Unless specifically set forth to the contrary, when used in this registration statement the terms “NuState", "we"", "our", the "Company" and similar terms refer to NuState Energy Holdings, Inc., a Nevada corporation. In addition, when used herein and unless specifically set forth to the contrary, “2012” refers to the year ended June 30, 2012 and “2011” refers to the year ended June 30, 2011.

Description of Business

We do not have any business or operations and are considered a "shell" company under Federal securities laws. We are actively seeking to acquire assets or shares of an entity actively engaged in business which generates revenues, in exchange for our securities. Our purpose is to seek, investigate and, if such investigation warrants, acquire an interest in business opportunities presented to us by persons or firms who or which desire to seek the perceived advantages our company may offer. We will not restrict our search to any specific business, industry, or geographical location and we may participate in a business venture of virtually any kind or nature. This discussion of the proposed business is purposefully general and is not meant to be restrictive of our virtually unlimited discretion to search for and enter into potential business opportunities. Management anticipates that it may be able to participate in only one potential business venture because we have nominal assets and limited financial resources. This lack of diversification should be considered a substantial risk to our stockholders because it will not permit us to offset potential losses from one venture against gains from another.

As of May 7, 2013, we had less than $1,000 cash on hand. We anticipate a monthly operating burn rate of approximately $57,000 per month post-registration, as compared to our pre-registration monthly operating burn rate of $40,000. Based on this burn rate, we will run out of funds immediately without additional capital. We estimate that we must raise additional capital of $564,000 in order to continue operations, and an additional $120,000 to implement our plan of operations.

The accompanying financial statements have been prepared on a going concern basis. We used net cash in its operating activities of approximately $90,000 during the six-month period ended December 31, 2012 and had a working capital deficit of approximately $4,600,000 at December 31, 2012, consisting of $154 in current assets and $4,591,641 in current liabilities.  Our auditors have issued a going concern opinion, as our ability to continue as a going concern is dependent upon our ability to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due, to fund possible future acquisitions, and to generate profitable operations in the future, once a merger with an operating company is consummated. Our plans may continue to provide for our capital requirements by issuing additional equity securities and debt and we will continue to find possible acquisition target. The outcome of these matters cannot be predicted at this time and there are no assurances that if achieved, we will have sufficient funds to execute our business plan or generate positive operating results.

New Business Opportunity

●

the available technical, financial and managerial resources;

●

working capital and other financial requirements;

●

history of operations, if any;

●

prospects for the future;

●

nature of present and expected competition;

●

the quality and experience of management services which may be available and the depth of that management;

●

the potential for further research, development, or exploration;

●

specific risk factors not now foreseeable but which then may be anticipated to impact our proposed activities;

●

the potential for growth or expansion;

●

the potential for profit;

●

the perceived public recognition of acceptance of products, services, or trades; name identification; and

●

other relevant factors.

We will use the details listed above to evaluate and select a business opportunity. In evaluating and selecting a business opportunity, we will use a multi-step process consisting of the following:

 

Identify Potential Merger or Acquisition Candidates

In August 2011, the Company entered into a Share Exchange Agreement (“SEA”) with GLINS International NV (“GLINS”), a Curacao company doing business in the country of Suriname, which would have resulted in a change of control. In December 2011, the closing date of the SEA was extended to July 31, 2012. By mutual agreement, the SEA was terminated in August 2012. The Company continues to have relationships throughout the country of Suriname and anticipates developing new business arrangements in the future. We have not identified a potential merger or acquisition candidate at this time. Our search for a business opportunity is not limited to the country of Suriname.

The Country of Suriname General Data

The Republic of Suriname is a country in the north-east part of South America bordered by two rivers, the Corantijne River at the west (Guyana) and the Marowijne River at the east (French Guyana). Suriname has a coastline of about 350 kilometers and the distance from north to south is about 450 kilometers. Most of the population lives along the coastline in the capital city of Paramaribo. In total, an estimated 566,846 people live in Suriname as of July 2013.

 

2.

Settle litigation,

Since filing its Form 10-Q for the quarterly period ended September 30, 2008, total liabilities have decreased by $5,096,309 or 53% from $9,687,950 on September 30, 2008 to $4,591,641 on December 31, 2012.

As part of an agreement entered into with Rentar Environmental Solutions, Inc. (“Rentar”) in April 2010, the Company agreed to share with Rentar all right, title and interest in and to intellectual properties and software, My Driver’s Seat, which it had developed for the worldwide transportation and security industries and had sold in April 2008 to Rentar Logic, a Delaware corporation incorporate Rentar. The Company’s intellectual property also includes two patents titled “Dynamic and Predictive Information System and Method for Shipping Assets and Transport” assigned to it by the inventors, former officers of the Company. The Company’s management believes that this intellectual property may, with some further development, become a viable business opportunity.

 

Licensing Use of Intellectual Property

We are currently discussing the potential licensing of our software, My Driver’s Seat, with certain third-parties.

At May 7, 2013, we had 1 full time employee.

 

Our consolidated financial statements have been prepared assuming we will continue as a going concern. Since inception we have experienced recurring losses from operations, which losses have caused an accumulated deficit of approximately $40 million as of December 31, 2012. These factors, among others, raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty. However, we anticipate that we will continue to incur losses in future periods until we are successful in completing a business combination with an operating entity, with an expected monthly burn rate of $40,000. If for some reason we are not able to consummate a business combination within a reasonable period of time, we may not have sufficient resources to continue meeting our reporting obligations with the Securities and Exchange Commission or other obligations which arise from our minimal operations. If we were to fail to continue to meet our SEC reporting obligations the attractiveness of our vehicle to an operating company would be severely diminished and our ability to consummate a business combination would be in jeopardy.

Our working capital deficit was $4,591,487 as of December 31, 2012. This deficit consists of $154 in current assets, offset by $4,591,641 in current liabilities. We do not have any liquid or other assets that can be liquidated to pay our current liabilities while we continue to incur additional liabilities to our officer and certain service providers who are working to prepare the documents required to be filed with the Securities and Exchange Commission to enable our common shares to be registered for trading. Since we currently have limited operations, the only ways we have of paying our current liabilities are to issue our common or preferred shares to our creditors or to issue unsecured promissory notes which may include certain features such as convertibility into common or preferred shares or warrants to purchase additional common or preferred shares in the future.

We currently do not have sufficient capital to finance the anticipated recurring costs of being a publicly-traded company.

As of May 7, 2013, we had less than $1,000 cash on hand. We anticipate incurring incremental annual costs of approximately $180,000 related to being a publicly-traded company. We currently do not have sufficient resources to finance these costs, and will need to raise additional capital to support our public-company-related activities. If we are unable to raise sufficient capital, we may fail to comply with current reporting regulations.

We may still have some exposure to creditors of two of our subsidiaries which filed for bankruptcy.

 

Unpaid creditors of our subsidiaries may look to us as a target to recover on their claims under any number of legal theories, including piercing the corporate veil, breach of fiduciary duty, and deepening insolvency. We also may find that we have exposure to the subsidiaries’ creditors under various state and federal statutes, or under contracts among the parties.

 

We have $1,107,900 of accrued compensation as of December 31, 2012 and we do not have the funds necessary to pay these obligations.

In addition to funding our operating expenses, we need capital to pay accrued compensation totaling approximately $1.1 million. The existence of these obligations provides additional challenges to us in our efforts to raise capital to fund our operations. If we are unable to restructure these liabilities and we are unable to raise the capital necessary to satisfy the obligations, it is possible we will be forced to cease operations.

We have $2,815,973 of convertible notes, notes payable, and accrued interest as of December 31, 2012 which is presently past due and we do not have the funds necessary to pay these obligations.

In addition to funding our operating expenses, we need capital to pay various debt obligations totaling approximately $3.1 million as of December 31, 2012 which are either currently past due or which are due in the current fiscal year. Currently, there are $1,452,311 principal amount of the convertible notes payable which are past due, $265,241 principal of the notes payable which are past due, and 1,098,421 of accrued interest which are past due. The interest on the past due principal amounts will continue to accrue monthly at their stated rates. Holders of past due notes do not have a security interest in our assets. The existence of these obligations provides additional challenges to us in our efforts to raise capital to fund our operations. If we are unable to restructure these notes and we are unable to raise the capital necessary to satisfy the obligations, it is possible we will be forced to cease operations.

We have $411,400 of accrued dividends as of December 31, 2012 and we may not be able to settle this obligation in cash or stocks.

In addition to funding our operating expenses, we need capital to pay accrued dividends totaling approximately $411,400 as of December 31, 2012. The existence of these obligations provides additional challenges to us in our efforts to raise capital to fund our operations. If we are unable to raise the capital necessary to satisfy the obligations, it is possible we will be forced to cease operations.

Our internal control over financial reporting was considered ineffective as of June 30, 2012, and may continue to be ineffective in the future, which could result in our financial statements being unreliable, government investigation or loss of investor confidence in our financial reports.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, and the SEC rules promulgated thereunder, we are required to furnish an annual report by our management assessing the effectiveness of our internal control over financial reporting. This assessment must include disclosure of any material weaknesses in our internal control over financial reporting identified by management. Management's reports as of the year ended June 30, 2012 identified several material weaknesses and concluded that we did not have effective internal control over financial reporting. Ineffective internal controls can result in errors or other problems in our financial statements. Even if material weaknesses identified do not cause our financial statements to be unreliable, if we continue to be unable to assert that our internal controls are effective, our investors could still lose confidence in the accuracy and completeness of our financial reports, which in turn could cause our stock price to decline. Failure to maintain effective internal control over financial reporting could also result in investigation or sanctions by regulatory authorities. We will be unable to achieve acceptable internal controls with only one officer and director.  

In the event that our independent registered public accounting firm is unable to rely on our internal controls in connection with their audit of our financial statements, and in the further event that they are unable to devise alternative procedures in order to satisfy themselves as to the material accuracy of our financial statements and related disclosures, it is possible that we would receive a qualified or an adverse audit opinion on those financial statements which could also adversely affect the market price of our Common Stock and our ability to secure additional financing as needed.

●

competition from other potential acquirers and partners of and investors in potential acquisitions, many of whom may have greater financial resources than we do;

●

in specific cases, failure to agree on the terms of a potential acquisition, such as the amount or price of our acquired interest, or incompatibility between us and management of the Company we wish to acquire; and

●

the possibility that we may lack sufficient capital and/or expertise to develop promising opportunities.

 

Any potential acquisition or merger with a foreign company may subject us to additional risks.

If we enter into a business combination with a foreign company, we will be subject to risks inherent in business operations outside of the United States.  These risks include, for example, currency fluctuations, regulatory problems, punitive tariffs, unstable local tax policies, trade embargoes, risks related to shipment of raw materials and finished goods across national borders and cultural and language differences.  Foreign economies may differ favorably or unfavorably from the United States economy in growth of gross national product, rate of inflation, market development, rate of savings, and capital investment, resource self-sufficiency, and balance of payments positions, and in other respects. The country of Suriname carries several specific risks to business operations; due to the mineral industry’s dominance of country, the local economy is highly vulnerable to mineral price volatility. Additionally, to control rising inflation, the country of Suriname has devalued their local currency by 20% in 2011 in addition to raising local income taxes.  

Economic conditions may affect our ability to obtain financing and to complete a merger or acquisition.

Due to general economic conditions, rapid technological advances being made in some industries, and shortages of available capital, our management believes that there are numerous firms seeking even the limited additional capital which we will need. In the presence of these economic conditions, we may have difficulty raising sufficient capital to support the investigation of potential business opportunities, and to consummate a merger or acquisition. These factors substantially increase the uncertainty, and thus the risk, of investing in our shares.

There are a number of factors related to our common stock which may have an adverse effect on our shareholders.

We are a shell company, and liquidity of shares of our common stock is limited.

The fact that we are a “shell company” within the meaning of certain regulations means that holders of our common stock are subject to certain restrictions on their ability to sell their shares pursuant to the resale exemptions from registration provided by Rule 144 (“Rule 144”) under, or Section 4(1) of, the Securities Act, and this further limits the liquidity of our common stock.  Specifically, holders of shares of common stock of a “shell company” are only permitted to sell their shares of common stock under Rule 144, subject to certain restrictions, starting one year after (i) the completion of a business combination with a private company in a merger or other transaction after which the company would cease to be a “shell company” (as defined in Rule 12b-2 under the Exchange Act) and (ii) the disclosure of certain financial and information regarding the company in relation to which the business combination was consummated on a Current Report on Form 8-K within four business days thereafter.

We are an "emerging growth company," and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our common stock less attractive to investors.

We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act, or the JOBS Act. As part of the JOBS Act, companies with less than $1 billion in gross revenue can qualify as an “emerging growth company.” Therefore, we qualify as an emerging growth company, and we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include, but are not limited to:

We plan to take advantage of the reduced disclosure obligations. Additionally, we will qualify as a “smaller reporting company” and thus have the advantage of not being required to provide the same level of disclosure as larger public companies. Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in the Securities Act for complying with new or revised accounting standards. We have elected not to opt in to Section 107 and, therefore, will not delay adoption of certain accounting standards applicable to public companies. This election is irrevocable.  

We could remain an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier. We could lose our emerging growth status on the earliest of 1) the last day of the first fiscal year in which we have annual gross revenues of $1 billion or more, 2) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt, or 3) the date on which we are deemed to be a “large accelerated filer” as  defined by rule 12b-2 under the Securities Act of 1934, as amended, or the Exchange Act, which would occur if the market value of the Company’s common units that are held by non-affiliates exceeds $700 million as of the last business day of the Company’s most recently completed second fiscal quarter. At this time we expect to remain both a “small reporting company” and an “emerging growth company” for the foreseeable future.

Shareholders with beneficial ownership of at least 5%, senior management and directors have significant ownership of our shares amounting to 88% as of May 7, 2013. This concentration could lead to conflicts of interest and difficulties for non-insider investors effecting corporate changes, and could adversely affect our Company's share price and influence all matters submitted to our Company's shareholders for approval. Accordingly, this concentration of ownership may have the effect of delaying, deferring or preventing a change in control of our Company, impeding a merger, consolidation, takeover or other business combination involving our Company or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of our Company, which in turn could have a material adverse effect on the market price of our shares. Employee, Director and consultant stock options and warrants could lead to greater concentration of share ownership among insiders and could lead to dilution of share ownership which could lead to depressed share prices.

Our common stock is quoted in the over the counter market on the OTC Pink.

Our common stock is quoted on the OTC Pink. OTC Pink offers a quotation service to companies that are unable to list their securities on an exchange or for companies, such as ours, whose securities are not eligible for quotation on the OTC Bulletin Board. The requirements for quotation on the OTC Pink are considerably lower and less regulated than those of the OTC Bulletin Board or an exchange. Because our common stock is quoted on the OTC Pink, it is possible that even fewer brokers or dealers would be interested in making a market in our common stock which further adversely impacts its liquidity.

 

 

The following discussion of our financial condition and results of operation for 2011 through 2012 should be read in conjunction with the financial statements and the notes to those statements that are included elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Item 1A. Risk Factors, Cautionary Notice Regarding Forward-Looking Statements and Business sections in this Form 10. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.

In evaluating and selecting a business opportunity, we intend will consider the following factors:

●

the available technical, financial and managerial resources;

●

working capital and other financial requirements;

●

history of operations, if any;

●

prospects for the future;

●

nature of present and expected competition;

●

the quality and experience of management services which may be available and the depth of that management;

●

the potential for further research, development, or exploration;

●

specific risk factors not now foreseeable but which then may be anticipated to impact our proposed activities;

●

the potential for growth or expansion;

●

the potential for profit;

●

the perceived public recognition of acceptance of products, services, or trades; name identification; and

●

other relevant factors.

We will use the details listed above to evaluate and select a business opportunity. In evaluating and selecting a business opportunity, we will use a multi-step process consisting of the following:

 

We currently engage in limited business activities and have limited cash resources. As such, the costs of investigating and analyzing business combinations will be paid through capital raises. The incremental cost to implement a plan of operations is anticipated to cost approximately $120,000.  We also anticipate incurring costs incremental costs of $180,000 related to the filing of quarterly, annual and other reports with the Securities and Exchange Commission and costs relating to consummating an acquisition. We do not have any firm commitments, however, for the provision of any additional capital to our company to fund these costs.

 

NuState Energy Holdings, Inc.

RESULTS OF OPERATIONS

 

 

 

The decrease in selling, general and administrative expenses during the six-month period ended December 31, 2012, when compared with the prior year, is primarily due to the following:

Gain on Extinguishment of Debt

Gain on extinguishment of debt consists of a gain on extinguishment of discontinued of $1,494,406, which resulted from the deconsolidation of our two subsidiaries which filed for bankruptcy during the three-month period ended December 31, 2012.

Decrease in Fair Value of Derivative Liabilities

Decrease in fair value of derivative liabilities results from the changes in the fair value of the derivative liability due to the application of ASC 815, resulting in either income or expense, depending on the difference in fair value of the derivative liabilities between their measurement dates. The decrease in fair value of derivative liabilities recognized during the six-month period ended December 31, 2012 is primarily due to the setting of a conversion price floor on all outstanding convertible notes payable convertible at a variable rate. The decrease in fair value of derivative liabilities recognized during the six-month period ended December 31, 2011 is primarily due to an increase of our common stock quoted price between measurement dates and during such periods, respectively. Our common stock quoted price is one of the primary assumptions used in the computation of our derivative liabilities.

Interest Expense

Interest expense represents stated interest of notes and convertible notes payable as well as amortization of debt discount. The decrease in interest expense is primarily due to lower amortization of debt discount during the six-month period ended December 31, 2012, when compared to the prior year period. The decrease is primarily due to the issuance of $150,000 in convertible notes payable during fiscal 2011 with embedded conversion features amounting to approximately $107,000, all of which was amortized prior to the six-month period ended December 31, 2012. The embedded conversion features were accounted for as debt discount and amortized over the terms of the related convertible notes, which ranged between 6 and 12 months.

NuState Energy Holdings, Inc. RESULTS OF OPERATIONS
		Year ended June 30, 2012				2011				Increase/ (Decrease) in $ 2012 vs 2011				Increase/ (Decrease) in % 2012 vs 2011
Operating expenses:
Selling, general and administrative			1,042,144				372,189				669,955				180.0	%
Total operating expenses			1,042,144				372,189				669,955				180.0	%
Operating loss			1,042,144				372,189				669,955				180.0	%
Other expense:
Decrease in fair value of derivative liabilities			26,086				14,733				11,353			NM
Interest expense			(307,337	)			(223,572	)			(83,765	)			37.5	%
			(281,251	)			(208,839	)			(72,412	)			34.7	%
Net loss			(1,323,395	)			(581,028	)			(742,367	)			127.8	%

 

Decrease in Fair Value of Derivative Liabilities

Interest Expense

Interest expense represents stated interest of notes and convertible notes payable as well as amortization of debt discount. The increase in interest expense is primarily due to higher amortization of debt discount during fiscal 2011 and 2012. The increase is primarily due to the issuance of $237,000 and $150,000 in convertible notes payable during fiscal 2012 and 2011, respectively, with embedded conversion features amounting to approximately $90,000 and $107,000, respectively, of which approximately $159,000 and $33,000 was amortized during fiscal 2012 and 2011, respectively. The embedded conversion features were accounted for as debt discount and amortized over the terms of the related convertible notes, which ranged between 6 and 12 months. Additionally, interest expense increased due to higher weighted average interest bearing debt during fiscal 2012 when compared to the prior year.

 

Liquidity and Capital Resources

 

 

 

At December 31, 2012 and 2011, 100% of our total assets consisted of cash and cash equivalents.

We cannot ascertain that we have sufficient funds from operations to fund our ongoing operating requirements through June 30, 2013. As of May 7, 2013 we had less than $1,000 on hand. We may need to raise funds to enhance our working capital and use them for strategic purposes. If such need arises, we intend to generate proceeds from either debt or equity financing.

We intend to finance our operations using a mix of equity and debt financing. We do not anticipate incurring capital expenditures for the foreseeable future. We anticipate that we will need to raise approximately $180,000 per year in the near term to finance the recurring costs of being a publicly-traded company, $564,000 to continue operations, and $120,000 to implement a plan of operations, with additional funding necessary to pay our outstanding obligations. In the long-term, we anticipate we will need to raise a substantial amount of capital to complete an acquisition. We are unable to quantify the resources we will need to successfully complete an acquisition. If these funds cannot be obtained, we may not be able to consummate an acquisition or merger, and our business may fail as a result.

Going Concern

The accompanying financial statements have been prepared on a going concern basis. The Company has used net cash in its operating activities of approximately $90,000 and $250,000 during the six-month period ended December 31, 2012 and the year ended June 30, 2012, respectively, and has a working capital deficit of approximately $4.6 million and $6.2 million at December 31, 2012 and June 30, 2012, respectively. The Company's ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, to fund possible future acquisitions, and to generate profitable operations in the future, once a merger with an operating company is consummated. Management plans may continue to provide for its capital requirements by issuing additional equity securities and debt and the Company will continue to find possible acquisition target. The outcome of these matters cannot be predicted at this time and there are no assurances that if achieved, the Company will have sufficient funds to execute its business plan or generate positive operating results.

 

		Six-months ended December 31,
		2012				2011
Cash flows from operating activities
Net loss from continuing operations		$	(339,657	)		$	(534,303	)
Non-cash adjustments
Amortization of debt discount			3,712				82,087
Decrease in fair value of derivative liability			(5,556	)			(60,591	)
Other			-				11,500
Changes in assets and liabilities
Accrued interest			120,228				72,652
Accrued compensation			119,500				111,800
Other			11,917				197,500
Net cash used in continuing operations			(89,856	)			(119,355	)
Cash flows from financing activities
Proceeds from issuance of common stock			35,000				-
Proceeds from issuance of convertible notes payable			55,000				125,000
			90,000				125,000
Net variation in cash		$	144			$	5,645

Six months ended December 31, 2012

The increase in accrued compensation during the six-month period ended December 31, 2012 is primarily due to slower payments to our officers resulting from a lack of resources to pay such payables timely, offset by the forfeiture of $282,000 in compensation by one of our officers and the satisfaction of $150,000 to the same officer through the cashless exercise of stock options. The increase in accrued interest during the six-month period ended December 31, 2012 is primarily attributable to the issuance of interest-bearing convertible notes payable during the prior year.

Cash generated from financing activities consists of proceeds of $55,000 from the issuance of convertible notes payable and proceeds of $35,000 from the issuance of common stock during the six-month period.

Six months ended December 31, 2011

The increase in accrued interest and accrued compensation during the three-month period ended December 31, 2011 resulted primarily from our lack of financial resources to pay such payables.

Cash provided by financing activities consisted of proceeds of $125,000 from the issuance of convertible notes payable during the six-month period.

Year ended June 30, 2012
Sources of liquidity and capital resources
		Ending balance at June 30,							Average balance during
		2012				2011				2012				2011
Cash		$	10			$	12,896			$	6,453			$	6,466
Other receivable			-				315,000				157,500				315,000
Notes and convertible notes payable, excluding debt discount			2,923,725				2,364,389				2,644,057				1,888,521

Year ended June 30, 2012

Seasonality

Inflation

Critical Accounting Policies and Significant Estimates

 

The following table sets forth information available to us as of May 7, 2013 with respect to the beneficial ownership of the outstanding shares of each class of our voting stock by:

Unless otherwise indicated, the business address of each person listed is in care of 1201 Main St., Suite 1980, Columbia, SC 29201. We believe that all persons named in the table have sole voting and investment power with respect to all shares beneficially owned by them. Under securities laws, a person is considered to be the beneficial owner of securities he owns and that can be acquired by him within 60 days from May 7, 2013 upon the exercise of options, warrants, convertible securities or other understandings. We determine a beneficial owner's percentage ownership by assuming that options, warrants or convertible securities that are held by him, but not those held by any other person and which are exercisable within 60 days of May 7, 2013, have been exercised or converted.

Name of Beneficial Owner		Amount and Nature of Beneficial Ownership				% of Class				% Voting Control (1)
Common Stock:
Kevin Yates (2)			115,000,000				22.6	%			22.0	%
All officers and directors as a group			115,000,000				22.6	%			22.0	%
(one person)
The Amber Capital Fund Ltd (3)			48,298,613				9.0	%			9.3	%
Carmelo Luppino (4)			70,776,289				13.1	%			13.6	%
Michael Garnick (5)			42,107,759				8.3	%			8.1	%
Arthur Notini (6)			35,683,678				6.8	%			6.8	%
Harvey Altholtz (7)			39,420,000				7.6	%			7.6	%
			15

Robert F. Green, Jr. (8)			28,015,422				5.5	%			5.4	%
Elisha Cheung (9)			27,970,738				5.4	%			5.4	%
Frank Reilly (10)			51,360,666				10.2	%			9.8	%
Series Y Convertible Preferred Stock:
Kevin Yates			-				*				*
All officers and directors as a group			-				*				*
(one person)
Richard Hersh			87,000				100	%			3.3	%
Total			458,720,565								88.18	%

 

 

Name	Position	Age	Date First Elected or Appointed
Mr. Kevin Yates	Chairman of the Board of Director	47	April, 2010
	Chief Executive Officer		July, 2010

Business Experience

For the past eight years, Mr. Yates has served as President and Director of PocketMD. Mr. Yates has also served as Director of Mobile Software Team, LLC from August 2008 through July 2012, and C3I  Services, LLC from July 2012 to present.

Mr. Yates’ devotes approximately 90% of his time to the business and affairs of our company. Mr. Yates experience in working with public companies’ operational strategy and market plan makes him an asset to the Company.

Summary Compensation Table

The following table summarizes all compensation recorded by us in the two completed fiscal years for:

Name and principal position	Year		Salary ($)				Other Compensation ($)				Stock Awards ($)				Option Awards ($)				Total ($)
CEO	2011		$	9,500			$	36,000	(1)			N/A				N/A			$	45,500
Kevin Yates, Chairman of the Board
CEO	2012		$	1,500			$	164,400	(1)			N/A				N/A			$	165,900
Kevin Yates, Chairman of the Board
Interim COO
Will Williams	2012		$	120,000				N/A				N/A			$	5,000	(2)		$	125,000

 

 

●

Termination clause: the earliest of April 30, 2012, the date we become a reporting company, or upon 30 day written notice by each party. Mobile Software used the proceeds from the consulting agreement to pay certain of our operating expenses.

Will William’s consulting agreement

The agreement was terminated, effective July 1, 2012.

Stock Option Plan

 

 

The following table provides information concerning unexercised options, stock that has not vested, and equity incentive plan awards for each named executive officer outstanding at June 30, 2012:

Option Awards

Stock Awards

Name

Number of securities underlying unexercised options (#) exercisable

Number of securities underlying unexercised options (#) unexercisable

Equity incentive plan awards: Number of securities underlying unexercised unearned options (#)

Option exercise price ($)

Option expiration date

Number of shares or units of stock that have not vested (#)

Market value of shares or units of stock that have not vested ($)

Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#)

Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested (#)

Kevin Yates

60,000,000

0.0025

06/05/13

5,000,000

(1)

0.005

09/01/14

1)

5,000,000 warrants, exercisable at $0.005 per share, expiring in September 2014, issued to Mobile Software Team, a related party by common ownership and management with the Company.

 

 

Director Compensation

Other than compensation arrangements, we describe below transactions, during our last fiscal year, to which we were a party, in which:

·

The amounts involved exceeded or will exceed the lesser of $120,000 or 1% of the average of our total assets at year end for the last two completed fiscal years; and

·

Any of our directors, executive officers, or holders of more than 5% of our common stock, or any member of the immediate family of the foregoing persons, had or will have a direct or indirect material interest.

Warrants

During fiscal 2012 we issued warrants to purchase 5,000,000 shares of our common stock, with an exercise price of $0.005 per share and expiring in September 2014, to Will Williams, our interim chief operating officer, with a fair value of $5,000.

Convertible Notes Payable

During fiscal 2012 we issued a $10,000 convertible note payable to Arthur Notini, a holder of more than 5% of our common stock. The convertible note payable matured in April 2013 and is currently past due. The convertible note bears interest at a rate of 12% per annum, payable upon conversion. Interest continues to accrue at 12% per annum monthly until conversion. The convertible note is convertible into shares of our common stock at a rate equal to 80% of the average closing price of our common stock for the 30 trading days immediately preceding the date of conversion. In no event shall the conversion price per share be less than $0.005 or more than $0.10. As of December 31, 2012, $10,814 of principal and accrued interest is outstanding on this convertible note.

During fiscal 2012 we issued a $25,000 convertible note payable to Arthur Notini, a holder of more than 5% of our common stock. The convertible note payable matures in December 2013 and bears interest at a rate of 18% per annum, payable upon conversion. The convertible note is convertible into shares of our common stock at a rate equal to the lesser of: 1)80% of the average closing price of our common stock for the 30 trading days immediately preceding the date of conversion, or 2) $0.005. As of December 31, 2012, $29,728 of principal and accrued interest is outstanding on this convertible note.  

During fiscal 2012 we issued a $10,000 convertible note payable to Elisha Cheung, a holder of more than 5% of our common stock. The convertible note payable matured in August 2012 and is currently past due. The convertible note bears interest at a rate of 12% per annum, payable upon conversion. Interest continues to accrue at 12% per annum monthly until conversion. The convertible note is convertible into shares of our common stock at a rate equal to the lesser of: 1)20% of the market price of our common stock for the 10 trading days immediately preceding the date of conversion, or 2) $0.005. As of December 31, 2012, $10,820 of principal and accrued interest is outstanding on this convertible note.

During fiscal 2012 we issued a $12,000 convertible note payable to Robert Green, Jr., a holder of more than 5% of our common stock. The convertible note payable matured in April 2013 and is currently past due. The convertible note bears interest at a rate of 12% per annum, payable upon conversion. Interest continues to accrue at 12% per annum monthly until conversion. The convertible note is convertible into shares of our common stock at a rate equal to the lesser of: 1)20% of the market price of our common stock for the 10 trading days immediately preceding the date of conversion, or 2) $0.005. As of December 31, 2012, $12,984 of principal and accrued interest is outstanding on this convertible note.

During fiscal 2012 we issued two $25,000 convertible notes payable, aggregating $50,000, to The Amber Capital Fund Ltd., a holder of more than 5% of our common stock. The convertible note payable matured in April 2013 and is currently past due. The convertible note bears interest at a rate of 12% per annum, payable upon conversion. Interest continues to accrue at 12% per annum monthly until conversion. The convertible note is convertible into shares of our common stock at a rate equal to 80% of the average closing price of our common stock for the 30 trading days immediately preceding the date of conversion. In no event shall the conversion price per share be less than $0.005 or more than $0.10. As of December 31, 2012, $55,891 of principal and accrued interest is outstanding on these convertible notes.

During fiscal 2012 we issued a $25,000 convertible note payable to Carmelo Luppino, a holder of more than 5% of our common stock. The convertible note payable matured in December 2012 and is currently past due. The convertible note bears interest at a rate of 18% per annum, payable upon conversion. The convertible note is convertible into shares of our common stock at a rate equal to the lesser of: 1)80% of the average closing price of our common stock for the 30 trading days immediately preceding the date of conversion, or 2) $0.005. As of December 31, 2012, $28,382 of principal and accrued interest is outstanding on this convertible note.  

During fiscal 2012 we issued a $20,000 convertible note payable to Carmelo Luppino, a holder of more than 5% of our common stock. The convertible note payable matured in April 2013 and is currently past due. The convertible note bears interest at a rate of 12% per annum, payable upon conversion. Interest continues to accrue at 12% per annum monthly until conversion. The convertible note is convertible into shares of our common stock at a rate equal to 80% of the average closing price of our common stock for the 30 trading days immediately preceding the date of conversion. In no event shall the conversion price per share be less than $0.005 or more than $0.10. As of December 31, 2012, $21,641 of principal and accrued interest is outstanding on this convertible note.

During fiscal 2012 we issued a $25,000 convertible note payable to Elisha Cheung, a holder of more than 5% of our common stock. The convertible note payable matures in December 2013 and bears interest at a rate of 18% per annum, payable upon conversion. The convertible note is convertible into shares of our common stock at a rate equal to the lesser of: 1)80% of the average closing price of our common stock for the 30 trading days immediately preceding the date of conversion, or 2) $0.005. As of December 31, 2012, $29,629 of principal and accrued interest is outstanding on this convertible note.  

Common Stock

During fiscal 2012 we issued 2,000,000 shares of our common stock to Carmelo Luppino, a holder of more than 5% of our common stock, upon conversion of a $10,000 convertible note payable.

Our current market price on OTC Pink was $0.0006 on May 7, 2013.

Market Information

Our common shares are quoted on the OTC Pink Quotation System under the symbol “NSEH”, but trade infrequently.

Quarter Ended	High	Low
December 31, 2012	0.0012	0.0005
September 30, 2012	0.0018	0.0005
June 30, 2012	0.0018	0.0007
March 31, 2012	0.0019	0.0005
December 31, 2011	0.0029	0.0003
September 30, 2011	0.0035	0.0007
June 30, 2011	0.0032	0.0011
March 31, 2011	0.0036	0.0016
December 31, 2010	0.0046	0.0011
September 30, 2010	0.006	0.001

Holders

As of May 7, 2013 there were 435 shareholders of record.

Dividends

We have not paid any cash dividends since 2008 and do not anticipate or contemplate paying dividends in the foreseeable future, with the exception of dividends on our Series B Preferred Shares. It is the present intention of management to utilize all available funds for the development of our business. The holders of Series B Preferred Stock are entitled to receive annual dividends of 10% payable in cash or shares of our common stock, at our option.

At December 31, 2012, we have not declared the payment of dividends on the Series B Preferred Stock aggregating approximately $411,400.

 

 

The following table sets forth securities authorized for issuance under any equity compensation plans approved by our stockholders as well as any equity compensation plans not approved by our stockholder as of June 30, 2012.

		Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)				Weighted average exercise price of outstanding options, warrants and rights (b)				Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Plan category
Plans approved by our shareholders:
2012 Employee Stock Compensation Plan			0				0				0
Plans not approved by stockholders			0				0				0

 

During the period of November 30, 2010 to August 8, 2011, we issued convertible notes payable to ten accredited investors and one company at a fair value of $200,000. These notes are convertible at a rate equal to 80% of the average closing price of the Common Stock for the 30 trading days immediately preceding the date of conversion. Notwithstanding the foregoing, in no event shall the conversion price per share be less than $0.005 or more than $0.10. The convertible notes mature between August 2011 and May 2012. Upon conversion, these convertible notes payable holders are entitled to 20,000,000 warrants with an exercise price of $0.025 per share, expiring 3 years from the date of conversion. This private transaction is exempt from registration under the Securities Act of 1933 in reliance on exemptions provided by Section 4(2) of that Act.

During the three-month period ended December 31, 2011, we issued a convertible note payable to an entity affiliated with the former officer. The note payable is due the earlier of 1) 180 days following our merger with an acquisition candidate or 2) January 1, 2013. If on the due date, the price per share of our common stock is more than $0.05 per share, we have the option to convert such note by issuing shares of our common stock at their then market price. If the obligations under the note are not satisfied by January 1, 2013, the amount payable under the note increases to $150,000. This private transaction is exempt from registration under the Securities Act of 1933 in reliance on exemptions provided by Section 4(2) of that Act.

During the period of November 14, 2011 to September 30, 2012, we issued convertible notes payable to nine accredited investors at a fair value of $277,000. These notes are convertible at a rate equal to 80% of the average closing price of the Common Stock for the 30 trading days immediately preceding the date of conversion. Notwithstanding the foregoing, in no event shall the conversion price per share be less than $0.005 or more than $0.10. The convertible notes mature between September 2012 and June 2013. Upon conversion, these convertible note payable holders are entitled to 27,700,000 warrants with an exercise price of $0.025 per share, expiring 3 years from the date of conversion. This private transaction is exempt from registration under the Securities Act of 1933 in reliance on exemptions provided by Section 4(2) of that Act.

In April 2013, we issued 50,000,000 shares of our common stock to an officer and director to satisfy accrued compensation at a fair value of $250,000. This private transaction is exempt from registration under the Securities Act of 1933 in reliance on exemptions provided by Section 4(2) of that Act.

General

Our authorized capital stock consists of 750,000,000 shares of common stock at a par value of $0.001 per share and 1,000,000 shares of preferred stock, par value $0.01 per share, issuable in such series, and with such designations, rights and preferences as shall be determined by our Board of Directors from time to time. As of December 31, 2012, we have designated the following series of preferred stock:

	Shares Authorized
Preferred B	200,000
Preferred C	20,000
Preferred D	40
Preferred F	500,000
Preferred G	6
Preferred H	1,600
Preferred I	100,000
Preferred J	80
Preferred Y	87,000

Series B Preferred Stock

At December 31, 2012, the Company has not declared the payment of dividends aggregating approximately $411,400.

Series D Preferred Stock

Series F Preferred Stock

Series G Preferred Stock

Series H Preferred Stock

Series I Preferred Stock

Series J Preferred Stock

Series Y Preferred Stock

Common Stock

Holders of shares of common stock are entitled to one vote for each share on all matters to be voted on by the stockholders. Holders of common stock do not have cumulative voting rights. Holders of common stock are entitled to share ratably in dividends, if any, as may be declared from time to time by the Board of Directors in its discretion from funds legally available therefor. In the event of a liquidation, dissolution or winding up of our company, the holders of common stock are entitled to share pro rata all assets remaining after payment in full of all liabilities. Holders of common stock have no preemptive rights to purchase our common stock. There are no conversion or redemption rights or sinking fund provisions with respect to the common stock

 

i

Audited Financial Statements of NuState Energy Holdings, Inc. for the year ending June 30, 2012.

b

Notes to the Financial Statements June 30, 2012

ii

Audited Financial Statements of NuState Energy Holdings, Inc. for the twelve-month period ending June 30, 2011.

a

Financials June 30, 2011

b

Notes to the Financial Statements June 30, 2011

i

Unaudited Financial Statements of NuState Energy Holdings, Inc. for the period ending December 31, 2012 and 2011.

 

 

Exhibit No.

Description of Exhibit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.1	Form of Common Stock Purchase Warrant to Newbridge Securities Corporation for Business Advisory Agreement (10)