AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 17, 2009
REGISTRATION NO. 333-________
=============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
EnzymeBioSystems
------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA 27-0464302
------------------------------- -----------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2834
----------------------------
(Primary Standard Industrial
Classification Number)
----------------------------
35595 Spatterdeock Lane
Solon, OH 44139
(440) 554-5417
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(Address, Including Zip Code and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
Ashot Martirosyan
35595 Spatterdeock Lane
Solon, OH 44139
(440) 554-5417
--------------------------------------------------------
(Name, Address, Including Zip Code and Telephone Number,
Including Area Code, of Agent for Service)
WITH COPIES OF ALL CORRESPONDENCE TO:
THOMAS C. COOK, ESQ.
LAW OFFICES OF THOMAS C. COOK
500 N. RAINBOW BLVD., SUITE 300
LAS VEGAS, NV 89107
PHONE: (702) 221-1925
FAX: (702) 221-1963
----------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this registration statement.
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, 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, please 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. |_|
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. |_|
Indicate by check mark whether the registrant is a large accelerated
filer, a Non-accelerated filer, or a smaller reporting company. See the
definitions of "large accelerated filer," "accelerated filer" and
"smaller reporting company" In Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller
reporting company)
Calculation of Registration Fee
============================================================================
TITLE OF EACH PROPOSED
CLASS OF PROPOSED MAXIMUM
SECURITIES AMOUNT OFFERING AGGREGATE AMOUNT OF
TO BE TO BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED(1) SHARE(2) PRICE FEE
Common stock
$0.001 par value 1,000,000 $0.01 $ 10,000 $ 0.56
Common stock, 10,500,000 (3) $0.01 $ 105,000 $ 5.86
$0.001 par value
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TOTAL 11,500,000 $0.01 $ 115,000 $ 6.42
============================================================================
(1) In the event of a stock split, stock dividend or similar transaction
involving our common stock, in order to prevent dilution, the number of
shares registered shall be automatically increased to cover the additional
shares in accordance with Rule 416(a).
(2) Represents common shares currently outstanding to be sold by the selling
security holders.
(3) There is no current market for the securities and the price at which the
shares held by the selling security holders will be sold is unknown.
Although the registrant's common stock has a par value of $0.001, the
registrant believes that the calculations of $0.01 per share is a bona fide
estimate of the offering price in accordance with Rule 457(a). In the event
of a stock split, stock dividend or similar transaction involving our common
stock, the number of shares registered shall automatically be increased to
cover the additional shares of common stock issuable pursuant to Rule 416
under the Securities Act of 1933, as amended.
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.
----------------------------------
- -----------------------------------------------------------------------------
- - The information in this prospectus is not complete and may be changed. -
- - We may not sell these securities until the registration statement filed -
- - with the SEC is effective. This prospectus is not an offer to sell and -
- - it is not soliciting an offer to buy these securities in any state where -
- - the offer or sale is not permitted. -
- -----------------------------------------------------------------------------
Subject to Completion, Dated _____________, 2009
PROSPECTUS
Up to 11,500,000 shares of common stock
EnzymeBioSystems
We are registering up to 1,000,000 shares, representing 3.2% of our
outstanding common stock if all shares are sold, for sale to investors by us
at a price of $0.01 per share. This offering will terminate when all
1,000,000 shares are sold or if not all of the shares are sold the offering
will close on December 31, 2009, unless we terminate it earlier.
We are also registering up to 10,500,000 shares, representing 34.4% of our
current outstanding common stock, for sale by seven (7) of our existing
shareholders:
Investing in the common stock involves risks. EnzymeBioSystems is a
developmental stage company focused on becoming a contract research
organization, or CRO, based in Ohio to assist pharmaceutical and
biotechnology companies in developing drug compounds, biologics, and drug
delivery services. Revenue for CROs is typically generated on a fee for
service basis on either a time and materials or a fixed-price contract
arrangement with the client organization. We have yet to begin our
operations, we have no income, and limited assets. We are in unsound
financial condition, and you should not invest unless you can afford to lose
your entire investment. As of June 30, 2009, EnzymeBioSystems had negative
working capital of just over $47,000 and we rely on funding from our officers
and directors to pay our obligations as they become due. If those officers
and directors do not continue to advance the company money in the future then
the company may not be able to pay its obligations as they become due. See
"Risk Factors" beginning on page 6. Neither the U. S. 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.
We have established an escrow account with our corporate attorney for funds
received by us from prospective investors. There is no minimum for this
offering, so shares will be issued by us to investors even if you are the
sole purchaser in this offering.
Shares sold for our benefit, and shares sold by the selling shareholders on
their own behalf, will be sold at a price of $0.01 per share.
The shares to be sold for our benefit will be offered by our officers and
directors, namely, Ashot Martirosyan and Anushavan Yeranosyan, our President
and Secretary, respectively, on a best efforts basis with no minimum. No
underwriter will be used.
Our common stock is not currently traded on any national securities exchange
and is not quoted on any over-the-counter market.
The date of this prospectus is __________________, 2009
=============================================================================
Table of Contents
Part I
PROSPECTUS SUMMARY...................................................... 3
OUR COMPANY............................................................. 3
THE OFFERING............................................................ 4
SELECTED FINANCIAL INFORMATION.......................................... 5
RISK FACTORS RELATING TO OUR FINANCIAL CONDITION........................ 6
COMPANY RISK FACTORS.................................................... 8
RISK FACTORS RELATING TO OUR COMMON STOCK AND THIS OFFERING.............12
FORWARD-LOOKING STATEMENTS..............................................15
USE OF PROCEEDS.........................................................16
DILUTION................................................................17
SELLING SECURITY HOLDERS................................................18
DETERMINATION OF THE OFFERING PRICE.....................................19
PLAN OF DISTRIBUTION....................................................19
EXPENSES OF ISSUANCE AND DISTRIBUTION...................................21
DESCRIPTION OF SECURITIES...............................................22
DIVIDEND POLICY.........................................................22
DESCRIPTION OF BUSINESS.................................................23
DESCRIPTION OF PROPERTY.................................................28
LEGAL PROCEEDINGS.......................................................28
FINANCIAL STATEMENTS....................................................29
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION...............30
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS............34
EXECUTIVE COMPENSATION..................................................36
SECURITY OWNERSHIP OF CERTAIN BENEFICAL OWNERS AND MANAGEMENT...........38
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..........................39
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES..........................39
LEGAL MATTERS...........................................................39
EXPERTS.................................................................40
WHERE YOU CAN FIND MORE INFORMATION.....................................40
Part II
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION...........................II-1
INDEMNIFICATION OF DIRECTORS AND OFFICERS.............................II-1
RECENT SALES OF UNREGISTERED SECURITIES...............................II-2
EXHIBITS..............................................................II-3
UNDERTAKINGS..........................................................II-4
SIGNATURES AND POWER OF ATTORNEY......................................II-5
2
PROSPECTUS SUMMARY
EnzymeBioSystems
The following summary highlights selected information contained in this
Prospectus. This summary does not contain all the information that may be
important to you. You should read the more detailed information contained in
this prospectus, including but not limited to, the risk factors beginning on
page 3. References to "we," "us," "our," "EnzymeBioSystems," or the "Company"
mean EnzymeBioSystems.
Forward-Looking Statements
This Prospectus contains forward-looking statements that involve risks and
uncertainties. We use words such as anticipate, believe, plan, expect,
future, intend, and similar expressions to identify such forward-looking
statements. You should not place too much reliance on these forward-looking
statements. Our actual results may differ materially from those anticipated
in these forward-looking statements for many reasons, including the risks
faced by us described in the "Risk Factors" section and elsewhere in this
Prospectus.
Our Company
We were formed on June 26, 2009 as EnzymeBioSystems, a Nevada corporation.
We are a startup company that plans to manufacture specialty enzymes and
enzyme related products. Activities to date have been limited primarily to
organization, initial capitalization, establishing administrative offices in
Solon, Ohio, and commencing our initial operational plans. As of the date of
this offering circular, the Company has developed a business plan,
established administrative offices and started obtaining materials to build
its laboratory.
We a start-up company focused on becoming a manufacturing organization, based
in Ohio to assist pharmaceutical and biotechnology companies in developing
drug compounds, biologics, specialized enzymes and drug delivery services.
We foresee our three areas of business opportunity, to include: 1) buying
raw materials to produce specialty enzymes in our lab facility and offer
these products for sale to research facilities and pharmaceutical companies;
2) become a specialty contract manufacture for research universities and
pharmaceutical companies that utilize enzymes in their research programs;
and, 3) Publish in research and medical journals theoretical and practical
applications of enzyme research, for the direct purpose of selling our
research applications to research facilities.
3
We have generated no revenues, have incurred losses since our inception on
June 26, 2009, and have relied upon the sale of our securities in
unregistered transactions from our original founders to fund our operations.
We are a development stage company and we do not expect to generate
sufficient revenues in the next 12 months to sustain our operations.
Accordingly, for the foreseeable future, we will continue to be dependent on
additional financing in order to maintain our operations and continue with
our corporate activities. Due to the uncertainty of our ability to meet our
financial obligations and to pay our liabilities as they become due, in their
report on our financial statements for the period from inception (June 26,
2009) to June 30, 2008, our registered independent auditors included
additional comments indicating concerns about our ability to continue as a
going concern. Our financial statements contain additional note disclosures
describing the circumstances that led to this disclosure by our registered
independent auditors. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Our principal offices are located at 35595 Spatterdeock Lane, Solon, OH
44139. The telephone is (440) 554-5417.
The Offering
Securities Offered:
Shares Offered by EnzymeBioSystems: We are registering to sell to new
investors up to 1,000,000 shares of
common stock. We will sell these
shares to new investors at $0.01 per
share.
Shares Offered by Selling Shareholders: We are registering 10,500,000 shares
for sale by seven (7) selling
shareholders (see list of Selling
Shareholders):
Use of proceeds If we are successful at selling all
the shares being offered by our
Company, our gross proceeds from such
offering will be $10,000. We intend
to use these proceeds to purchase
raw materials to produce specialty
enzymes, packaging costs and marketing
expenses. We will not receive any
proceeds from the sale of shares
shares by the selling stockholders.
We are registering up to 10,500,000 shares for resale by existing holders of
our common stock; and 1,000,000 shares of our common stock to be sold by our
officers and directors at $0.01 per share.
4
Selected Financial Data
The following financial information summarizes the more complete historical
financial information at the end of this Prospectus.
The summary information below should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the audited financial statements and notes thereto included
elsewhere in this Prospectus.
Balance Sheet Data
As of
June 30,
2009
(Audited)
--------------
Working Capital $ 30,500
Total Assets $ 30,500
Total Liabilities $ 0
Income Statement Data
From
June 26, 2009
(Inception)
to June 30,
2009
(Audited)
---------
Revenues $ 0
Expenses $ 500
Net (Loss) before
beneficial interest $
Beneficial Conversion Feature
of Preferred stock $
Net income (loss) $ (500)
As of June 30, 2009, we had $30,500 working capital, the funds held in our
attorney's escrow account and an accumulated loss of $500 since inception.
The $500 expense represents incorporation fees.
5
RISK FACTORS
Please consider the following risk factors before deciding to invest in our
common stock.
This offering and any investment in our common stock involves a high degree
of risk. You should carefully consider the risks described below and all of
the information contained in this Prospectus before deciding whether to
purchase our common stock.
If any of the following risks actually occur, our business, financial
condition, and results of operations could be harmed. An investment in our
common stock involves a high degree of risk. You should carefully consider
the risks described below and the other information in this Prospectus before
investing in our common stock. If any of the following risks occur, our
business, operating results, and financial condition could be seriously
harmed. T he trading price of our common stock could decline due to any of
these risks, and you may lose all or part of your investment.
RISK FACTORS RELATING TO OUR FINANCIAL CONDITION
- ------------------------------------------------
1. WE HAVE A LIMITED OPERATING HISTORY AND LIMITED HISTORICAL FINANCIAL
INFORMATION UPON WHICH YOU MAY EVALUATE OUR PERFORMANCE.
We only have a limited history and we are subject to all risks inherent in a
developing business enterprise. Our likelihood of success must be considered
in light of the problems, expenses, difficulties, complications, and delays
frequently encountered in connection with manufacturing specialty enzymes and
the competitive and regulatory environment in which we operate. You should
consider, among other factors, our prospects for success in light of the
risks and uncertainties encountered by companies that, like us, are in their
early stages of research. We may not successfully address these risks and
uncertainties or successfully implement our operating and acquisition
strategies. If we fail to do so, it could materially harm our business to
the point of having to cease operations and could impair the value of our
common stock to the point investors may lose their entire investment. Even
if we accomplish these objectives, we may not generate positive cash flows or
profits we anticipate in the future.
2. AS WE HAVE NEVER REPORTED REVENUES SINCE OUR INCEPTION, THERE IS NO
ASSURANCE THAT WE WILL BE ABLE TO CONTINUE AS A GOING CONCERN.
Our financial statements included with this Registration Statement for the
year ended June 30, 2009, have been prepared assuming that we will continue
as a going concern. Our auditors have made reference to the substantial
doubt as to our ability to continue as a going concern in their audit report
on our audited financial statements for the year ended June 30, 2009. If we
are not able to achieve revenues, then we likely will be forced to cease
operations and investors will likely lose their entire investment.
6
3. IT IS DIFFICULT TO EVALUATE THE LIKELIHOOD THAT WE WILL ACHIEVE OR
MAINTAIN PROFITABILITY IN THE FUTURE.
We have prepared audited financial statements for the year end for June 30,
2009. Our ability to continue to operate as a going concern is fully
dependent upon the Company obtaining sufficient financing to continue its
development and operational activities. The ability to achieve profitable
operations is in direct correlation to our ability to generate revenues or
raise sufficient financing. It is important to note that even if the
appropriate financing is received, there is no guarantee that we will ever be
able to operate profitably or derive any significant revenues from its
operation.
4. IF WE ARE NOT ABLE TO COMPETE EFFECTIVELY AGAINST LARGER BIOMEDICAL
MANUFACTURERS WITH GREATER RESOURCES, OUR PROSPECTS FOR FUTURE SUCCESS WILL
BE JEOPARDIZED.
We face intense competition from larger and better-established biomedical
manufacturers that may prevent us from ever becoming a significant company.
Management expects the competition to intensify in the future. Pressures
created by our competitors could negatively impact our business, results of
operations and financial condition.
Many of our potential competitors have longer operating histories, larger
customer bases, greater brand recognition and significantly greater
financial, marketing, technical and other resources. In addition, our
competitors may acquire or be acquired by, receive investments from or enter
into other commercial relationships with larger, well-established and well-
financed competitors. Therefore, some of our competitors with other revenue
sources may be able to devote greater resources to marketing and promotional
campaigns, adopt more aggressive pricing policies and devote substantially
more resources to product development. Increased competition may result in
reduced operating margins, loss of market share and diminished value in our
brands. There can be no assurance that we will be able to compete
successfully against current and future competitors.
7
COMPANY RISK FACTORS
- --------------------
5. IF WE ARE UNABLE TO RESPOND EFFECTIVELY AS TECHNOLOGIES AND MARKET TRENDS
EMERGE, OUR COMPETITIVE POSITION AND OUR ABILITY TO GENERATE REVENUES AND
PROFITS MAY BE HARMED.
To be successful, we must keep pace with rapid changes in enzyme research and
technology, changing customer requirements, new innovations by competitors
and evolving industry standards, any of which could render our existing
products obsolete if we fail to respond in a timely manner. For example, if
new enzyme applications are introduced by our competitors not part by our
technology, or if effective new sources of enzymes are discovered, our future
products and technology could become less competitive or obsolete. If
competitors develop innovative applications and technology that is superior
to ours, or if we fail to accurately anticipate market trends and respond on
a timely basis with our own innovations, our potential competitive position
may be harmed and we may not achieve sufficient growth in our revenues to
attain, or sustain, profitability.
6. THERE MAY BE A POSSIBLE INABILITY TO FIND SUITABLE EMPLOYEES.
In order to implement our business plan, management recognizes that
additional staff will be required. No assurances can be given that we will
be able to find suitable employees that can support our needs or that these
employees can be hired on favorable terms.
7. WE MAY BE LIABLE FOR THE PRODUCTS WE PLAN TO PRODUCE.
There is no guarantee that the level of insurance coverage we secure will be
adequate to protect us from risks associated with claims that exceed the
level of coverage maintained. As a result of our limited operations to date,
no threatened or actual claims have been made upon us for product liability.
8. THE ENZYME COMPOUND INDUSTRY IS SUBJECT TO PRICING PRESSURES THAT MAY
CAUSE US TO REDUCE THE FUTURE GROSS MARGINS FOR OUR PRODUCTS.
To be competitive, we might be required to adjust our prices in response to
industry-wide pricing pressures. Our competitors may possibly source from
regions with lower costs than those of our sourcing partners and those
competitors may apply such additional cost savings to further reduce prices.
Moreover, increased customer demands for markdown allowances, incentives and
other forms of economic support reduce our gross margins and affect our
profitability. Our financial performance may be negatively affected by these
pricing pressures if we are forced to reduce our prices without being able to
correspondingly reduce our costs for finished goods or if our costs for
finished goods increase and we cannot increase our prices.
8
9. THE LOSS OF ONE OR MORE OF OUR FUTURE SUPPLIERS OF RAW MATERIALS MAY
INTERRUPT OUR SUPPLIES.
We plan to purchase our raw materials from a limited number of third-party
suppliers. We do not have any material or long-term contracts with any of
our suppliers. Furthermore, our future suppliers also purchase the
components of our products from a limited number of suppliers. The loss of
one or more of these vendors could interrupt our supply chain and impact our
ability to deliver products to our customers, which would have a material
adverse effect on our future net sales and profitability.
10. INCREASES IN THE PRICE OF RAW MATERIALS USED TO MANUFACTURE OUR ENZYME
PRODUCTS COULD MATERIALLY INCREASE OUR COSTS AND DECREASE OUR PROFITABILITY.
The prices for enzyme components are dependent on the market price for the
raw materials used to produce them. There can be no assurance that prices
for these and other raw materials will not increase in the near future.
These raw materials are subject to price volatility caused by supply
conditions, power outages, government regulations, economic climate and other
unpredictable factors. Any raw material price increase would increase our
cost of sales and decrease our future profitability unless we are able to
pass higher prices on to our customers. In addition, if one or more of our
competitors is able to reduce its production costs by taking advantage of any
reductions in raw material prices or favorable sourcing agreements, we may
face pricing pressures from those competitors and may be forced to reduce our
prices or face a decline in net sales, either of which could have a material
and adverse effect on our business, results of operations and financial
condition.
11. WE DO NOT OWN EQUIPMENT WITH THE CAPACITY TO MANUFACTURE PRODUCTS ON A
COMMERCIAL SCALE. IF WE ARE UNABLE TO ACCESS THE CAPACITY TO MANUFACTURE
PRODUCTS IN SUFFICIENT QUANTITY, WE MAY NOT BE ABLE TO COMMERCIALIZE OUR
PRODUCTS OR GENERATE SIGNIFICANT SALES.
We have only limited experience in enzyme manufacturing, and we do not have
our own internal capacity to manufacture specialty enzyme products on a
commercial scale. We expect to be dependent to a significant extent on third
parties for commercial scale manufacturing of our specialty enzyme products.
We do not have any arrangements with third parties that have the required
manufacturing equipment and available capacity to manufacture our commercial
enzymes. While we plan to build our own pilot development facility, we will
continue to depend on third parties for large-scale commercial manufacturing.
Any difficulties or interruptions of service with our third party
manufacturers or our own pilot manufacturing facility could disrupt our
research and development efforts, delay our commercialization of specialty
enzyme products, and harm our relationships with our specialty enzyme
strategic partners, collaborators, or customers.
9
12. WE HAVE ONLY LIMITED EXPERIENCE IN INDEPENDENTLY DEVELOPING,
MANUFACTURING, MARKETING, SELLING, AND DISTRIBUTING COMMERCIAL SPECIALTY
ENZYME PRODUCTS.
We currently have only limited resources and capability to develop,
manufacture, market, sell, or distribute specialty enzyme products on a
commercial scale. We will determine which specialty enzyme products to
pursue independently based on various criteria, including: investment
required, estimated time to market, regulatory hurdles, infrastructure
requirements, and industry-specific expertise necessary for successful
commercialization. At any time, we may modify our strategy and pursue
collaborations for the development and commercialization of some specialty
enzyme products that we had intended to pursue independently. We may pursue
specialty enzyme products that ultimately require more resources than we
anticipate or which may be technically unsuccessful. In order for us to
commercialize more specialty enzyme products directly, we would need to
establish or obtain through outsourcing arrangements additional capability to
develop, manufacture, market, sell, and distribute such products. If we are
unable to successfully commercialize specialty enzyme products resulting from
our internal product development efforts, we will continue to incur losses in
our specialty enzymes business, as well as in our business as a whole. Even
if we successfully develop a commercial specialty enzyme product, we may not
generate significant sales and achieve profitability in our specialty enzymes
business, or in our business as a whole.
13. WE ARE SUBJECT TO ALL GOVERNMENTAL RULES, LAWS AND REGULATIONS RELATING
TO THE BIOMEDICALS INDUSTRY IN THE U.S.
We are subject to all governmental rules, laws and regulations relating to
the biomedicals industry in the U.S., and we fully intend to comply
therewith. However, there is no assurance the governmental agencies having
jurisdiction over us, our operations and properties, will not enact laws,
rules and/or regulations in the future which may have an adverse impact on us
and our operations.
14. OUR RESULTS OF OPERATIONS MAY BE ADVERSELY AFFECTED BY ENVIRONMENTAL,
HEALTH AND SAFETY LAWS, REGULATIONS AND LIABILITIES.
We are subject to various federal, state and local environmental laws and
regulations, including those relating to the discharge of materials into the
air, water and ground, the generation, storage, handling, use, transportation
and disposal of hazardous materials, and the health and safety of our
employees. In addition, some of these laws and regulations require our
contemplated facilities to operate under permits that are subject to renewal
or modification. These laws, regulations and permits can often require
expensive pollution control equipment or operational changes to limit actual
or potential impacts to the environment. A violation of these laws and
regulations or permit conditions can result in substantial fines, natural
resource damages, criminal sanctions, permit revocations and/or facility
shutdowns.
10
15. OUR MANAGEMENT CONTROLS A LARGE BLOCK OF OUR COMMON STOCK THAT WILL
ALLOW THEM TO CONTROL THE COMPANY.
As of June 30, 2009, our officers and directors owned approximately 65% of
our outstanding common stock. Upon completion of this offering, our officers
and directors will own approximately 63% of then issued and outstanding
shares, and will be able to elect all of the directors and continue to
control EnzymeBioSystems. Investors will own a minority percentage of the
Company's common stock and will have minority voting rights. Investors will
not have the ability to control either a vote of the Company's Shareholders
or Board of Directors.
16. OUR MANAGEMENT HAS DISCRETION AS TO HOW TO USE ANY PROCEEDS FROM THE
SALE OF SECURITIES.
The net proceeds from the sale of our common stock under this offering will
be used for the purposes described under "Use of Proceeds." We reserve the
right to use the funds obtained from this Offering for other similar purposes
not presently contemplated which our management deems to be in the best
interests of the company and our shareholders in order to address changed
circumstances or opportunities. As a result of the foregoing, our success
will be substantially dependent upon the discretion and judgment of
management with respect to application and allocation of the net proceeds of
this Offering. Investors for the common stock offered hereby will be
entrusting their funds to our management, upon whose judgment and discretion
the investors must depend.
17. SOME OF OUR OFFICERS AND DIRECTORS HAVE OTHER BUSINESS VENTURES.
As disclosed in their biographies contained herein, some of our officers and
directors work with other companies in addition to their work for us.
Although none of our officers and directors are currently working for any
other companies in the biomedical industry, they are not prohibited from
doing so.
Ashot Martirosyan, our President plans to devote 40 hours per week of his
time to our business; and Anushavan Yeranosyan, our Secretary/Treasure plans
to devote 20 hours per week of his time to our business. Anushavan
Yeranosyan other activities might prevent him from devoting full-time to our
operations which could slow our operations and may reduce our financial
results because of the slow down in operations. Therefore, it is possible
that a conflict of interest with regard to his time may arise based on his
involvement in other activities.
If one or more of our officers or directors began working for another
biomedical company it could take away from the time they currently spend
working on our business affairs and could create a potential conflict of
interest.
11
RISK FACTORS RELATING TO OUR COMMON STOCK AND THIS OFFERING
- -----------------------------------------------------------
18. CERTAIN SHARES OF OUR COMMON STOCK ARE RESTRICTED FROM IMMEDIATE RESALE.
THE LAPSE OF THOSE RESTRICTIONS, COUPLED WITH THE SALE OF THE RELATED SHARES
IN THE MARKET, OR THE MARKET'S EXPECTATION OF SUCH SALES, COULD RESULT IN AN
IMMEDIATE AND SUBSTANTIAL DECLINE IN THE MARKET PRICE OF OUR COMMON STOCK.
All of our shares of common stock are restricted from immediate resale in the
public market. The restricted shares are restricted in accordance with Rule
144, which states that if unregistered, restricted securities are to be sold,
a minimum of one year must elapse between the later of the date of
acquisition of the securities from the issuer or from an affiliate of the
issuer, and any resale of those securities in reliance on Rule 144. The Rule
144 restrictive legend remains on the stock until the holder of the stock
holds the stock for longer than six months (unless an affiliate) and meets
the other requirements of Rule 144 to have the restriction removed. The sale
or resale of those shares in the public market, or the market's expectation
of such sales, may result in an immediate and substantial decline in the
market price of our shares. Such a decline will adversely affect our
investors, and make it more difficult for us to raise additional funds
through equity offerings in the future.
19. WE HAVE NEVER DECLARED DIVIDENDS ON OUR COMMON STOCK AND DO NOT PLAN TO
DO SO IN THE FORESEEABLE FUTURE.
We intend to retain any initial future earnings to fund operations and expand
our business. A holder of common stock will be entitled to receive dividends
only when, as, and if declared by the Board of Directors out of funds legally
available therefore. We have never issued dividends on our common
stock. Our Board of Directors will determine future dividend policy based
upon our results of operations, financial condition, capital requirements,
and other circumstances.
20. HOLDERS OF OUR COMMON STOCK HAVE A RISK OF POTENTIAL DILUTION IF WE
ISSUE ADDITIONAL SHARES OF COMMON STOCK IN THE FUTURE.
Although our Board of Directors intends to utilize its reasonable business
judgment to fulfill its fiduciary obligations to our then existing
stockholders in connection with any future issuance of our common stock, the
future issuance of additional shares of our common stock would cause
immediate, and potentially substantial, dilution to the net tangible book
value of those shares of common stock that are issued and outstanding
immediately prior to such transaction. Any future decrease in the net
tangible book value of our issued and outstanding shares could have a
material effect on the market value of the shares.
12
21. SHARES OF OUR COMMON STOCK HAVE LIMITED TRANSFERABILITY AND LIQUIDITY.
To satisfy the requirements of certain exemptions from registration under the
Securities Act, and to conform with applicable state securities laws, each
investor must acquire his Shares for investment purposes only and not with a
view towards distribution. Consequently, certain conditions of the
Securities Act may need to be satisfied prior to any sale, transfer, or other
disposition of the shares. Some of these conditions may include a minimum
holding period, availability of certain reports, including financial
statements from EnzymeBioSystems, limitations on the percentage of shares
sold and the manner in which they are sold. EnzymeBioSystems can prohibit
any sale, transfer or disposition unless it receives an opinion of counsel
provided at the holder's expense, in a form satisfactory to EnzymeBioSystems,
stating that the proposed sale, transfer or other disposition will not result
in a violation of applicable federal or state securities laws and
regulations. No public market currently exists for the Shares and if any
market does develop it is expected to be limited. Consequently, owners of
the shares may have to hold their investment indefinitely and may not be able
to liquidate their investments in EnzymeBioSystems or pledge them as
collateral for a loan in the event of an emergency.
22. THE PRICE OF OUR COMMON STOCK OFFERED IN THE OFFERING HAS BEEN
ARBITRARILY ESTABLISHED BY OUR MANAGEMENT.
The price of our common stock offered hereunder has been arbitrarily
established by our management, considering such matters as the state of our
business and the general condition of the industry in which we operate. The
offering price bears no relationship to our assets, revenues, net worth, or
any other objective criteria of value applicable to our company.
23. THERE HAVE NO COMMITMENTS TO PURCHASE ANY OF OUR COMMON STOCK OFFERED
HEREUNDER.
There is no commitment of any kind on the part of anyone to purchase all or
any part of the 1,000,000 shares being offered hereby; consequently, we can
give no assurance that all or any of the shares will be sold.
13
24. WE DO NOT HAVE INSURANCE AND, THEREFORE, LIABILITY WE INCUR COULD HAVE
SUBSTANTIAL IMPACT ON OUR ABILITY TO CONTINUE AS A GOING CONCERN.
We have limited capital and, therefore, we do not currently have a policy of
insurance against liabilities arising out of the negligence of our officers
and directors and/or arising from deficiencies in any of our business
operations. Even assuming we obtained insurance, there is no assurance that
such insurance coverage would be adequate to satisfy any potential claims
made against us, our officers and directors, or our business operations or
assets. Any such liability which might arise could be substantial and would
likely exceed our total assets. However, our Articles of Incorporation and
Bylaws provide for indemnification of officers and directors to the fullest
extent permitted under Arizona law. Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be permitted to
directors, officer and controlling persons, it is the opinion of the
Securities and Exchange Commission that such indemnification is against
public policy, as expressed in the Act, and is therefore, unenforceable.
25. IF WE FAIL TO MAINTAIN AN EFFECTIVE SYSTEM OF INTERNAL CONTROLS, WE MAY
NOT BE ABLE TO ACCURATELY REPORT OUR FINANCIAL RESULTS OR PREVENT FRAUD AND
AS A RESULT, INVESTORS MAY BE MISLED AND LOSE CONFIDENCE IN OUR FINANCIAL
REPORTING AND DISCLOSURES, AND THE PRICE OF OUR COMMON STOCK MAY BE
NEGATIVELY AFFECTED.
The Sarbanes-Oxley Act of 2002 requires that we report annually on the
effectiveness of our internal control over financial reporting. A
"significant deficiency" means a deficiency or a combination of deficiencies,
in internal control over financial reporting that is less severe than a
material weakness yet important enough to merit attention by those
responsible for oversight of the Company's financial reporting. A "material
weakness" is a deficiency, or a combination of deficiencies in internal
control over financial reporting, such that there is a reasonable possibility
that a material misstatement of the annual or interim financial statements
will not be prevented or detected on a timely basis.
Failure to provide effective internal controls may cause investors to lose
confidence in our financial reporting and may negatively affect the price of
our common stock. Moreover, effective internal controls are necessary to
produce accurate, reliable financial reports and to prevent fraud. If we
have deficiencies in our internal controls over financial reporting, these
deficiencies may negatively impact our business and operations.
26. CURRENTLY, THERE IS NO MARKET FOR OUR SECURITIES.
There is presently no market for our securities and there can be no assurance
that any such market will develop. In the event a public trading market does
develop, there is no assurance it will continue. Therefore, any investment
in our common stock may be highly illiquid and without a market value.
14
27. LOW-PRICED STOCKS MAY AFFECT THE RESELL OF OUR SHARES.
Penny Stock Regulation Broker-dealer practices in connection with
transactions in "Penny Stocks" are regulated by certain penny stock rules
adopted by the Securities and Exchange Commission. Penny stocks generally are
equity securities with a price of less than $5.00 (other than securities
registered on certain national securities exchanges or quoted on the NASDAQ
system). 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 that provides information about penny
stocks and the risk associated with the penny stock market. The broker-dealer
must also 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
penny stock held in the customer's account. In addition, the penny stock
rules generally require that prior to a transaction in a penny stock; the
broker-dealer must make a 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
a stock that becomes subject to the penny stock rules. When the Registration
Statement becomes effective and the Company's securities become registered,
the stock will likely have a trading price of less than $5.00 per share and
will not be traded on any exchanges. Therefore, the Company's stock is
initially selling at $0.01 per share they will become subject to the penny
stock rules and investors may find it more difficult to sell their
securities, should they desire to do so.
SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS
We have made forward-looking statements in this prospectus, including the
sections entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business," that are based on our
management's beliefs and assumptions and on information currently available
to our management. Forward-looking statements include the information
concerning our possible or assumed future results of operations, business
strategies, financing plans, competitive position, industry environment,
potential growth opportunities, the effects of future regulation, and the
effects of competition. Forward-looking statements include all statements
that are not historical facts and can be identified by the use of forward-
looking terminology such as the words "believe," "expect," "anticipate,"
"intend," "plan," "estimate" or similar expressions. These statements are
only predictions and involve known and unknown risks and uncertainties,
including the risks outlined under "Risk Factors" and elsewhere in this
prospectus.
Although we believe that the expectations reflected in our forward-looking
statements are reasonable, we cannot guarantee future results, events, levels
of activity, performance or achievement. We are not under any duty to update
any of the forward-looking statements after the date of this prospectus to
conform these statements to actual results, unless required by law.
15
Use of Proceeds
---------------
We will not receive any of the proceeds from the sale of the common shares
being offered for sale by the selling security holders. However, we will
receive up to $10,000 in proceeds from the sale of shares offered by us under
this prospectus. The proceeds we receive shall be used to further purchase
raw materials to produce specialty enzymes. The use of proceeds include:
Use of Proceeds
- ---------------
Maximum Percent
-------- --------
Total Proceeds $10,000 100.0%
Less: Offering Expenses
Commissions & Finders Fees $ 0
Transfer Agent fees* $ 700 7.0%
Copying* $ 300 3.0%
-------------------
TOTAL OFFERING EXPENSES $ 1,000 10.0%
Net Proceeds From Offering $ 9,000 90.0%
Use of Proceeds:
Raw Materials to produce
specialty enzymes $ 5,000 50.0%
Packaging of proprietary $ 1,000 10.0%
enzyme products
Marketing Expense $ 3,000 30.0%
(sample distribution to
potential customers)
---------------------
Total Use of Net Proceeds $ 9,000 90.0%
--------------------
Total Use of All Proceeds $10,000 100.0%
======= =======
*Estimated Expenses
16
DILUTION
"Dilution" represents the difference between the offering price of the shares
of common stock and the net book value per share of common stock immediately
after completion of the offering. "Net book value" is the amount that
results from subtracting total liabilities from total assets. In this
offering, the level of dilution is increased as a result of the relatively
low book value of EnzymeBioSystems issued and outstanding stock. This is due
in part to our founding shareholders, who received shares of our common stock
at our formation or in exchange for cash put in the company, paid $30,500 for
30,500,000 shares, or $0.001 per share for their shares. The following table
sets forth on a pro forma basis at June 30, 2009, the differences between
existing stockholders and new investors with respect to the number of shares
of common stock purchased from us, the total consideration paid to us, and
the average price paid per share (assuming a proposed public offering price
of $0.01 per share).
The dilution calculations we have set forth in this section reflect an
offering price of $0.01 per share.
As of June 30, 2008, we had a net tangible book deficit of $30,500 or $0.001
per share of issued and outstanding common stock. After giving effect to the
sale of the shares proposed to be offered in the maximum offering of
1,000,000 shares, the net tangible book value at that date would have been
$40,500 or $0.0013 per share. This represents an immediate increase in net
tangible book value of $0.0003 per share to existing shareholders and an
immediate dilution of $0.008 per share to new investors.
The following table illustrates the dilution to the purchaser of the common
stock in this offering.
Dilution Table
--------------
Maximum Offering
----------------
Net tangible book value per
share at June 30, 2009 $0.001
Net tangible book value after
this Offering $0.0013
Increase per share attributable
to new stockholders $0.0003
Dilution $0.00871
Dilution as percentage of
purchase price 87.14%
17
Selling Security Holders
------------------------
The following table sets forth the shares beneficially owned, as of June 30,
2009, by the selling stockholders prior to the offering contemplated by this
prospectus, the number of shares each selling stockholder is offering by this
prospectus and the number of shares which each would own beneficially if all
such offered shares are sold. None of the selling stockholders is a
registered broker-dealer or an affiliate of a registered broker-dealer.
The shares were offered and sold to the selling stockholders as founders of
the Company under Section 4(2) of the Securities Act as a transaction not
involving a public offering. None of the selling stockholders are affiliates
or controlled by our affiliates and none of the selling stockholders are now
or were at any time in the past an officer or director of ours or any of any
of our predecessors or affiliates.
Selling Security Holders
Shares Percent Shares Percent
Shares for before before after after
Selling Security Holder sale offering offering offering offering(1)
- -------------------------------------------------------------------------------
Edgar Nalbandyan 1,500,000 1,500,000 4.9% 1,500,000 4.7%
Lida Gevorgyan 1,500,000 1,500,000 4.9% 1,500,000 4.7%
Haikanush Yeranossian 1,500,000 1,500,000 4.9% 1,500,000 4.7%
Frounz Yeranossian 1,500,000 1,500,000 4.9% 1,500,000 4.7%
Anton Yeranossian 1,500,000 1,500,000 4.9% 1,500,000 4.7%
Hasmik Hayrapetyan 1,500,000 1,500,000 4.9% 1,500,000 4.7%
Karine Abrahamyan 1,500,000 1,500,000 4.9% 1,500,000 4.7%
- -------------------------------------------------------------------------------
Totals 10,500,000 10,500,000 34.3% 10,500,000 32.9%
(1) Assumes all of the shares of common stock offered in this prospectus are
sold and no other shares of common stock are sold or issued during this
offering period. Based on 30,500,000 shares of common stock issued and
outstanding as of June 30, 2009 and 31,500,000 shares of common stock after
the offering is completed.
18
We may require the selling security holders to suspend the sales of the
securities offered by this prospectus upon the occurrence of any event that
makes any statement in this prospectus, or the related registration
statement, untrue in any material respect, or that requires the changing of
statements in these documents in order to make statements in those documents
not misleading. We will file a post-effective amendment to this registration
statement to reflect any material changes to this prospectus.
DETERMINATION OF OFFERING PRICE
There is no established public market for the shares we are registering. Our
management has established the price of $0.01 per share based upon their
estimates of the market value of EnzymeBioSystems and the price at which
potential investors might be willing to purchase the shares offered.
We are registering up to 10,500,000 shares for resale by existing holders of
our common stock. Additionally, we are registering up to 1,000,000 shares to
be offered by our Company. If we are successful at selling all of the shares
being offered by our Company, our gross proceeds from such offering will be
$10,000.
PLAN OF DISTRIBUTION
The Offering
We are offering up to a total of 11,500,000 shares. The offering price is
$0.01 per share. The offering will terminate when all 1,000,000 shares are
sold or if not all of the shares are sold, the offering will close on
December 31, 2009, unless we terminate it earlier. The offering relates to
the sale by us of up to 1,000,000 shares of common stock and to the resale by
certain selling security holders of the Company of up to 10,500,000 shares of
common stock.
The offering is being conducted on a self-underwritten, best effort basis,
which means our officers/directors will attempt to sell the shares. We
cannot assure you that all of the shares offered under this prospectus will
be sold. No one has committed to purchase any of the shares offered.
Therefore, we may not be able to sell all of 1,000,000 shares in this
offering. All subscription funds will be held in our attorney's Trust
Account.
The shares will be offered at a price of $0.01 per share from the effective
date of this prospectus until December 31, 2009, unless terminated by our
board of directors. Certificates for shares purchased will be issued and
distributed promptly provided all shares are sold, the subscription is
accepted and "good funds" are received in our escrow account.
The proceeds from the sale of the shares in this offering will be payable to
Thomas C. Cook Client Trust Account fbo EnzymeBioSystems.
19
We reserve the right to withdraw or cancel this offering and to accept or
reject any subscription in whole or in part, for any reason or for no reason.
Subscriptions will be accepted or rejected promptly. All monies from
rejected subscriptions will be returned immediately by us to the subscriber,
without interest or deductions.
We have no intention of inviting broker-dealer participation in this
offering.
Our officers and directors intend to seek to sell the common stock to be sold
by us in this offering by contacting persons with whom they have had prior
contact who have expressed interest in us, and by seeking additional persons
who may have interest through various methods such as mail, telephone, and
email. Any solicitations by mail or email will be preceded by or accompanied
by a copy of this Prospectus. We do not intend to offer the securities over
the Internet or through general solicitation or advertising. Our officers
and directors are relying on an exemption from registration as a broker-
dealer pursuant to Rule 3a4-1 of the Securities Exchange Act of 1934 in that
they are not statutorily disqualified, are not associated with a broker or
dealer, are not receiving compensation related to these transactions, and
perform substantial other duties for us.
We anticipate that a market maker will apply to have our common stock traded
on the over-the-counter bulletin board at some point in the future, but there
is no guarantee this will occur. If successful, the selling stockholders
will be able to sell their shares referenced under "Selling Security Holders"
from time to time on the over-the-counter bulletin board in privately
negotiated sales, or on other markets, at prevailing market rates. If our
common stock is not listed on the over-the-counter bulletin board, the
selling stockholders may sell their shares in privately negotiated
transactions. Any securities sold in brokerage transactions will involve
customary brokers' commissions.
We will pay all expenses in connection with the registration and sale of the
common stock by the selling security holders, who may be deemed to be
underwriters in connection with their offering of shares. The estimated
expenses of issuance and distribution are set forth below:
20
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
------
U. S. Securities and Exchange Commission registration fee $ 6
Legal fees and miscellaneous expenses* $1,000
Audit Fees $2,500
Transfer Agent fees* $ 500
Printing* $ 294
------
Total $4,300
======
*Estimated Expenses
Under the securities laws of certain states, the shares of common stock may
be sold in such states only through registered or licensed brokers or
dealers. The selling stockholders are advised to ensure that any
underwriters, brokers, dealers or agents effecting transactions on behalf of
the selling stockholders are registered to sell securities in all fifty
states. In addition, in certain states the shares of common stock may not be
sold unless the shares have been registered or qualified for sale in such
state or an exemption from registration or qualification is available and we
have complied with them. The selling stockholders and any brokers, dealers
or agents that participate in the distribution of common stock may be
considered underwriters, and any profit on the sale of common stock by them
and any discounts, concessions or commissions received by those underwriters,
brokers, dealers or agents may be considered underwriting discounts and
commissions under the Securities Act of 1933.
In accordance with Regulation M under the Securities Exchange Act of 1934,
neither we nor the selling stockholders may bid for, purchase or attempt to
induce any person to bid for or purchase, any of our common stock while we or
they are selling stock in this offering. Neither we nor any of the selling
stockholders intends to engage in any passive market making or undertake any
stabilizing activity for our common stock. None of the selling stockholders
will engage in any short selling of our securities. Further, under the rules
and regulations of the NASD, any broker-dealer may not receive discounts,
concessions, or commissions in excess of 8% in connection with the sale of
any securities registered hereunder.
21
DESCRIPTION OF SECURITIES
Our authorized capital stock consists of 195,000,000 shares of common stock,
par value $0.001. We have 5,000,000 shares of preferred stock authorized,
par value $0.001. As of June 30, 2009, there are 30,500,000 shares of our
common stock issued and outstanding, held by nine (9) shareholders of record
and no preferred shares issued.
Common Stock. Each shareholder of our common stock is entitled to a pro rata
share of cash distributions made to shareholders, including dividend
payments. The holders of our common stock are entitled to one vote for each
share of record on all matters to be voted on by shareholders. There is no
cumulative voting with respect to the election of our directors or any other
matter. Therefore, the holders of more than 50% of the shares voted for the
election of those directors can elect all of the directors. The holders of
our common stock are entitled to receive dividends when and if declared by
our Board of Directors from funds legally available therefore. Cash
dividends are at the sole discretion of our Board of Directors. In the event
of our liquidation, dissolution or winding up, the holders of common stock
are entitled to share ratably in all assets remaining available for
distribution to them after payment of our liabilities and after provision has
been made for each class of stock, if any, having any preference in relation
to our common stock. Holders of shares of our common stock have no
conversion, preemptive or other subscription rights, and there are no
redemption provisions applicable to our common stock.
Dividend Policy. We have never issued any dividends and do not expect to pay
any stock dividend or any cash dividends on our common stock in the
foreseeable future. We currently intend to retain our earnings, if any, for
use in our business. Any dividends declared on our common stock in the
future will be at the discretion of our Board of Directors and subject to any
restrictions that may be imposed by our lenders.
Preferred Stock. We have no shares of preferred stock issued.
Stock Option Plan. We have not approved any stock option plans.
22
DESCRIPTION OF BUSINESS
Company History
- ---------------
We were formed on June 26, 2009 as EnzymeBioSystems, a Nevada corporation.
We are a startup company that plan to manufacture specialty enzymes.
Activities to date have been limited primarily to organization, initial
capitalization, establishing administrative offices in Solon, Ohio, and
commencing our initial operational plans. As of the date of this offering
circular, the Company has developed a business plan, established
administrative offices and started obtaining materials to build its
laboratory.
Overview
- --------
We a start-up company focused on becoming a manufacturing organization,
focused on the discovery, development and commercialization of improved
enzyme products to be used by pharmaceutical and biotechnology companies in
developing drug compounds, biologics, specialized enzymes and drug delivery
services.
We foresee our three areas of business opportunity, includes: 1) buying raw
materials to produce specialty enzymes in our lab facility and offer these
products for sale to research facilities and pharmaceutical companies; 2)
become a specialty contract manufacture for research universities and
pharmaceutical companies that utilize enzymes in their research programs;
and, 3) Publish in research and medical journals theoretical and practical
applications of enzyme research, for the direct purpose of selling our
research applications to research facilities.
We plan to deploy our enzyme technologies across diverse markets that
represent commercial opportunities. We plan to use enzyme technologies to
develop commercial solutions for a broad range of applications within the
specialty chemical industry. These markets are largely served by a small
number of large, well-established businesses and research university centers.
We plan to work collaboratively with those industrial companies to develop
differentiated, high performance enzyme solutions for their target markets,
and to leverage their well-developed distribution capabilities to better
exploit commercial opportunities. We believe that this market approach might
give us the ability to broadly apply our unique enzyme development and
manufacturing capabilities while minimizing commercialization risk.
We currently have only limited resources and capability to develop,
manufacture, market, sell, or distribute specialty enzyme products on a
commercial scale. We will determine which specialty enzyme products to
pursue independently based on various criteria, including: investment
required, estimated time to market, regulatory hurdles, infrastructure
requirements, and industry-specific expertise necessary for successful
commercialization. At any time, we may modify our strategy and pursue
collaborations for the development and commercialization of some specialty
enzyme products that we had intended to pursue independently. In order for
us to commercialize more specialty enzyme products directly, we plan to
establish or obtain through outsourcing arrangements additional capability to
develop, manufacture, market, sell, and distribute such products.
23
We plan to pursue corporate and university research center partnerships to
enable the development of a broad portfolio of enzyme products and
commercialize additional enzyme products. To date, we have yet to
commercialize any enzyme products. Our goal is to establish a pipeline of
early-to-late-stage product candidates that could be commercialized in the
next year.
We have identified key market segments where we hope to develop enzyme
products through strategic partnerships. Our established criteria for
entering into such partnerships include:
o commercial revenue opportunity and novelty of the product(s);
o estimated time to market;
o regulatory hurdles;
o infrastructure requirements; industry-specific expertise necessary
for successful commercialization; and
o sufficiency of financial resources to fund development and
commercialization efforts.
Management believes that our future partnerships will allow us to utilize our
partners' marketing and distribution networks, share the investment risk, and
access additional resources to expand our product portfolio and market
opportunities. In entering these agreements, we plan to obtain a combination
of technology access fees, research support payments, license or
commercialization fees, and royalties from the commercialization of products
resulting from these alliances.
We plan to protect and enhance our technology leadership position for the
development of novel enzymes. We believe that our particular scientific,
manufacturing, process engineering and technology capabilities will represent
a significant, competitive advantage which we expect to maintain and extend.
These capabilities include an end-to-end enzyme product solution, consisting
of:
o multiple evolution technologies for optimizing enzymes;
o manufacturing know-how and capabilities; and
o development of heterologous expression systems which allow for a
broader range of organisms from which to develop product candidates.
Marketing Strategy
- ------------------
Through our future independent and collaborative research and development
programs, we plan to develop commercial enzyme products across multiple
markets. In addition, we plan to develop a pipeline of enzyme product
candidates that we expect to launch independently and/or in collaboration
with strategic partners. Once we develop our innovative enzyme products, we
plan to send samples of these products to potential customers. This will
give them an opportunity to evaluate our products as compared to the enzymes
they are purchasing from our competition.
24
Competition
- -----------
Our competitors have substantially greater financial, technical, and
marketing resources than we do and may succeed in developing products that
would render our products obsolete or noncompetitive. In addition, many of
these competitors have significantly greater experience than we do in their
respective fields. Our ability to compete successfully will depend on our
ability to develop proprietary products that reach the market in a timely
manner and are technologically superior to, and/or are less expensive than,
other products on the market. Current competitors or other companies may
develop technologies and products that are more effective than ours. Our
technologies and products may be rendered obsolete or uneconomical by
technological advances or entirely different approaches developed by one or
more of our competitors. The existing approaches of our competitors or new
approaches or technology developed by our competitors may be more effective
than those developed by us.
Any enzyme products that we develop will compete in multiple, highly
competitive markets. For example, Codexis, Maxygen, Inc., Evotec, and Xencor
have alternative evolution technologies. Integrated Genomics Inc., Myriad
Genetics, Inc., and ArQule, Inc. perform screening, sequencing, and/or
bioinformatics services. Novozymes A/S, Verenium Corporation, Genencor
International Inc. and MPBiomedicals are involved in development,
overexpression, fermentation, and purification of enzymes. There are also a
number of academic institutions involved in various phases of our technology
process. Many of these competitors have significantly greater financial and
human resources than we do. We believe that the principal competitive
factors in our market are access to genetic material, technological
experience and expertise, and proprietary position.
Our Growth Strategy
- -------------------
Management is preparing a number of trade articles to publish in research and
medical journals on the theoretical and practical applications of enzyme
research. Management hopes these articles will give the Company some
notoriety among enzyme researchers/users. The articles are being prepared
for the direct purpose of selling our research applications to research
facilities and end users. If enzyme researchers/users are intrigued by the
applications discussed in the research articles, management believes these
researches/users will become future customers and purchase specialty enzymes
from EnzymeBioSystems. Also, management hopes to position the Company,
whereby it receives royalties from the enzyme applications it develops and
markets.
Sources and Availability of Raw Materials
- -----------------------------------------
We plan to purchase raw materials to manufacture specialty enzymes from
outside suppliers.
25
Dependence on Major Customers
- -----------------------------
At this time, we have yet to achieve any revenues, and we have no customers.
We expect our products will be purchased by a limited number of customers
such as pharmaceutical and biotechnology companies who develop drug
compounds, biologics, specialized enzymes and drug delivery services and
research universities.
Patents, Trademarks and Licenses
- --------------------------------
We do not have any trademarks, patents, or other intellectual property.
We plan to rely on trade secrets, technical know-how, and continuing
invention to develop and maintain our competitive position. We will take
security measures to protect our trade secrets, proprietary know-how and
technologies, and confidential data and continue to explore further methods
of protection. Our policy is to execute confidentiality agreements with our
employees and consultants upon the commencement of an employment or
consulting arrangement with us. These agreements generally require that all
confidential information developed or made known to the individual by us
during the course of the individual's relationship with us be kept
confidential and not disclosed to third parties. These agreements also
generally provide that inventions conceived by the individual in the course
of rendering services to us shall be our exclusive property.
Need for Government Approval
- ----------------------------
Non-drug biologically derived products are regulated in the United States
based on their application, by either the United States Food and Drug
Administration, or FDA, the Environmental Protection Agency, or EPA, or, in
the case of plants and animals, the United States Department of Agriculture,
or USDA. In addition to regulating drugs, the FDA also regulates food and
food additives, feed and feed additives, and GRAS (Generally Recognized As
Safe) substances used in the processing of food. The EPA regulates
biologically derived chemicals not within the FDA's jurisdiction. Although
the food and industrial regulatory process can vary significantly in time and
expense from application to application, the timelines generally are shorter
in duration than the drug regulatory process.
We are subject to regulation by the FDA and comparable regulatory agencies in
foreign countries with respect to the development and commercialization of
products resulting from our drug discovery activities. The FDA and
comparable regulatory bodies in other countries currently regulate enzymes
and related pharmaceutical products as biologics. Biologics are subject to
extensive pre- and post-market regulation by the FDA, including regulations
that govern the collection, testing, manufacture, safety, efficacy, potency,
labeling, storage, record keeping, advertising, promotion, sale and
distribution of the products.
26
Although there are some centralized procedures for filings in the European
Union countries, in general each country has its own procedures and
requirements, and compliance with these procedures and requirements may be
expensive and time-consuming. Accordingly, there may be substantial delays
in obtaining required approvals from foreign regulatory authorities after the
relevant applications are filed, if approvals are ultimately received at all.
Effect of Government Regulation on Business
- -------------------------------------------
In the United States, transgenic agricultural products may be reviewed by the
FDA, EPA, and USDA, depending on the plant and the trait engineered into it.
The regulatory process for these agricultural products can take up to five
years of field testing under USDA oversight, and up to another two years for
applicable agencies to complete their reviews.
Outside of the United States, scientifically-based standards, guidelines and
recommendations pertinent to transgenic and other products intended for the
international marketplace are being developed by, among others, the
representatives of national governments within the jurisdiction of the
standard-setting bodies, including Codex Alimentarius, the International
Plant Protection Convention, and the Office des International Epizooties. The
use of the existing standard-setting bodies to address concerns about
products of biotechnology is intended to harmonize risk-assessment
methodologies and evaluation of specific products or classes of products.
In the future we may be subject to additional laws, regulations, policies,
approvals and the like of federal, state, local, municipal, foreign and other
bodies.
Research and Development
- ------------------------
Research and development expenses related to our specialty enzyme business
include costs related to ongoing bioprocess development and manufacturing
process yield improvements, funded support for research collaborations and to
a lesser extent, early stage product development. Due to limited capital
resources and challenging economic conditions expected in 2009, we do not
anticipate that we will spend significant resources on early stage specialty
enzyme product development during 2009 without additional investment from
strategic partners.
Environmental Regulation
- ------------------------
We seek to comply with all applicable statutory and administrative
requirements concerning environmental quality. We have made, and will
continue to make, expenditures for environmental compliance and protection.
Expenditures for compliance with environmental laws have not had, and are not
expected to have, a material effect on our capital expenditures, results of
operation or competitive position.
27
Employees
- ---------
The Company currently has: two Officers, who are also Directors of the
Company, these two individuals perform all of the job functions for the
Company. Ashot Martirosyan, our President plans to devote 40 hours per week
of his time to our business; and Anushavan Yeranosyan, our Secretary/Treasure
plans to devote 20 hours per week of his time to our business. The Company
has no intention at this time to add employees until it can become a
profitable entity. The Company from time to time may retain independent
consultants in connection with its operations.
(i) The Company's performance is dependent on the performance of its
officers. In particular, the Company's success depends on their ability to
develop a business strategy which will be successful for the Company.
(ii) The Company does not carry key person life insurance on any of its
personnel. The loss of the services of any of its executive officers or other
key employees could have a material adverse effect on the business, results
of operations and financial condition of the Company. The Company's future
success also depends on its ability to retain and attract highly qualified
technical and managerial personnel.
(iii) There can be no assurance that the Company will be able to retain its
key managerial and technical personnel or that it will be able to attract and
retain additional highly qualified technical and managerial personnel in the
future. The inability to attract and retain the technical and managerial
personnel necessary to support the growth of the Company's business, due to,
among other things, a large increase in the wages demanded by such personnel,
could have a material adverse effect upon the Company's business, results of
operations and financial condition.
DESCRIPTION OF PROPERTY
Our executive offices are located in Solon, Ohio, at 35595 Spatterdeock Lane,
Solon, OH 44139, Tel: (440) 554-5417. This executive office is being
provided at no cost by one of the Officers of the Company. The Officer will
not seek reimbursement for providing this office space. We are looking to
lease a facility of approximately 1,000 square feet to build our laboratory.
The officers of the company plan to build the laboratory themselves, as one
is a systems engineer, and the other is a chemical engineer.
LEGAL PROCEEDINGS
We are not a party to or otherwise involved in any legal proceedings.
In the ordinary course of business, we expect from time to time we will be
involved in various pending or threatened legal actions. The litigation
process is inherently uncertain and it is possible that the resolution of
such matters might have a material adverse effect upon our financial
condition and/or results of operations. However, in the opinion of our
management, other than as set forth herein, matters currently pending or
threatened against us are not expected to have a material adverse effect on
our financial position or results of operations.
28
FINANCIAL STATEMENTS
EnzymeBioSystems
(A DEVELOPMENT STAGE COMPANY)
INDEX TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
EnzymeBioSystems
June 30, 2009
PAGE
----
Year end June 30, 2009 Financials (audited):
Independent Auditors' Report F-1
Balance Sheet F-2
Statements of Operations F-3
Statements of Changes in Stockholders' Equity F-4
Statements of Cash Flows F-5
Notes to Financials F-6-13
29
MOORE & ASSOCIATES, CHARTERED
ACCOUNTANTS AND ADVISORS
------------------------
PCAOB REGISTERED
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-------------------------------------------------------
To the Board of Directors
EnzymeBioSystems
(A Development Stage Company)
We have audited the accompanying balance sheet of EnzymeBioSystems (A
Development Stage Company) as of June 30, 2009, and the related statements of
operations, stockholders' equity and cash flows for the period from inception
on June 26, 2009 through June 30, 2009. 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 standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
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 EnzymeBioSystems (A
Development Stage Company) as of June 30, 2009, and the related statements
of operations, stockholders' equity and cash flows for the period from
inception on June 26, 2009 through June 30, 2009, in conformity with
accounting principles generally accepted 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 has accumulated deficit of $500 as of June
30, 2009, which raises substantial doubt about its ability to continue as a
going concern. Management's plans concerning these matters are also
described in Note 3. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Moore & Associates, Chartered
- ---------------------------------
Moore & Associates Chartered
Las Vegas, Nevada
July 7, 2009
6490 West Desert Inn Road, Las Vegas, NV 89146
(702) 253-7499 Fax (702) 253-7501
F-1
EnzymeBioSystems
(A Development Stage Company)
Balance Sheet
June 30,
2009
------------
ASSETS
Current Assets:
Cash $ -
Funds held in escrow 30,500
-----------
Total current assets 30,500
------------
TOTAL ASSETS $ 30,500
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Stockholders' equity:
Preferred stock, $0.001 par value, 5,000,000
shares authorized, none issued and
outstanding as of 6/30/09 -
Common stock, $0.001 par value, 195,000,000
shares authorized, 30,500,000 shares issued and
outstanding as of 6/30/09 30,500
Additional Paid-in Capital 500
(Deficit) accumulated during
development stage (500)
------------
Total stockholders' equity 30,500
------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 30,500
============
The accompanying notes are an integral part of these financial statements.
F-2
EnzymeBioSystems
(A Development Stage Company)
Statement of Operations
For the period
from
June 26, 2009
(Inception) to
June 30, 2009
--------------
Revenue $ -
--------------
Expenses:
Incorporating Fees 500
--------------
Total expenses 500
--------------
Net (loss) before income taxes (500)
Provision for income tax -
--------------
Net (loss) $ (500)
==============
Net (loss) per share - basic and fully diluted $ (0.00)
==============
Weighted average number of common shares outstanding -
basic and fully diluted 30,500,000
==============
The accompanying notes are an integral part of these financial statements.
F-3
EnzymeBioSystems
(A Development Stage Company)
Statement of Stockholders' Equity
(Deficit)
Preferred Accumulated
Common Stock Stock Additional During Total
------------------ -------------- Paid-in Development Stockholders
Shares Amt Shares Amt Capital Stage Equity
---------- ------- ------- ----- --------- ----------- ----------
June 26,
2009
Contributed
Capital - $ - - $ - $ 500 $ - $ 500
June 29,
2009
Founders
shares
issued for
cash at
$0.001 per
share 30,500,000 $30,500 - - - - 30,500
Net (loss)
for the
year ending
June 30,
2009 (500) (500)
---------- ------- ------- ----- --------- ----------- ----------
Balance,
June 30,
2009 30,500,000 $30,500 - $ - $ 500 $ (500) $ 30,500
========== ======= ======= ===== ========== ========== ==========
The accompanying notes are an integral part of these financial statements.
F-4
EnzymeBioSystems
(A Development Stage Company)
Statement of Cash Flows
For the period
from
June 26, 2009
(Inception) to
June 30, 2009
--------------
OPERATING ACTIVITIES:
Net (loss) $ (500)
--------------
Cash (used) by operating activities (500)
--------------
FINANCING ACTIVITIES:
Sale of Common Stock 30,500
Contributed Capital 500
--------------
Cash provided by financing activities 31,000
--------------
Net increase in cash 30,500
Cash at beginning of period -
--------------
Cash at end of period $ 30,500
==============
SUPPLEMENTAL DISCLOSURES:
Interest paid $ -
==============
Income taxes paid $ -
==============
Non-cash transactions $ -
==============
The accompanying notes are an integral part of these financial statements.
F-4
EnzymeBioSystems
(A Development Stage Company)
Notes to Financial Statements
June 30, 2009
NOTE 1. GENERAL ORGANIZATION AND BUSINESS
EnzymeBioSystems (the Company) was incorporated under the laws of the state
of Nevada on June 26, 2009. The Company has two officers and directors and
was organized to conduct any lawful business.
The Company has minimal operations and in accordance with the provisions of
the Financial Accounting Standards Board ("FASB") Statement of Financial
Accounting Standards ("SFAS") No. 7, the Company is considered a development
stage company.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
The Company had cash assets of $30,500 and no liabilities as of June 30, 2009.
The relevant accounting policies are listed below.
Basis of Accounting
- -------------------
The basis is United States generally accepted accounting principles.
Earnings per Share
- ------------------
Historical net (loss) per common share is computed using the weighted average
number of common shares outstanding. Diluted earnings per share include
additional dilution from common stock equivalents, such as stock issuable
pursuant to the exercise of securities or other contracts to issue common
stock were exercised or converted into common stock or resulted in the
issuance of common stock that shared in the earnings of the entity, but these
potential common stock equivalents were determined to be antidilutive.
Calculation of net income (loss) per share is as follows:
For the year ended
June 30, 2009
------------------
Net income (loss) (numerator) $ (500)
==================
Weighted average common
shares outstanding 30,500,000
Basic gain (loss) per share $ (0.00)
==================
Dividends
- ---------
The Company has not yet adopted any policy regarding payment of dividends.
No Dividends have been paid during the period shown.
F-5
EnzymeBioSystems
(A Development Stage Company)
Notes to Financial Statements
June 30, 2009
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES-CONTINUED
Income Taxes
- ------------
The provision for income taxes is the total of the current taxes payable and
the net of the change in the deferred income taxes. Provision is made for
the deferred income taxes where differences exist between the period in which
transactions affect current taxable income and the period in which they enter
into the determination of net income in the financial statements.
Year-end
- --------
The Company has selected June 30 as its year-end.
Advertising
- -----------
Advertising is expensed when incurred. There has been no advertising
during the period.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expenses during the reporting period. Actual results could
differ from those estimates.
NOTE 3. GOING CONCERN
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As shown in the accompanying financial
statements, the Company has incurred net losses of $(500) for the period
from June 26, 2009 (inception) to June 30, 2009. The future of the
Company is dependent upon its ability to obtain financing and upon future
profitable operations from the development of its new business opportunities.
Management has plans to seek additional capital through private placements
and public offerings of its common stock. The financial statements do not
include any adjustments relating to the recoverability and classification of
recorded assets, or the amounts of and classification of liabilities that
might be necessary in the event the Company cannot continue in existence.
F-6
EnzymeBioSystems
(A Development Stage Company)
Notes to Financial Statements
June 30, 2009
NOTE 3. GOING CONCERN (continued)
These conditions raise substantial doubt about the Company's ability to
continue as a going concern. These financial statements do not include any
adjustments that might arise from this uncertainty.
NOTE 4. STOCKHOLDERS'EQUITY
The Company is authorized to issue up to 5,000,000 of its $0.001 par value
preferred stock and up to 195,000,000 of its $0.001 par value common stock.
Preferred Stock
- ---------------
No shares of preferred stock have been issued.
Common Stock
- ------------
On June 29, 2009, the Company issued 30,500,000 shares of its $0.001 par
value common stock to its nine founders for $30,500 in cash.
No other issuances of preferred or common stock have been made.
NOTE 5. RELATED PARTY TRANSACTIONS
Office services are provided without charge by a director. Such costs are
immaterial to the financial statements and, accordingly, have not been
reflected therein. 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.
NOTE 6. PROVISION FOR INCOME TAXES
The Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("SFAS No. 109"), which
requires use of the liability method. SFAS No. 109 provides that deferred
tax assets and liabilities are recorded based on the differences between the
tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes, referred to as temporary differences. Deferred tax
F-7
EnzymeBioSystems
(A Development Stage Company)
Notes to Financial Statements
June 30, 2009
NOTE 6. PROVISION FOR INCOME TAXES (continued)
assets and liabilities at the end of each period are determined using the
currently enacted tax rates applied to taxable income in the periods in which
the deferred tax assets and liabilities are expected to be settled or
realized.
The provision for income taxes differs from the amount computed by applying
the statutory federal income tax rate to income before provision for income
taxes. The sources and tax effects of the differences are as follows:
U.S federal statutory rate (34.0%)
Valuation reserve 34.0%
------
Total -%
Income tax benefits as of June 30, 2009, are calculated as follows:
Book loss $ 500
Less: Book -
depreciation
Add: Tax -
depreciation
--------
Net loss $ 500
Effective 34%
tax rate
--------
Tax benefit $ 170
Valuation $ (170)
allowance
--------
$ -
--------
During the year ended June 30, 2009, the Company recorded a valuation
allowance of $500 on the deferred tax assets to reduce the total to an
amount that management believes will ultimately be realized. Realization of
deferred tax assets is dependent upon sufficient future taxable income during
the period that deductible temporary differences and carryforwards are
expected to be available to reduce taxable income. There was no other activity
in the valuation allowance account during the year ended June 30, 2009.
F-8
EnzymeBioSystems
(A Development Stage Company)
Notes to Financial Statements
June 30, 2009
NOTE 7. RECENT PRONOUNCEMENTS
In June 2008, the FASB issued FASB Staff Position EITF 03-6-1, Determining
Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities, ("FSP EITF 03-6-1"). FSP EITF 03-6-1 addresses
whether instruments granted in share-based payment transactions are
participating securities prior to vesting, and therefore need to be included
in the computation of earnings per share under the two-class method as
described in FASB Statement of Financial Accounting Standards No. 128,
"Earnings per Share." FSP EITF 03-6-1 is effective for financial statements
issued for fiscal years beginning on or after December 15, 2008 and earlier
adoption is prohibited. We are not required to adopt FSP EITF 03-6-1; neither
do we believe that FSP EITF 03-6-1 would have material effect on our
consolidated financial position and results of operations if adopted.
In May 2008, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 163, "Accounting for Financial Guarantee Insurance Contracts-and
interpretation of FASB Statement No. 60". SFAS No. 163 clarifies how
Statement 60 applies to financial guarantee insurance contracts, including
the recognition and measurement of premium revenue and claims liabilities.
This statement also requires expanded disclosures about financial guarantee
insurance contracts. SFAS No. 163 is effective for fiscal years beginning on
or after December 15, 2008, and interim periods within those years. SFAS No.
163 has no effect on the Company's financial position, statements of
operations, or cash flows at this time.
In May 2008, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 162, "The Hierarchy of Generally Accepted Accounting Principles". SFAS
No. 162 sets forth the level of authority to a given accounting pronouncement
or document by category. Where there might be conflicting guidance between
two categories, the more authoritative category will prevail. SFAS No. 162
will become effective 60 days after the SEC approves the PCAOB's amendments
to AU Section 411 of the AICPA Professional Standards. SFAS No. 162 has no
effect on the Company's financial position, statements of operations, or cash
flows at this time.
F-9
EnzymeBioSystems
(A Development Stage Company)
Notes to Financial Statements
June 30, 2009
NOTE 7. RECENT PRONOUNCEMENTS (continued)
In March 2008, the Financial Accounting Standards Board, or FASB, issued SFAS
No. 161, Disclosures about Derivative Instruments and Hedging Activities-an
amendment of FASB Statement No. 133. This standard requires companies to
provide enhanced disclosures about (a) how and why an entity uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under Statement 133 and its related interpretations, and (c)
how derivative instruments and related hedged items affect an entity's
financial position, financial performance, and cash flows. This Statement is
effective for financial statements issued for fiscal years and interim
periods beginning after November 15, 2008, with early application encouraged.
The Company has not yet adopted the provisions of SFAS No. 161, but does not
expect it to have a material impact on its consolidated financial position,
results of operations or cash flows.
In December 2007, the SEC issued Staff Accounting Bulletin (SAB) No. 110
regarding the use of a "simplified" method, as discussed in SAB No. 107 (SAB
107), in developing an estimate of expected term of "plain vanilla" share
options in accordance with SFAS No. 123 (R), Share-Based Payment. In
particular, the staff indicated in SAB 107 that it will accept a company's
election to use the simplified method, regardless of whether the company has
sufficient information to make more refined estimates of expected term. At
the time SAB 107 was issued, the staff believed that more detailed external
information about employee exercise behavior (e.g., employee exercise
patterns by industry and/or other categories of companies) would, over time,
become readily available to companies. Therefore, the staff stated in SAB 107
that it would not expect a company to use the simplified method for share
option grants after December 31, 2007. The staff understands that such
detailed information about employee exercise behavior may not be widely
available by December 31, 2007. Accordingly, the staff will continue to
accept, under certain circumstances, the use of the simplified method beyond
December 31, 2007. The Company currently uses the simplified method for
"plain vanilla" share options and warrants, and will assess the impact of SAB
110 for fiscal year 2009. It is not believed that this will have an impact on
the Company's consolidated financial position, results of operations or cash
flows.
F-10
EnzymeBioSystems
(A Development Stage Company)
Notes to Financial Statements
June 30, 2009
NOTE 7. RECENT PRONOUNCEMENTS (continued)
In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements-an amendment of ARB No. 51. This statement
amends ARB 51 to establish accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an
ownership interest in the consolidated entity that should be reported as
equity in the consolidated financial statements. Before this statement was
issued, limited guidance existed for reporting noncontrolling interests. As a
result, considerable diversity in practice existed. So-called minority
interests were reported in the consolidated statement of financial position
as liabilities or in the mezzanine section between liabilities and equity.
This statement improves comparability by eliminating that diversity. This
statement is effective for fiscal years, and interim periods within those
fiscal years, beginning on or after December 15, 2008 (that is, January 1,
2009, for entities with calendar year-ends). Earlier adoption is prohibited.
The effective date of this statement is the same as that of the related
Statement 141 (revised 2007). The Company will adopt this Statement beginning
March 1, 2009. It is not believed that this will have an impact on the
Company's consolidated financial position, results of operations or cash
flows.
In December 2007, the FASB, issued FAS No. 141 (revised 2007), Business
Combinations'. This Statement replaces FASB Statement No. 141, Business
Combinations, but retains the fundamental requirements in Statement 141.
This Statement establishes principles and requirements for how the acquirer:
(a) recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed, and any noncontrolling interest in
the acquiree; (b) recognizes and measures the goodwill acquired in the
business combination or a gain from a bargain purchase; and (c) determines
what information to disclose to enable users of the financial statements to
evaluate the nature and financial effects of the business combination. This
statement applies prospectively to business combinations for which the
acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008. An entity may not apply it
before that date. The effective date of this statement is the same as that of
the related FASB Statement No. 160, Noncontrolling Interests in Consolidated
Financial Statements. The Company will adopt this statement beginning March
1, 2009. It is not believed that this will have an impact on the Company's
consolidated financial position, results of operations or cash flows.
F-11
EnzymeBioSystems
(A Development Stage Company)
Notes to Financial Statements
June 30, 2009
NOTE 7. RECENT PRONOUNCEMENTS (continued)
In February 2007, the FASB, issued SFAS No. 159, The Fair Value Option for
Financial Assets and Liabilities-Including an Amendment of FASB Statement No.
115. This standard permits an entity to choose to measure many financial
instruments and certain other items at fair value. This option is available
to all entities. Most of the provisions in FAS 159 are elective; however, an
amendment to FAS 115 Accounting for Certain Investments in Debt and Equity
Securities applies to all entities with available for sale or trading
securities. Some requirements apply differently to entities that do not
report net income. SFAS No. 159 is effective as of the beginning of an
entity's first fiscal year that begins after November 15, 2007. Early
adoption is permitted as of the beginning of the previous fiscal year
provided that the entity makes that choice in the first 120 days of that
fiscal year and also elects to apply the provisions of SFAS No. 157 Fair
Value Measurements. The Company will adopt SFAS No. 159 beginning March 1,
2008 and is currently evaluating the potential impact the adoption of this
pronouncement will have on its consolidated financial statements.
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements.
This statement defines fair value, establishes a framework for measuring fair
value in generally accepted accounting principles (GAAP), and expands
disclosures about fair value measurements. This statement applies under other
accounting pronouncements that require or permit fair value measurements, the
Board having previously concluded in those accounting pronouncements that
fair value is the relevant measurement attribute. Accordingly, this statement
does not require any new fair value measurements. However, for some entities,
the application of this statement will change current practice. This
statement is effective for financial statements issued for fiscal years
beginning after November 15, 2007, and interim periods within those fiscal
years. Earlier application is encouraged, provided that the reporting entity
has not yet issued financial statements for that fiscal year, including
financial statements for an interim period within that fiscal year. The
Company will adopt this statement March 1, 2008, and it is not believed that
this will have an impact on the Company's consolidated financial position,
results of operations or cash flows.
F-12
EnzymeBioSystems
(A Development Stage Company)
Notes to Financial Statements
June 30, 2009
NOTE 8. CONCENTRATIONS OF RISKS
Cash Balances
- -------------
The Company maintains its cash in institutions insured by the Federal Deposit
Insurance Corporation (FDIC). This government corporation insured balances
up to $100,000 through October 13, 2008. As of October 14, 2008 all non-
interest bearing transaction deposit accounts at an FDIC-insured institution,
including all personal and business checking deposit accounts that do not
earn interest, are fully insured for the entire amount in the deposit
account. This unlimited insurance coverage is temporary and will remain in
effect for participating institutions until December 31, 2009.
All other deposit accounts at FDIC-insured institutions are insured up to at
least $250,000 per depositor until December 31, 2009. On January 1, 2010,
FDIC deposit insurance for all deposit accounts, except for certain
retirement accounts, will return to at least $100,000 per depositor.
Insurance coverage for certain retirement accounts, which include all IRA
deposit accounts, will remain at $250,000 per depositor.
F-13
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Disclaimer Regarding Forward Looking Statements
You should read the following discussion in conjunction with our financial
statements and the related notes and other financial information included in
this Form S-1. In addition to historical financial information, the following
discussion contains forward-looking statements that reflect our plans,
estimates and beliefs. Our actual results could differ materially. Factors
that could cause or contribute to these differences include those discussed
below and elsewhere in this Form S-1, particularly in the Section titled Risk
Factors.
Although the forward-looking statements in this Registration Statement
reflect the good faith judgment of our management, such statements can only
be based on facts and factors currently known by them. Consequently, and
because forward-looking statements are inherently subject to risks and
uncertainties, the actual results and outcomes may differ materially from the
results and outcomes discussed in the forward-looking statements. You are
urged to carefully review and consider the various disclosures made by us in
this report and in our other reports as we attempt to advise interested
parties of the risks and factors that may affect our business, financial
condition, and results of operations and prospects.
Summary Overview
- ----------------
We are a start-up company focused on becoming a manufacturing organization,
focused on the discovery, development and commercialization of improved
enzyme products to be used by pharmaceutical and biotechnology companies in
developing drug compounds, biologics, specialized enzymes and drug delivery
services.
We foresee our three areas of business opportunity, includes: 1) buying raw
materials to produce specialty enzymes in our lab facility and offer these
products for sale to research facilities and pharmaceutical companies; 2)
become a specialty contract manufacture for research universities and
pharmaceutical companies that utilize enzymes in their research programs;
and, 3) Publish in research and medical journals theoretical and practical
applications of enzyme research, for the direct purpose of selling our
research applications to research facilities.
30
Plan of Operation
- -----------------
As of the date of this Registration Statement, we have serious concerns as to
whether we have, and will have, sufficient cash flow to continue to operate
for the next twelve months if we are not successful in finding a market for
our future enzyme products. We will apply any proceeds from future revenues
to help cover our expenditures, but we anticipate that our projected
expenditures will most likely exceed any proceeds from those revenues over
the next twelve months, which will require that we obtain new financing in
order for us to pursue our current plan of operations. We plan to look for
both public and private sources of financing. There can be no assurance,
however, that we can obtain sufficient capital on acceptable terms, if at
all. If we do not achieve the necessary financing, then we will not be able
to proceed with our planned activities, which would materially adversely
effect our financial condition, business prospects and results of operations.
Explanatory Paragraph in Our Independent Registered Public Accounting
Firm Report
- --------------------------------------------------------------------------
Our independent accountants have included an explanatory paragraph in their
most recent report, stating that our audited financial statements for the
year ending June 30, 2009, were prepared assuming that we will continue as a
going concern. They note that we are dependent upon our ability to obtain
financing and upon future profitable operations from the development of our
business opportunities, and that there are no assurances that we will be able
to meet our financial obligations in the future.
Background
- ----------
We were formed on June 26, 2009 as EnzymeBioSystems, a Nevada corporation.
We are a startup company that plan to manufacture specialty enzymes.
Activities to date have been limited primarily to organization, initial
capitalization, establishing administrative offices in Solon, Ohio, and
commencing our initial operational plans. As of the date of this offering
circular, the Company has developed a business plan, established
administrative offices and started obtaining materials to build its
laboratory.
We a start-up company focused on becoming a manufacturing organization,
focused on the discovery, development and commercialization of improved
enzyme products to be used by pharmaceutical and biotechnology companies in
developing drug compounds, biologics, specialized enzymes and drug delivery
services.
31
Results of Operations
- ---------------------
From Inception on June 26, 2009, through June 30, 2009
- ------------------------------------------------------
During the period from inception on June 26, 2009 to June 30 2009, we have
generated no revenues. Our net loss since inception is $500. This is the
fee paid for incorporation.
Since inception, we have sold 30,500,000 shares of common stock at $0.001 per
share to our nine founders for proceeds of $30,500.
As of the date of this Prospectus we have hired an attorney in relation to
this Registration Statement, and an auditor to audit our financial
statements.
Liquidity and Capital Resources
- -------------------------------
As of June 30, 2009, our total current assets were $30,500. As of June 30,
2009, our total liabilities were $0. We expect to incur losses over the next
two years.
We have funded our operations through financing activities consisting
primarily of the purchase of our securities from our founders.
During the period from inception to June 30, 2009, proceeds were received
from the sale of common stock of $30,500. In addition, our Director
contributed to us a $500 to pay for incorporation, with the Nevada Secretary
of State. Our Director will not seek reimbursement for this contributed
capital.
Cash Requirements
- -----------------
We intend to use the funds raised the by offering described herein to
purchase raw materials, package final materials, and ship samples to our
potential customers.
We anticipate we may need to rely on equity sales of our common shares in
order to continue to fund our business operations, if we cannot generate
enough revenues to cover our projected expenses. 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 research and
development activities.
32
Sources and Uses of Cash
- ------------------------
We did not receive any cash from operations for the year ended June 30, 2009.
We used ($500) in cash for incorporation fees during this period. Until we
have operations we do not anticipate we will generate any cash from operating
activities. Until that time we believe we have sufficient funds available to
sustain our operations for the next twelve months.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
We have no disclosure required by this Item.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risks, which include interest rate risk and
potentially the prices of commodities. We do not engage in financial
transactions for trading or speculative purposes.
Commodity Prices. We are exposed to fluctuation in market prices for our raw
materials. To mitigate risk associated with increases in market prices and
commodity availability, we plan negotiate contracts with favorable terms
directly with vendors. We do not enter into forward contracts or other
market instruments as a means of achieving our objectives or minimizing our
risk exposures on these materials.
33
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
The following table sets forth the names and ages of the current directors
and executive officers of the Company, the principal offices and positions
with the Company held by each person and the date such person became a
director or executive officer of the Company. The executive officers of the
Company are elected annually by the Board of Directors. The directors serve
one-year terms until their successors are elected. The executive officers
serve terms of one year or until their death, resignation or removal by the
Board of Directors. There are no family relationships among any of the
directors and officers.
Name Age Positions and Offices Held
- --------------- --- --------------------------
Ashot Martirosyan 57 President and Director
Anushavan Yeranosyan 46 Secretary, Treasurer and Director
Ashot Martirosyan - Background
- -------------------------------
1992 - 2008 Institute of Fine Organic Chemistry,
National Academy of Sciences, Republic of Armenia
Head of Antibiotics Laboratory
1984 - 1992 Institute of Fine Organic Chemistry,
National Academy of Sciences, Republic of Armenia
Senior Researcher
1976 - 1984 Institute of Fine Organic Chemistry,
National Academy of Sciences, Republic of Armenia
Antibiotics Laboratory Researcher
1974 - 1976 Optical-Mechanical Corporation - "Astro"
Head of Chemical Laboratory
Education:
1980 - 1984 Yerevan State University
Ph.D. degree, Candidate of Chemical Sciences: Organic
Chemistry
1969 - 1974 Moscow Chemical and Technological Institute of D.I. Mendeleev
Department of Organic Chemistry
Chemical Technology
34
Anushavan Yeranosyan - Background
2002 - 2009 Cutting Systems, Inc.
United States
Director of Engineering
1998 - 2002 Cutting Systems, Inc.
United States
Production Manager
1996 - 1998 Cutting Systems, Inc.
United States
Engineer
1992 - 1996 Armenian Services LLC
Armenia
Founder/Owner
1990 - 1992 Laser Institute
Yerevan, Armenia
Project Manager
1988 - 1990 Laser Institute
Yerevan, Armenia
Engineer
1984 - 1988 Aviocomplex
Yerevan, Armenia
Engineer
Education:
1987 - 1988 Moscow
Moscow Humanitarian University
Master's Degree - International Relations
1979 - 1984 State Engineering University of Armenia (Polytechnic)
Master's Degree
Electronics
35
EXECUTIVE COMPENSATION
Our officers/directors have not received any compensation since our
inception. We do not anticipate paying compensation to officers/directors
until our Company can generate a profit on a regular basis.
Ashot Martirosyan, our president and director was issued 10,000,000
restricted common shares in June, 2009 for $10,000 cash. Anushavan
Yeranosyan, our Secretary, Treasurer and director was also issued 10,000,000
restricted common shares in June, 2009 for $10,000 cash. These founder's
shares were purchased by Ashot Martirosyan and Anushavan Yeranosyan, and were
not issued as compensation for services.
We do not have any employment agreements with our officers. We do not
maintain key-man life insurance for any our executive officers/directors. We
do not have any long-term compensation plans or stock option plans.
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.
Family Relationships
- --------------------
There are no arrangements or understandings pursuant to which a director or
executive officer was selected to be a director or executive officer. There
are no family relationships among our directors/officers.
Significant Employees
- ---------------------
We have no significant employees other than Officers/Directors.
36
Involvement in Certain Legal Proceedings
- ----------------------------------------
Our directors, executive officers and control persons have 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 director 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.
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 Moore & Associates, Chartered. 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. Anushavan Yeranosyan is the board's financial
expert member.
Potential Conflicts of Interest
- -------------------------------
We are not aware of any current or potential conflicts of interest with any
of our officers/directors.
37
Compensation of Directors
- -------------------------
We issue our directors 10,000 shares each, per year, as compensation for
serving on our Board of Directors. We issue the Chairman of the Board an
additional 10,000 shares annually.
Security Ownership of Certain Beneficial Owners and Management
The following table lists, as of June 30, 2009, 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 30,500,000 shares of our common
stock issued and outstanding. We do not have any outstanding options,
warrants or other securities exercisable for or convertible into shares of
our common stock.
Percent of
Amount of Class
Name and Address Beneficial Percentage after
Title of Class of Beneficial Owner Ownership of Class Offering
- ---------------- --------------------- -------------- -------- ---------
Common Stock Ashot Martirosyan(1) 10,000,000 32.7% 31.7%
Common Stock Anushavan Yeranosyan(2) 10,000,000 32.7% 31.7%
- -----------------------------------------------------------------------------
1) Ashot Martirosyan, 35595 Spatterdeock Lane, Solon, OH 44139
2) Anushavan Yeranosyan, 35595 Spatterdeock Lane, Solon, OH 44139
There are no current arrangements which will result in a change in control.
38
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Our officers and directors are also our primary shareholders. Together, our
officers and directors control 20,000,000 shares of our common stock, or 65%
of our outstanding common stock.
The company's Director has contributed office space for our use for all
periods presented. There is no charge to us for the space, and the director
will not seek compensation for the use of this space.
Through a Board Resolution, the Company hired the professional services of
Moore & Associates, Chartered, Certified Public Accountants, to perform
audited financials for the Company. Moore & Associates, Chartered own no
stock in the Company. The company has no formal contracts with its
accountants, they are paid on a fee for service basis.
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.
LEGAL MATTERS
The Law Offices of Thomas C. Cook has opined on the validity of the shares of
common stock being offered hereby.
39
EXPERTS
The financial statements included in this prospectus and in the registration
statement have been audited by Moore & Associates, Chartered, 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.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the U. S. Securities and Exchange Commission a
registration statement on Form S-1, together with all amendments and exhibits
thereto, under the Securities Act of 1933 with respect to the common stock
offered hereby. This prospectus does not contain all of the information set
forth in the registration statement and the exhibits and schedules
thereto. Statements contained in this prospectus as to the contents of any
contract or other document referred to are not necessarily complete and in
each instance reference is made to the copy of such contract or other
document filed as an exhibit to the registration statement, each such
statement being qualified in all respects by such reference.
Copies of all or any part of the registration statement may be inspected
without charge or obtained from the Public Reference Section of the
Commission at 100 F Street, NE, Washington, DC 20549. The registration
statement is also available through the Commission's web site at the
following address: http://www.sec.gov.
40
[BACK COVER PAGE OF PROSPECTUS]
[date]
PROSPECTUS
EnzymeBioSystems
Common Stock
11,500,000 Shares of
Common Stock
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
We will pay all expenses in connection with the registration and sale of the
common stock by the selling stockholder, who may be deemed to be an
underwriter in connection with their offering of shares. The estimated
expenses of issuance and distribution are set forth below:
Nature of Expenses:
Amount
------
U. S. Securities and Exchange Commission registration fee $ 6
Legal fees and miscellaneous expenses* $1,000
Audit Fees $2,500
Transfer Agent fees* $ 500
Printing* $ 294
------
Total $4,300
======
*Estimated Expenses
INDEMNIFICATION OF DIRECTORS AND OFFICERS
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) a willful failure to deal fairly with the company or its stockholders in
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.
II-1
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.
RECENT SALES OF UNREGISTERED SECURITIES
On June 26, 2009 (inception), we issued 30,500,000, par value $0.001
common shares of stock for cash to the nine founding shareholders, this
includes 10,000,000 shares to Ashot Martirosyan, who is our President, and
Director, and 10,000,000 shares to Anushavan Yeranosyan, who is our
Secretary, Treasurer, and Director. The other founding shareholders include:
Edgar Nalbandyan (1,500,000 shares), Lida Gevorgyan (1,500,000 shares),
Haikanush Yeranossian (1,500,000 shares), Frounz Yeranossian (1,500,000
shares), Anton Yeranossian (1,500,000 shares), (1,500,000 shares), Hasmik
Hayrapetyan (1,500,000 shares), and Karine Abrahamyan (1,500,000 shares).
The issuances were exempt from registration pursuant to Section 4(2) of the
Securities Act of 1933, and the investors were sophisticated investors,
familiar with our operations.
There have been no other issuance of shares since our inception on June
30, 2009. As of July 14, 2009, we have a total nine (9) 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
- -------------------------------------------------------------------------
3.1 Articles of Incorporation This filing
June 26, 2009 as currently
in effect
- -------------------------------------------------------------------------
3.2 Bylaws of the Registrant This filing
dated June 29,, 2009 as
currently in effect
- -------------------------------------------------------------------------
5.1 Opinion of Thomas C. Cook, Esq. This filing
regarding the legality of the
securities being registered
- -------------------------------------------------------------------------
23.1 Consent of Moore & Associates, This filing
Chartered for June 30, 2008
audit
- -------------------------------------------------------------------------
23.2 Consent of Thomas C. Cook, Esq. This filing
(included in Exhibit 5.1)
- -------------------------------------------------------------------------
99.1 Subscription Agreement This filing
- -------------------------------------------------------------------------
II-3
UNDERTAKINGS
A. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to our directors, officers and controlling
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 as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by us of
expenses incurred or paid by our director, officer or controlling person in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, we will, unless in the opinion of our counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be governed
by the final adjudication of such issue.
B. We hereby undertake:
(1) To file, during any period in which offers or 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) Reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information in the
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) any deviation from the low or 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) (Section 230.424(b)
of Regulation S-K) if, in the aggregate, the changes in volume and
price represent no more than a 20% 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) For determining liability under the Securities Act, treat each post-
effective amendment as a new registration statement of the securities offered,
and the offering of the securities at that time to be the initial bona fide
offering.
(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
II-4
SIGNATURES AND POWER OF ATTORNEY
Pursuant to 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 on Form S-1 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Solon, State of Ohio.
EnzymeBioSystems
Dated: July 16, 2009 /s/ Ashot Martirosyan
------------- ---------------------------------
By: Ashot Martirosyan
Its: President and Chairman of the
Board
Further, we, the undersigned officers and directors of EnzymeBioSystems (the
"Registrant") hereby severally constitute and appoint Ashot Martirosyan and
Anushavan Yeranosyan, and each of them singly, our true and lawful attorneys
with full power to them, and each of them singly, to sign for us and in our
names in the capacities as indicated, any and all amendments or supplements to
this Registration Statement on Form S-1 of the Registrant, and generally to do
all such things in connection therewith in our name and on our behalf in our
capacities as indicated to enable the Registrant to comply with the provisions
of the Securities Act of 1933, as amended, and all requirements of the
Securities and Exchange Commission, hereby ratifying and confirming our
signatures as they may be signed by our said attorneys or any of them, to any
and all amendments.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities indicated on July 14, 2009.
Dated: July 16, 2009 /s/ Ashot Martirosyan
------------- ---------------------------------
By: Ashot Martirosyan
Its: President and Chairman of the
Board
Dated: July 16, 2009 /s/ Anushavan Yeranosyan
------------- ---------------------------------
By: Anushavan Yeranosyan
Its: Secretary, Treasurer
and Director
II-5