ITEM 1. BUSINESS
OVERVIEW
We were incorporated in the State of Nevada on August 13, 2009 under the name of Flameret, Inc. Flameret; Inc. is a provider of a fire barrier product named Flameret.
FLAMERET, INC. Flameret currently offers three products, Flameret, Ultra Flamex and Impex. Flameret is a flame retardant liquid that is applied to textiles. These treated textiles are used at the production stage of such products as mattresses to resist ignition from smoldering cigarettes and resist ignition from an open-flame heat source. Flameret is a development stage company with a limited history of development stage operations.
MARKET OPPORTUNITY
The fire barrier industry is a multidisciplinary and widely applicable industry. Products enabled by fire barrier technology are applicable to a large number of industries including mattresses, sofas, chairs, carpeting, and workers’ coveralls.
All mattresses made on or after July 1, 2007 for sale in the United States must now meet two separate federal flammability standards administered by the Consumer Product Safety Commission (CPSC) and issued under the Flammable Fabrics Act.
The use of fire barriers in the mattresses and mattresses bedding for children in particular is an area of increasing interest, and these types of materials are the cornerstones of new generations of mattresses and mattresses beddings. Flameret, Inc. aims to establish its Flameret product to the mattresses industry. The Company believes that the combination of their Flameret product, aimed in an industry that has widespread applicability and furthermore is creating interest on a global scale, is one of its unique features.
DESCRIPTION OF PRODUCTS
Product Development:
In July 2009, Mr. Glover began working with Seatex LTD www.seatexcom, located at 445 TX-36 Rosenberg, Texas 77471, to blend, manufacture and package the Flameret product for Flameret, Inc. Mr. Glover provided Seatex with the United American, Inc. formula for Flameret.
Since 1968 Seatex has been providing turnkey chemical compounding, contract manufacturing and private label packaging services. Areas of expertise include food service, food processing, automotive, institutional and industrial laundry, janitorial, industrial and oilfield service markets. Seatex can manufacture and package to strict specifications, duplicate formulas, or make available our own 400 plus finished formulations. Seatex is employee owned. Seatex is a full service contract manufacturer dedicated to the production and marketing of branded products and turnkey custom formulations.
Private Label:
Seatex offers a turn-key program for private labelers. They maintain a very large library of formulations compiled from 40 years of chemical blending experiences. Seatex can assist in label design, maintain MSDS and all regulatory issues. Seatex also carries full product liability insurance.
Seatex currently sits on approximately 20 acres occupying over 210,000 square feet of a modern manufacturing and warehousing facilities. Rail service is available.
Flameret, Inc. will provide Seatex with its formula for Flameret. The formula is based on two patents #4,961,865 and #4,950,410 which the company received from United American, Inc. These two patents contain all required information to produce Flameret.
Flameret, Inc. intends to contract with Seatex to batch, mix, fill, package, label, palletize and ship a proprietary flame retardant compound product (Flameret) subject to strict requirements for quality control, cost control, timeliness and confidentiality, once it has sold Flameret to a customer.
Manufacturing:
Flameret, Inc. intends to have Seatex manufacture Flameret for the company. All key ingredients included in our product are readily available from Seatex. The following ingredients are contained in Flameret (Sodium Chloride, Magnesium Chloride, Sodium Sulfate Decahydrate, Calcium Chloride, Magnesium Sulfate, Calcium Sulfate, Potassium Sulfate, Magnesium Bromide, Potassium Chloride and Water). Seatex has not produced any Flameret for Flameret, Inc. Flameret, Inc. does not have any formal agreements with Seatex to batch, mix, fill, package, label, palletize and ship a proprietary flame retardant compound product (Flameret).
Flameret, Inc. Technology
UNITED AMERICAN AND FLAMERET
On May 18, 1989 United American Inc. (UAI) acquired patent #4,961,865 (fire extinguishing solutions for extinguishing phosphorus and metal fire) and patent #4,950,410 from the inventor Edmund Pennartz. After acquiring the patents and the technology from Mr. Pennartz, UAI developed three fire retardant products, 1. Flameret, a textile FR treatment. 2. Ultra Flamex, a fire extinguishing product and, 3. Impex.
Flameret is applied as a liquid compound to textiles, this produces a carbon membrane which is activated when heat is applied to produce the fire retardant properties, and this protection is called a carbon barrier shield. [Fire barrier].
United American, Inc. has never sold their products to any manufacturers; the company’s sole business is the development of fire barrier products. On August 14, 2009 Flameret, Inc. acquired the rights to market and sell United American, Inc.’s three products 1. Flameret, a textile FR treatment. 2. Flamex , a fire extinguishing product and 3. Impex. for 15 years worldwide. Flameret has the rights to use all studies, reports and research conducted by UAI in regard to these three products. Flameret, Inc. will compensate United American, Inc. by paying a 1.5% gross royalty to UAI on all products sold.
FLAMERET, INC. is presently attempting to market for sale one product named (Flameret), a textile FR treatment. Flameret is a liquid that is applied to textiles, these treated textiles are used at the production stage of such products as mattresses to resist ignition from smoldering cigarettes and resist ignition from an open-flame heat source. The company aims to focus on long-term client retention within the U.S. and Canadian mattress industries.
Flameret, Inc. is a development stage company. Flameret, Inc. has a limited history of development stage operations. We presently do not have the funding to execute our business plan.
We expect to provide one product named (Flameret), a textile FR treatment to mattress manufacturers. As such, we may not always be successful in achieving a long-term contract or be immediately compensated for services rendered. Although we currently restrict our fire retardant products to mattress manufacturers our products are applicable to a wide range of fields and businesses, and therefore are not restricted to a particular industry.
Achievement of our business objective is basically dependent upon the judgment, skill and knowledge of our management. Mr. Glover, currently our sole executive officer and director. There can be no assurance that a suitable replacement could be found for any of our officers upon their retirement, resignation, inability to act on our behalf, or death.
DISTRIBUTION
Flameret Fire Retardant
In July 2009, Mr. Glover provided Seatex with the United American, Inc. formula for Flameret to determine if Seatex was able to blend, manufacture and package the Flameret product for Flameret, Inc. Seatex LTD www.seatexcom, is located at 445 TX-36 Rosenberg, Texas, 77471.
After reviewing the formula Seatex advised Flameret, Inc. that they could batch, mix, fill, package, label, palletize and ship a proprietary flame retardant compound product (Flameret) subject to strict requirements for quality control, cost control, timeliness and confidentiality.
Seatex has not produced any Flameret for Flameret, Inc. Flameret, Inc. does not have any formal agreements with Seatex to batch, mix, fill, package, label, palletize and ship a proprietary flame retardant compound product (Flameret). Flameret, Inc. intends to enter into a formal contract with Seatex once it has sold Flameret to a customer.
It is a light weight transparent liquid and does not leave white flaky residues and will not change the hand [feel] or scent of the fabric. It will not discolor or shrink the fabric and is odorless. It needs less than 24 hours for curing time depending upon the process and textile application to allow for complete fiber penetration and compound set up.
Flameret FR is a water based solution applied to the fresh milled textiles. The liquid solution first penetrates into the molecular structure. The treated textile is then dried through ovens that evaporate the water leaving a fire retardant compound thoroughly bound and bonded throughout the molecular structure of the fabric. It is this bound compound that creates fire resistance when an external heat source is applied - thus creating a carbon barrier shield. When external heat is applied to the treated surface by heat sources such as candles, matches, molten metal or any direct flame, this bound compound is changed into a carbon barrier shield. This carbon barrier shield triggers an interlocking effect of one fiber to another and produces a surface that deflects heat and will not allow fire to penetrate the surface. This carbon barrier shield will cause the fire to die out as the carbon barrier shield suffocates the fire by not allowing oxygen to the fire on the fibers. FLAMERET’s FR will be used on textiles that are natural as well as synthetic fibers.
Flameret will be used on the components of mattresses prior to their final assembly.
Mattress manufacturing use the following components in their mattresses, ticking, high loft non-woven and needle pointed fibers, filler cloths, universal borders and mattress socks. Flameret can be applied to all of these materials to impart a carbon barrier shield.
These textiles include almost every fabric that is used to make a mattress
1.
Ticking - A material used on the top and bottom sides of the top mattress and foundations.
2.
Universal Borders - The material that is used on the sides of the top mattress and foundation
3.
Non Woven Loft and Side Panels - In some applications a fire barrier inserted under the ticking is necessary as in the case of pillow top with heavy fuel load and some institutional beds
4.
Mattress Sock - Like the word implies in some applications such as with memory foam a stretchy material is needed to shape with the memory foam when it is slept on.
5.
Filler Cloth - is an inexpensive cotton cloth material that goes on the top of the foundation.
To utilize our second prong of sales approach conducted by Mr. John Glover the company will need to seek additional capital to fund this model. Presently the Company does not have the additional capital needed to utilize the second prong of sales, setting up distributors of the Flameret product.
In 2013 Flameret, Inc. intends to market through mattress distributors its Flameret product. In order for the Company to begin the distributor model it will require the Company to seek additional capital in excess of $5M in order to develop the distributor network. The Company believes it will not have the additional capital until the second quarter of 2013.
COMPETITION
The fire retardant industry is highly competitive and is characterized by a large number of competitors ranging from small to large companies with substantial resources. The company’s main competition is 3M and DuPont, who provide oil based toxic retardants. Many of our potential competitors have substantially larger customer bases, greater name recognition, greater reputation, and significantly greater financial and marketing resources than we do. In the future, aggressive marketing tactics implemented by our competitors could impact our limited financial resources and adversely affect our ability to compete in these markets. There are some other small operators who claim that their products are non toxic but do not have the testing to support their claims.
Price competition exists in fire retardant products. Costs of raw materials decreases within the industry could adversely affect our operations and profitability. There are many fire retardant companies that could discount their products which could result in lower revenues for the entire industry. A shortfall from expected revenue levels would have a significant impact on our potential to generate revenue and possibly cause our business to fail.
EMPLOYEES
Christopher Glover is Director, Chief Executive Officer, and President, of Flameret, Inc. Presently, there are three additional employees of the Company, John Meredith, CFO, John Glover, Vice President of Marketing and Susan Allwork, Secretary and Director.
The Company plans to employ individuals on an as needed basis. The company anticipates that it will need to hire additional employees as the business grows. In addition, the Company may expand the size of our Board of Directors in the future. Presently Christopher Glover, John Meredith and John Glover will devote 40 hours a week to the affairs of the Company. Christopher Glover, John Meredith, and John Glover do not receive a salary or benefits in any form. Presently the Company does not have any plans to begin paying salaries, cash or otherwise, or offering any form of benefits to our Board of Directors, Officer and employees.
ITEM 1A.
ITEM 1A. RISK FACTORS
In addition to the other information in this Annual Report, the following risk factors, among others, should be considered carefully in evaluating the Company and its business.
A) RISKS RELATED TO OUR BUSINESS
THE COMPANY HAS A LIMITED DEVELOPMENT STAGE OPERATING HISTORY UPON WHICH TO BASE AN EVALUATION OF ITS BUSINESS AND PROSPECTS. WE MAY NOT BE SUCCESSFUL IN OUR EFFORTS TO GROW OUR BUSINESS AND TO EARN INCREASED REVENUES. AN INVESTMENT IN OUR SECURITIES REPRESENTS SIGNIFICANT RISK AND YOU MAY LOSE ALL OR PART OF YOUR ENTIRE INVESTMENT.
We have a limited history of development stage operations and we may not be successful in our efforts to grow our business and to earn revenues. Our business and prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development, particularly companies providing services to a rapidly evolving market such as fire retardants. As a result, management may be unable to adjust its spending in a timely manner to compensate for any unexpected revenue shortfall. This inability could cause net losses in a given period to be greater than expected. An investment in our securities represents significant risk and you may lose all or part of your entire investment.
WE HAVE A HISTORY OF LOSSES. FUTURE LOSSES AND NEGATIVE CASH FLOW MAY LIMIT OR DELAY OUR ABILITY TO BECOME PROFITABLE. IT IS POSSIBLE THAT WE MAY NEVER ACHIEVE PROFITABILITY. AN INVESTMENT IN OUR SECURITIES REPRESENTS SIGNIFICANT RISK AND YOU MAY LOSE ALL OR PART OF YOUR ENTIRE INVESTMENT.
We have yet to establish profitable development stage operations or a history of profitable development stage operations. We anticipate that we will continue to incur substantial development stage operating losses for an indefinite period of time due to the significant costs associated with the development of our business.
Since incorporation, we have expended financial resources on the development of our business. As a result, losses have been incurred since incorporation. Management expects to experience development stage operating losses and negative cash flow for the foreseeable future. Management anticipates that losses will continue to increase from current levels because the Company expects to incur additional costs and expenses related to: marketing and promotional activities; the possible addition of new personnel; and the development of relationships with strategic business partners.
The Company’s ability to become profitable depends on its ability to generate and sustain sales while maintaining reasonable expense levels. If the Company does achieve profitability, it cannot be certain that it would be able to sustain or increase profitability on a quarterly or annual basis in the future. An investment in our securities represents significant risk and you may lose all or part of your entire investment.
IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL.
We will need to obtain additional financing in order to complete our business plan because we currently do not have any income. We do not have any arrangements for financing and we may not be able to find such financing if required. Obtaining additional financing would be subject to a number of factors, including investor acceptance. These factors may adversely affect the timing, amount, terms, or conditions of any financing that we may obtain or make any additional financing unavailable to us. If we do not obtain additional financing our business will fail.
OUR DEVELOPMENT STAGE OPERATING RESULTS WILL BE VOLATILE AND DIFFICULT TO PREDICT. IF THE COMPANY FAILS TO MEET THE EXPECTATIONS OF PUBLIC MARKET ANALYSTS AND INVESTORS, THE MARKET PRICE OF OUR COMMON STOCK MAY DECLINE SIGNIFICANTLY.
Management expects both quarterly and annual development stage operating results to fluctuate significantly in the future. Because our development stage operating results will be volatile and difficult to predict, in some future quarter our development stage operating results may fall below the expectations of securities analysts and investors. If this occurs, the trading price of our common stock may decline significantly.
A number of factors will cause gross margins to fluctuate in future periods. Factors that may harm our business or cause our development stage operating results to fluctuate include the following: the inability to obtain new customers at reasonable cost; the ability of competitors to offer new or enhanced services or products; price competition; the failure to develop marketing relationships with key business partners; increases in our marketing and advertising costs; increased labor costs that can affect demand for fire retardant products; the amount and timing of development stage operating costs and capital expenditures relating to expansion of operations; a change to or changes to government regulations; a general economic slowdown. Any change in one or more of these factors could reduce our ability to earn and grow revenue in future periods.
WE HAVE INCURRED LOSSES SINCE INCEPTION AND EXPECT TO INCUR LOSSES FOR THE FORSEEABLE FUTURE. IF WE DO NOT RECEIVE ADDITIONAL FUNDING, WE WOULD HAVE TO CURTAIL OR CEASE DEVELOPEMNT STAGE OPERATIONS. AN INVESTMENT IN OUR SECURITIES REPRESENTS SIGNIFICANT RISK AND YOU MAY LOSE ALL OR PART OF YOUR ENTIRE INVESTMENT.
We have incurred recurring net losses from operations resulting in an accumulated deficit of $7,261,505 and a working capital deficit of $858,234 as of August 31, 2012. These factors raise substantial doubt about the Company’s ability to continue as a going concern. At August 31, 2012, our cash on hand was $183. We do not currently have sufficient capital resources to fund operations. To stay in business, we will need to raise additional capital through public or private sales of our securities, debt financing or short-term bank loans, or a combination of the foregoing.
We will need additional capital to fully implement our business, operating and development plans. However, additional funding from an alternate source or sources may not be available to us on favorable terms, if at all. To the extent that money is raised through the sale of our securities, the issuance of those securities could result in dilution to our existing security holder. If we raise money through debt financing or bank loans, we may be required to secure the financing with some or all of our business assets, which could be sold or retained by the creditor should we default in our payment obligations. If we fail to raise sufficient funds, we would have to curtail or cease operations.
OUR CURRENT BUSINESS DEVELOPMENT STAGE OPERATIONS RELY HEAVILY UPON OUR KEY EMPLOYEE AND FOUNDER, MR. CHRISTOPHER GLOVER.
We have been heavily dependent upon the expertise and management of Mr. Christopher Glover, our Chief Executive Officer and President, and our future performance will depend upon his continued services. The loss of the services of Mr. Glover’s services could seriously interrupt our business operations, and could have a very negative impact on our ability to fulfill our business plan and to carry out our existing development stage operations. The Company currently does not maintain key man life insurance on this individual. There can be no assurance that a suitable replacement could be found for him upon retirement, resignation, inability to act on our behalf, or death.
OUR FUTURE GROWTH MAY REQUIRE RECRUITMENT OF QUALIFIED EMPLOYEES.
In the event of our future growth in administration, marketing, and customer support functions, we may have to increase the depth and experience of our management team by adding new members. Our future success will depend to a large degree upon the active participation of our key officers and employees. There is no assurance that we will be able to employ qualified persons on acceptable terms. Lack of qualified employees may adversely affect our business development.
(B) RISKS RELATED TO THE INDUSTRY
THE FIRE RETARDANT INDUSTRY IS COST COMPETITIVE AND IS CHARACTERIZED BY LOW FIXED COSTS. A REDUCTION IN COST FOR THE INDUSTRY COULD AFFECT THE DEMAND FOR OUR FIRE RETARDANT PRODUCTS.
The fire retardant industry is highly competitive and is characterized by a large number of competitors ranging from small to large companies with substantial resources. Many of our potential competitors have substantially larger customer bases, greater name recognition, greater reputation, and significantly greater financial and marketing resources than we do. In the future, aggressive marketing tactics implemented by our competitors could impact our limited financial resources and adversely affect our ability to compete in these markets.
Price competition exists in fire retardant products. Costs of raw material decreases within the industry could adversely affect our operations and profitability. There are many fire retardant companies that could discount their products which could result in lower revenues for the entire industry. A shortfall from expected revenue levels would have a significant impact on our potential to generate revenue and possibly cause our business to fail.
THE COMPANY’S RELIANCE ON MATTRESS MANUFACTURERS MAY HAVE A SIGNIFICANT IMPACT ON THE COMPANY’S ABILITY TO GENERATE REVENUE AND POSSIBLY CAUSE OUR BUSINESS TO FAIL.
The Company intends to provide a fire retardant product to mattress manufactures. As such, the Company may not always be successful in achieving a long-term contract or be immediately compensated for products and services rendered. Since we expect our fire retardant product to be sold to mattress manufactures any slowdown in that industries would greatly affect the company.
The company’s success is dependent on its ability to obtain and maintain clients. No assurances can be given that the Company will be able to create a client or maintain a client base or that it will be able to attract new clients. The loss of one or more new clients of the Company or a significant reduction in business from such new clients could have a material adverse effect on the Company. The Company does not have contracts with any clients at this time.
OUR DEVELOPMENT STAGE OPERATING RESULTS MAY FLUCTUATE DUE TO FACTORS WHICH ARE NOT WITHIN OUR CONTROL.
Our development stage operating results are expected to fluctuate in the future based on a number of factors, many of which are not in our control. Our development stage operating expenses primarily include general administrative expenses that are relatively fixed in the short-term. If our revenues are lower than we expect because demand for our product and service diminishes, or if we experience an increase in defaults among approved applicants or for any other reasons we may not be able to quickly return to acceptable revenue levels.
Because of the unique nature of our business and the fact that there are no comparable past business models to rely on, future factors that may adversely affect our business are difficult to forecast. Any shortfall in our revenues would have a direct impact on our business. In addition, fluctuations in our quarterly results could adversely affect the market price of our common stock in a manner unrelated to our long-term operating performance.
WE HAVE A SHORT DEVELOPMENT STAGE OPERATING HISTORY AND FACE MANY OF THE RISKS AND DIFFICULTIES FREQUENTLY ENCOUNTERED BY A YOUNG COMPANY.
We have a short development stage operating history from August 13, 2009 to present for investors to evaluate the potential of our business development. We are continuing to build our customer base and our brand name. We do not have any customers at this time. In addition, we also face many of the risks and difficulties inherent in introducing new products and services. These risks include the ability to:
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Increase awareness of our brand name;
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Develop an effective business plan;
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Meet customer standards;
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Implement advertising and marketing plan;
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Attain customer loyalty;
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Maintain current strategic relationships and develop new strategic relationships;
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Respond effectively to competitive pressures;
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Continue to develop and upgrade our service; and
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Attract, retain and motivate qualified personnel.
Our future will depend on our ability to raise additional capital and bring our product and service to the marketplace, which requires careful planning to provide a product and service that meets customer standards without incurring unnecessary cost and expense.
WE MAY NEED ADDITIONAL CAPITAL TO DEVELOP OUR BUSINESS.
The development of our services will require the commitment of resources to increase the advertising, marketing and future expansion of our business. In addition, expenditures will be required to enable us in 2011 to conduct planned business research, development of new affiliate and associate offices, and marketing of our existing and future products and services. Currently, we have no established bank-financing arrangements. Therefore, it is possible that we would need to seek additional financing through subsequent future private offering of our equity securities, or through strategic partnerships and other arrangements with corporate partners.
We cannot give you any assurance that any additional financing will be available to us, or if available, will be on terms favorable to us. The sale of additional equity securities could result in dilution to our stockholders. The occurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financing covenants that would restrict our operations. If adequate additional financing is not available on acceptable terms, we may not be able to implement our business development plan or continue our business operations.
WE MAY NOT BE ABLE TO BUILD OUR BRAND AWARENESS.
Development and awareness of our brand Flameret will depend largely upon our success in creating a customer base and potential referral sources. In order to attract and retain customers and to promote and maintain our brand in response to competitive pressures, management plans to gradually increase our marketing and advertising budgets. If we are unable to economically promote or maintain our brand, then our business, results of operations and financial condition could be severely harmed. The company presently has a deficit of $858,234 in working capital.
OUR FUTURE SUCCESS RELIES UPON A COMBINATION OF PATENTS AND PATENTS PENDING, PROPRIETARY TECHNOLOGY AND KNOW-HOW, TRADEMARKS, CONFIDENTIALITY AGREEMENTS AND OTHER CONTRACTUAL COVENANTS TO ESTABLISH AND PROTECT OUR INTELLECTUAL PROPERTY RIGHTS. IF OUR PRODUCTS ARE DUPLICATED OUR RESULTS OF OPERATIONS WOULD BE NEGATIVELY IMPACTED.
Our application for trademark protection has been approved for "Flameret.” Because intellectual property protection is critical to our future success, we intend to rely heavily on trademark, trade secret protection and confidentiality or license agreements with our employees, customers, partners and others to protect proprietary rights. However, effective trademark, service mark and trade secret protection may not be available in every country in which we intend to sell our products and services. Unauthorized parties may attempt to copy aspects of our products or to obtain and use our proprietary information. As a result, litigation may be necessary to enforce our intellectual property rights to protect our trade secrets and to determine the validity and scope of the proprietary rights of others. Such litigation could result in substantial costs and diversion of recourses and could significantly harm our business and operating results.
Furthermore, the relationship between regulations governing domain names and laws protecting trademarks and similar proprietary rights is unclear. Therefore, we may be unable to prevent third parties from acquiring domain names that are similar to, infringe upon or otherwise decrease the value of intended trademarks and other proprietary rights.
There can be no assurance that third parties will not assert infringement claims against us. If infringement claims are brought against us, there can be no assurance that we will have the financial resources to defend against such claims or prevent an adverse judgment against us. In the event of an unfavorable ruling on any such claim, there can be no assurance that a license or similar agreement to utilize the intellectual property rights in question relied upon by us in the conduct of our business will be available to us on reasonable terms, if at all. The loss of such rights (or the failure by us to obtain similar licenses or agreements) could have a material adverse effect on our business, financial condition and results of operations.
OUR BUSINESS EMPLOYS LICENSED UNITED AMERICAN, INC. TECHNOLOGY WHICH MAY BE DIFFICULT TO PROTECT AND MAY INFRINGE ON THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.
We currently license our technology from United American, Inc. United American, Inc. owns two U.S. patents, (patent #4,961,865 and patent#4,950,410) and may file more patent applications in the future. Patent #4,961,865 expired on 10-09-2010 and Patent #4,950,410 expired on 8-21-2010. Both Patent renewals are pending . Our success depends, on these patents and on our ability to use the United American, Inc. Technology, and for United American, Inc. to obtain patents, maintain trade secrecy and not infringe the proprietary rights of third parties. We cannot assure you that the patents of others will not have an adverse effect on our ability to conduct our business, that we will develop additional proprietary technology that is patentable or that any patents issued to us or United American, Inc. will provide us with competitive advantages or will not be challenged by third parties. Further, we cannot assure you that others will not independently develop similar or superior technologies, duplicate elements of the United American, Inc. Technology or design around it. It is possible that we may need to acquire other licenses to, or to contest the validity of, issued patents or claims of third parties. We cannot assure you that any license would be made available to us on acceptable terms, if at all, or that we would prevail in any such contest. In addition, we could incur substantial costs in defending ourselves in suits brought against us for alleged infringement of another party’s patents in bringing patent infringement suits against other parties based on our licensed patents.
In addition to licensed patent protection, we also rely on United American Inc. trade secrets, proprietary know-how and technology that we seek to protect, in part, by confidentiality agreements with our prospective blenders, manufactures employees and consultants. We cannot assure you that these agreements will not be breached, that we will have adequate remedies for any breach, or that our trade secrets and proprietary know-how will not otherwise become known or be independently discovered by others.
WE MAY INCUR SUBSTANTIAL COSTS OR LOSE IMPORTANT RIGHTS AS A RESULT OF LITIGATION OR OTHER PROCEEDINGS RELATING TO OUR PRODUCTS, PATENTS AND OTHER INTELLECTUAL PROPERTY RIGHTS.
In recent years, there has been significant litigation involving patents and other intellectual property rights in many technology-related industries. Until recently, patent applications were retained in secrecy by the US Patent and Trademark Office until and unless a patent was issued. As a result, there may be US patent applications pending of which we are unaware that may be infringed by the use of our technology or a part thereof, thus substantially interfering with the future conduct of our business. In addition, there may be issued patents in the United States or other countries that are pertinent to our business of which we are not aware. We and future customers could be sued by other parties for patent infringement in the future. Such lawsuits could subject us and them to liability for damages or require us to obtain additional licenses that could increase the cost of our products, which might have an adverse effect on our sales.
In addition, in the future we may assert our intellectual property rights by instituting legal proceedings against others. We may not be able to successfully enforce United American, Inc. patents in any lawsuits we may commence. Defendants in any litigation we may commence to enforce United American, Inc. patents may attempt to establish that United American, Inc. patents are invalid or are unenforceable. Any patent litigation could lead to a determination that one or more of our patents are invalid or unenforceable. If a third party succeeds in invalidating one or more of our patents that party and others could compete more effectively against us. Our ability to derive sales from products or technologies covered by these patents could be adversely affected.
Whether we are defending the assertion of third party intellectual property rights against our business as a result of the use of United American, Inc. technology, or we are asserting our own intellectual property rights against others, such litigation can be complex, costly, protracted and highly disruptive to our business operations by diverting the attention and energies of management and key technical personnel. As a result, the pendency or adverse outcome of any intellectual property litigation to which we are subject could disrupt business operations, require the incurrence of substantial costs and subject us to significant liabilities, each of which could severely harm our business.
Plaintiffs in intellectual property cases often seek injunctive relief. Any intellectual property litigation commenced against us could force us to take actions that could be harmful to our business and thus to our future sales.
WE MAY INCUR SIGNIFICANT COSTS TO BE A PUBLIC COMPANY TO ENSURE COMPLIANCE WITH U.S. CORPORATE GOVERNANCE AND ACCOUNTING REQUIREMENTS AND WE MAY NOT BE ABLE TO ABSORB SUCH COSTS.
We may incur significant costs associated with our public company reporting requirements, costs associated with newly applicable corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the SEC. We expect all of these applicable rules and regulations to significantly increase our legal and financial compliance costs and to make some activities more time consuming and costly. We also expect that these applicable rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as executive officers. We are currently evaluating and monitoring developments with respect to these newly applicable rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs. In addition, we may not be able to absorb these costs of being a public company, which will negatively affect our business operations.
THE LIMITED PUBLIC COMPANY EXPERIENCE OF OUR MANAGEMENT TEAM COULD ADVERSELY IMPACT OUR ABILITY TO COMPLY WITH THE REPORTING REQUIREMENTS OF U.S. SECURITIES LAWS.
Our management team has limited public company experience, which could impair our ability to comply with legal and regulatory requirements such as those imposed by Sarbanes-Oxley Act of 2002. Our senior management has never had sole responsibility for managing a publicly traded company. Such responsibilities include complying with federal securities laws and making required disclosures on a timely basis. Our senior management may not be able to implement programs and policies in an effective and timely manner that adequately respond to such increased legal, regulatory compliance and reporting requirements, including the establishing and maintaining internal controls over financial reporting. Any such deficiencies, weaknesses or lack of compliance could have a materially adverse effect on our ability to comply with the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which is necessary to maintain our public company status. If we were to fail to fulfill those obligations, our ability to continue as a U.S. public company would be in jeopardy in which event you could lose your entire investment in our company.
C) RISKS RELATED TO THE OWNERSHIP OF OUR SECURITIES
WE MAY NEVER PAY ANY DIVIDENDS TO SHAREHOLDERS.
We have never declared or paid any cash dividends or distributions on our capital stock. We currently intend to retain our future earnings, if any, to support operations and to finance expansion and therefore we do not anticipate paying any cash dividends on our common stock in the foreseeable future.
The declaration, payment and amount of any future dividends will be made at the discretion of the board of directors, and will depend upon, among other things, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors as the board of directors considers relevant. There is no assurance that future dividends will be paid, and, if dividends are paid, there is no assurance with respect to the amount of any such dividend.
OUR CONTROLLING SECURITY HOLDER MAY TAKE ACTIONS THAT CONFLICT WITH YOUR INTERESTS.
Mr. Christopher Glover beneficially owns approximately 9% of our capital stock with voting rights. The directors elected by our controlling security holder will be able to significantly influence decisions affecting our capital structure. This control may have the effect of delaying or preventing changes in control or changes in management, or limiting the ability of our other security holders to approve transactions that they may deem to be in their best interest.
AS OUR SOLE DIRECTOR AND OFFICER AND OUR ASSETS ARE LOCATED IN ENGLAND, INVESTORS MAY BE LIMITED IN THEIR ABILITY TO ENFORCE CIVIL ACTIONS IN THE UNITED STATES AGAINST OUR DIRECTOR OR OUR ASSETS. YOU MAY NOT BE ABLE TO RECEIVE COMPENSATION FOR DAMAGES TO THE VALUE OF YOUR INVESTMENT CAUSED BY WRONGFUL ACTIONS BY OUR DIRECTOR OR OFFICERS.
Our assets are located in England and our director is a resident of England. Consequently, it may be difficult for United States investors to affect service of process within the United States on our director. A judgment of a US court predicated solely upon such civil liabilities may not be enforceable in England by a English court if the US court in which the judgment was obtained did not have jurisdiction, as determined by the English court, in the matter. There is substantial doubt whether an original action could be brought successfully in England against any of our future assets or our director predicated solely upon such civil liabilities. You may not be able to recover damages as compensation for a decline in your investment.
YOU MAY EXPERIENCE DILUTION OF YOUR OWNERSHIP INTEREST BECAUSE OF THE FUTURE ISSUANCE OF ADDITIONAL SHARES OF OUR COMMON STOCK AND OUR PREFERRED STOCK.
In the future, we may issue our authorized but previously unissued equity securities, resulting in the dilution of the ownership interests of our present stockholders. We are currently authorized to issue an aggregate of 600,000,000 shares of capital stock consisting of 500,000,000 shares of common stock, par value $0.0001 per share, and 100,000,000 shares of preferred stock, par value $0.0001 per share.
We may also issue additional shares of our common stock or other securities that are convertible into or exercisable for common stock in connection with hiring or retaining employees or consultants, future acquisitions, future sales of our securities for capital raising purposes, or for other business purposes. The future issuance of any such additional shares of our common stock or other securities may create downward pressure on the trading price of our common stock. There can be no assurance that we will not be required to issue additional shares, warrants or other convertible securities in the future in conjunction with hiring or retaining employees or consultants, future acquisitions, future sales of our securities for capital raising purposes or for other business purposes.
OUR COMMON STOCK IS CONSIDERED PENNY STOCKS, WHICH MAY BE SUBJECT TO RESTRICTIONS ON MARKETABILITY, SO YOU MAY NOT BE ABLE TO SELL YOUR SHARES.
If our common stock becomes tradable in the secondary market, we will be subject to the penny stock rules adopted by the SEC that require brokers to provide extensive disclosure to their customers prior to executing trades in penny stocks. These disclosure requirements may cause a reduction in the trading activity of our common stock, which in all likelihood would make it difficult for our shareholders to sell their securities.
Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system). Penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the 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 broker-dealer must also 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 requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject to the penny stock rules. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our securities, which could severely limit the market price and liquidity of our securities. These requirements may restrict the ability of broker-dealers to sell our common stock and may affect your ability to resell our common stock.
THERE IS NO ASSURANCE OF A PUBLIC MARKET OR THAT OUR COMMON STOCK WILL EVER TRADE ON A RECOGNIZED EXCHANGE. THEREFORE, YOU MAY BE UNABLE TO LIQUIDATE YOUR INVESTMENT IN OUR STOCK.
There is no established public trading market for our common stock. Our shares have not been listed or quoted on any exchange or quotation system. There can be no assurance that a market maker will agree to file the necessary documents with FINRA, which operates the OTCBB, nor can there be any assurance that such an application for quotation will be approved or that a regular trading market will develop or that if developed, will be sustained. In the absence of a trading market, an investor may be unable to liquidate their investment.
ITEM 2.
ITEM 2. PROPERTIES
The principal executive office of Flameret, Inc. is located at 1810 E. Sahara Ave, Suite 1429, Las Vegas, NV 89104. Our telephone number is: 877-861-0207.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
We did not submit any matters to a vote of our security holders during the fourth quarter of the fiscal year 2012.
PART II
ITEM 5.
ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
(a) Market Information
The Company's Common Stock is currently traded on the National Association of Security Dealers' over-the-counter bulletin board market (OTCBB) under the symbol FLRE.OB. The following table sets forth the high and low bid prices for each quarter within the last fiscal year, beginning with the commencement of our trading in June of 2010. The source of these quotations is the OTCBB Trade Activity Report. The quotations reflect inter-dealer prices, without retail mark-up, markdown or commission, and may not necessarily represent actual transactions.
(b) Holders of Common Stock
We are authorized to issue 500,000,000 shares of common stock, $0.0001 par value per share. Currently we have 222,528,012 shares of common stock issued and outstanding. As of August 31, 2012, there were approximately Fifty eight (58) shareholders of the Company’s common stock. As of August 31, 2012, the closing price of the Company’s shares of common stock was $0.0025 per share. Island Stock Transfer (telephone: (727) 289-0010; facsimile: (727) 289-0069) is the registrar and transfer agent for our common stock.
Each share of common stock shall have one (1) vote per share for all purposes. The holders of a majority of the shares entitled to vote, present in person or represented by proxy, shall constitute a quorum at all meetings of our shareholders. Our common stock does not provide a preemptive, subscription or conversion rights and there are no redemption or sinking fund provisions or rights. Our common stock holders are not entitled to cumulative voting for election of the board of directors.
Holders of common stock are entitled to receive ratably such dividends as may be declared by the board of directors out of funds legally available therefore as well as any distributions to the security holder. We have never paid cash dividends on our common stock, and do not expect to pay such dividends in the foreseeable future.
In the event of a liquidation, dissolution or winding up of our company, holders of common stock are entitled to share ratably in all of our assets remaining after payment of liabilities. Holders of common stock have no preemptive or other subscription or conversion rights. There are no redemption or sinking fund provisions applicable to the common stock.
(c) Dividends
Flameret has never declared or paid dividends on its Common Stock. Flameret intends to follow a policy of retaining earnings, if any, to finance the growth of the business and does not anticipate paying any cash dividends in the foreseeable future. The declaration and payment of future dividends on the Common Stock will be at sole discretion of the Board of Directors and will depend on Flameret's profitability and financial condition, capital requirements, statutory and contractual restrictions, future prospects and other factors deemed relevant.
(d) Securities Authorized for Issuance under Equity Compensation Plans
The Company has not established any compensation plans to which our securities are authorized for issuance to employees or non-employees (such as directors, consultants and advisors) in exchange for consideration in the form of services.
(e) Recent Sales of Unregistered Securities
Preferred Shares Issued
On November 10, 2010, the Company issued 10 shares of series A preferred stock for services at $1,000 per share, for an aggregate value of $10,000.
On December 23, 2010, the Company issued 100,000 shares of series D preferred stock for services at $2.50 per share, for an aggregate value of $250,000.
On January 25, 2011, the Company issued 400,000 shares of series B preferred stock for services at $0.01 per share, for an aggregate value of $5,739. Additionally, the Company issued 1,775,000 shares of series B preferred stock upon conversion of debts at $0.01 per share, for an aggregate value of $20,675.
On April 6, 2011, the Company issued 100,000 shares of series B preferred stock for services at $3.75 per share, for an aggregate value of $375,000.
On May 15, 2011 the Company issued 500,000 shares of series F preferred stock for cash at $0.009 per share, for an aggregate value of $4,286. Additionally, the Company issued 500 shares of common stock for cash at $1.42 per share, for an aggregate total of $717.
On July 19, 2011 the Company converted 276,585 shares of common stock, along with certain debts and series B and D preferred shares, into 1,803,032 shares of the Company’s series E preferred stock. The Company recognized a gain on conversion of $430,289 pursuant to this transaction.
On July 19, 2011 the Company issued 1,803,032 shares of series E preferred stock pursuant to the conversion of 276,585 shares of common stock, 100,000 shares of series B preferred stock, 100,000 shares of series D preferred stock, and certain debts to related parties totaling $1,026,447. The Company recorded a gain on conversion of debts in the amount of 430,239 pursuant to this transaction.
On August 2, 2011, the Company issued 45,000 shares of series E preferred stock for cash at $1.00 per share, yielding total cash proceeds of $45,000.
On August 3, 2011 the Company converted 788 shares of series E preferred stock into 788,000 shares of the Company’s common stock pursuant to the conversion terms of the preferred stock. Additionally, the Company issued 150,000 shares of series E preferred stock for services rendered. These shares were valued at $1.00 per share, for total compensation expense of $150,000.
On August 10, 2011 the Company issued 88,900 shares of series E preferred stock upon the conversion of debts payable to an unrelated entity. The fair value of the shares issued was $88,900, or $1.00 per share.
On August 30, 2011 the Company issued 20,000,000 shares of common stock upon conversion of 20,000 shares of series E preferred stock.
On September 6, 2011, the Company issued 2,000 shares of series B preferred stock for cash at $1.25 per share, for an aggregate value of $2,500.
On September 10, 2011 the Company converted 52,880 shares of series E preferred stock into 52,880,000 shares of common stock pursuant to the conversion terms of the preferred stock.
On September 14, 2011, the Company issued 4,000 shares of series B preferred stock for cash at $2.50 per share, for an aggregate value of $10,000.
On September 15, 2011 the Company converted 8,330 shares of series E preferred stock into 8,330,000 shares of common stock pursuant to the conversion terms of the preferred stock.
On September 27, 2011, the Company issued 4,000 shares of series B preferred stock for cash at $2.50 per share, for an aggregate value of $10,000.
On October 6, 2011 the Company converted 8,500 shares of series E preferred stock into 8,500,000 shares of common stock pursuant to the conversion terms of the preferred stock.
On October 13, 2011 the Company issued a net total of 36,000 shares of series E preferred stock for services at $1.00 per share, resulting in an aggregate value of $36,000. Also on October 13, 2011 the Company issued 1,500,000 shares of common stock for services at $0.025 per share, resulting an aggregate value of $37,500.
On October 24, 2011 the Company converted 7,800 shares of series E preferred stock into 7,800,000 shares of common stock pursuant to the conversion terms of the preferred stock.
On October 27, 2011 the Company converted 50,000 shares of series B preferred stock into 75,000 shares of common stock.
On October 31, 2011, the Company issued 29,000 shares of series E preferred stock for cash at $1.00 per share, for an aggregate value of $29,000.
On November 3, 2011 the Company converted 15,000 shares of series E preferred stock into 15,000,000 shares of common stock pursuant to the conversion terms of the preferred stock.
On November 4, 2011 the Company converted 63,000 shares of series E preferred stock into 63,000,000 shares of common stock pursuant to the conversion terms of the preferred stock.
On March 15, 2012 the Company converted 25,000 shares of series E preferred stock into 25,000,000 shares of common stock pursuant to the conversion terms of the preferred stock.
On April 15, 2012 the Company issued 5,000 shares of series E preferred stock for cash at $1.00 per share, resulting in total cash proceeds of $5,000.
On April 20, 2012 the Company converted 10,000 shares of series E preferred stock into 10,000,000 shares of series E preferred stock pursuant to the conversion terms of the preferred stock.
Common Shares Issued
On August 13, 2009, the Company issued 18,000 founder’s shares at a value of $-0-. Also on August 13, 2009, the Company received $2,500 in capital contributed from the Company’s founder and CEO.
On November 9, 2010, the Company issued 36,000 shares of common stock in partial settlement of debt on previously executed convertible notes payable. The shares of stock issued were recorded at $540,000, or $15 per share based on the quoted market price of the shares on the date of issuance, and the amount of debt that was forgiven was equal to $3,600. As such, the Company recorded a loss on settlement of debt in connection with the transaction of $536,400.
On November 30, 2010, the Company cancelled 405 shares of common stock erroneously issued as founders’ shares.
On December 23, 2010, the Company issued 100 shares of common stock for services at $40 per share, for total proceeds of $4,000.
On January 20, 2011, the Company issued 250,000 shares of common stock for services at $10 per share, for an aggregate total of $2,500,000.
On January 20, 2011, the Company issued 9,000 shares of common stock in partial settlement of debt on previously executed convertible notes payable. The shares of stock issued were recorded at $90,000, or $10 per share based on the quoted market price of the shares on the date of issuance, and the amount of debt that was forgiven was equal to $900. As such, the Company recorded a loss on settlement of debt in connection with the transaction of $89,100.
On January 25, 2011 the Company issued 1,595 shares of common stock for the conversion of $15,950 in debts. These shares were valued at approximately $10 per share, for an aggregate value of $15,153, resulting in a gain on settlement of debt in the amount of $797.
On January 27, 2011, the Company issued 35,500 shares of common for services at $25 per share, for an aggregate total of $887,500.
On January 28, 2011 the Company issued 3,000 shares of common stock in settlement of debt. The shares were valued at $25 per share, based on the quoted market price of the shares on the date of issuance, resulting in a total amount of $75,000.
On March 14, 2011 the Company issued 2,000 shares of common stock for services at $10 per share, for an aggregate total of $20,000.
On April 15, 2011, the Company issued 8,000 shares of common stock for services at $2.00 per share, for an aggregate total of $16,000.
On May 15, 2011, the Company issued 500 shares of common stock for cash at $1.42 per share, for an aggregate total of $714.
On May 15, 2011 the Company issued 500,000 shares of series F preferred stock for cash at $0.009 per share, for an aggregate value of $4,286. Additionally, the Company issued 500 shares of common stock for cash at $1.42 per share, for an aggregate total of $717.
On June 6, 2011 the Company issued 46,905 shares of common stock for services at $2.00 per share, for an aggregate total of $93,810. The Company also issued 15,000 shares of common stock in settlement of debts. These shares were valued at $30,000, or $2.00 per share based on the quoted market price of the shares on the date of issuance.
On June 30, 2011 the Company issued 1,500 shares of common stock for services at $1.20 per share, for an aggregate total of $1,800.
On July 19, 2011 the Company issued 1,803,032 shares of series E preferred stock pursuant to the conversion of 276,585 shares of common stock, 100,000 shares of series B preferred stock, 100,000 shares of series D preferred stock, and certain debts to related parties totaling $1,026,447. The Company recorded a gain on conversion of debts in the amount of 430,239 pursuant to this transaction.
On July 29, 2011 the Company elected to enact a 1:1,000 share reverse-split of its common stock. All references to common stock in these financial statements have been retroactively restated so as to assume the effect of this reverse stock-split.
On August 3, 2011 the Company issued 5,000 shares of common stock for services at $0.50 per share, for an aggregate value of $2,500.
On August 3, 2011 the Company converted 788 shares of series E preferred stock into 788,000 shares of the Company’s common stock pursuant to the conversion terms of the preferred stock. Additionally, the Company issued 150,000 shares of series E preferred stock for services rendered. These shares were valued at $1.00 per share, for total compensation expense of $150,000.
On August 30, 2011 the Company issued 20,000,000 shares of common stock upon conversion of 20,000 shares of series E preferred stock.
On September 10, 2011 the Company converted 52,880 shares of series E preferred stock into 52,880,000 shares of common stock pursuant to the conversion terms of the preferred stock.
On September 15, 2011 the Company converted 8,330 shares of series E preferred stock into 8,330,000 shares of common stock pursuant to the conversion terms of the preferred stock.
On October 6, 2011 the Company converted 8,500 shares of series E preferred stock into 8,500,000 shares of common stock pursuant to the conversion terms of the preferred stock.
On October 13, 2011 the Company issued a net total of 36,000 shares of series E preferred stock for services at $1.00 per share, resulting in an aggregate value of $36,000. Also on October 13, 2011 the Company issued 1,500,000 shares of common stock for services at $0.025 per share, resulting an aggregate value of $37,500.
On October 24, 2011 the Company converted 7,800 shares of series E preferred stock into 7,800,000 shares of common stock pursuant to the conversion terms of the preferred stock.
On October 27, 2011 the Company converted 50,000 shares of series B preferred stock into 75,000 shares of common stock.
On November 3, 2011 the Company converted 15,000 shares of series E preferred stock into 15,000,000 shares of common stock pursuant to the conversion terms of the preferred stock.
On November 4, 2011 the Company converted 63,000 shares of series E preferred stock into 63,000,000 shares of common stock pursuant to the conversion terms of the preferred stock.
On March 15, 2012 the Company converted 25,000 shares of series E preferred stock into 25,000,000 shares of common stock pursuant to the conversion terms of the preferred stock.
On April 23, 2012 the Company issued 1,250,000 shares of common stock for prepaid consulting services. The shares were valued $0.004 per share, being the trading price on the date of the issuance, resulting in an aggregate value of $5,000.
On April 25, 2012 the Company issued 7,000,000 shares of common stock at $0.0023 per share for a subscription receivable in the amount of $16,133. As of May 31, 2012, $8,500 of this amount had been received, leaving a total subscription receivable total of $7,633.
On July 18, 2012 the Company issued 1,125,000 shares of common stock for prepaid consulting services. The shares were valued $.0038 per share, being the trading price on the date of the issuance, resulting in an aggregate value of $4,750.
As of August 31, 2012 $1,807 of this amount had been amortized to consulting expense, leaving a balance of $2,943 in prepaid expenses relating to this issuance.
Options and Warrants Issued
No options or warrants were issued during the year ended August 31, 2012.
Options and Warrants Cancelled
No options or warrants were cancelled during the year ended August 31, 2012.
Options and Warrants Expired
No options or warrants expired during the year ended August 31, 2012.
Options Exercised
No options were exercised during the year ended August 31, 2012.
The foregoing securities were issued in reliance on Section 4(2) of the Securities Act of 1933, as amended.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
Not Required
ITEM 7.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW AND OUTLOOK
Flameret, Inc. (“Flameret”) is a Wyoming corporation that intends to manufacture and distribute a fire barrier product named, Flameret. Flameret is a liquid that is applied to textiles which are used at the production stage of products, such as mattresses, to resist ignition from smoldering cigarettes and impede ignition from open-flame heat sources. Production and distribution has not yet commenced, as such, the Company is considered to be in the development stage.
We had a net loss of $352,898 and $6,400,995 for the years ended August 31, 2012 and 2011, respectively. Our accumulated deficit as of August 31, 2012 was $7,261,505. These conditions raise substantial doubt about our ability to continue as a going concern over the next twelve months.
Results of Operations for the Years Ended August 31, 2012 and 2011
The following table summarizes selected items from the statement of operations for the years ended August 31, 2012 and 2011.
EXPENSES:
General and administrative expenses
General and administrative expenses for the year ended August 31, 2012 were $149,635 compared to $252,072 for the year ended August 31, 2011 a decrease of $102,437. This reflected the dormant nature of the company whilst awaiting new funding to commence trading.
Professional fees for the year ended August 31, 2012 were $190,494 compared to $4,891,171 for the year ended August 31, 2011, a decrease of $4,700,677.
During the year ended August 31, 2011 we purchased technology for $500,000 which we intend to use in our business operations. We have not been able to establish a revenue stream to justify the value of the technology so we have impaired the asset in full as of August 31, 2011.
Net operating loss
The net operating loss for the year ended August 31, 2012 was $340,129 compared to $5,643,243 for the year ended August 31, 2011, a decrease of $5,303,114. Our net operating loss consisted primarily of professional fees and stocks services expense as we created the entity in anticipation of developing our flame retardant products.
Other expenses
Other expenses for the years ended August 31, 2012 was $12,769 compared to $757,752 for the year ended August 31, 2011. The decrease in other expenses was a result of interest expenses accrued on notes payable and to losses relating to the conversions of debt and equity in the 2011 financial statements not repeated in 2012.
Net loss
The net loss for the year ended August 31, 2012 was $352,898 compared to $6,400,995 for the year ended August 31, 2011, a decrease of $6,048,097. Our net loss consisted primarily of professional fees and stocks services expense as we created the entity in anticipation of developing our flame retardant product.
Liquidity and Capital Resources
The following table summarizes total current assets, liabilities and working capital at August 31, 2012 and 2011.
While we have raised capital to meet our working capital and financing needs in the past, additional financing is required in order to meet our current and projected cash flow deficits from operations and development of alternative revenue sources. As of August 31, 2012, we had a working capital deficit of $858,234. Our poor financial condition raises substantial doubt about our ability to continue as a going concern and we have incurred losses since inception and may incur future losses. In the past, we have raised money through contributions from related parties and through issuing notes. During the year ended August 31, 2012, related parties paid $22,487 in expenses on behalf of the Company, notes totaling $34,150 were issued for cash, and the Company received $65,000 in cash from the sale of common and preferred stock. Should we not be able to continue to secure additional financing when needed, we may be required to slow down or suspend our growth or reduce the scope of our current operations, any of which would have a material adverse effect on our business. Our future capital requirements will depend on many factors, including the development of our flame retardant products; the cost and availability of third-party financing for development; and administrative and legal expenses.
We anticipate that we will incur operating losses in the next twelve months. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development. Such risks for us include, but are not limited to, an evolving and unpredictable business model; recognition of revenue sources; and the management of growth. To address these risks, we must, among other things, expand our customer base, implement and successfully execute our business and marketing strategy, respond to competitive developments, and attract, retain and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so could have a material adverse effect on our business prospects, financial condition and results of operations.
Satisfaction of our cash obligations for the next 12 months.
As of August 31, 2012, our cash balance was $183. Our plan for satisfying our cash requirements for the next twelve months is through sales-generated income, sale of shares of our common stock, third party financing, and/or traditional bank financing. We anticipate sales-generated income during that same period of time, but do not anticipate generating sufficient amounts of revenues to meet our working capital requirements. Consequently, we intend to make appropriate plans to secure sources of additional capital in the future to fund growth and expansion through additional equity or debt financing or credit facilities.
Going concern.
Our financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. We have incurred continuous losses from operations, have an accumulated deficit of $7,261,505 and a working capital deficit of $858,234 at August 31, 2012, and have reported negative cash flows from operations since inception. In addition, we do not currently have the cash resources to meet our operating commitments for the next twelve months. The Company’s ability to continue as a going concern must be considered in light of the problems, expenses, and complications frequently encountered by entrance into established markets and the competitive nature in which we operate.
Our ability to continue as a going concern is dependent on our ability to generate sufficient cash from operations to meet our cash needs and/or to raise funds to finance ongoing operations and repay debt. There can be no assurance, however, that we will be successful in our efforts to raise additional debt or equity capital and/or that our cash generated by our future operations will be adequate to meet our needs. These factors, among others, indicate that we may be unable to continue as a going concern for a reasonable period of time.
Summary of product and research and development that we will perform for the term of our plan.
We are not anticipating significant research and development expenditures in the near future.
Expected purchase or sale of plant and significant equipment.
We do not anticipate the purchase or sale of any plant or significant equipment as such items are not required by us at this time.
Significant changes in the number of employees.
As of August 31, 2012, we had four employees, our non-paid CEO, Christopher Glover, Secretary Susan Allwork, CFO John Meredith, and VP Marketing John Glover. Currently, there are no organized labor agreements or union agreements and we do not anticipate any in the future.
Assuming we are able to pursue revenue through the commencement of sales of our flame retardant products, we anticipate an increase of personnel and may need to hire employees. In the interim, we intend to use the services of independent consultants and contractors to perform various professional services when appropriate. We believe the use of third-party service providers may enhance our ability to control general and administrative expenses and operate efficiently.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Recently Issued Accounting Standards
The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company’s financial position, or statements.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
This item in not applicable as we are currently considered a smaller reporting company.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Flameret, Inc.
We have audited the accompanying balance sheets of Flameret, Inc., (“the Company”) as of August 31, 2012 and 2011, and the related statements of operations, stockholders’ deficit and cash flows for the years then ended and for the cumulative period from August 13, 2009 (date of inception) through August 31, 2012. 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 the 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. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion the financial statements referred to above present fairly, in all material respects, the financial position of Flameret, Inc., as of August 31, 2012 and 2011, and the results of their operations and their cash flows for the years then ended and for the cumulative period from August 13, 2009 (date of inception) through August 31, 2012, in conformity with U.S. generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has not established an ongoing source of revenues sufficient enough to cover its operating costs. These matters raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.
/s/ Sadler, Gibb & Associates, LLC
Salt Lake City, UT
February 6, 2013
FLAMERET, INC.
(A Development Stage Company)
Notes to Financial Statements
August 31, 2012 and 2011
NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Flameret, Inc. (“the Company”) was incorporated in the state of Nevada on August 13, 2009 (“Inception”). The Company was formed to market a range of liquid fire retardants and treatments, initially in the textile industries. The company will market an innovative range of fire barriers for the mattress industry, and for industrial apparel. Our products will aim to revolutionize the mattress and furniture materials usage industry by creating a non-toxic product which does not change the feel or texture of the end product. Our products will also meet the legislation standards that have been passed and are set to go into effect in the near future, thus making these textile products easier to handle, cost effective and comfortable, as well as being non-toxic, environmentally friendly, and safe for the end user.
Basis of Presentation
The accompanying financial statements and related notes include the activity of the Company and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) to Form 10-K.
Development Stage Company Classification
The Company is considered to be in the development stage as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915. This standard requires companies to report their operations, shareholders equity and cash flows from inception through the reporting date. The Company will continue to be reported as a development stage entity until, among other factors, revenues are generated from management’s intended operations. Management has provided financial data since inception (August 13, 2009).
Accounting Method
The Company’s financial statements are prepared using the accrual method of accounting. The Company has elected an August 31 year-end.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
We maintain cash balances in non-interest-bearing accounts, which do not currently exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents.
Impairment of Long-Lived Assets
The Company follows the provisions of ASC 360 for its long-lived assets. The Company’s long-lived assets, which include test equipment and purchased intellectual property rights, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. During the years ended August 31, 2012 and 2011 the Company recognized impairment expense of $-0- and $500,000 , respectively.
Income Taxes
The Company accounts for income taxes in accordance with accounting guidance now codified as FASB ASC 740, "Income Taxes," which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when it is more likely than not that some or all deferred tax assets will not be realized.
NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income Taxes (Continued)
The Company applies the provisions of ASC 740, “Accounting for Uncertainty in Income Taxes”. The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements. The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company did not identify any material uncertain tax positions on returns that have been filed or that will be filed. The Company did not recognize any interest or penalties for unrecognized tax benefits during the years ended August 31, 2012 and 2011, nor were any interest or penalties accrued as of August 31, 2012 and 2011.
Revenue Recognition
Revenues from fixed price contracts and cost-plus-fee contracts are recognized as services are performed. Revenue is recognized at the time of sale if collection is reasonably assured. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.
Basic and Diluted Loss per Share
The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted earnings per common share is computed by dividing income (loss) attributable to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding convertible preferred stock. Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis, by the weighted average number of common shares outstanding plus potential dilutive securities.
For the year ended August 31, 2012 and 2011, the Company had the following common stock equivalents outstanding that were not included in the computation of diluted net loss per common share as their effect would have been anti-dilutive, thereby decreasing the net loss per common share:
Stock-Based Compensation
The Company adopted ASC 718, “Stock Compensation”, upon inception at August 13, 2009. Under ASC 718, all share-based payments to employees, including grants of employee stock options, are to be recognized in the income statement based on their fair values.
Fair Value of Financial Instruments
The Company adopted ASC 820 which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under this standard certain assets and liabilities must be measured at fair value, and disclosures are required for items measured at fair value.
The Company currently does not have non-financial assets or non-financial liabilities that are required to be measured at fair value on a recurring basis. The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:
Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. The fair value of the Company’s cash is based on quoted prices and therefore classified as Level 1.
Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).
Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.
Recently Issued Accounting Pronouncements
Management has considered all recent accounting pronouncements issued since the last audit of our consolidated financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s consolidated financial statements.
NOTE 2 - GOING CONCERN
The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
Management’s plan to support the Company in its operations and to maintain its business strategy is to raise funds through public offerings and to rely on officers and directors to perform essential functions with minimal compensation. If the Company does not raise all of the money it needs from public offerings, it will have to find alternative sources, such as a second public offering, a private placement of securities, or loans from its officers, directors or others. If the Company requires additional cash and is unable to raise it, it will either have to suspend operations until the cash is raised, or cease business entirely.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 3 - RELATED-PARTY TRANSACTIONS
Fiscal year end August 31, 2012
During the year ended August 31, 2012 the Company received $25,533 in additional cash loans from various related parties, and had $22,487 in expenses paid on its behalf by related parties. The Company made cash payments on these notes totaling $71,802 during the year ended August 31, 2012.
Total related party notes payable as of August 31, 2012 were $147,935. Of this total, $39,914 is unsecured, bears interest at 12 percent per annum, and is due on demand, $480 is unsecured, bears interest at 8 percent and is due on demand, and the remaining $107,540 is unsecured, bears no interest, and is due on demand.
The Company has accrued interest payable of $59,141 on the related-party notes payable as of August 31, 2012.
As of August 31, 2012, the Company owes accrued salaries to officers and employees of $290,001.
Fiscal year end August 31, 2011
During the year ended August 31, 2011, the Company received $34,240 in additional cash loans from various related parties, and had $428,123 in expenses paid on its behalf by related parties. The Company made cash payments on these notes totaling $40,500 during the year ended August 31, 2011. The Company also incurred new loans to related parties in the amount of $560,000 in exchange for intangible assets and professional services.
During the year ended August 31, 2011, the Company issued 48,000 shares of common stock in settlement of $34,550 of related party notes payable. The fair value of the common stock issued was $555,000 resulting in a loss on settlement of related party debt of $515,450.
On July 19, 2011, certain of these related-party note holders agreed to convert either all or a portion of their respective notes into shares of the Company’s Series E preferred stock. A total of $1,026,447 in related-party notes payable were converted, along with 276,585 shares of the Company’s common stock, 100,000 shares of series B preferred stock, and 100,000 shares of series D preferred stock, into 1,803,032 shares of the Company’s Series E preferred stock.
Total related party notes payable as of August 31, 2011 were $151,717. Of this total, $46,152 of related party notes payable are unsecured, bear interest at 8 percent per annum, and is due on demand. The remaining $105,565 of related party notes payable is unsecured, bears no interest, and is due on demand.
The Company has accrued interest payable of $61,022 on the related-party notes payable as of August 31, 2012. As of August 31, 2011, the Company owes accrued salaries to officers and employees of $190,000. Related party notes payable as of August 31, 2012 and 2011, consist of the following:
NOTE 4 - NOTES PAYABLE
Fiscal year end August 31, 2012
During the year ended August 31, 2012, the Company borrowed $34,150 from an unrelated third-party. The note accrues interest at a rate of 12 percent per annum, and is due on demand. The Company has accrued interest payable of $28,015 on the notes payable as of August 31, 2012.
Fiscal year end August 31, 2011
During the year ended August 31, 2011, the Company borrowed an additional $142,600 from various third parties in exchange for services rendered to the Company. During the year ended August 31, 2011, $124,100 was converted into a combination of 1,595 shares of the Company’s common stock, 1,775,000 shares of the Company’s series B preferred stock, and 88,900 shares of the Company’s series E preferred stock. Of the remaining notes, $20,000 bears interest at 12 percent per annum and $148,500 at six percent per annum. All of the notes payable to unrelated parties are unsecured and are due on demand. The Company has accrued interest payable of $19,620 on the notes payable as of August 31, 2011.
Notes payable as of August 31, 2012 and 2011, consist of the following:
NOTE 5 - STOCKHOLDERS’ EQUITY
As of August 31, 2012, the Company is authorized to issue one hundred million (100,000,000) shares of $0.0001 par value preferred stock comprised of the following share denominations: one million (1,000,000) shares of series A preferred stock, ten million (10,000,000) shares of series B preferred stock, ten million (10,000,000) series C preferred stock, thirty million (30,000,000) shares of series D preferred stock, thirty million (30,000,000) shares of series E preferred stock, and ten million (10,000,000) shares of series F preferred stock.
On August 13, 2009, the Company issued 18,000 founder’s shares at a value of $-0-. Also on August 13, 2009, the Company received $2,500 in capital contributed from the Company’s founder and CEO.
On November 9, 2010, the Company issued 36,000 shares of common stock in partial settlement of debt on previously executed convertible notes payable. The shares of stock issued were recorded at $540,000, or $15 per share based on the quoted market price of the shares on the date of issuance, and the amount of debt that was forgiven was equal to $3,600. As such, the Company recorded a loss on settlement of debt in connection with the transaction of $536,400.
On November 10, 2010, the Company issued 10 shares of series A preferred stock for services at $1,000 per share, for an aggregate value of $10,000.
On November 30, 2010, the Company cancelled 405 shares of common stock erroneously issued as founders’ shares.
On December 23, 2010, the Company issued 100 shares of common stock for services at $40 per share, for total proceeds of $4,000.
On December 23, 2010, the Company issued 100,000 shares of series D preferred stock for services at $2.50 per share, for an aggregate value of $250,000.
On January 20, 2011, the Company issued 250,000 shares of common stock for services at $10 per share, for an aggregate total of $2,500,000.
On January 20, 2011, the Company issued 9,000 shares of common stock in partial settlement of debt on previously executed convertible notes payable. The shares of stock issued were recorded at $90,000, or $10 per share based on the quoted market price of the shares on the date of issuance, and the amount of debt that was forgiven was equal to $900. As such, the Company recorded a loss on settlement of debt in connection with the transaction of $89,100.
On January 25, 2011 the Company issued 1,595 shares of common stock for the conversion of $15,950 in debts. These shares were valued at approximately $10 per share, for an aggregate value of $15,153, resulting in a gain on settlement of debt in the amount of $797.
On January 25, 2011, the Company issued 400,000 shares of series B preferred stock for services at $0.01 per share, for an aggregate value of $5,739. Additionally, the Company issued 1,775,000 shares of series B preferred stock upon conversion of debts at $0.01 per share, for an aggregate value of $20,675.
On January 27, 2011, the Company issued 35,500 shares of common stock for services at $25 per share, for an aggregate total of $887,500.
NOTE 5 - STOCKHOLDERS’ EQUITY - Continued
On January 28, 2011 the Company issued 3,000 shares of common stock in settlement of debt. The shares were valued at $25 per share, based on the quoted market price of the shares on the date of issuance, resulting in a total amount of $75,000.
On March 14, 2011 the Company issued 2,000 shares of common stock for services at $10 per share, for an aggregate total of $20,000.
On April 6, 2011, the Company issued 100,000 shares of series B preferred stock for services at $3.75 per share, for an aggregate value of $375,000.
On April 15, 2011, the Company issued 8,000 shares of common stock for services at $2.00 per share, for an aggregate total of $16,000.
On May 15, 2011, the Company issued 500 shares of common stock for cash at $1.42 per share, for an aggregate total of $714.
On May 15, 2011 the Company issued 500,000 shares of series F preferred stock for cash at $0.009 per share, for an aggregate value of $4,286. Additionally, the Company issued 500 shares of common stock for cash at $1.42 per share, for an aggregate total of $717.
On June 6, 2011 the Company issued 46,905 shares of common stock for services at $2.00 per share, for an aggregate total of $93,810. The Company also issued 15,000 shares of common stock in settlement of debts. These shares were valued at $30,000, or $2.00 per share based on the quoted market price of the shares on the date of issuance.
On June 30, 2011 the Company issued 1,500 shares of common stock for services at $1.20 per share, for an aggregate total of $1,800.
On July 19, 2011 the Company issued 1,803,032 shares of series E preferred stock pursuant to the conversion of 276,585 shares of common stock, 100,000 shares of series B preferred stock, 100,000 shares of series D preferred stock, and certain debts to related parties totaling $1,026,447. The Company recorded a gain on conversion of debts in the amount of 430,239 pursuant to this transaction.
On July 29, 2011 the Company elected to enact a 1:1,000 share reverse-split of its common stock. All references to common stock in these financial statements have been retroactively restated so as to assume the effect of this reverse stock-split.
On August 2, 2011, the Company issued 45,000 shares of series E preferred stock for cash at $1.00 per share, yielding total cash proceeds of $45,000.
On August 3, 2011 the Company issued 5,000 shares of common stock for services at $0.50 per share, for an aggregate value of $2,500.
On August 3, 2011 the Company converted 788 shares of series E preferred stock into 788,000 shares of the Company’s common stock pursuant to the conversion terms of the preferred stock. Additionally, the Company issued 150,000 shares of series E preferred stock for services rendered. These shares were valued at $1.00 per share, for total compensation expense of $150,000.
On August 10, 2011 the Company issued 88,900 shares of series E preferred stock upon the conversion of debts payable to an unrelated entity. The fair value of the shares issued was $88,900, or $1.00 per share.
On August 30, 2011 the Company issued 20,000,000 shares of common stock upon conversion of 20,000 shares of series E preferred stock.
On September 6, 2011, the Company issued 2,000 shares of series B preferred stock for cash at $1.25 per share, for an aggregate value of $2,500.
On September 10, 2011 the Company converted 52,880 shares of series E preferred stock into 52,880,000 shares of common stock pursuant to the conversion terms of the preferred stock.
On September 14, 2011, the Company issued 4,000 shares of series B preferred stock for cash at $2.50 per share, for an aggregate value of $10,000.
On September 15, 2011 the Company converted 8,330 shares of series E preferred stock into 8,330,000 shares of common stock pursuant to the conversion terms of the preferred stock.
On September 27, 2011, the Company issued 4,000 shares of series B preferred stock for cash at $2.50 per share, for an aggregate value of $10,000.
On October 6, 2011 the Company converted 8,500 shares of series E preferred stock into 8,500,000 shares of common stock pursuant to the conversion terms of the preferred stock.
On October 13, 2011 the Company issued a net total of 36,000 shares of series E preferred stock for services at $1.00 per share, resulting in an aggregate value of $36,000. Also on October 13, 2011 the Company issued 1,500,000 shares of common stock for services at $0.025 per share, resulting an aggregate value of $37,500.
On October 24, 2011 the Company converted 7,800 shares of series E preferred stock into 7,800,000 shares of common stock pursuant to the conversion terms of the preferred stock.
On October 27, 2011 the Company converted 50,000 shares of series B preferred stock into 75,000 shares of common stock.
On October 31, 2011, the Company issued 29,000 shares of series E preferred stock for cash at $1.00 per share, for an aggregate value of $29,000.
NOTE 5 - STOCKHOLDERS’ EQUITY - Continued
On November 3, 2011 the Company converted 15,000 shares of series E preferred stock into 15,000,000 shares of common stock pursuant to the conversion terms of the preferred stock.
On November 4, 2011 the Company converted 63,000 shares of series E preferred stock into 63,000,000 shares of common stock pursuant to the conversion terms of the preferred stock.
On March 15, 2012 the Company converted 25,000 shares of series E preferred stock into 25,000,000 shares of common stock pursuant to the conversion terms of the preferred stock.
On April 15, 2012 the Company issued 5,000 shares of series E preferred stock for cash at $1.00 per share, resulting in total cash proceeds of $5,000.
On April 20, 2012 the Company converted 10,000 shares of series E preferred stock into 10,000,000 shares of series E preferred stock pursuant to the conversion terms of the preferred stock.
On April 23, 2012 the Company issued 1,250,000 shares of common stock for prepaid consulting services. The shares were valued $0.004 per share, being the trading price on the date of the issuance, resulting in an aggregate value of $5,000.
On April 25, 2012 the Company issued 7,000,000 shares of common stock at $0.0023 per share for a subscription receivable in the amount of $16,133. As of May 31, 2012, $8,500 of this amount had been received, leaving a total subscription receivable total of $7,633.
On July 18, 2012 the Company issued 1,125,000 shares of common stock for prepaid consulting services. The shares were valued $0.0038 per share, being the trading price on the date of the issuance, resulting in an aggregate value of $4,750.
Asl of August 31, 2012 $1,807 of this amount had been amortized to consulting expense, leaving a balance of $2,943 in prepaid expenses relating to this issuance.
NOTE 6 - INCOME TAXES
The Company follows ASC 740, under which deferred income taxes reflect the net effect of (a) temporary difference between carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax reporting purposes, and (b) net operating loss carry-forwards. No net provision for refundable Federal income tax has been made in the accompanying statement of loss because no recoverable taxes were paid previously. Similarly, no deferred tax asset attributable to the net operating loss carry-forward has been recognized, as it is not deemed likely to be realized.
The cumulative tax effect at the expected rate of 34 percent of significant items comprising our net deferred tax amount is as follows:
The cumulative tax effect at the expected rate of 34 percent of significant items comprising our net deferred tax amount is as follows:
The Company’s zero percent effective tax rate for each year, as compared to the 34 percent statutory rate, results from non-deductible stock based compensation and the change in valuation allowance.
At August 31, 2011, the Company had an unused net operating loss carry-forward of approximately $2,468,912 that is available to offset future taxable income; the loss carry-forward will begin to expire in 2030.
NOTE 7 - SUBSEQUENT EVENTS
In accordance with ASC 855, management evaluated subsequent events through the date these financial statements were issued and the Company had no additional material subsequent events to report.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
(a) On April 15, 2011 Board of Directors of the Company dismissed M&K CPAs PLLC as its registered independent public accounting firm. On the same date the accounting firm of Sadler, Gibb & Associates, LLC was engaged as the Company’s new independent registered public accounting firm. The Board of Directors of the Company approved of the dismissal of M&K CPAs PLLC and the appointment of Sadler, Gibb & Associates, LLC as its independent auditor.
From the date of their appointment in August of 2009 through the date of dismissal on April 15, 2011, there were no disagreements with M&K CPAs PLLC whether or not resolved, on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreement(s), if not resolved to M&K CPAs PLLC’s satisfaction, would have caused it to make reference to the subject matter of the disagreement in connection with its report on the Company's financial statements. The audit report relating to the audit of Flameret, Inc.’s financial statements for the year ended August 31, 2010 and filed on December 14, 2010 indicated the auditors’ substantial doubt about the Company’s ability to continue as a going concern because, at those times, the Company had insufficient working capital.
(b) On April 15, 2011 the Company engaged Sadler, Gibb & Associates, LLC as its independent accountant. During the two most recent fiscal years and the interim periods preceding the engagement, the registrant has not consulted Sadler, Gibb & Associates, LLC regarding any of the matters set forth in Item 304(a)(2)(i) or (ii) of Regulation S-K.
The Registrant has provided M&K with a copy of this Current Report on Form 8-K before it was filed and requested that M&K furnish it with a letter addressed to the Securities and Exchange Commission stating whether it agrees with the above statements. A copy of M&K’s letter dated April 19, 2011 is filed as Exhibit 16 to this Current Report on Form 8-K.
ITEM 9A(T).
ITEM 9A(T). CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures.
We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer, of the effectiveness of our disclosure controls and procedures (as defined) in Exchange Act Rules 13a - 15(c) and 15d - 15(e)). Based upon that evaluation, our principal executive officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer, as appropriate to allow timely decisions regarding required disclosure.
Our Principal Executive Officer does not expect that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and our principal executive officer has determined that our disclosure controls and procedures are effective at doing so, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the 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 simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Furthermore, smaller reporting companies face additional limitations. Smaller reporting companies employ fewer individuals and find it difficult to properly segregate duties. Often, one or two individuals control every aspect of the Company's operation and are in a position to override any system of internal control. Additionally, smaller reporting companies tend to utilize general accounting software packages that lack a rigorous set of software controls.
ITEM 9B.
ITEM 9B. OTHER INFORMATION
None
PART III
ITEM 10.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The following table sets forth the names and positions of our executive officers and directors. Directors will be elected at our annual meeting of stockholders and serve for one year or until their successors are elected and qualify. Officers are elected by the Board and their terms of office are, except to the extent governed by employment contract, at the discretion of the Board.
MANAGEMENT BIOGRAPHIES
Christopher Glover; B.Sc., Chief Executive Officer, President, Chief Financial Officer, Secretary
Mr. Christopher Glover, age 66
Mr. Glover is the Chief Executive Officer, President, Secretary, Chief Financial Officer and Director (Principal Executive Officer) and (Principal Financial Officer) of the Company. He was appointed in August 2009 and is reasonable for overseeing all aspects of the company. Mr. Glover resides in England. From August 2009 to Present Mr. Glover has acted as Chief Executive Officer, President, Secretary, and Director (Principal Executive Officer) of the Company. Mr. Glover specializes in the development of emerging companies and their technologies and operations and required financing, which include the following:
From 1995, to August 2009, Mr. Glover has acted as Chief Executive Officer for Auto Data Network (AND). Auto Data Network is a software and services supplier to the Automotive Sector. The company provides integrated solutions for automotive retailers.
From 2004 through June of 2009 Mr. Glover worked as an outside consultant with United American, Inc. Mr. Glover provided United American, Inc. with suppliers who could blend and manufacture UAI’s fire barrier products. Mr. Glover has not and does not own any interest in United American, Inc.
Additionally from 1991 to 1995 Mr. Glover was the Sales Director of COS Limited. COS is a marketing and production services company supplying mainly to the Publishing, Training and Motor Industries with such facilities as Design, Media Duplication (Video, Audio, Disk), Print, Packaging, Marketing and Distribution. From 1989 to 1991 Mr. Glover was the Managing Director of County Contract Hire Limited a specialized contract hiring company.
John Meredith, CFO
John Meredith, Age 60
A senior corporate finance professional with over 40 years of experience in the service industry sector. Proven man-management skills with an ability to focus on longer-term objectives without losing sight of detail and accuracy. Skill-set includes adding insight into analytical, design and problem-solving scenarios with a strong hands-on bias. Dedicated to maintaining high quality standards.
University-educated with a business degree together with internationally recognized accounting qualifications (Institute of Financial Accountants). Most recent positions have been in operational management roles in PFI funding, on-line ticketing, property development/management and financial controls/reporting within the service and retail sectors. Spent six years as CFO to a multi-national software development group in the after-sales motor industry with responsibility for UK and US reporting.
John William Glover, Vice President of Sales
John William Glover BA, Age 30
PERSONAL PROFILE, Account and marketing professional, specializing in online, Worked in Digital Client Service roles for 4 years
KEY SKILLS/KNOWLEDGE, Marketing Skills - Online search marketing with experience in PPC, CPA and CPC, marketing strategy planning, brand management, SEO and affiliate management and development, Multivariate testing. Online marketing development and campaign development. Exhibition planning and management. Competitor analysis and customer sign-up and retention strategies.
Planning and Organization, Prioritizing own work flow to meet deadlines, and organisation of marketing schedules. Leading major projects and people as project leader and ensuring the business goals are achieved within timescale and budget.
IT Skills, An excellent understanding of Microsoft Word, Excel, PowerPoint and the Internet (IE, Chrome and FireFox), some knowledge of Access. Reasonable knowledge of Apple Macs.
QUALIFICATIONS, BA (Hons) Degree, Business Studies, Leeds Metropolitan University, Sept. 2002 - June 2005, Dissertation was in online music distribution, A-levels: Economics, Design & Technology, Physical Education and AS Biology, 10 GCSEs Grades A - C, including Maths and English, Cranbrook School, Cranbrook, Kent, Jan. 1996 - June 2002, John Hanson School, Andover, Hampshire, Sept,
Have extensive and up-to-date knowledge and experience in:
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Digital areas including PPC< SEO, Display, analytics and affiliate, Action all client contact report issues and feedback to Senior Account Manager, Ensure all issues are addressed and managed and that clients and Account Director is continually updated and informed
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Checking and reviewing campaign performance, Communicating client information to team, Regularly reviewing competitor activity and industry trends, Maintain up to date knowledge of search engines product and service offerings, Update and maintain CRM system records
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Compile end of month progress reports for the each campaign, Construct activity planners, Write production briefs on each campaign, Complete quote requests/forecasts for campaigns
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Producing proposals showing clear account development options for clients, Increasing GP from clients including doubling profit from key clients, Advocating cross channel activity, Dedicating tasks to account executives and production, Fire Marshall and First Aider including suzuki4.co.uk, Managing the creation of national online advertising, Trafficking online advertising using DART, In depth monthly and weekly reporting ad analysis on a number of sites, Ensuring jobs are completed on time and to budget
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Conducting competitor analysis, Managing the creation of sites and micro-sites, Writing creative briefs, Creating estimates and time-plans, Managed a number of successful email marketing campaigns, Involved with Suzuki at the London Motor Show
INTERESTS, Sport: MMA, football, basketball and taking part in triathlons, Music: Avid collector with a very eclectic taste and also play guitar, Events: Events organiser at university, Languages: Currently studying Russian, Other: Socialising, Classic, international and contemporary films, video games and classic Russian literatureequest.
Limitation of Liability of Directors
Pursuant to the Wyoming General Corporation Law, our Articles of Incorporation exclude personal liability for our Directors for monetary damages based upon any violation of their fiduciary duties as Directors, except as to liability for any breach of the duty of loyalty, acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, or any transaction from which a Director receives an improper personal benefit. This exclusion of liability does not limit any right which a Director may have to be indemnified and does not affect any Director's liability under federal or applicable state securities laws. We have agreed to indemnify our directors against expenses, judgments, and amounts paid in settlement in connection with any claim against a Director if he acted in good faith and in a manner he believed to be in our best interests.
Election of Directors and Officers
Directors are elected to serve until the next annual meeting of stockholders and until their successors have been elected and qualified. Officers are appointed to serve until the meeting of the Board of Directors following the next annual meeting of stockholders and until their successors have been elected and qualified. No Executive Officer or Director of the Corporation has been the subject of any Order, Judgment, or Decree of any Court of competent jurisdiction, or any regulatory agency permanently or temporarily enjoining, barring, suspending or otherwise limiting him from acting as an investment advisor, underwriter, broker or dealer in the securities industry. Or as an affiliated person, director or employee of an investment company, bank, savings and loan association. Also an insurance company or from engaging in or continuing any conduct or practice in connection with any such activity or in connection with the purchase or sale of any securities. No Executive Officer or Director of the Corporation has been convicted in any criminal proceeding (excluding traffic violations) or is the subject of a criminal proceeding, which is currently pending. No Executive Officer or Director of the Corporation is the subject of any pending legal proceedings.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires our executive officers and directors, and persons who beneficially own more than ten percent of our common stock, to file initial reports of ownership and reports of changes in ownership with the SEC. Executive officers, directors and greater than ten percent beneficial owners are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. To our knowledge, we believe that during 2009 our Directors and executive officers did not comply with all Section 16(a) filing requirements. Specifically, Mr. Christopher Glover failed to file Form 3s with respect to the issuance of common shares for the year ended August 31, 2009, and Form 4s for the year ended August 31, 2010.
Audit Committee
We do not have an Audit Committee, our board of directors acted as the Company's Audit Committee during fiscal 2011, recommending a firm of independent certified public accountants to audit the annual financial statements; reviewing the independent auditors' independence, the financial statements and their audit report; and reviewing management's administration of the system of internal accounting controls. The Company does not currently have a written audit committee charter or similar document.
Our board of directors has determined that if we were required to have a financial expert and/or an audit committee, Christopher Glover, our CEO, would be considered an “audit committee financial expert,” as defined by applicable Commission rules and regulations. Based on the definition of “independent” applicable to audit committee members of Nasdaq-traded companies, our board of directors has further determined that Mr. Glover is not considered to be “independent.”
Code of Ethics
A code of ethics relates to written standards that are reasonably designed to deter wrongdoing and to promote:
·
Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
·
Full, fair, accurate, timely and understandable disclosure in reports and documents that are filed with, or submitted to, the Commission and in other public communications made by an issuer;
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Compliance with applicable governmental laws, rules and regulations;
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The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and
·
Accountability for adherence to the code.
On August 13, 2009, the Company adopted a Code of Ethics that applies to the Company's principal executive officer, principal financial officer and principal accounting officer. Anyone can obtain a copy of the Code of Ethics by contacting the Company at the following address: at 3280 Sunrise Highway Suite 51 Wantagh, NY 11793, attention: Chief Executive Officer, telephone: (516) 816-2563. The first such copy will be provided without charge. The Company will post any amendments to the Code of Ethics, as well as any waivers that are required to be disclosed by the rules of either the Securities and Exchange Commission or the National Association of Dealers.
Nominating Committee
We do not have a Nominating Committee or Nominating Committee Charter. Our board of directors performed some of the functions associated with a Nominating Committee. We have elected not to have a Nominating Committee in that we are continuously updating our operations and have limited resources with which to establish additional committees of our board of directors.
Compensation Committee
At this time, Mr. Glover is the only member of the committee and has not needed to perform in this role due to the lack of establishing any compensation. The board of directors intends to add additional members to the compensation committee and expects it to consist solely of independent members. Until more members are appointed to the compensation committee, our entire board of directors will review all forms of compensation provided to any new executive officers, directors, consultants and employees, including stock compensation and options.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth certain information relating to all compensation of our named executive officers for services rendered in all capacities to the Company during the years ended August 31, 2011 and 2010:
Summary Compensation Table
(1) The amounts in columns (e) and (f) reflect the dollar amount recognized for financial statement reporting purposes for the years ended August 31, 2012 and 2011, in accordance with FASB ASC 718-10-30-2 of awards of stock and stock options and thus include amounts from awards granted in and prior to 2010. Assumptions used in the calculation of this amount are included in Note 3 of our audited financial statements for the fiscal year ended August 31, 2012 included in Part II, Item 7, Financial Statements and Supplementary Data of this Annual Report on Form 10-K.
(2) On August 13, 2009 the Company sold 18,000 founder’s shares of restricted common stock. These shares were recorded as founders’ shares and, as such, are not considered compensation.
Employment Agreements
We have not entered into any employment agreements. Our CEO, Christopher Glover has worked without compensation and has no agreement to defer any compensation.
Outstanding Equity Awards at Fiscal Year End
We have no outstanding equity awards, including common stock options.
Director Compensation
The table below summarizes the compensation that we paid to non-employee directors for the year ended August 31, 2012.
The amounts in columns (c) and (d) reflect the dollar amount recognized for financial statement reporting purposes for the year ended August 31, 2012, in accordance with FASB ASC 718-10-30-2 of awards of stock and stock options and thus include amounts from awards granted in and prior to 2010. Assumptions used in the calculation of this amount are included in Note 3 of our audited financial statements for the year ended August 31, 2011 included in Part II, Item 8, Financial Statements and Supplementary Data of this Annual Report on Form 10-K.
(1) On August 13, 2009 the Company sold 18,000 founder’s shares of restricted common stock. These shares were recorded as founders’ shares and, as such, are not considered compensation.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table presents information, to the best of our knowledge, about the beneficial ownership of our common stock on August 31, 2011, held by those persons known to beneficially own more than 5% of our capital stock and by our directors and executive officers.
Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and does not necessarily indicate beneficial ownership for any other purpose. Under these rules, beneficial ownership includes those shares of common stock over which the stockholder has sole or shared voting or investment power. It also includes (unless footnoted) shares of common stock that the stockholder has a right to acquire within 60 days after August 31, 2011 through the exercise of any option, warrant or other right. The percentage ownership of the outstanding common stock, however, is based on the assumption, expressly required by the rules of the Securities and Exchange Commission, that only the person or entity whose ownership is being reported has converted options or warrants into shares of our common stock. Unless otherwise indicated, the address of each listed stockholder is c/o Flameret, Inc, 1810 E. Sahara Ave, Suite 1429, Las Vegas, NV 89104.
(1) Except as indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of Common Stock or Series A Preferred Stock owned by such person.
(2) Percentage of beneficial ownership is based upon 20,943,120 shares of Common Stock outstanding as of August 31, 2011. For each named person, this percentage includes Common Stock that the person has the right to acquire either currently or within 60 days of August 31, 2012, including through the exercise of an option; however, such Common Stock is not deemed outstanding for the purpose of computing the percentage owned by any other person.
(3) Includes 20,100,000 common shares owned by Mr. Glover’s wife.
(4) Includes 54,900 preferred shares owned by Mr. Glover’s wife.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
During the year ended August 31, 2012 the Company received $25,533 in additional cash loans from various related parties, and had $22,487 in expenses paid on its behalf by related parties. The Company made cash payments on these notes totaling $71,802 during the year ended August 31, 2012.
Total related party notes payable as of August 31, 2012 were $147,935. Of this total, $39,914 is unsecured, bears interest at 12% per annum, and is due on demand, $480 is unsecured, bears interest at 8% and is due on demand, and the remaining $107,540 is unsecured, bears no interest, and is due on demand.
The Company has accrued interest payable of $59,141 on the related-party notes payable as of August 31, 2012.
As of August 31, 2012, the Company owes accrued salaries to officers and employees of $290,001.
On August 13, 2009, the Company issued 18,000 founder’s shares at the par value of $0.0001. On August 13, 2009, the Company received $2,500 in capital contributed from the Company’s founder and CEO.
ITEM 14.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table shows the fees paid or accrued for the audit and other services provided by our independent auditors for August 31, 2012 and 2011.
We do not have an Audit Committee. Our board of directors acted as the Company's Audit Committee during the fiscal year ended August 31, 2012, recommending a firm of independent certified public accountants to audit the annual financial statements; reviewing the independent auditors’ independence, the financial statements and their audit report; and reviewing management's administration of the system of internal accounting controls.
ITEM 15.
ITEM 15. EXHIBITS.
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FLAMERET, INC.
By:
/s/ Christopher Glover
Christopher Glover
President, Chief Executive Officer,
Treasurer, and Director
(Principal Executive Officer, )
Date: February 1, 2013
By:
/s/ John Meredith
John Meredith
Chief Financial Officer,
(Principal Accounting Officer)
Date: February 1, 2013