AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 14, 2009
REGISTRATION NO. 333-162170
=============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
AMENDMENT NO. 2 TO
FORM S-1/A
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)
----------------------------
16773 W Park Drive
Chagrin Falls, Ohio, 44023
(440) 708-0012
----------------------------------------------------------------
(Address, Including Zip Code and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
Ashot Martirosyan
16773 W Park Drive
Chagrin Falls, Ohio, 44023
(440) 708-0012
--------------------------------------------------------
(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, LTD.
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: As soon as
practicable after this Registration Statement becomes effective.
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. |_|
If this Form is filed to register securities for an offering to be made
on a continuous or delayed basis pursuant to Rule 415 under the Securities
Act, please check the following box. [X]
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filed or a smaller
reporting company.
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(3) PRICE FEE(5)
Common stock
$0.001 par value 1,000,000 $0.01 $ 10,000(4) $ 0.56
Common stock, 10,500,000 (2) $0.01 $ 105,000 $ 5.86
$0.001 par value
---------------------------------------------------------
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. The Company will derive no financial benefit from the
sales of these shares. Our selling shareholders' shares will sell at
$0.01 per share until our shares are quoted on the OTC-BB and thereafter
at prevailing market prices or privately negotiated prices.
(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).
(4) The aggregate offering price includes offering expenses of $1,000, which
will result in net proceeds to the Company of $9,000. This offering has
no minimum and funds will be released to the Company upon verification
that the subscription agreement and funds are in good order
(5) Paid by registrant in conjunction with prior amendment to this filing.
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 SEE 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 March 31, 2010, 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. We will not receive any of the proceeds from the shares of
common stock sold by the selling shareholders.
Investing in the common stock involves risks. EnzymeBioSystems is a
developmental stage company focused on becoming a contract research
organization. to assist pharmaceutical and biotechnology companies in
developing drug compounds, biologics, and drug delivery services. 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. 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 the
sole purpose to ensure good funds are received. The purpose of the escrow
account is to ensure that the Subscription Agreement and funds are in proper
order. There is no minimum for this offering; therefore, funds will be released
from escrow upon receipt and we will promptly issue shares to investors even if
you are the sole purchaser in this offering.
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............................................................ 5
SELECTED FINANCIAL INFORMATION.......................................... 6
RISK FACTORS RELATING TO OUR FINANCIAL CONDITION........................ 7
COMPANY RISK FACTORS.................................................... 9
RISK FACTORS RELATING TO OUR COMMON STOCK AND THIS OFFERING.............16
FORWARD-LOOKING STATEMENTS..............................................20
USE OF PROCEEDS.........................................................21
DILUTION................................................................22
SELLING SECURITY HOLDERS................................................23
DETERMINATION OF THE OFFERING PRICE.....................................24
PLAN OF DISTRIBUTION....................................................24
EXPENSES OF ISSUANCE AND DISTRIBUTION...................................26
DESCRIPTION OF SECURITIES...............................................27
DIVIDEND POLICY.........................................................27
DESCRIPTION OF BUSINESS.................................................28
DESCRIPTION OF PROPERTY.................................................36
LEGAL PROCEEDINGS.......................................................36
FINANCIAL STATEMENTS....................................................37
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION...............38
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS............45
EXECUTIVE COMPENSATION..................................................48
SECURITY OWNERSHIP OF CERTAIN BENEFICAL OWNERS AND MANAGEMENT...........50
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..........................51
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES..........................52
LEGAL MATTERS...........................................................52
EXPERTS.................................................................52
WHERE YOU CAN FIND MORE INFORMATION.....................................53
Part II
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION...........................II-1
INDEMNIFICATION OF DIRECTORS AND OFFICERS.............................II-1
RECENT SALES OF UNREGISTERED SECURITIES...............................II-3
EXHIBITS..............................................................II-4
UNDERTAKINGS..........................................................II-5
SIGNATURES AND POWER OF ATTORNEY......................................II-7
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
Chargrin, Falls, 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 laboratory
equipment to build its laboratory.
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. Our enzyme technology will tie-in with development of new
commercial biological active compounds. We hope we can develop specialty
enzymes to eliminate the side effects and toxicity of the new commercial
developed products.
We view our enzyme development and manufacturing capabilities as:
1) Computer-based methods of predicting the affinity of an inhibitor or
activator for an enzyme, such as molecular docking. Docking is used to
predict the binding orientation of small molecule drug candidates to their
protein targets in order to in turn predict the affinity and activity of the
small molecule. This plays an important role in the rational design of
drugs; and, 2) Deployment of new catalytic systems immobilized on inorganic
nano-particles in our technologies.
3
We are 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.
We plan to protect and enhance our technology for the development of novel
enzymes by publishing our research in scientific trade publications and
patenting our technology. Once our laboratory is operational, we expect we
will be able to manufacturer specialty enzymes and develop engineering
processes on a small scale. This technology consists of computer-based
software design methods, such as molecular docking.
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, 2009, 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 16773 W Park Drive, Chagrin, Falls,
Ohio, 44023. The telephone is (440) 708-0012.
4
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):
No Minimum There is no minimum for this offering,
funds will be released to us from our
escrow agent after we ensure good
funds are received and we will
promptly issue shares to investors
even if you are the sole purchaser in
this offering.
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.
5
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
Quarter ended For fiscal year ended
September 30, June 30,
2009 2009
(Unaudited) (Audited)
------------- ---------------------
Working Capital $ 22,133 $ 28,000
Total Cash and equivalents $ 26,873 $ -
Funds held in escrow $ - $ 30,500
Total Liabilities $ 4,740 $ 2,500
Income Statement Data
From From
June 26, 2009 June 26, 2009
(Inception) (Inception)
to September 30, to June 30,
2009 2009
(Unaudited) (Audited)
--------------- --------------
Revenues $ 0 $ 0
Expenses $ 9,294 $ 3,000
Net income (loss) $ (9,294) $ (3,000)
As of September 30, 2009, we had $22,133 in working capital, and an
accumulated loss of $(9,294) since inception. The $9,294 expense represents
incorporation fees, accounting fees, and start-up costs in building a
laboratory.
6
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. The trading price of our common stock could decline due to any of
these risks, and you may lose all or part of your investment.
RISK FACTORS RELATING TO OUR FINANCIAL CONDITION
- ------------------------------------------------
1. WE HAVE NO OPERATING HISTORY AND LIMITED HISTORICAL FINANCIAL INFORMATION
UPON WHICH YOU MAY EVALUATE OUR PERFORMANCE.
We have no operating 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.
7
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 and the quarter ending September 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 and the quarter ending September 30, 2009.
Because the Company has been issued an opinion by its auditors that
substantial doubt exists as to whether the company can continue as a going
concern, it may be more difficult for the company to attract investors.
Since our auditor's have raised a substantial doubt about our ability to
continue as a going concern, this typically results greater difficulty to
obtain loans than businesses that do not have a qualified auditors opinion.
Additionally, any loans we might obtain may be on less advantageous terms.
Our future is dependent upon our ability to obtain financing and upon future
profitable operations from the sale of our future enzyme products. We plan
to seek additional funds through private placements of our common stock. You
may be investing in a company that will not have the funds necessary to
continue to deploy its business strategies. If we are not able to achieve
revenues or find financing, then we likely will be forced to cease operations
and investors will likely lose their entire investment, investors may lose
their entire investment.
3. WE MAY NOT BE ABLE TO ATTAIN PROFITABILITY WITHOUT ADDITIONAL FUNDING,
WHICH MAY BE UNAVAILABLE.
We have prepared audited financial statements for the year end for
June 30, 2009, and unaudited financial statement for the quarter ending
September 30, 2009 which show we have working capital of $28,000 and $22,133
respectfully. 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. Management believes, for the next twelve months, it has sufficient
funds available to implement its business, on a limited basis. This Offering
will allow management to purchase additional raw materials to produce
specialty enzymes. The less monies raised in the Offering will affect the
amount of raw materials the Company can purchase, which will result in fewer
specialty enzymes produced. If no monies are raised in this Offering, the
Company will still be able to produce a limited quantity of specialty enzymes.
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 will 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 future competitors could negatively impact our
business, results of operations and financial condition.
8
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. We currently do not have any
operations; however, if we are able to begin our operations management
expects 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.
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. We do not plan to hire any
additional employees until our cash flows can justify the expense. When we
are ready to hire new employees, we will most likely look for people who have
some type of chemistry experience or a working knowledge of chemical
engineering, which may be difficult to find.
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.
9
8. THE ENZYME COMPOUND INDUSTRY IS SUBJECT TO PRICING PRESSURES THAT MAY
CAUSE US TO REDUCE THE FUTURE GROSS MARGINS FOR OUR PRODUCTS.
If we are able to become operational management believes 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.
We are not currently operational. If we are able to become operational
management believes increased customer demands for markdown allowances,
incentives and other forms of economic support might 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.
Management wants investors to know that there are no assurances that we may
ever achieve acceptable operating margins, we may never obtain any share of
the market, or be able to establish any value for our enzyme products.
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 in place with
any suppliers at this time. 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.
10
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.
12. WE MAY PURSUE SPECIALTY ENZYME PRODUCTS THAT ULTIMATELY REQUIRE MORE
RESOURCES THAN WE ANTICIPATE OR WHICH MAY BE TECHNICALLY UNSUCCESSFUL.
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.
11
13. WE MAY NOT BE ABLE TO DEVELOP MANUFACTURING CAPACITY SUFFICIENT TO MEET
DEMAND IN AN ECONOMICAL MANNER OR AT ALL.
If demand for enzyme products increases beyond the scope of our future
production facilities, we may incur significant expenses in the expansion
and/or construction of production facilities and increases in personnel in
order to increase production capacity. Any unanticipated expansion
requirements may cause complications for delays in production, which could
result in a loss of business and customers. To finance the expansion of a
commercial-scale production facility is complex and expensive. We cannot
assure you that we will have the necessary funds to finance the development
of production facilities, or that we will be able to develop this
infrastructure in a timely or economical manner, or at all.
14. OUR OFFICERS HAVE NO EXPERIENCE IN OPERATING AN OPERATIONAL SPECIALTY
ENZYME COMPANY, AND HAVE NO EXPERIENCE IN EVALUATING THE SUCCESS OF
FUTURE PRODUCTS.
Our executive officers, who have chemical engineering education, have no
experience in operating a specialty enzyme Company. Their work history
includes working for an antibiotic laboratory, managing a medical supply
company and working as a production engineer. They have no experience
in independently developing, manufacturing, marketing, selling, and
distributing commercial specialty enzyme products. Due to their lack of
experience, our executive officers may make wrong decisions and choices
regarding selection of products to pursue on behalf of the Company.
Consequently, our Company may suffer irreparable harm due to management's
lack of experience in this industry. As a result we may have to suspend or
cease operations, which will result in the loss of your investment.
15. WE EXPECT THAT CERTAIN ENZYME DEVELOPMENT WILL REQUIRE US TO USE
HAZARDOUS MATERIALS IN OUR BUSINESS. ANY CLAIMS RELATING TO IMPROPER
HANDLING, STORAGE, OR DISPOSAL OF THESE MATERIALS COULD BE TIME
CONSUMING AND COSTLY AND COULD ADVERSELY AFFECT OUR BUSINESS AND RESULTS
OF OPERATIONS.
Our research and development processes may involve the controlled use of
hazardous materials, including chemical, and biological materials. We cannot
eliminate entirely the risk of accidental contamination or discharge and any
resultant injury from these materials. Federal, state, and local laws and
regulations govern the use, manufacture, storage, handling, and disposal of
these materials. We may be sued for any injury or contamination that results
from our use or the use by third parties of these materials, and our
liability may exceed our total assets. In addition, compliance with
applicable environmental laws and regulations may be expensive, and current
or future environmental regulations may impair our research, development, or
production efforts. We plan to purchase insurance to protect us from
potential losses; however, at this time, we do not have any insurance
coverage for accidental contamination, discharge or any resultant injury from
these hazardous materials.
12
16. 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 biomedical industry in the U.S., and we fully intend to comply therewith.
Biologically derived enzyme products are regulated in the United States
based on their application, by either the United States Food and Drug
Administration ("FDA"), or the Environmental Protection Agency ("EPA"), or,
in the case of plants and animals, the United States Department of
Agriculture ("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.
Under current FDA policy, our future products will most likely come within
the FDA's jurisdiction, may be subject to lengthy FDA reviews and unfavorable
FDA determinations if they raise safety questions which cannot be
satisfactorily answered, if results do not meet regulatory requirements or if
they are deemed to be food additives whose safety cannot be demonstrated. An
unfavorable FDA ruling could be difficult to resolve and could prevent a
product from being commercialized. Even after investing significant time and
expenditures, we may not obtain regulatory approval for any drug products
that incorporate our technologies or inventions.
The EPA regulates biologically derived chemical substances not within the
FDA's jurisdiction. An unfavorable EPA ruling could delay commercialization
or require modification of the production process resulting in higher
manufacturing costs, thereby making the product uneconomical. In addition,
the USDA may prohibit genetically engineered plants from being grown and
transported except under an exemption, or under controls so burdensome that
commercialization becomes impracticable. Our future products may not be
exempted by the USDA.
Further, 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.
17. 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. We will need to meet a significant number of environmental and
other regulations and standards established by various federal, state and
local regulatory agencies.
13
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. As these regulations and standards
evolve, and if new regulations or standards are implemented, we may be
required to modify our proposed facilities and processes or develop and
support new facilities or processes and this will increase our costs. Any
failure to comply, or delays in compliance, with the various existing and
evolving industry regulations and standards could prevent or delay our
production of specialty enzyme products. Any inability to address these
requirements and any regulatory changes could have a material adverse effect
on our specialty enzyme business, financial condition and operating results.
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.
18. 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.
As a result, our two officers will have the ability to control
substantially all matters submitted to our stockholders for approval
including:
a) election of our board of directors;
b) removal of any of our directors;
c) amendment of our Articles of Incorporation or bylaws; and
d) adoption of measures that could delay or prevent a change in control or
impede a merger, takeover or other business combination involving us.
As a result of their ownership and positions, these two individuals have
the ability to influence all matters requiring shareholder approval,
including the election of directors and approval of significant corporate
transactions. In addition, the future prospect of sales of significant
amounts of shares held by our director and executive officer could affect the
market price of our common stock if the marketplace does not orderly adjust
to the increase in shares in the market and the value of your investment in
the company may decrease. Management's stock ownership may discourage a
potential acquirer from making a tender offer or otherwise attempting to
obtain control of us, which in turn could reduce our stock price or prevent
our stockholders from realizing a premium over our stock price.
14
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.
19. 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.
20. 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.
Anushavan Yeranosyan is a part-time financial advisor of A & A Medical
Supply, LLC. A & A Medical Supply distributes medical supplies to the health
care industry. 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/Treasurer plans
to devote 20 hours per week of his time to our business. Anushavan
Yeranosyan's other activities may 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. We do not have any employment agreements with any of your
officers, which means they are not obligated to continue to work for the
Company and can resign their positions whenever they are inclined to do so.
15
RISK FACTORS RELATING TO OUR COMMON STOCK AND THIS OFFERING
- -----------------------------------------------------------
21. INVESTORS CANNOT WITHDRAW FUNDS ONCE INVESTED AND WILL NOT RECEIVE
A REFUND.
Investors do not have the right to withdraw invested funds. Subscription
payments will be released from the escrow account to EnzymeBioSystems if the
Subscription Agreements are in good order and the investor is accepted as an
investor by the Company. Therefore, once an investment is made, investors
will not have the use or right to return of such funds during the Offering
period, which may last as long as March 31, 2010, the proposed close date
of this Offering.
22. FUTURE SALES OF SHARES BY EXISTING CONTROLLING STOCKHOLDERS COULD CAUSE
OUR STOCK PRICE TO DECLINE, FURTHER, CERTAIN SHARES OF OUR COMMON STOCK
ARE RESTRICTED FROM IMMEDIATE RESALE..
If our existing controlling stockholders sell, or indicate an intention to
sell, substantial amounts of our common stock in the public market, the
trading price of our common stock could decline. As of September 30, 2009,
we have 30,500,000 common shares issued and outstanding and upon successful
completion of this Offering, we will have outstanding a total of 31,500,000
shares of common stock. Once we register the 10,500,000 shares in this
Offering, these 10,500,000 shares will be freely tradable, without
restriction, in the public market immediately after the offering. Our
officers own 20,000,000 common shares. If in the future, they decide to sell
their shares or if it is perceived that they will be sold, to the extent
permitted by the Rules 144 and 701 under the Securities Act, the trading
price of our common stock could decline.
After the effectiveness of our Registration Statement, the 20,000,000
shares of common stock, owned by our two officers 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.
16
23. 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 future earnings to finance the operation and
expansion of its business and do not anticipate paying any cash dividends in
the foreseeable future. As a result, stockholders will need to sell shares
of common stock in order to realize a return on their investment, if any.
You should not rely on an investment in our company if you require dividend
income. The only possibility of any income to investors would come from any
rise in the market price of your stock, which is uncertain and unpredictable.
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.
24. 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.
25. THE PRICE OF OUR COMMON STOCK OFFERED IN THE OFFERING HAS BEEN
ARBITRARILY ESTABLISHED BY OUR MANAGEMENT.
The offering price has been arbitrarily determined by our management and
bears no relationship to assets, earnings, or any other valuation criteria.
No assurance can be given that the shares offered hereby will have a market
value or that they may be sold at this, or at any price. This is especially
the case if an investment in our company results in a stock price as
determined by the market less than our initial offering. In that case,
shares in our company could be purchased in the open market below our initial
offering price. This would result in a loss of money for any investors in
this Offering.
17
26. 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. Management
intends to solicit friends and acquaintances to purchase stock in this
Offering. Management believes there are a very limited number of purchasers
of our common stock. Further, any purchasers of our common stock will not
have any liquidity to sell their stock in our Company.
27. 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 Nevada 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 U. S. Securities and Exchange Commission that such indemnification is
against public policy, as expressed in the Act, and is therefore,
unenforceable.
28. 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.
18
As of June 30, 2009 management assessed the effectiveness of our internal
control over financial reporting based on the criteria for effective internal
control over financial reporting. The matters involving internal controls
and procedures that our management considered to be material weaknesses under
the standards of the Public Company Accounting Oversight Board were: (1) lack
of a functioning audit committee due to a lack of a majority of independent
members and a lack of a majority of outside directors on our board of
directors, resulting in ineffective oversight in the establishment and
monitoring of required internal controls and procedures; and (2) inadequate
segregation of duties consistent with control objectives.
In addition, in connection with our on-going assessment of the
effectiveness of our internal control over financial reporting, we may
discover "material weaknesses" in our internal controls as defined in
standards established by the Public Company Accounting Oversight Board, or
the PCAOB. A material weakness is a significant deficiency, or combination of
significant deficiencies, that results in more than a remote likelihood that
a material misstatement of the annual or interim financial statements will
not be prevented or detected.
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.
29. 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.
19
30. 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.
20
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
21
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 September 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 September 30, 2009 we had a net tangible book value of $22,133 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
$31,133 or $0.0010 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 $0.0090 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 September 30, 2009 $0.0007
Net tangible book value after
this Offering $0.0010
Increase per share attributable
to new stockholders $0.0003
Dilution $0.0090
Dilution as percentage of
purchase price 90.12%
22
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% 0 0%
Lida Gevorgyan 1,500,000 1,500,000 4.9% 0 0%
Haikanush Yeranossian 1,500,000 1,500,000 4.9% 0 0%
Frounz Yeranossian 1,500,000 1,500,000 4.9% 0 0%
Anton Yeranossian 1,500,000 1,500,000 4.9% 0 0%
Hasmik Hayrapetyan 1,500,000 1,500,000 4.9% 0 0%
Karine Abrahamyan 1,500,000 1,500,000 4.9% 0 0%
- -------------------------------------------------------------------------------
Totals 10,500,000 10,500,000 34.3% 0 0%
(1) Based on 30,500,000 shares of common stock issued and outstanding as of
September 30, 2009.
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.
23
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 but no later than March 31, 2010, unless we terminate it earlier. Upon
expiration the March 31, 2010 expiration date, management does not intend to
extend the offering.
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.
We have established an escrow account with our corporate attorney for
funds received by us from prospective investors. The purpose of the escrow
account is to ensure we receive good funds before we accept the Subscription
Agreement. There is no minimum for this offering. Therefore, after the
funds are received and the subscription accepted, shares will be promptly
issued by us to investors even if you are the sole purchaser in this
offering. Investors do not have the right to withdraw invested funds.
Subscription payments will be released from the escrow account to us if the
Subscription Agreements and funds are in good order. Therefore, once an
investment is made, investors will not have the use or right to return of
such funds during the Offering period,
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 March 31, 2010. Upon expiration the
March 31, 2010 expiration date, management does not intend to extend the
offering. Certificates for shares purchased will be issued and distributed
promptly after any shares are sold, the subscription is accepted and "good
funds" are received in our escrow account.
24
The proceeds from the sale of the shares in this offering will be payable
to Thomas C. Cook Client Trust Account fbo EnzymeBioSystems.
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,
based on whether good funds are received or if we receive subscriptions for
more than our 1,000,000 share Offering. 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 further represent:
o Our officers and directors are not broker, dealers or associated
persons of brokers or dealers within the preceding 12 months; and
o Our officers and directors have not do not participated in the selling
offerings of securities for any issuer more than once every 12 months
other than in reliance on Rule 3a4-1(a)4(1) or (a)4(iii).
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:
25
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* $ 700
Printing* $ 300
------
Total $4,506
======
*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.
26
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.
27
DESCRIPTION OF BUSINESS
Company History
- ---------------
We were formed on June 26, 2009 as EnzymeBioSystems, a Nevada corporation.
We are a startup company that plans to manufacture specialty enzymes.
Activities to date have been limited primarily to organization, initial
capitalization, establishing administrative offices in Chagrin Falls, 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 are a start-up company focused on becoming a manufacturing
organization, concentrating 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.
Enzymes can be categorized as "enzyme inhibitors" and "enzyme activators."
Enzyme inhibitors are molecules that bind to enzymes and decrease their
activity. Since blocking an enzyme's activity can kill a pathogen or correct
a metabolic imbalance, many drugs are enzyme inhibitors. Enzyme activators
are molecules that bind to enzymes and increase their activity. These
molecules are often involved in the allosteric [defined as having to do with
a protein with a structure that is altered reversibly by a small molecule so
that its original function is modified] regulation of enzymes in the control
of metabolism. Both enzyme inhibitors and enzyme activators are currently
used by many pharmaceutical and biotechnology companies in research and
development of new drug compounds.
Enzymes also can be used as pharmaceutical products. Enzymes as
pharmaceuticals have two important features that distinguish them from all
other types of pharmaceutical products. First, enzymes often bind and act on
their targets with great affinity and specificity. Second, enzymes are
catalytic and convert multiple target molecules to the desired products.
These two features make are considered specialized enzymes that can
accomplish therapeutic biochemistry in the body that small molecules cannot.
These characteristics have resulted in the development of many enzyme drugs
for a wide range of disorders, e.g. insulin and interferon.
Each enzyme catalyzes a specific chemical reaction. Essentially, each
enzyme breaks down or synthesizes one particular compound, or can even be
limited to specific bonds in the compound they react in.
The nerves have specialized or specialty enzymes to ensure that the
signals are conducted. The eye has specialized enzymes that allow us to see
colors. Other specialized enzymes break down fats and carbohydrates through
a similar process, these enzymes help nutrients to be absorbed and used in
the body.
28
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.
Our enzyme technology will tie-in with development of new commercial
biological active compounds. We hope we can develop specialty enzymes to
eliminate the side effects and toxicity of the new commercial developed
products.
We plan to deploy our enzyme technologies across diverse markets that
represent commercial opportunities in helping us build visibility for
EnzymeBioSystems. This includes building our reputation in the scientific
community through trade publications and protecting our intellectual property
and technology through the patent process.
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 enzyme development and manufacturing capabilities while minimizing
commercial risk in that research or pharmaceutical companies might change
their needs during our development processes. We view our enzyme development
and manufacturing capabilities as: 1) Computer-based methods of predicting
the affinity of an inhibitor or activator for an enzyme, such as molecular
docking. Docking is used to predict the binding orientation of small
molecule drug candidates to their protein targets in order to in turn predict
the affinity and activity of the small molecule. This plays an important
role in the rational design of drugs; and, 2) Deployment of new catalytic
systems immobilized on inorganic nano-particles in our technologies.
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.
29
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. Further, we do not have any agreements or
understandings with any university research center or corporation. 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 for the development of novel
enzymes by publishing our research in scientific trade publications and
patenting our technology. Once our laboratory is operational, we expect we
will be able to manufacturer specialty enzymes and develop engineering
processes on a small scale. This technology consists of computer-based
software design methods, such as molecular docking. We are in the process of
advancing our computer models to help us predict the affinity of an inhibitor
or activator for an enzyme. We believe our capabilities will 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.
30
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.
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. 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.
31
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.
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.
32
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.
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
- -------------------------------------------
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.
Non-drug biologically derived products, such as the specialty enzymes we
plan to produce are regulated in the United States based on their
application, by either the United States Food and Drug Administration,
("FDA"), the Environmental Protection Agency, ("EPA") in the case of plants
and animals, the United States Department of Agriculture ("USDA"). In
addition to regulating drugs, the FDA also regulates food and food additives,
feed and feed additives, and 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.
33
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. At this time, we do not
anticipate producing any enzymes that would require FDA approval. Our
processes would include combining enzymes that have already been approved the
FDA.
Even after investing significant time and expenditures, we may not obtain
regulatory approval for our enzyme products that incorporate technologies that
have not been approved for commercialization in the United States or
elsewhere. For example, the EPA regulates biologically derived chemical
substances not within the FDA's jurisdiction. An unfavorable EPA ruling could
delay commercialization or require modification of the production process
resulting in higher manufacturing costs, thereby making the product
uneconomical. In addition, the USDA may prohibit genetically engineered
plants from being grown and transported except under an exemption, or under
controls so burdensome that commercialization becomes impracticable. Our
future products may not be exempted by the USDA. In addition, new laws, new
interpretations of existing laws, increased governmental enforcement of
environmental laws, or other developments could require us to make additional
significant expenditures.
We will be 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 health and safety
issues.
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.
34
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.
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/Treasurer, 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.
35
DESCRIPTION OF PROPERTY
Our executive offices are located in Ohio, at 16773 W. Park Drive, Chagrin
Falls, Ohio 44023, telephone: (440) 708-0012. 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. Additionally,
the Company leased a facility of approximately 1,000 square feet to build its
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.
36
FINANCIAL STATEMENTS
EnzymeBioSystems
(A DEVELOPMENT STAGE COMPANY)
INDEX TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
EnzymeBioSystems
June 30, 2009
September 30, 2009
PAGE
----
Year end June 30, 2009 Financials (audited):
Independent Auditors' Report F-1a
Balance Sheet F-2a
Statements of Operations F-3a
Statements of Changes in Stockholders' Equity F-4a
Statements of Cash Flows F-5a
Notes to Financials F-6a-14a
Quarter end September 30, 2009 Financials (unaudited):
Balance Sheet F-1b
Statements of Operations F-2b
Statements of Cash Flows F-3b
Notes to Financials F-4b-5b
37
SEALE AND BEERS, CPAs
PCAOB & CPAB REGISTERED AUDITORS
- --------------------------------
www.sealebeers.com
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 conduct 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 (deficit) 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 an accumulated deficit of $3,000, 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/ Seale and Beers, CPAs
- -------------------------
Seale and Beers, CPAs
Las Vegas, Nevada
September 25, 2009
6490 West Desert Inn Rd., Las Vegas, NV 89146
(702) 253-7492 Fax (702) 253-7501
F-1a
EnzymeBioSystems
(A Development Stage Company)
Balance Sheet
Balance Sheet
June 30,
2009
------------
ASSETS
Current Assets:
Funds held in escrow $ 30,500
-----------
Total current assets 30,500
------------
TOTAL ASSETS $ 30,500
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accrued expenses $ 2,500
------------
Total current liabilities 2,500
------------
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 (3,000)
------------
Total stockholders' equity 28,000
------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 30,500
============
The accompanying notes are an integral part of these financial statements.
F-2a
EnzymeBioSystems
(A Development Stage Company)
Statement of Operations
Statement of Operations
For the period
from
June 26, 2009
(Inception) to
June 30, 2009
--------------
REVENUE $ -
--------------
EXPENSES:
Incorporating fees $ 500
Auditing fees 2,500
--------------
Total expenses 3,000
--------------
Net (loss) before income taxes $ (3,000)
Provision for income tax -
--------------
NET (LOSS) $ (3,000)
==============
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-3a
EnzymeBioSystems
(A Development Stage Company)
Statement of Stockholders' Equity
Statement of Stockholders' Equity
Deficit
Preferred Accumulated
Stock Common Stock Additional During
------------- ------------------- Paid-in Development
Shares Amt Shares Amt Capital Stage Total
------- ----- ---------- ------- --------- ----------- ----------
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
period
ending
June 30,
2009 (3,000) (3,000)
------- ----- ---------- ------- --------- ----------- ----------
Balance,
June 30,
2009 - $ - 30,500,000 $30,500 $ 500 $ (3,000) $ 28,000
======= ===== ========== ======= ========= =========== ==========
The accompanying notes are an integral part of these financial statements.
F-4a
EnzymeBioSystems
(A Development Stage Company)
Statement of Cash Flows
Statement of Cash Flows
For the period
from
June 26, 2009
(Inception) to
June 30, 2009
--------------
OPERATING ACTIVITIES:
Net (loss) $ (3,000)
Adjustments to reconcile net loss to net cash
used by operating activities:
Increase in accrued liabilities 2,500
--------------
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 AND EQUIVALENTS - BEGINNING OF PERIOD -
--------------
CASH AND EQUIVALENTS - 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-5a
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 an accrued liability of $2,500 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 period ended
June 30, 2009
------------------
Net income (loss) (numerator) $ (3,000)
==================
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-6a
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 $(3,000) 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-7a
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-8a
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 $ 3,000
Less: Book -
depreciation
Add: Tax -
depreciation
--------
Net loss $ 3,000
Effective 34%
tax rate
--------
Tax benefit $ 1,020
Valuation $(1,020)
allowance
--------
$ -
--------
During the year ended June 30, 2009, the Company recorded a valuation
allowance of $3,000 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-9a
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-10a
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-11a
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-12a
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-13a
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-14a
EnzymeBioSystems
(A Development Stage Company)
Condensed Balance Sheets
September 30,
2009 June 30,
(Unaudited) 2009
------------ ------------
ASSETS
Current Assets:
Cash and equivalents $ 26,873 $ -
Funds held in escrow - 30,500
------------ ------------
Total current assets 26,873 30,500
Fixed Assets:
Furniture and equipment 2,073 -
------------ ------------
Total fixed assets 2,073 -
------------ ------------
TOTAL ASSETS $ 28,946 $ 30,500
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accrued expenses $ - $ 2,500
Credit card payable 4,740 -
------------ ------------
Total current liabilities 4,740 2,500
------------ ------------
Stockholders' equity:
Preferred stock, $0.001 par value, 5,000,000
shares authorized, none issued and
outstanding as of 9/30/09 and 6/30/09 - -
Common stock, $0.001 par value, 195,000,000
shares authorized, 30,500,000, 30,500,000
shares issued and outstanding as of
9/30/09 and 6/30/09, respectively 30,500 30,500
Additional Paid-in Capital 3,000 500
(Deficit) accumulated during
development stage (9,294) (3,000)
------------ ------------
Total stockholders' equity 24,206 28,000
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 28,946 $ 30,500
============ ============
The accompanying notes are an integral part of these financial statements.
F-1b
EnzymeBioSystems
(A Development Stage Company)
Condensed Statements of Operations
For the period
For the from
three June 26, 2009
months ended (Inception) to
Sept. 30, 2009 Sept. 30, 2009
-------------- --------------
REVENUE $ - $ -
EXPENSES
Auditing fees - 2,500
General & Administrative 1,753 1,753
Incorporating fees - 500
Research & Development 4,541 4,541
-------------- --------------
Total expenses 6,294 9,294
-------------- --------------
Net (loss) before income taxes (6,294) (9,294)
Provision for income tax - -
-------------- --------------
NET (LOSS) $ (6,294) $ (9,294)
============== ==============
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-2b
EnzymeBioSystems
(A Development Stage Company)
Condensed Statements of Cash Flows
For the period
For the from
three June 26, 2009
months ended (Inception) to
Sept. 30, 2009 Sept. 30, 2009
-------------- --------------
OPERATING ACTIVITIES
Net (loss) $ (6,294) $ (9,294)
Adjustments to reconcile net loss to
net cash used by operating activities:
Increase in credit cards payable 4,740 4,740
(Decrease) in accrued liabilities (2,500) -
-------------- --------------
Cash (used) by operating activities (4,054) (4,554)
INVESTING ACTIVITIES
Purchase of furniture and equipment (2,073) (2,073)
-------------- --------------
Cash (used) by investing activities (2,073) (2,073)
FINANCING ACTIVITIES
Sale of common stock - 30,500
Contributed capital 2,500 3,000
-------------- --------------
Cash provided by financing activities 2,500 33,500
-------------- --------------
NET CHANGE IN CASH (3,627) 26,873
CASH AND EQUIVALENTS - BEGINNING OF PERIOD 30,500 -
-------------- --------------
CASH AND EQUIVALENTS - END OF PERIOD $ 26,873 $ 26,873
============== ==============
SUPPLEMENTAL DISCLOSURES:
Interest paid $ - $ -
Income taxes paid $ - $ -
Non-cash transactions $ - $ -
The accompanying notes are an integral part of these financial statements.
F-3b
EnzymeBioSystems
(A Development Stage Company)
Condensed Notes
September 30, 2009
(Unaudited)
Note 1 - Basis of Presentation
In the opinion of management, the accompanying balance sheets and related
interim statements of income, cash flows, and stockholders' equity include
all adjustments, consisting only of normal recurring items, necessary for
their fair presentation in conformity with accounting principles generally
accepted in the United States of America ("U.S. GAAP"). Preparing financial
statements requires management to make estimates and assumptions that affect
the reported amounts of assets, liabilities, revenue, and expenses. Actual
results and outcomes may differ from management's estimates and assumptions.
Interim results are not necessarily indicative of results for a full year.
The information included in this Form 10-Q should be read in conjunction
with information included in the Form 10-K.
Note 2 - Going concern
These financial statements have been prepared in accordance with
generally accepted accounting principles applicable to a going concern which
contemplates the realization of assets and the satisfaction of liabilities
and commitments in the normal course of business. As at September 30, 2009,
the Company has not recognized revenue to date and has accumulated operating
losses of approximately $9,294 since inception. The Company's ability to
continue as a going concern is contingent upon the successful completion of
additional financing arrangements and its ability to achieve and maintain
profitable operations. While the Company is expending its best efforts to
achieve the above plans, there is no assurance that any such activity will
generate funds that will be available for operations.
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 3 - Related party transactions
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.
F-4b
EnzymeBioSystems
(A Development Stage Company)
Condensed Notes
September 30, 2009
(Unaudited)
Note 4 - Recent Pronouncements
In June 2009, the FASB issued SFAS No. 166, "Accounting for Transfers of
Financial Assets-an amendment of FASB Statement No. 140" ("SFAS 166"). The
provisions of SFAS 166, in part, amend the derecognition guidance in FASB
Statement No. 140, eliminate the exemption from consolidation for qualifying
special-purpose entities and require additional disclosures. SFAS 166 is
effective for financial asset transfers occurring after the beginning of an
entity's first fiscal year that begins after November 15, 2009. The Company
does not expect the provisions of SFAS 166 to have a material effect on the
financial position, results of operations or cash flows of the Company.
In June 2009, the FASB issued SFAS No. 167, "Amendments to FASB
Interpretation No. 46(R) ("SFAS 167"). SFAS 167 amends the consolidation
guidance applicable to variable interest entities. The provisions of SFAS 167
significantly affect the overall consolidation analysis under FASB
Interpretation No. 46(R). SFAS 167 is effective as of the beginning of the
first fiscal year that begins after November 15, 2009. SFAS 167 will be
effective for the Company beginning in 2010. The Company does not expect the
provisions of SFAS 167 to have a material effect on the financial position,
results of operations or cash flows of the Company.
In June 2009, the FASB issued SFAS No. 168, "The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles -
a replacement of FASB Statement No. 162" ("SFAS No. 168"). Under SFAS No. 168
the "FASB Accounting Standards Codification" ("Codification") will become the
source of authoritative U. S. GAAP to be applied by nongovernmental entities.
Rules and interpretive releases of the Securities and Exchange Commission
("SEC") under authority of federal securities laws are also sources of
authoritative GAAP for SEC registrants. SFAS No. 168 is effective for
financial statements issued for interim and annual periods ending after
September 15, 2009. On the effective date, the Codification will supersede
all then-existing non-SEC accounting and reporting standards. All other
non-grandfathered non-SEC accounting literature not included in the
Codification will become non-authoritative. SFAS No. 168 is effective for
the Company's interim quarterly period beginning July 1, 2009. The Company
does not expect the adoption of SFAS No. 168 to have an impact on the
financial statements.
F-5b
EnzymeBioSystems
(A Development Stage Company)
Condensed Notes
September 30, 2009
(Unaudited)
Note 4 - Recent Pronouncements (Continued)
In June 2009, the Securities and Exchange Commission's Office of the Chief
Accountant and Division of Corporation Finance announced the release of Staff
Accounting Bulletin (SAB) No. 112. This staff accounting bulletin amends or
rescinds portions of the interpretive guidance included in the Staff
Accounting Bulletin Series in order to make the relevant interpretive
guidance consistent with current authoritative accounting and auditing
guidance and Securities and Exchange Commission rules and regulations.
Specifically, the staff is updating the Series in order to bring existing
guidance into conformity with recent pronouncements by the Financial
Accounting Standards Board, namely, Statement of Financial Accounting
Standards No. 141 (revised 2007), Business Combinations, and Statement of
Financial Accounting Standards No. 160, Non-controlling Interests in
Consolidated Financial Statements. The statements in staff accounting
bulletins are not rules or interpretations of the Commission, nor are they
published as bearing the Commission's official approval. They represent
interpretations and practices followed by the Division of Corporation Finance
and the Office of the Chief Accountant in administering the disclosure
requirements of the Federal securities laws.
F-6b
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 a start-up company focused on becoming a manufacturing organization,
concentrating 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.
38
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. As of September 30, 2009 we have
working capital of $22,133 for our operations. 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 and our unaudited financial statements for the
quarter ending September 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 plans to manufacture specialty
enzymes. Activities to date have been limited primarily to organization,
initial capitalization, establishing administrative offices and commencing
our initial operational plans. Our initial operational plans consist of
obtaining materials to build our research and manufacture laboratory.
We a start-up company focused on becoming a manufacturing organization,
concentrating 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.
39
We are 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.
40
Business Plan Timeline
- ----------------------
The following is an outline of the proposed milestones for our business plan:
Anticipated
Manner time needed to
Milestone of achievement complete milestone
---------------------------------------------------------------------------
1. Business started Business plan developed Already completed
Cost: Management work
product, no funds used
2. Initial funding Raised $30,500 from founders Already completed
3. Lease lab space Find suitable location to Already completed
build laboratory
Cost: $700 deposit,
$700 per month
4. Laboratory built Lab equipment acquired Already completed
(with funds from founders)
Cost: $10,000
5. Company becomes Files Registration In process
non-deficient with SEC and completes
fully reporting comments
Cost: $3,000
6. Additional Funding used to purchase Three months after
funding additional raw materials Registration
(<$10,000) (If no funds raised, becomes effective
remaining founder's funds
used to purchase raw
materials.)
Cost: $5,000 for raw
materials
7. Research Research papers submitted Currently being
published to scientific journals reviewed, publication
(No additional funding needed) pending
Cost: Management work
product, no funds used
8. Manufacture Manufacture laboratory November, 2009
Sample Batch sample batch of enzymes
Cost: $3,000
9. Client base Specialty enzyme samples December, 2009
established sent to perspective
clients
Cost: If offering falls short
founders will make up the difference.
41
The above timeline does not take into account possible delays that may
arise. If we experience any difficulties or delays during our plan of
operation, it could take substantially longer to complete the final
production of our specialty enzymes. Additional funding is not a
prerequisite in producing specialty enzymes.
We view our enzyme development and manufacturing capabilities as: 1)
Computer-based methods of predicting the affinity of an inhibitor or
activator for an enzyme, such as molecular docking. Docking is used to
predict the binding orientation of small molecule drug candidates to their
protein targets in order to in turn predict the affinity and activity of the
small molecule. This plays an important role in the rational design of
drugs; and, 2) Deployment of new catalytic systems immobilized on inorganic
nano-particles in our technologies.
We plan to protect and enhance our technology for the development of novel
enzymes by publishing our research in scientific trade publications and
patenting our technology. Once our laboratory is operational, we expect we
will be able to manufacturer specialty enzymes and develop engineering
processes on a small scale. This technology consists of computer-based
software design methods, such as molecular docking.
Results of Operations
- ---------------------
From Inception on June 26, 2009, through September 30, 2009
- -----------------------------------------------------------
During the period from inception on June 26, 2009 to September 30, 2009,
we have generated no revenues. Our net loss since inception through
September 30, 2009 is $(9,294). Our net loss for the Quarter ending
September 30, 2009 was $(6,294). This net loss includes general and
administrative expenses of $1,753 and research and development costs
of $4,541.
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.
42
Liquidity and Capital Resources
- -------------------------------
As of September 30, 2009, our total current assets were $26,873. As of
September 30, 2009, our total liabilities were $4,740 in credit cards
payable. 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 by our founders.
During the period from inception to September 30, 2009, proceeds were
received from the sale of common stock of $30,500. In addition, our Director
contributed $500 to pay for incorporation to the Nevada Secretary of State.
Our Director will not seek reimbursement for this contributed capital.
Cash Requirements
- -----------------
We intend to use the funds raised by the 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.
Sources and Uses of Cash
- ------------------------
We did not receive any cash from operations for the year ended June 30,
2009 or through the quarter end September 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. As
stated in our Plan of Operation, 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.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
(a) Dismissal of Moore & Associates, Chartered
On August 27, 2009, the Public Company Accounting Oversight Board ("PCAOB")
revoked the registration of Moore and Associates, Chartered because of
violations of PCAOB rules and auditing standards in auditing the financial
statements, PCAOB rules and quality controls standards, and Section 10(b) of
the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and
noncooperation with a Board investigation.
43
On August 24, 2009, the Board of Directors of EnzymeBioSystems voted to
terminate its relationship with Moore & Associates, Chartered, as its
independent registered public accounting firm.
The audit report of Moore & Associates, Chartered on the audited
financial statements of the Registrant for the period from inception on
June 26, 2009 to the fiscal year ended June 30, 2009, did not contain any
adverse opinion or disclaimer of opinion, nor were they qualified or
modified as to uncertainty, audit scope or accounting principles, except a
going concern qualification in its July 7, 2009 Audit Report of the
Registrant's financial statements for the fiscal year ended June 30, 2009,
as contained in its Form S-1 Registration Statement.
During the Registrant's most recent fiscal year and through August 24, 2009,
there were no disagreements (as defined in Item 304 of Regulation S-K)
with Moore & Associates, Chartered on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure,
which disagreements, if not resolved to the satisfaction of Moore &
Associates, Chartered, would have caused it to make reference in connection
with its opinion to the subject matter of the disagreement. Further, during
the Registrant's most recent fiscal year and through the Dismissal Date,
there were no reportable events (as defined in Item 304(a)(1)(v) of
Regulation S-K).
(b) Engagement of Seale and Beers, CPAs
On August 24, 2009, the Registrant's Board of Directors approved the
appointment of Seale and Beers, CPAs as the Registrant's independent
registered public accounting firm. During the Registrant's most recent
fiscal year and through August 24, 2009, neither the Registrant nor anyone
on its behalf consulted the Current Accountants regarding either (1) the
application of accounting principles to a specified transaction regarding
the Company, either completed or proposed, or the type of audit opinion that
might be rendered on the Company's financial statements; or (2) any matter
regarding the Company that was either the subject of a disagreement (as
defined in Item 304(a)(1)(iv) of Regulation S-K and related instructions to
Item 304 of Regulation S-K) or a reportable event (as defined in Item
304(a)(1)(v) of Regulation S-K).
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.
Raw Material 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.
44
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
45
Ashot Martirosyan - Background
- -------------------------------
Mr. Martirosyan was the head of the "Anti-Biotics and Enzyme Inhibitors
Laboratory" of "Institute of Organic Chemistry" in Yerevan, Armenia until
November 2008. He moved to USA November 2008 and started preparing his
research results and scientific materials for publications.
Mar. 2009 -
Present Developing business plan, to incorporate and begin operations
Of EnzymeBioSystems.
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
Republic of Armenia
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
46
Anushavan Yeranosyan - Background
- ---------------------------------
2002 - 2009 Cutting Systems, Inc.
Cleveland, Ohio
United States
Director of Engineering
2005 - 2009 A & A Medical Supply
A distributor of health care supplies
Euclid, Ohio
Financial advisor
1998 - 2002 Cutting Systems, Inc.
Cleveland, Ohio
United States
Production Manager
1996 - 1998 Cutting Systems, Inc.
Cleveland, Ohio
United States
Engineer
1992 - 1996 Armenian Services LLC
Yerevan, 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
47
EXECUTIVE COMPENSATION
As a result of our the Company's current limited available cash, no
officer or director received compensation since June 26, 2009 (inception) of
the company through June 30, 2009. We intend to pay salaries when cash flow
permits.
Summary Compensation Table
- --------------------------
All
Fiscal Other
Year Compen-
ending Salary Bonus Awards sation Total
Name and Principal Position June 30 ($) ($) ($) ($) ($)
- -----------------------------------------------------------------------------
Ashot Martirosyan Pres/Dir. 2009 -0- -0- -0- -0- -0-
Anushavan Yeranosyan Tres/Dir 2009 -0- -0- -0- -0- -0-
Ashot Martirosyan, our president and director purchased 10,000,000
restricted common shares in June, 2009 for $10,000 cash. Anushavan
Yeranosyan, our Secretary, Treasurer and director also purchased 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.
48
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.
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.
49
Auditors; Code of Ethics; Financial Expert
- ------------------------------------------
Our principal independent accountant is the firm of Seale and Beers, CPAs.
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.
Compensation of Directors
- -------------------------
We did not pay our directors any compensation during fiscal year ending
June 30, 2009, nor through the quarter ending September 30, 2009.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table lists, as of September 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.
50
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, 16773 W. Park Drive, Chagrin, Falls, Ohio, 44023.
2) Anushavan Yeranosyan, 16773 W. Park Drive, Chagrin, Falls, Ohio, 44023.
There are no current arrangements which will result in a change in control.
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
Seale and Beers, Certified Public Accountants, to perform audited financials
for the Company. Seale and Beers, CPAs own no stock in the Company. The
company has no formal contracts with its accountants, as they are paid on a
fee for service basis.
51
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Our By-laws provide to the fullest extent permitted by law, that 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, Ltd. has opined on the validity of the
shares of common stock being offered hereby.
EXPERTS
The financial statements included in this prospectus and in this
registration statement have been audited by Seale and Beers, CPAs, 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.
52
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 website at the following
address: http://www.sec.gov.
53
[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* $ 700
Printing* $ 300
------
Total $4,506
======
*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.
We do not carry or maintain any insurance coverage for the benefit of your
officers and directors at this time. Our directors may 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 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.
II-2
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 the cash payment of $10,000 for 10,000,000 shares to Ashot
Martirosyan, who is our President, and Director, and the cash payment of
$10,000 for 10,000,000 shares to Anushavan Yeranosyan, who is our Secretary,
Treasurer, and Director. The other founding shareholders include: Edgar
Nalbandyan (who paid $1,500 cash for 1,500,000 shares), Lida Gevorgyan (who
paid $1,500 cash for 1,500,000 shares), Haikanush Yeranossian (who paid
$1,500 cash for 1,500,000 shares), Frounz Yeranossian (who paid $1,500 cash
for 1,500,000 shares), Anton Yeranossian (who paid $1,500 cash for 1,500,000
shares), Hasmik Hayrapetyan (who paid $1,500 cash for 1,500,000 shares), and
Karine Abrahamyan (who paid $1,500 cash for 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 issuances of shares since our inception on
June 30, 2009. As of November 23, 2009, we have a total nine (9)
shareholders.
II-3
EXHIBITS
(a) Exhibits:
The following exhibits are filed as part of this registration statement:
- -------------------------------------------------------------------------
Filed Period Filing
Exhibit Exhibit Description herewith Form ending Exhibit date
- -------------------------------------------------------------------------------
3.1 Articles of Incorporation, S-1 6/30/09 3.1 09/28/2009
as currently in effect
- -------------------------------------------------------------------------------
3.2 Bylaws S-1 6/30/09 3.2 09/28/2009
as currently in effect
- -------------------------------------------------------------------------------
5.1 Opinion of Thomas C. Cook, Esq. S-1 6/30/09 3.2 09/28/2009
regarding the legality of the
securities being registered
- -------------------------------------------------------------------------------
23.1 Consent of Seale and Beers, CPAs S-1 6/30/09 3.2 09/28/2009
for audit of June 30, 2009
financial statements
- -------------------------------------------------------------------------------
23.2 Consent of Seale and Beers, CPAs S-1 9/30/09 23.2 11/27/2009
for audit of June 30, 2009
financial statements and
interim financials for
September 30, 2009
- -------------------------------------------------------------------------------
23.3 Consent of Seale and Beers, CPAs X
for audit of June 30, 2009
financial statements and
interim financials for
September 30, 2009
- -------------------------------------------------------------------------------
99.1 Subscription Agreement S-1 6/30/09 99.1 09/28/2009
- -------------------------------------------------------------------------------
II-4
UNDERTAKINGS
------------
We hereby undertake to:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(i) To include any prospectus required by section 10(a) (3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth 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) and 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)
(230.424(b) of this chapter) if, in the aggregate, the changes in
volume and price represent no more than 20% change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
(4) That, for the purpose of determining liability under the Securities Act of
1933 to any purchaser:
(A) Each prospectus filed by the registrant pursuant to Rule 424(b)(3)
(230.424(b)(3) of this chapter) shall be deemed to be part of the
registration statement as of the date the filed prospectus was deemed
part of and included in the registration statement; and
II-5
(B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5),
or (b)(7) (230.424(b)(2), (b)(5), or (b)(7) of this chapter) as part of
a registration statement in reliance on Rule 430B relating to an
offering made pursuant to Rule 415(a)(1)(i), (vii), or (x)
(230.415(a)(1)(i), (vii), or (x) of this chapter) for the purpose of
providing the information required by section 10(a) of the Securities
Act of 1933 shall be deemed to be part of and included in the
registration statement as of the earlier of the date such form of
prospectus is first used after effectiveness or the date of the first
contract of sale of securities in the offering described in the
prospectus. As provided in Rule 430B, for liability purposes of the
issuer and any person that is at that date an underwriter, such date
shall be deemed to be a new effective date of the registration statement
relating to the securities in the registration statement to which that
prospectus relates, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof. Provided,
however, that no statement made in a registration statement or
prospectus that is part of the registration statement or made in a
document incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale prior
to such effective date, supersede or modify any statement that was made
in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to
such effective date;
(6) That, for the purpose of determining liability of the registrant under the
Securities Act of 1933 to any purchaser in the initial distribution of the
securities:
The undersigned registrant undertakes that in a primary offering of
securities of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the undersigned
registrant will be a seller to the purchaser and will be considered to
offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule 424
(230.424 of this chapter);
(ii) Any free writing prospectus relating to the offering prepared by or on
behalf of the undersigned registrant or used or referred to by the
undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the
offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the
undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the
undersigned registrant to the purchaser.
II-6
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 Chargin, Falls, State of Ohio.
EnzymeBioSystems
Dated: December 14, 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 December 14, 2009.
Dated: December 14, 2009 /s/ Ashot Martirosyan
----------------- ---------------------------------
By: Ashot Martirosyan
Its: Principal Executive Officer
Dated: December 14, 2009 /s/ Anushavan Yeranosyan
----------------- ---------------------------------
By: Anushavan Yeranosyan
Its: Principal Financial Officer
Its: Principal Accounting Officer
II-7