Registration No.  ______________



SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM S-1
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933

TOUCHPOINT METRICS, INC.
(Name of small business issuer in its charter)

California
7372
(State or Other Jurisdiction of Organization)
(Primary Standard Industrial Classification Code)
_________________

TOUCHPOINT METRICS, INC.
National Registered Agents, Inc.
201 Spear Street, Suite 1100
2875 Michelle Drive, Suite 100
San Francisco, CA 94105
Irvine, CA  92606
415-526-2655
800-562-6429
(Address and telephone number of registrant’s executive office)
(Name, address and telephone number of agent for service)
_________________

Copies to:
The Law Office of Conrad C. Lysiak, P.S.
601 West First Avenue, Suite 903
Spokane, Washington 99201
(509) 624-1475

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
If any of the securities being registered on the Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: [X]

If this Form is filed to register additional common stock for an offering under Rule 462(b) of the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

If this Form is a post-effective amendment filed under Rule 462(c) of the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

If this Form is a post-effective amendment filed under Rule 462(d) of the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 
Large Accelerated Filer
[   ]
 
Accelerated Filer
[   ]
 
Non-accelerated Filer
[   ]
 
Smaller Reporting Company
[X]
 
(Do not check if a smaller reporting company)
     




 
 

 

CALCULATION OF REGISTRATION FEE

Securities to be
Amount To Be
 
Offering Price
 
Aggregate
 
Registration
Registered
Registered
 
Per Share
 
Offering Price
 
Fee [1]
               
Common Stock by Selling
Shareholders
7,632,302
$
0.25
$
1,908,075.50
$
218.67
               
Total
7,632,302
$
0.25
$
1,908,075.50
$
218.67

[1]        Estimated solely for purposes of calculating the registration fee under Rule 457.

REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON DATES AS THE COMMISSION, ACTING UNDER SAID SECTION 8(a), MAY DETERMINE.





















 
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Prospectus

TOUCHPOINT METRICS, INC.
7,632,302 Shares of Common Stock

We are registering for sale by selling shareholders 7,632,302 shares of common stock. We will not receive any proceeds from the shares sold by the selling shareholders.

The sales price to the public is fixed at $0.25 per share until such time as the shares of our common stock become traded on the Bulletin Board operated by the Financial Industry Regulatory Authority or another exchange. If our common stock becomes quoted on the Bulletin Board or another exchange, then the sales price to the public will vary according to the selling decisions of each selling shareholder and the market for our stock at the time of resale.

Our shares of common stock are not traded anywhere.

Investing in our common stock involves risks. See “Risk Factors” starting at page 6.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. It is illegal to tell you otherwise.
 
The date of this prospectus is ____________________.














 
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TABLE OF CONTENTS

 
Page No.
   
5
   
6
   
8
   
9
   
9
   
9
   
11
   
13
   
15
   
17
   
19
   
24
   
27
   
28
   
28
   
28
   
29
   
29






 
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SUMMARY OF OUR OFFERING

Our business

We were incorporated under the laws of the state of California as The Innes Group, Inc. on December 14, 2001.  On October 18, 2011, we changed our name to Touchpoint Metrics, Inc.  We are engaged in the business of developing and delivering technology-enabled products and services that improve customer experience management capabilities for corporations.

The offering

Following is a brief summary of this offering:

Securities being offered by selling shareholders
7,632,302 shares of common stock
Offering price per share
$0.25
Net proceeds to us
None
Number of shares outstanding before the offering
13,132,302
Number of shares outstanding after the offering if all of the
shares are sold
13,132,302

Selected financial data

The following financial information summarizes the more complete historical financial information at the end of this Prospectus:

   
As of
 
As of
   
12-31-2011
 
12-31-2010
   
(Audited)
 
(Audited)
Balance Sheet 
       
Cash and Cash Equivalents
$
52,108.79
$
167,871.50
Total Assets 
$
420,401.52
$
581,293.49
Total Liabilities 
$
228,504.73
$
27,180.25
Stockholders’ Equity
$
191,896.79
$
554,113.24
         
   
Year Ended
 
Year Ended
   
12-31-2011
 
12-31-2010
   
(Audited)
 
(Audited)
Income Statement 
       
Gross Profit 
$
369,499.64
$
712,890.05
Total Expenses 
$
772,233.46
$
701,313.90
Net Income (Loss) 
$
(402,216.45)
$
15,282.73




 
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RISK FACTORS

Please consider the following risk factors before deciding to invest in our common stock.  All material risk factors have been addressed. Risks associated with Touchpoint Metrics, Inc.:

1.    We have losses that we expect to continue into the future. There is no assurance our future operations will result in profitable revenues. If we cannot generate sufficient revenues to operate profitably, we will cease operations and you will lose your investment.

We were incorporated in December 2001.  Our net loss since December 2001 was $(754,254.20). Our ability to achieve and maintain profitability and positive cash flow is dependent upon:

*
completion of this public offering,
*
our ability to attract customers who will buy our services from us, and:
*
our ability to generate revenues through the sale of our services.

Based upon current plans, we expect to incur operating losses in future periods because we will be incurring expenses and not generating revenues sufficient to generate profits. We cannot guarantee that we will be successful in generating revenues in the future. Failure to generate revenues will cause you to lose your investment.

2 .   If we do not attract customers, we will not make a profit which ultimately will result in a cessation of operations.

Our ability to maintain operations is predicated upon being retained to provide technology-enabled products and services that improve customer experience management capabilities for corporations.  Currently, we have approximately nine (9) customers.  If we are unable to attract and maintain an adequate customer base to generate revenues, we will have to suspend or cease operations.

3.    We do not own any patents covering our product.

We do not own any patents.  If we infringe on any patents, we will be liable for damages and may be enjoined from conducting our proposed business.  Further, because we have no patents covering our product, someone could use the information and compete with us and we will have no recourse against him.

4.    Because our officers and directors do not have prior experience in financial accounting and the preparation of reports under the Securities Exchange Act of 1934, as amended, we may have to hire individuals which could result in an expense we are unable to pay.

Because our officers and directors do not have prior experience in financial accounting and the preparation of reports under the Securities Exchange Act of 1934, as amended, we may have to hire additional experienced personnel to assist us with the preparation, thereof. If we need the additional experienced personnel and we do not hire them, we could fail in our plan of operations and have to suspend operations or cease operations entirely and you could lose your investment.  Further, the salaries of these individuals could result in an expense we are unable to pay.


 
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6.    We are completely dependent on our president, Michael Hinshaw, to guide our operations. If we lose his services we may have to cease operations.

Our continuing operations will depend entirely on the ability and resources of Mr. Hinshaw, our president. If we lose the services of Mr. Hinshaw, we may have to cease operations. Presently, Mr. Hinshaw is committed to providing his full business time and related resources to us.

7.    Because we have only two officers and two directors who are responsible for our managerial and organizational structure, in the future, there may not be effective disclosure and accounting controls to comply with applicable laws and regulations which could result in fines, penalties and assessments against us.

We have only two officers and two directors. They are responsible for our managerial and organizational structure, which include preparation of disclosure and accounting controls under the Sarbanes Oxley Act of 2002. As such, they are responsible for the administration of the controls. Should they not properly administer the controls, we may be subject to sanctions and fines by the Securities Exchange Committee which ultimately could cause us to lose money.

8.    Because we may issue additional shares of common stock, your investment could be subject to substantial dilution.

We anticipate that any additional funding will be in the form of equity financing from the sale of our common stock. In the future, if we do sell more common stock, your investment could be subject to dilution. Dilution is the difference between what you pay for your stock and the net tangible book value per share immediately after the additional shares are sold by us.

9 .   Because there is no public trading market for our common stock, you may not be able to resell your stock .

There is currently no public trading market for our common stock. Therefore there is no central place, such as stock exchange or electronic trading system, to resell your shares. If you do want to resell your shares, you will have to locate a buyer and negotiate your own sale.

10.    There are legal restrictions on the resale of the common shares offered, including penny stock regulations under the U.S. Federal Securities Laws.  These restrictions may adversely affect your ability to resell your stock.

We anticipate that our common stock will continue to be subject to the penny stock rules under the Securities Exchange Act of 1934, as amended. These rules regulate broker/dealer practices for transactions in “penny stocks.” Penny stocks are generally equity securities with a price of less than $5.00. The penny stock rules require broker/dealers to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker/dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker/dealer and its salesperson and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations and the broker/dealer and salesperson compensation information must be given to the customer orally or in writing prior to completing the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction, the broker and/or dealer must make a special written determination that the penny stock is a suitable investment for

 
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the purchaser and receive the purchaser’s written agreement to the transaction. The transaction costs associated with penny stocks are high, reducing the number of broker-dealers who may be willing to engage in the trading of our shares. These additional penny stock disclosure requirements are burdensome and may reduce all of the trading activity in the market for our common stock. As long as the common stock is subject to the penny stock rules, our shareholders may find it more difficult to sell their shares.

11.    Our future sales of our common shares could cause our stock price to decline.

There is no contractual restriction on our ability to issue additional shares. We cannot predict the effect, if any, that market sales of our common shares or the availability of shares for sale will have on the market price prevailing from time to time. Sales by us of our common shares in the public market, or the perception that our sales may occur, could cause the trading price of our stock to decrease or to be lower than it might be in the absence of those sales or perceptions.

12.    The market price of our common stock may be volatile which could adversely affect the value of your investment in our common stock.

The trading price of our common stock may be highly volatile and could be subject to wide fluctuations in response to various factors. Some of the factors that may cause the market price of our common stock to fluctuate include:

*
fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;
*
changes in estimates of our financial results or recommendations by securities analysts;
*
failure of any of our products to achieve or maintain market acceptance;
*
changes in market valuations of similar companies;
*
significant products, contracts, acquisitions or strategic alliances of our competitors;
*
success of competing products or services;
*
changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;
*
regulatory developments;
*
litigation involving our company, our general industry or both;
*
additions or departures of key personnel;
*
investors’ general perception of us; and
*
changes in general economic, industry and market conditions.


USE OF PROCEEDS

We will not receive any proceeds from the sale of the shares of common stock in this offering. All proceeds from the sale of the shares of common stock will be received by the selling shareholders.





 
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DETERMINATION OF OFFERING PRICE

The selling stockholders will sell their shares at $0.25 per share until a market for the shares develops on the Bulletin Board operated by the Financial Industry Regulatory Authority.  There is no assurance that such a market will ever develop.   Further, the shares of common stock could be sold by selling shareholders at privately negotiated prices.  Consequently, we cannot determine what the actual value of our common stock will be either now or at the time of sale.  We will not receive proceeds from the sale of shares from the selling stockholders.


DILUTION

Since all of the shares of common stock being registered are already issued and outstanding, no dilution will result from this offering.


PLAN OF DISTRIBUTION; TERMS OF THE OFFERING

There are 71 selling shareholders. They may be deemed underwriters. They may sell some or all of their common stock in one or more transactions, including block transactions:

 
*
On such public markets or exchanges as the common stock may from time to time be trading;
 
   
 
*
In privately negotiated transactions;
 
   
 
*
Through the writing of options on the common stock;
 
   
 
*
In short sales; or
 
   
 
*
In any combination of these methods of distribution.

The sales price to the public will vary according to the selling decisions of each selling shareholder and the market for our stock at the time of resale. In these circumstances, the sales price to the public may be:

 
*
The market price of our common stock prevailing at the time of sale;
 
   
 
*
A price related to such prevailing market price of our common stock; or
 
   
 
*
Such other price as the selling shareholders determine from time to time.

The shares may also be sold in compliance with the Securities and Exchange Commission’s Rule 144 of the Securities Act of 1933, as amended, or the Securities Act of 1933, as amended. The selling shareholders may also sell their shares directly to market makers acting as principals or brokers or dealers, who may act as agent or acquire the common stock as a principal. Any broker or dealer, participating in such transactions as agent, may receive a commission from the selling shareholders, or if they act as agent for the purchaser of such common stock, from such purchaser. The selling shareholders will likely pay the usual and customary brokerage fees for such services. Brokers or dealers may agree with the selling shareholders to sell a specified number of shares at a stipulated price per share and, to the extent such

 
- 9 -

 

broker or dealer is unable to do so acting as agent for the selling shareholders, to purchase, as principal, any unsold shares at the price required to fulfill the respective broker’s or dealer’s commitment to the selling shareholders. Brokers or dealers who acquire shares as principals may thereafter resell such shares from time to time in transactions in a market or on an exchange, in negotiated transactions or otherwise, at market prices prevailing at the time of sale or at negotiated prices, and in connection with such re-sales may pay or receive commissions to or from the purchasers of such shares. These transactions may involve cross and block transactions that may involve sales to and through other brokers or dealers.

We can provide no assurance that all or any of the common stock offered will be sold by the selling shareholders. We are bearing all costs relating to the registration of the common stock, estimated to be $40,000. The selling shareholders, however, will pay commissions or other fees payable to brokers or dealers in connection with any sale of the common stock. The selling shareholders must comply with the requirements of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, in the offer and sale of the common stock. In particular, during such times as the selling shareholders may be deemed to be engaged in a distribution of the common stock, and therefore be considered to be an underwriter, they must comply with applicable law and may among other things:

1.   Not engage in any stabilization activities in connection with our common stock;

2.   Furnish each broker or dealer through which common stock may be offered, such copies of this prospectus, as amended from time to time, as may be required by such broker or dealer; and

3.   Not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities other than as permitted under the Securities Exchange Act of 1934, as amended

There is no assurance that any of the selling shareholders will sell any or all of the shares offered by them. Under the securities laws of certain states, the shares may be sold in such states only through registered or licensed brokers or dealers. In addition, in certain states the shares may not be sold unless they have been registered or qualified for sale in that state or an exemption from registration or qualification is available and is met.

We anticipate that we will initially be a “penny stock.” The Commission has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:

*
that a broker or dealer approve a person’s account for transactions in penny stocks; and
*
the broker or dealer receives from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person’s account for transactions in penny stocks, the broker or dealer must:

*
obtain financial information and investment experience and objectives of the person; and
*
make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be reasonably capable of evaluating the risks of transactions in penny stocks.


 
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The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:

*
sets forth the basis on which the broker or dealer made the suitability determination; and
*
that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Disclosure also must be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.


MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

This section of the prospectus includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this prospectus. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.

We are raising funds in this public offering in order to expand our operations.

Plan of Operation

We have the ability to satisfy projected cash requirements for the next twelve months for current operations.

Results of Operations

December 31, 2009

For the year ended December 31, 2009, we had total revenues of $441,463.86; cost of sales of $277,862.99; gross operating income of $163,600.87; total expenses of $365,590.52; other income of $10,168.25; and net a net loss of $192,021.40.

Our total assets were $640,269.59; our total liabilities were $101,439.08 and our total capital was $538,830.51.

December 31, 2010

For the year ended December 31, 2010, we had total revenues of $1,082,389.40; cost of sales of $369,499.35; gross operating income of $712,890.05; total expenses of $701,313.90; other income of $3,706.58; and net income of $15,282.73.


 
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Our total assets were $581,293.49; our total liabilities were $27,180.25 and our total capital was $554,113.24.

December 31, 2011

For the year ended December 31, 2011, we had total revenues of $611,373.83; cost of sales of $241,874.19; gross profit of $369,499.64; total expenses of $722,233.46; other income/expenses of $517.37; and a net loss of $402,216.45.

Our total assets were $420,401.52; our total liabilities were $228,504.73; and our total equity was $191,896.79.

Comparing Periods

We had an increase in revenues in 2010 compared with 2009 primarily as a result of our successful efforts to test market acceptance of our services. For the twelve months ended December 31, 2011, a significant decrease in revenues from 2010 was expected, as a direct result of our reprioritization of resources, moving the majority of our resources towards product development efforts. These efforts have been focused on “productizing” our offerings in a manner that will allow us to sell technology-enabled products and services as described in the strategy section of this prospectus.  While expected, the resulting decrease in revenues has had a direct impact on our cost of operations for the period.

Liquidity and Capital Resources

We have sufficient cash to satisfy our needs for the next twelve months.   At the present time, we have not made any arrangements to raise additional cash, other than through revenues generated from our operations.

Since inception we have issued 13,132,302 restricted shares of common stock to 73 persons and corporations.  6,000,000 shares of common stock were issued to Michael Hinshaw, an officer and member of the board of directors, pursuant to Section 4(2) of the Securities Act of 1933, as amended.  Mr. Hinshaw is a sophisticated investor and had access to the same information that can be found in Part I of a Form S-1 registration statement.  7,132,302 shares of common stock were issued to 72 persons or corporations pursuant to Reg. S of the Securities Act of 1933, as amended.  Those shares were issued to non-US persons and the transactions took place outside the United States of America.

We own one tract of real property in Lake County, California, of approximately five acres.  The tract is unencumbered.  The land is undeveloped and unoccupied.

As of December 31, 2011, our total assets were $420,401.52 and our total liabilities were $228,504.73.  At December 31, 2011, we had cash of $52,108.79.





 
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BUSINESS

General

We were incorporated in the State of California on December 14, 2001. We are engaged in the business of developing and subsequently selling web-enabled software and related services for customer experience management.  We maintain our primary business address at 201 Spear Street, Suite 1100, San Francisco, CA 94105. Our telephone number is (415) 526-2655.  Our registered agent for service of process is National Registered Agents, Inc.

Our Strategy

We plan to use our expertise as a customer experience strategy leader to create a leading customer experience management technology company.

Our ability to accomplish these goals will stem from the commercialization of Touchpoint Mapping ® , our analytical and research methodologies delivered in the form of on-demand, Internet cloud-based (SaaS) software and consulting services, the business intelligence which we derive as a result, and the licensing of our proprietary systems as we continue to develop products and services that help companies better serve their customers by improving their ability to manage customer experience, thereby reducing or eliminating bad experiences for their customers.

In our opinion, improving customer experience drives significant value for corporations, helping customers stay longer and buy more. But to date, there has been no simple solution for improving customer experience.

Enter Customer Experience Management (CEM). Virtually unheard of as recently as 2005, this emerging sector is now recognized by many enterprise executives as the best way to solve these problems.

We believe that in the coming years companies are likely to invest heavily to improve customer experience, shifting existing budgets from the areas of marketing management consulting, marketing research and customer relationship management to the emerging CEM market.

Our primary insights products include scalable, cloud-based SaaS technologies which gather and display customer experience insights and business intelligence in real-time. Together, Touchpoint Mapping ® and these technologies are designed to help our customers:

*          Increase retention by keeping customers longer;
*          Get existing customers to spend more, more often;
*          Increase acquisition of new customers through positive word-of-mouth, and;
*          Reduce the cost of serving customers by eliminating ineffective interactions.

We are customizing Touchpoint Mapping ® for targeted industry niches – e.g., banking, hospitals and retail trade – and plan to license it for distribution worldwide. Aggregation and analysis of industry data will be used for the development of related information products and consulting services.

There are four principle strategies that we use to help meet our goals of scaling growth at low incremental costs, creating barriers to entry for future competitors.


 
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Research-based approach to “outside in” customer insights :

Customer Relationship Management (CRM) -- which generally doesn’t take into account a customers’ view of the company, and usually doesn’t capture how these interactions make customers feel -- relies on an internally-generated “inside out” view of the customer. Touchpoint Mapping provides a Voice of the Customer (VoC) based, “outside-in” view of the customer. It is a fact-based approach that can help companies’ impact experience by measuring the customers’ perspective, as well as how well their wants and needs are being met.

Best-in-breed technology and integration :

Our product solution is designed to be highly scalable and cloud-based, and uses a combination of proprietary and commercially available software. With the continued growth and widespread acceptance of cloud computing, our firm can leverage multiple, separate purpose-built technologies through strategic commercial relationships on a subscription or other similar fee basis, allowing us to limit technology risk (including development costs), while focusing product development on those areas of proprietary technology and services creation that drive the greatest enterprise value for the firm.

Licensee and partner distribution channels

In addition to direct sales, we plan to establish a global reseller distribution channel. We anticipate that these will be companies such as CRM consultants, ad agencies, industry-focused technology firms and others looking for new ways to drive revenue and provide insights to existing customers.

Competition

Multiple potential competitors exist in the overlapping areas of marketing research, CRM and marketing management consulting. These include both large and small management consulting firms and more often smaller Customer Experience Management (CEM) consulting firms. In addition, many CRM software companies are beginning to include CEM-specific insights as adjunct capabilities to their existing platforms, and as a result these companies have the ability to compete directly with us as well. Given the growth of CEM, there are likely to be many other competitors we have not identified.

Insurance

We maintain health insurance, workman’s compensation and general liability insurance.

Employees; Identification of Certain Significant Employees

We currently have five full-time employees and nine independent contractors.  We intend to hire more employees and independent contractors on an as-needed basis.

Offices

Our company has four business addresses. Our telephone number is (415) 526-2655.  Our primary business address is located at 201 Spear Street, Suite 1100, San Francisco, CA 94105.

Our additional addresses include a business office in San Anselmo, California located at 251 Sir Francis Drake Boulevard, 94960.  We lease the aforementioned from the Annette Kaufman Survivor Trust, 2 Magnolia Avenue, San Anselmo, CA 94960 pursuant to a 36 month lease entered into on August 15, 2010.  Our monthly rental is $1,788 until July 18, 2012 and $1,840 thereafter.

 
- 14 -

 

Our office in Charlotte, North Carolina is located at 15720 John J. Delaney Dr., Suite 300, 28277. We lease the San Francisco and Charlotte spaces from Davinci Virtual LLC, 2150 South 1300 East, Suite 200, Salt Lake City UT 84106 pursuant to a commercial lease on a month to month basis.  Our monthly rental is $190.00 for our San Francisco location and $80.00 per month for our Charlotte, North Carolina location.  Our office in Vancouver, British Columbia is located at 2901-1050 Burrard Street, V6Z 2S3 (Canada), and is made available to us for no charge on a month-to-month basis under a verbal contract, by IREMCO. IREMCO is a controlling shareholder of Touchpoint Metrics.

Government Regulation

We are not currently subject to direct federal, state or local regulation other than regulations applicable to businesses.


MANAGEMENT

Officers and Directors

Our directors will serve until their successor is elected and qualified. Our officers are elected by the board of directors to a term of one (1) year and serve until their successor is duly elected and qualified, or until he is removed from office. The board of directors has no nominating, auditing or compensation committees.

The names, addresses, ages and positions of our officers and directors are set forth below:

Name and Address
Age
Position(s)
Michael Hinshaw
50
President, Principal Executive Officer, Treasurer,
201 Spear Street, Suite 1100
 
Principal Financial Officer, Principal Accounting
San Francisco, CA 94105
 
Officer and a member of the Board of Directors
     
Lynn Davison
48
Vice-President, Secretary
201 Spear Street, Suite 1100
   
San Francisco, CA 94105
   
 
Ashley Garnot
26
Director
201 Spear Street, Suite 1100
   
San Francisco, CA 94105
   

The people named above are expected to hold their offices/positions until the next annual meeting of our stockholders.

Background of Officers and Directors

Michael Hinshaw - President, Principal Executive Officer, Treasurer, Principal Financial Officer, Principal Accounting Officer and a director.

Since March 31, 2006, Mr. Hinshaw has been our President, Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer and a director. Mr. Hinshaw has served as Treasurer and Principal Accounting Officer since December 7, 2011.

 
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Lynn Davison - Vice-President, Secretary

Since February 7, 2011, Ms. Davison has been our Vice-President.  From April 2004 to February 2011, Ms. Davison worked as an independent management consultant to a range of start-up, mid-sized and Fortune 500 clients providing strategic business consulting services to improve business performance and overall growth.

Ashley Garnot - Director

Since December 7, 2011, Ashley Garnot has been a member of the board of directors.  Since October 21, 2011, Ms. Garnot has been a member of the board of directors of Coronado Resources Ltd., a Canadian corporation listed for trading on the TSX Venture Exchange under the symbol CRD.  Coronado Resources Ltd. is located in Vancouver, British Columbia.

Audit Committee Financial Expert

We do not have an audit committee financial expert. We do not have an audit committee financial expert because we believe the cost related to retaining a financial expert at this time is prohibitive. Further, because of the size of our operations, at the present time we believe the services of a financial expert are not warranted.

Involvement in Certain Legal Proceedings

During the past ten years, Mr. Hinshaw, Ms. Davison and Ms. Garnot have not been the subject of the following events:

1.
A petition under the Federal bankruptcy laws or any state insolvency law filed by or against, or a receiver, fiscal agent or similar officer appointed by a court for the business or property of such person, or any partnership in which he/she was a general partner at or within two years before the time of such filing, or any corporation or business association of which he/she was an executive officer at or within two years before the time of such filing;

2.
Convicted in a criminal proceeding or named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

3.
The subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him/her from, or otherwise limiting, the following activities;

 
i)
Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator,  floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity; or

 
ii)
Engaging in any type of business practice; or


 
- 16 -

 

 
iii)
Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws.

4.
The subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph 3.i in the preceding paragraph or to be associated with persons engaged in any such activity;

5.
Found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;

6.
Found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;

7.
The subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

 
i)
Any Federal or State securities or commodities law or regulation; or

 
ii)
Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or

 
iii)
Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

8.
Was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Securities Exchange Act of 1934, as amended, (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Conflicts of Interest

There are no conflicts of interest with respect to our officers, directors and key employees.


EXECUTIVE COMPENSATION

The following table sets forth information with respect to compensation paid by us to our officers for the last two years.


 
- 17 -

 

Officer Compensation Table
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
             
Change in
   
             
Pension
   
             
Value &
   
           
Non-Equity
Nonqualified
   
           
Incentive
Deferred
All
 
           
Plan
Compen-
Other
 
       
Stock
Option
Compen-
sation
Compen-
 
Name and Principal
 
Salary
Bonus
Awards
Awards
sation
Earnings
sation
Totals
Position
Year
($)
($)
($)
($)
($)
($)
($)
($)
Michael Hinshaw
2011
300,000
0
0
0
0
0
1,500
301,500
President
2010
300,000
0
0
0
0
0
1,500
301,500
                   
Lynn Davison
2011
121,000
0
0
0
0
0
0
121,000
Vice President
2010
0
0
0
0
0
0
0
0

The following table sets forth information with respect to compensation paid by us to our directors during the last completed fiscal year. Our fiscal year end is December 31.

Director Compensation Table
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
         
Change in
   
         
Pension
   
 
Fees
     
Value and
   
 
Earned
   
Non-Equity
Nonqualified
All
 
 
or
   
Incentive
Deferred
Other
 
 
Paid in
Stock
Option
Plan
Compensation
Compen-
 
 
Cash
Awards
Awards
Compensation
Earnings
sation
Total
Name
($)
($)
($)
($)
($)
($)
($)
Michael Hinshaw
0
0
0
0
0
0
0
Ashley Garnot
0
0
0
0
0
0
0

All compensation received by our officers and directors has been disclosed.

There are no retirement, pension, or profit sharing plans for the benefit of our officers and directors other than our stock option plan.  The stock option plan reserves 2,500,000 shares of common stock that may be issued at the discretion of the board of directors.

Indemnification

Under our Articles of Incorporation and Bylaws of the corporation, we may indemnify an officer or director who is made a party to any proceeding, including a lawsuit, because of his or her position, if he or she acted in good faith and in a manner he or she reasonably believed to be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding as to which he or she is to be indemnified, we must indemnify him or her against all expenses incurred, including attorney’s fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of California.


 
- 18 -

 

Regarding indemnification for liabilities arising under the Securities Act of 1933, as amended, which may be permitted to directors or officers under California law, we are informed that, in the opinion of the Securities and Exchange Commission, indemnification is against policy, as expressed in the Act and is, therefore, unenforceable.


PRINCIPAL AND SELLING SHAREHOLDERS

The following table sets forth, as of the date of this offering, the total number of shares owned beneficially by each of our directors, officers and key employees, individually and as a group, and the present owners of 5% or more of our total outstanding shares. The table also reflects what their ownership will be assuming completion of the sale of all shares in this public offering. The stockholders listed below have direct ownership of their shares and possess sole voting and dispositive power with respect to the shares.

Name and
Address of Beneficial Owner
Total number
of shares
owned prior
to offering
Percentage of
shares owned
prior to offering
Number of
shares being
offered
Percentage of
shares owned
after the offering
assuming all of
the shares are
sold in the offering
Michael Hinshaw    [1]
6,000,000
45.69%
3,000,000
22.84%
201 Spear Street, Suite 1100
       
San Francisco, CA 94105
       
   
 
   
Lynn Davison    [1]
0
0.00%
0
0.00%
201 Spear Street, Suite 1100
       
San Francisco, CA 94105
       
         
Ashley Garnot    [1]
850,000 [2]
6.40%
350,000
3.81%
201 Spear Street, Suite 1100
       
San Francisco, CA 94105
       
         
All officers and directors as a group
6,850,000
52.09%
3,350,000
26.65%
(3 individuals)
       
         
International Resource Management Corp.
1,962,302
14.94%
462,302
11.42%
2901-1050 Burrard Street
       
Vancouver, British Columbia  V6Z 2S3
       

[1]
The people named above may be deemed to be a “parent” or “promoter” of our company. Mr. Hinshaw, Ms. Davison and Ms. Garnot are our only promoters.

[2]
Comprised of 500,000 shares of common stock held in the name of ALG Investments Ltd., which is owned and controlled by Ms. Garnot; 250,000 shares owned by Ms. Garnot and her husband, Wade Garnot; and, 100,000 shares held in Ms. Garnot’s maiden name, Ashley Guidi.




 
- 19 -

 

Future Sales by Existing Stockholders

A total of 13,132,302 shares of common stock were issued to 73 persons, all of which are restricted securities, as defined in Rule 144 of the Rules and Regulations of the SEC promulgated under the Securities Act of 1933, as amended. Under Rule 144, the shares can be only sold, subject to volume restrictions and restrictions on the manner of sale, commencing one year after their acquisition, provided we are not classified as a “shell company” pursuant to Reg. 405 of the Securities Act of 1933, as amended.  If we are classified as a “shell company” our shares may not be resold until such time as we file a Form S-1 registration statement with the Securities and Exchange Commission (“SEC”) registering the shares for resale and the registration statement is declared effective or we file a Form 8-K and disclose the information required by Item 5.06 thereof and one (1) year has passed.  We believe we are not a shell company, nor have we ever been a shell company.

We have agreed to register the shares sold to you with the Securities and Exchange Commission.  We intend to file the registration statement not later than 30 days from the date we complete this public offering.

There is no trading market for our common stock. There are no outstanding options or warrants to purchase, or securities convertible into, our common stock. There are 73 holders of record for our common stock. The record holders are comprised of our two directors (including the common stock held in the name of Michael Hinshaw, ALG Investments, Ltd., Ashley Guidi, and Ashley and Wade Garnot) and 69 other investors.  A portion of Mr. Hinshaw’s shares will be registered along with shares owned by 70 other holders of record.

Securities Authorized for Issuance Under Equity Compensation Plans

     
Number of securities
 
Number of securities to
Weighted-average
remaining available for
 
be issued upon exercise
exercise price of
Future issuance under
 
of outstanding options,
outstanding options,
equity compensation plans
 
warrants and rights
warrants and rights
(excluding securities
Plan category
(a)
(b)
in column (a)) (c)
Equity compensation plans
     
approved by security holders
320,000
$0.34375
2,180,000
       
Equity compensation plans
     
not approved by securities
     
holders
None
None
None
 
     
Total
320,000
$0.34375
2,180,000

Selling Shareholders

The following table sets forth the name of each selling shareholder, the total number of shares owned prior to the offering, the percentage of shares owned prior to the offering, the number of shares offered, and the percentage of shares owned after the offering, assuming the selling shareholder sells all of his shares and we sell the maximum number of shares.


 
- 20 -

 


Name
Total
number of
shares owned
prior to
offering
Percentage of
shares owned
prior to offering
Number of
shares being
offered
Percentage of
shares owned
after the
offering
assuming all of
the shares are
sold in the
offering
Anderson, Elise
8,000
0.06%
8,000
0.00%
Aplas, Mark
10,000
0.08%
10,000
0.00%
Balaghi, Mohammade
20,000
0.15%
20,000
0.00%
Balter, Daniel
20,000
0.15%
20,000
0.00%
Bertuzzi, Georgina
20,000
0.15%
20,000
0.00%
Bertuzzi, Ronald
520,000
3.96%
520,000
0.00%
Bird, Kevin
30,000
0.23%
30,000
0.00%
Boman, Marvin
20,000
0.15%
20,000
0.00%
Brant Investments Limited [1]
400,000
3.05%
400,000
0.00%
Braverman, Eitan
20,000
0.15%
20,000
0.00%
Brown, Dan
20,000
0.15%
20,000
0.00%
Brown, Gary
40,000
0.30%
40,000
0.00%
Brown, Paula
40,000
0.30%
40,000
0.00%
Carina Investments [2]
400,000
3.05%
400,000
0.00%
Ciancone, Mario
20,000
0.15%
20,000
0.00%
Ciancone, Mark
20,000
0.15%
20,000
0.00%
Clark, Robert
12,000
0.09%
12,000
0.00%
Clements, Anitra
10,000
0.08%
10,000
0.00%
Clerkson, Casey
20,000
0.15%
20,000
0.00%
Dabbs, Tracy
30,000
0.23%
30,000
0.00%
Docker, Jo-Anne
20,000
0.15%
20,000
0.00%
Dzedets, Alexander
20,000
0.15%
20,000
0.00%
Dzedets, Boris
20,000
0.15%
20,000
0.00%
Dzedets, Zinaida
20,000
0.15%
20,000
0.00%
Fazli, Cameron
20,000
0.15%
20,000
0.00%
Fazli, Hayley
20,000
0.15%
20,000
0.00%
Fazli, Saeid
20,000
0.15%
20,000
0.00%
Florence, Leya
20,000
0.15%
20,000
0.00%
Fooks, Gary
20,000
0.15%
20,000
0.00%
Garnot Ashley/Garnot, Wade
250,000
1.90%
250,000
0.00%
Ghini, Gerald
20,000
0.15%
20,000
0.00%
Golnik, Semyon
20,000
0.15%
20,000
0.00%
Guidi, Ashley
100,000
0.76%
100,000
0.00%
Guidi, Luciano
80,000
0.61%
80,000
0.00%
Hinshaw, Michael
6,000,000
45.69%
3,000,000
22.84%
Holland, Brad
430,000
3.27%
430,000
0.00%
International Resource Management Corp. [3]
1,962,302
14.94%
462,302
11.42%
Johnson, Christine
20,000
0.15%
20,000
0.00%
Kay, Kenneth
20,000
0.15%
20,000
0.00%
Kay, Seth B.
20,000
0.15%
20,000
0.00%
Kvint, Susanna
20,000
0.15%
20,000
0.00%
Lafuente, Peter
20,000
0.15%
20,000
0.00%
Larabie, Eugene
10,000
0.08%
10,000
0.00%
Leshem, Ilana
20,000
0.15%
20,000
0.00%

 
- 21 -

 


Leshem, Maureen
20,000
0.15%
20,000
0.00%
Lightbody, Mike
20,000
0.15%
20,000
0.00%
Lundin, Lukas H.
400,000
3.05%
400,000
0.00%
Mayorov, Alexander
20,000
0.15%
20,000
0.00%
Mikhailova, Larissa
20,000
0.15%
20,000
0.00%
Naresh, Elijah
16,000
0.12%
16,000
0.00%
Nekrich, Salya
20,000
0.15%
20,000
0.00%
Owen, Chris
30,000
0.23%
30,000
0.00%
Panorama Ridge Investment Corporation [4]
80,000
0.61%
80,000
0.00%
Perone, Giuseppe
20,000
0.15%
20,000
0.00%
Platinum Capital Corp. [5]
20,000
0.15%
20,000
0.00%
Pollack, Dave
10,000
0.08%
10,000
0.00%
Pomykalski, Jack
20,000
0.15%
20,000
0.00%
Radi, Margaret
40,000
0.30%
40,000
0.00%
Raimundo, Jose
20,000
0.15%
20,000
0.00%
Rantucci, Robert
240,000
1.83%
240,000
0.00%
Ross, Ian
20,000
0.15%
20,000
0.00%
Rusch, Kevin
4,000
0.03%
4,000
0.00%
Sali, Barrie
20,000
0.15%
20,000
0.00%
Sali, Max
20,000
0.15%
20,000
0.00%
Schimdt, David
20,000
0.15%
20,000
0.00%
Schimdt, Irene
20,000
0.15%
20,000
0.00%
Shear, Craig
20,000
0.15%
20,000
0.00%
Stilwell, Kathy
20,000
0.15%
20,000
0.00%
Swedburg, Jennifer
20,000
0.15%
20,000
0.00%
Wall Street Financial Corp. [6]
20,000
0.15%
20,000
0.00%
W.D. Latimer & Co. LTD. [7]
100,000
0.76%
100,000
0.00%
TOTAL
12,132,302
92.39%
7,632,302
34.27%

[1]
Cecilia M. Kershaw exercises voting and dispositive control over the shares of common stock owned by Brant Investments Limited.
[2]
Ken Vidalin exercises voting and dispositive control over the shares of common stock owned by Carina Investments.
[3]
Alex P. Guidi exercises voting and dispositive control over the shares of common stock owned by International Resource Management Corp.
[4]
Jack Loretto exercises voting and dispositive control over the shares of common stock owned by Panorama Ridge Investment Corporation.
[5]
Jason Shull exercises voting and dispositive control over the shares of common stock owned by Platinum Capital Corp.
[6]
Shawn Balaghi exercises voting and dispositive control over the shares of common stock owned by Wall Street Financial.
[7]
Robert Pollack exercises voting and dispositive control over the shares of common stock owned by W.D. Latimer & Co. LTD.

Other than investing money with us, the foregoing selling security holders have had no material relationship with us during the last three years.

All natural persons named as selling security holders exercise voting and/or dispositive powers with respect to the securities to be offered for resale by our selling security holders.



 
- 22 -

 

No selling shareholder is an affiliate of a registered broker dealer.

The following is a summary of the issuances of all shares:

On April 14, 2006, we issued 3,000,000 restricted shares of common stock to Michael Hinshaw, our president, in consideration of services rendered valued at $1,500.00.  The shares of common stock were issued to Michael Hinshaw, our president pursuant to the exemption from registration contained in Section 4(2) of the Securities Act of 1933, as amended.  Mr. Hinshaw is a sophisticated investor and had access to the same information that can be found in Part I of a Form S-1 registration statement.

On April 14, 2006, we issued 1,000,000 restricted shares of common stock to five (5) individuals in consideration of $250,000.00.  The shares of common stock were issued pursuant to the exemption from registration contained in Regulation S of the Securities Act of 1933, as amended, in that the transactions took place outside the United States of America with non-US persons.

On April 27, 2007, we issued 950,000 restricted shares of common stock to four (4) individuals in consideration of $475,000.00.  The shares of common stock were issued pursuant to the exemption from registration contained in Regulation S of the Securities Act of 1933, as amended, in that the transactions took place outside the United States of America with non-US persons.

In July 2007, we issued 362,302 restricted shares of common stock to two (2) individuals in consideration of $181,151.00.  The shares of common stock were issued pursuant to the exemption from registration contained in Regulation S of the Securities Act of 1933, as amended, in that the transactions took place outside the United States of America with non-US persons.

On December 6, 2011 we issued 3,000,000 restricted shares of common stock to Michael Hinshaw, our president, in consideration of $30,000.00.  The shares of common stock were issued to Michael Hinshaw, our president pursuant to the exemption from registration contained in Section 4(2) of the Securities Act of 1933, as amended.  Mr. Hinshaw is a sophisticated investor and had access to the same information that can be found in Part I of a Form S-1 registration statement.

On December 6, 2011, we issued 2,500,000 restricted shares of common stock to three (3) individuals in consideration of $25,000.00.  The shares of common stock were issued pursuant to the exemption from registration contained in Regulation S of the Securities Act of 1933, as amended, in that the transactions took place outside the United States of America with non-US persons.

On January 4, 2012, we issued 2,320,000 restricted shares of common stock to sixty-two (62) individuals in consideration of $580,000.  The shares of common stock were issued pursuant to the exemption from registration contained in Regulation S of the Securities Act of 1933, as amended, in that the transactions took place outside the United States of America with non-US persons.



 
- 23 -

 

MARKET FOR OUR COMMON STOCK

No Public Market for Common Stock .

There is presently no public market for our common stock.  We intend to request that a market marker submit an application to FINRA to quote our common stock on the OTC Bulletin Board upon the effectiveness of the registration statement of which this prospectus forms a part.  We can provide no assurance that our shares will be traded on the bulletin board, or if traded, that a public market will materialize.

The Securities Exchange Commission has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system.  The last price of our common stock was in connection with our placement under the exemption from registration contained in Regulation S of the Securities Act of 1933, as amended, wherein we sold our common shares at $0.25 per share.  Thus, our common stock would qualify as penny stock.  The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the Commission, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;(b) contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of Securities’ laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask  price;(d) contains a toll-free telephone number for inquiries on disciplinary actions;(e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and;(f) contains such other information and is in such form, including language, type, size and format, as the Commission shall require by rule or regulation.

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with; (a) bid and offer quotations for the penny stock;(b) the compensation of the broker-dealer and its salesperson in the transaction;(c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d)  monthly account statements showing the market value of each penny stock held in the customer’s account.
 
In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.

These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our stock if it becomes subject to these penny stock rules. Therefore, because our common stock is subject to the penny stock rules, stockholders may have difficulty selling those securities.

Holders of Our Common Stock

Currently, we have 73 holders of record of our common stock.


 
- 24 -

 

Rule 144 Shares

All of the presently outstanding shares of our common stock are “restricted securities” as defined under Rule 144 promulgated under the Securities Act, as amended, and may only be sold pursuant to an effective registration statement or an exemption from registration, if available.  The SEC has adopted final rules amending Rule 144 which have become effective on February 15, 2008. Pursuant to the new Rule 144, one year must elapse from the time a “shell company”, as defined in Rule 405 of the Securities Act of 1933, as amended, and Rule 12b-2 of the Securities Exchange Act of 1934, as amended, ceases to be a “shell company” and files Form 10 information with the SEC, before a restricted shareholder can resell their holdings in reliance on Rule 144. Form 10 information is equivalent to information that a company would be required to file if it were registering a class of securities on Form 10 under the Securities Exchange Act 1934, as amended. A Form 10 includes information such as a description of the company’s business, risk factors associated with the business, financial information, description of the company’s properties, the securities ownership of the company’s management and 5% shareholders, a description of management and the board of directors, compensation for officers and directors, transactions in which the company entered into with officers and directors, legal proceedings, the market in which the company trades  its stock, sales of unregistered securities, among other information.  Under the amended Rule 144, restricted or unrestricted securities, that were initially issued by a reporting or non-reporting shell company or a company that was at anytime previously a reporting or non-reporting shell company, can only be resold in reliance on Rule 144 if the following conditions are met: (1) the issuer of the securities that was formerly a reporting or non-reporting shell company has ceased to be a shell company; (2) the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended; (3) the issuer of the securities has filed all reports and material required to be filed under Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, as applicable, during the preceding twelve months (or shorter period that the Issuer was required to file such reports and materials), other than Form 8-K reports; and (4) at least one year has elapsed from the time the issuer filed the current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.

At the present time, we are not classified as a “shell company” under Rule 405 of the Securities Act Rule 12b-2 of the Securities Exchange Act of 1934, as amended. As such, all restricted securities presently held by the affiliates of our company may be resold in reliance on Rule 144 one year from the date of issuance.

Stock Option Grants

Information concerning individual grants of stock options, whether or not in tandem with stock appreciation rights (“SARs”), and freestanding SARs made during fiscal 2011 to each of the named executive officers is reflected in the table below.

Option/SAR Grants in Fiscal 2011 – Individual Grants
 
Number of
Percent of Total
   
 
Securities Underlying
Options/SARs
Exercise
 
 
Options/SARs Granted
Granted to Employees
or Base
Expiration
Name
(#)
in Fiscal Year
Price
Date
Lynn Davison
300,000
100%
$0.35
February 7, 2021



 
- 25 -

 

Aggregated Option/SAR Exercises and Fiscal 2011 Year-End Option/SAR Value Table

The following table sets forth certain information with respect to each exercise of stock options and SARs during fiscal 2011 by each of the named executive officers, and the fiscal 2011 year-end value of unexercised options and SARs. The dollar values are calculated by determining the difference between the exercise or base price of the options and the fair market value of the underlying stock at the time of exercise and at fiscal year-end if unexercised, respectively.  The unexercised options, some of which may be exercisable, have not been exercised and it is possible they might never be exercised.  Actual gains realized, if any, on stock option exercises and common stock holdings are dependent on the future performance and value of the common stock and overall stock market conditions. There can be no assurance that the projected gains and values shown in this Table will be realized.

Aggregated Option/SAR Exercises in Fiscal 2011 and Option/SAR Values at December 31, 2011
     
Number of Securities
Value of Unexercised
 
Shares
 
Underlying Unexercised
In-the-Money
 
Acquired on
Value
Options/SARs
Options/SARs
Name
Exercise (#)
Realized
at FY-End (#)
at FY-End ($)
     
Exercisable
Unexercisable
Exercisable
Unexercisable
Lynn Davison
0
0
0
300,000
$0
$0

In addition, in 2012, we granted Kris Clark an option to acquire up to 20,000 shares of common stock at an exercise price of $0.25 per share with one-third of the shares vesting December 15 of each year commencing 2012.

Registration Rights

We have not granted registration rights to the selling shareholders or to any other persons.

We are paying the expenses of the offering because we seek to: (i) become a reporting company with the Commission under the Securities Exchange Act of 1934, as amended; and (ii) enable our common stock to be traded on the OTC Bulletin Board.  We must be a reporting company under the 1934 Act in order that our common stock is eligible for trading on the OTC Bulletin Board.  We will become a reporting company under Section 15 of the 1934 Act upon the effectiveness of this Registration Statement.  We believe that the registration of the resale of shares on behalf of existing shareholders may facilitate the development of a public market in our common stock if our common stock is approved for trading on a recognized market for the trading of securities in the United States.  In addition, we plan to file a Form 8-A registration statement with the Commission to cause us to become a reporting company with the Commission under Section 12 of the 1934 Act.
 
We consider that the development of a public market for our common stock will make an investment in our common stock more attractive to future investors.  In the near future, in order for us to continue with our business plan program, we will need to raise additional capital.  We believe that obtaining reporting company status under the 1934 Act and trading on the OTCBB should increase our ability to raise these additional funds from investors.



 
- 26 -

 

DESCRIPTION OF SECURITIES

Common Stock

Our authorized capital stock consists of 30,000,000 shares of common stock, no par value per share. The holders of our common stock:

*
have equal ratable rights to dividends from funds legally available if and when declared by our board of directors;
*
are entitled to share ratably in all of our assets available for distribution to holders of common stock upon liquidation, dissolution or winding up of our affairs;
*
do not have preemptive, subscription or conversion rights and there are no redemption or sinking fund provisions or rights; and
*
are entitled to one non-cumulative vote per share on all matters on which stockholders may vote.

All shares of common stock now outstanding are fully paid for and non-assessable and all shares of common stock which are the subject of this public offering, when issued, will be fully paid for and non-assessable. We refer you to our Articles of Incorporation, Bylaws and the applicable statutes of the State of California for a more complete description of the rights and liabilities of holders of our securities.  All material terms of our common stock have been addressed in this section.

Non-Cumulative Voting

Holders of shares of our common stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in that event, the holders of the remaining shares not be able to elect any of our directors.

Cash Dividends

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

Stock Transfer Agent

Our stock transfer agent for our securities will be Computershare N.A., 250 Royall Street, Canton, Massachusetts 02021 and its telephone number is (781) 575-2000.

General

There are no other securities authorized in our articles of incorporation.


 
- 27 -

 

CERTAIN TRANSACTIONS

On April 14, 2006, we issued 3,000,000 restricted shares of common stock to Michael Hinshaw, our president, in consideration of services valued at $1,500.00.  On December 6, 2011, we issued 3,000,000 restricted shares of common stock to Mr. Hinshaw, in consideration of $30,000.00. The shares were issued pursuant to the exemption from registration contained in Section 4(2) of the Securities Act of 1933, as amended.  Mr. Hinshaw was furnished with all of the information that is contained in a registration statement and is a sophisticated investor.  No commission was paid to anyone in connection with the sale of shares to Mr. Hinshaw.

On July 20, 2007, we issued 100,000 restricted shares of common stock to Ashley Guidi, now known as Ashley Garnot, in consideration of $50,000.00.  The shares of common stock were issued pursuant to the exemption from registration contained in Regulation S of the Securities Act of 1933, as amended, in that the transactions took place outside the United States of America with non-US persons.

On December 6, 2011, we issued 500,000 restricted shares of common stock to ALG Investments Ltd., a corporation owned and controlled by Ashley Garnot, in consideration of $5,000.00.  The shares of common stock were issued pursuant to the exemption from registration contained in Regulation S of the Securities Act of 1933, as amended, in that the transactions took place outside the United States of America with non-US persons.

On January 4, 2012, we issued 250,000 restricted shares of common stock to Ashley Garnot and her husband Wade, in consideration of $62,500.00.  The shares of common stock were issued pursuant to the exemption from registration contained in Regulation S of the Securities Act of 1933, as amended, in that the transactions took place outside the United States of America with non-US persons.

Our office in Vancouver, British Columbia is located at 2901-1050 Burrard Street, V6Z 2S3 (Canada), and is made available to us for no charge on a month-to-month basis under a verbal contract with IREMCO. IREMCO is a controlling shareholder of Touchpoint Metrics.


LITIGATION

We are not a party to any pending litigation and none is contemplated or threatened.


EXPERTS

Our financial statements for the years ended December 31, 2011, 2010 and 2009 included in this prospectus have been audited by Hillary CPA Group, Independent Registered Public Accounting Firm, 9465 Counselors Row, Suite 200, Indianapolis, Indiana 46240, telephone (317) 222-1416, as set forth in its report included in this prospectus. Its report is given upon its authority as experts in accounting and auditing.  Hillary CPA Group is registered with the Public Company Accounting Oversight Board.



 
- 28 -

 

LEGAL MATTERS

The Law Office of Conrad C. Lysiak, P.S., 601 West First Avenue, Suite 903, Spokane, Washington 99201, telephone (509) 624-1475 has passed on the legality of the shares being sold in this public offering.


FINANCIAL STATEMENTS

Our fiscal year end is December 31. We will provide audited financial statements to our stockholders on an annual basis; the statements will be audited by a firm registered with the Public Company Accounting Oversight Board.

Audited financial statements for the years ended December 31, 2011 and December 31, 2010 follow:

 
INDEX
   
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
F-1
FINANCIAL STATEMENTS (Audited)
 
 
Balance Sheets
F-2
 
Income Statements
F-3
 
Statements of Cash Flows
F-4
Notes to Financial Statements
F-5









 
- 29 -

 




INDEPENDENT AUDITOR’S REPORT

To the Board of Directors and Shareholders
Touchpoint Metrics, Inc.
San Francisco, California

We have audited the accompanying statements of financial position of Touchpoint Metrics, Inc. (a California corporation) as of December 31, 2011 and 2010 and the related statements of income, retained earnings, and cash flows for the years then ended. All information included in these financial statements is the representation of the management of Touchpoint Metrics, Inc. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Touchpoint Metrics, Inc. as of December 31, 2011 and 2010 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ David L. Hillary, Jr., CPA, CITP
Indianapolis, Indiana
February 15, 2012














F-1

 
- 30 -

 

Touchpoint Metrics, Inc.
Balance Sheet as of December 31, 2011 and 2010

 
2011
2010
ASSETS
   
Current Assets
   
Checking
$33,189.77
$1,819.88
Savings
$18,919.02
$166,051.62
Accounts Receivable
$61,218.08
$102,232.25
Total Current Assets
$113,326.87
$270,103.75
Fixed Assets
   
Computers & Hardware
$43,028.91
$40,553.05
Software
$38,645.98
$38,645.98
Equipment
$2,359.34
$2,359.34
Furniture
$31,730.60
$31,274.55
Leasehold Improvements
$95,608.48
$95,608.48
Land
$85,000.00
$85,000.00
Land Improvements
$4,000.00
$4,000.00
Accumulated Depreciation
($139,919.00)
($128,740.00)
Organization Costs
$1,377.19
$1,377.19
Accumulated Amortization
($1,377.19)
($1,377.19)
Total Fixed Assets
$160,454.31
$168,701.40
Other Assets
   
Prepaid Expenses
$11,995.34
$7,554.34
Investment in Petro Portfolio
$131,151.00
$131,151.00
Deposits
$3,474.00
$3,783.00
Total Other Assets
$146,620.34
$142,488.34
     
TOTAL ASSETS
$420,401.52
$581,293.49
     
LIABILITIES AND EQUITY
   
Liabilities
   
Current Liabilities
   
Accounts Payable
$47,359.16
$13,111.25
Credit Cards Payable
$22,893.37
 
Current Portion - Capital Lease
 
$8,713.00
Security Deposits
$2,300.00
$2,300.00
Notes Payable - Short-term
$3,000.00
$3,000.00
Payroll Liabilities
$1,452.20
$56.00
Total Current Liabilities
$77,004.73
$27,180.25
Long-Term Liabilities
   
Notes Payable - Long-term
$151,500.00
$0.00
Total Long-Term Liabilities
$151,500.00
$0.00
     
Total Liabilities
$228,504.73
$27,180.25
     
Equity
   
Retained Earnings
($352,037.76)
($367,320.49)
Common Stock
$946,151.00
$906,151.00
Net Income
($402,216.45)
$15,282.73
Total Equity
$191,896.79
$554,113.24
     
TOTAL LIABILITIES AND EQUITY
$420,401.52
$581,293.49

F-2

 
- 31 -

 

Touchpoint Metrics, Inc.
Income Statement for the years ended December 31, 2011 and 2010


 
2011
2010
Revenue
   
Consulting Services
$290,220.58
$124,877.00
Creative & Production Services
$46,980.00
$464,453.64
Research
$226,303.00
$442,066.50
Products & Other
$47,870.25
$50,992.26
Total Revenue
$611,373.83
$1,082,389.40
     
Cost of Goods Sold
   
Labor
$88,374.95
$111,180.94
Services
$90,348.93
$215,187.44
Products & Other
$63,150.31
$43,130.97
Total Cost of Goods Sold
$241,874.19
$369,499.35
     
Gross Profit
$369,499.64
$712,890.05
     
Expenses
   
Administrative Costs
$31,544.76
$28,335.68
Automobile Expense
$22,422.82
$33,281.50
Computers and Software
$21,987.38
$16,708.61
Contract Services
$89,040.74
$147,568.50
Insurance
$33,763.92
$26,087.97
Marketing and Promotion
$32,324.39
$56,529.90
Professional Fees
$45,474.77
$23,471.94
Rent
$27,218.96
$76,653.84
Repairs and Maintenance
$621.37
$16,271.02
Salaries and Wages
$428,545.01
$228,287.21
Taxes
$4,362.94
$3,602.64
Travel Expenses
$25,892.05
$34,563.87
Utilities
$9,034.35
$9,951.22
Total Expenses
$772,233.46
$701,313.90
     
Net Operating Income
($402,733.82)
$11,576.15
     
Other Income/Expense
   
Other Income
$517.37
$3,706.58
Total Other Income/Expense
$517.37
$3,706.58
     
Net Income
($402,216.45)
$15,282.73









F-3

 
- 32 -

 

Touchpoint Metrics, Inc
Statement of Cash Flows for the years ended December 31, 2011 and 2010


 
2011
2010
OPERATING ACTIVITIES
   
Net Income
($402,216.45)
$15,282.73
Adjustments to reconcile Net Income to Net Cash
provided by operations:
   
Accounts Receivable
$41,014.17
$28,853.19
Accounts Payable
$34,247.91
($36,855.33)
Notes Payable - Short-term
$0.00
($14,500.00)
Credit Card Expenses
$22,893.37
$0.00
Capital Lease - Short-term
($8,713.00)
($2,063.00)
Payroll Liabilities
$1,396.20
($12,127.50)
Net cash provided by operating activities
($311,377.80)
($21,409.91)
     
INVESTING ACTIVITIES
   
Capital Purchases
($2,931.91)
($1,406.10)
Accumulated Depreciation
$11,179.00
$12,790.00
Deposits
$309.00
($3,474.00)
Prepaid Expenses
($4,441.00)
$0.00 
Net cash provided by investing activities
$4,115.09
$7,909.90
     
FINANCING ACTIVITIES
   
Notes Payable - Long-term
$151,500.00
$0.00
Capital Lease - Long-term
$0.00
($8,713.00)
Common Stock
$40,000.00
$0.00
Net cash provided by financing activities
$191,500.00
($8,713.00)
     
Net cash increase for period
($115,762.71)
($22,213.01)
Cash at beginning of period
$167,871.50
$190,084.51
Cash at end of period
$52,108.79
$167,871.50



















F-4

 
- 33 -

 

Touchpoint Metrics, Inc.

Notes to Financial Statements
December 31, 2011 and 2010


1.      NATURE OF ORGANIZATION

Touchpoint Metrics, Inc. is a for profit corporation established under the corporation laws in the State of California, United States of America on December 14, 2001. The corporation operated as The Innes Group, Inc., until filing a Certificate of Amendment to the Articles of Incorporation effective October 18, 2011.

Touchpoint Metrics, Inc. is involved in the development of customer experience management software. Touchpoint Metrics, Inc. dba MCorp Consulting is a brand and customer experience research consultancy that maps and improves the touchpoints between organizations and their customers. Their focus assists companies improve business performance by measuring and transforming the ways they interact with customers.

They service a wide variety of industries and customer size.


2.      SIGNIFICANT ACCOUNTING POLICIES

The financial statements of Touchpoint Metrics, Inc. are presented on the accrual basis. The significant accounting policies followed are described below to enhance the usefulness of the financial statements to the reader.

The preparation of financial statements is in conformity with accounting principles generally accepted in the United States of America, This requires management to make estimates and assumptions that affect the reported amounts and disclosures at the date of the financial statements and during the reporting period. Actual results could differ from those estimates.

CASH, CASH EQUIVALENTS, AND CREDIT RISK

Cash and cash equivalents are comprised of highly liquid investments with original maturity dates of less than three months that are not reported as investments. While Touchpoint Metrics, Inc. may maintain cash and cash equivalents in bank deposit accounts, which at times exceed Federal Deposit Insurance Corporation insured limits, they have not experienced any losses in such accounts.

Portions of the bank deposit accounts are held in Canadian banks on a Canadian and US Dollar basis. The balances in these accounts at times exceed Canada Deposit Insurance Corporation insured limits. They have not experienced any losses in these accounts.

Management believes it is not exposed to any significant credit risk on cash and cash equivalents.

INVESTMENTS

Touchpoint Metrics, Inc. reports investments at published market or fair value with gains and losses reported in the income statements.




F-5

 
- 34 -

 

DISCLOSURES ABOUT FAIR VALUE OF ASSETS AND LIABILITIES

Effective January 1, 2008, Touchpoint Metrics, Inc. adopted Statement of Financial Accounting Standards No. 157, Fair Value Measurements (FAS 157).  FAS 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

FAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FAS 157 also establishes a fair value hierarchy, which requires Touchpoint Metrics, Inc. to maximize the use of observable inputs and minimize the use of observable inputs and minimize the use of unobservable inputs, when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1         Quoted prices in active markets for identical assets or liabilities.

 
Level 2
Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 
Level 3
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis and recognized in the accompanying financial statements, as well as the general classification of such instruments pursuant to the valuation hierarchy.

Cash and Cash Equivalents

The carrying amount approximates fair value.

Property, Improvements, and Depreciation
Property and equipment are stated at cost or estimated historical cost through appraisal. Betterments, renewals, and extraordinary repairs over $1,000 that extend the life of the assets are capitalized; other repairs and maintenance are expensed.

The cost and accumulated depreciation applicable to assets retired are removed from the accounts, and the gain or loss on disposition is recognized as other income or expense. Depreciation and amortization is computed on various methods as follows:

Depreciable Asset Class
Method
Depreciable Life
Software Design & Development
Straight Line
3-Years
Organization Costs
Straight Line
3-Years
Real Property Improvements
150 DB HY
15-Years
Computer Equipment
200 DB HY
5-Years
Furniture and Fixtures
200 DB HY
7-Years
Leasehold Improvements
Straight Line
15-Years
Machinery and Equipment
200 DB HY
7-Years






F-6

 
- 35 -

 

REVENUES AND EXPENSES

Revenues are reported when earned or realizable in accordance with accrual basis accounting.

Expenses are reported when incurred in accordance with accrual basis accounting.

The costs of providing the various services and supporting activities have been allocated, based on management’s estimate, among the services and supporting activities benefited.


3.      PROPERTY AND IMPROVEMENTS

Property and improvements consist of:

 
December 31,
 
2010
2011
Computers & Hardware
$40,553.05
$43,028.91
Software Design & Development
$38,645.98
$38,645.98
Equipment
$2,359.34
$2,359.34
Furniture & Fixtures
$31,274.55
$31,730.60
Leasehold Improvements
$95,608.48
$95,608.48
Intangible Assets
$1,377.19
$1,377.19
Real Estate Improvements
$4,000.00
$4,000.00
Real Estate (Land)
$85,000.00
$85,000.00
Total Property and Improvements
$298,818.59
$301,750.50
Less: Accumulated Depreciation
($130,117.19)
($141,296.19)
Net Property and Improvements
$168,701.40
$160,454.31


4.      INVENTORY

Touchpoint Metrics, Inc. does not carry any inventory. All products are purchased and resold on an as needed basis.


5.      ACCOUNTS RECEIVABLE

The Accounts Receivable balances and aging are significantly better than many service related companies. There are no Accounts Receivable balances that exceed 30 days.

 
Aging Periods
 
 
< 30 Days
30 to 60 Days
60 to 90 Days
Over 90 Days
Total A/R
2010
$102,232.25
     
$102,232.25
2011
$13,379.83
$47,838.25
   
$61,218.08

SIGNIFICANT CLIENTS

Touchpoint Metrics, Inc. sells services to a broad range of clients under various terms. The mix of clients ranges from start-ups to Fortune 500 companies across multiple industries.

Sales are concentrated among a few large clients. For the years ended 2010 and 2011, the percentage of sales and the concentration is as follows:

F-7

 
- 36 -

 


 
2010
2011
Three largest clients
74.85%
66.30%
Next three largest clients
22.93%
25.00%
All other clients
2.22%
8.70%
 
100.00%
100.00%

Touchpoint Metrics, Inc. has strong relationships with their clients and believes that they are credit worthy. Sales are made without collateral and the credit-related losses have been insignificant or non-existent. Accordingly, there is no provision made to include an allowance for doubtful accounts.


6.      OTHER ASSETS

Other assets are comprised of security deposits, prepaid expenses, and a significant investment in PetroPortfolio, which is a clearinghouse of information about the global energy market.


7.      ACCOUNTS PAYABLE

Touchpoint Metrics, Inc. operates primarily on a pay as you go basis using minimal credit available through trade accounts.

 
Aging Periods
 
 
< 30 Days
30 to 60 Days
60 to 90 Days
Over 90 Days
Total A/P
2010
$13,111.25
     
$13,111.25
2011
$36,578.23
$5,892.93
$1,300.00
$3,588.00
$47,359.16

The over 90 Days accounts are primarily due to incomplete delivery of the final product or service. As a percentage of total expenses, the outstanding balances are insignificant and immaterial to the operations.

There is no significant concentration of the vendors used by the company.


8.      OTHER CURRENT LIABILITIES

The other current liabilities carried by the company are normal liabilities for continuing operations comprised primarily of payroll tax payable and credit card debt.


9.      LONG-TERM DEBT

The company entered into two long-term debt instruments during 2011 totaling $150,000. Both notes are structured to incur balloon payments of the principal and 4% APR non-compounding accrued interest.


10.    STOCK

Touchpoint Metrics, Inc. is capitalized through the sale of stock totaling $906,151. There are 30,000,000 shares authorized. 5,500,000 additional restricted shares were issued during 2011 with 10,812,302 shares issued and outstanding.

F-8

 
- 37 -

 

11.    LEGAL

Touchpoint Metrics, Inc. has no known legal issues pending.


12.    INTERNAL CONTROLS

Touchpoint Metrics, Inc. has well documented processes and procedures. The internal controls are comparable to a firm of like size and configuration. The company uses outside third party services to effect a good segregation of duties and controls.


13.    SUBSEQUENT EVENTS

On January 4, 2012, Touchpoint Metrics, Inc. issued an additional 2,320,000 restricted shares for an additional $580,000 under a private placement memorandum. The total shares issued and outstanding on that date were 13,132,302.

During January and February 2012, Touchpoint Metrics, Inc. is undergoing final planning to file Form S-1 with the Securities and Exchange Commission to register the shares.


14.    GOING CONCERN

The accompanying financial statements and notes have been prepared assuming that Touchpoint Metrics, Inc. will continue as a going concern.



























F-9

 
- 38 -

 

PART II. INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13.      OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The estimated expenses of the offering, all of which are to be paid by the registrant, are as follows:

SEC Registration Fee
$
218.67
Printing Expenses
 
1,781.33
Accounting Fees and Expenses
 
10,000.00
Legal Fees and Expenses
 
25,000.00
Blue Sky Fees/Expenses
 
0.00
Transfer Agent Fees
 
3,000.00
TOTAL
$
40,000.00

ITEM 14.
INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The only statute, charter provision, bylaw, contract, or other arrangement under which any controlling person, director or officer of the Registrant is insured or indemnified in any manner against any liability which he may incur in his capacity as such, is as follows:

1.
Sixth Article of the Articles of Incorporation of the company, filed as Exhibit 3.1 to the Registration Statement.

2.
Article VI of the Amended and Restated Bylaws of the company, filed as Exhibit 3.3 to the Registration Statement.

3.
California Corporations Code 317.

The general effect of the foregoing is to indemnify a control person, officer or director from liability, thereby making the company responsible for any expenses or damages incurred by such control person, officer or director in any action brought against them based on their conduct in such capacity, provided they did not engage in fraud or criminal activity.

ITEM 15.
RECENT SALES OF UNREGISTERED SECURITIES.

Since inception, the Registrant has sold the following securities that were not registered under the Securities Act of 1933, as amended, as follows:

On April 30, 2006, we issued 3,000,000 restricted shares of common stock to Michael Hinshaw, our president, in consideration of $1,500.00.  The shares of common stock were issued to Michael Hinshaw, our president pursuant to the exemption from registration contained in Section 4(2) of the Securities Act of 1933, as amended.  Mr. Hinshaw is a sophisticated investor and had access to the same information that can be found in Part I of a Form S-1 registration statement.

On April 14, 2006, we issued 1,000,000 restricted shares of common stock to five (5) individuals in consideration of $250,000.00.  The shares of common stock were issued pursuant to the exemption from registration contained in Regulation S of the Securities Act of 1933, as amended, in that the transactions took place outside the United States of America with non-US persons.

 
- 39 -

 

On April 27, 2007, we issued 950,000 restricted shares of common stock to four (4) individuals in consideration of $475,000.00.  The shares of common stock were issued pursuant to the exemption from registration contained in Regulation S of the Securities Act of 1933, as amended, in that the transactions took place outside the United States of America with non-US persons.

In July 2007, we issued 362,302 restricted shares of common stock to two (2) individuals in consideration of $181,151.00.  The shares of common stock were issued pursuant to the exemption from registration contained in Regulation S of the Securities Act of 1933, as amended, in that the transactions took place outside the United States of America with non-US persons.

On December 6, 2011 we issued 3,000,000 restricted shares of common stock to Michael Hinshaw, our president, in consideration of $30,000.00.  The shares of common stock were issued to Michael Hinshaw, our president pursuant to the exemption from registration contained in Section 4(2) of the Securities Act of 1933, as amended.  Mr. Hinshaw is a sophisticated investor and had access to the same information that can be found in Part I of a Form S-1 registration statement.

On December 6, 2011, we issued 2,500,000 restricted shares of common stock to three (3) individuals in consideration of $25,000.00.  The shares of common stock were issued pursuant to the exemption from registration contained in Regulation S of the Securities Act of 1933, as amended, in that the transactions took place outside the United States of America with non-US persons.

On January 4, 2012, we issued 2,320,000 restricted shares of common stock to sixty-two (62) individuals in consideration of $580,000.  The shares of common stock were issued pursuant to the exemption from registration contained in Regulation S of the Securities Act of 1933, as amended, in that the transactions took place outside the United States of America with non-US persons.

ITEM 16.
EXHIBITS .

The following exhibits are filed as part of this Registration Statement, pursuant to Item 601 of Regulation S-K.

   
Incorporated by reference
Filed
Exhibit
Document Description
Form
Date
Number
herewith
           
3.1
Articles of Incorporation (12/14/2001).
     
X
           
3.2
Amended Articles of Incorporation (4/08/2006).
     
X
           
3.3
Amended Articles of Incorporation (10/17/2011).
     
X
           
3.4
Amended and Restated Bylaws.
     
X
           
4.1
Specimen Stock Certificate.
     
X
           
5.1
Opinion of The Law Office of Conrad C. Lysiak, P.S. regarding the legality of the securities being registered.
     
X
           

 
- 40 -

 


10.1
Lease Agreement for San Anselmo office.
     
X
           
10.2
Lease Agreement for North Carolina office
     
X
           
10.3
Lease Agreement for San Francisco office
     
X
           
10.4
Deed covering Lake County Real Property
     
X
           
10.5
Stock Option Plan
     
X
           
23.1
Consent of Hillary CPA Group, Independent Registered Public Accounting Firm.
     
X
           
23.2
Consent of The Law Office of Conrad C. Lysiak, P.S.
     
X

ITEM 17.      UNDERTAKINGS.

A.
The undersigned Registrant hereby undertakes:
     
 
(1)
To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement to:
       
   
(a)
include any prospectus required by Section 10(a)(3) of the Securities Act;
       
   
(b)
reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) under the Securities Act if, in the aggregate, the changes in volume and price represent no more than a 20% change in maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement; and
       
   
(c)
include any additional or changed material information with respect to the plan of distribution.
     
 
(2)
That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
     
 
(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 
- 41 -

 


 
(4)
To provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.
     
 
(5)
For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of a registration statement in reliance upon Rule 430A and contained in the form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of the registration statement as of the time it was declared effective.
     
 
(6)
For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new Registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
     
 
(7)
For the purpose of determining liability under the Securities Act to any purchaser:
     
   
Each prospectus filed pursuant to Rule 424(b) under the Securities Act as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A (§§230.430A of this chapter), shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
     
 
(8)
For the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of securities:
     
   
The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this Registration Statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
       
   
(a)
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424 of this chapter;
       
   
(b)
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
       
   
(c)
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

 
- 42 -

 


   
(d)
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
       
B.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the small business issuer pursuant to the foregoing provisions, or otherwise, the small business issuer has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the small business issuer of expenses incurred or paid by a director, officer or controlling person of the small business issuer in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the small business issuer will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
   
C.
To provide to the underwriter at the closing specified in the Underwriting Agreement certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.
   
D.
The undersigned Registrant hereby undertakes that:
   
 
(1)
For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.
     
 
(2)
For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.










 
- 43 -

 

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing of this Form S-1 Registration Statement and has duly caused this Form S-1 Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in San Francisco, California on this 24 th day of April, 2012.

 
TOUCHPOINT METRICS, INC.
 
(the “Registrant”)
   
 
BY:
MICHAEL HINSHAW
   
Michael Hinshaw
   
President, Principal Executive Officer, Treasurer, Principal Financial Office, Principal Accounting Officer and a member of the Board of Directors

Pursuant to the requirements of the Securities Act of 1933, as amended, this Form S-1 Registration Statement has been signed by the following persons in the capacities and on the dates indicated:

Signature
Title
Date
     
MICHAEL HINSHAW
President, Principal Executive Officer,
April 24, 2012
Michael Hinshaw
Treasurer, Principal Financial Officer, Principal Accounting Officer and a
member of the Board of Directors
 
     
ASHLEY GARNOT
Director
April 24, 2012
Ashley Garnot
   









 
- 44 -

 


EXHIBIT INDEX


   
Incorporated by reference
Filed
Exhibit
Document Description
Form
Date
Number
herewith
           
3.1
Articles of Incorporation (12/14/2001).
     
X
           
3.2
Amended Articles of Incorporation (4/08/2006).
     
X
           
3.3
Amended Articles of Incorporation (10/17/2011).
     
X
           
3.4
Amended and Restated Bylaws.
     
X
           
4.1
Specimen Stock Certificate.
     
X
           
5.1
Opinion of The Law Office of Conrad C. Lysiak, P.S. regarding the legality of the securities being registered.
     
X
           
10.1
Lease Agreement for San Anselmo office.
     
X
           
10.2
Lease Agreement for North Carolina office
     
X
           
10.3
Lease Agreement for San Francisco office
     
X
           
10.4
Deed covering Lake County Real Property
     
X
           
10.5
Stock Option Plan
     
X
           
23.1
Consent of Hillary CPA Group, Independent Registered Public Accounting Firm.
     
X
           
23.2
Consent of The Law Office of Conrad C. Lysiak, P.S.
     
X









 
- 45 -

 


Exhibit 3.1


 
 

 

 
 
 

 
 
 
 
 

 

Exhibit 3.2
EXHIBIT 3.2 - PAGE 1.

 
 

 

  EXHIBIT 3.2 - PAGE 2.
 
 
 

 
 
 

 

Exhibit 3.3
EXHIBIT 3.3 - PAGE 1.

 
 

 

  EXHIBIT 3.3 - PAGE 2.
 
 
 
 

 

Exhibit 3.4

AMENDED & RESTATED BYLAWS
OF
THE INNES GROUP, INC.
A California Corporation


ARTICLE I
OFFICES

Section 1.             PRINCIPAL EXECUTIVE OR BUSINESS OFFICES. The board of directors shall fix the location of the principal executive office of the corporation at any place within or outside the State of California. If the principal executive office is located outside California and the corporation has one or more business offices in California, the board shall fix and designate a principal business office in California.

Section 2.             OTHER OFFICES. Branch or subordinate offices may be established at any time and at any place by the board of directors.

ARTICLE II MEETINGS OF
SHAREHOLDERS

Section 1.             PLACE OF MEETINGS. Meetings of shareholders shall be held at any place within or outside the State of California designated by the board of directors.  In the absence of a designation by the board, shareholders' meetings shall be held at the corporation's principal executive office.

Section 2.             ANNUAL MEETING. The annual meeting of shareholders shall be held each year on a date and at a time designated by the board of directors. At each annual meeting, directors shall be elected and any other proper business within the power of the shareholders may be transacted.

Section 3.             SPECIAL MEETING.

(a)            A special meeting of the shareholders may be called at any time by the board of directors, by the president or by one or more shareholders holding shares that in the aggregate are entitled to cast ten percent (10%) or more of the votes at that meeting.

(b)            If a special meeting is called by anyone other than the board of directors, the person or persons calling the meeting shall make a request in writing, delivered personally or sent by registered mail or by telegraphic or other facsimile transmission, to the president and the secretary, specifying the time and date of the meeting (which is not less than thirty-five (35) nor more than sixty (60) days after receipt of the request) and the general nature of the business proposed to be transacted.  Within twenty (20) days after receipt, the officer receiving the request shall cause notice to be given to the shareholders entitled to vote, in accordance with Sections 4 and 5 of this Article II, stating that a meeting will be held at the time requested by the person(s) calling the meeting, and stating the general nature of the business proposed to be transacted. If notice is not given within twenty (20) days after receipt of the request, the person or persons

 
1

 


requesting the meeting may give the notice.  Nothing in this paragraph shall be construed as limiting, fixing or affecting the time when a meeting of shareholders called by action of the board may be held.

Section 4.             NOTICE OF SHAREHOLDERS' MEETINGS.  All notices of meetings of shareholders shall be sent or otherwise given in accordance with Section 5 of this Article II not fewer than ten (10) nor more than sixty (60) days before the date of the meeting.  Shareholders entitled to notice shall be determined in accordance with Section 11 of this Article II.  The notice shall specify the place, date and hour of the meeting, and (a) in the case of a special meeting, the general nature of the business to be transacted, or (b) in the case of the annual meeting, those matters that the board of directors, at the time of giving the notice, intends to present for action by the shareholders.  If directors are to be elected, the notice shall include the names of all nominees whom the board intends, at the time of the notice, to present for election.  The notice shall also state the general nature of any proposed action to be taken at the meeting to approve any of the following matters:

         (i)  A transaction in which a director has a financial interest, within the meaning of section 310 of the California Corporations Code;

         (ii)  An amendment of the articles of incorporation under section 902 of that Code:

         (iii)  A reorganization under section 1201 of that Code;

         (iv)  A voluntary dissolution under section 1900 of that Code; or

         (v)  A distribution in dissolution that requires approval of the outstanding shares under section 2007 of that Code.

Section 5.             MANNER OF GIVING NOTICE: AFFIDAVIT OF NOTICE.

(a)            Notice of any shareholders' meeting shall be given either personally or by first-class mail or telegraphic or other written communication, charges prepaid, addressed to the shareholder at the address appearing on the corporation's books or given by the shareholder to the corporation for purposes of notice.  If no address appears on the corporation's books or has been given as specified above, notice shall be either (i) sent by first-class mail addressed to the shareholder at the corporation's principal executive office, or (ii) published at least once in a newspaper of general circulation in the county where the corporation's principal executive office is located.  Notice is deemed to have been given at the time when delivered personally or deposited in the mall or sent by other means of written communication.

(b)            If any notice or report mailed to a shareholder at the address appearing on the corporation's books is returned marked to indicate that the United States Postal Service is unable to deliver the document to the shareholder at that address, all future notices or reports shall be deemed to have been duly given without further mailing if the corporation holds the document available for the shareholder on written demand at the corporation's principal executive office for a period of one year from the date the notice or report was given to all other shareholders.


 
2

 


(c)            An affidavit of the mailing or other authorized means of giving notice or delivering a document, of any notice of shareholders' meeting, report or other document sent to shareholders, may be executed by the corporation's secretary, assistant secretary or transfer agent and, if executed, shall be filed and maintained in the minute book of the corporation.

Section 6.             QUORUM.  The presence in person or by proxy of the holders of a majority of the shares entitled to vote at any meeting of the shareholders shall constitute a quorum for the transaction of business.  The shareholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum.

Section 7.             ADJOURNED MEETING; NOTICE.

(a)            Any shareholders' meeting, annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of the majority of the shares represented at that meeting, either in person or by proxy, but in the absence of a quorum, no other business may be transacted at that meeting, except as provided in Section 6 of this Article II.

(b)            When any meeting of shareholders, either annual or special, is adjourned to another time or place, notice of the adjourned meeting need not be given if the time and place are announced at the meeting at which the adjournment is taken, unless a new record date for the adjourned meeting is fixed, or unless the adjournment is for more than forty-five (45) days after the date set for the original meeting, in which case the board of directors shall set a new record date.  Notice of any such adjourned meeting, if required, shall be given to each shareholder of record entitled to vote at the adjourned meeting, in accordance with Sections 4 and 5 of this Article II.  At any adjourned meeting, the corporation may transact any business that might have been transacted at the original meeting.

Section 8.             VOTING.

(a)            The shareholders entitled to vote at any meeting of shareholders shall be determined in accordance with Section 11 of this Article II, subject to the provisions of sections 702 through 704 of the California Corporations Code relating to voting shares held by a fiduciary, in the name of a corporation, or in joint ownership.  The shareholders' vote may be by voice vote or by ballot; provided , however , that any election for directors must be by ballot if demanded by any shareholder before the voting has begun.  On any matter other than the election of directors, any shareholder may vote part of the shares the shareholder is to vote in favor of the proposal and refrain from voting the remaining shares or vote them against the proposal, but, if the shareholder fails to specify the number of shares that the shareholder is voting affirmatively, it will be conclusively presumed that the shareholder's approving vote is with respect to all shares that the shareholder is entitled to vote.  If a quorum is present (or if a quorum has been present earlier at the meeting but some shareholders have withdrawn), the affirmative vote of a majority of the shares represented and voting, provided such shares voting affirmatively also constitute a majority of the number of shares required for a quorum, shall be the act of the shareholders unless the vote of a greater number or voting by classes is required by law or by the articles of incorporation.

 
3

 


(b)            At a shareholders' meeting at which directors are to be elected, no shareholder shall be entitled to cumulate votes (i.e.,   cast for any candidate a number of votes greater than the number of votes which that shareholder normally would be entitled to cast), unless the candidates' names have been placed in nomination before commencement of the voting and a shareholder has given notice at the meeting, before the voting has begun, of the shareholder's intention to cumulate votes. If any shareholder has given such a notice, then all shareholders entitled to vote may cumulate their votes for candidates in nomination, and may give one candidate a number of votes equal to the number of directors to be elected multiplied by the number of votes to which that shareholder's shares are normally entitled, or distribute the shareholder's votes on the same principle among any or all of the candidates, as the shareholder thinks fit. The candidates receiving the highest number of votes, up to the number of directors to be elected, shall be elected.

Section 9.             WAIVER OF NOTICE OR CONSENT BY ABSENT SHAREHOLDERS.

(a)            The transactions of any meeting of shareholders, either annual or special, however called and noticed and wherever held, shall be as valid as though they were had at a meeting duly held after regular call and notice, if a quorum is present either in person or by proxy, and if each person entitled to vote who was not present in person or by proxy, either before or after the meeting, signs a written waiver of notice or a consent to holding the meeting or an approval of the minutes of the meeting. The waiver of notice or consent need not specify either the business to be transacted or the purpose of any annual or special meeting of the shareholders, except that, if action is taken or proposed to be taken for approval of any of those matters specified in section 601(f) of the California Corporations Code, i.e.:

         (i) A transaction in which a director has a financial interest, within the meaning of section 310 of the California Corporations Code;

         (ii) An amendment of the articles of incorporation under section 902 of that Code;

         (iii) A reorganization under section 1201 of that Code;

         (iv) A voluntary dissolution under section 1900 of that Code; or

         (v) A distribution in dissolution that requires approval of the outstanding shares under section 2007 of that Code,

then the waiver of notice or consent is required to state the general nature of the action or proposed action. All waivers, consents and approvals shall be filed with the corporate records or made a part of the minutes of the meeting.

(b)            A shareholder's attendance at a meeting also constitutes a waiver of notice of that meeting, unless the shareholder at the beginning of the meeting objects to the transaction of any business on the ground that the meeting was not lawfully called or convened. In addition, attendance at a meeting does not constitute a waiver of any right to object to consideration of matters required by law to be included in the notice of the meeting which were not so included, if that objection is expressly made at the meeting.


 
4

 


Section 10.           SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING.

(a)            Any action that could be taken at an annual or special meeting of shareholders may be taken without a meeting and without prior notice, if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take that action at a meeting at which all shares entitled to vote on that action were present and voted.

(b)            Directors may be elected by written consent of the shareholders without a meeting only if the written consents of all outstanding shares entitled to vote are obtained, except that vacancies on the board (other than vacancies created by removal) not filled by the board may be filled by the written consent of the holders of a majority of the outstanding shares entitled to vote.

(c)            All consents shall be filed with the secretary of the corporation and shall be maintained in the corporate records.  Any shareholder or other authorized person who has given a written consent may revoke it by a writing received by the secretary of the corporation before written consents of the number of shares required to authorize the proposed action have been filed with the secretary.

(d)            Unless the consents of all shareholders entitled to vote have been solicited in writing, prompt notice shall be given of any corporate action approved by shareholders without a meeting by less than unanimous consent, to those shareholders entitled to vote who have not consented in writing.  As to approvals required by California Corporations Code section 310 (transactions in which a director has a financial interest), section 317 (indemnification of corporate agents), section 1201 (corporate reorganization) or section 2007 (certain distributions on dissolution), notice of the approval shall be given at least ten days before the consummation of any action authorized by the approval.  Notice shall be given in the manner specified in Section 5 of this Article II.

Section 11.           RECORD DATE FOR SHAREHOLDER NOTICE OF MEETING, VOTING AND GIVING CONSENT.

(a)            For purposes of determining the shareholders entitled to receive notice of and vote at a shareholders' meeting or give written consent to corporate action without a meeting, the board may fix in advance a record date that is not more than sixty (60) nor less than ten (10) days before the date of a shareholders' meeting, or not more than sixty (60) days before any other action.

(b)            If no record date is fixed:

         (i)  The record date for determining shareholders entitled to receive notice of and vote at a shareholders' meeting shall be the business day next preceding the day on which notice is given or, if notice is waived as provided in Section 9 of this Article II, the business day next preceding the day on which the meeting is held.



 
5

 


         (ii) The record date for determining shareholders entitled to give consent to corporate action in writing without a meeting, if no prior action has been taken by the board, shall be the day on which the first written consent is given.

         (iii)  The record date for determining shareholders for any other purpose shall be as set forth in Section 1 of Article VII of these bylaws.

(c)            A determination of shareholders of record entitled to receive notice of and vote at a shareholders' meeting shall apply to any adjournment of the meeting unless the board fixes a new record date for the adjourned meeting.  However, the board shall fix a new record date if the adjournment is to a date more than forty-five (45) days after the date set for the original meeting.

(d)            Only shareholders of record on the corporation's books at the close of business on the record date shall be entitled to any of the notice and voting rights listed in subsection (a) of this section 11, notwithstanding any transfer of shares on the corporation's books after the record date, except as otherwise required by law.

Section 12.           PROXIES.  Every person entitled to vote for directors or on any other matter shall have the right to do so either in person or by one or more agents authorized by a written proxy signed by the person and filed with the secretary of the corporation.  A proxy shall be deemed signed if the shareholder's name is placed on the proxy (whether by manual signature, typewriting, telegraphic transmission or otherwise) by the shareholder or the shareholder's attorney in fact.  A validly executed proxy that does not state that it is irrevocable shall continue in full force and effect unless (i) revoked by the person executing it, before the vote under that proxy, by a writing delivered to the corporation stating that the proxy is revoked, or by attendance at the meeting and voting in person by the person executing the proxy or by a subsequent proxy executed by the same person and presented at the meeting; or (ii) written notice of the death or incapacity of the maker of that proxy is received by the corporation before the vote pursuant to that proxy is counted; provided , however , that no proxy shall be valid after the expiration of 11 months from the date of the proxy, unless otherwise provided in the proxy. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of sections 705(e) and 705(f) of the Corporations Code of California.

Section 13.           INSPECTORS OF ELECTION.

(a)            Before any meeting of shareholders, the board of directors may appoint any persons other than nominees for office to act as inspectors of election at the meeting or its adjournment.  If no inspectors of election are so appointed, the chair of the meeting may, and on the request of any shareholder or a shareholder's proxy shall, appoint inspectors of election at the meeting.  The number of inspectors shall be either one or three.  If inspectors are appointed at a meeting on the request of one or more shareholders or proxies, the holders of a majority of shares or their proxies present at the meeting shall determine whether one or three inspectors are to be appointed.  If any person appointed as inspector fails to appear or fails or refuses to act, the chair of the meeting may, and upon the request of any shareholder or a shareholder's proxy shall, appoint a person to fill that vacancy.



 
6

 


 

(b)            These inspectors shall:  (i) determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, and the authenticity, validity and effect of proxies; (ii) receive votes, ballots or consents; (iii) hear and determine all challenges and questions in any way arising in connection with the right to vote; (iv) count and tabulate all votes or consents; (v) determine when the polls shall close; (vi) determine the result; and (vii) do any other acts that may be proper to conduct the election or vote with fairness to all shareholders.

ARTICLE III
DIRECTORS

Section 1.             POWERS.  Subject to the provisions of the California General Corporation Law and any limitations in the articles of incorporation and these bylaws relating to action required to be approved by the shareholders or by the outstanding shares, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the board of directors.  Without prejudice to these general powers, and subject to the same limitations, the board of directors shall have the power to:

         (i)  Select and remove all officers, agents and employees of the corporation; prescribe any powers and duties for them that are consistent with law, with the articles of incorporation, and with these bylaws; fix their compensation; and require from them security for faithful service.

         (ii)  Change the principal executive office or the principal business office in the State of California from one location to another; cause the corporation to be qualified to do business in any other state, territory, dependency or country and conduct business within or outside the State of California; and designate any place within or outside the State of California for holding any shareholders' meeting or meetings, including annual meetings.

         (iii)  Adopt, make and use a corporate seal; prescribe the forms of certificates of stock; and alter the form of the seal and certificates.

         (iv)  Authorize the issuance of shares of stock of the corporation on any lawful terms, in consideration of money paid, labor done, services actually rendered, debts or securities canceled or tangible or intangible property actually received.

         (v)  Borrow money and incur indebtedness on behalf of the corporation, and cause to be executed and delivered for the corporation's purposes, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations and other evidences of debt and securities.

Section 2.             NUMBER OF DIRECTORS.  The authorized number of directors shall be three (3) until changed by a duly adopted amendment to this bylaw adopted by the vote or written consent of a majority of the outstanding shares entitled to vote.  However, an amendment that would reduce the authorized number of directors to a number fewer than five (5) cannot be adopted if the votes cast against its adoption at a shareholders' meeting or the shares not


 
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consenting to an action by written consent are equal to more than one-sixth (16-2/3 percent) of the outstanding shares entitled to vote.

Section 3.             ELECTION AND TERM OF OFFICE OF DIRECTORS.  Directors shall be elected at each annual meeting of the shareholders to hold office until the next annual meeting. Each director, including a director elected to fill a vacancy, shall hold office until the expiration of the term for which elected and until a successor has been elected and qualified. No reduction of the authorized number of directors shall have the effect of removing any director before that director's term of office expires.

Section 4.             VACANCIES.

(a)            A vacancy in the board of directors shall be deemed to exist: (i) if a director dies, resigns or is removed by the shareholders or an appropriate court, as provided in sections 303 or 304 of the California Corporations Code; (ii) if the board of directors declares vacant the office of a director who has been convicted of a felony or declared of unsound mind by an order of court; (iii) if the authorized number of directors is increased; or (iv) if at any shareholders' meeting at which one or more directors are elected the shareholders fail to elect the full authorized number of directors to be voted for at that meeting.

(b)            Any director may resign effective on giving written notice to the chairman of the board (if any), the president, the secretary or the board of directors, unless the notice specifies a later effective date. If the resignation is effective at a future time, the board may elect a successor to take office when the resignation becomes effective.

(c)            Except for a vacancy caused by the removal of a director, vacancies on the board may be filled by approval of the board or, if the number of directors then in office is less than a quorum, by (i) the unanimous written consent of the directors then in office, (ii) the affirmative vote of a majority of the directors then in office at a meeting held pursuant to notice or waivers of notice complying with section 307 of the Corporations Code, or (iii) a sole remaining director. A vacancy on the board caused by the removal of a director may be filled only by the shareholders, except that a vacancy created when the board declares the office of a director vacant as provided in clause (ii) of Section 4(a) of this Article III may be filled by the board of directors.

(d)            The shareholders may elect a director at any time to fill a vacancy not filled by the board of directors.

(e)            The term of office of a director elected to fill a vacancy shall run until the next annual meeting of the shareholders, and such a director shall hold office until a successor is elected and qualified.

Section 5.             PLACE OF MEETINGS; TELEPHONE MEETINGS.  Regular meetings of the board of directors may be held at any place within or outside the State of California as designated from time to time by the board. In the absence of a designation, regular meetings shall be held at the principal executive office of the corporation. Special meetings of the board shall be held at any place within or outside the State of California designated in the notice of the meeting or, if the notice does not state a place or there is no notice, at the principal executive


 
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office of the corporation.  Any meeting, regular or special, may be held by conference telephone or similar communication equipment, provided that all directors participating can hear one another.

Section 6.             ANNUAL DIRECTORS' MEETING.  Immediately after each annual shareholders' meeting, the board of directors shall hold a regular meeting at the same place, or at any other place that has been designated by the board of directors, to consider matters of organization, election of officers and other business as desired.  Notice of this meeting shall not be required unless some place other than the place of the annual shareholders' meeting has been designated.

Section 7.             OTHER REGULAR MEETINGS.  Other regular meetings of the board of directors shall be held without call at times to be fixed by the board of directors from time to time.  Such regular meetings may be held without notice.

Section 8.             SPECIAL MEETINGS.

(a)      Special meetings of the board of directors may be called for any purpose or purposes at any time by the chairman of the board (if any), the president, any vice president, the secretary or any two directors.

(b)            Special meetings shall be held on four (4) days' notice by mail or forty-eight (48) hours' notice delivered personally or by telephone or telegraph.  Oral notice given personally or by telephone may be transmitted either to the director or to a person at the director's office who can reasonably be expected to communicate it promptly to the director. Written notice, if used, shall be addressed to each director at the address shown on the corporation's records.  The notice need not specify the purpose of the meeting, nor need it specify the place if the meeting is to be held at the principal executive office of the corporation.

Section 9.             QUORUM.  A majority of the authorized number of directors shall constitute a quorum for the transaction of business, except to adjourn as provided in Section 11 of this Article III.  Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the board of directors, subject to the provisions of Corporations Code section 310 (as to approval of contracts or transactions in which a director has a direct or indirect material financial interest); section 311 (as to appointment of committees) and section 317(e) (as to indemnification of directors).  A meeting at which a quorum is initially present may continue to transact business, despite a withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that meeting.

Section 10.           WAIVER OF NOTICE.  Notice of a meeting, although otherwise required, need not be given to any director who (i) either before or after the meeting signs a waiver of notice or a consent to holding the meeting without being given notice; (ii) signs an approval of the minutes of the meeting; or (iii) attends the meeting without protesting the lack of notice before or at the beginning of the meeting.  Waivers of notice or consents need not specify the purpose of the meeting.  All waivers, consents and approvals of the minutes shall be filed with the corporate records or made a part of the minutes of the meeting.


 
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Section 11.           ADJOURNMENT TO ANOTHER TIME OR PLACE.  Whether or not a quorum is present, a majority of the directors present may adjourn any meeting to another time or place.

Section 12.           NOTICE OF ADJOURNED MEETING.  Notice of the time and place of resuming a meeting that has been adjourned need not be given unless the adjournment is for more than 24 hours, in which case notice shall be given, before the time set for resuming the adjourned meeting, to the directors who were not present at the time of the adjournment.  Notice need not be given in any case to directors who were present at the time of adjournment.

Section 13.           ACTION WITHOUT A MEETING.  Any action required or permitted to be taken by the board of directors may be taken without a meeting, if all members of the board of directors individually or collectively consent in writing to that action.  Any action by written consent shall have the same force and effect as a unanimous vote of the board of directors.  All written consents shall be filed with the minutes of the proceedings of the board of directors.

Section 14.           FEES AND COMPENSATION OF DIRECTORS.  Directors and members of committees of the board may be compensated for their services, and shall be reimbursed for expenses, as fixed or determined by resolution of the board of directors.  This section shall not be construed to preclude any director from serving the corporation in any other capacity, as an officer, agent, employee or otherwise, or from receiving compensation for those services.

Section 15.           PROCEDURE.  The board of directors shall keep regular minutes of its proceedings occurring during meetings held pursuant to Sections 6, 7 or 8 of this Article III.  The minutes shall be placed in the minute book of the corporation.

ARTICLE IV
COMMITTEES

Section 1.             COMMITTEES OF THE BOARD.  The board of directors may, by resolution adopted by a majority of the authorized number of directors, designate one or more committees, each consisting of two or more directors.  The board may designate one or more directors as alternate members of any committee, to replace any absent member at a committee meeting.  The appointment of committee members or alternate members requires the vote of a majority of the authorized number of directors.  A committee may be granted any or all of the powers and authority of the board, to the extent provided in the resolution of the board of directors establishing the committee, except with respect to:

         (i)  Approving any action for which the California Corporations Code also requires the approval of the shareholders or of the outstanding shares;

         (ii)  Filling vacancies on the board of directors or any committee of the board;

         (iii)  Fixing directors' compensation for serving on the board or a committee of the board;

         (iv)  Adopting, amending or repealing bylaws;

 
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         (v)  Amending or repealing any resolution of the board of directors that by its express terms is not so amendable or repealable;

         (vi)  Making distributions to shareholders, except at a rate or in a periodic amount or within a price range determined by the board of directors; or

         (vii)  Appointing other committees of the board or their members.

Section 2.             MEETINGS AND ACTION OF COMMITTEES.  Meetings and action of committees shall be governed by, and held and taken in accordance with, bylaw provisions applicable to meetings and actions of the board of directors, with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the board of directors and its members, except that (i) the time of regular meetings of committees may be determined either by resolution of the board of directors or by resolution of the committee; (ii) special meetings of committees may also be called by resolution of the board of directors; and (iii) notice of special meetings of committees shall also be given to all alternative members who shall have the right to attend all meetings of the committee.  The board of directors may adopt rules for the governance of any committee not inconsistent with these bylaws.

ARTICLE V
OFFICERS

Section 1.             OFFICERS.  The officers of the corporation shall be a president, a secretary and a chief financial officer.  The corporation also may have, at the discretion of the board of directors, a chairman of the board, one or more vice presidents, one or more assistant secretaries, one or more assistant treasurers and such other officers as may be appointed in accordance with Section 3 of this Article V.  Any number of offices may be held by the same person.

Section 2.             APPOINTMENT OF OFFICERS.  The officers of the corporation, except for subordinate officers appointed in accordance with Section 3 of this Article V, shall be appointed annually by the board of directors and shall serve at the pleasure of the board of directors.

Section 3.             SUBORDINATE OFFICERS.  The board of directors may appoint, and may empower the president to appoint, other officers as required by the business of the corporation, whose duties shall be as provided in the bylaws, or as determined from time to time by the board of directors or the president.

Section 4.             REMOVAL AND RESIGNATION OF OFFICERS.

(a)            Any officer chosen by the board of directors may be removed at any time, with or without cause or notice, by the board of directors.  Subordinate officers appointed by persons other than the board under Section 3 of this Article V may be removed at any time, with or without cause or notice, by the board of directors or by the officers by whom appointed. Officers may be employed for a specified term under a contract of employment if authorized by the board of directors; such officers may be removed from office at any time under this section, and shall have no claim against the corporation or individual officers or board members because

 
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of the removal except any right to monetary compensation to which the officer may be entitled under the contract of employment.

(b)            Any officer may resign at any time by giving written notice to the corporation.  Resignations shall take effect on the date of receipt of the notice, unless a later time is specified in the notice.  Unless otherwise specified in the notice, acceptance of the resignation is not necessary to make it effective.  Any resignation is without prejudice to the rights, if any, of the corporation to monetary damages under any contract of employment to which the officer is a party.

Section 5.             VACANCIES IN OFFICES.  A vacancy in any office resulting from an officer's death, resignation, removal, disqualification, or from any other cause shall be filled in the manner prescribed in these bylaws for regular election or appointment to that office.

Section 6.             CHAIRMAN OF THE BOARD.  The board of directors may elect a chairman, who shall preside, if present, at board meetings and shall exercise and perform such other powers and duties as may be assigned from time to time by the board of directors.  If there is no president, the chairman of the board shall, in addition, be the chief executive officer of the corporation, and shall have the powers and duties as set forth in Section 7 of this Article V.

Section 7.             PRESIDENT.  Except to the extent that the bylaws or the board of directors assign specific powers and duties to the chairman of the board (if any), the president shall be the corporation's general manager and chief executive officer and, subject to the control of the board of directors, shall have general supervision, direction and control over the corporation's business and its officers.  The managerial powers and duties of the president shall include, but are not limited to, all the general powers and duties of management usually vested in the office of president of a corporation, and the president shall have other powers and duties as prescribed by the board of directors or the bylaws.  The president shall preside at all meetings of the shareholders and, in the absence of the chairman of the board or if there is no chairman of the board, shall also preside at meetings of the board of directors.

Section 8.             VICE PRESIDENTS.  If desired, one or more vice presidents may be chosen by the board of directors in accordance with the provisions for appointing officers set forth in Section 2 of this Article V.  In the absence or disability of the president, the president's duties and responsibilities shall be carried out by the highest ranking available vice president if vice presidents are ranked, or if not, by a vice president designated by the board of directors. When so acting, a vice president shall have all the powers of and be subject to all the restrictions on the president.  Vice presidents of the corporation shall have such other powers and perform such other duties as prescribed from time to time by the board of directors, the bylaws or the president (or chairman of the board if there is no president).

Section 9.             SECRETARY

(a)            The secretary shall keep, or cause to be kept, minutes of all of the shareholders' meetings and of all other board meetings.  If the secretary is unable to be present, the secretary or the presiding officer of the meeting shall designate another person to take the minutes of the meeting.  The secretary shall keep, or cause to be kept, at the principal executive



 
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office or such other place as designated by the board of directors, a book of minutes of all meetings and actions of the shareholders, of the board of directors and of committees of the board.  The minutes of each meeting shall state the time and place the meeting was held; whether it was regular or special; if special, how it was called or authorized; the names of directors present at board or committee meetings; the number of shares present or represented at shareholders' meetings; an accurate account of the proceedings; and when it was adjourned.

(b)            The secretary shall keep, or cause to be kept, at the principal executive office or at the office of the transfer agent or registrar, a record or duplicate record of shareholders.  This record shall show the names of all shareholders and their addresses, the number and classes of shares held by each, the number and date of share certificates issued to each shareholder, and the number and date of cancellation of any certificates surrendered for cancellation.

(c)            The secretary shall give notice, or cause notice to be given, of all shareholders' meetings, board meetings and meetings of committees of the board for which notice is required by statute or by the bylaws.  If the secretary or other person authorized by the secretary to give notice fails to act, notice of any meeting may be given by any other officer of the corporation.

(d)      The secretary shall keep the seal of the corporation, if any, in safe custody. The secretary shall have such other powers and perform other duties as prescribed by the board of directors or by the bylaws.

Section 10.           CHIEF FINANCIAL OFFICER.

(a)            The chief financial officer shall keep or cause to be kept adequate and correct books and records of accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings and shares.  The books of account shall at all reasonable times be open to inspection by any director.

(b)            The chief financial officer shall (i) deposit corporate funds and other valuables in the corporation's name and to its credit with depositaries designated by the board of directors; (ii) make disbursements of corporate funds as authorized by the board; (iii) render a statement of the corporation's financial condition and an account of all transactions conducted as chief financial officer whenever requested by the president or the board of directors; and (iv) have other powers and perform other duties as prescribed by the board of directors or the bylaws.

(c)            Unless the board of directors has elected a separate treasurer, the chief financial officer shall be deemed to be the treasurer for purposes of giving any reports or executing any certificates or other documents.





 
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ARTICLE VI
INDEMNIFICATION OF DIRECTORS, OFFICERS,
EMPLOYEES AND OTHER AGENTS

Section 1.             AGENTS, PROCEEDINGS AND EXPENSES.  For the purposes of this Article, "agent" means any person who is or was a director, officer, employee or other agent of this corporation, or who is or was serving at the request of this corporation as a director, officer, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust or other enterprise, or who was a director, officer, employee or agent of a foreign or domestic corporation that was a predecessor corporation of this corporation or of another enterprise at the request of such predecessor corporation; "proceeding" means any threatened, pending or completed action or proceeding, whether civil, criminal, administrative or investigative; and "expenses" includes, without limitation, attorney fees and any expenses of establishing a right to indemnification under Section 4 or Section 5(iv) of this Article VI.

Section 2.             ACTIONS OTHER THAN BY THE CORPORATION. This corporation shall have the power to indemnify any person who was or is a party, or is threatened to be made a party, to any proceeding (other than an action by or in the right of this corporation to procure a judgment in its favor) by reason of the fact that such person is or was an agent of this corporation, against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with such proceeding if that person acted in good faith and in a manner that the person reasonably believed to be in the best interests of this corporation and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of that person was unlawful.  The termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo   contendere   or its equivalent shall not, of itself, create a presumption that the person did not act in good faith and in a manner that the person reasonably believed to be in the best interests of this corporation or that the person had reasonable cause to believe that the person's conduct was not unlawful.

Section 3.             ACTIONS BY OR IN THE RIGHT OF THE CORPORATION. This corporation shall have the power to indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action by or in the right of this corporation to procure a judgment in its favor by reason of the fact that such person is or was an agent of this corporation, against expenses actually and reasonably incurred by such person in connection with the defense or settlement of that action, if such person acted in good faith, in a manner such person believed to be in the best interests of this corporation and its shareholders. No indemnification shall be made under this Section 3 for the following:

             (i)  With respect to any claim, issue or matter on which such person has been adjudged to be liable to this corporation in the performance of such person's duty to the corporation and its shareholders, unless and only to the extent that the court in which such proceeding is or was pending shall determine on application that, in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for expenses and then only to the extent that the court shall determine;

     (ii)  Amounts paid in settling or otherwise disposing of a pending action without court approval; or


 
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         (iii) Expenses incurred in defending a pending action that is settled or otherwise disposed of without court approval.

Section 4.             SUCCESSFUL DEFENSE BY AGENT.  To the extent that an agent of this corporation has been successful on the merits in defense of any proceeding referred to in Section 2 or 3 of this Article VI, or in defense of any claim, issue or matter therein, the agent shall be indemnified against expenses actually and reasonably incurred by the agent in connection therewith.

Section 5.             REQUIRED APPROVAL.  Except as provided in Section 4 of this Article VI, any indemnification under this Section shall be made by the corporation only if authorized in the specific case, after a determination that indemnification of the agent is proper in the circumstances because the agent has met the applicable standard of conduct set forth in Section 2 or 3 by one of the following:

         (i)  A majority vote of a quorum consisting of directors who are not parties to such proceeding;

         (ii)  Independent legal counsel in a written opinion if a quorum of directors who are not parties to such a proceeding is not available;

         (iii) (A) The affirmative vote of a majority of shares of this corporation entitled to vote represented at a duly held meeting at which a quorum is present; or

  (B) The written consent of holders of a majority of the outstanding shares entitled to vote (for purposes of this Section 5(iii), the shares owned by the person to be indemnified shall not be considered outstanding or entitled to vote thereon); or

         (iv)  The court in which the proceeding is or was pending, on application made by this corporation or the agent or the attorney or other person rendering services in connection with the defense, whether or not such application by the agent, attorney or other person is opposed by this corporation.

Section 6.             ADVANCE OF EXPENSES.  Expenses incurred in defending any proceeding may be advanced by the corporation before the final disposition of such proceeding on receipt of an undertaking by or on behalf of the agent to repay such amounts if it shall be determined ultimately that the agent is not entitled to be indemnified as authorized in this Article VI.

Section 7.             OTHER CONTRACTUAL RIGHTS.  The indemnification provided by this Article VI shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any bylaw, agreement, vote of shareholders or disinterested directors, or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office, to the extent such additional rights to indemnification are authorized in the articles of the corporation.  Nothing in this section shall affect any right to indemnification to which persons other than such directors and officers may be entitled by contract or otherwise.


 
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Section 8.             LIMITATIONS.  No indemnification or advance shall be made under this Article VI, except as provided in Section 4 or Section 5(iv), in any circumstance if it appears:

         (i) That it would be inconsistent with a provision of the articles, bylaws, a resolution of the shareholders, or an agreement in effect at the time of the accrual of the alleged cause of action asserted in the proceeding in which expenses were incurred or other amounts were paid, which prohibits or otherwise limits indemnification; or

         (ii) That it would be inconsistent with any condition expressly imposed by a court in approving settlement.

Section 9.             INSURANCE.  This corporation may purchase and maintain insurance on behalf of any agent of the corporation insuring against any liability asserted against or incurred by the agent in that capacity or arising out of the agent's status as such, whether or not this corporation would have the power to indemnify the agent against that liability under the provisions of this Article VI.  Notwithstanding the foregoing, if this corporation owns all or a portion of the shares of the company issuing the policy of insurance, the insuring company and/or the policy shall meet the conditions set forth in section 317(i) of the Corporations Code.

Section 10.           FIDUCIARIES OF CORPORATE EMPLOYEE BENEFIT PLAN.  This Article VI does not apply to any proceeding against any trustee, investment manager or other fiduciary of an employee benefit plan in that person's capacity as such, even though that person may also be an agent of the corporation.  The corporation shall have the power to indemnify, and to purchase and maintain insurance on behalf of any such trustee, investment manager or other fiduciary of any benefit plan for any or all of the directors, officers and employees of the corporation or any of its subsidiary or affiliated corporations.

Section 11.           SURVIVAL OF RIGHTS.  The rights provided by this Article VI shall continue for a person who has ceased to be an agent and shall inure to the benefit of the heirs, executors and administrators of such person.

Section 12.           EFFECT OF AMENDMENT.  Any amendment, repeal or modification of this Article VI shall not adversely affect an agent's right or protection existing at the time of such amendment, repeal or modification.

Section 13.           SETTLEMENT OF CLAIMS.  The corporation shall not be liable to indemnify any agent under this Article VI for (a) any amounts paid in settlement of any action or claim effected without the corporation's written consent, which consent shall not be unreasonably withheld, or (b) any judicial award, if the corporation was not given a reasonable and timely opportunity to participate, at its expense, in the defense of such action.

Section 14.           SUBROGATION.  In the event of payment under this Article VI, the corporation shall be subrogated to the extent of such payment to all of the rights of recovery of the agent, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents as may be necessary to enable the corporation effectively to bring suit to enforce such rights.



 
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Section 15.           NO DUPLICATION OF PAYMENTS.  The corporation shall not be liable under this Article VI to make any payment in connection with any claim made against the agent to the extent the agent has otherwise actually received payment, whether under a policy of insurance, agreement, vote or otherwise, of the amounts otherwise indemnifiable under this Article.

ARTICLE VII
RECORDS AND REPORTS

Section 1.             MAINTENANCE OF SHAREHOLDER RECORD AND INSPECTION BY SHAREHOLDERS.

(a)            The corporation shall keep at its principal executive office or at the office of its transfer agent or registrar, as determined by resolution of the board of directors, a record of the names and addresses of all shareholders and the number and class of shares held by each shareholder.

(b)            A shareholder or shareholders holding at least five percent (5%) in the aggregate of the outstanding voting shares of the corporation have the right to do either or both of the following:

         (i)  Inspect and copy the record of shareholders' names and addresses and shareholdings during usual business hours, on five days' prior written demand on the corporation, or

         (ii)  Obtain from the corporation's transfer agent, on written demand and tender of the transfer agent's usual charges for this service, a list of the names and addresses of shareholders who are entitled to vote for the election of directors, and their shareholdings, as of the most recent record date for which a list has been compiled or as of a specified date later than the date of demand.  This list shall be made available within five days after (A) the date of demand or (B) the specified later date as of which the list is to be compiled.  The record of shareholders shall also be open to inspection on the written demand of any shareholder or holder of a voting trust certificate, at any time during usual business hours, for a purpose reasonably related to the holder's interests as a shareholder or holder of a voting trust certificate.  Any inspection and copying under this section may be made in person or by an agent or attorney of the shareholder or holder of a voting trust certificate making the demand.

Section 2.             MAINTENANCE AND INSPECTION OF BYLAWS.  The corporation shall keep at its principal executive office, or if its principal executive office is not in the State of California, at its principal business office in this state, the original or a copy of the bylaws as amended to date, which shall be open to inspection by the shareholders at all reasonable times during office hours.  If the principal executive office of the corporation is outside the State of California and the corporation has no principal business office in this state, the secretary shall, on the written request of any shareholder, furnish to that shareholder a copy of the bylaws as amended to date.



 
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Section 3.             MAINTENANCE AND INSPECTION OF MINUTES AND ACCOUNTING RECORDS.  The minutes of proceedings of the shareholders, board of directors and committees of the board, and the accounting books and records shall be kept at the principal executive office of the corporation, or at such other place or places as designated by the board of directors.  The minutes shall be kept in written form, and the accounting books and records shall be kept either in written form or in a form capable of being converted into written form.  The minutes and accounting books and records shall be open to inspection on the written demand of any shareholder or holder of a voting trust certificate at any reasonable time during usual business hours, for a purpose reasonably related to the holder's interests as a shareholder or holder of a voting trust certificate.  The inspection may be made in person or by an agent or attorney and shall include the right to copy and make extracts.  These rights of inspection shall extend to the records of each subsidiary of the corporation.

Section 4.             INSPECTION BY DIRECTORS.  Every director shall have the absolute right at any reasonable time to inspect all books, records and documents of every kind and the physical properties of the corporation and each of its subsidiary corporations.  This inspection by a director may be made in person or by an agent or attorney and the right of inspection includes the right to copy and make extracts of documents.

Section 5.             ANNUAL REPORT TO SHAREHOLDERS. Inasmuch as, and for as long as, there are fewer than one hundred (100) shareholders, the requirement of an annual report to shareholders referred to in section 1501 of the California Corporations Code is expressly waived. However, nothing in this provision shall be interpreted as prohibiting the board of directors from issuing annual or other periodic reports to the shareholders, as the board considers appropriate.

Section 6.             FINANCIAL STATEMENTS.

(a)            The corporation shall keep a copy of each annual financial statement, quarterly or other periodic income statement and accompanying balance sheets prepared by the corporation on file in the corporation's principal executive office for twelve (12) months; these documents shall be exhibited at all reasonable times, or copies provided, to any shareholder on demand.

(b)            If no annual report for the last fiscal year has been sent to shareholders, on written request of any shareholder made more than one hundred and twenty (120) days after the close of the fiscal year the corporation shall deliver or mail to the shareholder, within thirty (30) days after receipt of the request, a balance sheet as of the end of that fiscal year and an income statement and statement of changes in financial position for that fiscal year.

(c)            A shareholder or shareholders holding five percent (5%) or more of the outstanding shares of any class of stock of the corporation may request in writing an income statement for the most recent three- (3-) month, six- (6-) month or nine- (9-) month period (ending more than thirty (30) days before the date of the request) of the current fiscal year, and a balance sheet of the corporation as of the end of that period.  If such documents are not already prepared, the chief financial officer shall cause them to be prepared and shall deliver the documents personally or mail them to the requesting shareholders within thirty (30) days after receipt of the request.  A balance sheet, income statement and statement of changes in financial

 
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position for the last fiscal year shall also be included, unless the corporation has sent the shareholders an annual report for the last fiscal year.

(d)            Quarterly income statements and balance sheets referred to in this section shall be accompanied by the report, if any, of independent accountants engaged by the corporation or the certificate of an authorized corporate officer stating that the financial statements were prepared without audit from the corporation's books and records.

Section 7.             ANNUAL STATEMENT OF GENERAL INFORMATION.

(a)            Every year, during the calendar month in which the original articles of incorporation were filed with the California Secretary of State, or during the preceding five (5) calendar months, the corporation shall file a statement with the Secretary of State on the prescribed form, setting forth the authorized number of directors; the names and complete business or residence addresses of all incumbent directors; the names and complete business or residence addresses of the chief executive officer, the secretary and the chief financial officer; the street address of the corporation's principal executive office or principal business office in this state; a statement of the general type of business constituting the principal business activity of the corporation; and a designation of the agent of the corporation for the purpose of service of process, all in compliance with section 1502 of the Corporations Code of California.

(b)            Notwithstanding the provisions of paragraph (a) of this section, if there has been no change in the information in the corporation's last annual statement on file in the Secretary of State's office, the corporation may, in lieu of filing the annual statement described in paragraph (a) of this section, advise the Secretary of State, on the appropriate form, that no changes in the required information have occurred during the applicable period.

ARTICLE VIII
GENERAL CORPORATE MATTERS

Section 1.             RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING.

(a)            For purposes of determining the shareholders entitled to receive payment of dividends or other distributions or allotment of rights, or entitled to exercise any rights in respect of any other lawful action (other than voting at and receiving notice of shareholders' meetings and giving written consent of the shareholders without a meeting), the board of directors may fix in advance a record date which shall be not more than sixty (60) nor less than ten (10) days before the date of the dividend payment, distribution, allotment or other action.  If a record date is so fixed, only shareholders of record at the close of business on that date shall be entitled to receive the dividend, distribution or allotment of rights, or to exercise the other rights, as the case may be, notwithstanding any transfer of shares on the corporation's books after the record date, except as otherwise provided by statute.

(b)            If the board of directors does not so fix a record date in advance, the record date shall be at the close of business on the later of (i) the day on which the board of directors adopts the applicable resolution or (ii) the sixtieth (60th) day before the date of the dividend payment, distribution, allotment of rights or other action.


 
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Section 2.             AUTHORIZED SIGNATORIES FOR CHECKS.  All checks, drafts, other orders for payment of money, notes or other evidences of indebtedness issued in the name of or payable to the corporation shall be signed or endorsed by such person or persons and in such manner authorized from time to time by resolution of the board of directors.

Section 3.             EXECUTING CORPORATE CONTRACTS AND INSTRUMENTS.  Except as otherwise provided in the articles or in these bylaws, the board of directors by resolution may authorize any officer, officers, agent or agents to enter into any contract or to execute any instrument in the name of and on behalf of the corporation.  This authority may be general or it may be confined to one or more specific matters.  No officer, agent, employee or other person purporting to act on behalf of the corporation shall have any power or authority to bind the corporation in any way, to pledge the corporation's credit, or to render the corporation liable for any purpose or in any amount, unless that person was acting with authority duly granted by the board of directors as provided in these bylaws, or unless an unauthorized act was later ratified by the corporation.

Section 4.             CERTIFICATES FOR SHARES.  A certificate or certificates for shares of the capital stock of the corporation shall be issued to each shareholder when any of the shares are fully paid.  All certificates shall certify the number of shares and the class or series of shares represented by the certificate.  All certificates shall be signed in the name of the corporation by (i) either the chairman of the board or the vice chairman of the board (if any), the president or any vice president, and (ii) either the chief financial officer, any assistant treasurer, the secretary or any assistant secretary.  Any of the signatures on the certificate may be facsimile.  If any officer, transfer, agent or registrar who has signed, or whose facsimile signature has been placed on, a certificate shall have ceased to be that officer, transfer agent or registrar before that certificate is issued, the certificate may be issued by the corporation with the same effect as if that person were an officer, transfer agent or registrar at the date of issue.

Section 5.             LOST CERTIFICATES.  Except as provided in this Section 5, no new certificate for shares shall be issued to replace any old certificate unless the old certificate is surrendered to the corporation for cancellation at the same time.  If share certificates or certificates for any other security have been lost, stolen or destroyed, the board of directors may authorize the issuance of replacement certificates on terms and conditions as required by the board, which may include a requirement that the owner give the corporation a bond (or other adequate security) sufficient to indemnify the corporation against any claim that may be made against it (including any expense or liability) on account of the alleged loss, theft or destruction of the old certificate or the issuance of the replacement certificate.

Section 6.             SHARES OF OTHER CORPORATIONS: HOW VOTED.  Shares of other corporations standing in the name of this corporation shall be voted by one of the following persons, listed in order of preference: (i) chairman of the board or person designated by the chairman of the board (if any); (ii) president or person designated by the president; (iii) first vice president or person designated by the first vice president; (iv) other person designated by the board of directors.  The authority to vote shares granted by this section includes the authority to execute a proxy in the name of the corporation for purposes of voting the shares.




 
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Section 7.             REIMBURSEMENT OF CORPORATION IF PAYMENT NOT TAX DEDUCTIBLE.  If all or part of the compensation, including expenses, paid by the corporation to a director, officer, employee or agent is finally determined not to be allowable to the corporation as a federal or state income tax deduction, the director, officer, employee or agent to whom the payment was made shall repay to the corporation the amount disallowed.  The board of directors shall enforce repayment of each such amount disallowed by the taxing authorities.

Section 8.             CONSTRUCTION AND DEFINITIONS.  Unless the context requires otherwise, the general provisions, rules of construction and definitions in sections 100 through 195 of the California Corporations Code shall govern the construction of these bylaws.  Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and the term "person" includes both a corporation and a natural person.

ARTICLE IX
AMENDMENTS

Section 1.             AMENDMENT BY BOARD OF DIRECTORS OR SHAREHOLDERS. Except as otherwise required by law or by the articles of incorporation, these bylaws may be amended or repealed, and new bylaws may be adopted, by the board of directors or by the holders of a majority of the outstanding shares entitled to vote.

[END]












 
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Exhibit 4.1


Number
 
Shares
 
TOUCHPOINT METRICS, INC.
 
 
INCORPORATED UNDER THE LAWS OF THE STATE OF CALIFORNIA
 
 
30,000,000 SHARES COMMON STOCK AUTHORIZED,
 
 
NO PAR VALUE
 
     
   
CUSIP _______
   
SEE REVERSE
   
FOR
This
 
CERTAIN
certifies
 
DEFINITIONS
that
   
is the owner of
   
     
     
 
FULLY PAID AND NON-ASSESSABLE
 
 
SHARES OF COMMON STOCK OF
 
     
     
 
TOUCHPOINT METRICS, INC.
 
 
transferable on the books of the corporation in person or by duly
 
 
authorized attorney upon surrender of this certificate properly
 
 
endorsed.  This certificate and the shares represented hereby
 
 
are subject to the laws of the State of Nevada, and to the
 
 
Articles of Incorporation and Bylaws of the Corporation,
 
 
as now or hereafter amended.  This certificate is not valid
 
 
unless countersigned by the Transfer Agent.  WITNESS
 
 
the facsimile seal of the Corporation and the signature
 
 
of its duly authorized officers
 
     
     
     
     
     
     
     
     
     
PRESIDENT
[SEAL]
SECRETARY



 
 

 

The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations.

TEN COM
as tenants in common
UNIF GIFT MIN ACT
 
Custodian
 
TEN ENT
as tenants by the entireties
 
(Cust)
 
(Minor)
JT TEN
as joint tenants with the right of
 
Act
 
 
survivorship and not as tenants
   
(State)
 
in common
     

Additional abbreviations may also be used though not in the above list.

For value received ,
 
  hereby sell, assign and transfer unto
 
PLEASE INSERT SOCIAL SECURITY OR OTHER