UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): March 31, 2015
VALMIE
RESOURCES, INC.
(Exact name of registrant as specified in its charter)
Nevada |
|
333-180424 |
|
45-3124748 |
(State
or other jurisdiction of
incorporation) |
|
(Commission
File Number) |
|
(I.R.S.
Employer
Identification No.) |
1001
S Dairy Ashford Road, Suite 100
Houston,
TX 77077
(Address
of principal executive offices)(Zip Code)
(713)
595-6675
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last
report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))
FORWARD-LOOKING
STATEMENTS
This
current report on Form 8-K (this “Report”) contains forward-looking statements. All statements other than statements
of historical fact are “forward-looking statements”, including any projections of earnings, revenues or other financial
items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed
new products, services or developments; any statements regarding future economic conditions or performance; statements of belief;
and any statement of assumptions underlying any of the foregoing. Such forward-looking statements are subject to inherent risks
and uncertainties, and actual results could differ materially from those anticipated by any forward-looking statements.
These
forward-looking statements involve significant risks and uncertainties, including, but not limited to, the following: competition,
promotional costs, and risk of declining revenues. Our actual results could differ materially from those anticipated in such forward-looking
statements as a result of a number of factors. These forward-looking statements are made as of the date of this Report, and we
assume no obligation to update such forward-looking statements.
Except
as otherwise indicated by the context, references in this Report to “we”, “us” and “our” mean
Valmie Resources, Inc. and all dollar amounts refer to U.S. dollars, unless otherwise indicated.
Item
1.01 Entry into a Material Definitive Agreement
On
January 27, 2015, we entered into an agreement for the exchange of securities (the “Share Exchange Agreement”) with
Vertitek Inc. (“Vertitek”), a Wyoming corporation, and the sole shareholder of Vertitek, Masamos Services Ltd. (“Masamos”),
a Cypriot corporation. On March 31, 2015 (the “Closing Date”), the closing of the Share Exchange Agreement occurred
and we issued 1,000,000 shares of our common stock to Masamos in exchange for 100% of the issued and outstanding shares of Vertitek
(the “Acquisition”). As a result of the Acquisition, Vertitek became our wholly owned subsidiary.
Item
2.01 Completion of Acquisition or Disposition of Assets
The
disclosure in Item 1.01 regarding the Acquisition is incorporated herein by reference in its entirety.
FORM
10 DISCLOSURE
As
disclosed elsewhere in this Report, on March 31, 2015 we issued 1,000,000 shares of our common stock to Masamos pursuant to the
Share Exchange Agreement, thereby completing the Acquisition. Prior to the completion of the Acquisition, we were a “shell
company” (as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) since we were not generating revenues, did not own an operating business and
did not have any assets other than cash and cash equivalents. Since we were a shell company, and in accordance with the
requirements of Item 2.01(f) of Form 8-K, this Report sets forth information that would be required if we were required to file
a general form for registration of securities on Form 10 under the Exchange Act with respect to our common stock (which is the
only class of our securities subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act).
BUSINESS
Overview
We
were incorporated pursuant to the laws of the State of Nevada on August 26, 2011. From our inception until the quarter ended August
31, 2014, we were a mineral exploration company exploring for precious metals, or gold and silver targets. Our property, known
as the Carico Lake Valley Property (the “Property”), was located in Lander County, Nevada.
In
July 2014, we were notified by the landowner that our option to acquire an interest in the Property had been terminated and that
the Property had been sold to a third party. Our efforts from that date until the end of our most recently completed fiscal year
were primarily directed to identifying new development properties.
In
early December 2014, our majority shareholder, Fen Holdings & Investments Limited (“Fen”), a company incorporated
in the British Virgin Islands, determined it was in the best interests of our shareholders to change our business focus from mining
to pursuing opportunities for the commercialization of leading edge products and services in the rapidly expanding technology
industry. We therefore sought to develop or acquire concepts with valid business models positioned to make a significant impact
within the four key technology “megasectors”: software, hardware, networking and semiconductors.
Business
Strategy
The
first major step in our shift to the technology sector was the appointment of Gerald B. Hammack as our sole officer and director
on December 8, 2014. Mr. Hammack has more than 30 years of experience in a variety of technology-related fields, including programming,
digital telephony and database management, as well as substantial expertise in the setup and management of complex data processing
systems.
Over
the past several years, Mr. Hammack has been developing a series of software platforms and technologies designed to provide the
near real-time data processing required by the ever-expanding use of commercial Unmanned Aerial Vehicles or UAV’s (more
commonly referred to as drones). Towards the end of 2014, we rebranded Mr. Hammack’s development efforts to date as the
AIMD (Automated Intelligence for Mobile Devices) data processing platform and adopted them as our own. As of the date of this
Report we have not yet entered into a formal agreement with Mr. Hammack regarding the assignment of this property to us; however,
we expect to enter into such an agreement in the near future to formalize this arrangement.
While
in the process of launching the AIMD platform we determined that it would be necessary to find a partner that had the technology
and experience in the design and manufacture of UAV’s in order to design and build a prototype unit to test and refine our
product and service offerings. After extensive investigation we located an up-and-coming UAV manufacturer, Vertitek. Vertitek’s
hardware and software technology enables a sophisticated level of autonomy for UAV’s and other autonomous mobilized devices,
including precision guidance controls and advanced safety features. Vertitek’s under development commercial V-1 DroneSM
is a multi-rotor UAV that incorporates an integrated, fully autonomous autopilot, which could be connected to, and controlled
from, the AIMD platform.
After
significant discussion with Vertitek and its principal shareholder, on January 20, 2015 we entered into a letter of intent (the
“LOI”) with Vertitek to acquire 100% of the capital stock of that company in exchange for the issuance of shares of
our common stock to the principal shareholder of Vertitek, contingent upon certain due diligence requirements. On January 27,
2015 we entered into the Share Exchange Agreement with Vertitek and Masamos on substantially the same terms as the LOI, and on
March 31, 2015 the closing of the Share Exchange Agreement occurred. Prior to the completion of the Acquisition, we advanced a
total of $33,500 to Vertitek under a line of credit in the amount of $150,000 to continue the development of the V-1 DroneSM.
Subsequent
to the execution of the LOI and in anticipation of completing the Acquisition, we combined our development efforts with those
of Vertitek to deliver our potential customers with the most advanced product and service offerings in the commercial UAV industry.
We
have never declared bankruptcy, receivership or any similar proceedings nor have we had any material reclassifications, mergers,
consolidations, or purchases or sales of a significant amount of assets not in the ordinary course of business.
Currently,
we have no patents, trademarks, licenses, franchises, concessions, royalty agreements or labor contracts. Since our inception,
our efforts have focused primarily on the development and implementation of our business plan. Our website address is www.valmie.com.
Our
Corporate History and Background
On
December 3, 2013, the holders of a majority of our issued and outstanding common stock approved an amendment to our bylaws (the
“Bylaw Amendment”) and an increase in our authorized capital from 100,000,000 shares of common stock, par value $0.001,
to 750,000,000 shares of common stock, par value $0.001 (the “Authorized Capital Increase”). The purpose of the Bylaw
Amendment was to update our bylaws and make them more comprehensive, while the purpose of the Authorized Capital Increase was
to reorganize our capital structure in connection with the stock dividend described below. We formally effected the Authorized
Capital Increase on December 4, 2013 by filing a Certificate of Amendment with the Nevada Secretary of State.
Also
on December 3, 2013, our former sole director approved a stock dividend of 59 authorized but unissued shares of our common stock
on each one (1) issued and outstanding share of our common stock. On December 13, 2013, we received approval from the Financial
Industry Regulatory Authority (FINRA) to effect the stock dividend by way of a forward split, and on December 17, 2013, our shareholders
of record on December 16, 2013 received the dividend. As a result of the stock dividend, our issued and outstanding common stock
increased from 4,940,000 shares to 296,400,000 shares.
On
December 10, 2014, the holders of a majority of our issued and outstanding common stock approved a set of amended and restated
articles of incorporation that, among other things, increased our authorized capital to 760,000,000 shares, consisting of 750,000,000
shares of common stock, par value $0.001, and 10,000,000 shares of “blank check” preferred stock, par value $0.001
(the “Blank Check Preferred Stock”). We formally effected the authorized capital increase and the creation of the
Blank Check Preferred Stock by filing the amended and restated articles of incorporation accompanied by the required certificate
with the Nevada Secretary of State on December 11, 2014.
On
December 11, 2014, our sole director approved the designation of 2,000,000 shares of the Blank Check Preferred Stock as Series
“A” preferred stock (the “Designation”). We formally effected the Designation by filing a Certificate
of Designation with the Nevada Secretary of State on January 15, 2015.
The
shares of Series “A” preferred stock carry certain rights and preferences. The Designation provides that the Series
“A” Preferred Stock may be converted into shares of our common stock on a 10 for one (1) basis at any time after 18
months from the date of issuance, and that each share of Series “A” preferred stock has voting rights and carries
a voting weight equal to 50 shares of common stock.
On
January 16, 2015, Fen, the owner of an aggregate of 237,360,000 shares, or approximately 80.1% of our issued and outstanding common
stock, agreed to cancel those shares in exchange for the issuance of the 2,000,000 shares of Series “A” preferred
stock described above. As a result, the number of issued and outstanding shares of our common stock decreased from 296,400,000
to 59,040,000.
Between
August 14, 2014 and March 20, 2015, we issued six promissory notes to three investors in the aggregate amount of $340,000 in exchange
for advances to us in an identical amount. Each of the promissory notes bears simple interest at an annual rate of 15% and matures
two years from the date of issuance. Five of the six promissory notes, in the aggregate amount of $325,000, are secured by all
of the assets, properties, goods, inventory, equipment, furniture, fixtures, leases, supplies, records, money, documents, instruments,
chattel paper, accounts, intellectual property rights (including but not limited to, copyrights, moral rights, patents, patent
applications, trademarks, service marks, trade names, trade secrets) and other general intangibles, whether owned by us on the
date of the applicable note or thereafter acquired, and all proceeds thereof.
On
April 6, 2015, we entered into debt conversion agreements with two of the three investors pursuant to which those investors converted
an aggregate of $350,000 in debt into 3,500,000 shares of our common stock at a price of $0.10 per share. As part of those
debt conversion agreements, the investors agreed to forgive any and all accrued interest and release their respective security
interests in our assets, rights or other property.
Also
on April 6, 2015, we entered into a debt conversion agreement with one creditor pursuant to which the creditor converted an aggregate
of $33,927 in debt into 339,270 shares of our common stock at a deemed price of $0.10 per share.
The
Acquisition
On
the Closing Date, we completed the Acquisition and Vertitek became our wholly owned subsidiary. Vertitek was established to provide
unmanned vehicle software, hardware and cloud services for a wide range of commercial applications around the globe. Vertitek
is in the process of developing the V-1 DroneSM, a cutting edge multi-rotor UAV designed specifically to meet the requirements
of a growing commercial user base. The assets of Vertitek include, but are not limited to, all intellectual property, trade name,
trade secrets, trademarks, personnel contracts, website domain and content, strategic partnerships, manuals, licenses and all
other confidential information related to the V-1 DroneSM and other technologies under development by Vertitek.
Our
Solutions
Our
UAV solutions consist of aerial data collection hardware, software and data storage solutions for commercial applications. We
believe that our systems collect and analyze the highest quality aerial data in the most efficient manner possible.
AIMD
Platform: Autonomous Intelligence for Mobilized Devices
We
are creating a system that we anticipate will be the most powerful and feature-rich ever for connecting mobilized machines, drones
and robots to enable communication, automation and visibility. We expect to be able to offer choices from dozens of industry applications
that are experiencing a growing need for visibility to help maximize operational efficiencies, and have taken into consideration
the need for a seamless point of integration, empowering the best-of-both-worlds – including hardware components and process
information – to work better together. We developed the AIMD platform as the intersection point for real-time operational
intelligence and effective work-flow that is accessible anywhere, anytime.
Our
open application program interface (API) and support for industry standards are designed to make it easy to add capabilities,
integrate existing systems and innovate with our partners in exciting new ways to harness all the power of their machines, devices
and controllers. Designing enterprise-grade scalability and security into the AIMD platform was at the forefront of our functional
requirements. And simplicity, reducing the “speed to the field”, and filtering the crucial data are all at the top
of our list. Our cloud-based interface provides access to our customers’ own rule-based actions and recognizes and reacts
to empower all assets to perform better, even in extreme environments.
AIMDx
– Learning Service Module
AIMDx
is part of the predictive intelligence required for next level businesses. Designed as an out-of-the-box external learning application,
AIMDx lets clients connect, communicate and collaborate within a secure, cloud-based network regardless of device type. AIMD transforms
the data feedback loop into usable information that allows for real-time streamlining of analysis and corrective action. From
image analysis to route discrepancies, the AIMDx module drives production and automating information flow for a new level of efficiency,
allowing for cross-referencing of first and third-party data sources. Unlike automation software, AIMDx looks for deep contact
points of engagement, authentic end-use intelligence and lasting data assessment for use in the field. It’s quick and cost-effective
via the cloud, and is focused on helping our customers achieve results.
Our
Hardware Systems
In
collaboration with Vertitek, we are developing the extremely versatile V-1 DroneSM. The multi-rotor platform features
a large carbon fiber composite frame with high efficiency brushless motors. To further increase efficiency, the motors include
large diameter carbon fiber blades. This provides powerful lift while increasing flight times. State-of-the-art lithium polymer
batteries provide power to the rotor with amazing power-to-weight ratios. These batteries not only save weight, but also provide
longer flight times than previous generations of batteries. Along with powerful batteries, the V-1 DroneSM will feature
a fully autonomous autopilot. The autopilot system is based on the powerful 32-bit Pixhawk controller with many sensors and features.
This controller provides more functionality with custom sensor packages. These packages range from Sonar, to GPS mapping, to a
live first person view (FPV) of the surroundings. Each multi-rotor system can be customized to fit specific needs by upgrading,
optimizing, and personalizing individual components.
Images
of the V-1 DroneSM
The
following are the hardware specifications for the V-1 DroneSM:
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fully
autonomous 32 bit Pixhawk flight controller |
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lightweight
customized carbon fiber frame |
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high
capacity lithium polymer batteries |
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high
voltage 20 amp brushless speed controllers |
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large
17” carbon fiber propellers |
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available
customized sensor packages |
To
date, we have spent approximately $75,000 to build 10 prototypes of the V-1 DroneSM. We are in the process of testing
these prototypes. Mr. Hammack is allowing us to use his ranchland to store and test the drones. When necessary, we intend to expand
our testing area to include farmland and other agricultural areas for real world usability testing.
Suppliers
Both
our hardware and software solutions rely on certain outside suppliers for either operational components or software packages upon
which our systems are constructed. At this time there are multiple suppliers for almost all of the components that are required
in our business and we do not foresee a situation under which we would be unable to receive the items required from these suppliers.
Our V-1 DroneSM prototype is constructed mostly from readily available components. When we begin to manufacture
the V-1 DroneSM for commercial sale we will require certain proprietary components to be manufactured to our specifications.
This will limit our supply network and could leave us vulnerable in the event of an issue with such supplier. Where appropriate
we will try to diversify our supply network as much as possible to mitigate future supply risks.
Business
Plan Implementation Schedule
We
will be unable to implement the remainder of our business plan until we are able to secure total financing of approximately $1,500,000.
However, there can be no assurance that sufficient financing will be available or available on suitable terms. We have not established
a schedule for the completion of specific tasks or milestones contained in our business plan. Virtually all aspects of our
business plan are scalable in terms of size, quality and effectiveness, and the timing of their execution must be concurrent or
near concurrent and progressive over an eighteen-month period. We anticipate that we will require a total of $1,500,000 in order
to deliver upon our business goals within a 24-month period.
Sales
and Marketing Strategy
We
plan to begin producing revenues from sales related to drone services, either through one-time contracts or through longer-term
monitoring and data processing agreements. We plan to begin discussions within the agriculture industry to determine the areas
in which our services could have an immediate impact, thus generating the most interest from early adopters. While we plan to
attend industry conferences and association meetings in order to introduce our services, we believe that personal relationships
and introductions will be our best avenue to capture revenues in the near-term.
We
anticipate that we will be actively marketing our V-1 DroneSM for sale to commercial customers within 24 months. In
order to effectively sell the V-1 DroneSM we will need to engage a professional sales and marketing team with experience
in business-to-business sales. We expect that as the UAV market matures over the coming years there will be opportunities for
collaborations with other interested parties that could provide additional markets for our product and services.
Characteristics
and Make Up of Target Market
The
UAV market is constantly changing, due in large part to the current regulatory challenges faced by the industry. It is impossible
to predict exactly how new regulations will impact the market at this time.
Although
our initial focus will be the agriculture and farming markets, our solutions, especially the V-1 DroneSM, will be applicable
to a variety of markets. We will be constantly reviewing our target markets to ensure the success of our business model.
As
the UAV industry matures in the coming years, the demand for our solutions will only increase. Our early entry into the commercial
UAV marketplace will provide an opportunity to become one of the major solution providers in our target markets.
Competition
The
commercial UAV market is characterized by many participants that offer very similar products. Therefore, our strategy is to begin
offering advanced solutions that combine our software and hardware offerings in such a way to bring clear value to our customers.
Although
this industry operates in a highly specialized niche, competition for business will be intense. We will face significant competition
in the provision of both software solutions and hardware systems, as follows:
Hardware
Vendors
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Parrot Industries |
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PrecisionHawk |
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DJI Innovations |
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Helico Aerospace
Industries |
Software
Solutions Providers
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PrecisionHawk |
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AirWare |
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DroneCode |
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NV
Drones |
Intellectual
Property
Our
policy is to capitalize intellectual property related to the filing and acquisition of internally developed patents where appropriate.
Patent
related expenses that are eligible for capitalization include:
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legal
fees related to the preparation and filing of a patent application; |
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legal
fees related to the defense of a patent or patent application; and |
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filing
fees related to the filing of a patent application. |
Intellectual
property for internally developed patents will be capitalized only in the above circumstances and will be amortized over the life
of the patent, beginning on the grant date.
We
have not filed any patents related to our UAV technologies as of the date of this Report; however, we anticipate that we will
begin to complete such filings in the near future.
Research
and Development
Our
current research and development activities are solely focused on the continued development of the AIMD platform and the V-1 DroneSM.
We anticipate these efforts will lead to additional products being developed from the foundation of these two systems. If and
when we are able to do this, engineering design development will be employed to aid in the development of these systems. At this
time, however, we have no plans to pursue pure research and development activities at any point in the future.
Government
Regulations
As
a provider of technologies and services in the UAV industry we are likely to be subject to extensive regulation at both the federal
and municipal levels. This will be especially true if we begin to offer operational services to our customers.
The
regulatory environment for commercial UAV use has not yet been codified in the United States. In addition to a few recent Federal
Aviation Administration (“FAA”) exemptions, the key case, Huerta v. Pirker, has not brought definitive clarity,
just more clearly defined positions on both sides of the dispute over the regulated or unregulated use of UAV’s for commercial
purposes.
UAV
regulations for the United States airspace are still a patchwork of confusing, often contradictory rulings, generally based on
regulations, which, in some cases, were codified decades ago. Based on the existing exemptions, those entities and organizations
that anticipate using UAV’s commercially will be required to receive pilot certifications, including medical certifications,
which the FAA has attached to the few exemptions. Operators and pilots are likely to be distinguished.
On
the non-FAA side, there will be expanding barriers to entry into the UAV industry, especially if FAA regulations should surprise
us with low thresholds for an entry into the commercial field. From homeland security to privacy, there are real and imaginary
dangers associated with the expanding use of UAV’s in the United States. As U.S. domestic regulation continues to fall behind
those of more forward thinking countries, it may become necessary for UAV companies to focus their efforts and resources outside
the United States until such time as UAV regulations become more conducive to the game-changing solutions that can only be delivered
by tomorrow’s advanced UAV systems and technologies.
Employees
As
of the date of this Report, we do not have any full-time or part-time employees. We currently rely on the efforts of Gerald B.
Hammack, our sole executive officer and director, and Sean Foster, the sole officer and director of Vertitek, to manage our operations.
Mr. Hammack dedicates approximately 40 hours per week to the management of our operations along with the oversight of our autonomous
vehicle software and hardware development projects, and Mr. Foster dedicates approximately 20 hours per week to the continued
development of Vertitek’s autonomous vehicle prototypes. From time to time, we also engage consultants to provide specialized
technical and support services, both in the implementation of our corporate structure as well as the advancement of our products
and services.
RISK
FACTORS
An
investment in our common stock involves a high degree of risk. Investors should carefully consider the risks described below,
together with all of the other information included in this Report, before making an investment decision. If any of the following
risks actually occurs, our business, financial condition or results of operations could suffer and they may lose all or part of
their investment. See “Forward Looking Statements” above for a discussion of forward-looking statements and the significance
of such statements in the context of this Report.
Risks
Related to Our Business and Industry
We
have a history of operating losses and there can be no assurance that we can achieve or maintain profitability.
We
have a history of operating losses and may not achieve or sustain profitability. We cannot guarantee that we will become profitable.
Even if we achieve profitability, given the competitive and evolving nature of the industry in which we operate, we may be unable
to sustain or increase profitability and our failure to do so would adversely affect our business, including our ability to raise
additional funds.
Because
our auditors have issued a going concern opinion, there is substantial uncertainty that we will be able to continue our operations.
Our
auditors have issued a going concern opinion. This means that there is substantial doubt that we can continue to operate over
the next 12 months. Our financial statements do not include any adjustments relating to
the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary
in the event we cannot continue in existence. As such, if we are unable to obtain new financing to execute our business
plan we may be required to cease our operations.
Product
development is a long, expensive and uncertain process.
The
development of both UAV software and hardware is a costly, complex and time-consuming process, and investments in product development
often involve a long wait until a return, if any, can be achieved on such investment. We anticipate making significant investments
in research and development relating to our products and services, but such investments are inherently speculative. Any unforeseen
technical obstacles and challenges that we encounter in the research and development process could result in delays in or the
abandonment of product commercialization, may substantially increase development costs, and may negatively affect our results
of operations.
Successful
technical development of our products does not guarantee successful commercialization.
We
may successfully complete the technical development of the AIMD platform, the V-1 DroneSM or both, but still fail to achieve commercial
success for a number of reasons, including the following:
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failure
to obtain the required regulatory approvals for their use; |
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prohibitive
production costs; |
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competing
products; |
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lack
of product innovation; |
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ineffective
distribution and marketing; |
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insufficient
cooperation from our partners; and |
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product
demonstrations not aligning with or meeting customer needs. |
Our
success in the market for the products and services we develop will depend largely on our ability to properly demonstrate their
capabilities. Upon demonstration, the AIMD platform and the V-1 DroneSM may not have the capabilities they were designed
to have or that we believed they would have. Furthermore, even if we do successfully demonstrate our products’ capabilities,
potential customers may be more comfortable doing business with a larger, more established, more proven company than us. Significant
revenue from new product investments may not be achieved for a number of years, if at all.
If
we fail to protect our intellectual property rights, we could lose our ability to compete in the marketplace.
Our
intellectual property and proprietary rights are important to our ability to remain competitive and for the success of our products
and our business. Patent protection can be limited and not all intellectual property can be patented. We expect to rely on a combination
of patent, trademark, copyright, and trade secret laws as well as confidentiality agreements and procedures, non-competition agreements
and other contractual provisions to protect our intellectual property, other proprietary rights and our brand. We have little
protection when we must rely on trade secrets and nondisclosure agreements. Our intellectual property rights may be challenged,
invalidated or circumvented by third parties. We may not be able to prevent the unauthorized disclosure or use of our technical
knowledge or other trade secrets by employees or competitors. Furthermore, our competitors may independently develop technologies
and products that are substantially equivalent or superior to our technologies and products, which could result in decreased revenues.
Litigation may be necessary to enforce our intellectual property rights which could result in substantial costs to us and substantial
diversion of management attention. If we do not adequately protect our intellectual property, our competitors could use it to
enhance their products. Our inability to adequately protect our intellectual property rights could adversely affect our business
and financial condition, and the value of our brand and other intangible assets.
Other
companies may claim that we infringe their intellectual property, which could materially increase our costs and harm our ability
to generate future revenue and profit.
We
do not believe that our technologies infringe on the proprietary rights of any third party, but claims of infringement are becoming
increasingly common and third parties may assert infringement claims against us. It may be difficult or impossible to identify,
prior to receipt of notice from a third party, the trade secrets, patent position or other intellectual property rights of a third
party, either in the United States or in foreign jurisdictions. Any such assertion may result in litigation or may require us
to obtain a license for the intellectual property rights of third parties. If we are required to obtain licenses to use any third
party technology, we would have to pay royalties, which may significantly reduce any profit on our products. In addition, any
such litigation could be expensive and disruptive to our ability to generate revenue or enter into new market opportunities. If
any of our products were found to infringe other parties’ proprietary rights and we are unable to come to terms regarding
a license with such parties, we may be forced to modify our products to make them non-infringing or to cease production of such
products altogether.
The
nature of our business involves significant risks and uncertainties that may not be covered by insurance or indemnity.
We
have developed and plan to sell products and services in circumstances where insurance or indemnification may not be available;
for example, in connection with the collection and analysis of various types of information. In addition, our products and services
raise questions with respect to issues of civil liberties, intellectual property, trespass, conversion and similar concepts, which
may create legal issues. Indemnification to cover potential claims or liabilities resulting from the failure of any technologies
that we develop or deploy may be available in certain circumstances but not in others. We may not be able to maintain insurance
to protect against all operational risks and uncertainties. Substantial claims resulting from an accident, product failure, or
liability arising from our products and services in excess of any indemnity or insurance coverage (or for which indemnity or insurance
coverage is not available or is not obtained) could harm our financial condition, cash flows and operating results. Any accident,
even if fully covered or insured, could negatively affect our reputation among our customers and the public, and make it more
difficult for us to compete effectively.
If
we are unable to recruit and retain key management, technical and sales personnel, our business would be negatively affected.
For
our business to be successful, we need to attract and retain highly qualified technical, management and sales personnel. The failure
to recruit additional key personnel when needed with specific qualifications and on acceptable terms, or to maintain positive
relationships with our partners might impede our ability to continue to develop, commercialize and sell our products and services.
To the extent the demand for skilled personnel exceeds supply, we could experience higher labor, recruiting and training costs
in order to attract and retain such employees. The loss of any members of our management team may also delay or impair achievement
of our business objectives and result in business disruptions due to the time needed for their replacements to be recruited and
become familiar with our business. We face competition for qualified personnel from other companies with significantly more resources
available to them and thus may not be able to attract the level of personnel needed for our business to succeed.
We
may indemnify our officers and directors against liability to us and our security holders, and such indemnification could increase
our operating costs.
Our
Bylaws allow us to indemnify our officers and directors against claims associated with carrying out the duties of their offices.
Our Bylaws also allow us to reimburse them for the costs of certain legal defenses. Insofar as indemnification for liabilities
arising under the Securities Act of 1933, as amended (the “Securities Act”) may be permitted to our officers, directors
or control persons, we have been advised by the Securities and Exchange Commission (the “SEC”) that such indemnification
is against public policy and is therefore unenforceable.
Since
our officers and directors are aware that they may be indemnified for carrying out the duties of their offices, they may be less
motivated to meet the standards required by law to properly carry out such duties, which could increase our operating costs. Further,
if any of our officers and directors files a claim against us for indemnification, the associated expenses could also increase
our operating costs.
We
may pursue strategic transactions in the future, which could be difficult to implement, disrupt our business or change our business
profile significantly.
We
intend to consider potential strategic transactions, which could involve acquisitions of businesses or assets, joint ventures
or investments in businesses, products or technologies that expand, complement or otherwise relate to our current or future business.
We may also consider, from time to time, opportunities to engage in joint ventures or other business collaborations with third
parties to address particular market segments. These activities create risks such as, among others: (i) the need to integrate
and manage the businesses and products acquired with our own business and products; (ii) additional demands on our resources,
systems, procedures and controls; (iii) disruption of our ongoing business; and (iv) diversion of management’s attention
from other business concerns. Moreover, these transactions could involve: (a) substantial investment of funds or financings by
issuance of debt or equity securities; (b) substantial investment with respect to technology transfers and operational integration;
and (c) the acquisition or disposition of product lines or businesses. Also, such activities could result in one-time charges
and expenses and have the potential to either dilute the interests of our existing stockholders or result in the issuance of,
or assumption of debt. Such acquisitions, investments, joint ventures or other business collaborations may involve significant
commitments of financial and other resources. Any such activities may not be successful in generating revenue, income or other
returns, and any resources we committed to such activities will not be available to us for other purposes. Moreover, if we are
unable to access capital markets on acceptable terms or at all, we may not be able to consummate acquisitions, or may have to
do so on the basis of a less than optimal capital structure. Our inability to take advantage of growth opportunities or address
risks associated with acquisitions or investments in businesses may negatively affect our operating results. Additionally, any
impairment of goodwill or other intangible assets acquired in an acquisition or in an investment, or charges to earnings associated
with any acquisition or investment activity, may materially reduce our earnings. Future acquisitions or joint ventures may not
result in their anticipated benefits and we may not be able to properly integrate acquired products, technologies or businesses
with our existing products and operations or successfully combine personnel and cultures. Failure to do so could deprive us of
the intended benefits of those acquisitions.
Risks
Relating to our Common Stock
Because
there is a limited public trading market for our common stock, investors may not be able to resell their shares.
There
is currently a limited public trading market for our common stock. Therefore, there is no central place, such as stock exchange
or electronic trading system, to resell any shares of our common stock. If investors wish to resell their shares, they will have
to locate a buyer and negotiate their own sale. As a result, they may be unable to sell their shares or may be forced to sell
them at a loss.
We
cannot assure investors that there will be a market in the future for our common stock. The trading of securities on the OTC Bulletin
Board is often sporadic and investors may have difficulty buying and selling our shares or obtaining market quotations for them,
which may have a negative effect on the market price of our common stock. Investors may not be able to sell shares at their purchase
price or at any price at all.
Fen
has voting control over matters submitted to a vote of the stockholders, and it may take actions that conflict with the interests
of our other stockholders and holders of our debt securities.
Our
majority stockholder, Fen, owns 2,000,000 shares of our Series “A” preferred stock, each of which carries a voting
weight equal to 50 shares of our common stock. As a result, Fen controls approximately 61.4% of the votes eligible to be cast
by our stockholders and has the power to control all matters requiring the approval of our stockholders, including the election
of directors and the approval of mergers and other significant corporate transactions.
The
sale of securities by us in any equity or debt financing could result in dilution to our existing stockholders and have a material
adverse effect on our earnings.
Any
sale of common stock by us in a future private placement offering could result in dilution to our existing stockholders as a direct
result of the issuance of additional shares of our capital stock. In addition, our business strategy may include expansion through
acquisitions or business combinations with entities operating in our industry. In order to do so, or to finance the cost of our
operations, we may issue additional equity securities that could dilute our stockholders’ ownership positions. We may also
pursue debt financing, if and when available, and this could negatively impact our earnings and results of operations.
We
are subject to penny stock regulations and restrictions and investors may have difficulty selling shares of our common stock.
Our
common stock is subject to the provisions of Section 15(g) and Rule 15g-9 of the Exchange Act, commonly referred to as the “penny
stock rules”. Section 15(g) sets forth certain requirements for transactions in penny stock, and Rule 15g-9(d) incorporates
the definition of “penny stock” that is found in Rule 3a51-1 of the Exchange Act. The SEC generally defines a penny
stock to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions. We are subject
to the SEC’s penny stock rules.
Since
our common stock is deemed to be penny stock, trading in the shares of our common stock is subject to additional sales practice
requirements on broker-dealers who sell penny stock to persons other than established customers and accredited investors. “Accredited
investors” are generally persons with assets in excess of $1,000,000 (excluding the value of such person’s primary
residence) or annual income exceeding $200,000 or $300,000 together with their spouse. For transactions covered by these rules,
broker-dealers must make a special suitability determination for the purchase of such security and must have the purchaser’s
written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt,
the rules require the delivery, prior to the first transaction, of a risk disclosure document relating to the penny stock market.
A broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative and current
quotations for the securities. Finally, monthly statements must be sent disclosing recent price information for the penny stocks
held in an account and information to the limited market in penny stocks. Consequently, these rules may restrict the ability of
broker-dealers to trade and/or maintain a market in our common stock and may affect the ability of our stockholders to sell their
shares of common stock.
There
can be no assurance that our common stock will qualify for exemption from the penny stock rules. In any event, even if our common
stock was exempt from the penny stock rules, we would remain subject to Section 15(b)(6) of the Exchange Act, which gives the
SEC the authority to restrict any person from participating in a distribution of penny stock if the SEC finds that such a restriction
would be in the public interest.
We
do not expect to pay dividends for the foreseeable future.
We
do not intend to declare dividends for the foreseeable future, as we anticipate that we will reinvest any future earnings in the
development and growth of our business. Therefore, our stockholders will not receive any funds unless they sell their common stock,
and stockholders may be unable to sell their shares on favorable terms or at all.
Investors
may face significant restrictions on the resale of their shares due to state “blue sky” laws.
Each
state has its own securities laws, commonly known as “blue sky” laws, which (1) limit sales of securities to a state’s
residents unless the securities are registered in that state or qualify for an exemption from registration, and (2) govern the
reporting requirements for broker-dealers doing business directly or indirectly in the state. Before a security is sold in a state,
there must be a registration in place to cover the transaction, or it must be exempt from registration. The applicable broker-dealer
must also be registered in that state.
We
do not know whether our securities will be registered or exempt from registration under the laws of any state. A determination
regarding registration will be made by those broker-dealers, if any, who agree to serve as market makers for our common stock.
There may be significant state blue sky law restrictions on the ability of investors to sell, and on purchasers to buy, our securities.
Investors should therefore consider the resale market for our common stock to be limited, as they may be unable to resell their
shares without the significant expense of state registration or qualification.
FINANCIAL
INFORMATION
Management’s
Discussion and Analysis of Financial Condition and Results of Operations
The
following discussion and analysis of our results of operations and financial condition has been derived from and should be read
in conjunction with our audited financial statements and the related notes thereto that appear elsewhere in this Report.
Overview
We
were incorporated pursuant to the laws of the State of Nevada on August 26, 2011. We have not yet generated any revenue from operations.
Results
of Operations
Three
Months Ended February 28, 2015 and 2014
Revenue
We
have not generated any revenue since our inception. We anticipate that we will incur substantial losses for the foreseeable future
and our ability to generate any revenue during the next 12 months continues to be uncertain.
Expenses
During
the three months ended February 28, 2015, we incurred $128,509 in operating expenses, including $110,060 in professional fees,
$7,003 in general and administrative expenses, $11,000 in management fees and $446 in transfer agent fees. During the same period
in fiscal 2014, we incurred $17,795 in operating expenses, including $17,595 in professional fees and $200 in transfer agent fees.
The $110,714 increase in our operating expenses between the two periods was therefore primarily attributable to the significant
increase in our professional fees, which was in turn related to our obligations under a consulting agreement we entered into on
September 1, 2014.
During
the three months ended February 28, 2015, we also incurred $6,811 in interest expenses, whereas we did not incur any interest
expenses during the same period in fiscal 2014.
Net
Loss
During
the three months ended February 28, 2015, we incurred a net loss of $135,320, whereas we incurred a net loss of $17,795 during
the same period in fiscal 2014. Our basic and diluted net loss per share during each of those periods was $0.00.
Years
Ended November 30, 2014 and 2013
Expenses
During
the year ended November 30, 2014, we incurred $164,155 in operating expenses, including $136,415 in professional fees, $20,000
in management fees, $5,815 in general and administrative expenses and $1,925 in transfer agent fees. During the year ended November
30, 2013, we incurred $62,227 in operating expenses, including $32,866 in professional fees, $8,482 in general and administrative
expenses, $14,473 in transfer agent fees and $6,406 in mining expenses. The $101,928 increase in our operating expenses between
the two years was therefore primarily attributable to the increases in our professional and management fees during the most recent
year, as offset by decreases in our mining and general and administrative expenses. In particular, the significant increase in
our professional fees during the year ended November 30, 2014 related to amounts paid or accrued to a consultant for assisting
with the Vertitek acquisition transaction.
Net
Loss
During
the years ended November 30, 2014 and 2013, we incurred net losses of $164,155 and $62,227, respectively, both of which were equivalent
to our operating expenses during those years. Our basic and diluted net loss per share during each of those years was $0.00.
Liquidity
and Capital Resources
As
of February 28, 2015
As
of February 28, 2015, we had $5,277 in cash and cash equivalents, $31,127 in current and total assets, $75,130 in current liabilities,
$349,746 in total liabilities, a working capital deficit of $44,003 and a retained deficit of $459,362.
During
the three months ended February 28, 2015, we used $181,788 in net cash on operating activities and our accounts payable decreased
by $52,929. During the same period in fiscal 2014 we used $5,200 in net cash on operating activities and our accounts payable
increased by $7,595. The majority of our spending on operating activities for the three months ended February 28, 2015 was attributable
to our net loss as described above, as adjusted for changes in our accounts payable and accrued liabilities, and was associated
with carrying out our reporting obligations under applicable securities laws and transitioning our business focus from mining
to pursuing opportunities for the commercialization of products and services in the technology industry.
During
the three months ended February 28, 2015, we used $25,500 in net cash on investing activities, all of which was in the form of
advances to Vertitek. During the same period in fiscal 2014, we did not use any net cash on investing activities.
During
the three months ended February 28, 2015, we received $200,000 from financing activities, all of which was in the form of proceeds
from promissory notes. During the same period in fiscal 2014, we received $5,200 from financing activities, all of which was in
the form of proceeds from a related party.
During
the three months ended February 28, 2015, our cash position decreased by $7,288 due to a combination of our operating, investing
and financing activities.
As
of November 30, 2014
As
of November 30, 2014, we had $12,565 in cash and cash equivalents and total assets, $195,864 in total liabilities, a working capital
deficit of $115,494 and an accumulated deficit of $324,042.
During
the year ended November 30, 2014, we used $89,758 in net cash on operating activities, our accounts payable and accrued liabilities
increased by $66,592, our prepaid expenses decreased by $5,000 and we accrued $2,805 in interest on certain promissory notes in
the aggregate principal amount of $65,000. During the year ended November 30, 2013 we used $70,326 in net cash on operating activities,
our accounts payable and accrued liabilities decreased by $3,099 and our prepaid expenses increased by $5,000. The majority of
our spending on operating activities for the years ended November 30, 2014 and 2013 was therefore attributable to our net loss
as described above, as adjusted for changes in our accounts payable and accrued liabilities, and was associated with our carrying
out our reporting obligations under applicable securities laws.
We
did not incur any expenditures on investing activities during the years ended November 30, 2014 or 2013.
During
the year ended November 30, 2014, we received $102,323 in cash from financing activities, including $65,000 in the form of proceeds
from promissory notes and $37,323 in the form of proceeds from related parties. During the year ended November 30, 2013, we received
$66,200 from financing activities, substantially all of which was in the form of proceeds from a related party.
During
the year ended November 30, 2014, our cash increased by $12,565 due to a combination of our operating and financing activities.
Our
plans for the next 12 months are uncertain due to our current financial condition; however, we intend to raise additional funds
through public or private placement offerings. If we are unsuccessful in raising enough money through such efforts, we may review
other financing possibilities such as bank loans. At this time we do not have a commitment from any broker-dealer to provide us
with financing. There is no assurance that any financing will be available to us or if available, on terms that will be acceptable
to us. In the absence of such financing, we may be forced to cease or significantly curtail our operations.
Plan
of Operations
We
will need to raise additional capital to fully develop our business plan. We have a 24-month plan during which we intend to implement
our business development and marketing plan. We believe we must raise approximately $1,500,000 to pay for expenses associated
with the continued development of our AIMD platform as well as the development and commercialization of the Vertitek V-1 DroneSM.
Of this, we plan to use $500,000 to finance anticipated activities during Phase I of our development plan as described below,
and $1,000,000 to finance anticipated activities during Phase II.
Phase
I
Description | |
Estimated
Amount
($) | |
Complete the development of the AIMD platform | |
| 200,000 | |
Finalize the design of the V-1 DroneSM | |
| 150,000 | |
Hire sales staff to work with potential clients | |
| 50,000 | |
Additional working capital to cover general and administrative expenses | |
| 100,000 | |
Total | |
| 500,000 | |
Phase
II
Description | |
Estimated
Amount
($) | |
Complete small-scale manufacturing
of the V-1 DroneSM | |
| 500,000 | |
Sales literature, displays and advertising expenses | |
| 200,000 | |
Management and consulting fees, employee salaries | |
| 200,000 | |
Additional working capital to cover general and administrative expenses | |
| 100,000 | |
Total | |
| 1,000,000 | |
Many
of the developments enumerated in Phase II are dependent on the completion of our Phase I objectives, and both phases are dependent
on us obtaining additional financing. There can be no assurance that we will be able to secure such financing, and if we are able
to raise some but not all of the funds required to undertake the developments in Phase I and Phase II our management will likely
need to re-examine our proposed business activities to use our resources most efficiently. In this event, our focus will likely
be on spending available funds to maintain our reporting status with the SEC and developing our product designs to attract investors.
If
we are unable to raise additional funds, we will not be able to complete any of the milestones in either Phase I or Phase II.
Due to the fact that many of the milestones are dependent on each other, if we are unsuccessful in obtaining additional financing
we may not be able to implement any facets of our business plan.
We
intend to pursue capital through public or private financing as well as borrowings and other sources, such as loans from our existing
shareholders in order to finance our business activities. We cannot guarantee that additional funding will be available on favourable
terms, if at all. If adequate funds are not available, then our ability to continue our operations may be significantly hindered.
Going
Concern
Our
financial statements have been prepared on a going concern basis, which contemplates, among other things, that we will continue
to realize our assets and satisfy our liabilities in the normal course of business. As at February 28, 2015, we had a working
capital deficit of $44,003 and a retained deficit of $459,362, and as at November 30, 2014, we had a working capital deficit of
$115,494 and an accumulated deficit of $324,042. We intend to fund our operations through equity financing arrangements, which
may be insufficient to fund our capital expenditures, working capital and other cash requirements for the next 12 months.
Our
ability to continue in existence is dependent upon, among other things, obtaining additional financing to continue our operations,
including the operations of Vertitek. These factors, among others, raise substantial doubt about our ability to continue as a
going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Significant
Accounting Policies
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 and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates. Our periodic filings with the Securities and Exchange
Commission include, where applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect our financial
statements and future operations.
Cash
and Cash Equivalents
Cash
and cash equivalents include cash in banks, money market funds, and certificates of term deposits with original maturities of
less than three months, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject
to an insignificant risk of loss in value.
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.
PROPERTIES
Our
executive office is located at 1001 S Dairy Ashford Road, Suite 100, Houston, TX 77077. As our sole officer and director and the
sole officer and director of Vertitek both spend the majority of their time working from home-office situations, we currently
pay approximately $100 per month under a month-to-month agreement with Regus for this office space. We believe that this arrangement
is generally suitable to meet our needs for the foreseeable future; however, we will continue to seek additional space as needed
to satisfy our growth.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth certain information regarding our common stock beneficially owned as of the date of this Report for
(i) each stockholder known to be the beneficial owner of 5% or more of our outstanding shares of common stock, (ii) each of our
officers and directors and (iii) our officers and directors as a group. A person is considered to beneficially own any shares
over which such person, directly or indirectly, exercises sole or shared voting or investment power, or over which such person
has the right to acquire beneficial ownership at any time within 60 days through an exercise of stock options or warrants or otherwise.
Unless otherwise indicated, voting and investment power relating to the shares shown in the table for our officers and directors
is exercised solely by the beneficial owner thereof.
For
the purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares of
our common stock that such person has the right to acquire within 60 days. For the purposes of computing the percentage of outstanding
shares of our common stock held by each person or group of persons named above, any shares that such person or persons has the
right to acquire within 60 days is deemed to be outstanding, but is not deemed to be outstanding for the purpose of computing
the percentage ownership of any other person. The inclusion herein of any shares listed as beneficially owned does not constitute
an admission of beneficial ownership.
Title
of
Class |
|
Name
of Beneficial Owner |
|
Amount
and
Nature of
Beneficial
Ownership |
|
Percent
of
Class (1) |
Common
Stock |
|
Gerald B. Hammack
(2) |
|
- |
|
- |
Common
Stock |
|
Timothy Franklin
(3) |
|
- |
|
- |
Common
Stock |
|
Khurram Shroff
(4) |
|
- |
|
- |
All
Officers and Directors as a Group |
|
- |
|
- |
Preferred
Stock |
|
Fen Holdings &
Investments Limited (5) c/o EuroHelvetia TrustCo S.A. 10 route de l’Aeroport Geneva, Switzerland CH-1215 |
|
2,000,000 |
|
100 |
(1) |
Based on 63,879,270 shares of our common
stock and 2,000,000 shares of our Series “A” preferred stock issued and outstanding as of the date of this Report. |
|
|
(2)
|
Gerald B. Hammack has been our Chairman,
President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer and sole director
since December 8, 2014. |
|
|
(3) |
Timothy Franklin was our President,
Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer and sole director from
April 16, 2014 until December 8, 2014. |
|
|
(4) |
Khurram Shroff was our President, Chief
Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer and sole director from September
30, 2013 until April 16, 2014. |
|
|
(5) |
Juergen Krause exercises sole voting
and investment power over the securities held by Fen Holdings & Investments Limited. |
Changes
in Control
As
of the date of this Report, we were not aware of any arrangements, including any pledge by any person of our securities, the operation
of which may at a subsequent date result in a change in our control.
DIRECTORS
AND EXECUTIVE OFFICERS
Our
bylaws allow the number of directors to be fixed by our Board of Directors. Our Board of Directors has fixed the number of directors
at one.
As
of the date of this Report, the name, age and positions of our sole executive officer and director are as follows:
Name |
|
Age |
|
Position |
Gerald
B. Hammack |
|
52 |
|
Chairman,
President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer, Director |
Mr.
Hammack will serve as our director until our next stockholder meeting or until his successor is elected who accepts the position.
Officers hold their positions at the will of the Board of Directors. There are no arrangements, agreements or understandings between
non-management stockholders and management under which non-management stockholders may directly or indirectly participate in or
influence the management of our affairs.
Gerald
B. Hammack – Chairman, President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary,
Treasurer, Director
Mr.
Hammack has been our Chairman, President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary,
Treasurer and sole director since December 8, 2014. He has more than 30 years of experience in a variety of technology-related
fields, including programming, digital telephony, database management as well as substantial expertise in the setup and management
of complex data processing systems. From 2008 to the present, he has acted as the Managing Director of Wizard Technical Services,
a boutique firm located in Cushing, Texas, focused on the development of customized technology solutions for a diverse client
base, including the development and management of a cloud-based Internet telephony solution for a niche telephony service provider
as well as offsite management and oversight of legacy hardware and software systems.
Prior
to 2008, Mr. Hammack served as the Director of Technical Services for the Orleans Parish Criminal Sheriff’s Office (OPCSO)
in New Orleans, Louisiana. While holding the rank of Captain, Mr. Hammack’s experience and dedication were instrumental
in restarting OPCSO’s operations after the devastation of Hurricane Katrina.
Mr.
Hammack has not been a director of any company with a class of securities registered pursuant to section 12 of the Exchange Act
or subject to the requirements of section 15(d) of the Exchange Act, or any company registered as an investment company under
the Investment Company Act of 1940, during the past five years.
Significant
Employees
Other
than our sole executive officer and director and the sole officer and director of Vertitek, we do not expect any other individuals
to make a significant contribution to our business at this time.
Family
Relationships
There
are no family relationships among our sole director, sole executive officer or persons nominated or chosen by us to become directors
or executive officers.
Legal
Proceedings
None
of our directors, executive officers, promoters or control persons has been involved in any of the following events during the
past 10 years:
| ● | any
bankruptcy petition filed by or against any business of which such person was a general
partner or executive officer either at the time of the bankruptcy or within two years
prior to that time; |
| | |
| ● | any
conviction in a criminal proceeding or being subject to a pending criminal proceeding
(excluding traffic violations and other minor offenses); |
| | |
| ● | being
subject to any order, judgment or decree, not subsequently reversed, suspended or vacated,
of any court of competent jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type of business, securities
or banking activities; |
| | |
| ● | being
found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity
Futures Trading Commission to have violated any federal or state securities or commodities
law, and the judgment has not been reversed, suspended or vacated; |
| | |
| ● | being
the subject of, or a party to, any federal or state judicial or administrative order,
judgment, decree or finding, not subsequently reversed, suspended or vacated, relating
to an alleged violation of any law or regulation prohibiting mail or wire fraud or fraud
in connection with any business activity; |
| | |
| ● | being
the subject of, or a party to, any judicial or administrative order, judgment, decree
or finding, not subsequently reversed, suspended or vacated relating to an alleged violation
of any federal or state securities or commodities law or regulation or any law or regulation
respecting financial institutions or insurance companies; or |
| | |
| ● | being
the subject of, or a party to, any sanction or order, not subsequently reversed, suspended
or vacated, of any stock, commodities or derivatives exchange or other self-regulatory
organization. |
Except
as set forth in our discussion below in “Certain Relationships and Related Transactions,” none of our directors or
executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates
which are required to be disclosed pursuant to the rules and regulations of the SEC.
Code
of Ethics
We
have not yet adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions, because we have not yet finalized the content of such
a code. Companies whose equity securities are listed for trading on the OTC Bulletin Board are not currently required to implement
a code of ethics.
Director
Nominees
There
have been no material changes to the procedures by which security holders may recommend nominees to our Board of Directors.
Audit
Committee
On
September 30, 2013, we established an audit committee and appointed our former sole executive officer and director as the sole
member of the committee. He has since been replaced by our current sole executive officer and director, Gerald B. Hammack. Mr.
Hammack is not an independent member of the committee pursuant to NASDAQ Listing Rule 5605(a)(2) since he is our sole executive
officer. The Board of Directors adopted a charter for the audit committee on September 30, 2013, a copy of which was included
as Exhibit 99.1 to our annual report for the fiscal year ended November 30, 2013, filed with the SEC on March 14, 2014.
The
audit committee is responsible for reviewing both our interim and annual financial statements. For the purposes of performing
their duties, the members of the audit committee have the right, at all times, to inspect all our books and financial records
and discuss with management and our auditors any accounts, records and matters relating to our financial statements. The audit
committee is required to meet periodically with management and annually with our auditors.
Our
Board of Directors has determined that we do not presently need an audit committee financial expert on our Board of Directors
carrying out the duties of the audit committee. Our Board of Directors has determined that the cost of hiring a financial expert
to act as one of our directors and to be a member of the audit committee or otherwise perform audit committee functions outweighs
the benefits of having a financial expert on the Board.
EXECUTIVE
COMPENSATION
Summary
Compensation Table
The
following sets forth information with respect to the compensation awarded or paid to our current and former sole officers and
directors for all services rendered in all capacities to us. We do not have any other executive officers and no other individual
received total compensation from us in excess of $100,000 during those years. Pursuant to Item 402(a)(5) of Regulation S-K we
have omitted certain columns from the table since there was no compensation awarded to, earned by or paid to these individuals
required to be reported in such columns in either year.
Name
and Principal Position | |
Year
Ended
November 30, | | |
Salary
($) | | |
Total
($) | |
Gerald
B. Hammack, Chief Executive Officer (1) | |
| 2014 | | |
| N/A | | |
| N/A | |
| |
| 2013 | | |
| N/A | | |
| N/A | |
| |
| | | |
| | | |
| | |
Timothy
Franklin, former Chief Executive Officer (2) | |
| 2014 | | |
| 20,000 | | |
| 20,000 | |
| |
| 2013 | | |
| N/A | | |
| N/A | |
| |
| | | |
| | | |
| | |
Khurram
Shroff, former Chief Executive Officer (3) | |
| 2014 | | |
| - | | |
| - | |
| |
| 2013 | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | |
Mauro
Baessato, former Chief Executive Officer (4) | |
| 2014 | | |
| N/A | | |
| N/A | |
| |
| 2013 | | |
| - | | |
| - | |
(1) |
Gerald
B. Hammack has been our Chairman, President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer,
Secretary, Treasurer and sole director since December 8, 2014. |
|
|
(2) |
Timothy
Franklin was our President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer
and sole director from April 16, 2014 until December 8, 2014. |
|
|
(3) |
Khurram
Shroff was our President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer
and sole director from September 30, 2013 until April 16, 2014. |
|
|
(4) |
Mauro
Baessato was our President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and sole director from
our inception until September 30, 2013. |
Outstanding
Equity Awards at Fiscal Year-End
As
of November 30, 2014, we did not have any outstanding equity awards.
Benefit
Plans
We
do not have any pension plan, profit sharing plan or similar plan for the benefit of our officers, directors or employees. However,
we may establish such plans in the future.
Director
Compensation
We
do not pay our directors any fees for attendance at Board meetings or similar remuneration or reimburse them for any out-of-pocket
expenses incurred by them in connection with our business.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
We
have not entered into any transactions with our officers, directors, persons nominated for these positions, beneficial owners
of 5% or more of our common stock, or family members of those persons wherein the amount involved in the transaction or a series
of similar transactions exceeded the lesser of $120,000 or 1% of the average of our total assets for the last two fiscal years.
Director
Independence
Because
our common stock is not currently listed on a national securities exchange, we currently use the definition in NASDAQ Listing
Rule 5605(a)(2) for determining director independence, which provides that an “independent director” is a person other
than an executive officer or employee of the company or any other individual having a relationship which, in the opinion of the
company’s Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities
of a director. The NASDAQ listing rules provide that a director cannot be considered independent if:
| ● | the
director is, or at any time during the past three years was, an employee of the company; |
| | |
| ● | the
director or a family member of the director accepted any compensation from the company
in excess of $120,000 during any period of 12 consecutive months within the three years
preceding the independence determination (subject to certain exclusions, including, among
other things, compensation for board or board committee service); |
| | |
| ● | a
family member of the director is, or at any time during the past three years was, an
executive officer of the company; |
| | |
| ● | the
director or a family member of the director is a partner in, controlling stockholder
of, or an executive officer of an entity to which the company made, or from which the
company received, payments in the current or any of the past three fiscal years that
exceed 5% of the recipient’s consolidated gross revenue for that year or $200,000,
whichever is greater (subject to certain exclusions); |
| | |
| ● | the
director or a family member of the director is employed as an executive officer of an
entity where, at any time during the past three years, any of the executive officers
of the company served on the compensation committee of such other entity; or |
| | |
| ● | the
director or a family member of the director is a current partner of the company’s
outside auditor, or at any time during the past three years was a partner or employee
of the company’s outside auditor, and who worked on the company’s audit. |
We
have determined that our sole director does not meet this definition of independence due to the fact that he is also our sole
executive officer.
We
do not currently have a separately designated nominating or compensation committee.
LEGAL
PROCEEDINGS
There
are no material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which we are
a party or of which any of our properties is the subject. Our management is not aware of any such legal proceedings contemplated
by any governmental authority against us.
MARKET
PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
General
As
of the date of this Report, we have 63,879,270 shares of common stock issued and outstanding.
Market
Information
There
is a limited public market for our common stock. Our common stock is quoted on the OTC Bulletin Board under the symbol “VRMI”.
Trading in stocks quoted on the OTC Bulletin Board is often thin and is characterized by wide fluctuations in trading prices due
to many factors that may be unrelated to a company’s operations or business prospects. We cannot assure you that there will
be a market in the future for our common stock.
OTC
Bulletin Board securities are not listed or traded on the floor of an organized national or regional stock exchange. Instead,
OTC Bulletin Board securities transactions are conducted through a telephone and computer network connecting dealers in stocks.
OTC Bulletin Board issuers are traditionally smaller companies that do not meet the financial and other listing requirements of
a regional or national stock exchange.
Our
common stock became eligible for quotation on the OTC Bulletin Board on December 6, 2012. The following quotations reflect the
high and low bids for our common stock based on inter-dealer prices, without retail mark-up, mark-down or commission, and may
not represent actual transactions. The high and low bid quotations of our common stock for the periods indicated below are as
follows:
OTC
Bulletin Board |
Quarter
Ended | |
High
($) | | |
Low
($) | |
February
28, 2015 | |
| 2.55 | | |
| 0.31 | |
| |
| | | |
| | |
November
30, 2014 | |
| 0.31 | | |
| 0.31 | |
| |
| | | |
| | |
August
31, 2014 | |
| 0.31 | | |
| 0.31 | |
| |
| | | |
| | |
May
31, 2014 | |
| 0.65 | | |
| 0.30 | |
| |
| | | |
| | |
February
28, 2014 | |
| 0.65 | | |
| 0.65 | |
| |
| | | |
| | |
November
30, 2013 | |
| 0.0085 | | |
| 0.0085 | |
| |
| | | |
| | |
August
31, 2013 | |
| - | | |
| - | |
| |
| | | |
| | |
May
31, 2013 | |
| - | | |
| - | |
| |
| | | |
| | |
February
28, 2013 | |
| - | | |
| - | |
Holders
As
of the date of this Report there are six holders of record of our common stock, one of which is Cede & Co.
Dividends
On
December 3, 2013, our former sole director approved a stock dividend of 59 authorized but unissued shares of our common stock
on each one (1) issued and outstanding share of our common stock. On December 13, 2013, we received approval from the Financial
Industry Regulatory Authority (FINRA) to effect the stock dividend by way of a forward split, and on December 17, 2013, our shareholders
of record on December 16, 2013 received the dividend. As a result of the stock dividend, our issued and outstanding common stock
increased from 4,940,000 shares to 296,400,000 shares.
Other
than as described above, we have never paid dividends on our common stock.
Securities
Authorized for Issuance under Equity Compensation Plans
As
of the date of this Report, we do not have any compensation plans under which our equity securities are authorized for issuance.
We intend to adopt an equity compensation plan in which our directors, officers, employees and consultants will be eligible to
participate. However, no formal steps have been taken as of the date of this Report to adopt such a plan.
RECENT
SALES OF UNREGISTERED SECURITIES
See
the disclosure set forth under Item 3.02 which is incorporated herein by reference. Other than that or as disclosed in in previous
quarterly reports on Form 10-Q or current reports on Form 8-K, we have not issued any equity securities that were not registered
under the Securities Act within the past three years.
DESCRIPTION
OF SECURITIES
Introduction
In
the discussion that follows, we have summarized selected provisions of our amended and restated Articles of Incorporation, our
amended and restated Bylaws and the Nevada Revised Statues (the “NRS”) relating to our common stock. This summary
is not complete. This discussion is subject to the relevant provisions of Nevada law and is qualified in its entirety by reference
to our amended and restated Articles of Incorporation and Bylaws.
Common
Stock
Our
authorized capital consists of 750,000,000 shares of common stock, par value $0.001 per share. As of the date of this Report and
after giving effect to the Acquisition, 63,879,270 shares of our common stock were issued and outstanding.
The
holders of our common stock:
| ● | have
equal ratable rights to dividends from funds legally available if and when declared by
our Board of Directors; |
| ● | are
entitled to share ratably in all of our assets available for distribution to holders
of common stock upon the liquidation, dissolution or winding up of our affairs; |
| ● | do
not have preemptive, subscription or conversion rights and there are no redemption or
sinking fund provisions or rights; and |
| ● | are
entitled to one non-cumulative vote per share on all matters on which stockholders may
vote. |
Preferred
Stock
Our
authorized capital also consists of 10,000,000 shares of shares of “blank check” preferred stock, par value $0.001,
2,000,000 of which have been designated as Series “A” preferred stock. As of the date of this Report, all 2,000,000
shares of the Series “A” preferred stock are issued and outstanding and the remaining 8,000,000 shares of “blank
check” preferred stock have yet to be designated or issued.
The
“blank check” preferred stock may be issued from time to time in one or more series, and our Board of Directors is
authorized to issuance such stock in one or more series and to fix from time to time the number of shares to be included in any
series and the designations, powers, preferences and relative, participating, option or other special rights, and qualifications,
limitations or restrictions thereof, of all shares of such series.
Subject
to the rights of the holders of any series of preferred stock pursuant to the terms of any preferred stock designation, the number
of authorized shares of preferred stock may be increased or decreased (but not below the number of shares thereof then outstanding)
by the affirmative vote of the holders of a majority of our capital stock entitled to vote generally in the election of directors.
The
shares of Series “A” preferred stock carry certain rights and preferences, including that the Series “A”
Preferred Stock may be converted into shares of our common stock on a 10 for one (1) basis at any time after 18 months from the
date of issuance; that each share of Series “A” preferred stock has voting rights and carries a voting weight equal
to 50 shares of common stock; and that in the event of our voluntary or involuntary liquidation, dissolution or winding-up, the
Series “A” preferred stock has a priority on liquidation senior to that of our other preferred stock.
Non-Cumulative
Voting
Holders
of our common stock do not have cumulative voting rights. This means that the holders of more than 50% of the outstanding shares,
when voting for the election of directors, can elect all of the directors to be elected, if they so choose. In that event, the
holders of the remaining shares will not be able to elect any of our directors.
Cash
Dividends
As
of the date of this Report, we have not paid any cash dividends to our stockholders. The declaration of any future cash dividend
will be at the discretion of our Board of Directors and will depend upon our earnings, if any, our capital requirements and financial
position, our general economic conditions, and other pertinent conditions. It is our present intention not to pay any cash dividends
in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.
INDEMNIFICATION
OF DIRECTORS AND OFFICERS
Our
amended and restated Articles of Incorporation provide that we will indemnify 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 (other than an action by or in the right of us) by reason of the fact that he/she is or was our director, officer,
employee or agent, or is or was serving at our request as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him/her in connection with such action, suit or proceeding if he/she acted in
good faith and in a manner he/she reasonably believed to be in or not opposed to our best interests, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his/her conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall
not, of itself, create a presumption that the person did not act in good faith and in a manner which he/she reasonably believed
to be in or not opposed to our best interests, and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his/her conduct was unlawful.
Our
amended and restated Articles of Incorporation also provide that we will indemnify 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, by or in the right of us to procure a judgment
in our favor by reason of the fact that he/she is or was our director, officer, employee or agent, or is or was serving at our
request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys’ fees) actually and reasonably incurred by him/her in connection with the defense
or settlement of such action, suit or proceeding if he/she acted in good faith and in a manner he/she reasonably believed to be
in or not opposed to our best interests, except that no indemnification shall be made in respect of any claim, issue or matter
as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his/her duty
to us unless and only to the extent that the court in which such action, suit or proceeding was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such other court shall deem proper.
We
may pay any expenses incurred in defending a civil or criminal action, suit or proceeding in advance of the final disposition
of such action, suit or proceeding as authorized by our Board of Directors in the specific case upon receipt of an undertaking
by or on behalf of the director, officer, employee or agent to repay such amount unless it shall ultimately be determined that
he/she is entitled to be indemnified by us.
The
indemnification described above is not exclusive of any other rights to which those seeking indemnification may be entitled under
any statute, bylaw, agreement, vote of shareholders or disinterested directors or otherwise, both as to action in his/her official
capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be
a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
Our
amended and restated Bylaws provide for indemnification of the directors, officers and employees in most cases for any liability
suffered by them or arising out of their activities as our directors, officers, and employees if they were not engaged in willful
misfeasance or malfeasance in the performance of his or her duties; provided that in the event of a settlement the indemnification
will apply only when our Board of Directors approves such settlement and reimbursement as being for our best interests. Our Bylaws,
therefore, limit the liability of directors to the maximum extent permitted by Section 78.751 of the NRS.
Our
officers and directors are accountable to us as fiduciaries, which means they are required to exercise good faith and fairness
in all dealings affecting us. In the event that a shareholder believes the officers and/or directors have violated their fiduciary
duties us, the shareholder may, subject to applicable rules of civil procedure, be able to bring a class action or derivative
suit to enforce the shareholder’s rights, including rights under certain federal and state securities laws and regulations
to recover damages from and require an accounting by management. Shareholders who have suffered losses in connection with the
purchase or sale of their interest in us in connection with such sale or purchase, including the misapplication by any such officer
or director of the proceeds from the sale of these securities, may be able to recover such losses from us.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling
persons pursuant to the provisions above or otherwise, we have been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Securities Act, and is, therefore, unenforceable.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
Item
3.02 Unregistered Sales of Equity Securities
See
the disclosure set forth under Item 1.01 which is incorporated herein by reference.
The
shares of our common stock issued to Masamos in connection with the Acquisition were offered and sold in reliance upon the exemption
from registration provided by Rule 903 of Regulation S under the Securities Act (“Regulation S”). Our reliance on
Rule 903 of Regulation S was based on the fact that the shares were sold in an “offshore transaction”, as defined
in Rule 902(h) of Regulation S. We did not engage in any directed selling efforts in the United States in connection with the
sale of the shares, and Masamos was not a U.S. person and did not acquire the shares for the account or benefit of any U.S. person.
Item
5.06 Change in Shell Company Status
Since
we were a shell company prior to the closing of the Acquisition, see the disclosure set forth under Items 1.01 and 2.01 which
is incorporated herein by reference.
Item
9.01 Financial Statements and Exhibits
(a) |
Financial Statements of Business Acquired |
Filed as Exhibit 99.1 to this Report and incorporated
herein by reference are the audited financial statements of Vertitek for the fiscal year ended January 31, 2015. |
(b) |
Pro Forma Financial Information |
Filed as Exhibit 99.2 to
this Report and incorporated herein by reference are our unaudited pro forma financial statements for the year ended November
30, 2014 and for the three months ended February 28, 2015. |
(c) |
Shell Company Transactions |
See Items 9.01(a) and 9.01(b)
and the exhibits referred to therein which are incorporated herein by reference. |
The
Share Exchange Agreement is included as Exhibit 10.1 to this Report.
Exhibit
Number |
|
Exhibit
Description |
|
|
|
3(i).1 |
|
Articles
of Incorporation filed with the Nevada Secretary of State on August 25, 2011 (1) |
|
|
|
3(i).2 |
|
Certificate
of Amendment filed with the Nevada Secretary of State on December 4, 2013 (2) |
|
|
|
3(i).3 |
|
Amended
and Restated Articles of Incorporation filed with the Nevada Secretary of State on December 11, 2014 (3) |
|
|
|
3(i).4 |
|
Certificate
of Designation filed with the Nevada Secretary of State on January 15, 2015 (4) |
|
|
|
3(ii).1 |
|
Bylaws
(1) |
|
|
|
3(ii).2 |
|
Amended
and Restated Bylaws dated December 3, 2013 (2) |
|
|
|
10.1 |
|
Share
Exchange Agreement with Vertitek and Masamos dated January 27, 2015 |
|
|
|
99.1 |
|
Audited
Financial Statements of Vertitek for the year ended January 31, 2015 |
|
|
|
99.2 |
|
Unaudited
Pro Forma Financial Statements for the year ended November 30, 2014 and for the three months ended February 28, 2015 |
(1) |
Incorporated
by reference from our registration statement on Form S-1 filed with the SEC on March 29, 2012. |
|
|
(2) |
Incorporated
by reference from our current report on Form 8-K filed with the SEC on December 9, 2013. |
|
|
(3) |
Incorporated
by reference from our current report on Form 8-K filed with the SEC on December 12, 2014. |
|
|
(4) |
Incorporated
by reference from our current report on Form 8-K filed with the SEC on January 16, 2015. |
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Date: May 28,
2015 |
VALMIE
RESOURCES, INC. |
|
|
|
|
By: |
/s/
Gerald B. Hammack |
|
|
Gerald B. Hammack |
|
|
Chairman, President,
Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer, Director |
AGREEMENT
FOR
THE EXCHANGE OF SECURITIES
BY
AND AMONG
VALMIE
RESOURCES, INC.
(A
NEVADA CORPORATION)
and
VERTITEK,
INC.
(A
WYOMING CORPORATION)
AND
the
shareholder of
VERTITEK,
INC.
INDEX
|
Page |
Cover
page |
i |
|
|
|
ARTICLE
I – Exchange of Securities |
1 |
|
|
|
Exchange
of Securities |
1 |
|
|
|
1.1 |
Issuance of
Securities |
1 |
1.2 |
Exemption from
Registration |
1 |
|
|
|
ARTICLE
II – Representations and Warranties of VERTITEK, INC. |
1 |
|
|
|
Representations
and Warranties of VERTITEK, INC. |
1 |
2.1 |
Organization |
2 |
2.2 |
Capital |
2 |
2.3 |
Subsidiaries |
2 |
2.4 |
Directors and
Executive Officers |
2 |
2.5 |
Financial Statements |
2 |
2.6 |
Absence of
Changes |
2 |
2.7 |
Absence of
Undisclosed Liabilities |
2 |
2.8 |
RESERVED |
3 |
2.9 |
Investigation
of Financial Condition |
3 |
2.10 |
Intellectual
Property Rights |
3 |
2.11 |
Compliance
with Laws |
3 |
2.12 |
Litigation |
3 |
2.13 |
Authority |
3 |
2.14 |
Ability to
Carry Out Obligations |
3 |
2.15 |
Full Disclosure |
4 |
2.16 |
Assets |
4 |
2.17 |
Indemnification |
4 |
2.18 |
Criminal or
Civil Acts |
4 |
2.19 |
Restricted
Securities |
4 |
|
|
|
ARTICLE
III – Representations and Warranties of VALMIE RESOURCES, INC. |
4 |
|
|
|
Representations
and Warranties of VALMIE RESOURCES, INC. |
4 |
3.1 |
Organization |
4 |
3.2 |
Capital |
4 |
3.3 |
Subsidiaries |
5 |
3.4 |
Directors and
Officers |
5 |
3.5 |
Financial Statements |
5 |
3.6 |
Absence of
Changes |
5 |
3.7 |
Absence of
Undisclosed Liabilities |
5 |
3.8 |
RESERVED |
6 |
3.9 |
Investigation
of Financial Condition |
6 |
3.10 |
Intellectual
Property Rights |
6 |
3.11 |
Compliance
with Laws |
6 |
3.12 |
Litigation |
6 |
3.13 |
Authority |
6 |
3.14 |
Ability to
Carry Out Obligations |
6 |
3.15 |
Full Disclosure |
6 |
3.16 |
Assets |
7 |
3.17 |
Indemnification |
7 |
3.18 |
Criminal or
Civil Acts |
7 |
|
|
|
ARTICLE
IV – Covenants Prior to the Closing Date |
7 |
|
|
|
Covenants
Prior to the Closing Date |
7 |
4.1 |
Investigative
Rights |
7 |
4.2 |
Conduct of
Business |
7 |
4.3 |
Confidential
Information |
7 |
4.4 |
Notice of Non-Compliance |
8 |
|
|
|
ARTICLE
V – Conditions Precedent to VALMIE RESOURCES, INC. Performance |
8 |
|
|
|
Conditions
Precedent to VALMIE RESOURCES, INC. Performance |
8 |
5.1 |
Conditions |
8 |
5.2 |
Accuracy of
Representations |
8 |
5.3 |
Performance |
8 |
5.4 |
Absence of
Litigation |
8 |
5.5 |
Corporate Action |
8 |
5.6 |
Acceptance
of Financial Statements |
8 |
|
|
|
ARTICLE
VI – Conditions Precedent to VERTITEK, INC. Performance |
8 |
|
|
|
Conditions
Precedent to VERTITEK, INC. Performance |
8 |
6.1 |
Conditions |
8 |
6.2 |
Accuracy of
Representations |
9 |
6.3 |
Performance |
9 |
6.4 |
Absence of
Litigation |
9 |
6.5 |
Acceptance
of Financial Statements |
9 |
|
|
|
ARTICLE
VII – Closing |
9 |
|
|
|
Closing |
9 |
7.1 |
Closing |
9 |
|
|
|
ARTICLE
VIII – Reserved |
9 |
|
|
|
ARTICLE
IX – Miscellaneous |
10 |
|
|
|
Miscellaneous |
10 |
9.1 |
Captions and
Headings |
10 |
9.2 |
No Oral Change |
10 |
9.3 |
Non-Waiver |
10 |
9.4 |
Time of Essence |
10 |
9.5 |
Entire Agreement |
10 |
9.6 |
Choice of Law |
10 |
9.7 |
Counterparts |
10 |
9.8 |
Notices |
10 |
9.9 |
Binding Effect |
11 |
9.10 |
Mutual Cooperation |
11 |
9.11 |
Finders / Brokers |
11 |
9.12 |
Announcements |
11 |
9.13 |
Expenses |
11 |
9.14 |
Survival of
Representations and Warranties |
11 |
9.15 |
Exhibits |
11 |
9.16 |
Termination,
Amendment and Waiver |
11 |
EXHIBITS
Subscription Agreement |
Exhibit
1.1 |
Financial Statements
of VERTITEK, INC. |
Exhibit
2.5 |
Financial Statements
of VALMIE RESOURCES, INC. |
Exhibit
3.5 |
AGREEMENT
THIS
AGREEMENT (“Agreement”) is made as of January 27, 2015, by and among VALMIE
RESOURCES, INC., a Nevada corporation (“VMRI” or the “Company”),
VERTITEK, INC., a Wyoming corporation (“VERTITEK”),
and MASAMOS SERVICES LTD., the registered holder of 100% of the issued and outstanding equity shares of VERTITEK
(the “SHAREHOLDER”).
WHEREAS,
VMRI desires to acquire all of the issued and outstanding common stock of VERTITEK from the SHAREHOLDER in
exchange for newly issued unregistered shares of common stock of VMRI; and
WHEREAS,
VERTITEK desires to assist VMRI in acquiring all of the issued and outstanding shares of VERTITEK pursuant
to the terms of this Agreement; and
WHEREAS,
the SHAREHOLDER desires to exchange 100% of the issued and outstanding equity shares of VERTITEK held by SHAREHOLDER
(the “Vertitek Shares”) for 1,000,000 shares of the Company’s common stock (the “Purchase
Shares”). Such Purchase Shares to be issued to the SHAREHOLDER in exchange for the Vertitek Shares
(as hereinafter defined).
NOW,
THEREFORE, in consideration of the mutual promises, covenants and representations contained herein, the parties hereto agree as
follows:
ARTICLE
I
Exchange
of Securities
1.1
Issuance of Securities. Subject to the terms and conditions of this Agreement, VMRI agrees to issue and exchange
the Purchase Shares for the Vertitek Shares. Upon the Closing Date of this Agreement (the “Closing
Date”), the Board of Directors of VMRI (the “Board”) shall direct that the Purchase Shares
of VMRI be issued as set forth in Article 1.1 hereof.
1.2
Exemption from Registration. The parties hereto intend that all VMRI common shares to be issued to the SHAREHOLDER
shall be exempt from the registration requirements of the Securities Act of 1933, as amended (the “Act”), pursuant
to Section 4(2) and/or Section 506 of Regulation D of the Act and rules and regulations promulgated there under. In furtherance
thereof, the SHAREHOLDER will execute and deliver to VMRI on the Closing Date a subscription agreement formalizing
this exchange.
ARTICLE
II
Representations
and Warranties of VERTITEK and the SHAREHOLDER
VERTITEK
and the SHAREHOLDER hereby represent and warrant to VMRI that:
2.1
Organization. VERTITEK is a corporation duly organized, validly existing and in good standing under the laws of
Wyoming, has all necessary corporate powers to own its properties and to carry on its business as now owned and operated by it,
and is duly qualified to do business and is in good standing in each of the states where its business requires qualification.
2.2
Capital. There are an aggregate of 1,000,000 shares of VERTITEK shares issued and outstanding. There are no outstanding
subscriptions, options, rights, warrants, debentures, instruments, convertible securities or other agreements or commitments obligating
VERTITEK to issue any additional VERTITEK shares of any class.
2.3
Subsidiaries. VERTITEK does not have any subsidiaries or own any interest in any other enterprise.
2.4
Directors and Executive Officers. The names and titles of the directors and executive officers of VERTITEK are as
follows:
Name |
|
Position |
|
|
|
Sean
Foster |
|
Sole
Officer / Director |
2.5
Financial Statements. On or before the Closing Date, VERTITEK shall provide VMRI with financial statements
of VERTITEK for the period from Incorporation (February 19, 2014) to January 31, 2015 (the “VERTITEK Financial
Statements”). The financial statements are attached hereto as Exhibit 2.5. VERTITEK’s Financial
Statements shall be prepared in accordance with generally accepted accounting principles and practices consistently followed by
VERTITEK throughout the period indicated, and fairly present the financial position of VERTITEK as of the date of
the balance sheet included in the VERTITEK Financial Statements and the results of operations for the period indicated.
2.6
Absence of Changes. Since the Due Diligence review of VERTITIEK was completed, there has not been any material change
in the financial condition or operations of VERTITEK. As used throughout this Agreement, “material” means:
Any change or effect (or development that, insofar as can be reasonably foreseen, is likely to result in any change or effect)
that causes substantial increase or diminution in the business, properties, assets, condition (financial or otherwise) or results
of operations of a party. Taken as a whole, material change shall not include changes in national or international economic conditions
or industry conditions generally; changes or possible changes in statutes and regulations applicable to a party; or the loss of
employees, customers or suppliers by a party as a direct or indirect consequence of any announcement relating to this transaction.
2.7
Absence of Undisclosed Liabilities. As of the date of execution hereof, VERTITEK did not have any material debt,
liability or obligation of any nature, whether accrued, absolute, contingent or otherwise, and whether due or to become due, that
is not reflected in the VERTITEK Financial Statements.
2.8
RESERVED
2.9
Investigation of Financial Condition. Without in any manner reducing or otherwise mitigating the representations contained
herein, VMRI, its legal counsel and accountants shall have the opportunity to meet with VERTITEK’s accountants
and attorneys to discuss the financial condition of VERTITEK during reasonable business hours and in a manner that does
not interfere with the normal operation of VERTITEK’s business. VERTITEK shall make available to VMRI
all books and records of VERTITEK.
2.10
Intellectual Property Rights. VERTITEK owns or has the right to use all trademarks, service marks, trade names,
copyrights and patents material to its business.
2.11
Compliance with Laws. To the best knowledge of VERTITEK and the SHAREHOLDER, VERTITEK has complied
with, and is not in violation of, applicable federal, state or local statutes, laws and regulations, including federal and state
securities laws, except where such non-compliance would not have a material adverse impact upon its business or properties.
2.12
Litigation. VERTITEK is not a defendant in any suit, action, arbitration or legal, administrative or other proceeding,
or governmental investigation which is pending or, to the best knowledge of VERTITEK, threatened against or affecting VERTITEK
or its business, assets or financial condition. VERTITEK is not in default with respect to any order, writ, injunction
or decree of any federal, state, local or foreign court, department, agency or instrumentality applicable to it. VERTITEK
is not engaged in any material litigation to recover monies due to it.
2.13
Authority. The Board of Directors of VERTITEK has authorized the execution of this Agreement and the consummation
of the transactions contemplated herein, and VERTITEK has full power and authority to execute, deliver and perform this
Agreement, and this Agreement is a legal, valid and binding obligation of VERTITEK and is enforceable in accordance with
its terms and conditions. SHAREHOLDER has agreed to and has approved the terms of this Agreement and the exchange of securities
contemplated hereby.
2.14
Ability to Carry Out Obligations. The execution and delivery of this Agreement by VERTITEK and the SHAREHOLDER
and the performance by VERTITEK and the SHAREHOLDER of their obligations hereunder in the time and manner contemplated
will not cause, constitute or conflict with or result in (a) any breach or violation of any of the provisions of or constitute
a default under any license, indenture, mortgage, instrument, article of incorporation, bylaw, or other agreement or instrument
to which VERTITEK is a party, or by which it may be bound, nor will any consents or authorizations of any party other than
those hereto be required, (b) an event that would permit any party to any agreement or instrument to terminate it or to accelerate
the maturity of any indebtedness or other obligation of VERTITEK, or (c) an event that would result in the creation or
imposition of any lien, charge or encumbrance on any asset of VERTITEK.
2.15
Full Disclosure. None of the representations and warranties made by VERTITEK or the SHAREHOLDER herein or
in any exhibit, certificate or memorandum furnished or to be furnished by VERTITEK, or on its behalf, contains or will
contain any untrue statement of material fact or omit any material fact the omission of which would be misleading.
2.16
Assets. VERTITEK’s assets are fully included in Exhibit 2.5 and are not subject to any claims or encumbrances
except as indicated in Exhibit 2.5.
2.17
Indemnification. VERTITEK and the SHAREHOLDER agree to indemnify, defend and hold VMRI harmless against and
in respect of any and all claims, demands, losses, costs, expenses, obligations, liabilities, damages, recoveries and deficiencies,
including interest, penalties and reasonable attorney fees asserted by third parties against VMRI which arise out of, or
result from (i) any breach by VERTITEK or the SHAREHOLDER in performing any of its covenants or agreements under
this Agreement or in any schedule, certificate, exhibit or other instrument furnished or to be furnished by VERTITEK or
the SHAREHOLDER under this Agreement, (ii) a failure of any representation or warranty in this Article II or (iii) any
untrue statement made by VERTITEK or the SHAREHOLDER in this Agreement.
2.18
Criminal or Civil Acts. For the period of five years prior to the execution of this Agreement, no executive officer,
director or principal stockholder of VERTITEK has been convicted of a felony crime, been the subject of a Securities and
Exchange Commission (the “Commission”) or National Association of Securities Dealers (the “NASD”) judgment
or decree, or is currently the subject to any investigation in connection with a Commission or NASD proceeding.
2.19
Restricted Securities. VERTITEK and the SHAREHOLDER acknowledge that all of the VMRI shares issued
by VMRI pursuant to Article 1.1 hereof are restricted securities and none of such securities may be sold or publicly traded
except in accordance with the provisions of the Securities Act of 1933, as amended (the “Act”).
ARTICLE
III
Representations
and Warranties of VMRI
VMRI
represents and warrants to VERTITEK that:
3.1
Organization. VMRI is a corporation duly organized, validly existing and in good standing under the laws of Nevada,
has all necessary corporate powers to carry on its business, and is duly qualified to do business and is in good standing in each
of the states where its business requires qualification.
3.2
Capital. The authorized shares of VMRI consists of (i) 750,000,000 shares of common stock, $0.001 par value, of
which 59,040,000 shares are issued and outstanding as of the Closing Date; and (ii) 10,000,000 shares of preferred stock,
$0.001 par value, of which 2,000,000 shares are issued and outstanding as of the Closing Date.
Following
the issuance of the Purchase Shares as set forth in Article 1.1 hereof, there shall be a total of (i) 60,040,000 shares
of common stock of the Company issued and outstanding; and (ii) 2,000,000 shares of the preferred stock issued and outstanding.
All
of the outstanding common shares prior to the entering into this Agreement are, and all of the Purchase Shares to be issued
as set forth in Article 1.1 hereof, shall be duly and validly issued, fully paid and non-assessable. Other than as set forth herein,
there are no outstanding subscriptions, options, rights, warrants, debentures, instruments, convertible securities or other agreements
or commitments obligating VMRI to issue any additional shares of any class.
3.3
Subsidiaries. VMRI does not have any subsidiaries or own any interest in any other enterprise.
3.4
Directors and Officers. The name and title of the director(s) and executive officer(s) of VMRI are as follows:
Name |
|
Position |
|
|
|
Gerald
Hammack |
|
Chairman
& Chief Executive Officer |
3.5
Financial Statements. On or before the Closing Date, VMRI shall file with the Securities and Exchange Commission
its annual report on Form 10-K which shall include the audited financial statements of VMRI for the two fiscal years ended
November 30, 2014 and November 30, 2013 (the “VMRI Financial Statements”). The VMRI Financial
Statements will be prepared in accordance with generally accepted accounting principles and practices consistently followed
by VMRI throughout the periods indicated, and fairly present the financial position of VMRI as of the date of the
balance sheets included in the VMRI Financial Statements and the results of operations for the periods indicated.
3.6
Absence of Changes. Since November 30, 2014, there has not been any undisclosed material change in the financial condition
or operations of VMRI. As used throughout this Agreement, “material” means: Any change or effect (or development
that, insofar as can be reasonably foreseen, is likely to result in any change or effect) that causes substantial increase or
diminution in the business, properties, assets, condition (financial or otherwise) or results of operations of a party. Taken
as a whole, material change shall not include changes in national or international economic conditions or industry conditions
generally; changes or possible changes in statutes and regulations applicable to a party; or the loss of employees, customers
or suppliers by a party as a direct or indirect consequence of any announcement relating to this transaction.
3.7
Absence of Undisclosed Liabilities. As of the date of execution hereof, VMRI did not have any material debt, liability
or obligation of any nature, whether accrued, absolute, contingent or otherwise, and whether due or to become due, that is not
reflected in the VMRI Financial Statements.
3.8
RESERVED
3.9
Investigation of Financial Condition. Without in any manner reducing or otherwise mitigating the representations contained
herein, VERTITEK, its legal counsel and accountants shall have the opportunity to meet with VMRI’s accountants
and attorneys to discuss the financial condition of VMRI during reasonable business hours and in a manner that does not
interfere with the normal operation of VMRI’s business. VMRI shall make available to VERTITEK all books
and records of VMRI.
3.10
Intellectual Property Rights. VMRI has no trademarks, service marks, trade names, copyrights or patents material
to its business.
3.11
Compliance with Laws. To the best of VMRI’s knowledge, VMRI has complied with, and is not in violation
of, applicable federal, state or local statutes, laws and regulations, including federal and state securities laws, except where
such non-compliance would not have a material adverse impact upon its business or properties.
3.12
Litigation. VMRI is not a defendant in any suit, action, arbitration or legal, administrative or other proceeding,
or governmental investigation which is pending or, to the best knowledge of VMRI, threatened against or affecting VMRI
or its business, assets or financial condition. VMRI is not in default with respect to any order, writ, injunction
or decree of any federal, state, local or foreign court, department, agency or instrumentality applicable to it. VMRI is
not engaged in any material litigation to recover monies due to it.
3.13
Authority. The Board of VMRI has authorized the execution of this Agreement and the consummation of the transactions
contemplated herein, and VMRI has full power and authority to execute, deliver and perform this Agreement, and this Agreement
is a legal, valid and binding obligation of VMRI and is enforceable in accordance with its terms and conditions.
3.14
Ability to Carry Out Obligations. The execution and delivery of this Agreement by VMRI and the performance by VMRI
of its obligations hereunder in the time and manner contemplated will not cause, constitute or conflict with or result in
(a) any breach or violation of any of the provisions of or constitute a default under any license, indenture, mortgage, instrument,
article of incorporation, bylaw, or other agreement or instrument to which VMRI is a party, or by which it may be bound,
nor will any consents or authorizations of any party other than those hereto be required, (b) an event that would permit any party
to any agreement or instrument to terminate it or to accelerate the maturity of any indebtedness or other obligation of VMRI,
or (c) an event that would result in the creation or imposition of any lien, charge or encumbrance on any asset of VMRI.
3.15
Full Disclosure. None of the representations and warranties made by VMRI herein or in any exhibit, certificate or
memorandum furnished or to be furnished by VMRI, or on its behalf, contains or will contain any untrue statement of material
fact or omit any material fact the omission of which would be misleading.
3.16
Assets. VMRI assets are fully included in the VMRI Financial Statements and are not subject to any claims
or encumbrances except as indicated in the VMRI Financial Statements.
3.17
Indemnification. VMRI agrees to indemnify, defend and hold VERTITEK and the SHAREHOLDER harmless against
and in respect of any and all claims, demands, losses, costs, expenses, obligations, liabilities, damages, recoveries and deficiencies,
including interest, penalties and reasonable attorney fees asserted by third parties against VERTITEK or the SHAREHOLDER
which arise out of, or result from (i) any breach by VMRI in performing any of its covenants or agreements under this
Agreement or in any schedule, certificate, exhibit or other instrument furnished or to be furnished by VMRI under this
Agreement, (ii) a failure of any representation or warranty in this Article III or (iii) any untrue statement made by VMRI
in this Agreement.
3.18
Criminal or Civil Acts. For the period of five years prior to the execution of this Agreement, no executive officer,
director or principal stockholder of VMRI has been convicted of a felony crime, been the subject of a Commission or NASD
judgment or decree, or is currently the subject to any investigation in connection with a Commission or NASD proceeding.
ARTICLE
IV
Covenants
Prior to the Closing Date
4.1
Investigative Rights. Prior to the Closing Date, each party shall provide to the other party, and such other party’s
counsel, accountants, auditors and other authorized representatives, full access during normal business hours and upon reasonable
advance written notice to all of each party’s properties, books, contracts, commitments and records for the purpose of examining
the same. Each party shall furnish the other party with all information concerning each party’s affairs as the other party
may reasonably request. If, during the investigative period one party learns that a representation of the other party was not
accurate, no such claim may be asserted by the party so learning that a representation of the other party was not accurate.
4.2
Conduct of Business. Prior to the Closing Date, each party shall conduct its business in the normal course and shall
not sell, pledge or assign any assets without the prior written approval of the other party, except in the normal course of business.
Neither party shall amend its Articles of Incorporation or Bylaws (except as may be described in this Agreement), declare dividends,
redeem or sell stock or other securities. Neither party shall enter into negotiations with any third party or complete any transaction
with a third party involving the sale of any of its assets or the exchange of any of its common stock.
4.3
Confidential Information. Each party will treat all non-public, confidential and trade secret information received
from the other party as confidential, and such party shall not disclose or use such information in a manner contrary to the purposes
of this Agreement. Moreover, all such information shall be returned to the other party in the event this Agreement is terminated.
4.4
Notice of Non-Compliance. Each party shall give prompt notice to the other party of any representation or warranty
made by it in this Agreement becoming untrue or inaccurate in any respect or the failure by it to comply with or satisfy in any
material respect any covenant, condition or agreement to be complied with or satisfied by it under this Agreement.
ARTICLE
V
Conditions
Precedent to VMRI’s Performance
5.1
Conditions. VERTITEK’s obligations hereunder shall be subject to the satisfaction at or before the Closing Date
of all the conditions set forth in this Article V. VMRI may waive any or all of these conditions in whole or in part
without prior notice; provided, however, that no such waiver of a condition shall constitute a waiver by VMRI of any other
condition of or any of VMRI’s other rights or remedies, at law or in equity, if VERTITEK shall be in default
of any of its representations, warranties or covenants under this Agreement.
5.2
Accuracy of Representations. Except as otherwise permitted by this Agreement, all representations and warranties by VERTITEK
in this Agreement or in any written statement that shall be delivered to VMRI by VERTITEK under this Agreement
shall be true and accurate on and as of the Closing Date as though made at that time.
5.3
Performance. VERTITEK shall have performed, satisfied and complied with all covenants, agreements and conditions
required by this Agreement to be performed or complied with by it on or before the Closing Date.
5.4
Absence of Litigation. No action, suit or proceeding, including injunctive actions, before any court or any governmental
body or authority, pertaining to the transaction contemplated by this Agreement or to its consummation, shall have been instituted
or threatened against VERTITEK on or before the Closing Date.
5.5
Corporate Action. VERTITEK shall have obtained the approval of the SHAREHOLDER for the transaction contemplated
by this Agreement.
ARTICLE
VI
Conditions
Precedent to VERTITEK’s Performance
6.1
Conditions. VMRI’s obligations hereunder shall be subject to the satisfaction at or before the Closing
Date of all the conditions set forth in this Article VI. VERTITEK may waive any or all of these conditions in whole
or in part without prior notice; provided, however, that no such waiver of a condition shall constitute a waiver by VERTITEK
of any other condition of or any of VERTITEK’s rights or remedies, at law or in equity, if VMRI shall
be in default of any of its representations, warranties or covenants under this Agreement.
6.2
Accuracy of Representations. Except as otherwise permitted by this Agreement, all representations and warranties by VMRI
in this Agreement or in any written statement that shall be delivered to VERTITEK by VMRI under this Agreement
shall be true and accurate on and as of the Closing Date as though made at that time.
6.3
Performance. VMRI shall have performed, satisfied and complied with all covenants, agreements and conditions required
by this Agreement to be performed or complied with by it on or before the Closing Date.
6.4
Absence of Litigation. No action, suit or proceeding before any court or any governmental body or authority, pertaining
to the transaction contemplated by this Agreement or to its consummation, shall have been instituted or threatened against VMRI
on or before the Closing Date.
6.5
Acceptance of Financial Statements. VMRI shall have reviewed and in its sole discretion accepted, prior to the Closing
Date, the VERTITEK’s Financial Statements as set forth in Exhibit 2.5.
ARTICLE
VII
Closing
7.1
Closing. The closing of this Agreement shall be held at the offices of VMRI or at any mutually agreeable place on
or prior to March 31, 2015, unless extended by mutual agreement. At the closing:
(a)
SHAREHOLDER shall deliver to VMRI (i) the Vertitek Shares representing 100% of the outstanding shares of
VERTITEK, (ii) an assignment of all of the VERTITEK’s shares to VMRI, and (iii) signed minutes of its
directors approving this Agreement.
(b)
VMRI shall deliver to SHAREHOLDER (i) certificates representing the Purchase Shares, and (ii) signed minutes
of its directors approving this Agreement.
ARTICLE
VIII
RESERVED
ARTICLE
IX
Miscellaneous
9.1
Captions and Headings. The article and Section headings throughout this Agreement are for convenience and reference only
and shall not define, limit or add to the meaning of any provision of this Agreement.
9.2
No Oral Change. This Agreement and any provision hereof may not be waived, changed, modified or discharged orally, but
only by an agreement in writing signed by the party against whom enforcement of any such waiver, change, modification or discharge
is sought.
9.3
Non-Waiver. The failure of any party to insist in any one or more cases upon the performance of any of the provisions,
covenants or conditions of this Agreement or to exercise any option herein contained shall not be construed as a waiver or relinquishment
for the future of any such provisions, covenants or conditions. No waiver by any party of one breach by another party shall be
construed as a waiver with respect to any other subsequent breach.
9.4
Time of Essence. Time is of the essence of this Agreement and of each and every provision hereof.
9.5
Entire Agreement. This Agreement contains the entire Agreement and understanding between the parties hereto and supersedes
all prior agreements and understandings.
9.6
Choice of Law. This Agreement and its application shall be governed by the laws of the state of Nevada.
9.7
Counterparts. This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same instrument.
9.8
Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be
deemed to have been duly given on the date of service if served personally on the party to whom notice is to be given, or on the
third day after mailing if mailed to the party to whom notice is to be given, via facsimile or by first class mail, registered
or certified, postage prepaid, and properly addressed as follows:
VERTITEK: |
|
VERTITEK,
INC. |
|
|
1712 Pioneer Ave |
|
|
Cheyenne, WY 82001 |
|
|
|
VMRI: |
|
VALMIE
RESOURCES, INC. |
|
|
999
18th Street |
|
|
Suite 3000 |
|
|
Denver, CO 80202 |
9.9
Binding Effect. This Agreement shall inure to and be binding upon the heirs, executors, personal representatives, successors
and assigns of each of the parties to this Agreement.
9.10
Mutual Cooperation. The parties hereto shall cooperate with each other to achieve the purpose of this Agreement and shall
execute such other and further documents and take such other and further actions as may be necessary or convenient to effect the
transaction described herein.
9.11
Finders/ Brokers. There are no finders or brokers in connection with this transaction.
9.12
Announcements. The parties will consult and cooperate with each other as to the timing and content of any public announcements
regarding this Agreement.
9.13
Expenses. Each party will bear their own expenses, including legal fees incurred in connection with this Agreement. The
SHAREHOLDER will not be responsible for any costs incurred in connection with the transaction contemplated by this Agreement.
9.14
Survival of Representations and Warranties. The representations, warranties, covenants and agreements of the parties set
forth in this Agreement or in any instrument, certificate, opinion or other writing providing for in it, shall survive the Closing
Date.
9.15
Exhibits. As of the execution hereof, the parties have provided each other with the exhibits described herein. Any material
changes to the exhibits shall be immediately disclosed to the other party.
9.16
Termination, Amendment and Waiver.
(a)
Termination. This Agreement may be terminated at any time prior to the Closing Date, whether before or after approval
of matters presented in connection with the share exchange by the shareholders of VMRI or by the SHAREHOLDER:
|
(1) |
By
mutual written consent of VERTITEK and VMRI; |
|
|
|
|
(2) |
By
either VERTITEK or VMRI; |
|
(i) |
If
any court of competent jurisdiction or any governmental, administrative or regulatory authority, agency or body shall have
issued an order, decree or ruling or taken any other action permanently enjoining, restraining or otherwise prohibiting the
transactions contemplated by this Agreement; or |
|
|
|
|
(ii) |
If
the transaction shall not have been consummated on or before February 15, 2015 unless the failure to consummate the transaction
is the result of a material breach of this Agreement by the party seeking to terminate this Agreement. |
(3)
By VERTITEK, if VMRI breaches any of its representations or warranties hereof or fails to perform in any material
respect any of its covenants, agreements or obligations under this Agreement; and
(4)
By VMRI, if VERTITEK breaches any of its representations or warranties hereof or fails to perform in any material
respect any of its covenants, agreements or obligations under this Agreement.
(b)
Effect of Termination. In the event of termination of this Agreement by either VMRI or VERTITEK, as provided
herein, this Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of VERTITEK
or VMRI, and such termination shall not relieve any party hereto for any intentional breach prior to such termination
by a party hereto of any of its representations or warranties or any of its covenants or agreements set forth in this Agreement.
(c)
Extension; Waiver. At any time prior to the Closing Date, the parties may, to the extent legally allowed, (a) extend
the time for the performance of any of the obligation of the other acts of the other parties, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered pursuant hereto or waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of a party to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed on behalf of such party. The failure of any party to this Agreement to assert
any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights.
(d)
Procedure for Termination, Amendment, Extension or Waiver. A termination of this Agreement, an amendment of this Agreement
or an extension or waiver shall, in order to be effective, require in the case of VERTITEK or VMRI, action by its
respective Board of Directors or the duly authorized designee of such Board of Directors.
(signature
page follows)
In
witness whereof, the parties hereto have executed this Agreement concerning the exchange of securities on the dates noted below.
VERTITEK,
INC.
By: |
/s/
Sean Foster |
|
|
Sean
Foster, Sole Officer and Director |
|
Date:
March 30, 2015
VALMIE
RESOURCES, INC.
By: |
/s/
Gerald Hammack |
|
|
Gerald
Hammack, Chairman and CEO |
|
Date: March
30, 2015
MASAMOS
SERVICES LIMITED
By: |
/s/
Dimitriy Protskiv |
|
|
Dimitriy Protskiv,
Director |
|
Date: March
27, 2015
EXHIBIT
1.1
SUBSCRIPTION
FOR SHARES
TO: | Valmie
Resources Inc. (the “Company”) |
AND TO: | The
Sole Director Thereof |
The
undersigned hereby subscribes for 1,000,000 shares of the Company’s common stock in exchange for 1,000,000 shares of Vertitek,
Inc. owned by the undersigned, pursuant to the Share Exchange Agreement by and between the Company, Vertitek, Inc. and the undersigned
to which this subscription for shares is attached.
Dated as
of March 31, 2015.
MASAMOS
SERVICES LIMITED |
|
|
|
Per: |
|
|
|
/s/
Dimitriy Protskiv |
|
Dimitriy Protskiv |
|
VERTITEK
INC.
CONTENTS
|
Page |
|
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
F-1 |
|
|
FINANCIAL STATEMENTS |
|
|
|
Balance
Sheet as of January 31, 2015 |
F-2 |
|
|
Statement
of Operations
|
F-3 |
from Inception, February 19, 2014, to January 31,
2015 |
|
|
|
Statement
of Changes in Stockholders’ Deficit |
F-4 |
from Inception, February 19, 2014, to January 31,
2015 |
|
|
|
Statement
of Cash Flows |
F-5 |
from Inception, February 19, 2014, to January 31,
2015 |
|
|
|
NOTES
TO FINANCIAL STATEMENTS |
F-6
– F-8 |
|
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Russell
E. Anderson, CPA
Russ
Bradshaw, CPA
William
R. Denney, CPA
Kristofer
Heaton, CPA |
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Officers
and Directors
Vertitek
Inc.
Lake
Charles, Louisiana
We
have audited the accompanying balance sheet of Vertitek Inc. as of January 31, 2015, and the related statements of operations,
changes in stockholders’ (deficit), and cash flows for the period from inception on February 19, 2014 to January
31, 2015. These financial statements are the responsibility of the Company’s management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States of
America). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform,
an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly,
we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In
our opinion, the financial statements referred to above present fairly, in all material respects, the financial position
of Vertitek Inc. as of January 31, 2015, and the results of its operations, and its cash flows for the period from inception
on February 19, 2014 to January 31, 2015, in conformity with accounting principles generally accepted in the United States
of America.
The
accompanying financial statements referred to above have been prepared assuming the Company will continue as a going concern.
As discussed in Note 2 to the financial statements, the Company has incurred losses since inception and has not generated
revenues from its planned principal operations. These factors raise substantial doubt that the Company will be able to
continue as a going concern. The financial statements do not include any adjustments that might result from the outcome
of this uncertainty.
|
|
|
/s/
Anderson Bradshaw PLLC |
|
|
|
Salt
Lake City, Utah
March
19, 2015 |
|
|
|
|
|
5296
S. Commerce Dr
Suite
300
Salt
Lake City, Utah 84107
USA
(T)
801.281.4700
(F)
801.281.4701
abcpas.net |
|
|
VERTITEK
INC.
BALANCE
SHEET
ASSETS | |
| | |
| |
| January
31, 2015 | |
| |
| | |
CURRENT ASSETS | |
| | |
Cash | |
$ | 21,251 | |
Total Current Assets | |
| 21,251 | |
| |
| | |
FIXED ASSETS | |
| | |
Prototype Development (at cost) | |
| 3,141 | |
Total Fixed Assets | |
| 3,141 | |
| |
| | |
TOTAL ASSETS | |
$ | 24,392 | |
| |
| | |
LIABILITIES AND STOCKHOLDERS’
DEFICIT | |
| | |
| |
| | |
CURRENT LIABILITIES | |
| | |
Short Term Advances | |
$ | 23,500 | |
Accounts Payable - Related Party | |
| 2,416 | |
Total Current Liabilities | |
| 25,916 | |
| |
| | |
TOTAL LIABILITIES | |
$ | 25,916 | |
| |
| | |
STOCKHOLDERS’ DEFICIT | |
| | |
Common Stock, $0.001 par value, 1 million shares authorized; 1,000,000
and 1,000,000 shares issued and outstanding, respectively | |
| 1,000 | |
Additional Paid In Capital | |
| - | |
Retained Deficit | |
| (2,524 | ) |
| |
| | |
TOTAL STOCKHOLDERS’ DEFICIT | |
| (1,524 | ) |
| |
| | |
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | |
$ | 24,392 | |
VERTITEK
INC.
STATEMENT
OF OPERATIONS
| |
Period from Inception | |
| |
February 19, 2014 to | |
| |
| January
31, 2015 | |
| |
| | |
REVENUES | |
$ | - | |
| |
| | |
COST OF REVENUES | |
| - | |
| |
| | |
GROSS PROFIT | |
| - | |
| |
| | |
EXPENSES | |
| | |
General and Administrative Expenses | |
| 1,024 | |
Compensation Expense | |
| 1,500 | |
| |
| | |
LOSS FROM OPERATIONS | |
$ | (2,524 | ) |
| |
| | |
NET LOSS | |
$ | (2,524 | ) |
| |
| | |
NET LOSS PER SHARE: | |
| | |
| |
| | |
Common Stock: | |
| | |
Basic and Diluted Net Loss Per
Share | |
$ | (0.01 | ) |
| |
| | |
Denominator for Basic and Diluted
Net Loss Per Share Weighted Average Number of Common Shares Outstanding | |
| | |
| |
| 205,202 | |
VERTITEK
INC.
STATEMENT
OF CHANGES IN STOCKHOLDERS’ DEFICIT
| |
| | |
| | |
Additional | | |
| | |
Total | |
| |
Common
Stock | | |
Paid-In | | |
Retained | | |
Stockholders’ | |
| |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | |
INCEPTION —
February 19, 2014 | |
| — | | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Issuance
of Shares for Services | |
| 1,000,000 | | |
| 1,000 | | |
| - | | |
| - | | |
| 1,000 | |
Net
Loss | |
| — | | |
| — | | |
| — | | |
| (2,524 | ) | |
| (2,524 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
BALANCE —
January 31, 2015 | |
| 1,000,000 | | |
| 1,000 | | |
$ | - | | |
$ | (2,524 | ) | |
$ | (1,524 | ) |
VERTITEK
INC.
STATEMENT
OF CASH FLOWS
| |
Period from Inception | |
| |
February 14, 2014 to | |
CASH FLOWS FROM OPERATING ACTIVITIES | |
January
31, 2015 | |
| |
| | |
Net Loss | |
$ | (2,524 | ) |
| |
| | |
Changes in operating assets and liabilities: | |
| | |
Common shares issued for services | |
| 1,000 | |
Increase in Accounts Payable -
Related Party | |
| 2,416 | |
| |
| | |
NET CASH PROVIDED BY
(USED IN) OPERATING ACTIVITIES | |
| 892 | |
| |
| | |
CASH (USED IN) INVESTING
ACTIVITIES | |
| | |
Investment in Prototype (at cost) | |
| (3,141 | ) |
NET CASH (USED IN) INVESTING ACTIVITIES | |
| (3,141 | ) |
| |
| | |
CASH FLOWS FROM FINANCING
ACTIVITIES | |
| | |
Proceeds from Short Term Advances | |
| 23,500 | |
NET CASH PROVIDED BY FINANCING
ACTIVITIES | |
| 23,500 | |
| |
| | |
NET INCREASE IN CASH | |
| 21,251 | |
| |
| | |
CASH, Beginning of Year | |
| - | |
| |
| | |
CASH, End of Year | |
$ | 21,251 | |
| |
| | |
Supplementary Cash Flow Information | |
| | |
Cash paid for: | |
| | |
Interest | |
$ | - | |
Income taxes | |
$ | - | |
VERTITEK
INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE 1 –
DESCRIPTION OF COMPANY
Landstar
Leasing, Inc. (“Landstar”) was incorporated pursuant to the Wyoming Business Corporation Act on February 19, 2014.
On November 19, 2014, Landstar changed its name to Vertitek Inc. (the “Company”).
Since
its inception, the Company has focused on the development of unmanned vehicle software, hardware and cloud services for a wide
range of commercial applications around the globe. The Company’s mission is to become one of the world’s leading suppliers
of unmanned vehicles and related high tech equipment and services.
To
date, the Company has not generated revenues or earnings as a result of its activities.
The
accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability
and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of
the Company to continue as a going concern.
NOTE
2 – GOING CONCERN AND MANAGEMENT PLANS
The
Company sustained a loss of approximately $1,500 for the period from inception, February 19, 2014 through January
31, 2015, and as of January 31, 2015, had an accumulated deficit
of approximately $2,500.
These
factors raise a 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 from the outcome of this uncertainty.
The
Company does not have the resources at this time to repay its credit and debt obligations, make any payments in the form of dividends
to its shareholders or fully implement its business plan. Without additional capital, the Company will not be able to remain in
business.
In
addition to operational expenses, as the Company executes its business plan, it is incurring expenses related to the ongoing development
of prototypes and other systems that will need to be developed before the Company can fully execute upon its business plan. In
order to finance these expenditures, the Company has raised capital in the form of debt, which will have to be repaid, as discussed
in detail below. The Company has depended on advances from a potential merger candidate to finance its operations. Should the
merger not occur as planned the Company will be unable to repay these obligations.
Management
anticipates that significant dilution will occur as the result of any future sales of the Company’s common stock and this
will reduce the value of its outstanding shares. The Company cannot project the future level of dilution that will be experienced
by investors as a result of its future financings, but it will significantly affect the value of its shares.
Management
believes that the Company’s projects and initiatives will be successful and will provide significant profit to the Company,
which will be used to finance the Company’s future growth. However, there can be no assurances that the Company’s
planned activities will be successful, or that the Company will ultimately attain profitability. The Company’s long-term
viability depends on its ability to obtain adequate sources of debt or equity funding to meet current commitments and fund the
continuation of its business operations and the ability of the Company to ultimately achieve adequate profitability and cash flows
from operations to sustain its operations.
VERTITEK
INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE 3 –
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION – The
Company’s financial statements are presented in accordance with accounting principles generally accepted in the United States
of America (“U.S. GAAP”). In the opinion of management, all adjustments, consisting of normal recurring adjustments,
necessary for a fair presentation of financial position and the result of operations for the periods presented have been reflected
herein. The accompanying financial statements have been prepared solely from the accounts of the Company.
USE OF ESTIMATES – The preparation
of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenue and expenses during the reporting period. Actual results could differ.
CASH
AND CASH EQUIVALENTS – The Company considers all highly liquid debt instruments and other short-term investments with maturity
of three months or less, when purchased, to be cash equivalents. The Company maintains cash and cash equivalent balances at one
financial institution that is insured by the FDIC.
FIXED
ASSETS – The Company’s fixed assets are stated at cost, less accumulated depreciation. Depreciation will be provided
using the straight-line method over the estimated useful lives of the related assets. Costs of maintenance and repairs will be
charged to expense as incurred. The Company is currently developing a prototype drone which will be depreciated over its useful
life after it is completed.
RECOVERABILITY
OF LONG-LIVED ASSETS – The Company reviews the recoverability of long-lived assets on a periodic basis whenever events and
changes in circumstances have occurred which may indicate a possible impairment. The assessment for potential impairment will
be based primarily on the Company’s ability to recover the carrying value of its long-lived assets from expected future
cash flows from its operations on an undiscounted basis. If such assets are determined to be impaired, the impairment recognized
is the amount by which the carrying value of the assets exceeds the fair value of the assets. Fixed assets to be disposed of by
sale will be carried at the lower of the then current carrying value or fair value less estimated costs to sell.
FAIR
VALUE OF FINANCIAL INSTRUMENTS – The carrying amount reported in the balance sheet for cash and cash equivalents, accounts
payable, and accrued expenses approximate fair value because of the immediate or short-term maturity of these financial instruments.
The Company does not utilize derivative instruments.
INCOME
TAXES – The Company accounts for income taxes utilizing the liability method of accounting. Under the liability method,
deferred taxes are determined based on differences between financial statement and tax bases of assets and liabilities at enacted
tax rates in effect in years in which differences are expected to reverse. Valuation allowances are established, when necessary,
to reduce deferred tax assets to amounts that are expected to be realized.
REVENUE
RECOGNITION – The Company will generate revenue from sales in accordance with Accounting Standards Codification 605. The
criteria for recognition are as follows:
|
1 |
Persuasive evidence
of an arrangement exists; |
|
2. |
Delivery has occurred
or services have been rendered; |
|
3. |
The seller’s
price to the buyer is fixed or determinable, and |
|
4. |
Collectibility
is reasonably assured. |
RECENTLY
ADOPTED AND RECENTLY ENACTED ACCOUNTING PRONOUNCEMENTS
Recent
accounting pronouncements issued by the FASB (including its EITF), the AICPA, and the SEC did not or are not believed by management
to have a material impact on the Company’s present or future financial statements.
VERTITEK
INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE 4 – SHORT
TERM ADVANCES
On January 20, 2015, the Company
executed a letter of intent with Valmie Resources, Inc. (the “Valmie LOI”) which envisions the Company being acquired
by Valmie in a share exchange transaction. Pursuant to the terms of the Valmie LOI, a credit line in the amount of $150,000 has
been made available to the Company in order to begin implementing its business plan prior to the intended acquisition. The advances
are non-interest bearing and would be immediately due and payable should the share exchange contemplated in the Valmie LOI not
be effectuated. As of January 31, 2015, the principal balance was $23,500.
NOTE 5 –
INCOME TAXES
Deferred
income taxes are determined using the liability method for the temporary differences between the financial reporting basis and
income tax basis of the Company’s assets and liabilities. Deferred income taxes are measured based on the tax rates expected
to be in effect when the temporary differences are included in the Company’s tax return. Deferred tax assets and liabilities
are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts
of assets and liabilities and their respective tax bases.
As
of January 31, 2015, there is no provision for income taxes, current or deferred.
Deferred tax assets: | |
| 2015 | |
Net operating loss carry-forwards | |
$ | 883 | |
Valuation allowance | |
| (883 | ) |
Net deferred tax asset | |
$ | — | |
At
January 31, 2015 the Company had net operating loss carry forwards in the amount of $2,524 available to offset future taxable
income through 2035. The Company established valuation allowances equal to the full amount of the deferred tax assets due to the
uncertainty of the utilization of the operating losses in future periods. Tax years from inception are open to examination by
taxing authorities.
NOTE 6 –
STOCKHOLDERS’ DEFICIT
During
the year ended January 31, 2015, the Company issued 1,000,000 shares of its common stock to an entity for services rendered during
the formation of the Company. The shares were issued at par value ($0.001) and as such an expense of $1,000 was recognized upon
the date of issuance.
The
Company has authorized capital consisting of 1,000,000 shares of common stock, of which 1,000,000 shares of common stock were
outstanding on January 31, 2015.
NOTE
7 – RELATED PARTY TRANSACTIONS
At
January 31, 2015, $2,416 was owed to the Company’s President for amounts advanced to, or paid on behalf of, the Company.
In addition, the President received $1,500 for services rendered. The Company’s sole shareholder received 1,000,000 shares
of common stock at $0.001 per share ($1,000) for services rendered in forming the Company.
NOTE
8 – EXCHANGE AGREEMENT
On January 27, 2015, the Company
entered into an Agreement for the Exchange of Securities (the “Exchange Agreement”) with Valmie Resources, Inc., a
publicly held Nevada corporation (“Valmie”), and the sole shareholder of the Company. Upon closing of the transaction
contemplated under the Exchange Agreement the Company will be acquired by, and become a subsidiary of, Valmie.
NOTE
9 – SUBSEQUENT EVENTS
The
Company has evaluated subsequent events from the balance sheet date through the date the accompanying financial statements were
issued and determined there are no events to disclose.
Valmie
Resources, Inc.
INTRODUCTION
TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEAR ENDED NOVEMBER 30, 2014 AND FOR THE THREE MONTHS ENDED FEBRUARY 28, 2015
The
following unaudited pro forma balance sheets and income statements and the explanatory notes give effect to the acquisition by
Valmie Resources, Inc. of Vertitek Inc. on March 31, 2015.
The
pro forma consolidated balance sheets and income statements and explanatory notes are based on the estimates and assumptions set
forth in the explanatory notes.
The
pro forma statements have been prepared as if the acquisition had occurred on the first day of each period presented.
This
pro forma consolidated financial data is provided for comparative purposes only, and does not purport to be indicative of the
actual financial position or results of operations had the acquisition occurred at the beginning of the periods presented, nor
is it necessarily indicative of the results of future operations.
Valmie
Resources, Inc.
Unaudited
Pro
forma balance sheet
| |
Valmie Resources, Inc. | | |
Vertitek Inc. | | |
|
Adjustments | | |
| |
Consolidated | |
| |
Nov
30, 2014 | | |
Jan
31, 2015 | | |
|
Entries | | |
| |
Totals | |
| |
| | | |
| | | |
| | | |
| |
| | |
Cash and cash equivalents | |
$ | 12,565 | | |
$ | 21,251 | | |
$ | (23,500 | ) | |
a | |
$ | 10,316 | |
| |
| | | |
| | | |
| | | |
| |
| | |
Prototype development (at cost) | |
| - | | |
| 3,141 | | |
| - | | |
| |
| 3,141 | |
Goodwill | |
| - | | |
| - | | |
| 2,748,024 | | |
b | |
| 2,748,024 | |
| |
$ | 12,565 | | |
$ | 24,392 | | |
$ | 2,724,524 | | |
| |
$ | 2,761,481 | |
| |
| | | |
| | | |
| | | |
| |
| | |
Accounts payable & accrued liabilities | |
$ | 83,250 | | |
$ | - | | |
$ | - | | |
| |
$ | 83,250 | |
Short term advances - Valmie | |
| - | | |
| 23,500 | | |
| (23,500 | ) | |
a | |
| - | |
Due to related party | |
| 44,809 | | |
| 2,416 | | |
| - | | |
| |
| 47,225 | |
| |
| | | |
| | | |
| | | |
| |
| | |
Promissory notes | |
| 67,805 | | |
| - | | |
| - | | |
| |
| 67,805 | |
| |
| | | |
| | | |
| | | |
| |
| | |
Share capital - common | |
| 296,400 | | |
| 1,000 | | |
| 1,000 | | |
b | |
| 297,400 | |
| |
| | | |
| | | |
| (1,000 | ) | |
c | |
| | |
| |
| | | |
| | | |
| | | |
| |
| | |
Additional paid-in capital | |
| (155,657 | ) | |
| - | | |
| 2,747,024 | | |
b | |
| 2,592,367 | |
| |
| | | |
| | | |
| 1,000 | | |
c | |
| | |
Deficit - opening | |
| (159,887 | ) | |
| - | | |
| - | | |
| |
| (159,887 | ) |
| |
| | | |
| | | |
| | | |
| |
| | |
Income (loss) | |
| (164,155 | ) | |
| (2,524 | ) | |
| - | | |
| |
| (166,679 | ) |
| |
$ | 12,565 | | |
$ | 24,392 | | |
$ | 2,724,524 | | |
| |
$ | 2,761,481 | |
a
|
To
record $23,500 cash advanced to Vertitek Inc. subsequent to November 30, 2014 ($23,500 cash advance eliminated on consolidation)
|
|
|
b
|
Common
stock issued to acquire Vertitek Inc. - 1,000,000 shares with a par value of $1,000 |
Purchase price (1,000,000 shares @ $2.77 per share) | |
| | | |
$ | 2,770,000 | |
| |
| | | |
| | |
Net assets acquired | |
| | | |
| | |
Cash and cash equivalents | |
$ | 21,251 | | |
| | |
Prototype development (at cost) | |
| 3,141 | | |
| | |
Due to related party | |
| (2,416 | ) | |
| (21,976 | ) |
| |
| | | |
| | |
Goodwill | |
| | | |
| 2,748,024 | |
| |
| | | |
| | |
Common stock - par value | |
| | | |
| (1,000 | ) |
| |
| | | |
| | |
Additional paid-in capital | |
| | | |
$ | 2,747,024 | |
c
|
Eliminate Vertitek
$1,000 common stock on consolidation |
Valmie
Resources, Inc.
Unaudited
Pro
forma income statement
For
the year ended November 30, 2014
| |
Valmie Resources, Inc. | | |
Vertitek Inc. | | |
|
Adjustments
| | |
Consolidated | |
| |
Nov
30, 2014 | | |
Jan
31, 2015 | | |
|
Entries | | |
Totals | |
| |
| | |
| | |
|
| | |
| |
Revenue | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
| |
| | | |
| | | |
| | | |
| | |
General & administrative | |
| 5,815 | | |
| 1,024 | | |
| - | | |
| 6,839 | |
Management fees | |
| 20,000 | | |
| - | | |
| - | | |
| 20,000 | |
Professional fees | |
| 136,415 | | |
| - | | |
| - | | |
| 136,415 | |
Transfer agent fees | |
| 1,925 | | |
| - | | |
| - | | |
| 1,925 | |
Compensation expense | |
| - | | |
| 1,500 | | |
| - | | |
| 1,500 | |
| |
| | | |
| | | |
| | | |
| | |
Total expenses | |
$ | 164,155 | | |
$ | 2,524 | | |
$ | - | | |
$ | 166,679 | |
| |
| | | |
| | | |
| | | |
| | |
Net income (loss) | |
$ | (164,155 | ) | |
$ | (2,524 | ) | |
$ | - | | |
$ | (166,679 | ) |
| |
| | | |
| | | |
| | | |
| | |
Basic and diluted loss per common share | |
$ | 0.00 | | |
| | | |
| | | |
$ | 0.00 | |
| |
| | | |
| | | |
| | | |
| | |
Weighted average number of common shares outstanding | |
| 296,400,000 | | |
| | | |
| | | |
| 297,400,000 | |
Valmie
Resources, Inc.
Unaudited
Pro
forma balance sheet
| |
Valmie Resources, Inc. | | |
Vertitek Inc. | | |
Adjustments
| |
| |
Consolidated | |
| |
Feb
28, 2015 | | |
Jan
31, 2015 | | |
Entries | |
| |
Totals | |
| |
| | |
| | |
| |
| |
| |
Cash and cash equivalents | |
$ | 5,277 | | |
$ | 21,251 | | |
$ | 2,000 | |
a | |
$ | 28,528 | |
Prepaid expenses | |
| 350 | | |
| - | | |
| - | |
| |
| 350 | |
Due from intercompany | |
| 25,500 | | |
| - | | |
| (25,500 | ) |
b | |
| - | |
| |
| | | |
| | | |
| | |
| |
| | |
Prototype Development (at cost) | |
| - | | |
| 3,141 | | |
| - | |
| |
| 3,141 | |
Goodwill | |
| - | | |
| - | | |
| 2,748,024 | |
c | |
| 2,748,024 | |
| |
$ | 31,127 | | |
$ | 24,392 | | |
$ | 2,724,524 | |
| |
$ | 2,780,043 | |
| |
| | | |
| | | |
| | |
| |
| | |
Accounts payable & accrued liabilities | |
$ | 30,321 | | |
$ | - | | |
$ | | |
| |
$ | 30,321 | |
Short term advances - Valmie | |
| - | | |
| 23,500 | | |
| 2,000 | |
a | |
| - | |
| |
| | | |
| | | |
| (25,500 | ) |
b | |
| | |
| |
| | | |
| | | |
| | |
| |
| | |
Due to related party | |
| 44,809 | | |
| 2,416 | | |
| - | |
| |
| 47,225 | |
| |
| | | |
| | | |
| | |
| |
| | |
Promissory notes | |
| 274,616 | | |
| - | | |
| - | |
| |
| 274,616 | |
| |
| | | |
| | | |
| | |
| |
| | |
Share capital - preferred | |
| 2,000 | | |
| - | | |
| - | |
| |
| 2,000 | |
Share capital - common | |
| 59,040 | | |
| 1,000 | | |
| 1,000 | |
c | |
| 60,040 | |
| |
| | | |
| | | |
| (1,000 | ) |
d | |
| | |
| |
| | | |
| | | |
| | |
| |
| | |
Additional paid-in capital | |
| 79,703 | | |
| - | | |
| 2,747,024 | |
c | |
| 2,827,727 | |
| |
| | | |
| | | |
| 1,000 | |
d | |
| | |
| |
| | | |
| | | |
| | |
| |
| | |
Deficit - opening | |
| (324,042 | ) | |
| - | | |
| - | |
| |
| (324,042 | ) |
| |
| | | |
| | | |
| | |
| |
| | |
Income (loss) | |
| (135,320 | ) | |
| (2,524 | ) | |
| - | |
| |
| (137,844 | ) |
| |
$ | 31,127 | | |
$ | 24,392 | | |
$ | 2,724,524 | |
| |
$ | 2,780,043 | |
a | To
record $2,000 cash in transit from Valmie Resources, Inc. |
| |
b | To eliminate cash advances on consolidation |
| |
c | Common stock issued to acquire Vertitek Inc. - 1,000,000
shares with a par value of $1,000 |
Purchase price (1,000,000 shares @ $2.77 per share) |
|
| | | |
$ | 2,770,000 | |
|
|
| | | |
| | |
Net assets acquired |
|
| | | |
| | |
Cash and cash equivalents |
|
$ | 21,251 | | |
| | |
Prototype development (at cost) |
|
| 3,141 | | |
| | |
Due to related party |
|
| (2,416 | ) | |
| (21,976 | ) |
|
|
| | | |
| | |
Goodwill |
|
| | | |
| 2,748,024 | |
|
|
| | | |
| | |
Common stock - par value |
|
| | | |
| (1,000 | ) |
|
|
| | | |
| | |
Additional paid-in capital |
|
| | | |
$ | 2,747,024 | |
d | Eliminate
Vertitek $1,000 common stock on consolidation |
Valmie
Resources, Inc.
Unaudited
Pro
forma income statement
For
the three months ended February 28, 2015
| |
Valmie
Resources, Inc. | | |
Vertitek Inc. | | |
|
Adjustments
| |
| |
Consolidated | |
| |
Feb 28, 2015 | | |
Jan 31, 2015 | | |
|
Entries | |
| |
Totals | |
| |
| | | |
| | | |
| | |
| |
| | |
Revenue | |
$ | - | | |
$ | - | | |
$ | - | |
| |
$ | - | |
| |
| | | |
| | | |
| | |
| |
| | |
General & administrative | |
| 7,003 | | |
| 1,024 | | |
| - | |
| |
| 8,027 | |
Management fees | |
| 11,000 | | |
| - | | |
| - | |
| |
| 11,000 | |
Professional fees | |
| 110,060 | | |
| - | | |
| - | |
| |
| 110,060 | |
Transfer agent fees | |
| 446 | | |
| - | | |
| - | |
| |
| 446 | |
Compensation expense | |
| - | | |
| 1,500 | | |
| - | |
| |
| 1,500 | |
| |
| | | |
| | | |
| | |
| |
| | |
Total expenses | |
$ | 128,509 | | |
$ | 2,524 | | |
$ | - | |
| |
$ | 131,033 | |
| |
| | | |
| | | |
| | |
| |
| | |
Interest | |
$ | (6,811 | ) | |
$ | - | | |
$ | - | |
| |
$ | (6,811 | ) |
| |
| | | |
| | | |
| | |
| |
| | |
Net income (loss) | |
$ | (135,320 | ) | |
$ | (2,524 | ) | |
$ | - | |
| |
$ | (137,844 | ) |
| |
| | | |
| | | |
| | |
| |
| | |
Basic and diluted loss per common share | |
$ | 0.00 | | |
| | | |
| | |
| |
$ | 0.00 | |
| |
| | | |
| | | |
| | |
| |
| | |
Weighted average number of common shares outstanding | |
| 59,040,000 | | |
| | | |
| | |
| |
| 60,040,000 | |
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