CW Petroleum Corp S-1/A, filed Aug 26, 2022

CW Petroleum Corp (CWPE)

S-1/A 2022-08-26

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Added on October 26, 2026

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Wyoming		5172		20-2765559
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification No.)

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

	Per Unit		Total

Public offering price	$	4.75	$	14,999,996.50
Underwriting discount and commissions⁽¹⁾	$	0.38	$	1,199,999.72
Proceeds, before expenses, to us⁽²⁾	$	4.37	$	13,799,996.78

PROSPECTUS SUMMARY	4
THE OFFERING	11
SUMMARY FINANCIAL DATA	14
RISK FACTORS	16
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS	34
USE OF PROCEEDS	36
MARKET FOR OUR COMMON STOCK	37
DIVIDEND POLICY	38
CAPITALIZATION	38
DILUTION	39
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	41
BUSINESS	47
MANAGEMENT	54
EXECUTIVE COMPENSATION	60
DIRECTOR COMPENSATION	63
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	63
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	64
DESCRIPTION OF CAPITAL STOCK	65
SHARES ELIGIBLE FOR FUTURE SALE	70
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO U.S. AND NON-U.S. HOLDERS	71
UNDERWRITING	76
LEGAL MATTERS	81
EXPERTS	81
WHERE YOU CAN FIND MORE INFORMATION	81
INDEX TO FINANCIAL STATEMENTS	F-1

	●	our strategies and objectives;

	●	our ability to meet the Nasdaq listing and maintenance requirements;

	●	our other financial operating objectives;

	●	the availability of qualified employees for business operations;

	●	general business and economic conditions;

	●	our ability to meet our financial obligations as they become due;

	●	the positive cash flows and financial viability of our operations and new business opportunities;

	●	our ability to manage growth with respect to our operations and new business opportunities;

	●	our ability to make new technological improvements and developments to our products;

	●	our ability to enter into new partnerships and license agreements for the use of our refined products; and

	●	our ability to be successful in new markets.

	●	our ability to continue our business as a going concern and our history of operational financial losses;

	●	our status as a small business in a large fragmented industry;

	●	our ability to manage future growth;

	●	our dependence on the services of our CEO, Christopher Williams;

	●	our management’s lack of experience managing a public company;

	●	our lack of establishment of internal controls with respect to our financial reporting;

	●	the additional accounting and legal fees in connection with the preparation of periodic reporting requirements of the Securities Exchange Act of 1934 (the “Exchange Act”);

	●	our financial statements may be materially affected if our estimates prove to be inaccurate as a result of our limited experience in making critical accounting estimates;

	●	general economic, financial and political conditions that are largely out of our control could adversely affect our business, financial condition and results of operations;

	●	volatility in crude oil and wholesale diesel and gasoline costs could adversely affect our business, financial condition and results of operations;

	●	the dangers inherent in the storage and transportation of motor fuel;

	●	a significant decrease in demand for diesel and gasoline, including increased consumer preference for alternative fuels or improvements in fuel efficiency, in the areas we serve would materially affect our revenues and profitability;

	●	the industries in which we operate are subject to seasonal trends;

	●	our operations are subject to stringent environmental laws and regulations;

	●	we are subject to federal laws related to the Renewable Fuel Standard;

	●	we are subject to federal, state and local laws and regulations that govern the product quality specifications of refined petroleum products we purchase, store, transport, and sell to our customers;

	●	we may incur substantial losses and be subject to substantial liability claims as a result of our operations;

	●	most of our competitors have significantly greater financial and marketing resources than we do;

	●	our dependence on four principal suppliers for the majority of our fuel;

	●	our fuel sales are generated under contracts that must be renegotiated or replaced periodically;

	●	the effects of severe weather on our business;

	●	the effects of possible future litigation;

	●	our reliance on our information technology systems to manage numerous aspects of our business;

	●	the effects on our business and reputation from failure to protect sensitive customer, employee or vendor data, whether as a result of cyber security attacks or otherwise;

	●	our reliance on our suppliers to provide trade credit terms to adequately fund our ongoing operations;

	●	the decrease in demand for the fuels we sell resulting from laws, regulations, technological, political and scientific developments regarding climate change;

	●	the negative effects on our business resulting from a climate-related decrease in demand for crude oil;

	●	immediate and substantial dilution as a result of this offering;

	●	the discretion of Mr. Christopher Williams to the use of the net proceeds that we will receive from this offering;

	●	the adverse effects on our share price resulting from shares eligible for future sale;

	●	significant dilution of stockholders due to the issuance of convertible financial instruments through our efforts to obtain financing and satisfy obligations through issuance of additional shares of our Common Stock;

	●	the authority of our board of directors, without stockholder approval, to issue preferred stock with terms that may not be beneficial to Common Stockholders;

	●	our CEO controls all corporate activities and can approve all transactions, including mergers, without the approval of other stockholders.

	●	the ability of our CEO to control our business may limit or eliminate minority stockholders’ ability to influence corporate affairs.

	●	indemnification of officers and directors provided by our Articles of Incorporation;

	●	the lack of payments of cash dividends in the foreseeable future;

	●	the limited trading market of our Common Stock;

	●	the volatility of the market price for our Common Stock;

	●	the status of our Common Stock as “penny stock;”

	●	lack of assurances that our shares, once listed on Nasdaq, will not be subject to potential delisting;

	●	the effects of proposed reverse stock split on our stock price and the liquidity of shares of our Common Stock;

	●	the speculative nature of the Warrants;

	●	no established market for the Warrants;

	●	our Warrant Agreement will designate the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our Warrants;

	●	we may become involved in securities class action litigation;

	●	securities analysts may elect not to report on our Common Stock or may issue negative reports;

	●	uncertainty regarding our ability to achieve profitability and positive cash flow through the commercialization of the products and services we offer or intend to offer in the future;

	●	our need to raise additional financing to fund daily operations and successfully grow our Company

	●	a slowdown or reduction in our sales due to a reduction in demand, unanticipated competition, regulatory issues, or other unexpected circumstances;

	●	uncertainty associated with our reliance on third-parties, such as Magellan Terminals, for fuel inventory;

	●	uncertainty associated with the volatility of oil prices which is affected by world events, including but not limited to Russia’s invasion of Ukraine, decisions of The Organization of the Petroleum Exporting Countries (“OPEC”) and other non-member countries, the ability of U.S. oil producers to increase production, the import decisions of oil refineries, speculation in the oil and gas commodity markets and their effects the prices of diesel fuel and gasoline inventory we can purchase based on the availably of our cash on hand;

	●	our reliance on exemptions from certain governance requirements as a “controlled company” within the meaning of Nasdaq listing standards;

	●	our ability to retain and recruit appropriate employees;

	●	current and future laws and regulations that could adversely affect our business;

	●	general economic uncertainty, included uncertainty associated with the adverse effects of the COVID-19 pandemic (including new and emerging strains and variants), and its unpredictable duration in regions where we have customers, employees, and suppliers; and

	●	the other factors described in “Risk Factors.”

	●	a majority of our board of directors consist of “independent directors” as defined under the rules of the Nasdaq;

	●	our director nominees be selected, or recommended for our board of directors’ selection, by a nominating/governance committee comprised solely of independent directors; and

	●	the compensation of our executive officers be determined, or recommended to our board of directors for determination, by a compensation committee comprised solely of independent directors.

Issuer:		CW Petroleum Corp, a Wyoming corporation.

Offered Securities:		3,157,894 Units, each Unit consisting of one share of our Common Stock and two Warrants, each Warrant to purchase one share of our Common Stock from the date of issuance until the fifth anniversary of such date for $4.75 per share (100% of the public offering price of one Unit). The Units will not be certificated or issued in stand-alone form. The shares of our Common Stock and the Warrants underlying the Units are immediately separable upon issuance and will be issued separately in this offering.

Offering Price per Unit:		$4.75 per Unit.

Over-Allotment Option:		We have granted the underwriters a 45-day option to purchase up to an aggregate of 473,684 additional shares at $4.74 per share and/or 947,368 additional Warrants at $0.005 per Warrant, less underwriting discounts and commissions, on the same terms as set forth in this prospectus, solely to cover over-allotments, if any.

Description of Warrants:		Each Warrant will have an exercise price per share of $4.75 (100% of the public offering price per Unit), will be exercisable immediately, and will expire on the fifth anniversary of the original issuance date. Each Warrant is exercisable for one share of Common Stock, subject to adjustment in the event of stock dividends, stock splits, stock combinations, reclassifications, reorganizations, or similar events affecting our Common Stock as described herein. Each holder of the Warrants will be prohibited from exercising its Warrant(s) for shares of our Common Stock if, as a result of such exercise, the holder, together with its affiliates, would own more than 4.99% of the total number of shares of our Common Stock then issued and outstanding. However, any holder may increase such percentage to any other percentage not in excess of 9.99%. The terms of the Warrants will be governed by a Warrant Agent Agreement, dated as of the effective date of this offering, between us and Transfer Online, Inc., as the warrant agent (the “Warrant Agent”). This offering also relates to the offering of the shares of Common Stock issuable upon the exercise of the Warrants (the “Warrant Shares”). For more information regarding the Warrants, you should carefully read the section titled “Description of Securities—Warrants” in this prospectus.

Common Stock Outstanding After Offering ^(1):		9,275,189 shares, or 9,748,873 shares of if the underwriters exercise their Over-Allotment Option in full in shares, in each case assuming none of the Warrants issued in this offering are exercised.

Reverse Stock Split:		We will complete a 20-for-1 reverse split of our Common Stock on September 23, 2022. The purpose of the reverse stock split is to meet minimum stock price requirement of the Nasdaq Capital Market. All share numbers in this prospectus have been adjusted to give effect to this reverse split.

Nasdaq Capital Market Listing and Symbols:		Our Common Stock is presently quoted on the over the counter markets under the symbol “CWPE.” We have applied to list our Common Stock and Warrants on Nasdaq under the symbols “CWPE” and “CWPEW,” respectively. No assurance can be given that Nasdaq will approve our listing application, and if approved, that we will be able to maintain that listing, or that a trading market will develop for the Common Stock and Warrants. We will not proceed with this offering in the event the Common Stock and the Warrants are not approved for listing on Nasdaq.

Lock-Up Agreements:		We and our directors, officers and certain stockholders have agreed with the underwriter not to offer for sale, issue, sell, contract to sell, pledge or otherwise dispose of any of our Common Stock or securities convertible into Common Stock for a period of 360 days after the date of this prospectus. See “Underwriting-Lock-Up Agreements” on page 78 of this prospectus.

Dividend Policy:		We have not historically paid dividends on our Common Stock and do not intend to do so in the future.

Controlled Company:		Our CEO, Christopher Williams, owns 5,592,657 shares of Common Stock, and, therefore, Mr. Williams (and not investors in this offering) will, after the offering, control all corporate actions, including the election of our board of directors, the adoption of amendments to our Articles of Incorporation and Bylaws, and the approval of any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction. After completion of this offering and the application of net proceeds therefrom, Mr. Williams will beneficially own approximately 59.91% of the voting power of our capital stock (or approximately 57.02% if the underwriters exercise in full their Over-Allotment Option). As a result, we will be a “controlled company” within the meaning of the corporate governance standards of the Nasdaq. Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirement that:

		Following this offering, we intend to utilize some of these exemptions. As a result, we will not have a majority of independent directors. Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the Nasdaq. However, our audit committee, compensation committee, and nominating and governance committee will consist entirely of independent directors.

Risk Factors:		An investment in our securities involves a high degree of risk. You should read this prospectus carefully, including the section entitled “Risk Factors” starting on page 16 of this prospectus and the consolidated financial statements and the related notes to those statements included in this prospectus, before deciding to invest in our securities.

Transfer Agent and Warrant Agent:		Transfer Online, Inc.

	⁽¹⁾	The number of shares of Common Stock to be outstanding immediately after this offering excludes:

	●	6,315,788 shares of Common Stock issuable upon the exercise of Warrants included in the Units;

	●	473,684 shares of Common Stock and/or 947,368 Warrants, in any combination thereof, issuable upon the exercise of the underwriter’s Over-Allotment Option; and

	●	157,895 shares of Common Stock issuable upon the exercise of the Representative’s Warrants.

	●	none of the Warrants underlying the Units in this offering have been exercised;

	●	no exercise of the Representative’s Warrants; and

	●	no shares of Common Stock or Warrants will be issued pursuant to the Over-Allotment Option.

	2022			2021
Operations
Revenue
Fuel sales	$	3,316,940		$	4,188,152
Total revenue		3,316,940			4,188,152
Cost of revenue
Cost of fuel sold		2,745,585			3,370,156
Freight		27,507			110,079
Transport costs		54,576			57,375
Total cost of revenue		2,827,668			3,537,610
Margin on operations		489,272			650,542
Operating expenses		683,594			598,106
Earnings (loss) from operations		(194,322	)		52,436
Other expense, net		31,813			31,487
Earnings (loss) before income taxes		(226,135	)		20,949
Income tax provision (recovery)		-			-
Net (loss) income	$	(226,135	)	$	20,949

Earnings Per Share
Weighted average shares outstanding		1,559,284			666,156
Basic and fully diluted earnings (loss) per share	$	(0.15	)	$	0.03

	June 30, 2022 (Unaudited)			December 31, 2021 (Audited)
ASSETS
Current assets
Cash	$	145,827		$	281,504
Accounts receivable, net		226,971			159,988
Inventory		-			127,607
Other current assets		8,300			8,300
Total current assets		381,098			577,399
Property and equipment, net		368,072			357,702
Other assets		21,407			17,613
Total assets	$	770,577		$	952,714
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	219,490		$	199,948
Short term notes payable – related party		345,000			345,000
Current maturities of long-term debt		130,556			129,548
Total current liabilities		695,046			674,496
Long-term debt, net		311,061			287,613
Total liabilities	$	1,006,107		$	962,109
Shareholders’ equity
Preferred stock –1,000,000 shares authorized, 0 issued and outstanding with a par value of $0.0001 per share		-			100
Common stock – 300,000,000 shares authorized, $0.0001 par value 6,117,295 and 1,117,295 issued and outstanding as of June 30, 2022 and December 31, 2021, respectively		612			112
Stock payable		300			300
Additional Paid-in capital		1,759,442			1,759,842
Accumulated deficit		(1,995,884	)		(1,769,749	)
Total shareholders’ equity		(235,530	)		(9,395	)
Total liabilities and shareholders’ equity	$	770,577		$	952,714

	●	investors’ perception of, and demand for, our securities;

	●	conditions of the U.S. and other capital markets in which we may seek to raise funds; and

	●	our future results of operations, financial condition and cash flow.

	●	Establish definitive business strategies, goals and objectives;

	●	Maintain a system of management controls; and

	●	Attract and retain qualified personnel, as well as develop, train, and manage management-level and other employees.

	●	a general or prolonged decline in, or shocks to, regional or broader macro-economics;

	●	regulatory changes that could impact the markets in which we operate, which could reduce demand for our goods and services or lead to pricing, currency, or other pressures; and

	●	deflationary economic pressures, which could hinder our ability to operate profitably in view of the challenges inherent in making corresponding deflationary adjustments to our cost structure.

	●	environmental hazards, such as uncontrollable releases of tanker truck emissions, motor fuel, and chemical spills or other pollution into the environment;

	●	personal injuries and death;

	●	natural disasters; and

	●	terrorist attacks targeting oil related facilities and infrastructure.

	●	injury or loss of life;

	●	damage to and destruction of property, natural resources and equipment;

	●	pollution and other environmental and natural resources damages;

	●	regulatory investigations and penalties;

	●	suspension of our operations; and

	●	repair and remediation costs.

	●	the continuing potential impact of COVID-19 pandemic on our business, customers, employees, consultants, service providers, stockholders, investors, and other stakeholders;

	●	our ability to execute our business;

	●	our quarterly operating results falling below expectations;

	●	our issuance of additional securities, including debt or equity or a combination thereof;

	●	announcements of technological innovations or new products by us or our competitors;

	●	loss of any strategic relationship;

	●	industry developments, including, without limitation, changes in competition or practices;

	●	economic and other external factors;

	●	period-to-period fluctuations in our financial results; and

	●	whether an active trading market in our Common Stock develops and is maintained.

	●	a limited availability for market quotations for our securities;

	●	reduced liquidity with respect to our securities;

	●	a determination that our Common Stock is a “penny stock,” which will require brokers trading in our Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Common Stock;

	●	limited amount of news and analyst coverage; and

	●	a decreased ability to issue additional securities or obtain additional financing in the future.

	●	our going concern and history of losses;

	●	substantial investment and costs associated with new potential revenue streams and their corresponding contractual obligations;

	●	a slowdown or reduction in our sales in due to a reduction in end user demand, unanticipated competition, regulatory issues, or other unexpected circumstances;

	●	our need to raise additional financing to fund daily operations and successfully grow our Company;

	●	changes in the price of and demand for the fuel that we distribute and the fact that we do not hedge the price any fuel we hold in inventory;

	●	our dependence on limited principal suppliers;

	●	competition in the wholesale gasoline and diesel distribution industry;

	●	the public’s changing preferences for alternate fuel sources or improvement in fuel efficiency;

	●	volatility of fuel prices and the effects of the Russian invasion of Ukraine and actions by, or disputes among or between, oil producing countries with respect to matters related to the price or production of oil;

	●	dangers inherent in the transportation of diesel and gasoline fuel;

	●	our reliance on exemptions from certain governance requirements as a “controlled company” within the meaning of Nasdaq listing standards;

	●	our ability to retain and recruit appropriate employees;

	●	environmental, tax and other federal, state and local laws and regulations;

	●	the adverse effects of COVID-19 (including new and emerging strains and variants), including the general economic uncertainty and its unpredictable duration, in regions where we have customers and employee;

	●	our reliance on senior management, supplier trade credit and our information technology; and

	●	the other factors described in “Risk Factors.”

Expansion of our proprietary reformulated 12.5% isobutanol no ethanol gasoline sales in Houston, Dallas, Baltimore, and Chicago	26.66	%
Acquisition of additional equipment (two semi-trucks, two compartmentalized fuel trailers, rail tank car rentals)	6.66	%
Acquisition of truck terminal	6.66	%
Acquisition of two convenience stores - equity portion	20.04	%
Acquisition of marina fuel tanks and blend station	6.66	%
Hiring of additional personnel	6.66	%
Working capital for expansion of refined products pipeline sales and trading	26.66	%
Total	100	%

2022:	High		Low
First Quarter	$	1.70	$	0.5754
Second Quarter	$	13.998	$	1.60

2021:	High		Low
First Quarter	$	40.00	$	2.40
Second Quarter	$	20.00	$	5.208
Third Quarter	$	17.00	$	1.254
Fourth Quarter	$	21.00	$	2.604

2020:	High		Low
First Quarter	$	40.00	$	32.00
Second Quarter	$	34.00	$	33.00
Third Quarter	$	34.00	$	34.00
Fourth Quarter	$	34.00	$	26.05

	●	on a post-split basis; and

	●	on an as-adjusted basis to reflect the issuance and sale by us of Units at the public offering price of $4.75 per Unit after deducting underwriting discounts and commissions and estimated offering expenses payable by us and the receipt by us of the proceeds of such sale.

	As of June 30, 2022
	Actual (Unaudited)			Pro-Forma (Unaudited)

Cash and cash equivalents	$	145,827		$	13,637,935
Long-term debt, net	$	311,061			311,061
Stockholders’ equity:
Common stock – 300,000,000 shares authorized, $0.0001 par value 6,117,295 issued and outstanding as of June 30, 2022		612			928
Preferred stock –1,000,000 shares authorized, 0 issued and outstanding with a par value of $0.0001 per share		-			-
Additional paid-in capital		1,759,442			15,251,234
Accumulated deficit		(1,995,884	)		(1,995,884	)
Total stockholders’ equity (deficit)		(235,530	)		13,256,578
Total liabilities and stockholders’ equity (deficit)	$	770,577		$	14,262,685

Public offering price per Unit	$	4.75
Historical net tangible book value per share as of June 30, 2022	$	0.04
Increase in net tangible book value per share attributable to investors participating in this offering⁽¹⁾	$	1.43

As adjusted net tangible book value per share immediately after this offering	$	1.43

Dilution in as adjusted net tangible book value per share to new investors participating in this offering	$	(3.32	)

	SHARES PURCHASED					TOTAL CONSIDERATION					AVERAGE PRICE PER
	NUMBER		PERCENT			AMOUNT		PERCENT			SHARE

Existing stockholders		6,117,295		66	%	$	41,500		0.3	%	$	0.002

New investors participating in this offering		3,157,894		34	%		14,999,996.50		99.7	%		4.75

Total		9,275,189		100	%	$	15,041,496.50		100	%	$	1.62

	●	biodiesel – B100 and B99.9;

	●	reformulated and conventional gasoline with 10% ethanol;

	●	ultra-low sulfur diesel fuel with or without biodiesel blends (5%-20%);

	●	reformulated 12.5% isobutanol blended no ethanol gasoline; and

	●	biodiesel additives – cetane and algae tank sediment mitigation.

	●	transportation hauling of refined products and chemicals;

	●	RIN trading – D4, D5, D6 and cellulosic (D3 or D7) RIN trading services; and

	●	tote service – offloading fuels and chemicals directly from our truck into approved 275- or 330-gallon plastic totes;

	●	drumming service - offloading fuels and chemicals directly from our truck into approved 55-gallon drums;

	●	transloading services - offloading fuels and chemicals directly from our truck to and from approved railroad tank cars; and

	●	metered offloads/split drops – we utilize our built-in fuel meters located on our tanker trailers to provide an accurate ticket showing gallons of motor fuels and chemicals delivered at each customer location.