UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):April 26, 2013
PAN GLOBAL, CORP.
(Exact name of registrant as specified in its charter)
Nevada | 333-167130 | 27-2473958 | ||
(State or other jurisdiction | (Commission | (IRS Employer | ||
of incorporation) | File Number) | Identification No.) |
123 W. Nye Lane, Suite 455 Carson City, Nevada | 89706 | |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code:(888) 983-1623
N/A
(Former name or former address, if changed since last report.)
With a copy to:
Philip Magri, Esq.
The Magri Law Firm, PLLC
11 Broadway, Suite 615
New York, NY 10004
T: (646) 502-5900
F: (646) 826-9200
pmagri@magrilaw.com
www.MagriLaw.com
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Current Report on Form 8-K contains forward-looking statements that involve risks and uncertainties, principally in the sections entitled “Description of Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” All statements other than statements of historical fact contained in this Current Report on Form 8-K, including statements regarding future events, our future financial performance, business strategy and plans and objectives of management for future operations, are forward-looking statements. We have attempted to identify forward-looking statements by terminology including “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “should,” or “will” or the negative of these terms or other comparable terminology. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks outlined under “Risk Factors” or elsewhere in this Current Report on Form 8-K. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time and it is not possible for us to predict all risk factors, nor can we address the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause our actual results to differ materially from those contained in any forward-looking statements.
We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations, and financial needs. These forward-looking statements are subject to certain risks and uncertainties that could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Current Report on Form 8-K, and in particular, the risks discussed below and under the heading “Risk Factors” and those discussed in other documents we file with the Securities and Exchange Commission that are incorporated into this Current Report on Form 8-K by reference. The following discussion should be read in conjunction with our consolidated financial statements and notes thereto included in this Report. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Current Report on Form 8-K may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
You should not place undue reliance on any forward-looking statement, each of which applies only as of the date of this Current Report on Form 8-K. Before you invest in our common stock, you should be aware that the occurrence of the events described in the section entitled “Risk Factors” and elsewhere in this Current Report on Form 8-K could negatively affect our business, operating results, financial condition and stock price. Except as required by law, we undertake no obligation to update or revise publicly any of the forward-looking statements after the date of this Current Report on Form 8-K to conform our statements to actual results or changed expectations.
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ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
As previously reported by Pan Global, Corp., a Nevada corporation formerly known as Savvy Business Support, Inc. (the “Company”), on a Form 8-K filed with the Commission on May 1, 2013, on April 25, 2013, the Company entered into a Stock Exchange Agreement (the “Agreement”) with Pan Asia Infratech Corp., a Nevada corporation (“Pan Asia”).
Pursuant to the Agreement, consummated on April 26, 2013, the stockholders of Pan Asia transferred to the Company 100% of the outstanding capital stock of Pan Asia (consisting of 15,000 shares of common stock, no par value) in exchange for, on a pro rata basis, an aggregate of 90 million (90,000,000) shares of common stock, par value $0.0001 per share (the “Common Stock”), of the Company (the “Share Exchange”). As a result of the Share Exchange, Pan Asia became a wholly-owned subsidiary of the Company and the business of Pan Asia has become the business of the Company.
Pan Asia is a development stage company incorporated in Nevada on July 13, 2012 and its principal business is the development of projects and technologies in environmentally sustainable energy and infrastructure markets. Pan Asia intends to generate sales through consulting and project management fees, project development fees, revenue from operating or investing in energy and infrastructure facilities, and technology sales.
Pursuant to Item 201(f) of Current Report on Form 8-K, if any disclosure required by Item 2.01(f) is previously reported by the Company, the Company may identify the filing in which that disclosure is included instead of including that disclosure in this report.
BUSINESS
General
Pan Global, Corp. was incorporated in the State of Nevada on April 30, 2010 under the name of Savvy Business Support, Inc. (“Savvy”). Because Savvy had nominal operations and minimal assets since its inception on April 30, 2012, it had been considered to be a “shell company,” as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Upon the consummation of the Share Exchange on April 26, 2013, Pan Asia became a wholly-owned subsidiary of Savvy, and the Company ceased being a “shell company.”
On April 26, 2013, Savvy amended its Articles of Incorporation with the Secretary of State of Nevada thereby changing the name of the Company from Savvy Business Support, Inc. to Pan Global, Corp.
On May 2, 2013, the OTCBB symbol of the Company’s Common Stock was changed from SVYB to PGLO.
Unless otherwise defined herein, the terms “Pan Global,” the “Company,” “we,” “us,” “our,” and similar terms shall refer to Pan Global, Corp. and its wholly-owned subsidiary, Pan Asia Infratech Corp., a Nevada corporation.
Business Overview
Pan Global is focused on developing environmentally sustainable energy and infrastructure projects and technologies. Our aim is to invest in green energy technology and infrastructure around the world. We incubate and fund investments in renewable energy and energy efficiency technology and “green” projects that comprise innovative solutions for basic infrastructure. We have a significant, but not exclusive, focus on developing investment opportunities in India.
The Company has formulated a business model that management believes can help it grow and achieve scale over time. We have undertaken the necessary due diligence and prepared a business plan that will enable us to compete in the market for environmentally sustainable energy and infratech solutions.
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Business Development
We are investigating business opportunities in the market segments in which we operate, and we intend to pursue these opportunities by securing rights to technologies and projects. These opportunities are identified through our management’s network of contacts in India and around the world.
During the next three years, we intend to pursue opportunities in the following areas:
● | Energy Efficiency. We have identified opportunities in energy efficiency consulting and innovation in India, where energy demand and prices are increasing rapidly. We believe Indian businesses and households are seeking energy solutions that can assist them with increasing the efficiency of their energy usage as well as seeking to adopt innovative green energy technologies that supplement or substitute for their reliance on fossil fuels and traditional grid-based electricity. We seek to provide such solutions to customers through consulting services, project implementation and project management. We envision such solutions to cover areas such as alternative energy technology implementation, building retrofits to reduce energy usage, installation of electrical control system technology and other similar items. |
● | Alternative Energy Projects.We seek to invest in alternative energy projects, such as the development of power generation projects using solar photovoltaic (“PV”), mini-hydro, geothermal and wind energy technologies. Several countries, including India, provide certain electric power generation incentives for the development of these and other alternative energy technologies. Pan Global seeks to provide development funding for such projects. We may sell these projects at the time of commissioning or hold them for the long term, depending on the financial return to the Company on a case by case basis. |
● | Infrastructure.The Company also seeks to invest in non-energy infrastructure technology and projects that provide environmentally sustainable solutions in place of conventional technology. We are seeking opportunities to develop projects in the field of agriculture, building technology and water distribution, amongst others. Management believes the Indian agriculture sector is ripe for adopting technologies that significantly reduce environmental footprints, such as by improving the efficiency of water use and intensity of land use. We believe there are existing technologies in the building sector that are widely used in Europe and North America which significantly improve resource efficiency and which can be adapted to the Indian market. We also believe there are opportunities in the Indian market for water purification and waste-water treatment. The Company seeks to introduce such technologies in the Indian context. In some cases we may license these technologies from the patentholder. In other cases, the technology is available for general use, so we will seek to develop projects directly. |
Business Model
Our business model is based on three prospective revenue streams: consulting fees; sales of equipment and technology in connection with energy efficiency projects; and revenue from operating projects such as power generation, agricultural operations and other infrastructure related projects. Our revenue from operating projects may be derived from projects in which we hold a majority equity position or where we hold an investment as a minority partner. Generally, we anticipate that our sales will be derived from business and commercial customers, as follows:
1. | Consulting Fees: We are in the process of building an energy efficiency audit and consulting team in India that will conduct energy audits for commercial and other business customers and advise them on how they can implement energy savings technologies to reduce their energy usage. The audit and consulting team may also manage project implementation, equipment procurement and provide installation services. |
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2. | Power generation projects: We are investigating opportunities to develop electric power generation projects from renewable energy sources such as solar, mini-hydro, geothermal and wind. While our main focus is on potential projects in India, it is not exclusively so. Within the Indian market there are available various government backed incentives programs, including those which provide direct tariff subsidies as well as market based tariff support through renewable energy credits that can be sold in established trading markets. We intend to pursue both types of opportunities and to assess the project viability on a case by case basis, and to invest in such projects both as owner-developers and/or as partners with other developers. Our investments may be made as equity level investments or as mezzanine funding. These projects earn revenue from the sale of power generated and sold to either government owned electricity companies or from the direct sale of power to private buyers. |
3. | Infrastructure: We are investigating opportunities to develop sustainable projects in the Indian infrastructure industry, including but not limited to, investments in agriculture, the building construction industry and water purification and treatment. We intend to pursue the development of agricultural growing operations using more modern technology and equipment than is currently in use in India. One of the areas we are focusing on is the establishment of greenhouse facilities for growing certain crops, which is a young but growing industry in India. We also intend to identify and pursue other infrastructure related opportunities including in the construction industry, where we seek to introduce sustainable building technologies to the Indian market, and water management technologies to improve water quality and usage efficiency. Some of these opportunities may overlap in one project, such as in the case of water management in the context of greenhouse growing operations. Since this business segment is broad, our revenue from it will be derived in varying ways: |
a. | In the agricultural production component we intend to establish relationships with wholesalers to distribute our produce under a branded label that is characterized by a marketing strategy that establishes us as a grower of natural, organic and pesticide free environmentally sustainable premium produce. We may also sell product directly to large retail buyers. | |
b. | In the building construction, water management and other component of this segment we expect to generate license revenue and revenue from the sale of equipment and technology. We may also earn revenue, in the case of water management, from operating facilities or distribution of water. Our customers may include commercial businesses, government entities, as well as retail clients. |
Industry Analysis
The market for environmentally sustainable products and services in alternative energy, infrastructure and similar areas, is highly competitive and broad. Although numerous established companies offer a variety of services to various different industry space’s in which we operate, the Company believes our business model should enable us to establish and maintain a niche but growing presence in areas such as project development for alternative energy facilities and energy efficiency consulting services; and, with respect to our infrastructure space strategy, we believe our business model should enable us to establish operations based on the early use of superior and more efficient technology that provides a more compelling value proposition to potential customers compared to our competitors.
While we have numerous competitors in the alternative energy and energy efficiency consulting space; many of these are large competitors who primarily undertake large projects (50 MW or more), whereas we intend to initially focus on small and medium size projects, where larger, more established competitors have less presence. Part of our strategy to address competitive pressures is to target projects in early stage markets where there are fewer competitors, such as market-based solar PV projects with private counterparties or mini-hydro. We will still have to face smaller competitors, but we aim to more efficiently and effectively execute project funding, which is a key factor for closing and commissioning alternative energy projects that smaller firms often find difficult to surmount.
Within the sector of the infrastructure space in which we intend to compete there are many large and small competitors. We intend to compete by being early stage adopters of emerging technology and methods, which may be available for general use or proprietary under license to us. The Indian agricultural market is highly competitive, comprised of millions of small-holdings farmers, but we intend to use greenhouse and other technology to grow superior, more consistent product, artificial pesticide free and with more efficient water use and intend to charge higher prices. We believe there is a market for such agricultural product, among India’s budding retail chain store market, international class hotels and similar establishments, which can absorb higher prices compared to traditionally grown product. In other infrastructure areas we intend to compete with the adoption of superior technology that management assesses gives it a first-mover advantage, such as by employing and selling technologies that reduce or re-use inputs and generally provide a more efficient solution to existing products or methods.
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Marketing
Our marketing strategy is focused on using our management’s contact network to establish a pipeline of projects in the energy and infrastructure sectors in which we operate and to similarly establish a limited number of initial customers for our consulting services and products.
In the power generation aspect of our business we need to secure a limited number of projects in the short to medium (3-24 months), as each project, while small compared to traditional energy generation technologies, still involves multi-million dollar investment outlays and 6-18 months to commission. The Company intends to target projects and customers where we can execute project expansion in phases, with a small minimum capacity to begin and room for growth in several phases over time at the same facility. We believe our potential customers are amenable to such a phased growth approach, as it decreases their risk as well as ours, since they must sign long term agreements with us to offtake power. We intend to target requests for proposals for small projects from government and to approach private businesses willing to adopt our energy solutions. In particular, we intend to target those areas where potential power customers face high power and fuel costs near or exceeding the cost of alternatives we can provide and where customers face inconsistent power availability.
Similarly, in our infrastructure segment our initial projects are likely to be small but they will still require multi-million dollar investments over a period of 1-2 years to complete and bring to the revenue-generating stage. While we intend to grow rapidly, management believes the best opportunity for the Company’s success lies in executing a phased growth strategy whereby we begin with small capacity build-outs while allowing for project expansions over time. We intend to establish small operations, such as in agriculture, to build initial relationships with key customers and distributors who are amenable to make larger purchases from us over time; in this agriculture segment we intend to market our products to the growing number of food retail chains in India and wholesale distributors and other retail buyers seeking more consistent product, more consistent delivery and higher quality product than is generally available from the traditional agriculture sector. In other infrastructure projects, where we may be introducing new technology to a customer base, we believe our best marketing strategy is to complete a limited number of small projects which establish confidence and credibility for our product offering; our marketing will be focused on targeting the growing number of Indian firms, governments and quasi-government entities seeking to elevate their environmental sustainability credentials and who see value in generally taking a more sustainable approach to their infrastructure needs.
We have identified potential partners and collaborators for our products and services in power generation and infrastructure. These are firms that are seeking partners to assist them in commissioning or operating projects by providing funding or who are seeking partners for management assistance. The Company will consider such opportunities on a case by case basis. Some collaboration may be one-time; in other cases it may involve situations where the Company believes establishing a longer term relationship with a potential partner will help us build a pipeline of opportunities over time. We will consider all such opportunities as management develops them.
Growth Strategy of the Company
Our goal is to establish a rational growth strategy that will maximize shareholder value over time by applying a phased growth strategy. We intend to secure a limited number of consulting engagements in the near term (3-24 months) but to grow this segment over time in line with our personnel growth, since such services are labor and management intensive. We also intend to initially secure a limited number of opportunities in our power generation and infrastructure segments during the next 3-24 months, but such that they can be expanded over time into a pipeline of projects that require commissioning over a period of several years.
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We believe a phased growth strategy is the most rational way for us to execute our vision, as our opportunities, particularly in power generation and infrastructure, while they may be small projects, still entail multi-million dollar investment outlays per individual project. Our projects involve complexities, such as coordinating engineering, procurement and construction activities; therefore, building projects in phases and staging growth over a period of years enables management to reduce execution and financing risk, while the Company bolsters its management resources to cope with our growth. We believe a phased growth strategy will also help the Company build a growing and more stable revenue base than an alternative approach that could involve attempts to execute opportunities that are too difficult to manage and finance given the current scope of our resources.
Competitive Analysis
The Company has many potential competitors in the industry segments in which we intend to operate. In providing energy consulting services we face direct competition from well-capitalized large international firms and a range of regional and small, local firms; these firms tend to have focus on customers of differing size, with some overlap. Nevertheless, our management believes there is ample opportunity for the Company to build a successful franchise in India by pro-actively approaching the many small and medium size companies that have not undergone energy audits or engaged with similar consultants in a country market (India) that as yet remains in an early stage of development.
In the power generation segment, we also face competition from firms of all sizes; the competition includes well-capitalized large firms, some of whom are publicly-traded; it includes many medium size firms, many of which are private and many of which have a primary focus on just one alternative energy technology (such as solar PV, or wind); it also includes many small firms, often capitalized by individuals or groups of high net worth investors seeking a limited exposure to one or two projects. We intend to compete by carefully choosing our opportunities from among those parts of the market that remain early stage, which includes market based solar PV projects, niche mini-hydro, geothermal and similar opportunities.
With respect to our infrastructure segment and the agricultural sector, we face competition from the multitude of small plot-holding farmers in India and other food growing operations. Management believes we can compete by using advanced growing methods and techniques, such as greenhouses, to provide a premium product that is more consistent, healthier and more environmentally sustainable than that which comes from traditional farms. As of now, there are a very limited number of greenhouse grow operations in India and most of these appear to be comprised of small entrepreneurs selling low volumes of produce or who are instead focused factory style mass market operations. We expect that if we demonstrate the viability of greenhouse operations, as we expect, new and better capitalized competitors will emerge at some point in the future.
In other infrastructure areas, such as building construction technology and water management we intend to compete based on adopting a first mover strategy using new and superior technology, often where we can establish proprietary rights to such technology to the exclusion of competitors. However, we will still face competition from a range of firms that provide solutions based on their own proprietary or general use technology. Before proceeding in this area management intends to conduct an assessment of the value proposition we can establish for any technology we may seek to secure and market. Our competitors in these market segments include a multitude of large, medium and small firms providing a diverse base of competitive products and solutions.
We consider our competition to be, in general, competent and experienced. They are likely to have greater financial and marketing resources than do we at the present time. Our ability to compete may be adversely affected by the ability of these competitors to devote greater resources to marketing, research and development, growth of the management team and other employees, amongst other factors, than are available to our Company. Some of the Company’s competitors in each of our segments also offer a wider scope of services and have greater name recognition. Our competitors include large firms that also have extensive existing customer bases and established distribution channels.
Two-Year Growth Strategy and Milestones
During the next two years, the Company’s growth strategy is to establish a sales and project base from which we can build out a project pipeline over subsequent years. We intend to secure a limited number of consulting engagements, power and infrastructure project opportunities and additional personnel to execute our plans. Within the infrastructure space, we plan to establish an initial small operation in the agricultural segment from which we can build an experienced team and set the stage for phased growth of the operations over time as additional financial resources become available to us. Similarly, within the power generation segment we intend to secure up to three initial projects that we can develop in the short term – within the next 24 months – so as to establish the base for a phased growth plan and expanding project pipeline over time.
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Patents, Trademarks, Licenses, Franchises, Concessions and Royalty Agreements
At the present, we do not have any patents or trademarks nor are we a party to any licenses, franchises, concessions or royalty agreements.
Need for any Government Approval of Products or Services
There will be instances where we will need to secure various government permits or other authorizations, such as in the power generation and infrastructure segments, including agreements with grid operators for wheeling power, building permits, securing of water rights, and land rezoning, among others.
Government and Industry Regulation
We will be subject to federal laws and regulations that relate directly or indirectly to our operations including securities laws. We will also be subject to common business and tax rules and regulations pertaining to the operation of our business. At this point, we cannot ascertain the effect of existing or probable government relations on our business.
Research and Development Activities
Other than time spent researching our proposed business, the Company has not spent any funds on research and development activities to date. The Company plans to spend funds on research and development in the future, such as for adapting new technologies and gaining certifications in India and in collaborations with universities or researchers in connection with developing proprietary technology in one or more of the segments in which we operate.
Environmental Laws
We will be subject to federal, state and local environmental laws that relate directly or indirectly to our operations in the jurisdictions in which we operate. At this time, we cannot ascertain the costs and effects of compliance with environmental laws.
Employees; Employment Agreementsand Labor Contracts
We currently have one employee (full-time), Bharat Vasandani who serves as our President, Chairman, Chief Executive Officer and Chief Financial Officer. We do not have an employment agreement with Mr. Vasandani. We do not have any labor contracts.
Dividend Policy
We have never paid or declared dividends on our securities. Pursuant to the Certificate of Designation for our Series C Preferred Stock (effective on April 29, 2013), the holders of shares of Series C Preferred Stock are entitled to a one-time special dividend of $0.001 per each outstanding share of Series C Preferred Stock payable by the Company to the holders thereof no earlier than the thirtieth (30th) day after the date of issuance of the Series C Preferred Stock to such holders but no later than the first anniversary date of the date of issuance of the Series C Preferred Stock to such holders, subject to the approval of the holders of the Company’s senior securities and satisfaction of the Nevada Revised Statutes. The payment of cash dividends, if any, in the future is within the discretion of our Board and will depend upon our earnings, our capital requirements, financial condition and other relevant factors. Other than the one-time dividend for our outstanding Series C Preferred Stock, we do not foresee paying any dividends on our outstanding securities; but, rather, we intend to retain any future earnings for use in our business.
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Principal Executive Offices
Our principal executive offices are located at 123 W. Nye Lane, Suite 455, Carson City, NV 89706. Our telephone number is (888) 983-1623. Our website address iswww.panglobalcorp.com. The contents of our website are not incorporated by reference into this Form 8-K.
RISK FACTORS
An investment in our Company is extremely risky. You should carefully consider these risks, in addition to the other information presented in this Report, before deciding to our securities. If any of the following risks actually materialize, our business and prospects could be seriously harmed, the trading price and value of our securities could decline and you could lose all or part of your investment. The risks and uncertainties described below are not exclusive and are intended to reflect the material risks that are specific to us, material risks related to our industry and material risks related to companies that undertake a public offering or seek to maintain a class of securities that is registered or traded on an exchange or quoted on the over-the-counter market.
Risks Related to Our Business
We are not currently profitable and may not become profitable.
According to the unaudited pro forma consolidated financial statements of the Company included in Exhibit 99.1 to this Form 8-K, at December 31, 2012, the combined companies had $862 in cash on hand and an accumulated deficit of $53, 0 49 and only generated $9,500 in revenues. In their report for the fiscal year ended September 30, 2012, the auditors of Pan Asia have expressed that there is substantial doubt as to Pan Asia’s ability to continue as a going concern. We expect that the Company will incur substantial losses for the foreseeable future and may never become profitable. We also expect to continue to incur significant operating and capital expenditures for the next several years and anticipate that our expenses will increase substantially in the foreseeable future. We also expect to experience negative cash flow for the foreseeable future as we fund our operating losses and capital expenditures. As a result, we will need to generate significant revenues in order to achieve and maintain profitability. We may not be able to generate these revenues or achieve profitability in the future. Our failure to achieve or maintain profitability could negatively impact the value of our common stock.
We are subject to all of the complications and difficulties associated with new enterprises.
The Company’s operating subsidiary, Pan Asia, was incorporated on July 13, 2012. We have a limited history upon which an evaluation of our prospects and future performance can be made. Our proposed operations are subject to all business risks associated with new enterprises. The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the expansion of a business operation in a competitive industry, and the continued development of projects, technology and a corresponding customer base. There is a possibility that we could sustain losses in the future, and there are no assurances that we will ever operate profitably.
We are focused on “green” initiatives and while our management believes that it can implement our business plan, attract highly talented personnel and develop a market for its products and services, our plan of operations are subject to changing needs of target customers, market conditions and various other factors out of our control. For these and other reasons, the purchase of our common stock should only be made by persons who can afford to lose their entire investment.
The electric power generation industry is subject to significant technological advancements that may impact our business model
The electricity industry is undergoing transformative change. Technological advancements such as energy storage and distributed generation may change the nature of energy generation and delivery. These changes may materially affect our business model as an independent power producer and our ability to compete with new energy generation and delivery business models.
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Weather and climate related incidents and other natural disasters could materially affect our financial condition and results of operations.
Weather-related incidents, climate factors and other natural disasters, including storms, wildfires and earthquakes and the annual monsoon rains in India, can disrupt the generation and transmission of electricity, and can seriously damage the infrastructure necessary to deliver power to customers. These events can lead to lost revenues and increased expenses, including higher maintenance and repair costs. They can also result in contractual penalties and disallowances, particularly if we encounter difficulties in restoring power to our customers. These occurrences could materially affect our business, financial condition and results of operations, and the inability to restore power to our customers could also materially damage the business reputation of the Company. In addition, renewable power generation projects are subject to weather and climate conditions that impact positively and negatively the amount of power generated, such as for solar and hydro projects. Renewable power project feasibility is assessed based on historic patterns of such factors as site-specific solar irradiation or water flows, but these factors can vary significantly from year to year. Significant deviations of such natural phenomena from levels predicted based on historical data could have a material adverse impact on project power output and, hence, on revenues and the results of operations. Extended deviations from normal of such factors could negatively impact our liquidity and solvency.
State-owned power distribution companies in India are responsible for power transmission and distribution; therefore, we are reliant on them to deliver power to our customers.
Power distribution in India is undertaken by state-owned electricity distribution companies. Many are heavily in debt and hard pressed to maintain their distribution grids at a high level of reliability. Whether we sell power under a contract to the government or directly to a private electricity buyer, we are reliant on the state-owned electricity distribution companies to deliver our power. If they are unable to undertake distribution we may suffer revenue losses and we may be unable to recover those losses from the distribution company or the collection period may be delayed for an extended period of time. Since our power generation projects are a capital intensive business financed to a significant degree by debt, any losses in revenue or delays in collection would result in significant financial distress for the company and have a material adverse impact on our liquidity and solvency.
The generation, transmission and distribution of electricity are dangerous and involve inherent risks of damage to private property and injury to employees and the general public.
Electricity is dangerous for employees and the general public should they come in contact with power lines or electrical equipment. Injuries and property damage caused by such contact can subject to liability that, despite the existence of insurance coverage, can be significant. Such penalties and liabilities could be significant and can be difficult to predict. The range of possible penalties and liabilities includes amounts that could materially affect our liquidity and results of operations.
As a capital intensive company, we rely on access to the capital markets. If we are unable to access the capital markets or the cost of financing was to substantially increase, our liquidity and operations would be materially affected.
Our power and infrastructure projects are reliant on access to the capital markets, include both the markets for debt and equity. Electric power generation projects for renewable energy are typically financed with a significant amount of debt as well as equity. If we are unable to secure project debt on assumed terms our projects may not be viable. In addition, project debt funding is frequently sourced from international lenders who, from time to time, may adjust their desired exposure or terms for lending to projects in India. Market disruptions out of our control could have a material adverse impact on our ability to access such funding.
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Our operations are subject to foreign currency risk.
To a significant degree, the Company is focusing its efforts on various projects in India. These projects will typically generate revenue in India rupees. The Indian rupee historically has been subject to significant fluctuations in its value compared to other currencies over time. Any depreciation in the Indian rupee would result in a decrease in our reported revenues, since the Company reports in United States dollars. In addition, while our projects will typically generate revenue in Indian rupees, our project debt funding, whether for infrastructure or power generation projects, may be denominated in a currency other than the Indian rupee, such as United States dollars or Euros; therefore, we will face a currency mismatch between revenues and the debt funding obligations we undertake to finance the assets that generate our revenues. While hedging instruments are available to mitigate currency mismatching risks, hedge instruments are often expensive and also are often unable to offset currency risk with 100% effectiveness. Therefore, significant currency movements against our liability position and/or hedging ineffectiveness could have a material adverse impact on our ability to service our debts and to maintain our liquidity and solvency.
We are dependent on Bharat Vasandani, our Chairman and sole executive officer. The loss of Mr. Vasandani would have a material adverse effect on our business.
Our future success depends to a significant extent on Bharat Vasandani and his skills, experience and efforts. We face intense competition for qualified individuals from numerous companies that offer similar services. The loss of Mr. Vasandani could harm our business and might significantly delay or prevent the achievement of our business objectives.
As our business grows, we will need to attract additional employees which we might not be able to do.
In order to grow and implement our business plan, we would need to add managerial talent to support our business plan. There is no guarantee that we will be successful in adding such managerial talent.
We may not be able to compete successfully with current and future competitors.
The Company has many potential competitors in the market for environmentally sustainable energy and infrastructure products and services. We will compete, in our current and proposed businesses, with other companies, some of which have far greater marketing and financial resources and experience than we do. We cannot guarantee that we will be able to penetrate our intended market and be able to compete profitably, if at all. In addition to established competitors, there is ease of market entry for other companies that choose to compete with us. Effective competition could result in price reductions, reduced margins or have other negative implications, any of which could adversely affect our business and chances for success. Competition is likely to increase significantly as new companies enter the market and current competitors expand their services. Many of these potential competitors are likely to enjoy substantial competitive advantages, including: larger staffs, greater name recognition, larger and established customer bases and substantially greater financial, marketing, technical and other resources. To be competitive, we must respond promptly and effectively to industry dynamics, evolving standards and competitors’ innovations by continuing to enhance our technology, products, services, sales and marketing channels and customer acquisition. Any pricing pressures, reduced margins or loss of market share resulting from increased competition, or our failure to compete effectively, could fatally damage our business and chances for success.
We may not be able to manage our growth effectively.
We must continually implement and improve our products and/or services, operations, operating procedures and quality controls on a timely basis, as well as expand, train, motivate and manage our work force in order to accommodate anticipated growth and compete effectively in our market segments. Successful implementation of our strategy also requires that we establish and manage a competent, dedicated work force and employ additional key employees in corporate management, product design, client service and sales. We can give no assurance that our personnel, systems, procedures and controls will be adequate to support our existing and future operations. If we fail to implement and improve these operations, there could be a material, adverse effect on our business, operating results and financial condition.
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If we do not continually update our services, they may become obsolete and we may not be able to compete with other companies.
We cannot assure you that we will be able to keep pace with advances or that our services and products will not become obsolete. We cannot assure you that competitors will not develop related or similar services and offer them before we do, or do so more successfully, or that they will not develop services and products more effective than any that we have or are developing. If that happens, our business, prospects, results of operations and financial condition will be materially adversely affected.
We have agreed to indemnify our officers and directors against lawsuits to the fullest extent of the law.
We are a Nevada corporation. Nevada law permits the indemnification of officers and directors against expenses incurred in successfully defending against a claim. Nevada law also authorizes Nevada corporations to indemnify their officers and directors against expenses and liabilities incurred because of their being or having been an officer or director. Our organizational documents provide for this indemnification to the fullest extent permitted by law.
We currently do not maintain any insurance coverage. In the event that we are found liable for damage or other losses, we would incur substantial and protracted losses in paying any such claims or judgments. We have not maintained liability insurance in the past, but intend to acquire such coverage immediately upon resources becoming available. There is no guarantee that we can secure such coverage or that any insurance coverage would protect us from any damages or loss claims filed against it.
If we engage in any acquisition, we will incur a variety of costs and may never realize the anticipated benefits of the acquisition.
We may attempt to acquire businesses, technologies, services or products or license technologies that we believe are a strategic fit with our business. We have limited experience in identifying acquisition targets, and successfully completing and integrating any acquired businesses, technologies, services or products into our current infrastructure. The process of integrating any acquired business, technology, service or product may result in unforeseen operating difficulties and expenditures and may divert significant management attention from our ongoing business operations. As a result, we will incur a variety of costs in connection with an acquisition and may never realize our anticipated benefits.
If we fail to establish and maintain an effective system of internal control, we may not be able to report our financial results accurately or to prevent fraud. Any inability to report and file our financial results accurately and timely could harm our reputation and adversely impact the trading price of our common stock.
Effective internal control is necessary for us to provide reliable financial reports and prevent fraud. If we cannot provide reliable financial reports or prevent fraud, we may not be able to manage our business as effectively as we would if an effective control environment existed, and our business and reputation with investors may be harmed. As a result, our small size and any current internal control deficiencies may adversely affect our financial condition, results of operation and access to capital. We have not performed an in-depth analysis to determine if historical un-discovered failures of internal controls exist, and may in the future discover areas of our internal control that need improvement.
Public company compliance may make it more difficult to attract and retain officers and directors.
The Sarbanes-Oxley Act and new rules subsequently implemented by the SEC have required changes in corporate governance practices of public companies. As a public company, we expect these new rules and regulations to increase our compliance costs in 2013 and beyond and to make certain activities more time consuming and costly. As a public company, we also expect that these new rules and regulations may make it more difficult and expensive for us to obtain director and officer liability insurance in the future and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers.
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Compliance with changing regulation of corporate governance and public disclosure, and our management’s inexperience with such regulations will result in additional expenses and creates a risk of non-compliance.
Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and related SEC regulations, have created uncertainty for public companies and significantly increased the costs and risks associated with accessing the public markets and public reporting. Our management team expects to invest significant management time and financial resources to comply with both existing and evolving standards for public companies, which will lead to increased general and administrative expenses and a diversion of management time and attention from revenue generating activities to compliance activities. Management’s inexperience may cause us to fall out of compliance with applicable regulatory requirements, which could lead to enforcement action against us and a negative impact on our stock price.
Risks Relating to Ownership of Our Common Stock
Our Series B Preferred Stock has 80% voting rights which substantially dilutes and essentially renders the voting power of our Common Stock meaningless. This may inhibit potential acquisition bids and adversely affect the market price for our Common Stock.
Our Articles of Incorporation provides our Board of Directors with the authority to issue up to 25,000,000 shares of “blank check” preferred stock and to determine or alter the rights, preferences, privileges and restrictions granted to or imported upon these shares without further vote or action by our stockholders. As of the date of this Form 8-K, there were an aggregate of 2,250,000 shares of Series A Convertible Preferred Stock, 100 shares of Series B Non-Convertible Preferred Stock and 4,800,000 shares of Series C Convertible Preferred Stock designated and outstanding. The outstanding shares of Series B Preferred Stock shall vote together with the shares of Common Stock and other voting securities of the Company as a single class and, regardless of the number of shares of Series B Preferred Stock outstanding and as long as at least one of such shares of Series B Preferred Stock is outstanding, shall represent 80% of all votes entitled to be voted at any annual or special meeting of stockholders of the Company or action by written consent of stockholders. Each outstanding share of the Series B Non-Convertible Preferred Stock shall represent its proportionate share of the 80% which is allocated to the outstanding shares of Series B Preferred Stock.
The 80% voting rights of the Series B Preferred Stock substantially dilutes and essentially renders the voting power of our Common Stock meaningless. According, the 80% voting power of our Series B Preferred Stock could delay or prevent a change in control transaction without further action by our stockholders. As a result, the market price of our Common Stock may be adversely affected. In addition, our Series A Preferred Stock and Series C Preferred Stock have preference over our Common Stock with respect to the payment of dividends or upon our liquidation, dissolution or winding up. The voting power of our Series B Preferred Stock and liquidation preference of our Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock could adversely affect the market price of our Common Stock.
There has not historically been an active market for the Company’s common stock, and we cannot assure you that an active trading market will develop for the Company’s common stock.
Historically, there has a very limited trading market for the Company’s common stock with limited or no volume and thus the Company cannot accurately obtain an accurate bid or ask price for a share of its common stock. Any investor who purchases the Company’s common stock is not likely to find any liquid trading market for the common stock and there can be no assurance that any liquid trading market will ever develop, or if developed, be maintained. Due to the lack of a trading market for our securities, investors may have difficulty selling any shares they purchase.
Any trading market that may develop in the future for our common stock will most likely be very volatile; and numerous factors beyond our control may have a significant effect on the market.
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Our common stock is deemed a “penny stock,” which could make it more difficult for our investors to sell their shares.
The Company’s common stock is subject to the “penny stock” rules adopted under Section 15(g) of the Exchange Act. The “penny stock” rules generally apply to companies whose common stock is not listed on The NASDAQ Stock Market or other national securities exchange or automated quotation system sponsored by a registered national securities association with certain listing standards as set forth under Rule 3a51-1 of the Exchange Act, other than companies that have a sales price of $5.00 or more for its common stock (excluding any broker or dealer commission, commission equivalent, mark-up or mark-down), had average revenue of at least $6,000,000 for the last three years or that have tangible net worth of at least $5,000,000 ($2,000,000 if the company has been operating for three or more years). These rules require, among other things, that brokers who trade penny stock to persons other than established customers complete certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances. Many brokers have decided not to trade penny stocks because of the requirements of the penny stock rules and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited. If we remain subject to the penny stock rules for any significant period, it could have an adverse effect on the market, if any, for our securities and investors will find it more difficult to dispose of our securities.
The price of our shares of common stock in the future may be volatile.
If an active market ever develops for our common stock, of which no assurances can be given, the market price of our common stock will likely be volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including: technological innovations or new products and services by us or our competitors; additions or departures of key personnel; sales of our common stock; our ability to integrate operations, technology, products and services; our ability to execute our business plan; operating results below expectations; loss of any strategic relationship; industry developments; economic and other external factors; and period-to-period fluctuations in our financial results. Because we have a very limited operating history with limited revenues to date, you may consider any one of these factors to be material. Our stock price may fluctuate widely as a result of any of the above. In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.
We have not paid dividends on our common stock in the past and do not expect to pay dividends in the future. Any return on investment may be limited to the value of our common stock.
We have never paid cash dividends on our common stock and do not anticipate doing so in the foreseeable future. The payment of dividends on our common stock will depend on earnings, financial condition and other business and economic factors affecting us at such time as our board of directors may consider relevant. If we do not pay dividends, our common stock may be less valuable because a return on your investment will only occur if our stock price appreciates.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion and analysis of the financial condition and results of operations of the Company for the year ended September 30, 2012 and for the three month period ended December 31, 2012 and should be read in conjunction with the Selected Consolidated Financial Data, the financial statements, and the notes to those financial statements that are included elsewhere in this Current Report on Form 8-K. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Risk Factors, Cautionary Notice Regarding Forward-Looking Statements and Business sections in this Form 8-K. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.
Company Overview
On April 25, 2013, Savvy Business Support, Inc., a Nevada corporation (“Savvy”), entered into a Share Exchange Agreement (the “Share Exchange Agreement”), with Pan Asia Infratech Corp., a Nevada corporation (“Pan Asia”). Pan Asia is a development stage company incorporated in Nevada on July 13, 2012 and its principal business is the development of projects in renewable energy and energy efficiency technology that comprise innovative solutions for basic infrastructure. Pan Asia intends to generate revenue through project consulting and development fees, business advisory services, project management fees on operations of facilities, equity investments in power and infrastructure projects, sales of equipment and operating revenues from power generation or infrastructure projects.
Pursuant to the Share Exchange Agreement, on April 26, 2013, the stockholders of Pan Asia transferred to Savvy an aggregate of 15,000 shares of common stock, no par value, of Pan Asia, constituting 100% of the outstanding capital stock of Pan Asia, in exchange for, on a pro rata basis, an aggregate of 90,000,000 shares of common stock, par value $0.0001 per share (the “Common Stock”), of Savvy (the “Share Exchange”). As a result of the Share Exchange, Pan Asia became a wholly-owned subsidiary of Savvy and Savvy ceased being a shell company (asdefined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)).
On the closing date of the Share Exchange, Brookstone Partners LLC controlled both Savvy and Pan Asia. As a result, the Share Exchange was treated as a combination of entities under common control.
Effective April 26, 2013, the Company amended its Articles of Incorporation with the Secretary of State of Nevada therein changing its name from Savvy Business Support, Inc. to Pan Global, Corp.
On May 2, 2013, the OTCBB symbol of the Company’s Common Stock was changed from SVYB to PGLO.
Unless otherwise defined herein, the terms “Pan Global,” the “Company,” “we,” “us,” “our,” and similar terms shall refer to Pan Global, Corp. and its wholly-owned subsidiary, Pan Asia Infratech Corp., a Nevada corporation.
Plan of Operations
We are investigating business opportunities in the market segments in which we operate, and we intend to pursue these opportunities by securing rights to technologies and projects. These opportunities are identified through our management’s network of contacts in India and around the world.
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During the next three years, we intend to pursue opportunities in the following areas:
● | Energy Efficiency. We have identified significant opportunities in energy efficiency consulting and innovation in India, where energy demand and prices are increasing rapidly. We believe Indian businesses and households are seeking energy solutions that assist can them with increasing the efficiency of their energy usage as well as seeking to adopt innovative green energy technologies that supplement or substitute for their reliance on fossil fuels and traditional grid-based electricity. We seek to provide such solutions to customers through consulting services, project implementation and project management. We envision such solutions to cover areas such as alternative energy technology implementation, building retrofits to reduce energy usage, installation of electrical control system technology and other similar items. |
● | Alternative Energy Projects. We seek to invest in alternative energy projects, such as the development of solar photovoltaic (“PV”) projects, mini-hydro, geothermal and wind energy. Several countries, including India, provide certain electric power generation incentives for the development of these and other alternative energy projects. Pan Global seeks to provide development funding for such projects. We may sell these projects at the time of commissioning or hold them for the long term, depending on the financial return to the Company on a case by case basis. |
● | Infrastructure.The Company also seeks to invest in non-energy infrastructure technology and projects that provide environmentally sustainable solutions in place of conventional technology. We are seeking opportunities to develop projects in the field of agriculture, building technology and water distribution, amongst others. Management believes the Indian agriculture sector is ripe for technologies that significantly reduce the environmental footprint, such as by improving the efficiency of water use and intensity of land use. We believe there are existing technologies in the building sector that are widely used in Europe and North America which significantly reduce carbon footprints and which can be adapted to the Indian market. We also believe there are opportunities in the Indian market for water purification and waste-water treatment. The Company seeks to introduce such technologies in the Indian context. In some cases we may license these technologies from the patentholder. In other cases, the technology is available for general use, so we will seek to develop projects directly. |
Business Model
Our business model is based on three prospective revenue streams: consulting fees; sales of equipment and technology in connection with energy efficiency projects; and revenue from operating projects such as power generation, agricultural operations and other infrastructure related projects. Our revenue from operating projects may be derived from projects in which we hold a majority equity position or where we hold an investment as a minority partner. Generally, we anticipate that our sales will be derived from business and commercial customers, as follows:
1. | Consulting Fees: We are in the process of building an energy efficiency audit and consulting team in India that will conduct energy audits for commercial and other business customers and advise them on how they can implement energy savings technologies to reduce their energy usage. The audit and consulting team may also manage project implementation, equipment procurement and provide installation services. |
2. | Power generation projects: We are investigating opportunities to develop electric power generation projects from renewable energy sources such as solar, mini-hydro, geothermal and wind. While our main focus is on potential projects in India, it is not exclusively so. Within the Indian market there are available various government backed incentives programs, including those which provide direct tariff subsidies as well as market based tariff support through renewable energy credits that can be sold on established trading markets. We intend to pursue both types of opportunities and to assess the project viability on a case by case basis, and to invest in such projects as owner-developers and/or as partners with other developers. Our investments may be made as equity level investments or as mezzanine funding. These projects earn revenue from the sale of power generated and sold to either government owned electricity companies or from the direct sale of power to private buyers. |
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3. | Infrastructure: We are investigating opportunities to develop sustainable projects in the Indian infrastructure industry, including but not limited to, investments in agriculture, the building construction industry and water purification and treatment. We intend to pursue the development of agricultural growing operations using more modern technology and equipment than is currently in use in India. One of the areas we are focusing on is the establishment of greenhouse facilities for growing certain crops, which is a young but growing industry in India. We also intend to identify and pursue other infrastructure related opportunities including in the construction industry, where we seek to introduce sustainable building technologies to the Indian market, and water management technologies to improve water quality and usage efficiency. Some of these opportunities may overlap in one project, such as in the case of water management in the context of greenhouse growing operations. Since this business segment is broad, our revenue from it will be derived in varying ways: |
a. | In the agricultural production component we intend to establish relationships with wholesalers to distribute our produce under a branded label that is characterized by a marketing strategy that establishes us a grower of natural, organic and pesticide free environmentally sustainable premium produce. We may also sell product directly to large retail buyers. |
b. | In the building construction, water management and other component of this segment we expect to generate license revenue and revenue from the sale of equipment and technology. We may also earn revenue, in the case of water management, from operating facilities or distribution of water. Our customers may include commercial businesses, government entities, as well as retail clients. |
Growth Strategy of the Company
Our goal is to establish a rational growth strategy that will maximize shareholder value over time by applying a phased growth strategy. We intend to secure a limited number of consulting engagements in the near term (3-24 months) but to grow this segment over time in line with our personnel growth, since such services are labor and management intensive. We also intend to initially secure a limited number of opportunities in our power generation and infrastructure segments during the next 3-24 months, but such that they can be expanded over time into a pipeline of projects that require commissioning over a period of several years.
We believe a phased growth strategy is the most rational way for us to execute our vision, as our opportunities, particularly in power generation and infrastructure, while they may be small projects, still entail multi-million dollar investment outlays per individual project. Our projects involve complexities, such as coordinating engineering, procurement and construction activities; therefore, building projects in phases and staging growth over a period of years enables management to reduce execution and financing risk, while the company bolsters its management resources to cope with our growth. We believe a phased growth strategy will also help the Company build a growing and more stable revenue base than an alternative approach that could involve attempts to execute opportunities that are too difficult to manage and finance given the current scope of our resources.
Results of Operations of Pan Asia
Pan Asia’s fiscal year end is September 30.
At September 30, 2012, Pan Asia had no assets and $1,100 in total liabilities consisting of $1,100 owed to the Treasurer of Pan Asia for expenses paid by the Treasurer on behalf of Pan Asia. At December 31, 2012, Pan Asia had $6,362 in total assets, consisting of $862 in cash and $5,500 in prepaid expenses. At December 31, 2012, Pan Asia had $1,125 in total liabilities, consisting of $25 in accounts payable and accrued liabilities and $1,100 owed to the Treasurer of Pan Asia for expenses.
From July 13, 2012 (inception) to September 30, 2012, Pan Asia did not generate any revenues. For the three months ended December 31, 2012, Pan Asia had $9,500 in revenues. The increase in revenues was due to a consulting engagement for evaluating solar technology.
From July 13, 2012 (inception) to September 30, 2012, Pan Asia had $1,100 in total expenses, consisting of $1,050 in general and administrative expenses and $50 in professional fees. For the three months ended December 31, 2012, Pan Asia had $8,663 in total expenses, consisting of $163 in general and administrative expenses, $1,000 in management fees and $7,500 in professional fees. The increase in management fees and professional fees was due to higher expenses for audit, accounting and legal services as Pan Asia ramped up its startup operations.
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Liquidity and Capital Resources
At December 31, 2012, Pan Asia had $862 in cash.
We believe that our current levels of cash will not be sufficient to meet our liquidity needs for the next 12 months. We will need additional cash resources in the future if we pursue opportunities for investment, acquisition, strategic cooperation or other similar actions. To satisfy future cash requirements, we expect to seek funding through the issuance of debt or equity securities and the obtaining of a credit facility. Any future issuance of equity securities could cause dilution for our shareholders. Any incurrence of indebtedness will increase our debt service obligations and may cause us to be subject to restrictive operating and financial covenants. It is possible that financing may be available to us in amounts or on terms that are not favorable to the Company or not available at all.
Our operations are subject to foreign currency risk.
To a significant degree the Company is focusing its efforts on various projects in India. These projects will typically generate revenue in India rupees. The Indian rupee historically has been subject to significant fluctuations in its value compared to other currencies over time. Any depreciation in the Indian rupee would result in a decrease in our reported revenues, since the Company reports in United States dollars. In addition, while our projects will typically generate revenue in Indian rupees, our project debt funding, whether for infrastructure or power generation projects, may be denominated in a currency other than the Indian rupee, such as United States dollars or Euros; therefore, we will face a currency mismatch between revenues and the debt funding obligations we undertake to finance the assets that generate our revenues. While hedging instruments are available to mitigate currency mismatching risks, hedge instruments are often expensive and also are often unable to offset currency risk with 100% effectiveness. Therefore, significant currency movements against our liability position and/or hedging ineffectiveness, could have a material adverse impact on our ability to service our debts and to maintain our liquidity and solvency.
Recent Accounting Pronouncements
As of the date of this report, there are no accounting pronouncements that had not yet been adopted by the Company that we believe would have a material impact on our financial statements.
Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with US generally accepted accounting principles 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 and assumptions related to deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
Revenue Recognition
The Company recognizes revenue when persuasive evidence of an arrangement exists, services have been rendered, the sales price is fixed or determinable, and collectability is reasonably assured.
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Quantitative and Qualitative Disclosures about Market Risks
None
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).
PROPERTIES
Our principal executive offices are located at 123 W. Nye Lane, Suite 455, Carson City, Nevada 89706. We rent our offices for $500 per quarter pursuant to a lease agreement, dated February 22, 2013, between our Company and Pinnacle Executive Suites. The lease is for one year and automatically extends for the same period as the initial term upon the same conditions contained in the lease agreement, unless either party notifies the other at least 30 days prior to the expiration date.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning the beneficial ownership of the Company’s Common Stock, Series A Convertible Preferred Stock, Series B Non-Convertible Preferred Stock and Series C Convertible Preferred stock as of the date of this Report by (i) each person known by the Company to be the owner of more than 5% of the outstanding of each of the Company’s Common Stock, Series A Convertible Preferred Stock, Series B Non-Convertible Preferred Stock and Series C Convertible Preferred Stock, (ii) each director, (iii) each named executive officer, and (iv) all directors and executive officers as a group. In general, “beneficial ownership” includes those securities that a stockholder has the power to vote or transfer, and stock options and other rights exercisable or within 60 days. Unless otherwise indicated, the address for each person is c/o Pan Global, Corp., 123 W. Nye Lane, Suite 455, Carson City, Nevada 89706.
Common Stock | Series A Preferred | Series B Preferred | Series C Preferred | |||||||||||||||||||||||||||||
Name and Position | Number of Shares | Percentage of Class(1) | Number of Shares | Percentage of Class (2) | Number of Shares | Percentage of Class(3) | Number of Shares | Percentage of Class) (4) | ||||||||||||||||||||||||
Bharat Vasandani, Chairman, President, CEO, CFO | 30,000,000 | 6.6 | % | 0 | - | 0 | - | 0 | - | |||||||||||||||||||||||
Brookstone Partners, LLC(5) | 380,000,000 | 83.5 | % | - | - | 100 | 100 | % | 1,800,000 | 100 | % | |||||||||||||||||||||
Edward Whitehouse | 1,000 | (6) | * | 2,250,000 | 100 | % | 0 | - | 0 | - | ||||||||||||||||||||||
Directors and Officers as a group (1 person) | 30,000,000 | 6.6 | % | 0 | - | 0 | - | 0 | - |
* | Represents less than 1%. | |
(1) | Based on 455,155,000 shares of Common Stock issued and outstanding as of the date of this Report. |
(2) | Based on 2,250,000 shares of Series A Convertible Preferred Stock issued and outstanding as of the date of this Report. |
(3) | Based on 100 shares of Series B Non-Convertible Preferred Stock issued and outstanding as of the date of this Report. | |
(4) | Based on 1,800,000 shares of Series C Convertible Preferred Stock issued and outstanding as of the date of this Report. Each shares of Series C Convertible Preferred Stock is convertible by the holder therefor for 1 shares of common stock of the Company. |
(5) | Stella Lumawag is the Managing Member of Brookstone Partners, LLC and has voting and dispositive control over Brookstone Partners, LLC. | |
(6) | Excludes an aggregate of 45,000,000 shares of Common Stock issuable upon the conversion of 2,250,000 shares of Series A Preferred Stock held by Mr. Whitehouse.Each share of Series A Preferred Stock is convertible into 20 shares of Common Stock of the Company;provided, however, that the holder is prohibited from converting such number of shares of Series A Preferred Stock that would result in the stockholder beneficially owning more than 9.9% of the Common Stock of the Company. |
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DIRECTORS AND EXECUTIVE OFFICERS
As previously reported by Savvy in its Form 10-Q for the quarter ended December 31, 2012, on February 12, 2013, Virginia K. Sourlis resigned from the Board of Directors of Savvy and as the President and Chief Executive Officer of Savvy, effective immediately. Ms. Sourlis’ resignation from Savvy was not due to or a result of any disagreements with the Company.
On February 12, 2013, the Board of Directors Savvy appointed Mr. Bharat Vasandani as a member and Chairman of the Board of Directors of Savvy until the next annual meeting of stockholders or until his successor is duly elected and qualified. The Board also appointed Mr. Vasandani to serve as the President, Chief Executive Officer and Chief Financial Officer of Savvy. Mr. Vasandani will continue as the Chairman of the Board of Directors of the Company and as the President, Chief Executive Officer and Chief Financial Officer of the Company.
The following section contains pertinent information related to the post-Share Exchange composition of our Board of Directors and Officers.
The members of the Board of Directors of the Company hold office for a period of one year or until his/her successor is elected and qualified. The officers of the Company are appointed by our Board of Directors and hold office until their death, resignation or removal from office. A summary of the Company’s directors and executive officers, their ages, positions held, are as follows:
Name | Age |
Directors and Officers | Director Since | |||
Bharat Vasandani | 34 | President, Chairman of the Board, Chief Executive Officer and Chief Financial Officer (Principal Executive Officer) (Principal Financial and | February 12, 2013 |
Business Experience
Bharat Vasandani has been serving as our President, Chairman, Chief Executive Officer and Chief Financial Officer since February 12, 2013. Mr. Vasandani has focused his career on India’s renewable energy and green building sectors. Mr. Vasandani began his career at an Indian plastic manufacturing company, called Jyotika Industries from October 2001 to September 2003. In November 2005, he joined D’Essence Consulting based in Mumbai, India where he was part of a team that assisted private and public companies on business strategy and turnarounds. From November 2006 to April 2009, he served a similar role with TresVista Financial Services in Mumbai, India, providing strategic and operation advice to both Indian and international companies on valuation, equity investments and M&A.
Since 2009, Mr. Vasandani has been specializing in the renewable energy sector, advising domestic and international firms on business development opportunities and market entry. He was a co-founder of Venus Finvest Services in September, 2009, which focused on advisory services in the renewable energy sector. At Venus, Mr. Vasandani assisted foreign EPC and development firms find Indian partners, as well as helping to establish relationships in the reverse direction. He is a frequent speaker at solar industry conferences across India.
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In September 2011, Mr. Vasandani joined OmniMedia Group, Spain, as Head of Strategy and Editorial, with a mandate to revive the power media brand Energetica India and introduce EcoConstruction brand in the Indian market.
The Company believes that Mr. Vasandani’s contacts and expertise in India’s renewable energy and green building sectors as well as his experience in business strategy and turnarounds as disclosed above renders Mr. Vasandani suitable to serve as a member of the Company’s board of directors in light of the Company’s business and structure.
Mr. Vasandani obtained his Bachelor of Engineering, Biomedical, from the University of Mumbai in 2001. In 2005, he completed his Masters, International Business at ESC-Grenoble, France.
Involvement in Certain Legal Proceedings
None of our current executive officers, directors or named consultants has, during the past ten years:
(a) | Had any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; |
(b) | Been convicted in a criminal proceeding or subject to a pending criminal proceeding; |
(c) | Been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities, futures, commodities or banking activities; and |
(d) | Been found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated. |
Family Relationships
None
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who beneficially own more than 10% of a registered class of our equity securities to file with the Securities and Exchange Commission initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common shares and other equity securities, on Forms 3, 4 and 5, respectively. Executive officers, directors and greater than 10% shareholders are required by the Securities and Exchange Commission regulations to furnish us with copies of all Section 16(a) reports they file. Based on our review of the copies of such forms received by us, and to the best of our knowledge, all executive officers, directors and greater than 10% shareholders filed the required reports in a timely manner.
Employment Agreements
None
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Audit, Nominating and Compensation Committees
Our Board of Directors has not formally established separate audit, nominating or compensation committees though they perform many of the functions that would otherwise be delegated to such committees. Currently, our Board of Directors believes that the cost of establishing such committees, including the costs necessary to recruit and retain qualified independent directors to serve on our Board of Directors and such committees and the legal costs to properly form and document the authority, policies and procedures of such committees are not justified under our current circumstances. However, we anticipate that our Board of Directors will seek qualified independent directors to serve on the Board and ultimately form standing nominating and compensation committees and nominate other directors to serve on its audit committee.
Code of Ethics
The Company has adopted a Code of Ethics and a Code of Business Conduct.
EXECUTIVE COMPENSATION
Included by reference from Savvy’s Form 10-K for the fiscal year ended September 30, 2012.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Certain Relationships and Related Transactions
As of December 31, 2012, the Company owed Virginia Sourlis, the Company’s former President, Chairman and majority stockholder, and the owner of the Sourlis Law Firm, $30,233 consisting of advances that Ms. Sourlis made on behalf of the Company in the form of direct payments to certain vendors and accrued legal fees owed to the Sourlis Law Firm. There is no written agreement or other material terms or arrangements relating to the advances that Ms. Sourlis made on behalf of the Company.
On November 9, 2012, the Company redeemed an aggregate of 2,700,000 shares of Common Stock of the Company held by Virginia K. Sourlis for $189,000.
On February 12, 2013, the Company redeemed an aggregate of 825,000 shares of Common Stock of the Company held by Virginia K. Sourlis for $50,000.
On February 22, 2013, the Company redeemed an aggregate of 275,000 shares of Common Stock of the Company held by Virginia K. Sourlis for $25,000.
On April 30, 2013, the Company redeemed an aggregate of 1,100,000 shares of Common Stock of the Company held by Virginia K. Sourlis for $41,092.
Other than the foregoing, there have been no related-party transactions, or any other transactions or relationships required to be disclosed pursuant to Item 404 of Regulation S-K.
Director Independence
Our determination of independence of our directors is made using the definition of “independent director” contained under NASDAQ Marketplace Rule 4200(a)(15), even though such definitions do not currently apply to us because we are not listed on NASDAQ. None of the members of our Board of Directors qualify as independent pursuant to this Rule.
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LEGAL PROCEEDINGS
We are not currently a party to any legal proceedings nor do we have knowledge of any pending or threatened legal claims.
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Historically, there has been is a limited market for the Company’s common stock and we do not know if that will continue.
Savvy’s common stock was approved for trading on the OTC Bulletin Board on January 6, 2011 under the symbol, “SVYB.” Since then it has only traded sporadically and with only limited and minimal interest by market makers.
On May 2, 2013, the OTCBB symbol for the Company’s Common Stock was changed to “PGLO.”
The following table reflects the high and low prices of Savvy’s Common Stock during each quarter during the last two fiscal years while Savvy was quoted on the OTCBB. As of September 30, 2012, the Company had six market makers.
High ($) | Low ($) | ||||||
2011 | |||||||
2nd Quarter (March 31, 2011) | $ | 2.00 | $ | 2.00 | |||
3rd Quarter (June 30, 2011) | $ | 2.00 | $ | 2.00 | |||
4th Quarter (September 30, 2011) | $ | 2.00 | $ | 2.00 | |||
2012 | |||||||
1stQuarter (December 31, 2011) | $ | 2.00 | $ | 2.00 | |||
2ndQuarter (March 31, 2012) | $ | 2.00 | $ | 2.00 | |||
3rdQuarter (June 30, 2012) | $ | 2.00 | $ | 2.00 | |||
4thQuarter (September 30, 2012) | $ | 2.00 | $ | 2.00 |
The Securities and Exchange Commission has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a 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 quotation 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 to such duties or other requirements of 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 Securities and Exchange Commission 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 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) monthly account statements 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 to transactions involving penny stocks, and a signed and dated copy of a suitably written statement.
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These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our stock if it becomes subject to these penny stock rules. Therefore, if our common stock becomes subject to the penny stock rules, stockholders may have difficulty selling those securities.
Stock Transfer Agent
VStock Transfer, LLC
77 Spruce Street, Suite 201
Cedarhurst, NY 11516
Phone: 212-828-8436
Toll-Free: 855-9VSTOCK
Fax: 646-536-3179
www.VStockTransfer.com
Holders
As of the date of this filing, there were 34 record holders of 455,155,000 outstanding shares of the Company’s Common Stock, one record holder of 2,250,000 outstanding shares of the Company’s Series A Preferred Stock, one record holder of 100 shares of outstanding the Company’s Series B Preferred Stock and one record holder of 1,800,000 outstanding shares the Company’s Series C Preferred Stock.
General
As previously reported by Savvy on a Form 8-K filed on April 25, 2013, on April 19, 2013, Savvy amended its Articles of Incorporation with the Secretary of State of Nevada therein increasing its authorized common stock from 100,000,000 to 550,000,000 shares and authorized “blank check” preferred stock from 10,000,000 to 25,000,000 shares.
Common Stock
Pursuant to our bylaws, our common stock is entitled to one vote per share on all matters submitted to a vote of the stockholders, including the election of directors. Except as otherwise required by law or provided in any resolution adopted by our board of directors with respect to any series of preferred stock, the holders of our common stock possess all voting power. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all shares of our Common Stock that are present in person or represented by proxy, subject to any voting rights granted to holders of any preferred stock. Holders of our Common Stock representing one-percent (1%) of our capital stock issued, outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of our stockholders. A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to our Articles of Incorporation. Our Articles of Incorporation do not provide for cumulative voting in the election of directors.
Subject to any preferential rights of any outstanding series of preferred stock created by our board of directors from time to time, the holders of shares of our Common Stock will be entitled to such cash dividends as may be declared from time to time by our board of directors from funds available therefore.
Subject to any preferential rights of any outstanding series of preferred stock created from time to time by our board of directors, upon liquidation, dissolution or winding up of our company, the holders of shares of our Common Stock will be entitled to receive, on a pro rata basis, all assets of our company available for distribution to such holders.
In the event of any merger or consolidation of our company with or into another company in connection with which shares of our Common Stock are converted into or exchangeable for shares of stock, other securities or property (including cash), all holders of our Common Stock will be entitled to receive the same kind and amount of shares of stock and other securities and property (including cash), on a pro rata basis.
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Holders of our common stock have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to our Common Stock.
Preferred Stock
Our Articles of Incorporation, as amended, authorizes our board of directors to issue up to 25,000,000 shares of preferred stock in one or more designated series, each of which shall be so designated as to distinguish the shares of each series of preferred stock from the shares of all other series and classes. Our board of directors is authorized, without stockholders’ approval, within any limitations prescribed by law and our Articles of Incorporation, to fix and determine the designations, rights, qualifications, preferences, limitations and terms of the shares of any series of preferred stock including but not limited to the following:
(a) | the rate of dividend, the time of payment of dividends, whether dividends are cumulative, and the date from which any dividends shall accrue; |
(b) | whether shares may be redeemed, and, if so, the redemption price and the terms and conditions of redemption; |
(c) | the amount payable upon shares of preferred stock in the event of voluntary or involuntary liquidation; |
(d) | sinking fund or other provisions, if any, for the redemption or purchase of shares of preferred stock; |
(e) | the terms and conditions on which shares of preferred stock may be converted, if the shares of any series are issued with the privilege of conversion; |
(f) | voting powers, if any, provided that if any of the preferred stock or series thereof shall have voting rights, such preferred stock or series shall vote only on a share for share basis with our Common Stock on any matter, including but not limited to the election of directors, for which such preferred stock or series has such rights; and |
(g) | subject to the above, such other terms, qualifications, privileges, limitations, options, restrictions, and special or relative rights and preferences, if any, of shares or such series as our board of directors may, at the time so acting, lawfully fix and determine under the laws of the State of Nevada. |
Series A Convertible Preferred Stock
On September 24, 2012, our Board designated 4,500,000 shares of Preferred Stock as “Series A Convertible Preferred Stock” and we filed a Certificate of Designations with the Secretary of State of the State of Nevada therein designating and establish the class of Series A Convertible Preferred Stock. On September 25, 2012, the Company sold 4,500,000 shares of Series A Convertible Preferred Stock to the Selling Stockholders for an aggregate purchase price of $450 under Section 4(2) under the Securities Act.
Please see Savvy’s Form 10-K for the fiscal year ended September 30, 2012 for a summary of the Certificate of Designations of the Series A Convertible Preferred Stock.
Series B Non- Convertible Preferred Stock
On November 8, 2012, our Board designated 100 shares of Preferred Stock as “Series B Non-Convertible Preferred Stock” and we filed a Certificate of Designations with the Secretary of State of the State of Nevada therein designating and establish the class of Series B Non-Convertible Preferred Stock. On November 8, 2012, the Company sold 100 shares of Series B Non-Convertible Preferred Stock to Virginia K. Sourlis for an aggregate purchase price of $10 under Section 4(2) under the Securities Act.
As previously reported by Savvy on a Form 8-K filed on February 25, 2013, on February 22, 2013, Brookstone Partners LLC and Virginia Sourlis entered into a Stock Purchase Agreement pursuant to which Brookstone Partners LLC purchased Ms. Sourlis’ 100 shares of Series B Non-Convertible Preferred Stock of Savvy in consideration for $1,000, resulting in a change of control of the Company.
Stella Lumawag has voting and dispositive control over Brookstone Partners, LLC.
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Please see Savvy’s Form 10-K for the fiscal year ended September 30, 2012 for a summary of the Certificate of Designations of the Series B Non-Convertible Preferred Stock.
Series C Convertible Preferred Stock
On April 26, 2013, the Company filed a Certificate of Designations with the Secretary of State of Nevada therein designating 5,000,000 shares of the Company’s authorized preferred stock as Series C Preferred Stock, effective April 29, 2013.Each holder of Series C Preferred Stock shall have the right, at such holder’s option, at any time or from time to time from and after the day immediately following the date the Series C Preferred Stock is first issued, to convert each share of Series C Preferred Stock into One (1) fully-paid and non-assessable shares of common stock. Generally, the Series C Preferred Stock shall, with respect to rights on liquidation, winding up and dissolution, rank senior to (i) all classes of common stock and (ii) any class or series of capital stock of the Company hereafter created (unless, with the consent of the holder(s) of Series C Preferred Stock). Except as otherwise provided by the Nevada Business Corporation Act, in the event of any voluntary or involuntary liquidation, dissolution, or winding up of the Company, the holders of shares of the Series C Preferred Stock then outstanding shall be entitled to be paid, out of the assets of the Company available for distribution to its stockholders, whether from capital, surplus or earnings, an amount equal to one dollar ($1.00) per share.
The Holders of shares of Series C Convertible Preferred Stock shall not be entitled to receive any dividends except a one-time special dividend of $0.001 per each outstanding share of Series C Convertible Preferred Stock payable by the Company to the Holders thereof no earlier than the thirtieth (30th) day after the date of issuance of the Series C Convertible Preferred Stock to such Holders but no later than the first anniversary date of the date of issuance of the Series C Convertible Preferred Stock to such Holders, subject to the approval of the Holders of the Company’s senior securities and satisfaction of the Nevada Revised Statutes.
The holders of the Series C Preferred Stockshall vote only on a share for share basis with our common stock on any matter, including but not limited to, the election of directors, name changes, increases in the authorized common shares and for which such preferred stock or series has such rights and as otherwise provided by the Nevada Revised Statutes. To the extent that under the Nevada Revised Statutes the vote of the of the Series C Preferred Stock, voting separately as a class or series, as applicable, is required to authorize a given action of the Company, the affirmative vote or consent of the holders of at least a majority of the shares of the Series C Preferred Stock represented at a duly held meeting at which a quorum is present or by written consent of a majority of the shares of Series C Preferred Stock (except as otherwise may be required under the Nevada Revised Statutes ) shall constitute the approval of such action by the class. To the extent that under the Nevada Revised Statutes, Holders of the Series C Preferred Stock are entitled to vote on a matter with Holders of Common Stock, voting together as one class, each share of Series C Convertible Preferred Stock shall be entitled to one (1) vote.
Dividend Policy
We have never paid or declared dividends on our securities. Pursuant to the Certificate of Designation for our Series C Preferred Stock (effective on April 29, 2013), the holders of shares of Series C Preferred Stock are entitled to a one-time special dividend of $0.001 per each outstanding share of Series C Preferred Stock payable by the Company to the holders thereof no earlier than the thirtieth (30th) day after the date of issuance of the Series C Preferred Stock to such holders but no later than the first anniversary date of the date of issuance of the Series C Preferred Stock to such holders, subject to the approval of the holders of the Company’s senior securities and satisfaction of the Nevada Revised Statutes.The payment of cash dividends, if any, in the future is within the discretion of our Board and will depend upon our earnings, our capital requirements, financial condition and other relevant factors.Other than the one-time dividend four our outstanding Series C Preferred Stock, we do not foresee paying any dividends on our outstanding securities; but, rather,to retain any future earnings for use in our business.
Share Purchase Warrants
We have not issued and do not have outstanding any warrants to purchase shares of our Common Stock.
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Options
We have not issued and do not have outstanding any options to purchase shares of our Common Stock
Convertible Securities
Other than the Series A Convertible Preferred Stock and Series C Preferred Stock described above, we have not issued nor are there any outstanding securities convertible into shares of our Common Stock or any rights convertible or exchangeable into shares of our Common Stock.
Rule 144
Prior to the Share Exchange, Savvy was considered to be a shell company under the Exchange Act. Because Savvy Company was considered a shell company, the securities sold in previous offerings can only be resold through registration under the Securities Act; Section 4(1) of the Securities Act, if available, for non-affiliates; or by meeting the conditions of Rule 144(i) of the Securities Act. There are currently no obligations of the Company to register any common stock under the Securities Act nor are there any shares available for resale under Rule 144(i).
Recent Sales of Unregistered Securities
On September 25, 2012, we sold 4,500,000 shares of Series A Convertible Preferred Stock for $0.0001 per share generating proceeds of $450.00.
On November 8, 2012, we sold 100 shares of Series B Non-Convertible Preferred Stock for an aggregate purchase price of $10.00.
On November 8, 2012, the Company sold a five month promissory note in the principal amount of $193,000 bearing interest at the rate of 8% per annum. The Company may prepay the outstanding principal and interest of the promissory note without penalty.
On February 12, 2013, the Company sold a promissory note in the principal amount of $50,000 bearing interest at the rate of 8% per annum and maturing on the one year anniversary of the date of issuance. The Company may prepay the outstanding principal and interest of the promissory note without penalty.
On February 22, 2013, the Company sold a promissory note in the principal amount of $25,000 bearing interest at the rate of 8% per annum and maturing on the one year anniversary of the date of issuance. The Company may prepay the outstanding principal and interest of the promissory note without penalty.
On April 30, 2013, the Company sold a promissory note in the principal amount of $50,000 bearing interest at the rate of 8% per annum and maturing on the one year anniversary of the date of issuance. The Company may prepay the outstanding principal and interest of the promissory note without penalty.
The above securities qualified for exemption under Section 4(2) of the Securities Act since the issuance securities by us did not involve a public offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of securities offered. The Company did not undertake an offering in which we sold a high number of securities to a high number of investors. In addition, these stockholders had the necessary investment intent as required by Section 4(2) since they agreed to and received share certificates bearing a legend stating that such securities are restricted pursuant to Rule 144 of the Securities Act. This restriction ensures that these securities would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, the Company has met the requirements to qualify for exemption under Section 4(2) of the Securities Act for this transaction.
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On April 29, 2013, the Company issued an aggregate of 1,800,000 shares of Series C Preferred Stock to Brookstone Partners, LLC (“Brookstone”) pursuant to a Share Exchange Agreement, dated April 29, 2013, by and between the Company and Brookstone. Pursuant to the Share Exchange Agreement, Brookstone exchanged an aggregate of 180,000,000 shares of Common Stock held by Brookstone in exchange for the shares of Series C Preferred Stock on a one-for-100 basis. Stella Lumawag is the Managing Member of Brookstone and has voting and dispositive control of the shares held by Brookstone. The Company issued the shares of Series C Preferred Stock to Brookstone under Section 3(a)(9) of the Securities Act of 1933, as amended, due to the fact that (i) the Company is the same issuer of the Common Stock and the Series C Preferred Stock, (ii) no additional consideration was given to Brookstone for the exchange, (iii) Brookstone was an existing security holder of the Company and (iv) the Company did not pay any commission or remuneration for the exchange.
Upon the consummation of the Share Exchange, on April 26, 2013, the Company issued an aggregate of 90 million (90,000,000) shares of Common Stock to the stockholders of Pan Asia in consideration for an aggregate of 15,000 shares of common stock of Pan Asia (constituting 100% of the outstanding shares of common stock of Pan Asia). The Company issued such shares of Common Stock pursuant to the exemption under Section 4(2) and Regulation S promulgated under the Securities Act due to the fact that issuance did not involve a public offering of securities and none of the recipients where U.S. Persons under Regulation S.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
We have agreed to indemnify our officers and directors against lawsuits to the fullest extent of the law.
We are a Nevada corporation. Nevada law permits the indemnification of officers and directors against expenses incurred in successfully defending against a claim. Nevada law also authorizes Nevada corporations to indemnify their officers and directors against expenses and liabilities incurred because of their being or having been an officer or director. Our organizational documents provide for this indemnification to the fullest extent permitted by law.
We currently do not maintain any insurance coverage. In the event that we are found liable for damage or other losses, we would incur substantial and protracted losses in paying any such claims or judgments. We have not maintained liability insurance in the past, but intend to acquire such coverage immediately upon resources becoming available. There is no guarantee that we can secure such coverage or that any insurance coverage would protect us from any damages or loss claims filed against it.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES
Upon the consummation of the Share Exchange, on April 26, 2013, the Company issued an aggregate of 90 million (90,000,000) shares of Common Stock of the Company to the stockholders of Pan Asia in consideration for an aggregate of 15,000 shares of common stock of Pan Asia (constituting 100% of the outstanding shares of common stock of Pan Asia). The Company issued such shares of Common Stock pursuant to the exemption under Section 4(2) and Regulation S promulgated under the Securities Act due to the fact that issuance did not involve a public offering of securities and none of the recipients where U.S. Persons under Regulation S.
ITEM 4.01 CHANGES IN REGISTRANT’S CERTIFYING ACCOUNTANTS
Effective as of closing date of the Share Exchange on April 26, 2013, the Company dismissed W. T. Uniack & Co., CPA’s P.C. (“Uniack”) as its independent registered public accounting firm. Uniack had previously been engaged as the principal accountant to audit Savvy’s financial statements and to review its interim financial statements. The reason for the dismissal of Uniack is that, upon the consummation of the Share Exchange, Savvy’s primary business became the business conducted by Pan Asia. It was more practical that Pan Asia’s independent auditors be engaged, going forward.
Each of Uniack’s reports on Savvy’s audited financial statements for the past two fiscal years ended September 30, 2011 and 2012 contained an adverse opinion or disclaimer of opinion and was qualified or modified as to uncertainty, audit scope or accounting principles. Each report expressed Uniack’s doubt as to the ability of Savvy to continue as a going concern due to the development stage and financial condition of Savvy.
The decision to change the Company’s independent registered public accounting firm was approved by the Company’s board of directors on April 25, 2013.
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During Savvy’s two most recent fiscal years and any subsequent interim period preceding such Savvy’s dismissal of Uniack, there were no disagreements between Savvy and Uniack on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the satisfaction of Uniack, would have caused it to make reference to the matter in connection with Uniack’s reports.
The Company made the contents of this Current Report on Form 8-K available to Uniack and requested it to furnish a letter addressed to the SEC as to whether it agrees or disagrees with, or wishes to clarify our expression of our views, or wished to provide any additional information. A copy of Uniack’s letter to the SEC is included as Exhibit 16.1 to this Report.
On April 26, 2013, the Company engaged GBH CPAs, PC (“GBH”) as the Company’s new, independent registered public accounting firm. The appointment of GBH was approved by the Company’s board of directors on April 26, 2013. During our two most recent fiscal years and the subsequent interim periods through April 26, 2013, Savvy did not consult GBH regarding either: (i) the application of accounting principles to a specific completed or contemplated transaction, or the type of audit opinion that might be rendered on our financial statements; or (ii) any matter that was the subject of a disagreement as defined in Item 304(a)(1)(iv) of Regulation S-K.
ITEM 5.06 CHANGE IN SHELL COMPANY STATUS
Upon the consummation of the Share Exchange on April 26, 2013, the Company ceased to be a “shell company,” as that term is defined under Rule 12b-2 of the Exchange Act. The information disclosed under Item 2.01 of this Form 8-K is incorporated by reference herein.
ITEM 5.07 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On April 25, 2013, the Company received the written consent in lieu of a stockholders’ meeting by Brookstone Partners, LLC, the holder of 100 shares (100%) of the outstanding Series B Non-Convertible Preferred Stock (having 80% voting rights of the outstanding voting capital stock of the company), therein approving of the Share Exchange and the transactions contemplated by the Share Exchange Agreement and the Company’s name change to Pan Global, Corp.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired
The Audited Consolidated Financial Statements of Pan Asia as of September 30, 2012 and for the years then ended are included inExhibit 99.1 to this Report and are incorporated herein by reference.
The Unaudited Consolidated Financial Statements of Pan Asia as of December 31, 2012 and for the period then ended are included inExhibit 99.1 to this Report and are incorporated herein by reference.
(b) Pro Forma Financial Information
The unaudited pro forma condensed consolidated balance sheet as of December 31, 2012 and the unaudited pro forma condensed consolidated statements of operations for the three months ended December 31, 2012 and for the year ended September 30, 2012 to reflect the acquisition of the business operations of Pan Asia are included inExhibit 99.1 to this Report and are incorporated herein by reference.
(c) Shell Company Transactions
Reference is made to Items 9.01(a) and 9.01(b) and the exhibits referred to therein which are incorporated herein by reference.
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(d) Exhibits
Exhibit No: | Description: | |
2.1(1) | Stock Exchange Agreement, dated April 24, 2013, between Savvy Business Support, Inc. and Pan Asia Infratech Corp. | |
3.1(1) | Certificate of Amendment to Articles of Incorporation of Savvy Business Support, Inc., effective April 26, 2013 | |
3.2(1) | Certificate of Designations of Series C Convertible Preferred Stock, effective April 29, 2013 | |
3.3* | Articles of Incorporation of Pan Asia Infratech Corp., effective July 13, 2012 | |
14.1(2) | Code of Ethics | |
14.2(2) | Code of Business Conduct | |
16.1* | Letter from W. T. Uniack & Co., CPA’s P.C. dated April 26, 2013 | |
99.1* | Financial Statements required under Form 8-K and Regulation S-X |
101.INS* | XBRL Instance Document | |
101.SCH* | XBRL Taxonomy Extension Schema Document | |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document |
*Filed herewith
(1) | Filed as an exhibit to the Form 8-K filed on May 1, 2013, and incorporated by reference herein. |
(2) | Filed as an exhibit to the Registration Statement on Form S-1 (SEC File No.: 333-167130) filed by Savvy Business Support, Inc. on May 27, 2010 and incorporated by reference herein. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
PAN GLOBAL, CORP. | ||
Dated: May 2, 2013 | By: | /s/ BHARAT VASANDANI |
Bharat Vasandani | ||
Chairman of the Board, President, Chief Executive Officer | ||
and Chief Financial Officer (Principal Executive Officer) | ||
(Principal Financial and Accounting Officer) |
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