Item 405 of
Regulation S-B (§229.405 of this chapter) contained herein, and no disclosure
will be contained, to the best of registrant's knowledge, in definitive
proxy or
information statements incorporated by reference in Part III of this Form
10-KSB. o
Check
whether the issuer is a shell company (as defined in Rule 12b-2 of the
Exchange
Act). Yes x No o.
The
Company’s revenues for fiscal year end December 31, 2007 were $0.
As
of
March 26, 2008, there were approximately 4,141,703 shares of common stock
outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE:
None
FORWARD-LOOKING
STATEMENTS
Certain
statements made in this Annual Report on Form 10-KSB are “forward-looking
statements” (within the meaning of the Private Securities Litigation Reform Act
of 1995) regarding the plans and objectives of management for future operations.
Such statements involve known and unknown risks, uncertainties and other
factors
that may cause actual results, performance or achievements of Frezer, Inc.
(the
“Company”) to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. The
forward-looking statements included herein are based on current expectations
that involve numerous risks and uncertainties. The Company's plans and
objectives are based, in part, on assumptions involving the continued expansion
of business. Assumptions relating to the foregoing involve judgments with
respect to, among other things, future economic, competitive and market
conditions and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond the control
of the
Company. Although the Company believes its assumptions underlying the
forward-looking statements are reasonable, any of the assumptions could prove
inaccurate and, therefore, there can be no assurance the forward-looking
statements included in this Annual Report will prove to be accurate. In light
of
the significant uncertainties inherent in the forward-looking statements
included herein, the inclusion of such information should not be regarded
as a
representation by the Company or any other person that the objectives and
plans
of the Company will be achieved.
Transitional
Small Business Disclosure Format (check one): Yes o No x
PART
I
Introduction
and History
Frezer,
Inc. (“we”, “us”, “our”, or the “Company”) was incorporated in the State of
Nevada on May 2, 2005 and maintains its principal executive offices at 190
Lakeview Way, Vero Beach, FL 32963. The Company was previously a wholly owned
subsidiary of BMXP Holdings, Inc., then known as Bio-Matrix Scientific Group,
Inc. (“BMXG”), a Delaware corporation engaged primarily in the development of
medical devices. The board of directors of BMXG voted to distribute all shares
of the Company’s common stock, par
value
$0.001 per share (the “Common Stock”), held
by
BMXG to holders of BMXG common stock of record as of May 31, 2005. On June
15,
2005, these stockholders received one share of the Company’s Common Stock for
each share of BMXG common stock.
On
June
1, 2005, the Company filed a registration statement on Form 10-SB with the
Securities and Exchange Commission (the “SEC”). Upon effectiveness of such
registration statement, the Company has been subject to the reporting
requirements under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”).
From
inception to July 11, 2006 the Company’s objective was to operate in the field
of stem cell banking and regenerative medicine. However, on July 11, 2006,
the
Company’s board of directors (the “Board of Directors”) unanimously approved
resolutions to abandon all plans to develop a stem cell banking facility
and
market that facility's services.
Commencing
on July 11, 2006, the Company shifted its focus to (i) the development and
marketing of intellectual property relating to the Cryo-Chip, which can be used
to provide an extensive line of stem cells for research and development,
and
(ii) the development and marketing of intellectual property relating to
Cryogenic Storage tank modifications for increased storage capacity.
Change
in Control
On
February 1, 2007, the Company and KI Equity Partners IV, LLC (“KI Equity”), a
Delaware limited liability company, entered into a securities purchase agreement
(the “Purchase Agreement”) pursuant to which the Company sold 63,900,000 shares
of Common Stock for an aggregate purchase price of $639,000 to KI Equity.
The
Company sold these shares of Common Stock under the exemption from registration
provided by Section 4(2) of Securities Act of 1933, as amended (the “Securities
Act”) and/or Rule 506 of Regulation D promulgated thereunder. The
closing of the transactions under the Purchase Agreement occurred on February
22, 2007.
A copy
of the Purchase Agreement is attached hereto as Exhibit 2.1. Additionally,
KI
Equity purchased an aggregate of 6,100,000 shares of Common Stock from Brian
F.
Pockett, the former Chief Operating Officer of the Company (“Pockett”), Geoffrey
O’Neill, the former President of the Company (“O’Neill”) and Bombardier Pacific
Ventures, Inc., a Nevada corporation controlled by David R. Koos, the former
Chairman and Chief Executive Officer of Frezer (“Bombardier”)
(collectively, the “Former Principals”) for an aggregate purchase price equal to
$61,000. As a result of KI Equity’s purchase of the aggregate of 70,000,000
shares of Common Stock, the Company experienced a change in control (the
“Change
in Control”).
In
connection with the Change in Control, the Company granted certain demand
and
piggyback registration rights to KI Equity with respect to its shares of
Common
Stock. At the closing of the Change in Control (the “Closing”), the Company and
KI Equity entered into a registration rights agreement (the “Registration Rights
Agreement”) granting the foregoing registration rights. A copy of the
Registration Rights Agreement is attached hereto as Exhibit 4.1.
Immediately
prior to the Closing, the Former Principals entered into a certain indemnity
agreement with the Company (the “Indemnity Agreement”). Under the Indemnity
Agreement, the Former Principals agreed to indemnify and hold the Company
harmless from all liabilities and obligations related to the period prior
to
Closing (“Damages”). Except for indemnity claims related to taxes, the Company
was not entitled to indemnification for any Damages in excess of $499,700,
and
no demand or claim for indemnification may be made after second anniversary
of
the Closing. As consideration for providing the indemnification, the Company
agreed to pay the Principals an aggregate sum of $376,750, of which $25,000
was
held in escrow for ninety days following the Closing to satisfy any
indemnification claims pursuant to the Indemnity Agreement. A copy of the
Indemnity Agreement is attached hereto as Exhibit 2.2.
In
connection with the Purchase Agreement, and as a condition to the Closing,
the
Principals agreed to terminate any and all agreements and contracts with
the
Company and irrevocably release the Company from any and all debts, liabilities
and obligations, pursuant to the terms and conditions of a certain release
agreement (the “Release Agreement”) which was executed at the Closing. A copy of
the Release Agreement is attached hereto as Exhibit 2.3.
Effective
as of the Closing, in accordance with the terms of the Purchase Agreement,
the
existing officers and directors of the Company resigned, and Kevin R. Keating
was appointed as the President,
Secretary, Treasurer, Chief Executive Officer, Chief Financial Officer and
sole
director
of the
Company. The principal executive office of the Company was moved to 936A
Beachland Boulevard, Suite 13, Vero Beach, FL 32963, and has since been moved
to
the Company’s current location at 190
Lakeview Way, Vero Beach, FL 32963.
Current
Business
Following
the Change in Control, Kevin R. Keating commenced an investigation to determine
whether to continue or to cease the then-present operations of the Company.
Mr.
Keating determined it to be in the best interests of the Company to permanently
suspend its operations.
The
Company, based on proposed business activities, is currently a “blank check”
company. The SEC defines those companies as "any development stage company
that
is issuing a penny stock, within the meaning of Section 3(a)(51) of the Exchange
Act, and that has no specific business plan or purpose, or has indicated
that
its business plan is to merge with an unidentified company or companies."
Many
states have enacted statutes, rules and regulations limiting the sale of
securities of "blank check" companies in their respective jurisdictions.
The
Company is also a “shell company,” defined in Rule 12b-2 under the Exchange Act
as a company with no or nominal assets (other than cash) and no or nominal
operations. Management does not intend to undertake any efforts to cause
a
market to develop in our securities, either debt or equity, until we have
successfully concluded a business combination. The Company intends to comply
with the periodic reporting requirements of the Exchange Act for so long
as we
are subject to those requirements.
The
Company’s current business strategy is to investigate and, if such investigation
warrants, acquire a target company or business seeking the perceived advantages
of being a publicly held corporation. The Company’s principal business objective
for the next 12 months and beyond such time will be to achieve long-term
growth
potential through a combination with a business rather than immediate,
short-term earnings. The Company will not restrict our potential candidate
target companies to any specific business, industry or geographical location
and, thus, may acquire any type of business.
Proposed
Merger
On
November 7, 2007, the Company entered into a letter of intent (the “Letter of
Intent”) with Breakthrough Venture Corp. (“Breakthrough”), pursuant to which the
Company intends to combine with Breakthrough either through a merger between
Breakthrough and a wholly owned subsidiary of the Company, or an exchange
of
shares of stock of Breakthrough for shares of Common Stock (the “Merger”). A
detailed description of the Letter of Intent and the Merger is contained
in our
Current Report on Form 8-K filed with the SEC on November 13, 2007. A copy
of
the Letter of Intent is attached hereto as Exhibit 10.1. The Company has
begun
preparation of certain agreements necessary to effectuate the Merger, however,
as of the date hereof, the Company has not entered into any definitive
agreements. There can be no assurances that the Merger or any similar
transaction contemplated under the terms of the Letter of Intent will ever
be
consummated.
Competition
In
the
event the Merger is not consummated, the Company will continue to seek a
potential business combination with a private company seeking the perceived
advantages of being a publicly held corporation. The Company will face vast
competition from other shell companies with the same objectives. The Company
will be in a highly competitive market for a small number of business
opportunities which could reduce the likelihood of consummating a successful
business combination. A large number of established and well-financed entities,
including small public companies and venture capital firms, are active in
mergers and acquisitions of companies that may be desirable target candidates
for us. Nearly all these entities have significantly greater financial
resources, technical expertise and managerial capabilities than we do;
consequently, we will be at a competitive disadvantage in identifying possible
business opportunities and successfully completing a business combination.
These
competitive factors may reduce the likelihood of our identifying and
consummating a successful business combination.
Employees
The
Company currently has no employees other than its sole officer.
Risk
Factors
You
should carefully review and consider the following risks as well as all other
information contained in this Annual Report on Form 10-KSB, including our
financial statements and the notes to those statements. The following risks
and
uncertainties are not the only ones facing us. Additional risks and
uncertainties of which we are currently unaware or which we believe are not
material also could materially adversely affect our business, financial
condition, results of operations, or cash flows. To the extent any of the
information contained in this annual report constitutes forward-looking
information, the risk factors set forth below are cautionary statements
identifying important factors that could cause our actual results
for various financial reporting periods to differ materially from those
expressed in any forward-looking statements made by or on our behalf and
could
materially adversely effect our financial condition, results of operations
or
cash flows.
There
may be conflicts of interest between our management and our non-management
stockholders.
Conflicts
of interest create the risk that management may have an incentive to act
adversely to the interests of other investors. A conflict of interest may
arise
between our management's personal pecuniary interest and its fiduciary duty
to
our stockholders. In addition, our management is currently involved with
other
blank check companies, and in the pursuit of business combinations, conflicts
with such other blank check companies with which it is, and may in the future
become, affiliated, may arise. If we and the other blank check companies
that
our management is affiliated with desire to take advantage of the same
opportunity, then those members of management that are affiliated with both
companies would abstain from voting upon the opportunity. In the event of
identical officers and directors, the officers and directors will arbitrarily
determine the company that will be entitled to proceed with the proposed
transaction.
Additionally,
at least one of the finders of business combinations for the Company is Keating
Investments, LLC, a Delaware limited liability company and an SEC Registered
Investment Advisor. Timothy J. Keating, who beneficially owns 84.5% of our
issued and outstanding Common Stock and is also the son of Kevin R. Keating,
our
President, is the Managing Member of, and holds approximately a 60% interest
in,
Keating Investments, LLC.
We
have a limited operating history.
We
have a
limited operating history and no revenues or earnings from operations since
inception, and there is a risk that we will be unable to continue as a going
concern and consummate a business combination. We have no significant assets
or
financial resources. We will, in all likelihood, sustain operating expenses
without corresponding revenues, at least until the consummation of the Merger
or
some other business combination with a private company. This may result in
our
incurring a net operating loss that will increase unless we consummate the
Merger or a business combination with a profitable business. We cannot assure
you that we will consummate the Merger or, in the event we do not, that we
can
identify a suitable business opportunity and consummate a business combination,
or that any such business will be profitable at the time of its acquisition
by
us or ever.
We
have incurred and may continue to incur losses.
Since
May
2, 2005 (inception) through December 31, 2007, we have incurred a net loss
of
$1,633,296. We
expect
that we will incur losses at least until we complete the Merger or some other
business combination with an operating business and perhaps after such a
combination as well. There can be no assurance that we will complete the
Merger
or other business combination with an operating business or that we will
ever be
profitable.
The
Company has an existing Letter of Intent to effect the Merger; however, there
can be no assurance that such Merger is consummated.
On
November 7, 2007, we
entered into the Letter of Intent with Breakthrough. While we are seeking
to
consummate the Merger in the second fiscal quarter of 2008, we can provide
no
assurance that the Merger will close at that time or at any time thereafter.
In
the event the Merger is not consummated, the Company will resume its efforts
in
locating a private company with which it may merge.
If
we do
not consummate the Merger, we can provide no assurances that we will
successfully identify and evaluate suitable business opportunities or that
we
will conclude a business combination. We cannot guarantee that we will be
able
to negotiate a business combination on favorable terms.
There
is competition for those private companies suitable for a merger transaction
of
the type contemplated by management.
The
Company is in a highly competitive market for a small number of business
opportunities which could reduce the likelihood of consummating a successful
business combination. We are and will continue to be an insignificant
participant in the business of seeking mergers with, joint ventures with
and
acquisitions of small private and public entities. A large number of established
and well-financed entities, including small public companies and venture
capital
firms, are active in mergers and acquisitions of companies that may be desirable
target candidates for us. Nearly all these entities have significantly greater
financial resources, technical expertise and managerial capabilities than
we do;
consequently, we will be at a competitive disadvantage in identifying possible
business opportunities and successfully completing a business combination.
These
competitive factors may reduce the likelihood of our identifying and
consummating a successful business combination.
Future
success is highly dependent on the ability of management to locate and attract
a
suitable acquisition.
The
nature of our operations is highly speculative, and there is a consequent
risk
of loss of your investment. The success of our plan of operation will depend
to
a great extent on the operations, financial condition and management of the
identified business opportunity. While management intends to seek business
combination(s) with entities having established operating histories, we cannot
assure you that we will be successful in locating candidates meeting that
criterion. In the event we complete the Merger of some other business
combination, the success of our operations may be dependent upon management
of
the successor firm or venture partner firm and numerous other factors beyond
our
control.
Management
intends to devote only a limited amount of time to seeking a target company
which may adversely impact our ability to identify a suitable acquisition
candidate.
While
seeking a business combination, management anticipates devoting very limited
time to the Company's affairs. Our sole officer has not entered into a written
employment agreement with us and is not expected to do so in the foreseeable
future. This limited commitment may adversely impact our ability to identify
and
consummate a successful business combination.
The
time and cost of preparing a private company to become a public reporting
company may preclude us from entering into a merger or acquisition with the
most
attractive private companies.
Target
companies that fail to comply with the SEC reporting requirements may delay
or
preclude acquisition. Sections 13 and 15(d) of the Exchange Act require
reporting companies to provide certain information about significant
acquisitions, including certified financial statements for the company acquired,
covering one, two, or three years, depending on the relative size of the
acquisition. The time and additional costs that may be incurred by some target
entities to prepare these statements may significantly delay or essentially
preclude consummation of an acquisition. Otherwise suitable acquisition
prospects that do not have or are unable to obtain the required audited
statements may be inappropriate for acquisition so long as the reporting
requirements of the Exchange Act are applicable.
The
Company may be subject to further government regulation which would adversely
affect our operations.
Although
we are subject to the reporting requirements under the Exchange Act, management
believes we are not subject to regulation under the Investment Company Act
of
1940, as amended (the “Investment Company Act”), since we are not engaged in the
business of investing or trading in securities. If we engage in business
combinations which result in our holding passive investment interests in
a
number of entities, we could be subject to regulation under the Investment
Company Act. If so, we would be required to register as an investment company
and could be expected to incur significant registration and compliance costs.
We
have obtained no formal determination from the SEC as to our status under
the
Investment Company Act and, consequently, violation of the Investment Company
Act could subject us to material adverse consequences.
Any
potential acquisition or merger with a foreign company may subject us to
additional risks.
If
we
enter into a business combination with a foreign company, we will be subject
to
risks inherent in business operations outside of the United States. These
risks
include, for example, currency fluctuations, regulatory problems, punitive
tariffs, unstable local tax policies, trade embargoes, risks related to shipment
of raw materials and finished goods across national borders and cultural
and
language differences. Foreign economies may differ favorably or unfavorably
from
the United States economy in growth of gross national product, rate of
inflation, market development, rate of savings, and capital investment, resource
self-sufficiency and balance of payments positions, and in other
respects.
The
Company may be subject to certain tax consequences in our business, which
may
increase our cost of doing business.
We
may
not be able to structure the Merger or our acquisition to result in tax-free
treatment for the companies or their stockholders, which could deter third
parties from entering into certain business combinations with us or result
in
being taxed on consideration received in a transaction. Currently, a transaction
may be structured so as to result in tax-free treatment to both companies,
as
prescribed by various federal and state tax provisions. We intend to structure
any business combination so as to minimize the federal and state tax
consequences to both us and the target entity; however, we cannot guarantee
that
the business combination will meet the statutory requirements of a tax-free
reorganization or that the parties will obtain the intended tax-free treatment
upon a transfer of stock or assets. A non-qualifying reorganization could
result
in the imposition of both federal and state taxes that may have an adverse
effect on both parties to the transaction.
Our
business will have no revenue unless and until we merge with or acquire an
operating business.
We
are a
development stage company and have had no revenue from operations. We do
not
expect to realize any revenue unless and until we successfully merge with
or
acquire an operating business.
Our
stockholders may have a minority interest in the Company following the Merger
or
other business combination with an operating business.
If
we
consummate the Merger or business combination with a company with a value
in
excess of the value of our Company and issue shares of Common
Stock to
the
stockholders of such company as consideration for merging with us, our
stockholders would own less than 50% of the Company after the business
combination. The stockholders of the acquired company would therefore be
able to
control the election of our Board of Directors and control our Company.
There
is no active trading market in our securities
Although
our Common Stock is quoted on the OTCBB, there is no active trading in the
stock. A trading market may not develop and stockholders may not be able
to
liquidate their investment without considerable delay. If a market should
develop, the price of our stock may be highly volatile.
Liquidity
of certain shares of our Common Stock issued is
limited.
Certain
shares of our
Common
Stock that were issued
after we became a “shell company” (as defined in Rule 12b-2 under the Exchange
Act) (the “Shell Company Common Stock”) are not registered under the securities
laws of any state or other jurisdiction, and cannot be offered, sold, pledged
or
otherwise transferred unless subsequently registered pursuant to, or exempt
from
registration under, the Securities Act and any other applicable federal or
state
securities laws or regulations. Shares
of
the Shell Company Common Stock cannot be sold under the exemptions from
registration provided by Rule 144 under (“Rule 144”) or Section 4(1) of the
Securities Act, in accordance with the letter from Richard K. Wulff, Chief
of
the Office of Small Business Policy of the Securities and Exchange Commission’s
Division of Corporation Finance, to Ken Worm of NASD Regulation, dated January
21, 2000 (the “Wulff Letter”). The Wulff Letter provides that certain private
transfers of the shares of common stock also may be prohibited without
registration under federal securities laws. The SEC changed certain aspects
of
the Wulff Letter and such changes apply retroactively to our stockholders.
Since
February 15, 2008, all holders of shares of common stock of a “shell company”
have been permitted to sell their shares of common stock under Rule 144,
subject
to certain restrictions, starting one year after (i) the completion of a
business combination with a private company in a reverse merger or reverse
takeover transaction after which the company would cease to be a “shell company”
(as defined in Rule 12b-2 under the Exchange Act) and (ii) the disclosure
of
certain information on a Current Report on Form 8-K within four business
days
thereafter.
Compliance
with the criteria for securing exemptions under federal securities laws and
the
securities laws of the various states is extremely complex, especially in
respect of those exemptions affording flexibility and the elimination of
trading
restrictions in respect of securities received in exempt transactions and
subsequently disposed of without registration under the Securities Act or
state
securities laws.
There
are issues impacting liquidity of the Shell Company Common Stock with respect
to
the SEC’s review of a future resale registration
statement.
The
Shell
Company Common Stock cannot currently, nor will it for a considerable period
of
time after we complete a business combination, be available to be offered,
sold,
pledged or otherwise transferred without being registered pursuant to the
Securities Act. Therefore, we will likely file a resale registration statement
on Form S-1, or some other available form, to register for resale such Shell
Company Common Stock. We cannot control this future registration process
in all
respects as some matters are outside our control. Even if we are successful
in
causing the effectiveness of the resale registration statement, there can
be no
assurances that the occurrence of subsequent events may not preclude our
ability
to maintain the effectiveness of the registration statement. Any of the
foregoing items could have adverse effects on the liquidity of the Shell
Company
Common Stock.
In
addition, the SEC has recently disclosed that it has developed internal informal
guidelines concerning the use of a resale registration statement to register
the
securities issued to certain investors in private investment in public equity
(PIPE) transactions, where the issuer has a market capitalization of less
than
$75 million and, in general, does not qualify to file a Registration Statement
on Form S-3 to register its securities if the issuer’s securities are listed on
the Over-the-Counter Bulletin Board or on the Pink Sheets. The SEC has taken
the
position that these smaller issuers may not be able to rely on Rule 415 under
the Securities Act (“Rule 415”), which generally permits the offer and sale of
securities on a continued or delayed basis over a period of time, but instead
would require that the issuer offer and sell such securities in a direct
or
"primary" public offering, at a fixed price, if the facts and circumstances
are
such that the SEC believes the investors seeking to have their shares registered
are underwriters and/or affiliates of the issuer. It appears that the SEC
in
most cases will permit a registration for resale of up to one third of the
total
number of shares of common stock then currently owned by persons who are
not
affiliates of such issuer and, in some cases, a larger percentage depending
on
the facts and circumstances. Staff members also have indicated that an issuer
in
most cases will have to wait until the later of six months after effectiveness
of the first registration or such time as substantially all securities
registered in the first registration are sold before filing a subsequent
registration on behalf of the same investors. Since, following a reverse
merger
or business combination, we may have little or no tradable shares of Shell
Company Common Stock, it is unclear as to how many, if any, shares of Shell
Company Common Stock the SEC will permit us to register for resale, but SEC
staff members have indicated a willingness to consider a higher percentage
in
connection with registrations following reverse mergers with shell companies
such as the Company. The SEC may require as a condition to the declaration
of
effectiveness of a resale registration statement that we reduce or “cut back”
the number of shares of Shell Company Common Stock to be registered in such
registration statement. The result of the foregoing is that a stockholder’s
liquidity in Shell Company Common Stock may be adversely affected in the
event
the SEC requires a cut back of the securities as a condition to allow the
Company to rely on Rule 415 with respect to a resale registration statement,
or,
if the SEC requires us to file a primary registration statement.
The
Company may be subject to certain tax consequences in our business, which
may
increase our cost of doing business.
We
may
not be able to structure our acquisition to result in tax-free treatment
for the
companies or their stockholders, which could deter third parties from entering
into certain business combinations with us or result in being taxed on
consideration received in a transaction. Currently, a transaction may be
structured so as to result in tax-free treatment to both companies, as
prescribed by various federal and state tax provisions. We intend to structure
any business combination so as to minimize the federal and state tax
consequences to both us and the target entity; however, we cannot guarantee
that
the business combination will meet the statutory requirements of a tax-free
reorganization or that the parties will obtain the intended tax-free treatment
upon a transfer of stock or assets. A non-qualifying reorganization could
result
in the imposition of both federal and state taxes that may have an adverse
effect on both parties to the transaction.
The
Company intends to issue more shares in a merger or acquisition, which will
result in substantial dilution.
We
are
authorized to issue a maximum of 200,000,000 shares of Common Stock and a
maximum of 10,000,000 shares of preferred stock, par value $.001 per share
(the
“Preferred Stock”). Any merger or acquisition effected by us may result in the
issuance of additional securities without stockholder approval and may result
in
substantial dilution in the percentage of Common Stock held by our then existing
stockholders. Moreover, the Common Stock issued in any such merger or
acquisition transaction may be valued on an arbitrary or non-arm’s-length basis
by our management, resulting in an additional reduction in the percentage
of
Common Stock held by our then existing stockholders. Our Board
of
Directors has the power to issue any or all of such authorized but unissued
shares without stockholder approval. To the extent that additional shares
of
Common
Stock are
issued in connection with a business combination or otherwise, dilution to
the
interests of our stockholders will occur and the rights of the holders of
Common
Stock might
be
materially and adversely affected.
Because
we may seek to complete a business combination through a “reverse merger”,
following such a transaction we may not be able to attract the attention
of
major brokerage firms.
Additional
risks may exist since we will assist a privately held business to become
public
through a “reverse merger.” Securities analysts of major brokerage firms may not
provide coverage of our Company since there is no incentive to brokerage
firms
to recommend the purchase of our Common
Stock.
No
assurance can be given that brokerage firms will want to conduct any secondary
offerings on behalf of our post-merger company in the future.
Our
controlling stockholders may engage in a transaction to cause the Company
to
repurchase their shares of Common Stock.
In
order
to provide an interest in the Company to a third party, our controlling
stockholders may choose to cause the Company to sell Company securities to
third
parties, with the proceeds of such sale being utilized by the Company to
repurchase shares of Common Stock held by the stockholders. As a result of
such
transaction, our management, stockholders and Board of Directors may change.
Item
2. Description of Property.
Effective
February 27, 2007, the Company entered into a management agreement with Vero
Management, L.L.C., a Delaware limited liability company (“Vero”), pursuant to
which Vero shall provide office space, located at 190
Lakeview Way, Vero Beach, FL 32963,
and
other services for a fixed monthly fee of $1,000 for an initial period of
twelve
months. At the end of the initial twelve month term, the agreement will continue
to remain in effect until terminated in writing by either party. Kevin R.
Keating, the sole officer and director of the Company, owns and controls
Vero.
Item
3. Legal Proceedings.
Presently,
there are no material pending legal proceedings to which the Company is a
party
or as to which any of its property is subject, and no such proceedings are
known
to the Company to be threatened or contemplated against it.
Item
4. Submission of Matters to a Vote of Security Holders.
None.
PART II
Item
5. Market for Common Equity and Related Stockholder
Matters.
Common
Stock
The
Company is authorized to issue 200,000,000 shares of Common Stock, pursuant
to
the Certificate of Amendment to its Articles of Incorporation filed with
the
State of Nevada on April 12, 2007 (the “Amendment”). The Amendment was approved
by the Board of Directors and the record owner of 70,000,000 shares of Common
Stock, representing approximately 84.5% of the outstanding voting securities
of
the Company. A copy of the Amendment is attached hereto as Exhibit
3.2.
Our
Common Stock was approved for quotation on the OTCBB
on
September 28, 2006 and currently trades under the symbol FREZ. Our Common
Stock
previously traded on the OTCBB under the symbol FRZR.
The
following table shows the high and low closing price of the Company's Common
Stock for each quarterly period for last two fiscal years as reported by
the
OTCBB for the periods indicated:
For
the Fiscal Year Ended on December 31, 2006
|
High
|
|
Low
|
|||||
|
Quarter
Ended March 31, 2006
|
|
|
N/A
|
|
|
N/A
|
|
|
Quarter
Ended June 30, 2006
|
|
|
N/A
|
|
|
N/A
|
|
|
Quarter
Ended September 30, 2006
|
|
|
N/A
|
|
|
N/A
|
|
|
Quarter
Ended December 31, 2006
|
$
|
1.00
|
$
|
0.08
|
|||
For
the Fiscal Year Ended on December 31, 2007
|
High*
|
|
Low*
|
|||||
|
Quarter
Ended March 31, 2007
|
|
|
0.21
|
|
|
0.09
|
|
|
Quarter
Ended June 30, 2007
|
|
|
0.20
|
|
|
0.12
|
|
|
Quarter
Ended September 30, 2007
|
|
|
0.13
|
|
|
0.04
|
|
|
Quarter
Ended December 31, 2007
|
|
$
|
0.12
|
|
$
|
0.04
|
|
The
quotations set forth in the table above reflect inter-dealer prices, without
retail mark-up, mark-down or commission, and may not necessarily represent
actual transactions. As of March 26, 2008, there were approximately 547 holders
of record of our Common Stock.
Preferred
Stock
The
Company is authorized to issue 10,000,000 shares of Preferred Stock, pursuant
to
the Amendment. The Company has not yet issued any of the Preferred Stock.
Dividend
Policy
We
did
not pay dividends during the fiscal year ended December 31, 2007. We do not
expect to declare dividends for the immediate future.
Securities
Authorized for Issuance under Equity Compensation Plans
None.
Recent
Sales of Unregistered Securities
During
the period covered by this Annual Report, we have issued the following
unregistered securities which have not been previously reported under this
Item.
None of these transactions involved any underwriters, underwriting discounts
or
commissions, except as specified below, or any public offering, and we believe
that each transaction was exempt from the registration requirements of the
Securities Act by virtue of Section 4(2) thereof and/or Regulation D promulgated
thereunder.
On
February 22, 2007, the Company issued 63,900,000 shares of Common Stock to
KI
Equity for aggregate proceeds equal to $639,000. The Company sold these shares
of Common Stock under the exemption from registration provided by Section
4(2)
of the Securities Act and/or Rule 506 of Regulation D promulgated thereunder.
On
February 27, 2007, the Company issued 1,700,000 shares of Common Stock to
Garisch Financial, Inc. (“GFI”) for consulting services rendered to the Company
valued at $17,000, or $0.01 per share. On February 27, 2007, the Company
also
issued 1,700,000 shares of Common Stock to Kevin R. Keating, our sole officer
and director, for services rendered to the Company valued at $17,000, or
$0.01
per share. The Company sold these shares of Common Stock under the exemption
from registration provided by Section 4(2) of the Securities Act and/or Rule
506
of Regulation D promulgated thereunder.
Reverse
Stock Split
On
February 26, 2008 (the “Effective Date”), the Board of Directors effected the
Reverse Split. Accordingly, the number of issued and outstanding shares of
Common Stock was reduced in accordance with the exchange ratio of the Reverse
Split. Under the recapitalization structure, the 82,834,064 issued
and outstanding shares of Common Stock were reverse split resulting in
approximately 4,141,703 shares of Common Stock issued and outstanding post-
recapitalization. This figure does not take into account such additional
shares
that shall be outstanding as a result of the special treatment provided for
certain stockholders, as described below, to preserve round lot
stockholders. The par value of the Common Stock remains unchanged as
does the number of authorized shares of Common Stock. The Board of
Directors
effected
the Reverse Split more
than 20
days after the mailing date of the information statement on the Record Date.
No
further action on the part of stockholders was required to effect the Reverse
Split.
The
Company’s Board of Directors approved special treatment of stockholders of
record as of the Record Date holding fewer than 2,000 shares of Common Stock
to
prevent those stockholders from holding less than 100 shares after the Reverse
Split (the “Special Treatment”). Accordingly, stockholders who held less than
2,000 shares but at least 100 shares of Common Stock as of the Record Date,
and
who continued to hold such shares as of the Effective Date received 100 shares
of Common Stock. Stockholders who held less than 2,000 shares but at
least 100 shares after the Record Date, and who continued to hold such shares
as
of the Effective Date were not afforded the Special Treatment. No fractional
shares were issued for any fractional share interest created by the Reverse
Split. Any stockholder who would have otherwise received a fractional share
instead received a full share of Common Stock for any fractional share interests
created by the Reverse Split.
Item
6. Management’s Discussion and Analysis or Plan of
Operation.
Plan
of Operation
The
Company currently does not engage in any business activities that provide
cash
flow. The costs of investigating and analyzing business combinations for
the
next 12 months and beyond such time will be paid with money in our treasury.
During
the next twelve months we anticipate incurring costs related to:
(i) filing
of
reports under the Exchange Act, and
(ii) consummating
an acquisition.
We
believe we will be able to meet these costs through use of funds in our
treasury, through deferral of fees by certain service providers and additional
amounts, as necessary, to be loaned to or invested in us by our stockholders,
management or other investors.
The
Company may consider a business which has recently commenced operations,
is a
developing company in need of additional funds for expansion into new products
or markets, is seeking to develop a new product or service, or is an established
business which may be experiencing financial or operating difficulties and
is in
need of additional capital. In the alternative, a business combination may
involve the acquisition of, or merger with, a company which does not need
substantial additional capital, but which desires to establish a public trading
market for its shares, while avoiding, among other things, the time delays,
significant expense, and loss of voting control which may occur in a public
offering.
Kevin
R.
Keating, our sole officer and director, has had contact and discussions with
representatives of other entities regarding a business combination with us.
Any
target business that is selected may be a financially unstable company or
an
entity in its early stages of development or growth, including entities without
established records of sales or earnings. In that event, we will be subject
to
numerous risks inherent in the business and operations of financially unstable
and early stage or potential emerging growth companies. In addition, we may
effect a business combination with an entity in an industry characterized
by a
high level of risk, and, although our management will endeavor to evaluate
the
risks inherent in a particular target business, there can be no assurance
that
we will properly ascertain or assess all significant risks.
The
Company anticipates that the selection of a business combination will be
complex
and extremely risky. Because of general economic conditions, rapid technological
advances being made in some industries and shortages of available capital,
our
management believes that there are numerous firms seeking even the limited
additional capital which we will have and/or the perceived benefits of becoming
a publicly traded corporation. Such perceived benefits of becoming a publicly
traded corporation include, among other things, facilitating or improving
the
terms on which additional equity financing may be obtained, providing liquidity
for the principals of and investors in a business, creating a means for
providing incentive stock options or similar benefits to key employees, and
offering greater flexibility in structuring acquisitions, joint ventures
and the
like through the issuance of stock. Potentially available business combinations
may occur in many different industries and at various stages of development,
all
of which will make the task of comparative investigation and analysis of
such
business opportunities extremely difficult and complex.
Pursuant
to the Letter of Intent, the Company presently intends to combine with
Breakthrough either through the merger of Breakthrough and a wholly owned
subsidiary of the Company, or through an exchange of shares of stock of
Breakthrough for shares of Common Stock. There can be no assurances that
the
Merger or any similar transaction contemplated under the terms of the Letter
of
Intent will ever be consummated.
Results
of Operations
For
the
year ended December 31, 2007 the Company had no activities that produced
revenues from operations.