This Annual Report on Form 10-K of Dethrone
Royalty Holdings, Inc. (referred to as the “Company,” “we” or “us”) (formerly Exclusive Building
Services, Inc.) includes forward-looking statements within the meaning of the Securities Exchange Act of 1934 (the “Exchange
Act”). These statements are based on management's beliefs and assumptions, and on information currently available to management.
Forward-looking statements include the information concerning possible or assumed future results of operations of set forth under
the heading
Management's Discussion and Analysis of Financial Condition and Results of Operations
. Forward-looking
statements also include statements in which words such as “expect,” “anticipate,” “intend,”
“plan,” “believe,” “estimate,” “consider” or similar expressions
are used.
Forward-looking statements are not guarantees
of future performance. They reflect our current views and expectations based largely upon the information currently available to
us and are subject to inherent
risks, uncertainties and assumptions. The Company's future results and shareholder values
may differ materially from those expressed in these forward-looking statements. Readers are cautioned not to put undue reliance
on any forward-looking statements. By making these forward-looking statements, we do not undertake to update them in any manner
except as may be required by our disclosure obligations in filings that we make with the Securities and Exchange Commission (the
“SEC”) under the Federal securities laws. Our actual results may differ materially from our forward-looking statements.
Item 1. BUSINESS
We were founded as an unincorporated
DBA in February 1997 and were incorporated as a C corporation under the laws of the State of Nevada on October 11, 2010. The incorporation
effort included the Company issuing 312,500,000 shares of common stock to Patricia G. Skarpa, who founded and managed the business
which had been operating continuously as a DBA since February 1997, and 9,375,000 shares to Hallie Beth Skarpa, our other director,
for services rendered. These services involving the incorporation planning were valued at $10,300. Hallie Beth Skarpa is the daughter
of Patricia G. Skarpa. The day-to-day operations of the Company did not change as a result of the change in legal structure.
On January 10, 2012, the Company incorporated
a wholly-owned subsidiary, TO Sports Innovation, Inc. (“TO”), in Nevada. TO was inactive until March 15, 2012. TO changed
its legal name to Dethrone Beverage, Inc. (“DB”) in September 2012.
DB has now entered into an exclusive
license agreement with Dethrone Royalty, Inc. (the “License Agreement”) giving DB the right to use the Dethrone trademark
worldwide in connection with the manufacture and sale of sports performance or energy drinks along with any other non-alcoholic
beverage under the trade name, Dethrone Beverages.
The License Agreement with Dethrone
Royalty, Inc. is for five years and requires payments as follows:
|
|
Year
|
Royalty
|
1
|
12% of Gross Profit
|
2
|
$50,000 plus 8% of Gross Profit
|
3
|
$100,000 or 6% of Gross profit, whichever is higher
|
4
|
$150,000 or 6% of Gross profit, whichever is higher
|
5
|
$200,000 or 6% of Gross profit, whichever is higher
|
The License Agreement with Dethrone
Royalty, Inc. specifies minimum levels of sales which, if not attained by DB, gives Dethrone Royalty, Inc. the right to terminate
the License Agreement. These minimums are as follows:
|
|
Year
|
Minimum Sales
|
1
|
$ -0-
|
2
|
$3,000,000
|
3
|
$6,000,000
|
4
|
$9,000,000
|
5
|
$12,000,000
|
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The License Agreement with Dethrone
Royalty, Inc. also requires DB to maintain various liability insurance coverage.
The three officers have formulas that
will be used for the initial products that are planned. They have undertaken efforts to raise the financing necessary to manufacture
the initial products using outside contractors and implement marketing programs. The initial amount that will be sought is approximately
$300,000, although no assurances can be given as to the likelihood or timing of raising the needed funds. The initial funds will
be used for:
- Production of bottles, labels and caps,
- Purchase of inventory needed for beverage content,
- Marketing materials,
- Travel
and business expenses, and
- Shipping costs of our first orders.
Spinoff and Related Matters
On March 26, 2012, the Company entered
into an agreement with Patricia G. Skarpa and Hallie Beth Skarpa (the “Agreement”), who were the Company’s officers
and directors, as well as the largest shareholders, under which the Company agreed to sell all of the assets relating to the segment
of its business that provided commercial cleaning services to office buildings in exchange for all of the liabilities, as defined,
of the commercial cleaning business and the return by Patricia G. Skarpa and Hallie Beth Skarpa of an aggregate of 265,625,000
shares of the Company’s common stock. As a result of the Agreement the Company ceased to be engaged in providing commercial
cleaning services to office buildings, and the commercial cleaning operations became a discontinued operation for financial reporting
purposes.
On March 26, 2012, Patricia G. Skarpa
and Hallie Beth Skarpa entered into agreements with Toby McBride and Michael Jay Holly under which they agreed to sell 28,125,000
shares of common stock to each (or an aggregate of 56,250,000 shares). The Company did not receive any proceeds from the
sale of these shares.
Concurrent with the execution of the
Spinoff Agreement described above, the Board of Directors elected Toby McBride and Michael J. Holly as Directors. Mr. McBride was
also appointed as President and Chief Executive Officer, and Mr. Holly was appointed Vice President and Secretary.
Toby McBride
, 44, has over 18 years of experience in
the beverage industry. He has been involved in the launch of product brands, Sobe, Arizona Iced Tea and Xyience. He began his career
with Whole Foods as a National Buyer and left Whole Foods to join Sobe.
Michael Holley
, 37, has been in the beverage industry
for over 16 years. He has been involved in the launch of product brands, Arizona Iced Tea and Xyience. He began his career in the
wine and spirits industry launching new products and calling on key accounts.
Messrs. Holley and McBride each devote
100% of their time to the Company.
Upon electing Messrs. McBride and Holly
to the Board of Directors, Patricia G. Skarpa and Hallie Beth Skarpa each resigned their positions as officers and directors effective
immediately. The resignations of Patricia G. Skarpa and Hallie Beth Skarpa were not in connection with any known disagreement with
us on any matter.
Current Status
We plan on distributing our product
for the first time in November 2012. Initially we will have two flavors of one product and will distribute in California to 7-11's,
gas stations, grocery stores and gyms. We are in disccussions to work with five beverge manufacturers and several companies for
packaging materials. We will ship product to distribtors with net 30 day payment terms.
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We have also entered into an agreement
with Dethrone Royalty, Inc. which:
- Enables us to change our corporate name to Dethrone Royalty Holdings, Inc. (DRH), which we did in September 2012.
- Have
the right to match any offer that Dethrone Royalty, Inc. receives to be acquired.
- Dethrone Royalty, Inc. and the Company
will create links to each other’s websites.
- Dethrone Royalty, Inc. will produce and distribute lines of shirts/clothing
for each sports figure signed as endorsers by the Company
and market the shirts through its normal distribution channels.
The Company will receive commissions equal to 12.5% of the net
sales generated by these shirts.
We have also entered into letters of
intent with several professional sports personalities, including; Jonathan Quick, Demarious Thomas, Michael Goldberg, Aldon Smith,
Pablo Sandoval, Haloti Ngata and Matt Molson, to represent us by endorsing our products. If they and/or others execute agreements
consistent with the letters of intent, they will be compensated by issuances of restricted shares of our common stock.
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Competition
Most of our competitors, which include
well-known companies and established brands like Gatorade, have significantly greater financial and marketing resources than do
we. We will compete in the marketplace using the name recognition of the athletes who endorse our beverages and the taste of the
beverage
There are no assurances that our approach
will be successful.
Intellectual Property
We have no patents or trademarks except
the license to use the “Dethrone” name.
Employees
At July 31, 2012, we had two employees,
Toby McBride and Michael J. Holly , who each devote fulltime to us. There are no written employment contracts or agreements with
Messrs. McBride and Holly.
Contractors and vendors will be used
by us to conduct the manufacturing and distribution aspects of our business.
Item 1A.
RISK
FACTORS
Risks Related to the Business
1. DRH has virtually no financial
resources. Our independent registered auditors’ report includes an explanatory paragraph stating that
there is substantial
doubt about our ability to continue as a going concern.
DRH has virtually no financial resources.
We have negative working capital and a stockholders’ deficit at July 31, 2012. Our independent registered auditors included
an explanatory paragraph in their opinion on our financial statements as of and for the fiscal year ended July 31, 2012 that states
that this lack of resources causes substantial doubt about our ability to continue as a going concern. No assurances can be given
that we will generate sufficient revenue or obtain necessary financing to continue as a going concern.
2. DRH is and will continue to
be completely dependent on the services of our senior officers, Toby McBride and Michael Jay
Holley, the loss of whose services
may cause our business operations currently contemplated to cease, and we will need to
engage and retain qualified employees
and consultants to further implement our strategy.
DRH’s operations and business
strategy are completely dependent upon the knowledge and business connections of Toby McBride and Michael Jay Holley. They are
under no contractual obligation to remain employed by us. If either or both should choose to leave us for any reason or if either
becomes ill and is unable to work for an extended period of time before we have hired additional personnel, our operations will
likely fail. Even if we are able to find additional personnel, it is uncertain whether we could find someone who could develop
our business along the lines described in this prospectus. We will fail without the services of Messrs. McBride and Holley or an
appropriate replacement(s).
We intend to acquire key-man life insurance
on the lives of Messrs. McBride and Holley naming us as the beneficiary when and if we obtain the resources to do so and if they
are insurable. We have not yet procured such insurance, and there is no guarantee that we will be able to obtain such insurance
in the future. Accordingly, it is important that we are able to attract, motivate and retain highly qualified and talented personnel
and independent contractors.
3. Many of our likely competitors
have significantly greater financial and marketing resources than do we.
Many of our likely competitors have
significantly greater financial and marketing resources than do we. Many of these competitors have sophisticated management, are
in a position to purchase inventory at the lowest prices and have the ability to advertise in a wide variety of media, including
television. There are no assurances that our brand will be successful.
4. Our license agreement with
Dethrone Royalty, Inc. specifies minimum levels of sales which must be met. If we lost that License Agreement,
our operations
as currently planned are likely to fail
Our License Agreement with Dethrone
Royalty, Inc. specifies minimum levels of sales which, if not attained, gives Dethrone Royalty, Inc. the right to terminate the
License Agreement. We will market our products very aggressively, but there are no assurances that we will be successful
in meeting the targets set forth in the License Agreement. If we lost that License Agreement, our operations as currently planned
are likely to fail.
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5. We are subject to the periodic
reporting requirements of the Exchange Act that will require us to incur audit fees and legal fees in
connection with the preparation
of such reports. These additional costs could reduce or eliminate our ability to earn a profit.
We are required to file periodic reports
with the SEC pursuant to the Exchange Act and the rules and regulations promulgated thereunder. In order to comply with these requirements,
our independent registered public accounting firm will have to review our financial statements on a quarterly basis and audit our
financial statements on an annual basis. Moreover, our legal counsel will have to review and assist in the preparation of such
reports. The costs charged by these professionals for such services cannot be accurately predicted at this time because factors
such as the number and type of transactions that we engage in and the complexity of our reports cannot be determined at this time
and will have a major effect on the amount of time to be spent by our auditors and attorneys. However, the incurrence of such costs
will obviously be an expense to our operations and thus have a negative effect on our ability to meet our overhead requirements
and earn a profit. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be
harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock, if a
market ever develops, could drop significantly.
In no case will the proceeds of this
offering be sufficient to assist us in any way to meet any portion of these incremental costs of being public.
6. Toby McBride and Michael Jay
Holley, our principal officers, have no significant experience managing a public company and no
meaningful accounting or financial
reporting education or experience and, accordingly, our ability to meet Exchange Act reporting
requirements on a timely basis
will be dependent to a significant degree upon others.
Messrs. McBride and Holley have no significant
experience managing a public company and no meaningful financial reporting education or experience. They are and will be heavily
dependent on engaging and dealing with outside professional advisors, primarily lawyers and financial advisors/accountants who
are and will not be affiliated with our independent auditors. We have no formal arrangements with professionals and cannot provide
any assurances that we will be able to establish arrangements with professionals on terms or costs that are acceptable or affordable
to us.
7. Our internal controls may
be inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being
disseminated to the
public.
Our management is responsible for establishing
and maintaining adequate internal control over financial reporting. As defined in Exchange Act Rule 13a-15(f), internal control
over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial
officer and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles and includes those policies and procedures that:
- pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions
of the
assets of the Company;
- provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of
the Company are being made only in
accordance with authorizations of management and/or directors of the Company; and
- provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the
Company's
assets that could have a material effect on the financial statements.
Our internal controls may be inadequate or ineffective, which
could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public. Investors relying
upon this misinformation may make an uninformed investment decision.
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8. Having only two directors
limits our ability to establish effective independent corporate governance procedures and increases the control
of our president
over operations and business decisions.
We have only two directors, who are
also our principal executive officers. Accordingly, we cannot establish board committees comprised of independent members to oversee
functions like compensation or audit issues. In addition, a tie vote of board members is decided in favor of the chairman, which
gives her significant control over all corporate issues, including all major decisions on operations and corporate matters such
as approving business combinations.
Until we have a larger board of directors
that would include some independent members, if ever, there will be limited oversight of our president’s decisions and activities
and little ability for minority shareholders to challenge or reverse those activities and decisions, even if they are not in the
best interests of minority shareholders.
Risks Related to Our Common Stock
9. Shareholders may be diluted
significantly through our efforts to obtain financing and satisfy obligations through issuance of additional
shares of our common
stock.
We have no committed source of financing.
Wherever possible, our board of directors will attempt to use non-cash consideration to satisfy obligations. In many instances,
we believe that the non-cash consideration will consist of restricted shares of our common stock. Our board of directors has authority,
without action or vote of the shareholders, to issue all or part of the authorized but unissued shares. In addition, if a trading
market develops for our common stock, we may attempt to raise capital by selling shares of our common stock, possibly at a discount
to market. These actions will result in dilution of the ownership interests of existing shareholders may further dilute common
stock book value, and that dilution may be material.
10. The interests of shareholders
may be hurt because we can issue shares of our common stock to individuals or entities that support
existing management with such
issuances serving to enhance existing management’s ability to maintain control of our Company.
Messrs. McBride and Holley own a significant
majority of outstanding shares. In addition, our board of directors has authority, without action or vote of the shareholders,
to issue all or part of the authorized but unissued common shares. Such issuances may be issued to parties or entities committed
to supporting existing management and the interests of existing management which may not be the same as the interests of other
shareholders. Although transactions, other than those described in this prospectus, are not currently being contemplated or discussed,
our ability to issue shares without shareholder approval serves to enhance existing management’s ability to maintain control
of our Company or participate in other transactions, including entering into possible business combinations, without the support
of other shareholders.
11. Our two principal officers
control all corporate activities and can approve all transactions, including mergers, without the approval of
other shareholders.
Messrs. McBride and Holley have a sufficient
number of shares to control all corporate activities and can approve transactions, including possible mergers, issuance of shares
and r compensation levels, without the approval of other shareholders. Their decisions may not be in the best interests of other
shareholders.
12. Our articles of
incorporation provide for indemnification of officers and directors at our expense and limit their liability that may result
in a major cost to us and hurt the interests of our shareholders because corporate resources may be expended for the benefit
of officers
and/or directors.
Our Articles of Incorporation at Article
XI provide for indemnification as follows: "No director or officer of the Corporation shall be personally liable to the Corporation
or any of its stockholders for damages for breach of fiduciary duty as a director or officer; provided, however, that the foregoing
provision shall not eliminate or limit the liability of a director or officer: (i) for acts or omissions which involve intentional
misconduct, fraud or knowing violation of law; or (ii) the payment of dividends in violation of Section 78.300 of the Nevada Revised
Statutes. Any repeal or modification of an Article by the stockholders of the Corporation shall be prospective only, and shall
not adversely affect any limitation of the personal liability of a director or officer of the Corporation for acts or omissions
prior to such repeal or modification."
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We have been advised that, in the opinion
of the SEC, indemnification for liabilities arising under federal securities laws is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification for liabilities arising
under federal securities laws, other than the payment by us of expenses incurred or paid by a director, officer or controlling
person in the successful defense of any action, suit or proceeding, is asserted by a director, officer or controlling person in
connection with our activities, 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 indemnification by us is against public policy as expressed
in the Securities Act and will be governed by the final adjudication of such issue. The legal process relating to this matter if
it were to occur is likely to be very costly and may result in us receiving negative publicity, either of which factors is likely
to materially reduce the market and price for our shares, if such a market ever develops.
13. Currently, there is no established
public market for our securities, and there can be no assurances that any established public market
will ever develop or that
our common stock will be quoted for trading and, even if quoted, it is likely to be subject to significant price
fluctuations.
We have been granted a trading symbol
(DRHC). However, there is and there has never been any established trading market for our common stock. There is currently no established
public market whatsoever for our securities.
Because of the anticipated low price
of the securities being registered, many brokerage firms may not be willing to effect transactions in these securities. Purchasers
of our securities should be aware that any market that develops in our stock will be subject to the penny stock restrictions.
14. Our shares may not become
eligible to be traded electronically which would result in brokerage firms being unwilling to trade them.
We plan to try, through a broker-dealer
and its clearing firm, to become eligible with the Depository Trust Company ("DTC") to permit our shares to trade electronically.
If an issuer is not “DTC-eligible,” then its shares cannot be electronically transferred between brokerage accounts,
which, based on the realities of the marketplace as it exists today (especially the OTCBB), means that shares of a company will
not be traded (technically the shares can be traded manually between accounts, but this takes days and is not a realistic option
for companies relying on broker dealers for stock transactions - like all companies on the OTCBB. What this boils down to is that
while DTC-eligibility is not a requirement to trade on the OTCBB, it is a necessity to process trades on the OTCBB if a company’s
stock is going to trade with any volume. There are no assurances that our shares will ever become DTC-eligible or, if they do,
how long it will take.
15. Any market that develops
in shares of our common stock will be subject to the penny stock regulations and restrictions pertaining to low
priced stocks
that will create a lack of liquidity and make trading difficult or impossible.
Our shares will be considered a “penny
stock.” Rule 3a51-1 of the Exchange Act establishes the definition of a "penny stock," for purposes relevant
to us, as any equity security that has a minimum bid price of less than $5.00 per share or with an exercise price of less than
$5.00 per share, subject to a limited number of exceptions which are not available to us. This classification will severely and
adversely affects any market liquidity for our common stock.
16. The market for penny stocks
has experienced numerous frauds and abuses that could adversely impact investors in our stock.
Company management believes that the
market for penny stocks has suffered from patterns of fraud and abuse. Such patterns include:
- Control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;
- Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;
- "Boiler
room" practices involving high pressure sales tactics and unrealistic price projections by sales persons;
- Excessive and
undisclosed bid-ask differentials and markups by selling broker-dealers; and
- Wholesale dumping of the same securities by
promoters and broker-dealers after prices have been manipulated to a desired level,
along with the inevitable collapse
of those prices with consequent investor losses.
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17. Any trading market that
may develop may be restricted by virtue of state securities “Blue Sky” laws that prohibit trading absent
compliance with individual state laws. These restrictions may make it difficult or impossible to sell shares in those
states.
There is currently no established public
market for our common stock, and there can be no assurance that any established public market will develop in the foreseeable future.
Transfer of our common stock may also be restricted under the securities or securities regulations laws promulgated by various
states and foreign jurisdictions, commonly referred to as “Blue Sky” laws. Absent compliance with such individual state
laws, our common stock may not be traded in such jurisdictions. Because the securities registered hereunder have not been registered
for resale under the blue sky laws of any state, the holders of such shares and persons who desire to purchase them in any trading
market that might develop in the future, should be aware that there may be significant state blue sky law restrictions upon the
ability of investors to sell the securities and of purchasers to purchase the securities. These restrictions prohibit the secondary
trading of our common stock. We currently do not intend to and may not be able to qualify securities for resale in at least 17
states which do not offer manual exemptions (or may offer manual exemptions but may not to offer one to us if we are considered
to be a shell company at the time of application) and require shares to be qualified before they can be resold by our shareholders.
Accordingly, investors should consider the secondary market for our securities to be a limited one.
18. Our board of directors has
the authority, without stockholder approval, to issue preferred stock with terms that may not be beneficial to
common stockholders
and with the ability to affect adversely stockholder voting power and perpetuate their control over us.
Our articles of incorporation allow
us to issue shares of preferred stock without any vote or further action by our stockholders. Our board of directors has the authority
to fix and determine the relative rights and preferences of preferred stock. Our board of directors also has the authority to issue
preferred stock without further stockholder approval, including large blocks of preferred stock. As a result, our board of directors
could authorize the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon
liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stock and the right
to the redemption of the shares, together with a premium, prior to the redemption of our common stock.
19. We do not expect to pay cash
dividends in the foreseeable future.
We have never paid cash dividends on
our common stock. We do not expect to pay cash dividends on our common stock at any time in the foreseeable future. The future
payment of dividends directly depends upon our future earnings, capital requirements, financial requirements and other factors
that our board of directors will consider. Since we do not anticipate paying cash dividends on our common stock, return on your
investment, if any, will depend solely on an increase, if any, in the market value of our common stock.
20. Because we are not subject
to compliance with rules requiring the adoption of certain corporate governance measures, our stockholders
have limited protection
against interested director transactions, conflicts of interest and similar matters.
The Sarbanes-Oxley Act of 2002, as well
as rule changes proposed and enacted by the SEC, the New York and American Stock Exchanges and the Nasdaq Stock Market, as a result
of Sarbanes-Oxley, require the implementation of various measures relating to corporate governance. These measures are designed
to enhance the integrity of corporate management and the securities markets and apply to securities that are listed on those exchanges
or the Nasdaq Stock Market. Because we are not presently required to comply with many of the corporate governance provisions and
because we chose to avoid incurring the substantial additional costs associated with such compliance any sooner than legally required,
we have not yet adopted these measures.
Because none of our directors are independent
directors, we do not currently have independent audit or compensation committees. As a result, these directors have the ability,
among other things, to determine their own level of compensation. Until we comply with such corporate governance measures, regardless
of whether such compliance is required, the absence of such standards of corporate governance may leave our stockholders without
protections against interested director transactions, conflicts of interest, if any, and similar matters and investors may be reluctant
to provide us with funds necessary to expand our operations.
We intend to comply with all corporate
governance measures relating to director independence as and when required. However, we may find it very difficult or be unable
to attract and retain qualified officers, directors and members of board committees required to provide for our effective management
as a result of Sarbanes-Oxley Act of 2002. The enactment of the Sarbanes-Oxley Act of 2002 has resulted in a series of rules and
regulations by the SEC that increase responsibilities and liabilities of directors and executive officers. The perceived increased
personal risk associated with these recent changes may make it more costly or deter qualified individuals from accepting these
roles.
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21. You may have limited access
to information regarding our business because our obligations to file periodic reports with the SEC could
be automatically suspended
under certain circumstances.
As of effectiveness of our registration
statement on August 18, 2011, we are required to file periodic reports with the SEC which will be immediately available to the
public for inspection and copying. Except during the year that our registration statement becomes effective, these reporting obligations
may (in our discretion) be automatically suspended under Section 15(d) of the Exchange Act if we have less than 300 shareholders
and do not file a registration statement on Form 8A (which we have no current plans to file). If this occurs after the year in
which our registration statement becomes effective, we will no longer be obligated to file periodic reports with the SEC and your
access to our business information would then be even more restricted. After this registration statement on Form S-1 becomes effective,
we will be required to deliver periodic reports to security holders. However, we will not be required to furnish proxy statements
to security holders and our directors, officers and principal beneficial owners will not be required to report their beneficial
ownership of securities to the SEC pursuant to Section 16 of the Exchange Act until we have both 500 or more security holders and
greater than $10 million in assets. This means that your access to information regarding our business will be limited.
For all of the foregoing reasons
and others set forth herein, an investment in the Company’s
securities in any market which may develop in the
future involves a high degree of risk. Any person considering an investment in such securities should be aware of these and other
risk factors set forth in this Form 10-K.