biolargo, inc. (blgo) - super absorbent gel

by:Demi     2019-08-23
biolargo, inc. (blgo)  -  super absorbent gel
The registration number 2017 was submitted to the Securities and Exchange Commission. [---]
United States Securities and Exchange Commission, Washington, DC, 20549 form S-
1 registration statement under the Securities Act of 1933 BIOLARGO, Inc. (
The exact name of the registrant specified in the articles of association)Delaware280065-0159115(
Of a state or another jurisdiction (
First-class standard industry (I. R. S.
Company or organization)
Classification code)
Identification Number)BioLargo, Inc.
Chestnut Street 14921
Westminster Temple CA 92683 (949)643-9540(
The address (including postal code) and telephone number (including area code) of the main executive office of the registrant)
CC: Christopher. Wilson, Esq.
CA 92618 Tel: (Wilson & Oskam, llp91 10 Irving Centre949)752-1100/Fax: (949)752-
1144 cwilson @ wilsonoskam.
ComAgents & Company Limited
Suite 1201 Wilmington 600 Orange Street 19801 (302)575-0877(
Name, address (including zip code) and telephone number (including area code) of the service agent)
Approximate commencement date proposed for sale to the public: from time to time after this registration statement is declared effective.
If, under Rule 415th of the Securities Act of 1933, any securities registered on this form will be delayed or continuously provided, please select the following box:☐If this form is submitted under rule 462 to register additional securities issued (b)
Under the Securities Act, check the box below to list the Registration Statement Number of the Securities Act for the early valid registration statement of the same issue.
☐If this form is post-
Valid amendments submitted under rule 462 (c)
Under the Securities Act, check the box below to list the Registration Statement Number of the Securities Act for the early valid registration statement of the same issue.
☐If this form is post-
Valid amendments submitted under rule 462 (d)
Under the Securities Act, check the box below to list the Registration Statement Number of the Securities Act for the early valid registration statement of the same issue.
☐Indicate by check mark whether the registrant is a large accelerated file manager, a non-accelerated file manager
A smaller reporting company or an emerging growth company.
See the definition of "large accelerated reporting companies", "Small reporting companies" and "emerging growth companies" in rule 12b
2 of the Trading Act.
Big speed filer:☐Speed up filer:☐Non
Speed up filer:☐Smaller reporting companies: XIf, an emerging growth company, indicate by check mark whether the registrant chooses not to use the extended transition period to comply with any new or revised financial accounting standards provided under section VII (a)(2)(B)
The Trading Act.
☐The calculation of the registered amount will be registered as the highest quotation per share (1)
Proposedmaximumaggready offeringprice (1)
The par value of common stock is $0.
$00067 per share, $977,996 per share for sale to Besaw Derby.
455 $10,000,000 $1,159 (1)
Estimated only for the purposes of calculating the registration fee based on Rule 45 7 (a)and (c)
Under the revised Securities Law of 1933.
The information in this prospectus is incomplete and may be changed.
These securities shall not be sold until the registration declaration submitted to the Securities and Exchange Commission takes effect.
This prospectus is not an offer to sell these securities, nor is it an offer to buy them in any state that does not allow an offer or sale. PROSPECTUS (
Subject to completion)
Date: September 15, 2017 prospectus 21,977,996 ordinary share capital prospectus deals with offers and sales of up to 21,977,996 ordinary shares with a par value of $0.
Biolargo, Inc. 00067
Delaware company of Lincoln Park Capital Fund Co. , Ltd. , which we call "Lincoln Park" or "Selling Shareholders" in the prospectus ".
"The sale of shares of common stock provided by shareholders has or may be issued under the August 25, 2017 purchase agreement we entered into with Lincoln Park. (
For a description of the agreement, see "Lincoln Park deal" below, for more information about Lincoln Park, see "Selling Shareholders ").
The price of the stock sold at Lincoln Park will be determined by the current market price of the stock or the negotiated transaction.
According to this prospectus, we do not sell any securities and do not receive any proceeds from the sale of shares by shareholders.
We may receive total proceeds under the purchase agreement up to $10,000,000 from any sales made to Lincoln Park pursuant to the purchase agreement after the date of this prospectus.
The selling shareholder may sell the common stock described in this prospectus in a variety of different ways and at different prices.
For more information on how the selling shareholder sells shares of common stock registered under this prospectus, see the "issuance plan ".
The selling shareholder is the "underwriter" in the second section "(a)(11)
The revised Securities Law of 1933.
We will pay for registered shares including legal and accounting fees.
See "distribution plan ".
Since January 23, 2008, our common stock has been quoted on the off-site market "OTCQB (
Previously referred to as "OTC bulletin board" and referred to as "OTC market" in this prospectus ")
Under the trade symbol "BLGO.
"On September 13, 2017, our last report of common stock on the OTC market was priced at $0. 51.
The securities provided in this prospectus involve a high level of risk.
Before purchasing our common stock, you should consider the risk factors that start on page 3.
Neither the Securities and Exchange Commission nor any National Securities Commission has approved or rejected these securities and has not passed on the adequacy or accuracy of this prospectus.
Any statement to the contrary is a criminal offence.
The date of this prospectus is September 15, 2017. Summary of content list 1 Risk Factors 4 warning notes on forward-looking statements 12. use Program 12. dividend policy government status and results 36 executive compensation 38 security ownership of certain beneficial owners and management 45 certain relationships and description of related party transactions 46 capital stocks 47 sale of stock holder assignment plan 52 securities transactions committee on
1 Part 2-unless otherwise specified, the information not required in the prospectus is set at page 2017 and we expect our affairs to change after that date.
In addition to the offer contained in this prospectus, we do not authorize any person to provide any information or make any statements.
If anyone provides you with any information or statements relating to this offer, please do not use them as information authorized by us.
This prospectus is not an offer to sell our common stock in any state or other jurisdiction to any person who makes an illegal offer.
The following summary highlights the selected information in this prospectus and may not contain all the information that is important to you.
In order to fully understand our business and this prospectus, you should read this prospectus carefully, including the financial statements and the relevant instructions at the beginning of the F-page1.
When we mention "BioLargo", "company", "we" and "our" in the prospectus, we mean BioLargo company
Delaware corporation and its subsidiaries, BioLargo Life Technologies, Inc.
A California company, smellsNo-More, Inc.
BioLargo Water, Inc. , California, United States of America
A company in California
BioLargo Water, Inc.
Canadian company)
BioLargo maritime Solutions Limited
California company BioLargo development
, California company, BioLargo Engineering, Science & Technology Co. , Ltd. , Tennessee Co. , Ltd. and Clyra Medical Technology Co. , Ltd.
A company in California
This prospectus contains Forward
Statements and information related to BioLargo.
See page 12 "warning notes on forward-looking statements ".
Our company, biolargo, Inc.
It's a company in Delaware.
Our main administrative office is located at 14921 Chestnut Street.
Westminster, California 92683.
Our phone number is949)643-9540.
This prospectus covers 21,977,996 shares, all of which are sold by the selling shareholder.
On August 25, 2017, we entered into a purchase agreement with Lincoln Park, which we refer to in the prospectus as a purchase agreement under which Lincoln Park agreed to purchase a total of up to $10,000,000 of common stock from us (
Subject to certain restrictions)
From time to time within the term of the purchase agreement. (
For a description of the agreement, see "Lincoln Park deal" below, see "Selling Shareholders" for more information about Lincoln Park ". )
Also on August 25, 2017, we entered into a registration rights agreement with Lincoln Park, which we call registration rights agreement in the prospectus, under which we have filed a registration statement with SEC, this includes a prospectus registered for resale under the Securities Act of 1933, as amended or under the Securities Act, shares of common stock that have been or may be issued to Lincoln Park under the purchase agreement.
In addition to the 488,998 ordinary shares that we have issued to Lincoln Park under the terms of the purchase agreement, as a cost of its commitment to purchase our common shares under the Purchase Agreement, prior to certain conditions set forth in the purchase agreement, we do not have the right to commence any further sales to Lincoln Park under the purchase agreement, all of these conditions are outside the control of Lincoln Park, including the registration statement that the SEC has declared to be effective including this prospectus.
Thereafter, we can, at our own discretion, instruct Lincoln Park from time to purchase shares of our common stock on any one working day for up to 50,000 shares, in some cases up to $500,000 per purchase, plus other "accelerated amounts ".
Under the purchase agreement, there is no trading volume requirement or restriction, we will control the time and amount of the sale of common stock to Lincoln Park.
The purchase price of shares that may be sold to Lincoln Park under the purchase agreement will be based on the market price of our common stock before the sale time calculated according to the purchase agreement.
For any restructuring, capital restructuring, non-restructuring, the purchase price per share will be adjusted fairly
Cash dividends, stock splits or other similar transactions that occur during the working day used to calculate the price.
We may at any time, at our sole discretion, terminate the purchase agreement free of charge, penalty or fee after one working day notice.
There are no restrictions on future financing, preemptive rights, participation rights, fines or liquidated damages in the purchase agreement or registration rights agreement, but the "variable interest rate transaction" as defined in the purchase agreement is prohibited ".
Lincoln Park shall not transfer or transfer its rights and obligations under the purchase agreement.
Taking into account the signing of the purchase agreement, the company previously issued 488,998 ordinary shares to Lincoln Park as an initial commitment fee and shall issue a maximum of 488,998 committed shares, calculated proportionally when and if Lincoln Park purchased, no additional consideration required (
At the discretion of the company)
A total commitment of $10,000,000.
For example, if we ask Lincoln Park to buy $25,000 in stock at our sole discretion, then we will issue an additional commitment of 1,222 shares, a $25,000 product (
The amount we choose to sell)
Divided by $10,000,000 (
According to the purchase agreement, we can sell the total amount of Lincoln Park)
Multiply by 488,998 (
Total number of additional commitments).
Additional commitment shares will only be issued according to this formula if we choose to sell shares to Lincoln Park as appropriate.
As of September 15, 2017, China had issued 101,268,362 ordinary shares, of which 67,352,623 were held by non-listed companies.
Affiliates, including 488,998 committed shares that we have issued to Lincoln Park under the purchase agreement.
Although the purchase agreement provides that we can sell up to $10,000,000 of common stock to Lincoln Park, our common stock is only 21,977,996 shares under this prospectus, which represents :(i)
We have issued 488,998 shares to Lincoln Park as a commitment fee to make a commitment under the Purchase Agreement ,(ii)
According to the purchase agreement, another 21,000,000 shares may be issued to Lincoln Park in the future, if we sell shares to Lincoln Park under the purchase agreement, and (iii)
488,998 shares as additional committed Shares which may be issued if we sell shares to Lincoln Park under the purchase agreement.
If all 21,977,996 shares provided by Lincoln Park under this prospectus have been issued and issued on the date of publication of this prospectus, the shares will represent 17 shares.
8% and 24 of the total outstanding shares of our common stock.
6% of the total number of outstanding shares held by non-companies
Affiliates, in each case of the date of this agreement.
Depending on the price per share we sell common stock to Lincoln Park, under the purchase agreement, we may be authorized to issue and sell more common stock shares to Lincoln Park than provided in this prospectus.
In this case, if we wish to issue and/or sell to Lincoln Park more than 21,977,996 shares specified in this prospectus, we must first register and resell any such additional shares under the Securities Act, this may cause additional substantial dilution to our shareholders.
The number of shares that Lincoln Park ultimately proposes to resell under this prospectus depends on the number of shares we instruct Lincoln Park to purchase under the purchase agreement.
The purchase agreement also prohibits us from directing Lincoln Park to purchase any common stock, if these shares add up to all other shares of our common stock, the beneficial ownership of Lincoln Park and its affiliates will result in more than 4 beneficial ownership of Lincoln Park and its affiliates at any one point in time.
According to section 13, 99% of the total number of outstanding shares of our common stock (d)
Securities Trading Act of 1934 as amended (
Trade Act), and Rule13d-
We call it a limit on the upper limit of beneficial ownership.
Issuing our common shares in this issue will not affect the rights or privileges of our existing shareholders, except that the economic and voting interests of each of our existing shareholders will be diluted by any such issue.
Although the number of ordinary shares held by our existing shareholders will not decrease, after the issuance of shares to Lincoln Park, the shares owned by our existing shareholders will account for a smaller proportion of our total tradable shares.
Securities offer ordinary shares are provided by the holder of the sale of shares, 977,996 shares, including: Ordinary Shares issued before this offer of common shares, not issued after the implementation of the additional issuance, under the purchase agreement 488,998 shares proceed, 757,370 shares of ProceedsWe will not receive proceeds from the sale of common shares in Lincoln Park in this issue.
We may receive total proceeds under the purchase agreement up to $10,000,000 from any sales made to Lincoln Park pursuant to the purchase agreement after the date of this prospectus.
Under the purchase agreement, any proceeds we receive from sales to Lincoln Park will be used for liquidity needs and R & D in the company's business unit.
See "Use of proceeds ".
Risk factors this investment involves a high level of risk.
For a discussion of factors that should be carefully considered before making an investment decision, see "Risk Factors ".
The off-market symbol "BLGO" RISKFACTORSAn's investment in our common stock is highly speculative and involves a high level of risk and should only be invested by investors who can withstand complete losses.
Before you decide to purchase our common stock, you should carefully consider the following risk factors, as well as other information in this prospectus, including our financial statements and related instructions.
If any of the following risks actually occur, then our business, financial position or operating results may be materially adversely affected and transactions of our common stock may decline, you may lose all or part of your investment.
Risks associated with our business our limited operating history makes it difficult to evaluate our business.
We only have limited historical financial data that can be used as a basis for planning operating expenses and can accurately predict the results of our future operations.
In addition, our limited operating history will make it difficult for investors and securities analysts to assess our business and prospects.
Failure to successfully address these risks and difficulties can seriously hurt us.
We have never made any significant income or a history of losing money, and we cannot assure you that we will always make a profit.
We have not yet received any significant revenue from operations, so we have suffered net losses every year since our inception.
We have used most of our financial resources so far for R & D, general and administrative expenses, and initial sales and marketing activities.
We have funded most of our activities by issuing convertible bonds or stock securities.
We expect that net losses and negative cash flow will continue to exist in the foreseeable future until the time when the license or operating income generates enough to offset the loss of business.
Our ability to make a profit depends on our ongoing R & D, product development, sales and marketing efforts, and our ability to successfully obtain a technical license.
There is no guarantee that our income will be sufficient to make us profitable or that we will remain profitable thereafter.
We may also face unforeseen problems, difficulties, costs or delays in carrying out our business plans.
We need a lot of cash.
Failure to raise foreign funds will have a significant adverse impact on our financial situation and operations.
Our cash needs and expenses will continue to be substantial.
For the six months ended June 30, 2017, our net cash for continuing operations was $2,048,628, and for the period ended December 31, 2016 and 2015, we had net cash of $3,720,912 and $1,883,342, respectively.
These negative cash flows are mainly related to operating losses and to a lesser extent to fluctuations in working capital projects.
We continue to use cash in 2017 and we expect that in the foreseeable future we will need a significant amount of additional funds to meet the needs of working capital to continue to grow. Marketing and licensing our technology and products based on our technology.
Although we have been successful in raising funds in the past, there is no guarantee that we will be able to raise funds successfully in the future.
Failure to raise foreign funds will have a significant adverse effect on our financial position, our operations and our ability to market and sell products.
Our ability to operate continuously depends on our ability to raise capital and ultimately generate cash from operations.
In order to maintain our business, we may need additional funds and we may not be able to continue operating without funds.
As of June 30, 2017, our current capital deficit was $3,175,349.
The independent auditor's report for the year ended December 31, 2016 included an explanatory paragraph on their audit opinion, which states that, our frequent loss due to insufficient operating and working capital concerns our ability to continue to operate.
For the six months ended June 30, 2017, our net cash for continuing operations was $2,048,628, and for the period ended December 31, 2016 and 2015, we had net cash of $3,720,912 and $1,883,342, respectively.
We do not currently have sufficient financial resources to fund our operations or the operations of our subsidiaries.
So we need more money to continue these businesses.
Under our agreement to 36-we may instruct Lincoln Park to purchase shares of common stock worth up to $10,000,000
The monthly period of our common stock is usually as high as 50,000 shares, depending on the market price of our common stock at the time of sale, which may increase to 200,000 shares of our common stock, up to a maximum of $500,000 per purchase, on any working day like this
Let's say we choose to sell 19,607,843 shares to Lincoln Park at the assumed $0 purchase price. 51 per share (
Common stock at the closing price on September 13, 2017)
We will receive a total revenue of about $10,000,000, which is the full commitment under the purchase agreement and there is no need to register additional shares in the future.
However, if we choose to sell common stock to Lincoln Park at an actual per share price lower than the assumed price under the purchase agreement, if there is no need to register more shares in the future, we may not be able to obtain the full promised amount of the total proceeds.
Our dependence on Lincoln Park as a source of funding will depend on many factors, including the current market price of our common stock and the extent to which we are able to obtain working capital from other sources.
If getting enough proof of funding from Lincoln Park is not available or diluted too badly, we need to get another source of funding to meet our working capital needs.
Even under the purchase agreement, we receive the highest commitment of a total of $10,000,000 from the sale of our common stock to Lincoln Park, in order to fully implement our business, operations and development plans, we may need additional funds.
If the financing we need to maintain our working capital needs is not available or costly when we need it, the consequences may have a significant adverse impact on our business, operating results, financial status and prospects.
We issue stock from time to time instead of cash to cover some of our operating expenses.
These issues are diluted to our existing shareholders.
We are a party to the agreement which provides for payment or allows us to choose to pay the Securities to consider the services provided to us.
We often pay stock or stock options to employees, suppliers and consultants, not cash, and we expect to do so in the future.
All of these issues are diluted to our shareholders as they increase (
Or can be added later)
The total number of shares issued and unissued by our common stock, although this arrangement helps us to manage cash flow with increased operating costs, reduced liquidity and further reductions.
Our shareholders face further potential dilution in any new financing.
Any additional equity we raise will dilute the interests of current shareholders and anyone who may become shareholders before financing.
Given the low price of our common stock, this dilution in a large amount of financing may be huge.
Our shareholders face further potential adverse effects of any preferred stock terms that may be issued in the future.
In order to raise funds to pay for or acquire the business, additional shares, including preferred shares, may be issued by our board of directors.
Any preferred stock that we may issue may have voting rights, liquidation preferences, redemption rights and other rights, preferences and privileges.
The rights of our holders of common stock will be subject to the rights of any such holders of preferred stock and in many respects belong to them.
In addition, such preferred shares may have other rights of our common stock, including economic rights, which may have a significant adverse effect on the value of our common stock.
Preferred shares, while providing the ideal flexibility in terms of possible acquisitions and other corporate purposes, may also result in the difficulty for third parties to obtain most of our outstanding voting shares, this delays, delays or prevents changes in control of our company.
In further developing our business, we are considering several specific business opportunities.
None of these opportunities are the subject of the final agreement, most or all of which require us to take on additional funding obligations and there is no funding available at the moment.
In order to advance our business plan, we are currently considering a number of opportunities to promote our business, further develop and expand our technology and license to third parties.
While discussions are under way on these opportunities, no clear agreement has been reached on these opportunities.
There is no guarantee that any such opportunities under discussion will result in a final agreement, or, if a final agreement is reached, those opportunities will be reached on conditions that are in our favor.
In addition, if any of these opportunities result in the final agreement being executed or completed, we may need to spend additional funds beyond our current operating budget to facilitate these efforts.
There is no such financing for such efforts at the moment, and we cannot assure you that any such financing is available, or, if so, whether it will be in the interest of our company.
The cost of maintaining our reporting obligations for public companies is high.
Under the rules and regulations of the SEC, we are obliged to maintain our regular public documents and public reporting requirements in a timely manner.
In order to meet these obligations, we need to continue to raise funds.
Without sufficient funds, we will not be able to comply with these requirements and may no longer be eligible to trade our shares in the public market.
As a listed company, we are responsible for a lot of legal, accounting and other expenses.
Also, Sabans-
The Oakley Act of 2002 and the relevant rules passed by SEC put substantive requirements on listed companies, including certain corporate governance practices and requirements related to internal control of financial reporting, in accordance with sabans-404Oxley Act.
We expect losses in the future and may not be profitable.
While our revenue from product sales is limited, we want revenue from the new products we launch, and ultimately revenue from other licensing or supply agreements, which we expect, in the foreseeable future, net losses and negative cash flow will continue to exist until our products are expanded in the market and are more widely accepted by dealers and customers.
Our current sales level is not enough to meet the financial needs of our business.
We cannot predict when or if the sales volume is sufficient to cover our operating expenses.
With the increase of financial resources, we intend to expand the marketing efforts of our products and we intend to continue to expand our R & D efforts.
So we need to generate a lot of extra income or seek additional financing to fund our business.
This puts forward corresponding requirements for capital.
Our ability to make a profit depends on our efforts to deliver viable products and our ability to successfully bring them to the market, which is what we are currently pursuing.
While our management is optimistic that we will successfully license our technology, we are not sure if we will generate enough revenue to make a profit.
If we are unable to achieve or remain profitable, then we may not be able to meet the expected cash needs and continue to operate.
If we cannot invest enough resources to promote the commercialisation of our technology, our business plans will be affected and may fail.
Because we have limited resources in terms of technology for sales, marketing and licensing work, any delay in these work can jeopardize the future development of technology and the commercialisation of technology.
While our management believes that it can fund commercial efforts by selling our securities and other possible sources of funding, if we fail to successfully bring our technology to market, our ability to generate income will be adversely affected.
If we fail to manage our expected growth effectively, we may not be able to make a profit.
We expect that expansion will continue to be needed to address potential market opportunities for our technology and products.
Our existing infrastructure is limited and non-scalable and, if any, will not be able to support future growth.
There is no guarantee that we will have the funds to create new infrastructure or that any such infrastructure will be scalable enough to manage future growth, if any ).
There is also no guarantee that if we invest in additional infrastructure, we will effectively expand our business or that our systems, procedures or controls will be sufficient to support such expansion.
In addition, if we achieve the expected growth in selling technology for a variety of applications, we will need to provide additional sales and support services to our partners.
Failure to properly manage an increase in customer needs can have a significant adverse effect on customer satisfaction, our ability to perform our contractual obligations, and our operational results.
Some products that contain our technology will require regulatory approval.
The products that our technology may be included in are both regulated and unregulated.
Regulatory applications.
Regulatory approvals for certain applications can be difficult, impossible, time-consuming and/or expensive.
While our management believes that these approvals can be obtained at the federal and state levels, if required, before approval by the FDA or EPA or other regulatory authorities, we may not be able to obtain the commercial revenue that may be required.
Certain specific regulated applications and their use require a high degree of technical analysis and additional third-party verification, and regulatory approval from organizations such as the FDA is required.
Certain applications may also be subject to additional state and local agency regulations, increasing costs and time associated with business strategies.
In addition, most products containing our technology may be sold in the EU (“EU”)
Regulatory approvals from the EU and individual countries may also be required.
All such approvals, including additional testing, are time-
Consumed, expensive, and without a guaranteed result of final regulatory approval.
We need to outsource and rely on third parties to manufacture chemicals, material components or delivery equipment used in our technology, and part of our future success will depend on the timeliness and effectiveness of these third party efforts.
We do not have the financial and human resources or capabilities required to manufacture chemicals that make up our technology.
Our business model requires outsourcing of the manufacture of these chemicals to reduce our capital and infrastructure costs, thus potentially improving our financial position and profitability of our business.
Therefore, we must reach an agreement with other companies that can help us and provide certain capabilities, including procurement and manufacturing capabilities that we do not have.
We may not succeed in building such an alliance under favorable conditions or at all.
Even if we succeed in ensuring these agreements, we may not be able to maintain them.
In addition, any delay in signing an agreement may delay the development and commercialisation of our technology, or even if it enters the market, it will reduce its competitive power.
Any such delay in connection with such future agreements may adversely affect our business.
If either party of our outsourcing of certain functions fails to fulfill its obligations under the agreement with us, the commercial nature of our technology may be delayed or reduced.
If we rely on other companies to produce chemicals used in our technology, or to sell or sell products that contain our technology, we will depend on the timeliness and effectiveness of their efforts.
If either of these parties fails to meet their obligations in a timely and effective manner, the commercialisation of our technology may be delayed or reduced, as we may not have sufficient financial resources or capacity to continue such efforts on our own.
To produce our products, we rely on a small number of key supply components.
All supply ingredients used to make our products are available from multiple suppliers.
However, the commodity prices of these raw materials may change a lot, and if the prices rise, the profits we can generate may fall.
If our manufacturing costs rise significantly, we may be forced to increase the price of the product, which may reduce the acceptance of the product in the market.
If our technology and products are not recognized by the market, we are unlikely to be profitable.
The potential market for products that our technology can be incorporated into is growing rapidly, and we have many successful competitors, including some of the largest and best --
Established companies in the world (
See: "Business Description-Competition. ”)
At this time, our technology is unproven in commercial use, the use of our technology by others, and the sales of our products are nominal.
While CupriDyne Clean, our industrial odor control product, has passed many commercial trials, very few customers have purchased the product and we consider the experience to be early and incomplete.
The commercial success of products that combine our technology will depend on the adoption of our technology by business and consumer end users in various fields.
Market acceptance may depend on many factors, including: ● the willingness and ability of consumers and industry partners to adopt new technologies from companies with little or no history in the industry;
● We are able to convince potential industry partners and consumers that our technology is an attractive alternative to other competitive technologies;
● We are able to license our technology in a commercially effective manner;
● In the process of receiving our products, before we can expand production to obtain economies of scale, we continue to provide the ability to fund operations;
Our ability to overcome brand loyalty.
If the product that contains our technology does not reach the market acceptance level, then the demand for our technology itself may not develop as expected, in which case we are unlikely to make a profit.
Any revenue we may receive in the future is unpredictable, and our operating performance may fluctuate by quarter.
We believe that due to various factors, including: delays in the development of our or third-party products, our future operating results will fluctuate;
Market acceptance of products integrated into our technology;
Changes in the demand and price of products containing our technology;
Competition and pricing pressure from competitive products;
Litigation and results related to our intellectual property.
We expect that as we continue to develop and increase our marketing and licensing activities, our operating expenses will continue to fluctuate significantly in 2017 and beyond.
Although we expect revenue to be obtained in the future by licensing our technology, revenue may decline or not grow as expected, and our operating results may be severely compromised during a specific financial period
In addition, our performance in some quarters can not meet the expectations of stock market analysts and investors.
In this case, our share price is likely to fall.
Our product distribution experience is limited and we rely in part on third parties who may not be able to successfully sell our products.
Our product distribution experience is limited and is partly dependent on product distribution arrangements with third parties.
In our future products, we may only rely on third parties for product sales and distribution.
We also plan to license our technology to certain third parties in order to commercialize certain applications.
We expect that additional distribution agreements and licensing agreements will be entered into in the future and, if any, we may not be able to enter into these additional agreements in accordance with the terms that are in our favor.
In addition, we may have restrictions or no control over the distribution activities of these third parties.
These third parties can sell competing products and may put insufficient sales efforts into our products.
Therefore, our future product sales revenue, if any, will depend on the success of the efforts of these third parties.
We may not be able to attract or retain qualified senior talent.
We are confident that we are currently able to manage our current business with existing management teams.
However, with the expansion of our business scope, we need to obtain
Increase time service for senior management and others.
Highly competitive
There is no guarantee that we can attract or retain qualified senior talents.
Our failure to do so may adversely affect our ability to implement our business plans. As we add full-
Long-time personnel, indirect costs of our salaries and related projects will increase from the current level, and these increases may be huge depending on the number of people we hire and their compensation.
If we lose our key people or are unable to attract and retain more people, we may not be able to make a profit.
Our future success depends to a large extent on our senior management, especially Dennis P.
Calvert, our President and CEO, and Kenneth Rey yard, our chief scientific officer.
Loss of service from these officers or other members of our senior management may significantly delay or prevent the achievement of product development and other business objectives.
Due to the scientific nature of our business, we depend to a large extent on our ability to attract and retain qualified marketing, scientific and technical personnel.
The competition between expertise and technology is fierce.
In our field of activity, it is aimed at qualified personnel.
If we lose the service of key marketing, scientific and technical personnel or fail to recruit successfully, then our business growth can be seriously compromised.
At the moment, we do not retain key personnel insurance for any of our senior management, although management is evaluating the possibility of obtaining such insurance in the future.
Confidential agreements with employees and others may not be sufficient to prevent disclosure of trade secrets and other proprietary information.
To protect our proprietary technology and processes, we rely to a certain extent on confidential agreements with employees, potential licensing partners, potential manufacturing partners, test facilities, universities, consultants, agents and other organizations to whom we disclose proprietary information.
These agreements may not be able to effectively prevent the disclosure of confidential information and may not be able to provide appropriate remedies without authorization to disclose confidential information.
In addition, others may find trade secrets and proprietary information independently, in which case we cannot claim any trade secrets rights against these parties.
Cost and time
In order to enforce and determine the scope of our ownership, consumer litigation may be necessary and may adversely affect our competitive business position if the protection of trade secrets is not obtained or maintained.
Because in addition to patents, we rely on trade secrets and NDA to protect some of our intellectual property rights, and third parties may acquire and improperly use our proprietary information, this is risky for our competitive disadvantage.
We may not be able to detect unauthorized use or take appropriate and timely measures to enforce our intellectual property rights.
We may be subject to claims for product liability.
As a business that produces and sells products for use by consumers and institutions, we may be liable for any damages caused by our products, whether used or not in the intended manner.
Whether there is merit or not, any such claim of responsibility may be time --
Consuming and/or causing expensive litigation.
While we maintain general liability insurance, our insurance may not include the above type of potential claim or may not be sufficient to compensate for all liability that may be assumed.
Any imposition of liability that does not fall within or outside the scope of insurance may damage the results of our business and operations and you may lose part or all of the investment you have made, or maybe made in our company.
Actions by litigation or regulatory authorities may harm our business or distract our management.
Large, complex, or long-lasting litigation can cause us to generate significant spending and distract management.
For example, lawsuits by employees, former employees, shareholders, partners, customers or others, or actions taken by regulators, can be very expensive and seriously disrupt our business.
Such proceedings or actions may be brought against our company and/or our executive officers and directors from time to time.
Such lawsuits and actions are not uncommon and we cannot assure you that we will always be able to resolve such disputes or actions on conditions that are in the interest of our company.
If we are negatively promoted in terms of the safety or effectiveness of the product, our sales may be compromised.
If there is a concern about the safety or effectiveness of any product we sell, whether or not such concern has a generally accepted scientific or peer base
These concerns may adversely affect the market for these products.
Similarly, whether or not these claims are supported by applicable law, negative publicity may result in an increase in the number of product liability claims.
The licensing of our technology or the manufacture, use or sale of products containing our technology may infringe on the patent rights of others, and in the event of an intellectual property dispute, we may be forced to file a lawsuit.
If we infringe or are accused of infringing the patent rights of the other party, we may be required to seek permission in court, defend the infringement or challenge the validity of the patent.
The cost of patent litigation is high and time consuming.
We may not have sufficient resources to complete these operations successfully.
In addition, if we do not have permission to successfully defend the infringement or are unable to infringe on a patent declared invalid, we may suffer substantial monetary losses;
Major delays in marketing our current and proposed product candidates;
Cannot carry out or participate in the manufacture, use or sale of product candidates or processing methods requiring licenses;
Loss of patent protection for our inventions and products;
Or find that our patent is not enforceable, invalid, or the scope of protection is narrowed.
Parties making such claims may be able to obtain injunctive relief, which may effectively prevent our company's ability to further develop or commercialize our current and proposed product candidates in the United States and abroad, and may result in a ruling on substantial damages
Defense of any action or failure to obtain any such permission may cause significant harm to our company.
Regardless of the outcome, litigation can lead to a huge cost of our company and the transfer of work.
Our patent maintenance is expensive and our patent application prosecution is expensive, so we cannot apply for patent protection in many countries.
Our ability to compete effectively depends to a certain extent on our ability to develop and maintain technical know-how, or operate without infringing the exclusive rights of others, or a third party that obtains technical rights owned by others.
Pending patent applications related to our technology may not result in the publication of any patents or any published patents that will provide protection to competitors with similar technologies.
We must hire a patent lawyer to sue our patent application in the United States and international.
International patent protection requires that each foreign patent consultant that we wish to patent protection retain and pay the patent application fee, before or until the deadline for submission under the international Patent Cooperation Treaty (“PCT”).
Therefore, taking into account our existing financial resources and technical needs, we choose to submit patent applications only in foreign countries where we believe that business opportunities require patent applications.
This has and will continue to result in the irrevocable loss of patent rights in all countries except a few foreign jurisdictions.
Patents we receive may be challenged, invalidated or circumvented in the future, or the rights created by these patents may not provide a competitive advantage.
We also rely on trade secrets, technical knowledge.
How to innovate continuously to develop and maintain our competitive position.
Others can independently develop basic and comparable proprietary information and technologies, or otherwise acquire our business secrets.
We face risks associated with future businesses outside the US.
Over time, we may develop business relationships outside of North America, and as these efforts proceed, we will face risks associated with these relationships, such as: Foreign exchange fluctuations;
Political, economic, financial and market instability,
Requirements for import and export licenses;
Trade restrictions;
Increase tariffs and taxes;
High inflation;
Restrictions on returning foreign profits to the United States;
The collection of accounts receivable is difficult and the collection period is long;
The law of intellectual property is not perfect, and the legal protection of intellectual property is missing;
Regulatory requirements;
Not familiar with foreign laws and regulations;
Changes in labor conditions and difficulties in staffing and managing international business.
Fluctuations in the cost of certain raw materials may adversely affect the operation and competitive price advantage of products containing our technology.
Most of the chemicals and other key materials we use in our business, such as minerals, fiber materials and packaging materials, are neither universally scarce nor price sensitive, but the prices of these chemicals and materials may be cyclical.
High water absorption resin (SAP)
Beads are a petrochemical derivative that, despite the current relatively stable prices, has been affected by cyclical scarcity and price fluctuations in recent years.
If our sales volume increases sharply, it may be difficult for us to get SAP beads or other raw materials at a favorable price.
Supply and demand factors that we cannot control usually affect the price of our raw materials.
We try to minimize the impact of price increases through production efficiency and the use of alternative suppliers.
If we are not able to minimize the impact of the increased cost of raw materials, our business, financial position, operating results and cash flow may be materially adversely affected.
Historically, some of our product sales have been severely affected by seasonal and weather fluctuations.
Industrial odor control products have proven to be very effective in controlling volatile organic compounds, which are released by steam generated from the decomposition waste.
This steam is the highest intensity at a temperature between 40 degrees Fahrenheit (
5 degrees Celsius)
140 degrees Fahrenheit (
60 degrees Celsius).
When the weather is cold or precipitation, our customers are not very easy to use our products, probably because the steam is not obvious, or in the case of precipitation, it can be washed or altered.
This leads to unpredictable use and sales patterns.
Risks associated with our common stock the sale or issuance of our common stock to Lincoln Park may result in dilution, as well as the sale of shares of common stock acquired by Lincoln Park, or in the view that such sale may occur, this may lead to a drop in the price of our common stock.
On August 25, 2017, we entered into a purchase agreement with Lincoln Park under which Lincoln Park promised to purchase our common stock up to $10,000,000.
While executing the purchase agreement, we issued 488,998 ordinary shares to Lincoln Park as an initial fee for its commitment to purchase our common shares under the purchase agreement.
The purchase agreement for the sale of the purchase shares can be judged by us to Lincoln Park, from time to time 36-
A one-month period beginning after certain conditions set forth in the purchase agreement have been met, including the SEC's declaration of entry into force including the registration statement of this prospectus.
According to the purchase agreement, the purchase price of the stock we may sell to Lincoln Park will fluctuate according to the price of our common stock.
Depending on the market liquidity at the time, selling these shares could lead to a decline in the trading price of our common stock.
In addition, when Lincoln Park is purchased, our company will issue a maximum of 488,998 committed shares in a pro rata manner without additional consideration (
It's up to us)
A total commitment of $10,000,000.
For example, if we ask Lincoln Park to buy $25,000 in stock at our sole discretion, then we will issue 1,222 Additional promised shares, a $25,000 product (
The amount we choose to sell)
Divided by $10,000,000 (
The total amount we can sell to Lincoln Park according to the purchase agreement)
Multiply by 488,998 (
Total number of additional commitments).
Additional commitment shares will only be issued according to this formula if we choose to sell shares to Lincoln Park as appropriate.
We usually have the right to control the time and number of shares sold to Lincoln Park.
The sale of our common stock (if any) to Lincoln Park will depend on market conditions and other factors that are determined by us.
Under the purchase agreement, we may finally decide to sell all, part or all of our common shares to Lincoln Park.
If we sell shares to Lincoln Park, Lincoln Park may resell all shares after Lincoln Park acquired shares, some of which are or are not at any time or from time to time at its sole discretion.
Therefore, our sale of shares to Lincoln Park may significantly weaken the interests of other holders of our common stock.
In addition, the sale of a large stake in our common stock to Lincoln Park, or the expectation of such a sale, may make it more difficult for us to sell an equity or equity --
Future related securities at a certain time and price, otherwise we may want to influence sales.
Our common stock deals are small and very liquid.
Our stock is currently quoted on the off-market (OTCQB).
Quotations on OTCQB make it more difficult to buy and sell our shares, and from time to time result in a significant decline in the frequency of transactions and volume of transactions.
Continued trading of OTCQB may also adversely affect our ability to obtain financing in the future, as our stock liquidity declines, as well as other restrictions by certain investors on investing in OTCQB trading securities
Although we intend to go public on the Nasdaq Stock Market (“Nasdaq”)
Or when our company is eligible, when it is listed on Nasdaq or other stock exchanges, there is no guarantee that our common shares will be listed.
The market price of our stock may fluctuate.
Because we have very few stock transactions, even in one day, its price will change dramatically in the short term.
The investment in our stock will be affected by this volatility and therefore will face significant risks.
Due to many factors, the market price of our common stock may fluctuate greatly, including: Developments in patents or ownership;
We or our competitors announce technological innovation;
We or our competitors release new products or new contracts;
Due to the development fee level and other factors, the actual or expected changes in our operating results;
Changes in the financial estimates of securities analysts and whether our future earnings have reached or exceeded such estimates;
The status and trends of our industry;
New accounting standards;
(1) overall economic, political, market and other factors;
And the occurrence of any risks described in this prospectus.
Since our stocks are considered "penny stocks", it may be difficult for you to sell them.
Because if the transaction price of our common stock remains below $5, our common stock will not be quoted on the NASDAQ National Market or the NASDAQ Capital Market, nor will it be listed on the National Stock Exchange.
00/share, we expect that in the foreseeable future, the transactions of our common stock will be required by certain rules promulgated by the revised Securities Trading Act of 1934 (
Trade Act)
This requires additional disclosure by the broker
A dealer in any transaction related to a stock defined as a penny stock (
In general, any non-
Nasdaq stock securities with a market price of less than $5.
00/copy, with certain exceptions).
These rules require the delivery of a disclosure schedule explaining the penny stock market and its associated risks prior to any penny stock transaction and the imposition of various sales practice requirements on brokers
Dealers who sell penny shares to people other than established customers and recognized investors (
Usually defined as an investor with a net asset of more than $1,000,000 or an annual income of more than $200,000, or more than $300,000 with a spouse).
For these types of transactions, brokers-
The dealer must make a special suitability decision for the buyer and receive the buyer's written consent to the transaction before the sale. The broker-
The dealer must also disclose the commission payable to the broker
Current bids and offers for dealers and penny stocks, if the broker-
Dealer is the only market
Manufacturer, this company
The dealer must disclose this fact and the broker-
Control of the market by dealers.
Such information must be provided to the customer either orally or in writing before or before the written confirmation of the trade sent to the customer.
Monthly statements must be sent to disclose the most recent price information of the penny stock held in the account and information about the penny stock limited market.
Additional burden on brokers
Such a request can prevent brokers
The trader trades on our common stock, which may severely limit the market liquidity of our common stock and the ability of the holders of common stock to sell the stock.
Since our stock is considered "penny stock", it is difficult for FINRA rules to remove restrictive legends.
Rules formulated by financial industry regulators (FINRA)require broker-
Traders conduct due diligence before storing Unlimited common stock of penny shares, therefore, some brokers-
Traders, including large national companies, refused to deposit previously restricted common shares of penny shares.
Therefore, it may be more difficult for people who buy shares issued by our private securities to store shares in brokerage companies.
Sell the shares in the open market.
Because in the foreseeable future, we will not pay dividends, and shareholders will only benefit from owning common stock if ordinary shares add value.
We have never announced or paid cash dividends to shareholders.
We intend to retain any revenue that may arise in the future to finance operations.
Therefore, any potential investor who is expected to need to receive the current dividend from the investment should not buy our common stock.
Notes on forwarding
Check out the statements contained in this prospectus about our strategy, future operations, future financial position, future revenue, estimated costs, and not historical fact statements, prospects, plans and goals for management move forward
Look at the report.
Words such as "expectation", "belief", "estimate", "expectation", "intention", "possibility", "plan", "project", "will, "Will" and similar expressions are designed to identify forward-
Although not all forward-looking statements
The Looking statement contains these identifying words.
We built all this up.
Statement on our current expectations and forecasts for future events.
While we believe in the future-
These expectations may prove incorrect and all of them are risky and uncertain.
Therefore, you should not rely too much on our progress.
Look at the report.
We include important risks and uncertainties in the warning statements contained in this prospectus, in particular the section entitled "risk factors" referenced in this prospectus.
We believe that these risks and uncertainties may lead to significant differences between actual results or events and the future.
The statement we made.
If one or more of these risks and uncertainties arise, or potential assumptions, predictions, or expectations prove incorrect, actual results, performance, or financial position may occur with significant and adverse estimates or expectations expectedOur forward-
The outlook statement does not reflect the potential impact of future acquisitions, mergers, disposals, joint ventures or investments that we may make.
We do not assume any obligation to update any forwarding
Forward-looking statements contained herein, unless required by law, whether due to new information, future events or other reasons.
Given these risks and uncertainties,
Forward-looking events and circumstances discussed in this prospectus may not occur and actual results may differ materially from expected or expected results
Look at the report. Any forward-
Our forward-looking statements in this prospectus are based solely on the information we currently have and are only published on the date of publication.
This prospectus relates to shares of our common stock that Lincoln Park may offer and sell from time to time.
In this issue, we will not receive any proceeds from the sale of common stock at Lincoln Park.
We may receive total proceeds under the purchase agreement up to $10,000,000 from any sales made to Lincoln Park pursuant to the purchase agreement after the date of this prospectus.
We estimate that, under the purchase agreement, the net proceeds from the sale of our common stock to Lincoln Park will exceed approximately $36-$9,950,000
During the month, assuming that we have sold the full amount of our common stock, we have the right but no obligation to sell it to Lincoln Park under that agreement and other estimated expenses and expenses.
For more information, see "distribution plan" elsewhere in this prospectus ".
We would like to use any proceeds we get under the purchase agreement to help for engineering, scale-
Commercialize our AOS water treatment technology, marketing, sales and working capital, for our subsidiary Odor No More and our CupriDyne cleaning industrial Odor control products our working capital in the R & D department in Canada and general working capital operated by our company.
We have never announced or paid a cash dividend to our shareholders.
We intend to retain any revenue that may arise in the future to finance operations.
The following table lists the actual cash and cash equivalents as of June 30, 2017 and our capitalization (unaudited)
, And adjusted in accordance with the section entitled "Use of proceeds" above to implement the use of the sale of shares and proceeds hereby issued.
You should read this information in conjunction with "Management's Discussion and Analysis of the financial position and results of operations" and the consolidated financial statements and related notes that we appear in the form 10 Quarter Report
Q for the quarter ended June 30, 2017.
Actual as of June 30, 2017 (unaudited)As Adjusted (1)
Cash and cash equivalents shareholder deficit: Convertible preferred stock Series A, $.
Face value 00067, 50,000,000 shares authorized ,-0-
Shares issued and not issued in December 31, 2016 and June 30, 2017. Common stock, $.
00067 face value, 200,000,000 authorized shares, 92,975,970 shares and 99,898,718 shares were issued on December 31, 2016 and June 30, 2017, respectively, and 119,995,559 shares were issued after adjustment. Additional charges
In the deficit of capital accumulation, the deficit of other comprehensive loss shareholders
Controlling equity (Note 6)
As of June 30, 2017, the net tangible book value of the company was $ (3,475,832)
About $ (0. 034)
Common Stock per share.
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