Sec Form 1a Regulation A Offering Statement (Page 15 of 29) in pdf

course of business, brieﬂy describe and state the cost of the assets. If the assets are to be acquired from afﬁli-

ates of the issuer or their associates, give the names of the persons from whom they are to be acquired and set

forth the basis used in determining the purchase price to the issuer.

8. The issuer may reserve the right to change the use of proceeds, so long as the reservation is promi-

nently disclosed in the section where the use of proceeds is discussed. It is not necessary to describe the pos-

sible alternative uses of proceeds unless the issuer believes that a change in circumstances leading to an alter-

native use of proceeds is likely to occur.

Item 7.

Description of Business

(a) Narrative description of business.

(1) Describe the business done and intended to be done by the issuer and its subsidiaries and the general

development of the business during the past three years or such shorter period as the issuer may have been in

business. Such description must include, but not be limited to, a discussion of the following factors if such fac-

tors are material to an understanding of the issuer’s business:

(i) The principal products and services of the issuer and the principal market for and method of

distribution of such products and services.

(ii) The status of a product or service if the issuer has made public information about a new prod-

uct or service that would require the investment of a material amount of the assets of the issuer or is otherwise

material.

(iii) If material, the estimated amount spent during each of the last two ﬁscal years on company-

sponsored research and development activities determined in accordance with generally accepted accounting

principles. In addition, state, if material, the estimated dollar amount spent during each of such years on mate-

rial customer-sponsored research activities relating to the development of new products, services or techniques

or the improvement of existing products, services or techniques.

(iv) The total number of persons employed by the issuer, indicating the number employed full

time.

(v) Any bankruptcy, receivership or similar proceeding.

(vi) Any legal proceedings material to the business or ﬁnancial condition of the issuer.

(vii) Any material reclassiﬁcation, merger, consolidation, or purchase or sale of a signiﬁcant

amount of assets not in the ordinary course of business.

(2) The issuer must also describe those distinctive or special characteristics of the issuer’s operation

or industry that are reasonably likely to have a material impact upon the issuer’s future ﬁnancial performance.

Examples of factors that might be discussed include dependence on one or a few major customers or suppli-

ers (including suppliers of raw materials or ﬁnancing), effect of existing or probable governmental regulation

(including environmental regulation), material terms of and/or expiration of material labor contracts or patents,

trademarks, licenses, franchises, concessions or royalty agreements, unusual competitive conditions in the

industry, cyclicality of the industry and anticipated raw material or energy shortages to the extent management

may not be able to secure a continuing source of supply.

Sec Form 1a Regulation A Offering Statement Page 15