Item 1. Description of Business.
(a) Business Development.
Salamon Group, Inc. (“we”, “us”, “our”) was organized under the laws of the State of Nevada on April 27, 2001. We are a development stage company organized by John E. Salamon, our founder, President and a director. Our aim is to develop, license and/or acquire technologies and concepts in the field of “Alternative Energy Sources”. Our offices are presently located at 4080 Paradise Road #15-901, Las Vegas, Nevada 89169 and our telephone number is (702) 241-0145.
Every public issuer of stock engaged in interstate business and which has total assets exceeding $1 million and has more than 750 shareholders is required to register its securities with the Securities and Exchange Commission under the Exchange Act of 1934. We have not reached these threshold requirements and are therefore exempt from required registration under Section 12(g) of the Exchange Act. However, a Form 10-SB registration statement has been filed on a voluntary basis in order to possibly enhance shareholder and investor confidence by way of full disclosure of our current status and financial condition. Registration may also allow us to establish a trading market on the OTC Bulletin Board. We believe that registration may assist in securing private investment capital, which is needed to complete product testing, to establish a market for our product and to continue research and development of additional products.
Since our inception, we have been involved in organizational and fund raising activities and the licensing, subsequent acquisition and further development of certain electrical generator technology from Space Globe Technologies Ltd., a private British Columbia, Canada corporation (“Space Globe Technologies”), founded, organized and wholly owned also by John Salamon. Space Globe Technologies was founded for the purpose of developing technologies and concepts in the field of “Alternative Energy Sources.” Alternative Energy Sources are those that are not supplied by the burning of fossil fuels or the splitting of atoms. Some of the alternative energy sources include solar energy, wind power, geothermal, tides, hydro power and electrical wireless power and generator technologies. Space Globe Technologies was incorporated in British Columbia, Canada in 1998 by John Salamon. It was initially established as a management/consulting company in which to develop ideas and concepts for power generation. The assets at present consist of a vehicle, office equipment and investments in us. Effective June 29, 2007, in connection with our acquisition of ownership and rights to certain patents and wireless EPG technology from Space Globe Technologies, we no longer considered ourself a “shell” company and our current operations are focused on developing and licensing such technologies. From 1999 to 2001 Space Globe Technologies and Mr. Salamon developed the concept and design of an Electrical Power Generator (“EPG”) for home and office use and for emergency power backup situations. Mr. Salamon filed a patent application in Canada on September 4, 2001 for protection of the design of the EPG. Mr. Salamon filed three additional patent applications in Canada on May 12, October 10 and November 20, 2006 for the protection of designs related to wireless EPGs.
We were formed by Mr. Salamon for the purpose of pursuing his business plan of developing technologies and concepts in the field of “Alternative Energy Sources” in a newly established Nevada corporation. All transactions described below between Space Globe Technologies and us were incidental to the transfer of assets to us in connection with the reorganization of these two entities under Mr. Salamon’s common control.
On July 5, 2001, we entered into a Technology License Agreement with Space Globe Technologies whereby we agreed to pay $50,000 cash and issued 5,000,000 shares of common stock to Space Globe Technologies as license fees for the technology related to the EPG. The cost of the license was determined to be at an estimated cost of research and development time and materials expended by Space Globe Technologies for the development of the EPG. The 5,000,000 shares issued in connection with the Technology License Agreement were issued pursuant to Section 4(2) of the Act at an estimated fair value of $5,000 and the cash was subsequently paid from proceeds of our private placements.
On January 10, 2005, we replaced the license agreement with Space Globe Technologies with an agreement under which Space Globe Technologies transferred 100% ownership of and rights to the EPG technology protected by the 2001 patent application to us for no additional compensation. John Salamon, through Space Globe Technologies, also assigned all rights to the patent pending to us. On September 30, 2007, we amended the agreement with Space Globe Technologies such that John Salamon retains a 1% interest in the patent application.
On June 29, 2007, we entered into an assignment agreement with Space Globe Technologies whereby Space Globe Technologies transferred to us its ownership of and rights to the wireless EPG technology, including Space Globe’s 99% interest in the three 2006 patent applications, in consideration for the issuance of 4,500,000 shares of common stock to Space Globe Technologies (or 1,500,000 shares for each of the three patents applications) at a value of $0.07 per share, the estimated fair value of the shares on the date of the transaction. John Salamon, who filed the three patent applications, retains a 1% interest in the patents pending. The value of the technology was determined to be at an estimated cost of research and development expended by Space Globe for the development of the wireless EPG. The 4,500,000 shares issued in connection with the assignment agreement were issued pursuant to Section 4(2) of the Act.
In addition to the foregoing issuances, from April 2001 through December 31, 2009, we received gross proceeds of $483,334 (including $103,000 in cash, advances from related parties of $356,634 and proceeds from related notes payable of $23,700) from the issuance of a total of 8,103,880 shares of common stock in offerings conducted pursuant to Section 4(2) of the Act and Regulation S. These offerings were made in the Provinces of British Columbia and Alberta, Canada.
We intend to offer additional securities under Rule 506 and Regulation D to fund our short - term and medium - term expansion plans.
As of the date of this annual report, we have no other employees or customers.
(b) Business of Registrant.
General
Since our inception, we have been involved in organizational activities, have completed offerings of shares of common stock in which we have received gross proceeds in the amount of $103,000 from the issuance of 2,515,010 shares of common stock, and have concluded the licensing and subsequent acquisition of an EPG from Space Globe Technologies. We have had no employees since our inception. We anticipate that our sole executive officer and director will receive a reasonable salary for services as the sole executive officer at such time as we commence business operations. This individual will devote such time and effort as may be necessary to participate in our day-to-day management.
On July 5, 2001, we entered into a Technology License Agreement with Space Globe Technologies whereby we licensed from Space Globe Technologies certain EPG technology which we believe to be proprietary. As consideration for the license to use the EPG technology, we agreed to pay Space Globe Technologies $50,000 and 5,000,000 shares of common stock and granted Space Globe Technologies a 3% royalty on all gross sales of products derived from the technology. A patent application for the EPG technology has been filed with the Canadian Intellectual Property Office. We received a non-exclusive, non-transferable, worldwide license to manufacture, use and sell the EPG technology as incorporated into our products, as well as the right to appoint distributors to distribute the technology as incorporated into our products.
In January, 2006, we replaced the license agreement with Space Globe Technologies with an agreement under which Space Globe transferred 100% ownership of and rights to the EPG technology to us. John Salamon also assigned all rights to the patent pending to us. In September 2007, we amended the agreement with Space Globe such that John Salamon retains a 1% interest in the patent application. Space Globe Technologies has already received compensation of $50,000 cash and 5 million shares of our common stock. Space Globe Technologies is no longer entitled to receive a 3% royalty on any sales of products that employ the EPG technology. We have completed development of the technology and certain EPG products containing the technology, and are seeking licensees to manufacture and market the products.
On June 29, 2007, we entered into an assignment agreement with Space Globe Technologies whereby Space Globe Technologies transferred to us its ownership of and rights to the wireless EPG technology, including Space Globe’s 99% interest in the three 2006 patent applications. In consideration of the wireless technology, we issued 4,500,000 shares of common stock to Space Globe Technologies (or 1,500,000 shares for each of the three patents applications) at a value of $0.07 per share, which was the estimated fair value of the shares on the date of the transaction. John Salamon, who filed the three patent applications, retains a 1% interest in the patents pending. The value of the technology was determined to be the estimated cost of research and development time and materials expended by Space Globe Technologies for the development of the wireless EPG. The 4,500,000 shares issued in connection with the assignment agreement were issued pursuant to Section 4(2) of the Act.
Technology/Product
The EPG device consists of an electric motor, an alternator, a regulator system, an inverter, a capacitor, an isolator, a primary battery and a secondary battery. These parts are all contained in a metal or plastic molded encasement. The primary 12 Volt battery supplies current and voltage to an inverter, which converts the 12V DC voltage to 115V AC voltage. The AC voltage is then supplies power to any AC powered device such as a television, lamp, radio, small appliances, etc. (depending on required wattage).
During operation of the device, a control system that is powered by the secondary 12V battery, monitors the primary battery voltage. When the primary battery voltage drops below a setpoint voltage, the control system starts the electric motor, which in turn drives an alternator/generator that recharges the primary battery. The alternator/generator produces AC voltage, which is converted to DC voltage and regulated through a regulator system. The regulator system includes an isolator, which directs the power from the regulator system into the primary battery allowing the primary battery to be recharged, but the isolator prevents the direct connection of both batteries. When the primary battery voltage reaches an upper setpoint voltage, the control system will disable the electric motor and the recharging of the primary battery will cease. The cycle will repeat itself again when the primary battery voltage is below the lower setpoint voltage.
We have not yet tested the EPG to determine how long it can supply power before both batteries become depleted. A connection to an external power supply is provided so that the secondary battery can be recharged if for some reason, such as long dormant storage periods, both batteries become completely depleted. The external power supply is a power supply that converts household current to 12 VDC. For example, this type of power supply could be a wall transformer type that converts 115 VAC to 12 VDC.
The performance of the EPG is relative to the size of the inverter and the number of batteries. For example, a 300 watt inverter can be used to power a TV, laptop computer or a lamp, among other things. The proof-of-concept model EPG is 115 VAC and 300 watts with a 12 VDC outlet. The charging cycle is relative to the load on the inverter. The greater the load, the faster the main battery depletes. The typical “midsize” EPG requires no venting as it uses sealed batteries and creates a negligible amount of heat. When charging, it produces a noise level similar to that of a turntable style microwave. Because there are no emissions of any sort, the EPG can be used indoors as opposed to fuel powered generators which can only be used outdoors. All components of the EPG are CSA approved in Canada. All licensees will be in compliance with Canadian standards and will be required to comply with standards of the USA and other countries prior to distributing the EPG in those countries.
The EPG can be used as emergency back-up power for the homeowner in the event of a power failure. It can also be used to power small appliances/devices in portable applications such as camping or in a remote cottage setting. It can also power communication equipment during disaster relief efforts. Any number of devices can run from the EPG as long as the combined power of the devices do not exceed the maximum power of the inverter. For example, if a lamp uses 60W and the inverter is rated at 300W maximum, five lamps can be run. If a TV at 160W is to be powered, and a DVD player at 15W, then only two 60W lamps may be powered. It is not currently known how long the EPG may run devices until both batteries are depleted. This will be determined only when the working model described below has undergone extensive testing.
Proof-of-Concept and Working Models
A prototype was built by Space Globe Technologies in 2002 and was provided to us for further development. In 2004, we completed construction of a proof-of-concept model which is now available for demonstration to potential licensees. The encasement of the model measures 18”L x 11”W x 10.5”H and weighs approximately 60 pounds with all the components in it. The primary battery is a sealed deep cycle battery rated at 33AH with output voltage of 12 VDC and weighs 25 pounds. The secondary battery is also a sealed deep cycle unit with output voltage of 12 VDC and weighs nine pounds.
The recharging voltage for both batteries is in the 14.4V to 14.6V range. The charge level is determined by the non-charging/non-discharging voltage of the battery with 12.80V being a full charge, 12.30V a half charge and 11.80V being fully discharged. The proof-of-concept model does not have the automated control system. The model was used for the battery testing.
The following are the detailed specifications of the proof-of-concept model:
Battery and Alternator Specifications :
Primary Battery:
12 Volt/33 Ampere Valve Regulated Lead-Acid Battery
a) Ampere Hour Capacity to 1.75 Volts per Cell @77F:
b) Specifications:
c) Discharge Ratings (in amps) at Constant Discharge Time (in hours)
d) Capacity
29.0 Ah @ 5Hr rate to 1.75 volts per cell @ 77`F
33.0 Ah @ 20 hr rate to1.75 volts per cell @ 77`F
29.6 Ah @ 10 hr rate to 1.80 volts per cell @ 68` F
e) Operating Temperature Range
Discharge: -40`F to 160`F
Charge:-10`F to +140`F(with temperature compensation)
f) Float Charging voltage
13.5 to 13.8 VDV/unit Average @ 77`F
g) Recommended Maximum Charging Current Limit
C/5 amperes (6.6 amperes @ 100% depth of discharge) @ 20 hour rate
h) Equalization and Cycle Service Charging Voltage
14.4 to 14.8 VDC/unit Average @ 77`F
i) Maximum AC Ripple (Charger)
0.5% RMS or 1.5% P-P of float charge voltage recommended for best results
Maximum AC ripple float charge voltage allowed=(4% P-P)
Maximum AC ripple current allowed=1.65 amperes RMS (C/20)
j) Self Discharge
Battery may be stored for up to 6 months @ 77`F and then a refreshing charge is required.
For higher temperatures the time interval will be shorter.
Secondary Battery:
12 Volt 18 AH Sealed Lead Acid
Recharging specs are similar to the Main battery above.
Alternator Specs:
We have now developed and completed the assembly of a working model, which contains a bigger battery
The following are the specifications of the working model:
Battery and Alternator Specifications :
Primary Battery:
12 Volt 50 AH Deep-Cycle Sealed Lead-Acid Battery
Secondary Battery:
12 Volt 18 AH Sealed Lead Acid Battery
Alternator Specs:
The working model will require further testing to ensure that the control system is working as expected, to test the life of the batteries, and to determine if any component parts need to be upgraded. If required for further testing of the working model, we may engage an independent consulting engineer, subject to obtaining the necessary capital. To date, no independent evaluations have been done.
Technical Limitations :
The technical limitations of the EPG are related to the recharging of the primary battery. The alternator should be large enough to recharge the primary battery while the inverter is under full load. If the alternator is not rated to output more power than the inverter can draw, then eventually the primary battery will be totally depleted and the inverter will cease to produce power. When there is no more load on the primary battery, it can be recharged again for future use.
The actual length of time that the EPG can provide power without completely depleting both batteries will not be known without extensive testing. If the EPG has sat dormant for a long time and both batteries have become depleted, then an external power source can be used to recharge the secondary battery. The external power supply is a power supply that converts household current to 12 VDC. For example, this type of power supply could be a wall transformer type that converts 115 VAC to 12 VDC. As a result of these technical limitations, the EPG’s utility may be restricted to providing power for only smaller appliances, which reduce its commercial appeal.
Regulatory Approvals
This electrical device is made up of various parts, as outlined very carefully in the schematic drawings. Each and every electrical component contained within the research models have already been approved in Canada under a set of rules called “CSA”. The inverters, control mechanisms, batteries, and all other component parts have been CSA approved. By extension, all working models, as well as future commercial units, must contain only CSA approved electrical components, if manufactured and/or sold within Canada. Further, any licensee, legally licensed by us to manufacture within the United States of America, must comply with any and all USA government rules covering the manufacturing of electrical devices with the USA. A minimum requirement would involve the manufacturer satisfying rules set down under the set of regulations called “UL”. All completed units would have to be labeled -“UL Approved”. We intend to pursue arrangements whereby independent manufacturers will, under license obligations to us, manufacture and be prime distributors of the product. Due to the nature of the EPG, any manufacturer must comply with CSA regulations.
CSA Certification guidelines require a completed unit to be included with the CSA Certification application process to satisfy safety testing requirements. We will submit all applications for approvals and to pay all associated costs.
Canadian Patent Rules:
Through a patent, the government grants an inventor the right to exclude others from making, using or selling the invention from the day the patent is granted to a maximum of 20 years after the day on which a patent application is filed. The Canadian Intellectual Property Office lays open the application 18 months after the filing date of the application. Anyone may then read about, but not make, use or sell the invention without the applicants permission until the patent has expired. The application remains “patent pending” until a patent is granted or refused. The applicant must formally request an examination of the patent pending application within 5 years of the filing date, otherwise the application will be considered abandoned. A patent pending application provides time to assess the feasibility and/or marketability of the invention and provides some protection for the invention without having to fully commit to the patent procedures. Competitors will likely be wary of infringing on the invention after the application is published because the inventor could seek retroactive compensation if a patent is granted.
Patents Pending
John Salamon filed a patent application in Canada on September 4, 2001. Mr. Salamon filed another patent application on May 12, 2006 and two more patent applications later in 2006. The key element of the first patent application includes the unique assembly of the component parts. The other patent applications relate to a wireless EPG. The applications are “pending”. We requested examination of the first patent application on September 4, 2007. On October 17, 2007, the Canadian Intellectual Property Office requested additional information regarding the first patent application, which we provided on March 10, 2008.
Manufacturing
At this time, we are attempting to secure licensees who will be granted the rights to commercially produce, manufacture, market and sell the product worldwide. We will provide the technological design to the licensee(s) for their use in producing the product. If we are successful in acquiring real property to house our office facilities, we may offer to lease to the licensee(s) space in our facilities for the establishment of manufacturing facilities for the licensed product. If licensees cannot be arranged, we will seek financing to manufacture the EPG itself. As yet, neither licensees nor suppliers of the component parts of the EPG have been secured or arranged.
Sales and Marketing
We are seeking potential qualified licensees, which will be granted the right to manufacture, market and sell the EPG. Our President John Salamon is currently negotiating with potential licensees in Southeast Asia, Europe and Canada. A qualified licensee will have a successful experience in marketing electronic devices, and will haveknowledge of both sales strategies and electronic technology. Furthermore, a qualified licensee will have the network to place the EPG in appropriate large chain stores.
We believe that prospective licensees would not make an issued patent a precondition for any license payments. There are many products and devices on the market that have only ‘patent pending’ status. Having a patent pending does afford the applicant certain protections. If the licensee believes that the particular product has a competitive advantage in the marketplace and has a good prospect for sales to consumers, we believe the licensee will not be deterred by the fact that the patent has not yet issued in respect of the EPG.
We have a website at www.salamongroup.com.
Management
At this time, we are solely managed by John Salamon. As finances allow, other personnel will be employed in various management capacities.
Mr. Salamon began his working career in the oil industry in Alberta, Canada in 1966. From 1966 to 1985, he performed various jobs in the oilfields and on drilling platforms for several oil companies in Canada, United States, England, Africa, Saudi Arabia, Bahrain, Malta and Peru. His duties included repair and maintenance of electric motors and generators which provided Mr. Salamon with a comprehensive understanding of the workings of electric powered devices.
From 1986 to 1990 Mr. Salamon assisted with the development of a shopping mall and other properties in Northern Alberta. From 1991 to 1998, Mr. Salamon contracted to Globus Cellular and to Beitler Consulting to provide technical and marketing services for their products. In 1998, Mr. Salamon formed Space Globe Technologies to continue research and development of technologies and products in the field of electric power generation. In 2001, Mr. Salamon formed us to license and/or purchase technologies in the field of electric power generation. From 1998 to date Mr. Salamon has been directing and managing both companies.
Consultants and Technicians :
We employ consultants and technicians on a contract and on an “as needed” basis. At present there are no contractual arrangements. During 2004, we engaged Mr. Mike Ewashen to assist in the completion of the assembly of the working model of the EPG device. Mr. Ewashen, a certified Electronics Technician, has been working in the field of electronics for the past 18 years. He remains available to consult to us to assist in research and development of other products.
Research and Development
Until we can secure a qualified licensee, all further development, testing and commercialization of the EPG will be completed by us, subject to obtaining the necessary financing. Upon securing a qualified licensee, any further research, development and commercialization of the EPG and all related costs will be the responsibility of the licensee.
Under the direction of Mr. Salamon, we are continually researching and studying “alternative energy sources” and plans to develop other power generation devices as capital funding becomes available. Alternative Energy Sources are those which are not supplied by the burning of fossil fuels or the splitting of atoms. Some of the alternative energy sources include solar energy, wind power, geothermal, tides and hydro power.
We are currently developing a smaller, portable EPG utilizing similar designs and adding a solar power component and small fans and light cells. We are also developing a wireless EPG. Mr. Salamon has a conceptual design and will proceed with completion of a working model when funding allows.
Funding
We plan to raise funds by way of private placements of share or debt instruments with Mr. Salamon and his business associates. The funds will be used to secure license agreements, to continue research and development, to purchase real property, and for general working capital. We also plan to seek bank financing once licensees are secured.
The following discussion as it relates to our medium and long term business objectives, is pertinent only if we are successful in obtaining sufficient debt and/or equity financing to commence operations.
The time Mr. Salamon needs to devote to our day-to-day affairs is presently estimated to be approximately thirty to forty hours per week. At such time as we obtain sufficient funding with which to enter advanced stages of development, hire employees and search for an appropriate site where our executive offices can be located in the U.S.A., of which there can be no assurance, Mr. Salamon's time commitment will increase.
In our early development stages, we will depend upon Mr. Salamon to initiate negotiations with prospective distributors and customers. We believe that our commercial viability will be directly dependent upon Mr. Salamon's networking abilities and salesmanship. There can be no assurance that he will be successful in the future in the negotiation and formation of critical strategic alliances for us.
In our initial development phase, we are operating out of offices provided by Mr. Salamon.
To implement the initial plan, we intend to seek a private placement in order to raise funds. If a placement is successful, we believe that we will have sufficient operating capital to meet our initial goals and operating costs for a period of twelve months. If we are not successful in raising such funds, we believe that we will not be able to continue operations with existing funds and the financial support of Mr. Salamon beyond a period of nine to twelve months.
Even if we are successful at raising this additional money, there can be no assurance that a commercially viable EPG will be developed or the revenues from license fees or sales of the product will be sufficient to establish a viable business. Furthermore, we may face unforeseen costs associated with developing and marketing the EPG. We will still be largely dependent upon Mr. Salamon's ability to attract development partners. Although we believe $500,000 is sufficient to fund operations for the projected period, there can be no assurance that such funding will sufficient to pay additional costs associated with expansion.
We plan to monitor closely our medium term operations for approximately one year. If we are successful in securing the necessary financing and if our operations are capable of sustaining itself, we intend to seek additional financing in the form of conventional bank financing, small business administration financing, venture capital or the private placement of corporate debt for a total of approximately $500,000. There can be no assurance that any of these financing sources will be available to us. We believe that such expansion will place us in a position to be a major presence in the alternative energy source technology market. If our subsequent expansion is implemented, Mr. Salamon believes he will be able to oversee the entire operation with minimal additional personnel.
Since we do not expect to seek debt financing until such time as we have successfully developed products and have significant revenues, we believe that we can negotiate appropriate placement and repayment terms for such borrowings. However, there can be no assurance that such funds will be available to us or that we can negotiates suitable terms which are most advantageous to us. In addition, we do not, at this time, anticipate that we will require substantial leverage to fund the expanded operations. However, if we receive bank financing and if we are not successful in sustaining operations or timely servicing such debt and we default on payments on the debt, then the lender or lenders could foreclose upon our interests to the detriment of our shareholders.
We do not intend to engage in bank financing until such time as we have been successfully operating for a period of time. At such time as we seek to borrow funds, we do not intend to use the loan proceeds to make payments to our management (except as reasonable salaries, benefits and out of pocket expenses). We have no present intention of acquiring any assets or other property owned by any promoter, management or their respective affiliates or associates or acquiring or merging with a business or company in which our promoter, management or their respective affiliates or associates directly or indirectly have an ownership interest. Although there is no present potential for a related party transaction, if any payments are to be made to a promoter and management, we disclose the payments to the security holders and no such payments will be made in breach of the fiduciary duty such related persons have to us.
There are no arrangements, agreements or understandings between non-management shareholders and management under which non-management shareholders may directly or indirectly participate in or influence the management of our affairs. There are no arrangements, agreements or understandings under which non-management shareholders will exercise their voting rights to continue to elect the current directors to our Board of Directors.
Business Strategy
Our business strategy, which is dependent upon our obtaining sufficient financing with which to implement our business plan (of which there is no assurance), is to sell licenses to companies to manufacture and market our product. Once we commence to actively pursue business operations, our revenues will remain dependent upon sales and licensing revenues and our ability to attract new customers and licensees.
Our primary direct costs will be (i) expenses related to the development of the EPG technology, (ii) marketing and sales expenses related to the licensing of the EPG technology, (iii) salaries to Mr. Salamon, engineers and sales personnel (payroll cost), and (iv) employee costs (i.e. payroll taxes) and associated employee benefits.
Our gross profit margin will be determined in part by our ability to minimize and control operating costs, and specifically labor costs and to maintain a firm control on marketing, sales and advertising costs. We will also attempt to maximize market penetration of our products in order to capture a stream of revenue.
Competition
The markets in which we are engaged are subject to vigorous competition. Energy generation is a constantly evolving industry and is dominated by and impacted by large multi-national oil companies.
There are many portable products similar to the EPG available on the market, including gasoline and diesel powered generators, and battery/inverter types of portable power sources. We currently see our fiercest competition coming from manufacturers of portable gasoline powered generators, including such major market participants as American Honda Motor Co., Inc., Coleman Powermate, Inc. and Generac Power Systems, Inc.
The main advantages of the EPG over a gas or diesel powered generator are that unlike fuel-powered generators, the EPG can be used indoors because of its size, it has negligible noise level and it does not emit any exhaust. The EPG can be used indoors, for example, as emergency back-up power for the homeowner. Another significant advantage of the EPG is that no dangerous flammable fuel is required.
While the EPG is designed to recharge the primary battery to prolong the availability of power, the extent to which the EPG can provide prolonged availability of power will not be known without extensive testing. The ‘battery/inverter’ systems that are currently on the market must be recharged with an external source such as a wall transformer or solar panel before they can be used again after the battery is depleted. Until further testing of the EPG is completed, it is not known whether its performance is even equivalent to existing battery inverter products.
Gasoline generators are more expensive than the EPG. The prices of gasoline generators vary depending on the size. Gasoline generators in the 900W to 1500W range are priced in the range of $475 to $525. A small gasoline generator may weigh less than the EPG but the EPG will have lower operating and maintenance costs. The gas generator requires fuel to run and requires periodic maintenance, such as oil changes. The EPG will have very low maintenance and operating costs with only the batteries and/or the alternator drive belt needing replacing after the useful lifetime has expired. The anticipated retail cost of the EPG will be in the low hundreds of dollars. The anticipated cost of the EPG will be greater than the battery/inverter units, but will be still be affordable to the consumer in the non-specialized retail market. The physical size of the EPG needs to be larger than the battery/inverter system in order to accommodate the control system, the electric motor, the alternator and the secondary battery. The maintenance costs of the battery/inverter only system will be less than the EPG, as the battery/inverter only system has only one battery and no drive belt. With a battery/inverter only system, once the battery is depleted, the battery needs to be recharged before it can be used again. While the EPG is designed to recharge the primary battery when it depletes, so that the length of time that power can be provided by the EPG may be increased in comparison to existing battery inverter products, we have not yet tested the EPG to determine how long the EPG can supply power before both the primary and the secondary batteries become depleted. The useful life of the gas generator can be years with proper maintenance. The EPG can also last many years with only battery replacement required.
We intend to focus primarily on the large “indoor” market for homes, offices, recreational vehicles, cottages, small warehouses, storage units, etc. We believe that the EPG will be readily accepted in the market place because it is portable, compact, price competitive, and does not require fueling. Our licensees could be soliciting some of the big retailers such as Wal-Mart, Zellers, Home Depot, Sears and Canadian Tire.
Item 1A.
Item 1A. Risk Factors.
Not applicable.
Item 2.
Item 2. Description of Property.
Our executive offices are located at 4080 Paradise Road #15-901, Las Vegas, Nevada 89169. Our telephone number is (702) 241-0145. We own no real or personal property. We intend to purchase real property in Canada and the United States to house our office and operational facilities. We do not currently intend to engage in other investment activities, including investments securities other than transactions necessary for cash management activities in the ordinary course of our business.
Item 3.
Item 3. Legal Proceedings.
We know of no legal proceedings to which we are a party or to which any of our property is the subject which are pending, threatened or contemplated or any unsatisfied judgments against us.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of our stockholders during the fourth quarter of the fiscal year ended December 31, 2009.
PART II
Item 5.
Item 5. Market for Equity Securities and Other Shareholder Matters.
Market Information
On October 5, 2007, our shares began trading on FINRA’s Over-The-Counter Bulletin Board (the “OTC Bulletin Board”) under the symbol “SLMU.” There has been minimal trading activity to date. The following table sets forth the high and low bid prices for our common stock as reported by the OTC Bulletin Board for 2008 and the fourth fiscal quarter in 2007 in which our shares traded.
OTC Bulletin Board
(1) These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions, and may not represent actual transactions.
Our common stock is classified as a penny stock and as such, broker dealers dealing in our common stock will be subject to the disclosure rules for transactions involving penny stocks, which require the broker dealer to determine if purchasing our common stock is suitable for a particular investor. The broker dealer must also obtain the written consent of purchasers to purchase our common stock. The broker dealer must also disclose the best bid and offer prices available for our stock and the price at which the broker dealer last purchased or sold our common stock. These additional burdens imposed on broker dealers may discourage them from effecting transactions in our common stock, which could make it difficult for an investor to sell their shares.
Holders
As of May 17, 2010, we had 40 shareholders of record and 18,103,880 outstanding shares of common stock.
Dividends
We have never paid or declared any dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future.
Transfer Agent
The transfer agent for the Common Stock is Signature Stock Transfer, Inc., PMB 317, 2220 Coit Road, Suite #480, Plano, Texas 75075. Tel: 972-612-4120, Fax: 972-612-4122.
Recent Sales of Unregistered Securities
None.
Item 7.
Item 7. Management's Discussion and Analysis or Plan of Operation.
Overview
We were organized under the laws of the State of Nevada on April 27, 2001. We are a developmental stage company organized by John E. Salamon. Our aim is to develop, license and/or acquire certain electrical generator technologies, which we believe to be proprietary. Our offices are presently located at 4080 Paradise Road #15-901, Las Vegas, Nevada, USA 89169, and our telephone number is (702) 241-0145.
Since our inception, we have been involved in organizational and fund raising activities and the licensing, subsequent acquisition and further development of a certain electrical generator technology from Space Globe Technologies Ltd., a private British Columbia, Canada corporation (“Space Globe”), founded and organized also by John Salamon. Space Globe was founded for the purpose of developing technologies and concepts in the field of “Alternative Energy Sources.” Alternative Energy Sources are those which are not supplied by the burning of fossil fuels or the splitting of atoms. Some of the alternative energy sources include solar energy, wind power, geothermal, tides and hydro power. Space Globe was incorporated in the Province of British Columbia, Canada in 1998 by John Salamon. It was initially established as a management/consulting company in which to develop ideas and concepts for power generation. Space Globe’s primary assets consist of office equipment and investments in us. Effective June 29, 2007, in connection with our acquisition of ownership and rights to certain patents and wireless EPG technology from Space Globe, we no longer considered ourself a “shell” company and our current operations are focused on developing and licensing such technologies. From 1999 to 2001 Space Globe and Mr. Salamon developed the concept and design of an Electrical Power Generator (“EPG”) for home and office use and for emergency power backup situations. Mr. Salamon filed a patent application in Canada on September 4, 2001 for protection of the design of the EPG and on March 10, 2008, as requested by the Canadian Patent Office, we filed additional information regarding this patent pending. Mr. Salamon filed a second patent application in Canada on May 12, 2006 and two more patent applications later in 2006 for the protection of designs related to wireless EPGs.
We were formed by Mr. Salamon for the purpose of pursuing his business plan of developing technologies and concepts in the field of “Alternative Energy Sources” in a newly established Nevada corporation. All transactions described below between us and Space Globe were incidental to the transfer of assets to us in connection with the reorganization of these two entities under Mr. Salamon’s common control.
On July 5, 2001, we entered into a Technology License Agreement with Space Globe whereby we agreed to pay $50,000 cash and issued 5,000,000 shares of common stock to Space Globe as license fees for the technology related to the EPG. The cost of the license was determined to be at an estimated cost of research and development time and materials expended by Space Globe for the development of the EPG. The 5,000,000 shares issued in connection with such Technology License Agreement were issued pursuant to Section 4(2) of the Act at an estimated fair value of $5,000 and the cash was subsequently paid from proceeds of our private placements.
On January 10, 2005, we replaced the license agreement with Space Globe with an agreement under which Space Globe transferred 100% ownership of and rights to the EPG technology, protected by the 2001 patent application, to us for no additional compensation. John Salamon, through Space Globe, also assigned all rights to the patent pending to us. On September 30, 2007, we amended the agreement with Space Globe such that John Salamon retains a 1% interest in the patent application.
On June 29, 2007, we entered into an assignment agreement with Space Globe whereby Space Globe transferred to us its ownership of and rights to the wireless EPG technology, including Space Globe’s 99% interest in the three 2006 patent applications, in consideration for the issuance of 4,500,000 shares of common stock to Space Globe (or 1,500,000 shares for each of the three patents applications) at a value of $0.07 per share, the estimated fair value of the shares on the date of the transaction. John Salamon, who filed the three patent applications, retains a 1% interest in the patents pending. The value of the technology was determined to be at an estimated cost of research and development time and materials expended by Space Globe for the development of the wireless EPG. The 4,500,000 shares issued in connection with the assignment agreement were issued pursuant to Section 4(2) of the Act.
On June 20, 2008, we entered into a license agreement with 482229 B.C. Ltd. (“482229”), a private company based in Kelowna, British Columbia, whereby we granted 482229 the exclusive rights to manufacture, market, distribute and sell in Canada all electrical power generation products derived from our 2001 patent pending. The license is for an initial term of seven years. 482229 has agreed to pay us a one time licensing fee of CDN$15,000 on or before June 20, 2009 and additional fees equal to 3% of 482229’s gross revenues derived from the sale of products, payable quarterly. On June 16, 2009, the Company entered into an addendum to the license agreement with 482229 to extend the due date of the one time licensing fee of CDN $15,000 to on or before December 31, 2009. In addition, the sales requirements were modified and are now the following:
In August of 2008, our Board of Directors resolved to expand our current business plan into other areas which would allow us to generate revenues. One particular area that our Board resolved would provide added value to our company would be real estate, more specifically real estate in the form of an operating casino in Las Vegas, Nevada. Currently, our President is actively identifying potential casinos that are for sale in the Las Vegas area. If we are able to locate and purchase a suitable casino, we intend to move our corporate headquarters into the casino. The purchase of the casino will allow us to start generating revenues so that we can further our business plan to develop, license and/or acquire technologies and concepts in the field of “Alternative Energy Sources.” Once we locate a suitable casino, we intend to enter into a letter of intent to purchase the casino. We intend to finance the purchase of a suitable casino through a combination of equity and/or debt financing, and by undertaking a non-brokered private placement under Rule 506 of Regulation D, to raise the funds required to purchase the casino.
There is no assurance that we will succeed in identifying and purchasing a casino or that funding will be available to us for this purpose. There is also no assurance that any casino we might purchase will generate revenues sufficient for us to carry out our business plan related to alternative energy sources.
As of the date hereof, we have no other employees or customers.
Plan of Operation
Since our inception, we have been involved in organizational activities, have completed offerings of shares of common stock, have concluded the licensing and subsequent acquisition of an EPG from Space Globe, and have completed a working model of the power generator. For the period from inception (April 27, 2001) through December 31, 2009, we had no revenue from operations and our deficit accumulated during the development stage amounted to $1,048,258. We propose to compete in the alternative energy source technology market.
As reported in the Report of Independent Registered Public Accounting Firm on our December 31, 2009 financial statements, we have suffered recurring losses from operations, we have a working capital deficit and a deficit accumulated during the development stage. These items raise substantial doubt about our ability to continue as a going concern.
We plan to generate revenues through the sale of manufacturing and marketing licenses on a world-wide basis. We also plan on generating revenues by possibly purchasing an operating casino in Las Vegas, Nevada. Our President is currently identifying potential casinos that are available for sale in Las Vegas. If he is successful in locating a casino, we intend to finance the purchase of the casino through a combination of debt and equity financing. We would also move our corporate headquarters into the casino.
Future research and development will be focused on smaller, portable EPGs adding a solar power component as well as an electric wireless product. Mr. Salamon has a conceptual design and prototypes and will proceed with plans when funding allows.
We are not planning to purchase a plant or equipment at this time but rather to enter into licensing agreements to manufacture and market the products.
If we are unable to generate sufficient revenue from operations to implement our plans, we intend to explore all available alternatives for debt and/or equity financing, including but not limited to private and public securities offerings. Accordingly, we expect that it will be necessary for us to raise additional funds in the event that we are unable to generate any revenue from operations and if only a minimal level of revenue is generated in accordance with our expectations.
Mr. Salamon, at least initially, will be responsible for developing our business. However, at such time, if ever, as sufficient operating capital becomes available, he expects to employ additional staffing. In addition, we expect to continuously engage in market research in order to monitor new market trends and other critical information deemed relevant to our business.
Results of Operations
Revenues
We did not earn any revenues during the fiscal year ended December 31, 2009 and we do not anticipate earning revenues in the near future. We are a development stage company and presently have only nominal operations.
Expenses
The major components of our expenses for the year are outlined in the table below:
The increase in general and administrative expenses during the year end December 31, 2009 is primarily a result of an increase in professional fees. Professional fees include legal and accounting fees incurred in connection with meeting our ongoing reporting obligations under the Exchange Act. Also, we did not incur any interest or research and development fees during the year ended December 31, 2009 or December 31, 2008.
Liquidity And Capital Resources
Our working capital deficit increased during the year ended December 31, 2009 because of the fact that our current liabilities, particularly our accounts payable increased during the year ended December 31, 2009 compared to the year ended December 31, 2008.
Financing Requirements
From inception to December 31, 2009, we have suffered cumulative losses in the amount of $1,048,258. We expect to continue to incur substantial losses as we continue the development of our business. Since our inception, we have funded operations through common stock issuances, related party loans, and the support of creditors in order to meet our strategic objectives. Our management believes that sufficient funding will be available to meet our business objectives, including anticipated cash needs for working capital, and are currently evaluating several financing options, including a public offering of securities. However, there can be no assurance that we will be able to obtain sufficient funds to continue the development of and, if successful, to commence the sale of, our products. As a result of the foregoing, our independent auditors believe there exists substantial doubt about our ability to continue as a going concern. There is no assurance that we will be able to obtain additional financing if and when required. We anticipate that additional financing may come in the form of sales of additional shares of our common stock which may result in dilution to our current shareholders.
Financial Condition, Capital Resources and Liquidity
As of December 31, 2009, we have a deficit accumulated during the development stage of $1,048,258. At December 31, 2009, we had assets totaling $43 and current liabilities of $85,723 attributable to amounts due to related parties and accounts payable.
We currently have a working capital deficit and there can be no assurance that our financial condition will improve. We are expected to continue to have minimal working capital or a working capital deficit as a result of our development stage.
Even though we believe, without assurance, that we will obtain sufficient capital with which to implement our business plan on a limited scale, we are not expected to continue in operation without an infusion of capital. In order to obtain additional equity financing, we may be required to dilute the interest of existing shareholders or forego a substantial interest of our revenues, if any.
We have no potential capital resources from any outside sources at the current time. In our initial phase, we will operate out of the facility provided by Mr. Salamon
Our ability to continue as a going concern is dependent upon our ability to attract a sufficiently large and profitable licensee base to license our electrical generator technology.
Net Operating Losses
As of December 31, 2009, we have accumulated a net loss of $1,048,258.
Research and Development
482229 is now responsible for all further development, testing and commercialization of all EPG products derived from our 2001 patent pending. Until we can secure other qualified licensees regarding the EPG products derived from our other patents pending, all further development, testing and commercialization of those EPG products will be completed by us, subject to obtaining the necessary financing. Upon securing such other qualified licensees, any further research, development and commercialization of those EPG products and all related costs will be the responsibility of the licensee.
We, under the direction of Mr. Salamon, are continually researching and studying “Alternative Energy Sources” and plan to develop other power generation devices as capital funding becomes available. Alternative Energy Sources are those which are not supplied by the burning of fossil fuels or the splitting of atoms. Some of the alternative energy sources include solar energy, wind power, geothermal, tides and hydro power.
We have developed a smaller, portable EPG utilizing similar designs and adding a solar power component. We have also developed prototypes of EPG products that generate power wirelessly. Once we are able to raise additional working capital, we will further develop these products.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Material Commitments for Capital Expenditures
We had no contingencies or long-term commitments at December 31, 2009.
Critical Accounting Policies
There were no changes to the critical accounting policies as discussed in our 2008 Form 10-K filed on April 15, 2009.
Item 8.
Item 8. Financial Statements.
Exhibit 99.1, “Salamon Group Financial Statements” are incorporated herein by reference.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A(T).
Item 9A(T). Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2009 (the “Evaluation Date”). Based upon the evaluation of our disclosure controls and procedures as of the Evaluation Date, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective because of the identification of material weaknesses in our internal control over financial reporting which is identified below, which we view as an integral part of our disclosure controls and procedures.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Rule 13a-15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.
Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and our receipts and expenditures of are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error and the circumvention of overriding controls. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2009. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on its evaluation, our management concluded that there are material weaknesses in our internal control over financial reporting and Management has concluded that the Company’s internal controls over financial reporting are ineffective as of December 31, 2009. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
The material weakness relates to the lack of segregation of duties in financial reporting, as our financial reporting and all accounting functions are performed by an external consultant with no oversight by a professional with accounting expertise. Our Chief Executive Officer and Chief Financial Officer does not possess accounting expertise and we do not have a separately designated audit committee. These weaknesses are due to our lack of excess working capital to hire additional staff. To remedy these material weaknesses, we intend to engage another qualified accountant to assist with financial reporting as soon as our finances will allow.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the fourth quarter of our fiscal year ended December 31, 2009 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Controls
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our Disclosure Controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management or board override of the control.
The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Item 9B.
Item 9B. Other Information.
None.
PART III
Item 10.
Item 10. Directors, Executive Officers, Promoters and Control Persons of the Company
Directors and Executive Officers
Set forth below are the names, ages, terms of office and positions of our executive officers and directors.
All directors hold office until the next annual meeting of our shareholders and until their successors have been elected and qualify. Officers serve at the pleasure of the Board of Director. The directors will devote such time and effort to our business and affairs as may be necessary to perform their responsibilities. No annual meetings.
Aside from Mr. Salamon, there are no other persons whose activities will be material to our operations at this time. Mr. Salamon is our sole “promoter” as such term is defined under the Act. However as finances allow, we will engage management and other personnel as required in such areas as finance, administration, sales and marketing, research and development, and overall management.
John E. Salamon was born in Lethbridge, Alberta, Canada in 1946. After completing public education in Bow Island, Alberta, Mr. Salamon began a career path working within the energy industry. His initial tasks involved helping to explore for oil and gas in the oil fields of Northwestern Alberta. Within the scope of oilfield engineering, Mr. Salamon participated in many courses of study allowing him to experiment with the leading edge technologies and their implementation. Mr. Salamon has over 5 years of experience in oilfield exploration and drilling operations in Europe and Asia. During his tenure in the oil and gas industry, Mr. Salamon did a lot of work repairing and maintaining small and medium sized electric motors and generators. Since then he has spent several years, on a part-time basis, studying and researching in the field of electric power generation and alternative energy sources.
During 1997, Mr. Salamon performed promotional services for Globus Cellular in Kelowna, British Columbia, Canada. He performed the work as an independent contractor through his wholly owned company, “J. Salamon and Associates”. In late 1997 and 1998, Mr. Salamon performed promotional and product marketing services as an independent contractor for Beitler Consulting, a U.S. based import-export company. Mr. Salamon provided an avenue for Beitler Consulting to begin marketing product lines into the Canadian marketplace. In February 1998, Mr. Salamon formed Space Globe Technologies Ltd. for the purpose of researching and developing energy generation technologies. During 1999, Mr. Salamon performed promotional consulting work with an Edmonton based public corporation, Sustainable Developments Inc. He introduced the Edmonton corporation to potential investors, helped them to generate financial resources, and assisted them with corporate development and diversification strategies.
Significant Employees
We have no employees. Mr. Salamon is currently responsible for all of our business activities.
Family Relationships
There are no family relationships between or among our executive officer and directors.
Item 11.
Item 11. Executive Compensation.
We issued to Mr. Salamon, our executive officer, 1,500,000 shares of restricted common stock in consideration for $1,500 cash in 2001. Except for the above-described compensation, we do not anticipate that any of our executive officers will receive any cash or non-cash compensation for his or her services to us until we commence business operations. At such time as we commence operations, we expect that the Board of Directors will approve the payment of salaries in a reasonable amount to each of our officers for their services in the positions. At such time, the Board of Directors may, in its discretion, approve the payment of additional cash or non-cash compensation to our officers for their services to us.
We do not provide officers with pension, stock appreciation rights, long-term incentive or other plans but we may implement such plans in the future. In addition, Mr. Salamon is not currently under an employment agreement with us.
Compensation of Directors
We have no standard arrangements for compensating our directors for their attendance at meetings of the Board of Directors.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth information as of December 31, 2009 regarding the ownership of our common stock by each shareholder known by us to be the beneficial owner of more than five per cent of our outstanding shares of common stock, each director and all executive officers and directors as a group. Except as otherwise indicated, each of the shareholders has sole voting and investment power with respect to the shares of common stock beneficially owned.
1 Mr. Salamon is our President and a director. His beneficial ownership consists of 1,500,000 shares personally held by Mr. Salamon and 11,871,702 shares owned by Space Globe Technologies, a Canadian corporation wholly owned by Mr. Salamon.
Item 13.
Item 13. Certain Relationships and Related Transactions.
None.
Item 14.
Item 14. Principal Accountant Fees and Services .
(1) Audit Fees
The aggregate fees billed for professional services rendered by our principal accountants for the audit of the Registrant's annual financial statements and review of the financial statements included in the Registrant's Forms 10-K and 10-Q or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for fiscal years 2009 and 2008 were approximately $38,000 each year.
(2) Audit Related Fees
There were no audit related fees for professional services rendered for fiscal years 2009 and 2008.
(3) Tax Fees
Tax fees for fiscal years 2009 and 2008 were $1,200 each year.
(4) All Other Fees
Not applicable.
(5) Audit Committee Policies and Procedures
The Registrant does not have an audit committee. The Board of Directors of the Registrant approved all of the services rendered to the Registrant by our principal accountants for fiscal years 2009 and 2008
Item 15.
Item 15. Exhibits.
(1) Incorporated by reference to the exhibits of the Registration Statement on Form 10-KSB filed with the Securities and Exchange Commission on August 6, 2004.
(2) Incorporated by reference to the exhibits of the Quarterly Report on Form 10-QSB filed with the Securities and Exchange Commission on January 15, 2005.
(3) Incorporated by reference to the exhibits of the Quarterly Report on Form 10-QSB filed with the Securities and Exchange Commission on August 20, 2007.
(4) Incorporated by reference to the exhibits of the Quarterly Report on Form 10-QSB filed with the Securities and Exchange Commission on November 6, 2007.
(5) Incorporated by reference to the exhibits of the Annual Report on Form 10-KSB filed with the Securities and Exchange Commission on April 14, 2008.
(6) Incorporated by reference to the exhibits of the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 14, 2008.
(7) Incorporated by reference to the exhibits of the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 14, 2008.
(8) Filed herewith.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.