As filed with the Securities and Exchange Commission on July 27, 2007
Registration No. 333-_________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM SB-2
Registration Statement
Under the Securities Act of 1934
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HYDROGEN HYBRID TECHNOLOGIES, INC.
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(Name of small business issuer in its charter)
NEVADA 3510 45-0487463
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(State or other Jurisdiction of (Primary Standard (I.R.S. Employer
Incorporation or Organization) Industrial Identification No.)
Classification
Number)
1845 Sandstone Manor Unit #11, Pickering, ON L1W 3X9 Canada
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(Address of principal executive offices)
Hydrogen Hybrid Technologies, Inc.
1845 Sandstone Manor Unit #11
Pickering, ON L1W 3X9 Canada
(905) 697-4880
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(Name, address of principal executive offices)
Thomas C. Cook, Esq.
Law Offices of Thomas C. Cook
2921 N. Tenaya Way, Suite 234
Las Vegas, NV 89128
Phone: (702) 952-8520
Fax: (702) 952-8521
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(Name, address and telephone number of agent for service)
Approximate date of proposed commencement of sale to the public: As soon as
practicable after the Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box: [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
Calculation of Registration Fee
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TITLE OF EACH PROPOSED
CLASS OF PROPOSED MAXIMUM
SECURITIES AMOUNT OFFERING AGGREGATE AMOUNT OF
TO BE TO BE PRICE PER OFFERING REGISTRATION
REGISTERED RESISTERED SHARE(1) PRICE(1) FEE
Common stock
$0.001 par value 8,323,862 (1) $2.85(2) $23,723,007 $ 728.30
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TOTAL 8,323,862 N/A $23,723,007 $ 728.30
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(1) Represents common shares currently outstanding to be sold by the selling
security holders.
(2) The price is estimated in accordance with Rule 457(c) under the
Securities Act of 1933, as amended, solely for the purpose of calculating the
registration fee and represents the average of the high and the low prices of
the common stock on July 26, 2007 as reported on the OTC Bulletin Board.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
ii
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THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THE SELLING
STOCKHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES
AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE
THE OFFER OR SALE IS NOT PERMITTED.
PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED ________, 2007
Hydrogen Hybrid Technologies, Inc.
8,323,862 shares of common stock held by stockholders
This prospectus relates to the resale by certain selling security holders of
the Company of up to 8,323,862 shares of common stock. The 8,323,862 shares
offered by the selling shareholders represents 6.4% of the total outstanding
shares as of the date of this prospectus. Upon the effectiveness of this
prospectus: the Selling Shareholders may sell the shares as detailed in the
section entitled "Plan of Distribution." We will pay the expenses of
registering these shares.
Each of the selling stockholders may be deemed to be an "underwriter," as
such term is defined in the Securities Act of 1933.
Our common stock is traded in the over-the-counter market and is quoted on
the OTC Bulletin Board under the symbol HYHY.OB. As of July 26, 2007 , the
last bid price of our common stock was $1.31 per share.
The shares included in this prospectus may be reoffered and resold directly
by the selling securityholders in accordance with one or more of the methods
described in the plan of distribution, which begins on page 35 of this
prospectus. We will not control or determine the price at which a selling
securityholder decides to sell its shares. Brokers or dealers effecting
transactions in these shares should confirm that the shares are registered
under applicable state law or that an exemption from registration is
available.
The purchase of the securities offered through this prospectus involves a
high degree of risk. See "Risk Factors" beginning on page 5.
We may amend or supplement this prospectus from time to time by filing
amendments or supplements as required. You should read the entire prospectus
and any amendments or supplements carefully before you make your investment
decision.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The Date of This Prospectus Is: [date] ___, 2007
TABLE OF CONTENTS
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PAGE
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Part I
PROSPECTUS SUMMARY...................................................... 3
THE OFFERING. .......................................................... 3
SUMMARY FINANCIAL INFORMATION........................................... 5
RISK FACTORS............................................................ 5
RISK FACTORS RELATING TO OUR COMPANY.................................... 6
RISK FACTORS RELATING TO OUR COMMON SHARES..............................10
CAPITALIZATION .........................................................13
FORWARD-LOOKING STATEMENTS..............................................14
USE OF PROCEEDS.........................................................14
MARKET FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS.................14
DILUTION................................................................15
DESCRIPTION OF BUSINESS.................................................15
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION...............21
LEGAL PROCEEDINGS.......................................................23
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS............23
SECURITY OWNERSHIP OF CERTAIN BENEFICAL OWNERS AND MANAGEMENT...........29
CERTAIN RELATINSHIPS AND RELATED TRANSACTIONS...........................30
SELLING SECURITY HOLDERS................................................31
PLAN OF DISTRIBUTION....................................................35
DIVIDEND POLICY.........................................................38
SHARE CAPITAL ..........................................................39
LEGAL MATTERS...........................................................41
EXPERTS.................................................................41
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES..........................41
WHERE YOU CAN FIND MORE INFORMATION.....................................42
FINANCIAL STATEMENTS....................................................43
Part II
INDEMNIFICATION OF DIRECTORS AND OFFICERS.............................II-1
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION...........................II-2
RECENT SALES OF UNREGISTERED SECURITIES...............................II-2
EXHIBITS..............................................................II-3
UNDERTAKINGS..........................................................II-3
POWER OF ATTORNEY.....................................................II-5
SIGNATURES............................................................II-6
You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from
that which is contained in this prospectus. This prospectus may be used only
where it is legal to sell these securities. The information in this
prospectus may only be accurate on the date of this prospectus, regardless of
the time of delivery of this prospectus or of any sale of securities.
2
Prospectus Summary
------------------
The following summary highlights selected information contained in this
prospectus. Before making an investment decision, you should read the entire
prospectus carefully, including the "Risk Factors" section, the financial
statements and the notes to the financial statements.
Corporate Background
The Registrant was incorporated under the laws of the State of Nevada on
December 31, 1998, under the name Pinoak, Inc. Pinoak was subsequently
acquired by Eaton Laboratories, Inc. on April 14, 2006
On March 30, 2007, Eaton Laboratories, a Nevada corporation, Eaton
Laboratories Acquisition Corporation, a Nevada corporation ("Merger Sub") and
Hydrogen Hybrid Technologies, Inc. ("HYHY"), a privately-held Canadian
corporation, entered into a Acquisition Agreement and Plan of Merger pursuant
to which the Registrant, through its wholly-owned subsidiary, Merger Sub,
acquired HYHY in exchange for 99,000,000 shares of the Registrant's
unregistered common stock which were issued to the holders of HYHY stock.
Pursuant to Rule 12g-3(g) of the General Rules and Regulations of the
Securities and Exchange Commission, HYHY is the successor issuer to Eaton for
reporting purposes under the Securities Exchange Act of 1934, as amended (the
"Act"). The purpose of this transaction was for HYHY to succeed to the
registration status of Eaton under the Exchange Act pursuant to Rule 12g-3.
Pursuant to the Acquisition Agreement and Plan of Merger the Articles and By-
laws of Eaton become the Articles and By-Laws of the Surviving Corporation.
On June 26, 2007, the Company amended its Articles of Incorporation to change
its name to: Hydrogen Hybrid Technologies, Inc.
Our offices are currently located at 1845 Sandstone Manor Unit #11,
Pickering, ON L1W 3X9 Canada. Our telephone number is (905) 697-4880.
The Offering
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Common stock offered by
the selling securityholders 8,323,862
Securities Issued and 129,071,362 shares of our common stock are
Outstanding issued and outstanding as of the date of this
prospectus. All of the common stock to be sold
under this prospectus will be sold by existing
shareholders and thus there will be no increase
in our issued and outstanding shares as a result
of this offering. The issuances were made in
reliance on Regulation S promulgated under the
Act. All sales were made outside the United
States, and no sales were made to U.S. persons
(as defined under Regulation S). The shares were
issued in reliance on the exemption provided by
Section 4(2) of the Securities Act of 1933, as
amended.
3
Use of proceeds We will not receive any proceeds from the sale
of the common stock by the selling shareholders.
Risk Factors See "Risk Factors" and the other information in
this prospectus for a discussion of the factors
you should consider before deciding to invest in
our common shares.
Market for our Common Stock Our common stock is quoted on the OTC Bulletin
Board under the symbol "HYHY.OB". The last
reported sale price for our shares on the OTC
Bulletin Board on July 20, 2007 , the date that
our shares last traded, was $3.00 per share.
4
Summary Financial Information
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Six months Cumulative
ending Since Inception to
March 31 March 31
2007 2007
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Statement of Operations Data:
Revenues $ 10,239 $ 10,239
Net Loss $ (81,724) $ (261,838)
Net Loss Per Common Share - Basic and Diluted $ (0.00) $ (0.00)
Weighted Average Common Shares Outstanding -
Basic and Diluted 60,373,750 30,000,000
Balance sheet data:
Six months Year
ending ending
March 31 September 30
2007 2006
----------- -----------
Cash $ 44,080 $ 1,026,571
Total Assets $ 5,089,835 $ 5,583,343
Stockholders' Equity $ 5,061,442 $ 4,087,059
RISK FACTORS
All parties and individuals reviewing this Form SB-2 and considering us as an
investment should be aware of the financial risk involved. When deciding
whether to invest or not, careful review of the risk factors set forth herein
and consideration of forward-looking statements contained in this
registration statement should be adhered to. Prospective investors should be
aware of the difficulties encountered as we face all the risks including
competition, and the need for additional working capital. If any of the
following risks actually occur, our business, financial condition, results of
operations and prospects for growth would likely suffer. As a result, you
could lose all or part of your investment.
5
You should read the following risk factors carefully before purchasing our
common stock.
Risk Factors Relating to Our Company
------------------------------------
1. Hydrogen Hybrid Technologies, Inc. has a limited operating history in on-
board hydrogen generating and injections systems, and therefore investors may
not be able to evaluate an investment in our common stock.
Hydrogen Hybrid Technologies has a limited history of operations in on-board
hydrogen generating and injections systems industry. An investment in Hydrogen
Hybrid Technologies should be viewed in light of the risks and uncertainties
inherently faced by a company in the early stages of development. There can be
no assurance that Hydrogen Hybrid Technologies will achieve or sustain
profitability or positive cash flows from operating activities in the future.
Investors may lose their investment or the opportunity to profit from a
developing business or be unable to correctly assess our ability to operate in
our chosen industry.
2. If our business plan is not successful, we may not be able to continue
operations as a going concern and our stockholders may lose their entire
investment in us.
As discussed in the Notes to Financial Statements included in this
registration statement, at March 31, 2007 we had cash of $44,080 and
stockholders' equity of $5,061,442. In addition, we had revenues of $10,239
and a net loss of $(81,724) for the six period ending March 31, 2007.
These factors raise substantial doubt that we will be able to continue
operations as a going concern, and our independent auditors included an
explanatory paragraph regarding this uncertainty in their report on our
financial statements. Our ability to continue as a going concern is
dependent upon our generating cash flow sufficient to fund operations and
reducing operating expenses. Our business plans may not be successful in
addressing these issues. If we cannot continue as a going concern, our
stockholders may lose their entire investment in us.
3. We expect losses in the future because we have little revenue.
We have generated $10,239 in revenues, we are expecting losses over the next
twelve (12) months since we have little revenues to offset the expenses
associated in executing our business plan. We cannot guarantee that we will
ever be successful in generating revenues in the future. We recognize that
if we are unable to generate revenues, we will not be able to earn profits or
continue operations as a going concern. There is no history upon which to
base any assumption as to the likelihood that we will prove successful, and
we can provide investors with no assurance that we will generate any
operating revenues or ever achieve profitable operations.
6
4. We will require a substantial amount of additional capital to fully
execute our business plan, and we are uncertain about the availability of
such additional funds without which we may not be able to execute our
business plan.
The business plan calls for the expenditure of substantial capital to finance
development projects, finance a state-of-the-art testing facility, finance a
manufacturing facility, and construct a production facility with capacity for
future large scale on-board hydrogen generating and injections systems that
we plan to sell. Hydrogen Hybrid Technologies will require additional capital
to fund its expenditures, including business development, operating losses,
and other cash needs to implement its market entry and cost reduction phases.
Hydrogen Hybrid Technology has made an initial estimate of its capital needs
for its market entry stage and believes it will need between $15-$45 million
in additional capital. Furthermore, if Hydrogen Hybrid Technology decides to
expand the business beyond what is currently planned; additional capital
beyond what is anticipated in our current business plan will be required.
Hydrogen Hybrid Technology plans in the future to seek portions of the
required funding from commercial sales, existing state incentive programs for
on-board hydrogen generating and injections systems. Although Hydrogen
Hybrid Technology currently plans to obtain some of the required additional
financing through the issuance of debt instruments, conditions and
circumstances may change such that Hydrogen Hybrid Technology may decide to
raise capital through the issuance of equity securities, which would result
in dilution to existing shareholders. Any such financing terms may be
adverse to existing security holders of Hydrogen Hybrid Technology and could
impose operational limitations on Hydrogen Hybrid Technology. There can be no
assurance that such additional financing will be available to Hydrogen Hybrid
Technology. Without the necessary funds, our business plan will have to be
modified or may not be fully executed.
5. Hydrogen Hybrid Technologies relies on trade secret and similar means to
protect much of its intellectual property which may not prove to be
effective, with the effect of an impairment in our rights.
We rely on trade secret law, confidentiality agreements and physical security
such as restricted access to protect much of its intellectual property.
These means of protection may not be effective with the consequence that
others may obtain knowledge of our intellectual property. To protect its
rights that others learn illegally may require Hydrogen Hybrid Technologies
to expend time and financial resources pursuing court actions. These actions
are typically expensive and are not always conclusive in favor of the
claimant. In addition, though we believe doing so would be difficult, it may
be possible for third parties to reverse engineer its fuel cells through
inspection and testing. Finally, although we are not aware, it is possible
that third party patents may exist on which our technology may infringe. Our
financial condition may be impaired in any such events, and it may lose its
competitive position as a result.
7
6. If we are unable to obtain additional funding, our business operations
will be harmed. Even if we do obtain additional financing our then existing
shareholders may suffer substantial dilution.
We will require additional funds to market our services and pay the required
fees to keep our company fully reporting and compliant with SEC rules and
regulations. We need to address all necessary infrastructure concerns. We
anticipate that we will require up to approximately $15-$45 million to fund
our continued operations. Such funds may come from the sale of equity and/or
debt securities and/or loans. It is possible that additional capital will be
required to effectively support the operations and to otherwise implement our
overall business strategy. The inability to raise the required capital will
restrict our ability to grow and may reduce our ability to continue to
conduct business operations. If we are unable to obtain necessary financing,
we will likely be required to curtail our development plans which could cause
the company to become dormant. Any additional equity financing may involve
substantial dilution to our then existing shareholders.
7. We have no experience manufacturing on-board hydrogen generating and
injections systems, on a commercial basis which may result in delays in sales
and result in additional development costs.
We have no experience designing and manufacturing on-board hydrogen
generating and injections systems, on a commercial basis. We do not know
whether or when we will be able to develop efficient, low-cost manufacturing
capability and processes that will enable it to meet the production standards
or production volumes necessary to successfully market its products. Even if
we are successful in developing its manufacturing capability and processes,
we do not know whether we will do so in time to meet its product
commercialization schedule. Therefore, investors may lose the opportunity to
profit from the development of our technology and business plan because there
may be delays in sales, additional development costs and loss of market
position.
8. Newer technologies could render our systems obsolete prior to
commercialization, and therefore will cause us to curtail our current
business plan and an impairment in an investment in our Company.
Our on-board hydrogen generating and injections systems are one of a number
of energy products being developed today as supplements to reciprocating
engines. Technological advances in alternative energy products, improvements
in reciprocating engine/generator sets, and other fuel cell technologies may
render our systems obsolete, therefore causing a diminished value of an
investment in our Company.
8
9. We are subject to competition with traditional and other alternative
energy systems, any of which could be determined better, more reliable or
more cost efficient and any of which could reduce demand for our products.
Our success depends on our ability to compete with other energy systems
providers. We are likely to face competition from existing energy systems
providers, including combustion turbine manufacturers and the automobile
industry, who may decide to sell to the same customers and/or to build
expansions of their own power generating systems, and from equipment
manufacturers and local contractors who typically build energy systems upon a
customer's request and may decide to build excess power generating capacity
which would compete with our products. Due to the highly competitive nature
of the American, European and international energy industries, new companies
may emerge in the future offering services and products similar to our
products. Management believes that the liberalization of the energy market is
likely to attract more competitors, such as companies offering traditional
technology products like combustion turbines, internal combustion engines and
others. , This intensifying competition could reduce the demand for our
products.
10. We plan to operate and sell our products in various countries, we will
be subject to varying degrees of regulation in each of the jurisdictions in
which we operate.
There can be no assurance that regulatory, judicial and legislative changes
will not have a material adverse effect on our operations. For example,
regulators may raise material issues with regard to our compliance or non-
compliance with applicable regulations or judicial decisions may impact on
our operations, each of which could have a material adverse effect on our
business, financial condition and results of operations because of added
costs or as an impediment or barrier to marketing and sales.
11. Our success depends on our ability to hire and retain key personnel
without which its ability to implement its business plan will be slowed.
Our future success depends on the skills, experience and efforts of our
officers and key technical and sales employees. Our success depends on our
ability to attract, train and retain qualified engineering, technical, and
sales personnel. Competition for personnel in these areas is intense and we
may not be able to hire or retain the required personnel. Moreover, we may
not be able to retain these employees. A failure to do so could have a
material adverse effect on our business, financial condition and results of
operations because without the right personnel, we will not be able to
implement our business plan. We do not maintain key man insurance on any of
its management or employees.
9
11. Our principal stockholders, and officers and directors own a controlling
interest in our voting stock and investors will not have any voice in our
management, which could result in decisions adverse to our general
shareholders.
Our officers and our principal stockholders, in the aggregate, beneficially
own approximately or have the right to vote approximately 69% of our
outstanding common stock. As a result, these stockholders, acting together,
will have the ability to control substantially all matters submitted to our
stockholders for approval including:
a) election of our board of directors;
b) removal of any of our directors;
c) amendment of our Articles of Incorporation or bylaws; and
d) adoption of measures that could delay or prevent a change in control or
impede a merger, takeover or other business combination involving us.
As a result of their ownership and positions, these two individuals have the
ability to influence all matters requiring shareholder approval, including
the election of directors and approval of significant corporate transactions.
In addition, the future prospect of sales of significant amounts of shares
held by our director and executive officer could affect the market price of
our common stock if the marketplace does not orderly adjust to the increase
in shares in the market and the value of your investment in the company may
decrease. Management's stock ownership may discourage a potential acquirer
from making a tender offer or otherwise attempting to obtain control of us,
which in turn could reduce our stock price or prevent our stockholders from
realizing a premium over our stock price.
Risks Relating To Our Common Shares
-----------------------------------
12. We may, in the future, issue additional common shares, which would reduce
investors' percent of ownership and may dilute our share value.
Our Articles of Incorporation authorize the issuance of 180,000,000 shares of
common stock and 20,000,000 preferred shares. The future issuance of common
stock may result in substantial dilution in the percentage of our common
stock held by our then existing shareholders. We may value any common stock
issued in the future on an arbitrary basis. The issuance of common stock for
future services or acquisitions or other corporate actions may have the
effect of diluting the value of the shares held by our investors, and might
have an adverse effect on any trading market for our common stock.
10
13. Our common shares are subject to the "Penny Stock" Rules of the SEC and
the trading market in our securities is limited, which makes transactions in
our stock cumbersome and may reduce the value of an investment in our stock.
The Securities and Exchange Commission has adopted Rule 15g-9 which
establishes the definition of a "penny stock," for the purposes relevant to
us, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to
certain exceptions.
For any transaction involving a penny stock, unless exempt, the rules
require: (a) that a broker or dealer approve a person's account for
transactions in penny stocks; and (b) the broker or dealer receive from the
investor a written agreement to the transaction, setting forth the identity
and quantity of the penny stock to be purchased.
In order to approve a person's account for transactions in penny stocks, the
broker or dealer must: (a) obtain financial information and investment
experience objectives of the person; and (b) make a reasonable determination
that the transactions in penny stocks are suitable for that person and the
person has sufficient knowledge and experience in financial matters to be
capable of evaluating the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prescribed by the Commission relating to the
penny stock market, which, in highlight form: (a) sets forth the basis on
which the broker or dealer made the suitability determination; and (b) that
the broker or dealer received a signed, written agreement from the investor
prior to the transaction. Generally, brokers may be less willing to execute
transactions in securities subject to the "penny stock" rules. This may make
it more difficult for investors to dispose of our Common shares and cause a
decline in the market value of our stock.
Disclosure also has to be made about the risks of investing in penny stocks
in both public offerings and in secondary trading and about the commissions
payable to both the broker-dealer and the registered representative, current
quotations for the securities and the rights and remedies available to an
investor in cases of fraud in penny stock transactions. Finally, monthly
statements have to be sent disclosing recent price information for the penny
stock held in the account and information on the limited market in penny
stocks.
11
14. Even though our common stock is now listed on the OTC-Bulletin Board, the
market price of the shares may fluctuate greatly, and investors in our the
Company bear the risk that they will not recover their investment.
Trading in our common stock has been minimal from time to time and may be
subject to large price fluctuation. Therefore, there is no clearly
established market for our shares at this time. The public market price is
likely to be influenced by the price at which and the amount of shares the
selling stockholders are attempting to sell at any point in time with the
possible effect of limiting the trading price or lowering it to their
offering price. Shares such as those of companies like ours are also subject
to the activities of persons engaged in short selling the securities which
have the effect of driving the price down. Therefore, the price of our
common stock may fluctuate widely. A full and stable trading market for our
common stock may never develop in which event; any holder of our shares may
not be able to sell at the time he elects or at all.
15. Because we do not intend to pay any cash dividends on our common stock,
our stockholders will not be able to receive a return on their shares unless
they sell them.
We intend to retain any future earnings to finance the development and
expansion of our business. We do not anticipate paying any cash dividends on
our common stock in the foreseeable future. Unless we pay dividends, our
stockholders will not be able to receive a return on their shares unless they
sell them. There is no assurance that stockholders will be able to sell
shares when desired.
16. We may issue shares of preferred stock in the future that may adversely
impact your rights as holders of our common stock.
Our articles of incorporation authorize us to issue up to 20,000,000 shares
of preferred stock. Accordingly, our board of directors will have the
authority to fix and determine the relative rights and preferences of
preferred shares, as well as the authority to issue such shares, without
further stockholder approval. As a result, our board of directors could
authorize the issuance of a series of preferred stock that would grant to
holders preferred rights to our assets upon liquidation, the right to receive
dividends before dividends are declared to holders of our common stock, and
the right to the redemption of such preferred shares, together with a
premium, prior to the redemption of the common stock. To the extent that we
do issue such additional shares of preferred stock, your rights as holders of
common stock could be impaired thereby, including, without limitation,
dilution of your ownership interests in us. In addition, shares of preferred
stock could be issued with terms calculated to delay or prevent a change in
control or make removal of management more difficult, which may not be in
your interest as holders of common stock.
12
Capitalization
--------------
The following table sets forth, as of September 30, 2006, the capitalization
of the Company on an actual basis. This table should be read in conjunction
with the more detailed financial statements and notes thereto included
elsewhere herein.
6 months ending Year-end
March 31, 2007 Sept. 30, 2007
-------------- --------------
Actual Actual
----------- --------------
Liabilities
Accounts payable and accrued liabilities $ 28,393 $ 1,496,284
-----------------------------
28,393 1,496,284
Stockholders' Equity
Common Stock, $0.001 par value, 80,000,000
shares authorized, 60,373,750, 30,000,000
shares issued and outstanding as of
3/31/07 and 09/30/06, respectively 82 82
Additional paid-in capital - -
Special Warrants Subscribed 5,305,585 4,267,973
Deficit, accumulated during development (261,838) (180,114)
Accumulated Other Comprehensive Loss 17,613 (882)
---------------------------
5,061,442 4,087,059
---------------------------
$ 5,089,835 5,583,343
============================
13
Forward-Looking Statements
- --------------------------
This Prospectus contains forward-looking statements, including statements
concerning possible or assumed results of exploration and/or operations of
Hydrogen Hybrid Technologies, Inc., and those proceeded by, followed by or
that include the words "may," "should," "could," "expects," "plans,"
"anticipates," "believes," "estimates," "predicts," "potential," or
"continue" or the negative of such terms and other comparable terminology.
Investors should understand that the factors described below, in addition to
those discussed elsewhere in this document could affect Hydrogen Hybrid
Technologies future results and could cause those results to differ
materially from those expressed in such forward looking statements.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock offered
through this prospectus by the selling shareholders.
MARKET FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS
Our common stock is quoted on the Over-the-Counter Bulletin Board under the
symbol "HYHY.OB."
For the year ended December 31, 2006, the price of the common stock as
reported and summarized by the OTC-BB was $0.51 high, and $0.30 bid. Such
prices are based on inter-dealer bid and asked prices, without markup,
markdown, commissions, or adjustments and may not represent actual
transactions.
A limited market exists for the trading of the Company's common stock.
During the year ending December 31, 2006, there has been limited trading
activity in our Common Stock, there are no assurances this trading activity
will continue in the future for the Common Stock. The last trade of the HYHY
stock as of July 3, 2007 took place on July 2, 2007 at $1.01.
On June 26, 2007, the Registrant forward split its common stock on a two-for-
one basis. The numbers in this Registration Statement have been adjusted to
reflect this forward stock split.
As of July 3, 2007, the last reported sales price for our common stock was
$1.01.
Holders of Our Common Stock
As of the date of this prospectus we have approximately 200 registered
shareholders.
14
Dividend Policy
- ---------------
To date, we have not paid any dividends on our common stock and do not expect
to declare or pay any dividends on such common stock in the foreseeable
future. Payment of any dividends will be dependent upon future earnings, if
any, our financial condition, and other factors as deemed relevant by our
board of directors.
DILUTION
--------
The common stock to be sold by the selling shareholders is common stock that
is currently issued and outstanding. Accordingly, there will be no dilution
to our existing shareholders.
Description of Business
-----------------------
Corporate History
- -----------------
The Registrant was incorporated under the laws of the State of Nevada on
December 31, 1998, under the name Pinoak, Inc. Pinoak was subsequently
acquired by Eaton Laboratories, Inc. on April 14, 2006
On March 30, 2007, Eaton Laboratories, a Nevada corporation, Eaton
Laboratories Acquisition Corporation, a Nevada corporation ("Merger Sub") and
Hydrogen Hybrid Technologies, Inc. ("HYHY"), a privately-held Canadian
corporation, entered into a Acquisition Agreement and Plan of Merger pursuant
to which the Registrant, through its wholly-owned subsidiary, Merger Sub,
acquired HYHY in exchange for 99,000,000 shares of the Registrant's
unregistered common stock which were issued to the holders of HYHY stock.
Business Strategy
- -----------------
HYHY is engaged in the business of selling and distributing of on-board
hydrogen generating and injections systems for the Original Equipment
Manufacturer ("OEM"), car and light truck markets globally. HYHY has
acquired the exclusive rights to market a proprietary patented technology
from a related company. In addition it holds non-exclusive rights to
distribute the product to other markets including the heavy goods vehicle
market (Commercial Transport Fleets).
15
The on-board hydrogen generating system strives to improve fuel consumption and
reduce pollution through the enhancement of the internal combustion process.
The technology consists of an on-board system which generates hydrogen and
oxygen by splitting distilled water. Once these gases are available they are
not stored but directly injected through the air intake of an internal
combustion engine. The result of the Hydrogen Fuel Injection system ("HFI") is
a reduction in pollution causing emission and an increase in fuel efficiency
and overall engine performance.
Hydrogen Fuel Injection ("HFI") system
- --------------------------------------
The science behind HFI is well documented. It has been known for some time
(since a 1974 paper by the Jet Propulsion Lab of the California Institute of
Technology) that the addition of hydrogen to fossil fuels, burned in internal
combustion engines, will increase the efficiency of that engine. This premise
has been validated by a number of papers published by the Society of Automotive
Engineers (SAE). The concept is valid with any fossil fuel (diesel, gasoline,
propane, natural gas) or bio-fuel (biodiesel, ethanol) though it is most
effective in diesel engines. Among other, more subtle effects, the faster flame
speed of hydrogen allows for a more complete burn of the fuel earlier in the
power cycle. Of course, electrolysis itself is well understood.
The HYHY technology differs from its competitors in that it focuses on
delivering an engineering solution using these scientific principles that is
reliable, efficient, and cost-effective. As an integral part of the research
and development cycle, HYHY delivers an HFI solution geared toward a specific
vertical market that has gone through an extensive field trial and testing
verification stage.
Product Highlights
- ------------------
A number of the product highlights offered by HYHY's on-board hydrogen
generating and injections systems include:
o Reduce fuel consumption 5% to 30% depending on operating environment
o Reduce emissions from 30% to 80% (meets most 2010 emission requirements)
o Functional with any internal combustion engine and any fossil fuel
o Configurations are available for both 12 & 24 volt, plus 120 amp
services
o Does not require additional power capabilities within current OEM
vehicles
o Simple installation (many trained installers across N.A. - 4 hrs required)
o Leasing provides immediate positive cash flow for Heavy Vehicle
Operators
o Product that reduces emissions while increasing cash flow
16
Business Strategy
- -----------------
While the HFI technology is initially an after-market device, HYHY is actively
seeking Original Equipment Manufacturers (OEM) during the development and
testing phase to license the technology and incorporate it directly into their
engineering cycle. Eventually, with exhaust water re-capture technology, the
HFI system will be built seamlessly into internal combustion engines.
As HFI technology achieves greater acceptance and penetration in various
markets, HYHY will continue to develop hydrogen solutions that meet ongoing
public requirements of emission reductions and energy economies. The HFI system
is positioned as a bridge technology to handle the transition to products that
would, ultimately, allow our society to cease using hydrocarbon fuels. It is
management's belief that the term "hybrid" could soon come to mean "hydrogen-
hydrocarbon" technologies.
HYHY markets on-demand hydrogen-generating technology designed to increase the
efficiency of virtually any combustion process. The technology is based on a
patented Hydrogen Fuel Injection ("HFI") system, in which hydrogen and oxygen
are generated on demand via electrolysis and then introduced into the
combustion process. The HFI system draws power, 12V or 1 10V, and splits
distilled water to produce hydrogen and oxygen; then both gases are injected
directly into the air intake of the engine. In the engine, the hydrogen acts as
an initiator to promote more complete combustion. By converting more chemical
energy into mechanical energy, the engine operator is able to reduce fuel
consumption, plus the more complete combustion dramatically lowers exhaust
emissions (CO, PM, HC, NOx).
Marketing Strategies
- --------------------
Management plans to market their technology initially towards the Heavy Goods
Vehicle (HGV) market. HGVs are Class 7 and Class 8 heavy duty, long-haul trucks
(7.3 to 16 liters) that typically run on diesel. The HFI unit uses distilled
water, runs for 65 hours between fills, and incorporates a number of safety
features the most salient of which is the fact that no hydrogen is stored on-
board since it is generated only on-demand.
An on-board digital controller monitors the device and also allows for two-way
wireless connection, via satellite, along with full GPS capability. Software
updates and monitoring can be performed remotely. Additional revenue streams
might be possible by leveraging this communications ability as a complementary
business, both as a fleet management service and as a personal communications
service.
17
Competition
- -----------
With the primary focus at HYHY being on the Heavy Goods Vehicle and light
truck markets, the principle competition comes from manufacturers of
"passive" emissions control technologies. There are a variety of advanced
exhaust treatment products, including diesel particulate filters and diesel
oxidation catalysts but, while they offer comparable emissions reductions to
HFI, in every case they increase fuel consumption (by increasing back
pressure on the engine) by an average of 3.5%-as contrast to the 10% fuel
savings achieved by HFI. The existing market for these devices is literally
billions of dollars, with companies such as Arvin Meritor, Johnson Matthey,
and Delphi presently participating.
The credible competitor for HYHY is Hy-Drive. They market a product that is
based on similar technology, but which is less sophisticated than HYHY HFI
models and has only limited application on certain heavy-duty diesel engines.
Their primary market is North America for long-haul trucking and above-ground
mining equipment; they claim to have secured sales agents in the UK and
Australia as well.
There is an extensive list of private companies attempting to develop
technologies involving the addition of fractional amounts of hydrogen to
fossil fuel engines. To date, none has reached the point of having any real
presence in the marketplace.
Hythane Ltd. produces a gas that mixes hydrogen and natural gas before it is
pumped into a vehicle gas tank; in other words, doing off-board what HYHY
does on-board. With their system, there are the obvious issues related to
the storage of large volumes of compressed gas, as well as the sourcing of
large volumes of pure hydrogen.
Finally, there are manufacturers of very large electrolysers, used primarily
to supply hydrogen for cooling turbines in electrical power generating
stations. The two largest North American manufacturers are GE and
Hydrogenics, and it is conceivable that after HYHY demonstrates the potential
for smaller electrolysers, particularly in applications that have never
utilized electrolysis previously, these companies might expand their product
lines to include competition for the various HFI models.
Indirect Competition
- ----------------------
Indirect competition would include technologies such as fuel cells, battery-
powered vehicles, hybrid vehicles, alternative fuels, and other emission
reduction alternatives, such as diesel oxidation catalysts and diesel
particulate filters. Of these, the only truly price-competitive products are
the diesel particulate filters, but their use on HGVs while accomplishing the
goal of reducing PM comes with the financial penalty of reducing fuel
efficiency by 3.5 - 4% and does nothing to reduce CO2. Diesel oxidation
catalysts, similarly, reduce engine efficiency, and the emissions benefits
come with equipment costs on par with an HFI HT.
18
Hybrid vehicles are gaining customer acceptance, but are not, in fact, a
competitor to the HFI system since the HFI system can be regarded as a
complementary technology. "Hybrid" may soon refer to the hybrid of hydrogen-
hydrocarbon, not gasoline-electric. Alternative fuels, such as ethanol,
again can be seen as complementary technologies since the HFI device can be
used in conjunction with them. As part of its long-term vision, HYHY plans
to develop partnerships with companies in the bio-fuel industry to develop
hydrogen blends that will make those fuels even cleaner and less expensive.
Battery-powered vehicles-which do not eliminate emissions, but merely displace
them-are not a likely viable alternative, and all but a handful of niche
manufacturers have ceased any development work in this field.
BANKRUPTCY OR SIMILAR PROCEEDINGS
There has been no bankruptcy, receivership or similar proceeding.
REORGANIZATIONS, PURCHASE OR SALE OF ASSETS
There have been no material reclassifications, mergers, consolidations, or
purchase or sale of a significant amount of assets not in the ordinary course
of business.
PATENTS, TRADEMARKS, FRANCHISES, CONCESSIONS, ROYALTY AGREEMENTS, OR LABOR
CONTRACTS
The Company regards substantial elements of its products and technology as
proprietary and attempts to protect them by relying on trademark, service
mark, copyright and trade secret laws and restrictions on disclosure and
transferring title and other methods. The Company plans to enter into
confidentiality agreements with its future employees, future suppliers and
future consultants and in connection with its license agreements with third
parties and generally seeks to control access to and distribution of its
technology, documentation and other proprietary information. Despite these
precautions, it may be possible for a third party to copy or otherwise obtain
and use the Company's proprietary information without authorization or to
develop similar technology independently.
Legal standards relating to the validity, enforceability and scope of
protection of certain proprietary rights are uncertain and still evolving,
and no assurance can be given as to the future viability or value of any of
the Company's proprietary rights. There can be no assurance that the steps
taken by the Company will prevent misappropriation or infringement of its
proprietary information, which could have a material adverse effect on the
Company's business, results of operations and financial condition. Litigation
may be necessary in the future to enforce the Company's intellectual property
rights,
19
to protect the Company's trade secrets or to determine the validity and scope
of the proprietary rights of others. Such litigation might result in
substantial costs and diversion of resources and management attention.
Furthermore, there can be no assurance that the Company's business activities
will not infringe upon the proprietary rights of others, or that other
parties will not assert infringement claims against the Company. Moreover,
from time to time, the Company may be subject to claims of alleged
infringement by the Company or service marks and other intellectual property
rights of third parties. Such claims and any resultant litigation, should it
occur, might subject the Company to significant liability for damages, might
result in invalidation of the Company's proprietary rights and, even if not
meritorious, could result in substantial costs and diversion of resources and
management attention and could have a material adverse effect on the
Company's business, results of operations and financial condition.
NEED FOR GOVERNMENT APPROVAL FOR OUR PRODUCTS
It is impossible to anticipate government regulations, if any, to which the
Company may be subject as it defines its business. The development of on-
board hydrogen generating and injections systems could subject the Company to
environmental, public health and safety, land use, trade, or other
governmental regulations and state or local taxation. The Company plans to
comply with the necessary government approval for its products.
Employees
- ---------
We have no full time employees at this time. All managerial functions
including development, strategy, negotiations is being provided by our
officers/directors.
Description of Property
- -----------------------
Our offices are currently located at 1845 Sandstone Manor Unit #11,
Pickering, ON L1W 3X9 Canada, telephone (905) 697-4880.
20
Management's Discussion and Analysis or Plan of Operation
---------------------------------------------------------
Certain statements contained in this prospectus, including statements
regarding the anticipated development and expansion of our business, our
intent, belief or current expectations, primarily with respect to the future
operating performance of HYHY and the services we expect to offer and other
statements contained herein regarding matters that are not historical facts,
are "forward-looking" statements. Future filings with the Securities and
Exchange Commission, future press releases and future oral or written
statements made by us or with our approval, which are not statements of
historical fact, may contain forward-looking statements, because such
statements include risks and uncertainties, actual results may differ
materially from those expressed or implied by such forward-looking
statements.
All forward-looking statements speak only as of the date on which they are
made. We undertake no obligation to update such statements to reflect events
that occur or circumstances that exist after the date on which they are made.
Overview
We are engaged in the business of selling and distributing of on-board
hydrogen generating and injection systems for the Original Equipment
Manufacturer, car and light truck markets globally.
Results of Operations for the six months Ending March 31, 2007
We earned $10,239 in revenues for the six month period ending March 31, 2007
as compared to no revenues for the same period a year ago. We do not
anticipate earning any significant revenues until such time as we build a
customer base for our hydrogen technologies. We are presently in the
development stage of our business and we can provide no assurance that we
will find any new business for our products.
For the six month period ending March 31, 2007 we experienced a net loss of
(81,724) as compared to no loss for the same period last year. Since our
inception we experienced a net loss of $(261,838). Our loss was attributed
to operating expenses, organizational costs, and developmental costs. Our
operating expenses included general and administrative expenses. We
anticipate our operating expenses will increase as we enhance our operations.
The increase will be attributed to professional fees to be incurred in
connection with the filing of a registration statement with the Securities
Exchange Commission under the Securities Act of 1933. We anticipate our
ongoing operating expenses will also increase once we become a reporting
company under the Securities Exchange Act of 1934.
21
Revenues
We generated $10,239 in revenues for the six month period ending March 31,
2007 as compared to no revenues for the same period last year. We do not
anticipate generating any major increase revenues until we have completed the
installation of the testing facility and we can produce product(s) for sale.
Liquidity and Capital Resources
Our balance sheet as of March 31, 2007 reflects cash of $44,080,
assets of $5,089,835 and $28,393 in current liabilities. Cash and cash
equivalents from inception to date have been sufficient to provide the
operating capital necessary to operate to date.
Notwithstanding, we anticipate generating losses and therefore we may be
unable to continue operations in the future. We anticipate we will require
additional capital up to approximately $15,000,000 to $45,000,000 and we
would have to issue debt or equity or enter into a strategic arrangement with
a third party. We intend to try and raise capital through a private offering
after this registration statement is declared effective and our shares are
quoted on the Over the Counter Bulletin Board. There can be no assurance
that additional capital will be available to us. We currently have no
agreements, arrangements or understandings with any person to obtain funds
through bank loans, lines of credit or any other sources.
Future Financings
We anticipate continuing to rely on equity sales of our common shares in
order to continue to fund our business operations. Issuances of additional
shares will result in dilution to our existing shareholders. There is no
assurance that we will achieve any of additional sales of our equity
securities or arrange for debt or other financing to fund our exploration and
development activities.
Going Concern Consideration
Our independent auditors included an explanatory paragraph in their report on
the accompanying financial statements regarding concerns about our ability to
continue as a going concern. Our financial statements contain additional
note disclosures describing the circumstances that lead to this disclosure by
our independent auditors.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
22
Legal Proceedings
-----------------
The Company is from time to time involved in litigation incident to the
conduct of its business. Certain litigation with third parties is routine
and incidental, such litigation can result in large monetary awards for
compensatory or punitive damages.
The Company is currently in litigation with Rosseau Limited Partners. On
January 31, 2007, Rosseau Limited Partners, one of the Subscribers to HYHY,
registered an action against HYHY, requesting the return of subscribed funds.
Subsequent to the last 10KSB, the company is in the process of completing the
documentation to effect settlement of the parties and a cessation of action
Directors, Executive Officers, Promoters and Control Persons
------------------------------------------------------------
Directors and Executive Officers
- --------------------------------
Our executive officers and directors and their respective ages as of July 5,
2007 are as follows:
Set forth below are the names, ages and present principal occupations or
employment, and material occupations, positions, offices or employments for
the past five years of our current directors and executive officers.
Name Age Position
- ------------- --- --------------------------------------
Ira Lyons 57 President and Director
Tom Rand 40 Treasurer/Secretary/Director
- ----------------------------------------------------------------------------
Biography of Ira Lyons, President and Director
- ----------------------------------------------
Vice President - Market Development November 1999 to Sept 2003
Exxecom Technologies / Xccept Systems
On a contract basis have been providing market development consulting
services to an Internet integrator and e-business solution provider.
Vice President 1997 to November 1999
Northern Communications Group Inc.
An independent telephone directory publisher with complete in-house ad
production and pagination capabilities, producing "the Gold Book" Telephone
Directory
23
Executive Vice President & Chief Operating Officer, 1995-1997
ES-TX Distribution Inc.
Packard-Edison Computers Inc.
NetGlobe Access Centres
A vertically integrated computer hardware and software assembly, distribution
and retailing group involved in the business
Senior Vice President, 1993-1995
AX.s Communications Group
A telecommunications group involved in the development of custom long-distance
call costing systems
Partner, 1991-1993
The Rally Group
A Retail, Franchise and Marketing consulting group specializing in Franchise
structuring and implementation.
President, 1987-1990
Wickets Tickets Inc.
A chain of retail ticketing establishments located in the TTC Subway system.
Executive Vice President, 1990-1991
Treats International Enterprises Inc.
Executive Vice President & General Manager, 1979-1987
Treats Inc.
One of Canada's largest specialty food franchises with 200+ locations across
North America.
Vice President, Administration & Development, 1971-1979
Tiffany's Bakery Inc.
A Canadian owned, Toronto based, U.S. bakery chain that grew from a concept in
1971 to a 250+ store chain located in 43 states.
Education
- ---------
University of Toronto, Innis College Main Campus -1968 to 1970
U of T Extension, Business Administration & Accounting - 1974
OMBA, Mortgage Broker's License -1989
Seneca College, OREA Real Estate License -1993
W. Lyon McKenzie Secondary School - Graduated 1967
24
Biography of Tom Rand, Treasurer/Secretary and Director
- -------------------------------------------------------
Tom Rand - founded an Interactive Voice Response (IVR) software company - Voice
Courier Inc (VCi).- in 1991, and oversaw its expansion to operations of 100
employees in 3 countries and revenue in excess of 12M US annually. Voice
Courier Mobile Inc. was founded in 2004 to move into SMS-text system software.
The VCi Group of Companies was profitable for each of the1 2 years it was under
his control. Both companies were sold in May, 2005. In August, 2005 Tom
founded VCi Green Funds Inc., a private equity firm active in the 'greentech'
sector. Tom joined CHEC as V.P. Environmental Science in January, 2006.
Education
- ---------
Tom Rand has a BASc Electrical Engineering and Applied Mathematics, University
of Waterloo, a MSc Philosophy of Science, London School of Economics, Kings
College, University of London, a MA Philosophy University of Toronto, and is
presently working on a PhD at the University of Toronto.
Related Party Transactions
- --------------------------
The Distribution Agreement technology is owned by Canadian Hydrogen Energy
Company, Ltd., a privately owned Canadian company. Certain of the owners of
Canadian Hydrogen Energy Company, Ltd., are also shareholders in Hydrogen
Hybrid Technologies, Inc. (?)
Involvement in Certain Legal Proceedings
- ----------------------------------------
Our directors, executive officers and control persons has not been involved
in any of the following events during the past five years and which is
material to an evaluation of the ability or the integrity of our directors or
executive officer:
1. 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;
2. any conviction in a criminal proceeding or being subject to a pending
criminal proceeding (excluding traffic violations and other minor
offences);
3. being 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 or banking activities; and
4. being found by a court of competent jurisdiction (in a civil action), the
SEC 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.
25
Compensation
- ------------
We presently do not pay our officers/directors any salary or consulting fee.
We do not anticipate paying compensation to officers/directors until our
Company has secured adequate financing.
We do not have any employment agreements with our officers/directors. We do
not maintain key-man life insurance for any our executive officers/directors.
EXECUTIVE COMPENSATION
Summary Compensation Table
As a result of our the Company's current limited available cash, no officer or
director received compensation since the inception of the company. Hydrogen
Hybrid Technology intends to pay salaries when financing permits.
SUMMARY COMPENSATION TABLES
------------------------------------------------------
Annual Compensation
------------------------------------------------------
Name and Other Annual Stock
Principal Position Year Salary ($) Bonus ($) Compensation ($) Awards($)
- -------------------------------------------------------------------------------
Ira Lyons
HYHY
President 2006 -0- -0- -0- -0-
2005 -0- -0- -0- -0-
Tom Rand
HYHY
Treasurer
Secretary 2006 -0- -0- -0- -0-
2005 -0- -0- -0- -0-
- -------------------------------------------------------------------------------
26
Long Term Compensation Table
------------------------------------------------------
Long Term Compensation
------------------------------------------------------
Awards Payouts
------------------------------------------------------
Restricted Stock Securities LTIP All Other
Name and Principal Award(s)($) Underlying Options/ Payouts Compensation
Position Year SARs(#) ($) ($)
- -----------------------------------------------------------------------------
Ira Lyons
HYHY
President 2006 -0- -0- -0- -0-
2005 -0- -0- -0- -0-
Tom Rand
HYHY
Treasurer
Secretary 2006 -0- -0- -0- -0-
2005 -0- -0- -0- -0-
- -------------------------------------------------------------------------------
We do not pay to our directors or officers any salary or consulting fee.
We do not pay to our directors any compensation for serving as a director on
our board of directors.
The Company currently does not have employment agreements with its executive
officer. The executive officer/director of the Company has agreed to take no
salary until the Company has secure necessary financing to support business
plan. The officer will not be compensated for services previously
provided. He will receive no accrued remuneration.
Stock Option Grants
We did not grant any stock options to the executive officers or directors
from inception through July 23, 2007 .
Family Relationships
- --------------------
No are no family relationship between our officers, directors and major
shareholders.
27
Term of Office
- --------------
Our directors are appointed for a one-year term to hold office until the next
annual general meeting of our shareholders or until removed from office in
accordance with our bylaws. Our officers are appointed by our board of
directors and hold office until removed by the board.
Significant Employees
- ---------------------
We have no significant employees other than Officers/Directors. We conduct
our business through agreements with consultants and arms-length third
parties.
Audit Committee Financial Expert
- --------------------------------
We do not have an audit committee financial expert nor do we have an audit
committee established at this time.
Auditors; Code of Ethics; Financial Expert
- ------------------------------------------
Our principal independent accountant is Schwartz Levitsky Feldman LLP,
Chartered Accountant. We do not currently have a Code of Ethics applicable
to our principal executive, financial and accounting officer. We do not have
an audit committee or nominating committee.
Potential Conflicts of Interest
- -------------------------------
We are not aware of any current or potential conflicts of interest with any
of our officers/directors.
28
Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------
The following table lists, as of July 23, 2007 , the number of shares of Common
Stock beneficially owned by (i) each person or entity known to our Company to
be the beneficial owner of more than 5% of the outstanding common stock; (ii)
each officer and director of our Company; and (iii) all officers and
directors as a group. Information relating to beneficial ownership of common
stock by our principal shareholders and management is based upon information
furnished by each person using "beneficial ownership" concepts under the
rules of the Securities and Exchange Commission. Under these rules, a person
is deemed to be a beneficial owner of a security if that person has or shares
voting power, which includes the power to vote or direct the voting of the
security, or investment power, which includes the power to vote or direct the
voting of the security. The person is also deemed to be a beneficial owner
of any security of which that person has a right to acquire beneficial
ownership within 60 days. Under the Securities and Exchange Commission
rules, more than one person may be deemed to be a beneficial owner of the
same securities, and a person may be deemed to be a beneficial owner of
securities as to which he or she may not have any pecuniary beneficial
interest. Except as noted below, each person has sole voting and investment
power.
The percentages below are calculated based on 129,071,362 shares of our
common stock issued and outstanding as of July 23, 2007 . We do not have any
outstanding options, warrants or other securities exercisable for or
convertible into shares of our common stock.
Amount
Title Name and Address of shares Percent
of of Beneficial held by of
Class Owner of Shares Position Owner Class(1)
- ----------------------------------------------------------------------------
Common Ira Lyons(2) President 4,000,000 3.1%
Common Tom Rand(3) Treas/Sec. 0 0.0%
Common Frank Carino(4) Shareholder 82,000,000 63.5%
Common CHEC(5) Shareholder 4,000,000 3.1%
Common HYHY ESOP(6) Shareholder 9,000,000 7.0%
- -----------------------------------------------------------------------------
All Executive Officers, Directors
as a Group (2 persons) 4,000,000 3.1%
(1) The percentages listed in the percent of class column are based upon
129,071,362 issued and outstanding shares of Common Stock.
(2) Ira Lyons, 1845 Sandstone Manor Unit #11, Pickering, ON L1W3X9 Canada
(3) Tom Rand, 1845 Sandstone Manor Unit #11, Pickering, ON L1W3X9 Canada
(4) Frank Carino, 182 Wellington St. W, Bowmanville, Ontario L1C 1W3
(5) Canadian Hydrogen Energy Company Ltd., 182 Wellington St. W, Bowmanville,
Ontario L1C 1W3
(6) HYHY ESOP, 1845 Sandstone Manor Unit #11, Pickering, ON L1W3X9 Canada
29
We are not aware of any arrangements that may result in "changes in control"
as that term is defined by the provisions of Item 403(c) of Regulation S-B.
We believe that all persons named have full voting and investment power with
respect to the shares indicated, unless otherwise noted in the table. Under
the rules of the Securities and Exchange Commission, a person (or group of
persons) is deemed to be a "beneficial owner" of a security if he or she,
directly or indirectly, has or shares the power to vote or to direct the
voting of such security, or the power to dispose of or to direct the
disposition of such security. Accordingly, more than one person may be deemed
to be a beneficial owner of the same security. A person is also deemed to be
a beneficial owner of any security, which that person has the right to
acquire within 60 days, such as options or warrants to purchase our common
stock.
Certain Relationships and Related Transactions
----------------------------------------------
Our officers/directors can be considered a promoter of Hydrogen Hybrid
Technologies, Inc. in consideration of their participation and managing of
the business of the company.
Through a Board Resolution, the Company hired the professional services of
Schwartz Levitsky Feldman LLP, Chartered Accountants, to perform audited
financials for the Company. Schwartz Levitsky Feldman LLP own no stock in
the Company. The company has no formal contracts with its accountants, they
are paid on a fee for service basis.
Other than as set forth above, there are no transactions since our inception,
or proposed transactions, to which we were or are to be a party, in which any
of the following persons had or is to have a direct or indirect material
interest:
a) Any director or executive officer of the small business issuer;
b) Any majority security holder; and
c) Any member of the immediate family (including spouse, parents, children,
siblings, and in-laws) of any of the persons in the above.
30
Selling Shareholders
--------------------
The selling shareholders named in this prospectus are offering all of the
8,323,862 shares of common stock offered through this prospectus. The
selling shareholders acquired the 8,323,862 shares of common stock offered
through private offerings that were exempt from registration under Regulation
S of the Securities Act of 1933, as amended (the "Securities Act"). The
Warrant holders paid $0.75 per converted share.
The following table provides, as of the date of this prospectus, information
regarding the beneficial ownership of our common stock held by each of the
selling shareholders, including:
1. the number of shares owned by each prior to this offering;
2. the total number of shares that are to be offered by each;
3. the total number of shares that will be owned by each upon completion
of the offering;
4. the percentage owned by each upon completion of the offering; and
5. the identity of the beneficial holder of any entity that owns the shares.
Total Total
Number of Shares
Shares to to be Percent
Common Be Owned Owned
Shares Offered for Upon upon
Owned Prior Selling Completion completion
To this Shareholder of this of this
Name of Selling Stockholder Offering Account(1) Offering Offering(2)
- --------------------------- ----------- ----------- -------- ------------
AITCHISON WAYNE 15,000 15,000 Nil Nil
ALEXANDER KATE 120,000 120,000 Nil Nil
AZZAPARDI MARIO 13,500 13,500 Nil Nil
BADA LORENZO 300,000 300,000 Nil Nil
CACHETAS JIMMY 75,000 75,000 Nil Nil
CANDELARESI GIUSEPPE 105,000 105,000 Nil Nil
CAPUTO ROSA 7,500 7,500 Nil Nil
CARDINALE FILOMENA 13,500 13,500 Nil Nil
CARDINALE FRANCO 7,500 7,500 Nil Nil
CARDINALE FRANCESCA 6,000 6,000 Nil Nil
CASALE LUCIO 15,000 15,000 Nil Nil
CHEUNG JOHN, PING YAM 75,000 75,000 Nil Nil
CHEUNG WAI KEUNG 45,000 45,000 Nil Nil
COCHI ALBERT 45,000 45,000 Nil Nil
CHUNG STANLEY 30,000 30,000 Nil Nil
CIRILLO VINCENZO 210,000 210,000 Nil Nil
CIRILLO FRANK 90,000 90,000 Nil Nil
CLARKE SUZZETTE 15,000 15,000 Nil Nil
CLOUSE BRIAN 15,000 15,000 Nil Nil
31
COBB MARK 37,500 37,500 Nil Nil
COLONNA MARINA 30,000 30,000 Nil Nil
CORPORATE EVENT MANGEMENT 30,000 30,000 Nil Nil
CURTI DAVIDE 37,500 37,500 Nil Nil
DALE JAMES 15,000 15,000 Nil Nil
D'ALESSIO MARIA LUISA 45,000 45,000 Nil Nil
DANISI GUISEPPE 15,000 15,000 Nil Nil
D'ELIA AMELIA 60,000 60,000 Nil Nil
DELSI TONY 45,000 45,000 Nil Nil
D'Erasmo Lucy 300,000 300,000 Nil Nil
DICKSON KIM 7,500 7,500 Nil Nil
DIGIAMMARINO GABRIEL 45,000 45,000 Nil Nil
DIGIAMMARINO ROBERT 45,000 45,000 Nil Nil
DIGIAMMARINO SAM 45,000 45,000 Nil Nil
DIMANNO DANIEL 16,500 16,500 Nil Nil
DIMANNO M 7,500 7,500 Nil Nil
DIMARCO FRANK & MARIANNE 30,000 30,000 Nil Nil
DIMMANO CARMENLINDA 7,500 7,500 Nil Nil
DIPEDE CRISTINA 52,500 52,500 Nil Nil
EVELINE HOLDINGS 150,000 150,000 Nil Nil
FACCIPONTE ANTONY 15,000 15,000 Nil Nil
FALCON INVESTMENTS 72,000 72,000 Nil Nil
FILICE MARIO 300,000 300,000 Nil Nil
FIRMANI NADIA 52,500 52,500 Nil Nil
FLORENCE MEYER 75,000 75,000 Nil Nil
FUSCO PAT 30,000 30,000 Nil Nil
Germano Alex 170,000 170,000 Nil Nil
GIANDOMENCIO FERNANDO 15,000 15,000 Nil Nil
GRECO MARIO 30,000 30,000 Nil Nil
GRISONICH MARINO 15,000 15,000 Nil Nil
GUAGLIANO GUS 7,500 7,500 Nil Nil
HASSAN KAMAL 3,750 3,750 Nil Nil
HYRNISAK A. 15,000 15,000 Nil Nil
IANNELLO FABIO 15,000 15,000 Nil Nil
IANNELLO RICHARD 15,000 15,000 Nil Nil
IAVARONE ANTONIO 30,000 30,000 Nil Nil
IAVARONE ALBERT 15,000 15,000 Nil Nil
IAVARONE ROSE 12,000 12,000 Nil Nil
IAVARONE TONY of
(TAG PROPERTIES) 15,000 15,000 Nil Nil
ING DR. ALAN 188,492 188,492 Nil Nil
IVTZI JIM 30,000 30,000 Nil Nil
JULIEN MAURICE 37,500 37,500 Nil Nil
KELERIS JULIE 6,000 6,000 Nil Nil
LABATE ANTONIO 9,000 9,000 Nil Nil
LALICATA ENZO 90,000 90,000 Nil Nil
LAMPARSKI GEORGE 7,500 7,500 Nil Nil
Larrosa Ernesto 30,000 30,000 Nil Nil
32
LAW IVAN YUEN CHUNG 15,000 15,000 Nil Nil
LETTIERI LOUIS 105,000 105,000 Nil Nil
LEVY JACOB 15,000 15,000 Nil Nil
LIN MARK 75,000 75,000 Nil Nil
LIU DIAN 37,500 37,500 Nil Nil
LIVOLSI CARLO 1,050,000 1,050,000 Nil Nil
LUNARDO ANDREA 15,000 15,000 Nil Nil
MAKAUSKAS EDWARD 45,000 45,000 Nil Nil
Mamone Danielle 59,520 59,520 Nil Nil
MARISCO SESTO 30,000 30,000 Nil Nil
MARWOOD STEPHANIE 9,000 9,000 Nil Nil
MASTRACCI CLAUDIO 20,250 20,250 Nil Nil
MASTROIANNI JOHN 15,000 15,000 Nil Nil
MASTROIANNI Natale 15,000 15,000 Nil Nil
McLaughlin Brian and Sharon 6,300 6,300 Nil Nil
MIELE JOE 30,000 30,000 Nil Nil
MIROTTI ANTONIO 75,000 75,000 Nil Nil
Mirotti Tony 150,000 150,000 Nil Nil
Muia Dina 60,000 60,000 Nil Nil
NAPOLEONI STEFANO 10,500 10,500 Nil Nil
NARANG KABIR 3,000 3,000 Nil Nil
NATMAR 120,000 120,000 Nil Nil
Oswald Dr. John 300,000 300,000 Nil Nil
PATEL IMRAN 3,750 3,750 Nil Nil
PATELLA CINDY 30,000 30,000 Nil Nil
Patella Cindy 48,000 48,000 Nil Nil
PIRUZZA Rosalina 450,000 450,000 Nil Nil
POMPONI EVA 60,000 60,000 Nil Nil
PORTMAN LESLIE 22,500 22,500 Nil Nil
RAJCHGOD PAUL 15,000 15,000 Nil Nil
ROQUE NANCY 15,000 15,000 Nil Nil
Sabo Otto 75,000 75,000 Nil Nil
SACCICCIA ART 300,000 300,000 Nil Nil
SALAPOUTIS DONALD 15,000 15,000 Nil Nil
SHEMILT DAVID 45,000 45,000 Nil Nil
SILVAGGIO FRANK 25,500 25,500 Nil Nil
SINOPOLI MARIO 12,000 12,000 Nil Nil
SORGINI STEVE 45,000 45,000 Nil Nil
SOUTAR W.B 15,000 15,000 Nil Nil
STEDANMAR HOLDINGS LTD 25,200 25,200 Nil Nil
STRATTON NEIL 37,500 37,500 Nil Nil
SUNGOLD REALTY INC. 45,000 45,000 Nil Nil
T.H.I 375,000 375,000 Nil Nil
TANG PATRICIA HOI SHAN 30,000 30,000 Nil Nil
TANNER NEIL 300,000 300,000 Nil Nil
TEPER IRVING 204,000 204,000 Nil Nil
TESTANI RINO 15,000 15,000 Nil Nil
TITO DANNY 15,000 15,000 Nil Nil
33
URSO DAVID 30,000 30,000 Nil Nil
VANI MAURO 15,000 15,000 Nil Nil
VELENOSI ALLAN 11,100 11,100 Nil Nil
VIGNA ANGELO 30,000 30,000 Nil Nil
WASHINGTON WILLIAM 22,500 22,500 Nil Nil
WILLIAMS MARCUS 61,500 61,500 Nil Nil
WINSLOW ROBERT 7,500 7,500 Nil Nil
WROBLWSKA MONIKA 22,500 22,500 Nil Nil
YUSUF TAUFIQ 30,000 30,000 Nil Nil
Zakarow Michael 46,000 46,000 Nil Nil
1146992 Ontario Ltd
Emmek Corp 37,500 37,500
Total: 8,323,862 8,323,862
1) This table assumes that each shareholder will sell all of his/her shares
available for sale during the effectiveness of the registration statement
that includes this prospectus. Shareholders are not required to sell their
shares.
2) The percentage is based on 129,071,362 common shares outstanding as of
July 23, 2007 .
The named party beneficially owns and has sole voting and investment power
over all shares or rights to these shares, unless otherwise shown in the
table. The numbers in this table assume that none of the selling shareholders
sells shares of common stock not being offered in this prospectus or
purchases additional shares of common stock, and assumes that all shares
offered are sold.
All of the selling shareholders:
1. have not had a material relationship with us other than as a shareholder at
any time within the past two years; or
2. has ever been one of our officers or directors.
34
Expenses of Issuance and Distribution
We have agreed to pay all expenses incident to the offering and sale to the
public of the shares being registered other than any commissions and
discounts of underwriters, dealers or agents and any transfer taxes, which
shall be borne by the selling security holders. The expenses which we are
paying are set forth in the following table.
Nature of Expenses:
Amount
------
Securities and Exchange Commission registration fee $ 191
Legal fees and miscellaneous expenses* $1,000
Audit Fees $2,000
Printing* $ 809
Transfer Agent Fees* $2,500
------
Total $6,500
======
*Estimated Expenses.
Plan of Distribution
--------------------
Timing of Sales
The Selling Shareholders may offer and sell the shares covered by this
prospectus at various times. The Selling Shareholders will act independently
of us in making decisions with respect to the timing, manner and size of each
sale.
No Known Agreements to Resell the Shares
To our knowledge, no Selling Shareholder has any agreement or understanding,
directly or indirectly, with any person to resell the shares covered by this
prospectus.
Offering Price
The Selling Shareholders will sell their shares to the public at:
1. the market price prevailing at the time of sale;
2. a price related to such prevailing market price; or
3. such other price as the selling shareholders determine from time to time.
35
The sales price to the public will vary according to the selling decisions of
each Selling Shareholder and the market for our stock at the time of resale.
Manner of Sale
The selling shareholders named in this prospectus must comply with the
requirements of the Securities Act and the Exchange Act in the offer and sale
of the common stock. The shares may be sold by means of one or more of the
following methods:
1. a block trade in which the broker-dealer so engaged will attempt to
sell the shares as agent, but may position and resell a portion of
the block as principal to facilitate the transaction;
2. purchases by a broker-dealer as principal and resale by that broker-
dealer for its account pursuant to this prospectus;
3. ordinary brokerage transactions in which the broker solicits
purchasers;
4. through options, swaps or derivative;
5. in transactions to cover short sales;
6. privately negotiated transactions; or
7. in a combination of any of the above methods.
The Selling Shareholders may sell their shares directly to purchasers or may
use brokers, dealers, underwriters or agents to sell their shares. Brokers
or dealers engaged by the selling shareholders may arrange for other brokers
or dealers to participate. Brokers or dealers may receive commissions,
discounts or concessions from the Selling Shareholders, or, if any such
broker-dealer acts as agent for the purchaser of shares, from the purchaser
in amounts to be negotiated immediately prior to the sale. The compensation
received by brokers or dealers may, but is not expected to, exceed that which
is customary for the types of transactions involved.
Broker-dealers may agree with a Selling Shareholder to sell a specified
number of shares at a stipulated price per share, and, to the extent the
broker-dealer is unable to do so acting as agent for a Selling Shareholder,
to purchase as principal any unsold shares at the price required to fulfill
the broker-dealer commitment to the Selling Shareholder. Broker-dealers who
acquire shares as principal may thereafter resell the shares from time to
time in transactions, which may involve block transactions and sales to and
through other broker-dealers, including transactions of the nature described
above, in the over-the-counter market or otherwise at prices and on terms
then prevailing at the time of sale, at prices then related to the then-
current market price or in negotiated transactions. In connection with
resales of the shares, broker-dealers may pay to or receive from the
purchasers of shares commissions as described above.
36
If our Selling Shareholders enter into arrangements with brokers or dealers,
as described above, we are obligated to file a post-effective amendment to
this registration statement disclosing such arrangements, including the names
of any broker dealers acting as underwriters.
The selling shareholders and any broker-dealers who execute sales for the
selling shareholders may be deemed to be an "underwriter" within the meaning
of the Securities Act in connection with such sales. In particular, during
such times as the selling shareholders may be deemed to be engaged in a
distribution of the common stock, and therefore be considered to be an
underwriter, they must comply with applicable law and may, among other
things:
1. Not engage in any stabilization activities in connection with our common
stock;
2. Furnish each broker or dealer through which common stock may be offered,
such copies of this prospectus, as amended from time to time, as may be
required by such broker or dealer; and
3. Not bid for or purchase any of our securities or attempt to induce any
person to purchase any of our securities other than as permitted under
the Exchange Act.
We can provide no assurance that all or any of the common stock offered will
be sold by the selling shareholders named in this prospectus.
We are bearing all costs relating to the registration of the common stock.
The selling shareholders, however, will pay any commissions or other fees
payable to brokers or dealers in connection with any sale of the common
stock.
Penny Stock Regulations
You should note that our stock is a penny stock. The Securities and Exchange
Commission has adopted Rule 15g-9 which generally defines "penny stock" to be
any equity security that has a market price (as defined) less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and "accredited investors". The term
"accredited investor" refers generally to institutions with assets in excess
of $5,000,000 or individuals with a net worth in excess of $1,000,000 or
annual income exceeding $200,000 or $300,000 jointly with their spouse. The
penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from the rules, to deliver a standardized risk
disclosure document in a form prepared by the SEC which provides information
about penny stocks and the nature and level of risks in the penny stock
market. The broker-dealer also must provide the customer with current bid and
offer quotations for the penny stock, the compensation of the broker-dealer
and its salesperson in the transaction and monthly account statements showing
the market value of each
37
penny stock held in the customer's account. The bid and offer quotations,
and the broker-dealer and salesperson compensation information, must be given
to the customer orally or in writing prior to effecting the transaction and
must be given to the customer in writing before or with the customer's
confirmation. In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from these 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 agreement to the transaction. These disclosure requirements may have
the effect of reducing the level of trading activity in the secondary market
for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor
interest in and limit the marketability of our common stock.
Blue Sky Restrictions on Resale
If a selling security holder wants to sell shares of our common stock under
this registration statement in the United States, the selling security
holders will also need to comply with state securities laws, also known as
"Blue Sky laws," with regard to secondary sales. All states offer a variety
of exemption from registration for secondary sales. Many states, for
example, have an exemption for secondary trading of securities registered
under Section 12(g) of the Securities Exchange Act of 1934 or for securities
of issuers that publish continuous disclosure of financial and non-financial
information in a recognized securities manual, such as Standard & Poor's.
The broker for a selling security holder will be able to advise a selling
security holder which states our common stock is exempt from registration
with that state for secondary sales.
Any person who purchases shares of our common stock from a selling security
holder under this registration statement who then wants to sell such shares
will also have to comply with Blue Sky laws regarding secondary sales.
When the registration statement becomes effective, and a selling security
holder indicates in which state(s) he desires to sell his shares, we will be
able to identify whether it will need to register or it will rely on an
exemption there from.
Dividend Policy
---------------
We have not declared or paid dividends on our Common Stock since our
formation, and we do not anticipate paying dividends in the foreseeable
future. Declaration or payment of dividends, if any, in the future, will be
at the discretion of our Board of Directors and will depend on our then
current financial condition, results of operations, capital requirements and
other factors deemed relevant by the board of directors. There are no
contractual restrictions on our ability to declare or pay dividends.
38
Share Capital
-------------
Transfer Agent
We are currently utilizing the services of Empire Stock Transfer, Inc.,
2470 St. Rose Pkwy, Suite 304, Henderson, NV 89074, Telephone: 702-818-5898.
Empire serves in the capacity as our transfer agent to have us track and
facilitate the transfer of our stock.
DESCRIPTION OF SECURITIES
General
Our authorized capital stock consists of 180,000,000 shares of common stock,
with a par value of $0.001 per share. At July 23, 2007 , there were
129,041,362 common shares outstanding which were held by approximately two
hundred (200) stockholders of record. There are 20,000,000 preferred shares
authorized and none issued.
Common Stock
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, the holders of our common stock will 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. Holders of our common
stock representing thirty three and one-third percent (33 1/3%) 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 By-
laws do not provide for cumulative voting in the election of directors.
Holders of our common stock have no pre-emptive rights, no conversion rights
and there are no redemption provisions applicable to our common stock.
Options
We have not issued and do not have outstanding any options to purchase shares
of our common stock.
39
Rule 144 Shares
- ---------------
As of July 23, 2007 , 21,000,000 shares currently issued and outstanding could
be resold pursuant to Section 144 of the Securities Act. These shares have
been held by non-affiliates for 2 years and satisfies 144(K).
In general, under Rule 144 as currently in effect, a person who has
beneficially owned shares of a company's common stock for at least one year
is entitled to sell within any three month period a number of shares that
does not exceed the greater of:
1. one percent of the number of shares of the company's common stock then
outstanding, which, in our case, will equal approximately 1,207,475
shares as of the date of this prospectus, or;
2. the average weekly trading volume of the company's common stock during
the four calendar weeks preceding the filing of a notice on form 144 with
respect to the sale.
Sales under Rule 144 are also subject to manner of sale provisions and notice
requirements and to the availability of current public information about the
company.
Under Rule 144(k), a person who is not one of the company's affiliates at any
time during the three months preceding a sale, and who has beneficially owned
the shares proposed to be sold for at least two years, is entitled to sell
shares without complying with the manner of sale, public information, volume
limitation or notice provisions of Rule 144.
Nevada Anti-Takeover laws
Nevada revised statutes sections 78.378 to 78.3793 provide state regulation
over the acquisition of a controlling interest in certain Nevada corporations
unless the articles of incorporation or bylaws of the corporation provide
that the provisions of these sections do not apply. Our articles of
incorporation and bylaws do not state that these provisions do not apply. The
statute creates a number of restrictions on the ability of a person or entity
to acquire control of a Nevada company by setting down certain rules of
conduct and voting restrictions in any acquisition attempt, among other
things. The statute is limited to corporations that are organized in the
state of Nevada and that have 200 or more stockholders, at least 100 of whom
are stockholders of record and residents of the State of Nevada; and does
business in the State of Nevada directly or through an affiliated
corporation. Because of these conditions, the statute does not apply to our
company.
40
Legal Matters
-------------
Law Offices of Thomas C. Cook has opined on the validity of the shares of
common stock being offered hereby.
Experts
-------
The financial statements included in this prospectus and in the registration
statement have been audited by Schwartz Levitsky Feldman LLP, Chartered
Accountant, an independent registered public accounting firm, to the extent
and for the period set forth in their report appearing elsewhere herein and
in the registration statement, and are included in reliance upon such report
given upon the authority of said firm as experts in auditing and accounting.
Interest of Named Experts and Counsel
No expert or counsel named in this prospectus as having prepared or certified
any part of this prospectus or having given an opinion upon the validity of
the securities being registered or upon other legal matters in connection
with the registration or offering of the common stock was employed on a
contingency basis or had, or is to receive, in connection with the offering,
a substantial interest, directly or indirectly, in the registrant or any of
its parents or subsidiaries. Nor was any such person connected with the
registrant or any of its parents, subsidiaries as a promoter, managing or
principal underwriter, voting trustee, director, officer or employee.
Our officers/directors can be considered promoters of Hydrogen Hybrid
Technologies, Inc. in consideration of her participation and managing of the
business of the company since its Merger.
Indemnification for Securities Act Liabilities
----------------------------------------------
Our Articles and By-laws provide to the fullest extent permitted by law, our
directors or officers, former directors and officers, and persons who act at
our request as a director or officer of a body corporate of which we are a
shareholder or creditor shall be indemnified by us. We believe that the
indemnification provisions in our By-laws are necessary to attract and retain
qualified persons as directors and officers. Insofar as indemnification for
liabilities arising under the Securities Act of 1933 (the "Act" or
"Securities Act") may be permitted to directors, officers or persons
controlling us pursuant to the foregoing provisions, or otherwise, we have
been advised that in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
41
Reports to Security Holders
At this time, we are not required to provide annual reports to security
holders. However, shareholders and the general public may view and download
copies of all of our filings with the SEC, including annual reports,
quarterly reports, and all other reports required under the Securities
Exchange Act of 1934, by visiting the SEC site (http://www.sec.gov) and
performing a search of our electronic filings. We intend to file with the
Securities and Exchange Commission a Form 8-A to register our common stock
pursuant to Section 12(g) of the Securities and Exchange Act of 1934, as soon
as practicable after this registration statement is declared effective by the
Securities and Exchange Commission. Thereafter, annual reports will be
delivered to security holders as required or they will be available online.
Where You Can Find More Information
-----------------------------------
We have filed a registration statement on Form SB-2 under the Securities Act
with the SEC for the securities offered hereby. This prospectus, which
constitutes a part of the registration statement, does not contain all of the
information set forth in the registration statement or the exhibits and
schedules which are part of the registration statement. For additional
information about us and our securities, we refer you to the registration
statement and the accompanying exhibits and schedules. Statements contained
in this prospectus regarding the contents of any contract or any other
documents to which we refer are not necessarily complete. In each instance,
reference is made to the copy of the contract or document filed as an exhibit
to the registration statement, and each statement is qualified in all
respects by that reference. Copies of the registration statement and the
accompanying exhibits and schedules may be inspected without charge (and
copies may be obtained at prescribed rates) at the public reference facility
of the SEC at Room 1024, 100 F Street, N.E. Washington, D.C. 20549.
You can request copies of these documents upon payment of a duplicating fee
by writing to the SEC. You may call the SEC at 1-800-SEC-0330 for further
information on the operation of its public reference rooms. Our filings,
including the registration statement, will also be available to you on the
Internet web site maintained by the SEC at http://www.sec.gov.
42
FINANCIAL STATEMENTS
Hydrogen Hybrid Technologies, Inc.
FINANCIAL STATEMENTS
September 30, 2006
March 31, 2007
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Financial Statement
-------------------
PAGE
----
Year end 2006 and Year end 2005 Financials:
Independent Auditors' Report F-1a
Balance Sheet F-2a
Statements of Operations F-3a
Statements of Changes in Stockholders' Equity F-4a-5a
Statements of Cash Flows F-6a
Notes to Financials F-7a-10a
Six Months ending March 31, 2007 and March 31, 2006:
Balance Sheet F-1b
Statements of Operations F-2b
Statements of Cash Flows F-4b
Notes to Financials F-5b-6
43
Schwartz Levitsky Feldman LLP
CHARTERED ACCOUNTANTS
LICENSED PUBLIC ACCOUNTANTS
TORONTO - MONTREAL
SLF
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Hydrogen Hybrid Technologies Inc.
(A Development Stage Company)
We have audited the accompanying balance sheets of Hydrogen Hybrid
Technologies Inc. (incorporated in Ontario, Canada) as at September 30, 2006
and 2005 and the related statements of operations, cash flows and
stockholders' deficiency for the years then ended. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Hydrogen Hybrid Technologies
Inc. as at September 30, 2006 and 2005 and the results of its operations and
its cash flows for the years then ended in accordance with generally accepted
accounting principles in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company is a development stage company and has no
established source of revenues. These conditions raise substantial doubt
about its ability to continue as going concern. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
/s/ Schwartz Levitsky Feldman LLP
- ---------------------------------
Schwartz Levitsky Feldman LLP
Toronto, Ontario, Canada
March 30, 2007
Chartered Accountants
Licensed Public Accountants
1167 Caledonia Road
Toronto, Ontario M6A 2X1
Tel. 416-785-5353
F-1a
Hydrogen Hybrid Technologies Inc.
(A Development Stage Company)
Balance Sheets
As at September 30, 2006 (in US Dollars)
=============================================================================
Balance Sheets
2006 2005
- -----------------------------------------------------------------------
Assets
Current
Cash $ 1,026,571 $ -
Notes receivable (Note 4) 302,672 -
- -----------------------------------------------------------------------
1,329,243 -
Distribution Rights (Note 5) 4,254,100
Other Assets - 2,231
- -----------------------------------------------------------------------
$ 5,583,343 $ 2,231
=======================================================================
Liabilities
Current
Accounts payable and accrued
liabilities (Note 9) $ 1,496,284 $ 2,149
- -----------------------------------------------------------------------
1,496,284 2,149
Stockholders' Equity
Capital Stock (Note 6) 82 82
Special Warrants Subscribed (Note 7ii) 4,267,973 -
Deficit, accumulated during development (180,114) -
Accumulated Other Comprehensive Loss (802) -
- -----------------------------------------------------------------------
4,087,139 82
- -----------------------------------------------------------------------
$ 5,583,343 $ 2,231
=======================================================================
Nature of Operations (Note 1)
Contingencies (Note 10)
Approved by the Board _______________________ Director
"Frank Carino"
See accompanying notes to financial statements.
F-2a
Hydrogen Hybrid Technologies Inc.
(A Development Stage Company)
Statements of Operations
For the Years Ended September 30, 2006 and 2005 (in US Dollars)
=============================================================================
Statements of Operations
From Date of
Inception
(Jan 13, 2005 to
Sept 30, 2005)
Cumulative
Since
Inception 2006 2005
- ---------------------------------------------------------------------
Sales $ - $ - $ -
- ---------------------------------------------------------------------
Expenses
Consulting - management 17,824 17,824 -
General and administrative 28,666 28,666 -
Professional Fees 133,624 133,624 -
- ---------------------------------------------------------------------
Net Loss $ (180,114) $(180,114) $ -
=====================================================================
Basic and fully diluted net loss per share $ (.006) $ -
=====================================================================
Shares used in computing basic and diluted net loss per share
30,000,000 30,000,000
=====================================================================
See accompanying notes to financial statements.
F-3a
Hydrogen Hybrid Technologies Inc.
(A Development Stage Company)
Statements of Stockholders Deficiency
For the Years Ended September 30, 2006 and 2005 (in US Dollars)
=============================================================================
Statements of Stockholders Deficiency
Common Stock Accumulated
----------------- Additional Other
Number of No Par Paid-In Comprehensive Accumulated Comprehensive
Shares value Capital Income (Loss) Deficit (Loss)
- -----------------------------------------------------------------------------
Balance
at
January 13,
2005
(date of
Incorporation
Issuance
of Common
Stock for
Cash 30,000,000 $82.00
Foreign
exchange
translation
adjustments
for rate
changes $ -
Net Loss -
-------------
Comprehensive
Loss $ -
--------------------------------------------------------- -------------
Balance at
September 30,
2005 30,000,000 $82.00
Issuance
of Common
Stock
for
Cash - $ -
Foreign
exchange
translation
adjustments
for rate
changes (882) $ (882)
Net
Loss (180,114) (180,114)
-------------
Comprehensive
Loss $ (180,996)
---------------------------------------------------------- -------------
Balance at
September 30,
2006 30,000,000 $82.00 $ - $ (882) $ (180,114)
----------------------------------------------------------
See accompanying notes to financial statements.
F-4a
Hydrogen Hybrid Technologies Inc.
(A Development Stage Company)
Statements of Cash Flows
For the Years Ended September 30, 2006 and 2005 (in US Dollars)
=============================================================================
Statements of Cash Flows
From Date of
Inception
(Jan 13, 2005 to
Sept 30, 2005)
Cumulative
Since
Inception 2006 2005
- -------------------------------------------------------------------
Cash flows from operating activities
Net loss for the year $ (180,114) $(180,114) $ -
- -------------------------------------------------------------------
Changes in non-cash working capital items
Notes receivable (301,185) (301,185) -
Accounts payable and accrued
Liabilities 1,488,733 1,486,584 2,149
Other assets - 2,231 (2,231)
- -------------------------------------------------------------------
1,007,434 1,007,516 (82)
Cash flows used in investing activities
Increase in intellectual property
& other assets (4,233,200) (4,233,200) -
- -------------------------------------------------------------------
(4,233,200) (4,233,200) -
Cash flow from financing activities
Issuance of capital stock 82 - 82
Issuance of share subscription
Agreements 4,247,005 4,247,005 -
- -------------------------------------------------------------------
4,247,087 4,247,005 82
Effect of foreign exchange
rate changes 5,250 5,250 -
- -------------------------------------------------------------------
Increase (decrease) in cash and cash
Equivalents during the year 1,026,571 1,026,571 -
Cash at beginning of year - - -
- -------------------------------------------------------------------
Cash at end of year $ 1,026,571 $ 1,026,571 $ -
===================================================================
Supplemental Disclosure:
Taxes paid - -
Interest paid - -
===================================================================
See accompanying notes to financial statements.
F-5a
Hydrogen Hybrid Technologies Inc.
(A Development Stage Company)
Notes to Financial Statements
Years Ended September 30, 2006 and 2005 (in US Dollars)
1. NATURE OF OPERATIONS
Hydrogen Hybrid Technologies Inc. was incorporated in Ontario under the
Ontario Business Corporation Act on January 13, 2005 as CHEC Rail Inc., and
subsequently changed its name to Hydrogen Hybrid Technologies Inc. on April
25, 2006.
Hydrogen Hybrid Technologies Inc. ("the Company" or "HYHY") is engaged in the
business of selling and distributing of on-board hydrogen generating and
injections systems for the Original Equipment Manufacturer (OEM), car and
light truck markets globally. HYHY has acquired the exclusive rights to
market a proprietary patented technology from a related company. In addition
it holds non-exclusive rights to distribute the product to other markets
including the heavy goods vehicle market (Commercial Transport Fleets).
The on-board hydrogen generating system strives to improve fuel consumption
and reduce pollution through the enhancement of the internal combustion
process. The technology consists of an on-board system which generates
hydrogen and oxygen by splitting distilled water. Once these gases are
available they are not stored but directly injected through the air intake of
an internal combustion engine. The result of the Hydrogen Fuel Injection
system ("HFI") is a reduction in pollution causing emission and an increase
in fuel efficiency and overall engine performance.
2. SIGNIFICANT ACCOUNTING POLICIES
These financial statements have been prepared by management in accordance
with generally accepted accounting principles ("GAAP") in the United States
and are stated in US Dollars. The preparation of financial statements in
accordance with US GAAP requires management to make estimates and assumptions
that effect the reporting amount of assets and liabilities and the disclosure
of contingent assets and liabilities to the date of the financial statements;
and revenue and expenses during the reporting period. Actual results could
differ from those estimates. These financial statements have, in management's
opinion, been properly prepared using careful judgment within reasonable
limits of materiality and with in the frame work of the significant
accounting policies.
(a) Revenue Recognition
Product sales are recorded when persuasive evidence of an arrangement
exists, price is fixed and determinable, product is delivered to the
external customer and collection is reasonably assured.
(b) Cash and Cash Equivalents
Cash and cash equivalents consists of cash in the bank and highly liquid
investments with maturities of less than three months and are carried at
cost plus accrued interest.
(c) Intangible asset and amortization
Distribution right is recorded at cost and is amortized over its
contracted life of fifteen years on a straight-line basis. The rights are
tested for impairment as described in the accounting policy on Impairment
of Long Lived Assets on an annual basis.
F-6a
Hydrogen Hybrid Technologies Inc.
(A Development Stage Company)
Notes to Financial Statements
Years Ended September 30, 2006 and 2005 (in US Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
(d) Deferred income taxes
The Company follows the asset and liability method of accounting for
income taxes. Temporary differences arising from the differences between
the income tax basis of an asset or liability and its carrying amount on
the balance sheet are used to calculate deterred income tax assets or
liabilities. Deferred income tax assets or liabilities are calculated
using enacted or substantively enacted income tax rates expected to apply
in the years that the assets or liabilities are expected to be realized
or settled. A valuation allowance Is provided to the extent that It is
more likely than not future income tax assets with not be realized.
(e) Impairment of long lived assets
Long-lived assets with finite useful lives are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. Impairment losses are
recognized when the carrying amounts of long-lived assets exceed the sum
of the undiscounted cash flows expected to result from their use and
eventual disposition and are measured as the amounts by which the long-
lived assets' carrying amounts exceed their fair values. The Company
completed a comparison of the present value of the expected future cash
flows of the distribution rights and concluded that there was no
impairment of the asset.
(f) Stock-based compensation plan
The Company has stock-based compensation plans which are described in
note 7. Any consideration received on the exercise of stock options or
sale of stock is credited to share capital. The Company records
compensation expense and credits contributed surplus for all stock
options granted. Stock options granted during the year are accounted for
in accordance with the fair value method of accounting for stock-based
compensation. The fair value of these options is estimated at the date of
grant using the Black-Scholes option pricing model.
(g) Comprehensive income
The Company has adopted SFAS No 130, "Reporting Comprehensive Income."
This statement establishes standards for reporting comprehensive income
and its components in a financial statement. Comprehensive income as
defined includes all changes in equity (net assets) during a period from
non-owner sources. Examples of items to be included in comprehensive
income, which are excluded from net income, include foreign currency
translation adjustments and unrealized gains and losses on available-for-
sale securities.
(h) Concentration of Risk
Cash, cash equivalents and marketable securities available-for-sale are
financial instruments that potentially subject the Company to
concentration of credit risk. The estimated fair market value of
financial instruments approximates the carrying value based on available
market information. The Company will has a policy of investing its excess
available funds in money market funds, commercial papers, corporate bonds
and securities issued by the Canadian and United States Governments and
its agencies and by policy, seeks to ensure both liquidity and safety of
principal. The policy also limits the investments to certain types of
instruments issued by institutions with strong investment grade credit
ratings and places restrictions on their terms and concentrations by type
and issuer.
F-7a
Hydrogen Hybrid Technologies Inc.
(A Development Stage Company)
Notes to Financial Statements
Years Ended September 30, 2006 and 2005 (in US Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
(i) Foreign Currency
The Company is a foreign private issuer and maintains its books and
records in Canadian dollars (their functional currency). The financial
statements of the Canadian Company are converted to US dollars as the
Company has elected to report in US dollars consistent with Regulation S-
X, Rule 3-20. The translation method used is the current rate method
which is the method mandated by SPAS No. 52 where the functional
liabilities are translated at the current rate, shareholders' equity
accounts are translated at historical rates and revenues and expenses ore
translated at average rates for the year.
(j) Financial Instruments
The carrying amount of the Company's accounts payable and accrued
liabilities approximates fair value because of the short term maturity of
these instruments. The Company's Note receivable approximates current
value due to the nature and the terms of the note being due prior to the
next fiscal year.
(k) Basic and Diluted Net (Loss) Earnings Per Share
Net (loss) earnings per share is computed using the weighted average
number of Common Stock outstanding. Common equivalent shares from all
outstanding stock options and warrants are excluded from the computation,
as their effect is anti-dilutive.
Note 3. Going concern
The Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has not commenced its planned principal
operations and it has not generated any revenues. In order to obtain the
necessary capital, the Company is seeking equity and/or debt financing. The
negative equity is the result of this activity and has been financed from the
equity raised to date. The negative working capital is a direct result of the
Distribution rights purchased from a related party and this position has been
rectified subsequent to the date of these financial statements as disclosed
within Note 9. If the financing does not provide sufficient capital, some of
the Stockholders of the Company have agreed to provide sufficient funds as a
loan over the next twelve-month period. However, the Company is dependent
upon its ability to secure equity and/or debt financing and there are no
assurances that the Company will be successful, without sufficient financing,
it would be unlikely for the Company to continue as a going concern.
Note 4. Notes Receivable
Unsecured promissory note receivable from an associated company controlled by
the same shareholder. The note bears interest at 7% per annum, calculated
monthly, to be paid on maturity date September 7, 2007.
F-8a
Hydrogen Hybrid Technologies Inc.
(A Development Stage Company)
Notes to Financial Statements
Years Ended September 30, 2006 and 2005
Note 5. Distribution Rights
On January 18, 2005, the Company entered into a Distribution Agreement with
Canadian Hydrogen Energy Company, Ltd., a Canadian privately owned related
company, controlled by the same Stockholders of the Company granting the
Distribution Agreement. The Distribution Agreement includes the rights to
sell and distribute on-board hydrogen generating and injections systems for
the OEM, car and light truck markets globally. The term of the agreement is
15 years plus two additional options of 10 years each. Distribution rights
will commence with a payment of the contract or earlier with written consent
of CHEC. The value of the distribution agreement was determined by Canadian
Hydrogen Energy Company Limited and is supported by an independent third
party valuator. As compensation for the rights granted under this agreement
the Company will be required to pay a total of $4,254,100 in cash ($4,750,000
CDN funds) and this agreement is effective only at such time as funds have
been advanced. (See Related Party Transaction.)
During this fiscal year, a total of $2,775,672 of funds has been advance and
the balance of the contractual obligation ($1,478,428) has been recognized
as a current liability. The right is recorded as an acquisition cost. No
amortization of the right has been recognized nor will be until the terms
have been met at that time the Company will begin amortization at the rate of
$283,600 per year for 15 years.
Note 6. Capital Stock
The Company is authorized to issue an unlimited number of shares. The common
shares are voting and participating shares without par value. As at September
30, 2006 and 2005 no preferred shares have been issued.
On January 13, 2005, the Company issued 30,000,000 shares of its no par value
for common stock to its founders for a total cash of $82 (US) or $100
(Canadian).
There have been no other issuances of common stock.
Note7. Common shares subject to issuance
The Company is authorized to issue Class "A" preferred shares, voting
redeemable, retractable and non-participating, non-cumulative dividend at a
variable rate up to a maximum of 15% per annum of the Redemption Amount.
without par value.
As at September 30, 2006, the Company has 5,382,745 common shares subject to
issuance as follows:
F-9a
Hydrogen Hybrid Technologies Inc.
(A Development Stage Company)
Notes to Financial Statements
Years Ended September 30, 2006 and 2005
Note 7. Common shares subject to issuance (Cont'd)
(i) Stock Options
The Company has established a stock option plan ("the Plan") for its key
employees and directors. The plan was established and approved by the Board on
February 1, 2005. Under the terms of the Plan, the aggregate number of common
shares reserved for issuance, together with any other employee stock option
plans, options for services and employee share purchase plans, will not exceed
10% of the issued and outstanding common shares of the Corporation from time
to time. The total number of options authorized by the Board on February 1,
2005 was 3,000,000 which were vested immediately.
In determining the stock-based compensation expense for the current and prior
years, the fair value of the options was estimated using the Black-Scholes
option pricing model with the following weighted average assumptions used for
grants as follows: unadjusted stock price $.0001, dividend yield of 0%,
expected volatility of 100%, risk free interest rate of 3.50% and expected
life of 5 years. Based on this analysis there was no requirement to book
compensation expense.
The following summarizes the stock option activities:
- -----------------------------------------------------------------------------
2006 2005
Weighted Weighted
Average Average
Number of Exercise Number of Exercise
Options Price Options Price
- ------------------------------------------------------------------------
Beginning Balance 3,000,000 $ 0.45 -
Granted - - 3,000,000 $ 0.45
Expired - - -
Exercised - - -
- ------------------------------------------------------------------------
Outstanding, end of year 3,000,000 $ 0.45 3,000,000 $ 0.45
- ------------------------------------------------------------------------
Exercisable 3,000,000 $ 0.45 3,000,000 $ 0.45
- ------------------------------------------------------------------------
The Company had the following stock options outstanding at Sep. 30, 2006:
- -----------------------------------------------------------------------------
Number of Options Exercise Price Expiry Date
- ------------------------------------------------------------------------
3,000,000 $0.45 February 1, 2010
- ------------------------------------------------------------------------
F-10a
Hydrogen Hybrid Technologies Inc.
(A Development Stage Company)
Notes to Financial Statements
Years Ended September 30, 2006 and 2005
Note 7. Common shares subject to Issuance (Cont'd)
(ii) Special Warrants Subscribed
During fiscal 2006 the Company issued 2,382,745 units at a price of $1.79
($2.00 CDN) per Special Warrant for an aggregate of $4,267,973. Each special
warrant will entitle the holder to receive, upon exercise and without
additional payment one common share in the capital of the Corporation on the
date "Expiry Date", which is earlier of:
i.) the sixth business day after the date that a receipt (the "Prospectus
Receipt") is issued by the last of the securities regulatory
authorities of Ontario, British Columbia and Alberta.
For a final prospectus of the Corporation; and
ii.) eighteen (18) months after the date of closing as here after defined.
iii.) The day immediately prior to the date on which the Corporation
completes a Going Public Event.
Each Special Warrant that has not been exercised prior to 5:00 p.m. eastern
daylight on the Expiry Date will be deemed to be exercised immediately prior
thereto, without any further action on the part of the holder thereof. The
Subscriber will not be entitled to exercise the Special Warrants prior to the
Expiry Date unless this restriction is waived by the Corporation.
At the year-end date none of these warrants were exercised by the warrant
holders.
Note 8. Related Party Transactions
The Distribution Agreement technology is owned by Canadian Hydrogen Energy
Company, Ltd., a privately owned Canadian company. The owners of Canadian
Hydrogen Energy Company, Ltd are the same owners of Hydrogen Hybrid
Technologies, Inc.
During the year the company advanced a total of $2,775,672 towards its
obligations of $4,254,100 for purchase of distribution rights as disclosed
within Note 5. The remainder of the obligation $1,478,428 has been accrued
and is contained within accounts payable.
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy for the
resolution of such conflicts
During the year ended September 30, 2006 the Company advanced $302,672 to an
associated corporation controlled by the same Stockholders. These advances
are unsecured and have interest bearing with terms as presented within Note
4.
F-11a
Hydrogen Hybrid Technologies Inc.
(A Development Stage Company)
Notes to Financial Statements
Years Ended September 30, 2006 and 2005
Note 9. Accounts Payable and Accrued Liabilities
Accounts payable consists of $1,478,428 due to the related party, Canadian
Hydrogen Energy Company Limited, for distribution rights and the balance of
$17,856 accrued for legal and accounting expenses.
Note 10. Income Taxes
The Company has loss carry-forwards of approximately $180,000 available,
which can be applied against future taxable income. The benefit of these
losses has not been recognized in these financial statements.
Note 11. Subsequent Events
On December 31, 2006, the Company completed a special warrants subscription
for 2,436,745 units at a price of $1.79 per Special Warrant for an aggregate
of $4,267,973 (2,382,745 units issued as at September 30, 2006 and 54,000
units for an additional $94,811 issued subsequent to year end) as described
in Note 7(ii). The warrants have been documented by the corporation's law firm
and distribution commenced during the month of February 2007. The first
distribution was made to Rosseau Limited Partners.
As of December 31, 2006, the close of Q1 2007, a further $1,053,722 had been
paid towards the distribution agreement liability, leaving the balance owing
as of Q1 at $424,706.
On January 31, 2007, Rosseau Limited Partners, one of the Subscribers to HYHY,
registered an action against HYHY, requesting the return of subscribed funds.
Legal counsel has been sought and it is their opinion that this action has no
basis for continuation. There is to be a discovery process sometime in March
2007 at which time the Company will request an immediate ruling of cessation.
Note 12. Recent Accounting Pronouncements
In December 2004, the FASB issued SEAS No. 153 "Exchanges of Nonmonetary
Assets, an amendment of Accounting Principles Board Opinion No. 29" ("SFAS
153"). This statement amends Accounting Principles Board Opinion (APB) No.
29, "Accounting for Nonmonetary Transactions" to eliminate the exception for
nonmonetary exchanges of similar productive assets and replaces it with a
general exception for exchanges of nonmonetary assets that have no commercial
substance. Under SFAS 153, if a nortmonetary exchange of similar productive
assets meets a commercial-substance criterion and fair value is determinable,
the transaction must be accounted for at fair value resulting in recognition
of any gain or loss. SPAS 153 was effective for nonmonetary transactions in
fiscal periods beginning after June 15, 2005. The Company adopted this
statement beginning in the first quarter of 2006.
In March 2005, the FASB issued Interpretation No. 47, "Accounting for
Conditional Asset Retirement Obligations, an Interpretation of FASB Statement
No. 143" ("FIN 47"). Under FIN 47, we are required to recognize a liability
for the fair value of a conditional asset retirement
F-12a
Hydrogen Hybrid Technologies Inc.
(A Development Stage Company)
Notes to Financial Statements
Years Ended September 30, 2006 and 2005
Note 12. Recent Accounting Pronouncements (Cont'd)
obligation if the fair value of the liability can be reasonably estimated.
Any uncertainty about the amount and/or timing of future settlement should be
factored into the measurement of the liability when sufficient information
exists. FIN 47 also clarifies when an entity would have sufficient
information to reasonably estimate the fair value. The provisions of FIN 47
were required to be applied no later than the end of fiscal years ending
after December 15, 2005. The Company adopted this statement beginning in the
first quarter of 2006.
In May 2005, the FASB issued SEAS No. 154, "Accounting Changes and Error
Corrections - a replacement of APB Opinion No. 20 and FASB Statement No. 3"
("SFAS 154"), this statement changes the requirements for the accounting for
and reporting of a change in accounting principle and applies to all
voluntary changes in accounting principle. It also applies to changes
required by an accounting pronouncement In the unusual instance that the
pronouncement does not include specific transition provisions. When a
pronouncement includes specific transition provisions, those provisions
should be followed. APB No. 20 required that most voluntary changes in
accounting principle be recognized by including in net income, of the period
of the change the cumulative effect of changing to the new accounting
principle. This statement requires retrospective application to prior period
financial statements of changes in accounting principle, unless it is
impracticable to determine either the period-specific effects or the
cumulative effect of the change. The provisions of SFAS 154 are effective for
fiscal years beginning after December 15, 2005. The Company will adopt this
statement in the fiscal year beginning October 1, 2006.
In February 2006. the FASB issued SFAS No. 155, "Accounting for Certain
Hybrid Financial Instruments" ("SFAS 155"). This Statement amends FASB
Statements No. 133, Accounting for Derivative Instruments and Hedging
Activities, and No. 140, Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities. This Statement resolves issues
addressed in Statement 133 Implementation Issue No. 01, "Application of
Statement 133 to Beneficial Interests in Securitized Financial Assets." SFAS
No. 155 permits fair value remeasurement for any hybrid financial instrument
that contains an embedded derivative that otherwise would require
bifurcation, clarifies which interest-only strips and principal-only strips
are not subject to the requirements of Statement 133, and establishes a
requirement to evaluate interests in securitized financial assets to identify
interests that are freestanding derivatives or that are hybrid financial
instruments that contain an embedded derivative requiring bifurcation. It
also clarifies that concentrations of credit risk in the form of
subordination are not embedded derivatives and amends Statement 140 to
eliminate the prohibition an a qualifying special-purpose entity from holding
a derivative financial instrument that pertains to a beneficial interest
other than another derivative financial instrument, This Statement is
effective for all financial instruments acquired or issued after the
beginning of an entity's first fiscal year that begins after September 15,
2006. The Company has not yet determined the impact of the adoption of SFAS
No. 155 on its financial statements, if any.
F-13a
Hydrogen Hybrid Technologies Inc.
(A Development Stage Company)
Notes to Financial Statements
Years Ended September 30, 2006 and 2005
Note 12. Recent Accounting Pronouncements (Cont'd)
In March 2006. the FASB issued SFAS No. 156, "Accounting for Servicing of
Financial Assets" ("SFAS 156"). This Statement amends FASB Statement No. 140,
Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities, with respect to the accounting for separately
recognized servicing assets and servicing liabilities, This Statement
requires an entity to recognize a servicing asset or servicing liability each
time it undertakes an obligation to service a financial asset by entering
into a servicing contract in indicated situations; requires all separately
recognized servicing assets and servicing liabilities to be initially
measured at fair value, if practicable; permits an entity to choose relevant
subsequent measurement methods for each class of separately recognized
servicing assets and servicing liabilities; at its initial adoption, permits
a one-time reclassification of available-for-sale securities to trading
securities by entities with recognized servicing assets, without calling into
question the treatment of other available-for-sale securities under Statement
115, provided that the available-for-sale securities are identified in some
manner as offsetting the entity's exposure to changes in fair value of
servicing assets or servicing liabilities that a servicer elects to
subsequently measure at fair value; and requires separate presentation of
servicing assets and servicing liabilities subsequently measured at fair
value in the statement of financial position arid additional disclosures for
all separately recognized servicing assets and servicing liabilities. The
Company has determined that the adoption of SFAS No. 156 did not have a
material impact on Consolidated Financial Statements.
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements,
("SFAS 157"), to define fair value, establish a framework for measuring fair
value in accordance with generally accepted accounting principles and expand
disclosures about fair value measurements. SFAS 157 requires quantitative
disclosures using a tabular format in all periods (interim and annual) and
qualitative disclosures about the valuation techniques used to measure fair
value in all annual periods. The provisions of this Statement shall be
effective for financial statements issued for fiscal years beginning after
November 15, 2007 and interim periods within those fiscal years. The Company
will be required to adopt the provisions of this statement as of January 1,
2008. The Company is currently evaluating the impact of adopting SFAS 157.
In September 2006, the FASB issued Statement No. 158, "Employers' Accounting
far Defined Benefit Pension and Other Retirement Plans - An amendment of
FASB Statements No. 87, 88, 106, and 132(R)" (SFAS 158"). This Statement
enhances disclosure regarding the funded status of an employer's defined
benefit postretirement plan by (a) requiring companies to include the funding
status in comprehensive income, (b) recognize transactions and events that
affect the funded status in the financial statements in the year in which
they occur, and (C) at a measurement date of the employer's fiscal year-end.
Statement No. 158 effective for fiscal years ending after December 15, 2008,
and is not expected to apply to the Company.
In February 2007. FASB issued FAS No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities Including an Amendment of FASB
Statement No. 115 ("FAS 159"). FAS 159 permits entities to effective for
fiscal years after November 15, 2007. The Company is currently evaluating the
impact of adopting FAS 159 on our financial statements.
F-14a
Hydrogen Hybrid Technologies Inc.
(A Development Stage Company)
Balance Sheets
As at March 31, 2007 and September 30, 2006 (in US Dollars) (Unaudited)
=============================================================================
Balance Sheets
March 31 September 30
2007 2006
- -----------------------------------------------------------------------
Assets
Cash $ 44,080 $ 1,026,571
Accounts Receivable (Note 5) 489,074 -
Notes receivable 302,581 302,672
- -------------------------------------------------------------------------
835,735 1,329,243
Distribution Rights (Note 3) 4,254,100 4,254,100
- -------------------------------------------------------------------------
$ 5,089,835 $ 5,583,343
=========================================================================
Liabilities
Accounts payable and accrued liabilities $ 28,393 $ 1,496,284
- -------------------------------------------------------------------------
28,393 1,496,284
Stockholders' Equity
Common Stock, $0.001 par value, 80,000,000
shares authorized, 60,373,750, 30,000,000
shares issued and outstanding as of
3/31/07 and 09/30/06, respectively 82 82
Additional paid-in capital -
Special Warrants Subscribed (Note 4) 5,305,585 4,267,973
Deficit, accumulated during development (261,838) (180,114)
Accumulated Other Comprehensive Loss 17,613 (882)
- ------------------------------------------------------------------------
5,061,442 4,087,059
- ------------------------------------------------------------------------
$ 5,089,835 5,583,343
========================================================================
See accompanying notes to financial statements.
F-1b
Hydrogen Hybrid Technologies Inc.
(A Development Stage Company)
Statements of Cash Flows
For the Three Months and Six Months Ended March 31, 2007 and 2006
and Cumulative since Inception(in US Dollars) (Unaudited)
=============================================================================
Statement of Operations
Cumulative
Three Months Ending Six Months Ending since
March 31, March 31, Inception
-------------------- ------------------ to Mar. 31
2007 2006 2007 2006 2007
---------- -------- --------- ------- -------------
Revenue $ 5,047 $ - $ 10,239 $ - $ 10,239
Expenses:
Consulting - Mgt. (6) 0 80,765 0 98,589
General and
administrative 115 0 2,666 0 31,333
Professional fees 8,532 0 8,532 0 142,156
---------- -------- --------- ------- ------------
Total expenses 8,641 0 91,963 0 272,078
---------- -------- --------- ------- -----------
Net (loss) $ (3,594) $ 0 $ (81,724) $ 0 $ (261,838)
========== ========= =========== ====== ===========
Weighted average number of
common shares
outstanding - basic
and fully diluted 60,373,750 30,000,000 60,373,750 30,000,000
========== ========== ========== ==========
Net (loss) per
share - basic and
fully diluted $ (0.00) $ - $ (0.00) $ -
========== ========== ========== ==========
See accompanying notes to financial statements.
F-2b
Hydrogen Hybrid Technologies Inc.
(A Development Stage Company)
Statements of Cash Flows
For the Six Months Ended March 31, 2007 and 2006
and Cumulative since Inception (in US Dollars) (Unaudited)
=============================================================================
Statements of Cash Flows
Cumulative
Since
6 months 6 months Inception
ending ending to Mar. 31
Mar 31, 2007 Mar 31, 2006 2007
- -----------------------------------------------------------------------
Cash flows from operating activities:
Net loss $ (81,724) $ - $ (261,838)
- -----------------------------------------------------------------------
Changes in non-cash working capital items
Notes receivable 91 - (301,094)
Receivables (489,075) - (489,075)
Accounts payable and accrued
Liabilities (1,467,890) 2,149 27,226
Other assets - (2,231) -
- -----------------------------------------------------------------------
(2,038,598) (82) (1,024,781)
Cash flows used in investing activities:
Increase in intellectual property
& other assets - - (4,233,200)
- -----------------------------------------------------------------------
0 0 (4,233,200)
Cash flow from financing activities:
Issuance of capital stock 0 82 82
Issuance of share
subscription agreements 1,037,612 - 5,284,617
- ----------------------------------------------------------------------
Effect of foreign exchange
rate changes 18,495 - 17,362
- ----------------------------------------------------------------------
1,056,107 82 5,302,061
Increase (decrease) in cash
and cash equivalents (982,491) - 44,080
Cash at beginning of period 1,026,571 - 0
- ----------------------------------------------------------------------
Cash at end of period $ 44,080 $ 0 $ 44,080
======================================================================
Supplemental Disclosure:
Taxes paid - - -
Interest paid - - -
======================================================================
See accompanying notes to financial statements.
F-3b
Hydrogen Hybrid Technologies Inc.
(A Development Stage Company)
Notes to Financial Statements
Quarters Ended March 31, 2007 and 2006
Note 1. Basis of Presentation
The accompanying interim financial statements of Hydrogen Hybrid
Technologies Inc. (the "Company") are unaudited and have been prepared in
accordance with Canadian generally accepted accounting principles ("GAAP")
for interim financial statements. Accordingly, they do not include certain
disclosures normally included in annual financial statements prepared in
accordance with such principles. These interim financial statements were
prepared using the same accounting policies as outlined in note 3 to the
annual financial statements for the year ended September 30, 2005 and 2006,
and should be read in conjunction with the audited financial statements for
the year ended September 30, 2005 and 2006.
These interim financial statements do not materially differ from United States
generally accepted accounting principles ("US GAAP") for interim financial
statements.
In preparing these interim financial statements, management was required to
make estimates and assumptions that affect the amounts reported in the
financial statements and the accompanying notes. In the opinion of
management, these interim financial statements reflect all adjustments
(which include only normal, recurring adjustments) necessary to state
fairly the results for the periods presented. Actual results could differ
from these estimates and the operating results for the interim period
presented is not necessarily indicative of the results expected for the
full year.
Note 2. Going concern
The Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has not commenced its planned principal
operations and it has not generated any revenues. In order to obtain the
necessary capital, the Company is seeking equity and/or debt financing. The
negative equity is the result of this activity and has been financed from the
equity raised to date. The negative working capital is a direct result of the
Distribution rights purchased from a related party and this position has been
rectified subsequent to the date of these financial statements. If the financing
does not provide sufficient capital, some of the Stockholders of the Company
have agreed to provide sufficient funds as a loan over the next twelve-month
period. However, the Company is dependent upon its ability to secure equity
and/or debt financing and there are no assurances that the Company will be
successful, without sufficient financing, it would be unlikely for the Company
to continue as a going concern.
F-4b
Hydrogen Hybrid Technologies Inc.
(A Development Stage Company)
Notes to Financial Statements
Quarters Ended March 31, 2007 and 2006
Note 3. Distribution Rights
On January 18, 2005, the Company entered into a Distribution Agreement with
Canadian Hydrogen Energy Company, Ltd., a Canadian privately owned related
company, controlled by the same Stockholders of the Company granting the
Distribution Agreement. The Distribution Agreement includes the rights to sell
and distribute on-board hydrogen generating and injections systems for the OEM,
car and light truck markets globally. As compensation for the rights granted
under this agreement the company will pay a total of $4,254,100 in cash and
this agreement is effective only at such time as funds have been advanced.
During Q2, the final $424,706 was paid towards the distribution agreement
liability. With the full amount of $4,254,100 now been paid, the Company has
the right to begin distribution of the Hydrogen Fuel Injection system.
Note 4. Special Warrant Subscriptions
The Company completed its efforts to raise capital through the sale of Special
Warrants priced at $1.77 per unit. Total warrants sold as of Q2 closing are
2,989,450 units at a weighted average price of $1.77 per Special Warrant for an
aggregate of $5,305,585.
Note 5. Accounts Receivable
During the quarter the company forwarded a total of $467,448 to Canadian
Hydrogen Energy Company Limited (CHEC), the manufacturer of the Hydrogen Fuel
Injection cell. These funds are to be used to convert inventory for distribution
by HYHY. The first units of CHEC's newest revision are expected to be ready for
distribution sometime in May of this year. The balance of the receivables,
$21,626 represents accrued subscriptions for 12,500 warrants.
Note 6. Subsequent Events
(i) Subsequent to Q2 reporting, on May 15, 2007, Rosseau Limited Partners,
one of the Subscribers to HYHY, which had registered an action against
HYHY, requesting the return of subscribed funds, has proposed a
settlement to HYHY. This proposal comes prior to the court hearing of
this matter which is slated for early June 2007. The company is
reviewing the proposal with Legal council.
(ii) On March 30, 2007, the company entered into an agreement to complete a
reverse merger with Eaton Laboratories Inc., a publicly traded, over the
counter, Nevada Corporation. Eaton Laboratories is a pharmaceutical
development company with no revenues, at closing all of Eaton
Laboratories operations will be transferred to its subsidiary Basic
Services, Inc., a Nevada corporation which will be spun off immediately
after closing. The company will then be renamed Hydrogen Hybrid
Technologies Inc.
F-5b
Hydrogen Hybrid Technologies Inc.
(A Development Stage Company)
Notes to Financial Statements
Quarters Ended March 31, 2007 and 2006
Note 6. Subsequent Events (Continued)
(iii) Subsequent to Q2 reporting, on May 18, 2007, the company entered into an
agreement with Red Rock Trading Partners to locate equity based
financing. Red Rock is to locate venture capital groups which may
purchase shares of Hydrogen Hybrid Technologies Inc. as set prices in
the future as HYHY requires. The agreement which is not binding and not
limiting HYHY from any other financing arrangements which it may seek,
pays Red Rock as much as 3% fees for its efforts. The agreement is for a
total of 45 million US dollars and the fees are to be paid 50% in cash
and 50% in HYHY shares.
F-6b
INFORMATION NOT REQUIRED IN PROSPECTUS
--------------------------------------
Indemnification Of Directors, Officers, Employees And Agents
- ------------------------------------------------------------
Our officers and directors are indemnified as provided by the Nevada Revised
Statutes and our bylaws. Under the Nevada Revised Statutes, director
immunity from liability to a company or its shareholders for monetary
liabilities applies automatically unless it is specifically limited by a
company's Articles of Incorporation. Our Articles of Incorporation do not
specifically limit our directors' immunity. Excepted from that immunity are:
(a) willful failure to deal fairly with the company or its stockholdersin
connection with a matter in which the director has a material conflict
of interest; (b) a violation of criminal law, unless the director had
reasonable cause to believe that his or her conduct was lawful or no
reasonable cause to believe that his or her conduct was unlawful; (c) a
transaction from which the director derived an improper personal profit; and
(d) willful misconduct.
Our Articles and bylaws provide that we will indemnify our directors and
officers to the fullest extent not prohibited by Nevada law; provided,
however, that we may modify the extent of such indemnification by individual
contracts with our directors and officers; and, provided, further, that we
shall not be required to indemnify any director or officer in connection with
any proceeding, or part thereof, initiated by such person unless such
indemnification: (a) is expressly required to be made by law, (b) the
proceeding was authorized by our board of directors, (c) is provided by us,
in our sole discretion, pursuant to the powers vested in us under Nevada law
or (d) is required to be made pursuant to the bylaws.
Our Articles and bylaws also provide that we may indemnify a director or
former director of subsidiary corporation and we may indemnify our officers,
employees or agents, or the officers, employees or agents of a subsidiary
corporation and the heirs and personal representatives of any such person,
against all expenses incurred by the person relating to a judgment, criminal
charge, administrative action or other proceeding to which he or she is a
party by reason of being or having been one of our directors, officers or
employees.
Our directors cause us to purchase and maintain insurance for the benefit of
a person who is or was serving as our director, officer, employee or agent,
or as a director, officer, employee or agent or our subsidiaries, and his or
her heirs or personal representatives against a liability incurred by him as
a director, officer, employee or agent.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to our directors, officers and control persons pursuant to
the foregoing provisions or otherwise, we have been advised that, in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy, and is, therefore, unenforceable.
II-1
Other Expenses Of Issuance And Distribution
- -------------------------------------------
The following table sets forth the expenses in connection with the issuance
and distribution of the securities being registered hereby. All such
expenses will be borne by the registrant; none shall be borne by any selling
stockholders.
Expenses:
Amount
------
Securities and Exchange Commission registration fee $ 191
Legal fees and miscellaneous expenses* $1,000
Audit Fees $2,000
Printing* $ 809
Transfer Agent Fees* $2,500
------
Total $6,500
======
*Estimated expenses
Recent Sales of Unregistered Securities
- ---------------------------------------
On March 30, 2007, Hydrogen Hybrid Technologies, Inc., a privately-held
Canadian corporation, entered into a Acquisition Agreement and Plan of Merger
pursuant to which the Registrant, through its wholly-owned subsidiary, Merger
Sub, acquired Hydrogen Hybrid Technologies, Inc. in exchange for 99,000,000
shares of the Registrant's common stock which were issued to the holders of
Hydrogen Hybrid Technologies, Inc. on prorate basis. The shares were issued
in reliance on the exemption provided by Section 4(2) of the Securities Act
of 1933, as amended.
On June 29, 2007, the Registrant converted its outstanding warrants to
8,323,862 shares of its common stock. The issuance of the convertible
warrants were made in reliance on Regulation S promulgated under the Act.
All sales were made outside the United States, and no sales were made to U.S.
persons (as defined under Regulation S). The Warrant holders paid $0.75 per
converted share. The shares were issued in reliance on the exemption
provided by Section 4(2) of the Securities Act of 1933, as amended.
All references to common stock are retroactively restated to reflect our two
for one stock split which took place on June 26, 2007.
There have been no other recent issuance of shares. As of July 23, 2007 , we
have a total approximately two hundred (200) shareholders.
II-2
Exhibits
--------
(a) Exhibits:
The following exhibits are filed as part of this registration statement:
- ----------------------------------------------------------------------------
EXHIBITS
SEC REFERENCE TITLE OF DOCUMENT LOCATION
NUMBER
- ----------------------------------------------------------------------------
2.1 Acquisition Agreement and Plan of Merger, by and between
Pinoak and Eaton Laboratories, Inc. dated April 14, 2006,
incorporated by reference to the Company's Current Report
filed on Form 8-K filed with the U. S. Securities and
Exchange Commission on April 17, 2006.
- -------------------------------------------------------------------------------
2.2 Acquisition and Plan of Merger between Eaton Laboratories, Inc.
and Hydrogen Hybrid Technologies, Inc. dated March 30, 2007,
incorporated by reference to the Company's Current Report
filed on Form 8-K filed with the Securities and Exchange
Commission on April 4, 2007..
- -------------------------------------------------------------------------------
3.1 Articles of Incorporation, filed with the Commission on Form
SB-2 on January 3, 2002, incorporated by reference.
- -------------------------------------------------------------------------------
3.2 By-laws filed with the Commission on Form SB-2 on January 3,
2002, incorporated by reference.
- -------------------------------------------------------------------------------
3.3 Articles of Merger between Pinoak, Inc. and Eaton Laboratories,
Inc. incorporated by reference to the Company's Current Report
filed on Form 8-K filed with the Commission on April 20, 2006.
- -------------------------------------------------------------------------------
3.4 Amended Articles of Incorporation, filed with the Commission in
Current Report on Form 8-K on June 28, 2007.
- -------------------------------------------------------------------------------
5.1* Opinion of Thomas C. Cook, Esq., regarding the legality of the
securities being registered.
- -------------------------------------------------------------------------------
23.1* Consent of Schwartz Levitsky Feldman LLP for September 30, 2006
audit and March 31, 2007.
- -------------------------------------------------------------------------------
23.2* Consent of Thomas C. Cook, Esq., (included in Exhibit 5.1).
- -------------------------------------------------------------------------------
24.1* Power of Attorney (Contained on the signature page of this
registration statement).
- -------------------------------------------------------------------------------
- -------------
* this filing
UNDERTAKINGS
------------
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers of sales are being made, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
II-3
(ii) Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in this
registration statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value
of securities offered would not exceed that which was registered) and
any deviation from the low and high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with
the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration statement;
and (??)
(iii) Include any additional or changed material information on the plan of
distribution.
2. That, for the purpose of determining any liability under the Securities
Act, treat each post-effective amendment as a new registration statement of
the securities offered herein, and that the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any of
the securities being registered hereby which remain unsold at the
4. Pursuant to Rule 512(g)(2), of Regulation S-B, each prospectus filed
pursuant to Rule 424(b) as part of a registration statement relating to
an offering, other than registration statements relying on Rule 430B or
other than prospectuses filed in reliance on Rule 430A, shall be deemed
to be part of and included in the registration statement as of the date
it is first used after effectiveness. Provided, however, that no
statement made in a registration statement or prospectus that is part
of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or
prospectus that is part of the registration statement will, as to a
purchaser with a time of contract of sale prior to such first use,
supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or
made in any such document immediately prior to such date of first use.
5. Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the By-Laws of the
company, or otherwise, we have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act, and is, therefore unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment of expenses incurred or paid by a director, officer
or controlling person in the successful defense of any action, suit or
proceeding) is asserted by such director, officer, or other control person
in connection with the securities being registered, we will, unless in the
opinion of our legal counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication of such
issue.
6. For determining any liability under the Securities Act, we shall treat each
post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration
statement, and that the offering of the securities at that time as the
initial bona fide offering of those securities.
II-4
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Ira Lyons, his true and lawful attorneys-in-
fact, with full power of substitution and resubstitution, for his and in his
name, place and stead, in any and all capacities to sign any and all
amendments (including post-effective amendments) to this registration
statement and to sign a registration statement pursuant to Section 462(b) of
the Securities Act of 1933, and to file the same with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact, full power and authority to
do and perform each and every act and thing requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on
the dates indicated.
Date: July 27, 2007 By: /s/ Ira Lyons
------------- ---------------------------------------
Ira Lyons
Title: President, Chief Executive
Officer
II-5
Signatures
----------
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing this Form SB-2 and has authorized this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in Las Vegas, Nevada on July 27, 2007.
HYDROGEN HYBRID TECHNOLOGIES, INC.
----------------------------------
Registrant
By: /s/ Ira Lyons
---------------------------------------
Ira Lyons
Title: President, Chief Executive
Officer
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities
and on the dates stated:
Date: July 27, 2007 By: /s/ Ira Lyons
------------- ---------------------------------------
Ira Lyons
Title: President, Chief Executive
Officer
II-6