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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 1-A/amendment No. 3

Tier ii offering

 

Offering Statement UNDER THE SECURITIES ACT OF 1933 CURRENT REPORT

elektros, INC.

(Exact name of registrant as specified in its charter)

 

Date: September 22, 2021

 

 

Nevada 3711 85-4235616

(State or Other Jurisdiction

of Incorporation)

(Primary Standard Classification Code)

(IRS Employer

Identification No.)

  

 

1626 South 17th Avenue
Hollywood, Florida

Telephone: 347-885-9734

 

(Address, including zip code, and telephone number,
including area code, of registrant’s principal executive offices)

 

 

THIS OFFERING STATEMENT SHALL ONLY BE QUALIFIED UPON ORDER OF THE COMMISSION, UNLESS A SUBSEQUENT AMENDMENT IS FILED INDICATING THE INTENTION TO BECOME QUALIFIED BY OPERATION OF THE TERMS OF REGULATION A.

 

PART I - NOTIFICATION

 

Part I should be read in conjunction with the attached XML Document for Items 1-6

 

PART I - END


 

An offering statement pursuant to Regulation A relating to these securities has been filed with the Securities and Exchange Commission. Information contained in this Preliminary Offering Circular is subject to completion or amendment. The securities referenced herein may not be sold, nor may offers to buy be accepted, before the offering statement filed with the Securities and Exchange Commission is qualified. This Preliminary Offering Circular shall not constitute an offer to sell or the solicitation of an offer to buy, nor may there be any sales of the securities referenced herein in any state in which such offer, solicitation or sale would be unlawful before registration or qualification under the laws of such state. The issuer of the securities referenced herein may elect to satisfy its obligation to deliver a Final Offering Circular by sending you a notice within two business days after the completion of our sale to you that contains the URL where the Offering Circular was filed may be obtained.

 

 

 

FINAL OFFERING CIRCULAR DATED SEPTEMBER 22, 2021

 

UP TO A MAXIMUM OF 37,500,000 SHARES OF COMMON STOCK

SEE “SECURITIES BEING OFFERED” AT PAGE 3.

 

MINIMUM INDIVIDUAL INVESTMENT: None

 

 

  Price Per Share to Public* Underwriting discount and commissions Proceeds to issuer
Common Stock      

 

*The Company will provide a final fixed price in an offering circular supplement after qualification of our offering statement by the Commission. The offering will commence within two calendar days after the qualification date by the Commission.

  

The Company reserves the right to change the fixed Price Per Share to Public during the course of the offering and will file a post-qualification offering circular amendment or an offering circular supplement to the Offering Statement at the time depending if any changes are determined to be substantive or not. The Company is a “shell” company in accordance with Rule 405 promulgated under the Securities Act of 1933. Accordingly, any securities sold in this offering can only be resold through registration under the Securities Act of 1933; Section 4(1), if available, for non-affiliates; or by meeting the following conditions of Rule 144(i): (a) the issuer of the securities that was formerly a shell company has ceased to be a shell company; (b) the issuer of the securities is subject to the reporting requirements of Section 13 or 15(D) of the Exchange Act of 1934; and the issuer of the securities has filed all Exchange Act reports and material required to be filed during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and at least one year has lapsed from the time that the issuer filed current Form 10 type information with the Commission reflecting its status as an entity that is not a shell company. For purposes herein, following the effectiveness of this Offering Statement, the Company will not be subject to the reporting requirements of the Exchange Act. Thus, the Company will be required to file another registration statement and become subject to the reporting requirements thereof in order to potentially provide for the application of Rule 144.

 

The Company is offering, on a best-efforts, self-underwritten basis, up to a maximum of 37,500,000 shares of our common stock at a fixed priced per share between $0.05 and $2.00 with no minimum amount to be sold. Upon the filing of a final offering circular by the Company with the Commission, all of the shares registered in this offering will be freely transferable but with restriction on resale since we are a shell company.

 

The offering will terminate at the earlier of the date at which the maximum offering amount has been sold or the date at which the offering is earlier terminated by the Company in its sole discretion. On May 28, 2021 ELEK effectuated a holding company reorganization by and between China Xuefeng Environmental Engineering, Inc., (“CXEE”), ELEK and ELEK Merger Sub, Inc. The result of the merger was that each and every shareholder of CXEE became a shareholder of ELEK with each share of common stock of CXEE held by CXEE shareholder becoming an equivalent amount of stock held in ELEK. Contemporaneously following the merger, ELEK cancelled all of the stock that it held in CXEE. ELEK and CXEE each became a stand-alone company post merger.

 

Prior to this offering, there was no public market for our common shares. Our ticker symbol is ELEK and we trade in the OTC MarketPlace pink market tier. Our shares are thinly traded meaning our shares cannot be easily sold and have low volume of shares trading per day which can lead to volatile changes in price per share.

 

It is currently estimated that the direct public offering price per share will be between $.05 and $2.00 with no minimum amount of shares to be sold and up to a maximum amount of 37,500,000 shares sold not to exceed $75,000,000 in gross proceeds. 

 

                The Company expects that the amount of expenses of the offering that it will pay will be approximately $25,000.

                  

The offering is being conducted on a best-efforts basis without any minimum aggregate investment target. The Company may undertake one or more closings on a rolling basis. After each closing, funds tendered by investors will be available to the Company.

 

INVESTMENT IN SMALL BUSINESSES INVOLVES A HIGH DEGREE OF RISK, AND INVESTORS SHOULD NOT INVEST ANY FUNDS IN THIS OFFERING UNLESS THEY CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. SEE THE SECTION ENTITLED “RISK FACTORS.”

 

IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED OR APPROVED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THESE AUTHORITIES HAVE NOT PASSED UPON THE ACCURACY OR ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

 

 

THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OR GIVE ITS APPROVAL OF ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION.

 

GENERALLY NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(d)(2)(i)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO www.investor.gov.

 

This offering is inherently risky. See “Risk Factors” beginning on page 6.

  

 

Sales of these securities will commence on approximately      ____  , 2021.

 

The Company is following the “Offering Circular” format of disclosure under Regulation A.

 

 

AN OFFERING STATEMENT PURSUANT TO REGULATION A RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. INFORMATION CONTAINED IN THIS PRELIMINARY OFFERING CIRCULAR IS SUBJECT TO COMPLETION OR AMENDMENT. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED BEFORE THE OFFERING STATEMENT FILED WITH THE COMMISSION IS QUALIFIED. THIS PRELIMINARY OFFERING CIRCULAR SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR MAY THERE BE ANY SALES OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL BEFORE REGISTRATION OR QUALIFICATION UNDER THE LAWS OF SUCH STATE. THE COMPANY MAY ELECT TO SATISFY ITS OBLIGATION TO DELIVER A FINAL OFFERING CIRCULAR BY SENDING YOU A NOTICE WITHIN TWO BUSINESS DAYS AFTER THE COMPLETION OF THE COMPANY’S SALE TO YOU THAT CONTAINS THE URL WHERE THE FINAL OFFERING CIRCULAR OR THE OFFERING STATEMENT IN WHICH SUCH FINAL OFFERING CIRCULAR WAS FILED MAY BE OBTAINED. 

   

 

In this public offering we, “Elektros, Inc.” are offering up to a maximum of 37,500,000 shares of our common stock.  We will receive all of the proceeds from the sale of shares. The offering is being made on a self-underwritten, “best efforts” basis notwithstanding shares may be sold to or through underwriters or dealers, directly to purchasers or through agents designated from time to time. For additional information regarding the methods of sale, you should refer to the section entitled “Plan of Distribution” in this offering. There is no minimum number of shares required to be purchased by each investor.  The shares offered by the Company will be sold on our behalf by our sole director and Chief Executive Officer, Shlomo Bleier. Mr. Bleier is deemed to be an underwriter of this offering. He will not receive any commissions or proceeds for selling the registered shares on our behalf.  There is uncertainty that we will be able to sell any of the shares being offered herein by the Company.

   

Currently, we have 371,820,871 common shares outstanding. Mr. Bleier owns 326,000,000 common shares of the Company resulting in control and representing a voting percentage of 80.68 %.

 

The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act, which became law in April 2012 and will be subject to reduced public company reporting requirements.

 

- 1 -


  

The following table of contents has been designed to help you find important information contained in this offering circular. We encourage you to read the entire offering circular.

 

 

TABLE OF CONTENTS

 

PART - II OFFERING CIRCULAR PAGE
   
offering circular SUMMARY 2
SUMMARY OF FINANCIAL INFORMATION 5
MANAGEMENT’S DISCUSSION AND ANALYSIS 5
RISK FACTORS 6
INDUST RY OVERVIEW 11
FORWARD-LOOKING STATEMENTS 12
DESCRIPTION OF BUSINESS 12
USE OF PROCEEDS 13
DETERMINATION OF OFFERING PRICE 14
DILUTION 14
PLAN OF DISTRIBUTION 15
DESCRIPTION OF SECURITIES 16
INTERESTS OF NAMED EXPERTS AND COUNSEL 16
REPORTS TO SECURITIES HOLDERS 17
DESCRIPTION OF FACILITIES 17
LEGAL PROCEEDINGS 17
PATENTS AND TRADEMARKS 17
DIRECTORS AND EXECUTIVE OFFICERS 17
EXECUTIVE COMPENSATION 18
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 20
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 20
FINANCIAL STATEMENTS F1-F10
 
PART - III  
   
INDEMNIFICATION OF OFFICERS AND DIRECTORS 21
RECENT SALES OF UNREGISTERED SECURITIES 21
EXHIBITS TO OFFERING STATEMENT 21
SIGNATURES 22

 

In this Offering Circular, the term “Elektros,” “we,” “us,” “our” or “the Company” refers to Elektros, Inc. The term ‘‘common stock’’ refers to shares of the Company’s common stock.

 

THIS OFFERING CIRCULAR MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO THE COMPANY’S MANAGEMENT. WHEN USED IN THE OFFERING MATERIALS, THE WORDS “ESTIMATE,” “PROJECT,” “BELIEVE,” “ANTICIPATE,” “INTEND,” “EXPECT” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS, WHICH CONSTITUTE FORWARD LOOKING STATEMENTS. THESE STATEMENTS REFLECT MANAGEMENT’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE. THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO REVISE OR UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER SUCH DATE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.


Table of Contents

 

PART - II 

offering circular SUMMARY

 

Background

 

Elektros Inc.., a Nevada corporation (“Elektros” ,“the Company”, or “Successor”) was incorporated on December 1, 2020 under the laws of the state of Nevada.

 

We have commenced operations and have nominal assets and liabilities. The Company is a “shell” company in accordance with Rule 405 promulgated under the Securities Act of 1933. Accordingly, any securities sold in this offering can only be resold through registration under the Securities Act of 1933; Section 4(1), if available, for non-affiliates; or by meeting the following conditions of Rule 144(i): (a) the issuer of the securities that was formerly a shell company has ceased to be a shell company; (b) the issuer of the securities is subject to the reporting requirements of Section 13 or 15(D) of the Exchange Act of 1934; and the issuer of the securities has filed all Exchange Act reports and material required to be filed during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and at least one year has lapsed from the time that the issuer filed current Form 10 type information with the Commission reflecting its status as an entity that is not a shell company. For purposes herein, following the effectiveness of this Offering Statement, the Company will not be subject to the reporting requirements of the Exchange Act. Thus, the Company will be required to file another registration statement and become subject to the reporting requirements thereof in order to potentially provide for the application of Rule 144.”

 

On March 1, 2021, we entered into an Agreement with Technicon Design Corporation DBA Segula Technologies, Inc.to create a high level development road-map for us and they will work to identify companies with a developed EV Chassis which can be used to jump-start the vehicle development process for us. Segula will design and develop with production intent for a single design theme Electric SUV. The total estimated cost of design and full size prototype/vehicle development including materials is estimated to be $8,000,000. The overall estimated time to deliver the road-map is estimated to be 304 hours. The main project milestones are defined to as: Exterior and Interior Design, 12 weeks; Digital Theme development and surfacing, 12 weeks; and Manufacture/Build, 24 weeks. Payment of approximately $25,000 has been paid to Segula on March 1, 2021 for the design/marketing stage.

 

On May 25, 2021, the Company entered into a “Agreement and Plan of Merger”, whereas it agreed to, and subsequently participated in, a Nevada holding company reorganization pursuant to NRS 92A.180, NRS 92A.200, NRS 92A.230 and NRS 92A.250 (“Reorganization”). There was no shareholder vote required and there was no shareholder meeting. The constituent corporations in the Reorganization were China Xuefeng Environmental Engineering, Inc. (“CXEE” or “Predecessor”), Elektros, Inc. (“ELEK” or“Successor”), and Elektros Merger Sub, Inc. (“Merger Sub”). Our former director, Levi Jacobson was, the sole director/officer of each constituent corporation in the Reorganization.

 

Elektros, Inc. issued 1,000 common shares of its common stock to Predecessor and Merger Sub issued 1,000 shares of its common stock to Elektros, Inc. immediately prior to the Reorganization. As such, immediately prior to the merger, Elektros, Inc. became a wholly owned direct subsidiary of CXEE and Merger Sub became a wholly owned and direct subsidiary of ELEK.

 

The merger was effectuated on May 28, 2021 (“Effective Time”), whereas the Company filed Articles of Merger with the Nevada Secretary of State. At the Effective Time, Predecessor was merged with and into Merger Sub (the “Merger), and Predecessor became the surviving corporation. Each share of Predecessor common stock issued and outstanding immediately prior to the Effective Time was converted into one validly issued, fully paid and non-assessable share of ELEK’S common stock.

 

At the Effective Time, Elektros, Inc., as successor issuer to China Xuefeng Environmental Engineering Group, Inc. continued to trade in the OTC MarketPlace under the previous ticker symbol of Predecessor “CXEE” until the new ticker symbol “ELEK” for the Company was released into the OTC MarketPlace on June 7, 2021. The Company was given a CUSIP Number by CUSIP Global Services for its common stock of 286176102.

 

Our Common Stock is quoted on the OTC Markets Group Inc.’s Pink® Open Market under the symbol “ELEK”.

 

The Company believes that the Reorganization, was not a transaction of the type described in subparagraph (a) of Rule 145 under the Securities Act of 1933 and the consummation of the Reorganization will not be deemed to involve an “offer”, “offer to sell”, “offer for sale” or “sale” within the meaning of Section 2(3) of the Securities Act of 1933. The Reorganization was consummated without the vote or consent of the Company’s stockholders. In addition, the provisions of NRS 92A.180 did not provide a stockholder of the Company with appraisal rights in connection with the Reorganization. The Company believes that in the absence of any right of any of the Company’s stockholders to vote with respect to the Reorganization or to insist that their shares be purchased for fair value, the Reorganization could not be deemed to involve an “offer” “offer to sell”; or “sale” within the meaning of Section 2(3) of the Securities Act of 1933.

 

On May 28, 2021, after the completion of the Holding Company Reorganization, we cancelled all of the stock we held in CXEE resulting in CXEE and ELEK each as a stand-alone company. Pursuant to the holding company merger agreement and effects of merger, all of the assets and liabilities, if any, remain with CXEE after the Reorganization. Levi Jacobson, the Director of CXEE and our former Director did not discover any assets of CXEE from the time he was appointed custodian and Director until the completion of the Reorganization and subsequent separation of CXEE as a stand-alone company.

 

Given that the former business plan and objectives of CXEE and the present day business plan and objectives of Elektros substantially differ from one another, we conducted the corporate separation with CXEE contemporaneously after the effective time of the Reorganization in order to avoid any shareholder confusion. The former business plan of CXEE ( providing services to optimize garbage-recycling processes under the leadership of its former directors, does not, in any way, represent the current day business plan of ELEK, and thus it is the belief of the Company that the corporate separation ameliorated shareholder confusion about our identity and/or corporate objectives. Furthermore, we wanted to continue trading in the OTC MarketPlace.

 

The corporate actions taken by the Company, including, but not limited to, the corporate structuring of the transactions, was deemed, in the discretion of our former sole director, to be for the benefit of the corporation and its shareholders. Former shareholders of CXEE are now the shareholders of ELEK. The former shareholders of CXEE now have the opportunity to benefit under our business plan and we have the opportunity to grow organically from our built in shareholder base and new leadership under our new director Shlomo Bleier. It will be easier for us now to borrow funds because we trade in the OTC MarketPlace which is attractive to investors.

 

The Company has begun operations to design, develop and manufacture and sell fully electric sport utility vehicles.

 

Currently, Jewish Enrichment Enterprise, Inc. owned and controlled by Shlomo Bleier, our sole officer and director is our controlling shareholder, owning 300,000,000 shares of our restricted common stock representing approximately 80.68% voting control. Mr. Levi Jacobson was our sole officer and director of CXEE and Elektros immediately before and at the effective time of the Reorganization. Mr. Jacobson resigned as Elektros sole officer/director on July 1, 2021. Mr. Jacobson’s resignation is attached to our offering statement as EX1A-15. On the same date, Mr. Shlomo Bleier was appointed our sole officer/director by majority vote of shareholders and by our former director. Mr. Jacobson cancelled all of his shares held indirectly in Elektros by Goldjay Realty, Inc. and an equivalent amount of shares were subsequently issued to Jewish Enrichment Enterprise, Inc., an entity solely controlled by Mr. Bleier as compensation for his services pursunat to Rule 4(a)(2).

 

Additional Information relating to Predecessor:

 

Pursuant to a court order issued by the Eighth Judicial District Court, Clark County Nevada (the “Court”), Levi Jacobson was appointed custodian, interim director, president, secretary and treasurer of CXEE on November 19, 2020.

Mr. Jacobson was vested with the right to exercise all of the powers of the corporation, through or in place of its board of directors or officers. Mr. Jacobson was bestowed with all the powers specified in NRS 78.347(6) that states Custodian shall have all the powers and title of a trustee appointed under NRS 78.590, NRS 78.635 and 78.650. Custodians so appointed shall also have the powers as provided in NRS 78.640 and 78.645 whether the company is insolvent or not.

On November 25, 2020, Custodian filed a Certificate of Reinstatement with Nevada Secretary of State to reinstate CXEE into good standing and filed an initial list of officers/directors, state business license and appointment of registered agent.

 

On December 10, 2020, Goldjay Realty, Inc. (“GRI”) consisting of sole shareholder Levi Jacobson, our former director was issued 300,000,000 restricted common shares. The issuance was made pursuant to Rule 4(a)(2) of the Securities Act and did not involve any public solicitation or public offering. The shares were issued to GRI for reinstating CXEE into good standing with NSOS and paying delinquent transfer agent fees and developing CXEE’S business plan. 

On December 31, 2020, the Custodian conducted a shareholder meeting resulting in Custodian voted as permanent officer/director of CXEE.

 

On March 9, 2021, an Order was granted by the Court to terminate the Custodianship of CXEE.

 

 

Company Information

 

Elektros, Inc. (we, us, our, or the "Company") was incorporated on December 1, 2020 in the State of Nevada.

On December 1, 2020, Levi Jacobson was appointed President, Secretary, Treasurer and director of Elektros, Inc. On July 1, 2021, Mr. Jacobson resigned and Mr. Bleier was appointed our sole officer and director.

The Company recently began operations to design, develop and manufacture and sell fully electric sport utility vehicles and energy generation and storage systems.

The principal address of the Company is 1626 South 17th Avenue, Holywood, Florida 33020. Our phone number is 347-885-9734. The Company has elected December 31st as its year end.

We have no employees. Our CIK No. is 0001852616.

We have no in-house capabilities in the design and test engineering of electric vehicles and their components and systems. We have no in-house capabilities in the design and test engineering of energy generation and storage systems.

Intellectual Property

We have no intellectual property, patents, patent applications or trade secrets.

- 2 - 


Table of Contents

 

 

Our Offering

 

The Company is offering, on a best-efforts, self-underwritten basis, a number of shares of our common stock at a fixed priced per share between $0.05 and $2.00 with no minimum amount to be sold up to a maximum of 37,500,000 shares. The fixed price per share determined upon qualification shall be fixed for the duration of the Offering unless a post-effective amendment is filed to reset the price per share and approved by the Commission. There is no minimum investment required from any individual investor. The shares are intended to be sold directly through the efforts of our officer and director.

 

We have authorized capital stock consisting of the following. The total number of shares of capital stock which the Corporation shall have authority to issue is:seven hundred million (700,000,000). These shares shall be divided into two classes with five hundred million (500,000,000) shares designated as common stock at $.001 par value (the "Common Stock") and two hundred million (200,000,000) shares designated as preferred stock at $.001 par value (the "Preferred Stock").The Preferred Stock of the Corporation shall be issuable by authority of the Board of Director(s) of the Corporation in one or more classes or one or more series within any class and such classes or series shall have such voting powers, full or limited, or no voting powers, and such designations, preferences, limitations or restrictions as the Board of Directors of the Corporation may determine, from time to time.

 

We have 371,820,871 shares of Common Stock and no shares of Preferred Stock issued and outstanding. We will receive all proceeds from the sale of our common stock.

 

Our Chief Executive Officer, Shlomo Bleier will be selling shares of common stock on behalf of the Company.

 

The Company is quoted in the OTC Pink market with a ticker symbol of ELEK. The offering price of the shares has been determined arbitrarily by us. The price does not bear any relationship to our assets, book value, earnings, or other established criteria for valuing a privately held company. In determining the number of shares to be offered and the offering price, we took into consideration our capital structure and the amount of money we would need to implement our business plans. Accordingly, the offering price should not be considered an indication of the actual value of our securities.

 

The offering is being conducted on a self-underwritten, best efforts basis, which means our management will attempt to sell the shares being offered hereby on behalf of the Company. There is no underwriter for this offering. However, we may engage various securities brokers to place shares of common stock in this Offering with investors on a commission basis.  As there is no minimum offering, upon the approval of any subscription to this Offering Circular, the Company shall immediately deposit said proceeds into the bank account of the Company and may dispose of the proceeds in accordance with the Use of Proceeds.

 

Completion of this offering is not subject to us raising a minimum offering amount. We do not have an arrangement to place the proceeds from this offering in an escrow, trust or similar account. Any funds raised from the offering will be immediately available to us for our immediate use. We have provided an estimate below of the gross proceeds to be received by the Company if 25%, 50%, 75%, and 100% of the common shares registered in the offering are sold at the midpoint offering price of $.975 per share assuming the maximum amount of shares are sold by the Company.

 

Proceeds to Company in Offering 

 

  

Number

of

Shares

  

Offering

Price (1)

  

Underwriting

Discounts

&

Commissions

  

Approximate Gross

Proceeds

 
                 
Per Share                
25% of Offering Sold   9,375,000   $.975   $0   $9,140,625 
50% of Offering sold   18,750,000   $.975   $0   $18,281,250 
75% of Offering Sold   28,125,000   $.975   $0   $27,421,875 
Maximum Offering sold   37,500,000   $.975   $0   $36,562,500 

 

(1)Assuming an initial public midpoint offering price of $.975 per share, as set forth on the cover page of this offering circular.

   

 

 

   
Securities being offered by the Company

Up to a Maximum of 37,500,000 shares of common stock, at a fixed price per share between $.05 and $2.00 per share per share with no minimum amount to be sold. A final fixed strike price will be determined upon qualification or in a final or supplemental offering circular supplement at the time of sale of our Common Stock. Our stock will be offered by us in a direct offering. The offering will terminate at the earlier of the date at which the maximum offering amount has been sold or the date at which the offering is earlier terminated by the Company in its sole discretion.

 

   
Offering price per share We will sell the shares at a final fixed strike price per share to be determined at time of qualification or in a final or supplemental offering circular supplement at the time of sale of our common stock between the price range of $0.05 and $2.00 per share.
   
Number of shares of common stock outstanding before the offering of common stock There are 371,820,871 common shares outstanding.
   
Number of shares of common stock outstanding after the offering of common stock ___ common shares will be issued and outstanding if we sell all of the common shares we are offering at a offering price of $____ per share.
   
Number of shares of preferred stock outstanding before the offering of common stock No preferred shares are currently issued and outstanding.
   
Number of shares of preferred stock outstanding after the offering of common stock No preferred shares will be issued and outstanding.
   
The minimum number of shares to be
sold in this offering
None.
   
Market for the common shares Our common shares trade in the OTC Marketplace in the Pink Market tier. Our ticker symbol is ELEK.
   
   

 

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Use of Proceeds We intend to use the gross proceeds to us for research and development, working capital, create a electric vehicle prototype, energy charging station, materials, inventory, production and for any other general corporate purpose.
   
Termination of the Offering The offering will terminate at the earlier of the date at which the maximum offering amount has been sold or the date at which the offering is earlier terminated by the Company in its sole discretion.
   
Terms of the Offering Our Chief Executive Officer, Shlomo Bleier will sell the shares of common stock on behalf of the company, upon qualification of this Offering Statement, on a BEST EFFORTS basis.
Subscriptions:

All subscriptions once accepted by us are irrevocable.

 

Registration Costs

We estimate our total offering registration costs to be approximately $25,000.

 

Risk Factors: See “Risk Factors” and the other information in this offering circular for a discussion of the factors you should consider before deciding to invest in shares of our common stock.

 

 

You should rely only upon the information contained in this offering circular. We have not authorized anyone to provide you with information different from that which is contained in this offering circular. We are offering to sell common stock and seeking offers to common stock only in jurisdictions where offers and sales are permitted.

 

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SUMMARY OF OUR FINANCIAL INFORMATION

 

The following table sets forth selected financial information, which should be read in conjunction with the information set forth in the “Management’s Discussion and Analysis of Financial Position and Results of Operations” section and the accompanying financial statements and related notes included elsewhere in this offering circular.

 

The tables and information below are derived from our audited financial statements as of December 31, 2020 respectively.

 

 

Elektros, Inc.

Balance Sheet

(Audited) 

 

 

   As of December 31, 2020  

ASSETS

CURRENT LIABILITIES

Cash in bank

  $10,000   
Total current assets   10,000   
TOTAL ASSETS  $10,000   
        
LIABILITIES AND STOCKHOLDERS’ DEFICIT       
CURRENT LIABILITIES:       
Accrued expenses  $1,000   
Loan to company   10,000   
Total current liabilities   11,000   
TOTAL LIABILITIES  $11,000   
        
STOCKHOLDERS' DEFICIT:       
        
Preferred stock ($.001 par value, 200,000,000 shares authorized, none issued and outstanding as of December 31, 2020)    —     
Common stock ($.001 par value, 500,000,000 shares authorized, none issued and outstanding as of December 31, 2020)   —     
        
Additional paid in capital   1,185   
        
Accumulated deficit   (2,185)  
Total Stockholders' deficit   (1,000)  
TOTAL LIABILITIES &STOCKHOLDERS’ DEFICIT  $10,000   

 

 

Elektros, Inc.

Statement of Operations

  

For the Period December 1, 2020 (Inception)

to December 31, 2020

    
Operating expenses     
      
     General and administrative expenses  $2,185 
Total operating expenses   2,185 
      
Net loss  $(2,185)
      
Basic and Diluted net loss per common share  $—   
      
Weighted average number of common shares outstanding - Basic and Diluted   —   

 

 

 

The Company is electing to not opt out of JOBS Act extended accounting transition period.  This may make its financial statements more difficult to compare to other companies.

 

Pursuant to the JOBS Act of 2012, as an emerging growth company the Company can elect to opt out of the extended transition period for any new or revised accounting standards that may be issued by the PCAOB or the SEC. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the standard for the private company. This may make comparison of the Company’s financial statements with any other public company which is not either an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible as possible different or revised standards may be used.

 

Emerging Growth Company

 

The recently enacted JOBS Act is intended to reduce the regulatory burden on emerging growth companies. The Company meets the definition of an emerging growth company and so long as it qualifies as an “emerging growth company,” it will, among other things:

 

   
· be temporarily exempted from the internal control audit requirements Section 404(b) of the Sarbanes-Oxley Act;
   
· be temporarily exempted from various existing and forthcoming executive compensation-related disclosures, for example: “say-on-pay”, “pay-for-performance”, and “CEO pay ratio”;
   
· be temporarily exempted from any rules that might  be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or supplemental auditor discussion and analysis reporting;
   
· be temporarily exempted  from having to solicit advisory say-on-pay, say-on-frequency and say-on-golden-parachute shareholder votes on executive compensation under Section 14A of the Securities Exchange Act of 1934, as amended;
   
· be permitted to comply with the SEC’s detailed executive compensation disclosure requirements on the same basis as a smaller reporting company; and,
   
· be permitted to adopt any new or revised accounting standards using the same timeframe as private companies (if the standard applies to private companies).

 

Our company will continue to be an emerging growth company until the earliest of:

 

   
· the last day of the fiscal year during which we have annual total gross revenues of $1,070,000,000 or more;
   
· the last day of the fiscal year following the fifth anniversary of the first sale of our common equity securities in an offering registered under the Securities Act;
   
· the date on which we issue more than $1 billion in non-convertible debt securities during a previous three-year period; or
   
· the date on which we become a large accelerated filer, which generally is a company with a public float of at least $700 million (Exchange Act Rule 12b-2).

 

 

MANAGEMENT’S DISCUSSION AND ANALYSIS

 

 

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included in this Offering Circular. The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statement.

 

Overview

 

We are presently a shell company with nominal assets and liabilities. We have nominal operations. We recently completed a merger with CXEE. The Company has begun operations to design, develop and manufacture and sell fully electric sport utility vehicles and energy generation and storage systems.

 

On March 1, 2021, we executed an agreement with Segula Technologies, Inc. attached as EX 1A-6 to this Offering Statement and made a payment in the amount of $25,000. The scope of work Segula has begun includes the following:

 

A. Develop battery electric vehicle (“BEV”) development road map.

B. Identify federal requirements to sell BEV in US Market.

C. Summarize key vehicle attributes needed to have viable product, battery range, speed, power levels competition in market.

D. Potential budget required to bring BEV to market.

E. Coordination with Technicon Design team on styling and design attributes.

F. Develop list of potential companies to support low volume production.

On August 4, 2021, we entered into a securities purchase agreement (the “Agreement”) and Note with GS Capital Partners, LLC pursuant to which GS Capital agreed to lend us $105,000 in a 10% Secured Convertible one year Promissory Note with a face value of $115,000 with an original issue discount of $10,000. The Note provides a conversion feature equal to 60% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion. In addition, we agreed to issue 300,000 common shares to GS Capital as additional consideration for the purchase of the Note. The Agreement includes customary representations, warranties and covenants by the Company and customary closing conditions. We have updated our offering statement to disclose the purchase by GS Capital Partners, LLC. The Securities Purchase Agreement and Note are attached as EX1A-6 to this offering statement.

On August 31, 2021, we entered into an agreement with Endrock, LLC, a web designer to develop our website, wireframing, design iterations and other web services.

On September 2, 2021, Michael Dezer was issued 5,000,000 common shares. The shares were issued pursuant to verbal agreement between the Company and Mr. Dezer to allow the Company to use his commercial space to store electric vehicles on at no cost.

We recently completed a merger with CXEE. The Company has begun operations to design, develop and manufacture and sell fully electric sport utility vehicles and energy generation and storage systems.

 

We own no real estate. Since inception December 1, 2020, we have generated no revenue and have begun operations pursuant to execution of agreement and payment made to Segula Technologies, Inc. on March 1, 2021. The Company was originally formed to complete a Reorganization with CXEE. We have general and administrative expenses of $2,185 with a net loss in the amount of ($2,185) for the calendar year ending December 31, 2020. Our expenses are primarily attributed to general and administrative expenses. In order to implement our plan of operations for the next twelve-month period, we require a minimum of $10,000,000 of funding from this offering. The number of electric sport utility vehicles and energy charging stations that we manufacture and sell will depend on how quickly we are able to raise funds through this offering. We expect the proceeds of this offering will be sufficient for us to implement our business plan and that no additional equity, other than the proceeds of this offering, will need to be raised over the next six months in order to implement our business plan.

We expect the proceeds of this offering, together with funds from third party financings, will be sufficient for us to implement our business plan and that no additional equity, other than the proceeds of this offering, will need to be raised over the next six months in order to implement our business plan.

 

Plan of Operations after completion of Reorganization

 

Our plan of operations for the next twelve (12) months is as follows:

 

We are seeking $75,000,000 in funding from this offering to complete the designs, a production prototype, design validation and testing, and for production tooling. Upon completion of these phases, we believe we will be positioned to move straight to collecting pre-orders and assembling vehicles.

 

We are in the process of refining our production plans with suppliers to start production in or around October 2022. The key milestones for this schedule are as follows:

 

April 2021-December 2021

 

 

  $75,0000,000 Regulation A offering
  Initial prototype complete

 

January 2022-June 2022

 

  Release of concept design
  Complete engineering analysis
  Finalize design and engineering feasibility
  Begin acceptance of pre-orders

 

July 2022-December 2022

 

Begin production prototype build
Complete validation and testing

Complete production tooling

Begin manufacturing

 

The anticipated budgets required to achieve the milestones are provided in the table below:

 

Uses  Amount 
Production Prototype Build  $10,000,000 
Design Validation and Testing  $10,000,000 
Production Tooling  $30,000,000 
Other Expenses / Working Capital  $10,000,000 
Salaries, General Admin, & Professional Fees  $5,000,000 
Marketing & Advertising  $10,000,000 
Total Uses  $75,000,000 

 

The amounts that we actually spend for any specific purpose may vary significantly, and will depend on a number of factors including, but not limited to, the pace of progress of our development efforts, actual needs with respect to product testing, research and development, market conditions, and changes in or revisions to our marketing strategies, as well as any legal or regulatory changes which may ensue. You will be relying on the judgment of our management regarding the application of the proceeds of any sale of our common stock.

 

The actual completion of the final design of a production prototype, design validation and testing, and production tooling, and the arranging for the outsourced manufacturing and our ability to collect pre-sale orders is unpredictable. Although we will undertake completion of these milestones with commercially reasonable diligence and we believe we will be able to accomplish these milestones if this offering is fully subscribed, unforeseen circumstances could arise or circumstances may currently exist that we do not contemplate. Such circumstances may delay completion of one or more of the milestones described above, and/or require us to raise additional amounts to sustain us until we are able to achieve profitability. If we are unable to raise all of the funds we are seeking to raise in this offering or any additional funds we may require, we may be required to scale back our development plans by reducing expenditures for production, consultants, marketing efforts, and other envisioned expenditures. This could hinder our ability to commercialize our electric cars and electric charging stations.

 

If management is unable to implement our proposed business plan or employ alternative financing strategies, it does not presently have any alternative proposals. In that event, investors should anticipate that their investment may be lost and there may be no ability to profit from this investment.

 

We cannot assure you that our vehicle will be accepted in the marketplace, that we will ever earn revenues sufficient to support our operations or that we will ever be profitable. Furthermore, since we have no committed source of financing, we cannot assure you that we will be able to raise money as and when we need it to continue our operations. If we cannot raise funds as and when we need them, we may be required to severely curtail, or even to cease our operations.

   

Results of Operations

 

We recently have begun operations and do not plan to have any revenue for at least 12 months. We have begun operations and we are at the beginning stage to design and build an SUV electric vehicle pursuant to the execution of the Segula Technologies design agreement executed on March 1, 2021.

 

Contractual Obligations and Off-Balance Sheet Arrangements

 

We have the following contractual obligations:

 

1) Securities Transfer Corp.-Transfer Agent pursuant to Registrar Agreement.

 

2) Segula Technologies design agreement executed on March 1, 2021 to build SUV battery operated vehicle.

 

3) On August 4, 2021, we entered into a securities purchase agreement (the “Agreement”) and Note with GS Capital Partners, LLC pursuant to which GS Capital agreed to lend us $105,000 in a 10% Secured Convertible one year Promissory Note with a face value of $115,000 with an original issue discount of $10,000. The Note provides a conversion feature equal to 60% of the lowest trading price of the Company’s common stock for the last 20 trading days prior to conversion. In addition, we agreed to issue 300,000 common shares to GS Capital as additional consideration for the purchase of the Note. The Agreement includes customary representations, warranties and covenants by the Company and customary closing conditions.

 

4) On August 31, 2021, we entered into an agreement with Endrock, LLC, a web designer to develop our website, wireframing, design iterations and other web services.

 

 

We do not have any off balance sheet arrangements.

 

Liquidity and Capital Resources

 

As of June 30, 2021, our current assets consisted of cash in the amount of $69.00. Our current liabilities at June 30, 2021 were $102,700.

 

As of December 31, 2021, our current assets consisted of cash in the amount of $10,000. Our current liabilities at December 31, 2021, totaled $11,000.

 

Our ability to successfully execute our business plan is contingent upon us obtaining additional financing and/or upon realizing sales revenue sufficient to fund our ongoing expenses. Until we are able to sustain our ongoing operations through sales revenue, we intend to fund operations through debt and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working capital, or other cash requirements.

 

Our registered public accounting firm have issued, in their audit report, a going concern opinion reflecting a conclusion that our operations may not be able to continue because of a lack of financial resources. 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 Company has no revenue. For the year ended December 31, 2021, the Company has a net loss of ($2,185) and an accumulated deficit of ($2,185) at December 31, 2020. These factors among others raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

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RISK FACTORS

 

Please consider the following risk factors and other information in this offering circular relating to our business before deciding to invest in our common stock.

 

This offering and any investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and all of the information contained in this offering circular before deciding whether to purchase our common stock. If any of the following risks actually occur, our business, financial condition and results of operations could be harmed. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment.

 

We consider the following to be the material risks for an investor regarding this offering. Our company should be viewed as a high-risk investment and speculative in nature. An investment in our common stock may result in a complete loss of the invested amount.

 

An investment in our common stock is highly speculative, and should only be made by persons who can afford to lose their entire investment in us. You should carefully consider the following risk factors and other information in this report before deciding to become a holder of our common stock. If any of the following risks actually occur, our business and financial results could be negatively affected to a significant extent.

 

 

Risks Relating to Our Business, Securities and Industry

 

 

Coronavirus Impact. 

 

The COVID-19 pandemic has caused, and is likely to continue to cause, severe economic, market and other disruptions worldwide. We cannot assure you that conditions in the bank lending, capital and other financial markets will not continue to deteriorate as a result of the pandemic, or that our access to capital and other sources of funding will not become constrained, which could adversely affect the availability and terms of future borrowings. In addition, the deterioration of global economic conditions as a result of the pandemic may ultimately decrease our vendor supply resulting in our inability to brand and sell our CBD products.

 

The extent of the COVID-19 pandemic’s effect on our operational and financial performance will depend on future developments, including the duration, spread and intensity of the outbreak, all of which are uncertain and difficult to predict. Due to the speed with which the situation is developing, we are not able at this time to estimate the effect of these factors on our business, but the adverse impact on our business, results of operations, financial condition and cash flows could be material.

 

Because we are a “shell company” the holders of our restricted securities will not be able to sell their securities in reliance on Rule 144 and we cannot file registration statements under Section 5 of the Securities Act using a Form S-8, until we cease being a “shell company”.

We are a “shell company” as that term is defined by the applicable federal securities laws. Specifically, because of the nature and amount of our assets and our very limited operations, pursuant to applicable federal rules, we are considered a “shell company”. Applicable provisions of Rule 144 specify that during that time that we are a “shell company” and for a period of one year thereafter, holders of our restricted securities can not sell those securities in reliance on Rule 144. This restriction may have potential adverse effects on future efforts to form additional capital through unregistered offerings. Another implication of us being a shell company is that we cannot file registration statements under Section 5 of the Securities Act using a Form S-8, a short form of registration to register securities issued to employees and consultants under an employee benefit plan. As result, one year after we cease being a shell company, assuming we are current in our reporting requirements with the Securities and Exchange Commission and have filed current “Form 10 information” with the SEC reflecting our status as an entity that is no longer a shell company for a period of not less than 12 months, holders of our restricted securities may then sell those securities in reliance on Rule 144 (provided, however, those holders satisfy all of the applicable requirements of that rule). For us to cease being a “shell company” we must have more than nominal operations and more that nominal assets or assets which do not consist solely of cash or cash equivalents. Shares purchased in this offering, which will be immediately resalable, and sales of all of our other shares if and when applicable restrictions against resale expire, could have a depressive effect on the market price, if any, of our common stock and the shares we are offering.

 

Our common stock may be deemed a “penny stock,” which would make it more difficult for our investors to sell their shares.

 

Our common stock is currently subject to the “penny stock” rules adopted under Section 15(g) of the Exchange Act. The penny stock rules generally apply to companies whose common stock is not listed on The Nasdaq Stock Market or another national securities exchange and trades at less than $4.00 per share, other than companies that have had average revenues of at least $6,000,000 for the last three years or that have tangible net worth of at least $5,000,000 ($2,000,000 if the company has been operating for three or more years). These rules require, among other things, that brokers who trade penny stock to persons other than “established customers” complete certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances. Many brokers have decided not to trade penny stocks because of the requirements of the penny stock rules and, as a result, the number of broker-dealers willing to act as market makers in these securities is limited. If we remain subject to the penny stock rules for any significant period, it could have an adverse effect on the market, if any, for our securities. If our securities are subject to the penny stock rules, investors will find it more difficult to dispose of our securities.

 

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Holding Company Reorganization.

 

The Company believes that the Reorganization, deemed effective on May 28, 2021, was not a transaction of the type described in subparagraph (a) of Rule 145 under the Securities Act of 1933 and the consummation of the Reorganization will not be deemed to involve an “offer”, “offer to sell”, “offer for sale” or “sale” within the meaning of Section 2(3) of the Securities Act of 1933. The Reorganization was consummated without the vote or consent of the Company’s stockholders. However, If the Company’s beliefs are later determined to be incorrect whereas the Company may have been required to register the transaction under Section 5 of the Securities Act, shareholders as a result may have a right of rescission under Section 12(a)(1) of the Securities Act. Those consequences may have a substantive impact on our liquidity now or at any future time. The SEC could initiate proceedings against the Company and any person that sold securities in violation of Section 5 of the 1933 Securities Act. Section 5 of the Securities Act of 1933 prohibits the sale or delivery of unregistered securities unless a registration statement is in effect as to a security. Section 5 makes it unlawful for any person, directly or indirectly to sell such security through the use of a prospectus or to use any means for the purpose of sale or for delivery of a sale

Our lack of an operating history makes evaluating our business and future prospects difficult, and may increase the risk of your investment.

 

We have no operating history and no revenue. We may never raise enough cash to execute our business plan. Therefore, you could lose your entire investment in the Company.

 

  

We may experience significant delays in the design, manufacture, launch and financing of our electric sport utility vehicles including which could harm our business and prospects.

 

Inability to timely sell enough shares in this Regulation A offering to raise money that the Company needs to carry out its business plan may delay the design, manufacture and launch of our electric sport utility vehicle.

 

We will be dependent on third party designers for the manufacture and build of our vehicles. We will also be dependent on suppliers to deliver, necessary components to our vehicles at prices and volumes acceptable to us. Their refusal would have a material adverse effect on our business, prospects and operating results. 

To date, we have only qualified one manufacturing source to design a prototype of our electric sports utility vehicle and energy charging station. 

Our auditor has issued a “going concern” opinion.

 

Our auditor has issued a “going concern” opinion on our financial statements, which means that the auditor is not sure if we will be able to succeed as a business without additional financing.

 

To date, we do not operate and have not generated revenues from our anticipated principal operations and have sustained losses since inception. Because losses will continue until such time that we can complete the design of our initial vehicle, establish relationships with manufacturing facilities to manufacture our vehicles and components, and begin selling our vehicles, and because we have no committed source of financing, we rely on financing to support our operations. These factors, among others, raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued.

 

Throughout 2021, we intend to fund our operations through the sale of our securities to third parties and related parties. If we cannot raise additional capital, we may consume all the cash reserved for operations. There are no assurances that management will be able to raise capital on terms acceptable to us. If we are unable to obtain sufficient amounts of additional capital, we may be required to reduce the scope of our planned operations, which could harm our business, financial condition and operating results. The financial statements do not include any adjustments that might result from these uncertainties.

 

If we cannot raise sufficient funds, we will not succeed or will require significant additional capital infusions.

 

We are offering Common Stock in the amount of up to $75,000,000 in this offering, but may sell much less. Even if the maximum amount is raised, we may need additional funds in the future in order to grow, and if we cannot raise those funds for whatever reason, including reasons outside our control, such as another significant downturn in the economy, we may not survive. If we do not sell all of the Common Stock we are offering, we will have to find other sources of funding in order to develop our business.

 

Even if we are successful in selling all of the Common Stock being offered, our proposed business may require significant additional capital infusions, before we can achieve profitability. Furthermore, in order to expand, we are likely to raise funds again in the future, either by offerings of securities or through borrowing from banks or other sources. The terms of future capital infusions may include covenants that give creditors rights over our financial resources or sales of equity securities that will dilute the holders of our Common Stock.

 

This Offering is being conducted on a “best efforts” basis and does not require a minimum amount to be raised. As a result, we may not be able to raise enough funds to fully implement our business plan and our investors may lose their entire investment.

 

The Offering is on a “best efforts” basis and does not require a minimum amount to be raised. If we are not able to raise sufficient funds, we may not be able to fund our operations as planned, and our growth opportunities may be materially adversely affected. This could increase the likelihood that an investor may lose their entire investment.

 

We have no operating history. We have no revenue and no cash which makes it difficult to accurately evaluate our business prospects.

 

We have limited assets, no operating history, and no operating revenue to date. We have begun working on our prototype but it will be some time before we are in a position to begin producing or delivering our first vehicle. We have no experience designing, testing, manufacturing, upgrading, adapting and selling electric vehicles as well as no experience allocating our available resources among the design and production of our anticipated sport utility vehicle. Thus, our proposed business is subject to all the risks inherent in new business ventures. The likelihood of success must be considered in light of the expenses, complications, and delays frequently encountered with the start-up of new businesses and the competitive environment in which start-up companies operate.

 

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Terms of subsequent financings may adversely impact your investment.

 

We may need to engage in common equity, debt, or preferred stock financing in the future. Interest on debt securities could increase costs and negatively impact operating results. Preferred stock could be issued in series from time to time with such designations, rights, preferences, and limitations as needed to raise capital. The terms of preferred stock could be more advantageous to those investors than to the holders of Common Stock. In addition, if we need to raise more equity capital from the sale of Common Stock, institutional or other investors may negotiate terms at least as, and possibly more, favorable than the terms of your investment. Shares of Common Stock which we sell could be sold into any market which develops, which could adversely affect the market price.

 

 

Risks of borrowing.

 

We may have to seek loans from financial institutions. Typical loan agreements might contain restrictive covenants which may impair our operating flexibility. A default under any loan agreement could result in a charging order that would have a material adverse effect on our business, results of operations or financial condition.

 

Developing new products and technologies entails significant risks and uncertainties.

 

We are currently operating. However, we are in the research and development stage and it may take much longer than we think to build a prototype electric vehicle and energy charging station. Delays or cost overruns in the development of our electric vehicle and failure of the product to meet our performance estimates may be caused by, among other things, unanticipated technological hurdles, difficulties in contract manufacturing, changes to design and regulatory hurdles. Any of these events could materially and adversely affect our operating performance and results of operations.

 

We may experience significant delays or other complications in the design, manufacture and launch of our electric vehicle and future vehicle models, which could harm our brand, business, prospects, financial condition and operating results.

 

We may experience significant delays or other complications in bringing to market new vehicles. Any significant delays or other complications in the development, manufacture and/or launch of our electric vehicle or future vehicles, including, but not limited to, complications associated with launching our production or supply chain, or regulatory approvals, could materially damage our brand, business, prospects, financial condition and operating results.

 

We face significant barriers in our attempt to produce our vehicle and energy charging stations, and if we cannot successfully overcome those barriers, our business will be negatively impacted.

 

We face significant barriers as we attempt to produce our first vehicle. We do not yet have any prototypes and do not have a final design, a manufacturing facility or manufacturing processes. We will need to contract with manufacturers with excess capacity to manufacturer our vehicles and certain components. In addition, the motor vehicle industry has traditionally been characterized by significant barriers to entry, including large capital requirements, investment costs of designing and manufacturing vehicles, long lead times to bring vehicles to market from the concept and design stage, the need for specialized design and development expertise, regulatory requirements, establishing a brand name and image, and the need to establish sales and service locations. We must successfully overcome these and other manufacturing and legal barriers to be successful.

 

Our long-term success will be dependent upon our ability to achieve market acceptance of our vehicles, and any subsequent new vehicle models

 

There is no guarantee that our vehicle or electric charging stations or any of our future vehicles will be successfully accepted by the general public. There is no guarantee that demand for our electric vehicle will meet our expectations.

 

 

Developments and improvements in alternative technologies such as hybrid engines or in the internal combustion engine, or continued low retail gasoline prices may materially and adversely affect the demand for our vehicles.

 

Significant developments in alternative technologies, such as advanced diesel, ethanol, fuel cells or compressed natural gas, or improvements in the fuel economy of the internal combustion engine, may materially and adversely affect our business and prospects in ways that we do not currently anticipate. If alternative energy engines or low gasoline prices make existing vehicles with greater passenger and cargo capacities less expensive to operate, we may not be able to compete with manufacturers of such vehicles.

 

Demand in the vehicle industry is highly volatile.

 

Volatility of demand in the vehicle industry may materially and adversely affect our business prospects, operating results and financial condition. The markets in which we will be competing have been subject to considerable volatility in demand in recent periods. Demand for motor vehicle sales depends to a large extent on general, economic, political and social conditions in a given market and the introduction of new vehicles and technologies. As a new start-up motor vehicle company, we will have fewer financial resources than more established motor vehicle companies to withstand changes in the market and disruptions in demand.

 

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We depend on our sole director who has no experience in the electric vehicle business or energy charging stations.

 

Our future success depends on our sole director, Mr. Shlomo Bleier.. Mr. Bleier has no experience in the electric vehicle business or energy charging stations. His inexperience or the loss of his services may have a serious adverse effect on us and you could lose your entire investment. There can be no assurance that we will be successful in attracting and retaining other personnel or consultants we require to develop and market our electric vehicle and energy charging stations and future vehicles, and conduct our proposed operations. In addition, Mr. Bleier does not work exclusively for us, and will divide his time with his other business activities that consume 40 hours per week. If circumstances arise in which Mr. Bleier is required to spend substantially more time attending to matters related to the operation of Jewish Enrichment Entereprise, Inc., it could adversely effect our business.

 

 

The unavailability, reduction or elimination of government and economic incentives in the U.S. and abroad, supporting the development and adoption of electric vehicles could have some impact on demand for our vehicles.

 

Electric vehicles such as ours, benefit from certain government and economic incentives supporting the development and adoption of electric vehicles. In the United States and abroad, such incentives include, among other things, tax credits or rebates that encourage the purchase of electric vehicles. Notably, the quantum of incentive programs promoting electric vehicles is a tiny fraction of the amount of incentives that are provided to gas-powered vehicles through the oil and gas industries.  Nevertheless, even the limited benefits from such programs could be reduced, eliminated or exhausted.  Although we believe this will have little to no impact on demand for our vehicles as we are a niche player, there may be a negative impact on demand for our future vehicles by certain purchasers.

 

 

We are subject to substantial regulation, which is evolving, and unfavorable changes or failure by us to comply with these regulations could substantially harm our business and operating results.

 

Motor vehicles are subject to substantial regulation under international, federal, state, local and foreign laws. Our vehicles will need to comply with many governmental standards and regulations relating to vehicle safety, fuel economy, emissions control, noise control, and vehicle recycling, among others. In addition, we will need to comply with state laws that regulate the manufacture, distribution, and sale of motor vehicles, and generally require motor vehicle manufacturers and dealers to be licensed to sell vehicles directly to consumers in the state. Compliance with all of these requirements may delay our production launch, thereby adversely affecting our business and financial condition. Also, we are subject to laws and regulations applicable to the import, sale and service of motor vehicles internationally. For example, we will be required to meet vehicle-specific safety standards that are often materially different from U.S. requirements, thus resulting in additional investment into the vehicles and systems to ensure regulatory compliance. These processes necessitate that foreign regulatory officials review and certify our vehicles prior to market entry. In addition, we must comply with regulations applicable to vehicles after they enter the market, including foreign reporting requirements and recall management systems. We will incur significant costs in complying with these regulations, and may be required to incur additional costs to comply with any changes to such regulations.

 

We may need to defend ourselves against patent or trademark infringement claims, which may be time-consuming and would cause us to incur substantial costs.

 

Companies, organizations or individuals, including our competitors, may hold or obtain patents, trademarks or other proprietary rights that would prevent, limit or interfere with our ability to make, use, develop, sell or market our vehicles or components, which could make it more difficult for us to operate our business. From time to time, we may receive communications from holders of patents or trademarks regarding their proprietary rights. Companies holding patents or other intellectual property rights may bring suits alleging infringement of such rights or otherwise assert their rights and urge us to take licenses. In addition, if we are determined to have infringed upon a third party's intellectual property rights, we may be required to do one or more of the following:

 

  cease selling, incorporating certain components into, or offering goods or services that incorporate or use the challenged intellectual property;
  pay substantial damages;
  seek a license from the holder of the infringed intellectual property right, which license may not be available on reasonable terms or at all;
  redesign our vehicles or certain components; or
  establish and maintain alternative branding for our products and services.

 

We may also need to file lawsuits to protect our intellectual property rights from infringement from third parties, which lawsuits could be expensive, time consuming and distract management’s attention from our core operations.

 

Manufacturing internationally may cause problems and present risks.

 

We will likely have our vehicles and certain components manufactured internationally. There are many risks associated with international business.  These risks include, but are not limited to, language barriers, fluctuations in currency exchange rates, political and economic instability, regulatory compliance difficulties, problems enforcing agreements, and greater exposure of our intellectual property to markets where a high probability of unlawful appropriation may occur.  Failure to successfully mitigate any of these potential risks could damage our business.

 

In addition, we are required to comply with all applicable domestic and foreign export control laws, including the International Traffic in Arms Regulations and the Export Administration Regulations. In addition, we may be subject to the Foreign Corrupt Practices Act and international counterparts that generally bar bribes or unreasonable gifts for foreign governments and officials. Violation of any of these laws or regulations could result in significant sanctions, which could reduce our future revenue and net income.

 

Because we may manufacture and sell a substantial portion of our vehicles abroad, our operating costs may be subject to fluctuations in foreign currency exchange rates. If the U.S. dollar weakens against the foreign currencies in which we denominate certain of our trade accounts payable, fixed purchase obligations and other expenses, the U.S. dollar equivalent of such expenses would increase. We can provide no assurances that we will not experience losses arising from currency fluctuations in the future, which could be significant.

 

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If we are unable to adequately control the costs associated with operating our business, including our costs of manufacturing and sales, our business, financial condition, operating results and prospects will suffer.

 

If we are unable to maintain a sufficiently low level of costs for designing, manufacturing, marketing, selling and distributing and servicing our vehicles relative to their selling prices, our operating results, gross margins, business and prospects could be materially and adversely impacted. We have made, and will be required to continue to make, significant investments for the design, manufacture, sale and the servicing of our vehicles. There can be no assurances that our costs of producing and delivering our vehicles will be less than the revenue we generate from sales at the time of the launch of such vehicle or that we will ever achieve a positive gross margin on sales of any specific vehicle.

 

We will incur significant costs related to contracting for the manufacture of our vehicles, procuring the materials required to manufacture our vehicles, assembling vehicles and compensating our personnel and consultants. Many of the factors that impact our operating costs are beyond our control. For example, the costs of our raw materials and components could increase due to shortages if global demand for these materials and components increases. In addition, we may experience increases in the cost or a sustained interruption in the supply or shortage of materials. Any such cost increase or supply interruption could materially negatively impact our business, prospects, financial condition and operating results. If we are unable to keep our operating costs aligned with the level of revenues we generate, our operating results, business and prospects will be harmed.

 

If our vehicles fail to perform as expected, we may have to recall our products and our ability to develop, market and sell our electric vehicles could be harmed.

 

Our vehicles may contain defects in design and manufacture that may cause them not to perform as expected or that may require repair. While we intend to perform extensive internal testing, we will have a limited frame of reference by which to evaluate the performance of our electric vehicles. There can be no assurances that we will not be required to recall products in the future. There can be no assurance that we will be able to detect and fix any defects in the vehicles prior to their sale to consumers. In the future, we may at various times, voluntarily or involuntarily, initiate a recall if any of our vehicles or their components prove to be defective. In addition, our electric vehicles may not perform consistent with customers’ expectations or consistent with other vehicles currently available. Any product defects or any other failure of our vehicles to perform as expected could harm our reputation and result in adverse publicity, lost revenue, delivery delays, product recalls, product liability claims, harm to our brand and reputation, and significant warranty and other expenses, and could have a material adverse impact on our business, financial condition, operating results and prospects.

 

If we are unable to address the service requirements of our future customers our business will be materially and adversely affected.

 

If we are unable to successfully address the service requirements of our future customers our business and prospects will be materially and adversely affected. In addition, we anticipate the level and quality of the service we provide our customers will have a direct impact on the success of our future vehicles. If we are unable to satisfactorily service our customers, our ability to generate customer loyalty, grow our business and sell additional vehicles could be impaired.

 

 

We will be dependent on our suppliers, some of which may be single or limited source suppliers, and the inability of these suppliers to continue to deliver, or their refusal to deliver, necessary components of our vehicles at prices and volumes acceptable to us could have a material adverse effect on our business, prospects and operating results.

 

We will be dependent on our suppliers, some of which may be single or limited source suppliers, and the inability of these suppliers to continue to deliver, or their refusal to deliver, necessary components of our vehicles at prices and volumes acceptable to us could have a material adverse effect on our business, prospects and operating results. In addition, we have not yet established relationships with suppliers for all of our components.

 

While we believe that we will be able to establish necessary supply relationships as well as alternate supply relationships, we may be unable to do so at prices or costs that are favorable to us. The inability to secure necessary suppliers or the future loss of any suppliers or any disruption in the supply of components from these suppliers could lead to delays in vehicle deliveries to our customers, which could hurt our relationships with our customers and also materially adversely affect our business, prospects and operating results.

 

We may become subject to product liability claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims.

 

The risk of product liability claims, product recalls, and associated adverse publicity is inherent in the manufacturing, marketing, and sale of vehicles. We may become subject to product liability claims, which could harm our business, prospects, operating results and financial condition. The motor vehicle industry experiences significant product liability claims and we face inherent risk of exposure to claims in the event our vehicles do not perform as expected or malfunction resulting in personal injury or death. A successful product liability claim against us could require us to pay a substantial monetary award. In addition, a product liability claim could generate substantial negative publicity about our vehicles and business and inhibit or prevent commercialization of other future vehicle candidates which would have material adverse effect on our brand, business, prospects and operating results. Any lawsuit, regardless of its merit, may have a material adverse effect on our reputation, business and financial condition.

 

Management Discretion as to Use of Proceeds.

 

Our success will be substantially dependent upon the discretion and judgment of our management team with respect to the application and allocation of the proceeds of this Offering. The use of proceeds described below is an estimate based on our current business plan. We, however, may find it necessary or advisable to re-allocate portions of the net proceeds reserved for one category to another, and we will have broad discretion in doing so.

 

Limited Liquidity.

 

There is no formal marketplace for the resale of our securities. Shares common stock may be traded to the extent any demand and/or trading platform(s) exists. However, there is no guarantee there will be demand for the shares, or a trading platform that allows you to sell them. We do not have plans to apply for or otherwise seek trading or quotation of our common stock on an over-the-counter market. It is also hard to predict if we will ever be acquired by a bigger company. Investors should assume that they may not be able to liquidate their investment for some time.

 

 

 

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COMPETITION

 

This offering circular includes market and industry data that we have developed from publicly available information; various industry publications and other published industry sources and our internal data and estimates. Although we believe the publications and reports are reliable, we have not independently verified the data. Our internal data, estimates and forecasts are based upon information obtained from trade and business organizations and other contacts in the market in which we operate and our management’s understanding of industry conditions.

 

As of the date of the preparation of this offering circular, these and other independent government and trade publications cited herein are publicly available on the Internet without charge. Upon request, the Company will also provide copies of such sources cited herein.

 

Competition

Competition in the automotive industry is intense and evolving. We believe the impact of new regulatory requirements for occupant safety and vehicle emissions, technological advances in powertrain and consumer electronics components, and shifting customer needs and expectations are causing the industry to evolve in the direction of electric-based vehicles. We believe the primary competitive factors in our markets include but are not limited to:

 

    technological innovation;

 

    product quality and safety;

 

    service options;

 

    product performance;

 

    design and styling;

 

    product price; and

 

    manufacturing efficiency.

We believe that our vehicles can compete in the market for electric sports utility vehicles. Within the electric-based vehicle segment, there are three primary means of powertrain electrification which will differentiate various competitors in this market:

 

    Electric Vehicles are vehicles powered completely by a single on-board energy storage system (battery pack or fuel cell) which is refueled directly from an electricity source.

 

    Plug-in Hybrid Vehicles are vehicles powered by both a battery pack with an electric motor and an internal combustion engine which can be refueled both with traditional petroleum fuels for the engine and electricity for the battery pack. The internal combustion engine can either work in parallel with the electric motor to power the wheels, such as in a parallel plug-in hybrid vehicle, or be used only to recharge the battery, such as in a series plug-in hybrid vehicle like the Chevrolet Volt.

 

    Hybrid Electric Vehicles are vehicles powered by both a battery pack with an electric motor and an internal combustion engine but which can only be refueled with traditional petroleum fuels as the battery pack is charged via regenerative braking, such as used in a hybrid electric vehicle like the Toyota Prius.

 

The worldwide automotive market, particularly for alternative fuel vehicles, is highly competitive today and we expect it will become even more so in the future. Prior to the introduction of the Nissan Leaf in December 2010, no mass produced performance highway-capable electric vehicles were being sold in the United States. In Japan, Mitsubishi has been selling its electric iMiEV since April 2010. We expect additional competitors to enter the United States and Europe within the next several years, and as they do so, we expect that we will experience significant competition. With respect to our Tesla Roadster, we currently face strong competition from established automobile manufacturers, including manufacturers of high-performance vehicles, such as Porsche and Ferrari. In addition, upon the launch of our Model S sedan, we will face competition from existing and future automobile manufacturers in the extremely competitive premium sedan market, including Audi, BMW, Lexus and Mercedes.

 

Most of our current and potential competitors have significantly greater financial, technical, manufacturing, marketing and other resources than we do and may be able to devote greater resources to the design, development, manufacturing, distribution, promotion, sale and support of their products. Virtually all of our competitors have more extensive customer bases and broader customer and industry relationships than we do. In addition, almost all of these companies have longer operating histories and greater name recognition than we do. Our competitors may be in a stronger position to respond quickly to new technologies and may be able to design, develop, market and sell their products more effectively. We believe our exclusive focus on sport utility electric vehicles and energy charging stations will allow us to compete in the global automotive market in spite of the challenges posed by our competition; however, we have no history of operations.

 

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FORWARD LOOKING STATEMENTS

 

This offering circular contains forward-looking statements that involve risk and uncertainties. We use words such as “anticipate”, “believe”, “plan”, “expect”, “future”, “intend”, and similar expressions to identify such forward-looking statements. Investors should be aware that all forward-looking statements contained within this filing are good faith estimates of management as of the date of this filing. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us as described in the “Risk Factors” section and elsewhere in this offering circular.

 

DESCRIPTION OF BUSINESS

 

The Company plans to begin operations to design, develop and manufacture and sell fully electric sport utility vehicles and energy generation and storage systems.

 

 

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Employees

 

We have no employees. Shlomo Bleier is our President, Secretary and Treasurer. Mr. Bleier works full time for another company known as Coromandel relating to the mining of diamonds.

 

Currently, Mr.Bleier has the flexibility to work on our business up to a maximum of 20 hours per week, but is prepared to devote more time if necessary.

 

We do not presently have pension, health, annuity, insurance, stock options, profit sharing, or similar benefit plans; however, we may adopt plans in the future. There are presently no personal benefits available to our officer and director.

 

 

USE OF PROCEEDS

 

Our offering is being made on a self-underwritten and direct public offering basis: no minimum number of shares must be sold in order for the offering to proceed. The following table sets forth the uses of proceeds based on the midpoint offering price of $.975 per share assuming the sale of 100%, 75%, 50%, and 25% of the maximum amount of common shares are sold by the Company up to a maximum of $75,000,000. There is no assurance that we will raise the full $75,000,000 maximum as anticipated.

 

If 37,500,000 shares (100%) are sold: 

Next 12 months

Planned Actions Estimated Cost to Complete
Production Prototype Build $10,000,000
Design Validation and Testing $10,000,000
Production Tooling $30,000,000
Other Expenses/Working Capital $10,000,000
Salaries, General Administrative & Professional Fees $5,000,000
Marketing & Advertising $10,000,000
TOTAL $75,000,000

 

 

If 28,125,000 shares (75%) are sold: 

Next 12 months

Planned Actions Estimated Cost to Complete
Production Prototype Build $3,500,000
Design Validation and Testing $7,500,000
Production Tooling $5,671,875
Other Expenses/Working Capital $3,500,000
Salaries, General Administrative & Professional Fees $3,750,000
Marketing & Advertising $3,500,000
TOTAL $27,421,875

 

If 18,750,000 shares (50%) are sold: 

Next 12 months

Planned Actions Estimated Cost to Complete
Production Prototype Build $2,000,000
Design Validation and Testing $2,000,000
Production Tooling $8,281,250
Other Expenses/Working Capital $2,000,000
Salaries, General Administrative & Professional Fees $2,000,000
Marketing & Advertising $2,000,000
TOTAL $18,281,250

 

If 9,375,000 shares (25%) are sold: 

Next 12 months

Planned Actions Estimated Cost to Complete
Production Prototype Build $1,520,000
Design Validation and Testing $1,520,000
Production Tooling $1,540,625
Other Expenses/Working Capital $1,520,000
Salaries, General Administrative & Professional Fees $1,520,000
Marketing & Advertising $1,520,000
TOTAL $9,140,625

 

 

The above figures represent only estimated costs for the next 12 months.

 

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DETERMINATION OF OFFERING PRICE

 

The Company is quoted at this time in the OTC MarketPlace under the ticker symbol ELEK, and there is a limited established market for our stock. The offering price of the shares has been determined arbitrarily by us. The price does not bear any relationship to our assets, book value, earnings, or other established criteria for valuing a privately held company. In determining the number of shares to be offered and the offering price, we took into consideration our capital structure and the amount of money we would need to implement our business plans. Accordingly, the offering price should not be considered an indication of the actual value of our securities.

 

There is no assurance that our common stock will trade at market prices in excess of our offering price as prices for the common stock in any public market which may or may not develop further will be determined in the marketplace and may be influenced by many factors, including the depth and liquidity of the market for the common stock, investor perception of us and general economic and market conditions. 

 

DILUTION

Purchasers of our common stock in this Offering will experience an immediate dilution of net tangible book value per share from the public offering price. Dilution in net tangible book value per share represents the difference between the amount per share paid by the purchasers of shares of common stock and the net tangible book value per share immediately after this Offering. However, below we have provided an estimate based on a midpoint offering price of $.975 per share as of September 21, 2021 assuming the maximum number of shares are sold in the amount of $75,000,000.

The following table illustrates the dilution to the purchasers of the common stock sold in this offering based on the midpoint offering price of $.975 per share if 100%, 50% and 25% of the maximum number of shares offered are sold, not to exceed $75,000,000 in gross proceeds.

The values in the table immediately following are rounded to the nearest thousandths place.

 

      (25% of the shares are sold in the offering)     (50% of the shares are sold in the offering)       (100% of shares are sold in the offering)
Offering Price Per Share   $ .975   $ .975   $  .975
Book Value Per Share Before the Offering   $ .001   $ .001   $  .001
Book Value Per Share After the Offering   $ .001   $ .0010   $  .1691
Net Increase to Original Shareholder   $ 0   $ 0   $  .1681
Decrease in Investment to New Shareholders   $ .975   $ .975   $  .8059
Dilution to New Shareholders (%)     100%      100%     82.66%

 

Net Value Calculation

 

If 100% of the shares in the offering are sold

 

Numerator:        
Net tangible book value before the offering   $ $365,521  
Net proceeds from this offering     36,562,500  
    $ 36,928,021  
Denominator:        
Shares of common stock outstanding prior to this offering     371,820,871  
Shares of common stock to be sold in this offering offered by the Company (100%)     37,500,000  
      409,320,871  

 

Net Value Calculation

 

If 50% of the shares in the offering are sold

 

Numerator:        
Net tangible book value before the offering   $ 365,521  
Net proceeds from this offering     18,281,250  
    $ 18,646,771  
Denominator:        
Shares of common stock outstanding prior to this offering     371,820,871  
Shares of common stock to be sold in this offering offered by the Company (50%)     18,750,000  
      390,570,871  

 

Net Value Calculation

 

If 25% of the shares in the offering are sold

 

Numerator:        
Net tangible book value before the offering   $ 365,521  
Net proceeds from this offering     9,140,625  
    $ 9,506,146  
Denominator:        
Shares of common stock outstanding prior to this offering     371,820,871  
Shares of common stock to be sold in this offering (25%)     9,375,000  
      381,195,871  

 

 

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PLAN OF DISTRIBUTION

 

Our common stock offered through this offering is being made by Shlomo Bleier, our sole officer and director and through a direct public offering. Our Common Stock may be sold or distributed from time to time by Mr. Bleier or directly to one or more purchasers utilizing general solicitation through the internet, social media, and any other means of widespread communication notwithstanding the Company may also use crowdfunding sites, brokers, dealers, or underwriters who may act solely as agents at a price of $____ per share. The sale of our common stock offered by us through this offering may be effected by one or more of the following methods: internet, social media, and any other means of widespread communication including but not limited to crowdfunding sites, ordinary brokers’ transactions;· transactions involving cross or block trades; through brokers, dealers, or underwriters who may act solely as agents; in other ways not involving market makers or established business markets, including direct sales to purchasers or sales effected through agents;· in privately negotiated transactions; or· any combination of the foregoing. We may also sell shares of Common Stock under Rule 144 promulgated under the Securities Act, if available, rather than under this offering statement. In addition, we may transfer the shares of our common stock by other means not described in this offering statement. Brokers, dealers, underwriters, or agents participating in the distribution of the shares as agents may receive compensation in the form of commissions, discounts, or concessions from the Company and/or purchasers of the common stock for whom the broker-dealers may act as agent.

The Company has 371,820,871 shares of common stock issued and outstanding as of the date of this offering circular. The Company is registering an additional amount of shares of its common stock for sale not to exceed $75,000,000 at the price of $_____ per share.

 

There is no arrangement to address the possible effect of the offering on the price of the stock.

 

In connection with the Company’s selling efforts in the offering, Shlomo Bleier will not register as a broker-dealer pursuant to Section 15 of the Exchange Act, but rather will rely upon the “safe harbor” provisions of SEC Rule 3a4-1, promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

Generally speaking, Rule 3a4-1 provides an exemption from the broker-dealer registration requirements of the Exchange Act for persons associated with an issuer that participate in an offering of the issuer’s securities. Shlomo Bleier is not subject to any statutory disqualification, as that term is defined in Section 3(a)(39) of the Exchange Act. Shlomo Bleier will not be compensated in connection with his participation in the offering by the payment of commissions or other remuneration based either directly or indirectly on transactions in our securities. Mr. Bleier is not, nor has he been within the past 12 months, a broker or dealer, and he is not, nor has he been within the past 12 months, an associated person of a broker or dealer. At the end of the offering, Mr. Bleier will continue to primarily perform substantial duties for the Company or on its behalf otherwise than in connection with transactions in securities. Mr. Bleier will not participate in selling an offering of securities for any issuer more than once every 12 months other than in reliance on Exchange Act Rule 3a4-1(a)(4)(i) or (iii).

 

The Company will receive all proceeds from the sale of the ______shares being offered on behalf of the Company. The price per share will be $_____ for the duration of this offering.

 

In addition and without limiting the foregoing, the Company will be subject to applicable provisions, rules and regulations under the Exchange Act with regard to security transactions during the period of time when this Offering Statement is effective.

 

Procedures for Subscribing

If you decide to subscribe for any shares in this offering, you must

 

- Execute and deliver a subscription agreement; and

- Deliver a check or certified funds to us for acceptance or rejection.

 

All checks for subscriptions must be made payable to “Elektros, Inc.”. The Company will deliver stock certificates attributable to shares of common stock purchased directly to the purchasers within ninety (90) days of the close of the offering.

 

Right to Reject Subscriptions

We have the right to accept or reject subscriptions in whole or in part, for any reason or for no reason. All monies from rejected subscriptions will be returned immediately by us to the subscriber, without interest or deductions. Subscriptions for securities will be accepted or rejected with letter by mail within 48 hours after we receive them.

 

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DESCRIPTION OF SECURITIES

 

We have authorized capital stock consisting of the following. The total number of shares of capital stock which the Corporation shall have authority to issue is: seven hundred million (700,000,000). These shares shall be divided into two classes with five hundred million (500,000,000) shares designated as common stock at $.001 par value (the "Common Stock") and two hundred million (200,000,000) shares designated as preferred stock at $.001 par value (the "Preferred Stock").The Preferred Stock of the Corporation shall be issuable by authority of the Board of Director(s) of the Corporation in one or more classes or one or more series within any class and such classes or series shall have such voting powers, full or limited, or no voting powers, and such designations, preferences, limitations or restrictions as the Board of Directors of the Corporation may determine, from time to time.

 

Common Stock

 

The holders of outstanding shares of Common Stock are entitled to receive dividends out of assets or funds legally available for the payment of dividends of such times and in such amounts as the board from time to time may determine. Holders of Common Stock are entitled to one vote for each share held on all matters submitted to a vote of shareholders. We have cumulative voting for the election of directors then standing for election. The Common Stock is not entitled to pre-emptive rights and is not subject to conversion or redemption. Upon liquidation, dissolution or winding up of our company, the assets legally available for distribution to stockholders are distributable ratably among the holders of the Common Stock after payment of liquidation preferences, if any, on any outstanding payment of other claims of creditors. We have no shares of common stock issued and outstanding.

 

Preferred Stock

 

We have no shares of preferred stock issued and outstanding.

 

Options and Warrants

 

None.

 

Convertible Notes 

 

None.

 

Dividend Policy

 

We have not paid any cash dividends to shareholders. The declaration of any future cash dividends is at the discretion of our board of directors and depends upon our earnings, if any, our capital requirements and financial position, general economic conditions, and other pertinent conditions.  It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.

 

Transfer Agent

 

Securities Transfer Corporation is our transfer agent. Their address is 2901 N. Dallas Parkway, Suite 380, Plano, Texas.

 

Penny Stock Regulation

 

We trade in the OTC MarketPlace under the ticker symbol ELEK and are subject to penny stock regulation. The SEC has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) of less than $5.00 per share or an exercise price of less than $5.00 per share. Such securities are subject to rules that impose additional sales practice requirements on broker-dealers who sell them. For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchaser of such securities and have received the purchaser’s written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the transaction, of a disclosure schedule prepared by the SEC relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Finally, among other requirements, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. As the Shares immediately following this Offering will likely be subject to such penny stock rules, purchasers in this Offering will in all likelihood find it more difficult to sell their Shares in the secondary market.

 

INTERESTS OF NAMED EXPERTS AND COUNSEL

 

The validity of the shares of common stock offered hereby will be passed upon for us by Carl Ranno, attorney at law.

 

The financial statements included in this offering circular and the offering statement have been audited by BF Borgers CPA PC, certified public accountants, to the extent and for the periods set forth in their report appearing elsewhere herein and in the offering statement, and are included in reliance upon such report given upon the authority of said firm as experts in auditing and accounting.

 

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REPORTS TO SECURITIES HOLDERS

 

We will and will continue to make our financial information equally available to any interested parties or investors through compliance with the disclosure rules of Regulation S-K for a smaller reporting company under the Securities Exchange Act. In addition, we will file Form 8-K and other proxy and information statements from time to time as required. The public may read and copy any materials that we file with the SEC at the SEC's Public Reference Room at 100 F Street NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

 

DESCRIPTION OF FACILITIES

 

At this time our office space is provided to us rent free by our director. Our office space is located at 1626 South 17th Avenue, Holywood, Florida 33020.

 

LEGAL PROCEEDINGS

 

The Company is not involved in any litigation, and its management is not aware of any pending or threatened legal actions.

 

PATENTS AND TRADEMARKS

 

We do not own, either legally or beneficially, any patents, trademarks or any intellectual property.

 

EMPLOYEES

 

As of the date of this Offering Circular, we have no employees.

 

 

DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

Biographical information regarding the officers and Directors of the Company, who will continue to serve as officers and Directors of the Company are provided below:

 

NAME   AGE     POSITION
Shlomo Bleier     73       Chief Executive Officer, Chief Operations Officer, Chief Financial Officer, Chief Accounting Officer, President, Secretary, Treasurer and Director

 

Shlomo Bleier- Chief Executive Officer, Chief operations Officer, Chief Financial Officer, Chief Accounting Officer, President, Secretary and sole Director.

 

Mr. Shlomo Bleier has been involved in the diamond industry for over 35 years and has been involved in mining operations in Brazil and Sierra Leone for the past ten years. In 1980 he joined the Diamond Dealers Club of New York city. In 1993, Mr. Bleier moved to New York City from Israel where he devoted all his time to the diamond industry and worked throughout the years as a diamond cutter and polisher specializing in large stones and colored diamonds, managing the process from rough to finished product. From 1993 to 1999, he worked for Simcha Diamond Ltd. in Brazil where he successfully mined gold and diamonds. From 2000-2004, he was a partner in S & T Mining Group, Ltd in Sierra Leon, Africa. He served as chief administrator of operations. From 2005-2015, Mr. Bleier has been acive in managing various projects in Sierra Leon Africa mining for diamonds and gold. For the past 5 years since August 2016, Mr. Bleier has been working full time from home in Brooklyn, NY and traveling every 3-4 months as a partner with and as a manager and director of operations with Coromandel, a Brazilian corporation utilizing his expertise and knowledge in the mining of diamonds and gold.

 

 

Corporate Governance

 

The Company promotes accountability for adherence to honest and ethical conduct; endeavors to provide full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with the Securities and Exchange Commission (the “SEC”) and in other public communications made by the Company; and strives to be compliant with applicable governmental laws, rules and regulations. The Company has not formally adopted a written code of business conduct and ethics that governs the Company’s employees, officers and Directors as the Company is not required to do so.

 

In lieu of an Audit Committee, the Company’s Board of Directors, is responsible for reviewing and making recommendations concerning the selection of outside auditors, reviewing the scope, results and effectiveness of the annual audit of the Company's financial statements and other services provided by the Company’s independent public accountants. The Board of Directors, the Chief Executive Officer and the Chief Financial Officer of the Company review the Company's internal accounting controls, practices and policies.

 

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Committees of the Board

 

Our Company currently does not have nominating, compensation, or audit committees or committees performing similar functions nor does our Company have a written nominating, compensation or audit committee charter. Our sole Director believes that it is not necessary to have such committees, at this time, because the Director(s) can adequately perform the functions of such committees.

 

Audit Committee Financial Expert

 

Our sole Director has determined that we do not have a board member that qualifies as an “audit committee financial expert” as defined in Item 407(D)(5) of Regulation S-K, nor do we have a Board member that qualifies as “independent” as the term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as amended, and as defined by Rule 4200(a)(14) of the FINRA Rules.

 

We believe that the sole Director is capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. The sole Director of the Company does not believe that it is necessary to have an audit committee because management believes that the Board of Directors can adequately perform the functions of an audit committee. In addition, we believe that retaining an independent Director who would qualify as an "audit committee financial expert" would be overly costly and burdensome and is not warranted in our circumstances given the stage of our development and the fact that we have not generated any positive cash flows from operations to date.

 

Involvement in Certain Legal Proceedings

 

Our Director and our Executive officers have not been involved in any of the following events during the past ten years:

 

1. bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
2. any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
3. being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his/her involvement in any type of business, securities or banking activities; or
4. being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
5. Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;
6. Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
7. Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:(i) Any Federal or State securities or commodities law or regulation; or(ii) Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or(iii) Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
8. Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

 

Independence of Directors

 

We are not required to have independent members of our Board of Directors, and do not anticipate having independent Directors until such time as we are required to do so.

 

Code of Ethics

 

We have not adopted a formal Code of Ethics. The Board of Directors evaluated the business of the Company and the number of employees and determined that since the business is operated by a small number of persons, general rules of fiduciary duty and federal and state criminal, business conduct and securities laws are adequate ethical guidelines. In the event our operations, employees and/or Directors expand in the future, we may take actions to adopt a formal Code of Ethics.

 

Shareholder Proposals

 

Our Company does not have any defined policy or procedural requirements for shareholders to submit recommendations or nominations for Directors. The Board of Directors believes that, given the stage of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. Our Company does not currently have any specific or minimum criteria for the election of nominees to the Board of Directors and we do not have any specific process or procedure for evaluating such nominees. The Board of Directors will assess all candidates, whether submitted by management or shareholders, and make recommendations for election or appointment.

 

A shareholder who wishes to communicate with our Board of Directors may do so by directing a written request addressed to our President, at the address appearing on the first page of this Information Statement.

 

 

E XECUTIVE COMPENSATION

 

Mr. Jacobson, our former sole officer and director did not receive any compensation since inception. Mr. Jacobson did receive 300,000,000 common shares from us when his shares held in CXEE were exchanged for an equivalent amount of shares in ELEK. However, those shares were cancelled and returned to treasury upon Mr. Jacobson’s resignation on July 1, 2021. Ou newly appointed director Mr. Shlomo Bleier did receive stock compensation on July 1, 2021 in the amount of 300,000,000 restricted common shares from us at $.001 par value as listed below. There is no option or non-cash compensation plan at this time. No amounts are paid or payable to the director for acting as such. No Board committees have been established. Due to no operations, the entire Board of Directors functions as the audit committee; Mr. Bleier is not a “financial expert” as defined in Regulation S-K 407. We have no independent director.

 

The following table sets forth the compensation of the Company's sole executive officer for the years ended November 30, 2018 and 2017.

 

 

 

Name:

 

 

July 1, 2021:

 

Salary, Fees, Commissions ($):

 

 

Bonus ($):

 

Stock Awards ($):

 

Stock Options ($):

 

All Other Compensation ($):

 

 

Total ($):

Shlomo Bleier

CEO, Director

  2021   --    --  $300,000   --  300,000

 

 

 

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 Summary of Compensation

 

Stock Option Grants

We have not granted any stock options to our executive officer(s) since our incorporation.

 

Employment Agreements

We do not have an employment or consulting agreements with any officers or Directors.

 

Compensation Discussion and Analysis

Director Compensation

 

Our Board of Directors does not currently receive any consideration for their services as members of the Board of Directors. The Board of Directors reserves the right in the future to award the members of the Board of Directors cash or stock based consideration for their services to the Company, which awards, if granted shall be in the sole determination of the Board of Directors.

 

Executive Compensation Philosophy

 

Our Board of Directors determines the compensation given to our executive officers in their sole determination. Our Board of Directors reserves the right to pay our executive or any future executives a salary, and/or issue them shares of common stock issued in consideration for services rendered and/or to award incentive bonuses which are linked to our performance, as well as to the individual executive officer’s performance. This package may also include long-term stock based compensation to certain executives, which is intended to align the performance of our executives with our long-term business strategies. Additionally, while our Board of Directors has not granted any performance base stock options to date, the Board of Directors reserves the right to grant such options in the future, if the Board in its sole determination believes such grants would be in the best interests of the Company.

 

Incentive Bonus

 

The Board of Directors may grant incentive bonuses to our executive officer and/or future executive officers in its sole discretion, if the Board of Directors believes such bonuses are in the Company’s best interest, after analyzing our current business objectives and growth, if any, and the amount of revenue we are able to generate each month, which revenue is a direct result of the actions and ability of such executives.

 

Long-term, Stock Based Compensation

 

In order to attract, retain and motivate executive talent necessary to support the Company’s long-term business strategy we may award our executive and any future executives with long-term, stock-based compensation in the future, at the sole discretion of our Board of Directors, which we do not currently have any immediate plans to award.

 

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

 

The following table sets forth information as to the shares of common equity beneficially owned as of September 21, 2021 by (i) each person known to us to be the beneficial owner of more than 5% of our common equity; (ii) each Director; (iii) each Executive Officer; and (iv) all of our Directors and Executive Officers as a group. Unless otherwise indicated in the footnotes following the table, the persons as to whom the information is given had sole voting and investment power over the shares of common equity shown as beneficially owned by them. Beneficial ownership is determined in accordance with Rule 13d-3 under the Exchange Act, which generally means that shares subject to options currently exercisable or exercisable within 60 days of the date hereof are considered to be beneficially owned, including for the purpose of computing the percentage ownership of the person holding such options, but are not considered outstanding when computing the percentage ownership of each other person. The footnotes below indicate the amount of unvested options for each person in the table. None of these unvested options vest within 60 days of the date hereof. 

 

Title of Class   Name of
Beneficial Owner
  Address of Beneficial Owner  

Amount and
Nature of

Beneficial
Ownership

 

Voting

Percentage (1)

 

Voting Percentage
After

Completion of Offering if Maximum Number of Shares Are Sold

                     
Common Stock   Jewish Enrichment Enterprise, Inc.*   1626 South 17th Avenue, Holywood, Florida 33020     326,000,000       87.68%   69.09%
All Officers and Directors             326,000,000       87.68%   69.09%
                             
(1) Based on 371,820,871 common shares outstanding as of September 14, 2021.  

 

 

                       

 

* Jewish Enrichment Enterprise, Inc. is an entity wholly owned by Shlomo Bleier, our sole director. Mr. Bleier is deemed to be the indirect and beneficial owner of these shares since he has voting and investment control over the shares.
** Voting Percentage After Offering will be determined after Qualification of Offering Statement by the Commission.

 

 

 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

On December 28, 2020, the Company entered into a loan agreement with Samuel Schlesinger for $10,000. The verbal agreement between our sole officer, Levi Jacobson, and Mr. Schlesinger set the term of the loan as payable within 365 days from December 28, 2020 with no interest. No money has been paid back at this time to Mr. Schlesinger. Mr. Schlesinger is a long time friend of our director. Mr. Schlesinger does not have any other relationship with the Company.

Director Independence

 

Currently, the Company does not have any independent directors. Since the Company’s Common Stock is not currently listed on a national securities exchange, we have used the definition of “independence” of the NASDAQ Stock Market to make this determination.

 

Under NASDAQ Listing Rule 5605(a)(2), an "independent director" is a "person other than an officer or employee of the company or any other individual having a relationship which, in the opinion of the company's board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director."

 

We do not currently have a separately designated audit, nominating or compensation committee.  However, we do intend to comply with the independent director and committee composition requirements in the future.

 

Review, Approval and Ratification of Related Party Transactions

 

Given our small size and limited financial resources, we have not adopted formal policies and procedures for the review, approval or ratification of transactions, such as those described above, with our executive officer(s), Director(s) and significant stockholders. We intend to establish formal policies and procedures in the future, once we have sufficient resources and have appointed additional Directors, so that such transactions will be subject to the review, approval or ratification of our Board of Directors, or an appropriate committee thereof. On a moving forward basis, our Directors will continue to approve any related party transaction.

 

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FINANCIAL STATEMENTS AND EXHIBITS.

 

elektros, Inc.

INDEX TO FINANCIAL STATEMENTS

    Page
     
Reports of Independent Registered Public Accounting Firm   F2
     
Audited Financial Statements:    
     
Balance Sheet as of December 31, 2020   F3
     
Statement of Operations for the Period December 1, 2020 (Inception) to December 31, 2020   F4
     
Statement of Changes in Stockholders’ (Deficit) for the Period December 1, 2020 (Inception) to December 31, 2020   F5
     
Statement of Cash Flows for the Period December 1, 2020 (Inception) to December 31, 2020   F6
     
Notes to Audited Financial Statements   F7-F11
     
Unaudited Financial Statements  
     
Balance Sheets as of June 30, 2021 and December 31, 2020   F-12
     
Statement of Operations for the Six Months Ended June 30, 2021   F-13
     
Statement of Changes in Stockholders’ Deficit for the Period December 1, 2020(Inception) to June 30, 2021   F-14
     
Statement of Cash Flows for the Six Months ended June 30, 2021   F-15
     
Notes to Financial Statements   F-16-F-21
     

 

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

Report of Independent Registered Public Accounting Firm

To the shareholders and the board of directors of Elektros, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheet of Elektros, Inc. (the "Company") as of December 31, 2020, the related statement of operations, stockholders' equity (deficit), and cash flows for the period December 1, 2020 (Inception) through December 31, 2020 and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the period December 1, 2020 (Inception) through December 31, 2020, in conformity with accounting principles generally accepted in the United States.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting 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.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ BF Borgers CPA PC

BF Borgers CPA PC

 

We have served as the Company's auditor since 2021

Lakewood, CO

April 6, 2021

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ELEKTROS, INC.

BALANCE SHEETS 

(Audited)

 

 

 

   As of December 31, 2020  

ASSETS

CURRENT LIABILITIES

Cash in bank

  $10,000   
Total current assets   10,000   
TOTAL ASSETS  $10,000   
        
LIABILITIES AND STOCKHOLDERS’ DEFICIT       
CURRENT LIABILITIES:       
Accrued expenses  $1,000   
Loan to company   10,000   
Total current liabilities   11,000   
TOTAL LIABILITIES  $11,000   
        
STOCKHOLDERS' DEFICIT:       
        
Preferred stock ($.001 par value, 200,000,000 shares authorized, none issued and outstanding as of December 31, 2020)    —     
Common stock ($.001 par value, 500,000,000 shares authorized, none issued and outstanding as of December 31, 2020)   —     
        
Additional paid in capital   1,185   
        
Accumulated deficit   (2,185)  
Total Stockholders' deficit   (1,000)  
TOTAL LIABILITIES &STOCKHOLDERS’ DEFICIT  $10,000   

 

  

 

The accompanying notes are an integral part of these financial statements.

 

 

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ELEKTROS, INC.

STATEMENT OF OPERATIONS

(Audited) 

 

 

 

     

  For the Period December 1, 2020 (Inception)

to December 31, 2020

       
Operating expenses      
       
     General and administrative expenses    $ 2,185
Total operating expenses   2,185
       
Net loss    $             (2,185)
       
Basic and Diluted net loss per common share   $ -
       
Weighted average number of common shares outstanding - Basic and Diluted     -

  

 

The accompanying notes are an integral part of these financial statements.

 

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 Elektros, Inc.

Statement of Changes is Stockholder (Deficit)

For the Period December 1, 2020 (Inception) to December 31, 2020

(Audited) 

 

 

                           
      Common Shares   Par Value Common Shares      Additional Paid-in Capital   Accumulated Deficit   Total  
                           
Date of Inception, December 1, 2020       - $ -   $ - $ - $ -    
                           
Expenses paid on behalf of the Company and contributed to capital     -   -     1,185   -   1,185  
Net loss     -   -         (2,185)   (2,185)  
Balances, December 31, 2020 $   - $ -   $ 1,185 $ (2,185) $ (1,000)  
                           
                           

The accompanying notes are an integral part of these financial statements.

 

 

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ELEKTROS, INC.

STATEMENTS OF CASH FLOWS

(Audited) 

 
   

 

For the Period from December 1, 2020 (Inception) to December 31, 2020

CASH FLOWS FROM OPERATING ACTIVITIES      
Net loss   $ (2,185)
Adjustment to reconcile net loss to net cash used in operating activities:      
 Expenses contributed to capital     1,185
Changes in current assets and liabilities:      
 Accrued expenses     1,000
Net cash used in operating activities     -
CASH FLOWS FROM FINANCING ACTIVITIES      
Loan to company     10,000
Net cash provided by financing activities     10,000
       
Net change in cash   $ 10,000
Beginning cash balance     -
Ending cash balance   $ 10,000
       
       
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:       
       
     Interest paid   $ -
     Income taxes paid   $ -

   

The accompanying notes are an integral part of these financial statements.

 

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Elektros, Inc.

 

Notes to Audited Financial Statements

 

Note 1 – Organization and Description of Business

 

Elektros, Inc. (we, us, our, or the "Company") was incorporated on December 1, 2020 in the State of Nevada.

 

On December 1, 2020, Levi Jacobson was appointed Chief Executive Officer, Chief Financial Officer, and Director of Elektros, Inc.

 

The Company is currently structured as a holding Company for an anticipated holding company reorganization. As of December 31, 2020, the Company had not yet commenced any operations.

 

 The Company has elected December 31st as its year end.

 

Note 2 – Summary of Significant Accounting Policies

 

Basis of Presentation

 

This summary of significant accounting policies is presented to assist in understanding the Company's financial statements. These accounting policies conform to accounting principles, generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements.

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. In the opinion of management, all adjustments necessary in order to make the financial statements not misleading have been included. Actual results could differ from those estimates.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents at December 31, 2020 were $10,000. 

 

 

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Income Taxes

 

The Company accounts for income taxes under ASC 740, “Income Taxes.”  Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs.  A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. No deferred tax assets or liabilities were recognized at December 31, 2020.

 

Basic Earnings (Loss) Per Share

 

The Company computes basic and diluted earnings (loss) per share in accordance with ASC Topic 260, Earnings per Share. Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the reporting period. Diluted earnings (loss) per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company.

 

The Company does not have any potentially dilutive instruments as of December 31, 2020 and, thus, anti-dilution issues are not applicable.

 

Fair Value of Financial Instruments

The Company’s balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.

ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

 

- Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

- Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

- Level 3 - Inputs that are both significant to the fair value measurement and unobservable.  

 

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2020. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accrued expenses.

 

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Related Parties

 

The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.

 

Share-Based Compensation

 

ASC 718, “Compensation – Stock Compensation”, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

 

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, “Equity – Based Payments to Non-Employees.”  Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable:  (a) the goods or services received; or (b) the equity instruments issued.  The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.  

 

The Company had no stock-based compensation plans as of December 31, 2020.

The Company’s stock based compensation for the period ended December 31, 2020 was $0.

 

Recently Issued Accounting Pronouncements

 

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 is amended by ASU 2018-01, ASU2018-10, ASU 2018-11, ASU 2018-20 and ASU 2019-01, which FASB issued in January 2018, July 2018, July 2018, December 2018 and March 2019, respectively (collectively, the amended ASU 2016-02). The amended ASU 2016-02 requires lessees to recognize on the balance sheet a right-of-use asset, representing its right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than 12 months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from current GAAP. The amended ASU 2016-02 retains a distinction between finance leases (i.e. capital leases under current GAAP) and operating leases. The classification criteria for distinguishing between finance leases and operating leases will be substantially similar to the classification criteria for distinguishing between capital leases and operating leases under current GAAP. The amended ASU 2016-02 also requires qualitative and quantitative disclosures designed to assess the amount, timing, and uncertainty of cash flows arising from leases. A modified retrospective transition approach is permitted to be used when an entity adopts the amended ASU 2016-02, which includes a number of optional practical expedients that entities may elect to apply.

 

We have no leases and do not believe we will be impacted in the foreseeable future by the newly adopted accounting standard(s) mentioned above.

 

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

Note 3 – Going Concern

 

The Company’s financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business.

  

 

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The Company demonstrates adverse conditions that raise substantial doubt about the Company's ability to continue as a going concern for one year following the issuance of these financial statements. These adverse conditions are negative financial trends, specifically operating loss, working capital deficiency, and other adverse key financial ratios.

 

The Company has not established any source of revenue to cover its operating costs. Management plans to fund operating expenses with related party contributions to capital. There is no assurance that management's plan will be successful. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern.

 

Note 4 – Income Taxes

 

The Company has not recognized an income tax benefit for its operating losses generated based on uncertainties concerning its ability to generate taxable income in future periods. The tax benefit for the period presented is offset by a valuation allowance established against deferred tax assets arising from the net operating losses, the realization of which could not be considered more likely than not. In future periods, tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not. As of December 31, 2020, the Company has incurred a net loss of approximately $2,185 which resulted in a net operating loss for income tax purposes.  The loss results in a deferred tax asset of approximately $459 at the effective statutory rate of 21%. The deferred tax asset has been off-set by an equal valuation allowance. Given our inception on December 1, 2020, and our fiscal year end of December 31, 2020, we have completed only one taxable fiscal year.

Note 5 – Commitments and Contingencies

The Company follows ASC 450-20, Loss Contingencies, to report accounting for contingencies.  Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. There were no commitments or contingencies as of December 31, 2020.

Note 6 – Accrued Expenses

Accrued expenses totaled $1,000 as of December 31, 2020 and consisted primarily of professional fees.

Note 7 – Loan to Company

On December 28, 2020, the Company entered into a loan agreement with Samuel Schlesinger. The verbal agreement between our sole officer, Levi Jacobson, and Mr. Schlesinger set the term of the loan as payable within 180 days from December 28, 2020 with no interest.

Note 7 – Shareholder Equity

 

Preferred Stock

 

The authorized preferred stock of the Company consists of 200,000,000 shares with a par value of $0.001. There are no shares issued and outstanding as of December 31, 2020.

  

Common Stock

 

The authorized common stock of the Company consists of 500,000,000 shares with a par value of $0.001. There are no shares of common stock issued and outstanding as of December 31, 2020.

   

Additional Paid-In Capital

 

The Company’s sole officer and director, Levi Jacobson, paid expenses on behalf of the company totaling $1,185 as of December 31, 2020. The $1,185 in total payments are considered contributions to the company with no expectation of repayment and are posted as additional paid-in capital.

 

  

- F10 -


Table of Contents 

  

Note 8 – Related-Party Transactions

 

Office Space

 

We utilize the home office space and equipment of our management at no cost.

 

Note 9 – Subsequent Events

 

The Company completed a holding company reorganization (“Reorganization”) on May 28, 2021 by and between CXEE, ELEK and Elektros Merger Sub, Inc. The Reorganization was accounted for as a reverse capitalization with Elektros, Inc. deemed the accounting acquirer and CXEE deemed the accounting acquiree under the purchase method of accounting. Contemporaneusly after the merger, ELEK cancelled all of its shares held in CXEE resulting in CXEE and ELEK each as a stand-alone entity. The Company’s business plan changed after the Reorganization from a holding company to design and build an SUV electric vehicle and electric charging stations.

 

On July 1, 2021, Levi Jacobson, our sole director resigned and cancelled 300,000,000 restricted common shares that he indirectly held in ELEK through his wholly owned company known as Goldjay Realty, Inc. Goldjay Realty, Inc. was originally issued 300,000,000 shares in CXEE on December 10, 2020 for reinstating CXEE into good standing with Nevada Secretary of State whereas Mr. Jacobson was CXEE’s custodian at the time and is the director of CXEE. Those shares were exchanged for an equivalent amount of shares in ELEK pursuant to the Agreement and Plan of Merger filed as an exhibit to the offering statement. On July 1, 2021, Mr. Jacobson resigned as our sole director and appointed Mr. Shlomo Bleier as our sole officer/director. On that date, Mr. Jacobson cancelled all his shares held in ELEK and ELEK issued Mr. Bleier 300,000,000 shares of restricted common stock for developing the business plan of ELEK. The shares were issued to Mr. Bleier pursuant to Rule 4(a)(2).

 

- F11 - 


  

Electros, Inc.

Balance Sheets

(Unaudited)

 

   

 
June 30,

2021

   

 

December 31, 2020

ASSETS              
Current Assets              
          Cash   69     10,000
Total Current Assets     69       10,000
               
TOTAL ASSETS   $ 69     $ 10,000
               
LIABILITIES & STOCKHOLDERS’ EQUITY              
Current Liabilities              
          Accrued expenses    $ 1,400     $ 1,000
          Loans to the company, net accumulated interest     101,300       10,000
Total Current Liabilities     102,700       11,000
               
TOTAL LIABILITIES     102,700       11,000
               
Stockholders’ Equity              
Preferred stock, $.001 par value, 200,000,000 shares authorized; 0 issued and outstanding as of June 30, 2021 and December 31, 2020     -       -
               
Common stock, $.001 par value, 500,000,000 shares authorized, 397,520,871 and 0 shares issued and outstanding as of June 30, 2021 and December 31 2020, respectively     397,521       -
Additional paid in capital     82,603,764       1,185
Accumulated deficit     (83,103,916)       (2,185) 
               
Total Stockholders’ Deficit   $ (102,631)     $ (1,000)
               
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY   $ 69     $ 10,000

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

- F12 - 


 

 

Elektros, Inc.

Statement of Operations

(Unaudited) 

 

       Six Months Ended June 30, 2021
       
Operating expenses      
       
     General and administrative expenses    $ 83,098,431
Total operating expenses   83,098,431
       
Operating loss    $             (83,098,431)
       
Other Income/(Loss)      
Interest   $ 3,300
Total Other Expense     3,300
Net loss   $ (83,101,731)
       
Basic and Diluted net loss per common share   $ (.58)
       
Weighted average number of common shares outstanding - Basic and Diluted     143,321,605

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

- F13 - 


 

  Elektros, Inc.

Statement of Changes is Stockholder (Deficit)

For the Period December 1, 2020 (Inception) to June 30, 2021

(Unaudited) 

 

 

                           
      Common Shares   Par Value Common Shares      Additional Paid-in Capital   Accumulated Deficit   Total  
                           
Date of Inception, December 1, 2020       - $ -   $ - $ - $ -    
 Expenses paid on behalf of the Company and contributed to capital     -   -     1,185   -   1,185  
Net loss     -   -     -   (2,185)   (2,185)  
Balances, December 31, 2020   $ - $ -   $ 1,185 $ (2,185) $ (1,000)  
Common shares issued as compensation     31,000,000   31,000     82,969,000   -   83,000,000  
Common shares issued in reorganization     366,520,871   366,521     (366,521)   -   -  
Expenses paid on behalf of the Company and contributed to capital     -   -     100   -   100  
Net loss     -   -         (83,101,731)   (83,101,731)  
Balances, June 30, 2021 $   397,520,871 $ 397,521   $ 82,603,764 $ (83,103,916) $ (102,631)  
                           
                           

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

- F14 - 


Elektros, Inc.

Statement of Cash Flows

(Unaudited) 

 

   

 

Six Months Ended June 30, 2021

CASH FLOWS FROM OPERATING ACTIVITIES      
Net loss   $ (83,101,731)
Adjustment to reconcile net loss to net cash used in operating activities:      
 Expenses contributed to capital     100
 Common shares issued as compensation     83,000,000
Changes in current assets and liabilities:      
 Accrued expenses     3,700
Net cash used in operating activities     (97,931)
CASH FLOWS FROM FINANCING ACTIVITIES      
Loan to company     88,000
Net cash provided by financing activities     88,000
       
Net change in cash   $ (9,931)
Beginning cash balance     10,000
Ending cash balance   $ 69
       
       
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:       
       
     Interest paid   $ -
     Income taxes paid   $ -

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

- F15- 


Elektros, Inc.

Notes to the Unaudited Consolidated Financial Statements

 

Note 1 – Organization and Description of Business

 

Elektros, Inc. (we, us, our, or the "Company") was incorporated on December 1, 2020 in the State of Nevada.

 

On December 1, 2020, Levi Jacobson was appointed Chief Executive Officer, Chief Financial Officer, and Director of Elektros, Inc.

 

On May 25, 2021, the Company entered into a “Agreement and Plan of Merger”, whereas it agreed to, and subsequently participated in, a Nevada holding company reorganization pursuant to NRS 92A.180, NRS 92A.200, NRS 92A.230 and NRS 92A.250 (“Reorganization”). There was no shareholder vote required and there was no shareholder meeting. The constituent corporations in the Reorganization were China Xuefeng Environmental Engineering, Inc. (“CXEE” or “Predecessor”), Elektros, Inc. (“ELEK” or “Successor”), and Elektros Merger Sub, Inc. (“Merger Sub”). Our former director, Levi Jacobson, was the sole director/officer of each constituent corporation in the Reorganization.

 

Elektros, Inc. issued 1,000 common shares of its common stock to Predecessor and Merger Sub issued 1,000 shares of its common stock to Elektros, Inc. immediately prior to the Reorganization. As such, immediately prior to the merger, Elektros, Inc. became a wholly owned direct subsidiary of CXEE and Merger Sub became a wholly owned and direct subsidiary of ELEK.

 

The merger was effectuated on May 28, 2021 (“Effective Time”), whereas the Company filed Articles of Merger with the Nevada Secretary of State. At the Effective Time, Predecessor was merged with and into Merger Sub (the “Merger), and Predecessor became the surviving corporation. Each share of Predecessor common stock issued and outstanding immediately prior to the Effective Time was converted into one validly issued, fully paid and non-assessable share of ELEK’S common stock.

 

At the Effective Time, Elektros, Inc., as successor issuer to China Xuefeng Environmental Engineering Group, Inc. continued to trade in the OTC MarketPlace under the previous ticker symbol of Predecessor “CXEE” until the new ticker symbol “ELEK” for the Company was released into the OTC MarketPlace on June 7, 2021. The Company was given a CUSIP Number by CUSIP Global Services for its common stock of 286176102.

 

Our Common Stock is quoted on the OTC Markets Group Inc.’s Pink® Open Market under the symbol “ELEK”.

 

On May 28, 2021, after the completion of the Holding Company Reorganization, we cancelled all of the stock we held in CXEE resulting in CXEE and ELEK each as a stand-alone company. Pursuant to the holding company merger agreement and effects of merger, all of the assets and liabilities, if any, remain with CXEE after the Reorganization. Levi Jacobson, the Director of CXEE and our former Director did not discover any assets of CXEE from the time he was appointed custodian and Director until the completion of the Reorganization and subsequent separation of CXEE as a stand-alone company.

 

Given that the former business plan and objectives of CXEE and the present-day business plan and objectives of Elektros substantially differ from one another, we conducted the corporate separation with CXEE contemporaneously after the effective time of the Reorganization in order to avoid any shareholder confusion. The former business plan of CXEE (providing services to optimize garbage-recycling processes) under the leadership of its former directors, does not, in any way, represent the current day business plan of ELEK, and thus it is the belief of the Company that the corporate separation ameliorated shareholder confusion about our identity and/or corporate objectives. Furthermore, we wanted to continue trading in the OTC MarketPlace.

 

The corporate actions taken by the Company, including, but not limited to, the corporate structuring of the transactions, was deemed, in the discretion of our former sole director, to be for the benefit of the corporation and its

 

- F16-


 

shareholders. Former shareholders of CXEE are now the shareholders of ELEK. The former shareholders of CXEE now have the opportunity to benefit under our business plan and we have the opportunity to grow organically from our built-in shareholder base and new leadership under our new director Shlomo Bleier. It will be easier for us now to borrow funds because we trade in the OTC MarketPlace which is attractive to investors.

 

The Company has begun operations to design, develop and manufacture and sell fully electric sport utility vehicles.

 

On March 1, 2021, we entered into an Agreement with Technicon Design Corporation DBA Segula Technologies to create a high-level development roadmap for us, and they will work to identify companies with a developed EV Chassis which can be used to jump-start the vehicle development process for us. Segula will design and develop with production intent for a single design theme Electric SUV.

 

Currently, Jewish Enrichment Enterprise, Inc. owned and controlled by Shlomo Bleier, our sole officer and director is our controlling shareholder, owning 326,000,000 shares of our restricted common stock representing approximately 87.68% voting control. Mr. Levi Jacobson was our sole officer and director of CXEE and Elektros immediately before and at the effective time of the Reorganization. Mr. Jacobson resigned as Elektros sole officer/director on July 1, 2021. On the same date, Mr. Shlomo Bleier was appointed our sole officer/director by majority vote of shareholders and by our former director. Mr. Jacobson cancelled all of his shares held indirectly in Elektros by Goldjay Realty, Inc. and an equivalent number of shares were subsequently issued to Jewish Enrichment Enterprise, Inc., an entity solely controlled by Mr. Bleier as compensation for his services pursunat to Rule 4(a)(2).

 

The Company has elected December 31st as its year end.

 

Note 2 – Summary of Significant Accounting Policies

 

Basis of Presentation

 

This summary of significant accounting policies is presented to assist in understanding the Company's financial statements. These accounting policies conform to accounting principles, generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements.

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. In the opinion of management, all adjustments necessary in order to make the financial statements not misleading have been included. Actual results could differ from those estimates.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents at June 30, 2021, and December 31, 2020, were $69 and $10,000, respectively. 

 

- F17-


 

Income Taxes

 

The Company accounts for income taxes under ASC 740, “Income Taxes.”  Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs.  A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. No deferred tax assets or liabilities were recognized at June 30, 2021.

 

Basic Earnings (Loss) Per Share

 

The Company computes basic and diluted earnings (loss) per share in accordance with ASC Topic 260, Earnings per Share. Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the reporting period. Diluted earnings (loss) per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company.

 

The Company does not have any potentially dilutive instruments as of June 30, 2021 and, thus, anti-dilution issues are not applicable.

 

Fair Value of Financial Instruments

The Company’s balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.

ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

 

- Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

- Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

- Level 3 - Inputs that are both significant to the fair value measurement and unobservable.  

 

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of June 30, 2021. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accrued expenses.

 

- F18-


 

Related Parties

 

The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.

 

Share-Based Compensation

 

ASC 718, “Compensation – Stock Compensation”, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

 

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, “Equity – Based Payments to Non-Employees.”  Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable:  (a) the goods or services received; or (b) the equity instruments issued.  The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.  

 

The Company had no stock-based compensation plans as of June 30, 2021.

The Company’s stock-based compensation for the periods ended June 30, 2021 and December 31, 2020 were $83,000,000 and $0, respectively.

 

Recently Issued Accounting Pronouncements

 

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 is amended by ASU 2018-01, ASU2018-10, ASU 2018-11, ASU 2018-20 and ASU 2019-01, which FASB issued in January 2018, July 2018, July 2018, December 2018 and March 2019, respectively (collectively, the amended ASU 2016-02). The amended ASU 2016-02 requires lessees to recognize on the balance sheet a right-of-use asset, representing its right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than 12 months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from current GAAP. The amended ASU 2016-02 retains a distinction between finance leases (i.e. capital leases under current GAAP) and operating leases. The classification criteria for distinguishing between finance leases and operating leases will be substantially similar to the classification criteria for distinguishing between capital leases and operating leases under current GAAP. The amended ASU 2016-02 also requires qualitative and quantitative disclosures designed to assess the amount, timing, and uncertainty of cash flows arising from leases. A modified retrospective transition approach is permitted to be used when an entity adopts the amended ASU 2016-02, which includes a number of optional practical expedients that entities may elect to apply.

 

We have no leases and do not believe we will be impacted in the foreseeable future by the newly adopted accounting standard(s) mentioned above.

 

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

Note 3 – Going Concern

 

The Company’s financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business.

 

- F19-


 

The Company demonstrates adverse conditions that raise substantial doubt about the Company's ability to continue as a going concern for one year following the issuance of these financial statements. These adverse conditions are negative financial trends, specifically operating loss, working capital deficiency, and other adverse key financial ratios.

 

The Company has not established any source of revenue to cover its operating costs. Management plans to fund operating expenses with related party contributions to capital. There is no assurance that management's plan will be successful. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern.

 

Note 4 – Income Taxes

 

The Company has not recognized an income tax benefit for its operating losses generated based on uncertainties concerning its ability to generate taxable income in future periods. The tax benefit for the period presented is offset by a valuation allowance established against deferred tax assets arising from the net operating losses, the realization of which could not be considered more likely than not. In future periods, tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not. As of June 30, 2021, the Company has incurred a net loss of approximately $83,103,916 which resulted in a net operating loss for income tax purposes.  The loss results in a deferred tax asset of approximately $17,451,822 at the effective statutory rate of 21%. The deferred tax asset has been off-set by an equal valuation allowance. Given our inception on December 1, 2020, and our fiscal year end of December 31, 2020, we have completed only one taxable fiscal year.

Note 5 – Commitments and Contingencies

The Company follows ASC 450-20, Loss Contingencies, to report accounting for contingencies.  Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. There were no commitments or contingencies as of June 30, 2021.

Note 6 – Accrued Expenses

Accrued expenses totaled $1,400 as of June 30, 2021, and $1,000 as of December 31, 2020, and consisted primarily of professional fees.

Note 7 – Loan to Company

On February 12, 2021, the Company entered into a convertible loan agreement with GS Capital Partners, LLC (“GS Capital”) whereby the Company received $88,000 in exchange for a promissory note signed by the Company. The Company is currently accruing the ten percent annual interest. GS Capital can convert the loan and any accumulated interest to shares at the maturity date of February 12, 2022.

On December 28, 2020, the Company entered into a loan agreement with Samuel Schlesinger for $10,000. The verbal agreement between our former sole officer, Levi Jacobson, and Mr. Schlesinger set the term of the loan as payable within 365 days from December 28, 2020, with no interest.

Note 8 – Shareholder Equity

 

Preferred Stock

 

The authorized preferred stock of the Company consists of 200,000,000 shares with a par value of $0.001. There were no shares issued and outstanding as of June 30, 2021, and December 31, 2020.

 

Common Stock

 

The authorized common stock of the Company consists of 500,000,000 shares with a par value of $0.001. There were 397,520,871 and 0 shares of common stock issued and outstanding as of June 30, 2021, and December 31, 2020, respectively.

 

- F20-


 

On January 29, 2021, 26,000,000 shares of common stock were issued by CXEE to Jewish Enrichment Enterprise for services rendered to the Company.

 

On February 10, 2021, 5,000,000 shares of common stock were issued to CXEE to 9361-3321 Quebec Inc for services rendered to the Company.

At the time of the merger and reorganization, 366,520,871 common shares of CXEE were exchanged into equivalent amount of the Company’s common shares.

 

Additional Paid-In Capital

 

The Company’s former sole officer and director, Levi Jacobson, paid expenses on behalf of the company totaling $1,285 as of June 30, 2021. The $1,285 in total payments are considered contributions to the company with no expectation of repayment and are posted as additional paid-in capital.

 

Note 8 – Related-Party Transactions

 

Equity

 

On January 29, 2021, 26,000,000 shares of common stock were issued by CXEE to Jewish Enrichment Enterprise for services rendered to the Company. Our current sole officer and director, Shlomo Bleier, who was appointed July 1, 2021, owns and controls Jewish Enrichment Enterprise.

 

At the time of the merger and reorganization, 366,520,871 common shares of CXEE were transferred to the Company and 274,000,000 of those shares of common stock were transferred to Jewish Enrichment Enterprise for services rendered to the Company. . Our current sole officer and director, Shlomo Bleier, who was appointed July 1, 2021, owns and controls Jewish Enrichment Enterprise.

 

Office Space

 

We utilize the home office space and equipment of our management at no cost.

 

Note 9 – Subsequent Events

 

Management has reviewed financial transactions for the Company subsequent to the six months ended June 30, 2020 and has found that there was nothing material to disclose other than the following:

 

On July 1, 2021, Mr. Jacobson resigned as Elektros sole officer/director and Mr. Shlomo Bleier was appointed our sole officer/director by majority vote of shareholders and by our former director. Mr. Jacobson cancelled all of his shares held indirectly in Elektros by Goldjay Realty, Inc. and an equivalent number of shares were subsequently issued to Jewish Enrichment Enterprise, Inc., an entity solely controlled by Mr. Bleier as compensation for his services.

 

On September 2, 2021, Michael Dezer was issued 5,000,000 common shares. The shares were issued pursuant to verbal agreement between the Company and Mr. Dezer to allow the Company to use his commercial space to store electric vehicles at no cost.

 

- F21-


 

Table of Contents 

 

 PART III

  

INDEMNIFICATION OF DIRECTOR AND OFFICERS

 

Section 78.751 of the Nevada Business Corporation Act (the “Nevada Law”) authorizes a court to award, or a corporation’s board of directors to grant, indemnity to directors and officers in terms sufficiently broad to permit such indemnification under certain circumstances for liabilities, (including reimbursement for expenses incurred) arising under the Securities Act of 1933. Article VII of the Articles of Incorporation of Elektros, Inc. “we”, “us” or “our company”) provides for indemnification of officers, directors and other employees of Elektros, Inc. to the fullest extent permitted by Nevada Law. Article VII of the Articles of Incorporation provides that directors shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except (i) for any breach of a director’s duty of loyalty to our company or our stockholders, (ii) acts and omissions that are not in good faith or that involve intentional misconduct or knowing violation of law, (iii) or for any transaction from which the director derived any improper benefit.

 

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provisions, the registrant has been informed 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.

 

The Nevada Law and our Articles of Incorporation, allow us to indemnify our officers and Directors from certain liabilities and our Bylaws, as amended (“Bylaws”), state that we shall indemnify every (i) present or former Director, advisory Director or officer of us and (ii) any person who while serving in any of the capacities referred to in clause (i) served at our request as a Director, officer, employee or agent of another corporation, partnership, joint venture, trust, association or other enterprise. (each an “Indemnitee”).

 

Our Bylaws provide that the Corporation shall 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 (other than an action by or in the right of the Corporation) by reason of the fact that he is or was a director or officer of the Corporation, or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, association or other enterprise, against expenses (including attorneys fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with which action, suit or proceeding, if he acted in good faith and in a manner 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. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act 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, that he had reasonable cause to believe that his conduct was unlawful.

 

Neither our Bylaws, nor our Articles of Incorporation include any specific indemnification provisions for our officers or Directors against liability under the Securities Act of 1933, as amended. Additionally, insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the "Act") may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. 

 

RECENT SALES OF UNREGISTERED SECURITIES

None.

 

 

EXHIBITS TO Offering Statement

Exhibit No.

 

Description

     
1A-2A   Certificate of Incorporation, as amended (1)
1A-2B   By-laws (1)
1A-4   Sample Subscription Agreement (1)
1A-6   Securities Purchase Agreement and Note (1)
1A-6   Segula Agreement (1)
1A-7   Agreement and Plan of Merger (1)
1A-11   Consent of Accounting Firm (1)
1A-12   Legal Opinion Letter (1)
1A-15   Resignation of Levi Jacobson (1)

____________________

(1) Attached.

 

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Table of Contents

SIGNATURES

 

Pursuant to the requirements of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this offering statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Brooklyn, New York on September 22, 2021.

  Elektros, Inc.
   
  By: /s/ Shlomo Bleier
  Name: Shlomo Bleier
 

Title: President, Chief Executive Officer, Chief Financial Officer and Director

Date: September 22, 2021

 

This offering statement has been signed by the following persons in the capacities and on the dates indicated.

 

Name: Shlomo Bleier  Signature: /s/ Shlomo Bleier  Title: President, Chief Executive Officer and Director (Principal Executive Officer) Date: September 22, 2021

  

Name: Shlomo Bleier  Signature: /s/ Shlomo Bleier  Title: Chief Financial Officer (Principal Financial Officer)  Date: September 22, 2021 

 

Name: Shlomo Bleier  Signature: /s/ Shlomo Bleier  Title: Chief Accounting Officer (Principal Accounting Officer)  Date: September 22, 2021 

 

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 ARTICLES OF INCORPORATION OF

ELEKTROS, INC.

 

KNOW ALL MEN BY THESE PRESENTS That the undersigned incorporator being a natural person of the age or twenty-one years or more and desiring to form a body corporate under the laws of the State of Nevada does hereby sign, verify and deliver in duplicate to the Secretary of State or the State of Nevada, these Articles of Incorporation.

 

ARTICLE I

NAME

 

The name of the Corporation shall be Elektros, Inc.

 

ARTICLE II

PERIOD OF DURATION

 

The Corporation shall exist in perpetuity from and after the date of filing these Articles of Incorporation with the Secretary of State of the State of Nevada unless dissolved according to law.

 

ARTICLE III

PURPOSES AND POWERS

 

1 Purposes Except as restricted by these Articles of Incorporation, the Corporation is organized for the purpose of transacting all lawful business for which corporations may be incorporated pursuant to the Nevada Business Corporation Act

 

2 General Powers Except as restricted by these Articles of Incorporation, the Corporation shall have and may exercise all powers and rights which a corporation may exercise legally pursuant to the Nevada Business Corporation Act.

 

3. Issuance of Shares The board of directors of the Corporation may divide and issue any class of stock of the Corporation in series pursuant to a resolution properly filed with the Secretary of State of the State of Nevada

 

ARTICLE IV

CAPITAL STOCK

 

The aggregate number of shares which this Corporation shall have authority to issue is: Seven Hundred Million. (500,000,000) shares of $0.001 par value each, which shares shall be designated "Common Stock"; and Two Hundred Million (200,000,000) shares of $0.001 par value each, which shares shall be designated "Preferred Stock". The Board of Directors is hereby vested with authority to fix by resolution or resolutions the designations and the powers, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, including without limitation the dividend rate, conversion or exchange rights, redemption price and liquidation preference, of any series of shares of Preferred Stock, and to fix the number of shares constituting any such series, and to increase or decrease the number of shares of any such series (but not below the number of shares thereof then outstanding). In case the number of shares of any such series shall be so decreased, the shares constituting such decrease shall resume the status which they had prior to the adoption of the resolution or resolutions originally fixing the number of shares of such series. All shares of any one series shall be alike in every particular except as otherwise provided by these Articles of Incorporation or the Nevada Business Corporation Act. No holder of any shares of the Corporation, whether now or hereafter authorized, shall have any preemptive or preferential right to acquire any shares or securities of the Corporation, including shares or securities held in the treasury of the Corporation.

 

ARTICLE V

CUMULATIVE VOTING

 

In any election of directors of the Corporation, a holder of any class or series of stock then entitled to vote in such election shall be entitled to as many votes as shall equal (i) the number of votes which (except for this Article as to cumulative voting) he would be entitled to cast for the election of directors with respect to his shares of stock multiplied by (ii) the number of directors to be elected in the election in which his class or series of snares is entitled to vote and each stockholder may cast all of such voles for a single director or for any two or more of them as he may see fit. To exercise the right of cumulative voting, one or more of the stockholders requesting cumulative voting must give written notice to the president or secretary of the Corporation that the stockholder desires that the voting for the election of directors be cumulative.

 

ARTICLE VI

TRANSACTIONS WITH INTERESTED DIRECTORS OR OFFICERS

 

No contract or other transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any corporation, firm or association in which one or more of its directors or officers are directors or officers or are financially interested, shall be either void or voidable solely because of such relationship or interest or solely because such director or officer is present at the meeting of the board of directors or a committee thereof which authorizes, approves or ratifies such contract or transaction or solely because their votes are counted for such purpose, if;

 

(a) The fact of such relationship or interest is disclosed or known to the board of directors or committee and noted in the minutes and the board or committee authorizes, approves, or ratifies the contract or transaction in good faith by vote or consent sufficient for the purpose without counting the votes or consents of such interested directors, or

 

(b) The fact of such relationship or interest is disclosed or known to the shareholders entitled to vote and they authorize, approve, or ratify such contract or transaction in good faith by a majority vote or written consent. The votes of the common or interest directors or officers must be counted in any such vote of stockholders, or

 

(c) The fact of such relationship or interest is not disclosed or known to the director or officer at the time the transaction is brought before the board of directors of the corporation for action, or

 

(d) The contract or transaction is fair and reasonable as to the Corporation at the time it is authorized or approved

 

Common or interested directors may be counted in determining the presence of a quorum at a meeting of the board of directors or a committee thereof which authorizes, approves, or ratifies such contract or transaction and if the votes of the common or interested directors are not counted at the meeting, then a majority of the disinterred directors may authorize, approve or ratify the contract or transaction.

 

ARTICLE VII

INDEMNIFICATION

 

The Corporation is authorized to provide indemnification of its directors, officers, employees and agents whether by bylaw agreement, vote of shareholders or disinterested directors or otherwise, in excess of the indemnification expressly permitted by Section 78.751 of the Nevada Business Corporation Act for breach of duty to the Corporation and its shareholders subject only to the applicable limits upon such indemnification as set forth in the Nevada Business Corporation Act. Any repeal or modification of this Articles VII or Article XI shall not adversely affect any right or protection of a director or officer of the Corporation existing at the time of such repeal or modification.

 

ARTICLE VIII

ADOPTION AND AMENDMENT OF BYLAWS

 

The initial Bylaws or the Corporation shall be adopted by its board of directors. Subject to repeal or change by action of the shareholders, the power to alter, amend or repeal the Bylaws or adopt new Bylaws shall be vested in the board of directors. The Bylaws may contain any provisions for the regulation and management of the affairs of the Corporation not inconsistent with law or these Articles of Incorporation.

 

 

 

ARTICLE IX

RESIDENT AGENT

 

The name of the Corporation's resident agent and the street address is Registered Agents Inc., 401 Ryland Street, Suite 200-A, Reno, NV 89502.

 

The resident agent may be changed in the manner permitted by law.

 

ARTICLE X

INITIAL BOARD OF DIRECTORS

 

The number of directors of the Corporation shall be fixed by the Bylaws of the Corporation, and the number of directors of the Corporation may be changed from time to time by consent of the Corporation's directors. The initial board of directors of the Corporation shall consist of one (1) directors. The name and address of the persons who shall serve as director until the first annual meeting of shareholders and until his successor(s) are elected and shall qualify is:

 

Levi Jacobson

16950 North Bay Road, Suite 1803

Sunny Isles Beach, FL 33160

 

ARTICLE XI

LIMITATION OF LIABILITY OF DIRECTORS AND

OFFICERS TO CORPORATION AND SHAREHOLDERS

 

No director or officer shall be liable to the Corporation or any shareholder for damages for breach of fiduciary duty as a director or officer, except for any matter in respect of which such director or officer (a) shall be liable under Section 78.300 of the Nevada Business Corporation Act or any amendment thereto or successor provision thereto or (b) shall have acted or faded to act in a manner involving intentional misconduct fraud or a knowing violation of law. Neither the amendment nor repeal of this Article, nor the adoption of any provision in the Articles of Incorporation inconsistent with this Article, shall eliminate or reduce the effect of this Article in respect of any matter occurring prior to such amendment, repeal or adoption of an inconsistent provisions. This Article shall apply to the full extent now permitted by Nevada law or as may be permitted in the future by changes or enactments in Nevada law, including without limitation Section 78.300 and/or the Nevada Business Corporation Act.

 

ARTICLE XII

INCORPORATOR

 

The name and address of the incorporator is Levi Jacobson, 16950 North Bay Road, Suite 1803, Sunny Isles Beach, FL 33160.

 

IN WITNESS WHEREOF, the above-named incorporator has signed these Articles of Incorporation this 30th day of November, 2020.

 

 

 

/s/ Levi Jacobson

Levi Jacobson

 

 

 


 

BYLAWS OF

ELEKTROS, INC.

A Nevada Corporation,

As of December 1, 2020

 

ARTICLE I

Meetings of Stockholders

 

Section 1.1 Time and Place. Any meeting of the stockholders may be held at such time and such place, either within or without the State of Nevada, as shall be designated from time to time by resolution of the board of directors or as shall be stated in a duly authorized notice of the meeting.

 

Section 1.2 Special Meetings. Special meetings of the stockholders may be called by the majority of the Board of Directors, the President, Chief Executive Officer or the Secretary of the Corporation and may not be called by any other person.

 

Section 1.3 Notices. Written notice stating the place, date and hour of the meeting and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than sixty days before the date of the meeting, except as otherwise required by statute or the articles of incorporation, either personally, by mail or by a form of electronic transmission consented to by the stockholder, to each stockholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be given when deposited in the official government mail of the United States or any other country, postage prepaid, addressed to the stockholder at his address as it appears on the stock records of the Corporation. If given personally or otherwise than by mail, such notice shall be deemed to be given when either handed to the stockholder or delivered to the stockholder’s address as it appears on the records of the Corporation.

 

Section 1.4 Record Date. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting, or at any adjournment of a meeting, of stockholders; or entitled to receive payment of any dividend or other distribution or allotment of any rights; or entitled to exercise any rights in respect of any change, conversion, or exchange of stock; or for the purpose of any other lawful action; the board of directors may fix, in advance, a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors. The record date for determining the stockholders entitled to notice of or to vote at any meeting of the stockholders or any adjournment thereof shall not be more than sixty nor less than ten days before the date of such meeting. The record date for determining the stockholders entitled to consent to corporate action in writing without a meeting shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the board of directors. The record date for any other action shall not be more

 
 

than sixty days prior to such action. If no record date is fixed, (i) the record date for determining stockholders entitled to notice of or to vote at any meeting shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived by all stockholders, at the close of business on the day next preceding the day on which the meeting is held; (ii) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the board of directors is required, shall be the first date on which a signed written consent setting forth the action taken or to be taken is delivered to the Corporation and, when prior action by the board of directors is required, shall be at the close of business on the day on which the board of directors adopts the resolution taking such prior action; and (iii) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating to such other purpose. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting.

 

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Section 1.5 Voting Rights of the Holders of Common Stock. Holders of shares of Common Stock shall be entitled to cast one vote for each share held at all stockholders' meetings or consent for actions by stockholders taken without meeting for all purposes, including the election of directors. The Common Stock does not have cumulative voting rights. No holder of shares of stock of any class or series shall be entitled as a matter of right to subscribe for or purchase or receive any part of any new or additional issue of shares of stock of any class or series, or of securities convertible into shares of stock of any class or series, whether now hereafter authorized or whether issued for money, for consideration other than money, or by way of dividend.

 

Section 1.6 Quorum. The holders of a majority of the stock issued and outstanding and entitled to vote at stockholders’ meetings, present, in person, or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business, except as otherwise provided by statute or by the articles of incorporation. If, however, such a quorum shall not be present at any meeting of stockholders, the stockholders entitled to vote, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice if the time and place are announced at the meeting, until a quorum shall be present. At such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the original meeting. If the adjournment is for more than thirty days or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

 
 

Section 1.7 Voting and Proxies. At every meeting of the stockholders, each stockholder shall be entitled to one vote, in person or by proxy, for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after six months from its date unless the proxy provides for a longer period, which may not exceed seven years. When a specified item of business is required to be voted on by a class or series of stock, the holders of a majority of the shares of such class or series shall constitute a quorum for the transaction of such item of business by that class or series. If a quorum is present at a properly held meeting of the shareholders, the affirmative vote of the holders of a majority of the shares represented in person or by proxy and entitled to vote on the subject matter under consideration, shall be the act of the shareholders, unless the vote of a greater number or voting by classes (i) is required by the articles of incorporation, or (ii) has been provided for in an agreement among all shareholders entered into pursuant to and enforceable under NRS.

 

Section 1.8 Waiver. Attendance of a stockholder of the Corporation, either in person or by proxy, at any meeting, whether annual or special, shall constitute a waiver of notice of such meeting, except where a stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. A written waiver of notice of any such meeting signed by a stockholder or stockholders entitled to such notice, whether before, at or after the time for notice or the time of the meeting, shall be equivalent to notice. Neither the business to be transacted at, nor the purpose of, any meeting need be specified in any written waiver of notice.

 

Section 1.9 Stockholder Action Without a Meeting. Except as may otherwise be provided by any applicable provision of the NRS, any action required or permitted to be taken at a meeting of the stockholders may be taken without a meeting if, before or after the action, a written consent thereto is signed by stockholders holding at least a majority of the voting power; provided that if a different proportion of voting power is required for such an action at a meeting, then that proportion of written consents is required. In no instance where action is authorized by written consent need a meeting of stockholders be called or noticed.

 

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ARTICLE II

Directors

Section 2.1 Number. The number of directors shall be one or more, as fixed from time to time by resolution of the board of directors; provided, however, that the number of directors shall not be reduced so as to shorten the tenure of any director at the time in office.

 
 

Section 2.2 Powers of the Board of Directors. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. In addition to the powers and authority expressly conferred upon them by statute or by the most current Amended and Restated Certificate of Incorporation or these Bylaws of the Corporation, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation.

 

Section 2.3 Elections. Except as provided in Section 2.4 of this Article II, the board of directors shall be elected at the annual meeting of the stockholders or at a special meeting called for that purpose. Each director shall hold such office until his successor is elected and qualified or until his earlier resignation or removal.

 

Section 2.4 Vacancies. Any vacancy occurring on the board of directors and any directorship to be filled by reason of an increase in the board of directors may be filled by the affirmative vote of a majority of the remaining directors, although less than a quorum, or by a sole remaining director. Such newly elected director shall hold such office until his successor is elected and qualified or until his earlier resignation or removal.

 

Section 2.5 Meetings. The board of directors may, by resolution, establish a place and time for regular meetings which may be held without call or notice.

 

Section 2.6 Notice of Special Meetings. Special meetings of the directors may be called by the chairman, the president or any member of the board of directors. Notice of special meetings shall be given to each member of the board of directors by regular mail, electronic email, in person or telephonically at least forty-eight hours before the meeting.

 

Section 2.7 Quorum. At all meetings of the board, a majority of the total number of directors shall constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which a quorum is present shall be the act of the board of directors, except as otherwise specifically required by statute, the articles of incorporation or these bylaws. If less than a quorum is present, the director or directors present may adjourn the meeting from time to time without further notice. Voting by proxy is not permitted at meetings of the board of directors.

 

Section 2.8 Waiver. Attendance of a director at a meeting of the board of directors shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. A written waiver of notice signed by a director or directors entitled to such notice, whether before, at or after the time for notice or the time of the meeting, shall be equivalent to the giving of such notice.

 
 

Section 2.9 Action Without Meeting. Any action required or permitted to be taken at a meeting of the board of directors may be taken without a meeting if a consent in writing setting forth the action so taken shall be signed by all of the directors and filed with the minutes of proceedings of the board of directors. Any such consent may be in counterparts and shall be effective on the date of the last signature thereon unless otherwise provided therein.

 

Section 2.10 Attendance by Telephone. Members of the board of directors may participate in a meeting of such board by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at such meeting.

 

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ARTICLE III

Officers

 

Section 3.1 Election. The Corporation shall have such officers, with such titles and duties, as the board of directors may determine by resolution, which may include a chairman of the board, a president, a secretary and a treasurer and may include one or more vice presidents and one or more assistants to such officers. The officers shall in any event have such titles and duties as shall enable the Corporation to sign instruments and stock certificates complying with Section 6.1 of these bylaws, and one of the officers shall have the duty to record the proceedings of the stockholders and the directors in a book to be kept for that purpose. The officers shall be elected by the board of directors; provided, however, that the chairman may appoint one or more assistant secretaries and assistant treasurers and such other subordinate officers as he deems necessary, who shall hold their offices for such terms and shall exercise such powers and perform such duties as are prescribed in the bylaws or as may be determined from time to time by the board of directors or the chairman. Any two or more offices may be held by the same person.

 

Section 3.2 Removal and Resignation. Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors. Any officer appointed by the chairman may be removed at any time by the board of directors or the chairman. Any officer may resign at any time by giving written notice of his resignation to the chairman or to the secretary, and acceptance of such resignation shall not be necessary to make it effective unless the notice so provides. Any vacancy occurring in any office of chairman of the board, president, vice president, secretary or treasurer shall be filled by the board of directors. Any vacancy occurring in any other office may be filled by the chairman.

Section 3.3 Chairman of the Board. The chairman of the board shall preside at all meetings of shareholders and of the board of directors, and shall have the powers and perform the

 
 

duties usually pertaining to such office, and shall have such other powers and perform such other duties as may be from time to time prescribed by the board of directors.

 

Section 3.4 President. The president shall be the chief executive officer of the Corporation, and shall have general and active management of the business and affairs of the Corporation, under the direction of the board of directors. Unless the board of directors has appointed another presiding officer, the president shall preside at all meetings of the shareholders.

 

Section 3.5 Vice President. The vice president or, if there is more than one, the vice presidents in the order determined by the board of directors or, in lieu of such determination, in the order determined by the president, shall be the officer or officers next in seniority after the president. Each vice president shall also perform such duties and exercise such powers as are appropriate and such as are prescribed by the board of directors or, in lieu of or in addition to such prescription, such as are prescribed by the president from time to time. Upon the death, absence or disability of the president, the vice president or, if there is more than one, the vice presidents in the order determined by the board of directors or, in lieu of such determination, in the order determined by the president, or, in lieu of such determination, in the order determined by the chairman, shall be the officer or officers next in seniority after the president. in the order determined by the and shall perform the duties and exercise the powers of the president.

 

Section 3.6 Assistant Vice President. The assistant vice president, if any, or, if there is more than one, the assistant vice presidents shall, under the supervision of the president or a vice president, perform such duties and have such powers as are prescribed by the board of directors, the president or a vice president from time to time.

 

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Section 3.7 Secretary. The secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, keep the minutes of such meetings, have charge of the corporate seal and stock records, be responsible for the maintenance of all corporate files and records and the preparation and filing of reports to governmental agencies (other than tax returns), have authority to affix the corporate seal to any instrument requiring it (and, when so affixed, attest it by his signature), and perform such other duties and have such other powers as are appropriate and such as are prescribed by the board of directors or the president from time to time.

 

Section 3.8 Assistant Secretary. The assistant secretary, if any, or, if there is more than one, the assistant secretaries in the order determined by the board of directors or, in lieu of such determination, by the president or the secretary shall, in the absence or disability of the secretary or in case such duties are specifically delegated to him by the board of directors, the chairman, or the secretary, perform the duties and exercise the powers of

 
 

the secretary and shall, under the supervision of the secretary, perform such other duties and have such other powers as are prescribed by the board of directors, the chairman, or the secretary from time to time.

 

Section 3.9 Treasurer. The treasurer shall have control of the funds and the care and custody of all the stocks, bonds and other securities of the Corporation and shall be responsible for the preparation and filing of tax returns. He shall receive all moneys paid to the Corporation and shall have authority to give receipts and vouchers, to sign and endorse checks and warrants in its name and on its behalf, and give full discharge for the same. He shall also have charge of the disbursement of the funds of the Corporation and shall keep full and accurate records of the receipts and disbursements. He shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as shall be designated by the board of directors and shall perform such other duties and have such other powers as are appropriate and such as are prescribed by the board of directors or the president from time to time.

 

Section 3.10 Assistant Treasurer. The assistant treasurer, if any, or, if there is more than one, the assistant treasurers in the order determined by the board of directors or, in lieu of such determination, by the chairman or the treasurer shall, in the absence or disability of the treasurer or in case such duties are specifically delegated to him by the board of directors, the chairman or the treasurer, perform the duties and exercise the powers of the treasurer and shall, under the supervision of the treasurer, perform such other duties and have such other powers as are prescribed by the board of directors, the president or the treasurer from time to time.

 

Section 3.11 Compensation. Officers shall receive such compensation, if any, for their services as may be authorized or ratified by the board of directors. Election or appointment as an officer shall not of itself create a right to compensation for services performed as such officer.

 

ARTICLE IV

Committees

 

Section 4.1 Designation of Committees. The board of directors may establish committees for the performance of delegated or designated functions to the extent permitted by law, each committee to consist of one or more directors of the Corporation, and if the board of directors so determines, one or more persons who are not directors of the Corporation. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of such absent or disqualified member.

 
 

Section 4.2 Committee Powers and Authority. The board of directors may provide, by resolution or by amendment to these bylaws, for an Executive Committee to consist of one or more directors of the Corporation (but no persons who are not directors of the Corporation) that may exercise all the power and authority of the board of directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; provided, however, that an Executive Committee may not exercise the power or authority of the board of directors in reference to amending the articles of incorporation (except that an Executive Committee may, to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the board of directors, fix the designations and any of the preferences or rights of shares of preferred stock relating to dividends, redemption, dissolution, any distribution of property or assets of the Corporation, or the conversion into, or the exchange of shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the Corporation or fix the number of shares of any series of stock or authorize the increase or decrease of the shares of any series), adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease, or exchange of all or substantially all of the Corporations property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution, or amending these bylaws; and, unless the resolution expressly so provides, no an Executive Committee shall have the power or authority to declare a dividend or to authorize the issuance of stock.

 

Section 4.3 Committee Procedures. To the extent the board of directors or the committee does not establish other procedures for the committee, each committee shall be governed by the procedures established in Section 2.5 (except as they relate to an annual meeting of the board of directors) and Sections 2.6, 2.7, 2.8, 2.9 and 2.10 of these bylaws, as if the committee were the board of directors.

 

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ARTICLE V

Indemnification

 

Section 5.1 Expenses for Actions Other Than By or In the Right of the Corporation. The Corporation shall 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 (other than an action by or in the right of the Corporation) by reason of the fact that he is or was a director or officer of the Corporation, or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, association or other enterprise, against expenses (including attorneys fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with which action, suit or proceeding, if he acted in good faith and in a manner 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. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act 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, that he had reasonable cause to believe that his conduct was unlawful.

 

Section 5.2 Expenses for Actions By or In the Right of the Corporation. The Corporation shall 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 or officer of the Corporation, or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, association or other enterprise, against expenses (including attorneys fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper.

 

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Section 5.3 Successful Defense. To the extent that any person referred to in the preceding two sections of this Article V has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in such sections, or in defense of any claim issue, or matter therein, he shall be indemnified against expenses (including attorneys fees) actually and reasonably incurred by him in connection therewith.

 

Section 5.4 Determination to Indemnify. Any indemnification under the first two sections of this Article V (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director or officer is proper in the circumstances because he has met the applicable standard of conduct set forth therein. Such determination shall be made (i) by the stockholders, (ii) by the board of directors by majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (iii) if such quorum is not obtainable or, if a quorum of disinterested directors so directs, by independent legal counsel in a written opinion.

 
 

Section 5.5 Expense Advances. Expenses incurred by an officer or director in defending any civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized in this Article V.

 

Section 5.6 Provisions Nonexclusive. The indemnification and advancement of expenses provided by, or granted pursuant to, the other sections of this Article V shall not be deemed exclusive of any other rights to which any person seeking indemnification or advancement of expenses may be entitled under the articles of incorporation or under any other bylaw, agreement, insurance policy, vote of stockholders or disinterested directors, statute or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office.

 

Section 5.7 Insurance. By action of the board of directors, notwithstanding any interest of the directors in the action, the Corporation shall have power to purchase and maintain insurance, in such amounts as the board of directors deems appropriate, on behalf of any person who is or was a director or officer 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, association or other enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not he is indemnified against such liability or expense under the provisions of this Article V and whether or not the Corporation would have the power or would be required to indemnify him against such liability under the provisions of this Article V or of the NRS or by any other applicable law.

 

Section 5.8 Surviving Corporation. The board of directors may provide by resolution that references to the Corporation in this Article V shall include, in addition to this Corporation, all constituent corporations absorbed in a merger with this Corporation so that any person who was a director or officer of such a constituent corporation or is or was serving at the request of such constituent corporation as a director, employee or agent of another corporation, partnership, joint venture, trust, association or other entity shall stand in the same position under the provisions of this Article V with respect to this Corporation as he would if he had served this Corporation in the same capacity or is or was so serving such other entity at the request of this Corporation, as the case may be.

 

Section 5.9 Inurement. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article V shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors, and administrators of such person.

 
 

Section 5.10 Employees and Agents. To the same extent as it may do for a director or officer, the Corporation may indemnify and advance expenses to a person who is not and was not a director or officer of the Corporation but who is or was an employee or agent of the Corporation or who is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, association or other enterprise.

 

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ARTICLE VI

Delivery of Securities

 

Section 6.1 Facsimile Signatures. Where a certificate of stock is countersigned (i) by a transfer agent other than the Corporation or its employee or (ii) by a registrar other than the Corporation or its employee, any other signature on the certificate may be facsimile. In case any officer, transfer agent or registrar who has signed, or whose facsimile signature or signatures have been placed upon, any such certificate shall cease to be such officer, transfer agent or registrar, whether because of death, resignation or otherwise, before such certificate is issued, the certificate may nevertheless be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.

 

Section 6.2 Transfer of Stock. Transfers of shares of stock of the Corporation shall be made on the books of the Corporation only upon presentation of the certificate or certificates representing such shares properly endorsed or in uncertificated form (book- entry) accompanied by a proper instrument of assignment, except as may otherwise be expressly provided by the laws of the State of Nevada or by order by a court of competent jurisdiction. The officers or transfer agents of the Corporation may, in their discretion, require a signature guaranty or any other form before making any transfer.

 

Section 6.3 Lost Certificates. The board of directors may direct that a new certificate of stock be issued in place of any certificate issued by the Corporation that is alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate to be lost, stolen, or destroyed. When authorizing such issue of a new certificate, the board of directors may, in its discretion and as a condition precedent to the issuance of a new certificate, require the owner of such lost, stolen, or destroyed certificate, or his legal representative, to give the Corporation a bond in such sum as it may reasonably direct as indemnity against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.

 

ARTICLE VII

Seal

 
 

 

The board of directors may, but are not required to, adopt and provide a common seal or stamp which, when adopted, shall constitute the corporate seal of the Corporation. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or manually reproduced.

 

ARTICLE VIII

Fiscal Year

 

The board of directors, by resolution, have adopted December 31st as its calendar year end for the Corporation.

 

ARTICLE IX

Amendment

 

The Board of Directors is expressly authorized to adopt, repeal, alter, amend and rescind any or all of the Bylaws of the Corporation. The affirmative vote of at least a majority of the Board of Directors then in office shall be required in order for the Board of Directors to adopt, repeal, alter, amend or rescind the Corporation’s Bylaws. The number of directors of the Corporation shall be determined in the manner set forth in the Bylaws of the Corporation. The election of directors need not be by written ballot unless the by-laws of the Corporation shall so provide. The Corporation’s Bylaws may also be adopted, repealed, altered, amended or rescinded by the majority vote of shareholders.

 

8

 

These bylaws have been duly adopted by the written consent by the Corporation’s Board of Directors on the 1st day of December 2020 in accordance with NRS.

 

 

 

Elektros, Inc.

 

 

 

/s/ Levi Jacobson

By: Levi Jacobson,

   its sole director


EXHIBIT 4.1

 

ELEKTROS, INC.

SUBSCRIPTION AGREEMENT

 

16950 North Bay Road

Sunny Isles Beach, Florida 33160

 

Shares of Common Stock

 

Subject to the terms and conditions of the shares of common stock (the "Shares”) described in the Elektros, Inc. (the “Company”) Offering Circular dated September___, 2021 (the "Offering"), I hereby subscribe to purchase the number of shares of Common Stock set forth below for a purchase price of $_____ per share. Enclosed with this Subscription Agreement (the “Agreement”) is my check (Online “E-Check” or Traditional Paper Check), ACH or money order made payable to "Elektros, Inc.” (the “Company”) evidencing $___ for each Share subscribed.

 

I understand that my subscription is conditioned upon acceptance by the Company and subject to additional conditions described in the Offering Circular. I further understand that the Company, in its sole discretion, may reject my subscription in whole or in part and may, without notice, allot to me a fewer number of Shares that I have subscribed for. In the event the Offering is terminated, all subscription proceeds will be returned without interest.

 

I understand that when this Agreement is executed and delivered, it is irrevocable and binding to me. I further understand and agree that my right to purchase Shares offered by the Company may be assigned or transferred to any third party without the express written consent of the Company.

 

I further certify, under penalties of perjury, that: (1) the taxpayer identification number shown on the signature page of this Offering Circular is my correct identification number; (2) I am not subject to backup withholding under the Internal Revenue Code because (a) I am exempt from backup withholding; (b) I have not been notified by the Internal Revenue Service (the “IRS”) that I am subject to backup withholding as a result of a failure to report all interest or dividends or (c) the IRS has notified me that I am no longer subject to backup withholding; and (3) I am a U.S. citizen or other U.S. person (as defined in the instructions to Form W-9).

 

SUBSCRIPTION AGREEMENT (the “Agreement”) with the undersigned Purchaser for __________ Shares of the Company with a par value per share of $0.001, at a purchase price of $____ per share (aggregate purchase price: $____________) (hereafter the “Purchase Price,”).

 

This Agreement is between Elektros, Inc., a Delaware corporation (the “Company”), and the Purchaser whose signature appears below on the signature line of this Agreement (the “Purchaser”).

 

 
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WI T N E S E T H:

 

WHEREAS, the Company is offering for sale up to a maximum of Thirty Seven Million Five Hundred Thousand (37,500,000) shares of common stock (the “Shares”) (such offering being referred to in this Agreement as the “Offering”).

 

NOW, THEREFORE, the Company and the Purchaser, in consideration of the mutual covenants contained herein and intending to be legally bound, do hereby agree as follows:

 

1. Purchase and Sale. Subject to the terms and conditions hereof, the Company shall sell, and the Purchaser shall purchase, the number of Shares indicated above at the price so indicated.
   
2. Method of Subscription. The Purchaser is requested to complete and execute this agreement online or to print, execute and deliver two copies of this Agreement to the Company, at 16950 North Bay Road, Sunny Isles Beach, Florida 33160 along with payment to Elektros, Inc. in the amount of the Purchase Price of the Shares subscribed (the “Funds”), as outlined below. The Company reserves the right in its sole discretion, to accept or reject, in whole or in part, any and all subscriptions for Shares.
   
3. Subscription and Purchase.

  

  a) The Offering will begin on the qualification date of the Offering Statement and continue until the Company has sold all of the Shares offered hereby or on such earlier date as the Company may close or terminate the Offering. Any subscription for Shares received will be rejected by the Company within 30 days of receipt thereof or the termination date of this Offering, if earlier.
     
  b) Contemporaneously with the execution and delivery of this Agreement, Purchaser shall pay the Purchase Price for the Shares by check (Online “E-Check,” ACH debit transfer or Traditional Paper Check) or money order made payable to Elektros, Inc.
     
  c) Upon receipt of the Funds to the Company, Purchaser shall receive notice and evidence of the digital entry (or other manner of record) of the number of Shares owned by the Purchaser reflected on the books and records of the Company which books and records shall bear the notation that the Shares were sold in reliance upon Regulation A under the Securities Act of 1933.
     
  d) If any such subscription is accepted, the Company will promptly deliver or mail to the Purchaser (i) a fully executed counterpart of this Agreement, (ii) a certificate or certificates for the Shares being purchased, registered in the name of the Purchaser or uncertificated shares by registering such shares in the Company’s books and records as book-entry shares and take all action necessary to provide Purchaser with evidence of the uncertificated book-entry shares and (iii) if the subscription has been accepted only in part, a refund of the Funds submitted for Shares not purchased. Simultaneously with the delivery or mailing of the foregoing, the Funds deposited in payment for the Shares purchased will be released to the Company. If any such subscription is rejected by the Company, the Company will promptly return, without interest, the Funds submitted with such subscription to the subscriber.

  

 
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4. Representations, Warranties and Covenants of the Purchaser. The Purchaser represents, warrants and agrees as follows:

 

  a) Prior to making the decision to enter into this Agreement and invest in the Shares subscribed, the Purchaser has received the Offering Circular. The Purchaser acknowledges that the Purchaser has not been given any information or representations concerning the Company or the Offering, other than as set forth in the Offering Statement, and if given or made, such information or representations have not been relied upon by the Purchaser in deciding to invest in the Shares subscribed.
     
  b) The Purchaser has such knowledge and experience in financial and business matters that the Purchaser is capable of evaluating the merits and risks of the investment in the Shares subscribed and the Purchaser believes that the Purchaser’s prior investment experience and knowledge of investments in low-priced securities (“penny stocks”) enables the Purchaser to make an informal decision with respect to an investment in the Shares subscribed.
     
  c) The Shares subscribed are being acquired for the Purchaser’s own account and for the purposes of investment and not with a view to, or for the sale in connection with, the distribution thereof, nor with any present intention of distributing or selling any such Shares.
     
  d) The Purchaser’s overall commitment to investments is not disproportionate to his/her net worth, and his/her investment in the Shares subscribed will not cause such overall commitment to become excessive.
     
  e) The Purchaser reiterates that he meets the standards set forth in the Offering Circular and, more specifically, the Purchaser has adequate means of providing for his/her current needs and personal contingencies, and has no need for current income or liquidity in his/her investment in the Shares subscribed.
     
  f) With respect to the tax aspects of the investment, the Purchaser will rely upon the advice of the Purchaser’s own tax advisors.
     
  g) The Purchaser can withstand the loss of the Purchaser’s entire investment without suffering serious financial difficulties.
     
  h) The Purchaser is aware that this investment involves a high degree of risk and that it is possible that his/her entire investment will be lost.
     
  i) The Purchaser is a resident of the State set forth below the signature of the Purchaser on the last age of this Agreement.
     
  j) The Purchaser confirms that he understands that, unless a subscription is rejected, the funds will automatically be retained by the Company per the terms of the Offering Circular.

 

5. Notices. All notices, request, consents and other communications required or permitted hereunder shall be in writing and shall be delivered, or mailed first class, postage prepaid, registered or certified mail, return receipt requested:

 

  a) If to any holder of any of the Shares, addressed to such holder at the holder’s last address appearing on the books of the Company, or

 

 
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  b) If to the Company, addressed to the Company at 16950 North Bay Road, Sunny Isles Beach, Florida 33160 or such other address as the Company may specify by written notice to the Purchaser, and such notices or other communications shall for all purposes of this Agreement be treated as being effective on delivery, if delivered personally or, if sent by mail, on the earlier of actual receipt or the third postal business day after the same has been deposited in a regularly maintained receptacle for the deposit of United States’ mail, addressed and postage prepaid as aforesaid.

 

6. Severability. If any provision of this Subscription Agreement is determined to be invalid or unenforceable under any applicable law, then such provision shall be deemed inoperative to the extent that it may conflict with such applicable law and shall be deemed modified to conform with such law. Any provision of this Agreement that may be invalid or unenforceable under any applicable law shall not affect the validity or enforceability of any other provision of this Agreement, and to this extent the provisions of this Agreement shall be severable.
   
7. Parties in Interest. This Agreement shall be binding upon and inure to the benefits of and be enforceable against the parties hereto and their respective successors or assigns, provided, however, that the Purchaser may not assign this Agreement or any rights or benefits hereunder.
   
8. Choice of Law. This Agreement is made under the laws of Florida and for all purposes shall be governed by and construed in accordance with the laws of that State, including, without limitation, the validity of this Agreement, the construction of its terms, and the interpretation of the rights and obligations of the parties hereto.
   
9. Headings. Sections and paragraph heading used in this Agreement have been inserted for convenience of reference only, do not constitute a part of this Agreement and shall not affect the construction of this Agreement.
   
10. Execution in Counterparts. This Agreement may be executed an any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which when taken together shall constitute but one and the same instrument.
   
11. Survival of Representations and Warranties. The representations and warranties of the Purchaser in and with respect to this Agreement shall survive the execution and delivery of this Agreement, any investigation at any time made by or on behalf of any Purchaser, and the sale and purchase of the Shares and payment therefore.
   
12. No Incidental, Consequential, Punitive or Special Damages. In no event shall any party be liable for any incidental, consequential, punitive or special damages by reason of its breach of this Agreement. The liability, if any, of the Company and its Managers, Directors, Officers, Employees, Agents, Representatives and Employees to the undersigned under this Agreement for claims, costs, damages and expenses of any nature for which they are or may be legally liable, whether arising in negligence or other tort, contract, or otherwise shall not exceed, in the aggregate the undersigned’s investment amount.

 

 
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13. Additional Information. The Purchaser realizes that the Shares are offered hereby pursuant to exemptions from registration provided by Regulation A and the Securities Act of 1933. The shares may be offered to residents of as many as all 50 states through registered broker-dealer(s)/Selling Agent(s) and any affiliated broker groups to assist in the placement of its securities on a best efforts basis. Depending on the agreement(s) with the respective Selling Agent and affiliated group, the brokerage commissions payable will range from __% to ___% of the Purchase Price for a given investor

 

IN WITNESSES WHEREOF, the parties hereto have executed this Subscription Agreement on ________, ____, 2021.

 

Elektros, Inc.

 

By: _____________________________________________

Levi Jacobson, Chief Executive Officer

 

PURCHASER:

 

_____________________________________________

Signature of Purchaser

 

_____________________________________________

Name of Purchaser

 

______________________________________________

Phone Number of Purchaser

 

______________________________________________

Email of Purchaser

 

 

5

 

 


SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of August 4, 2021, by and between ELEKTROS, INC., a Nevada corporation, with headquarters located at 16950 North Bay Road, Suite 1803, Sunny Isles Beach, FL 33160 (the “Company”) and GS CAPITAL PARTNERS, LLC, with its address at 30 Washington Street, Suite 5L, Brooklyn, NY 11201, (the “Buyer”).

 

WHEREAS:

 

A.                The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”);

 

B.                 Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement a 10% convertible note of the Company, in the form attached hereto as Exhibit A in the aggregate principal amount of $115,000.00 (together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, the “Note”), convertible into shares of common stock, of the Company (the “Common Stock”), upon the terms and subject to the limitations and conditions set forth in such Note. The Note shall contain an original issue discount of $10,000.00 such that the purchase price of the Note shall be $105,000.00.

 

 

C.                 The Buyer wishes to purchase, upon the terms and conditions stated in this Agreement, such principal amount of Note as is set forth immediately below its name on the signature pages hereto; and

 

NOW THEREFORE, the Company and the Buyer severally (and not jointly) hereby agree as follows:

 

1.Purchase and Sale of Note.

 

a.                   Purchase of Note. On the Closing Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees to purchase from the Company such principal amount of Note as is set forth immediately below the Buyer’s name on the signature pages hereto.

 

 

 

 

Company Initials

 
 

b.                  Form of Payment. On the Closing Date (as defined below), the Buyer shall pay the purchase price for the Note to be issued and sold to it at the Closing (as defined below) (the “Purchase Price”) by wire transfer of immediately available funds to the Company, in accordance with the Company’s written wiring instructions, against delivery of the Note in the principal amount equal to the Purchase Price as is set forth immediately below the Buyer’s name on the signature pages hereto, and the Company shall deliver such duly executed Note on behalf of the Company, to the Buyer, against delivery of such Purchase Price.

 

c.                   Closing Date. The date and time of the first issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall be on or about August 4, 2021, or such other mutually agreed upon time. The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date at such location as may be agreed to by the parties.

 

 

2.                  Buyer’s Representations and Warranties. The Buyer represents and warrants to the Company that:

 

a.                   Investment Purpose. As of the date hereof, the Buyer is purchasing the Note and the shares of Common Stock issuable upon conversion of or otherwise pursuant to the Note, such shares of Common Stock being collectively referred to herein as the “Conversion Shares” and, collectively with the Note, the “Securities”) for its own account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act; provided, however, that by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption under the 1933 Act.

 

b.                  Accredited Investor Status. The Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”). Any of Buyer’s transferees, assignees, or purchasers must be “accredited investors” in order to qualify as prospective transferees, permitted assignees in the case of Buyer’s or Holder’s transfer, assignment or sale of the Note.

 

c.                   Reliance on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the

 
 

Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Securities.

 

d.                  Information. The Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue to be, furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by the Buyer or its advisors. The Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue to be, afforded the opportunity to ask questions of the Company. Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material nonpublic information and will not disclose such information unless such information is disclosed to the public prior to or promptly following such disclosure to the Buyer. Neither such inquiries nor any other due diligence investigation conducted by Buyer or any of its advisors or representatives shall modify, amend or affect Buyer’s right to rely on the Company’s representations and warranties contained in Section 3 below. The Buyer understands that its investment in the Securities involves a significant degree of risk. The Buyer is not aware of any facts that may constitute a breach of any of the Company's representations and warranties made herein.

 

e.                   Governmental Review. The Buyer understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Securities.

 

f.                    Transfer or Re-sale. The Buyer understands that the sale or re-sale of the Securities has not been and is not being registered under the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless the Securities are sold pursuant to an effective registration statement under the 1933 Act, in the case of subparagraphs (c), (d) and (e) below, the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in comparable transactions to the effect that the Securities to be sold or transferred may be sold, or transferred pursuant to an exemption from such registration, including the removal of any restrictive legend which opinion shall be accepted by the Company, the Securities are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”) of the Buyer who agrees to sell or otherwise transfer the Securities only in accordance with this Section 2(f) and who is an Accredited Investor, the Securities are sold pursuant to Rule 144, or the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor rule) (“Regulation S”); (ii) any sale of such Securities made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with

 
 

some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other person is under any obligation to register such Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder (in each case). Notwithstanding the foregoing or anything else contained herein to the contrary, the Securities may be pledged as collateral in connection with a bona fide margin account or other lending arrangement.

 

g.                  Legends. The Buyer understands that the Note and, until such time as the Conversion Shares have been registered under the 1933 Act will be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, the Conversion Shares may bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of the certificates for such Securities):

 

 

“NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THESE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

 

The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, and (b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act, and that legend removal is appropriate, which opinion shall be accepted by the Company so that the sale or transfer is effected. The Buyer agrees to sell all Securities, including those represented by a certificate(s) from which the legend has been

 
 

removed, in compliance with applicable prospectus delivery requirements, if any. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S, within 2 business days, it will be considered an Event of Default under the Note.

 

h.                  Authorization; Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed and delivered on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in accordance with its terms.

 

i.                    Residency. The Buyer is a resident of the jurisdiction set forth immediately below the Buyer’s name on the signature pages hereto.

 

 

j.                    No Short Sales. Buyer/Holder, its successors and assigns, agree that so long as the Note remains outstanding, neither the Buyer/Holder nor any of its affiliates shall not enter into or effect “short sales” of the Common Stock or hedging transaction which establishes a short position with respect to the Common Stock of the Company. The Company acknowledges and agrees that upon delivery of a Conversion Notice by the Buyer/Holder, the Buyer/Holder immediately owns the shares of Common Stock described in the Conversion Notice and any sale of those shares issuable under such Conversion Notice would not be considered short sales.

 

 

3.                  Representations and Warranties of the Company. The Company represents and warrants to the Buyer that:

 

a.                   Organization and Qualification. The Company and each of its subsidiaries, if any, is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted.

 

b.                  Authorization; Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement, the Note and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Note by the Company and the consummation by it of the transactions contemplated hereby and thereby (including without limitation, the issuance of the Note and the issuance and reservation for issuance of the Conversion Shares issuable upon conversion or exercise thereof) have been duly authorized by the Company’s Board of Directors and no further consent or authorization of the Company, its Board of Directors, or its shareholders is required, (iii) this Agreement has been duly executed and delivered

 
 

by the Company by its authorized representative, and such authorized representative is the true and official representative with authority to sign this Agreement and the other documents executed in connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution and delivery by the Company of the Note, each of such instruments will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms.

 

 

c.                   Issuance of Shares. The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the Note in accordance with its respective terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof.

 

d.                  Acknowledgment of Dilution. The Company understands and acknowledges the potentially dilutive effect to the Common Stock upon the issuance of the Conversion Shares upon conversion of the Note. The Company further acknowledges that its obligation to issue Conversion Shares upon conversion of the Note in accordance with this Agreement, the Note is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.

 

e.                   No Conflicts. The execution, delivery and performance of this Agreement, the Note by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation for issuance of the Conversion Shares) will not (i) conflict with or result in a violation of any provision of the Certificate of Incorporation or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and regulations of any self-regulatory organizations to which the Company or its securities are subject) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect). All consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof. The Company is not in violation of the listing requirements of

 
 

the OTC Markets Exchange (the “OTC MARKETS”) and does not reasonably anticipate that the Common Stock will be delisted by the OTC MARKETS in the foreseeable future, nor are the Company’s securities “chilled” by FINRA. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

 

f.                    Absence of Litigation. Except as disclosed in the Company’s Periodic Report filings with the SEC, there is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its subsidiaries, threatened against or affecting the Company or any of its subsidiaries, or their officers or directors in their capacity as such, that could have a material adverse effect. Schedule 3(f) contains a complete list and summary description of any pending or, to the knowledge of the Company, threatened proceeding against or affecting the Company or any of its subsidiaries, without regard to whether it would have a material adverse effect. The Company and its subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

 

g.                  Acknowledgment Regarding Buyer’ Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting solely in the capacity of arm’s length purchasers with respect to this Agreement and the transactions contemplated hereby. The Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any statement made by the Buyer or any of its respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation and is merely incidental to the Buyer’ purchase of the Securities. The Company further represents to the Buyer that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation of the Company and its representatives.

 

h.                  No Integrated Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the 1933 Act of the issuance of the Securities to the Buyer.

 

i.                    Title to Property. The Company and its subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them which is material to the business of the Company and its subsidiaries, in each case free and clear of all liens, encumbrances and defects except such as are described in Schedule 3(i) or such as would not have a material adverse effect. Any real property and facilities held under lease by the Company and its

 
 

subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as would not have a material adverse effect.

 

j.                    Bad Actor. No officer or director of the Company would be disqualified under Rule 506(d) of the Securities Act as amended on the basis of being a "bad actor" as that term is established in the September 19, 2013 Small Entity Compliance Guide published by the Securities and Exchange Commission.

 

 

k.                  Breach of Representations and Warranties by the Company. If the Company breaches any of the representations or warranties set forth in this Section 3, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an Event of default under the Note.

 

4.COVENANTS.

 

a.                   Expenses. At the Closing, the Company shall reimburse Buyer for expenses incurred by them in connection with the negotiation, preparation, execution, delivery and performance of this Agreement and the other agreements to be executed in connection herewith (“Documents”), including, without limitation, reasonable attorneys’ and consultants’ fees and expenses, transfer agent fees, fees for stock quotation services, fees relating to any amendments or modifications of the Documents or any consents or waivers of provisions in the Documents, fees for the preparation of opinions of counsel, escrow fees, and costs of restructuring the transactions contemplated by the Documents. When possible, the Company must pay these fees directly, otherwise the Company must make immediate payment for reimbursement to the Buyer for all fees and expenses immediately upon written notice by the Buyer or the submission of an invoice by the Buyer.

 

b.                  Listing. The Company shall promptly secure the listing of the Conversion Shares upon each national securities exchange or automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and, so long as the Buyer owns any of the Note Securities, shall maintain, so long as any other shares of Common Stock shall be so listed, such listing of all Conversion Shares from time to time issuable upon conversion of the Note. The Company will obtain and, so long as the Buyer owns any of the Securities, maintain the listing and trading of its Common Stock on the OTC MARKETS or any equivalent replacement market, the Nasdaq stock market (“Nasdaq”), or the New York Stock Exchange (“NYSE”) and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Financial Industry Regulatory Authority (“FINRA”) and such exchanges, as applicable. The Company shall promptly provide to the Buyer copies of any notices it receives from the OTC MARKETS and any

 
 

other markets on which the Common Stock is then listed regarding the continued eligibility of the Common Stock for listing on such markets.

 

c.                   Corporate Existence. So long as the Buyer beneficially owns the Note, the Company shall maintain its corporate existence and shall not sell all or substantially all of the Company’s assets, except in the event of a merger or consolidation or sale of all or substantially all of the Company’s assets, where the surviving or successor entity in such transaction (i) assumes the Company’s obligations hereunder and under the agreements and instruments entered into in connection herewith and (ii) is a publicly traded corporation whose Common Stock is listed for trading on the OTC MARKETS, Nasdaq or NYSE.

 

d.                  No Integration. The Company shall not make any offers or sales of any security (other than the Securities) under circumstances that would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of the Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval provision applicable to the Company or its securities.

 

 

e.                   Commitment Shares.  The Company shall issue the Buyer a total of 300,000 commitment shares as additional consideration for the purchase of the Note.

 

 

f.                    Breach of Covenants. If the Company breaches any of the covenants set forth in this Section 4, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an event of default under the Note.

 

5.Governing Law; Miscellaneous.

 

a.                   Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of New York or in the federal courts located in the state and county of New York. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Company and Buyer waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision

 
 

shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

b.                  Counterparts; Signatures by Facsimile. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

 

c.                   Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.

 

d.                  Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

 

e.                   Entire Agreement; Amendments. This Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the majority in interest of the Buyer.

 

f.                    Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by

 
 

reputable air courier service with charges prepaid, (iv) via electronic mail or (v) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received) or delivery via electronic mail, or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

 

If to the Company, to: ELEKTROS INC.

16950 North Bay Road, Suite 1803 Sunny Isles Beach, FL 33160

Attn: Shlomo Bleier, President

 

If to the Buyer:

GS CAPITAL PARTNERS, LLC

30 Washington Street, Suite 5L Brooklyn, NY 11201

Attn: Gabe Sayegh

 

Each party shall provide notice to the other party of any change in address.

 

g.                  Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other. Notwithstanding the foregoing, the Buyer may assign its rights hereunder to any “qualified person”, any “permitted assigns”, or “prospective transferee” that acquires or purchases Note Securities in a private transaction from the Buyer or to any of its “affiliates,” as that term is defined under the 1934 Act, without the consent of the Company with Buyer’s Opinion of Counsel. A qualified person is an “accredited investor” transferee, assignee, or purchaser of the Note who succeeds to the Holder’s right, title and interest to all or a portion of the Note accompanied with an Opinion of Counsel as provided for in Section 2(f).

 
 

h.                  Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

i.                    Survival. The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Buyer. The Company agrees to indemnify and hold harmless the Buyer and all their officers, directors, employees and agents for loss or damage arising as a result of or related to any breach or alleged breach by the Company of any of its representations, warranties and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.

 

j.                    Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

k.                  No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

 

l.                    Remedies. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Agreement, that the Buyer shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond or other security being required.

 
 

IN WITNESS WHEREOF, the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.

 

ELEKTROS INC.

 

By: /s/ Shlomo Bleier

Name: Shlomo Bleier

Title: President

 

 

GS CAPITAL PARTNERS, LLC.

 

By:

Name: [****]

Title: Manager

 

 

AGGREGATE SUBSCRIPTION AMOUNT: $115,000.00

 

Aggregate Principal Amount of Note:

 

Aggregate Purchase Price:

 

Note: $115,000.00 less $10,000.00 in original issue discount, less $5,000.00 in legal fees.

 
 

 

 

 

 

 

 

EXHIBIT A

144 NOTE - $115,000.00

THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE "1933 ACT")

 

US $115,000.00

 

 

ELEKTROS INC.

10% CONVERTIBLE REDEEMABLE NOTE DUE AUGUST 4, 2022

 

 

FOR VALUE RECEIVED, ELEKTROS INC. (the "Company") promises to pay to the order of GS CAPITAL PARTNERS, LLC and its authorized successors and Permitted Assigns, defined below, ("Holder"), the aggregate principal face amount One Hundred Fifteen Thousand Dollars exactly (U.S. $115,000.00) on August 4, 2022 ("Maturity Date") and to pay interest on the principal amount outstanding hereunder at the rate of 10% per annum commencing on August 4, 2021 ("Issuance Date"). The Company acknowledges this Note was issued with a $10,000.00 original issue discount and as such the purchase price was $105,000.00. The interest will be paid to the Holder in whose name this Note is registered on the records of the Company regarding registration and transfers of this Note. The principal of, and interest on, this Note are payable at 30 Washington Street, Suite SL, Brooklyn, NY 11201, initially, and if changed, last appearing on the records of the Company as designated in writing by the Holder hereof from time to time. The Company will pay each interest payment and the outstanding principal due upon this Note before or on the Maturity Date, less any amounts required by law to be deducted or withheld, to the Holder of this Note by check or wire transfer addressed to such Holder at the last address appearing on the records of the Company. The forwarding of such check or wire transfer shall constitute a payment of outstanding principal hereunder and shall satisfy and discharge the liability for principal on this Note to the extent of the sum represented by such check or wire transfer. Interest shall be payable in Common Stock (as defined below) pursuant to paragraph 4(b) herein. Permitted Assigns means any Holder assignment, transfer or sale of all or a portion of this Note accompanied by an Opinion of Counsel as provided for in Section 2(f) of the Securities Purchase Agreement.

 

This Note is subject to the following additional provisions:

 

1.                  This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be made for such registration or transfer or exchange, except that Holder shall pay any tax or other governmental charges payable in connection therewith. To the extent that Holder subsequently transfers, assigns, sells or exchanges any of the multiple lesser denomination notes, Holder acknowledges that it will provide the Company with Opinions of Counsel as provided for in Section 2(f) of the Securities Purchase Agreement.

 

2.                   The Company shall be entitled to withhold from all payments any amounts required to be withheld under applicable laws.

 

3.                   This Note may be transferred or exchanged only in compliance with the Securities Act of 1933, as amended ("Act") and applicable state securities laws. Any attempted transfer to a non-qualifying party shall be treated by the Company as void. Prior to due presentment for transfer of this Note, the Company and any agent of the Company may treat the person in whose name this Note is duly registered on the Company's records as the owner hereof for all other purposes, whether or not this Note be overdue, and neither the Company nor any such agent shall be affected or bound by notice to the contrary. Any Holder of this Note electing to exercise the right of conversion set forth in Section 4(a) hereof, in addition to the requirements set forth in Section 4(a), and any prequalified prospective transferee of this Note, also is required to give the Company written confirmation that this Note is being converted ("Notice of Conversion") in the form annexed hereto as Exhibit A. The date of receipt (including receipt by telecopy) of such Notice of Conversion shall be the Conversion Date. All notices of conversion will be accompanied by an Opinion of Counsel.

 

4.                   (a) The Holder of this Note is entitled, at its option, at any time after cash payment, to convert all or any amount of the principal face amount of this Note then outstanding into shares of the Company's common stock (the "Common Stock") at a price for each share of Common Stock equal to 60% of the lowest trading price of the Common Stock as reported on the National Quotations Bureau OTC Marketplace exchange which the Company's shares are traded or any exchange upon which the Common Stock may be traded in the future ("Exchange"), for the twenty prior trading days including the day upon which a Notice of Conversion is received by the Company or its transfer agent (provided such Notice of Conversion is delivered by fax or other electronic method of communication to the Company or its transfer agent after 4 P.M. Eastern Standard or Daylight Savings Time if the Holder wishes to include the same day closing price). If the shares have not been delivered within 3 business days, the Notice of Conversion may be rescinded. Such conversion shall be effectuated by the Company delivering the shares of Common Stock to the Holder within 3 business days of receipt by the Company of the Notice of Conversion. Accrued but unpaid interest shall be subject to conversion. No fractional shares or scrip representing fractions of shares will be issued on conversion, but the number of shares issuable shall be rounded to the nearest whole share. To the extent the Conversion Price of the Company's Common Stock closes below the par value per share, the Company will take all steps necessary to solicit the consent of the stockholders to reduce the par value to the lowest value possible under law. The Company agrees to honor all conversions submitted pending this increase. In the event the Company experiences a DTC "Chill" on its shares, the Conversion Price shall be decreased to 50% instead of 60% while that "Chill" is in effect. In no event shall the Holder be allowed to effect a conversion if such conversion, along with all other shares of Company Common Stock beneficially owned by the Holder and its affiliates would exceed 4.99% of the outstanding shares of the Common Stock of the Company (which may be increased up to 9.9% upon 60 days' prior written notice by the Investor). The conversion discount, look back period and other terms will be adjusted on a ratchet basis if the Company offers a more favorable conversion discount, prepayment rate, interest rate, (whether through a straight discount or in combination with an original issue discount), look back period or other more favorable term to another party for any financings while this Note is in effect, including but not limited to defaults, penalties and the remedy for such defaults or penalties.

 

 

(b) Interest on any unpaid principal balance of this Note shall be paid at the rate of 10% per annum. Interest shall be paid by the Company in Common Stock ("Interest Shares"). Holder may, at any time, send in a Notice of Conversion to the Company for Interest Shares based on the formula provided in Section 4(a) above. The dollar amount converted into Interest Shares shall be all or a portion of the accrued interest calculated on the unpaid principal balance of this Note to the date of such notice.

 

(c) The Notes may be prepaid or assigned with the following penalties/premiums:

PREPAY DATE PREPAY AMOUNT
< 60 DAYS 110 % of principal plus accrued interest
61-120 days 125% of principal plus accrued interest
121-180 days 135% of principal plus accrued interest

 

This Note may not be prepaid after the 180th day. Such redemption must be closed and funded within 3 days of giving notice of redemption of the right to redeem shall be null and void. Any partial prepayments will be made in accordance with the formula set forth in the chart above with respect to principal, premium and interest.

 

(d)                Upon (i) a transfer of all or substantially all of the assets of the Company to any person in a single transaction or series of related transactions, (ii) a reclassification, capital reorganization (excluding an increase in authorized capital) or other change or exchange of outstanding shares of the Common Stock, other than a forward or reverse stock split or stock dividend, or (iii) any consolidation or merger of the Company with or into another person or entity in which the Company is not the surviving entity (other than a merger which is effected solely to change the jurisdiction of incorporation of the Company and results in a reclassification, conversion or exchange of outstanding shares of Common Stock solely into shares of Common Stock) (each of items (i), (ii) and (iii) being referred to as a "Sale Event"), then, in each case, the Company shall, upon request of the Holder, redeem this Note in cash for 150% of the principal amount, plus accrued but unpaid interest through the date of redemption, or at the election of the Holder, such Holder may convert the unpaid principal amount of this Note (together with the amount of accrued but unpaid interest) into shares of Common Stock immediately prior to such Sale Event at the Conversion Price.

 

 

(e)                In case of any Sale Event (not to include a sale of all or substantially all of the Company's assets) in connection with which this Note is not redeemed or converted, the Company shall cause effective provision to be made so that the Holder of this Note shall have the right thereafter, by converting this Note, to purchase or convert this Note into the kind and number of shares of stock or other securities or property (including cash) receivable upon such reclassification, capital reorganization or other change, consolidation or merger by a holder of the number of shares of Common Stock that could have been purchased upon exercise of the Note and at the same Conversion Price, as defined in this Note, immediately prior to such Sale Event. The foregoing provisions shall similarly apply to successive Sale Events. If the consideration received by the holders of Common Stock is other than cash, the value shall be as determined by the Board of Directors of the Company or successor person or entity acting in good faith.

 

5.                   No provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and interest on, this Note at the time, place, and rate, and in the form, herein prescribed.

 

6.                   The Company hereby expressly waives demand and presentment for payment, notice of non-payment, protest, notice of protest, notice of dishonor, notice of acceleration or intent to accelerate, and diligence in taking any action to collect amounts called for hereunder and shall be directly and primarily liable for the payment of all sums owing and to be owing hereto.

 

7.                   The Company agrees to pay all costs and expenses, including reasonable attorneys' fees and expenses, which may be incurred by the Holder in collecting any amount due under this Note.

 

8.If one or more of the following described "Events of Default" shall occur:

 

(a)               The Company shall default in the payment of principal or interest on this Note or any other note issued to the Holder by the Company; or

 

(b)               Any of the representations or warranties made by the Company herein or in any agreement entered into by the Company in connection with the execution and delivery of this Note, shall be false or misleading in any respect; or

 

(c)               The Company shall fail to perform or observe, in any respect, any covenant, term, provision, condition, agreement or obligation of the Company under this Note or any other note issued to the Holder; or

 

(d)               The Company shall (1) become insolvent (which does not include a "going concern opinion); (2) admit in writing its inability to pay its debts generally as they mature; (3) make an assignment for the benefit of creditors or commence proceedings for its dissolution; (4) apply for or consent to the appointment of a trustee, liquidator or receiver for its or for a substantial part of its property or business; (5) file a petition for bankruptcy relief,

 

consent to the filing of such pet1t1on or have filed against it an involuntary petition for bankruptcy relief, all under federal or state laws as applicable; or

 

(e)               A trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without its consent and shall not be discharged within sixty (60) days after such appointment; or

 

(f)                Any governmental agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody or control of the whole or any substantial portion of the properties or assets of the Company; or

 

(g)               One or more money judgments, writs or warrants of attachment, or similar process, in excess of fifty thousand dollars ($50,000) in the aggregate, shall be entered or filed against the Company or any of its properties or other assets and shall remain unpaid, unvacated, unbonded or unstayed for a period of fifteen (15) days or in any event later than five (5) days prior to the date of any proposed sale thereunder; or

 

(h)              Defaulted on or breached any term of any other purchase agreement or note or similar debt instrument into which the Company has entered and failed to cure such default within the appropriate grace period; or

 

(i)                The Company shall have its Common Stock delisted from an exchange (including the OTC Markets exchange) or, if the Common Stock trades on an exchange, then trading in the Common Stock shall be suspended for more than 10 consecutive days or ceases to file its 1934 act reports with the SEC;

 

G) If a majority of the members of the Board of Directors of the Company on the date hereof are no longer serving as members of the Board;

 

(k)               The Company shall not deliver to the Holder the Common Stock pursuant to paragraph 4 herein without restrictive legend within 3 business days of its receipt of a Notice of Conversion which includes an Opinion of Counsel expressing an opinion which supports the removal of a restrictive legend; or

 

(I)                  The Company shall not replenish the reserve set forth in Section 12, within 3 business days of the request of the Holder.

 

(m)            The Company shall be delinquent in its periodic report filings with the Securities and Exchange Commission; or

 

(n)                The Company shall cause to lose the "bid" price for its stock in a market (including the OTC marketplace or other exchange).

 

Then, or at any time thereafter, unless cured within 5 days, and in each and every such case, unless such Event of Default shall have been waived in writing by the Holder (which waiver shall not be deemed to be a waiver of any subsequent default) at the option of the Holder and in the Holder's sole discretion, the Holder may consider this Note immediately due and payable, without presentment, demand, protest or (further) notice of any kind (other than notice of acceleration), all of which are hereby expressly waived, anything herein or in any note or other instruments contained to the contrary notwithstanding, and the Holder may immediately, and without expiration of any period of grace, enforce any and all of the Holder's rights and remedies provided herein or any other rights or remedies afforded by law. Upon an Event of Default, interest shall accrue at a default interest rate of 24% per annum or, if such rate is usurious or not permitted by current law, then at the highest rate of interest permitted by law. In the event of a breach of Section 8(k) the penalty shall be $250 per day the shares are not issued beginning on the 4th day after the conversion notice was delivered to the Company. This penalty shall increase to $500 per day beginning on the 10 thday.

In an event of a breach of Section 8(h) the Holder may elect to utilize the same remedy available under the defaulted interest and such remedy shall be incorporated by reference into the terms of this Note. The penalty for a breach of Section 8(n) shall be an increase of the outstanding principal amounts by 20%. Further, if a breach of Section 8(m) occurs or is continuing after the 6 month anniversary of the Note, then the Holder shall be entitled to use the lowest closing bid price during the delinquency period as a base price for the conversion. For example, if the lowest closing bid price during the delinquency period is $0.01 per share and the conversion discount is 50% the Holder may elect to convert future conversions at $0.005 per share.

 

If the Holder shall commence an action or proceeding to enforce any provisions of this Note, including, without limitation, engaging an attorney, then if the Holder prevails in such action, the Holder shall be reimbursed by the Company for its attorneys' fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

 

 

The Company must pay the Failure to Deliver Loss by cash payment, and any such cash payment must be made by the third business day from the time of the Holder's written notice to the Company.

 

9.                   In case any provision of this Note is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable, such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and the validity and enforceability of the remaining provisions of this Note will not in any way be affected or impaired thereby.

 

10.                Neither this Note nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the Company and the Holder.

 

11.                 The Company represents that it is not a "shell" issuer and has never been a "shell" issuer or that if it previously has been a "shell" issuer that at least 12 months have passed since the Company has reported form 10 type information indicating it is no longer a "shell" issuer. Further. The Company will instruct its counsel to either (i) write a 144 opinion to allow for salability of the conversion shares or (ii) accept such opinion from Holder's counsel.

 

12.             The Company shall issue irrevocable transfer agent instructions reserving 3,066,000 shares of its Common Stock for conversions under this Note (the "Share Reserve"). Upon full conversion of this Note, any shares remaining in the Share Reserve shall be cancelled. The Company shall pay all transfer agent costs and legal fees associated with issuing and delivering the share certificates to Holder. If such amounts are to be paid by the Holder, it may deduct such amounts from the Conversion Price. The Company should at all times reserve a minimum of four times the amount of shares required if the note would be fully converted. The Holder may reasonably request increases from time to time to reserve such amounts. The Company will instruct its transfer agent to provide the outstanding share information to the Holder in connection with its conversions.

 

13.               The Company will give the Holder direct notice of any corporate actions, including but not limited to name changes, stock splits, recapitalizations etc. This notice shall be given to the Holder as soon as possible under law.

 

14.               If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable provision shall automatically be revised to equal the maximum rate of interest or other amount deemed interest permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that it will not seek to claim or take advantage of any law that would prohibit or forgive the Company from paying all or a portion of the principal or interest on this Note.

 

15.               This Note shall be governed by and construed in accordance with the laws of New York applicable to contracts made and wholly to be performed within the State of New York and shall be binding upon the successors and assigns of each party hereto. The Holder and the Company hereby mutually waive trial by jury and consent to exclusive jurisdiction and venue in the courts of the State of New York or in the Federal courts sitting in the county or city of New York. This Agreement may be executed in counterparts, and the facsimile transmission of an executed counterpart to this Agreement shall be effective as an original.

 

 

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by an officer thereunto duly authorized.

 

 

Dated: August 5, 2021

 

 

 

ELEKTROS INC.

 

By: /s / Shlomo Bleier

  Title: President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

••SEGULA

                      TECHNOLOGIES

 

 

COMMERCIAL PROPOSAL

 

 

Elektros

REFERENCE : Elektros BEV Page 1 sur 8

 

In response to: Elektros request to develop new BEV

Rev. : initial offer
Rev. date : Feb 23, 2021

 

 

Phase 1 : BEV Development Road-map

 

 

In response to Elektros request to develop new BEV

 

 

Rev. Date Ref. SEGULA Ref. Client Revision memo

Issued by

/name I title)

Initial Feb 25, 2021      

M. Bruckman

          CEO
           

 

 

IOffer period I Valid for 30 days

 

 

••SEGULA

                      TECHNOLOGIES

 

 

COMMERCIAL PROPOSAL

 

 

Elektros

REFERENCE : Elektros BEV Page 2 sur 8

 

In response to: Elektros request to develop new BEV

Rev. : initial offer
Rev. date : Feb 23, 2021

 

SUMMARY

 

1. PURPOSE ....,,,,..,............................................................................................................................

2. CARRYING OUT THE SERVICES ..................................................................................................

2.1. Scope of work .................................................................................................................. .

2.2. Input data ..........................................................................................................................

2.3. Output data/ Deliverables .................................................................................................

2.4. Supervision of the services................................................................................................

2.5. Places where the services will be provided........................................................................

2.6. Time schedule.................................................................................................................. .

2.7. Client's contact person ......................................................................................................

3. FINANCIAL CONDITIONS ..............................................................................................................

3.1. Price..................................................................................................................................

3.2. Payment terms ..................................................................................................................

4. MODIFICATION OF SERVICES......................................................................................................

5. FINAL PROVISIONS .......................................................................................................................

5.1. Offer period .......................................................................................................................

5.2. General terms and conditions applicability .........................................................................

Annexe 1. SEGULA's General Terms and Conditions ....................................................................

 

••SEGULA

                      TECHNOLOGIES

 

 

COMMERCIAL PROPOSAL

 

 

Elektros

REFERENCE : Elektros BEV Page 3 sur 8

 

In response to: Elektros request to develop new BEV

Rev. : initial offer
Rev. date : Feb 23, 2021

1. PURPOSE

Elektros wants to develop and market a new Battery Electric Vehicle starting from a 'blank piece of paper'; Segula Technologies will create a high level vehicle development road-map for Elektros and will work to identify companies with a developed EV Chassis - which can be used to jump-start the vehicle development process by Elektros

 

2. CARRYING OUT THE SERVICES

 

2.1. Scope of work

 

Develop BEV development road-map

Identify to the best of our ability the following items:

FMVSS I EPA I NHTSA Requirements to sell BEV in US Market Summarize key vehicle attributes needed to have viable product

oBattery Range, Speed I Power Levels

o       Competition in Market - other EV products and companies Typical Funding Process

Potential budget required to bring BEV to market

Coordination with Technicon Design team on styling and design attributes Develop list of potential companies to support low volume production

 

2.2. Input data

 

Input data to be developed jointly with Elektros team

Annual vehicle volume

Confirm Market Segment - Passenger Car, Delivery Vehicle, etc

 

2.3. Output data / deliverables

 

'See section 2.1 - this includes both Scope of Work and potential deliverables

 

2.4. Supervision of the services

 

Segula Technologies will assign Project Lead in US to coordinate development of the deliverables identified with support of teams in France and Germany

-It is estimated the project will require approx. 304 hrs of time - split between the different groups of Segula
-Hours will be tracked and reported on weekly basis

 

 

2.5. Places where the services will be provided

 

There will be several locations contributing to the development of this road-map between US and Europe - the project lead is working out of Plymouth offices.

 

 

••SEGULA

                      TECHNOLOGIES

 

 

COMMERCIAL PROPOSAL

 

 

Elektros

REFERENCE : Elektros BEV Page 4 sur 8

 

In response to: Elektros request to develop new BEV

Rev. : initial offer
Rev. date : Feb 23, 2021

2.6. Services time schedule

 

Based on finalized contract and confirmation of first payment - work will begin; goal will be to develop overall road-map and identified deliverables sooner than the 304 hrs estimate provided.

 

2.7. Client's contact person

 

The technical representative appointed by the client is: Levi Jacobson - specific contact details to be finalized at a later date.

 

 

3. FINANCIAL CONDITIONS

 

3.1.Price

 

As full compensation for the complete performance of the services detailed in Article 2.1. above, the client shall pay SEGULA: $163.00 per hour, total estimate hours to deliver BEV Road-Map as described above is 304 hrs

 

The above-mentioned price is exclusive of taxes, freight charges, VAT, custom duty, taxes and other contributions of any nature whatsoever, at the rate in force at the date of the contract or order which will be borne exclusive of the Client. Any variation in prices after this date is in principle not applicable to ongoing purchase orders.

 

3.2.Payment terms

 

Invoices will be issued by SEGULA in accordance with the following payment schedule

 

Payment in advance of work: Project will be split into payments- first payment of $25,000 is needed in advance of any work starting

 

 

4.MODIFICATION OF THE SERVICES

 

In case of change in the nature or scope of the services after the acceptance of this commercial proposal, SEGULA shall be entitled to modify by additions, deletions or alterations the scope of services, the services time schedule or any other part of the commercial proposal and will issue a change order with a description of the modifications required. Such a change order shall be mutually agreed and signed by the parties.

 

••SEGULA

- TECHNOLOGIES

 

 

COMMERCIAL PROPOSAL

 

 

Elektros

REFERENCE : Elektros BEV Page 5 sur 8

 

In response to : Elektros request to develop new BEV

Rev. : initial offer
Rev. date : Feb 23, 2021

 

5.FINAL PROVISIONS

 

5.2.Offer period

 

This commercial proposal shall be valid for a period of 30 days starting from the date of issuance mentioned on first page. Therefore the commercial proposal will have no effect after the date of expiry of the above-mentioned period.

 

5.3.General terms and conditions applicability

 

The Client declares that he has full knowledge of SEGULA's terms and conditions attached hereto, accepts that the abovementioned terms and conditions govern the services to be provided under this commercial proposal and waives, therefore, to rely on any contradictory document including its own terms and conditions of purchase that will be unenforceable against SEGULA even if attached to or included in a purchase order issued by the Client after the date of this commercial proposal.

 

 

 

 

FOR SEGULA FOR THE CLIENT

 

NAME

 

Mark Bruckman

 

NAME

Levi Jacobson
TITLE CEO / Managing Director Segula Technologies NA TITLE CEO Elektros
DATE March 2, 2021 DATE March 1, 2021

 

 

 

BY

 

 

 

 

BY

/s/ Levi Jacobson

 

 

 

••SEGULA

                      TECHNOLOGIES

 

 

COMMERCIAL PROPOSAL

 

 

Elektros

REFERENCE : Elektros BEV Page 6 sur 8

 

In response to: Elektros request to develop new BEV

Rev. : initial offer
Rev. date : Feb 23, 2021

 

GENERAL TERMS & CONDITIONS OF SALE

 

1-GENERAL TERMS AND CONDITIONS OF SALE APPLICATION

1.1.  These General Terms and Conditions of Sale (the "Terms and Conditions") shall govern the business relationship between SEGULA TECHNOLOGIES SA or any other legal entity belonging to SEGULA Group (collectively referred to as "SEGULA") and any client (the "CUSTOMER"). SEGULA and the CUSTOMER are hereinafter individually referred to as the "Party• or collectively the "Parties·.

1.2.The Terms and Conditions shall apply to any and all offers, orders

or contracts related to the sale and delivery of products, machinery or equipment (the "PRODUCTS") and/or to the provision of services (the 'SERVICES").

1.3. The CUSTOMER expressly agrees to exclude its own general terms and conditions of purchase, even if the latter are mentioned in or reproduced on any CUSTOMER's standard documentation such as purchase orders. The Terms and Conditions may only be amended through a prior and written mutual agreement.

1.4, All terms and conditions other than these Terms and Conditions, are therefore not applicable and shall not be binding on SEGULA.

1.5. Upon placing any Purchase Order, the CUSTOMER will be deemed to have fully agreed to all Terms and Conditions.

 

2- DURATION OF VALIDITY AND ACCEPTANCE OF THE OFFER· ORDERING

2.1.Unless otherwise agreed in writing, the offer submitted by

SEGULA (the "OFFER') shall be valid for a period of thirty (30) days from its date of release.

2.2.The CUSTOMER shall be enUtled to accept the OFFER through placing a Purchase Order to SEGULA.

2.3.  Should CUSTOMER decide to cancel a Purchase Order after its acceptance by SEGULA, for any reason whatsoever except for force majeure, SEGULA, without prejudice to any other right or remedy it may have as per the contract or at law, shall be entitled to (i) keep or receive the agreed down payment, (ii) be reimbursed for all documented and actually incurred costs related to the PRODUCTS and/or SERVICES as far as they exceed the down payment amount, and (iii) be compensated for early cancellation of the Purchase Order though payment by the CUSTOMER of a fixed amount equal to ten percent (10% ) of the total amount of the OFFER.

 

3- DELIVERY CONDITIONS AND DELIVERY TIMES - ACCEPTANCE
3.1.Delivery time

SERVICES and PRODUCTS shall be delivered in accordance with the delivery time set forth either in the OFFER or accepted Purchase Order. Unless otherwise agreed, this delivery time is not a strict deadline and SEGULA shall not be held liable towards the CUSTOMER unless the delay in delivery exceeds a period equal to twice the original delivery time.

3.2.Delivery terms

Unless otherwise expressly agreed in writing by SEGULA, all PRODUCTS are delivered FCA {according to the lncoterms edition 2010 published by the International Chamber of Commerce).

Any claim related to dimensions, weights, quantities, obvious quality defects, or performance shall be raised at the latest eight (8) calendar days after delivery of the PRODUCTS and provided that the CUSTOMER has made written daim with the carriers.

The SERVICES will be delivered to the specific location mentioned in the OFFER or the Purchase Order.

3.3.Acceptance of PRODUCTS

Reservations related to the conformity of the PRODUCTS shall be raised at one time and within a maximum fourteen (14) days period from their date of delivery. PRODUCTS shall be deemed fully and irrevocably accepted if the CUSTOMER does not raise any specific and documented reservation in this time frame.

Reservations shall only be based on objective non-conformity of PRODUCTS to the OFFER, Purchase Order and/or any other technical documents mutually agreed upon by the Parties.

Time schedule to lift reservations will be mutually agreed between the Parties, depending on their volume and criticality, and the Parties will do so on a fair and good faith basis.

The PRODUCTS will be automatically and finally accepted once all listed rese,vations have been lifted. Any additional modification that would be requested by the CUSTOMER will be subject to a contract change.

3.4.Acceptance of SERVICES

Unless otheiwise agreed between the Parties, the SERVICES will be deemed as fully and properly performed, and SEGULA will be entiUed to send its final invoice, once (i) the CUSTOMER has confirmed its acceptance of the SERVICES or has not raised any comment within five (5) days from their delivery and/or, as the case may be, (ii) the final report related to the SERVICES has been delivered to the CUSTOMER.

 

4-PRICES AND PAYMENT CONDITIONS
4.1.Prices

Unless otherwise agreed, prices are quoted in Euros and are fixed and firm if the duration of the Purchase Order is less than one (1) year. If the duration exceeds one (1) year, the Prices will be year1y subject to revision according to the following formula:

P = Po (S/So)

Where:

P is the price after price revision,

Po is the price in force at the effective date,

S is the SYNTEC services index applicable at the date of price revision,

So is the SYNTEC services index in force at the effective date. The prices exclude any customs duties, import taxes, VAT, sales/use tax or similar taxes, withholding taxes relating to PRODUCTS, SERVICES or any payment.

The CUSTOMER shall be responsible for the payment, in addition to the prices, of any customs duties, import taxes, VAT, sales/use tax or similar taxes, withholding taxes relating to PRODUCTS, SERVICES or any payment.

If the contract becomes, independently of the Parties willingness, strongly unbalanced due to a change of economic circumstances through the years, each Party will be entitled to ask for a renegotiation of the Purchase Order, being agreed that the Parties will continue to fulfil their obligations during the renegotiation.

4.2.Payment Conditions

Unless a different payment schedule is agreed between the Parties, invoices shall be issued on a monthly basis, pro rata the actual delivery of PRODUCTS and/or SERVICES and/or the documented and actually incurred costs. The amount of any down payment shall be deducted on a proportional basis from subsequent payments.

Invoices shall be paid by bank transfer within thirty (30) days from their date of release.

SEGULA will be entitled to suspend the delivery of PRODUCTS and SERVICES if the CUSTOMER does not pay any invoice in accordance with agreed conditions.

In case of late or partial payment of an invoice, late penalties (at a rate equal to three times the legal interest rate) shall apply automatically and without prior notice. In addition, the CUSTOMER shall pay a fixed compensation for recovery costs in the amount of forty (40) Euros.

In case of disagreement regarding a particular invoice, the CUSTOMER agrees to pay promptly to SEGULA the undisputed portion of such invoice and notify SEGULA, by registered letter with acknowledgment of receipt within seven (7) business days after receipt of the invoice, the reason(s) of its refusal to pay the remaining portion. Beyond this period, any invoice shall be deemed valid, accurate in all respects, and fully accepted.

No discount will be granted by SEGULA for early payments.

4.3.Additional Services

 

 

 

••SEGULA

                      TECHNOLOGIES

 

 

COMMERCIAL PROPOSAL

 

 

Elektros

REFERENCE : Elektros BEV Page