Attached files
As filed with the Securities and Exchange Commission on June 19, 2013
Registration No.____________
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
GLOBAL GREEN, INC.
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(Exact name of registrant as specified in its charter)
FLORIDA 2836 20-1515998
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(State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
2820 Remington Green Circle, Tallahassee, Florida 32308 / Phone 850-597-7906
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(Address and telephone number of principal executive offices)
Dr. Mehran P. Ghazvini, President
2820 Remington Green Circle, Tallahassee, Florida 32308 / Phone 850-597-7906
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(Name, address and telephone number of agent for service)
COPIES OF ALL COMMUNICATIONS TO:
Michael A. Littman, Attorney at Law
7609 Ralston Road, Arvada, CO, 80002 phone 303-422-8127 / fax 303-431-1567
Approximate date of commencement of proposed sale to the public: As soon as
possible after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
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Large accelerated filer [___] Accelerated filer [___]
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Non-accelerated filer [___] Smaller reporting company [_X_]
(Do not check if a smaller
reporting company)
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CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED OFFERING PRICE PER SHARE AGGREGATE OFFERING REGISTRATION
PRICE(1) FEE
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Common Stock by Selling 100,000,000 0.0295 $2,950,000 $402.38
Shareholders
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(1) Estimated solely for the purpose of computing the registration fee
pursuant to Rule 457(o) under the Securities Act.
(2) The Registration Fee of $402.38 was estimated solely for the purpose
of calculating the registration fee in accordance with Rule 457(c)
under the Securities Act of 1933 ("the Securities Act") based on the
average of the 5-day average of the closing price of the common stock
on June 18, 2013 as reported on the OTC Bulletin Board. A registration
fee of $510.14 was paid in May 2013 as part of the registration of the
shares in the Post-Effective Amendment No. 2 to Registration Statement
No. 333-1748533, subsequently the shares were removed from that
Registration to be registered separately here and as such, $402.38 of
the $510.14 is applied to this filing.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
ii
(SUBJECT TO COMPLETION)
PROSPECTUS
GLOBAL GREEN, INC.
100,000,000 SHARES OF COMMON STOCK OF A SELLING SHAREHOLDER
We are registering 100,000,000 shares listed for sale on behalf of a selling
shareholder. The Company WILL NOT receive any funds from the sale of these
shares.
Our selling shareholders plan to sell common shares at $0.0295, or at such
prices as the market may dictate from time to time. Our pricing is arbitrary
with no relation to liquidation value, earnings or dividends. The price was set
at $0.0295 per share, based on a 5-day average of the closing market price of
the Company's common stock on the OTC Bulletion Board QB We have set the initial
fixed price as follows:
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TITLE PER SECURITY
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Common Stock $0.0295
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At any time our security holders may sell their securities at market prices or
at any price in privately negotiated transactions.
THIS OFFERING INVOLVES A HIGH DEGREE OF RISK; SEE "RISK FACTORS" BEGINNING ON
PAGE 5 TO READ ABOUT FACTORS YOU SHOULD CONSIDER BEFORE BUYING SHARES OF THE
COMMON STOCK.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION (THE "SEC") OR ANY STATE OR PROVINCIAL SECURITIES
COMMISSION, NOR HAS THE SEC OR ANY STATE OR PROVINCIAL SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
Our common stock is presently quoted on the OTC Bulletin Board under the symbol
"GOGC" On June 18, 2013, the five day average bid price for our common stock was
$.0295. Our common stock has a limited trading history. See "DESCRIPTION OF
COMMON STOCK--Common Stock." These prices will fluctuate based on the demand for
the shares of our common stock and other factors.
This offering will be on a delayed and continuous basis only for sales of
selling shareholders shares.
The selling shareholders are not paying any of the offering expenses and we will
not receive any of the proceeds from the sale of the shares by the selling
shareholders (See "Description of Securities - Shares").
The information in this amended prospectus is not complete and may be changed.
We may not sell these securities until the date that the registration statement
relating to these securities, which has been filed with the Securities and
Exchange Commission, becomes effective. This prospectus is not an offer to sell
these securities and it is not soliciting an offer to buy these securities in
any state where the offer or sale is not permitted.
The date of this Prospectus is June 19, 2013.
-1-
TABLE OF CONTENTS
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PART I - INFORMATION Page No.
REQUIRED IN PROSPECTUS
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ITEM 1. Front of Registration Statement and Outside Front Cover Page i
of Prospectus
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ITEM 2. Prospectus Cover Page 1
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ITEM 3. Prospectus Summary Information, Risk Factors 3
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ITEM 4. Use of Proceeds 17
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ITEM 5. Determination of Offering Price 17
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ITEM 6. Dilution 18
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ITEM 7. Selling Security Holders 19
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ITEM 8. Plan of Distribution 19
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ITEM 9. Description of Securities 20
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ITEM 10. Interest of Named Experts and Counsel 20
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ITEM 11. Information with Respect to the Registrant 20
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a. Description of Business 20
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b. Description of Property 34
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c. Legal Proceedings 35
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d. Market for Common Equity and Related Stockholder Matters 35
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e. Financial Statements 36
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f. Selected Financial Data 37
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g. Supplementary Financial Information 37
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h. Management's Discussion and Analysis of Financial Condition 37
and Results of Operations
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i. Changes In and Disagreements With Accountants on Accounting 43
and Financial Disclosure
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j. Quantitative and Qualitative Disclosures About Market Risk 43
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k. Directors and Executive Officers 43
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l. Executive and Directors Compensation 45
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m. Security Ownership of Certain Beneficial Owners and 47
Management
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n. Certain Relationships, Related Transactions, Promoters And 48
Control Persons
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ITEM 11 A. Material Changes 49
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ITEM 12. Incorporation of Certain Information by Reference 49
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ITEM 12 A. Disclosure of Commission Position on Indemnification for 49
Securities Act Liabilities
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PART II - INFORMATION NOT
REQUIRED IN PROSPECTUS
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ITEM 13. Other Expenses of Issuance and Distribution 51
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ITEM 14. Indemnification of Directors and Officers 51
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ITEM 15. Recent Sales of Unregistered Securities 52
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ITEM 16. Exhibits and Financial Statement Schedules 53
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ITEM 17. Undertakings 53
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Signatures 55
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ITEM 3. SUMMARY INFORMATION, RISK FACTORS
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OUR COMPANY
Global Green, Inc. (formerly Global Tech Assets, Inc.) ("We," "Us," "Our", "the
Company") was initially incorporated on July 12, 2004, in the state of Florida,
as a wholly-owned subsidiary, of Global Assets & Services, Inc., a public
company. The Company was transferred all of the non-operating licenses held by
Global Assets & Services, Inc. At that time, all of the outstanding stock of
Global Tech Assets, Inc., 3,141,597 shares, was distributed to the shareholders
of Global Assets & Services, Inc. In September of 2004, due to business reasons,
management ceased operational activities to further develop the licenses. During
this time, Global Assets & Services, Inc. was spun off into a separate legal
entity from Global Tech Assets, Inc. From that time to the present the business
had no viable operations. The Company's name was changed to Global Green, Inc.
on April 14, 2010 to reflect the new business model developed by management. On
November 30, 2010, the Company entered into a Share Exchange Agreement with
Nutritional Health Institute Laboratories, LLC ("NHIL"), a Florida Limited
Liability Company, and its wholly-owned subsidiary Global Green International,
Inc. ("Global Green International"), a Florida corporation. Pursuant to the
Share Exchange Agreement, NHIL transferred 100% of the issued and outstanding
common stock of Global Green International (a total 600,000,000 shares, held
solely by NHIL) to the Company in exchange for 683,097,847 shares of common
stock of Global Green, Inc. After the exchange, NHIL held 92.99% of the issued
and outstanding common stock of the Company and Global Green International
became a wholly-owned subsidiary of the Company. At June 1, 2013, NHIL holds
604,707,057 shares of common stock or 81.08% of the issued and outstanding
common stock of the Company. NHIL originally registered 66,471,705 shares (8.91%
of the issued and outstanding) of the 664,717,057 shares it held as part of the
original Registration Statement No. 333-174853. During the year ended December
31, 2012, NHIL sold 60,010,000 shares of the registered shares it holds,
decreasing its ownership to 604,707,057 shares or 81.08% of the total issued and
outstanding common stock. As part of this Registration Statement, the Company is
registering an additional 100,000,000 shares of the shares held by NHIL. Upon
the effectiveness of this Registration Statement, the Company will have
registered a total of 106,561,705 shares on behalf of NHIL (14.29% of the issued
and outstanding). At the time of this filing, NHIL has no arrangements to sell
these shares. If it sells the shares that are being registered, it will hold
498,145,352 shares of common stock (66.81% of the total issued and outstanding
common stock.)
During 2002 and 2003, Global Asset & Services, Inc. was working to develop
technology licensing agreements for such information systems, the use of an
inorganic hardening agent and its manufacturing process, a method of recovering
of polystyrene waste materials and an use of a information system for personal
computer memory cards (PCMIA Cards). Global Assets & Services, Inc. did not
pursue the development, marketing or extension of any of these potential license
agreements. Further, none of these potential license agreements have any bearing
on the Company's current business operations.
Our current Company business plan is focused on the agricultural animal
industry, more specifically, "Salmogenics," a poultry salmonella vaccine. NHIL
owns the exclusive rights to the Salmogenics Vaccine (hereinafter the "Vaccine")
and a Salmonella Antigen (hereinafter the "Antigen") which both provide a method
for controlling intestinal pathogenic organisms in animals. The Company has
received the exclusive rights to finish the final phase of USDA study,
manufacture, distribute, market and sell the vaccines by NHIL through a
Licensing Agreement with Global Green International the wholly-owned subsidiary
of Global Green, Inc. Under the Licensing Agreement with NHIL, the Company is
responsible for all financial obligations to obtain United States Department of
Agriculture ("USDA") approval. The Company is in the process of having the
Vaccine approved by the United States Department of Agriculture/Food Safety and
Inspection Service ("USDA/FSIS").
The Company focuses on the commercialization of the salmonella vaccine for
poultry industry markets. In 2008, NHIL obtained the ownership rights to the
vaccine and took over the funding of a research study that had been in process
since 1996, and initiated the drafting and filings of patent application for the
vaccine. Research was being conducted through an unrelated third party,
AHPharma, Inc. ("AHPharma."). AHPharma was informally engaged to conduct not
only research and development, but also to perform the testing of the vaccine
product in the poultry industry. On July 30, 2011, the Company entered into a
Cost and Evaluation Agreement with AHPharma. The Cost and Evaluation Agreement
provides for the responsibilities of AHPharma in connection with the Phase 4
-3-
trials and testing required by the USDA in exchange for payment a total payment
of $300,000. The Cost and Evaluation Agreement terminates upon the final
approval of the USDA.
Research focused on the development of the Salmogenics Vaccine via in ovo
injection delivery. At this time, the USDA has reviewed the results of the
research which showed the vaccine used in the study is safe, non toxic and
causes no harm to the animal, and reduced the number of salmonella contamination
as required by USDA.
The USDA has allowed the research to go to the final phase for approval by USDA
for the Company to show efficacy of the vaccine in a commercial setting with
large numbers of chickens and also to find a potential manufacturer for the
vaccine. The Company has begun the final phase and AHPharma has begun collecting
salmonella samples from multiple locations within the United States to start the
mock study that was requested by USDA. The Company at the time of this filing
has not entered into any agreement with a third party to manufacture the
vaccine.
The Company's product vaccine that is to be exclusively marketed under its
licensing arrangement with NHIL is in the last stages of USDA required testing
and depending upon the results of such testing may require additional research
and development, testing and regulatory approval.
The Company's development of its products will be subject to other risks of
failure including, among others, the possibilities that any such products will
be found to be ineffective or toxic, or otherwise fail to receive necessary
regulatory approvals; that any of the products, if safe and effective, will
prove difficult or impossible to manufacture on a large scale or will be
uneconomical to market; that the proprietary rights of third parties will
preclude the Company or its collaborators from marketing any products developed;
that the products will fail to achieve market acceptance; and that third parties
will market equivalent or superior products. As a result, there can be no
assurance that the Company or its collaborators will be able to develop,
manufacture and successfully commercialize the Company's product candidates
within a reasonable time frame or ever. Failure to develop successfully the
Company's current product candidates would materially and adversely affect the
Company's business, financial condition and results of operations.
We have no revenues at this time and anticipate that we will need additional
capital to support the execution of our business plan. Decisions regarding
future participation in acquisitions or other business development activities
will be made on a case-by-case basis.
Our Auditors have issued a going concern opinion and the reasons noted for
issuing the opinion are our lack of revenues and modest capital.
Factors that make this offering highly speculative or risky are:
o There is a limited market for our securities;
o We have no revenues or sales;
o We are a startup company;
o We have no experience in the agricultural business as a company;
o We are undercapitalized.
Our executive offices are located at 2820 Remington Green Circle, Tallahassee,
Florida 32308 and the telephone number is (850) 597-7906 and the facsimile
number is (850) 942-6620.
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SUMMARY OF FINANCIAL INFORMATION
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As at March 31, 2013
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Total Assets $269,860
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Current Liabilities $307,689
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Shareholders' Equity $(37,829)
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From July 12, 2004
to March 31, 2013
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Revenues $ -
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Accumulated net loss at December 31, 2012 ($330,860)
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As of March 31, 2012, accumulated deficit for our business was ($225,544). As of
March 31, 2013, accumulated deficit was ($330,860). We anticipate that we will
operate in a deficit position and continue to sustain net losses for the
foreseeable future.
THE OFFERING
We are registering 100,000,000 shares listed for sale on behalf of selling
shareholders.
As we are registering shares on behalf of an existing shareholder, we will not
receive funds from the sale of any shares that are sold by the selling
shareholder.
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Common shares Outstanding Before This Offering 745,761,432
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Maximum common shares being offered by a selling shareholder 100,000,000
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We are authorized to issue 3,000,000,000 shares of common stock. Our current
shareholders, officers and directors collectively own 745,761,432 shares of
restricted common stock as of June 15, 2013.
OUR COMPANY RISK FACTORS
OUR SECURITIES, AS OFFERED HEREBY, ARE HIGHLY SPECULATIVE AND SHOULD BE
PURCHASED ONLY BY PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT IN US.
EACH PROSPECTIVE INVESTOR SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS,
AS WELL AS ALL OTHER INFORMATION SET FORTH ELSEWHERE IN THIS PROSPECTUS, BEFORE
PURCHASING ANY OF THE SHARES OF OUR COMMON STOCK.
OUR BUSINESS IS A DEVELOPMENT STAGE COMPANY AND UNPROVEN AND THEREFORE RISKY.
We have only very recently adopted the business plan described herein-above.
Potential investors should be made aware of the risk and difficulties
encountered by a new enterprise in the vaccine business, especially in view of
the intense competition from existing businesses in the industry.
WE HAVE HISTORICALLY INCURRED LOSSES AND CANNOT ASSURE INVESTORS AS TO FUTURE
PROFITABILITY.
We have historically incurred losses from operations while working to obtain
USDA approval of our Salmogenics Vaccine. As of December 31, 2012, we had an
accumulative deficit of ($312,428). During the year ended December 31, 2012, we
recognized a net loss of $114,900 and used cash of $99,333 to support
operations. We are unable to market or sell our Salmogenics Vaccine until we
have obtained USDA approval. We are currently in the last stages of presenting
the data from Phase 4, the final phase of testing of the vaccine. Our ability to
be profitable in the future will depend on obtaining USDA approval and
successfully implementing our marketing and sales activities, all of which are
subject to many risks beyond our control. Even if we become profitable on an
annual basis, we cannot assure you that our profitability will be sustainable or
increase on a periodic basis.
-5-
In addition, the independent registered public accounting firm's report on the
Company's financial statements as of December 31, 2012, includes a "going
concern" explanatory paragraph, that describes substantial doubt about the
Company's ability to continue as a going concern. If we be unable to continue as
a going concern, realization of assets and settlement of liabilities in other
than the normal course of business may be at amounts significantly different
from those in the financial statements included in this registration statement.
WE HAVE A LACK OF REVENUE HISTORY AND INVESTORS CANNOT VIEW OUR PAST PERFORMANCE
SINCE WE ARE A START-UP COMPANY.
We were formed on July 12, 2004, for the purpose of engaging in any lawful
business and have adopted a plan to focus on the agriculture industry, more
specifically, "Salmogenics," a poultry salmonella vaccine. We have had no
revenues in the last five years. We have only had operational activities during
the last year. We are not profitable and the business effort is considered to be
in an early development stage. We must be regarded as a new or development
venture, and may be subject to unforeseen costs, expenses and problems, if we
are not able to successfully complete Phase 4 testing and unable to secure USDA
approval or successfully implement a marketing and sales strategy. As a
development venture we may not be able to adequately forecast and budget our
costs due to the unknown and unpredictable nature of new vaccine development,
testing, and ultimately, if approved, manufacturing. We could experience product
failures, prolonged testing reformulation and unanticipated costs and
availability of manufacturers if ultimately approved. Potential investors should
assume that any or all of these events could occur, with the result that anyone,
if significant enough could prevent the proposed business from being successful
and potential investors could lose all of their investment.
WE MAY BE UNABLE TO SUSTAIN OR INCREASE PROFITABILITY OR RAISE SUFFICIENT
ADDITIONAL CAPITAL, WHICH COULD RESULT IN A DECLINE IN OUR STOCK PRICE.
Future operating performance is never certain, and if our operating results fall
below the expectations of securities analysts or investors, the trading price of
our common stock will likely decline. We have a history of operating losses. We
have not recognized revenues from the sale of our product, as we are still in
the testing and trial stages. We expect that we will continue to incur financial
losses until we have obtained USDA approval of our product and have begun to
successfully market and sell the vaccine. We may not be able to sustain or
increase profitability on a quarterly or annual basis once we are able to begin
marketing and sale of the vaccine. Moreover, we anticipate that our operating
and capital expenditures will increase significantly in 2013 and in future years
primarily due to:
o additional spending to support the marketing and sales of vaccines;
o working capital requirements for sales of vaccines;
o growth in research and development expenses as we progress with the
final phase development of our efficacy studies;
o leasing of facilities and purchases of capital equipment;
o investment in additional marketing capacity for our products and
products in development.
Our ability to generate sufficient cash flow, or to raise sufficient capital, to
fund these operating and capital expenditures depends on our ability to improve
operating performance. This in turn depends, among other things, on finalizing
our study and getting USDA approval and finding a partner to manufacture it and
then successfully completing the product and finding a partner for marketing and
sales first in USA and then worldwide. We may not successfully develop and
commercialize these products.
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IF WE ARE UNABLE TO ATTRACT AND RETAIN KEY EMPLOYEES AND CONSULTANTS, OUR
BUSINESS COULD BE HARMED.
The success of our business depends, in large part, on our continued ability to
attract and retain highly qualified management, scientific, manufacturing and
sales and marketing personnel. Competition for personnel among companies in the
biotechnology and pharmaceutical industries is intense. We currently do not
employ any marketing or sales staff and we have not made any arrangements as to
manufacturing of our product. We cannot assure you that we will be able to
attract or retain the personnel necessary to support the growth of our business.
WE CAN GIVE NO ASSURANCE OF SUCCESS OR PROFITABILITY TO OUR INVESTORS.
There is no assurance that we will ever operate profitably. There is no
assurance that we will generate revenues or profits, or that the market price of
our common stock will be increased thereby.
OUR OFFICERS AND DIRECTORS MAY HAVE CONFLICTS OF INTEREST WHICH MAY NOT BE
RESOLVED FAVORABLY TO US.
Certain conflicts of interest may exist between us and our officers and
directors. Our Officers and Directors have other business interests to which
they devote their attention and may be expected to continue to do so although
management time should be devoted to our business. In addition, our officers and
directors are officers, directors and employees of our majority shareholder,
NHIL. Because shareholders will not be able to manage our business, they should
critically assess all of the information concerning our officers and directors.
See "Directors and Executive Officers" (page 50), and "Conflicts of Interest"
(page 51).
WE WILL NEED ADDITIONAL FINANCING FOR WHICH WE HAVE NO COMMITMENTS, AND THIS MAY
JEOPARDIZE EXECUTION OF OUR BUSINESS PLAN.
Our capital needs consist primarily of expenses related to final field testing
of the vaccine for the USDA approval general and administrative and potential
marketing expenses and could exceed $1,900,000 in the next twelve months. Such
funds are not currently committed, and we have cash as of the date of this
Registration Statement of approximately $245,000.
We have limited funds, and such funds may not be adequate to carryout the
business plan in the animal vaccine industry. Our ultimate success depends upon
our ability to raise additional capital. We will not receive any proceeds from
this Offering. We have not investigated the availability, source, or terms that
might govern the acquisition of additional capital and will not do so until it
determines a need for additional financing. If we need additional capital, we
have no assurance that funds will be available from any source or, if available,
that they can be obtained on terms acceptable to us. If not available, our
operations will be limited to those that can be financed with our modest
capital.
WE MAY IN THE FUTURE ISSUE MORE SHARES WHICH COULD CAUSE A LOSS OF CONTROL BY
OUR PRESENT MANAGEMENT AND CURRENT STOCKHOLDERS.
We may issue further shares as consideration for the cash or assets or services
out of our authorized but unissued common stock that would, upon issuance,
represent a majority of the voting power and equity of our Company. The result
of such an issuance would be those new stockholders and management would control
our Company, and persons unknown could replace our management at this time. Such
an occurrence would result in a greatly reduced percentage of ownership of our
Company by our current shareholders, which could present a risk to investors, in
that the business focus of the Company could be completely changed with no say
by current management and current shareholders.
WE ARE NOT DIVERSIFIED AND WE WILL BE DEPENDENT ON ONLY ONE BUSINESS.
Because of the limited financial resources that we have, it is unlikely that we
will be able to diversify our operations. Our probable inability to diversify
our activities into more than one area will subject us to economic fluctuations
within the animal vaccine industry. As a result we could incur continuing losses
and not be able to generate revenues or periodic increases in revenue.
-7-
THREE OF OUR OFFICERS AND DIRECTORS ARE THE MAJORITY SHAREHOLDERS OF THE
COMPANY. AS SUCH THERE IS A POSSIBILITY OF THEM CONTROLLING THE COMPANY TO THE
DETRIMENT OF OUTSIDERS.
Together, Dr. Mehran P. Ghazvini, DC, Dr. Rene M. Reed, DC and Dr. Konky
Sotomayor, DVM, through direct and indirect ownership, are majority shareholders
of Nutritional Health Institute Laboratories ("NHIL"), the majority shareholder
of our Company. As such, they will be able to control the operations and the
direction of the Company with very little outside influence.
Drs. Ghazvini, Reed and Sotomayor do not hold direct shares of common stock of
the Company. However, they are officers, directors and beneficial shareholders
of Nutritional Health Institute Laboratories and have the ability to vote the
shares of NHIL, our majority shareholder.
o Dr. Mehran P. Ghazvini, DC owns approximately 50% of NHIL, indirectly
through family trusts and has the power to vote those interests on
behalf of the trusts and disavows any ownership in the equity of NHIL
held by family trusts;
o Dr. Rene M. Reed, DC owns approximately 16.66% of NHIL, indirectly
through family trusts and has the power to vote those interests on
behalf of the trusts and disavows any ownership in the equity of NHIL
held by family trusts; and
o Dr. Konky Sotomayor, DVM owns approximately 16.66% of NHIL, indirectly
through family trusts and has the power to vote those interests on
behalf of the trusts and disavows any ownership in the equity of NHIL
held by family trusts.
As such, they are the beneficial holders of the 604,707,057 shares held by NHIL.
Through their ownership in NHIL, Drs. Ghazvini, Reed, and Sotomayor as a group,
control approximately 604,707,057 shares of common stock or approximately 81.08%
of the voting stock of the Company.
NHIL's ownership could decrease; NHIL held 66,471,705 registered shares (8.91%
of the issued and outstanding common stock.) During the fourth quarter of 2012,
NHIL sold and transferred 60,010,000 shares that it held in the Company
decreasing its ownership in the Company to 604,707,057 shares or 81.08%. As part
of this Registration Statement, we are registering 100,000,000 shares of the
shares held by NHIL.
WE WILL DEPEND UPON MANAGEMENT BUT WE WILL HAVE LIMITED PARTICIPATION OF
MANAGEMENT.
We currently have three individuals who are serving as our officers and
directors for up to 30 hours per week combined, each on a part-time basis. All
three directors, Dr. Ghazvini, DC, Dr. Reed, DC and Dr. Sotomayor, DVM are also
acting as our officers. None of the officers have an employment agreement with
the Company. We will be heavily dependent upon their skills, talents, and
abilities, as well as several consultants to us, to implement our business plan,
and may, from time to time, find that the inability of the officers and
directors to devote their full-time attention to our business results in a delay
in progress toward implementing our business plan. See "Management." Because
investors will not be able to manage our business, they should critically assess
all of the information concerning our officers and directors.
OUR OFFICERS AND DIRECTORS ARE NOT EMPLOYED FULL-TIME BY US AND MAY CAUSE
CONFLICTS OF INTERESTS AS TO CORPORATE OPPORTUNITIES WHICH WE MAY NOT BE ABLE OR
ALLOWED TO PARTICIPATE IN.
Our directors and officers are owners of our majority shareholder, NHIL. In the
future they may become, in their individual capacities, officers, directors,
controlling shareholder and/or partners of other entities engaged in a variety
of businesses. Thus, our officers and directors may have potential conflicts
including their time and efforts involved in participation with other business
entities. In some circumstances this conflict may arise between their fiduciary
duties to us and their fiduciary duties to NHIL'S business divisions. It is
possible that in this situation their judgment maybe more consistent with their
fiduciary duties to these ventures and may be detrimental to our interests.
-8-
Presently there is no requirement contained in our Articles of Incorporation,
Bylaws, or minutes which requires officers and directors of our business to
disclose to us business opportunities which come to their attention. Excluded
from this duty would be opportunities which the person learns about through his
involvement as an officer and director of another company. We have no intention
of merging with or acquiring business opportunity from any affiliate or officer
or director. (See "Conflicts of Interest" at page 51)
RISK FACTORS RELATING TO OUR COMPANY AND OUR BUSINESS
IF WE ARE UNABLE TO SELL THE VACCINE, OUR REVENUES FROM THE VACCINE WILL BE
LIMITED, WHICH COULD RESULT IN A DECLINE IN OUR STOCK PRICE.
Because we depend, and expect to continue to depend, on sales of a single
vaccine product for a substantial majority of our revenues, decreased or
lower-than-anticipated demand for the vaccine, or our inability to meet demand,
could materially adversely affect our operating results and harm our business.
Because we have not begun marketing vaccines, long-term effects of the vaccine
are largely unknown. Adverse developments regarding the long-term safety and
efficacy of the vaccines could adversely affect demand for the product, or
restrict our ability to market and sell it for its current or potential
indications. Other factors that would adversely affect sales of the vaccine
include:
o competition from existing products or development of new, superior
products;
o our ability to maintain adequate and uninterrupted sources of supply
to meet demand;
o events adversely affecting the ability of our manufacturing partners
to produce the vaccines;
o contamination of product lots or product recalls; and
o our inability to gain regulatory approval to market the vaccine.
OUR DEPENDENCE ON A SINGLE CONTRACTOR FOR TESTING POSES A RISK TO OUR BUSINESS.
We are dependent on one contactor, AHPharma, for our testing services for our
proposed vaccine products, which may be a risk to the Company's business
operations, if the services of AHPharma are not available to complete all of the
testing which may be necessary or required for USDA approval to distribute and
sell the proposed vaccine products. Our contract with AHPharma does not provide
for termination of the contract, therefore either party can terminate without
cause. While there are other potential contractors offering similar services,
such services may be unavailable due to confidentiality agreements with other
companies, full schedules or lack of immediate capacity for their services. Such
issues could cause a delay in the completing of Phase 4 testing and final
approval of the USDA and therefore delay our future operations.
OUR FINAL SAFETY FIELD TRIALS OF POTENTIAL PRODUCTS COULD BE UNSUCCESSFUL, WHICH
COULD ADVERSELY AFFECT OUR OPERATING RESULTS AND ABILITY TO OBTAIN FINAL USDA
APPROVAL.
Before obtaining final USDA approvals for the sale of any of our potential
product, we must subject these products to a regulatory safety field trial to
demonstrate the vaccine's effectiveness when applied on a large scale basis. If
the final phase is unsuccessful, we will be unable to commercialize new products
and, as a result, we may be unable to sustain the Company's growth or potential
profitability. Results of initial efficacy are not necessarily indicative of
results to be obtained from later efficacy studies and, as a result, we may
suffer significant setbacks in advanced efficacy studies. We may not complete
our clinical trials of products and the results of the trials may fail to
demonstrate the safety and effectiveness of new products to the extent necessary
to obtain regulatory approvals.
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OUR POTENTIAL PRODUCTS ARE SUBJECT TO EXTENSIVE USDA APPROVAL PROCESSES AND
ONGOING USDA SUPERVISION, WHICH CAN BE COSTLY AND TIME-CONSUMING AND SUBJECT US
TO UNANTICIPATED DELAYS OR LOST SALES.
The USDA imposes substantial requirements on our products before it permits us
to manufacture, market and sell them to the public or producer of poultry.
Compliance with these requirements is costly and time-consuming, and could delay
sales of products. To meet USDA requirements, we have spent and will continue to
spend substantial resources on lengthy and detailed laboratory tests and
efficacy studies. It typically takes many years to complete tests and trials for
a product. The actual length of time involved depends on the type, complexity
and novelty of the product. The USDA may not approve on a timely basis, if at
all, some or all of our future products or may not approve some or all of our
applications for additional indications for our previously approved products. We
are currently involved in Phase 4 testing. The requirements of Phase 4 testing
have been developed by the USDA, specifically for our product.
The Phase 4 testing involves proving the following:
1. The vaccine product must be safely commercially manufactured at a USDA
approved vaccine manufacturer.
2. That every batch of the vaccine produced during Phase 4 testing not
only meets the required standards, but does so consistently.
3. That the vaccine product can be safely applied commercially by the
potential customers.
4. That the claims made regarding the vaccine are sustainable and
reproducible when applied to larger populations.
The Company's status regarding its Phase 4 efficacy testing is:
o In the process of identifying and contracting an USDA approved vaccine
manufacturer.
o Assure that the requirements from the vaccine manufacturer will meet
the standard batch consistency as defined by the USDA.
o The conclusion of the USDA approved large bird efficacy study to be
done by AHPharma which meets the following parameters:
o That the vaccine product can be safely and standardly
commercially applied by the intended customers.
o That the claims are sustainable and reproducible when applied to
larger populations of birds.
o To see if the vaccine can be used in other circumstances such as
a combined treatment with other vaccines.
o Collect and present the data of the efficacy tests to be analyzed and
results sent to the USDA for final approval.
If we violate the requirements of Phase 4 testing as set by the USDA in this
stage, whether before or after marketing approval is obtained, we may be fined
(to be independently determined by the USDA) or forced to remove a product from
the market or may experience other adverse consequences, including delay or
increased costs, which could materially harm our financial results.
Additionally, we may not be able to obtain approval for the labeling claims
necessary or desirable for promoting our products. Even if approval is obtained,
we may be required to undertake post-marketing trials to be determined by the
USDA.
WE MAY BE REQUIRED TO PERFORM ADDITIONAL TRIALS OR CHANGE THE LABELING OF OUR
PRODUCTS IF WE OR OTHERS IDENTIFY SIDE EFFECTS AFTER OUR PRODUCTS ARE ON THE
MARKET, WHICH COULD ADVERSELY AFFECT SALES OF THE AFFECTED PRODUCTS.
If we or others identify side effects after any of our products are on the
market, or if manufacturing problems occur, regulatory approval may be withdrawn
and reformulation of our products, additional efficacy studies, additional
changes in labeling of our products and changes to or re-approvals of our
manufacturing facilities may be required, any of which could have a material
adverse effect on sales of the affected products and on our business and results
of operations.
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THERE ARE OTHER PRODUCTS IN LATE-STAGE DEVELOPMENT THAT ARE TARGETING
SALMONELLA. DEPENDING ON THE MARKET ACCEPTANCE OF THESE PRODUCTS OR POTENTIAL
PRODUCTS, OUR SALES OF THE VACCINE COULD BE ADVERSELY AFFECTED.
A number of our competitors have substantially more capital, research and
development, regulatory, manufacturing, marketing, human and other resources and
experience than we have. Furthermore, large pharmaceutical companies recently
have been consolidating, which has increased their resources and concentrated
valuable intellectual property assets. As a result, our competitors may:
o develop products that are more effective or less costly than any of
our current or future products or that render our products obsolete;
o produce and market their products more successfully than we do;
o establish superior proprietary positions; or
o obtain USDA approval for labeling claims that are more favorable than
those for our products.
The poultry vaccine business is especially competitive and dominated by a few
large companies with an established global presence. In order for us to expand
our sales of the vaccine, our product must be commercially accepted worldwide
and compete effectively against the vaccines of these other companies. Our
inability to compete successfully in the poultry vaccine sector could materially
adversely affect our revenue growth.
WE MAY BE REQUIRED TO DEFEND LAWSUITS OR PAY DAMAGES FOR PRODUCT LIABILITY
CLAIMS.
Product liability is a major risk in testing and marketing biotechnology and
pharmaceutical products. We could face substantial product liability and for
products that we sell after regulatory approval. Product liability claims,
regardless of their merits, could be costly and divert management's attention or
adversely affect our reputation and the demand for our product. We do not
maintain product liability insurance coverage. In the future, insurers may not
offer us product liability insurance, may raise the price of this insurance or
may limit the coverage.
We currently do not carry product liability insurance, though our License
Agreement with NHIL provides that we will maintain product liability. Currently,
NHIL has agreed that we do not have to provide product liability insurance until
we have completed Phase 4 testing and received USDA approval.
OUR FUTURE GROWTH DEPENDS ON THE DEVELOPMENT AND MARKET ACCEPTANCE OF OUR
CURRENT VACCINE PRODUCT.
There is no guarantee that our products will be successfully developed and
marketed. In addition, we have not cleared the regulatory approval process for
our product, and we cannot assure you that final regulatory approval will be
obtained. Any delay in our final development of these products may materially
adversely affect our revenue growth. Because of a number of factors, our product
may not reach the market without lengthy delays, if at all. Some of the factors
that may affect our development and marketing of new products include the
following:
o potential products may require collaborative partners and we may be
unable to identify partners or enter into arrangements on terms
acceptable to us;
o we may not be able to produce or contract for the manufacture of new
products at a cost or in quality or quantities necessary to make them
commercially viable;
o domestic and international regulatory approval of these products may
not be obtained or may be obtained only with lengthy delays;
o we may not be able to secure additional financing that may be needed
to bring a potential product to market;
o we may experience unexpected safety, regulatory or efficacy concerns
with respect to marketed products, whether or not scientifically
justified, leading to adverse public reaction, product recalls,
withdrawals or declining sales; and
-11-
o we may be unable to accurately predict market requirements and
evolving standards.
IF NHIL LOSES THE PROTECTION OF ITS PATENTS AND PROPRIETARY RIGHTS, OUR
FINANCIAL RESULTS COULD SUFFER.
Importance and Limitations of Patent and Proprietary Rights Protections
Some of our products and processes used to produce our products involve
proprietary rights, including patents, which are held by our parent NHIL. Our
competitors or potential competitors may have filed for or received United
States and foreign patents and may obtain additional patents and proprietary
rights relating to animal vaccines uses and/or processes which may compete with
our existing products and our products under development. We cannot be sure that
others will not obtain patents of different technology that we would need to
license or circumvent in order to practice our inventions. Even though we strive
to take appropriate action to protect our intellectual property, there is a risk
that competitive systems currently being developed and marketed could gain
acceptance in the United States or elsewhere.
We and NHIL believe that patent protection of materials or processes we develop
and any products that may result from the research and development efforts of
our licensors and us are important to the commercial success of our products.
The loss of the protection of these patents and proprietary rights could
materially adversely affect our business and our competitive position in the
market. The patent position of companies such as ours generally is highly
uncertain and involves complex legal and factual questions. Some of the reasons
for this uncertainty include the following:
o To date, no consistent regulatory policy has emerged regarding the
breadth of claims allowed in biotechnology patents. Consequently,
there can be no assurance that future patent applications relating to
our products or technology will result in patents being issued or
that, if issued, the patents will afford protection against
competitors with similar technology;
o The License Agreement between us and NHIL may be immediately
terminated upon the occurrence of a default by us in performing our
responsibilities under the License Agreement;
o Companies that obtain patents claiming products or processes that are
necessary for or useful to the development of our vaccine could bring
legal actions against us claiming infringement (though we currently
are not the subject of any patent infringement claim);
o Issuance of a valid patent does not prevent other companies from using
alternative, non-infringing technology, so we cannot be sure that any
of our patents (or patents issued to others and licensed to us) will
provide significant commercial protection;
o We may not have the financial resources necessary to obtain patent
protection in some countries or to enforce any patent rights we may
hold;
o The laws of some foreign countries may not protect proprietary rights
to the same extent as the laws of the United States, and many
companies have encountered significant problems in protecting their
proprietary rights in these foreign countries; and
o We may be required to obtain licenses from others to develop,
manufacture or market our products. We may not be able to obtain these
licenses on commercially reasonable terms, and we cannot be sure that
the patents underlying the licenses will be valid and enforceable.
We and NHIL attempt to protect our proprietary materials and processes by
relying on trade secret laws and non-disclosure and confidentiality agreements
with our future employees and other persons (i.e. future manufacturers) with
access to our proprietary materials or processes or who will have licensing
agreements with us. We plan to continue to use these protections in the future,
but we cannot be sure that these agreements will not be breached or that we
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would have adequate remedies for any breach. Even with these protections, others
may independently develop or obtain access to these materials or processes,
which may materially adversely affect our competitive position.
If we are sued for infringing the patent or other proprietary rights of a third
party, we could incur substantial costs and diversion of management and
technical personnel, whether or not the litigation is ultimately determined in
our favor.
WE WILL RELY UPON CONTRACT MANUFACTURERS TO MANUFACTURE OUR PRODUCT, WHICH COULD
EFFECT OUR ABILITY TO SELL OUR PRODUCT AND TO OPERATE PROFITABLY.
We currently do not have facilities for the production of our vaccine products.
Therefore, we will rely principally upon relationships with contract
manufacturers. At this time we have not identified or entered into an agreement
with any to manufacture our product. There can be no assurance that we can
maintain manufacture and supply agreements on terms and at costs acceptable to
us. There are a number of risks that will be associated with our dependence on
contract manufacturers, including:
o reduced control over delivery schedules;
o potential inability to monitor and maintain inventory levels;
o reduced control over quality assurance;
o reduced control over manufacturing yields and costs;
o potential lack of adequate capacity during periods of unanticipated
demand;
o limited warranties on products supplied to us;
o increases in prices at a higher rate than our ability to recover our
increased costs through contractual price adjustments with customers;
o reduced control over regulatory efforts;
o potential misappropriation of our intellectual property;
o catastrophic loss of production capacity due to property damage,
either man made or by nature;
o the loss of these contract manufacturers due to financial
circumstances in their respective businesses or their exit from the
business lines that manufacture our devices and products; and
o minimum purchase requirements, which could result in excessive
inventories if the demand for products falls short of such minimum
purchase requirements.
If our contract manufacturers were to fail to provide us with an adequate supply
of vaccine products, our business would be harmed.
POULTRY HEALTH AND DISEASE FACTORS AFFECTING OUR CUSTOMERS MAY ADVERSELY AFFECT
OUR FINANCIAL RESULTS.
Any widespread poultry health problem or disease outbreak, such as avian
influenza in poultry, could have a negative impact on global poultry production.
Our revenues and earnings derived from both the U.S. and international poultry
industry could be materially and adversely affected. In addition, the emergence
of new disease variants, serotypes and strains in the domestic and/or global
markets may reduce the efficacy of our vaccine products and result in reduced
revenues and earnings.
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WE MAY BE UNABLE TO HIRE AND RETAIN INDEPENDENT DISTRIBUTORS.
Our future success depends on our ability to attract qualified independent
distributors for the vaccine products. We may be unable to attract or retain
these independent distributors. If we fail to attract or retain independent
distributors, or fail to find end users for the vaccine products, we may be
unable to successfully bring the vaccine products to the marketplace and to
generate sufficient revenues to offset operating costs.
IN THE FUTURE WE MAY BE IN COMPETITION WITH OUR MAJORITY SHAREHOLDER, NHIL.
At this time, the Company has an exclusive license from NHIL, our majority
shareholder. We may be dependent on NHIL for support of certain of our
technologies and we may have to rely on NHIL for development of any future
products. Future product candidates of the Company, as we begin to pursue our
business strategy, we may be subject to competition with potential products
under development by NHIL.
As our officers and directors are officers, directors and shareholders of NHIL
we cannot provide any assurances that any conflicts that may arise out of such
competition would be resolved in a way favorable to the Company.
WE HAVE AGREED TO INDEMNIFICATION OF OFFICERS AND DIRECTORS AS IS PROVIDED BY
FLORIDA STATUTE.
Florida Statutes provide for the indemnification of our directors, officers,
employees, and agents, under certain circumstances, against attorney's fees and
other expenses incurred by them in any litigation to which they become a party
arising from their association with or on activities our behalf. We will also
bear the expenses of such litigation for any of our directors, officers,
employees, or agents, upon such person's promise to repay us therefore if it is
ultimately determined that any such person shall not have been entitled to
indemnification. This indemnification policy could result in substantial
expenditures by us that we will be unable to recoup.
THREE OF OUR OFFICERS AND DIRECTORS ARE THE MAJORITY SHAREHOLDERS OF THE
COMPANY. AS SUCH THERE IS A POSSIBILITY OF THEM CONTROLLING THE COMPANY TO THE
DETRIMENT OF OUTSIDERS.
Together, Dr. Mehran P. Ghazvini, DC, Dr. Rene M. Reed, DC and Dr. Konky
Sotomayor, DVM, through direct and indirect ownership, are majority shareholders
of Nutritional Health Institute Laboratories ("NHIL"), the majority shareholder
of our Company. As such, they will be able to control the operations and the
direction of the Company with very little outside influence.
Drs. Ghazvini, Reed and Sotomayor do not hold direct shares of common stock of
the Company. However, they are officers, directors and beneficial shareholders
of Nutritional Health Institute Laboratories and have the ability to vote the
shares of NHIL, our majority shareholder.
o Dr. Mehran P. Ghazvini, DC owns approximately 50% of NHIL, indirectly
through family trusts and has the power to vote those interests on
behalf of the trusts and disavows any ownership in the equity of NHIL
held by family trusts;
o Dr. Rene M. Reed, DC owns approximately 16.66% of NHIL, indirectly
through family trusts and has the power to vote those interests on
behalf of the trusts and disavows any ownership in the equity of NHIL
held by family trusts; and
o Dr. Konky Sotomayor, DVM owns approximately 16.66% of NHIL, indirectly
through family trusts and has the power to vote those interests on
behalf of the trusts and disavows any ownership in the equity of NHIL
held by family trusts.
As such, they are the beneficial holders of the 604,707,057 shares held by NHIL.
Through their ownership in NHIL, Drs. Ghazvini, Reed, and Sotomayor as a group,
control approximately 604,707,057 shares of common stock or approximately 81.08%
of the voting stock of the Company.
NHIL's ownership could decrease; NHIL held 66,471,705 registered shares (8.91%
of the issued and outstanding common stock.) During the fourth quarter of 2012,
NHIL sold and transferred 60,010,000 shares that it held in the Company
decreasing its ownership in the Company to 604,707,057 shares or 81.08%. As part
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of this Registration Statement, we are registering 100,000,000 shares of the
shares held by NHIL for a total of 106,461,705 registered shares.
WE MAY DEPEND UPON OUTSIDE ADVISORS, WHO MAY NOT BE AVAILABLE ON REASONABLE
TERMS AND AS NEEDED.
To supplement the business experience of our officers and directors, we may be
required to employ accountants, technical experts, appraisers, attorneys, or
other consultants or advisors. Our Board without any input from stockholders
will make the selection of any such advisors. Furthermore, we anticipate that
such persons will be engaged on an "as needed" basis without a continuing
fiduciary or other obligation to us. In the event we consider it necessary to
hire outside advisors, we may elect to hire persons who are affiliates, if they
are able to provide the required services.
RISK FACTORS RELATED TO OUR STOCK
WE HAVE DETERMINED AN ARBITRARY OFFERING PRICE OF OUR SHARES.
The price of our shares has been determined arbitrarily by us with no
established criteria of value. There is no direct relationship between these
prices and our assets, book value, lack of earnings, shareholder's equity, or
any other recognized standard of value of our business.
THE REGULATION OF PENNY STOCKS BY SEC AND FINRA MAY DISCOURAGE THE TRADABILITY
OF OUR SECURITIES.
We are a "penny stock" company. None of our securities currently trade in any
market and, if ever available for trading, will be subject to a Securities and
Exchange Commission rule that imposes special sales practice requirements upon
broker-dealers who sell such securities to persons other than established
customers or accredited investors. For purposes of the rule, the phrase
"accredited investors" means, in general terms, institutions with assets in
excess of $5,000,000, or individuals having a net worth in excess of $1,000,000
or having an annual income that exceeds $200,000 (or that, when combined with a
spouse's income, exceeds $300,000). For transactions covered by the rule, the
broker-dealer must make a special suitability determination for the purchaser
and receive the purchaser's written agreement to the transaction prior to the
sale. Effectively, this discourages broker-dealers from executing trades in
penny stocks. Consequently, the rule will affect the ability of purchasers in
this offering to sell their securities in any market that might develop
therefore because it imposes additional regulatory burdens on penny stock
transactions.
In addition, the Securities and Exchange Commission has adopted a number of
rules to regulate "penny stocks". Such rules include Rules 3a51-1, 15g-1, 15g-2,
15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities and Exchange
Act of 1934, as amended. Because our securities constitute "penny stocks" within
the meaning of the rules, the rules would apply to us and to our securities. The
rules will further affect the ability of owners of shares to sell our securities
in any market that might develop for them because it imposes additional
regulatory burdens on penny stock transactions.
Shareholders should be aware that, according to Securities and Exchange
Commission, the market for penny stocks has suffered in recent years from
patterns of fraud and abuse. Such patterns include (i) control of the market for
the security by one or a few broker-dealers that are often related to the
promoter or issuer; (ii) manipulation of prices through prearranged matching of
purchases and sales and false and misleading press releases; (iii) "boiler room"
practices involving high-pressure sales tactics and unrealistic price
projections by inexperienced sales persons; (iv) excessive and undisclosed
bid-ask differentials and markups by selling broker-dealers; and (v) the
wholesale dumping of the same securities by promoters and broker-dealers after
prices have been manipulated to a desired consequent investor losses. Our
management is aware of the abuses that have occurred historically in the penny
stock market. Although we do not expect to be in a position to dictate the
behavior of the market or of broker-dealers who participate in the market,
management will strive within the confines of practical limitations to prevent
the described patterns from being established with respect to our securities.
Inventory in penny stocks have limited remedies in the event of violations of
penny stock rules. While the courts are always available to seek remedies for
fraud against the Company, most, if not all, brokerages require their customers
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to sign mandatory arbitration agreements in conjunctions with opening trading
accounts. Such arbitration may be through an independent arbiter. Investors may
file a complaint with FINRA against the broker allegedly at fault, and FINRA may
be the arbiter, under FINRA rules. Arbitration rules generally limit discovery
and provide more expedient adjudication, but also provide limited remedies in
damages usually only the actual economic loss in the account. Investors should
understand that if a fraud case is filed a against a company in the courts it
may be vigorously defended and may take years and great legal expenses and costs
to pursue, which may not be economically feasible for small investors.
That absent arbitration agreements, specific legal remedies available to
investors of penny stocks include the following:
o If a penny stock is sold to the investor in violation of the
requirements listed above, or other federal or states securities laws,
the investor may be able to cancel the purchase and receive a refund
of the investment.
o If a penny stock is sold to the investor in a fraudulent manner, the
investor may be able to sue the persons and firms that committed the
fraud for damages.
The fact that we are a penny stock company will cause many brokers to refuse to
handle transactions in the stocks, and may discourage trading activity and
volume, or result in wide disparities between bid and ask prices. These may
cause investors significant illiquidity of the stock at a price at which they
may wish to sell or in the opportunity to complete a sale. Investors will have
no effective legal remedies for these illiquidity issues.
WE WILL PAY NO FORESEEABLE DIVIDENDS IN THE FUTURE.
We have not paid dividends on our common stock and do not ever anticipate paying
such dividends in the foreseeable future. Investors whose investment criteria is
dependent on dividends should not invest in our common stock.
OUR COMMON STOCK HAS ONLY RECENTLY BEEN LISTED FOR TRADING ON THE OVER THE
COUNTER MARKET, AS A RESULT OUR STOCK MAY BE THINLY TRADED AND AS A RESULT YOU
MAY BE UNABLE TO SELL AT OR NEAR ASK PRICES OR AT ALL IF YOU NEED TO LIQUIDATE
YOUR SHARES
We have only been listed for trading on the Over The Counter Market since March
2012. As a result there is a limited trading market for our common stock.
The shares of our common stock, may be thinly-traded on the Over The Counter
Market, meaning that the number of persons interested in purchasing our common
shares at or near ask prices at any given time may be relatively small or
non-existent. This situation is attributable to a number of factors, including
the fact that we are a small company which is relatively unknown to stock
analysts, stock brokers, institutional investors and others in the investment
community that generate or influence sales volume, and that even if we came to
the attention of such persons, they tend to be risk-averse and would be
reluctant to follow an unproven, early stage company such as ours or purchase or
recommend the purchase of any of our Securities until such time as we became
more seasoned and viable. As a consequence, there may be periods of several days
or more when trading activity in our Securities is minimal or non-existent, as
compared to a seasoned issuer which has a large and steady volume of trading
activity that will generally support continuous sales without an adverse effect
on Securities price. We cannot give you any assurance that a broader or more
active public trading market for our common Securities will develop or be
sustained, or that any trading levels will be sustained. Due to these
conditions, we can give investors no assurance that they will be able to sell
their shares at or near ask prices or at all if they need money or otherwise
desire to liquidate their securities of our Company.
Because of the limited trading market expected to develop for our common stock
and because of the possible price volatility, you may not be able to sell your
shares of common stock when you desire to do so. The inability to sell your
securities in a rapidly declining market may substantially increase your risk of
loss because of such illiquidity and because the price for our securities may
suffer greater declines because of our price volatility.
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Additionally, in recent years the stock market in general, and the
over-the-counter markets in particular, have experienced extreme price and
volume fluctuations. In some cases, these fluctuations are unrelated or
disproportionate to the operating performance of the underlying company. These
market and industry factors may materially and adversely affect our stock price,
regardless of our operating performance. In the past, class action litigation
often has been brought against companies following periods of volatility in the
market price of those companies common stock. If we become involved in this type
of litigation in the future, it could result in substantial costs and diversion
of management attention and resources, which could have a further negative
effect on your investment in our stock.
MANY OF OUR SHARES OF COMMON STOCK WILL IN THE FUTURE BE AVAILABLE FOR RESALE.
ANY SALES OF OUR COMMON STOCK, IF IN SIGNIFICANT AMOUNTS, ARE LIKELY TO DEPRESS
THE MARKET PRICE OF OUR SECURITIES.
Assuming all of the shares of common stock we are offering under this
Registration Statement and the shares registered under Post-Effective Amendment
to Registration Statement No. 333-174853 are sold and all of the shares of
common stock held by the selling security holders registered hereby are sold, we
would have 247,516,080 shares that are freely tradable.
Unrestricted sales of 247,516,080 shares of stock by our selling stockholders
could have a huge negative impact on our share price, and the market for our
shares.
WE BECAME A REPORTING COMPANY UPON THE EFFECTIVENESS OF THIS REGISTRATION
STATEMENT.
We became subject to the reporting requirements under the Securities and
Exchange Act of 1934, Section 13a, after the effectiveness of this offering,
pursuant to Section 15d of the Securities Act and we intend to be registered
under Section 12(g). As a result, shareholders will have access to the
information required to be reported by publicly held companies under the
Exchange Act and the regulations thereunder. As a result, we will be subject to
legal and accounting expenses that private companies are not subject to and this
could affect our ability to generate operating income.
ITEM 4. USE OF PROCEEDS
-----------------------
We will not receive any proceeds from the sale of the shares being registered on
behalf of our selling shareholders.
At a time when market conditions have improved, we may raise additional funds
through a private placement of shares of our common stock. At this time there is
no committed source for such funds and we cannot give any assurances of being
able to raise such funds. We can assure that we will require additional funds to
carry out our business plan. The availability and terms of any future financing
will depend on market and other conditions.
Our lack of funds could and would severely limit our operations, and might
render us unable to carry out our business plan with resulting business failure.
ITEM 5. DETERMINATION OF OFFERING PRICE
---------------------------------------
Our Common Stock is presently thinly traded on the over-the-counter market
maintained by the Financial Industry Regulatory Authority (the "FINRA"). The
trading symbol for the Common Stock is "GOGC". The Company's stock began trading
on the Over the Counter Market in March 2012.
Our selling shareholder plans to sell shares at $0.0295 per share and thereafter
at such prices as the market may dictate from time to time. There is a limited
market for the stock and our pricing is arbitrary with no relation to
liquidation value, earnings or dividends. We will not receive any proceeds from
the sale of our stock by our selling shareholder.
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TITLE PER SECURITY
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Common Stock $0.0295
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We have arbitrarily determined our offering price for shares to be sold pursuant
to this Registration Statement at $0.0295. The Company is authorized to issue
3,000,000,000 shares of $0.00001 par value voting common stock.
There were a total of 731,372,217 shares of common stock issued during the year
ended December 31, 2010. Of which, 20,000,000 shares were issued at $0.00001 per
share (par value) as compensation to existing shareholders for their services.
During the year ended December 31, 2011, the Company sold 11,247,618 shares of
common stock as part of a private placement at approximately $0.025 per share.
The additional major factors that were included in determining the initial sales
price to our founders and private investors were the lack of liquidity since
there was no present market for our stock and the high level of risk considering
our lack of operating history.
The share price bears no relationship to any criteria of goodwill value, asset
value, market price or any other measure of value and were arbitrarily
determined in the judgment of our Board of Directors.
ITEM 6. DILUTION
----------------
We are registering 100,000,000 shares of our outstanding common stock held by
our controlling shareholder NHIL. Since our inception on July 12, 2004, our
original officers and directors were issued 3,141,597 shares at $0.0001 (par
value) per share. A total of 28,274,370 shares were issued to existing
shareholders during the year ended December 31, 2010 as part of a 10 for 1
forward stock split. In addition, during the year ended December 31, 2010,
683,097,847 shares of common stock were issued at $0.00001, par value as part of
the acquisition of Global Green International, Inc. During the year ended
December 31, 2010, 20,000,000 shares of common stock were issued to existing
shareholders for services at $0.00001 par value. During the year ended December
31, 2011, 11,247,618 shares of common stock were issued for $286,000 in cash to
support operations. During the year ended December 31, 2012, we did not issue
any shares of our common stock.
COMPARATIVE DATA
The following table sets forth with respect to existing shareholders and new
investors, a comparison of the number of our shares of common stock purchased
the percentage ownership of such shares, the total consideration paid, the
percentage of total consideration paid and the average price per share. All
percentages are computed based upon cumulative shares and consideration assuming
sale of all shares in the line item as compared to maximum in each previous
line.
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
NUMBER PERCENT AMOUNT PERCENT (2) PRICE/SHARE
(1)
------------------------------------------------------
Existing Shareholders (3) 147,516,080 100% 1,275 100% $0.00001
Existing Shareholders (4) 100,000,000 100% 1,000 100% $0.00001
--------------------------------------------------------------------------------
247,516,080 100% 2,275 100% $0.00001
(1) Percentage relates to total percentage of shares sold up to such
increment in the offering.
(2) Percentage relates to total percentage of capital raised post
offering.
(3) Relates to the total numbers of shares sold in the offering registered
in Registration Statement No. 333-174853.
(4) Relates to the shares being registered as a part of this Registration
Statement.
"Net tangible book value" is the amount that results from subtracting the total
liabilities and intangible assets from the total assets of an entity. Dilution
occurs because we determined the offering price based on factors other than
those used in computing book value of our stock. Dilution exists because the
book value of shares held by existing stockholders is lower than the offering
price offered to new investors.
As at December 31, 2012 and 2011, the net tangible book value of our stock was
less than ($0.0001) per share.
-18-
ITEM 7. SELLING SECURITY HOLDERS
--------------------------------
Our majority shareholder, NHIL, received their 683,097,847 shares as part of the
Share Exchange Agreement with the Company.
We are authorized to issue 3,000,000,000 shares of $.00001 voting common stock.
During the year ended December 31, 2012, the Company did not issue any shares of
its common stock. At December 31, 2012, there was a total of 745,761,432 shares
issued and outstanding. During the year ended December 31, 2011 there was a
total of 11,247,618 shares of common stock issued and a total of 731,372,217
shares of common stock issued during the year ended December 31, 2010.
Other than the stock transactions discussed above, we have not entered into any
transaction nor are there any proposed transactions in which any founder,
director, executive officer, significant shareholder of our Company or any
member of the immediate family of any of the foregoing had or is to have a
direct or indirect material interest.
No person who may, in the future, be considered a promoter of this offering,
will receive or expect to receive assets, services or other considerations from
us except those persons who are our salaried employees or directors. No assets
will be, nor expected to be, acquired from any promoter on behalf of us. We have
not entered into any agreements that require disclosure to the shareholders.
All of the securities listed below are being registered in this Registration
Statement. The Percentage Ownership After Offering column assumes that the
selling shareholder is able to sell their shares after the effectiveness of this
Registration Statement.
------------------------------------------ ------------------------- ------------------------- --------------- --------------
SHARE COMMON SHARES PERCENTAGE PERCENTAGE
OWNERSHIP OFFERED FOR OWNERSHIP OWNERSHIP
REGISTERED HOLDER'S NAME BEFORE SHAREHOLDERS BEFORE AFTER
(BENEFICIAL OWNER'S NAME) OFFERING ACCOUNT OFFERING OFFERING
------------------------------------------ ------------------------- ------------------------- --------------- --------------
NUTRITIONAL HEALTH (1)(2) 604,707,057 100,000,000 81.08% 66.81%(3)
------------------------------------------ ------------------------- ------------------------- --------------- --------------
TOTAL SHARES 604,707,057 100,000,000 81.08% 66.81%
------------------------------------------ ------------------------- ------------------------- --------------- --------------
MATERIAL RELATIONSHIPS
(1) Beneficially Drs. Ghazvini, Reed and Sotomayor as Officers and
Directors of both NHIL and Global Green, Inc.
(2) As of this filing, NHIL holds a total of 604,707,057 shares, of which
5,990,000 shares are held beneficially by CEDE & Co and 598,717,057
shares are held directly by NHIL. Of the 604,707,057 shares, 6,461,705
shares were registered as a part of Registration Statement No.
333-174853.
(3) As part of Registration Statement No. 333-174853, 6,461,705 shares
held by NHIL were registered, the percentage of ownership after the
offering assumes the sale of these shares and the 100,000,000 shares
being registered herewith.
None of the above listed shareholders are registered broker-dealers or are
associates of a registered broker-dealer. None of the above listed shareholders
are affiliates of any registered broker-dealers.
ITEM 8. PLAN OF DISTRIBUTION
-----------------------------
After effectiveness of this Registration Statement, at any time, our selling
shareholder may sell their securities at market prices or at any price in
privately negotiated transactions.
The prices for sale of shares were arbitrarily set at $0.0295 per share, and
bear no relationship to any quantification of value.
Our selling shareholder may be deemed underwriters in this offering.
-19-
Any funds from sale of shares from the company not immediately used for
corporate purposes will be deposited into an interest bearing account in our
name, and interest accrued on such funds will be retained by us.
ITEM 9. DESCRIPTION OF SECURITIES
---------------------------------
The securities being registered and/or offered by this Prospectus are shares.
COMMON STOCK
We are presently authorized to issue three billion (3,000,000,000) shares of our
$0.00001 par value common stock. A total of seven hundred and forty-five
million, seven hundred and sixty-one thousand, four hundred and thirty-two
(745,761,432) common shares are issued and outstanding as of June 15, 2013.
All shares are equal to each other with respect to voting, liquidation, and
dividend rights. Special shareholders' meetings may be called by the officers or
director, or upon the request of holders of at least one-tenth (1/10th) of the
outstanding shares. Holders of shares are entitled to one vote at any
shareholders' meeting for each share they own as of the record date fixed by the
board of directors. There is no quorum requirement for shareholders' meetings.
Therefore, a vote of the majority of the shares represented at a meeting will
govern even if this is substantially less than a majority of the shares
outstanding. Holders of shares are entitled to receive such dividends as may be
declared by the board of directors out of funds legally available therefore, and
upon liquidation are entitled to participate pro rata in a distribution of
assets available for such a distribution to shareholders. There are no
conversion, pre-emptive or other subscription rights or privileges with respect
to any shares. Reference is made to our Articles of Incorporation and our
By-Laws as well as to the applicable statutes of the State of Florida for a more
complete description of the rights and liabilities of holders of shares. It
should be noted that the board of directors without notice to the shareholders
may amend the By-Laws. Our shares do not have cumulative voting rights, which
means that the holders of more than fifty percent (50%) of the shares voting for
election of directors may elect all the directors if they choose to do so. In
such event, the holders of the remaining shares aggregating less than fifty
percent (50%) of the shares voting for election of directors may not be able to
elect any director.
PREFERRED SHARES
We are presently authorized to issue one hundred million (100,000,000) Shares of
Class "A" Preferred Stock, no par value per share. As of June 15, 2013, we had
no shares of Preferred Stock issued and outstanding.
TRANSFER AGENT
The transfer agent for our securities is ClearTrust, LLC, of 16540 Pointe
Village Drive, Suite #201, Lutz, Florida 33558.
ITEM 10. INTEREST OF NAMED EXPERTS AND COUNSEL
-----------------------------------------------
We have not hired or retained any experts or counsel on a contingent basis, who
would receive a direct or indirect interest in us, or who is, or was, our
promoter, underwriter, voting trustee, director, officer or employee.
ITEM 11. INFORMATION WITH RESPECT TO THE REGISTRANT
---------------------------------------------------
A. DESCRIPTION OF BUSINESS
HISTORY OF GLOBAL GREEN, INC.
Global Green, Inc. (formerly Global Tech Assets, Inc.) ("We," "Us," "Our", "the
Company") was initially incorporated on July 12, 2004, in the state of Florida,
as a wholly-owned subsidiary, of Global Assets & Services, Inc., a public
company. The Company was transferred all of the non-operating licenses held by
Global Assets & Services, Inc. At that time, all of the outstanding stock of
Global Tech Assets, Inc., 3,141,597 shares, was distributed to the shareholders
of Global Assets & Services, Inc. In September of 2004, due to business reasons,
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management ceased operational activities to further develop the licenses. During
this time, Global Assets & Services, Inc. was spun off into a separate legal
entity from Global Tech Assets, Inc. From that time to the present the business
had no viable operations. The Company's name was changed to Global Green, Inc.
on April 14, 2010 to reflect the new business model developed by management. On
November 30, 2010, the Company entered into a Share Exchange Agreement with
Nutritional Health Institute Laboratories, LLC ("NHIL"), a Florida Limited
Liability Company, and its wholly-owned subsidiary Global Green International,
Inc. ("Global Green International"), a Florida corporation. Pursuant to the
Share Exchange Agreement, NHIL transferred 100% of the issued and outstanding
common stock of Global Green International (a total 600,000,000 shares, held
solely by NHIL) to the Company in exchange for 683,097,847 shares of common
stock of Global Green, Inc. After the exchange, NHIL held 92.99% of the issued
and outstanding common stock of the Company and Global Green International
became a wholly-owned subsidiary of the Company. At June 1, 2013, NHIL holds
604,707,057 shares of common stock or 81.08% of the issued and outstanding
common stock of the Company. NHIL originally registered 66,471,705 shares (8.91%
of the issued and outstanding) of the 664,717,057 shares it holds as part of the
original Registration Statement No. 333-174853. During the year ended December
31, 2012, NHIL sold 60,010,000 shares of the registered shares it holds,
decreasing its ownership to 604,707,057 shares or 81.08% of the total issued and
outstanding common stock. As part of this Registration Statement, the Company is
registering an additional 100,000,000 shares of the shares held by NHIL. Upon
the effectiveness of this Registration Statement, the Company will have
registered a total of 106,561,705 shares on behalf of NHIL (14.29% of the issued
and outstanding). At the time of this filing, NHIL has no arrangements to sell
these shares. If it sells the shares that are being registered, it will hold
498,245,352 shares of common stock (66.81% of the total issued and outstanding
common stock.)
During 2002 and 2003, Global Asset & Services, Inc. was working to develop
technology licensing agreements for such information systems, the use of an
inorganic hardening agent and its manufacturing process, a method of recovering
of polystyrene waste materials and a use of a information system for personal
computer memory cards (PCMIA Cards). Global Assets & Services, Inc. did not
pursue the development, marketing or extension of any of these potential license
agreements. Further, none of these potential license agreements have any bearing
on the Company's current business operations.
Our current business plan is focused on the agricultural animal industry, more
specifically, "Salmogenics," a poultry salmonella vaccine. NHIL owns the
exclusive rights to the Salmogenics Vaccine (hereinafter the "Vaccine") and a
Salmonella Antigen (hereinafter the "Antigen") which both provide a method for
controlling intestinal pathogenic organisms in animals. The Company has received
the exclusive rights to finish the final phase of study, manufacture,
distribute, market and sell the vaccines by NHIL through a Licensing Agreement
with Global Green International, the wholly-owned subsidiary of the Company.
Under the Licensing Agreement with NHIL, the Company is responsible for all
financial obligations to obtain United States Department of Agriculture ("USDA")
approval. The Company is in the process of having the Vaccine and Antigen
approved by the United States Department of Agriculture/Food Safety and
Inspection Service ("USDA/FSIS").
The Company focuses on the commercialization of the salmonella vaccine for
poultry industry markets. In 2008, NHIL obtained the ownership rights to the
vaccine and took over the funding of a research study that had been in process
since 1996, and initiated the drafting and filings of patent application for the
vaccine. Research was being conducted through an unrelated third party,
AHPharma. AHPharma was informally engaged to conduct not only research and
development, but also to perform the testing of the vaccine product in the
poultry industry. On July 30, 2011, the Company entered into a Cost and
Evaluation Agreement with AHPharma. The Cost and Evaluation Agreement provides
for the responsibilities of AHPharma in connecton with the Phase 4 trials and
testing required by the USDA in exchange for payment a total payment of
$300,000. The Cost and Evaluation Agreement terminates upon the final approval
of the USDA.
At this time, the USDA has reviewed the results of the research which showed the
vaccine used in the study is safe, non toxic and causes no harm to the animal,
and reduced the number of salmonella contamination and therefore has allowed the
research to go to the final phase for approval by USDA for the Company to show
efficacy of the vaccine in a commercial setting with large numbers of chickens
and also to find a potential manufacturer for the vaccine. The Company has begun
the final phase and AHPharma has begun collecting salmonella samples from
-21-
multiple locations within the United States to start the mock study that was
requested by USDA. The Company at the time of this filing has not entered into
any agreement with a third party to manufacture the vaccine.
The Company's product vaccine that is to be exclusively marketed under its
licensing arrangement with NHIL is in the last stages of USDA required testing
and depending upon the results of such testing may require additional research
and development, testing and regulatory approval.
The Company's development of its products will be subject to other risks of
failure including, among others, the possibilities that any such products will
be found to be ineffective or toxic, or otherwise fail to receive necessary
regulatory approvals; that any of the products, if safe and effective, will
prove difficult or impossible to manufacture on a large scale or will be
uneconomical to market; that the proprietary rights of third parties will
preclude the Company or its collaborators from marketing any products developed;
that the products will fail to achieve market acceptance; and that third parties
will market equivalent or superior products. As a result, there can be no
assurance that the Company or its collaborators will be able to develop,
manufacture and successfully commercialize the Company's product candidates
within a reasonable time frame or ever. Failure to develop successfully the
Company's current product candidates would materially and adversely affect the
Company's business, financial condition and results of operations.
The Company's product vaccine that is to be exclusively marketed under its
licensing arrangement with NHIL are in the late developmental stage and may
require additional research and development, testing and regulatory approval
depending upon the results of final large scale testing. The Company's
development of its product will be subject to other risks of failure including,
among others, the possibilities that any such products may fail to receive final
and necessary regulatory approvals; that any of the products, if safe and
effective, will prove difficult or impossible to manufacture on a large scale or
will be uneconomical to market; that the products will fail to achieve market
acceptance; and that third parties will market equivalent or superior products.
As a result, there can be no assurance that the Company or its collaborators
will be able to develop, manufacture and successfully commercialize the
Company's product candidates within a reasonable time frame or ever. Failure to
develop successfully the Company's current product candidate would materially
and adversely affect the Company's business, financial condition and results of
operations.
COMPANY OVERVIEW
Our recent operating history over the last two years has been focused on the
finishing of the final phase of the USDA study, finding a partner to manufacture
the Salmogenics Vaccine, and obtain USDA approval and no representation is made,
nor is any intended, that we will able to carry on our activities profitably.
The viability of the proposed business effort is dependent upon sufficient funds
being realized from this offering, of which there is no assurance. Our main
emphasis will be to finish final phase of the study find a partner to
manufacture the vaccine and get USDA approval
We have no revenues at this time and anticipate that we will need additional
capital to support the execution of our business plan. We believe that with cash
on hand, the Company will have funds to support operations till the end of the
calendar year. The Company expects to expend approximately $160,000 to complete
Phase 4 testing. The Company's only operational activities at this time is the
Phase 4 testing and management intends at the completion of such testing to
raise additional funds in order to support marketing and sales activities,
though the Company cannot make any assurances that it will be able to raise such
capital at that time.
We are a scientific research and development company of biologics products to
domestic and international markets. Our background and expertise is in the
research, testing, and development of vaccines for applications to animals to
make the growing of these animals for human food sources both healthy for the
animals, economical for the growers and most importantly our vaccine protect
humans from diseases that are transmittable from animal food sources for adult
and child safety.
Our current business plan is focused on the agricultural animal industry, more
specifically, "Salmogenics," a poultry salmonella vaccine. NHIL owns the
exclusive rights to the Salmogenics Vaccine (hereinafter the "Vaccine") and a
Salmonella Antigen (hereinafter the "Antigen") which both provide a method for
-22-
controlling intestinal pathogenic organisms in animals. The Company has received
the exclusive rights to finish the final phase of the USDA study and to
manufacture, distribute, market and sell the vaccines by NHIL through a
Licensing Agreement with Global Green International, the wholly-owned subsidiary
of the Company. Under the Licensing Agreement with NHIL, the Company is
responsible for all financial obligations to obtain United States Department of
Agriculture ("USDA") approval. The Company is in the process of having the
Vaccine and Antigen approved by the United States Department of Agriculture/Food
Safety and Inspection Service ("USDA/FSIS").
The Company focuses on the commercialization of the salmonella vaccine for
poultry industry markets. In 2008, NHIL obtained the ownership rights to the
vaccine and took over the funding of a research study that had been in process
since 1996, and initiated the drafting and filings of patent application for the
vaccine. Research was being conducted through an unrelated third party,
AHPharma. AHPharma was informally engaged to conduct not only research and
development, but also to perform the testing of the vaccine product in the
poultry industry. On July 30, 2011, the Company entered into a Cost and
Evaluation Agreement with AHPharma. The Cost and Evaluation Agreement provides
for the responsibilities of AHPharma in connection with the Phase 4 trials and
testing required by the USDA in exchange for a total payment of $300,000. The
Cost and Evaluation Agreement terminates upon the final approval of the USDA,
which has not been obtained at the time of this filing.
At this time, the USDA has reviewed the results of the research which showed the
vaccine used in the study is safe, non-toxic and causes no harm to the animal,
and reduced the number of salmonella contamination and therefore has allowed the
research to go to the final phase for approval by USDA for the Company to show
efficacy of the vaccine in a commercial setting with large numbers of chickens
and also to find a potential manufacturer for the vaccine. The Company has begun
the final phase and AHPharma has begun collecting salmonella samples from
multiple locations within the United States to start the mock study that was
requested by USDA. The Company, at the time of this filing, has not entered into
any agreement with a third party to manufacture the vaccine.
OUR PRODUCT
We have developed and tested one product, Salmongenics, which we intend to
market in the United States initially and later worldwide. The Company owns the
rights to Salmogenics in the United States and Canada. The Company has been
granted with all marketing rights to Salmogenics in all other countries under
the License Agreement.
Salmongenics contains the Sotomayor Antigen, which has been patented by NHIL. An
antigen is a substance that, when introduced into a body, triggers the
production of an antibody by the immune system, which will then kill or
neutralize the antigen that is recognized as a foreign and potentially harmful
invader. The Sotomayor Antigen pertains to a particular composition of multiple
germs mainly of the Genus Salmonella in order to control intestinal pathogenic
organisms in the chicken species.
Our product, Salmogenics, is in the form of a vaccine that is injected in the
egg, before it hatches, to give immunity to the Salmonella bacteria to the chick
(Gallus domesticus -genus and species) Salmogenics is a multi-valent vaccine
designed to protect against several strains of Salmonella bacteria and other
opportunistic bacteria that frequently associate with Salmonella bacteria that
further endangers the host's (chick's) survivability.
The advantages of our vaccine when injected in ovo (into the fertilized egg)
are:
o While the animal health industry has developed a variety of treatments
for the prevention of poultry diseases, these treatments are not
always administered to the birds in ways that ensure effective and
consistent results.
o Conventional application has been post hatch (administered the 1st
week after the chick is born, through feed and drinking water, via a
spray that treats the birds through their mucus membranes or costly
hand vaccinations.
o Such treatments require multiple post-hatch vaccinations and field
boosters, involving costly guesswork and are labor intensive. The
result is inefficient, costly, inconsistent vaccine delivery.
-23-
In ovo delivery of the vaccine overcomes problems that have arisen over the
years when using water borne or spray vaccinations with chickens:
o Many poultry caretakers and/or broiler farmers are involved
o A variety of vaccination equipment is used on different farms
o Re-use of containers with viable vaccine residues
o Blocked spray nozzles
o Incorrect spray pressure resulting in defective distribution patterns
o Poor water quality (pH, minerals)
o Use of hot water to reconstitute freeze dried vaccine pellets
o Mixing heat and time sensitive vaccines for a complete day of
vaccinations
o Incorrect dosage of vaccine for reconstitution
o Incorrect dosage of diluent for dilution
o Water lines contaminated with bacteria and/or carrying heavy biofilm
loads
o Too long or too short time within waterlines
o Blocked needles or tubing
o Defective vaccine reservoirs
o Use of improperly handled diluents
o Incorrect calibrated syringes
o All of the above problems require added human interactions and added
labor costs, as well as stress on the birds increasing mortality rates
and negatively affecting "Food Conversion".
The laboratory concept of `in the egg' vaccination was initially used for a
Marek's disease (MD) vaccine and has been expanded into a commercially applied
technology platform that is capable of placing several antigens and compounds
simultaneously into over 50,000 eggs per hour.
Marek's disease is a highly contagious virus that causes the enlargement of
nerves and organs in poultry. The Marek's disease vaccine was one of the first
vaccines to use related viruses as a vaccine to fight a virus. Prior to the
development of the vaccine, Marek's disease was responsible for the devastation
of whole flocks of poultry. The vaccine was one of the first to be successfully
developed for administered by in-ovo vaccination when the eggs are transferred
from the incubator to the hatcher.
In ovo vaccination enables downstream process improvements in efficiencies such
as high speed separation of chick and un-hatched eggs, rapid placement or
reduced time from hatcher to farm, targeted precise therapeutic intervention and
reduction of handling stress on the birds.
In ovo vaccination offers many advantages over other treatments, such as:
o Earlier immunity - an earlier exposure to various vaccines improves
the bird health and disease resistance at the time when they are
placed on the farm.
o Uniform delivery - in ovo vaccination allows an automated and uniform
process for delivering consistent volumes and concentrations of
vaccines to every bird when compared to the previously used
subcutaneous method of vaccination at day of hatch.
o Fast delivery - time is reduced from hatcher to farm with vaccinations
after hatching being eliminated.
o Reduced stress - birds are less stressed when vaccinated in ovo versus
handling and injection after hatch.
o Reduced labor costs - a reduction in the need for the labor associated
with day of hatch subcutaneous vaccination is immediately realized.
Compared to the day of hatch vaccination method there is a reduction
in labor required to vaccinate the embryos.
o Future products - new products and vaccines have recently been
marketed and more are being developed that will effectively control
diseases when applied in ovo.
The manufacturing of our vaccine will be with seasoned pharmaceutical vaccine
manufacturers.
-24-
SALMOGENICS VACCINE
Salmogenics stimulates an immune response in inoculated poultry to fight several
intestinal pathogenic organism that include seven field strains of E. coli,
Psedomona aeruginosa, Aerobacter aerogenes, and four Salmonella strains. The
chicken egg when properly vaccinated with Salmogenics hatches a Salmonella
resistant chick that requires fewer antibiotics. Therefore humans consume higher
quality meat grown with fewer antibiotics.
HOW SALMOGENICS WILL POSITIVELY EFFECT LIVES
Management estimates that 40 billion chickens will benefit form the Salmogenics
Vaccine. Approximately, 1.3 billion humans get some form of Salmonella infection
per year, based upon industry statistics. (WORLD EGG INDUSTRY - A FEW FACTS AND
FIGURES. International Egg Commission. (Web site accessed February 2008.) The
Salmogenics Vaccine improves the immune system of the fowl, thereby improving
the health and welfare of the bird and those that eat chicken, turkey and other
fowl. The birds will be healthier and experience increased weight gain and
reduced mortality, a benefit for the poultry industry worldwide and humans
consuming chickens. This means not only a healthier chicken, but a healthy
source of protein for humans to consume with much less fear that they will
become infected by Salmonella bacteria and suffer long-term illness or a worst
case scenario, death.
WHAT IS SALMONELLA?
Salmonella is the scientific name for over 2,500 of types of bacteria. The types
are known to cause disease in humans, animals, and birds (especially poultry)
worldwide. The bacteria is widespread and found mainly in the intestines of
birds, reptiles and mammals. People can acquire the bacteria via a variety of
different foods of animal origin. The illness it causes is called SALMONELLOSIS.
WHAT ARE THE SYMPTOMS OF SALMONELLOSIS?
The symptoms of Salmonellosis typically include fever, diarrhea and abdominal
cramps. In persons with poor underlying health or weakened immune systems,
Salmonella can invade the bloodstream and cause life-threatening infections.
Symptoms usually appear 12-72 hours after the ingestion of food contaminated
with Salmonella and the illness from Salmonella usually last 4-7 days; mild
cases can usually recover, but it may be several months before your bowel habits
are entirely normal.
According to the U. S. Centers for Disease Control and Prevention ("CDC") this
common food-borne illness can do more than just give one diarrhea or a stomach
ache, but can cause the following long-term problems that appear 1-3 weeks
following infection:
o joint pain
o painful urination
o conjunctivitis
o knee pain
WHAT IS SALMOGENICS VACCINE?
Salmogenics Vaccine is a patented vaccine for Salmonella. Salmogenics stimulates
an immune response in inoculated poultry to several intestinal pathogenic
organisms that include various Salmonella strains and several wild strains of
other frequent pathogenic bacteria.
Salmogenics contains the Sotomayor Antigen, which has been patented by the
Company's majority shareholder, NHIL. An antigen is a substance that, when
introduced into a body, triggers the production of an antibody by the immune
system, which will then kill or neutralize the antigen that is recognized as a
foreign and potentially harmful invader. The Sotomayor Antigen pertains to a
particular composition of multiple germs mainly of the Genus Salmonella in order
to control intestinal pathogenic organisms in the chicken species.
-25-
HOW SALMOGENICS WILL POSITIVELY EFFECT LIVES
Approximately, 40 billion chickens a year will benefit from the Salmogenics
Vaccine. (World Egg Industry - a Few Facts and Figures. International Egg
Commission. (Web Site Accessed February 2008.)
The Salmogenics Vaccine improves the immune system of the chick, thereby
improving the health and welfare of the bird and those that consume chicken,
turkey and other poultry. The birds are less susceptible to illness and
experience increased weight gain and reduced mortality, a big plus for the
poultry industry worldwide. This means not only a healthier chicken, but a
healthier source of protein for humans to consume with much less fear infection
by Salmonella bacteria.
HOW SALMOGENICS DIFFERS FROM OTHER VACCINES ON THE MARKET
o Some current vaccines may interfere with efficacy of other vaccines or
medications administered simultaneously with and/or subsequent to
vaccination.
o Salmogenics can be administered alone or with other vaccines. This
makes Salmogenics cost effective for chicken growers who grow for
worldwide consumption.
o Additionally, some antigens may interfere with or affect the accuracy
of traditional test or screening tools used to detect active or prior
infections.
o Salmogenics does not affect the accuracy of diagnostic procedures and
does not reduce the effectiveness of other vaccines. It can be
administered alone or with other vaccines thereby reducing the cost of
administration.
o Other vaccines are administered orally or through nasal passages or by
individual injection which requires man hours to handle.
The Salmogenics Vaccine can be administered with other vaccines directly into
the egg before the egg is hatched without additional handling costs and without
human handling of the chick and stress to the live bird. Prior vaccines
generally failed to provide a Salmonella-containing multivalent vaccine
composition which is as effective as Salmogenics in inducing an immune response
to at least one intestinal pathogenic organism.
The USDA has recently ordered the poultry industry to reduce the percentage of
Salmonella infected chicken allowed on the market from 7% to 5%. Salmogenics has
been shown in efficacy studies to help accomplish these strict requirements set
forth by the USDA. (FEDERAL REGISTER / VOL. 75, NO. 93 / FRIDAY, MAY 14, 2010 /
NOTICES; DOCKET NO. FSIS-2009-0034, 27288.)
MARKETING STRATEGY AND SIZE
The Company intends to market to the USA broiler young chicken and parental
industry initially followed by commercial egg-type laying hen and egg markets.
USDA/FSIS regulatory approval is required for each specie and label claim. USA
young progeny broiler market consists of 8.64 billion processed annually in 2010
produced from approximately 40 million laying hens- both are considered viable
profitable markets for new technology vaccine markets ("U.S. POULTRY AND EGG
ASSOCIATION, ECONOMIC DATA, POULTRY PRODUCTION AND VALUE SUMMARY 2010",
WWW.POULTRYEGG.ORG/ECONOMIC DATA/)
Following initial market entry into the young broiler chicken and parental
markets, the Company is responsible for all financial obligations as NHIL will
proceed to obtaining federal regulatory approval and initiate marketing efforts
into the commercial egg-type laying hen and egg markets. It is well recognized
that the Salmonella organism, once it infects the laying hen, will continue to
contaminate the egg as it tracks down the oviduct. Once the organism is present
in the egg, almost a perfect nutrient environment will assure that those persons
consuming an uncooked egg (a common practice in most parts of the world) will
become infected. Weaker human immune systems (i.e., the very young and very
elderly) have a greater chance of Salmonella infection.
-26-
The international animal industry is approximately 4-times the size of the
United States chicken industry. Single-organism Salmonella vaccines have been
used extensively in the United Kingdom plus those markets outside the United
Kingdom. The UK's regulatory agencies have strongly encouraged Salmonella
vaccines of both animal progeny and their parents. (WATTAGNET.COM, "GLOBAL
BROILER PRODUCTION TO MAINTAIN GROWTH" APRIL 6, 2009)
PRODUCT CUSTOMER DECISIONS
The immediate customers are the poultry farms, specifically in the chicken
industry and in particular Poultry Company Veterinarians. Vaccine product use
decisions are fairly straightforward in the United States due to a limited
number of Poultry Company Veterinarians who will determine technology
need/worth, safety, efficacy and bottom-line profitability of the vaccine. Each
Veterinarian must persuade their top management and cost accountants by
conducting company field studies and demonstrations of cost-effectiveness as to
the reason to use the product.
Our potential end users of our product are the poultry farms which in the United
States includes the companies listed below.
TOP 10 BROILER CHICKEN COMPANIES
Representing 73 % of the total chickens processed annually include:
--------------------------------------------------------------------------------
Annually Annual
Rank Broiler Chicken Company Processed (million)1 R-T-C 2 (lbs.)
--------------------------------------------------------------------------------
#1 Tyson Foods, Inc......................1,944 .................8,372
#2 Pilgrim's Pride Corp..................1,676..................6,578
#3 Perdue Farms, Inc.......................626..................2,787
#4 Sanderson Farms, Inc....................405..................2,566
#5 Koch Foods, Inc.........................494..................1,828
#6 Wayne Farms, LLC .......................289..................1,807
#7 Mountaire Farms, Inc....................263..................1,740
#8 House of Raeford Farms, Inc.............198..................1,217
#9 Foster Farms, Inc.......................296..................1,037
#10 Peco Foods, Inc.........................176....................986
--------------------------------------------------------------------------------
TOP 10 TOTAL .........................6,369 million.......28,920 million
ANNUAL TOTAL ..........................8.64 billion.........38.8 billion
TOP 10 (% of total) ..........................73.7 %...............74.5 %
--------------------------------------------------------------------------------
1 Number of birds that represents "MARKET SIZE" for the Company's product.
2 NOTE: R-T-C equals "READY-TO-COOK" chicken.
(Source: WATT POULTRYUSA FEB. 2010, http://www.wattpoultryusa-digital.com and
U.S. Egg and Poultry Association http://www.poultryegg.org/economic_data/ (AS OF
FEB. 2010))
MARKET PENETRATION TECHNIQUES EMPLOYED
United States markets will be penetrated with a market entry program that will
include:
o Research data publications, including efficacy and safety research.
o Company and product name(s) recognition.
o Strong and reliable regulatory approvals and label claim development.
o Company presents at animal meetings (particularly and initially
poultry meetings and conventions).
o Company and product advertising in prominent animal production
(especially and initially the chicken production industry) and food
safety publications.
o A strong and well-experience technical staff that will work with the
technical experts in the poultry industry, such staff has not been
identified at the time of this filing.
o Strong sales force, with experience in the poultry industry.
-27-
COMPETITION, AREAS OF INTENDED USAGE, AND SUCCESS RATE
Historically, vaccines have generally fail to provide a multivalent antigen (an
antigen which stimulates production of multiple antibodies) composition which
can be easily and effectively administered in a commercial farm environment at a
reduced cost, while failing to provide a multivalent antigen composition that
can be utilized alone or in combination with vaccine products for use with other
diseases without reducing the efficacy of either vaccine component and/or the
ability to detect or diagnose particular diseases within inoculated birds.
Current vaccines competitive to the Company's include:
o Sporulin(TM), with the active ingredients BACILLUS SUBTILIS and
BACILLUS LICHENIFORMIS, is fed via animal feed additive with intended
use in live performance general bacteria issues. Typically, this
product is used in live broiler young chicken production operations.
The product has been introduced with very limited success. Sporulin is
manufactured and sold by Pacific Vet Group.
o FloraMax-B11(TM) that is a probiotic for poultry only and administered
as a water soluble additive with intended use in SALMONELLA and E.
COLI food safety issues. Typically this product is used in commercial
egg-type and breeder hen production operations. The product has had
some success in commercial egg-type laying hen operations.
FloraMax-B11 is manufactured and sold by Pacific Vet Group.
o LAYERMUNE(R) SE currently sets the standard in SALMONELLA ENTERITIDIS
protection of commercial egg-type laying hens in the USA. CEVA, a
French pharmaceutical company, received the first USDA license for a
poultry vaccine against S. enteritidis with multiple strains aids for
the reduction of salmonella colonization of the intestinal tract
thereby reducing the risk of SE shed in the environment and egg shell
contamination. Introduced in 1992, LAYERMUNE(R) SE has been
instrumental in earning CEVA the #1 ranking in salmonella vaccines in
the U.S. The oil-based bacteria product is administered to chickens
via subcutaneous injections.
RECENT DEVELOPMENTS
The Company has successfully completed the requirements of Phase I, Phase II and
Phase III efficacy studies as set forth by the USDA and the Salmogenics product
has currently entered into the final phase of becoming a USDA approved vaccine
for the in ovo vaccination of chicken eggs.
On January 28, 2011, strains of Salmogenics Vaccine were deposited with the
American Type Culture Collection Repository. The American Type Culture
Collection (ATCC) is a private, not-for-profit biological resource center whose
mission focuses on the acquisition, authentication, production, preservation,
development and distribution of standard reference microorganisms, cell lines
and other materials for research in the life sciences. The deposit was made in
order to have ATCC determine whether the Salmogenics Vaccine meets industry
standards.
On February 15, 2011, with USDA approval, AHPharma began the final phase of
Salmogenics Vaccine consisting of in house study ordered and required by USDA
for the chicken industry. The Company completed all prior requirements of the
USDA to include:
1. Phase I which involved independent research with Dr. James McNaughton, PhD
and AHPharma, Inc. which demonstrated that Salmogenics Vaccine:
o Reduced fecal bacteria loads significantly for E. coli and Salmonella
bacteria.
o Produced an average weight gain of 2% per bird.
o Reduced mortality.
2. Phase II demonstrated:
o In this phase various dosages of Salmogenic were tested to determine
the most efficient and cost effective amount of vaccine to be
administered to produce a chicken born with less or no Salmonella
bacteria.
-28-
o Clinical testing also showed that eggs treated with Salmogenics
Vaccine had a reduced mortality as compared to the control groups.
3. Phase III involved proving that Salmogenics Vaccine:
o When tested clinically Salmogenics Vaccine showed to help reduce the
incidence of Salmonella and reach a point that meets the USDA
regulatory requirements.
o As of August 13, 2010 the USDA issued an edict that the acceptable
incidence of Salmonella for chicken growers had been reduced from 7%
to a 5% tolerance. Additionally, Salmogenics Vaccine was concomitantly
administered with Mareks vaccine and found to not alter the effects of
Mareks Vaccine nor the effectiveness of Salmogenics Vaccine.
4. As of February 16, 2011, the Company was able to announce that the final
phase of USDA approval had begun, which will involve:
a. Meeting with the USDA for a review of the final steps.
b. Selecting a vaccine manufacturer.
c. The collection of salmonella strains for the mock study requested by
USDA.
d. The approval of AHPharma by the USDA that their facilities will be
approved to perform the final field study for Salmogenics Vaccine. The
number of birds to be tested is to be determined. This field study is
done to determine if any variations exist between previous efficacy
studies and studies done in the commercial field.
5. On May 3, 2011 the US Patent Office issued Patent No. 7,935,355
"Composition and Method for Controlling Intestinal Pathogenic Organisms"
for Salmogenics Vaccine.
6. On August 2, 2011, the US Patent Office issued Patent No. 7,988,978
"Composition and Method for Controlling Intestinal Pathogenic Organisms"
for Salmogenics Vaccine.
7. On November 28, 2011, the Salmonella challenge study, as part of the Phase
4 efficacy testing was completed. The results of the study were successful
and the Salmogenics Vaccine held up to the challenge for all Salmonella
strains tested. This placed the Company one step closer towards setting a
model study and protocols for a successful USDA required study after the
filing of our approved vaccine manufacturer.
8. On March 11, 2012, all the results and data are included in a final report
of the test model for Efficacy Study done with 3,036 chickens. The purpose
of this Efficacy/Challenge study was to determine the effect on chicken
hatched after the IN OVO administration of the Salmogenics Vaccine 3 days
before hatching.
9. The Company's status regarding its Phase 4 efficacy testing is:
o In the process of negotiating with an USDA approved vaccine
manufacturer.
o Assure that the requirements from the vaccine manufacturer will meet
the standard batch consistency as defined by the USDA as part of the
efficacy requirements.
o The conclusion of the USDA approved large bird efficacy study to be
done by AHPharma which meets the following parameters:
o That the vaccine product can be safely and standardly
commercially applied by the intended customers.
o That the claims are sustainable and reproducible when applied to
larger populations of birds.
o To see if the vaccine can be used in other circumstances such as
a combined treatment with other vaccines. This part of the study
has been completed and proven successful.
o Collect and present the data of the efficacy tests to be analyzed and
results sent to the USDA for final approval.
-29-
OUR STRATEGY
The Company's objective is to be a leader in the commercialization of salmonella
vaccine products. To achieve this objective, we intend to:
o Management's current focus is on the final approval by the USDA of the
Company's sole product, the Salmogenic Vaccine. As the Company, moves
closer to final approval, it will begin to develop and focus efforts
on marketing and sales of the Salmogenic Vaccine.
o EXPAND OUR PORTFOLIO OF PRODUCTS. The Company intends to expand its
existing portfolio of product candidates. The Company will take into
account market attractiveness, technical feasibility, the potential to
develop a proprietary position and the productiveness of animal models
in choosing among new product development opportunities. Though, at
the time of this filing, management has not taken any efforts and has
no plans to take any efforts in this direction.
o BROADEN OUR LICENSEE. The Company plans to broaden its portfolio of
licenses of and other technologies to develop new products and attract
corporate and academic collaborators. We intend to accomplish this
through internal and sponsored research, in-licensing and technology
acquisitions. Though, at the time of this filing, the Company has not
identified any such opportunities.
RELATIONSHIP WITH NHIL
NHIL owns 81.08% of the Company's common stock and as such is not only the
Company's parent company, but also its majority and controlling shareholder.
NHIL owns all of the patents and trademarks associated with the Salmogenic
Vaccine.
On November 29, 2010, the Company entered into License Agreement with NHIL, our
majority shareholder. The License Agreement provides us with exclusive license
to perform the final phase of the USDA study and to manufacture, distribute,
market and sell the Salmonella Vaccine and the Salmonella Antigen, not only in
the United States, but also worldwide. Though, at this time, the Company has not
made any plans regarding operations outside of the United States. As part of the
consideration of the License Agreement, the Company has agreed to undertake the
financial obligations for the acquisition of any patents and obtaining USDA
approval, in addition to the issuance of the 683,097,847 shares to NHIL. The
License Agreement has no provisions for termination, unless the Company defaults
on its responsibilities, and is perpetual.
At June 1, 2013, NHIL holds 604,707,057 shares of common stock or 81.08% of the
issued and outstanding common stock of the Company. NHIL originally registered
66,471,705 shares (8.91% of the issued and outstanding) of the 664,717,057
shares it holds as part of the original Registration Statement No. 333-174853.
During the year ended December 31, 2012, NHIL sold 60,010,000 shares of the
registered shares it holds, decreasing its ownership to 604,707,057 shares or
81.08% of the total issued and outstanding common stock. As part of this
Registration Statement, the Company is registering an additional 100,000,000
shares of the shares held by NHIL. Upon the effectiveness of this Registration
Statement, the Company will have registered a total of 106,561,705 shares on
behalf of NHIL (14.29% of the issued and outstanding). At the time of this
filing, NHIL has no arrangements to sell these shares. If it sells the shares
that are being registered, it will hold 498,145,352 shares of common stock
(66.81% of the total issued and outstanding common stock.)
COMPETITION:
Competition among entities attempting to identify and develop new therapies is
intense. The Company faces, and will continue to face, competition from
pharmaceutical and biotechnology companies, academic and research institutions
and government agencies, both in the United States and abroad. Many of the
Company's competitors have substantially greater capital resources, research and
development staffs, facilities, manufacturing and marketing experience,
distribution channels and human resources than the Company. Future competition
will likely come from existing competitors, as well as other companies seeking
to develop new treatments.
-30-
At this time, the Company has an exclusive license from NHIL. The Company may be
dependent on NHIL for support of certain of its technologies and intends to rely
on NHIL for development of any future products. Product candidates of the
Company, as it begins to pursue its strategy as discussed above, therefore, may
be subject to competition with a potential product under development by NHIL.
Rapid technological development by the Company or others may result in products
or technologies becoming obsolete before the Company can recover development
expenses. Products developed by the Company could be made obsolete by less
expensive or more effective technologies, even technologies unrelated to
salmonella vaccine. For example, competitors may also develop vaccines that may
compete with or obviate the need for the Company's products. There can be no
assurance that the Company will be able to make the enhancements to its
technology necessary to compete successfully with existing or newly emerging
technologies.
GOVERNMENT REGULATION:
Prior to marketing, any products developed by the Company must undergo an
extensive regulatory approval process in the United States and other countries.
This regulatory process, which includes efficacy studies, and may include
post-marketing surveillance of each compound to establish its safety and
efficacy (effectiveness), can take many years and require the expenditure of
substantial resources. Efficacy studies are performed to determine the
effectiveness of the product on both a small and large scale. Post-marketing
surveillance requires that the Company continue to monitor the usage and
effectiveness of the product upon sale to users. Data obtained from efficacy
studies are subject to varying interpretations that could delay, limit or
prevent regulatory approval. Delays or rejections may also be encountered based
upon changes in USDA policies for vaccine approval during the period of product
development and USDA regulatory review. Similar delays may also be encountered
in obtaining regulatory approval in foreign countries. Delays in obtaining
regulatory approvals could adversely affect the marketing of any vaccine
developed by the Company or its corporate collaborators, impose costly
procedures upon the Company's or its corporate collaborators' activities,
diminish any competitive advantages that the Company may attain and adversely
affect the Company's receipt of revenues. There can be no assurance that
regulatory approval will be obtained for products developed by the Company.
Furthermore, regulatory approval may entail limitations on the indicated uses of
a proposed product.
As state previously, the Company is in the Phase 4 of the approval process where
efficacy testing has been defined as:
o The vaccine product must be safely commercially manufactured at a USDA
approved vaccine manufacturer.
o That every batch of the vaccine product produced during Phase 4
testing meets not only meets the required standards, but does so
consistently.
o That the vaccine product can be safely applied commercially by the
potential customers.
o That the claims of made regarding the vaccine product are sustainable
and reproducible when applied to larger populations.
The Company's status regarding Phase 4 efficacy testing is:
o In the process of negotiating with an USDA approved manufacturer.
o Assure that the requirements from the vaccine manufacturer will meet
the standard batch consistency as defined by the USDA efficacy study.
o The conclusion of the USDA approved large bird efficacy study to be
done by AHPharma which meets the following parameters:
o That the vaccine product can be safely and standardly
commercially applied by the intended customers.
o That the claims are sustainable and reproducible when applied to
larger populations of birds.
o To see if the vaccine can be used in other circumstances such as
a combined treatment with other vaccines.
-31-
o Collect and present the data to be analyzed and send results to the
USDA for final approval.
The regulation of the Company's products and its ongoing research is subject to
change, and future legislative or administrative acts in the United States or
other countries could have a material adverse effect on the Company's business,
financial condition and results of operations. Regulatory requirements
ultimately imposed could adversely affect the ability of the Company's corporate
collaborators to perform efficacy studies, manufacture or market products, and
could significantly delay or reduce the milestone or royalty payments payable to
the Company.
Even if regulatory approval is obtained, a marketed product and its manufacturer
are subject to continuing review. Discovery of previously unknown problems with
a product may result in withdrawal of the product from the market, and could
have a material adverse effect on the Company's business, financial condition
and results of operations. Violations of regulatory requirements at any stage
during the regulatory process, including efficacy studies, the approval process,
post-approval or in GMP, may result in various adverse consequences to the
Company, including the USDA's delay in approval or refusal to approve a product,
withdrawal of an approved product from the market or the imposition of criminal
penalties against the manufacturer and license holder. There can be no assurance
that the Company will be able to conduct efficacy studies or obtain necessary
approvals from the USDA or other regulatory authorities for any products.
Further, the terms of approval of any marketing application, including the
labeling content, may be more restrictive than we desire and could affect the
marketability of the Company's proposed products. Failure to obtain required
governmental approvals will delay or preclude the Company or its corporate
collaborators from marketing products or limit the commercial use of such
products and could have a material adverse effect on the Company's business,
financial condition and results of operations.
FACILITIES
The Company operates out of facilities leased by NHIL at 2820 Remington Green
Circle, Tallahassee, Florida 32308.
BACKLOG OF ORDERS
We currently have no orders for sales at this time.
GOVERNMENT CONTRACTS
We have no government contracts.
NUMBER OF PERSONS EMPLOYED
As of June 15, 2013, we had no full-time employees. Officers and Directors work
on an as needed part-time basis up to 30 hours per week.
PLAN OF OPERATIONS
We did not have operations prior to January 2009 and we did not have any
revenues during the fiscal years ended December 31, 2012 and 2011. We have
minimal capital, minimal cash, and only our intangible assets consist of our
patents and patent applications, business plan, relationships and contacts. We
are illiquid and need cash infusions from investors or shareholders to provide
capital, or loans from any sources.
-32-
Our plan of operations is as follows:
MILESTONES
2ND QUARTER 2013
o Continuation of negotiations with USDA approved vaccine manufacturer.
3RD QUARTER 2013
o Continuing Market Development.
o Manufacturing vaccine batch for the final Efficacy study.
o Perform USDA regulatory Efficacy Study and Potency Testing according
to Model Test
4TH QUARTER 2013
o First USDA product licensing submission.
o USDA creates product file and assigns a Product Code.
o Initiate Vaccine Manufacturing Setup for USDA approved protocol
efficacy testing.
1ST QUARTER 2014
o USDA Product Outline Review
o Submission of Master Seed to NVSL (USDA/National Veterinary Services
Laboratories) for testing.
o Second USDA product licensing submission with Efficacy Study report.
o Third USDA product licensing submission with Field Safety Report and
final labeling.
o Vaccine Manufacturer is authorized to submit samples to NVSL for
confirmatory testing.
The Company's status regarding its Phase 4 efficacy testing is:
o In the process of negotiating with an USDA approved manufacturer.
o Assure that the requirements from the vaccine manufacturer will meet
the standard batch consistency as defined by the USDA efficacy study.
o The conclusion of the USDA approved large bird efficacy study to be
done by AHPharma which meets the following parameters:
o That the vaccine product can be safely and standardly
commercially applied by the intended customers.
o That the claims are sustainable and reproducible when applied to
larger populations of birds.
o To see if the vaccine can be used in other circumstances such as
a combined treatment with other vaccines.
o Collect and present the data to be analyzed and send results to the
USDA for final approval.
In August 2012, the Company began a study to determine how long a chicken can be
protected against Salmonella after it begins laying eggs. If a layer hen is not
infected with the Salmonella bacteria, then neither the egg, nor the chick, when
it hatches, will have Salmonella. There is a "timelined" vaccine effect that
will be logged and sequenced during the study, beginning from a newly-hatched
chicken, to the 18-20 weeks before the chicken becomes a layer hen, and, after
that, until the end of the hen's productive life.
-33-
Our Budget for operations in next year is as follows:
THE VACCINE- FINAL TESTING FOR USDA APPROVAL
Final Testing for USDA approval $ 415,000
Manufacturing Cost of the Vaccine $ 750,000
Compensation for in-house doctors/scientist $ 150,000
ADMINISTRATION
Marketing/Fundraising $ 350,000
Management $ 150,000
Legal and accounting $ 35,000
Office Overhead/Salaries $ 45,000
-------------------
TOTAL $ 1,895,000
We will need substantial additional capital to support our proposed future
operations. We have NO revenues. We have NO committed source for any funds as of
date hereof. No representation is made that any funds will be available when
needed. In the event funds cannot be raised when needed, we may not be able to
carry out our business plan, may never achieve sales, and could fail in business
as a result of these uncertainties.
In January 2013, Dr. Mehran Ghazvini, the Company's Chief Executive Officer and
Chairman, advanced a total of $300,000 cash to the Company to support ongoing
operations. At this time, the funds are payable on demand.
OFF BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements.
B. DESCRIPTION OF PROPERTY
(a) Real Estate. None.(1)
(b) Title to properties. None.
(c) Oil and Gas Prospects. None.
(d) Patents and Patent Applications
Global Green does not hold any patents or pending patent applications for the
Salmogenics Vaccine, rather the patents, patent applications and trademarks for
the Salmogenic Vaccine are held in the name of NHIL, Global Green's majority
shareholder and parent company. Global Green licenses with NHIL for the usage of
such intellectual property. Pursuant to the License Agreement, Global Green is
required to pay for the USDA approval of the products.
NHIL holds the following patents and/or patent applications with the United
States Patent and Trademark Office:
------------------- ----------------------------------------------- ------------------ ------------------------
Patent Issuance
Patent Number Patent Title Date Patent Expiration Date
------------------- ----------------------------------------------- ------------------ ------------------------
7,988,978 Composition and method for controlling August 2, 2011 August 2027
intestinal pathogenic organisms
------------------- ----------------------------------------------- ------------------ ------------------------
7,935,355 Composition and method for controlling May 3, 2011 February 2028
intestinal pathogenic organisms
------------------- ----------------------------------------------- ------------------ ------------------------
(1) The Company does not own any property, real or otherwise.
-34-
C. LEGAL PROCEEDINGS
We are not a party to any pending legal proceedings, nor are we aware of any
civil proceeding or government authority contemplating any legal proceeding.
D. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
MARKET INFORMATION
Our Common Stock is presently thinly traded on the over-the-counter market
maintained by the Financial Industry Regulatory Authority (the "FINRA"). The
trading symbol for the Common Stock is "GOGC". The Company's stock began trading
on the Over the Counter Market in March 2012.
The offering of the shares registered hereby could have a material negative
effect on the market price for the stock.
RULES GOVERNING LOW-PRICE STOCKS THAT MAY AFFECT OUR SHAREHOLDERS' ABILITY TO
RESELL SHARES OF OUR COMMON STOCK
Our Common Stock is presently thinly traded on the over-the-counter market
maintained by the Financial Industry Regulatory Authority (the "FINRA"). The
trading symbol for the Common Stock is "GOGC". The Company's stock began trading
on the Over the Counter Market in March 2012.
Quotations on the OTC/QB reflect inter-dealer prices, without retail mark-up,
markdown or commission and may not reflect actual transactions. Our common stock
will be subject to certain rules adopted by the SEC that regulate broker-dealer
practices in connection with transactions in "penny stocks." Penny stocks
generally are securities with a price of less than $5.00, other than securities
registered on certain national exchanges or quoted on the Nasdaq system,
provided that the exchange or system provides current price and volume
information with respect to transaction in such securities. The additional sales
practice and disclosure requirements imposed upon broker-dealers are and may
discourage broker-dealers from effecting transactions in our shares which could
severely limit the market liquidity of the shares and impede the sale of shares
in the secondary market.
The penny stock rules require broker-dealers, prior to a transaction in a penny
stock not otherwise exempt from the rules, to make a special suitability
determination for the purchaser to receive the purchaser's written consent to
the transaction prior to sale, to deliver standardized risk disclosure documents
prepared by the SEC that provides information about penny stocks and the nature
and level of risks in the penny stock market. The broker-dealer must also
provide the customer with current bid and offer quotations for the penny stock.
In addition, the penny stock regulations require the broker-dealer to deliver,
prior to any transaction involving a penny stock, a disclosure schedule prepared
by the SEC relating to the penny stock market, unless the broker-dealer or the
transaction is otherwise exempt. A broker-dealer is also required to disclose
commissions payable to the broker-dealer and the registered representative and
current quotations for the securities. Finally, a broker-dealer is required to
send monthly statements disclosing recent price information with respect to the
penny stock held in a customer's account and information with respect to the
limited market in penny stocks.
HOLDERS
As of the filing of this prospectus, we have 290 shareholders of record of our
common stock. Sales under Rule 144 are also subject to manner of sale provisions
and notice requirements and to the availability of current public information
about us.
As of the date of this prospectus, our shareholders hold 745,761,432 shares. As
part of Registration Statement No. 333-174853, we registered 147,516,080 shares
of the common stock held by existing shareholder, including 6,461,705 shares on
behalf of NHIL. In this registration statement we are registering 100,000,000
shares which may be sold pursuant to this Registration Statement on behalf of
our majority shareholder NHIL for whom we are registering 100,000,000 shares.
Once this Registration Statement is declared effective, NHIL will have a total
of 106,461,705 shares registered. At the time of this filing, NHIL has no
arrangements to sell these shares.
-35-
DIVIDENDS
As of the filing of this prospectus, we have not paid any dividends to
shareholders. There are no restrictions which would limit our ability to pay
dividends on common equity or that are likely to do so in the future. The
Florida Revised Statutes, however, do prohibit us from declaring dividends
where, after giving effect to the distribution of the dividend; we would not be
able to pay our debts as they become due in the usual course of business; or our
total assets would be less than the sum of the total liabilities plus the amount
that would be needed to satisfy the rights of shareholders who have preferential
rights superior to those receiving the distribution.
E. FINANCIAL STATEMENTS
The audited financial statements of Global Green, Inc. for the years ended
December 31, 2012 and 2011 appear on pages F-1 through F-11. The unaudited
financial statements for the three-month period ended March 31, 2013 appear on
pages F-12 through F-22.
-36-
GLOBAL GREEN, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
(with Report of Independent Registered Public Accounting Firm Thereon)
F-1
ACCELL
4868 West Gandy Boulevard
Tampa, Florida 33611
Phone - 813-440-6380
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders
Global Green, Inc.
We have audited the accompanying consolidated balance sheets of Global Green,
Inc. (a development stage company) and its wholly owned subsidiary (together,
the "Company") as of December 31, 2012 and 2011, and the related consolidated
statements of operations, shareholders' equity and cash flows for the years then
ended and the cumulative period from July 12, 2004 (inception) to December 31,
2012. These financial statements are the responsibility of the Global Green,
Inc.'s management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Global
Green, Inc., as of December 31, 2012 and 2011, and the consolidated results of
its operations and its cash flows for the years then ended and the cumulative
period from July 12, 2004 (inception) to December 31, 2012, in conformity with
generally accepted accounting principles in effect in the United States of
America.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has incurred net losses and
negative cash flows since inception. These conditions raise substantial doubt
about its ability to continue as a going concern. Management's plans regarding
those matters also are described in Note 2 and 8. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty. Our opinion on the financial statements is not modified with
respect to this matter.
/s/ Accell Audit & Compliance, P.A.
Tampa, Florida
March 26, 2013
F-2
GLOBAL GREEN, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2012 AND 2011
December 31, 2012 December 31, 2011
--------------------- ---------------------
ASSETS
Current assets
Cash and cash equivalents (see Note 8) $ 4,027 $ 103,360
Prepaid expenses 1,125 3,188
--------------------- ---------------------
Total current assets 5,152 106,548
Intangible asset, net 6,131 6,467
--------------------- ---------------------
Total assets $ 11,283 $ 113,015
--------------------- ---------------------
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses $ 30,180 $ 17,012
Due to shareholders 500 500
--------------------- ---------------------
Total liabilities 30,680 17,512
--------------------- ---------------------
Shareholders' equity (deficit):
Preferred stock; no par value; 100,000,000 - -
shares authorized; no shares outstanding at
December 31, 2012 or 2011
Common stock; $.00001 par value; 3,000,000,000 7,458 7,458
shares authorized; 745,761,432 shares issued and
outstanding at December 31, 2012 and 2011
Additional paid in capital 285,573 285,573
Deficit accumulated during the development stage (312,428) (197,528)
--------------------- ---------------------
Total shareholders' equity (deficit) (19,397) 95,503
--------------------- ---------------------
Total liabilities and shareholders' equity (deficit) $ 11,283 $ 113,015
--------------------- ---------------------
See Accompanying Notes to Consolidated Financial Statements and
Report of Independent Registered Public Accounting Firm.
F-3
GLOBAL GREEN, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
AND THE PERIOD FROM INCEPTION (JULY 12, 2004) T0 DECEMBER 31, 2012
Inception to
2012 2011 December 31, 2012
-------------------- -------------------- --------------------
REVENUES $ - $ - $ -
-------------------- -------------------- --------------------
OPERATING EXPENSES
Testing for U.S. Department of - 137,800 137,800
Agriculture's approval
Professional fees 76,518 45,484 127,002
General and administrative 23,290 6,735 30,025
Consulting fees 10,000 - 10,200
Stock transfer agent fees 4,681 1,421 6,602
Amortization 336 336 700
Bank fees 75 24 99
-------------------- -------------------- --------------------
Total operating expenses 114,900 191,800 312,428
-------------------- -------------------- --------------------
NET LOSS $ (114,900) $ (191,800) $ (312,428)
-------------------- -------------------- --------------------
Net loss per share applicable to common
stockholders-- basic and diluted $ (0.00) $ (0.00)
-------------------- --------------------
Weighted average number of shares
outstanding - basic and diluted 745,761,432 743,293,205
-------------------- --------------------
See Accompanying Notes to Consolidated Financial Statements and
Report of Independent Registered Public Accounting Firm.
F-4
GLOBAL GREEN, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF SHAREHOLDERS' DEFICIT
FOR THE PERIOD OF INCEPTION (JULY 12, 2004) TO DECEMBER 31, 2012
Deficit
Accumulated
During the Total
Common Common Additional Development Shareholders'
Shares Stock Paid in Capital Stage Deficit
------------- ----------- --------------- ------------ --------------
INCEPTION, July 12, 2004 - $ - $ - $ - $ -
Share issuance, September 2004 3,141,597 314 (314) - -
------------- ----------- --------------- ------------ --------------
BALANCE, December 31, 2004 3,141,597 314 (314) - -
------------- ----------- --------------- ------------ --------------
BALANCE, December 31, 2005 3,141,597 314 (314) - -
------------- ----------- --------------- ------------ --------------
BALANCE, December 31, 2006 3,141,597 314 (314) - -
------------- ----------- --------------- ------------ --------------
BALANCE, December 31, 2007 3,141,597 314 (314) - -
------------- ----------- --------------- ------------ --------------
BALANCE, December 31, 2008 3,141,597 314 (314) - -
------------- ----------- --------------- ------------ --------------
BALANCE, December 31, 2009 3,141,597 314 (314) - -
Recapitalization due to 10 to 1
stock split 28,274,370 - - - -
Stock based compensation 20,000,000 200 - - 200
Share issuance 683,097,847 6,831 - - 6,831
Net loss - - - (5,728) (5,728)
------------- ----------- --------------- ------------ --------------
BALANCE, December 31, 2010 734,513,814 7,345 (314) (5,728) 1,303
Share issuance 11,247,618 113 285,887 - 286,000
Net loss - - - (191,800) (191,800)
------------- ----------- --------------- ------------ --------------
BALANCE, December 31, 2011 745,761,432 7,458 285,573 (197,528) 95,503
Net loss - - - (114,900) (114,900)
------------- ----------- --------------- ------------ --------------
BALANCE, December 31, 2012 745,761,432 $ 7,458 $ 285,573 $ (312,428) $ (19,397)
------------- ----------- --------------- ------------ --------------
See Accompanying Notes to Consolidated Financial Statements and
Report of Independent Registered Public Accounting Firm.
F-5
GLOBAL GREEN, INC.
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
AND THE PERIOD FROM INCEPTION (JULY 12, 2004) TO DECEMBER 31, 2012
Inception to
December 31, 2012 December 31, 2011 December 31, 2012
--------------------- --------------------- --------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (114,900) $ (191,800) $ (312,428)
Adjustments to reconcile net loss to net cash
from operating activities:
Amortization 336 336 700
Stock based compensation - - 200
Change in assets and liabilities:
Prepaid expenses 2,063 (3,188) (1,125)
Accounts payable and accrued expenses 13,168 17,012 30,180
Due to shareholders - (5,000) 500
--------------------- --------------------- --------------------
Net cash from operating activities (99,333) (182,640) (281,973)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from share issuance - 286,000 286,000
--------------------- --------------------- --------------------
NET CHANGE IN CASH (99,333) 103,360 4,027
CASH, beginning of period 103,360 - -
--------------------- --------------------- --------------------
CASH, end of period (see Note 8) $ 4,027 $ 103,360 $ 4,027
--------------------- --------------------- --------------------
SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES:
Common stock issued for acquisition of
Global Green International, Inc. $ - $ 6,831 $ 6,831
--------------------- --------------------- --------------------
See Accompanying Notes to Consolidated Financial Statements and
Report of Independent Registered Public Accounting Firm.
F-6
GLOBAL GREEN, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2012
NOTE 1 NATURE OF ORGANIZATION
Global Green, Inc. (the "Company") is a Florida Corporation
incorporated on July 12, 2004 as a wholly owned subsidiary of Global
Assets & Services, Inc. In September 2004, the Company was spun out
into a separate legal entity. The Company changed its name from The
Global Tech Assets, Inc. to Global Green, Inc. in April 2010 and its
fiscal period end is December 31.
The Company is in the development stage. The principal activities
during the development stage include organizing the corporate
structure, implementing the Company's business plan and raising
capital. Although the Company was formed in 2004, it did not have any
operating activities until 2010.
Under the Share Exchange Agreement executed on November 29, 2010,
between the Company and Nutritional Health Institute, LLC ("NHIL"),
the Company acquired 100% of the issued and outstanding stock of
Global Green International, Inc. ("GGII"), a wholly owned subsidiary
of NHIL. At the same time, the Company issued approximately 683
million shares of its common stock, representing 93% of the ownership
of the Company, to NHIL. After the above mentioned acquisition as per
the Share Exchange Agreement, the Company has become a majority-owned
subsidiary of NHIL. As the effective control over GGII did not change,
in accordance with Financial Accounting Standards Board's ("FASB")
Accounting Standards Codification ("ASC") 805 BUSINESS COMBINATIONS,
GGII is consolidated at its book value (See Note 4). Prior to November
2010, GGII had no assets or operations, so there is no impact to the
historical financial statements.
GGII, a wholly-owned subsidiary of the Company, has been granted the
exclusive worldwide rights (the "Licensing Agreement") to manufacture,
distribute, market and sell a Salmonella Antigen and Vaccine (the
"Vaccine"). The Licensing Agreement was executed between NHIL and GGII
before the Company acquired the 100% ownership of GGII and is the only
asset of GGII.
In February 2011, the Vaccine has been entered into the final phase of
becoming a United States Department of Agriculture ("USDA") approved
vaccine for the in ovo vaccination of chicken eggs to provide immunity
against Salmonella bacteria. In May 2011, the United States Patent and
Trademark Office granted a patent for the method and composition in
the Vaccine. In August 2011, an additional patent was granted related
to the vaccine.
NOTE 2 GOING CONCERN
These consolidated financial statements have been prepared on a going
concern basis which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business for the
foreseeable future. As of December 31, 2012, the Company has incurred
net losses of $312,428 since inception (July 12, 2004).
Management's plans include raising capital through the equity markets
to fund operations and eventually, the generating of revenue through
its business; however, there can be no assurance that the Company will
be successful in such activities. These consolidated financial
statements do not include any adjustments relating to the recovery of
the recorded assets or the classifications of the liabilities that
might be necessary should the Company be unable to continue as a going
concern.
F-7
GLOBAL GREEN, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2012
NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of
America ("GAAP") on the accrual basis of accounting. All significant
intercompany accounts and transactions have been eliminated in
consolidation. The interim financial statements reflect all
adjustments, which are, in the opinion of management, necessary in
order to make the financial statements not misleading.
USE OF ESTIMATES
The preparation of financial statements in conformity with GAAP
requires management to adopt accounting policies and make estimates
and assumptions that affect amounts reported in the financial
statements. The significant accounting policies, estimates and related
judgments underlying the Company's financial statements are summarized
below. In applying these policies, management makes subjective
judgments that frequently require estimates about matters that are
inherently uncertain.
CASH AND CASH EQUIVALENTS
The Company considers all investments with a maturity date of three
months or less when purchased to be cash equivalents. There were no
cash equivalents at December 31, 2012 and 2011.
REVENUE RECOGNITION
The Company recognizes revenue on arrangements in accordance with
Securities and Exchange Commission Staff Accounting Bulletin Topic 13,
REVENUE RECOGNITION and FASB ASC 605-15-25, REVENUE RECOGNITION. In
all cases, revenue is recognized only when the price is fixed or
determinable, persuasive evidence of an arrangement exists, the
service is performed and collectability is reasonably assured. The
Company did not report any revenues from inception to December 31,
2012.
EARNINGS PER SHARE
The Company has adopted ASC 260-10-50, EARNINGS PER SHARE, which
provides for calculation of "basic" and "diluted" earnings per share.
Basic earnings per share includes no dilution and is computed by
dividing net income or loss available to common shareholders by the
weighted average common shares outstanding for the period. Diluted
earnings per share reflect the potential dilution of securities that
could share in the earnings of an entity. Basic and diluted losses per
share were the same at the reporting dates as there were no common
stock equivalents outstanding at December 31, 2012 and 2011.
CONCENTRATIONS
Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of cash.
Occasionally, cash balances may exceed amounts insured by the Federal
Deposit Insurance Corporation ("FDIC"). Accordingly, the Company
places its cash and cash equivalents with financial institutions
considered by management to be of high credit quality. At December 31,
2012, the cash balances were not in excess of amounts insured by the
FDIC.
INCOME TAXES
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases. Additionally, the recognition of future
tax benefits, such as net operating loss carryforwards, is required to
the extent that realization of such benefits is more likely than not.
F-8
GLOBAL GREEN, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2012
Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which the
assets and liabilities are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates
is recognized in income tax expense in the period that includes the
enactment date.
In the event the future tax consequences of differences between the
financial reporting bases and the tax bases of the Company's assets
and liabilities result in deferred tax assets, an evaluation of the
probability of being able to realize the future benefits indicated by
such asset is required. A valuation allowance is provided for the
portion of the deferred tax asset when it is more likely than not that
some or all of the deferred tax asset will not be realized. In
assessing the realizability of the deferred tax assets, management
considers the scheduled reversals of deferred tax liabilities,
projected future taxable income, and tax planning strategies.
The Company files income tax returns in the United States and Florida,
which are subject to examination by the tax authorities in these
jurisdictions. Generally, the statute of limitations related to the
Company's federal and state income tax return is three years. The
state impact of any federal changes for prior years remains subject to
examination for a period up to five years after formal notification to
the states.
Management has evaluated tax positions in accordance with FASB ASC
740, INCOME TAXES, and has not identified any significant tax
positions, other than those disclosed.
SUBSEQUENT EVENTS
In accordance with FASB ASC 855, SUBSEQUENT EVENTS, the Company
evaluated subsequent events through March 26, 2013, the date the
financial statements were available for issue.
NOTE 4 INTANGIBLE ASSET
The Company accounts for its intangible asset in accordance FASB ASC
350 INTANGIBLES--GOODWILL AND OTHER. The intangible assets consist of
the Licensing Agreement and is carried at an allocated cost, less
accumulated amortization. The Licensing Agreement was executed on
November 29, 2010 between NHIL and GGII, before the Company acquired
the 100% ownership of GGII as described in Note 1. The provisions in
the License Agreement include the Company's responsibilities to
protect the Vaccine information and to assume financial
responsibilities for the acquisition of USDA approval of the Vaccine.
The License Agreement has no expiration date, but is being amortized
over the 20 year legal life of the related patent. As the effective
control over GGII did not change after acquisition by the Company, in
accordance with FASB ASC 805, BUSINESS COMBINATIONS, the License
Agreement is consolidated at the book value.
Components of intangible assets at the periods ended are as follows:
December 31, December 31,
2012 2011
-------------------- --------------------
License agreement $ 6,831 $ 6,831
Accumulated amortization (700) (364)
-------------------- --------------------
$ 6,131 $ 6,467
-------------------- --------------------
F-9
GLOBAL GREEN, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2012
NOTE 5 TAXES
The components of income tax expense for the periods ended are as
follows:
Inception to
December 31,
December 31, December 31, 2012
2012 2011 (unaudited)
------------- ------------- ------------
Current tax expense (benefit) $ (43,202) $ (72,117) $ (117,474)
Change in valuation allowance 43,202 72,117 117,474
------------- ------------- ------------
$ - $ - $ -
------------- ------------- ------------
The difference between income tax expense computed by applying the
statutory federal income tax rate to earnings before taxes for the
periods ended are as follows:
Inception to
December 31,
December 31, December 31, 2012
2012 2011 (unaudited)
------------- ------------- ---------------
Pretax loss at federal statutory rate $ (39,066) $ (65,212) $ (106,227)
State income benefit, net of federal benefit ( 4,136) ( 6,905) ( 11,247)
Change in valuation allowance 43,202 72,117 117,474
------------- ------------- ---------------
$ - $ - $ -
------------- ------------- ---------------
The components of deferred taxes are as follows:
December 31, December 31,
2012 2011
--------------- ----------------
Deferred income tax assets:
Operating loss carryforwards $ 117,474 $ 74,272
Less: valuation allowance (117,474) (74,272)
--------------- ----------------
Net deferred tax asset $ - $ -
--------------- ----------------
At December 31, 2012 and 2011, a valuation allowance was established
for the entire amount of the net deferred tax asset as the realization
of the deferred tax asset is dependent on future taxable income.
At December 31, 2012, the Company had net operating loss carryforwards
for tax purposes of $312,428, which will expire beginning in 2031, if
not previously utilized.
F-10
NOTE 6 EQUITY
In April 2010, the Company authorized the issuance of up to
100,000,000 shares of Preferred Stock at no par value. As of December
31, 2012 and 2011, no shares are issued or outstanding.
In May 2010, the Company had a 10-to-1 stock forward split, changing
its par value from $.0001 per share to $.00001 per share. Right after
the said stock split, the Company issued 20,000,000 shares of its
common stock to certain shareholders for services rendered valued at
$200. This is recorded as a non-cash expense in the accompanying
statement of operations.
In November 2010 the Company issued approximately 683 million shares
of common stock, representing 93% of the ownership of the Company, to
NHIL. After the above mentioned issuance, the Company has become a
majority-owned subsidiary of NHIL.
On March 21, 2011, the Company completed a private placement of common
stock to accredited investors and raised $286,000 of working capital.
NOTE 7 RELATED PARTY TRANSACTIONS AND COMMITMENTS
At December 31, 2012 and December 31, 2011, the amounts due to related
parties were $500.
Through its wholly-owned subsidiary, GGII, the Company has exclusive
rights to the Licensing Agreement with NHIL, the Company's majority
shareholder. In accordance with this agreement, GGII assumes the
financial responsibility for the acquisition and maintenance of all
patents, as well as USDA's approval of the Vaccine.
NOTE 8 CONTINGENCIES
During the normal course of business, the Company may be exposed to
litigation. When the Company becomes aware of potential litigation, it
evaluates the merits of the case in accordance with FASB ASC
450-20-50, CONTINGENCIES. The Company evaluates its exposure to the
matter, possible legal or settlement strategies and the likelihood of
an unfavorable outcome. If the Company determines than an unfavorable
outcome is probable and can be reasonably estimated, it establishes
the necessary accruals. As of December 31, 2012, the Company is not
aware of any contingent liabilities that should be reflected in the
accompanying financial statements.
NOTE 9 SUBSEQUENT EVENTS
In January 2013, the Company's Chief Executive Officer and Chairman,
advanced $300,000 to the Company to support ongoing operations. The
advance is payable on demand.
F-11
GLOBAL GREEN, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE-MONTH PERIOD ENDED
MARCH 31, 2013
F-12
GLOBAL GREEN, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2013 AND DECEMBER 31, 2012
MARCH 31, 2013 DECEMBER 31, 2012
------------------ ------------------
ASSETS
Current assets
Cash and cash equivalents $ 263,063 $ 4,027
Prepaid expenses 750 1,125
------------------ ------------------
Total current assets 263,813 5,152
Intangible asset, net 6,047 6,131
------------------ ------------------
Total assets $ 269,860 $ 11,283
------------------ ------------------
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued expenses $ $ 7,189 $ 30,180
Due to shareholders 500 500
Convertible advance- related party (see Note 7) 300,000 -
------------------ ------------------
Total liabilities 307,689 30,680
------------------ ------------------
Shareholders' deficit:
Preferred stock; no par value; 100,000,000 - -
shares authorized; no shares outstanding at
March 31, 2013 or December 31, 2012
Common stock; $.00001 par value; 3,000,000,000 7,458 7,458
shares authorized; 745,761,432 shares issued and
outstanding at March 31, 2013 or December 31, 2012
Additional paid in capital 285,573 285,573
Deficit accumulated during the development stage (330,860) (312,428)
------------------ ------------------
Total shareholders' deficit (37,829) (19,397)
------------------ ------------------
Total liabilities and shareholders' deficit $ 269,860 $ 11,283
------------------ ------------------
See Accompanying Notes to Consolidated Financial Statements.
F-13
GLOBAL GREEN, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2013 AND MARCH 31, 2012 AND
FOR THE PERIOD OF INCEPTION (JULY 12, 2004) THROUGH MARCH 31, 2013
(UNAUDITED)
INCEPTION TO
MARCH 31, 2013 MARCH 31, 2012 MARCH 31, 2013
-------------------- ------------------- --------------------
REVENUES $ - $ - $ -
-------------------- ------------------- --------------------
OPERATING EXPENSES
Testing for U.S. Department of - - 137,800
Agriculture's approval
Professional fees 9,939 25,304 136,941
General and administrative 4,033 2,478 34,058
Consulting fees - - 10,200
Stock transfer agent fees 600 150 7,202
Interest expense (see Note 7) 3,750 - 3,750
Amortization 84 84 784
Bank fees 26 - 125
-------------------- ------------------- --------------------
Total operating expenses 18,432 28,016 330,860
-------------------- ------------------- --------------------
NET LOSS $ (18,432) $ (28,016) $ (330,860)
-------------------- ------------------- --------------------
Net loss per share applicable to common
stockholders-- basic and diluted $ (0.00) $ (0.00)
-------------------- -------------------
Weighted average number of shares
outstanding - basic and diluted 745,761,432 745,761,432
-------------------- -------------------
See Accompanying Notes to Consolidated Financial Statements.
F-14
GLOBAL GREEN, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF EQUITY FOR THE PERIOD FROM INCEPTION (JULY 12, 2004) TO MARCH 31, 2013
(UNAUDITED)
ACCUMULATED
DURING THE TOTAL
COMMON COMMON ADDITIONAL DEVELOPMENT SHAREHOLDERS'
SHARES STOCK PAID IN CAPITAL STAGE DEFICIT
------------- -------- --------------- ----------- -------------
INCEPTION, JULY 12, 2004 - $ - $ - $ - $ -
Share issuance, September 2004 3,141,597 314 (314) - -
------------- -------- --------------- ----------- -------------
BALANCE, DECEMBER 31, 2004 3,141,597 314 (314) - -
------------- -------- --------------- ----------- -------------
BALANCE, DECEMBER 31, 2005 3,141,597 314 (314) - -
------------- -------- --------------- ----------- -------------
BALANCE, DECEMBER 31, 2006 3,141,597 314 (314) - -
------------- -------- --------------- ----------- -------------
BALANCE, DECEMBER 31, 2007 3,141,597 314 (314) - -
------------- -------- --------------- ----------- -------------
BALANCE, DECEMBER 31, 2008 3,141,597 314 (314) - -
------------- -------- --------------- ----------- -------------
BALANCE, December 31, 2009 3,141,597 314 (314) - -
Recapitalization due to 10 to 1 stock split 28,274,370 - - - -
Stock based compensation 20,000,000 200 - - 200
Share issuance 683,097,847 6,831 - - 6,831
Net loss - - - (5,728) (5,728)
------------- -------- --------------- ----------- -------------
BALANCE, DECEMBER 31, 2010 734,513,814 7,345 (314) (5,728) 1,303
Share issuance 11,247,618 113 285,887 - 286,000
Net loss - - - (191,800) (191,800)
------------- -------- --------------- ----------- -------------
BALANCE, DECEMBER 31, 2011 745,761,432 7,458 285,573 (197,528) 95,503
Net loss - - - (114,900) (114,900)
------------- -------- --------------- ----------- -------------
BALANCE, DECEMBER 31, 2012 745,761,432 7,458 285,573 (312,428) (19,397)
Net loss - - - (18,432) (18,432)
------------- -------- --------------- ----------- -------------
BALANCE, MARCH 31, 2013 745,761,432 $ 7,458 $ 285,573 $ (330,860) $ (37,829)
------------- -------- --------------- ----------- -------------
See Accompanying Notes to Consolidated Financial Statements.
F-15
GLOBAL GREEN, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2013 AND MARCH 31, 2012 AND
FOR THE PERIOD OF INCEPTION (JULY 12, 2004) THROUGH MARCH 31, 2013
(UNAUDITED)
INCEPTION TO
MARCH 31, 2013 MARCH 31, 2012 MARCH 31, 2013
----------------- ------------------ -------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (18,432) $ (28,016) $ (330,860)
Adjustments to reconcile net loss to net cash
from operating activities:
Amortization 84 84 784
Stock based compensation - - 200
Change in assets and liabilities:
Prepaid expenses 375 1,063 (750)
Accounts payable and accrued expenses (22,991) 4,804 7,189
Due to shareholders - - 500
----------------- ------------------ -------------------
Net cash from operating activities (40,964) (22,065) (322,937)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from share issuance - - 286,000
Proceeds from convertible advance -
related party 300,000 - 300,000
----------------- ------------------ -------------------
Net cash from financing activities 300,000 - 586,000
NET CHANGE IN CASH 259,036 (22,065) 263,063
CASH, beginning of period 4,027 103,360 -
----------------- ------------------ -------------------
CASH, end of period $ 263,063 $ 81,295 $ 263,063
----------------- ------------------ -------------------
SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES:
Common stock issued for acquisition of
Global Green International, Inc. $ - $ - $ 6,831
----------------- ------------------ -------------------
See Accompanying Notes to Consolidated Financial Statements.
F-16
GLOBAL GREEN, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2013
(UNAUDITED)
NOTE 1 NATURE OF ORGANIZATION
Global Green, Inc. (the "Company") is a Florida Corporation
incorporated on July 12, 2004 as a wholly owned subsidiary of Global
Assets & Services, Inc. In September 2004, the Company was spun out
into a separate legal entity. The Company changed its name from The
Global Tech Assets, Inc. to Global Green, Inc. in April 2010 and its
fiscal period end is December 31.
The Company is in the development stage. The principal activities
during the development stage include organizing the corporate
structure, implementing the Company's business plan and raising
capital. Although the Company was formed in 2004, it did not have any
operating activities until 2010.
Under the Share Exchange Agreement executed on November 29, 2010,
between the Company and Nutritional Health Institute, LLC ("NHIL"), the
Company acquired 100% of the issued and outstanding stock of Global
Green International, Inc. ("GGII"), a wholly owned subsidiary of NHIL.
At the same time, the Company issued approximately 683 million shares
of its common stock, representing 93% of the ownership of the Company,
to NHIL. After the above mentioned acquisition as per the Share
Exchange Agreement, the Company has become a majority-owned subsidiary
of NHIL. As the effective control over GGII did not change, in
accordance with Financial Accounting Standards Board's ("FASB")
Accounting Standards Codification ("ASC") 805 BUSINESS COMBINATIONS,
GGII is consolidated at its book value (See Note 4). Prior to November
2010, GGII had no assets or operations, so there is no impact to the
historical financial statements.
GGII, a wholly-owned subsidiary of the Company, has been granted the
exclusive worldwide rights (the "Licensing Agreement") to manufacture,
distribute, market and sell a Salmonella Antigen and Vaccine (the
"Vaccine"). The Licensing Agreement was executed between NHIL and GGII
before the Company acquired the 100% ownership of GGII and is the only
asset of GGII.
In February 2011, the Vaccine has been entered into the final phase of
becoming a United States Department of Agriculture ("USDA") approved
vaccine for the in ovo vaccination of chicken eggs to provide immunity
against Salmonella bacteria. In May 2011, the United States Patent and
Trademark Office granted a patent for the method and composition in the
Vaccine. In August 2011, an additional patent was granted related to
the vaccine.
NOTE 2 GOING CONCERN
These consolidated financial statements have been prepared on a going
concern basis which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business for the
foreseeable future. As of March 31, 2013, the Company has incurred net
losses of $330,860 since inception (July 12, 2004).
Management's plans include raising capital through the equity markets
to fund operations and eventually, the generating of revenue through
its business; however, there can be no assurance that the Company will
be successful in such activities. These consolidated financial
statements do not include any adjustments relating to the recovery of
the recorded assets or the classifications of the liabilities that
might be necessary should the Company be unable to continue as a going
concern.
F-17
GLOBAL GREEN, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2013
(UNAUDITED)
NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of
America ("GAAP") on the accrual basis of accounting. All significant
intercompany accounts and transactions have been eliminated in
consolidation. The interim financial statements reflect all
adjustments, which are, in the opinion of management, necessary in
order to make the financial statements not misleading.
USE OF ESTIMATES
The preparation of financial statements in conformity with GAAP
requires management to adopt accounting policies and make estimates and
assumptions that affect amounts reported in the financial statements.
The significant accounting policies, estimates and related judgments
underlying the Company's financial statements are summarized below. In
applying these policies, management makes subjective judgments that
frequently require estimates about matters that are inherently
uncertain.
CASH AND CASH EQUIVALENTS
The Company considers all investments with a maturity date of three
months or less when purchased to be cash equivalents. There were no
cash equivalents at March 31, 2013 and December 31, 2012.
REVENUE RECOGNITION
The Company recognizes revenue on arrangements in accordance with
Securities and Exchange Commission Staff Accounting Bulletin Topic 13,
REVENUE RECOGNITION and FASB ASC 605-15-25, REVENUE RECOGNITION. In all
cases, revenue is recognized only when the price is fixed or
determinable, persuasive evidence of an arrangement exists, the service
is performed and collectability is reasonably assured. The Company did
not report any revenues from inception to March 31, 2013.
EARNINGS PER SHARE
The Company has adopted ASC 260-10-50, EARNINGS PER SHARE, which
provides for calculation of "basic" and "diluted" earnings per share.
Basic earnings per share includes no dilution and is computed by
dividing net income or loss available to common shareholders by the
weighted average common shares outstanding for the period. Diluted
earnings per share reflect the potential dilution of securities that
could share in the earnings of an entity. Basic and diluted losses per
share were the same at the reporting dates as there were no common
stock equivalents outstanding at March 31, 2013 and December 31, 2012.
CONCENTRATIONS
Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of cash.
Occasionally, cash balances may exceed amounts insured by the Federal
Deposit Insurance Corporation ("FDIC"). Accordingly, the Company places
its cash and cash equivalents with financial institutions considered by
management to be of high credit quality. At times, the Company's cash
balances may be in excess of the FDIC limits.
F-18
GLOBAL GREEN, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2013
(UNAUDITED)
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company adopted Statement of Financial Accounting Standards
("SFAS") No. 157 Fair Value Measurements ("SFAS 157"), superseded by
ASC 820-10, which defines fair value, establishes a framework for
measuring fair value and expands required disclosure about fair value
measurements of assets and liabilities. The impact of adopting ASC
820-10 was not significant to the Company's financial statements. ASC
820-10 defines fair value as the exchange price that would be received
for an asset or paid to transfer a liability (an exit price) in the
principal or most advantageous market for the asset or liability in an
orderly transaction between market participants on the measurement
date. ASC 820-10 also establishes a fair value hierarchy, which
requires an entity to maximize the use of observable inputs and
minimize the use of unobservable inputs when measuring fair value. The
standard describes three levels of inputs that may be used to measure
fair value:
Level 1 - Valuation based on quoted market prices in active
markets for identical assets or liabilities.
Level 2 - Valuation based on quoted market prices for similar
assets and liabilities in active markets.
Level 3 - Valuation based on unobservable inputs that are
supported by little or no market activity, therefore
requiring management's best estimate of what market
participants would use as fair value.
In instances where the determination of the fair value measurement is
based on inputs from different levels of the fair value hierarchy, the
level in the fair value hierarchy within which the entire fair value
measurement falls is based on the lowest level input that is
significant to the fair value measurement in its entirety. Our
assessment of the significance of a particular input to the fair value
measurement in its entirety requires judgment, and considers factors
specific to the asset or liability. The valuation of our derivative
liability is determined using Level 1 inputs, which consider (i) time
value, (ii) current market and (iii) contractual prices.
Fair value estimates discussed herein are based upon certain market
assumptions and pertinent information available to management as of
March 31, 2013 and December 31, 2012. The respective carrying value of
certain on-balance-sheet financial instruments approximated their fair
values due to the short-term nature of these instruments. These
financial instruments include cash, accounts payable, accrued expenses
and advance.
INCOME TAXES
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Additionally, the recognition of future tax
benefits, such as net operating loss carryforwards, is required to the
extent that realization of such benefits is more likely than not.
Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which the
assets and liabilities are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates
is recognized in income tax expense in the period that includes the
enactment date.
In the event the future tax consequences of differences between the
financial reporting bases and the tax bases of the Company's assets and
liabilities result in deferred tax assets, an evaluation of the
probability of being able to realize the future benefits indicated by
such asset is required. A valuation allowance is provided for the
portion of the deferred tax asset when it is more likely than not that
some or all of the deferred tax asset will not be realized. In
assessing the realizability of the deferred tax assets, management
considers the scheduled reversals of deferred tax liabilities,
projected future taxable income, and tax planning strategies.
F-19
GLOBAL GREEN, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2013
(UNAUDITED)
The Company files income tax returns in the United States and Florida,
which are subject to examination by the tax authorities in these
jurisdictions. Generally, the statute of limitations related to the
Company's federal and state income tax return is three years. The state
impact of any federal changes for prior years remains subject to
examination for a period up to five years after formal notification to
the states.
Management has evaluated tax positions in accordance with FASB ASC 740,
INCOME TAXES, and has not identified any significant tax positions,
other than those disclosed.
SUBSEQUENT EVENTS
In accordance with FASB ASC 855, SUBSEQUENT EVENTS, the Company
evaluated subsequent events through May 6, 2013, the date the financial
statements were available for issue.
NOTE 4 INTANGIBLE ASSET
The Company accounts for its intangible asset in accordance FASB ASC
350 INTANGIBLES--GOODWILL AND OTHER. The intangible assets consist of
the Licensing Agreement and is carried at an allocated cost, less
accumulated amortization. The Licensing Agreement was executed on
November 29, 2010 between NHIL and GGII, before the Company acquired
the 100% ownership of GGII as described in Note 1. The provisions in
the License Agreement include the Company's responsibilities to protect
the Vaccine information and to assume financial responsibilities for
the acquisition of USDA approval of the Vaccine. The License Agreement
has no expiration date, but is being amortized over the 20 year legal
life of the related patent. As the effective control over GGII did not
change after acquisition by the Company, in accordance with FASB ASC
805, BUSINESS COMBINATIONS, the License Agreement is consolidated at
the book value.
Components of intangible assets at the periods ended are as follows:
March 31, December 31,
2013 2012
-------------------- --------------------
License agreement $ 6,831 $ 6,831
Accumulated amortization (784) (700)
-------------------- --------------------
$ 6,047 $ 6,131
-------------------- --------------------
NOTE 5 TAXES
The components of income tax expense for the periods ended are as
follows:
Inception to
March 31,
March 31, March 31, 2013
2013 2012 (Unaudited)
---------- ---------- -------------
Current tax benefit $ (6,930) $(19,798) $ (124,404)
Deferred tax expense (benefit) - - -
Change in valuation allowance 6,930 19,798 124,404
Use of operating loss carryforward - - -
---------- ---------- -------------
$ - $ - $ -
---------- ---------- -------------
F-20
GLOBAL GREEN, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2013
(UNAUDITED)
The difference between income tax expense computed by applying the
statutory federal income tax rate to earnings before taxes for the
periods ended are as follows:
Inception to
March 31,
March 31, March 31, 2013
2013 2012 (Unaudited)
---------- --------- ------------
Pretax loss at federal statutory rate $(6,266) $(17,903) $ (112,493)
State income benefit,
net of federal benefit (664) (1,895) (11,911)
Change in valuation allowance 6,930 19,798 124,404
---------- --------- ------------
$ - $ - $ -
---------- --------- ------------
The components of deferred taxes are as follows:
March 31, December 31,
2013 2012
------------ -------------
Deferred income tax assets:
Operating loss carryforwards $ 124,404 $ 117,474
Less: valuation allowance (124,404) (117,474)
------------ -------------
Net deferred tax asset $ - $ -
------------ -------------
At March 31, 2013 and December 31, 2012, a valuation allowance was
established for the entire amount of the net deferred tax asset as the
realization of the deferred tax asset is dependent on future taxable
income.
At March 31, 2013, the Company had net operating loss carryforwards for
tax purposes of $330,860, which will expire beginning in 2031, if not
previously utilized.
NOTE 6 EQUITY
In April 2010, the Company authorized the issuance of up to 100,000,000
shares of Preferred Stock at no par value. As of March 31, 2013 and
December 31, 2012, no shares are issued or outstanding.
In May 2010, the Company had a 10-to-1 stock forward split, changing
its par value from $.0001 per share to $.00001 per share. Right after
the said stock split, the Company issued 20,000,000 shares of its
common stock to certain shareholders for services rendered valued at
$200. This is recorded as a non-cash expense in the accompanying
statement of operations.
In November 2010 the Company issued approximately 683 million shares of
common stock, representing 93% of the ownership of the Company, to
NHIL. After the above mentioned issuance, the Company has become a
majority-owned subsidiary of NHIL.
On March 21, 2011, the Company completed a private placement of common
stock to accredited investors and raised $286,000 of working capital.
F-21
GLOBAL GREEN, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2013
(UNAUDITED)
NOTE 7 RELATED PARTY TRANSACTIONS AND COMMITMENTS
On January 2013 the Company entered into a convertible advance with the
Company's Chief Executive Officer and Chairman. The convertible
advance, with a face value of $300,000, bears interest at 5% per annum
and is payable on demand. The convertible advance is convertible, at
the holder's option, into the Company's common or preferred shares
based on the value of the shares at the execution date of the advance.
The convertible advance is valued at the greater of the face value of
the advance or the fair value of the shares, if converted. At March 31,
2013 and December 31, 2012, the convertible advance, was recorded at
$300,000 and $0, respectively. Accrued interest related to this advance
was $3,750 and $0 at March 31, 2013 and December 31, 2012,
respectively, and is included in accounts payable and accrued expenses
on the balance sheet.
Through its wholly-owned subsidiary, GGII, the Company has exclusive
rights to the Licensing Agreement with NHIL, the Company's majority
shareholder. In accordance with this agreement, GGII assumes the
financial responsibility for the acquisition and maintenance of all
patents, as well as USDA's approval of the Vaccine.
NOTE 8 CONTINGENCIES
During the normal course of business, the Company may be exposed to
litigation. When the Company becomes aware of potential litigation, it
evaluates the merits of the case in accordance with FASB ASC 450-20-50,
CONTINGENCIES. The Company evaluates its exposure to the matter,
possible legal or settlement strategies and the likelihood of an
unfavorable outcome. If the Company determines than an unfavorable
outcome is probable and can be reasonably estimated, it establishes the
necessary accruals. As of March 31, 2013, the Company is not aware of
any contingent liabilities that should be reflected in the accompanying
financial statements.
F-22
F. SELECTED FINANCIAL INFORMATION
Not applicable.
G. SUPPLEMENTARY FINANCIAL INFORMATION
Not applicable.
H. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH OUR UNAUDITED
FINANCIAL STATEMENTS AND NOTES THERETO INCLUDED HEREIN. WE CAUTION READERS
REGARDING CERTAIN FORWARD LOOKING STATEMENTS IN THE FOLLOWING DISCUSSION AND
ELSEWHERE IN THIS REPORT AND IN ANY OTHER STATEMENT MADE BY, OR ON OUR BEHALF,
WHETHER OR NOT IN FUTURE FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.
FORWARD-LOOKING STATEMENTS ARE STATEMENTS NOT BASED ON HISTORICAL INFORMATION
AND WHICH RELATE TO FUTURE OPERATIONS, STRATEGIES, FINANCIAL RESULTS OR OTHER
DEVELOPMENTS. FORWARD LOOKING STATEMENTS ARE NECESSARILY BASED UPON ESTIMATES
AND ASSUMPTIONS THAT ARE INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC
AND COMPETITIVE UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH ARE BEYOND OUR
CONTROL AND MANY OF WHICH, WITH RESPECT TO FUTURE BUSINESS DECISIONS, ARE
SUBJECT TO CHANGE. THESE UNCERTAINTIES AND CONTINGENCIES CAN AFFECT ACTUAL
RESULTS AND COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED
IN ANY FORWARD LOOKING STATEMENTS MADE BY, OR ON OUR BEHALF. WE DISCLAIM ANY
OBLIGATION TO UPDATE FORWARD-LOOKING STATEMENTS.
PLAN OF OPERATIONS
We did not have operations prior to January 2009 and we did not have any
revenues during the fiscal years ended December 31, 2012 and 2011. We have
minimal capital, minimal cash, and only our intangible assets consist of our
patents and patent applications, business plan, relationships and contacts. We
are illiquid and need cash infusions from investors or shareholders to provide
capital, or loans from any sources.
Our plan of operations is as follows:
MILESTONES
2ND QUARTER 2013
o Continuation of negotiations with USDA approved vaccine manufacturer.
3RD QUARTER 2013
o Continuing Market Development.
o Manufacturing vaccine batch for the final Efficacy study.
o Perform USDA regulatory Efficacy Study and Potency Testing according
to Model Test
4TH QUARTER 2013
o First USDA product licensing submission.
o USDA creates product file and assigns a Product Code.
o Initiate Vaccine Manufacturing Setup for USDA approved protocol
efficacy testing.
-37-
1ST QUARTER 2014
o USDA Product Outline Review
o Submission of Master Seed to NVSL (USDA/National Veterinary Services
Laboratories) for testing.
o Second USDA product licensing submission with Efficacy Study report.
o Third USDA product licensing submission with Field Safety Report and
final labeling.
o Vaccine Manufacturer is authorized to submit samples to NVSL for
confirmatory testing.
The Company's status regarding its Phase 4 efficacy testing is:
o In the process of negotiating with an USDA approved manufacturer.
o Assure that the requirements from the vaccine manufacturer will meet
the standard batch consistency as defined by the USDA efficacy study.
o The conclusion of the USDA approved large bird efficacy study to be
done by AHPharma which meets the following parameters:
o That the vaccine product can be safely and standardly
commercially applied by the intended customers.
o That the claims are sustainable and reproducible when applied to
larger populations of birds.
o To see if the vaccine can be used in other circumstances such as
a combined treatment with other vaccines.
o Collect and present the data to be analyzed and send results to the
USDA for final approval.
In August 2012, the Company began a study to determine how long a chicken can be
protected against Salmonella after it begins laying eggs. If a layer hen is not
infected with the Salmonella bacteria, then neither the egg, nor the chick, when
it hatches, will have Salmonella. There is a "timelined" vaccine effect that
will be logged and sequenced during the study, beginning from a newly-hatched
chicken, to the 18-20 weeks before the chicken becomes a layer hen, and, after
that, until the end of the hen's productive life.
Our Budget for operations in next year is as follows:
THE VACCINE- FINAL TESTING FOR USDA APPROVAL
Final Testing for USDA approval $ 415,000
Manufacturing Cost of the Vaccine $ 750,000
Compensation for in-house doctors/scientist $ 150,000
ADMINISTRATION
Marketing/Fundraising $ 350,000
Management $ 150,000
Legal and accounting $ 35,000
Office Overhead/Salaries $ 45,000
------------------
TOTAL $ 1,895,000
We will need substantial additional capital to support our proposed future
operations. We have NO revenues. We have NO committed source for any funds as of
date hereof. No representation is made that any funds will be available when
needed. In the event funds cannot be raised when needed, we may not be able to
carry out our business plan, may never achieve sales, and could fail in business
as a result of these uncertainties.
In January 2013, Dr. Mehran Ghazvini, the Company's Chief Executive Officer and
Chairman, advanced a total of $300,000 cash to the Company to support ongoing
operations. At this time, the funds are payable on demand.
-38-
RESULTS OF OPERATIONS
THE YEAR ENDED DECEMBER 31, 2012 COMPARED TO THE YEAR ENDED DECEMBER 31, 2011
During the year ended December 31, 2012 and 2011, the Company did not recognize
any revenues from its operations. Management does not anticipate recognizing any
revenues from the sale of the Salmogenic vaccine, until the final approval of
the USDA has been granted and at that time, the Company will be able to begin
sales and marketing efforts.
During the year ended December 31, 2012, the Company incurred total operating
expenses of $114,900 compared to $191,800 for the year ended December 31, 2011.
The decrease of $76,900 was primarily a result of the increase of $31,034 in
professional fees combined with the $16,555 increase in general and
administrative expenses and the $10,000 increase in consulting fees offset by
the $137,800 decrease in the testing expenses connected the Phase 4 trials being
performed as part of the USDA approval. The increases in professional fees,
general and administrative expenses and consulting fees were a result of our
activities to maintain our SEC reporting status, clear our stock for depositing
with depository trust and our initial activities to identify both a manufacturer
and customers. We expect that we will continue to see an increase in expenses,
as we complete Phase 4 testing and gain final approval of the USDA and begin to
develop our sales and marketing efforts.
During the year ended December 31, 2012, we recognized a net loss of $114,900
compared to $191,800 during the year ended December 31, 2011. The decrease of
$76,900 was a result of the increases and decreases in expenses as discussed
above.
LIQUIDITY
THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S REPORT ON THE COMPANY'S
FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012, AND FOR EACH OF THE YEARS IN THE
TWO-YEAR PERIOD THEN ENDED, INCLUDES A "GOING CONCERN" EXPLANATORY PARAGRAPH,
THAT DESCRIBES SUBSTANTIAL DOUBT ABOUT THE COMPANY'S ABILITY TO CONTINUE AS A
GOING CONCERN.
At December 31, 2012, the Company had total current assets of $5,152, consisting
of $4,027 in cash and prepaid expenses of $1,125 and total current liabilities
of $30,680, consisting of $30,180 in accounts payable and accrued expenses and
$500 due to shareholders. At December 31, 2012, the Company had working capital
deficit of $25,528.
During the year ended December 31, 2012, the Company used $99,333 in funds on
its operational activities. During the year ended December 31, 2012, the Company
recognized a net loss of $114,900, which was adjusted for $336 in amortization
expense. During the year ended December 31, 2011, the Company used $182,640 in
funds in its operational activities. During the year ended December 31, 2011,
the Company recognized a net loss of $191,800, which was adjusted for $336 in
amortization expense.
During the year ended December 31, 2012, the Company did not receive or use
funds from/in its financing activities. During the year ended December 31, 2011,
the Company did receive funds of $286,000 from its financing activities.
During the year ended December 31, 2011, the Company sold 11,247,618 shares of
common stock as part of a private placement at approximately $0.025 per share
and received funds of $286,000.
SHORT- TERM
On a short-term basis, the Company has not generated any revenue or revenues
sufficient to cover operations. For short- term needs the Company will be
dependent on receipt, if any, of offering proceeds.
CAPITAL RESOURCES
The Company has only common stock as its capital resource.
-39-
The Company has no material commitments for capital expenditures within the next
year, however if operations are commenced, substantial capital will be needed to
pay for participation, investigation, exploration, acquisition and working
capital.
NEED FOR ADDITIONAL FINANCING
The Company does not have capital sufficient to meet its cash needs. The Company
will have to seek loans or equity placements to cover such cash needs. Once
manufacturing and sales efforts commence, its needs for additional financing is
likely to increase substantially.
No commitments to provide additional funds have been made by the Company's
management or other stockholders. Accordingly, there can be no assurance that
any additional funds will be available to the Company to allow it to cover the
Company's expenses as they may be incurred.
The Company will need substantial additional capital to support its proposed
operations. The Company has NO revenues. The Company has NO committed source for
any funds as of the date hereof. No representation is made that any funds will
be available when needed. In the event funds cannot be raised when needed, the
Company may not be able to carry out its business plan, may never achieve sales,
and could fail in business as a result of these uncertainties.
LIMITED FINANCING
There is no assurance that the Company will achieve additional monies or
financing will be available in the future or, if available, will be at favorable
terms. In the event that the Company is unable to raise funds through the sale
of its shares, the Company will have substantially less funds available to
engage in sales of its Salmogenic Vaccine business.
The Company may borrow money to finance its future operations, although it does
not currently contemplate doing so. Any such borrowing will increase the risk of
loss to the investor in the event it is unsuccessful in repaying such loans.
CRITICAL ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
The Company considers all investments with a maturity date of three months or
less when purchased to be cash equivalents. There were no cash equivalents at
December 31, 2012 or 2011.
REVENUE RECOGNITION
The Company recognizes revenue on arrangements in accordance with Securities and
Exchange Commission Staff Accounting Bulletin No. 13, "Revenue Recognition" and
Financial Accounting Standards Board's ("FASB") Accounting Standards
Codification ("ASC") 605-15-25, "Revenue Recognition". In all cases, revenue is
recognized only when the price is fixed or determinable, persuasive evidence of
an arrangement exists, the service is performed and collectability is reasonably
assured. For the years ended December 31, 2012 and 2011, and the period from
inception to December 31, 2012, the Company did not report any revenues.
INCOME TAXES
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Additionally, the recognition of future tax benefits, such as net
operating loss carryforwards, is required to the extent that realization of such
benefits is more likely than not. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which the assets and liabilities are expected to be recovered or
-40-
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income tax expense in the period that includes the
enactment date.
In the event the future tax consequences of differences between the financial
reporting bases and the tax bases of the Company's assets and liabilities result
in deferred tax assets, an evaluation of the probability of being able to
realize the future benefits indicated by such asset is required. A valuation
allowance is provided for the portion of the deferred tax asset when it is more
likely than not that some or all of the deferred tax asset will not be realized.
In assessing the realizability of the deferred tax assets, management considers
the scheduled reversals of deferred tax liabilities, projected future taxable
income, and tax planning strategies.
The Company files income tax returns in the United States and Florida, which are
subject to examination by the tax authorities in these jurisdictions. Generally,
the statute of limitations related to the Company's federal and state income tax
return is three years. The state impact of any federal changes for prior years
remains subject to examination for a period up to five years after formal
notification to the states.
Management has evaluated tax positions in accordance with FASB ASC 740, INCOME
TAXES and has not identified any significant tax positions, other than those
disclosed.
INTANGIBLE ASSETS
The Company accounts for intangible assets in accordance FASB ASC 350
INTANGIBLES--GOODWILL AND OTHER. Intangible assets consist of the Licensing
Agreement and is carried at an allocated cost, less accumulated amortization.
The Licensing Agreement is amortized over an estimated useful life of 20 years.
RESULTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2013 COMPARED TO THE THREE MONTHS ENDED
MARCH 31, 2012
During the three months ended March 31, 2013 and 2012, the Company did not
recognize any revenues from it operational activities. Management does not
anticipate recognizing any revenues from the sale of the Salmogenic vaccine,
until the final approval of the USDA has been granted and that time the Company
will be able to begin sales and marketing efforts.
During the three months ended March 31, 2013, the Company incurred operational
expenses of $18,432. During the three months ended March 31, 2012, the Company
incurred operational expenses of $28,016. The decrease of $9,584 was a result of
a $15,365 decrease in professional fees offset by an increase of $1,555 in
general and administrative expenses, a $3,750 increase in interest expense and a
$450 increase in stock transfer agent fees. The decrease in professional fees
was a result of the Company's completion of its successful efforts to get its
common stock listed for trading with FINRA and for holding with Depository Trust
in the early part of 2012.
During the three months ended March 31, 2013, the Company recognized a net loss
of $18,432 compared to a net loss of $28,016 during the three months ended March
31, 2012. The decrease of $9,584 was a direct result of the decrease in
operational expenses discussed above.
LIQUIDITY
THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S REPORT ON THE COMPANY'S
FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012, AND FOR EACH OF THE YEARS IN THE
TWO-YEAR PERIOD THEN ENDED, INCLUDES A "GOING CONCERN" EXPLANATORY PARAGRAPH,
THAT DESCRIBES SUBSTANTIAL DOUBT ABOUT THE COMPANY'S ABILITY TO CONTINUE AS A
GOING CONCERN.
At March 31, 2013, the Company had total current assets of $263,813, consisting
of $263,063 in cash and prepaid expenses of $750 and total current liabilities
of $307,689, consisting of $7,189 in accounts payable and accrued expenses, $500
due to shareholders and a $300,000 convertible advance to related party. At
March 31, 2013, the Company had working capital deficit of $43,876.
-41-
During the three months ended March 31, 2013, the Company used $40,964 in funds
in it operational activities. During the three months ended March 31, 2012, the
Company recognized a net loss of $18,432 which was adjusted for $84 in
amortization expense. During the three months ended March 31, 2012, the Company
used $22,065 in its operations, a net loss of $28,016 was adjusted for the
non-cash item of $84 in amortization expense.
During the three months ended March 31, 2013, the Company received $300,000 from
its financing activities.
In January 2013, the Company entered into a convertible advance with the
Company's Chief Executive Officer and Chairman, Dr. Ghazvini. The convertible
advance, with a face value of $300,000, bears interest at 5% per annum and is
payable on demand. The convertible advance is convertible, at the holder's
option, into the Company's common or preferred shares based on the value of the
shares at the execution date of the advance At March 31, 2013, the convertible
advance, was recorded at $300,000. Accrued interest related to this advance was
$3,750 at March 31, 2013 and is included in accounts payable and accrued
expenses on the balance sheet.
SHORT TERM
On a short-term basis, the Company has not generated any revenue or revenues
sufficient to cover operations. For short term needs the Company will be
dependent on receipt, if any, of offering proceeds.
CAPITAL RESOURCES
The Company has only common stock as its capital resource.
The Company has no material commitments for capital expenditures within the next
year, however if operations are commenced, substantial capital will be needed to
pay for participation, investigation, exploration, acquisition and working
capital.
NEED FOR ADDITIONAL FINANCING
The Company does not have capital sufficient to meet its cash needs. The Company
will have to seek loans or equity placements to cover such cash needs. Once
manufacturing and sales efforts commence, its needs for additional financing is
likely to increase substantially.
No commitments to provide additional funds have been made by the Company's
management or other stockholders. Accordingly, there can be no assurance that
any additional funds will be available to the Company to allow it to cover the
Company's expenses as they may be incurred.
SIGNIFICANT ACCOUNTING POLICIES
REVENUE RECOGNITION
The Company recognizes revenue on arrangements in accordance with Securities and
Exchange Commission Staff Accounting Bulletin Topic 13, REVENUE RECOGNITION and
FASB ASC 605-15-25, REVENUE RECOGNITION. In all cases, revenue is recognized
only when the price is fixed or determinable, persuasive evidence of an
arrangement exists, the service is performed and collectability is reasonably
assured. The Company did not report any revenues from inception to March 31,
2013.
EARNINGS PER SHARE
The Company has adopted ASC 260-10-50, EARNINGS PER SHARE, which provides for
calculation of "basic" and "diluted" earnings per share. Basic earnings per
share includes no dilution and is computed by dividing net income or loss
available to common shareholders by the weighted average common shares
outstanding for the period. Diluted earnings per share reflect the potential
dilution of securities that could share in the earnings of an entity. Basic and
diluted losses per share were the same at the reporting dates as there were no
common stock equivalents outstanding at March 31, 2013 or March 31, 2012.
-42-
I. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURES
Not applicable.
J. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
K. DIRECTORS AND EXECUTIVE OFFICERS
NAME AGE POSITION TERM
--------------------------- ----- -------------------------------------- -------
Dr. Mehran P. Ghazvini, DC 48 President, CEO, CFO, Treasurer and Annual
Chairman
Dr. Rene M. Reed, DC, NMD 65 Vice President, Secretary and Director Annual
Dr. Konky Sotomayor, DVM 56 Vice President - Research & Annual
Development and Director
DR. MEHRAN P. GHAZVINI, DC, PRESIDENT, CEO, CFO, TREASURER AND CHAIRMAN OF THE
BOARD:
Dr. Ghazvini has been President, CEO, CFO, Treasurer and Chairman of the Board
of Global Green, Inc. since December 2010. He has been a doctor of Chiropractic
in his own practice, Premier Health Clinic & Rehab of Tallahassee, since 1997.
Dr. Ghazvini's education background includes:
o Bachelor of Science, University of New York 1994
o Doctor of Chiropractic - Life University 1995
o Doctor of Naturopathic Medicine - Florida College of Integrated
Medicine 2003
He serves as CEO for Nutritional Health Institute Laboratories, since 2006.
He is qualified to hold the positions of President, Chief Executive Officer,
Chief Financial Officer, Treasurer and Chairman of the Board of the Company
based on his involvement in the business since 1982. In the last 29 years he
served as officer in business in a range of industries, such as real estate and
construction, but has also owned his own chiropractic clinic. Dr. Ghazvini has
served as the Chief Executive Officer of the Company's majority shareholder
Nutritional Health Institute Laboratories, as the majority shareholder NHIL has
appointed Dr. Ghazvini as an officer and director for his experience in running
and managing well-established and start-up businesses combined with his
knowledge and experience with the development and USDA approval of the Sotomayor
vaccine gained from his years with NHIL.
DR. RENE M. REED, DC, NMD, VICE PRESIDENT, SECRETARY AND DIRECTOR:
Dr. Reed has been Vice President and Director of the Company since December
2010. Dr. Reed has been in private practice since 1979 as Dr. Rene' M. Reed, DC,
DABCO, NMD. Dr. Reed attended the University of Central Florida (formerly
Florida Technological University), where he earned his BS in Business
Administration - 1972. Dr. Reed's professional qualifications and postgraduate
studies include:
o National College of Chiropractic, Lombard, IL, 5 yr program, Doctor of
Chiropractic, graduated April 1979
-43-
o Internship in Orthopedic Surgery, Cook County Hospital, Chicago, IL,
1979
o Orthopedic Program, Los Angeles College of Chiropractic, 4-year
program, 1981-1985
o Awarded Fellowship as Board Eligible Chiropractic Orthopedist
o Passed Diplomate Chiropractic Orthopedic Boards - Part I, 1988
o Passed Diplomate Chiropractic Orthopedic Boards - Part II, 1989;
earned Postgraduate Degree Status of D.A.B.C.O., Diplomate American
Board of Chiropractic Orthopedists course.
o Florida College of Integrative Medicine, Orlando, FL, Doctor of
Naturopathic Medicine (NMD) Nov 2003 (5336 didactic hours; 730
clinical hours in Integrative Family Medicine)
Dr. Reed has been Vice President of NHIL (Nutritional Health Institute
Laboratories) since 2006.
Dr. Reed has served as the Vice President of Company's majority shareholder
Nutritional Health Institute Laboratories, as the majority shareholder NHIL has
appointed Dr. Reed as an officer and director for his experience in running and
managing well-established and start-up businesses combined with his knowledge
and experience with the development and USDA approval of the Sotomayor vaccine
gained from his years with NHIL.
DR. KONKY SOTOMAYOR, DVM, VICE PRESIDENT OF RESEARCH & DEVELOPMENT AND DIRECTOR
In January 2013, Dr. Konky Sotomayor, DVM was appointed to the Board of
Directors and appointed the Vice President of Research and Development. On
August 15, 2012, Dr. Sotomayor was appointed the Chief Scientist of the Company.
Dr. Sotomayor is the developer of the Company's Salmogenics Vaccine and has
worked in private laboratory and development positions since 1979. He is a
principal of Nutritional Health Industries Laboratories, LLC, the Company's
majority shareholder. During the last 5 years he has focused primarily on the
development of the Salmogenics Vaccine with Nutritional Health Industries
Laboratories, LLC.
He graduated with a Doctor of Veterinary Medicine and Zootechny in the
Veterinary Medician Faculty from the State University of Guayaquil in Ecuador.
He attended the International Science Program of the Lantanisbruk Universitet in
Uppsala, Sweden in 1986.
Our officers are spending up to 30 hours per week on our business at this time.
At such time as the Company is financially capable of paying salaries, it is
anticipated that management will assume full- time roles in the Company's
operations and be paid accordingly.
CONFLICTS OF INTEREST - GENERAL.
Our directors and officers are, or may become, in their individual capacities,
officers, directors, controlling shareholder and/or partners of other entities
engaged in a variety of businesses. Thus, there exist potential conflicts of
interest including, among other things, time, efforts and corporation
opportunity, involved in participation with such other business entities. While
each officer and director of our business is engaged in business activities
outside of our business, the amount of time they devote to our business will be
up to approximately 30 hours per week.
CONFLICTS OF INTEREST - CORPORATE OPPORTUNITIES
Presently no requirement contained in our Articles of Incorporation, Bylaws, or
minutes which requires officers and directors of our business to disclose to us
business opportunities which come to their attention. We have no intention of
merging with or acquiring an affiliate, associate person or business opportunity
from any affiliate or any client of any such person.
-44-
PROJECTED STAFF
STAFFING
Currently, we have no employees aside from the Chief Executive Officer who is
part time. This lean staffing is possible in this phase because of our
determination to outsource all operating functions. Our staff positions will be
filled as budget allows and business demands require, and the positions may be
altered in response to business needs.
L. EXECUTIVE AND DIRECTORS COMPENSATION
COMPENSATION
The following table sets forth certain information concerning compensation of
the President and our most highly compensated executive officers for the years
ended December 31, 2012, 2011 and 2010 ("Named Executive Officers"):
SUMMARY EXECUTIVES COMPENSATION TABLE
NON-EQUITY NON-QUALIFIED
INCENTIVE DEFERRED
STOCK OPTION PLAN COMPENSATION ALL OTHER
SALARY BONUS AWARDS AWARDS COMPENSATION EARNINGS COMPENSATION TOTAL
NAME & POSITION YEAR ($) ($) ($) ($) ($) ($) ($) ($)
------------------- -------- ---------- ------- -------- -------- --------------- -------------- -------------- ------------
Dr. Mehran P. 2012 0 0 0 0 0 0 0 0
Ghazvini, DC, 2011 0 0 0 0 0 0 0 0
President, 2010 0 0 0 0 0 0 0 0
CEO, CFO,
Treasurer
Dr. Rene M. Reed, 2012 0 0 0 0 0 0 0 0
DC, NMD, Vice- 2011 0 0 0 0 0 0 0 0
President, 2010 0 0 0 0 0 0 0 0
Secretary
Dr.Konky 2012 0 0 0 0 0 0 0 0
Sotomayor, VP of 2011 0 0 0 0 0 0 0 0
R&D 2010 0 0 0 0 0 0 0 0
------------------
Drs. Ghazvini, Reed and Sotomayor do not have employment agreements with the
Company nor do they receive compensation for their services from the Company or
from the Company's majority shareholder, NHIL.
-45-
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
The following table sets forth certain information concerning outstanding equity
awards held by the President and our most highly compensated executive officers
for the year ended December 31, 2012 (the "Named Executive Officers"):
OPTION AWARDS STOCK AWARDS
--------------------------------------------- -------------------------------------
Equity
incentive
Equity plan
incentive Equity awards:
plan incentive Market
awards: plan or
Number of Number of Number Market awards: payout
Number of securities securities of value Number value
securities underlying underlying shares of of of
underlying unexercised unexercised Option Option or shares unearned unearned
unexercised options unearned exercise expiration units of shares, shares,
Name options (#) options price date of units units units
(#) unexercis- (#) ($) stock of or or
exercise- able that stock other others
able have that rights rights
not have that that
vested not have have
(#) vested not not
($) vested vested
(#) ($)
----------------------- ---------- ------------ ----------- --------- ---------- -------- -------- --------- ---------
Dr. Mehran P. 0 0 0 0 0 0 0 0 0
Ghazvini, DC,
President, CEO, CFO,
Treasurer
Dr. Rene M. Reed, DC, 0 0 0 0 0 0 0 0 0
NMD, Vice President,
Secretary
Dr. Konky Sotomayor, 0 0 0 0 0 0 0 0 0
VP of R & D
DIRECTOR COMPENSATION
The following table sets forth certain information concerning compensation paid
to our directors for services as directors, but not including compensation for
services as officers reported in the "Summary Executives Compensation Table"
during the year ended December 31, 2012:
Non-equity Non-qualified
Fees earned incentive deferred
or paid in Stock Option plan compensation All other
Name cash awards ($) awards ($) compensation earnings compensation Total
($) ($) ($) ($) ($)
---------------- ------------- ------------- ------------- --------------- -------------- --------------- ------------
Dr. Mehran P. 0 0 0 0 0 0 0
Ghazvini, DC
Dr. Rene M. 0 0 0 0 0 0 0
Reed, DC, NMD
Dr. Konky 0 0 0 0 0 0 0
Sotomayor, DVM
All of our officers and/or directors will continue to be active in other
companies. All officers and directors have retained the right to conduct their
own independent business interests.
-46-
It is possible that situations may arise in the future where the personal
interests of the officers and directors may conflict with our interests. Such
conflicts could include determining what portion of their working time will be
spent on our business and what portion on other business interest. Any
transactions between us and entities affiliated with our officers and directors
will be on terms which are fair and equitable to us. Our Board of Directors
intends to continually review all corporate opportunities to further attempt to
safeguard against conflicts of interest between their business interests and our
interests.
We have no intention of merging with or acquiring an affiliate, associated
person or business opportunity from any affiliate or any client of any such
person.
Directors receive no compensation for serving.
M. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AS OF JUNE 15,
2013
--------------------------------------------------------------------------------
(a) Beneficial owners of five percent (5%) or greater, of our common
stock.
There are currently 3,000,000,000 common shares authorized of which 745,761,432
are outstanding at June 15, 2013.
The following sets forth information with respect to ownership by holders of
more than five percent (5%) of our common stock:
NAME AND ADDRESS OF AMOUNT AND NATURE OF
TITLE OF CLASS BENEFICIAL OWNER (1) BENEFICIAL OWNER PERCENT OF CLASS
------------------------------- ------------------------------ ------------------------ -----------------
Common shares Dr. Mehran P. Ghazvini, 604,707,057 81.08%
President, DC,
CEO, CFO, Treasurer and
Director (2)
Common shares Dr. Rene' M. Reed, DC, Vice 604,707,057 81.08%
President, Secretary and
Director (2)
Common shares Dr. Konky Sotomayor, DVM 604,707,507 81.08%
Vice President Research &
Development and Director (2)
Common shares Nutritional Health Institute 604,707,057 81.08%
Laboratories (2)
------------------------ ------------------
All Directors and Executive 604,707,057 (2) 81.08%
Officers as a Group (3
persons)
-------------------------------
(1) Address is c/o Global Green, Inc., 2820 Remington Green Circle,
Tallahassee, Florida 32308.
(2) Dr. Mehran P. Ghazvini, DC, Dr. Rene' M. Reed, DC and Dr. Konky
Sotomayor, DVM are either officers, directors and/or beneficial
shareholders of Nutritional Health Institute Laboratories and they
disavow any beneficial ownership in the equity in NHIL held by family
trusts. Nutritional Health Institute Laboratories holds 604,707,057
shares of common stock directly.
-47-
(b) The following sets forth information with respect to our common stock
beneficially owned by each Officer and Director, and by all Directors and
Officers as a group as of June 15, 2013.
NAME AND ADDRESS OF AMOUNT AND NATURE OF
TITLE OF CLASS BENEFICIAL OWNER (1) BENEFICIAL OWNER PERCENT OF CLASS
------------------------------- ------------------------------ ------------------------ ----------------------------
Common shares Dr. Mehran P. Ghazvini, 604,707,057 81.08%
President, DC,
CEO, CFO, Treasurer and
Director (2)
Common shares Dr. Rene' M. Reed, DC, Vice 604,707,057 81.08%
President, Secretary and
Director (2)
Common shares Dr. Konky Sotomayor, DVM 604,707,507 81.08%
Vice President Research &
Development and Director (2)
Common shares Nutritional Health Institute 604,707,057 81.08%
Laboratories (2)
------------------------ ----------------------------
All Directors and Executive 604,707,057 (2) 81.08%
Officers as a Group (3
persons)
-------------------------------
(1) Address is c/o Global Green, Inc., 2820 Remington Green Circle,
Tallahassee, Florida 32308.
(2) Dr. Mehran P. Ghazvini, DC, Dr. Rene' M. Reed, DC and Dr. Konky
Sotomayor, DVM are either officers, directors and/or beneficial
shareholders of Nutritional Health Institute Laboratories and they
disavow any beneficial ownership in the equity in NHIL held by family
trusts. Nutritional Health Institute Laboratories holds 604,707,057
shares of common stock directly.
NHIL is registering 100,000,000 shares (13.41% of the issued and outstanding) of
the 604,707,057 shares it holds as part of this Registration Statement. NHIL has
registered 6,461,705 shares as part of Post-Effective Amendment to Registration
Statement No. 333-174853. At the time of this filing, NHIL has no arrangements
to sell these shares. If it sells all of the shares that are being or have been
registered, it will hold 498,245,352 shares of common stock (66.81% of the total
issued and outstanding common stock.)
N. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS, PROMOTERS AND CONTROL PERSONS
Other than the stock transactions discussed above, we have not entered into any
transaction nor are there any proposed transactions in which any of our
founders, directors, executive officers, shareholders or any members of the
immediate family of any of the foregoing have or is to have a direct or indirect
material interest.
There are no promoters being used in relation to this offering. No person who
may, in the future, be considered a promoter of this offering, will receive or
expect to receive assets, services or other considerations from us. No assets
will be, nor expected to be, acquired from any promoter on behalf of us. We have
not entered into any agreements that require disclosure to the shareholders.
NHIL, our majority shareholder, owns the exclusive rights to the Salmogenics
Vaccine and a Salmonella Antigen. The Company has received the exclusive rights
to finish the final phase of study, manufacture, distribute, market and sell the
vaccines by NHIL through a Licensing Agreement with Global Green International,
-48-
the wholly-owned subsidiary of the Company. Under the Licensing Agreement with
NHIL, the Company is responsible for all financial obligations to obtain United
States Department of Agriculture ("USDA") approval.
At December 31, 2012 and 2011, the amounts due to related parties were $500,
respectively.
Dr. Mehran P. Ghazvini, DC, Dr. Rene' M. Reed, DC and Dr. Konky Sotomayor, DVM,
officers and directors of the Company, through direct and indirect ownership,
are majority shareholders of NHIL), the majority shareholder of our Company. As
such, they will be able to control the operations and the direction of the
Company with very little outside influence.
Drs. Ghazvini, Reed and Sotomayor do not hold direct shares of common stock of
the Company. However, they are officers, directors and beneficial shareholders
of Nutritional Health Institute Laboratories and have the ability to vote the
shares of NHIL, our majority shareholder.
o Dr. Mehran P. Ghazvini, DC owns approximately 50% of NHIL, indirectly
through family trusts and has the power to vote those interests on
behalf of the trusts; and
o Dr. Rene' M. Reed, DC owns approximately 16.66% of NHIL, indirectly
through family trusts and has the power to vote those interests on
behalf of the trusts; and
o Dr. Konky Sotomayor, DVM owns approximately 16.66% of NHIL, indirectly
through family trusts and has the power to vote those interests on
behalf of the trusts.
o In January 2013, Dr. Mehran Ghazvini, the Company's Chief Executive
Officer and Chairman, advanced a total of $300,000 cash to the Company
to support ongoing operations. At this time, the funds are payable on
demand.
ITEM 11A. MATERIAL CHANGES
--------------------------
Not applicable.
ITEM 12. INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
-----------------------------------------------------------
Not applicable.
ITEM 12A. DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES
--------------------------------------------------------------------------------
The Florida Business Corporation Act requires us to indemnify officers and
directors for any expenses incurred by any officer or director in connection
with any actions or proceedings, whether civil, criminal, administrative, or
investigative, brought against such officer or director because of his or her
status as an officer or director, to the extent that the director or officer has
been successful on the merits or otherwise in defense of the action or
proceeding. The Florida Business Corporation Act permits a corporation to
indemnify an officer or director, even in the absence of an agreement to do so,
for expenses incurred in connection with any action or proceeding if such
officer or director acted in good faith and in a manner in which he or she
reasonably believed to be in or not opposed to the best interests of us and such
indemnification is authorized by the stockholders, by a quorum of disinterested
directors, by independent legal counsel in a written opinion authorized by a
majority vote of a quorum of directors consisting of disinterested directors, or
by independent legal counsel in a written opinion if a quorum of disinterested
directors cannot be obtained.
The Florida Business Corporation Act prohibits indemnification of a director or
officer if a final adjudication establishes that the officer's or director's
acts or omissions involved intentional misconduct, fraud, or a knowing violation
of the law and were material to the cause of action. Despite the foregoing
limitations on indemnification, the Florida Business Corporation Act may permit
an officer or director to apply to the court for approval of indemnification
even if the officer or director is adjudged to have committed intentional
misconduct, fraud, or a knowing violation of the law.
-49-
The Florida Business Corporation Act also provides that indemnification of
directors is not permitted for the unlawful payment of distributions, except for
those directors registering their dissent to the payment of the distribution.
According to our bylaws, we are authorized to indemnify our directors to the
fullest extent authorized under Florida Law subject to certain specified
limitations.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and persons controlling
us pursuant to the foregoing provisions or otherwise, we are advised that, in
the opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
-50-
[OUTSIDE BACK COVER PAGE OF PROSPECTUS]
DEALER PROSPECTUS DELIVERY REQUIREMENTS
Until one hundred twenty (120) days from the effective date of this Registration
Statement, 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.
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
----------------------------------------------------
We have expended, or will expend fees in relation to this registration statement
as detailed below:
EXPENDITURE ITEM AMOUNT
----------------------------------------------------------- -----------
Attorney Fees $13,000
Audit Fees $7,500
Transfer Agent Fees $2,000
SEC Registration and Blue Sky Registration fees (estimated) $1,000
Printing Costs and Miscellaneous Expenses (estimated) $1,500
-----------
TOTAL $25,000
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
--------------------------------------------------
Global Green, Inc. officers and directors are indemnified as provided by the
Florida Revised Statutes and the bylaws.
Under the Florida Revised Statutes, director immunity from liability to a
company or its shareholders for monetary liabilities applies automatically
unless it is specifically limited by a company's Articles of Incorporation. Our
Articles of Incorporation do not specifically limit the directors' immunity.
Excepted from that immunity are: (a) a willful failure to deal fairly with us or
our shareholders in connection with a matter in which the director has a
material conflict of interest; (b) a violation of criminal law, unless the
director had reasonable cause to believe that his or her conduct was lawful or
no reasonable cause to believe that his or her conduct was unlawful; (c) a
transaction from which the director derived an improper personal profit; and (d)
willful misconduct.
Our bylaws provide that it will indemnify the directors to the fullest extent
not prohibited by Florida law; provided, however, that we may modify the extent
of such indemnification by individual contracts with the directors and officers;
and, provided, further, that we shall not be required to indemnify any director
or officer in connection with any proceeding, or part thereof, initiated by such
person unless such indemnification: (a) is expressly required to be made by law,
(b) the proceeding was authorized by the board of directors, (c) is provided by
us, in sole discretion, pursuant to the powers vested under Florida law or (d)
is required to be made pursuant to the bylaws.
Our bylaws provide that it will advance to any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a director or officer of us, or is or was
serving at the request of us as a director or executive officer of another
company, partnership, joint venture, trust or other enterprise, prior to the
final disposition of the proceeding, promptly following request therefore, all
expenses incurred by any director or officer in connection with such proceeding
upon receipt of an undertaking by or on behalf of such person to repay said
amounts if it should be determined ultimately that such person is not entitled
to be indemnified under the bylaws or otherwise.
-51-
Our bylaws provide that no advance shall be made by us to an officer except by
reason of the fact that such officer is or was our director in which event this
paragraph shall not apply, in any action, suit or proceeding, whether civil,
criminal, administrative or investigative, if a determination is reasonably and
promptly made: (a) by the board of directors by a majority vote of a quorum
consisting of directors who were not parties to the proceeding, or (b) if such
quorum is not obtainable, or, even if obtainable, a quorum of disinterested
directors so directs, by independent legal counsel in a written opinion, that
the facts known to the decision-making party at the time such determination is
made demonstrate clearly and convincingly that such person acted in bad faith or
in a manner that such person did not believe to be in or not opposed to the best
interests of us.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
------------------------------------------------
We have sold securities within the past three years without registering the
securities under the Securities Act of 1933 as shown in the following table:
NAME COMMON SHARES CONSIDERATION DATE OF PURCHASE
============================================== ===================== ============================ ====================
Nutritional Health Institute Laboratories, LLC 664,717,057 Share Exchange Agreement 11/30/10
Steve Winn & Judy Winn 3,571,348 $0.03 3/10/11
Steve Winn & Susan Beth Winn 3,571,348 $0.03 3/10/11
Raymond G. Behm, Jr. 833,333 $0.03 3/11/11
Sarah D'Angelo 1,333,333 $0.03 3/15/11
Michael A. Piacenza 833,333 $0.03 3/15/11
Roje Investments, LLC 1,700,000 $0.03 3/15/11
Dennis Scott 3,124,286 $0.14 3/15/11
George Springer, Jr. 333,333 $0.03 3/15/11
George A. Stermer, Jr. & Jennifer 2,000,000 $0.03 3/15/11
Foley-Stermer
John Welch 1,000,000 $0.03 3/15/11
EXEMPTIONS FROM REGISTRATION FOR UNREGISTERED SALES
All of the above sales by the Company of its unregistered securities were made
by the Company in reliance upon Section 4(2) of the Securities Act of 1933, as
amended (the "1933 Act"). All of the individuals and/or entities that purchased
the unregistered securities were known to the Company and its management,
through pre-existing business relationships, as long standing business
associates and employees. All purchasers were provided access to all material
information, which they requested, and all information necessary to verify such
information and were afforded access to management of the Company in connection
with their purchases. All purchasers of the unregistered securities acquired
such securities for investment and not with a view toward distribution,
acknowledging such intent to the Company. All certificates or agreements
representing such securities that were issued contained restrictive legends,
prohibiting further transfer of the certificates or agreements representing such
securities, without such securities either being first registered or otherwise
exempt from registration in any further resale or disposition.
-52-
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
----------------------------------------------------
-------- ------------------------------------------------------- --------------------
EXHIBIT
NUMBER DESCRIPTION
-------- ------------------------------------------------------- --------------------
3.1 Articles of Incorporation *
3.2 Amended Articles of Incorporation - Name Change *
3.3 Amended Articles of Incorporation - Share Increase *
3.4 Bylaws *
5.1 Opinion re: Legality Filed Herewith
10.1 Share Exchange Agreement *
10.2 License Agreement *
10.3 Cost and Evaluation Agreement **
23.1 Consent of Attorney Filed Herewith
23.2 Consent of Accountant Filed Herewith
99.1 AHPharma, Inc. Executive Summary and Addendum *
101.INS XBRL Instance Document Filed Herewith (1)
101.SCH XBRL Taxonomy Extension Schema Document Filed Herewith (1)
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document Filed Herewith (1)
101.DEF XBRL Taxonomy Extension Definition Linkbase Document Filed Herewith (1)
101.LAB XBRL Taxonomy Extension Label Linkbase Document Filed Herewith (1)
101.PRE XBRL Taxonomy Extension presentation Linkbase Document Filed Herewith (1)
-------- ------------------------------------------------------- --------------------
* Filed as Exhibits with the Company's S-1 Registration Statement filed
with the Securities and Exchange Commission (www.sec.gov), dated June
9, 2011.
** Filed as an Exhibit with the Company's Amended S-1 Registration
Statement filed with the Securities and Exchange Commission
(www.sec.gov), dated August 24, 2011.
(1) Pursuant to Rule 406T of Regulation S-T, this interactive data file is
deemed not filed or part of a registration statement or prospectus for
purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed
not filed for purposes of Section 18 of the Securities Exchange Act of
1934, and otherwise is not subject to liability under these sections.
ITEM 17. UNDERTAKINGS
---------------------
Global Green, Inc. hereby undertakes the following:
To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(a) To include any prospectus required by Section 10(a) (3) of the
Securities Act of 1933;
(b) To reflect in the prospectus any facts or events arising after the
effective date of this registration statement, or most recent
post-effective amendment, which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement; and
(c) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement
or any material change to such information in the registration
statement.
-53-
That, for the purpose of determining any liability under the Securities Act,
each post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
To remove from registration by means of a post-effective amendment any of the
securities being registered hereby which remain unsold at the termination of the
Offering.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to the directors, officers and controlling persons pursuant to the
provisions above, 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, and is, therefore, unenforceable.
Insofar that, for the purpose of determining liability under the Securities Act
of 1933 to any purchaser in the initial distribution of the securities: we
undertake that in a primary offering of securities of the Company pursuant to
this registration statement, regardless of the underwriting method used to sell
the securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, we will be a seller
to the purchaser and will be considered to offer or sell such securities to such
purchaser:
i. Any preliminary prospectus or prospectus of the Company relating to
the offering required to be filed pursuant to Rule 424;
ii. Any free writing prospectus relating to the offering prepared by or on
behalf of the Company or used or referred to by us;
iii. The portion of any other free writing prospectus relating to the
offering containing material information about us or our securities
provided by or on behalf of the Company; and
iv. Any other communication that is an offer in the offering made by us to
the purchaser.
In the event that a claim for indemnification against such liabilities, other
than the payment by us of expenses incurred or paid by one of the directors,
officers, or controlling persons in the successful defense of any action, suit
or proceeding, is asserted by one of the directors, officers, or controlling
persons in connection with the securities being registered, we will unless in
the opinion of our counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification is against public policy as expressed in the Securities Act, and
we will be governed by the final adjudication of such issue.
For determining liability under the Securities Act, to treat the information
omitted from the form of prospectus filed as part of this Registration Statement
in reliance upon Rule 430A and contained in a form of prospectus filed by the
Registrant under Rule 424(b) (1) or (4) or 497(h) under the Securities Act as
part of this Registration Statement as of the time the Commission declared it
effective.
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SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing Form S-1 and authorized this amended Registration
Statement to be signed on our behalf by the undersigned, thereunto duly
authorized, in the City of Tallahassee, State of Florida, on June 19, 2013.
GLOBAL GREEN, INC.
/s/ Dr. Mehran P. Ghazvini, DC June 19, 2013
-------------------------------------------------------------
Dr. Mehran P. Ghazvini, DC
President, Chief Executive Officer (Principal Executive
Officer), Chief Financial Officer (Principal Accounting
Officer), Treasurer, and Chairman of the Board
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates stated.
/s/ Dr. Mehran P. Ghazvini, DC June 19, 2013
-------------------------------------------------------------
Dr. Mehran P. Ghazvini, DC, President, Chief Executive
Officer (Principal Executive Officer), Chief Financial
Officer (Principal Accounting Officer), Treasurer, and
Chairman of the Board
/s/ Dr. Rene M. Reed, DC, NMD June 19, 2013
-------------------------------------------------------------
Dr. Rene M. Reed, DC, NMD, Vice President, Secretary and
Director
/s/ Dr. Konky Sotomayor, DVM
-------------------------------------------------------------
Dr. Konky Sotomayor, DVM, Vice President of Research & June 19, 2013
Development and Director
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