As filed with the Securities and
Exchange Commission on July 1, 2015
Registration
No. 333-_________
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
S-1
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF 1933
RMR
Industrials Inc.
(Exact name of Registrant as specified in its charter)
Nevada
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46-0750094
|
(State or other jurisdiction of |
(I.R.S. Employer Identification No.) |
incorporation or organization) |
|
9595 Wilshire
Blvd., Suite 310
Beverly Hills, CA 90212
Telephone: (310) 409-4113
(Address and
Telephone Number of Registrant’s Principal
Executive Offices and Principal Place of Business)
Incorp Services,
Inc.
2360 Corporate Circle, Suite 400
Henderson, NV 89074
Telephone: (702) 866-2500
(Name, Address,
and Telephone Number for Agent of Service)
Copies to:
Mark C. Lee
Greenberg
Traurig, LLP
1201 K Street, Suite 1100
Sacramento, CA 95814
Telephone: (916) 442-1111
Approximate date of commencement
of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered
on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, please
check the following box: ¨
If this form is filed to register
additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this form is a post-effective
amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. ¨
If this form is a post-effective
amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. ¨
Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.
Large accelerated filer ¨ |
Accelerated Filer ¨ |
Non-accelerated filer (do not check if smaller reporting company) ¨ |
Smaller reporting company x |
CALCULATION
OF REGISTRATION FEE
Title of Each Class of Securities
to be Registered | |
Proposed
Maximum Aggregate Offering Price (1) | | |
Amount of
Registration Fee | |
| |
| | |
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Class B Common Stock (2) | |
$ | 20,000,000.00
| | |
$ | 2,324.00
| |
Total | |
$ | 20,000,000.00
| | |
$ | 2,324.00
| |
|
(1) |
Estimated solely for purposes of calculating the registration
fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended (the “Securities Act”). |
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|
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(2) |
Represents the 20,000,000
shares of Class B Common Stock to be issued by the Company. |
In the
event of stock splits, stock dividends, or similar transactions involving the Registrant’s Class B Common Stock, the number
of shares registered shall, unless otherwise expressly provided, automatically be deemed to cover the additional securities to
be offered or issued pursuant to Rule 416 promulgated under the Securities Act of 1933, as amended (the “Securities Act”).
The registrant hereby amends
this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
The information
in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are
not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
PRELIMINARY
PROSPECTUS SUBJECT TO COMPLETION DATED JULY___, 2015
RMR Industrials
Inc.
_________
Shares of Class B Common Stock
We are offering __________ of our
shares of Class B Common Stock.
Our Class B Common Stock is currently
quoted on the OTCQB under the symbol “RMRI”. No shares of our Class B Common Stock have publicly traded on the OTCQB
to date. The offering price of our Class B Common Stock will be $___ per share. For factors considered in determining the public
offering price of the shares of Class B Common Stock offered hereby, see “Determination of Offering Price.”
We are an “emerging growth
company” under applicable Securities and Exchange Commission rules and will be subject to reduced public company reporting
requirements.
Investing in our Class B Common
Stock involves a high degree of risk. You should review carefully the risks and uncertainties described under the heading “Risk
Factors” beginning on page __ of this prospectus and under similar headings in the other documents that are incorporated
by reference into this prospectus.
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Per Share | | |
Sale Total | |
Public Offering Price | |
$ | | | |
$ | | |
Underwriting Discounts and Commissions | |
$ | | | |
$ | | |
Proceeds to RMR Industrials Inc. | |
$ | | | |
$ | | |
We have granted to the underwriter
an option to purchase up to __________ additional shares of our Class B Common Stock to cover over-allotments, if any, within
30 days of the date of this prospectus.
Neither the Securities and Exchange
Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The underwriter
expects to deliver the shares of our Class B Common Stock to purchasers on or about
, 2015.
The
date of this prospectus is , 2015.
Table of
Contents
You should rely only on the information
contained or incorporated by reference in this prospectus and in any free writing prospectus that we have authorized for use in
connection with this offering. We have not authorized any other person to provide you with additional or different information.
If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell
these securities in any jurisdiction where an offer or sale is not permitted. Our business, financial condition, results of operations
and prospects may have changed since that date.
Some of the industry and market
data contained in or incorporated by reference in this prospectus are based on independent industry publications or other publicly
available information, while other information is based on our internal sources. Although we believe that each source is reliable
as of its respective date, the information contained in such sources has not been independently verified, and neither we nor the
underwriters can assure you as to the accuracy or completeness of this information.
As used throughout this prospectus,
the terms “the Company”, “RMRI”, or “we,” “our” and “us” means RMR
Industrials Inc. and its wholly-owned subsidiary, RMR IP Inc., unless the context otherwise requires.
[All trade names used in this
prospectus are either our registered trademarks or trademarks of their respective holders. Throughout this prospectus, we refer
to various trademarks, service marks and trade names that we use in our business. We also have a number of other registered trademarks,
service marks and pending applications relating to our products. Other trademarks and service marks appearing in this prospectus
are the property of their respective holders.]
SUMMARY
This summary highlights certain
information contained elsewhere in this prospectus or incorporated by reference herein. This summary does not contain all of the
information that you should consider before investing in our Class B Common Stock. You should read the entire prospectus carefully,
including the risks related to our business and investing in our Class B Common Stock discussed under “Risk Factors”
beginning on page __ and the other information and documents incorporated by reference into this prospectus, including our consolidated
financial statements and related notes thereto.
Overview
Our strategy is to become an owner,
producer and distributor of certain industrial minerals, including but are not limited to: feldspar, talc, mica, bentonite, vermiculite,
frac sand, aggregates, antimony, barite, silica, ball clays, graphite, sulfur and zeolite. We also plan to become an owner, producer
and distributor of certain chemicals, including but not limited to: glycols, ethanolamines, methanol, antifreeze, biocides, corrosion
inhibitors, demulsifiers, desalting compounds and dispersants. The experienced management team of RMR Industrials Inc. brings
a multi-cycle successful track record of discovering, financing and operating off-market natural resource businesses.
We have not yet completed the acquisition
of any industrial assets or entered into any types of asset purchase agreements, however, we are engaged in advanced negotiations
with two companies for which we established a preliminary purchase price and key terms. One company is a magnesium silicate producer
and supplier for the ceramic, paint, plastic, roofing, composite wood and agricultural industries in North America and the other
company formulates production, drilling and specialty chemicals while also providing contract blending and reclamation services
to the energy industry.
RMR IP Inc. (“RMR IP”)
was incorporated on October 15, 2014 as a Nevada corporation and was formed to acquire and consolidate complimentary industrial
commodity assets through capitalizing on the volatile oil market, down cycles in commodity markets, and other ancillary opportunities.
On November 17, 2014, Rocky Mountain
Resource Holdings, Inc. (the “RMRH”) became our majority shareholder by acquiring 5,200,000 shares of our common stock
(the “Shares”), or 69.06% of the issued and outstanding shares of our common stock, pursuant to stock purchase agreements
with Messrs. El Maraana and Salah Blal, our former officers and directors. The Shares were acquired for an aggregate purchase
price of $357,670.
On December 8, 2014, we changed
our name to “RMR Industrials, Inc.” in connection with the change in our business plan.
On February 26, 2015, we amended
and restated our articles of incorporation to authorize the issuance of 4,050,000,000 shares, 2,000,000,000 shares of which
shall be Class A Common Stock, par value $0.001 per share, 2,000,000,000 shares of which shall be Class B Common Stock, par value
$0.001 per share, and 50,000,000 shares of which shall be Preferred Stock, par value $.001 per share.
On February
27, 2015, we entered into and consummated a merger transaction pursuant to an Agreement and Plan of Merger (the “Merger
Agreement”) by and among the Company, OLYB Acquisition Corporation, a Nevada corporation and wholly-owned subsidiary of
the Company (“Merger Sub”) and RMR IP. In accordance with the terms of Merger Agreement, on the Closing Date, Merger
Sub merged with and into RMR IP (the “Merger”), with RMR IP surviving the Merger as our wholly-owned subsidiary.
Target Markets
We plan to acquire and
consolidate complementary industrial commodity assets through capitalizing on the volatile oil markets, down cycles in commodity
markets, and other ancillary opportunities. Typically these assets are the core manufacturer and supplier of specific bulk commodity
minerals, chemicals and petrochemicals distributed to the global manufacturing industry.
We believe that the
cash flows generated by the businesses that we will operate will provide us with the ability to pursue further acquisitions in
order to build on our existing segments, or to establish a new business platform for future growth. To further supplement our
capital requirements for future potential acquisitions, we intend to utilize a combination of debt and equity financings, including
traditional loans from financial institutions. Our primary financial criteria focus on accretive companies with positive cash
flow in the industrial commodities sectors. These companies should generate annual cash flow of $500,000 to $15,000,000 or annual
revenues greater than $10,000,000. For consolidating businesses within the same sector and business plan, our strategic criteria
will be focused on not only acquiring historical cash flows but also incremental products, services, proprietary technology, regional
access, new customers or unique advantages.
Potential Competitive Strengths
We believe our process to discover,
finance and operate unique natural resource and industrial assets provides us a competitive advantage to achieve critical mass
through acquisition of high-growth assets. Our principals have extensive experience in investing in and operating natural resource
assets. We believe our potential competitive strengths to be the following:
| · | Proprietary
Acquisition Sources – Management has a long-standing track record of discovering
unique assets pertinent to our current business strategy. |
| · | Public
Company Status - Our status as a public company will make us an attractive business
combination partner to target businesses, and will provide greater access to capital
and an increased company profile. |
| · | Financial
Position - We offer target businesses a variety of financial scenarios, such as the
option of providing the owners of a target business with shares in a public company,
and a public means to sell such shares, providing cash for stock, and providing capital
for the potential growth and expansion of its operations or strengthening its balance
sheet by reducing its debt ratio. |
| · | Management
Operating and Investing Experience - The members of our management team have developed
a broad international network of contacts and corporate relationships which we believe
will serve as a useful source of investment opportunities. |
Growth Strategy
On June 26, 2015, our wholly-owned
subsidiary, United States Talc and Minerals Inc. (“USTM”), entered into a non-binding financing arrangement with Auramet
International LLC (“Auramet”), whereby subject to certain conditions, including but not limited to, the approval of
a satisfactory acquisition candidate, technical due diligence and an executable acquisition purchase agreement, Auramet will loan
USTM the principal amount of $12,000,000. The maturity date of such note will be on the second anniversary of the closing
and such note will accrue interest at a rate of 15% annually. The note shall be secured by a first priority lien on all
the assets of USTM. We have also entered into a non-binding mezzanine financing arrangement with Auramet, whereby subject
to meeting certain conditions, Auramet will loan USTM an additional principal amount of $5,000,000. The maturity date of such
note will be on the second anniversary of the closing and such note will accrue interest at a rate of 15% annually. The note shall
be secured by a second priority lien on certain assets of USTM. There are no assurances that USTM will enter into binding loan
agreements with Auramet, and upon terms that are ultimately satisfactory to us. Any such failure will result in USTM and us having
to seek financing from other potential sources.
Our strategy focuses on the formation,
development and growth of scalable natural resource enterprises through leveraging our deep industry relationships to facilitate
off-market acquisitions of private assets, including family-owned assets, in the midst of both assets and generational transitions.
We plan to create consistent and predictable cash flows from our various businesses alongside new and accretive areas of growth,
the combination of which we believe creates a lower risk environment.
To seek further growth, we place
a premium on technology enablers, which we believe can result in exponential growth in markets with linear growth patterns tied
to cyclical demands for products and services. Technology enablers include advances in enterprise systems in information technology,
optimization of equipment and man hours and new applications and/or modification of materials for new material applications. The
robustness of today’s information technology systems permit a reasonable capital expense to manage dynamic sales channels
while simultaneously introducing our product and service offerings into the supply chains of the world’s top industrial
companies. We intend to capture market share and provide services to the largest customers in the global manufacturing and supply
industries. With the use of these technological advances, our goal is to eliminate unplanned down time at customer facilities,
therefore increasing efficiency and profit margins.
Summary
of Risk Factors
Our business is subject to numerous
risks, which are described in the section entitled “Risk Factors” immediately following this prospectus summary on
page [__]. You should carefully consider these risks before making an investment. In particular, the following considerations,
among others, may offset our potential competitive strengths or have a negative effect on our growth strategy, which could cause
a decline in the price of our Class B Common Stock and result in a loss of all or a portion of your investment:
| · | We
have incurred losses in prior periods and may incur losses in the future. |
| · | Our
future is dependent upon our ability to obtain financing. If we do not obtain such financing,
we may have to cease our activities and investors could lose their entire investment. |
| · | Our
cash flows and capital resources may be insufficient to make required payments under
the management services agreement with Industrial Management LLC. |
| · | Because
we may never earn revenues from our operations, our business may fail and investors may
lose all of their investment in our Company. |
| · | Our
limited operating history makes evaluating our business and future prospects difficult,
and may increase the risk of your investment. |
| · | If
we are unable to identify, fund and execute new acquisitions, we will not be able to
execute a key element of our business strategy. |
| · | Loss
of key members of our management could disrupt our business. |
| · | The
industries in which we compete are highly competitive, and we may not be able to compete
effectively with our competitors that have greater financial resources, which could have
a material adverse effect on our business, results of operations and financial condition. |
| · | Increases
in the price of our primary raw materials may decrease our profitability and adversely
affect our liquidity, cash flow, financial condition and results of operations. |
| · | The
Company will operate in a global, competitive environment which gives rise to operating
and market risk exposure. |
| · | Disruptions
in production at our manufacturing facilities, both planned and unplanned, may have a
material impact on our business, results of operations and/or financial condition. |
| · | We
will expend large amounts of money for environmental compliance in connection with our
operations. |
| · | We
are subject to environmental clean-up costs, fines, penalties and damage claims that
have been and continue to be costly. |
| · | Increased
concerns regarding the safe use of chemicals in commerce and their potential impact on
the environment have resulted in more restrictive regulations from local, state and federal
governments and could lead to new regulations. |
| · | We
work with dangerous materials that can injure our employees, damage our facilities and
disrupt our operations. |
| · | We
may be subject to claims of infringement of the intellectual property rights of others,
which could hurt our business. |
Company Information
Our principal executive offices
are currently located at RMR Industrials Inc., 9595 Wilshire Blvd., Suite 310, Beverly Hills, California 90212, and our telephone
number is (310) 409-4113. Information regarding RMR Industrials’ operations may be found at www.rmrholdings.com.
Information contained in or accessible through this website does not constitute part of this prospectus.
We are an emerging growth company,
as that term is defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. For so long as we are an emerging
growth company, we will not be required to:
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have an auditor report on our internal controls over financial
reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; |
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comply with new or revised accounting standards until they would apply to
private companies, although we are choosing to “opt out” of this exemption and will comply with such standards
as required when they are adopted; |
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comply with any requirement that may be adopted by the Public Company Accounting
Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional
information about the audit and the financial statements (i.e., an auditor discussion and analysis); |
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submit certain executive compensation matters to shareholder advisory votes,
such as “say-on-pay”, “say-on-frequency” and “say-on-golden parachute;” and |
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disclose certain executive compensation related items such as the correlation
between executive compensation and performance and comparisons of the Chief Executive’s compensation to median employee
compensation. |
We will remain an “emerging
growth company” until the last day of our fiscal year following the fifth anniversary of the date of our first sale of common
equity securities pursuant to an effective registration under the Securities Act, or until the earliest of (i) the last day of
the first fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date that we become a “large
accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value
of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed
second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding
three year period.
We also qualify as a “smaller
reporting company,” as defined by Regulation S-K under the Securities Act of 1933, as amended, or the “Securities
Act.” As such, we also are exempt from the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and
also are subject to less extensive disclosure requirements regarding executive compensation in our periodic reports and proxy
statements. We will continue to be deemed a smaller reporting company until our public float exceeds $75,000,000 on the last day
of our second fiscal quarter in any fiscal year.
Summary of
the Offering
Class B Common Stock we are offering: |
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________ shares of Class B Common Stock |
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Underwriters’ option to purchase additional shares of Class B Common
Stock: |
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We have granted the underwriter a 30-day option to purchase up to ______ additional
shares of Class B Common Stock at the public offering price, less underwriting discounts and commissions. |
Class B Common Stock outstanding immediately after the offering: |
|
________ shares of Class B Common Stock |
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Use of proceeds: |
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Our net proceeds from the offering, without exercise of the underwriter’s
over-allotment option, will be approximately $_____, after deducting underwriting discounts and commissions and expenses.
We intend to use the net proceeds of this offering to finance acquisitions and for general corporate purposes. See “Use
of Proceeds.” |
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Risk Factors: |
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See “Risk Factors” beginning on page __ of this prospectus and
under similar headings in the other documents that are incorporated by reference into this prospectus for a discussion of
factors you should consider before investing in shares of our common stock. |
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OTCQB symbol: |
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“RMRI” |
Summary Financial Data
The following tables set forth our
summary financial data for the periods presented and should be read together with “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” and our financial statements and related notes appearing elsewhere in
this prospectus. The summary financial data for the period from October 15, 2014 (inception) through January 31, 2015 was derived
from our audited financial statements included elsewhere in this prospectus. We have also included data from our unaudited financial
statements for the three months ended March 31, 2015. Our historical results presented below are not necessarily indicative of
the financial results that may be achieved in any future period.
Summary of Statement of Operations | |
October 15, 2014 (inception)
through
January 31, 2015 | | |
Three Months Ended March 31, 2015 | |
Revenues | |
$ | - | | |
$ | - | |
Cost of Goods Sold | |
$ | - | | |
$ | - | |
Selling, General and Administrative Expenses | |
$ | 407,521 | | |
$ | 514,277 | |
Total Other income (expense) | |
$ | - | | |
$ | - | |
Net loss | |
$ | (407,521 | ) | |
$ | (514,277 | ) |
Net loss per common share (basic and diluted) | |
$ | (0.50 | ) | |
$ | (0.02 | ) |
Weighted average number of shares outstanding | |
| 822,222 | | |
| 33,138,877 | |
Summary of Financial Position | |
October 15, 2014 (inception) Through January 31, 2015 | | |
Three
Months
Ended
March 31, 2015
(Actual) | | |
Three Months Ended
March 31, 2015
(As Adjusted)(1) | |
Cash | |
$ | 1,767 | | |
$ | 4,733 | | |
| | |
Total current assets | |
$ | 1,767 | | |
$ | 4,733 | | |
| | |
Total assets | |
$ | 14,230 | | |
$ | 10,689 | | |
| | |
Total current liabilities | |
$ | 419,984 | | |
$ | 855,163 | | |
| | |
Stockholders’ equity (deficit) | |
$ | (405,754 | ) | |
$ | (844,474 | ) | |
| | |
Total liabilities and stockholders’ deficit | |
$ | 14,230 | | |
$ | 10,689 | | |
| | |
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(1) |
Reflects our sale of ______ shares of Class B Common Stock
offered by this prospectus at a public offering price of $____ per share, after deducting the underwriting discounts and commissions
and the estimated offering expenses payable by us. |
RISK FACTORS
Investing in our common stock
involves risks. Before making an investment in our Company, you should carefully consider the risk factors set forth below, which
contain important information about us and our business. You should also consider any other information included in this prospectus
and any prospectus supplement and any other information that we have incorporated by reference. Any of these risks, as well as
other risks and uncertainties not known to us or that we believe to be immaterial, could harm our financial condition, results
of operations or cash flows. We cannot assure you of a profit or protect you against a loss on the shares of our common stock
that you purchase in our company.
Risks Related to Our Business
and Industry
We have incurred losses in prior
periods and may incur losses in the future.
We cannot be assured that we can
achieve or sustain profitability on a quarterly or annual basis in the future. Our operations are subject to the risks and competition
inherent in the establishment of a business enterprise. There can be no assurance that future operations will be profitable. We
may not achieve our business objectives and the failure to achieve such goals would have an adverse impact on us.
Our future is dependent upon
our ability to obtain financing. If we do not obtain such financing, we may have to cease our activities and investors could lose
their entire investment.
There is no assurance that we will
operate profitably or generate positive cash flow in the future. We will require additional financing in order to proceed with
our business plan and acquire existing businesses that manufacture and distribute chemicals and minerals. We will also require
additional financing to sustain our business operations if we are not successful in earning revenues. We may not be able to obtain
financing on commercially reasonable terms or terms that are acceptable to us when it is required. Our future is dependent upon
our ability to obtain financing, such as the financial arrangements we are negotiating with Auramet. If we do not obtain such
financing, our business could fail and investors could lose their entire investment.
Because we may never earn revenues
from our operations, our business may fail and investors may lose all of their investment in our Company.
We are a company with a limited
operating history and our future profitability is uncertain. We have yet to generate positive earnings and there can be no assurance
that we will ever operate profitably. If our business plan is not successful and we are not able to operate profitably, then our
stock may become worthless and investors may lose all of their investment in our Company.
Prior to obtaining a large market
share for our products, we anticipate that we will incur increased operating expenses without realizing any revenues. We therefore
expect to incur significant losses into the foreseeable future. We recognize that, if we are unable to generate significant revenues
from the sale of our products in the future, we will not be able to earn profits or continue operations. There is no history upon
which to base any assumption as to the likelihood that we will prove successful, and we can provide no assurance that we will
generate any revenues or ever achieve profitability. If we are unsuccessful in addressing these risks, our business will fail
and investors may lose all of their investment in our Company.
Our limited operating history
makes evaluating our business and future prospects difficult, and may increase the risk of your investment.
Our limited operating history may
not provide a meaningful basis on which to evaluate our business. We will continue to encounter risks and difficulties frequently
experienced by companies at a similar stage of development, including our potential failure to:
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expand our product offerings and maintain
the high quality of products offered; |
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manage our expanding operations, including
the integration of any future acquisitions; |
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obtain sufficient working capital to support our
expansion and to fill customers’ orders on time; |
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maintain adequate control of our expenses; |
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implement our product development, marketing,
sales, and acquisition strategies and adapt and modify them as needed; and |
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anticipate and adapt to changing conditions in
the markets in which we operate as well as the impact of any changes in government regulation, mergers and acquisitions involving
our competitors, technological developments, and other significant competitive and market dynamics. |
If we are not successful in addressing
any or all of these risks, then our business may be materially and adversely affected.
If we are unable to identify,
fund and execute new acquisitions, we will not be able to execute a key element of our business strategy.
Our strategy is to grow primarily
by acquiring additional businesses and product lines. We cannot give any assurance that we will be able to identify, acquire or
profitably manage additional businesses and product lines. Financing for acquisitions may not be available, or may be available
only at a cost or on terms and conditions that are unacceptable to us. Further, acquisitions may involve a number of special risks
or effects, including diversion of management’s attention, failure to retain key acquired personnel, unanticipated events
or circumstances, legal liabilities, impairment of acquired intangible assets and other one-time or ongoing acquisition-related
expenses. Some or all of these special risks or effects could have a material adverse effect on our financial and operating results.
In addition, we cannot assure you that acquired businesses or product lines, if any, will achieve anticipated revenues and earnings.
In addition, we may not be able
to successfully or profitably integrate, operate, maintain and manage our newly acquired operations or their employees. We may
not be able to maintain uniform standards, controls, procedures and policies, which may lead to operational inefficiencies.
Loss of key members of our management
could disrupt our business.
We depend on the continued employment
and performance of our senior executives and other key members of management. If any of these individuals resigns or becomes unable
to continue in his or her present role and is not adequately replaced, our business operations and our ability to implement our
growth strategies could be materially disrupted. We generally do not have employment agreements with, and we do not maintain any
"key person" life insurance for, any of our executive officers.
The industries in which we compete
are highly competitive, and we may not be able to compete effectively with our competitors that have greater financial resources,
which could have a material adverse effect on our business, results of operations and financial condition.
The industries in which we operate
are highly competitive. Among our competitors are some of the world's largest chemical companies that have their own raw material
resources. Changes in the competitive landscape could make it difficult for us to retain our leadership position in various products
and markets throughout the world. In addition, some of the companies with whom we compete may be able to produce products more
economically than we can. Furthermore, most of our competitors have greater financial resources, which may enable them to invest
significant capital into their businesses, including expenditures for research and development. Some of our competitors are owned
or partially owned by foreign governments which may provide a competitive advantage to those competitors.
Increases in the price of our
primary raw materials may decrease our profitability and adversely affect our liquidity, cash flow, financial condition and results
of operations.
The prices we pay for raw materials
in our businesses may increase significantly, and we may not always be able to pass those increases through to our customers fully
and timely. In the future, we may be unable to pass on increases in our raw material costs, and raw material price increases may
erode the profitability of our products by reducing our gross profit. Price increases for raw materials may also increase our
working capital needs, which could adversely affect our liquidity and cash flow. For these reasons, we cannot assure you that
raw material cost increases in our businesses would not have a material adverse effect on our financial condition and results
of operations.
The Company will operate in a
global, competitive environment which gives rise to operating and market risk exposure.
The Company expects to sell a broad
range of products and services in a competitive, global environment, and to compete worldwide for sales on the basis of product
quality, price, technology and customer service. Increased levels of competition could result in lower prices or lower sales volume,
which could have a negative impact on the Company's results of operations.
Economic conditions around the world,
and in certain industries in which the Company does business also impact sales prices and volume. As a result, market uncertainty
or an economic downturn in the geographic areas or industries in which we sells our products could reduce demand for these products
and result in decreased sales volume, which could have a negative impact on our results of operations.
In addition, volatility and disruption
of financial markets could limit customers' ability to obtain adequate financing to maintain operations, which could result in
a decrease in sales volume and have a negative impact on our results of operations. The Company's global business operations may
also give rise to market risk exposure related to changes in foreign exchange rates, interest rates, commodity prices and other
market factors such as equity prices.
Disruptions in production at
our manufacturing facilities, both planned and unplanned, may have a material impact on our business, results of operations and/or
financial condition.
Manufacturing facilities in our
industry are subject to planned and unplanned production shutdowns, turnarounds and outages. Unplanned production disruptions
may occur for external reasons including natural disasters, weather, disease, strikes, transportation interruption, government
regulation, political unrest or terrorism, or internal reasons, such as fire, unplanned maintenance or other manufacturing problems.
Alternative facilities with sufficient capacity may not be available, may cost substantially more or may take a significant time
to increase production or qualify with our customers, each of which could negatively impact our business, results of operations
and/or financial condition. Long-term production disruptions may cause our customers to seek alternative supply which could further
adversely affect our profitability.
We will expend large amounts
of money for environmental compliance in connection with our operations.
When we become a manufacturer and
distributor of minerals and chemicals, we will be subject to stringent regulations under numerous U.S. federal, state, local and
foreign environmental, health and safety laws and regulations relating to the generation, storage, handling, discharge, disposition
and stewardship of hazardous wastes and other materials. We will expend substantial funds to comply with such laws and regulations
and have established a policy to minimize our emissions to the environment. Nevertheless, legislative, regulatory and economic
uncertainties (including existing and potential laws and regulations pertaining to climate change) make it difficult for us to
project future spending for these purposes and if there is an acceleration in new regulatory requirements, we may be required
to expend substantial additional funds to remain in compliance.
We are subject to environmental
clean-up costs, fines, penalties and damage claims that have been and continue to be costly.
We are subject to lawsuits and regulatory
actions, in connection with current and former operations (including divested businesses), for breaches of environmental laws
that seek clean-up or other remedies. We are also subject to lawsuits and investigations by public and private parties under various
environmental laws in connection with our current and former operations in various states, including with respect to off-site
disposal at facilities where we have been identified as a potentially responsible party under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, commonly referred to as CERCLA. We are also subject to similar risks
outside of the U.S.
Increased concerns regarding
the safe use of chemicals in commerce and their potential impact on the environment have resulted in more restrictive regulations
from local, state and federal governments and could lead to new regulations.
Concerns regarding the safe use
of chemicals in commerce and their potential impact on health and the environment reflect a growing trend in societal demands
for increasing levels of product safety and environmental protection. These concerns could manifest themselves in stockholder
proposals, preferred purchasing and continued pressure for more stringent regulatory intervention. These concerns could also influence
public perceptions, the viability of the Company's products, the Company's reputation and the cost to comply with regulations.
In addition, terrorist attacks and natural disasters have increased concerns about the security and safety of chemical production
and distribution. These concerns could have a negative impact on the Company's results of operations.
Local, state and federal governments
continue to propose new regulations related to the security of chemical plant locations and the transportation of hazardous chemicals,
which could result in higher operating costs.
We work with dangerous materials
that can injure our employees, damage our facilities and disrupt our operations.
Some of our operations involve the
handling of hazardous materials that may pose the risk of fire, explosion, or the release of hazardous substances. Such events
could result from terrorist attacks, natural disasters, or operational failures, and might cause injury or loss of life to our
employees and others, environmental contamination, and property damage. These events might cause a temporary shutdown of an affected
plant, or portion thereof, and we could be subject to penalties or claims as a result. A disruption of our operations caused by
these or other events could have a material adverse effect on our results of operations.
We may be subject to claims of
infringement of the intellectual property rights of others, which could hurt our business.
From time to time, we expect to
face infringement claims from our competitors or others alleging that our processes or products infringe on their proprietary
technologies. Any claims that our products or processes infringe the intellectual property rights of others, regardless of the
merit or resolution of the claims, could cause us to incur significant costs in responding to, defending and resolving the claims,
and may divert the efforts and attention of our management and technical personnel from our business. If we are found to be infringing
on the proprietary technology of others, we may be liable for damages, and we may be required to change our processes, redesign
our products, pay others to use the technology or stop using the technology or producing the infringing product. Even if we ultimately
prevail, the existence of the lawsuit could prompt our customers to switch to products that are not the subject of infringement
suits.
We are engaged in advanced negotiations in
connection with two potential acquisitions. If we do not complete these transactions, our business and stock price may suffer.
We are engaged in advanced negotiations
in connection with the potential acquisition of a producer and supplier of industrial mineral products for the ceramic, paint,
plastic, roofing, composite wood and agricultural industries and a company that formulates production, drilling and specialty
chemicals while also providing contract blending and reclamation services to the oil and gas industry.
Completion of these transactions
is subject to the drafting, negotiation and consummation of definitive transaction agreements which will include extensive representations,
warranties, covenants, indemnities and certain conditions to the closing of such transactions, including obtaining the relevant
regulatory approvals and having sufficient financing in place. We cannot assure you that we will be able to complete the proposed
transactions on the proposed terms, if at all.
The proposed transactions are part
of our ongoing efforts to implement our business plan by acquiring industrial commodity businesses. However, if we do not complete
the proposed acquisitions, we may not achieve the returns that we seek from the proceeds of this offering to the extent, if any,
that we intend to use any net proceeds to acquire such assets or companies. We also cannot predict how the announcement of the potential
acquisitions, or the completion or non-completion of the transactions on the contemplated terms, will affect the trading price
of our common stock.
Risks Relating To Our Common
Stock and Our Status as a Public Company
Shares of our common stock that
have not been registered under the Securities Act of 1933, as amended, regardless of whether such shares are restricted or unrestricted,
are subject to resale restrictions imposed by Rule 144, including those set forth in Rule 144(i) which apply to a “shell
company.” In addition, any shares of our common stock that are held by affiliates, including any received in a registered
offering, will be subject to the resale restrictions of Rule 144(i).
Pursuant to Rule 144 of the Securities
Act of 1933, as amended (“Rule 144”), a “shell company” is defined as a company that has no or nominal
operations; and, either no or nominal assets; assets consisting solely of cash and cash equivalents; or assets consisting of any
amount of cash and cash equivalents and nominal other assets. As such, we may be deemed a “shell company” pursuant
to Rule 144 prior to the Merger, and as such, sales of our securities pursuant to Rule 144 are not able to be made until a period
of at least twelve months has elapsed from the date on which our Current Report on Form 8-K is filed with the Commission reflecting
our status as a non- “shell company.” Therefore, any restricted securities we sell in the future or issue to consultants
or employees, in consideration for services rendered or for any other purpose will have no liquidity until and unless such securities
are registered with the Commission and/or until a year after the date of the filing of our Current Report on Form 8-K and we have
otherwise complied with the other requirements of Rule 144. As a result, it may be harder for us to fund our operations and pay
our employees and consultants with our securities instead of cash. Furthermore, it will be harder for us to raise funding through
the sale of debt or equity securities unless we agree to register such securities with the Commission, which could cause us to
expend additional resources in the future. Our previous status as a “shell company” could prevent us from raising
additional funds, engaging employees and consultants, and using our securities to pay for any acquisitions, which could cause
the value of our securities, if any, to decline in value or become worthless. Lastly, any shares held by affiliates, including
shares received in any registered offering, will be subject to the resale restrictions of Rule 144(i).
We will be required to incur
significant costs and require significant management resources to evaluate our internal control over financial reporting as required
under Section 404 of the Sarbanes-Oxley Act, and any failure to comply or any adverse result from such evaluation may have an
adverse effect on our stock price.
As a smaller reporting company as
defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, we are required to evaluate our internal control
over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”). Section 404 requires
us to include an internal control report with the Annual Report on Form 10-K. This report must include management’s assessment
of the effectiveness of our internal control over financial reporting as of the end of the fiscal year. This report must also
include disclosure of any material weaknesses in internal control over financial reporting that we have identified. Failure to
comply, or any adverse results from such evaluation could result in a loss of investor confidence in our financial reports and
have an adverse effect on the trading price of our equity securities. Management believes that its internal controls and procedures
are currently effective to detect the inappropriate application of U.S. GAAP rules.
Achieving continued compliance with
Section 404 may require us to incur significant costs and expend significant time and management resources. We cannot assure you
that we will be able to fully comply with Section 404 or that we and our independent registered public accounting firm would be
able to conclude that our internal control over financial reporting is effective at fiscal year end. As a result, investors could
lose confidence in our reported financial information, which could have an adverse effect on the trading price of our securities,
as well as subject us to civil or criminal investigations and penalties. In addition, our independent registered public accounting
firm may not agree with our management’s assessment or conclude that our internal control over financial reporting is operating
effectively.
Our
founders, who also comprise a majority of the Company’s management team, have and will have after this offering significant
ownership of the Company, including a majority of our voting stock giving them the ability to control most, if not all, Company
decisions.
Assuming the maximum amount of shares
of Class B Common Stock offered hereunder are sold in this offering, our directors and executive officers will still own, directly
or indirectly, approximately 21% of the Company’s aggregate outstanding capital stock and approximately 57% of the Company
Class A Common Stock (the Company’s voting capital stock) on their own, effectively giving them voting control on most,
if not all, decision. The voting rights represented by these share holdings provide our management with a sufficient number
of voting rights for all practical purposes to effectively control the election of our directors, cause us to engage in transactions
with affiliated entities, cause or restrict the sale or merger of the Company, and effect such other matters as may be presented
for a vote of our shareholders. Such concentration of ownership and control could have the effect of delaying, deferring or preventing
a change in control of the Company even when such a change of control would be in the best interests of the Company’s other
shareholders. Accordingly, investors in this offering will have little voice in our management decisions and will exercise very
little control over us. In addition, the applicable sections of the Nevada Revised Statutes provide that certain actions must
be approved by a specified percentage of shareholders. In the event that the requisite approval of shareholders is obtained, dissenting
shareholders would be bound by such vote. Accordingly, no persons should purchase any shares of Class B Common Stock unless they
are willing to entrust all aspects of control to our management.
The existence of indemnification
rights to our directors, officers and employees may result in substantial expenditures by our company and may discourage lawsuits
against our directors, officers and employees.
The indemnification obligations
provided in our articles of incorporation and our bylaws to our directors and officers could result in the Company incurring substantial
expenditures to cover the cost of settlement or damage awards against directors and officers, which we may be unable to recoup.
These provisions and resultant costs may also discourage our company from bringing a lawsuit against directors and officers for
breaches of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our shareholders against
our directors and officers even though such actions, if successful, might otherwise benefit our company and shareholders.
Our stock is categorized as a
penny stock. Trading of our stock may be restricted by the SEC’s penny stock regulations which may limit a shareholder’s
ability to buy and sell our stock.
Our stock is categorized as a penny
stock. The SEC has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market
price (as defined) less than US$ 5.00 per share or an exercise price of less than US$ 5.00 per share, subject to certain exceptions.
Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who
sell to persons other than established customers and accredited investors. The penny stock rules require a broker-dealer, prior
to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a
form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market.
The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of
the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny
stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information,
must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing
before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a
penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny
stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These
disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that
is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade
our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common
stock.
FINRA sales practice requirements
may also limit a shareholder’s ability to buy and sell our stock.
In addition to the “penny
stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer
must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative
low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information
about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of
these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at
least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our
common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.
To date, we have not paid any
cash dividends and no cash dividends will be paid in the foreseeable future.
We do not anticipate paying cash
dividends on our common stock in the foreseeable future and we may not have sufficient funds legally available to pay dividends.
Even if the funds are legally available for distribution, we may nevertheless decide not to pay any dividends. We presently intend
to retain all earnings for our operations.
If we issue additional shares
in the future, it will result in the dilution of our existing shareholders.
Our articles of incorporation authorize
the issuance of up 4,050,000,000 shares, 2,000,000,000 shares of which are Class A Common Stock, par value $0.001 per share, 2,000,000,000
shares of which are Class B Common Stock, par value $0.001 per share, and 50,000,000 shares of which are Preferred Stock, par
value $0.001 per share. Our Board of Directors may choose to issue some or all of such shares to acquire one or more companies
or properties and to fund our overhead and general operating requirements. The issuance of any such shares may reduce the book
value per share and may contribute to a reduction in the market price of the outstanding shares of our common stock. If we issue
any such additional shares, such issuance will reduce the proportionate ownership and voting power of all current shareholders.
Further, such issuance may result in a change of control of our corporation.
We may not qualify to meet listing
standards to list our stock on an exchange.
The SEC approved listing standards
for companies using reverse acquisitions to list on an exchange may limit our ability to become listed on an exchange. We would
be considered a reverse acquisition company (i.e., an operating company that becomes an Exchange Act reporting company by combining
with a shell Exchange Act reporting company) that cannot apply to list on NYSE, NYSE Amex or Nasdaq until our stock has traded
for at least one year on the U.S. OTC market, a regulated foreign exchange or another U.S. national securities market following
the filing with the SEC or other regulatory authority of all required information about the merger, including audited financial
statements. We would be required to maintain a minimum $4 share price ($2 or $3 for Amex) for at least thirty (30) of the sixty
(60) trading days before our application and the exchange’s decision to list. We would be required to have timely filed
all required reports with the SEC (or other regulatory authority), including at least one annual report with audited financials
for a full fiscal year commencing after filing of the above information. Although there is an exception for a firm underwritten
IPO with proceeds of at least $40 million, we do not anticipate being in a position to conduct an IPO in the foreseeable future.
To the extent that we cannot qualify for a listing on an exchange, our ability to raise capital will be diminished.
We are an “emerging growth
company” under the JOBS Act of 2012, and we cannot be certain if the reduced disclosure requirements applicable to emerging
growth companies will make our common stock less attractive to investors.
We are an “emerging growth
company,” as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), and we may take advantage
of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging
growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements
of section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports
and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and
shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common
stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result,
there may be a less active trading market for our common stock and our stock price may be more volatile.
In addition, Section 107 of the
JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided
in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging
growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private
companies. We are choosing to take advantage of the extended transition period for complying with new or revised accounting standards.
As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates.
We will remain an “emerging
growth company” for up to five years, although we will lose that status sooner if our revenues exceed $1 billion, if we
issue more than $1 billion in non-convertible debt in a three year period, or if the market value of our common stock that is
held by non-affiliates exceeds $700 million as of any May 30.
Our status as an “emerging
growth company” under the JOBS Act of 2012 may make it more difficult to raise capital as and when we need it.
Because of the exemptions from various
reporting requirements provided to us as an “emerging growth company” and because we will have an extended transition
period for complying with new or revised financial accounting standards, we may be less attractive to investors and it may be
difficult for us to raise additional capital as and when we need it. Investors may be unable to compare our business with other
companies in our industry if they believe that our financial accounting is not as transparent as other companies in our industry.
If we are unable to raise additional capital as and when we need it, our financial condition and results of operations may be
materially and adversely affected.
You should carefully evaluate all
the information in this prospectus, including the risks described in this section and throughout this prospectus. You should rely
only on the information contained in this prospectus in making your investment decision.
If our involvement with the press
release were held by a court to be a violation of the Securities Act of 1933, we could be required to repurchase the shares sold
to purchasers in this offering at the original purchase price, plus statutory interest from the date of purchase, for a period
of one year following the date of the violation.
Risks Associated with this
Offering
There is not now an active
market for our Class B Common Stock. An active trading market for our Class B Common Stock may not develop and the market price
for our Class B Common Stock may decline below the offering price of our Class B Common Stock in this offering.
Although our Class B Common Stock
is quoted on the OTCQB, an over-the-counter quotation system, there has been no public trading of our Class B Common Stock. If
a trading market does not develop, purchasers of our securities may have difficulty selling their shares.
The offering price for our Class
B Common Stock in this offering will be determined by negotiation between the representative of the underwriter and us based upon
several factors, and may not be indicative of prices that will prevail in the open market after this offering. Consequently, you
may be unable to sell your shares of our Class B Common Stock at prices equal to or greater than the prices you paid for them,
if at all.
If a public trading market for our
stock does develop, the prices at which our Class B Common Stock may trade may be volatile and we expect that they may fluctuate
significantly in response to various factors, many of which are beyond our control. The stock market in general, and securities
of small-cap or micro-cap companies, has experienced extreme price and volume fluctuations in recent years. Continued market fluctuations
could result in volatility in the price at which our Class B Common Stock may trade, which could cause its value to decline. To
the extent we seek to raise capital in the future through the issuance of equity, those efforts could be limited or hindered by
low and/or volatile market prices for our Class B Common Stock.
We do not now, and are not expected
to in the foreseeable future, meet the initial listing standards of the Nasdaq Stock Market or any other national securities exchange.
We presently anticipate that our Class B Common Stock will continue to be quoted on the OTCQB or another over-the-counter quotation
system. In those venues, our stockholders may find it difficult to obtain accurate quotations as to the market value of their
shares of our Class B Common Stock and may find few buyers to purchase their stock and few market makers to support their prices.
An active market for our Class B
Common Stock may never develop. As a result, investors must bear the economic risk of holding their shares of our Class B Common
Stock for an indefinite period of time.
Investors
in the offering will realize immediate and substantial dilution.
If
you purchase Class B Common Stock in this offering, you will pay more for your shares than the amounts paid by existing stockholders
for their shares. After giving effect to the sale by us of the _______ shares of our Class B Common Stock in this offering at
a public offering price of $___ per share, less underwriting discounts and commissions and estimated offering expenses payable
by us, our as adjusted net tangible book value as of March 31, 2015 would have been approximately $___ per share. This represents
an immediate increase in net tangible book value of $___ per share to existing stockholders and an immediate dilution in the net
tangible book value of $___ per share to purchasers in the shares of Class B Common Stock offered in this offering. This will
result in a __% dilution for purchasers of stock in this offering. For a further description of the dilution that purchasers will
experience immediately after this offering, see “Dilution”.
Investors may never receive cash
distributions, which could result in an investor receiving little or no return on his or her investment.
Distributions are payable at the
sole discretion of our board of directors. We do not know the amount of cash that we will generate, if any, once we have more
productive operations. Cash distributions are not assured, and we may never be in a position to make distributions.
There may be additional risks
because the business of RMR Industrials, Inc. became public by means of a reverse merger transaction.
Additional risks may exist because
the business of the Company became a public company through a “reverse merger” transaction. Securities analysts of
major brokerage firms may not provide coverage of the Company following the Merger because there may be little incentive to brokerage
firms to recommend the purchase of our Class B Common Stock. There may also be increased scrutiny by the SEC and other government
agencies and holders of our securities prior to the Merger due to the nature of the transaction, as there has been increased focus
on transactions such as the Merger in recent years.
The sale or availability for
sale of substantial amounts of our Class B Common Stock could adversely affect the market price of our Class B Common Stock.
Sales of substantial amounts of
shares of our Class B Common Stock after the completion of the offering, or the perception that these sales could occur, could
adversely affect the market price of our Class B Common Stock and could impair our future ability to raise capital through common
stock offerings.
Additional dilution may result from
the issuance of shares of our capital stock in connection with acquisitions or in connection with other financing efforts. Any
issuance of our Class B Common Stock that is not made solely to then-existing stockholders proportionate to their interests, such
as in the case of a stock dividend or stock split, will result in dilution to each stockholder.
If equity research analysts do
not publish research or reports about our business, or if they issue unfavorable commentary or downgrade our common stock, the
market price of our Class B Common Stock will likely decline.
The trading market for our Class
B Common Stock will rely in part on the research and reports that equity research analysts, over whom we have no control, publish
about us and our business. We may never obtain research coverage by securities and industry analysts. If no securities or industry
analysts commence coverage of our Company, the market price for our Class B Common Stock could decline. In the event we obtain
securities or industry analyst coverage, the market price of our Class B Common Stock could decline if one or more equity analysts
downgrade our common stock or if those analysts issue unfavorable commentary, even if it is inaccurate, or cease publishing reports
about us or our business.
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, including documents
incorporated by reference into this document, contains information considered “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of 1995 and the safe harbor provided by Section 27A and Section 21E
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements, which may be expressed
in a variety of ways, including the use of future or present tense language, relate to, among other things: statements about our
future results, the prospects of the combined company, and our plans, objectives and strategies. These forward-looking statements
are based on assumptions that involve risks and uncertainties and that are subject to change based on various important factors
(some of which are beyond our control), including those factors described under “Risk Factors” elsewhere in this prospectus
and in the documents incorporated by reference in this prospectus. Actual results may differ materially from those expressed or
implied as a result of these risks and uncertainties. All forward-looking statements speak only as of the date on which such statements
are made, and we undertake no obligation to update any statement to reflect events or circumstances after the date on which such
statement is made or to reflect the occurrence of unanticipated events. We caution you not to place undue reliance on these forward-looking
statements, which speak only as of the date of this prospectus, in the case of forward-looking statements contained in this prospectus,
or the dates of the documents incorporated by reference into this prospectus, in the case of forward-looking statements made in
those incorporated documents.
USE OF PROCEEDS
Our net proceeds from the sale of
the ______ shares of Class B Common Stock we are offering will be approximately $______, after deducting the estimated underwriting
discounts and commissions and estimated offering expenses payable by us. If the underwriters’ over-allotment option is exercised
in full, we estimate the net proceeds including the additional shares we sell will be approximately $______, after deducting the
estimated underwriting discounts and commissions and estimated offering expenses payable by us.
A $0.50 increase (decrease) in the
assumed offering price per share of Class B Common Stock would increase (decrease) the net proceeds to us by approximately $______,
after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, assuming that
the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same. An increase (decrease)
of 0.5 million in the number of shares offered by us would increase (decrease) the net proceeds to us by approximately $_______.
We intend to use the net proceeds
of this offering to finance potential acquisitions and for general working capital purposes as detailed below.
Our planned expenditures for activities
that are to be funded from the proceeds of this offering are as follows:
| |
Use of Proceeds | |
Purpose | |
Without
Over-allotment | | |
Percent | | |
With Over-allotment | | |
Percent | |
Acquisitions | |
| | | |
| | % | |
| | | |
| | % |
General
working capital purposes | |
| | | |
| | % | |
| | | |
| | % |
| |
$ |
| | |
| | % | |
$ |
| | |
| | % |
MARKET FOR
COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
Our common stock is currently quoted
on the OTCQB under the symbol “RMRI.” No shares of our Class B Common Stock have traded on the OTCQB to date.
Holders
As of June 26, 2015, there were
50 holders of record of our Class B Common Stock, not including any shareholders holding shares in nominee or “street name”
and 3 holders of record of our Class A Common Stock.
Securities Authorized for Issuance
Under Equity Compensation Plans
On February 26, 2015, our Board
of Directors and our stockholders approved and adopted the RMR Industrials Inc. 2015 Equity Incentive Plan (the “Plan”).
The Plan permits us to grant a variety
of forms of awards, including stock options, stock appreciation rights, restricted stock, restricted stock units, performance
shares, performance units and other stock based awards, to allow us to adapt our incentive compensation program to meet our needs.
The number of shares of our common stock that may be issued under the Plan to employees, directors and/or consultants in such
awards is currently 15,579,000 shares. Our Board of Directors currently serves as the administrator of the Plan. As of March 31,
2015, no securities have been issued under the Plan.
DETERMINATION
OF OFFERING PRICE
Before this offering, no shares
of our Class B Common Stock have publicly traded. The public offering price of the Class B Common Stock to be sold in this offering
will be negotiated between us and the underwriters. Among the factors to be considered in these negotiations are:
| • | the prospects for our Company and the industry in which we operate; |
| • | our past and present financial and operating performance; |
| • | financial and operating information and market valuations of publicly traded companies engaged in activities similar to ours; |
| • | the prevailing conditions of U.S. securities markets at the time of this offering; and |
| • | other factors deemed relevant. |
The offering prices stated on the
cover page of this prospectus should not be considered as an indication of the actual value of the shares. Such prices are subject
to change as a result of market conditions and other factors, and we cannot assure you that the shares can be resold at or above
their public offering prices.
DIVIDEND
POLICY
We plan to retain any earnings for
the foreseeable future for our operations. We have never paid any dividends on our common stock and do not anticipate paying any
cash dividends in the foreseeable future. Any future determination to pay cash dividends will be at the discretion of our board
of directors and will depend on our financial condition, operating results, capital requirements and such other factors as our
board of directors deems relevant.
CAPITALIZATION
The following table sets forth our
cash and cash equivalents and capitalization as of March 31, 2015 on:
|
• |
an actual basis; and |
|
• |
an as-adjusted basis to also give effect to the sale by us of (i) _______
shares of our Class B Common Stock in this offering stock at an offering price of $__, after deducting the estimated underwriting
discounts and commissions and estimated offering expenses payable by us. |
The information in this table should
be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
and our financial statements and related notes thereto included elsewhere in this prospectus.
| |
Actual | | |
As Adjusted | |
Cash and cash equivalents | |
$ | 4,733 | | |
| | |
Stockholders’ equity: | |
| | | |
| | |
Preferred stock, par value $0.001 per
share: authorized 50,000,000; none issued and outstanding | |
| — | | |
| | |
Class A common stock, par value $0.001 per share: authorized 2,000,000,000; issued and outstanding 35,785,858 | |
| 35,786 | | |
| | |
Class B common stock, par value $0.001 per share: authorized 2,000,000,000; issued and outstanding 16,144,142 | |
| 16,144 | | |
| | |
Additional paid-in capital | |
| (47,875 | ) | |
| | |
Common stock subscribed | |
| (65 | ) | |
| | |
Accumulated deficit | |
| (848,464 | ) | |
| | |
Total stockholders’ equity | |
| (844,474 | ) | |
| | |
Total capitalization | |
$ | (844,474 | ) | |
| | |
The table above does not include:
|
• |
15,579,000 shares of common stock reserved for future issuance
under our 2015 Equity Incentive Plan; |
|
• |
_______ additional shares of Class B Common Stock subject to the underwriters’
over-allotment option to purchase additional shares of Class B Common Stock; and |
DILUTION
If you invest in our Class B Common
Stock, your ownership interest will be diluted to the extent of the difference between the public offering price per share and
the as adjusted net tangible book value per share after this offering. Net tangible book value per share represents the amount
of our total tangible assets less total liabilities, divided by the number of shares of common stock outstanding. Dilution in
the as adjusted net tangible book value per share represents the difference between the amount per share paid by purchasers of
our common stock in this offering and the as adjusted net tangible book value per share of common stock immediately after the
consummation of this offering.
Assumed
public offering price per share of common stock | |
| | | |
$ | | |
Historical net
tangible book value per share as of March 31, 2015 | |
$ | | | |
| | |
As
adjusted increase in net tangible book value per share attributable to new investors in this offering | |
| | | |
| | |
As
adjusted net tangible book value per share after this offering | |
| | | |
| | |
Dilution
of as adjusted net tangible book value per share to new investors | |
| | | |
$ | | |
Dilution
to new investors (%) | |
| | | |
| | % |
As of March 31, 2015, our historical
net tangible book value was approximately ($____) or ($____) per share. After giving effect to the sale by us of the ____ shares
of our Class B Common Stock in this offering at a public offering price of ____ per share, less underwriting discounts and commissions
and estimated offering expenses payable by us, our as adjusted net tangible book value as of March 31, 2015 would have been approximately
$____, or approximately ____ per share. This represents an immediate increase in net tangible book value of $____ per share to
existing stockholders and an immediate dilution in net tangible book value of $____ per share to investors in the shares of Class
B Common Stock offered in this offering. This will result in a __% dilution for the new investors in this offering. The following
table illustrates this per share dilution:
If the underwriters exercise their
option to purchase additional shares of Class B Common Stock in full, the as adjusted increase in net tangible book value per
share attributable to new investors in this offering will increase to ____ per share and our as adjusted net tangible book value
per share after this offering will increase to ____ per share, representing an immediate increase in our net tangible book value
of ____ per share to existing stockholders, and there will be an immediate dilution of ____ per share to new investors.
A $0.50 increase (decrease) in the
public offering price of $____ per share would increase (decrease) our as adjusted net tangible book value after this offering
by approximately $____, or $____ per share, and the as adjusted net tangible book value per share after this offering would increase
to approximately $____ per share in the case of an increase and decrease to approximately $____ per share in the case of a decrease,
assuming no change to the number of shares offered by us as set forth on the cover page of this prospectus, and after deducting
underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number
of shares we are offering. A 0.5 million increase in the number of shares would increase our as adjusted net tangible book value
after this offering to $____ per share, whereas a 0.5 million decrease would reduce it to $____, at a public offering price of
$____ per share and the dilution of as adjusted net tangible book value per share to new investors in this offering would be reduced
to $____ per share for the increase or increased to $____ per share for the decrease after deducting underwriting discounts and
commissions and estimated offering expenses payable by us. The as adjusted information discussed above is illustrative only.
The discussion and table above exclude:
|
• |
15,579,000 shares of common stock reserved for future issuance
under our 2015 Equity Incentive Plan; |
|
|
|
|
• |
_______ additional shares of Class B Common Stock subject to the underwriters’
over-allotment option to purchase additional shares of Class B Common Stock; and |
DESCRIPTION
OF SECURITIES TO BE REGISTERED
Common Stock
We are authorized to issue up to
4,000,000,000 shares of common stock at a par value of $0.001 per share. As of June 26, 2015, there were 35,785,858 shares and
16,144,142 shares of Class A and Class B common stock outstanding, respectively. The holders of Class A common stock will have
the right to vote on all matters on which stockholders have the right to vote. The holders of Class B common stock will have the
right to vote solely on matters where the vote of such holders is explicitly required under Nevada law, such as an approval of
a plan of merger, exchange or conversion, an increase or decrease in the number of authorized shares of a class or series of stock
in certain circumstances, and other situations as required by Nevada law where the rights, preferences or limitations of such
holders are adversely impacted. On matters which the applicable class of stockholders have the right to vote, each Class A common
stock and Class B common stock shall be entitled to one vote per share.
The holders of Class A Common Stock
and Class B Common Stock will have equal distribution rights, provided that distributions in securities shall be made in either
identical securities or securities with similar voting characteristics. The holders of Class A Common Stock and Class B Common
Stock will be entitled to receive identical per-share consideration upon a merger, conversion or exchange of the Company with
another entity, and will have equal rights upon dissolutions, liquidation or winding-up.
The rights, preferences and privileges
of holders of common stock are subject to, and may be adversely affected by, the rights of the holders of any series of preferred
stock, which may be designated solely by action of the Board of Directors and issued in the future. All outstanding shares of
common stock are duly authorized, validly issued, fully paid and non-assessable.
Transfer Agent
The transfer agent for our common
stock is Corporate Stock Transfer, Inc., 3200 Cherry Creek South Drive, Suite 430, Denver, Colorado 80209.
LEGAL MATTERS
The validity of the securities offered
by this prospectus will be passed upon for us by Greenberg Traurig, LLP, Sacramento, California. ________________ is representing
the underwriters in connection with this offering.
EXPERTS
The audited financial statements
of RMR Industrials, Inc. included herein and elsewhere in the Registration Statement, have been audited by Hein & Associates
LLP, an independent registered public accounting firm, for the periods and to the extent set forth in their report (which includes
an explanatory paragraph relating to the Company’s ability to continue as a going concern). Such financial statements have
been so included in reliance upon the report of such firm given upon the firm’s authority as an expert in accounting and
auditing.
INFORMATION
WITH RESPECT TO THE REGISTRANT
Overview
RMR Industrials, Inc. was incorporated
on October 15, 2014 as a Nevada corporation. We were formed to acquire and consolidate complementary industrial commodity assets
through capitalizing on the volatile oil markets, down cycles in commodity markets, and other ancillary opportunities. Typically
these assets are the core manufacturer and supplier of specific bulk commodity minerals, chemicals and petrochemicals distributed
to the global manufacturing industry. Our consolidation strategy is to assemble a portfolio of mature and value-add industrial
commodities businesses to generate scalable enterprises with a large portfolio of products and services addressing a common and
stable customer base.
We believe that the cash flows generated
by the businesses that we will operate will provide us with the ability to pursue further acquisitions in order to build on our
existing segments, or to establish a new business platform for future growth. To further supplement our capital requirements for
future potential acquisitions, we intend to utilize a combination of debt and equity financings, including traditional loans from
financial institutions. We will utilize a disciplined approach to identify and evaluate potential acquisitions, only pursuing
those that meet our financial and strategic criteria. Our primary criteria focus on accretive companies with positive cash flow
in the industrial commodities sectors. These companies should generate annual cash flow of $500,000 to $15,000,000 or annual revenues
greater than $10,000,000. For consolidating businesses within the same sector and business plan, our criteria will be focused
on not only acquiring historical cash flows but also incremental products, services, proprietary technology, regional access,
new customers or unique advantages.
Our goal is to become an owner,
producer and distributor of certain minerals, including but are not limited to: feldspar, talc, mica, bentonite, vermiculite,
frac sand, aggregates, antimony, barite, silica, ball clays, graphite, sulfur and zeolite. We also plans to become an owner, producer
and distributor of certain chemicals, including but not limited to: glycols, ethanolamines, methanol, antifreeze, biocides, corrosion
inhibitors, demulsifiers, desalting compounds and dispersants.
We do not have any current plans,
arrangements, discussions or intentions to engage in a merger or acquisition with any entities or persons to be used as vehicle
for a private company to become a reporting company.
Strategy
Our due diligence process begins
with outlining a framework for each prospective asset’s position within the vision of our consolidation strategy. In defining
this framework, we seek to identify the key drivers of the business and industry, as well as the risks associated with each transaction.
With our team of management and finance professionals, its board of advisors, and leading industry consultants, our due diligence
process includes a full examination of each target’s managerial, operational, financial, legal, and environmental components
in relation to how each facet impacts our broader strategy. Our process, while instrumental in identifying the risk level of each
transaction, seeks to also identify hidden value-add opportunities within each business and for our broader portfolio.
We will begin all acquisitions with
an internally managed performance audit of inbound assets and companies. This process will begin long before closing and takes
a 360-degree view of the opportunity. At the very center of its objectives is to foremost understand the needs of customers.
We will routinely revisit the business
plan and monitor leadership specifically for accountability. This translates to daily metrics all the way through multi-year performance
incentives. We believe that our disciplined approach and focus on strategic objectives is what will differentiate us throughout
all commodity cycles.
After understanding the customer
needs and implementing leadership, we will seek out areas of growth. This process involves taking a fresh look at established
industries and markets. We believe many of our acquisition targets are generationally managed assets lacking institutional sophistication.
Immediately after closing on an acquisition, we will begin implementing best of breed systems, processes and infrastructure.
We have not yet completed the acquisition
of any industrial assets or entered into any types of asset purchase agreements, however, we are engaged in advanced negotiations
with two companies for which we established a preliminary purchase price and key terms. We believe the target audience has been
receptive due to adverse global economic factors in the energy sector, which lead us to anticipate closing on several acquisitions
during 2015. With macroeconomic uncertainty and the recent volatility in commodity prices, we believe many companies will be seeking
an exit strategy at attractive pricing. These favorable valuations may offer increased flexibility to finance potential acquisition
targets through debt or equity securities based on stable historical asset values and expectation of long-term cyclical appreciation
of industrial commodity prices.
We are in advanced negotiations
to acquire the assets and certain liabilities of a magnesium silicate producer and supplier for the ceramic, paint, plastic, roofing,
composite wood and agricultural industries in North America. Due diligence efforts are substantially completed and we have developed
a transition plan for post-acquisition integration activities. The purchase price for the potential acquisition would be $19,000,000,
plus the assumption of certain liabilities and subject to certain working capital and other post-closing adjustments. However,
to date we have not entered into any definitive or binding agreement with such company, and there are no assurances that we will
ultimately agree to definitive terms and consummate the acquisition.
Additionally, we are in advanced
negotiations with a company that formulates production, drilling and specialty chemicals while also providing contract blending
and reclamation services to the energy industry. The preliminary purchase price for the potential acquisition would be $7,500,000,
plus the assumption of certain liabilities and subject to certain working capital and other post-closing adjustments. However,
to date we have not entered into any definitive or binding agreement with such company, and there are no assurances that we will
ultimately agree to definitive terms and consummate the acquisition.
Our strategy is to seek out the
most established and entrenched commodity businesses in the United States. This focused and disciplined approach resulted in identification
of extremely well established enterprises, rich in history and the leading producers in their respective industrial subsectors,
with a diversified customer base and servicing different industrial sectors.
Potential Competitive Strengths
We believe our process to discover,
finance and operate unique natural resource and industrial assets provides us a competitive advantage to achieve critical mass
through acquisition of under-performing assets. Our principals have extensive experience and also collaborated in investing in
and operating natural resource assets for many years. We believe our potential competitive strengths to be the following:
Proprietary Acquisition Sources.
We have a long-standing track record of discovering unique assets pertinent to our current business strategy. We will seek to
capitalize on the global network and investing and operating experience of our management team to identify, acquire and operate
one or more businesses or assets in the industrial minerals mining and processing industry, although we may pursue a business
combination in complementary industries, such as specialty chemicals and agriculture.
Status as a Public Company. We
believe our structure will make us an attractive business combination partner to target businesses. As an existing public company,
we offer a target business an alternative to the traditional initial public offering through a merger or other business combination.
In this situation, the owners of the target business could exchange their shares of stock in the target business for shares of
our stock or for a combination of shares of our stock and cash, allowing us to tailor the consideration to the specific needs
of the sellers. We believe target businesses might find this method a more certain and cost effective method to becoming a public
company than the typical initial public offering. In a typical initial public offering, there are additional expenses incurred
in marketing, roadshow and public reporting efforts that will likely not be present to the same extent in connection with a business
combination with us. Furthermore, once the business combination is consummated, the target business will have effectively become
public, whereas an initial public offering is always subject to the underwriters’ ability to complete the offering, as well
as general market conditions that could prevent the offering from occurring. Once public, we believe the target business would
then have greater access to capital and an additional means of providing management incentives consistent with shareholders’
interests than it would have as a privately-held company. Being public can offer further benefits by augmenting a company’s
profile among potential new customers and vendors and aid in attracting talented employees.
Financial Position. We
offer a target business a variety of financial scenarios such as providing the owners of a target business with shares in a public
company and a public means to sell such shares, providing cash for stock, and providing capital for the potential growth and expansion
of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to consummate our initial
business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to
use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its
needs and desires. However, since we have no specific business combination under consideration, we have not taken any steps to
secure third party financing and it may not be available to us.
Management Operating and Investing
Experience. Over the course of their careers, the members of our management team have developed a broad
international network of contacts and corporate relationships which we believe will serve as a useful source of investment opportunities.
Our executive officers are officers of our sponsor and Rocky Mountain Resources, a privately held natural resources operating
company. The management team has applied their deep understanding of historical precedents to the natural resources markets and
established a reputation as one of the thought leaders within the natural resources sector. The Management team has been working
together for the last ten years, over such time they have assembled a team of natural resources and investment professionals to
pursue investments across the industry.
Financing of Acquisitions
On June 26, 2015, our wholly-owned
subsidiary, United States Talc and Minerals Inc. (“USTM”), entered into a non-binding financing arrangement with Auramet
International LLC (“Auramet”), whereby subject to certain conditions, including but not limited to, the approval of
a satisfactory acquisition candidate, technical due diligence and an executable acquisition purchase agreement, Auramet will loan
USTM the principal amount of $12,000,000. The maturity date of such note will be on the second anniversary of the closing
and such note will accrue interest at a rate of 15% annually. The note shall be secured by a first priority lien on all
the assets of USTM. We have also entered into a non-binding mezzanine financing arrangement with Auramet, whereby subject
to meeting certain conditions, Auramet will loan USTM an additional principal amount of $5,000,000. The maturity date of such
note will be on the second anniversary of the closing and such note will accrue interest at a rate of 15% annually. The note shall
be secured by a second priority lien on certain assets of USTM. There are no assurances that USTM will enter into binding loan
agreements with Auramet, and upon terms that are ultimately satisfactory to us. Any such failure will result in USTM and us having
to seek financing from other potential sources.
Products
We do not currently
offer any products or services. All products and services to be provided by us will be acquired through future acquisitions from
industrial commodity businesses.
Our goal is to become an owner,
producer and distributor of certain minerals, including but are not limited to: feldspar, talc, mica, bentonite, vermiculite,
frac sand, aggregates, antimony, barite, silica, ball clays, graphite, sulfur and zeolite. We also plan to become an owner, producer
and distributor of certain chemicals, including but not limited to: glycols, ethanolamines, methanol, antifreeze, biocides, corrosion
inhibitors, demulsifiers, desalting compounds, and dispersants.
Revenues
and Customers
We do not currently generate any
revenues. Future revenues will be generated through the purchase of assets already in operation. In addition to acquiring revenue
generating assets, we plan to grow revenues by not only expanding sales to existing customers but also expanding customer acquisitions
through improved infrastructure. Customers of the products and services we plan to acquire are typically manufacturers of ceramics,
paints, plastics, paper, rubber, food, cosmetics, and many other consumer products. Customers of industrial chemicals include
oil and gas producers and manufacturing facilities.
Intellectual Property
Our success depends in part upon
our ability to protect our core technology and intellectual property. To establish and protect our proprietary rights, we will
rely on a combination of patents, patent applications, trademarks, copyrights, trade secrets, including know-how, license agreements,
confidentiality procedures, non-disclosure agreements with third parties, employee disclosure and invention assignment agreements,
and other contractual rights. Many of the asset purchases under consideration include intellectual property which has been typically
underutilized or under-leveraged by their current owners. Our plans to maximize value from these assets through focused capital
infusion and strategic marketing implementation.
We currently own an option to purchase
intellectual property from the Colorado School of Mines (“CSM”). We met with CSM’s Technology Transfer group,
who presented current projects in progress that may be available for commercial licensing opportunities. Our management views
CSM as a highly respected institution which specializes in industrial minerals technology research and believes that CSM could
be a valuable technical resource for future intellectual property development. The structure of the option agreement provides
a low cost and minimal duration commitment to evaluate CSM’s technology capabilities and current relationships. No third
parties or agents were engaged with our negotiations of the option agreement with CSM, which terminates on July 25, 2015 unless
extended for additional $3,000 for each of two available three-month periods, not to extend past January 25, 2016 (the “Option
Termination Date”). The option includes three patent applications and one issued patent. These patents describe a process
to increase oil production through modified injection processes. We have not yet licensed any intellectual property from CSM,
however, the structure of the option agreement provides us with exclusive rights for a nominal cost until the Option Termination
Date. Our acquisition targets in the chemical distribution sector maintain a large customer base within the oil and gas production
industry. The patents named in the option contract could provide value as we interact with oil and gas producers on well optimization
techniques, however, we only holds the option to purchase the intellectual property and have not yet determined its immediate
value to potential acquisition targets. We have not exercised the option with CSM, but continue to evaluate the technology during
the exclusivity period.
Distribution and Marketing
Our acquisition targets usually
have existing distributor contracts through which most of their products are sold. Sales through additional distribution channels
will be evaluated after each asset acquisition to determine what opportunities exist to expand domestically as well as internationally.
Industry and Competition
Industrial Minerals:
The industrial minerals sector encompasses a large variety of minerals including: chamottes, ball clay, talc, feldspar, graphite,
ground silica, kaolin, pegmatite, quartz, mica, bauxite, bentonite, metakaolins, zeolite, frac sand, aggregates and vermiculite.
Industrial minerals are used in a variety of end projects for a variety of purposes. These minerals are used in ceramics, paints,
plastics, paper, rubber, food, cosmetics, and many other products.
There are significant barriers to
entry into industrial mineral production due to the scarcity of economically viable resources from which to extract the minerals.
Geographical location of the resource drives a large portion of the competitive advantages or disadvantages of an operation. Large
companies in this sector include Imerys, W.R. Grace, and Minerals Technologies.
Talc
Talc is a mineral
composed of hydrated magnesium silicate. It is the softest known
mineral and listed as “1” on the Mohs hardness scale. Talc is practically insoluble in water and in weak acids and
alkalis. It is neither explosive nor flammable. Although it has very little chemical reactivity, talc does have a marked affinity
for certain organic chemicals.
Talc is used as a functional filler
in the manufacturing of ceramics, rubbers, plastics and paints/coatings. It is also used for pitch control in paper manufacturing
and it is used to coat seeds in the agriculture industry.
Based on 2013 United States Geological
Survey (“USGS”) data, sales of talc produced domestically were estimated to be 589,000 tons valued at $89 million.
Sales of imported talc were estimated at 240,000 tons. We believe the value of imported talc per ton is estimated to be above
$300 based on data collected in the market place. Compared to other pricing indices (such as the S&P 500 and Case-Schiller
index), talc has experienced less pricing volatility, and has averaged growth of 3.6% annually, over a 20 year span.
Montana was the
leading producer state, followed by Texas, Vermont, and Virginia. The top three companies accounted for more than 99% of the U.S.
talc production. The total estimated use of talc in the United
States, including imported talc, was plastics, 27%; ceramics, 18%; paint, 16%; paper, 15%; roofing, 6%; cosmetics, 5%; rubber,
3%; and other, 10%.
Vermiculite
Vermiculite is a hydrated magnesium-aluminum-iron
silicate. Raw vermiculite is mica-like in appearance, contains water molecules within its internal structure, and ranges in color
from black to various shades of brown to yellow. When vermiculite flakes are heated rapidly to a temperature of 900 °C or
higher, the intermolecular water flashes into steam, and the flakes expand into accordion-like particles, which are gold or bronze
in color. This expansion process is called exfoliation, and the resulting lightweight material is chemically inert, fire resistant,
and odorless.
Vermiculite has a wide range of
uses particularly in the agricultural and construction industries because of its various attributes including fire resistance,
low thermal conductivity, high liquid absorption capacity, inertness, and low density. In horticulture, vermiculite mixed with
peat or other composted materials, such as pine bark, produces a soil-like material well suited as a growing medium for plants.
Based on 2013 USGS data, the end
market of about 64,000 tons of exfoliated vermiculite sold or used by producers was valued at about $50.1 million. There are approximately
18 facilities in the US which process vermiculite. There are only two companies which mine vermiculite domestically. U.S. domestic
prices for vermiculite concentrate, ex-plant, largely dependent on grade sizing, ranged from $150 to $580 per metric ton in 2014.
Frac Sand
"Frac sand" is a high-purity
quartz sand with very durable and very round grains. It is a crush-resistant material produced for use by the petroleum industry.
It is used in the hydraulic fracturing process (known as "fracking") to produce petroleum fluids, such as oil, natural
gas and natural gas liquids from rock units that lack adequate pore space for these fluids to flow to a well. Most frac sand is
a natural material made from high purity sandstone. An alternative product is ceramic beads made from sintered bauxite or small
metal beads made from aluminum.
Frac sand is produced in a range
of sizes from as small as 0.1 millimeter in diameter to over 2 millimeters in diameter depending upon customer specifications.
Most of the frac sand consumed is between 0.4 and 0.8 millimeters in size. Until recently, producers in Wisconsin and Texas were
supplying much of the frac sand used by the oil and gas industry. However, a huge spike in demand caused by the natural gas and
shale oil boom has motivated many companies to provide this product.
Total industrial sand and gravel
production in the United States increased to 62.1 million metric tons (Mt) in 2013 from 50.6 Mt in 2012. Industrial sand production
increased by 23%, and industrial gravel production decreased by 20%, compared with that of 2012. The value of production in 2013
was $3.47 billion—a 30% increase from that of 2012 and a record-high value for industrial sand and gravel production. Estimated
world production of industrial sand and gravel in 2013 was 142 Mt, a 9% increase compared with 2012 production.
Aggregates
Aggregates are key material components used in the production of cement, ready-mixed concrete and asphalt
paving mixes for the residential, nonresidential and public infrastructure markets and are also widely used for
various applications and products, such as road and building foundations, railroad ballast, erosion control, filtration, roofing granules
and in solutions for snow and ice control. Generally extracted from the earth using surface or underground mining and products, such methods,
aggregates are produced from natural deposits of various materials such as limestone, sand and gravel, granite and trap rock.
Markets are typically local due to high transport costs and are
generally fragmented, with numerous participants operating in localized markets. The top players controlled approximately 30%
of the national market in 2013. According to the March 2014 U.S. Geological Survey, the U.S. market for these products was
estimated at approximately 2.1 billion tons in 2013, at a total market value of $18.6 billion. Relative to other construction
materials, such as cement, aggregates consumption is more heavily weighted towards public infrastructure
and maintenance repair. However, the mix of end uses can vary widely by geographic location, based on the nature of construction activity in
each market. Typically, three to six competitors comprise the majority market share of each local market because of the
constraints around the availability of natural resources and transportation.
Industrial Chemicals:
Chemical distribution is a cyclical business dependent on industrial demand. The profitability of individual companies depends
on an efficient distribution system. Larger companies can offer more products and services. Local and regional distributors can
compete effectively through superior service or geographic focus.
Chemical products in the oil and
gas field segment includes iron sulfide, demulsifiers, corrosion inhibitor, emulsion breaker, paraffin solvent, biocides, methanol,
dispersant and scale inhibitor. Companies create proprietary blends of these chemicals based on regional production research to
solve and prevent production problems.
Other chemical products used in
the manufacturing, peroxide stabilization, surface refinishing and as catalysts include inorganic, organometallic, metal and acid
chemicals. This industry produces basic inorganic chemicals including titanium dioxide, chlor-alkali products and carbon black.
Inorganic chemicals are mineral based, while organic chemicals are carbon based. Inorganic chemicals are mainly used as inputs
in manufacturing and industrial processes. Inorganic chemicals used as pigments and dyes. Distribution networks are the primary
channel through which these chemicals are sold to manufacturers.
The U.S. industry is concentrated:
the largest 50 companies generate more than half of the revenue. Imports to the US of industrial chemicals and plastic resins,
largely from Canada, Germany, Japan, and China, are substantial. Many of these imports move through chemical distributors. Canada,
Mexico, China, Belgium, and Japan are the top recipients of US chemical exports. Major players in the global chemical market include:
DuPont, PPG, BASF, Dow, Bayer, DSM and USX.
Government Regulation
Our operations will be subject to
extensive federal, state and local laws, regulations and ordinances in the United States and abroad relating to the protection
of the environment and human health and to safety, including those pertaining to chemical manufacture and distribution, waste
generation, storage and disposal, discharges to waterways, and air emissions and various other health and safety matters. Governmental
authorities have the power to enforce compliance with their regulations, and violators may be subject to civil, criminal and administrative
penalties, injunctions or both. We will devote significant financial resources to ensure compliance, and we believe that we are
in substantial compliance with all the applicable laws and regulations.
We anticipate that the regulation
of our business operations under federal, state and local environmental laws in the United States and abroad will increase and
become more stringent over time. We cannot estimate the impact of increased and more stringent regulation on our operations, future
capital expenditure requirements or the cost of compliance.
United States Regulation.
Statutory programs relating to protection of the environment and human health and to safety in the United States include, among
others, the following.
CERCLA. The Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, also known as “CERCLA” and “Superfund”,
and comparable state laws generally impose joint and several liability for costs of investigation and remediation and for natural
resource damages, without regard to fault or the legality of the original conduct, on certain classes of persons with respect
to the release into the environment of specified substances, including under CERCLA those designated as “hazardous substances.”
These persons include the present and certain former owners or operators of the site where the release occurred and those that
disposed or arranged for the disposal of the hazardous substance at the site. These liabilities can arise in association with
the properties where operations were conducted, as well as disposal facilities where wastes were sent. Many states have adopted
comparable or more stringent state statutes. In the course of our operations, we generated materials that fall within CERCLA’s
definition of hazardous substances. We may be the owner or operator of sites on which hazardous substances have been released
and may have generated hazardous substances that have been transported to or otherwise released upon offsite facilities. We may
be responsible under CERCLA for all or part of the costs to clean up facilities at which such substances have been released by
previous owners or operators and offsite facilities to which our wastes were transported and for associated damages to natural
resources.
Resource Conservation and Recovery
Act. The federal Resource Conservation and Recovery Act, as amended (“RCRA”) and comparable state laws regulate
the treatment, storage, disposal, remediation and transportation of wastes, specifically under RCRA those designated as “hazardous
wastes.” The EPA and various state agencies have limited the disposal options for these wastes and impose numerous regulations
upon the treatment, storage, disposal, remediation and transportation of them. Our operations generate wastes that are subject
to RCRA and comparable state statutes. Furthermore, wastes generated by our operations that are currently exempt from treatment
as hazardous wastes may be designated in the future as hazardous wastes under RCRA or other applicable statutes and, therefore,
may be subject to more rigorous and costly treatment, storage and disposal requirements. Governmental agencies (and in the case
of civil suits, private parties in certain circumstances) can bring actions for failure to comply with RCRA requirements, seeking
administrative, civil, or criminal penalties and injunctive relief, to compel us to abate a solid or hazardous waste situation
that presents an imminent or substantial endangerment to health or the environment.
Clean Water Act. The federal
Clean Water Act imposes restrictions and strict controls regarding the discharge of wastes and fill materials into waters of the
United States. Under the Clean Water Act, and comparable state laws, the government (and in the case of civil suits, private parties
in certain circumstances) can bring actions for failure to comply with Clean Water Act requirements and enforce compliance through
civil, criminal and administrative penalties for unauthorized discharges of hazardous substances and of other pollutants. In the
event of an unauthorized discharge of wastes, we may be liable for penalties and subject to injunctive relief.
Clean Air Act . The federal
Clean Air Act (CAA), as amended and comparable state and local laws restrict the emission of air pollutants from many sources
and also impose various monitoring and reporting requirements. These laws may require us to obtain pre-approval for the construction
or modification of certain projects or facilities expected to produce or significantly increase air emissions, obtain and strictly
comply with air permit requirements or utilize specific equipment or technologies to control emissions. Governmental agencies
(and in the case of civil suits, private parties in certain circumstances) can bring actions for failure to strictly comply with
air pollution regulations or permits and generally enforce compliance through administrative, civil or criminal enforcement actions,
resulting in fines, injunctive relief (which could include requiring us to forego construction, modification or operation of sources
of air pollutants) and imprisonment. While we may be required to incur certain capital expenditures for air pollution control
equipment or other air emissions-related issues, we do not believe that such requirements will have a material adverse effect
on our operations.
Greenhouse Gas Regulation
. More stringent laws and regulations relating to climate change and greenhouse gases (GHGs) may be adopted in the future and
could cause us to incur material expenses in complying with them. The EPA has begun to regulate GHGs as pollutants under the CAA.
The EPA adopted rules to permit GHG emissions from stationary sources under the Prevention of Significant Deterioration and Title
V permitting programs including the “Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule,”
requiring that the largest sources first obtain permits for GHG emissions. The United States Supreme Court, however, ruled that
the EPA did not have the authority to require permits for GHG emissions and also did not have the authority to adopt that rule.
The Court did hold that if a source required a permit under the program because of other pollutants, the EPA had the authority
to require that the source demonstrate that it would use the best available control technology to minimize GHG emissions that
exceeded a minimal amount.
Because of the lack of any comprehensive
legislation program addressing GHGs, the EPA is using its existing regulatory authority to promulgate regulations requiring reduction
in GHG emissions from various categories of sources, starting with fossil fuel-fired power plants. There is a great deal of uncertainty
as to how and when additional federal regulation of GHGs might take place. Some members of Congress have expressed the intention
to promote legislation to curb the EPA’s authority to regulate GHGs. In addition to federal regulation, a number of states,
individually and regionally, and localities also are considering implementing or have implemented GHG regulatory programs. These
regional and state initiatives may result in so–called cap–and–trade programs, under which overall GHG emissions
are limited and GHG emission “allowances” are then allocated and sold to and between persons subject to the program.
These and possibly other regulatory requirements could result in our incurring material expenses to comply, for example by being
required to purchase or to surrender allowances for GHGs resulting from other operations or otherwise being required to control
or reduce emissions.
Occupational Safety. Our
operations are also governed by laws and regulations relating to workplace safety and worker health, principally the Occupational
Safety and Health Act (OSHA) and its regulations. The OSHA hazard communication standard, the EPA’s community right-to-know
regulations and similar state programs may require us to organize and/or disclose information about hazardous materials used or
produced in our operations. We believe that we are in substantial compliance with these applicable requirements.
Foreign Regulation. We are
subject to various laws, regulations and ordinances to protect the environment, human health and safety promulgated by the governmental
authorities in Mexico, Europe, Singapore, and in other countries where we do business. Each country has laws and regulations concerning
waste treatment, storage and disposal, discharges to waterways, air emissions and workplace safety and worker health. Their respective
regulatory authorities are given broad authority to enforce compliance with environmental, health and safety laws and regulations,
and can require that operations be suspended pending completion of required remedial action.
Licenses, Permits and Product
Registrations. Certain licenses, permits and product registrations are required for our products and operations in the United
States, and in other countries where we do business. The licenses, permits and product registrations are subject to revocation,
modification and renewal by governmental authorities. In the United States in particular, producers and distributors of chemicals
such as penta and creosote are subject to registration and notification requirements under federal law (including under the Federal
Insecticide, Fungicide and Rodenticide Act (“FIFRA”) and the Toxic Substances Control Act, and comparable state law)
in order to sell those products in the United States. Compliance with these laws has had, and in the future will continue to have,
a material effect on our business, financial condition and results of operations. Under FIFRA, the law’s registration system
requires an ongoing submission to the EPA of substantial scientific research and testing data regarding the chemistry and toxicology
of pesticide products by manufacturers.
Employees
We currently have 2 full-time employees.
Description of Property
We currently own no real property
or equipment. The Company occupies office space at 9595 Wilshire Bl., Suite 310, Beverly Hills, California 90212. This office
space is provided at no charge by an affiliate of Rocky Mountain Resource Holdings, Inc., which is a shareholder of the Company.
The Company feels that this space is sufficient until the Company significantly expands operations.
Legal Proceedings
There are no material pending legal
proceedings to which we are a party or to which any of our property is subject, nor are there any such proceedings known to be
contemplated by governmental authorities. None of our directors, officers or affiliates is involved in a proceeding adverse to
our business or has a material interest adverse to our business.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
The statements contained in all
parts of this document that are not historical facts are, or may be deemed to be, “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking
statements include, but are not limited to, those relating to the following: our ability to secure necessary financing; expected
growth; future operating expenses; future margins; fluctuations in interest rates; ability to continue to grow and implement growth,
and regarding future growth, cash needs, operations, business plans and financial results and any other statements that are not
historical facts.
When used in this document, the
words “anticipate,” “estimate,” “expect,” “may,” “plans,” “project,”
and similar expressions are intended to be among the statements that identify forward-looking statements. Our results may differ
significantly from the results discussed in the forward-looking statements. Such statements involve risks and uncertainties, including,
but not limited to, those relating to costs, delays and difficulties related to our dependence on our ability to attract and retain
skilled managers and other personnel; the intense competition within our industry; the uncertainty of our ability to manage and
continue our growth and implement our business strategy; our vulnerability to general economic conditions; accuracy of accounting
and other estimates; our future financial and operating results, cash needs and demand for services; and our ability to maintain
and comply with permits and licenses; as well as other risk factors described in this Registration Statement. Should one or more
of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially
from those projected.
Overview
We were incorporated in the State
of Nevada on August 6, 2012 under the name “Online Yearbook” with the principal business objective of developing and
marketing online yearbooks for schools, companies and government agencies.
On November 17, 2014, Rocky Mountain
Resource Holdings, Inc. (the “RMRH”) became our majority shareholder by acquiring 5,200,000 shares of our common stock
(the “Shares”), or 69.06% of the issued and outstanding shares of our common stock, pursuant to stock purchase agreements
with Messrs. El Maraana and Salah Blal, our former officers and directors. The Shares were acquired for an aggregate purchase
price of $357,670.
On December 8, 2014, we changed
our name to “RMR Industrials, Inc.” in connection with the change in our business plan.
On February 27, 2015 (the “Closing
Date”), we entered into and consummated a merger transaction pursuant to an Agreement and Plan of Merger (the “Merger
Agreement”) by and among the Company, OLYB Acquisition Corporation, a Nevada corporation and wholly owned subsidiary of
the Company (“Merger Sub”) and RMR IP, Inc., a Nevada corporation (“RMR IP”). In accordance with the terms
of Merger Agreement, on the Closing Date, Merger Sub merged with and into RMR IP (the “Merger”), with RMR IP surviving
the Merger as our wholly owned subsidiary. Chad Brownstein and Gregory M. Dangler are directors of the Company and co-owners of
RMRH which was the majority shareholder of the Company prior to the Merger. Additionally, Messrs. Brownstein and Dangler were
indirect controlling shareholders and directors of RMR IP prior to the Merger. As such, the Merger was among entities under the
common control of Messrs. Brownstein and Dangler.
We currently own an option to purchase
intellectual property from the Colorado School of Mines (“CSM”). The Company met with CSM’s Technology Transfer
group, who presented current projects in progress that may be available for commercial licensing opportunities. No third parties
or agents were engaged with our negotiations of the option agreement with CSM, which terminates on July 25, 2015 unless extended
for additional $3,000 for each of two available three-month periods, not to extend past November 25, 2015 (the “Option Termination
Date”). The option includes three patent applications and one issued patent. These patents describe a process to increase
oil production through modified injection processes. We have not yet licensed any intellectual property from CSM, however, the
structure of the option agreement provides the Company with exclusive rights for a nominal cost until the Option Termination Date.
The patents named in the option contract could provide value as we interact with oil and gas producers on well optimization techniques
however we only hold the option to purchase the intellectual property and have not yet determined its immediate value to potential
acquisition targets.
We plan to acquire and consolidate
complementary industrial assets. Typically these small to mid-sized assets are the core manufacturer and supplier of specific
bulk commodity minerals and chemicals distributed to the global manufacturer industry. Our consolidation strategy is to assemble
a portfolio of mature and value-add industrial commodities businesses to generate scalable enterprises with a large portfolio
of products and services addressing a common and stable customer base. We believe that smaller, legacy-owned industrial companies
will benefit from economies of scale and professional asset allocation. Our acquisition strategy seeks to capitalize on the price
differential between public company and private company valuations, while also providing the platform to access capital markets
and professional management oversight.
Results
of Operations
Three Months Ended March
31, 2015 and from October 15, 2014 (inception) to January 31, 2015
Revenues
We have a limited operational history.
From inception on October 15, 2014 to March 31, 2015, we did not generate any revenues.
Operating
Expenses
Our operating expenses for the three
months ended March 31, 2015 was $514,277, and for the period from October 15, 2014 (inception) through January 31, 2015 was $407,521.
Operating expenses consisted of consulting services from related parties, public company costs and amortization of intangible
assets.
Net Loss
During the three months ended March
31, 2015 and the period from October 15, 2014 (inception) through January 31, 2015, we recognized net losses of $514,277 and $407,521,
respectively.
Liquidity
and Capital Resources
On March 31, 2015, we had current
assets of $4,733, total current liabilities of $855,163 and working capital deficit of $850,430.
During the period from inception
to March 31, 2015, we raised $4,733 through the issuance of common stock by subscription agreements.
On March 23, 2015, we entered into
an engagement letter with Roth Capital Partners, LLC (“Roth”) whereby Roth will serve as our placement agent in connection
with a potential capital raise from accredited investors through the sale of debt and/or equity-linked securities.
We have incurred an accumulated
loss of $848,464 since inception. Our independent auditors have issued an audit opinion for our financial statements for the periods
ended January 31, 2015, which includes a statement expressing substantial doubt as to our ability to continue as a going concern
due to our limited liquidity and our lack of revenues.
Our consolidation strategy is to
assemble a portfolio of mature and value-add industrial commodities businesses to generate scalable enterprises with a large portfolio
of products and services addressing a common and stable customer base. Our current cash requirements are significant due to projected
expenses for implementation of our business plan, and we anticipate generating losses. We will need approximately $100,000 in
additional funds over the next 12 months in order to satisfy our reporting obligations as a public company, including operational,
accounting and legal costs.
On June 26, 2015, our wholly-owned
subsidiary, United States Talc and Minerals Inc. (“USTM”), entered into a non-binding financing arrangement with Auramet
International LLC (“Auramet”), whereby subject to certain conditions, including but not limited to, the approval of
a satisfactory acquisition candidate, technical due diligence and an executable acquisition purchase agreement, Auramet will loan
USTM the principal amount of $12,000,000. The maturity date of such note will be on the second anniversary of the closing
and such note will accrue interest at a rate of 15% annually. The note shall be secured by a first priority lien on all
the assets of USTM. We have also entered into a non-binding mezzanine financing arrangement with Auramet, whereby subject
to meeting certain conditions, Auramet will loan USTM an additional principal amount of $5,000,000. The maturity date of such
note will be on the second anniversary of the closing and such note will accrue interest at a rate of 15% annually. The note shall
be secured by a second priority lien on certain assets of USTM. There are no assurances that USTM will enter into binding loan
agreements with Auramet, and upon terms that are ultimately satisfactory to us. Any such failure will result in USTM and us having
to seek financing from other potential sources.
We will be seeking additional capital
to execute our business plan and reach positive cash flow from operations. Our base monthly expenses are $50,000 per month. In
order to successfully execute our business plan, the net proceeds of a $____ offering will be required to finance our planned
acquisition and for general working capital purposes.
We do not internally generate adequate
cash flows to support our existing operations. Moreover, the historical and existing capital structure is not adequate to fund
our planned growth. Our current cash requirements are significant due to our business plan which will depend on future acquisitions.
We anticipate generating losses through 2015. We anticipate that we will be able to raise sufficient amounts of working capital
in the near term through debt or equity offerings as may be required to meet short-term obligations, including by issuing additional
Class B Common Stock through a public offering. We are filing with the Securities and Exchange Commission an initial registration
statement for this public offering of ____ shares of Class B Common Stock. We intend to work towards consummating this offering
during the fourth quarter of 2015. The exact financial terms of this offering are not known, and the actual number of shares of
Class B Common Stock that we may be able to sell depends on multiple factors, including those referenced in “Risk Factors — Risks
Related to this Offering and Our Common Stock.”
Other than as stated above, we currently
do not have any arrangements for additional financing and we may not be able to obtain financing when required. Our future is
dependent upon our ability to obtain financing, a successful marketing and promotion program and, further in the future, achieving
a profitable level of operations. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities
and future cash commitments. We will require additional funds to maintain our reporting status with the SEC and
remain in good standing with the state of Nevada. There are no assurances that we will be able to raise the required working capital
on terms favorable, or that such working capital will be available on any terms when needed. Any failure to secure additional
financing may force us to modify our business plan. In addition, we cannot be assured of profitability in the future.
Going Concern
We have incurred net losses since
our inception on October 15, 2014 through March 31, 2015 totaling $848,464 and have completed the preliminary stages of our business
plan. We anticipate incurring additional losses before realizing any revenues and will depend on additional financing
in order to meet our continuing obligations and ultimately, to attain profitability. Our ability to obtain additional
financing, whether through the issuance of additional equity or through the assumption of debt, is uncertain. Accordingly,
our independent auditors’ report on our financial statements for the period from inception (October 15, 2014) through January
31, 2015 includes an explanatory paragraph regarding concerns about our ability to continue as a going concern, including additional
information contained in the notes to our financial statements describing the circumstances leading to this disclosure. The
financial statements do not include any adjustments that might result from the uncertainty about our ability to continue our business.
Recently
Issued Accounting Pronouncements
We do not expect
the adoption of any recently issued accounting pronouncements to have a significant impact on our net results of operations, financial
position, or cash flows.
Off-Balance
Sheet Arrangements
We have no
off-balance sheet arrangements.
CHANGES IN
AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller
reporting company, the Company is not required to provide this disclosure.
DIRECTORS
AND EXECUTIVE OFFICERS
Set forth below are the names, ages
and present principal occupations or employment, and material occupations, positions, offices or employments of our current Directors
and executive officers.
Name |
|
Age |
|
Position |
Chad Brownstein |
|
42 |
|
Chief Executive Officer and Director |
Gregory M. Dangler |
|
33 |
|
President, Chief Financial Officer, Secretary and Director |
Andrew Peltz |
|
49 |
|
Director |
Biographies
Chad Brownstein is the Chief
Executive Officer of RMR IP, where he is responsible for the corporate strategy and board oversight for all investments. Since
2014, Mr. Brownstein has been the Chief Executive Officer and Director of RMR Industrials, Inc. (“RMRI”), an industrial
commodities company. Mr. Brownstein is responsible for assisting the corporate strategy and board oversight for all acquisition
opportunities at RMRI. Since 2008, Mr. Brownstein has been a partner at Rocky Mountain Resource Holdings and/or its predecessor
affiliates, a natural resources operating and investment company. Mr. Brownstein has been a member of the board of directors beginning
in 2009, and is currently lead independent director and the Vice Chairman of the Banc of California. Previously, from 2009 to
2012, Mr. Brownstein was a principal member of Crescent Capital Group, an investment firm (formerly Trust Company of the West
Leveraged Finance Group) focused on special situations. During 2008, Mr. Brownstein was a Senior Advisor at Knowledge Universe
Ltd., a global education company, where he focused on turnaround operations. From 2000 to 2007, he was a Partner at ITU Ventures,
a venture capital firm, making venture and growth investments with a specialization in corporate strategy. Mr. Brownstein began
his career in 1996 at Donaldson Lufkin & Jenrette in the Merchant and Investment Banking divisions. Mr. Brownstein is either
a current or past member of the Cedars Sinai Board of Governors, Los Angeles Conservation Corps, Prospect Global Resources, and
The Palisades Group LLC, a Banc of California Company. Mr. Brownstein attended Columbia Business School and received his B.A.
from Tulane University.
Gregory Dangler is the President
and Chief Financial Officer of RMR IP, where he is responsible for the day-to-day operations of all business units. Since 2014,
Mr. Dangler has been the President, Chief Financial Officer, and Director of RMRI, an industrial commodities company. Mr. Dangler
is responsible for the day-to-day operations and corporate financial strategy of RMRI. Since 2008, Mr. Dangler has been a partner
at Rocky Mountain Resource Holdings and/or its predecessor affiliates, a natural resources operating and investment company. Previously,
from 2012-present, Mr. Dangler has served in multiple capacities, including Chief Restructuring Officer of Prospect Global Resources,
a natural resource development company. Prior to that, in 2009, Mr. Dangler founded a venture-backed technology company. As the
Chief Executive, he raised institutional capital and expanded its global presence with operating interests in Africa and South
America. From 2006 to 2007, Mr. Dangler was an associate with ITU Ventures, a venture capital firm, making venture and growth
investments. While with ITU, Mr. Dangler executed private and public equity transactions, directed M&A activity, and provided
strategic support to portfolio companies. In 2000, Mr. Dangler began his career in the U.S. Air Force and by 2004 was managing
complex infrastructure projects. Mr. Dangler received a BS in Mechanical Engineering from the United States Air Force Academy
and an MBA from the University of Southern California’s Marshall School of Business.
Andrew Peltz is a Partner
at Peltz Capital Management (“PCM”). Prior to forming PCM in 2003, Mr. Peltz worked at Triarc Companies, Inc. from
1999 to 2003 where he held the titles of Vice President, Investment Services and as an Associate of Corporate Development. He
was primarily responsible for the day-to-day oversight of Triarc’s $650 million plus investment portfolio. Prior to Triarc,
Mr. Peltz was Senior Investment Banker at Credit Agricole Lazard Financial Products Bank from 1997 to 1998, which is a joint venture
between Lazard Freres & Co. and Credit Agricole, specializing in structured finance transactions. From 1996 to 1997, Mr. Peltz
also served as a marketing associate for Lazard Asset Management, a division of Lazard Freres & Co., where he marketed their
vast array of fixed income, equity and alternative investment products. Mr. Peltz holds a BFA from New York University.
The Company believes that Mr. Peltz’s
education and management and accounting experience make him a valuable member to the Company’s board of directors.
Board Composition
Our By-Laws provide that the Board
of Directors shall consist of not less than one nor more than fifteen directors. Each director of the Company serves until his
successor is elected and qualified, subject to removal by the Company's majority shareholders. Each officer shall hold their offices
for such terms and shall exercise such powers and perform such duties as shall be determined by the Board of Directors, and shall
hold his office until his successor is elected and qualified, or until his earlier resignation or removal.
Audit Committee
Our Board of Directors has not established
a separate audit committee within the meaning of Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). Instead, the entire Board of Directors acts as the audit committee within the meaning of Section 3(a)(58)(B) of the
Exchange Act and will continue to do so until such time as a separate audit committee has been established.
Code of Ethics
The Company has adopted a Code of
Ethics applicable to all Company directors, officers and employees which is available upon written request to the Company at c/o
RMR Industrials, Inc., 9595 Wilshire Blvd, Suite 310, Beverly Hills, CA 90212
Potential Conflicts of Interest
Since we do not have an audit or
compensation committee comprised of independent directors, the functions that would have been performed by such committees are
performed by our directors. Thus, there is a potential conflict of interest in that our directors and officers have the authority
to determine issues concerning management compensation and audit issues that may affect management decisions. We are not aware
of any other conflicts of interest with any of our executives or directors.
Involvement in Certain Legal
Proceedings
No director, executive officer,
significant employee or control person of the Company has been involved in any legal proceeding listed in Item 401(f) of Regulation
S-K in the past 10 years.
Compliance with Section 16(a)
Of the Exchange Act
Section 16(a) of the Exchange Act
requires our directors, executive officers, and shareholders holding more than 10% of our outstanding Class B Common Stock to
file with the SEC initial reports of ownership and reports of changes in beneficial ownership of our Class B Common Stock. Executive
officers, directors, and persons who own more than 10% of our Class B Common Stock are required by SEC regulations to furnish
us with copies of all Section 16(a) reports they file.
Based solely upon a review of Forms
3, 4, and 5 delivered to us as filed with the SEC during our most recent fiscal year, none of our executive officers and directors,
and persons who own more than 10% of our Class B Common Stock failed to timely file the reports required pursuant to Section 16(a)
of the Exchange Act.
Nominations to the Board of Directors
Our directors take a critical role
in guiding our strategic direction and oversee the management of the Company. Board candidates are considered based upon various
criteria, such as their broad-based business and professional skills and experiences, a global business and social perspective,
concern for the long-term interests of the shareholders, diversity, and personal integrity and judgment
In addition, directors must have
time available to devote to Board activities and to enhance their knowledge in the growing business. Accordingly, we seek to attract
and retain highly qualified directors who have sufficient time to attend to their substantial duties and responsibilities to the
Company.
In carrying out its responsibilities,
the Board will consider candidates suggested by shareholders. If a shareholder wishes to formally place a candidate’s name
in nomination, however, he or she must do so in accordance with the provisions of the Company’s Bylaws. Suggestions for
candidates to be evaluated by the directors must be sent to the Board of Directors, c/o RMR Industrials, Inc., 9595 Wilshire Blvd,
Suite 310, Beverly Hills, CA 90212.
Board Leadership Structure and
Role on Risk Oversight
Gregory Dangler, Chad Brownstein,
and Andrew Peltz comprise our Board of Directors, with Mr. Brownstein serving as our Chief Executive Officer. We have determined
this leadership structure is appropriate for us due to our small size and limited operations and resources. The Board of
Directors will continue to evaluate our leadership structure and modify as appropriate based on our size, resources and operations.
Currently, our Board of Directors
is establishing procedures to determine an appropriate role for the Board of Directors in the Company’s risk oversight function.
Compensation Committee Interlocks
and Insider Participation
No interlocking relationship exists
between our board of directors and the board of directors or compensation committee of any other company, nor has any interlocking
relationship existed in the past.
Family Relationships
There are no family relationships
between or among the directors or executive officers.
EXECUTIVE
COMPENSATION
Summary Compensation
The following table sets forth information
concerning the annual and long-term compensation awarded to, earned by, or paid to the named executive officers and directors
for all services rendered in all capacities to our Company for the period from October 15, 2014 (inception) through January 31,
2015:
SUMMARY COMPENSATION
TABLE |
| |
| |
| | |
| | |
| | |
| | |
Non- | | |
| | |
| |
| |
| |
| | |
| | |
| | |
| | |
Equity | | |
| | |
| |
| |
| |
| | |
| | |
| | |
| | |
Incentive | | |
All | | |
| |
| |
| |
| | |
| | |
| | |
| | |
Plan | | |
Other | | |
| |
| |
| |
| | |
| | |
Stock | | |
Option | | |
Compensa- | | |
Compensa- | | |
| |
| |
| |
Salary | | |
Bonus | | |
Awards | | |
Awards | | |
tion | | |
tion | | |
Total | |
Name & Principal Position | |
Year | |
($) | | |
($) | | |
($) | | |
($) | | |
($) | | |
($) | | |
($) | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Chad Brownstein | |
2014 | |
| 122,500 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 122,500 | |
CEO & Director | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Gregory Dangler | |
2014 | |
| 122,500 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 122,500 | |
CFO & Director | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
We have no pension, health, annuity,
bonus, insurance, stock options, profit sharing, or similar benefit plans. No stock options or stock appreciation rights have
been granted to any of our directors or executive officers; none of our directors or executive officers exercised any stock options
or stock appreciation rights; and none of them hold unexercised stock options. We have no long-term incentive plans.
Outstanding Equity Awards
Our directors and officers do not
have unexercised options, stock that has not vested, or equity incentive plan awards.
Compensation of Directors
Other than as disclosed in the compensation
table above, our directors do not receive compensation for their services as directors.
Potential Payments Upon Termination
or Change-in-Control
SEC regulations state that we must
disclose information regarding agreements, plans or arrangements that provide for payments or benefits to our named executive
officers in connection with any termination of employment or change in control of the Company. Please see the section entitled
“Employment Agreements” below for a discussion of management compensation in the event of a termination of employment
or change in control of the Company.
Employment Agreements
None.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain
information as of June 26, 2015, with respect to the beneficial ownership of our Class A Common Stock and Class B Common Stock
for (i) each director and officer, (ii) all of our directors and officers as a group, and (iii) each person known to us to own
beneficially five percent (5%) or more of the outstanding shares of our Class A Common Stock or Class B Common Stock. Unless otherwise
specified below, the address of each of the persons listed in the table below is c/o RMR Industrials, Inc., 9595 Wilshire Blvd.
#310, Beverly Hills, CA 90212.
To our knowledge, except as indicated
in the footnotes to this table or pursuant to applicable community property laws, the persons named in the table have sole voting
and investment power with respect to the shares of common stock indicated.
Name and Address of Beneficial Owner(1) | |
Shares Beneficially Owned | | |
Class of Common Stock | |
Percentage Beneficially Owned(2) | | |
Total Voting Power(3) | |
| |
| | |
| |
| | |
| |
Directors and Executive Officers | |
| | | |
| |
| | | |
| | |
| |
| | | |
| |
| | | |
| | |
Gregory M. Dangler | |
| 9,499,657 | (4) | |
Class A | |
| 26.55 | % | |
| 26.55 | % |
President, Chief Financial Officer, Secretary and Director | |
| 5,200,000 | (4) | |
Class B | |
| 32.21 | % | |
| 32.21 | % |
| |
| | | |
| |
| | | |
| | |
Chad Brownstein | |
| 10,791,701 | (5) | |
Class A | |
| 30.16 | % | |
| 30.16 | % |
Chief Executive Officer, Director | |
| 5,200,000 | (5) | |
Class B | |
| 32.21 | % | |
| 32.21 | % |
| |
| | | |
| |
| | | |
| | |
Andrew Peltz | |
| 300,000 | | |
Class B | |
| 1.86 | % | |
| 1.86 | % |
Director | |
| | | |
| |
| | | |
| | |
| |
| | | |
| |
| | | |
| | |
All Officers and Directors as a Group | |
| 20,291,358 | | |
Class A | |
| 56.70 | % | |
| 56.70 | % |
| |
| 5,500,000 | | |
Class B | |
| 34.07 | % | |
| 34.07 | % |
| |
| | | |
| |
| | | |
| | |
5% Shareholders | |
| | | |
| |
| | | |
| | |
| |
| | | |
| |
| | | |
| | |
Legado Del Rey, LLC | |
| 15,494,500 | (6) | |
Class A | |
| 43.30 | % | |
| 43.30 | % |
121 South Beverly Drive | |
| | | |
| |
| | | |
| | |
Beverly Hills, CA 90212 | |
| | | |
| |
| | | |
| | |
| |
| | | |
| |
| | | |
| | |
Principio Management LLC | |
| 9,499,657 | | |
Class A | |
| 26.55 | % | |
| 26.55 | % |
77727111, LLC | |
| 10,791,701 | | |
Class A | |
| 30.16 | % | |
| 30.16 | % |
| |
| | | |
| |
| | | |
| | |
Rocky Mountain Resource Holdings, Inc. | |
| 5,200,000 | | |
Class B | |
| 32.21 | % | |
| 32.21 | % |
| |
| | | |
| |
| | | |
| | |
The Munitz Family Trust | |
| 3,000,000 | (7) | |
Class B | |
| 18.58 | % | |
| 18.58 | % |
9595 Wilshire Blvd. #310 | |
| | | |
| |
| | | |
| | |
Beverly Hills, CA 90212 | |
| | | |
| |
| | | |
| | |
|
(1) |
Beneficial ownership has been determined in accordance with Rule
13d-3 under the Exchange Act. Pursuant to the rules of the SEC, shares of common stock which an individual or group has a
right to acquire within 60 days pursuant to the exercise of options or warrants are deemed to be outstanding for the purpose
of computing the percentage ownership of such individual or group, but are not deemed to be beneficially owned and outstanding
for the purpose of computing the percentage ownership of any other person shown in the table. |
|
(2) |
Based on 35,785,858 shares of Class A Common Stock and 16,144,142
shares of Class B Common Stock outstanding as of June 26, 2015. |
|
(3) |
The Company has Class A Common Stock and Class B Common Stock. The
holders of Class A Common Stock will have the right to vote on all matters on which stockholders have the right to vote. The
holders of Class B Common Stock will have the right to vote solely on matters where the vote of such holders is explicitly
required under Nevada law, such as an approval of a plan of merger, exchange or conversion, an increase or decrease in the
number of authorized shares of a class or series of stock in certain circumstances, and other situations as required by Nevada
law where the rights, preferences or limitations of such holders are adversely impacted. On matters which the applicable
class of stockholders have the right to vote, each Class A Common Stock and Class B Common Stock shall be entitled to one
vote per share. |
|
(4) |
Mr. Gregory M. Dangler is the indirect owner of 9,499,657 shares
of Class A Common Stock, which are directly held by Principio Management LLC (“Principio”). Mr. Dangler is the
managing member owner of Principio and has sole voting and dispositive power over the shares held by Principio. Mr. Gregory
M. Dangler is also the indirect owner of 5,200,000 shares of Class B Common Stock, which are directly held by RMRH, and has
shared voting and dispositive power over the shares held by RMRH. Principio and 77727111 have agreed to vote unanimously on
all matters requiring the vote of shares of Class Common Stock pursuant to a voting agreement. |
|
(5) |
Mr. Chad Brownstein is the indirect owner of 10,791,701 shares of
common stock, which are directly held by 77727111, LLC. Mr. Brownstein is the managing member of 77727111 LLC and has sole
voting and dispositive power over the shares held by 77727111 LLC. Mr. Chad Brownstein is also the indirect owner of 5,200,000
shares of Class B Common Stock, which are directly held by RMRH, and has shared voting and dispositive power over the shares
held by RMRH. Principio and 77727111 have agreed to vote unanimously on all matters requiring the vote of shares
of Class Common Stock pursuant to a voting agreement. |
|
(6) |
Edward Czuker is the manager of Legado Del Rey, LLC and has sole
voting and dispositive power over the shares held by this entity. |
|
(7) |
Barry Munitz is the trustee of The Munitz Family Trust and has sole
voting and dispositive power over the shares held by this entity. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE
Certain Relationships and Transactions
On November 17, 2014, RMRH became the majority shareholder of the
Company by acquiring 5,200,000 shares of common stock of the Company (the “Shares”), or 69.06% of the issued and outstanding
shares of common stock, pursuant to certain stock purchase agreements with former stockholders of the Company. The Shares were
acquired for an aggregate purchase price of $357,670.50. RMRH was the source of the funds used to acquire the Shares. Mr. Brownstein
is the owner of 50% of the outstanding capital stock of RMRH and is the Chief Executive Officer and a director of RMRH. Mr. Dangler
is the owner of 33.5% of the outstanding capital stock of RMRH and is the President, Chief Financial Officer and a director of
RMRH.
Since inception, the Company accrued $341,650 in amounts owed to
related parties for services performed or reimbursement of costs on behalf of the Company.
On October 15, 2014, RMR, IP entered into consulting agreements
with each of Gregory Dangler, who is our current President, and Chad Brownstein, who is our current Chief Executive Officer, pursuant
to which each of Mr. Dangler and Brownstein would provide services related to their roles as executive officers of the Company.
The Company has accrued $385,000 for unpaid officers’ compensation expense in accordance with such consulting agreements.
Under the terms of each consulting agreement, each consultant shall serve as an executive officer to the Company and receive monthly
compensation of $35,000. The consulting agreements may be terminated by either party for breach or upon thirty days prior written
notice.
On October 15, 2014, RMR, IP entered into consulting agreements
with each of Principio Management LLC, which holds 9,499,657 shares of Class A Common Stock of the Company (26.55%), and 77727111,
LLC, is the owner of 10,791,701 shares of Class A Common Stock of the Company (30.16%), relating to certain services provided
by each of these entities. Mr. Dangler is the sole owner of Principio Management LLC and Mr. Brownstein is the sole owner of 77727111,
LLC.
On February 1, 2015, RMR, IP entered into a management services
agreement with Industrial Management LLC (“IM”), to provide services to RMR, IP and affiliated entities, which include
assistance in operational and administrative matters, identifying, analyzing, and structuring growth initiatives, and potential
strategic acquisitions. As compensation for these services, RMR, IP will pay to IM an annual cash management fee in an amount
equal to the greater of 2% of the Company’s annual gross revenues or $1,000,000, and a development fee with respect to any
capital project incurred by RMR IP equal to 2% of total project costs. In addition, IM has the option to be assigned all available
royalties from RMR IP’s mineral holdings, leases or interests greater than 75% of net revenue interests for all mineral
rights or production of minerals. At IM’s sole discretion, it may choose to accept a preferred convertible security with
a 15% dividend accruing quarterly in lieu of cash for some or all of the annual management fee, development fee and royalty assignments.
Such preferred convertible securities shall be convertible into either Class A Common Stock or Class B Common Stock (as applicable)
at a conversion price equal to fifty percent of the market price of the applicable Class B Common Stock on the day prior to the
date of issuance. In addition, these preferred convertible securities are callable for a cash, for a period of six months following
the date of issuance; provided, however, that if called, IM shall have the option to convert the called preferred stock into either
Class A Common Stock or Class B Common Stock (as applicable) at a conversion price equal to sixty-six and two thirds percent of
the market price of the applicable Class B Common Stock on the business day immediately preceding the issuance date of preferred
stock, and will include a blocker provision. In connection with the management services agreement with IM, RMR IP entered into
a registration rights agreement which requires RMR IP to register for resale any securities issued as consideration under the
management services agreement. The registration rights agreements provides for both demand and piggy back registration rights,
and requires that IM not transfer any shares of RMR IP during a 90 day period following the effective date of a registration statement.
The registration rights agreement terminates when the shares held by IM become eligible for resale pursuant to Rule 144.
Other than as set forth above, none of our current officers or
directors have been involved in any material proceeding adverse to the Company or any transactions with the Company or any of
its directors, executive officers, affiliates or associates that are required to be disclosed pursuant to the rules and regulations
of the SEC.
Review, Approval or Ratification of Transactions with Related
Persons
Although we have adopted a Code of Ethics, we also rely on our
Board to review related party transactions on an ongoing basis to prevent conflicts of interest. Our Board reviews a transaction
in light of the affiliations of the director, officer or employee and the affiliations of such person’s immediate family.
Transactions are presented to our Board for approval before they are entered into or, if this is not possible, for ratification
after the transaction has occurred. If our Board finds that a conflict of interest exists, then it will determine the appropriate
remedial action, if any. Our Board approves or ratifies a transaction if it determines that the transaction is consistent with
the best interests of the Company.
Director Independence
During the fiscal year ended September 30, 2014, we had no independent
directors on our board. We evaluate independence by the standards for director independence established by applicable laws, rules,
and listing standards including, without limitation, the standards for independent directors established by The New York Stock
Exchange, Inc., the NASDAQ National Market, and the Securities and Exchange Commission.
Subject to some exceptions, these standards generally provide that
a director will not be independent if (a) the director is, or in the past three years has been, an employee of ours; (b) a member
of the director’s immediate family is, or in the past three years has been, an executive officer of ours; (c) the director
or a member of the director’s immediate family has received more than $120,000 per year in direct compensation from us other
than for service as a director (or for a family member, as a non-executive employee); (d) the director or a member of the director’s
immediate family is, or in the past three years has been, employed in a professional capacity by our independent public accountants,
or has worked for such firm in any capacity on our audit; (e) the director or a member of the director’s immediate family
is, or in the past three years has been, employed as an executive officer of a company where one of our executive officers serves
on the compensation committee; or (f) the director or a member of the director’s immediate family is an executive officer
of a company that makes payments to, or receives payments from, us in an amount which, in any twelve-month period during the past
three years, exceeds the greater of $1,000,000 or two percent of that other company’s consolidated gross revenues.
UNDERWRITING
We have entered into an underwriting agreement with ,
as representative of the underwriters, with respect to the Class B Common Stock being offered hereby. Subject to certain conditions,
we have agreed to sell to the underwriters, and the underwriters have agreed to purchase from us, [_____] shares of Class B Common
Stock.
Underwriter | |
Shares of Common
Stock | |
| |
| | |
Total | |
| | |
The underwriters are offering the Class B Common Stock. The underwriting
agreement provides that the obligation of the underwriters to pay for and accept delivery of the Class B Common Stock offered
by this prospectus is subject to the approval of certain legal matters by their counsel and to certain other conditions. The underwriters
are obligated to take and pay for all of the Class B Common Stock if any such securities are taken. However, the underwriters
are not required to take or pay for the Class B Common Stock covered by the underwriters’ over-allotment option described
below.
Over-Allotment Option
If the underwriters sell more shares than the above number, the
underwriters have an option for 30 days from the date of this prospectus to buy up to an additional [_____] shares of Class B
Common Stock from us at the public offering price per share, less the underwriting discounts and commissions, to cover these sales.
The underwriters may exercise this option at any time, in whole or in part, within 30 days after the date of this prospectus;
however, the underwriters may only exercise the option once.
Commission and Expenses
The underwriters have advised us that they propose to offer the
Class B Common Stock to the public at the public offering price per share set forth on the cover page of this prospectus and to
certain dealers at such prices less a concession not in excess of $[ ] per share of common stock. After
this offering, the public offering price of the shares and concession may be changed by the underwriters. No such change shall
change the amount of proceeds to be received by us as set forth on the cover page of this prospectus. The common stock are offered
by the underwriters as stated herein, subject to receipt and acceptance by them and subject to their right to reject any order
in whole or in part. The underwriters have informed us that they do not intend to confirm sales to any accounts over which they
exercise discretionary authority.
The following table shows the underwriting discounts and commissions
payable to the underwriters by us in connection with this offering. Such amounts are shown assuming both no exercise and full
exercise of the underwriters’ over-allotment option to purchase additional shares.
We estimate that expenses payable by us in connection with this
offering of our Class B Common Stock, other than the underwriting discounts and commissions referred to above, will be approximately
$[_____], which includes certain expenses incurred by the underwriters in connection with this offering. We have agreed to pay
the out-of-pocket expenses incurred by the underwriters in connection with this offering, including the cost of counsel for the
underwriters, up to an aggregate of $[_____].
| |
Per Share | | |
Total Without Over-Allotment Option | | |
Total With Over-Allotment Option | |
Public offering price | |
$ | | | |
$ | | | |
$ | | |
Underwriting discount | |
$ | | | |
$ | | | |
$ | | |
Proceeds, before expenses, to us | |
$ | | | |
$ | | | |
$ | | |
Indemnification
Pursuant to the underwriting agreement, we have agreed to indemnify
the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments that
the underwriters or such other indemnified parties may be required to make in respect of those liabilities.
Lock-Ups/Restrictions on Future Sales
We have agreed, subject to limited exceptions, for a period of
180 days after the date of the underwriting agreement, not to offer, sell, contract to sell, pledge, grant any option to purchase,
make any short sale or otherwise dispose of, directly or indirectly, any common stock or any securities convertible into or exchangeable
for our common stock either owned as of the date of the underwriting agreement or thereafter acquired, without the prior written
consent of the representative of the underwriters. These restrictions on future issuances are subject to exceptions for (i) the
issuance of our common stock sold in this offering, (ii) the issuance of our common stock upon the exercise of options or outstanding
warrants and the vesting of restricted stock awards, (iii) the issuance of employee stock options and the grant of restricted
stock awards or restricted stock units pursuant to our equity incentive plans and (iv) the issuance of our common stock pursuant
to an employee stock purchase plan of ours. This 180-day period may be extended if (1) during the last 17 days of the 180-day
period, we issue an earnings release or material news or a material event regarding us occurs or (2) prior to the expiration of
the 180-day period, we announce that we will release earnings results during the 16-day period beginning on the last day of the
180-day period, then the period of such extension will be 18 days, beginning on the issuance of the earnings release or the occurrence
of the material news or material event. If after any announcement described in clause (2) of the preceding sentence, we announce
that we will not release earnings results during the 16-day period, the lock-up period shall expire the later of the expiration
of the 180-day period and the end of any extension of such period made pursuant to clause (1) of the preceding sentence. The representative
of the underwriters may, in its sole discretion and at any time or from time to time before the termination of the lock-up period,
without notice, release all or any portion of the securities subject to lock-up agreements.
In addition, each of our directors and executive officers are entering
into a lock-up agreement with the representative of the underwriters. Under the lock-up agreements, the directors and executive
officers may not, directly or indirectly, sell, offer to sell, contract to sell, or grant any option for the sale (including any
short sale), grant any security interest in, pledge, hypothecate, hedge, establish an open “put equivalent position”
(within the meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934, as amended, or the Exchange Act), or otherwise
dispose of, or enter into any transaction which is designed to or could be expected to result in the disposition of, any of our
common stock or securities convertible into or exchangeable for our common stock, or publicly announce any intention to do any
of the foregoing, without the prior written consent of the representative of the underwriters, for a period of 180 days, subject
to an 18 day extension under certain circumstances, from the closing date of this offering. This consent may be given at any time
without public notice. These restrictions on future dispositions by our directors and executive officers are subject to exceptions
for (i) bona fide gifts and (ii) transfers to any trust for the direct or indirect benefit of immediate family members, or to
certain affiliates, in each case so long as the transferee agrees to be bound by these restrictions.
Electronic Distribution
This prospectus may be made available in electronic format on websites
or through other online services maintained by the underwriters or by their affiliates. In those cases, prospective investors
may view offering terms online and prospective investors may be allowed to place orders online. Other than this prospectus in
electronic format, the information on the underwriters’ website or our website and any information contained in any other
website maintained by the underwriters or by us is not part of this prospectus or the registration statement of which this prospectus
forms a part, has not been approved and/or endorsed by us or the underwriters in their capacities as underwriters and should not
be relied upon by investors.
Price Stabilization, Short Positions and Penalty Bids
Until the distribution of our common stock offered hereby is completed,
SEC rules may limit the underwriters from bidding for and purchasing our common stock.
In connection with the offering the underwriters may engage in
stabilizing transactions, over-allotment transactions, syndicate covering transactions and penalty bids in accordance with Regulation
M under the Exchange Act.
|
• |
Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a specified maximum. |
|
• |
Over-allotment involves sales by the underwriters of shares in excess
of the number of shares the underwriters are obligated to purchase, which creates a syndicate short position. The short position
may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted
by the underwriters is not greater than the number of shares that they may purchase in the over-allotment option. In a naked
short position, the number of shares involved is greater than the number of shares in the over-allotment option. The underwriters
may close out any covered short position by either exercising their over-allotment option and/or purchasing shares in the
open market. |
|
• |
Syndicate covering transactions involve purchases of common stock
in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the
source of shares to close out the short position, the underwriters will consider, among other things, the price of shares
available for purchase in the open market as compared to the price at which it may purchase shares through the over-allotment
option. A naked short position occurs if the underwriters sell more shares than could be covered by the over-allotment option.
This position can only be closed out by buying shares in the open market. A naked short position is more likely to be created
if the underwriters are concerned that there could be downward pressure on the price of the shares in the open market after
pricing that could adversely affect investors who purchase in the offering. |
|
• |
Penalty bids permit the underwriters to reclaim a selling concession
from a syndicate member when the common stock originally sold by the syndicate member are purchased in a stabilizing or syndicate
covering transaction to cover syndicate short positions. |
These stabilizing transactions, syndicate covering transactions
and penalty bids may have the effect of raising or maintaining the market price of our common stock or preventing or retarding
a decline in the market price of the common stock. As a result, the price of our common stock may be higher than the price that
might otherwise exist in the open market. These transactions may be discontinued at any time.
Neither we nor the underwriters make any representation or prediction
as to the direction or magnitude of any effect that the transactions described above may have on the price of our common stock.
In addition, neither we nor the underwriters make any representation that the underwriters will engage in these transactions or
that any transaction, if commenced, will not be discontinued without notice.
Affiliations
The underwriters and/or their affiliates have provided, and may
in the future provide, various investment banking and other financial services for us for which services it has received and,
may in the future receive, customary fees. Except for services provided in connection with this offering, the underwriters have
not provided any investment banking or other financial services during the 180-day period preceding the date of this prospectus
and we do not expect to retain the underwriters to perform any investment banking or other financial services for at least 90
days after the date of this prospectus.
On March 23, 2015, RMR Industrials entered into a letter agreement
with , pursuant to which would
act as a financial advisor, placement agent and underwriter in connection with various proposed transactions.
Selling Restrictions
European Economic Area
This prospectus does not constitute an approved prospectus under
Directive 2003/71/EC and no such prospectus is intended to be prepared and approved in connection with this offering. Accordingly,
in relation to each Member State of the European Economic Area which has implemented Directive 2003/71/EC (each, a “Relevant
Member State”) an offer to the public of any shares of common stock which are the subject of the offering contemplated by
this prospectus may not be made in that Relevant Member State except that an offer to the public in that Relevant Member State
of any common stock may be made at any time under the following exemptions under the Prospectus Directive, if and to the extent
that they have been implemented in that Relevant Member State:
|
(a) |
to any legal entity which is a qualified investor as defined in the Prospectus Directive
authorized or regulated, whose corporate purpose is solely to invest in securities; |
|
(b) |
to fewer than 100 or, if the Relevant Member State has implemented the relevant provision
of the 2011 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus
Directive), subject to obtaining the prior consent of the representative of the underwriter for any such offer; or |
|
(c) |
in any other circumstances which do not require any person to publish a prospectus pursuant
to Article 3 of the Prospectus Directive. |
For the purposes of this provision, the expression an “offer
to the public” in relation to any shares of common stock in any Relevant Member State means the communication in any form
and by any means of sufficient information on the terms of the offer and any common stock to be offered so as to enable an investor
to decide to purchase any common stock, as the same may be varied in that Member State by any measure implementing the Prospectus
Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/71/EC (and any amendments
thereto including the 2011 PD Amending Directive to the extent implemented in each Relevant Member State) and includes any relevant
implementing measure in each Relevant Member State and the expression “2011 PD Amending Directive” means Directive
2011/73/EU.
United Kingdom
This prospectus are not an approved prospectus for purposes of
the UK Prospectus Rules, as implemented under the EU Prospectus Directive (2003/71/EC), and have not been approved under section
21 of the Financial Services and Markets Act 2000 (as amended) (the “FSMA”) by a person authorized under FSMA. The
financial promotions contained in this are directed at, and this prospectus are only being distributed to, (1) persons who receive
this prospectus outside of the United Kingdom, and (2) persons in the United Kingdom who fall within the exemptions under articles
19 (investment professionals) and 49 (high net worth companies, unincorporated associations, etc.) of the Financial Services and
Markets Act 2000 (Financial Promotion) Order 2005 (all such persons together being referred to as “Relevant Persons”).
This prospectus must not be acted upon or relied upon by any person who is not a Relevant Person. This prospectus are confidential
and are provided to recipients on a personal basis and must not be transferred or assigned to persons who are not Relevant Persons.
The transmission of this prospectus to any person other than Relevant Persons in the United Kingdom is unauthorized and may contravene
FSMA and other United Kingdom securities laws and regulations. Any investment or investment activity to which this prospectus
relate is available only to Relevant Persons and will be engaged in only with Relevant Persons.
The underwriters have represented, warranted and agreed that:
|
(a) |
they have only communicated or caused to be communicated and will
only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning
of section 21 of the FSMA in connection with the issue or sale of any of the common stock in circumstances in which section
21(1) of the FSMA does not apply to the issuer; and |
|
(b) |
they have complied with and will comply with all applicable provisions
of the FSMA with respect to anything done by it in relation to the common stock in, from or otherwise involving the United
Kingdom. |
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form S-1 under the Securities
Act with the SEC for the securities offered hereby. This prospectus, which constitutes a part of the registration statement, does
not contain all of the information set forth in the registration statement or the exhibits and schedules which are part of the
registration statement. For additional information about our securities, and us we refer you to the registration statement and
the accompanying exhibits and schedules. Statements contained in this prospectus regarding the contents of any contract or any
other documents to which we refer are not necessarily complete. In each instance, reference is made to the copy of the contract
or document filed as an exhibit to the registration statement, and each statement is qualified in all respects by that reference.
Copies of the registration statement and the accompanying exhibits and schedules may be inspected without charge (and copies may
be obtained at prescribed rates) at the public reference facility of the SEC at Room 1024, 100 F Street, N.E. Washington, D.C.
20549.
You can request copies of these documents upon payment of a duplicating
fee by writing to the SEC. You may call the SEC at 1-800-SEC-0330 for further information on the operation of its public reference
rooms. Our filings, including the registration statement, will also be available to you on the Internet web site maintained by
the SEC at http://www.sec.gov.
RMR INDUSTRIALS, INC.
INDEX TO UNAUDITED FINANCIAL STATEMENT
FINANCIAL STATEMENTS
March 31, 2015
RMR Industrials, Inc.
Balance Sheet
| |
March 31, 2015 | |
| |
(Unaudited) | |
ASSETS | |
| | |
Current assets | |
| | |
Cash | |
$ | 4,733 | |
Total current
assets | |
| 4,733 | |
| |
| | |
Intangible asset, net | |
| 5,956 | |
Total assets | |
$ | 10,689 | |
| |
| | |
LIABILITIES AND STOCKHOLDERS' DEFICIT | |
| | |
Current liabilities | |
| | |
Accounts payable | |
$ | 127,770 | |
Accounts payable, related party | |
| 341,650 | |
Accrued liabilities related party | |
| 385,743 | |
Total liabilities | |
| 855,163 | |
| |
| | |
Stockholders' Deficit | |
| | |
Preferred stock, $0.001 par value, 50,000,000 shares
authorized and none issued and outstanding | |
| - | |
Class A common stock, $0.001 par value, 2,000,000,000
shares authorized, 35,785,858 shares issued and outstanding | |
| 35,786 | |
Class B common stock, $0.001 par value, 2,000,000,000
shares authorized, 16,144,142 shares issued and outstanding | |
| 16,144 | |
Common stock subscribed | |
| (65 | ) |
Additional paid-in capital | |
| (47,875 | ) |
Accumulated deficit | |
| (848,464 | ) |
Total stockholders’ deficit | |
$ | (844,474 | ) |
| |
| | |
Total liabilities and stockholders’ deficit | |
$ | 10,689 | |
RMR Industrials, Inc.
Statements Of Operations (Unaudited)
For the three months ended March 31, 2015 and
October 15, 2014 (inception) through March 31, 2015
| |
For the three months ended March 31,
2015 | | |
For the period October 15, 2014 (inception)
through March 31, 2015 | |
| |
(Unaudited) | | |
(Unaudited) | |
| |
| | |
| |
Operating Expenses | |
| | | |
| | |
Selling, general and administrative | |
$ | 514,277 | | |
$ | 848,464 | |
Loss from operations | |
| (514,277 | ) | |
$ | (848,464 | ) |
Other income and expense | |
| - | | |
| - | |
Loss before income tax provision | |
| (514,277 | ) | |
| (848,464 | ) |
Income tax provision | |
| - | | |
| - | |
Net loss | |
$ | (514,277 | ) | |
$ | (848,464 | ) |
| |
| | | |
| | |
Basic and diluted loss per common share | |
$ | (0.02 | ) | |
$ | (0.05 | ) |
| |
| | | |
| | |
Weighted average shares outstanding | |
| 33,138,877 | | |
| 17,660,838 | |
The accompanying notes are an integral part
of these financial statements.
RMR Industrials, Inc.
Statement Of Cash Flows (Unaudited)
For the period from October 15, 2014 (inception)
through March 31, 2015
| |
For the period from October 15, 2014 (inception) through
March 31, 2015 | |
| |
(Unaudited) | |
Cash flow from operating activities | |
| | |
Net loss | |
$ | (848,464 | ) |
Amortization expense | |
| 18,419 | |
Adjustments to reconcile net income to net cash used by operating activities | |
| | |
Changes in operating assets and liabilities | |
| | |
Accounts payable | |
| 127,770 | |
Accounts payable, related parties | |
| 317,275 | |
Accrued liabilities, related parties | |
| 385,000 | |
Net cash used in operating activities | |
$ | - | |
| |
| | |
Net cash used in investing activities | |
| - | |
| |
| | |
Proceeds from issuance of common stock | |
| 4,733 | |
Net cash provided by financing activities | |
| 4,733 | |
| |
| | |
Net increase/(decrease) in cash | |
| 4,733 | |
| |
| | |
Cash at beginning of period | |
| - | |
Cash at end of period | |
$ | 4,733 | |
| |
| | |
Supplemental cash flow information | |
| | |
Cash paid for interest | |
$ | - | |
Cash paid for income taxes | |
$ | - | |
Supplemental disclosure of non-cash transactions:
During the period ended March 31, 2015, the Company issued 26,286,201
shares of Class A and 1,390,000 shares of Class B common stock under subscription agreements valued at $3,031.
During the period ended March 31, 2015, the Company acquired an
intangible asset from a related party, which has been accrued in accounts payable, related parties valued at $24,375
The accompanying notes are an integral part
of these financial statements.
RMR INDUSTRIALS, INC.
NOTES TO FINANCIAL STATEMENTS
March 31, 2015
NOTE A – FORMATION, CORPORATE CHANGES AND MATERIAL MERGERS
AND ACQUISITIONS
Online Yearbook was incorporated in the State of Nevada on August
6, 2012. Online Yearbook was a development stage company with the principal business objective of developing and marketing an
online yearbook.
On November 17, 2014, Rocky Mountain Resource Holdings LLC, a Nevada
limited liability company (the “Purchaser”) became the majority shareholder of Online Yearbook, by acquiring 5,200,000
shares of common stock of Online Yearbook (the “Shares”), or 69.06% of the issued and outstanding shares of common
stock, pursuant to stock purchase agreements with Messrs. El Maraana and Salah Blal. The Shares were acquired for an aggregate
purchase price of $357,670. The Purchaser was the source of the funds used to acquire the Shares. In connection with Online Yearbook’s
receipt of approval from the Financial Industry Regulatory Authority (“FINRA”), effective December 8, 2014, Online
Yearbook amended its Articles of Incorporation to change its name from “Online Yearbook” to “RMR Industrials,
Inc.”
RMR Industrials, Inc. (the “Company” or “RMRI”)
is a development stage company which seeks to acquire and consolidate complimentary industrial assets. Typically these small to
mid sized assets are the core manufacturer and supplier of specific bulk commodity minerals and chemicals distributed to the global
manufacturer industry. RMRI’s consolidation strategy is to assemble a portfolio of mature and value-add industrial commodities
businesses to generate scalable enterprises with a vast portfolio of products and services addressing a common and stable customer
base.
On February 27, 2015 (the “Closing Date”), the Company
entered into and consummated a merger transaction pursuant to an Agreement and Plan of Merger (the “Merger Agreement”)
by and among the Company, OLYB Acquisition Corporation, a Nevada corporation and wholly owned subsidiary of the Company (“Merger
Sub”) and RMR IP, Inc., a Nevada corporation (“RMR IP”). In accordance with the terms of Merger Agreement, on
the Closing Date, Merger Sub merged with and into RMR IP (the “Merger”), with RMR IP surviving the Merger as our wholly
owned subsidiary.
RMR IP was formed to acquire and consolidate complimentary industrial
commodity assets through capitalizing on the volatile oil markets, down cycles in commodity markets, and other ancillary opportunities.
RMR IP is focused on managing the supply chain in order to offer a large and diverse set of products and services.
The Merger Agreement includes customary representations, warranties
and covenants made by the Company, Merger Sub and RMR IP as of specific dates. The assertions embodied in those representations
and warranties were made solely for purposes of the Merger Agreement and are not intended to provide factual, business, or financial
information about the Company, Merger Sub and RMR IP. Moreover, some of those representations and warranties (i) may not be accurate
or complete as of any specified date, (ii) may be subject to a contractual standard of materiality different from those generally
applicable to shareholders or different from what a shareholder might view as material, (iii) may have been used for purposes
of allocating risk among the Company, Merger Sub and RMR IP, rather than establishing matters as facts, and/or (iv) may have been
qualified by certain disclosures not reflected in the Merger Agreement that were made to the other party in connection with the
negotiation of the Merger Agreement and generally were solely for the benefit of the parties to the Merger Agreement.
For financial reporting purposes, the Merger represents a “reverse
merger” rather than a business combination and RMR IP is deemed to be the accounting acquirer in the transaction. Consequently,
the assets and liabilities and the historical operations that will be reflected in the Company’s future financial statements
will be those of RMR IP. The Company’s assets, liabilities and results of operations will be consolidated with the assets,
liabilities and results of operations of RMR IP after consummation of the Merger, and the historical financial statements of the
Company before the Merger will be replaced with the historical financial statements of RMR IP before the Merger in all future
filings with the SEC.
On March 10, 2015, we formed United States Talc and Minerals Inc.,
incorporated in the State of Nevada as a wholly-owned subsidiary of the Company for the purpose of facilitating future acquisitions.
Basis of Presentation
The unaudited financial statements for the period ended March 31,
2015 have been prepared in accordance with accounting principles generally accepted in the United States for interim financial
information in accordance with Securities and Exchange Commission (SEC) Regulation S-X rule 8-03. In the opinion of management,
the unaudited financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments,
which include only normal recurring adjustments, necessary to present fairly the financial position as of March 31, 2015 and the
results of operations and cash flows for the periods then ended. The financial data and other information disclosed in these notes
to the interim financial statements related to the period are unaudited.
NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of significant accounting policies of the Company is
presented to assist in understanding the Company’s financial statements. The accounting policies presented in these footnotes
conform to accounting principles generally accepted in the United States of America and have been consistently applied in the
preparation of the accompanying financial statements. These financial statements and notes are representations of the Company’s
management who are responsible for their integrity and objectivity.
Use of Estimates
The preparation of financial statements in conformity with GAAP
requires management to make estimates, judgments, and assumptions that impact the reported amounts of assets, liabilities, and
expenses, and disclosure of contingent assets and liabilities in the financial statements and accompanying notes. Actual results
could materially differ from those estimates. Management considers many factors in selecting appropriate financial accounting
policies and controls, and in developing the estimates and assumptions that are used in the preparation of these financial statements.
Management must apply significant judgment in this process. In addition, other factors may affect estimates, including: expected
business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and
whether historical trends are expected to be representative of future trends. The estimation process may yield a range of potentially
reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable
estimates. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake
in the future, actual results may ultimately materially differ from those estimated amounts and assumptions used in the preparation
of the financial statements.
Segment Reporting
Operating segments are identified as components of an enterprise
about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making
decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business as
one operating segment.
Cash and Cash Equivalents
The Company considers all highly liquid securities with original
maturities of three months or less at the date of purchase to be cash equivalents. As of March 31, 2015, the Company had cash
of $4,733 and no cash equivalents. The Company may occasionally maintain cash balances in excess of amounts insured by the Federal
Deposit Insurance Corporation (“FDIC”). The amounts are held with major financial institutions and are monitored by
management to mitigate credit risk.
Intangible Assets
Intangible assets are stated at cost and consist of an option contract.
Amortization is computed on the straight-line method over the estimated useful or contractual life of these assets, whichever
is shorter. Intangible assets consist of the following:
| |
March 31, 2015 | |
| |
(Unaudited) | |
Option Contract | |
$ | 24,375 | |
Accumulated Amortization | |
| (18,419 | ) |
Option Contract, Net | |
$ | 5,956 | |
Impairment of Long-Lived Assets
The Company evaluates long-lived assets for impairment whenever
events or changes in circumstances indicate the carrying value may not be recoverable. Factors considered include:
|
• |
Significant changes in the operational performance
or manner of use of acquired assets or the strategy for our overall business, |
|
• |
Significant negative market conditions or economic
trends, and |
|
• |
Significant technological changes or legal
factors which may render the asset obsolete. |
The Company evaluated long-lived assets based upon an estimate
of future undiscounted cash flows. Recoverability of these assets is measured by comparing the carrying value to the future net
undiscounted cash flows expected to be generated by the asset. An impairment loss is recognized when the carrying value exceeds
the undiscounted future cash flows estimated to result from the use and eventual disposition of the asset. Future net undiscounted
cash flows include estimates of future revenues and expenses which are based on projected growth rates. The Company continually
uses judgment when applying these impairment rules to determine the timing of the impairment tests, the undiscounted cash flows
used to assess impairments and the fair value of a potentially impaired asset.
Fair Value Measurements
The fair value of a financial instrument is the amount that could
be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at
the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair
value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability
of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level
of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three
categories:
- Level 1: Quoted market prices in active markets for identical
assets or liabilities
- Level 2: Observable market-based inputs or inputs that are corroborated
by market data
- Level 3: Unobservable inputs that are not corroborated by market
data
Net Loss per Common Share
Basic net loss per common share is calculated by dividing the net
loss attributable to common stockholders by the weighted average number of common shares outstanding during the period, without
consideration for the potentially dilutive effects of converting stock options or restricted stock purchase rights outstanding.
Diluted net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted average
number of common shares outstanding during the period and the potential dilutive effects of stock options or restricted stock
purchase rights outstanding during the period determined using the treasury stock method. There are no such anti-dilutive common
share equivalents outstanding as March 31, 2015 which were excluded from the calculation of diluted loss per common share.
Income Taxes
The Company accounts for income taxes under the asset and liability
method, which requires, among other things, that deferred income taxes be provided for temporary differences between the tax bases
of the Company's assets and liabilities and their financial statement reported amounts. Under this method, deferred tax assets
and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities
using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax
rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
A valuation allowance is recorded by the Company when it is more
likely than not that some portion or all of a deferred tax asset will not be realized. In making such a determination, management
considers all available positive and negative evidence, including future reversals of existing taxable temporary differences,
projected future taxable income, and ongoing prudent and feasible tax planning strategies in assessing the amount of the valuation
allowance. When the Company establishes or reduces the valuation allowance against its deferred tax assets, its provision for
income taxes will increase or decrease, respectively, in the period such determination is made.
Additionally, the Company recognizes the tax benefit from an uncertain
tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities
based on the technical merits of the position. The tax benefit recognized in the financial statements for a particular tax position
is based on the largest benefit that is more likely than not to be realized upon settlement. Accordingly, the Company establishes
reserves for uncertain tax positions. The Company has not recognized interest or penalties in its statement of operations and
comprehensive loss since inception.
Recent Accounting Pronouncements
The Financial Accounting Standards Board recently issued Accounting
Standards Update (ASU) 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties
about an Entity’s Ability to Continue as a Going Concern. The amendments require management to assess an entity’s
ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing
standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every
reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s
plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s
plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment
for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in
this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter.
The Financial Accounting Standards Board recently issued ASU 2014-10,
Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable
Interest Entities Guidance in Topic 810, Consolidation, which eliminates the financial reporting distinction of being a development
stage entity within U.S. generally accepted accounting principles. Accordingly, the ASU eliminates the incremental requirements
for development stage entities to (a) present inception-to-date information in the statements of income, cash flows and shareholder’s
equity, (b) label the financial statements as those of a development stage entity, (c) disclose a description of the development
stage activities in which the entity is engaged and (d) disclose in the first year in which the development stage entity that
in prior years it had been in the development stage. The amendments related to the elimination of inception-to-date information
should be applied retrospectively. For public business entities, those amendments are effective for annual reporting periods beginning
after December 15, 2014, and interim periods therein. Early application of each of these amendments is permitted for any annual
reporting period or interim period for which the entity’s financials statements has not yet been issued. The Company has
elected early application of these amendments in these financial statements.
Management believes recently issued accounting
pronouncements will have no impact on the financial statements of the Company.
NOTE C – GOING CONCERN
The Company's financial statements are prepared using accounting
principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization
of assets and liquidation of liabilities in the normal course of business. However, the Company does not have significant cash
or other current 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.
Under the going concern assumption, an entity is ordinarily viewed
as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading,
or seeking protection from creditors pursuant to laws or regulations. Accordingly, assets and liabilities are recorded on the
basis that the entity will be able to realize its assets and discharge its liabilities in the normal course of business.
The ability of the Company to continue as a going concern is dependent
upon its ability to successfully accomplish the business plan and eventually attain profitable operations. The accompanying financial
statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern.
During the next year, the Company’s foreseeable cash requirements
will relate to continual development of the operations of its business, maintaining its good standing and making the requisite
filings with the Securities and Exchange Commission, and the payment of expenses associated with research and development. The
Company may experience a cash shortfall and be required to raise additional capital.
Historically, it has mostly relied upon internally generated funds
and funds from the sale of shares of stock and from acquiring loans to finance its operations and growth. Management may raise
additional capital through future public or private offerings of the Company’s stock or through loans from private investors,
although there can be no assurance that it will be able to obtain such financing. The Company’s failure to do so could have
a material and adverse effect upon it and its shareholders.
In the past year, the Company funded operations by using cash proceeds
received through the issuance of common stock and proceeds from related party debt. For the coming year, the Company plans to
continue to fund the Company through debt and securities sales and issuances until the company generates enough revenues through
the operations as stated above.
NOTE D – TRANSACTIONS WITH RELATED PARTIES
Since inception, the Company accrued $341,650 in amounts owed to
related parties for services performed or reimbursement of costs on behalf of the Company. In addition, the Company has accrued
$385,000 for unpaid officers’ compensation expense in accordance with consulting agreements with our Chief Executive Officer
and President. Under the terms of each consulting agreement, each consultant shall serve as an executive officer to the Company
and receive monthly compensation of $35,000. The consulting agreements may be terminated by either party for breach or upon thirty
days prior written notice.
On February 1, 2015, RMR, IP entered into a management services
agreement with Industrial Management LLC (“IM”), to provide services to RMR, IP and affiliated entities, which include
assistance in operational and administrative matters, identifying, analyzing, and structuring growth initiatives, and potential
strategic acquisitions. As compensation for these services, RMR, IP will pay to IM an annual cash management fee in an amount
equal to the greater of 2% of the Company’s annual gross revenues or $1,000,000, and a development fee with respect to any
capital project incurred by RMR IP equal to 2% of total project costs. In addition, IM has the option to be assigned all available
royalties from RMR IP’s mineral holdings, leases or interests greater than 75% of net revenue interests for all mineral
rights or production of minerals. At IM’s sole discretion, it may choose to accept a preferred convertible security with
a 15% dividend accruing quarterly in lieu of cash for some or all of the annual management fee, development fee and royalty assignments.
Such preferred convertible securities shall be convertible into either Class A Common Stock or Class B Common Stock (as applicable)
at a conversion price equal to fifty percent of the market price of the applicable Class B Common Stock on the day prior to the
date of issuance. In addition, these preferred convertible securities are callable for a cash, for a period of six months following
the date of issuance; provided, however, that if called, IM shall have the option to convert the called preferred stock into either
Class A Common Stock or Class B Common Stock (as applicable) at a conversion price equal to sixty-six and two thirds percent of
the market price of the applicable Class B Common Stock on the business day immediately preceding the issuance date of preferred
stock, and will include a blocker provision. In connection with the management services agreement with IM, RMR IP entered into
a registration rights agreement which requires RMR IP to register for resale any securities issued as consideration under the
management services agreement. The registration rights agreements provides for both demand and piggy back registration rights,
and requires that IM not transfer any shares of RMR IP during a 90 day period following the effective date of a registration statement.
The registration rights agreement terminates when the shares held by IM become eligible for resale pursuant to Rule 144.
NOTE E – INTANGIBLE ASSETS
The Company obtained an Option Agreement (“Option Agreement”)
from RMR Holdings, Inc. with the Colorado School of Mines (“CSM”), which grants the Company an exclusive nine month
option period to obtain an exclusive license for any patent rights owned by CSM. On August 25, 2014, CSM entered into the Option
Agreement with the Company for a non-refundable fee of $30,000. Since the Company was in the process of formation, RMR Holdings,
Inc. countersigned the Option Agreement with CSM on behalf of the Company. On October 15, 2014, the Company was incorporated in
Nevada (Note 1) and RMR Holdings, Inc. assigned the Option Agreement to the Company. RMR Holdings, Inc. recorded amortization
expense of $5,625 through October 15, 2014, which represented the elapsed time of holding the option since it was executed. The
Company owed RMR Holdings, Inc. $24,375 which represented the approximate carrying value of RMR Holdings, Inc. at October 15,
2014, for an exclusive period which expires on May 25, 2015, to evaluate CSM’s existing patent rights, technology and market
potential. The Company may extend the Option Agreement for two (2) three month periods in exchange for a $3,000 extension fee
per each patent or patent application. The value of the Option Agreement will be amortized on a straight-line basis over the term
of the exclusivity period.
NOTE F – STOCKHOLDERS DEFICIT
Preferred Stock
The Company has authorized 50,000,000 shares of preferred stock
for issuance. At January 31, 2015, no preferred stock was issued and outstanding.
Common Stock
The Company has authorized 4,000,000,000 shares of common stock
for issuance, including 2,000,000,000 shares of Class A Common Stock, 2,000,000,000 shares of Class B Common Stock. At March 31,
2015, the Company had 35,785,858 and 16,144,142 shares issued and outstanding of Class A Common Stock and Class B Common Stock,
respectively.
The holders of Class A Common Stock will have the right to vote
on all matters on which stockholders have the right to vote. The holders of Class B Common Stock will have the right to vote solely
on matters where the vote of such holders is explicitly required under Nevada law. The holders of Class A Common Stock and
Class B Common stock will have equal distribution rights, provided that distributions in securities shall be made in either identical
securities or securities with similar voting characteristics. The holders of Class A Common Stock and Class B Common Stock
will be entitled to receive identical per-share consideration upon a merger, conversion or exchange of the Company with another
entity, and will have equal rights upon dissolutions, liquidation or winding-up.
Common Stock Subscription
During the period ended March 31, 2015, the Company issued 650,000
shares for stock subscriptions receivable of $65 in accordance with subscription agreements executed prior to March 31, 2015.
As of the date of this report, the subscriptions receivable have been fully satisfied through the receipt of cash for shares issued.
NOTE G – SUBSEQUENT EVENT
The Company evaluated all events or transactions that occurred
after March 31, 2015 through the date of this filing. The Company determined that it does not have any other subsequent event
requiring recording or disclosure in the financial statements for the period ended March 31, 2015.
RMR IP, INC.
9595 Wilshire Blvd., Suite 310
Beverly Hills, CA 90212
Report of Independent Registered Public Accounting Firm
and
Audited Financial Statements
As of January 31, 2015 and for the period from
October 15, 2014 (inception) through January 31, 2015
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
To the Board of Directors
RMR IP, Inc.
We have audited the accompanying balance sheet of RMR IP, Inc.
as of January 31, 2015, and the related statements of operations, member’s deficit and cash flows for the period from October
15, 2014 (date of inception) through January 31, 2015. 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 audit.
We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight 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. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration
of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe that our audit provides 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 RMR IP, Inc.as of January 31, 2015, and the results of its operations
and its cash flows for the period from October 15, 2014 (date of inception) through January 31, 2015 in conformity with U.S. generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered
losses, a working capital deficit, and has negative cash flows from operations. This raises substantial doubt about the Company's
ability to continue as a going concern. Management's plans in regard to these matters also are described in Note 1. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
Hein & Associates LLP
Irvine, California
February 27, 2015, except for Note 2 as to which the date is May 8, 2015
RMR IP INCORPORATED
Balance Sheet
| |
January 31, | |
| |
2015 | |
Assets | |
| | |
Cash | |
$ | 1,767 | |
Current assets | |
| 1,767 | |
| |
| | |
Intangible assets, net | |
| 12,463 | |
Total assets | |
$ | 14,230 | |
| |
| | |
Liabilities and stockholders' equity | |
| | |
Accounts payable, related parties | |
$ | 174,984 | |
Accrued liabilities, related parties | |
| 245,000 | |
Total liabilities | |
| 419,984 | |
| |
| | |
Stockholders' deficit: | |
| | |
Preferred stock, $0.0001 par value, 50,000,000 shares authorized and none
issued and outstanding | |
| | |
Class A common stock, $0.0001 par value, 100,000,000 shares authorized, 35,785,858
shares issued and outstanding | |
| 3,579 | |
Class B common stock, $0.0001 par value, 450,000,000 shares authorized,
8,614,142 shares issued and outstanding | |
| 861 | |
Common stock subscribed, not issued | |
| (3,031 | ) |
Additional paid in capital | |
| 358 | |
Accumulated deficit | |
| (407,521 | ) |
Total stockholders' deficit | |
| (405,754 | ) |
Total liabilities and stockholders' deficit | |
$ | 14,230 | |
The accompanying notes are an integral part
of these financial statements.
RMR IP, INCORPORATED
Statement of Operations and Comprehensive
Loss
| |
Period from October
15, 2014 (inception) through January 31, 2015 | |
Operating expenses: | |
| | |
Selling, general, and administrative | |
$ | 407,521 | |
Loss from operations | |
| (407,521 | ) |
Other income and expense | |
| — | |
Loss before income tax provision | |
| (407,521 | ) |
Income tax provision | |
| — | |
Net loss and comprehensive loss | |
$ | (407,521 | ) |
| |
| | |
Net loss per share, basic and diluted | |
$ | (0.50 | ) |
Basic and diluted weighted average shares outstanding | |
| 822,222 | |
The accompanying notes are an integral part
of these financial statements.
RMR IP, INCORPORATED
Statement of Stockholders’ Equity
| |
Common Stock | | |
Common Stock | | |
Additional | | |
| | |
| | |
| |
| |
Class A | | |
Class B | | |
Paid-in | | |
Common Stock | | |
Accumulated | | |
| |
| |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
Subscribed | | |
Deficit | | |
Total | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance, October 15, 2014 | |
| - | | |
$ | - | | |
| - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Issuance of common stock through subscription | |
| 35,785,858 | | |
| 3,579 | | |
| 8,614,142 | | |
| 861 | | |
| 358 | | |
| (3,031 | ) | |
| - | | |
| 1,767 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net loss for the period ended January 31, 2015 | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (407,521 | ) | |
| (407,521 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance, January 31, 2015 | |
| 35,785,858 | | |
$ | 3,579 | | |
| 8,614,142 | | |
$ | 861 | | |
$ | 358 | | |
$ | (3,031 | ) | |
$ | (407,521 | ) | |
$ | (405,754 | ) |
See accompanying notes to financial statements.
RMR IP, INCORPORATED
Statement of Cash Flows
| |
Period from October 15,
2014 (inception) through January 31, 2015 | |
| |
| |
Cash flows from operating activities: | |
| | |
Net loss | |
$ | (407,521 | ) |
Amortization expense | |
| 11,912 | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |
| | |
Accounts payable, related parties | |
| 150,609 | |
Accrued liabilities, related parties | |
| 245,000 | |
Net cash provided by operating activities | |
| — | |
| |
| | |
Proceeds from issuance of common stock | |
| 1,767 | |
Net cash provided by financing activities | |
| 1,767 | |
| |
| | |
Net increase in cash | |
| 1,767 | |
Cash at beginning of period | |
| — | |
Cash at end of period | |
$ | 1,767 | |
| |
| | |
Supplemental disclosures of cash flow information: | |
| | |
Cash paid for interest | |
$ | — | |
Cash paid for income taxes | |
$ | — | |
Supplemental disclosure of non-cash transactions:
During the period ended January 31, 2015, the Company issued 26,286,201
shares of Class A and 1,390,000 shares of Class B common stock under subscription agreements valued at $3,031.
During the period ended January 31, 2015, the Company acquired
an intangible asset from a related party, which has been accrued in accounts payable, related parties valued at $24,375
The accompanying notes are an integral part
of these financial statements.
1. Organization and Basis of Presentation
RMR IP (the “Company”) was incorporated
on October 15, 2014 as a Nevada corporation. RMR IP was formed to acquire and consolidate complimentary industrial commodity assets
through capitalizing on the volatile oil market, down cycles in commodity markets, and other ancillary opportunities. Typically
these assets are the core manufacturer and supplier of specific bulk commodity minerals, chemicals and petrochemicals distributed
to the global manufacturing industry. The Company’s consolidation strategy is to assemble a portfolio of mature and value-add
industrial commodities businesses to generate scalable enterprises with a large portfolio of products and services addressing
a common and stable customer base. The Company is focused on managing the supply chain in order to offer a large and diverse set
of products and services.
The cash flows generated by the businesses
that we will operate will provide us with the ability to pursue further acquisitions in order to build on our existing segments,
or to establish a new business platform for future growth. We plan to employ a disciplined approach to identify and evaluate potential
acquisitions, only pursuing those that meet our financial and strategic criteria. We believe our discipline throughout the acquisition
process will maximize the chances of long-term success. At January 31, 2015, the Company had cash of $1,767, and a working capital
deficit of $418,217. Successful transition to attaining profitable operations is dependent upon achieving a level of revenues
adequate to support the Company’s cost structure.
The Company’s net loss and working capital
deficit raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements
have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business. The financial statements for the period from October 15, 2014 (inception) through January 31,
2015 do not include any adjustments to reflect the possible future effects of the recoverability and classification of assets
or the amounts and classification of liabilities that may result from uncertainty related to the Company’s ability to continue
as a going concern. The Company may never become profitable, or if it does, it may not be able to sustain profitability on a recurring
basis.
2. Restatement
The Company has restated its previously issued
Statement of Cash Flows for the period from October 15, 2014 (inception) through January 31, 2015 to correct for an error in its
presentation of a non-cash acquisition of an intangible asset. The Company restated its acquisition of an intangible asset of
$24,375 as a non-cash transaction with a related party. The effect of the correction resulted in a reduction in cash flows provided
by operating activities and removal of cash used in investing activities. The change in presentation had no effect on the Balance
Sheet, Statement of Operations and Comprehensive Loss or Statement of Shareholders’ Equity.
3. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying combined financial statements
have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP.
Use of Estimates
The preparation of financial statements in
conformity with GAAP requires management to make estimates, judgments, and assumptions that impact the reported amounts of assets,
liabilities, and expenses, and disclosure of contingent assets and liabilities in the financial statements and accompanying notes.
Actual results could materially differ from those estimates. Management considers many factors in selecting appropriate financial
accounting policies and controls, and in developing the estimates and assumptions that are used in the preparation of these financial
statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including:
expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates,
and whether historical trends are expected to be representative of future trends. The estimation process may yield a range of
potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range
of reasonable estimates. Although these estimates are based on the Company’s knowledge of current events and actions it
may undertake in the future, actual results may ultimately materially differ from those estimated amounts and assumptions used
in the preparation of the financial statements.
Segment Reporting
Operating segments are identified as components
of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker
in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its
business as one operating segment.
Cash and Cash Equivalents
The Company considers all highly liquid securities
with original maturities of three months or less at the date of purchase to be cash equivalents. As of January 31, 2015, the Company
had cash of $1,767 and no cash equivalents. The Company occasionally maintains cash balances in excess of amounts insured by the
Federal Deposit Insurance Corporation (“FDIC”). The amounts are held with major financial institutions and are monitored
by management to mitigate credit risk.
Intangible Assets
Intangible assets are stated at cost and consist of an option contract.
Amortization is computed on the straight-line method over the estimated useful or contractual life of these assets, whichever
is shorter. Intangible assets consist of the following:
| |
January 31, 2015 | |
| |
| |
Option Contract | |
$ | 24,375 | |
Accumulated Amortization | |
| (11,912 | ) |
| |
| | |
Option Contract, Net | |
$ | 12,463 | |
Impairment of Long-Lived Assets
The Company evaluates long-lived assets for
impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. Factors considered
include:
| • | Significant changes in the operational performance or manner
of use of acquired assets or the strategy for our overall business, |
| | |
| • | Significant negative market conditions or economic trends,
and |
| | |
| • | Significant technological changes or legal factors which
may render the asset obsolete. |
The Company evaluated long-lived assets based
upon an estimate of future undiscounted cash flows. Recoverability of these assets is measured by comparing the carrying value
to the future net undiscounted cash flows expected to be generated by the asset. An impairment loss is recognized when the carrying
value exceeds the undiscounted future cash flows estimated to result from the use and eventual disposition of the asset. Future
net undiscounted cash flows include estimates of future revenues and expenses which are based on projected growth rates. The Company
continually uses judgment when applying these impairment rules to determine the timing of the impairment tests, the undiscounted
cash flows used to assess impairments and the fair value of a potentially impaired asset.
Fair Value Measurements
The fair value of a financial instrument is
the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked
to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize
the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy
is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined
into the following three categories:
- Level 1: Quoted market prices in active markets for identical
assets or liabilities
- Level 2: Observable market-based inputs or inputs that are corroborated
by market data
- Level 3: Unobservable inputs that are not corroborated by market
data
Net Loss per Common Share
Basic net loss per common share is calculated
by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding during
the period, without consideration for the potentially dilutive effects of converting stock options or restricted stock purchase
rights outstanding. Diluted net loss per common share is calculated by dividing the net loss attributable to common stockholders
by the weighted average number of common shares outstanding during the period and the potential dilutive effects of stock options
or restricted stock purchase rights outstanding during the period determined using the treasury stock method. There are no such
anti-dilutive common share equivalents outstanding as January 31, 2015 which were excluded from the calculation of diluted loss
per common share.
Income Taxes
The Company accounts for income taxes under
the asset and liability method, which requires, among other things, that deferred income taxes be provided for temporary differences
between the tax bases of the Company's assets and liabilities and their financial statement reported amounts. Under this method,
deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis
of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The
effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the
enactment date.
A valuation allowance is recorded by the
Company when it is more likely than not that some portion or all of a deferred tax asset will not be realized. In making such
a determination, management considers all available positive and negative evidence, including future reversals of existing taxable
temporary differences, projected future taxable income, and ongoing prudent and feasible tax planning strategies in assessing
the amount of the valuation allowance. When the Company establishes or reduces the valuation allowance against its deferred tax
assets, its provision for income taxes will increase or decrease, respectively, in the period such determination is made.
Additionally, the Company recognizes the
tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination
by the taxing authorities based on the technical merits of the position. The tax benefit recognized in the financial statements
for a particular tax position is based on the largest benefit that is more likely than not to be realized upon settlement. Accordingly,
the Company establishes reserves for uncertain tax positions. The Company has not recognized interest or penalties in its statement
of operations and comprehensive loss since inception.
Recent Accounting Pronouncements
The Financial Accounting Standards Board recently
issued Accounting Standards Update (ASU) 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure
of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The amendments require management to assess an
entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently
in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an
evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s
plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s
plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment
for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in
this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter.
The Financial Accounting Standards Board recently
issued ASU 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including
an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation, which eliminates the financial reporting distinction
of being a development stage entity within U.S. generally accepted accounting principles. Accordingly, the ASU eliminates the
incremental requirements for development stage entities to (a) present inception-to-date information in the statements of income,
cash flows and shareholder’s equity, (b) label the financial statements as those of a development stage entity, (c) disclose
a description of the development stage activities in which the entity is engaged and (d) disclose in the first year in which the
development stage entity that in prior years it had been in the development stage. The amendments related to the elimination of
inception-to-date information should be applied retrospectively. For public business entities, those amendments are effective
for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early application of each of these
amendments is permitted for any annual reporting period or interim period for which the entity’s financials statements has
not yet been issued. The Company has elected early application of these amendments in these financial statements.
Management believes recently
issued accounting pronouncements will have no impact on the financial statements of the Company.
4. Transactions with Related Parties
Since inception, the Company
accrued $174,984 in amounts owed to related parties for services performed or reimbursement of costs on behalf of the Company.
In addition, the Company has accrued $245,000 for unpaid officers’ compensation expense in accordance with consulting agreements
with our Chief Executive Officer and President. Under the terms of each consulting agreement, each consultant shall serve as an
executive officer to the Company and receive monthly compensation of $35,000. The consulting agreements may be terminated by either
party for breach or upon thirty days prior written notice.
5. Intangible Assets
The Company obtained an Option Agreement (“Option
Agreement”) from RMR Holdings, Inc. with the Colorado School of Mines (“CSM”), which grants the Company an exclusive
nine month option period to obtain an exclusive license for any patent rights owned by CSM. On August 25, 2014, CSM entered into
the Option Agreement with the Company for a non-refundable fee of $30,000. Since the Company was in the process of formation,
RMR Holdings, Inc. countersigned the Option Agreement with CSM on behalf of the Company. On October 15, 2014, the Company was
incorporated in Nevada (Note 1) and was prepared to accept the Option Agreement. RMR Holdings, Inc. recorded amortization expense
of $5,625 through October 15, 2014, which represented the elapsed time of holding the option since it was executed. The Company
owed RMR Holdings, Inc. $24,375 which represented the approximate carrying value of RMR Holdings, Inc. at October 15, 2014, for
an exclusive period which expires on May 25, 2015, to evaluate CSM’s existing patent rights, technology and market potential.
The Company may extend the Option Agreement for two (2) three month periods in exchange for a $3,000 extension fee per each patent
or patent application. The value of the Option Agreement will be amortized on a straight-line basis over the term of the exclusivity
period.
6. Stockholders' Deficit
Preferred Stock
The Company has authorized 50,000,000 shares
of preferred stock for issuance. At January 31, 2015, no preferred stock was issued and outstanding.
Common Stock
The Company has authorized 600,000,000 shares
of capital stock for issuance, including 100,000,000 shares of Class A Common Stock, 450,000,000 shares of Class B Common Stock
and 50,000,000 shares of Preferred Stock. At January 31, 2015, the Company had 35,785,858 and 8,612,142 shares issued and outstanding
of Class A Common Stock and Class B Common Stock, respectively.
The holders of Class A Common Stock will have
the right to vote on all matters on which stockholders have the right to vote. The holders of Class B Common Stock will have the
right to vote solely on matters where the vote of such holders is explicitly required under Nevada law. The holders of Class
A Common Stock and Class B Common stock will have equal distribution rights, provided that distributions in securities shall be
made in either identical securities or securities with similar voting characteristics. The holders of Class A Common Stock
and Class B Common Stock will be entitled to receive identical per-share consideration upon a merger, conversion or exchange of
the Company with another entity, and will have equal rights upon dissolutions, liquidation or winding-up.
Common Stock Subscription
During the period ended January 31, 2015,
the Company issued 27,676,201 shares for stock subscriptions receivable of $3,030 in accordance with subscription agreements executed
prior to January 31, 2015. As of the date of this report, the subscriptions receivable had not been satisfied through the receipt
of cash for shares issued.
7. Income Taxes
There is no provision for income taxes because
the Company has incurred operating losses since inception. At January 31, 2015, the Company has concluded that it is more
likely than not that the Company may not realize the benefit of its deferred tax assets due to losses generated and uncertainties
surrounding its ability to generate future taxable income. Accordingly, the net deferred tax assets have been fully reserved.
Net deferred tax assets consist of the following
components:
| |
January 31, 2015 | |
Deferred tax asset: | |
| | |
Net operating loss carryforwards | |
$ | (142,632 | ) |
Valuation allowance | |
| 142,632 | |
Net deferred tax asset | |
$ | - | |
The income tax provision differs from the amount
of income tax determined by applying the U.S. federal and state income statutory tax rates to pretax income (loss) from continuing
operations as follows:
| |
January 31, 2015 | |
| |
| |
Tax benefit at statutory rates | |
$ | (142,632 | ) |
Change in valuation allowance | |
| 142,632 | |
Net provision for income taxes | |
$ | - | |
The Company has accumulated net operating loss carryovers of approximately
$407,521 as of January 31, 2015 which are available to reduce future taxable income. Due to the change in ownership provisions
of the Tax Reform Act of 1986, net operating loss carry forwards for federal income tax reporting purposes may be subject to annual
limitations. A change in ownership may limit the utilization of the net operating loss carry forwards in future years. The tax
losses begin to expire in 2033.
8. Subsequent Events
On February 1, 2015, RMR, IP entered into a
management services agreement with Industrial Management LLC (“IM”), to provide services to RMR, IP and affiliated
entities, which include assistance in operational and administrative matters, identifying, analyzing, and structuring growth initiatives,
and potential strategic acquisitions. As compensation for these services, RMR, IP will pay to IM an annual cash management fee
in an amount equal to the greater of 2% of the Company’s annual gross revenues or $1,000,000, and a development fee with
respect to any capital project incurred by RMR IP equal to 2% of total project costs. In addition, IM has the option to be assigned
all available royalties from RMR IP’s mineral holdings, leases or interests greater than 75% of net revenue interests for
all mineral rights or production of minerals. At IM’s sole discretion, it may choose to accept a preferred convertible security
with a 15% dividend accruing quarterly in lieu of cash for some or all of the annual management fee, development fee and royalty
assignments. Such preferred convertible securities shall be convertible into either Class A Common Stock or Class B Common Stock
(as applicable) at a conversion price equal to fifty percent of the market price of the applicable Class B Common Stock on the
day prior to the date of issuance. In addition, these preferred convertible securities are callable for a cash, for a period of
six months following the date of issuance; provided, however, that if called, IM shall have the option to convert the called preferred
stock into either Class A Common Stock or Class B Common Stock (as applicable) at a conversion price equal to sixty-six and two
thirds percent of the market price of the applicable Class B Common Stock on the business day immediately preceding the issuance
date of preferred stock, and will include a blocker provision. In connection with the management services agreement with IM, RMR
IP entered into a registration rights agreement which requires RMR IP to register for resale any securities issued as consideration
under the management services agreement.
On February 27, 2015 (the “Closing Date”),
the Company RMR Industrials, Inc. (“RMRI”), a Nevada corporation, entered into and consummated a merger transaction
pursuant to an Agreement and Plan of Merger dated February 27, 2015 (the “Merger Agreement”) by and among the Company,
RMR Industrials, Inc. (“RMRI”), a Nevada corporation and OLYB Acquisition Corporation, a Nevada corporation and wholly
owned subsidiary of RMRI (“Merger Sub”). In accordance with the terms of Merger Agreement, on the Closing Date, Merger
Sub merged with and into the Company (the “Merger”), with the Company surviving the Merger as our wholly owned subsidiary.
The Merger Agreement is among entities under common control and includes customary representations, warranties and covenants made
by the Company, Merger Sub and RMR IP as of specific dates. For financial reporting purposes, the Merger represents a “reverse
merger” rather than a business combination and the Company is deemed to be the accounting acquirer in the transaction.
On February 26, 2015, the Company’s 2015
Equity Incentive Plan (the “Plan”) has been approved and adopted by the Company.
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Securities and Exchange Commission Registration Fee | |
$ | 2,324 | |
Transfer/Edgar Agent Fees | |
$ | 10,000 | |
Accounting Fees and Expenses | |
$ | 5,000 | |
Legal Fees | |
$ | 50,000 | |
Total | |
$ | 67,324 | |
All amounts are estimates other than the Commission’s registration
fee. We are paying all expenses of the offering listed above.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Nevada Law
Section 78.7502 of the Nevada Revised Statutes (“NRS”)
permits a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the
right of the corporation, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with the action, suit or proceeding if he:
|
(a) |
is not liable pursuant to NRS 78.138, or |
|
(b) |
acted in good faith and in a manner which
he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was unlawful. |
In addition, NRS 78.7502 permits a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or
in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including amounts paid
in settlement and attorneys’ fees actually and reasonably incurred by him in connection with the defense or settlement of
the action or suit if he:
|
(a) |
is not liable pursuant to NRS 78.138; or |
|
|
|
|
(b) |
acted in good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation. |
To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to above, or
in defense of any claim, issue or matter, the corporation is required to indemnify him against expenses, including attorneys’
fees, actually and reasonably incurred by him in connection with the defense.
NRS 78.752 allows a corporation to purchase and maintain insurance
or make other financial arrangements on behalf of any person who is or was a director, officer, employee or agent of the corporation
or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise for any liability asserted against him and liability and expenses incurred by him in
his capacity as a director, officer, employee or agent, or arising out of his status as such, whether or not the corporation has
the authority to indemnify him against such liability and expenses.
Other financial arrangements made by the corporation
pursuant to NRS 78.752 may include the following:
|
(a) |
the creation of a trust fund; |
|
|
|
|
(b) |
the establishment of a program of self-insurance; |
|
|
|
|
(c) |
the securing of its obligation of indemnification by granting a security interest or other
lien on any assets of the corporation; and |
|
|
|
|
(d) |
the establishment of a letter of credit, guaranty or surety. |
No financial arrangement made pursuant to NRS 78.752 may provide
protection for a person adjudged by a court of competent jurisdiction, after exhaustion of all appeals, to be liable for intentional
misconduct, fraud or a knowing violation of law, except with respect to the advancement of expenses or indemnification ordered
by a court.
Any discretionary indemnification pursuant to NRS 78.7502, unless
ordered by a court or advanced pursuant to an undertaking to repay the amount if it is determined by a court that the indemnified
party is not entitled to be indemnified by the corporation, may be made by the corporation only as authorized in the specific
case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances. The
determination must be made:
|
(a) |
by the shareholders; |
|
|
|
|
(b) |
by the board of directors by majority vote of a quorum consisting of directors who were
not parties to the action, suit or proceeding; |
|
|
|
|
(c) |
if a majority vote of a quorum consisting of directors who were not parties to the action,
suit or proceeding so orders, by independent legal counsel in a written opinion, or |
|
|
|
|
(d) |
if a quorum consisting of directors who were not parties to the action, suit or proceeding
cannot be obtained, by independent legal counsel in a written opinion. |
Charter Provisions and Other Arrangements of the Registrant
Pursuant to the provisions of the NRS, we have adopted the following
provisions in our Amended and Restated Articles of Incorporation and our Amended and Restated Bylaws for our directors and officers:
Articles of Incorporation
Indemnification; Payment of Expenses. To the
fullest extent permitted under the NRS (including, without limitation, to the fullest extent permitted under NRS 78.7502 and 78.751(3))
and other applicable law, the Corporation shall indemnify directors and officers of the Corporation in their respective capacities
as such and in any and all other capacities in which any of them serves at the request of the Corporation. In addition to any
other rights of indemnification permitted by the laws of the State of Nevada or as may be provided for by the Corporation in the
Bylaws or by agreement, the expenses of directors and officers incurred in defending a civil or criminal action, suit or proceeding,
involving alleged acts or omissions of such director or officer in his or her capacity as a director or officer of the Corporation,
must be paid, by the Corporation or through insurance purchased and maintained by the Corporation or through other financial arrangements
made by the Corporation, as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon
receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court
of competent jurisdiction that he or she is not entitled to be indemnified by the Corporation.
Limitation on Liability. The liability of
directors and officers of the Corporation shall be eliminated or limited to the fullest extent permitted by the NRS. If the NRS
are amended to further eliminate or limit or authorize corporate action to further eliminate or limit the liability of directors
or officers, the liability of directors and officers of the Corporation shall be eliminated or limited to the fullest extent permitted
by the NRS, as so amended from time to time.
Bylaws
For purposes of this Article, (A) “Indemnitee” shall
mean each director or officer who was or is a party to, or is threatened to be made a party to, or is otherwise involved in, any
Proceeding (as hereinafter defined), by reason of the fact that he or she is or was a director, officer, employee or agent (including,
without limitation, as a trustee, fiduciary, administrator or manager) of the Corporation or any predecessor entity thereof, or
is or was serving in any capacity at the request of the Corporation as a director, officer, employee or agent (including, without
limitation, as a trustee, fiduciary, administrator, partner, member or manager) of, or in any other capacity for, another corporation
or any partnership, joint venture, limited liability company, trust, or other enterprise; and (B) “Proceeding” shall
mean any threatened, pending, or completed action, suit or proceeding (including, without limitation, an action, suit or proceeding
by or in the right of the Corporation), whether civil, criminal, administrative, or investigative.
(ii) Each
Indemnitee shall be indemnified and held harmless by the Corporation to the fullest extent permitted by the laws of the State
of Nevada, against all expense, liability and loss (including, without limitation, attorneys’ fees, judgments, fines, taxes,
penalties, and amounts paid or to be paid in settlement) reasonably incurred or suffered by the Indemnitee in connection with
any Proceeding; provided that such Indemnitee either is not liable pursuant to NRS 78.138 or acted in good faith and in a manner
such Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to any
Proceeding that is criminal in nature, had no reasonable cause to believe that his or her conduct was unlawful. The termination
of any Proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the Indemnitee is liable pursuant to NRS 78.138 or did not act in good faith and in a manner
in which he or she reasonably believed to be in or not opposed to the best interests of the Corporation, or that, with respect
to any criminal proceeding he or she had reasonable cause to believe that his or her conduct was unlawful. The Corporation shall
not indemnify an Indemnitee for any claim, issue or matter as to which the Indemnitee has been adjudged by a court of competent
jurisdiction, after exhaustion of all appeals therefrom, to be liable to the Corporation or for any amounts paid in settlement
to the Corporation, unless and only to the extent that the court in which the Proceeding was brought or other court of competent
jurisdiction determines upon application that in view of all the circumstances of the case, the Indemnitee is fairly and reasonably
entitled to indemnity for such amounts as the court deems proper. Except as so ordered by a court and for advancement of expenses
pursuant to this Section, indemnification may not be made to or on behalf of an Indemnitee if a final adjudication establishes
that his or her acts or omissions involved intentional misconduct, fraud or a knowing violation of law and was material to the
cause of action. Notwithstanding anything to the contrary contained in these Bylaws, no director or officer may be indemnified
for expenses incurred in defending any threatened, pending, or completed action, suit or proceeding (including without limitation,
an action, suit or proceeding by or in the right of the Corporation), whether civil, criminal, administrative or investigative,
that such director or officer incurred in his or her capacity as a stockholder.
(iii) Indemnification
pursuant to this Section shall continue as to an Indemnitee who has ceased to be a director or officer of the Corporation or who
has ceased to serve, at the request of the Corporation, as a director, officer, employee, agent, trustee, fiduciary, administrator,
partner, member or manager of, or in any other capacity for, another corporation or any partnership, joint venture, limited liability
company, trust, or other enterprise, and such indemnification shall inure to the benefit of such Indemnitee’s heirs, executors
and administrators.
(iv) The
expenses of Indemnitees must be paid by the Corporation or through insurance purchased and maintained by the Corporation or through
other financial arrangements made by the Corporation, as such expenses are incurred and in advance of the final disposition of
the Proceeding, upon receipt of an undertaking by or on behalf of such Indemnitee to repay the amount if it is ultimately determined
by a court of competent jurisdiction that he or she is not entitled to be indemnified by the Corporation. To the extent that an
Indemnitee is successful on the merits or otherwise in defense of any Proceeding, or in the defense of any claim, issue or matter
therein, the Corporation shall indemnify him or her against expenses, including attorneys’ fees, actually and reasonably
incurred in by him or her in connection with the defense.
Insofar as indemnification for liabilities arising under the Securities
Act, may be permitted to directors, officers and controlling persons of our company under Nevada law or otherwise, we have been
advised the opinion of the Securities and Exchange Commission is that such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event a claim for indemnification against such liabilities
(other than payment by us for expenses incurred or paid by a director, officer or controlling person of our company in successful
defense of any action, suit, or proceeding) is asserted by a director, officer or controlling person in connection with the securities
being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction, the question of whether such indemnification by it is against public policy in the Securities
Act and will be governed by the final adjudication of such issue.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
On February 27, 2015, we issued an aggregate of 35,785,858 shares
of Class A Common Stock and an aggregate of 16,144,142 shares of Class B Common Stock to the shareholders of RMR IP as consideration
for the Merger.
The issuance of the shares of Class A Common
Stock and Class B Common Stock pursuant to the Merger Agreement was exempt from registration in reliance upon Regulation D of
the Securities Act as the investors are “accredited investors,” as such term is defined in Rule 501(a) under the Securities
Act, such determination based upon representations made by such investors.
ITEM 16. EXHIBITS
The following exhibits are included as part of this registration
statement on Form S-1 by reference:
Exhibit
Number |
|
Description |
|
|
|
2.1 |
|
Agreement and Plan of Merger, dated February 27, 2015, between
RMR Industrials, Inc., OLYB Acquisition Corporation and RMR IP, Inc. (incorporated by reference to our Current Report on Form
8-K/A filed on April 14, 2015) |
|
|
|
3.1 |
|
Amended and Restated Articles of Incorporation (incorporated
by reference to our Current Report on Form 8-K/A filed on April 14, 2015) |
|
|
|
3.2 |
|
Amended and Restated Bylaws (incorporated
by reference to our Current Report on Form 8-K filed on February 27, 2015).
|
5.1** |
|
Opinion of Greenberg Traurig, LLP |
|
|
|
10.1 |
|
Management Services Agreement dated as of February 1, 2015,
between Industrial Management LLC and RMR IP, Inc. (incorporated by reference to our Current Report on Form 8-K/A filed on
April 14, 2015) |
|
|
|
10.2 |
|
Option Agreement, dated August 25, 2014, between Colorado School
of Mines and RMR IP, Inc. (incorporated by reference to our Current Report on Form 8-K/A filed on April 14, 2015) |
|
|
|
10.3 |
|
Consulting Agreement, dated October 15, 2014, between RMR IP,
Inc. and Gregory Dangler (incorporated by reference to our Current Report on Form 8-K/A filed on April 14, 2015) |
|
|
|
10.4 |
|
Consulting Agreement, dated October 15, 2014, between RMR IP,
Inc. and Chad Brownstein (incorporated by reference to our Current Report on Form 8-K/A filed on April 14, 2015) |
|
|
|
10.5 |
|
Consulting Agreement, dated October 15, 2014, between RMR IP,
Inc. and Principio Management LLC (incorporated by reference to our Current Report on Form 8-K/A filed on April 14, 2015) |
10.6 |
|
Consulting Agreement, dated October 15, 2014, between
RMR IP, Inc. and 77727111, LLC (incorporated by reference to our Current Report on Form 8-K/A filed on April 14, 2015) |
|
|
|
10.7 |
|
Registration Rights Agreement, dated February 1, 2015, between
RMR IP, Inc. and Industrial Management, LLC (incorporated by reference to our Amendment No. 2 to the Current Report on Form
8-K/A filed on May 8, 2015). |
|
|
|
10.8 |
|
Voting Agreement, dated February 27, 2015, between Principio
Management LLC and 77727111, LLC (incorporated by reference to our Amendment No. 2 to the Current Report on Form 8-K/A filed
on May 8, 2015). |
|
|
|
10.9 |
|
Assignment Agreement, dated October 15, 2014, between RMR Holdings,
Inc. and RMR IP, Inc. (incorporated by reference to our Amendment No. 2 to the Current Report on Form 8-K/A filed on May 8,
2015). |
|
|
|
21 |
|
List of Subsidiaries – RMR IP,
Inc., a Nevada corporation
|
23.1* |
|
Consent of Hein & Associates LLP
|
23.2** |
|
Consent of Greenberg Traurig, LLP
|
24* |
|
Power of Attorney
|
101* |
|
Interactive Data File |
*Filed Herewith
**To Be Filed By Amendment
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes to:
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication
of such issue.
(i) The registrant hereby undertakes that:
• For
purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by us pursuant to Rule 424(b)(1)
or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared
effective.
• For
the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized,
in Beverly Hills, State of California, on July 1, 2015.
|
RMR Industrials Inc. |
|
|
|
|
By: |
/s/ Chad Brownstein |
|
|
Chad Brownstein |
|
|
Chief Executive Officer |
|
|
(Principal Executive Officer |
|
By: |
/s/ Gregory M. Dangler |
|
|
Gregory M. Dangler |
|
|
President, Chief Financial Officer |
|
|
(Principal Financial Officer and
Principal Accounting Officer) |
SIGNATURES AND
POWER OF ATTORNEY
Known All Persons By These Present, that
each person whose signature appears below appoints Mr. Gregory Dangler as his true and lawful attorney-in-fact and agent, with
full power of substitution, for him and in his name, place and stead, to sign any amendment (including post-effective amendments)
to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and
perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes
as he may do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or any of them, or of his/her
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities
Act, this registration statement has been signed below by the following persons in the capacities and on the dates indicated.
Name |
|
Title |
|
Date |
|
|
|
|
|
/s/ Chad Brownstein |
|
Chief Executive Officer and |
|
July 1, 2015 |
Chad Brownstein |
|
Chairman of the Board of Directors
(Principal Executive Officer) |
|
|
|
|
|
|
|
/s/ Gregory M. Dangler |
|
President, Chief Financial Officer |
|
July 1, 2015 |
Gregory M. Dangler |
|
and Member of the Board of Directors |
|
|
|
|
|
|
|
/s/ Andrew Peltz |
|
Member of the Board of Directors |
|
July 1, 2015 |
Gregory M. Dangler |
|
|
|
|
Exhibit 23.1
Consent of Independent Registered Public
Accounting Firm
We consent to the use in this Registration Statement on Form
S-1 of RMR Industrials, Inc. of our report dated February 27, 2015, except for Note 2 as to which the date is May 8, 2015, relating
to our audit of the financial statements appearing in the Prospectus, which is part of this Registration Statement.
We also consent to the reference to our firm under the captions "Experts" in such Prospectus.
Hein & Associates LLP
Irvine, California
July 1, 2015
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