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EX-10.2 - HYPERERA INC | v173946_ex10-2.htm |
EX-23.1 - HYPERERA INC | v173946_ex23-1.htm |
EX-10.1 - HYPERERA INC | v173946_ex10-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Amendment
1
FORM
S-1
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
Hyperera, Inc.
(Name of
small business issuer in our charter)
Nevada
|
7370
|
26-2007556
|
(State
or other jurisdiction of
incorporation
or organization)
|
(Primary
Standard
Industrial
Classification
Code
Number)
|
IRS
I.D.
|
2316
S Wentworth Ave
Chicago,
IL
|
60616
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Registrant’s
telephone number: 312-842-2288
InCorp
Services, Inc.
375 N.
Stephanie St., Suite 1411
Henderson,
NV 89014
(702)
866-2500
(Name,
address and telephone number of agent for service)
Approximate
date of commencement of proposed sale to the public: As soon as practicable
after the effective date of this Registration Statement.
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, check the following box and list the Securities
Act Registration Statement number of the earlier effective Registration
Statement for the same offering. ¨
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act Registration
Statement number of the earlier effective Registration Statement for the same
offering. ¨
If this
Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act Registration
Statement number of the earlier effective Registration Statement for the same
offering. ¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting
company.
Large
accelerated filer ¨
|
Accelerated
Filer ¨
|
Non-accelerated
filer ¨
|
Smaller
reporting company x
|
CALCULATION
OF REGISTRATION FEE
Title of each class of
securities to be registered
|
Amount to be
registered [1]
|
Proposed
maximum
offering
price per
unit
|
Proposed
maximum
aggregate
offering price
|
Amount of
registration
fee [2] [3]
|
|||||||||||||
Common
Stock offered by the Selling Stockholders [4]
|
6,839,000 | $ | 0.20 | $ | 1,367,800 | $ | 76.33 |
(1) In
accordance with Rule 416(a), the registrant is also registering hereunder an
indeterminate number of shares that may be issued and resold resulting from
stock splits, stock dividends or similar transactions.
(2) Estimated
in accordance with Rule 457(c) of the Securities Act of 1933 solely for the
purpose of computing the amount of the registration fee based on recent prices
of private transactions.
(3) Calculated
under Section 6(b) of the Securities Act of 1933 as .00005580 of the aggregate
offering price.
(4) Represents
shares of the registrant’s common stock being registered for resale that have
been issued to the selling shareholders named in this registration
statement.
The
registrant hereby amends this registration statement on such date or dates as
may be necessary to delay our 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 Section 8(a) may
determine.
1
PROSPECTUS
Hyperera,
Inc.
Selling
shareholders are offering up to 6,839,000 shares of common stock. The
selling shareholders will offer their shares at $0.20 per share until our shares
are quoted on the OTC Bulletin Board and, assuming we secure this qualification,
thereafter at prevailing market prices or privately negotiated
prices. We will not receive proceeds from the sale of
shares from the selling shareholders.
There are
no underwriting commissions involved in this offering. We have agreed
to pay all the costs of this offering. Selling shareholders will pay no offering
expenses.
Prior to
this offering, there has been no market for our securities. Our common stock is
not now listed on any national securities exchange, the NASDAQ stock market, or
the OTC Bulletin Board. There is no guarantee that our securities
will ever trade on the OTC Bulletin Board or other exchange.
This
offering is highly speculative and these securities involve a high degree of
risk and should be considered only by persons who can afford the loss of their
entire investment. See “Risk Factors” beginning on page
9.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
The date
of this prospectus is _________________ , 2010.
2
TABLE OF
CONTENTS
Summary
Information and Risk Factors
|
4
|
Risk
Factors
|
7
|
Our
generating no revenues from operations makes it difficult for us to
evaluate our future business prospects and make decisions based on those
estimates of our future performance
|
7
|
There
is substantial doubt about our ability to continue as a going concern as a
result of our lack of significant revenues and if we are unable to
generate significant revenue or secure financing we may be required to
cease or curtail our operations
|
7
|
Any
termination or failure to renew our distribution agreement with Beijing
Chaoran could reduce our revenues or cause us to cease
operations
|
7
|
Any
decrease in the availability, or increase in the cost, of hardware and
software we purchase for resale could materially affect our
earnings
|
7
|
If
clinics or hospitals that use our products or their patients successfully
assert product liability claims against us due to defects in our products,
our operating results may suffer and our reputation may be
harmed
|
8
|
We
depend heavily on key personnel, and turnover of key senior management
could harm our business
|
8
|
A
conflict of interest may exist for our Chairman Zhi Yong Li due to his
father Liancheng Li owning 100% of Beijing Chaoran Chuangshi Technology
Co., Ltd, our exclusive supplier
|
9
|
You
may have difficulty in enforcing any judgment against any or all of our
executive officers and directors as they are residents of China and not of
the U.S., and substantially all the assets of these persons are located
outside the U.S.
|
11
|
Because
our holding company structure creates restrictions on the payment of
dividends, our ability to pay dividends is limited
|
12
|
We
may be unable to enforce our rights due to policies regarding the
regulation of foreign investments in China, which could reduce our
ability to compete and our revenues
|
12
|
It
may be difficult for stockholders to enforce any judgment obtained in the
United States against us, which may limit the remedies otherwise
available to our stockholders
|
12
|
If
we do not file a Registration Statement on Form 8-A to become a mandatory
reporting company under Section 12(g) of the Securities Exchange Act of
1934, we will continue as a voluntary reporting company and will not be
subject to the proxy statement or other information requirements of the
1934 Act, our securities can no longer be quoted on the OTC Bulletin
Board, and our officers, directors and 10% stockholders will not be
required to submit reports to the SEC on their stock ownership and stock
trading activity, all of which could reduce the value of your investment
and the amount of publicly available information about us
|
14
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Use
of Proceeds
|
15
|
Determination
of Offering Price
|
15
|
Dilution
|
15
|
Selling
Shareholders
|
15
|
Plan
of Distribution
|
18
|
Legal
Proceedings
|
20
|
Directors,
Executive Officers, Promoters, and Control Persons
|
20
|
Security
Ownership of Certain Beneficial Owners and Management
|
22
|
Description
of Securities
|
23
|
Interest
of Named Experts
|
24
|
Disclosure
of Commission Position on Indemnification for Securities
Liabilities
|
24
|
Description
of Business
|
24
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
28
|
Description
of Property
|
33
|
Certain
Relationships and Related Transactions
|
34
|
Market
for Common Equity and Related Stockholder Matters
|
35
|
Executive
Compensation
|
37
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
|
40
|
financial
statements
|
41
|
3
SUMMARY
INFORMATION AND RISK FACTORS
You
should carefully read all information in the prospectus, including the financial
statements and their explanatory notes, under the Financial Statements prior to
making an investment decision.
Organization
Hyperera,
Inc. is a Nevada corporation formed on February 19, 2008, with registered
address at 375 N. Stephanie St., Suite 1411, Henderson, NV
89014-8909. Hyperera, Inc. transacts its business in the
U.S. located in the State of Illinois and has principal office at 2316
South Wentworth Avenue, Chicago, IL 60616.
On July
3, 2009, we established a wholly owned subsidiary, Hyperera Technologies
(Beijing) Co., Limited, located at Room 11A, Block B, Kingwing Hotel, No. 17
Dongsanhuan South Road, Chaoyang District, Beijing, China 100021.
Hyperera,
Inc. is headquartered in 2316 South Wentworth Avenue, Chicago, IL 60616,
USA. Our telephone number is 312-842-2288.
Business
Our
business is sale of hardware and software and customization of clinical
information system software for medical clinics and hospitals in China and
throughout Asia.
We sell,
install, and customize the following Clinical Information System:
|
·
|
Surgery
Anesthesia Clinic Management Software and Intensive Care Unit, or ICU,
Management System
|
The
Clinical Information System of we sell was developed in China by Beijing Chaoran
Chuangshi Technology Co., Ltd (“Beijing Chaoran”). It was established
in 2002 specializing in technology developed and service, sales of computer
hardware and software, machine and electric equipment. Beijing
Chaoran is located in No.28 Mujiu Road, Mujiayu Town, Miyun, Beijing,
China. Beijing Chaoran is a Chinese Technology company owned 100% by
Mr. Liancheng Li, the father of our Chairman Zhi Yong Li.
We signed
a three-year software distribution agreement with Beijing Chaoran on March 1,
2009. Under the terms of the agreement Beijing Chaoran authorizes Hyperera to be
its exclusive sales and service agent for surgery anesthesia clinic management
software and ICU management system product lines. The product lines shall
include the products that Beijing Chaoran developed before the agreement signed
and the products that will be developed by Beijing Chaoran during the term of
the agreement. Beijing Chaoran is the exclusive supplier of the
products Hyperera sells. The purchase price Hyperera will pay for all
products subject to this agreement will be comparable to what Hyperera would
have paid a non-related party in arm’s-length
transactions. Specifically, the selling price for Beijing Chaoran is
determined by total actual cost of direct materials (hardware), direct labor,
and allocated overhead, plus 5-10% of total cost.
4
In
March 1, 2009, the Company placed order to purchase the three hardware parts
through Beijing Chaoran, the total cost of the hardware purchase is $207,998.00,
the amount of $59,998 and $148,000 was prepaid on March 9 and 18,
2009 respectively. At November, 19, 2009, hardware sales revenue of $ 6,588 was
recognized, and a cost of $ 5,968 was recorded too. At December 28,
2009, hardware sales revenue of $ 59,430 was recognized, and a cost of $ 54,030
was incurred. However, although we have taken significant steps
to develop our business plan since our inception, as of September 30, 2009 we
have generated no revenuesOur lack of any operating revenues to date raises
substantial doubt about our ability to continue as a going concern and our
financial statements contain a going concern qualification.
The
Offering
As of
the date of this prospectus, we had 27,999,000 shares
of common stock outstanding.
Selling
shareholders are offering up to 6,839,000 shares of common stock. The
selling shareholders will offer their shares at $0.20 per share until our shares
are quoted on the OTC Bulletin Board and thereafter at prevailing market prices
or privately negotiated prices. We will pay all expenses of
registering the securities, estimated at approximately $100,000. We
will not receive any proceeds of the sale of these securities.
To be
quoted on the OTC Bulletin Board, a market maker must file an application on our
behalf in order to make a market for our common stock. The current
absence of a public market for our common stock may make it more difficult for
you to sell shares of our common stock that you own.
5
Financial
Summary
Because
this is only a financial summary, it does not contain all the financial
information that may be important to you. Therefore, you should carefully read
all the information in this prospectus, including the financial statements and
their explanatory notes before making an investment decision.
STATEMENT
OF LOSS
Period
|
||||||||||||
February 19,
|
||||||||||||
Nine Month
|
Year
|
2008 (Date of
|
||||||||||
Ended
|
Ended
|
Inception)
|
||||||||||
September
|
December
|
Through
|
||||||||||
30 |
31,
|
June 30
|
||||||||||
2009
|
2008
|
2009
|
||||||||||
Revenues:
|
$ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||
COGS:
|
$ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||
Gross
Profit
|
$ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||
Operating
expenses:
|
$ | 23,632 | $ | 51,622 | $ | 75,254 | ||||||
Net
Loss
|
$ | (23,583 | ) | $ | (51,612 | ) | $ | (75,195 | ) |
HYPERERA,
INC.
BALANCE
SHEETS
September
30
|
December
31
|
|||||||
2009
|
2008
|
|||||||
ASSETS
|
$ | 233,025 | $ | 207,770 | ||||
LIABILITIES
|
$ | 40,501 | $ | 1,522 | ||||
STOCKHOLDERS’
Equity
|
$ | 182,524 | $ | 206,247 | ||||
TOTAL
LIABILITIES & EQUITY
|
$ | 223,025 | $ | 207,770 |
6
Risk
Factors
In
addition to the other information provided in this prospectus, you should
carefully consider the following risk factors in evaluating our business before
purchasing any of our common stock. All material risks are discussed
in this section.
Our generating no revenues
from operations makes it difficult for us to evaluate our future business
prospects and make decisions based on those estimates of our future
performance.
Although
we have taken significant steps to develop our business plan since our
inception, as of June 30, 2009, we have generated no revenues. Our
business plan is still speculative and unproven. There is no assurance
that we will be successful in executing our business plan or that even if we
successfully implement our business plan, we will ever generate revenues or
profits, which makes it difficult to evaluate our business. As a
consequence, it is difficult, if not impossible, to forecast our future results
based upon our historical data. Because of the uncertainties related to
our lack of historical operations, we may be hindered in our ability to
anticipate and timely adapt to increases or decreases in sales, revenues or
expenses. If we make poor budgetary decisions as a result of unreliable
historical data, we may never generate revenues or become profitable or incur
losses, which may result in a decline in our stock price.
There is substantial doubt
about our ability to continue as a going concern as a result of our lack of
significant revenues and if we are unable to generate significant revenue or
secure financing we may be required to cease or curtail our
operations.
We
have generated no operating revenues as of September 30, 2009. Our
lack of significant operating revenues to date raises
substantial doubt about our ability to continue as a going
concern. Our financial statements do not include adjustments that
might result from the outcome of this uncertainty and if we are unable to
generate significant revenue or secure financing we may be required to cease or
curtail our operations.
Any
termination
or failure to renew our distribution agreement with Beijing
Chaoran could reduce our revenues or cause us to cease operations.
Our
operations depend heavily on the continuation of our distribution agreement with
Beijing Chaoran. The agreement with Beijing Chaoran is for a term of
three years commencing March 1, 2009, subject to earlier termination upon terms
described in the Agreement.
We may
find alternative suppliers with similar products as Beijing Chaoran to continue
our operation if the agreement is terminated or not renewed
Any
decrease in the availability, or increase in the cost, of hardware
and software we
purchase for resale could materially affect our
earnings.
Our
operations depend heavily on the availability of hardware and software we
resell. We purchase software and hardware from Beijing Chaoran and then resell
it to our customers. However, if Beijing Chaoran Co.,
Ltd. is unable or unwilling to provide us with software and
hardware on terms favorable to us, we may be unable to produce certain products
and services. This could result in a decrease in profit and damage to our
reputation in our industry. In the event our costs of acquiring these
hardware and software increases, we may not be able to pass these higher costs
on to our customers in full or at all. Any increase in the prices for hardware
and software could materially increase our costs and therefore lower our
earnings.
7
If clinics or
hospitals that
use our products or their patients
successfully
assert product liability claims against us due to defects in our products, our
operating results may suffer and our reputation may be
harmed.
Our
products will be applied in the management of many critical systems in medical
clinics and hospitals. If our products are not properly installed or
customized, we could be subject to claims for damages based on theories of
product liability and other legal theories. The costs and resources to defend
such claims could be substantial and, if such claims are successful, we could be
responsible for paying some or all of the damages. We do not have product
liability insurance. The publicity surrounding these sorts of claims is also
likely to damage our reputation, regardless of whether such claims are
successful. Any of these consequences resulting from defects in our products
would hurt our operating results and stockholder value.
Risks Related to Management
and Personnel
We depend heavily on key
personnel, and turnover of key senior management could harm our
business.
Our
future business and results of operations depend in significant part upon the
continued contributions of our senior management personnel, including Zhi Yong
Li, Chairman; Wei Wu, President and Simon Bai, CFO. If we Zhi Yong Li, Chairman;
Wei Wu, President and Simon Bai, CFO, if Zhi Yong Li, Chairman; Wei Wu,
President and Simon Bai, CFO fail to perform in their current positions, or if
we are not able to attract and retain skilled employees as needed, our business
could suffer. Significant turnover in our senior management could significantly
deplete our institutional knowledge held by our existing senior management team.
We depend on the skills and abilities of these key employees in managing the
product acquisition, marketing and sales aspects of our business, any part of
which could be harmed by turnover in the future.
Our management has limited
experience in managing the day to day operations of a public company and, as a
result, we may incur additional expenses associated with the management of our
company.
The
management team, including Zhi Yong Li, Chairman; Wei Wu, President and Simon
Bai, CFO is responsible for the operations and reporting of the combined
company. The requirements of operating as a small public company are new to the
management team and the employees as a whole. This may require us to obtain
outside assistance from legal, accounting, investor relations, or other
professionals that could be more costly than planned. We may also be required to
hire additional staff to comply with additional SEC reporting requirements and
compliance under the Sarbanes-Oxley Act of 2002. Our failure to comply with
reporting requirements and other provisions of securities laws could negatively
affect our stock price and adversely affect our results of operations, cash flow
and financial condition.
Although we believe that we
currently have adequate internal control over financial reporting, we are
exposed to risks from recent legislation requiring companies to evaluate
internal control over financial reporting.
Section
404 of the Sarbanes-Oxley Act of 2002 ("Section 404") requires our
management to report on the operating effectiveness of the Company's
Internal Controls over financial reporting for the year ending December 31
following the year in which this registration statement is declared effective.
Enterprise CPAs, Ltd., our independent registered public accounting firm, will
be required to attest to the effectiveness of our internal control over
financial reporting beginning with the year ending thereafter. We must establish
an ongoing program to perform the system and process evaluation and testing
necessary to comply with these requirements. We expect that the cost of this
program will require us to incur expenses and to devote resources to Section 404
compliance on an ongoing basis.
8
It is
difficult for us to predict how long it will take to complete management's
assessment of the effectiveness of our internal control over financial
reporting for each year and to remediate any deficiencies in our internal
control over financial reporting. As a result, we may not be able to complete
the assessment and process on a timely basis. In the event that our Chief
Executive Officer, Chief Financial Officer or independent registered public
accounting firm determine that our internal control over financial reporting is
not effective as defined under Section 404, we cannot predict how regulators
will react or how the market prices of our shares will be affected.
Because we do not have an
audit or compensation committee, shareholders will have to rely on the entire
board of directors, none of which are independent, to perform these
functions.
We do not
have an audit or compensation committee comprised of independent
directors. Indeed, we do not have any audit or compensation
committee. These functions are performed by the board of directors as
a whole. No members of the board of directors are independent
directors. Thus, there is a potential conflict in that board members
who are also part of management will participate in discussions concerning
management compensation and audit issues that may affect management
decisions.
Certain
of our stockholders hold a significant percentage of our outstanding voting
securities which could reduce the ability of minority shareholders to effect
certain corporate actions.
Our
officers, directors and majority shareholders are the beneficial owners of
approximately 73% of our outstanding voting securities. As a result, they
possess significant influence and can elect a majority of our board of directors
and authorize or prevent proposed significant corporate transactions. Their
ownership and control may also have the effect of delaying or preventing a
future change in control, impeding a merger, consolidation, takeover or other
business combination or discourage a potential acquirer from making a tender
offer.
A
conflict of interest may exist for our Chairman
Zhi
YongLidue
to his father Liancheng
Li owning 100% of Beijing Chaoran Chuangshi Technology Co.,
Ltd,
our exclusive supplier.
The
Clinical Information System of we sell was developed in China by Beijing Chaoran
Chuangshi Technology Co., Ltd (“Beijing Chaoran”). Beijing Chaoran is
a Chinese technology company owned 100% by Mr. Liancheng Li, the father of our
Chairman Zhi Yong Li. Although
our distribution agreement with Beijing Chaoran requires that The
purchase price Hyperera will pay for all products subject to this agreement will
be comparable to what Hyperera would have paid a non-related party in
arm’s-length transactions and specifically, the selling price for Beijing
Chaoran is determined by total actual cost of direct materials (hardware),
direct labor, and allocated overhead, plus 5-10% of total cost, there may be a
conflict between Mr.
Liancheng Li and our Chairman Zhi Yong Li over pricing or other matters under
the Agreement. Both parties will attempt to mitigate this conflict by
maintaining completely separate offices and personnel. Further, if
there is any dispute between the parties, our Chairman Zhi Yong Li will
disqualify himself from any vote on the matter and will turn the matter over
entirely to other members of our Board of Directors.
9
Risks Related to our
Operations in China
Because
all our customers and operations are located in China, the following risks could
affect our business of our suppliers and thus harm our revenues.
General economic conditions
in China could reduce our revenues.
General
economic conditions in China have an impact on our business and financial
results. The global economy in general and in China specifically remains
uncertain. As a result, individuals and companies may delay or reduce
expenditures. Weak economic conditions and/or softness in the consumer or
business channels could result in lower demand for our products, resulting in
lower sales, earnings and cash flows.
Changes in China’s political
or economic situation could harm us and our operating
results.
Economic
reforms adopted by the Chinese government have had a positive effect on the
economic development of the country, but the government could change these
economic reforms or any of the legal systems at any time. This could either
benefit or damage our operations and profitability. Some of the things that
could have this effect are:
|
•
|
Level
of government involvement in the
economy;
|
|
•
|
Control
of foreign exchange;
|
|
•
|
Methods
of allocating resources;
|
|
•
|
Balance
of payments position;
|
|
•
|
International
trade restrictions; and
|
|
•
|
International
conflict.
|
The
Chinese economy differs from the economies of most countries belonging to the
Organization for Economic cooperation and Development, or OECD, in many ways.
For example, state-owned enterprises still constitute a large portion of the
Chinese economy, and weak corporate governance traditions and a lack of flexible
currency exchange policy continue to persist. As a result of these differences,
the business of our suppliers could be adversely affected.
Our business is largely
subject to the uncertain legal environment in China and your legal protection
could be limited.
The
Chinese legal system is a civil law system based on written statutes. Unlike
common law systems, it is a system in which precedents set in earlier legal
cases are not generally used. The overall effect of legislation enacted over the
past 20 years has been to enhance the protections afforded to foreign invested
enterprises in China. However, these laws, regulations and legal requirements
are relatively recent and are evolving rapidly, and their interpretation and
enforcement involve uncertainties. These uncertainties could limit the legal
protections available to foreign investors, such as the right of foreign
invested enterprises to hold licenses and permits such as requisite business
licenses. Further as a result, it could be difficult for investors to effect
service of process in the U.S. or to enforce a judgment obtained in the U.S.
against our Chinese operations and subsidiaries.
10
You may have
difficulty in enforcing any judgment against any or all of our executive
officers and directors as they are residents of China and not of the U.S., and
substantially all the assets of these persons are located outside the
U.S.
All of
our executive officers and our directors are residents of China and not of the
U.S., and substantially all the assets of these persons are located outside the
U.S. As a result, it could be difficult for investors to effect service of
process in the U.S., or to enforce a judgment obtained in the U.S. against our
Chinese operations and subsidiaries.
The Chinese government
exerts substantial influence over the manner in which we and our suppliers must
conduct their business activities.
Only
recently has China permitted provincial and local economic autonomy and private
economic activities. The Chinese government has exercised and continues to
exercise substantial control over virtually every sector of the Chinese economy
through regulation and state ownership. Our ability to operate in China may be
harmed by changes in its laws and regulations, including those relating to
taxation, import and export tariffs, environmental regulations, land use rights,
property and other matters. We believe that our operations in China are in
material compliance with all applicable legal and regulatory requirements.
However, the central or local governments of the jurisdictions in which we
operate may impose new, stricter regulations or interpretations of existing
regulations that would require additional expenditures and efforts on our part
to ensure our compliance with such regulations or interpretations.
Accordingly,
government actions in the future, including any decision not to continue to
support recent economic reforms and to return to a more centrally planned
economy or regional or local variations in the implementation of economic
policies, could have a significant effect on economic conditions in China or
particular regions thereof, and could require us to divest ourselves of any
interest we then hold in Chinese properties or joint ventures. Any
divestiture could reduce our assets or revenues and thus reduce the value of our
stock.
The value of our securities
will be affected by the foreign exchange rate between U.S. dollars and
RMB.
The value
of our common stock will be affected by the foreign exchange rate between U.S.
dollars and RMB, and between those currencies and other currencies in which our
sales may be denominated. Currently, RMB is stronger than U.S. Dollars. For
example, to the extent that we need to convert U.S. dollars into RMB for our
operational needs and should RMB appreciate against the U.S. dollar at that
time, our financial position, the business of the Company, and the price of our
common stock may be harmed. Conversely, if we decide to convert our RMB into
U.S. dollars for the purpose of declaring dividends on our common stock or for
other business purposes and the U.S. dollar appreciates against RMB, the U.S.
dollar equivalent of our earnings from our subsidiaries in China would be
reduced.
In the
event that the U.S. dollars appreciate against RMB, our costs will increase. If
we cannot pass the resulting cost increase on to our customers, our
profitability and operating results will suffer. In addition, since our sales to
international customers grew rapidly, we are subject to the risk of foreign
currency depreciation.
11
Because our holding company
structure creates restrictions on the payment of dividends, our ability to pay
dividends is limited.
We have
no direct business operations, other than our ownership of our subsidiaries. If
we decide in the future to pay dividends, as a holding company, our ability to
pay dividends and meet other obligations depends upon the receipt of dividends
or other payments from our operating subsidiary. In addition, our
operating subsidiary, from time to time, may be subject to restrictions on their
ability to make distributions to us, including as a result of restrictive
covenants in loan agreements, restrictions on the conversion of local currency
into U.S. dollars or other hard currency and other regulatory restrictions. If
future dividends are paid in Renminbi, fluctuations in the exchange rate for the
conversion of Renminbi into U.S. dollars may adversely affect the amount
received by U.S. stockholders upon conversion of the dividend payment into U.S.
dollars. We do not presently have any intention to declare or pay dividends in
the future. You should not purchase shares of our common stock in anticipation
of receiving dividends in future periods.
We may be unable to enforce
our rights due to policies regarding the regulation of foreign investments in
China, which could reduce our ability to compete and our
revenues.
The PRC's
legal system is a civil law system based on written statutes in which decided
legal cases have little value as precedents, unlike the common law system
prevalent in the United States. The PRC does not have a
well-developed, consolidated body of laws governing foreign investment
enterprises. As a result, the administration of laws and regulations by
government agencies may be subject to considerable discretion and variation, and
may be subject to influence by external forces unrelated to the legal merits of
a particular matter. China's regulations and policies with respect to
foreign investments are evolving. Definitive regulations and policies with
respect to such matters as the permissible percentage of foreign investment and
permissible rates of equity returns have not yet been
published. Statements regarding these evolving policies have been
conflicting and any such policies, as administered, are likely to be subject to
broad interpretation and discretion and to be modified, perhaps on a
case-by-case basis. The uncertainties regarding such regulations and policies
present risks which may affect our ability to achieve our business
objectives. If we are unable to enforce any legal rights we may have
under our contracts or otherwise, our ability to compete with other companies in
our industry could be materially and negatively affected and our revenues could
be reduced.
It may be difficult for
stockholders to enforce any judgment obtained in the United States against us,
which may limit the remedies otherwise available to our
stockholders.
All of
our assets are located outside the United States and all of our current
operations are conducted in China. Moreover, all of our directors and
officers are nationals or residents of China. All or a substantial
portion of the assets of these persons are located outside the United
States. As a result, it may be difficult for our stockholders to
effect service of process within the United States upon these
persons. In addition, there
is uncertainty as to whether the courts of China would
recognize or enforce judgments of U.S. courts obtained against us or
such officers and/or directors predicated upon the civil
liability provisions of
the securities law of the United States or any state
thereof, or be competent to hear original actions brought in China against us or
such persons predicated upon
the securities laws of the United States or any state
thereof. Further, China’s treaties do not provide for reciprocal
recognition and enforcement of judgments of U.S. courts.
12
Risks Related to the Market
for our Stock
Investors may have
difficulty in reselling their shares due to the lack of market or state Blue Sky
laws.
Our
common stock is currently not quoted on any market. No market may ever develop
for our common stock, or if developed, may not be sustained in the
future.
The
holders of our shares of common stock and persons who desire to purchase them in
any trading market that might develop in the future should be aware that there
may be significant state law restrictions upon the ability of investors to
resell our shares. Accordingly, even if we are successful in having the Shares
available for trading on the OTCBB, investors should consider any secondary
market for the Company's securities to be a limited one. We intend to seek
coverage and publication of information regarding the company in an accepted
publication which permits a "manual exemption." This manual exemption permits a
security to be distributed in a particular state without being registered if the
company issuing the security has a listing for that security in a securities
manual recognized by the state. However, it is not enough for the security to be
listed in a recognized manual. The listing entry must contain (1) the names of
issuers, officers, and directors, (2) an issuer's balance sheet, and (3) a
profit and loss statement for either the fiscal year preceding the balance sheet
or for the most recent fiscal year of operations. We may not be able
to secure a listing containing all of this information. Furthermore,
the manual exemption is a non issuer exemption restricted to secondary trading
transactions, making it unavailable for issuers selling newly issued securities.
Most of the accepted manuals are those published in Standard and Poor's, Moody's
Investor Service, Fitch's Investment Service, and Best's Insurance Reports, and
many states expressly recognize these manuals. A smaller number of states
declare that they “recognize securities manuals” but do not specify the
recognized manuals. The following states do not have any provisions and
therefore do not expressly recognize the manual exemption: Alabama, Georgia,
Illinois, Kentucky, Louisiana, Montana, South Dakota, Tennessee, Vermont and
Wisconsin.
Accordingly,
our shares should be considered totally illiquid, which inhibits investors’
ability to resell their shares.
We will be subject to penny
stock regulations and restrictions and you may have difficulty selling shares of
our common stock.
The SEC
has adopted regulations which generally define so-called “penny stocks” to be an
equity security that has a market price less than $5.00 per share or an exercise
price of less than $5.00 per share, subject to certain exemptions. We
anticipate that our common stock will become a “penny stock”, and we will become
subject to Rule 15g-9 under the Exchange Act, or the “Penny Stock Rule”. This
rule imposes additional sales practice requirements on broker-dealers that sell
such securities to persons other than established customers. For transactions
covered by Rule 15g-9, a broker-dealer must make a special suitability
determination for the purchaser and have received the purchaser’s written
consent to the transaction prior to sale. As a result, this rule may affect the
ability of broker-dealers to sell our securities and may affect the ability of
purchasers to sell any of our securities in the secondary market.
For any
transaction involving a penny stock, unless exempt, the rules require delivery,
prior to any transaction in a penny stock, of a disclosure schedule prepared by
the SEC relating to the penny stock market. Disclosure is also required to be
made about sales commissions payable to both the broker-dealer and the
registered representative and current quotations for the securities. Finally,
monthly statements are required to be sent disclosing recent price information
for the penny stock held in the account and information on the limited market in
penny stock.
13
We do not
anticipate that our common stock will qualify for exemption from the Penny Stock
Rule. In any event, even if our common stock were 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.
Sales of our common stock
under Rule 144 could reduce the price of our stock.
There are
7,539,000 shares of our common stock held by non- affiliates and 20,400,000
shares held by affiliates Rule 144 of the Securities Act of 1933 defines as
restricted securities.
All of
our shares held by non-affiliates are currently eligible for resale or are being
registered in this offering, however affiliates will still be subject to the
resale restrictions of Rule 144. In general, persons holding
restricted securities, including affiliates, must hold their shares for a period
of at least six months, may not sell more than one percent of the total
issued and outstanding shares in any 90-day period, and must resell the shares
in an unsolicited brokerage transaction at the market price. The
availability for sale of substantial amounts of common stock under Rule 144
could reduce prevailing market prices for our securities.
If we do not file a
Registration Statement on Form 8-A to become a mandatory reporting company under
Section 12(g) of the Securities Exchange Act of 1934, we will continue as a
voluntary reporting company and will not be subject to the proxy statement or
other information requirements of the 1934 Act, our securities can no longer be
quoted on the OTC Bulletin Board, and our officers, directors and 10%
stockholders will not be required to submit reports to the SEC on their stock
ownership and stock trading activity, all of which could reduce the value of
your investment and the amount of publicly available information about
us.
As a
result of this offering assuming it is declared effective in the year ended
December 31, 2010, as required under Section 15(d) of the Securities Exchange
Act of 1934, we will file periodic reports with the Securities and Exchange
Commission through December 31, 2010, including a Form 10-K for the year ending
December 31, 2010, assuming this registration statement is declared effective
before that date. At or prior to December 31, 2010, we intend
voluntarily to file a registration statement on Form 8-A which will subject us
to all of the reporting requirements of the 1934 Act. This will require us to
file quarterly and annual reports with the SEC and will also subject us to the
proxy rules of the SEC. In addition, our officers, directors and 10%
stockholders will be required to submit reports to the SEC on their stock
ownership and stock trading activity. We are not required under
Section 12(g) or otherwise to become a mandatory 1934 Act filer unless we have
more than 500 shareholders and total assets of more than $10 million on December
31, 2010. If we do not file a registration statement on Form 8-A at
or prior to December 31, 2010, we will continue as a voluntary reporting company
and will not be subject to the proxy rules, Section 16 ownership reporting and
short swing profits provisions or other requirements of the 1934 Act, our
securities can no longer be quoted on the OTC Bulletin Board, and our officers,
directors and 10% stockholders will not be required to submit reports to the SEC
on their stock ownership and stock trading activity.
14
Special
Information Regarding Forward Looking Statements
Some of
the statements in this prospectus are “forward-looking
statements.” These forward-looking statements involve certain known
and unknown risks, uncertainties and other factors which may cause our actual
results, performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by these
forward-looking statements. These factors include, among others, the
factors set forth above under “Risk Factors.” The words “believe,”
“expect,” “anticipate,” “intend,” “plan,” and similar expressions identify
forward-looking statements. We caution you not to place undue
reliance on these forward-looking statements. We undertake no
obligation to update and revise any forward-looking statements or to publicly
announce the result of any revisions to any of the forward-looking statements in
this document to reflect any future or developments. However, the
Private Securities Litigation Reform Act of 1995 is not available to us as a
non-reporting issuer. Further, Section 27A(b)(2)(D) of the Securities
Act and Section 21E(b)(2)(D) of the Securities Exchange Act expressly state that
the safe harbor for forward looking statements does not apply to statements made
in connection with an initial public offering.
USE
OF PROCEEDS
Not
applicable. We will not receive any proceeds from the sale of shares
offered by the selling shareholders.
DETERMINATION
OF OFFERING PRICE
The
offering price has been arbitrarily determined and does not bear any
relationship to our assets, results of operations, or book value, or to any
other generally accepted criteria of valuation. Prior to this offering, there
has been no market for our securities. In order to assure that
selling shareholders will offer their shares at $.20 per share until our shares
are quoted on the OTC Bulletin Board, we will notified our shareholders and our
Transfer Agent that no sales will be allowed prior to the date our shares are
quoted on the OTC Bulletin Board without proof of the selling
price.
DILUTION
Not
applicable. We are not offering any shares in this registration statement. All
shares are being registered on behalf of our selling shareholders.
SELLING
SHAREHOLDERS
The
selling shareholders named below are selling the securities. The
table assumes that all of the securities will be sold in this offering. However,
any or all of the securities listed below may be retained by any of the selling
shareholders, and therefore, no accurate forecast can be made as to the number
of securities that will be held by the selling shareholders upon termination of
this offering. These selling shareholders acquired their shares by
purchase exempt from registration under section 4(2) of the Securities Act of
1933 or Regulation S under the Securities Act of 1933. We believe
that the selling shareholders listed in the table have sole voting and
investment powers with respect to the securities indicated. We will
not receive any proceeds from the sale of the securities by the selling
shareholders. No selling shareholders are broker-dealers or
affiliates of broker-dealers.
15
Selling
Shareholder
|
Shares to
offered by
the Selling
Shareholders
|
Date of
Purchase
|
%
owned
before
Offering
|
Amount
owned
after the
offering,
assuming
all shares
sold [1]
|
% owned
after the
offering,
assuming
all shares
sold [1]
|
Any
Transaction
or
Relationship
in past 3
years [2]
|
||||||||||||||||
Lian
Cheng Li
|
100,000 |
3/19/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Lian
Rong Zhou
|
100,000 |
3/19/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Ya
Jun Li
|
100,000 |
3/19/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Jia
Bin Fu
|
100,000 |
3/19/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
De
Lu Zhang
|
100,000 |
3/19/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Gui
Yun Tian
|
100,000 |
3/19/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Tong
Xu
|
100,000 |
3/19/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Pei
Ji Wu
|
100,000 |
3/19/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Lan
Fen Wang
|
100,000 |
3/19/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Jian
Wu
|
100,000 |
3/19/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Quan
Wu
|
100,000 |
3/19/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Qing
Tian
|
100,000 |
3/19/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Yu
Fang Zhou
|
100,000 |
3/19/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Yue
Hui Zhou
|
100,000 |
3/19/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Yue
Ming Zhou
|
100,000 |
3/19/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Xiang
You Kong
|
100,000 |
3/19/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Zhi
Nan Zhou
|
100,000 |
3/19/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Jian
Zhong Zhang
|
100,000 |
3/19/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Jian
Guo Zhang
|
100,000 |
3/19/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Wen
Zhang
|
100,000 |
3/19/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Yan
Yun Xi
|
100,000 |
3/20/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Ling
Luan
|
100,000 |
3/20/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Qing
Liang Chen
|
100,000 |
3/20/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Yan
Mei Du
|
100,000 |
3/20/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Zhi
Hui Zhang
|
100,000 |
3/20/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Shu
Ting Zhang
|
100,000 |
3/20/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Wen
Fang Dong
|
100,000 |
3/20/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Yan
Hu
|
100,000 |
3/20/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Zhen
Qin Wang
|
100,000 |
3/20/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Wei
Lin
|
100,000 |
3/22/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Yi
Xiong Wang
|
100,000 |
3/22/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Yang
Yu
|
100,000 |
3/22/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Shu
Jun Huang
|
100,000 |
3/22/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Zheng
Jie Hua
|
100,000 |
3/22/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Li
Wen Shi
|
100,000 |
3/22/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Zhong
Huan Li
|
100,000 |
3/22/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Ji
Xiang Liu
|
100,000 |
3/22/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Hao
Chen Liu
|
100,000 |
3/22/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Da
Liu
|
100,000 |
3/22/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Yu
Ming Zhou
|
100,000 |
3/22/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Bao
Shu Dai
|
100,000 |
3/22/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Jun
Liu
|
100,000 |
4/28/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Yu
Yan Qin
|
100,000 |
4/28/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Lian
Sheng Zhou
|
100,000 |
4/28/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Wen
Hui Zhou
|
100,000 |
4/28/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Yong
Heng Hao
|
100,000 |
4/28/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Mei
Sheng
|
100,000 |
4/28/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Wen
Luan Hu
|
100,000 |
4/28/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Guang
Yue Shang
|
100,000 |
4/28/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Ke
Yan Liu
|
100,000 |
4/28/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Li
Fang Huang
|
100,000 |
4/28/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Hui
Li
|
100,000 |
4/28/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Fu
Jun Jia
|
100,000 |
4/28/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Yong
Yu Liu
|
100,000 |
4/28/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Bao
Yu Li
|
100,000 |
4/28/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Sen
Chai
|
100,000 |
7/20/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Qian
Sun
|
100,000 |
7/20/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Yun
Sun
|
100,000 |
7/20/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Wan
Ting Li
|
100,000 |
7/20/2008
|
0.36 | % | 0 | 0.00 | % | |||||||||||||||
Fu
Xiang Tian
|
200,000 |
7/20/2008
|
0.72 | % | 0 | 0.00 | % | |||||||||||||||
Zeng
Zhao
|
300,000 |
7/20/2008
|
1.07 | % | 0 | 0.00 | % | |||||||||||||||
Lie
Rong Huang
|
300,000 |
7/20/2008
|
1.07 | % | 0 | 0.00 | % | |||||||||||||||
Michael
T. Williams
|
139,000 |
7/20/2008
|
0.50 | % | 0 | 0.00 | % |
Attorney
|
||||||||||||||
Total
|
6,839,000 | 24.48 | % | 0 | 0.00 | % |
16
[1]
All shares owned by each selling shareholder are being registered and, if
sold, no selling shareholder will own any of our stock after this
offering.
[2] There
are no material relationships between us and any of the selling shareholders
except Mr. Williams, our attorney.
Blue Sky
The
holders of our shares of common stock and persons who desire to purchase them in
any trading market that might develop in the future should be aware that there
may be significant state law restrictions upon the ability of investors to
resell our shares. Accordingly, even if we are successful in having the Shares
available for trading on the OTCBB, investors should consider any secondary
market for the Company's securities to be a limited one. We intend to seek
coverage and publication of information regarding the company in an accepted
publication which permits a "manual exemption." This manual exemption permits a
security to be distributed in a particular state without being registered if the
company issuing the security has a listing for that security in a securities
manual recognized by the state. However, it is not enough for the security to be
listed in a recognized manual. The listing entry must contain (1) the names of
issuers, officers, and directors, (2) an issuer's balance sheet, and (3) a
profit and loss statement for either the fiscal year preceding the balance sheet
or for the most recent fiscal year of operations. We may not be able
to secure a listing containing all of this information. Furthermore,
the manual exemption is a non issuer exemption restricted to secondary trading
transactions, making it unavailable for issuers selling newly issued securities.
Most of the accepted manuals are those published in Standard and Poor's, Moody's
Investor Service, Fitch's Investment Service, and Best's Insurance Reports, and
many states expressly recognize these manuals. A smaller number of states
declare that they “recognize securities manuals” but do not specify the
recognized manuals. The following states do not have any provisions and
therefore do not expressly recognize the manual exemption: Alabama, Georgia,
Illinois, Kentucky, Louisiana, Montana, South Dakota, Tennessee, Vermont and
Wisconsin.
17
We
currently do not intend to and may not be able to qualify securities for resale
in other states which require shares to be qualified before they can be resold
by our shareholders.
PLAN
OF DISTRIBUTION
Our
common stock is currently not quoted on any market. No market may
ever develop for our common stock, or if developed, may not be sustained in the
future. Accordingly, our shares should be considered totally
illiquid, which inhibits investors’ ability to resell their shares.
Selling
shareholders are offering up to 6,839,000 shares of common stock. The
selling shareholders will offer their shares at $0.20 per share until our shares
are quoted on the OTC Bulletin Board and thereafter at prevailing market prices
or privately negotiated prices. We will not receive any proceeds of
the sale of these securities. We will pay all expenses of registering
the securities.
The
securities offered by this prospectus will be sold by the selling shareholders
without underwriters and without commissions. The distribution of the
securities by the selling shareholders may be effected in one or more
transactions that may take place in the over-the-counter market or privately
negotiated transactions.
The
selling shareholders may pledge all or a portion of the securities owned as
collateral for margin accounts or in loan transactions, and the securities may
be resold pursuant to the terms of such pledges, margin accounts or loan
transactions. Upon default by such selling shareholders, the pledge in such loan
transaction would have the same rights of sale as the selling shareholders under
this prospectus. The selling shareholders may also enter into exchange traded
listed option transactions, which require the delivery of the securities listed
under this prospectus. After our securities are qualified for quotation on the
OTC Bulletin Board, the selling shareholders may also transfer securities owned
in other ways not involving market makers or established trading markets,
including directly by gift, distribution, or other transfer without
consideration, and upon any such transfer the transferee would have the same
rights of sale as such selling shareholders under this prospectus.
In
addition to the above, each of the selling shareholders will be affected by the
applicable provisions of the Securities Exchange Act of 1934, including, without
limitation, Regulation M, which may limit the timing of purchases and sales of
any of the securities by the selling shareholders or any such other
person. We have instructed our selling shareholders that they many
not purchase any of our securities while they are selling shares under this
registration statement. We have advised them that we will monitor our
stock transfer records on a regular basis and will void any transaction they
undertake in violation of this restriction.
Upon this
registration statement being declared effective, the selling shareholders may
offer and sell their shares from time to time until all of the shares registered
are sold; however, this offering may not extend beyond two years from the
initial effective date of this registration statement.
18
There can
be no assurances that the selling shareholders will sell any or all of the
securities. In various states, the securities may not be sold unless
these securities have been registered or qualified for sale in such state or an
exemption from registration or qualification is available and is complied
with.
All of
the foregoing may affect the marketability of our securities. Pursuant to oral
promises we made to the selling shareholders, we will pay all the fees and
expenses incident to the registration of the securities.
Should
any substantial change occur regarding the status or other matters concerning
the selling shareholders or us, we will file a post-effective amendment
disclosing such matters.
OTC Bulletin Board
Considerations
To be
quoted on the OTC Bulletin Board, a market maker must file an application on our
behalf in order to make a market for our common stock. We have
engaged in preliminary discussions with an NASD Market Maker to file our
application on Form 211 with the NASD, but as of the date of this prospectus, no
filing has been made. Based upon our counsel’s prior experience, we
anticipate that after this registration statement is declared effective, it will
take approximately 2 – 8 weeks for the NASD to issue a trading
symbol.
The OTC
Bulletin Board is separate and distinct from the NASDAQ stock
market. NASDAQ has no business relationship with issuers of
securities quoted on the OTC Bulletin Board. The SEC’s order handling
rules, which apply to NASDAQ-listed securities, do not apply to securities
quoted on the OTC Bulletin Board.
Although
the NASDAQ stock market has rigorous listing standards to ensure the high
quality of our issuers, and can delist issuers for not meeting those standards,
the OTC Bulletin Board has no listing standards. Rather, it is the
market maker who chooses to quote a security on the system, files the
application, and is obligated to comply with keeping information about the
issuer in our files. The NASD cannot deny an application by a market
maker to quote the stock of a company. The only requirement for
inclusion in the bulletin board is that the issuer be current in our reporting
requirements with the SEC.
Although
we anticipate listing on the OTC Bulletin board will increase liquidity for our
stock, investors may have greater difficulty in getting orders filled because it
is anticipated that if our stock trades on a public market, it initially will
trade on the OTC Bulletin Board rather than on NASDAQ. Investors’
orders may be filled at a price much different than expected when an order is
placed. Trading activity in general is not conducted as efficiently
and effectively as with NASDAQ-listed securities.
Investors
must contact a broker-dealer to trade OTC Bulletin Board
securities. Investors do not have direct access to the bulletin board
service. For bulletin board securities, there only has to be one
market maker.
Bulletin
board transactions are conducted almost entirely manually. Because
there are no automated systems for negotiating trades on the bulletin board,
they are conducted via telephone. In times of heavy market volume,
the limitations of this process may result in a significant increase in the time
it takes to execute investor orders. Therefore, when investors place
market orders - an order to buy or sell a specific number of shares at the
current market price - it is possible for the price of a stock to go up or down
significantly during the lapse of time between placing a market order and
getting execution.
19
Because
bulletin board stocks are usually not followed by analysts, there may be lower
trading volume than for NASDAQ-listed securities.
LEGAL
PROCEEDINGS
There are
no pending or threatened lawsuits against us.
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
The board
of directors elects our executive officers annually. A majority vote
of the directors who are in office is required to fill
vacancies. Each director shall be elected for the term of one year,
and until his successor is elected and qualified, or until his earlier
resignation or removal. Our directors and executive officers are as
follows:
Name
|
Age
|
Position
|
||
Zhi
Yong Li
|
45
|
Chairman
of the Board, CEO
|
||
Wei
Wu
|
50
|
President,
COO
|
||
Simon
Bai
|
49
|
Chief
Financial Officer
|
||
Huitao
Zhou
|
58
|
Director
|
||
Hong
Tao Bai
|
31
|
Vice
President
|
||
JianWu
Zhang
|
45
|
Director
|
||
Ming
Liu
|
50
|
Director
|
||
Nan
Su
|
33
|
CTO
|
Zhi Yong
Li joined us in
February, 2008, founder of Hyperera, Inc., and has been Chairman and CEO since
then. In June 1982, he received a Business Administration Associated
Degree at Beijing Ren Min University of China. In year 1987 to 1990, he was a
Qinggongye department manager of Food Industry Company. In year 1991
to 1993, he was the Vice-manager of Country Construct Material
Company. In year 1994 to 2000, he was the manager of Beijing
Zhichengjingmao Trading company. In year 2001 to 2003, he was the
president of Beijing Zhishichengke Corporation. In 2004 to January
2008, he was the General Manager of Beijing Chaoranchuangshi Technology &
Trade Co.
Wei
Wu joined us in
February, 2008, founder of Hyperera, Inc., and has been President & COO
since then. In July
1982, he received a Finance Bachelor Degree at Liaoning Finance and Economics
Institute of China. From August 1982 to March 1987, he was the
supervisor of the 4th banch
of Beijing East area of China Constructive Bank. From July 1987 to
June 1992, he was the assistant manager in the Beijing Branch of China
Constructive Bank. From July 1992 to December 1995, he worked at
China Renmin Bank of Beijing branch. From January 1996 to June 2000,
he was the General Manager of Beijing Kalete Fine Chemical
Company. From July 2000 to January 2008, he was the president of
Beijing Kalete Fine Chemical Company.
Simon Bai
joined Hyperera, Inc. in March, 2008, and has been CFO since then. In
September 1995, he received a Business Administration Degree at DePaul
University of USA. In year 1996 to 2008, he was the manager of
Oriental Travel Company.
Haitao
Zhou joined us in February, 2008, founder of Hyperera, Inc., and has been
Director since then. From January 1967 to June 1980, he was a
executive coordinator in the production department of Beijing Nenjian Company.
From July 1980 to December 1987, he was the assistant manager in the Beijing
Branch of China Development Bank. From July 1992 to December 1995, he
was the vice director of Beijing Yuandong Pressure Container
Factory. From January 1988 to January 2008, he was the Director of
Beijing Yuandong Pressure Container Factory.
20
HongTao
Bai joined us in March, 2008, and has been a Vice-President of Hyperera, Inc.
since then. In June 1995, she received a Master Degree of
Software Engineering at Beijing university of Posts and Telecommunications in
China. From August 1995 to December 1997, she was a Project Manager
Beijing Chuyou Company. From January 1998 to December 1999, she was
the Manager of Software Department of Zhongqingchuangye Company. From
January 2000 to January 2008, she was the Manager of Technology Department of
Beijing Donghuahechuang Digital Technology Ltd.
JianWu
Zhang joined us in March, 2008, and has been a Director of Hyperera, Inc. since
then. From January 1995 to January 2008, he joined Beijing
Kalete Fine Chemical Company, and was the Manager of Sales Department, Vice
General Manager and Finance Officer.
Ming
Liu joined us in
March, 2008, and has been a Director of Hyperera,
Inc. since then.
From June
1979 to June 2001, he was the manager of Beijing Qianmen Branch of China
Constructive Bank. From July 2001 to June 2005, he was the Vice
General Manager of Beijing Hansenweikang Trading Company. From July
2005 to January 2008, he was the General Manager of Beijing Triple Leaf
Investment and Management Company, and the President of Zhongjing Credit &
Insurance Ltd.
Nan
Su joined us in
March, 2008, and has been the CTO of Hyperera, Inc. since
then. In June 1993, he received a Computer Science Bachelor
Degree at East China University of Metallurgy. From July 1993 to June
1994, he worked at communication department of Jinan Iron & Steel Factory.
From July 1994 to August 1995, he was the technology support department manager
of Beijing Hengyuan Technology Company. From September 1995 to May 2000, he was
the exploitation department manager and the general senior engineer of Beijing
Zhuyouxinle Technology Exploitation Company. From June 2000 to
September 2001, he was the system and software technology department manager of
China Zhumulangma Telecommunications Data Company. From October 2001
to February 2005, he was the Software Maintain Department’s
Technology Manager of Beijing DongHua Hechuang Digital Technology Corporation.
From March 2005 to January 2008, he was the CTO of Beijing Chaoranchuangshi
Technology & Trade Co.
Family
Relationships
There are
no family relationships between our officers and directors.
Legal
Proceedings
No
officer, director, promoter or significant employee has been involved in the
last five years in any of the following:
|
·
|
Any
bankruptcy petition filed by or against any business of which such person
was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that
time;
|
|
·
|
Any
conviction in a criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor
offenses);
|
21
|
·
|
Being
subject to any order, judgment, or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining, barring, suspending or otherwise limiting his
involvement in any type of business, securities or banking activities;
and
|
|
·
|
Being
found by a court of competent jurisdiction (in a civil action), the
Commission or the Commodity Futures Trading Commission to have violated a
federal or state securities or commodities law, and the judgment has not
been reversed, suspended, or
vacated.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following tables set forth the ownership, as of the date of this prospectus, of
our common stock by each person known by us to be the beneficial owner of more
than 5% of our outstanding common stock, our directors, and our executive
officers and directors as a group. To the best of our
knowledge, the persons named have sole voting and investment power with
respect to such shares, except as otherwise noted. There are not any
pending or anticipated arrangements that may cause a change in
control.
The
information presented below regarding beneficial ownership of our voting
securities has been presented in accordance with the rules of the Securities and
Exchange Commission and is not necessarily indicative of ownership for any other
purpose. Under these rules, a person is deemed to be a "beneficial owner" of a
security if that person has or shares the power to vote or direct the voting of
the security or the power to dispose or direct the disposition of the security.
A person is deemed to own beneficially any security as to which such person has
the right to acquire sole or shared voting or investment power within 60 days
through the conversion or exercise of any convertible security, warrant, option
or other right. More than one person may be deemed to be a beneficial owner of
the same securities. The percentage of beneficial ownership by any person as of
a particular date is calculated by dividing the number of shares beneficially
owned by such person, which includes the number of shares as to which such
person has the right to acquire voting or investment power within 60 days, by
the sum of the number of shares outstanding as of such date plus the number of
shares as to which such person has the right to acquire voting or investment
power within 60 days. Consequently, the denominator used for calculating such
percentage may be different for each beneficial owner. Except as otherwise
indicated below and under applicable community property laws, we believe that
the beneficial owners of our common stock listed below have sole voting and
investment power with respect to the shares shown. The business address for
these shareholders is 2316 South Wentworth Avenue, Chicago, IL 60616,
USA.
Name
|
Title
|
Number of
Shares
|
% of
Common
Share
|
|||||||
Zhi
Yong Li
|
Chairman
|
10,000,000 | 35.72 | % | ||||||
Wei
Wu
|
President
|
5,000,000 | 17.86 | % | ||||||
Hui
Tao Zhou
|
Director
|
5,000,000 | 17.86 | % | ||||||
Jian
Wu Zhang
|
Director
|
100,000 | 0.36 | % | ||||||
Ming
Liu
|
Director
|
100,000 | 0.36 | % | ||||||
Hong
Tao Bai
|
Vice-President
|
100,000 | 0.36 | % | ||||||
Nan
Su
|
CTO
|
100,000 | 0.36 | % | ||||||
All
officers and directors as a group [8 persons]
|
20,400,000 | 72.86 | % |
22
This
table is based upon information derived from our stock records. Unless otherwise
indicated in the footnotes to this table and subject to community property laws
where applicable, each of the shareholders named in this table has sole or
shared voting and investment power with respect to the shares indicated as
beneficially owned. Except as set forth above, applicable percentages are based
upon 27,999,000 shares of common stock outstanding as of February 10,
2010.
DESCRIPTION
OF SECURITIES
The
following description as a summary of the material terms of the provisions of
our Articles of Incorporation and Bylaws. The Articles of
Incorporation and Bylaws have been filed as exhibits to the registration
statement of which this prospectus is a part.
Common
Stock
We are
authorized to issue 200,000,000 shares of common stock with $0.001 par value per
share. As of the date of this registration statement, there were
27,999,000 shares of common stock issued and outstanding held by 80
shareholders of the record.
Each
share of common stock entitles the holder to one vote, either in person or by
proxy, at meetings of shareholders. The holders are not permitted to vote their
shares cumulatively. Accordingly, the shareholders of our common stock who hold,
in the aggregate, more than fifty percent of the total voting rights can elect
all of our directors and, in such event, the holders of the remaining minority
shares will not be able to elect any of such directors. The vote of the holders
of a majority of the issued and outstanding shares of common stock entitled to
vote thereon is sufficient to authorize, affirm, ratify or consent to such act
or action, except as otherwise provided by law.
Holders
of common stock are entitled to receive ratably such dividends, if any, as may
be declared by the Board of Directors out of funds legally available. We have
not paid any dividends since our inception, and we presently anticipate that all
earnings, if any, will be retained for development of our business. Any future
disposition of dividends will be at the discretion of our Board of Directors and
will depend upon, among other things, our future earnings, operating and
financial condition, capital requirements, and other factors.
Holders
of our common stock have no preemptive rights or other subscription rights,
conversion rights, redemption or sinking fund provisions. Upon our liquidation,
dissolution or winding up, the holders of our common stock will be entitled to
share ratably in the net assets legally available for distribution to
shareholders after the payment of all of our debts and other liabilities. There
are not any provisions in our Articles of Incorporation or our Bylaws that would
prevent or delay change in our control.
23
INTEREST
OF NAMED EXPERTS
The
financial statements for the period from inception to December 31, 2008 included
in this prospectus have been audited by Enterprise CPAs, Ltd. which are
independent certified public accountants, to the extent and for the periods set
forth in our report and are incorporated herein in reliance upon such report
given upon the authority of said firm as experts in auditing and
accounting.
The
legality of the shares offered under this registration statement is being passed
upon by Williams Law Group, P.A., Tampa, Florida. Michael T. Williams,
principal of Williams Law Group, P.A., owns 139,000, shares of our common stock
being registered in this offering.
DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES
LIABILITIES
Our
Bylaws, subject to the provisions of Nevada Law, contain provisions which allow
the corporation to indemnify any person against liabilities and other expenses
incurred as the result of defending or administering any pending or anticipated
legal issue in connection with service to us if it is determined that person
acted in good faith and in a manner which he reasonably believed was in the best
interest of the corporation. Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be permitted to our
directors, officers and controlling persons, we have been advised that in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable.
DESCRIPTION
OF BUSINESS
Hyperera,
Inc. is a Nevada corporation formed on February 19, 2008, with registered
address at 375 N. Stephanie St., Suite 1411, Henderson, NV
89014-8909. Hyperera, Inc. transacts its business in the
U.S. located in the State of Illinois and has principal office at 2316
South Wentworth Avenue, Chicago, IL 60616.
On July
3, 2009, we established a wholly owned subsidiary, Hyperera Technologies
(Beijing) Co., Limited, located at Room 11A, Block B, Kingwing Hotel, No. 17
Dongsanhuan South Road, Chaoyang District, Beijing, China 100021.
Hyperera,
Inc. is headquartered in 2316 South Wentworth Avenue, Chicago, IL 60616,
USA. Our telephone number is 312-842-2288.
Business
Our
business is sale of hardware and software and customization of clinical
information system software for medical clinics and hospitals in China and
throughout Asia. This business is conducted entirely through our
wholly owned subsidiary, Hyperera Technologies (Beijing) Co.,
Limited. In the future, we may sell these products in North America
and elsewhere in the world, in which case the sales in those areas will be made
directly by us. We currently intend to sell only products of Beijing
Chaoran as described below.
We sell,
install, and customize the following Clinical Information System:
|
·
|
Surgery
Anesthesia Clinic Management Software and Intensive Care Unit, or ICU,
Management System
|
24
Product
Compared
with Management-Oriented Information System, the Clinical Information System
(CIS) is more important for the whole clinical information system. The
collection, storage, presentation and processing of the patient's information is
the center of the CIS, CIS is an information system which serve for doctors,
nurses and the systems of Medical Laboratory. CIS mainly includes doctor
workstation system, nursing system, laboratory information system (LIS),
radioactive information system (RIS), surgery anesthesia information
system, ICU management information system, cardiograph information system,
Picture Archiving and Communication System (PACS) and some other biology
information processing systems.
With CIS,
the medical workers can find out the change of the patients’ state in time. At
the same time, with such a powerful tool, the medical workers can establish a
standard convention for diagnoses and treatments. Without CIS, the difference of
treatment for the same disease will cause the increase of medical costs and the
deviations of treatment results.
One basic
function of clinic information system is that the medical workers can use CIS to
find change of the patients’ state swiftly and exactly. At the same time, the
medical workers and their management can measure the clinic quality and medical
cost in the high level, build a reasonable criterion of quality control. Besides
the relative data collection and analysis, it will also provide valuable and
effective help to the science research work.
In CIS,
operational monitoring and ICU need to supervise the status very closely, so the
staff in operating room and ICU room should try effort to record the thing
simply in order to increase nurse care and watch illness time. However, in the
recording process, nothing of patient data can be missed. With computer
technology, we can simplify the recording process of surgery and ICU. We can use
computer to directly collect and store the data of operating room equipments and
ICU room equipments (such as respirator, monitor, anesthetic apparatus, and
blood gas analyzer). At the same time, all kinds of life data and care data of
ICU and operating room can be exchanged with clinical information system. So the
staff in operating room and ICU room can integrate all kinds of clinic
information to immediately and momentarily decide how to care and treat
patients.
Distribution
Agreement
The
Clinical Information System of we sell was developed in China by Beijing Chaoran
Chuangshi Technology Co., Ltd (“Beijing Chaoran”). It was established
in 2002 specializing in technology developed and service, sales of computer
hardware and software, machine and electric equipment. Beijing
Chaoran is located in No.28 Mujiu Road, Mujiayu Town, Miyun, Beijing,
China. Beijing Chaoran is a Chinese Technology company owned 100% by
Mr.Liancheng Li, the father of our Chairman Zhi Yong Li.
We signed
a three-year software distribution agreement with Beijing Chaoran on March 1,
2009. Under the terms of the agreement Beijing Chaoran authorizes Hyperera to be
its exclusive sales and service agent for surgery anesthesia clinic management
software and ICU management system product lines. The product lines shall
include the products that Beijing Chaoran developed before the agreement signed
and the products that will be developed by Beijing Chaoran during the term of
the agreement. Beijing Chaoran is the exclusive supplier of the
products Hyperera sells. The purchase price Hyperera will pay for all
products subject to this agreement will be comparable to what Hyperera would
have paid a non-related party in arm’s-length
transactions. Specifically, the selling price for Beijing Chaoran is
determined by total actual cost of direct materials (hardware), direct labor,
and allocated overhead, plus 5-10% of total cost.
25
In March
1, 2009, the Company placed order to purchase the three hardware parts through
Beijing Chaoran, the total cost of the hardware purchase is $207,998.00, the
amount of $59,998 and $148,000 was prepaid on March 9 and 18, 2009
respectively.
At
November, 19, 2009, hardware sales revenue of $ 6,588 was recognized, and a cost
of $ 5,968 was recorded too. At December 28, 2009, hardware sales
revenue of $ 59,430 was recognized, and a cost of $ 54,030 was
incurred. As of December, 31, 2009, a total revenue of $ 66,018 was
earned; and the amount of $ 59,998 that prepaid to supplier on March, 2009 was
become cost of good sold.
Market and Marketing
Our
target customers are the hospitals that have surgery room and ICU or Critical
Care Unit (CCU) department, no matter the hospital’s size. For the near future,
the primary target customers are provincial hospitals and some city hospitals in
the developed regions.
Our
products are sold directly by our officers, directors and employees to customers
and potential customers. We locate these customers primarily by
personal contacts or referrals.
Our Competition and Our
Market Position
Competition
within the clinical information system industry is intense. We compete with both
large scale state-owned enterprises and smaller scale private companies. In
addition, we also face competition from international clinical information
system resellers directly. Many of our competitors have substantially
greater financial, marketing, personnel and other resources than we
do.
Our major
competitors in the clinical information system industry are Microsoft Healthcare
Solutions, GE Healthcare, Oracles. In China, our major competitors
are Beijing Medical Systems Co, Ltd., Beijing Wanbo Eastern Software Engineering
Co., Ltd., China MPSoft Co., Ltd., EKIT Softwares, etc. We are a very
small competitor in the industry.
We
compete with these and other suppliers based upon our competitive products, low
cost operation and marketing strategies, simplicity of the method of information
collection and entry, flexible visual information analysis, integrated with
medical management modes, integral design to ensure the continuity of the
system, integration capacity with existing management system, standardized
implementation, our new development and upgrade, and our professional IT service
team and marketing team to serve our clients with their customized
needs.
Research and
Development
We have
not incurred research and development expenses in the last fiscal
year.
Our Intellectual
Property
We have
no intellectual property.
26
Regulatory
Environment
China
is transitioning from a planned economy to a market economy. While the Chinese
government has pursued economic reforms since its adoption of the open-door
policy in 1978, a large portion of the Chinese economy is still operating under
five-year plans and annual state plans. Through these plans and other economic
measures, such as control on foreign exchange, taxation and restrictions on
foreign participation in the domestic market of various industries, the Chinese
government exerts considerable direct and indirect influence on the economy.
Many of the economic reforms carried out by the Chinese government are
unprecedented or experimental, and are expected to be refined and improved.
Other political, economic and social factors can also lead to further
readjustment of such reforms. This refining and readjustment process may not
necessarily have a positive effect on our operations or future business
development. Our operating revenues may be reduced by changes in China's
economic and social conditions as well as by changes in the policies of the
Chinese government, such as changes in laws and regulations (or the official
interpretation thereof), measures which may be introduced to control inflation,
changes in the interest rate or method of taxation, and the imposition of
additional restrictions on currency conversion.
China’s
legal system is a civil law system. Unlike the common law system, the civil law
system is based on written statutes in which decided legal cases have little
value as precedents. In 1979, China began to promulgate a comprehensive system
of laws and has since introduced many laws and regulations to provide general
guidance on economic and business practices in China and to regulate foreign
investment. Progress has been made in the promulgation of laws and regulations
dealing with economic matters such as corporate organization and governance,
foreign investment, commerce, taxation and trade. The promulgation of new laws,
changes of existing laws and the abrogation of local regulations by national
laws could have a negative impact on our business and business prospects. In
addition, as these laws, regulations and legal requirements are relatively
recent, their interpretation and enforcement involve significant
uncertainty.
We are
subject to many general regulations governing business entities and their
behavior in China. In particular, we are subject to laws and regulations
covering the sale of medical related hardware and software. Such
regulations typically deal with testing against manual records, licensing,
approvals and permits by the Ministry of Health. In addition, each
medical facility will run a test against manual records to validate that our
software produces comparable results. We have passed all tests and
received all required certifications and permits to sell our
products.
Any
change in regulations may make our products more or less available on the
market. Such changes may have a positive or negative impact on the sale of our
products and may directly impact the associated costs in compliance and our
operational and financial viability.
Because
we are a wholly foreign owned enterprise, we are subject to the law on foreign
investment enterprises in China, and the foreign company provisions of the
Company Law of China, which governs the conduct of our wholly owned subsidiary
and its officers and directors. Additionally, we are also subject to varying
degrees of regulations and permit system by the Chinese
government.
27
Our
Employees
We have
the following employees:
Full
time:
Operations
– 1
Management
– 1
Sales –
1
Other
[Software Engineer] – 1
Part
time:
Administrative
– 1
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Our
Management’s Discussion and Analysis contains not only statements that are
historical facts, but also statements that are
forward-looking. Forward-looking statements are, by their very
nature, uncertain and risky. These risks and uncertainties include
international, national, and local general economic and market conditions; our
ability to sustain, manage, or forecast growth; our ability to successfully make
and integrate acquisitions; new product development and introduction; existing
government regulations and changes in, or the failure to comply with, government
regulations; adverse publicity; competition; the loss of significant customers
or suppliers; fluctuations and difficulty in forecasting operating results;
change in business strategy or development plans; business disruptions; the
ability to attract and retain qualified personnel; the ability to protect
technology; the risk of foreign currency exchange rate; and other risks that
might be detailed from time to time in our filing with the Securities and
Exchange Commission.
Although
the forward-looking statements in this Registration Statement reflect the good
faith judgment of our management, such statements can only be based on facts and
factors currently known by them. Consequently, and because
forward-looking statements are inherently subject to risks and uncertainties,
the actual results and outcomes may differ materially from the results and
outcomes discussed in the forward-looking statements. You are urged
to carefully review and consider the various disclosures made by us in this
report and in our other reports as we attempt to advise interested parties of
the risks and factors that may affect our business, financial condition, and
results of operations and prospects.
Overview
Our
business is sale of hardware and software and customization of clinical
information system software for medical clinics and hospitals in China and
throughout Asia. We have not generated any revenues from the sale of
these products. We have been developing our infrastructure to begin
to sell these products and anticipate that we will have sales and revenues
commencing January 2010.
The
Clinical Information System of we sell was developed in China by Beijing Chaoran
Chuangshi Technology Co., Ltd (“Beijing Chaoran”). It was established
in 2002 specializing in technology developed and service, sales of computer
hardware and software, machine and electric equipment. Beijing
Chaoran is located in No.28 Mujiu Road, Mujiayu Town, Miyun, Beijing,
China. Beijing Chaoran is a Chinese Technology company owned 100% by
Mr.Liancheng Li, the father of our Chairman Zhi Yong Li.
28
We signed
a three-year software distribution agreement with Beijing Chaoran on March 1,
2009. Under the terms of the agreement Beijing Chaoran authorizes Hyperera to be
its exclusive sales and service agent for surgery anesthesia clinic management
software and ICU management system product lines. The product lines shall
include the products that Beijing Chaoran developed before the agreement signed
and the products that will be developed by Beijing Chaoran during the term of
the agreement. Beijing Chaoran is the exclusive supplier of the
products Hyperera sells. The purchase price Hyperera will pay for all
products subject to this agreement will be comparable to what Hyperera would
have paid a non-related party in arm’s-length
transactions. Specifically, the selling price for Beijing Chaoran is
determined by total actual cost of direct materials (hardware), direct labor,
and allocated overhead, plus 5-10% of total cost.
In
March 1, 2009, the Company placed order to purchase the three hardware parts
through Beijing Chaoran, the total cost of the hardware purchase is $207,998.00,
the amount of $59,998 and $148,000 was prepaid on March 9 and 18,
2009 respectively. At November, 19, 2009, hardware sales revenue of $ 6,588 was
recognized, and a cost of $ 5,968 was recorded too.
At
December 28, 2009, hardware sales revenue of $ 59,430 was recognized, and a cost
of $ 54,030 was incurred. As of December, 31, 2009, a total revenue
of $ 66,018 was earned; and the amount of $ 59,998 that prepaid to supplier on
March, 2009 was become cost of good sold.
Our
operations depend heavily on the continuation of our distribution agreement with
Beijing Chaoran. The agreement with Beijing Chaoran is for a term of
three years commencing March 1, 2009, subject to earlier termination upon terms
described in the Agreement. Although we believe such events are not likely, if
they were to occur, we may not be able to find alternative suppliers if the
agreement is terminated or not renewed which could reduce our revenues or cause
us to cease operations.
Results of
Operations
For
the period ended December 31, 2008, and September 30, 2009.
Revenue
Since
our company incorporated on February 19, 2008, there was no revenue realized as
of December 31, 2008 and September 30, 2009.
As of
December, 31, 2009, a total revenue of $ 66,018 was earned and
realized.
Cost of
Revenue
Our Costs
of Goods Sold, as we expected will increased slightly due to increasing Chinese
Yuan’s currency exchange rate, and labor costs. We anticipate this
trend to continue and may adjust our unit price upward to reduce the impact of
rising costs.
Since
our company incorporated on February 19, 2008, there was no revenue realized as
of December 31, 2008 and September 30, 2009. Accordingly, there was
no cost of goods sold incurred.
As of
December, 31, 2009, a total revenue of $ 66,018 was earned; and the amount of $
59,998 that prepaid to supplier on March, 2009 was become cost of good
sold.
Expense
Our
expenses consist of selling, general and administrative expenses, and
amortization.
29
Nine Month
Ended
|
Year Ended
|
Cumulative from February 19, 2008 (Date |
||||||||||
September 30
|
December 31
|
of Inception) Through
|
||||||||||
2009
|
2008
|
September 30, 2009
|
||||||||||
Expense
|
||||||||||||
Bank
Service Charges
|
203.64 | 260.02 | 463.66 | |||||||||
License
& Registration
|
1,783.19 | 1,311.00 | 3094.19 | |||||||||
Meals
and Entertainment
|
300.00 | 115.86 | 415.86 | |||||||||
Telephone
Expense
|
155.00 | 0.00 | 155.00 | |||||||||
Office
Supplies
|
0.00 | 1,416.14 | 1416.14 | |||||||||
Postage
|
60.00 | 0.00 | 60.00 | |||||||||
Payroll
Expenses
|
0.00 | |||||||||||
Net
Wage Payment-China
|
4,007.15 | 4,675.02 | 8682.17 | |||||||||
Payroll
Withholding Tax-China
|
285.60 | 325.00 | 610.60 | |||||||||
Total
Payroll Expenses
|
4,292.75 | 5,000.02 | 9292.77 | |||||||||
Professional
Fees
|
0.00 | |||||||||||
Accounting
|
0.00 | 15,000.00 | 15000.00 | |||||||||
Legal
Fee
|
600.00 | 16,170.00 | 16770.00 | |||||||||
Professional
Fees - Other
|
178.00 | 252.29 | 430.29 | |||||||||
Total
Professional Fees
|
778.00 | 31,422.29 | 32200.29 | |||||||||
Rent
Expense
|
0.00 | |||||||||||
Rent
Expense - China Subsidiary
|
8,142.00 | 2,729.58 | 10871.58 | |||||||||
Rent
Expense - US Corporation
|
5,400.00 | 6,000.00 | 11400.00 | |||||||||
Total
Rent Expense
|
13,542.00 | 8,729.58 | 22271.58 | |||||||||
Tax-China
Operation
|
0.00 | |||||||||||
Income
Tax - China
|
139.49 | 316.56 | 456.05 | |||||||||
Local
Operation Tax - China
|
131.51 | 673.59 | 805.10 | |||||||||
Total
Tax-China Operation
|
271.00 | 990.15 | 1261.15 | |||||||||
Travel
Expense
|
0.00 | |||||||||||
Air
Tickets
|
2,043.00 | 2,243.95 | 4286.95 | |||||||||
Lodging
& Hotel
|
202.99 | 0.00 | 202.99 | |||||||||
Visa
Application Fee
|
0.00 | 132.86 | 132.86 | |||||||||
Total
Travel Expense
|
2,245.99 | 2,376.81 | 4622.80 | |||||||||
Total
Expense
|
$ | 23,631.57 | $ | 51,621.87 | $ | 75,253.44 |
30
We had
essentially no revenue in the fiscal year ended December 31, 2008, and nine
month ended September 30, 2009. And we had total operation expenses
of $51,621.87 and $23,632 for the fiscal year ended December 31, 2008 and nine
month ended September 30, 2009, respectively by the Company as selling, general,
and administrative expenses.
We expect
selling, general, and administrative expenses to increase in future periods as
we initiate a number of marketing and promotional activities.
Income & Operation
Taxes
We are
subject to income taxes in the U.S., while the representative office in China
was subject to the operation tax laws of China.
We
paid no income taxes in USA for the year ended December 31, 2008, and September
30, 2009 due to the net operation loss.
We
paid local operation tax of $990.15 and $271 in China for the year ended
December 31, 2008, and September 30, 2009 for the representative office in
China.
Net Loss
We
incurred net losses of ($51,612) for the period ended December 31, 2008, net
loss of ($23,632) for the nine month period ended September 30,
2009.
Commitments
and Contingencies
We signed
a three-year software distribution agreement with Beijing Chaoran on March 1,
2009. Under the terms of the agreement Beijing Chaoran authorizes Hyperera to be
its exclusive sales and service agent for surgery anesthesia clinic management
software and ICU management system product lines. The product lines shall
include the products that Beijing Chaoran developed before the agreement signed
and the products that will be developed by Beijing Chaoran during the term of
the agreement. Beijing Chaoran is the exclusive supplier of the
products Hyperera sells. The purchase price Hyperera will pay for all
products subject to this agreement will be comparable to what Hyperera would
have paid a non-related party in arm’s-length
transactions. Specifically, the selling price for Beijing Chaoran is
determined by total actual cost of direct materials (hardware), direct labor,
and allocated overhead, plus 5-10% of total cost.
31
In March
1, 2009, the Company placed order to purchase the three hardware parts through
Beijing Chaoran, the total cost of the hardware purchase is $207,998.00, the
amount of $59,998 and $148,000 was prepaid on March 9 and 18, 2009
respectively.
Foreign
Currency Translation
The
Company has determined the United States dollars to be its functional currency
for Hyperera, Inc.; People’s Republic of China Chinese Yuan Renminbi to be its
functional currency in Hyperera Beijing office. Assets and
liabilities were translated to U.S. dollars at the period-end exchange
rate. The exchange rate of issuance of common stocks to shareholders
was used as one U.S. dollar to 6.828 Chinese Yuan (RMB). Statement of
operations amounts were translated to U.S. dollars using the historic rate,
i.e., the rate at first date of each month during the year. Gains and
losses resulting from translating foreign currency financial statements are
accumulated in other comprehensive income (loss), a separate component of
shareholders’ equity.
Liquidity
and Capital Resources
Update
to 9/30
At December 31
|
At September 30
|
|||||||
2008
|
2009
|
|||||||
Current
Ratio
|
136.50
|
5.51
|
||||||
Cash
|
$
|
92,770
|
$
|
15,027
|
||||
Working
Capital
|
$
|
206,247
|
$
|
182,524
|
||||
Total
Assets
|
$
|
207,770
|
$
|
223,025
|
||||
Total
Liabilities
|
$
|
1,522
|
$
|
40,501
|
||||
Total
Equity
|
$
|
206,247
|
$
|
182,524
|
||||
Total
Debt/Equity
|
0.01
|
0.22
|
*Current
Ratio = Current Assets /Current Liabilities
** Total
Debt / Equity = Total Liabilities / Total Shareholders Equity.
The
Company had cash and cash equivalents of $92,770 at December 31, 2008 and the
working capital of $206,247, and cash and cash equivalent of $15,027 at
September 30, 2009 and the working capital of $182,524.
32
At
December 31, 2009, we have $84,503.66 in cash. This is not sufficient
to fund our operations for longer than the next 12 months. We
anticipate we will need total $100,000 to fund our proposed operations during
the next 12 months, including an anticipated $50,000 to fund the costs of our
being a public company. We plan to fund our proposed operations
including the cost of being a public company by through revenues from our
on-going operations . We are also planning to obtain additional
funding by issuing debt or the sale of stock, if market conditions are
appropriate. We are not currently in negotiations with any lenders or
other funding sources and we are not certain that we will be able to obtain
additional funding on terms favorable to us or at all. Management has
orally committed to fund any of these requirements not funded from operations or
from additional debt or equity capital we may raise. The loan terms
will be determined based on the Wall Street primary 10 year bond note rate for
one or two year term.
Shareholder’s
Equity
The
Company had total equity of $206,147 at December 31, 2008, and $182,524 at
September 30, 2009, respectively.
On
Feburary19, 2008, the Company was incorporated in the State of
Nevada.
On
February 19, 2008, three founders of the Company, Zhiyong Li, Wei Wu, and Huitao
Zhou purchased 20,000,000 shares at $0.001 per share. The proceeds of $ 20,000
were received.
On March
31, 2008, total 5,200,000 shares were issued at price of $0.03 per share to 52
shareholders for $156,000. On April 28, 2008, additional 1,400,000
shares were issued to 14 shareholders and sold at price of $0.03 per
share. The proceeds of $42,000 were received. On July 20,
2008, additional 1,200,000 shares were issued to 7 shareholders for total
proceeds of $36,000.
On July
20, 2008, 139,000 shares were issued to Williams Law Group at $ 0.03 per share
for the legal service value $ 4,170.
At
December 15, 2009, additional 60,000 shares were issued to 3 shareholders at $
0.20 per share, and the total proceeds of $12,000 were
received.
Therefore,
as of December 31, 2009, the company has a total of 27,999,000 shares were
issued and outstanding for total 80 shareholders.
DESCRIPTION
OF PROPERTY
We rent
the following properties:
Hyperera Technology
(Beijing) Co., Ltd. (started on July 3, 2009)
|
·
|
Address:
City/State/Zip :is located
at No. 17 Dongsanhuan Routh Rd., Kingwing Tower, Suite 11A, Block B,
Chaoyang District, Beijing, China
100021
|
|
·
|
Number
of Square Feet: 1200 Square
Feet
|
|
·
|
Name
of Landlord: Beijing Kingwing Tower Real Estate Management Co.,
Ltd.
|
|
·
|
Term
of Lease: One Year (from July , 2009 to
June 30, 2010)
|
|
·
|
Monthly
Rental: USD 2570.00
|
|
·
|
Adequate
for current needs: √
Yes
|
Effective
on July 1, 2009, Hyperera Technologies (Beijing) Co., Limited entered into an
office lease agreement with Kingwing Real Estate Co., Ltd. for one full year,
the monthly rent is $2570.
33
Hyperera, Inc.
|
·
|
Address:
City/State/Zip :is located
at 2316 S. Wentworth Ave, Chicago, IL
60616
|
|
·
|
Number
of Square Feet: 350 Square
Feet
|
|
·
|
Name
of Landlord: Simon Bai
|
|
·
|
Term
of Lease: Three year from March 1, 2008 to Feb 28,
2011
|
|
·
|
Monthly
Rental: $600.00
|
We do not
intend to renovate, improve, or develop properties. We are not
subject to competitive conditions
for property and currently have no
property to insure. We have no policy with respect to investments in
real estate or interests in real estate and no policy
with respect to investments in real estate
mortgages. Further, we have no policy with respect to investments in
securities of or interests in persons primarily engaged in real estate
activities.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
On
February 19, 2008, three founders of the Company, Zhi Yong Li, Wei Wu, and Hui
Tao Zhou incorporated Hyperera, Inc. in the State of Nevada, and they
purchased shares at $0.001 per share for 20,000,000 shares. The total
proceeds of $20,000 were received in the fiscal year 2008.
The
Clinical Information System of we sell was developed in China by Beijing Chaoran
Chuangshi Technology Co., Ltd (“Beijing Chaoran”). We signed a
three-year software distribution agreement with Beijing Chaoran on March 1,
2009. Under the terms of the agreement Beijing Chaoran authorizes Hyperera to be
its exclusive sales and service agent for surgery anesthesia clinic management
software and ICU management system product lines. The product lines shall
include the products that Beijing Chaoran developed before the agreement signed
and the products that will be developed by Beijing Chaoran during the term of
the agreement. Beijing Chaoran is the exclusive supplier of the
products Hyperera sells. The purchase price Hyperera will pay for all
products subject to this agreement will be comparable to what Hyperera would
have paid a non-related party in arm’s-length
transactions. Specifically, the selling price for Beijing Chaoran is
determined by total actual cost of direct materials (hardware), direct labor,
and allocated overhead, plus 5-10% of total cost.
In March
1, 2009, the Company placed order to purchase the three hardware parts through
Beijing Chaoran, the total cost of the hardware purchase is $207,998.00, the
amount of $59,998 and $148,000 was prepaid on March 9 and 18, 2009
respectively.
As of
December 31, 2008, we had advanced an aggregate of $115,000 to Mr. Li our
Chairman.
The
advance was repaid in full without interest on February 27, 2009, and Mr. Li
loaned the $40,000 to the Company for operating purpose without charge
interest.
We rent
the property from Mr. Simon Bai, CFO of Hyperera, Inc. The rent is
$600 per month. We believe the rent paid for this space was
comparable to what we would have paid a non-related party in arm’s-length
transactions.
Except as
set forth above, we have not entered into any material transactions with any
director, executive officer, and promoter, beneficial owner of five percent or
more of our common stock, or family members of such persons.
34
MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market
Information
There is
no established public trading market for our securities and a regular trading
market may not develop, or if developed, may not be sustained. A
shareholder in all likelihood, therefore, will not be able to resell his or her
securities should he or she desire to do so when eligible for public resales.
Furthermore, it is unlikely that a lending institution will accept our
securities as pledged collateral for loans unless a regular trading market
develops.
Penny Stock
Considerations
Our
shares will be "penny stocks", as that term is generally defined in the
Securities Exchange Act of 1934 to mean equity securities with a price of less
than $5.00. Thus, our shares will be subject to rules that impose
sales practice and disclosure requirements on broker-dealers who engage in
certain transactions involving a penny stock.
Under the
penny stock regulations, a broker-dealer selling a penny stock to anyone other
than an established customer must make a special suitability determination
regarding the purchaser and must receive the purchaser's written consent to the
transaction prior to the sale, unless the broker-dealer is otherwise
exempt.
In
addition, under the penny stock regulations, the broker-dealer is required
to:
|
·
|
Deliver,
prior to any transaction involving a penny stock, a disclosure schedule
prepared by the Securities and Exchange Commission relating to the penny
stock market, unless the broker-dealer or the transaction is otherwise
exempt;
|
|
·
|
Disclose
commissions payable to the broker-dealer and our registered
representatives and current bid and offer quotations for the
securities;
|
|
·
|
Send
monthly statements disclosing recent price information pertaining to the
penny stock held in a customer's account, the account's value, and
information regarding the limited market in penny stocks;
and
|
|
·
|
Make
a special written determination that the penny stock is a suitable
investment for the purchaser and receive the purchaser's written agreement
to the transaction, prior to conducting any penny stock transaction in the
customer's account.
|
Because
of these regulations, broker-dealers may encounter difficulties in their attempt
to sell shares of our Common Stock, which may affect the ability of selling
shareholders or other holders to sell their shares in the secondary market, and
have the effect of reducing the level of trading activity in the secondary
market. These additional sales practice and disclosure requirements
could impede the sale of our securities, if our securities become publicly
traded. In addition, the liquidity for our securities may be
decreased, with a corresponding decrease in the price of our
securities. Our shares in all probability will be subject to such
penny stock rules and our shareholders will, in all likelihood, find it
difficult to sell their securities.
35
OTC Bulletin Board
Qualification for Quotation
To have
our shares of Common Stock on the OTC Bulletin Board, a market maker must file
an application on our behalf in order to make a market for our Common
Stock. We have engaged in preliminary discussions with a FINRA Market
Maker to file our application on Form 211 with FINRA, but as of the date of this
Prospectus, no filing has been made. Based upon our counsel's prior
experience, we anticipate that after this registration statement is declared
effective, it will take approximately 2 - 8 weeks for FINRA to issue a trading
symbol and allow sales of our Common Stock under Rule 144.
Sales of our common stock
under Rule 144.
Once this
registration statement is effective, the shares of our common stock being
offered by our selling shareholders will be freely tradable without restrictions
under the Securities Act of 1933, except for any shares held by our
"affiliates," which will be restricted by the resale limitations of Rule 144
under the Securities Act of 1933.
There are
7,539,000 shares of our common stock held by non-affiliates and 20,400,000
shares held by affiliates Rule 144 of the Securities Act of 1933 defines as
restricted securities.
All of
our shares held by non-affiliates are currently eligible for resale or are being
registered in this offering, however affiliates will still be subject to the
resale restrictions of Rule 144. In general, persons holding
restricted securities, including affiliates, must hold their shares for a period
of at least six months, may not sell more than one percent of the total
issued and outstanding shares in any 90-day period, and must resell the shares
in an unsolicited brokerage transaction at the market price. The
availability for sale of substantial amounts of common stock under Rule 144
could reduce prevailing market prices for our securities.
Holders
As of the
date of this registration statement, we had approximately 77 shareholders of
record of our common stock.
Dividends
We have
not declared any cash dividends on our common stock since our inception and do
not anticipate paying such dividends in the foreseeable future. We
plan to retain any future earnings for use in our business. Any
decisions as to future payments of dividends will depend on our earnings and
financial position and such other facts, as the Board of Directors deems
relevant.
Reports to
Shareholders
As a
result of this offering and assuming the registration statement is not declared
effective until after December 31, 2009, as required under Section 15(d) of the
Securities Exchange Act of 1934, we will file periodic reports with the
Securities and Exchange Commission through December 31, 2010, including a Form
10-K for the year ended December 31, 2010, assuming this registration statement
is declared effective before that date. At or prior to December 31,
2010, we intend voluntarily to file a registration statement on Form 8-A which
will subject us to all of the reporting requirements of the 1934 Act. This will
require us to file quarterly and annual reports with the SEC and will also
subject us to the proxy rules of the SEC. In addition, our officers, directors
and 10% stockholders will be required to submit reports to the SEC on their
stock ownership and stock trading activity. We are not required under
Section 12(g) or otherwise to become a mandatory 1934 Act filer unless we have
more than 500 shareholders and total assets of more than $10 million on December
31, 2010. If we do not file a registration statement on Form 8-A at
or prior to December 31, 2010, we will continue as a voluntary reporting company
and will not be subject to the proxy statement or other information requirements
of the 1934 Act, our securities can no longer be quoted on the OTC Bulletin
Board, and our officers, directors and 10% stockholders will not be required to
submit reports to the SEC on their stock ownership and stock trading
activity.
36
Where You Can Find
Additional Information
We have
filed with the Securities and Exchange Commission a registration statement on
Form S-1. For further information about us and the shares of common
stock to be sold in the offering, please refer to the registration statement and
the exhibits and schedules thereto. The registration statement and exhibits may
be inspected, without charge, and copies may be obtained at prescribed rates, at
the SEC's Public Reference Room at 100 F St., N.E., Washington, D.C.
20549. The public may obtain information on the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330. The
registration statement and other information filed with the SEC are also
available at the web site maintained by the SEC at
http://www.sec.gov.
EXECUTIVE
COMPENSATION
Summary Compensation
Table
The
table below summarizes all compensation awarded to, earned by, or paid to our
Principal Executive Officer, our two most highly compensated executive officers
other than our PEO who occupied such position at the end of our latest fiscal
year and up to two additional executive officers who would have been included in
the table below except for the fact that they were not executive officers at the
end of our latest fiscal year, by us, or by any third party where the purpose of
a transaction was to furnish compensation, for all services rendered in all
capacities to us for the years ended December 31, 2009 and
2008.
Name
|
Title
|
Year
|
Salary
|
Bonus
|
Stock
awards
|
Option
awards
|
Non equity
incentive plan
compensation
|
Non
qualified
deferred
compensation
|
All other
compensation
|
Total
|
||||||||||||||||||||||||||
Zhi
Yong Li
|
Chairman
|
2009
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
2008
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Wei
Wu
|
President
|
2009
|
$ | 4,293 | ||||||||||||||||||||||||||||||||
2008
|
$ | 5,858 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
Simon
Bai
|
CFO
|
2009
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
2008
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
37
Summary Equity Awards
Table
The
following table sets forth certain information for our executive officers
concerning unexercised options, stock that has not vested, and equity incentive
plan awards as of December 31, 2009.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END DECEMBER 31, 2009
|
||||||||||||||||||||||||||||||||||||
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
($)
|
|||||||||||||||||||||||||||
Zhi
Yong Li
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
Wei
Wu
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
Simon
Bai
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Narrative disclosure to
summary compensation and option tables
We
have an oral agreement to pay Wei Wu a monthly salary of $734 to June 30,
2009. We have no other agreements concerning employment or
compensation of our executive officers. Compensation decisions
concerning our executive officers are made by the Board of Directors
annually.
At no
time during the last fiscal year with respect to any person listed in the Table
above was there:
38
·
|
any
outstanding option or other equity-based award repriced or otherwise
materially modified (such as by extension of exercise periods, the change
of vesting or forfeiture conditions, the change or elimination of
applicable performance criteria, or the change of the bases upon which
returns are determined;
|
·
|
any
waiver or modification of any specified performance target, goal or
condition to payout with respect to any amount included in non-stock
incentive plan compensation or
payouts;
|
·
|
any
option or equity grant;
|
·
|
any
non-equity incentive plan award made to a named executive
officer;
|
·
|
any
nonqualified deferred compensation plans including nonqualified defined
contribution plans; or
|
·
|
any
payment for any item to be included under All Other Compensation (column
(i)) in the Summary Compensation
Table.
|
Board of
Directors
Director
Compensation
Name
|
Fees
earned
or paid
in cash
($)
|
Stock
awards
($)
|
Option
awards
($)
|
Non-equity
Incentive
Plan
Compensation
($)
|
Nonqualified
Deferred
Compensation
Earnings
($)
|
All other
compensation
($)
|
Total
($)
|
|||||||||||||||||||||
Zhi Yong Li,
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||
Huitao Zhou,
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||
JianWu Zhang,
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||
Ming
Liu
|
0 | 0 | 0 | 0 | 0 | 0 | 0 |
We have
no compensation arrangements (such as fees for retainer, committee service,
service as chairman of the board or a committee, and meeting attendance) with
directors.
39
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
40
FINANCIAL
STATEMENTS
HYPERERA,
INC.
(A
Development Stage Enterprise)
Audited
Financial Statements
As
of December 31, 2008
41
Table
of Contents
Independent
Auditor’s Report on the Financial Statements
|
F-2 | |||
Balance
Sheet
|
F-3 | |||
Statement
of Loss
|
F-4 | |||
Statement
of Shareholders Equity
|
F-5 | |||
Statement
of Cash Flows
|
F-6 | |||
Notes
to Financial Statements
|
F-7 |
F-1
Independent Registered
Public Accounting Firm’s Auditor’s Report on the
Consolidated Financial
Statements
Board
of Directors and Shareholders of Hyperera, Inc.
We
have audited the accompanying balance sheets of Hyperera, Inc. as of December
31, 2008, and the related statements of income, shareholders’ equity, and cash
flows for the period February 19, 2008 (date of inception) through December 31,
2008, and the cumulative period February 19, 2008 (date of inception ) through
December 31, 2008. These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audit.
We
conducted our audit in accordance with auditing 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. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our 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 Hyperera, Inc. as of December 31,
2008, and the results of its operations and their cash flows for the period
February 19, 2008 (date of inception) through December 31, 2008, and the
cumulative period from February 19, 2008 (date of inception) through December
31, 2008 in conformity with accounting principles generally accepted in the
United States of America.
The
Company’s lack of operating history and financial resources raise substantial
doubt about its ability to continue as a going concern. The financial
statements do not include adjustments that might result from the outcome of this
uncertainty and if the Company is unable to generate significant revenue or
secure financing, then the Company may be required to cease or curtail its
operation.
/s/ Enterprise CPAs,
Ltd.
Enterprise
CPAs, Ltd.
Chicago,
IL
February
10, 2010
F-2
HYPERERA,
INC
(A
Development Stage Enterprise)
BALANCE
SHEET
December
31
|
||||
2008
|
||||
ASSETS
|
||||
Current
assets:
|
||||
Cash
and cash equivalents
|
$ | 92,770 | ||
Accounts
receivable, net
|
- | |||
Total
Current Assets
|
$ | 92,770 | ||
Other
current assets:
|
||||
Loan
to shareholders
|
115,000 | |||
Total
Other Current Assets
|
$ | 115,000 | ||
TOTAL
ASSETS
|
$ | 207,770 | ||
LIABILITIES
& EQUITY
|
||||
Current
liabilities:
|
||||
Account
payable
|
$ | 354 | ||
Payroll
liabilities
|
668 | |||
Total
current liabilities
|
$ | 1,022 | ||
Other
current liabilities:
|
||||
Loan
from shareholders
|
500 | |||
Total
other current liabilities
|
$ | 500 | ||
Total
liabilities
|
$ | 1,522 | ||
Stockholders'
Equity:
|
||||
Common
stock, $0.001 par value;
|
||||
200,000,000
shares authorized;
|
||||
27,939,000
shares issued and outstanding.
|
$ | 27,939 | ||
Paid-in
capital
|
$ | 230,231 | ||
Deficit
accumulated during the development stage
|
(51,612 | ) | ||
Accumulated
other comprehensive loss
|
(311 | ) | ||
Total
stockholders' equity
|
$ | 206,247 | ||
TOTAL
LIABILITIES & EQUITY
|
$ | 207,770 |
F-3
HYPERERA,
INC
(A
Development Stage Enterprise)
STATEMENT
OF LOSS
Period from
|
Cumulative from
|
|||||||
February 19, 2008 (Date
|
February 19, 2008 (Date
|
|||||||
of Inception) Through
|
of Inception) Through
|
|||||||
December
31, 2008
|
December
31, 2008
|
|||||||
Revenues
|
$ | - | $ | - | ||||
Cost
of Goods Sold
|
- | - | ||||||
Gross
Profit
|
$ | - | $ | - | ||||
Operating
expenses:
|
||||||||
Research
and development
|
- | - | ||||||
Selling,
general and administrative expenses
|
51,622 | 51,622 | ||||||
Depreciation
and amortization expenses
|
- | - | ||||||
Total
Operating Expenses
|
51,622 | 51,622 | ||||||
Operating
Loss
|
$ | (51,622 | ) | $ | (51,622 | ) | ||
- | ||||||||
Investment
income, net
|
$ | 10 | $ | 10 | ||||
Interest
Expense, net
|
- | - | ||||||
Loss
before income taxes
|
(51,612 | ) | (51,612 | ) | ||||
Loss
tax expense
|
- | |||||||
Net
loss
|
$ | (51,612 | ) | $ | (51,612 | ) | ||
- | ||||||||
Net
loss per common share- Basics
|
$ | (0.00 | ) | $ | (0.00 | ) | ||
Net
loss per common share- Diluted
|
$ | (0.00 | ) | $ | (0.00 | ) | ||
Other
comprehensive loss, net of tax:
|
||||||||
Foreign
currency translation adjustments
|
(311 | ) | (311 | ) | ||||
Other
comprehensive loss
|
$ | (311 | ) | $ | (311 | ) | ||
Comprehensive
Loss
|
$ | (51,923 | ) | $ | (51,923 | ) |
F-4
HYPERERA,
INC
(A
Development Stage Enterprise)
STATEMENT
OF STOCKHOLDERS EQUITY
The
Period February 19, 2008 ( Date of Inception)
through
December 31, 2008
Deficit
|
|||||||||||||||||||||||
Accumulated
|
Accumulated
|
||||||||||||||||||||||
Additional
|
During the
|
Other
|
Total
|
||||||||||||||||||||
Common Stock
|
Paid-in
|
Development
|
Comprehensive
|
Stockholders'
|
|||||||||||||||||||
Shares
|
Amount
|
Capital
|
Stage
|
Income (Loss)
|
Equity
|
||||||||||||||||||
Issuance
of common stocks
|
|||||||||||||||||||||||
to
shareholders @0.001 per
|
|||||||||||||||||||||||
share
on February 19, 2008
|
20,000,000 | $ | 20,000 | $ | - | $ | - | $ | 20,000 | ||||||||||||||
Issuance
of common stocks
|
|||||||||||||||||||||||
to
shareholders @0.03 per
|
|||||||||||||||||||||||
share
on March 31, 2008
|
5,200,000 | $ | 5,200 | $ | 150,800 | $ | 156,000 | ||||||||||||||||
Issuance
of common stocks
|
|||||||||||||||||||||||
to
shareholders @0.03 per
|
|||||||||||||||||||||||
share
on April 28, 2008
|
1,400,000 | $ | 1,400 | $ | 40,600 | $ | 42,000 | ||||||||||||||||
Issuance
of common stocks
|
|||||||||||||||||||||||
to
shareholders @0.03 per
|
|||||||||||||||||||||||
share
on July 20, 2008
|
1,200,000 | $ | 1,200 | $ | 34,800 | $ | 36,000 | ||||||||||||||||
Issuance
of common stocks
|
|||||||||||||||||||||||
to
Williams @0.03 per share
|
|||||||||||||||||||||||
on
July 20, 2008
|
139,000 | $ | 139 | $ | 4,031 | $ | 4,170 | ||||||||||||||||
Adjustment
for Exchange
|
|||||||||||||||||||||||
rate
changes
|
$ |
(311
|
) | $ | (311 | ) | |||||||||||||||||
Net
loss for the period
|
|||||||||||||||||||||||
ended
December 31, 2008
|
$ | (51,612 | ) | $ | (51,612 | ) | |||||||||||||||||
Balance,
December 31, 2008
|
27,939,000 | $ | 27,939 | $ | 230,231 | $ | (51,612 | ) | $ |
(311
|
) | $ | 206,247 |
F-5
HYPERERA,
INC
(A
Development Stage Enterprise)
STATEMENT
OF CASH FLOWS
Period from
|
Cumulative from
|
|||||||
February 19,
|
February 19,
|
|||||||
2008 (date of
|
2008 (Date of
|
|||||||
Inception) Through
|
Inception) Through
|
|||||||
December 31,
|
December 31,
|
|||||||
2008
|
2008
|
|||||||
Operating
Activities:
|
||||||||
Net
loss
|
$ | (51,612 | ) | $ | (51,612 | ) | ||
Adjustments
to reconcile net income to net cash provided by
|
||||||||
operating
activities:
|
||||||||
Non-cash
portion of share based legal fee expense
|
$ | 4,170 | $ | 4,170 | ||||
Loan
to shareholders
|
(115,000 | ) | (115,000 | ) | ||||
Account
payable
|
354 | 354 | ||||||
Payroll
liabilities
|
668 | 668 | ||||||
Loan
from shareholders
|
500 | 500 | ||||||
Net
cash provided by operating activities
|
$ | (160,920 | ) | $ | (160,920 | ) | ||
Investing
Activities:
|
||||||||
Net
cash provided by investing activities
|
$ | - | $ | - | ||||
Financing
Activities:
|
||||||||
Proceeds
from issuance of common stock
|
254,000 | 254,000 | ||||||
Net
cash provided by financing activities
|
$ | 254,000 | $ | 254,000 | ||||
Effect
of Exchange Rate on Cash
|
$ | (311 | ) | $ | (311 | ) | ||
Net
increase (decrease) in cash and cash equivalents
|
$ | 92,770 | $ | 92,770 | ||||
Cash
and cash equivalents at beginning of the year
|
$ | - | $ | - | ||||
Cash
and cash equivalents at end of year
|
$ | 92,770 | $ | 92,770 | ||||
Supplemental
schedule of non-cash investing and financing
activities:
|
||||||||
Common
stock issued pursuant to stock
|
||||||||
subscription receivable -officer
(Note D)
|
$ | - | $ | - |
F-6
HYPERERA,
INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE
A- BUSINESS DESCRIPTION
Hyperera,
Inc. (the “Company”), incorporated under the laws of Nevada on February 19,
2008, with registered address at 375 N. Stephanie, Suite 1411, Henderson, NV
89014. Hyperera, Inc. operates its business in the U.S. as
Hyperera USA, Inc. the Company’ s wholly owned branch located in the State of
Illinois and has principal office at 2316 South Wentworth Avenue, Chicago, IL
60616.
In
addition to our U.S. operation, In addition to our U.S. operation, we have
one representative office in China. Hyperera Inc Beijing Representative Office.
(“Hyperera Beijing”)was established on April 2, 2008. It is a
representative office on behalf of Hyperera, Inc. The office was closed
effective on July 1, 2009; at the mean time, Hyperera, Inc established a
subsidiary in China in July 3, 2009 to replace the office to conduct and operate
the business of trading services, distribution, and marketing of the surgery
anesthesia clinic management software and ICU management system software and
hardware system in Asia.
Hyperera
Technology (Beijing) co, Ltd, as the wholly owned subsidiary, is registered on
July 3, 2008 in China. Hyperera Technology (Beijing), Ltd is located
at Room 11A, Block B, Kingwing Hotel, No. 17 Dongsanhuan South Road, Chaoyang
District, Beijing, China 100021.
Hyperera,
Inc. is headquartered in 2316 South Wentworth Avenue, Chicago, IL 60616,
USA. Our telephone number is 312-842-2288.
Hyperera
Inc is a high-tech enterprise specialized in the surgery anesthesia clinic
management software and intensive care unit (ICU) management system, control
software research, development, software maintenance, upgrade and services. Our
business is the sale of the surgery anesthesia clinic management software
and ICU management system in Asia, and North America.
The
surgery anesthesia clinic management software and ICU management system software
is developed in China by Beijing Chaoran Chuangshi Technology Co., Ltd (“Beijing
Chaoran”). It was established in 2002 specializing in technology developed and
service, sales of computer hardware and software, machine and electric
equipment. Beijing Chaoran Chuangshi Technology Co., is located in No.28 Mujiu
Road, Mujiayu Town, Miyun, Beijing, China. On March 1st, 2008,
Hyperera, Inc. signed a long-term distribution agreement with Beijing Chaoran
Chuangshi Technology Co. Beijing Chaoran Chuangshi Technology Co is a Chinese
Technology company owned 100% by Mr.Liancheng Li, a Chinese national, the
founder of the company.
F-7
HYPERERA,
INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE
B – SIGNIFICANT ACCOUNTING POLICIES
Basis of
accounting
The
financial statements reflect the assets, revenues and expenditures of the
Company on the accrued basis of accounting.
Use of
Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect certain amounts reported in the
financial statements and disclosures. Accordingly, actual results
could differ from those estimates.
Cash and
Cash Equivalents
The
Company considers all highly-liquid investments with an original maturity of
three months or less when purchased to be cash equivalents. As of December 31,
2008, there’s $ 92,770 cash and cash equivalents.
Foreign
Currency Translation
The
Company has determined the United States dollars to be its functional currency
for Hyperera USA, Inc; People’s Republic of China Chines Yuan Renminbi to be its
functional currency in Hyperera BeiJing office. Assets and
liabilities were translated to U.S. dollars at the period-end exchange
rate. Statement of operations amounts were translated to U.S. dollars
using the first date of each month during the year. Gains and losses
resulting from translating foreign currency financial statements are accumulated
in other comprehensive income (loss), a separate component of shareholders’
equity.
Property,
Plant, and Equipment Depreciation
Property,
plant, and equipment are stated at cost. Depreciation is being
provided principally by straight line methods over the estimated useful lives of
the assets. As of December 31, 2008, there were no fixed assets in
the Company’s balance sheets.
Stock-Based
Compensation
The
Company accounts for stock issued for services using the fair value
method. In accordance with Emerging Issues Task Force (“EITF”) 96-98,
the measurement date of shares issued for services is the date at which the
counterparty’s performance is complete.
F-8
HYPERERA, INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Net Loss Per
Common Share
The
Company computes per share amounts in accordance with SFAS No. 128, “Earnings
per Share”. SFAS No. 128 requires presentation of basis and diluted
EPS. Basic EPS is computed by dividing the income (loss) available to
Common Shareholders by the weighted-average number of common shares outstanding
for the period. Diluted EPS is based on the weighted-average number
of shares of common stock and common stock equivalents outstanding during the
periods.
The
Company only issued one type of shares, i.e., common shares
only. There are no other types securities were
issued. Accordingly, the diluted and basics net loss per common share
are the same.
The
following table shows the calculations for basics and diluted net loss per
common share for the period from February 19 (Date of inception) through
December 31, 2008.
Basic
& Diluted EPS Computation
|
||||||||||||
Net
Loss
|
$ | (51,612 | ) | |||||||||
Loss
available to common stockholders
|
$ | (51,612 | ) | |||||||||
Dates
|
Shares
|
Fraction of
Period
|
Weighted -
|
|||||||||
Outstanding
|
Outstanding
|
On Daily Basis
|
Average Shares
|
|||||||||
February
19, 2008
|
20,000,000 | 316/ 365 | 17,315,068 | |||||||||
March
31, 2008
|
5,200,000 | 275/ 365 | 3,917,808 | |||||||||
April
28, 2008
|
1,400,000 | 247/ 365 | 947,397 | |||||||||
July
20, 2008
|
1,339,000 | 164 / 365 | 601,633 | |||||||||
Weighted-average
shares
|
22,781,907 | |||||||||||
Basic
& Diluted Net Loss Per Common Share
|
$ | (0.00 | ) |
F-9
HYPERERA, INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Revenue
Recognition
In
accordance with the Securities and Exchange Commission’s (“SEC”) Staff
Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition,” the Company
recognizes sales revenue for hardware, software and customized clinical
information systems sales when it is realized or realizable and earned. The
Company must meet all of the following four criteria under SAB 104 to recognize
hardware revenue:
|
·
|
Persuasive
evidence of an arrangement
exists
|
|
·
|
Delivery
has occurred
|
|
·
|
The
sales price is fixed or
determinable
|
|
·
|
Collection
is reasonably assured
|
In
accordance with SOP 97-2, “Revenue Recognition,” the Company recognizes software
sales revenue when it is realized or realizable and earned. Revenue is realized
or realizable when the product is exchanged for cash or for claim to cash or
other assets that are readily convertible into known amounts of cash. The
Company must meet all of the following four criteria under SOP 97-2 to recognize
software revenue:
|
·
|
Persuasive
evidence of an arrangement
exists
|
|
·
|
Delivery
has occurred
|
|
·
|
The
vendor’s fee is fixed or
determinable
|
|
·
|
Collectibility
is probable
|
In accordance with
paragraph 7-19 of EITF 99-19, "Reporting Revenues Gross as a Principal
versus Net as an Agent", the Company will
recognize revenues on a gross basis.EITF 99-19 discusses whether revenues
and cost of goods sold to arrive at gross profit and their corresponding assets
and liabilities should be recorded at gross or net. The following
indicators of gross revenue recognition are existed in the
Company:
|
·
|
Acts
as principal in the
transaction.
|
|
·
|
Has
risk and rewards of ownership, such as general inventory risk, risk of
loss for collection, delivery and returns,
and
|
|
·
|
Takes
title to the products,
|
|
·
|
Flexibility
in pricing
|
|
·
|
Assumes
credit risk;
|
F-10
HYPERERA, INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Revenue
Recognition (Continued)
|
·
|
The
company can change the products or perform part of the service, and the
Company is involved in the determination of products or service
specifications, and the Company customizes the supplier’s software based
on customer’s needs.
|
All
the indicators of net revenue reporting (EITF 99-19, paragraph 15-19) are not
existed in the Company.
The Company signed a
distribution agreement on March 15, 2009 for 3 years with Beijing Chaoran
Chuangshi Technology Co., Ltd (Beijing Chaoran) for the CIS software developed
by Beijing Chaoran. According to the Agreement, the Company may
exclusively sell the Chaoran developed CIS systems, but if Chaoran discontinue
the supply of CIS, the Company can select other suppliers or other CIS
developers to provide the similar products to the
customers. Accordingly, an signed agreement will not affect the
recognition of gross revenue reporting.
Income
Tax
The
Company filed extension for corporate tax return Form 1120 to Internal Revenue
Service and IL 1120 to the State of Illinois. There is no income tax
for the State of Nevada.
Payroll
Expense
Started
from June 1, 2008, Hyperera BeiJing’s Representative office have one full time
employees to take care of daily management and administrative activities for the
Company. The total payroll expense for the year 2008 was $5,000.
There was no payroll expense incurred in USA.
F-11
HYPERERA, INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Operating
Expenses
From
the period of February 19, 2008 to December 31, 2008, there’s total of $ 51,622
operating expense, which included $ 31,422 professional fees.
Concentration of credit
risk
The
Company maintains its cash in bank accounts which, at times, may exceed the
federally insured limits. The Company has not experienced any losses
in such accounts and believes it is not exposed to any significant credit risk
on cash.
Recent
Accounting Pronouncements
The
Financial Accounting Standards Board (“FASB”) has recently issued several new
accounting pronouncements, which may apply, to the Company at present, or in the
proceeding months as operations expand.
In
July 2006, the FASB issued Financial Interpretation No. 48, “Accounting for
Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109” (“FIN
48”), and supplemented by FASB Financial Staff Position FIN 48-1, Definition of
Settlement in FASB Interpretation No. 48, issued May 2, 2007. FIN 48
specifies how tax benefits for uncertain tax positions are to be recognized,
measured, and derecognized in financial statements; requires certain disclosures
of uncertain tax matters; specifies how reserves for uncertain tax positions
should be classified on the balance sheet; and provides transition and interim
period guidance, among other provisions. FIN 48 is effective for
fiscal years beginning after December 15, 2006 and as a result, is effective for
the Company in the fiscal year 2008.
In
September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS
157”). SFAS 157 defines fair value, establishes a framework for using
fair value assets and liabilities, and expends disclosures about fair value
measurements. This statement applies whenever other statements
require or permit assets or liabilities to be measured at fair
value. SFAS 157 is effective for fiscal years beginning after
November 15, 2007. The management believes that there is no material
impact on its consolidated results of operations, cash flows, and financial
position.
F-12
HYPERERA, INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent
Accounting Pronouncements (Continued)
In
September 2006, the Securities and Exchange Commission (“SEC”) issued Staff
Accounting Bulletin (“SAB”) No. 108, Quantifying Financial Misstatements (“SAB
108”), which expresses the Staff’s views regarding the process of quantifying
financial statement misstatements. Registrants are required to
quantify the impact of correcting all misstatements, including both carryover
and reversing effects of prior year misstatements, on the current year financial
statements. The financial statements would require adjustment when
either approach results in quantifying a misstatement that is material, after
considering all relevant quantitative and qualitative factors. SAB
108 is effective for financial statements covering the first fiscal year ending
after November 15, 2006. The management believes that there is no
material impact on its consolidated results of operations, cash flows, and
financial position.
In
December 2007, the SEC issued Staff Accounting Bulletin (“SAB”) 110 Share-Based
Payment. SAB 110 amends and replaces Question 6 of Section D.2 of Topic 14,
“Share-Based Payment,” of the Staff Accounting Bulletin series. Question 6 of
Section D.2 of Topic 14 expresses the views of the staff regarding the use of
the “simplified” method in developing an estimate of the expected term of “plain
vanilla” share options and allows usage of the “simplified” method for share
option grants prior to December 31, 2007. SAB 110 allows public companies which
do not have historically sufficient experience to provide a reasonable estimate
to continue use of the “simplified” method for estimating the expected term of
“plain vanilla” share option grants after December 31, 2007. SAB 110 is
effective January 1, 2008 which the Company adopted upon its inception. The
Company currently uses the “simplified” method to estimate the expected term for
share option grants to employees as it does not have enough historical
experience to provide a reasonable estimate. The Company will continue to use
the “simplified” method until it has enough historical experience to provide a
reasonable estimate of expected term in accordance with SAB 110. The Company
does not expect SAB 110 will have a material impact on its balance sheet,
statement of operations and cash flows.
In
December 2007, the Financial Accounting Standards Board (“FASB”) issued
Statement No. 141R, Business Combinations. Statement No. 141R modifies the
accounting and disclosure requirements for business combinations and broadens
the scope of the previous standard to apply to all transactions in which one
entity obtains control over another business.
F-13
HYPERERA, INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent
Accounting Pronouncements (Continued)
In
December 2007, the FASB issued SFAS No. 160 Non-controlling Interests in
Consolidated Financial Statements, an amendment of ARB No. 51, this Statement
amends
Accounting Research Bulletin No. 51, “Consolidated Financial Statements” to
establish accounting and reporting standards for the non-controlling interest in
a subsidiary
and for the deconsolidation of a subsidiary. SFAS 160 is required to be adopted
simultaneously with SFAS 141R and is effective for reporting periods on or after
December 15, 2008. An earlier adoption is not permitted. Currently, the Company
does not have any non-controlling interests and accordingly, the adoption of
SFAS 160 is not expected to have a material impact on our financial position,
cash flows or results of operations.
NOTE
C – RELATED PARTY TRANSACTIONS
Loans from
Shareholders
On
March 2, 2008, founder of the Company, Mr. Zhiyong Li opened a bank account at
Chicago branch with CitiBank. Mr. Zhiyong Li loaned $500.00 to the
Company to open the bank account.
Loans to
Officers
As
December 31 2008, the Company advance $115,000 to the Company’s CEO and
shareholders Zhiyong Li; and the same amount will return back in February,
2009.
Operating
Leases
The
Company entered into a lease for its corporate office in Chicago under terms of
non-cancelable operating leases. The lease term is from March 1, 2008 through
February 28, 2011 and requires a $ 600 monthly lease payment. This office space
is leased from a related party, which is the Company’s officer Simon
Bai.
F-14
HYPERERA, INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE
C – RELATED PARTY TRANSACTIONS ( Continue)
Common
Shares Issued to Executive and Non-Executive Officers and
Directors
As of
December 31, 2008, total 20,400,000 shares were issued to officers and
directors. Please see the Table below for details:
Name
|
Title
|
Share QTY
|
Amount
|
Date
|
% of
Common
Share
|
||||||||||
Zhi
Yong Li
|
Chairman
|
10,000,000 | $ | 10,000.00 |
2/19/2008
|
35.79 | % | ||||||||
Wei
Wu
|
President
|
5,000,000 | $ | 5,000.00 |
2/19/2008
|
17.90 | % | ||||||||
Hui
Tao Zhou
|
Director
|
5,000,000 | $ | 5,000.00 |
2/19/2008
|
17.90 | % | ||||||||
Jian
Wu Zhang
|
Director
|
100,000 | $ | 3,000.00 |
3/31/2008
|
0.36 | % | ||||||||
Ming
Liu
|
Director
|
100,000 | $ | 3,000.00 |
3/31/2008
|
0.36 | % | ||||||||
Hong
Tao Bai
|
Vice-President
|
100,000 | $ | 3,000.00 |
3/31/2008
|
0.36 | % | ||||||||
Nan
Su
|
CTO
|
100,000 | $ | 3,000.00 |
3/31/2008
|
0.36 | % | ||||||||
Total
|
20,400,000 | $ | 32,000.00 | 73.02 | % |
NOTE
D – SHAREHOLDERS’ EQUITY
Under
the Company’s Articles of Incorporation dated February 19, 2008, the Company is
authorized to issue 200,000,000 shares of capital stock with a par value of
$0.001.
On
Feburary19, 2008, the Company was incorporated in the State of
Nevada.
On
February 19, 2008, , the Company issued 20,000,000 shares to three founders of
the Company, Zhiyong Li, Wei Wu, and Huitao Zhou at $0.001 per share
or $ 20,000 for initial capital (stock subscription
receivable). Detail as follow:
Name
|
Share QTY
|
Purchase
Date
|
Amount ($0.001) Per
Share
|
||||||
Zhi
Yong Li
|
10,000,000 |
2/19/2008
|
$ | 10,000 | |||||
Wei
Wu
|
5,000,000 |
2/19/2008
|
$ | 5,000 | |||||
Hui
Tao Zhou
|
5,000,000 |
2/19/2008
|
$ | 5,000 | |||||
Total
|
20,000,000 | $ | 20,000 |
F-15
HYPERERA, INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE
D – SHAREHOLDERS’ EQUITY (Continue)
On
March 31, 2008, the Company issued total 5,200,000 shares to 52 shareholders at
$0.03 per share or $156,000 for common stock (stock subscription
receivable).
Detail
list as follow:
Name
|
Share QTY
|
Purchase
Date
|
Amount ($0.03) Per Share
|
||||||
Lian
Cheng Li
|
100,000 |
3/19/2008
|
$ | 3,000 | |||||
Lian
Rong Zhou
|
100,000 |
3/19/2008
|
$ | 3,000 | |||||
Xiao
Zhang
|
100,000 |
3/19/2008
|
$ | 3,000 | |||||
Ya
Jun Li
|
100,000 |
3/19/2008
|
$ | 3,000 | |||||
Jia
Bin Fu
|
100,000 |
3/19/2008
|
$ | 3,000 | |||||
De
Lu Zhang
|
100,000 |
3/19/2008
|
$ | 3,000 | |||||
Gui
Yun Tian
|
100,000 |
3/19/2008
|
$ | 3,000 | |||||
Tong
Xu
|
100,000 |
3/19/2008
|
$ | 3,000 | |||||
Pei
Ji Wu
|
100,000 |
3/19/2008
|
$ | 3,000 | |||||
Lan
Fen Wang
|
100,000 |
3/19/2008
|
$ | 3,000 | |||||
Lin
Hua Shang
|
100,000 |
3/19/2008
|
$ | 3,000 | |||||
Jian
Wu
|
100,000 |
3/19/2008
|
$ | 3,000 | |||||
Quan
Wu
|
100,000 |
3/19/2008
|
$ | 3,000 | |||||
Qing
Tian
|
100,000 |
3/19/2008
|
$ | 3,000 | |||||
Shu
Zhi Zhang
|
100,000 |
3/19/2008
|
$ | 3,000 | |||||
Yu
Fang Zhou
|
100,000 |
3/19/2008
|
$ | 3,000 | |||||
Yue
Hui Zhou
|
100,000 |
3/19/2008
|
$ | 3,000 | |||||
Yue
Ming Zhou
|
100,000 |
3/19/2008
|
$ | 3,000 | |||||
Xiang
You Kong
|
100,000 |
3/19/2008
|
$ | 3,000 | |||||
Zhi
Nan Zhou
|
100,000 |
3/19/2008
|
$ | 3,000 | |||||
Jian
Zhong Zhang
|
100,000 |
3/19/2008
|
$ | 3,000 | |||||
Jian
Guo Zhang
|
100,000 |
3/19/2008
|
$ | 3,000 | |||||
Jian
Wu Zhang
|
100,000 |
3/19/2008
|
$ | 3,000 | |||||
Ling
Fen Shang
|
100,000 |
3/19/2008
|
$ | 3,000 | |||||
Wen
Zhang
|
100,000 |
3/19/2008
|
$ | 3,000 | |||||
Yan
Yun Xi
|
100,000 |
3/20/2008
|
$ | 3,000 | |||||
Ling
Luan
|
100,000 |
3/20/2008
|
$ | 3,000 | |||||
Qing
Liang Chen
|
100,000 |
3/20/2008
|
$ | 3,000 | |||||
Yan
Mei Du
|
100,000 |
3/20/2008
|
$ | 3,000 | |||||
Nan
Su
|
100,000 |
3/20/2008
|
$ | 3,000 | |||||
Qing
Di
|
100,000 |
3/20/2008
|
$ | 3,000 |
F-16
HYPERERA, INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE
D – SHAREHOLDERS’ EQUITY (Continue)
Name
|
Share QTY
|
Purchase
Date
|
Amount ($0.03) Per Share
|
||||||
Hong
Tao Bai
|
100,000 |
3/20/2008
|
$ | 3,000 | |||||
Meng
Xia Zhuang
|
100,000 |
3/20/2008
|
$ | 3,000 | |||||
Zhi
Hui Zhang
|
100,000 |
3/20/2008
|
$ | 3,000 | |||||
Shu
Ting Zhang
|
100,000 |
3/20/2008
|
$ | 3,000 | |||||
Wen
Fang Dong
|
100,000 |
3/20/2008
|
$ | 3,000 | |||||
Yan
Hu
|
100,000 |
3/20/2008
|
$ | 3,000 | |||||
Zhen
Qin Wang
|
100,000 |
3/20/2008
|
$ | 3,000 | |||||
Wei
Lin
|
100,000 |
3/22/2008
|
$ | 3,000 | |||||
Yi
Xiong Wang
|
100,000 |
3/22/2008
|
$ | 3,000 | |||||
Yang
Yu
|
100,000 |
3/22/2008
|
$ | 3,000 | |||||
Shu
Jun Huang
|
100,000 |
3/22/2008
|
$ | 3,000 | |||||
Zheng
Jie Hua
|
100,000 |
3/22/2008
|
$ | 3,000 | |||||
Ming
Liu
|
100,000 |
3/22/2008
|
$ | 3,000 | |||||
Li
Wen Shi
|
100,000 |
3/22/2008
|
$ | 3,000 | |||||
Zhong
Huan Li
|
100,000 |
3/22/2008
|
$ | 3,000 | |||||
Ji
Xiang Liu
|
100,000 |
3/22/2008
|
$ | 3,000 | |||||
Hou
Qin Li
|
100,000 |
3/22/2008
|
$ | 3,000 | |||||
Hao
Chen Liu
|
100,000 |
3/22/2008
|
$ | 3,000 | |||||
Da
Liu
|
100,000 |
3/22/2008
|
$ | 3,000 | |||||
Yu
Ming Zhou
|
100,000 |
3/22/2008
|
$ | 3,000 | |||||
Bao
Shu Dai
|
100,000 |
3/22/2008
|
$ | 3,000 | |||||
Total
|
5,200,000 | $ | 156,000 |
On
April 28, 2008, the Company issued additional 1,400,000 shares to 14
shareholders at $0.03 per share or $42,000 for common stock (stock subscription
receivable). Detail as follow:
F-17
HYPERERA, INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE
D – SHAREHOLDERS’ EQUITY (Continue)
Name
|
Share QTY
|
Purchase Date
|
Amount ($0.03) Per Share
|
||||||
Jun
Liu
|
100,000 |
4/28/2008
|
$ | 3,000 | |||||
Yu
Yan Qin
|
100,000 |
4/28/2008
|
$ | 3,000 | |||||
Lian
Sheng Zhou
|
100,000 |
4/28/2008
|
$ | 3,000 | |||||
Wen
Hui Zhou
|
100,000 |
4/28/2008
|
$ | 3,000 | |||||
Yong
Heng Hao
|
100,000 |
4/28/2008
|
$ | 3,000 | |||||
Mei
Sheng
|
100,000 |
4/28/2008
|
$ | 3,000 | |||||
Wen
Luan Hu
|
100,000 |
4/28/2008
|
$ | 3,000 | |||||
Guang
Yue Shang
|
100,000 |
4/28/2008
|
$ | 3,000 | |||||
Ke
Yan Liu
|
100,000 |
4/28/2008
|
$ | 3,000 | |||||
Li
Fang Huang
|
100,000 |
4/28/2008
|
$ | 3,000 | |||||
Hui
Li
|
100,000 |
4/28/2008
|
$ | 3,000 | |||||
Fu
Jun Jia
|
100,000 |
4/28/2008
|
$ | 3,000 | |||||
Yong
Yu Liu
|
100,000 |
4/28/2008
|
$ | 3,000 | |||||
Bao
Yu Li
|
100,000 |
4/28/2008
|
$ | 3,000 | |||||
Total
|
1,400,000 | $ | 42,000 |
On
July 20, 2008, additional 1,200,000 shares were issued to 7 shareholders at $
0.03 per share, and the total proceeds of $36,000 were received. Detail as
follow:
Name
|
Share QTY
|
Purchase
Date
|
Amount ($0.03) Per Share
|
||||||
Sen
Chai
|
100,000 |
7/20/2008
|
$ | 3,000 | |||||
Qian
Sun
|
100,000 |
7/20/2008
|
$ | 3,000 | |||||
Yun
Sun
|
100,000 |
7/20/2008
|
$ | 3,000 | |||||
Wan
Ting Li
|
100,000 |
7/20/2008
|
$ | 3,000 | |||||
Fu
Xiang Tian
|
200,000 |
7/20/2008
|
$ | 6,000 | |||||
Zeng
Zhao
|
300,000 |
7/20/2008
|
$ | 9,000 | |||||
Lie
Rong Huang
|
300,000 |
7/20/2008
|
$ | 9,000 | |||||
Total
|
1,200,000 | $ | 36,000 |
F-18
HYPERERA, INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE
D – SHAREHOLDERS’ EQUITY (Continue)
On
July 20, 2008, 139,000 shares were issued to Williams Law Group at $ 0.03 per
share for the legal service value $ 4,170.
As of
December 31, 2008, the total 27,939,000 shares were issued and
outstanding.
Stock
Subscription Receivable - Officers
At
February 19, 2008, the Company had receivables from its four founding
stockholders aggregating $20,000 for the purchase of their Company common
stock.
At
March 31, 2008, the Company had receivable from its 52 shareholders aggregating
$ 156,000 for the purchase of their Company common stock.
And at
April 28, 2008, the Company had receivable from its 14 shareholders aggregating
$ 42,000 for the purchase of their Company common stock.
The
outstanding balances were due on demand. All receivables of $ 218,000 were
subsequently paid in full in July 2008.
NOTE
E – SUBSEQUENT EVENTS
The
loan amount of $ 115,000 to the Company’s Executive officers and shareholders
was paid back on February 2009.
F-19
HYPERERA, INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE
F – GOING CONCERN
As
shown in the accompanying financial statements which have been prepared in
conformity with accounting principles generally accepted in the United States of
America, which contemplates continuation of the Company as a going concern, the
Company has incurred operating losses of $ 51,612 in the 12 months ended
December 31, 2008 and period February 19, 2008 (inception) through December 31,
2008. The Company has not recorded any revenues and is considered to be a
development stage company.
There
is no guarantee that the Company will be able to raise enough capital or
generate revenues to sustain its operations and carry out its business
plan. These conditions raise substantial doubt about the Company’s
ability to continue as a going concern.
The
financial statements do not include any adjustments relating to the carrying
amounts of recorded assets or the carrying amounts and classification of
recorded liabilities that may be required should the Company be unable to
continue as a going concern.
The
Company’s lack of operating history and financial resources raise substantial
doubt about its ability to continue as a going concern. The financial
statements do not include adjustments that might result from the outcome of this
uncertainty and if the Company is unable to generate significant revenue or
secure financing, then the Company may be required to cease or curtail its
operations.
F-20
Interim
Financial Statements
Hyperera,
Inc
Nine
Months Ended September 30, 2009 and 2008
Contents
Financial
Statement (unaudited)
|
|
Consolidated
Balance Sheet
|
F-22
|
Consolidated
Statement of Loss
|
F-23
|
Consolidated
Statement of Shareholders Equity
|
F-24
|
Consolidated
Statement of Cash Flows
|
F-25
|
Notes
to Consolidated Financial Statements
|
F-26
|
F-21
HYPERERA,
INC
(A
Development Stage Enterprise)
CONSOLIDATED
BALANCE SHEET
September 30
|
December 31
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
||||||||
ASSETS | ||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 15,027 | $ | 92,770 | ||||
Accounts
receivable, net
|
- | - | ||||||
Total
Current Assets
|
$ | 15,027 | $ | 92,770 | ||||
Other
current assets:
|
||||||||
Prepaid
expense to supplier
|
207,998 | - | ||||||
Loan
to shareholders
|
- | 115,000 | ||||||
Total
Other Current Assets
|
$ | 207,998 | $ | 115,000 | ||||
TOTAL
ASSETS
|
$ | 223,025 | $ | 207,770 | ||||
LIABILITIES
& EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Account
payable
|
$ | 143 | $ | 354 | ||||
Payroll
liabilities
|
- | 668 | ||||||
Total
current liabilities
|
$ | 143 | $ | 1,022 | ||||
Other
current liabilities:
|
||||||||
Loan
from shareholders
|
40,358 | 500 | ||||||
Total
other current liabilities
|
$ | 40,358 | $ | 500 | ||||
Total
liabilities
|
$ | 40,501 | $ | 1,522 | ||||
Stockholders'
Equity:
|
||||||||
Common
stock, $0.001 par value;
200,000,000
shares authorized;
27,939,000
shares issued and outstanding.
|
$ | 27,939 | $ | 27,939 | ||||
Paid-in
capital
|
$ | 230,231 | $ | 230,231 | ||||
Deficit
accumulated during the development stage
|
(75,195 | ) | (51,612 | ) | ||||
Accumulated
other comprehensive loss
|
(451 | ) | (311 | ) | ||||
Total
stockholders' equity
|
$ | 182,524 | $ | 206,247 | ||||
TOTAL
LIABILITIES & EQUITY
|
$ | 223,025 | $ | 207,769 |
F-22
HYPERERA,
INC
(A
Development Stage Enterprise)
CONSOLIDATED
STATEMENT OF LOSS
Cumulative from
|
||||||||||||
Nine Month Ended
|
Nine Month Ended
|
February 19, 2008 (Date
|
||||||||||
September 30
|
September 30
|
of Inception) Through
|
||||||||||
2009
|
2008
|
September 30, 2009
|
||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
Revenues
|
$ | - | $ | - | $ | - | ||||||
Cost
of Goods Sold
|
- | - | - | |||||||||
Gross
Profit
|
$ | - | $ | - | $ | - | ||||||
Operating
expenses:
|
||||||||||||
Research
and development
|
- | - | - | |||||||||
Selling,
general and administrative expenses
|
23,632 | 45,472 | 75,254 | |||||||||
Depreciation
and amortization expenses
|
- | - | - | |||||||||
Total
Operating Expenses
|
$ | 23,632 | $ | 45,472 | $ | 75,254 | ||||||
Operating
Loss
|
$ | (23,632 | ) | $ | (45,472 | ) | $ | (75,254 | ) | |||
- | ||||||||||||
Investment
income, net
|
$ | 49 | $ | 6 | $ | 59 | ||||||
Interest
Expense, net
|
- | - | - | |||||||||
Loss
before income taxes
|
(23,583 | ) | (45,466 | ) | (75,195 | ) | ||||||
Loss
tax expense
|
- | - | ||||||||||
Net
loss
|
$ | (23,583 | ) | $ | (45,466 | ) | $ | (75,195 | ) | |||
- | ||||||||||||
Net
loss per common share- Basics
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | |||
Net
loss per common share- Diluted
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | |||
Other
comprehensive loss, net of tax:
|
||||||||||||
Foreign
currency translation adjustments
|
(140 | ) | - | (451 | ) | |||||||
Other
comprehensive loss
|
(140 | ) | $ | - | $ | (451 | ) | |||||
Comprehensive
Loss
|
(23,723 | ) | $ | (45,466 | ) | $ | (75,646 | ) |
F-23
HYPERERA,
INC
(A
Development Stage Enterprise)
STATEMENT
OF STOCKHOLDERS EQUITY
The
Period February 19, 2008 ( Date of Inception)
through
September 30, 2009
Deficit
|
||||||||||||||||||||||||
Accumulated
|
Accumulated
|
|||||||||||||||||||||||
Additional
|
During the
|
Other
|
Total
|
|||||||||||||||||||||
Common Stock
|
Paid-in
|
Development
|
Comprehensive
|
Stockholders'
|
||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Stage
|
Income (Loss)
|
Equity
|
|||||||||||||||||||
Issuance
of common stocks
|
||||||||||||||||||||||||
to
shareholders @0.001 per
|
||||||||||||||||||||||||
share
on February 19, 2008
|
20,000,000 | $ | 20,000 | $ | - | $ | - | $ | 20,000 | |||||||||||||||
Issuance
of common stocks
|
||||||||||||||||||||||||
to
shareholders @0.03 per
|
||||||||||||||||||||||||
share
on March 31, 2008
|
5,200,000 | $ | 5,200 | $ | 150,800 | $ | 156,000 | |||||||||||||||||
Issuance
of common stocks
|
||||||||||||||||||||||||
to
shareholders @0.03 per
|
||||||||||||||||||||||||
share
on April 28, 2008
|
1,400,000 | $ | 1,400 | $ | 40,600 | $ | 42,000 | |||||||||||||||||
Issuance
of common stocks
|
||||||||||||||||||||||||
to
shareholders @0.03 per
|
||||||||||||||||||||||||
share
on July 20, 2008
|
1,200,000 | $ | 1,200 | $ | 34,800 | $ | 36,000 | |||||||||||||||||
Issuance
of common stocks
|
||||||||||||||||||||||||
to
Williams @0.03 per share
|
||||||||||||||||||||||||
on
July 20, 2008
|
139,000 | $ | 139 | $ | 4,031 | $ | 4,170 | |||||||||||||||||
Adjustment
for Exchange
|
||||||||||||||||||||||||
rate
changes
|
$ | (311 | ) | $ | (311 | ) | ||||||||||||||||||
Net
loss for the period
|
||||||||||||||||||||||||
ended
December 31, 2008
|
$ | (51,612 | ) | $ | (51,612 | ) | ||||||||||||||||||
Balance,
December 31, 2008
|
27,939,000 | $ | 27,939 | $ | 230,231 | $ | (51,612 | ) | $ | (311 | ) | $ | 206,247 | |||||||||||
Adjustment
for Exchange
|
||||||||||||||||||||||||
rate
changes
|
$ | (140 | ) | $ | (140 | ) | ||||||||||||||||||
Net
loss for the period
|
||||||||||||||||||||||||
ended
September 30, 2009
|
$ | (23,583 | ) | $ | (23,583 | ) | ||||||||||||||||||
Balance,
September 30, 2009
|
27,939,000 | 27,939 | $ | 230,231 | $ | (75,195 | ) | $ | (451 | ) | $ | 182,524 |
F-24
HYPERERA,
INC
(A
Development Stage Enterprise)
CONSOLIDATED
STATEMENT OF CASH FLOWS
Cumulative from
|
||||||||||||
Nine Month Ended
|
Nine Month Ended
|
February 19, 2008
|
||||||||||
September 30
|
September 30
|
(Date of Inception) to
|
||||||||||
2009
|
2008
|
September 30, 2009
|
||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
Operating
Activities:
|
||||||||||||
Net
loss
|
$ | (23,583 | ) | $ | (45,466 | ) | $ | (75,195 | ) | |||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||||||
Non-cash
portion of share based legal fee expense
|
- | 4,170 | 4,170 | |||||||||
Prepaid
Expense to Supplier
|
(207,998 | ) | - | (207,998 | ) | |||||||
Loan
to shareholders
|
115,000 | (200,000 | ) | - | ||||||||
Account
payable
|
(212 | ) | - | 143 | ||||||||
Payroll
liabilities
|
(668 | ) | - | - | ||||||||
Loan
from shareholders
|
39,858 | 1,423 | 40,358 | |||||||||
Net
cash provided by operating activities
|
$ | (77,603 | ) | $ | (239,873 | ) | $ | (238,522 | ) | |||
Investing
Activities:
|
||||||||||||
Net
cash provided by investing activities
|
$ | - | $ | - | $ | - | ||||||
Financing
Activities:
|
||||||||||||
Proceeds
from issurance of common stock
|
- | 254,000 | 254,000 | |||||||||
Net
cash provided by financing activities
|
$ | - | $ | 254,000 | $ | 254,000 | ||||||
Effect
of Exchange Rate on Cash
|
$ | (140 | ) | $ | - | $ | (451 | ) | ||||
Net
increase (decrease) in cash and cash equivalents
|
$ | (77,743 | ) | $ | 14,127 | $ | 15,027 | |||||
Cash
and cash equivalents at beginning of the year
|
$ | 92,770 | $ | - | $ | - | ||||||
Cash
and cash equivalents at end of year
|
$ | 15,027 | $ | 14,127 | $ | 15,027 | ||||||
Supplemental
schedule of non-cash investing and financing
activities:
|
||||||||||||
Common stock issued pursuant to
stock subscription receivable -officer (Note D)
|
$ | - | $ | - | $ | - |
F-25
HYPERERA,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE
A- BUSINESS DESCRIPTION
Hyperera,
Inc. (the “Company”), incorporated under the laws of Nevada on February 19,
2008, with registered address at 375 N. Stephanie, Suite 1411, Hendenson, NV
89104. Hyperera, Inc. operates its business in the U.S. as
Hyperera USA, Inc. the Company’s wholly owned branch located in the State of
Illinois and has principal office at 2316 South Wentworth Avenue, Chicago, IL
60616.
In
addition to our U.S. operation, Hyperera, Inc also established one subsidiary in
China. Hyperera Technology (Beijing), Ltd, as the wholly owned
subsidiary, is registered on July 3, 2008 in China. It is a
subsidiary on behalf of Hyperera, Inc. to conduct and operate the business of
trading services, distribution, and marketing of the surgery anesthesia clinic
management software and ICU management system software and hardware system in
Asia. Hyperera Technology (Beijing), Ltd is located at Room 11A, Block B,
Kingwing Hotel, No. 17 Dongsanhuan South Road, Chaoyang District, Beijing, China
100021.
Hyperera,
Inc. is headquartered in 2316 South Wentworth Avenue, Chicago, IL 60616,
USA. Our telephone number is 312-842-2288.
Hyperera
Inc is a high-tech enterprise specialized in the surgery anesthesia clinic
management software and intensive care unit (ICU) management system, control
software research, development, and service. Our business is the sale of the
surgery anesthesia clinic management software and ICU management system software
and hardware system in Asia, and North America.
The
software and hardware are developed in China by Beijing Chaoran Chuangshi
Technology Co., Ltd (“Beijing Chaoran”). It was established in 2002
specializing in technology developed and service, sales of computer hardware and
software, machine and electric equipment. Beijing
Chaoran Chuangshi Technology Co., is located in No.28 Mujiu Road, Mujiayu
Town, Miyun, Beijing,
China. On March 1st, 2008,
Hyperera, Inc. signed a long-term distribution agreement with Beijing
Chaoran Chuangshi Technology Co. Beijing Chaoran Chuangshi
Technology Co is a Chinese Technology company owned 100% by Mr.Liancheng Li, a
Chinese national, the founder of the company.
F-26
HYPERERA,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE
B – SIGNIFICANT ACCOUNTING POLICIES
At
September 30, 2009 and for the nine months then ended, the financial statements
reflect the assets, revenues and expenditures of the Company on the accrued
basis of accounting.
The
preparation of consolidated financial statements in conformity with generally
accepted accounting principles in the United States of America requires
management to make estimates and assumptions that affect certain amounts
reported in the financial statements and disclosures. Accordingly, actual
results could differ from those estimates.
The
Company has determined the United States dollars to be its functional currency
for Hyperera; People’s Republic of China Chinese Yuan Renminbi to be its
functional currency in Hyperera Beijing office. Assets and liabilities were
translated to U.S. dollars at the period-end exchange rate. Statement of
operations amounts were translated to U.S. dollars using the first date of each
month during the year. Gains and losses resulting from translating foreign
currency financial statements are accumulated in other comprehensive income
(loss), a separate component of shareholders’ equity.
Cash and
Cash Equivalents
The
Company considers all highly-liquid investments with an original maturity of
three months or less when purchased to be cash equivalents. As of September 30,
2009, there’s $15,027 cash and cash equivalents.
Property,
Plant, and Equipment Depreciation
Property,
plant, and equipment are stated at cost. Depreciation is being
provided principally by straight line methods over the estimated useful lives of
the assets. As of September 30, 2009, there were no fixed assets in
the Company’s balance sheets.
Stock-Based
Compensation
The
Company accounts for stock issued for services using the fair value
method. In accordance with Emerging Issues Task Force (“EITF”) 96-98,
the measurement date of shares issued for services is the date at which the
counterparty’s performance is complete.
F-27
HYPERERA, INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Net Loss Per
Common Share
The
Company computes per share amounts in accordance with SFAS No. 128, “Earnings
per Share”. SFAS No. 128 requires presentation of basis and diluted
EPS. Basic EPS is computed by dividing the income (loss) available to
Common Shareholders by the weighted-average number of common shares outstanding
for the period. Diluted EPS is based on the weighted-average number
of shares of common stock and common stock equivalents outstanding during the
periods.
The
Company only issued one type of shares, i.e., common shares
only. There are no other types securities were
issued. Accordingly, the diluted and basics net loss per common share
are the same.
Revenue
Recognition
In
accordance with the Securities and Exchange Commission’s (“SEC”) Staff
Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition,” the Company
recognizes revenue when it is realized or realizable and earned. The Company
must meet all of the following four criteria under SAB 104 to recognize
revenue:
|
·
|
Persuasive
evidence of an arrangement
exists
|
|
·
|
Delivery
has occurred
|
|
·
|
The
sales price is fixed or
determinable
|
|
·
|
Collection
is reasonably assured
|
In
accordance with SOP 97-2, “Revenue Recognition,” the Company recognizes software
sales revenue when it is realized or realizable and earned. Revenue is realized
or realizable when the product is exchanged for cash or for claim to cash or
other assets that are readily convertible into known amounts of cash. The
Company must meet all of the following four criteria under SOP 97-2 to recognize
software revenue:
|
·
|
Persuasive
evidence of an arrangement
exists
|
|
·
|
Delivery
has occurred
|
|
·
|
The
vendor’s fee is fixed or
determinable
|
|
·
|
Collectibility
is probable.
|
F-28
HYPERERA, INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Revenue
Recognition (Continued)
In accordance with
paragraph 7-19 of EITF 99-19, "Reporting Revenues Gross as a Principal
versus Net as an Agent", the Company will
recognize revenues on a gross basis.EITF 99-19 discusses whether revenues
and cost of goods sold to arrive at gross profit and their corresponding assets
and liabilities should be recorded at gross or net.
The
following indicators of gross revenue recognition are existed in the
Company:
|
·
|
Acts
as principal in the
transaction.
|
|
·
|
Has
risk and rewards of ownership, such as risk of loss for collection,
delivery and returns, and
|
|
·
|
Takes
title to the products,
|
|
·
|
Flexibility
in pricing
|
|
·
|
Assumes
credit risk;
|
|
·
|
The
company can change the products or perform part of the service, and the
Company customizes the supplier’s software based on customer’s
needs.
|
All
the indicators of net revenue reporting (EITF 99-19, paragraph 15-19) are not
existed in the Company.
The Company signed a
distribution agreement on March 15, 2009 for 3 years with Beijing Chaoran
Chuangshi Technology Co., Ltd (Beijing Chaoran) for the CIS software developed
by Beijing Chaoran. According to the Agreement, the Company may
exclusively sell the Chaoran developed CIS systems, but if Chaoran discontinue
the supply of CIS, the Company can select other suppliers or other CIS
developers to provide the similar products to the
customers. Accordingly, an signed agreement will not affect the
recognition of gross revenue reporting.
There’s
no revenue is recognized for the nine month ended September 30,
2009.
F-29
HYPERERA, INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Payroll
Expense
Started
from June 1, 2008, Hyperera BeiJing’s Representative office have one full time
employees to take care of daily management and administrative activities for the
Company. And the representative office was closed at June 30,
2009. The total payroll expense for the period of January 1, 2009 to
September 30, 2009 was $4,292.75. There was no payroll expense incurred in
USA.
Operating
Expenses
From
the period of January 1, 2009 to September 30, 2009, there’s total of $ 23,632
operating expense.
NOTE
C – RELATED PARTY TRANSACTIONS
Common
Shares Issued to Executive and Non-Executive Officers and
Directors
As of
September 30, 2009, total 20,400,000 shares were issued to officers and
directors, and total outstanding shares were 27,939,000. Please see
the Table below for details:
Name
|
Title
|
Share QTY
|
Amount
|
Date
|
% of
Common
Share
|
||||||||||
Zhi
Yong Li
|
Chairman
|
10,000,000 | $ | 10,000.00 |
2/19/2008
|
35.79 | % | ||||||||
Wei
Wu
|
President
|
5,000,000 | $ | 5,000.00 |
2/19/2008
|
17.90 | % | ||||||||
Hui
Tao Zhou
|
Director
|
5,000,000 | $ | 5,000.00 |
2/19/2008
|
17.90 | % | ||||||||
Jian
Wu Zhang
|
Director
|
100,000 | $ | 3,000.00 |
3/31/2008
|
0.36 | % | ||||||||
Ming
Liu
|
Director
|
100,000 | $ | 3,000.00 |
3/31/2008
|
0.36 | % | ||||||||
Hong
Tao Bai
|
Vice-President
|
100,000 | $ | 3,000.00 |
3/31/2008
|
0.36 | % | ||||||||
Nan
Su
|
CTO
|
100,000 | $ | 3,000.00 |
3/31/2008
|
0.36 | % | ||||||||
Total
|
20,400,000 | $ | 32,000.00 | 73.02 | % |
F-30
HYPERERA, INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE
C – RELATED PARTY TRANSACTIONS (Continue)
Prepaid
Expense to Supplier
On
March, 2009, the Company wire transferred $207,998 to Beijing Chaoran for
prepaid hardware purchase orders. As of September 30, 2009, there’s a
total of $207,998 prepayment to supplier.
See
table below:
Prepaid
to Supplier:
3/9/2009
|
Prepaid
to Chaoran
|
$ | 59,998 | |||
3/18/2009
|
Prepaid
to Chaoran
|
$ | 148,000 | |||
9/30/2009
|
Total
|
$ | 207,998 | |||
11/19/2009
|
COGS
|
$ | 5,968 | |||
12/28/2009
|
COGS
|
$ | 54,030 | |||
12/31/2009
|
Total
COGS
|
$ | 59,998 | |||
12/31/2009
|
Total
Prepaid to Supplier
|
$ | 148,000 |
Operating
Leases
The
Company entered into a lease for its corporate office in Chicago under terms of
non-cancelable operating leases. The lease term is from March 1, 2008 through
February 28, 2011 and requires a $ 600 monthly lease payment. This office space
is leased from a related party, which is the Company’s officer Simon
Bai.
Effective
on July 1, 2009, Hyperera Technologies (Beijing) Co., Limited entered into an
office lease agreement with Kingwing Real Estate Co., Ltd. for one full year,
the monthly rent is $2570.
Cost of
Goods Sold
The
Company’s purchase cost is primarily from supplier, Beijing Chaoran Chuangshi
Technology Co., Ltd (“Beijing Chaoran”), owned 100% by Mr.Liancheng Li, the
father of Mr. Zhiyong Li. The management believes that the purchase
price for the parts will be market price.
F-31
HYPERERA, INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE
C – RELATED PARTY TRANSACTIONS (Continue)
The
products the Company will sell are provided by Beijing Chaoran Chuangshi
Technology Co., Ltd. Beijing Chaoran was established in 2002
specializing in management information system applied in power
industry. The Company signed a two-year software license and
distribution agreement with Beijing Chaoran on March 1, 2009. Under the terms of
the agreement Beijing Chaoran authorizes Hyperera to be its exclusive sales and
service agent for suegery anesthesia clinic management software and ICU
management system product lines. The product lines shall include the products
that Beijing Chaoran developed before the agreement signed and the products that
will be developed solely by Beijing Chaoran during the term of the
agreement. Beijing Chaoran is the exclusive supplier of the products
Hyperera sells. The management Hyperera, Inc. believes that the
purchase price for the system and software from Hyperera will be market
price. Hyperera, Inc. and Beijing Chaoran are two totally separated
entities, i.e., Hyperara, Inc. is a USA corporation and will fully comply with
USA regulations and USA general accepted accounting principles; Beijing Chaoran
is a Chinese company and it will comply with Chinese legal
systems. Hyperera, Inc. and Beijing Chaoran will operate
independently. Beijing Chaoran, as a Chinese local company, will
record their software and hardware costs based on the Chinese accounting
regulations rulings. But, when Hyperera, Inc. purchases the software
and hardware and the services from Beijing Chaoran, Hyperera, Inc. will record
the actual costs paid to Beijing Chaoran as long as the products or services
been delivered to Hyperera, Inc. by Beijing Chaoran.
The
management of Beijing Chaoran disclosed to Hyperera, Inc. that Beijing Chaoran
adopted the cost plus pricing policies with market adjustment, negotiable with
customers. Beijing Chaoran adopted the cost plus system for all the
products for all customers including the product, surgery anesthesia clinic
management software and ICU management system exclusively distributed by
Hyperera, Inc. Specifically, the selling price for Beijing Chaoran is
determined by total actual cost of direct materials (hardware), direct labor,
and allocated overhead, plus 5-10% of total cost.
In
March 1, 2009, the Company placed order to purchase the three hardware parts
through Beijing Chaoran, the total cost of the hardware purchase is $207,998.00,
the amount of $59,998 and $ 148,000 was prepaid on March 9 and 18,
2009 respectively.
And
the prepaid amount of $ 59,998 become cost of good sold as of December 31,
2009.
F-32
HYPERERA, INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE
D – SHAREHOLDERS’ EQUITY
Under
the Company’s Articles of Incorporation dated February 19, 2008, the Company is
authorized to issue 200,000,000 shares of capital stock with a par value of
$0.001.
On
Feburary19, 2008, the Company was incorporated in the State of
Nevada.
On
February 19, 2008, , the Company issued 20,000,000 shares to three founders of
the Company, Zhiyong Li, Wei Wu, and Huitao Zhou at $0.001 per share
or $ 20,000 for initial capital (stock subscription
receivable).
On
March 31, 2008, the Company issued total 5,200,000 shares to 52 shareholders at
$0.03 per share or $156,000 for common stock (stock subscription
receivable).
On
April 28, 2008, the Company issued additional 1,400,000 shares to 14
shareholders at $0.03 per share or $42,000 for common stock (stock subscription
receivable).
On
July 20, 2008, additional 1,200,000 shares were issued to 7 shareholders at $
0.03 per share, and the total proceeds of $36,000 were
received.
On
July 20, 2008, 139,000 shares were issued to Williams Law Group at $ 0.03 per
share for the legal service value $4,170.
As of
September 30, 2009, there’s no additional shares issued. Therefore,
as of September 30, 2009, the total 27,939,000 shares were issued and
outstanding.
Stock Subscription
Receivable - Officers
At
February 19, 2008, the Company had receivables from its four founding
stockholders aggregating $20,000 for the purchase of their Company common
stock.
At
March 31, 2008, the Company had receivable from its 52 shareholders aggregating
$ 156,000 for the purchase of their Company common stock.
And at
April 28, 2008, the Company had receivable from its 14 shareholders aggregating
$ 42,000 for the purchase of their Company common stock.
The
outstanding balances were due on demand. All receivables of $ 218,000 were
subsequently paid in full in July 2008.
F-33
HYPERERA, INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE
E – SUBSEQUENT EVENTS
At
November, 19, 2009, hardware sales revenue of $ 6,588 was recognized, and a cost
of $ 5,968 was recorded too.
At
December 28, 2009, hardware sales revenue of $ 59,430 was recognized, and a cost
of $ 54,030 was incurred.
As of
December, 31, 2009, a total revenue of $ 66,018 was earned; and the amount of $
59,998 that prepaid to supplier on March, 2009 was become cost of good sold.
At
December 15, 2009, additional 60,000 shares were issued to 3 shareholders,
Baozhong Fu, Long Zhang, and Xuefeng Zhang, Chinese citizens, at $ 0.20 per
share, and the total proceeds of $12,000 were received.
Therefore,
as of December 31, 2009, the company has a total of 27,999,000 shares were
issued and outstanding.
As of
December 30, 2009, total 20,400,000 shares were issued to officers and directors
were not changed. But, the total outstanding shares were changed to
27,999,000; the percentage of common shares issued to executive and
non-executive officers and directors have been changed accordingly. Please see
the Table below for details:
Common Shares Issued to
Executive and Non-Executive Officers and Directors
Name
|
Title
|
Share QTY
|
Amount
|
Date
|
% of Common
Share
|
||||||||||
Zhi
Yong Li
|
Chairman
|
10,000,000 | $ | 10,000.00 |
2/19/2008
|
35.72 | % | ||||||||
Wei
Wu
|
President
|
5,000,000 | $ | 5,000.00 |
2/19/2008
|
17.86 | % | ||||||||
Hui
Tao Zhou
|
Director
|
5,000,000 | $ | 5,000.00 |
2/19/2008
|
17.86 | % | ||||||||
Jian
Wu Zhang
|
Director
|
100,000 | $ | 3,000.00 |
3/31/2008
|
0.36 | % | ||||||||
Ming
Liu
|
Director
|
100,000 | $ | 3,000.00 |
3/31/2008
|
0.36 | % | ||||||||
Hong
Tao Bai
|
Vice-President
|
100,000 | $ | 3,000.00 |
3/31/2008
|
0.36 | % | ||||||||
Nan
Su
|
CTO
|
100,000 | $ | 3,000.00 |
3/31/2008
|
0.36 | % | ||||||||
Simon
Bai
|
CFO
|
0.00 | % | ||||||||||||
Total
|
20,400,000 | $ | 32,000.00 | 72.86 | % |
F-34
HYPERERA, INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE
F – GOING CONCERN
As
shown in the accompanying financial statements which have been prepared in
conformity with accounting principles generally accepted in the United States of
America, which contemplates continuation of the Company as a going concern, the
Company has incurred operating losses of $23,632 and $ 75,253 in the nine months
ended September 30, 2009 and period February 19, 2008 (inception) through
September 30, 2009, respectively. The Company has not recorded any revenues and
is considered to be a development stage company.
The
financial statements do not include any adjustments relating to the carrying
amounts of recorded assets or the carrying amounts and classification of
recorded liabilities that may be required should the Company be unable to
continue as a going concern.
The
Company’s lack of operating history and financial resources raise substantial
doubt about its ability to continue as a going concern. The financial
statements do not include adjustments that might result from the outcome of this
uncertainty and if the Company is unable to generate significant revenue or
secure financing, then the Company may be required to cease or curtail its
operations.
F-35
PROSPECTUS
HYPERERA,
INC.
Dated
_____________, 2010
Selling
shareholders are offering up to 6,839,000 shares of common stock. The
selling shareholders will offer their shares at $0.20 per share until our shares
are quoted on the OTC Bulletin Board and thereafter at prevailing market prices
or privately negotiated prices.
Our
common stock is not now listed on any national securities exchange, the NASDAQ
stock market or the OTC Bulletin Board.
Dealer Prospectus Delivery
Obligation
Until
_________ (90 days from the date of this prospectus) all dealers that effect
transactions in these securities, whether or not participating in this offering,
may be required to deliver a prospectus. This is in addition to the dealers'
obligation to deliver a prospectus when acting as underwriters and with respect
to their unsold allotments or subscriptions.
42
Part
II-INFORMATION NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION
OF OFFICERS AND DIRECTORS
Our
Articles of Incorporation provide that no director or officer of the Company
shall be personally liable to the Company or its stockholders for monetary
damages for any breach of fiduciary duty by such person as a director or
officer, except for the payment of dividends in violation of Nevada law.
Our Bylaws provide, in pertinent part, that the Company shall indemnify
any person made a party to or involved in any civil, criminal or administrative
action, suit or proceeding by reason of the fact that such person is or was a
director or officer of the Company, or of any corporation which such person
served as such at the request of the Company, against expenses reasonably
incurred by, or imposed on, such person in connection with, or resulting from,
the exercise of such action, suit, proceeding or appeal thereon, except with
respect to matters as to which it is adjudged in such action, suit or proceeding
that such person was liable to the Company, or such other corporation, for
negligence or misconduct in the performance of such persons duties as a director
or officer of the Company. The determination of the rights of such
indemnification and the amount thereof may be made, at the option of the person
to be indemnified, by (1) order of the Court or administrative body or agency
having jurisdiction over the matter for which indemnification is being sought;
(2) resolution adopted by a majority of a quorum of our disinterested directors;
(3) if there is no such quorum, resolution adopted by a majority of the
committee of stockholders and disinterested directors of the Company; (4)
resolution adopted by a majority of the quorum of directors entitled to vote at
any meeting; or (5) Order of any Court having jurisdiction over the Company.
Such right of indemnification is not exclusive of any other right which
such director or officer may have, and without limiting the generality of such
statement, they are entitled to their respective rights of indemnification under
any bylaws, agreement, vote of stockholders, provision of law, or otherwise in
addition to their rights under our Bylaws.
With
regard to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act of 1933, as amended,
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by us of expenses incurred or
paid by a director, officer or controlling person of the Corporation 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, we will, unless in the opinion of our counsel the matter has been
settled by a controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by us is against
public policy as expressed in the Securities Act of 1933, as amended, and will
be governed by the final adjudication of such case.
The
following table is an itemization of all expenses, without consideration to
future contingencies, incurred or expected to be incurred by us in connection
with the issuance and distribution of the securities being offered by this
prospectus. Items marked with an asterisk (*) represent estimated expenses. We
have agreed to pay all the costs and expenses of this offering. Selling security
holders will pay no offering expenses.
43
ITEM
|
AMOUNT
|
|||
SEC
Registration Fee*
|
$ | 25 | ||
Legal
Fees and Expenses
|
50,000 | |||
Accounting
Fees and Expenses*
|
50,000 | |||
Total*
|
$ | 100,025 |
*
Estimated Figure
RECENT
SALES OF UNREGISTERED SECURITIES
On
February 19, 2008, three founders of the Company, Zhiyong Li, Wei Wu, and Huitao
Zhou purchased 20,000,000 shares at $0.001 per share. The proceeds of $ 20,000
were received.
On March
31, 2008, total 5,200,000 shares were issued at price of $0.03 per share to 52
shareholders for $156,000. On April 28, 2008, additional 1,400,000
shares were issued to 14 shareholders and sold at price of $0.03 per
share. The proceeds of $42,000 were received. On July 20,
2008, additional 1,200,000 shares were issued to 7 shareholders for total
proceeds of $36,000.
On July
20, 2008, 139,000 shares were issued to Williams Law Group at $ 0.03 per share
for the legal service value $ 4,170.
At
December 15, 2009, additional 60,000 shares were issued to 3 shareholders at $
0.20 per share, and the total proceeds of $12,000 were
received. Therefore, as of December 31, 2009, the company has a total
of 27,999,000 shares were issued and outstanding.
All
persons acquiring shares were non U.S. citizens or residents except for Williams
Law Group.
We relied
upon Section 4(2) of the Securities Act of 1933, as amended for the above
issuances to US citizens or residents.
We
believed that Section 4(2) of the Securities Act of 1933 was available
because:
·
|
None
of these issuances involved underwriters, underwriting discounts or
commissions.
|
·
|
Restrictive
legends were and will be placed on all certificates issued as described
above.
|
·
|
The
distribution did not involve general solicitation or
advertising.
|
·
|
The
distributions were made only to investors who were sophisticated enough to
evaluate the risks of the
investment.
|
We relied
upon Regulation S of the Securities Act of 1933, as amended for the above
issuances to non US citizens or residents.
We
believed that Regulation S was available because:
·
|
None
of these issuances involved underwriters, underwriting discounts or
commissions;
|
·
|
We
placed Regulation S required restrictive legends on all certificates
issued;
|
·
|
No
offers or sales of stock under the Regulation S offering were made to
persons in the United States;
|
·
|
No
direct selling efforts of the Regulation S offering were made in the
United States.
|
44
In
connection with the above transactions, although some of the investors may have
also been accredited, we provided the following to all investors:
·
|
Access
to all our books and records.
|
·
|
Access
to all material contracts and documents relating to our
operations.
|
·
|
The
opportunity to obtain any additional information, to the extent we
possessed such information, necessary to verify the accuracy of the
information to which the investors were given
access.
|
Prospective
investors were invited to review at our offices at any reasonable hour, after
reasonable advance notice, any materials available to us concerning our
business. Prospective Investors were also invited to visit our
offices.
45
EXHIBITS
Item
3
1
|
Articles
of Incorporation of Hyperera,
Inc.
|
2
|
Bylaws
of Hyperera, Inc.
|
3
|
Organizational
Documents of Hyperera Technologies (Beijing) Co.,
Limited,
|
Item
4
1
|
Form
of common stock Certificate of Hyperera, Inc.(1)
|
Item
5
1
|
Legal
Opinion of Williams Law Group, P.A.
|
Item
10
1
|
Agreement
with Beijing Chaoran Technology Co., Ltd.
*
|
2
|
Purchase
Agreements *
|
Item
21
One
subsidiary: Hyperera Technologies (Beijing) Co.,
Limited,
Item
23
1
|
Consent
of Enterprise CPAs, Ltd. *
|
2
|
Consent
of Williams Law Group, P.A. (included in Exhibit
5.1)
|
*
filed herewith
All other
Exhibits called for by Rule 601 of Regulation SB-2 or SK are not applicable to
this filing.
(1)
Information pertaining to our common stock is contained in our Articles of
Incorporation and Bylaws.
UNDERTAKINGS
The
undersigned registrant hereby undertakes:
1.
|
To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration
statement:
|
|
i.
|
To
include any prospectus required by section
10(a)(3) of the Securities Act of
1933;
|
46
|
ii.
|
To
reflect in the prospectus any facts or events arising after the effective
date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to
Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than 20% change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the effective
registration statement.
|
|
iii.
|
To
include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material
change to such information in the registration
statement;
|
|
2.
|
That,
for the purpose of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
|
|
3.
|
To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
|
5. That,
for the purpose of determining liability under the Securities Act of 1933 to any
purchaser: Each prospectus filed pursuant to Rule 424(b) as part of a
registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectuses filed in reliance on
Rule 430A, shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness. Provided,
however, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such first use, supersede or modify any statement
that was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to such
date of first use.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to our directors, officers and controlling persons, we have been
advised that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by us of
expenses incurred or paid by a director, officer or controlling person of the
corporation 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, we will, unless in the opinion of our counsel the
matter has been settled by a controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by us is
against public policy as expressed in the Securities Act of 1933, as amended,
and will be governed by the final adjudication of such case.
47
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 Beijing China on February 11,
2010.
Hyperera, Inc.
Title
|
Name
|
Date
|
Signature
|
|||
Chairman
|
Zhi
Yong Li
|
February
11, 2010
|
/s/
Zhi Yong
Li
|
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 date
indicated.
SIGNATURE
|
NAME
|
TITLE
|
DATE
|
|||
Zhi
Yong Li
|
/s/
Zhi Yong Li
|
Chairman
of the Board/Principal Executive Officer
|
February
11, 2010
|
|||
Wei
Wu
|
/s/
Wei Wu
|
President
|
February
11, 2010
|
|||
Simon
Bai
|
/s/
Simon Bai
|
Chief
Financial Officer/Principal Accounting Officer
|
February
11, 2010
|
|||
Huitao
Zhou
|
/s/
Huitao Zhou
|
Director
|
February
11, 2010
|
|||
JianWu
Zhang
|
/s/
JianWu Zhang
|
Director
|
February
11, 2010
|
|||
Ming
Liu
|
/s/
Ming Liu
|
Director
|
February
11,
2010
|
48