Exhibits
A.
Subscription Documents
B. Unaudited
Financial Statements for the six months ended June 1, 2023.
This
summary highlights information contained elsewhere in this memorandum but might
not contain all of the information that is important to you. Before investing in
our common stock, you should read the entire memorandum carefully, including
the “Risk Factors” section and our financial statements and the notes thereto
attached as part of this memorandum.
For
purposes of this memorandum, unless otherwise indicated or the context
otherwise requires, all references herein to “Petrax
Global Inc.,” “Petrax ,” the “Company,” “we,” “us,” and “our” refer to Petrax Global Inc., a Nevada corporation.
The Company
Petrax Global Inc. was formed as a Washington
State corporation on April 7, 2014. We are in the sole business of buying,
selling, shipping, storing, and financing petroleum products such as crude oil,
gasoil, jet fuel, fuel oil, etc. to global markets.
Corporate Information
Petrax Global Inc. was incorporated under the
laws of the State of Washington on April 7, 2014. Prior to the formation of Petrax Global the business was operating as consultants to
the major traders to gather local and international market information from a
base in Dubai, where it was initially organized on October 21, 2022, and
subsequently, it was agreed to incorporate Petrax
Global Inc., on April 7, 2014 in the State of Washington, USA.
For purpose of
forming the Company pursuant to an Agreement by shareholders it was initially
planned to take advantage of a tax-free status of Dubai, but then the
shareholders realized that a US based operation was crucial for the success of
the company and therefore the company was formed in the State of Washington.
Our Chief
Executive Officer, Principal Accounting Officer, President and Secretary has
not been in bankruptcy, receivership or any similar proceeding.
Our principal
executive offices are located at 4302 B Street, Washougal, Washington, 98671.
The telephone number at our principal executive offices is (360) 450 8724. Our
website address is www.Petraxglobal.com. Information on our web site is not part of this
memorandum.
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The
Offering
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Securities Offered:
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500,000,000 shares of common stock
at $1.00 per share
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Common Stock
Outstanding:
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Prior to the offering
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500,000,000 shares
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After the offering
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500,000,000 shares
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(Assuming the sale of
all shares offered)
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Use of Proceeds:
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The net proceeds of the
offering, estimated at $465,000,000 (after deducting an estimated $35,000,000
in offering expenses) are expected to be used for the acquisition of a
Refinery, Storage Tank, and seven oil tankers and working capital. See the
section entitled “Use of Proceeds.”
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Risk Factors:
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Purchase of the shares of
common stock offered hereby involves substantial risks, including but not
limited to, risks associated with the need for additional financing, a lack
of profitability, our dependence upon key personnel and external competition,
among others. See “Risk Factors.”
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No Market:
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There is no market for our
common stock and there can be no assurance that a market will develop.
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An investment in
our common stock is suitable only for persons who have sufficient financial
means to afford a total loss of their investment (see “Risk Factors”) and who
also have no need for liquidity with respect to their investment.
Additionally, we will impose certain standards which prospective
investors must meet in order to invest. These standards have been imposed
to enable us to comply with our obligations under applicable federal and state
securities laws. It should be noted that these suitability standards are
minimum requirements for prospective investors and satisfaction of these
requirements does not necessarily mean that the shares of our common stock are
a suitable investment for a prospective investor.
The Company must
reasonably believe that each such investor has sufficient financial means to
afford a total loss of his investment and either alone or with his purchaser
representative, has such knowledge and experience in financial and business
matters that he is capable of adequately evaluating the merits and risks of the
investment. Further, each investor must acquire the Shares for his own account
and not for the account of others, for investment purposes only and not with a
view to, or for, resale distribution or fractionalization thereof.
The Shares may be
sold to an unlimited number of so called “accredited investors” as defined in
Rule 230.501 under Regulation D.
The shares may be
sold to no more than 35 non-accredited investors.
Prospective
subscribers should be aware that some states impose more restrictive
suitability requirements for investments than are imposed above. In the event a
subscriber is a resident of a state which imposes more restrictive suitability
standards than those described, the subscriber will be required to satisfy the
more restrictive standards or requirements.
For purposes
hereof, an “accredited investor,” as defined under the Securities Act shall
mean any person who comes within any of the following categories, or who we
reasonably believe comes within any of the following categories, at the time of
the sale of shares of our common stock to that person:
(i)
any bank as defined in Section 3(a)(2) of
the Act, or any savings and loan association or other institution as defined in
Section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary
capacity; any broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934; any insurance company as defined in Section
2(13) of the Act; any investment company registered under the Investment
Company Act of 1940 or a business development company as defined in Section
2(a)(48) of that Act; any Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958; any plan established and maintained by a
State, its political subdivisions, or any agency or instrumentality of a State
or its political subdivisions, for the benefit of its employees, if such plan
has total assets in excess of $5,000,000; any employee benefit plan within the
meaning of the Employee Retirement Income Security Act of 1974 if the
investment decision is made by a plan fiduciary, as defined in Section 3(21) of
such Act, which is either a bank, savings and loan association, insurance
company, or registered investment adviser, or if the employee benefit plan has
total assets in excess of $5,000,000 or, if a self-directed plan, with
investment decisions made solely by persons that are accredited investors;
(ii)
any private business development company
as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940;
(iii)
any organization described in Section 501(c)(3)
of the Internal Revenue Code, corporation, Massachusetts or similar business
trust, or partnership, not formed for the specific purpose of acquiring the
securities offered, with total assets in excess of $5,000,000;
(iv)
any director, executive officer, or
general partner of the issuer of the securities being offered or sold, or any
director, executive officer or general partner of a general partner of that
issuer;
(v)
any natural person whose individual net
worth, or joint net worth with that person’s spouse, at the time of his
purchase, exceeds $1,000,000;
(vi)
any natural person who had an individual
income in excess of $200,000 in each of the two most recent years or joint
income with that person’s spouse in excess of $300,000 in each of those years
and has a reasonable expectation of reaching the same income level in the
current year;
(vii)
any trust, with total assets in excess of
$5,000,000, not formed for the specific purpose of acquiring the securities
offered, whose purchase is directed by a sophisticated person as described in
Rule 506(b)(2)(ii) under the Act; and
(viii)
any entity in which all of the equity
owners are accredited investors.
Each investor
must acquire the shares of our common stock for his own account and not for the
account of others, for investment purposes only and not with a view to, or for
resale, distribution or fractionalization thereof.
Prior to our
acceptance of any subscription, each prospective investor must represent, by
completing and signing the Subscription Agreement attached hereto as Exhibit
A and having his representative(s), if any, complete a Purchaser
Representative Questionnaire that:
he understands
that the shares of our common stock represent a speculative, high risk
investment, and that he must bear the economic risk of that investment for an
indefinite period of time because the shares have not been registered under the
Act or applicable state blue sky or securities laws and that he therefore
cannot sell his shares unless they are subsequently so registered or an
exemption from registration is available, and that any transfer will require
our approval;
(i)
he understands that the shares of our
common stock will bear a restrictive legend prohibiting transfers thereof except
in compliance with the provisions of the Subscription Agreement and applicable
securities laws and will not be transferred of record except in compliance
therewith;
(ii)
he is acquiring the shares of our common stock
for investment solely for his own account and without any intention of
reselling or distributing them;
(iii)
if the prospective investor is not a
natural person, it was not organized or reorganized for the specific purpose of
acquiring the shares of our common stock;
(iv)
we have, during the course of the offering
and prior to the sale of the shares of our common stock, accorded him and his
representatives, if any, the opportunity to ask questions and receive answers
concerning the terms and conditions of the offering and to obtain any
additional information, to the extent we or our agent possess such information
or could have acquired it without unreasonable effort or expense, necessary to
verify the accuracy of the information contained in this memorandum;
(v)
he, alone or in conjunction with his
purchaser representative, if any, has substantial knowledge and experience in
business and financial matters, and is an experienced and sophisticated
investor fully capable of evaluating the risks and merits of the proposed
investment in the shares of our common stock;
(vi)
considering his business and financial
circumstances (including, but not limited to, health problems, unusual family
responsibilities and requirements for current income) and all other factors,
the prospective investor is able to bear the economic risk of an illiquid
investment in the shares of our common stock, including the risk of loss of the
entire amount of the prospective investor’s investment; and
(vii)
the information provided by the
prospective investor in his Subscription Agreement and Purchaser Representative
Questionnaire (if applicable) is true and accurate.
We may make or
cause to be made such further inquiry and obtain such additional information as
we deem appropriate with regard to the suitability of prospective investors.
We may reject subscriptions in whole or in part if, in our reasonable
judgment, we deem such action to be in our best interest. If this
offering is oversubscribed, we will, in our sole discretion, determine which
subscriptions will be accepted.
If any
information or representation made by a prospective investor or others acting
on his behalf mislead us as to the financial or other circumstances of such
investor, and if, because of any error or misunderstanding as to such
circumstances, a copy of this memorandum is delivered to any prospective
investor, this memorandum must be returned to us immediately. The
suitability standards set forth herein may be altered or waived by us as to any
particular investor or investors without notice of any kind.
THE SUITABILITY
STANDARDS DISCUSSED ABOVE REPRESENT MINIMUM SUITABILITY STANDARDS FOR
PROSPECTIVE INVESTORS. EACH PROSPECTIVE INVESTOR IS ENCOURAGED TO CONSULT WITH HIS
LEGAL, TAX AND OTHER ADVISORS TO DETERMINE WHETHER AN INVESTMENT IN THE SHARES
OF OUR COMMON STOCK IS APPROPRIATE IN HIS PARTICULAR CIRCUMSTANCES.
Prospective
investors and purchaser representatives are urged to request any additional
information they may consider necessary in making an informed investment
decision. We will make available to each prospective investor and his
purchaser representative, if any, the opportunity to ask questions of, and
receive answers from, us or a person acting on our behalf concerning the terms
and conditions of this offering or any other relevant matters. We will
respond with any additional information necessary to verify the accuracy of the
information set forth in this memorandum to the extent that we possess such information
or can acquire it without unreasonable effort or expense.
RISK FACTORS
This
memorandum contains forward-looking statements. Actual results could
differ materially from those projected in the forward-looking statements as a
result of certain of the risk factors set forth below. The Shares being
offered hereby involve a high degree of risk Prospective investors should
consider the following risk factors inherent in and affecting the business of
the Company and an investment in the Shares. Any of the following risks
could adversely affect our business, financial condition and results of
operations. We have incurred substantial losses from inception while realizing
limited revenues and we may never generate substantial revenues or be profitable
in the future.
RISKS RELATED TO OUR
BUSINESS
WE NEED TO RAISE ADDITIONAL CAPITAL TO MEET OUR FUTURE BUSINESS
REQUIREMENTS AND SUCH CAPITAL RAISING MAY BE COSTLY OR DIFFICULT TO OBTAIN AND
COULD DILUTE CURRENT STOCKHOLDERS’ OWNERSHIP INTERESTS.
We are seeking to
raise $100,000,000 at $1.00 per share in this offering on a best efforts basis
to implement our plan of acquiring a refinery, storage tanks and seven oil
tankers and meet our capital needs for the next 12 months of operations.
We will use the proceeds from this offering to pay for administrative,
conversion software upgrades, website upgrades, search engine optimization and
other marketing strategies for our business, opening trading offices in London,
Houston, and Singapore. See the section entitled “Use of Proceeds” for a
description of the manner in which we plan to use proceeds from this offering.
At this time, we have not secured or identified any additional financing.
We do not have any firm commitments or other identified sources of additional
capital from third parties or from our officers and directors or from other
shareholders. There can be no assurance that additional capital will be
available to us, or that, if available, it will be on terms satisfactory to us.
Any additional financing will involve dilution to our existing
shareholders. If we do not obtain additional capital on terms
satisfactory to us, or at all, it may cause us to delay, curtail, scale back or
forgo some or all of our business operations, which could have a material
adverse effect on our business and financial results and investors would be at
risk to lose all or a part of any investment in our Company.
We require
additional financing to market our EDGAR conversion and submission services
until sufficient revenue can be generated for us to be self-sustaining. Our
management projects that in order to effectively bring its services to market,
that it will require approximately $25,000,000 over the next 12 months to cover
the working capital as well as the costs involved in the marketing and
advertising of our services. In the event that we are unable to generate
sufficient revenues through our trading efforts, and before all of the funds
now held by us and obtained by us through this offering are expended, an investment
made in Petrax may become worthless.
Competition for
personnel in our energy trading industry is intense. We may not be able to
retain our key employee or attract, assimilate or retain other highly qualified
employees in the future. If we do not succeed in attracting new personnel or
retaining and motivating our current personnel, our business will be adversely
affected. In addition,
The employment
agreement with our key employee contains restrictive covenants that restrict his
ability to compete
against us or
solicit our customers. These restrictive covenants, or some portion of these
restrictive covenants, may be deemed to be against public policy and may not be
fully enforceable
OUR FUTURE
SUCCESS WILL DEPEND ON OUR ABILITY TO INCREASE REVENUES.
We are in a
highly competitive market for the delivery of energy products and face numerous
risks and uncertainties in achieving increased revenues. We launched our
website, located at www.Petraxglobal.com and in October 2022. During this
period, we have invested in EDGAR conversion software, a dedicated network,
computer equipment, and brochures and other such marketing materials to enable
us to carry out our business plan. These expenditures have resulted in
operating losses. In order to be successful, we must increase our revenues from
the trading activities and our services to corporations and individuals subject
to the reporting and disclosure requirements imposed by the SEC. In order to
increase our revenues, we must successfully:
·
create and successfully implement a marketing and trading plan to
attract corporations and individuals to our products and services;
·
increase traffic to our website by developing relationships with popular
websites and providers of petroleum products, logistics and chartering
services;
·
convert online visitors to clients;
·
generate revenues through the sale of our energy products to
current companies, those seeking and need our services;
·
attract, retain and motivate qualified traders with energy trading
experience to serve in trading department, including sales and marketing
positions;
·
respond effectively to competitive pressures from other providers
of energy trading services;
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keep abreast of the changes in the energy market, especially with
the advent of Interactive Data Electronic Applications on markets like ETRM,
PLATTS, TT X-TRADER, CLOUD9, BLOOMBER TERMINAL, ICE.
If we are not
successful in the execution of these strategies, our business, results of
operations and financial condition will be materially adversely affected.
Our net loss from
inception through December 30, 2022 is $311,477. We expect to incur
operating losses in future periods due to expenses associated with this
offering, subsequent registration of the shares sold in this offering and
current revenues and expenses. We cannot be sure that we will be
successful in generating revenues in the future and in the event we are unable
to generate sufficient revenues or raise additional funds we will analyze all
avenues of business opportunities. Management may consider a merger,
acquisition, joint venture, strategic alliance, a roll-up, or other business
combination to increase business and potentially increase the liquidity of the
Company. Such a business combination may ultimately fail, decreasing the
liquidity of the Company and shareholder value or cause us to cease operations,
and investors would be at risk to lose all or part of their investment in us.
We compete with
many providers of energy trading services. Because our market poses no
substantial barriers to entry, we expect this competition to continue to
intensify. The types of companies with which we compete include:
large energy and
commodity trading companies, such as VITOL, TRAFIGURA, GLENCORE to name a few
which offer crude oil, LNG, petroleum products and miners as part of their
suite of products;
Our future
success will depend on our ability to increase and enhance our physical trading
and market position by:
(1) attracting
the best of the breed of traders to our team
(2) keeping our
trading models on par with those of our competitors and
(3) increasing
our online visibility
Many of our existing
competitors, as well as a number of potential competitors, have longer
operating histories, greater name recognition, larger customer bases and
significantly greater financial, technical and marketing resources than we do.
This may enable them to respond more quickly to new or emerging technologies
and changes in the types of services sought by energy buyers, or to devote
greater resources to the development, promotion and sale of their trading
services than we can. These competitors and potential competitors may be able
to undertake more extensive marketing campaigns, adopt more aggressive pricing
policies and make more attractive offers to potential employees and companies
and individuals subject to the SEC’s reporting obligations. Our competitors may
also develop services that are equal or superior to the services offered by us
or that achieve greater market acceptance than our services. In addition,
current and prospective competitors may establish cooperative relationships
among themselves or with third parties to improve their ability to address the
needs of our existing and prospective customers. If these events occur, they
could have a materially adverse effect on our revenue. Increased competition
could also result in price reductions, reduced margins or loss of market share,
any of which would adversely affect our business, results of operations and
financial condition. See "Description of Business” and
"Competition."
We also believe
our ability to compete depends on a number of factors outside of our control,
including:
·
the energy prices at which others offer competitive services,
including aggressive price competition and discounting;
·
the ability and willingness of our competitors to finance
customers' purchases;
·
the ability of our competitors to undertake more extensive trading
campaigns than we can;
·
the extent, if any, to which our competitors develop proprietary
tools that improve their ability to compete with us;
·
the ability of our customers to perform the services themselves;
and
·
the extent of our competitors' responsiveness to customer needs.
In order to be
competitive, we must have the ability to respond promptly and efficiently to
the ever-changing marketplace. We must establish our name as a reliable
and constant source for energy users and shipping services. Any significant
increase in competitors or competitors with better, more efficient services
could make it more difficult for us to gain market share or establish and
generate revenues. We may not be able to compete
effectively on these or other factors.
Our future
success will depend, in part, on our ability to increase the brand awareness of
our abilities and the services we offer. If our marketing efforts are
unsuccessful or if we cannot increase our brand awareness, our business,
financial condition and results of operations would be materially adversely
affected. In order to build our brand awareness, we must succeed in our
marketing efforts, provide high quality services and increase traffic to our
website. We intend to spend a significant portion of the proceeds of this
offering to expand our marketing efforts as part of our brand-building efforts.
These efforts may not be successful which could have an adverse effect on our
business, results of operations and financial condition.
Our market is
characterized by rapidly changing oil prices, technologies, evolving industry
standards, frequent new rules and regulations and changing customer demands. To
be successful, we must adapt to our rapidly changing
market by
continually enhancing our existing services and adding new services to address
our customers' changing demands. We could incur substantial costs if we need to
modify our services or infrastructure to adapt to these changes. Our business
could be adversely affected if we were to incur significant costs without
generating related revenues or if we cannot adapt rapidly to these changes.
Our business
could also be adversely affected if we experience difficulties in introducing
new or enhanced services or if these services are not favorably received by
users. We may experience technical or other difficulties that could delay or
prevent us from introducing new or enhanced services. Furthermore, after these
services are introduced, we may discover errors in these services which may
require us to significantly modify our software or hardware infrastructure to
correct these errors.
We are dependent upon
the continued demand for the distribution of energy business and financial
information over the Internet, making our business susceptible to a downturn in
the financial services industry. For example, a decrease in the number of
individuals investing their money in the energy markets could result in a
decrease in the number of companies deciding to buy energy. This downturn could
have a material adverse effect on our business, results of operations and
financial condition.
Because a
significant component of our growth strategy relates to increasing our revenues
through the provision of energy usage by companies, our business would be
adversely affected if we were unable to develop and maintain an effective
trading force to market our services to our customer group.
We could
experience growth over a short period of time, which could put a significant
strain on our managerial, operational and financial resources. We must
implement and constantly improve our certification processes and hire, train
and manage qualified traders and personnel to manage such growth. We have
limited resources and may be unable to manage our growth. Our business strategy
is based on the assumption that our customer base, geographic coverage and
service offerings will increase. If this occurs it will place a significant
strain on our managerial, operational, and financial resources. If we are
unable to manage our growth effectively, our business will be adversely
affected. As part of this growth, we may have to implement new operational and
financial systems and procedures and controls to expand, train and manage our
employees, especially in the areas of energy
trading. If we fail to develop and maintain our services and processes as we
experience our anticipated growth, demand for our services and our revenues
could decrease.
Our ability to
provide energy products on a real-time basis depends on the efficient and
uninterrupted operation of our computer and communications hardware and
software systems. These systems and operations are vulnerable to damage or
interruption from human error, natural disasters, telecommunication failures,
break-ins, sabotage, computer viruses, intentional acts of hacking, vandalism
and similar events. Any system failure, including network, software or hardware
failure, that causes an interruption in our service or a decrease in
responsiveness of our Web site could result in an inability to transmit
documents, reduced transmission turnaround, reduced revenue and harm to our
reputation, brand and relations with advertisers. Our business, results of
operations and financial condition could be materially adversely affected by
any event, damage or failure that interrupts or delays our operations.
In order to
attract and retain a client base and increase business, we must establish,
maintain and strengthen our name and the energy trading services we provide. In
order to be successful in establishing our reputation, clients must perceive us
as a trusted source for petroleum products and logistic services. If we are
unable to attract and retain clients with our current marketing plans, we may
not be able to successfully establish our name and reputation, which could
significantly affect our business, financial condition and results of
operations.
WE HAVE NOT
BEGUN TO DESIGN ANY ADVERTISING OR MARKETING PROGRAMS AND IF WE FAIL TO ATTRACT
CUSTOMERS TO USE OUR SERVICES, WE WILL NOT BE ABLE TO GENERATE REVENUES WHICH
COULD SIGNIFICANTLY AFFECT OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
We plan to
primarily target and market our services directly to senior executives of
utility companies, refineries, airline industry, and large enterprises. The
Company’s primary marketing efforts will center on paid advertisements on the
internet. We believe that building awareness of our energy and logistic service
will be critical in increasing
our client base.
We have not begun to design any online advertising and marketing programs and
even if we are successful in designing these programs, we cannot assure you
that we will be successful in attracting customers. If we fail to attract
customers to use our services, we will be unable to generate revenues, which could significantly affect
our business, financial condition and results of operations.
THERE ARE RELATIONSHIPS WITHIN THE ENERGY INDUSTRY THAT MUST BE
MAINTAINED, AND IF WE FAIL TO DEVELOP LONG-TERM RELATIONSHIPS WITH CUSTOMERS
OUR SUCCESS WOULD BE JEOPARDIZED WHICH COULD HAVE A MATERIAL ADVERSE EFFECT ON
THE COMPANY'S BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
We anticipate
that a majority of our business will be derived from repeat clients. Our future
success depends to a significant extent on our ability to develop long-term
relationships with refineries and utility companies that will provide repeat
business. Our inability to build long-term client relations or the inability of
new or existing suppliers and clients to be successfully serviced could result
in a loss of future business which would harm our business.
GOVERNMENT REGULATION
MAY IMPACT OUR OPERATIONS DUE TO CHANGES IN THE WAY THE SEC ACCEPTS ELECTRONIC
FILINGS.
Our business is
reliant on the manner in which documents are trading and financial instruments
are processed Any change in how documents are accepted for filing
could cause our business to temporarily cease operations, as we make changes to
conform to any new filing requirements. We plan on staying abreast of
these changes.
ANY
TEMPORARY CESSATION IN OPERATIONS COULD CAUSE US TO LOSE CLIENTS.
Any temporary
cessation in operations could cause the loss of current and prospective
clients. Our clients will not have the ability to delay filings and would
seek services elsewhere causing us to lose revenue. Investors would be at
high risk to lose all of their investment should we have a temporary cessation
of operations.
SMALL PRIVATE COMPANIES
ARE INHERENTLY RISKY AND WE MAY BE EXPOSED TO MARKET FACTORS BEYOND OUR
CONTROL. IF SUCH EVENTS WERE TO OCCUR IT MAY RESULT IN A LOSS OF YOUR
INVESTMENT.
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RISKS RELATED TO OUR INDUSTRY
WE ARE
DEPENDENT ON THE INTERNET INFRASTRUCTURE.
Our future
success will depend, in significant part, upon the maintenance of the various
components of the Internet infrastructure, such as a reliable backbone network
with the necessary speed, data capacity and security, and the timely
development of enabling products, such as high-speed communications, which
provide reliable and timely Internet access and services. To the extent that
the Internet continues to experience increased numbers of users, frequency of
use or increased user bandwidth requirements, we cannot be sure that the
Internet infrastructure will continue to be able to support the demands placed
on it or that the performance or reliability of the Internet will not be
adversely affected. Furthermore, the Internet has experienced a variety of
outages and other delays as a result of damage to portions of its
infrastructure or otherwise, and such outages or delays could adversely affect
our Web site and the Web sites of our co-branded partners, as well as the
Internet service providers and online service providers our customers use to
access our services. In addition, the Internet could lose its viability as a
commercial medium due to delays in the development or adoption of new standards
and protocols that can handle increased levels of activity. We cannot predict
whether the infrastructure and complementary products and services necessary to
maintain the Internet as a viable commercial medium will be developed or
maintained.
WE ARE SUBJECT
TO UNCERTAIN GOVERNMENT REGULATION AND OTHER LEGAL UNCERTAINTIES RELATING TO
THE ENERGY SECTOR.
There are currently
few laws or regulations that specifically regulate petroleum products trading,
shipping and logistics. Any new laws or regulations related to energy trading
could adversely affect our business. In addition, current laws and regulations
may be applied and new laws and regulations may be adopted in the future that
address issues such as user privacy, pricing, taxation and the characteristics
and quality of products and services offered. For example, several
telecommunications companies have petitioned the Federal Communications
Commission to regulate Internet service providers and online service providers
in a manner similar to long distance telephone carriers and to impose access
fees on these companies. This could increase the cost of transmitting data over
the Internet, which could increase our expenses and discourage people from
using the Internet to obtain business and financial information. Moreover, it
may take years to determine the extent to which existing laws relating to
issues such as property ownership, libel and personal privacy are applicable to
the Internet.
WE FACE WEB
SECURITY CONCERNS THAT COULD HINDER INTERNET COMMERCE.
Any
well-publicized compromise of Internet security could deter more people from
using the Internet or from using it to conduct transactions that involve
transmitting confidential information, such as stock trades or purchases of
goods or services. Because a portion of our revenue is based on individuals
using credit cards to purchase subscriptions over the Internet and a portion
from advertisers who seek to encourage people to use the Internet to purchase
goods or services, our business could be adversely affected by this type of
development. We may also incur significant costs to protect against the threat
of security breaches or to alleviate problems, including potential private and
governmental legal actions, caused by such breaches.
RISKS ASSOCIATED WITH
THIS OFFERING
THERE IS NO
FIRM COMMITMENT TO PURCHASE THE SHARES OF COMMON STOCK BEING OFFERED, AND AS A
RESULT INITIAL INVESTORS ASSUME ADDITIONAL RISK.
This is a best
effort, no minimum offering of shares of our common stock being conducted
solely by certain members of our management. There is no commitment by
anyone to purchase any of the shares being offered. We cannot give any
assurance that any or all of the shares will be sold. There is no minimum
and we will retain any amount of proceeds received from the sale of the shares. Moreover, there is no assurance that our estimate of our liquidity
needs is accurate or that new business development or other unforeseen events
will not occur, resulting in the need to raise additional funds. As this
offering is a best efforts financing, there is no assurance that this financing
will be completed or that any future financing will be affected. Initial
investors assume additional risk on whether the offering will be fully
subscribed and how the Company will utilize the proceeds.
OUR LACK OF
BUSINESS DIVERSIFICATION COULD CAUSE YOU TO LOSE ALL OR SOME OF YOUR INVESTMENT
IF WE ARE UNABLE TO GENERATE REVENUES FROM OUR PRIMARY SERVICES.
Our business
consists of providing conversion and filing services to companies that are
required to file electronic reports with the SEC through EDGAR, and in time,
through IDEA. We do not have any other lines of business or other sources of
revenue if we are unable to compete effectively in the marketplace. This lack
of business diversification could cause you to lose all or some of your
investment if we are unable to generate revenues since we do not expect to have
any other lines of business or alternative revenue sources.
OUR BYLAWS AND
THE NEVADA REVISED STATUTES CONTAIN PROVISIONS THAT LIMIT THE LIABILITY AND
PROVIDE INDEMNIFICATION FOR OUR OFFICERS AND DIRECTORS.
Our bylaws
provide that the officers and directors will only be liable to us for acts or
omissions that constitute actual fraud, gross negligence or willful and wanton
misconduct. Thus, we may be prevented from recovering damages for certain
alleged errors or omissions by the officers and directors for liabilities
incurred in connection with their good faith acts for us. Such an
indemnification payment might deplete our assets. Stockholders who have
questions respecting the fiduciary obligations of our officers and directors
should consult with independent legal counsel. It is the position of the
SEC that exculpation from and indemnification for liabilities arising under the
Securities Act and the rules and regulations thereunder is against public policy
and therefore unenforceable.
THE SECURITIES BEING OFFERED ARE
RESTRICTED SHARES OF OUR COMMON STOCK AND AN INVESTMENT IN OUR COMMON STOCK
WILL BE ILLIQUID.
We are offering
shares of our common stock pursuant to an exemption from registration under the
Securities Act which imposes substantial restrictions on the transfer of such
securities. All certificates which evidence the shares will be inscribed
with a printed legend which clearly describes the applicable restrictions on
transfer or resale by the owner thereof. Accordingly, each investor
should be aware of the long-term illiquid nature of his investment. In no
event may such securities be sold, pledged, hypothecated, assigned or otherwise
transferred unless such securities are registered under the Securities Act and
applicable state securities laws or we received an opinion of counsel that an
exemption from registration is available with respect thereto. Rule 144,
the primary exemption for resale of restricted securities is only available for
securities of issuers providing current information to the public. While
we will be required to make such information available should we conduct an
initial public offering, and assuming such public offering is in fact
successfully carried out, we do not currently make such information available
precluding reliance on Rule 144. Thus, each investor should be prepared
to bear the risk of such investment for an indefinite period of time. See
the sections entitled “Description of Securities” and “Placement of the Offering”.
THERE IS
CURRENTLY NO MARKET FOR OUR COMMON STOCK, AND WE DO NOT EXPECT THAT A MARKET
WILL DEVELOP IN THE FORESEEABLE FUTURE MAKING AN INVESTMENT IN OUR COMMON STOCK
ILLIQUID.
There is
currently no market for our common stock. We do not expect that a market
will develop at any time in the foreseeable future. The lack of a market
may impair the ability to sell shares at the time investors wish to sell them
or at a price considered to be reasonable. In the event that a market
develops, we expect that it would be extremely volatile.
EVEN IF A
MARKET DEVELOPS FOR OUR SHARES, OUR SHARES MAY BE THINLY TRADED WITH WIDE
SHARE PRICE FLUCTUATIONS, LOW SHARE PRICES AND MINIMAL LIQUIDITY.
If a market for
our shares develops, the share price may be volatile with wide fluctuations in
response to several factors, including:
·
Potential investors’ anticipated feeling regarding our results of
operations;
·
Increased competition;
·
Our ability or inability to generate future revenues; and
·
Market perception of the future of development of EDGAR filing
services.
In addition, if
our shares are quoted on the OTCBB, our share price may be affected by factors
that are unrelated or disproportionate to our operating performance. Our share
price might be affected by general economic, political, and market conditions,
such as recessions, interest rates, or international currency fluctuations. In
addition, even if our stock is approved for quotation by a market maker through
the OTCBB, stocks traded over this quotation system are usually thinly traded,
highly volatile and not followed by analysts. These factors, which are not
under our control, may have a material effect on our share price.
WE ARBITRARILY
DETERMINED THE OFFERING PRICE AND THERE HAS BEEN NO INDEPENDENT VALUATION OF
THE STOCK, WHICH MEANS THAT THE STOCK MAY BE WORTH LESS THAN THE PURCHASE
PRICE.
The offering
price of the shares of common stock has been arbitrarily determined without
independent valuation of the shares by our management based on estimates of the
price that purchasers of speculative securities, such as our common stock, will
be willing to pay considering our nature and capital structure, the experience of
the officers and
directors and the
market conditions for the sale of equity securities in similar companies.
The offering price of the shares bears no relationship to our assets,
earnings or book value, or any other objective standard of value and thus the
shares may have a value significantly less than the offering price and the
shares may never obtain a value equal to or greater than the offering price.
See the section entitled “Placement of the Offering” elsewhere in this
memorandum.
YOU WILL INCUR
SUBSTANTIAL AND IMMEDIATE DILUTION OF THE PRICE YOU PAY FOR YOUR SHARES IN THIS
OFFERING.
The offering
price of our common stock is substantially higher than the net tangible book
value per share of the outstanding common stock issued after this offering.
Therefore, if you purchase shares of our common stock in this offering,
you will incur substantial immediate dilution in the net tangible book value
per share of common stock from the price you pay for such share.
As of June 1,
2023, the net tangible book value of our common stock was $21,891 or
approximately $0.002 per share based upon 11,899,205 shares outstanding.
WE DO NOT
ANTICIPATE DIVIDENDS TO BE PAID ON OUR COMMON STOCK AND INVESTORS MAY LOSE THE
ENTIRE AMOUNT OF THEIR INVESTMENT.
A dividend has
never been declared or paid in cash on our common stock and we do not
anticipate such a declaration or payment for the foreseeable future. We expect
to use future earnings, if any, to fund business growth. Therefore,
stockholders will not receive any funds absent a sale of their shares. We
cannot assure stockholders of a positive return on their investment when they
sell their shares nor can we assure that stockholders will not lose the entire
amount of their investment.
OUR EXECUTIVE
OFFICER AND MAJORITY STOCKHOLDER MAY SIGNIFICANTLY INFLUENCE MATTERS TO BE
VOTED ON AND THEIR INTERESTS MAY DIFFER FROM, OR BE ADVERSE TO, THE INTERESTS
OF OUR OTHER STOCKHOLDERS.
The Company’s
executive officer and majority stockholder control 100% of our outstanding
common stock prior to this Offering. Assuming the sale of 1,000,000
shares of our common stock, the Company’s executive officer and majority
stockholder will control approximately 92% of the Company’s outstanding common
stock. Accordingly, the Company’s executive officer and majority
stockholder possess significant influence over the Company on matters submitted
to the stockholders for approval, including the election of directors, mergers,
consolidations, the sale of all or substantially all of our assets, and also
the power to prevent or cause a change in control. This amount of control gives
them substantial ability to determine the future of our Company, and as such,
they may elect to close the business, change the business plan or make any number
of other major business decisions without the approval of shareholders. The
interest of our majority stockholders may differ from the interests of our
other stockholders and could therefore result in corporate decisions that are adverse to other stockholders.
WE HAVE SOUGHT
OR INTEND TO SEEK AN EXEMPTION IN MULTIPLE STATES FOR THIS OFFERING; HOWEVER,
THERE CAN BE NO ASSURANCE THAT AN INVESTOR IN THIS OFFERING WILL HAVE A SIMILAR
EXEMPTION COVERING THEIR RESALE AND WE DO NOT CURRENTLY HAVE PLANS TO QUALIFY
ANY RESELLS IN ANY STATE.
For this
offering, we have sought or intend to seek in multiple states an exemption from
registration for securities offered and sold under Rule 506 of Regulation D of
the Securities Act. There can be no assurance that a subscriber to this
offering will have a state exemption for their resale. We do not
currently have plans to qualify any resells in any state. In the event
that a subscriber to this offering does not have available a state exemption
for the transfer of his shares and we have not qualified such transfers in the
state, the subscriber will not be able to transfer his shares.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This memorandum includes
forward-looking statements within the meaning of Section 27A of the Securities
Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). These forward-looking statements are expressed in good
faith and based upon a reasonable basis when made, but there can be no
assurance that these expectations will be achieved or accomplished. These
forward-looking statements are subject to known and unknown risks,
uncertainties and assumptions about us that may affect our actual results,
levels of activity, performance, or achievements expressed or implied by such
forward-looking statements. In some cases you
can identify forward-looking statements by terminology such as “may”, “should”,
“could”, “would”, “expect”, “plan”, “anticipate”, “believe”, “estimate”,
“continue”, or the negative of such terms or other similar expressions.
All forward-looking statements attributable to us or persons acting on
our behalf are expressly qualified in their entirety by the cautionary statements
included in this memorandum. We undertake no obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. In light of these risks,
uncertainties and assumptions, the forward-looking events discussed in this
memorandum might not occur.
USE OF PROCEEDS
We intend to use
the net proceeds of this offering to fund working capital including, but not
limited to, marketing and advertising, and investment in technology (specifically
software upgrades as IDEA phases out EDGAR) to enhance our infrastructure.
The table below depicts how we plan to utilize the proceeds in the event
that 15%, 25%, 50%, 75% and 100% of the shares in this offering are sold;
however, the amounts actually expended for working capital as well as other
purposes may vary significantly and will depend on a number of factors,
including the amount of our future revenues and the other factors described
under “Risk Factors.” Accordingly, we will retain broad discretion in the
allocation of proceeds of this offering.
|
|
|
|
|
|
|
|
Shares Sold
|
|
|
|
|
|
|
|
|
Purpose
|
1500,000
|
3,500,000
|
25,000,000
|
50,000,000
|
20,000,000
|
|
|
|
|
|
|
|
|
Marketing
|
$ 15000
|
$ 25,000
|
$ 25,000
|
$ 25,000
|
$ 25,000
|
|
|
|
|
|
|
|
|
General and Administrative
|
10,000
|
15,000
|
15,000
|
15,000
|
15,000
|
|
Independent Contracts /
Lawyers
|
5,000
|
10,000
|
10,000
|
10,000
|
10,000
|
|
|
|
|
|
|
|
[This space intentionally left blank]
After deducting expenses,
which we estimate that we will incur in connection with the offering, including
but not limited to, legal fees, accounting fees, printing costs and state and
federal filing fees, if any.
In regards to
cash dividends we intend to retain earnings, to support the development of the
business and therefore, do not anticipate paying cash dividends for the
foreseeable future. Payment of future dividends, will be at the discretion of
our board of directors after taking into account various factors, including
current financial condition, operating results and current and anticipated cash
needs.
DILUTION
Our net tangible book value as of June 1, 2023 was $1,000,000 or
$.01 per share of common stock. Net tangible book value per share
represents the amount of total tangible assets less total liabilities, divided
by the shares of common stock outstanding as of June 1, 2023. The net
tangible book value as of June 1, 2023, to reflect the issuance and sale of all
of the shares offered at $1.00 per share and deductions for estimated offering
expenses estimated $0.7 per share. This represents an immediate increase
in net tangible book value of $.92 per share to existing stockholders and an
immediate dilution of $0.93 per share to new investors. The following
table illustrates this per share dilution.
|
|
|
|
Offering price per share
|
|
$1.00
|
|
|
|
|
|
Net tangible book value per
share at June 1, 2023
|
$0.01
|
|
|
Increase in the net
tangible book value per share
|
$0.99
|
|
|
Attributable
to existing shareholders
|
|
|
|
|
|
|
|
Net tangible book value
after this offering (adjusted)
|
|
$1.00
|
|
|
|
|
|
Underwriters
|
$0.7
|
|
Overview
Industry Background
Energy trading
began in 1978 with the first oil futures contract on the New York Mercantile
Exchange (NYMEX). During the 1980s and 1990s, the International Petroleum
Exchange (IPE) and NYMEX successfully launched futures contracts for oil and
gas. These successful futures exchanges survived the Enron et al.
energy-trading debacles of recent years and demonstrated their capable
financial performance. Today, oil companies and financial houses provide the
necessary trading liquidity through market-making on both the established government-regulated
futures exchanges and off-exchange energy derivatives markets, which can clear
on the futures exchanges.
These companies
know how to manage their financial energy risks and have the risk-management
skills that will be deployed increasingly in the emerging global environmental
markets. Financial risk will be managed on established energy futures exchanges
because trading debacles have taught the energy markets that financial
performance is fundamentally important. While OTC brokers (such as Natsource, Evolution Markets, and CO2e) broker bilateral
trades, market-making is what is lacking from the environmental financial
markets. However, in order to make a market, principals are needed.
The principals
for environmental financial market-making will be the investment banks,
multinational oil and gas companies, and agribusiness. They have the global
presence, balance sheet, and the exposures to take action and to put their
financial wherewithal behind this market as they have done for oil and gas
trading. They also have the financial balance sheet to perform.
Environmental
financial products for sulfur dioxide (SO2) and nitrous oxides (NOx) have been
successful in controlling U.S. pollution since 1995. A $6 billion environmental
market today may seem pale in comparison with a $2 trillion energy derivatives
market, but the growth trajectory suggests that today’s green trading markets
should be compared with 1978’s oil markets. However, this time around,
maturation will be global and simultaneous as carbon-trading regimes take root
in the EU, Asia, Australia, and North America. While thus far, trades for
carbon dioxide have numbered only in the hundreds—with a notional value of
about $500 million—estimates suggest that a $3 trillion commodity market may
emerge over the next 20 years. The dollar value of this market is enticing, but
the reality is that the global energy industry will be one of the primary
suppliers of liquidity to this market, followed by the agricultural industry, since
both industries are already active in commodity trading.
Green trading
encompasses the convergence of the capital markets and the environmental
markets; it includes not only trading in GHG emissions reduction but also
renewable energy and the financial value of energy efficiency. Further, there
are natural cross-commodity arbitrage opportunities since oil, gas, coal, and
power, like weather derivatives, have environmental dimensions. Today,
cross-border trades of carbon dioxide have been conducted between the U.S. and
Canada, Canada and Germany, Germany and Australia, and Australia and Japan.
Developing countries will be fully engaged in this financial market as sellers
of GHG credits and allowances, using its mechanisms to provide liquidity for
needed technology transfer.
High crude oil
prices can cut into margins for integrated oil majors, as they also bear the
cost of crude used for refined products. However, following Russia’s invasion
of Ukraine and numerous shutdowns of refineries worldwide in the wake of the
coronavirus pandemic, refining margins exploded in the second quarter,
outpacing the gains in crude and adding to earnings.
The strong
second-quarter results reflect a tight global market environment, where demand
has recovered to near pre-pandemic levels and supply has attracted.
U.S. consumer
inflation accelerated in May as gasoline prices hit a record high and the cost
of food soared, leading to the largest annual increase in four decades. A
gallon of regular gasoline cost an average $4.99 nationwide on Friday,
according to motorist group AAA.
Exxon will hike
spending 50% in its West Texas shale holdings, he said, where it expects to add
25% more output this year after adding 190,000 barrels to oil production last
year. An ongoing Texas refinery expansion will add the equivalent of a new
medium sized refinery,
Exxon, the
largest U.S. oil producer, lost some $20 billion in 2020, and had borrowed more
than $30 billion to finance operations. It paid $40.6 billion in taxes last
year, $17.8 billion more than in 2020.
Exxon posted its
biggest quarterly profit in seven years when it reported fourth-quarter
earnings in February. After halting share buybacks several years ago, it
resumed them this year and pledged to spend up to $30 billion through next
year.
Numerous
companies have said they are holding down spending that could boost oil output
to lower $100-plus per barrel oil prices, because that is what investors are
demanding.
The surging costs
have become a political headache for the Biden administration, which has tried
several measures to lower prices. These include a record release of barrels
from U.S. strategic reserves, waivers on rules related to the production of
summer gasoline, and leaning on major OPEC countries to boost output.
Shipping
companies made $190 billion in profit, a seven-fold increase in one year, Biden
said at the port. The situation made him so “viscerally angry” that he wanted
to “pop them,” he said.
Principal Products or Services and Their Markets
·
Crude
Oil
·
Gasoil
·
Fuel
Oil
·
Jet
Fuel
·
Naphtha
·
LNG
·
LPG
COMPETION PROFILE
1.
VITOL
GROUP
The Vitol Group operates as an energy
and commodities trading company. The Company offers crude oil and product
trading, shipping, refining, terminals and storage, downstream, upstream, gas
and power, renewables, and investments services. The Vitol Group serves
customers worldwide and smashed its previous records by making more profit in
the first half of this year than in the whole of last year.
The Vitol energy trading made close
to $4.5 billion in the first six months of the year. Last year, Vitol posted a
record $4.2 billion net profit for the full year and traded 7.6 million barrels
per day of oil and nearly 13 million tons of liquefied natural gas (LNG).
2.
TRAFIGURA
GROUP
Trafigura is a multinational energy
and commodity trading company domiciled in Singapore with major regional hubs
in Geneva, Houston, Montevideo and Mumbai, founded in 1993.” The company trades
in base metals and energy.
Profit for the year of 2022 was over
USD7 Billion that was more than double the previous year's level of USD3.5
Billion, as per company record. Revenues increased by 38 percent to USD318,476
million from USD231,308 million in 2021, driven by elevated commodity prices.
Trafigura is the third-largest
physical commodities trading group in the world behind Vitol and Glencore.
Trafigura sources, stores, blends and transports raw materials including oil,
refined petroleum products and non-ferrous metals (iron ore and coal.
3.
GLENCORE
Glencore (GLEN.L) announced a payout of
$7.1 billion to its investors on Wednesday, as high oil and coal prices helped
it to post a record 2022 annual profit, but it said the rising costs of
producing minerals could dent future earnings.
In preliminary 2022 results, the
miner and trader said it cut net debt to $75 million at the end of the year
from $6 billion at the end of 2021.
Adjusted earnings before interest,
tax, depreciation and amortization (EBITDA) rose 60% to $34.1 billion, smashing
a previous record of $21.3 billion a year earlier, in line with analysts'
estimates.
How We Generate Revenue
We provide our
clients with a secure, reliable, fast and cost-efficient energy products and
petroleum derivative goods. We utilize state of the art software to automate
the trading process. The use of this software eliminates a significant
portion of time that would otherwise be required without the software.
Much of the deal making work that we do involves sourcing, negotiating,
purchasing, chartering tankers, arranging financing, insurance, and delivery of
cargo and documents.
The Company’s Growth Strategy
In addition to
implementing a targeted direct trading plans, via direct sourcing products from
1400 refineries in the world, and buying and selling the products to our
clients worldwide, and growing our referral client base with existing buyers
and sellers, we plan to invest heavily in acquisition of storage tank farms to
expand our Company’s global presence at key ports such as Rotterdam, Houston,
Singapore and Fujairah via controlling our storage tank farms.
Employees
the Company will
enter into an employment agreement with all traders, operations, finance and
logistics and others to assure them of stock option at the end of each year of service
so that all employees are shareholders of the company which is the norm in all
major energy trading houses. Energy trading business is highly specialized and
our supplier and clients list the greatest assets of the company and protecting
them is the key for success and to this end, all employees are made to have
shares and be a stakeholder in the company to maximize loyalty and dedication.
In an effort to
expand our existing client base, the Company will employ the best of the breed
of energy traders in the world for our four targeted trading locations like
Houston, London, Singapore and Dubai, and expand them to other locations as we
grow.
Significant Purchases of refinery, Oil tankers, Storage Tanks and
Insurance brokerage firms.
We do anticipate
significant purchases of Refineries, Oil Tankers and Storage tanks in the near
future. Our main tools for work production are computers, Internet
access, and proprietary software. At this time, we have the computers,
Internet capabilities, and software necessary in Dubai office to provide high
quality services to our clients as we plan to set up our trading offices in
Houston, London and Singapore after the successful sales of our shares.
Liquidity
& Capital Resources
As of June 1,
2023, our total current assets were $5 million, which consisted of cash, trades
and deals in the making, receivable and sundry current assets. We had
liabilities consisting of $640,000 in accounts payable and $3,250,000 in loans
payable to a stockholder as of June 1, 2023 and our total working capital was
$1,600,243. We expect to incur losses over the next twelve months.
PROPERTY
Petrax’ principal office is located at 4302 B
street, Washougal, Washington 98671. On April 5, 2023 we entered into a
one-year renewable lease for then Dubai Multi Commodity Center (DMCC) office
space for $$5,000 per month. The lease agreement also provides that we are
responsible for one hundred percent (100%) of monthly office expenses. The
lease expires on April 4, 2024, and is renewable for an additional year. The
Company believes that
this space will
be sufficient for its needs for the period ending April 4, 2023 or until such
time as Company growth necessitates the need to find larger office space. At
such time, Petrax does not anticipate purchasing any
real estate, nor, does it anticipate purchasing any real property for its
office since there are widely available offices for lease in the DMCC.
LEGAL PROCEEDINGS
No proceedings
are pending to which the Company or any of its property is subject, nor to the
knowledge of the Company, are any such legal proceedings threatened against the
Company.
BOARD OF
DIRECTORS & MANAGEMENT
Executive
Officer and Director
Our executive
officer and director, and his age and positions as of the date of this
memorandum, are as follows:
|
|
|
|
Name
|
Age
|
Position
|
|
Mr. Frank T. Khoie
Mr. Alex Root
Mr. Vincent Loh
Mr. Kourosh (John) Khoie
|
71
54
49
23
|
Chairman of the Board &
Executive Chairman
Board member, CEO &
Secretary/Treasurer
Board Member &
Head of Singapore Unit
Board Member &
Chief Technology Officer
|
In the first
shareholders meeting held on April 15, 20223 Mr. Frank Khoie was elected as the
Chairman of the Board and Executive Chairman, Mr. Alex Root was elected to
serve as our CEO, Secretary and Treasurer of Petrax
Global Corp. Mr. Vincent Loh was elected as Board
Member and serve as head of Singapore unit, and Mr. Kourosh John Khoie was
elected as Board Member, and to serve as Chief Technology Officer and serve at
the Houston Unit.
EXECUTIVE COMPENSATION
On January 1, 2023,
the Company entered into an employment agreement with the following parties:
·
Mr. Frank Khoie to serve as
Chairman of the Board and Executive Chairman of the company for the annual
salary of $300,000.
·
Mr. Alex Root, to serve as
the Chief Executive Officer, Secretary and Treasurer of the company for annual
salary of $180,000
·
Mr. Vincent Loh, to serve as Board Member and head of Singapore unit
for annual salary of $120,000
·
Mr. Kourosh John Khoie, to
serve as Board Member and Chief Technology Officer for annual salary of
$120,000
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following
table sets forth, as of the date of this memorandum, the number of shares of
common stock owned of record and beneficially by executive officers, directors,
persons who hold 5% or more of our outstanding common stock, and by all
officers and directors as a group:
|
|
|
|
|
|
Number of Shares
|
Percentages
|
|
Name and Address (1)(2)
|
Owned Beneficially
|
Before Offering
|
After Offering
|
|
|
|
|
|
|
Frank T. Khoie
|
170,000,000
|
85%
|
75.0%
|
|
Alex Root
Vincent Loh
Kourosh John Khoie
All traders’ officers and
as a group
|
20,000,000
2,000,000
2,000,000
6,000,000
|
10%
1%
1%
3%
|
9.0%
0.8%
0.8%
2.4%
|
|
TOTALS
|
200,000,000
|
100%
|
88%
|
(1)
The persons named
in the above table have sole voting and investment power with respect to all
shares of common stock shown as beneficially owned by them.
(2)
Business Address
is 4302 B STREET, WASHOUGAL, WI 98671
[This
space intentionally left blank]
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
DESCRIPTION OF CAPITAL STOCK
We have
authorized capital stock consisting of 500,000,000 shares of common stock,
$1.00 par value per share.
Common
Stock
We are authorized
to issue 500,000,000 shares of common stock, par value $1.00 per share.
As of June 1, 2023, we had 235,000,000 shares of common stock issued and
outstanding. All of these shares are validly authorized and issued, fully paid,
and non-assessable.
The holders of
our common stock are entitled to one vote for each share held of record on all
matters submitted to a vote of our stockholders. Holders of our common stock
are entitled to receive ratably dividends as may be declared by our board of
directors out of funds legally available for such purpose. In the event of our
liquidation, dissolution or winding up, holders of our common stock are
entitled to share ratably in all assets remaining, if any, after payment of
liabilities. Holders of our common stock have no preemptive or other
subscription rights, and there are no conversion rights or redemption or
sinking fund provisions with respect to such shares.
Registration
Rights
We have agreed to
provide certain registration rights with respect to the shares of our common
stock purchased in this offering. We plan to file a registration
statement within 45 days of closing this offering. See the Registration Rights
Agreement attached hereto as Exhibit B.
SHARES
ELIGIBLE FOR FUTURE SALE
Future sales of
substantial amounts of our common stock could adversely affect prices of our
common stock prevailing from time to time, and could impair our ability to
raise capital through the sale of equity securities.
Upon completion
of this offering, assuming the sale of 100,000,000 shares, there will be
400,000,000 shares of common stock outstanding. All of the shares sold in
this offering will be issued pursuant to exemptions from registration under the
Securities Act. All such shares will constitute restricted securities as
that term is defined by Rule 144 of the Securities Act and will bear
appropriate legends, restricting transferability.
Restricted
securities may not be sold except pursuant to an effective registration
statement filed by the Company or an applicable exemption from registration,
including an exemption under Rule 144 promulgated under the Securities Act.
In general, under
Rule 144 as currently in effect, a person (or persons whose shares are
aggregated), other than a person who has been an affiliate of the Company
within a 90-day period prior to the date of sale, who owns shares that were
purchased from us (or any affiliate), may sell such shares after a holding
period of at least six months in compliance with the applicable requirements of
Rule 144. Following a holding period of one year, non-affiliates may sell
shares subject to reduced requirements as set forth in Rule 144.
Affiliates of the Company are subject to similar restrictions, together
with certain additional restrictions that they will only be entitled to sell
within any three-month period a number of shares that does not exceed 1% of the
then outstanding shares of our common stock. Additional requirements are
also applicable to Affiliate sales following a holding period of one year.
Sales under Rule 144 are also subject to certain manner of sale
provisions, notice requirements and the availability of current public
information about us.
As of the date of
this memorandum, all of the currently issued and outstanding shares have been
held by our shareholders for at least six months and therefore should be
considered to be eligible for sale in compliance with the terms, conditions and
requirements of Rule 144.
Our officers and
directors will sell or arrange for the sale of the shares of our common stock
being offered herein. The shares will be offered on a “best-efforts”, no
minimum basis. The offering will remain open until September 30, 2023 unless
the offering is completed or terminated earlier in our sole discretion.
We may extend the offering for an additional ninety (90) days in
our sole discretion. Our officers and directors will not receive any
sales commissions or compensation, other than their regular salary or fee, if
any, for shares of our common stock sold by them.
The shares are
offered by us subject to prior sale, subject to certain conditions including
prior approval of certain legal matters by our counsel, subject to our right to
accept or reject subscriptions in our sole discretion and subject to withdrawal
or modification of such offer without notice.
Prior to the
offering, there has been no public market for our common stock and no such
market is expected to develop with respect to our common stock unless and until
we complete a public offering, if ever. We determined the price of $.05
per share of our common stock in this offering. The factors which we considered
in determining the offering price include, among others, our past, present and
projected results of operations, the future prospects for the industry in which
we compete and/or propose to compete, the quality of our management, the
current market prices of similar securities of early-stage companies and the general
condition of the securities markets at the time of the offering, as well as the
information generally set forth in this memorandum regarding us. The
offering price however, should not be considered as an indication of the actual
value of our common stock. After completion of this offering, the market
price of our common stock is subject to change as a result of market conditions
and other factors. An investor in shares of our common stock in this
offering will incur substantial and immediate dilution in the net tangible book
value per share of common stock from the price they pay for such share.
See the section entitled “Risk Factors, Risk Related to This Offering”
elsewhere in this memorandum.
Each prospective
investor must complete and submit the Subscription Agreement, and Purchaser
Representative Questionnaire, if applicable, both of which are included
in Exhibit A attached hereto.
LEGAL MATTERS
The validity of
the shares of common stock offered hereby will be passed upon by William Reichert
Esq.
EXPERTS
ABK Auditors, has
audited our financial statements for the year and has reviewed the balance
sheet of Petrax Global Inc., as of June 1, 2023, and
the related statements of loss, stockholders’ deficiency and cash flows for the
period from January 30 to June 1, 2023, as set forth in their report.
This memorandum
does not contain all of the information with respect to the various agreements
and other documents referred to herein. The delivery of this memorandum
at any time does not imply that the information contained herein is correct as
of any time subsequent to the date hereof. For further information with
respect to us and the shares of common stock being offered hereby, any
prospective purchaser should contact Mr. Alex Root at Petrax
Global Inc., 4302 B Street, Washougal, WA 98671 or at (360) 450 8724.
