enforcement is limited by general equitable principles, or by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors rights generally.

 

No Conflict. Neither the execution or delivery by Shareholder of this Agreement nor the consummation or performance by Shareholder of the transactions contemplated hereby or thereby will, directly or indirectly, (a) contravene, conflict with, or result in a violation of any provision of the organizational documents of Shareholder ; (b) contravene, conflict with, constitute a default (or an event or condition which, with notice or lapse of time or both, would constitute a default) under, or result in the termination or acceleration of, any agreement or instrument to which Shareholder is a party or by which the properties or assets of Shareholder is bound; or (c) contravene, conflict with, or result in a violation of, any law or order to which any of Shareholder, or any of the properties or assets of Shareholder, may be subject.

 

Litigation. There is no pending Action against Shareholder that involves the CSI Shares or that challenges, or may have the effect of preventing, delaying or making illegal, or otherwise interfering with, any of the transactions contemplated by this Agreement or the business of CSI and, to the knowledge of Shareholder, no such Action has been threatened, and no event or circumstance exists that is reasonably likely to give rise to or serve as a basis for the commencement of any such Action.

 

Ownership of Shares. Shareholder is both the record and beneficial owner of the CSI Shares. Such Shareholder has and shall transfer at the Closing, good and marketable title to the CSI Shares, free and clear of all liens, claims, charges, encumbrances, pledges, mortgages, security interests, options, rights to acquire, proxies, voting trusts or similar agreements, restrictions on transfer or adverse claims of any nature whatsoever, excepting only restrictions on future transfers imposed by applicable law.

 


CONDITIONS TO OBLIGATIONS OF THE CSI SHAREHOLDER

 

The obligations of the Shareholder to consummate the transactions contemplated by this Agreement are subject to the fulfillment, at or before the Closing Date, of the following conditions, any one or more of which may be waived by the Shareholder, as in its sole discretion:

 

Representations and Warranties of Byzen. All representations and warranties made by Byzen in this Agreement shall be true and correct in all material respects on and as of the Closing Date.

 

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Agreements and Covenants. Byzen shall have performed and complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with on or prior to the Closing Date.

 

Consents and Approvals. All consents, waivers, authorizations and approvals of any governmental or regulatory authority, domestic or foreign, and of any other person, firm or corporation, required in connection with the execution, delivery and performance of this Agreement shall be in full force and effect on the Closing Date.

 

No Violation of Orders. No preliminary or permanent injunction or other order issued by any court or governmental or regulatory authority, domestic or foreign, nor any statute, rule, regulation, decree or executive order promulgated or enacted by any government or governmental or regulatory authority, which declares this Agreement invalid in any respect or prevents the consummation of the transactions contemplated hereby, or which materially and adversely affects the assets, properties, operations, prospects, net income or financial condition of Byzen shall be in effect; and no action or proceeding before any court or governmental or regulatory authority, domestic or foreign, shall have been instituted or threatened by any government or governmental or regulatory authority, domestic or foreign, or by any other person or entity, which seeks to prevent or delay the consummation of the transactions contemplated by this Agreement or which challenges the validity or enforceability of this Agreement.

 

Documents. Byzen must have caused the following documents to be delivered to CSI:

 

A share certificate evidencing the Byzen Shares registered in the name of the Shareholder; this Agreement duly executed;

 

such other documents as the Shareholder may reasonably request for the purpose of (A) evidencing the accuracy of any of the representations and warranties of Byzen, (B) evidencing the performance of, or compliance by Byzen with any covenant or obligation required to be performed or complied with by Byzen, (C) evidencing the satisfaction of any condition referred to in this Article V, or (D) otherwise facilitating the consummation or performance of any of the transactions contemplated by this Agreement.

 

An employment agreement between Byzen and Shareholder pursuant to which Shareholder will become the Chief Executive Officer of Byzen and CSI and a director of Byzen on terms and in form reasonably acceptable to the Parties.

 

No Material Adverse Effect. There shall not have been any event, occurrence or development that has resulted in or could result in a Material Adverse Effect on or with respect to Byzen.

 


CONDITIONS TO OBLIGATIONS OF Byzen

 

The obligations of Byzen to consummate the transactions contemplated by this Agreement are subject to the fulfillment, at or before the Closing Date, of the following conditions, any one or more of which may be waived by Byzen in its sole discretion:

 

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Representations and Warranties of the Shareholder All representations and warranties made by the Shareholder shall be true and correct on and as of the Closing Date.

 

Agreements and Covenants. The Shareholder shall have performed and complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with on or prior to the Closing Date.

 

Consents and Approvals. All consents, waivers, authorizations and approvals of any governmental or regulatory authority, domestic or foreign, and of any other person, firm or corporation, required in connection with the execution, delivery and performance of this Agreement, shall have been duly obtained and shall be in full force and effect on the Closing Date.

 

No Violation of Orders. No preliminary or permanent injunction or other order issued by any court or other governmental or regulatory authority, domestic or foreign, nor any statute, rule, regulation, decree or executive order promulgated or enacted by any government or governmental or regulatory authority, domestic or foreign, that declares this Agreement invalid or unenforceable in any respect or which prevents the consummation of the transactions contemplated hereby, or which materially and adversely affects the assets, properties, operations, prospects, net income or financial condition of CSI shall be in effect; and no action or proceeding before any court or government or regulatory authority, domestic or foreign, shall have been instituted or threatened by any government or governmental or regulatory authority, domestic or foreign, or by any other person or entity, which seeks to prevent or delay the consummation of the transactions contemplated by this Agreement or which challenges the validity or enforceability of this Agreement.

 

Documents. The Shareholder must deliver to Byzen at the Closing:

 

This Agreement to which the Shareholder is a party, duly executed;

 

such other documents as Byzen may reasonably request for the purpose of (A) evidencing the accuracy of any of the representations and warranties of the Shareholder, (B) evidencing the performance of, or compliance by the Shareholder with, any covenant or obligation required to be performed or complied with by the Shareholder, , (C) evidencing the satisfaction of any condition referred to in this Article VI, or (D) otherwise facilitating the consummation or performance of any of the transactions contemplated by this Agreement.

 


SURVIVAL AND INDEMNIFICATION

 

Survival of Provisions. The respective representations, warranties, covenants and agreements of each of the parties to this Agreement (except covenants and agreements which are expressly required to be performed and are performed in full on or before the Closing Date) shall expire on the first day of the three-year anniversary of the Closing Date (the “Survival Period”). The right to indemnification, payment of damages or other remedy based on such representations, warranties, covenants, and obligations will not be affected by any investigation conducted with respect to, or any knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant, or obligation. The waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, will not affect the right to indemnification, payment of damages, or other remedy based on such representations, warranties, covenants, and obligations.

 

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MISCELLANEOUS PROVISIONS

 

Successors and Assigns. This Agreement shall inure to the benefit of, and be binding upon, the parties hereto and their respective successors and assigns; provided that no party shall assign or delegate any of the obligations created under this Agreement without the prior written consent of the other parties.

 

Fees and Expenses. Except as otherwise expressly provided in this Agreement, all legal and other fees, costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by each Party, as incurred respectively.

 

Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been given or made if in writing and delivered personally or 7 days after being sent by registered or certified mail (postage prepaid, return receipt requested) to the parties at the following addresses:

If to the Shareholder, to:

 

Dan Bates

Clean-Seas, Inc. 

549 4th Street

Manhattan Beach, CA 90266

 

With a copy to (which copy shall not constitute notice):

 

David Ficksman, Esq. 

TroyGould PC

1801 Century Park East, Suite 1600 

Los Angeles, California 90067

 

If to Byzen, to:

 

Byzen Digital, Inc..

Attn: Christopher Percey 

123 W. NYE Lane, Suite 129

Carson City, NV 89706

 

With a copy to (which copy shall not constitute notice):

 

David Kagel, Esq 

1801 Century Park East, Suite 1201

Los Angeles, California 90067

 

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or to such other persons or at such other addresses as shall be furnished by any party by like notice to the others, and such notice or communication shall be deemed to have been given or made as of the date so delivered or mailed. No change in any of such addresses shall be effective insofar as notices under this Section 8.3 are concerned unless notice of such change shall have been given to such other party hereto as provided in this Section 8.3.

 

Entire Agreement. This Agreement, together with the exhibits hereto, represents the entire agreement and understanding of the parties with reference to the transactions set forth herein and no representations or warranties have been made in connection with this Agreement other than those expressly set forth herein or in the exhibits, certificates and other documents delivered in accordance herewith. This Agreement supersedes all prior negotiations, discussions, correspondence, communications, understandings and agreements between the parties relating to the subject matter of this Agreement and all prior drafts of this Agreement, all of which are merged into this Agreement. No prior drafts of this Agreement and no words or phrases from any such prior drafts shall be admissible into evidence in any action or suit involving this Agreement. For avoidance of doubt, no representation has been made by or on behalf of Byzen as to the tax effects of the transactions contemplated by this Agreement.

 

Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible so as to be valid and enforceable.

 

Titles and Headings. The Article and Section headings contained in this Agreement are solely for convenience of reference and shall not affect the meaning or interpretation of this Agreement or of any term or provision hereof.

 

Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall be considered one and the same agreement. Fax and PDF copies shall be considered originals for all purposes.

 

Convenience of Forum; Consent to Jurisdiction. The parties to this Agreement, acting for themselves and for their respective successors and assigns, without regard to domicile, citizenship or residence, hereby expressly and irrevocably elect as the sole judicial forum for the adjudication of any matters arising under or in connection with this Agreement, and consent and subject themselves to the jurisdiction of, the courts of the State of Colorado, and/or the U.S. District Court for Colorado, in respect of any matter arising under this Agreement. Service of process, notices and demands of such courts may be made upon any party to this Agreement by personal service at any place where it may be found or giving notice to such party as provided in Section 8.3.

 

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Enforcement of the Agreement. The parties hereto agree that irreparable damage would occur if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereto, this being in addition to any other remedy to which they are entitled at law or in equity.

 

Governing Law. This Agreement shall be governed by and interpreted and enforced in accordance with the laws of the State of Colorado without giving effect to the choice of law provisions thereof.

 

Amendments and Waivers. Except as otherwise provided herein, no amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by all of the parties hereto. No waiver by any party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any such prior or subsequent occurrence

 

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[SIGNATURE PAGE TO SHARE EXCHANGE AGREEMENT]

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

 

SHAREHOLDER  
     
Name: Dan Bates  
     
BYZEN DIGITAL, INC. (“Byzen”)  
     
By    
Name: Christopher Percey  
Title: President  
     
CLEAN-SEAS, INC. (“CSI”)  
     
By    
Name: Dan Bates  
Title: President  

 

11

 

 

 

 

EXHIBIT 6.2

EXCHANGE AGREEMENT

 

This Exchange Agreement, dated as of September____, 2020 (this “Agreement”) by and among Byzen Digital, Inc., a Nevada corporation (“Byzen”), and 100BIO, LLC, a California limited liability company (“100BIO”) . For purposes of this Agreement, Byzen, and 100BIO are sometimes collectively referred to as the “Parties” and individually as a “Party.”

 

WHEREAS, 100BIO desires to exchange newly issued membership units of 100BIO (the 100BIO Units”)representing a 51% interest in 100BIO for Two Million (2,000,000) shares of the Series A Redeemable Preferred Stock (the “Preferred Stock”) of Byzen (the “Byzen Shares”); and (ii) Byzen desires to acquire the 100BIO Units in exchange for the Byzen Shares, all upon the terms and subject to the conditions set forth in this Agreement (the “Exchange”); and

 

WHEREAS, it is the intention of the parties that upon the Closing (as hereinafter defined) 100BIO shall become a 51% owned subsidiary of Byzen.

 

NOW, THEREFORE, in consideration of the mutual terms, conditions and other agreements set forth herein, the parties hereto agree as follows:

 


EXCHANGE OF 100BIO UNITS FOR BYZEN SHARES

 

Agreement to Exchange 100BIO Units for Byzen Shares. On the Closing Date (as hereinafter defined) and upon the terms and subject to the conditions set forth in this Agreement, 100BIO shall issue and deliver the 100BIO Units to Byzen and, in consideration and exchange for the 100BIO Units, Byzen shall issue and deliver the Byzen Shares to 100BIO

 

Closing and Actions at Closing. The closing of the Exchange (the “Closing”) shall take place remotely via the exchange of documents and signatures at such time and date as the Parties hereto shall agree orally or in writing (the “Closing Date”).

 

Restrictions on Byzen Shares and the 100BIO Units. The Byzen Shares and the 100BIO Units have not been registered and are being issued pursuant to a specific exemption under the Securities Act, as well as under certain state securities laws for transactions by an issuer not involving any public offering or in reliance on limited federal preemption from such state securities registration laws, based on the suitability and investment representations made by the Parties The Byzen Shares and the 100BIO Units must be held and may not be sold, transferred, or otherwise disposed of for value unless such securities are subsequently registered under the Securities Act or an exemption from such registration is available, and that the certificates representing the Byzen Shares and the 100BIO Units (if any any) will bear a legend in substantially the following form so restricting the sale of such securities:

 

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The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and are “restricted securities” within the meaning of Rule 144 promulgated under the Securities Act. The securities have been acquired for investment and may not be sold or transferred without complying with Rule 144 in the absence of an effective registration or other compliance under the Securities Act.

 


REPRESENTATIONS AND WARRANTIES OF BYZEN

 

Byzen represents, warrants and agrees that all statements in the following subsections of this Article II are true and complete as of the date hereof.

 

Corporate Organization.

 

Byzen is a corporation duly organized, validly existing and in good standing under the laws of Nevada, and has all requisite corporate power and authority to own its properties and assets and governmental licenses, authorizations, consents and approvals to conduct its business as now conducted and is duly qualified to do business and is in good standing in each jurisdiction in which the nature of its activities makes such qualification and being in good standing necessary, except where the failure to be so qualified and in good standing will not have a Material Adverse Effect on the activities, business, operations, properties, assets, condition or results of operation of Byzen. “Material Adverse Effect” means, when used with respect to a Party, any event, occurrence, fact, condition, change or effect, which, individually or in the aggregate, would reasonably be expected to be materially adverse to the business, operations, properties, assets, condition (financial or otherwise), or operating results of such Part or materially impair the ability of such Party to perform its obligations under this Agreement, excluding any change, effect or circumstance resulting from (i) the announcement, pendency or consummation of the transactions contemplated by this Agreement; or (ii) changes in the U.S. securities markets generally.

 

Copies of the Articles of Incorporation and Bylaws of Byzen with all amendments thereto, as of the date hereof (the “Byzen Charter Documents”), have been, or will be upon request, furnished to 100BIO and such copies are accurate and complete as of the date hereof.

 

Capitalization of Byzen.

 

The authorized capital stock of Byzen consists of: (i) 190,000,000 shares of common stock, par value $0.001, of which 103,408,516 shares of common stock are issued and outstanding; and (ii) 10,000,000 shares of preferred stock, par value $0.001, of which there are no shares of preferred stock which are issued and outstanding.

 

2
 

 

All of the issued and outstanding shares of common stock of Byzen immediately prior to the Exchange are, and the Byzen Shares when issued in accordance with the terms hereof will be, duly authorized, validly issued, fully paid and non-assessable, will have been issued in compliance with all applicable U.S. federal and state securities laws and state corporate laws, and will have been issued free of preemptive rights of any security holder.

 

Authorization,,Validity and Enforceability of Agreements. Byzen has all corporate power and authority to execute and deliver this Agreement and all agreements, instruments and other documents to be executed and delivered in connection with the transactions contemplated by this Agreement (collectively the “Agreements”) to perform its obligations hereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery of the Agreements by Byzen and the consummation by Byzen of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate action of Byzen, and no other corporate proceedings on the part of Byzen are necessary to authorize the Agreements or to consummate the transactions contemplated hereby and thereby. The Agreements constitute the valid and legally binding obligation of Byzen and is enforceable in accordance with its terms, except as such enforcement may be limited by general equitable principles, or by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors rights generally. Byzen does not need to give any notice to, make any filings with, or obtain any authorization, consent or approval of any government or governmental agency or other party in order for it to consummate the transactions contemplated by any of the Agreements, resulting from the issuance of the Byzen Shares in connection with the Exchange.

 

No Conflict or Violation. Neither the execution and delivery of the Agreements by Byzen, nor the consummation by Byzen of the transactions contemplated thereby will: (i) contravene, conflict with, or violate any provision of the Byzen charter documents; (ii) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge or other restriction of any government, governmental agency, court, administrative panel or other tribunal to which Byzen is subject; (iii) conflict with, result in a breach of, constitute a default (or an event or condition which, with notice or lapse of time or both, would constitute a default) under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel, or require any notice under any agreement, contract, lease, license, instrument or other arrangement to which Byzen is a party or by which it is bound, or to which any of its assets or properties are subject; or (iv) result in or require the creation or imposition of any encumbrance of any nature upon or with respect to any of Byzen’s assets, including without limitation, the Byzen Shares.

 

Litigation. There is no action, suit, proceeding or investigation pending or, to the knowledge of Byzen, currently threatened against Byzen or any of its affiliates, that may affect the validity of this Agreement or the right of Byzen to enter into this Agreement or to consummate the transactions contemplated hereby or thereby. Neither Byzen nor any of its affiliates is a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality.

 

Financial Statements. Byzen’s financial statements for the fiscal year ended December 31, 2019 (the “Financial Statements”) as set forth on the Annual Report of Byzen filed on February 26, 2020 (the “Annual Report”) with the OTC Markets have been prepared in accordance with generally accepted accounting principles applicable in the United States of America (“U.S. GAAP”) applied on a consistent basis. The Financial Statements fairly present the financial condition and operating results of Byzen as of the date, and for the period, indicated therein.

 

No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or anticipated by Byzen to arise, between Byzen and any accountants and/or lawyers formerly or presently engaged by Byzen. Byzen is current with respect to fees owed to its accountants and lawyers.

 

3
 

 

Absence of Undisclosed Liabilities. Except as specifically disclosed herein or in the Annual Report: (A) there has been no event, occurrence or development that has resulted in or could result in a Material Adverse Effect; (B) Byzen has not incurred any liabilities, obligations, claims or losses, contingent or otherwise, including debt obligations, other than incurred in the ordinary course of business; (C) Byzen has not declared or made any dividend or distribution of cash or property to its shareholders, purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, or issued any equity securities other than with respect to transactions contemplated hereby; (D) Byzen has not made any loan, advance or capital contribution to or investment in any person or entity; and (E) Byzen has not discharged or satisfied any lien or encumbrance or paid any obligation or liability (absolute or contingent), other than current liabilities paid in the ordinary course of business.

 


REPRESENTATIONS AND WARRANTIES OF 100BIO

 

100BIO represents, warrants and agrees that all of the statements in the following subsections of this Article III, pertaining to 100BIO, are true and complete as of the date hereof.

 

Organization. 100BIO is a limited liability company duly organized, validly existing, and in good standing under the laws of California and has the power and is duly authorized under all applicable laws, regulations, ordinances, and orders of public authorities to carry on its business in all material respects as it is now being conducted. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any provision of 100BIO’s Amended and Restated Operating Agreement (the “Operating Agreement”) or similar documents. 100BIO has taken all actions required by law, the Operating Agreement or otherwise to authorize the execution and delivery of this Agreement. 100BIO has full power, authority, and legal capacity and has taken all action required by law, and otherwise to consummate the transactions herein contemplated.

 

Authorized Units. The 100BIO Units, when issued, will be validly issued, fully paid, and non-assessable and not issued in violation of the preemptive or other rights of any person. The 100BIO Units will represent 51% of the outstanding capital of 100BIO after giving effect to the issuance of the 100BIO Units and there are no outstanding rights on the part of any person to acquire any membership units or other capital interests in 100BIO ..

 

No Conflict With Other Instruments. The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or provision of, constitute a default under, or terminate, accelerate or modify the terms of any indenture, mortgage, deed of trust, or other material agreement, or instrument to which 100BIO is a party or to which any of its assets, properties or operations are subject.

 

Enforceability of Agreements. The Agreements constitute the valid and legally binding obligation of 100BIO and is enforceable in accordance with its terms, except as such enforcement may be limited by general equitable principles, or by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors rights generally. 100BIO does not need to give any notice to, make any filings with, or obtain any authorization, consent or approval of any government or governmental agency or other party in order for it to consummate the transactions contemplated by any of the Agreements, resulting from the issuance of the 100BIO Shares in connection with the Exchange.

 

4
 

 

No Conflict or Violation. Neither the execution and delivery of the Agreements by 100BIO, nor the consummation by 100BIO of the transactions contemplated thereby will: (i) contravene, conflict with, or violate any provision of the 100BIO charter documents; (ii) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge or other restriction of any government, governmental agency, court, administrative panel or other tribunal to which 100BIO is subject; or (iii) result in or require the creation or imposition of any encumbrance of any nature upon or with respect to any of 100BIO’s assets, including without limitation, the 100BIO Shares.

 

Litigation. There is no action, suit, proceeding or investigation pending or, to the knowledge of 100BIO, currently threatened against 100BIO or any of its affiliates, that may affect the validity of this Agreement or the right of 100BIO to enter into this Agreement or to consummate the transactions contemplated hereby or thereby. Neither 100BIO nor any of its affiliates is a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality.

 

Absence of Undisclosed Liabilities. Except as specifically disclosed in writing to Byzen: (A) there has been no event, occurrence or development that has resulted in or could result in a Material Adverse Effect to 100BIO; (B) 100BIO has not incurred any liabilities, obligations, claims or losses, contingent or otherwise, including debt obligations, other than incurred in the ordinary course of business; (C) 100BIO has not declared or made any dividend or distribution of cash or property to its members purchased, redeemed or made any agreements to purchase or redeem any shares of its capital..

 


CONDITIONS TO OBLIGATIONS OF 100BIO

 

The obligations of the 100BIO to consummate the transactions contemplated by this Agreement are subject to the fulfillment, at or before the Closing Date, of the following conditions, any one or more of which may be waived by the Shareholder, as in its sole discretion:

 

Representations and Warranties of Byzen. All representations and warranties made by Byzen in this Agreement shall be true and correct in all material respects on and as of the Closing Date.

 

Agreements and Covenants. Byzen shall have performed and complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with on or prior to the Closing Date.

 

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Consents and Approvals. All consents, waivers, authorizations and approvals of any governmental or regulatory authority, domestic or foreign, and of any other person, firm or corporation, required in connection with the execution, delivery and performance of this Agreement shall be in full force and effect on the Closing Date.

 

No Violation of Orders. No preliminary or permanent injunction or other order issued by any court or governmental or regulatory authority, domestic or foreign, nor any statute, rule, regulation, decree or executive order promulgated or enacted by any government or governmental or regulatory authority, which declares this Agreement invalid in any respect or prevents the consummation of the transactions contemplated hereby, or which materially and adversely affects the assets, properties, operations, prospects, net income or financial condition of Byzen shall be in effect; and no action or proceeding before any court or governmental or regulatory authority, domestic or foreign, shall have been instituted or threatened by any government or governmental or regulatory authority, domestic or foreign, or by any other person or entity, which seeks to prevent or delay the consummation of the transactions contemplated by this Agreement or which challenges the validity or enforceability of this Agreement.

 

Documents. Byzen must have caused the following documents to be delivered to 100BIO

 

A share certificate evidencing the Byzen Shares registered in the name of the Shareholder; this Agreement duly executed;

 

such other documents as the Shareholder may reasonably request for the purpose of (A) evidencing the accuracy of any of the representations and warranties of Byzen, (B) evidencing the performance of, or compliance by Byzen with any covenant or obligation required to be performed or complied with by Byzen, (C) evidencing the satisfaction of any condition referred to in this Article V, or (D) otherwise facilitating the consummation or performance of any of the transactions contemplated by this Agreement.

 

An Employment Agreement between Byzen and Jean So (the “So Employment Agreement”) pursuant to which Jean So will become ______ of BYZEN and 100BIO on terms and in form acceptable to the Parties.

 

The filing of a Certificate of Determination with respect to the Series A Redeemable Preferred Stock containing such rights, preferences and other terms reasonably acceptable to 100BIO

 

No Material Adverse Effect. There shall not have been any event, occurrence or development that has resulted in or could result in a Material Adverse Effect on or with respect to Byzen.

 


CONDITIONS TO OBLIGATIONS OF BYZEN

 

The obligations of Byzen to consummate the transactions contemplated by this Agreement are subject to the fulfillment, at or before the Closing Date, of the following conditions, any one or more of which may be waived by Byzen in its sole discretion:

 

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Representations and Warranties of 100BIO All representations and warranties made by 100BIO shall be true and correct on and as of the Closing Date.

 

Agreements and Covenants. 100BIO shall have performed and complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with on or prior to the Closing Date.

 

Consents and Approvals. All consents, waivers, authorizations and approvals of any governmental or regulatory authority, domestic or foreign, and of any other person, firm or corporation, required in connection with the execution, delivery and performance of this Agreement, shall have been duly obtained and shall be in full force and effect on the Closing Date.

 

No Violation of Orders. No preliminary or permanent injunction or other order issued by any court or other governmental or regulatory authority, domestic or foreign, nor any statute, rule, regulation, decree or executive order promulgated or enacted by any government or governmental or regulatory authority, domestic or foreign, that declares this Agreement invalid or unenforceable in any respect or which prevents the consummation of the transactions contemplated hereby, or which materially and adversely affects the assets, properties, operations, prospects, net income or financial condition of 100BIO shall be in effect; and no action or proceeding before any court or government or regulatory authority, domestic or foreign, shall have been instituted or threatened by any government or governmental or regulatory authority, domestic or foreign, or by any other person or entity, which seeks to prevent or delay the consummation of the transactions contemplated by this Agreement or which challenges the validity or enforceability of this Agreement.

 

Documents. 100BIO must deliver to Byzen at the Closing:

 

This Agreement to which 100BIO is a party, duly executed;

 

such other documents as Byzen may reasonably request for the purpose of (A) evidencing the accuracy of any of the representations and warranties of 100BIO, (B) evidencing the performance of, or compliance by 100BIO with, any covenant or obligation required to be performed or complied with by 100BIO, , (C) evidencing the satisfaction of any condition referred to in this Article VI, or (D) otherwise facilitating the consummation or performance of any of the transactions contemplated by this Agreement.

 

So Employment Agreement. The So Employment Agreement shall be executed by the Parties thereto and a copy delivered to Byzen.

 

Amendment to Operating Agreement. The Operating Agreement shall have been amended to increase the number of managers to [5] of which [3] shall be designated by Byzen and [2] shall be designated by So.

 

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No Liabilities. 100BIO will have no material liabilities except as disclosed and acceptable by Byzen.

 

No Material Adverse Change. There will not have been any material adverse change in the financial condition, operations, busines prospects, employee relations, customer relations, assets, liabilities or income of 100BIO.

 


SURVIVAL AND INDEMNIFICATION

 

Survival of Provisions. The respective representations, warranties, covenants and agreements of each of the parties to this Agreement (except covenants and agreements which are expressly required to be performed and are performed in full on or before the Closing Date) shall expire on the first day of the three-year anniversary of the Closing Date (the “Survival Period”). The right to indemnification, payment of damages or other remedy based on such representations, warranties, covenants, and obligations will not be affected by any investigation conducted with respect to, or any knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant, or obligation. The waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, will not affect the right to indemnification, payment of damages, or other remedy based on such representations, warranties, covenants, and obligations.

 


POST-CLOSING MATTERS

 

Audit of 100BIO Financials. As soon as practicable after the Closing, ,at its cost, Byzen shall arrange for (a) the audit of the financial statements of 100BIO for the fiscal years required in connection with the Regulation A offering to be conducted by Byzen (the “Offering”) and (b) a review by the auditors of any stub period financial statements (the “Financial Statements”).

 

The Offering. As soon as practicable after completion of the Financial Statements, Byzen shall prepare and file with the Securities and Exchange Commission an offering circular on Form 1-A for the Offering of up to $5,000,000 of its securities. Byzen shall use a portion of the net proceeds from the Offering to redeem shares of the Preferred Stock as provided in the Certificate of Determination with respect thereto.

 

Redemption Proceeds. All of the proceeds from the redemption of the Preferred Stock shall be used to execute the business plan and finance the operations of 100BIO and capital equipment expenditures as determined from time to time by the managers of 100BIO. This provision shall survive any transfer of the Byzen Shares.

 


MISCELLANEOUS PROVISIONS

 

Successors and Assigns. This Agreement shall inure to the benefit of, and be binding upon, the parties hereto and their respective successors and assigns; provided that no party shall assign or delegate any of the obligations created under this Agreement without the prior written consent of the other parties.

 

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Fees and Expenses. Except as otherwise expressly provided in this Agreement, all legal and other fees, costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by each Party, as incurred respectively.

 

Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been given or made if in writing and delivered personally or 7 days after being sent by registered or certified mail (postage prepaid, return receipt requested) to the parties at the following addresses:

 

If to 100BIO, to:

Jean So

 

With a copy to (which copy shall not constitute notice)

 

If to Byzen, to:

 

Byzen Digital, Inc. 

549 4th Street

Manhattan Beach, CAS 90266. 

Attn Dan Bates

 

With a copy to (which copy shall not constitute notice):

 

David Ficksman, Esq

1801 Century Park East, Suite 1600 

Los Angeles, California 90067

 

or to such other persons or at such other addresses as shall be furnished by any party by like notice to the others, and such notice or communication shall be deemed to have been given or made as of the date so delivered or mailed. No change in any of such addresses shall be effective insofar as notices under this Section 8.3 are concerned unless notice of such change shall have been given to such other party hereto as provided in this Section 8.3.

 

Entire Agreement. This Agreement, together with the exhibits hereto, represents the entire agreement and understanding of the parties with reference to the transactions set forth herein and no representations or warranties have been made in connection with this Agreement other than those expressly set forth herein or in the exhibits, certificates and other documents delivered in accordance herewith. This Agreement supersedes all prior negotiations, discussions, correspondence, communications, understandings and agreements between the parties relating to the subject matter of this Agreement and all prior drafts of this Agreement, all of which are merged into this Agreement. No prior drafts of this Agreement and no words or phrases from any such prior drafts shall be admissible into evidence in any action or suit involving this Agreement. For avoidance of doubt, no representation has been made by or on behalf of Byzen as to the tax effects of the transactions contemplated by this Agreement.

 

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Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible so as to be valid and enforceable.

 

Titles and Headings. The Article and Section headings contained in this Agreement are solely for convenience of reference and shall not affect the meaning or interpretation of this Agreement or of any term or provision hereof.

 

Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall be considered one and the same agreement. Fax and PDF copies shall be considered originals for all purposes.

 

Convenience of Forum; Consent to Jurisdiction. The parties to this Agreement, acting for themselves and for their respective successors and assigns, without regard to domicile, citizenship or residence, hereby expressly and irrevocably elect as the sole judicial forum for the adjudication of any matters arising under or in connection with this Agreement, and consent and subject themselves to the jurisdiction of, the courts of the State of California, and/or the U.S. District Court for the Central District of California, in respect of any matter arising under this Agreement. Service of process, notices and demands of such courts may be made upon any party to this Agreement by personal service at any place where it may be found or giving notice to such party as provided in Section 8.3.

 

Enforcement of the Agreement. The parties hereto agree that irreparable damage would occur if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereto, this being in addition to any other remedy to which they are entitled at law or in equity.

 

Governing Law. This Agreement shall be governed by and interpreted and enforced in accordance with the laws of the State of California without giving effect to the choice of law provisions thereof.

 

Amendments and Waivers. Except as otherwise provided herein, no amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by all of the parties hereto. No waiver by any party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any such prior or subsequent occurrence.

 

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[SIGNATURE PAGE TO SHARE EXCHANGE AGREEMENT]

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

 

100BIO. LLC  
   
By    
Name: Jean So  
     
BYZEN DIGITAL, INC. (Byzen)  
     
By    
Name: Dan Bates  
Title: President  
     
)    
By    

  

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EXHIBIT 6.3

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of the 27th day of May, 2020 (the “Effective Date”), by and between Byzen Digital, Inc., a Nevada corporation (“Byzen” or “Company”), and Dan Bates (hereinafter, “Executive,” and collectively with the Company, the “Parties”).

 

W I T N E S S E T H:

 

WHEREAS, the Company desires to employ Executive, and Executive desires to enter into such employment with the Company under the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties hereto agree as follows:


EMPLOYMENT; TERM; DUTIES

 

Employment. Pursuant to the terms and conditions hereinafter set forth, the Company hereby employs Executive as Chief Executive Officer and President of the Company.

 

Term. . Executive’s Term of employment with Company shall be three (3) years from the date of execution of this agreement. Company shall not terminate Executive’s employment for any reason other than those stated in paragraph 3.1 herein, which reasons shall constitute cause. Any failure of Company to comply with the express terms of this agreement shall constitute a material breach and shall entitled Executive to all remedies provided in law or equity. The Term provided for herein shall not be amended except by a writing executed both by Company and by Executive. Notwithstanding anything herein to the contrary, until the Company has obtained $2,000,000 in gross proceeds from a financing or series of financings this Agreement may be terminated by either Party on thirty (30) days’ notice.

 

Duties and Responsibilities. Executive shall perform such administrative, managerial and executive duties for the Company (and its subsidiaries if and when directed by the Board of Directors of the Company (the “Board”)) as are prescribed by applicable job specifications for the CEO and the Bylaws of the Company, such tasks and responsibilities as are customarily vested in and incidental to such positions, and such other duties, consistent with the Company’s Bylaws, as may be assigned to him from time to time in writing, by the Board. Without limiting the generality of the foregoing, Executive’s responsibilities will include guiding the Company through a Regulation A financing, writing the Company’s business plan, developing and implementing the Company’s marketing strategy, creation of marketing materials including website and Company videos, and business development including strategic transactions and acquisitions. Additionally, Executive shall, with the approval of the Company’s Board of Directors (the “Board”), access outside consultants.

 

Exclusive Employment. Executive shall devote all of Executive’s business time, attention, skill, and best efforts to the performance of Executive’s duties under this Agreement and shall not engage in any other business, board membership or occupation without the prior written consent of the Board (which shall not be unreasonably withheld), including, without limitation, any activity that (x) conflicts with the interests of the Company, (y) interferes with the proper and efficient performance of Executive’s duties for the Company, or (z) interferes with Executive’s exercise of judgment in the Company’s best interests. Notwithstanding the foregoing, nothing in this Agreement shall prevent Executive from engaging in activities for Executive’s personal investments, residing on boards of other companies, religious, charitable, community or non-for-profit activities that do not conflict or interfere with his ability to fulfill his duties and responsibilities to the Company

 

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Board of Directors. The Board shall nominate Executive to be elected to serve on the Board at each meeting of the Company’s shareholders held to elect directors, consistent with the provisions of Bylaws and Articles of Incorporation of the Company, as amended and in effect from time to time. Executive understands and agrees that his nomination and continued position as a member of the Company’s Board is expressly conditioned on his continued employment or ownership of more than 10% of the outstanding shares of Company Should Executive’s employment as CEO of the Company terminate, and, Executive’s ownership of outstanding shares of Company fall below 10%, Executive will be deemed to have resigned his position as a member of the Company’s Board of Directors and Executive will voluntarily take all steps necessary to effectuate his resignation from the Company’s Board.

 

Indemnification and Insurance. The Company agrees to indemnify the Executive for his role as President, CEO and Board Member to the fullest extent permitted under Nevada law. The Company will also obtain and maintain directors’ and officers’ liability insurance covering the Executive for services rendered to the Company (and its subsidiaries if and when directed by the Board) while Executive is a director or officer of the Company.

 

Covenants of Executive

 

Best Efforts. Executive shall report directly to the Board and shall devote his best efforts to the business and affairs of the Company (and its subsidiaries if and when directed by the Board). Executive shall perform his duties, responsibilities and functions to the Company hereunder to the best of his abilities in a diligent, trustworthy, professional and efficient manner and shall comply, in all material respects, with all rules, regulations of the Company (and special instructions of the Board, if any) and all other rules, regulations, guides, handbooks, procedures and policies applicable to the Company and its business in connection with his duties hereunder.

 

Records. Executive shall use his best efforts and skills to truthfully, accurately, and promptly prepare, maintain, and preserve all records and reports that the Company may, from time to time, request or require, fully account for all money, records, equipment, materials, or other property belonging to the Company of which he may have custody, and promptly pay and deliver the same whenever he may be directed to do so, in writing, by the Board.

 

Compliance. Executive shall use his best efforts to maintain the Company’s compliance with all SEC rules, regulations and reporting requirements for publicly traded companies, including, without limitation, overseeing, and preparing and filing with the SEC all periodic reports the Company is required to file under the Act and the Exchange Act of 1934 (as amended, the “Exchange Act”). Executive shall at all times comply, and cause the Company to comply, with the then-current good corporate governance standards and practices as prescribed by the SEC, or as otherwise recommended by SEC counsel, any exchange on which the Company’s capital stock or other securities may be traded and any other applicable governmental entity, agency or organization.

 

Code of Conduct. For such period as when Executive is employed hereunder, Executive shall at all times conduct himself with the highest ethical standards, and shall at all times adhere to any Code of Conduct that the Company may establish from time to time.

 

Opportunities. The Executive shall make available to the Company and present to the Board all business opportunities of which he becomes aware, which are relevant to the business of the Company (and its subsidiaries), and to no other person or entity or to himself individually.

 

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COMPENSATION AND OTHER BENEFITS

 

Base Salary. For the duration of the Term, for all services rendered by Executive hereunder and all covenants and conditions undertaken by the Parties pursuant to this Agreement, the Company shall pay, and Executive shall accept, as compensation, a monthly base salary (“Base Salary”) of $20,000, provided that $7,500 per month of the Base Salary shall be deferred until the Company raises a minimum of $250,000 in a financing. The Base Salary shall be payable in regular installments in accordance with the normal payroll practices of the Company, in effect from time to time, but in any event no less frequently than on a monthly basis.

 

Revenue Bonus. Executive shall receive at the end of each quarterly period (prorated for a partial quarter) 10% of the Company’s consolidated gross revenue for such quarter (the “Revenue Bonus”). The Revenue Bonus shall be paid within five (5) business days from the completion of the Company’s financial statements for the applicable quarter. The Revenue Bonus shall be paid in cash or the Company’s Common Stock as determined by the Board taking into account the working capital requirements of Company. If paid in stock, the shares shall be valued based on the average of the closing prices for the last five trading days for the applicable quarter.

 

Business Expenses. The Company shall reimburse Executive for all reasonable, out-of-pocket business expenses incurred in the performance of his duties hereunder consistent with the Company’s policies and procedures, in effect from time to time, with respect to travel, entertainment and other business expenses customarily reimbursed to senior executives of the Company in connection with the performance of their duties on behalf of the Company. Such reimbursement shall be made by Company to Executive no later than fifteen (15) days after submission of written expense reports by Executive to Company.

 

Other Benefits. During Executive’s employment with the Company, Executive shall be entitled to the following benefits:

 

Executive shall be entitled to participate in the Company’s employee stock option plan, life, health, accident, disability insurance plans, pension plans and retirement plans, in effect from time to time, to the extent and on such terms and conditions as the Company customarily makes such plans available to its senior executives.

 

Vacation. Executive shall be entitled to three (3) weeks vacation time each calendar year with full pay. Any unused vacation leave as of December 31st of the calendar year will be either be paid in cash compensation at the same rate as the Executives base salary or the unused vacation time can be rolled forward to the following year(s), at the Executives option. If taken as cash compensation, such payment shall be made to Executive by January 15th of the following calendar year.

 

Withholding. The Company may deduct from any compensation payable to Executive (including payments made pursuant to this Article II or in connection with the termination of employment pursuant to Article III of this Agreement) amounts sufficient to cover Executive’s share of applicable federal, state and/or local income tax withholding, social security payments, state disability and other insurance premiums and payments.

 

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TERMINATION OF EMPLOYMENT

 

Termination of Employment

 

Subject to Section 2.1, Executive’s employment purs