VMRI Valmie Res Inc (CE)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM S-1

 

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

 

 

 

Commission File Number: 333-180424

 

VALMIE RESOURCES, INC.

(Exact Name of Registrant as Specified in its Charter)

 

Nevada		3721		45-3124748
(State or Other Jurisdiction of		(Primary Standard Industrial		(IRS Employer
Incorporation or Organization)		Classification Code Number)		Identification Number)

 

		National Registered Agents Inc.
1001 S Dairy Ashford Road, Suite 100		311 South Division Street
Houston, TX 77077		Carson City, NV 89703
(713) 595-6675		(775) 888-4070
(Address, including zip code, and telephone number, including area code, of registrant’s executive office)		(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

Please send copies of all correspondence to:

 

Christopher Little		Samuel Whitley
Bacchus Law Corporation		Whitley LLP Attorneys at Law
925 West Georgia Street, Suite 1820	&	11767 Katy Freeway, Suite 425
Vancouver, British Columbia Canada V6C 3L2		Houston, Texas 77079
Phone: (604) 632-1281		Phone: (281) 206-0433
Fax: (604) 632-1370		Fax: (866) 512-7794

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement is declared effective

 

If the securities being registered herein will be sold by the security shareholders on a delayed or continuous basis pursuant to Rule 415 of the Securities Act of 1933 please check the following box. [X]

 

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [  ]

 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [  ]

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [  ]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b2 of the Exchange Act.

 

Large accelerated filer	[  ]	Accelerated filer	[  ]
Non-accelerated filer	[  ]	Smaller reporting company	[X]

 

CALCULATION OF REGISTRATION FEE

 

Title of Each Class Of Securities to be Registered			Amount to be Registered (1)				Proposed Maximum Aggregate Offering Price per share (2)				Proposed Maximum Aggregate Offering Price (2)				Amount of Registration fee
Common Stock, $0.001 par value			14,839,270			$	0.29			$	4,303,388.30			$	500.05

 

(1)

As further discussed herein, this registration statement registers for resale up to 14,839,270 shares of common stock, par value $0.001 per share, of the registrant, as follows: (a) 3,839,270 shares previously issued in private placement transactions, (b) 1,000,000 shares issued pursuant to the acquisition of Vertitek Inc., and (c) 10,000,000 shares which represent the number of shares that the registrant may put to Tuverga Finance Ltd. (“Tuverga”) pursuant to the terms of an Equity Investment Agreement between Tuverga and the registrant dated August 20, 2015. In the event of stock splits, stock dividends or similar transactions involving the common stock, the number of shares registered shall, unless otherwise expressly provided, automatically be deemed to cover the additional securities to be offered or issued pursuant to Rule 416 under the Securities Act of 1933, as amended (the “Securities Act”).

 

(2)

Estimated pursuant to Rule 457(c) under the Securities Act solely for the purpose of computing the amount of the registration fee based on the average of the high and low prices reported on OTC Markets on August 28, 2015, which was $0.29.

 

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH SECTION 8(a), MAY DETERMINE.

 

 

 

The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the U.S. Securities and Exchange Commission (“SEC”) is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

PRELIMINARY PROSPECTUS

 

SUBJECT TO COMPLETION, DATED SEPTEMBER 2, 2015

 

 

 

14,839,270 SHARES OF COMMON STOCK

 

The selling shareholders identified in this prospectus may offer and sell up to 14,839,270 shares of our common stock consisting of (a) 3,839,270 shares previously issued in private placement transactions, (b) 1,000,000 shares issued pursuant to our acquisition of Vertitek Inc., and (c) 10,000,000 shares (the “Tuverga Shares”) which represent the number of shares which we may put to Tuverga Finance Ltd. (“Tuverga”). The Tuverga Shares are subject to the terms of an Equity Investment Agreement between us and Tuverga dated August 20, 2015 (the “Equity Investment Agreement”) pursuant to which we have the right to “put” to Tuverga (the “Put Right”) up to $2.5 million in shares of our common stock.

 

We are not selling any shares of our common stock in this offering and will not receive any proceeds from this offering or from the resale of the Tuverga Shares. However, we will receive proceeds from the sale of shares to Tuverga pursuant to the Equity Investment Agreement. When we sell shares to Tuverga, the per share purchase price that Tuverga will pay to us will be determined in accordance with a formula set forth in the Equity Investment Agreement. Generally, with respect to each sale to Tuverga, Tuverga will pay us a per share purchase price equal to fifty percent (50%) of the volume weighted average price of our common stock during the three (3) consecutive trading day period immediately preceding the date of delivery of our request for funds.

 

Tuverga is an “underwriter” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”) in connection with the resale of our common stock under the Equity Investment Agreement.

 

The selling shareholders may offer the shares covered by this prospectus at fixed prices, at prevailing market prices at the time of sale, at varying prices or negotiated prices, in negotiated transactions, or in trading markets for our common stock. We will bear all costs associated with the registration of the shares covered by this prospectus; provided, however, we will not be required to pay any underwriters’ discounts or commissions relating to the securities covered by the registration statement.

 

We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act, sometimes called the JOBS Act. For more information, see “Risk Factors”, starting on page 8.

 

Our common stock trades on the OTC Markets under the symbol “VMRI.” The closing price of our common stock on the OTC Markets on September 1, 2015, was $0.31 per share.

 

THE PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY READ AND CONSIDER THE SECTION OF THIS PROSPECTUS ENTITLED “RISK FACTORS” BEGINNING ON PAGE 8 BEFORE BUYING ANY SHARES OF OUR COMMON STOCK.

 

NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

 

 

TABLE OF CONTENTS

 

	PAGE
Prospectus Summary	3
Special Note Regarding Forward-Looking Statements	3
The Offering	5
Risk Factors	8
Business Description	13
Description of Property	19
Legal Proceedings	19
Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	24
Use of Proceeds	24
Dilution	24
Selling Shareholders	24
Plan of Distribution	25
Description of Securities	27
Interests of Named Experts and Counsel	29
Market for Common Equity and Related Stockholder Matters	29
Directors, Executive Officers, Promoters and Control Persons	30
Executive Compensation	32
Security Ownership of Certain Beneficial Owners and Management	33
Certain Relationships and Related Party Transactions	34
Disclosure of Commission Position on Indemnification for Securities Act Liabilities	35
Reports to Security Holders	35
Where You Can Find More Information	35
Stock Transfer Agent	35
Dealer Prospectus Delivery Obligation	35
Financial Statements	36

 

This prospectus is part of a registration statement we filed with the SEC. Under this registration process, the selling shareholders may, from time to time, offer and sell up to 14,839,270 shares of our common stock, as described in this prospectus, in one or more offerings. This prospectus provides you with a general description of the common stock the selling shareholders may offer. You should read this prospectus carefully before making an investment decision.

 

You may only rely on the information contained in this prospectus or that we have referred you to. We have not authorized anyone to provide you with additional or different information. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities other than the shares of our common stock offered by this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any common stock in any circumstances or any jurisdiction in which such offer or solicitation is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front cover of this prospectus regardless of the time of delivery of this prospectus or any sale of our common stock. The rules of the SEC may require us to update this prospectus in the future.

 

As used in this prospectus, the terms “we,” “our,” “us,” the “Company” and similar terms refer to Valmie Resources, Inc. and its subsidiaries, unless the context indicates otherwise.

 

 

PROSPECTUS SUMMARY

 

The following summary highlights material information contained in this prospectus. This summary does not contain all of the information you should consider before investing in the securities. Before making an investment decision, you should read the entire prospectus carefully, including the risk factors section, the financial statements and the notes to the financial statements. You should also review the other available information referred to in the section entitled “Where You Can Find More Information” in this prospectus and any amendment or supplement hereto.

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

Information included or incorporated by reference in this prospectus may contain forward-looking statements. This information may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “may,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project” or the negative of these words or other variations on these words or comparable terminology.

 

The forward-looking statements contained in this prospectus are based on current expectations and beliefs concerning future developments and the potential effects on the parties and the transaction. There can be no assurance that future developments actually affecting us will be those anticipated. These developments may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements.

 

The forward-looking statements made in this prospectus relate only to events or information as of the date on which the statements are made in this prospectus. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this prospectus and the documents we refer to in this prospectus and have filed as exhibits to this prospectus completely and with the understanding that our actual future results may be materially different from what we expect.

 

Overview

 

We were incorporated pursuant to the laws of the State of Nevada on August 26, 2011. We have one wholly owned subsidiary, Vertitek Inc. (“Vertitek”), a Wyoming corporation. 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, the landowner notified us 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 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.

 

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 a 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 Drone^SM is a multi-rotor platform 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 Vertitek 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 a share exchange agreement with Vertitek and the sole shareholder of Vertitek, Masamos Services Ltd., a Cypriot corporation (“Masamos”) on substantially the same terms as the LOI. On March 31, 2015, 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. As a result, Vertitek became our wholly owned subsidiary.

 

As of the date hereof, we have 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 Drone^SM.

 

Where You Can Find Us

 

Our principal executive office is located at 1001 S Dairy Ashford Road, Suite 100, Houston, TX 77077 and our telephone number is (713) 595-6675. Our website address is www.valmie.com.

 

 

THE OFFERING

 

The Issuer		Valmie Resources, Inc.
Shares being Offered		Up to 14,839,270 shares of common stock, $0.001 par value. Our common stock is described in further detail in the section of this prospectus titled “Description of Securities.”
Shares Outstanding Before the Offering		There are 64,092,035 shares of common stock issued and outstanding as of the date of this prospectus (which includes 4,839,270 previously issued and outstanding shares being registered hereunder).
Shares Outstanding After the Offering		74,092,035 shares, assuming all 10,000,000 shares being registered hereunder pursuant to the Equity Investment Agreement are sold.
Registration Costs		We estimate our total costs relating to the registration herein shall be approximately $17,000.
Use of Proceeds		We received net proceeds of $383,927 from the sale of promissory notes, the conversion of which into our common stock resulted in the issuance of 3,839,270 shares. We may also receive up to $2.5 million in proceeds from the sale of our common stock pursuant to the Equity Investment Agreement. We intend to use all proceeds for general corporate and working capital purposes. See “Use of Proceeds” for a complete description.
Trading Market		Our common stock is traded on the OTC Markets under the symbol “VMRI.”
Risk Factors		An investment in our common stock involves a high degree of risk. You should carefully consider the risk factors set forth under “Risk Factors” on page 6 and the other information contained in this prospectus before making an investment decision regarding our common stock.

 

 

Background of the Offering

 

The Private Placement Transactions

 

From our inception to the period ended June 30, 2014, our former sole officer and director, Khurram Shroff, made certain unsecured non-interest bearing advances to us in the original principal amount of $33,927. These advances were subsequently assigned to Dome Capital LLC, a non-affiliated third party (“Dome”). On March 31, 2015, the Company and Dome entered into a debt conversion agreement pursuant to which the Company issued 339,270 shares of its common stock to Dome in consideration for the cancellation of the debt.

 

During the period from August 8, 2014 to March 20, 2015, we entered into a series of promissory notes with Shield Investments Inc. (“Shield”) in the aggregate principal amount of $275,000 plus simple interest at an annual interest rate of 15%. These notes were 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 Company on the date of the note or thereafter acquired, and all proceeds thereof. On March 31, 2015, the Company and Shield entered into a debt conversion agreement pursuant to which the Company issued 2,750,000 shares of its common stock to Shield in consideration for the cancellation of the debt. Upon the issuance of such shares, Shield agreed to waive any then due and payable interest. As a result of the conversion, Shield released all security interests it previously held in the Company’s assets.

 

On November 24, 2014, we entered into a promissory note with Tuverga in the principal amount of $75,000 plus simple interest at an annual interest rate of 15%. This note was 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 Company on the date of the note or thereafter acquired, and all proceeds thereof. On March 31, 2015, the Company and Tuverga entered into a debt conversion agreement pursuant to which the Company issued 750,000 shares of its common stock to Tuverga in consideration for the cancellation of the debt. Upon the issuance of such shares, Tuverga agreed to waive any then due and payable interest. As a result of the conversion, Tuverga released all security interests it previously held the Company’s assets.

 

We issued the foregoing shares in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act. Our reliance on Section 4(a)(2) was based on the fact that none of the issuances involved a “public offering” and each of the debtors provided representations to us that they acquired the shares for investment purposes and not with a view to the distribution thereof in a transaction that would violate the Securities Act or the securities laws of any state of the United States or any other applicable jurisdiction.

 

The Vertitek Acquisition

 

On January 20, 2015, we entered into 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 a share exchange agreement with Vertitek and the sole shareholder of Vertitek, Masamos, on substantially the same terms as the LOI. On March 31, 2015, 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.

 

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.

 

 

The Equity Investment Agreement and Registration Rights Agreement

 

We entered into the Equity Investment Agreement with Tuverga on August 20, 2015. Pursuant to the Equity Investment Agreement, Tuverga is irrevocably committed to purchase up to $2.5 million of our common stock over the course of 24 months. The aggregate number of shares issuable by us and purchasable by Tuverga under the Equity Investment Agreement is limited by the dollar amount sold, in this instance no more than $2.5 million, and will depend upon the trading price of our shares.

 

We may draw on the Equity Investment Agreement from time to time, as and when we determine appropriate in accordance with the terms and conditions therein. In order to draw on the Equity Investment Agreement, we must send Tuverga a notice that we intend to sell shares to Tuverga (an “Advance Notice”). Tuverga is irrevocably obligated to purchase the shares that we “put” to Tuverga (up to $2.5 million in total), as long as we are in compliance with the requirements of the Equity Investment Agreement. These requirements are generally that we are in compliance with our obligations under federal securities laws. The maximum amount that we are entitled to receive in any one advance is the greater of (i) 100% of the average daily volume of the common stock for the three (3) consecutive trading days prior to the date of delivery of any Advance Notice, multiplied by the volume weighted average price for such trading days (the “Market Price”) or (ii) $100,000. The purchase price shall be set at fifty percent (50%) of the Market Price during the three (3) consecutive trading days immediately preceding the advance notice date (the “Pricing Period”). There are restrictions applied on days between the date of any Advance Notice and the closing date with respect to each particular advance. During such time, we are not entitled to deliver another Advance Notice.

 

If the Company uses the full amount available under the Equity Investment Agreement, and assuming each advance is based on the closing market price of the Company’s common stock on August 28, 2015 ($0.29 per share), Tuverga would receive 10,000,000 shares of our common stock. In return, we would receive $1,450,000 (10,000,000 x ($0.29 x 50%)). This would represent approximately 13.5% of our total issued and outstanding shares of common stock based on the 64,092,035 issued and outstanding shares as at September 1, 2015, plus the 10,000,000 shares that could be issued to Tuverga. However, pursuant to the terms of the Equity Investment Agreement, Tuverga’s stock ownership is limited to 4.99% at any given time. The Company has chosen to register a maximum of 10,000,000 shares under the Equity Investment Agreement in order to limit potential dilution to existing shareholders.

 

In connection with the Equity Investment Agreement, we also entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with Tuverga. Pursuant to the Registration Rights Agreement, we are obligated to file a registration statement with the SEC covering the shares of the common stock underlying the Equity Investment Agreement within 15 days after the execution of the Equity Investment Agreement. In addition, we are obligated to use all commercially reasonable efforts to have the registration statement declared effective by the SEC within 90 days after the date the registration statement is filed and maintain the effectiveness of such registration statement until the earlier to occur of the date on which (a) Tuverga has sold all of the Tuverga Shares or (b) the Company has no right to sell any additional Tuverga Shares under the Equity Investment Agreement.

 

As we draw down on the Equity Investment Agreement, shares of our common stock will be sold into the market by Tuverga. The sale of these additional shares could cause our stock price to decline. In turn, if the stock price declines and we issue more Advance Notices, more shares will come into the market, which could cause a further drop in the stock price. You should be aware that there is an inverse relationship between the market price of our common stock and the number of shares to be issued under the Equity Investment Agreement. If our stock price declines, we will be required to issue a greater number of shares under the Equity Investment Agreement. We have no obligation to utilize the full amount available under the Equity Investment Agreement. While the Company believes it is likely that it will use a significant portion of the Equity Investment Agreement, it intends to request advances under the Equity Investment Agreement only as needed to meet immediate capital requirements that are not met with other sources of capital. Accordingly, the Company limited the amount of the Equity Investment Agreement to $2,500,000, which we believe is sufficient to finance the Company’s operations over the period covered by the Equity Investment Agreement.

 

As further disclosed herein, we previously issued a promissory note to Tuverga in the amount of $75,000, which was subsequently converted into 750,000 shares of our common stock that are also being registered hereunder.

 

 

RISK FACTORS

 

An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and the other information in this prospectus before investing in our common stock. If any of the following risks occur, our business, operating results and financial condition could be seriously harmed. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment.

 

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 Drone^SM or both, but still fail to achieve commercial success for a number of reasons, including the following:

 

	●	failure to obtain the required regulatory approvals for their use;
	●	prohibitive production costs;
	●	competing products;
	●	lack of product innovation;
	●	ineffective distribution and marketing;
	●	insufficient cooperation from our partners; and
	●	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 Drone^SM 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 may be permitted to our officers, directors or control persons, we have been advised by 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 Holdings & Investments Ltd. 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 Holdings & Investments Ltd. (“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 60.9% 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 a broker-dealer 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.

 

Risks Related to this Offering

 

We are registering the resale of 4,839,270 shares of common stock that have been issued to Tuverga and other shareholders.

 

We are registering the resale of 14,839,270 shares of common stock under the registration statement of which this prospectus forms a part. Of this amount, 4,839,270 shares have already been issued to shareholders. We will not receive any of the proceeds from the selling shareholders’ resale of these shares. The selling shareholders’ sale of these shares into the public market could depress the market price of our common stock.

 

We are registering the resale of a maximum of 10,000,000 shares of common stock that may be issued to Tuverga under the Equity Investment Agreement. The resale of such shares by Tuverga could depress the market price of our common stock.

 

We are registering the resale of a maximum of 14,839,270 shares of common stock under the registration statement of which this prospectus forms a part. Of these shares, 10,000,000 may be issued to Tuverga under the Equity Investment Agreement. The sale of these shares into the public market by Tuverga could depress the market price of our common stock. As of September 1, 2015, there were 64,092,035 shares of our common stock issued and outstanding. The sale of those additional shares into the public market by Tuverga could further depress the market price of our common stock.

 

Existing stockholders could experience substantial dilution upon the issuance of common stock pursuant to the Equity Investment Agreement.

 

The Equity Investment Agreement contemplates our issuance of shares of common stock to Tuverga, subject to certain restrictions and obligations. If the terms and conditions of the Equity Investment Agreement are satisfied, and we choose to exercise our rights under the Equity Investment Agreement to the fullest extent permitted, our existing stockholders’ ownership will be diluted by such sales.

 

Tuverga will pay less than the then-prevailing market price for our common stock under the Equity Investment Agreement.

 

The common stock to be issued to Tuverga pursuant to the Equity Investment Agreement will be purchased at a 50% discount to the volume weighted average price of our common stock during the three consecutive trading day period immediately preceding the date of delivery of an advance notice by us to Tuverga, subject to certain exceptions. Therefore, Tuverga has a financial incentive to sell our common stock upon receiving the shares to realize the profit equal to the difference between the discounted price and the market price. If Tuverga sells the shares, the price of our common stock could decrease.

 

 

We may not be able to access sufficient funds under the Equity Investment Agreement when needed.

 

Our ability to issue advance notices to Tuverga and obtain funds under the Equity Investment Agreement is limited by the terms and conditions in the Equity Investment Agreement, including restrictions on when we may exercise our rights, restrictions on the amount we may request from Tuverga at any one time (which is determined in part by the trading volume of our common stock), and a limitation on our ability to issue shares to Tuverga to the extent that it would cause Tuverga to beneficially own more than 4.99% of our outstanding shares.

 

BUSINESS DESCRIPTION

 

Overview

 

We were incorporated pursuant to the laws of the State of Nevada on August 26, 2011. We have one wholly owned subsidiary, Vertitek. 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, the landowner notified us 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 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.

 

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 a 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 is currently developing the commercial V-1 Drone^SM. The V-1 Drone^SM has a multi-rotor platform and 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, Masamos, on January 20, 2015 we entered into 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 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. As a result, Vertitek became our wholly owned subsidiary.

 

 

As of the date hereof, we have 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 Drone^SM.

 

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.

 

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 effectuated 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 FINRA to effectuate 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 effectuated 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 Holdings & Investments Ltd., 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.

 

On July 15, 2015, we entered into an asset purchase agreement with Gerald B. Hammack, our sole officer and director, pursuant to which we acquired all of the right, title and interest in and to the intellectual property relating to the AIMD platform from Mr. Hammack in consideration for the issuance of $100,000 worth of our common stock to Mr. Hammack on that date at a deemed price of $0.47 per share. As a result, Mr. Hammack received an aggregate of 212,765 shares of our common stock.

 

The Vertitek Acquisition

 

On the Closing Date, we completed the Vertitek 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 Drone^SM, 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 Drone^SM 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. In addition, 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 Drone^SM. 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 Drone^SM 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 Drone^SM

 

 

The following are the hardware specifications for the V-1 Drone^SM:

 

	●	fully autonomous 32 bit Pixhawk flight controller
	●	lightweight customized carbon fiber frame
	●	high capacity lithium polymer batteries
	●	high voltage 20 amp brushless speed controllers
	●	large 17” carbon fiber propellers
	●	available customized sensor packages

 

To date we have built and tested approximately 10 prototypes of the V-1 Drone^SM. Mr. Hammack is allowing us the use of 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 Drone^SM prototype is constructed mostly from readily available components. When we begin to manufacture the V-1 Drone^SM 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 within 24 months, we will be actively marketing our V-1 Drone^SM for sale to commercial customers. In order to effectively sell the V-1 Drone^SM, 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 which 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 Drone^SM, 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 from the following companies, among others:

 

 

Hardware Vendors

 

	●	Parrot Industries
	●	PrecisionHawk
	●	DJI Innovations
	●	Helico Aerospace Industries

 

Software Solutions Providers

 

	●	PrecisionHawk
	●	AirWare
	●	DroneCode
	●	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:

 

	●	legal fees related to the preparation and filing of a patent application;
	●	legal fees related to the defense of a patent or patent application; and
	●	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 hereof; 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 as well as our collaboration on the V-1 Drone^SM. 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 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 are anticipating to utilize 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 the 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 to tomorrow’s advanced UAV systems and technologies.

 

Employees

 

As of the date hereof, 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.

 

DESCRIPTION OF PROPERTY

 

Our principal executive office is located at 1001 S Dairy Ashford Road, Suite 100, Houston, TX 77077 and our telephone number is (713) 595-6675. Our website address is www.valmie.com.

 

LEGAL PROCEEDINGS

 

We do not know of any material, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered beneficial shareholders are an adverse party or have a material interest adverse to us.

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Our financial statements are stated in United States Dollars (USD or US$) and are prepared in accordance with United States generally accepted accounting principles.

 

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 financial statements, including the notes thereto, that appear in the registration statement of which this prospectus forms a part.

 

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

 

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.

 

 

Three Months ended May 31, 2015 and 2014

 

Expenses

 

During the three months ended May 31, 2015, we incurred $88,406 in operating expenses, including $58,400 in professional fees, $17,299 in general and administrative expenses, $11,000 in management fees and $1,707 in transfer agent fees. During the same period in fiscal 2014, we incurred $16,638 in operating expenses, including $14,679 in professional fees, $1,284 in general and administrative expenses and $675 in transfer agent fees. The $71,768 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 May 31, 2015, our general and administrative expenses and management fees also increased due to the general increase in our operations in advance of and subsequent to the acquisition of Vertitek.

 

During the three months ended May 31, 2015, we also incurred a $10,404,422 loss on the settlement of debt as offset by $8,001 in interest income, whereas we did not incur any such loss or income during the same period in fiscal 2014. The loss on the settlement of debt was entirely due to the issuances of common stock to various creditors that we completed on April 6, 2015, including 3,500,000 shares pursuant to the settlement of various promissory notes at a deemed price of $0.10 per share, which was well below the market price of our common stock on that day.

 

Net Loss

 

During the three months ended May 31, 2015, we incurred a net loss of $10,484,827, whereas we incurred a net loss of $16,638 during the same period in fiscal 2014. Our basic and diluted net loss per share during those periods was $0.17 and $0.00, respectively.

 

Six Months ended May 31, 2015 and 2014

 

Expenses

 

During the six months ended May 31, 2015, we incurred $216,915 in operating expenses, including $168,460 in professional fees, $24,302 in general and administrative expenses, $22,000 in management fees and $2,153 in transfer agent fees. During the same period in fiscal 2014, we incurred $34,433 in operating expenses, including $32,274 in professional fees, $1,284 in general and administrative expenses and $875 in transfer agent fees. The $182,482 increase in our operating expenses between the two periods was therefore largely attributable to the increases in our professional fees and operations as described above.

 

Net Loss

 

During the six months ended May 31, 2015, we incurred a net loss of $10,620,147, whereas we incurred a net loss of $34,433 during the same period in fiscal 2014. Our basic and diluted net loss per share during those periods was $0.09 and $0.00, respectively.

 

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 and transfer agent expenses. In particular, the significant increase in our professional fees during the most 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 $Nil.

 

Liquidity and Capital Resources

 

As of May 31, 2015

 

As of May 31, 2015, we had $35,197 in cash and cash equivalents, $35,547 in current assets, $2,838,383 in total assets, $55,930 in current liabilities, $72,699 in total liabilities, a working capital deficit of $20,383 and a retained deficit of $10,944,189.

 

During the six months ended May 31, 2015, we used $244,532 in net cash on operating activities and our accounts payable decreased by $27,420. During the same period in fiscal 2014, we used $11,511 in net cash on operating activities, our accounts payable increased by $17,922 and our prepaid expenses decreased by $5,000. The majority of our spending on operating activities for the six months ended May 31, 2015 was attributable to our net loss as described above, as adjusted for the loss on the settlement of debt and 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 six months ended May 31, 2015, we used $32,836 in net cash on investing activities, substantially 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 six months ended May 31, 2015, we received $300,000 from financing activities, all of which was in the form of proceeds from promissory notes. During the same period in fiscal 2014, we received $11,511 from financing activities, all of which was in the form of proceeds from a related party.

 

During the six months ended May 31, 2015, our cash position increased by $22,632 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 Drone^SM. 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 businesses activities. We cannot guarantee that additional funding will be available on favorable 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 of May 31, 2015, we had a working capital deficit of $20,383 and a retained deficit of $10,944,189, and as of 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 and 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 amount 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.

 

 

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

None.

 

USE OF PROCEEDS

 

We may receive up to $2,500,000 in proceeds from the sale of securities to Tuverga pursuant to the Equity Investment Agreement. We intend to use all proceeds for general working capital and other corporate purposes.

 

DILUTION

 

The dilutive effect of the Equity Investment Agreement will be dependent on the actual purchase price that will be determined at the time of each put. To illustrate this dilutive effect, the following four scenarios are described using various purchase prices with the assumption that the full $2,500,000 of common stock is purchased at such prices.

 

	●	Scenario 1 - At an assumed purchase price of $1.50 ($3.00 market price after giving effect to 50% discount) per share, we will be required to issue an aggregate of 1,666,667 shares of common stock.
	●	Scenario 2 - At an assumed purchase price of $1.00 ($2.00 market price after giving effect to 50% discount) per share, we will be required to issue an aggregate of 2,500,000 shares of common stock.
	●	Scenario 3 - At an assumed purchase price of $0.50 ($1.00 market price after giving effect to 50% discount) per share, we will be required to issue an aggregate of 5,000,000 shares of common stock.
	●	Scenario 4 - At an assumed purchase price of $0.25 ($0.50 market price after giving effect to 50% discount) per share, we will be required to issue an aggregate of 10,000,000 shares of common stock.

 

The following table illustrates the per share dilution associated with each of the above Equity Investment Agreement scenarios. Net tangible book value per share represents the amount of total tangible assets less total liabilities divided by the number of shares outstanding as of May 31, 2015. Totals may vary due to rounding.

 

Scenario 1

Scenario 2

Scenario 3

Scenario 4

Offering price (net of discount)

$1.50 per share

$1.00 per share

$0.50 per share

$0.25 per share

Net tangible book value at May 31, 2015

$0.00 per share

$0.00 per share

$0.00 per share

$0.00 per share

Net tangible book value after giving effect to the Offering

$0.03 per share

$0.03 per share

$0.03 per share

$0.03 per share

Increase in net tangible book value per share attributable to cash payments made by new investors

$0.03 per share

$0.03 per share

$0.03 per share

$0.03 per share

Per share dilution to new investors

$1.47 per share

$0.97 per share

$0.47 per share

$0.22 per share

 

SELLING SHAREHOLDERS

 

The 14,839,270 shares of our common stock included in this prospectus either (a) were issued to the selling shareholders in the private sales in reliance upon the provisions of Section 4(a)(2) of the Securities Act or (b) will be issued to Tuverga in connection with the Equity Investment Agreement. Tuverga is neither a broker-dealer nor an affiliate of a broker-dealer.

 

Tuverga may offer for sale all or part of the Tuverga Shares from time to time, and the table below assumes that Tuverga will sell all of the Tuverga Shares offered for sale. Tuverga is under no obligation, however, to sell any shares pursuant to this prospectus.

 

 

The following table sets forth, as to each of the selling shareholders: the number of shares of our common stock beneficially owned, based on each selling shareholder’s ownership of the common stock purchased pursuant to the Equity Investment Agreement or in the Private Placement Transactions; the number of shares of our common stock being offered by such selling shareholder pursuant to this prospectus; and the number of shares of our common stock beneficially owned upon completion of the offering and the percentage of beneficial ownership upon completion of the offering and entry into the Equity Investment Agreement based upon 64,092,035 shares of our common stock outstanding as of September 1, 2015, and the issuance of an estimated 10,000,000 shares of common stock to Tuverga pursuant to the Equity Investment Agreement.

 

Information in the table below and the notes thereto has been provided to us by the selling shareholders. Beneficial ownership and percentage have been determined in accordance with Rule 13d-3 under the Exchange Act and generally includes voting or dispositive power with respect to the securities. The information listed below is not necessarily indicative of beneficial ownership for any other purpose. None of the selling shareholders have, within the last three years from the date of this prospectus, held any position, office or material relationship with the Company.

 

Name		Shares of Common Stock Held				Shares of Common Stock Being Registered				Beneficial Ownership After Offering(1)				Percentage of Beneficial Ownership After Offering
Shield Investments, Inc.			2,750,000				2,750,000				0				0
Masamos Services Ltd.			1,000,000				1,000,000				0				0
Dome Capital LLC			339,270				339,270				0				0
Tuverga Finance Ltd.			750,000				10,750,000				0				0
Total			4,839,270				14,839,270				0				0

 

(1)

The numbers in this column assume each selling shareholder sells all of its shares being registered pursuant to this prospectus, including those subject to our rights under the Equity Investment Agreement with Tuverga.

 

PLAN OF DISTRIBUTION

 

Each selling shareholder and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of the shares covered hereby on the OTC or any other stock exchange, market or trading facility on which our common stock is traded or in private transactions. These sales may be at fixed or negotiated prices. A selling shareholder may use any one or more of the following methods when selling shares:

 

	●	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
	●	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
	●	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
	●	an exchange distribution in accordance with the rules of the applicable exchange;
	●	privately negotiated transactions;
	●	settlement of short sales entered into after the effective date of the registration statement of which this prospectus forms a part;
	●	in transactions through broker-dealers that agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;
	●	through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
	●	a combination of any such methods of sale; or
	●	any other method permitted pursuant to applicable law.

 

 

Broker-dealers engaged by the selling shareholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling shareholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with FINRA IM-2440.

 

In connection with the sale of the shares or interests therein, the selling shareholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the shares in the course of hedging the positions they assume. The selling shareholders may also sell shares short and deliver these shares to close out their short positions, or loan or pledge the shares to broker-dealers that in turn may sell these shares. The selling shareholders may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

 

Broker-dealers or agents may receive compensation from the selling shareholders in the form of commissions, discounts or concessions. Broker-dealers or agents may also receive compensation from the purchasers of the registered securities for which they act as agents or to whom they sell as principals, or both. A broker-dealer’s compensation will be negotiated in connection with the sale and may exceed the broker-dealer’s customary commissions. Broker-dealers, agents or the selling shareholders may be deemed to be “underwriters” within the meaning of the Securities Act in connection with sales of the registered securities. Any commission, discount or concession received by these broker-dealers or agents and any profit on the sale of the registered securities purchased by them may be deemed to be underwriting discounts or commissions under the Securities Act.

 

Because Tuverga is an “underwriter” and the other selling shareholders may be deemed to be “underwriters” within the meaning of the Securities Act, they will be subject to the prospectus delivery requirements of the Securities Act. In addition, any securities covered by this prospectus, other than the Tuverga Shares, which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this prospectus. The selling shareholders have advised us that they have not entered into any agreements, understandings or arrangements with any underwriter or broker-dealer regarding the sale of the registered securities. There is currently no coordinating broker acting in connection with the proposed sale of the registered securities by the selling shareholders.

 

We have agreed to keep the registration statement of which this prospectus forms a part effective until the date on which all of the Tuverga Shares have been sold pursuant to this prospectus. The registered securities will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the registered securities may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

 

In order to comply with the applicable securities laws of particular states, if applicable, the registered securities will be sold in the jurisdictions only through registered or licensed brokers or dealers. In addition, in particular states, the registered securities may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

 

Tuverga is an “underwriter” and the selling shareholders and any broker-dealers or agents that participate with the selling shareholders in the distribution of the shares of registered securities may be deemed to be “underwriters” within the meaning of the Securities Act, and any commissions received by them and any profit on the resale of the registered securities may be deemed to be underwriting commissions or discounts under the Securities Act.

 

Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the registered securities may not simultaneously engage in market making activities with respect to the registered securities for a period of two business days prior to the commencement of the distribution. In addition, the selling shareholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the registered securities by the selling shareholders or any other person. We will make copies of this prospectus available to the selling shareholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale.

 

 

We will pay all costs, expenses and fees associated with the registration of the registered securities, including without limitation, SEC filing fees and expenses of compliance with state securities or “blue sky” laws. The selling shareholders will pay all underwriting commissions and discounts, selling or placement agent fees or broker fees and commissions, and transfer taxes, if any, associated with the sale of the registered securities. The selling shareholders may agree to indemnify any broker-dealer or agent that participates in sales of the registered securities against specified liabilities, including liabilities arising under the Securities Act. The selling shareholders have agreed to indemnify certain persons against specified liabilities in connection with the offering of the registered securities, including liabilities arising under the Securities Act.

 

Regulation M

 

The anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of our common stock and activities of the selling shareholders.

 

During such time as it may be engaged in a distribution of any of the shares we are registering by this registration statement, Tuverga is required to comply with Regulation M. In general, Regulation M precludes any selling security holder, any affiliated purchasers and any broker-dealer or other person who participates in a distribution from bidding for or purchasing, or attempting to induce any person to bid for or purchase, any security which is the subject of the distribution until the entire distribution is complete. Regulation M defines a “distribution” as an offering of securities that is distinguished from ordinary trading activities by the magnitude of the offering and the presence of special selling efforts and selling methods. Regulation M also defines a “distribution participant” as an underwriter, prospective underwriter, broker, dealer, or other person who has agreed to participate or who is participating in a distribution.

 

Regulation M under the Exchange Act prohibits, with certain exceptions, participants in a distribution from bidding for or purchasing, for an account in which the participant has a beneficial interest, any of the securities that are the subject of the distribution. Regulation M also governs bids and purchases made in order to stabilize the price of a security in connection with a distribution of the security. We have informed Tuverga that the anti-manipulation provisions of Regulation M may apply to the sales of their shares offered by this prospectus, and we have also advised Tuverga of the requirements for delivery of this prospectus in connection with any sales of the common stock offered by this prospectus.

 

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”). 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 September 1, 2015, an aggregate of 64,092,035 shares of 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 hereof, 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 issue 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.

 

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 effectuate 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 not paid any cash dividends to our shareholders. The declaration of any future cash dividends is at the discretion of our board of directors and depends 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.

 

 

INTEREST OF NAMED EXPERTS AND COUNSEL

 

No expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the common stock was employed on a contingency basis, or had, or is to receive, in connection with the offering, a substantial interest, direct or indirect, in the registrant or any of its parents or subsidiaries. Nor was any such person connected with the registrant or any of its parents or subsidiaries as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.

 

Anderson Bradshaw PLLC of Salt Lake City, Utah, our independent registered public accountant, has audited our financial statements included in this prospectus and registration statement to the extent and for the periods set forth in their audit report. Anderson Bradshaw PLLC has presented its report with respect to our audited financial statements.

 

Bacchus Law Corporation of 925 West Georgia Street, Suite 1820, Vancouver, British Columbia, Canada V6C 3L2, has passed upon certain legal matters in connection with the validity of the issuance of the shares of common stock.

 

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

 

General

 

As of the date hereof, we have 64,092,035 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 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:

 

OTCQB
Quarter Ended			High ($)				Low ($)
August 31, 2015				0.69				0.22
May 31, 2015				6.00				0.41
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 hereof there are seven 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 effectuate 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 hereof, 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 prospectus to adopt such a plan.

 

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

 

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 hereof, the name, age and positions of our sole executive officer and director were 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 shareholder 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 shareholders and management under which non-management shareholders 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 Mr. Hammack and Mr. Foster, 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.

 

 

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.

 

We do not have any independent directors and have not voluntarily implemented various corporate governance measures, in the absence of which, stockholders may have more limited protections against interested director transactions, conflicts of interest and similar matters.

 

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,			2014				N/A				N/A
Chief Executive Officer (1)			2013				N/A				N/A
Timothy Franklin, former			2014				20,000				20,000
Chief Executive Officer (2)			2013				N/A				N/A
Khurram Shroff, former			2014				-				-
Chief Executive Officer (3)			2013				-				-
Mauro Baessato, former			2014				N/A				N/A
Chief Executive Officer (4)			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.

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth certain information regarding our common stock beneficially owned as of September 1, 2015 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)			212,765				(3	)
Common Stock		Timothy Franklin (4)			-				-
Common Stock		Khurram Shroff (5)			-				-
All Officers and Directors as a Group					-				-
Preferred Stock		Fen Holdings & Investments Ltd. (6) 10 route de l’Aeroport Geneva, Switzerland CH-1215			2,000,000				100

 

	(1)	Based on 64,092,035 shares of our common stock and 2,000,000 shares of our Series “A” preferred stock issued and outstanding as of September 1, 2015.
	(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)	Less than 1%.
	(4)	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.
	(5)	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.
	(6)	Juergen Krause, Director of Fen Holdings & Investments Ltd., exercises sole voting and investment power over the securities held by Fen Holdings & Investments Ltd.

 

Changes in Control

 

As of September 1, 2015, 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.

 

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

 

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.

 

 

DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION

FOR SECURITIES ACT LIABILITIES

 

Our bylaws provide that we will indemnify our directors and officers to the fullest extent provided by Nevada law.

 

The general effect of the foregoing is to indemnify a control person, officer or director from liability, thereby making us responsible for any expenses or damages incurred by such control person, officer or director in any action brought against them based on their conduct in such capacity, provided they did not engage in fraud or criminal activity.

 

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or control persons pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

 

REPORTS TO SECURITY HOLDERS

 

We plan to file annual, quarterly, and current reports, and other information with the SEC, where applicable. You may read and copy any reports, statements, or other information we file at the SEC’s public reference room at 100 F. Street, N.E., Washington D.C. 20549. You can request copies of these documents, upon payment of a duplicating fee by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms. Our SEC filings are also available to the public on the SEC’s Internet site at http://www.sec.gov.

 

WHERE YOU CAN FIND MORE INFORMATION

 

We have filed with the Securities and Exchange Commission, 100 F Street NE, Washington, D.C. 20549, under the Securities Act a registration statement on Form S-1 of which this prospectus is a part, with respect to the shares of common stock offered hereby. We have not included in this prospectus all the information contained in the registration statement, and you should refer to the registration statement and our exhibits for further information.

 

In the registration statement, certain items are contained in exhibits and schedules as permitted by the rules and regulations of the SEC. You should read this prospectus and any prospectus supplement together with the registration statement and the exhibits filed with or incorporated by reference into the registration statement. The information contained in this prospectus speaks only as of its date unless the information specifically indicates that another date applies.

 

You should rely only on the information contained in this prospectus. No finder, dealer, sales person or other person has been authorized to give any information or to make any representation in connection with this offering other than those contained in this prospectus and, if given or made, such information or representation must not be relied upon as having been authorized by the Company. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby by anyone in any jurisdiction in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation.

 

STOCK TRANSFER AGENT

 

Island Stock Transfer is our transfer agent. It can be contacted by mail at 15500 Roosevelt Boulevard, Suite 301

Clearwater, Florida 33760 or by phone at (727) 289-0010.

 

DEALER PROSPECTUS DELIVERY OBLIGATION

 

Until a date which is 90 days after the date of this prospectus, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

 

  

VALMIE RESOURCES, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2015

(Stated in US Dollars)

(Unaudited)

 

	Page
Consolidated Balance Sheets	F-1
Consolidated Statements of Operations	F-2
Consolidated Statements of Changes in Stockholders’ Equity (Deficiency)	F-3
Consolidated Statements of Cash Flows	F-4
Notes to the Unaudited Interim Consolidated Financial Statements	F-5

 

 

Valmie Resources, Inc.

Consolidated Balance Sheets

(Stated in US Dollars)

 

		May 31, 2015				November 30, 2014
			(unaudited)
ASSETS
Current Assets
Cash and cash equivalents (Note 4)		$	35,197			$	12,565
Prepaid expenses			350				-
Total Current Assets			35,547				12,565
Prototype development (at cost)			25,691				-
Goodwill (Note 3)			2,777,145				-
Total Assets		$	2,838,383			$	12,565
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities		$	55,830			$	83,250
Due to related parties (Note 7)			100				44,809
Total Current Liabilities			55,930				128,059
Promissory Notes (Note 8)			16,769				67,805
Total Liabilities			72,699				195,864
STOCKHOLDERS’ EQUITY (DEFICIENCY)
Capital stock (Note 5)
Authorized:
10,000,000 preferred shares, $0.001 per share (Nil – November 30, 2014)
750,000,000 common shares, $0.001 par value (750,000,000 – November 30, 2014)
Issued and outstanding:
2,000,000 preferred shares (Nil – November 30, 2014)			2,000				-
63,879,270 common shares (296,400,000 – November 30, 2014)			63,879				296,400
Additional paid-in capital			13,643,994				(155,657	)
Retained deficit			(10,944,189	)			(324,042	)
Total Stockholders’ Equity (Deficiency)			2,765,684				(183,299	)
Total Liabilities and Stockholders’ Equity (Deficiency)		$	2,838,383			$	12,565

 

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

 

 

Valmie Resources, Inc.

Consolidated Statements of Operations

(Stated in US Dollars)

(Unaudited)

 

		Three Months Ended May 31, 2015				Three Months Ended May 31, 2014				Six Months Ended May 31, 2015				Six Months Ended May 31, 2014
Revenue:		$	-			$	-			$	-			$	-
Operating Expenses:
General and administrative			17,299				1,284				24,302				1,284
Management fees			11,000				-				22,000				-
Professional fees			58,400				14,679				168,460				32,274
Transfer agent fees			1,707				675				2,153				875
Loss from Operations			(88,406	)			(16,638	)			(216,915	)			(34,433	)
Other income (expenses)
Interest			8,001				-				1,190				-
Loss on settlement of debt			(10,404,422	)			-				(10,404,422	)			-
			(10,396,421	)			-				(10,403,232	)			-
Net Loss for the Period		$	(10,484,827	)		$	(16,638	)		$	(10,620,147	)		$	(34,433	)
Basic and Diluted Loss per Common Share			61,933,042				296,400,000				121,831,648				296,400,000
Weighted Average Number of Common Shares Outstanding			(0.17	)			(0.00	)			(0.09	)			(0.00	)

 

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

 

 

Valmie Resources, Inc.

Consolidated Statements of Changes in Stockholders’ Equity (Deficiency)

(Stated in US Dollars)

(Unaudited)

 

		Preferred Stock								Common Stock								Additional
		Number of Shares				Amount				Number of Shares				Amount				Paid-in Capital				Retained Deficit				Stockholders’ Deficiency
Balance November 30, 2013			-			$	-				296,400,000			$	296,400			$	(155,657	)		$	(159,887	)		$	(19,144	)
Loss for the period			-				-				-				-				-				(17,795	)			(17,795	)
Balance – February 28, 2014			-				-				296,400,000				296,400				(155,657	)			(177,682	)			(36,939	)
Loss for the period			-				-				-				-				-				(146,360	)			(146,360	)
Balance – November 30, 2014			-				-				296,400,000				296,400				(155,657	)			(324,042	)			(183,299	)
Exchange of common stock for preferred stock			2,000,000				2,000				(237,360,000	)			(237,360	)			235,360				-				-
Debt settlement of promissory notes			-				-				3,500,000				3,500				9,831,500				-				9,835,000
Debt settlement of related party loans			-				-				339,270				339				953,010				-				953,349
Acquisition of subsidiary			-				-				1,000,000				1,000				2,769,000				-				2,770,000
Forgiveness of debt to majority shareholder			-				-				-				-				10,781				-				10,781
Loss for the period											-				-				-				(10,620,147	)			(10,620,147	)
Balance – May 31, 2015			2,000,000			$	2,000				63,879,270			$	63,879			$	13,643,994			$	(10,944,189	)		$	2,765,684

 

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

 

 

Valmie Resources, Inc.

Consolidated Statements of Cash Flows

(Stated in US Dollars)

(Unaudited)

 

		Six Months Ended May 31, 2015				Six Months Ended May 31, 2014
Cash Flows from Operating Activities
Net loss for the period		$	(10,620,147	)		$	(34,433	)
Items not affecting cash:
Loss on settlement of debt by issuing common stock			10,404,422
Changes in operating assets and liabilities:
Accounts payable and accrued liabilities			(27,420	)			17,922
Prepaid expenses			(350	)			5,000
Interest accrual			(1,037	)
Net cash used in operations			(244,532	)			(11,511	)
Cash Flows from Investing Activities
Advances to Vertitek Inc.			(25,500	)			-
Cash acquired on the acquisition of Vertitek Inc.			6,132				-
Increase in prototype development			(13,468	)
Net cash provided by investing activities			(32,836	)			-
Cash Flows from Financing Activities
Proceeds from related party payable			-				11,511
Proceeds from promissory notes			300,000				-
Net cash provided by financing activities			300,000				11,511
Change in cash and cash equivalents			22,632				-
Cash and cash equivalents - beginning of period			12,565				-
Cash and cash equivalents - end of period		$	35,197				-
Supplementary Cash Flow Information
Cash paid for:
Interest		$	-			$	-
Income taxes		$	-			$	-
Supplemental Disclosure of Non-Cash Investing Activity
Issuance of common stock for subsidiary		$	2,770,000			$	-

 

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

 

 

Valmie Resources, Inc.

Notes to Consolidated Financial Statements

May 31, 2015

(Stated in US Dollars)

(Unaudited)

 

1. Organization

 

Valmie Resources Inc. (the “Company”) was incorporated on August 26, 2011, in the State of Nevada, USA. The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“US GAAP”), and the Company’s fiscal year end is November 30.

 

In early December 2014, the Company changed its business focus from mining to pursuing opportunities for the commercialization of leading edge products and services in the rapidly expanding technology industry.

 

On March, 31, 2015, the Company acquired a 100% interest in Vertitek Inc., a Wyoming corporation (“Vertitek”).

 

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 Drone^SM, a cutting edge multi-rotor UAV designed specifically to meet the requirements of a growing commercial user base.

 

2. Basis of Presentation

 

Unaudited Interim Financial Statements

 

The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and the rules and regulations of the Securities and Exchange Commission (the “SEC”). They do not include all information and footnotes required by US GAAP for complete financial statements. However, except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended November 30, 2014, included in the Company’s Form 10-K filed with the SEC. The unaudited interim financial statements should be read in conjunction with those financial statements included in the Form 10-K. In the opinion of management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the six months ended May 31, 2015, are not necessarily indicative of the results that may be expected for the year ending November 30, 2015.

 

3. Acquisition of Vertitek

 

On March 31, 2015, the Company issued 1,000,000 shares of common stock in exchange for 100% of the issued and outstanding shares of Vertitek. As a result of the acquisition, Vertitek became a wholly owned subsidiary of the Company.

 

The acquisition was accounted for as a business combination under the acquisition method of accounting in accordance with US GAAP.

 

 

Valmie Resources, Inc.

Notes to Consolidated Financial Statements

May 31, 2015

(Stated in US Dollars)

(Unaudited)

 

3. Acquisition of Vertitek (continued)

 

Fair Value of Consideration Transferred and Recording of Assets Acquired, Liabilities Assumed and Non-controlling Interests.

 

The following table summarizes the acquisition date fair value of the consideration transferred, identifiable assets acquired, liabilities assumed and non-controlling interests, including an amount for goodwill:

 

Consideration:

 

Common stock issued		$	2,770,000
Fair value of total consideration transferred		$	2,770,000
Recognized amount of identifiable assets acquired and liabilities assumed:
Financial assets		$	18,355
Financial liabilities			(25,500	)
Total identifiable net assets (liabilities)			(7,145	)
Goodwill			2,777,145
		$	2,770,000

 

Goodwill represents the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized. The goodwill arising from the acquisition is attributable to the general reputation of Vertitek’s founding owner and expected synergies. The goodwill is not expected to be deductible for tax purposes.

 

4. Cash and Cash Equivalents

 

		May 31, 2015				November 30, 2014
Cash on deposit		$	35,197			$	3,027
Funds held in trust			-				9,538
		$	35,197			$	12,565

 

 

Valmie Resources, Inc.

Notes to Consolidated Financial Statements

May 31, 2015

(Stated in US Dollars)

(Unaudited)

 

5. Capital Stock

 

Authorized Stock

 

At inception, the Company authorized 100,000,000 shares of common stock with a par value of $0.001 per share. Each share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.

 

On December 3, 2013, the holders of a majority of the Company’s issued and outstanding common stock approved an increase in its 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 Company formally effected the Authorized Capital Increase on December 4, 2013 by filing a Certificate of Amendment with the Nevada Secretary of State.

 

On December 3, 2013, the Company’s sole director approved a stock dividend of 59 authorized but unissued shares of its common stock on each one (1) issued and outstanding share of its common stock held by shareholders of record as of December 16, 2013. The payment date for the stock dividend was December 17, 2013, as determined by the Financial Industry Regulatory Authority (FINRA). Upon the payment of the stock dividend, the Company had 296,400,000 issued and outstanding shares of common stock, which represents an increase of 291,460,000 shares over its prior total of 4,940,000 issued and outstanding shares of common stock. The split is reflected retrospectively in the accompanying financial statements.

 

On December 10, 2014, the holders of a majority of the Company’s issued and outstanding common stock approved a set of amended and restated articles of incorporation that, among other things, increased the Company’s 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.

 

On December 11, 2014, the Company’s sole director approved the designation of 2,000,000 shares of the authorized but unissued “blank check” preferred stock, par value $0.001, as Series “A” preferred stock. The shares of Series “A” preferred stock carry certain rights and preferences, may be converted into shares of the Company’s common stock on a 10 for one (1) basis at any time after 18 months from the date of issuance, and each share of Series “A” preferred stock has voting rights and carries a voting weight equal to 50 shares of common stock. The Company formally effected the designation by filing a Certificate of Designation with the Nevada Secretary of State on January 15, 2015.

 

Share Issuances

 

On January 16, 2015, the owner of an aggregate of 237,360,000 shares of the Company’s common stock agreed to cancel those shares in exchange for the issuance of 2,000,000 shares of Series “A” preferred stock. As a result, the number of issued and outstanding shares of the Company’s common stock decreased from 296,400,000 to 59,040,000.

 

On April 6, 2015, the Company issued 3,500,000 shares of common stock at a deemed price of $0.10 per share in settlement of promissory notes totaling $350,000, including $300,000 in proceeds received during the current fiscal year. The stock was valued at the $2.81 trading price per share, resulting in a loss on the settlement of debt.

 

On April 6, 2015, the Company issued 339,270 shares of common stock at a deemed price of $0.10 per share in settlement of related party loans totaling $33,927. The stock was valued at the $2.81 trading price per share, resulting in a loss on the settlement of debt.

 

On April 6, 2015, the Company issued 1,000,000 shares of common stock at a price of $2.77 per share for the acquisition of Vertitek. The stock was valued at $2.77 per share on the effective date of the acquisition of Vertitek, March 31, 2015.

 

 

Valmie Resources, Inc.

Notes to Consolidated Financial Statements

May 31, 2015

(Stated in US Dollars)

(Unaudited)

 

5. Capital Stock (continued)

 

As of May 31, 2015 the Company had 63,879,270 issued and outstanding shares of common stock and 2,000,000 issued and outstanding shares of Series “A” preferred stock.

 

As of May 31, 2015, the Company had no issued or outstanding stock options or warrants.

  

6. Mineral Property Costs

 

Lander County, Nevada Claims

 

On September 30, 2011, the Company entered into an option agreement that would provide for the purchase of a 100% interest in the Carico Lake Valley Property (the “Property”). The Property is located in the State of Nevada.

 

To complete the option, the agreement requires the Company to make the following payments and incur the following amounts on exploration and development:

 

a)	$15,000 cash on September 30, 2011 (paid);
b)	an additional $30,000 cash on September 30, 2013 (not paid);
c)	an additional $60,000 cash on September 30, 2013 (not paid);
d)	an additional $120,000 cash on September 30, 2014 (not paid) and
e)	incur a minimum of $125,000 ($12,654 has been incurred as of May 31, 2015) on exploration and development work by December 31, 2013 and every subsequent year thereafter, through 2014.

The entity that owns the Property has made the 2014 payments due to the Bureau of Land Management, Nevada (“BLM”) and Lander County. The payments ($6,406) are reflected in accounts payable and accrued liabilities.

 

The Company is responsible for any and all property payments due to any government authority on the property during the term of this option agreement (BLM: $3,920 yr., Lander County: $294 yr.).

 

The entity that owns the Property terminated the option agreement with the Company on July 28, 2014 and the above mentioned reimbursement of $6,406 remains outstanding. The Company has no further rights to the Property.

 

7. Related Party Transactions

 

During the period ended May 31, 2015, the Company paid management fees of $5,000 (2014 – $Nil) to a former director and $17,000 (2014 – $Nil) to its current President.

 

As of May 31, 2015, the Company was obligated to a former director for non-interest bearing, unsecured and with no fixed terms of repayment loans with a balance of $nil (November 30, 2014 – $19,146). The Company also owed $nil to its majority shareholder at May 31, 2015 (November 30, 2014 – $25,663) and $100 to its former President and director.

 

 

Valmie Resources, Inc.

Notes to Consolidated Financial Statements

May 31, 2015

(Stated in US Dollars)

(Unaudited)

 

8. Promissory Notes

 

On October 22, 2014, the Company entered into a promissory note agreement with an investor for an aggregate amount of $15,000 plus simple interest at an annual interest rate of 15%, repayable on October 22, 2016. As of May 31, 2015, $15,000 was received and interest accrued of $1,769.

 

9. Provision for Income Taxes

 

The Company recognizes the tax effects of transactions in the year in which such transactions enter into the determination of net income, regardless of when reported for tax purposes. Deferred taxes are provided in the financial statements under FASC 718-740-20 to give effect to the resulting temporary differences which may arise from differences in the bases of fixed assets, depreciation methods, allowances, and start-up costs based on the income taxes expected to be payable in future years.

 

Exploration stage deferred tax assets arising as a result of net operating loss carryforwards have been offset completely by a valuation allowance due to the uncertainty of their utilization in future periods. Operating loss carryforwards generated during the period from August 26, 2011 (date of inception) through May 31, 2015 of $10,944,189 will begin to expire in 2031. Accordingly, deferred tax assets of approximately $3,830,466 were offset by the valuation allowance.

 

The Company follows the provisions of uncertain tax positions as addressed in FASC 740-10-65-1. The Company recognized approximately no increase in the liability for unrecognized tax benefits.

 

The Company has no tax position at May 31, 2015 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the periods presented. The Company had no accruals for interest and penalties at May 31, 2015. The Company’s utilization of any net operating loss carry forward may be unlikely as a result of its intended exploration stage activities. The tax years for November 30, 2014, 2013, 2012 and 2011 are still open for examination by the Internal Revenue Service (IRS).

 

		2015
		Amount				Tax Effect (35%)
Net operating losses		$	10,620,147			$	3,717,051
Valuation allowance			(10,620,147	)			(3,717,051	)
Net deferred tax asset (liability)		$	-			$	-

 

		2014
		Amount				Tax Effect (35%)
Net operating losses		$	34,433			$	12,051
Valuation allowance			(34,433	)			(12,051	)
Net deferred tax asset (liability)		$	-			$	-

 

 

Valmie Resources, Inc.

Notes to Consolidated Financial Statements

May 31, 2015

(Stated in US Dollars)

(Unaudited)

  

10. Going Concern and Liquidity Considerations

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As at May 31, 2015, the Company had a working capital deficiency of $20,383 (November 30, 2014 – $115,494) and a retained deficit of $10,944,189 (November 30, 2014 – $324,042). The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the next 12 months.

 

The ability of the Company to continue in existence is dependent upon, among other things obtaining additional financing to continue operations and the operations of Vertitek.

 

In response to these problems, management intends to raise additional funds through public or private placement offerings.

 

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

11. Commitments

 

Pursuant to a consulting agreement dated September 1, 2014, the Company is obligated to pay one consultant $25,000 per month for a term of one year and reimburse the consultant’s reasonable expenses incurred in the course of providing services under the agreement. For the six months ended May 31, 2015, the Company had paid or accrued $203,535 in fees and expenses under the agreement, and $286,035 from the beginning of the agreement.

 

12. Subsequent Events

 

On July 15, 2015, the Company entered into an asset purchase agreement with its current President pursuant to which the Company acquired all of the right, title and interest in and to certain intellectual property from the President in consideration for the issuance of $100,000 worth of common stock on that date at a deemed price of $0.47 per share. As a result, the Company issued 212,765 shares of common stock to the President.

 

The Company has evaluated subsequent events from May 31, 2015, through the date these financial statements were issued and determined that, other than as described above, there are no additional items to disclose.

 

 

VALMIE RESOURCES, INC.

INDEX TO FINANCIAL STATEMENTS

November 30, 2014

(Stated in US Dollars)

 

Report of Independent Registered Public Accounting Firm	F-11
Balance Sheets	F-12
Statements of Operations	F-13
Statements of Changes in Stockholders’ Deficiency	F-14
Statements of Cash Flows	F-15
Notes to the Audited Financial Statements	F-16

  

 

 

 

 

Russell E. Anderson, CPA Russ Bradshaw, CPA William R. Denney, CPA Kristofer Heaton, CPA		REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM   To the Board of Directors and Management Valmie Resources, Inc. 999 18th Street, Suite 3000 Denver, Colorado 80202   We have audited the accompanying balance sheets of Valmie Resources, Inc. as of November 30, 2014 and 2013, and the related statements of operations, changes in stockholders’ (deficit), and cash flows for the years then ended. 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 audits.   We conducted our audits 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 audits 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 audits included consideration of internal control over financial reporting, as a basis for designing audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.   In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Valmie Resources, Inc. as of November 30, 2014 and 2013, and the results of its operations, and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.   The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 9 to the financial statements, the Company has recurring losses 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.
5296 S. Commerce Dr
Suite 300 Salt Lake City, Utah 84107
USA
(T) 801.281.4700
(F) 801.281.4701
		/s/ Anderson Bradshaw PLLC
		Anderson Bradshaw PLLC
		Salt Lake City, Utah
		March 13, 2015
abcpas.net

 

 

Valmie Resources, Inc.

Balance Sheets

(Stated in US Dollars)

 

		November 30, 2014				November 30, 2013
ASSETS
Current Assets
Cash and cash equivalents (Note 3)		$	12,565			$	-
Prepaid expenses			-				5,000
Total Current Assets			12,565				5,000
Total Assets		$	12,565			$	5,000
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities (Note 5)		$	83,250			$	16,658
Due to related parties (Note 6)			44,809				7,486
Total Current Liabilities			128,059				24,144
Promissory Notes (Note 7)			67,805				-
Total Liabilities			195,864				24,144
STOCKHOLDERS’ DEFICIENCY
Capital stock (Note 4)
Authorized:
750,000,000 common shares, $0.001 par value Issued and outstanding:
296,400,000 common shares (296,400,000 – November 30, 2013)			296,400				296,400
Additional paid-in capital			(155,657	)			(155,657	)
Accumulated deficit			(324,042	)			(159,887	)
Total Stockholders’ Deficiency			(183,299	)			(19,144	)
Total Liabilities and Stockholders’ Deficiency		$	12,565			$	5,000

 

The accompanying notes are an integral part of these financial statements

 

 

Valmie Resources, Inc.

Statements of Operations

(Stated in US Dollars)

 

		Year Ended November 30, 2014				Year Ended November 30, 2013
Revenue:		$	-			$	-
Operating Expenses:
General and administrative			5,815				8,482
Management fees (Note 6)			20,000				-
Mining expenses (Note 5)			-				6,406
Professional fees			136,415				32,866
Transfer agent fees			1,925				14,473
Net Loss for the Year			(164,155	)			(62,227	)
Basic and Diluted Loss per Common Share		$	(0.00	)		$	(0.00	)
Weighted Average Number of Common Shares Outstanding			296,400,000				296,400,000

 

The accompanying notes are an integral part of these financial statements

 

 

Valmie Resources, Inc.

Statements of Changes in Stockholders’ Deficiency

(Stated in US Dollars)

 

		Common Stock
		Number of Shares				Amount				Additional Paid-in Capital				Accumulated Deficit				Stockholders’ Deficiency
Balance – November 30, 2012			296,400,000			$	296,400			$	(247,000	)		$	(97,660	)		$	(48,260	)
Debt cancellation			-				-				91,343				-				91,343
Loss for the year			-				-				-				(62,227	)			(62,227	)
Balance November 30, 2013			296,400,000				296,400				(155,657	)			(159,887	)			(19,144	)
Loss for the year			-				-				-				(164,155	)			(164,155	)
Balance – November 30, 2014			296,400,000			$	296,400			$	(155,657	)		$	(324,042	)		$	(183,299	)

 

The accompanying notes are an integral part of these financial statements

 

 

Valmie Resources, Inc.

Statements of Cash Flows

(Stated in US Dollars)

 

		Year Ended November 30, 2014				Year Ended November 30, 2013
Cash Flows from Operating Activities
Net loss for the year		$	(164,155	)		$	(62,227	)
Changes in operating assets and liabilities:
Accounts payable and accrued liabilities			66,592				(3,099	)
Prepaid expenses			5,000				(5,000	)
Interest accrual			2,805
Net cash used in operations			(89,758	)			(70,326	)
Cash Flows from Financing Activities
Proceeds from related party payable			37,323				66,313
Payments to related party payable			-				(113	)
Proceeds from promissory notes			65,000				-
Issuance of common shares for cash			-				-
Net cash provided by financing activities			102,323				66,200
Change in cash and cash equivalents			12,565				(4,126	)
Cash and cash equivalents - beginning of year			-				4,126
Cash and cash equivalents - end of year		$	12,565			$	-
Supplementary Cash Flow Information
Cash paid for:
Interest		$	-			$	-
Income taxes		$	-			$	-
Non-cash financing activities:
Accounts payable paid by related party		$	-			$	-
Loans contributed to capital		$	-			$	91,343

 

The accompanying notes are an integral part of these financial statements

 

 

Valmie Resources, Inc.

Notes to Financial Statements

November 30, 2014

(Stated in US Dollars)

 

1. Organization

 

Valmie Resources Inc. (the “Company”) was incorporated on August 26, 2011, in the State of Nevada, USA. The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“US GAPP”), and the Company’s fiscal year end is November 30.

 

The Company is an exploration stage company that engaged principally in the acquisition, exploration, and development of resource properties.

 

2. Significant Accounting Policies

 

Use of Estimates

 

The preparation of financial statements in conformity with US GAAP 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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s periodic filings with the Securities and Exchange Commission (the “SEC”) include, where applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the financial statements and future operations of the Company.

 

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. The Company had $12,565 in cash and cash equivalents at November 30, 2014 (November 30, 2013 - $nil).

 

Start-Up Costs

 

In accordance with FASC 720-15-20 “Start-Up Costs”, the Company expenses all costs incurred in connection with the start-up and organization of the Company.

 

Mineral Acquisition and Exploration Costs

 

The Company has been in the exploration stage since its formation on August 26, 2011 and has not yet realized any revenue from its planned operations. It was primarily engaged in the acquisition, exploration, and development of mining properties. Mineral property acquisition and exploration costs are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserves.

 

Concentrations of Credit Risk

 

The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents and related party payables it will likely incur in the near future. The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.

 

 

Valmie Resources, Inc.

Notes to Financial Statements

November 30, 2014

(Stated in US Dollars)

 

2. Significant Accounting Policies – Continued

 

Net Income or (Loss) per Share of Common Stock

 

The Company has adopted FASC Topic No. 260, “Earnings Per Share”, (“EPS”) which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the financial statements, basic earnings (loss) per share is computed by dividing net income/loss by the weighted average number of shares of common stock outstanding during the period.

 

Foreign Currency Translations

 

The Company’s functional and reporting currency is the US dollar. All transactions initiated in other currencies are translated into US dollars using the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the US dollar at the rate of exchange in effect at the balance sheet date. Unrealized exchange gains and losses arising from such transactions are deferred until realization and are included as a separate component of stockholders’ equity (deficit) as a component of comprehensive income or loss. Upon realization, the amount deferred is recognized in income in the period when it is realized.

 

No significant realized exchange gains or losses were recorded as at November 30, 2014.

 

Comprehensive Income (Loss)

 

FASC Topic No. 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income and its components in a full set of general-purpose financial statements. As at November 30, 2014, the Company had no items of other comprehensive income. Therefore, net loss equals comprehensive loss as at November 30, 2014.

 

Risks and Uncertainties

 

The Company operates in the resource exploration industry that is subject to significant risks and uncertainties, including financial, operational, technological, and other risks associated with operating a resource exploration business, including the potential risk of business failure.

 

Environmental Expenditures

 

The operations of the Company have been, and may in the future be, affected from time to time in varying degree by changes in environmental regulations, including those for future reclamation and site restoration costs. Both the likelihood of new regulations and their overall effect upon the Company vary greatly and are not predictable. The Company’s policy is to meet or, if possible, surpass standards set by relevant legislation by application of technically proven and economically feasible measures.

 

Environmental expenditures that relate to ongoing environmental and reclamation programs are charged against earnings as incurred or capitalized and amortized depending on their future economic benefits. All of these types of expenditures incurred since inception have been charged against earnings due to the uncertainty of their future recoverability. Estimated future reclamation and site restoration costs, when the ultimate liability is reasonably determinable, are charged against earnings over the estimated remaining life of the related business operation, net of expected recoveries.

 

 

Valmie Resources, Inc.

Notes to Financial Statements

November 30, 2014

(Stated in US Dollars)

 

2. Significant Accounting Policies – Continued

 

Recent Accounting Pronouncements

 

Recent accounting pronouncements that are listed below did not, and are not currently expected to, have a material effect on the Company’s financial statements, but will be implemented in the Company’s future financial reporting when applicable.

 

FASB Statements

 

In June 2009, the FASB established the Accounting Standards Codification (“ASC”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with US GAAP. Rules and interpretive releases of the SEC issued under authority of federal securities laws are also sources of US GAAP for SEC registrants. Existing US GAAP was not intended to be changed as a result of the ASC, and accordingly the change did not impact the Company’s financial statements. The ASC does change the way the guidance is organized and presented.

 

Accounting Standards Updates (“ASUs”) through ASU No. 2015-02 which contain technical corrections to existing guidance or affect guidance to specialized industries or entities were recently issued. These updates have no current applicability to the Company or their effect on the financial statements would not have been significant.

 

3. Cash and Cash Equivalents

 

		November 30, 2014				November 30, 2013
Cash on deposit		$	3,027			$	-
Funds held in trust			9,538				-
		$	12,565			$	-

 

4. Capital Stock

 

Authorized Stock

 

At inception, the Company authorized 100,000,000 shares of common stock with a par value of $0.001 per share. Each share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.

 

On December 3, 2013, the holders of a majority of the Company’s issued and outstanding common stock approved an increase in its 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 Company formally effected the Authorized Capital Increase on December 4, 2013 by filing a Certificate of Amendment with the Nevada Secretary of State.

 

 

Valmie Resources, Inc.

Notes to Financial Statements

November 30, 2014

(Stated in US Dollars)

 

4. Capital Stock (continued)

 

On December 3, 2013, the Company’s sole director approved a stock dividend of 59 authorized but unissued shares of its common stock on each one (1) issued and outstanding share of its common stock held by shareholders of record as of December 16, 2013. The payment date for the stock dividend was December 17, 2013, as determined by the Financial Industry Regulatory Authority (FINRA). Upon the payment of the stock dividend, the Company had 296,400,000 issued and outstanding shares of common stock, which represents an increase of 291,460,000 shares over its prior total of 4,940,000 issued and outstanding shares of common stock. The split is reflected retrospectively in the financial statements.

 

Share Issuances

 

As at November 30, 2014, the Company has issued shares of its common stock as follows:

 

Date			Description		Shares				Price Per Share				Amount
09/29/11			Shares issued for cash		210,000,000				$	0.00017			$	35,000
11/15/11			Shares issued for cash			86,400,000				0.00017				14,400
			Cumulative Totals			296,400,000							$	49,400

 

Of these shares, 210,000,000 were issued to a director and officer of the Company. 86,400,000 shares were issued to independent investors.

 

At November 30, 2014, the Company had no issued or outstanding stock options or warrants.

 

5. Mineral Property Costs

 

Lander County, Nevada Claims

 

On September 30, 2011, the Company entered into an option agreement that would provide for the purchase of a 100% interest in the Carico Lake Valley Property (the “Property”). The Property is located in the State of Nevada.

 

To complete the option, the agreement requires the Company to make the following payments and incur the following amounts on exploration and development:

 

a)

$15,000 cash on September 30, 2011 (paid);

 

b)

an additional $30,000 cash on September 30, 2013 (not paid);

 

c)

an additional $60,000 cash on September 30, 2013 (not paid);

 

d)

an additional $120,000 cash on September 30, 2014 (not paid) and

 

e)

incur a minimum of $125,000 ($12,654 has been incurred as of November 30, 2014) on exploration and development work by December 31, 2013 and every subsequent year thereafter, through 2014.

 

The entity that owns the Property has made the 2014 payments due to the Bureau of Land Management, Nevada (“BLM”) and Lander County. The payments ($6,406) are reflected in accounts payable and accrued liabilities.

 

 

Valmie Resources, Inc.

Notes to Financial Statements

November 30, 2014

(Stated in US Dollars)

 

5. Mineral Property Costs (continued)

 

The Company is responsible for any and all property payments due to any government authority on the property during the term of the option agreement (BLM: $3,920 yr., Lander County: $294 yr.).

 

The entity that owns the Property terminated the option agreement with the Company on July 28, 2014 and the above mentioned reimbursement of $6,406 remains outstanding. The Company has no further rights to the Property.

 

As at November 30, 2014, the Company has incurred the following on the Property:

 

		November 30, 2014				November 30, 2013
Acquisition cost		$	15,000			$	15,000
Exploration costs, beginning of period		$	12,654			$	6,248
Exploration costs incurred		$	0			$	6,406
Exploration costs, end of period		$	12,654			$	12,654

 

6. Related Party Transactions

 

During the year ended November 30, 2014 the Company paid management fees of $20,000 (November 30, 2013 - $nil) to a former director.

 

As of November 30, 2014, the Company was obligated to a former director for non-interest bearing, unsecured and with no fixed terms of repayment loans with a balance of $19,146 (November 30, 2013 - $7,486). The Company also owed $25,663 to its majority shareholder at November 30, 2014.

 

7. Promissory Notes

 

On August 18, 2014, the Company entered into a promissory note agreement with an investor for an aggregate amount of $50,000 plus simple interest at an annual interest rate of 15%, repayable on August 18, 2016. The note is 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 Company on the date of the note or thereafter acquired, and all proceeds thereof. As of November 30, 2014, the aggregate amount of $50,000 was received and interest accrued of $2,158.

 

On October 22, 2014, the Company entered into a promissory note agreement with an investor for an aggregate amount of $15,000 plus simple interest at an annual interest rate of 15%, repayable on October 22, 2016. As of November 30, 2014, the aggregate amount of $15,000 was received and interest accrued of $647.

 

On November 23, 2014, the Company entered into a promissory note agreement with an investor for an aggregate amount of $75,000 plus simple interest at an annual interest rate of 15%, repayable on November 23, 2016. The note is 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 Company on the date of the note or thereafter acquired, and all proceeds thereof. As of November 30, 2014, $Nil was received in relation to the note and $Nil interest accrued.

 

 

Valmie Resources, Inc.

Notes to Financial Statements

November 30, 2014

(Stated in US Dollars)

 

8. Provision for Income Taxes

 

The Company recognizes the tax effects of transactions in the year in which such transactions enter into the determination of net income, regardless of when reported for tax purposes. Deferred taxes are provided in the financial statements under FASC 718-740-20 to give effect to the resulting temporary differences which may arise from differences in the bases of fixed assets, depreciation methods, allowances, and start-up costs based on the income taxes expected to be payable in future years.

 

Exploration stage deferred tax assets arising as a result of net operating loss carryforwards have been offset completely by a valuation allowance due to the uncertainty of their utilization in future periods. Operating loss carryforwards generated during the period from August 26, 2011 (date of inception) through November 30, 2014 of $324,042 will begin to expire in 2031. Accordingly, deferred tax assets of approximately $109,606 were offset by the valuation allowance.

 

The Company follows the provisions of uncertain tax positions as addressed in FASC 740-10-65-1. The Company recognized approximately no increase in the liability for unrecognized tax benefits.

 

The Company has no tax position at November 30, 2014 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the periods presented. The Company had no accruals for interest and penalties at November 30, 2014. The Company’s utilization of any net operating loss carry forward may be unlikely as a result of its intended exploration stage activities. The tax years for November 30, 2014, 2013, 2012 and 2011 are still open for examination by the Internal Revenue Service (IRS).

 

		2014
		Amount				Tax Effect (35%)
Net operating losses		$	164,155			$	57,454
Valuation allowance			(164,155	)			(57,454	)
Net deferred tax asset (liability)		$	-			$	-

 

		2013
		Amount				Tax Effect (35%)
Net operating losses		$	62,227			$	21,779
Valuation allowance			(62,227	)			(21,779	)
Net deferred tax asset (liability)		$	-			$	-

 

 

Valmie Resources, Inc.

Notes to Financial Statements

November 30, 2014

(Stated in US Dollars)

 

9. Going Concern and Liquidity Considerations

 

The financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As at November 30, 2014, the Company had a working capital deficiency of $115,494 (November 30, 2013 - $19,144) and an accumulated deficit of $324,042 (November 30, 2013 - $159,887). The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the next 12 months.

 

The ability of the Company to continue in existence is dependent upon, among other things, obtaining additional financing to continue operations and the operations of Vertitek. See Note 11.

 

In response to these problems, management intends to raise additional funds through public or private placement offerings.

 

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

10. Commitments

 

Pursuant to a consulting agreement dated September 1, 2014, the Company is obligated to pay one consultant $25,000 per month for a term of one year and reimburse the consultant’s reasonable expenses incurred in the course of providing services under the agreement. As of November 30, 2014, the Company had paid or accrued $82,500 in fees and expenses under the agreement.

 

11. Subsequent Events

 

On December 8, 2014, the sole officer and director of the Company resigned from all positions held with the Company and the Company appointed a new sole officer and director to fill the resulting vacancies as well as the position of Chairman. Since that date, the Company has paid management fees of $3,000 per month to the new officer and director.

 

On December 8, 2014, the Company received loan proceeds of $75,000 from a promissory note signed on November 23, 2014 (see Note 7).

 

On December 10, 2014, the holders of a majority of the issued and outstanding common stock of the Company approved a set of amended and restated articles of incorporation that, among other things, increased the Company’s 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.

 

On December 11, 2014, the sole director of the Company approved the designation of 2,000,000 shares of the Company’s authorized but unissued “blank check” preferred stock, par value $0.001, as Series “A” preferred stock. The Company formally effected the designation by filing a Certificate of Designation with the Nevada Secretary of State on January 15, 2015.

 

 

Valmie Resources, Inc.

Notes to Financial Statements

November 30, 2014

(Stated in US Dollars)

 

11. Subsequent Events (continued)

 

On December 29, 2014, the Company entered into a promissory note agreement with an investor for an aggregate amount of $75,000 plus simple interest at an annual interest rate of 15%, repayable on December 29, 2016. The note is 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 Company on the date of the note or thereafter acquired, and all proceeds thereof.

 

On January 16, 2015, the majority shareholder of the Company agreed to cancel 237,360,000 shares of the Company’s issued and outstanding common stock in exchange for the issuance of 2,000,000 shares of Series “A” preferred stock. As a result, the number of issued and outstanding shares of the Company’s common stock decreased from 296,400,000 to 59,040,000.

 

On January 20, 2015, the Company entered into a letter of intent (the “LOI”) to acquire 100% of the capital stock of Vertitek Inc. (“Vertitek”), a Wyoming corporation engaged in the development of hardware systems and platforms for use in the semi-autonomous unmanned vehicles industry. Pursuant to the LOI, the Company has 60 days to complete its due diligence on Vertitek and negotiate the terms of a definitive acquisition agreement. During the 60-day due diligence period, the Company is obliged to provide Vertitek with a $150,000 line of credit and has the exclusive right to market Vertitek’s technologies and industry solutions. As of the date on which these financial statements were issued, the Company has advanced a total of $25,500 to Vertitek.

 

On January 26, 2015, the Company entered into a promissory note agreement with an investor for an aggregate amount of $50,000 plus simple interest at an annual interest rate of 15%, repayable on January 26, 2017. The note is 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 Company on the date of the note or thereafter acquired, and all proceeds thereof.

 

 

PART II. INFORMATION NOT REQUIRED IN THE PROSPECTUS

 

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

 

We will pay for all expenses incurred by this offering, except for fees for underwriter’s counsel. Whether or not all of the offered shares are sold, these expenses are estimated as follows:

 

SEC registration fee		$	517
Printing fees		$	500	*
Transfer agent fees		$	1,500	*
Accounting fees and expenses		$	5,000	*
Legal fees and expenses		$	10,000	*
TOTAL		$	17,000	*

 

* Estimated.

 

ITEM 14. 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.

 

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

 

Other than the securities being registered hereunder, we have not issued any securities in the previous 12 months that were not (i) registered pursuant to the Securities Act or (ii) issued pursuant to an exemption therefrom.

 

 

ITEM 16. EXHIBITS

 

The following exhibits are filed as part of this registration statement:

 

Exhibit No.		Description
1.1		Equity Investment Agreement with Tuverga dated August 20, 2015 *
1.2		Registration Rights Agreement with Tuverga dated August 20, 2015 *
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(ii).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)
5.1		Legal Opinion of Bacchus Law Corporation *
10.1		Share Exchange Agreement with Vertitek and Masamos dated January 27, 2015 (5)
10.2		Asset Purchase Agreement with Gerald B. Hammack dated July 15, 2015 (6)
21.1		Vertitek Inc., a Wyoming corporation
23.1		Consent of Anderson Bradshaw PLLC *
23.2		Consent of Bacchus Law Corporation (included in Exhibit 5.1)

 

(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.
(5)	Incorporated by reference from our current report on Form 8-K filed with the SEC on May 28, 2015.
(6)	Incorporated by reference from our quarterly report on Form 10-Q filed with the SEC on July 20, 2015.

 

* Filed herewith

 

 

ITEM 17. UNDERTAKINGS

 

The registrant hereby undertakes:

 

1.	To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

 

	(i)	To include any prospectus required by section 10(a)(3) of the Securities Act;
	(ii)	To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
	(iii)	To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

 

2.	That for the purpose of determining liability under the Securities Act, each post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;
3.	To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering; and
4.	That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the registrant undertakes that in a primary offering of securities of the registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

 

	(i)	Any preliminary prospectus or prospectus of the registrant relating to the offering required to be filed pursuant to Rule 424;
	(ii)	Any free writing prospectus relating to the offering prepared by or on behalf of the registrant or used or referred to by the registrant;
	(iii)	The portion of any other free writing prospectus relating to the offering containing material information about the registrant or its securities provided by or on behalf of the registrant; and
	(iv)	Any other communication that is an offer in the offering made by the registrant to the purchaser.

 

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

 

In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

Each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-1 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on September 2, 2015.

 

	VALMIE RESOURCES, INC.
	By:	/s/ Gerald B. Hammack
	Name:	Gerald B. Hammack
	Title:	Chairman, President, Chief Executive Officer,
		Chief Financial Officer, Principal Accounting Officer,
		Secretary, Treasurer, Director

 

In accordance with the requirements of the Securities Act of 1933, as amended, this Registration Statement on Form S-1 was signed by the following person in the capacities and on the date so indicated.

 

Signature		Title		Date
/s/ Gerald B. Hammack		Chairman, President, Chief Executive Officer		September 2, 2015
Gerald B. Hammack		Chief Financial Officer, Principal Accounting Officer,
		Secretary, Treasurer, Director

 

 

 

EQUITY INVESTMENT AGREEMENT

 

THIS EQUITY INVESTMENT AGREEMENT (this “Agreement”) dated as of August 20, 2015, is by and among Valmie Resources, Inc., a Nevada corporation (the “Company”), and Tuverga Finance Ltd., a corporation formed pursuant to the statutes of the Republic of Cyprus (the “Investor”).

 

WHEREAS, the parties desire that, upon the terms and subject to the conditions contained herein, the Company, at its sole discretion, may issue and sell to the Investor, from time to time as provided herein, and the Investor shall purchase from the Company, up to Two Million Five Hundred Thousand Dollars ($2,500,000) of the Company’s common stock, par value $0.001 per share (the “Common Stock”); and

 

WHEREAS, the parties acknowledge that the issuance of the Common Stock contemplated herein will be made in reliance upon the provisions of Section 4(a)(2) under the Securities Act of 1933, as amended (the “Securities Act”), Rule 506 of Regulation D under the Securities Act, and the rules and regulations promulgated thereunder, and/or upon such other exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws; and

 

WHEREAS, contemporaneously with the execution and delivery of this Agreement, the Company and the Investor are executing and delivering a registration rights agreement of even date herewith (the “Registration Rights Agreement”) pursuant to which the Company has agreed to provide certain registration rights to the Investor under the Securities Act, and the rules and regulations promulgated thereunder, and applicable state securities laws.

 

NOW, THEREFORE, the Company and the Investor hereby agree as follows:

 

ARTICLE I. Certain Definitions

 

Section 1.1. “Advance” shall mean the portion of the Commitment Amount requested by the Company in the Advance Notice.

 

Section 1.2. “Advance Date” shall mean the third Trading Day after the delivery of the Advance Notice for each Advance.

 

Section 1.3. “Advance Notice” shall mean a written notice to the Investor substantially in the form set forth hereto as Exhibit A setting forth the amount of the Advance that the Company requests from the Investor.

 

Section 1.4. “Advance Notice Date” shall mean each date the Company delivers to the Investor an Advance Notice requiring the Investor to advance funds to the Company, subject to the terms of this Agreement.

 

 

Valmie Resources, Inc.

Equity Investment Agreement

Page 2 of 20

 

Section 1.5. “Closing” shall mean one of the closings of a purchase and sale of Common Stock pursuant to Section 2.3.

 

Section 1.6. “Commitment Amount” shall mean the aggregate amount of up to Two Million Five Hundred Thousand Dollars ($2,500,000) which the Investor has agreed to provide to the Company in order to purchase Common Stock pursuant to the terms and conditions of this Agreement.

 

Section 1.7. “Commitment Period” shall mean the period commencing on the date of this Agreement and expiring on the earliest to occur of (x) the date on which the Investor shall have made payment of Advances pursuant to this Agreement in the aggregate amount of Two Million Five Hundred Thousand Dollars ($2,500,000), (y) the date this Agreement is terminated pursuant to Section 2.5, or (z) the date occurring twenty-four (24) months after the date of this Agreement.

 

Section 1.8. “Damages” shall mean any losses, claims, damages, liabilities, costs and expenses (including, without limitation, reasonable attorney’s fees and disbursements and costs and expenses of expert witnesses and investigation).

 

Section 1.9. “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

Section 1.10. “FINRA” shall mean the Financial Industry Regulatory Authority.

 

Section 1.11. “Material Adverse Effect” shall mean any material adverse effect on the business, operations, assets, financial condition or prospects of the Company or its subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments to be entered into in connection herewith.

 

Section 1.12. “Market Price” shall mean the average VWAP of the Common Stock during the relevant Pricing Period.

 

Section 1.13. “Person” shall mean an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

 

Section 1.14. “Pricing Period” shall mean the three (3) consecutive Trading Days immediately preceding the Advance Notice Date.

 

Section 1.15. “Principal Market” shall mean the Nasdaq National Market, the Nasdaq SmallCap Market, the NYSE Market, the OTC Bulletin Board, the OTCQB, the OTC Pink tier or the New York Stock Exchange, whichever is at the time the principal trading exchange or market for the Common Stock.

 

Section 1.16. “Purchase Price” shall be set at fifty percent (50%) of the Market Price during the Pricing Period.

 

 

Valmie Resources, Inc.

Equity Investment Agreement

Page 3 of 20

 

Section 1.17. “Registration Statement” means the registration statement or statements of the Company filed under the Securities Act covering the resale by the Investor of the Common Stock issuable hereunder.

 

Section 1.18. “SEC” shall mean the United States Securities and Exchange Commission.

 

Section 1.19. “SEC Documents” shall mean annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and proxy statements of the Company as supplemented to the date hereof, filed by the Company for a period of at least twelve (12) months immediately preceding the date hereof or the Advance Date, as the case may be, until such time as the Company no longer has an obligation to maintain the effectiveness of the Registration Statement.

 

Section 1.20. “Trading Day” shall mean any day during which the Principal Market is open for business.

 

Section 1.21. “Transaction Documents” means this Agreement, the Registration Rights Agreement and any other documents or agreements executed in connection with the transactions contemplated hereunder.

 

Section 1.22. “VWAP” shall mean the volume weighted average price.

 

ARTICLE II. Advances

 

Section 2.1. Investments. Upon the terms and conditions set forth herein (including, without limitation, the provisions of Article VII hereof), on any Advance Notice Date the Company may request an Advance by the Investor by the delivery of an Advance Notice. The number of shares of Common Stock that the Investor shall receive for each Advance shall be determined by dividing the amount of the Advance by the Purchase Price. No fractional shares shall be issued. Fractional shares shall be rounded to the next higher whole number of shares. The aggregate maximum amount of all Advances that the Investor shall be obligated to make under this Agreement shall not exceed the Commitment Amount.

 

Section 2.2. Mechanics.

 

(a) Advance Notice. At any time during the Commitment Period, the Company may deliver an Advance Notice to the Investor, subject to the conditions set forth herein. There shall be a minimum of five (5) Trading Days between each Advance Notice Date.

 

(b) Date of Delivery of Advance Notice. An Advance Notice shall be deemed delivered on (i) the Trading Day it is received by facsimile or otherwise by the Investor if such notice is received prior to 12:00 PM Eastern European Time, or (ii) the immediately succeeding Trading Day if it is received by facsimile or otherwise after 12:00 PM Eastern European Time on a Trading Day or at any time on a day which is not a Trading Day. No Advance Notice may be deemed delivered on a day that is not a Trading Day.

 

 

Valmie Resources, Inc.

Equity Investment Agreement

Page 4 of 20

 

(c) Maximum Advance Amount. The maximum amount of any one Advance Notice shall be the greater of (i) 100% of the average daily volume of the Common Stock for the three (3) Trading Days prior to the date of delivery of the applicable Advance Notice, multiplied by the VWAP for such Trading Days or (ii) $100,000.

 

Section 2.3. Closings. On each Advance Date, (i) the Company shall deliver to the Investor shares of Common Stock representing the amount of the Advance by the Investor pursuant to Section 2.1, registered in the name of the Investor and (ii) the Investor shall deliver to the Company the amount of the Advance specified in the Advance Notice by wire transfer of immediately available funds. In addition, on or prior to each Advance Date, each of the Company and the Investor shall deliver to the other all documents, instruments and writings required to be delivered by either of them pursuant to this Agreement in order to implement and effect the transactions contemplated herein. Payment of funds to the Company and delivery of the Common Stock to the Investor shall occur in accordance with the conditions set forth herein.

 

Section 2.4. Delivery of the Common Stock. In lieu of delivering physical certificates representing the Common Stock deliverable pursuant to this Agreement and provided that the Company’s transfer agent then is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, upon request of the Investor, the Company shall use all commercially reasonable efforts to cause its transfer agent to electronically transmit the Common Stock by crediting the account of the Investor's prime broker (as specified by the Investor within a reasonable period in advance of such request) with DTC through its Deposit Withdrawal Agent Commission (“DWAC”) system or Direct Registration System (“DRS”).

 

Section 2.5. Termination of Investment. The obligation of the Investor to make an Advance to the Company pursuant to this Agreement shall terminate permanently (including with respect to an Advance Date that has not yet occurred) in the event that the Company shall at any time fail materially to comply with the requirements of Article VI.

 

Section 2.6. Agreement to Advance Funds. The Investor agrees to advance the amount specified in an Advance Notice to the Company after the completion of each of the following conditions and the other conditions set forth in this Agreement:

 

(a) the execution and delivery by the Company and the Investor of this Agreement;

 

(b) the Registration Statement shall have been declared effective by the SEC and shall remain effective and available for the resale of all the Registrable Securities (as defined in the Registration Rights Agreement) at all times until the Closing with respect to the subject Advance Notice;

 

 

Valmie Resources, Inc.

Equity Investment Agreement

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(c) the Investor shall have received the shares of Common Stock applicable to the Advance in accordance with Sections 2.3 and 2.4; and

 

(d) the Company shall have filed all required SEC Documents.

 

Section 2.7. Limitation On Amount Of Ownership. Notwithstanding anything to the contrary in this Agreement, in no event shall the Investor be entitled to purchase that number of shares of Common Stock, which when added to the sum of the number of shares of Common Stock beneficially owned (as such term is defined in Section 13(d) and Rule 13d-3 under the Exchange Act) by the Investor, would exceed 4.99% of the number of shares of Common Stock outstanding at the applicable Closing, as determined in accordance with Rule 13d-1(j) under the Exchange Act.

 

ARTICLE III. Representations and Warranties of the Investor

 

The Investor hereby represents and warrants to, and agrees with, the Company that the following are true and as of the date hereof and as of each Advance Date:

 

Section 3.1. Organization and Authorization. The Investor is duly incorporated or organized and validly existing in the jurisdiction of its incorporation or organization and has all requisite power and authority to purchase and hold the Common Stock issuable hereunder. The decision to invest and the execution and delivery of this Agreement by the Investor, the performance by the Investor of its obligations hereunder and the consummation by the Investor of the transactions contemplated hereby have been duly authorized and requires no other proceedings on the part of the Investor. The undersigned signatory of the Investor has the right, power and authority to execute and deliver this Agreement and all other instruments on behalf of the Investor. This Agreement has been duly executed and delivered by the Investor and, assuming the execution and delivery hereof and acceptance thereof by the Company, will constitute a legal, valid and binding obligation of the Investor, enforceable against the Investor in accordance with its terms.

 

Section 3.2. Evaluation of Risks. The Investor has such knowledge and experience in financial, tax and business matters as to be capable of evaluating the merits and risks of, and bearing the economic risks entailed by, an investment in the Company and of protecting its interests in connection with this transaction. It recognizes that its investment in the Company involves a high degree of risk.

 

Section 3.3. No Legal Advice From the Company. The Investor acknowledges that it had the opportunity to review this Agreement and the transactions contemplated by this Agreement with its own legal counsel and investment and tax advisors. The Investor is relying solely on such counsel and advisors and not on any statements or representations of the Company or any of its representatives or agents for legal, tax or investment advice with respect to this investment, the transactions contemplated by this Agreement or the securities laws of any jurisdiction.

 

 

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Section 3.4. Investment Purpose. The Common Stock is being purchased by the Investor for its own account and for investment purposes. The Investor agrees not to assign or in any way transfer the Investor’s rights to purchase the Common Stock or any interest therein and acknowledges that the Company will not recognize any purported assignment or transfer except in accordance with applicable federal and state securities laws. The Investor agrees not to sell, hypothecate or otherwise transfer the Common Stock unless the securities are registered under federal and applicable state securities laws or unless, in the opinion of counsel satisfactory to the Company, an exemption from such registration is available.

 

Section 3.5. Foreign Investor. The Investor is not a U.S. Person for purposes of compliance with Regulation S under the Securities Act and agrees to resell the Common Stock only in accordance with the provisions of Regulation S under the Securities Act, pursuant to registration under the Securities Act, or pursuant to an available exemption from registration, and agrees not to engage in hedging transactions with regard to the Common Stock unless in compliance with the Securities Act.

 

Section 3.6. Information. The Investor and its advisors (and its counsel), if any, have been furnished with all materials relating to the business, finances and operations of the Company and information it deems material to making an informed investment decision. The Investor and its advisors, if any, have been afforded the opportunity to ask questions of the Company and its management. Neither such inquiries nor any other due diligence investigations conducted by the Investor or its advisors, if any, or its representatives shall modify, amend or affect the Investor’s right to rely on the Company’s representations and warranties contained in this Agreement. The Investor understands that its investment involves a high degree of risk. The Investor is in position to obtain information from the Company in order to evaluate the merits and risks of this investment. The Investor has sought such accounting, legal and tax advice, as it has considered necessary to make an informed investment decision with respect to this transaction.

 

Section 3.7. Receipt of Documents. The Investor and its counsel has received and read in their entirety: (i) this Agreement; (ii) all due diligence and other information necessary to verify the accuracy and completeness of the representations, warranties and covenants of the Company contained herein; and (iii) answers to all questions the Investor submitted to the Company regarding an investment in the Company; and the Investor has relied on the information contained therein and has not been furnished with any other documents, literature, memorandum or prospectus.

 

Section 3.8. No General Solicitation. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has engaged in any form of general solicitation or general advertising in connection with the offer or sale of the shares of Common Stock offered hereby.

 

Section 3.9. Not an Affiliate. As of the date hereof, the Investor is not an officer, director or a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with the Company or any “Affiliate” of the Company (as that term is defined in Rule 405 under the Securities Act).

 

 

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Section 3.10. Trading Activities. The Investor’s trading activities with respect to the Common Stock shall be conducted in compliance with all applicable federal and state securities laws, rules and regulations and the rules and regulations of the Principal Market. The Investor agrees not to effect any short sale of the Common Stock, either directly or indirectly through its affiliates, principals or advisors, during the term of this Agreement.

 

Section 3.11. No Registration As a Dealer. The Investor will not be making a market in the Common Stock and therefore the Investor is not and will not be required to be registered as a “dealer” under the Exchange Act, either as a result of its execution and performance of its obligations under this Agreement or otherwise.

 

ARTICLE IV. Representations and Warranties of the Company

 

Except as stated in the SEC Documents, the Company hereby represents and warrants to, and covenants with, the Investor that the following are true and correct as of the date hereof:

 

Section 4.1. Organization and Qualification. The Company is duly incorporated or organized and validly existing in the jurisdiction of its incorporation or organization and has all requisite power and authority corporate power to own its properties and to carry on its business as now being conducted. Each of the Company and its subsidiaries is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect.

 

Section 4.2. Authorization, Enforcement, Compliance with Other Instruments. (i) The Company has the requisite corporate power and authority to enter into and perform this Agreement and any related agreements, in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Agreement and any related agreements by the Company and the consummation by it of the transactions contemplated hereby and thereby, have been duly authorized by the Company’s Board of Directors and no further consent or authorization is required by the Company, its Board of Directors or its stockholders, (iii) this Agreement and any related agreements have been duly executed and delivered by the Company, (iv) this Agreement, assuming the execution and delivery thereof and acceptance by the Investor, and any related agreements constitute legal, valid and binding obligations of the Company enforceable against the Company in accordance with their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies.

 

 

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Section 4.3. Capitalization. As of the date hereof, the authorized capital stock of the Company consists of 750,000,000 shares of Common Stock and 10,000,000 shares of preferred stock, par value $0.001 per share (the “Preferred Stock”) of which 63,879,270 shares of Common Stock and 2,000,000 shares of Preferred Stock are issued and outstanding. All of such outstanding shares have been validly issued and are fully paid and nonassessable. Except as disclosed in the SEC Documents, no shares of Common Stock or Preferred Stock are subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company. There are no securities or instruments containing anti-dilution or similar provisions that will be triggered by this Agreement or any related agreement or the consummation of the transactions described herein or therein. The Company has furnished to the Investor true and correct copies of the Company’s articles of incorporation, as amended and as in effect on the date hereof (the “Articles of Incorporation”), and the Company’s by-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock and the material rights of the holders thereof in respect thereto.

 

Section 4.4. No Conflict. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby will not (i) result in a violation of the Articles of Incorporation, any certificate of designation of any outstanding series of preferred stock of the Company or the By-laws or (ii) conflict with or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of any agreement, indenture or instrument to which the Company or any of its subsidiaries is a party, or result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and the rules and regulations of the Principal Market) applicable to the Company or any of its subsidiaries or by which any material property or asset of the Company or any of its subsidiaries is bound or affected and which would cause a Material Adverse Effect. Except as disclosed in the SEC Documents, neither the Company nor its subsidiaries is in violation of any term of or in default under its Articles of Incorporation or By-laws or any material contract, agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or order or any statute, rule or regulation applicable to the Company or its subsidiaries. The business of the Company and its subsidiaries is not being conducted in violation of any material law, ordinance or regulation of any governmental entity. Except as specifically contemplated by this Agreement and as required under the Securities Act and any applicable state securities laws, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under or contemplated by this Agreement in accordance with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof. The Company and its subsidiaries are unaware of any fact or circumstance that might give rise to any of the foregoing.

 

 

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Section 4.5. Financial Statements. As of their respective dates, the financial statements of the Company (the “Financial Statements”) for the two most recently completed fiscal years and any subsequent interim period complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles in the United States, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). No other information provided by or on behalf of the Company to the Investor contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

Section 4.6. No Default. The Company is not in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust or other material instrument or agreement to which it is a party or by which it is or its property is bound and neither the execution, nor the delivery by the Company, nor the performance by the Company of its obligations under this Agreement or any of the exhibits or attachments hereto will conflict with or result in the breach or violation of any of the terms or provisions of, or constitute a default or result in the creation or imposition of any lien or charge on any assets or properties of the Company under its Articles of Incorporation, By-Laws, any material indenture, mortgage, deed of trust or other material agreement applicable to the Company or instrument to which the Company is a party or by which it is bound, or any statute, or any decree, judgment, order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or its properties, in each case which default, lien or charge is likely to cause a Material Adverse Effect.

 

Section 4.7. Absence of Events of Default. Except for matters described in the SEC Documents and/or this Agreement, no Event of Default (as such term is defined in any agreement to which the Company is a party), and no event which, with the giving of notice or the passage of time or both, would become an Event of Default (as so defined), has occurred and is continuing, which would have a Material Adverse Effect.

 

Section 4.8. Intellectual Property Rights. The Company and its subsidiaries own or possess adequate rights or licenses to use all material trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and rights necessary to conduct their respective businesses as now conducted. The Company and its subsidiaries do not have any knowledge of any infringement by the Company or its subsidiaries of any trademarks, trade name rights, patents, patent rights, copyrights, inventions, licenses, service names, service marks, service mark registrations, trade secrets or other similar rights of others, and, to the knowledge of the Company, there is no claim, action or proceeding being made or brought against, or to the Company’s knowledge, being threatened against, the Company or its subsidiaries regarding trademarks, trade names, patents, patent rights, inventions, copyrights, licenses, service names, service marks, service mark registrations, trade secrets or other similar rights, and the Company and its subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

 

 

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Section 4.9. Employee Relations. Neither the Company nor any of its subsidiaries is involved in any labor dispute or, to the knowledge of the Company or any of its subsidiaries, is any such dispute threatened. None of the Company’s or its subsidiaries’ employees is a member of a union and the Company and its subsidiaries believe that their relations with their employees are good.

 

Section 4.10. Environmental Laws. The Company and its subsidiaries are (i) in compliance with any and all applicable material foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval.

 

Section 4.11. Title. The Company has good and marketable title to its properties and material assets owned by it, free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest other than such as are not material to the business of the Company. Any real property and facilities held under lease by the Company and its subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its subsidiaries.

 

Section 4.12. Insurance. The Company and each of its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its subsidiaries are engaged. Neither the Company nor any subsidiary has been refused any insurance coverage sought or applied for and neither the Company nor any subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

 

Section 4.13. Regulatory Permits. The Company and its subsidiaries possess all material certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses, and neither the Company nor any subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit.

 

 

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Section 4.14. Internal Accounting Controls. Except as disclosed in the SEC Documents, the Company and each of its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles in the United States and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

 

Section 4.15. No Material Adverse Breaches, Etc. Neither the Company nor any of its subsidiaries is subject to any charter, corporate or other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company’s officers has or is expected in the future to have a Material Adverse Effect. Except as set forth in the SEC Documents, neither the Company nor any of its subsidiaries is in breach of any contract or agreement which breach, in the judgment of the Company’s officers, has or is expected to have a Material Adverse Effect.

 

Section 4.16. Absence of Litigation. Except as disclosed in the SEC Documents, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending against or affecting the Company, the Common Stock or any of the Company’s subsidiaries, wherein an unfavorable decision, ruling or finding would (i) adversely affect the validity or enforceability of, or the authority or ability of the Company to perform its obligations under, this Agreement or any of the documents contemplated herein, or (ii) except as expressly disclosed in the SEC Documents, have a Material Adverse Effect.

 

Section 4.17. Subsidiaries. Except as disclosed in the SEC Documents, the Company does not presently own or control, directly or indirectly, any material interest in any other corporation, partnership, association or other business entity.

 

Section 4.18. Tax Status. Except for the tax returns for the year ended November 30, 2014, the Company and each of its subsidiaries has made or filed all federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject and (unless and only to the extent that the Company and each of its subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim.

 

 

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Section 4.19. Certain Transactions. None of the officers, directors or employees of the Company is presently a party to any transaction with the Company (other than for services as officers, directors or employees), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer, director or employee has a substantial interest or is an officer, director, trustee or partner, other than as set forth in the SEC Documents.

 

Section 4.20. Rights of First Refusal. The Company is not obligated to offer the securities offered hereunder on a right of first refusal basis or otherwise to any third parties including, but not limited to, current or former shareholders of the Company, underwriters, brokers, agents or other third parties.

 

Section 4.21. Use of Proceeds. The Company shall use the net proceeds from this offering for general corporate purposes, including, without limitation, the payment of loans incurred by the Company.

 

Section 4.22. Dilution. The Company is aware of and acknowledges that issuing shares of Common Stock will cause dilution to existing shareholders and could significantly increase the outstanding number of shares of Common Stock.

 

Section 4.23. Reliance on Representations. The Company acknowledges that the Investor is relying on the representations and warranties made by the Company hereunder and that such representations and warranties are a material inducement to the Investor purchasing the Common Stock. The Company further acknowledges that without such representations and warranties of the Company made hereunder, the Investor would not enter into this Agreement.

 

ARTICLE V. Indemnification

 

The Investor and the Company agree as follows:

 

Section 5.1. Indemnification.

 

(a) In consideration of the Investor’s execution and delivery of this Agreement, and in addition to all of the Company’s other obligations under this Agreement, the Company shall defend, protect, indemnify and hold harmless the Investor, and all of its officers, directors, partners, employees and agents (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Investor Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Investor Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by the Investor Indemnitees or any of them as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the Company in this Agreement or any certificate, instrument or document contemplated hereby or thereby (including the Registration Statement), (b) any breach of any covenant, agreement or obligation of the Company contained in this Agreement or any certificate, instrument or document contemplated hereby or thereby, or (c) any cause of action, suit or claim brought or made against such Investor Indemnitee based on misrepresentations or due to a breach by the Investor and arising out of or resulting from the execution, delivery, performance or enforcement of this Agreement or any instrument, document or agreement executed pursuant hereto by any of the Investor Indemnitees. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities, which is permissible under applicable law.

 

(b) In consideration of the Company’s execution and delivery of this Agreement, and in addition to all of the Investor’s other obligations under this Agreement, the Investor shall defend, protect, indemnify and hold harmless the Company and all of its officers, directors, shareholders, employees and agents (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Company Indemnitees”) from and against, and irrespective of whether any such Company Indemnitee is a party to the action for which indemnification hereunder is sought, any and all Indemnified Liabilities incurred by the Company Indemnitees or any of them as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the Investor in this Agreement or any certificate, instrument or document contemplated hereby or thereby, (b) any breach of any covenant, agreement or obligation of the Investor contained in this Agreement or any certificate, instrument or document contemplated hereby or thereby, or (c) any cause of action, suit or claim brought or made against such Company Indemnitee based on misrepresentations or due to a breach by the Investor and arising out of or resulting from the execution, delivery, performance or enforcement of this Agreement or any instrument, document or agreement executed pursuant hereto by any of the Company Indemnitees. To the extent that the foregoing undertaking by the Investor may be unenforceable for any reason, the Investor shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities, which is permissible under applicable law.

 

 

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(c) The obligations of the parties to indemnify or make contribution under this Section 5.1 shall survive termination.

 

ARTICLE VI. Covenants of the Company

 

During the Commitment Period:

 

Section 6.1. Listing of Common Stock. The Company shall maintain the Common Stock’s authorization for quotation on the Principal Market.

 

Section 6.2. Filing of SEC Documents. The Company shall file all required SEC Documents in a timely manner and shall not terminate or suspend its reporting and filing obligations.

 

Section 6.4. Corporate Existence. The Company will take all steps necessary to preserve and continue its corporate existence.

 

Section 6.5. Consolidation; Merger. The Company shall not, at any time after the date hereof, effect any merger or consolidation of the Company with or into, or a transfer of all or substantially all the assets of the Company to another entity unless the resulting successor or acquiring entity (if not the Company) assumes by written instrument the obligation to deliver to the Investor such shares of stock and/or securities as the Investor is entitled to receive pursuant to this Agreement.

 

ARTICLE VII. Conditions for Advance and Conditions to Closing

 

Section 7.1. Conditions Precedent to the Obligations of the Company. The obligation hereunder of the Company to issue and sell the shares of Common Stock to the Investor incident to each Closing is subject to the satisfaction, or waiver by the Company, at or before each such Closing, of each of the conditions set forth below.

 

(a) Accuracy of the Investor’s Representations and Warranties. The representations and warranties of the Investor shall be true and correct in all material respects.

 

(b) Performance by the Investor. The Investor shall have performed, satisfied and complied in all respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Investor at or prior to such Closing.

 

(c) Accuracy of Registration Statement. The Registration Statement shall not contain any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(d) Compliance with Securities Act. The Company and the Registration Statement shall be in compliance with the Securities Act.

 

 

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ARTICLE VIII. Choice of Law/Jurisdiction

 

Section 8.1. Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the Republic of Cyprus, without regard to the principles of conflicts of law thereof. Each party hereby irrevocably submits to the exclusive jurisdiction of courts sitting in the Republic of Cyprus for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, or that venue for such suit, action or proceeding is improper or inconvenient. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. The parties hereby waive all rights to a trial by jury. If either party shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then the prevailing party in the final disposition of such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

ARTICLE IX. Assignment; Termination

 

Section 9.1. Assignment. Neither this Agreement nor any rights of the Company or the Investor hereunder may be assigned to any other Person.

 

Section 9.2. Termination. The obligations of the Investor to make Advances under Article II shall terminate upon either (a) twenty-four (24) months after the date of this Agreement, (b) such date as the Common Stock is no longer authorized for quotation or trading on the Principal Market, (c) the date upon which the Investor has purchased the full Commitment Amount, or (d) upon any breach of this Agreement or the Registration Rights Agreement.

 

ARTICLE X. Notices

 

Section 10.1. Notices. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (i) upon hand delivery or delivery by electronic mail as a PDF, at the address below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (ii) on the second business day following the date of mailing by express courier service or on the fifth business day after deposited in the mail, in each case, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.

 

If to the Company:

 

Valmie Resources, Inc.

1001 S Dairy Ashford Road, Suite 100

Houston, TX 77077

(finance@valmie.com)

 

If to the Investor:

 

Tuverga Finance Ltd.

Vasilissis Freiderikis 10

Jacki Court, 1st Floor

Nicosia CY-1066 Cyprus

(investments@tuvergafinance.eu)

 

Either party may from time to time change its address or electronic mail for notices under this Section 10.1 by giving at least ten (10) days prior written notice of such changed address or electronic mail to the other party.

 

 

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ARTICLE XI. Miscellaneous

 

Section 11.1. Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.

 

Section 11.2. Entire Agreement; Amendments. This Agreement, together with the Registration Rights Agreement, supersedes all other prior oral or written agreements between the Investor, the Company, their affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Investor makes any representation, warranty, covenant or undertaking with respect to such matters.

 

Section 11.3. Reporting Entity for the Common Stock. The reporting entity relied upon for the determination of the trading price or trading volume of the Common Stock on any given Trading Day for the purposes of this Agreement shall be determined by the Investor in its sole discretion.

 

Section 11.4. Brokers. Each of the parties represents that it has had no dealings in connection with this transaction with any finder or broker who will demand payment of any fee or commission from the other party.

 

Section 11.5. Legal and Miscellaneous Expenses. Except as otherwise set forth in the Transaction Documents, each party shall pay the fees and expenses of its advisers, counsel, the accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. Any attorneys' fees and expenses incurred by either the Company or the Investor in connection with the preparation, negotiation, execution and delivery of any amendments to this Agreement or relating to the enforcement of the rights of either party, after the occurrence of any breach of the terms of this Agreement by the other party or any default by the other party in respect of the transactions contemplated hereunder, shall be paid on demand by the party which breached the Agreement and/or defaulted, as the case may be. The Company shall pay all fees, taxes and duties that may be levied in connection with the issuance of the Common Stock hereunder. If the Company is not DWAC or DRS eligible on an Advance Date, there will be a $5,000 charge on each Advance Date to cover costs associated with, but not limited to, brokerage deposit costs, legal review fees and wire fees. If the Company is DWAC or DRS eligible on an Advance Date, there will be a $1,500 charge on each Advance Date in order to cover the Investor’s compliance review fees. These charges may be deducted from each Advance.

 

 

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Section 11.6. Non-Disclosure of Non-Public Information.

 

(a) The Company shall not disclose non-public information concerning the Company to the Investor, its advisors, or its representatives.

 

(b) Nothing herein shall require the Company to disclose non-public information to the Investor or its advisors or representatives, provided, however, that notwithstanding anything herein to the contrary, the Company will, as hereinabove provided, immediately notify the advisors and representatives of the Investor and, if any, underwriters, of any event or the existence of any circumstance (without any obligation to disclose the specific event or circumstance) of which it becomes aware, constituting non-public information (whether or not requested of the Company specifically or generally during the course of due diligence by such persons or entities), which, if not disclosed in the prospectus included in the Registration Statement would cause such prospectus to include a material misstatement or to omit a material fact required to be stated therein in order to make the statements, therein, in light of the circumstances in which they were made, not misleading. Nothing contained in this Section 11.6 shall be construed to mean that such persons or entities other than the Investor (without the written consent of the Investor prior to disclosure of such information) may not obtain non-public information in the course of conducting due diligence in accordance with the terms of this Agreement and nothing herein shall prevent any such persons or entities from notifying the Company of their opinion that based on such due diligence by such persons or entities, that the Registration Statement contains an untrue statement of material fact or omits a material fact required to be stated in the Registration Statement or necessary to make the statements contained therein, in light of the circumstances in which they were made, not misleading.

 

(signature page follows)

 

 

Valmie Resources, Inc.

Equity Investment Agreement

Page 17 of 20

 

IN WITNESS WHEREOF, the parties hereto have caused this Equity Investment Agreement to be executed by the undersigned, thereunto duly authorized, as of the date first set forth above.

 

Valmie Resources, Inc.

     

By:	/s/ Gerald Hammack
Name:	Gerald Hammack
Title:	Chief Executive Officer and President

 

Tuverga Finance Ltd.

 

By:	/s/ Antoine Ratsaphong
Name:	Antoine Ratsaphong
Title:	Director

 

 

Valmie Resources, Inc.

Equity Investment Agreement

Page 18 of 20

 

EXHIBIT “A”

 

FORM OF ADVANCE NOTICE

 

[VALMIE RESOURCES, INC. LETTERHEAD]

 

Tuverga Finance Ltd.

Vasilissis Freiderikis 10

Jacki Court, 1st Floor

Nicosia CY-1066 Cyprus

(investments@tuvergafinance.eu)

 

Gentlemen:

 

The undersigned hereby certifies, with respect to the sale of shares of Common Stock of Valmie Resources, Inc. (the “Company”) issuable in connection with this Advance Notice, which is being delivered pursuant to the Equity Investment Agreement between the Company and Tuverga Finance Ltd., dated as of August 20, 2015 (the “Agreement”), as follows:

 

1. The undersigned is the duly appointed Chief Executive Officer of the Company.

 

2. There are no fundamental or material changes to the information set forth in the Registration Statement which would require the Company to file a post-effective amendment to the Registration Statement.

 

3. The Company has performed all of the covenants and agreements to be performed by the Company under the Agreement, and the Company has complied in all material respects with all obligations and conditions contained in the Agreement on or prior to the Advance Notice Date, and the Company shall continue to perform and comply with all covenants and agreements to be performed by the Company through the applicable Closing. All conditions under the Agreement to the delivery of this Advance Notice are satisfied as of the date hereof. Since the date of the Company’s last financial statements, there has been no Material Adverse Effect.

 

4. The undersigned hereby represents, warrants and covenants that the Company has filed all SEC Documents that it is required to file pursuant to applicable securities laws. None of the SEC Documents or other public disclosures (including, without limitation, press releases) contain any untrue statement of a material fact, or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

5. The Registration Statement does not contain any untrue statement of a material fact, or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

 

Valmie Resources, Inc.

Equity Investment Agreement

Page 19 of 20

 

6. The Company and the Registration Statement are in compliance with the Securities Act.

 

7. No Registration Default (as defined in the Registration Rights Agreement between the Company and Tuverga Finance Ltd., dated as of August [  ], 2015 (the “Registration Rights Agreement”)) has occurred and the Company is not in breach of the Agreement or the Registration Rights Agreement.

 

8. The Advance requested by this Advance Notice is for $__________.

 

9. For purposes of calculating the maximum amount of shares that the Investor may purchase pursuant to Section 2.7 of the Agreement, 4.99% of the number of shares of Common Stock outstanding as of the date hereof equals _____________ shares.

 

10. The Company represents and warrants to the Investor that this Advance Notice complies in all respects with the Agreement.

 

11. All capitalized terms used in this Advance Notice and not otherwise defined herein shall have the same meaning ascribed to them as in the Agreement.

 

The undersigned has executed this Advance Notice as of the _____ day of _____________, 20___.

  

	VALMIE RESOURCES, INC.
	By:
	Name:
	Title:

 

 

Valmie Resources, Inc.

Equity Investment Agreement

Page 20 of 20

 

EXHIBIT “B”

 

CLOSING NOTICE

 

[TUVERGA FINANCE LTD. LETTERHEAD]

 

Valmie Resources, Inc.

1001 S Dairy Ashford Road, Suite 100

Houston, TX 77077

(finance@valmie.com)

 

Gentlemen:

 

We are in receipt of your Advance Notice dated ________________. Pursuant to the Agreement, we inform you of the following:

 

Advance Date: [ 3 trading days after above date ]

 

Amount of Advance: [  ]

 

Pricing Period: [ Relevant dates, i.e. May 6, 7, 8, 2015 ]

 

Market Price: [ 3 day VWAP ]

 

Number of shares of Common Stock to be issued: [ Amount of Advance / Market Price ]

 

Fees to be deducted from the above Advance: [ Either $1,500 or $5,000 ]

 

Please have the above number of shares of Common Stock sent to our account as follows:

 

[ DWAC/ DRS/ Physical certificate ]

[ Broker ]

[ Address, if physical certificate ]

[ Account Number ]

 

Thank you.

 

	Tuverga Finance Ltd.
	By:
	Name:	Antoine Ratsaphong
	Title:	Director

 

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) dated as of August ___ 2015, is by and among Valmie Resources, Inc., a Nevada corporation (the “Company”), and Tuverga Finance Ltd., a corporation formed pursuant to the statutes of the Republic of Cyprus (the “Investor”).

 

WHEREAS, in connection with the equity investment agreement by and among the Company and the Investor of even date herewith (the “Investment Agreement”), the Company has agreed to issue and sell to the Investor up to that number of shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), having an aggregate purchase price of up to Two Million Five Hundred Thousand Dollars ($2,500,000) to be purchased pursuant to the terms and subject to the conditions set forth in the Investment Agreement; and

 

WHEREAS, to induce the Investor to execute and deliver the Investment Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “Securities Act”), and applicable state securities laws, with respect to the shares of Common Stock issuable pursuant to the Investment Agreement.

 

NOW THEREFORE, in consideration of the foregoing promises and the mutual covenants contained hereinafter and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows:

 

ARTICLE I. Certain Definitions

 

Section 1.1. “Register” and “Registration” shall refer to the registration effected by the Company preparing and filing a Registration Statement in compliance with the Securities Act and pursuant to Rule 415 under the Securities Act or any successor rule providing for offering securities on a continuous basis, and the declaration or ordering of effectiveness of such Registration Statement by the SEC.

 

Section 1.2. “Registrable Securities” shall mean (i) the shares of Common Stock issued or issuable pursuant to the Investment Agreement, and (ii) any shares of capital stock issued or issuable with respect to such shares of Common Stock, if any, as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, which have not been (x) included in the Registration Statement that has been declared effective by the SEC, or (y) sold under circumstances meeting all of the applicable conditions of Rule 144 (or any similar provision then in force) under the Securities Act.

 

Section 1.3. “Registration Statement” means the registration statement or statements of the Company filed under the Securities Act covering the Registrable Securities.

 

 

Valmie Resources, Inc.

Registration Rights Agreement

Page 2 of 9

 

All capitalized terms used in this Agreement and not otherwise defined herein shall have the same meaning ascribed to them as in the Investment Agreement.

 

ARTICLE II. Registration

 

Section 2.1. Filing of Registration Statement. Pursuant to the terms and conditions set forth herein, the Company shall, not more than 15 days after the date of this Agreement, file with the SEC the Registration Statement on Form S-1 (or, if such form is unavailable for such Registration, on such other form as is available for such Registration), covering the resale of all of the Registrable Securities. Such Registration Statement shall state that, in accordance with Rule 416 promulgated under the Securities Act, the Registration Statement also covers an indeterminate number of additional shares of Common Stock as may become issuable upon stock splits, stock dividends or similar transactions. The Company shall initially Register for resale 10,000,000 shares of Common Stock, except to the extent that the SEC requires the share amount to be reduced as a condition of effectiveness.

 

Section 2.2. Moratorium on Additional Registration Statements. The Company will not file any other registration statement for other securities until thirty (30) calendar days after the Registration Statement is declared effective by the SEC.

 

ARTICLE III. Related Obligations

 

At such time as the Company is obligated to prepare and file the Registration Statement with the SEC pursuant to the terms and conditions herein, the Company shall have the following obligations with respect to the Registration Statement:

 

Section 3.1. Timeline for Effectiveness. The Company shall use all commercially reasonable efforts to cause the Registration Statement to become effective within ninety (90) days after the date that the Registration Statement is filed.

 

Section 3.2. Registration Period. The Company shall use all commercially reasonable efforts to keep such Registration Statement effective until the earlier to occur of the date on which (i) the Investor shall have sold all the Registrable Securities; or (ii) the Company has no right to sell any additional shares of Common Stock under the Investment Agreement (the “Registration Period”). The Investor shall notify the Company when the Investor has sold all the Registrable Securities.

 

Section 3.3. Factual Presentation. The Registration Statement (including any amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading.

 

 

Valmie Resources, Inc.

Registration Rights Agreement

Page 3 of 9

 

Section 3.4. Response to Inquiries/Comments. The Company shall use all commercially reasonable efforts to respond to all SEC comments within five (5) business days from receipt of such comments by the Company. In addition, the Company shall use all commercially reasonable efforts to cause the Registration Statement relating to the Registrable Securities to become effective no later than five (5) business days after notice from the SEC that the Registration Statement may be declared effective.

 

Section 3.5. Amendments. The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to the Registration Statement and the prospectus contained therein, which prospectus is to be filed pursuant to Rule 424 under the Securities Act, as may be necessary to keep the Registration Statement effective during the Registration Period. If requested by the Investor, the Company shall (i) as soon as reasonably practical incorporate in a prospectus supplement or post-effective amendment such information as the Company reasonably determines should be included therein relating to the sale and distribution of the Registrable Securities, including, without limitation, information with respect to the offering of the Registrable Securities to be sold in such offering; (ii) make all required filings of such prospectus supplement or post-effective amendment as soon as reasonably possible after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) supplement or make amendments to the Registration Statement if reasonably requested by the Investor.

 

Section 3.6. Compliance with the Securities Act. During the Registration Period, the Company shall comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by the Registration Statement until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by the Investor thereof as set forth in the Registration Statement.

 

Section 3.7. Delivery of Documentation. The Company shall make available to the Investor and its legal counsel without charge, promptly after the same is prepared and filed with the SEC, an electronic copy of the Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits, the prospectus included in the Registration Statement (including each preliminary prospectus) and, with regards to the Registration Statement, any correspondence by or on behalf of the Company to the SEC or the staff of the SEC and any correspondence from the SEC or the staff of the SEC to the Company or its representatives. In addition, upon the effectiveness of the Registration Statement, the Company shall make available copies of the prospectus, via EDGAR, included in the Registration Statement and all amendments and supplements thereto.

 

Section 3.8. Registration Default. As promptly as practicable after becoming aware of such event, the Company shall notify the Investor in writing of the happening of any event as a result of which the prospectus included in the Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (a “Registration Default”) and use all diligent efforts to promptly prepare a supplement or amendment to the Registration Statement and take any other necessary steps to cure such Registration Default, and make available copies of such supplement or amendment to the Investor. The Company acknowledges that a failure to cure a Registration Default within ten (10) business days will cause the Investor to suffer damages in an amount that will be difficult to ascertain.

 

 

Valmie Resources, Inc.

Registration Rights Agreement

Page 4 of 9

 

Section 3.9. Stop Orders; Suspension of Effectiveness. The Company shall use all commercially reasonable efforts to prevent the issuance of any stop order or other suspension of effectiveness of the Registration Statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify the Investor of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding concerning the effectiveness of the Registration Statement.

 

Section 3.10. Review by Investor/Investor’s Counsel. The Company shall permit the Investor and its legal counsel to review and comment upon the Registration Statement and all amendments and supplements thereto at least one (1) calendar day prior to their filing with the SEC. However, any postponement of a filing of the Registration Statement or any postponement of a request for acceleration or any postponement of the effective date or effectiveness of the Registration Statement by written request of the Investor (collectively, the “Investor’s Delay”) shall not act to trigger any penalty of any kind, or any cash amount due or any in-kind amount due to the Investor from the Company under any and all agreements of any nature or kind between the Company and the Investor. The event(s) of an Investor’s Delay shall act to suspend all obligations of any kind or nature of the Company under any and all agreements of any nature or kind between the Company and the Investor.

 

Section 3.11. Notification to Investor/Investor’s Counsel. The Company shall promptly notify the Investor and its legal counsel (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed, and when the Registration Statement or any post-effective amendment has become effective; (ii) of any request by the SEC for amendments or supplements to the Registration Statement or related prospectus or related information, (iii) of the Company’s reasonable determination that a post-effective amendment to the Registration Statement would be appropriate, (iv) in the event the Registration Statement is no longer effective, or (v) if the Registration Statement is stale as a result of the Company’s failure to timely file its financial statements or otherwise.

 

ARTICLE IV. Obligations of the Investor

 

Section 4.1. Cooperation from Investor. At least five (5) calendar days prior to the first anticipated filing date of the Registration Statement, the Company shall notify the Investor in writing of the information the Company requires from the Investor for the Registration Statement. The Investor agrees to furnish to the Company with such information regarding itself, the Registrable Securities and the intended method of disposition of the Registrable Securities as shall reasonably be required. The Investor covenants and agrees that, in connection with any sale of Registrable Securities by it pursuant to the Registration Statement, it shall comply with the “Plan of Distribution” section of the then current prospectus relating to the Registration Statement.

 

 

Valmie Resources, Inc.

Registration Rights Agreement

Page 5 of 9

 

Section 4.1. Discontinuation of Disposition. The Investor agrees that, upon receipt of written notice from the Company of the happening of any event which may cause a Registration Default, the Investor will immediately discontinue disposition of the Registrable Securities pursuant to the Registration Statement until the Investor’s receipt of the copies of the supplemented or amended prospectus resolving such Registration Default.

 

ARTICLE V. Indemnification

 

The Investor and the Company agree as follows:

 

Section 5.1. Indemnification.

 

(a) In consideration of the Investor’s execution and delivery of this Agreement, and in addition to all of the Company’s other obligations under this Agreement, the Company shall defend, protect, indemnify and hold harmless the Investor, and all of its officers, directors, partners, employees and agents (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Investor Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Investor Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by the Investor Indemnitees or any of them as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the Company in this Agreement or any certificate, instrument or document contemplated hereby or thereby (including the Registration Statement), (b) any breach of any covenant, agreement or obligation of the Company contained in this Agreement or any certificate, instrument or document contemplated hereby or thereby, or (c) any cause of action, suit or claim brought or made against such Investor Indemnitee based on misrepresentations or due to a breach by the Company and arising out of or resulting from the execution, delivery, performance or enforcement of this Agreement or any instrument, document or agreement executed pursuant hereto by any of the Investor Indemnitees. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities, which is permissible under applicable law.

 

(b) In consideration of the Company’s execution and delivery of this Agreement, and in addition to all of the Investor’s other obligations under this Agreement, the Investor shall defend, protect, indemnify and hold harmless the Company and all of its officers, directors, shareholders, employees and agents (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Company Indemnitees”) from and against, and irrespective of whether any such Company Indemnitee is a party to the action for which indemnification hereunder is sought, any and all Indemnified Liabilities incurred by the Company Indemnitees or any of them as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the Investor in this Agreement or any certificate, instrument or document contemplated hereby or thereby, (b) any breach of any covenant, agreement or obligation of the Investor contained in this Agreement or any certificate, instrument or document contemplated hereby or thereby, or (c) any cause of action, suit or claim brought or made against such Company Indemnitee based on misrepresentations or due to a breach by the Investor and arising out of or resulting from the execution, delivery, performance or enforcement of this Agreement or any instrument, document or agreement executed pursuant hereto by any of the Company Indemnitees. To the extent that the foregoing undertaking by the Investor may be unenforceable for any reason, the Investor shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities, which is permissible under applicable law.

 

 

Valmie Resources, Inc.

Registration Rights Agreement

Page 6 of 9

 

(c) The obligations of the parties to indemnify or make contribution under this Section 5.1 shall survive termination of this Agreement.

 

ARTICLE VI. Assignment; Amendment

 

Section 6.1. No Assignment of Registration Rights. This Agreement and the rights, agreements or obligations hereunder may not be assigned, by operation of law, merger or otherwise, without the prior written consent of the other party hereto, and any purported assignment by a party without prior written consent of the other party will be null and void and not binding on such other party.

 

Section 6.2. Amendment of Registration Rights. The provisions of this Agreement may be amended only with the written consent of the Company and the Investor.

 

ARTICLE VII. Choice of Law/Jurisdiction

 

Section 7.1. Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the Republic of Cyprus, without regard to the principles of conflicts of law thereof. Each party hereby irrevocably submits to the exclusive jurisdiction of the courts of the Republic of Cyprus for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, or that venue for such suit, action or proceeding is improper or inconvenient . Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. The parties hereby waive all rights to a trial by jury. If either party shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then the prevailing party in the final disposition of such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

 

Valmie Resources, Inc.

Registration Rights Agreement

Page 7 of 9

 

ARTICLE VIII. Notices

 

Section 8.1. Notices. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (i) upon hand delivery or delivery by electronic mail as a PDF, at the address below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (ii) on the second business day following the date of mailing by express courier service or on the fifth business day after deposited in the mail, in each case, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.

 

If to the Company:

 

Valmie Resources, Inc.

1001 S Dairy Ashford Road, Suite 100

Houston, TX 77077

(finance@valmie.com)

 

If to the Investor:

 

Tuverga Finance Ltd.

Vasilissis Freiderikis 10

Jacki Court, 1st Floor

Nicosia CY-1066 Cyprus

(investments@tuvergafinance.eu)

 

Either party may from time to time change its address or electronic mail for notices under this Section 8.1 by giving at least ten (10) days prior written notice of such changed address or electronic mail to the other party.

 

ARTICLE IX. Miscellaneous

 

Section 9.1. Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.

 

 

Valmie Resources, Inc.

Registration Rights Agreement

Page 8 of 9

 

Section 9.2. Entire Agreement; Amendments. This Agreement, together with the Investment Agreement, supersedes all other prior oral or written agreements between the Investor, the Company, their affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Investor makes any representation, warranty, covenant or undertaking with respect to such matters.

 

Section 9.3. Expenses of Registration. All expenses incurred in connection with the Registration(s) contemplated herein, including, without limitation, all registration, listing and qualifications fees, printing and accounting fees, and fees and disbursements of counsel for the Company shall be paid by the Company.

 

Section 9.4. Non-Disclosure of Non-Public Information.

 

(a) The Company shall not disclose non-public information concerning the Company to the Investor, its advisors, or its representatives.

 

(b) Nothing herein shall require the Company to disclose non-public information to the Investor or its advisors or representatives, provided, however, that notwithstanding anything herein to the contrary, the Company will, as hereinabove provided, immediately notify the advisors and representatives of the Investor and, if any, underwriters, of any event or the existence of any circumstance (without any obligation to disclose the specific event or circumstance) of which it becomes aware, constituting non-public information (whether or not requested of the Company specifically or generally during the course of due diligence by such persons or entities), which, if not disclosed in the prospectus included in the Registration Statement would cause such prospectus to include a material misstatement or to omit a material fact required to be stated therein in order to make the statements, therein, in light of the circumstances in which they were made, not misleading. Nothing contained in this Section 9.4 shall be construed to mean that such persons or entities other than the Investor (without the written consent of the Investor prior to disclosure of such information) may not obtain non-public information in the course of conducting due diligence in accordance with the terms of this Agreement and nothing herein shall prevent any such persons or entities from notifying the Company of their opinion that based on such due diligence by such persons or entities, that the Registration Statement contains an untrue statement of material fact or omits a material fact required to be stated in the Registration Statement or necessary to make the statements contained therein, in light of the circumstances in which they were made, not misleading.

 

(signature page follows)

 

 

IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed by the undersigned, thereunto duly authorized, as of the date first set forth above.

 

Valmie Resources, Inc.
By:	/s/ Gerald Hammack
Name:	Gerald Hammack
Title:	Chief Executive Officer and President
Tuverga Finance Ltd.
By:	/s/ Antoine Ratsaphong
Name:	Antoine Ratsaphong
Title:	Director

 

 

 

 

September 2, 2015

 

Via EDGAR

 

Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549

 

Ladies and Gentlemen:

 

Re:

Valmie Resources, Inc. (the “Company”)

 

We are counsel for the Company and are rendering this opinion in connection with the filing of a Registration Statement on Form S-1 (the “Registration Statement”) by the Company with the Securities and Exchange Commission on or about September 2, 2015. The Registration Statement relates to the resale of an aggregate of 14,839,270 shares of the Company’s common stock, par value $0.001 per share (each, a “Share”), by the selling shareholders referenced therein.

 

We are qualified to practice law in the United States as our managing attorney is a member of the Washington State Bar Association.

 

In connection with this opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of such records of the Company and such agreements, certificates of public officials, certificates of officers or other representatives of the Company and others, and such other statements, documents, certificates and corporate or other records as we have deemed necessary or appropriate as a basis for the opinion set forth herein. In particular, we have examined:

1.	The Amended and Restated Articles of Incorporation of the Company dated December 11, 2014;
2.	The Bylaws of the Company dated August 26, 2011;
3.	The Registration Statement;
4.	The Equity Investment Agreement between the Company and Tuverga Finance Ltd. (“Tuverga”) dated August 20, 2015;
5.	The Registration Rights Agreement between the Company and Tuverga dated August 20, 2015;
6.	Certain resolutions of the Board of Directors of the Company; and
7.	Such other documents and records as we have deemed relevant.

 

We have assumed the authenticity of all documents submitted to us as originals, the genuineness of all signatures, the legal capacity of natural persons and the conformity to the originals of all documents submitted to us as copies. We have also assumed that all documents that we have examined, and that parties other than the Company have executed, have been duly and validly authorized, executed and delivered by, and are legally valid and binding on and enforceable against, each of such parties, and that such parties have obtained all required consents, permits and approvals.

 

 

 

 

Based on the foregoing, and subject to the qualifications and limitations stated herein, we are of the opinion that:

 

1.	The 3,829,270 issued Shares being registered on behalf of the selling shareholders have been duly authorized and legally issued as fully paid and non-assessable shares of the Company’s common stock; and

 

2.	The 10,000,000 unissued Shares being registered on behalf of Tuverga will, when sold, be duly authorized and legally issued as fully paid and non-assessable shares of the Company’s common stock.

 

This opinion is limited to the federal securities laws of the United States and Chapter 78 of the Nevada Revised Statutes. We express no opinion with respect to any state securities laws (commonly known as blue sky laws) or any federal or state laws, regulations or rules not otherwise expressly referenced herein. We assume no obligation to update or supplement this opinion to reflect any facts or circumstances which may hereafter come to our attention with respect to this opinion and the statements expressed above, including any changes in applicable laws which may hereafter occur.

 

We consent to the filing of this opinion as an exhibit to the Registration Statement and also consent to the reference of our name in the prospectus which forms a part of the Registration Statement. In giving such consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations promulgated thereunder.

 

Yours truly,

 

Bacchus Law Corporation

 

/s/ BACCHUS LAW CORPORATION  

 

 

 

EXHIBIT 23.1

 

 

Russell E. Anderson, CPA Russ Bradshaw, CPA William R. Denney, CPA Kristofer Heaton, CPA		CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM   To the Board of Directors Valmie Resources, Inc. 1001 S Dairy Ashford Road, Suite 100 Houston, TX 77077   We hereby consent to the incorporation of our report dated March 13, 2015, with respect to the financial statements of Valmie Resources, Inc. for the years ended November 30, 2014 and 2013, in the Registration Statement of Valmie Resources, Inc. on Form S-1 to be filed on or about September 2, 2015. We also consent to the use of our name and the references to us included in the Registration Statement.   /s/ Anderson Bradshaw PLLC                                 Anderson Bradshaw PLLC Salt Lake City, Utah September 2, 2015
5296 S. Commerce Dr
Suite 300
Salt Lake City, Utah
84107
USA
(T) 801.281.4700
(F) 801.281.4701
abcpas.net