As filed
with the Securities and Exchange Commission on December 29, 2008
Registration No.
____________
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
S-1
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
SURF
A MOVIE SOLUTIONS INC.
(Exact
name of Registrant as specified in its charter)
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(State
or other jurisdiction of
incorporation
or organization)
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(Primary
Standard Industrial
Classification
Code Number)
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(I.R.S.
Employer
Identification
Number)
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#149,
19744 Beach Boulevard
Huntington
Beach, CA, 92648
Tel: 1
(714) 475-3516
(Address,
including zip code, and telephone number, including area code,
of
Registrant’s principal executive offices)
The
Nevada Agency and Trust Company
50 West
Liberty Street, Suite 880
Reno,
Nevada 89501
Telephone
(775) 322-0626
Fax (775)
322-5623
(Name,
address, including zip code, and telephone number,
including
area code, of agent for service)
Copies of
all correspondence to:
Gersten
Savage LLP
David E.
Danovitch, Esq.
Jaclyn
Amsel, Esq.
Cheryll
June Calaguio, Esq.
600
Lexington Avenue
New York,
NY 10022-6018
Tel:
(212) 752-9700 Fax: (212) 980-5192
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 of 1933, please
check the following box:
þ
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering.
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
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer
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Accelerated
filer
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Non-accelerated
filer
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(Do
not check if smaller reporting company)
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Smaller
reporting company
þ
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Calculation of Registration Fee
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Title of Class of
Securities to be
Registered
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Amount to be
Registered
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Proposed Maximum
Aggregate Price Per
Share
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Proposed
Maximum
Aggregate
Offering Price
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Amount of
Registration Fee
(2)
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Common
Stock, $ 0.001 per share
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600,000
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(1)
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$
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0.10
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$
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60,000
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$
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2.36
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Total
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600,000
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$
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0.10
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$
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60,000
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$
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2.36
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(1)
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Represents
the maximum amount of the Offering. The minimum amount of the
offering equivalent to 400,000 shares of Common Stock will be offered on a
“best effort all or none basis”, while the additional 200,000 shares of
Common Stock will be offered on a “best effort
basis.”
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(2)
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Estimated
solely for the purpose of calculating the registration fee pursuant to
Rule 457(a) under the Securities Act of
1933.
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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 amended. The
Registrant 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 state where the offer or sale is not permitted.
SUBJECT
TO COMPLETION DATED DECEMBER 29, 2008
PRELIMINARY
PROSPECTUS
SURF
A MOVIE SOLUTIONS INC.
A
MINIMUM OF 400,000 AND A MAXIMUM OF 600,000 SHARES OF COMMON STOCK
OFFERING
PRICE $0.10 PER SHARE
This
prospectus relates to the offering by Surf A Movie Solutions Inc. (the “Company”
or the “Registrant”) of a minimum of 400,000 (the “Minimum Shares”) and a
maximum of 600,000 (the “Maximum Shares”) shares of our common stock (the
“Shares”) at an offering price of $0.10 per share (the
Offering”). The Offering will commence promptly after the date of
this prospectus and close no later than 180 days after the date of this
prospectus. However, we may extend the Offering for up to 90 days
following the expiration of the 180-day Offering period. We will pay
all expenses incurred in this Offering. The Minimum Shares will be
offered and sold on a “best efforts all or none basis”. An additional
200,000 shares will be offered on a “best efforts basis.”
Because
part of this Offering is being done on a best-efforts all or none basis, we may
receive no proceeds if we are not successful in selling the Minimum
Shares.
Funds
received for subscriptions of up to the Minimum Shares will be placed into
escrow. Following the sale of the Minimum Shares, any subscriptions
in excess of the Minimum Shares, up the number of Maximum Shares, will be
accepted on a rolling basis. Once we accept subscriptions in excess of the
Minimum Shares, the funds will be deposited into an account maintained by us and
be immediately available to us.
This
Offering is a self-underwritten offering and there will be no underwriter
involved in the sale of the Shares. We intend to offer the Shares
through our officers and directors who will not be paid any commission for such
sales.
OUR
BUSINESS IS SUBJECT TO MANY RISKS AND AN INVESTMENT IN OUR COMMON STOCK WILL
ALSO INVOLVE A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER THE FACTORS
DESCRIBED UNDER THE HEADING “RISK FACTORS” BEGINNING ON PAGE 4 BEFORE INVESTING
IN OUR COMMON STOCK.
Prior to
this Offering, there has been no public market for our common stock and we have
not applied for listing or quotation on any public market. We have arbitrarily
determined the offering price of $0.10 per share offered hereby. The offering
price bears no relationship to our assets, book value, earnings or any other
customary investment criteria. After the effective date of the registration
statement, we intend to seek a market maker to file an application with the
Financial Industry Regulatory Authority (“FINRA”) to have our common stock
quoted on the OTC Bulletin Board. We currently have no market maker who
is willing to list quotations for our stock. There is no assurance that an
active trading market for our shares will develop, or, if developed, that it
will be sustained.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR
ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date
of this prospectus is _________, 200__
TABLE
OF CONTENTS
The
following table of contents has been designed to help you find information
contained in this prospectus. We encourage you to read the entire
prospectus.
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Page
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PROSPECTUS
SUMMARY
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1
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RISK
FACTORS
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4
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CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
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11
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USE
OF PROCEEDS
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11
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CAPITALIZATION
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12
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DILUTION
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12
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DETERMINATION
OF THE OFFERING PRICE
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13
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DIVIDEND
POLICY
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13
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MARKET
FOR OUR COMMON STOCK
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13
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DESCRIPTION
OF OUR BUSINESS
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14
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MANAGEMENT
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22
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EXECUTIVE
COMPENSATION
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24
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CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
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25
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PRINCIPAL
SHAREHOLDERS
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25
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PLAN
OF DISTRIBUTION, TERMS OF THE OFFERING
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26
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DESCRIPTION
OF SECURITIES
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29
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SHARES
ELIGIBLE FOR FUTURE SALE
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30
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LEGAL
MATTERS
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31
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LEGAL
REPRESENTATION
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31
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EXPERTS
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31
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WHERE
YOU CAN GET MORE INFORMATION
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31
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MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION
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32
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FINANCIAL
STATEMENTS
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F-1
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PROSPECTUS
SUMMARY
This
summary highlights certain information contained elsewhere in this prospectus.
You should read the entire prospectus carefully, including our financial
statements and related notes, and especially the risks described under “Risk
Factors” beginning on page 4. All references to “we,” “us,” “our,” “Surf a Movie
Solutions” “Company” or similar terms used in this prospectus refer to Surf a
Movie Solutions Inc. Unless otherwise indicated, the term “fiscal
year” refers to our fiscal year ending September 30. Unless otherwise indicated,
the term “common stock” refers to shares of the Company’s common
stock.
Corporate
Background and Business Overview
Surf A
Movie Solutions Inc. was incorporated under the laws of the state of Nevada on
December 18, 2007 and is engaged in the development, sales and marketing of
online video stores.
Our
offices are currently located at #149, 19744 Beach Boulevard, Huntington Beach,
CA, 92648. Our telephone number is (714) 475-3516. We have a website at
www.surfamovie.com
,
however, the information contained on our website does not form a part of the
registration statement of which this prospectus is a part. Our website is
currently in development stage and inaccessible. We expect it to be
fully developed with all intended functions and features and ready for public
launch by within one year from the date the Offering is
completed.
We are a
development stage company that has not generated any revenue and has had limited
operations to date. From December 18, 2007 (inception) to September 30, 2008, we
have incurred accumulated net losses of $5,874. As of September 30, 2008, we had
$18,980 in current assets and current liabilities of $4,854.
We are in
the development stage of creating an easy to use and comprehensive solution that
will enable our customers to open a video rental storefront on the Internet. Our
product will enable video store customers to download rented movies to their
computers to be played using Microsoft Media Player. We believe that
online shopping has become a driving force in the continued growth of the
Internet. We further believe that the ability to download movies and other forms
of entertainment directly to their computers will become an increasingly larger
segment of the on-line shopping market. We plan to develop a turn-key online
video store operation that will allow the store owner to stock the various types
of movies he or she chooses to offer to his or her customers on a pay-per-view
basis.
Online
videos currently available cover a wide range of titles from home movies to
premium quality movies. We believe, although no assurance can be given, that the
use of online videos will continue to increase in popularity and sophistication
and as such, we believe our plan to offer turn-key web sites for online video
businesses is set to launch at the right time in history.
We plan
to charge an initial fee of $1,000 to our online customers wishing to launch
online video rental stores. We will also be receiving 20% of the revenue from
rentals generated by our customers’ online video stores. We will provide our
customers with the infrastructure to get their business going and subsequently
earn a portion of revenue from each downloaded video from their web site. We
believe, although no assurance can be given, that this business model will
establish a number of ongoing revenue streams that will contribute to our
long-term growth.
Summary
of the Offering
Shares
of common stock being offered by the Registrant:
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A
minimum of 400,000 shares (the “Minimum Shares”) and up to a maximum of
600,000 shares (the “Maximum Shares”) of the Company’s common
stock.
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Offering
price:
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$0.10
per share of common stock.
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Number
of shares outstanding before the Offering:
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4,000,000
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Number
of shares outstanding after the Offering, if all the shares are
sold:
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4,400,000
upon the sale of Minimum Shares or 4,600,000, if the Maximum Shares are
sold in this Offering.
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Market
for the common stock:
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There
is no public market for our common stock. After the effective date of the
registration statement of which this prospectus is a part, we intend to
seek a market maker to file an application on our behalf to have our
common stock quoted on the Over-the-Counter Bulletin Board. We currently
have no market maker who is willing to list quotations for our stock.
There is no assurance that a trading market will develop, or, if
developed, that it will be sustained.
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Use
of Proceeds:
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If
we are successful at selling the Shares we are offering, our gross
proceeds from this offering will be $40,000 if the Minimum Shares are sold
and $60,000 if the Maximum Shares are sold. We intend to use
all the proceeds received from this Offering to execute our business
plan.
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Risk
Factors:
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See
“Risk Factors” beginning on page 4 and the other information in this
prospectus for a discussion of the factors you should consider before
deciding to invest in shares of our common stock.
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Dividend
Policy:
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We
have not declared or paid any dividends on our common stock since our
inception, and we do not anticipate paying any such dividends for the
foreseeable future.
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Summary
Financial Data
The
following summary financial information for the period from December 18, 2007
(date of inception) through September 30, 2008, includes statement of expenses
and balance sheet data from our audited financial statements. The information
contained in this table should be read in conjunction with “Management’s
Discussion and Analysis of Financial Condition and Results of Operation” and the
financial statements and accompanying notes included in this
prospectus.
Our
financial status creates substantial doubt whether we will continue as a going
concern.
Statement
of Operations
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Period from Inception
(December 18, 2007)
to
September 30, 2008
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Revenues
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$
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0
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Total
expenses
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5,874
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Net
loss
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5,874
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Balance
Sheet Data
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September 30, 2008
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Total
assets
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$
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18,980
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Total
liabilities
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$
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4,854
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Total
liabilities and stockholders’ equity
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$
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18,980
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RISK
FACTORS
An
investment in our common stock involves a high degree of risk. You should
carefully consider the following risk factors and other information in this
prospectus before deciding to invest in our Company. If any of the following
risks actually occur, our business, financial condition, results of operations
and prospects for growth could be seriously harmed. As a result, the trading
price of our common stock could decline and you could lose all or part of your
investment.
Risks
Relating to Our Business
We
are uncertain of our ability to continue as a going concern, indicating the
possibility that we may not be able to operate in the future.
To date,
we have completed only the initial stages of our business plan and we can
provide no assurance that we will be able to generate a sufficient amount of
revenue, if at all, from our business in order to achieve
profitability. It is not possible for us to predict at this time the
potential success of our business. The revenue and income potential of our
proposed business and operations are currently unknown. If we cannot continue as
a viable entity, you may lose some or all of your investment in our
Company.
As
a company in the early stage of development with an unproven business strategy,
our limited history of operations makes evaluation of our business and prospects
difficult.
We were
incorporated on December 18, 2007. Our website is not complete, we have no
customers, and have not earned any revenues. Our business prospects are
difficult to predict because of our limited operating history, early stage of
development and unproven business strategy. Our primary business activities
will, at this time, be focused on the development of our website and the sale of
online video store outlets. Although we believe that our
business plan will have significant profit potential, we may not attain
profitable operations and our management may not succeed in realizing our
business objectives.
Our
business will fail if we are unable to develop our online video store website or
implement our business plan successfully.
The
success of our business plan is dependent on the development of our online video
store website. We may not be able to develop this website in a timely manner. In
addition, the success of our business plan is dependent upon the market
acceptance of our website and the services offered thereby. Our business will
fail if we can not successfully implement our business plan, or develop our
website or successfully market our product and capabilities.
We
expect to suffer losses in the immediate future.
We expect
to incur operating losses in future periods. These losses will occur because we
do not yet have any revenues to offset the expenses associated with the
development of our website and our business. We cannot guarantee that we will
ever be successful in generating revenues in the future. We recognize that if we
are unable to generate revenues, we will not be able to earn profits or continue
operations. There is no history upon which to base any assumption as to the
likelihood that we will prove successful, and we can provide investors with no
assurance that we will generate any operating revenues or ever achieve
profitable operations. If we are unsuccessful in addressing these risks, our
business will most likely fail.
We
may not be able to execute our business plan or stay in business without
additional funding.
Our
ability successfully to develop our online video store website and eventually to
sell online video stores to generate operating revenues depends on our ability
to obtain the necessary financing to implement our business plan. We
may require additional financing through issuance of debt and/or equity in order
to establish profitable operations. Such financing, if required, may not be
forthcoming. As widely reported, the global and domestic financial markets have
been extremely volatile in recent months. If such conditions and
constraints continue, we may not be able to acquire additional funds either
through credit markets or through equity markets. Even if additional financing
is available, it may not be available on terms we find favorable. At this time,
there are no anticipated sources of additional funds in place. Failure to secure
the needed additional financing will have an adverse effect on our ability to
remain in business.
If
our estimates related to expenditures are erroneous or inaccurate, our business
will fail and you could lose your entire investment.
Our
success is dependent in part upon the accuracy of our management’s estimates of
expenditures for legal and accounting services, including those we expect to
incur as a publicly reporting company, for website development and
administrative expenses, which management estimates to be approximately between
$40,000 and $60,000 over the next twelve months. If such estimates are erroneous
or inaccurate, or we encounter unforeseen costs, we may not be able to carry out
our business plan, which could result in the failure of our business and you
could lose your entire investment.
The
popularity of the Internet for viewing videos and video related services may
decrease or fail to grow, which could adversely affect our financial condition
and results of operations.
The use
of the Internet for viewing videos and video related services has rapidly
developed over the years. As is common for any rapidly evolving industry, demand
and market acceptance for recently introduced products and services are subject
to a high level of uncertainty and risk. It is also difficult to predict the
industry’s future growth rate, if any. If the popularity of the Internet for
viewing videos declines, fails to develop or develops more slowly than expected,
or our website does not achieve or sustain market acceptance, our results of
operations and financial condition could be materially and adversely
affected.
Any
significant disruption in service on our website could result in a loss of
customers.
Our plans
call for our customers to access our service through our website. Our reputation
and ability to attract, retain and serve our customers will be dependent upon
the reliable performance of our website, network infrastructure and fulfillment
processes. Interruptions in these systems could make our website unavailable and
hinder our ability to make our customers on-line video store available. Service
interruptions or the unavailability of our website could diminish the overall
attractiveness of our subscription service to existing and potential
customers.
Our
servers will likely be vulnerable to computer viruses, physical or electronic
break-ins and similar disruptions, which could lead to interruptions and delays
in our service and operations and loss, misuse or theft of data. It is likely
that our website will periodically experience directed attacks intended to cause
a disruption in service, which is not uncommon for web-based businesses. Any
attempts by hackers to disrupt our website service or our internal systems, if
successful, could harm our business, be expensive to remedy and damage our
reputation. Efforts to prevent hackers from entering our computer
systems are expensive to implement and may limit the functionality of our
services. Any significant disruption to our website or internal computer systems
could result in a loss of subscribers and adversely affect our business and
results of operations.
Advancement
in technology may hinder our ability to keep pace with the industry of supplying
online videos.
Online
movies are produced in a variety of formats, which continually change as
technology advances. We face the risk of not being able to maintain a
level of technological sophistication needed effectively to compete in this
market place, which may result in the failure of our business.
Intellectual
property claims against our customers, the operators of the on-line video rental
stores, could extend to us.
Our
customers will use the intellectual property of third parties in merchandising
their products and at present, we do not have the necessary technology to
monitor whether our customers are operating the on-line video stores in
accordance with current anti-piracy legislation or regulations. This may
adversely impact our ability to take the necessary measures to ensure that our
customers also comply, with the provisions of The Digital Millennium Copyright
Act (the “DMCA”). Further, it may also impact our ability to avail ourselves of
the safe harbor protection provided under the DMCA Title II, the Online
Copyright Infringement Liability Limitation Act (the "OCILLA"),.
In
addition, actions on the part of our customers and their use of the intellectual
property of others may result in a claim against our customers for infringement,
misappropriation, misuse or other violation of third party intellectual property
rights. Such claims may extend to us, either directly or under the
doctrine of contributory infringement, and we may face costly litigation,
diversion of technical and management personnel, and may be unable to use our
website. If we are unable to obtain or develop sufficient technology
to ensure that our customers do not infringe on the intellectual property of
others, or to provide non-infringing alternative technology, our business and
competitive position may be affected adversely. As a result of a dispute, we may
have to develop non-infringing technology, enter into royalty or licensing
agreements adjust our merchandizing or marketing activities or take other action
to resolve the claims, including cessation of operations which are deemed to
infringe. These actions, if required, may be unavailable on terms acceptable to
us, costly or unavailable. As part of our effort to protect the intellectual
property of others, we will make available on our website and on the site of
each online video store a Copyright Infringement Notification form, for those
who believe that their intellectual property rights are being infringed, to
submit to us. Upon receipt of such forms, we will remove the
allegedly infringing material from our customers’ sites. Repeat
offenders will have their stores closed indefinitely.
Anti-piracy
issues have been and will continue to be a major issue between producers and
consumers as the amount of video content being exchanged on the Internet
grows.
The
introduction of Digital Rights Management (“DRM”) systems was thought to resolve
many of the issues related to unauthorized downloading and acquisition of music
and video content. We believe DRM continues to be an option used by
many vendors of movies to protect the intellectual capital of their
investments. Although we plan to monitor the trends in the
marketplace and make any necessary changes, unforeseen changes in piracy law may
prevent us from competing effectively and our business may fail.
We
are in a competitive market which could impact our ability to gain market share
which could harm our financial performance.
The
business of maintaining websites to sell online videos is very competitive.
Barriers to entry on the Internet are relatively low, and we face competitive
pressures from numerous companies that have existed and been successful in this
general market space for many years. There are a number of successful websites
operated by proven companies that offer mail order video rentals, which may
prevent us from gaining enough market share to become
successful. These competitors have existing customers that may form a
large part of our customers’ targeted clients and such targeted clients may be
hesitant to switch over from already established competitors to our
customers. If we cannot gain enough market share, our business and
our financial performance will be adversely affected.
We
are a small company with limited resources relative to our competition and we
may not be able to compete effectively.
Our
competitors’ online video stores have longer operating histories, greater
resources and name recognition, and a larger base of customers than we have. As
a result, these competitors will have greater credibility with our clients’
potential customers. They also may be able to adopt more aggressive pricing
policies and devote greater resources to the development, promotion, and sale of
their online video stores than we or our clients can to
ours. Therefore, we may not be able to compete effectively and our
business may fail.
We
need to retain key personnel to support our product and ongoing
operations.
The
development of our website and the marketing of our services will continue to
place a significant strain on our limited personnel, management, and other
resources. Our future success depends upon the continued services of our
executive officers who are developing our business. The loss of the services of
either of our officers could negatively impact our ability to develop our
website and sell our services, which could adversely affect our financial
results and impair our growth.
Risks
Relating to Our Common Stock
There
is currently no public market for our securities, and there can be no assurance
that any public market will develop or that our common stock will be quoted for
trading.
There has
been no public market for our securities and there can be no assurance that an
active trading market for the securities offered herein will develop after this
Offering, or, if developed, be sustained. After the effective date of the
registration statement of which this prospectus is a part, we intend to identify
a market maker to file an application with the Financial Industry Regulatory
Authority (“FINRA”) to have our common stock quoted on the Over-the-Counter
Bulletin Board. We will have to satisfy certain criteria in order for our
application to be accepted. We do not currently have a market maker
who is willing to participate in this application process, and even if we
identify a market maker, there can be no assurance as to whether we will meet
the requisite criteria or that our application will be accepted. Our common
stock may never be quoted on the Over-the-Counter Bulletin Board, or, even if
quoted, a public market may not materialize.
If our
securities are not eligible for initial quotation, or if quoted, are not
eligible for continued quotation on the Over-the-Counter Bulletin Board or a
public trading market does not develop, purchasers of the common stock may have
difficulty selling or be unable to sell their securities should they desire to
do so, rendering their shares effectively worthless and resulting in a complete
loss of their investment.
Because
we will be subject to “penny stock” rules once our shares are quoted on the
Over-the-Counter Bulletin Board, the level of trading activity in our stock may
be reduced.
Broker-dealer
practices in connection with transactions in “penny stocks” are regulated by
penny stock rules adopted by the Securities and Exchange Commission. Penny
stocks generally are equity securities with a price of less than $5.00 (other
than securities registered on some national securities exchanges). The penny
stock rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document that provides information about penny stocks and the nature and level
of risks in the penny stock market. The broker-dealer also must provide the
customer with current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the transaction, 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, and monthly
account statements showing the market value of each penny stock held in the
customer’s account. In addition, broker-dealers who sell these securities to
persons other than established customers and “accredited investors” must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser’s written agreement to the transaction.
Consequently, these requirements may have the effect of reducing the level of
trading activity, if any, in the secondary market for a security subject to the
penny stock rules. If a trading market does develop for our common stock, these
regulations will likely be applicable, and investors in our common stock may
find it difficult to sell their shares.
FINRA
sales practice requirements may limit a stockholder’s ability to buy and sell
our stock.
FINRA has
adopted rules that require that in recommending an investment to a customer, a
broker-dealer must have reasonable grounds for believing that the investment is
suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customer’s financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, FINRA believes that there is a high probability that speculative
low priced securities will not be suitable for certain customers. FINRA
requirements will likely make it more difficult for broker-dealers to recommend
that their customers buy our common stock, which may have the effect of reducing
the level of trading activity in our common stock. As a result, fewer
broker-dealers may be willing to make a market in our common stock, reducing a
stockholder’s ability to resell shares of our common stock.
State
securities laws may limit secondary trading, which may restrict the states in
which you can sell the shares offered by this prospectus.
If you
purchase shares of our common stock sold pursuant to this Offering, you may not
be able to resell the shares in a certain state unless and until the shares of
our common stock are qualified for secondary trading under the applicable
securities laws of such state or there is confirmation that an exemption, such
as listing in certain recognized securities manuals, is available for secondary
trading in such state. There can be no assurance that we will be successful in
registering or qualifying our common stock for secondary trading, or identifying
an available exemption for secondary trading in our common stock in every state.
If we fail to register or qualify, or to obtain or verify an exemption for the
secondary trading of, our common stock in any particular state, the shares of
common stock could not be offered or sold to, or purchased by, a resident of
that state. In the event that a significant number of states refuse to permit
secondary trading in our common stock, the market for the common stock will be
limited which could drive down the market price of our common stock and reduce
the liquidity of the shares of our common stock and a stockholder’s ability to
resell shares of our common stock at all or at current market prices, which
could increase a stockholder’s risk of losing some or all of his
investment.
If
quoted, the price of our common stock may be volatile, which may substantially
increase the risk that you may not be able to sell your shares at or above the
price that you may pay for the shares.
Even if
our shares are quoted for trading on the Over-the-Counter Bulletin Board
following this Offering and a public market develops for our common stock, the
market price of our common stock may be volatile. It may fluctuate significantly
in response to the following factors:
|
·
|
variations
in quarterly operating results;
|
|
·
|
our
announcements of significant contracts and achievement of
milestones;
|
|
·
|
our
relationships with other companies or capital
commitments;
|
|
·
|
additions
or departures of key personnel;
|
|
·
|
sales
of common stock or termination of stock transfer
restrictions;
|
|
·
|
changes
in financial estimates by securities analysts, if any;
and
|
|
·
|
fluctuations
in stock market price and volume.
|
Your
inability to sell your shares during a decline in the price of our stock may
increase losses that you may suffer as a result of your investment.
Our
insiders beneficially own 100% of our issued and outstanding stock, and
accordingly, have control over stockholder matters, the Company’s business and
management.
As of
December 22, 2008, our executive officers and directors beneficially own
4,000,000 shares of our common stock in the aggregate, or approximately 100% of
our issued and outstanding common stock. Mr. Fadi Zeidan, our President,
Treasurer, Secretary and a director, owns 65% or 2,600,000 shares of the
Company’s common stock issued and outstanding. Mr. Ufuk Turk, a director, owns
1,400,000 shares, equivalent to 35%, of our issued and outstanding common
stock. Following this Offering, if:
|
-
|
the
Minimum Shares offered pursuant to this prospectus are sold, Mr. Zeidan
will own approximately 59.09% and Mr. Turk will own
approximately 31.82% of our issued and outstanding common stock, and
collectively they will own approximately 90.91% of our issued and
outstanding common stock.
|
|
-
|
the
Maximum Shares offered pursuant to this prospectus are sold, Mr. Zeidan
will own approximately 56.52% and Mr. Turk will own
approximately 30.43% of our issued and outstanding common stock, and
collectively they will own approximately 86.96% of our issued and
outstanding common stock.
|
As a
result, our executive officers, directors and affiliated persons will have
significant influence to:
|
·
|
elect
or defeat the election of our
directors;
|
|
·
|
amend
or prevent amendment of our articles of incorporation or
bylaws;
|
|
·
|
effect
or prevent a merger, sale of assets or other corporate transaction;
and
|
|
·
|
affect
the outcome of any other matter submitted to the stockholders for
vote.
|
Moreover,
because of the significant ownership position held by our insiders, new
investors will not be able to effect a change in the Company’s business or
management, and therefore, shareholders would be subject to decisions made by
management and the majority shareholders.
In
addition, sales of significant amounts of shares held by our directors and
executive officers, or the prospect of these sales, could adversely affect the
market price of our common stock. Management’s stock ownership may discourage a
potential acquirer from making a tender offer or otherwise attempting to obtain
control of us, which in turn could reduce our stock price or prevent our
stockholders from realizing a premium over our stock price.
We
arbitrarily determined the price of the shares of our common stock to be sold
pursuant to this prospectus, and such price may not reflect the actual market
price for the securities.
The
initial offering price of $0.10 per share of the common stock offered pursuant
to this prospectus was determined by us arbitrarily. The price is not based on
our financial condition and prospects, market prices of similar securities of
comparable publicly traded companies, certain financial and operating
information of companies engaged in similar activities to ours, or general
conditions of the securities market. The price may not be indicative of the
market price, if any, for the common stock in the trading market after this
Offering. The market price of the securities offered herein, if any, may decline
below the initial public offering price. The stock market has experienced
extreme price and volume fluctuations. In the past, securities class action
litigation has often been instituted against various companies following periods
of volatility in the market price of their securities. If instituted against us,
regardless of the outcome, such litigation would result in substantial costs and
a diversion of management’s attention and resources, which would increase our
operating expenses and affect our financial condition and business
operations.
Because
we do not intend to pay any dividends on our common stock, holders of our common
stock must rely on stock appreciation for any return on their
investment.
We have
not declared or paid any dividends on our common stock since our inception, and
we do not anticipate paying any such dividends for the foreseeable future.
Accordingly, holders of our common stock will have to rely on capital
appreciation, if any, to earn a return on their investment in our common
stock.
The
sale of our common stock pursuant to this prospectus, and future additional
issuances of our shares of common stock, may result in immediate dilution to
existing shareholders.
We are
authorized to issue up to 50,000,000 shares of common stock, of which 4,000,000
shares are issued and outstanding. We are issuing a minimum of 400,000 shares
and a maximum of up to 600,000 shares of our common stock pursuant to this
prospectus. Our Board of Directors has the authority to cause us to
issue additional shares of common stock, and to determine the rights,
preferences and privilege of such shares, without consent of any of our
stockholders. The sale of our common stock pursuant to this prospectus, and any
future additional issuances will result in immediate dilution to our existing
shareholders’ interests, which may have a dilutive impact on our existing
shareholders, and could negatively affect the value of your
shares.
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus contains forward-looking statements and information relating to our
business that are based on our beliefs as well as assumptions made by us or
based upon information currently available to us. These statements reflect our
current views and assumptions with respect to future events and are subject to
risks and uncertainties. Forward-looking statements are often identified by
words like: “believe,” “expect,” “estimate,” “anticipate,” “intend,” “project”
and similar expressions or words which, by their nature, refer to future events.
In some cases, you can also identify forward-looking statements by terminology
such as “may,” “will,” “should,” “plans,” “predicts,” “potential” or “continue”
or the negative of these terms or other comparable terminology. These statements
are only predictions and involve known and unknown risks, uncertainties and
other factors, including the risks in the section entitled Risk Factors
beginning on page 4, that may cause our or our industry’s actual results, levels
of activity, performance or achievements to be materially different from any
future results, levels of activity, performance or achievements expressed or
implied by these forward-looking statements. In addition, you are directed to
factors discussed in the Management’s Discussion and Analysis of Financial
Condition and Results of Operation section beginning on page 32 and the
section entitled “Description of Our Business” beginning on page 14, and as well
as those discussed elsewhere in this prospectus. Other factors include, among
others: general economic and business conditions; industry capacity; industry
trends; competition; changes in business strategy or development plans; project
performance; availability, terms, and deployment of capital; and availability of
qualified personnel.
These
forward-looking statements speak only as of the date of this prospectus.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, or achievements. Except as required by applicable law, including the
securities laws of the United States, we expressly disclaim any obligation or
undertaking to disseminate any update or revisions of any of the forward-looking
statements to reflect any change in our expectations with regard thereto or to
conform these statements to actual results.
USE
OF PROCEEDS
The net
proceeds to us from the sale of a minimum of 400,000 shares and a maximum of up
to 600,000 shares of common stock offered at a public offering price of $0.10
per share will vary depending upon the total number of Shares actually sold.
Regardless of the number of shares sold, we expect to incur Offering expenses
estimated at approximately $20,000.00 for legal, accounting, printing, and other
costs in connection with this Offering.
The table
below sets forth the net proceeds to us from this Offering in the event that we
sell either the Minimum Shares or the Maximum Shares we are
offering. This table does not set forth all possibilities. There is
no guarantee that we will be successful at selling any of the securities being
offered in this prospectus. Accordingly, the actual amount of proceeds we will
raise in this Offering, if any, may differ.
|
|
Minimum
|
|
|
Maximum
|
|
Shares
Sold
|
|
|
400,000
|
|
|
|
600,000
|
|
Gross
Proceeds
|
|
$
|
40,000
|
|
|
$
|
60,000
|
|
Less
offering expenses
|
|
$
|
20,000
|
|
|
$
|
20,000
|
|
Net
offering proceeds
|
|
$
|
20,000
|
|
|
$
|
40,000
|
|
Our
offering expenses of approximately $20,000 are comprised primarily of legal and
accounting expenses, Securities and Exchange Commission (“SEC”) and EDGAR filing
fees, printing and transfer agent fees, and any necessary state registration
fees. Our officers and directors will not receive any compensation for their
efforts in selling our shares.
The net
proceeds from this Offering will be used for the development and marketing of
our business and product, and for general working capital, during the twelve
months following the successful completion of this Offering. In all instances,
after the effectiveness of the registration statement of which this prospectus
is a part, we will need some amount of working capital to maintain our general
existence and comply with our public reporting obligations. In addition to
changing allocations because of the amount of proceeds received, we may change
the use of proceeds because of changes in our business plan. Investors should
understand that we have wide discretion over the use of proceeds.
CAPITALIZATION
The
following table sets forth, as of September 30, 2008, the capitalization of the
Company on an actual basis, and the capitalization of the Company as adjusted to
give effect to the sale of the Minimum Shares and the Maximum Shares of common
stock being offered hereby at the initial public offering price of $0.10 per
share and the application of the estimated net proceeds as described in “Use of
Proceeds.” This table should be read in conjunction with the more detailed
financial statements and notes thereto included elsewhere herein.
|
|
September
30, 2008
|
|
|
|
Actual
|
|
|
As Adjusted,
Assuming Sale
of Minimum
Shares
|
|
|
As Adjusted,
Assuming
Sale of
Maximum
Shares
|
|
Short-term
debt
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
Stockholders’
equity :
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock, $0.001 par value, 50,000,000 shares authorized,
4,000,000
shares issued and outstanding; 4,600,000 shares
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued
and outstanding as adjusted
|
|
|
4,000
|
|
|
|
4,400
|
|
|
|
4,600
|
|
Additional
paid-in capital
|
|
|
16,000
|
|
|
|
55,600
|
|
|
|
75,400
|
|
Deficit
accumulated during the development stage
|
|
|
(5,874
|
)
|
|
|
(5,874
|
)
|
|
|
(5,874
|
)
|
|
|
Total
stockholders equity
|
|
|
14,126
|
|
|
|
54,126
|
|
|
|
74,126
|
|
Total
Capitalization
|
|
|
|
|
|
|
|
|
|
|
|
|
DILUTION
Purchasers
of our securities in this Offering will experience immediate and substantial
dilution in the net tangible book value of their common stock to the extent of
the difference between the public offering price per share of our common stock
and the adjusted net tangible book value per share of our common stock after
this Offering.
The
historical net tangible book value as of September 30, 2008 was $14,126 or
$0.003 per share. Historical net tangible book value per share of common stock
is equal to our total tangible assets less total liabilities, divided by the
number of shares of common stock outstanding as of September 30,
2008.
Dilution
in pro forma net tangible book value per share represents the difference between
the amount per share paid by purchasers of shares of our common stock in this
Offering and the pro forma net tangible book value per share of our common stock
immediately following this Offering.
Adjusted
net tangible book value represents the historical net tangible book value as of
September 30, 2008, as adjusted to give effect to the receipt of net proceeds of
$20,000 or $40,000 from the sale of 400,000 shares or 600,000 shares of common
stock, respectively, after deducting estimated Offering expenses of
approximately $20,000. The adjusted net tangible book value represents an
immediate increase of $0.004 per share upon the sale of 400,000 shares and
$0.008 upon the sale of 600,000 shares, to existing stockholders, and an
immediate and substantial dilution of $0.042 per share, or approximately 84%,
upon the sale of 400,000 shares, or $0.043 per share, or approximately 64%, upon
the sale of 600,000 shares, to new investors purchasing our securities in this
Offering.
DETERMINATION
OF THE OFFERING PRICE
There is
no established public market for our shares of common stock. The offering price
of $0.10 per share was determined by us arbitrarily. We believe that this price
reflects the appropriate price that a potential investor would be willing to
invest in our Company at this initial stage of our development. This price bears
no relationship whatsoever to our business plan, the price paid for our shares
by our founders, our assets, earnings, book value or any other criteria of
value. The offering price should not be regarded as an indicator of the future
market price of the securities, which is likely to fluctuate.
See “Plan
of Distribution” for additional information.
DIVIDEND
POLICY
We have
not paid any dividends since our incorporation and do not anticipate the payment
of dividends in the foreseeable future. At present, our policy is to retain
earnings, if any, to develop and market our product. The payment of dividends in
the future will depend upon, among other factors, our earnings, capital
requirements, and operating financial conditions.
MARKET
FOR OUR COMMON STOCK
Market
Information
There is
no established public market for our common stock.
After the
effective date of the registration statement of which this prospectus is a part,
we intend to seek a market maker to file an application with the Financial
Industry Regulatory Authority, Inc., or FINRA, to have our common stock quoted
on the Over-the-Counter Bulletin Board. We will have to satisfy certain criteria
in order for our application to be accepted. We do not currently have a market
maker who is willing to participate in this application process, and even if we
identify a market maker, there can be no assurance as to whether we will meet
the requisite criteria or that our application will be accepted. Our common
stock may never be quoted on the Over-the-Counter Bulletin Board, or, even if
quoted, a public market may not materialize. There can be no assurance that an
active trading market for our shares will develop, or, if developed, that it
will be sustained.
We have
issued 4,000,000 shares of our common stock since the Company’s inception on
December 18, 2007. There are no outstanding options or warrants or securities
that are convertible into shares of common stock.
Holders
We had 2
holders of record of our common stock as of December 22, 2008.
Securities
Authorized for Issuance under Equity Compensation Plans
We do not
have any compensation plan under which equity securities are authorized for
issuance.
DESCRIPTION
OF OUR BUSINESS
OVERVIEW
We intend
to develop software and infrastructure to enable our customers to set-up their
own Internet-based video rental store, through which our customers’ clients will
be able to rent a movie and download it to their computer to view it. We plan to
use Microsoft’s Digital Rights Management (“DRM”) tool to protect videos from
being pirated, copied by other users or played indefinitely. Once a customer
subscribes to license an online video store through our site, a portal will
automatically be created for them with which they can create their online video
store.
The
agreements we will enter into with our customers will expressly require such
customers to keep and maintain documents from the owner of the content they make
available to their respective clients outlining their right to provide such
content on a rental basis using Internet download. We reserve the right to
require all our customers to provide us, upon request, with copies all of
relevant agreements outlining their rights to distribute their product through
Internet download. A customer’s inability to provide us with such
documents or agreements within 10 business days will result in the suspension of
the videos in questions and, if possible, notification of the content
owner.
Turn-Key
Online Video Store
We will
provide a “turn-key” solution for online video stores. A “turn-key”
solution is an easy to use solution that includes all tools and features
necessary to enable our customers to offer download-based video rental services
and is intended to enable our customers to set-up their video stores without the
need for third party tools. Customers wishing to sign up for our
“turn-key” online video store will start with a basic model and be able to add
optional services and customize their website based on the scope of the movie
selection and volume of activity levels. Each online video store will include a
template which will include the following:
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Ø
|
A
home page that will highlight information such as movies chosen by the
store owner, top ten movies, the available video categories, and
information about the video store
company;
|
|
Ø
|
Each
video category will have its own home page, which can list the videos in
alphabetical order, popularity or price. An optional recommendation list
also will be displayed;
|
|
Ø
|
Each
page will have the store owner’s branding: the top of each page will be
reserved for a banner that the video store owner
chooses;
|
|
Ø
|
A
password protected log-in page will be available for the video store
customers;
|
|
Ø
|
Shopping
Cart with PayPal link;
|
|
Ø
|
Search
function to browse the inventory by
keyword;
|
|
Ø
|
Video
download instructions for the video store
customers;
|
|
Ø
|
Video
upload instructions for the video store
owner;
|
|
Ø
|
Newsletter
that includes quarterly survey of competitor
prices;
|
|
Ø
|
Suggestions
on how to attract online
advertisers;
|
|
Ø
|
Terms
and Conditions & Privacy
information;
|
|
Ø
|
Information
about Surf a Movie, Inc.;
|
|
Ø
|
Email
contact and optional telephone
support;
|
|
Ø
|
An
administrative interface where the store owner can access sale and
customer information. In this interface they will be able to build the
store and add features and
categories.
|
Our
“turn-key” web site will allow the video store owner to add, edit and remove
video descriptions in an easy to use format. Each web site will be modular in
form allowing the web site owner to add as much or as little content as they
like as well as add or delete sections or movie titles and other
information.
Home
Page
The store
owner will be able to choose from various designs for their home pages for their
online stores. These pages will be customizable by the video store owner using
their administrative interface.
Top
of Page Banner
Web pages
use a variety of “top of page” banner spaces for brand name and corporate
identification. The video store owner will be able to choose from several top of
page formats that allow customization such as adjusting length of the banner
across the page, the width of the banner, fonts and the option to have text only
or the ability to insert a graphic image or icon.
Sign-In
Page for the Video Store clients
The
sign-in page will feature a registration area for the new video store clients
and login for existing clients. The login area will be password protected and
will contain a “Forgot your Password” retrieval function. Once the subscriber
signs in, he or she will be directed to his or her own web page where he or she
can review previous selections and move onto browsing and ordering more movies.
New clients will be required to register with the video store owner before
making a purchase.
Shopping
Cart
We plan
to use an open source code for our shopping cart that is available on the
Internet at no cost in order to keep our own development costs within
budget. “Open source” means that the source code for our site will be
available to the general public for use and/or modification from our original
design free of charge. The shopping cart will be integrated with the PayPal
payment system. PayPal is recognized internationally as the global leader in
secure online order processing. There are no set up fees and a graduated payment
fee based on the level of business activity. Paypal will be the sole method of
payment by video store customers for rental of their videos. We will
collect all payments from the video store customers and deposit into the video
store owner’s PayPal account an appropriate share of revenue on a monthly basis,
less applicable costs.
Add
/ Delete Category
This
section will allow the video store owner to add or delete category sections
within the web site. Each category will be situated along the left hand column
for ease of use by the video store owner.
Search
Function
The
search function will allow the video store customer to search the content of the
site. We plan to position a search window near the top of the page in the main
viewing area of each web page. Search results will be displayed using a
contemporary search engine that searches the content of the site including
current inventory and the “Coming Soon” section.
Video
Download Instructions
When the
video store customers decide to buy a movie, they will first be required to add
it to their shopping cart. When they have completed their selections and made
payment through PayPal, they will be able to proceed and download their
selection. Step-by-step instructions will assist the customer in downloading and
playing their selection.
Video
Upload Instructions
Video
store owners will be provided with video upload instructions to which they can
refer when adding new content to their web site. Videos will be available only
in Microsoft Media Player-compatible formats. This area will instruct the video
store owner which type of video formats are compatible with our DRM software. It
will also provide a step-by-step instruction for uploading movies.
The video
store owner will be charged a monthly fee based on the amount of storage
capacity they use for their inventory of online videos. Typically each full
length movie requires 0.5-1 gigabyte (“GB”) of storage capacity on the hard
drive of our computer system (the exact amount of storage will depend on the
length and resolution of the video). The cost to the video store owner to store
one GB of storage will be $1.00 per month.
Movie
Reviews
This is a
popular choice with many online stores selling products to end users and is an
optional feature that the video store owner may wish to include. Administrative
functionality will allow the video store owner to add or delete movie reviews at
their discretion.
Top
10 Downloaded Videos and Movies
An
optional Top 10 list of downloaded videos and movies will be included. Many
people expect to see this type of information to help guide them in the
selection and browsing of online content. Administrative functionality will
allow the video store owner to make changes to the list at any time, include
hyperlinks that go directly to the full web page that can features a movie
trailer or short video clip sample of the movie for the customer’s
review.
Top
Downloaded Movies by Category
An
optional section we will make available to the video store owner is the “Top
Downloaded Videos” and/or “Movies by Category.” As with the other add-ons, this
section includes administrative functions to add and delete
content.
Quarterly
Newsletter
We will
publish a Quarterly Newsletter that will be distributed free of charge to each
video store owner that will discuss the latest and incoming features. The
newsletter will also discuss techniques that will help drive more traffic to a
video store owner’s web site. Additionally, our video store owner will be able
to send out a periodic newsletter (not exceeding one per month) updating
customers to and recent changes and new video arrivals. This newsletter will be
sent to video store customers who elect to receive this service.
Terms
and Conditions
The Terms
and Conditions section will appear at the bottom of the home page for every
online video store. There will be rules which will prohibit video store owners
from sharing their customer’s email address and other private contact
information. An embedded link will direct inquires or complaints to our
Company’s directors who will have the authority to revoke a video store owners’
license to operate an online video store with us. Video store customers will be
provided with a notice that their privacy will not be compromised and to contact
us directly if they feel this has been compromised or that the video store owner
has engaged in any illegal or unethical activities.
Email
Contact and Optional Telephone Support
Our
turn-key operation will include email contact information for the video store
owner that they can display throughout the web site for customers and general
inquiries.
An
optional telephone support service will be available for those video store
owners that would like to offer this service. We plan to outsource this function
to an offshore company that can provide this type of customer service in modular
blocks of 12 – 18 or 24 hour per day coverage, seven days a week. This will be
an additional cost item and pricing will be based on the level of coverage the
video store owner seeks. We have not finalized our pricing structure for this
service as of yet and we have not included it in our financial
projections.
Technical
and Customer Care Section
Each
store will come with a technical and customer support section. The technical
support section will be the same for all stores. The customer support section is
customizable by the store owner. This support section will have frequently asked
questions, trouble shooting suggestions, and general information about the
service.
Digital
Rights Management Software
We will
use Microsoft DRM to protect the video content of our video store owner clients
from piracy and to enforce viewing rules. This will protect the content of our
video store owners and their partners from being pirated.
Reporting
Our
customers will have access in their portal to powerful reporting tools. They
will be able to generate sales reports daily, weekly, monthly and on customized
schedules. The video store owners will be able to determine their
customers’ locations and their purchasing patterns. We believe this type of
information will help determine the most advantageous marketing and sales
channels.
Each
video store owner will be required to set up a merchant account with PayPal.com,
the same online order processing company that we plan to integrate with the
shopping cart inside the online movie web sites. Video store owners will be
charged a weekly fee for storage capacity of their online movie inventory. The
video store owners will also receive, through PayPal, their revenue share
generated from movie rental.
Fees
We plan
to charge an initial fee of $1,000 to our online customers wishing to launch
online video rental stores. We will also be receiving 20% of the revenue from
rentals generated by our customers’ online video stores.
THE
MARKET OPPORTUNITY
Over the
past decade, the Internet has evolved into a platform for new types of
businesses that are developed, marketed and grown entirely online without having
a traditional retail operation. Online shopping has become a driving force in
the continued growth of the Internet. We believe that the ability to
download movies and other forms of entertainment directly to their computers
will become an increasingly larger segment of the on-line shopping market. We
plan to develop a turn-key online video store solution that will allow video
store owners to stock whatever type of movies they choose to offer to customers,
although no assurance can be given that we will be successful.
The
Internet is becoming ever more pervasive. According to statistics made available
by Internet World Stats on its website, the use of the Internet has exploded
during the last few years to just under 1.5 billion users representing 22% of
the world population. This represents 305% increase from year 2000 to 2008. The
highest penetration is in North America at 73.6% of the population, followed by
Australia at 59.5% of the population and Europe at 48.1% of the population.
Internet pay-per-view or Internet video requires high speed broadband
connectivity which is fast becoming the preferable mode of Internet
connectivity, displacing low speed dial up connections. As of 2007, there are
approximately 300 million broadband connections worldwide with the highest
number (66 million broadband connections) in the United States. Broadband
internet connections are necessary to download large files such as
movies.
With the
increasing use of broadband to access a ubiquitous Internet, we believe that the
use of online videos is going to continue to increase in popularity and
sophistication.
Online
videos currently available cover a wide range of titles from home movies to
premium quality movies. Web sites such as the Online Video Guide
http://www.ovguide.com/
,
MetaCafe (
http://www.metacafe.com/
),
which features its own Editor’s Best Videos, and Funny Movies and YouTube (
http://www.youtube.com/
),
which allow an Internet user to create and broadcast his or her own video or
movie have become popular.
Blockbuster
has established a widespread retail video rental store chain across North
America. Its web site features a large selection of movies which customers can
order and have shipped to them by mail. People can browse the web site inventory
and check to see if there is a Blockbuster retail location in their area that
they can visit in person. It also allows its customers to rent and download
movies to be viewed on their computers (
http://www.blockbuster.com/download
).
Real
Networks Inc. is one of the leading providers of online video technologies
including server software and computer media (video and audio) players. They
launched their online video store on
http://www.real.com/
where customers can download movies and video programming on a pay per view
basis.
We are
targeting the small business owner who wishes to establish his or her own online
video rental outlet. We expect, although no assurance can be given, that our
solution will appeal to businesses or organizations servicing ethnic
communities, political blocks, and various special interest
groups. Our solution will also appeal to the small and niche
producers of programming.
If we
properly execute our business plan, we will be able to leverage on these already
established trends including using the Internet to download movies for immediate
enjoyment. The turn-key solution that we will offer our customers will allow
them to quickly launch their web site, build up the inventory and be in
operation in a short period of time. Video store owners will be able to
advertise their online video store locally, regionally and internationally on a
continual basis.
COMPETITION
AND COMPETITIVE STRATEGY
Our
analysis of the market suggests that the online movie download industry is an
emerging market. Our research shows that there are several companies offering
video rental on the Internet. Some of these online outlets (such as
http://www.blockbuster.com
,
http://www.netflix.com/
,
http://www.zip.ca
)
rent programming and send them through the regular mail. We do not consider
these to be direct competitors to us or to our video store
customers.
Other
online outlets (such as
http://www.bellvideostore.ca
,
http://www.blockbuster.com/download
and
http://www.real.com
)
offer movie and video rental with the rented programming downloaded to the
customer’s computer. While these companies may be deemed to be direct
competitors of our customers, we do not perceive such companies to be our
competitors as they do not rent or sell their software or services to enable
third parties to engage in this type of business.
There are
several companies (such as Akamai Technologies Inc.) that offer video hosting
for customers. However, it does not offer a complete turn-key solution and are
simply video storage services that cater to individuals and businesses who want
to make their video available to the public.
MARKETING
& SALES STRATEGY
The use
of Internet is continuing to evolve as a global platform for doing
business. We believe our concept of having a turn-key style of
business for online video stores is one that fits well with the emerging trends
of e-commerce and the continuing growth of the world wide web. We intend to use
a multi-prong strategy to reach our target audience. Our major focus
in the first year will be to use Google Adwords program in order to drive
traffic to our own web site. Google, the number one ranked Internet search
engine, has developed an online program specifically for e-commerce business
like ours.
Cost
Per Click Advertising (CPC)
Google.com
uses a cost per click (“CPC”) advertising structure that will allow us
flexibility to control costs on a month-to-month basis. We will be able to
select targeted locations such as a city or state, province or country. A
keyword is one that is used by an Internet user who is doing an online search to
find out information on a specific topic. The CPC advertising campaign is a
time-tested marketing technique that has brought consistent results to many
other Internet based companies.
CPC
advertising has many advantages over traditional advertising mediums such as
print, radio, television, and direct mail including the following:
|
·
|
No
long term contracts.
|
|
·
|
Start
or stop your campaigns at any time
|
|
·
|
No
spending requirements
|
|
·
|
Charged
only when a web surfer clicks your
ad
|
|
·
|
Do
not have to purchase additional software to track you
campaigns
|
|
·
|
Ability
to edit ads & adjust budget in real
time
|
|
·
|
No
need for an ad agency to setup the
campaign
|
We
believe that this strategy offers us the greatest potential for marketing
exposure. With CPC advertising, we only will pay for the number of actual clicks
on our advertisement. Each time someone clicks on our Google ad, they will be
redirected to our web site. A CPC based advertising strategy is cost effective
because an advertiser only pays for the leads they receive. That translates into
a continuous monitoring process to count the actual number of clicks through
from the advertisement to our own web page.
Updating
the Content on the home page
Continuous
updates to the home page of our web site will encourage web visitors to return
over and over again. When web visitors can quickly find interesting content they
will stay longer on each visit and tell others about our website. Our marketing
campaign will monitor daily statistics and track favorite topics of our Internet
audience. Being able to update the home page is an integral part of our branding
strategy to keep a fresh look to the web site and encourage web visitors to
repeatedly return to our site. Over time we anticipate that the brand name
recognition from our online advertising and the updates featured on the home
page of our web site will lead to signed agreements with potential
customers.
Promoting
the web site
Management
will develop a series of meta-tags for each page of the web site. Meta-tags are
keywords that are added to a web page to make it easier to find specific web
page by search engines, web browser software and other applications. Search
engines like Google are designed to seek out these keywords when someone is
doing an Internet search for a specific topic. By including meta-tags such as
“online movies, own your own business,” we will be able to help drive more
traffic to our web site.
Another
marketing tactic we will use will be to offer free online seminars on how to
start and run an online video store. We will use a series of in-house press
releases to the media to provide the details including date, times and how to
sign up for free to attend web seminar. We will be able to use the home page of
our web site to promote these seminars that will start in month eleven of year
one and run once per quarter or more often if an increased level of interest in
such seminars is demonstrated.
We also
intend to develop an email distribution list. We will send our quarterly
newsletter, major announcements and press releases to those on our
list. Video store customers will also be able to receive the
newsletter. We will also target web sites, blogs, discussion forums that are
frequented by independent video producers.
SOURCES
AND AVAILABILITY OF PRODUCTS AND SUPPLIES
Our
software will be developed primarily by outside contractors and supervised
closely by our directors. The development of our product will
commence as soon as a minimum funding of $40,000 has been secured through the
sale of the Minimum Shares hereby.
DEPENDENCE
ON ONE OR A FEW MAJOR CUSTOMERS
Our
website will be available to the general public over the Internet. As our
licensing fees for those who want to own an online video store, and our monthly
rental charges will be priced for mass market consumption, we do not anticipate
dependence on one or a few major customers for the foreseeable
future.
PATENTS,
TRADEMARKS, LICENSES, FRANCHISE RESTRICTIONS AND CONTRACTUAL OBLIGATIONS &
CONCESSIONS
We have
not entered into any franchise agreements or other contracts that have given, or
could give rise to, obligations or concessions. We are planning to develop our
website and intend to protect it with copyright and trade secrecy laws. We have
not conducted any independent searches or other inquiry into patents or other
intellectual property which may be owned by others nor have we received
independent opinions of counsel on such matters. Beyond our trade
name, we do not hold any other intellectual property.
EFFECT
OF EXISTING OR PROBABLE GOVERNMENT REGULATION.
Existing
government regulations governs the distribution of video content and copyrights.
The Digital Millennium Copyright Act (the “DMCA”) is a United States copyright
law that was signed in 1998 to extend the reach of copyright, while limiting the
liability of the providers of on-line services for copyright infringement by
their users. The DMCA criminalizes production and dissemination of technology,
devices, or services intended to circumvent measures (commonly known as Digital
Rights Management or DRM) that control access to copyrighted
works. The DMCA further criminalizes the act of circumventing an
access control, whether or not there is actual infringement of copyright laws
itself and heightens the penalties for copyright infringement on the
Internet..
DMCA
Title II, the Online Copyright Infringement Liability Limitation Act (the
"OCILLA"), creates a safe harbor for online service providers (OSPs, including
ISPs) against copyright liability provided they adhere to and qualify for
certain prescribed safe harbor guidelines. OCILLA requires such OSPs
to promptly block access to material that allegedly infringes upon the
copyrights of third parties (or remove such material from their systems) upon
receipt of notification claiming infringement from a copyright holder or the
copyright holder's agent. OCILLA also includes a counter-notification provision
that offers OSPs a safe harbor from liability to their users, if the material in
fact does not infringe upon the copyrights of others.
We intend
to fully comply, and will take the necessary measures to ensure that our
customers also comply, with the provisions of DMCA. Further, when
appropriate, we intend to avail of the safe harbor protection provided under the
OCILLA.
RESEARCH
AND DEVELOPMENT ACTIVITIES AND COSTS
We have
not incurred any research and development costs to date. We have plans to
undertake certain research and development activities during the first year of
operation related to the development of the software and our website, which we
anticipate will cost approximately $17,250.
EMPLOYEES
We have
commenced only limited operations, and therefore currently have no employees
other than our officers/directors, who each spend up to approximately 15-20
hours a week on our business. We will consider retaining full-time management
and administrative support personnel as our business and operations
increase.
DESCRIPTION
OF PROPERTY
We do not
own interests in any real property.
REPORTS
TO SECURITY HOLDERS
We are
not currently a reporting company, but upon effectiveness of the registration
statement of which this prospectus forms a part, we will be required to file
reports with the SEC pursuant to the Securities Exchange Act of 1934, as
amended. These reports include annual reports on Form 10-K, quarterly reports on
Form 10-Q and current reports on Form 8-K. You may obtain copies of these
reports from the SEC’s Public Reference Room at 100 F Street, NE., Washington,
DC 20549, on official business days during the hours of 10 a.m. to 3 p.m. or on
the SEC’s website, at www.sec.gov. You may obtain information on the operation
of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
MANAGEMENT
The name,
age and position of each of our directors and executive officers are as
follows:
Name
|
|
Age
|
|
Position
|
|
Mr.
Fadi Zeidan
|
|
39
|
|
President,
Treasurer, Secretary and Director
|
Mr.
Ufuk Turk
|
|
31
|
|
Director
|
Mr.
Fadi Zeidan
Mr.
Zeidan is our President, Treasurer, and a director and has served in these
capacities since February 15, 2008. In addition, he was appointed as the
Company’s Secretary on August 18, 2008. Since November 2005, Mr. Zeidan has been
employedas a Project Manager with Ceridian Tax Services, a private company
engaged in providing accounting services to individuals and businesses. The
company is located in Fountain Valley, California. His duties included planning
scheduling, monitoring, evaluating and directing projects to ensure a
implementation of complete business solutions. Mr. Zeidan will continue to work
for Ceridian Tax Services on a full time basis. Between July 2000 and October
2005, Mr. Zeidan was a System Development Manager at Strategic Business
Solutions, a private company engaged in providing Accounting services to
individuals and businesses. The company is located in Santa Ana, California. Mr.
Zeidan graduated with a Bachelor Degree in Computer Science from California
State University, Long Beach, California in 1999.
Mr.
Ufuk Turk
Mr. Turk
is a director, and has served on our Board of Directors since February 15, 2008.
Since December 2006, Mr. Turk has been employed as a Software Specialist at
AbisZNet in Berlin, Germany, a private company involved in the development of
web-based applications. Between February 2005 and November 2006, Mr.
Turk worked on a student information management system for the Newport
International University in Turkey. Between February 2002 and August
2005, Mr. Turk worked as a Software Specialist for NTV Television in Istanbul,
Turkey, where he was responsible for e-commerce business application development
projects. Mr. Turk completed his degree in 2002 in Computer Science Engineering
from Newport University, Istanbul, Turkey. He previously attended Sakarya
University in Sakarya, Turkey where he completed a Computer Programming program
in 1999.
Board
Composition
Our
Bylaws provide that the Board of Directors shall consist of no less than 1, but
not more than 9 directors. Each director serves until his successor is elected
and qualified.
Committees
of the Board of Directors
We do not
presently have a separately constituted audit committee, compensation committee,
nominating committee, executive committee or any other committees of our Board
of Directors. Nor do we have an audit committee “financial expert.” As such, our
entire Board of Directors acts as our audit committee and handles matters
related to compensation and nominations of directors.
Potential
Conflicts of Interest
Since we
do not have an audit or compensation committee comprised of independent
directors, the functions that would have been performed by such committees are
performed by our directors. Thus, there is a potential conflict of interest in
that our directors and officers have the authority to determine issues
concerning management compensation and audit issues that may affect management
decisions. We are not aware of any other conflicts of interest with any of our
executives or directors.
Director
Independence
We are
not subject to listing requirements of any national securities exchange or
national securities association and, as a result, we are not at this time
required to have our board comprised of a majority of “independent directors.”
Our determination of independence of directors is made using the definition of
“independent director” contained in Rule 4200(a)(15) of the Marketplace Rules of
the NASDAQ Stock Market (“NASDAQ”), even though such definitions do not
currently apply to us because we are not listed on NASDAQ. We have determined
that none of our directors currently meet the definition of “independent” as
within the meaning of such rules as a result of their current positions as our
executive officers.
Significant
Employees
We have
no significant employees other than the executive officers/directors described
above.
Family
Relationships
There are
no familial relationships among any of our officers and
directors.
Involvement
in Certain Legal Proceedings
No
director, person nominated to become a director, executive officer, promoter or
control person of our company has, during the last five years: (i) been
convicted in or is currently subject to a pending a criminal proceeding
(excluding traffic violations and other minor offenses); (ii) been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to any federal or state securities or banking or commodities
laws including, without limitation, in any way limiting involvement in any
business activity, or finding any violation with respect to such law, nor (iii)
any bankruptcy petition been filed by or against the business of which such
person was an executive officer or a general partner, whether at the time of the
bankruptcy or for the two years prior thereto.
Stockholder
Communications with the Board
We have
not implemented a formal policy or procedure by which our stockholders can
communicate directly with our Board of Directors. Nevertheless, every effort has
been made to ensure that the views of stockholders are heard by the Board of
Directors or individual directors, as applicable, and that appropriate responses
are provided to stockholders in a timely manner. We believe that we are
responsive to stockholder communications, and therefore have not considered it
necessary to adopt a formal process for stockholder communications with our
Board. During the upcoming year, our Board will continue to monitor whether it
would be appropriate to adopt such a process.
EXECUTIVE
COMPENSATION
We have
not paid since our inception, nor do we owe, any compensation to our executive
officers, Mr. Fadi Zeidan. There are no arrangements or employment agreements
with our executive officer or directors pursuant to which they will be
compensated now in the future for any services provided as an executive officer,
and we do not anticipate entering into any such arrangements or agreements with
them in the foreseeable future.
Outstanding
Equity Awards at 2008 Fiscal Year-End
We do not
currently have a stock option plan nor any long-term incentive plans that
provide compensation intended to serve as incentive for performance. No
individual grants of stock options or other equity incentive awards have been
made to any executive officer or any director since our inception; accordingly,
none were outstanding at December 22, 2008.
Employment
Contracts, Termination of Employment, Change-in-Control
Arrangements
There are
currently no employments or other contracts or arrangements with our executive
officers. There are no compensation plans or arrangements, including payments to
be made by us, with respect to our officers, directors or consultants that would
result from the resignation, retirement or any other termination of such
directors, officers or consultants from us. There are no arrangements for
directors, officers, employees or consultants that would result from a
change-in-control.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
We have
not entered into any transaction nor are there any proposed transactions in
which any of our directors, executive officers, stockholders or any member of
the immediate family of any of the foregoing had or is to have a direct or
indirect material interest.
Our
officers and directors may be considered promoters of the Company due to their
participation in and management of the business since our
incorporation.
PRINCIPAL
SHAREHOLDERS
The
following table sets forth information regarding the beneficial ownership of our
common stock as of December 22, 2008 for:
|
·
|
each
person, or group of affiliated persons, known by us to beneficially own
more than 5% of our common stock;
|
|
·
|
each
of our executive officers;
|
|
·
|
each
of our directors; and
|
|
·
|
all
of our executive officers and directors as a
group.
|
We have
determined beneficial ownership in accordance with the rules of the Securities
and Exchange Commission. These rules generally attribute beneficial ownership of
securities to persons who possess sole or shared voting power or investment
power with respect to those securities. The person is also deemed to be a
beneficial owner of any security of which that person has a right to acquire
beneficial ownership within 60 days. Unless otherwise indicated, the persons or
entities identified in this table have sole voting and investment power with
respect to all shares shown as beneficially owned by them, subject to applicable
community property laws, and the address for each person listed in the table is
c/o Surf A Movie Solutions Inc., #149, 19744 Beach Boulevard, Huntington Beach,
CA, 92648.
The
percentage ownership information shown in the table below is calculated based on
4,000,000 shares of our common stock issued and outstanding as of December 22,
2008. We do not have any outstanding options, warrants or other securities
exercisable for or convertible into shares of our common stock.
Title
of Class
|
Name of Beneficial
Owner
|
|
Amount and Nature
of Beneficial Ownership
|
|
|
Percentage of Class
|
|
Common
Stock
|
Mr.
Fadi Zeidan, President and Director
|
|
|
2,600,000
|
|
|
|
65.00
|
%
|
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
Mr.
Ufuk Turk
Director
|
|
|
1,400,000
|
|
|
|
35.00
|
%
|
|
|
|
|
|
|
|
|
|
|
All
officers and directors as a group (2 persons)
|
|
|
|
4,000,000
|
|
|
|
100.00
|
%
|
We are
unaware of any contract or other arrangement the operation of which may at a
subsequent date result in a change in control of our Company.
We do not
have any issued and outstanding securities that are convertible into common
stock. None of our stockholders are entitled to registration
rights.
PLAN
OF DISTRIBUTION, TERMS OF THE OFFERING
There
Is No Current Market for Our Shares of Common Stock
There is
currently no market for our shares of common stock. We cannot give you any
assurance that the shares you purchase will ever have a market or that if a
market for our shares ever develops, that you will be able to sell your shares.
In addition, even if a public market for our shares develops, there is no
assurance that a secondary public market will be sustained.
The
shares you purchase are not traded or listed on any exchange or quotation
medium. After the effective date of the registration statement, we intend to
seek a market maker to file an application with the Financial Industry
Regulatory Authority, Inc., or FINRA, to have our common stock quoted on the
Over-the-Counter Bulletin Board. We will have to satisfy certain
criteria in order for our application to be accepted. We do not currently have a
market maker who is willing to participate in this application process, and even
if we identify a market maker, there can be no assurance as to whether we will
meet the requisite criteria or that our application will be accepted. Our common
stock may never be quoted on the Over-the-Counter Bulletin Board, or, even if
quoted, a public market may not materialize. There can be no assurance that an
active trading market for our shares will develop, or, if developed, that it
will be sustained.
The
Over-the-Counter Bulletin Board is maintained by the Financial Industry
Regulatory Authority, Inc. The securities traded on the Over-the-Counter
Bulletin Board are not listed or traded on the floor of an organized national or
regional stock exchange. Instead, these securities transactions are conducted
through a telephone and computer network connecting dealers in stocks.
Over-the-counter stocks are traditionally smaller companies that do not meet the
financial and other listing requirements of a regional or national stock
exchange.
Even if
our shares are quoted on the Over-the-Counter Bulletin Board, a purchaser of our
shares may not be able to resell the shares. Broker-dealers may be discouraged
from effecting transactions in our shares because they will be considered penny
stocks and will be subject to the penny stock rules. Rules 15g-1 through 15g-9
promulgated under the Securities Exchange Act of 1934, as amended, impose sales
practice and disclosure requirements on brokers-dealers who make a market in a
"penny stock." A penny stock generally includes equity securities (other than
securities registered on some national securities exchanges) that has a market
price of less than $5.00 per share. Under the penny stock regulations, a
broker-dealer selling penny stock to anyone other than an established customer
or "accredited investor" (generally, an individual with net worth in excess of
$1,000,000 or an annual income exceeding $200,000, or $300,000 together with his
or her spouse) must make a special suitability determination for the purchaser
and must receive the purchaser's written consent to the transaction prior to
sale, unless the broker-dealer or the transaction is otherwise exempt. In
addition, the penny stock regulations require the broker-dealer to deliver,
prior to any transaction involving a penny stock, a disclosure schedule prepared
by the SEC relating to the penny stock market, unless the broker-dealer or the
transaction is otherwise exempt. A broker-dealer is also required to disclose
commissions payable to the broker-dealer and the registered representative and
current quotations for the securities. Finally, a broker-dealer is required to
send monthly statements disclosing recent price information with respect to the
penny stock held in a customer's account and information with respect to the
limited market in penny stocks.
The
additional sales practice and disclosure requirements imposed upon
broker-dealers may discourage broker-dealers from effecting transactions in our
shares, which could severely limit the market liquidity of the shares and impede
the sale of our shares in the secondary market, assuming one
develops.
The
Offering will be Managed by Our Officers and Directors
We are
offering up to a minimum of 400,000 (the “Minimum Shares”) and a maximum of
600,000 (the “Maximum Shares”) shares of common stock. The offering price is
$0.10 per share. The Offering will be for a period of 180 days from the
effective date and may be extended for an additional 90 days if we choose to do
so. In our sole discretion, we have the right to terminate the Offering at any
time, even before we have sold the Minimum Shares, or, following the sale of the
Minimum Shares, before we have sold the Maximum Shares. There are no specific
events which might trigger our decision to terminate the Offering.
Funds
received for subscriptions of up to the Minimum Shares will be placed into
escrow. In the event that subscriptions for all of the Minimum Shares
are not received within 180 calendar days after the effective date, all money
received by us and being held in escrow will be promptly returned to
subscribers, without interest or deduction. The Offering may be discontinued or
declared to be completed at any time by us. In the event that an action is taken
by a creditor prior to our receipt of subscriptions for the Minimum Shares, such
action could delay or even preclude us from refunding your money.
In the
event that subscriptions for at least the Minimum Shares are received within 180
day offering period, all money received and held in escrow will promptly be
released to us, and we will use such funds in the execution of our business
plan. In the event that less than the Minimum Shares is sold within the 180 day
offering period and our Board of Directors believe that an extension of time
would result in our receipt of subscriptions for the Minimum Shares, the
Board may then decide, by majority vote to extend the Offering for 90 calendar
days. All monies from rejected subscriptions will be returned
immediately by us to the subscriber, without interest or
deductions.
Any
subscriptions in excess of the Minimum Shares, up the number of Maximum Shares,
will be accepted on a rolling basis. Once we accept subscriptions in excess of
the Minimum Shares, the funds will be deposited into an account maintained by us
and be immediately available to us. There are no investor protections for the
return of subscription funds once the Minimum Shares are subscribed and
accepted. Certificates for shares purchased will be issued and distributed by
our transfer agent promptly after a subscription is accepted and "good funds"
are received in our account.
If we are
unable to raise enough money to effectuate our business plan, we will attempt to
raise additional funds from a second public offering, a private placement, or
loans. At the present time, we have not made any plans to raise additional money
and there is no assurance that we would be able to raise additional money in the
future. If we need additional money and are not successful, we will have to
suspend or cease operations.
Our
officers and directors will manage the sale of the Shares in this Offering. The
officers and directors will receive no commission from the sale of the shares
nor will they register as a broker-dealer pursuant to Section 15 of the
Securities Exchange Act of 1934 in reliance upon Rule 3(a)4-1. Rule 3(a)4-1 sets
forth those conditions under which a person associated with an issuer may
participate in the offering of the issuer's securities and not be deemed to be a
broker-dealer.
Each of
our officers and directors satisfies the requirements of Rule 3(a)4-1 in that
neither of them:
|
1.
|
Are
subject to a statutory disqualification, as that term is defined in
Section 3(a)(39) of the Act, at the time of their
participation;
|
|
2.
|
Are
being compensated in connection with his participation by the payment of
commissions or other remuneration based either directly or indirectly on
transactions in
securities;
|
|
3.
|
Are,
at the time of his participation, an associated person of a broker-
dealer; and
|
|
4.
|
Meets
the conditions of Paragraph (a)(4)(ii) of Rule 3(a)4-1 of the Exchange
Act, in that he (A) primarily perform, or is intended primarily to perform
at the end of the offering, substantial duties for or on behalf of the
issuer otherwise than in connection with transactions in securities; and
(B) he is not a broker or dealer, or an associated person of a
broker or dealer, within the preceding twelve (12) months; and (C) he does
not participate in selling and offering of securities for any issuer more
than once every twelve (12) months other than in reliance on Paragraphs
(a)(4)(i) or (a)(4)(iii).
|
As our
officers and directors will sell the shares being offered pursuant to this
offering, Regulation M prohibits the Company and its officers and directors from
certain types of trading activities during the time of distribution of our
securities. Specifically, Regulation M prohibits our each of them from bidding
for or purchasing any common stock or attempting to induce any other person to
purchase any common stock, until the distribution of our securities pursuant to
this offering has ended.
We have
no intention of inviting broker-dealer participation in this
Offering.
Offering
Period and Expiration Date
This
Offering will commence on the effective date of the registration statement of
which this prospectus is a part, as determined by the Securities and Exchange
Commission, and will continue for a period of 180 days. We may extend the
Offering for an additional 90 days, at our sole discretion, unless the offering
is completed or otherwise terminated by us.
Procedures
for Subscribing
If you
decide to subscribe for any shares in Offering, you must deliver a check or
certified funds for acceptance or rejection. There are no minimum share purchase
requirements for individual investors. All checks for subscriptions must be made
payable to "Surf A Movie Solutions Inc."
Funds
received for subscriptions of up to the Minimum Shares will be placed into
escrow. In the event that subscriptions for all of the Minimum Shares
are not received within 180 calendar days after the effective date, all money
received by us and being held in escrow will be promptly returned to
subscribers, without interest or deduction. In the event that
subscriptions for at least the Minimum Shares are received within 180 day
offering period, all money received and held in escrow will promptly be released
to us, and we will use such funds in the execution of our business
plan.
Any
subscriptions in excess of the Minimum Shares, up the number of Maximum Shares,
will be accepted on a rolling basis. Once we accept subscriptions in excess of
the Minimum Shares, the funds will be deposited into an account maintained by us
and be immediately available to us. There are no investor protections for the
return of subscription funds once the Minimum Shares are subscribed and
accepted. Certificates for shares purchased will be issued and distributed by
our transfer agent promptly after a subscription is accepted and "good funds"
are received in our account.
Right
to Reject Subscriptions
We
maintain the right to accept or reject subscriptions in whole or in part, for
any reason or for no reason. All monies from rejected subscriptions will be
returned immediately by us to the subscriber, without interest or deductions.
Subscriptions for securities will be accepted or rejected within 48 hours of our
having received them.
DESCRIPTION
OF SECURITIES
Common
Stock
Our
authorized capital stock consists of 50,000,000 shares of common stock, par
value $0.001 per share.
The
holders of our common stock:
|
·
|
Have
equal ratable rights to dividends from funds legally available therefore,
when, as and if declared by our Board of
Directors;
|
|
·
|
Are
entitled to share ratably in all of our assets available for distribution
to holders of common stock upon liquidation, dissolution or winding up of
our affairs;
|
|
·
|
Do
not have pre-emptive, subscription or conversion rights and there are no
redemption or sinking fund provisions or rights;
and
|
|
·
|
Are
entitled to one non-cumulative vote per share on all matters on which
stockholders may vote.
|
The
shares of common stock are not subject to any future call or assessment and all
have equal voting rights. There are no special rights or restrictions of any
nature attached to any of the common shares and they all rank at equal rate or
pari passu
, each with
the other, as to all benefits, which might accrue to the holders of the common
shares. All registered stockholders are entitled to receive a notice of any
general annual meeting to be convened by our Board of Directors.
At any
general meeting, subject to the restrictions on joint registered owners of
common shares, every stockholder who is present in person or by proxy and
entitled to vote has one vote, and on a poll every stockholder has one vote for
each share of common stock of which he is the registered owner and may exercise
such vote either in person or by proxy. To the knowledge of our management, at
the date hereof, our officers and directors are the only persons to exercise
control, directly or indirectly, over more than 10% of our outstanding common
shares. See “Security Ownership of Certain Beneficial Owners and
Management.”
We refer
you to our Articles of Incorporation and Bylaws, copies of which were filed with
the registration statement of which this prospectus is a part, and to the
applicable statutes of the State of Nevada for a more complete description of
the rights and liabilities of holders of our securities.
As of
December 22, 2008, there were 4,000,000 shares of our common stock issued and
outstanding.
Options,
Warrants and Rights
There are
no outstanding options, warrants, or similar rights to purchase any of our
securities.
Non-cumulative
Voting
Holders
of shares of our common stock do not have cumulative voting rights, which means
that the holders of more than 50% of the outstanding shares, voting for the
election of directors, can elect all of the directors to be elected, if they so
choose, and, in such event, the holders of the remaining shares will not be able
to elect any of our directors.
Cash
Dividends
As of the
date of this prospectus, we have not paid any cash dividends to stockholders.
The declaration of any future cash dividend will be at the discretion of our
Board of Directors and will depend upon our earnings, if any, our capital
requirements and financial position, our general economic and other pertinent
conditions. It is our present intention not to pay any cash dividends in the
foreseeable future, but rather to reinvest earnings, if any, into our
business.
Transfer
Agent
The
Company does not currently have a Transfer Agent but is in the process of
retaining one.
SHARES
ELIGIBLE FOR FUTURE SALE
There is
no public market for our common stock. We cannot predict the effect, if any,
that market sales of shares of our common stock or the availability of shares of
our common stock for sale will have on the market price of our common stock.
Sales of substantial amounts of our common stock in the public market could
adversely affect the market prices of our common stock and could impair our
future ability to raise capital through the sale of our equity
securities.
Upon
completion of this Offering, based on our outstanding shares as of December 22,
2008, we will have outstanding an aggregate of 4,400,000 shares of common stock
outstanding, assuming that only the Minimum Shares is subscribed to, and an
aggregate of 4,600,000 shares of common stock in the event that the Maximum
Shares is subscribed to. Of these shares, upon effectiveness of the registration
statement of which this prospectus forms a part, all shares covered hereby and
sold under the Offering will be freely transferable without restriction or
further registration under the Securities Act.
The
remaining 4,000,000 restricted shares of common stock to be outstanding are
owned by our executive officers and directors, known as our
“affiliates.” As such, the remaining shares of common stock may not
be resold in the public market except in compliance with the registration
requirements of the Securities Act or under an exemption under Rule 144 under
the Securities Act, if available, or otherwise.
Rule
144
In
general, under Rule 144 as currently in effect, a person who is not one of our
affiliates and who is not deemed to have been one of our affiliates at any time
during the three months preceding a sale and who has beneficially owned shares
of our common stock that are deemed restricted securities for at least six
months would be entitled after such six-month holding period to sell the common
stock held by such person, subject to the continued availability of current
public information about us (which current public information requirement is
eliminated after a one-year holding period).
A person
who is one of our affiliates, or has been an affiliate of ours at any time
during the three months preceding a sale, and who has beneficially owned shares
of our common stock that are deemed restricted securities for at least six
months would be entitled after such six-month holding period to sell his or her
securities, provided that he or she sells an amount that does not exceed 1% of
the number of shares of our common stock then outstanding (or 44,000 shares if
the Minimum Shares is subscribed to, or 46,000 in the event that the Maximum
Shares is subscribed under this Offering) immediately after this Offering (or,
if our common stock is listed on a national securities exchange, the average
weekly trading volume of the shares during the four calendar weeks preceding the
filing of a notice on Form 144 with respect to the sale), subject to the
continued availability of current public information about us, compliance with
certain manner of sale provisions, and the filing of a Form 144 notice of sale
if the sale is for an amount in excess of 5,000 shares or for an aggregate sale
price of more than $50,000 in a three-month period.
Rule 144
is not available for resales of restricted securities of shell companies or
former shell companies until one year elapses from the time that such company is
no longer considered a shell company.
LEGAL
MATTERS
We know
of no existing or pending legal proceedings against us, nor are we involved as a
plaintiff in any proceeding or pending litigation. There are no proceedings in
which any of our directors, officers or any of their respective affiliates, or
any beneficial stockholder, is an adverse party or has a material interest
adverse to our interest. Our address for service of process in Nevada
is c/o Nevada Agency and Trust Company, 50 West Liberty Street, Suite 880, Reno,
Nevada 89511.
LEGAL
REPRESENTATION
Gersten
Savage LLP, New York, New York, will pass upon the validity of the common stock
offered hereby.
EXPERTS
The
financial statements included in this prospectus, and in the registration
statement of which this prospectus is a part, have been audited by Malone &
Bailey, PC an independent registered public accounting firm, to the extent and
for the period set forth in their report appearing elsewhere herein and in the
registration statement, and are included in reliance upon such report given upon
the authority of said firm as experts in auditing and accounting.
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 common stock was employed on a contingency basis or had, or
is to receive, in connection with the offering, a substantial interest, directly
or indirectly, 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.
WHERE
YOU CAN GET MORE INFORMATION
In
accordance with the Securities Act of 1933, we are filing with the SEC a
registration statement on Form S-1, of which this prospectus is a part, covering
the securities being offered by the Registrant. As permitted by rules and
regulations of the SEC, this prospectus does not contain all of the information
set forth in the registration statement. For further information regarding both
our Company and our common stock, we refer you to the registration statement,
including all exhibits and schedules, which you may inspect without charge at
the public reference facilities of the SEC’s Washington, D.C. office, 100 F
Street, N.E., Washington, D.C. 20549, on official business days during the hours
of 10am and 3pm, and on the SEC Internet site at http:\\www.sec.gov. Information
regarding the operation of the public reference rooms may be obtained by calling
the SEC at 1-800-SEC-0330.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION
The
following discussion of our financial condition and results of operation should
be read in conjunction with the financial statements and related notes that
appear elsewhere in this prospectus. This discussion contains forward-looking
statements and information relating to our business that reflect our current
views and assumptions with respect to future events and are subject to risks and
uncertainties, including the risks in the section entitled Risk Factors
beginning on page 4, that may cause our or our industry’s actual results, levels
of activity, performance or achievements to be materially different from any
future results, levels of activity, performance or achievements expressed or
implied by these forward-looking statements.
These
forward-looking statements speak only as of the date of this prospectus.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, or achievements. Except as required by applicable law, including the
securities laws of the United States, we expressly disclaim any obligation or
undertaking to disseminate any update or revisions of any of the forward-looking
statements to reflect any change in our expectations with regard thereto or to
conform these statements to actual results.
Overview
Surf A
Movie Solutions Inc. was incorporated under the laws of the state of Nevada on
December 18, 2007 and is engaged in the development, sales and marketing of
online video stores.
Our
offices are currently located at #149, 19744 Beach Boulevard, Huntington Beach,
CA, 92648. Our telephone number is (714) 475-3516. We have a website at
www.surfamovie.com
,
however, the information contained on our website does not form a part of the
registration statement of which this prospectus is a part. Our website is
currently in development stage and inaccessible. We expect it to be
fully developed with all intended functions and features and ready for public
launch by within one year from the date the Offering is completed.
We are a
development stage company that has not generated any revenue and has had limited
operations to date. From December 18, 2007 (inception) to September 30, 2008, we
have incurred accumulated net losses of $5,874. As of September 30, 2008, we had
$18,980 in current assets and current liabilities of $4,854.
We are in
the development stage of creating a “turn-key” solution to enable customers to
open a video rental storefront on the Internet. A “turn-key” solution
is an easy to use solution that includes all tools and features necessary to
enable our customers to offer download-based video rental service and is
intended to enable our customers to set-up their video store without the need
for third party tools. Our product will enable video store customers to download
rented movies to their computers to be played using Microsoft Media
Player. We believe that online shopping has become a driving force in
the continued growth of the Internet. We further believe that the ability to
download movies and other forms of entertainment directly to their computers
will become an increasingly larger segment of the on-line shopping market. We
plan to develop a turn-key online video store operation that will allow the
store owner to stock the various types of movies he or she chooses to offer to
his or her customers on a pay-per-view basis.
Current
trends show that people are using the Internet as a source of entertainment. The
technology for making movies has continued to increase in recent years while the
cost to acquire this technology has become more affordable. Online videos
currently available cover a wide range of titles from home movies to premium
quality movies. We believe, although no assurance can be given, that the use of
online videos will continue to increase in popularity and sophistication and as
such, we believe our plan to offer turn-key web sites for online video
businesses is set to launch at the right time in history.
We plan
to charge an initial fee of $1,000 to our online customers wishing to launch
online video rental stores. We will also be receiving 20% of the revenue from
rentals generated by our customers’ online video stores. We will
provide them with the infrastructure to get their business going and
subsequently earn a portion of revenue from each downloaded video from their web
site. We believe, although no assurance can be given, that this business model
will establish a number of ongoing revenue streams that will contribute to our
bottom line for years to come.
Plan
of Operations
We are in
the formative phase of development. Our plan is to develop a product that will
allow us to offer a turn-key online video rental store to customers wishing to
offer such services to their potential subscribers. Our online service will give
our customers a large level of control over the feel and look of their online
video store and it will come with the supporting infrastructure to run the
online video store. Each of our customers will be able to customize their web
site with brand name markings and icons to distinguish themselves in the
marketplace. We also intend to provide our customers with training on the
administrative and reporting functions during an orientation period, along with
ongoing customer support.
As our
business begins to develop, we plan to post an “information only” web site
during the first year of operations to begin to promote our company and our
product. The goal of this effort will be to create a presence on the Internet
and attract potential customers to inquire about our services. Management plans
to outsource product development to an offshore contractor to control
costs.
Our goals
for the next twelve months, provided the necessary funding is available, are
to:
|
·
|
Choose a Software Development
Contractor:
We will immediately begin to interview one or more
software companies or individual contractors for the development of our
website and related software. We will request bids or quotations from
several potential candidates. Our final choice will be based on the
combination of competitive price, experience, ability to meet deadlines
and stay within a budget. We expect the selection process to take
approximately one month.
|
|
·
|
Specifications and High-Level
Design:
We expect that we will complete specifications for the
product and finish high-level design two months after the selection of a
software contractor. This part of our design work will include the
specifications for the different modules to be developed. Specifications
and high level design will be an interactive process between our
management and the software contractor. We expect that this
task will take approximately two months to
complete.
|
|
·
|
Selection of a Data
Center:
We intend to lease servers in a data center. We
will lease one server for development in month 2 and another two servers
for production in month 9. The lease on the development server is expected
to be $100. The production servers will be higher end with multiple
high-capacity hard drives. The product servers will be deployed
in failover mode so if the primary server fails, the standby servers will
take over. We expect that the primary server will cost us $300 per month
and the standby server will cost $200 per month. The cost of leasing
servers includes colocation in a data center and certain level of traffic.
We expect however to easily exceed the traffic levels when we go into
production. The cost and quality of connectivity will be key in the
selection of the data center. We will evaluate the following factors in
making our selection:
|
> reputable data center with
proven track record;
> emergency recovery
plan;
> cost of traffic;
and
> prices within our
budget.
We expect
that the data center selection process will take approximately one month and
will run concurrently with the Specification and High-Level Design Task
described above.
|
·
|
Design of Web
Interfaces:
The usability of our web site and its visual appeal are
very important to the success of our Internet-based services. We will hire
a web interface designer to work with our directors on the layout of the
web pages and to optimize how the web pages interact with the user. We
expect that this task will take approximately two months to
complete.
|
|
·
|
Surf a Movie Website
Development:
Our web site will contain information to help an
entity evaluate our solution to open an online movie rental business. It
will enable the entity to sign up for our service. Once they sign up and
payment is made via PayPal, an account will be created, which will be
protected by a user specific username and password. Our customers will be
able to login to their portal through our web site and proceed with the
creation of their online store. Our web site will also contain examples
and templates of video stores. We anticipate that the
development of our website will take approximately one month to
complete.
|
|
·
|
Customer Portal Development:
When a web site visitor wishes to make a purchase (i.e., rent a
video from the online video store) he or she will be required to create a
user or a customer account which will be protected by a password of his or
her choice. After the account is created, he or she will be able to
proceed to make the payment for their video selection(s). As
soon as a payment confirmation is generated from PayPal, the purchased
videos will be available for download for a limited period of time. The
customer will be able to login to his or her account and download the
videos within the specified period. The next time the customer wishes to
make a purchase, he or she will simply have to login to their existing
account.
We
anticipate that it will take approximately one month to develop the
customer portal feature.
|
|
·
|
Store Owners Portal
Development:
Each video store owner who purchases one of our
turn-key operations will be required to begin by completing the online
registration form. We will review each online registration form for
approval. Once approved, a “Business Owner’s Account” will be
created, and within the portal, the video store owners will find the
necessary information and tools to create their store. Among other
things, they will be able to add and edit categories, add videos,
descriptions, trailers, top 10 lists, and top videos by category.
Helpful hints and instructions will be included in each step of the portal
to assist the store owner in the set-up and maintenance phase of the
online store. We expect that it will take approximately four
months to develop the store owners’
portal.
|
|
·
|
Surf A Movie Administrative
Portal Development:
This portal will allow us to approve or suspend
an online video store if necessary. It will enable us to append notes to
document our relationship and correspondence with each individual store
owner. In addition, this feature will automatically calculate the amount
of rental revenue (minus fees) that we owe to a store owner. Further, it
will enable our directors and staff to access a wide range of reporting
related to sales and where end users are coming from. We expect that
development of this feature will take approximately one month to
complete.
|
|
·
|
Digital Rights
Management
: We will be implementing Microsoft Digital Right
Management (“DRM”) system to prevent the copying and exchange of copies of
online movies between multiple persons, in an effort to protect the
intellectual property of the video store owners and their revenue stream.
We expect that it will take approximately one month to implement the DRM
with our site.
|
Activities
to Date
We were
incorporated in the State of Nevada on December 18, 2007. We are a
development stage company. From our inception to date, we have not
generated any revenues and our operations have been limited to organizational
matters, the development of our business, initial steps for the creation of our
website and efforts related to becoming a public company.
Since our
inception we have not made any purchases or sales, nor have we been involved in
mergers, acquisitions or consolidations. However, management has done
extensive research on the Internet and determined that:
|
·
|
The
market is ready for our type of
service;
|
|
·
|
No
direct competition in our niche exists - we could not find an equivalent
product targeting the small business
segment;
|
|
·
|
The
technological challenges are surmountable;
and
|
|
·
|
The
cost of implementation and delivery of service is modest for a company of
our size.
|
Directors
of the company have already begun discussions with legal counsel, transfer agent
and Certified Public Accounting firm to ensure that we will meet all the
compliance and disclosure requirements of being a public company. An office
space has been located in a shared facility that offers us room to grow if the
need arises within year two and going forward.
Expenditures
The
following chart provides an overview of our budgeted expenditures by significant
area of activity over the twelve months after this Offering is
completed.
|
|
Minimum
|
|
|
Average
|
|
|
Maximum
|
|
Accounting
& Legal
|
|
$
|
8,000.00
|
|
|
$
|
8,000.00
|
|
|
$
|
8,000.00
|
|
Transfer
Agent
|
|
$
|
2,500.00
|
|
|
$
|
2,500.00
|
|
|
$
|
2,500.00
|
|
Server
Leasing & hosting
|
|
$
|
3,100.00
|
|
|
$
|
3,100.00
|
|
|
$
|
3,100.00
|
|
Additional
Data Traffic
|
|
$
|
400.00
|
|
|
$
|
400.00
|
|
|
$
|
400.00
|
|
Product
Development
|
|
$
|
14,900.00
|
|
|
$
|
17,250.00
|
|
|
$
|
19,400.00
|
|
Telephone
|
|
$
|
200.00
|
|
|
$
|
200.00
|
|
|
$
|
200.00
|
|
Web
hosting
|
|
$
|
60.00
|
|
|
$
|
60.00
|
|
|
$
|
60.00
|
|
Corporate
and marketing collateral
|
|
$
|
2,450.00
|
|
|
$
|
2,450.00
|
|
|
$
|
2,450.00
|
|
Marketing
|
|
$
|
3,000.00
|
|
|
$
|
6,000.00
|
|
|
$
|
13,000.00
|
|
Sales
Support Staff
|
|
$
|
0.00
|
|
|
$
|
2,800.00
|
|
|
$
|
2,800.00
|
|
Office
Equipment
|
|
$
|
1,200.00
|
|
|
$
|
2,000.00
|
|
|
$
|
2,000.00
|
|
Office
Rental
|
|
$
|
2,280.00
|
|
|
$
|
2,280.00
|
|
|
$
|
2,280.00
|
|
Office
Supplies
|
|
$
|
1,200.00
|
|
|
$
|
1,600.00
|
|
|
$
|
1,800.00
|
|
Misc.
Expenditure
|
|
$
|
7100.00
|
|
|
$
|
1,360.00
|
|
|
$
|
2,010.00
|
|
Total
|
|
$
|
40,000.00
|
|
|
$
|
50,000.00
|
|
|
$
|
60,000.00
|
|
Milestones
Below is
a brief description of our planned activities which we expect to commence
immediately after the Offering is completed and the proceeds have been received
and accepted.
Months
1 to 3
|
·
|
hire
a software development contractor and start work on the overall product
design;
|
|
|
|
|
·
|
complete
the development of specifications and the high level design for the
product;
|
|
|
|
|
·
|
sign
an agreement with a web hosting
company;
|
|
|
|
|
·
|
hire
a graphic web interface
designer;
|
|
|
|
|
·
|
launch
an “information only” web
site;
|
|
|
|
|
·
|
sign
an agreement with a data center for the lease and co-location of computer
server; and
|
|
|
|
|
·
|
move
into shared office space and buy office
supplies.
|
Months
4 to 6
|
·
|
Finalize
corporate and marketing materials, such as brochures, letter heads, email
and letter templates, and the like;
|
|
|
|
|
·
|
finalize
the work on the web interfaces and the feel and look of the
website;
|
|
|
|
|
·
|
work
with the contractor on the development of the website and
software;
|
|
|
|
|
·
|
review
targeted “milestones” and adjust workloads, if
necessary;
|
|
|
|
|
·
|
commence
the Google Adwords advertising campaign to attract potential video store
owners;
|
|
|
|
|
·
|
prepare
marketing contracts for the video store owners; and
|
|
|
|
|
·
|
monitor
the hits on our web site and arrange for follow up with marketing
contacts.
|
Months
7 to 9
|
·
|
Continue
work on all development of all
portals;
|
|
|
|
|
·
|
evaluate
online ads, increase the frequency and monitor results
weekly;
|
|
|
|
|
·
|
begin
work on training documentation for the video store
owners;
|
|
|
|
|
·
|
review
targeted “milestones” timetable and adjust workload, if necessary;
and
|
|
·
|
begin
discussions with four to six prospective beta customers for
testing.
|
Months
10 to 12
|
·
|
Complete
development of website, software and all intended features and
functions;
|
|
·
|
conduct
our Beta trial and complete modifications to our product trials with
several beta customers;
|
|
·
|
correct
any detected discovered defects;
|
|
·
|
interview
and hire sales support staff to start work in month
eleven;
|
|
·
|
promote
the upcoming official of our site in Google online ads;
and
|
|
·
|
launch
the product in month 12.
|
Results
of Operations
During
the period from December 18, 2007 (date of inception) through September 30,
2008, we incurred a net loss of 5,874. This loss consisted primarily of legal
and accounting fees. Since our incorporation, we have sold 4,000,000 shares of
common stock to Fadi Zeidan and Ufuk Turk for total gross proceeds of
$20,000.
Purchase
or Sale of Equipment
We have
not purchased or sold, and we do not expect over the next twelve months to
purchase or sell, any plants or significant equipment.
Revenues
We had no
revenues for the period from December 18, 2007 (date of inception) through
September 30, 2008. We believe that we will be able to commence the
marketing of our website immediately following the public launch of our
completed product, which will be approximately twelve months following the
completion of the Offering. We expect to begin generating revenues approximately
three months following the public launch of our product.
Liquidity
and Capital Resources
In the
opinion of our management, additional funding is required to meet our
development goals for the next twelve months. The estimated funding we require
during the next twelve months period is between $40,000 and $60,000, which is
the amount we expect to raise from the sale of our shares in this
Offering. These estimated expenditures are described in detail above under
“Expenditures.” The length of time during which we will be able to
satisfy our cash requirements depends on how quickly our company can generate
revenue and how much revenue can be generated. We estimate that our
current cash balances will be extinguished by April 2010 provided we do not have
any unanticipated expenses. Although there can be no assurance at present,
we anticipate to be in a position to generate revenues beginning
approximately three months following the launch of our website or approximately
fifteen months from the completion of this Offering.
We have
not yet generated any revenue from our operations. We will require additional
funds to implement our plans. These funds may be raised through equity
financing, debt financing, or other sources, which may result in the dilution in
the equity ownership of our shares. We will also need more funds if the costs of
the development of our website costs greater than we have budgeted. We will also
require additional financing to sustain our business operations if we are not
successful in earning revenues. We currently do not have any arrangements
regarding this Offering or following this Offering for further financing
and we may not be able to obtain financing when required. Our future is
dependent upon our ability to obtain further financing, the successful
development of our website, a successful marketing and promotion program,
attracting and, further in the future, achieving a profitable level of
operations. The issuance of additional equity securities by us could result in a
significant dilution in the equity interests of our current stockholders.
Obtaining commercial loans, assuming those loans would be available, will
increase our liabilities and future cash commitments.
There are
no assurances that we will be able to obtain further funds required for our
continued operations. As widely reported, the global and domestic financial
markets have been extremely volatile in recent months. If such
conditions and constraints continue, we may not be able to acquire additional
funds either through credit markets or through equity markets. Even if
additional financing is available, it may not be available on terms we find
favorable. At this time, there are no anticipated sources of additional funds in
place. Failure to secure the needed additional financing will have an adverse
effect on our ability to remain in business.
Recently
Issued Accounting Pronouncements
We do not
expect the adoption of any recently issued accounting pronouncements to have a
significant impact on our net results of operations, financial position, or cash
flows.
Off-Balance
Sheet Arrangements
We have
no off-balance sheet arrangements.
FINANCIAL
STATEMENTS
Surf
A Movie Solutions Inc.
(A
Development Stage Company)
Financial
Statements
For
the period ended September 30, 2008
Report of
Independent Registered Public Accounting Firm
To the
Board of Directors
Surf
a Movie Inc.
(A
Development Stage Company)
Huntington
Beach, California
We have
audited the accompanying balance sheet of Surf a Movie Inc. (a development stage
company) as of September 30, 2008, and the related statement of operations,
stockholders' deficit, and cash flows for the period from inception (December
18, 2007) to September 30, 2008. These financial statements are the
responsibility of Surf a Movie’s management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform an audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Surf a Movie Inc. as of September
30, 2008 and the results of its operations and its cash flows for the period
from inception (December 18, 2007) through September 30, 2008, in conformity
with accounting principles generally accepted in the United States of
America.
Malone
& Bailey, PC
Houston,
Texas
www.malone-bailey.com
December
29, 2008
Surf
A Movie Solutions Inc.
(A
Development Stage Company)
Balance
Sheet
|
|
September 30,
2008
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Cash
|
|
$
|
16,280
|
|
Prepaid
expenses
|
|
|
2,700
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
18,980
|
|
|
|
|
|
|
Liability
|
|
|
|
|
|
|
|
|
|
Accounts
payable and accrued liabilities
|
|
$
|
4,854
|
|
|
|
|
|
|
Total
Liabilities
|
|
$
|
4,854
|
|
|
|
|
|
|
Stockholders`
Equity
|
|
|
|
|
|
|
|
|
|
Common
stock, $0.001 par value; 50,000,000 shares authorized; 4,000,000 shares
outstanding
|
|
$
|
4,000
|
|
Additional
paid in capital
|
|
$
|
16,000
|
|
Deficit
accumulated during the development stage
|
|
$
|
(5,874
|
)
|
|
|
|
|
|
Total
Stockholders’ Equity
|
|
$
|
14,126
|
|
|
|
|
|
|
Total
Liabilities and Stockholders’ Equity
|
|
$
|
18,980
|
|
The accompanying notes are an integral
part of these financial statements
Surf
A Movie Solutions Inc.
(A
Development Stage Company)
Statement
of Expenses
|
|
Period from
Inception
(December 18, 2007)
to
September 30,
2008
|
|
|
|
|
|
Expenses:
|
|
|
|
General
and administrative
|
|
$
|
5,874
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(5,874
|
)
|
The
accompanying notes are an integral part of these financial
statements
Surf
A Movie Solutions Inc.
(A
Development Stage Company)
Statement
of Stockholders’ Equity
For
the period from Inception (December 18, 2007) to September 30, 2008
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
During the
|
|
|
|
|
|
|
Common Stock
|
|
|
Paid-in
|
|
|
Development
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Stage
|
|
|
Total
|
|
Balance
at December 18, 2007 (inception)
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for cash
|
|
|
4,000,000
|
|
|
|
4,000
|
|
|
|
16,000
|
|
|
|
-
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,874
|
)
|
|
|
(5,874
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
September 30, 2008
|
|
|
4,000,000
|
|
|
$
|
4,000
|
|
|
$
|
16,000
|
|
|
$
|
(5,874
|
)
|
|
$
|
14,126
|
|
The accompanying notes are an
integral part of these financial statements
Surf
A Movie Solutions Inc.
(A
Development Stage Company)
Statement
of Cash Flows
|
|
Period from
Inception
(December 18, 2007)
to
September 30,
2008
|
|
|
|
|
|
Cash
flows from operating activities
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(5,874
|
)
|
|
|
|
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
|
Prepaid
expenses
|
|
|
(2,700
|
)
|
Accounts
payable and accrued liabilities
|
|
|
4,854
|
|
|
|
|
|
|
Net
cash used in operating activities
|
|
|
(3,720
|
)
|
|
|
|
|
|
Cash
flows from financing activities
|
|
|
|
|
|
|
|
|
|
Proceeds
from sale of common stock
|
|
|
20,000
|
|
|
|
|
|
|
Net
cash provided by financing activities
|
|
|
20,000
|
|
|
|
|
|
|
Net
change in cash and cash equivalents
|
|
|
16,280
|
|
Cash
and cash equivalents, beginning of period
|
|
|
-
|
|
Cash
and cash equivalents, end of period
|
|
$
|
16,280
|
|
|
|
|
|
|
Supplemental
information:
|
|
|
|
|
|
|
|
|
|
Taxes
paid
|
|
$
|
-
|
|
Interest
paid
|
|
$
|
-
|
|
The accompanying
notes are an integral part of these financial statements
Surf
A Movie Solutions Inc.
(A
Development Stage Company)
Notes
to Financial Statements
September
30, 2008
Note
1 – Nature of operations and basis of presentation
Surf A
Movie Solutions Inc. (the “Company”), incorporated in Nevada on December 18,
2007, is a development stage company engaged in the development, sales and
marketing of online video stores. The Company is creating a
“turn-key” solution to enable customers to open a video rental storefront on the
Internet. A “turn-key” solution is an easy to use solution that
includes all tools and features necessary to enable its customers to offer
download-based video rental service and is intended to enable its customers to
set-up their video store without the need for third party’s tools. The Company’s
product will enable video store customers to download rented movies to their
computers to be played using Microsoft Media Player. The product will
be offered as a service hosted on the Company’s servers which will be located in
a preferred data center in North America.
The
Company has limited operations and in accordance with SFAS#7 is considered to be
in the development stage. These financial statements are prepared on the accrual
basis of accounting in conformity with accounting principles generally accepted
in the United States of America.
Note
2 – Significant accounting policies
Cash
and cash equivalents
Cash
equivalents are highly liquid investments with an original maturity of three
months or less.
Use
of estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles of the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the year.
The more significant areas requiring the use of estimates include asset
impairment, stock-based compensation, and future income tax amounts. Management
bases its estimates on historical experience and on other assumptions considered
to be reasonable under the circumstances. However, actual results may differ
from the estimates.
Income
taxes
Tax
assets and liabilities are recognized for the estimated future tax consequences
attributable to temporary differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax bases. These
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which the temporary differences are expected to
reverse.
The
Company has a net operating loss for the period from inception (December 18,
2007) through September 30, 2008 of $5,874 which resulted in a deferred tax
asset of $2,056 based on an estimate tax rate of 35%. Future
tax benefits for net operating losses are recognized to the extent that
realization of these benefits is considered more likely than not. To the extent
that the Company will not realize a future tax benefit, a valuation allowance is
established. Due to the uncertainty of the Company’s future operations, the
Company’s future tax benefits have been fully reserved with a valuation
allowance.
Recently
issued accounting pronouncements
The
Company does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on our results of operations,
financial position or cash flow.
Note
3 – Stockholders’ Equity
During
the period ended September 30, 2008, the Company issued 4,000,000 common shares
for $20,000 in cash.
Until
________, 2009 [90 days from date of prospectus], all dealers effecting
transactions in these securities, whether or not participating in this Offering,
may be required to deliver a prospectus. This is in addition to the dealer’s
obligation to deliver a prospectus when acting as underwriters and with respect
to their unsold allotments or subscriptions.
You
should rely only on the information contained in this prospectus. We have not
authorized any dealer, salesperson or other person to give you different
information. This prospectus does not constitute an offer to sell nor are they
seeking an offer to buy the securities referred to in this prospectus in any
jurisdiction where the offer or sale is not permitted. The information contained
in this prospectus and the documents incorporated by reference are correct only
as of the date shown on the cover page of these documents, regardless of the
time of the delivery of these documents or any sale of the securities referred
to in this prospectus.
SURF
A MOVIE SOLUTIONS INC.
Minimum
of 400,000
and
a
Maximum
of 600,000
Shares
of
Common
Stock
_________,
200__
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
ITEM
13. Other Expenses of Issuance and Distribution
The
following table sets forth the expenses in connection with the issuance and
distribution of the securities being registered hereby. All such expenses will
be borne by the registrant.
Name
of Expense
|
|
Amount
|
|
Securities
and Exchange Commission registration fee
|
|
$
|
2.36
|
|
Legal,
accounting fees and expenses
(1)
|
|
$
|
18,000
|
|
Edgar
filing, printing and engraving fees
(1)
|
|
$
|
2,000
|
|
Total
|
|
$
|
20,002.36
|
|
ITEM
14. Indemnification of Directors and Officers
Our
officers and directors are indemnified as provided by the Nevada Revised
Statutes and by our Bylaws.
Under the
Nevada Revised Statutes, director immunity from liability to a company or its
stockholders for monetary liabilities applies automatically unless it is
specifically limited by a company’s Articles of Incorporation. Our Articles of
Incorporation do not specifically limit our directors’ immunity. Excepted from
that immunity are: (a) a willful failure to deal fairly with the company or its
stockholders in connection with a matter in which the director has a material
conflict of interest; (b) a violation of criminal law, unless the director had
reasonable cause to believe that his or her conduct was lawful or no reasonable
cause to believe that his or her conduct was unlawful; (c) a transaction from
which the director derived an improper personal profit; and (d) willful
misconduct.
Our
Bylaws provide that we will indemnify our directors and officers to the fullest
extent not prohibited by Nevada law; provided, however, that we may modify the
extent of such indemnification by individual contracts with our directors and
officers; and, provided, further, that we shall not be required to indemnify any
director or officer in connection with any proceeding, or part thereof,
initiated by such person unless such indemnification: (a) is expressly required
to be made by law, (b) the proceeding was authorized by our Board of Directors,
(c) is provided by us, in our sole discretion, pursuant to the powers vested in
us under Nevada law or (d) is required to be made pursuant to the
Bylaws.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to our directors, officers and control persons 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, and is, therefore, unenforceable.
ITEM
15. Recent Sales of Unregistered Securities
On August
12, 2008, we issued 1,400,000 shares of the Company’s common stock to Ufuk Turk,
our Director, for a purchase price of $0.005 per share, or for aggregate
proceeds of $7,000.
On August
12, 2008, we issued 2,600,000 shares of the Company’s common stock to Fadi
Zeidan, our President, Treasurer, Secretary and Director, for a purchase price
of $0.005 per share, or for aggregate proceeds of $13,000.
We
believe that the issuances of the securities set forth above were exempt from
registration as offerings completed under Regulation S of the Securities
Act and the regulations promulgated thereunder. We believed that this exemption
from registration was available for each transaction because each purchaser
represented to us, among other things, that he was a non-U.S. person as defined
in Regulation S, was not acquiring the shares for the account or benefit of,
directly or indirectly, any U.S. person, he had the intention to acquire the
securities for investment purposes only and not with a view to or for sales in
connection with any distribution thereof, and that he was sophisticated and was
able to bear the risk of loss of his entire investment. Further,
appropriate legends were affixed to the certificates for the securities issued
in such transactions and we did not otherwise engage in distribution of these
shares in the U.S.
ITEM
16. Exhibits and Financial Statement Schedules
(a)
Exhibits:
The
following exhibits are filed as part of this registration
statement:
Exhibit
|
|
Description
|
|
|
|
|
3.1
|
|
|
Articles
of Incorporation of Registrant.
|
|
|
|
|
3.2
|
|
|
Bylaws
of Registrant.
|
|
|
|
|
4.1
|
|
|
Specimen
Common Stock Certificate.
|
|
|
|
|
5.1
|
|
|
Legal
Opinion of Gersten Savage LLP.
|
|
|
|
|
10.1
|
|
|
Subscription
Agreement dated August 12, 2008 between Surf A Movie Solutions Inc. and
Ufuk Turk.
|
|
|
|
|
10.2
|
|
|
Subscription
Agreement Subscription Agreement dated August 12, 2008 between Surf A
Movie Solutions Inc. and Fadi Zeidan.
|
|
|
|
|
10.3
|
|
|
Form
of Subscription Agreement to be entered into in connection with this
offering.
|
|
|
|
|
23.1
|
|
|
Consent
of Malone & Bailey, PC.
|
|
|
|
|
23.2
|
|
|
Consent
of Gersten Savage LLP (incorporated in Exhibit 5.1).
|
|
|
|
|
24.1
|
|
|
Power
of Attorney (included in signature
page).
|
Undertakings
The
undersigned Registrant hereby undertakes:
(1) To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) to
include any prospectus required by Section 10(a)(3) of the Securities Act of
1933, as amended (the “Act”);
(ii) to
reflect in the prospectus any facts or events arising after the effective date
of this registration statement (or the most-recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in 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;
(iii) to
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement.
(2) That,
for the purpose of determining any liability under the 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 shall be deemed to be the initial bona fide offering
thereof.
(3) To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(4) Insofar
as indemnification for liabilities arising under the Act may be permitted to
directors, officers and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the 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, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.
(5) That,
for the purpose of determining liability of the registrant under the Securities
Act of 1933 to any purchaser in the initial distribution of the securities, the
undersigned registrant undertakes that in a primary offering of securities of
the undersigned registrant pursuant to this registration statement, regardless
of the underwriting method used to sell the securities to the purchaser, if the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such
purchaser:
(i) Any
preliminary prospectus or prospectus of the undersigned registrant relating to
the offering required to be filed pursuant to Rule 424;
(ii) Any
free writing prospectus relating to the offering prepared by or on behalf of the
undersigned registrant or used or referred to by the undersigned
registrant;
(iii)
The portion of any other free writing
prospectus relating to the offering containing material information about the
undersigned registrant or its securities provided by or on behalf of the
undersigned registrant; and
(iv)
(iv) Any other communication that is an
offer in the offering made by the undersigned registrant to the
purchaser
.
Signatures
Pursuant
to the requirements of the Securities Act of 1933, the Registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Los Angeles, State of
California, on December 24, 2008.
SURF
A MOVIE SOLUTIONS INC.
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/s/ Fadi Zeidan
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Fadi
Zeidan
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Title:
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President
and Director
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POWER
OF ATTORNEY
KNOW ALL
MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Fadi Zeidan and Ufuk Turk, each or either of them, his
true and lawful attorneys-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to this registration statement and to sign a registration statement pursuant to
Section 462(b) of the Securities Act of 1933, and to file the same with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact, full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant
to the requirements of the Securities Act of 1933, this registration statement
has been signed by the following persons in the capacities and on the dates
indicated.
Signature
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Title
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Date
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/s/ Fadi Zeidan
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President
and Director
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December
24, 2008
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Fadi
Zeidan
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/s/ Ufuk Turk
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Director
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December
27, 2008
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Ufuk
Turk
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INDEX
TO EXHIBITS
Exhibit
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Description
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3.1
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Articles
of Incorporation of Registrant.
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3.2
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Bylaws
of Registrant.
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4.1
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Specimen
Common Stock Certificate.
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5.1
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Legal
Opinion of Gersten Savage LLP.
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10.1
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Subscription
Agreement dated August 12, 2008 between Surf A Movie Solutions Inc. and
Ufuk Turk.
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10.2
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Subscription
Agreement Subscription Agreement dated August 12, 2008 between Surf A
Movie Solutions Inc. and Fadi Zeidan.
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10.3
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Form
of Subscription Agreement to be entered into in connection with this
offering.
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23.1
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Consent
of Malone & Bailey, PC.
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23.2
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Consent
of Gersten Savage LLP (incorporated in Exhibit 5.1).
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24.1
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Power
of Attorney (included in signature
page).
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BY-LAWS
OF
SURF A
MOVIE SOLUTIONS INC
(the
“Corporation”)
* * * * *
* * * * * *
ARTICLE
I
Offices
The Corporation may have offices at
such other places, both within and without the State of Nevada, as the Board of
Directors may determine and designate from time to time or the business of the
Corporation requires.
ARTICLE
II
Books
The books and records of the
Corporation may be kept (except as otherwise provided by the laws of the State
of Nevada) outside of the State of Nevada and at such place or places as may be
designated by the Board of Directors.
ARTICLE
III
Stockholders
Section 1.
Place of Meetings,
etc.
Except as otherwise provided in these Bylaws, all
meetings of the stockholders shall be held at such dates, times and places,
within or without the State of Nevada, as shall be determined by the Board of
Directors or the President of the Corporation and as shall be stated in the
notice of the meeting or in waivers of notice thereof. If the place
of any meeting is not so fixed, it shall be held at the registered office of the
Corporation in the State of Nevada.
Section 2.
Annual
Meetings
. The Annual Meeting of stockholders of the
Corporation for the election of Directors and the transaction of such other
business as may properly come before said meeting shall be held at the principal
business office of the Corporation or at such other place or places either
within or without the State of Nevada as may be designated by the Board of
Directors and stated in the notice of the meeting, on a date not later than 120
days following the close of the fiscal year of the Corporation as designated by
the Board of Directors.
Section 3.
Special
Meetings
. Special meetings of the stockholders of the
Corporation shall be held whenever called in the manner required by the laws of
the State of Nevada for purposes as to which there are special statutory
provisions, and for other purposes whenever called by resolution of the Board of
Directors, or by the President, or by the holders of a majority of the
outstanding shares of capital stock of the Corporation the holders of which are
entitled to vote on matters that are to be voted on at such
meeting. Any such Special Meetings of stockholders may be held at the
principal business office of the Corporation or at such other place or places,
either within or without the State of Nevada, as may be specified in the notice
thereof. Business transacted at any Special Meeting of stockholders
of the Corporation shall be limited to the purposes stated in the notice
thereof. The notice shall state the date, time, place and purpose or
purposes of the proposed meeting.
Section 4.
Notice of
Meetings
. Except as otherwise required or permitted by law,
whenever the stockholders of the Corporation are required or permitted to take
any action at a meeting, written notice thereof shall be given, stating the
place, date and time of the meeting and, unless it is the annual meeting, by or
at whose direction it is being issued. The notice also shall
designate the place where the stockholders’ list is available for examination,
unless the list is kept at the place where the meeting is to be
held. Notice of a Special Meeting also shall state the purpose or
purposes for which the meeting is called. A copy of the notice of any
meeting shall be delivered personally or shall be mailed, not less than ten (10)
nor more than sixty (60) days before the date of the meeting, to each
stockholder of record entitled to vote at the meeting. If mailed, the
notice shall be given when deposited in the United States mail, postage prepaid
and shall be directed to each stockholder at his or her address as it appears on
the record of stockholders, unless he or she shall have filed with the Secretary
of the Corporation a written request that notices to him or her be mailed to
some other address, in which case it shall be directed to him or her at the
other address. Notice of any meeting of stockholders shall not be
required to be given to any stockholder who shall attend the meeting, except for
the express purpose of objecting at the beginning thereof to the transaction of
any business because the meeting is not lawfully called or convened, or who
shall submit, either before or after the meeting, a signed waiver of
notice. Unless the Board of Directors, after the adjournment of such
meeting, shall fix a new record date for an adjourned meeting or unless the
adjournment is for more than thirty (30) days, notice of an adjourned meeting
need not be given if the place, date and time to which the meeting shall be
adjourned is announced at the meeting at which the adjournment is
taken.
Section 5.
List of
Stockholders
. The officer of the Corporation who shall have
charge of the stock ledger of the Corporation shall prepare and make, at least
ten (10) days before every meeting of stockholders, a complete list of the
stockholders entitled to vote at said meeting, arranged in alphabetical order
and showing the address and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours for a period of at least ten (10) days prior to the meeting, either at a
place specified in the notice of the meeting or at the place where the meeting
is to be held. The list shall also be produced and kept at the time
and place of the meeting during the whole time thereof, and may be inspected by
any stockholder present at the meeting.
Section 6.
Quorum
. Except
as otherwise expressly provided by the laws of the State of Nevada, or by the
Certificate of Incorporation of the Corporation, or by these Bylaws, at any and
all meetings of the stockholders of the Corporation there must be present,
either in person or by proxy, stockholders owning a majority of the issued and
outstanding shares of the capital stock of the Corporation entitled to vote at
said meeting. At any meeting of stockholders at which a quorum is not
present, the holders of, or proxies for, a majority of the stock which is
represented at such meeting, may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present
or represented. At such adjourned meeting at which a quorum shall be
present or represented any business may be transacted which might have been
transacted at the meeting as originally noticed. If the adjournment
is for more than thirty (30) days, or if after adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the
meeting.
Section 7.
Organization
. The
President shall call to order meetings of the stockholders and shall act as
Chairman of such meetings. The Board of Directors or the stockholders
may appoint any stockholder or any Director or officer of the Corporation to act
as Chairman at any meeting in the absence of the President. The
Secretary of the Corporation shall act as secretary of all meetings of the
stockholders, but in the absence of the Secretary, the presiding officer may
appoint any other person to act as secretary of the meeting.
Section 8.
Voting
. Except
as otherwise provided by the Certificate of Incorporation of the Corporation or
these Bylaws, at any meeting of the stockholders each stockholder of record of
the Corporation having the right to vote thereat shall be entitled to one (1)
vote for each share of stock outstanding in his or her name on the books of the
Corporation as of the record date and entitling him or her to so
vote. A stockholder may vote in person or by proxy. Except
as otherwise provided by the law of the State of Nevada or by the Certificate of
Incorporation of the Corporation, any corporate action to be taken by a vote of
the stockholders, other than the election of directors, shall be authorized by
not less than a majority of the votes cast at a meeting by the stockholders
present in person or by proxy and entitled to vote thereon. Directors
shall be elected as provided in Section 1 of Article IV of these
Bylaws. Written ballots shall not be required for voting on any
matter unless ordered by the Chairman of the meeting.
Section 9.
Proxies
. Every
proxy shall be executed in writing by the stockholder or by his or her
attorney-in-fact.
Section 10.
Consent of Stockholders in
Lieu of Meeting
. Unless otherwise provided in the Certificate
of Incorporation of the Corporation, whenever the vote of the stockholders at a
meeting thereof is required or permitted to be taken in connection with any
corporate action by any provisions of the laws of the state of Nevada or of the
Certificate of Incorporation, such corporate action may be taken without a
meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed, in person or by proxy, by
the holders of outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted in person or by
proxy. Prompt notice of the taking of the corporate action without a
meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing, but who were entitled to vote on
the matter.
ARTICLE
IV
Directors
Section 1.
Number, Election and Term of
Office
. The business and affairs of the Corporation shall be
managed by the Board of Directors. The number of Directors which
shall constitute the whole Board shall be not less than one (1) nor more than
nine (9). Within such limits, the number of Directors may be fixed
from time to time by vote of the stockholders or of the Board of Directors, at
any regular or special meeting, subject to the provisions of the Certificate of
Incorporation. The initial board shall consist of one (1)
Director. Directors need not be stockholders. Directors
shall be elected at the Annual Meeting of the stockholders of the Corporation,
except as provided in Section 2 of this Article IV, to serve until their
respective successors are duly elected and qualified. When used in
these Bylaws, the phrase "entire Board" means the total number of directors
which the Corporation would have if there were no vacancies.
Section 2.
Vacancies and Newly Created
Directorships
. Except as hereinafter provided, any vacancy in
the office of a Director occurring for any reason other than the removal of a
Director pursuant to Section 3 of this Article, and any newly created
Directorship resulting from any increase in the authorized number of Directors,
may be filled by a majority of the Directors then in office. In the
event that any vacancy in the office of a Director occurs as a result of the
removal of a Director pursuant to Section 3 of this Article, or in the event
that vacancies occur contemporaneously in the offices of all of the Directors,
such vacancy or vacancies shall be filled by the stockholders of the Corporation
at a meeting of stockholders called for that purpose. Directors
chosen or elected as aforesaid shall hold office until their respective
successors are duly elected and qualified.
Section 3.
Removals
. At
any meeting of stockholders of the Corporation called for that purpose, the
holders of a majority of the shares of capital stock of the Corporation entitled
to vote at such meeting may remove from office any or all of the Directors, with
or without cause.
Section 4.
Resignations
. Any
director may resign at any time by giving written notice of his or her
resignation to the Corporation. A resignation shall take effect at
the time specified therein or, if the time when it shall become effective shall
not be specified therein, immediately upon its receipt, and, unless otherwise
specified therein, the acceptance of a resignation shall not be necessary to
make it effective.
Section 5.
Place of
Meetings
. Except as otherwise provided in these Bylaws, all
meetings of the Board of Directors shall be held at the principal business
office of the Corporation or at such other place, within or without the State of
Nevada, as the Board determines from time to time.
Section 6.
Annual
Meetings
. The annual meeting of the Board of Directors shall
be held either (a) without notice immediately after the annual meeting of
stockholders and in the same place, or (b) as soon as practicable after the
annual meeting of stockholders on such date and at such time and place as the
Board determines.
Section 7.
Regular
Meetings
. Regular meetings of the Board of Directors shall be
held on such dates and at the principal business office of the Corporation or at
such other place, either within or without the State of Nevada, as the Board
determines. Notice of regular meetings need not be given, except as
otherwise required by law.
Section 8.
Special
Meetings
. Special meetings of the Board of Directors may be
called by the President or any two Directors on notice given to each Director,
and such meetings shall be held at the principal business office of the
Corporation or at such other place, either within or without the State of
Nevada, as shall be specified in the notices thereof. The request
shall state the date, time, place and purpose or purposes of the proposed
meeting.
Section 9.
Notice of
Meetings
. Notice of each special meeting of the Board of
Directors (and of each annual meeting held pursuant to subdivision (b) of
Section 6 of this Article IV) shall be given, not later than 24 hours before the
meeting is scheduled to commence, by the President or the Secretary and shall
state the place, date and time of the meeting. Notice of each meeting
may be delivered to a Director by hand or given to a director orally (whether by
telephone or in person) or mailed or telegraphed to a Director at his or her
residence or usual place of business, provided, however, that if notice of less
than 72 hours is given it may not be mailed. If mailed, the notice
shall be deemed to have been given when deposited in the United States mail,
postage prepaid, and if telegraphed, the notice shall be deemed to have been
given when the contents of the telegram are transmitted to the telegraph service
with instructions that the telegram immediately be dispatched. Notice
of any meeting need not be given to any Director who shall submit, either before
or after the meeting, a signed waiver of notice or who shall attend the meeting,
except if such Director shall attend for the express purpose of objecting at the
beginning thereof to the transaction of any business because the meeting is not
lawfully called or convened. Notice of any adjourned meeting,
including the place, date and time of the new meeting, shall be given to all
Directors not present at the time of the adjournment, as well as to the other
Directors unless the place, date and time of the new meeting is announced at the
adjourned meeting.
Section 10.
Quorum
. Except
as otherwise provided by the laws of the State of Nevada or in these Bylaws, at
all meetings of the Board of Directors of the Corporation a majority of the
entire Board shall constitute a quorum for the transaction of business, and the
vote of a majority of the Directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors. A majority of the
Directors present, whether or not a quorum is present, may adjourn any meeting
to another place, date and time.
Section 11.
Conduct of
Meetings
. At each meeting of the Board of Directors of the
Corporation, the President or, in his or her absence, a Director chosen by a
majority of the Directors present shall act as Chairman of the
meeting. The Secretary or, in his or her absence, any person
appointed by the Chairman of the meeting shall act as Secretary of the meeting
and keep the minutes thereof. The order of business at all meetings
of the Board shall be as determined by the Chairman of the
meeting.
Section 12.
Committees of the
Board
. The Board of Directors, by resolution adopted by a
majority of the entire Board of Directors, may designate an executive committee
and other committees, each consisting of one (1) or more
Directors. Each committee (including the members thereof) shall serve
at the pleasure of the Board of Directors and shall keep minutes of its meetings
and report the same to the Board of Directors. The Board of Directors
may designate one or more Directors as alternate members of any
committee. Alternate members may replace any absent or disqualified
member or members at any meeting of a committee. In addition, in the
absence or disqualification of a member of a committee, if no alternate member
has been designated by the Board of Directors, the members present at any
meeting and not disqualified from voting, whether or not they constitute a
quorum, may unanimously appoint another member of the Board of Directors to act
at the meeting in the place of the absent or disqualified member.
Except as limited by the laws of the State of Nevada, each committee, to the
extent provided in the resolution establishing it, shall have and may exercise
all the powers and authority of the Board of Directors with respect to all
matters.
Section 13.
Operation of
Committees
. A majority of all the members of a committee shall
constitute a quorum for the transaction of business, and the vote of a majority
of all the members of a committee present at a meeting at which a quorum is
present shall be the act of the committee. Each committee shall adopt
whatever other rules of procedure it determines for the conduct of its
activities.
Section 14.
Consent to
Action
. Any action required or permitted to be taken at any
meeting of the Board of Directors or of any committee may be taken without a
meeting if all members of the Board of Directors or committee, as the case may
be, consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board of Directors or committee.
Section 15.
Meetings Held Other Than in
Person
. Unless otherwise restricted by the Certificate of Incorporation
or these Bylaws, members of the Board of Directors or any committee may
participate in a meeting of the Board of Directors or committee, as the case may
be, by means of conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other, and
such participation shall constitute presence in person at the
meeting.
Section 16.
Compensation of
Directors
. Directors, as such, shall not receive any stated
salary for their services, but, by resolution of the Board, a fixed sum and
expenses of attendance, if any, may be allowed for the attendance at each
regular or special meeting of the Board; however nothing herein contained shall
be construed to preclude any Director from serving the Corporation in any other
capacity and receiving compensation therefore.
ARTICLE
V
Officers
Section 1.
Number, Election and Term of
Office
. The officers of the Corporation shall be a President,
a Secretary, and a Treasurer, and may at the discretion of the Board of
Directors include a Chief Executive Officer, a Chief Financial Officer, Chairman
of the Board and one or more Vice Presidents, Director of Corporate Development,
General Managers, Assistant Financial Officers and Assistant
Secretaries. The officers of the Corporation shall be elected
annually by the Board of Directors at its meeting held immediately after the
Annual Meeting of the stockholders, and shall hold their respective offices
until their successors are duly elected and qualified. Any two (2) or
more offices may be held by the same person. The Board of Directors
may from time to time appoint such other officers and agents as the interests of
the Corporation may require and may fix their duties and terms of
office. Any officer may devote less than one hundred percent (100%)
of his or her working time to his or her activities as such.
Section 2.
The
President
. The President shall be the chief executive and
operating officer of the Corporation, and shall preside at all meetings of the
stockholders and of the Board of Directors. The President shall have
general and active management of the business and affairs of the Corporation,
subject to the control of the Board, shall see that all orders and resolutions
of the Board are effectuated, and shall have such other powers and duties as the
Board assigns to him. He shall ensure that the books, reports,
statements, certificates and other records of the Corporation are kept, made or
filed in accordance with the laws of the State of Nevada. He shall
cause to be called regular and special meetings of the stockholders and of the
Board of Directors in accordance with these Bylaws. He may sign,
execute and deliver in the name of the Corporation all deeds, mortgages, bonds,
contracts or other instruments authorized by the Board of Directors, except in
cases where the signing, execution or delivery thereof shall be expressly
delegated by the Board of Directors or by these Bylaws to some other officer or
agent of the Corporation or where required by law to be otherwise signed,
executed or delivered. He may sign, jointly with the Secretary, an
Assistant Secretary, the Treasurer, or an Assistant Financial Officer,
certificates of stock of the Corporation. He shall appoint and
remove, employ and discharge, and fix the compensation of all servants, agents,
employees and clerks of the Corporation other than the duly elected or appointed
officers, subject to the approval of the Board of Directors. In
addition to the powers and duties expressly conferred upon him by these Bylaws,
he shall, except as otherwise specifically provided by the laws of the State of
Nevada, have such other powers and duties as shall from time to time be assigned
to him by the Board of Directors.
Section 3.
The Vice
President
. There may be such Vice Presidents as the Board of
Directors shall determine from time to time, with duties determined by the Board
of Directors. If there is only one Vice President appointed by the
Board, he shall perform, in the absence or disability of the President, the
duties and exercise the powers of the President and shall have such other powers
and duties as the Board or the President assigns to him.
Section 4.
The
Secretary
. The Secretary may sign all certificates of stock of
the Corporation jointly with the President. He shall record all the
proceedings of the meetings of the stockholders and the Board of Directors of
the Corporation in the books to be kept for that purpose. He shall
have safe custody of the seal of the Corporation and, when authorized by the
Board, he shall affix the same to any corporate instrument, and when so affixed
he may attest the same by his signature. He shall keep the transfer
books, in which all transfers of the capital stock of the Corporation shall be
registered, and the stock books, which shall contain the names and addresses of
all holders of the capital stock of the Corporation and the number of shares
held by each. He shall keep the stock and transfer books available
during business hours for inspection by any stockholder and for the transfer of
stock. He shall notify the Directors and stockholders of the
respective meetings as required by law or by these Bylaws of the
Corporation. He shall have and perform such other powers and duties
as may be required by law or the Bylaws of the Corporation, or which the Board
or the President may assign to him from time to time.
Section 5.
Assistant
Secretaries
. The Assistant Secretaries shall, during the
absence or incapacity of the Secretary, assume and perform all functions and
duties which the Secretary might lawfully do if present and not under any
incapacity.
Section 6.
The
Treasurer
. Subject to the control of the Board, the Treasurer
shall have the care and custody of the corporate funds and the books relating
thereto. He shall perform all other duties incident to the office of
the Treasurer. He shall have such other powers and duties as the
Board or the President assigns to him from time to time. He shall
keep full and accurate accounts of all receipts and disbursements of the
Corporation in books belonging to the Corporation and shall deposit all monies
and other valuable effects in the name and to the credit of the Corporation in
such depositories as may be designated by the Board of Directors. He
shall disburse the funds of the Corporation as may be ordered by the Board, and
shall render to the President or the Directors, whenever they may require it, an
account of all his transactions as Treasurer and an account of the business and
financial position of the Corporation.
Section 7.
Assistant Financial
Officers
. The Assistant Financial Officers shall, during the
absence or incapacity of the Treasurer, assume and perform all functions and
duties which the Treasurer might lawfully do if present and not under any
incapacity.
Section 8.
Transfer of
Duties
. The Board of Directors may transfer the power and
duties, in whole or in part, of any officer to any other officer, or other
persons, notwithstanding the provisions of these Bylaws, except as otherwise
provided by the laws of the State of Nevada.
Section 9.
Removals
. Subject
to his or her earlier death, resignation or removal as hereinafter provided,
each officer shall hold his or her office until his or her successor shall have
been duly elected and shall have qualified. Any officer or agent of
the Corporation may be removed from office at any time, with or without cause,
by the affirmative vote of a majority of the entire Board, at a meeting of the
Board of Directors called for that purpose.
Section 10.
Resignations
. Any
officer or agent of the Corporation may resign at any time by giving written
notice of his or her resignation to the Board of Directors or to the President
or Secretary of the Corporation. Any such resignation shall take
effect at the time specified therein or, if the time when it shall become
effective shall not be specified therein, immediately upon its receipt, and,
unless otherwise specified therein, the acceptance of a resignation shall not be
necessary to make it effective.
Section 11.
Vacancies
. If
the office of President, Secretary or Treasurer becomes vacant for any reason,
the Board of Directors shall choose a successor to hold such office for the
unexpired term. If any other officer or agent becomes vacant for any
reason, the Board of Directors may fill the vacancy, and each officer so elected
shall serve for the remainder of his or her predecessor's term.
Section 12.
Compensation of
Officers
. The officers shall receive such salary or
compensation as may be determined by the Board of Directors.
ARTICLE
V
Contracts, Checks and
Notes
Section 1.
Contracts
. Unless
the Board of Directors shall otherwise specifically direct, all contracts of the
Corporation shall be executed in the name of the Corporation by the President or
a Vice President.
Section 2.
Checks and
Notes
. All negotiable instruments of the Corporation shall be
signed by such officers or agents of the Corporation as may be designated by the
Board of Directors.
ARTICLE
VI
Provisions
Relating to Stock
Certificates and
Stockholders
Section 1.
Certificates of
Stock
. Certificates for the Corporation's capital stock shall
be in such form as required by law and as approved by the Board. Each
certificate shall be signed in the name of the Corporation by the President or
any Vice President and by the Secretary, the Treasurer or any Assistant
Secretary or any Assistant Financial Officer and shall bear the seal of the
Corporation or a facsimile thereof. If any certificate is
countersigned by a transfer agent or registered by a registrar, other than the
Corporation or its employees, the signature of any officer of the Corporation
may be a facsimile signature. In case any officer, transfer agent or
registrar who shall have signed or whose facsimile signature was placed on any
certificate shall have ceased to be such officer, transfer agent or registrar
before the certificate shall be issued, it may nevertheless be issued by the
Corporation with the same effect as if he or she were such officer, transfer
agent or registrar at the date of issue.
Section 2.
Lost Certificates,
etc
. The Corporation may issue a new certificate for shares in
place of any certificate theretofore issued by it, alleged to have been lost,
mutilated, stolen or destroyed, and the Board may require the owner of the lost,
mutilated, stolen or destroyed certificate, or his legal representatives, to
make an affidavit of that fact and to give the Corporation a bond in such sum as
it may direct as indemnity against any claim that may be made against the
Corporation on account of the alleged loss, mutilation, theft or destruction of
the certificate or the issuance of a new certificate.
Section 3.
Transfer of
Stock
. Upon surrender to the Corporation or the transfer agent
of the Corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, the
Corporation shall issue a new certificate to the person entitled thereto, cancel
the old certificate and record the transaction upon its books.
Section 4.
Record
Date
. For the purpose of determining the stockholders entitled
to notice of or to vote at any meeting of stockholders or any adjournment
thereof, or to express consent to or dissent from any proposal without a
meeting, or for the purpose of determining stockholders entitled to receive
payment of any dividend or other distribution or the allotment of any rights, or
for the purpose of any other action, the Board may fix in advance, a record
date, which shall be not more than sixty (60) nor less than ten (10) days before
the date of any such meeting, nor more than sixty (60) days prior to any other
action.
Section 5.
Registered
Stockholders
. The Corporation shall be entitled to treat the
holder of record of any share or shares of stock as the holder in fact thereof
and, accordingly, shall not be bound to recognize any equitable or other claim
to, or interest in, such share or shares by any other person, whether or not it
shall have notice thereof, except as expressly provided by the laws of the State
of Nevada.
ARTICLE
VII
General
Provisions
Section 1.
Dividends
. To
the extent permitted by law, the Board shall have full power and discretion,
subject to the provisions of the Certificate of Incorporation of the Corporation
and the terms of any other corporate document or instrument binding upon the
Corporation, to determine what, if any, dividends or distributions shall be
declared and paid or made. Dividends may be paid in cash, in
property, or in shares of capital stock, subject to the provisions of the
Certificate of Incorporation. Before payment of any dividend, there
may be set aside out of any funds of the Corporation available for dividends
such sums as the Directors think proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or maintaining any
property of the Corporation, or for such other purpose as the Directors think
conducive to the interests of the Corporation. The Directors may
modify or abolish any such reserve in the manner in which it was
created.
Section 2.
Seal
. The
corporate seal of the Corporation shall have inscribed thereon the name of the
Corporation, the year of its organization and the words “Corporate Seal,
Nevada.”
Section 3.
Fiscal
Year
. The fiscal year of the Corporation shall be end on
September 30.
Section 4.
Voting Shares in Other
Corporations
. Unless otherwise directed by the Board, shares in other
corporations which are held by the Corporation shall be represented and voted
only by the President or by a proxy or proxies appointed by him or
her.
Section 5.
Indemnification
.
(a) The Corporation shall
indemnify any person who was, or is threatened to be made, a party to a
proceeding (as hereinafter defined) by reason of the fact that he or she (i) is
or was a director, officer, employee or agent of the Corporation, or (ii) while
a director, officer, employee or agent of the Corporation, is or was serving at
the request of the Corporation as a director, officer, employee, agent or
similar functionary of another corporation, partnership, joint venture, trust or
other enterprise, to the fullest extent permitted under the Revised Statutes of
the State of Nevada, as the same exists or may hereafter be amended. Such right
shall be a contract right and as such shall run to the benefit of any director
or officer who is elected and accepts the position of director or officer of the
Corporation or elects to continue to serve as a director or officer of
the Corporation while this Article VII is in effect. The rights
conferred above shall not be exclusive of any other right which any person may
have or hereafter acquire under any statute, bylaw, resolution of stockholders
or directors, agreement or otherwise.
(b) As used herein, the
term "proceeding" means any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, any appeal
in such an action, suit or proceeding and any inquiry or investigation that
could lead to such an action, suit or proceeding.
(c) A director or officer
of the Corporation shall not be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director or
officer, except for liability (i) for acts or omissions which involve
intentional misconduct, fraud or a knowing violation of law; or (ii) for the
payment of distributions in violation of the Revised Statutes of the State of
Nevada. Any repeal or amendment of this Article VII by the shareholders of the
Corporation shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director or officer of the Corporation
arising from an act or omission occurring prior to the time of such repeal or
amendment. In addition to the circumstances in which a director or officer of
the Corporation is not personally liable as set forth in the foregoing
provisions of this Article VII, a director or officer shall not be liable to the
Corporation or its stockholders to such further extent as permitted by any law
hereafter enacted, including, without limitation, any subsequent amendment to
the Revised Statutes of the State of Nevada.
ARTICLE
VIII
Amendments
These Bylaws may be adopted, altered,
amended or repealed or new Bylaws may be adopted by the stockholders, or by the
Board of Directors by the Certificate or Incorporation, at any regular meeting
of the stockholders or of the Board of Directors or at any special meeting of
the stockholders or of the Board of Directors if notice of such alteration,
amendment, repeal or adoption of new Bylaws be contained in the notice of such
special meeting. If the power to adopt, amend or repeal Bylaws is
conferred upon the Board of Directors by the Certificate of Incorporation it
shall not divest or limit the power of the stockholders to adopt, amend or
repeal Bylaws.
THE
UNDERSIGNED, being all of the Directors of Surf a Movie Solutions Inc., evidence
their adoption and ratification of the foregoing Bylaws of the
Corporation.
Dated:
April 15, 2008
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Fadi
Zeidan, Director
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Ufuk
Turk,
Director
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