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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 2 TO FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SEURITIES OF
SMALL BUSINESS ISSUERS Under Section 12(b) or
(g) of the Securities Exchange Act of 1934
Oleramma, Inc.
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(Name of Small Business Issuer in its charter)
Nevada 86-0931332
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(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
10801 E. Grove Street, Apache Junction, Arizona 85220
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(Address of principal executive offices) (zip code)
(602) 984-8446 (PHONE) (602) 380-5670 (FAX)
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Issuer's Telephone and Fax Number
Securities to be registered under section 12(b) of the Act:
Title of Each Class Name on each exchange on which
to be registered each class is to be registered
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Securities to be registered under section 12(g)of the Act:
Common Stock, $.001 par value per share, 20,000,000 shares authorized,
3,767,200 issued and outstanding as of April 3, 1999.
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FORWARD LOOKING STATEMENTS
Oleramma, Inc., a developmental stage company ("Oleramma, Inc," or
the "Company") cautions readers that certain important factors may
affect the Company's actual results and could cause such results to
differ materially from any forward-looking statements that may be deemed
to have been made in this Form 10-SB or that are otherwise made by or on
behalf of the Company. For this purpose, any statements contained in the
Form 10-SB that are not statements of historical fact may be deemed to be
forward-looking statements. Without limiting the generality of the
foregoing, words such as "may," "expect," "believe," "anticipate," "intend,"
"could," "estimate," "plans," or "continue" or the negative or other
variations thereof or comparable terminology are intended to identify
forward-looking statements. Factors that may affect the Company's results
include, but are not limited to, the Company's limited operating history,
its ability to produce additional products and services, its dependence on
a limited number of customers and key personnel, its possible need for
additional financing, its dependence on certain industries, and competition
from its competitors. With respect to any forward-looking statements
contained herein, the Company believes that it is subject to a number of
risk factors, including: the length of time to develop genetically
engineered Yuma cotton seeds, marketing said product, other companies may
be pursing the development of a similar genetically engineered Pima cotton
seed, and the Company's ability to implement its product strategies to
develop its business in emerging markets; competitive actions; and, general
economic and business conditions. Any forward-looking statements in this
report should be evaluated in light of these important risk factors. The
Company is also subject to other risks detailed herein or set forth from
time to time in the Company's filings with the Securities and Exchange
Commission.
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
Part I ......................................................... 4
Item 1. Description of Business.................................. 4
Item 2. Management's Discussion and Analysis or Plan of
Operation................................................ 13
Item 3. Description of Property.................................. 14
Item 4. Security Ownership of Management and Others and Certain
Security Holders......................................... 15
Item 5. Directors, Executives, Officers and Significant
Employees................................................ 16
Item 6. Remuneration of Directors and Executive
Officers................................................. 17
Item 7. Interest of Management and Others in Certain
Transactions............................................. 17
Part II ......................................................... 18
Item 1. Market Price of and Dividends of the Registrant's
Common Equity and Other Stockholder Matters.............. 18
Item 2. Legal Proceedings........................................ 19
Item 3. Recent Sales of Unregistered Securities.................. 19
Item 4. Description of Securities................................ 21
Item 5. Indemnification of Directors and Officers................ 22
Part F/S ......................................................... 24
Item 1. Financial Statements..................................... 24
Item 2. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure..................... 24
Part III ........................................................ 25
Item 1. Index to Exhibits....................................... 25
Item 2. Description of Exhibits................................ 25
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Part I
Item 1. Description of Business
A. Business Development, Organization and Acquisition Activities
Oleramma, Inc., a developmental stage company, hereinafter referred to
as "the Company", was organized by the filing of articles of incorporation
with the Secretary of State of the State of Nevada on September 21, 1998.
The original articles of the Company authorized the issuance of twenty
million (20,000,000) shares of Common Stock at par value of $0.001 per
share and five million (5,000,000) shares of Preferred Stock at par value
of $0.001.
The Registrant was incorporated on September 21, 1998, in the state of
Nevada under the name Oleramma, Inc. (hereinafter the "Registrant" or the
"Company"). In connection with its formation, a total of 3,000,000 shares
of its common stock were issued to the founder of the Company. The Company
engaged the services of a direct public offering consulting firm, Campbell
Mello Associates, located at 3110 South Valley View, Las Vegas, NV 89102 in
conjunction with structuring the self underwritten public offering undertaken
prior to the filing of this Registration Statement. In consideration for
these services, the Company compensated this consulting firm in the amount of
$6,000.00. There are no present agreements with any consultants.
In February, 1999, the Company sold Seven Hundred Sixty-seven Thousand Two
Hundred (767,200) shares of its common stock in connection with a public
offering at a price of $0.05 per share. The public offering was registered
with the Nevada Securities Division. The Company was issued a permit to
sell securities to the public in the State of Nevada from the Nevada
Securities Division on February 19, 1999 pursuant to Nevada Revised Statutes
Chapter 90.490. This offering was made in reliance upon an exemption from
the registration provisions of Section 5 of the Securities Act of 1993,
as amended, pursuant to regulation D, Rule 504, of the Act. On September
22, 1998, the Company's founding shareholder purchased 3,000,000 shares of
the company's authorized but unissued treasury stock for cash and assets.
Additionally, the Company sold Thirty-eight Thousand Three Hundred Sixty
Dollars ($38,360) or Seven Hundred Sixty-seven Thousand Two Hundred (767,200)
shares of the Common Stock of the Company during the Offering to
approximately fifty-six (56) shareholders in the State of Nevada.
The offering was closed February 28, 1999. As of February 28, 1999, the
Company has three million seven hundred sixty seven thousand two hundred
shares (3,767,200) shares of its $0.001 par value common voting stock issued
and outstanding which are held by approximately fifty-seven (57)
shareholders of record. The Company is a developmental stage company, which
plans to develop a genetically engineered Pima cotton seed, with a virus
fatal to the bollworm. This process is still being developed with other
varieties of cotton. Unlike other varieties of cotton, Pima cotton is a
fine, lustrous fiber. It produces the longest cotton fiber and is the
least plentiful and most difficult to grow, based on soil, climate, and
infestations. The fibers from Pima cotton are used mainly for fine fabrics,
yarns, and hosiery.
It is the Company's intention to enter the marketplace as the first
genetically engineered Pima cotton, which is genetically superior in
combating infestations. Pima cotton is a cotton species, which represents
a small percent of the total cotton grown in the U.S. Uphold cotton
dominates the market. Therefore, most genetic engineering research and
development is being performed with Uphold cotton. However, there are no
assurances or guarantees that other companies may not enter the marketplace
with a similar product beforehand. The auditors of the Company have issued a
going concern opinion in Note 5 of the Notes to Financial Statements,
(February 28, 1999, and December 31, 1998) which states in pertinent part
the following, "The Company does not have significant cash or other material
assets, nor does it have an established source of revenues sufficient to cover
its operating costs and to allow it to continue as a going concern." It is,
however, the intent of the Company to seek to raise additional capital via a
private placement offering pursuant to Regulation "D" Rule 505 or 506, once
the Company is trading on OTC-BB.
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B. Business of Issuer
1) Principal Products and Principal Markets
Oleramma, Inc. was incorporated to transact any lawful business. The
Company intends to develop a genetically engineered type of Pima cotton seed
with a gene that contains a virus fatal to the pink bollworm, a leaf-munching
pest that can destroy cotton fields. The Company has been unable to find
any similar product on the market.
Scientists have identified 39 species of cotton plants. There are basically
three large groups of cotton fibers which are cultivated. These three large
groups are classified based on staple length (average length of the fibers
comprising a sample or bale of cotton) and appearance. The first group
includes the fine, lustrous fibers with staple length ranging from about
2.5 to 6.5 cm (1 to 2.5 inches) and includes types of the highest quality,
e.g., Sea Island, Egyptian, American-Egyptian and Pima cottons. This group
is least plentiful and most difficult to grow, based on soil, climate, and
infestations. These long-staple cottons are costly and are used mainly for
fine fabrics, yarns, and hosiery. The second group contain the standard
medium-staple length from about 1.3 to 3.3 cm (0.5 to 1.3 inches), e.g.,
Uphold. The third group includes the short-staple, coarse cottons, ranging
from and 1 to 2.4 cm (0.375 to 1 inch) in length, used to make carpets and
blankets, to make coarse and inexpensive fabrics, and in blends with other
fibers. (Reference: R. J. Janus (ed.) The World Book Encyclopedia, 1999
edition.)
Pima cotton generally is planted by early May with most of it harvested
from mid-October to mid-December. Utilizing controlled climate and
greenhouse conditions, this process can be accelerated to a small degree.
On average, cotton requires about 180 days from cultivation to maturity,
based on continues warm weather with adequate moisture and sunlight.
Therefore, it will take some time, to develop a genetically engineered seed.
It is the Company's intention to enter the marketplace as the first
genetically engineered Pima cotton, which genetically contains toxins to
combat infestations. Pima cotton is a cotton species which represents
a small percent of the total cotton grown in the U.S. Uphold cotton
dominates the market. Therefore, most genetic engineering research and
development is being performed with Uphold cotton. However, there are no
assurances or guarantees that another company will enter the marketplace
with a similar product beforehand. If this should happen, it would
severely limit any earnings potential for Oleramma, Inc.
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(2) Status of Products and Services
The Company has limited operating history. The company was organized on
September 21, 1998. Activities to date have been limited primarily to
organization, initial capitalization, finding an appropriate operating
facility in Arizona, and commencing with initial operational plans.
The Company's president and CEO, Rick Jesky, owned and operated a sole
proprietorship horticulture nursery named Oleramma Nursery in Arizona
from 1989 to 1993. Prior to that, he had 15 years experience as a teacher
in the Arizona public school system. From 1993 to 1998 he worked as
General Manager, for a major nightclub/restaurant (Studebaker's) in
the metro Phoenix area. In addition to his duties as President and CEO
of Oleramma, Inc., he is working as an educator with Superior Court of Arizona,
Pinal County. He is teaching science and humanities to high school students
who are assigned to State programs.
As of February, 1999, the company had developed a business plan, and
established a research facility. To date, the Company has taken the following
initiatives and steps in order to further its operations and continues to
execute its business plan, this includes:
a) The Company has leased a former nursery facility from its President and
CEO to conduct its operations. This lease arrangement to rent these nursery
facilities is included as an Exhibit with this Filing. If the Company can
develop such a basic seed, at that time, the Company would need to find larger
facilities (See item "iv" below this section) or sell off (See item "h" below
this section) this hybrid cotton seed to seed operators who can prorogate these
seeds.
b) The Company was issued a permit to sell securities to the public in the
State of Nevada on February 19, 1999 pursuant to Nevada Revised Statues Chapter
90.490. This offering was made in reliance upon an exemption from the
registration provisions of Section 5 of the Securities Act of 1993, as amended,
pursuant to regulation D, Rule 504, of the Act.
c) Through this offering, the Company raised $38,360 to begin its product
development efforts.
d) The Company intends to produce the cotton seeds at its own facilities,
its plan includes:
i) The Company plans to conduct its research with commercially available
Pima cotton seeds to be procured through one of the Arizona Cotton co-ops.
ii) The Company plans to utilize the plant cell culture techniques, to develop
a genetically engineered Pima cotton plant, which hopefully might resist
infestations. Genetic engineering traditional methods of plant breeding and
selection will be used first to benchmark and test the results of traditional
methods.
iii) The Company plans to utilize its facilities to develop a genetically
engineered cotton seed, with toxins which will hopefully resist infestations.
If successful these can be replicated in large quantities on the Company's
leased property. For example, 40,000 sq. ft. provides enough land space to
produce 3,000 pounds of Pima cotton in one planting. On average, one ton
(2,000 pounds) of cotton produces about 500 pounds of cotton lint (i.e.,
ginned cotton) and approximately 850 to 900 pounds of seed. And, one pound
of cotton seed represents approximately 4,000 seeds. An acre of land (42,500
sq. ft.) can grow between 40,000 to 50,000 cotton plants. In other words, one
planting on 40,000 square feet can produce approximately five million
(5,250,000) cotton seeds.
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(v) If successful, the company plans give the cotton seeds it produces to one
of several cotton farmers in Pinal County, Arizona, who would utilize these
seeds during one of their seasonal plantings. (Cotton is harvested twice a
year in Arizona.) A second planting utilizing the 5,250,000 seeds, produced at
the Oleramma Nursery could produce approximately a half billion replicated
cotton seeds. Management believes, based on their conversations with cotton
farmers, that a Pinal County cotton farmer would not charge for the use of
their land, provided they could keep the cotton crop grown (i.e., cotton
lint) in exchange for the seeds produced. There are no assurances that
cotton farmers might charge a nomial fee, for the use of their land to
duplicate these cotton seeds, this would adversely affect the Company's
business results. Traditionally, in Arizona, cotton farmers have exchanged
the cotton seeds their crop produces to have their cotton ginned at no cost.
Likewise, they would be willing to exchange free cotton seeds if they can
keep the cotton crop produced. Cotton farmers are currently subsidized by
the government, approximately sixteen (16) cents per pound for cotton lint
produced, not cotton seeds produced.
e) The Company intends on working with the USDA in order to obtain a
Certificate of Invention if it is successful in developing this genetically
engineered cotton seed and is familiar with this process.
f) If successful, utilizing the Certificate of Invention, the seeds would be
marketed through State Co-ops and wholesale seed companies. The President of
the Company would contact each of the distributors personally and/or through a
mail/telephone campaign. The Company would also advertise their seeds through
National Cotton Council. Additionally, the results from the second planting,
at at Pinal County cotton farmer, would provide additional data on the
reduction of pesticides used. Currently, cotton farmers can spend as much as
$50 dollars per acre on pesticides. The major incentive to utilize a
genetically improved cotton seed is to reduce the amount of pesticide usage,
in order to improve the cotton farmers cost of production.
g) If successful, the cotton seeds would be distributed and sold through the
aforementioned cotton co-ops and wholesale seed companies.
h) As an exit strategy, the Company would consider selling the rights to its
product, based on the return of equity to its shareholders; otherwise, the
Company would continue to market the product on its own. If this project is
successfully completed, it would give the Company the opportunity it utilize
its learnings with another agricultural product and/or another variety of
cotton.
(3) Research and Development Activities
Research and development activities for genetic engineering begin with basic
techniques for gene manipulation which involve: (1) the isolation
of a specific deoxyribonucleic acid (DNA) molecule(s) to be replicated as
the passenger DNA; (2) the joining of this DNA with a DNA vector, also known
as a vehicle or a replicon, capable of autonomous replication in a cell after
foreign DNA has been inserted into it; and, (3) the transfer, via
transformation or transfection, of the recombinant molecule into a suitable
host. (Reference: S. P. Parker (ed.) McGraw-Hill Encyclopedia of Science and
Technology, 8th edition, 1997.)
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A variety of genetically engineered products have come to be used in
agriculture. Some plants have been given genes from a bacterium, enabling
them to make a poison that destroys pest insects without harming useful
insects or other animals. Other crops have received genes that make them
resistant to herbicides, chemicals sprayed on crops to kill weeds.
According to the U.S. Department of Agriculture, thirty (30) percent of U.S.
cotton fields are utilizing some form of a genetically engineered cotton
seed.
Cotton plants offer many practical benefits of genetic engineering. Genes
can be moved from one kind of plant to another in order to improve a desired
crop characteristic, e.g., the deterrence of the bollworm. So far, only
single-gene traits can be manipulated; multigenic traits such as yield or
nitrogen fixation are still too complex to submit with current technology.
The cloning vehicle that has the greatest potential for engineering new
plant varieties is the Ti plasmid. This plasmid was originally isolated
from "Agrobacterium tumefaciens", a bacterium that causes tumors to form on
many varieties of plants. Agrobacterium is a gram-negative bacteria that
lives in soil and causes crown gall disease in plants, evidenced by the
growth of tumors on the trunks and sometimes the roots of plants. The
pathogenicity of the organisms is due to the presence of a bacterial PLASMID,
called the Ti plasmid, that can be transferred to the plant cells from the
bacteria. The plasmid contains genes that direct the plant cells to make
nutrients useful for bacteria and gene products that interfere with normal
plant cell growth and division. (Reference: R. Old and S. Primrose,
Principles of Gene Manipulation: An Introduction to Genetic Engineering,
5th ed., 1994.) Therefore, the Company hopes to genetically alter this Ti
plasmid so that pieces of foreign DNA can be inserted in it as specific
restriction enzyme recognition sites. The Ti plasmid can then be used to
transfer desirable genes into the chromosomes of the cotton plant
cells.
To accomplish this, biochemical techniques are utilized, involving special
enzymes, to break the DNA strand at chosen points, insert new segments, and
"stitch" the strand back together again. The result, known as recombinant
DNA, is DNA that incorporates extra segments bearing genes it had not
previously contained.
Insertion of genes into different organisms is made much easier by the
existence of bacterial plasmids, small circles of DNA which are much smaller
than the bacterial chromosome. Using hericide enzymes, genes can be
inserted from one organism into a bacterial plasmid, then inserted into the
recombinant plasmid which is placed in the cotton seed, where it will
hopefully direct the synthesis of the desired proteins. (Reference: B. R.
Glick and J.J. Pasternak, Molecular Biotechnology: Principles and Applications
of Recombinant DNA, 1994.)
It is the Company's goal to engineer Pima cotton so it produces its own
insecticide. Utilizing the science described above, the Company hopes to
research and develop a bacteria gene into Pima cotton, where the cotton will
produce its own toxins which will kill off any bollworms which decide to
attack it. Other varieties of cotton (e.g. Upland) have had some success,
utilizing these techniques to reduce infestations.
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The Company plans to utilize standard techniques in transfering Ti plasmid
combined with a an insecticide protein to create a foreign DNA which would
help the Pima cotton resist infestations. The first approach is a common
process for the transfer of recombinant DNA into the cells or protoplasts of
plants. The process consists of infecting the plants or plant cells, or
incubating protoplasts from the plants with Agrobacterium bacteria which
contain in their genetic material an insecticidal protein fragment, wherein
said insecticidal is integrated into the chromosome of the Agrobacterium
prior to the infecting or incubating step. The second approach, which is
not as widely used, is the utilization of genetic fragmentation. Microscopic
metal fragments are coated with the foreign DNA and are then shot into the
plant cells, penetrating the cell walls. With this technique, some of the
cells retain the DNA and are transformed by it. Those cells can then be
cultured and used to regenerate an entire plant. (Reference: C. P.
Hollenberg and H. Sahm (eds.), Microbial Genetical Engineering and Enzyme
Technology (Biotech 1), 1987.)
Genes placed in the plant genome via either method may be transmitted
sexually, via seeds, to the next generation, or they could also be propagated
asexually, if desired.
The Company plans to utilize the plant cell culture techniques, to develop a
genetically engineered Pima cotton plant, to resist infestations. Genetic
engineering using the Ti plasmid can produce results that could not be
produced by traditional methods of plant breeding and selection. (See
Definition Section, pages 25-26 of this filing for clarification of any
technical terms.)
There are no assurances that the Company will be successful in utilizing this
process with Pima cotton. If these research and development activities are not
successful, the Company will not be able to continue in business.
(4) Employees
The Company currently has two (2) employees: one President and one Secretary.
All of the research and development will be the responsibility of the
President of the Company, who has experience in the horticulture field.
Therefore, until the Company can develop a hybrid Pima cotton seed, if even
possible, the Company has no intention at this time to add employees.
(5) Impact of Environmental Laws
The Company is not aware of any federal, state or local environmental laws
which would affect its operations. The Company plans to use the former
horticulture nursery facilities of the Company's president to conduct its
research in the potential development of this hybrid cotton seed.
(6) Year 2000 Issue
The Company's business does not currently utilize any electronic processing
systems and therefore is not directly at risk for having systems that will
not recognize the Year 2000 ("Y2K") or treat any date after December 31, 1999
as a date during the twentieth century. However, no assurances can be given
that the Company will be able to avoid all Y2K problems, especially those
that might originate with third parties with whom the Company transacts
business, such as financial institutions, and the Company has not undertaken
any investigation to determine the Y2K readiness of such parties. If the
Company, or any third party with whom the Company does business were to have
a Y2K problem, the business of the Company could be disrupted and the
Company's financial condition and results of operations could be materially
adversely affected.
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(7) The Industry and Potential Effect on the Company's Plan of Operation
Pima cotton was first introduced in the U.S. in 1903, when U.S. Department
of Agriculture researches noted similarities between Egypt's Nile Valley and
Arizona's Salt River Valley. They planted several varieties of extra long
staple Egyptian cotton at a research farm in Sacaton, where members of the
Pima Indian Tribe helped cultivate the first crops. Pima cotton is a crop
whose silky, extra-long fibers are prized worldwide for use in fine shirts,
luxurious undergarments and high-end linens.
In the late-1980's, there were 245,000 acres planted with Pima cotton in
Arizona, according to the Arizona Agricultural Statistics Service. In 1998,
Arizona farmers planted only 13,000 acres of Pima cotton, down 9,000 acres
from last year. Due to insect infestation with Pima cotton, farmers have
shifted production to Upland cotton. Upland cotton fetches lower prices,
but offers lower costs to grow and higher yields. Today, no more than 50 to
100 farmers are growing Pima cotton in Arizona, compared with 300-400 at its
height. Researchers have developed varieties of the more common Upland
cotton that resist the destructive bollworm. Resistant varieties of Pima
cotton have yet to be developed. To the knowledge of the Company, little
progress has been made in developing a resistant variety of Pima cotton;
however, this does not mean that independent research is not taking place.
The methods to develop a resistant variety of Pima cotton as to be employed
by the Company are well known in the scientific community. These scientific
methods are being developed with other varieties of cotton. Since Pima
cotton represents a small share of the total cotton market, it is the
Company's hope that other researchers are not trying to develop a resistant
variety of Pima cotton. If the Company is second on the market with an
insect resistant Pima cotton, this will limit any market potential and
adversely affect the future for the Company.
(8) Pima Cotton Market
According to the U.S. Department of Agriculture, Pima cotton crop represents
$271 million-a-year industry. California now produces 80 percent of
American Pima cotton, Arizona, along with parts of Texas and New Mexico,
account for the rest. Growers export 80 percent of American Pima cotton to
manufacturers in Asia and Europe. The total value of the U.S. Cotton crop
is approximately $6.5 billion.
Pima cotton is a fine, lustrous fiber with a staple length ranging from about
2.5 to 6.5 cm (1 to 2.5 inches) and includes types of the highest quality
cotton grown in the world. Pima cotton is difficult to grow, based on soil,
climate, and infestations. Cotton farmers who have the right soil and
climate conditions are therefore faced with infestation problems.
The U.S. is the second largest producer of cotton, and China leads the world
in cotton production. Genetic engineering is taking over cotton more swiftly
than any other crop. In 1995, no commercial cotton was genetically modified;
in 1998, more than 30 percent of 12 million acres in the U.S. will be planted
with altered seeds. The genetically engineered cotton seeds are generally
found in the Uphold species. Pima cotton has yet to be genetically
engineered.
California, which did not even plant with Pima cotton until 1897, now
dominates the $271 million-a-year industry, according to the USDA.
California now produces eighty (80) percent of American Pima cotton.
Arizona, along with parts of Texas and New Mexico, account for the rest.
Growers export eighty (80) percent of American Pima cotton to manufacturers
in Asia and Europe.
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Cotton prices in the U.S. have historically remained in a tight range.
Production costs remain staggeringly high, i.e., on average it costs cotton
farmers $500 an acre, compared to $200 for corn. And, yields are not
increasing. Nationwide, cotton planting is down by one-fourth. Genetic
engineering is viewed, by scientists, as a means to reverse cotton's decline.
Insect resistance can slash the use of costly insecticides that kill worms
and in so doing benefit the environment. For example, the average cotton
farmer, according to the USDA, utilizes insecticides on their cotton crop
ten (10) times before it is harvested. If a genetic cotton crop could be
developed which reduces the use of insecticides, this would lower farm
production cost and increase the profit per acre.
The Company's management believes there is a void in the marketplace for
insect resistant Pima cotton. The Company hopes to develop this hybrid
cotton plant.
(9) Customers
Cotton represents the largest agricultural crop in Arizona. In recent years,
Arizona cotton farmers have shifted from growing Pima cotton to Upland
cotton, because of the fact that Pima cotton has been having a problem with
insect infestation. As stated, cotton farmers in California produce eighty
(80) percent of Pima cotton, followed by Arizona, Texas, and New Mexico.
These cotton farmers purchase the bulk of their cotton seeds through a
handful of seed distributors. These cotton farmers would represent the bulk
of the potential Pima cotton seed business.
(10) Raw Materials and Suppliers
The Company plans to utilize widely available Pima cotton seeds, which will
hopefully be developed into a genetically engineered Pima cotton seed through
genetic engineering utilizing the soil bacterium insecitides.
(11) Patents, Trademarks, Licenses, Franchises, Concessions, Royalty
Agreements, and Labor Contracts
If the Company can develop a hybrid Pima seed, it will file for a proprietary
agriculture Certificate with the USDA. Certificates of protection are issued
by the Plant Variety Protection Office of the USDA, for new distinct, uniform
and stable varieties of sexually reproduced or tuber propagated plants. Each
certificate certifies that the breeder has the right, during the term of the
protection, to prevent others from selling the variety, offering it for sale,
reproducing it, importing it, conditioning it, stocking it, or using it in
producing a hybrid or different variety from it, as provided by the Act.
Applications for a certificate for plant variety protection and their
contents shall be kept in confidence by the Plant Variety Protection Office,
by the Board, and by the offices in the Department of Agriculture to which
access may be given under regulations. No information concerning the same
shall be given without the authority of the owner, unless necessary under
special circumstances as may be determined by the Secretary of the USDA,
except that the Secretary may publish the variety names designated in
applications, stating the kind to which each applies, the name of the
applicant, and whether the applicant specified that the variety is to be
sold by variety name only as a class of certified seed. (7 U.S.C. 2426).
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(12) Regulation
The Company will be conducting its research at a former horticulture nursery,
which is owned by the Company's president and CEO. As previously stated in
this filing under Research and Development, the Company plans to utilize plant
cell culture techniques, to develop a genetically engineered Pima cotton
plant. This is a standard technique in the horticulture industry, and
requires no government regulation, at this time. This does not mean that the
government may not impose regulations in the future for standard plant cell
culture techniques. It is his responsibility to ensure all regulations are
followed for the various federal, state and locals laws that would affect the
Company's business. The Company is also subject to laws and regulation with
respect to minimum wage, overtime and other working conditions,
discriminatory practices and accommodations of persons with disabilities.
There can be no assurance that the Company's operations and profitability
will not be subject to more restrictive regulation or increased taxation by
federal, state, or local agencies.
(13) Present Licensing Status
None -- Not Applicable.
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Item 2. Management's Discussion and Analysis or Plan of Operation
A. Management's Plan of Operation
(1) In its initial approximately seven month operating period ended February
28, 1999, the Company incurred a net loss of $7,272.00 and a negative cash
flow of $7,242 from operations. It has yet to receive any revenues from
operations. An original stock offering was made pursuant to Nevada Revised
Statues Chapter 90.490. This offering was made in reliance upon an exemption
from the registration provisions of Section 5 of the Securities Act of 1993,
as amended, pursuant to Regulation D, Rule 504, of the Act. On September 22,
1998, founding shareholders purchased 3,000,000 shares of the Company's
authorized but unissued treasury stock for cash and assets. Additionally,
the Company sold Thirty-eight Thousand Three Hundred Sixty Dollars ($38,360),
767,200 shares of the Common Stock of the Company, during the Offering to
approximately fifty-six (56) shareholders in the State of Nevada. The
offering was closed February 28, 1999. As of February 28, 1999, the
Company has three million seven hundred and sixty-seven thousand two hundred
(3,767,200) shares of its $0.001 par value common voting stock issued and
outstanding which are held by approximately fifty-seven (57) shareholders of
record, including the company's founder. The Company does not have significant
cash or other material assets, nor does it have an established source of
revenues sufficient to cover its operating costs and to allow it to continue as
a going concern. It is, however, the intent of the Company to seek to raise
additional capital via a private placement offering pursuant to Regulation "D"
Rule 505 or 506 or a private placement once the Company is trading on OTC-BB.
Oleramma, Inc. is a developmental stage company. It does not anticipate any
revenues until it can develop a specialized hybrid Pima cotton seed, if ever.
Additionally, to develop this type of hybrid Pima cotton seed, it can take
eighteen (18) to twenty-four (24) months, if no problems occur in the
development process. As stated earlier in this filing, from cultivation
to maturity, cotton requires about 180 days of continuous warm weather with
adequate moisture and sunlight. It is most likely that problems will occur in
this development process. Even if the Company is successful in developing
this hybrid cotton seed, it will take additional time to prorogate the seed
for commercial use. The Company may elect to sell-off its technology if they
can develop a hybrid Pima cotton seed. Therefore, the Company does not
anticipate any revenues for at least twenty-four (24) months, if at all. At
the same time, other companies could be developing a similar product,
if they enter the market first, this would dramatically curtail any earning
potential for the Company. A superior competitive product could force the
Company out of business. The company does not have significant cash or other
material assets, nor does it have an established source of revenues sufficient
to cover its operating costs and to allow it to continue as a going concern.
The Company does not have any preliminary agreements or understandings
between the company and its stockholders/officers and directors with respect
to loans or financing to operate the company.
(2) No engineering, management or similar report has been prepared or
provided for external use by the Company in connection with the offer of its
securities to the public.
13
<PAGE>
(3) Management believes that the Company's future revenues and success
will be entirely dependent of its ability to develop a hybrid Pima cotton
seed. As such, the Company plans to devote substantially all of its current
resources to research and development. As of February 28, 1999, the Company
has yet to incur any research and development costs. However, during the
fiscal and calendar year ending December 31, 1999, the Company plans to incur
research and development expenses of approximately $10,000 with respect to
the development of the Pima cotton seed. This research and development is
described in Item 1 of this registration statement under Research and
Development Activities. The cost of such activities is not expected to be
borne by any of the Company's potential customers.
(4) The Company currently does not expect to purchase or sell any of its
facilities or equipment.
(5) Management does not anticipate any significant changes in the number of
its employees over the next approximately twelve (12) months.
B. Segment Data
As of February 28, 1999, no sales revenue has been generated by the Company.
Accordingly, no table showing percentage breakdown of revenue by business
segment or product line is included.
Item 3. Description of Property
A. Description of Property
The Company's corporate headquarters are located at 10801 E. Grove, Apache
Junction, AZ 85220.
The Company has signed a lease with its President and CEO, owner of the
property where the corporate headquarters are located to utilize these
facilities at a cost of approximately $1,000.00 per month. The property
consists of one thousand (1,000) square foot research lab; and, forty
thousand (40,000) square feet of land, all of which was formerly used as a
horticulture nursery, to conduct its operations.
Management believes that this is currently suitable as the main
administrative office and research facilities for the next twenty-four
(24) months. The Company does not have any additional facilities, and there
are currently no proposed programs for the renovation, improvement or
development of the properties currently being leased by the Company.
14
<PAGE>
B. Investment Policies
Management of the Company does not currently have policies regarding the
acquisition or sale of assets primarily for possible gain or primarily for
income. The Company does not presently hold any investments or interests in
real estate, investments in real estate mortgages or securities of or
interests in persons primarily engaged in real estate activities.
Item 4. Security Ownership of Management and Others and Certain Security
Holders
A. Security Ownership of Management and Certain Beneficial Owners
The following table sets forth information concerning stock ownership of
(i) each director, (ii) each executive officer, (iii) the directors and
officers of the Company as a group, (iv) and each person known by the
Company to own beneficially more than ten percent (10%) of the Common Stock.
<TABLE>
<CAPTION>
Amount
Title Name and Address of shares Percent
of of Beneficial Date held by of
Class Owner of Shares Position Purchased Owner Class
- ------ ---------------- --------- --------- ------- -------
<S> <C> <C> <C> <C> <C>
Common Rick Jesky (1) Chairman; CEO 09/22/98 3,000,000 79.63%
n/a Linda Pike Secretary 0 0.0
- ------------------------------------------------------------------------
Directors & Officers 3,000,000 79.63%
and Directors as a Group (2 Persons)
</TABLE>
(1) c/o Oleramma, Inc., 10801 E. Grove, Apache Junction, AZ 85220.
B. Persons Sharing Ownership of Control of Shares
No person other than Rick Jesky owns or shares the power to vote ten
percent (10%) or more of the Company's securities.
C. Non-voting Securities and Principal Holders Thereof
The Company has not issued any non-voting securities.
D. Options, Warrants and Rights
There are no options, warrants or rights to purchase securities of the
Company.
E. Parents of the Issuer
Under the definition of parent, as including any person or business entity
who controls substantially all (more than 80%) of the issuers of common
stock, the Company has no parents.
15
<PAGE>
Item 5. Directors, Executive Officers and Significant Employees
A. Directors, Executive Officers and Significant Employees
The names, ages and positions of the Company's directors and executive
officers are as follows:
<TABLE>
<CAPTION>
Name Age Position
- ---------- ---- -----------------------------------------------------------
<S> <C> <C>
Rick Jesky 49 President, Chief Executive Officer, Chief Financial Officer
and Director
Linda Pike 48 Secretary and Director
</TABLE>
The Company maintains employment agreements with Mr. Jesky and Ms. Pike, the
material provisions of these agreements includes:
a) Term. October 1, 1998 to September 30, 1999, and shall continue on a
Year-to-year basis unless terminated by the Company.
b) Compensation. None, until the Company generates a profit, after all
expenses.
c) Duties. Employee shall perform all necessary duties associated with
their jobs.
d) Best Efforts. Employee shall devote best efforts to the business to
the reasonable satisfaction of the Company.
e) Expenses. Employee is authorized to incur reasonable expenses for
furthering the Company's business.
f) Termination. 1) Agreement can be terminated for cause; 2) Company
may terminate without cause by giving 90 days written notice;
3) Employee may terminate without cause by giving 90 days written notice.
g) Confidentiality. The Employee shall not divulge to others any
information they may obtain during the course of their employment
related to the business of the Company without first obtaining written
permission of the Company.
h) Assignment of Agreement. No party may assign or otherwise transfer this
Agreement or any of its rights or obligation hereunder without the prior
written consent to such assignment or transfer by the other party hereto;
and, all the provisions of this Agreement shall be binding upon the
respective employees, delegates, successors, heirs and assigns of the
parties.
For further information concerning Employment Contracts, see Exhibit 10 I &
II, in this filing entitled Material Contract--Employment Contract.
The Employees plan to spend the necessary time to further the business of
Oleramma, Inc. (Mr. Jesky, plans to devote approximately fifteen hours per
week or as required and Ms. Pike plans to devote approximately five hours
weekly or as required). This means that a good deal of time will be necessary
to develop and cultivate the cotton seeds. Once the cotton seeds are
developed and cultivated, minimal time will be required to further the
business. Cotton requires on average about 180 days of continuous warm
weather conditions with adequate moisture and sunlight to mature. The maturity
period will require minimal Employee attention, as the batch crop will require
periodic watering. After the test batch is harvested, additional time will be
required by the Employees to test the results, and to most likely develop
another test crop.
B. Family Relationships
None - Not Applicable
C. Work Experience
The company is managed and led by Rick Jesky, who has four years experience
in the nursery business. Rick Jesky was born in Chicago, Illinois. He has
a BA Degree from University of Phoenix, and a MA Degree from Northern
Arizona University. Rick Jesky has sixteen years as an educator in the
State of Arizona. From 1993 to 1998, he has six years experience as a General
Manager for a major Phoenix nightclub/restaurant, named Studebaker's. He is
still working as an educator with Superior Court of Arizona, Pinal County. He
was the founder and sole proprietor of Oleramma Nursery. He successfully
developed and propagated an Oleander plant which won a Blue Ribbon at the 1992
Arizona State Fair. His background has been with Oleander and desert plants.
He has been a member of the Arizona Nursery Association since 1991. As
President and CEO of Oleramma, Inc., Rick Jesky has organized and formed
the company to clone and genetically engineer Pima cotton seeds. It should
be noted that this is his first endeavor in working with cotton seeds, his
horticulture background has focused on Oleander and desert plants. He does
not have prior experience in working with cotton seeds.
Linda Pike, Corporate Secretary for Oleramma, Inc. was born in Reten,
New Mexico. She is graduate from McClintock H.S., Tempe, AZ. She has a
solid financial background with Wells Fargo Bank for the past two years,
where she has worked as a Land Analyst. Previously, she worked for First
Interstate Bank, as Branch Connection supervisor, for seventeen (17) years,
until this bank was acquired by Wells Fargo Bank. She is Corporate Secretary
and Director of the Company. She has no experience in the horticulture or
nursery business, and has no experience in working with cotton seeds.
D. Involvement on Certain Material Legal Proceedings During the Last Five
Years.
(1) No director, officer, significant employee or consultant has been
convicted in a criminal proceeding, exclusive of traffic violations.
(2) No bankruptcy petitions have been filed by or against any business or
property of any director, officer, significant employee or consultant of the
Company nor has any bankruptcy petition been filed against a partnership or
business association where these persons were general partners or executive
officers.
(3) No director, officer, significant employee or consultant has been
permanently or temporarily enjoined, barred, suspended or otherwise limited
from involvement in any type of business, securities or banking activities.
16
<PAGE>
(4) No director, officer or significant employee has been convicted of
violating a federal or state securities or commodities law.
(5) The directors serve for a term of one year, as stated in the Company's
By-laws, the directors are elected at the annual meeting of the stockholders
which shall be held on the first Monday in August.
Item 6. Remuneration of Directors and Executive Officers
A. Remuneration of Directors and Executive Officers
(1) None -- Not Applicable. Due to the development stage nature of the
Company, the Company's lack of revenues, and the Company's limited financial
resources, the Company is not currently paying any of its officers or
directors for their services to the Company. Additionally, there are no
preliminary agreements or understandings with respect to payments to officers
and directors in the future.
(2) Compensation of Directors
There were no arrangements pursuant to which any director of the Company was
compensated for the period from September 21, 1998 to February 28, 1999 for
any service provided as a director. In addition, no such arrangement is
contemplated for the foreseeable future as the Company's only directors are
its current executive officers.
Item 7. Interest of Management and Others in Certain Transactions
The Company entered into a lease on March 1, 1999, with Rick Jesky, the
Company's President, to lease a 1,000 square-foot building for research
facilities and 40,000 square feet of land for the cotton growth experiment,
for approximately $1,000.00 per month. A copy of this lease has been
included as an exhibit to this registration statement.
Because of the development stage nature of the Company and its relatively
recent inception, September 21, 1998, the Company has no other relationships
or transactions.
17
<PAGE>
Part II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Stockholder Matters
A. Market Information
The Common Stock of the Company is currently not traded on the OTC Bulletin
Board or any other formal or national securities exchange. There is no
trading market for the Company's Common Stock at present and there has been
no trading market to date. At this time, management has not undertaken any
discussions, preliminary or otherwise, with any prospective market maker
concerning the participation of such market maker in the after market for
the Company's securities, but the Company may initiate such discussions in
the future following receipt of an effective date for this Registration
Statement. Being a start-up company, there is no fiscal history to disclose.
There is currently no Common Stock which is subject to outstanding options
or warrants to purchase, or securities convertible into, the Company's common
stock. Additionally, there is currently no common stock of the Company which
could be sold under Rule 144 under the Securities Act of 1933, as amended, or
that the registrant has agreed to register for sale by security holders.
Also, there is currently no common equity that is being or is proposed to be
publicly offered by the registrant, the offering of which could have a
material effect on the market price of the issuer's common equity.
B. Dividends
The Company has never paid or declared any dividend on its Common Stock and
does not anticipate paying cash dividends in the foreseeable future.
C. Holders
As of February 28, 1999, the Company has approximately 58 stockholders of
record. Broker-dealer practices in connection with transactions in "Penny
Stocks" are regulated by certain penny stock rules adopted by the Securities
and Exchange Commission. Penny stocks generally are equity securities with
a price of less than $5.00 (other than securities registered on certain
national securities exchanges or quoted on the NASDAQ system). The penny
stock rules require a broker-dealer, prior to a transaction in a penny stock
not otherwise exempt from the rules, to deliver a standardized risk
disclosure document that provides information about penny stocks and the
risk associated with the penny stock market. The broker-dealer must also
provide the customer with current bid and offer quotations for the penny
stock, the compensation of the broker-dealer and its salesperson in the
transaction, and monthly account statements showing the market value of each
penny stock held in the customer's account. In addition, the penny stock
rules generally require that prior to a transaction in a penny stock, the
broker-dealer must make a written determination that the penny stock is a
suitable investment for the purchaser and receive the purchaser's written
agreement to the transaction. These disclosure requirements may have the
effect of reducing the level of trading activity in the secondary market for
a stock that becomes subject to the penny stock rules. When the Registration
Statement becomes effective and the Company's securities become registered,
the stock will likely have a trading price of less than $5.00 per share and
will not be traded on any exchanges. Therefore, the Company's stock will
become subject to the penny stock rules and investors may find it more
difficult to sell their securities, should they desire to do so.
D. Reports to Shareholders
The Company intends to furnish its shareholders with annual reports
containing audited financial statements and such other periodic reports as
the Company may determine to be appropriate or as may be required by law.
Upon the effectiveness of this Registration Statement, the Company will be
required to comply with periodic reporting, proxy solicitation and certain
other requirements by the Securities Exchange Act of 1934.
18
<PAGE>
E. Transfer Agent and Registrar
The Transfer Agent for the shares of common voting stock of the Company
is: Shelley Godfrey, Pacific Stock Transfer Company, 5844 S. Pecos, Suite D,
Las Vegas, Nevada 89120, (702)-361-3033.
Item 2. Legal Proceedings
The Company is not currently involved in any legal proceedings nor does it
have knowledge of any threatened litigation.
Item 3. Recent Sale of Unregistered Securities
On September 22, 1998, the founder of the Company paid $8,016.00 and the
Company issued 3,000,000 shares to the one founder which were fully paid
for and non-assessable. These shares were issued by the Company under
Section 4(2) of the Securities Act of 1933. On February 19, 1999, the
Company received a Notice of Effectiveness for a public offering of
securities from the Secretary of State, Securities Division, State of
Nevada. On February 28, 1999, the Company completed this public offering
of shares of Common Stock of the Company pursuant to Regulation D, Rule 504
of the Securities Act of 1933, as amended, whereby it sold 767,200 shares
of Common Stock to approximately 56 unaffiliated shareholders of record,
none of whom were or are officers or directors of the Company. On or about
March 1, 1999, the Company filed five copies, one of which was an original,
of an amended Form D Notice of Sales Pursuant to Regulation notifying the
Securities and Exchange Commission that the offering was exempt from the
registration provisions of Section 5 of the Act pursuant to Regulation D,
Rule 504 of such same Act. As of April 3, 1999, the Company has 3,767,200
shares of Common Stock held by 57 shareholders of record.
19
<PAGE>
The 57 investors in the Rule 504 offering include the following:
<TABLE>
<CAPTION>
Shares
Shareholders Purchased
------------------------ ----------
<S> <C> <C>
1. BEANS, VINES & HOPS, INC 133,000
2. SCOTT BELFER 1,500
3. ANGELA BENDA 500
4. DAVID BENEDETT1 39,200
5. BRUCE A BERTZYK 100
6. JOEY BERTZYK 100
7. BERT BLEVINS 2,000
8. MATT BLEVINS 2,000
9. SANDRA K BLEVINS 2,000
10. TINA BLEVINS 2,000
11. KRISTA BLEVINS 100
12. BERT K BLEVINS II 2,000
13. BRANDI BOWMAN 1,000
14. KENT BUTLER 500
15. TED CAMPBELL II 2,000
16. TONY CAMPOS 2,000
17. THOMAS CHAVEZ 500
18. FRANK DANESI JR 109,100
19. JUSTINE M DANIELS 1,000
20. KERRY A DARBY 2,000
21. PATRICK DEPARINI 500
22. MARK DESTEFANO 8,000
23. EDWARD DESTEFANO 500
24. WILLIAM DILLARD 1,100
25. KEN DURR 500
26. ROGER ELLSWORTH 500
27. GLEN E GREENFELDER JR 2,100
28. MIKE HERNANDEZ 500
29. TIM HILL 1,000
30. KEITH JARVELA 82,000
31. RICK JESKY 3,000,000
32. SOCORRA JIMENEZ 1,000
33. DENISE M KOLASO 1,500
34. B.K. KOSMATKA 1,500
35. ANDREW KRATZ 37,000
36. CASAUNDRA P MARTIN 2,100
37. ANTHONY M MELLO 100,000
38. HEATHER J. MELLO 100,000
39. JON MOODY 1,000
40. MQ HOLDINGS 102,000
41. MARGARET L MULLEN 400
42. WILLIAM F MULLEN 400
43. DERIC MURCER 500
44. ZACHERY MURCER 500
45. MYDECK CORP 500
46. JAY NANCE 4,000
47. PAULINE PACQUET 1,000
48. JACQUELINE PAPPAS 1,000
49. JEFFREY PUCKETT 500
50. SYNERGY CAPITAL CORP 1,000
51. KATHLEEN THOMPSON 500
52. TIGER POET ENTERPRISES, INC 1,000
53. SETH TOLIVER 1,000
54. VENTURCAP PARTNERS, INC 4,000
55. RALPH VITIELLO 2,000
56. MATTHEW WINTHER 1,500
57. LINDSAY WURZER 2,000
TOTAL: 3,767,200
</TABLE>
20
<PAGE>
Item 4. Description of Securities
A. Common Stock
(1) Description of Rights and Liabilities of Common Stockholders
i. Dividend Rights - The holders of outstanding shares of common stock are
entitled to receive dividends out of assets legally available therefore at
such times and in such amounts as the Board of Directors of the Company may
from time to time determine.
ii. Voting Rights - Each holder of the Company's common stock are entitled
to one vote for each share held of record on all matters submitted to the
vote of stockholders, including the election of directors. All voting is
noncumulative, which means that the holder of fifty percent (50%) of the
shares voting for the election of the directors can elect all the directors.
The board of directors may issue shares for consideration of previously
authorized but unissued common stock without future stockholder action.
iii. Liquidation Rights - Upon liquidation, the holders of the common stock
are entitled to receive pro-rata all of the assets of the Company available
for distribution to such holders.
iv. Preemptive Rights - Holders of common stock are not entitled to
preemptive rights.
v. Conversion Rights - No shares of common stock are currently subject to
outstanding options, warrants, or other convertible securities.
vi. Redemption rights - no redemption rights exist for shares of common
stock.
vii. Sinking Fund Provisions - No sinking fund provisions exist.
viii. Further Liability For Calls - No shares of common stock are subject to
further call or assessment by the issuer. The Company has not issued stock
options as of the date of this registration statement.
(2) Potential Liabilities of Common Stockholders to State and Local Authorities
No material potential liabilities are anticipated to be imposed on
stockholders under state statues. Certain Nevada regulations, however,
require regulation of beneficial owners of more than 5% of the voting
securities. Stockholders that fall into this category, therefore, may be
subject to fines in circumstances where non-compliance with these
regulations are established.
(b) Debt Securities
The Company is not registering any debt securities, nor are any outstanding.
(c) Other Securities To Be Registered
The Company is not registering any security other than its common stock.
21
<PAGE>
Item 5. Indemnification of Directors and Officers
THE ARTICLES OF INCORPORATION OF THE COMPANY PROVIDE FOR INDEMNIFICATION OF
EMPLOYEES AND OFFICERS IN CERTAIN CASES. INSOFAR AS INDEMNIFICATION FOR
LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933 MAY BE PERMITTED TO
DIRECTORS, OFFICERS OR PERSONS CONTROLLING THE COMPANY PURSUANT TO THE
FOREGOING PROVISIONS, THE COMPANY HAS BEEN INFORMED THAT IN THE OPINION OF
THE SECURTIES AND EXCHANGE COMMISSION SUCH NDEMNIFICATION IS AGAINST PUBLIC
POLICY AS EXPRESSED IN THE ACT AND IS THEREFORE UNENFORCEABLE.
22
<PAGE>
Part F/S
Item 1. Financial Statements
The following documents are filed as part of this report:
a) Oleramma, Inc.
Page
<TABLE>
<S> <C>
Financial Statements
Report of Barry L. Friedman, P.C., CPA F-1
Balance Sheet as of February 28, 1999 F-2
Statement of Operations for the period from
September 21, 1998 through February 28, 1999 F-3
Statement of Stockholder's Equity for the period from
September 21, 1998 through February 28, 1999 F-4
Statement of Cash Flows for the period from
September 21, 1998 through February 28, 1999 F-5
Notes to Financial Statements F-6
</TABLE>
b) Interim Financial Statements are not provided at this time as they are
not applicable at this time
c) Financial Statements of Businesses Acquired or to be Acquired are not
provided at this time as they are not applicable at this time.
d) Proforma Financial Information is not provided at this time as it is not
applicable at this time.
Item 2. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure
None--Not Applicable
23
<PAGE>
Oleramma, Inc.
(A Development Stage Company)
FINANCIAL STATEMENTS
February 28, 1999
December 31, 1998
<PAGE>
OLERAMMA
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE #
<S> <C>
FINANCIAL STATEMENTSS
INDEPENDENT AUDITORS REPORT 1
ASSETS 2
LIABILITIES AND STOCKHOLDERS' EQUITY 3
STATEMENT OF OPERATIONS 4
STATEMENT OF STOCKHOLDERS' EQUITY 5
STATEMENT OF CASH FLOWS 6
NOTES TO FINANCIAL STATEMENTS 7-11
</TABLE>
24
<PAGE>
BARRY L. FRIEDMAN, P.C.
Certified Public Accountant
1582 Tulita Drive Office (702) 361-8414
Las Vegas, NV 89123 FAX NO. (702) 896-0278
INDEPENDENT AUDITORS' REPORT
Board of Directors March 22, 1999
Oleramma, Inc.
Apache Junction, Arizona
I have audited the accompanying Balance Sheets of Oleramma, Inc.
(A Development Stage Company), as of February 28, 1999, December 31, 1998,
and the related statements of operations, stockholders' equity and cash
flows for the period January 1, 1999 to February 28, 1999, and September 21,
1998, (inception) to December 31, 1998. These financial statements are the
responsibility of the Company's management. My responsibility is to
express an opinion of these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. 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 account principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audit provides a reasonable basis
for my opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Oleramma, Inc. (A
Development Stage Company), as of February 28, 1999, December 31, 19098,
and the related statements of operations, stockholders' equity and cash
flows for the period January 1, 1999 to February 28, 1999, in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note #5 to the
financial statements, the Company has suffered recurring losses from
operations and has no established ability to continue as a going concern.
Management's plan in regard to these matters is described in Note #5. These
financial statements do no include any adjustments that might result from the
outcome of this uncertainty.
/s/ Barry L. Friedman
- -------------------------
Barry L. Friedman
Certified Public Accountant
F-1
<PAGE>
Oleramma, Inc.
(A Development Stage Company)
BALANCE SHEET
<TABLE>
<CAPTION>
ASSETS
February December
28, 1999 31, 1998
--------- ----------
<S> <C> <C>
CURRENT ASSETS: $ 39,134 $ 1,193
TOTAL CURRENT ASSETS: $ 39,134 $ 1,193
OTHER ASSETS:
Organization Costs $ 303 $ 342
TOTAL OTHER ASSETS: $ 303 $ 342
TOTAL ASSETS $ 39,464 $ 1,535
</TABLE>
See accompanying notes to financial statements & audit report
F-2
<PAGE>
Oleramma, Inc.
(A Development Stage Company)
BALANCE SHEET
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
February December
28, 1999 31, 1998
----------- -----------
<S> <C> <C>
CURRENT LIABILITIES
Officers Advances (Note #5) $ 360 $ 360
TOTAL CURRENT LIABILITIES: $ 360 $ 360
STOCKHOLDERS' EQUITY: (Note #4)
Preferred stock
Par value $0.001
Authorized 5,000,000 shares
Issued and outstanding at
February 28, 1999 None $ 0 $ 0
Common stock
Par value $0.001
Authorized 20,000,000 shares
Issued and outstanding at
December 31, 1998 -
3,000,000 shares 3,000
February 28, 1999 -
3,767,200 shares 3,767
Additional Paid-In Capital 42,609 5,016
ACCUMULATED LOSS -7,272 -6,841
TOTAL STOCKHOLDERS' EQUITY $ 39,104 $ 1,175
- ---------------------------------------------------------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY: $39,464 $ 1,535
</TABLE>
See accompanying notes to financial statements and audit report
F-3
<PAGE>
Oleramma, Inc.
(A Development Stage Company)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
Jan. 1 Sept 21, Sept 21, 1998
1999, to 1998, to (Inception)
Feb. 28 Dec. 31, to Feb. 28,
1999 1998 1999
<S> <C> <C> <C>
INCOME:
Revenue $ 0 $ 0 $ 0
EXPENSES:
Accounting $ 0 $ 800 $ 800
Amortization $ 12 $ 18 $ 30
Bank Charges $ 14 $ 23 $ 37
Filing Fees $ 405 $ 0 $ 405
Consulting Fee $ 0 $ 6,000 $ 6,000
TOTAL EXPENSES: $ 431 $ 6,841 $ 7,272
NET PROFIT/LOSS (-) $ -431 $ -6,841 $ -7,272
Net Profit/Loss (-)
per weighted share
(Note 1): $ -.0001 $ -.0023 $ -.0024
Weighted average
Number of common
shares outstanding: 3,013,003 3,000,000 3,004,239
</TABLE>
See accompanying notes to financial statements and audit report
F-4
<PAGE>
Oleramma, Inc.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Additional Accumu-
Common Stock paid-in lated
Shares Amount Capital Deficit
--------- -------- --------- ---------
<S> <C> <C> <C> <C>
September 22,
1998 issued for
cash 3,000,000 $ 3,000 $ 5,016 $ 0
Net loss,
September 21,
1998 (inception)
to Dec. 31, 1998 -6,841
- -----------------------------------------------------------------------
Balance,
Dec. 31, 1998 3,000,000 $ 3,000 $ 5,016 -6,841
Feb 28, 1999
Issued from
Sale of
Public Offering 767,200 767 37,591
Net Loss,
Jan 1, to
Feb 28, 1999 - 431
---------------------------------------------------------------
Balance,
Feb 28, 1999 3,767,200 $ 3,767 $ 42,609 $ -7,272
</TABLE>
See accompanying notes to financial statements and audit report
F-5
<PAGE>
Oleramma, Inc.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS
Jan. 1 Sept 21, Sept 21, 1998
1999, to 1998, to (Inception)
Feb. 28 Dec. 31, to Feb. 28,
1999 1998 1999
---------- ---------- -------------
<S> <C> <C> <C>
Cash Flows from
Operating Activities
Net Loss $ -431 $ -6,841 $ -7,272
Adjustment to
Reconcile net loss
To net cash provided
by operating
Activities
Amortization +12 +18 +30
Changes in assets and
Liabilities:
Organization Costs 0 -360 -360
Officers Advances 0 +360 +360
--------------------------------------------
Net cash used in
Operating activities: $ -419 $ -6,823 $ -7,242
Cash Flows from
Investing Activities: 0 0 0
Cash Flows from
Financing Activities:
Issuance of Common
Stock for Cash +38,360 +8,016 +46,376
---------------------------------------------
Net Increase (decrease) $ +37,941 $ +1,193 $ +39,134
Cash,
Beginning of period: 1,193 0 0
---------------------------------------------
Cash, End of Period: $ 39,134 $ 1,193 $ 39,134
</TABLE>
See accompanying notes to financial statements and audit report
F-6
<PAGE>
Oleramma, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
February 28, 1999, and December 31, 1998
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized September 21, 1998, under the laws of the State
of Nevada as Oleramma, Inc. The Company currently has no operations and in
accordance with SFAS #7, is considered a development company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual method.
Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
Cash and equivalents
The Company maintains a cash balance in a non-interest-bearing bank that
currently does not exceed federally insured limits. For the purpose of the
statements of cash flows, all highly liquid investments with the maturity of
three months or less are considered to be cash equivalents. There are no
cash equivalents as of February 28, 1999.
F-7
<PAGE>
Oleramma, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
February 28, 1999, and December 31, 1998
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes
Income taxes are provided for using the liability method of accounting in
accordance with Statement of Financial Accounting Standards No. 109
(SAFES #109) (Accounting from Income Taxes. A deferred tax asset or
liability is recorded for all temporary difference between financial and
tax reporting. Deferred tax expense (benefit) results from the net change
during the year of deferred tax assets and liabilities.
Organization Costs
Costs incurred to organize the Company are being amortized on a
straight-line basis over a sixty-month period.
Loss Per Share
Net loss per share is provided in accordance with Statement of Financial
Accounting Standards No. 128 (SFAS #128) (Earnings Per Share. Basic loss
per share is computed by dividing losses available to common stockholders
by the weighted average number of common shares outstanding during the
period. Diluted loss per share reflects per share amounts that would have
resulted if dilative common stock equivalents had been converted to common
stock. As of February 28, 1999, the Company had no dilative common stock
equivalents such as stock options.
Year End
The Company has selected December 31st as its year-end.
F-8
<PAGE>
Oleramma, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
February 28, 1999, and December 31, 1998
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNT POLICIES (CONTINUED)
Year 2000 Disclosure
Computer programs that have time sensitive software may recognize a date
using (00) as the year 1900 rather than the year 2000. This could result in
a system failure or miscalculations causing disruption of normal business
activities.
Based on a recent and ongoing assessment, the Company has determined that
any purchased software will be off-the-shelf software and will be certified
Year 2000 compatible for all of its computing requirements. The Company
presently believes that with modifications to existing off-the-shelf software
or conversions to new software, the Year 2000 issue will not pose significant
operational problems and will not materially affect future financial results.
The Company currently anticipates purchasing new off-the-shelf Year 2000
compatible software in the near future, which is prior to any anticipated
impact on its operating systems. The total cost of this new software is not
anticipated to be a material expense to the Company at this time. However,
there can be no guarantee that these new off-the-shelf software products will
be adequately modified which could have a material adverse effect on the
Company's results of operations.
F-9
<PAGE>
Oleramma, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
February 28, 1999, and December 31, 1998
NOTE 3 - INCOME TAXES
There is no provision for income taxes for the period ended February 28,
1999, due to the net loss and no state income tax in Nevada, the state of
the Company's domicile and operations. The Company's total deferred tax
asset as of February 28, 1999 is as follows:
Net operation loss carry forward $ 6,823
Valuation allowance $ 6,823
Net deferred tax asset $ 0
The federal net operation loss carry forward will expire in 2018.
This carry forward may be limited upon the consummation of a business
combination under IRC Section 381.
NOTE 4 - STOCKHOLDERS' EQUITY
Common Stock
The authorized common stock of the corporation consists of 20,000,000 shares
with a par value of $0.001 per share.
Preferred Stock
The authorized preferred stock of the corporation consists of 5,000,000
shares with a par value of $0.001 per share.
On September 22, 1998 the company issued 3,000,000 shares of its $0.001 par
value common stock for cash of $8,016.00 to a director.
On February 28, 1999, the Company completed a public offering that was
registered with the State of Nevada pursuant to N.R.S. 90.490 and was
exempt from federal registration pursuant to Regulation D, Rule 504 of the
Securities Act of Stock at a price of $0.05 per share for a total amount
raised of $38,360.
F-10
<PAGE>
Oleramma, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
February 28, 1999, and December 31, 1998
NOTE 5 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company does not have significant cash or other
material assets, nor does it have an established source of revenues
sufficient to cover its operating costs and to allow it to continue as a
going concern. It is the intent of the Company to seek to raise additional
capital via a private placement offering pursuant to Regulation D, Rule 505,
once the company is trading on the OTC-BB. Until that time, the
stockholders/officers and or directors have committed to advancing the
operating costs of the Company interest free.
NOTE 6 - RELATED PARTY TRANSACTIONS
The Company entered into a lease on March 1, 1999, with Rick Jesky, the
company's president, to lease a 1,000 square-foot building for research
facilities and 40,000 square feet of land for the cotton growth experiment,
for approximately $1,000.00 a month. An officer of the corporation provides
office services without charge. Such costs are immaterial to the financial
statements and accordingly, have not been reflected t herein. The officers
and directors of the Company are involved in other business activities and
may, in the future, become involved in other business opportunities. If a
specific business opportunity becomes available, such persons may face a
conflict in selecting between the Company and their other business interests.
The Company has not formulated a policy for the resolution of such conflicts.
NOTE 7 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
shares of common or preferred stock.
F-11
<PAGE>
Part III
Item 1. Exhibit Index
- -----------------------------------------------------------------------------
(3) Articles of Incorporation & By-Laws
3.1 Articles of Incorporation*
3.2 By-Laws*
(10) Material Contracts
10.1 Premise Lease*
10.2 Rick Jesky Employment Agreement*
10.3 Linda Pick Employment Agreement*
(23) Consent Experts
23.1 Consent of Barry L. Friedman, P.C., CPA*
(27) Financial Data Schedule
27.1 Financial Data Schedule*
(29) Additional Exhibits (State of Nevada Public Offering Registration)
29.1 Agent of the Issuer Registration*
29.2 Notice of Effectiveness*
* Previously filed as an exhibit to the Company's Form 10-SB.
25
<PAGE>
DEFINITIONS (used in this Filing):
1. Bacterial chromosome. A circular molecule of DNA that functions as a
self-replicating genetic element (replican.)
2. Basic Seed. The term "basic seed" means the seed planted to produce
certified or commercial seed.
3. Breeder. The "breeder" means the person who directs the final breeding
creating a variety or who discovers and develops a variety. If the
action are conducted by an agent on behalf of a principal, the principal,
rather than the agent, shall be considered the breeder. The term does
not include a person who redevelops or rediscovers a variety the
existence of which is publicly known or a matter of common knowledge.
4. Cytoplasm. The protoplasm exclusive of that with the nucleus.
5. DNA (deoxyribonucleic acid). The carrier of genetic information (genes)
in cells, composed of chains of phosphate, sugar molecules (deoxyriose),
purine and pyrimidine bases, the DNA molecule is capable of self-
replication.
6. DNA vector. A carrier; an organism, that carries pathogens from one
one plant to another.
7. DNA vehicle. A plasmid possessing a function replicator site, and
containing a genetic market to facilitate its selective recognition, used
to transport foreign genes into recipient cells.
8. Essentially Derived Variety.
a) In General, the term "essentially derived variety" means a variety
that:
(i) is predominately derived from another variety (referred to in
this paragraph as the "initial variety") or from a variety that
is predominantly derived from the initial variety, which retaining
the expression of the essential characteristics that result from
the genotype or combination of genotypes of the initial variety.
(ii) is clearly distinguishable from the initial variety; and
(iii) except for differences that result from the act of derivation,
conforms to the initial variety in the expression of the essential
characteristics that result from the genotype or combination of
genotypes of the initial variety.
b) Methods. An essentially derived variety may be obtained by the
selection of a natural or induced mutant or of a somaclonal variant,
the selection of a variant individual from plans of the initial
variety, backcrossing, transformation by genetic engineering, or
other method.
9. Gram-negative. Bacteria that do not stain with a Gram stain.
10. Gram stain. A stain technique that involves gentian violet, an iodine
solution and alcohol or acetone. Used in classifying bacteria.
11. Herbicide enzyme. A selective chemical compound injurious to only
certain kinds of plants while not harming others.
12. Kind. The term "kind means one or more related species or subspecies
singly or collectively known by one common name, such as cotton.
26
<PAGE>
13. Nucleus. The spheroidal structure present in most cells which contains
chromosomes.
14. Passenger related DNA. A DNA segment that is spliced into a DNA vehicle
for subsequent cloning.
15. Pathogenicity. Producing disease or toxic symptoms.
16. Plant genome. The complete set of chromosomes, with their associated
genes.
17. Plasmid. An extrachromosomal, independently replicating, small, circular
DNA molecule, found in a variety of bacterial species that generally
confers some evolutionary advantage to the host cell.
18. Protoplast. A structural unit of protoplasm; all the living (protoplasmic)
material of a cell exclusive of the cell wall. The two principal parts
are nucleus and cytoplasm.
19. Protoplasm. The substance within the plasma membrane of a cell; the
nucleus and surrounding cytoplasm. An inclusive term for all living
material of a cell.
20. Seed. The term "seed" with respect to a tuber propagated variety, means
the tuber or the part of the tuber used for propagation.
21. Sexually reproduced. The term "sexually reproduced" includes any
production of a variety by seed, but does not include the production of
a variety by tuber propagation.
22. Specific restriction enzyme site. Any one of many enzymes that cleave
foreign DNA molecules at specific recognition sites. The enzymes are
named by a symbol that indicates the bacterial species from which they
are isolated.
23. Tuber propagated. The term "tuber propagated" means propagated by tuber
or a part of a tuber.
24. Variety. The term "variety" means a plant grouping within a single
botanical taxon of the lowest known rank, that, without regard to
whether the conditions for plant variety protection are fully met, can
be defined by the expression of the characteristics resulting from a
given genotype or combination of genotypes, distinguished from any other
plant grouping by the expression of at least one characteristic and
considered as a unit with regard to the suitability of the plant grouping
for being propagated unchanged. A variety may be represented by seed,
transplants, plants, tubers, tissue culture plantlets, and other matter.
27
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
Oleramma, Inc.
--------------------
(Registrant)
Date: August 31, 1999
---------------
By:
/s/ Rick Jesky
- ----------------------
Rick Jesky
Chairman of the Board, President, Chief Executive Officer, and CFO
By:
/s/ Linda Pike
- ----------------------
Linda Pike, Director, Secretary
28
<PAGE>
