As
filed with the Securities and Exchange Commission on February 1,
2008
Registration
No. [Number]
U.
S. SECURITIES AND EXCHANGE COMMISSION
Washington,
D. C. 20549
FORM
SB-2
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
TITLE
STARTS ONLINE, INC.
(Name
of
Small Business Issuer in its Charter)
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Nevada
(State
or Jurisdiction of
Incorporation
or Organization)
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6541
(Primary
Standard Industrial
Classification
Code Number)
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26-1394771
(I.R.S.
Employer
Identification
No.)
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7007
College Boulevard
Suite
270
Overland
Park, KS 66211
(Address
and Telephone Number of Principal Executive Offices)
Mark
DeFoor
President
and Chief Executive Officer
Title
Starts Online, Inc.
7007
College Boulevard
Suite
270
Overland
Park, KS 66211
913.832.0072
(Name,
Address and Telephone Number of Agent for Service)
Copies
of all communications to:
Bartly
J.
Loethen
Synergy
Law Group, LLC
730
West
Randolph Street, 6
th
Floor
Chicago,
IL 60661
312.454.0015
Approximate
Date of Commencement of Proposed Sale to the Public
:
As soon
as practicable after the effective date of this Registration Statement.
If
any of
the securities being registered on this form are to be offered on a delayed
or
continuous basis pursuant to Rule 415 under the Securities Act, check the
following box.
o
If
this
form is filed to register additional securities for an offering pursuant to
Rule
462(b) under 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.
o
If
this
form is a post-effective amendment filed pursuant to Rule 462(c) under 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.
o
If
this
form is a post-effective amendment filed pursuant to Rule 462(d) under 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.
o
If
delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box.
o
CALCULATION
OF REGISTRATION FEE
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Title
of Each Class of
Securities to Be Registered
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Amount
to Be
Registered
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Proposed
Maximum
Offering Price per Share
(1)
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Proposed Maximum
Aggregate Offering Price
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Amount
of
Registration
Fee
(2)
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Common
Stock
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900,000
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$
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0.25
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$
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225,000
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$
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8.84
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(1)
(2)
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This
price was arbitrarily determined by the Company.
Estimated
solely for the purpose of calculating the registration fee in accordance
with Rule 457 under the Securities
Act.
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The
registrant hereby amends this registration statement on such date or 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 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
The
information in this prospectus is not complete and may be changed. We may not
sell these securities until the registration statement filed with the Securities
and Exchange Commission is effective. This prospectus is not an offer to sell
these securities and it is not soliciting an offer to buy these securities
in
any jurisdiction where the offer or sale is not permitted.
SUBJECT
TO COMPLETION, dated February 1, 2008
PRELIMINARY
PROSPECTUS
TITLE
STARTS ONLINE, INC.
900,000
SHARES OF COMMON STOCK
This
prospectus relates to the offering of up to 900,000 shares of common stock
of
Title Starts Online, Inc., (the “Company”), in a self-underwritten direct public
offering, without any participation by underwriters or broker-dealers. The
shares will be sold through the efforts of our officers and directors. The
offering price is $0.25 per share (the “Offering Price”). The offering period
will begin on the date this registration statement is declared effective by
the
Securities and Exchange Commission (the “SEC”) and continue, unless extended or
terminated, until 5:00 P.M. Local Time, on June 30, 2008 (the “Offering
Period”). In the event that 200,000 shares are not sold within the Offering
Period, all money received by us will be promptly returned without interest
or
deduction of any kind. Subscription funds will be held until closing in a
separate account at an insured institution. The minimum purchase requirement
for
each investor in this offering is $1,250 or 5,000 shares. Prior to this
offering, there has been no public market for the common stock.
THE
PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH
DEGREE OF RISK. SEE “RISK FACTORS” BEGINNING ON PAGE 7.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of the securities or passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
You
should rely only on the information contained in this Prospectus and the
information we have referred you to. We have not authorized any person to
provide you with any information about this Offering, the Company, or the shares
of our Common Stock offered hereby that is different from the information
included in this Prospectus. If anyone provides you with different information,
you should not rely on it.
The
date
of this prospectus is February 1, 2008
TABLE
OF CONTENTS
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Prospectus
Summary
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5
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Risk
Factors
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7
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Forward
Looking Statements
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12
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Use
of Proceeds
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12
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Determination
of Offering Price
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12
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Plan
of Distribution
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13
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Legal
Proceedings
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14
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Directors
and Officers
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14
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Beneficial
Ownership
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15
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Description
of Securities
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15
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Interests
of Named Experts and Counsel
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16
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Disclosure
of Commission Position on Indemnification
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17
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Description
of Business
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17
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Management's
Discussion and Analysis or Plan of Operation
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20
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Description
of Property
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21
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Certain
Relationships and Related Transactions
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21
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Market
for Common Equity and Related Stockholder Matters
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22
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Executive
Compensation
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23
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Reports
to Security Holders
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23
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Prospectus
Summary
This
summary highlights information contained elsewhere in this Prospectus and may
not contain all of the information you should consider before investing in
the
shares. You are urged to read this Prospectus in its entirety, including the
information under “Risk Factors. Unless the context indicates otherwise, the
words “we,” “us” “our” or the “Company” refer to Title Starts Online, Inc.
Overview
This
Prospectus relates to the offering of shares by Title Starts Online, Inc.,
a
Nevada corporation. The Company proposes to raise a minimum amount of $50,000
(the “Minimum Offering Amount”) and an maximum amount of $225,000 (the “Maximum
Offering Amount”) through the sale of a minimum of 200,000 shares and a maximum
of 900,000 shares of Company common stock with a par value $.001 (each a “Share”
and collectively the “Shares”) at the price of $0.25 per Share (the “Offering”)
as more fully described in “
Plan
of Distribution
.”
The
Company
Title
Starts Online, Inc. was incorporated under the laws of the state of Nevada
on
November 13, 2007. The Company's principal offices are located at 7007 College
Boulevard, Suite 270, Overland Park, KS 66211. Our telephone number there is
913.832.0072. Our fax number is 913.747.3001. We are also in the process of
creating a website which will be www.titlestarts.com. Information included
on
our website is not a part of this Prospectus.
The
Company is in its development stage with no revenues to date. The majority
of
the activities to date have revolved around defining requirements from
residential title abstractors in the Kansas City area to determine the value
proposition of a consolidated title start website business. In the title
insurance business, abstractors are required to research any and all
encumbrances on specific properties which are in the process of being refinanced
or sold. This search is completed by merging data from a variety of sources,
some online and some in log books physically maintained by local governmental
entities and private production plants. The research results are then compiled
into a commitment of title insurance which is submitted to the entity requesting
the information. The Company intends to develop a central repository for title
starts and plans to deliver two categories of products - title starts and a
title search template - along with a tips and tools area via the Company’s
website. The website will have the functionality to manage new title search
findings based on unique user identification to facilitate order processing,
to
offer remote storage and minimize redundant data entry. Users will also have
the
ability to shop for existing title starts and utilize innovative search
techniques to expedite their search.
Mark
DeFoor, the primary founder of the Company, is also a Director, President and
Chief Executive Officer. Mr. DeFoor earned a Bachelor’s of Business
Administration (1993) and a Master’s of Business Administration (1995) from the
University of Missouri at Kansas City. Mr. DeFoor’s previous experience includes
the development of the National Association of Insurance Commissions Central
Repository of Producer Agents as well as the operation, purchase and sale of
several title insurance companies. The Company’s registration of the Shares is
intended to provide title abstractors an incentive to become a part of the
Company through acquiring shares in a company for which there is a potential
market to sell the Shares. While the registration of its Shares is for the
purpose of creating a public market, there is no guarantee that a public market
will ever exist for the Company’s Shares or that, if developed, can be
sustained.
The
Offering
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Securities
Being Offered
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The
Company is offering for sale a minimum of 200,000 and a maximum of
900,000
shares of its common stock.
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Initial
Offering Price
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The
Offering Price is $0.25 per Share. The Offering Price was determined
arbitrarily by the Company.
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Terms
of the Offering
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The
Shares will be sold through the efforts of our officers and directors
beginning on the date this registration statement is declared effective
by
the SEC.
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Termination
of the Offering
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The
Offering will conclude on June 30, 2008 unless extended for an additional
30 days. We may, in our sole discretion, terminate the Offering prior
to
the end of the Offering Period for any reason
whatsoever.
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Risk
Factors
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The
securities offered hereby involve a high degree of risk and should
not be
purchased by investors who cannot afford the loss of their entire
investment. See ‘‘Risk Factors’’ beginning on page 7.
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Common
Stock Issued And Outstanding Before Offering
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3,100,000
shares of our common stock are issued and outstanding as of the date
of
this Prospectus.
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Common
Stock Issued And Outstanding After Offering
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Upon
completion of the Offering, we will have 4,000,000 shares of common
stock
issued and outstanding if we sell all of the Shares offered in this
Offering.
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Use
of Proceeds
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The
Company will use the net proceeds from the Offering substantially
for
general corporate purposes primarily in the areas of marketing,
advertising, promotion, acquiring relationships and general working
capital.
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Summary
Financial Information
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Balance
Sheet Data
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12/31/07
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Cash
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$
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25,000
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Total
Assets
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$
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25,000
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Liabilities
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$
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20,000
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Total
Stockholders’ Equity
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$
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5,000
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Statement
of Loss and Deficit
From
Incorporation on November 13, 2007
To
December 31, 2007
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Revenue
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$
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0
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Net
Loss and Deficit
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$
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572
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Risk
Factors
You
should carefully consider the risks and uncertainties described below and the
other information in this Prospectus before deciding whether to invest in the
Shares we are offering. The risks described below are not the only ones we
will
face. Additional risks and uncertainties not presently known to us or that
we
currently deem immaterial may also impair our financial performance and business
operations. If any of these risks actually occur, our business and financial
condition or results of operation may be materially adversely affected, the
trading price of our common stock could decline and you may lose all or part
of
your investment. We make various statements in this section which constitute
“forward-looking” statements under Section 27A of the Securities
Act.
Risks
Related to Our Company
Purchasers
may have difficulty evaluating the Company’s business because of the absence of
any operating history.
The
Company was incorporated on November 13, 2007, and to date, we have been
involved primarily in organizational activities. The Company has no revenue
history, no operating history and has not delivered any products or
product-related services to customers. Potential investors should be aware
of
the difficulties normally encountered by development stage companies and the
high rate of failure of such enterprises. There is no guarantee that we will
commence business operations or that our business operations will be profitable.
For this reason, investors are encouraged to review the Company’s financial
information and prospects, to have discussions with representatives of the
Company and to engage professional advisors to evaluate an investment in the
Company.
If
we do not obtain additional financing, our business will fail.
Our
business plan calls for ongoing expenses in connection with the development
of
the business of the Company. We have not generated any revenue from operations
to date. We may not be able to implement our business plan without obtaining
additional financing. If this financing is not available or obtainable,
investors may lose a substantial portion or all of their investment. If adequate
funds are not available to satisfy our immediate or intermediate capital
requirements, we will limit our operations significantly. There can be no
assurance that such additional financing will be available to us on acceptable
terms, or at all. The most likely source of future funds presently available
to
us is through the sale of additional shares of common stock, which could result
in dilution to existing shareholders.
The
Company has a lack of profit and uncertain profit outlook
.
The
Company has no history in operating its business on which to evaluate the
Company and its prospects. If customers do not adopt the Company’s products and
services due to the Company’s operating history, the Company’s profits will be
significantly and negatively affected. The Company's prospects must be
considered in light of the risks, uncertainties, expenses and difficulties
frequently encountered in this context.
If
the Company does not generate sales in a timely manner, the Company may run
out
of cash.
The
Company’s business plan is dependent on sales and provides that such sales will
commence in the third quarter of 2008. The Company will hire staff and incur
recurring expenses and plans to increase staffing and expense levels in
anticipation of revenues. In the event that revenues do not occur in a timely
manner, the Company will need to dramatically reduce costs and may run out
of
cash.
If
the market chooses to buy competitive products and services, the Company will
not be financially viable.
Although
the Company believes that its products will be of commercial usefulness, there
is no verification by the marketplace that the Company’s products and services
will be purchased by customers. If the market chooses to buy competitive
products and services, it may be more difficult for the Company to be profitable
and the Company's business would be substantially harmed. The Company believes
that the purchase of its products is also highly dependent on perceptions of
risk, financial viability of the Company, ability to provide related services
and support, and other factors including brand perception, references, and
commercial linkage between these sales and other products and services. If
the
Company is not able to manage these perceptions, it may not be able to meet
its
forecasts and projections.
The
Company’s competitors are larger and have greater resources, giving them the
ability to utilize commercial practices that prevent customers from buying
the
Company’s products and services.
The
Company's competitors are larger and have resources greater than those of the
Company; therefore, there can be no assurance that potential customers will
buy
from the Company, as opposed to the Company's competitors. If potential
customers do not buy from the Company, the Company's business would be
significantly harmed. Competitors may also have greater leverage and stronger
relationships with their customers, as well as the ability to offer lower
prices, which could affect the Company’s ability to procure customers or cause
customers to change vendors.
The
Company’s results may fluctuate significantly
.
The
Company’s revenue projections are based largely on projections.
The
Company is reliant on senior management.
The
Company believes that its success is significantly dependent upon the continued
participation and collective skills of the executive officers. In addition,
certain knowledge and skills possessed by executive officers and key Company
employees may not be able to be replaced quickly or at all. Members of senior
management are under no obligations to remain with the Company. If several
senior management members do not remain with the Company, the Company's business
would be significantly harmed.
The
Company plans significant expenses for research and
development.
The
Company’s market is characterized by rapidly changing technologies and evolving
industry standards. The Company plans to incur significant research and
development expenses intended to adapt and expand to this evolving industry
and
achieve competitive advantage. If the Company does not generate sufficient
profit, the business could be harmed. If it is necessary to raise additional
funds to pay for further research and development through the issuance of equity
securities, the current stockholders would be diluted and their interests might
become subordinate to the rights and preferences of the holders of new equity
securities.
The
Company has an uncertain ability to meet future cash
needs.
It
is
likely that the Company will need additional financing in the future, either
as
a result of adverse developments, or as a result of rapid growth or volatility
in business levels or business conditions. If such financing is unavailable,
it
could have a serious adverse effect on the Company’s ability to
survive.
The
Company must develop delivery and support infrastructure to be viable in the
market.
The
Company is in an early stage of development, and if the Company does not develop
the necessary infrastructure to support its customers, its business could suffer
or fail.
The
Company’s business plan is highly sensitive to many factors, and thus Company
performance is not easily predictable.
The
title
insurance industry is sensitive to many factors, including competition with
larger companies, market demand, research and development expenditures, and
the
ability to stay competitive in the industry. Given these and other market
factors, the Company cannot predict with certainty its short- and long-term
performance and profitability. In addition, even if the Company achieves
profitability, given these many factors affecting the Company’s business, the
Company may not be able to maintain profitability in the future.
If
the Company does not manage growth effectively, the Company’s business could be
harmed.
Resource
infrastructure and geographic expansion will be required to realize the
Company’s growth strategy. Operations growth will place significant demands on
the management and other resources of the Company, which demands are likely
to
continue. To manage future growth, the Company will need to continue to attract,
hire and retain highly skilled and motivated officers, managers and employees
for:
1.
Sales,
marketing, business development and customer service;
2.
Technical
support, software development and integration;
3.
Operational
and financial management; and
4.
Training,
integrating and managing the growing employee base.
The
Company may not be successful in selecting, managing or expanding its operations
and markets or maintaining adequate management, financial and operating systems
and controls. The Company may not be able to achieve desired geographic
expansion without additional investment.
Experience
of management may not be adequate to achieve projections.
While
Company’s officers have history and experience in the title industry, there is
no guarantee that such experience will ensure that they are able to reach the
Company’s projections.
Any
additional financing through sales of our common stock will result in dilution
to existing shareholders.
We
will
require additional capital in order to achieve our business plan. Our most
likely source of additional capital will be through the sale of additional
shares of common stock. The sale of additional shares of common stock will
result in dilution to our existing stockholders and will negatively affect
the
value of an investor’s Shares.
Risks
Related To the Title Insurance Industry
The
title insurance industry is intensely competitive, and if the Company fails
to
successfully compete in this industry, its market share and business will be
harmed.
The
markets for the products and services offered by the Company are intensely
competitive and characterized by rapidly changing technology, evolving
regulatory requirements and changing consumer demands. Large companies may
at
any time attain positions of competitive advantage that the Company will find
difficult to counteract.
There
can
be no assurance that the Company will be able to successfully compete with
any
current or potential providers of products and services competitive with those
of the Company.
The
Company’s success depends, in part, on its ability to protect, develop and
secure proprietary information and intellectual property.
Although
the Company intends to pursue protection of its intellectual property, there
is
no assurance that such protection will be available or sufficient to preclude
competition. Competitors may develop similar or superior products, software,
business models and intellectual property. This could have serious impact on
the
ability of the Company to succeed. If the Company fails to protect, develop
and
secure proprietary information and intellectual property, the value of the
Company could be impaired.
If
the Company is unable to adapt to the rapid technological change in its
industry, the Company will not remain competitive and its business will
suffer.
The
Company’s market is characterized by rapidly changing technologies and evolving
industry standards. The recent growth of the Internet and intense competition
in
the industry exacerbate these market characteristics. The Company’s future
success will depend on the Company’s ability to adapt to rapidly changing
technologies by continually improving the features and reliability of its
products. The Company may experience difficulties that could delay or prevent
the successful introduction or marketing of new products and services. In
addition, new enhancements must achieve significant market acceptance. The
Company could also incur substantial costs if the Company needs to modify its
service or infrastructures or adapt its technology to respond to these changes.
The
title insurance industry is subject to natural fluctuation.
The
title
business is seasonal for purchase transactions and depends largely on interest
rates in connection with refinance transactions. It is likely that the Company
will be subject to these same types of performance fluctuations.
Risks
Related To Regulations
The
Company's failure to comply with existing regulations and future regulations
could subject the Company to penalties.
The
Company will provide products and services in multiple jurisdictions. Any
failure of the Company to comply with existing regulations or regulations
adopted in the future in those jurisdictions could subject the Company to
penalties. Compliance matters could also increase the Company’s costs and affect
the Company’s ability to meet its projections. The Company will assess
regulations and requirements of certain jurisdictions for its products and
may
need to retain outside experts in order to ensure compliance. While the Company
does not believe that its current structure will require it to obtain insurance
licenses or other types of licenses, it is possible that state insurance
commissions would take an alternate view, which could subject the Company to
penalties and fines and require the Company to go through the costly and
time-consuming licensing application process in each such jurisdiction which
takes the position that the Company must hold an insurance license
therein.
Risks
Related To Customers
The
Company’s products are not yet proven with customers.
Until
the
Company has finished developing its products, there is uncertainty regarding
the
products’ acceptability to customers and as a result, their viability within the
customers’ sales channels. In the event that acceptance is delayed, or in the
event that customers promote competitive products, the Company would be
seriously harmed.
Risks
Related To Purchase and Ownership of Stock
The
Offering Price of the Shares is arbitrary.
The
price
of the Shares has been determined arbitrarily by the Company and bears no
relationship to the Company's assets, book value, potential earnings or any
other recognized criteria of value.
The
Company has a lack of dividend payments.
The
Company has no plans to pay any dividends in the foreseeable
future.
Certain
Company actions and the interests of stockholders may
differ.
The
voting control of the Company could discourage others from initiating a
potential merger, takeover or another change of control transaction that could
be beneficial to stockholders. As a result, the value of stock could be harmed.
Purchasers should be familiar with the equity breakdowns among stockholders
of
the Company.
The
Company’s management team will have broad discretion over the use of
proceeds.
The
Company’s management will retain broad discretion as to the allocation of the
proceeds of this Offering, and the Company may not be able to invest these
proceeds to yield a significant return.
Purchasers
will experience immediate and substantial book value
dilution.
The
price
of the Shares offered hereunder is expected to be substantially higher than
the
net tangible book value of each outstanding share of stock. Investors who
purchase Shares in this Offering will suffer immediate and substantial dilution.
The
Company may be subject to rights of preferred stockholders including mandatory
redemption.
At
some
point in the future, the Company may authorize and issue preferred stock. The
rights attached to preferred shares could affect the Company’s ability to
operate, which could force the Company to seek other financing. Such financing
may not be available on commercially reasonable terms or at all and could cause
substantial dilution to existing stockholders.
Our
Common Stock may be subject to “penny stock” rules which may be detrimental to
investors.
The
SEC
has adopted regulations which generally define “penny stock” to be any equity
security that has a market price (as defined) of less than $5.00 per share
or an
exercise price of less than $5.00 per share. Such securities are subject to
rules that impose additional sales practice requirements on broker-dealers
who
sell them. For transactions covered by these rules, the broker-dealer must
make
a special suitability determination for the purchaser of such securities and
have received the purchaser’s written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the rules require the delivery, prior to the transaction, of a
disclosure schedule prepared by the SEC relating to the penny stock market.
The
broker-dealer also must disclose the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and, if the broker-dealer is the sole market-maker, the broker-dealer
must disclose this fact and the broker-dealer’s presumed control over the
market. Finally, among other requirements, monthly statements must be sent
disclosing recent price information for the penny stock held in the account
and
information on the limited market in penny stocks. As the Shares immediately
following this Offering will likely be subject to such penny stock rules,
purchasers in this Offering will in all likelihood find it more difficult to
sell their Shares in the secondary market.
We
have the right to issue up to 75,000,000 shares of preferred stock, which may
adversely affect the voting power of the holders of other of our securities
and
may deter hostile takeovers or delay changes in management control.
We
may
issue up to 75,000,000 shares of our preferred stock from time to time in one
or
more series, and with such rights, preferences and designations as our board
of
directors may determine from time to time. To date, we have not issued any
shares of preferred stock. Our board of directors
is
authorized to fix the dividend rights and terms, conversion rights, voting
rights, redemption rights, liquidation preferences and other rights and
restrictions relating to any series of our preferred stock. Issuances of shares
of preferred stock, while providing flexibility in connection with possible
financings, acquisitions and other corporate purposes, could, among other
things, adversely affect the voting power of the holders of our common stock
and
may, under certain circumstances, have the effect of deterring hostile takeovers
or delaying changes in management control.
Forward
Looking Statements
This
Prospectus contains projections and statements relating to Company that
constitute "forward-looking statements." These forward-looking statements may
be
identified by the use of predictive, future-tense or forward-looking
terminology, such as "intends," "believes," "anticipates," "expects,"
"estimates," "may," "will," or similar terms. Such statements speak only as
of
the date of such statement, and the Company undertakes no ongoing obligation
to
update such statements. These statements appear in a number of places in this
Prospectus and include statements regarding the intent, belief or current
expectations of the Company, and its respective directors, officers or advisors
with respect to, among other things: (1) trends affecting the Company’s
financial condition, results of operations or future prospects, (2) the
Company’s business and growth strategies and (3) the Company’s financing plans
and forecasts. Potential investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve significant
risks and uncertainties, and that, should conditions change or should any one
or
more of the risks or uncertainties materialize or should any of the underlying
assumptions of the Company prove incorrect, actual results may differ materially
from those projected in the forward-looking statements as a result of various
factors, some of which are unknown. The factors that could adversely affect
the
actual results and performance of the Company include, without limitation,
the
Company’s inability to raise additional funds to support operations and capital
expenditures, the Company’s inability to effectively manage its growth, the
Company’s inability to achieve greater and broader market acceptance in existing
and new market segments, the Company’s inability to successfully compete against
existing and future competitors, the Company’s reliance on independent
manufacturers and suppliers, disruptions in the supply chain, the Company’s
inability to protect its intellectual property, other factors described
elsewhere in this Prospectus, or other reasons. Potential investors are urged
to
carefully consider such factors. All forward-looking statements attributable
to
the Company or persons acting on its behalf are expressly qualified in their
entirety by the foregoing cautionary statements and the "Risk Factors" described
herein.
Use
of
Proceeds
Assuming
200,000 Shares are subscribed for in this Offering, and after netting
anticipated Offering expenses, the net proceeds from the sale of the Shares
will
be approximately $30,000. The Company intends to use the net proceeds from
the
Offering substantially for general corporate purposes primarily in the areas
of
marketing, advertising, promotion, acquiring relationships with title
abstractors and title agencies and general working capital. We believe these
proceeds will be sufficient to fund our operations for a period of six months.
Set forth below is the Company’s proposed use of proceeds assuming the sale of
all of the Shares offered hereunder:
Working
Capital
The
Company plans to hire employees with technical expertise to refine its products
and services. Working capital will support personnel costs as well as the
general administration and management of the Company’s start-up
phase.
Research
and Development
The
Company anticipates continuing its research and development efforts to enhance
its sales and market position by developing an electronic central title starts
repository. Proceeds of this Offering will support the Company’s ongoing
research and development efforts.
Marketing/Advertising/Promotion
The
Company expects to explore the most advantageous means of marketing, advertising
and promotion of the Company’s products and services. The funds generated from
this Offering will support the Company’s marketing strategies.
Because
of the number and variability of factors that determine the use of the net
proceeds from this Offering, we cannot assure you that the actual uses of the
net proceeds from this Offering will not vary substantially from our currently
planned uses. Pending use of the net proceeds from this Offering, we intend
to
invest the net proceeds from this Offering in money market accounts at insured
institutions.
Determination
of
Offering Price
Prior
to
this Offering, there has been no market for our common stock. The Offering
Price
of the Shares offered hereunder was arbitrarily determined by the Company and
bears no direct relationship to the value of our assets, book value, net worth,
historical or prospective earnings, actual results of operations, trading price
of our stock, or any other recognized criteria of value. The Offering Price
of
the Shares should not be considered as an indication of the actual or trading
value of a share of our common stock.
Plan
of Distribution
General
There
is
no public market for our common stock. Therefore, the current and potential
market for our common stock is limited and the liquidity of our shares may
be
severely limited. To date, we have made no effort to obtain listing or quotation
of our securities on a national stock exchange or association. We have not
identified or approached any broker/dealers with regard to assisting us to
apply
for such listing. We are unable to estimate if or when we expect to undertake
this endeavor. No market may ever develop for our common stock, or if developed,
may not be sustained in the future. Accordingly, the Shares should be considered
totally illiquid, which inhibits investors’ ability to sell their Shares. The
market price of the Shares of common stock is likely to be highly volatile
and
may be significantly affected by factors such as actual or anticipated
fluctuations in the Company’s operating results, announcements of technological
innovations, new products and/or services or new contracts by the Company or
its
competitors, developments with respect to copyrights or proprietary rights,
adoption of new accounting standards or regulatory requirements affecting the
insurance business, general market conditions and other factors. In addition,
the stock market from time to time experiences significant price and volume
fluctuations that may adversely affect the market price for the Company’s common
stock.
The
Offering
The
Company is offering to sell up to 900,000 Shares pursuant to the terms of this
Prospectus in a self-underwritten direct public offering, without any
participation by underwriters or broker-dealers. The Offering Price is $0.25
per
Share. The Offering Period will begin on the date this registration statement
is
declared effective by the Securities and Exchange Commission and continue until
5:00 P.M. Local Time, on June 30, 2008. We may extend the Offering Period for
an
additional 30 days unless the Offering is completed within the Offering Period.
We may, within our sole discretion, terminate the Offering prior to the end
of
the Offering Period. The closing of the Offering and the disbursement of funds
are conditioned upon our receipt of subscriptions aggregating no less than
$50,000. The minimum dollar amount of Shares that may be purchased by any
subscriber is $1,250, unless the Company waives this minimum dollar requirement.
Until
the
Company receives and accepts subscriptions for a minimum of $50,000, all
subscription funds will be held by the Company in a separate escrow account.
If
subscriptions for at least $50,000 have not been received before the expiration
of the Offering Period, including any extensions, all subscription funds will
be
returned to the subscribers, without any interest earned on the funds. If an
investor subscribes for at least $1,250 and its subscription is accepted by
Company, the subscription funds, together with any interest earned on the funds,
will be drawn upon and used by the Company following the closing of the
Offering.
The
affiliates, officers, directors, employees and stockholders of the Company
reserve the right at their option to purchase Shares, but all such purchases
shall be without discount and at the full Offering Price per Share. Any such
purchase will be counted in determining if the Minimum Offering Amount has
been
satisfied.
Shares
will be sold through the efforts of the officers and directors of the Company.
There will be no participation by underwriters or broker-dealers. The Shares
will be qualified or registered for sale under the “blue sky” laws of certain
states. The states in which the Company currently plans to offer the Shares
include California, Florida, Kansas, Missouri and Nevada.
Expenses
of Offering
The
Company will pay all of the costs and expenses in connection with the Offering,
including but not limited to all expenses incurred to prepare, reproduce or
print this Prospectus, legal expenses and other expenses incurred in qualifying
the Offering for sale under federal securities laws and applicable state
securities, or “blue sky,” laws. It is estimated that the expenses of the
Offering will not exceed $20,000.
Subscription
Procedures
If
after
carefully reviewing and studying this Prospectus, you desire to purchase Shares,
you must do the following:
(1)
Complete,
execute, date and deliver to us the Subscription Agreement which accompanies
this Prospectus.
(2)
Forward
the Subscription Agreement to Carol McMahan, Synergy Law Group, LLC, 730 West
Randolph, Suite 600, Chicago, IL 60661, with a check payable to “Title Starts
Online, Inc.” in an amount equal to the total purchase price for the number of
Shares you desire to purchase.
All
funds
received in connection with the sale of the Shares shall be held in an escrow
account in an insured institution.
Right
to Reject Subscriptions
We
have
the right to accept or reject subscriptions in whole or in part for any reason
or for no reason. We will return all monies from rejected subscriptions to
the
subscriber without interest or deduction.
Legal
Proceedings
There
are
no pending, nor to our knowledge threatened, legal proceedings against the
Company.
Directors
and
Officers
The
directors of the Company hold office for annual terms and will remain in their
positions until successors have been elected and qualified. The officers are
appointed by the board of directors of the Company and hold office until their
death, resignation or removal from office. The ages, positions held, and
duration of terms of the directors and executive officers are as
follows:
|
Name
|
|
Age
|
|
Position
|
|
Mark
DeFoor
|
|
36
|
|
Director,
President and Chief Executive Officer
|
|
Melissa
Yarnell
|
|
40
|
|
Secretary
and Director
|
Mark
DeFoor, Director, President, Chief Executive Officer:
Mark
DeFoor is a Director, President and Chief Executive Officer of Title Starts
Online, Inc. Mr. DeFoor earned a Bachelor’s of Business Administration (1993)
and a Master’s of Business Administration (1995) from the University of Missouri
at KC. Mr. DeFoor’s previous experience includes the development of the National
Association of Insurance Commissions Central Repository of Producer Agents
as
well as the purchase, operation and sale of several title insurance
companies.
Melissa
Yarnell, Secretary and Director:
Melissa
Yarnell is a Director and Secretary of Title Starts Online, Inc. Mrs. Yarnell
attended Kansas City Kansas Community College and has been in the title
insurance business since 1990. From 1990 to 1994 Mrs. Yarnell served as an
Escrow Closer at ATI/American Land Title Agency and from 1994 to 2003 served
as
Escrow Manager of Nations Title Agency, Inc. Mrs. Yarnell is currently the
Vice
President of Escrow Services for Capital Title Agency, Inc. in Kansas City,
MO.
Term
of Office
Our
directors are appointed for one-year terms to hold office until the next annual
meeting of our shareholders or until removed from office in accordance with
our
By-Laws. Our officers are appointed by our board of directors and hold office
until removed by the board.
Director
Independence
Our
determination of independence of directors is made using the definition of
‘‘independent director’’ contained under Rule 4200(a)(15) of the Rules of the
Financial Industry Regulatory Authority (“FINRA”). However, we are not at this
time required to have our board comprised of a majority of “independent
directors” because we are not subject to the listing requirements of any
national securities exchange or national securities association.
Employees
At
the
present time, we have no paid employees. Mark DeFoor, our President and Chief
Executive Officer, is currently managing the start-up operations of the Company
without compensation.
Beneficial
Ownership
The
following table sets forth certain information as of December 31, 2007 with
respect to the beneficial ownership of the outstanding common stock of the
Company by (i) any holder of more than five (5%) percent; (ii) each of the
Company’s executive officers and directors; and (iii) the Company’s directors
and executive officers as a group. Unless otherwise indicated below, the persons
and entities named in the table have sole voting and sole investment power
with
respect to all shares beneficially owned. The percentage of class is based
on
3,100,000 shares of common stock issued and outstanding as of the date of this
Prospectus. Unless otherwise indicated below, the address for each individual
is
7007 College Boulevard, Suite 270, Overland Park, KS 66211.
|
Name
and Address of Beneficial Owner
|
|
Amount of Beneficial
Ownership
|
|
Percentage of
Class
|
|
|
Mark
DeFoor
|
|
|
3,100,000
|
|
|
100
|
%
|
|
Melissa
Yarnell
|
|
|
0
|
|
|
0
|
|
|
Directors
and Executive Officers as a Group (2 persons)
|
|
|
|
|
|
100
|
%
|
Description
of
Securities
The
following statements are qualified in their entirety by reference to the
detailed provisions of our Articles of Incorporation and By-Laws. The Shares
registered pursuant to the registration statement of which this prospectus
is a
part are shares of common stock, all of the same class and entitled to the
same
rights and privileges as all other shares of common stock.
Capital
Stock
The
authorized capital stock of the Company is 500,000,000 shares of capital stock,
consisting of 425,000,000 shares of common stock with full voting rights and
with a par value of $0.001 per share, and 75,000,000 shares of preferred stock,
with a par value of $0.001 per share (the “Preferred Stock”).
Preferred
Stock may be issued from time to time in one or more series with such
designations, preferences and relative participating, optional or other special
rights and qualifications, limitations or restrictions thereof, as shall be
provided by Board resolution authorizing the issuance of such Preferred Stock
or
series thereof; and the Board is vested with authority to fix such designations,
preferences and relative participating, optional or other special rights or
qualifications, limitations, or restrictions for each series, including the
power to fix the redemption and liquidation preferences, the rate of dividends
payable and the time for and the priority of payment thereof and to determine
whether such dividends shall be cumulative or not and to provide for and fix
the
terms of conversion of such Preferred Stock or any series thereof into the
common stock of the Company and fix the voting power, if any, of shares of
Preferred Stock or any series thereof.
As
of
December 31, 2007, there were 3,100,000 shares of common stock issued
outstanding. There are no outstanding shares of Preferred Stock.
As
of
December 31, 2007, there was one (1) holder of record of the Company’s common
stock, who is an affiliate of the Company.
Options
and Warrants
There
are
no outstanding options or warrants or other securities that are convertible
into
our common stock.
Voting
Rights
Each
shareholder is entitled to one (1) vote for each share of voting stock.
Shareholders are not entitled to cumulative voting rights.
Dividend
Policy
We
intend
to retain and use any future earnings for the development and expansion of
our
business and do not anticipate paying any cash dividends in the foreseeable
future.
Transfer
Agent
The
transfer agent for our common stock will be Empire Stock Transfer Inc. upon
completion of this Offering. Its address and telephone number are 2470 Saint
Rose Pkwy, Suite 304, Henderson, NV 89074, 702.818.5898. Until the present
time, we have acted as our own transfer agent and registrar.
Penny
Stock Regulation
The
SEC
has adopted regulations which generally define “penny stock” to be any equity
security that has a market price (as defined) of less than $5.00 per share
or an
exercise price of less than $5.00 per share. Such securities are subject to
rules that impose additional sales practice requirements on broker-dealers
who
sell them. For transactions covered by these rules, the broker-dealer must
make
a special suitability determination for the purchaser of such securities and
have received the purchaser’s written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the rules require the delivery, prior to the transaction, of a
disclosure schedule prepared by the SEC relating to the penny stock market.
The
broker-dealer also must disclose the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and, if the broker-dealer is the sole market-maker, the broker-dealer
must disclose this fact and the broker-dealer’s presumed control over the
market. Finally, among other requirements, monthly statements must be sent
disclosing recent price information for the penny stock held in the account
and
information on the limited market in penny stocks. As the Shares immediately
following this Offering will likely be subject to such penny stock rules,
purchasers in this Offering will in all likelihood find it more difficult to
sell their Shares in the secondary market.
Interests
of
Named
Experts and Counsel
No
expert
or counsel named in this prospectus as having prepared or certified any part
of
this prospectus or having given an opinion upon the validity of the securities
being registered or upon other legal matters in connection with the registration
or offering of the Shares was employed on a contingency basis, or had, or is
to
receive, in connection with the Offering, a substantial interest, direct or
indirect, in the Company, nor was any such person connected with the Company
as
a promoter, managing or principal underwriter, voting trustee, director, officer
or employee.
Disclosure
of
Commission
Position on Indemnification
for
Securities Act Liabilities
Our
Articles of Incorporation and By-Laws provide for the indemnification of Company
officers and directors in regard to their carrying out the duties of their
offices. We have been advised that in the opinion of the SEC indemnification
for
liabilities arising under the Securities Act 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 payment
by
the Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by one of our directors, officers or controlling persons
in connection with the securities being registered, we will, unless in the
opinion of our legal counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by us is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.
Description
of
Business
Company
Overview
Title
Starts Online, Inc. is a corporation, incorporated in the State of Nevada on
November 13, 2007. The Company's principal offices are currently located at
7007
College Boulevard, Suite 270, Overland Park, KS 66211. Our telephone number
there is 913.832.0072. Our fax number is 913.747.3001. All operations, from
administration to product development, take place at this location. The Company
occupies space within a customer facility owned by our President and Chief
Executive Officer, Mark DeFoor, for which it currently pays no rent. There
is no
obligation for or guarantee that this arrangement will continue in the
future.
The
Company is in its development stage with no current revenues to date. The
majority of the activities to date have revolved around defining requirements
from residential title abstractors in the Kansas City area to determine the
value proposition of a consolidated title start website business. In the title
insurance business, abstractors are required to research any and all
encumbrances on specific properties which are in the process of being refinanced
or sold. This search is completed by merging data from a variety of sources,
some online and some in log books physically maintained by local governmental
entities and private production plants. The research results are then compiled
into a commitment of title insurance which is submitted to the entity requesting
the information.
Organizational
Structure
Our
President and Chief Executive Officer, Mark DeFoor, is the only individual
currently participating in the Company’s start-up activities. At present, he is
contributing less than 10 hours per week to handle the operational business
functions including corporate administration and development
responsibility.
Upon
the
successful acquisition of funding or an increase in sales, we plan to expand
the
current staff by adding employees with technical expertise. We anticipate the
cost of each of these technical employment positions to be approximately
$80,000.00 per year, and we may choose to compensate these employees with
consideration other than cash, such as shares of common stock or options to
purchase shares of common stock.
We
expect
to hire employees to fill the following positions:
DBA –
Database Administrator
.Net
Systems Developer
Document
Management Specialist
We
would
also like to retain commissioned sales representatives or partner with national
insurance underwriters to cross-sell our services. As sales increase, we will
be
in a position to add customer service representatives to handle inbound calls,
handle setup, and assist in operational troubleshooting.
Products
and Services
The
mission of the Company is to provide fast and reliable title starts to
abstractors of small and large title agencies and underwriters.
The
Company intends to develop a central repository for title starts and plans
to
deliver two categories of products – title starts and a title search template
–
along
with
a tips and tools area via the Company’s website. The website will have the
functionality to manage new title search findings based on unique user
identification to facilitate order processing, to offer remote storage and
minimize redundant data entry. Users will also have the ability to shop for
existing title starts and utilize innovative search techniques to expedite
their
search.
The
existing inventory of title starts will be indexed by multiple categories.
This
database-driven approach will allow users the ability to search by a number
of
separate of variables including addresses, names and/or property legal
descriptions. The Company will not store any nonpublic information such as
social security numbers or dates of birth on the website.
Users
will play a unique role in the population of the data on the Company website.
As
a user places a new title start online, that user will be able to access one
of
the existing starts placed by another user. Users will then have the capability
of ranking the accuracy and completeness of another user’s search.
The
Company will use a ranking system for users similar to the ranking system used
for sellers on e-bay. Abstractors will be ranked by their peers as to the
completeness and accuracy of their searches. If the ranking of an abstractor
falls below our pre-determined acceptance level, they will have a “restricted”
ranking which will alert purchasers to the quality of the title start requested
from a “restricted” user.
Startup
and Plan
of Operation
The
Data
Model (Database back-end which houses the physical data logically for efficient
access) has entered its second stage of development. We would like to establish
an advisory panel of front line abstractors to determine the primary data
components. This proof of concept at this stage will allow for a more efficient
development phase of version I of the GUI interface.
The
GUI
(Graphical User Interface) design is pending approval of the Data Model with
the
advisory panel. We are planning two separate interfaces for the initial launch.
The first is the information entry screen which will give abstractors at the
plant the ability to upload and utilize a standard process to search title.
The
second will be a search engine which will give the abstractors the ability
to
access property information.
Over
time, we see a third component to the system. This final component will allow
imports from industry standard software through an easy-to-use interface. This
component may need to be non-standard as each import would require a small
amount of mapping to ensure that the load would match our Data Model. If we
are
successful in acquiring a large, national agency or underwriter as a business
partner, we will elevate the priority of the development of this component.
Sales
Strategies
We
are
currently in the development stage of sales strategies. Initially, it appears
that the most cost-effective way to generate sales will be to direct as many
users as possible to the Company’s website. The site should be developed in a
manner which would allow screens to be exported to media for
distribution.
Technology
/ Platform
The
web
real estate of titlestarts.com is currently being developed utilizing the
following products offered remotely by godaddy.com:
Database:
SQLServer
GUI:
Microsofts
.net framework
Both
products run on the Microsoft’s Server platform.
Godaddy.com
is also hosting the Company’s email services and storage of
information.
Future
Products and Services
As
the
use of the website grows, the repository of information will become increasingly
valuable and, in turn, marketable. Real estate property-related entities, such
as property and casualty insurers, home improvement businesses and pest control
companies, will be able to see what starts have been viewed and, therefore,
ascertain the identity of the properties being transferred.
We
also
see a cross-marketing potential with the American Land Title Association wherein
the website could provide continuing education to abstractor members who use
the
product. The Company website could easily provide an online tutorial on proper
search methods which would promote good practices and which could potentially
reduce claims against agencies and underwriters.
Market
Needs
Abstractors,
also known as searchers, spend a significant portion of their time searching
paper documents in local county offices or production plants. Production plants
are repositories for real estate property records where plant members have
the
ability to view information. These production plants are expensive to maintain
and are used exclusively by medium or large title agencies and underwriters.
The
Company intends to offer to small and large title agencies and underwriters
electronic access to the same information which is available at production
plants. This will allow all abstractors the ability to acquire title starts
on a
transaction fee basis.
An
electronic central title start repository offers the potential for an enormous
reduction in the time involved in research by abstractors. The online repository
would allow the work of an already researched property to be reutilized for
a
small transaction fee.
Market
Trends
Almost
every insurance agency and underwriter in the title industry is intensely
interested in the developments in and benefits of technological advances in
the
industry. These companies are developing brand specific applications to speed
the delivery of title commitments to market. While they are spending tremendous
amount of time and money on these systems, the systems themselves are not
benefiting the front line abstractors.
It
is our
thought that the future will bring a consolidation of information across
agencies and underwriters. Such a vehicle does not currently exist, and the
Company hopes to be in a position to offer a central repository of property
information to all abstractors eliminating travel and search time in many
areas.
Market
Growth
Business
in all aspects of the real estate industry has constricted over the past year.
Mortgage applications have declined, and the ability of the mortgage
professionals to place those applications has also declined. Most mortgage
lenders have either closed or tightened the guild lines associated with placing
the loans.
Title
Starts Online, Inc can utilize this time to create, implement and market our
solution. The Company hopes that when an upswing in the real estate market
occurs, it will be in a position to capture market share.
Competition
The
title
industry does not currently have a public online resource for title starts.
Information is fragmented between legacy log books within local county records
and company records within a variety of insurance agencies and
underwriters.
The
primary competition will be our customers themselves. As a title insurance
agency searches a property, the “title start” or searched information is saved
within a customer’s file. This record can be either a physical paper file or an
image of the documents stored electronically. If, by chance, a title company
is
asked to research the property again, then the old customer file is opened
and
the title start will be utilized. In most cases, customers are not in the
position of having multiple searches on the same property.
Some
title agencies currently have an internal system which will access county
records remotely and import them into their system. This system requests new
searches from the county each time a property is searched. A system of this
type
would require data mapping for every county in the United States which is
currently web enabled.
Management's
Discussion
and
Analysis
or Plan
of Operation
The
following discussion of our financial condition and plan of operation should
be
read in conjunction with the information included elsewhere in this prospectus.
This discussion includes forward-looking statements that involve risks and
uncertainties. As a result of many factors, such as those set forth under
“
Risk
Factors
”
and
elsewhere in this prospectus, our actual results may differ materially from
those anticipated in these forward-looking statements. The Company has not
included audited financial statements, because the funds of the Company consist
solely of the amount received from the stock subscription of its sole
shareholder and a loan made or to be made to the Company from its sole
shareholder. The Company has no, and since its incorporation has had no,
operations or revenue.
Plan
of Operation
We
are a
start-up company and have not yet generated or realized any revenues from our
business operations.
Limited
Operating History; Need for Additional Capital
There
is
no historical financial information about us upon which to base an evaluation
of
our performance. We are in the start-up phase of development, have not generated
any revenues from operations and cannot guarantee we will be successful in
our
business operations.
Liquidity
and Capital Resources
We
are
attempting to raise money from this Offering to generate cash to begin
operations. As of December 31, 2007, our total assets were $25,000, and our
total liabilities were $20,000.
Important
Assumptions
The
recent downturn in the mortgage refinance market has significantly reduced
the
number of transactions we believe will be able to be performed. Although the
numbers of transactions are not expected to be as high as in recent years,
the
quantity of companies requiring our product will also decrease. This reduction
in the number of companies in the market will make it easier for market
penetration and standardization of data inputs.
Projected
Profit and Loss
All
numbers in ($)
|
|
|
2008
|
|
2009
|
|
2010
|
|
2011
|
|
2012
|
|
|
Revenue
|
|
|
|
|
|
336,000
|
|
|
840,000
|
|
|
4,200,000
|
|
|
6,400,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payroll,
Taxes and Benefits
|
|
|
23,940
|
|
|
121,980
|
|
|
225,720
|
|
|
964,440
|
|
|
1,162,800
|
|
|
Contract
Programming
|
|
|
|
|
|
24,000
|
|
|
48,000
|
|
|
96,000
|
|
|
96,000
|
|
|
Sales
& Marketing
|
|
|
93,500
|
|
|
186,000
|
|
|
332,500
|
|
|
651,500
|
|
|
871,500
|
|
|
Leased
Equipment
|
|
|
3,000
|
|
|
12,000
|
|
|
12,000
|
|
|
61,000
|
|
|
46,000
|
|
|
Legal
& Accounting
|
|
|
12,000
|
|
|
26,000
|
|
|
24,000
|
|
|
10,400
|
|
|
24,000
|
|
|
Online
Services
|
|
|
2,200
|
|
|
2,200
|
|
|
2,600
|
|
|
3,800
|
|
|
3,800
|
|
|
Telephone
& Internet
|
|
|
4,200
|
|
|
4,200
|
|
|
4,200
|
|
|
4,200
|
|
|
4,200
|
|
|
Office
Supplies
|
|
|
6,000
|
|
|
7,500
|
|
|
9,000
|
|
|
16,000
|
|
|
24,000
|
|
|
Insurance
|
|
|
1,000
|
|
|
1,000
|
|
|
1,500
|
|
|
12,000
|
|
|
24,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit
/ (Loss)
|
|
|
(145,840
|
)
|
|
(48,880
|
)
|
|
180,480
|
|
|
2,380,660
|
|
|
4,143,700
|
|
Revenue
|
|
1.
|
Market
Research indicates a price point of $2.00 per
start.
|
|
|
2.
|
In
an effort to populate the database, there will be no charge for starts
for
2008.
|
|
|
3.
|
2009
revenue represents four regional markets operating at 3,500 title
start
searches per month.
|
|
|
4.
|
2010
revenue represents ten regional markets operating at 5,000 title
start
searches per month.
|
|
|
5.
|
2011
revenue represents thirty regional markets operating at 5,000 title
start
searches per month.
|
|
|
6.
|
2012
revenue represents 45 regional markets operating at 5,000 title start
searches per month.
|
Description
of
Property
The
Company owns no real estate. Title Starts Online, Inc. is currently utilizing
space within a customer facility in Overland Park, KS. The facility is owned
by
our President and Chief Executive Officer, Mark DeFoor, and the Company
presently pays no rent to occupy the space. There is no obligation for or
guarantee that this arrangement will continue in the future.
The
website is co-located with www.godaddy.com to insure favorable service times
while offering the flexibility of increasing data storage and bandwidth without
the delay of acquisition and installation of owned services. When revenues
and/or raised capital allows, a development environment will be created within
the physical location to speed access. Long term, the Chief Technology Officer
will make a determination as to the operational location of the production
website.
Certain
Relationships
and
Related Transactions
Since
inception, the following transactions were entered into with our shareholders.
Our
sole
shareholder, Mark DeFoor, acquired his shares with the intent to hold the shares
for investment purposes and not with a view to further resale or distribution,
except as permitted under exemptions from registration requirements under
applicable securities laws.
The
certificates were issued with restrictive legends with respect to the issuance
of securities pursuant to exemptions from registration requirements under the
Securities Act.
Our
sole
shareholder, Mark DeFoor, has agreed to loan up to $25,000 to the Company as
needed to aid start-up of Company operations pending receipt of proceeds from
this Offering. Any such loan will be made on commercially reasonable terms
and
will be documented by a promissory note.
Market
for
Common Equity and Related Stockholder Matters
No
Public Market for Common Stock
There
is
no public market for our common stock. Therefore, the current and potential
market for our common stock is limited and the liquidity of our shares may
be
severely limited. To date, we have made no effort to obtain listing or quotation
of our securities on a national stock exchange or association. We have not
identified or approached any broker/dealers with regard to assisting us to
apply
for such listing. We are unable to estimate if or when we expect to undertake
this endeavor. No market may ever develop for our common stock, or if developed,
may not be sustained in the future. Accordingly, our shares should be considered
totally illiquid, which inhibits investors’ ability to sell their Shares. The
market price of the Shares of common stock is likely to be highly volatile
and
may be significantly affected by factors such as actual or anticipated
fluctuations in the Company’s operating results, announcements of technological
innovations, new products and/or services or new contracts by the Company or
its
competitors, developments with respect to copyrights or proprietary rights,
adoption of new accounting standards or regulatory requirements affecting the
insurance business, general market conditions and other factors. In addition,
the stock market from time to time experiences significant price and volume
fluctuations that may adversely affect the market price for the Company’s common
stock.
Shareholders
of Our Common Shares
As
of the
date of this prospectus, we have one shareholder of record.
Rule
144 Shares
There
are
currently no outstanding warrants for the purchase of shares of common stock
and
no shares of common stock reserved under any employee stock option plans. As
of
the date of this prospectus, 3,100,000 shares of common stock are issued and
outstanding. There currently are no shares of common stock or common stock
equivalents which can be resold in the public market in reliance upon the safe
harbor provisions of Rule 144, as promulgated under the Securities Act of 1933.
Upon
the
date this Registration Statement becomes effective, a total of 900,000 shares
of
our common stock will become available for sale to the public. The 3,100,000
shares of common stock outstanding as of the date of this prospectus are
considered “restricted securities” because they were issued in reliance upon an
exemption from the registration requirements of the Securities Act and not
in
connection with a public offering. On May 13, 2008 these 3,100,000 shares will
become available for resale to the public under Rule 144 under the Securities
Act. In general, under Rule 144, as amended and effective February 15, 2008,
an
affiliate of a reporting company may resell restricted securities after a
six-month holding period, subject to the current public information
requirements, volume limitations, manner of sale requirements and notice of
proposed sale requirements.
As
of the
date of this prospectus, one person, who is an affiliate, holds 100% of our
outstanding shares of common stock.
Stock
Option Grants
To
date,
we have not granted any stock options.
Registration
Rights
We
have
not granted registration rights to any holder of shares of our common stock.
Dividends
There
are
no restrictions in our Articles of Incorporation or By-Laws that prevent us
from
declaring dividends. The Nevada Revised Statutes, however, do prohibit us from
declaring dividends where, after giving effect to the distribution of the
dividend:
|
|
1.
|
We
would not be able to pay our debts as they become due in the usual
course
of business; or
|
|
|
2.
|
Our
total assets would be less than the sum of our total liabilities
plus the
amount that would be needed, if the Company were to be dissolved
at the
time of the distribution, to satisfy the preferential rights upon
dissolution of shareholders whose preferential rights are superior
to
those receiving the distribution.
|
We
have
not declared any dividends, and we do not plan to declare any dividends in
the
foreseeable future.
Executive
Compensation
We
have
not entered into any contracts for employment or alternative compensation for
any directors or executive officers. There are also no arrangements or plans
to
provide retirement, pension or similar benefits. We do not currently have any
bonus or incentive plans available. However, stock options may be granted at
the
direction of the board of directors.
Reports
to
Security Holders
We
have
filed with the SEC a Registration Statement on Form SB-2 (including exhibits)
under the Securities Act with respect to the shares to be sold in this Offering.
This prospectus, which forms part of the registration statement, does not
contain all the information set forth in the Registration Statement as some
portions have been omitted in accordance with the rules and regulations of
the
SEC. For further information with respect to our Company and the Shares offered
in this prospectus, reference is made to the Registration Statement, including
the exhibits filed thereto, and the financial statements and notes filed as
a
part thereof. With respect to each such document filed with the SEC as an
exhibit to the Registration Statement, reference is made to the exhibit for
a
more complete description of the matter involved. We are not currently subject
to the informational requirements of the Securities Exchange Act of 1934 (the
“Exchange Act”). As a result of the offering of the Shares of our common stock,
we will become subject to the informational requirements of the Exchange Act,
and, in accordance therewith, we will file quarterly and annual reports and
other information with the SEC and send a copy of our annual report together
with audited consolidated financial statements to each of our shareholders.
The
Registration Statement, such reports and other information may be inspected
and
copied at the Public Reference Room of the SEC located at 100 F Street, N.
E.,
Washington, D. C. 20549. Copies of such materials, including copies of all
or
any portion of the Registration Statement, may be obtained from the Public
Reference Room of the SEC at prescribed rates. You may call the SEC at
1-800-SEC-0330 to obtain information on the operation of the Public Reference
Room. Such materials may also be accessed electronically by means of the SEC’s
home page on the internet (http://www.sec.gov).
Part
II
Information
Not Required in Prospectus
Item
24.
Indemnification
of Directors and Officers
The
Company’s directors and executive officers are indemnified as provided by the
Nevada Revised Statutes and its By-Laws. These provisions state that certain
persons (hereinafter called "lndemnitees") may be indemnified by a Nevada
corporation pursuant to the provisions of applicable law, namely, any person
(or
the heirs, executors or administrators of such person) who was or is a party
or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
by
reason of the fact that such person is or was a director, officer, employee
or
agent of such corporation, or is or was serving at the request of such
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise. The Company will
indemnify the Indemnitees in each and every situation where the Company is
obligated to make such indemnification pursuant to the aforesaid statutory
provisions. The Company will also indemnify the Indemnitees in each and every
situation where, under the aforesaid statutory provisions, the Company is not
obligated, but is nevertheless permitted or empowered, to make such
indemnification. Before making such indemnification with respect to any
situation covered under the foregoing sentence, the Company will make a
determination as to whether each Indemnitee acted in good faith and in a manner
such Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, and, in the case of any criminal action or proceeding,
had no reasonable cause to believe that such Indemnitee's conduct was unlawful.
No such indemnification shall be made (where not required by statute) unless
it
is determined that such Indemnitee acted in good faith and in a manner such
Indemnitee reasonably believed to be in or not opposed to the best interests
of
the Company, and, in the case of any criminal action or proceeding, had no
reasonable cause to believe that such Indemnitee's conduct was
unlawful.
We
have
been advised that in the opinion of the SEC indemnification for liabilities
arising under the Securities Act 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 payment by the Company
of
expenses incurred or paid by a director, officer or controlling person of the
Company in the successful defense of any action, suit or proceeding) is asserted
by one of our directors, officers or controlling persons in connection with
the
securities being registered, we will, unless in the opinion of our legal counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by us is
against public policy as expressed in the Securities Act and will be governed
by
the final adjudication of such issue.
Item
25.
Other
Expenses of Issuance and Distribution
The
following table sets forth all estimated costs and expenses payable by the
Company in connection with the Offering for the securities included in this
registration statement:
|
SEC
registration fee
|
|
$
|
9.00
|
|
|
Blue
Sky fees and expenses
|
|
$
|
4,000.00
|
|
|
Printing
and shipping expenses
|
|
$
|
391.00
|
|
|
Legal
fees and expenses
|
|
$
|
10,000.00
|
|
|
Accounting
fees and expenses
|
|
$
|
5,000.00
|
|
|
Transfer
agent and miscellaneous expenses
|
|
$
|
600.00
|
|
|
Total
|
|
$
|
20,000.00
|
|
All
expenses are estimated except the SEC filing fee.
Item
26.
Recent
Sales Of Unregistered Securities
In
connection with the organization of the Company, the sole shareholder of the
Company purchased an aggregate of 3,100,000 shares of Company common stock
on
November 13, 2007.
The
foregoing sale to a director with superior access to all corporate and financial
information of the Company was exempt from the registration requirements of
the
Securities Act on the basis that the transaction did not involve a public
offering.
Item
27.
Exhibits
|
Exhibit
No.
|
|
Description
|
|
3.1
|
|
Articles
of Incorporation
|
|
3.2
|
|
By-Laws
|
|
4.1
|
|
Specimen
common stock certificate
|
|
5.1
|
|
Opinion
of Synergy Law Group, LLC
|
|
10.1
|
|
Subscription
Agreement
|
|
23.1
|
|
Consent
of Synergy Law Group, LLC (see Exhibit
5.1)
|
Item
28.
Undertakings
We
hereby
undertake:
1.
To
file,
during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
(i)
To
include any prospectus required by Section 10(a)(3) of the Securities Act of
1933.
(ii)
To
reflect in the prospectus any facts or events arising after the effective date
of the Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information in the Registration Statement. Notwithstanding the foregoing,
any increase or decrease in 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) if, in the aggregate, the changes in volume and price represent
no
more than a 20 percent change in the maximum aggregate offering price set forth
in the “Calculation of Registration Fee” table in the effective Registration
Statement; and
(iii)
To
include any additional or changed material information on 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 therein, and the offering of such securities
at that time 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.
4.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, we have 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 Registrant of expenses incurred
or
paid by a director, officer or controlling person of the registrant 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, we will, unless in the opinion of our 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.
5.
For
determining any liability under the Securities Act of 1933:
(i)
we
shall
treat 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 us under Rule 424(b)(1) or (4) or 497(h) under the
Securities Act as part of this registration statement as of the time the
Commission declared it effective. For determining any liability under the
Securities Act of 1933, we shall treat each post-effective amendment that
contains a form of prospectus as a new registration statement for the securities
offered in the registration statement, and that offering of the securities
at
that time as the initial bona fide offering of those securities.
(ii)
we
shall
treat each prospectus filed by us pursuant to Rule 424(b)(3) as part of the
registration statement as of the date the filed prospectus was deemed part
of
and included in the registration statement. Each prospectus required to be
filed
pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration
statement in reliance on rule 430B relating to an offering made pursuant to
Rule
415(a)(1)(i), (vii), or (x) for the purpose of providing the information
required by section 10(a) of the Securities Act shall be deemed to be part
of
and included in the registration statement as of the earlier of the date such
form of prospectus is first used after effectiveness or the date of the first
contract of sale of securities in the offering described in the prospectus.
As
provided in Rule 430B, for liability purposes of the issuer and any person
that
is at that date an underwriter, such date shall be deemed to be a new effective
date of the registration statement relating to the securities in the
registration statement to which that prospectus relates, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof. 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 effective date,
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 effective date; or
(iii)
we
shall
treat each prospectus filed pursuant to Rule 424 (b) as part of a registration
statement relating to an offering, other than registration statement relying
on
Rule 430B or other than prospectuses filed in reliance on rule 430A, 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.
Signatures
In
accordance with the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements of filing on Form SB-2 and authorized this registration statement
to be signed on its behalf by the undersigned in the City of Overland Park,
State of Kansas on February 1, 2008.
In
accordance with the requirements of the Securities Act, this Registration
Statement was signed by the following persons in the capacities and on the
dates
stated.
|
SIGNATURE
|
TITLE
|
DATE
|
|
|
|
|
|
/s/
Mark DeFoor
|
President,
Chief Executive Officer and Director (principal executive officer;
principal financial and accounting officer)
|
February
1, 2008
|
|
|
|
|
|
/s/
Melissa Yarnell
|
Secretary
and Director
|
February
1, 2008
|
|
|
|
|
EXHIBIT
3.2
BYLAWS
OF
TITLE
STARTS ONLINE, INC.
Adopted
by the Board of Directors
November
_13, 2007
ARTICLE
I
:
OFFICES
The
principal office for the transaction of business of the Corporation may be
at
any such location as the Board of Directors may from time to time determine
or
the business of the Corporation may require. The Corporation may have other
offices at such places as the Board of Directors may from time to time
determine.
ARTICLE
II
:
SHAREHOLDERS'
MEETINGS
2.1
ANNUAL MEETINGS
The
annual meeting of the shareholders shall be held at such time, date and place
within or without the State of Nevada as may be designated by the Board of
Directors and in the notice of such meeting. The business to be transacted
at
such meeting shall be the election of directors and such other business as
may
properly be brought before the meeting.
2.2
SPECIAL MEETINGS
Special
meetings of the shareholders for any purpose may be called at any time by a
majority of the members of the Board of Directors. Such meetings shall be held
at the principal office of the Corporation or at such other place within or
without the State of Nevada as may be designated in the notice of meeting.
2.3
NOTICE OF MEETINGS
2.3.1
Notices
of meetings, annual or special, to shareholders entitled to vote shall be given
in writing and signed by the President or a Vice-President or the Secretary
or
the Assistant Secretary, or by any other natural person designated by the Board
of Directors.
2.3.2
Such
notices shall be sent to the shareholder's address appearing on the books of
the
Corporation, or supplied by him to the Corporation for the purpose of notice,
not less than ten (10) nor more than sixty (60) days before such meeting. Such
notice shall be deemed delivered, and the time of the notice shall begin to
run,
upon being deposited in the mail.
2.3.3
Notice
of any meeting of shareholders shall specify the place, the date and the time
of
the meeting and in case of a special meeting shall state the purpose(s) for
which the meeting is called.
2.3.4
When
a meeting is adjourned to another time, date or place, notice of the adjourned
meeting need not be given if announced at the meeting at which the adjournment
is given.
2.3.5
Any
shareholder may waive notice of any meeting by a writing signed by him, or
his
duly authorized attorney, either before or after the meeting.
2.3.6
No
notice
is required for matters handled by the written consent of the shareholders
pursuant to NRS 78.320.
2.3.7
No
notice
to a shareholder is required if notices of two consecutive annual meetings
and
interim notices have been returned undeliverable pursuant to NRS
78.370(6).
2.4
QUORUM
The
holders of a majority of the shares entitled to vote thereat, present in person
or by proxy, shall constitute a quorum for the transaction of
business.
2.5
VOTING RIGHTS
Except
as
may be otherwise provided in the Corporation's Articles of Incorporation, Bylaws
or by the Laws of the State of Nevada, each shareholder shall be entitled to
one
(1) vote for each share of voting stock registered in his name on the books
of
the Corporation, and the affirmative vote of a majority of voting shares
represented at a meeting and entitled to vote thereat shall be necessary for
the
adoption of a motion or for the determination of all questions and business
which shall come before the meeting.
2.6
PROXIES
At
any
shareholder meeting, shareholders may designate proxies in writing or by
electronic record pursuant to NRS 78.355.
2.7
SHAREHOLDER PROPOSALS
Shareholders
holding an aggregate of not less than ten percent (10%) of the voting power
of
the Company may propose agenda items to be included at the annual meeting of
the
Company’s shareholders. Such shareholder proposals must be submitted in writing
to the Secretary of the Company at least ninety (90) days in advance of the
next
annual meeting of shareholders of the Company.
ARTICLE
III
:
DIRECTORS
3.1
POWERS
Subject
to the limitation of the Articles of Incorporation, of the Bylaws and of the
Laws of the State of Nevada as to action to be authorized or approved by the
shareholders, all corporate powers shall be exercised by or under authority
of,
and the business and affairs of this Corporation shall be controlled by, a
Board
of at least one (1) Director.
3.2
ELECTION AND TENURE OF OFFICE
The
number of directors which shall constitute the whole board shall consist of
not
less than one (1) and not more than nine (9) directors as may be fixed from
time
to time by action of the Board of Directors. The Board of Directors may by
resolution determine that the Board be classified into classes of directors.
If
so classified, directors shall be assigned to each class in accordance with
a
resolution adopted by the Board of Directors and elected for terms as set by
the
Board subject to the provisions of NRS 78.330(2).
Directors
shall be elected at the annual meeting of shareholders during the year in which
their terms expire and, except as provided in Section 3.3 of this Article,
each
director elected shall hold office until his successor is elected and qualified.
Directors need not be shareholders. A Director need not be a resident of the
State of Nevada.
3.3
REMOVAL AND RESIGNATION
3.3.1
Any
Director may be removed by a shareholder vote representing not less than
two-thirds of the voting power as provided by NRS 78.335.
3.3.2
Any
Director may resign at any time by giving written notice to the Board of
Directors or to the President, or to the Secretary of the Corporation. Any
such
resignation shall take effect at the date of the receipt of such notice or
any
later time specified therein; and unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it
effective.
3.4
VACANCIES
Vacancies
in the Board of Directors may be filled by a majority of the remaining
Directors, and such action by less than a quorum or by a sole remaining Director
shall be adequate, and each Director so elected shall hold office until his
successor is elected at an annual meeting of shareholders or at a special
meeting called for that purpose. The shareholders may at any time elect a
Director to fill any vacancy not filled by the directors.
3.5
PLACE OF MEETINGS AND MEETINGS BY TELEPHONE
Meetings
of the Board of Directors may be held at any place within or without the State
of Nevada that has been designated by the Board of Directors. In the absence
of
such designation, meetings shall be held at the principal office of the
Corporation. Any meeting, regular or special, may be held by conference
telephone or similar communication equipment, and all such Directors shall
be
deemed to be present in person at the meeting, so long as all Directors
participating in the meeting can hear one another.
3.6
ANNUAL ORGANIZATIONAL MEETINGS
The
annual organizational meetings of the Board of Directors shall be held
immediately following the adjournment of the annual meetings of the
shareholders. No notice of such meetings need be given.
3.7
OTHER REGULAR MEETINGS
There
shall be no requirement for the Board of Directors to hold regular meetings,
other than the annual organizational meeting.
3.8
SPECIAL MEETINGS - NOTICES
3.8.1
Special
meetings of the Board of Directors for any purpose shall be called at any time
by the President or if the President is absent or unable or refuses to act,
by
any Vice President or by any two Directors.
3.8.2
Written
notice of the time and place of special meetings of the Board of Directors
shall
be delivered personally to each Director or sent to each Director by mail or
other form of written communication at least forty-eight (48) hours before
the
meeting. Notice of the time and place of holding an adjourned meeting need
not
be given to absent Directors if the time and place are fixed at the meeting
adjourned.
3.9
CONSENT TO DIRECTORS' MEETINGS AND ACTION WITHOUT MEETING
3.9.1
Any
meeting is valid wherever held by the written consent of all persons entitled
to
vote thereat, given either before or after the meeting.
3.9.2
The
transactions of any meetings of the Board of Directors, however called and
noticed or wherever held, shall be as valid as though had at a meeting duly
held
after regular call and notice if all the Directors are present, or if a quorum
is present and either before or after the meeting, each of the Directors not
present signs a written waiver of notice, a consent to the holding of the
meeting, or an approval of the minutes thereof.
3.9.3
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 shall individually or
collectively consent in writing to such action. Such action by written consent
shall have the same force and effect as a unanimous vote of the Board of
Directors.
3.9.4
All
such waivers, consents, or approvals shall be filed with the corporate records
or made part of the minutes of the meeting.
3.10
QUORUM AND VOTING RIGHTS
So
long
as the Board of Directors is composed of one or two Directors, one of the
authorized number of Directors constitutes a quorum for the transaction of
business. If there are three or more Directors, a majority thereof shall
constitute a quorum. Except as may be otherwise provided in the Corporation's
Articles of Incorporation, Bylaws or by the Laws of the State of Nevada, the
affirmative vote of a majority of Directors represented at a meeting and
entitled to vote thereat shall be necessary for the adoption of a motion or
resolution or for the determination of all questions and business which shall
come before the meeting.
3.11
COMPENSATION
Directors
may receive such reasonable compensation for their services as Directors and
such reimbursement for expenses incurred in attending meetings as may be fixed
from time to time by resolution of the Board of Directors. No such payment
shall
preclude a Director from serving in any other capacity and receiving
compensation therefor.
3.12
COMMITTEES
The
Board
of Directors may appoint and prescribe the duties of an executive committee
and
such other committees, as it may from time to time deem appropriate. Such
committees shall hold office at the pleasure of the Board.
ARTICLE
IV
:
OFFICERS
4.1
OFFICERS
The
Board
of Directors shall appoint a President, a Secretary and a Treasurer. The Board
of Directors, in their discretion, may also appoint a Chair of the Board, a
Chief Executive Officer, a Chief Financial Officer, one or more Vice Presidents
and such other officers and assistant officers as they shall from time to time
deem proper. Any two or more offices may be held by the same person. The Board
may choose not to fill any of the other officer positions for any
period.
4.2
APPOINTMENT AND TERM OF OFFICE
The
officers of the corporation shall be appointed by the Board of Directors at
the
organizational meeting of the Directors. If the appointment of officers shall
not be held at such meeting, such appointment shall be held as soon thereafter
as conveniently may be. Each officer shall hold office until a successor shall
have been duly appointed and qualified or until the officer's death or until
the
officer resigns or is removed in the manner hereinafter provided.
4.3
REMOVAL
Any
officer or agent appointed by the Board of Directors may be removed by the
Board
of Directors at any time with or without cause, but such removal shall be
without prejudice to the contract rights, if any, of the person so
removed.
4.4
VACANCIES
A
vacancy
in any office because of death, resignation, removal, disqualification, or
otherwise, may be filled by the Board of Directors.
4.5
CHAIR OF THE BOARD
The
Chair
of the Board, if there be such an office, shall, if present, preside at all
meetings of the Board of Directors and meetings of the shareholders, and
exercise and perform such other powers and duties as may be from time to time
assigned to the Chair by the Board of Directors. In the event that there is
no
Chair of the Board designated or present, the Secretary of the Board of
Directors shall preside over the meeting, or if there is no Secretary of the
Board of Directors designated or present at the meeting, the Directors present
at any meeting of the Board of Directors shall designate a Director of their
choosing to serve as temporary chair to preside over the meeting.
4.6
CHIEF EXECUTIVE OFFICER
Subject
to the control of the Board of Directors and such supervisory powers, if any,
as
may be given by the Board of Directors to another person or persons, the powers
and duties of the Chief Executive Officer shall be:
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a.
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To
act as the general manager and, subject to the control of the Board
of
Directors, to have general supervision, direction and control of
the
business and affairs of the Corporation;
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b.
|
To
see that all orders and resolutions of the Board of Directors are
carried
into effect; and
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c.
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To
affix the signature of the Corporation to all deeds, conveyances,
mortgages, guarantees, leases, obligations, bonds, certificates and
other
papers and instruments in writing which have been authorized by the
Board
of Directors or which, in the judgment of the Chief Executive Officer,
should be executed on behalf of the Corporation; to sign certificates
for
the Corporation's shares; and, subject to the direction of the Board
of
Directors, to have general charge of the property of the Corporation
and
to supervise and control all officers, agents and employees of the
Corporation.
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4.7
CHIEF FINANCIAL OFFICER OR TREASURER
Subject
to the control of the Board of Directors and such supervisory powers, if any,
as
may be given by the Board of Directors to another person or persons, the powers
and duties of the Chief Financial Officer or Treasurer shall be:
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a.
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To
keep accurate financial records for the Corporation;
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b.
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To
deposit all money, drafts and checks in the name of and to the credit
of
the Corporation in the banks and depositories designated by the Board
of
Directors;
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c.
|
To
endorse for deposit all notes, checks, drafts received by the Corporation
as ordered by the Board of Directors, making proper vouchers therefor;
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d.
|
To
disburse corporate funds and issue checks and drafts in the name
of the
Corporation, as ordered by the Board of Directors;
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e.
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To
render to the Chief Executive Officer and the Board of Directors,
whenever
requested, an account of all transactions by the Chief Financial
Officer
and the financial condition of the Corporation; and
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f.
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To
perform all other duties prescribed by the Board of Directors or
the Chief
Executive Officer.
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4.8
PRESIDENT
Unless
otherwise determined by the Board of Directors, the President shall be the
Chief
Executive Officer of the Corporation. If an officer other than the President
is
designated as the Chief Executive Officer, the President shall perform such
duties as may from time to time be assigned by the Board of Directors. The
President shall have the duty to call meetings of the shareholders or Board
of
Directors, as set forth in Section 3.8.1, above, to be held at such times and,
subject to the limitations prescribed by law or by these Bylaws, at such places
as the President shall deem proper.
4.9
VICE PRESIDENTS
In
the
absence of the President or in the event of the President's death, inability
or
refusal to act, the Vice President (or in the event there shall be more than
one
Vice President, the Vice Presidents in the order designated at the time of
their
appointment, or in the absence of any designation then in the order of their
appointment) shall perform the duties of the President, and when so acting
shall
have all the powers of and be subject to all the restrictions upon the
President; and shall perform such other duties as from time to time may be
assigned to the Vice President by the President or by the Board of Directors.
In
the event there are no Vice Presidents, the Board of Directors may designate
a
member of the Board of Directors or another officer of the Corporation to serve
in such capacity until a new President is appointed.
4.10
SECRETARY
The
Secretary shall: (a) prepare and maintain the minutes and records of the
shareholders' and Board of Directors' meetings, keep them in one or more books
provided for that purpose and certify such proceedings as necessary;
(b) authenticate such records of the Corporation as shall from time to time
be required; (c) see that all notices are duly given in accordance with the
provisions of these Bylaws or as required by law; (d) be custodian of the
corporate records and of the corporate seal, if any, and see that the seal
of
the Corporation, if any, is affixed to all documents the execution of which
on
behalf of the Corporation under its seal is duly authorized; (e) keep a register
of the post office address of each shareholder; (f) if requested, sign with
the
President certificates for shares of the Corporation, the issuance of which
shall have been authorized by resolution of the Board of Directors; (g) have
general charge of the stock transfer books of the Corporation; and (h) in
general perform all duties incident to the office of Secretary and such other
duties as from time to time may be assigned to the Secretary by the Chief
Executive Officer or the Board of Directors.
4.11
DELEGATION OF AUTHORITY
The
Board
of Directors may from time to time delegate the powers of any officer to any
other officer or agent, notwithstanding any provision hereof, except as may
be
prohibited by law.
4.12
COMPENSATION
Officers
shall be awarded such reasonable compensation for their services and provisions
made for their expenses incurred in attending to and promoting the business
of
the Corporation as may be fixed from time to time by resolution of the Board
of
Directors.
ARTICLE
V
:
RECORDS
AND REPORTS - INSPECTION
5.1
INSPECTION OF BOOKS AND RECORDS
All
books
and records provided for by Nevada Revised Statutes shall be open to inspection
of the directors and shareholders to the extent provided by such statutes.
5.2
CERTIFICATION AND INSPECTION OF BYLAWS
The
original or a copy of these Bylaws, as amended or otherwise altered to date,
certified by the Secretary, shall be open to inspection by the shareholders
of
the Corporation in the manner provided by law.
5.3
CHECKS, DRAFTS, ETC.
All
checks, drafts or 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 as shall be
determined from time to time by resolution of the Board of
Directors.
5.4
ANNUAL REPORT
No
annual
report to shareholders shall be required; but the Board of Directors may cause
to be sent to the shareholders annual or other reports in such form as may
be
deemed appropriate by the Board of Directors.
ARTICLE
VI
:
AMENDMENTS
TO BYLAWS
New
Bylaws may be adopted or these Bylaws may be repealed or amended by a vote
or
the written assent of a majority of the Directors of the Corporation.
ARTICLE
VII
:
CORPORATE
SEAL
This
Corporation shall have the power to adopt and use a common seal or stamp, and
to
alter the same, at the pleasure of the Board of Directors. The use or nonuse
of
a seal or stamp, whether or not adopted, shall not be necessary to, nor shall
it
in any way effect, the legality, validity or enforceability of any corporate
action or document.
ARTICLE
VIII
:
CERTIFICATES
OF STOCK
8.1
FORM
Certificates
for shares shall be of such form and device as the Board of Directors may
designate and shall state the name of the record holder of the shares
represented thereby, its number; date of issuance; the number of shares for
which it is issued; a statement of the rights, privileges, preferences and
restrictions, if any; and statement of liens or restrictions upon transfer
or
voting, if any; and, if the shares be assessable, or, if assessments are
collectible by personal action, a plain statement of such facts.
8.2
EXECUTION
Every
certificate for shares must be signed by the President or the Secretary or
must
be authenticated by facsimile of the signature of the President or Secretary.
Before it becomes effective, every certificate for shares authenticated by
a
facsimile of a signature must be countersigned by the Corporation’s transfer
agent or registrar of transfers.
8.3
TRANSFER
Upon
surrender to the Secretary or transfer agent of the Corporation of a certificate
for shares duly endorsed or accompanied by a proper evidence of succession,
assignment or authority to transfer, it shall be the duty of the Corporation
to
issue a new certificate to the person entitled thereto, cancel the old
certificate, and record the transaction upon its books.
8.4
LOST OR DESTROYED CERTIFICATES
Any
person claiming a certificate of stock to be lost or destroyed shall make an
affidavit or affirmation of that fact in such manner as the Board of Directors
may require and shall, if the Directors so require, give the Corporation a
bond
of indemnity, in form and with one or more sureties satisfactory to the Board,
whereupon a replacement certificate may be issued.
8.5
TRANSFER AGENTS AND REGISTRARS
The
Board
of Directors may appoint one or more transfer agents or transfer clerks, and
one
or more registrars at such times and places as the requirements of the
Corporation may necessitate and the Board of Directors may
designate.
8.6
CLOSING STOCK TRANSFER BOOKS
The
Board
of Directors may close the transfer books in their discretion for a period
not
exceeding the sixty (60) days preceding any meeting, annual or special, of
the
shareholders, or the date appointed for the payment of a dividend.
ARTICLE
IX:
INDEMNIFICATION
(a)
The
Corporation shall indemnify any person who was or is a party or is threatened
to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, except
an
action by or in the right of the Corporation, by reason of the fact that such
person is or was a director, officer, employee or agent of the Corporation,
or
is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or
other enterprise, against expenses, including attorneys’ fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with the action, suit or proceeding, in each case to the fullest
extent permissible under NRS 78.7502 and NRS 78.751, as amended from time to
time, or the indemnification provisions of any successor statutes, if such
person acted in good faith and in a manner which such person reasonably believed
to be in or not opposed to the best interests of the Corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
such conduct was unlawful. The termination of any action, suit or 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 which such person reasonably believed to
be in
or not opposed to the best interests of the Corporation, or that, with respect
to any criminal action or proceeding, such person had reasonable cause to
believe that such conduct was unlawful.
(b)
The
Corporation shall indemnify any person who was or is a party or is threatened
to
be made a party to any threatened, pending or completed action or suit by or
in
the right of the Corporation to procure a judgment in its favor by reason of
the
fact that such person is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid
in
settlement and attorneys’ fees actually and reasonably incurred by such person
in connection with the defense or settlement of the action or suit if such
person acted in good faith and in a manner which such person reasonably believed
to be in or not opposed to the best interests of the Corporation, provided
that
no indemnification shall be made with respect to any claim, issue or matter
as
to which such a person has been adjudged by a court of competent jurisdiction,
after exhaustion of all appeals therefrom, to be liable to the Corporation
or
for amounts paid in settlement to the Corporation, unless and only to the extent
that the court in which the action or suit was brought or other court of
competent jurisdiction determines upon application that in view of all the
circumstances of the case, the person is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper.
(c)
To
the
extent that a director, officer, employee or agent of the Corporation has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in subsections (a) and (b), or in defense of any claim,
issue or matter therein, the Corporation shall indemnify such person against
expenses, including attorneys’ fees, actually and reasonably incurred by such
person in connection with the defense.
(e)
Expenses
of officers and directors incurred in defending a civil or criminal action,
suit
or proceeding described in subsections (a) and (b) shall be paid by the
Corporation as they are incurred and in advance of the final disposition of
the
action, suit or proceeding, upon receipt of an undertaking by or on behalf
of
the director or officer to repay the amount if it is ultimately determined
by a
court of competent jurisdiction that he is not entitled to be indemnified by
the
Corporation. The provisions of this subsection do not affect any rights to
advancement of expenses to which corporate personnel other than directors or
officers may be entitled under any contract or otherwise by law.
(f)
The
indemnification pursuant to subsections (a) and (b) and advancement of expenses
authorized in or ordered by a court pursuant to this section (i) do not exclude
any other rights to which a person seeking indemnification or advancement of
expenses may be entitled under the Articles of Incorporation or any bylaw,
agreement, vote of shareholders or disinterested directors or otherwise, for
either an action in such person’s official capacity or an action in another
capacity while holding office, except that indemnification, unless ordered
by a
court for the advancement of expenses made pursuant to subsection (b) may not
be
made to or on behalf of any director or officer if a final adjudication
establishes that such person’s acts or omissions involved intentional
misconduct, fraud or a knowing violation of the law and was material to the
cause of action; and (ii) continue for a person who has ceased to be a director,
officer, employee or agent and inures to the benefit of the heirs, executors
and
administrators of such a person.
(g)
The
Corporation may purchase and maintain insurance or make other financial
arrangements on behalf of any person who is or was a director, officer, employee
or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise for any liability asserted
against such person and liability and expenses incurred by such person in his
or
her capacity as a director, officer, employee or agent, or arising out of his
status as such, whether or not the Corporation has the authority to indemnify
such person against such liability and expenses.
(h)
The
other
financial arrangements made by the Corporation pursuant to subsection (g) may
include the following: (i) The creation of a trust fund; (ii) The establishment
of a program of self-insurance; (iii) The securing of its obligation of
indemnification by granting a security interest or other lien on any assets
of
the Corporation; (iv) The establishment of a letter of credit, guaranty or
surety.
(i)
No
financial arrangement made pursuant to subsections (g) or (h) may provide
protection for a person adjudged by a court of competent jurisdiction, after
exhaustion of all appeals therefrom, to be liable for intentional misconduct,
fraud or a knowing violation of law, except with respect to the advancement
of
expenses or indemnification ordered by a court.
(j)
Any
insurance or other financial arrangement made on behalf of a person pursuant
to
subsection (g) or (h) may be provided by the Corporation or any other person
approved by the Board of Directors, even if all or part of the other person’s
stock or other securities is owned by the Corporation.
(k)
In
the
absence of fraud: (i) The decision of the Board of Directors as to the propriety
of the terms and conditions of any insurance or other financial arrangement
made
pursuant to subsection (g) or (h) and the choice of the person to provide the
insurance or other financial arrangement is conclusive; and (ii) The insurance
or other financial arrangement: (1) Is not void or voidable; and (2) does not
subject any director approving it to personal liability for such action even
if
a director approving the insurance or other financial arrangement is a
beneficiary of the insurance or other financial arrangement.
(l)
Any
repeal or modification
of this
Article IX shall not impair or otherwise affect any rights, or obligations
then
existing with respect to any state of facts then or theretofore existing or
any
action, suit or proceeding theretofore or thereafter brought based in whole
or
in part upon any such state of facts.
(m)
This
Article IX shall be liberally construed in favor of indemnification and the
payment of expenses incurred in connection with a proceeding in advance of
its
final disposition and there shall be a rebuttable presumption that a claimant
under this Article IX is entitled to such indemnification and the Corporation
shall bear the burden of proving by a preponderance of the evidence that such
claimant is not so entitled to indemnification.
(n)
Any
finding that a person asserting a claim for indemnification pursuant to this
Article IX is not entitled to such indemnification, and any information which
may support such finding, shall be held in confidence to the extent permitted
by
law and shall not be disclosed to any third party.
(o)
If
any
provision of this Article IX shall be deemed invalid or unenforceable, the
Corporation shall remain obligated to indemnification and advance expenses
subject to all those provisions of this Article IX which are not invalid or
unenforceable.
EXHIBIT
10.1
SUBSCRIPTION
AGREEMENT
THIS
SUBSCRIPTION AGREEMENT (“Agreement”) made as of this __ day of ___________,
2008, by and among Title Starts Online, Inc., a Nevada corporation (the
“Company”), and the undersigned subscriber of securities of the Company (the
“Subscriber”).
WHEREAS,
the Company intends to obtain subscriptions for the purchase and sale, in an
offering registered under the Securities Act of 1933, as amended (the “Act”), on
Form SB-2 (the “Registration Statement”) filed with the Securities and Exchange
Commission (the “Offering”), consisting of a minimum of 200,000 and a maximum of
900,000 shares of the Company’s common stock, par value .001 (the “Shares”), on
the terms and conditions as set forth in the prospectus (the “Prospectus”) which
is a part of the Company’s Registration Statement, and the Subscriber desires to
acquire that number of Shares set forth on the signature page hereof. This
Agreement incorporates terms as defined by Title Starts Online, Inc.'s
Registration Statement.
NOW,
THEREFORE, for and in consideration of the promises and the mutual covenants
hereinafter set forth, the parties hereto do hereby agree as
follows:
1.
Subscription
Procedure
1.1
Subject
to the terms and conditions set forth herein and in the Registration Statement,
the Subscriber hereby subscribes for and agrees to purchase from the Company
such number of Shares as is set forth upon the signature page hereof at a price
of $0.25 per Share (the “Purchase Price”). The Company agrees to sell such
Shares to the Subscriber for the Purchase Price.
1.2
The
subscription period will begin as of the date the Registration Statement is
declared effective by the Securities and Exchange Commission (“SEC”) and will
terminate at 5:00 PM Local Time on June 30, 2008, unless terminated earlier
or
extended by the Company for up to an additional 30 days (the “Offering Period”).
The Shares will be offered on a minimum/maximum basis as more particularly
set
forth in the Registration Statement. The minimum dollar amount of Shares that
may be purchased by the Subscriber is $1,250 unless the Company elects to waive
the requirement. The consummation of the Offering is subject to the satisfaction
of the closing conditions set forth in Section 5 of this Agreement.
1.3
The
Purchase Price will be placed in escrow pursuant to an escrow agreement by
and
between Company and its escrow agent (the “Escrow Agreement”), and shall be paid
over to the Company at the closing of the purchase of the Shares in the Offering
pursuant to this Agreement (the “Closing”).
1.4
The
certificates for the Common Stock bearing the name of the Subscriber will be
delivered by the Company no later than twenty (20) days following the Closing
of
the Offering. The Subscriber hereby authorizes and directs the Company to
deliver the Shares to be issued to the Subscriber pursuant to this Agreement
and
delivered to the residential or business address indicated on the signature
page
hereof.
1.5
This
executed Subscription Agreement shall be forwarded to:
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Carol
McMahan
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Synergy
Law Group, LLC
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730
West Randolph Street
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Suite
600
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Chicago,
IL 60661
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1.6
The
Purchase Price for the Shares purchased hereunder shall be paid by check or
wire
transfer (instructions available upon request) to Title Starts Online,
Inc.
1.7
The
Company may, in its sole discretion, reject any subscription, in whole or in
part, or terminate or withdraw the Offering in its entirety at any time prior
to
Closing.
2.
Representations
and Covenants of Subscriber
.
2.1
The
Subscriber recognizes that the purchase of Shares involves a high degree of
risk
in that (i) the Company will likely need additional capital but has no assurance
of additional necessary capital; (ii) an investment in the Company is highly
speculative and only investors who can afford the loss of their entire
investment should consider investing in the Company and the Shares; (iii) an
investor may not be able to liquidate his or her investment; (iv) there is
currently no market for the Shares; (v) an investor could sustain the loss
of
his or her entire investment; and (vi) the Company is and will be subject to
numerous other risks and uncertainties, including without limitation,
significant and material risks relating to the Company’s business, and the
industries and markets in which the Company will compete, as well as risks
associated with the Offering, and the other transactions contemplated herein,
in
the Registration Statement, all as more fully set forth herein and in the
Registration Statement.
2.2
The
Subscriber represents that he or she is able to bear the economic risk of an
investment in the Shares.
2.3
The
Subscriber acknowledges that he or she has reviewed all of the documents
furnished or made available by the Company to evaluate the merits and risks
of
such an investment and that he or she recognizes the highly speculative nature
of this investment.
2.4
The
Subscriber acknowledges receipt and careful review of the Prospectus, this
Agreement, and any other exhibits or attachments hereto and thereto
(collectively, the “Offering Documents”) and hereby represents that he or she
has been furnished or given access by the Company during the course of this
Offering with or to all information regarding the Company and its respective
financial condition and results of operations which he or she had requested
or
desired to know; that all documents which could be reasonably provided have
been
made available for his or her inspection and review; that he or she has been
afforded the opportunity to ask questions of and receive answers from duly
authorized representatives of the Company concerning the terms and conditions
of
the Offering, and any additional information which he or she had requested.
2.5
The
Subscriber acknowledges that this Offering of Shares may involve tax
consequences, and that the contents of the Offering Documents do not contain
tax
advice or information. The Subscriber acknowledges that he or she must retain
his or her own professional advisors to evaluate the tax and other consequences
of an investment in the Shares.
2.6
The
Subscriber acknowledges that neither the SEC nor any state securities commission
has approved or disapproved of the Shares or passed upon the accuracy or
adequacy of the Prospectus.
2.7
The
Subscriber understands that the Company will review this Agreement, and the
Company reserves the unrestricted right to reject or limit any subscription
and
to close the offer at any time.
2.8
The
Subscriber hereby represents that the address of the Subscriber furnished on
the
signature page of this Agreement is the undersigned's principal residence if
he
or she is an individual or its principal business address if it is a corporation
or other entity.
2.9
The
Subscriber hereby represents that, except as set forth in the Offering
Documents, no representations or warranties have been made to the Subscriber
by
the Company or its agents, employees or affiliates and in entering into this
transaction, the Subscriber is not relying on any information, other than that
contained in the Offering Documents and the results of independent investigation
by the Subscriber.
2.10
If
the
undersigned Subscriber is a partnership, corporation, trust or other entity,
such partnership, corporation, trust or other entity further represents and
warrants that: (i) it is authorized and otherwise duly qualified to purchase
and
hold the Shares; and (ii) that this Agreement has been duly and validly
authorized, executed and delivered and constitutes the legal, binding and
enforceable obligation of the undersigned.
2.11
If
the
Subscriber is not a United States person, such Subscriber hereby represents
that
it has satisfied itself as to the full observance of the laws of its
jurisdiction in connection with any invitation to subscribe for the Shares
or
any use of this Agreement, including (i) the legal requirements within its
jurisdiction for the purchase of the Shares, (ii) any foreign exchange
restrictions applicable to such purchase, (iii) any governmental or other
consents that may need to be obtained, and (iv) the income tax and other tax
consequences, if any, that may be relevant to the purchase, holding, redemption,
sale or transfer of the Shares. Such Subscriber's subscription and payment
for,
and his or her or her continued beneficial ownership of the Shares, will not
violate any applicable securities or other laws of the Subscriber's
jurisdiction.
3.
Representations
by the Company
.
Except
as
set forth in the Registration Statement or any other items provided to
Subscriber, the Company represents and warrants to the Subscriber that:
3.1
Organization
and Authority
.
The
Company, and its respective subsidiaries, if any (i) is a corporation validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as presently
conducted, and (iii) has all requisite corporate power and authority to execute,
deliver and perform their obligations under this Agreement and the Offering
Documents being executed and delivered by it in connection herewith, and to
consummate the transactions contemplated hereby and thereby.
3.2
Qualifications
.
The
Company, and each of its respective subsidiaries, if any, is duly qualified
to
do business as a foreign corporation and is in good standing in all
jurisdictions where such qualification is necessary and where failure to so
qualify could have a material adverse effect on the business, properties,
operations, condition (financial or other), results of operations or prospects
of the Company and its subsidiaries, taken as a whole or has the affect of
preventing the Company from performing any of its duties or obligations under
this Agreement. (a “Material Adverse Effect”).
3.3
Corporate
Authorization
.
The
Offering Documents have been duly and validly authorized by the Company. This
Agreement, assuming due execution and delivery by the Subscriber, when the
Subscription Agreement is executed and delivered by the Company, will be, valid
and binding obligations of the Company, enforceable in accordance with their
respective terms, except as the enforceability hereof and thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
now
or hereafter in effect relating to or affecting creditors’ rights generally and
general principles of equity, regardless of whether enforcement is considered
in
a proceeding in equity or at law.
3.4
Non-Contravention
.
The
execution and delivery of the Offering Documents by the Company, the issuance
of
the Shares as contemplated by the Offering Documents, with or without the giving
of notice or the lapse of time, or both, will not (i) result in any violation
of
any provision of the articles of incorporation or by-laws or similar instruments
of the Company or its respective subsidiaries, (ii) conflict with or result
in a
breach by the Company or its respective subsidiaries of any of the terms or
provisions of, or constitute a default under, or result in the modification
of,
or result in the creation or imposition of any lien, security interest, charge
or encumbrance upon any of the properties or assets of the Company or its
respective subsidiaries, pursuant to any agreements, instruments or documents
or
any indenture, mortgage, deed of trust or other agreement or instrument to
which
Company or any of its subsidiaries is a party or by which Company or any of
its
subsidiaries or any of its properties or assets are bound or affected, in any
such case which would have a material adverse effect on the business,
properties, operations, condition (financial or other), results of operations
or
prospects of the Company and its respective subsidiaries, taken as a whole,
or
the validity or enforceability of, or the ability of the Company to perform
their obligations under, the Offering Documents, (iii) violate or contravene
any
applicable law, rule or regulation or any applicable decree, judgment or order
of any court, United States federal or state regulatory body, administrative
agency or other governmental body having jurisdiction over Company or any of
its
subsidiaries or any of its respective properties or assets that would, except
with respect to violations of federal and state securities laws, have a Material
Adverse Effect, or the validity or enforceability of, or the ability of the
Company to perform its obligations under, the Offering Documents, (iv) have
any
material adverse effect on any permit, certification, registration, approval,
consent, license or franchise necessary for the Company or its subsidiaries
to
own or lease and operate any of its properties and to conduct any of its
business or the ability of the Company or its subsidiaries to make use thereof
or (v) except for applicable requirements of federal securities laws and state
securities or blue-sky laws, requiring filing with, or permit, authorization,
consent or approval of, any third party, public body or
authority.
3.5
Information
Provided
.
The
Company hereby represents and warrants to the Subscriber that the information
set forth in the Prospectus and any other document provided by the Company
(or
the Company’s authorized representatives) to the Subscriber in connection with
the transactions contemplated by this Agreement, does not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they are made, not misleading.
3.6
Events
Subsequent
.
Other
than in the ordinary course of the Company’s business, the Company has disclosed
to the Subscriber:
(a)
Any
sale,
lease, transfer, license or assignment of any assets, tangible or intangible,
of
the Company;
(b)
Any
damage, destruction or property loss, whether or not covered by insurance,
affecting adversely the properties or business of the Company;
(c)
Any
declaration or setting aside or payment of any dividend or distribution with
respect to the shares of capital stock of the Company or any redemption,
purchase or other acquisition of any such shares;
(d)
Any
subjection to any lien on any of the assets, tangible or intangible, of the
Company other than in the ordinary course of business;
(e)
Any
incurrence of indebtedness or liability or assumption of obligations by the
Company other than in the ordinary course of business;
(f)
Any
waiver or release by the Company of any right of any material
value;
(g)
Any
compensation or benefits paid to officers or directors of the
Company;
(h)
Any
change made or authorized in the articles of incorporation or bylaws of the
Company, except standard corporate minutes pertaining to this transaction and
other items approved in the ordinary course of business
;
(i)
Any
loan
to or other transaction with any officer, director or stockholder of the Company
giving rise to any claim or right of the Company against any such person or
of
such person against the Company; or
(j)
Any
material adverse change in the condition (financial or otherwise) of the
respective properties, assets, liabilities or business of the Company;
or
(k)
Any
agreement, written or otherwise, to take any of the foregoing
actions.
3.7
Compliance
with Law
.
Neither
the Company nor any of its respective subsidiaries is in violation of or has
any
liability under any statute, law, rule, regulation, ordinance, decision or
order
of any governmental agency or body or any court, domestic or foreign, except
where such violation or liability would not individually or in the aggregate
have a Material Adverse Effect and to the knowledge of the Company there is
no
pending investigation that would reasonably be expected to lead to such a
claim.
3.8
Consents
.
The
Company has all necessary consents, approvals, authorizations, orders,
registrations, qualifications, licenses, filings and permits of, with and from
all applicable judicial, regulatory and other legal or governmental agencies
and
bodies and all third parties, foreign and domestic (collectively, the
“Consents”), to own, lease and operate their respective properties and conduct
their respective businesses as are now being conducted and as disclosed in
the
Prospectus, except where the failure to have any such Consent would not have
a
Material Adverse Effect. Each such Consent is valid and in full force and
effect, and the Company has not received written notice of any investigation
or
proceedings which results in or, if decided adversely to the Company, could
reasonably be expected to result in, the revocation of, or imposition of a
materially burdensome restriction on, any Consent.
3.9
Intellectual
Property
.
The
Company does not have any knowledge of any claim that, or inquiry as to whether,
any product, activity or operation of the Company infringes upon or involves,
or
has resulted in the infringement of, any trademarks, trade-names, service marks,
patents, copyrights or other proprietary rights of any other person, corporation
or other entity; and no such proceedings have been instituted, are pending
or
are threatened against the Company. The Company: (i) owns or possesses all
rights to use, option and/or license, as the case may be, all patents, patent
applications, provisional patents, trademarks, service marks, trade names,
trademark registrations, service mark registrations, copyrights, licenses,
formulae, mask works, customer lists, internet domain names, know-how and other
intellectual property (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures,
“Intellectual Property”) necessary for the conduct of their respective
businesses as being conducted and as described in the Offering Memorandum and
(ii) does not believe that the conduct of their respective businesses does
or
will conflict with, and have not received any notice of any claim of conflict
with, any such right of others, which conflict would have a Material Adverse
Effect. All Intellectual Property developed by and belonging to Company
(including, without limitation, that which is developed by consultants to
Company which has not been patented has been kept confidential so as, among
other things, all such information may be deemed proprietary to Company. To
Company’s knowledge, there is no infringement by third parties of any
Intellectual Property. There are no pending or, to Company’s knowledge,
threatened actions, suits, proceedings or claims by others challenging Company’s
rights in or to any Intellectual Property, and there are no facts which would
form a reasonable basis for any such claim. There is no pending or, to Company’s
knowledge, threatened action, suit, proceeding or claim by others that Company
infringes or otherwise violates any Intellectual Property rights of others,
in
each case which would be reasonably likely to have a Material Adverse Effect,
and Company is not aware of any other fact which would form a reasonable basis
for any such claim.
3.10
Legal
Compliance
.
To the
best knowledge of the Company, after due investigation, no claim has been filed
against the Company alleging a violation of any applicable laws or regulations
of foreign, federal, state and local governments and all agencies thereof.
The
Company holds all of the material permits, licenses, certificates or other
authorizations of foreign, federal, state or local governmental agencies
required for its respective business as presently conducted.
3.11
No
SEC
or NASD Inquiries
.
The
Company and none of its past or present officers or directors are, or has ever
been, the subject of any formal or informal inquiry or investigation by the
SEC
or NASD.
3.12
Disclosure
.
The
representations and warranties and statements of fact made by the Company in
this Agreement are, as applicable, accurate, correct and complete and do not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements and information contained herein
not false or misleading. The Company is and, at all times up to and including
consummation of the transactions contemplated by this Agreement, and after
giving effect to application of the net proceeds of the Offering, will not
be,
subject to registration as an “investment company” under the Investment Company
Act of 1940, as amended (the “1940 Act”), and is not and will not be an entity
“controlled” by an “investment company” within the meaning of the 1940 Act. The
Company will: (i) utilize the proceeds of the Offering in accordance with the
“Use of Proceeds” section of the Prospectus and (ii) initially utilize the
proceeds of the Offering in such a manner so as to cause Company not to be
subject to the 1940 Act, and will thereafter use its best efforts to avoid
Company becoming subject to the 1940 Act.
3.13
Securities
Law Compliance
.
Subject
to the accuracy and completeness of the representations and warranties of the
Subscriber contained in this Agreement, the Company has complied and will comply
with all applicable federal and state securities laws in connection with the
offer, issuance and sale of the Shares hereunder.
4.
Covenants of the Company
. The Company covenants with the Subscriber as
follows, which covenants are for the benefit of the Subscriber and its, his
or
her permitted assignees.
4.1
Securities
Compliance
.
The
Company shall take all necessary action as may be required or permitted by
applicable law, rule and regulation, for the legal and valid issuance of the
Shares to the Subscriber, or their respective subsequent holders.
4.2
Compliance
with Laws
.
The
Company shall comply, and cause each Subsidiary to comply, with all applicable
laws, rules, regulations and orders, noncompliance with which would be
reasonably likely to have a Material Adverse Effect.
4.3
Keeping
of Records and Books of Account
.
The
Company shall keep and cause each Subsidiary to keep adequate records and books
of account, in which complete entries will be made in accordance with GAAP
consistently applied, reflecting all financial transactions of the Company
and
its Subsidiaries.
4.4
Other
Agreements
.
The
Company shall not enter into any agreement in which the terms of such agreement
would restrict or impair the right or ability of the Company or any Subsidiary
to perform its obligations under any Offering Documents.
4.5
Use
of
Proceeds
.
The
Company will use the net proceeds from the sale of the Shares for the purposes
set forth in the Prospectus under the section titled “Use of
Proceeds”.
5.
Closing
Conditions
5.1
Conditions
Precedent to the Obligation of the Company to Close and to Sell the
Shares
.
The
obligation hereunder of the Company to close and issue and sell the Shares
to
the Subscriber at the Closing Date is subject to the satisfaction or waiver,
at
or before the Closing of the conditions set forth below. These conditions are
for the Company's sole benefit and may be waived by the Company at any time
in
its sole discretion.
(a)
Accuracy
of the Subscriber’s Representations and Warranties
.
The
representations and warranties of the Subscriber shall be true and correct
in
all material respects as of the date when made and as of the Closing Date as
though made at that time, except for representations and warranties that are
expressly made as of a particular date, which shall be true and correct in
all
material respects as of such date.
(b)
Performance
by the Subscriber
.
The
Subscriber shall have performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by this Agreement to
be
performed, satisfied or complied with by the Subscriber at or prior to the
Closing Date.
(c)
No
Injunction
.
No
statute, rule, regulation, executive order, decree, ruling or injunction shall
have been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction which prohibits the consummation of any
of
the transactions contemplated by this Agreement.
(d)
Delivery
of Purchase Price
.
The
Subscriber shall have delivered to the Company the purchase price for the Shares
to be purchased by the Subscriber.
(e)
Delivery
of this Agreement
.
This
Agreement has been duly executed and delivered by the Subscriber.
5.2
Conditions
Precedent to the Obligation of the Subscriber to Close and to Purchase the
Shares
.
The
obligation hereunder of the Subscriber to purchase the Shares and consummate
the
transactions contemplated by this Agreement is subject to the satisfaction
or
waiver, at or before the Closing Date, of each of the conditions set forth
below. These conditions are for the Subscriber’s sole benefit and may be waived
by the Subscriber at any time in its sole discretion.
(a)
Accuracy
of the Company's Representations and Warranties
.
Each of
the representations and warranties of the Company in this Agreement shall be
true and correct in all respects as of the Closing Date, except for
representations and warranties that speak as of a particular date, which shall
be true and correct in all material respects as of such date.
(b)
Performance
by the Company
.
The
Company shall have performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by this Agreement to
be
performed, satisfied or complied with by the Company at or prior to the Closing
Date.
(c)
No
Injunction
.
No
statute, rule, regulation, executive order, decree, ruling or injunction shall
have been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction which prohibits the consummation of any
of
the transactions contemplated by this Agreement.
(d)
No
Proceedings or Litigation
.
No
action, suit or proceeding before any arbitrator or any governmental authority
shall have been commenced, and no investigation by any governmental authority
shall have been threatened, against the Company or any Subsidiary, or any of
the
officers, directors or affiliates of the Company or any Subsidiary seeking
to
restrain, prevent or change the transactions contemplated by this Agreement,
or
seeking damages in connection with such transactions.
(e)
Shares
.
Within
a reasonable period of time after the Closing the Company shall deliver to
the
Subscriber certificates representing the Shares (in such denominations as the
Subscriber may request).
(f)
Material
Adverse Effect
.
No
Material Adverse Effect shall have occurred at or before the Closing
Date.
(g)
Minimum
Investment Amount.
Pursuant
to the Prospectus, the Company shall have in escrow the at least $50,000.
6.
Miscellaneous
.
6.1
Any
notice or other communication given hereunder shall be deemed sufficient if
in
writing and sent by registered or certified mail, return receipt requested,
addressed to the Company at Title Starts Online, Inc., 7007 College Boulevard,
Suite 270, Overland Park, KS 66211, Attention: Mark DeFoor, Chief Executive
Officer, with a copy to (which shall not constitute notice) Synergy Law Group,
L.L.C., 730 West Randolph, Suite 600, Chicago, Illinois 60661, Attention: Bartly
Loethen, Esq., and to the Subscriber at the address indicated on the signature
page of this Agreement. Notices shall be deemed to have been given three (3)
business days after the date of mailing, except notices of change of address,
which shall be deemed to have been given when received.
6.2
This
Agreement may be amended through a written instrument signed by the Subscriber
and the Company; provided, however, that the terms of Section 4 of this
Agreement may be amended without the consent or approval of the Subscriber
so
long as such amendment applies in the same fashion to the subscription
agreements of all of the other subscribers for Shares in the Offering
6.3
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and to their respective heirs, legal representatives, successors and assigns.
This Agreement sets forth the entire agreement and understanding between the
parties as to the subject matter hereof and merges and supersedes all prior
discussions, agreements and understandings of any and every nature among
them.
6.4
Notwithstanding
the place where this Agreement may be executed by any of the parties hereto,
the
parties expressly agree that all the terms and provisions hereof shall be
construed in accordance with and governed by the laws of the State of
Nevada.
6.5
This
Agreement may be executed in counterparts. It shall not be binding upon the
Company unless and until it is accepted by the Company. Upon the execution
and
delivery of this Agreement by the Subscriber, this Agreement shall become a
binding obligation of the Subscriber with respect to the purchase of Shares
as
herein provided; subject, however, to the right hereby reserved to the Company
to enter into the same agreements with other subscribers and to add and/or
to
delete other persons as subscribers.
6.6
The
holding of any provision of this Agreement to be invalid or unenforceable by
a
court of competent jurisdiction shall not affect any other provision of this
Agreement, which shall remain in full force and effect.
6.7
It
is
agreed that a waiver by either party of a breach of any provision of this
Agreement shall not operate, or be construed, as a waiver of any subsequent
breach by that same party.
6.8
The
parties agree to execute and deliver all such further documents, agreements
and
instruments and take such other and further action as may be necessary or
appropriate to carry out the purposes and intent of this Agreement.
6.9
Specific
Performance. The Company and the Subscriber acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement or the other Offering Documents are not performed in accordance with
their specific terms or are otherwise breached. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to prevent or
cure
breaches of the provisions of this Agreement or the other Offering Documents
and
to enforce specifically the terms and provisions hereof or thereof, this being
in addition to any other remedy to which any of them may be entitled by law
or
equity.
6.10
Survival.
The representations, warranties and covenants of the Company and the Subscriber
shall survive the execution and delivery hereof and the Subscription Closing
until the second anniversary of the Closing Date.
6.11
The
obligation of the Subscriber hereunder is several and not joint with the
obligations of any other subscribers for the purchase of Shares in the Offering
(the “Other Subscribers”), and the Subscriber shall not be responsible in any
way for the performance of the obligations of any Other Subscribers. Nothing
contained herein or in any other agreement or document delivered at the Closing,
and no action taken by the Subscriber pursuant hereto, shall be deemed to
constitute the Subscriber and the Other Subscribers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Subscriber and the Other Subscribers are in any way acting
in concert with respect to such obligations or the transactions contemplated
by
this Agreement. The Subscriber shall be entitled to protect and enforce the
Subscriber’s rights, including without limitation the rights arising out of this
Agreement, and it shall not be necessary for any Other Subscriber to be joined
as an additional party in any proceeding for such purpose. The language used
in
this Agreement will be deemed to be the language chosen by the parties to
express their mutual intent, and no rules of strict construction will be applied
against any party. The Subscriber is not acting as part of a “group” (as that
term is used in Section 13(d) of the 1934 Act) in negotiating and entering
into
this Agreement or purchasing the Shares. The Company hereby confirms that it
understands and agrees that the Subscriber is not acting as part of any such
group.
[SIGNATURE
PAGE FOLLOWS]
SIGNATURE
PAGE
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year
first written above.
|
Number
of Shares Subscribed For:
___________________
_____________________________________
|
x
$0.25
per
Share
|
Total
Amount of Subscription:
$_______________________
______________________________________
|
|
Print
Full Legal Name of Subscriber
|
|
Print
Full Legal Name of Co-Subscriber
(if
applicable)
|
|
____________________________________
|
|
_____________________________________
|
|
Signature
of (or on behalf of) Subscriber
|
|
Signature
of (or on behalf of) Co-Subscriber
(if
applicable)
|
|
Name:
Title:
|
|
|
|
Address
of Subscriber:
____________________________________
____________________________________
|
|
Address
of Co-Subscriber (if applicable):
_____________________________________
____________________________________
|
|
____________________________________
|
|
____________________________________
|
|
Social
Security or Taxpayer Identification
Number
of Subscriber
|
|
Social
Security or Taxpayer Identification
Number
of Co-Subscriber (if applicable)
|
|
o
Individual
o
Joint
Tenants
with
Rights of
Survivorship
o
Corporation
o
LLC
o
Other:
______________________________________
|
TYPE
OF
OWNERSHIP:
|
Date of Trust:
__________________________________
Name of Trustee:
______________________________________
|
|
Mail
to:
Carol
McMahan
Synergy
Law Group, LLC
730
West Randolph Street
Suite
600
Chicago,
IL 60661
|
|
Subscription
Agreed to and Accepted:
TITLE
STARTS ONLINE, INC.
By:
________________________________
Mark
DeFoor
President
and Chief Executive Officer
|
