UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-1
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
WELL
POWER, INC.
(Exact
name of registrant in its charter)
Nevada |
|
61-1728810 |
(State or other jurisdiction of incorporation
or organization) |
(Primary Standard Industrial Classification
Code Number) |
(I.R.S. Employer Identification Number) |
11111
Katy Freeway
Suite
#9 110
Houston,
TX 77079, (713) 973-5738
(Address,
including zip code, and telephone number,
including
area code, of registrant’s principal executive offices)
N/A
(Name,
address, including zip code, and telephone number, including area code, of agent for service)
Copies
of communications to:
Gregg
E. Jaclin, Esq.
Szaferman,
Lakind, Blumstein & Blader, P.C.
101
Grovers Mill Road, Second Floor
Lawrenceville,
NJ 08648
Tel.
No.: (609) 275-0400
Fax
No.: (609) 275-4511
Approximate
date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, 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 of 1933,
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 of 1933, 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 of 1933, 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 12b-2
of the Exchange Act.
Large accelerated filer |
[ ] |
Accelerated filer |
[ ] |
Non-accelerated filer |
[ ] |
Smaller reporting company |
[x] |
(Do not check if a smaller reporting company) |
Calculation
of Registration Fee
Title
of Each Class of Securities to be Registered | |
Amount
to be Registered (1) | |
Proposed
Maximum Offering Price Per Share (2) | |
Proposed
Maximum Aggregate Offering Price | |
Amount
of Registration Fee |
Common stock, par value $0.001
per share, issuable pursuant to certain equity purchase agreement | |
| 14,370,000
(3) | | |
$ | 0.053 | | |
$ | 761,610.00 | | |
$ | 88.50 | |
Total | |
| 14,370,000 | | |
| | | |
$ | 761,610.00 | | |
$ | 88.50 | |
|
(1) |
We are registering 14,370,000
shares of our common stock that we will put to Premier Venture Partners, LLC pursuant to that certain equity purchase agreement
(the “Equity Purchase Agreement”). The Equity Purchase Agreement was entered into on August 26, 2014. In the event
of stock splits, stock dividends or similar transactions involving the common stock, the number of common shares registered
shall, unless otherwise expressly provided, automatically be deemed to cover the additional securities to be offered or issued
pursuant to Rule 416 promulgated under the Securities Act of 1933, as amended (the “Securities Act”). In the event
that the adjustment provisions of the Equity Purchase Agreement require the registrant to issue more shares than are being
registered in this registration statement, for reasons other than those stated in Rule 416 of the Securities Act, the registrant
will file a new registration statement to register those additional shares. |
|
|
|
|
(2) |
The offering price has been estimated
solely for the purpose of computing the amount of the registration fee in accordance with Rule 457(o) of the Securities Act
on the basis of the closing price of the common stock of the registrant as reported on the OTCQB on November 21, 2014. |
|
|
|
|
(3) |
Including an aggregate of 3,955,070
shares of our common stock issued upon the execution of the Equity Purchase Agreement (“Initial Commitment Shares”) |
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 of 1933 or until the registration statement shall become effective
on such date as the commission, acting pursuant to said section 8(a), may determine.
The
information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission (the “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 state where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS |
SUBJECT TO COMPLETION,
DATED December ____, 2014 |
14,370,000
Shares of Common stock
WELL
POWER, INC.
This
prospectus relates to the resale of up to 14,370,000 shares of common stock of Well Power, Inc. (“we” or the “Company”),
par value $0.001 per share (the “Common Stock”), issuable to Premier Venture Partners, LLC (“Premier Venture”)
pursuant to that the Equity Purchase Agreement. The Equity Purchase Agreement permits us to “put” up to $10,000,000
in shares of our Common Stock to Premier over a period of up to thirty-six (36) months commencing from the effectiveness of the
registration statement, or until the termination of the Equity Purchase Agreement in accordance with the terms and provisions
thereof (the “Open Period”). We will not receive any proceeds from the resale of these shares of Common Stock. However,
we will receive proceeds from the sale of securities pursuant to our exercise of the put right offered by Premier Venture. Premier
Venture is deemed an underwriter for our common stock.
The
selling stockholders may offer all or part of the shares for resale from time to time through public or private transactions,
at either prevailing market prices or at privately negotiated prices. The Company is paying all of the registration expenses incurred
in connection with the registration of the shares except for underwriting discounts, selling commissions, brokerage fees and related
expenses.
Our
common stock is quoted on the OTCQB under the ticker symbol WPWR. On November 21, 2014, the closing price of our common stock
was $0.053 per share.
Investing
in our common stock involves a high degree of risk. See “Risk Factors” beginning on page 7 to read about
factors you should consider before investing in shares of our common stock.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The
Date of This Prospectus Is: _____, 2014
TABLE
OF CONTENTS
PROSPECTUS
SUMMARY
This
summary highlights selected information contained elsewhere in this Prospectus. This summary does not contain all the information
that you should consider before investing in the common stock of Well Power, Inc. (referred to herein as the “Company,”
“we,” “our,” and “us”). You should carefully read the entire Prospectus, including “Risk
Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and
the accompanying financial statements and notes before making an investment decision.
Business
Overview
Well
Power, Inc. was incorporated on March 26, 2007 under the name of “Vortec
Electronics, Inc.” On December 10, 2013, we filed Articles of Merger with the Secretary
of State of Nevada in order to effectuate a merger with our wholly-owned subsidiary, Well Power, Inc. (the “Merger”)
whose shareholder approval was not required pursuant to Section 92A.180 of the Nevada Revised Statutes. As part of the merger,
our board of directors (“the Board”) authorized a change in our name to “Well Power, Inc.” and our Articles
of Incorporation were amended to reflect this name change accordingly. Our ticker symbol subsequently changed from “VOELD”
to “WPWR” to resemble our new name.
Since
the Merger, we have acquired an exclusive license from ME Resource Corporation (“MEC”), a Canadian publicly listed
company for which a director and the Chief Technology Officer is related to our President Dan Patience. MEC is creating mobile
and scalable Wellhead Micro-Refinery Units (“MRUs”) deployable close to the wellhead to process raw natural gas into
liquid fuels and clean power. As a result of the license with MEC, we are now in the business of distributing MRUs in the State
of Texas and from there into other geographical areas.
The
product is still under development, which is ongoing, and the first MRU is expected to occur within a year. Discussions are ongoing
to raise capital to begin construction of a commercial unit. There is no assurance that we will be able to raise the capital needed
to develop the first MRU. Our expectation is that we will obtain financing, chose a site for the MRU, and begin construction of
the unit in the third quarter. As such, we will not be able to realize any revenue from the sale of MRUs until the development
has completed and a commercialized product is ready for launch.
Our
plan is to assist the development of the MRUs and distribute them in our licensed territory. We hope to provide oil and gas producers
and operators in the State of Texas a solution to process otherwise wasted natural gas, including stranded, shut-in, flared and
vented gas and produce valued end-products including engineered fuel (diesel, diluents, synthetic crude) and electrical power.
The MRU is a novel method and apparatus, for producing chemicals, heat, energy and water from a methane-containing gas. The innovative
method and apparatus makes use of heterogeneous catalysis in a single-vessel, beginning with the partial oxidation of methane
to produce synthesis gas followed by a Fischer-Tropsch reaction to produce chemicals and other end products with no excess hydrogen.
Under
our license agreement, we agreed to pay MEC $400,000 for our exclusive license; the money will go toward the unit cost of an MRU
at $800,000 or, alternatively, a revenue sharing arrangement where MEC leases the MRU at 50% unit cost and shares in 50% of the
net revenue generated. In either event, this money will be applied to the technical and engineering development of the first demonstration
MRU in the territory and may be used to develop catalyst for specific engineered fuels.
The
payment to MEC was due in two installments: i) $100,000 within thirty (30) days of January 29, 2014; and ii) balance of $300,000
within ninety (90) days of January 29, 2014. We have made total cash payments of $379,000 subsequent to the quarter ended July
31, 2014.
Equity
Purchase Agreement with Premier Venture
On
August 26, 2013, we entered into the Equity Purchase Agreement with Premier Venture, a California liability company. Pursuant
to the terms of the Equity Purchase Agreement, Premier Venture committed to purchase up to $10,000,000 of our Common Stock during
the Open Period. From time to time during the Open Period, we may deliver a drawdown notice to Premier Venture which states the
dollar amount that we intend to sell to Premier Venture on a date specified in the put notice (the “Put Notice”).
The maximum investment amount per notice shall not exceed the lesser of (i) 200% of the average daily trading volume of Company’s
common stock on the five trading days prior to the day the Put Notice is received by Premier Venture and (ii) 110% of any previous
put amount during the maximum thirty-six (36) month period (or for the first Put Notice, 2,000,000 shares). The total purchase
price to be paid, in connection to the Put Notice, by Premier Venture shall be calculated at a thirty percent (30%) discount to
the lowest individual daily volume weighted average price of the Common Stock during such trading day (“VWAP”) of
during the five (5) consecutive trading days immediately after the applicable Put notice date, notwithstanding certain provisions
pursuant to the Equity Purchase Agreement, less six hundred dollars ($600.00). We have more shares reserved than are covered in
this registration statement. In consideration for the execution and delivery of the Equity Purchase Agreement by Premier Venture,
we issued Premier Venture 3,955,070 shares of Company’s Common Stock (the “Initial Commitment Shares”), at a
purchase price equal to 30% discount to the lowest total share price based on the daily VWAPs of the Common Stock on the three
(3) trading days immediately preceding the execution date the Equity Purchase Agreement.
In
connection with the Equity Purchase Agreement, we also entered into a registration rights agreement (the “Registration Rights
Agreement”) with Premier Venture, pursuant to which we are obligated to file a registration statement with the SEC. We are
obligated to use all commercially reasonable efforts to maintain an effective registration statement until termination of the
Equity Purchase Agreement.
The
14,370,000 shares to be registered herein represent 12.85% of the shares issued and outstanding, assuming that the selling stockholder
will sell all of the shares offered for sale.
At
an assumed purchase price of $0.0371 (representing 70% of the closing price of our Common Stock of $0.053 on November 21, 2014),
we will be able to receive up to $533,127 in gross proceeds, assuming the sale of the entire 14,370,000 shares being registered
hereunder pursuant to the Equity Purchase Agreement. Accordingly, we would be required to register an additional 255,171,779 shares
to obtain the balance of $9,466,873 under the Equity Purchase Agreement. We are currently authorized to issue 4,500,000,000 shares
of our common stock. Premier Venture has agreed to refrain from holding an amount of shares which would result in Premier Venture
owning more than 4.99% of the then-outstanding shares of our common stock at any one time.
There
are substantial risks to investors as a result of the issuance of shares of our Common Stock under the Equity Purchase Agreement.
These risks include dilution of stockholders’ percentage ownership, significant decline in our stock price and our inability
to draw sufficient funds when needed.
Premier
Venture will periodically purchase our Common Stock under the Equity Purchase Agreement and will, in turn, sell such shares to
investors in the market at the market price. This may cause our stock price to decline, which will require us to issue increasing
numbers of common shares to Premier Venture to raise the same amount of funds, as our stock price declines.
The
aggregate investment amount of $10,000,000 was determined based on numerous factors, including the following:
|
• |
Current financial operating
needs |
|
• |
Financing of workover projects |
|
• |
Acquisition of assets,
business and/or operations |
|
• |
Acquisition of additional
licensing |
|
• |
Ot1her purposes that the
Board in its good faith deem in the best interest of the Company |
Where
You Can Find Us
Our
mailing address is 11111 Katy Freeway, Suite # 910, Houston, TX
77079, and our telephone number is (713) 973-5738.
THE
OFFERING
Common stock outstanding before the offering |
111,861,931 shares of Common Stock as of December 1, 2014. |
|
|
Common stock offered by selling stockholder |
14,370,000 shares of Common Stock. |
|
|
Common stock outstanding after the offering |
126,231,931 shares of common stock. |
|
|
Use of proceeds |
We will not receive any proceeds from the sale of shares by the selling stockholder. However, we will receive proceeds from the sale of securities pursuant to the Equity Purchase Agreement. The proceeds received under the Equity Purchase Agreement will be used for general corporate and working capital purposes and acquisitions or assets, businesses or operations or for other purposes that the Board, in its good faith deem to be in the best interest of the Company. |
|
|
OTCQB Trading Symbol |
WPWR |
|
|
Risk Factors |
The Common Stock offered hereby involves a high degree of risk and should not be purchased by investors who cannot afford the loss of their entire investment. See “Risk Factors” on page 7. |
RISK
FACTORS
You
should carefully consider the risks described below together with all of the other information included in this Prospectus before
making an investment decision with regard to our securities. The statements contained in or incorporated into this Prospectus
that are not historic facts are forward-looking statements that are subject to risks and uncertainties that could cause actual
results to differ materially from those set forth in or implied by forward-looking statements. If any of the following risks actually
occurs, our business, financial condition or results of operations could be harmed. In that case, the trading price of our common
stock could decline, and you may lose all or part of your investment.
Risks
Related to Our Business
We
rely upon key personnel and if they leave us, our business plan and results of operations could be adversely affected.
We
rely heavily on our executives Cristian Neagoe and Dan Patience. Their experience and input creates the foundation for our business
and they are responsible for the directorship and control over our operations. We currently have a consulting agreement with both
executives, but have not put into place a “key man” insurance policy on either of them. Moving forward, should we
lose the services of either executive, for any reason, we will incur costs associated with recruiting a replacement and delays
in our operations. If we are unable to replace either Mr. Neagoe or Mr. Patience with another suitably trained individual or individuals,
we may be forced to scale back or curtail our business plan. As a result of this, investors’ investment in us could become
devalued or worthless and we may be forced to abandon or change our business plan.
We
may not be able to successfully manage our growth, which could lead to our inability to implement our business plan.
Our
growth is expected to place a significant strain on our managerial, operational and financial resources, especially considering
that we currently only have three directors and two executive officers. Further, as we enter into additional contracts, we will
be required to manage multiple relationships with various consultants, businesses and other third parties. These requirements
will be exacerbated in the event of our further growth. There can be no assurance that our systems, procedures and/or controls
will be adequate to support our operations or that our management will be able to achieve the rapid execution necessary to successfully
implement our business plan. If we are unable to manage our growth effectively, our business, results of operations and financial
condition will be adversely affected, which could lead to us being forced to abandon or curtail our business plan and operations.
We
have a limited operating history in our current business focus of selling MRUs and, because of this, it may be difficult to evaluate
our chances for success.
We
were formed in March 2007 as a company specializing in in the business
of designing, developing, manufacturing, and selling fully automated frying woks. We only
generated limited revenues in connection with such operations, and changed our business focus to distribution of MRUs after our
acquisition of the exclusive distribution license from MEC on January 22, 2014. As
such, we have a limited history in our current business focus of MRU distribution. We are a relatively new company and, as such,
run a risk of not being able to compete in the marketplace because of our relatively short existence. New companies in the competitive
environment of the distribution of MRUs or similar products may face significant competition, and as a result, we may be forced
to abandon or curtail our business plan. Under such a circumstance, the value of any investment in us may become worthless.
Our
Articles of Incorporation, as amended, and Bylaws limit the liability of, and provide indemnification for, our officers and directors.
Our
Articles of Incorporation, as amended, generally limit our officers' and directors' personal liability to the Company and its
stockholders for breach of fiduciary duty as an officer or director except for breach of the duty of loyalty or acts or omissions
not made in good faith or which involve intentional misconduct or a knowing violation of law. Our Articles of Incorporation, as
amended, and Bylaws provide indemnification for our officers and directors to the fullest extent authorized by the Nevada General
Corporation Law against all expense, liability, and loss, including attorney's fees, judgments, fines excise taxes or penalties
and amounts to be paid in settlement reasonably incurred or suffered by an officer or director in connection with any action,
suit or proceeding, whether civil or criminal, administrative or investigative (hereinafter a " Proceeding ")
to which the officer or director is made a party or is threatened to be made a party, or in which the officer or director is involved
by reason of the fact that he is or was an officer or director of the Company, or is or was serving at the request of the Company
as an officer or director of another corporation or of a partnership, joint venture, trust or other enterprise whether the basis
of the Proceeding is an alleged action in an official capacity as an officer or director, or in any other capacity while serving
as an officer or director. Thus, the Company may be prevented from recovering damages for certain alleged errors or omissions
by the officers and directors for liabilities incurred in connection with their good faith acts for the Company. Such an indemnification
payment might deplete the Company's assets. Stockholders who have questions regarding the fiduciary obligations of the officers
and directors of the Company should consult with independent legal counsel. It is the position of the SEC that exculpation from
and indemnification for liabilities arising under the Securities Act and the rules and regulations thereunder is against public
policy and therefore unenforceable.
Our
President’s leave could harm our business relationship with ME Resource Corporation.
Our
President Dan Patience is related to a director and the Chief Technology Officer of ME Resource Corporation, from which we have
acquired an exclusive license to distribute and sell their MRUs
in the State of Texas and potentially other geographical regions in the United States. Going
forward, should we lose the service of Mr. Patience, for any reason, our company may not be able to maintain the exclusive licensing
rights from ME Resource Corporation and the loss of licensing rights could harm or affect our core business.
Risks
Related To Product Liabilities
We
may be subject to product liability claims if people or properties are harmed by the MRUs we sell.
We
have obtained the exclusive distribution license of MRUs manufactured by MEC. Some of those products may be defectively designed
or manufactured. As a result, sales of such products through us could expose us to product liability claims relating to personal
injury or property damage and may require product recalls or other actions. Third parties subject to such injury or damage may
bring claims or legal proceedings against us as the distributors of such products. We do not currently maintain any third-party
liability insurance or product liability insurance in relation to products sold through us. As a result, any material product
liability claim or litigation could have a material and adverse effect on our business, financial condition and results of operations.
Even unsuccessful claims could result in the expenditure of funds and managerial efforts in defending them and could have a negative
impact on our reputation.
Risks
Relating To Our Securities
Shareholders
may be diluted significantly through our efforts to obtain financing, satisfy obligations, and/or complete acquisitions through
the issuance of additional shares of our common stock or other securities.
Wherever
possible, our Board will attempt to use non-cash consideration to satisfy the Company’s obligations. The non-cash consideration
may consist of restricted shares of our common stock, convertible debt, or other securities.
We
have signed an Equity Purchase Agreement with Premier Venture, for up to $10,000,000 through sales of our common stock. The Equity
Purchase Agreement grants the investors the ability to buy a substantial number of shares of common stock in a series of private
placement transactions at a price that is at a discount to the market price. If common stock is issued in return for additional
funds, the price per share could be lower than that paid by our current stockholders. We anticipate continuing to rely
on equity sales of our common stock in order to fund our business operations. If we issue additional stock, investors'
percentage interests in us will be diluted. The result of this could reduce the value of current investors' stock.
Additionally,
moving forward, we may attempt to conduct acquisitions and/or mergers of other entities or assets using our common stock or other
securities as payment for such transactions. Our Board has authority, without action or vote of the shareholders, to issue all
or part of the authorized but unissued shares of common stock and preferred stock with various preferences and other rights. If
such transactions occur, this may result in substantial dilution of the ownership interests of existing shareholders, and dilute
the book value of the Company’s common stock.
We
do not expect to pay dividends in 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.
Trading
in our common stock on the OTCQB is limited and sporadic and fluctuates, making it difficult for our shareholders to sell their
shares or liquidate their investments.
Our
common stock is quoted on the OTCQB under the symbol “WPWR”. We anticipate the market for our common stock on the
OTCQB to be subject to fluctuations in response to several factors, including, but not limited to:
• |
actual or anticipated variations
in our results of operations; |
• |
our ability to generate revenues; |
• |
conditions and trends in the market
for oil and natural gas; and |
• |
future acquisitions we may make |
Furthermore,
our stock price may be impacted by factors that are unrelated or disproportionate to our operating performance. These market fluctuations,
as well as general economic, political and market conditions, such as recessions, interest rates, or government regulations may
adversely affect the market price and liquidity of our common stock.
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 Securities Exchange Act of 1934 (the “Exchange
Act”), commonly referred to as the “penny stock rule.” 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 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, prepared by the SEC, relating to the penny stock market. A
broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative and current
quotations for the securities. Finally, monthly statements must be sent disclosing recent price information for the
penny stocks held in an account and information to the limited market in penny stocks. Consequently, these rules may
restrict the ability of broker-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 shares of common stock will qualify for exemption from the Penny Stock Rule. In any event, even if
our common stock was exempt from the Penny Stock Rule, 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.
State
securities laws may limit secondary trading, which may restrict the state in which and conditions under which you can sell shares.
Secondary
trading in our common stock may not be possible in any state until the common stock is qualified for sale under the applicable
securities laws of the state or there is confirmation that an exemption, such as listing in certain recognized securities manuals,
is available for secondary trading in the state. If we fail to register or qualify, or to obtain or verify an exemption for the
secondary trading of, the common stock in any particular state, the common stock could not be offered or sold to, or purchased
by, a resident of that state. In the event that a significant number of states refuse to permit secondary trading in our common
stock, the liquidity for the common stock could be significantly impacted.
Because
we are not subject to compliance with rules requiring the adoption of certain corporate governance measures, our stockholders
have limited protections against interested director transactions, conflicts of interest, and similar matters.
The
Sarbanes-Oxley Act of 2002, as well as rule changes proposed and enacted by the SEC, the New York and American Stock Exchanges
and the Nasdaq Stock Market, as a result of Sarbanes-Oxley, require the implementation of various measures relating to corporate
governance. These measures are designed to enhance the integrity of corporate management and the securities markets and apply
to securities that are listed on those exchanges or the Nasdaq Stock Market.
We
do not currently have an independent audit or compensation committee. As a result, our Directors have the ability to, among other
things; determine their own level of compensation. Until we comply with such corporate governance measures, regardless of whether
such compliance is required, the absence of such standards of corporate governance may leave our stockholders without protections
against interested director transactions, conflicts of interest, if any, and similar matters and any potential investors may be
reluctant to provide us with funds necessary to expand our operations.
We
intend to comply with all corporate governance measures relating to Director independence as and when required. However, we may
find it very difficult or be unable to attract and retain qualified officers, Directors and members of board committees required
to provide for our effective management as a result of the Sarbanes-Oxley Act of 2002. The enactment of the Sarbanes-Oxley Act
of 2002 has resulted in a series of rules and regulations by the SEC that increase responsibilities and liabilities of Directors
and executive officers. The perceived increased personal risk associated with these recent changes may make it more costly or
deter qualified individuals from accepting these roles.
Nevada
law and our Articles of Incorporation authorize us to issue shares of stock, which shares may cause substantial dilution to our
existing shareholders.
We
have authorized capital stock consisting of 4,500,000,000 shares of common stock, $0.001 par value per share. As of December
1, 2014, we had 111,861,934 shares
of common stock outstanding. As a result, our Board has the ability to issue a large number of additional shares of common
stock without shareholder approval, which if issued could cause substantial dilution to our then shareholders. Investors
should keep in mind that the Board has the authority to issue additional shares of common stock, which could cause
substantial dilution to our existing shareholders. As a result, the issuance of shares of common stock may cause the value of
our securities to decrease and/or become worthless.
Premier
Venture will pay less than the then-prevailing market price for our common stock.
The
common stock to be issued to Premier Venture pursuant to the Equity Purchase Agreement will be purchased at a 30% discount to
the VWAP of the five (5) consecutive trading days immediately after the applicable Put notice date. Premier Venture has a financial
incentive to sell our common stock immediately upon receiving the shares to realize the profit equal to the difference between
the discounted price and the market price. If Premier Venture sells the shares, the price of our common stock could
decrease. If our stock price decreases, Premier Venture may have a further incentive to sell the shares of our common
stock that it holds. These sales may have a further impact on our stock price.
Investors’
ownership interest may be diluted and the value of our common stock may decline by exercising the put right pursuant to the Equity
Purchase Agreement.
Pursuant
to the Equity Purchase Agreement, when we deem it necessary, we may raise capital through the private sale of our common stock
to Premier Venture at a price equal to a 30% discount to the VWAP of the five (5) consecutive trading days immediately after receiving
our notice of sale. Because the put price is lower than the prevailing market price of our common stock, to the extent that the
put right is exercised, your ownership interest may be diluted.
We
are registering an aggregate of 14,370,000 shares of common stock to be issued under the Equity Purchase Agreement. The sales
of such shares could depress the market price of our common stock.
We
are registering an aggregate of 14,370,000 shares of common stock under the registration statement of which this prospectus is
a part, pursuant to the Equity Purchase Agreement. Notwithstanding Premier Venture’s ownership limitation, the 14,370,000
shares would represent approximately 12.85% of our shares of common stock outstanding immediately after our exercise of the put
right under the Equity Purchase Agreement. The sale of these shares into the public market by Premier Venture could depress the
market price of our common stock.
We
may not have access to the full amount available under the Equity Purchase Agreement.
Our
ability to draw down funds and sell shares under the Equity Purchase Agreement requires that this resale registration statement
be declared effective and continue to be effective. This registration statement registers the resale of 14,370,000
shares issuable under the Equity Purchase Agreement, and our ability to sell any remaining shares issuable under the Equity Purchase
Agreement is subject to our ability to prepare and file one or more additional registration statements registering the resale
of these shares. These registration statements may be subject to review and comment by the staff of the SEC, and will require
the consent of our independent registered public accounting firm. Therefore, the timing of effectiveness of these registration
statements cannot be assured. The effectiveness of these registration statements is a condition precedent to our ability to sell
all of the shares of common stock to Premier Venture under the Equity Purchase Agreement. Even if we are successful in causing
one or more registration statements registering the resale of some or all of the shares issuable under the Equity Purchase Agreement
to be declared effective by the SEC in a timely manner, we may not be able to sell the shares unless certain other conditions
are met. For example, we might have to increase the number of our authorized shares in order to issue the shares to Premier Venture.
Accordingly, because our ability to draw down any amounts under the Equity Purchase Agreement is subject to a number of conditions,
there is no guarantee that we will be able to draw down any portion or all of the proceeds of $10,000,000 under the Equity Purchase
Agreement.
Certain
restrictions on the extent of puts and the delivery of advance notices may have little, if any, effect on the adverse impact of
our issuance of shares in connection with the Equity Purchase Agreement, and as such, Premier Venture may sell a large number
of shares, resulting in substantial dilution to the value of shares held by existing shareholders.
Premier
Venture has agreed, subject to certain exceptions listed in the Equity Purchase Agreement, to refrain from holding an amount of
shares which would result in Premier Venture or its affiliates owning more than 4.99% of the then-outstanding shares of our common
stock at any one time. These restrictions, however, do not prevent Premier Venture from selling shares of common stock received
in connection with a put, and then receiving additional shares of common stock in connection with a subsequent put. In
this way, Premier Venture could sell more than 4.99% of the outstanding common stock in a relatively short time frame while never
holding more than 4.99% at one time.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus contains certain forward-looking statements. When used in this prospectus or in any other presentation, statements
which are not historical in nature, including the words “anticipate,” “estimate,” “should,”
“expect,” “believe,” “intend,” “may,” “project,” “plan”
or “continue,” and similar expressions are intended to identify forward-looking statements. They also include statements
containing a projection of revenues, earnings or losses, capital expenditures, dividends, capital structure or other financial
terms.
The
forward-looking statements in this prospectus are based upon our management’s beliefs, assumptions and expectations of our
future operations and economic performance, taking into account the information currently available to them. These statements
are not statements of historical fact. Forward-looking statements involve risks and uncertainties, some of which are not currently
known to us that may cause our actual results, performance or financial condition to be materially different from the expectations
of future results, performance or financial condition we express or imply in any forward-looking statements. These forward-looking
statements are based on our current plans and expectations and are subject to a number of uncertainties and risks that could significantly
affect current plans and expectations and our future financial condition and results.
We
undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future
events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this prospectus
might not occur. We qualify any and all of our forward-looking statements entirely by these cautionary factors. As a consequence,
current plans, anticipated actions and future financial conditions and results may differ from those expressed in any forward-looking
statements made by or on our behalf. You are cautioned not to unduly rely on such forward-looking statements when evaluating the
information presented herein.
USE
OF PROCEEDS
We
will not receive any proceeds from the sale of shares by the selling stockholder. However, we will receive proceeds from the sale
of securities pursuant to the Equity Purchase Agreement. The proceeds received from any “drawdowns” tendered to Premier
Venture under the Equity Purchase Agreement will be used for general corporate and working capital purposes and acquisitions or
assets, businesses or operations or for other purposes that the Board, in its good faith deems to be in the best interest of the
Company.
DILUTION
“Dilution”
as used herein represents the difference between the offering price per share of shares offered hereby and the net tangible book
value per share of the Company’s common stock after completion of the offering. Dilution in the offering is primarily due
to the losses previously recognized by the Company.
At
an assumed purchase price of $0.0371 (equal to 70% of the closing price of our common stock of $0.053 on November 21, 2014), and
the issuance of 100% of the shares being registered, we will be required to issue an aggregate of 14,370,000 shares of Common
Stock, with net proceeds of $533,127 pursuant to the Equity Purchase Agreement.
The
net tangible book value of the Company at July 31, 2014 was $(910,915) or $(0.0081) per share. Net tangible book value represents
the amount of total tangible assets less total liabilities. Assuming that 100% of the shares offered hereby were purchased by
investors (a fact of which there can be no assurance) as of November 26, 2014, the then outstanding 126,231,943 shares of common
stock, which would constitute all of the issued and outstanding equity capital of the Company, would have a net tangible book
value of $(377,788) (after deducting commissions and offering expenses) or approximately $(0.0030) per share.
Assuming
a 50% decrease in the number of shares to be issued, based upon the purchase price of $0.0371(equal to 70% of the closing price
of our common stock of $0.053 on November 21, 2014), we will be required to issue an aggregate of 7,185,000 shares of common stock,
with net proceeds of $266,564 pursuant to the Equity Purchase Agreement.
Assuming
a 75% decrease in the number of shares to be issued, based upon the purchase price of $0.0371(equal to 70% of the closing price
of our common stock of $0.053 on November 21, 2014), we will be required to issue an aggregate of 3,592,570 shares of common stock, with
net proceeds of $133,282 pursuant to the Equity Purchase Agreement.
The
dilution associated with the offering and each of the above scenarios is as follows:
| |
| | | |
| 50 | % | |
| 75 | % |
| |
| | | |
| Decrease | | |
| Decrease | |
| |
| | | |
| in
Shares | | |
| in
Shares | |
| |
| Offering | | |
| Issued | | |
| Issued | |
Offering price | |
$ | .0371 | | |
$ | .0371 | | |
$ | .0371 | |
Net tangible book value before Offering
(per share) | |
$ | (.0081 | ) | |
$ | (.0081 | ) | |
$ | (.0081 | ) |
Net tangible book value after Offering
(per share) | |
$ | (.0030 | ) | |
$ | (.0054 | ) | |
$ | (.0067 | ) |
Dilution per share to investor | |
$ | (.0051 | ) | |
$ | (.0027 | ) | |
$ | (.0014 | ) |
Dilution percentage to investor | |
| (63 | )% | |
| (33 | )% | |
| (17 | )% |
MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market
Information
Our Common
Stock is quoted under the ticker symbol “WPWR” on the OTCQB operated by OTC Markets Group, Inc. Only a limited
market exists for our securities. There is no assurance that a regular trading market will develop, or if developed, that it will
be sustained. Therefore, a shareholder may be unable to resell his securities in our company.
The following
table sets forth the range of high and low bid quotations for our common stock for each of the periods indicated as reported by
the OTCQB. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily
represent actual transactions.
Fiscal
Year Ending April 30, 2015 |
Quarter
Ended | |
High
$ | |
Low
$ |
| October
31, 2014 | | |
| 0.097 | | |
| 0.038 | |
| July
31, 2014 | | |
| 0.279 | | |
| 0.08 | |
Fiscal
Year Ending April 30, 2014 |
Quarter
Ended | |
High
$ | |
Low
$ |
| April
30, 2014 | | |
| 0.1745 | | |
| 0.163 | |
| January
31, 2014 | | |
| 0.24 | | |
| 0.24 | |
| October
31, 2013 | | |
| 0.25 | | |
| 0.25 | |
| July
31, 2013 | | |
| 0 | | |
| 0.25 | |
| Fiscal
Year Ending April 30, 2013* | |
| Quarter
Ended | | |
| High
$ | | |
| Low
$ | |
| April
30, 2013 | | |
| N/A | | |
| N/A | |
| January
31, 2013 | | |
| N/A | | |
| N/A | |
| October
31, 2012 | | |
| N/A | | |
| N/A | |
| July
31, 2012 | | |
| N/A | | |
| N/A | |
*Our
Common Stock was first quoted on September 19, 2013.
On
November 24, 2014, the last sales price per share of our Common Stock on the OTCQB was $0.053.
Penny
Stock
The
SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are
generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities
exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such
securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny
stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature
and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of
the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect
to a violation of such duties or other requirements of the securities laws; (c) contains a brief, clear, narrative description
of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;
(d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure
document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including
language, type size and format, as the SEC shall require by rule or regulation.
The
broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations
for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares
to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for
such stock; and (d) a monthly account statement showing the market value of each penny stock held in the customer’s account.
In
addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the
broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive
the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions
involving penny stocks, and a signed and dated copy of a written suitability statement.
These
disclosure requirements may have the effect of reducing the trading activity for our common stock. Therefore, stockholders may
have difficulty selling our securities.
Holders
of Our Common Stock
As
of December 1, 2014, we had 111,861,934 shares of our Common Stock issued and outstanding, held by seven (7) shareholders of
record, with others holding shares in street name.
Description
of Securities to be Registered
We
have authorized capital stock consisting of 4,500,000,000 shares of Common Stock, par value $0.001 per share.
Common
stock
The
holders of outstanding shares of common stock are entitled to receive dividends out of assets or funds legally available for the
payment of dividends of such times and in such amounts as the board from time to time may determine. Holders of common stock are
entitled to one vote for each share held on all matters submitted to a vote of shareholders. There is no cumulative voting of
the election of directors then standing for election. The common stock is not entitled to pre-emptive rights and is not subject
to conversion or redemption. Upon liquidation, dissolution or winding up of our company, the assets legally available for distribution
to stockholders are distributable ratably among the holders of the common stock after payment of liquidation preferences, if any,
on any outstanding payment of other claims of creditors. Each outstanding share of common stock is, and all shares of common stock
to be outstanding upon completion of this Offering will upon payment therefore be, duly and validly issued, fully paid and non-assessable.
Dividends
There
are no restrictions in our Articles of Incorporation or Bylaws that restrict us from declaring dividends. The Nevada Revised Statutes,
however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:
|
1. |
we would not be able to
pay our debts as they become due in the usual course of business; or |
|
2. |
our total assets would be less than
the sum of our total liabilities, plus the amount that would be needed to satisfy the rights of shareholders who have preferential
rights superior to those receiving the distribution. |
We have
not declared any dividends. We do not plan to declare any dividends in the foreseeable future.
Warrants,
Options and Convertible Securities
Cristian
Neagoe, the Company’s Chief Executive Officer, Director and Petroleum Engineer was issued, as part of the 2014 Stock Incentive
Plan, stock options to purchase 2,000,000 shares of the Company’s common stock at an exercise price of $0.70 per share,
which have a term of two years commencing from the date of Mr. Neagoe’s
appointment.
Dan
Patience, the Company’s President, Chief Financial Officer, Treasurer,
Secretary, Director, and Petroleum Advisor was issued, as part of the 2014 Stock Incentive
Plan, stock options to purchase 2,000,000 shares of the Company’s common stock at an exercise price of $0.70 per share,
which have a term of two years commencing from the date of Mr. Patience’s appointment.
An
accredited investor was granted a common stock warrant at the time of certain private placement for 431,034 shares. The exercise
price was $0.90 per share and the warrant expires on March 10, 2016.
An
accredited investor was granted a common stock warrant at the time of certain private placement for 3,000,000 shares. The exercise
price was $0.90 per share and the warrant expires on March 10, 2016.
An
accredited investor was granted a common stock warrant at the time of certain private placement for 5,000,000 shares. The exercise
price was $0.90 per share and the warrant expires on March 10, 2016.
The
Company has convertible notes with numerous individual and financial institutions that have conversion prices at a discount from
45% to 55% based on different formulas using historical trade prices to arrive at a base market price.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The
following discussion and analysis of the results of operations and financial condition for the quarter ended July 31, 2014; and
the fiscal years ended June 30, 2014 and 2013 should be read in conjunction with our financial statements and the notes to those
financial statements that are included elsewhere in this registration statement. Our discussion includes forward-looking statements
based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions.
Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as
a result of a number of factors. See “Cautionary Statements Regarding Forward-Looking Statements.” We use words such
as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,”
“expect,” “believe,” “intend,” “may,” “will,” “should,”
“could,” and similar expressions to identify forward-looking statements.
Plan
of Operations
We
have acquired an exclusive license from ME Resource Corporation (“MEC”), a Canadian publicly listed company for which
a director and the Chief Technology Officer is related to our President Dan Patience. MEC is creating mobile and scalable Wellhead
Micro-Refinery Units (MRUs) deployable close to the wellhead to process raw natural gas into liquid fuels and clean power. As
a result of the license with MEC, we are now in the business of distributing MRUs in the State of Texas and from there into other
geographical areas.
The
product is still under development, which is ongoing, and the first MRU is expected to occur within a year. Discussions are ongoing
to raise capital to begin construction of a commercial unit. There is no assurance that we will be able to raise the capital needed
to develop the first MRU. Our expectation is that we will obtain financing, chose a site for the MRU, and begin construction of
the unit in the third quarter. As such, we will not be able to realize any revenue from the sale of MRUs until the development
has completed and a commercialized product is ready for launch.
Our
plan is to assist the development of the MRUs and distribute them in our licensed territory. We hope to provide oil and gas producers
and operators in the State of Texas a solution to process otherwise wasted natural gas, including stranded, shut-in, flared and
vented gas and produce valued end-products including engineered fuel (diesel, diluents, synthetic crude) and electrical power.
The MRU is a novel method and apparatus, for producing chemicals, heat, energy and water from a methane-containing gas. The innovative
method and apparatus makes use of heterogeneous catalysis in a single-vessel, beginning with the partial oxidation of methane
to produce synthesis gas followed by a Fischer-Tropsch reaction to produce chemicals and other end products with no excess hydrogen.
Under
our license agreement, we agreed to pay MEC $400,000 for our exclusive license, which money will go toward the unit cost of an
MRU at $800,000 or, alternatively, a revenue sharing arrangement where MEC leases the MRU at 50% unit cost and shares in 50% of
the net revenue generated. In either event, this money will be applied to the technical and engineering development of the first
demonstration MRU in the territory and may be used to develop catalyst for specific engineered fuels.
The
payment to MEC was due in two installments: i) $100,000 within thirty (30) days of January 29, 2014; and ii) balance of $300,000
within ninety (90) days of January 29, 2014. We have made total cash payments of $379,000 subsequent to the quarter ended July
31, 2014.
Recent
Developments
Equity
Purchase Agreement
On
August 26, 2013, we entered into the Equity Purchase Agreement with Premier Venture, a California liability company. Pursuant
to the terms of the Equity Purchase Agreement, Premier Venture committed to purchase up to $10,000,000 of our Common Stock during
the Open Period.
From
time to time during the Open Period, we may deliver a drawdown notice to Premier Venture which states the dollar amount that we
intend to sell to Premier Venture on a date specified in the Put Notice. The maximum investment amount per notice shall not exceed
the lesser of (i) 200% of the average daily trading volume of Company’s common stock on the five trading days prior to the
day the Put Notice is received by Premier Venture and (ii) 110% of any previous put amount during the maximum thirty-six (36)
month period (or for the first Put Notice, 2,000,000 shares). The total purchase price to be paid, in connection to the Put Notice,
by Premier Venture shall be calculated at a thirty percent (30%) discount to the VWAP during the five (5) consecutive trading
days immediately after the applicable Put notice date, notwithstanding certain provisions pursuant to the Equity Purchase Agreement,
less six hundred dollars ($600.00). We have more shares reserved than are covered in this registration statement. In consideration
for the execution and delivery of the Equity Purchase Agreement by Premier Venture, we issued Premier Venture 3,955,070 shares
of Company’s Common Stock, at a purchase price equal to 30% discount to the lowest total share price based on the daily
VWAPs of the Common Stock on the three (3) trading days immediately preceding the execution date the Equity Purchase Agreement.
In
connection with the Equity Purchase Agreement, we also entered into the Registration Rights Agreement with Premier Venture, pursuant
to which we are obligated to file a registration statement with the SEC. We are obligated to use all commercially reasonable efforts
to maintain an effective registration statement until termination of the Equity Purchase Agreement.
The
14,370,000 shares to be registered herein represent 12.85% of the shares issued and outstanding, assuming that the selling stockholder
will sell all of the shares offered for sale.
At
an assumed purchase price of $0.0371 (representing 70% of the closing price of our Common Stock of $0.053 on November 21, 2014),
we will be able to receive up to $533,127 in gross proceeds, assuming the sale of the entire 14,370,000 shares being registered
hereunder pursuant to the Equity Purchase Agreement. Accordingly, we would be required to register an additional 255,171,779 shares
to obtain the balance of $9,466,873 under the Equity Purchase Agreement. We are currently authorized to issue 4,500,000,000 shares
of our common stock. Premier Venture has agreed to refrain from holding an amount of shares which would result in Premier Venture
owning more than 4.99% of the then-outstanding shares of our common stock at any one time.
Convertible
Debentures
Between
July 23, 2014 and August 21, 2014, we entered into convertible note agreements with Macallan
Partners, LLC, Tarpon Bay Partners, LLC and Melvyn Maller that have conversion prices at
a discount from 45% to 55% based on different formulas using historical trade prices to arrive at a base market price. We received
an aggregate of $255,006 from issuances of notes.
Results
of Operations
For
the Three Month Period Ended July 31, 2014 and July 31, 2013
We
generated no revenue for the three months ended July 31, 2014 and 2013. We do not anticipate earnings revenues until we are able
to distribute the MRUs under our license with MEC.
Our
operating expenses during the three months ended July 31, 2014 were $208,647, compared with $2,000 for the same period ended July
31, 2013. Our operating expenses during the three months ended July 31, 2014 consisted mainly of consulting fees of $141,096,
general and administrative fees of $27,236, and professional fees of $23,129.
We
anticipate our operating expenses will increase as we undertake our plan of operations. The increase will be attributable to the
continued development of the MRUs, consulting fees to our management, general and administrative expenses and the professional
fees associated with our reporting obligations under the Securities Exchange Act of 1934.
We,
recorded a net loss of $209,617 for the three months ended July 31, 2014, compared with a net loss of $2,000 for the three months
ended July 31, 2013.
Results
of Operations for the Years ended April 30, 2014 and 2013
Revenues
We
have not generated revenues since our inception. We do not anticipate generating revenues until we have a completed the development
of the MRUs and a commercialized product is ready for launch. We are a start-up company and there is no guarantee that we will
be able to execute on our business. We have incurred losses since our inception.
Operating
Expenses
Operating
expenses increased to $2,064,479 for the year ended April 30, 2014 from $19,760 for the year ended April 30, 2013. Our operating
expenses for the year ended April 30, 2014 consisted mainly of consulting fees of $1,940,537, professional fees in the amount
of $47,363, and general and administrative expenses of $57,197. In comparison, our operating expenses for the year ended April
30, 2013 consisted of professional fees in the amount of $19,760.
We
anticipate our operating expenses will increase as we undertake our plan of operations. The increase will be attributable to administrative
and operating costs associated with our business plan and the professional fees associated with our reporting obligations under
the Securities Exchange Act of 1934.
Net
Loss
We
incurred a net loss of $2,065,784 for the year ended April 30, 2014, compared to a net loss of $19,760 for the year ended April
30, 2013.
Liquidity
and Capital Resources
As
of July 31, 2014, we had total current assets of $17,633. We had $928,548 in current liabilities as of July 31, 2014. Thus, we
had a working capital deficit of $910,915 as of July 31, 2014.
Cash
flows for the years April 30, 2014 and 2013
Operating
activities used $151,211 in cash for the year ended April 30, 2014, as compared with $19,459 used for the year ended April 30,
2013. Our negative operating cash flow for April 30, 2014 was mainly a result of payment of professional fees, consulting fee,
and other general and administrative expenses.
Investing
activities used $100,000 for the purchase of a license for the year ended April 30, 2014, as compared with $0 for the year ended
April 30, 2013.
Financing
activities for the year ended April 30, 2014 generated $291,043 in cash, as compared with cash flows provided by financing activities
of $19,459 for the year ended April 30, 2013. We also received a loan in the amount of $35,000. The loan is unsecured, bears interest
at 11% per annum and is payable on September 30, 2014.
Cash
flows for the three months ended July 31, 2014 and 2013
Operating
activities used $345,598 in cash for three months ended July 31, 2014. Our net loss of $209,617 and $133,382 decrease in accounts
payable and accrued liabilities mainly accounted for our negative operating cash flow.
Financing
activities during the three months ended July 31, 2014 generated $320,800 in cash, represented by $250,000 in proceeds from the
sale of our stock and $70,800 in net advances from related parties.
We
sold units consisting of stock and warrants for proceeds of $250,000 during the months ended July 31, 2014.
We
have entered into a number of loan agreements in an effort to provide needed financing. From July 25, 2014 to August 27, 2014,
those loans and their terms are detailed in our Current Report on Form 8-K that we filed with the SEC on August 27, 2014.
Despite
the financing received, we have insufficient cash to operate our business at the current level for the next twelve months and
insufficient cash to achieve our business goals. The success of our business plan beyond the next 12 months is contingent upon
us obtaining additional financing. We intend to fund operations through debt and/or equity financing arrangements, which may be
insufficient to fund our capital expenditures, working capital, or other cash requirements. We do not have any formal commitments
or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional
financing will be available to us on acceptable terms, or at all.
Despite
the financing received, we have insufficient cash to operate our business at the current level for the next twelve months and
insufficient cash to achieve our business goals. The success of our business plan beyond the next 12 months is contingent upon
us obtaining additional financing. We intend to fund operations through debt and/or equity financing arrangements, which may be
insufficient to fund our capital expenditures, working capital, or other cash requirements. We do not have any formal commitments
or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional
financing will be available to us on acceptable terms, or at all.
Going
Concern
We
have incurred losses since inception, have negative working capital, and have not yet received revenues from sales of products
or services. These factors create substantial doubt about our ability to continue as a going concern. The financial statements
do not include any adjustment that might be necessary if we are unable to continue as a going concern. Our ability to continue
as a going concern is dependent on our generating cash from the sale of our common stock and/or obtaining debt financing and attaining
future profitable operations. Management’s plans include selling our equity securities and obtaining debt financing to fund
our capital requirement and ongoing operations; however, there can be no assurance we will be successful in these efforts.
Critical
Accounting Policies
Our
financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting periods.
We
regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. In general, management's
estimates are based on historical experience, information from third party professionals, and various other assumptions that are
believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.
Stock-Based
Compensation
The
expense for equity awards vested during the reporting period is based upon the grant date fair value of the award. The expense
is recognized over the applicable vesting period of the stock award using the straight-line method.
Recently
Issued Accounting Pronouncements
We
have implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not
believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its
financial position or results of operations.
Contractual
Obligations
We
are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide
the information under this item.
Future
Financings
We
will continue to rely on equity sales of our common shares and debt proceeds in order to continue to fund our business operations.
Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any
additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.
Off Balance
Sheet Arrangements
As of July
31, 2014, there were no off balance sheet arrangements.
DESCRIPTION
OF BUSINESS
Corporate
History
Well
Power, Inc. was incorporated on March 26, 2007 under the name of “Vortec
Electronics, Inc.” On December 10, 2013, we filed Articles of Merger with the Secretary
of State of Nevada in order to effectuate a merger with our wholly-owned subsidiary, Well Power, Inc. whose shareholder approval
was not required pursuant to Section 92A.180 of the Nevada Revised Statutes. As part of the merger, our Board authorized a change
in our name to “Well Power, Inc.” and our Articles of Incorporation were amended to reflect this name change accordingly.
Our ticker symbol subsequently changed from “VOELD” to “WPWR” to resemble our new name.
Since
the Merger, we have acquired an exclusive license from MEC, a Canadian publicly listed company for which a director and the Chief
Technology Officer is related to our President Dan Patience. MEC is creating mobile and scalable Wellhead Micro-Refinery Units
(MRUs) deployable close to the wellhead to process raw natural gas into liquid fuels and clean power. As a result of the license
with MEC, we are now in the business of distributing MRUs in the State of Texas and from there into other geographical areas.
The
product is still under development, which is ongoing, and the first MRU is expected to occur within a year. Discussions are ongoing
to raise capital to begin construction of a commercial unit. There is no assurance that we will be able to raise the capital needed
to develop the first MRU. Our expectation is that we will obtain financing, chose a site for the MRU, and begin construction of
the unit in the third quarter. As such, we will not be able to realize any revenue from the sale of MRUs until the development
has completed and a commercialized product is ready for launch.
Our
plan is to assist the development of the MRUs and distribute them in our licensed territory. We hope to provide oil and gas producers
and operators in the State of Texas a solution to process otherwise wasted natural gas, including stranded, shut-in, flared and
vented gas and produce valued end-products including engineered fuel (diesel, diluents, synthetic crude) and electrical power.
The MRU is a novel method and apparatus, for producing chemicals, heat, energy and water from a methane-containing gas. The innovative
method and apparatus makes use of heterogeneous catalysis in a single-vessel, beginning with the partial oxidation of methane
to produce synthesis gas followed by a Fischer-Tropsch reaction to produce chemicals and other end products with no excess hydrogen.
Under
our license agreement, we agreed to pay MEC $400,000 for our exclusive license, which money will go toward the unit cost of an
MRU at $800,000 or, alternatively, a revenue sharing arrangement where MEC leases the MRU at 50% unit cost and shares in 50% of
the net revenue generated. In either event, this money will be applied to the technical and engineering development of the first
demonstration MRU in the territory and may be used to develop catalyst for specific engineered fuels.
The
payment to MEC is due in two installments: i) $100,000 within thirty (30) days of January 29, 2014; and ii) balance of $300,000
within ninety (90) days of January 29, 2014. We have made total payments of $379,000, which results in a balance of $21,000 remaining.
We will have to continue to raise money to make the remaining payment amount. Although we are outside of the contract terms, we
have a good working relationship with MEC and hope to make the payment in the near future. If we are unable to, we will lose our
contract and we would lose this business opportunity.
The
Technology
An
MRU is an assembly of proven commercial technologies with a proprietary micro synthesizing system as the key technology component.
With the addition of catalytic reactors and power generation components, various liquid and power outputs can be achieved. Our
goal is to provide an economically viable solution to develop wasted gas opportunities in the oil and gas sector into revenue
streams with minimal capital expenditure. We hope to be able to provide a novel and economically viable solution to utilize wasted
natural gas resources for remote power and fuel generation while reducing greenhouse gas emissions.
MEC
and our company, along with those involved in the manufacturing process, are currently working to develop a finished MRU product.
The product is still in development, which is ongoing, and a finished MRU is expected to occur within a year. As such, we will
not be able to realize any revenue from the sale of MRUs until the development has completed and a commercialized product is ready
for launch.
The
objective is to produce green fuel from associated natural gas and thereby reduce emissions due to flaring and venting. The methane
is first converted to CO and hydrogen (syngas), followed by Fischer-Tropsch in order to produce green fuel. Power is produced
from heat generated by endothermic catalytic reactions and combustion of unreacted light hydrocarbons and C02. The
final unit will be mobile, modular and economically feasible.
A
MRU will convert associated gas into the following valued end products while reducing flared gas.
|
1) |
Engineered Fuels: Light Synthetic Crude that can be used for blends
or even fuels as high as $200/bbl. Each 100 mcf of natural gas will produce up to 10 barrels/day of Engineered Fuels. |
|
2) |
Power: To provide up to 70 kW of continuous Power for use near
the wellhead. |
|
3) |
Flaring Reduction: Each MRU will have the ability to reduce up
to 1224 tonnes CO2 per year. |
|
4) |
Usable Water: Each MRU will produce 80 barrels/day of water that
could be used for fracking or EOR. |
|
5) |
Natural gas and oil separator |
|
· |
Natural gas is recovered from petroleum fluids (+ water, +impurities)
in the first separator. The condensable are returned to the pipeline. The separator contains a high efficiency mist eliminator
to remove carry over water particles. |
|
· |
Sulphurous compounds (H2S, COS, CS2, etc.), acids and other impurities
are then removed in a gas treatment column. |
|
· |
The conditioned gas is compressed to approximately 20 bar in a
gas compressor. |
|
· |
Air is also compressed to reaction pressure (of about 20 bar) in
a second larger compressor. |
|
· |
The natural gas and air are fed to the bottom of the syngas production
vessel. The reaction is exothermic and controlled solely by the partial pressures of the reaction gases. The gases pass through
the syngas production fluidized bed where they contact the FT catalyst and react. The temperature is controlled at around
250oC with a set of cooling coils installed in the reactor. The gases pass through the bed and into the freeboard.
The gas velocity is sufficiently low so as to minimize the entrainment of catalyst powder to the filters. There is a provision
to periodically blow back the filters as the pressure drop increases. The blow back sequence is timed in such a way as not
to disrupt production. |
|
10) |
The first waste heat boiler |
|
· |
The gas stream exits the reactor and is further cooled with water
coming from air cooler in a waste heat boiler. The gas temperature drop in the waste heat boiler is about 100ºC. The
produced steam is fed to steam turbine for power generation. |
|
· |
The exit gas stream from the first waste heat boiler is cooled
to 60ºC in the condenser. |
|
12) |
Three phase separator |
|
· |
The mixture is then separated into three phases. The gas phase
goes to a post treatment reactor to combust CO and other light hydrocarbons. The dense aqueous phase is either fed back to
the reactor to help control the temperature (as well as the reaction kinetics) or it is fed to the post treatment reactor
to control the temperature rise. The organic phase (+ some water) is fed to the pipeline or a storage tank, or separated to
produce drop in diesel. |
|
· |
The gas phase coming from three phase separator contains light
hydrocarbons and CO which are combusted to produce hot gas for steam generation in the second waste heat boiler. |
|
· |
The hot exit gas from the second waste heat boiler is fed to a
gas expander to produce power for the gas compressors. |
|
· |
The steam turbine is used to generate power for gas compression
resulting from steam generated in the cooling coils in the fluidized bed reactor and waste heat boilers |
|
· |
The low pressure steam exit from steam turbine goes to a cooler
to produce water for cooling coils and waste heat boilers. |
Below
is a schematic of the MRU and the beneficial by products it creates.
Product
Development and Manufacturing
Under
the License Agreement, we will pay MEC $400,000 for its exclusive License, which money will go toward the Unit Cost of an MRU
at $800,000 or, alternatively, a revenue sharing arrangement where MEC leases the MRU at 50% Unit Cost and shares in 50% of the
net revenue generated. In either event, this money will be applied to the technical and engineering development of the first demonstration
MRU in the territory and may be used to develop catalyst for specific engineered fuels.
MEC
has contracted to use a production facility in Alberta that will facilitate the mass fabrication of the MRUs.
MEC
has formed a joint venture company with ABS Electric Group Ltd. of Alberta (“ABS”). ABS is a fully integrated power
generation and electrical company in the Alberta oil and gas industry, which maintains and constructs electrical and power systems
from millivolt to high voltage applications. ABS has 12 years of experience within the Alberta oil patch, employs 80 people with
over 40 field-service vehicles and a 40,000 square foot fabrication and manufacturing facility. www.abselectric.com
The
joint venture company is Waste Stream Energy Corp. (“WSE”), which has been granted a license (the “WSE License”)
for MEC’s MRU for the territory of Canada. As per the terms of the joint venture and the WSE License, WSE will facilitate
the commercialization and manufacturing of the MRUs. ABS will make available a dedicated staff, its full service and maintenance
field teams, fabrication facilities and in-kind contributions to the joint venture to further this development. ABS ‘s existing
clientele, which include Kinder Morgan, Pennwest and SNC Lavalin, as well as their valuable relationships with individual site
operation managers, can be leveraged to assist in the development, commercialization and the eventual operation of the MRUs.
Research
& Development Project Development Plan
Our
company, in conjunction with MEC and their respective partners, has established a detailed timeline for the development and deployment
of the Licensed technology. Below are the timelines up to the commercialization of the technology. Units will be deployable during
Phase I and will be optimized with the research and development and catalyst optimization carried out at Ecole Polytechnique de
Montreal. Construction and manufacturing partners, ABS Electric Group Inc and Waste Stream Energy, both in Alberta, will construct
the units concurrently with the research program at Ecole Polytechnique.
Project
Lead
Dr.
Gregory Patience, Director, project oversight, Specialist in Catalytic Reactors. Professor at École
Polytechnique de Montréal, PQ in the Department of Chemical Engineering. At École Polytechnique de Montréal
Dr. Patience established a laboratory on heterogeneous catalysis and fluidization. His research interests include catalysis, gas-solids
fluidization, reactor design and scale-up, circulating and turbulent fluidized beds and process design. Dr. Patience has extensive
experience acting as a consultant to industry, specializing in new technology development, commercialization, process economics
and catalysis.
Lab
Scale and Bench Scale Proof-of-Concept Demo |
Completed
by École Polytechnique de Montréal. This phase reviewed and engineered the novel MRU technology at a lab and
bench scale and allowed for preliminary patent applications for certain processes and integrations. |
2014
Timeline
Pilot
Demonstration |
This
step includes the design and construction of our unit, engineering process design and mass catalyst production. |
Phase
IA |
|
Objective
and Milestones |
Optimization
of baseline to optimization. |
Catalyst
optimization to increase conversion efficiency for both syngas and output conversion. |
•
Bulk catalyst, compressor/methane gas/lab supplies
•
Lab Monitoring
•
Bench scale reactor to test stability
•
Separation Engineering, HAZOP and Safety
•
EPDM Indirect Cost and Administration
|
Catalyst
Development and Catalytic Conversion
2015
Timeline
Phase
IB: Optimization Phase
Objective
and Milestones |
Ensure
safe and unmanned operation completed |
Includes
Hazard and Operability Study (HAZOP), examination of process/operations to identify and evaluate risks, stability testing,
instrumentation, including SCADIA, and Programmable Logic Controller modifications for the pilot unit, stress tests and
operations manual creation, as well as study of economic and environmental benefits.
|
•
Container Upgrades +Storage Tanks
•
On Site monitoring 120 days + Site Prep and Deployment
•
Trailer, Container, Misc Tools
•
Engineering, HAZOP and Safety, Monitoring |
Safety
and Testing
ABS Electric
Group Inc, Full staffing dedication
Our company
and MEC have partnered with ABS Electric, a fully integrated electrical company located in Calgary, Alberta.
Barriers
to Entry
There are
possible barriers to broad use of MRUs.
1) Economic
Barriers such as:
- Economic Feasibility of the Capital
Expenditure Per Unit: Each MRUs currently has to be custom built as a solution to the processing raw natural gas. As the Licensor
develops the manufacturing process and increases the production volumes, the cost to fabricate each MRUs, and therefore capital
expenditure will be reduced through economies of scale.
- Value of the Energy Outputs: The
economic viability of the technology is correlated to the revenue from green fuel and the generated power.
Technical
Barriers:
- Capacities of Feedstock: The current
“sweet spot” for MRUs is between 75 and 250 Mcf/d per unit. The feedstock must be consistent.
- Continuous Source of Gas Stream:
The feedstock flow must be a steady stream since the steam reformer cannot be turned off and on immediately. Although the ideal
solution maybe temporary storage tanks, this solution may not be feasible in circumstances such as the flaring of test gas wells
or emergency release of gas at gas plants.
Intellectual
Property Protection against Competition:
|
• |
The MRU technology is patented protected. |
|
• |
Certain items of the design such as the catalyst
composition will be kept a trade secret and will be very difficult to reproduce. |
Flaring
Regulations
Flaring
in Texas is regulated by the Rail Road Commission of Texas (the “RRC”). The link to the Regulations of Flaring by
the Rail Road Commission of Texas can be found at http://www.rrc.state.tx.us/about/faqs/flaringfaq.php and some of the answers
to the frequently asked questions on the Flaring Regulations from the Rail Road Commission of Texas are as follows:
1.
Why does RRC allow flaring?
The
commission’s Statewide Rule 32 allows an operator to flare gas while drilling a well and for up to 10 days after a well’s
completion for operators to conduct well potential testing. The majority of flaring permit requests received by the Commission
are for flaring casinghead gas from oil wells. Permits to flare from gas wells are not typically issued as natural gas is the
main product of a gas well.
Flaring
of casinghead gas for extended periods of time may be necessary if the well is drilled in areas new to exploration. In new areas
of exploration, pipeline connections are not typically constructed until after a well is completed and a determination is made
about the well's productive capability. Other reasons for flaring include: gas plant shutdowns; repairing a compressor or gas
line or well; or other maintenance. In existing production areas, flaring also may be necessary because existing pipelines may
have no more capacity. Commission staff issue flare permits for 45 days at a time, for a maximum limit of 180 days.
See
specifics on Statewide Rule 32 at the following link under §3.32 (Gas Well Gas and Casinghead Gas Shall Be Utilized for Legal
Purposes):
http://info.sos.state.tx.us/pls/pub/readtac$ext.ViewTAC?tac_view=4&ti=16&pt=1&ch=3&rl=Y
2.
Why does RRC grant extensions to flaring permits?
If
operators want to pursue an additional 45 days past the initial 45-day flare permit time period, they must provide documentation
that progress has been made toward establishing the necessary infrastructure to produce gas rather than flare it. A copy of the
Statewide Rule 32 Exception Data Sheet can be found online at:
http://www.rrc.state.tx.us/forms/forms/og/pdf/swr32datasht.pdf
The
most common reason for granting an extension to an initial flaring permit is the operator is waiting for pipeline construction
scheduled to be completed by a specified date. Other reasons for granting an extension include operators needing additional time
for well cleanup and pending negotiations with landowners.
3.
Does the Commission allow long-term flaring?
The
majority of flaring permit requests that the Commission receives are for flaring cashinghead gas from oil wells. The Commission
does not issue long-term permits for flaring from natural gas wells as natural gas is the main product of a gas well. Both oil
and gas wells are allowed under Commission rules to flare during the drilling phase and for up to 10 days after a well’s
completion for well potential testing. Rare exceptions for long-term flaring may be made in cases where the well or compressor
are in need of repair.
4.
Does the Commission track how much has been flared?
Operators
are required to report to the Commission volumes of gas flared on their monthly Production Report form (PR form). The PR forms
include actual, metered volumes of both gas well gas and casinghead gas reported by operators at the lease level.
5.
How many flaring permits have been issued in Texas?
Total flaring
permits approved statewide by the Commission for the past four fiscal years is as follows:
2013 |
3,012 |
2012 |
1,963 |
2011 |
651 |
2010 |
306 |
2009 |
158 |
2008 |
107 |
To put these
numbers in context, Texas currently has more than 144,000 active oil wells, so flaring involves just a small fraction of the state’s
oil wells.
6. What
percentage of total gas is reported flared?
Of the total
amount of gas reported to the Commission, approximately 0.4 percent is flared/vented gas. The chart below reflects the percentage
of total gas flared/vented.
7. What
is the average permitted flare volume?
The chart
below reflects the average permitted flare volume by year.
8. How
does RRC regulate flaring?
The
Commission requires operators to obtain a permit to flare for most short-term requests and in every instance where the request
is for an extended time period. Our trained staff works closely with operators to ensure compliance with Commission rules. RRC
District Offices have inspectors available to witness operations, conduct inspections, provide information about permitting requirements,
and ensure compliance with permits issued by the Commission.
Marketing
and Customers
We
can apply the technology to associated gas. Stranded gas is found in natural gas resources around the world where there is no
gas processing or infrastructure available. Since infrastructure is permanent and requires a huge amount capital expenditure in
investment, these stranded gas deposits are too small for conventional development but ideal for MRUs.
Stranded
Gas is gas that has been discovered, but remains unusable for either physical or economic reasons. This phenomenon
typically occurs when smaller reserves of gas are found, or the reserves are far from land. As gas pipeline infrastructure
is expensive, small or distant quantities of gas often do not financially justify the building of a pipeline.
Associated
Gas is gas that is found together with oil. While oil is easy to transport due to its liquid composition, the associated
gas typically does not warrant the investment of pipeline infrastructure. Associated gas is typically flared, at great expense
to the owner, as well as the environment. Associated gas may also be re-injected to the well. Either way, a valuable
resource is not being properly utilized.
Approximately
40% of the world's natural gas reserves are classified as stranded gas. It is estimated that there are currently 3,000 trillion
cubic feet of stranded natural gas across the globe. The amount of energy that could be provided to the world with this
quantity of natural gas is equivalent to the energy represented by the oil reserves of Saudi Arabia. Stranded gas therefore
represents billions of dollars in unutilized assets.
Our
Licensed technology can be applied to various projects within the Texas resource extraction industry. Possible applications include:
new well sites where flaring reduction and power are required; flaring sites where heavy oil is produced and diluent is necessary;
flaring sites that require drop diesel where we can separate drop in diesel from Green Fuel and have residual hydrocarbons continue
down the pipeline; units that operate with high levels of H2S and other various condensates; and coal bed methane sites.
We
have partnered with MEC to deploy MRUs in Texas. The License Agreement is limited to only oil and gas producers, operators and
service providers. Therefore, our marketing efforts will be to target:
- Oil Producers
that are currently trying to economically reduce the amount of flared gas and require power and engineered fuels for remote oil
production.
(1) Oil and Gas Service Providers which currently could use MRUs as an extension of
their existing services to oil and gas producers.
- Concession
Holders with Natural Gas Resources deemed to be undervalued for current production.
Competition
We
believe we offer a unique product with little direct competition in terms of the MRU’s scale and size (processing between
75Mcf-250Mcf, and more when put in parallel, and producing 10bbl/day in Engineered FuelsTM and power), its transportability and
mobility, its modular design, and most significantly its price, with initial payback estimates of 3 years. Other companies are
developing small scale gas-to-liquid (GTL) solutions which are essential small scale gas processing plants producing 1000s bbl/day.
We also have a technical advantage, as our patent pending technology is novel in its design, maintenance, cost and price. Below
are companies engaged in small scale GTL technologies.
Competition |
|
Competitive
Advantage |
Compact
GTL
|
|
Smaller modular
and mobile units. |
www.compactgtl.com
|
|
|
Compact
GTL starts from 25 tonne module.
|
|
|
Velocys |
|
Lower
manufacturing costs.
|
www.velocys.com |
|
|
Utilizing
catalytic coating on the surface of reactor plates, rather than conventional catalytic pellets for easy sourcing;
|
|
|
The
reactor is of plate heat exchanger design incurring high construction cost with welding or brazing;
|
|
|
For
pressurized operation, the cubical structure of the reactor needs to be placed in outer pressure vessels incurring extra
cost.
|
|
|
Gastechno
www.gastechno.com
Short
development and field operation track
record
since 2006;
Production
of a specific mixture of Methanol,
Ethanol
with Formaldehyde;
Requiring
on-site extraction of O2 from air to
yield
high quality product;
Process
incurring relatively high pressure and temperature. |
|
Lower manufacturing costs.
Higher quality chemical production. |
Intellectual
Property
The
technology which we have licensed as patent protected, and the licensor’s patent application information is as follows:
Patent
Information:
Patent
Application in United States No. 61/899,523
Filing
Date: November 4, 2012
Title:
METHOD AND APPARATUS FOR PRODUCING CHEMICALS FROM A METHANE COINTAINING GAS
Patent
Summary:
The
present invention relates to a method and an apparatus for producing chemicals and/or heat/energy and/or water from a methane-containing
gas. More specifically, the present invention is concerned with a method and an apparatus, which make use of heterogeneous catalysts,
beginning with the partial oxidation of methane to produce synthesis gas followed by a second catalytic reaction to produce chemicals
and/or heat/energy and/or water.
Employees
We
currently have two full-time employees: Dr. Cristian Neagoe, our CEO and director; and Mr. Dan Patience, our President and director.
In addition, we plan on assembling a board of directors and a team of advisors whom are industry leaders in the oil and gas field
and that can market and sell the product to achieve commercialization in the industry.
We
also plan to strategically put together a team with expertise in the necessary areas to successfully commercialize and bring to
market this greenhouse reducing technology.
Properties
We
neither own nor lease any real or personal property. An officer has provided office space without charge. There is no obligation
for the officer to continue this arrangement.
Legal
Proceedings
We
are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers,
directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse
to us.
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The following
table contains information with respect to our current executive officer and director:
Name | |
Age | |
Principal
Positions With Us |
Cristian
Neagoe | |
| 41 | | |
Chief Executive Officer, Secretary,
Treasurer and Director |
Dan Patience | |
| 54 | | |
President and Director, Chief Financial
Officer |
Cristian
Neagoe, our CEO, Secretary, and Director, received his degree in physics at the University of Bucharest in Romania,
a PH.D in Theoretical Chemistry form the Romanian Academy of Science in 2004 and a Chemical Engineering degree in 2012 from the
Ecole Polytechnique Montreal. He served as a production manager at Stelian INVEST S.R.L. in Romania from 2004 to 2006. Mr. Neagoe
had an engineering internship at General Electric in Montreal, Canada in 2010 and served as laboratory instrumentation assistant
at Ecole Polytechnique de Montreal from January 2012 to May 2012. Mr. Neagoe has been a research associate at Ecole Polytechnique
de Montreal since May 2011. We believe his education, career success and knowledge of the business will greatly benefit us as
he serves as our CEO, CFO, President, Secretary, Treasurer, and Director.
Dan
Patience, our President, CFO, Treasurer, and Director, currently serves as the President of Noble Investment Corp., a
private company that has been providing Investment Banking/Investor Relations Services to Publicly listed Canadian and US Companies
since 1994.
Dan
Patience has been involved in the Investment Industry for 30 years starting off his starting career in the brokerage business
in 1984. He left the brokerage industry in 1994 and founded Noble Investment Corp. a company involved in funding companies, guiding
companies toward public listings and Investor Relation services.
Mr.
Patience is based in Calgary Alberta and has been involved with the funding of numerous oil and gas companies and hi-tech companies.
Term
of Office
Our
directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until
removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until
removed by the board or in conformance with their respective consulting agreements.
Family
Relationships
There
are no family relationships between or among the directors, executive officers or persons nominated or chosen by us to become
directors or executive officers.
Involvement
in Certain Legal Proceedings
To
the best of our knowledge, during the past ten years, none of the following occurred with respect to a present or former director,
executive officer, or employee: (1) any bankruptcy petition filed by or against any business of which such person was a general
partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in
a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
(3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type
of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the
SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment
has not been reversed, suspended or vacated.
Committees
of the Board
We
currently do not have nominating, compensation or audit committees or committees performing similar functions nor does our company
have a written nominating, compensation or audit committee charter. Our directors believe that it is not necessary to have such
committees, at this time, because the functions of such committees can be adequately performed by the board of directors.
We
do not have any defined policy or procedural requirements for shareholders to submit recommendations or nominations for directors.
The Board believes that, given the stage of our development, a specific nominating policy would be premature and of little assistance
until our business operations develop to a more advanced level. We do not currently have any specific or minimum criteria for
the election of nominees to the Board and we do not have any specific process or procedure for evaluating such nominees. The Board
will assess all candidates, whether submitted by management or shareholders, and make recommendations for election or appointment.
A
shareholder who wishes to communicate with our board of directors may do so by directing a written request addressed to our CEO
and director, Cristian Neagoe, at the address appearing on the first page of this annual report.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Exchange Act requires our directors and executive officers and persons who beneficially own more than ten percent
of a registered class of the Company’s equity securities to file with the SEC initial reports of ownership and reports of
changes in ownership of common stock and other equity securities of the Company. Officers, directors and greater than ten percent
beneficial shareholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. To the
best of our knowledge based solely on a review of Forms 3, 4, and 5 (and any amendments thereof) received by us, the following
persons have failed to file, on a timely basis, the identified reports required by Section 16(a) of the Exchange Act during fiscal
year ended April 30, 2014:
Name and principal position | |
Number
of late reports | |
Transactions
not timely reported | |
Known
failures to file a required form |
Cristian
Neagoe, CEO and Director | |
| 1 | | |
| 0 | | |
| 0 | |
Dan Patience
President, CFO, Treasurer and Director | |
| 1 | | |
| 0 | | |
| 0 | |
Melissa Lopez
10% Holder | |
| 0 | | |
| 0 | | |
| 0 | |
Imelda Tin
10% Holder | |
| 0 | | |
| 0 | | |
| 0 | |
Risk
Oversight
Effective
risk oversight is an important priority of the Board. Because risks are considered in virtually every business decision, the Board
discusses risk throughout the year generally or in connection with specific proposed actions. The Board’s approach to risk
oversight includes understanding the critical risks in the Company’s business and strategy, evaluating the Company’s
risk management processes, allocating responsibilities for risk oversight among the full Board, and fostering an appropriate culture
of integrity and compliance with legal responsibilities.
Corporate
Governance
The
Company promotes accountability for adherence to honest and ethical conduct; endeavors to provide full, fair, accurate, timely
and understandable disclosure in reports and documents that the Company files with the SEC and in other public communications
made by the Company; and strives to be compliant with applicable governmental laws, rules and regulations. The Company has not
formally adopted a written code of business conduct and ethics that governs the Company’s employees, officers and Directors
as the Company is not required to do so.
In
lieu of an Audit Committee, the Company’s Board is responsible for reviewing and making recommendations concerning the selection
of outside auditors, reviewing the scope, results and effectiveness of the annual audit of the Company's financial statements
and other services provided by the Company’s independent public accountants. The Board reviews the Company's internal accounting
controls, practices and policies.
Code
of Ethics
We
have not adopted a Code of Ethics that applies our principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions.
EXECUTIVE
COMPENSATION
The table
below summarizes all compensation awarded to, earned by, or paid to our officers for all services rendered in all capacities to
us for our fiscal years ended April 30, 2014 and 2013.
SUMMARY
COMPENSATION TABLE |
Name
and principal position | |
| Year | | |
| Salary
($) | | |
| Bonus ($) | | |
Stock
Awards ($) | |
Option
Awards ($) | |
Non-Equity
Incentive Plan Compensation ($) | |
Nonqualified
Deferred Compensation Earnings ($) | |
All
Other Compensation ($) | |
| Total ($) |
Cristian
Neagoe Chief Executive Officer, Principal Executive Officer and Director | |
| 2014 2013 | | |
| 15,000 0 | | |
| 10,000 0 | | |
0 0 | |
933,151
0 | |
0
0 | |
0 0 | |
0 0 | |
| 958,151 0 |
Dan
Patience President and Director (1) | |
| 2014 2013 | | |
| 15,000 0 | | |
| 10,000 0 | | |
0 0 | |
933,151
0 | |
0
0 | |
0 0 | |
0 0 | |
| 958,151 0 |
Melissa Lopez(2) | |
| 2014 2013 | | |
| 0 0 | | |
| 0 0 | | |
0 0 | |
0 0 | |
0
0 | |
0 0 | |
0 0 | |
| 0 0 |
Imelda Tin(3) | |
| 2014 2013 | | |
| 0 0 | | |
| 0 0 | | |
0 0 | |
0 0 | |
0
0 | |
0 0 | |
0 0 | |
| 0 0 |
(1)
On April 1, 2014, Company amended the employment agreement with Mr. Patience, for which the Company agreed to provide 858271 Alberta
Ltd (“Alberta”), a company in which Mr. Patience is a Director and his wife Kelly Applebee is the sole shareholder
of, a monthly compensation of $10,000, as well as other fees based on the total amount of investment proceeds that Alberta brings
to the Company.
(2) Melissa Lopez was Company’s President, Chief Executive Officer, Chief Financial Officer, Treasurer,
CTO and Director during the fiscal year ended April 30, 2013.
(3) Imelda Tin was Company’s Secretary and Director during
the fiscal year ended April 30, 2013.
Narrative
Disclosure to the Summary Compensation Table
On
March 14, 2014, we entered into a Consulting Agreement with each of Cristian Neagoe and Dan Patience. The terms of agreements
are set forth below for each executive officer.
Pursuant
to the terms and conditions of the Consulting Agreement with Cristian Neagoe:
|
• |
The term of Dr. Neagoe’s agreement
shall be for one year, and he may only be terminated with one month’s written notice; |
|
• |
Dr. Neagoe shall serve as CEO, Director
and Petroleum Engineer of our company; and |
|
• |
Dr. Neagoe shall receive $3,000 per
month and an option to purchase 2,000,000 shares of our common stock under our newly created 2014 Stock Incentive Plan at
an exercise price of $0.70 per share. |
Pursuant
to the terms and conditions of the Consulting Agreement with Dan Patience:
|
• |
The term of Mr. Patience’s agreement
shall be for one year, and he may only be terminated with one month’s written notice; |
|
• |
Mr. Patience shall serve as President, CFO, Secretary and Treasurer
of our company; and |
|
• |
Mr. Patience shall receive $3,000 per month and an option to purchase
2,000,000 shares of our common stock under our newly created 2014 Stock Incentive Plan at an exercise price of $0.70 per share. |
Outstanding
Equity Awards At Fiscal Year-End
The table
below summarizes all unexercised options, stock that has not vested, and equity incentive plan awards for each named executive
officer as of April 30, 2014.
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END |
OPTION
AWARDS | |
| STOCK
AWARDS | |
Name | |
| Number
of Securities Underlying Unexercised Options
(#) Exercisable | | |
| Number
of Securities Underlying Unexercised Options
(#) Unexercisable | | |
| Equity Incentive
Plan Awards: Number
of Securities Underlying Unexercised Unearned Options (#) | | |
| Option Exercise
Price ($) | | |
| Option Expiration Date | | |
| Number
of Shares or Units of Stock That Have Not Vested (#) | | |
| Market Value
of Shares
or Units
of Stock
That Have
Not Vested ($) | | |
| Equity Incentive
Plan Awards: Number of Unearned
Shares, Units or Other
Rights That
Have Not Vested (#) | | |
| Equity Incentive Plan
Awards: Market
or Payout Value
of Unearned Shares,
Units or Other
Rights That
Have Not Vested (#) | |
Cristian
Neagoe | |
| 2,000,000 | | |
| — | | |
| — | | |
| 0.70 | | |
| 3/14/15 | | |
| — | | |
| — | | |
| — | | |
| — | |
Dan Patience | |
| 2,000,000 | | |
| — | | |
| — | | |
| 0.70 | | |
| 3/14/16 | | |
| — | | |
| — | | |
| — | | |
| — | |
Melissa Lopez | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Imelda Tin | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Director
Compensation
We do not
pay any compensation to our directors at this time. However, we reserve the right to compensate our directors in the future with
cash, stock, options, or some combination of the above.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following
table sets forth, as of June 16, 2014, certain information as to shares of our voting stock owned by (i) each person known by
us to beneficially own more than 5% of our outstanding voting stock, (ii) each of our directors, and (iii) all of our executive
officers and directors as a group.
Unless otherwise
indicated below, to our knowledge, all persons listed below have sole voting and investment power with respect to their shares
of voting stock, except to the extent authority is shared by spouses under applicable law.
The number
of shares beneficially owned by each stockholder is determined under rules promulgated by the SEC. The information is not necessarily
indicative of beneficial ownership for any other purpose. Under these rules, beneficial ownership includes any shares as to which
the individual or entity has sole or shared voting or investment power and any shares as to which the individual or entity has
the right to acquire beneficial ownership within 60 days through the exercise of any stock option, warrant or other right.
The inclusion in the following table of those shares, however, does not constitute an admission that the named stockholder is
a direct or indirect beneficial owner.
Name and Address of
Beneficial Owners of Common Stock | |
Title of Class | |
| Amount
and Nature of Beneficial Ownership (1) | | |
| %
of Common Stock (1) | |
Cristian Neagoe (2)
11111 Katy Freeway - Suite # 910 Houston, Texas 77079 | |
Common Stock | |
| 2,000,000 | | |
| 1.76 | % |
Dan Patience (3) 11111 Katy Freeway
- Suite # 910 Houston, Texas 77079 | |
Common Stock | |
| 2,000,000 | | |
| 1.76 | % |
DIRECTORS AND OFFICERS
– TOTAL (One Officer and Director) | |
— | |
| — | | |
| | |
5% SHAREHOLDERS | |
| |
| | | |
| | |
Melissa Lopez Room 403 12-340
Mudan Road, Pudong, Shanghai, China. | |
Common Stock | |
| 29,375,000 | | |
| 26 | % |
Imelda Tin CMC Compound, Mercedez
Avenue, Brgy San Miguel, Pasig City 1600 | |
Common Stock | |
| 29,375,000 | | |
| 26 | % |
Asia Finance Corporation Ltd Aviation
House Level 2, 131 Featherston Street, Wellington, 6011, New Zealand | |
Common Stock | |
| 10,000,000 | | |
| 8.97 | % |
(1) The
number of shares beneficially owned includes shares of Common Stock that the owner or owners had the right to acquire on or
within 60 days of December 1, 2014 including through the exercise of options or warrants. Also included are
restricted shares of common stock, over which the owner or owners have voting power, but no investment power. Calculation
based on 111,861,934 shares of Common Stock outstanding as of December 1, 2014 and calculated in accordance with Rule 13d-3
under the Exchange Act.
(2)
Represents 2,000,000 shares of Common Stock issuable upon exercise of option pursuant to certain consulting agreement.
(3)
Represents 2,000,000 shares of Common Stock issuable upon exercise of option pursuant to certain consulting agreement.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Other
than the transactions described below and under the heading “Executive Compensation” (or with respect to which such
information is omitted in accordance with SEC regulations), since February 1, 2013 there have not been, and there is not currently
proposed, any transaction or series of similar transactions to which we were or will be a participant in which the amount involved
exceeded or will exceed $120,000, and in which any director, executive officer, holder of 5% or more of any class of our capital
stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest.
The
amount due to related parties of $102,759 and $96,716 at April 30, 2014 and 2013, respectively, consists of amounts owed to Melissa
Lopez for amounts advanced to pay for professional services provided by the Company’s outside service providers for services
rendered for periods ending on and prior to April 30, 2014. The amount is unsecured, non-interest bearing and due on demand.
On
January 22, 2014, we entered into a License Agreement with ME Resources Corporation. Dan Patience, our President, is the sibling
of the Chief Technology Officer and one of the directors of ME Resources Corporation.
Director
Independence
For
purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 4200(a)(15). Under NASDAQ
Rule 4200(a)(15), a director is not considered to be independent if he or she is also an executive officer or employee of the
corporation. Accordingly, we do not have an independent director as of December 1, 2014.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There
have been no disagreements on accounting and financial disclosures from the inception of our company through the date of this
registration statement.
On
March 13, 2014, Silberstein Ungar PLLC (the “Former Accountant”) resigned as the Company’s accountant. The Company
has engaged GBH CPAs, PC (“New Accountant”) as its principal accountants effective March 13, 2014. The decision to
change accountants was approved by the Company’s board of directors.
The
Former Accountant’s audit reports on the financial statements of the Company for the fiscal years ended April 30, 2013 contained
no adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting
principles, except that the audit reports on the financial statements of the Company for the fiscal years ended April 30, 2013
contained an uncertainty about the Company’s ability to continue as a going concern.
During
the fiscal years ended April 30, 2013 and through the interim period ended March 13, 2014, there were no “disagreements”
(as such term is defined in Item 304 of Regulation S-K) with the Former Accountant on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedures, which disagreements if not resolved to the satisfaction of the
Former Accountant would have caused them to make reference thereto in their reports on the financial statements for such periods.
On
March 13, 2014, the Company provided the Former Accountant with its disclosures in the Current Report on Form 8-K disclosing the
dismissal of the Former Accountant and requested in writing that the Former Accountant furnish the Company with a letter addressed
to the SEC stating whether or not they agree with such disclosures. The Former Accountant’s response is filed as an exhibit
to this Current Report on Form 8-K.
SELLING
STOCKHOLDER
We
are registering for resale shares of our common stock that are issued and outstanding held by the selling stockholder
identified below. We are registering the shares to permit the selling stockholder to resell the shares when and as it deems
appropriate in the manner described in the “Plan of Distribution.” As of December 1, 2014, there are 111,861,934
shares of common stock issued and outstanding.
The
following table sets forth:
|
• |
the name of the selling
stockholder, |
|
• |
the number of shares of our common
stock that the selling stockholder beneficially owned prior to the offering for resale of the shares under this Prospectus, |
|
• |
the maximum number of shares of our
common stock that may be offered for resale for the account of the selling stockholder under this Prospectus, and |
|
• |
the number and percentage of shares
of our common stock to be beneficially owned by the selling stockholder after the offering of the shares (assuming all of
the offered shares are sold by the selling stockholder). |
The
selling stockholder has never served as our officer or director or any of its predecessors or affiliates within the last three
years, nor has the selling stockholder had a material relationship with us. The selling stockholder is neither a broker-dealer
nor an affiliate of a broker-dealer. The selling stockholder did not have any agreement or understanding, directly or indirectly,
to distribute any of the shares being registered at the time of purchase.
The
selling stockholder may offer for sale all or part of the shares from time to time. The table below assumes that the selling stockholder
will sell all of the shares offered for sale. The selling stockholder is under no obligation, however, to sell any shares pursuant
to this Prospectus.
| |
| |
| |
Number of | |
|
| |
Shares of | |
| |
Shares of | |
|
| |
Common Stock | |
Maximum Number
of | |
Common Stock | |
|
| |
Beneficially | |
Shares of | |
Beneficially | |
Percent of |
| |
Owned prior to | |
Common Stock | |
Owned after | |
| Ownership | |
Name | |
Offering(1) | |
to be
Offered | |
Offering | |
| after
Offering | |
Premier Venture Partners, LLC (2) | |
3,955,070 | |
14,370,000 | |
14,370,000 | |
| 12.85 | % |
|
(1) |
Beneficial ownership is determined
in accordance with the rules and regulations of the SEC. In computing the number of shares beneficially owned by a person
and the percentage ownership of that person, securities that are currently convertible or exercisable into shares of our common
stock, or convertible or exercisable into shares of our common stock within 60 days of the date hereof are deemed outstanding.
Such shares, however, are not deemed outstanding for the purposes of computing the percentage ownership of any other person.
Except as indicated in the footnotes to the following table, each stockholder named in the table has sole voting and investment
power with respect to the shares set forth opposite such stockholder’s name. |
PLAN
OF DISTRIBUTION
Pursuant
to the terms of the Equity Purchase Agreement, Premier Venture committed to purchase up to $10,000,000 of our common stock over
a period of up to thirty-six (36) months. From time to time during the thirty-six (36) months period commencing from the effectiveness
of the registration statement, we may deliver a drawdown notice to Premier Venture which states the dollar amount that we intend
to sell to Premier Venture on a date specified in the put notice. The maximum investment amount per notice shall not exceed the
lesser of (i) 200% of the average daily trading volume of Company’s Common Stock on the five trading days prior to the day
the Put Notice is received by Premier Venture and (ii) 110% of any previous put amount during the maximum thirty-six (36) month
period (or for the first Put Notice, 2,000,000 shares). The total purchase price to be paid, in connection to the Put Notice,
by Premier Venture shall be calculated at a thirty percent (30%) discount to the lowest individual daily volume weighted average
price of the Common Stock during such trading day (“VWAP”) of during the five (5) consecutive trading days immediately
after the applicable Put notice date, notwithstanding certain provisions pursuant to the Equity Purchase Agreement, less six hundred
dollars ($600). We have more shares reserved than are covered in this registration statement.
In
connection with the Equity Purchase Agreement, we also entered into a registration rights agreement with Premier Venture, pursuant
to which we are obligated to use all commercially reasonable efforts to maintain the effectiveness of such registration statement
until termination of the Equity Purchase Agreement.
At
an assumed purchase price of $0.0371 (representing 70% of the closing price of our Common Stock of $0.0531 on November 21, 2014),
we will be able to receive up to $533,127 in gross proceeds, assuming the sale of the entire 14,370,000 shares being registered
hereunder pursuant to the Equity Purchase Agreement. Accordingly, we would be required to register an additional 255,171,779 shares
to obtain the balance of $9,466,873 under the Equity Purchase Agreement. We are currently authorized to issue 4,500,000,000 shares
of our common stock. Premier Venture has agreed to refrain from holding an amount of shares which would result in Premier Venture
owning more than 4.99% of the then-outstanding shares of our common stock at any one time.
The
selling stockholder may, from time to time, sell any or all of its shares of common stock on any stock exchange, market or trading
facility on which the shares are traded or in private transactions. These sales may be at fixed or negotiated prices. The selling
stockholder 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; |
|
• |
short sales after this registration
statement becomes effective; |
|
• |
broker-dealers may agree with the selling
stockholder to sell a specified number of such shares at a stipulated price per share; |
|
• |
through the writing of options on the
shares; |
|
• |
a combination of any such methods of
sale; and |
|
• |
any other method permitted pursuant
to applicable law. |
The
selling stockholder may also sell the shares directly to market makers acting as principals and/or broker-dealers acting as agents
for themselves or their customers. Such broker-dealers may receive compensation in the form of discounts, concessions or commissions
from the selling stockholder and/or the purchasers of shares for whom such broker-dealers may act as agents or to whom they sell
as principal or both, which compensation as to a particular broker-dealer might be in excess of customary commissions. Market
makers and block purchasers purchasing the shares will do so for their own account and at their own risk. It is possible that
a selling stockholder will attempt to sell shares of common stock in block transactions to market makers or other purchasers at
a price per share which may be below the then market price. The selling stockholder cannot assure that all or any of the shares
offered in this prospectus will be issued to, or sold by, the selling stockholder. The selling stockholder and any brokers, dealers
or agents, upon effecting the sale of any of the shares offered in this prospectus, are “underwriters” as that term
is defined under the Securities Act, or the Exchange Act, or the rules and regulations under such acts. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
We
have agreed to pay all fees and expenses in connection to the registration of the shares of common stock. Premier Venture intends
to sell/distribute the shares of common stock that they acquire from the Company in the open market.
The
selling stockholder shall acquire the securities offered hereby in the ordinary course of business and has advised us that it
has not entered into any agreements, understandings or arrangements with any underwriters or broker-dealers regarding the sale
of its shares of common stock, nor is there an underwriter or coordinating broker acting in connection with a proposed sale of
shares of common stock by any selling stockholder. If we are notified by any selling stockholder that any material arrangement
has been entered into with a broker-dealer for the sale of shares of common stock, if required, we will file a supplement to this
prospectus.
If
the selling stockholder uses this Prospectus for any sale of the shares of common stock, it will be subject to the prospectus
delivery requirements of 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
stockholder.
During
such time as it may be engaged in a distribution of any of the shares we are registering by this registration statement, Premier
Venture 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 Premier Venture 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 Premier Venture of the requirements for delivery of this
prospectus in connection with any sales of the common stock offered by this prospectus.
Pursuant
to the Equity Purchase Agreement, Premier Venture shall not sell stock short, either directly or indirectly through its affiliates,
principals or advisors, our common stock during the term of the agreement.
LEGAL
MATTERS
The
validity of the common stock offered by this prospectus will be passed upon for us by Szaferman, Lakind, Blumstein & Blader,
PC, Lawrenceville, New Jersey.
EXPERTS
The
consolidated financial statements of our company included in this prospectus and in the registration statement have been audited
by GBH CPAs, PC and Silberstein Ungar, PLLC, an independent registered public accounting firms, to the extent and for the periods
set forth in their respective reports appearing elsewhere herein and in the registration statement, and are included in reliance
on such reports, given the authority of said firms as experts in auditing and accounting.
INTERESTS
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.
WHERE
YOU CAN FIND MORE INFORMATION
We
filed with the SEC a registration statement under the Securities Act for the common stock in this offering. This prospectus does
not contain all of the information in the registration statement and the exhibits and schedule that were filed with the registration
statement. For further information with respect to us and our common stock, we refer you to the registration statement and the
exhibits and schedule that were filed with the registration statement. Statements contained in this prospectus about the contents
of any contract or any other document that is filed as an exhibit to the registration statement are not necessarily complete,
and we refer you to the full text of the contract or other document filed as an exhibit to the registration statement. A copy
of the registration statement and the exhibits and schedules that were filed with the registration statement may be inspected
without charge at the Public Reference Room maintained by the SEC at 100 F Street, N.E. Washington, DC 20549, and copies of all
or any part of the registration statement may be obtained from the Securities and Exchange Commission upon payment of the prescribed
fee. Information regarding the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. The
SEC maintains a website that contains reports, proxy and information statements, and other information regarding registrants that
file electronically with the SEC. The address of the website is www.sec.gov.
We
file periodic reports under the Exchange Act, including annual, quarterly and special reports, and other information with the
Securities and Exchange Commission. These periodic reports and other information are available for inspection and copying at the
regional offices, public reference facilities and website of the Securities and Exchange Commission referred to above.
WELL
POWER, INC.
INDEX
TO FINANCIAL STATEMENTS
|
|
|
|
Financial Statements for the Fiscal Years Ended April 30, 2014
and 2013 |
F-1 |
Reports of Independent Registered Public Accounting
Firm |
F-3 |
Balance Sheets as of April 30, 2014 and 2013 |
F-4 |
Statements of Operations for the years ended April
30, 2014 and 2013 |
F-5 |
Statements of Stockholders’ Deficit for
the years ended April 30, 2014 and 2013 |
F-6 |
Statements of Cash Flows for the years ended April
30, 2014 and 2013 |
F-7 |
Notes to Financial Statements |
|
Financial Statements for the Three Months Ended July 31, 2014
and 2013 |
F-12 |
Unaudited Balance Sheets as of July 31, 2014 and
April 30, 2013 |
F-13 |
Unaudited Statements of Operations for the three
months ended July 31, 2014 and 2013 |
F-14 |
Unaudited Statements of Cash Flows for the three
months ended July 31, 2014 and 2013 |
F-15 |
Notes to Unaudited Financial Statements |
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors and Stockholders of
Well
Power, Inc.
(Formerly
Vortec Electronics, Inc.)
Las
Vegas, Nevada
We
have audited the accompanying balance sheet of Well Power, Inc. (formerly Vortec Electronics, Inc.) (the “Company”)
as of April 30, 2014 and the related statements of operations, changes in stockholders’ deficit and cash flows for the year
then ended. The Company’s management is responsible for these financial statements. Our responsibility is to express an
opinion on these financial statements based on our audit. The financial statements of the Company as of and for the year ended
April 30, 2013 were audited by other auditors; whose report dated July 26, 2013; express an unqualified opinion on those
financial statements and also included an explanatory paragraph about the Company’s ability to continue as a going concern
We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position
of Well Power, Inc. as of April 30, 2014, and the results of its operations and its cash flows for the year then ended in conformity
with accounting principles generally accepted in the United States of America.
The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed
in Note 1 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency
that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters
are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this
uncertainty.
/s/
GBH CPAs, PC
GBH
CPAs, PC
www.gbhcpas.com
Houston,
Texas
August
13, 2014
Silberstein
Ungar, PLLC CPAs and Business Advisors
Phone
(248) 203-0080
Fax
(248) 281-0940
30600
Telegraph Road, Suite 2175
Bingham
Farms, MI 48025-4586
www.sucpas.com
Report
of Independent Registered Public Accounting Firm
To the Board
of Directors of
Well Power,
Inc.
(formerly
known as Vortec Electronics, Inc.)
Houston,
Texas
We
have audited the accompanying balance sheets of Well Power, Inc. (formerly known as Vortec Electronics, Inc.) (the “Company”)
as of April 30, 2013 and the related statements of operations, stockholders’ deficit, and cash flows for the year 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 audit.
We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. The Company 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 also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In
our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Well
Power, Inc. (formerly known as Vortec Electronics, Inc.) as of April 30, 2013, and the results of its operations and its cash
flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed
in Note 1 to the financial statements, the Company has negative working capital, has not yet received revenue from sales of products
or services, and has incurred losses from operations. These factors raise substantial doubt about the Company’s ability
to continue as a going concern. Management’s plans with regard to these matters are described in Note 1. The accompanying
financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Silberstein
Ungar, PLLC
Bingham
Farms, Michigan
July 24,
2013
Well
Power, Inc.
(Formerly
Vortec Electronics, Inc.)
Balance
Sheets
| |
April 30, | |
April 30, |
| |
2014 | |
2013 |
ASSETS | |
| | | |
| | |
Current Assets | |
| | | |
| | |
Cash
and cash equivalents | |
$ | 39,832 | | |
$ | — | |
Prepaid
expenses | |
| — | | |
| — | |
Total Current Assets | |
| 39,832 | | |
| | |
Intangible
Asset | |
| 400,000 | | |
| — | |
Total
Assets | |
$ | 439,832 | | |
$ | — | |
LIABILITIES AND STOCKHOLDERS’
DEFICIT | |
| | | |
| | |
Current Liabilities | |
| | | |
| | |
Accounts payable
and accrued liabilities | |
$ | 323,136 | | |
$ | 5,100 | |
Short-term loan payable | |
| 35,000 | | |
| — | |
Due to related parties | |
| 102,759 | | |
| 96,716 | |
Stock
payable | |
| 280,235 | | |
| — | |
Total Liabilities | |
| 741,130 | | |
| 101,816 | |
Contingencies and Commitments | |
| | | |
| | |
Stockholders’ Deficit | |
| | | |
| | |
Common
stock, 4,500,000,000 shares authorized, $0.001 par value; 107,500,000 shares issued and
outstanding | |
| 107,500 | | |
| 2,150 | |
Additional
paid-in capital | |
| 1,801,802 | | |
| 40,850 | |
Accumulated
Deficit | |
| (2,210,600 | ) | |
| (144,816 | ) |
Total Stockholders’
Deficit | |
| (301,298 | ) | |
| (101,816 | ) |
Total Liabilities
and Stockholders’ Deficit | |
$ | 439,832 | | |
$ | — | |
Well
Power, Inc.
(Formerly
Vortec Electronics, Inc.)
Statements
of Operations
| |
For the | |
For the |
| |
Year Ended | |
Year Ended |
| |
April
30, 2014 | |
April
30, 2013 |
Operating Expenses | |
| | | |
| | |
General
and administrative | |
$ | 57,197 | | |
$ | — | |
Transfer agent and
filing fees | |
| 16,564 | | |
| — | |
Foreign exchange
gain | |
| 2,818 | | |
| — | |
Consulting fees | |
| 1,940,537 | | |
| — | |
Professional
fees | |
| 47,363 | | |
| 19,760 | |
Total Operating Expenses | |
| 2,064,479 | | |
| (19,760 | ) |
Loss from operations | |
| (2,064,479 | ) | |
| (19,760 | ) |
Other Expense | |
| | | |
| | |
Interest
expense | |
| (1,305 | ) | |
| — | |
Net Loss | |
$ | (2,065,784 | ) | |
$ | (19,760 | ) |
Net Loss Per Common
Share – Basic And Diluted | |
$ | (0.02 | ) | |
$ | (0.00 | ) |
Weighted Average
Common Shares Outstanding – Basic And Diluted | |
| 107,500,000 | | |
| 107,500,000 | |
The
accompanying notes are an integral part of these financial statements.
Well
Power, Inc.
(Formerly
Vortec Electronics, Inc.)
Statement
of Stockholders’ Deficit
| |
| |
| |
Additional | |
| |
|
| |
Common Stock | |
Paid-in | |
| |
|
| |
Shares | |
Amount | |
Capital | |
Deficit | |
Total |
Balance, April 30, 2012 | |
| 2,150,000 | | |
$ | 2,150 | | |
$ | 40,850 | | |
$ | (125,056 | ) | |
$ | (82,056 | ) |
Net loss | |
| — | | |
| — | | |
| — | | |
| (19,760 | ) | |
| (19,760 | ) |
Balance, April 30, 2013 | |
| 2,150,000 | | |
| 2,150 | | |
| 40,850 | | |
| (144,816 | ) | |
| (101,816 | ) |
Effects of stock-split | |
| 105,350,000 | | |
| 105,350 | | |
| (105,350 | ) | |
| — | | |
| — | |
Stock-based compensation expense | |
| — | | |
| — | | |
| 1,866,302 | | |
| — | | |
| 1,866,302 | |
Net loss | |
| — | | |
| — | | |
| — | | |
| (2,065,784 | ) | |
| (2,065,784 | ) |
Balance, April 30, 2014 | |
| 107,500,000 | | |
$ | 107,500 | | |
$ | 1,801,802 | | |
$ | (2,210,600 | ) | |
$ | (301,298 | ) |
The
accompanying notes are an integral part of these financial statements.
Well
Power, Inc.
(Formerly
Vortec Electronics, Inc.)
Statements
of Cash Flows
| |
For the | |
For the |
| |
Year Ended | |
Year Ended |
| |
April
30, 2014 | |
April
30, 2014 |
Cash Flows From Operating Activities | |
| | | |
| | |
Net loss | |
$ | (2,065,784 | ) | |
$ | (19,760 | ) |
Adjustments to reconcile net loss to net
cash used in operating activities: | |
| | | |
| | |
Stock-based compensation | |
| 1,896,537 | | |
| — | |
Changes in operating assets and liabilities: | |
| | | |
| | |
Accounts
payable and accrued liabilities | |
| 18,036 | | |
| 301 | |
Net Cash Used in
Operating Activities | |
| (151,211 | ) | |
| (19,459 | ) |
Cash Flows From Investing Activities | |
| | | |
| | |
Purchase of license | |
| (100,000 | ) | |
| — | |
Net Cash Used in
Investing Activities | |
| (100,000 | ) | |
| — | |
Cash Flows From Financing Activities | |
| | | |
| | |
Loans received from
officer | |
| 6,043 | | |
| 19,459 | |
Proceeds from issuances
of stock payable | |
| 250,000 | | |
| — | |
Proceeds
from short-term loan payable | |
| 35,000 | | |
| — | |
Net Cash Provided
by Financing Activities | |
| 291,043 | | |
| 19,459 | |
Net Increase In Cash | |
| 39,832 | | |
| — | |
Cash - Beginning
of Year | |
| — | | |
| — | |
Cash - End of Year | |
$ | 39,832 | | |
$ | — | |
Supplementary
Cash Flows Information: | |
| | | |
| | |
Interest
paid | |
$ | — | | |
$ | — | |
Income
taxes paid | |
$ | — | | |
$ | — | |
Non-cash Investing and Financing Activities: | |
| | | |
| | |
Payable
incurred form purchase of license | |
$ | 300,000 | | |
$ | — | |
The
accompanying notes are an integral part of these financial statements.
Well
Power, Inc.
(Formerly
Vortec Electronics, Inc.)
Notes
To The Financial Statements
As
of April 30, 2014 and 2013 and for the years then ended
1.
Nature of Business and Continuance of Operations
Well
Power, Inc. (the “Company”) (formerly Vortec Electronics, Inc.) was incorporated in Nevada on March 27, 2007.
On December 10, 2013, the Company effected a merger with its wholly-owned subsidiary, Well Power, Inc. As part of the merger,
the Company authorized a name change to Well Power, Inc. On January 22, 2014, the Company entered into an Exclusive
License and Distribution Agreement to distribute mobile and scalable Wellhead Micro-Refinery Units (MRU’s). Upon entering
into the agreement, the Company is a business whose planned principal operations are the sales and distribution of MRU’s
in the state of Texas. As of April 30, 2014, the Company has had no operating revenues to date.
The
Company has incurred losses since inception, has negative working capital, and has not yet received revenues from sales of products
or services. These factors create substantial doubt about the Company’s ability to continue as a going concern. The financial
statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern. The
ability of the Company to continue as a going concern is dependent on the Company generating cash from the sale of its common
stock and/or obtaining debt financing and attaining future profitable operations. Management’s plans include selling its
equity securities and obtaining debt financing to fund its capital requirement and ongoing operations; however, there can be no
assurance the Company will be successful in these efforts
2.
Summary of Significant Accounting Policies
Basis
of Presentation
The
financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United
States of America and are presented in US dollars. The Company’s fiscal year end is April 30.
Use
of Estimates
The
preparation of financial statements in conformity with United States generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
period. The Company regularly evaluates estimates and assumptions related to intangible assets and deferred income tax asset valuation
allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors
that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the
carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources.
The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent
there are material differences between the estimates and the actual results, future results of operations will be affected.
Cash
and Cash Equivalents
The
Company considers all highly liquid investments with maturities of three months or less to be cash equivalents.
Financial
Instruments
The
Company’s financial instruments consist of cash and cash equivalents, accounts payable, accrued liabilities, short term
loan payable and an amount due to an officer. The carrying amount of these financial instruments approximates fair value due either
to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial
statements.
Intangible
Assets
Intangible
assets include all costs incurred to acquire a licensing and distribution agreement. Intangible assets are recorded at cost and
amortized on a straight-line basis over their estimated useful life of 5 years. Management conducts an annual assessment of the
residual balances, useful lives and depreciation methods used. Changes arising from the assessment are applied by the Company
prospectively.
Income
Taxes
The
Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes. The asset
and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences
of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax
credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will
be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets
to the amount that is believed more likely than not to be realized.
Foreign
Currency Translation
The
Company’s planned operations will be in the United States, which results in exposure to market risks from changes in foreign
currency exchange rates. The financial risk is the risk to the Company’s operations that arise from fluctuations in foreign
exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce
its exposure to foreign currency risk. The Company's functional currency for all operations worldwide is the U.S. dollar. Nonmonetary
assets and liabilities are translated at historical rates and monetary assets and liabilities are translated at exchange rates
in effect at the end of the year. Revenues and expenses are translated at average rates for the year. Gains and losses from translation
of foreign currency financial statements into U.S. dollars are included in current results of operations.
Revenue
Recognition
The
Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.
Stock-Based
Compensation
The
expense for equity awards vested during the reporting period is based upon the grant date fair value of the award. The expense
is recognized over the applicable vesting period of the stock award using the straight-line method.
Earnings
(Loss) Per Common Share
Basic
EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares
outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during
the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted
EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise
of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As of April
30, 2014, the Company has no potentially dilutive securities outstanding.
Recent
Accounting Pronouncements
The
Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and
does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact
on its financial position or results of operations.
The
Company has limited operations and is considered to be in the development stage. During the year ended April 30, 2014, the Company
has elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of
Certain Financial Reporting Requirements. The adoption of this Update allows the Company to remove the inception-to-date information
and all references to development stage.
3.
Intangible Asset
On
January 22, 2014, the Company entered into an Exclusive License and Distribution Agreement (the “License Agreement”)
with ME Resources Corp (“MEC”), a Canadian publicly listed company. The President of the Company is related to a director
of MEC. Under the License Agreement, MEC appointed the Company as its exclusive distributor of Wellhead Micro-Refinery Units (“MRUs”)
for the initial state of Texas. The License Agreement is for 5 years from the date of execution, but can be extended for two successive
periods of an additional 5 years each.
Pursuant
to the License Agreement, the Company agreed to pay consideration of $400,000, payable in two installments. $100,000 is to be
paid within 30 days (paid) and the balance of $300,000 is to be paid within 90 days. The Company recorded the costs of acquiring
the license as an intangible asset. As of April 30, 2014, a balance of $300,000 had been recorded as a payable. The company paid
$200,000 subsequent to April 30, 2014.
4.
Short-Term Loan
On
December 18, 2013, the Company entered into a loan agreement in which the note holder agreed to provide a loan to the Company
in the principal amount of up to $35,000. The loan is unsecured, bears interest at 11% per annum and is payable on September 30,
2014. As at April 30, 2014, the note holder has provided the full $35,000 to the Company and interest of $1,305 has been accrued.
5.
Due To Related Parties
| a) | The
amount due to related parties of $102,759 and $96,716 at April 30, 2014 and 2013, respectively,
consists of amounts owed to officers and shareholders of the Company for amounts advanced
to pay for professional services provided by the Company’s outside service providers
for services rendered for periods ending on and prior to April 30, 2014. The amount is
unsecured, non-interest bearing and due on demand. |
| b) | On
January 22, 2014, the Company entered into a License Agreement with ME Resources Corp
(Note 3). The President of the Company is related to a director of MEC. |
6.
Common Stock
The
Company’s authorized capital consisted of 4,500,000,000 shares of common stock with a par value of $0.001 per share.
There
were 107,500,000 shares of common stock issued and outstanding as of April 30, 2014.
| a) | On
December 10, 2013, the Company approved an increase to the number of authorized shares,
par value $0.001, from 90,000,000 shares to 4,500,000,000 shares. Correspondingly, the
Company approved a forward split of 50:1 for which each shareholder was issued 50 new
common shares in exchange for each 1 old common share outstanding. Prior to approval
of the forward split, the Company had a total of 2,150,000 issued and outstanding common
shares. Effective December 10, 2013, the Company has a total of 107,500,000 issued and
outstanding common shares. |
| b) | On
March 10, 2014, the Company sold 431,034 units at $0.58 per unit for gross proceeds of
$250,000. Each unit consisted of one common share and one share purchase warrant. Each
share purchase warrant is exercisable into one additional common share at an exercise
price of $0.90 per share for a period of 2 years from the date of issuance. The relative
fair value of the shares and warrants is $159,475 and $90,525, respectively. As of April
30, 2014, the Company is obligated to issue 431,034 common shares with a fair value of
$250,000, which has been recorded as stock payable. |
| c) | During
the year ended April 30, 2014, the Company entered into the consulting agreement described
in Note 8. As of April 30, 2014, the Company is obligated to issue 93,719 common shares
with a fair value of $30,325, which has been recorded as stock payable. |
7.
Stock Options
On
March 14, 2014, the Company entered into two consulting agreements (refer to Note 8) whereby the Company granted 4,000,000 options
to purchase shares of common stock exercisable for a period of two years at a price of $0.70 per share.
The
following table summarizes information about the stock options.
| |
Number
of Options | |
Weighted
Average Exercise Price $ | |
Weighted
Average Remaining Contractual Life (years) | |
Aggregate
Intrinsic Value $ |
| Outstanding
and exercisable, April 30, 2014 | | |
| 4,000,000 | | |
| 0.70 | | |
| 1.87 | | |
| — | |
Stock-based
compensation expense is determined using the Black-Scholes option pricing model. During the year ended April 30, 2014, the Company
recognized the fair value of the options vested of $1,866,302 as consulting fees. The weighted average fair value of the options
vested during the year ended April 30, 2014 was $0.74 per option. Weighted average assumptions used in calculating the fair value
of stock-based compensation expense are as follows:
| |
Year
Ended
April 30, 2014 |
Risk-free
rate | |
| 0.36 | % |
Dividend yield | |
| 0 | % |
Volatility | |
| 124 | % |
Weighted average
expected life of the options (years) | |
| 2.00 | |
8.
Commitments And Contingencies
The
Company neither owns nor leases any real or personal property. An officer has provided office services without charge. There is
no obligation for the officer to continue this arrangement. Such costs are immaterial to the financial statements and accordingly
are not reflected herein. The officers and directors are involved in other business activities and most likely will become involved
in other business activities in the future.
| a) | On
January 10, 2014, the Company entered into a consulting agreement with a consultant who
will provide consulting services in consideration for $6,000 per month. The consulting
fee is payable as follows: |
i.
$3,000 per month settled in shares at the end of the term of the contract. The number of shares issuable is equal to $3,000 divided
by the average of the 3 lowest trading prices in the last 10 days of each month.
ii. $3,000
per month payable in cash at the end of each month.
As
of April 30, 2014, no shares had been issued.
| b) | On
January 28, 2014, the Company entered into an investor relations agreement pursuant to
which the Company will make payments totaling $25,000 payable as follows: |
i.
1st payment: $10,000 due immediately (paid);
ii. 2nd
payment: $5,000 due March 1, 2014 (paid);
iii. 3rd
payment: $5,000 due April 1, 2014 (paid);
iv. 4th
payment: $5,000 due May 1, 2014 (paid).
| c) | On
March 14, 2014, the Company entered into a consulting agreement with the President of
the Company for consulting services to be provided over a one-year term in consideration
for $1,000 per month for the first month, and $3,000 per month for the following eleven
months. The Company will also pay an initial signing bonus of $10,000. In addition, the
President of the Company was granted 2,000,000 options to purchase shares of common stock
exercisable for a period of two years at a price of $0.70 per share. |
| d) | On
March 14, 2014, the Company entered into a consulting agreement with the CEO of the Company
for consulting services to be provided over a one-year term in consideration for $3,000
per month. The Company will also pay an initial signing bonus of $10,000. In addition,
the CEO of the Company was granted 2,000,000 options to purchase shares of common stock
exercisable for a period of two years at a price of $0.70 per share. |
9.
Income Tax
For
the years since inception, the Company has incurred net losses and therefore, has no tax liability. The net deferred tax asset
generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward is approximately
$344,000 at April 30, 2014, and will begin to expire in the year 2027.
The
provision for Federal income tax consists of the following for the years ended April 30, 2014 and 2013:
| |
| 2014 | | |
| 2013 | |
Income
tax benefit computed at the statutory rate | |
$ | 702,367 | | |
$ | 6,718 | |
Stock-based compensation | |
| (634,544 | ) | |
| — | |
Change
in valuation allowance | |
| (67,823 | ) | |
| (6,718 | ) |
Provision
for income taxes | |
$ | — | | |
$ | — | |
The
cumulative tax effect at the expected rate of 34% of significant items comprising of the Company’s net deferred tax amount
is as follows as of April 30, 2014 and 2013:
| |
| 2014 | | |
| 2013 | |
Deferred income tax
assets | |
| | | |
| | |
Net
operating losses | |
$ | 117,061 | | |
$ | 49,238 | |
Less:
valuation allowance | |
| (117,061 | ) | |
| (49,238 | ) |
Net
deferred income tax assets | |
$ | — | | |
$ | — | |
Due
to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of approximately $344,000
for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating
loss carry forwards may be limited as to use in future years.
10.
Subsequent Events
On
May 21, 2014, the Company completed a private placement of 3,000,000 units for cash proceeds of $150,000. Each unit consists of
one share of common stock and one warrant to purchase an additional share of common stock. The warrants are exercisable for a
period of two years at $0.90 per share.
Well
Power, Inc.
Balance
Sheets
(unaudited)
| |
July 31, | |
April 30, |
| |
2014 | |
2014 |
| |
| (restated) | | |
| | |
ASSETS | |
| | | |
| | |
Current Assets | |
| | | |
| | |
Cash | |
$ | 15,034 | | |
$ | 39,832 | |
Prepaid expenses | |
| 2,599 | | |
| — | |
Total Current Assets | |
| 17,633 | | |
| 39,832 | |
Intangible Assets | |
| 400,000 | | |
| 400,000 | |
Total Assets | |
$ | 417,633 | | |
$ | 439,832 | |
LIABILITIES AND
STOCKHOLDERS’ DEFICIT | |
| | | |
| | |
Current Liabilities | |
| | | |
| | |
Accounts payable
and accrued liabilities | |
$ | 189,754 | | |
$ | 323,136 | |
Short-term loan payable | |
| 35,000 | | |
| 35,000 | |
Due to related parties | |
| 173,559 | | |
| 102,759 | |
Stock payable | |
| 530,235 | | |
| 280,235 | |
Total Liabilities | |
| 928,548 | | |
| 741,130 | |
Contingencies and
Commitments | |
| | | |
| | |
Stockholders’
Deficit | |
| | | |
| | |
Common
stock, 4,500,000,000 shares authorized, $0.001 par value; 107,500,000 shares issued and outstanding | |
| 107,500 | | |
| 107,500 | |
Additional
paid-in capital | |
| 1,801,802 | | |
| 1,801,802 | |
Accumulated
deficit | |
| (2,420,217 | ) | |
| (2,210,600 | ) |
Total Stockholders’
Deficit | |
| (510,915 | ) | |
| (301,298 | ) |
Total Liabilities
and Stockholders’ Deficit | |
$ | 417,633 | | |
$ | 439,832 | |
The
accompanying notes are an integral part of these unaudited financial statements.
Well
Power, Inc.
Statements
of Operations
(unaudited)
| |
For the | |
For the |
| |
Three Months Ended | |
Three Months Ended |
| |
July
31, 2014 | |
July
31, 2013 |
Operating Expenses | |
| | | |
| | |
General
and administrative | |
$ | 208,647 | | |
$ | 2,000 | |
Total Operating Expenses | |
| (208,647 | ) | |
| (2,000 | ) |
Other Expense | |
| | | |
| | |
Interest
expense | |
| (970 | ) | |
| — | |
Net Loss | |
$ | (209,617 | ) | |
$ | (2,000 | ) |
Net Loss Per Common
Share - Basic And Diluted | |
$ | (0.00 | ) | |
$ | (0.00 | ) |
Weighted Average
Common Shares Outstanding - Basic And Diluted | |
| 107,500,000 | | |
| 107,500,000 | |
The
accompanying notes are an integral part of these unaudited financial statements.
Well
Power, Inc.
Statements
of Cash Flows
(unaudited)
| |
For the | |
For the |
| |
Three Months Ended | |
Three Months Ended |
| |
July
31, 2014 | |
July
31, 2013 |
Cash Flows From Operating Activities | |
| | | |
| | |
Net loss | |
$ | (209,617 | ) | |
$ | (2,000 | ) |
Adjustments to reconcile net loss to net
cash used in operating activities: | |
| | | |
| | |
Changes in operating assets and liabilities: | |
| | | |
| | |
Prepaid expense | |
| (2,599 | ) | |
| — | |
Accounts
payable and accrued liabilities | |
| (133,382 | ) | |
| — | |
Net Cash Used in
Operating Activities | |
| (345,598 | ) | |
| (2,000 | ) |
Cash Flows From Financing Activities | |
| | | |
| | |
Net advances from
related parties | |
| 70,800 | | |
| 2,000 | |
Proceeds
from issuances of stock payable | |
| 250,000 | | |
| — | |
Net Cash Provided
by Financing Activities | |
| 320,800 | | |
| 2,000 | |
Net Decrease In Cash | |
| (24,798 | ) | |
| — | |
Cash - Beginning of Period | |
| 39,832 | | |
| — | |
Cash - End of Period | |
$ | 15,034 | | |
$ | — | |
Supplementary Cash Flows
Information: | |
| | | |
| | |
Interest
paid | |
$ | — | | |
$ | — | |
Income
taxes paid | |
$ | — | | |
$ | — | |
The
accompanying notes are an integral part of these unaudited financial statements.
Well
Power, Inc.
Notes
to the Financial Statements
(unaudited)
1. Nature
of Business and Continuance of Operations
Well
Power, Inc. (the “Company”) was incorporated in Nevada on March 27, 2007. On December 10, 2013, the Company effected
a merger with its wholly-owned subsidiary, Well Power, Inc. As part of the merger, the Company authorized a name change from Vortec
Electronics, Inc. to Well Power, Inc. On January 22, 2014, the Company entered into an Exclusive License and Distribution Agreement
to distribute mobile and scalable Wellhead Micro-Refinery Units (MRU’s). Upon entering into the agreement, the Company is
a business whose planned principal operations are the sales and distribution of MRU’s in the state of Texas. As at April
30, 2014, the Company has had no operating revenues to date.
The
Company has incurred losses since inception, has negative working capital, and has not yet received revenues from sales of products
or services. These factors create substantial doubt about the Company’s ability to continue as a going concern. The financial
statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern. The
ability of the Company to continue as a going concern is dependent on the Company generating cash from the sale of its common
stock and/or obtaining debt financing and attaining future profitable operations. Management’s plans include selling its
equity securities and obtaining debt financing to fund its capital requirement and ongoing operations; however, there can be no
assurance the Company will be successful in these efforts
2. Summary
of Significant Accounting Policies
Basis
of Presentation
The
financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United
States of America and are presented in US dollars. The Company’s fiscal year end is April 30.
Interim
Financial Statements
The
accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles
generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"),
and should be read in conjunction with the audited financial statements and notes thereto contained elsewhere in this prospectus.
In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of
financial position and the results of operations for the interim periods presented have been reflected herein. The results of
operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial
statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent
fiscal year end April 30, 2014 have been omitted.
Use
of Estimates
The
preparation of financial statements in conformity with United States generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
period. The Company regularly evaluates estimates and assumptions related to intangible assets and deferred income tax asset valuation
allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors
that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the
carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources.
The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent
there are material differences between the estimates and the actual results, future results of operations will be affected.
Cash
and Cash Equivalents
The
Company considers all highly liquid investments with maturities of three months or less to be cash equivalents.
Financial
Instruments
The
Company’s financial instruments consist of cash and cash equivalents, accounts payable, accrued liabilities, short term
loan payable and an amount due to an officer. The carrying amount of these financial instruments approximates fair value due either
to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial
statements.
Intangible
Assets
Intangible
assets include all costs incurred to acquire a licensing and distribution agreement. Intangible assets are recorded at cost and
amortized on a straight-line basis over their estimated useful life of 5 years. Management conducts an annual assessment of the
residual balances, useful lives and depreciation methods used. Changes arising from the assessment are applied by the Company
prospectively.
Income
Taxes
The
Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes. The asset
and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences
of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax
credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will
be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets
to the amount that is believed more likely than not to be realized.
Foreign
Currency Translation
The
Company’s planned operations will be in the United States, which results in exposure to market risks from changes in foreign
currency exchange rates. The financial risk is the risk to the Company’s operations that arise from fluctuations in foreign
exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce
its exposure to foreign currency risk. The Company's functional currency for all operations worldwide is the U.S. dollar. Nonmonetary
assets and liabilities are translated at historical rates and monetary assets and liabilities are translated at exchange rates
in effect at the end of the year. Revenues and expenses are translated at average rates for the year. Gains and losses from translation
of foreign currency financial statements into U.S. dollars are included in current results of operations.
Revenue
Recognition
The
Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.
Stock-Based
Compensation
The
expense for equity awards vested during the reporting period is in accordance with ASC Topic 718 and based upon the grant date
fair value of the award. The expense is recognized over the applicable vesting period of the stock award using the straight-line
method.
Subsequent
Events
The
Company has evaluated all transactions through the date the consolidated financial statements were issued for subsequent event
disclosure consideration.
Earnings
(Loss) Per Common Share
Basic
EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares
outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during
the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted
EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise
of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive. At July 31,
2014, the Company has no potentially dilutive securities outstanding.
Recent
Accounting Pronouncements
The
Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and
does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact
on its financial position or results of operations.
3. Intangible
Asset
On
January 22, 2014, the Company entered into an Exclusive License and Distribution Agreement (the “License Agreement”)
with ME Resources Corp (“MEC”), a Canadian publicly listed company. The President of the Company is related to a director
of MEC. Under the License Agreement, MEC appointed the Company as its exclusive distributor of Wellhead Micro-Refinery Units (“MRUs”)
for the initial state of Texas. The License Agreement is for 5 years from the date of execution, but can be extended for two successive
periods of an additional 5 years each.
Pursuant
to the License Agreement, the Company agreed to pay consideration of $400,000, payable in two instalments. $100,000 is to be paid
within 30 days (paid) and the balance of $300,000 is to be paid within 90 days ($200,000 paid). At July 31, 2014, the Company
recorded the costs of acquiring the license as an intangible asset, and the remaining balance of $100,000 has not been paid and
is included in accounts payable and accrued liabilities. Subsequent to the quarter, the Company paid $79,000 of its remaining
cash obligation.
4. Short-Term
Loan
On
December 18, 2013, the Company entered into a loan agreement in which the note holder agreed to provide a loan to the Company
in the principal amount of up to $35,000. The loan is unsecured, bears interest at 11% per annum and is payable on September 30,
2014. As at July 31, 2014, the note holder has provided the full $35,000 to the Company, and interest of $2,275 has been accrued.
5. Due To
Related Parties
a)
The amount due to related parties of $173,559 and $102,759 at July 31, 2014 and April 30, 2014, respectively, consists of amounts
owed to officers and shareholders of the Company for amounts advanced to pay for professional services provided by the Company’s
outside service providers and for consulting services rendered for periods ending on and prior to July 31, 2014. The amount is
unsecured, non-interest bearing and due on demand.
b)
On January 22, 2014, the Company entered into a License Agreement with ME Resources Corp (Note 3). The President of the Company
is related to a director of MEC.
6. Common
Stock
The
Company’s authorized capital consisted of 4,500,000,000 shares of common stock with a par value of $0.001 per share.
There
were 107,500,000 shares of common stock issued and outstanding as of July 31, 2014.
On
March 10, 2014, the Company sold 431,034 units at $0.58 per unit for gross proceeds of $250,000. Each unit consisted of one common
share and one share purchase warrant. Each share purchase warrant is exercisable into one additional common share at an exercise
price of $0.90 per share for a period of 2 years from the date of issuance. The relative fair value of the shares and warrants
is $159,475 and $90,525, respectively. As of July 31, 2014, the Company is obligated to issue 431,034 common shares with a fair
value of $250,000, which has been recorded as stock payable.
On
June 5, 2014, the Company sold 5,000,000 units at $0.05 per unit for gross proceeds of $250,000. Each unit consisted of one common
share and one share purchase warrant. Each share purchase warrant is exercisable into one additional common share at an exercise
price of $0.90 per share for a period of 2 years from the date of issuance. The relative fair value of the shares and warrants
is $184,608 and $65,392, respectively. As of July 31, 2014, the Company is obligated to issue 5,000,000 common shares with a fair
value of $250,000, which has been recorded as stock payable.
As
July 31, 2014, pursuant to the consulting agreement described in Note 8(a), the Company is obligated to issue 93,719 common shares
with a fair value of $30,235, which has been recorded as stock payable.
7. Stock
Options
On
March 14, 2014, the Company entered into two consulting agreements (refer to Note 8) whereby the Company granted 4,000,000 options
to purchase shares of common stock exercisable for a period of two years at a price of $0.70 per share.
The
following table summarizes information about the stock options.
| |
Number
of Options | |
Weighted
Average Exercise Price $ | |
Weighted
Average Remaining Contractual Life (years) | |
Aggregate
Intrinsic Value $ |
| Outstanding
and exercisable, July 31, 2014 | | |
| 4,000,000 | | |
| 0.70 | | |
| 1.62 | | |
| — | |
8. Commitments
And Contingencies
The
Company neither owns nor leases any real or personal property. An officer has provided office services without charge. There is
no obligation for the officer to continue this arrangement. Such costs are immaterial to the financial statements and accordingly
are not reflected herein. The officers and directors are involved in other business activities and most likely will become involved
in other business activities in the future.
|
a) |
On January 10, 2014, the
Company entered into a consulting agreement with a consultant who provided consulting services in consideration for $6,000
per month for a 4 month term. The consulting fee is payable as follows: |
i. $3,000 per month settled in shares at the end of the term of the contract. The number of shares
issuable is equal to $3,000 divided by the average of the 3 lowest trading prices in the last 10 days of each month.
ii. $3,000 per month payable in cash at the end of each month.
As
of July 31, 2014, no shares had been issued. The company is obligated to issue 93,719 common shares.
|
b) |
On March 14, 2014, the Company entered
into a consulting agreement with the President of the Company for consulting services to be provided over a one-year term
in consideration for $1,000 per month for the first month, and $3,000 per month for the following eleven months. The Company
will also pay an initial signing bonus of $10,000. In addition, the President of the Company was granted 2,000,000 options
to purchase shares of common stock exercisable for a period of two years at a price of $0.70 per share. During the three months
ended July 31, 2014, the Company recognized $9,000 in consulting fees under the agreement, and $79,000 for additional consulting
fees incurred during the period. |
|
c) |
On March 14, 2014, the
Company entered into a consulting agreement with the CEO of the Company for consulting services to be provided over a one-year
term in consideration for $3,000 per month. The Company will also pay an initial signing bonus of $10,000. In addition, the
CEO of the Company was granted 2,000,000 options to purchase shares of common stock exercisable for a period of two years
at a price of $0.70 per share. During the three months ended July 31, 2014, the Company recognized $9,000 in consulting fees. |
|
d) |
On July 25, 2014, the Company
entered into a $10,000 8% Convertible Promissory Note with a non-related third party. Under the terms of the Convertible Promissory
Note, all principal and interest matures on July 25, 2015. The third party shall have the right to convert any unpaid sums
into common stock of the Company at the rate of the lesser of $.09 per share or 50% of the lowest trade reported in the 10
days prior to date of conversion, subject to adjustment as described in the note. As at July 31, 2014, the Company has not
received any proceeds under the convertible note. Refer to Note 9(d). |
9. Restatement
On
November 12, 2014, the Company determined that the payable of $25,000 to MEC is still valid. As a result, the intangible asset
should have been recorded at the original agreed cash price of $400,000 as of July 31, 2014. The impact of the restatement on
the balance sheet as of July 31, 2014 is as follows:
| |
As originally | |
| |
|
| |
Reported | |
Change | |
Restated |
Intangible assets | |
| 375,000 | | |
| 25,000 | | |
| 400,000 | |
Total assets | |
| 392,633 | | |
| 25,000 | | |
| 417,633 | |
Accounts payable and accrued liabilities | |
| 164,754 | | |
| 25,000 | | |
| 189,000 | |
Total liabilities | |
| 903,548 | | |
| 25,000 | | |
| 928,548 | |
Total Liabilities and Stockholders’
Deficit | |
| 392,633 | | |
| 25,000 | | |
| 417,633 | |
10. Subsequent
Events
|
a) |
On August 6, 2014, the
Company entered into a Note Purchase Agreement and $275,000 10% Convertible Promissory Note with a non-related third party.
Under the terms of the Convertible Promissory Note, the Company will receive principal in one or more installments with a
Maturity Date for the Note of July 29, 2015. The third party shall have the right to convert any unpaid sums into common stock
of the Company at the rate of the lesser of $0.08 per share or 55% of the lowest trade reported in the 15 days prior to date
of conversion, subject to adjustment as described in the note. |
|
b) |
On August 21, 2014, the Company entered
into a convertible debenture with a non-related third party pursuant to which the Company borrowed $133,000. The convertible
debenture bears interest at 2% per annum, and the principal and all unpaid interest is due on January 15, 2015. The convertible
debenture is convertible at any time at the third party’s option into shares of the Company’s common stock at
a variable conversion price of 45% of the lowest traded price during the 15 days prior to the notice of conversion, subject
to adjustment as described in the convertible debenture. |
|
c) |
On August 26, 2014, the
Company entered into an Equity Purchase Agreement and Registration Rights Agreement with Premier Venture Partners, LLC (“Premier”)
whereby Premier is obligated, providing the Company has met certain conditions including the filing of a Form S-1 Registration
Statement for the shares to be acquired, to purchase up to ten million dollars ($10,000,000) of the Company’s common
stock at the rates set forth in the Equity Purchase Agreement. On September 5, 2014, the Company issued 1,977,535 common shares
with a fair value of $134,670 to Premier. On September 11, 2014, the Company issued an additional 1,977,535 common shares
with a fair value of $105,205 to Premier. |
|
d) |
On September 16, 2014, a non-related
third party paid $10,000 of legal fees on behalf of the Company as proceeds from the $10,000 convertible note described in
Note 8(d). |
14,370,000
SHARES OF COMMON STOCK
WELL
POWER, INC.
PROSPECTUS
YOU
SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR THAT WE HAVE REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE
TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. THIS PROSPECTUS IS NOT AN OFFER TO SELL COMMON STOCK AND IS NOT SOLICITING
AN OFFER TO BUY COMMON STOCK IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Until
_____________, all dealers that effect transactions in these securities whether or not participating in this offering may be required
to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as underwriters
and with respect to their unsold allotments or subscriptions.
PART
II — INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item
13. Other Expenses of Issuance and Distribution.
Securities and Exchange Commission
registration fee | |
$ | 88.50 | |
Transfer Agent Fees | |
$ | 500 | |
Accounting fees and expenses | |
$ | 7,500 | |
Legal fees and expense | |
$ | 25,000 | |
Miscellaneous | |
$ | 5,000 | |
Total | |
$ | 38,088.50 | |
All
amounts are estimates other than the fee of this registration statement and legal and fees and expense. Premier Venture is paying
all expenses of the offering listed above.
Item
14. Indemnification of Directors and Officers.
Nevada
Revised Statute 78.037 permits a corporation to eliminate or limit the personal liability of a director or officer to the corporation
or its stockholders for damages relating to breach of fiduciary duty as a director or officer, but such a provision must not eliminate
or limit the liability of a director or officer for (a) acts or omissions which involve intentional misconduct, fraud or a knowing
violation of law or (b) the payment of distributions in violation of Nevada Revised Statute 78.300.
Nevada
Revised Statutes 78.7502 provides as follows with respect to indemnification of directors, officers, employees and agents:
|
(a) |
We may indemnify any person who was
or is a party or is threatened to be made a party to any action, except an action by us, by reason of the fact that he is
or was our director, officer, employee or agent, or is or was serving as a director, officer, employee or agent of any other
person at our request, against expenses actually and reasonably incurred by him in connection with the action, suit or proceeding
if he: (i) is not liable for breach of his fiduciary duties as a director or officer pursuant to Nevada Revised Statutes 78.138;
and (ii) acted in good faith and in a manner which he 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 conduct was unlawful. |
|
(b) |
We may indemnify any person who was
or is a party or is threatened to be made a party to any action by us, by reason of the fact that he is or was our director,
officer, employee or agent, or is or was serving as a director, officer, employee or agent of any other person at our request,
against expenses actually and reasonably incurred by him in connection with the defense or settlement of the action or suit
if he: (i) is not liable for breach of his fiduciary duties pursuant to Nevada Revised Statutes 78.138; and (ii) acted in
good faith and in a manner which he reasonably believed to be in or not opposed to our best interest. We may not
indemnify him for any claim, issue or matter as to which he has been adjudged by a court of competent jurisdiction, after
exhaustion of all appeals therefrom, to be liable to us or for amounts paid in settlement to us, unless and only to the extent
that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application
that in view of all the circumstances of the case, he is fairly and reasonably entitled to indemnity for such expenses as
the court deems proper. |
|
(c) |
To the extent that our directors, officers,
employees or agents have been successful on the merits or otherwise in defense of any action, suit or proceeding, or in defense
of any claim, issue or matter therein, we are required to indemnify him against expenses, including attorneys’ fees
actually and reasonably incurred by him in connection with the defense. |
Our
Articles of Incorporation and Bylaws provide for elimination of any liability of our directors and officers and indemnity of our
directors and officers to the fullest extent permitted by Nevada law.
The
above-described provisions relating to the exclusion of liability and indemnification of directors and officers are sufficiently
broad to permit the indemnification of such persons in certain circumstances against liabilities arising under the Securities
Act. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors
and officers and to persons controlling us 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.
Item
15. Recent Sales of Unregistered Securities.
On
March 6, 2014, we sold 431,034 units to an accredited investor where each unit consisted of one share of common stock and a warrant
to purchase one share of common stock. We received cash proceeds of $250,000. The warrants are exercisable for a period of two
years at $0.90 per share. We relied on the exemption found in Regulation S in the offer and sale of the units. As of August 12,
2014, these shares have not yet been issued.
On
March 14, 2014, we granted options to our management as provided in their Consulting Agreements under the Plan. Mr. Neagoe was
awarded an option to purchase 2,000,000 shares of our common stock and Mr. Patience was also awarded an option to purchase 2,000,000
shares of our common stock. The options are exercisable at $0.70 per share.
On
May 21, 2014, we sold 3,000,000 units to an accredited investor where each unit consisted of one share of common stock and a warrant
to purchase one share of common stock. We received cash proceeds of $150,000. The warrants are exercisable for a period of two
years at $0.90 per share. We relied on the exemption found in Regulation S in the offer and sale of the units. As of August 12,
2014, these shares have not yet been issued.
On
June 5, 2014, we sold to an accredited investor 5,000,000 units at $0.05 per unit for gross proceeds of $250,000. Each unit consisted
of one common share and one share purchase warrant. Each share purchase warrant is exercisable into one additional common share
at an exercise price of $0.90 per share for a period of two (2) years from the date of issuance. We are obligated to issue 5,000,000
common shares with a fair value of $250,000, which has been recorded as stock payable.
As
July 31, 2014, pursuant to the consulting agreement, we are obligated to issue 93,719 common shares with a fair value of $30,325,
which has been recorded as stock payable.
On
August 26, 2014, we entered into an Equity Purchase Agreement and Registration Rights Agreement with Premier Venture Partners,
LLC (“Premier”) whereby Premier is obligated, providing we have met certain conditions including the filing of a Form
S-1 Registration Statement for the shares to be acquired, to purchase up to $10,000,000 of our common stock at the rates set forth
in the Equity Purchase Agreement. On September 5, 2014, we issued 1,977,535 common shares with a fair value of $134,670 to Premier.
On September 11, 2014, we issued an additional 1,977,535 common shares with a fair value of 105,205 to Premier.
Unless
otherwise noted, the above referenced securities qualify for exemption from securities registration afforded by the provisions
of Section 4(2) of the Securities Act, based on the following: (a) each of the persons to whom the shares of common stock were
issued (each such person, an “Investor”) confirmed to the Company that it or he is an “accredited investor”
as defined in Rule 501 of Regulation D promulgated under the Securities Act and has such background, education and
experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the securities,
(b) there was no public offering or general solicitation with respect to the offering of such shares,(c) each Investor was provided
with certain disclosure materials and all other information requested with respect to the Company, (d) each Investor acknowledged
that all securities being purchased were being purchased for investment intent and were “restricted securities” for
purposes of the Securities Act, and agreed to transfer such securities only in a transaction registered under the Securities Act
or exempt from registration under the Securities Act and (e) a legend has been, or will be, placed on the certificates representing
each such security stating that it was restricted and could only be transferred if subsequently registered under the Securities
Act or transferred in a transaction exempt from registration under the Securities Act.
Item
16. Exhibits and Financial Statement Schedules
Exhibit Number |
Description of Exhibit |
3.1(1) |
Articles of Incorporation. |
3.2(2) |
Certificate of Amendment to Articles of Incorporation. |
3.3(2) |
Articles of Merger. |
3.4(1) |
Bylaws. |
5.1* |
Legal Opinion of Szaferman, Lakind, Blumstein & Blader, P.C. |
10.1(3) |
Equity Purchase Agreement, dated August 26, 2014, by and between
Well Power, Inc. and Premier Venture Partners, LLC. |
10.2(3) |
Registration Rights Agreement dated August 26, 2013, by and between
Well Power, Inc. and Premier Venture Partners, LLC. |
10.3(4) |
Cristian Neagoe employment agreement dated March 14, 2014. |
10.4(4) |
Dan Patience employment agreement dated March 14, 2014. |
10.5(3) |
Convertible Debenture dated August 21, 2014, by and between Well
Power, Inc. and Macallan Partners, LLC |
10.6(3) |
Note Purchase Agreement dated August 6, 2014, by and between Well
Power, Inc. and Iconic Holdings, LLC. |
10.7(3) |
10% Convertible Promissory Note dated August 6, 2014, by and between
Well Power, Inc. and Iconic Holdings, LLC. |
10.8(3) |
10% Convertible Note dated July 23, 2014, by and between Well Power,
Inc. and Tarpon Bay Partners, LLC. |
10.9(3) |
Convertible Promissory Note dated July 25, 2014, by and between
Well Power, Inc. and Melvyn Maller. |
10.10 |
Consulting Fee Agreement dated April 1, 2014, by and between Well
Power, Inc. and 858271 Alberta Ltd. |
23.1 |
Consent of GBH CPAs, PC. |
23.2* |
Consent of Szaferman, Lakind, Blumstein & Blader, P.C. (included
in Exhibit 5.1). |
23.3 |
Consent of Silberstein Ungar, PLLC. |
* To
be filed by amendment.
(1)
Filed as exhibits to the Company’s Form SB-2 S filed with the SEC on June 22, 2007, and incorporated herein by reference.
(2)
Filed as an exhibit to the Company’s Report on Form 8-K, filed with the SEC on January 6, 2014, and incorporated herein
by reference.
(3) Filed
as an exhibit to the Company’s Report on Form 8-K, filed with the SEC on August 27, 2014, and incorporated herein by reference.
(4)
Filed as an exhibit to the Company’s Report on Form 8-K, filed with the SEC on March 19, 2014, and incorporated herein
by reference.
(5) Filed
as an exhibit to the Company’s Report on Form 8-K, filed with the SEC on March 19, 2014, and incorporated herein by reference.
Item
17. Undertakings.
Undertaking
Required by Item 512 of Regulation S-K.
(a)
The undersigned registrant hereby undertakes:
(1)
to file, during any period in which it offers or sells securities are being made, a post-effective amendment to this Registration
Statement to:
|
(i) |
include any prospectus required by
Section 10(a)(3) of the Securities Act; |
|
(ii) |
reflect in the prospectus any facts
or events arising after the effective date of this 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 a 20% change in the maximum aggregate offering price set forth in the “Calculation
of Registration Fee” table in the effective registration statement; and |
|
(iii) |
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; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this rule do not
apply if the registration statement is on Form S-8, and the information required to be included in a post-effective amendment
by those paragraphs is contained in reports filed with or furnished to the SEC by the registrant pursuant to section 13 or
section 15(d) of the Exchange Act that are incorporated by reference in the registration statement; and paragraphs (a)(1)(i),
(a)(1)(ii) and (a)(1)(iii) of this section do not apply if the registration statement is on Form S-3 or Form F-3 and the information
required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished
to the Commission by the registrant pursuant to section 13 or section 15(d) of the Exchange Act that are incorporated by reference
in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is not part of the
registration statement. |
Provided
further, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is for an offering of asset-backed
securities on Form S-1 or Form S-3, and the information required to be included in a post-effective amendment is provided pursuant
to item 1100(c) of Regulation AB.
(2)
For determining liability under the Securities Act, treat each post-effective amendment as a new registration statement of the
securities offered, and the offering of the securities at that time to be the initial bona fide offering.
(3)
File a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering.
(b)
For 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:
(1)
Any preliminary prospectus or prospectus of the registrant relating to the offering required to be filed pursuant to Rule 424;
(2)
Any free writing prospectus relating to the offering prepared by or on behalf of the registrant or used or referred to by the
registrant;
(3)
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
(4)
Any other communication that is an offer in the offering made by the registrant to the purchaser.
(c)
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, 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.
(d)
That, for the purpose of determining liability under the Securities Act to any purchaser:
If
the registrant is relying on Rule 430B:
(i)
Each prospectus filed by the registrant pursuant to 424(b)(3) shall be deemed to be part of the registration statement as of the
date the filed prospectus was deemed part of and included in the registration statement; and
(ii)
Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance
on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information
required by section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of
the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any
person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement
relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with
a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date;
or
If
the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating
to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A,
shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness.
Provided, however, that no statement made in a registration statement or prospectus that is part of a 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.
If
the registrant is relying on Rule 430A:
(i)
For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed
as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement
as of the time it was declared effective.
(ii)
For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus
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.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized in the City of Dallas, State of Texas, on December 1, 2014.
|
WELL POWER, INC. |
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By: |
/s/ Cristian Neagoe |
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Name: Cristian Neagoe |
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Title: President, Chief Executive Officer and Director |
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(Principal Executive Officer ) |
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By: |
/s/ Dan Patience |
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Name: Dan Patience |
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Title: President, Chief Financial Officer, Secretary, Treasurer
and Director |
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(Principal Accounting and Financial Officer) |
Pursuant
to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature |
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Title |
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Date |
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/s/ Cristian Neagoe |
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President, Chief Executive Officer |
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December 1, 2014 |
Cristian Neagoe |
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and Director |
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(Principal Executive) |
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/s/ Dan Patience |
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Chief Financial Officer, Secretary, Treasurer, and Director |
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December 1, 2014 |
Dan Patience |
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(Principal Accounting and Financial Officer) |
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CONSENT
OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING
FIRM
We hereby consent to the inclusion in this Registration Statement on Form
S-1 of our report dated
August 13, 2014 relating to the balance sheet of Well Power, Inc.
as of April 30, 2014 and the related statements of operations, changes in stockholders’ deficit and
cash flows for the
year then ended. We also
consent to the reference to our firm under the heading "Experts" appearing therein.
/s/
GBH CPAs,
PC
GBH
CPAs, PC
www.gbhcpas.com
Houston, Texas
December
1, 2014
Silberstein
Ungar, PLLC CPAs and Business Advisors
Phone
(248) 203-0080
Fax (248)
281-0940
30600
Telegraph Road, Suite 2175
Bingham
Farms, MI 48025-4586
December
1, 2014
To the Board
of Directors of
Well Power,
Inc.
Houston,
Texas
To Whom
It May Concern:
Consent
of Independent Registered Public Accounting Firm
Silberstein
Ungar, PLLC, hereby consents to the use in the Form S-1, Registration Statement under the Securities Act of 1933, filed by Well
Power, Inc. (formerly Vortec Electronics, Inc.) of our report dated July 26, 2013, relating to the financial statements of Well
Power, Inc. (formerly Vortec Electronics, Inc.), a Nevada Corporation, as of and for the year ending April 30, 2013.
Sincerely,
/s/
Silberstein Ungar, PLLC
Silberstein
Ungar, PLLC