-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LKZ8Xt0AhYGkhJYKJrY9p4mNgSDUQSlNgQAylXVrLjX9ezCHEQa16/nTfU6dVPzi 6LcrduDCYea3p/b1oza0Tw== 0001165527-08-000366.txt : 20081215 0001165527-08-000366.hdr.sgml : 20081215 20080707121924 ACCESSION NUMBER: 0001165527-08-000366 CONFORMED SUBMISSION TYPE: S-1/A PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20080707 DATE AS OF CHANGE: 20081031 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Easy Energy Inc CENTRAL INDEX KEY: 0001415397 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRICAL INDUSTRIAL APPARATUS [3620] IRS NUMBER: 260204284 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-1/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-150468 FILM NUMBER: 08940305 BUSINESS ADDRESS: STREET 1: SUITE 105 - 5348 VEGAS DR. CITY: LAS VEGAS STATE: NV ZIP: 89108 BUSINESS PHONE: 702-442-1166 MAIL ADDRESS: STREET 1: SUITE 105 - 5348 VEGAS DR. CITY: LAS VEGAS STATE: NV ZIP: 89108 S-1/A 1 g2449.txt AMENDMENT NO. 2 TO FORM S-1 As filed with the Securities and Exchange Commission on July 7, 2008 Registration No. 333-150468 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Pre-Effective Amendment No. 2 to Form S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 EASY ENERGY, INC. (Exact name of registrant as specified in its charter)
Nevada 3577 26-0204284 (State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer inception or organization) Classification Code Number) Identification No.)
Suite 105 - 5348 Vegas Dr. Las Vegas, NV 89108 Tel: (702) 442-1166 (Address, including zip code, and telephone number of registrant's principal executive offices) EASTBIZ.COM INC. 5348 Vegas Drive Las Vegas, NV 89108 Tel: (702) 442-1166 (Name, address, including zip code, and telephone number of agent for service) Copy to: Edwin L. Miller Jr., Esq. Zysman, Aharoni, Gayer & Co. Sullivan & Worcester LLP One Post Office Square Boston, Massachusetts 02110 Telephone: (617) 338-2800 Fax: (617) 338-2880 Approximate date of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective. If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one): 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 Proposed Class of Number of Maximum Maximum Securities Shares Offering Aggregate Amount of to be to be Price Per Offering Registration Registered Registered(1) Share Price(US$) Fee - ------------------------------------------------------------------------------------------ Common Stock, par value $0.00001, offered for resale by selling security holders 5,608,833(1) $0.30(2) $1,682,650 $ 66.13 - ------------------------------------------------------------------------------------------ Common Stock to be offered for resale by selling security holders upon exercise of Warrants 15,029,440 $0.30(2) $4,508,832(2) $177.19 - ------------------------------------------------------------------------------------------ Total 20,638,273 $6,191,482(2) $243.33 Shares of Common Stock ==========================================================================================
(1) An indeterminate number of additional shares of common stock shall be issuable pursuant to Rule 416 to prevent dilution resulting from stock splits, stock dividends or similar transactions and in such an event the number of shares registered shall automatically be increased to cover the additional shares in accordance with Rule 416 under the Securities Act. (2) Estimated solely for the purposes of calculating the registration fee pursuant to Rule 457(c) under the Securities Act of 1933, as amended, based upon the average of the high and low prices of the registrants common stock on the OTC Bulletin Board on April 21, 2008. 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, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. ================================================================================ SUBJECT TO COMPLETION, DATED ____________, 2008 THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE SELLING STOCKHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. EASY ENERGY, INC. Prospectus --------------------------------- 20,638,273 SHARES OF COMMON STOCK --------------------------------- The prospectus relates to the resale to the public by certain selling shareholders of Easy Energy, Inc. of: * Up to 750,000 shares of our common stock issued in a private placement on March 27, 2008. * Up to 882,353 shares of our common stock issued in a private placement on March 10, 2008. * Up to 3,000,000 shares of our common stock which may be issued upon the exercise of warrants issued in connection with the private placement on March 10, 2008. * Up to 300,000 shares of our common stock issued in a private placement on March 3, 2008. * Up to 1,000,000 shares of our common stock which may be issued upon the exercise of warrants issued in connection with the private placement on March 3, 2008. * Up to 3,676,480 shares of our common stock issued in a private placement on February 28, 2008. * Up to 11,029,440 shares of our common stock which may be issued upon the exercise of warrants issued in connection with the private placement on February 28, 2008. The warrants issued on March 10, 2008 entitle the holder to purchase one additional share of our common stock at an exercise price of $0.27 for a period of five years from the closing date. The warrants issued on March 3, 2008 entitle the holder to purchase one additional share of our common stock at an exercise price of $0.15 for a period of five years from the closing date. The warrants issued on February 28, 2008 entitle the holder the purchase one share of our common stock at an exercise price of $0.27 for a period of five years. The shares were acquired by the selling stockholders directly from our company in private transactions that were exempt from the registration requirements of the Securities Act of 1933. The selling stockholders may offer to sell the shares of common stock being offered in this prospectus at fixed prices, at prevailing market prices at the time of sale, at varying prices or at negotiated prices. Our common stock is quoted on the OTC Bulletin Board under the symbol "ESYE.OB". On July 1, 2008 the closing bid price for one share of our common stock on the OTC Bulletin Board was $0.30. We will not receive any proceeds from the resale of shares of common stock by the selling stockholders, although we may receive proceeds of up to $3,937,949 if all of the warrants are exercised. We will pay for all costs associated with this registration statement and prospectus. The selling shareholders may be deemed to be "underwriters," as such term is defined in the Securities Act. OUR BUSINESS IS SUBJECT TO MANY RISKS, AND AN INVESTMENT IN OUR COMMON STOCK WILL ALSO INVOLVE A HIGH DEGREE OF RISK. YOU SHOULD INVEST IN OUR COMMON STOCK ONLY IF YOU CAN AFFORD TO LOSE YOUR ENTIRE INVESTMENT. YOU SHOULD CAREFULLY CONSIDER THE VARIOUS RISK FACTORS DESCRIBED BEGINNING ON PAGE 3 BEFORE INVESTING IN OUR COMMON STOCK. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE. EASY ENERGY, INC. Prospectus -------------------------------- 20,638,273 SHARES OF COMMON STOCK -------------------------------- TABLE OF CONTENTS Page Number ----------- PROSPECTUS SUMMARY 1 RISK FACTORS 3 FORWARD-LOOKING STATEMENTS 9 USE OF PROCEEDS 9 DETERMINATION OF OFFERING PRICE 9 DILUTION 9 SELLING SHAREHOLDERS 9 PLAN OF DISTRIBUTION 12 INTEREST OF NAMED EXPERTS AND COUNSEL 13 DESCRIPTION OF BUSINESS 13 DESCRIPTION OF PROPERTY 16 DESCRIPTION OF SECURITIES 16 LEGAL PROCEEDINGS 17 MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS 17 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 18 APPLICATION OF CRITICAL ACCOUNTING POLICIES 21 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 22 DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS 22 EXECUTIVE COMPENSATION 24 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 25 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 27 DISCLOSURE OF SEC POSITION OF INDEMNIFICATION FOR SECURITIES ACT LIABILITIES 27 EXPERTS 28 WHERE YOU CAN FIND MORE INFORMATION 28 FINANCIAL STATEMENTS 29 As used in this prospectus, the terms "we", "us", "our" and "Easy Energy" mean Easy Energy, Inc., unless otherwise indicated. All dollar amounts refer to U.S. dollars unless otherwise indicated. PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus. Because this is a summary, it may not contain all of the information that you should consider before receiving a distribution of our common stock. You should read this entire prospectus carefully. We are a development stage company that has only recently begun operations. We have not generated any revenues from our intended business activities, and we do not expect to generate revenues in the near future. We may never generate revenues. We have minimal assets and have incurred losses since inception. CORPORATE BACKGROUND Easy Energy, Inc. was incorporated under the laws of the State of Nevada on May 17, 2007. We have not generated any revenue to date and are a development stage company. We currently have no employees other than our President and Secretary who are also our only board members. We plan to develop a novel, man-powered charger solution for the problems related to the ongoing power requirements of small hand-carried battery-powered personal electronic devices. On August 20, 2007 we filed a patent application (Application No.: 11/841,046) with the United States Patent and Trademark Office. Prior to our incorporation, Mr. Guy Ofir, our President and Director developed a prototype of the patent. On January 29, 2008, we announced on the completion of the fully working prototype of the man-powered charger solution for battery powered small hand-carried devices. The Company's principal business plan is to manufacture and market the product and/or seek third party entities interested in licensing the rights to manufacture and market the man-powered charger. Our target market will be consumers of disposable and rechargeable batteries, those who heavily depend on their portable devices, especially cell phone users, and those who are looking for "green" energy sources. Our principal executive office is located at Suite 105 - 5348 Vegas Dr., Las Vegas, NV 89108. Our telephone number is (702) 442-1166. We also have an office in Israel at 26 Ga'aton Blvd., Nahariya 22401 Israel, Tel. No. +972-4-988 8314 . We do not have any subsidiaries. The address of our resident agent is Eastbiz.com Inc, 5348 Vegas Dr, Las Vegas, Nevada, U.S.A., 89108. Due to the uncertainty of our ability to meet our current operating and capital expenses, in their report on our audited financial statements for the period ended March 31, 2008 our independent auditors included an explanatory paragraph regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors. NUMBER OF SHARES BEING OFFERED This prospectus covers the resale by the selling stockholders named in this prospectus of up to 20,638,273 shares of our common stock. The offered shares were acquired by the selling stockholders in several private placement transactions. All of these transactions were exempt from the registration requirements of the Securities Act of 1933. The selling stockholders may offer to sell the shares of common stock being offered in this prospectus at fixed prices, at prevailing market prices at the time of sale, at varying prices or at negotiated prices. Our common stock is presently traded on the OTC Bulletin Board under the symbol "ESYE.OB". Please see the Plan of Distribution section at page 11 of this prospectus for a detailed explanation of how the common shares may be sold. NUMBER OF SHARES ISSUED AND OUTSTANDING There were 93,186,070 shares of our common stock issued and outstanding as at July 1, 2008. 1 USE OF PROCEEDS We will not receive any of the proceeds from the sale of the shares of our common stock being offered for sale by the selling stockholders, although we may receive proceeds of up to $3,937,949 if all of warrants are exercised. We will incur all costs associated with this registration statement and prospectus. SUMMARY FINANCIAL DATA The summary financial data presented below is derived from and should be read in conjunction with our audited financial statements from May 17, 2007 (date of inception) to March 31, 2008, including the notes to those financial statements which are included elsewhere in this prospectus along with the section entitled "Plan of Operation" beginning on page 21 of this prospectus. As at BALANCE SHEET INFORMATION March 31, 2008 ------------------------- -------------- Cash $ 725,747 Total Assets $ 775,747 Liabilities $ 300 From May 17, 2007 (date of inception) to STATEMENT OF OPERATIONS INFORMATION March 31, 2008 ----------------------------------- -------------- Working Capital $ 775,447 Expenses $ 437,752 Total Number of Issued Shares of Common Stock 93,186,070 Net Gain (Loss) $ 435,824 2 RISK FACTORS An investment in our common stock involves a number of very significant risks. You should carefully consider the following risks and uncertainties in addition to other information in this prospectus in evaluating our company and its business before purchasing shares of our company's common stock. Our business, operating results and financial condition could be seriously harmed due to any of the following risks. You could lose all or part of your investment due to any of these risks. RISKS RELATED TO OUR BUSINESS OUR SUCCESS IS HEAVILY DEPENDENT ON PROTECTING OUR INTELLECTUAL PROPERTY RIGHTS. We rely on a combination of patent, copyright, trademark, and trade secret protections to protect our proprietary technology. Our success will, in part, depend on our ability to obtain trademarks and patents. We have recently submitted provisional patent applications, but we cannot ensure that any patents will issue from those applications. We cannot assure you that the patents issued to us will not be challenged, invalidated, or circumvented, or that the rights granted under those registrations will provide competitive advantages to us. We also rely on trade secrets and new technologies to maintain our competitive position. Although we have entered into confidentiality agreements with our employees and consultants, we cannot be certain that others will not gain access to these trade secrets. Others may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets. IF WE ARE UNABLE TO ADEQUATELY PROTECT OUR INTELECTUAL PROPERTY, THIRD PARTIES MAY BE ABLE TO USE OUR TECHNOLOGY, WHICH COULD ADVSERSLY AFFECT OUR ABILITY TO COMPETE IN THE MARKET. Our commercial success will depend in part on our ability to obtain and maintain patent protection on our products, and successfully defend these patents and technologies against third-party challenges. In particular, On August 20, 2007, we filed a provisional patent application (Application No.: 11/841,046) with the United States Patent and Trademark Office, which is still pending. In doing so, we have secured a filing date in the United States Trademark and Patent Office. In order to extend the potential patent protection beyond the US, we are required to file an international patent application via the Patent Cooperation Treaty ("PCT") no later than August 19, 2008. On June 30, 2008, we have filed the international patent application via the PCT. This international filing will enable us to file a national patent application in any PCT country until February 19, 2009 and still claim the benefit of the priority date of August 20, 2007. After February 29, 2009, we will be required to file a separate patent application in each PCT country, in which we would like to have a patent protection. There is no certainty that such applications will be approved. In addition, even if such applications are approved, they may not be sufficiently broad to prevent others from practicing our technologies or from developing competing products. Furthermore, others may independently develop similar or alternative technologies or design around our patented technologies. Patents we use may be challenged or invalidated or may fail to provide us with any competitive advantage. Moreover, in certain parts of the world, such as in China, western companies are adversely affected by poor enforcement of intellectual property rights. WE MAY BE EXPOSED TO LIABILITY FOR INFRINGING INTELLECTUAL PROPERTY RIGHTS OF OTHER COMPANIES. Our success will, in part, depend on our ability to operate without infringing on the proprietary rights of others. Although we have conducted searches and are not aware of any patents and trademarks which our products or their use might infringe, we cannot be certain that infringement has not or will not occur. We could incur substantial costs, in addition to the great amount of time lost, in defending any patent or trademark infringement suits or in asserting any patent or trademark rights, in a suit with another. WE HAVE LIMITED OPERATING HISTORY AND HAVE SUSTAINED LOSSES SINCE INCEPTION, WHICH WE EXPECT TO CONTINUE INTO THE FUTURE. 3 We were incorporated on May 17, 2007, and have very limited operations to date. We have not realized any revenues to date. Our product is under development and is not ready for commercial sale. We have no operating history at all upon which an evaluation of our future success or failure can be made. Our net loss from inception to March 31, 2008 is $435,824. Based upon our proposed plans, we expect to incur operating losses in future periods. This will happen because there are substantial costs and expenses associated with the development, testing and marketing of our product. Based on arrangements made with potential distributors and the development stage of our product, we believe that we are at least 8-10 months away from generating our first revenues. We may be wrong and may fail to generate revenues in the future. If we cannot attract a significant number of users, we will not be able to generate any significant revenues or income. Failure to generate revenues will cause us to go out of business because we will not have the money to pay our ongoing expenses. In particular, additional capital may be required in the event that: - the actual expenditures required to be made are at or above the higher range of our estimated expenditures; - we incur unexpected costs in completing the development of our product or encounter any unexpected technical or other difficulties; - we incur delays and additional expenses as a result of technology failure; - we are unable to create a substantial market for our product; or - we incur any significant unanticipated expenses. The occurrence of any of the aforementioned events could adversely affect our ability to meet our business plans and achieve a profitable level of operations. IF WE ARE UNABLE TO OBTAIN THE NECESSARY FINANCING TO IMPLEMENT OUR BUSINESS PLAN WE WILL NOT HAVE THE MONEY TO PAY OUR ONGOING EXPENSES AND WE MAY GO OUT OF BUSINESS. Our budgeted expenditures for the next twelve months are $922,000 of which we have prepaid $200,000 for our research and development costs which are included in the statement of operations under product development and prepaid $50,000 in Consulting Fees which is included in the balance sheet and we anticipate needing approximately $21,243.32 for expenses associated with this Registration Statement (See ITEM 13 "Other Expenses if Issuance and Distribution"). Therefore, we presently have a budgeted shortfall of $32,503.68. Because we have not generated any revenue from our business, and we are 8-10 months away from being in a position to generate revenues, we will need to raise additional funds for the future development of our business and to respond to unanticipated requirements or expenses. Management estimates that our current cash balances will be exhausted by April 2009 provided we do not have any unanticipated expenses. We do not currently have any arrangements for financing and we can provide no assurance to investors we will be able to find such financing. Our ability to successfully develop our product and to eventually produce and sell it to generate operating revenues depends on our ability to obtain the necessary financing to implement our business plan. Given that we have no operating history, no revenues and only losses to date, we may not be able to achieve this goal, and if this occurs we will not be able to pay for our operations and we may go out of business. We will likely need to issue additional equity securities in the future to raise the necessary funds. We do not currently have any arrangements for additional financing and we can provide no assurance to investors we will be able to find such financing if further funding is required. Obtaining additional financing would be subject to a number of factors, including investor acceptance of our product and our business model. The issuance of additional equity securities by us would result in a significant dilution in the equity interests of our current stockholders. The resale of shares by our existing shareholders pursuant to this prospectus may result in significant downward pressure on the price of our common stock and cause negative impact on our ability to sell additional equity securities. Obtaining loans will increase our liabilities and future cash commitments. There can be no assurance that capital will continue to be available if necessary to meet future funding needs or, if the capital is available, that it will be on terms acceptable to us. If we are unable to obtain financing in the amounts and on terms deemed acceptable to us, we may be forced to scale back or cease operations, which might result in the loss of some or all of your investment in our common stock. IF OUR ESTIMATES RELATED TO EXPENDITURES ARE ERRONEOUS OUR BUSINESS WILL FAIL AND YOU WILL LOSE YOUR ENTIRE INVESTMENT. 4 Our success is dependent in part upon the accuracy of our management's estimates of expenditures, which are currently budgeted at $992,000, of which $250,000 has been prepaid for the next 12 months for our business plan and an additional $21,243.32. (See "Plan of Operation".) If such estimates are erroneous or inaccurate we may not be able to carry out our business plan, which could, in a worst-case scenario, result in the failure of our business and you losing your entire investment. OUR BUSINESS MODEL MAY NOT BE SUFFICIENT TO ENSURE OUR SUCCESS IN OUR INTENDED MARKET. Our survival is currently dependent upon the success of our efforts to gain market acceptance of one product that ultimately represents a small sector in the overall charger industry. Should our services be too narrowly focused or should the target market not be as responsive as we anticipate, we may not have in place alternate products or services that we can offer to ensure our survival. IF WE ARE UNABLE TO COMPLETE THE DEVELOPMENT OF OUR PRODUCT WE WILL NOT BE ABLE TO GENERATE REVENUES AND YOU WILL LOSE YOUR INVESTMENT. We have not completed the development of our proposed product and we have no definitive contracts or licenses for the sale or use of our product. The success of our proposed business will depend on its completion and the acceptance of our product by the general public. Achieving such acceptance will require significant marketing investment. Our product, once developed and tested, may not be accepted by our customers at sufficient levels to support our operations and build our business. If the proposed product that we will develop is not accepted at sufficient levels, our business will fail. WE ARE DEPENDENT ON REVENUES GENERATED BY A SOLE PRODUCT AND THUS WE ARE SUBJECT TO MANY ASSOCIATED RISKS. Our revenue will be generated through the sale of our man-powered charger. Unless we expand our product offerings to include related or other products, our likely source of revenues for the foreseeable future will continue to be generated by the man-powered charger. Accordingly, 100% of our revenue will be dependent upon the sale of our sole product. If potential users are satisfied with other means for charging their cell phone battery we may not be able to sell our product. * If technological developments render man-powered chargers obsolete, our business could fail; * our patent application is unsuccessful, our business could fail. Thus, we may expand our financial resources on marketing and advertising without generating concomitant revenues. If we cannot generate sufficient revenues to cover our overhead, manufacturing and operating costs, we will fail. THERE ARE LOW BARRIERS TO ENTRY INTO THE MAN-POWERED CHARGER INDUSTRY AND, AS A RESULT, MANY COMPANIES MAY BE ABLE TO COMPETE WITH US ON LIMITED FINANCIAL RESOURCES. Our product does not require large capital expenditures for its development or manufacture. As a result, barriers to entering this industry may be low. If the intellectual property protection with respect to the man-powered charger product does not prove effective, a competitor with limited financial resources may be able to successfully compete with us. BECAUSE OUR EXECUTIVE OFFICERS AND DIRECTORS LIVE OUTSIDE OF THE UNITED STATES, YOU MAY HAVE NO EFFECTIVE RECOURSE AGAINST THEM FOR MISCONDUCT AND MAY NOT BE ABLE TO ENFORCE JUDGMENT AND CIVIL LIABILITIES AGAINST THEM. INVESTORS MAY NOT BE ABLE TO RECEIVE COMPENSATION FOR DAMAGES TO THE VALUE OF THEIR INVESTMENT CAUSED BY WRONGFUL ACTIONS BY OUR DIRECTORS AND OFFICERS. Both of our directors and officers live outside of the United States. Mr. Guy Ofir, our President and a director is a national and a resident of Israel, and all or a substantial portion of his assets are located outside of the United States. Mr. Emanuel Cohen, our Secretary, Treasurer and a director is a national and a resident of Israel, and all or a substantial portion of his assets are 5 located outside of the United States. As a result, it may be difficult for investors to enforce within the United States any judgments obtained against our directors or officers, or obtain judgments against them outside of the United States that are predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. Investors may not be able to receive compensation for damages to the value of their investment caused by wrongful actions by our directors and officers. BECAUSE WE HAVE TWO DIRECTORS, DEADLOCKS MAY OCCUR IN OUR BOARD'S DECISION-MAKING PROCESS, WHICH MAY DELAY OR PREVENT CRITICAL DECISIONS FROM BEING MADE. Since we currently only have an even number of directors, deadlocks may occur when such directors disagree on a particular decision or course of action. Our Articles and By-Laws do not contain any mechanisms for resolving potential deadlocks. While our directors are under a duty to act in the best interest of our company, any deadlocks may impede the further development of our business in that such deadlocks may delay or prevent critical decisions regarding our development. BECAUSE OUR EXECUTIVE OFFICERS ARE EMPLOYED ELSEWHERE, THEY WILL BE UNABLE TO DEVOTE THEIR SERVICES TO OUR COMPANY ON A FULL TIME BASIS AND THE PERFORMANCE OF OUR BUSINESS MAY SUFFER, OUR BUSINESS COULD FAIL AND INVESTORS COULD LOSE THEIR ENTIRE INVESTMENT. Mr. Guy Ofir, our President and director is employed elsewhere and he will be unable to devote his services to our company on a full time basis. Mr. Guy Ofir currently devotes approximately 30 to 40 hours a week to our company. Mr. Emanuel Cohen, our Secretary, Treasurer and a director, is employed elsewhere and he will be unable to devote his services to our company on a full time basis. Mr. Emanuel Cohen currently devotes 15 to 20 hours a week to our company. As a result, the management of our company could under-perform, our business could fail and investors could lose their entire investment. OUR EXECUTIVE OFFICERS HAVE NO EXPERIENCE OR TECHNICAL TRAINING IN THE DEVELOPMENT, MAINTENANCE AND MARKETING OF MAN-POWERED CHARGER OR IN OPERATING BUSINESSES THAT SELL PRODUCTS OR SERVICES TO WHOLESALES. THIS COULD CAUSE THEM TO MAKE INEXPERIENCED OR UNINFORMED DECISIONS THAT HAVE BAD RESULTS FOR OUR COMPANY. AS A RESULT, OUR OPERATIONS COULD SUFFER IRREPARABLE HARM AND MAY CAUSE US TO SUSPEND OR CEASE OPERATIONS, WHICH COULD CAUSE INVESTORS TO LOSE THEIR ENTIRE INVESTMENT. Mr. Guy Ofir, our President and director and Mr. Emanuel Cohen, our Secretary, Treasurer and director, have no experience or technical training in the development, maintenance and marketing of man-powered charger or in operating businesses that sell products or services to wholesales. Due to their lack of experience and knowledge in these areas, our executive officers could make the wrong decisions regarding the development, operation and marketing of our website and the operation of our business, which could lead to irreparable damage to our business. Consequently, our operations could suffer irreparable harm from mistakes made by our executive officers and we may have to suspend or cease operations, which could cause investors to lose their entire investment. WE DEPEND HEAVILY ON MR. GUY OFIR AND MR. EMANUEL COHEN. THE LOSS OF EITHER PERSON WILL HAVE A SUBSTANTIAL NEGATIVE EFFECT ON OUR BUSINESS AND MAY CAUSE OUR BUSINESS TO FAIL. We depend entirely on Mr. Ofir and Mr. Cohen for all of our operations. The loss of either person will have a substantial negative effect on the company and may cause our business to fail. Our officers did not receive any compensation for their services and it is highly unlikely that they will receive any compensation unless and until we generate substantial revenues. We do not have any employment agreements or maintain key person life insurance policies on our officers. If our officers do not devote sufficient time towards our business, we may never be able to effectuate our business plan. BECAUSE OUR EXECUTIVE OFFICERS CONTROL A LARGE PERCENTAGE OF OUR COMMON STOCK, THEY HAVE THE ABILITY TO INFLUENCE MATTERS AFFECTING OUR SHAREHOLDERS. 6 Our executive officers, in the aggregate, beneficially own approximately 43% of the issued and outstanding shares of our common stock. As a result, they have the ability to influence matters affecting our shareholders, including the election of our directors, the acquisition or disposition of our assets, and the future issuance of our shares. Because our executive officers control such shares, investors may find it difficult to replace our management if they disagree with the way our business is being operated. WE HAVE A GOING CONCERN OPINION FROM OUR AUDITORS, INDICATING THE POSSIBILITY THAT WE MAY NOT BE ABLE TO CONTINUE TO OPERATE. The Company has incurred net losses of $435,824 for the period from May 17, 2007 (inception) to March 31, 2008. We anticipate generating losses for the next 12 months. Therefore, we may be unable to continue operations in the future as a going concern. No adjustment has been made in the accompanying financial statements to the amounts and classification of assets and liabilities which could result should we be unable to continue as a going concern. If we cannot continue as a viable entity, our shareholders may lose some or all of their investment in the Company. OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM HAS EXPRESSED SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN, WHICH MAY HINDER OUR ABILITY TO OBTAIN FUTURE FINANCING. For the period from May 17, 2007 (inception) to March 31, 2008, our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern. Such doubt was expressed as a result of our recurring losses and cash flow deficiencies since our inception. We continue to experience net losses. Our ability to continue as a going concern is subject to our ability to generate a profit and/or obtain necessary funding from outside sources, including obtaining additional funding from the sale of our securities, future sales of our product or obtaining loans and grants from various financial institutions whenever possible. If we continue to incur losses, it will become increasingly difficult for us to achieve our goals and there can be no assurance that our business plan will materialize. WE WILL BE HEAVILY DEPENDENT ON CONTRACTING WITH THIRD PARTY FIRM(S) TO MANUFACTURE COMPONENTS FOR US. IF WE ARE UNABLE TO LOCATE, HIRE AND RETAIN THESE FIRM(S), OUR BUSINESS WILL FAIL. We intend to hire a third party firm(s) to manufacture the components of our product. Should we be unable to contract qualified third parties firm(s) to manufacture because we are unable to find them, are unable to attract them to our company or are unable to afford them, we will never become profitable and our business will fail. RISKS ASSOCIATED WITH OUR COMMON STOCK BECAUSE WE CAN ISSUE ADDITIONAL COMMON SHARES, PURCHASERS OF OUR COMMON STOCK MAY INCUR IMMEDIATE DILUTION AND MAY EXPERIENCE FURTHER DILUTION. We are authorized to issue up to 1,000,000,000 common shares, of which 93,186,070 are issued and outstanding. Our board of directors has the authority to cause our company to issue additional shares of common stock without the consent of any of our shareholders. Consequently, our shareholders may experience dilution in their ownership of our company in the future. A DECLINE IN THE PRICE OF OUR COMMON STOCK COULD AFFECT OUR ABILITY TO RAISE FURTHER WORKING CAPITAL AND ADVERSELY IMPACT OUR ABILITY TO CONTINUE OPERATIONS. A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. Because a significant portion of our operations has been and will be financed through the sale of equity securities, a decline in the price of our common stock could be especially detrimental to our liquidity and our operations. Such reductions may force us to reallocate funds from other planned uses and may have a significant negative effect on our business plans and operations, including our ability to develop new products and continue our current operations. If our stock price declines, we can offer no assurance that we will be able to raise additional capital or generate funds from operations sufficient to meet our obligations. If we are unable to raise sufficient capital in the future, we may not be able to have the resources to continue our normal operations. 7 The market price for our common stock may also be affected by our ability to meet or exceed expectations of analysts or investors. Any failure to meet these expectations, even if minor, may have a material adverse effect on the market price of our common stock. TRADING OF OUR STOCK MAY BE RESTRICTED BY THE SECURITIES AND EXCHANGE COMMISSION'S PENNY STOCK REGULATIONS, WHICH MAY LIMIT A STOCKHOLDER'S ABILITY TO BUY AND SELL OUR STOCK. The Securities and Exchange Commission has adopted regulations which generally define "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors". The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock. NASD SALES PRACTICE REQUIREMENTS MAY ALSO LIMIT A STOCKHOLDER'S ABILITY TO BUY AND SELL OUR STOCK. In addition to the "penny stock" rules described above, the National Association of Securities Dealers (NASD) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, the NASD believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The NASD requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares. OUR COMMON STOCK IS ILLIQUID AND THE PRICE OF OUR COMMON STOCK MAY BE NEGATIVELY IMPACTED BY FACTORS WHICH ARE UNRELATED TO OUR OPERATIONS. Our common stock currently trades on a limited basis on the OTC Bulletin Board. Trading of our stock through the OTC Bulletin Board is frequently thin and highly volatile. There is no assurance that a sufficient market will develop in the stock, in which case it could be difficult for shareholders to sell their stock. The market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, quarterly operating results of our competitors, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting our competitors or us. In addition, the stock market is subject to extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock. WE DO NOT INTEND TO PAY DIVIDENDS ON ANY INVESTMENT IN THE SHARES OF STOCK OF OUR COMPANY AND THERE WILL BE FEWER WAYS FOR INVESTORS TO MAKE A GAIN ON ANY INVESTMENT IN OUR COMPANY. We have never paid any cash dividends and currently do not intend to pay any dividends for the foreseeable future. To the extent that we require additional funding currently not provided for in our financing plan, our funding sources may prohibit the payment of a dividend. Because we do not intend to declare dividends, any gain on an investment in our company will need to come through an increase in the stock's price. This may never happen and investors may lose all of their investment in our company. 8 PLEASE READ THIS PROSPECTUS CAREFULLY. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. YOU SHOULD NOT ASSUME THAT THE INFORMATION PROVIDED BY THE PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THIS PROSPECTUS. FORWARD-LOOKING STATEMENTS This prospectus contains forward-looking statements which relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "will" ,"intend" "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors" beginning on page 3, that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results. The safe harbour for forward-looking statements provided in the Private Securities Litigation Reform Act of 1995 does not apply to the offering made in this prospectus. USE OF PROCEEDS We will not receive any of the proceeds from the sale of the shares of our common stock being offered for sale by the selling stockholders, although we may receive proceeds of up to $3,937,949 if all of the warrants are exercised. We expect to use the proceeds received from the exercise of the warrants, if any, for general working capital purposes. We will incur all costs associated with this registration statement and prospectus. Our company estimates that the total costs that will be incurred by our company in connection with the registration statement and prospectus will be approximately $21,243.32. DETERMINATION OF OFFERING PRICE The selling shareholders will determine at what price they may sell the offered shares, and such sales may be made at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale or at negotiated prices. DILUTION The common stock to be sold by the selling stockholders is the 5,608,833 shares of common stock that are currently issued and outstanding. Accordingly, there will be no dilution to our existing stockholders. SELLING SHAREHOLDERS The following table sets forth the number of shares beneficially owned by the selling stockholders and certain other information regarding such stockholders, as of March 31, 2008. The selling stockholders acquired their securities (1) through a private transaction exempt from registration pursuant to Regulation S of the Securities Act of 1933, as amended (the "Act"), pursuant to which we sold to the Meitav entities listed below (the "Meitav Entities") on February 8, 2008, 367,647 units, each unit being offered for $1.70, for aggregate gross proceeds of $625,001. Each unit consisted of (i) ten shares of our common stock and (ii) thirty Class A Warrants. Each Class A Warrant entitles the holder thereof to purchase one share of common stock at an exercise price of $0.27 per share, expiring five years from the date of purchase of the Warrant; (2) as compensation for legal services and services in connection with the facilitation of the financing of the Company by the Meitav Entities and Tailor Made Capital Ltd. ("TMC"). In connection therewith, on March 3, 2008, we issued Mr. Victor Tshuva, 300,000 shares of restricted common stock for an aggregate price of $3,000 and warrants to purchase 1,000,000 shares of our common stock at an exercise price of $0.15 for a period of five years; (3) as a commitment fee of 9 882,353 shares of the Company's common stock and a warrant to purchase 3,000,000 shares of the Company's common stock to TMC for arranging the equity line pursuant to the March 10, 2008 agreement; and (4) 750,000 shares of our common stock as a consideration for investor relations services to be provided by Falcon Financial Services LLC. The shares offered by this prospectus may be offered from time to time by the selling stockholders. The following table assumes that the selling stockholders will sell all of the shares being offered for their respective accounts by this prospectus. However, the selling stockholders may sell some, all or none of their shares of our common stock offered by this prospectus and we are unable to determine the exact number of shares that actually will be sold. We do not know how long the selling stockholders will hold the shares of our common stock before selling them, and we currently have no agreements, arrangements or understandings with any of the selling stockholders regarding the sale of any of the shares of our common stock. The information in the table below is current only as of the date of this prospectus. None of the selling shareholders had or have any material relationship with our company or any of its affiliates within the past three years. To our knowledge, there is also no affiliation among Victor Tshuva, Falcon Financial Services LLC, the Meitav Entities, TMC and their beneficial owners. None of the selling shareholders is a broker-dealer or an affiliate of a broker-dealer. Each shareholder is an adult. We may require the selling shareholders 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. In the following table, except as noted below, we have determined the number and percentage of shares beneficially owned in accordance with Rule 13d-3 of the Exchange Act, and this information does not necessarily indicate beneficial ownership for any other purpose. Except as otherwise indicated in the footnotes below, we believe that each of the selling stockholders named in this table has sole voting and investment power over the shares of our common stock indicated. In determining the number of shares of our common stock beneficially owned by a person and the percentage ownership of that person, we include any shares as to which the person has sole or shared voting power or investment power, as well as any shares registered hereby that are subject to outstanding warrants held by that person and any shares subject to outstanding warrants or options that are currently exercisable or exercisable within 60 days after March 31, 2008. Applicable percentages are based on 93,186,070 shares of our common stock outstanding on March 31, 2008.
Beneficial Ownership Beneficial Ownership Prior to this Offering(1) After Offering ---------------------------- ----------------------- Number of Shares Issuable Number of Number Number of Upon Exercise Shares Being of Name of Selling Stockholder Shares of Warrants Offered Shares Percent(**) - --------------------------- ------ ----------- ------- ------ ----------- Victor Tshuva 300,000 1,000,000 1,300,000 0 0 Meitav Gemel Ltd Meitav Tagmulim Clalit(2) 1,394,120 4,182,360 5,576,480 0 0 Meitav Gemel Ltd Meitav Histalmut Clalit(2) 947,060 2,841,180 3,788,240 0 0 Meitav Gemel Ltd Meitav Pizuim Clalit(2) 302,940 908,820 1,211,760 0 0 Meitav Gemel Ltd Meitav Tagmulim CPI(2) 70,590 211,770 282,360 0 0
10
Meitav Gemel Ltd Meitav Tagmulim Nis(2) 26,470 79,410 105,880 0 0 Meitav Gemel Ltd Meitav Tagmulim Shares(2) 67,650 202,950 270,600 0 0 Meitav Gemel Ltd Meitav Histalmut CPI(2) 23,530 70,590 94,120 0 0 Meitav Gemel Ltd Meitav Histalmut Nis(2) 5,880 17,640 23,520 0 0 Meitav Gemel Ltd Meitav Histalmut Shares(2) 38,240 114,720 152,960 0 0 Meitav Gemel Ltd Meitav Chisachon Gemel(2) 229,410 688,230 917,640 0 0 Meitav Gemel Ltd Meitav Chisachon Histalmut(2) 164,710 494,130 658,840 0 0 Meitav Gemel Ltd Meitav Chisachon Pizuim(2) 33,530 100,590 134,120 0 0 Meitav Gemel Ltd Meitav Yerushalayim Gemel Bound 85(2) 11,180 33,540 44,720 0 0 Meitav Gemel Ltd Meitav Yerushalayim Gemel Zahav(2) 12,350 37,050 49,400 0 0 Meitav Gemel Ltd Meitav Yerushalayim Histalmut Bound 85(2) 4,710 14,130 18,840 0 0 Meitav Gemel Ltd Meitav Yerushalayim Histalmut Zahav(2) 4,710 14,130 18,840 0 0 Meitav Pension Ltd Meitav Pensia Makifa(2) 58,820 176,460 235,280 0 0 Meitav Pension Ltd Meitav Pensia Clalit(2) 2,350 7,050 9,400 0 0 Meitav Mishan Ltd Meitav Gemel Plus(2) 205,880 617,640 823,520 0 0 Meitav Mishan Ltd Meitav Histalmut Plus(2) 55,880 167,640 223,520 0 0 Meitav Mishan Ltd Meitav Pizuim Plus(2) 16,470 49,410 65,880 0 0 Tailor Made Capital(2) 882,353 3,000,000 3,882,353 0 0 Meitav Entities and Tailor Made Capital as a group (2) 4,558,833 14,029,440 18,588,273(3) 0 0 Falcon Financial Services LLC 750,000 -- 750,000 0 0 ---------- ---------- ---------- ----- ----- TOTAL 5,608,833 15,029,440 20,638,273 0 0 ========== ========== ========== ===== =====
- ---------- * Less than one percent. ** These figures assume that the selling stockholders will sell all of their shares available for sale during the effectiveness of the registration statement that includes this prospectus. The selling shareholders are not required to sell their shares. (1) "Prior to this Offering" means prior to the offering by the selling stockholders of the securities registered under this prospectus for resale. 11 (2) An entity controlled by Meitav Investment House Ltd, ("Meitav") which as reported on Schedule 13G filed on March 19, 2008, is beneficially owned by Messrs. Zvi Stepak and Shlomo Simanovsky through intermediary entities. Messrs. Zvi Stepak and Shlomo Simanovsky may exercise shared voting and investment powers with respect to all shares owned by Meitav and the Meitav Entities. (3) In an appendix to the warrant issued by the Company to the Meitav Entities and TMC the following exercise limitations have been agreed to: the company shall not effect the exercise of the warrant and the holder shall not have the right to exercise any portion of the warrant to the extent that after giving effect to such issuance after exercise, such holder along with its affiliates (which include all of Meitav Entities and TMC) shall have more than 9.99% of the number of shares of common stock outstanding of the Company. This provision however, may be waived by the holder at its election upon not less than 61 days' notice to the Company. PLAN OF DISTRIBUTION The selling stockholders may, from time to time, sell all or a portion of the shares of common stock on any market upon which the common stock may be listed or quoted (currently the National Association of Securities Dealers OTC Bulletin Board in the United States), in privately negotiated transactions or otherwise. Such sales may be at fixed prices prevailing at the time of sale, at prices related to the market prices or at negotiated prices. The distribution of such shares may be effected by the selling stockholders in one or more of the following methods: * ordinary brokers transactions, which may include long or short sales, * transactions involving cross or block trades on any securities or market where our common stock is trading, * purchases by brokers, dealers or underwriters as principal and resale by such purchasers for their own accounts pursuant to this prospectus, "at the market" to or through market makers or into an existing market for the common stock, * in other ways not involving market makers or established trading markets, including direct sales to purchasers or sales effected through agents * through transactions in options, swaps or other derivatives (whether exchange listed or otherwise), or * any combination of the foregoing. In addition, the selling stockholders may enter into hedging transactions with broker-dealers who may engage in short sales, if short sales were permitted, of shares in the course of hedging the positions they assume with the selling shareholders. The selling stockholders may also enter into option or other transactions with broker-dealers that require the delivery by such broker-dealers of the shares, which shares may be resold thereafter pursuant to this prospectus. Brokers, dealers, underwriters or agents participating in the distribution of the shares may receive compensation in the form of discounts, concessions or commissions from the selling shareholders and/or the purchasers of shares for whom such broker-dealers may act as agent or to whom they may sell as principal, or both (which compensation as to a particular broker-dealer may be in excess of customary commissions). The selling shareholders and any broker-dealers acting in connection with the sale of the shares hereunder may be deemed to be underwriters within the meaning of Section 2(11) of the Securities Act of 1933, and any commissions received by them and any profit realized by them on the resale of shares as principals may be deemed underwriting compensation under the Securities Act of 1933. The amount of such compensation cannot be estimated at this time. We know of no existing arrangements between the selling shareholders and any other shareholder, broker, dealer, underwriter or agent relating to the sale or distribution of the shares. We can provide no assurance that all or any of the common stock offered will be sold by the selling stockholders named in this prospectus. The estimated costs of this Offering are $21,243.32. We are bearing all costs relating to the registration of the common stock. The selling stockholders, however, will pay any commissions or other fees payable to brokers or dealers in connection with any sale of the common stock. The selling stockholders named in this prospectus must comply with the requirements of the Securities Act and the Exchange Act in the offer and sale of the common stock. The selling stockholders and any broker-dealers who execute sales for the selling stockholders may be deemed to be an "underwriter" within the meaning of the Securities Act in connection with such sales. In particular, during such times as the selling stockholders may be deemed to be engaged in a distribution of the common stock, and therefore be considered to be an underwriter, they must comply with applicable law and may among other things: 12 1. Not engage in any stabilization activities in connection with our common stock; 2. Furnish each broker or dealer through which common stock may be offered, such copies of this prospectus, as amended from time to time, as may be required by such broker or dealer; and 3. Not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities other than as permitted under the Exchange Act. If an underwriter is selected in connection with this Offering, an amendment will be filed to identify the underwriter, disclose the arrangements with the underwriter, and we will file the underwriting agreement as an exhibit to this prospectus. The selling stockholders should be aware that the anti-manipulation provisions of Regulation M under the Exchange Act will apply to purchases and sales of shares of common stock by the selling stockholders, and that there are restrictions on market-making activities by persons engaged in the distribution of the shares. Under Regulation M, the selling stockholders or their agents may not bid for, purchase, or attempt to induce any person to bid for or purchase, shares of our common stock while such selling stockholder is distributing shares covered by this prospectus. Accordingly, the selling stockholders are not permitted to cover short sales by purchasing shares while the distribution is taking place. The selling stockholders are advised that if a particular offer of common stock is to be made on terms constituting a material change from the information set forth above with respect to the Plan of Distribution, then, to the extent required, a post-effective amendment to the accompanying registration statement must be filed with the SEC. 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. Nor was any such person connected with the registrant as a promoter, managing or principal underwriter, voting trustee, director, officer or employee. DESCRIPTION OF BUSINESS OVERVIEW OF THE COMPANY We are a development stage company in the business of developing battery charging solutions for small hand-carried devices. We were incorporated on May 17, 2007, in the State of Nevada. We have never declared bankruptcy, have never been in receivership, and have never been involved in any legal action or proceedings. OBJECTIVES Our product is a man-powered generator for recharging cellular phones and small batteries. We plan to develop a palm-sized device named YoGen, intended to provide a quick recharge for cell phones and other personal electronic devices operating on AA or AAA batteries. Prior to incorporation, our President and Director, Mr. Guy Ofir, started developing a prototype of the man-powered generator. We will focus our efforts on developing a product that will be rugged enough to withstand constant use. It will be shockproof with a suspension system that maintains the unit in an available state of readiness but not in the user's way. We plan to keep the controls of the product as user-friendly as possible with the design of the casing intended to appeal to personal electronic gadget-lovers in general and more specifically to the younger market segment which is the largest consumer of disposable batteries. Our President and Director, Mr. Guy Ofir, purchased the rights to the design and the patent application in a private transaction. Mr. Guy Ofir transferred those rights to the company at no cost to us. We plan to complete the development of the man-powered charger solution for battery powered small hand-carried devices. On August 20, 2007, we filed a patent application (Application No.: 11/841,046) with the United States Patent and Trademark Office. By August 19, 2008, in order to extend the potential patent protection beyond the United States, we needed to file an international patent application via the PCT. Indeed, we made such filing on June 30, 2008. The international filing enables us to file a national patent application in any PCT country until February 19, 2009 and still claim the benefit of the priority date of August 20, 2007. The Company's principal business plan is to complete 13 the development of the prototype and then manufacture and market the product and seek third party entities interested in licensing the rights to manufacture and market the man-powered charger. We are currently engaged in completion of final design of the YoGen before passing the certification procedure required to commence mass production. To enable the power capability and provide minutes of operation without fatigue the YoGen device will generate 20 watts of peak power for each cord pull. It is designed as a very low profile device fitting into the overall size of 45mm x 70mm x 18mm. A novel design uses a combination of a permanent magnet disk rotor and integrated stator coils without an iron core and an attached mechanical drive contribute to the high power and efficiency of the generator. To keep the unit flat, a simple speed multiplication concept is designed instead of complex gear mechanism. Furthermore, the magnitude of the inertia extends the effective generation cycle after the pulling cycle has ceased, thus making for more effective charging. Designed as a belt attachment, it can be operated with either hand, adding further to its ergonomics capabilities by dividing and lowering the required human strength. Our Secretary, Treasurer and Director, Mr. Emanuel Cohen, will be in charge of minimizing the size of our product and complete a series of quality tests. Our product package will consist of a disk generator and the mechanical system to activate it, an intermittent accumulator battery, an electronic system, a strong protective casing and a strap for suspending it from a belt. In the future, if we generate revenue from the sale of our man-powered slim charger, we plan to sell accessories such as adapters for common hand-held electrical devices. TECHNICAL BRIEF:
Controls for safe charging/ Applicable for State of up-scaling Time to recharge 10% Ease of usage internal and for larger Power capacity of typical 1000 Ergonomic external battery application Autonomy Level Capability mA/hr Li-ion Battery design indications laptops - -------------- ---------- -------------------- ------ ----------- ------- Complete autonomy 20 watts max 6-10 minutes Ergonomic Internal and Yes + wall charger from the device internal design for arm external Tandem design of battery pulling. batteries 2 generators charging with common ~ 2 minutes to replace Belt attached indicating shaft will the energy in the to enable LEDS produce up to internal battery by single hand 40 watts the hand generator charging
Cellular phones consume electric power at a rate which fits to cell antennas, and the like. For example, cell phone power consumption for conversation mode (50% talking / 50% listening) near to a cellular antenna is approximately 0.5 watts. Since nominal YoGen output is 5 watts (ten times higher), for every five minutes of cell phone usage under these conditions, our device can replace the energy consumed in 30 seconds. This data only applies to short conversations (typically up to 5 minutes) because during short conversations, a cell phone battery's state-of-charge does not change significantly. For example, a half hour conversation under these conditions shall require about 3 minutes to be brought to its pre-conversation charge state. In all cases, the charge is proportional to incremental levels of effort. The efficiency with which our YoGen device recharges cell phone is significantly dependent on the phone's dedicated built-in charging controller which regulates maximum charging current. For a majority of up-to-date cellular phone models, these controllers permit a charging current supplying about 5 watts, which is the output of our device. A few older cellular phone models permit less of a charge. For those phones, YoGen is equipped with a switch for a "lower power" mode. As indicated before, the YoGen device will generate 20 watts of peak power for each cord pull. 20W is a peak instant power which an internal alternator can generate when the cord is pulled very quickly. It is a pure technical characteristic which was possible to measure only in a laboratory by accessing YoGen's internal points. We have not used any external third party testing in connection with this process. 14 YoGen is based on a novel axial-field synchronous generator (alternator) producing an alternating voltage of frequency and amplitude which are proportional to its rotation speed. Since it is driven by reciprocating pull-release hand movement and is outputting energy during rotation, its voltage and frequency vary considerably through the period. Cellular phone battery controllers require a definite voltage and internal impedance of chargers to allow them to charge the batteries. YoGen includes an electronic converter outputting a stabilized DC voltage falling under load to emulate required impedance. YoGen has 2 modes: "nominal power" (with nominal impedance) and "lower power" (with higher impedance). In its basic format, YoGen includes an internal 400/800 mAh Li-ione buffer (back-up) battery considerably widening the stabilized power output from zero pulling speed (the battery gives power) up to pulling high speed (the battery receives power). The foregoing statistics are based solely on our own limited internal testing and have not been verified by an outside testing agency. We are now working to validate these results in external laboratories. To date, we have produced three prototypes of our device, each with an internal battery but without a "lower power" option. These prototypes have been tested in our laboratory with approximately 15 cellular phone models. Our results confirm the statistics contained above, provided that the pulling process is done correctly. MARKETING STRATEGY We plan to market our product in the United States by establishing a network of wholesalers who can promote our product to the retail market such as 7-Eleven, Wal-Mart and other high-traffic locations and points-of-sale which cater to electronic accessories such as Office Depot, Radio Shack and Circuit City. We plan to offer our product at a comparable price to other re-charging systems, we will stress advantages such as clean energy source, use with a wide array of products and dependability. The end-user should be able to purchase a unit for $30 to $50 depending on packaging and features. Our President and Director, Mr. Guy Ofir, will be in charge of executing the marketing plan. We have budgeted $250,000 for this purpose. THE MARKET OPPORTUNITY Our target market consists of the following market segments: cellular phones, which are our main initial market, laptops and notebooks, mobile hand held computers: PDAs, GPS devices and smart phones and digital still cameras and camcorders., all of which are markets with tremendous growth opportunities. COMPETITION Competition within the re-charger systems industry is intense. Many of our competitors have longer operating histories, greater financial, sales, marketing and technological resources and longer established client relationships than we do. Solutions currently marketed for the problem Easy Energy addresses include several different groups of products, each with its own advantage and disadvantage. Although there are several other ways of recharging batteries for a cell phone, the only ones we know of that are in direct competition are the hand-held human powered chargers. Such competitors include: IST Design Inc.'s Sidewinder hand charger has a crank-operated mechanism. Sidewinder is designed and produced by ElectroHiFi, LLC as the SOS Charger. Sidewinder is claimed to generate 6 minutes of talk time for every 2 minutes of turning at 2 revolutions per second. The unit currently sells for $19.95 to $24.95. Aladdinpower Inc. has a hand-squeeze generator, meant primarily for cell phones, which has been on the market since 2002. Although it claims to be useable with any rechargeable battery, it produces only 1.6 watts, which may not be effective in recharging a cell phone. It is currently priced at around $60. Freeplay Energy plc has developed Freeplay Freecharge, a Freecharge mobile phone charge, available in the market since 2002. This product has ergonomic features, including reverse winding. It claims that talk time of 2-3 minutes (depending on the mobile phone used), or several hours of standby time, can be achieved with 15 45 seconds of winding. Its internal battery is a rechargeable NiMH battery pack, 3.6 Volts, 1300 mAh. It is currently priced at $59.95 per unit. There are other products in the market, but normally, such products are unbranded copies of the above mentioned designs. We seek to differentiate ourselves by providing a slimmer and lighter generator at a competitive price. DESCRIPTION OF PROPERTY Our executive and head office is located at Suite 105 - 5348 Vegas Dr., Las Vegas, NV 89108. Our office is rented on a month to month sub-lease at a cost of $50 per month. We also have an office in Israel at 26 Ga'aton Blvd., Nahariya 22401, which is provided to us free of charge by our directors. We believe that our office space and facilities are sufficient to meet our present needs and do not anticipate any difficulty securing alternative or additional space, as needed, on terms acceptable to us. DESCRIPTION OF SECURITIES COMMON STOCK We are authorized to issue 1,000,000,000 common shares with a par value of $0.00001. As of July 1, 2008 there were 93,186,070 shares of our common stock issued and outstanding. Upon liquidation, dissolution or winding up of the corporation, the holders of common stock are entitled to share ratably in all net assets available for distribution to shareholders after payment to creditors. The common stock is not convertible or redeemable and has no pre-emptive, subscription or conversion rights. There are no conversion, redemption, sinking fund or similar provisions regarding the common stock. Each outstanding share of common stock is entitled to one vote on all matters submitted to a vote of shareholders. There are no cumulative voting rights. Each shareholder is entitled to receive the dividends as may be declared by our directors out of funds legally available for dividends and, in the event of liquidation, to share pro rata in any distribution of our assets after payment of liabilities. Our directors are not obligated to declare a dividend. Any future dividends will be subject to the discretion of our directors and will depend upon, among other things, future earnings, the operating and financial condition of our company, our capital requirements, general business conditions and other pertinent factors. It is not anticipated that dividends will be paid in the foreseeable future. There are no provisions in our articles of incorporation or our bylaws that would delay, defer or prevent a change in control of our company. PREFERRED STOCK We are authorized to issue 50,000,000 shares of preferred stock with a par value of $0.0001. As of July 1, 2008 there were no preferred shares issued and outstanding. WARRANTS As of April 22, 2008, there were outstanding warrants to purchase 3,000,000 shares of our common stock at an exercise price of $0.27 per share, which were issued in conjunction with the Private Placement we undertook in March 10, 2008. These warrants expire on March 10, 2013. As of April 22, 2008, there were outstanding warrants to purchase 1,000,000 shares of our common stock at an exercise price of $0.15 per share, which were issued in conjunction with the Private Placement we undertook in March 3, 2008. These warrants expire on March 3, 2013. As of April 22, 2008, there were outstanding warrants to purchase 11,029,440 shares of our common stock at an exercise price of $0.27 per share, which were issued in conjunction with the Private Placement we undertook in February 28, 2008. These warrants expire on February 28, 2013. 16 TRANSFER AGENT AND REGISTRAR We have appointed the following transfer agent for our shares of common stock: Holladay Stock Transfer, Inc., 2939 North 67th Place, Suite C, Scottsdale, AZ 85251, Telephone: (480) 481-3940; Facsimile: (480) 481-3941. The transfer agent is responsible for all record-keeping and administrative functions in connection with the common shares. LEGAL PROCEEDINGS We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, Officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest. MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS Our stock is listed for quotation on the OTC Bulletin Board under the trading symbol "ESYE.OB". Our common shares initially began trading on the OTC Bulletin Board on December 26, 2007. The following table sets forth, for the periods indicated, the high and low closing prices for each quarter within the last fiscal year ended December 31, 2007 and subsequent interim period as reported by the quotation service operated by the OTC Bulletin Board. All quotations for the OTC Bulletin Board reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions. Year 2007 High Low --------- ---- --- Fourth Quarter $0.30 $0.15 Year 2008 High Low --------- ---- --- First Quarter $0.30 $0.15 HOLDERS On July 1 2008, the closing price of our common stock as reported on the OTC Bulletin Board was $0.30 per share. On April 22, 2008, we had approximately 62 holders of records of common stock and 93,186,070 shares of our common stock were issued and outstanding, plus an additional 15,029,440 shares issuable upon the exercise of outstanding warrants. Some of our shares are held in brokers' accounts, so we are unable to give an accurate statement of the number of shareholders. DIVIDEND POLICY We have not declared or paid any cash dividends since inception. We do not intend to pay any cash dividends in the foreseeable future. Although there are no restrictions that limit our ability to pay dividends on our common stock, we intend to retain future earnings for use in our operations and the expansion of our business. Our future dividend policy will be determined from time to time by our Board of Directors. To the extent that we require additional funding our funding sources may prohibit the payment of a dividend. Because we do not intend to declare dividends, any gain on an investment in our company will need to come through an increase in the stock's price, which may never happen. EQUITY COMPENSATION PLAN INFORMATION As of July 1, 2008 and as of December 31, 2007, the end of our most recently completed fiscal year, our company did not have any equity compensation plan. 17 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION THE FOLLOWING DISCUSSION OF OUR PLAN OF OPERATION SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND RELATED NOTES THAT APPEAR ELSEWHERE IN THIS PROSPECTUS. THIS DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS, INCLUDING THOSE DISCUSSED IN "RISK FACTORS" BEGINNING ON PAGE 2 OF THIS PROSPECTUS. ALL FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE. WE UNDERTAKE NO OBLIGATION TO UPDATE SUCH STATEMENTS TO REFLECT EVENTS THAT OCCUR OR CIRCUMSTANCES THAT EXIST AFTER THE DATE ON WHICH THEY ARE MADE. OVERVIEW We are a development stage company with limited operations and no revenues from our business operations. Our auditors have issued a going concern opinion. This means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next twelve months. We do not anticipate that we will generate significant revenues until we have completed the development and manufacturing of our product. We plan to develop a man-powered charger solution for battery powered small hand-carried devices. On August 20, 2007 we filed a patent application (Application No.: 11/841,046) with the United States Patent and Trademark Office. Prior to our incorporation, Mr. Guy Ofir, Our President and Director started developing a prototype of the man-powered generator. This prototype is a "successor" of several practically validated approaches suggested by its inventors as outlined below: - Charger shall be powerful enough to provide a significantly higher talk-to-charge time ratio (current models operate at about 1:1); - Charger shall include a converter providing both utilization of input mechanical energy through the entire speed range and stabilized electric output; - Charger shall have an option to include a back-up internal battery; - Charger size shall be not greater than those of today's cell-phones and should be as thin as possible; and - Mechanical input shall be of a reciprocating pull-release type since such a hand application allows for extended use without tiredness. This product is based on a novel dedicated application of the unique high power-density planar alternator technology developed and tested by one of the inventors. This technology allows for implementation of these principles since and makes it possible to provide an extremely slim and unique compact package containing all charger components, which include: mechanical transmission electronic converter, back-up battery and the alternator itself. The technology of the proposed product was invented by Alexander Sromin and Michael Fridhendler. Mr. Sromin is an alumnus of the Academy for Aviation & Space Instruments in St. Petersburg, Russia with 22 years of research and development experience related to a wide range of electric machines and electromechanical systems. His professional scope covers compact permanent magnet motors, actuators (including linear, rotating, reciprocating, multi-axis, etc.) and generators in the range from MEMS up to 100 KW. He is an author of more than 30 articles and inventor of 10 inventions. Mr. Friedhendler graduated from The Technion University in Haifa, Israel. He has 25 years of experience in multi-disciplinary hi-tech ventures promotion and technological support. He succeeded in numerous application projects in the field of mobile and internet GPS and J2ME software projects among others. His expertise relates to electronics, communications, cellular technology, internet and video data transfer. Both Mr. Sromin and Mr. Fridhendler worked for Pipera Technologies Ltd. ("Pipera"), a company wholly owned and fully funded by our president and director, Mr. Ofir, and during the course of their work, developed the technology of the proposed product. Mr. Sromin and Mr. Fridhendler have been assisted by Mr. Roman Lanzet that serves as production manager at Pipera. Mr. Sromin, Mr. Fridhendler and Mr. Lanzet assigned their rights in the technology of the product to the Company for no consideration pursuant to the terms of the assignment agreement dated August 15, 2007 filed by the Company as exhibit 10.3 to the Company's registration statement on Form SB-2 filed on October 24, 2007. 18 On January 29, 2008 we announced the completion of the fully working prototype of the man-powered charger solution for battery powered small hand-carried devices. Such prototype is designed for testing the principles behind the product. The Company's principal business plan is to complete the manufacturing design, mainly minimizing the product and improving human engineering of the product and then manufacture and market the product and / or seek third party entities interested in licensing the rights to manufacture and market our product. We estimate that we could begin the manufacturing of the products during the third quarter of 2008. We have selected a contractor to assist us with this process. We estimate the costs to be incurred by the time we have an operating manufacturing line ready for mass production to be at approximately $400,000. Our business objectives are: - To complete the design of our product. - To engage third parties firm(s) to manufacture the components of our product. - To set up an assembly line. - To be a leading provider of man-powered charger. - To execute our marketing plan. Our goals over the next 12 months are: - Develop and manufacture a first product suited to cellular phone use. - Explore potential distributors for our product. ESTIMATED EXPENSES FOR THE NEXT TWELVE MONTH PERIOD:
Anticipated Target Date Costs For Completion ----- -------------- PHASE I - COMPLETING THE DEVELOPMENT $100,000* Mar, 2008 - >> R&D activities related to development of our product. May, 2008 >> Minimizing the size of our product. >> Protection of intellectual property rights. PHASE II - MANUFACTURE A PROTOTYPE $300,000** Apr, 2008 - >> Refinement of working prototypes. Jun, 2008 >> Seeking suppliers for the components for our product. >> Set up an assembly line. PHASE III - MARKETING PLAN $250,000 Jul, 2008 - >> Full product release. Apr, 2009 >> Development of marketing plan aimed at specified markets. TOTAL $650,000 12 MONTHS
- ---------- * Which is included in the $200,000 total of Product Development on the Statement of Operations. ** Of which we prepaid $100,000 and is included in the $200,000 total of Product Development on the Statement of Operations. In addition to the costs outlined above, we anticipate that we will incur over the next twelve months the following expenses: Planned Expenditures Over Category The Next Twelve Months -------- ---------------------- Consultant Compensation $100,000*** Legal Fees $ 80,000 Accounting Fees $ 25,000 Auditor's Fees $ 25,000 General and administrative expenses $ 20,000 Fees related to our patent application. $ 22,000 TOTAL $272,000 - ---------- *** Of which we prepaid $50,000 and included in the balance sheet under Prepaid Expenses. 19 RESULTS OF OPERATIONS During the three months ended March 31, 2008 the company incurred operating expenses of $406,972 which include $200,000 of product development costs, $202,497 in professional fees related to accounting and legal and $4,475 of general and administrative expenses. These operating costs were offset by $1,260 of interest income. Net Loss Our company incurred a loss of $405,712 for the period ended March 31, 2008, resulting from $371,942 of cash used in operating activities offset by an increase in prepaid expenses of $50,000 from the period ended December 31, 2007. LIQUIDITY AND CAPITAL RESOURCES To date, we have had negative cash flows from operations and we have been dependent on sales of our equity securities and debt financing to meet our cash requirements. We expect this situation to continue for the foreseeable future. We anticipate that we will have negative cash flows from operations in the next twelve month period. As of March 31, 2008, we had cash of $725,747, representing a net increase in cash of $653,059 since December 31, 2007. Cash generated by financing activities during the three months ended March 31, 2008 amounted to $1,025,001 resulting from the sale of stock in private placements during February and March of 2008. Cash used in operations amounted to $371,942 represented by a loss of $405,712 offset by an increase in prepaid expenses from the previous balance sheet of $50,000 and non-cash adjustments for contributed capital and common stocks and warrants issued for services totaling $83,770. As indicated above, our estimated working capital requirements and projected operating expenses for the next twelve month period total $992,000, of which $250,000 has been prepaid. We anticipate that such funds will not be sufficient to pay our estimated expenses for the next twelve month period. We intend to fulfill any additional cash requirement through the sale of either equity or debt. Historically we have financed our operation through the sale of equity. On August 27, 2007, we closed a private placement for 30,333,190 common shares at a price of $0.003 per share, or an aggregate of $91,000. On February 28, 2008, we commenced a private placement offering of 367,647.6 units, each unit being offered for $1.70, for aggregate gross proceeds of $625,001. Each unit consisted of (i) ten common stock shares, (ii) thirty Class A Warrant. Each Class A Warrant entitles the holder thereof to purchase one share of common stock at an exercise price of $0.27 per share, expiring five years from the date of purchase. This offering was made to non-U.S. persons in offshore transactions pursuant to the exemption from registration provided by Regulation S of the Securities Act. We agreed to register the shares and warrants issued in this transaction on a registration statement. On that same date, we also sold and issued 208,333 common stock shares under Rule 903 of Regulation S of the Act to an accredited investor for the aggregate purchase price of US $50,000, or a purchase price of US $0.24 per share. On March 10, 2008, we entered into a Securities Purchase Agreement and a Registration Rights Agreement with Tailor Made Capital, Ltd. ("TMC") relating to the issuance to TMC of 882,353 shares of our common stock, par value $0.0001 per share, and a warrant to purchase up to 3,000,000 shares of the Company's common stock at a price of $0.27 per share (the "Warrant"). The Warrant shall be in effect for five years from the date that the Company's common stock is initially listed or quoted for trading on a trading market. The Securities Purchase Agreement further provided that, at the Company's demand, TMC will purchase up to an additional $1,000,000 of shares of the Company's common stock commencing immediately after the date that the shelf registration of the Company's shares that are subject to the Securities Purchase Agreement is declared effective (the "Put").We agreed to file a registration statement to register all of the shares of common stock to be issued pursuant to the Securities Purchase Agreement, including those shares issuable upon the exercise of the Warrant and the Put. On March 25, 2008, we entered into a subscription agreement under which we undertook to issue 2,000,000 shares for a cash payment of $50,000 by an "accredited investor" as defined in Rule 501 of Regulation D under the Securities Act of 1933, and, in consideration for services provided, warrants to purchase 1,000,000 shares of the Company's common stock at an exercise price of $0.10 for a period of three years. On March 27, 2008, (pursuant to an agreement dated January 16, 2008) we issued 4,285,714 common stock shares to an "accredited investor" for the aggregate purchase price of US $300,000, purchase price of $0.07 per share. 20 We have used our stock as form of consideration for certain services provided to us and intend to continue to do so in selected contracts from time to time. There are no assurances that we will be able to obtain funds required for our continued operation. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain additional financing on a timely basis, we will not be able to meet our other obligations as they become due and we will be forced to scale down or perhaps even cease the operation of our business. Given that we are a development stage company and have not generated any revenues to date, our cash flow projections are subject to numerous contingencies and risk factors beyond our control, including market acceptance of our products, competition from well-funded competitors, and our ability to manage our expected growth. We can offer no assurance that our company will generate cash flow sufficient to meet our cash flow projections or that our expenses will not exceed our projections. If our expenses exceed estimates, we will require additional monies during the next twelve months to execute our business plan. There is substantial doubt about our ability to continue as a going concern as the continuation of our business is dependent upon obtaining further long-term financing, successful development of our technologies into a marketable product and successful and sufficient market acceptance of our products once developed and, finally, achieving a profitable level of operations. The issuance of additional equity securities by us could result in significant dilution of the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments. GOING CONCERN Due to the uncertainty of our ability to meet current operating and capital expenses, our independent auditors included an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern in their audit report for the period ended March 31, 2008. PURCHASE OF SIGNIFICANT EQUIPMENT We do not expect to purchase any significant equipment over the twelve months. EMPLOYEES Currently our only employees are our directors and officers. We do not expect any other material changes in the number of employees over the next 12 months. OFF-BALANCE SHEET ARRANGEMENTS Our company does not have any off-balance sheet arrangements, including any outstanding derivative financial statements, off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. Our company does not engage in trading activities involving non-exchange traded contracts. APPLICATION OF CRITICAL ACCOUNTING POLICIES Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles used in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financials. ACCOUNTING BASIS These financial statements are prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America. 21 EARNINGS PER SHARE In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share", which specifies the computation, presentation and disclosure requirements for earnings (loss) per share for entities with publicly held common stock. SFAS No. 128 supersedes the provisions of APB No. 15, and requires the presentation of basic earnings (loss) per share and diluted earnings (loss) per share. The Company has adopted the provisions of SFAS No. 128 effective its inception. The basic earnings (loss) per share is calculated by dividing the Company's net income available to common shareholders by the weighted average number of common shares during the year. The diluted earnings (loss) per share is calculated by dividing the Company's net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted as of the first of the year for any potentially dilutive debt or equity. DIVIDENDS The Company has not yet adopted any policy regarding payment of dividends. No dividends have been paid during the periods shown. CASH EQUIVALENTS The Company considers all highly liquid investments with maturity of three months or less when purchased to be cash equivalents. INCOME TAXES The Company provides for income taxes under Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" and FIN 48. SFAS No. 109 requires the use of an asset and liability approach in accounting for income taxes. SFAS No. 109 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. No provision for income taxes is included in the statement due to its immaterial amount, net of the allowance account, based on the likelihood of the Company to utilize the loss carry-forward. 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. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE We engaged the firm of Moore & Associates Chartered to audit our financial statements for the period ended March 31, 2008. There has been no change in the accountants and no disagreements with Moore & Associates Chartered, on any matter of accounting principles or practices, financial statement disclosure, or auditing scope procedure. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS All directors of our company hold office until the next annual meeting of the shareholders or until their successors have been elected and qualified. The executive officers of our company are appointed by our board of directors and hold office until their death, resignation or removal from office. Our directors and executive officers, their ages, positions held, and duration as such, are as follows: 22 Position Held Date First Elected Name with the Company Age or Appointed ---- ---------------- --- ------------ Guy Ofir President and Director 35 May 17, 2007 Emanuel Cohen Secretary, Treasurer and Director 58 May 17, 2007 BUSINESS EXPERIENCE: The following is a brief account of the education and business experience of each director and executive officer during at least the past five years, indicating each person's business experience, principal occupation during the period, and the name and principal business of the organization by which they were employed. MR. GUY OFIR Mr. Guy Ofir has been serving as our President and a member of our Board of Directors since May 17, 2007. The term of his office is for one year and is renewable on an annual basis. Mr. Ofir is an attorney and owns a law firm in Israel which specializes in corporate and international law. His law firm employs several lawyers and represents over 100 companies. In addition to his work as a lawyer, he also manages investments and companies in Romania. His main company (Guy Ofir & Co. SRL) deals with land and properties in Bucharest. MR. EMANUEL COHEN Mr. Cohen has been serving as our Secretary, Treasurer and a member of our Board of Directors since May 17, 2007. The term of his office is for one year and is renewable on an annual basis. Mr Cohen is a major shareholder and a director of several privately owned companies in Israel & in the United States. His specialialty includes land, properties & fabrics. (Amitex & Emday Ltd- one of the biggest Israeli fabric companies ). He is also a shareholder in private companies which hold land & properties in Israel. - (Lev Hazom Ltd), (Hafia Zamin Ltd), (Leved Adi Properties Ltd) & (Mashko Ltd). In addition to his activities in Europe & Israel, he is also a shareholder in the following companies which hold land & properties in the USA .- (Echo investments LLC), (Bilou Capital investment LLC) & (Eden Associated LLC). Previously he was an officer in Israel's largest bank, Bank of Israel (Israel Hapoalim Bank). FAMILY RELATIONSHIPS: There are no family relationships among our directors or executive officers. INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS Our directors, executive officer and control person have not been involved in any of the following events during the past five years: 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; or 23 4. being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated. COMMITTEES OF THE BOARD: All proceedings of the board of directors for the year ended December 31, 2007 were conducted by resolutions consented to in writing by board of directors and filed with the minutes of the proceedings of the director. Our company currently does not have nominating, compensation or audit committees or committees performing similar functions nor does our company have a written nominating, compensation or audit committee charter. Our officers and directors believe that it is not necessary to have such committees, at this time, because the functions of such committees can be adequately performed by the board of directors. Our company does not have any defined policy or procedural requirements for shareholders to submit recommendations or nominations for directors. The board of directors believes that, given the stage of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. Our company does not currently have any specific or minimum criteria for the election of nominees to the board of directors and we do not have any specific process or procedure for evaluating such nominees. Our board of directors, as the case may be, will assess all candidates, whether submitted by management or shareholders, and make recommendations for election or appointment. A shareholder who wishes to communicate with our board of directors may do so by directing a written request addressed to our President and director, Guy Ofir, at the address appearing on the first page of this prospectus. AUDIT COMMITTEE FINANCIAL EXPERT Our board of directors has determined that we do not have a board member that qualifies as an "audit committee financial expert" as defined in Item 401(e) of Regulation S-B, nor do we have a Board member that qualifies as "independent" as the term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as amended, and as defined by Rule 4200(a)(14) of the NASD Rules. We believe that our board of directors is capable of analysing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. The board of directors of our company does not believe that it is necessary to have an audit committee because management believes that the functions of an audit committee can be adequately performed by our board of directors. In addition, we believe that retaining an independent director who would qualify as an "audit committee financial expert" would be overly costly and burdensome and is not warranted in our circumstances given the stage of our development and the fact that we have not generated any positive cash flows from operations to date. CONFLICT OF INTEREST None of our officers or directors is subject to a conflict of interest. EXECUTIVE COMPENSATION No executive officer of our company received an annual salary and bonus that exceeded $100,000 during the period from May 17, 2007 (date of inception) to March 31, 2008. 24
Non-Equity Nonqualified Incentive Deferred All Name and Plan Compen- Other Principal Stock Option Compen- sation Compen- Position Year(3) Salary($) Bonus($) Awards($) Awards($) sation($) Earnings($) sation($) Totals($) -------- ------- --------- -------- --------- --------- --------- ----------- --------- --------- Guy Ofir 2007 Nil Nil Nil Nil Nil Nil Nil Nil President and 2008 Nil Nil Nil Nil Nil Nil Nil Nil director(1) Emanuel Cohen 2007 Nil Nil Nil Nil Nil Nil Nil Nil Secretary, 2008 Nil Nil Nil Nil Nil Nil Nil Nil Treasurer and director(2)
- ---------- (1) Guy Ofir became our President and a director of our company, on May 17, 2007. (2) Emanuel Cohen became our Secretary, Treasurer and a director of our company, on May 17, 2007. (3) We were incorporated on May 17, 2007. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS Since May 17, 2007 (date of inception) to our the period ended March 31, 2008, we have not granted any stock options or stock appreciation rights to any of our directors or executive officers. COMPENSATION OF DIRECTORS There are no arrangements pursuant to which directors are or will be compensated in the future for any services provided as a director, unless and until we begin to realize revenues and become profitable in our business operations. EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS We have not entered into any employment agreement or consulting agreements with our directors and executive officers. There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. Our directors and executive officers may receive stock options at the discretion of our board of directors in the future. We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of our board of directors. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth, as of April 22, 2008 certain information with respect to the beneficial ownership of our common stock by each shareholder known by us to be the beneficial owner of more than 5% of our common stock and by our current directors and executive officers. The shareholder has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common stock, except as otherwise indicated. 25
Name and Address Amount and Nature of Percent of of Beneficial Owner Title of Class(1) Beneficial Ownership Class(2) - ------------------- ----------------- -------------------- -------- Guy Ofir Common Shares 20,000,000 21.5% 40 Baz St., Karmiel 20100 Direct Israel. Emanuel Cohen Common Shares 20,000,000 21.5% 51 Bilu St., Direct Raanana, Israel. Shamir Benita Common Shares 5,000,000 5.4% 8 Nafetali Ben Eferaim St. Direct Dira 21 Rehovot, Israel. Albert Glinoviecki Common Shares 5,000,000 5.4% Rehov Dov Fromer 19 Direct Kiryat Shemuel Israel Meir Duke(3) Common Shares and 7,285,714 7.8% 12300 Highgrove Ct, Common Shares Direct Raistertown, MD Warrants USA Meitav Entities and TMC(4), Common Shares and 4 Berkowitz St. Common Shares Tel Aviv, Israel Warrants 18,588,273 9.99%(5) Directors and Officers Common Shares 40,000,000 43% as a group (2 persons)
- ---------- (1) Beneficial ownership is determined in accordance with SEC rules and generally includes voting or investment power with respect to securities. Shares of common stock subject to options, warrants and convertible preferred stock currently exercisable or convertible, or exercisable or convertible within sixty (60) days, would be counted as outstanding for computing the percentage of the person holding such options or warrants but not counted as outstanding for computing the percentage of any other person. (2) Based on 93,186,070 shares issued and outstanding as of July 1, 2008. (3) Includes 1,000,000 shares issuable upon exercise of outstanding common stock purchase warrants. This information is based solely on Schedule 13D filed by the beneficial owner on April 16, 2008, describing the holdings of the beneficial owner as of April 7, 2008. (4) An entity controlled by Meitav Investment House Ltd, ("Meitav") which as reported on Schedule 13G filed on March 19, 2008, is beneficially owned by Messrs. Zvi Stepak and Shlomo Simanovsky through intermediary entities. Messrs. Zvi Stepak and Shlomo Simanovsky may exercise shared voting and investment powers with respect to all shares owned by Meitav and the Meitav Entities. Includes 14,029,440 shares issuable upon exercise of outstanding common stock purchase warrants. This information is based solely on Schedule 13G filed by the benecial owner on March 19, 2008, describing the holdings of the beneficial owner as of March 10, 2008. (5) In an appendix to the warrant issued by the Company to the Meitav Entities and TMC the following exercise limitations have been agreed to: the company shall not effect the exercise of the warrant and the holder shall not have the right to exercise any portion of the warrant to the extent that after giving effect to such issuance after exercise, such holder along with its affiliates (which include all of Meitav Entities and TMC) shall have more than 9.99% of the number of shares of common stock outstanding of the Company. This provision however, may be waived by the holder at its election upon not less than 61 days' notice to the Company. 26 CHANGES IN CONTROL We are unaware of any contract, or other arrangement or provision of our Articles of Incorporation or Bylaws, the operation of which may at a subsequent date result in a change of control of our company. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Except as described below, no director, executive officer, principal shareholder holding at least 5% of our common shares, or any family member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction, during the period ended March 31, 2008, in which the amount involved in the transaction exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at the year end for the last three completed fiscal years. On May 17, 2007 Mr. Ofir and Cohen each purchased 20,000,000 shares of our common stock for $0.00005 per share, or $1,000 each, for an aggregate of $2,000. The promoters of our company are Guy Ofir, our President and director and Emanuel Cohen, our Secretary, Treasurer and director. We have determined that neither Mr. Guy Ofir nor Mr. Emanuel Cohen are independent directors, as that term is used in Rule 4200(a)(15) of the Rules of the Financial Industry Regulatory Authority. During the period ended March 31, 2008, the Company paid $200,000 in product development costs to a company wholly owned by the president of the Company and its director, Mr. Ofir. The Company's directors provide office space free of charge. The Company has recorded the estimated fair value of the office space of $1,000 per month as a contribution to capital. DISCLOSURE OF SEC POSITION OF INDEMNIFICATION FOR SECURITIES ACT LIABILITIES Our Bylaws provide that we will indemnify an officer, director, or former officer or director, to the full extent permitted by law. Insofar as indemnification for liabilities arising under the Securities Act 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 SEC such indemnification is against public policy as expressed in the Securities Act, 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 one of our directors, officers, or controlling persons in the successful defense of any action, suit or proceeding, is asserted by one of our directors, officers, or controlling persons 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 is against public policy as expressed in the Securities Act, and we will be governed by the final adjudication of such issue. 27 EXPERTS The financial statements of Easy Energy included in this registration statement have been audited by Moore & Associates Chartered, to the extent and for the period set forth in their report (which contains an explanatory paragraph regarding our company's ability to continue as a going concern) appearing elsewhere 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. Zysman, Aharoni, Gayer & Co./Sullivan & Worcester LLP, One Post Office Square, Boston, Massachusetts 02110 has provided an opinion on the validity of the shares of our common stock that are the subject of this prospectus. WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any reports, statements or other information the Company files at the SEC's public reference room at 100 F Street, NE, N.W., Washington, D.C., 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference room. Our SEC filings are also available to the public from commercial document retrieval services and through the web site maintained by the SEC at www.sec.gov. As allowed by SEC rules, this prospectus does not contain all the information you can find in the registration statement or the exhibits filed with or incorporated by reference into the registration statement. Whenever a reference is made in this prospectus to an agreement or other document of the Company, be aware that such reference is not necessarily complete and that you should refer to the exhibits that are filed with or incorporated by reference into the registration statement for a copy of the agreement or other document. You may review a copy of the registration statement at the SEC's public reference room in Washington, D.C., as well as through the web site maintained by the SEC at www.sec.gov. You should read this prospectus and any prospectus supplement together with the registration statement and the exhibits filed with or incorporated by reference into the registration statement. The information contained in this prospectus speaks only as of its date unless the information specifically indicates that another date applies. We have not authorized any person to give any information or to make any representations that differ from, or add to, the information discussed in this prospectus. Therefore, if anyone gives you different or additional information, you should not rely on it. We maintain a website on the Internet at www.easy-energy.biz. Our website and the information included on our website is not part of this prospectus. We have filed with the Securities and Exchange Commission a registration statement on Form S-1, under the Securities Act with respect to the securities offered under this prospectus. This prospectus, which forms a part of that registration statement, does not contain all information included in the registration statement. Certain information is omitted and you should refer to the registration statement and its exhibits. Our filings and the registration statement can also be reviewed by accessing the SEC's website at http://www.sec.gov. NO FINDER, DEALER, SALES PERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY OUR COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. 28 RESTATED FINANCIAL STATEMENTS MARCH 31, 2008 INDEX Our restated financial statements are stated in United States Dollars (US$) and are prepared in conformity with generally accepted accounting principles of the United States of America. The following audited restated financial statements pertaining to Easy Energy Inc. are filed as part of this registration statement: Page Number ------ Restated Financial Statements Report of Independent Registered Public Accounting Firm F-1 Restated Balance Sheets F-2 Restated Statements of Operations F-3 Restated Statement of Stockholders' Equity F-4 Restated Statements of Cash Flow F-5 Notes to audited Restated Financial Statements F-6 29 MOORE & ASSOCIATES, CHARTERED ACCOUNTANTS AND ADVISORS PCAOB REGISTERED REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors Easy Energy, Inc. (A Development Stage Company) We have audited the accompanying restated balance sheets of Easy Energy, Inc. (A Development Stage Company) as of March 31, 2008 and December 31, 2007, and the related restated statements of operations, stockholders' equity and cash flows for the three months ended March 31, 2008, since inception on May 17, 2007 through December 31, 2007 and since inception on May 17, 2007 through March 31, 2008. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the restated financial statements referred to above present fairly, in all material respects, the financial position of Easy Energy, Inc. (A Development Stage Company) as of March 31, 2008 and December 31, 2007, and the related restated statements of operations, stockholders' equity and cash flows for the three months ended March 31, 2008, since inception on May 17, 2007 through December 31, 2007 and since inception on May 17, 2007 through March 31, 2008, 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 net losses of $397,544, which raises substantial doubt about its ability to continue as a going concern. Management's plans concerning these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Moore & Associates, Chartered - ---------------------------------------- Moore & Associates Chartered Las Vegas, Nevada July 3, 2008 2675 S. Jones Blvd. Suite 109, Las Vegas, NV 89146 (702) 253-7499 FAX (702) 253-7501 F-1 Easy Energy, Inc. (A Development Stage Company) Restated Balance Sheets March 31, 2008
March 31, December 31, 2008 2007 ----------- ----------- ASSETS Current: Cash and bank accounts $ 725,747 $ 72,688 Prepaid expenses 50,000 -- ----------- ----------- Total current assets 775,747 72,688 ----------- ----------- Total Assets $ 775,747 $ 72,688 =========== =========== LIABILITIES Current: Due to director $ 300 $ 300 ----------- ----------- 300 300 ----------- ----------- STOCKHOLDERS` EQUITY Preferred stock authorized - 50,000,000 shares with a par value of $0.0001 Common stock authorized - 1,000,000,000 shares with a par value of $0.00001 None issued or outstanding Common stock issued and outstanding - 93,186,070 common shares (December 31, 2007: 80,333,190) 932 803 Additional paid in capital 1,527,104 101,697 Prepaid expenses - stock related (105,000) -- Deferred offering costs - stock related (211,765) -- Deficit accumulated during the development stage (435,824) (30,112) ----------- ----------- 775,447 72,388 ----------- ----------- Total Liabilities and Stockholders' Equity $ 775,747 $ 72,688 =========== ===========
The accompanying notes are an integral part of these financial statements F-2 Easy Energy, Inc. (A Development Stage Company) Restated Statements of Operations For the three months ended March 31, 2008 and the period ended May 17, 2007 (Date of inception) to March 31, 2008
May 17, 2007 May 17, 2007 Three Months (Inception) to (Inception) to March 31, December 31, March 31, 2008 2007 2008 ----------- ----------- ----------- Revenue $ -- $ -- $ -- Expenses General and Administrative 4,475 29,780 34,255 Filing Fee -- 1,000 1,000 Product Development 200,000 -- 200,000 Professional fees 202,497 -- 202,497 ----------- ----------- ----------- Total Expenses 406,972 30,780 437,752 ----------- ----------- ----------- Other Income Interest income 1,260 668 1,928 Total Other Income 1,260 668 1,928 ----------- ----------- ----------- Net loss before income taxes (405,712) (30,112) (435,824) Provision for Income Taxes -- -- -- ----------- ----------- ----------- Net loss for the period $ (405,712) $ (30,112) $ (435,824) =========== =========== =========== Basic and Diluted (Loss) per Share a a a ----------- ----------- ----------- Weighted Average Number of Shares 82,381,390 50,586,601 72,169,343 ----------- ----------- -----------
- ---------- (a) = Less than $0.01 per share The accompanying notes are an integral part of these financial statements F-3 Easy Energy, Inc. (A Development Stage Company) Restated Statements of Cash Flows For the three months ended March 31, 2008 the period ended May 17, 2007 (Date of inception) to March 31, 2008
May 17, 2007 May 17, 2007 Three Months (Inception) to (Inception) to March 31, December 31, March 31, 2008 2007 2008 ----------- ----------- ----------- Operating Activities Net loss $ (405,712) $ (30,112) $ (435,824) Adjustments to reconcile net loss to cash used in operating activities: Contributed capital 3,000 7,500 10,500 Common stock and warrants issued for services 80,770 -- 80,770 Changes in operating assets and liabilities: (Increase) in prepaid expenses (50,000) -- (50,000) ----------- ----------- ----------- Net Cash (Used) by Operating Activities (371,942) (22,612) (394,554) ----------- ----------- ----------- Financing Activities Cash from sale of stock 1,025,001 95,000 1,120,001 Due to shareholder -- 300 300 ----------- ----------- ----------- Cash Provided by Financing Activities 1,025,001 95,300 1,120,301 ----------- ----------- ----------- Net Increase in Cash 653,059 72,688 725,747 Cash, Beginning of Period 72,688 -- -- ----------- ----------- ----------- Cash, End of Period $ 725,747 $ 72,688 $ 725,747 =========== =========== =========== Non-cash activities: Stock issued for services $ 3,000 $ -- $ 3,000 Supplemental Information: Interest Paid $ -- $ -- $ -- Income Taxes Paid $ -- $ -- $ --
The accompanying notes are an integral part of these financial statements F-4 Easy Energy, Inc. (A Development Stage Company) Restated Statements of Stockholders` Equity March 31, 2008
Common Shares Prepaid ------------------- Additional Expenses Issued Paid In Stock Shares Amount Capital Related ------ ------ ------- ------- Balance, May 17, 2007 (date of inception) -- $ -- $ -- $ -- Issued to founders on May 17, 2007 @ $0.00005 40,000,000 400 1,600 -- Private placement May 17, 2007 @ $0.0002 10,000,000 100 1,900 -- Private placement August 17, 2007 @ $0.003 30,333,190 303 90,697 -- Contributed capital -- -- 7,500 -- Net loss -- -- -- -- ---------- ----- ---------- ---------- Balance, December 31, 2007 80,333,190 803 101,697 -- Private placement February 28, 2008 @ $0.17 3,676,480 37 624,964 -- Private placement February 28, 2008 @ $0.24 208,333 2 49,998 -- Shares for services March 3, 2008 @$0.24 300,000 3 71,997 -- Shares for services March 10, 2008 @ $0.24 882,353 9 211,756 -- Private placement March 25, 2008 @ $0.025 2,000,000 20 49,980 -- Private placement March 27, 2008 @ $0.07 4,285,714 43 299,957 -- Shares for services March 27, 2008 @ $0.07 1,500,000 15 104,985 (105,000) Contributed capital -- -- 3,000 -- Fair value of warrants granted -- -- 8,770 -- Net loss -- -- -- -- ---------- ----- ---------- ---------- BALANCE, MARCH 31, 2008 93,186,070 $ 932 $1,527,104 $ (105,000) ========== ===== ========== ========== Deferred Offering Costs Deficit Total ----- ------- ----- Balance, May 17, 2007 (date of inception) $ -- $ -- $ -- Issued to founders on May 17, 2007 @ $0.00005 -- -- 2,000 Private placement May 17, 2007 @ $0.0002 -- -- 2,000 Private placement August 17, 2007 @ $0.003 -- -- 91,000 Contributed capital -- -- 7,500 Net loss -- (30,112) (30,112) ---------- ---------- --------- Balance, December 31, 2007 -- (30,112) 72,388 Private placement February 28, 2008 @ $0.17 -- -- 625,001 Private placement February 28, 2008 @ $0.24 -- -- 50,000 Shares for services March 3, 2008 @$0.24 -- -- 72,000 Shares for services March 10, 2008 @ $0.24 (211,765) -- -- Private placement March 25, 2008 @ $0.025 -- -- 50,000 Private placement March 27, 2008 @ $0.07 -- -- 300,000 Shares for services March 27, 2008 @ $0.07 -- -- -- Contributed capital -- -- 3,000 Fair value of warrants granted -- -- 8,770 Net loss -- (405,712) (405,712) ---------- ---------- --------- BALANCE, MARCH 31, 2008 $ (211,765) $ (435,824) $ 775,447 ========== ========== =========
The accompanying notes are an integral part of these financial statements F-5 Easy Energy, Inc. (A Development Stage Company) Notes to Restated Financial Statements March 31, 2008 NOTE 1 - NATURE OF OPERATIONS The Company was originally incorporated under the laws of the state of Nevada on May 17, 2007. The Company has limited operations and in accordance with SFAS #7, is considered a development stage company, and has had no revenues from operations to date. NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES ACCOUNTING BASIS These financial statements are prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America. EARNINGS PER SHARE In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share", which specifies the computation, presentation and disclosure requirements for earnings (loss) per share for entities with publicly held common stock. SFAS No. 128 supersedes the provisions of APB No. 15, and requires the presentation of basic earnings (loss) per share and diluted earnings (loss) per share. The Company has adopted the provisions of SFAS No. 128 effective its inception. The basic earnings (loss) per share is calculated by dividing the Company's net income available to common shareholders by the weighted average number of common shares during the year. The diluted earnings (loss) per share is calculated by dividing the Company's net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted as of the first of the year for any potentially dilutive debt or equity. DIVIDENDS The Company has not yet adopted any policy regarding payment of dividends. No dividends have been paid during the periods shown. CASH EQUIVALENTS The Company considers all highly liquid investments with maturity of three months or less when purchased to be cash equivalents. INCOME TAXES The Company provides for income taxes under Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" and FIN 48. SFAS No. 109 requires the use of an asset and liability approach in accounting for income taxes. SFAS No. 109 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. No provision for income taxes is included in the statement due to its immaterial amount, net of the allowance account, based on the likelihood of the Company to utilize the loss carry-forward. F-6 Easy Energy, Inc. (A Development Stage Company) Notes to Restated Financial Statements March 31, 2008 NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 that the Company will continue as a going concern. The Company has net losses for the period from inception to March 31, 2008 of $435,824 and the Company has not established revenue sufficient to cover its operating expenses. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Managements' plan is to complete the design of the Company's product, to engage third parties firms to manufacture the components of the product, develop and manufacture a first product suited to cellular phone use and explore potential distributors for our product. The Company had approximately $725,000 on hand as of March 31, 2008, management anticipates that such funds will not be sufficient to pay our estimated expenses for the next twelve month period. Management expects to start generating revenue within 8-10 months but has no assurance that such revenues shall be generated and in what amounts. Management intends to fulfill any additional cash requirement through the sale of either equity or debt. However, the Company has not identified the source of additional cash and there is no guarantee that such funds will be available or if available that the terms will be acceptable to the Company. The Company's continuation as a going concern is dependent on its ability to complete and market its product and to obtain additional financing as may be required and ultimately to attain profitability. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. NOTE 4 - DEFERRED OFFERING COSTS - STOCK RELATED On March 10, 2008 the Company entered into agreements relating to the issuance of 882,353 shares of the Company's common stock, par value $0.00001 per share, and a warrant to purchase up to 3,000,000 shares of the Company's common stock at a price of $0.27 per share. The shares issued to date as part of this agreement have been charged to deferred financing cost until such time the Company exercises its option to demand an additional $1,000,000 of financing from the financer. At such time, the deferred financing charges will be offset against the financing. NOTE 5 - CAPITAL STOCK COMMON SHARES - AUTHORIZED The company has 1,000,000,000 common shares authorized at a par value of $0.00001 per share and 50,000,000 shares of preferred stock at a par value of $0.0001 per shares. All common stock have equal voting rights, are non-assessable and have one vote per share. Voting rights are not non-cumulative and, therefore, the holders of more than 50% of the stock could, if they choose to do so, elect all the directors of the company. F-7 Easy Energy, Inc. (A Development Stage Company) Notes to Restated Financial Statements March 31, 2008 NOTE 5 - CAPITAL STOCK (CONTINUED) ISSUED AND OUTSTANDING - On May 17, 2007 (inception), the Company issued 40,000,000 shares of its common stock to its Directors for cash of $2,000. See Note 5. On May 17, 2007, the Company closed a private placement for 10,000,000 common shares at a price of $0.0002 per share, or an aggregate of $2,000. The Company accepted subscription from two offshore non-affiliated investors. On August 27, 2007, the Company closed a private placement for 30,333,190 common shares at a price of $0.003 per share, or an aggregate of $91,000. The Company accepted subscription from forty offshore non-affiliated investors. On February 8, 2008, the Company changed it number of authorized shares of Common Stock from 100,000,000 to 1,000,000,000 and provide for a ten for one forward split of the Registrant's shares of common stock outstanding. On February 28, 2008, the Company commenced a private placement offering of 367,647.6 units, each unit being offered for $1.70, for aggregate gross proceeds of $625,001. Each unit consists of (i) ten common stock shares, (ii) thirty Class A Warrant. Each Class A Warrant entitles the holder thereof to purchase one share of common stock at an exercise price of $0.27 per share, expiring five years from the date of purchase. This offering is being made to non-U.S. persons in offshore transactions pursuant to the exemption from registration provided by Regulation S of the Securities Act. On February 28, 2008, the Company completed a subscription agreement pursuant to which it sold and issued 208,333 common stock shares under Rule 903 of Regulation S of the Act of 1933 (the "Act") to an accredited investor for the aggregate purchase price of US $50,000, purchase price US $0.24 per share. On March 3, 2008, the Company signed a subscription agreement in which it undertook to issue to its legal counsel 300,000 shares of restricted common stock valued at $0.24 per share based upon the Regulation S offering completed at approximately the same date for an aggregate price of $72,000 for legal services provided and warrants to purchase 1,000,000 shares of the Company's common stock at an exercise price of $0.15 for a period of five years. The warrants were valued in accordance with SFAS 123R using the assumptions described below and resulted in an expense of $1,031. On March 10, 2008, the Company entered into a Securities Purchase Agreement and a Registration Rights Agreement with Tailor Made Capital, Ltd. ("TMC") relating to the issuance to TMC of 882,353 shares of the Company's common stock, par value $0.0001 per share, and a warrant to purchase up to 3,000,000 shares of the Company's common stock at a price of $0.27 per share (the "Warrant"). The shares were issued for deferred stock offering costs and valued at $0.24 per share based upon the Regulation S offering completed at approximately the same date for an aggregate price of $211,765. The warrant shall be in effect for five years from the date that the Company's common stock is initially listed or quoted for trading on a trading market. The warrants were valued in accordance with SFAS 123R using the assumptions described below and resulted in an expense of $7,739.On March 25, 2008, we entered into a subscription agreement under which we undertook to issue 2,000,000 shares for cash payment of $50,000 by an "accredited investor" as defined in Rule 501 of Regulation D under the Securities Act of 1933, and, in consideration for services provided, warrants to purchase 1,000,000 shares of the Company's common stock at an exercise price of $0.10 for a period of three years. On March 27, 2008(pursuant to an agreement dated January 16, 2008),, we issued 4,285,714 common stock shares to an "accredited investor" as defined in Rule 501 of Regulation D under the Securities Act of 1933 for the aggregate purchase price of US $300,000, purchase price of $0.07 per share. F-8 Easy Energy, Inc. (A Development Stage Company) Notes to Restated Financial Statements March 31, 2008 NOTE 5 - CAPITAL STOCK (CONTINUED) ISSUED AND OUTSTANDING (CONTINUED) - On March 27, 2008, we entered into a consulting services agreement of which the consultant will provide certain investor and market relations consulting services to the Company in consideration of the Company's issuance of 1,500,000 restricted common shares and the sum of $100,000. The common shares were valued at $0.07 per share for a total of $105,000. The expense will be amortized over the one year service agreement beginning April 1, 2008. The share price for valuing the shares was determined based upon the price of the shares issued in the Regulation D offering completed the same day. WARRANTS OUTSTANDING - Date Issued Number of Warrants Exercise Price Expiry Date - ----------- ------------------ -------------- ----------- February 28, 2008 11,029,428 $ 0.27 February 28, 2013 March 3, 2008 1,000,000 $ 0.15 March 3, 2013 March 10, 2008 3,000,000 $ 0.27 March 10, 2013 March 25, 2008 1,000,000 $ 0.10 March 25, 2008 The value allocated to the warrants was estimated using the Black-Scholes option pricing model with the following assumptions: dividend yield of 0%, expected volatility of 100%, risk-free interest rate of 3.94% and expected lives of 3years to 5 years. NOTE 6 - RELATED PARTY TRANSACTIONS The Company's directors provide office space free of charge. The Company has recorded the estimated value of the office space of $1,000 per month as a contribution to capital. 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. On May 17, 2007 (inception), the Company issued 40,000,000 shares of its common stock to its Directors for cash of $2,000. See Note 4. During the period ended March 31, 2008, the Company paid $200,000 in product development costs to a company wholly owned by the president and director of the Company. NOTE 7 - INCOME TAXES The Company provides for income taxes under Statement of Financial Accounting Standards No. 109, ACCOUNTING FOR INCOME TAXES. SFAS No. 109 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect currently. SFAS No. 109 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In the Company's opinion, it is uncertain whether they will generate sufficient taxable income in the future to fully utilize the net deferred tax asset. Accordingly, a valuation allowance equal to the deferred tax asset has been recorded. The total deferred tax asset is $95,881, which is calculated by multiplying a 22% estimated tax rate by the cumulative NOL of $435,824. F-9 Easy Energy, Inc. (A Development Stage Company) Notes to Restated Financial Statements March 31, 2008 NOTE 8 - RECENT ACCOUNTING PRONOUNCEMENTS Below is a listing of the most recent accounting standards SFAS 150-162 and their effect on the Company. STATEMENT NO. 150 - ACCOUNTING FOR CERTAIN FINANCIAL INSTRUMENTS WITH CHARACTERISTICS OF BOTH LIABILITIES AND EQUITY (ISSUED 5/03) This Statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. The application of SFAS No. 150 did not have any effect on the Company's financial statements. STATEMENT NO. 151 - INVENTORY COSTS-AN AMENDMENT OF ARB NO. 43, CHAPTER 4 (ISSUED 11/04) This statement amends the guidance in ARB No. 43, Chapter 4, INVENTORY PRICING, to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). Paragraph 5 of ARB 43, Chapter 4, previously stated that "...under some circumstances, items such as idle facility expense, excessive spoilage, double freight and re-handling costs may be so abnormal ass to require treatment as current period charges...." This Statement requires that those items be recognized as current-period charges regardless of whether they meet the criterion of "so abnormal." In addition, this Statement requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. The application of SFAS No. 151 did not have any effect on the Company's financial statements. STATEMENT NO. 152 - ACCOUNTING FOR REAL ESTATE TIME-SHARING TRANSACTIONS (AN AMENDMENT OF FASB STATEMENTS NO. 66 AND 67) This Statement amends FASB Statement No. 66, ACCOUNTING FOR SALES OF REAL ESTATE, to reference the financial accounting and reporting guidance for real estate time-sharing transactions that is provided in AICPA Statement of Position (SOP) 04-2, ACCOUNTING FOR REAL ESTATE TIME-SHARING TRANSACTIONS. This Statement also amends FASB Statement No. 67, Accounting FOR COSTS AND INITIAL RENTAL OPERATIONS OF REAL ESTATE PROJECTS, states that the guidance for (a) incidental operations and (b) costs incurred to sell real estate projects does not apply to real estate time-sharing transactions. The accounting for those operations and costs is subject to the guidance in SOP 04-2. The application of SFAS No. 152 did not have any effect on the Company's financial statements. STATEMENT NO. 153 - EXCHANGES OF NON-MONETARY ASSETS (AN AMENDMENT OF APB OPINION NO. 29) The guidance in APB Opinion No. 29, ACCOUNTING FOR NON-MONETARY TRANSACTIONS, is based on the principle that exchanges of non-monetary assets should be measured based on the fair value of the assets exchanged. The guidance in that Opinion, however, includes certain exceptions to the principle. This Statement amends Opinion 29 to eliminate the exception for non-monetary exchanges of similar productive assets and replaces it with a general exception for exchanges of non-monetary assets that do not have commercial substance. A non-monetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. The Company has applied SFAS No. 153 to the changes made in the financial statements as of March 31, 2008 and December 31, 2007. STATEMENT NO. 154 - ACCOUNTING CHANGES AND ERROR CORRECTIONS (A REPLACEMENT OF APB OPINION NO. 20 AND FASB STATEMENT NO. 3) This Statement replaces APB Opinion No. 20, ACCOUNTING CHANGES, and FASB Statement No. 3, REPORTING ACCOUNTING CHANGES IN INTERIM FINANCIAL STATEMENTS, and changes the requirements for the accounting for and reporting of a change in F-10 Easy Energy, Inc. (A Development Stage Company) Notes to Restated Financial Statements March 31, 2008 NOTE 8 - RECENT ACCOUNTING PRONOUNCEMENT (CONTINUED) accounting principle. This Statement applies to all voluntary changes in accounting principle. It also applies to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. When a pronouncement includes specific transition provisions, those provisions should be followed. The Company has applied SFAS No. 154 to the changes made in the financial statements as of March 31, 2008 and December 31, 2007. SFAS NO. 155 - ACCOUNTING FOR CERTAIN HYBRID FINANCIAL INSTRUMENTS-AN AMENDMENT OF FASB STATEMENTS NO. 133 AND 140 This statement amends FASB Statements No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. This statement resolves issues addressed in Statement 133 Implementation Issue No. D1, Application of Statement 133 to Beneficial Interests in Securitized Financial Assets. This statement is effective for all financial instruments acquired or issued after the beginning of an entity's first fiscal year that begins after September 15, 2006. The application of SFAS No. 155 did not have any effect on the Company's financial statements. SFAS NO. 156 - ACCOUNTING FOR SERVICING OF FINANCIAL ASSETS-AN AMENDMENT OF FASB STATEMENT NO. 140 This statement amends FASB Statement No. 140 with respect to the accounting for separately recognized servicing liabilities. An entity should adopt this statement as of the beginning of its first fiscal year that begins after September 15, 2006. The application of SFAS No. 156 did not have any effect on the Company's financial statements. SFAS NO. 157 - FAIR VALUE MEASUREMENTS In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. SFAS No. 157 does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. This statement is effective for us beginning May 1, 2008. The application of SFAS No. 157 will not have any effect on the Company's financial statements. SFAS NO. 158 - EMPLOYERS' ACCOUNTING FOR DEFINED BENEFIT PENSION AND OTHER POSTRETIREMENT PLANS-AN AMENDMENT OF FASB STATEMENTS NO. 87, 88, 106, AND 132(R)) This statement improves the financial reporting by requiring an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liabilities in its statement of financial positions and to recognize changes in that funded status in the year in which the changes occur through comprehensive income of a business entity. This statement also improves financial reporting by requiring an employer to measure the funded status of a plan as of the date of its year-end statement of financial position, with limited exceptions. The application of SFAS No. 158 did not have any effect on the Company's financial statements. SFAS NO. 159 - THE FAIR VALUE OPTION FOR FINANCIAL ASSETS AND FINANCIAL LIABILITIES-INCLUDING AN AMENDMENT OF FASB STATEMENT NO. 115 This statement permits entities to choose to measure many financial instruments and certain items at fair value. The objective is to improve the financial reporting by providing entities with the opportunity to mitigate volatility in F-11 Easy Energy, Inc. (A Development Stage Company) Notes to Restated Financial Statements March 31, 2008 NOTE 8 - RECENT ACCOUNTING PRONOUNCEMENT (CONTINUED) reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This statement is expected to expand the use of fair value measurement objectives for accounting for financial instruments. This statement is effective as of the beginning of an entity's first fiscal year that begins after November 15, 2007. The application of SFAS No. 159 did not have any effect on the Company's financial statements. SFAS NO. 160 - NON-CONTROLLING INTEREST IN CONSOLIDATED FINANCIAL STATEMENTS- AN AMENDMENT OF ARB NO. 51 This statement amends ARB 51 to establish accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. It also changes the way the consolidated income statement is presented for non-controlling interest. This statement improves comparability by eliminating diversity of methods. This statement also requires expanded disclosure. The application of SFAS No. 160 did not have any effect on the Company's financial statements. SFAS NO. 161 This statement is intended to enhance the disclosure requirements for derivative instruments and hedging activities as required by SFAS 133. The application of SFAS No. 161 did not have any effect on the Company's financial statements. SFAS 162 This statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements for entities that are presented in conformity with GAAP hierarchy. The application of SFAS No. 162 did not have any effect on the Company's financial statements. The past and future adoption of these Statements did not have and is not expected to have a material effect on the Company's current financial position, results or operations, or cash flows. NOTE 9 - RESTATED FINANCIAL STATEMENTS The Company's financial statements were revised to correct the valuation of shares and warrants issued for services, record contributed office rent and record prepaid expenses. A summary of the changes is presented below: BALANCE SHEET As revised Original ---------- -------- ASSETS Total current assets $775,747 $775,747 -------- -------- Total Assets $775,747 $775,747 ======== ======== LIABILITIES Current: Due to director $ 300 $ 300 F-12 Easy Energy, Inc. (A Development Stage Company) Notes to Restated Financial Statements March 31, 2008 NOTE 9 - RESTATED FINANCIAL STATEMENTS (CONTINUED)
As Revised Original ---------- -------- STOCKHOLDERS` EQUITY Common stock authorized - 1,000,000,000 shares with a par value of $0.00001 Common stock issued and outstanding - 93,186,070 common shares (December 31, 2007: 80,333,190) 932 932 Additional paid in capital 1,527,104 1,235,893 Prepaid expenses - stock related (105,000) (105,000) Deferred offering costs - stock related (211,765) (8,824) Deficit accumulated during the development stage (435,824) (347,554) ----------- ----------- Total Liabilities and Stockholders' Equity $ 775,747 $ 775,747 =========== =========== STATEMENT OF OPERATIONS As Revised Original May 17, 2007 May 17, 2007 (Inception) to (Inception) to December 31, December 31, 2007 2007 ----------- ----------- Revenue $ -- $ -- Expenses General and Administrative 29,780 22,281 Filing Fee 1,000 1,000 ----------- ----------- Total Expenses 30,780 23,281 ----------- ----------- Other Income Interest income 668 668 Provision for Income Taxes -- -- ----------- ----------- Net loss for the period $ (30,112) $ (22,613) =========== ===========
F-13 Easy Energy, Inc. (A Development Stage Company) Notes to Restated Financial Statements March 31, 2008 NOTE 9 - RESTATED FINANCIAL STATEMENTS (CONTINUED) STATEMENT OF OPERATIONS As Revised Original For the For the Three Months Three Months Ended Ended March 31, March 31, 2008 2008 --------- --------- Revenue $ -- $ -- Expenses General and Administrative 4,475 1,476 Product Development 200,000 200,000 Professional Fees 202,497 124,727 Total Expenses 406,972 326,203 --------- --------- Other Income Interest income 1,260 1,260 Provision for Income Taxes -- -- --------- --------- Net loss for the period $(405,712) $(324,943) ========= ========= F-14 PART II - INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following table sets forth the costs and expenses payable by us in connection with the issuance and distribution of the securities being registered hereunder. No expenses shall be borne by the selling shareholders. SEC registration fees $ 243.32 Legal and accounting fees $20,000.00 (1) Miscellaneous $ 1,000.00 (1) ---------- TOTAL $21,243.32 (1) ========== - ---------- (1) We have estimated these amounts. ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Our officers and directors are indemnified as provided by the Nevada Revised Statutes (the "NRS"), our Articles of Incorporation and our Bylaws. INDEMNIFICATION Chapter 78 of the NRS, pertaining to private corporations, provides that we are required to indemnify our officers and directors to the extent that they are successful in defending any actions or claims brought against them as a result of serving in that position, including criminal, civil, administrative or investigative actions and actions brought by or on behalf of Easy Energy. Chapter 78 of the NRS further provides that we are permitted to indemnify our officers and directors for criminal, civil, administrative or investigative actions brought against them by third parties and for actions brought by or on behalf of Easy Energy, even if they are unsuccessful in defending that action, unless the officer or director's: (a) action or inaction constituted a breach of his fiduciary duties as a director or officer; and (b) the breach of those duties involved intentional misconduct, fraud, or a knowing violation of law. However, with respect to actions brought by or on behalf of Easy Energy against our officers or directors, we are not permitted to indemnify our officers or directors where they are adjudged by a court, after the exhaustion of all appeals, to be liable to us or for amounts paid in settlement to Easy Energy, unless, and only to the extent that, a court determines that the officers or directors are entitled to be indemnified. 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 shall not be required to indemnify any director or officer in connection with any proceeding (or part thereof) initiated by such person unless: (a) such indemnification is expressly required to be made by law; (b) the proceeding was authorized by our Board of Directors; (c) such indemnification is provided by us, in our sole discretion, pursuant to the powers vested in us under Nevada law; or (d) such indemnification is required to be made pursuant to the bylaws. ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES. The following sets forth certain information concerning securities which were sold or issued by us since our inception on May 17, 2007 without registration under the Securities Act of 1933 (the "Act") in reliance on exemptions from such registration requirements: II-1 On March 27, 2008, we entered into a consulting services agreement of which the consultant will provide certain investor and market relations consulting services to the Company in consideration of the Company's issuance of 1,500,000 restricted common shares and the sum of $100,000. The issuance was exempt under Regulation D under the Act and/or Section 4(2) of the Act. On March 27, 2008 (pursuant to an agreement dated January 16, 2008), we issued 4,285,714 common stock shares to an "accredited investor" as defined in Rule 501 of Regulation D under the Act for the aggregate purchase price of $300,000, or $0.07 per share. On March 25, 2008, we entered into a subscription agreement under which we undertook to issue 2,000,000 shares for cash payment of $50,000 by an "accredited investor" as defined in Rule 501 of Regulation D under the Act, and, in consideration for services provided, warrants to purchase 1,000,000 shares of the Company's common stock at an exercise price of $0.10 per share for a period of three years. On March 10, 2008, we entered into a Securities Purchase Agreement and a Registration Rights Agreement with Tailor Made Capital, Ltd. ("TMC") relating to the issuance to TMC of 882,353 shares of the Company's common stock, par value $0.0001 per share, and a warrant to purchase up to 3,000,000 shares of the Company's common stock at a price of $0.27 per share (the "Warrant"). The Warrant shall be in effect for five years from the date that the Company's common stock is initially listed or quoted for trading on a trading market. The Securities Purchase Agreement further provides that, at the Company's demand, TMC will purchase up to an additional $1,000,000 of shares of the Company's common stock commencing immediately after the date that the shelf registration of the Company's shares that are subject to the Securities Purchase Agreement is declared effective. These sales were exempt under Regulation S and/or Regulation D under the Act and/or Section 4(2) of the Act. On March 3, 2008, we entered into a Regulation S Subscription Agreement pursuant to which we issued under Rule 903 of Regulation S of the Act to our then legal counsel 300,000 shares of restricted common stock for an aggregate price of $3,000 for services provided and warrants to purchase 1,000,000 shares of the Company's common stock at an exercise price of $0.15 per share for a period of five years. On February 28, 2008, we entered into a Regulation S Subscription Agreement pursuant to which we sold and issued 208,333 common stock shares under Rule 903 of Regulation S of the Act to an accredited investor for the aggregate purchase price of $50,000, or $0.24 per share. On February 28, 2008, we sold 367,647 units, each unit being offered for $1.70, for aggregate gross proceeds of $625,001 Each unit consisted of (i) ten common stock shares, (ii) thirty Class A Warrants. Each Class A Warrant entitles the holder thereof to purchase one share of common stock at an exercise price of $0.27 per share, expiring five years from the date of purchase. This offering was made to non-U.S. persons in offshore transactions pursuant to the exemption from registration provided by Regulation S of the Act. On August 17, 2007 we issued 30,033,319 shares of our common stock to forty non U.S. subscribers at an offering price of $0.003 per share for gross offering proceeds of $91,000 in an offshore transaction pursuant to an exemption from registration under Rule 903 of Regulation S of the Act. On May 17, 2007 we issued 40,000,000 shares of our common stock to two executive officers of our company, at an offering price of $ 0.00005 per share for gross offering proceeds of $2,000 in an offshore transaction pursuant to an exemption from registration under Regulation S of the Act. On May 17, 2007 we issued 10,000,000 shares of our common stock to two subscribers at an offering price of $0.0002 per share for gross offering proceeds of $2,000 in an offshore transaction pursuant to Regulation S of the Securities Act of 1933. All of the above issuances and sales were exempt under Regulation S and/or Regulation D under the Act and/or Section 4(2) of the Act. II-2 ITEM 16. EXHIBITS. The following Exhibits are filed with this prospectus: Exhibit Number Description ------ ----------- 3.1 Amended Articles of Incorporation (incorporated by reference to exhibit 3.1 of the registrant's registration statement on Form SB-2 filed on October 24, 2007). 3.2 Bylaws (incorporated by reference to exhibit 3.2 of the registrant's registration statement on Form SB-2 filed on October 24, 2007). 4.1 Form of share certificate (incorporated by reference to exhibit 4.1 of the registrant's registration statement on form SB-2 filed on October 24, 2007.) 4.2* Form of Stock Purchase Warrant dated February 28, 2008. 4.3* Appendix to Stock Purchase Warrant dated February 28, 2008. 5.1* Opinion of Zysman, Aharoni, Gayer & Co./ Sullivan & Worcester LLP 10.1 Form of subscription agreement (incorporated by reference to exhibit 10.1 of the registrant's registration statement on Form SB-2 filed on October 24, 2007). 10.2 Promissory Note of registrant to Guy Ofir (incorporated by reference to exhibit 10.2 of the registrant's registration statement on Form SB-2 filed on October 24, 2007). 10.3 Assignment of patent application (incorporated by reference to exhibit 10.3 of the registrant's registration statement on Form SB-2 filed on October 24, 2007). 10.4* Subscription Agreement dated February 28, 2008 between the Registrant and the Meitav Entities. 10.5 Securities Purchase Agreement dated March 10, 2008 between the registrant and Tailor Made Capital, Ltd. (incorporated by reference to exhibit 4.1 of the registrant's Current Report on Form 8-K filed on March 24, 2008, as amended on July 7, 2008). 10.6 Registration Rights Agreement dated March 10, 2008 between the registrant and Tailor Made Capital, Ltd. (incorporated by reference to exhibit 4.2 of the Current Report on Form 8-K filed on March 24, 2008, as amended on July 7, 2008). 10.7* Investment Agreement dated January 16, 2008 between the registrant and Meir Duke. 23.1* Consent of Moore & Associates Chartered 23.2* Consent of Zysman, Aharoni,Gayer & Co./ Sullivan & Worcester LLP, included in Exhibit 5.1. 24.1 Power of Attorney (included on the signature page of the registrant's registration statement number 333-150468 on Form S-1 filed with the Securities and Exchange Commission on April 25, 2008). - ---------- * Filed herewith. II-3 ITEM 17. UNDERTAKINGS. The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (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 the 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) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) 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: Each prospectus filed by the registrant pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant 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, the registrant will, unless in the opinion of its 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 Act and will be governed by the final adjudication of such issue. II-4 SIGNATURES Pursuant to the requirements of the Securities Act 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Las Vegas in the state of Nevada, on July 7, 2008. EASY ENERGY, INC. By: /s/ Guy Ofir ----------------------------------------------- Guy Ofir, President and Director (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated. By: /s/ Guy Ofir ----------------------------------------------- Guy Ofir, President and Director (Principal Executive Officer, Principal Financial Officer and director) Dated: July 7, 2008 By: * ----------------------------------------------- Emanuel Cohen, Secretary, Treasurer and Director Dated: July 7, 2008 * By: /s/ Guy Ofir --------------------------------------------- Guy Ofir (Attorney-in-Fact) II-5 EX-4.2 3 ex4-2.txt FORM OF STOCK PURCHASE WARRANT Exhibit 4.2 WARRANT THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE "SECURITIES ACT") OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAW, AND THE WARRANT MAY NOT BE EXERCISED AND THE WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE MAY NOT BE SOLD, TRANSFERRED, PLEDGED, ASSIGNED OR HYPOTHECATED, UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT COVERING THIS WARRANT AND/OR SUCH SECURITIES. to purchase SHARES OF COMMON STOCK of EASY ENERGY, INC. at an exercise price of $0.27 per share VOID AFTER 5:00 p.m. (prevailing Tel Aviv time) On the Expiration Date (as hereinafter defined) NO. W-[ ] Date: Feb 28, 2008 Easy Energy, Inc. a Nevada corporation with its principal offices at 49 Ha'aroshet St., Karmiel 20100 Israel (the "COMPANY"), hereby grants to [ _____________________ ] (the "HOLDER"), the right to purchase, subject to the terms and conditions hereof, up to [ ____________ ] shares of Common Stock, par value $0.00001 per share, of the Company ("COMMON STOCK"), exercisable at any time from time to time, on or after the date hereof (the "EFFECTIVE DATE"), and until the Fifth (5th) anniversary of the Effective Date (the "EXPIRATION DATE"). 1. DEFINITIONS In this Warrant the terms below shall have the following meaning, unless otherwise specifically provided or required by the context: 1.1. "WARRANT SHARES" means the Shares of Common Stock purchasable hereunder or any other securities which, in accordance with the provisions hereof, may be issued by the Company in substitution therefor. 1.2. "EXERCISE PRICE" means the price of twenty seven cents ($0.27) payable hereunder for each Warrant Share, as adjusted in the manner set forth hereinafter. 1.3. "WARRANTS" means this Warrant and all warrants hereafter issued in exchange or substitution for this Warrant. 2. WARRANT PERIOD; EXERCISE OF WARRANT 2.1. This Warrant may be exercised in whole at any time, or in part from time to time, beginning on the Effective Date until the Expiration Date (the "WARRANT PERIOD"), by the surrender of this Warrant (with a duly executed exercise form in the form attached hereto as EXHIBIT A), at the principal office of the Company, set forth above, together with proper payment of the Exercise Price multiplied by the number of Warrant Shares for which the Warrant is being exercised. Payment for Warrant Shares shall be made by certified or official bank check or checks, payable to the order of the Company or by wire transfer to an account to be designated in writing by the Company. Payments shall be made in United States dollars. 2.2. The Holder of the Warrant, by its acceptance hereof, covenants and agrees that this Warrant is being acquired as an investment and not with a view to the distribution hereof and such Holder further covenants and agrees that it will not sell, transfer, pledge, assign, or hypothecate the Warrant or the Warrant Shares unless there is an effective registration statement under the Securities Act of 1933 covering the Warrant or the Warrant Shares, or the Holder of the Warrant and/or the Warrant Shares receives an opinion of counsel satisfactory to the Company stating that such sale, transfer, pledge, assignment, or hypothecation is exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 and the qualification requirements under applicable law. 2.3. If this Warrant should be exercised in part, the Company shall, upon surrender of this Warrant for cancellation, execute and deliver a new Warrant evidencing the rights of the Holder to purchase the remainder of the Warrant Shares purchasable hereunder. The Company shall pay any and all expenses, taxes and other charges that may be payable in connection with the issuance of the Warrant Shares and the preparation and delivery of share certificates pursuant to this Section 2 in the name of the Holder (including without limitation, if applicable stamp duty), and to the extent required, the execution and delivery of a new Warrant, provided, however, that the Company shall only be required to pay taxes which are due as a direct result of the issuance of the Warrant Shares or other securities, properties or rights underlying such Warrants (such as the applicable stamp duty), and will not be required to pay any tax which may be (i) due as a result of the specific identity of the Holder or (ii) payable in respect of any transfer involved in the issuance and delivery of any such certificates in a name other than that of the Holder. 2.4. No fractions of Shares of Common Stock shall be issued in connection with the exercise of this Warrant, and the number of Common Stock issued shall be rounded up or down to the nearest whole number. 2.5. Upon the issuance of Common Stock resulting from the exercise in whole or in part of this Warrant, the Company shall deliver to the Holder an irrevocable letter of instructions to the Company's transfer agent to issue as soon as is reasonably practicable to the Holder share certificates reflecting the Warrant Shares exercised thereby, together with any and all other documents required for the issuance of such certificates by the transfer agent. 2.6. Cashless Exercise. If at any time after the completion of the then-applicable holding period required by Rule 144, or any successor provision then in effect, which would allow "tacking" of the holding period of this Warrant and the Warrant Shares pursuant to the SEC Manual of Publicly Available Telephone Interpretations or other Commission rule or guidance, there is no effective Registration Statement registering, or no current prospectus available for, the resale of the Warrant Shares by the Holder at a time when such Registration Statement is required to be effective pursuant to the Registration Rights Agreement, then this Warrant may also be exercised at such time by means of a "cashless exercise" in which the Holder shall be entitled to receive a certificate for the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where: (A) = the VWAP on the Trading Day immediately preceding the date of such election; (B) = the Exercise Price of this Warrant, as adjusted; and (X) = the number of Warrant Shares issuable upon exercise of this Warrant in accordance with the terms of this Warrant by means of a cash exercise rather than a cashless exercise. Notwithstanding anything herein to the contrary, on the Expiration Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2.6. 2 3. RESERVATION OF SHARES The Company covenants that: (i) at all times during the Warrant Period it shall have in reserve, and will keep available solely for issuance or delivery upon exercise of the Warrant, such number of Shares of Common Stock as shall be issuable upon the exercise hereof, and (b) upon exercise of the Warrant and payment of the Exercise Price hereunder, the Warrant Shares issuable upon such exercise will be validly issued, fully paid, non assessable, free and clear from any lien, encumbrance, pledge or any other third party right and not subject to any preemptive rights. 4. ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF SECURITIES 4.1. Subdivision and Combination. In case the Company shall at any time subdivide or combine the outstanding Shares of Common Stock, the Exercise Price shall forthwith be proportionately decreased in the case of subdivision or increased in the case of combination. 4.2. Stock Dividends and Distributions. In case the Company shall pay a dividend on, or make a distribution of, Shares of Common Stock or of the Company's share capital convertible into Shares of Common Stock, the Exercise Price shall forthwith be adjusted, from and after the date of determination of stockholders entitled to receive such dividend or distribution, to that price determined by multiplying the Exercise Price in effect immediately prior to such date of determination by a fraction (i) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend or distribution, and (ii) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such dividend or distribution. An adjustment pursuant to this Section 4.3 shall be made as of the record date for the subject stock dividend or distribution. 4.3. Adjustment in Number of Securities. Upon each adjustment of the Exercise Price pursuant to the provisions of Sections 4.1 and 4.2, the number of Common Stock issuable upon the exercise of each Warrant shall be adjusted to the nearest full amount by multiplying a number equal to the Exercise Price in effect immediately prior to such adjustment by the number of Shares of Common Stock issuable upon exercise of the Warrants immediately prior to such adjustment and dividing the product so obtained by the adjusted Exercise Price. 4.4. No Adjustment of Exercise Price in Certain Cases. No adjustment of the Exercise Price shall be made if the amount of said adjustment shall be less than 1 cent ($0.01) per each Share of Common Stock, provided, however, that in such case any adjustment that would otherwise be required then to be made shall be carried forward and shall be made at the time of and together with the next subsequent adjustment which, together with any adjustment so carried forward, shall amount to at least 1 cent ($0.01) per each Share of Common Stock. 4.5. Merger or Consolidation. In case of any consolidation of the Company with or merger of the Company with, or merger of the Company into (other than a merger which does not result in any reclassification or change of the outstanding Shares of Common Stock), the Company shall cause the corporation formed by such consolidation or merger or surviving such merger to execute and deliver to the Holder a new warrant agreement in exchange for this Warrant, providing that the Holder of the Warrant then outstanding or to be outstanding shall have the right thereafter (until the expiration of such Warrant) to receive, upon exercise of such Warrant, the kind and amount of shares of stock and other securities and property receivable upon such consolidation or merger, by a holder of the number of Shares of Common Stock of the Company for which such Warrant might have been exercised immediately prior to such consolidation or merger. Such supplemental warrant agreement shall provide for adjustments, which shall be identical to the adjustments provided in this Section 4. The provisions of this Section 4.5 shall similarly apply to successive consolidations or mergers. 3 5. NOTICES TO WARRANT HOLDERS Nothing contained in this Warrant shall be construed as conferring upon the Holder the right to vote or to consent or to receive notice as a stockholder in respect of any meetings of stockholders for the election of directors or any other matter, or as having any rights whatsoever as a stockholder of the Company. If, however, at any time prior to the Expiration Date, any of the following events shall occur: 5.1. the Company shall take a record of the holders of its Shares of Common Stock for the purpose of entitling them to receive a dividend or distribution payable otherwise than in cash, or a cash dividend or distribution payable otherwise than out of current or retained earnings, as indicated by the accounting treatment of such dividend or distribution on the books of the Company; 5.2. the Company shall offer to all the holders of its Shares of Common Stock any additional shares of the share capital of the Company or securities convertible into or exchangeable for shares of the share capital of the Company, or any option, right or warrant to subscribe therefor; or 5.3. a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation or merger) or a sale of all or substantially all of its property, assets and business as an entirety shall be proposed; then, in any one or more of said events, the Company shall give to the Holder written notice of such event at least fifteen (15) days prior to the date fixed as a record date or the date of closing the transfer books for the determination of the stockholders entitled to such dividend, distribution, convertible or exchangeable securities or subscription rights, or entitled to vote on such proposed dissolution, liquidation, winding up or sale. 6. TRANSFERABILITY 6.1. The Holder may, sell, transfer, assign, encumber, pledge or otherwise dispose or undertake to dispose of the Warrant. 6.2. Unless registered, the Warrant Shares issued upon exercise of the Warrants shall be subject to a stop transfer order and the certificate or certificates evidencing such Warrant Shares shall bear legend substantially similar to the following: "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"). THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THESE SHARES UNDER THE SECURITIES ACT, OR AN OPINION OF COUNSEL FOR THE HOLDER OF THE SHARES SATISFACTORY TO EASY ENERGY, INC., THAT REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT." 7. LOSS, ETC. OF WARRANT Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant, and of indemnity reasonably satisfactory to the Company, if lost, stolen or destroyed, and upon surrender and cancellation of this Warrant, if mutilated, and upon reimbursement of the Company's reasonable direct expenses, the Company shall execute and deliver to the Holder a new Warrant of like date, tenor and denomination. 4 8. HEADINGS The headings of this Warrant have been inserted as a matter of convenience and shall not affect the construction hereof. 9. NOTICES Unless otherwise provided, any notice required or permitted under this Warrant shall be given in writing and shall be deemed effectively given upon personal delivery to the party to be notified or seven (7) days after deposit with the Post Authority, for dispatch by registered or certified mail, postage prepaid and addressed to the Holder at the address set forth in the Company's books and to the Company at the address of its principal offices set forth above, or when given by telecopier or other form of rapid written communication, provided that confirming copies are sent by such airmail. 10. GOVERNING LAW This Warrant shall be governed by and construed and enforced in accordance with the laws of the State of New York (regardless of the laws that might otherwise govern under applicable New York principles of conflicts of law). Any dispute arising out of or in connection with this Warrant is hereby submitted to the sole and exclusive jurisdiction of the competent courts located in New York, New York. 11. ENTIRE AGREEMENT; AMENDMENT AND WAIVER This Warrant and the Exhibit hereto constitute the full and entire understanding and agreement between the parties with regard to the subject matters hereof and thereof. Any term of this Warrant may be amended and the observance of any term hereof may be waived (either prospectively or retroactively and either generally or in a particular instance) only with the written consent of both the Holder and the Company. IN WITNESS WHEREOF, the Company has caused this Warrant to be executed as of the date first written above. Easy Energy, Inc. By: ----------------------------- Name: Guy Ofir Title: CEO Agreed and Accepted: [ ---------------- ] By: ----------------------------- Name: ----------------------------- Title: ----------------------------- 5 EXHIBIT A Warrant Exercise Form _________________, 200_ Easy Energy Inc. 49 Ha'aroshet St., Karmiel 20100 Israel Dear Sirs, Re: EXERCISE OF WARRANT 1. The undersigned hereby irrevocably elects to exercise the attached Warrant No. W-[ ] to the extent of ___________________ Common Stock of Easy Energy, Inc., all in accordance with Section 2.1 of the Warrant. 2. Payment to the Company of the total Exercise Price for such shares has been made simultaneously with the delivery of this exercise of the Warrant. 3. The undersigned requests that certificates for such Common Stock be registered in the name of ____________________ whose address is ____________________ and that such certificates be delivered to whose address is _____________________________. [ ] By: ----------------------------- Name: ----------------------------- Title: ----------------------------- 6 EX-4.3 4 ex4-3.txt APPENDIX TO STOCK PURCHASE WARRANT Exhibit 4.3 APPENDIX TO EASY-ENERGY WARRANT AGREEMENT Exercise Limitations. (i) The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 of the Warrant or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Warrant Exercise Form, such Holder (together with such Holder's Affiliates, and any other person or entity acting as a group together with such Holder or any of such Holder's Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by such Holder and its Affiliates and group members shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (A) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by such Holder or any of its Affiliates and group members and (B) exercise of the unexercised portion of any other securities of the Company (including, without limitation, any other Warrants) subject to a limitation on exercise analogous to the limitation contained herein beneficially owned by such Holder or any of its Affiliates and group members. Except as set forth in the preceding sentence, for purposes of this Appendix, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to such Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and such Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Appendix applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by such Holder together with any Affiliates or group members) and of which a portion of this Warrant is exercisable shall be in the sole discretion of a Holder, and the submission of a Warrant Exercise Form shall be deemed to be each Holder's determination of whether this Warrant is exercisable (in relation to other securities owned by such Holder together with any Affiliates or group members) and of which portion of this Warrant is exercisable, in each case subject to such aggregate percentage limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Appendix, in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company's most recent Form 10-QSB or Form 10-KSB, as the case may be, (y) a more recent public announcement by the Company or (z) any other notice by the Company or the Company's Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to such Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by such Holder or its Affiliates or group members since the date as of which such number of outstanding shares of Common Stock was reported. The "Beneficial Ownership Limitation" shall be 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Beneficial Ownership Limitation provisions of this Appendix may be waived by such Holder, at the election of such Holder, upon not less than 61 days' prior notice to the Company. The limitations contained in this paragraph shall apply to a successor holder of this Warrant Holders Easy-Energy Inc. By: By: ------------------------------- ------------------------------- Signature: Signature: ------------------------ ------------------------ EX-5.1 5 ex5-1.txt OPINION & CONSENT OF COUNSEL Exhibit 5.1 Z.A.G./S&W LLP One Post Office Square Boston, MA 02109 July 3, 2008 Easy Energy, Inc. Suite 105 - 5348 Vegas Dr. Las Vegas, NV 89108 Re: Registration Statement No.: 333-150468 Ladies and Gentlemen: In connection with the above-referenced registration statement on Form S-1 (the "Registration Statement") under the Securities Act of 1933, as amended (the "Act"), filed by Easy Energy, Inc., a Nevada corporation (the "Company"), the following opinion is furnished to you to be filed with the Securities and Exchange Commission (the "Commission"), as Exhibit 5.1 to the Registration Statement in connection with the public offering and sale from time to time by certain shareholders of an aggregate of 20,638,273 shares of common stock, par value $0.00001 per share of the Company (the "Shares"). The Shares include an aggregate of 15,029,440 shares issuable to warrant holders upon the exercise of warrants to purchase Company common stock. In connection with this opinion, we have examined and relied upon originals or copies of the Company's Articles of Incorporation, as amended, and Bylaws, corporate proceedings of the Board of Directors of the Company with respect to the authorization and issuance of the Shares and such other records, agreements and instruments of the Company, certificates of public officials and of officers of the Company and such matters of law, as we have deemed necessary as a basis for the opinions hereinafter expressed. In making such examination, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals and the conformity to the originals of all documents submitted to us as copies, which facts we have not independently verified. We have necessarily assumed in connection with the opinions expressed below that the terms and conditions of the agreements under which the Shares were or, in the case of shares issuable upon exercise of warrants, will be issued, and that any related proceedings of the Company conducted after the date hereof will be conducted, (i) in accordance with all applicable laws and the Company's Articles of Incorporation, as amended, and Bylaws and (ii) not in conflict with any contractual or other restrictions that are binding on the Company. We have also necessarily assumed in connection with the opinions expressed below that, at the time of the issuance of the Shares upon exercise of the warrants, the Company will have a sufficient number of authorized shares of common stock under the Company's Articles of Incorporation that will be unissued and not otherwise reserved for issuance. For purposes of our opinion, we have examined an official compilation of "Title 7 - Business Associations; Securities; Commodities, Chapter - 78 - Private Corporations" of the Nevada Revised Statutes (such examination being limited to the provisions of such statutes only, and not including any annotations or commentary). Other than such examination and our examination of the documents indicated above, we have made no other examination in connection with this opinion. We express no opinion herein concerning the federal laws of the United States of America or any state securities or blue sky laws. Relying on the foregoing, and without further inquiry on our part, we are of the opinion that the Shares, including Shares underlying warrants, to be sold as described in the Registration Statement have been duly authorized. The Shares, other than Shares underlying warrants, are legally and validly issued, fully paid and non-assessable, and the Shares underlying warrants when issued and paid for will be legally and validly issued, fully paid and non-assessable. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our firm in the prospectus forming a part of the Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission promulgated thereunder. Very truly yours, /s/ Zysman, Aharoni, Gayer & Co./Sullivan & Worcester LLP - -------------------------------------------------------------- EX-10.4 6 ex10-4.txt SUBSCRIPTION AGREEMENT Exhibit 10.4 SUBSCRIPTION AGREEMENT To: Easy-Energy Inc. (the "Corporation" or the "Issuer") Address: 49 Ha'aroshet St., Karmiel 20100 Israel The undersigned (the "Subscriber") hereby acknowledges that the Corporation is proceeding with a private placement of units (each, a "Unit"), with each Unit consisting of (i) ten common stock shares par value $0.00001of the Corporation (a "Share") and (ii) thirty warrants to purchase Shares ("Warrant"); each full Warrant will entitle the holder to purchase one additional Share at a price of $0.27 per Share if exercised on or before the date that is five (5) years after the date of the issuance of the Warrant. The Subscriber hereby tenders to the Corporation this subscription offer which, upon acceptance by the Corporation, will constitute an agreement of the Subscriber to subscribe for, take up, purchase and pay for and, on the part of the Corporation, to issue and sell to the Subscriber the number of Units set out below on the terms and subject to the conditions set out in this Agreement. Number of Units: ______________ Total Purchase Price at $1.70 per Unit: $_____________ DATED this 28 day of February, 2008. ___________________________________ ___________________________________ (Name of Subscriber - please print) (Subscriber's Address) by:________________________________ ___________________________________ (Official Capacity or Title - please print) ___________________________________ (Telephone Number) ___________________________________ ___________________________________ Authorized Signature (Facsimile Number) ___________________________________ ___________________________________ (Please print name of individual whose signature (E-mail Address) appears above if different than the name of the Subscriber printed above). If Registration or delivery instructions are different from the address listed above, please advise the Issuer at the time of subscription. This subscription is accepted by the Corporation this __ day of February, 2008. Easy-Energy Inc. Per: ___________________________________ Authorized Signatory 1. INTERPRETATION 1.1. In this Agreement, unless the context otherwise requires: "1933 ACT" means the United States SECURITIES ACT OF 1933, as amended; "ACCREDITED INVESTOR" has the meaning set forth in Appendix I hereto; "CLOSING" means the day on which the transaction hereof is consummated pursuant to the terms of Section 5 below; "COMMISSION" means the United States Securities and Exchange Commission; "EXEMPTION" means the exemptions from the prospectus requirements of the 1933 Act; "PARTIES" or "PARTY" means the Subscriber, the Corporation or both, as the context requires; "PRIVATE PLACEMENT" means the offering of the Units by the Issuer; "PRICE PER SHARE" means the price per Share paid by the Subscriber at the time of the Closing; "REGULATION S" means Regulation S promulgated under the 1933 Act; "REGULATORY AUTHORITIES" means the Commission and the securities regulatory authorities in an international jurisdiction; "SHARES" means shares of common stock par value $0.00001each of the Corporation; "SUBSCRIBER" has the meaning ascribed to it on the cover page; "SUBSCRIBER'S UNITS" means those Units which the Subscriber has agreed to purchase under this Agreement; "SUBSCRIPTION PROCEEDS" means the total gross proceeds from the sale of Units under the Private Placement; "UNITED STATES" means the United States of America, its territories and possessions, any state of the United States and the District of Columbia; "U.S. PERSON" has the meaning ascribed to it in Regulation S. Without limiting the foregoing, but for greater clarity in this Agreement, a U.S. Person includes, subject to the exclusions set forth in Regulation S, (i) any natural person resident in the United States, (ii) any partnership or corporation organized or incorporated under the laws of the United States, (iii) any estate or trust of which any executor, administrator or trustee is a U.S. Person, (iv) any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident in the United States, and (v) any partnership or corporation organized or incorporated under the laws of any non-U.S. jurisdiction which is formed by a U.S. Person principally for the purpose of investing in securities not registered under the 1933 Act, unless it is organized or incorporated, and owned, by Accredited Investors who are not natural persons, estates or trusts. 1.2 This Agreement is to be read with all changes in gender or number as required by the context. 1.3 The headings in this Agreement are for convenience of reference only and do not affect the interpretation of this Agreement. 1.4 Unless otherwise indicated, all dollar amounts referred to in this Agreement are in lawful currency of the United States of America. 2 1.5 This Agreement is governed by, subject to and interpreted in accordance with the laws prevailing in New York. The competent courts in New York, New York shall have sole and exclusive jurisdiction on and dispute arising out or in connection with this Agreement. 2. REPRESENTATIONS, WARRANTIES, COVENANTS AND ACKNOWLEDGEMENTS OF THE SUBSCRIBER 2.1 The Subscriber acknowledges, represents, warrants and covenants to and with the Corporation that, as at the date given above and at the Closing: (a) no prospectus has been filed by the Corporation with any of the Commissions in connection with the issuance of the Units, such issuance is exempted from the prospectus requirements of the 1933 Act and that: (i) the Subscriber is restricted from using most of the civil remedies available under the 1933 Act; (ii) the Subscriber may not receive information that would otherwise be required to be provided to it under the 1933 Act; and (iii)the Corporation is relieved from certain obligations that would otherwise apply under the 1933 Act; (b) the Subscriber certifies that it is resident in the jurisdiction(s) set out on the first page of this Agreement; (c) the Subscriber is purchasing the Subscriber's Units as principal for its own account and not for the benefit of any other person, and is purchasing the Subscriber's Units for investment only and not with a view to the resale or distribution of all or any of the Subscriber's Units; (d) the Subscriber acknowledges that: (i) no securities commission or similar regulatory authority has reviewed or passed on the merits of the Units; (ii) there is no government or other insurance covering the Units; (iii) there are risks associated with the purchase of the Units; (iv) there are restrictions on the Subscriber's ability to resell the Units and it is the responsibility of the Subscriber to find out what those restrictions are and to comply with them before selling the Units; and (v) the Corporation has advised the Subscriber that the Corporation is relying on an exemption from the rules and regulations requiring it to provide the Subscriber with a prospectus and to sell securities through a person registered to sell securities under the 1933 Act and, as a consequence of acquiring Units pursuant to an Exemption, certain protections, rights and remedies provided by the 1933 Act, including statutory rights of rescission or damages, will not be available to the Subscriber; (e) the Subscriber is an Accredited Investor, by virtue of the fact that the Subscriber falls within one or more of the sub-paragraphs of the definition of Accredited Investor set out in Appendix I, and the Subscriber has checked the sub-paragraph(s) applicable to the Subscriber; (f) no person has made to the Subscriber any written or oral representations: 3 (i) that any person will resell or repurchase any of the Units; (ii) that any person will refund the purchase price of any of the Units; or (iii) as to the future price or value of any of the Units; (g) the Subscriber will not become a "control person" by virtue of the purchase of the Subscriber's Shares, and does not intend to act in concert with any other person to form a control group of the Issuer; (h) the Subscriber has no knowledge of a "material fact" or "material change" in the affairs of the Corporation that has not been generally disclosed to the public, save knowledge disclosed to it in connection with this particular transaction; (i) the offer made by this subscription is irrevocable by the Subscriber and requires acceptance by the Corporation; (j) the Corporation will have the right to accept this subscription offer in whole or in part and the acceptance of this subscription offer will be conditional upon the sale of the Subscriber's Units to the Subscriber being exempt from the prospectus and registration requirements under applicable relevant securities legislation; (k) the Subscriber has the legal capacity and competence to enter into and execute this Agreement and to take all actions required pursuant hereto and, if an individual is of full age of majority, and if the Subscriber is a corporation it is duly incorporated and validly subsisting under the laws of its jurisdiction of incorporation, and all necessary approvals by its directors, shareholders and others have been given to authorize the execution of this Agreement on behalf of the Subscriber; (l) the entering into of this Agreement and the transactions contemplated hereby will not result in the violation of any of the terms and provisions of any law applicable to, or the incorporation documents of, the Subscriber or of any agreement, written or oral, to which the Subscriber may be a party or by which it is or may be bound; (m) this Agreement has been duly executed and delivered by the Subscriber and constitutes a legal, valid and binding obligation of the Subscriber enforceable against the Subscriber; (n) the Subscriber has been advised to consult its own legal advisors with respect to the applicable hold periods imposed in respect of the Shares by applicable securities legislation and regulatory policies and confirms that no representations by the Corporation have been made respecting the hold periods applicable to the Units; (o) the Subscriber is aware of the risks and other characteristics of the Units and of the fact that the Subscriber may not be able to resell the Units purchased by it except in accordance with the applicable securities legislation and regulatory policies and that the Units may be subject to resale restrictions and may bear a legend to this effect; (p) if required by applicable securities legislation, policy or order or by any securities commission, stock exchange or other regulatory authority, the Subscriber will execute, deliver, file and otherwise assist the Corporation in filing, such reports, undertakings and other documents with respect to the issue of the Corporation as may be required; (q) the Subscriber has not purchased the Units as a result of any form of general solicitation or general advertising, including advertisements, articles, notices or other communication published in any newspaper, magazine or similar media or broadcast over radio, television or internet or any seminar or meeting whose attendees have been invited by general solicitation or general advertising; 4 (r) the Subscriber has such knowledge in financial and business affairs as to be capable of evaluating the merits and risks of its investment and is able to bear the economic risk of loss of its investment; (s) the Subscriber agrees that the Corporation may be required by law or otherwise to disclose to regulatory authorities the identity of the Subscriber and, if applicable, the beneficial purchaser for whom the Subscriber may be acting; and (t) the Subscriber agrees that the above representations, warranties, covenants and acknowledgements in this subsection will be true and correct both as of the execution of this subscription and as of the day of Closing. (u) the Subscriber has: (i) reviewed all of the Corporation's filings under the 1934 Act; and (ii) been given the chance to ask questions of the Corporation's officers and directors; and (iii) received answers to all questions asked 2.2 The foregoing representations, warranties, covenants and acknowledgements are made by the Subscriber with the intent that they be relied upon by the Corporation in determining its suitability as a purchaser of Shares, and the Subscriber hereby agrees to indemnify the Corporation against all losses, claims, costs, expenses and damages or liabilities which any of them may suffer or incur as a result of reliance thereon. The Subscriber undertakes to notify the Corporation immediately of any change in any representation, warranty or other information relating to the Subscriber set forth herein which takes place prior to the Closing. 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE CORPORATION 3.1 The Corporation represents, warrants and covenants that, as of the date given above and at the Closing: (a) the Corporation is a valid and subsisting corporation incorporated under the laws of the State of Nevada; (b) the Corporation is, where required, duly registered and licensed to carry on business in the jurisdictions in which it carries on business or owns property where required under the laws of that jurisdiction, except where in failure to so register will not have a material adverse effect on the Corporation; (c) the Corporation has sufficient non-issued shares in its authorized share capital to issue the Units, including the Shares that are issuable upon the proper exercise of the Warrants, and upon their issuance the Shares comprising the Units will be duly and validly issued as fully paid and non-assessable, and when issued in accordance with the proper exercise of the Warrants, including the payment , the Shares issuable thereunder shall be duly and validly issued as fully paid and non-assessable; (d) the Corporation has complied and will comply fully with the requirements of all applicable corporate and securities laws and administrative policies and directions in relation to the issue of its securities and in all matters relating to the Private Placement; (e) the issue and sale of the Units by the Corporation does not and will not conflict with, and does not and will not result in a breach of, any of the terms of the Corporation's incorporating documents or any agreement or instrument to which the Corporation is a party or by which it is bound; (f) except as disclosed in the Corporations filings with the Commission, the Corporation is not a party to any actions, suits or proceedings which could materially affect its business or financial condition, and except for the events already disclosed by the Corporation, to the best of the Corporation's knowledge no such actions, suits or proceedings are contemplated or have been threatened; 5 (g) this Agreement has been or will be by the Closing, duly authorized by all necessary corporate action on the part of the Corporation, and the Issuer has or will have by the Closing full corporate power and authority to undertake the Private Placement; and (h) no order ceasing or suspending trading in securities of the Corporation nor prohibiting the sale of such securities has been issued to and is outstanding against the Corporation or its directors, officers or promoters or against any other companies that have common directors, officers or promoters and no investigations or proceedings for such purposes are pending or threatened. 3.2 The representations and warranties contained in this section will survive the Closing for a period of one year. 3.3 Upon acceptance of this subscription, the Corporation agrees and undertakes that it shall file a registration statement within 30 days with the Commission and ensure that such Registration Statements is declared effective by the Commission within 100 days thereafter, for the registration for resale of the Shares comprising the Units and the Shares that may be issued upon the exercise of the Warrants, and shall keep such registration statement continuously effective under the Securities Act until all securities covered by such registration statement have been sold, or may be sold without volume restrictions pursuant to Rule 144(k) of the SEC. The date the shares be sold under Rule 144(k) shall be called the "Release Date". Notwithstanding anything to the contrary, if: (i) a Registration Statement is not filed on or prior to 30 days form the date herein, (ii) a Registration Statement filed or required to be filed hereunder is not declared effective by the Commission within 100 days, (iii) after its date of effectiveness, a Registration Statement ceases for any reason to remain continuously effective as to all securities for which it is required to be effective, or the subscribers are otherwise not permitted to utilize the Prospectus therein to resell such Shares for more than 30 consecutive calendar days or more than an aggregate of 90 calendar days during any 12-month period (which need not be consecutive calendar days) (any such failure or breach being referred to as an "Event", and for purposes of clause (i) or (ii) the date on which such Event occurs, or for purposes of (iii) the date on which such 20 or 30 calendar day period, as applicable, is exceeded being referred to as "Event Date"), then in addition to any other rights the subscribers may have, on each such Event Date and on each monthly anniversary of each such Event Date (if the applicable Event shall not have been cured by such date) until the applicable Event is cured, the subscribers may require the Corporation to pay to each subscriber an amount in cash, a penalty, equal to 1.5% of the aggregate purchase price paid by the Subscriber pursuant to this Subscription Agreement for any Shares then held by such subscriber until the Release Date. If the Corporation fails to pay any such penalty in full within seven days after the date of notice thereof, the Corporation will pay interest thereon at a rate of 18% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the subscriber, accruing daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. The penalty pursuant to the terms hereof shall apply on a daily pro-rata basis for any portion of a month prior to the cure of an Event. 4. WITHDRAWL OF SUBSCRIPTION 4.1 The Subscriber waives the right to withdraw this subscription and to terminate its obligations hereunder at any time before the Closing. 5. CLOSING 5.1 The Closing will take place on such date or dates to be determined by the Issuer, and if a Closing does not occur on or before 30 days from the date herein, the subscription proceeds will be returned to the Subscriber without interest or deduction. 5.2 Upon execution of this Agreement, the Subscriber will deliver to the Corporation: (a) this subscription form, duly executed; (b) at Closing Subscriber will deliver to the Corporation a certified check, wire transfer or bank draft for the total price of the Subscriber's Units made payable to the Corporation; and 6 (c) the completed applicable Appendices. 5.3 At Closing, the Corporation will deliver (a) a copy of the Corporation's board of directors resolution certified by an authorized officer of the Corporation, approving the issuance of the securities in accordance with the sale of the Units hereunder; (b) irrevocable instructions to the its transfer agent to issue as soon as is reasonably practicable to the subscribers share certificates for the Subscriber's Shares and (c) to the Subscriber the certificate(s) representing the Warrants registered in the name of the Subscriber or its nominee. 6. RESALE RESTRICTIONS The Subscriber understands and acknowledges that the Units will be subject to resale restrictions under United States securities laws, the terms of which may be endorsed on the certificates representing the Units, and the Subscriber agrees to comply with such resale restrictions. The Subscriber also acknowledges that it has been advised to consult with its own independent legal advisor with respect to the applicable resale restrictions and the Subscriber is solely responsible for complying with such restrictions and the Corporation is not responsible for ensuring compliance by the Subscriber with the applicable resale restrictions. 7. USE OF PERSONAL INFORMATION 7.1 The Subscriber hereby acknowledges and consents to: (i) the disclosure by the Subscriber and the Corporation of Personal Information concerning the Subscriber to a securities commission or other regulatory authority (a "Securities Commission"), or to a stock exchange and any of its affiliates, authorized agents, subsidiaries and divisions, (collectively referred to as "an Exchange"); and (ii) the collection, use and disclosure of Personal Information by an Exchange for the following purposes (or as otherwise identified by such Exchange, from time to time): (a) to conduct background checks; (b) to verify the Personal Information that has been provided about the Subscriber; (c) to consider the suitability of the Subscriber as a holder of securities of the Corporation; (d) to consider the eligibility of the Corporation to list on the Exchange; (e) to provide disclosure to market participants as the security holdings of the Corporation's shareholders, and their involvement with any other reporting issuers, issuers subject to a cease trade order or bankruptcy, and information respecting penalties, sanctions or personal bankruptcies, and possible conflicts of interest with the Issuer; (f) to detect and prevent fraud; (g) to conduct enforcement proceedings; and (h) to perform other investigations as required by and to ensure compliance with all applicable rules, policies, rulings and regulations of an Exchange, securities legislation and other legal and regulatory requirements governing the conduct and protection of the public markets. 7.2 Herein, "Personal Information" includes any information about the Subscriber required to be disclosed to a Securities Commission or an Exchange, whether pursuant to a Securities Commission or Exchange form or a request made by a Securities Commission or an Exchange. 7.3 The Subscriber acknowledges and consents to: (i) the fact that the Corporation is collecting his Personal Information for the purpose of completing this Agreement; (ii) the Issuer retaining such Personal Information for as long as permitted or required by law or business practices; (iii) the fact that the Corporation may be required by securities laws, the rules and policies of any stock exchange to provide regulatory authorities with any Personal Information provided by the Subscriber in this Agreement. 8. MISCELLANEOUS 8.1 Subject to Section 8.4 hereof, the Subscriber hereby authorizes the Corporation to correct any formal errors in, or complete any minor information missing from this Agreement and any Appendix that has been 7 executed by the Subscriber and delivered to the Corporation, but the Corporation may not correct any errors in substance without the consent of the subscriber. The Subscriber consents to the filing of such documents and any other documents as may be required to be filed with any Securities Commission in connection with the Private Placement. 8.2 This Agreement, which includes any interest granted or right arising under this Agreement, may not be assigned or transferred. 8.3 Except as expressly provided in this Agreement and in the agreements, instruments and other documents contemplated or provided for herein, this Agreement contains the entire agreement between the Parties with respect to the Units and there are no other terms, conditions, representations or warranties whether expressed, implied, oral or written, by statute, by common law, by the Corporation, or by anyone else. 8.4 The Parties may amend this Agreement only in writing. 8.5 This Agreement enures to the benefit of and is binding upon the Parties and, as the case may be, their respective heirs, executors, administrators and, successors. 8.6 A Party will give all notices or other written communications to the other Party concerning this Agreement by hand or by registered mail addressed to such other Party's respective address which is noted on the cover page of this Agreement. 8.7 This Agreement may be executed in counterparts, each of which when delivered will be deemed to be an original and all of which together will constitute one and the same document and the Corporation will be entitled to rely on delivery by facsimile machine of an executed copy of this subscription, and acceptance by the Corporation of such facsimile copy will be equally effective to create a valid and binding agreement between the Subscriber and the Issuer as if the Corporation had accepted the subscription originally executed by the Subscriber. 8.8. Without limiting the generality of the parties' confidentiality obligations and subject to any duty imposed by any applicable law, it is agreed immediately subsequent to the Closing the Corporation will announce the transaction hereof by issuing a press releases and making such other filings as required by applicable law. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK 8 APPENDIX I U.S. ACCREDITED INVESTOR QUESTIONNAIRE The Subscriber understands and agrees that the Units (which for the purposes of this Questionnaire include the Shares, the Warrants, and the Shares issuable upon the proper exercise of the Warrants) have not been and will not be registered under the United States SECURITIES ACT OF 1933, as amended (the "1933 Act"), or applicable state securities laws, and the Units are being offered and sold by the Issuer to the Subscriber in reliance upon Rule 506 of Regulation D under the 1933 Act. Terms used but not defined in this Appendix have the meanings ascribed thereto in the Subscription Agreement of which this Appendix forms a part. The Subscriber represents, warrants and covenants (which representations, warranties and covenants shall survive the Closing) to the Issuer, (and acknowledges that the Issuer is relying thereon) that: (a) it has such knowledge and experience in financial and business matters as to be capable of evaluating the merits, and risks of the investment and it is able to bear the economic risk of loss of the investment; (b) it is purchasing the Units for its own account or for the account of one or more persons (a "Beneficial Purchaser") for investment purposes only and not with a view to resale or distribution and, in particular, neither it nor any Beneficial Purchaser for whose account it is purchasing the Shares has any intention to distribute either directly or indirectly any of the Units in the United States; provided, however, that the Units may be offered, sold or otherwise disposed of pursuant to registration thereof pursuant to the 1933 Act and any applicable state securities laws or under an exemption from such registration requirements; (c) it, and if applicable, each Beneficial Purchaser for whose account it is purchasing the Units is a U.S. Accredited Investor that satisfies one or more of the categories of U.S. Accredited Investor indicated below (THE SUBSCRIBER MUST INITIAL "SUB" FOR THE SUBSCRIBER, AND "BP" FOR EACH BENEFICIAL PURCHASER, IF ANY, ON THE APPROPRIATE LINE(S)): ____ Category 1. A bank, as defined in Section 3(a)(2) of the 1933 Act, whether acting in its individual or fiduciary capacity; ____ Category 2. A savings and loan association or other institution as defined in Section 3(a)(5)(A) of the 1933 Act, whether acting in its individual or fiduciary capacity; ____ Category 3. A broker or dealer registered pursuant to Section 15 of the United States Securities Exchange Act of 1934; ____ Category 4. An insurance company as defined in Section 2(13) of the 1933 Act; ____ Category 5. An investment company registered under the United States Investment Company Act of 1940; ____ Category 6. A business development company as defined in Section 2(a)(48) of the United States Investment Company Act of 1940; ____ Category 7. A small business investment company licensed by the U.S. Small Business Administration under Section 301 (c) or (d) of the United States Small Business Investment Act of 1958; ____ Category 8. A plan established and maintained by a state, its political subdivisions or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, with total assets in excess of U.S. $5,000,000; ____ Category 9. An employee benefit plan within the meaning of the United States Employee Retirement Income Security Act of 1974 in which the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company or registered investment adviser, or an employee benefit plan with total assets in excess of U.S. $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons who are accredited investors; ____ Category 10. A private business development company as defined in Section 202(a)(22) of the United States Investment Advisers Act of 1940; ____ Category 11. An organization described in Section 501(c)(3) of the United States Internal Revenue Code, a corporation, a Massachusetts or similar business trust, or a partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of U.S. $5,000,000; ____ Category 12. Any director or executive officer of the Issuer; ____ Category 13. A natural person whose individual net worth, or joint net worth with that person's spouse, at the date hereof exceeds U.S. $1,000,000; ____ Category 14. A natural person who had an individual income in excess of U.S. $200,000 in each of the two most recent years or joint income with that person's spouse in excess of U.S. $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year; ____ Category 15. A trust, with total assets in excess of U.S. $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) under the 1933 Act; or ____ Category 16. Any entity in which all of the equity owners meet the requirements of at least one of the above categories; (d) it has not purchased the Units as a result of any form of general solicitation or general advertising, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio, or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising; (e) it agrees that if it decides to offer, sell or otherwise transfer the Units, it will not offer, sell or otherwise transfer any of such Units directly or indirectly, unless: (i) the transfer is to the Issuer; (ii) the transfer is made outside the United States in a transaction meeting the requirements of Rule 904 of Regulation S under the 1933 Act and in compliance with applicable local laws and regulations; (iii)the transfer is made in compliance with the exemption from the registration requirements under the 1933 Act provided by Rule 144 thereunder, if available, and in accordance with applicable state securities laws; or (iv) the Units are transferred in a transaction that does not require registration under the 1933 Act or any applicable state laws and regulations governing the offer and sale of securities; and it has prior to such sale furnished to the Issuer an opinion of counsel or other evidence of exemption, in either case reasonably satisfactory to the Issuer; (f) it understands that upon the issuance thereof, and until such time as the same is no longer required under the applicable requirements of the 1933 Act or applicable U.S. state laws and regulations, the certificates representing the Units will bear a legend in substantially the following form: "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"). THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE 1933 ACT, (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE 1933 ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE 1933 ACT OR ANY APPLICABLE STATE LAWS, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY SATISFACTORY TO THE COMPANY. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA. IF THE SECURITIES ARE BEING SOLD AT ANY TIME THE COMPANY IS A "FOREIGN ISSUER" AS DEFINED IN RULE 902 UNDER THE 1933 ACT, A NEW CERTIFICATE, BEARING NO LEGEND, THE DELIVERY OF WHICH WILL CONSTITUTE "GOOD DELIVERY" MAY BE OBTAINED FROM THE COMPANY'S TRANSFER AGENT UPON DELIVERY OF THIS CERTIFICATE AND A DULY EXECUTED DECLARATION, IN FORM SATISFACTORY TO THE COMPANY AND THE COMPANY'S TRANSFER AGENT TO THE EFFECT THAT THE SALE OF THE SECURITIES IS BEING MADE IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE 1933 ACT." provided, that if Units are being sold under clause (B) above, at a time when the Issuer is a "foreign issuer" as defined in Rule 902 under the 1933 Act, the legend set forth above may be removed by providing a declaration in such form as the Issuer may from time to time prescribe to the Issuer's transfer agent, to the effect that the sale of the securities is being made in compliance with Rule 904 of Regulation S under the 1933 Act; (g) if any of the Units are being sold pursuant to Rule 144 of the 1933 Act, the legend may be removed by delivery to the Issuer's transfer agent of an opinion satisfactory to the Issuer to the effect that the legend is no longer required under applicable requirements of the 1933 Act or state securities laws; (h) it has had the opportunity to ask questions of and receive answers from the Issuer regarding the investment, and has received all the information regarding the Issuer that it has requested; (i) it understands that the Issuer or its registrar and transfer agent may not record any transfer of Units without first being notified that such transfer is exempt from or not subject to the registration requirements of the 1933 Act and applicable state securities laws; (j) it consents to the Issuer making a notation on its records or giving instruction to the registrar and transfer agent of the Issuer in order to implement the restrictions on transfer set forth and described herein; (k) it understands and acknowledges that the Issuer may not successfully file with the United States Securities and Exchange Commission or with any state securities administrator a registration statement in respect of the resale of the Shares in the United States; (l) it understands and agrees that there may be material tax consequences to the Subscriber of an acquisition, disposition or exercise of any of the Units; the Issuer gives no opinion and makes no representation with respect to the tax consequences to the Subscriber under United States, state, local or foreign tax law of the Subscriber's acquisition or disposition of such Shares; in particular, no determination has been made whether the Issuer will be a "passive foreign investment company" ("PFIC") within the meaning of Section 1291 of the United States Internal Revenue Code; (m) it acknowledges that the representations, warranties and covenants contained in this Appendix are made by it with the intent that they may be relied upon by the Issuer in determining its eligibility or the eligibility of others on whose behalf it is contracting thereunder to purchase Units. It agrees that by accepting Units it shall be representing and warranting that the representations and warranties above are true as at the Closing with the same force and effect as if they had been made by it at the Closing and that they shall survive the purchase by it of Units s and shall continue in full force and effect notwithstanding any subsequent disposition by it of such securities. The Subscriber undertakes to notify the Issuer immediately of any change in any representation, warranty or other information relating to the Subscriber or any Beneficial Purchaser set forth herein which takes place prior to the Closing. IN WITNESS WHEREOF, the undersigned has executed this Questionnaire as of the ____ day of _______________________ , 20__. If a Corporation, Partnership If an Individual: or Other Entity: __________________________________ __________________________________ Name of Entity Signature __________________________________ __________________________________ Type of Entity Print or Type Name __________________________________ Signature of Person Signing __________________________________ Print or Type Name and Title of Person Signing EX-10.7 7 ex10-7.txt INVESTMENT AGREEMENT Exhibit 10.7 INVESTMENT AGREEMENT MADE AND SIGNED IN FAX ON THE 27 DAY OF THE MONTH OF MAR, 2008 BETWEEN: EASY ENERGY INC. OTC Company registred under the laws of the State of Nevada (may 17, 2007) 49 Ha'aroshet St. P.O.BOX 6409, Karmial 20100, Israel (hereafter: the "COMPANY ") OF THE FIRST PART; AND BETWEEN: MAIR DUKE. S.S.N 186643876 of 12300 Highgrove CT Raisterstown Maryland 211136 Email: meir@barefeetshoes.com (hereafter: the "INVESTOR") OF THE OTHER PART; WHEREAS: The Company is a public company registered under the law of the state of Nevada USA. AND WHEREAS: The Investor is interested purchasing shares in the Company by means of a private allocation. AND WHEREAS: The Company is interested in allocating Company shares to the Investor as specified below in this Agreement; THEREFORE IT IS DECLARED, STIPULATED AND AGREED BETWEEN THE PARTIES AS FOLLOWS: 1. PREAMBLE AND INTERPRETATION. 1.1 The Preamble to this Agreement forms an inseparable part of this Agreement and will be read as one with its other appendices. 1.2 The headings to the clauses in this Agreement are solely for convenience and they should not be attributed with any weight for purposes of its interpretation. 1.3 No alteration, addition to or diminution of this Agreement will be valid after the date on which it is signed unless made in writing and signed by all the Parties. 1.4 No provision in the terms and provisions contained in this Agreement is intended to derogate from another term or provision of this Agreement but to add thereto, unless otherwise stated in this Agreement. 1.5 A provision and/or expression in the singular will also include the plural and vice-versa, a provision and/or expression in the feminine will also include the masculine and vice-versa and a reference to a person will also include a corporate body and vice-versa. 1.6 Any appendix that is attached to this Agreement forms an inseparable part of the Agreement. 2. THE COMPANY'S DECLARATIONS The Company hereby declares, confirms and undertakes, at the time of signing this Agreement as follows: 2.1 The Company is a public company. 2.2 The Company is registered in Nevada in the United States. 2.3 The Company was duly registered and is qualified to conduct its business as conducted at present, to sign this Agreement and to perform all the activities undertaken therein. 2.4 Signing this Agreement does not constitute a breach of the Company's Articles of Association, it does not contain any inconsistency with the Company's Articles of Association and, to the best of the Company's knowledge, it does not violate the provisions of law or of an agreement or of a competent authority. 2.5 The Company was duly registered pursuant to the provisions of the STATE OF NEVADA COMPANIES LAW (hereafter: the "COMPANIES LAW") is fully valid as at the date on which this Agreement is signed. In addition, the Company has not received any notice that it is about to be deleted from the Companies Registrar up until the date on which this Agreement is signed. The Company is unaware that any dissolution proceedings or receivership proceedings are being conducted against the Company as at the date on which this Agreement is signed and no warnings have been received of the intention to institute proceedings as stated. 2.6 Immediately prior the signing of this Agreement the registered share capital of the Company is composed of 100,000,000 Common Stock of US$0.0001 par value each and 50,000,000 Preferred Stock of US$0.0001 par value each. 2.7 The Company's issued and outstanding share capital immediately prior to the investment is composed of 8,033,319 Common Stock of US$0.0001 par value each, of which, 5,000,000 Common Stocks are held by persons who are affiliates of the Company and therefore are not eligible for 2 sale pursuant to rule 144 under the Securities Act of 1933 (hereby: the "BLOCKED SHARES"), and of 3,033,319 which are publicly held and are eligible for sale by their holders (hereby: "ORDINARY Shares"). 2.8 The following persons are the current acting directors of the Board of Directors of the Company Mr.Guy Ofir (President) and Mr. Emanuel Cohen (Secretary and Treasurer). 2.9 The Company has not declared any dividend that has not been distributed and no decision has been taken for the distribution of bonus shares that have not been distributed. 2.10 The Company conducts its affairs according to any law and according to the instructions of all authorized authorities and is the bearer of all licenses and permits, necessary by law, to conduct its affairs. 2.11 Except as detailed in the Company's SB-2/A the Company has no other asset. 2.12 In consideration for the payment of the sum mentioned in article 4.1 hereby and on the mentioned date thereby - the Company shall allocate to the Investor such number of Company shares as described in ANNEX A to this Agreement. 3. THE INVESTOR'S DECLARATIONS The Investor hereby declares, confirms and undertakes, at the time of signing this Agreement as follows: 3.1 The Investor undertakes that there is no violation of law or any third party rights whatsoever in the commitment in this Agreement. 3.2 The Investor approves that he is aware that the shares which shall be allocated to him according to this Agreement, are allocated to him without any declaration, representation or indemnification (AS IS) (except as mentioned in this Agreement), when they are free of any debt, encumbrance, lien, subjection and/or any other third party rights. 3.3 The Investor declares that, except for the representations which are described in this Agreement and the public reports made by the Company the Company and/or any one on its behalf has not provided the Investor, with any representation, promise, forecast which pertain to the Company and/or its affairs, and that the Investor has not relayed in its decision to purchase the shares on any document or information which is not publicly known. 3.4 The Investor warrants that he has the financial capability to execute the investment according to this Agreement, and has the financial 3 experience and knows how in order to estimate the risks involved in such investment. 3.5 The Investor declares that he is an experienced investor, that the use of the consideration is as described in article 5 to this Agreement, and that he is aware of the risks involved in investing in start up companies. 3.6 The Investor further warrants that he has considered the tax implications which apply to him in connection of the execution of his investment and that the Company has not presented him with any representation in accordance with such tax implications. 3.7 If Investor is a corporation, then the Inventor declares that the corporation was duly incorporated under the instruction of the Israeli Law, has the requisite power to sign and obligate under this agreement and that all authorized organs of the Investor have undertaken the necessary resolutions in order undertake the commitments in this Agreement. As long as pertains to the Investor, the obligations taken under this Agreement are not in breach of any legal order, agreement or decree, and are not subject to any other authorization or agreement. 3.8 . The Investor declares that prior to signing this Agreement he has made a legal and accounting due diligence of the Company, that the Company and its advisors have cooperated with the Investor in accordance with the due diligence review, answered all of the Investor's question and have provided Investor with all documents which were requested by him. 4. THE TRANSACTION 4.1 In consideration for the allocation, at the closing date of such number of the Company's Blocked Shares as detailed in Annex A' to this Agreement, according to a rate of US$0.7 per share (the "SHARES"), the Investor shall invest, simultaneously with the aforementioned allocation, at the closing date the cash sum detailed in Annex A to this Agreement (the "CONSIDERATION"). 4.2 Immediately prior to the Closing and after the signing of this Agreement the Company intends to split its shares into 1:10 ratio so that each one share of US$0.0001 par value shall equal to 10 shares of US$0.00001, so that at the time of allocation of the Shares to the investor each share shall be valued at a rate of US$0.07 (the: "Split"). 4.3 All the obligations according to this Agreement are considered as the situation after the Share Split. 4 4.2 the Shares allocated to the Investor under the term of this agreement shall be protected by Ratchet Mechanism for a period of 18 months. In this article 4.2 RATCHET MECHANISM shall have the following meaning - at the end of a period of 18 months from Closing only in an event that the Company's share price shall be less than US$0.07 per share, in order to protect the Investor for his investment of US$300,000 in consideration for the Shares, the Investor shall be entitled for an allocation of such number of shares from the Company representing the difference between US$0.07 and the average share price 30 days prior to the end of the aforementioned 18 month period (hereby: the "Deadline") according to the following formula: "N" - Number of Issued and outstanding shares (80,333,319) on a fully diluted basis. "P1" - $0.07 "P2" - Average Price per share during a period of 30 days prior to the end of a period of 18 months from closing. "I" - amount invested by Investor (US$300,000) "CV" - Company Value = N*P "X" - Number of Blocked Shares which was issued to Investor at the Closing. "S" - Number of shares that ought to be held by Investor at the end of 18 months according to the Ratchet Mechanism. "T" -Number of shares that should be allocated to Investor after 18 months according to the Ratchet Mechanism. CV = N*P1 X = I/P1 S = I/P2 T = S-X 4.3 The shares shall be allocated free and clear of any subjection, lien, encumbrance, claim or any other third party rights. 4.4 The Ordinary Shares confer upon their holders all rights accruing to a ownership of the Company, including among other, the right to participate and vote in the Company's shareholders meetings, whether ordinary, special or extra ordinary, the right to partake in the distribution of dividends, bonus shares, rights and similar, and also 5 the right to share in the distribution of the Company's assets upon liquidation or dissolution, all as described in the Company's Articles of Association. 4.5 Furthermore the shares shall confer upon its holders the right to participate and vote in the general meetings on which agenda there shall be the appointment of members to the Board of Directors of the Company, there dismissal and the appointment of their replacements and any other similar decisions pertaining to the directors, all pursuant to the Company's Incorporation documents as shall be set from time to time. 4.6 In the event the Company shall register the Blocked Shares for trade the Company shall commits to register the shares allocated in the Investor for trade as well. 5. USE OF CONSIDERATION 5.1 The Consideration which shall be received in accordance with this Agreement shall be used by the Company for its promotion and its day to day activity. 6. SUSPENDING CONDITIONS 6.1 This Agreement is subject to the approval of this Agreement by the Company's board of directors. 7. THE CLOSING The parties shall sign this Agreement by Fax (the "CLOSING DATE") and shall take the following actions. 7.1 The Company shall deliver the Investor the authorized copy of the authorizations and certificates according to article 6 above. 7.2 The Investor shall transfer the Consideration amount to the trustee account of Attorney Victor Tshuva (the "Trustee") according to the account details which shall be provided by the Trustee. 7.3 The Company shall allocate the Shares to the Investor, register him in the Company's shareholders registration book as a shareholder and shall issue him a share certificate for that affect. 7.4 The parties shall undertake any other action necessary for the completion of the transaction according to this Agreement. 6 8. TAXES AND EXPENSES 8.1 The Company shall bear all of the expenses deriving from the share allocation subject of this Agreement. 8.2 Each party shall bear the taxes which apply to it as a result of the share allocation subject of this Agreement. 9. GENERAL The Parties undertake to act in good faith and in mutual cooperation in order to implement the provisions of this Agreement and to take any action, to sign any document and to obtain any authorization that is required for the proper implementation of the provisions of this Agreement. 10. NOTICES 10.1 A notice that is sent by registered mail to the Parties' addresses as specified in the Preamble to this Agreement, will be deemed to have been received by the Party to which it is addressed within 24 hours of the time of its dispatch. If a notice as aforesaid is delivered by hand, it will be deemed to have been received at the time of its delivery. 10.2 Either Party may change its address for purposes of this Agreement to another address in Israel in a written notification that will be delivered to the other Party at its address as stated. AND IN WITNESS WHEREOF THE PARTIES HAVE SET THEIR HANDS IN THE PLACE AND ON THE DATE The Investor The Company /s/ Meir Duke /s/ Easy Energy 7 ANNEX A Number of Shares to be allocated: 4,285,714 Amount Invested by Investor in consideration for the Shares: US$300,000 8 EX-23.1 8 ex23-1.txt CONSENT OF MOORE & ASSOCIATES Exhibit 23.1 MOORE & ASSOCIATES, CHARTERED ACCOUNTANTS AND ADVISORS PCAOB REGISTERED CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the use, in the registration statement on Form S-1 Amendment No. 2 of Easy Energy, Inc, of our report dated July 3, 2008 on our audit of the restated financial statements of Easy Energy, Inc. as of March 31, 2008 and December 31, 2007, and the related restated statements of operations, stockholders' equity and cash flows for the three months ended March 31, 2008, inception on May 17, 2007 through December 31, 2007 and inception on May 17, 2007 through March 31, 2008, and the reference to us under the caption "Experts." /s/ Moore & Associates, Chartered - ----------------------------------------- Moore & Associates Chartered Las Vegas, Nevada July 3, 2008 2675 S. Jones Blvd. Suite 109, Las Vegas, NV 89146 (702) 253-7499 Fax (702) 253-7501 CORRESP 9 filename9.txt Easy Energy, Inc. Suite 105 - 5348 Vegas Dr. Las Vegas, NV 89108 Tel: +1 (702) 442-1166 July 7, 2008 Via EDGAR and Fax Perry Hindin, Special Counsel Mail Stop 3561 Securities and Exchange Commission Division of Corporation Finance 100 F Street, NE Washington, DC 20549 Re: Easy Energy Inc. (the "Company") Form S-1 File No. 333-150468, filed April 25, 2008 and amended April 28, 2008 Dear Mr. Hindin: The purpose of this letter is to respond to your letter of May 22, 2008 with respect to the above-captioned filing. We are concurrently filing Pre-Effective Amendment No. 2 to Form S-1 (the "Amended S-1") as well as an amendment to our Form 10-Q for the quarter ended March 31, 2008. Please note that we have engaged Z.A.G/S&W LLP as our new counsel for securities law issues and communications should be made with Edwin L. Miller Jr., Esq. or Oded Har-Even, Esq. at the numbers provided at the end of this letter. For ease of reference, our responses are keyed to your comments. Registration Statement 1. We note that the registration statement covers the resale of common shares that may be being offered by an affiliate (Meitav Gemel, Meitav Pension and Meitav Mishan entities) in a large amount. Generally, we view resale transactions by related parties of this amount as an offering "by or on behalf of the issuer" for purposes of Rule 415(a) (4) of Regulation C. Under the rule, equity securities offered by or on behalf of the Company cannot be sold "at the market" price unless the offering satisfies the requirements set forth in the rule. Therefore, you should: * file a registration statement for the "resale" offering at the time of each exercise because you are not eligible to conduct the offering on a delayed or continuous basis under Rule 415(a)(1)(x); * register the transaction on a form that you are eligible to register a primary offering; * identify the affiliate selling shareholder as an underwriter in the registration statement; and * include the fixed price at which the underwriter will sell the securities for the duration of the offering. If you do not agree, please advise the staff of the company's basis for determining that the transaction is appropriately characterized as a transaction that is eligible to be made on a shelf basis under Rule 415(a)(1)(i). Address in your analysis shares previously registered for resale by the affiliate and all other relationships you have with the affiliate. Response to Comment No. 1: We do not believe that any of the selling shareholders are affiliates of the Company, and believe that this non-affiliate status is clear. Meitav Investment House Ltd. ("Meitav") is the parent company of all the entities listed in the selling shareholder table with the Meitav name, as well as Tailor Made Capital, Ltd. (collectively: the "Meitav Entities"). Meitav is beneficially owned by Messrs. Zvi Stepak and Shlomo Simanovsky through intermediary entities. Meitav has reported its beneficial ownership in the Company on a Schedule 13G filed on March 19, 2008. The percentage ownership of the Company reported by the Meitav Entities was 9.99%. This percentage was based on an appendix to the warrant issued by us to the Meitav Entities setting up exercise limitations pursuant to which the warrant holder shall not have the right to exercise any portion of the warrant to the extent that, after giving effect to such issuance, the holder along with its affiliates (which include all of Meitav Entities) shall beneficially own more than 9.99% of our common stock. This provision, however, may be waived by the holder at its election upon not less than 61 days' notice to us. We note also that several shareholders own a much higher percentage of the Company, namely, Mr. Guy Ofir and Mr. Emanuel Cohen. Each of them beneficially owns 21.5%. We also call your attention to an article in in INSIGHTS, volume 22, Number 1, January 2008 authored by Keith Higgins et al where the authors suggest that "in light of the Securities Act definition of "control" and earlier SEC guidance on the topic, a stockholder that owns less than 20 percent of an issuer's outstanding capital stock and that does not have other significant relationship with the issuer should not be considered an affiliate". Meitav has no representation on the Company's Board of Directors and none of the Company's officers or directors are affiliated with Meitav or any of the Meitav Entities. Thus, we believe that neither Meitav nor any of the Meitav Entities should not be regarded as an affiliate of the Company. Fee Table 2. Please tell us how you determined that $0.225 was the most appropriate price to use for purposes of calculating the filing fee. Response to Comment 2: The filing fee was incorrectly calculated. The average of the high and low prices of the Company's common stock on the OTC Bulletin Board on April 21, 2008 was $0.30 and not $0.225. A correction to that effect has been made in the Amended S-1 and additional money wired to cover the difference. 2 Summary of Financial Data, page 2 3. We note that you disclose a net gain of $324,942 on page 2 for the period from May 17, 2007 (inception) to March 31, 2008. Your Statement of Operations on page F-3 indicates that you had a loss for this period of $347,555. Please revise to disclose the correct amount on page 2. Response to Comment 3: The number on page 2 was an error. The correct amount appears in page 2 of the Amended S-1. Risk Factors, page 3 4. Please add a risk factor which discusses the limitations inherent in a provisional patent application, including 12-month expiration. We note you filed your provisional application on August 20, 2007. In an appropriate place in the prospectus explain your present intentions and plans regarding filing a non-provisional application. Disclose the dollar amount in your "estimated expenses" you will devote to this purpose. Response to Comment 4: This risk factor has been included on page 3 of the Amended S-1. The dollar amount estimated in connection with the filing of the non-provisional application was added to the table on page 20 of the Amended S-1. On June 30, 2008, we filed a non-provisional application based on the provisional application. We note that fact on page 14 of the Amended S-1. We have no operating history...page 3 5. It is unclear why you refer to "the development, testing and marketing of our website." Please clarify. Response to Comment 5: A correction was made on page 4 of the Amended S-1 clarifying the above statement. 6. Please clarify the basis for anticipating revenues could be generated as early as 8-10 months. Response to Comment 6: The Company is in the final stages of completion of the production design, which will then be presented for the certification procedure prior to starting mass production. The Company anticipates that the entire process of finalizing the production design will be completed in the 3rd quarter. Based on arrangements made with potential distributors and the development stage of our product, we believe that we are at least 8-10 months away from generating our first revenues. Please also see the correction made on page 4 of the Amended S-1. 3 Because our executive officers and directors live outside...page 5 7. Please revise to clarify why you recently changed the identification of your executive offices location from Karmiel, Israel to Las Vegas, Nevada. We note that your two executive officers reside in Israel. Explain the nature of your offices in Las Vegas. Response to Comment 7: The Company uses its Las Vegas, Nevada office as a communication and mailing address. Day-to-day operational activities are conducted in Israel, where the office has moved from the city of Karmiel to the city of Naharia. The reason for the use of the Las Vegas address is a request from parties we have been negotiating with that the Company use a U.S. and not an Israeli address for its official correspondence due to the ongoing conflict in the Middle East. Reference to our new Israeli address has been added on page 1 of the Amended S-1. Because our executive officers control..., page 6 8. The ownership position of your executive officers stated here is inconsistent with disclosure at page 22. Please reconcile. Response to Comment 8: A correction has been made on page 7 of the Amended S-1. Selling Shareholders, page 9 9. As to each selling shareholder briefly describe the transaction(s) in which the shareholder acquired the shares. Where services were received in exchange for the selling stockholders stock, please include a description of the services rendered. Provide the date(s), form of consideration, and price paid. Response to Comment 9: The following paragraph has been added to the text preceding the selling shareholders table on page 10 of the Amended S-1. "The selling stockholders acquired their securities (1) through a private transaction exempt from registration pursuant to Regulation S of the Securities Act of 1933, as amended (the "Act"), pursuant to which we sold to the Meitav entities listed below (the "Meitav Entities") on February 8, 2008, 367,647 units, each unit being offered for $1.70, for aggregate gross proceeds of $625,001. Each unit consisted of (i) ten shares of our common stock and (ii) thirty Class A Warrants. Each Class A Warrant entitles the holder thereof to purchase one share of common stock at an exercise price of $0.27 per share, expiring five years from the date of purchase of the Warrant; (2) as compensation for legal services and services in connection with the facilitation of the financing of the Company by the Meitav Entities and Tailor Made Capital Ltd. ("TMC"). In connection therewith, on March 3, 2008, we issued Mr. Victor Tshuva 300,000 shares of restricted common stock for an aggregate price of $3,000 and warrants to purchase 1,000,000 shares of our common stock at an exercise price of $0.15 for a period of five years; (3) as a commitment fee of 4 882,353 shares of the Company's common stock and a warrant to purchase 3,000,000 shares of the Company's common stock to TMC for arranging the equity line pursuant to the agreement dated March 10, 2008 between the Company and TMC; and (4) 750,000 shares of our common stock as a consideration for investor relations services to be provided by Falcon Financial Services LLC." 10. Please identify the individuals with beneficial ownership over the shares held by the entities identified in this table. Response to Comment 10: The individuals, as described in Meitav's Schedule 13G filed on March 19, 2008 are Messrs Zvi Stepak and Shlomo Simanovsky. This information has been added as a footnote to the selling shareholders table. 11. Describe any affiliations among the company, its officers and directors and/or each of the selling shareholders. For example, we note multiple entities are listed as "Meitav Gemel Ltd," "Meitav Pension Ltd," and "Meitav Mishan Ltd." Response to Comment 11: As previously indicated, there is no affiliation between Meitav and the Company, its officers or its directors. All of the Meitav Entities are related to each other and are subsidiaries of Meitav, which is controlled by Messrs. Zvi Stepak and Shlomo Simanovsky through intermediary entities. To our knowledge, there is also no other affiliation among Victor Tshuva, Falcon Financial Services LLC, Meitav, its beneficial owners or any of the Meitav Entities. The Company, its officers or directors are not related to any of the selling shareholders. A paragraph to the foregoing effect has been added to the text preceding the selling shareholders table. 12. Please confirm supplementally that shares hereby registered on behalf of Tailor Made Capital do not include any shares to be sold pursuant to the equity line portion of the March 10, 2008 Securities Purchase Agreement. Response to Comment 12: We have been advised by Tailor Made Capital that the shares registered on behalf of Tailor Made Capital do not include any shares to be sold pursuant to the equity line portion of the March 10, 2008 Securities Purchase Agreement. 13. It appears the shares registered on behalf of Tailor Made Capital may be unearned until performance under the equity line is completed. If so, then such securities may not be registered until the investment transaction is completed. Please revise or advise. Response to Comment 13: All of the shares registered on behalf of Tailor Made Capital have been fully earned on March 10, 2008, and granted to Tailor Made Capital as a commitment fee in consideration for setting up the equity line. 5 Description of Business, page 13 14. Please provide us source copies of market statistics presented. Please mark the copies to clearly identify the information you cite, and cross-reference to the place the market data appears in the prospectus. Tell us whether the sources of the cited data have consented to your use of their names and data and whether any of the reports were commissioned by you or prepared specifically for your use. Response to Comment 14: Statistics included in our report were all gleaned from public-domain sources. Therefore no consent was required or asked for in connection with our use of data or names, mainly over the internet. Nevertheless, we deleted all such statistics to avoid any questions or concerns. No studies were prepared specifically for us or commissioned by us. 15. We note your references to Internet addresses. Please see footnotes 41-43 and the related text of SEC Release 33-7856 (April 28, 2000) regarding your responsibility for hyperlinked information and the related filing requirements. Response to Comment 15: As we do not intend to be responsible for hyperlinked information, all references to internet addresses have been deleted from pages 15 and 16 of the Amended S-1. Technical Brief -page 14 16. We note on your website what is represented as your product, including illustrations of the product in use. Please clarify in your disclosure the status of the product so depicted and described. Response to Comment 16: We are currently engaged in completion of final design before passing the certification procedure required to commence mass production. We have included an explicit statement to the effect that the product is not yet in the market on page 15 of the Amended S-1. 17. Please explain why time to charge 10% is considered significant or representative. How is this related to cellular phone battery operating characteristics? Also, are incremental levels of effort and charge proportional? For example, is a 100% charge achieved by 20 minutes of generation? Also, it appears that to achieve a 50% charge would take 5 cycles of 2-minute string-pulling followed by 6-10 minutes of power transfer. Please revise to clarify the effort and time involved in achieving meaningful charging of the device battery. 6 Response to Comment 17: The assumption that to achieve a 50% charge would take 5 cycles of 2-minute string-pulling followed by 6-10 minutes of power transfer is not correct. The overall charge time depends upon the "tag" battery capacity, its age and the start state-of-charge at discharge point. The following statement has been added as a clarification and simplification, and is included at page 15 of the Amended S-1. "Cellular phones consume electric power at a rate which fits to cell antennas, and the like. For example, cell phone power consumption for conversation mode (50% talking / 50% listening) near to a cellular antenna is approximately 0.5 watts. Since nominal YoGen output is 5 watts (ten times higher), for every five minutes of cell phone usage under these conditions, our device can replace the energy consumed in 30 seconds. This data only applies to short conversations (typically up to 5 minutes) because during short conversations, a cell phone battery's state-of-charge does not change significantly. For example, a half hour conversation under these conditions shall require about 3 minutes to be brought to its pre-conversation charge state. In all cases, the charge is proportional to incremental levels of effort. The efficiency with which our YoGen device recharges cell phone is significantly dependent on the phone's dedicated built-in charging controller which regulates maximum charging current. For a majority of up-to-date cellular phone models, these controllers permit a charging current supplying about 5 watts, which is the output of our device. A few older cellular phone models permit less of a charge. For those phones, YoGen is equipped with a switch for a "lower power" mode. As indicated before, the YoGen device will generate 20 watts of peak power for each cord pull. 20W is a peak instant power which an internal alternator can generate when the cord is pulled very quickly. It is a pure technical characteristic which was possible to measure only in a laboratory by accessing YoGen's internal points. We have not used any external third party testing in connection with this process. YoGen is based on a novel axial-field synchronous generator (alternator) producing an alternating voltage of frequency and amplitude which are proportional to its rotation speed. Since it is driven by reciprocating pull-release hand movement and is outputting energy during rotation, its voltage and frequency vary considerably through the period. Cellular phone battery controllers require a definite voltage and internal impedance of chargers to allow them to charge the batteries. YoGen includes an electronic converter outputting a stabilized DC voltage falling under load to emulate required impedance. YoGen has 2 modes: "nominal power" (with nominal impedance) and "lower power" (with higher impedance). 7 In its basic format, YoGen includes an internal 400/800 mAh Li-ione buffer (back-up) battery considerably widening the stabilized power output from zero pulling speed (the battery gives power) up to pulling high speed (the battery receives power). The foregoing statistics are based solely on our own limited internal testing and have not been verified by an outside testing agency. We are now working to validate these results in external laboratories. To date, we have produced three prototypes of our device, each with an internal battery but without a "lower power" option. These prototypes have been tested in our laboratory with approximately 15 cellular phone models. Our results confirm the statistics contained above, provided that the pulling process is done correctly." 18. Please describe the basis for the performance claim of 20 watts. Include voltage and amperage figures for the generator and the internal battery. Further, if not validated by independent expert third party testing, so disclose. Response to Comment 18: See the response to Comment 17. 19. Clarify whether any prototype models created to date have achieved the performance levels noted herein. Response to Comment 19: See the response to Comment 17. Competition, page 15 20. Please provide adequate description of competitive products in the prospectus. Do not cite competitors' websites as a means of providing disclosure. Response to Comment 20: Although there are several other ways of recharging batteries for a cell phone, the only ones we know of that are in direct competition are the hand-held human powered chargers. A paragraph containing names of direct competitors along with a description of such competitors' products was added to page 16 of the Amended S-1. Management's Discussion. page 17 Overview, page 17 21. We note the discussion on page 17 which states, "on January 29, 2008 we announced on the completion of the fully working prototype of the man-powered charger solution for battery powered small devices." Your discussion further indicates that one of your business objectives is to complete the design of your product. This discussion does not clearly 8 indicate the status or expected plan of your product development, including, for example, the personnel or organization which has been hired to implement the plan. Please revise to clearly discuss the status of the development of your product and indicate the expected time frame and costs to fully develop your product. Response to Comment 21: The announcement of the fully working prototype refers to an engineer's prototype designed for testing the principles behind the product. Now that such principles have been evaluated, we are working and nearing completion of the manufacturing design which is designed to minimize the size of the unit and improve human engineering of the product. We estimate that we could begin the manufacturing of the products during the third quarter of 2008. We have selected a contractor to assist us with this process. We estimate the costs to be incurred by the time we have an operating manufacturing line ready for mass production to be at approximately $400,000. The disclosure on page 19 of the Amended S-1 has been revised accordingly. 22. We reference Note ** on page 18 which indicates that you prepaid $100,000 of this amount. Please reconcile this with the prepayments of $250,000 discussed on page 4. In addition, the discussion on page 18 indicates that the projected operating expenses for the next twelve month period total $727,000. Please clarify if you have already prepaid $250,000 of this amount and indicate the additional amount you will need for estimated expenses in the next twelve months. Response to Comment 22: The Amended S-1 has been revised in accordance with the Staff's comment. The Company has paid a total of $200,000 for product development costs which will be completed as per the "Target Date for Completion" column on page 20 of the Amended S-1. These amounts have been charged to the statement of operations as these costs are "soft" costs and the Company does not have adequate evidence to justify keeping them on the balance sheet. Additionally, the Company has paid $50,000 for consulting services which are to be provided over the subsequent year. As a result, of the $250,000 in costs that were "prepaid" by the Company, $50,000 have been included in prepaid expenses on the balance sheet and the remainder, $200,000, have been charged to the statement of operations. 23. Please revise to provide a discussion of your results of operations and the specific expense amounts recorded in your financial statements each period Response to Comment 23: The following discussion was added to page 20 of the Amended S-1. "Results of Operations During the three months ended March 31, 2008 the company incurred operating expenses of $406,972 which include $200,000 of product development costs, $202,497 in professional fees related to accounting and legal and $4,475 of general and administrative expenses. These operating costs were offset by $1,260 of interest income. 9 Net Loss Our company incurred a loss of $405,712 for the period ended March 31, 2008, resulting from $371,942 of cash used in operating activities offset by an increase in prepaid expenses of $50,000 from the period of ended December 31, 2007. 24. Please explain in reasonable detail the origin of your proposed product. Discuss the expertise of the inventor. Response to Comment 24: The following statement has been added as a clarification and simplification, on page 19 of the Amended S-1. "This prototype is a "successor" of several practically validated approaches suggested by its inventors as outlined below: Charger shall be powerful enough to provide a significantly higher talk-to-charge time ratio (current models operate at about 1:1); Charger shall include a converter providing both utilization of input mechanical energy through the entire speed range and stabilized electric output; Charger shall have an option to include a back-up internal battery; Charger size shall be not greater than those of today's cell-phones and should be as thin as possible; and Mechanical input shall be of a reciprocating pull-release type since such a hand application allows for extended use without tiredness. This product is based on a novel dedicated application of the unique high power-density planar alternator technology developed and tested by one of the inventors. This technology allows for implementation of these principles since and makes it possible to provide an extremely slim and unique compact package containing all charger components, which include: mechanical transmission electronic converter, back-up battery and the alternator itself. The technology of the proposed product was invented by Alexander Sromin and Michael Fridhendler. Mr. Sromin is an alumnus of the Academy for Aviation & Space Instruments in St. Petersburg, Russia with 22 years of research and development experience related to a wide range of electric machines and electromechanical systems. His professional scope covers compact permanent magnet motors, actuators (including linear, rotating, reciprocating, multi-axis, etc.) and generators in the range from MEMS up to 100 KW. He is an author of more than 30 articles and inventor of 10 inventions. Mr. Friedhendler graduated from The Technion University in Haifa, Israel. He has 25 years of experience in multi-disciplinary hi-tech ventures promotion and technological support. He succeeded in numerous application projects in the field of mobile and internet GPS and J2ME software projects among others. His expertise relates to electronics, communications, cellular technology, internet and video data transfer. 10 Both Mr. Sromin and Mr. Fridhendler worked for Pipera Technologies Ltd. ("Pipera"), a company wholly owned and fully funded by our president and director, Mr. Ofir, and during the course of their work, developed the technology of the proposed product. Mr. Sromin and Mr. Fridhendler have been assisted by Mr. Roman Lanzet that serves as production manager at Pipera. Mr. Sromin, Mr. Fridhendler and Mr. Lanzet assigned their rights in the technology of the product to the Company for no consideration pursuant to the terms of the assignment agreement dated August 15, 2007 filed by the Company as exhibit 10.3 to the Company's registration statement on Form SB-2 filed on October 24, 2007." 25. Discuss the terms of the technology transfer. Response to Comment 25: See the response to Comment 24. 26. Discuss how and by whom the prototype model was created. Response to Comment 26: See the response to Comment 24. Liquidity and Capital Resources, page 18 27. Please discuss the components of your cash flows in operating periods presented in the financial statements. Response to Comment 27: The following discussion was added to page 21 of the Amended S-1: "As of March 31, 2008, we had cash of $725,747, representing a net increase in cash of $653,059 since December 31, 2007. Cash generated by financing activities during the three months ended March 31, 2008 amounted to $1,025,001 resulting from the sale of stock in private placements during February and March of 2008. Cash used in operations amounted to $371,942 represented by a loss of $405,712 offset by an increase in prepaid expenses from the previous balance sheet of $50,000 and non-cash adjustments for contributed capital and common stocks and warrants issued for services totaling $83,770" 28. We note you have previously issued shares for services. Please discuss this prior practice and future intentions. Response to Comment 28: As stated above, we issued shares in consideration for services to both Falcon Financial Services LLC and Mr. Victor Tshuva. We also issued shares to Tailor Made Capital as a commitment fee. We intend to continue to use our shares as a form of consideration in selected contracts from time to time. A statement to that effect has been added to page 21 of the Amended S-1. 11 29. Please discuss in reasonable detail the historic and prospective capital-raising undertaken. We note, for example, numerous transactions described in Note 5 to the financial statements and elsewhere in the registration statement, and the Securities Purchase Agreement dated March 10, 2008. Response to Comment 29: A description of major financing transactions and their terms, including the our intentions as to future financing has been added to page 21 of the Amended S-1 Security Ownership..., page 22 30. Please ensure that the table includes any groups, such as investment entities under common control. See Regulation S-K Item 403(a). In this regard we note multiple entities listed as "Meitav Gemel Ltd," "Meitav Pension Ltd," and "Meitav Mishan Ltd." in the Selling Shareholder section and also note that the warrants held by them are immediately exercisable. Please also provide the footnote information required by Item 403(a). Response to Comment 30: The requested information has been added as a footnote to the selling shareholders table in the Amended S-1. Application of Critical Accounting, Policies, page 23 31. Please revise to disclose your specific critical accounting policies. This section should also be moved to your management's discussion and analysis. Refer to Release No. 33-8098. Response to Comment 31: The Amended S-1 was revised on page 22 to include a paragraph regarding specific critical accounting policies. Committees of the Board, page 20 32. Reconcile disclosure in the penultimate paragraph of page 20 as well as elsewhere in your prospectus regarding references to your "sole director" with the disclosure on page 19 indicting you have two directors. Response to Comment 32: Changes were made on pages 24, 25 and 26 of the Amended S-1. Certain Relationships and Related Transactions, page 23 33. Please revise to include the related party product development arrangement discussed in Note 6 to the financial statements. 12 Response to Comment 33: The required disclosure was added in page 27 of the Amended S-1. Report of Independent Registered Public Accounting Firm, Page F-1 34. We note that the third paragraph of the report of your independent registered public accounting firm states, "since inception on May 17, 2008 through March 31, 2008". Please have your Independent Registered Public Accounting Firm revise their report to include the correct inception date. In addition, the last paragraph references an accumulated deficit of $397,544, which does not agree with the amounts in your financial statements. Please tell us why these amounts do not agree. Response to Comment 34: Our independent registered public accounting firm has provided an updated report where the inception date and accumulated deficit agrees with the financial statements. The amounts did not agree due to an error made by both the Company and the auditor. The error has been corrected in the updated report. Financial Statements General 35. Please update the financial statements as required by Rule 8-08 of Regulation S-X. Response to Comment 35: The financial statements have been updated in accordance with Rule 8-08. We are also filing an Amended 10-Q to include such corrected financial statements. Balance Sheets, page F-2 36. Please tell us why the stockholders' equity amounts in the balance sheets on page F-2 do not agree with the totals in the statements of stockholders' equity on page F-4. Response to Comment 36: A correction was made in page F-4 of the Amended S-1. These amounts did not agree as a result of rounding errors in the process of the amendment of the financial statements. 37. We note the discussion on page 18 that you have prepaid $250,000 of your estimated expenditures of $727,000 over the next 12 months. Please tell us where the $250,000 in prepaid expenses is recorded in your financial statements. The accounting for your prepaid expenses should be clearly disclosed. We note that you have included $105,000 as a contra-equity account on your balance sheet on page F-2. Please disclose the nature of this amount and the related accounting treatment. Response to Comment 37: The Amended S-1 was revised in accordance with the Staff's comment. $200,000 of the prepaid expenses were included in product development in the income statement as they are considered soft costs. The remaining $50,000 is included in prepaid expenses as this is considered prepaid 13 consulting expenses which include services for the upcoming year-end. The $105,000 included in the contra-equity account reflects shares issued for services to be provided by the consultant of the company in the future. Under GAAP, because the prepaid expenses were not paid in cash but rather in stock, such amount needs to be included as a contra-equity account. Statements of Cash Flows, page F-5 38. Please tell us what you mean by "net loss being cash from operating activities" in the first line in your statements of cash flows on page F-5. In addition, tell us where the $50,000 increase in prepaid expenses is reflected in the balance sheet. Please tell us why stock issued for services is reflected as a non-cash activity and not included as an addition in net cash (used) by operating activities and whether this value represents non-cash compensation included in expenses for the period. Response to Comment 38: The statement of cash flows in the Amended S-1 was revised on page F-4 to address the Staff's comment. The original comment of "net loss being cash from operating activities" was included as both "net loss" and "cash from operating activities" were the same figure and thus consolidated into the same line item in the first draft of the financial statements. Subsequently, the financial statements were amended to include additional items in "operating activities" but amending the line that reads "net loss being cash from operating activities" was inadvertently overlooked. Note 2 - Significant Accounting Policies, page F-7 39. We note that you account for income taxes under the guidance of SFAS 109. FIN 48, an interpretation of FAS 109, is effective for the Company. Please revise to disclose whether the accounting for income taxes is in compliance with the requirements of FIN 48. Response to Comment 39: The required disclosure was added to Note 2 of the financial statements on page F-6 of the Amended S-1. Note 3 - Going Concern, page F-7 40. Please revise to provide a detailed discussion of your financial difficulties and your viable plan to overcome these difficulties and address the going concern issues. Your discussion should also include your plans to fully develop your products and services, liquidity needs and expected sources of financing. Please refer to the requirements of FRC 607.02. Response to Comment 40: Note 3 was revised to provide further information as required. 14 Note 5 - Capital Stock, pages F-8 and F-9 41. Please revise to clearly disclose how you valued and accounted for each issuance of stock and warrants to employees, consultants and other third parties for services, including how you applied the guidance in SFAS 123R and EITF 96-18. We note that the exercise prices of many of the issuances are significantly below quoted market prices and prices of private placement issuances. Please disclose the accounting and quantify the expense recorded for each of these issuances. Response to Comment 41: Please refer to pages F-8 and F-9 of the financial statements in the Amended S-1 for updated disclosure with respect to the valuation of the shares issued for services. Specifically, please refer to paragraphs 7, 8 and 11 of Note 5 - Capital Stock under the heading "Issued and Outstanding" for additional disclosure with respect to SFAS 123R and EITF 96-18. Note 6 - Related Party Transactions, page F-9 42. We reference your discussion in Note 6 that your directors provide office space free of charge. Please tell us why you have not recorded the estimated value of this office space in your financial statements. Refer to the requirements of SAB Topic 1.B.1. Response to Comment 42: The estimated value of the above referenced office space has been recorded in our financial statements. Please refer to page F-9 of the S-1 for the following revision: "The Company's directors provide office space free of charge. The Company has recorded the estimated value of the office space of $1,000 per month as a contribution to capital." Note 8 - Recent Accounting Pronouncements, page F-10 43. We reference your discussion of recent accounting pronouncements on page F-10. We also note that the adoption of these Statements is not expected to have a material effect on your financial statements. Since certain of these pronouncements are already required to be adopted please revise to indicate the impact of the adoption of the pronouncement, if applicable, and the expected impact for those that have not yet been adopted. 15 Response to Comment 43: Note 8 was revised in accordance with the Staff's comment. Please refer to the final line at the end of each pronouncement for reference of the impact of these pronouncements on the financial statements. Also please refer to the last line of Note 8 stating that: "The past and future adoption of these Statements did not have and is not expected to have a material effect on the Company's current financial position, results or operations, or cash flows." Item 15. Sales of Unregistered Securities, page II-1 44. Revise to state the basis relied upon for the exemption claimed for each unregistered transaction. Response to Comment 44: Item 15 of the Amended S-1 was revised to include the relied upon exemptions for each unregistered transaction. Item 16, Exhibits, page II-4 45. Please revise the exhibit table to identify the filing type, filing number and filing date related to each exhibit listed as "previously filed." See Regulation S-K Item 601(a)(2) and Securities Act Rule 411(d). Response to Comment 45: The Exhibit table was revised to address the Staff's comment. 46. Please file all material agreements relating to sales of securities. Response to Comment 46: The Exhibit table has been revised to include all material agreements relating to sale of securities and all such agreements have been filed with (or incorporated by reference into) the Amended S-1. 47. Please ensure that all exhibits are filed in complete form. For example, we note in Exhibit 4.1 to your Form 8-K filed March 24, 2008 references are made to "Exhibits" to the agreement that were not filed. Please review all previously filed exhibits and re-file in complete form, as appropriate. Response to Comment 47: All exhibits related to Exhibit 4.1 of the Current Report on Form 8-K (the "8-K") filed on March 24, 2008, are now filed as part of an amendment to the 8-K filed simultaneously herewith. 16 Exhibit 5.1 48. The opinion must be current and valid as of the date of effectiveness of the registration statement. Please obtain a revised opinion that removes the assertion of no obligation to update the opinion. The opinion should also refer to the registration statement by file number. Alternatively, you may file a revised opinion that is dated as of the effective date. Response to Comment 48: A new form of opinion from our new counsel, Zysman, Aharoni, Gayer & Co./ Sullivan & Worcester LLP, has been issued and is included in Exhibit 5.1 Exhibit 23.1 49. Please include a currently dated and signed consent from your independent auditors prior to requesting effectiveness. Response to Comment 49: A currently dated and signed consent from our independent auditors has been filed as exhibit 23.1 to the Amended S-1. Undertakings, page 11-5 50. Please conform language to current Regulation S-K Item 512(a) requirements. See SEC Release 33-8876 (December 19, 2007). Response to Comment 50: The undertakings in the Amended S-1 have been conformed to Regulation S-K Item 512(a) requirements. Form 10-Q as of 3/31/2008 Balance Sheets, page 4 51. Please tell us why the balance sheet amounts in your March 31, 2008 Form 10-Q do not agree with the amounts in the balance sheets on page F-2 of your Form S-1. 17 Response to Comment 51: Subsequent to the initial filing of the S-1, certain transactions were re-visited by the Company and accounted for in a different manner in the Form 10-Q filed for the three month period ended March 31, 2008. The balance sheet amounts in the Amended S-1 have been corrected and are now consistent with the balance sheet numbers in our March 31, 2008 amended Form 10-Q filed simultaneously herewith. Statement of Operations, page 6 52. We note that the weighted average number of shares outstanding on the face of the Statement of Operations does not agree with the weighted average number of shares on page F-3 of your Form S-1. Please tell us why these amounts do not agree for each period. Response to Comment 52: The weighted average number of shares outstanding in the Statement of Operations of the Amended S-1 has been corrected and is now consistent with the weighted average number of shares in he statement of operations in our March 31, 2008 Form 10-Q filed simultaneously herewith. Evaluation of Effectiveness of Disclosure Controls and Procedures. page 15 53. We note that your CEO and CFO have evaluated the Company's internal controls. It does not appear that your certifying officers have reached a conclusion that your internal controls over financial reporting are effective. Please revise to address your officers' conclusions regarding the effectiveness of your internal controls over financial reporting. Refer to Item 308T of Regulation S-K. Response to Comment 53: We did not intend our quarterly report to contain our management's annual evaluation of internal control over financial reporting. Rather, aspects of our internal controls that we deemed inadequate resulted in our conclusion that our disclosure controls and procedures were ineffective as of March 31, 2008. We have clarified this in the amended Form 10-Q filed simultaneously herewith. We acknowledge that: * should the Commission or the staff, acting pursuant to delegated authority, declare the above-referenced registration statement effective, it does not foreclose the Commission from taking any action with respect to the above-referenced registration statement; * the action of the Commission or the staff, acting pursuant to delegated authority, in declaring the above-referenced registration statement effective, does not relieve us from our full responsibility for the adequacy and accuracy of the disclosure in the above-referenced registration statement; and 18 * We may not assert the declaration of effectiveness as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. * * * * * * * * * Please call Edwin L. Miller Jr. at (617) 338-2447 or Oded Har-Even at (212) 660-5002, both attorneys at Z.A.G/S&W LLP, if you have any questions or require additional information. Sincerely yours, /s/ Guy Ofir - ----------------------------- Guy Ofir Chief Executive Officer 19 -----END PRIVACY-ENHANCED MESSAGE-----