(1) | All shares registered pursuant to this registration statement are to be offered by the Selling Security Holder. Pursuant to Rule 416 under the Securities Act of 1933, as amended (the “Securities Act”), this registration statement also covers such indeterminate number of additional shares of the registrant’s Common Stock, $0.0001 par value per share, issued to prevent dilution resulting from stock splits, stock dividends or similar events. | |
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY OUR EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTIONThe registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with section 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTIONof the Securities Act or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said section 8(A), MAY DETERMINE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTILTHE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.may determine.
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offeroffers to buy these securities in any statejurisdiction where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS | SUBJECT TO COMPLETION | DATED APRIL [__], 2018 |
PROSPECTUS
BLACK CACTUS GLOBAL, INC.
ENVOY GROUP CORP.
$37,500
3,000,000 SHARES OF COMMON STOCK
$0.0125 PER SHARE144,649,220 Shares of Common Stock
This registration statement constitutesprospectus relates to the initial public offeringoffer and resale of ENVOY GROUP CORP.up to: (i) 2,793,296 shares of our common stock, par value $0.0001 per share (the “Company”“Common Stock”) issued to Bellridge Capital, L.P. (“Bellridge”) as a commitment fee (the “Commitment Shares”); (ii) 48,400,470 shares of Common Stock underlying those certain Senior Secured Convertible Promissory Notes (the “Notes”) issuable to Bellridge; (iii) 7,894,737 shares of Common Stock underlying that certain common stock purchase warrant (the “November Warrant”) issued to Bellridge; (iv) 560,717 shares of Common Stock underlying that certain financial advisor warrant to purchase common stock (the “FA Warrant”) issued to Aegis Capital Corp., “us”the exclusive financial advisor to the Company (“Aegis”), or “ENVOY GROUP CORP.”as part of Aegis’ financial advisory fee; (v) 28,339,000 shares of Common Stock underlying that certain common stock purchase warrant (the “First April Warrant”) issued to Bellridge; (vi) 28,330,500 shares of Common Stock underlying that certain common stock. ENVOY GROUP CORP. is registering 3,000,000stock purchase warrant (the “Second April Warrant”) issued to Bellridge; and (vii) 28,330,500 shares of common stock at an offering price of $0.0125 per share for a total amount of $37,500. There are no underwriting or broker dealers involvedunderlying that certain Common Stock purchase warrant (the “Third April Warrant”; together with the offering.First April Warrant and the second April Warrant, the “April Warrants”) issued to Bellridge. The Commitment Shares, the Notes, and the November Warrant were issued and/or will be issued to Bellridge pursuant to that that certain Securities Purchase Agreement, dated November 27, 2017, as amended by that certain Amendment to Securities Purchase Agreement, dated April 5, 2018 (collectively, the “November Purchase Agreement”), between the Company and Bellridge. The FA Warrant was issued to Aegis pursuant to that certain Financial Advisory Agreement, dated November 8, 2017 (the “FA Agreement), between the Company and Aegis. The April Warrants were issued to Bellridge pursuant to that certain Securities Purchase Agreement, dated April 5, 2018, as amended by that certain Amendment to Securities Purchase Agreement, dated April 13, 2018 (collectively, the “April Purchase Agreement”), between the Company and Bellridge. The November Warrant, the FA Warrant, and the April Warrants, are collectively referred to herein in the “Warrants”. Bellridge and Aegis are collectively referred to herein as the “Selling Security Holders” and each a “Selling Security Holder”.
The companyWe will offer the securities on a BEST EFFORTS basis,which means that our director and officer will use her best efforts to market and sell the common stock. The shares will be offered at a fixed price of $0.0125 per share for the durationnot receive any of the offering, and there is no minimum number of shares required to be sold to close the offering. The company is not expected to receive enough proceeds from the offering to begin operations; and there is no market for its shares. The Company’s sole officer and director, Ms. Jocelyn Nicholas, will be responsible to market and sell these securities. We are considered a shell company as defined under Rule 405 of the Securities Act, because it is a company with nominal operations and it has assets consisting solely of cash and cash equivalents. Accordingly, there will be illiquidity of any future trading market until the company is no longer considered a shell company, as well as restrictions imposed upon the transferability of unregistered shares outlined in Rule 144(i). Refer to the section entitled “Risk Factors” on page 8.
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Currently, Ms. Jocelyn Nicholas owns 100% of the Company’s common stock. After the offering, Ms. Nicholas will retain a sufficient number of shares to continue to control the operations of the Company.
If all the shares are not sold, there is the possibility that the amount raised may be minimal and might not even cover the costs of the offering which the Company estimates at $9,000. The proceeds from the sale of the securitiesCommon Stock by the Selling Security Holders; however, we will be placed directly intoreceive the Company’s account; any investor who purchases shares will have no assurance that any monies besides their own investment will be subscribed to the prospectus. All proceeds from the sale of the securities are non-refundable, exceptany warrants exercised (if not on a cashless basis) as may be required by applicable laws. The Company will pay all expenses incurred in this offering. There has been no public trading market for the common stock of ENVOY GROUP CORP.described herein.
The Company qualifies asSelling Security Holders identified in this prospectus may offer the shares of Common Stock from time to time through public or private transactions at prevailing market prices or at privately negotiated prices. The Selling Security Holders can offer all, some or none of its shares of Common Stock, thus we have no way of determining the number of shares of Common Stock it will hold after this offering. See “Plan of Distribution.”
Our Common Stock is currently quoted on the OTCQB under the symbol “BLGI”. On April 19, 2018, the last reported sale price of our Common Stock on the OTCQB was $0.11.
We are an “emerging growth company” as definedthe term is used in the Jumpstart Our Business Startups Act which became law in Aprilof 2012 (the “JOBS Act”) and, will be subjectas such, have elected to comply with certain reduced public company reporting requirements. See “Jumpstart Our Business Startups Act” contained herein.requirements for this and future filings.
Investing in our Common Stock involves a high degree of risk. You should review carefully the risks and uncertainties described under the heading “Risk Factors” beginning on page 5 of this prospectus, and under similar headings in any amendments or supplements to this prospectus.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The offering shall terminate on the earlier of (i) the date when the sale of all 3,000,000 shares is completed or (ii) ninety (90) days from the date of this prospectus becomes effective. The Company may, at its discretion, extend the offering for an additional 90 days beyond the ninety (90) days from the effective date of this prospectus.is _______________, 2018
THESE SECURITIES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE
TABLE OF RISK. YOU SHOULD PURCHASE SHARES ONLY IF YOU CAN AFFORD THE COMPLETE LOSS OF YOUR INVESTMENT. PLEASE REFER TO ‘RISK FACTORS ‘BEGINNING ON PAGE 6.CONTENTS
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that which is contained in this Prospectus.
prospectus. This prospectus may be used only where it is legal to sell these securities. The information in this prospectus may only be accurate on the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of securities.
ABOUT THIS PROSPECTUS
The registration statement of which this prospectus forms a part that we have filed with the Securities and Exchange Commission, or SEC, includes exhibits that provide more detail of the matters discussed in this prospectus. You should read this prospectus and the related exhibits filed with the SEC, together with the additional information described under the headings “Where You Can Find More Information” and “Incorporation by Reference” before making your investment decision.
You should rely only on the information provided in this prospectus or in any prospectus supplement or any free writing prospectuses or amendments thereto. Neither we, nor the Selling Security Holders, have authorized anyone else to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. You should assume that the information in this prospectus is ____________, 2013accurate only as of the date hereof. Our business, financial condition, results of operations and prospects may have changed since that date.
Neither we, nor the Selling Security Holders, are offering to sell or seeking offers to purchase these securities in any jurisdiction where the offer or sale is not permitted. Neither we, nor the Selling Security Holders, have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the securities as to distribution of the prospectus outside of the United States.
Information contained in, and that can be accessed through, our web site,www.blackcactusglobal.com, does not constitute part of this prospectus.
This prospectus includes market and industry data that has been obtained from third party sources, including industry publications, as well as industry data prepared by our management on the basis of its knowledge of and experience in the industries in which we operate (including our management’s estimates and assumptions relating to such industries based on that knowledge). Management’s knowledge of such industries has been developed through its experience and participation in these industries. While our management believes the third-party sources referred to in this prospectus are reliable, neither we nor our management have independently verified any of the data from such sources referred to in this prospectus or ascertained the underlying economic assumptions relied upon by such sources. Internally prepared and third-party market forecasts, in particular, are estimates only and may be inaccurate, especially over long periods of time. In addition, the underwriters have not independently verified any of the industry data prepared by management or ascertained the underlying estimates and assumptions relied upon by management. Furthermore, references in this prospectus to any publications, reports, surveys or articles prepared by third parties should not be construed as depicting the complete findings of the entire publication, report, survey or article. The information in any such publication, report, survey or article is not incorporated by reference in this prospectus.
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The following table of contents has been designed to help you find important information contained in this prospectus. We encourage you to read the entire prospectus.
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SUMMARY INFORMATION
This Prospectus, and any supplement to this Prospectus include “forward-looking statements”. To the extent that the information presented in this Prospectus discusses financial projections, information or expectations about our business plans, results of operations, products or markets, or otherwise makes statements about future events, such statements are forward-looking. Such forward-looking statements can be identified by the use of words such as “intends”, “anticipates”, “believes”, “estimates”, “projects”, “forecasts”, “expects”, “plans” and “proposes”. Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. These include, among others, the cautionary statements in the “Risk Factors” section beginning on Page 6 of this Prospectus and the “Management’s Discussion and Analysis of Financial Position and Results of Operations” section elsewhere in this Prospectus.
This summary only highlights selected information contained in greater detail elsewhere in this Prospectus. This summary mayprospectus; it does not contain all of the information that you should consider before investing in our common stock.Common Stock. You should carefully read the entire Prospectus, including “Risk Factors” beginning on Page 6, and the consolidated financial statements,prospectus before making an investment decisiondecision. Throughout this prospectus, the terms the “Company”, “Black Cactus Global”, “we,” “us,” “our,” and “our company” refer to Black Cactus Global, Inc., a Florida corporation.
All dollar amounts refer to US dollars unless otherwise indicated.Company Overview
OUR OFFERINGBlack Cactus Global, Inc. formerly known as Envoy Group Corp. (the “Company”) is a technology development company with a focus on Blockchain, machine learning, crypto currency, and the Internet of Things. We specialize in global development and consulting projects in our key development areas of fintech, digital media, financial services, KYC, AML, cyber security, and healthcare.
We have 9,000,000 shares of common stock issuedThe Company is developing state-of-the-art Blockchain solutions and outstanding. Through this offering we will register 3,000,000 sharesapplications for offeringFintech, Healthcare, Media and Supply Chain using smart contracts and machine learning. The Company’s products and services currently under development include the first fully functional Fiat/Digital Global Financial Trading Platform, a cryptocurrency debit/credit card, know your customer (KYC) identity verification system, as well as versatile Video and Music Blockchain based platform that allows artists and companies get their work out to over 100 online services.
In December 2017, the public. These shares represent additional common stock to be issued by us. We may endeavor to sell all 3,000,000 shares of common stock after this registration becomes effective. The price at which we offer these shares is fixed at $0.0125 per shareCompany acquired an exclusive software license for the durationBlack Cactus blockchain development software platform and related intellectual property (the “Software”) and the Agreement includes a contract with the CEO of Black Cactus LLC to become a Director and Officer of the offering. There is no arrangementCompany. The Company plans to addressuse the possible effect of the offering on the price of the stock. We will receive all proceeds from the sale of the common stock.
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You should rely only upon the information contained in this prospectus. We have not authorized anyoneSoftware platform to provide you with information different from that which is contained in this prospectus. We are offeringcreate a crypto trading exchange to sell common stocksupport crypto and seeking offers to common stock only in jurisdictions where offersfiat currencies, music publishing, distribution, supply chain, medical research and sales are permitted.trials.
BUSINESS SUMMARYCompany Information
We are a development-stage company,The Company was incorporated in the State of Florida on April 8, 2013, as a for-profit company, and electing a fiscal year end2013. The address of April 30. Our business and registeredthe head office is located at 3811 Alden Way, Sarasota, FL 34232. Our telephone number is 941-650-3848. As at July 31 , 2013, we had nominal assets of $ 6,062 and had incurred a net loss of $ 2,938 from April 8, 2013 (date of inception) through July 31, 2013 . The expenses of this offering, includingSuite 200, 8275 South Eastern Avenue, Las Vegas, Nevada 89123. On December 4, 2017, the preparation of this Prospectus and the filing of this registration statement, estimated at $9,000 are being paid for by Ms. Jocelyn Nicholas, (the companies CEO and sole Director), when the company issued 9,000,000 shares of Envoy Group Corp. $0.0001 par value common stock on April 8, 2013 for cash in the amount of $9,000 (per share price of $0.001), and not from this offering. Since our incorporation, the development of our business has been limitedCompany changed its name to organizational matters, the preparation of our business plan, and the preparation of the financial statements and other information presented in this Prospectus. We have not yet taken any concrete steps to implement our business plan. Our ability to implement our business plan is entirely dependent on ability to secure financing, however there is no guarantee that we will be successful in this regard. In order to implement our business plan, we anticipate that we will require not less than $575,000 in financing in addition to the $37,500 ($612,500 in total) that we are seeking to raise through this offering. We have taken no steps to secure the additional financing that we will need to implement our business plan. Furthermore, even if we successfully execute our business and establish operations, there is no guarantee there will be a significant market for our services or that we will achieve significant revenues, if any.
In their audit report dated May 13, 2013; our auditors have expressed an opinion that substantial doubt exists as to whether we can continue as an ongoing business. Because our officers may be unwilling or unable to loan or advance any additional capital to us, we believe that if we do not raise additional capital within 18 months of the effective date of this registration statement, we may be required to suspend or cease the implementation of our business plan. Due to the fact that that there is no minimum investment and no refunds on sold shares, you may be investing in a company that will not have the funds necessary to develop its business strategies. As such, we may have to cease operations and you could lose your entire investment.“Black Cactus Global, Inc.”.
We intend to open a Pilot Adult Day Care Center, in the Sarasota County, Florida area. We intend to develop our business to cater to seniors who can no longer manage independently, or who are isolated and lonely. We believe with life expectancy rising, more and more seniors will require assistance as they age. We intend to provide seniors with a non-residential facility that supports the health, nutritional, social support and daily living needs in a professionally staffed group setting enabling them to enjoy their day while receiving the care and support they need. We plan to have our services to be supervised by registered and/or licensed personnel. We intend the daily activity for our seniors will be tailored to their needs by providing them with supervised activity such as, salon and spa services, current events, speakers, dancing, computer education, arts and crafts, exercising, and many more. We intend to provide meals tailored to the individual senior needs, and transportation if required. After the intended development and implementation of our Pilot center, we intend to replicate this via franchising.
We intend to market our services by advertising in print and electronic media, website, local networking, and by direct sales calls to doctors, nurses, hospitals, religious institutions in our local area. We intend to exhibit at local relevant fairs and shows. We have taken no steps to market our services, to exhibit our services, or to establish a website and there is no guarantee that we will ever be able to do so.
To date we have not commenced providing any services, have not created relationships with any potential personnel, potential customers, consultants, real estate location, or achieved any other goals mentioned in this prospectus toward the achievement of our business plan. Importantly, there is no guarantee that we will succeed in accomplishing any of these goals. In order to accomplish these goals we will require the disclosed financing.
The management believes that at the current level of development, the company can only justify a limited financing. It is management’s belief that although the company was incorporated this year, filed a registration statement with the SEC limited experience in developing an adult day care center, no experience managing a public, reporting company, devoting limited time to develop the company, business plan about complete, insufficient funds to commercialize the business, enough funds to execute the offering, no experience in capital raising. Yet Ms. Jocelyn Nicholas, CEO, sole Director intends to accomplish the company’s goals via a public offering. The reasons for becoming a public company at this time in the Company’s development is that we believe we have the opportunity to raise more capital with friends, family and the investment banking community. The history of our country has been built on small company innovations and we believe that the public route will enable us to achieve our goal to develop our company. We believe with the funds raised through this offering we will be able to advance our business sufficiently to attract more financing, which in turn will provide us with the capital required to fully develop our business.
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We chose going public, so that shareholders of the company benefit from holding shares that are, subject to certain restrictions, freely marketable and liquid.
We believe that the pros of being a public company will improve our financial condition by obtaining money via stock investment that does not have to be repaid, company stock in the form of stock options can be offered to employees and contractors as a meaningful form of incentive compensation, the public market for the company’s shares provides irrefutable valuation of the company on a daily basis, We also believe that the cons of going public is that management loses some of its freedom to act without board approval and approval of a majority of the shareholders in certain matters, SEC reporting ,auditing, edgarizing, attorney and its costs, that the company estimates to be $3,000 to $5,000 annually is more costly then a private company. We believe that weighing both the pros and cons of being a public company, we believe being a public company is important to the growth of Envoy Group Corp.
SUMMARY OF OUR FINANCIAL INFORMATION
The following table sets forth selected financial information, which should be read in conjunction with the information set forth in the “Management’s Discussion and Analysis of Financial Position and Results of Operations” section and the accompanying financial statements and related notes included elsewhere in this Prospectus.
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As indicated in the financial statements accompanying this prospectus, we have had no revenue to date and have incurred only losses since inception. We have had limited operations and have been issued a “going concern” opinion by our auditor, based upon our reliance on the sale of our common stock as the sole source of funds for our future operations.
The Company is electing to not opt out of JOBS Act extended accounting transition period. This may make its financial statements more difficult to compare to other companies.
Pursuant to the JOBS Act of 2012, as an emerging growth company the Company can elect to opt out of the extended transition period for any new or revised accounting standards that may be issued by the PCAOB or the SEC. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the standard for the private company. This may make comparison of the Company’s financial statements with any other public company which is not either an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible as possible different or revised standards may be used .
Emerging Growth Company
The recently enacted JOBS Act is intended to reduce the regulatory burden on emerging growth companies. The Company meets the definition of an emerging growth company and so long as it qualifies as an emerging growth company,” it will, among other things:
be temporarily exempted from the internal control audit requirements Section 404(b) of the Sarbanes-Oxley Act
be temporarily exempted from various existing and forthcoming executive compensation-related disclosures, for example: “say-on-pay”, “pay-for-performance”, and “CEO pay ratio”.
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be temporarily exempted from any rules that might be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or supplemental auditor discussion and analysis reporting;
be temporarily exempted from having to solicit advisory say-on-pay, say-on-frequency and say-on-golden-parachute shareholder votes on executive compensation under Section 14A of the Securities Exchange Act of 1934, as amended;
be permitted to comply with the SEC’s detailed executive compensation disclosure requirements on the same basis as a smaller reporting company; and,
be permitted to adopt any new or revised accounting standards using the same timeframe as private companies (if the standard applies to private companies).
Our company will continue to be an emerging growth company until the earliest of:
the last day of the fiscal year during which we have annual total gross revenues of $1 billion or more;
the last day of the fiscal year following the fifth anniversary of the first sale of our common equity securities in an offering registered under the Securities Act;
the date on which we issue more than $1 billion in non-convertible debt securities during a previous three-year period; or
the date on which we become a large accelerated filer, which generally is a company with a public float of at least $700 million (Exchange Act Rule 12b-2).
RISK FACTORS
Please consider the following risk factors and other information in this prospectus relating to our business and prospects before deciding to invest in our common stock.
This offering and any investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and all of the information contained in this prospectus before deciding whether to purchase our common stock. If any of the following risks actually occur, our business, financial condition and results of operations could be harmed. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment.
We consider the following to be the material risks for an investor regarding this offering. Our company should be viewed as a high-risk investment and speculative in nature. An investment in our common stock may result in a complete loss of the invested amount. Please consider the following risk factors before deciding to invest in our common stock.
Risks Related to our Business
OUR OFFERING IS BEING CONDUCTED BY OUR SOLE OFFICER AND DIRECTOR WITHOUT THE BENEFIT OF AN UNDERWRITER WHO WOULD HAVE CONFIRMED THE ACCURACY OF THE DISCLOSURE IN OUR PROSPECTUS.
We have self-underwritten our offering on a “best efforts” basis, which means: No underwriter has engaged in any due diligence activities to confirm the accuracy of the disclosure in the prospectus or to provide input as to the offering price; our sole officer and director will attempt to sell the shares and there can be no assurance that all of the shares offered under the prospectus will be sold or that the proceeds raised from the offering, if any, will be sufficient to cover the costs of the offering; and there is no assurance that we can raise the intended offering amount.
AS AN “EMERGING GROWTH COMPANY” UNDER THE JOBS ACT, WE ARE PERMITTED TO RELY ON EXEMPTIONS FROM CERTAIN DISCLOSURE REQUIREMENTS.
We qualify as an “emerging growth company” underas defined in the Jumpstart Our Business Startups Act of 2012, or JOBS Act. As a result,Act since we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we arewent public in the US in July 2013. We will remain an emerging growth company we will not be required to; have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; comply with any requirements that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e. ,an auditor discussion and analysis); submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay” and “say-on-frequency”, and; disclose certain executive compensation related items such as correlation between executive compensation and performance and comparisons of the Chief Executive’s compensation to median employee compensation.
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In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
We will remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenuesrevenue exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act, of 1934, which would occur if the market value of our ordinary sharesCommon Stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three yearthree-year period. Pursuant to Section 102 of the JOBS Act, we have provided reduced executive compensation disclosure and have omitted a compensation discussion and analysis from this Report. Pursuant to Section 107 of the JOBS Act, we have elected to utilize the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
Until such time, however, we cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be less active trading market for our common stockWhere You Can Find Us
Our executive offices are located at 8275 S. Eastern Avenue, Suite 200, Las Vegas, Nevada 89123, and our stock price may be more volatile.telephone number is (702) 724-2643. Our website address iswww.blackcactusglobal.com. Information contained on our website does not form part of this prospectus and is intended for informational purposes only.
WE ARE NOT CURRENTLY PROFITABLE AND MAY NOT BECOME PROFITABLE, WHICH MAY RESULT IN A CESSATION OF OPERATIONSRecent Developments
Since acquiring the software license from Black Cactus LLC, the Company has been focusing on launching the Software. Black Cactus Global is a technology development company with a focus on Blockchain, machine learning, crypto currency, and the Internet of Things. We specialize in global development and consulting projects in our key development areas of fintech, digital media, financial services, KYC, AML, cyber security, and healthcare.
Our mission is to pioneer the application of blockchain and overlapping technologies to protect IP and the security of data and financial transactions.
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THE OFFERING
Common Stock to be offered by the Selling Security Holders | 144,649,220 shares of Common Stock consisting of: ● 2,793,296 shares of Common Stock issued as a Commitment Shares; ● 48,400,470 shares of Common Stock, issuable upon conversion of the Notes; ● 7,894,737 shares of Common Stock, issuable upon exercise of the November Warrant; ● 560,717 shares of Common Stock, issuable upon exercise of the FA Warrant; and ● 85,000,000 shares of Common Stock, issuable upon exercise of the April Warrants. | |
Common Stock outstanding before the offering | 166,043,296 shares of Common Stock. | |
Common Stock to be outstanding after giving effect to the issuance of 144,649,220 shares of Common Stock | 307,889,220 | |
Use of Proceeds | We will not receive any of the proceeds from any sale of the shares of Common Stock by the Selling Security Holders. We may receive proceeds in the event any of the November Warrants, the FA Warrant, or the April Warrants are exercised. See “Use of Proceeds.” | |
Risk Factors | The Common Stock offered hereby involves a high degree of risk and should not be purchased by investors who cannot afford the loss of their entire investment. See “Risk Factors” beginning on page 5. | |
Trading Symbol | The Company’s Common Stock is quoted on the OTC Markets QB Market quotation service platform under the symbol “BLGI”. |
The number of shares of Common Stock outstanding is based on an aggregate of 166,043,296 shares outstanding as of April 23, 2018, and excludes the Commitment Shares, the shares of Common Stock issuable upon conversion of the Notes, and the shares of Common Stock issuable upon exercise of the November Warrant, the FA Warrant, and the April Warrants.
For a more detailed description of the Commitment Shares, the November Warrants, the FA Warrant, and the November Purchase Agreement, see “November Private Placement”. For a more detailed description of the April Warrants and the April Purchase Agreement, see “April Private Placement”.
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SUMMARY FINANCIAL DATA
Statement of Operations Data:
|
| Nine Months Ended January 31, |
| Year Ended April 30 |
| ||||||||
|
| 2017 |
| 2016 |
| 2017 |
| 2016 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Revenue |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional fees |
|
| 142,683 |
|
| — |
|
| 25,069 |
|
| 28,927 |
|
General and administrative expenses |
|
| 71,267 |
|
| 48,096 |
|
| 56,965 |
|
| 10,443 |
|
Black Cactus License Fee |
|
| 6,600,000 |
|
| — |
|
| — |
|
| — |
|
Consulting |
|
| 1,638,639 |
|
| — |
|
| — |
|
| — |
|
Product Development and Website Cost |
|
| 2,349,123 |
|
| — |
|
| — |
|
| — |
|
Investor Relations |
|
| 78,917 |
|
| — |
|
| — |
|
| — |
|
Total operating expenses |
|
| 10,880,629 |
|
| 48,096 |
|
| 81,974 |
|
| 39,370 |
|
Other income (expenses): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Accretion of discounts on convertible debentures |
|
| (12,161 | ) |
| — |
|
| — |
|
| — |
|
Interest expense |
|
| (4,037 | ) |
| — |
|
| — |
|
| — |
|
Other expense |
|
| — |
|
| — |
|
| — |
|
| — |
|
Total other expenses |
|
| (16,198 | ) |
| — |
|
| — |
|
| — |
|
Net loss |
|
| (10,889,827 | ) | $ | (48,096 | ) |
| (81,974 | ) | $ | (39,370 | ) |
Net loss per common share |
| $ | (0.10 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) |
Weighted average number of shares outstanding, basic and diluted |
|
| 113,200,543 |
|
| 80,576,000 |
|
| 80,789,041 |
|
| 80,000,000 |
|
Balance Sheet Data:
|
| January 31, 2018 |
| April 30, 2017 |
| ||
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| $ | 11,556 |
| $ | 3 |
|
Prepaid expenses and other assets |
|
| 388,192 |
|
| — |
|
Total assets |
|
| 399,748 |
|
| 3 |
|
Total liabilities |
|
| 1,094,816 |
|
| 105,721 |
|
Additional paid-in capital |
|
| 9,627,699 |
|
| 74,559 |
|
Accumulated deficit |
|
| (11,099,404 | ) |
| (202,577 | ) |
Total stockholders’ equity (deficit) |
| $ | (695,068 | ) | $ | (105,718 | ) |
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RISK FACTORS
An investment our Common Stock is highly speculative and involves a high degree of risk. The risk factors described below summarize some of the material risks inherent in an investment in us. These risk factors are not presented in any particular order of significance. Each prospective investor should carefully consider the following risk factors inherent in and affecting our business and the Offering before making an investment decision. You should also refer to the other information set forth in this prospectus and to the risk factors in our SEC filings.
Risks Related to Our Business and Industry
We currently have no clients to purchase our Adult Day Care services from us. We have not identified any clients and we cannot guarantee we ever will have any clients. Even if we obtain clients, there is no guarantee that we will generateare a profit. If we cannot generatecompany with a profit, we will have to suspend or cease operations. Your entire investment into this company may be lost if we cannot provide services at prices which generate profit.
WE ARE DEPENDENT UPON THE PROCEEDS OF THIS OFFERING TO FUND OUR BUSINESS. IF WE DO NOT SELL ENOUGH SHARES IN THIS OFFERING TO CONTINUE OPERATIONS, THIS COULD HAVE A NEGATIVE EFFECT ON YOUR COMMON STOCK.
Unless we begin to generate sufficient revenues to finance our Adult Day Care Center operations as a going concern, we may experience liquidity and solvency problems. Such liquidity and solvency problems may force us to cease operations if additional financing is not available.
Also, as a public company, we will incur professional and other fees in connection with our quarterly and annual reports and other periodic filings with the SEC. Such costs can be substantial and we must generate enough revenue or raise money from offerings of securities or loans in order to meet these costslimited operating history and our SEC filing requirements.future profitability is uncertain. We are offeringanticipate future losses and negative cash flow, which may limit or delay our securitiesability to the public; however, there is no guarantee that we will be able to sell the securities. And even if we sell the securities, there is no guarantee that the proceeds will be sufficient to fund our planned operations.
OUR LACK OF AN OPERATING HISTORY GIVES NO ASSURANCE THAT OUR FUTURE OPERATIONS WILL RESULT IN PROFITABLE REVENUES, WHICH COULD RESULT IN THE SUSPENSION OR END OF OUR OPERATIONSbecome profitable.
We have noare a company with a limited operating history upon which an evaluation of our future success or failure can be made. Our abilityand have not generated any revenues to achieve and maintain profitability and positive cash flow is dependent upon the completion of this offering and our ability todate. We may never generate revenues through sales of our Adult Day Care Center services.
significant revenues. We have incurred operating losses since our formationinception and expect to incurexperience operating losses and negative operating cash flows for the foreseeable future, and we may not achieve profitability. We also expect to experience negative cash flow for the foreseeable future asfuture. As of January 31, 2018, we fundhad a total accumulated deficit of $(11,099,404). Due to certain risks, we anticipate our operating losses will continue to increase from current levels. Such risks include, but are not limited to, dependence on the growth of use of technology and capital expenditures. As a result we willservices, the need to generate significant revenues in orderestablish the viability of our technologies through testing and through acceptance by the public. To address these risks, we must continue to achieverevise and maintain profitability. We may not be able to generate these revenues or achieve profitabilityupgrade our software and seek recognition of our products in the future. Our failure to achieve or maintain profitability could negatively impact the valueareas of our businessfintech, digital media, financial services, KYC, AML, cyber security and may cause us to go out of business.
IMPACT OF POSSIBLE NEW GOVERNMENT REGULATION MAY HAVE A MATERIAL ADVERSE EFFECT ON THE COMPANY’S FINANCIAL CONDITION OR RESULTS OF OPERATIONS
Adult Day Care providershealthcare. We must comply with Statealso attract, retain, and Local statutes, regulations and licensing requirements. Failure to comply with any such laws or regulations could result in sanctions ranging from fines or corrective orders, which could require significant expenditures by the Company, to license suspension or revocation.
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There is no assurance that final licenses will be obtained. New laws or regulations or changes in existing laws or regulations or their manner of application or enforcement may increase compliance costs to the Company, which could have a material adverse effect on the Company’s financial condition or results of operations.
The Company also is required to comply with the Americans with Disabilities Act (the “ADA”), which prohibits discrimination on the basis of disability in public accommodations and employment. Failure of an adult day care center to comply with the ADA or applicable regulations can subject it to sanctions, which might include fines, corrective orders, probation, or, in more serious cases, suspension or revocation of a center’s license to operate, or an award of damages to private litigants, any of which could require significant expenditures by the Company to bring the Company’s facility into compliance.
AVAILABILITY AND ADEQUACY OF INSURANCE AT ACCEPTABLE RATE. ANY SUCH INADEQUANCY OF OR INABILITY TO OBTAIN INSURANCE COVERAGE COULD HAVE A MATERIAL ADVERSE EFFECT ON THE COMPANY.
As a result of alleged incidents of physical and sexual abuse in the adult daycare industry, and the length of time before the expiration of applicable statutes of limitations for the bringing of abuse and personal injury claims, many operators of adult daycare centers have had difficulty obtaining adequate general liability insurance or have been able to obtain such insurance only at unacceptably high rates. The Company plans to maintain insurance policies which provide for a variety of coverage but will be subject to various limitations, exclusions and deductibles.motivate qualified personnel. There can be no assurance that such insurancewe will be adequate, that insurance premiums forsuccessful in addressing such coverage will not increase, or that inrisks, and the future the Company will be ablefailure to obtain insurance at acceptable rates, if at all. Any such inadequacy of ordo so could lead to an inability to obtain insurance coverage couldmeet our financial obligations and therefore result in bankruptcy and the loss of your entire investment in our common shares.
We have a material adverse effect on the Company’s business, financial condition or result of operations.
THERE CAN BE NO ASSURANCE THAT IN THE FUTURE THE COMPANY WILL BE ABLE TO HIRE AND RETAIN QUILITY STAFFING.limited operating history.
The successCompany was incorporated under the laws of the Company is dependentState of Florida on its continued abilityApril 8, 2013 and has engaged in limited operations to attract and retain quality staff at its adult daycare centers at acceptable compensation levels. There are substantial market pressures on such costs, particularly at the lower end of the pay scale. Any significant increase in the minimum wage would materially impact compensation costs and could have a material adverse effect on the Company’s business, results of operations or financial condition. There can be no assurance that in the futuredate. Accordingly, the Company will be able to hire and retain quality staffing at acceptable compensation levels, or at all.
POSSIBLE ADVERSE PUBLICITY COULD HAVE A MATERIAL ADVERSE EFFECT ON THE COMPANY’S BUSINESS.
Some providers of adult daycare have received negative publicity concerning alleged abuse, inadequate supervision and on-site accidents. Any such adverse publicity relating to the Company or other providers of adult daycare, whether accurate or not, could have a material adverse effect on the Company’s business as a result of, other things, decreased enrollment, inability to attract new enrollees or increased insurance costs.
POSSIBLE LITIGATION COULD HAVE A MATERIAL ADVERSE EFFECT ON THE COMPANY’S BUSINESS
Due to the nature of its business, the Company is and expects that in the future it may be subject to claims and litigation alleging negligence, inadequate supervision or other grounds for liability arising from harm to seniors. In addition, claimants may seek damages from the Company for physical abuse, sexual abuse and other criminal acts allegedly committed by the Company’s employees. There can be no assurance that additional suits will not be filed, that the Company’s insurance will be adequate to cover liabilities resulting from any claim or that any such claim, or the adverse publicity resulting from it will not have a material adverse effect on the Company’s business, financial position or results of operations, including, without limitation, adverse effects caused by increased cost or decreased availability of insurance and decreased demand for the Company’s services.
CHANGES IN DEMOGRAPHIC TRENDS AND ECONOMIC CONDITIONS COULD ADVERSELY IMPACT THE COMPANY’S BUSINESS.
The Company’s revenues depend, in part, on the number of working children who require adult daycare services for their parents. Any change in demographic trends, particularly those related to parents in the workforce or a deterioration in the general economy resulting in a reduction in the work force, could adversely impact the Company as out-of-work children are more likely to discontinue utilization of third party adult daycare services.
BECAUSE WE HAVE NOT DEVELOPED AN ADULT DAY CARE CENTER SERVICE OUR BUSINESS MAY NOT MATERIALIZE.
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We have not developed a Adult Day Care Center Service Business. At this time we have not begun developing our domain name (envoy-corp.com) website. We do not know the exact cost of its execution. In the case of a higher than expected cost of execution, we will not be able to offer our business services. Furthermore, we may find unexpected problems in the process to develop an Adult Day Care Center Services Business. If we are unable to execute the business, we will have to cease our operations, resulting in the complete loss of your investment.
WE ARE A NEW COMPANY WITH NO OPERATING HISTORY AND WE FACE A HIGH RISK OF BUSINESS FAILURE WHICH WOULD RESULT IN THE LOSS OF YOUR INVESTMENT
We are a development stage company formed recently to carry out the activities described in this prospectus and thus havehas only a limited operating history uponwith which an evaluation ofyou can evaluate its prospectus can be made. We have limited business operations. Thus, there is no internal or industry-based historical financial data upon which to estimate our planned operating expenses.
We expect that our results of operations may also fluctuate significantlyand prospects. An investor in the future as a resultCompany must consider its business and prospects in light of a variety of market factorsthe risks, uncertainties and difficulties frequently encountered by early-stage companies, including among others, the entry of new competitors offering a similar business; the availability of motivatedlimited capital, delays in product development, possible marketing and qualified personnel; the initiation, renewalsales obstacles and delays, inability to gain customer and merchant acceptance or expirationinability to achieve significant distribution of our Adult Day Care Center customer base specific economic conditions in the Adult Day Care Center businessproducts and general economic conditions. Accordingly, our future sales and operating results are difficultservices to forecast.
As of the date of this prospectus, we have earned no revenue. Failurecustomers. The Company cannot be certain that it will successfully address these risks. Its failure to generate revenue will cause us to go out of business, which could result in the complete loss of your investment.
BECAUSE WE ARE CURRENTLY CONSIDERED A SHELL COMPANY THERE ARE RESTRICTIONS IMPOSED UPON THE TRANSFERABILITY OF UNREGISTERED SHARES.
We are currently, considered a shell company within the limits of Rule 12b-2 pursuant to the Securities Exchange Act of 1934 and Rule 405 pursuant to the Securities Act of 1933 in that we currently have nominal operations and nominal assets. Accordingly, there will be illiquidity of any future trading market until we are no longer considered a shell company, as. As a result of our classification as a shell company, our investors are not allowed to rely on the “safe harbor” provisions of Rule 144, promulgated pursuant to the Securities Act of 1933, so as not to be considered underwriters in connection with the sale of our securities until one year from the date that we cease to be a shell company. We can provide no assurance or guarantee that we will cease to be a shell company and, accordingly, we can provide no assurance or guarantee that there will be a liquid market for our shares. Resultantly, investors may not be able to sell their shares and may lose their entire investment.
ADVERSE DEVELOPMENTS IN THE USA AND GLOBAL ECONOMY RESTRICTING THE CREDIT MARKETS MAY MATERIALLY AND NEGATIVELY IMPACT OUR BUSINESS.
An overall decline in the economy or the occurrence of a natural disaster could decrease the need for our services. This could restrict our success in attract our senior clients and could significantly harm our business, financial condition and liquidity.
The recent downturn in the world’s major economies and the constraints in the credit markets have heightened or could continue to heighten a number of material risks to our business, cash flows and financial condition, as well as our future prospects. Continued issues involving liquidity and capital adequacy affecting lenders could affect our ability to access credit facilities or obtain debt financing and could affect the ability of lenders to meet their funding requirements when we need to borrow. Further, in the uncertain event that a public market for our stock develops, the volatility in the equity markets may make it difficult in the future for us to access the equity markets for additional capital at attractive prices, if at all. The current credit crisis in other countries, for example, and concerns over debt levels of certain other European Union member states, has increased volatility in global credit and equity markets. If we are unable to obtain credit or access capital markets, our business could be negatively impacted. For example, we may be unable to raise all or a portionof the disclosed funds.
BECAUSE OUR CURRENT OFFICER AND DIRECTOR DOES NOT HAVE SIGNIFICANT EXPERIENCE IN STARTING AN ADULT DAY CARE CENTER SERVICE BUSINESS WE ARE A HIGH RISK INVESTMENT WHICH COULD RESULT IN THE LOSS OF YOUR INVESTMENT.
Our Chief Executive Officer and Director does not have experience in developing a Adult Day Care Center Service Business. Additionally, we currently have no customers of our intended business. Therefore, without this experience, our management’s business experience may not be enough to effectively start-up and maintain our company. As a result, the implementation of our business plan may be delayed, or eventually, unsuccessful.
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OUR BUSINESS MAY NOT FIND ACCEPTANCE WITH THE ADULT DAY CARE COMMUNITY.
We are a new company with no established visibility or recognition in the Adult Day Care Center services community. If we are not able to have our Adult Day Care Center business accepted by the marketplace, we may not be able to generate revenues and our business plan may fail.
OUR OPERATING RESULTS MAY PROVE UNPREDICTABLE WHICH COULD NEGATIVELY AFFECT OUR PROFIT.
Our operating results are likely to fluctuate significantly in the future due to a variety of factors, many of which we have no control. Factors that may cause our operating results to fluctuate significantly include: our inability to generate enough working capital from future equity sales; the level of commercial acceptance by consumers of our services; fluctuations in the demand for our service the amount and timing of operating costs and capital expenditures relating to expansion of our business, operations and infrastructure and general economic conditions.
If realized,address any of these risks could have a material adverse effect on our business, financial condition and operating results.
OUR SOLE OFFICER AND DIRECTOR MAY NOT BE IN A POSITION TO DEVOTE A MAJORITY OF HER TIME TO OUR OPERATIONS, WHICH MAY RESULT IN PERIODIC INTERRUPTIONS AND EVEN BUSINESS FAILURE.
Ms. Jocelyn Nicholas, our sole officer and director, has other outside business activities and is devoting approximately 10-25 hours per week to our operations. Our operations may be sporadic and occur at times which are not convenient to Ms. Nicholas, which may result in periodic interruptions or suspensions of our business plan. Such delays could have a significant negative effect on the success of theits business.
KEY MANAGEMENT PERSONNEL MAY LEAVE THE COMPANY WHICH COULD ADVERSELY AFFECT THE ABILITY OF THE COMPANY TO CONTINUE OPERATIONS.
Because we are entirely dependent on the efforts of its sole officerRisks related to liquidity and director, her departure or the loss of other key personnel in the future, could have a material adverse effect on the business. We believe that all commercially reasonable efforts have been made to minimize the risks attendant with the departure by key personnel from service.
However, there is no guarantee that replacement personnel, if any, will help the Company to operate profitably. We do not maintain key person life insurance on our sole officer and director.
IF OUR COMPANY IS DISSOLVED, IT IS UNLIKELY THAT THERE WILL BE SUFFICIENT ASSETS REMAINING TO DISTRIBUTE TO OUR SHAREHOLDERS.
In the event of the dissolution of our company, the proceeds realized from the liquidation of our assets, if any, will be used primarily to pay the claims of our creditors, if any, before there can be any distribution to the shareholders. In that case, the ability of purchasers of the offered shares to recover all or any portion of the purchase price for the offered shares will depend on the amount of funds realized and the claims to be satisfied there from.
IF WE ARE UNABLE TO GAIN ANY SIGNIFICANT MARKET ACCEPTANCE FOR OUR SERVICE OR ESTABLISH A SIGNIFICANT MARKET PRESENCE, WE MAY BE UNABLE TO GENERATE SUFFICIENT REVENUE TO CONTINUE OUR BUSINESS.capital resources.
Our growth strategy is substantially dependent uponindependent registered public accounting firm for the fiscal year ended April 30, 2017 has included an explanatory paragraph in their opinion that accompanies our ability to successfully market our Adult Day Care Center service to prospective senior customers. However, our planned service may not achieve significant acceptance. Such acceptance, if achieved, may not be sustainedaudited financial statements as of and for any significant period of time. Failure of our service to achieve or sustain market acceptance could have a material adverse effect on our business, financial conditions and the results of our operations.
MANAGEMENT’S ABILITY TO IMPLEMENT THE BUSINESS STRATEGY MAY BE SLOWER THAN EXPECTED AND WE MAY BE UNABLE TO GENERATE A PROFIT.
Our plans include obtaining Adult Day Care Center) senior citizen business which may not occur. Our growth strategy is subject to significant risks which you should carefully consider before purchasing the shares we are offering.
Although we plan on offering our Adult Day Care Center service carefully, the service may be slow to achieve profitability, or may not become profitable at all, which will result in losses. There can be no assurance that we will succeed.
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We may be unable to enter into its intended markets successfully. The factors that could affect our growth strategy include our success in (a) developing the Adult Day Care Center service business plan, (b) obtaining customers, (c) obtaining adequate financing on acceptable terms, and (d) adapting our internal controls and operating procedures to accommodate our future growth.
Our systems, procedures and controls may not be adequate to support the expansion of our business operations. Significant growth will place managerial demands on all aspects of our operations. Our future operating results will depend substantially upon our ability to manage changing business conditions and to implement and improve our service, administrative and financial controls and reporting systems.
IF WE ARE UNABLE TO MANAGE OUR FUTURE GROWTH, OUR BUSINESS COULD BE HARMED AND WE MAY NOT BECOME PROFITABLE.
Significant growth may place a significant strain on management, financial, operating and technical resources. Failure to manage growth effectively could have a material adverse effect on the Company’s financial condition or the results of its operations.
Since inception onyear ended April 8, 2013 to July 31 , 2013, we have spent a total of approximately $ 1,938 on start-up costs. We have not generated any revenue from business operations. All proceeds currently held by us are the result of the sale of common stock to our sole officer.
OUR MANAGEMENT TEAM CONSISTS OF ONE PERSON AND MAY NOT BE SUFFICIENT TO SUCCESSFULLY OPERATE OUR BUSINESS.
We have not assembled our management team as a result of our relatively limited activities to date. In addition, we have only one management member which may be insufficient to run our operation. As a result, we may be unable to effectively develop and manage our business and we may fail.
COMPETITORS MAY ENTER THIS ADULT DAY CARE CENTER SERVICE SECTOR WITH SUPERIOR SERVICE, INFRINGING OUR CUSTOMER BASE, AND AFFECTING OUR BUSINESS ADVERSELY.
We have identified a market opportunity for our Adult Day Care Center service. Competitors may enter this sector with superior service. This would infringe on our customer base, having an adverse affect upon our business and the results of our operations.
SINCE OUR SOLE OFFICER AND DIRECTOR CURRENTLY OWNS 100% OF THE OUTSTANDING COMMON STOCK, INVESTORS MAY FIND THAT HER DECISIONS ARE CONTRARY TO THEIR INTERESTS. YOU SHOULD NOT PURCHASE SHARES UNLESS YOU ARE WILLING TO ENTRUST ALL ASPECTS OF MANAGEMENT TO OUR SOLE OFFICER AND DIRECTOR, OR HER SUCCESSORS.
Our sole officer and director, Ms. Jocelyn Nicholas, owns 9,000,000 shares of common stock representing 100% of our outstanding stock. Ms. Nicholas will own 9,000,000 shares of our common stock after this offering is completed representing approximately 75% of our outstanding shares, assuming all securities are sold. As a result, she will have control of us even if the full offering is subscribed for and be able to choose all of our directors. Her interests may differ from the ones of other stockholders. Factors that could cause her interests to differ from the other stockholders include the impact of corporate transactions on the timing of business operations and her ability to continue to manage the business given the amount of time she is able to devote to us.
All decisions regarding the management of our affairs will be made exclusively by her. Purchasers of the offered shares may not participate in our management and, therefore, are dependent upon her management abilities. The only assurance30, 2017, indicating that our shareholders, including purchasers of the offered shares, have that our sole officerhistorical losses, working capital deficit and director will not abuse her discretion in executing our business affairs, is her fiduciary obligation and business integrity. Such discretionary powers include, but are not limited to, decisions regarding all aspects of business operations, corporate transactions and financing. Ms. Nicholas also has the ability to accomplish or ratify actions at the shareholder level which would otherwise implicate her fiduciary duties if done as one of the members of our board of directors.
Accordingly, no person should purchase the offered shares unless willing to entrust all aspects of management to the sole officer and director, or her successors. Potential purchasers of the offered shares must carefully evaluate the personal experience and business performance of our management.
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Risks Related To Our Financial Condition
WE ARE UNABLE TO PROVIDE A TIME TABLE FOR THE IMPLEMENTATION OF OUR ADULT DAY CARE CENTER SERVICE BUSINESS PLAN, WHICH CASTS SUBSTANTIAL DOUBT ON THE VIABILITY OF OUR BUSINESS AND OUR ABILITY TO CONTINUE AS A GOING CONCERN.
We anticipate that we will require a total of $575,000 in order to implement our business plan. What’s more, with the clear exception of the costs associated with this offering we anticipate that virtually all aspects of our business plan can be implemented on a smaller scale based on less available funding in terms of size, quality, and effectiveness, and the timing of their execution ( See MD&A) must be executed concurrently or near concurrently with each other in order for us to generate more than nominal revenues. Because we have taken no steps to identify potential sources of financing that we will require to execute our business plan we cannot estimate if or when we will obtain additional financing. Therefore, we are also unable to provide a timeline for the implementation of our business plan because we are not sure when we will be able to obtain additional funding. Our inability to provide a timeline for the implementation of our business plan at this time castsaccumulated deficit raises substantial doubt on the viability of our business and will have an adverse impact on our ability to attract investors, which may cause the business to fail. Any investment in our business is therefore highly speculative.
WE ARE UNABLE TO IDENTIFY IN ANY DETAIL THE STEPS THAT WE WILL TAKE TO OBTAIN THE FINANCING REQUIRED TO EXECUTE OUR ADULT DAY CARE CENTER SERVICE BUSINESS PLAN, WHICH CASTS SUBSTANTIAL DOUBT ON THE ABILITY OF OUR MANAGEMENT TO EXECUTE OUR BUSINESS PLAN AND OUR ABILITY TO CONTINUE AS A GOING CONCERN.
As of July 31 , 2013 we had only nominal cash resources as disclosed and we anticipate that we will require a total of $575,000 in addition to the maximum of $37,500 that we are seeking to raise through this offering in order to implement our Adult Day Care Center service business plan. What’s more, our sole officer and director has no experience in capital raising or identifying potential sources of financing for our business. Because our sole officer and director has no experience in capital raising or identifying potential sources of financing we are unable to identify in any detail the steps we will take to obtain the financing required to execute our business plan. Our inability to identify the steps we will take to obtain the financing we require casts doubt on the ability of our management to execute our business plan and onabout our ability to continue as a going concern. If we are unable to identify and access sources of financingimprove our business will fail and you will lose your investment.
THERE IS SUBSTANTIAL UNCERTAINTY ABOUT OUR ABILITY TO CONTINUE OUR OPERATIONS AS A GOING CONCERN
In their audit report dated May 13, 2013, our auditors have expressed an opinion that substantial doubt exists asliquidity position, we may not be able to whether we can continue as an ongoing Adult Day Care Center service business. Because our officer Ms. Jocelyn Nicholas may be unwilling ora going concern. The accompanying financial statements do not include any adjustments that might result if we are unable to loan or advance any additional capital to us, we believe that if we do not raise additional capital, we may be required to suspend or cease the implementation of our business plan. Due to the fact that there is no minimum investment and no refunds on sold shares, you may be investing in a company that will not have the funds necessary to develop its business strategies. As such we may have to cease operations and you could lose your entire investment. See the Auditors Report accompanying our Audited Financial Statements. Because we have been issued an opinion by our auditor that substantial doubt exists as to whether we can continue as a going concern and, therefore, be required to realize our assets and discharge our liabilities other than in the normal course of business which could cause investors to suffer the loss of all or a substantial portion of their investment.
We may incur substantial costs related to product-related liabilities.
We license our software from Black Cactus Holdings, LLC (“Black Cactus Holdings”) as its exclusive licensee. We sub-license the software to other companies. This software and software platforms are intended to be used for of fintech, digital media, financial services, KYC, AML, cyber security, and healthcare. We attempt to limit by contract our liability; however, the limitations of liability set forth in the contracts may not be enforceable or may not otherwise protect us from liability for damages. We may also be subject to claims that are not covered by contract. Although we intend to maintain liability insurance coverage, there can be no assurance that such coverage will cover any particular claim that has been brought or that may be brought in the future, that such coverage will prove to be adequate or that such coverage will continue to remain available on acceptable terms, if at all. A successful material claim, or series of claims brought against us, if uninsured or under-insured, could materially harm our business, results of operations and financial condition. Product-related claims, even if not successful, could damage our reputation, cause us to lose existing clients, limit our ability to obtain new clients, divert management’s attention from operations, result in significant revenue loss, create potential liabilities for our clients and us and increase insurance and other operational costs.
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We currently have a limited executive management group managing the financial controls of the Company.
We have a Chief Executive Officer, Lawrence Cummins, and a Chief Financial Officer, Harpreet Sangha, who are responsible for monitoring and ensuring compliance with our internal control procedures. As a result, 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 the reporting may make an uninformed investment decision.
We may encounter numerous difficulties frequently encountered by companies in the early stage of operations.
We have a limited operating history upon which an investor can evaluate our current business and future prospects. Any potential investor must consider the risks and difficulties frequently encountered by early-stage companies. Historically, there has been a high failure rate among early-stage companies. Our future performance will depend upon a number of factors, including our ability to:
● | generate revenues and implement our business plan and growth strategy; | |
● | attract and retain marketing and commercial sponsors; | |
● | aggressively counter and respond to actions by our competitors; | |
● | maintain adequate control of our expenses; | |
● | attract, retain and motivate qualified personnel; | |
● | react to industry preferences and demands; | |
● | maintain regulatory compliance; and | |
● | generate sufficient working capital through our operations or through issuance of additional debt or equity financing, and to continue as a going concern. |
We cannot assure investors that we will successfully address any of these factors, and our failure to do so could have a material adverse effect on our business, financial condition, results of operations and future prospects.
The loss of the services of our key management and personnel or the failure to attract additional key personnel could adversely affect our ability to operate our business.
A loss of one or more of our current officers or key employees could severely and negatively impact our operations. We have no present intention of obtaining key-man life insurance on any of our executive officers or management. Additionally, competition for highly skilled technical, managerial and other personnel is intense. As our business develops, we might not be able to attract, hire, train, retain and motivate the highly skilled managers and employees we need to be successful. If we fail to attract and retain the necessary technical and managerial personnel, our business will suffer and might fail.
Our limited operating history could delay our growth and result in the loss of your investment.
We were incorporated in 2013. However, our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their growth stage of development. Such risks include, but are not limited to, dependence on the growth of use of technology and services, complete software platform development and obtaining industry acceptance while responding to competitive developments and attracting, retaining, and motivating qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so could lead to an inability to meet our financial obligations and therefore result in bankruptcy and the loss of your entire investment in our common shares.
Our ability to implement and manage growth strategy is uncertain.
We plan on expanding the market segments in which we plan to operate. Implementation of our growth strategy may impose significant strain on our management, operating systems and financial resources.
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Failure by the Company to manage its growth, or unexpected difficulties encountered during expansion into different markets, could have a materially adverse impact on our results of operations or financial condition. Our ability to continue to operate our business depends upon a number of factors, including (i) generating sufficient funds for operations, (ii) our executive management team and our financial and accounting controls, and (iii) staffing, training and retaining skilled on-site management personnel. Certain of these factors are beyond our control and may be affected by the economy or actions taken by competing companies. Further, there can be no assurance that our market analysis and proprietary business data will continue to support our current marketing plans.
We may not be able to retain our key personnel or attract additional personnel, which could affect our ability to further innovate and expand our software platforms and obtain industry and customer acceptance of our software so that we can generate revenue sufficient to continue as a going concern diminishing your return on investment.
Our performance is substantially dependent on the services and on the performance of our Management. Black Cactus Global is, and will be, heavily dependent on the skill, acumen and services of our key executives. Our performance also depends on our ability to attract, hire, retain and motivate our officers and key employees. The loss of the services of our executives could result in lost revenue depending on the length of time and effort required to find qualified replacements. We have not entered into long-term employment agreements with any of our key personnel and currently have no “Key Employee” life insurance policies.
Our future success may also depend on our ability to identify, attract, hire, train, retain and motivate other highly skilled technical, managerial, marketing and customer service personnel.
Competition for such personnel is intense, and there can be no assurance that we will be able to successfully attract, assimilate or retain sufficiently qualified personnel. If we are unable to attract, retain, and train the necessary technical, managerial, marketing and customer service personnel, our expectations of increasing our clientele could be hindered, and the profitability of Black Cactus Global reduced.
As the Company intends to be conducting international business transactions, it will be exposed to local business risks in different countries, which could have a material adverse effect on its financial condition or results of operations.
The Company intends to promote and sell the software licensed to it internationally by virtue of the global access to its software platform and it expects to have customers located in several countries. The Company’s international operations will be subject to risks inherent in doing business in foreign countries, including, but not necessarily limited to:
● | New and different legal and regulatory requirements in local jurisdictions; | |
● | Potentially adverse tax consequences, including imposition or increase of taxes on transactions or withholding and other taxes on remittances and other payments by subsidiaries; | |
● | Risk of nationalization of private enterprises by foreign governments; | |
● | Legal restrictions on doing business in or with certain nations, certain parties and/or certain products; and, | |
● | Local economic, political and social conditions, including the possibility of hyperinflationary conditions and political instability. |
The Company may not be successful in developing and implementing policies and strategies to address the foregoing factors in a timely and effective manner in the locations where it will do business. Consequently, the occurrence of one or more of the foregoing factors could have a material adverse effect on its base operations and upon its financial condition and results of operations.
Since our products may be available over the Internet in foreign countries and the Company may have customers residing in foreign countries, foreign jurisdictions may require it to qualify to do business in their country. It will be required to comply with certain laws and regulations of each country in which it conducts business, including laws and regulations currently in place or which may be enacted related to Internet services available to the residents of each country from online sites located elsewhere.
The Company’s operations in developing markets could expose it to political, economic and regulatory risks that are greater than those it may face in established markets. Further, its international operations may require it to comply with additional United States and international regulations.
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For example, it may be required to comply with the Foreign Corrupt Practices Act, or “FCPA,” which prohibits companies or their agents and employees from providing anything of value to a foreign official or agent thereof for the purposes of influencing any act or decision of these individuals in their official capacity to help obtain or retain business, direct business to any person or corporate entity or obtain any unfair advantage. The Company may operate in some nations that have experienced significant levels of governmental corruption. Its employees, agents and contractors, including companies to which it outsources business operations, may take actions in violation of its policies and legal requirements. Such violations, even if prohibited by its policies and procedures, could have an adverse effect on its business and reputation. Any failure by the Company to ensure that its employees and agents comply with the FCPA and applicable laws and regulations in foreign jurisdictions could result in substantial civil and criminal penalties or restrictions on its ability to conduct business in certain foreign jurisdictions, and its results of operations and financial condition could be materially and adversely affected.
We may not have the financial resources to litigate should actions arise involving our intellectual property rights or patent applications.
We sub-license Black Cactus Holding’s software and platform and Black Cactus Holdings has or will make the appropriate filings to protect its’ intellectual property, future patent rights, and trademarks which relate to our business model. However, patent and intellectual property legal issues for the software and platform we license are complex and currently evolving. We are not certain that Black Cactus Holdings will be able to maintain its future patent rights and intellectual property which may affect our business and plan of operations. Patent applications are secret until patents are issued in the United States, or published in other countries, therefore, Black Cactus Holdings cannot be sure that it is first to file any patent application for its software. Should any of its patent claims be compromised or if, for example, one of our competitors has filed or obtained a patent before Black Cactus Holding’s claims have been protected, or should a competitor with more difficultresources desire to attract investors.litigate and force us to defend or prosecute any future patent rights, our ability to develop the market for these products could be compromised, for we do not have the financial resources to litigate actions involving patents and copyrights.
THE ENACTMENT OF THE SARBANES-OXLEY ACT MAY MAKE IT MORE DIFFICULT FOR US TO RETAIN OR ATTRACT OFFICERS AND DIRECTORS, WHICH COULD INCREASE OUR OPERATING COSTS OR PREVENT US FROM BECOMING PROFITABLE.We may be subject to litigation that will be costly to defend or pursue and uncertain in its outcome.
Our business may bring us into conflict with our licensees, licensors or others with whom we have contractual or other business relationships, or with our competitors or others whose interests differ from ours. If we are unable to resolve those conflicts on terms that are satisfactory to all parties, we may become involved in litigation brought by or against us. That litigation is likely to be expensive and may require a significant amount of management’s time and attention, at the expense of other aspects of our business. The outcome of litigation is always uncertain, and in some cases, could include judgments against us that require us to pay damages, enjoin us from certain activities, or otherwise affect our legal or contractual rights, which could have a significant adverse effect on our business and financial condition.
We have no liability insurance, which leaves us vulnerable to future claims we will be unable to satisfy.
The development, testing, marketing and sale of the software products in the various financial, healthcare and technology industries entail an inherent risk of product liability claims, and we cannot assure you that substantial product liability claims will not be asserted against us. In the event we are forced to expend significant funds on defending product liability actions, and in the event those funds come from operating capital, we will be required to reduce our business activities, which could lead to significant losses. We cannot assure you that adequate insurance coverage will be available in the future on acceptable terms, if at all, or that, if available, we will be able to maintain any such insurance at sufficient levels of coverage or that any such insurance will provide adequate protection against potential liabilities. Whether or not a product liability insurance policy is obtained or maintained in the future, any product liability claim could harm our business or financial condition.
Risks Relating to Our Reliance on Third Parties
Because our business involves software, our business tends to be capital intensive.
We are likely to require additional capital to maintain operations or expand our business. We have not made any arrangements to obtain any additional financing. Any additional financing may only be available on terms unfavorable to us and disadvantageous to our shareholders.
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The protection from future patents is uncertain.
We will rely on patents and trade secrets for the protection of Black Cactus Holding’s intellectual property. The issuance of a patent by the Patent Office does not ensure that the patent will be upheld if it is challenged in litigation or that the patent will not be found to infringe upon patents validly issued to others. We could be exposed to substantial litigation expense defending their intellectual property as well as liability to others.
Our proposed products may become technologically obsolete.
The software market for Blockchain applications is characterized by extensive research and development activities as this field continues to grow and expand. New developments are expected to continue at a rapid pace and there can be no assurance that new discoveries will not render our products, processes and devices uneconomical or obsolete. The likelihood of success for our products must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with the development of new software applications and products and their level of acceptance by various industries.
We may encounter liabilities involving customers and third parties.
The licensing of software products and applications can result in claims for damages if a product causes harm or fails to perform as promised. Although we have not been subject to any such claim, no assurance can be given that such claims will not be made in the future or that we can obtain any insurance coverage. If we were subject to an uncovered claim, our assets could be greatly reduced.
We depend on our collaborators to help us develop and test the proprietary software which we have the exclusive license to develop, and our ability to develop and commercialize that software and related applications may be impaired or delayed if collaborations are unsuccessful.
Our strategy for the development, testing and commercialization of the proprietary software platform and applications may require that we enter into collaborations with consultants, corporate partners, licensors, licensees and others. We are dependent upon the subsequent success of these other parties in performing their respective responsibilities and the continued cooperation of our partners. Our collaborators may not cooperate with us or perform their obligations under our agreements with them. We cannot control the amount and timing of our collaborators’ resources that will be devoted to our research and development activities related to our collaborative agreements with them. Our collaborators may choose to pursue existing or alternative technologies in preference to those being developed in collaboration with us.
Under agreements with collaborators, we may rely significantly on such collaborators to, among other things, design prototypes for and value the intellectual property, and market for us any commercial products that result from our collaborations.
The development and commercialization of the proprietary software platform and applications will be delayed if collaborators fail to conduct these activities in a timely manner, or at all. In addition, our collaborators could terminate their agreements with us and we may not receive any development or milestone payments. If we do not achieve milestones set forth in the agreements, or if our collaborators breach or terminate their collaborative agreements with us, our business may be materially harmed.
We intend to continue strategic business acquisitions and other combinations, which are subject to inherent risks.
In order to expand our solutions, services, and grow our market and client base, we may continue to seek and complete strategic business acquisitions and other combinations that we believe are complementary to our business. Acquisitions have inherent risks which may have a material adverse effect on our business, financial condition, operating results or prospects, including, but not limited to: 1) failure to successfully integrate the business and financial operations, services, intellectual property, solutions or personnel of an acquired business and to maintain uniform standard controls, policies and procedures; 2) diversion of management’s attention from other business concerns; 3) entry into markets in which we have little or no direct prior experience; 4) failure to achieve projected synergies and performance targets; 5) loss of clients or key personnel; 6) incurrence of debt or assumption of known and unknown liabilities; 7) write-off of software development costs, goodwill, client lists and amortization of expenses related to intangible assets; 8) dilutive issuances of equity securities; and, 9) accounting deficiencies that could arise in connection with, or as a result of, the acquisition of an acquired company, including issues related to internal control over financial reporting and the time and cost associated with remedying such deficiencies. If we fail to successfully integrate acquired businesses or fail to implement our business strategies with respect to these acquisitions, we may not be able to achieve projected results or support the amount of consideration paid for such acquired businesses.
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Volatility and disruption resulting from global economic conditions could negatively affect our business, results of operations and financial condition.
Although certain indices and economic data have shown signs of stabilization in the United States and certain global markets, there can be no assurance that these improvements will be broad-based or sustainable, nor is it clear how, if at all, they will affect the markets relevant to us. As a result, our operating results may be impacted by the health of the global economy. Volatility and disruption in global capital and credit markets may lead to slowdowns or declines in client spending which could adversely affect our business and financial performance. Our business and financial performance, including new business bookings and collection of our accounts receivable, may be adversely affected by current and future economic conditions (including a reduction in the availability of credit, higher energy costs, rising interest rates, financial market volatility and lower than expected economic growth) that cause a slowdown or decline in client spending. Reduced purchases by our clients or changes in payment terms could adversely affect our revenue growth and cause a decrease in our cash flow from operations. Bankruptcies or similar events affecting clients may cause us to incur bad debt expense at levels higher than historically experienced. Further, volatility and disruption in global financial markets may also limit our ability to access the capital markets at a time when we would like, or need, to raise capital, which could have an impact on our ability to react to changing economic and business conditions. Accordingly, if global financial and economic volatility continues or worsens, our business, results of operations and financial condition could be materially and adversely affected.
If we are unable to manage our growth in the new markets in which we offer solutions or services, our business and financial results could suffer.
Our future financial results will depend in part on our ability to profitably manage our business in the new markets that we enter. Difficulties in managing future growth in new markets could have a significant negative impact on our business, financial condition and results of operations.
The Sarbanes-Oxley Actfurther development and acceptance of 2002 (the “Sarbanes-Oxley Act”) was enactedbitcoins and other digital currencies and the protocols governing the issuance of transactions in responsebitcoins and other digital currencies, which represent a new and rapidly changing industry, are subject to public concern regarding corporate accountability in the wakea variety of factors that are difficult to evaluate.
The use of digital currencies to, among other things, buy and sell goods and services, is part of a numbernew and rapidly evolving industry that employs digital assets based upon a computer-generated mathematical and/or cryptographic protocol. The growth of accounting scandals.this industry is subject to a high degree of uncertainty. The stated goalsfactors affecting the further development of this industry, include, but are not limited to:
● | continued worldwide growth in the adoption and use of digital currencies; | |
● | government and quasi-government regulation of bitcoins and other digital assets and their use, or restrictions on or regulation of access to and operation of digital asset systems; | |
● | changes in consumer demographics and public tastes and preferences; | |
● | the availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat currencies; | |
● | general economic conditions and the regulatory environment relating to digital assets; and | |
● | negative consumer perception of cryptocurrencies. |
Management of our Company is within the control of the Sarbanes-Oxley ActBoard of Directors and the officers. You should not purchase our Common Stock unless you are willing to increase corporate responsibility, provide enhanced penalties for accountingentrust management of our Company to these individuals.
All decisions with respect to the management of the Company will be made by our Board of Directors and auditing improprieties at publicly traded companies and protect investors by improving the accuracy and reliabilityour officers, who beneficially own 50.10% of corporate disclosure pursuant to applicable securities laws. The Sarbanes-Oxley Act applies to all companies that file or are required to file periodic reportsour Common Stock, as calculated in accordance with the SECRule 13d-3 promulgated under the Securities Exchange Act of 1934, (the “Exchange Act”as amended. Holders of the Common Stock who purchase in this offering will not obtain majority control of the Company. Therefore, management will retain the power to elect a majority of the board of directors who shall, in turn, have the power to appoint the officers of the Company and to determine, in accordance with their fiduciary duties and the business judgment rule, the direction, objectives and policies of the Company including, without limitation, the purchase of businesses or assets; the sale of all or a substantial portion of the assets of the Company; the merger or consolidation of the Company with another corporation; raising additional capital through financing and/or equity sources; the retention of cash reserves for future product development, expansion of our business and/or acquisitions; the filing of registration statements with the Securities and Exchange Commission for offerings of our capital stock; and transactions which may cause or prevent a change in control of the Company or its winding up and dissolution.
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Accordingly, no investor should purchase the Common Stock we are offering unless such investor is willing to entrust all aspects of the management of the Company to such individuals.
Our reliance on the activities of our non-employee consultants whose activities are not wholly within our control, may lead to delays in development of our proposed products.
We rely extensively upon and have relationships with consultants. These consultants are not our employees and may have commitments to, or consulting or advisory contracts with, other entities that may limit their availability to us. We have limited control over the activities of these consultants and, except as otherwise required by our collaboration and consulting agreements to the extent they exist, can expect only limited amounts of their time to be dedicated to our activities.
Risks Related to Cryptocurrency
The further development and acceptance of blockchain networks, which are part of a new and rapidly changing industry, are subject to a variety of factors that are difficult to evaluate. The slowing or stopping of the development or acceptance of blockchain networks and blockchain assets would have a material adverse effect on successful development
The growth of the blockchain industry, in general, as well as the blockchain networks on which the Company will rely upon in its business operations are subject to a high degree of uncertainty. A decline in the popularity or acceptance of cryptocurrencies such as Bitcoin or Ethereum would adversely affect the Company’s results of operations, the development, launch and/or operations of the Company. Factors that affect the development of the cryptocurrency industry and blockchain networks, include, but are not limited to:
● | worldwide growth in the adoption and use of Bitcoin, Ethereum, and other blockchain technologies; | |
● | government and quasi-government regulation of Bitcoin, Ethereum, and other blockchain assets and their use, or restrictions on or regulation of access to, and operation of blockchain networks or similar systems; | |
● | the maintenance and development of the open-source software protocol of the Bitcoin or Ethereum networks; | |
● | changes in consumer demographics and public tastes and preferences; | |
● | the availability and popularity of other forms or methods of buying and selling goods and services; and | |
● | general economic conditions and the regulatory environment relating to cryptocurrencies. |
Blockchain networks are based on software protocols that govern peer-to-peer interactions between computers connected to these networks. The suitability of the networks for the Company’s business, depends upon a variety of factors, including, but not limited to:
● | the effectiveness of the informal groups of (often uncompensated) developers contributing to the protocols that underlie the networks; | |
● | the effectiveness of the network validators (sometimes called “miners”) and the network’s consensus mechanisms to effectively secure the networks against confirmation of invalid transactions; | |
● | disputes among the developers or validators of the networks; | |
● | changes in the consensus or validation schemes that underlie the networks, including, without limitation, shifts between so-called “proof of work” and “proof of stake” schemes; | |
● | the failure of cybersecurity controls or security breaches of the networks; | |
● | the existence of other competing and operational versions of the networks, including, without limitation, so-called “forked” networks; | |
● | the existence of undiscovered technical flaws in the networks; | |
● | the development of new or existing hardware, software tools, or mechanisms that could negatively impact the functionality of the systems; |
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● | the price of blockchain assets associated with the networks; | |
● | intellectual property rights-based claims or other claims against the networks’ participants; and | |
● | the maturity of the computer software programming languages used in connection with the networks. |
Unfavorable developments or characteristics of any of the above circumstances could adversely affect the Company’s business, the development, launch and/or operations of the Company.
The regulatory regime governing blockchain technologies, cryptocurrencies, tokens, and token offerings is uncertain. Developments in regulations in the United States or in other jurisdictions may alter the nature of the Company’s business or restrict the use of blockchain assets or the operation of a blockchain network upon which the Company and its business will rely in a manner that adversely affects the Company’s business, the development and/or operation of the Company.
Upon becoming a public company, we will be requiredAs blockchain networks and blockchain assets have grown in popularity and in market size, federal and state agencies have begun to comply withtake an interest in, and, in some cases, regulate their use and operation. In the Sarbanes-Oxley Act. Sincecase of virtual currencies, US state regulators like the enactmentNew York Department of Financial Services, have created new regulatory frameworks. Other states, such as Texas, have published guidance as to how their existing regulatory frameworks apply to virtual currencies. Other states have amended their state’s statutes to apply existing licensing regimes to virtual currencies. Treatment of virtual currencies continues to evolve under US federal law as well. Both the US Department of the Sarbanes-OxleyTreasury and the CFTC, for example, have published guidance on the treatment of virtual currencies like Bitcoin. Further, the IRS released guidance on virtual currencies classifying Bitcoin and Ether as property for the purposes of US federal income taxes. Both US federal and state agencies have instituted enforcement actions against those violating their interpretation of existing laws.
The regulation of non-currency use of blockchain assets is of particular relevance to the Company’s business and the software upon which it will rely. Neither the SEC nor the CFTC has formally asserted regulatory authority over any particular blockchain network. The CFTC has publicly taken the position that certain blockchain assets are commodities, but the SEC has not officially taken the position all blockchain assets are securities; rather, it is a facts and circumstances test. To the extent that a US government or quasi-governmental agency exerts regulatory authority over a blockchain network, including one upon which the Company’s business relies, or a blockchain asset, the Company’s business and the functionality of the Company may be adversely affected.
On July 25, 2017, the SEC issued an investigative report cautioning market participants that offers and sales of digital assets by “virtual” organizations are subject to the requirements of the US federal securities laws. The report, entitled “Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act has resultedof 1934, as amended (the “Exchange Act”: The DAO” (the “DAO Report”), found that tokens offered and sold by a “virtual” organization known as “The DAO” were securities and were therefore subject to the US federal securities laws. The DAO Report confirmed that issuers of distributed ledger or blockchain technology-based securities must register offers and sales of such securities unless a valid exemption applies.
Certain non-US regulators have also released statements or issued some form of guidance regarding their position on “initial coin offerings” and token sales. The Company’s business, the development, launch and/or operations of the Company could be adversely affected by regulations that restrict the use of cryptocurrencies or digital assets.
Developments in foreign regulations and laws may alter the nature of the Company’s business or restrict the operation of a blockchain network upon which the Company relies, including the use of blockchain assets, in a manner that adversely affects our business.
Blockchain networks currently face an uncertain regulatory landscape in not only the United States, but also in many foreign jurisdictions, which have issued guidelines or regulatory communications regarding cryptocurrencies, digital assets and “initial coin offerings” and are still working on ways to regulate this industry. Various foreign jurisdictions may, in the impositionnear future, adopt laws, regulations, or directives that affect the Ethereum network and its users, particularly Ether exchanges and service providers that fall within such jurisdictions’ regulatory scope. Such laws, regulations, or directives may conflict with those of the United States, or may directly and negatively impact the Company’s business, the development, launch and/or operations of the Company. The effect of any future regulatory change is impossible to predict, but such change could be substantial and adverse to the Company’s business, the development, launch and/or operations of the Company and the development of the Company. Developments in US commercial and corporate laws may alter the nature of the Company’s business or the development or operation of the software in a series of rules and regulations bymanner that adversely affects the SEC that increase the responsibilities and liabilities of directors and executive officer, the perceived increased personal risk associated with these changes may deter qualified individuals from accepting such roles. Consequently, it may be more difficult for us to attract and retain qualified persons to serve as our directors or executive officer, and we may need to incur additional operating costs. This could prevent us from becoming profitable.Company’s business.
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SINCE WE ANTICIPATE OPERATING EXPENSES WILL INCREASE PRIOR TO EARNING REVENUE, WE MAY NEVER ACHIEVE PROFITABILITYRisks of unfavorable regulatory action in one or more jurisdictions.
Blockchain technologies and cryptocurrencies have been the subject of scrutiny by various regulatory bodies around the world. The Company could be impacted by one or more regulatory inquiries or actions, including but not limited to restrictions on the use of blockchain technology, which could impede or limit the development of our anticipated blockchain technology solutions.
We anticipate an increaseCompetitive risks and alternative platforms.
Blockchain industry is highly competitive and should intensify in our operating expenses, without realizing any revenuesthe future. There are many platforms that enable the use of blockchain technologies in the payments ecosystem. Additional competitors are likely to enter the industry in the future. There is also competition from the saletraditional payment networks, all of which could potentially negatively impact the Company.
We may not be able to develop new products or enhance the capabilities related to blockchain technology that is being developed by the Company to keep pace with our industry’s rapidly changing technology and customer requirements.
The industry for blockchain technology is characterized by rapid technological changes, new product introductions, enhancements, and evolving industry standards. Our business prospects depend on our ability to develop new products and applications for our technology in new markets that develop as a result of technological and scientific advances, while improving performance and cost-effectiveness. New technologies, techniques or products could emerge that might offer better combinations of price and performance than the blockchain technology solutions that are being developed by the Company. It is important that we anticipate changes in technology and market demand. If we do not successfully innovate and introduce new technology into our anticipated technology solutions or effectively manage the transitions of our technology to new product offerings, our business, financial condition and results of operations could be harmed.
Risks associated with unauthorized access.
Third parties that gains access to a user’s login credentials or private keys may be able to transfer the user’s value. To minimize this risk, the users should guard against unauthorized access to their electronic devices.
Risks that our anticipated blockchain technology solutions, as developed, will not meet the expectations of its service. Withintarget audience.
Our anticipated blockchain technology solutions are presently under development and may undergo significant changes before beta and/or final release. Any expectations regarding the next 18 months, we will have costs related to (i) creating an Adult Day Care Center service, (ii) initiationform and functionality of our business plan, (iii) administrative expenses,anticipated blockchain technology solutions may not be met upon release, for any number of reasons including change in the design and (iv)implementation plans and execution.
Risks of theft and hacking.
Hackers or other groups or organizations may attempt to interfere with the expensesblockchain technology or the availability of this offering.our anticipated blockchain technology solutions in any number of ways, including without limitation denial of service attacks, Sybil attacks, spoofing, smurfing, malware attacks, or consensus-based attacks. The Company expects to spend significant resources to consistently penetrate test and monitor its technology to prevent any such threats.
Risk of security weaknesses in the core infrastructure and software.
Some parts of the core software may be based on open-source software. There is a risk that the development team, or other third parties may intentionally or unintentionally introduce weaknesses or bugs into the core infrastructure elements of our anticipated blockchain technology solutions interfering with the use of or causing the loss to the Company.
Risk of weaknesses or exploitable breakthroughs in the field of cryptography.
Advances in cryptography, or technical advances such as the development of quantum computers, could present risks to cryptocurrencies and network, which could result in theft or loss.
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We may require additional capital to fully utilize its business plan on a going forward basis as the Company develops and deploys its anticipated blockchain technology solutions and related ecosystem.
While the Company expects that funding of the project will be from future financings, including the Notes, the Company has yet to approximate its capital needs and might require additional capital to fully utilize its business plan on a go forward basis as the Company develops and deploys the ecosystem, cost of development of the ecosystem, value-added solutions as well as deployment and distribution costs. There is no history upon which to base any assumption as to the likelihood that we will prove successful. We cannot provide investors with any assurance that our Adult Day Care Center service will attract customers; generate any operating revenue or ever achieve profitable operations. If we are unable to address these risks, there is a high probability that our business can fail, which will result in the loss of your entire investment.
IF WE CANNOT SECURE ADDITIONAL CAPITAL, OR IF AVAILABLE CAPITAL IS TOO EXPENSIVE, OUR ADULT DAY CARE CENTER SERVICE BUSINESS WILL FAIL.
Developing and executing our business plan will require a significant capital investment. Debt or equity financing may not be available to us, or, if available, may be too expensive.
No assurance can be given that we will obtain access to capital markets in the future or that adequate financing to satisfy the cash requirements of implementing our business strategies will be available on acceptable terms. Our inability to gain access to capital markets or obtain acceptable financing could have a material adverse effect upon the results of its operations and its financial conditions.
If we are not successful in earning revenue once we have started our sales activity, we may require additional financing to sustain our business operations. Currently, we do not have any arrangements for financing and can provide no assurances to investors that weCompany will be able to obtain any when required. Obtaining additional financing would be subject to a number of factors, including our sales results. These factors may have an effect on the timing, amount, terms or conditions of additional financing and make such additional financing unavailable to us.capital in sufficient amounts or on acceptable terms when needed.
IF OUR REGISTRATION STATEMENT IS DECLARED EFFECTIVE, WE WILL BE SUBJECT TO THE SEC’S REPORTING REQUIREMENTS AND WE CURRENTLY DO NOT HAVE SUFFICIENT CAPITAL TO MAINTAIN THIS REPORTING STATUS WITH THE SEC.
The costIf regulatory changes or interpretations require the regulation of maintaining our reporting status withdigital currencies under the Securities Act of 1933, as amended (the “Securities Act”) and Investment Company Act of 1940, as amended (the Investment Company Act”) by the SEC, which consistswe may be required to register and comply with such regulations. To the extent that we decide to continue operations, the required registrations and regulatory compliance steps may result in extraordinary, non-recurring expenses to us. We may also decide to cease certain operations. Any disruption of ongoing accounting/auditing, legalour operations in response to the changed regulatory circumstances may be at a time that is disadvantageous to investors.
Current and filing feesfuture legislation and SEC rulemaking and other expenses,regulatory developments, including interpretations released by a regulatory authority, may vary substantiallyimpact the manner in correlation with our levelwhich cryptocurrencies are treated for classification and clearing purposes. In particular, digital currencies may not be excluded from the definition of activity from time to time. Nevertheless, we estimate that we will require between $3,000 and $5,000“security” by SEC rulemaking or more over the next twelve months (in addition to the $9,000 costs we will incur in connection with this offering that are being paid by us and is not part of this offering) to maintain our reporting status with the SEC based on a low to moderate level of activity.interpretation. As of the date of this prospectus, we are not aware of any rules or interpretations that have been proposed to regulate bitcoins as securities. We cannot be certain as to how future regulatory developments will impact the current funds availabletreatment of bitcoins under the law. Such additional registrations may result in extraordinary, non-recurring expenses, thereby materially and adversely impacting an investment in us. If we determine not to us will not be sufficientcomply with such additional regulatory and registration requirements, we may seek to continue maintaincease certain of our reporting status withoperations. Any such action may adversely affect an investment in us.
To the sec. Our management believesextent that if we cannot maintain our reporting status withcryptocurrencies are deemed by the SEC to fall within the definition of a security, we will havemay be required to register and comply with additional regulation under the Investment Company Act, including additional periodic reporting and disclosure standards and requirements and the registration of our Company as an investment company. Additionally, one or more states may conclude cryptocurrencies are a security under state securities laws which would require registration under state laws including merit review laws which would adversely impact us since we would likely not comply. Such additional registrations may result in extraordinary, non-recurring expenses of our Company, thereby materially and adversely impacting an investment in our Company. If we determine not to comply with such additional regulatory and registration requirements, we may seek to cease all efforts directed toward developingor certain parts of our company. Asoperations. Any such anyaction may adversely affect an investment in our Company may be lost in its entirety.us.
Risks Related To This Offeringto Common Stock
BECAUSE THERE IS NO PUBLIC TRADING MARKET FOR OUR COMMON STOCK, YOU MAY NOT BE ABLE TO RESELL YOUR STOCKThe large number of shares eligible for immediate and future sales may depress the price of our stock.
We intendAs of the date of this prospectus we have 166,043,296 shares of Common Stock outstanding. Approximately 30,000,000 shares are “free trading” and may serve to applyoverhang the market and depress the price of our Common Stock.
There is currently a limited public market for our Common Stock. Failure to have our common stock quoteddevelop or maintain a trading market could negatively affect its value and make it difficult or impossible for you to sell your shares.
Our Common Stock trades on the OTC Bulletin Board. This process takes at least 60 daysOTCQB Market under the symbol “BLGI”. There has been a limited public market for our Common Stock and the application must be made onan active public market for our behalf by a market maker. Our stock may be listed or traded only to the extent that there is interest by broker-dealers in acting as a market maker. Despite our best efforts, itCommon Stock may not be abledevelop. Failure to convincedevelop or maintain an active trading market could make it difficult for you to sell your shares or recover any broker/dealers to act as market-makers and make quotations on the OTC Bulletin Board. We may consider pursuing a listing on the OTCBB after this registration becomes effective and we have completed our offering.
If our common stock becomes listed andpart of your investment in us. Even if a market for our Common Stock does develop, the stock develops, the actualmarket price of our shares willCommon Stock may be determined by prevailing market prices athighly volatile. In addition to the timeuncertainties relating to future operating performance and the profitability of the sale.
We cannot assure you that there will be a marketoperations, factors such as variations in the future forinterim financial results or various, as yet unpredictable, factors, many of which are beyond our common stock. The trading of securities on the OTC Bulletin Board is often sporadic and investors may have difficulty buying and selling our shares or obtaining market quotations for them, whichcontrol, may have a negative effect on the market price of our common stock. You may not be able to sell your shares at their purchase price or at any price at all. Accordingly, you may have difficulty reselling any shares you purchase from the selling security holders.
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INVESTING IN OUR COMPANY ENVOY GROUP CORP. IS HIGHLY SPECULATIVE AND COULD RESULT IN THE ENTIRE LOSS OF YOUR INVESTMENT
Purchasing the offered shares is highly speculative and involves significant risk. The offered shares should not be purchased by any person who cannot afford to lose their entire investment. Our business objectives are also speculative, and it is possible that we would be unable to accomplish them. Our shareholders may be unable to realize a substantial or any return on their purchase of the offered shares and may lose their entire investment. For this reason, each prospective purchaser of the offered shares should read this prospectus and all of its exhibits carefully and consult with their attorney, business and/or investment advisor.
INVESTING IN OUR COMPANY ENVOY GROUP CORP. MAY RESULT IN AN IMMEDIATE LOSS BECAUSE BUYERS WILL PAY MORE FOR OUR COMMON STOCK THAN THE PRO RATA PORTION OF THE ASSETS ARE WORTH
We have only been recently formed and have only a limited operating history with no earnings; therefore, the price of the offered shares is not based on any data. The offering price and other terms and conditions regarding our shares have been arbitrarily determined and do not bear any relationship to assets, earnings, book value or any other objective criteria of value. No investment banker, appraiser or other independent third party has been consulted concerning the offering price for the shares or the fairness of the offering price used for the shares. Our net tangible book value per share of common stock is $0. 0007 as of July 31 , 2013, our most recent financial statement date.
The arbitrary offering price of $0.0125 per share as determined herein is substantially higher than the net tangible book value per share of our common stock. Our assets do not substantiate a share price of $0.0125. This premium in share price applies to the terms of this offering. The offering price will not change for the duration of the offering even if we obtain a listing on any exchange or become quoted on the OTC Bulletin Board.Common Stock.
BECAUSE ENVOY GROUP CORP. HAS 250,000,000 AUTHORIZED SHARES, MANAGEMENT COULD ISSUE ADDITIONAL SHARES, DILUTING THE CURRENT SHARE HOLDERS’ EQUITY“Penny Stock” rules may make buying or selling our Common Stock difficult. Limitations upon Broker-Dealers Effecting Transactions in “Penny Stocks”
We have 250,000,000 authorized shares, of which only 9,000,000 are currently issued and outstanding and only 12,000,000 will be issued and outstanding after this offering terminates. Our management could, without the consent of the existing shareholders, issue substantially more shares, causing a large dilution in the equity position of our current shareholders. Additionally, large share issuances would generally have a negative impact on our share price. It is possible that, due to additional share issuance, you could lose a substantial amount, or all, of your investment.
AS ENVOY GROUP CORP. DOES NOT HAVE AN ESCROW OR TRUST ACCOUNT WITH SUBSCRIPTIONS FOR INVESTORS, IF WE FILE FOR OR ARE FORCED INTO BANKRUPTCY PROTECTION, INVESTORS WILL LOSE THEIR ENTIRE INVESTMENT
Invested funds for this offering will not be placed in an escrow or trust account and if we file for bankruptcy protection or a petition for involuntary bankruptcy is filed by creditors against us, your funds will become part of the bankruptcy estate and administered according to the bankruptcy laws. As such, you will lose your investment and your funds will be used to pay creditors.
ENVOY GROUP CORP. DOES NOT ANTICIPATE PAYING DIVIDENDS IN THE FORESEEABLE FUTURE, SO THERE WILL BE LESS WAYS IN WHICH YOU CAN MAKE A GAIN ON ANY INVESTMENT IN US
Envoy Group Corp. has never paid dividends and does not intend to pay any dividends for the foreseeable future. To the extent that we may require additional funding currently not provided forTrading in our financing plan, our funding sources may prohibit the declaration of dividends. Because we do not intend to pay dividends, any gain on your investment will need to result from an appreciation in the price of our common stock. There will therefore be fewer ways in which you are able to make a gain on your investment.
IN THE EVENT THAT ENVOY GROUP CORP. SHARES ARE TRADED, THEY MAY TRADE UNDER $5.00 PER SHARE AND THUS WILL BE A PENNY STOCK. TRADING IN PENNY STOCKS HAS MANY RESTRICTIONS AND THESE RESTRICTIONS COULD SEVERELY AFFECT THE PRICE AND LIQUIDITY OF OUR SHARES
In the event that Envoy Group Corp. shares are traded, and our stock trades below $5.00 per share, our stock would be known as a “penny stock”, whichCommon Stock is subject to various regulations involving disclosures to be given to you prior to the purchasematerial limitations as a consequence of any penny stock. The U.S. Securities and Exchange Commission (the “SEC”) has adopted regulations which generally definelimit the activities of broker-dealers effecting transactions in “penny stocks.” Pursuant to Rule 3a51-1 under the Exchange Act, our Common Stock is a “penny stock” to bebecause it (i) is not listed on any equity security thatnational securities exchange or The NASDAQ Stock Market™, (ii) has a market price of less than $5.00 per share, subject to certain exceptions. Depending on market fluctuations, our common stock could be considered to be a “penny stock”. A penny stock is subject to rules that impose additional sales practice requirements on broker/dealers who sell these securities to persons otherand (iii) its issuer (the Company) has net tangible assets less than established customers and accredited investors. For transactions covered by these rules,$2,000,000 (if the broker/dealer must make a special suitability determinationissuer has been in business for at least three (3) years) or $5,000,000 (if the purchase of these securities. In addition, he must receive the purchaser’s written consent to the transaction prior to the purchase. He must alsoissuer has been in business for less than three (3) years).
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Rule 15g-9 promulgated under the Exchange Act imposes limitations upon trading activities on “penny stocks”, which makes selling our Common Stock more difficult compared to selling securities which are not “penny stocks.” Rule 15a-9 restricts the solicitation of sales of “penny stocks” by broker-dealers unless the broker first (i) obtains from the purchaser information concerning his financial situation, investment experience and investment objectives, (ii) reasonably determines that the purchaser has sufficient knowledge and experience in financial matters that the person is capable of evaluating the risks of investing in “penny stocks”, and (iii) delivers and receives back from the purchaser a manually signed written statement acknowledging the purchaser’s investment experience and financial sophistication.
Rules 15g-2 through 15g-6 promulgated under the Exchange Act require broker-dealers who engage in transactions in “penny stocks” first to provide certain writtentheir customers with a series of disclosures and documents, including (i) a standardized risk disclosure document identifying the risks inherent in investing in “penny stocks”, (ii) all compensation received by the broker-dealer in connection with the transaction, (iii) current quotation prices and other relevant market data, and (iv) monthly account statements reflecting the fair market value of the securities.
There can be no assurance that any broker-dealer which initiates quotations for the Common Stock will continue to do so, and the purchaser. Consequently,loss of any such broker-dealer likely would have a material adverse effect on the market price of our Common Stock.
FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.
In addition to the “penny stock” rules may restrict the ability of broker/dealersdescribed below, FINRA has adopted rules that require that in recommending an investment to sell our securities, and may negatively affect the ability of holders of shares of our common stock to resell them. These disclosures require you to acknowledge that you understand the risks associated with buying penny stocks and that you can absorb the loss of your entire investment. Penny stocks are low priced securities that do not have a very high trading volume. Consequently, the price of the stock is often volatile and you may not be able to buy or sell the stock when you want to.
FINANCIAL INDUSTRY REGULATORY AUTHORITY (“FINRA”) SALES PRACTICE REQUIREMENTS MAY ALSO LIMIT YOUR ABILITY TO BUY AND SELL OUR ENVOY GROUP CORP. COMMON STOCK, WHICH COULD DEPRESS THE PRICE OF OUR SHARES.
FINRA rules require broker-dealers tocustomer, a broker-dealer must have reasonable grounds for believing that anthe investment is suitable for a customer before recommending that investment to the customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, and investment objectives amongand other things.information. Under interpretations of these rules, FINRA believes that there is a high probability suchthat speculative low-priced securities will not be suitable for at least some customers. Thus,The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our Envoy Group Corp. common stock,Common Stock, which may limit your ability to buy and sell our shares,stock and have an adverse effect on the market for our shares, and thereby depressshares.
Because our share price.
YOU MAY FACE SIGNIFICANT RESTRICTIONS ON THE RESALE OF YOUR SHARES DUE TO STATE “BLUE SKY” LAWS.
Each state has its own securities laws, often called “blue sky” laws, which (1) limit sales of securities toCommon Stock is deemed a state’s residents unless the securities are registered in that state or qualify for an exemption from registration, and (2) govern the reporting requirements for broker-dealers doing business directly or indirectly in the state. Before a security is sold in a state, there must be a registration in place to cover the transaction, orlow-priced “penny stock,” it must be exempt from registration. The applicable broker-dealer must also be registered in that state.
We do not know whether our securities will be registered or exempt from registration undercumbersome for brokers and dealers to trade in our Common Stock, making the laws of any state. A determination regarding registration will be made by those broker-dealers, if any, who agree to serve as market makers for our common stock. We have not yet applied to have our securities registered in any state and will not do so until we receive expressions of interest from investors resident in specific states after they have viewed this Prospectus. We will initially focus our offering in the state of Florida and will rely on exemptions found in section 517.061 of the Florida Securities and Investor Protection Act. There may be significant state blue sky law restrictions on the ability of investors to sell, and on purchasers to buy, our securities. You should therefore consider the resale market for our common stock to be limited, as you may be unable to resell your shares withoutCommon Stock less liquid and negatively affect the significant expense of state registration or qualification.
WE WILL BECOME SUBJECT TO THE PERIODIC REPORTING REQUIREMENTS UNDER SECTION 15(d) 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.
Following the effective date of our registration statement of which this prospectus is a part, we will be required to file periodic reports with the SEC pursuant under Section 15(d) of 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 cost 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 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.stock.
WE DO NOT INTEND TO REGISTER UNDER SECTION 12(g) OF THE SECURITIES EXCHANGE ACT AND THEREFORE WILL HAVE FEWER REPORTING OBLIGATIONS.
The Company does not intendWe will be subject to register its common stock under Section 12(g)certain provisions of the Securities Exchange Act andof 1934 (the “Exchange Act”), commonly referred to as such willthe “penny stock” rules as defined in Rule 3a51-1. A penny stock is generally defined to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions. Since our stock is deemed to be a Section 15(d) registrant whichpenny stock, trading is not required to file periodic reports if the registrant has less than 300 shareholders of record for the fiscal year after the year of effectiveness. As a result of not having our common stock registered under Section 12 of the Exchange Act, we may not have an ongoing periodic reporting obligations (after one year) and we would not be subject to the Commission’s proxy, tender offer, and short swing insider trading rules for Section 12 registrants.additional sales practice requirements of broker-dealers. These require a broker-dealer to:
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USE OF PROCEEDS
Our offering is being made on a self-underwritten basis: no minimum number of shares must be sold in order for the offering to proceed. The offering price per share is $0.0125. The following table sets forth the uses of proceeds assuming the sale of 35%, 50%, 75% and 100%, respectively, of the securities offered for sale by us.
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| IF 35% OF |
| IF 50% OF |
| IF 75% OF |
| IF 100% OF | ||||
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| SHARES SOLD |
| SHARES SOLD |
| SHARES SOLD |
| SHARES SOLD | ||||
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GROSS PROCEEDS FROM THIS OFFERING |
| $ | 13,125 |
| $ | 18,750 |
| $ | 28,125 |
| $ | 37,500 |
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OFFERING EXPENSES |
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Accounting Fees |
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| 2,625 |
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| 2,625 |
|
| 2,625 |
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| 2,625 |
Legal Fees |
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| 4,250 |
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| 4,250 |
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| 4,250 |
|
| 4,250 |
Printing |
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| 500 |
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| 500 |
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| 500 |
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| 500 |
Transfer Agent |
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| 1,625 |
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| 1,625 |
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| 1,625 |
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| 1,625 |
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SUB TOTAL |
| $ | 9,000 |
| $ | 9,000 |
| $ | 9,000 |
| $ | 9,000 |
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ENVOY GROUP CORP. DEVELOPMENT INVESTIGATION EXPENSES |
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Operating Equipment |
| $ | 0 |
| $ | 750 |
| $ | 2,900 |
| $ | 4,900 |
Office Equipment |
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| 0 |
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| 200 |
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| 1,000 |
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| 2,000 |
Consulting Team |
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| 300 |
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| 3,700 |
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| 9,125 |
|
| 12,000 |
Marketing/Website |
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| 475 |
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| 1,000 |
|
| 2,000 |
|
| 5,500 |
Facility |
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| 250 |
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| 1,000 |
|
| 1,000 |
|
| 1,000 |
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SUB TOTAL |
| $ | 1,025 |
| $ | 6,650 |
| $ | 16,025 |
| $ | 25,400 |
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ADMINISTRATION EXPENSES |
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State of FL. Reporting |
| $ | 150 |
| $ | 150 |
| $ | 150 |
| $ | 150 |
SEC Reporting (1) |
|
| 2,950 |
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| 2,950 |
|
| 2,950 |
|
| 2,950 |
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SUB TOTAL |
| $ | 3,100 |
| $ | 3,100 |
| $ | 3,100 |
| $ | 3,100 |
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GROSS PROCEEDS TOTALS |
| $ | 13,125 |
| $ | 18,750 |
| $ | 28,125 |
| $ | 37,500 |
(1) The SEC Reporting line item includes the cost of complying with the SEC’s disclosure requirements.
Even if we are able to sell all of the securities being offered in this Prospectus, we will require an additional $575,000 to cover our anticipated expenses over the next 18 months. Please review our disclosure titled “Plan of Operation” in the “Management’s Discussion and Analysis of Financial Condition and Results of Operation” elsewhere in this Prospectus. Please note that there can be no assurance that we will be able to raise such funds.
If we are only able to sell less than 35% of the securities we are offering, substantially all of the funds raised by this offering will be spent on assuring that we meet our corporate and disclosure obligations so that we remain in good standing with the State of Florida and maintain our status as a reporting issuer with the SEC.
Importantly, our business plan and allocation of proceeds may vary according to the amount proceeds raised by the sale of securities hereunder and through our future financing efforts. The figures included in the above table show a increase in funds allocated to each category of expenses under our business plan in proportion to the percentage of shares sold (whether 35%, 50%, 75%, or 100%). However, we estimate that we will require as much as $575,000 in addition to the $ $37,500 that we are seeking to raise through this prospectus in order to establish operations of a sufficient size and quality to ensure the competitiveness of our business and to generate significant revenues. Nevertheless, if our potential to raise capital appears exhausted, our management may decide to modify our business plan on a reduced scale and quality. This might entail the use of used equipment, a used or leased vehicle for transportation, less marketing, smaller facility, part-time personnel, reduction in consultants and G&A expenses. A decision by our management to
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implement our business plan on a reduced scale and quality may occur at any juncture during the early stage of our business development, whether we have raised 35%, 50% 75% or 100% of the proceeds that we will seeking to raise through this offering or any percentage of the additional $37,500 that we are seeking to raise. In the opinion of our management, the consequences of implementing our business plan on a reduced quality and scale will be a reduction in our capacity to provide services and generate revenue, a critical decrease or deficiency in our working capital, and an increased likelihood that our business will fail. Moreover, even if our financing potential becomes exhausted before we are able to raise the funds that we are seeking to raise, there is no guarantee that we will be successful in implementing a scaled down version of our business plan, especially if we have not raised any of our disclosed funds to be raised hereunder. Other than the preparation of this prospectus, we have not taken any steps to identify financing sources for any portion of the funds that we anticipate we will need to execute our business plan. There is no guarantee that any financing will be available to us.
DETERMINATION OF OFFERING PRICE
The offering price for the shares in this offering was arbitrarily determined. In determining the initial public offering price of the shares we considered several factors including the following:
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Therefore, the public offering price of the shares does not necessarily bear any relationship to established valuation criteria and may not be indicative of prices that may prevail at any time or from time to time in the public market for the common stock. You cannot be sure that a public market for any of our securities will develop and continue or that the securities will ever trade at a price at or higher than the offering price in this offering.
DILUTION OF THE PRICE YOU PAY FOR YOUR SHARES
The price of the current offering is fixed at $0.0125 per share. This price (which is the equivalent of $ 0.0125 per common share) is significantly greater than the price paid by our sole officer and director. Our sole officer and director paid $0.001 per share, a difference of $0.0115 per share lower than the share price in this offering.
Dilution represents the difference between the offering price and the net tangible book value per share immediately after completion of this offering. Net tangible book value is the amount that results from subtracting total liabilities and intangible assets from total assets. Dilution arises mainly as a result of our arbitrary determination of the offering price of the shares being offered. Dilution of the value of the shares you purchase is also a result of the lower book value of the shares held by our existing stockholders. The following tables compare the differences of your investment in our shares with the investment of our existing stockholders.
Existing stockholders if all of the shares are sold
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New shareholders if all of the shares are sold
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| PERCENTAGE OF SHARES SOLD |
| |||||||||||
DILUTION TO NEW SHAREHOLDERS |
| 35% |
| 50% |
| 75% |
| 100% |
| |||||
Per share offering price |
| $ | 0.0125 |
| $ | 0.0125 |
| $ | 0.0125 |
| $ | 0.0125 |
| |
Net tangible book value per share before offering |
| $ | 0.0007 |
| $ | 0.0007 |
| $ | 0.0007 |
| $ | 0.0007 |
| |
Net tangible book value per share after offering |
| $ | 0.0019 |
| $ | 0.0024 |
| $ | 0.0030 |
| $ | 0.0036 |
| |
Increase in book value attributable to new shareholders |
| $ | 0.0012 |
| $ | 0.0016 |
| $ | 0.0023 |
| $ | 0.0030 |
| |
Dilution to new shareholders |
|
| 85 | % |
| 81 | % |
| 76 | % |
| 31 | % | |
THE OFFERING
We are registering 3,000,000 shares of our common stock for offer and sale at $0.0125 per share.
There is currently no active trading market for our common stock, and such a market may not develop or be sustained. We currently plan to have our common stock listing on the OTC Bulletin Board, subject to the effectiveness of this Registration Statement. In addition, a market maker will be required to file a Form 211 with the Financial Industry Regulatory Authority (FINRA) before the market maker will be able to make a market in the shares of our common stock. At the date hereof, we are not aware that any market maker has any such intention.
We may not sell the shares registered herein until the registration statement filed with the Securities and Exchange Commission is effective. Further, we will not offer the shares through a broker-dealer or anyone affiliated with a broker-dealer. Upon effectiveness, all of the shares being registered herein may become tradable. The stock may be traded or listed only to the extent that there is interest by broker-dealers in acting as a market maker in our stock. Despite our best efforts, it may not be able to convince any broker/dealers to act as market-makers and make quotations on the OTC Bulletin Board. We may consider pursuing a listing on the OTCBB after this registration becomes effective and we have completed our offering.
The price per share will remain at $0.0125. Even if we obtain a listing on any exchange or are quoted on the Over-The-Counter (OTC) Bulletin Board, the offering price of $0.0125 will not change for the duration of the offering.
We will receive all of the proceeds from such sales of securities and are bearing all expenses in connection with the registration of our shares.
PLAN OF DISTRIBUTION
We are offering the shares on a “self-underwritten” basis directly through Ms. Jocelyn Nicholas our Sole Officer and Director named herein. Ms. Nicholas will not receive any commissions or other remuneration of any kind in connection with her participation in this offering based either directly or indirectly on transactions in securities.
This offering is a self-underwritten offering, which means that it does not involve the participation of an underwriter to market, distribute or sell the shares offered under this prospectus. This offering will terminate upon the earlier to occur of (i) 90 days after this registration statement becomes effective with the Securities and Exchange Commission, (ii) the date on which all 3,000,000 shares registered hereunder have been sold. We may, at our discretion, extend the offering for an additional 90 days.
We anticipate that we will be initially offering our securities in the State of Florida. Once this Registration Statement is effective, and if Ms. Nicholas believes that there is sufficient interest in our company to offer our securities in the state of Florida, we will register with the state of Florida under ‘blue sky’ laws. However, we have not yet applied for ‘blue sky’ registration in the state of Florida, or any other state, and there can be no assurance that we will be able to apply, or that our application will be approved and our securities will be registered, in Florida or any other state in the US. For further discussion regarding ‘blue sky’ registration please see ‘Risk Factors’ elsewhere in this Prospectus.
Ms. Jocelyn Nicholas will not register as a broker-dealer pursuant to Section 15 of the Securities Exchange Act of 1934, in reliance upon Rule 3a4-1, which sets forth those conditions under which a person associated with an issuer may participate in the offering of the issuer’s securities and not be deemed to be a broker-dealer.
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Our officer, director, control personsConsequently, penny stock rules and affiliatesFINRA rules may restrict the ability or willingness of broker-dealers to trade and/or maintain a market in our Common Stock. Also, prospective investors may not want to get involved with the additional administrative requirements, which may have a material adverse effect on the trading of our shares.
We have paid no dividends.
We never have paid any dividends on our Common Stock and we do not intend to purchasepay any sharesdividends in this offering.the foreseeable future.
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We are an “emerging growth company” under the JOBS Act of 2012 and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our Common Stock less attractive to investors.
We are an “emerging growth company”, as defined in the sharesJumpstart Our Business Startups Act of 2012 (“JOBS Act”), and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not be offered or sold in certain jurisdictions unless they are registered or otherwise“emerging growth companies” including, but not limited to, not being required to comply with the applicable securities lawsauditor attestation requirements of such jurisdictions by exemption, qualification or otherwise. We intend to sellsection 404 of the shares onlySarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in the states in which this offering has been qualified or an exemptionour periodic reports and proxy statements, and exemptions from the registration requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our Common Stock less attractive because we may rely on these exemptions. If some investors find our Common Stock less attractive as a result, there may be a less active trading market for our Common Stock and our stock price may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are choosing to take advantage of the extended transition period for complying with new or revised accounting standards.
We will remain an “emerging growth company” for up to five years, although we will lose that status sooner if our revenues exceed $1 billion, if we issue more than $1 billion in non-convertible debt in a three-year period, or if the market value of our Common Stock that is available,held by non-affiliates exceeds $700 million as of any June 30.
Our status as an “emerging growth company” under the JOBS Act of 2012 may make it more difficult to raise capital as and purchaseswhen we need it.
Because of the exemptions from various reporting requirements provided to us as an “emerging growth company” and because we will have an extended transition period for complying with new or revised financial accounting standards, we may be less attractive to investors and it may be difficult for us to raise additional capital as and when we need it. Investors may be unable to compare our business with other companies in our industry if they believe that our financial accounting is not as transparent as other companies in our industry. If we are unable to raise additional capital as and when we need it, our financial condition and results of operations may be materially and adversely affected.
Future issuances of common shares may be made only in those states.adversely affected by the SPA.
In additionThe market price of our Common Stock could decline as a result of issuances and without limitingsales by us, including pursuant to the foregoing,Securities Purchase Agreement (the “SPA”), or sales by our existing shareholders, of Common Stock, or the perception that these issuances and sales could occur. Sales by our shareholders might also make it more difficult for us to issue and sell Common Stock at a time and price that we will be subject to applicable provisions, rules and regulations underdeem appropriate. It is likely that the Exchange Act with regard to security transactions duringsale of shares by Bellridge may depress the periodmarket price of time when this Registration Statement is effective.our Common Stock.
We will not use public solicitation or general advertising in connectionhave the right to issue shares of preferred stock. If we were to issue preferred stock, it is likely to have rights, preferences and privileges that may adversely affect the Common Stock.
We are authorized to issue 10,000,000 shares of preferred stock, with the offering. The shares willsuch rights, preferences and privileges as may be offered at a fixed price of $0.0125 per share for the duration of the offering. There is no minimum number of shares required to be sold to close the offering. This offering will terminate upon the earlier to occur of (i) 90 days after this registration statement becomes effective with the Securities and Exchange Commission, or (ii) the date on which all 3,000,000 shares registered hereunder have been sold. We may, at our discretion, extend the offering for an additional 90 days. In any event, the offering will end within six months of this Registration Statement being declared effective
This is a direct participation offering since we, and not an underwriter, are offering the stock. We will receive all of the proceedsdetermined from such sales of securities and are bearing all expenses in connection with the registration of our shares.
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of the date of this prospectus, the total number of shares owned beneficiallytime-to-time by our sole officer and director, and key employees, individually and as a group, and the present ownersboard of 5% or more of our total outstanding shares. The stockholder listed below has direct ownership of her shares and possesses sole voting and dispositive power with respect to the shares.
|
|
|
| Number of |
| Percentage |
Title of Class |
| Name |
| Shares Owned |
| of Shares(1) |
Shares of Common Stock |
| Jocelyn Nicholas (2) |
| 9,000,000 |
| 100% |
|
| 3811 Alden Way, |
|
|
|
|
|
| Sarasota, FL 34232 |
|
|
|
|
(1) Based on 9,000,000 shares outstanding as of April 8, 2013.
(2) The person named above may be deemed to be a “parent” and “promoter” of our company, within the meaning of such terms under the Securities Act of 1933, Jocelyn Nicholas is the only “parent” and “promoter” of the company.directors. We currently have no promoter as defined by item 405 of Regulation C.
For the period ended July 31 , 2013, a total of 9,000,000designated 10,000 shares of common stock were issued to our sole officer and director, allSeries A Preferred Stock, none of which are restricted securities, as definedissued and outstanding. Our board of directors is empowered, without shareholder approval, to issue preferred stock in Rule 144one or more series, and to fix for any series the dividend rights, dissolution or liquidation preferences, redemption prices, conversion rights, voting rights, and other rights, preferences and privileges for the preferred stock. The issuance of shares of preferred stock, depending on the rights, preferences and privileges attributable to the preferred stock, could adversely reduce the voting rights and powers of the RulesCommon Stock and Regulationsthe portion of the SEC promulgatedCompany’s assets allocated for distribution to Common Stock holders in a liquidation event, and could also result in dilution in the book value per share of the Common Stock we are offering. The preferred stock could also be utilized, under certain circumstances, as a method for raising additional capital or discouraging, delaying or preventing a change in control of the Securities Act. Under Rule 144,Company, to the detriment of the investors in the Common Stock offered hereby. We cannot assure you that the Company will not, under certain circumstances, issue shares of its preferred stock.
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Conversions of the Notes may cause dilution to existing shareholders and depress the market price of our Common Stock.
Bellridge has committed to purchase or has purchased $1,500,000 of the Notes. From time to time, Bellridge may convert Notes into shares of our Common Stock at prices below the market price quoted on the OTCQB Market pursuant to the terms of the Notes. As a result, our existing shareholders could experience immediate dilution upon the conversion of Notes by Bellridge. The issuance and sale of the shares can be publicly sold, subject to volume restrictions and restrictions onupon conversion of the manner of sale, commencing one year after their acquisition. Under Rule 144, a shareholder can sell up to 1% of total outstanding shares every three months in brokers’ transactions. Shares purchased in this offering, which will be immediately resalable, and sales of all of our other shares after applicable restrictions expire, couldNotes may also have a depressivean adverse effect on the market price of the common shares. Bellridge may resell some, if not all, of the shares that we issue to it on conversion of the Notes and such sales could cause the market price of our Common Stock to decline significantly. To the extent of any such decline, any subsequent conversions could require us to issue a greater number of shares to Bellridge in exchange for each dollar amount of Bellridge Note converted. Under these circumstances, the existing shareholders of our company will experience greater dilution. The effect of this dilution may, in turn, cause the price of our Common Stock to decrease further, both because of the downward pressure on the stock price that would be caused by a large number of sales of our shares into the public market by Bellridge, and because our existing stockholders may disagree with a decision to sell shares to Bellridge at a time when our stock price is low, and may in response decide to sell additional shares, further decreasing our stock price.
We are registering an aggregate of 144,649,220 shares of Common Stock for resale including 48,400,470 shares of Common Stock issuable upon the conversion of the Notes (including, without limitation, the anti-dilution clauses contained in the Notes), 7,894,737 shares of Common Stock issuable upon the exercise of the November Warrant (including, without limitation, the anti-dilution clauses contained in the November Warrant), 2,792,267 Commitment Shares issued to Bellridge, 560,717 shares of Common stock issuable upon the exercise of the FA Warrants, and 85,000,000 shares of Common Stock issuable upon the exercise of the April Warrants. The sale of such shares could depress the market price for our Common Stock.
We are registering the resale of an aggregate of 144,649,220 shares of Common Stock under the Registration Statement of which this prospectus forms a part including, 2,793,296 shares of Common Stock issued to Bellridge as a commitment fee, 48,400,470 shares of Common Stock issuable upon the conversion of the Notes, 7,894,737 shares of Common Stock issuable upon the exercise of the November Warrant, 560,717 shares of Common Stock issuable upon the exercise of the FA Warrant, and 85,000,000 shares of Common Stock issuable upon the exercise of the April Warrants. The sale of these shares into the public market by the Selling Security Holders could depress the market price for our Common Stock.
Limitations on director and officer liability and indemnification of our officers and directors by us may discourage stockholders from bringing suit against a director.
Black Cactus Global’s Articles of Incorporation and Bylaws provide, with certain exceptions as permitted by governing state law, that a director or officer shall not be personally liable to us or our stockholders for breach of fiduciary duty as a director, except for acts or omissions which involve intentional misconduct, fraud or knowing violation of law, or unlawful payments of dividends. These provisions may discourage stockholders from bringing suit against a director for breach of fiduciary duty and may reduce the likelihood of derivative litigation brought by stockholders on our behalf against a director. In addition, the Company’s Articles of Incorporation and Bylaws may provide for mandatory indemnification of directors and officers to the fullest extent permitted by governing state law.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, including the sections entitled “Risk Factors”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business”, contains forward-looking statements that include information relating to future events, future financial performance, strategies, expectations, our competitive environment, regulation and availability of resources. These forward-looking statements include, without limitation, statements regarding: proposed new products or services; our statements concerning litigation or other matters; statements concerning projections, predictions, expectations, estimates or forecasts for our business, financial and operating results and future economic performance; statements of management’s goals and objectives; trends affecting our financial condition, results of operations or future prospects; our financing plans or growth strategies; and other similar expressions concerning matters that are not historical facts. Words such as “may”, “will”, “should”, “could”, “would”, “predicts”, “potential”, “continue”, “expects”, “anticipates”, “future”, “intends”, “plans”, “believes” and “estimates,” and similar expressions, as well as similar statements in the future tense, identify forward-looking statements.
Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by which, that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from what is expressed in or suggested by the forward-looking statements.
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Forward-looking statements speak only as of the date they are made. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.
NOVEMBER PRIVATE PLACEMENT
November Purchase Agreement
On November 27, 2017, the Company entered into a Securities Purchase Agreement (the “Original November Purchase Agreement”), with Bellridge Capital, L.P. (“Bellridge”) pursuant to which the Company agreed to sell to Bellridge an aggregate of $1,500,000 principal amount of Senior Secured Convertible Promissory Notes (the “Notes”) and a Common Stock purchase warrant (the “November Warrant”) to purchase up to 48,400,470 shares of the Company’s Common Stock, $0.0001 par value per share (the “Common Stock”). On April 5, 2018, the Company entered into an Amendment to Securities Purchase Agreement (the “Amendment”; and together with the “Original November Purchase Agreement”, the “November Purchase Agreement”), with Bellridge, whereby the schedule of tranche funding was amended. On November 27, 2017, the Company closed the first tranche under the November Purchase Agreement and issued a Note in the principal amount of $500,000 to Bellridge, as well as the November Warrant. On December 20, 2017, the Company received the second tranche under the November Purchase Agreement and issued a Note in the principal amount of $300,000 to Bellridge. The Note was issued in April, 2018 with an effective date of December 20, 2017 which is when we received the funds.
Bellridge is obligated to purchase from the Company a Note for the third tranche in the principal amount of $200,000 and a Note for the fourth tranche in the principal amount of $500,000 as follows: within five (5) after the Company receives the first set of comments from the U.S. Securities and Exchange Commission, so long as the comments are reasonable in the sole discretion of Bellridge; and within five (5) days after the Effectiveness Date (as defined in the November Registration Rights Agreement (as defined below)), respectively.
Bellridge is not required to purchase the third tranche and fourth tranches Notes in the event that: (i) the Company, any of our common stockits subsidiaries, or any of the officers or directors of the Company or its subsidiaries commit fraud; (ii) the Company or any of its subsidiaries breach any convents in any of the transaction documents related to the November Purchase Agreement and Notes; (ii) there is an Event of Default (as defined in the Notes) on any closing date with respect to any tranche; and (iv) there is any event of default under any other transaction documents related to the November Purchase Agreement or Notes.
Commitment Shares
As consideration for Bellridge entering into the November Purchase Agreement and agreeing to purchase the Notes and the November Warrant, the Company issued to Bellridge 2,793,296 shares weof Common Stock as commitment shares (the “Commitment Shares”).
Notes
The Notes are offering.senior secured obligations of the Company. The Notes rank senior to the Company’s existing and future indebtedness and are secured by all assets of the Company and its subsidiaries, pursuant to a Security Agreement (as defined below) and the IP Security Agreement (as defined below). Unless earlier converted or redeemed, the Notes will mature one (1) year from their issuance. The Notes bear interest at a rate of 5% per annum, which twelve (12) months’ interest amount is guaranteed.
At any time after issuance of the Notes, so long as there is no event of default under the Notes, the Company may deliver to Bellridge a notice of prepayment with respect to any portion of the principal amount of the Notes, any accrued and unpaid (including, without limitation, guaranteed interest on any outstanding principal), and any other amounts due under the Notes). If the Company exercises its right to prepay the Notes, the Company will pay to Bellridge an amount in cash equal to the sum of the then outstanding principal amount of the Notes and guaranteed interest as follows: (i) within ninety (90) days of initial issuance date of such Note, a 115% premium; (ii) from the ninety-first (91st) day after initial issuance date of such Note through the one hundred eightieth (180th) after the initial issuance date of such Note, a 110% premium; and (iii) from the one hundred eighty-first first (181st) day after initial issuance date of such Note through the day prior to the maturity date of such Note, a 125% premium. Bellridge may continue to convert such Note from the date of notice of prepay is given until the date of the prepayment.
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The Notes are convertible at any time, in whole or in part, at the option of Bellridge into shares of Common Stock at a conversion price (the “Fixed Conversion Price) equal to the lesser of (i) ten cents ($0.10), and (ii) seventy percent (70%) of the lowest traded price in the twenty (20) consecutive Trading Days (as defined in the Notes) on the Trading Market (as defined in the Notes) prior to the Conversion Date (as defined in the Notes). The Fixed Conversion Price which is subject to adjustment for full anti-dilution protection, stock dividends, stock splits, combinations or similar events.
In the event of an Event of Default (as defined in the Notes) under the Notes, one hundred thirty-five percent (135%) of the outstanding principal amount of the Notes, plus accrued but unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration shall become, at Bellridge’s election, immediately due and payable at its option, in cash or in shares of Common Stock (subject to the Equity Conditions (as defined in the Notes)), at an alternate conversion price of sixty percent (60%) of the lowest traded price in the twenty (20) consecutive Trading Days (as defined in the Notes) prior to the Conversion Date (as defined in the Notes). Additionally, the interest rate of the Notes shall then accrue at an additional interest rate equal to the lesser of two percent (2%) per month (twenty-four percent (24%) per annum) or the maximum rate permitted under applicable law.
Bellridge has no right to convert the Notes to the extent that such conversion would result in Bellridge being the beneficial owner in excess of 4.99% (or, upon election of Bellridge, 9.99%), which beneficial ownership limitation may be increased or decreased up to 9.99% upon notice to the Company, provided that any increase in such limitation will not be effective until sixty-one (61) days following notice to the Company.
So long as the Notes are outstanding or Bellridge holds any shares of Common Stock issued upon conversion of the Notes, the Company is prohibited from entering into any Variable Rate Transactions (as defined in the Notes). So long as the Notes are outstanding, the Company is prohibited from entering into any Exchange Transaction (as defined in the Notes).
November Warrant
The November Warrant entitles Bellridge to purchase up to 7,894,737 shares of Common Stock. The November Warrant is exercisable beginning on May 27, 2018, through the fourth (4th) anniversary of such initial exercisability date. The November Warrant has an initial exercise price equal to the Fixed Conversion Price of the Notes (the “November Exercise Price”). The November Exercise Price is subject to adjustment for full anti-dilution protection, stock dividends, stock splits, combinations or similar events.
Bellridge has no right to exercise the November Warrant to the extent that such exercise would result in Bellridge being the beneficial owner in excess of 4.99% (or, upon election of Bellridge, 9.99%), which beneficial ownership limitation may be increased or decreased up to 9.99% upon notice to the Company, provided that any increase in such limitation will not be effective until sixty-one (61) days following notice to the Company.
So long as the November Warrant is outstanding or Bellridge holds any shares of Common Stock issued upon exercise of the November Warrant, the Company is prohibited from entering into any Variable Rate Transactions (as defined in the November Warrant). So long as the November Warrant is outstanding, the Company is prohibited from entering into any Exchange Transaction (as defined in the November Warrant).
FA Warrant
The FA Warrant was issued to Aegis Capital Corp. (“Aegis”), the exclusive financial advisor to the Company, pursuant to that certain Financial Advisory Agreement, dated November 8, 2017 (the “FA Agreement), between the Company and Aegis, as partial compensation of Aegis’ advisory fees. The FA Agreement contains certain terms related to Aegis’ engagement as the Company’s exclusive financial advisor for a period of thee (3) months after November 8, 2017, including, without limitation, Aegis’ advisory fees. The FA Warrant entitles Aegis to purchase up to 560,717 shares of Common Stock. The FA Warrant is exercisable beginning on the date of its issuance through the sixty (60)-month anniversary of such initial exercisability date. The FA Warrant has an initial exercise price of $0.10 (the “FA Exercise Price”). The FA Exercise Price is subject to adjustment for full anti-dilution protection, stock dividends, stock splits, combinations or similar events. Aegis may exercise the FA Warrant on a cashless basis at any time, regardless of whether the shares of Common Stock underlying the FA Warrant are registered on this prospectus.
Aegis has no right to exercise the FA Warrant to the extent that such exercise would result in Aegis being the beneficial owner in excess of 9.99%.
Aegis has certain piggy-back registration rights to demand that the Company register on this prospectus the shares of Common Stock underlying the FA Warrant. Aegis may also assign some or all of the FA Warrant or the shares of Common stock underlying the FA Warrant to its permitted assigns.
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Our sole officerNovember Registration Rights Agreement
In connection with the sale of the Notes and directorNovember Warrant, the Company entered into a Registration Rights Agreement, dated November 27, 2017, as amended by that certain Amendment to Registration Rights Agreement, dated April 13, 2018 (collectively, the “November Registration Rights Agreement”), with Bellridge, pursuant to which the Company agreed to register the shares of Common Stock underlying the Notes and the November Warrant on a Form S-1 registration statement (the “November Registration Statement”) to be filed with the Securities and Exchange Commission within thirty (30) days after the date of the initial closing under the Purchase Agreement (the “November Filing Date”) and to cause the November Registration Statement to be declared effective under the Securities Act of 1933, as amended (the “Securities Act”) within one hundred twenty (120) days following the November Filing Date (the “November Effectiveness Date”). If certain of its obligations under the November Registration Rights Agreement are not met, the Company is required to pay partial liquidated damages to Bellridge. The Company did not file the November Registration Statement by the November Filing Date and it will continuenot be declared effective by the November Effectiveness Date.
Security Documents
In connection with the sale of the Notes and November Warrant, the Company entered into a security agreement, dated November 27, 2017 (the “Security Agreement”), between the Company and Bellridge. Pursuant to own the majoritySecurity Agreement, Bellridge was granted a security interest in all assets of ourthe Company to secure the payment and performance of all obligations of the Company under the Notes, November Warrant, November Purchase Agreement, November Registration Rights Agreement, Security Agreement, IP Security Agreement (as defined below), and the Subsidiary Guarantee (as defined below).
Inaddition, in connection with the Security Agreement, the Company entered into an Intellectual Property Security Agreement, dated November 27, 2017 (the “IP Security Agreement”), with Bellridge. Pursuant to the IP Security Agreement, Bellridge was granted a security interest in all intellectual property of the Company to secure the payment and performance of all obligations of the Company under the Notes, November Warrant, November Purchase Agreement, November Registration Rights Agreement, Security Agreement, the IP Security Agreement, and the Subsidiary Guarantee (as defined below). Further, the Company entered into a Subsidiary Guarantee, dated November 27, 2017 (the “Subsidiary Guarantee”), pursuant to which it agreed that any current or future subsidiaries must guarantee and act as surety for payment of the Notes and other obligations of the Company under the November Warrant, November Purchase Agreement, November Registration Rights Agreement, Security Agreement, IP Security Agreement, and the Subsidiary Guarantee.
APRIL PRIVATE PLACEMENT
April Purchase Agreement
The Company entered into a Securities Purchase Agreement, dated April 5, 2018, as amended by that certain Amendment to Securities Purchase Agreement, dated April 13, 2018 (collectively, the “April Purchase Agreement”), with Bellridge Capital, L.P. (“Bellridge”) pursuant to which the Company sold to Bellridge for $0.003 three (3) common stock afterpurchase warrants to purchase up to 85,000,000 shares of Common Stock as follows: (i) 28,339,000 shares of Common Stock underlying that certain common stock purchase warrant (the “First April Warrant”); (ii) 28,330,500 shares of common stock underlying that certain common stock purchase warrant (the “Second April Warrant”); and (iii) 28,330,500 shares of common stock underlying that certain Common Stock purchase warrant (the “Third April Warrant”; together with the First April Warrant and the second April Warrant, the “April Warrants”).
The April Warrants are exercisable beginning on the date of their issuance through the sixty (60)-month anniversary of such initial exercisability date. The April Warrants have an initial exercise price of $0.10 (the “April Exercise Price”). The April Exercise Price is subject to adjustment for full anti-dilution protection, stock dividends, stock splits, combinations or similar events.
Bellridge has no right to exercise any of the April Warrants to the extent that such exercise would result in Bellridge being the beneficial owner in excess of 9.99%.
April Registration Rights Agreement
In connection with the sale of the April Warrants, the Company entered into a Registration Rights Agreement, dated April 13, 2018, effective as of April 5, 2018, with Bellridge, pursuant to which the Company agreed to register the shares of Common Stock underlying the April Warrants on a Form S-1 registration statement (the “April Registration Statement”) to be filed with the Securities and Exchange Commission on or prior to April 16, 2018 (the “April Filing Date”) and to cause the April Registration Statement to be declared effective under the Securities Act within one hundred twenty (120) days following the April Filing Date. If certain of its obligations under the April Registration Rights Agreement are not met, the Company is required to pay partial liquidated damages to Bellridge.
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USE OF PROCEEDS
The Selling Security Holders will receive all of the proceeds from the sale of shares of Common Stock under this prospectus. We will not receive any proceeds from these sales. To the extent we receive proceeds from the exercise of the November Warrant, the FA Warrant, and the April Warrants (collectively, the “Warrants”) held by the Selling Security Holders, we will use those proceeds for working capital, retirement of debt, officer salaries, product development and testing. We have agreed to bear the certain expenses relating to the registration of the shares of Common Stock being register herein for each of the Selling Security Holders.
See “Plan of Distribution” elsewhere in this prospectus for more information.
SELLING SECURITY HOLDERS
This prospectus covers the offering regardless of up to 144,649,220shares of Common Stock being offered by the Selling Security Holders, which includes the Commitment Shares and shares of Common Stock acquirable upon the conversion or exercise of the Notes and Warrants (as defined below) held by the Selling Security Holders as described herein. We are registering the shares of Common Stock in order to permit the Selling Security Holders to offer their shares of Common Stock for resale from time to time.
The table below lists the Selling Security Holders and other information regarding the “beneficial ownership” of the shares of Common Stock by the Selling Security Holders. In accordance with Rule 13d-3 of the Exchange Act, “beneficial ownership” includes any shares of Common Stock as to which the Selling Security Holders have sole or shared voting power or investment power and any shares of Common Stock the Selling Security Holders have the right to acquire within sixty (60) days (including shares of Common Stock issuable pursuant to the Notes currently convertible, or convertible within sixty (60) days), and upon exercise of the Warrants currently exercisable or exercisable within sixty (60) days.
The second column indicates the number of shares sold. Since he will continue control our company afterof Common Stock beneficially owned by the offering, investorsSelling Security Holders, based on its ownership as of April 13, 2018. The second column also assumes exercise of all the Notes and Warrants held by the Selling Security Holders on April 13, 2018, without regard to any limitations on conversion or exercise described in this offering will be unable to change the course of our operations. Thus,prospectus or in such Notes and Warrants, respectively
The third column lists the shares we are offering lackof Common Stock being offered by this prospectus by the value normally attributable to voting rights. Selling Security Holders. Such aggregate amount of Common Stock does not take into account any applicable limitations on conversion or exercise of the Notes and Warrants, respectively.
This could result in a reduction in valueprospectus covers the resale of (i) the Commitment Shares, (ii) all of the shares you own because of their ineffective voting power. NoneCommon Stock issued and issuable upon conversion of our commonthe Notes, (iii) any additional shares of Common Stock issued and issuable in connection with the Notes (in each case without giving effect to any limitations on exercise set forth in the Notes), (iv) any securities issued or then issuable upon any full anti-dilution protection, stock is subjectsplit, dividend or other distribution, recapitalization or similar event with respect to outstanding options, warrants,the Notes, (v) all of the shares of Common Stock issued and issuable upon exercise of the November Warrant, (vi) any additional shares of Common Stock issued and issuable in connection with the November Warrant (in each case without giving effect to any limitations on exercise set forth in the November Warrant), (vii) any securities issued or then issuable upon any full-anti-dilution protection, stock split, dividend or other distribution, recapitalization or similar event with respect to the November Warrant, (viii) all of the shares of Common Stock issued and issuable upon exercise of the FA Warrant, (ix) any additional shares of Common Stock issued and issuable in connection with the FA Warrant (in each case without giving effect to any limitations on exercise set forth in the FA Warrant), (x) any securities convertible into common stock.issued or then issuable upon any full-anti-dilution protection, stock split, dividend or other distribution, recapitalization or similar event with respect to the FA Warrant, (xi) all of the shares of Common Stock issued and issuable upon exercise of the April Warrants, (xii) any additional shares of Common Stock issued and issuable in connection with the April Warrants (in each case without giving effect to any limitations on exercise set forth in the April Warrants), and (xiii) any securities issued or then issuable upon any full-anti-dilution protection, stock split, dividend or other distribution, recapitalization or similar event with respect to the April Warrants
Because the conversion price and exercise price of the Notes and Warrants may be adjusted, respectively, the number of shares of Common Stock that will actually be issued upon conversion and exercise of the Notes and Warrants, respectively, may be more or less than the number of shares of Common Stock being offered by this prospectus. The company is hereby registering 3,000,000Selling Security Holders can offer all, some or none of its common shares in addition toof Common Stock, thus we have no way of determining the 9,000,000number of shares currently issuedof Common Stock it will hold after this offering. Therefore, the fourth and outstanding. The price per share is $0.01 (please seefifth columns assume that the Selling Security Holders will sell all shares of Common Stock covered by this prospectus. See “Plan of Distribution” above).Distribution.”
The 9,000,000 shares currently issued and outstanding were acquired by our sole officer and director duringEach of the period ended, April 30, 2013. We issuedSelling Security Holders identified below has confirmed to us that it is not a totalbroker-dealer or an affiliate of 9,000,000 common shares for considerationa broker-dealer within the meaning of $9,000, which was accounted for as a purchase of common stock. The Company received $9,000 cash.United States federal securities laws.
DESCRIPTION OF SECURITIES- 21 -
|
| Number of |
| Maximum |
| Number of |
| Percentage |
|
Bellridge Capital, L.P. (1) |
| 2,793,296 |
| 144,088,503 |
| — |
| — |
|
Aegis Capital Corp. (2) |
| — |
| 560,717 |
| — |
| — |
|
TOTAL |
| 2,793,296 |
| 144,649,220 |
| — |
| — |
|
Common Stock
The authorized common stock is two hundred and fifty million (250,000,000) shares with a par value of $0.0001. Shares of our common stock:
__________
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Material Relationships with Selling Security Holders
We refer youThe Selling Security Holders have not at any time during the past three (3) years acted as one of our employees, officers or directors or had a material relationship with us except with respect to transactions described above in “November Private Placement” and “April Private Placement”.
MARKET PRICE OF COMMON STOCK AND OTHER STOCKHOLDER MATTERS
Our Common Stock is currently quoted on the OTCQB Market, which is sponsored by OTC Markets Group, Inc. The OTCQB Market is a network of security dealers who buy and sell stock. The dealers are connected by a computer network that provides information on current “bids” and “asks,” as well as volume information. Our shares are quoted on the OTCQB Markets under the symbol “BLGI.”
The following table sets forth the range of high and low bid quotations for our Bylaws, our Articles of Incorporation, and the applicable statutesCommon Stock for each of the State of Florida for a more complete description ofperiods indicated as reported by the rightsOTCQB. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and liabilities of holders of our securities.may not necessarily represent actual transactions.
Non-Cumulative VotingTrading Market
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| Closing Price |
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| High |
| Low |
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Year Ended April 30, 2016 |
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First Quarter |
| $ | 0.13 |
| $ | 0.06 |
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Second Quarter |
| $ | 0.83 |
| $ | 0.03 |
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Third Quarter |
| $ | 0.70 |
| $ | 0.01 |
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Fourth Quarter |
| $ | 0.60 |
| $ | 0.03 |
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Year Ended April 30, 2017 |
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First Quarter |
| $ | 0.83 |
| $ | 0.03 |
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Second Quarter |
| $ | 0.32 |
| $ | 0.08 |
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Third Quarter |
| $ | 0.66 |
| $ | 0.09 |
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Fourth Quarter* |
| $ | 0.40 |
| $ | 0.06 |
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* Through April 20, 2018 |
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Holders of
The high and low bid price for shares of our common stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in that event, the holders of the remaining shares will not be able to elect any of our directors. After this offering is completed, present stockholders will own approximately 75% of our outstanding shares.
Cash Dividends
As of the date of this Prospectus, we have not declared or paid any cash dividends to stockholders. The declaration of any future cash dividend will be at the discretion of our Board of Directors and will depend upon our earnings, if any, our capital requirements and financial position, our general economic conditions, and other pertinent conditions. It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.
INTEREST OFNAMED EXPERTS AND COUNSEL
No expert or counsel named in this Prospectus as having prepared or certified any part thereof or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of our common stock was employed on a contingency basis or had or is to receive, in connection with the offering, a substantial interest, directly or indirectly, in us. Additionally, no such expert or counsel was connected with us as a promoter, managing or principal underwriter, voting trustee, director, officer or employee.
Angela Collette, Attorney and Counselor at Law, 28325 Utica Road, Roseville, Michigan 48066, (321) 507-7836, Atty4defense@aol.com, has passed upon certain legal matters in connection with the validity of the issuance of the shares of common stock.
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Messineo & Co, CPAs, LLC of 2451 North McMullen Booth Road, Ste. 309, Clearwater, FL 33759, (727) 421-6268, has audited our Financial Statements for the period April 8, 2013 (date of inception) through April 30, 2013 and to the extent set forth in its report, which are included herein in reliance upon the authority of said firm as experts in accounting and auditing. There were no disagreements related to accounting principles or practices, financial statement disclosure, internal controls or auditing scope or procedure from date of appointment as our independent registered accountant through the period of audit inception April 8, 2013 through July 31 , 2013.
BUSINESS DESCRIPTION
Overview
As of the date of this Prospectus, we have not established any business operations and have not achieved any revenues. We have not commenced providing any services, have not created relationships with any potential customers, have not obtained a facility or achieving our business plan. Importantly, there is no guarantee that we will succeed in accomplishing any other goals. In order to accomplish these goals, we anticipate that we will require not less than $575,000 in financing in addition to the $37,500 ($612,500 in total) that we are seeking to raise through this offering. We have taken no steps to secure the disclosed additional financing that we will need to implement our business plan.
We were incorporated in the State of FloridaCommon Stock on April 8, 2013, as a for-profit company with a fiscal year end of April 30, 2013.
We have not accomplished any of our intended efforts to date. We have not generated any revenues to date20, 2018, was $0.12 and our activities have been limited to organizational matters, the preparation of our business plan, and the preparation of the financial statements and other information presented in this Prospectus. Our ability to establish operations is entirely dependent on our ability to raise sufficient financing to execute our business plan, however there is no guarantee$0.105, respectively, based upon bids that we will be successful in this regard. Furthermore, if we successfully establish operations, there is no guarantee that there will be significant market for our services or that we will achieve significant revenues, if at all.
We believe that we are not a blank check company subject to the provisions of Section (a)(2) of Rule 419 under the Securities Act of 1933 and pursuant to the guidelines specified in Securities Act Release No. 6932 (April 13, 1992) 1992 WL 81275. Section (a)(2) of Rule 419 defines a blank check company as a company that is issuing penny stock and that is “a development stage company that has no specific business plan or purpose or has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies, or other entity. “In the adopting release the Commission stated that would “scrutinize registered offerings for attempts to create the appearance that the registrant is not a development stage company or has a specific business plan, in an effort to avoid the application of Rule 419.” See id. At*2. The provisions of that Release discuss Rule 419 provisions which specify that a” blank check company” means a development stage company that either has no specific business plan or purpose, or has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies and is issuing “penny stock” as defined in Rule 3a51-1 of the Securities Exchange Act of 1934.
Envoy Group Corp. has a specific business plan. We are a development stage company with limited operating history. Our business plan and our purpose is disclosed in our Business Summary and Business Description section of our Registration Statement. We are relyingrepresent prices quoted by broker-dealers on the provisions of the above release, which specify that start-up companies with specific business plans are not subject to the provisions of Rule 419, even if operations have not commenced at the time of the offering. The company, its sole officer and director, any promoters and any affiliates have no intentions, that once the company is reporting, to be used as a vehicle for a private company to become a reporting company.OTCQB.
We intend to open a Pilot Adult Day Care Center in the Sarasota County, Florida area. We intend to develop our business to cater to seniors who can no longer manage independently, or who are isolated and lonely. With life expectancy rising, more and more seniors will need assistance as they age. We intend to provide seniors with a program to socialize with others while still receiving needed care services. We intend to provide seniors with a non-residential facility that supports the health, nutritional, social support and daily living needs in a professionally staffed group setting enabling them to enjoy their day while receiving care and support they need. We plan to have our services to be supervised by registered and or licensed personnel. We intend the daily activities for our seniors to be tailored to be tailored to their needs by providing them with supervised activity.
Envoy Group Corp. feels that we can create a vibrant and social community for seniors to enjoy their day while receiving the care and support they need.
Envoy Group Corp. intends to provide a specially trained staff, to handle seniors complex health related needs. We anticipate that family care givers will have peace of mind knowing their aging parents or senior loved ones is spending the day in our intended safe, fun and social environment while receiving expert care.
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There were 40.1 million Americans aged 65 or older in 2010 and 80.1 million Americans projected in 2050. (http://www.census.gov/prod/1/pop/p23-190/p23190-f.pdf). Envoy Group Corp. believes that as the population grays and lives longer, the demand and need for the care of the elderly will grow and rise in importance. Meeting their special needs is expected to be one of the fastest growing industry. It is Envoy Group Corp. belief that the elderly resist entering institutions full time, which means Envoy Group Corp. services is poised to assist the elderly as they continue to live at home.
We anticipate that families will consider Adult Day Care services for their parents and grandparents. We anticipate that the government may be willing to assist families with care giving at home.
Through our intended Adult Day Care Centers, we intend to create a caring and stress-free environment that combines educational, health and fitness , and emotional well-being spa services. We intend to utilize only the most qualified professional staff. All Registered Nurses, Physical Therapists, Nutritionist licensed by the state. We intend to develop a reputation by placing heavy emphasis on our Licensed/Certified professional staff and expert consultants. We intend to offer consumer numerous options and choices for service as well as counseling.
Nursing Services
Envoy Group Corp. believes our Day Care Center will be staffed with the most qualified Registered and/or Licensed nurses in the field. We intend to provide specially certified and trained staff to work with issues related to aging seniors.
Nursing Services that are offered intend to include:
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Meals
Meals are the perfect time for friends to socialize, celebrate and sharing memories. Envoy Group Corp. feels our intended dining room and food may help turn each meal into a special event. We intend to offer a light breakfast, catered lunch and an afternoon snack and special diets that are easily accommodated and intended to assist at mealtime.
Activities
Envoy Group Corp. intends to create a custom program of individual and group activities that consider the whole person as an individual including, social, emotional, spiritual, physical, and creative needs.
Our intended activities will be innovative and different:
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Salon And Spa Services:Approximate Number of Equity Security Holders
Our intended center intendsAs of April 20, 2018, there were approximately 33 stockholders of record. Because shares of our Common Stock are held by depositaries, brokers and other nominees, the number of beneficial holders of our shares is substantially larger than the number of stockholders of record.
Dividends
Holders of our Common Stock are entitled to receive dividends if, as and when declared by the Board of Directors out of funds legally available therefore. We have a Unisex Beauty Salon staffed by outside beauticians familiar with handling the special needs of seniors. Our Salon and Spa Services intends to include the following:
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never declared or paid any dividends on our Common Stock. We intend to retain any future earnings for use in the operation and expansion of our business. Consequently, we do not anticipate paying any cash dividends on our Common Stock to our stockholders for the foreseeable future.
Penny Stock
Our stock is considered a penny stock. The SEC has adopted rules that regulate broker-dealer practices in transactions in penny stocks. Penny stocks are generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation.
The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with: (a) bid and offer quotations for the following massages:penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statement showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements may have the effect of reducing the trading activity for our Common Stock. Therefore, stockholders may have difficulty selling our securities.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF
TransportationFINANCIAL CONDITION AND RESULTS OF OPERATION
Envoy Group Corp. intends to provide (if required) door to door transportation from our center in the morning and evening. We also intend to locate our center near retail and business centers so dropping off and picking up are convenient.Overview
We intend over the next 18 months to establish an Adult Day Care Center servicesfor this discussion to provide an environmentinformation that sparks customer interest, excitement, education, healthwill assist in understanding our financial statements, the changes in certain key items in those financial statements, and fun. The company intends to supplement Ms. Nicholas,the primary factors that accounted for those changes, as well as how certain accounting principles affect our sole Officerfinancial statements. This discussion should be read in conjunction with our financial statements and Director experience by utilizing consultants in other specialties to create strategyaccompanying notes for the fiscal years ended April 30, 2017 and content. The intended Center will consist of an educational area, fitness area, spa service area, socialization area and cafeteria.2016.
Ms. Jocelyn Nicholas, our President, CEO and Director, intends to use her 15 yearsGeneral Overview of experience in the Salon and Spa industry where she has provided services to seniors in her place of business, assisted living facilities, hospitals, hospice, individual homes in the Sarasota County, FL region. Ms. Nicholas networks with other professionals that can provide additional support as consultants that will be required in the Adult Day Care Center.Our Business
Overview
We do not currently have any agreementsintend for this discussion to provide information that will assist in place with customersunderstanding our financial statements, the changes in certain key items in those financial statements, and the primary factors that accounted for the provision ofthose changes, as well as how certain accounting principles affect our services, or any suppliers.
Once our intended pilot Adult Day Care Center is established, we intend to offer others the opportunity to franchise our future name and concept.
BUSINESS LOCATION
As we have no operations, we currently require only limited office space for the administration of our business. This space is currently provided to us free of charge at the office of our sole Officer and Director. If we raise sufficient capital to implement our business plan, we intend to establish our base of operations in the County of Sarasota, Florida and to market our services in and around that location. However, as of the date of this Prospectus, we have not identified any specific location for our planned operating facility and do not have sufficient financial resources to lease such a facility.statements.
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SALES and MARKETING STRATEGYBusiness Overview
We intendThe Company is a Florida corporation incorporated on April 8, 2013 and was originally formed to marketbe in the business of providing adult daycare facilities for senior citizens. Since then, we have entered into licensing agreements for Blockchain software and that is the focus of our services by advertisingbusiness. The Company’s fiscal year end is April 30. To date, the Company has an exclusive license to a proprietary Blockchain software application and platform and we are engaged in electronic and local print media, by networking and calling on local Hospitals, Doctors, RNs, Religious Institutions, Senior Citizen housing complexes and others. We also plan to attend and exhibit at local and regional relevant trade shows. Finally, we plan to establish a website throughsubleasing that software as well as acquiring other businesses which we intend to market our services to potential customers.utilize Blockchain software.
BUSINESS PLAN IMPLEMENTATION SCHEDULEPlan of Operation
We have not established a scheduleThe Company plans to continue to sublicense the Blockchain software for which the Company has an exclusive license to other companies to generate revenue for the completionCompany. As part of specific tasks or milestones containedits strategy, the Company plans to continue to expand the Black Cactus Holding software platform for the discovery and delivery of digital content and applications. The Company plans to invest in additional research and development to continue to develop new and innovative Blockchain services and technologies. We do not have sufficient capital to fund our business plan. Withproposed operations. The Company has raised $800,000 from the clear exceptionsale of its Notes to Bellridge and anticipates selling an additional $700,000 in Notes to Bellridge to help fund its operations.
Use of estimates
Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Significant estimates were made for the fair value of Common Stock issued for services and for the BitReturn domain and brand, in estimating the useful life used for depreciation and amortization of our long-lived assets, and the valuation of deferred income tax assets. Actual results and outcomes may differ from management’s estimates and assumptions.
Revenue recognition
The Company recognizes revenue from its technology licensing and commercialization activities in accordance with paragraph 605-10-S99-1 of the costs associated with this offering ($9,000 whichFASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is paid by our CEOrealized or realizable and sole Directorearned.
The Company considers revenue realized or realizable and not partearned when all of this offering) virtually all aspectsthe following criteria are met: (i) persuasive evidence of our business plan are scalable in terms of size, quality and effectiveness, andan arrangement exists, (ii) the timing of their execution must be concurrent or near concurrent. For example, we believe that any investment in our infrastructure and other requirements must be concurrent or near concurrent with any investment in marketing, facility, equipment or labor. What’s more, the scale and quality of our infrastructure, marketing strategies, and potential employees, consultants may vary accordingservices have been rendered to the financing ultimately availablecustomer and accepted by the customer as completed pursuant to us, and will in turn have a corresponding impact on our capacityCompany’s Licensing Agreements, (iii) collectability is reasonably assured. The Company has yet to generate revenue. Our management believes that investing in our business plan too incrementally would cause us to squander resources on inferior infrastructure, labor, consultants and marketing that would ultimately prevent usrealize any revenues from undertaking efforts of sufficient scale or from establishing a competitive position in our industry. We anticipate that we will require our anticipated funding in order to execute our business plan in a manner that would allow us to maximize our revenue potential and competitive position in our industry.its licensing agreements.
COMPETITIONRecently Issued Accounting Pronouncements
We believeThe Company has implemented all new accounting pronouncements that the principal methods of competitionare in the company’s intended market are the traditional localeffect and regional adult day care companies. Sarah Adult Day Services Inc. Canton, OH 44704 appears to be the largest in the USAthat may impact its financial statements and operates in 18 states. However, we believe that very few companies are focusing on this need. We believe that ENVOY GROUP CORP. intents to enter into this market place to address problems with solutions. The National traditional companies have the finances and resources to become major players in this market if they elect to do so. Wedoes not believe that there isare any other new accounting pronouncements that have been issued that might have a huge growing needmaterial impact on its financial position or results of operations. Pursuant to Jumpstart Our Business Startups Act of 2012, as an “emerging growth company,” we are permitted to take advantage of an extended transition period for complying with new typesor revised accounting standards until such time as the standards are applicable to private companies. We have chosen to take advantage of this extended transition period. Accordingly, our financial statements may not be comparable to those of companies to enter into this market to provide adult day care services. However we believe, ENVOY GROUP CORP. Adult Day Care Center services may provide success in this market segment.that comply with public company effective dates.
The following table estimates our costs to open the Adult Day Care Center:
USE OF PROCEEDS |
| EST. BUDGET |
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Marketing & Brand Activities |
| $ | 100,000 |
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Wages & Consulting Fees |
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| 150,000 |
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Rent |
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| 55,000 |
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Computers/Network |
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| 15,000 |
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Web Design/Hosting |
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| 10,000 |
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Equipment/Vehicle |
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| 105,000 |
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Fixtures |
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| 25,000 |
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Working Capital |
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| 115,000 |
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TOTAL 18 MO. REQUIREMENT |
| $ | 575,000 |
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Employees and Employment AgreementsResults of Operations
AsOur results of April 8, 2013, we have no employees other than Ms. Nicholas, our sole officeroperations for the nine months ended January 31, 2018 and director. Ms. Nicholas has the flexibility to work on our business up to 10 to 25 hours per week. She is prepared to devote more time to our operations as may be required and we do not have any employment agreements with her.January 31, 2017 are summarized below:
We do not presently have pension, health, annuity, insurance, stock options, profit sharing, or similar benefit plans; however, we may adopt plans in the future. There are presently no personal benefits available to our sole director and officer.
During the initial implementation of our business plan, we intend to hire independent consultants to assist in the development and execution of our ENVOY GROUP CORP. business operation.
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Revenue |
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Net Loss (Income) and Comprehensive (Loss) Income |
| $ | (10,896,827 | ) | $ | (48,096 | ) |
Net Loss (Income) per Common Share, Basic and Diluted |
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| (0.10 | ) |
| (0.00 | ) |
Weighted Average Number of Common Shares Outstanding, Basic and Diluted |
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| 113,200,543 |
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| 80,576,000 |
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Government RegulationsWe had net (loss) income of $(7,734,866) and $(28,851) for the three months ended January 31, 2018 and 2017, respectively.
We are unaware of and do not anticipate having to expend significant resources to comply with any local/ state and governmental regulations of the market. We are subject to the laws and regulations of those jurisdictions in which we plan to offer our services’ which are generally applicable to business operations, such as business licensing requirements, income taxes and payroll taxes. In general, the development and operation of our business is not subject to special ENVOY GROUP CORP. regulatory and/or supervisory requirements. The State of Florida requires basic licensing, however, adults who are not residents, which we intend not to provide residents or live with us for a day or any period of time, are exempt from licensure as an adult day care center. However, the Agency must monitor the facility during regular inspection and at least biennially to ensure adequate space and sufficient staff. The Agency (Department of Elderly Affairs of the State of Florida) may conduct an abbreviated biennial inspection of key quality-of-care standards, in lieu of a full inspection, of a center that has a record of good performance. These standards shall be included in rules adopted by the Department of Elderly Affairs of the State of Florida. A minimum staff ratio of one staff member who provides direct services for every six participants shall be in the center at all times. We believe that Florida regulations for our intended Adult Day Care Center should have no impact on our services and business. The Federal Government relies on the State Regulations.
Intellectual Property
We do not currently hold rights to any intellectual property and have not filed for copyright or trademark protection for our name or intended website.
Research and Development
Since our inception to the date of this Prospectus, we have not spent any money on research and development activities.
Reports to Security Holders
We intend to furnish annual reports to stockholders, which will include audited financial statements reported on by our Certified Public Accountants. In addition, we will issue unaudited quarterly or other interim reports to stockholders, as we deem appropriate or required by applicable securities regulations.
Any member of the public may read and copy any materials filed by us with the Securities and Exchange Commission at the Securities and Exchange Commission’s Public Reference Room at 100 F Street, N.E. Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the Securities and Exchange Commission at 1-800-732-0330. The Securities and Exchange Commission maintains an internet website (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Securities and Exchange Commission.
DESCRIPTION OF PROPERTY
As our office space needs are limited at the current time, we are currently operating out of our sole director and officer’s office located at 3811 Alden Way, Sarasota, FL 34232. This space usage is donated free of charge by our sole director and officer.
JUMPSTART OUR BUSINESS STARTUPS ACT
In April 2012, the Jumpstart Our Business Startups Act (“JOBS Act”) was enacted into law. The JOBS Act provides, among other things:
Exemptions for emerging growth companies from certain financial disclosure and governance requirements for up to five years and provides a new form of financing to small companies;
Amendments to certain provisions of the federal securities laws to simplify the sale of securities and increase the threshold number of record holders required to trigger the reporting requirements of the Securities Exchange Act of 1934;
Relaxation of the general solicitation and general advertising prohibition for Rule 506 offerings;
Adoption of a new exemption for public offerings of securities in amounts not exceeding $50 million; and
Exemption from registration by a non-reporting company of offers and sales of securities of up to $1,000,000 that comply with rules to be adopted by the SEC pursuant to Section 4(6) of the Securities Act and exemption of such sales from state law registration, documentation or offering requirements.
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In general, under the JOBS Act a company is an emerging growth company if its initial public offering (“IPO”) of common equity securities was affected after December 8, 2011 and the company had less than $1 billion of total annual gross revenues during its last completed fiscal year. A company will no longer qualify as an emerging growth company after the earliest of
(i) the completion of the fiscal year in which the company has total annual gross revenues of $1 billion or more,
(ii) the completion of the fiscal year of the fifth anniversary of the company’s IPO;
(iii) the company’s issuance of more than $1 billion in nonconvertible debt in the prior three-year period, or
(iv) the company becoming a “larger accelerated filer” as defined under the Securities Exchange Act of 1934.
The JOBS Act provides additional new guidelines and exemptions for non-reporting companies and for non-public offerings. Those exemptions that impact the Company are discussed below.
Financial Disclosure. The financial disclosure in a registration statement filed by an emerging growth company pursuant to the Securities Act of 1933 will differ from registration statements filed by other companies as follows:
(i) audited financial statements required for only two fiscal years;
(ii) selected financial data required for only the fiscal years that were audited;
(iii) executive compensation only needs to be presented in the limited format now required for smaller reporting companies. (A smaller reporting company is one with a public float of less than $75 million as of the last day of its most recently completed second fiscal quarter)
However, the requirements for financial disclosure provided by Regulation S-K promulgated by the Rules and Regulations of the SEC already provide certain of these exemptions for smaller reporting companies. The Company is a smaller reporting company. Currently a smaller reporting company is not required to file as part of its registration statement selected financial data and only needs audited financial statements for its two most current fiscal years and no tabular disclosure of contractual obligations.
The JOBS Act also exempts the Company’s independent registered public accounting firm from complying with any rules adopted by the Public Company Accounting Oversight Board (“PCAOB”) after the date of the JOBS Act’s enactment, except as otherwise required by SEC rule.
The JOBS Act also exempts an emerging growth company from any requirement adopted by the PCAOB for mandatory rotation of the Company’s accounting firm or for a supplemental auditor report about the audit.
Internal Control Attestation. The JOBS Act also provides an exemption from the requirement of the Company’s independent registered public accounting firm to file a report on the Company’s internal control over financial reporting, although management of the Company is still required to file its report on the adequacy of the Company’s internal control over financial reporting.
Section 102(a) of the JOBS Act exempts emerging growth companies from the requirements in §14A(e) of the Securities Exchange Act of 1934 for companies with a class of securities registered under the 1934 Act to hold shareholder votes for executive compensation and golden parachutes.
Other Items of the JOBS Act. The JOBS Act also provides that an emerging growth company can communicate with potential investors that are qualified institutional buyers or institutions that are accredited to determine interest in a contemplated offering either prior to or after the date of filing the respective registration statement. The Act also permits research reports by a broker or dealer about an emerging growth company regardless if such report provides sufficient information for an investment decision. In addition the JOBS Act precludes the SEC and FINRA from adopting certain restrictive rules or regulations regarding brokers, dealers and potential investors, communications with management and distribution of a research reports on the emerging growth company IPO.
Section 106 of the JOBS Act permits emerging growth companies to submit 1933 Act registration statements on a confidential basis provided that the registration statement and all amendments are publicly filed at least 21 days before the issuer conducts any road show. This is intended to allow the emerging growth company to explore the IPO option without disclosing to the market the fact that it is seeking to go public or disclosing the information contained in its registration statement until the company is ready to conduct a roadshow.
Election to Opt Out of Transition Period. Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a 1933 Act registration statement declared effective or do not have a class of securities registered under the 1934 Act) are required to comply with the new or revised financial accounting standard.
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The JOBS Act provides a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of the transition period.
LEGAL PROCEEDINGS
We know of no materials, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any beneficial shareholder are an adverse party or has a material interest adverse to us.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
Our common stock is not traded on any exchange. We intend to apply to have our common stock quoted on the OTC Bulletin Board once this Prospectus has been declared effective by the SEC; however, there is no guarantee that we will obtain a listing.
There is currently no trading market for our common stock and there is no assurance that a regular trading market will ever develop. OTC Bulletin Board securities are not listed and traded on the floor of an organized national or regional stock exchange. Instead, OTC Bulletin Board securities transactions are conducted through a telephone and computer network connecting dealers. OTC Bulletin Board issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.
To have our common stock listed on any of the public trading markets, including the OTC Bulletin Board, we will require a market maker to sponsor our securities. We have not yet engaged any market maker to sponsor our securities, and there is no guarantee that our securities will meet the requirements for quotation or that our securities will be accepted for listing on the OTC Bulletin Board. This could prevent us from developing a trading market for our common stock. “At the present time we have no outstanding options or warrants to purchase securities convertible into common stock. Nor are there shares of common stock that could be sold according to Rule 144. Because we are considered a shell company as defined under Rule 405 of the Securities Act, Rule 144(i) states that Rule 144 is not available to shareholders for the resale of securities they acquired in this offering until (1) we cease to be a shell company, (2) we file current “Form 10” information with the SEC reflecting our new status as a company no longer meeting the definition of a shell company subjecting us to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, (3) we are current with the filing of all such required reports, and (4) one year has elapsed since we filed the current “Form 10” information with the SEC.”
Holders
As of the date of this Prospectus there was one holder of record of our common stock.
Dividends
To date, we have not paid dividends on shares of our common stock and we do not expect to declare or pay dividends on shares of our common stock in the foreseeable future. The payment of any dividends will depend upon our future earnings, if any, our financial condition, and other factors deemed relevant by our Board of Directors.
Equity Compensation Plans
As of the date of this Prospectus we did not have any equity compensation plans.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS
This section of the prospectus includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: “believe”, “expect”, “estimate”, “anticipate”, “intend”, “project” and similar expressions, or words that, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this prospectus. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.
Our financial statements are stated in United States Dollars (USD or US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. All references to “common shares” refer to the common shares in our capital stock.
- 27 -
Overview
We are a development-stage company, incorporated in the State of Florida on April 8, 2013, as a for-profit company, and an established fiscal year of April 30. We have not yet generated or realized any revenues from business operations. Our auditor has issued a going concerned opinion. This means there is substantial doubt that we can continue as an on-going business. Accordingly, we must raise cash from other sources other than loans we undertake.
From inception through July 31 , 2013, our business operations have primarily been focused on developing our business plan. We have spent a total of approximately $ 2,938 on start-up costs. We have not generated any revenue from business operations. All cash currently held by us is the result of the sale of common stock to our sole director and officer.
The maximum proceeds from this offering ($37,500) will satisfy our basic subsistence level, cash requirements for up 12 months, including legal and accounting costs associated with this offering which is being paid by us and not part of this offering ($9,000) , the costs associated with our continuous disclosure obligations, incidental expenses, and the cost of implementing the investigative aspects of our business plan, including identifying and securing additional sources of financing, employees/consultants, supplies, infrastructure , marketing and customers. 75% of the possible proceeds from this offering ($28,125) will satisfy our basic, subsistence level cash requirements for up to 9 months, while 50% of the proceeds ($18,750) will sustain us for up to six months, and 35% of the proceeds ($13,125) will sustain for up to four and half months. Our budgetary allocations may vary, however, depending on the percentage of proceeds that we obtain from the offering. For example, we may determine that it is more beneficial to allocate funds toward securing potential financing opportunities in the short term rather than conserve funds to satisfy continuous disclosure requirements for a longer period. Nevertheless, if we are only successful in selling 35% or less of the shares being registered, we will dedicate all proceeds to satisfy our continuous disclosure requirements.
If we are unable to raise additional monies other than the proceeds of this offering, we only have enough capital to cover the above described expenses. The expenses of this offering include the preparation of this prospectus, the filing of this registration statement and transfer agent fees. Implementing the business and marketing plan includes preparing basic marketing materials, contacting potential sources of financing, investigative activity of suppliers, consultants, and infrastructure. Our continuous disclosure requirements include costs of preparing quarterly financial statements and reports on forms 10-Q, 10-K and 8-K. As of July 31 , 2013, we had $5,562 cash on hand. This cash should cover the expenses of this offering.
PLAN OF OPERATIONS
We do not have adequate funds to satisfy our working capital requirements for the next twelve months. We will need to raise additional capital through this disclosed offering to continue our operations. We expect that after 18 months from the completion of this offering, we intend to implement our business and marketing plan. We believe we must raise a total of $612,500 ($575,000 in addition to the maximum proceeds of this offering) to pay for expenses associated with our development. These funds will be used to finance anticipated activities during our development plan as described below. All anticipated expenses are based on estimates made by our sole Officer and Director based on her experience in her industry on her personal research. These costs may vary considerably based on the current local, state, or national economic conditions.
Importantly, our business plan and allocation of proceeds may vary according to the amount of proceeds raised by the sale of securities hereunder and through other future financing efforts. The figures included in the below table show an increase in funds allocated to each category of expenses under our business plan in proportion to possible financing milestones (whether 35%, 50%, 75% or 100% of the $612,500 that we estimate we will require). Nevertheless, if our potential to raise capital appears exhausted, our management may decide to modify our business plan or to implement our business plan on a reduced scale and quality. This might entail the use of a smaller facility, used (equipment, vehicle, furniture and fixtures), less marketing, reduced personnel and consultants and insurance as well as general administrative expenses. A decision by our management to implement our business plan on a reduced scale and quality may occur at any juncture during the early stages of our business development, whether we have raised 35%, 50%, 75%, 100% of the proceeds that we are seeking to raise, In the opinion of the management, the consequences of implementing our business plan on a reduced quality and scale will be a reduction in our capacity to provide services and generate revenue, a critical decrease or deficiency in our working capital, and an increased likelihood that our business could fail. Moreover, even if our financing potential becomes exhausted before we are able to raise the funds that we are seeking to raise, there is no guarantee that we will be successful in implementing a scaled down version of our business, especially if we have not raised any of the $575,000 that we require in addition to the full capital raise of this prospectus hereunder. Other than the preparation of this prospectus, we have taken no steps to identify potential sources of financing and there is no guarantee that any financing will be available to us.
- 28 -
ANTICIPATED |
| IF 35% OF THE |
| IF 50% OF THE |
| IF 75% OF THE |
| IF 100% OF THE | ||||
ESTIMATED |
| REQUIRED |
| REQUIRED |
| REQUIRED |
| REQUIRED | ||||
EXPENSES |
| FINANCING IS |
| FINANCING IS |
| FINANCING IS |
| FINANCING IS | ||||
BUDGET $ |
| RAISED |
| RAISED |
| RAISED |
| RAISED | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing & Brand Activities |
| $ | 35,000 |
| $ | 50,000 |
| $ | 75,000 |
| $ | 100,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Wages & Consulting Fees |
|
| 52,500 |
|
| 75,000 |
|
| 112,500 |
|
| 150,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Facility Rental |
|
| 19,250 |
|
| 27,500 |
|
| 41,250 |
|
| 55,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Computers/Network |
|
| 5,250 |
|
| 7,500 |
|
| 11,250 |
|
| 15,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Web Design/Hosting |
|
| 3,500 |
|
| 5,000 |
|
| 7,500 |
|
| 10,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment/Vehicle |
|
| 36,750 |
|
| 52,500 |
|
| 78,750 |
|
| 105,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixtures |
|
| 8,750 |
|
| 12,500 |
|
| 18,750 |
|
| 25,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Working Capital G&A/Public Company Reporting Requirements |
|
| 40,250 |
|
| 57,500 |
|
| 86,250 |
|
| 115.000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL |
| $ | 201,250 |
| $ | 287,500 |
| $ | 431,250 |
| $ | 575,000 |
Many of the developments enumerated are dependent on us securing additional financing even if we are able to sell all of the securities offered by this Prospectus. There can be no assurance that we will be able to sell all of the securities offered by this Prospectus or secure additional financing. If we are able to raise some, but not all funds required to undertake the developments In this event, we will likely focus on spending available funds assuring that we retain our reporting status with the SEC and developing our business to attract investors. To date, we have taken no steps to identify potential sources of financing required to implement our business plan and we have not entered into any agreement or arrangement in relation to such financing.
If we are unable to raise additional funds we will not be able to complete any of our anticipated business development. Due to the fact that many of the milestones are dependent on each other, if we do not raise any additional capital we will not be able to implement any facets of our business plan.
We intend to pursue capital through public or private equity financing and by borrowing from any available sources if required in order to finance our business activities. Our sole Officer and Director has not made any written or verbal commitment to provide additional financing to our Company. We cannot guarantee that additional funding will be available on favorable terms, if at all. If adequate funds are not available, then our ability to continue our operations may be significantly hindered.
We have not yet begun the development of any of our anticipated services and even if we do secure adequate financing, there can be no assurance that our services will be accepted by the marketplace and that we will be able to generate revenues.
Our sole Officer and Director will be responsible for business plan development. If we develop our services and are in a position to begin sales and marketing we intend to hire independent consultants as we deem necessary.
- 29 -
Results of Operations
There is no historical financial information about us upon which to base an evaluation of our performance. We have incurred expenses of $ 2,938 on our operations from April 8, 2013 through July 31 , 2013 and our only other activity consisted of the sale of 9,000,000 shares of our common stock to our sole director and officer for aggregate proceeds of $9,000.
We have not generated any revenues from our operations.operations for the three months or the nine months ended January 31, 2018 or 2017. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including the financial risks associated with the limited capital resources currently available to us for the implementation of our business strategies. (See “Risk Factors”). To become profitable
During the three months ended January 31, 2018 and competitive,2017, we must develophad operating expenses of $(7,718,668) and $(28,851), respectively. The increase in operating expenses is primarily a result of the business planlicense fee of $6,600,000 resulting from our issuance of 60,000,000 shares of our Common Stock to Black Cactus Holdings, consulting fees of $937,691, investor relations fees of $78,917, professional fees of $52,525 and executehigher general and administrative fees of $49,075. These costs do not meet the plan. Our management will attemptcriteria for capitalization, and therefore have been treated as an operating expense.
During the nine months ended January 31, 2018 and 2017, we had operating expenses of $(10,880,629) and $(48,096), respectively. The increase in operating expenses is primarily a result of the cost of the license fee to secure financing through various means including borrowingBlack Cactus Holdings of $6,600,000, professional fees of $142,683, product and investment from institutionswebsite development costs of $2,349,123, general and private individuals.administrative expenses of $71,267 as well as consulting fees of $1,638,639. During the same period ended January 31, 2017, we incurred $48,096 in general and administrative expenses and had none of the other expenses referred to for the nine months ended January 31, 2018.
Since inception, the majority of our time has been spent refining itsour business plan and preparing for a primary financial offering.
Net Loss
Net Loss was $7,734,866 and $10,896,827 for the three and six-month periods ended January 31, 2018 compared to $28,851 and $48,096 for the same periods in 2017. This increase was primarily due to costs incurred in the acquiring the Black Cactus Holdings license, the costs of the BitReturn acquisition as well as increases in consulting fees and professional fees as a result of the Black Cactus Holdings and BitReturn transactions.
Year Ended April 30, 2017 compared to year ended April 30, 2016
|
| For the Years Ended April 30, |
| ||||
|
| 2017 |
| 2016 |
| ||
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
General and administrative |
| $ | 56,905 |
| $ | 10,443 |
|
Professional fees |
|
| 25,069 |
|
| 28,927 |
|
|
|
|
|
|
|
|
|
NET LOSS AND COMPREHENSIVE LOSS |
| $ | (81,974 | ) | $ | (39,370 | ) |
|
|
|
|
|
|
|
|
NET LOSS PER COMMON SHARE, BASIC AND DILUTED |
| $ | (0.00 | ) | $ | (0.00 | ) |
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED |
|
| 80,789,041 |
|
| 80,000,000 |
|
Results of Operations
We have incurred expenses of $81,974 and $39,370 in our operations for the years ended April 30, 2017 and 2016, respectively.
We did not generate any revenues from our operations for the years ended April 30, 2017 or 2016. We cannot guarantee we will be successful in our business operations. Our resultsbusiness is subject to risks inherent in the establishment of a new business enterprise, including the financial risks associated with the limited capital resources currently available to us for the implementation of our business strategies.
- 25 -
Management’s Plan of Operation
We do not have adequate funds to satisfy our working capital requirements for the next twelve months. We have borrowed a total of $800,000 from Bellridge to fund our planned plan of operations utilizing the software license agreement we have with Black Cactus Holdings. Pursuant to the terms of our agreements with Bellridge, we are summarized below:filing this registration statement with the SEC to register the shares of Common Stock to be issued under those agreements. We will not receive the third tranche of $200,000 until we receive our first set of comments from the SEC. The fourth and final tranche of $500,000 will be received once the registration statement is declared effective by the SEC. We cannot estimate when we will receive the SEC comments or when our registration statement will be declared effective by the SEC (so long as the comments are reasonable in the sole discretion of Bellridge). Under certain conditions, Bellridge may not have to purchase the third and fourth Notes. These conditions include any acts constituting default under any of the Notes or the agreements entered into at the time of the first purchase of the Note issued on November 27, 2017. Until such time as we receive the final $800,000 of funding from Bellridge, in the interim, we may not be able to completely implement and commence our proposed plan of operations.
|
| April 8, 2013 (Inception) |
| |
|
| To July 31 , 2013 |
| |
|
| (Unaudited) |
| |
Revenue |
|
| — |
|
Cost of Revenue |
|
| — |
|
Expenses |
| $ | 2,938 |
|
Net Loss - |
| $ | ( 2,938 | ) |
Net Loss per Share - Basic and Diluted |
|
| (0.00 | ) |
Weighted Average Number Shares Outstanding - Basic and Diluted |
|
| 9,000,000 |
|
Liquidity and Capital Resources
The following table summarizes total current assets, liabilities and working capital at April 30, 2017 compared to April 30, 2016.
|
| April 30, 2017 |
| April 30, 2016 |
| ||
Current Assets |
| $ | 3 |
| $ | 0 |
|
Current Liabilities |
| $ | 71,939 |
| $ | 74,103 |
|
Working Capital (Deficit) |
| $ | (71,936 | ) | $ | (74,103 | ) |
At April 30, 2017, we had working capital deficit of $71,936 as compared to working capital deficit of $74,103 at April 30, 2016, a decrease in working capital deficit of $2,167.
The following table summarizes total current assets, liabilities and working capital at January 31, 2018 (unaudited) compared to April 30, 2017.
|
| January 31, 2017 |
| April 30, 2017 |
| ||
Current Assets |
| $ | 399,748 |
| $ | 3 |
|
Current Liabilities |
| $ | 1,094,816 |
| $ | 71,939 |
|
Working Capital (Deficit) |
| $ | (695,068 | ) | $ | (71,936 | ) |
At January 31, 2018, we had a working capital deficit of ($695,068) as compared to working capital deficit of ($71,936) at April 30, 2017, an increase in working capital deficit of $623,132.
As of the date of this prospectus,January 31, 2018, we had yet to generatenot generated any revenues from our business operations. For the period ended July 31 , 2013, we issued 9,000,000 shares of common stock to our sole officer and director for cash proceeds of $9,000.
As of January 31, 2018, and 2017, we had cash and cash equivalents of $11,556 and $102, respectively. Our current cash on hand is $ 5,562 which will be usedwas not sufficient to meet our current obligations. However, our current cash is not sufficient to meetobligations and the new obligationsexpenses associated with being a company that is fully reporting with the SEC. Based onWe believe we will require additional financing in the form of share issuance proceeds, debt financing or advances from our disclosure above under “Use of Proceeds,” we anticipate that any level of capital raised above 35% will allow us minimal operations for an eighteen month period while meeting our state and SEC required compliance obligations. Nonetheless, even the sale of 100% of the securities in this offering will not provide sufficient capital to fully implement the business plan, but it will provide for vetting of the business plan to support pursuing investment capital.directors.
Our current cash on hand is $ 5,562 , which is allocated to cover the expenses associated with this offering. These funds are being paid by us and not from this offering. Accordingly, we anticipate that our current cash on hand is not sufficient to meet the new obligations associated with being a company that is fully reporting with the SEC. However, to the extent that we do not expend the entire cash on hand on this offering, the remaining cash will be allocated to cover these new reporting company obligations, and our “Use of Proceeds” would be adjusted accordingly. Nonetheless, based on our disclosure above under “Use of Proceeds,” which is based on utilizing the entire cash on hand for this offering, we anticipate that any level of capital raised above 35% will allow us minimal operations for a twelve month period while meeting our State and SEC required compliance obligations. Although, the sale of 100% of the securities in this offering will not provide sufficient capital to fully implement the business plan, it will provide for vetting of the business plan to support pursuing investment capital.
- 30 -
We anticipate needing the disclosed funding in order to effectively execute our business plan over the next eighteen months. Currently available cash is not sufficient to allow us to commence full execution of our business plan. Our business expansion will require significant capital resources that may be funded through the issuance of common stockCommon Stock or of notes payable or other debt arrangements that may affect our debt structure. Despite our current financial status, we believe that we may be able to issue notes payable or debt instruments in order to start executing our business plan. However, there can be no assurance that we will be able to raise money in this fashion and have not entered into any agreements that would obligate a third party to provide us with capital.
Through JulyDuring the nine months ended January 31, , 2013,2018 and 2017, we spent $ 2,938had operating expenses of $10,880,629 and $48,096, respectively. Historically, we have relied on loans to fund general and administrative operating expenses. We raised the cash amounts to be used in these activities from the saleAs of common stock to our sole officer and director. We currently have prepaid expenses $500 andJanuary 31, 2018, we had a working capital deficiency of $ 6,062 .
To date, the Company has managed to keep our monthly cash flow requirement low for two reasons. First, our sole officer does not draw a salary at this time. Second, the Company has been able to keep our operating expenses to a minimum by operating in space owned by our sole officer.$695,068.
As of the date of this registration statement, the current funds available toJanuary 31, 2018, the Company will not be sufficient to continue maintaining a reporting status. Management believes if the Company cannot maintain its reporting status with the SEC it will have to cease all efforts directed towards the Company. As such, any investment previously made would be lost in its entirety.
The Company currently hashad no external sources of liquidity such as arrangements with credit institutions or off-balance sheet arrangements that will have or are reasonably likely to have a current or future effect on our financial condition or immediate access to capital.
The Sole director and officer Subsequently, we entered into the Bellridge transaction which has made no commitments written or oral,provided us with respect to providing a sourcesome of liquidity in the form of cash advances, loans and/or financial guarantees.
If the Company is unable to raise the funds partially through this offering the Company will seek alternative financing through means such as borrowings from institutions or private individuals. There can be no assurance that the Company will be able to keep costs from being more than these estimated amounts or that the Company will be able to raise such funds. Even if we sell all shares offered through this registration statement, we expect that the Company will seek additional financing in the future. However, the Company may not be able to obtain additionalour capital or generate sufficient revenues to fund our operations. If we are unsuccessful at raising sufficient funds, for whatever reason, to fund our operations, the Company may be forced to seek a buyer for our business or another entity with which we could create a joint venture. If all of these alternatives fail, we expect that the Company will be required to seek protection from creditors under applicable bankruptcy laws.requirements.
- 26 -
Our independent auditor has expressed doubt about our ability to continue as a going concern and believes that our ability is dependent on our ability to implement our business plan, raise capital and generate revenues. See Note 2 of our financial statements.
Recent Federal legislation, including the Sarbanes-Oxley Act of 2002, has resulted in the adoption of various corporate governance measures designed to promote the integrity of the corporate management and the securities markets. Some of these measures have been adopted in response to legal requirements. Others have been adopted by companies in response to the requirements of national securities exchanges, such as the NYSE or The NASDAQ Stock Market, on which their securities are listed. Among the corporate governance measures that are required under the rules of national securities exchanges are those that address board of directors’ independence, audit committee oversight, and the adoption of a code of ethics. Our Board of Directors is comprised of one individual who is also our executive officer. Our executive officer makes decisions on all significant corporate matters such as the approval of terms of the compensation of our executive officer and the oversight of the accounting functions.
- 31 -
Although the Company has adopted a Code of Ethics and Business Conduct the Company has not yet adopted any of these other corporate governance measures and, since our securities are not yet listed on a national securities exchange, the Company is not required to do so. The Company has not adopted corporate governance measures such as an audit or other independent committees of our board of directors as we presently do not have any independent directors. If we expand our board membership in future periods to include additional independent directors, the Company may seek to establish an audit and other committees of our board of directors. It is possible that if our Board of Directors included independent directors and if we were to adopt some or all of these corporate governance measures, stockholders would benefit from somewhat greater assurances that internal corporate decisions were being made by disinterested directors and that policies had been implemented to define responsible conduct. For example, in the absence of audit, nominating and compensation committees comprised of at least a majority of independent directors, decisions concerning matters such as compensation packages to our senior officer and recommendations for director nominees may be made by a majority of directors who have an interest in the outcome of the matters being decided. Prospective investors should bear in mind our current lack of corporate governance measures in formulating their investment decisions.
Off-Balance Sheet Arrangements
We haveThe Company has no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect or change on our financial condition, changes in ourthe Company’s financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.investors. The term “off-balance sheet arrangement” generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with the Company is a party, under which the Company has (i) any obligation arising under a guarantee contract, derivative instrument or variable interest; or (ii) a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.
BUSINESS
InflationOverview
Black Cactus Global is a global technology development and consulting company working with Black Cactus Holdings to develop state-of-the-art Blockchain solutions and applications for Fintech, Healthcare, Media and Supply Chain using smart contracts and machine learning. The Company intends to be a global company with its main office located in Las Vegas, NV with offices opening in London, Chicago, Melbourne this year, and with a soon-to-be opened technology hub in India.
The effectCompany’s anticipated products and services to be licensed from Black Cactus Holdings include the first fully functional Fiat/Digital Global Financial Trading Platform, a cryptocurrency debit/credit card, know your customer (KYC) identity verification system, as well as versatile Video and Music Blockchain based platform that will allow artists and companies to distribute their works to over 100 online services.
Black Cactus Global believes that over time, Blockchain and Blockchain related technologies will completely transform the global economy.
The Company plans to develop creative, intelligent Blockchain solutions to support transactions of inflationvalue, with speed, efficiency and benefit for its clients and its users.
Corporate History
Black Cactus Global was incorporated in the State of Florida on April 8, 2013. The address of the head office is Suite 200, 8275 South Eastern Avenue, Las Vegas, Nevada 89123. When we were originally incorporated, our revenuesbusiness plan was to open adult day care centers in Sarasota, Florida. We were unable to raise the capital necessary for such a center and operating resultshad to abandon that proposed business operations and have revised our business plan accordingly.
On June 18, 2017, the Company entered into a Definitive Acquisition Agreement (the “BitReturn Agreement”) with Bitreturn.ca (“BitReturn”), an unrelated third party. Pursuant to the BitReturn Agreement, we were to acquire the BitReturn domain and brand in exchange for 10,000,000 shares of our Common Stock, in restricted form and the payment of total consideration of $350,000 once certain milestones were reached. As part of the BitReturn Agreement, the Company purchased computer equipment totaling $364,590 for use by BitReturn. The equipment was pledged as security for the loan incurred by the Company to pay for the equipment. Due to a failure of the Company to repay the loan in full by September 30, 2017, the lender took possession of the equipment. To date, the BitReturn transaction has not been significant.developed into the operations that the Company had anticipated, and the Company does not anticipate that it will receive any return on its investment in BitReturn.
Significant Accounting PoliciesOn October 17, 2017, the Company entered into an Exclusive Software License Agreement (License Agreement”) with Black Cactus Holdings, a Delaware limited liability company, an unrelated third party (“Black Cactus Holdings”). Pursuant to the terms of the License Agreement, the Company was granted an exclusive software license for the Black Cactus blockchain development software platform and related intellectual property (the “Software”). The Company and Black Cactus Holdings plan to use the platform to build a crypto trading exchange to support crypto and fiat currencies, music publishing, distribution, supply chain, medical research and trials. The term of the Agreement will remain in effect in perpetuity.
Our financial statements are affected- 27 -
As consideration for the use of the Software, in November 2017, the Company issued Black Cactus Holdings 60,000,000 shares of the Company’s Common Stock. In addition, the Company agreed to pay Black Cactus Holdings a royalty in the amount of five percent (5%) (the “Royalty”) of the net revenue received from the sublicense of the Software and any revenues generated from the use of the Software including other intellectual property that the Company licensed from Black Cactus Holdings pursuant to the terms of the Agreement (the “Sublicensed Materials”) for the term of the Agreement, less (i) applicable sales and use taxes (but in no event to include income or franchise taxes), (ii) any export duties, shipping, freight and handling charges paid by Licensee and reimbursed by customers, (iii) any trade and quantity discounts actually taken, and (iv) any credits for sales previously recorded but cancelled or refunded to a customer (“Net Revenues”). The Company agreed to pay Black Cactus Holdings the Royalty due on a quarterly basis for each fiscal quarter of the Company during the term of the Agreement commencing six months after the Company releases a “go live” version of the Software that utilizes the Sublicensed Material (the “Go Live Date”). The quarterly Royalty payment will be due on or before the sixtieth (60th) day after the last day of the fiscal quarter for which the Royalty payment is calculated.
In addition, the Company agreed to increase the size of its Board to five, with Black Cactus Holdings having the right to appoint two members to the Board and the Company changed its name to Black Cactus Global, Inc. Additionally, the Company agreed to appoint the manager of Black Cactus Holdings, Lawrence Cummins, as its President and CEO.
On December 4, 2017, the Company entered into a software sub-license agreement (the “Sub-Lease Agreement”) with Milestone Group PLC (“Milestone”), an unrelated third party. Under the terms of the Sub-Lease Agreement, the Company granted Milestone a sublicense to the Software. As consideration for the sublicense, Milestone will issue 29.5% of its issued capital to the Company and pay the Company a royalty fee of ten percent (10%) of the first 500,000 British Pounds in gross revenues received from the sublicense and thereafter, five percent (5%) of gross revenues generated by the accounting policies usedsublicense.
On December 20, 2017, the Company entered into a Share Purchase Agreement (the “WOW Agreement”) with World on Wireless (UK) Limited (“WOW”), an unrelated third party. Under the terms of the WOW Agreement, the Company will purchase all the issued ordinary shares of WOW from its shareholders, thereby acquiring all the intellectual property, research and development, contracts, accounts receivable and licenses owned by WOW. In exchange, the Company will issue 3,200,000 shares of its Common Stock to the WOW shareholders. The WOW Agreement has not closed and the estimatesacquisition will not be complete until the Company receives the source code and assumptions madesoftware to WOW’s intellectual property for all of WOW’s programs, platforms and products and these assets have been independently verified. Although the Company has issued these 3,200,000 shares, the shares have not been delivered and the transaction has not closed. Additionally, if the shares issued to the WOW shareholders do not have an aggregate value of US$2 million by management during their preparation. A complete listingJanuary 15, 2019, the WOW shareholders are entitled to have additional shares issued to them so that they hold shares equal to $2 million as of these policies is included in Note 3 of the notes to our financial statements for the three months ended July 31 , 2013. We have identified below the accounting policies that are of particular importancedate.
Business Strategy
Black Cactus Global in the presentationbusiness of our financial position, resultsdesigning, marketing and employing powerful Blockchain applications through its license with Black Cactus Holdings. The Company is planning a multi-phase rollout of operationsadvanced and cash flows, and which require the application of significant judgment by management.market ready Blockchain applications as they become available.
The Company is committed to offering the highest quality of applications and platforms that convey the value of Black Cactus Holdings’ products and services. Black Cactus Global is committed to bringing the most secure and finest user experience to its customers through its innovative Blockchain-technology designs.
The Company’s business strategy leverages its license agreement with Black Cactus Holdings unique and innovative design team which has electedpioneered, tested and perfected sophisticated Blockchain-based platforms for over six years. Our Company believes that it will eventually have the ability to use the extended transition period for complyingdesign and develop its own platforms, dedicated application software and advanced machine learning algorithms that provide customers products and solutions with new or revised financial accounting standards available under Section 102(b)(2)(B)innovative design, superior ease-of-use and seamless integration into existing and popular websites and ecommerce spaces.
We believe that many of the Act. Among other things, this means that the Company’s independent registered public accounting firm will notour current competitors may still be required to provide an attestation report on the effectiveness of the Company’s internal control over financial reporting so long as it qualifies as an emerging growth company, which may increase the risk that weaknesses or deficiencies in the internal control over financial reporting go undetected. Likewise, so long as it qualifies as an emerging growth company,development phase, with no viable product ready for the marketplace. We believe that Black Cactus Holding’s market ready products have been thoroughly tested and provide a high degree of complexity that will give the Company an enormous advantage over its competitors and greatly enhances our ability to attract and retain customers. We believe that Black Cactus Holding’s software and software platform are at the leading edge of a new technology that may elect not to provide certain information, including certain financial information and certain information regarding compensation of executive officers that would otherwise have been required to provide in filings withbe how the SEC, which may make it more difficult for investors and securities analysts to evaluate the Company. As a result, investor confidenceworld’s economy will operate in the Company and the market price of its common stock may be adversely affected
Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Research and Development Expenses: Expenditures for research and development will be expensed as incurred.
Earnings (Loss) Per Share: Basic loss per share is computed by dividing net loss attributable to common stockholders by the weighted average common shares outstanding for the period. Diluted loss per share is computed giving effect to all potentially dilutive common shares. Potentially dilutive common shares may consist of incremental shares issuable upon the exercise of stock options and warrants and the conversion of notes payable to common stock. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered antidilutive and thus are excluded from the calculation. At July 31 , 2013 the Company did not have any potentially dilutive common shares.future.
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CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSUREAs part of its strategy, the Company continues to expand its platform for the discovery and delivery of digital content and applications through the support of a community of engineers and students that will be the driving engine for new digital content, platforms and software products. The Company believes that ongoing investment in research and development is critical to the development of innovative Blockchain services and technologies. Our goal is to educate, innovate and invest in the new technological solutions for the future.
Messineo & Co, CPAs, LLC has audited our Financial Statements for the period from April 8, 2013 (date of inception) through April 30, 2013Services and to the extent set forth in its report, which are included herein in reliance upon the authority of said firm as experts in accounting and auditing. There were no disagreements related to accounting principles or practices, financial statement disclosure, internal controls or auditing scope or procedure during the two fiscal years and interim period.Products
CODE OF BUSINESS CONDUCT AND ETHICS
On April 8, 2013 we adoptedCurrently, the Company has licensed several live Blockchain applications that will serve both to generate future revenue as well as position the Company as a Code of Ethics and Business Conduct which is applicable to our employees and which also includes a Code of Ethics for our CEO and principal financial officer and persons performing similar functions. A code of ethics is a written standard designed to deter wrongdoing and to promoteleader in the Blockchain space.
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A copy of our Code of Business ConductFuture Products and Ethics has been filed with the Securities and Exchange Commission as an exhibit to this S-1 filing. Any person desiring a copy of the Code of Business Conduct and Ethics, can obtain one by going to Edgar and looking at the attachments to our this S-1 filing.
MANAGEMENT
Officer and Director
Our sole officer and director will serve until her successor is elected and qualified. Our officers are elected by the board of directors to a term of one (1) year and serve until their successor is duly elected and qualified, or until they are removed from office. The board of directors has no nominating, auditing or compensation committees.
The name, address, age and position of our president, secretary/treasurer, and director and vice president is set forth below:
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The person named above has held her offices/positions since the inception of our company and is expected to hold her offices/positions until the next annual meeting of our stockholders.
Business Experience
JOCELYN NICHOLAS, SOLE OFFICER AND DIRECTOR
Ms. Nicholas is our founder and has served as our sole officer and director since our inception. She has over 15 years experience in the Spa field as a Message Therapist, Esthetician, Hair Stylist, and Nail Specialist. From 2002-2004 she was a Nail Technician and Hair Stylist for Allure Salon, Sarasota, FL, 2005-Present she is a Owner/Operator of Tranquil Moments, Sarasota, FL. Ms. Nicholas launched and managed Tranquil Moments Day Spa providing massage therapy, esthetician services, hair styling, manicures, pedicures specializing with clients of all ages. Ms. Nicholas also provided mobile spa services to assisted living facilities for the elderly. She received her hair styling and cosmetology degree from Capri School of Hair Design, 1987, Nail Specialist diploma from Fashion Focus, 1999, Massage Therapist diploma from Sarasota School of Massage Therapy, 2006 and Esthetician diploma from Sarasota County Technical Institute, 2012.
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CONFLICTS OF INTEREST
As of July 31 , 2013, we have no employees. Ms. Nicholas, our founder, Sole officer and director, currently devotes 10 to 25 hours per week to our business as required from time to time without compensation. We have not entered into any formal agreement with Ms. Nicholas regarding the provision of her services to the Company.
Ms. Nicholas is not obligated to commit her full time and attention to our business and accordingly, she may encounter a conflict of interest in allocating her time between our operations and those of other businesses. Presently, Ms. Nicholas earns her livelihood as a owner of a Tranquil Moments Day Spa.
Although Ms. Nicholas is presently able to devote 10 to 25 hours per week to our business while maintaining her own livelihood, this may change. Also, if we require Ms. Nicholas to devote more than 10 to 25 hours per week to our business on a regular basis for an extended period, it is uncertain that she will be able to satisfy our requirements unless we have sufficient resources to compensate her for any lost income from her livelihood.
In general, officers and directors of a corporation are required to present business opportunities to the corporation if:Services
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| Consulting – At present, some officers of Black Cactus Global have been invited to advisory positions for a number of clients and business. Presently, we are expanding our capacity in this role to include government agencies and venture capital institutions. Black Cactus Global is a founding member of the |
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COMMITTEES OF THE BOARD OF DIRECTORS- 29 -
Our sole director has not established any committees, including an Audit Committee, a Compensation Committee or a Nominating Committee, or any committee performing a similar function. The functions of those committees are being undertaken by our sole director. Because we do not have any independent directors, our sole director believes that the establishment of committees of the Board would not provide any benefits to our company and could be considered more form than substance.
We do not have a policy regarding the consideration of any director candidates that may be recommended by our stockholders, including the minimum qualifications for director candidates, nor has our sole director established a process for identifying and evaluating director nominees. We have not adopted a policy regarding the handling of any potential recommendation of director candidates by our stockholders, including the procedures to be followed. Our sole director has not considered or adopted any of these policies as we have never received a recommendation from any stockholder for any candidate to serve on our Board of Directors.
Given our relative size and lack of directors and officers insurance coverage, we do not anticipate that any of our stockholders will make such a recommendation in the near future. While there have been no nominations of additional directors proposed, in the event such a proposal is made, all current members of our Board will participate in the consideration of director nominees.
Our sole director is not an “audit committee financial expert” within the meaning of Item 401(e) of Regulation S-K. In general, an “audit committee financial expert” is an individual member of the audit committee or Board of Directors who:
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Overview of the Industry
Blockchains may appear very complicated, but are quite simply, secure, permanent online digital ledgers that can record and preserve transactions by keeping the data safe by distributing the data in a non-centralized location. They are used to maintain a continuously growing list of records, called blocks, which over time are built into a series of time-stamped records, or a chain of blocks.
Blockchains are not held within one computer or data location but are stored across many computers or networks and the stored blocks cannot be retroactively altered. Thus, Blockchains are suitable for the recording of events, tracking physical items, preserving accounting or medical records, transaction processing and many other record management activities. Early in 2017, the Harvard Business Review suggested that Blockchain is truly a “foundational technology” and thus “has the potential to create new foundations for our economic and social systems.”
Recently, investment community has begun to realize the incredible value of far reaching power of Blockchain technology. Goldman Sachs has stated the technology “has the potential to redefine transactions” and can change “everything”. Banks and businesses are viewing Blockchains’ cost saving uses, and developers are seeing the Blockchain as a new backbone of the internet, an ‘Internet 3.0’.
The original terminology and the first application of Blockchain technology was developed for the digital currency, Bitcoin. Bitcoin, was not the first digital currency, but by employing the underlying Blockchain technology, Bitcoin gained rapid use as a safe and verifiable peer to peer electronic cash system and its meteoric rise has made it a mainstay of conversation for investors, media, and technologists alike.
In February 2011, the value of a Bitcoin reached parity with the U.S. dollar and by the end of 2017, Bitcoin has become the world’s top performing currency for 2nd straight year. At present, the Bitcoin price is approximately US$11,000 and is accepted by hundreds of thousands of business across the globe. Since Bitcoin supply is limited and cannot be created out of thin air, it appears that the price of Bitcoins will continue to rise.
The Blockchain technology behind Bitcoin has also given birth to over 1,200 other cryptocurrencies and assets that are available for online trading. And while the market for Bitcoin is worth over $265 billion itself, the rest of these cryptocurrencies are worth more in the aggregate.
All the top cryptocurrencies experienced incredible gains in 2016 and 2017, with the combined valuation of the top five crypto coins now over US $500 Billion which rivals some of America’s largest corporations. The Cryptocurrencies, Ethereum and Ripple, make up a large portion of the valuation of other popular digital currencies.
Ethereum, launched in 2015, is the largest coin by market capitalization aside from Bitcoin. However, it is also quite different. While Bitcoin is designed to be a payments protocol first, Ethereum enables developers to build and deploy decentralized applications, while also enabling smart contracts. The tokens used to power the network are called Ether, but they can also be traded online. At time of writing, Ethereum’s market capitalization is $99.8 billion.
Ripple (XRP) is the native currency of the Ripple Protocol – a broader catch-all for an open-source, global exchange. It is already being used by banks such as Santander, Bank of America, Merrill Lynch, UBS, and RBC. It solves a different problem than Bitcoin, allowing for settling payments between different currencies and even different payment systems. Today, Ripple’s native coin (XRP) has a market cap of $121.6 billion.
Whatever the currency, the aim of digital currencies is to provide a way to provide a way to exchange tokens or crypto-coins online without having to rely on centralized intermediaries, such as banks.
Advantages of using Crypto-currency
The generation and Blockchain methodology behind the digital currency provide a safeguard against counterfeit. Each coin or portion is tracked by a digital ledger. They provide a decentralized banking service that is open to all. Digital currencies can be exchanged worldwide for goods and services; there is no need for an application or potential rejection for users like credit cards, nor middle third-party fees, intermediary currency exchange rates and immediate settlement.
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Cryptocurrencies seem to have found the middle ground between gold and fiat as a medium of exchange. They combine the qualities of a unit that has a limited and visible supply with high trust but have the convenience of being digital, widely accepted and instantly mobile.
Acceptance of digital currencies worldwide would ensure open access to billions of individuals in the world with access to mobile phones and the internet, but who don’t have access to traditional banks, credit cards or exchange systems.
Competition
There are several Blockchain private companies including BitFury, Bitpay, Blockchain, Blockstack, Blockstream, Chain, Consenys, and Digital Asset.
Companies that participate in Blockchain technology in the public market include:
HIVE Blockchain is a Canadian publicly traded company. HIVE concentrates on mining of cryptocurrencies. BTL Group is another Canadian listed company which focuses on Interbit, its blockchain development platform, which is designed to build out applications. Currently, HIVE appears to be in mainly a testing phase of its platform having invited several companies for six-month trials tests prior to commercially launching its product.
Riot Blockchain is traded on NASDAQ. Riot presently mines Bitcoin as well making investments in Coinsquare – a Canadian digital currency exchange, Tesspay – a group planning to develop blockchain-based escrow services and Verady – a provider in cryptocurrency accounting and audit technology.
DigitalX is an Australian listed company. DigitalX offers Blockchain advisory and consulting services to approximately eight clients that are in development of various Blockchain Applications. MGT Capital is publicly traded in the US and has two security related products, a Privacy Phone and the Sentinel Program, which pro-actively defends against hacking. MGT Capital is also involved in the mining of Cryptocurrency.
Marketing
Our marketing strategy rests on the belief that our products and services represent a value-added and cost saving approach for its clientele and their customers.
The Company intends an aggressive strategic marketing campaign in 2018 that will attract clients to our current live Fintech and Media platforms as well as our many services.
The market for Blockchain technology is highly competitive, and we expect competition to increase in the future. We face competition from other providers of Blockchain technology, including competitors who utilize similar software and technology. Many of our competitors have longer operating histories, greater brand recognition and greater financial, marketing and other resources. We expect that competition will continue to increase as a result of the increase in transactions utilizing cryptocurrencies and increased acceptance of cryptocurrencies by consumers and business worldwide.
Employees
We do not have any employees. However, we have retained approximately 3 individuals as independent contractors that are involved in business development and administrative functions.
Reports to Security Holders
The public may read and copy any materials the Company files with the SEC in the SEC’s Public Reference Section, Room 1580, 100 F Street N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Section by calling the SEC at 1-800-SEC-0330. Additionally, the SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, which can be found at http://www.sec.gov.
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Properties
Our corporate headquarters is located at 8275 S. Eastern Avenue, Suite 200, Las Vegas, NV 89123. We currently require only limited office space for the administration of our business. This space is currently provided to us free of charge at the office of Mr. Sangha, an officer and director of the company. Management believes this facility is appropriate for our current needs and could be expanded at reasonable cost if our business required us to do so.
Private Placement and Acquisitions
In November 2017, the Company issued 60,000,000 shares of Common Stock pursuant to the terms the License Agreement with Black Cactus Holdings to acquire an exclusive software license for the Black Cactus blockchain development software platform and related intellectual property (the “Software”) and the Agreement includes a service contract with the CEO of Black Cactus Holdings to join the Company as a director and officer. The term of the Agreement will remain in effect in perpetuity. In addition, the Company agreed to pay Black Cactus Holdings a royalty in the amount of 5% of the net revenue received from the sublicense of the Software and any revenues generated from the use of the Software including other intellectual property that the Company licensed from Black Cactus Holdings pursuant to the terms of the Agreement.
For a more detailed description of the Company’s private placements consummated in November 2017 and April 2018, see “November Private Placement” and “April Private Placement”, respectively.
Legal Proceedings
There are no material proceedings to which any director or officer, or any associate of any such director or officer, is a party that is adverse to our Company or any of our subsidiaries or has a material interest adverse to our Company or any of our subsidiaries. No director or executive officer has been a director or executive officer of any business which has filed a bankruptcy petition or had a bankruptcy petition filed against it during the past ten years. No current director or executive officer has been convicted of a criminal offense or is the subject of a pending criminal proceeding during the past ten years. No current director or executive officer has been the subject of any order, judgment or decree of any court permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities during the past ten years. No current director or officer has been found by a court to have violated a federal or state securities or commodities law during the past ten years.
In addition, there are no material proceedings to which any affiliate of our Company, or any owner of record or beneficially of more than five percent of any class of voting securities of our Company, is a party that is adverse to our Company or any of our subsidiaries or has a material interest adverse to our Company or any of our subsidiaries. We are not currently involved in any litigation that we believe could have a materially adverse effect on our financial condition or results of operations.
From time to time we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Directors and Executive Officers
The following table contains information with respect to our directors and executive officers. To the best of our knowledge, none of our directors or executive officers have an arrangement or understanding with any other person pursuant to which he or she was selected as a director or officer. There are no family relationships between any of our directors or executive officers. Directors serve one-year terms. Our executive officers are appointed by and serve at the pleasure of the board of directors.
Name | Current Age | Position |
Harpreet Sangha | 53 | Chairman of the Board of Directors, Chief Financial Officer |
Lawrence Commins |
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Dr. Ravindranath Kancherla | 63 | Director |
Dr. Pruthvinath Kancherla |
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OurBusiness Experience
Harpreet Sangha
Mr. Sangha has been a founder, CEO and board member of several public companies and brings 31 years of entrepreneurial, operational and capital market experience to Black Cactus Global, Inc. In 1986, he started his career as Investment Advisor and gained his affinity for raising capital for numerous startups and early stage public companies. Mr. Sangha departed this position in March 2006 to apply his unique ability of bringing capital to early stage projects and founded Douglas Lake Minerals. In the role of CEO, his leadership in Douglas Lake overcame rigorous operational challenges in the African environment and brought the value of the company to $240 million. He has also served as CEO, Secretary, and director of Sharprock Resources Inc. (OTCBB: SHRK) where he raised capital to explore a preproduction gold project in the Chukotka Region of Russia. He joined Rango Energy, Inc. in 2012 as Chairman of the Board and Chief Executive Officer. Mr. Sangha has established many valuable contacts and relationships with institutional clients worldwide.
Lawrence P. Cummins
On December 8, 2017, Lawrence P. Cummins was appointed CEO of Black Cactus Global, Inc. fka Envoy Group Corp. (the “Company”). Mr. Cummins is also a member of the Board of Directors. On April 10, 2018, Mr. Cummins resigned as CEO but remains Chief Development Officer and a member of the Board of Directors. Mr. Cummins is the CEO of Black Cactus Global Pty. Ltd., an Australian corporation (Black Cactus – Australia”), and managing member of Black Cactus Global, LLC, a Delaware limited liability company (“Black Cactus US”) which recently entered into a software licensing agreement with the Company. Mr. Cummins has worked at Black Cactus – Australia for the past four years. Prior to that, he was managing director of Charteris, Mackie, Baillie and Cummins (USA) from 1999-2015. Mr. Cummins is still managing director of Charteris, Mackie in the United Kingdom. Charteris Mackie is a global consulting firm specializing in Blockchain and Blockchain business strategy. Mr. Cummins has a Bachelor of Arts in Economics from Northwestern University and a Bachelor of Arts in Mathematics from the University of Oxford, University College.
Dr. Ravindranath Kancherla
On December 11, 2017, Dr. Ravindranath Kancherla was appointed Director of the Company. Dr. Kancherla is a distinguished and internationally recognized Gastrointestinal Endosurgeon and a Fellow of both the Royal College of Surgeons of Edinburgh and Glasgow. Dr. Kancherla is the founder of Global Hospitals Group, India’s first multi-organ transplant center. Dr. Kancherla is currently its chairman and has served in that position since 2006. Dr. Kancherla became a Fellow of the Royal College of Surgeons of Edinburgh in 1985 as well as the Royal College of Surgeons, Glasgow in 1985. Dr. Kancherla received his Master of Science from Madras University in 1984 and was granted his Bachelor of Medicine / Bachelor of Surgery in 1980 from Sri Venkateswara Medical College, in Tirupati, AP, India.
Dr. Pruthvinath Kancherla
Dr. Pruthvinath Kancherla is the director of Global Hospitals Group, a multi super specialty tertiary care multi organ transplant facility having facilities in four major metro cities of India. Dr. Kancherla is a medical doctor who also has a Masters in Hospital Administration. Dr. Kancherla joined the Board of Global Hospitals as a full-time director in 2011 and has been closely involved in its growth. In 2015, Dr. Kancherla became a part-time director of Global Hospitals so that he might focus on fintech and cyber security areas. Dr. Kancherla has extensive investment experience at home and abroad. Dr. Kancherla’s hands on experience both in India and UK, more particularly in technology areas, is expected to bring immense value to the Company.
Dr. Ramesh Para
On February 1, 2018, Dr.Ramesh Para was appointed a member of the Board of Directors and on April 10, 2018, he was appointed CEO of the Company. Dr. Ramesh Para has been a Director of Sysveda UK Limited since December 2011. As part of his duties at Sysveda, Dr. Para is comprisedresponsible for the support of solelyan in-house back office system, incident investigation and for defining functionalities for one of Ms. Nicholas who was integral to our formationSysveda’s client. He coordinates the offshore development team of 350 employees during development, planning user acceptance testing and who is involvedsystem code review for the same client. Dr. Para has a track record of managing profitable companies of various sizes and looking after Information Technology for over 17 years and his expertise in our day to day operations. While we would prefer to have an audit committee financial expert on our board of directors, Ms. Nicholas does not have a professional background in finance or accounting. As with most small, early stage companies until such time our company further develops its business, achieves a stronger revenue baseIT management and has sufficient working capital to purchase directors and officers insurance,development will assist the Company does not havein its proposed operations. Dr. Para has a PhD in Management Information Systems, a Master’s in Business Administration and a Bachelor’s of Technology in Computer Science.
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Family Relationships
Dr. Ravindranath Kancherla and Dr. Pruthvinath Kancerla are father and son. There are no other family relationships between any immediate prospects to attract independent directors. When the Company is able to expand our Board of Directors to include one or more independent directors, the Company intends to establish an Audit Committee of our Board of Directors. It is our intention that onedirectors or more of these independent directors will also qualify as an audit committee financial expert. Our securities are not quoted on an exchange that has requirements that a majority of our Board members be independent and the Company is not currently otherwise subject to any law, rule or regulation requiring that all or any portion of our Board of Directors include “independent” directors, nor are we required to establish or maintain an Audit Committee or other committee of our Board of Directors.executive officers.
Wedo not have any independent directors and the Companyhas not voluntarily implemented various corporate governance measures,Involvement in the absence of which, stockholders may have more limited protections against interested director transactions, conflicts of interest and similar matters.Certain Legal Proceedings
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Title XXXVI, Chapter 607,There have been no events under any bankruptcy act, any criminal proceedings and any judgments, injunctions, orders or decrees material to the evaluation of the Florida Statutes (the “Florida Business Corporation Act”) permits, but does not require, corporations to indemnify aability and integrity of any director, executive officer, promoter or control person of the corporationCompany during the past five years.
The Board of Directors acts as the Audit Committee and the Board of Directors has no separate committees. The Company has no qualified financial expert at this time because it has not been able to hire a qualified candidate. The Company intends to continue to search for any liability asserted against hera qualified individual for hire.
Code of Ethics
We have adopted a Code of Ethics which covers the Chief Executive Officer and liabilityChief Financial Officer, which is administered and expenses incurredmonitored by her in his capacitythe Board of Directors as a director, officer, employee or agent, or arising out of her status as such, if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, and, unless the Articles of Incorporation provide otherwise, whether or not the corporation has provided for indemnification in its Articles of Incorporation. Our Articles of Incorporation have no separate provision for indemnification of directors, officers, or control persons.whole.
Regarding indemnification for liabilities arising under the Securities Act of 1933, which may be permitted to directors or officers under Florida law, we are informed that, in the opinion of the Securities and Exchange Commission, indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable.
EXECUTIVE COMPENSATION
We have made no provisions for paying cash or non-cash compensation to our sole officer and director. No salaries are being paid at the present time, no salaries or other compensation were paid in cash, or otherwise, for services performed prior to April 8, 2013 our date of inception, and no compensation will be paid unless and until our operations generate sufficient cash flows.Executive Officer Compensation
Summary Compensation Table
The table below summarizes all compensation awarded to, earned by, or paid to oureach named executive officer for our last two completed fiscal years for all services rendered in all capacities to us for the period from inception April 8, 2013 through July 31 , 2013.us.
Summary Compensation Table
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| Deferred |
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principal |
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| Bonus |
| Awards |
| Awards |
| Compensation |
| Compensation |
| Compensation |
| Total |
position |
| Year |
| ($) |
| ($) |
| ($) |
| ($) |
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| Earnings ($) |
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Jocelyn Nicholas CEO |
| 2013 |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
2018 SUMMARY COMPENSATION TABLE | ||||||||||||||||||
Name and principal position |
| Year |
| Salary ($) |
| Bonus ($) |
| Stock Awards ($) |
| Option Awards ($) |
| Non-Equity Incentive Plan Compensation ($) |
| Nonqualified Deferred Compensation Earnings ($) |
| All Other Compensation ($) |
| Total ($) |
Harpreet Sangha, |
| 2018 2017 |
| 0 0 |
| 0 0 |
| 0 0 |
| 0 0 |
| 0 0 |
| 0 0 |
| 0 0 |
| 0 0 |
CEO & CFO |
| 2016 |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
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Dr. Ramesh Para |
| 2018 |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
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Lawrence Cummins, |
| 2018 2017 |
| 0 0 |
| 0 0 |
| 0 0 |
| 0 0 |
| 0 0 |
| 0 0 |
| 0 0 |
| 0 0 |
Chief Development Officer |
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We have not paid any salaries to our sole director and officer as of the date of this Prospectus. We do not anticipate beginning to pay salaries until we have adequate funds toemployment agreements with any of our executive officers. We also do so. There are no othernot have pension, health, annuity, insurance, stock option plans, retirement, pension, oroptions, profit sharing, or similar benefit plans. However, we may adopt plans forin the benefit of our officer and director other than as described herein.future.
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Outstanding Equity Awards at the End of the Fiscal Year-End
The table below summarizes all unexercised options, stock that has not vested, and equity incentive plan awards for each named executive officer as of July 31 , 2013.
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There were no grants of stock options since inception to the date of this Prospectus.Year
We do not have any long-term incentiveequity compensation plans that provide compensation intended to serveand therefore no equity awards are outstanding as incentive for performance.of December 31, 2017 and none have been issued during 2018.
Our sole director has not adopted a stock option plan. We have no plans to adopt a stock option plan, but may choose to do so in the future. If such a plan is adopted, this may be administered by the board or a committee appointed by the board (the “Committee”). The committee would have the power to modify, extend or renew outstanding options and to authorize the grant of new options in substitution therefore, provided that any such action may not impair any rights under any option previously granted. We may develop an incentive based stock option plan for our officer and director and may reserve up to 10% of our outstanding shares of common stock for that purpose.Director Compensation
Options Grants duringNone of the Last Fiscal Year / Stock Option Plansmembers of the Board of Directors of the Company were compensated for services in such capacity.
We do not currently have a stock option plan in favor of any director, officer, consultant or employee of our company. No individual grants of stock options, whether or not in tandem with stock appreciation rights known as SARs or freestanding SARs have been made to our Sole director- 34 -
Bonuses and officer since our inception; accordingly, no stock options have been granted or exercised by our sole director and officer since we were founded.
Aggregated Options Exercises in Last Fiscal Year
No individual grants of stock options, whether or not in tandem with stock appreciation rights known as SARs or freestanding SARs have been made to our sole director and officer since our inception; accordingly, no stock options have been granted or exercised by our sole director and officer since we were founded.
Long-Term Incentive Plans and AwardsDeferred Compensation
We do not have any long-term incentive plans that providebonus, deferred compensation intendedor retirement plan. All decisions regarding compensation are determined by our Board of Directors.
Options and Stock Appreciation Rights
We have no outstanding options or stock appreciate rights.
Payment of Post-Termination Compensation
We do not have change-in-control agreements with our director or executive officer, and we are not obligated to serve as incentive for performance. No individual grantspay severance or agreements regarding future payouts under non-stock price-based plans have been madeother enhanced benefits to our sole director andexecutive officer or any employee or consultant since our inception; accordingly, no future payouts under non-stock price-based plans or agreements have been granted or entered into or exercised by our Sole director and officer or employees or consultants since we were founded.upon termination of his employment.
CompensationEmployment Agreements
Currently, the Company has no employment agreements.
Board of Directors
Our sole director isdirectors hold office until the next annual meeting of shareholders and until their successors have been duly elected and qualified. Our officers are elected by and serves at the discretion of the Board of Directors.
Indemnification of Directors and Executive Officers and Limitation of Liability
Florida law generally permits us to indemnify our directors, officers, employees and agents. We, as a corporation organized in Florida, may indemnify our directors, officers, employees and agents in accordance with Florida Law. Our Certificate of Incorporation, as amended, does not compensated by uscontain any specific language enhancing or limiting the general Florida statutory provisions.
Insofar as indemnification for acting as such. He is reimbursed for reasonable out-of-pocket expenses incurred. There are no arrangementsliabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to which our Sole director isthe foregoing provisions, or will be compensatedotherwise, we have been advised that in the future for any services provided as a director.opinion of the Securities and Exchange Commission such indemnification is against public policy and is, therefore, unenforceable.
DIRECTOR COMPENSATION
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WeOur directors do not havereceive any agreements for compensating our directorscompensation for their services in their capacity as directors although such directors are expected inof the future to receive stock options to purchase shares of our common stock as awarded by our board of directors.Company.
Employment Contracts, Termination of Employment, Change-In-Control Arrangements
There are no employment contracts or other contracts or arrangements with our officer or director other than those disclosed in this report. There are no compensation plans or arrangements, including payments to be made by us, with respect to Ms. Nicholas that would result from her resignation, retirement or any other termination. There are no arrangements for directors, officers or employees that would result from a change-in-control.
Indebtedness of Directors, Senior Officers, Executive Officers and Other Management
Neither our sole director and officer nor any associate or affiliate of our company during the last two fiscal years is or has been indebted to our company by way of guarantee, support agreement, letter of credit or other similar agreement or understanding currently outstanding.
Director Compensation
The table below summarizes all compensation awarded to, earned by, or paid to our sole director for all services rendered in all capacities to us for the period from inception April 8, 2013 through July 31 , 2013.
Director Compensation
Name | Fees | Stock | Option | Non-Equity | Change in | All Other | Total |
Jocelyn Nicholas | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
At this time, we have not entered into any employment agreements with our sole officer and director. If there is sufficient cash flow available from our future operations, we may enter into employment agreements with our sole officer and director or future key staff members.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
As of April 20, 2018, our authorized capitalization was 490,000,000 shares of Common Stock $0.0001 par value per share and 10,000,000 shares of preferred stock, par value $0.0001. 10,000 shares of our preferred stock are designated as Series A Preferred Stock. As of the same date, there were 166,043,296 shares of our Common Stock outstanding, all of which were fully paid, non-assessable and entitled to vote. Each share of our Common Stock entitles its holder to one vote on each matter submitted to the stockholders. There are no shares of Series A Preferred Stock issued and outstanding and no shares of preferred stock issued and outstanding.
The following table sets forth, as of April 20, 2018, the date of this prospectus, the total number of shares of our Common Stock owned by (i) each person who is known by us to own of record or beneficially by our Sole officer and director, and key employees, individually and as a group, and the present owners of 5%five percent (5%) or more of our total outstanding shares. The table also reflects what her ownership will be assuming completionshares, (ii) each of our directors, (iii) each of our executive officers and (iv) all of our directors and executive officers as a group. Unless otherwise indicated, each of the sale of all shares in this offering. The stockholderpersons listed below has direct ownership of her shares and possesses sole voting and dispositiveinvestment power with respect to the shares.shares of our Common Stock beneficially owned.
Title of Class |
| Name and Address of Beneficial Owner |
| Amount and Nature of Beneficial Ownership |
| Percent of Class |
|
Common Stock |
| Jocelyn Nicholas |
| 9,000,000 |
| 100 | % |
|
| 3811 Alden Way. |
|
|
|
|
|
|
| Sarasota, FL 34232 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| All Officers and Directors as a Group |
| 9,000,000 |
| 100 | % |
|
| (1 person) |
|
|
|
|
|
- 3735 -
NAME OF OWNER |
| NUMBER OF COMMON SHARES |
| PERCENTAGE OF |
| ||
|
|
|
|
|
| ||
Harpreet Sangha |
|
| 23,200,000 |
|
| 13.97 | % |
|
|
|
|
|
|
|
|
Lawrence Cummins |
|
| 60,000,000 |
|
| 36.13 | % |
|
|
|
|
|
|
|
|
Dr. Kancherla Ravindranath |
|
| — |
|
| — |
|
|
|
|
|
|
|
|
|
Andres Nil-Thore Forsberg |
|
| — |
|
| — |
|
|
|
|
|
|
|
|
|
Dr. Pruthvinath Kancherla |
|
| — |
|
| — |
|
|
|
|
|
|
|
|
|
Dr. Ramesh Para |
|
| — |
|
| — |
|
|
|
|
|
|
|
|
|
CEDE & Co. |
|
| 29,986,500 |
|
| 18.06 |
|
|
|
|
|
|
|
|
|
All Directors and Officers as a Group |
|
| 83,200,000 |
|
| 50.10 | % |
All 5% Shareholders as a Group |
|
| 113,186,500 |
|
| 69.17 | % |
All Directors, Officers and 5% Shareholders as a Group |
|
| 113,186,500 |
|
| 69.17 | % |
The following table sets forth the beneficial ownership table after the anticipated 100% completion of the offering.__________
(1) | Based on 166,043,296 shares of Common Stock outstanding as of April 20, 2018. | |
(2) | Beneficial ownership is determined in accordance with Rule 13d-3(a) of the Exchange Act and generally includes voting or investment power with respect to securities. | |
(3) | The percentages in the table have been calculated on the basis of treating as outstanding for a particular person, all shares of our Common Stock outstanding on that date and all shares of our Common Stock issuable to that holder in the event of exercise of outstanding options, warrants, rights or conversion privileges owned by that person at that date which are exercisable within 60 days of that date. Except as otherwise indicated, the persons listed below have sole voting and investment power with respect to all shares of our Common Stock owned by them, except to the extent that power may be shared with a spouse. |
After completion of the offering
Title of Class |
| Name and Address of Shareholders |
| Amount and Nature of Shareholders Ownership |
| Percent of Class |
|
Common Stock |
| Jocelyn Nicholas |
| 9,000,000 |
| 75 | % |
|
| 3811 Alden Way |
|
|
|
|
|
|
| Sarasota, FL 34232 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| All other Shareholders |
| 3,000,000 |
| 25 | % |
ChangeChanges in Control
We are not aware of any arrangementarrangements that mightmay result in a changechanges in controlcontrol” as that term is defined by the provisions of our company in the future.Item 403(c) of Regulation S-K.
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, AND DIRECTOR INDEPENDENCE
As of April 20, 2018, the Company was indebted to Harpreet Sangha, an officer and director, in the amount of $321,217 for advances of working capital and expenses paid on behalf of the Company. The amount is unsecured, non-interest bearing and due on demand.
On April 8 , 2013 we issued 9,000,000 sharesJune 22, 2017, the Company entered into a secured loan with a corporation with a significant shareholder for a loan up to CAD$450,000 for the purpose of our common stockpurchasing digital currency mining hardware. The loan was non-interest bearing and due on August 31, 2017. The hardware purchased with the loaned funds was as collateral until the loan amount was repaid. If the loan was not repaid when due, the lender was entitled to ourtake sole directorpossession of the hardware, in lieu of the loan. At September 30, 2017, the Company had not made the required payment of the loan and officer at $0.001 per share for aggregate proceedsthe lender took sole possession of $9,000.
There have been no other transactions since our inception April 8, 2013, or any currently proposed transactions in which we are, or plan to be, a participant and in which any related person had or will have a direct or indirect material interest.the hardware.
Director Independence
We intendhave four independent directors. Because our Common Stock is not currently listed on a national securities exchange, we have used the definition of “independence” of The NASDAQ Stock Market to quotemake this determination. NASDAQ Listing Rule 5605(a)(2) provides that an “independent director” is a person other than an officer or employee of the company or any other individual having a relationship, which in the opinion of the Company’s Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The NASDAQ listing rules provide that a director cannot be considered independent if:
● | the director is, or at any time during the past three years was, an employee of the company; | |
● | the director or a family member of the director accepted any compensation from the company in excess of $120,000 during any period of 12 consecutive months within the three years preceding the independence determination (subject to certain exclusions, including, among other things, compensation for board or board committee service); | |
● | a family member of the director is, or at any time during the past three years was, an executive officer of the company; | |
● | the director or a family member of the director is a partner in, controlling stockholder of, or an executive officer of an entity to which the company made, or from which the company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exclusions); | |
● | the director or a family member of the director is employed as an executive officer of an entity where, at any time during the past three years, any of the executive officers of the company served on the compensation committee of such other entity; or | |
● | the director or a family member of the director is a current partner of the company’s outside auditor, or at any time during the past three years was a partner or employee of the company’s outside auditor, and who worked on the company’s audit. |
Dr. Kancherla Ravindranath, Dr. Pruthvinath Kancherla and Dr. Ramesh Para are considered independent. Messrs. Sangha and Cummins are not considered independent because they are officers and directors of the Company.
We do not currently have a separately designated audit, nominating or compensation committee.
DESCRIPTION OF SECURITIES
General
The Company’s Articles of Incorporation, as amended, authorize the Company to issue 490,000,000 shares of its Common Stock, par value $0.0001 and 10,000,000 shares of preferred stock, par value $0.0001. The Company has designated 10,000 shares of its preferred stock as Series A Preferred Stock.
Common Stock
The Company is authorized by its Certificate of Incorporation to issue an aggregate of 490,000,000 shares of Common Stock, $0.0001 par value per share (the “Common Stock”). As of April 20, 2018, 166,043,296 shares of Common Stock were issued and outstanding.
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The holders of our Common Stock (i) have equal ratable rights to dividends from funds legally available therefore, when, as and if declared by our Board of Directors; (ii) are entitled to share ratably in all of our assets available for distribution to holders of Common Stock upon liquidation, dissolution or winding up of our affairs; (iii) do not have pre-emptive, subscription or conversion rights and there are no redemption or sinking fund provisions or rights; and (iv) are entitled to one non-cumulative vote per share on all matters on which shareholders may vote.
The shares of our Common Stock are not subject to any future call or assessment and all have equal voting rights. There are no special rights or restrictions of any nature attached to any of the shares of our Common Stock and they all rank at equal rate or “pari passu”, each with the other, as to all benefits, which might accrue to the holders of the shares of our Common Stock. All registered shareholders are entitled to receive a notice of any general annual meeting to be convened.
At any general meeting, subject to the restrictions on joint registered owners of shares of our Common Stock, on a showing of hands every shareholder who is present in person and entitled to vote has one vote, and on a poll every shareholder has one vote for each share of our Common Stock of which he is the registered owner and may exercise such vote either in person or by proxy. Holders of shares of our Common Stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in such event, the holders of the remaining shares will not be able to elect any of our directors.
Preferred Stock
The Company is authorized to issue an aggregate of 10,000,000 shares of preferred stock, par value $0.0001. The Company has designated 10,000 shares of preferred stock as Series A Preferred Stock. There are no shares of Series A Preferred Stock currently issued and outstanding. There are no other classes of preferred stock designated and no shares of preferred stock are issued and outstanding.
The Preferred Stock authorized by our Articles of Incorporation may be issued in one or more series. The Board of Directors of the Corporation is authorized to determine or alter the rights, preferences, privileges and restrictions granted or imposed upon any wholly unissued series of Preferred Stock, and within the limitations or restrictions stated in any resolution or resolutions of the Board of Directors originally fixing the number of shares constituting any series, to increase or decrease (but not below the number of shares of any such series then outstanding) the number of shares of any such series subsequent to the issue of shares of that series, to determine the designation and par value of any series and to fix the numbers of shares of any series.
Series A Preferred Stock
The 10,000 authorized but unissued Series A Preferred Stock, if issued, have an aggregate voting power of 45% of the combined voting power of the entire Company’s shares, Common Stock and preferred stock, as long as the Company is in existence. Each holder of the Series A Preferred Stock would have full voting rights and powers equal to the voting rights and powers of the holders of Common Stock, and would be entitled to notice of any stockholders’ meeting in accordance with the by-laws of the Company, and be entitled to vote, together with holders of Common Stock, with respect to any question upon which holders of Common Stock have the right to vote. Without the vote or consent of holders of at least a majority of the shares of Series A Preferred Stock then outstanding, the Company may not (i) authorize, create or issue, or increase the authorized number of shares of, any class or series of capital stock ranking prior to or on a parity with the Series A Preferred Stock, (ii) authorize, create or issue any class or series of Common Stock of the Company other than the Common Stock, (iii) authorize any reclassification of the Series A Preferred Stock, (iv) authorize, create or issue any securities convertible into or exercisable for capital stock prohibited by (i) or (ii), (v) amend this Certificate of Designations or (vi) enter into any merger or reorganization, or disposal of assets involving 20% of the total capitalization of the Company.
Subject to the rights of the holders of any other series of preferred stock ranking senior to or on a parity with the Series A Preferred Stock with respect to liquidation and any other class or series of capital stock of the Company ranking senior to or on a parity with the Series A Preferred Stock with respect to liquidation, in the event of any liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or involuntary, the holders of record of the issued and outstanding shares of Series A Preferred Stock shall be entitled to receive, out of the assets of the Company available for distribution to the holders of shares of Series A Preferred Stock, prior and in preference to any distribution of any of the assets of the Company to the holders of Common Stock and any other series of preferred stock ranking junior to the Series A Preferred Stock with respect to liquidation. The holders of the Series A Preferred Stock are not be entitled to receive dividends per share of Series A Preferred Stock and the Company has no right to redeem the Series A Preferred Stock.
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Dividend Policy
We have not declared dividends since our inception. Holders of Common Stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of funds legally available. We presently anticipate that all earnings, if any, will be retained for development of our business. Any future disposition of dividends will be at the discretion of our Board of Directors and will depend upon, among other things, our future earnings, operating and financial condition, capital requirements, and other factors.
Transfer Agent and Registrar
The transfer agent and registrar for our Common Stock is VStock Transfer, LLC, with an address at 18 Lafayette Pl, Woodmere, NY 11598. Their phone number is (212) 828-8436.
Warrants
For a more detailed description of the November Warrant and the FA Warrant, see “November Private Placement” above. For a more detailed description of the April Warrants, see “April Private Placement” above.
Notes
For a more detailed description of the Notes, see “November Private Placement” above.
Other Convertible Securities
As of the date hereof, other than the securities described above, we do not have any other outstanding convertible securities.
PLAN OF DISTRIBUTION
The Selling Security Holders of the securities and any of its pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities covered hereby on any trading market, stock exchange or other trading facility on which the securities are traded or in private transactions. These sales may be at fixed or negotiated prices. The Selling Security Holders may use any one or more of the following methods when selling securities:
● | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; | |
● | block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction; | |
● | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; | |
● | an exchange distribution in accordance with the rules of the applicable exchange; | |
● | privately negotiated transactions; | |
● | settlement of short sales; | |
● | in transactions through broker-dealers that agree with the Selling Security Holders to sell a specified number of such securities at a stipulated price per security; | |
● | through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; | |
● | a combination of any such methods of sale; or | |
● | any other method permitted pursuant to applicable law. |
The Selling Security Holders may also sell securities under Rule 144 under the Securities Act, if available, rather than under this prospectus.
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Broker-dealers engaged by the Selling Security Holders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Security Holders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with FINRA IM-2440.
In connection with the sale of the securities covered hereby, the Selling Security Holders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they assume. The Selling Security Holders may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities to broker-dealers that in turn may sell these securities. The Selling Security Holders may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The Selling Security Holders and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the OTC Bulletin Board whichresale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Each Selling Security Holder has informed us that it does not have any director independence requirements. Once we engage further directors and officers, we planwritten or oral agreement or understanding, directly or indirectly, with any person to develop a definition of independence and scrutinize our Board of Directors with regard to this definition.
Legal Proceedingsdistribute the securities.
We knoware required to pay certain fees and expenses incurred by us incident to the registration of the securities. We have agreed to indemnify the Selling Security Holders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.
Because the Selling Security Holders may be deemed to be an “underwriter” within the meaning of the Securities Act, it will be subject to the prospectus delivery requirements of the Securities Act, including Rule 172 thereunder. In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this prospectus. Each Selling Security Holder has advised us that there is no material, activeunderwriter or pending legal proceedings against us, nor are we involved as a plaintiffcoordinating broker acting in any material proceedings or pending litigation. There are no proceedings in which anyconnection with the proposed sale of our directors, officers or affiliates, or any registered beneficial shareholder are an adverse party or has a material interest adverse to us.the resale securities by the Selling Security Holder.
We intendagreed to furnish annual reportskeep this prospectus effective until the earlier of (i) the date on which the securities may be resold by the Selling Security Holders without registration and without regard to stockholders, whichany volume or manner-of-sale limitations by reason of Rule 144, without the requirement for us to be in compliance with the current public information requirement under Rule 144 under the Securities Act or any other rule of similar effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale securities will include audited financial statements reported on by our Certified Public Accountants.be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, wein certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market making activities with respect to the Common Stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the Selling Security Holders will issue unaudited quarterlybe subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the Common Stock by the Selling Security Holders or any other interim reportsperson. We will make copies of this prospectus available to stockholders, asthe Selling Security Holders and have informed the Selling Security Holders of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).
SHARES ELIGIBLE FOR FUTURE SALE
The sale of a substantial number of shares of our Common Stock, or the perception that such sales could occur, could adversely affect prevailing market prices for our Common Stock. In addition, any such sale or perception could make it more difficult for us to sell equity, or equity related, securities in the future at a time and price that we deem appropriate or required by applicable securities regulations.
REPORTS TO SECURITY HOLDERS
As a result ofappropriate. If and when this offering,Registration Statement becomes effective and we will become subject to the reporting requirements of the Exchange Act, we might elect to adopt a stock option plan and file a Registration Statement under the Securities Act registering the shares of Common Stock reserved for issuance there under. Following the effectiveness of any such Registration Statement, the shares of Common Stock issued under such plan, other than shares held by affiliates, if any, would be immediately eligible for resale in the public market without restriction.
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The sale of shares of our Common Stock which are not registered under the Securities Act, known as “restricted” shares, typically are effected under Rule 144. As of the date of this prospectus we have outstanding an aggregate of 166,043,296 shares of Common Stock of which approximately 133,250,000 shares are restricted Common Stock. All our shares of Common Stock might be sold under Rule 144 after having been held for six months. No prediction can be made as to the effect, if any, that future sales of “restricted” shares of our Common Stock, or the availability of such shares for future sale, will have on the market price of our Common Stock or our ability to raise capital through an offering of our equity securities.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
We do not have any equity compensation plans.
DISCLOSURE OF COMMISSION POSITION
ON INDEMNIFICATION OF SECURITIES ACT LIABILITIES
Our directors and officers are indemnified as provided by the Florida Business Corporation Act and our Bylaws. We have agreed to indemnify each of our directors and certain officers against certain liabilities, including liabilities under the Securities Act. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the provisions described above, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than our payment of expenses incurred or paid by our director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
LEGAL MATTERS
Poole & Shaffery, LLP will render a legal opinion as to the validity of the securities to be registered hereby.
EXPERTS
No expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the Common Stock was employed on a contingency basis, or had, or is to receive, in connection with the offering, a substantial interest, direct or indirect, in the registrant or any of its parents or subsidiaries. Nor was any such person connected with the registrant or any of its parents or subsidiaries as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.
The financial statements of the Company included in this prospectus and in the registration statement have been audited by Manning Elliott LLP, to the extent and for the period set forth in their report appearing elsewhere herein and in the registration statement and are included in reliance upon such report given upon the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the Securities Act, with respect to the shares of Common Stock being offered by this prospectus. This prospectus does not contain all of the information in the registration statement and its exhibits. For further information with respect to us and the Common Stock offered by this prospectus, we refer you to the registration statement and its exhibits. Statements contained in this prospectus as to the contents of any contract or any other document referred to are not necessarily complete, and in each instance, we refer you to the copy of the contract or other document filed as an exhibit to the registration statement. Each of these statements is qualified in all respects by this reference. You may read and copy any document that we file at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549, on official business days during the hours of 10:00 am and 3:00 pm. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room. All filings we make with the SEC are also available on the SEC’s web site at http://www.sec.gov. You may also request a copy of these filings, at no cost, by writing us at Black Cactus Global, Inc., 8275 S. Eastern Avenue, Suite 200, Las Vegas, NV 89123.
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We are subject to the periodic reporting requirements of the Exchange Act, and in accordance with this law,we will file periodic reports, proxy statements and other information with the SEC. These periodic reports, proxy statements and other information will beare available for inspection and copying at the SEC’s Public Reference Room at 100 F Street, NE, Washington DC 20549. If we fail to meet the Exchange Act’s reporting requirements we will lose our status as a reporting Issuer with the SEC. The public may obtain information on the operationreference room and website of the Public Reference Room by calling the SEC at 1-800-SEC-0330.referred to above. You can receive copies of these documents upon payment of a duplicating fee by writing to the SEC. The public may also read any materials filed by us with the SEC through the SEC’s website at www.sec.gov. In addition to documents related to the registration statement of which this prospectus forms a part, you may access our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act with the SEC free of charge at www.sec.gov.our website as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. We have not incorporated by reference into this prospectus the information contained in, or that can be accessed through, our website, and you should not consider it to be a part of this prospectus.
INCORPORATION BY REFERENCE
We incorporate by reference in this prospectus any future filings we make with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act (excluding any information furnished and not filed with the SEC) after the date on which the registration statement that includes this prospectus was initially filed with the SEC (including all such documents we may file with the SEC after the date of the initial registration statement and prior to the effectiveness of the registration statement) and until all offerings under this prospectus are terminated.
Any statement contained in a document incorporated by reference herein shall be deemed to be modified or superseded for all purposes to the extent that a statement contained in this prospectus or in any other subsequently filed document which is also incorporated or deemed to be incorporated by reference, modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus. You may request a copy of these filings (other than an exhibit to a filing unless that exhibit is specifically incorporated by reference into that filing) at no cost by writing, telephoning or e-mailing us at the following address, telephone number or e-mail address:
8275 S. Eastern Avenue, Suite 200
Las Vegas, Nevada, 89123
(702) 724-2643
info@blackcactusglobal.com
- 3842 -
WHERE YOU CAN FIND MORE INFORMATIONINDEX TO THE FINANCIAL STATEMENTS
We
BLACK CACTUS GLOBAL, INC.
For the Nine Months Ended January 31, 2018 and 2017
(Unaudited)
F–2 | |
F–3 | |
Statements of Cash Flows for the nine months ended January 31, 2018 and 2017 | F–4 |
F–5 |
ENVOY GROUP CORP.
For the Years Ended April 30, 2017 and 2016
ENVOY GROUP CORP.
For the Year Ended April 30, 2016 and 2015
BLACK CACTUS GLOBAL, INC.
(Formerly Envoy Group Corp.)
BALANCE SHEETS
(Expressed in U.S. Dollars)
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| January 31, |
| April 30, |
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| 2018 |
| 2017 |
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| (Audited) |
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ASSETS |
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CURRENT ASSETS |
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Cash and cash equivalents |
| $ | 11,556 |
| $ | 3 |
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Prepaid expenses and other assets (Note 6) |
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| 388,192 |
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| — |
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TOTAL ASSETS |
| $ | 399,748 |
| $ | 3 |
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LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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CURRENT LIABILITIES |
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Accounts payable and accrued liabilities |
| $ | 79,184 |
| $ | 37,151 |
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Advances payable (Note 8) |
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| 295,000 |
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| — |
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Amount payable for BitReturn (Note 12) |
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| 350,000 |
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| — |
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Convertible debentures (Note 10) |
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| 12,161 |
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| — |
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Due to related parties (Note 7) |
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| 321,217 |
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| 1,872 |
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Loans payable (Note 9) |
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| 37,254 |
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| 32,916 |
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Total Current Liabilities |
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| 1,094,816 |
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| 71,939 |
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Loans payable (Note 9) |
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| — |
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| 33,782 |
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Total Liabilities |
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| 1,094,816 |
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| 105,721 |
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STOCKHOLDERS’ DEFICIT |
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Preferred stock, $0.0001 par value; 10,000,000 shares authorized, of which 10,000 shares designated as Series A, no shares issued and outstanding (Note 14) |
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| — |
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| — |
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Common stock, $0.0001 par value; 490,000,000 shares authorized; 161,250,000 and 83,000,000 shares issued and 158,050,000 and 83,000,000 shares outstanding as of January 31, 2018 and April 30, 2017, respectively (Note 14) |
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| 15,805 |
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| 8,300 |
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Shares issuable |
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| 760,832 |
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| 14,000 |
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Additional paid-in capital |
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| 9,627,699 |
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| 74,559 |
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Accumulated deficit |
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| (11,099,404 | ) |
| (202,577 | ) |
Total Stockholders’ Deficit |
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| (695,068 | ) |
| (105,718 | ) |
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TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT |
| $ | 399,748 |
| $ | 3 |
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Going Concern (Note 2)
Commitment (Note 13)
Subsequent Events (Note 15)
The accompanying notes are an integral part of these unaudited financial statements.
BLACK CACTUS GLOBAL, INC.
(Formerly Envoy Group Corp.)
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Expressed in U.S. Dollars)
(Unaudited)
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| For the Three Months |
| For the Nine Months |
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| 2017 |
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OPERATING EXPENSES |
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Black Cactus license fee |
| $ | 6,600,000 |
| $ | — |
| $ | 6,600,000 |
| $ | — |
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Consulting (Note 9) |
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| 937,691 |
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| — |
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| 1,638,639 |
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| — |
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General and administrative |
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| 49,075 |
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| 28,851 |
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| 71,267 |
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| 48,096 |
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Investor relations |
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| 78,917 |
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| — |
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| 78,917 |
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| — |
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Professional fees |
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| 52,525 |
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| — |
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| 142,683 |
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| — |
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Product development and website costs (Note 12) |
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| 460 |
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| — |
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| 2,349,123 |
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| — |
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TOTAL OPERATING EXPENSES |
| $ | (7,718,668 | ) | $ | (28,851 | ) | $ | (10,880,629 | ) | $ | (48,096 | ) |
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Accretion of discounts on convertible debentures |
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| (12,161 | ) |
| — |
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| (12,161 | ) |
| — |
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Interest expense |
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| (4,037 | ) |
| — |
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| (4,037 | ) |
| — |
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NET LOSS AND COMPREHENSIVE LOSS |
| $ | (7,734,866 | ) | $ | (28,851 | ) | $ | (10,896,827 | ) | $ | (48,096 | ) |
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NET LOSS PER COMMON SHARE, |
| $ | (0.05 | ) | $ | (0.00 | ) | $ | (0.10 | ) | $ | (0.00 | ) |
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WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, |
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| 154,011,413 |
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| 81,728,000 |
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| 113,200,543 |
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| 80,576,000 |
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The accompanying notes are an integral part of these unaudited financial statements.
BLACK CACTUS GLOBAL, INC.
(Formerly Envoy Group Corp.)
STATEMENTS OF CASH FLOWS
(Expressed in U.S. Dollars)
(Unaudited)
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| For the Nine Months Ended |
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| 2018 |
| 2017 |
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CASH FLOWS FROM OPERATING ACTIVITIES |
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Net loss |
| $ | (10,896,827 | ) | $ | (48,096 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: |
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Accretion of loan discounts |
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| 2,947 |
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| 1,261 |
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Accretion of convertible debt discount |
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| 12,161 |
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| — |
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Issuance of common stock for BitReturn (Note 12) |
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| 1,900,000 |
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| — |
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Issuance of common shares for services |
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| 602,833 |
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| — |
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Issuance of common shares for license agreement (Note 11) |
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| 6,600,000 |
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| — |
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Shares issuable for services |
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| 660,000 |
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| — |
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Changes in operating assets and liabilities: |
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Prepaid expenses |
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| (284,025 | ) |
| — |
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Accounts payable and accrued liabilities |
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| 41,663 |
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| 94 |
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Amount payable for BitReturn |
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| 350,000 |
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| — |
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Net Cash Used in Operating Activities |
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| (1,011,248 | ) |
| (46,741 | ) |
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CASH FLOWS FROM FINANCING ACTIVITIES |
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Proceeds from advances payable |
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| 295,000 |
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| — |
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Advances from related party, net of repayments |
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| 321,620 |
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| (20,258 | ) |
Proceeds from issuance of common stock |
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| — |
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| 30,000 |
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Proceeds from issuance of convertible debt, net of debt financing costs |
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| 440,000 |
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| — |
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Proceeds from (repayments of) loans payable |
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| (32,474 | ) |
| 38,075 |
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Net Cash Provided by Financing Activities |
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| 1,024,146 |
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| 47,817 |
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Net effect of exchange rate changes on cash |
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| (1,345 | ) |
| (974 | ) |
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Net Increase in Cash and Cash Equivalents |
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| 11,553 |
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| 102 |
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Cash and Cash Equivalents, Beginning of Period |
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| 3 |
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Cash and Cash Equivalents, End of Period |
| $ | 11,556 |
| $ | 102 |
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SUPPLEMENTARY CASH FLOW INFORMATION: |
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Interest paid |
| $ | — |
| $ | — |
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Income taxes paid |
| $ | — |
| $ | — |
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The accompanying notes are an integral part of these unaudited financial statements.
1. NATURE OF BUSINESS
Black Cactus Global, Inc. (formerly Envoy Group Corp.) (the “Company”), was incorporated in the State of Florida on April 8, 2013. The address of the head office is Suite 200, 8275 South Eastern Avenue, Las Vegas, Nevada 89123. In December 2017, the Company acquired an exclusive software license for the Black Cactus blockchain development software platform and related intellectual property (the “Software”) and the Agreement includes a contract with the CEO of Black Cactus LLC to become a Director and Officer of the Company. The Company plans to use the Software platform to create a crypto trading exchange to support crypto and fiat currencies, music publishing, distribution, supply chain, medical research and trials (refer to Note 11). On December 4, 2017, the Company changed its name to “Black Cactus Global, Inc.”.
2. GOING CONCERN
The accompanying financial statements have filedbeen prepared assuming that the Company will continue as a going concern. The Company has had no revenue or operations, and only incurred losses since inception. As at January 31, 2018, the Company has a working capital deficiency of $695,068 and an accumulated deficit of $11,099,404. In view of these matters, the Company’s ability to continue as a going concern is dependent upon the Company’s ability to raise sufficient financing to acquire or develop a profitable business. The Company intends to finance its future development activities and its working capital needs largely from the sale of public equity securities with some additional funding from other traditional financing sources, including related party advances and term notes until such time that funds provided by operations are sufficient to fund working capital requirements. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.
3. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
These unaudited financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), and are expressed in United States dollars. The Company’s fiscal year-end is April 30.
These interim unaudited financial statements have been prepared in accordance with US GAAP for interim financial information and with the instructions to Securities and Exchange Commission 100 F Street NE, Washington, D.C. 20549,(“SEC”) Form 10-Q. They do not include all of the information and footnotes required by US GAAP to complete financial statements. Therefore, these interim financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended April 30, 2017, included in the Company’s Annual Report on Form 10-K filed with the SEC.
The financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the Company’s financial position at January 31, 2018, and the results of its operations for the three and nine months ended January 31, 2018 and cash flows for the nine months ended January 31, 2018. The results of operations for the period ended January 31, 2018 are not necessarily indicative of the results to be expected for future quarters or the full year.
The significant accounting policies followed are:
USE OF ESTIMATES
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates related to fair value measurements, stock-based compensation and deferred income tax asset valuation allowance. Actual results could differ from those estimates.
FINANCIAL INSTRUMENTS
ASC 825, “Financial Instruments”, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 825 prioritizes the inputs into three levels that may be used to measure fair value:
Level 1
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
The financial instruments consist principally of cash and cash equivalents, accounts payable, advances payable, due to related party, loans payable and convertible debentures. The fair value of cash and cash equivalents when applicable is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. Derivative liabilities are determined based on “Level 2” inputs, which are significant and observable. The Company believes that the recorded values of all other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations.
Assets and liabilities measured at fair value on a recurring basis were presented on the Company’s balance sheet as of January 31, 2018 and April 30, 2017:
| Fair Value Measurements Using |
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| Quoted Prices in | Significant |
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| Active Markets | Other | Significant |
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| For Identical | Observable | Unobservable | Balance as of | Balance as of |
| Instruments | Inputs | Inputs | January 31, | April 30, |
| (Level 1) | (Level 2) | (Level 3) | 2018 | 2017 |
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Assets: |
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Cash and cash equivalents | $ 11,556 | $ — | $ — | $ 11,556 | $ 3 |
Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents. The Company limits its exposure to credit loss by placing its cash and cash equivalents with high credit quality financial institutions.
RECENT ACCOUNTING PRONOUNCEMENTS
The Company has implemented all new mandatory accounting pronouncements that are in effect and there has been no significant impact on its financial statements. The Company does not believe that there are any new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
4. FINANCIAL RISK FACTORS
LIQUIDITY RISK
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at January 31, 2018, the Company has a cash balance of $11,556 and current liabilities of $1,094,816. The Company’s accounts payable and accrued liabilities have contractual maturities of less than 60 days and are subject to normal trade terms. The Company requires additional financing to meet its current obligations. The ability of the Company to continue to identify and evaluate feasible business opportunities, develop products and generate working capital is dependent on its ability to secure additional equity or debt financing.
FOREIGN EXCHANGE RISK
Foreign exchange risk is the risk that the Company will be subject to foreign currency fluctuations in satisfying obligations related to foreign activities. Loans payable to unrelated third parties may be denominated in Canadian dollars. Foreign exchange risk arises from purchase transactions as well as financial assets and liabilities denominated in these foreign currencies. The Company does not use derivative instruments to hedge exposure to foreign exchange rate risk. However, management of the Company believes there is no significant exposure to foreign currency fluctuations.
5. EQUIPMENT
On June 22, 2017, the Company purchased computer equipment totaling $364,590. The equipment was pledged as security on a loan (See Note 7(b)). Pursuant to the terms of the loan, should the loan remain unpaid past September 30, 2017, the lender would take sole possession of the equipment. The Company did not make the required payment and the equipment was returned to the lender. As at January 31, 2018 the Company had no equipment.
6. PREPAID EXPENSES AND OTHER ASSETS
The Company’s prepaid expenses and other assets consists of deposits, retainers and advance payments for various services including investor relations, legal, marketing and other costs.
7. RELATED PARTY TRANSACTIONS AND BALANCES
(a) | As at January 31, 2018, the Company was indebted to the majority shareholder in the amount of $321,217 (April 30, 2017- $1,872) for advances of working capital and expenses paid on behalf of the Company. The amount is unsecured, non-interest bearing and due on demand. |
(b) | On June 22, 2017, the Company entered into a secured loan with a corporation with a significant shareholder for a loan up to CAD$450,000 for the purpose of purchasing digital currency mining hardware (“Mining Hardware”). The loan was non-interest bearing and due on August 31, 2017. The Mining Hardware purchased with the loaned funds is held as collateral until the loan amount has been fully repaid. Furthermore, revenue produced by the Mining Hardware purchased with the loaned funds is to be paid to the Lender until the loaned funds are repaid in full. Should the loan remain unpaid past September 30, 2017, the Lender will take sole possession of the Mining Hardware, in lieu of the loan. As at September 30, 2017, the Company had not made the required payment of the loan and the Lender took sole possession of the Mining Hardware (refer to Note 5). |
8. ADVANCES PAYABLE
On December 20, 2017, the Company received $295,000 from Bellridge Capital L.P. as an advance relating to the second tranche of the Securities Purchase Agreement (refer to Notes 10 and 15).
9. LOANS PAYABLE
The balance presented for loans payable consist of the following amounts:
(a) | On July 15, 2016, the Company entered into a loan agreement for a principal balance of up to $50,000 at any given time. The amount is unsecured, non-interest bearing and due on July 15, 2018. As at January 31, 2018, the Company has received gross loan proceeds of $54,716. Upon receipt of the funds, the Company recorded fair value discounts of $6,836. During the year ended April 30, 2017, the Company repaid $10,600 of principal and recognized accretion of the discount of $2,067. During the nine months ended January 31, 2018, the Company repaid $5,000 of principal and recognized accretion of the discount of $2,947. At January 31, 2018, the net carrying value of the loan was $36,754. |
(b) | As at January 31, 2018, the Company was indebted for loans amounting to $500 (April 30, 2017 - $24,129). The amounts are unsecured, non-interest bearing and due on demand. |
(c) | As at January 31, 2018, the Company was indebted for loans in the amount of $nil (April 30, 2017 - $8,786 (CAD $12,000)). The amount is unsecured, non-interest bearing and due on demand. |
10. CONVERTIBLE DEBENTURES
On November 27, 2017 the entered into and closed on a Securities Purchase Agreement (“SPA”) with Bellridge Capital L.P. (“Bellridge”), pursuant to which the Company issued a senior secured convertible promissory note in the aggregate principal amount of $526,316 (“Note”) for an aggregate purchase price of $500,000, net of a $26,316 original issue discount and $10,000 of legal fees. The Company also incurred additional debt issuance costs of $50,000. The total debt issue costs of $86,316 have been netted against the principal and will be amortized over the term of the loan using the effective interest rate method. In addition, the Company issued 7,894,737 warrants to Bellridge with a term of six months at an exercise price equal to the lesser of (i) $.10 per share and (ii) 70% of the lowest traded price of the Company’s common stock during the prior twenty consecutive trading days. The Company also agreed to issue 2,793,296 shares to Bellridge in connection with the loan. The interest on the outstanding principal due under the Securities ActNote accrues at a rate of 19335% per annum. All principal and accrued interest under the Note is due on November 27, 2018 and is convertible into shares of the Company’s Common Stock at a registration statement on Form S-1 of which this prospectus is a part, with respectconversion price equal to the lesser of (i) $0.10 and (ii) 70% of the lowest traded market price in the 20 consecutive trading days prior to the conversion date.
The Company has evaluated whether separate financial instruments with the same terms as the conversion features above would meet the characteristics of a derivative instrument as described in paragraphs ASC 815-15-25. The terms of the contracts do not permit net settlement, as the shares offered hereby. We havedelivered upon conversion are not includedreadily convertible to cash. The Company’s trading history indicated that the shares are thinly traded and the market would not absorb the sale of the shares issued upon conversion without significantly affecting the price. As the conversion features would not meet the characteristics of a derivative instrument as described in this prospectus allparagraphs ASC 815-15-25, the information containedconversion features are not required to be separated from the host instrument and accounted for separately. As a result, at January 31, 2018, the conversion features and non-standard anti-dilutions provisions would not meet derivative classification.
The relative fair values of the convertible note, the warrants and the shares were $140,733, $284,751 and $100,832, respectively. The effective conversion price was then determined to be $0.063. As the stock price at the issuance date was greater than the effective conversion price, it was determined that there was a beneficial conversion feature. The Company recognized the relative fair value of the shares issuable of $100,832 and an equivalent discount that reduced the carrying value of the convertible debt to $425,484. The Company then recognized the relative fair value of the warrants of $284,751 as additional-paid-in capital and an equivalent discount that further reduced the carrying value of the convertible debt to $140,733. The beneficial conversion feature of $54,417, the OID of $26,316 and debt financing costs of $60,000 discounted the convertible debenture such that the carrying value of the convertible debt on the date of issue was $0. The discount is being expensed over the term of the loan to increase the carrying value to the face value of the loan. The Company determined that there was no derivative liability associated with the debenture under ASC 815-15 Derivatives and Hedging. During the nine months ended January 31, 2018, the Company recorded accretion of discount of $12,161 increasing the carrying value of the loan to $12,161. As at January 31, 2018, the Company has recorded accrued interest of $4,037 (2017 - $nil).
As part of the SPA, Bellridge is loaning the Company a minimum of $500,000 to a maximum of $1,500,000.00 (“Loan”). The first tranche was the $500,000 in form of the Note above. The next tranche of $500,000 will be due in 5 days after the Company receives its first comments concerning the registration statement to be filed and you should refer tothe final tranche of $500,000 will be funded upon the effectiveness of the registration statement andthat we will file covering the shares of our exhibitscommon stock issuable upon conversion of the notes. Refer to Note 15 for further information.an amendment to the second tranche of the Loan.
In connection with the Note and SPA, the Company also entered into a Registration Statement, certain items of which are contained in exhibits and schedules as permitted byRights Agreement obligating the rules and regulationsCompany to register the shares issuable upon conversion of the Securities and Exchange Commission. You can obtain a copy of the Registration Statement from the Securities and Exchange Commission by mail from the Public Reference Room of the Securities and Exchange Commission at 100 F Street, NE, Washington, D.C. 20549, at prescribed rates. In addition, the Securities and Exchange Commission maintains a Web site at http://www.sec.gov containing reports, proxy and information statements and other information regarding registrants that file electronicallyNote with the Securities and Exchange Commission. The SecuritiesCompany also issued security agreements whereby it granted Bellridge a security interest in its assets and Exchange Commission’s telephone number is 1-800-SEC-0330 (1-800-732-0330). These SEC filingsintellectual property. The obligations of the Company to repay the Note are also availableguaranteed by the Company’s subsidiaries. The Company will utilize the proceeds of the Bellridge loan to support its proposed development of the software license obtained from Black Cactus
11. LICENSE
On November 6, 2017 the Company issued 60,000,000 shares of common stock with a fair value of $6,600,000 pursuant to the publicterms of an Exclusive Software License Agreement (the “Agreement”) with Black Cactus Holdings, LLC (“Black Cactus LLC”) to acquire an exclusive software license for the Black Cactus blockchain development software platform and related intellectual property (the “Software”) and the Agreement includes a service contract with the CEO of Black Cactus LLC to join the Company as a director and officer. The Company plans to use the Software platform to create a crypto trading exchange to support crypto and fiat currencies, music publishing, distribution, supply chain, medical research and trials. The term of the Agreement will remain in effect in perpetuity. In addition, the Company agreed to pay Black Cactus a royalty in the amount of 5% of the net revenue received from commercial document retrieval services.the sublicense of the Software and any revenues generated from the use of the Software including other intellectual property that the Company licensed from Black Cactus LLC pursuant to the terms of the Agreement.
12. PRODUCT DEVELOPMENT AND WEBSITE COSTS
You should rely only onOn June 18, 2017, the information containedCompany entered into a Definitive Acquisition Agreement involving the internet domain and brand BitReturn. The Agreement represents the Company’s development of a plan to create a technology business in this prospectus. No finder, dealer, sales person or other person hasmining digital currency with an operating name of BitReturn. The Company issued 10,000,000 shares of restricted common stock with a fair value of $1,900,000 as payment under the terms of the Agreement, which have been authorized to give any information orrecognized as and included in product development and website costs. The Company is also to make any representation in connection with this offering other than those contained in this prospectus and, if given or made, such information or representation must not be relied upon as having been authorized by ENVOY GROUP CORP.. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy anycash payments totaling $350,000 under the terms of the securities offered hereby by anyone in any jurisdiction in which such offer or solicitationAgreement, and as at January 31, 2018, $350,000 is recorded as an amount payable for BitReturn. Product development and website expenses represent costs of acquiring the brand BitReturn, development of the crypto currency mining product, and creation of the website. These costs do not authorized or in whichmeet the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation.criteria for capitalization, and therefore have been treated as an operating expense.
STOCK TRANSFER AGENT
We have not engaged the services of a transfer agent at this time. However, within the next twelve months we anticipate doing so. Until such a time a transfer agent is retained, we will act as our own transfer agent.
- 39 -
DEALER PROSPECTUS DELIVERY OBLIGATION
Until a date, which is 90 days after the date of this prospectus, all dealers that effect transactions in these securities whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
[back cover of prospectus]
ENVOY GROUP CORP.
(A Development Stage Entity)
INDEX TO FINANCIAL STATEMENTS
For the Period from April 8, 2013 (Date of Inception) through April 30, 201313. COMMITMENTS
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(d) | On January 4, 2018, the Company entered into an Equity Research Service Agreement for investor relations services to be provided over a period of twelve months commencing January 4, 2017. In consideration, the Company will issue a total of 150,000 shares of common stock. On January 16, 2017, the Company issued 150,000 shares of common stock with a fair value of $57,000, which has been recorded as a prepaid expense and will be amortized over the term of the agreement. During the nine months ended January 31, 2018, the Company recognized $4,750 of consulting expense. |
14. STOCKHOLDERS’ DEFICIT
On November 13, 2017, the Company amended its Articles of Incorporation, increasing the number of common stock authorized from 240,000,000 to 490,000,000, par value of $0.0001, and leaving the number of preferred stock authorized at 10,000,000, par value of $0.0001.
At the time of the amendment, the Company designated 10,000 shares of its authorized but unissued shares of preferred stock as Series A Preferred Stock. The 10,000 Series A Preferred Stock shall have an aggregate voting power of 45% of the combined voting power of the entire Company’s shares, common stock and preferred stock, as long as the Company is in existence. Each holder of the Series A Preferred Stock shall have full voting rights and powers equal to the voting rights and powers of the holders of common stock, and shall be entitled, notwithstanding any provision hereof, to notice of any stockholders’ meeting in accordance with the by-laws of the Company, and shall be entitled to vote, together with holders of common stock, with respect to any question upon which holders of common stock have the right to vote. Without the vote or consent of holders of at least a majority of the shares of Series A Preferred Stock then outstanding, the Company may not (i) authorize, create or issue, or increase the authorized number of shares of, any class or series of capital stock ranking prior to or on a parity with the Series A Preferred Stock, (ii) authorize, create or issue any class or series of common stock of the Company other than the common stock, (iii) authorize any reclassification of the Series A Preferred Stock, (iv) authorize, create or issue any securities convertible into or exercisable for capital stock prohibited by (i) or (ii), (v) amend this Certificate of Designations or (vi) enter into any merger or reorganization, or disposal of assets involving 20% of the total capitalization of the Company.
Subject to the rights of the holders of any other series of preferred stock ranking senior to or on a parity with the Series A Preferred Stock with respect to liquidation and any other class or series of capital stock of the Company ranking senior to or on a parity with the Series A Preferred Stock with respect to liquidation, in the event of any liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or involuntary, the holders of record of the issued and outstanding shares of Series A Preferred Stock shall be entitled to receive, out of the assets of the Company available for distribution to the holders of shares of Series A Preferred Stock, prior and in preference to any distribution of any of the assets of the Company to the holders of common stock and any other series of preferred stock ranking junior to the Series A Preferred Stock with respect to liquidation.
The holders of the Series A Preferred Stock shall not be entitled to receive dividends per share of Series A Preferred Stock. The Company shall have no rights to redeem Series A Preferred Stock.
COMMON STOCK
On June 26, 2017, the Company issued 1,400,000 shares of common stock for gross proceeds of $14,000, which was received during the year ended April 30, 2017.
On June 27, 2017, the Company issued 10,000,000 shares of common stock with a fair value of $1,900,000 for BitReturn pursuant to a Definitive Acquisition Agreement (refer to Note 13).
On July 1, 2017, the Company issued 1,000,000 shares of common stock with a fair value of $250,000 for investor relations services pursuant to a Strategic Management and Advisory Agreement (refer to Note 14).
On July 26, 2017, the Company issued 2,500,000 shares of common stock with a fair value of $400,000 as signing bonuses pursuant to service agreements and the $400,000 fair value was expensed and included in consulting fees.
On November 6, 2017, the Company issued 60,000,000 shares of common stock with a fair value of $6,600,000 for a license fee pursuant to the Exclusive Software License Agreement (refer to Note 11).
On January 16, 2018, the Company issued 3,200,000 shares of common stock pursuant to the Share Purchase Agreement with an unrelated third party. Under the terms of the Agreement, the Company will purchase all the issued ordinary shares of the unrelated third party from its shareholders, thereby acquiring all the intellectual property, research and development, contracts, accounts receivable and licenses owned by the unrelated third party. In exchange, the Company will issue 3,200,000 shares of its common stock to the unrelated third party’s shareholders. The Agreement will not close and the acquisition will not be complete until the Company receives the source code and software to the unrelated third party’s intellectual property for all of the unrelated third party’s programs, platforms and products and these assets have been independently verified. Additionally, if the shares issued to the unrelated third party shareholders do not have an aggregate value of $2,000,000 by January 15, 2019, the unrelated third party shareholders are entitled to have additional shares issued to them so that they hold shares equal to $2,000,000 as of that date. As at January 31, 2018, the Company has not received the source code and software relating to the intellectual property and the Agreement has not closed. The 3,200,000 shares are being held by the Company until closing of the Agreement.
On January 16, 2018, the Company issued 150,000 shares of common stock with a fair value of $57,000 for investor relations services pursuant to an Equity Research Services Agreement (refer to Note 13).
As at January 31, 2018, there are 161,250,000 shares of common stock issued and 158,050,000 shares of common stock outstanding.
PREFERRED STOCK - SERIES A
As at January 31, 2018, there are no issued and outstanding Series A Preferred Stock.
15. SUBSEQUENT EVENTS
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Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of
ENVOY GROUP CORP.
Sarasota, FL.Envoy Group Corp.
We have audited the accompanying balance sheet of ENVOY GROUP CORP. (a development stage entity)sheets Envoy Group Corp. as of April 30, 20132017 and 2016 and the related statementstatements of operations stockholder’s equityand comprehensive loss, stockholders’ deficit and cash flows for the period from April 8, 2013 (date of inception) through April 30, 2013.years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.audits.
We conducted our auditaudits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the auditaudits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit providesaudits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ENVOY GROUP CORP. (a development stage entity)Envoy Group Corp. as of April 30, 20132017 and 2016, and the results of its operations and its cash flows for the period from April 8, 2013 (date of inception) through April 30, 2013years then ended in conformity with accounting principles generally accepted in the United States of America.States.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has incurred a loss,working capital deficit and has not generated revenue, has not emerged from the development stage, and may be unable to raise further equity.accumulated losses since inception. These factors raise substantial doubt about itsthe Company’s ability to continue as a going concern. Management’s plans regarding thosein regard to these matters are also describeddiscussed in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Messineo & Co, CPAs, LLC/s/ Manning Elliott LLP
Clearwater, Florida
May 13, 2013CHARTERED PROFESSIONAL ACCOUNTANTS
Vancouver, Canada
August 11, 2017
ENVOY GROUP CORP.
(A Development Stage Company)BALANCE SHEETS
Balance Sheet(Expressed in U.S. Dollars)
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| April 30, |
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ASSETS |
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CURRENT ASSETS |
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Cash and cash equivalents |
| $ | 8,908 |
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Total current assets |
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| 8,908 |
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TOTAL ASSETS |
| $ | 8,908 |
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LIABILITIES AND STOCKHOLDER’S EQUITY |
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CURRENT LIABILITIES |
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Accounts payable & Accrued liabilities |
| $ | — |
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Total liabilities |
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| — |
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STOCKHOLDER’S EQUITY |
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Capital Stock(Note 4) |
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Authorized: |
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250,000,000 common shares, $0.0001 par value. |
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Issued and outstanding shares: |
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9,000,000 common shares. |
| $ | 900 |
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Additional paid-in capital |
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| 8,100 |
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Deficit accumulated during the development stage |
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| (92 | ) |
Total Stockholder’s Equity |
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| 8,908 |
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TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY |
| $ | 8,908 |
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| April 30, |
| April 30, |
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| 2017 |
| 2016 |
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ASSETS |
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CURRENT ASSETS |
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Cash and cash equivalents |
| $ | 3 |
| $ | — |
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TOTAL ASSETS |
| $ | 3 |
| $ | — |
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LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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CURRENT LIABILITIES |
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Accounts payable and accrued liabilities |
| $ | 37,151 |
| $ | 39,754 |
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Due to related party (Note 4) |
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| 1,872 |
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| 23,236 |
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Loans payable (Note 5) |
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| 32,916 |
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| 11,113 |
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Total Current Liabilities |
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| 71,939 |
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| 74,103 |
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Loans payable (Note 5) |
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| 33,782 |
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| — |
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TOTAL LIABILITIES |
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| 105,721 |
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| 74,103 |
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STOCKHOLDERS’ DEFICIT |
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Preferred stock, $0.0001 par value; 10,000,000 shares authorized, of which |
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Common stock, $0.0001 par value; 240,000,000 shares authorized; |
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| 8,300 |
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| 8,000 |
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Share subscriptions received |
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| 14,000 |
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Additional paid-in capital |
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| 74,559 |
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| 38,500 |
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Accumulated deficit |
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| (202,577 | ) |
| (120,603 | ) |
Total Stockholders’ Deficit |
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| (105,718 | ) |
| (74,103 | ) |
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TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT |
| $ | 3 |
| $ | — |
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SeeGoing Concern (Note 2)
Subsequent Event (Note 9)
The accompanying auditors’ report and notes to theare an integral part of these financial statements.
ENVOY GROUP CORP.
(A Development Stage Company)STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Statement(Expressed in U.S. Dollars)
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| For the Years Ended April 30, |
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| 2016 |
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OPERATING EXPENSES |
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General and administrative |
| $ | 56,905 |
| $ | 10,443 |
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Professional fees |
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| 25,069 |
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| 28,927 |
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NET LOSS AND COMPREHENSIVE LOSS |
| $ | (81,974 | ) | $ | (39,370 | ) |
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NET LOSS PER COMMON SHARE, BASIC AND DILUTED |
| $ | (0.00 | ) | $ | (0.00 | ) |
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WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED |
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| 80,789,041 |
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| 80,000,000 |
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The accompanying notes are an integral part of Operations
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| For the Period |
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| from Inception |
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| April 8, 2013 |
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| April 30, 2013 |
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REVENUES |
| $ | — |
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EXPENSES |
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General & Administrative |
| $ | 92 |
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Professional Fees |
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Loss Before Income Taxes |
| $ | (92 | ) |
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Provision for Income Taxes |
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Net Loss |
| $ | (92 | ) |
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PER SHARE DATA: |
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Basic and diluted loss per common share |
| $ | (0.00 | ) |
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Basic and diluted weighted average common shares outstanding |
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| 9,000,000 |
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See accompanying auditors’ report and notes to thethese financial statements.