INITIAL DECISION RELEASE NO. 1413

ADMINISTRATIVE PROCEEDING

FILE NO. 3-21032

UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________

In the Matter of :

:

THE REGISTRATION STATEMENT OF : INITIAL DECISION

ELECTROPREMIUM : December 6, 2022

____________________________________

APPEARANCE: Richard Hong and Joshua D. Tannen, Esqs., for the

Division of Enforcement, Securities and Exchange Commission

Khurram Afzal for Electropremium

BEFORE: Carol Fox Foelak, Administrative Law Judge

SUMMARY

This Initial Decision suspends the effectiveness of the registration statement of

Electropremium. The basis for this “stop order” is that the registration statement includes 

material misstatements and omissions and untrue and misleading statements of material facts; 

and omits required information, such as audited financial statements.

I. INTRODUCTION

A. Procedural Background

The Commission initiated this proceeding by an Order Instituting Proceedings (OIP) on 

September 6, 2022. The proceeding is a stop order proceeding, authorized pursuant to Section 

8(d) of the Securities Act of 1933. The OIP ordered Electropremium to file an Answer within 

ten days after service of the OIP and ordered that a hearing on the allegations commence at 10:00 

a.m. on September 21, 2022, via remote means and/or at the Commission’s offices at 100 F 

Street, N.E., Washington, DC 20549. OIP at 2-3. Electropremium, a California corporation, was 

served with the OIP on September 7, 2022, by personal service on Khurram Afzal, 

Electropremium’s CEO, president, director, controller, accountant, legal counsel and agent for 

service of process.

1

 See Securities Act Section 8(d); 17 C.F.R. § 201.141(a)(2)(ii), (v). 

Electropremium did not file a timely Answer, due on Monday, September 19, 2022, and did not 

 

1 The Form S-1 registration statement at issue specified Khurram Afzal’s roles in the company. 
2

appear at the September 21, 2022, hearing.

2

 Electropremium, Admin. Proc. Rulings Release No. 

6870, 2022 SEC LEXIS 2534 (A.L.J. Sept. 21, 2022) (inter alia, advising that if it wished to 

continue to participate in the proceeding, it should file an Answer by September 28 and respond 

to the Division of Enforcement’s post-hearing filing by October 26). Electropremium then

defended the proceeding in a number of filings and emails, which the undersigned has 

considered in this decision.

At the one-day hearing, held via remote means, the Division of Enforcement called two 

witnesses from whom evidence was taken, Mary Beth Breslin, Chief of the Office of Real Estate 

& Construction, of the Commission’s Division of Corporation Finance (CorpFin), and Ricky 

Tong, a Division of Enforcement (Division) data analyst.3 Four exhibits were admitted. 

Electropremium did not appear. A post-hearing briefing schedule was set: the due dates for the 

Division’s opening filing, Electropremium’s opposition, and the Division’s reply were October 

12, October 26, and November 2, 2022, respectively. Id. at *1-2. 

On October 4, 2022, Electropremium filed an Answer (substantially similar to emails that

it had previously sent to the Office of Administrative Law Judges on September 26 and 28). On 

October 12, 2022, it filed an application to withdraw its registration statement, which the 

Commission denied on October 26, 2022. Electropremium, Securities Act Release No. 11127, 

2022 SEC LEXIS 2887. The Division filed Proposed Findings of Fact and Conclusions of Law 

on October 12, 2022. Electropremium did not file an opposition. On November 2, 2022, in lieu 

of a substantive reply, the Division filed notice of Respondent’s failure to file an opposition to 

the Division’s Proposed Findings of Fact and Conclusions of Law. 

The findings and conclusions in this ID are based on the record. Official notice pursuant 

to 17 C.F.R. § 201.323 is taken of the Commission’s public official records concerning 

Electropremium and of the California Secretary of State records as well. See Joseph S. 

Amundsen, Exchange Act Release No. 69406, 2013 SEC LEXIS 1148, at *1 n.1 (Apr. 18, 2013), 

pet. denied, 575 F. App’x 1 (D.C. Cir. 2014). Preponderance of the evidence was applied as the 

standard of proof. See Steadman v. SEC, 450 U.S. 91, 97-104 (1981). All arguments and 

proposed findings and conclusions that are inconsistent with this ID were considered and 

rejected.

 

2 On September 12, 2022, the undersigned had ordered that the hearing would be held remotely, 

via WebEx, starting at 10:00 a.m. EDT, as the Commission ordered, and that “[t]he Division 

should circulate instructions for joining the WebEx meeting, including to Respondent at its email 

address.” The Registration Statement of Electropremium, Admin. Proc. Rulings Release No. 

6868, 2022 SEC LEXIS 2338. In an email sent on September 21 after the hearing had 

concluded, Mr. Afzal admitted that he had failed to appear at the scheduled 10:00 a.m. EDT 

time, stating, “I tried to join the meeting at 10:00 a.m. California time,” i.e., 1:00 p.m. EDT, and 

also described receiving the instructions for joining the WebEx meeting as “hacking” into his 

phone. He repeated these assertions in his Answer, filed on October 4.

3 Citations to the transcript are noted as “Tr. __.” Citations to exhibits, all of which were offered 

by the Division, are noted as “Div. Ex. __.” 
3

B. Allegations and Arguments of the Parties

This proceeding concerns a registration statement filed by Electropremium on August 18, 

2022. The Division seeks a stop order pursuant to Securities Act Section 8(d), alleging that the

registration statement contains material misrepresentations and omissions within the meaning of 

Section 8(d), omits to include certain additional material information required by Commission 

rules, and lacks audited financial statements; and further, that, Electropremium failed to, and 

cannot, meaningfully contest the Division’s evidence. In its Answer, Electropremium claimed 

that the Commission is required to qualify its registration statement; and that it is not looking for 

investors, was unsuccessful in engaging a CPA to prepare an audited financial statement as a 

result of an Internal Revenue Service lien on the company, and did not even receive a call-back 

when it tried to contact an attorney to provide a legal opinion as to the validity of the shares to be 

issued pursuant to the Form S-1.

II. FINDINGS OF FACT

The Commission’s public official records, of which official notice is taken pursuant to 17 

C.F.R. § 201.323, disclose that Electropremium filed a registration statement under the Securities 

Act on August 18, 2022.

4

 The registration statement, filed on Form S-1, represents that 

Electropremium (CIK No. 1723157),5is organized under the laws of California and that its 

products are the installation of solar cells on top of used hybrid vehicles; the manufacturing and 

design of wireless computer modems; and the design and manufacturing of battery chargers for 

hybrid vehicles, for which “a contract is in process with Defense Supply Center Columbus.” The 

registration statement states that Mr. Afzal is the CEO, president, director, controller, accountant, 

and legal counsel; and is also an electrical engineer with a background in computers. It further 

states that Electropremium is not looking for investors, has zero business income, is disputing a 

federal tax lien, and is under suspension by the Franchise Tax Board of the California Secretary 

of State for not paying the minimum yearly tax of $800, with the total amount due being between 

$7,000 and $8,000, including estimated penalties. It states that its assets total $600,500,000, of 

which $600,000,000 is comprised of “security papers.” The claim that the company is not 

looking for investors is inherently incredible when made in a registration statement since the 

purpose of a company’s registration statement is to enable it to sell securities to the public. 

Likewise, the claim that the company has assets of over $600 million despite zero income and 

failure to pay a yearly minimum tax of $800 is inherently incredible. These claims are so 

facially untrue as to be intentional misrepresentations. The facts found based on the unrebutted 

evidence of Ricky Tong, infra, reinforce this finding. 

 

4 The filing, which is a refiling of a Form S-1 that was withdrawn on August 11, 2022, by filing 

Form RW, may be viewed on the Commission’s EDGAR database:

https://www.sec.gov/Archives/edgar/data/1723157/000172315722000009/refiling1khurram5for

ms_1.txt. It is also in evidence as Division Exhibit 1.

5 The CIK number is a unique identifier for each corporation in the Commission’s EDGAR 

database. The user can retrieve filings of a corporation by using its CIK number. 
4

CorpFin’s Mary Beth Breslin is in charge of an office, staffed by attorneys and 

accountants, that reviews disclosure documents, including registration statements. Tr. 10-12. 

She understands that the purpose of a Form S-1 registration statement is to enable the filer to 

make offers and sales of its securities to the public. Tr. 13. She reviewed Electropremium’s 

August 18, 2022, Form S-1 registration statement on August 19, 2022. Tr. 14-18. She found 

that it was unusually short and lacked significant information, including audited financial 

statements, most of the requirements of the management’s discussion and analysis item, 

information about management and executive compensation, the company’s certificate of 

incorporation, and a legal opinion on the validity of the shares being issued. Tr. 16-17. The 

registration statement also contained a lot of confusing or conflicting information and lacked a 

delaying amendment, and thus, it would have become effectively automatically twenty days after 

it was filed.

6

 Tr. 17-19. Most filers include a delaying amendment, which gives the staff time to 

review the filing and the filer time to correct any deficiencies. Tr. 19-20. 

Ms. Breslin telephoned Mr. Afzal on August 19, 2022. Tr. 20. A colleague, Jeffrey 

Gabor, a branch chief in her group, joined in the call. Tr. 20. She informed Mr. Afzal that there 

were significant deficiencies in the filing, including a lack of audited financial statements. Tr. 

20. She suggested a delaying amendment, which would give him time to locate an auditor and 

rectify all the other deficiencies. Tr. 20. After receiving a voicemail that suggested that he had 

some questions about the delaying amendment, Ms. Breslin and Mr. Gabor telephoned Mr. Afzal 

again on August 22, 2022. Tr. 21. She encouraged him to file a delaying amendment or, 

alternatively, to withdraw the Form S-1, pointing out the language that stated that 

Electropremium was not looking for investors. Tr. 21. She told him that he would need to 

engage an auditor registered with the Public Company Accountability Oversight Board 

(PCAOB) and provided information about the PCAOB and Form S-1’s requirements for an 

auditor’s report. Tr. 21-22. Mr. Afzal did not file a delaying amendment or seek to withdraw the 

Form S-1 during the next several days, and, on August 26, 2022, they emailed him a letter 

requesting him to withdraw the Form S-1 and warning him that, in light of the serious 

deficiencies in the filing and the lack of a delaying amendment, they would likely recommend 

action to prevent it from going effective if he did not do so; the letter invited him to contact Ms. 

Breslin or Mr. Gabor with any questions. Tr. 22-24; Div. Ex. 3. He did not respond, and the 

Commission instituted this proceeding on September 6, 2022. Tr. 24-25. 

Ricky Tong’s duties include joining on the Division’s phone calls with witnesses and 

other participants. Tr. 30-31. He was on a call between Richard Hong and Joshua Tannen of the 

Division and Mr. Afzal. Tr. 31-34. 

The following facts are found based on the Mr. Tong’s unrebutted testimony as to Mr. 

Afzal’s representations in response to questions during the phone call: Mr. Tannen advised Mr. 

Afzal that the Commission intended to file a stop order proceeding but that Mr. Afzal could still 

file a withdrawal or a delaying amendment. Tr. 31, 34. In response to questions from the 

 

6 Absent a delaying amendment, a registration statement becomes effective by operation of law

twenty days after it is filed. Securities Act Section 8(a). 
5

Division, Mr. Afzal said that the company did not have any products, proprietary technology, 

designs, schematics, copyrights, manufacturing capabilities, or contracts with customers; that he 

had a background in electrical engineering but not any expertise specifically in the products 

disclosed in the registration statement; and that his intention was to use the proceeds from the 

sale of securities to hire the necessary employees to build those products. Tr. 32-33. Mr. Afzal 

said that the company did not have any income and that his only source of income was as an 

Uber driver. Tr. 33. Mr. Afzal said that the $600,500,000 valuation of the company’s assets 

was solely based on valuing unsold securities. Tr. 33. The Division again informed him that he 

still could file either a withdrawal of the Form S-1 registration statement or file a delaying 

amendment, and Mr. Afzal affirmatively declined to do either. Tr. 33-34.

On September 19, 2022, Mr. Afzal filed a letter asking that the registration statement “be 

declared qualified” on September 21, 2022, at “11:00 a.m. ET, or as soon thereafter as is 

reasonably practicable.” Div. Ex. 4. The letter reiterated the representation that the “Company 

is not looking for any investors.” Div. Ex. 4. 

On October 12, 2022, after the September 21, 2022, hearing in this proceeding, and 

several hours after the Division filed its Proposed Findings of Fact and Conclusions of Law, 

Electropremium filed an application to withdraw the registration statement, which the 

Commission denied “in view of the pendency of the 8(d) stop order proceedings, . . . [and of] the 

public interest and the protection of investors.” Electropremium, Securities Act Release No. 

11127, 2022 SEC LEXIS 2887, at *2 (Oct. 26, 2022).

III. CONCLUSIONS OF LAW

Evidence taken at the hearing and the Commission’s public official records fully support 

the allegations. Thus, it is concluded that Electropremium included untrue statements of material 

facts and omitted to state material facts that were required to be included in its registration 

statement within the meaning of Securities Act Section 8(d). Therefore, a stop order will be 

issued. 

A. Securities Act Requirements

Securities Act Section 7(a) and Schedule A (25), (26) require a registration statement to 

contain an audited balance sheet and income statement. Securities Act Sections 7(a) and 19(a) 

authorize the Commission to adopt regulations to carry out these requirements. In the instant 

case, Electropremium was required to furnish this information on Form S-1 (17 C.F.R. § 239.11), 

authorized under the Securities Act. Non-financial information furnished must comply with 

Regulation S-K (17 C.F.R. Part 229). Financial information must comply with Regulation S-X 

(17 C.F.R. Part 210).

B. Electropremium’s Material Omissions and Misrepresentations

Electropremium’s filing lacks an audited balance sheet and income statement, as required 

by Item 11 of Form S-1, as well as most other information required by Item 11. These omissions 

are omissions of material fact. The Commission has long recognized the materiality of an 
6

audited balance sheet in compliance with the registration requirements of the Securities Act. See 

Queensboro Gold Mines, Ltd., Securities Act Release No. 1617, 1937 SEC LEXIS 893, at *2-4 

(Nov. 17, 1937). The registration statement has additional shortfalls. The claims that the 

company had over $600 million in assets based on its valuation of its unsold securities and was 

not looking for investors are inherently incredible. 

The record shows that Electropremium included untrue statements of material facts or 

omitted to state material facts that were required to be included in its registration statement. A 

material fact within the meaning of Securities Act Section 8(d) is one to which “there is a 

substantial likelihood that a reasonable investor would attach importance in determining whether 

to purchase the security.” 17 C.F.R. § 230.405. Even assuming that Mr. Afzal truly believed all 

the questionable and false statements in the registration statement, that is not a defense to this 

requirement. If an untrue material fact is included in a registration statement or a material fact is 

omitted, the registrant’s good faith or lack of scienter does not influence whether a stop order 

should issue. Kiwago Gold Mines Ltd., Securities Act Release No. 3278; 27 S.E.C. 934, 943; 

1948 SEC LEXIS 7, at *21 (Mar. 29, 1948)7; U.S. Molybdenum Corp., Securities Act Release 

No. 2743; 10 S.E.C. 796; 804, 1941 SEC LEXIS 237, at *18-19 (Dec. 19, 1941)8(citing Herman 

Hanson Oil Syndicate, Securities Act Release No. 1555; 2 S.E.C. 743, 746; 1937 SEC LEXIS 

879, at *6 (Sept. 15, 1937)).

IV. SANCTION

The Division requests a stop order suspending the effectiveness of Electropremium’s 

registration statement. This sanction will serve the public interest and the protection of investors, 

pursuant to Section 8(d) of the Securities Act, and accords with Commission precedent.

V. RECORD CERTIFICATION

Pursuant to Rule 351(b) of the Commission’s Rules of Practice, 17 C.F.R. § 201.351(b), 

it is certified that the record includes the items set forth in the corrected record index issued by 

the Secretary of the Commission on November 28, 2022.

VI. STOP ORDER

IT IS ORDERED, pursuant to Section 8(d) of the Securities Act of 1933, 15 U.S.C. § 

77h(d), that the EFFECTIVENESS of the REGISTRATION STATEMENT filed by 

ELECTROPREMIUM IS SUSPENDED.

This Initial Decision shall become effective in accordance with and subject to the 

provisions of Rule 360 of the Commission’s Rules of Practice, 17 C.F.R. § 201.360. Pursuant to 

 

7 The date is reported as March 29 in S.E.C. Reports (Volume 27, published in 1953) and as 

March 31 in SEC LEXIS.

8 The date is reported as December 19 in S.E.C. Reports (Volume 10, published in 1944) and as 

December 20 (a Saturday) in SEC LEXIS.
7

that Rule, a party may file a petition for review of this Initial Decision within twenty-one days 

after service of the Initial Decision. A party may also file a motion to correct a manifest error of 

fact within ten days of the Initial Decision, pursuant to Rule 111 of the Commission’s Rules of 

Practice, 17 C.F.R. § 201.111. If a motion to correct a manifest error of fact is filed by a party, 

then a party shall have twenty-one days to file a petition for review from the date of the 

undersigned’s order resolving such motion to correct a manifest error of fact. The Initial 

Decision will not become final until the Commission enters an order of finality. The 

Commission will enter an order of finality unless a party files a petition for review or a motion to 

correct a manifest error of fact or the Commission determines on its own initiative to review the 

Initial Decision as to a party. If any of these events occur, the Initial Decision shall not become 

final as to that party.

/S/ Carol Fox Foelak 

Carol Fox Foelak

Administrative Law Judge