7

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THE OFFERING

The Offering

All selling securityholders are statutory underwriters and will be required to comply with all obligations imposed on statutory underwriters under the Securities Act of 1933. and any broker-dealer executing sell orders on behalf of the selling stockholders may be deemed to be ‘‘underwriters’’ within the meaning of the Securities Act of 1933, and any commissions or discounts given to any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities Act of 1933. The selling stockholders have informed us that they do not have any agreement or understanding, directly or indirectly, with any person to distribute their common stock.

Common stock offered by the selling stockholders:

Shares of Common Stock, $0.001 par value   Maximum number of shares that may be issued on		1,642,200 shares
conversion of Class A Convertible Common Stock Purchase Warrants		1,000,000 shares
Class A Convertible Common Stock Purchase Warrants   Maximum number of shares that may be issued on
conversion of Class B Convertible Common Stock Purchase Warrants		1,000,000 shares
Class B Convertible Common Stock Purchase Warrants 1,000,000   Total shares offered		3,642,200 shares
Common stock outstanding		18,811,700 shares (1)
Use of proceeds		We will receive none of the proceeds from the sale of the shares by the selling stockholders. We will receive $0.65 upon exercise of each Class A Warrant and $0.90 upon exercise of each Class B Warrant.

 

Risk Factors		You should read the section titled “Risk Factors” beginning on page _11_as well as other cautionary statements throughout this prospectus before investing in any shares offered hereunder.

 

8

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(1)	As of December 31, 2007. Does not include:

 

1,000,000 shares of our common stock that are reserved for issuance on the conversion of the outstanding shares of Class A Convertible Common Stock Purchase Warrants;

 

1,000,000 shares of our common stock that are reserved for issuance on the conversion of the outstanding shares of Class B Convertible Common Stock Purchase Warrants; and

 

Selling Stockholders

 

All of the offered shares are to be offered and sold by our existing security holders. Seventy four selling stockholders acquired their shares in our 2005 Private Offering which were units including common stock, Class A issuance of Class A Convertible Common Stock Purchase Warrants and our Class B issuance of Class B Convertible Common Stock Purchase Warrants. The shares of common stock to be offered by the selling stockholders include:

 

1,000,000shares of common stock currently issued and outstanding;

 

1,000,000 shares of our common stock issuable on the conversion of our Class A Convertible Common Stock Purchase Warrants; and

 

1,000,000 shares of our common stock issuable on the conversion of our Class B Convertible Common Stock Purchase Warrants.

 

Sixty Four selling stockholders acquired their shares in our 2007 Private Offering and are offering 642,200 shares.

In addition, under Rule 416 of the Securities Act, this prospectus, and the registration statement of which it is a part, covers a presently indeterminate number of shares of common stock issuable on the occurrence of a stock split, stock dividend or other similar transaction.

RISK FACTORS

RISKS RELATED TO OUR BUSINESS

AN INVESTMENT IN THE SHARES OF COMMON STOCK OFFERED BY THIS PROSPECTUS INVOLVES A HIGH DEGREE OF RISK. WE CANNOT ASSURE THAT WE WILL EVER GENERATE SIGNIFICANT REVENUES, DEVELOP OPERATIONS, OR MAKE A PROFIT.

OUR INDEPENDENT AUDITORS HAVE NOTED THAT THERE IS SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.

Our independent auditors have noted that there is substantial doubt that we can continue as a going concern. As reflected in our consolidated financial statements the Company has had cumulative operating losses. We currently have a negative net worth, extremely limited cash and suffered net losses $(455,300) at December 31, 2007 and $(77,222) at December 31, 2006. We had accumulated deficits to our stockholder’s equity of $(1,140,867) and $(685,567) for the years ended 2007 and 2006 respectively. Management expects the losses to continue, thereby requiring addition capital, some of which may be generated from this offering. There can be no assurance that our plans will be successful. Our consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

OUR OFFICERS HAVE RECEIVED LOANS THAT MAY HAVE TO BE EXPENSED AND WHICH MAY CREATE CERTAIN TAX OBLIGATIONS.

From April 2005 to the date of this Memorandum, the officers of the Company have not taken salaries but have taken advances from the Company, some of which have been repaid. We have booked loans to shareholders as a current asset on our balance sheet. As of December 31, 2006, the Company had Loans to Shareholders of approximately $125,731 to its officers and directors. As of December 31, 2007, the outstanding loans were $107,396. The advances carry an interest rate of 5% and have been recorded as “Unpaid Capital Contributions”.

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WE ARE A DEVELOPMENT STAGE COMPANY WITH NO OPERATING HISTORY FOR YOU TO EVALUATE AND WE HAVE NOT PROVEN OUR ABILITY TO GENERATE PROFITS.

We are a developmental stage company. Although we have developed a working prototype, we have not established a market for our product. We have no meaningful operating history so it will be difficult for you to evaluate an investment in our securities. From our inception to date, we have had no revenues. We may never be able to become profitable. You will be furnishing venture capital to us and will bear the risk of complete loss of your investment if we are unsuccessful.

An investor should also consider the uncertainties and difficulties frequently encountered by companies, such as ours, in their early stages of development. Our revenue and income potential is unproven and our business model is still emerging. If our business model does not prove to be profitable, investors may lose all of their investment.

WE HAVE HAD NO REVENUES AND ANTICIPATE LOSSES FOR THE FORESEEABLE FUTURE.

Since inception we have had no revenues. We have not achieved profitability and expect to continue to incur net losses throughout fiscal 2008 and subsequent fiscal periods. We expect to incur significant operating expenses and, as a result, will need to generate significant revenues to achieve profitability, which may not occur. Even if we do achieve profitability, we may be unable to sustain or increase profitability on an ongoing basis.

 

IF WE FAIL TO IMPLEMENT OUR COMMERCIALIZATION STRATEGY, OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS COULD BE MATERIALLY AND ADVERSELY AFFECTED.

 

Our future financial performance and success are dependent in large part upon our ability to implement our commercialization strategy successfully. We have engaged third party consultants to identify potential clients for our technology, although we have no means to determine whether this strategy will be successful. We may not be able to successfully implement our commercialization strategy with or without the involvement of these third parties. If we are unable to do so, our long-term growth and profitability may be adversely affected. Even if we are able to successfully implement some or all of the initiatives of our business plan, our operating results may not improve to the extent we expect, or at all.

Implementation of our commercialization strategy could also be affected by a number of factors beyond our control, such as increased competition, legal developments, general economic conditions, increased operating costs or expenses. In addition, to the extent, we have misjudged the nature and extent of industry trends or our competition; we may have difficulty achieving our strategic objectives. We may also decide to alter or discontinue certain aspects of our business strategy at any time. Any failure to successfully implement our business strategy may adversely affect our business, financial condition and results of operations and thus our ability to service our indebtedness, including our ability to make principal and interest payments on our indebtedness. 

THE COMPANY DEPENDS ON ITS PATENT AND PROPRIETARY RIGHTS TO DEVELOP AND PROTECT TECHNOLOGIES AND PRODUCTS, WHICH RIGHTS MAY NOT OFFER SUFFICIENT PROTECTION FROM INFRINGEMENT BY THIRD PARTIES. 

The Company has been issued a patent by the U.S. Patent Office for its patented network camera video technology. Management believes that this is a valid patent. However, there can be no assurances that the patent and the network camera video technology will be enforceable or generate revenues for the Company.

 

The Company’s inability to protect its intellectual property through sufficient patent protection will adversely affect that Company’s ability to survive and other companies may be able to develop substantially similar technologies in competition with the Company. If those other companies enter the marketplace with their own similar products, the value of the Company’s patent will be substantially diminished.

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The Company’s success will depend on its ability to obtain and enforce protection under United States and foreign patent laws and other intellectual property laws for the technology that the Company intends to market and license, to develop and preserve the confidentiality of trade secrets and to operate without infringing the proprietary rights of third parties.

The Company cannot assure you that our technology 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. Consequently, such breach could have a negative effect on our financial performance and results of operations.

LITIGATION TO ENFORCE ITS PATENT AGAINST UNAUTHORIZED USERS WILL BE EXPENSIVE AND TIME CONSUMING, AND THEIR OUTCOME IS UNCERTAIN. ANY DELAY OR OTHER FACTOR WHICH NEGATIVELY AFFECTS THE COMPANY’S ABILITY TO FUND OPERATIONS AND DEVELOP REVENUES. 

 

Litigation to enforce the Company’s patented technology against unauthorized users can be a lengthy, time-consuming and expensive process and there can be no assurance of the results of such litigation. The Company has engaged patent counsel to consider enforcement actions against those using the technology but who do not have a licensing agreement for it. In addition, if we fail to provide adequate proprietary protection, our names, brand name reputation, revenues and potential profitability may be negatively affected.

 

WE EXPECT TO HAVE OUR PRODUCT MANUFACTURED BY THIRD PARTIES OVER WHICH WE HAVE NO CONTROL AND WE CURRENTLY DO NOT HAVE ANY AGREEMENTS FOR THE MANUFACTURE OF THE PRODUCT. WE ARE SUBJECT TO FLUCTUATIONS IN THE COST AND AVAILABILITY OF RAW MATERIALS AND THE POSSIBLE LOSS OF SUPPLIERS.

While we have had discussions with third party suppliers regarding the manufacture of our product, we currently have no arrangements. We expect to depend on third party manufacturers over which we will have no control. We are dependent upon the pricing by these companies and the availability and pricing of raw materials to produce our products. The availability of suppliers and the price and availability of the raw materials will be affected by numerous factors beyond our control. We do not have the resources, facilities or experience to manufacture our Eyetalk product or any of its component parts. Such contract manufacturers may be the sole source of production and may have limited experience at manufacturing, a product similar to ours.

WE MAY HAVE INSUFFICIENT LIQUIDITY TO CONTINUE.

The Company will not receive any proceeds from the sale of common stock hereby offered although the Company will receive the exercise price for each warrant exercised. If none of the warrants are exercised we will need additional sources of capital or we may not be able to continue operations. We are devoting substantially all of our present efforts to establishing a new business and will need additional capital to continue implementing our business plan. We have generated no revenue. If we cannot raise money through this offering, we will have to seek other sources of financing or we will be forced to curtail or terminate our business plans. There is no assurance that additional sources of financing will be available at all or at a reasonable cost.

We have estimated the costs of completion of the commercialization at $1,382,000. Since there is no assurance that any of the warrants will be exercised the Company has initiated discussions regarding loans through commercial banks and a loan from other funding sources. We expect to continue these discussions in the hopes of arranging financing to provide sufficient liquidity. We have no assurance that any of these discussion will prove successful

WE DO NOT CURRENTLY HAVE SALES, MARKETING OR DISTRIBUTION CAPABILITIES. IF WE FAIL TO EFFECTIVELY SELL, MARKET AND DISTRIBUTE OUR EYETALK PRODUCT, OUR BUSINESS AND RESULTS OF OPERATIONS WILL SUFFER. 

We do not currently have a sales staff, marketing plan or other distribution facilities. We have engaged third parties to assist us in identifying potential users of the Eyetalk technology. If we are unable to create sales, marketing and distribution capabilities or enter into licensing and similar agreements with third parties to perform these functions, we will not be able to successfully commercialize our Eyetalk product, In order to successfully commercialize any of our product candidates, we must either internally develop sales, marketing and distribution capabilities or make arrangements with third parties to perform these services.

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WE MAY HAVE EXPOSURE TO LEGAL CLAIM THAT COULD CAUSE SIGNIFICANT LOSSES.

 

 Our Eyetalk product will likely be relied upon to provide methods of security from personal harm or property loss. To the extent that the Eyetalk product malfunctions or experiences down times, losses could occur which would give rise to legal claims against us. There is no accurate method to predict the extent of exposure to these potential claims. We may therefore be susceptible to lawsuits that could cause us to incur substantial liabilities and/or limit commercialization of our Eyetalk product. Product liability insurance for the pharmaceutical and biotechnology industries is generally expensive, if available at all. We do not currently have any product liability insurance. If we are unable to obtain sufficient insurance coverage on reasonable terms or to otherwise protect against potential product liability claims, we may be unable to commercialize our product candidates. A successful product liability claim brought against us in excess of our insurance coverage, if any, may cause us to incur substantial liabilities and, as a result, our business may fail.

COMPETITION IN THE ELECTRONIC SECURITY WORLD IS FIERCE AND WE MAY NOT BE ABLE TO COMPETE AND SURVIVE. 

The electronic security industry is very competitive. It is constantly changing and we expect competition to intensify in the future. Increased competition will result in reduced profit margins on products. We believe that our ability to compete successfully depends on a number of factors, including establishing brand awareness and market presence on a rapid basis; the quality of our marketing services; ease of use; and industry and general economic trends. The failure of any number of these factors could cause us additional losses.

OUR PRINCIPAL STOCKHOLDERS CONTROL OUR BUSINESS AFFAIRS IN WHICH CASE YOU WILL HAVE LITTLE OR NO PARTICIPATION IN OUR BUSINESS AFFAIRS.

Currently, our principal stockholders own 69.095% of our common stock. After this offering (and assuming all shares are sold and all warrants are exercised), they will own approximately 62.455% of the common stock. As a result, they will have control over all matters requiring approval by our stockholders without the approval of minority stockholders. In addition, they will be able to elect all of the members of our Board of Directors, which will allow them to control our affairs and management. They will also be able to affect most corporate matters requiring stockholder approval by written consent, without the need for a duly noticed and duly-held meeting of stockholders. As a result, they will have significant influence and control over all matters requiring approval by our stockholders. Accordingly, you will be limited in your ability to affect change in how we conduct our business.

 

WE MAY INCUR SIGNIFICANT COSTS TO ENSURE COMPLIANCE WITH CORPORATE GOVERNANCE AND ACCOUNTING REQUIREMENTS. 

 

We expect to incur significant costs associated with our public company reporting requirements, costs associated with 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 increase our legal and financial compliance costs and to make some activities more time-consuming and costly. While we have no experience as a public company, we estimate that the these additional costs will total approximately $50,000 per year. 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.

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RISKS RELATING TO OUR SECURITIES

WE HAVE NEVER PAID DIVIDENDS ON OUR COMMON STOCK AND YOU MAY NEVER RECEIVE DIVIDENDS. THERE IS A RISK THAT AN INVESTOR IN OUR COMPANY WILL NEVER SEE A RETURN ON INVESTMENT AND THE STOCK MAY BECOME WORTHLESS.

We have never paid dividends on our common stock. We intend to retain earnings, if any, to finance the development and expansion of our business. Future dividend policy will be at the discretion of the Board of Directors and will be contingent upon future earnings, if any, our financial condition, capital requirements, general business conditions and other factors. Future dividends may also be affected by covenants contained in loan or other financing documents, which may be executed by us in the future. Therefore, there can be no assurance that cash dividends of any kind will ever be paid. If you are counting on a return on your investment in the common stock, the shares are a risky investment.

THERE IS CURRENTLY NO MARKET FOR OUR COMMON STOCK AND NO ASSURANCE THAT ONE WILL DEVELOP.

There is currently no trading market for our shares of Common Stock, and there can be no assurance that a more substantial market will ever develop or be maintained. Any market price for shares of our Common Stock is likely to be very volatile, and numerous factors beyond our control may have a significant adverse effect. In addition, the stock markets generally have experienced, and continue to experience, extreme price and volume fluctuations which have affected the market price of many small capital companies and which have often been unrelated to the operating performance of these companies. These broad market fluctuations, as well as general economic and political conditions, may also adversely affect the market price of our Common Stock. Further, there is no correlation between the present limited market price of our Common Stock and our revenues, book value, assets or other established criteria of value. The present limited quotations of our Common Stock should not be considered indicative of the actual value of the Company or our Common Stock

Future sales of our common stock could put downward selling pressure on our shares, and adversely affect the stock price. There is a risk that this downward pressure may make it impossible for an investor to sell his shares at any reasonable price.

Future sales of substantial amounts of our common stock in the public market, or the perception that such sales could occur, could put downward selling pressure on our shares, and adversely affect the market price of our common stock. Such sales could be made pursuant to Rule 144 under the Securities Act of 1933, as amended, as shares become eligible for sale under the Rule.

AN ARBITRARY DETERMINATION OF THE OFFERING PRICE INCREASES THE RISK THAT PURCHASERS OF THE SHARES IN THE OFFERING WILL PAY MORE THAN THE VALUE THE PUBLIC MARKET ULTIMATELY ASSIGNS TO OUR COMMON STOCK AND MORE THAN AN INDEPENDENT APPRAISAL VALUE OF US.

The offering price for the shares of $1.25 was arbitrarily determined by our management. The offering price bears no relation to our assets, revenues, book value or other traditional criteria of value. Investors may be unable to resell their shares at or near the offering price, if they are able to resell the shares at all. Selling security holders are offering shares at a selling price of $1.25 per share until a market for the shares is established and thereafter at prevailing market prices. If the selling security holders sell to more than 25 persons, the Company will undertake efforts to have markets established for the trading of the securities. If such a market begins before all securities offered hereby are sold, then the remaining securities will be sold at market prices.

IT WILL LIKELY BE HARDER FOR THE COMPANY TO RAISE ADDITIONAL MONEY WHILE THE WARRANTS ARE OUTSTANDING.

In our March, 2005 private offering, we sold 1,000,000 redeemable Class A Common Stock purchase warrants and 1,000,000 redeemable Class B Common Stock purchase warrants (the “public warrants.”) The Class A warrants are exercisable for one share of common stock at an exercise price of $0.65 and the Class B warrants are exercisable for one share of common stock at an exercise price of $0.90. Proceeds from the exercise of warrants will be booked as paid in capital and be added to working capital. All of the warrants will remain outstanding for a period of eighteen months from the effective date of registration, unless redeemed. During the term that the public warrants are outstanding, the holders of the public warrants are given the opportunity to profit from a rise in the market price of our common stock. We may find it more difficult to raise additional equity capital while these public warrants are outstanding. At any time during which these public warrants are likely to be exercised, we may be unable to obtain additional equity capital on more favorable terms from other sources.

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THERE IS A POTENTIAL MARKET OVERHANG THAT COULD DEPRESS THE VALUE OF OUR COMMON STOCK AND FUTURE SALES OF OUR COMMON STOCK COULD PUT A DOWNWARD PRESSURE ON THE PRICE OF YOUR SHARES AND ADVERSELY AFFECT THE PRICE OF YOUR SHARES.

We also borrowed $306.000 from four non-related parties at 4% interest which begin to come due in October, 2008. These promissory notes were secured by a pledge of up to 612,000 shares of restricted common stock from our authorized buy unissued shares. If we are unable to pay according to the terms of the notes or successfully renegotiate the notes, we must issue shares to the noteholders. These shares are likely to create a market overhang until the notes are satisfied or the shares are issued and outstanding. This market overhang is likely to depress the value of the remaining outstanding shares.

Because our principal stockholders will continue to own approximately at least 62.46% of our common stock regardless of the number of warrants exercised they may dispose of a substantial percentage of their stock subject to Rule 144 trading volume limitations. If substantial amounts of any of these shares are sold there may be downward price pressures on our common stock price, causing the market price of our common stock to decrease in value. In addition, this selling activity could:

§

Decrease the level of public interest in our common stock;

§

Inhibit buying activity that might otherwise help support the market price of our common stock; and

§

Prevent possible upward price movements in our common stock.

An arbitrary determination of the offering price increases the risk that purchasers of the shares in the offering will pay more than the value the public market ultimately assigns to our common stock and more than an independent appraisal value of us.

 

BECAUSE OUR SHARES ARE DEEMED HIGH RISK “PENNY STOCKS,” YOU MAY HAVE DIFFICULTY SELLING THEM IN THE SECONDARY TRADING MARKET. 

 

The Commission has adopted regulations which generally define a "penny stock" to be any equity security that has a market price (as therein defined) less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. Additionally, if the equity security is not registered or authorized on a national securities exchange, the equity security also constitutes a "penny stock." As our common stock falls within the definition of penny stock, these regulations require the delivery, prior to any transaction involving our common stock, of a risk disclosure schedule explaining the penny stock market and the risks associated with it. These regulations generally require broker-dealers who sell penny stocks to persons other than established customers and accredited investors to deliver a disclosure schedule explaining the penny stock market and the risks associated with that market. Disclosure is also required to be made about compensation payable to both the broker-dealer and the registered representative and current quotations for the securities. These regulations also impose various sales practice requirements on broker-dealers. In addition, monthly statements are required to be sent disclosing recent price information for the penny stocks. The ability of broker/dealers to sell our common stock and the ability of shareholders to sell our common stock in the secondary market is limited. As a result, the market liquidity for our common stock is severely and adversely affected. We can provide no assurance that trading in our common stock will not be subject to these or other regulations in the future, which would negatively affect the market for our common stock.

 

IF A MARKET DEVELOPS FOR OUR SECURITIES THE COULD BE VOLATILE AND MAY NOT APPRECIATE IN VALUE.

 

If a market should develop for our securities, of which we have no assurance, the market price is likely to fluctuate significantly. Fluctuations could be rapid and severe and may provide investors little opportunity to react. Factors such as changes in results from our operations, and a variety of other factors, many of which are beyond the control of the Company, could cause the market price of our common stock to fluctuate substantially. Also, stock markets in penny stock shares tend to have extreme price and volume volatility. The market prices of shares of many smaller public companies securities are subject to volatility for reasons that frequently unrelated to the actual operating performance, earnings or other recognized measurements of value. This volatility may cause declines including very sudden and sharp declines in the market price of our common stock. We cannot assure investors that the stock price will appreciate in value, that a market will be available to resell your securities or that the shares will retain any value at all.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

Included in this prospectus are “forward-looking” statements, as well as historical information. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that the expectations reflected in these forward-looking statements will prove to be correct. Our actual results could differ materially from those anticipated in forward-looking statements as a result of certain factors, including matters described in the section titled “Risk Factors.” Forward-looking statements include those that use forward-looking terminology, such as the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “project,” “plan,” “will,” “shall,” “should” and similar expressions, including when used in the negative. Although we believe that the expectations reflected in these forward-looking statements are reasonable and achievable, these statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements, Actual results may be materially different than those described in this prospectus. Important factors that could cause our actual results, performance or achievements to differ from these forward-looking statements include the factors described in the “Risk Factors” section and elsewhere in this prospectus.

 

All forward-looking statements attributable to us are expressly qualified in their entirety by these and other factors. We undertake no obligation to update or revise these forward-looking statements, whether to reflect events or circumstances after the date initially filed or published, to reflect the occurrence of unanticipated events or otherwise

AVAILABLE INFORMATION

We have filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission, or the SEC, to register the shares of our common stock being offered by this prospectus. This Prospectus does not contain all of the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules of the Commission. For further information pertaining to the Company, reference is made to the Registration Statement. Statements contained in this prospectus or any documents incorporated herein by reference concerning the provisions of documents are necessarily summaries of such documents, and each statement is qualified in its entirety by reference to the copy of the applicable document filed with the Commission. Copies of the Registration Statement are on file at the offices of the Commission, and may be inspected without charge at the offices of the Commission, the addresses of which are set forth above, and copies may be obtained from the Commission at prescribed rates. The Registration Statement has been filed electronically through the Commission's Electronic Data Gathering, Analysis and Retrieval System and may be obtained through the Commission's Web site (http:// www.sec.gov).

You may read and copy any reports, statements or other information that we file at the SEC's public reference facilities at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information regarding the public reference facilities. The SEC maintains a website, http://www.sec.gov, that contains reports, proxy statements and information statements and other information regarding registrants that file electronically with the SEC, including us. Our SEC filings are also available to the public from commercial document retrieval services. Information contained on our website should not be considered part of this prospectus.

We will become subject to the information requirements of the Securities Exchange Act of 1934, as amended, and in accordance therewith file reports and other information with the Securities and Exchange Commission. Such reports and other information filed by us can be inspected and copied at the public reference facilities of the Commission at 100 F Street, N.E., Washington, D.C. 20549 . Requests for copies should be directed to the Commission's Public Reference Section, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more information on the public reference rooms. The Commission maintains a Web site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding registrants that file electronically.

USE OF PROCEEDS

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DETERMINATION OF OFFERING PRICE

The selling security holders will sell their shares at $1.25 per share unless and until the Company is traded, and thereafter at prevailing market prices. Prior to this offering, there has been no market for our shares. If the selling security holders sell to more than 25 persons, the Company will undertake efforts to have markets established for the trading of the securities. If such a market begins before all securities offered hereby are sold, then the remaining securities will be sold at market prices. The offering price of $1.25 per share was arbitrarily determined and bears no relationship to assets, book value, net worth, earnings, actual results of operations, or any other established investment criteria. Among the factors considered in determining this price were our historical sales levels, estimates of our prospects, the background and capital contributions of management, the degree of control which the current shareholders desired to retain, current conditions of the securities markets and other information.

MARKET FOR OUR SECURITIES AND RELATED STOCKHOLDER MATTERS

The following table presents information regarding the selling shareholders. Unless otherwise noted, the shares listed below represent the shares that each selling shareholder beneficially owned on December 31, 2007.

We are registering the above-referenced shares to permit each of the selling shareholders and their pledges, donees, transferees or other successors-in-interest that receive their shares from the selling shareholders as a gift, partnership distribution or other non-sale related transfer after the date of this prospectus to resell the shares.

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Unless otherwise noted, the following table sets forth the name of each selling shareholder, the number of shares owned by each of the selling shareholders as of December 31, 2007, the number of shares that may be offered under this prospectus and the number of shares of our common stock owned by the selling shareholders after this offering is completed, assuming all of the shares being offered are sold. Except as otherwise disclosed below, none of the selling shareholders has, or within the past three years has had, any position, office or other material relationship with us. The number of shares in the column “Shares Offered” represents all of the shares that a selling shareholder may offer under this prospectus.

Beneficial ownership is determined in accordance with Rule 13d-3(d) promulgated by the SEC under the Exchange Act. The percentages of shares beneficially owned are based 20,811,700 shares of our common stock outstanding as of December 31, 2007, including the warrant shares beneficially owned by the respective selling shareholder, as set forth in the following table and more fully described in the applicable footnotes.

 

Name of Selling Shareholder		Units Beneficially Owned Before the Offering			Shares Beneficially Owned Before the Offering			Percentage of Shares Outstanding Before the Offering			Shares Being Offered			Shares Beneficially Owned After the Offering			Percentage of Shares Beneficially Owned After the Offering
Abraham Nkeng			0			5,000			0.024	%		5,000			0			0.000	%
Al Grier & Associates			2			60,000			0.288	%		60,000			0			0.000	%
Alvin D. Booker			0			2,000			0.010	%		2,000			0			0.000	%
Amy Steele			1			30,000			0.144	%		30,000			0			0.000	%
Annette H. Hefner			1			30,000			0.144	%		30,000			0			0.000	%
Annie M. Price			0			4,000			0.019	%		4,000			0			0.000	%
Anthony Gabriel			0			10,000			0.048	%		10,000			0			0.000	%
Archie L. & Priscilla Marie Davis			1			30,000			0.144	%		30,000			0			0.000	%
Arrowood's Drywall Service, Inc.			0			8,000			0.038	%		3,000			5,000			0.024	%
Ashlee N. Lee			0			2,000			0.010	%		2,000			-			0.000	%
Asongtia Chris Fombin			0			2,000			0.010	%		2,000			-			0.000	%
Bashir A. El-Amin			2			60,000			0.288	%		60,000			-			0.000	%
Betty B. Lee			0			5,000			0.024	%		5,000			-			0.000	%
Blossom E. Washington			1			30,000			0.144	%		30,000			-			0.000	%
Brenda Ballard			1			30,000			0.144	%		30,000			-			0.000	%
Brent Granger			1			30,000			0.144	%		30,000			-			0.000	%
Candace R. Lee			0			2,000			0.010	%		2,000			-			0.000	%
Charles A. Booker, Jr.			0			2,000			0.010	%		2,000			-			0.000	%
Charles Dockery			0			4,000			0.019	%		4,000			-			0.000	%
Charles Patterson			2			60,000			0.288	%		60,000			-			0.000	%
Christopher M. Murray			0			50,000			0.240	%		50,000			-			0.000	%
Darrell A. Bidgood			1			30,000			0.144	%		30,000			-			0.000	%
David Snyder			0			3,000			0.014	%		3,000			-			0.000	%
Debra G. & Richard S. LaBrozzi			0			5,000			0.024	%		5,000			-			0.000	%
Delayce S. Hudak			0			10,000			0.048	%		10,000			-			0.000	%
Delwin Clark Sr.			0			2,000			0.010	%		2,000			-			0.000	%
Derrick G. Snowden			2			60,000			0.288	%		60,000			-			0.000	%
Donald B. Blackmon			2			60,000			0.288	%		60,000			-			0.000	%
Donald K Grantham			0			2,000			0.010	%		2,000			-			0.000	%
Donald Sanders(Friends & Family)			1			30,000			0.144	%		30,000			-			0.000	%
Donna F. Chadwick			0			7,000			0.034	%		2,000			5,000			0.024	%
Donnie L. Montgomery			0			4,000			0.019	%		4,000			-			0.000	%
Dr. Curtis C. Reeves Jr.			1			30,000			0.144	%		30,000			-			0.000	%
Dr. Tony Walden			1			30,000			0.144	%		30,000			-			0.000	%

30

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Earnest Faison Jr.			1			30,000			0.144	%		30,000			-			0.000	%
Edric Yearwood			0			7,000			0.034	%		2,000			5,000			0.024	%
Edward R. Clark			5			150,000			0.721	%		150,000			-			0.000	%
Elizabeth Brennan			1			30,000			0.144	%		30,000			-			0.000	%
Eric Barnes			1			30,000			0.144	%		30,000			-			0.000	%
Eric Davis			1			30,000			0.144	%		30,000			-			0.000	%
Evell D. Bowie III			0			5,000			0.024	%		5,000			-			0.000	%
Evell D. Bowie III			0			2,000			0.010	%		2,000			-			0.000	%
Felicia Payne			1			30,000			0.144	%		30,000			-			0.000	%
Franklin Ried			2			65,000			0.312	%		60,000			5,000			0.024	%
Gail Walker Farmer			1			30,000			0.144	%		30,000			-			0.000	%
Garry Stevenson II			0			10,000			0.048	%		10,000			-			0.000	%
Gary & Sherkica McIntyre			0			10,000			0.048	%		10,000			-			0.000	%
George Ardrey			6			185,000			0.889	%		180,000			5,000			0.024	%
Golden Smith			1			40,000			0.192	%		30,000			10,000			0.048	%
Harris B. High			0			2,500			0.012	%		2,500			-			0.000	%
Henry B. Brown			0			115,000			0.553	%		50,000			65,000			0.312	%
Henry Gilmore, III			0			2,000			0.010	%		2,000			-			0.000	%
J.C. Cousar			1			30,000			0.144	%		30,000			-			0.000	%
James Horne			1			30,000			0.144	%		30,000			-			0.000	%
James L. King			2			60,000			0.288	%		60,000			-			0.000	%
James T. Vanderhall			1			30,000			0.144	%		30,000			-			0.000	%
Jane C. Bonds			1			30,000			0.144	%		30,000			-			0.000	%
Jane L. Hall			0			2,000			0.010	%		2,000			-			0.000	%
Janet L. Booker			0			10,000			0.048	%		10,000			-			0.000	%
Janie D. Wooten			1			30,000			0.144	%		30,000			-			0.000	%
Jefferson D. Smith			1			30,000			0.144	%		30,000			-			0.000	%
Jermaine Pitt			1			50,000			0.240	%		50,000			-			0.000	%
Jerry A. Jones			3			90,000			0.432	%		90,000			-			0.000	%
Joe W. Bowser			1			30,000			0.144	%		30,000			-			0.000	%
Joseph Green, Jr. (1)			1			205,000			0.985	%		30,000			175,000			0.841	%
Kara Goff			1			30,000			0.144	%		30,000			-			0.000	%
Karen A. Jarnagin			0			2,000			0.010	%		2,000			-			0.000	%
Katherine L. Skrobot			0			2,000			0.010	%		2,000			-			0.000	%
Kenneth Pinkney			1			30,000			0.144	%		30,000			-			0.000	%
Keva Walton			0			14,000			0.067	%		14,000			-			0.000	%
Kevin L. Brickus			0			12,000			0.058	%		12,000			-			0.000	%
Lester Shelton ( Daystar Securities)			3			90,000			0.432	%		90,000			-			0.000	%
Lewis C. Dockery, III			0			4,000			0.019	%		4,000			-			0.000	%
Linda Hooker			1			30,000			0.144	%		30,000			-			0.000	%
Mark Brook			1			30,000			0.144	%		30,000			-			0.000	%
Martin & Carmen Torres			0			4,000			0.019	%		4,000			-			0.000	%
Marvin Bartee			1			50,000			0.240	%		30,000			20,000			0.096	%
Marvin Jordan			1			30,000			0.144	%		30,000			-			0.000	%
Mathew Jennings			1			30,000			0.144	%		30,000			-			0.000	%
Mathias Acha Fowung			0			10,000			0.048	%		10,000			-			0.000	%
M-M Investor (Peggy Smith )			0			20,000			0.096	%		20,000			-			0.000	%
Mrs. Megdalia M. Martinez			0			2,000			0.010	%		2,000			-			0.000	%
Norward Jackson			1			30,000			0.144	%		30,000			-			0.000	%
Pamela Ann Gardner			0			2,000			0.010	%		2,000			-			0.000	%
Phillip D. Rowe, Jr.			1			30,000			0.144	%		30,000			-			0.000	%
Prestina A. Williams			2			60,000			0.288	%		60,000			-			0.000	%
Prisca Achea Fowung			0			5,000			0.024	%		5,000			-			0.000	%
Richard A. Reif			0			2,500			0.012	%		2,500			-			0.000	%
Richard C. Forbis			0			4,000			0.019	%		4,000			-			0.000	%

 

 

31

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Richard Hooker Jr.			1			30,000			0.144	%		30,000			-			0.000	%
Robert W. Bowlin			0			5,000			0.024	%		5,000			-			0.000	%
Roderick Curmmie			0			4,000			0.019	%		4,000			-			0.000	%
Roxon Flowers			0			2,000			0.010	%		2,000			-			0.000	%
Sandra L. Hamrick			0			2,000			0.010	%		2,000			-			0.000	%
Scott & Stringfellow (Calvin E. Murphy)			3			90,000			0.432	%		90,000			-			0.000	%
Scott E. Arrowood			1			60,000			0.288	%		45,000			15,000			0.072	%
Sean Seltzer			1			30,000			0.144	%		30,000			-			0.000	%
Sevone F. Rhynes			1			30,000			0.144	%		30,000			-			0.000	%
Shelley Blanks			0			10,000			0.048	%		10,000			-			0.000	%
Sonny Turner			1			30,000			0.144	%		30,000			-			0.000	%
Spurgeon W. Webber III			2			60,000			0.288	%		60,000			-			0.000	%
Terri Freeman			0			3,200			0.015	%		3,200			-			0.000	%
Terry Mack			2			60,000			0.288	%		60,000			-			0.000	%
Timothi Jordan			1			30,000			0.144	%		30,000			-			0.000	%
Tommy Steele			1			30,000			0.144	%		30,000			-			0.000	%
Toshia D. Moore			1			30,000			0.144	%		30,000			-			0.000	%
Travis Jackson			3			100,000			0.480	%		90,000			10,000			0.048	%
Twyla Cathion			0			4,000			0.019	%		4,000			-			0.000	%
Tyrone McRae			0			2,000			0.010	%		2,000			-			0.000	%
Urban Elite, Inc.(Shaeen Johnson)			2			60,000			0.288	%		60,000			-			0.000	%
Vernon A. Russell			1			30,000			0.144	%		30,000			-			0.000	%
Veronica R. Greene			0			20,000			0.096	%		20,000			-			0.000	%
Vincent Todd Franklin			1			30,000			0.144	%		30,000			-			0.000	%
Walter Alexander			1			30,000			0.144	%		30,000			-			0.000	%
Wendell Varner			1			30,000			0.144	%		30,000			-			0.000	%
Wendy A. Woods			0			2,000			0.010	%		2,000			-			0.000	%
William C. Scheppegrell			0			70,000			0.336	%		45,000			25,000			0.120	%
William Edward Freeman			2			60,000			0.288	%		60,000			-			0.000	%
William H Generally Jr.			1			30,000			0.144	%		30,000			-			0.000	%
William H. Johnson			0			2,000			0.010	%		2,000			-			0.000	%
William H. Little			0			6,000			0.029	%		6,000			-			0.000	%
William H. Little, JR.			0			2,000			0.010	%		2,000			-			0.000	%
William J Lawery			1			30,000			0.144	%		30,000			-			0.000	%
William T. Brown			2			60,000			0.288	%		60,000			-			0.000	%
Young Kook Kim			0			500,000			2.402	%		260,000			240,000			1.153	%

(1) Joseph Greene, Jr. is the brother-in-law of Officer and Director Garry Stevenson.

 

The selling stockholders and any broker-dealers or agents that are involved in selling the shares will be considered “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Each selling stockholder has informed us that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the common stock. In no event shall any broker-dealer receive fees, commissions and markups which, in the aggregate, would exceed eight percent (8%).

 

Because selling stockholders will be considered “underwriters” within the meaning of the Securities Act, they will be subject to the prospectus delivery requirements of the Securities Act including Rule 172 thereunder. In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this prospectus. There is no underwriter or coordinating broker acting in connection with the proposed sale of the shares by the selling stockholders.

 

We agreed to keep this prospectus effective until the earlier of (i) the date on which the shares may be resold by the selling stockholders without registration and without regard to any volume limitations by reason of Rule 144(k) under the Securities Act or any other rule of similar effect or (ii) all of the shares have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The shares will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the shares may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

33

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Under applicable rules and regulations under the Securities Exchange Act of 1934, any person engaged in the distribution of the shares may not simultaneously engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the selling stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of shares of the common stock by the selling stockholders or any other person. We will make copies of this prospectus available to the selling stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).

 

We are required to pay certain fees and expenses incurred by us incident to the registration of the shares. We have agreed to indemnify the selling stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.

 

The selling stockholders may offer all of the shares of common stock for sale. Further, because it is possible that a significant number of shares could be sold at the same time under this prospectus, such sales, or that possibility, may have a depressive effect on the market price of our common stock. We cannot assure you, however, that any of the selling stockholders will sell any or all of the shares of common stock they may offer.

Description of Securities

The Company’s authorized capital consists of 65,000,000 shares of Common Stock and 10,000,000 shares of convertible preferred shares, each with par value $.001. We have issued 18,811,700 shares of Common Stock, which are currently outstanding and no preferred shares. Upon completion of the Offering and the exercise of all warrants, 20,811,700 shares of Common Stock will be issued and outstanding.

Common Stock

Holders of our common stock are entitled to one vote for each share on all matters submitted to a stockholder vote. Our stockholders may not cumulate their votes. Except as otherwise required by applicable law, the holders of shares of Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation (or, if any holders of shares of Preferred Stock are entitled to vote together with the holders of Common Stock, as a single class with such holders of shares of Preferred Stock). Holders of common stock are entitled to share in all dividends that the board of directors, in its discretion, declares from legally available funds. Each share of Common Stock shall be entitled to the same rights and privileges as every other share of Common Stock.

Holders of our common stock have no conversion, preemptive or other subscription rights, and there are no redemption provisions applicable to our common stock. The Common Stock shall be subject to the express terms of the Preferred Stock and any series of Preferred stock.

In the event of any voluntary or involuntary liquidation, distribution or winding up of the Corporation, after distribution in full of preferential amounts to the holders of shares of Preferred Stock, the common stockholders will be entitled to receive all of the remaining assets of the Corporation. Each stockholder is entitled to a ratable distribution in proportion to the number of shares of Common Stock held by them. The Common Stock shall be subject to the express terms of the Preferred Stock and any series thereof. Each share of Common Stock shall be equal to every other share of Common Stock, except as otherwise provided herein or required by law.

Subject to the preferential and other dividend rights applicable to Preferred Stock, holders of Common Stock shall be entitled to such dividends and other distributions in cash, stock or property of the Corporation as may be declared thereon by the Board of Directors from time to time out of assets or funds of the Corporation legally available therefore. All dividends and distributions on the Common Stock payable in stock of the Corporation shall be made in shares of Common Stock.

34

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Preferred Stock

Under Nevada law, we have authorized up to a total of 10,000,000 preferred shares “blank check” preferred stock. Nevada law permits broad discretion is determining the rights and preferences of blank check preferred stock. Our board of directors is authorized, without further stockholder approval, to issue blank check preferred shares from time-to-time in one or more series, convertible to common stock at a ratio of ten shares of common stock. As of the date of this private placement memorandum, there are no outstanding shares of preferred stock. The Board of Directors may confer voting rights on the preferred stock which shall have priority over the voting rights of common stock. The votes of the class of Preferred Stockholders may be weighted more heavily than the votes of the common stock class.

The Board of Directors is authorized to cause preferred shares to be issued in one or more classes or series and with may designate preferences with respect to each such class or series. Each class or series may have designations, powers, preferences and rights with respect to the shares of each such series as well as qualifications, limitations or restrictions.

Subject to certain limitations prescribed by law and the rights and preferences of the preferred stock. Each new series of preferred stock may have different rights and preferences that may be established by our board of directors. We may offer preferred stock to our officers, directors, holders of 5% or more of any class of our securities, or similar parties except on the same terms as the preferred stock is offered to all other existing or new stockholders.

The Board may determine the rights and preferences of future series of preferred stock such as:

	·	Shares;
	·	Dividends;
	·	Conversion rights to common stock or other securities;
	·	Voting rights;
	·	Preferential payments upon liquidation;
	·	Establishment of reserves for preferred payments; and
	·	Redemption prices to be paid upon redemption of the preferred stock.

Redeemable Common Stock Purchase Warrants – Class A and Class B

General

In the, 2005 offering, we sold 100 Units. Each unit contained 10,000 redeemable Class A common stock purchase warrants and 10,000 redeemable Class B common stock purchase warrants. Each redeemable Class A Common Stock purchase warrant entitles the holder to purchase one share of our Common Stock at an exercise price per share of $0.65. Each redeemable Class B Common Stock purchase warrant entitles the holder to purchase one share of our Common Stock at an exercise price per share of $0.90. Unless noted otherwise, both the Class A and Class B Common Stock purchase warrants will be referred to as the “Warrant or Warrants.”

There will be 1,000,000 Class A warrants and 1,000,000 Class B warrants outstanding. The warrants will expire eighteen months after the date of their registration. The Warrant certificate provides that the warrant exercise price may be adjusted for certain events. These events include changes in our capitalization, like a stock split, stock dividend or the like.

Exercise

Sale of the common stock underlying the warrants may occur only if an appropriate registration statement is then in effect with the Securities and Exchange Commission and if the underlying shares of common stock may be lawfully issued under the securities laws of the state or jurisdiction in which the holder resides. The warrants will be exerciseable for a period of 18 months from the effective date of this registration.

The company agreed to exert reasonable good faith efforts to register the securities sold in the 2005 Private Offering within 180 days of the closing.. In connection with the registration rights afforded under the 2005 Private Offering we engaged Sedgefield Capital Corporation, a North Carolina management consultant firm. We agreed to pay Sedgefield $165,000 and 670,000 shares of common stock. The Company engaged Sedgefield to provide certain services necessary for the registration of the securities sold in the 2005 offering.

35

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After an initial review, Sedgefield recommended completion of a number of milestones prior to the registration. These milestones included completion of the patent, establishing a commercial website, completion of the initial working model, and various other matters. Sedgefield made introductions to Enventys, a design engineering firm in Charlotte, NC; Red Moon Marketing, a web enterprise developer and NexCom, a marketing firm. Shareholder’s meetings were called in 2006 and again in 2007 during which the Sedgefield suggestions were discussed and approved by the shareholders. As a result, the registration was delayed.

If this registration statement is not declared effective or if we are unable to keep the registration statement current until the expiration of the warrants, the warrants will be valueless. Nonetheless, since our commitment was for a reasonable good faith effort to register the securities, management believes that its efforts in engaging Sedgefield and in filing this registration statement substantially fulfill its obligations. We have no legal opinions or other authority for this position and there is no assurance that we would be able to successfully defend claims from aggrieved warrant holders if we are unable to obtain or maintain an effective registration statement.

 

Our warrants may be exercised by delivering to our transfer agent the applicable certificate on or prior to the expiration date or the redemption date. The reverse side of the certificate must be properly executed and accompanied by the full exercise price for each warrant being exercised. Warrants may only be exercised to purchase whole shares.

Exercise Price and Adjustments of Exercise Price

The exercise price of the outstanding Class A warrants is $0.65, so the Company would receive $650,000 if all Class A warrants are exercised. The exercise price of the outstanding Class B warrants is $0.90, so the Company would receive $900,000 if all Class A warrants are exercised.

The exercise price of our Warrants may be adjusted to reflect changes in our capitalization. The exercise price will be appropriately adjusted in the event of:

	·	a capital reorganization or reclassification of the common stock;
	·	if we consolidate with, or merge into, or sell our property to another corporation (other than a consolidation or merger that does not result in any reclassification or change of the outstanding common stock);
	·	stock split; or
	·	reverse stock split.

This adjustment of the exercise price will also result in an adjustment of shares issuable upon exercise of the Warrant. The exercise price will be proportionately reduced or increased upon the effectiveness of the change.

Redemption of Warrants

We have the right to redeem the common stock purchase warrants for $0.05 per warrant under certain conditions. The Company’s right to redeem the warrants begins beginning six months after the date of this private placement memorandum We may redeem if the closing price of our common stock exceeds 110% of the exercise price of the warrants for five consecutive trading sessions ending on the two days prior to the day on which notice of redemption is given. If we give notice of redemption, holders of our redeemable Class A and/or Class B Common Stock purchase warrants will be forced to sell or exercise the Warrants they hold or accept the redemption price.

The Company must give the Warrant holders 30 days advance notice by registered or certified mail. The notice must be sent to the Warrant holder’s last known addresses maintained by the Company’s transfer agent. No other notice is required. If we redeem the Warrants, they will still be exercisable through the close of business on the last business day before the redemption date. On the redemption date the holders of record of redeemed Warrants shall be entitled to payment of the redemption price upon surrender of such redeemed Warrants to the Company at the office of the warrant agent designated for that purpose.

On the redemption date, the Company shall cause the warrant agent to pay the redemption price to the holders of record of redeemed Warrants. Upon payment of the redemption price, the redeemed Warrants and all rights of the Warrant holders under the Warrants shall terminate.

36

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Fractional shares will not be issued upon exercise of our Warrants.

Registration Rights

We have granted no registration rights except as registered under this prospectus..

Transfer Agent and Registrar

The Company will initially act as its own transfer agent and registrar for its shares of Common Stock. The Company expects to engage Transfer Online, Inc., a transfer agent in Portland, Oregon after the conclusion of this offering.

LEGAL MATTERS

 

37

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FINANCIAL INFORMATION

 

INDEPENDENT AUDITORS REPORT

GREG LAMB, CPA

6409 Viking Trail

Arlington, TX 76001

 

The Board of Directors and Shareholders of Revolutionary Concepts, Inc.

 

We have audited the accompanying balance sheet of Revolutionary Concepts, Inc. as of December 31, 2006 and December 31, 2007 and the related statements of loss, shareholders' deficiency and cash flows for the years then ended. 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 Accountability Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2006 and December 31, 2007 and the results of its operations and its cash flows for the years then ended 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. The Company has suffered recurring losses, negative cash flows from operations and has a net working capital deficiency, factors which raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regards to these matters are described in note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Greg Lamb, CPA

 

March 26, 2008

38

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REVOLUTIONARY CONCEPTS, INC.

(A Development Stage Company)

BALANCE SHEET

December 31, 2007 and 2006

		12/31/07			12/31/06
ASSETS
Current Assets
Cash and Cash Equivalents		$	19,070		$	0
Total Current Assets			19,070			0
Fixed Assets
Accumulated Depreciation			(6,049	)		(3,861	)
Computer			11,331			8,344
Total Fixed Assets			5,282			4,483
Other Assets
Accumulated Amortization			(30,915	)		(11,400	)
Security Deposits			1,500			1,500
Organizational Costs			3,070			3,070
Patent Costs			62,305			39,539
Total Other Assets			35,960			32,709
TOTAL ASSETS		$	60,312		$	37,192
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable		$	74,225		$	91,990
Total Current Liabilities			74,225			91,990
Stockholder's Equity
Preferred Stock 10,000,000 shares authorized, none issued Common Stock, .001 par value, 18,811,700 shares issued and outstanding, 65,000,000 authorized			18,812			17,856
Paid in Capital			1,215,538			738,644
Unpaid capital contribution			(107,396	)		(125,731	)
Deficit accumulated during the development stage			(1,140,867	)		(685,567	)
			(13,913	)		(54,798	)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	60,312		$	37,192

See Financial Footnotes

39

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REVOLUTIONARY CONCEPTS, INC.          

(A Development Stage Company)          

STATEMENT OF INCOME (LOSS)          

Year Ended December 31, 2007, 2006 and the period          

from March 12, 2004 (date of inception), to December 31, 2007          

								March 12, 2004
		Year Ended			Year Ended			(Inception) to
		December 31,			December 31,			December 31,
		2007			2006			2007
OPERATING EXPENSES
Automobile Expense			13,822			-			13,822
Bank Charges			1,130			1,164			3,761
Depreciation and Amortization Expense			21,703			8,885			36,964
Interest Expense			266			99			4,507
License and Permits			-			228			2,253
Office Expense			10,308			-			10,308
Office Supplies			6,635			963			11,026
Printing and Reproduction			2,052			1,891			6,388
Professional Fees			386,306			17,535			684,938
Product Research and Development			1,950			26,500			280,206
Taxes			-			517			517
Telephone Expense			3,778			3,158			13,177
Travel Expense			6,686			23,106			48,786
Website Development			2,700			-			2,700
Other Expenses			4,160			196			34,730
Total Operating Expenses		$	461,496		$	84,242		$	1,154,083
OTHER INCOME
Interest			6,196			7,020			13,216
NET (LOSS)		$	(455,300	)		(77,222	)	$	(1,140,867	)
Weighted number of shares outstanding			17,626,925			17,232,000			17,626,925
(Loss) per weighted number of shares outstanding			(0.0258	)		(0.0045	)		(0.0647	)

 

See notes to financial statements.

 

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REVOLUTIONARY CONCEPTS, INC.

(A Development Stage Company)

STATEMENTS OF STOCKHOLDER'S ACUMULATED DEFICIT

for the years ended December 31, 2004, 2005, 2006, 2007

and March 12, 2004 (Date of Inception)

											Unpaid
		Number of			Par			Paid in			Capital			Accumulated
		Shares			Value			Capital			Contribution			(Deficit)			Total
BALANCE MARCH 12, 2004			10,000			1			32,499			-			(3,991	)		28,509
(Date of Inception)
Contributed Capital									99,500									99,500
Unpaid capital contributions												(21,695	)					(21,695	)
Net (Loss)															(86,084	)		(86,084	)
BALANCE DECEMBER 31, 2004			10,000		$	1		$	131,999		$	(21,695	)	$	(90,075	)	$	20,230
Shares issued after re-domicile			15,990,000			15,999												15,999
Shares for Professional services			1,000,000			1,000			99,000									100,000
Private Placement Memorandum I			850,000			850			455,151									456,001
Unpaid capital contributions												(130,532	)					(130,532	)
Net (Loss)															(518,270	)		(518,270	)
BALANCE DECEMBER 31, 2005			17,850,000		$	17,850		$	686,150		$	(152,227	)	$	(608,345	)	$	(56,572	)
Private Placement Memorandum I			150,000			150			61,994									62,144
Shares repurchased with cash			(144,000	)		(144	)		(9,500	)								(9,644	)
Capital contributions repaid												26,496						26,496
Net (Loss)															(77,222	)		(77,222	)
BALANCE DECEMBER 31, 2006			17,856,000		$	17,856		$	738,644		$	(125,731	)	$	(685,567	)	$	(54,798	)
Private Placement Memorandum II			642,200			642			320,458									321,100
Shares for Professional services			313,500			314			156,436									156,750
Capital contributions repaid												18,335						18,335
Net (Loss)															(455,300	)		(455,300	)
BALANCE DECEMBER 31, 2007			18,811,700		$	18,812		$	1,215,538		$	(107,396	)	$	(1,140,867	)	$	(13,913	)

See notes to financial statements.

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REVOLUTIONARY CONCEPTS, INC.        

(A Development Stage Company)        

 

STATEMENTS OF CASH FLOWS        

Year Ended December 31, 2007, 2006 and the period from      

March 12, 2004 (date of inception) to December 31, 2007      

								March 12, 2004
		Year Ended			Year Ended			(Inception) to
		December 31,			December 31,			December 31,
		2007			2006			2007
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss)		$	(455,300	)		(77,222	)		(1,140,867	)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation and Amortization			21,703			8,885			36,964
(Increase) in Security deposits			-			-			(1,500	)
(Increase) in Organizational costs			-			-			(3,070	)
Increase in (Decrease) Accounts payable			(17,765	)		(1,761	)		74,225
NET CASH USED BY OPERATING ACTIVITIES			(451,362	)		(70,098	)		(1,034,248	)
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of Equipment			(2,987	)		(2,992	)		(11,331	)
Investment in in Patent costs			(22,766	)		(10,000	)		(62,305	)
Issuance of Common Stock Shares from Private Placements			642			150			1,642
Paid in Capital from Private Placements			320,458			61,994			837,603
Capital Contributions			-			-			147,999
Common Stock Shares and paid in capital for services			156,750			-			256,750
Common Stock Shares repurchased with cash			-			(9,644	)		(9,644	)
Capital Contributions repaid			18,335			26,496			(107,396	)
NET CASH PROVIDED BY FINANCING ACTIVITIES			470,432			66,004			1,053,318
NET INCREASE (DECREASE) IN CASH			19,070			(4,094	)		19,070
CASH BALANCE BEGINNING OF PERIOD			0			4,094			0
CASH BALANCE END OF PERIOD		$	19,070			0			19,070
SUPPLEMENTAL DISCLOSURES
Interest paid		$	266			99		$	4,507

See notes to financial statements.

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REVOLUTIONARY CONCEPTS, INC.

 

(A Development Stage Company)

 

NOTES TO FINANCIAL STATEMENTS

 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of operations - Revolutionary Concepts, Inc. (the “Company”) was originally organized in North Carolina on March 12, 2004. On February 28, 2005 the company was reorganized and re-domiciled as a Nevada corporation. The Company is in the product development stage. Recently, the company completed the initial development of a working prototype of the Eyetalk Communicator (“EYETALK”). This technology has many applications. The EYETALK specifically provides wireless technology that offers consumers an opportunity to interact with visitors to their front door. This is initiated through a doorbell or a motion sensor, which sets off a series of events that result in a phone call to the consumer who then can interact with the visitor through both video and audio. This same wireless technology could also be made portable so that you could see a child’s sporting event or school play even when you not present. The Company is also exploring other applications for the technology. The company may need to raise additional capital to further develop the EYETALK and to begin the commercialization of the EYETALK technology. They have obtained a patent on certain key components of the technology.

Basis of presentation - These financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America and have been consistently applied in the preparation of the financial statements on a going concern basis, which assumes the realization of assets and the discharge of liabilities in the normal course of operations for the foreseeable future. The Company maintains its financial records on an accrual method of accounting. The Company’s ability to continue as a going concern is dependent upon continued ability to obtain financing to repay its current obligations and fund working capital until it is able to achieve profitable operations. The Company will seek to obtain capital from equity financing through the exercise of warrants and through future common share private placements. The Company may also seek debt financing, if available. Management hopes to realize sufficient sales in future years to achieve profitable operations. There can be no assurance that the Company will be able to raise sufficient debt or equity capital on satisfactory terms. If management is unsuccessful in obtaining financing or achieving profitable operations, the Company may be required to cease operations. The outcome of these matters cannot be predicted at this time. These financial statements do not give effect to any adjustments which could be necessary should the Company be unable to continue as a going concern and, therefore, be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts differing from those reflected in the financial statements. 

Revenue recognition – The Company will recognize sales revenue at the time of delivery when ownership has transferred to the customer, when evidence of a payment arrangement exists and the sales proceeds are determinable and collectable. Provisions will be recorded for product returns based on historical experience. To date, the Company’s revenue is primarily comprised of interest income.

Options and warrants issued – The Company allocates the proceeds received from equity financing and the attached options and warrants issued, based on their relative fair values, at the time of issuance. The amount allocated to the options and warrants is recorded as additional paid in capital.

Stock-based compensation – The Company will account for its employee stock based compensation arrangements in accordance with the provisions of Accounting Principles Board (“APB”) Opinion No. 25. “Accounting for Stock Issued to Employees”, and related interpretations. As such, compensation expense for stock options, common stock and other equity instruments issued to non-employees for services received will be based upon the fair value of the equity instruments issued, as the services are provided and the securities earned. SFAS No. 123, “Accounting for Stock-Based Compensation”, requires entities that continue to apply the provisions of APB Opinion No. 25 for transactions with employees to provide pro forma net earnings (loss) and pro forma earnings (loss) per share disclosures for employee stock option grants as if the fair-value-based method defined in SFAS No. 123 had been applied to these transactions. For the period from inception (March 12, 2004) to December 31, 2007, no stock options were committed to be issued to employees.

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REVOLUTIONARY CONCEPTS, INC.

 

(A Development Stage Company)

 

NOTES TO FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income taxes – Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss carry forwards that are available to be carried forward to future years for tax purposes. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. When it is not considered to be more likely than not that a deferred tax asset will be realized, a valuation allowance is provided for the excess. Although the Company has significant loss carry forwards available to reduce future income for tax purposes, no amount has been reflected on the balance sheet for deferred income taxes as any deferred tax asset has been fully offset by a valuation allowance.

Loss per share – Basic loss per share has been calculated using the weighted average number of common shares issued and outstanding during the year.

Use of Estimates - The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make certain estimates and assumptions, where applicable, that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. While actual results could differ from those estimates, management does not expect such variances, if any, to have a material effect on the financial statements.

Research and Development Costs - Research is planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service or a new process or technique or in bringing about a significant improvement to an existing product or process. Development is the translation of research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or use. It includes the conceptual formulation, design, and testing of product alternatives, construction of prototypes, and operation of pilot plants. It does not include routine or periodic alterations to existing products, production lines, manufacturing processes, and other on-going operations even though those alterations may represent improvements and it does not include market research or market testing activities. Elements of costs shall be identified with research and development activities as follows: The costs of materials and equipment or facilities that are acquired or constructed for research and development activities and that have alternative future uses shall be capitalized as tangible assets when acquired or constructed. The cost of such materials consumed in research and development activities and the depreciation of such equipment or facilities used in those activities are research and development costs. However, the costs of materials, equipment, or facilities that are acquired or constructed for a particular research and development project and that have no alternative future uses and therefore no separate economic values are research and development costs at the time the costs are incurred. Salaries, wages, and other related costs of personnel engaged in research and development activities shall be included in research and development costs. The costs of contract services performed by others in connection with the research and development activities of an enterprise, including research and development conducted by others in behalf of the enterprise, shall be included in research and development costs.

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REVOLUTIONARY CONCEPTS, INC.

 

(A Development Stage Company)

 

NOTES TO FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Depreciation – is computed using the straight-line method over the assets’ expected useful lives.

Amortization – Deferred charges are amortized using the straight-line method over six years.

 

NOTE 2 – ACCOUNTING PRONOUNCEMENTS

SFAS No. 7, Accounting and Reporting by Development Stage Enterprises, establishes guidelines for identifying companies in the development stage and specifies the standards of financial accounting and reporting that apply to those companies. In December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 123R, “Share-Based Payment” (“SFAS 123R”). SFAS 123R revises FASB Statement No. 123 “Accounting for Stock-Based Compensation” and supersedes APB Opinion No. 25 “Accounting for Stock Issued to Employees.” SFAS 123R requires all public and non-public companies to measure and recognize compensation expense for all stock-based payments for services received at the grant-date fair value, with the cost recognized over the vesting period (or the requisite service period). SFAS 123R is effective for small business issuers for all interim periods beginning after December 15, 2005. The adoption of SFAS 123R did not have a material impact on the Company's financial statements or results of operations.

SFAS No. 123R permits public companies to adopt its requirements using one of two methods. A “modified prospective” method in which compensation cost is recognized beginning with the effective date (a) based on the requirements of SFAS 123R for all share-based payments granted after the effective date and (b) based on the requirements of SFAS No. 123 for all awards granted to employees prior to the effective date of SFAS No. 123R that remain unvested on the effective date. A “modified retrospective” method which includes the requirements of the modified prospective method described above, but also permits entities to restate based on the amounts previously recognized under SFAS No. 123 for purposes of pro forma disclosures either (a) all prior periods presented or (b) prior interim periods of the year of adoption. The Company has yet to determine which method to use in adopting SFAS 123R.

In November 2004, the FASB issued SFAS No. 151 “Inventory Costs - an amendment of ARB No. 43, Chapter 4” (“SFAS 151”). This statement amends the guidance in ARB No. 43, Chapter 4, “Inventory Pricing” to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). SFAS 151 requires that those items be recognized as current-period charges. In addition, this Statement requires that allocation of fixed production overheads to costs of conversion be based upon the normal capacity of the production facilities. The provisions of SFAS 151 are effective for fiscal years beginning after June 15, 2005. As such, the Company has adopted these provisions, if any, at the beginning of the fiscal year 2006.

In December 2004, the FASB issued SFAS No. 153, “Exchanges of Non-monetary Assets - an amendment of APB Opinion No. 29” (“SFAS 153”). SFAS 153 replaces the exception from fair value measurement in APB Opinion No. 29 for non-monetary exchanges of similar productive assets with a general exception from fair value measurement for exchanges of non-monetary assets that do not have commercial substance. A non-monetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS 153 is effective for all interim periods beginning after June 15, 2005. The adoption of SFAS 153 did not have a material impact on the Company's financial statements or results of operations.

In May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections - a replacement of APB Opinion No. 20 and FASB Statement No. 3” (“SFAS 154”). SFAS 154 changes the requirements for the accounting for and reporting of a change in accounting principle. These requirements apply to all voluntary changes and changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. SFAS 154 is effective for fiscal years beginning after December 15, 2005. As such, the Company has adopted these provisions, if any, at the beginning of the fiscal year ended December 31, 2006.

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REVOLUTIONARY CONCEPTS, INC.

 

(A Development Stage Company)

 

NOTES TO FINANCIAL STATEMENTS

NOTE 2 – ACCOUNTING PRONOUNCEMENTS continued

In February 2006, the FASB issued SFAS No. 155, “Accounting for Certain Hybrid Financial Instruments—an amendment of FASB Statements No. 133 and 140” (“SFAS 155”). This Statement amends FASB Statements No. 133, “Accounting for Derivative Instruments and Hedging Activities”, and No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities”. This Statement resolves issues addressed in Statement 133 Implementation Issue No. D1, “Application of Statement 133 to Beneficial Interests in Securitized Financial Assets”. This Statement permits fair value re-measurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation, clarifies which interest-only strips and principal-only strips are not subject to the requirements of Statement 133, establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation, clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives and amends Statement 140 to eliminate the prohibition on a qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. SFAS 155 is effective for all financial instruments acquired or issued for the Company for fiscal year begins after September 15, 2006. The adoption of this standard is not expected to have a material effect on the Company's results of operations or financial position

 

NOTE 3 – RELATED PARTY TRANSACTIONS

The Board of Directors have authorized the officers of the company to receive advances from the company for the foreseeable future, in lieu of taking compensation, under terms of promissory notes bearing 5% interest, beginning January 1, 2006. As of December 31, 2006 and 2007 the advances totaled $125,731 and $107,396, respectively.

 

NOTE 4 – ACCOUNTS PAYABLE

Accounts payable consist of the following:			12/31/06			12/31/07
Professional fees		$	12,000		$	9,125
Overdraft			1,239			-
Legal fees			8,751			10,100
Consulting fees			70,000			55,000
		$	91,990		$	74,225

 

NOTE 5 – COMITMENTS AND CONTENGINCIES

Liabilities for loss contingencies, arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated. Recoveries from third parties, which are probable of realization are separately recorded, and are not offset against the related liability, in accordance with FASB No. 39, “Offsetting of Amounts Related to Certain Contracts.” The Company is the plaintiff in a lawsuit seeking damages against the law firm retained to file for “EYETALK” product patent.

The Company alleges professional malpractice by a patent agent, professional malpractice by attorneys, failure to supervise a non-attorney employee, respondent superior, misappropriation of funds and breach of contract. The outcome of this lawsuit cannot be determined at this time and attorneys fees associated with the lawsuit are contingent upon a successful outcome in this case.

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REVOLUTIONARY CONCEPTS, INC.

 

(A Development Stage Company)

 

NOTES TO FINANCIAL STATEMENTS

NOTE 6 – CAPITAL FINANCING

The Company, though a Private Placement Memorandum (“PPM”) dated April 24, 2007, has raised additional capital of $321,100. The PPM offered 642,200 shares of common stock at a price of $.50 per share. Expenses of this offering, $18,000, were paid from the proceeds and included legal and accounting expenses, filling fees, printing costs and other offering costs. No commission, discount, finder’s fee or other similar remuneration or compensation was paid, directly or indirectly to any person for soliciting any prospective purchaser. This was a non-contingent offering and there was no minimum number of shares required to be sold, except the minimum of $1,000 (2,000 shares) per purchaser was required to accredited investors.

NOTE 7 – ITELLECTUAL PROPERTY

The patent no. US 7,193644 B2, for the prototype was successfully obtained on March 20, 2007. In accordance with FASB 86, the Company has established a technological feasibility date on July 21, 2004, the date that Phase I was delivered and presented. The software development costs have been analyzed and it has been determined that all software development costs were incurred subsequent to the feasibility date. The useful life of capitalized software costs has been assumed to be 5 years. Total software development costs were $32,200 and the appropriate minimum amortization has been taken, also in accordance with FASB 86.

NOTE 8 – COMMON STOCK SHARES FOR SERVICES

In January 2005, the Company issued one million shares of common stock for professional, legal and consulting fees. This transaction was recorded in accordance with FASB 123R at $.10 per share. These initial shares for services were issued before the Company raised any capital by private offering and was therefore valued at the value of services provided. In the year ending December 31, 2007, the Company issued 313,500 shares of common stock for professional services. These transactions were also recorded in accordance with FASB 123R at $.50 per share based on the value indicated from the shares sold in recent private placement memorandum.

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PART II

 

 

Item 23. Changes in and Disagreements with Accountants on Accounting and Financial Issues.

 

There have not been any disagreements with the auditor on any audit or accounting issues.

 

Item 24. Indemnification of Directors and Officers.

 

Our articles of incorporation provide that we will indemnify any person who is or was a director, officer, employee, agent or fiduciary of our company to the fullest extent permitted by applicable law. Nevada law permits a Nevada corporation to indemnify its directors, officers, employees and agents against liabilities and expenses they may incur in such capacities in connection with any proceeding in which they may be involved, if (i) such director or officer is not liable to the corporation or its stockholders due to the fact that his or her acts or omissions constituted a breach of his or her fiduciary duties as a director or officer and the breach of those duties involved intentional misconduct, fraud or a knowing violation of law, or (ii) he or she acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of our company, or that with respect to any criminal action or proceeding, he or she had no reasonable cause to believe that his or her conduct was unlawful.

 

In addition, our bylaws include provisions to indemnify its officers and directors and other persons against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with the action, suit or proceeding against such persons by reason of serving or having served as officers, directors, or in other capacities, if such person either is not liable pursuant to Nevada Revised Statutes 78.138 or acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of our company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendre or its equivalent will not, of itself, create a presumption that the person is liable pursuant to Nevada Revised Statutes 78.138 or did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of our company and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person's conduct was unlawful.

 

Registration Fees*		$	179
Federal Taxes			—
State Taxes			—
Legal Fees and Expenses			30,000
Transfer Agent and Printing			5,000
Blue Sky Fees			5,000
Accounting Fees and Expenses			5-,000
Miscellaneous (1)			7,500
Total		$	62,679

* Estimated Figures

(1) Includes costs for Edgar filings and all other costs anticipated.

 

Item 26. Recent Sales of Unregistered Securities.

In February, 2005, we agreed to issue 670,000 shares of restricted common stock to Sedgefield Capital Corporation, for consulting services and 330,000 shares of restricted common stock to Charles Barkley, our securities counsel, to partially defray the costs of attorney's fees.

 

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2005 Private Placement

  

In March 2005, RCI commenced a private offering in which we sold securities to 72 accredited investors in the form of 100 units, each consisting of 10,000 shares of common stock; 10,000 Class A Warrants, and 10,000 Class B Warrants (the "2005 Offering"). The units were sold at a price of $5,000 per unit and the offering was completed in March, 2006. We received total consideration of $500,000, which were used to pay our consultants and to complete the prototype and patenting of the remote network camera video system.

 

Each Class A warrant is exercisable for one share of common stock at an exercise price of $0.65 per share, and each Class B warrant is exercisable for one share of common stock at an exercise price of $0.90 per share. Each 2005 Warrant will be exercisable for eighteen months after the date of their registration, unless extended or redeemed. The exercise price and number of shares of common stock underlying the 2005 Warrants is subject to adjustment on certain events, including reverse stock splits, stock dividends and recapitalizations, combinations, and mergers. We must at all times reserve and keep available, solely for issuance and delivery upon the exercise of the 2005 Warrants, such shares of common stock underlying the 2005 Warrants, as from time to time shall be issuable upon the exercise of the 2005 Warrants.

The common stock, warrants and common stock issuable upon exercise of the warrants have not been registered under the Securities Act, and were issued and sold in reliance upon the exemption from registration contained in Section 4(2) of the Securities Act and Regulation D promulgated thereunder, which exempt transactions by an issuer not involving any public offering. The issuance of the shares was undertaken without general solicitation or advertising. Each purchaser of the shares represented in the purchase agreement, among other things, that (a) it was an “accredited investor”, as defined in Regulation D promulgated under the Securities Act of 1933, (b) it had obtained sufficient information from us to evaluate the merits and risks of an investment in the shares of our common stock and (c) it was acquiring the shares of our common stock for investment purposes and not with a view to any public resale or other distribution in violation of the Securities Act of 1933 or the securities laws of any state. In addition, the stock certificate representing these shares contained a legend that they are restricted securities under the Securities Act of 1933. These securities may not be offered or sold in the United States in the absence of an effective registration statement or exemption from the registration requirements under the Securities Act.

 2007 Private Placement

In April 2007, we commenced a private offering under Regulation D in which we sold 642,200 shares of restricted common stock for $0.50 per share to 63 accredited investors, which was completed in October, 2007. We received total consideration of $321,100, a portion of which is expected to be used to fund the costs of this offering.

Other Consultants

In 2005 the Company entered into marketing and public relations agreement with Red Moon Marketing, Inc. and NexCom, both of Charlotte, North Carolina. The company paid $83,580.10 to NexCom along with 56,000 shares of restricted common stock and $50,000 to Red Moon and 87,500 sharers of restricted common stock. These agreements ended as of December 31, 2007.

We also entered into an agreement with JDSL to provide research and technical support in the presentation of the Eyetalk. We have paid JDSL $40,000 cash and 120,000 shares of restricted common stock. Beginning in January 2008, our agreement with JDSL is fee based only.

We believe these were private placements within the meaning of the rules and regulations under the Securities Act. Each purchaser of the shares represented in the purchase agreement, among other things, that (a) it was an “accredited investor”, as defined in Regulation D promulgated under the Securities Act of 1933, (b) it had obtained sufficient information from us to evaluate the merits and risks of an investment in the shares of our common stock and (c) it was acquiring the shares of our common stock for investment purposes and not with a view to any public resale or other distribution in violation of the Securities Act of 1933 or the securities laws of any state. In addition, the stock certificate representing these shares contained a legend that they are restricted securities under the Securities Act of 1933. These securities may not be offered or sold in the United States in the absence of an effective registration statement or exemption from the registration requirements under the Securities Act.

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Item 27. Exhibits.

 

 

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SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all the requirements of filing of Form S-1 and authorized this registration statement to be signed on its behalf by the undersigned, in the City of Charlotte, NC on July 14, 2008.

Revolutionary Concepts, Inc.

/s/ Ron Carter

By: Ron Carter

Title: President & CEO, Director

Revolutionary Concepts, Inc.

/s/ Garry Stevenson

By: Garry Stevenson

Title: Chief Financial Officer, Director

In accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following persons in the capacities and on the date stated.

/s/ Ron Carter

By: Ron Carter

Title: President and CEO, Director

/s/ Garry Stevenson

By: Garry Stevenson

Title: Chief Financial Officer, Director

 

Date: July 14 2008

 

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