As filed with the Securities and Exchange Commission on September 4, 2015
Registration Statement No. ______________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
APPSOFT TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Nevada | 7371 | 47-3427919 | ||
(State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification No.) |
Brian Kupchik, President and Chief Executive Officer
1225 Franklin Avenue,
Suite 325
Garden City, NY 11530
Phone: (516) 224-7717
(Name, address and telephone number of agent for service)
Copies to: Ruffa & Ruffa, P.C.
110 East 59 th Street
New York, NY 10022
Phone: (212) 355-0606
Approximate date of proposed sale to public: As soon as practicable after this registration statement becomes effective.
If any of the securities being registered on the Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: x .
If this Form is filed to register additional 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: ¨
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering: ¨
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 registration statement for the same offering: ¨
Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer | ¨ | Accelerated filer | ¨ | |
Non-accelerated filer | ¨ | (Do not check if a smaller reporting company) | Smaller reporting company | x |
CALCULATION OF REGISTRATION FEE
Title of Each
Class of Securities to be Registered |
Amount to
be Registered |
Proposed
Maximum Offering Price per Share |
Proposed Maximum
Aggregate Offering Price (1) |
Amount of
Registration Fee |
||||||||||||
Common Stock, par value
$0.0001 |
1,000,000 | $ | 0.50 | $ | 500,000 | $ | 58.10 |
(1) | Estimated solely for purposes of calculating the registration fee in accordance with Rule 457 of the Securities Act of 1933, as amended. |
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 Section 8(a) may determine.
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS | SUBJECT TO COMPLETION, DATED SEPTEMBER 4, 2015 |
APPSOFT TECHNOLOGIES, INC.
1,000,000 Shares of Common Stock
$0.50 per Share
AppSoft Technologies, Inc. (the “Company,” “we,” “our” and “us”) is offering directly 1,000,000 shares of our common stock (the “Shares”), at a fixed price of $0.50 per share for a total amount of $500,000 on a best efforts basis (the “Offering”).
This is the initial public offering of our common stock. We are offering the Shares on a self-underwritten basis which means our officers and directors will attempt to sell the Shares in reliance on the safe harbor from broker-dealer registration under Rule 3a4-1 of the Securities Exchange of 1934, as amended (the “Exchange Act”). This prospectus will permit our officers and directors to sell the Shares directly to the public. We will not pay any commission or other compensation to our officers and directors related to the sale of the Shares. All funds that we raise from the Offering will be immediately available for our use and will not be returned to investors. We do not have any arrangements to place the funds received from the sale of Shares in the Offering in an escrow, trust or similar account.
There is no minimum number of Shares required to be purchased, and subscriptions, once received and accepted, are irrevocable. Because there is no minimum offering amount required as a condition to closing in this Offering, the actual public offering amount and proceeds to us, if any, are not presently determinable and may be substantially less than all of the securities offered hereby.
The Offering will close on [_______], 2015, 60 days after the effectiveness of the registration statement of which this prospectus is a part, unless all the Shares are sold before that date, we extend the offering another 30 days or we otherwise decide to close the offering early or cancel it, in each case in our sole discretion. If we extend the offering, we will provide that information in an amendment to this prospectus. If we close the offering early or cancel it, including during any extended offering period, we may do so without notice to investors, although if we cancel the Offering we will promptly return any funds investors may already have paid. We will bear the expenses relating to the registration of the Shares.
No public market currently exists for our common stock and a public market may not develop, or, if any market does develop, it may not be sustained. Our common stock is not currently traded on any exchange or quoted on the Over-The-Counter market. Prior to the effective date of the registration statement of which this prospectus is a part, we will seek to have a market maker file an application with the Financial Industry Regulatory Authority (“FINRA”), for our common stock to be eligible for quotation on the OTC Bulletin Board and/or OTCMarkets.com (together, the “OTC Markets”). We do not yet have a market maker who has agreed to file such application, nor can there be any assurance that such an application for quotation will be approved. In the absence of a trading market or an active trading market, investors may be unable to liquidate their investment or make any profit from an investment in the Shares.
We are an “emerging growth company” as defined in the SEC rules and we will be subject to reduced public reporting requirements. See “Emerging Growth Company and Smaller Reporting Company Status.”
INVESTING IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. SEE “RISK FACTORS” BEGINNING ON PAGE 4 OF THIS PROSPECTUS FOR A DISCUSSION OF INFORMATION THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN OUR SECURITIES.
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.
You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different information from that contained in this prospectus. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common stock. This prospectus does not constitute an offer to sell, or a solicitation of an offer to buy the securities in any circumstances under which the offer or solicitation is unlawful. Neither the delivery of this prospectus nor any distribution of securities in accordance with this prospectus shall, under any circumstances, imply that there has been no change in our affairs since the date of this prospectus.
The date of this prospectus is _____________, 2015.
TABLE OF CONTENTS
i |
The following summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all the information you should consider before investing in the securities. Before making an investment decision, you should read the entire prospectus carefully, including the “Risk Factors” section, the financial statements and the notes to the financial statements. If you invest in our common stock, you are assuming a high degree of risk. As used throughout this prospectus, unless the context otherwise requires, the terms “AppSoft,” “Company,” “we,” “us,” or “our” refer to AppSoft Technologies, Inc.
Our Company
AppSoft Technologies, Inc. (“we,” “us,” or the “Company”) develops, publishes and markets mobile software applications for smartphones and tablet devices (“Apps”). We currently own a portfolio comprising over 400 Apps titles including games designed to appeal to a broad cross section of consumers and legal-related Apps that provide compilations of federal and state laws and regulations across a variety of legal disciplines and digests of court decisions rendered by federal courts. Consumers download our Apps through direct-to-consumer digital storefronts, such as the Apple App Store and Google Play Store. We currently generate revenue from sales, or downloads, or of Apps and from advertisements published on our ad supported game titles.
Some of our most popular titles include:
We offer all of our game titles in both a free advertisement-supported version and a paid version that does not display ads. We believe that the ad supported versions allow for wider dissemination of our titles to consumers who might not otherwise spend money for an App without first playing the game. We are in the process of migrating the game programs into our corporate structure which may take some time in view of the fact that, in some cases, our contract programmers must rewrite certain lines of code in the game.
When we acquired our portfolio of Apps, the content of all of our legal-related titles was out of date in that they did not include laws and regulations adopted since the time they were last updated or make reference to legal decisions decided during the period between the last update and the date we acquired them. We have started the process of updating the content and are focusing our initial efforts on titles that we believe have the greatest revenue generating potential. In order to generate consumer interest in our legal-related titles and increase downloads and avoid returns, we will be have to update and maintain content on a consistent basis.
Over the last several years, mobile devices, including smartphone and tablets, have proliferated extensively around the world across a wide range of demographic groups. The mobile Apps industry has experienced corresponding growth in the number of downloads, the number and types of Apps published. We believe that there will continue to be an increase in the number of smartphones and tablets sold. In addition, technological advances to these devices, including more powerful smartphones and tablets with larger screens make mobile Apps provide a platform for more diverse Apps and make games more fun and visually appealing. We believe that technological developments will continue to drive growth in our industry for the foreseeable future.
Each member of our management team has an extensive background in mobile, digital and social media sales, advertising, operations, and technology and product development and deployment. We expect to leverage management’s industry experience and the contacts they have developed to our advantage.
We plan to develop and acquire new Apps to expand our existing product offerings. We may seek to create games based on third-party brands, properties and other content, including those that we may license from the owners of television programs, cartoons, movies and toy manufacturers. We expect to develop games that can be downloaded without charge that offer in-game currency and in-game purchasing as additional revenue streams. We will rely on third party designers, developers and programs to develop new Apps. We also will solicit ideas for new titles from unrelated parties. We evaluate prospects based on a variety of factors. If we conclude that a particular prospect is worth pursuing, we may fund the development of the App through launch and beyond.
We market, sell and distribute our games through direct-to-consumer digital storefronts, such as Apple’s App Store and the Google Play Store. We currently or expect to advertise our Apps through the digital storefronts, our own website, social media, such as Facebook and LinkedIn, through mobile ad networks and search engine optimization (SEO) tools.
History
We were incorporated in the State of Nevada in March 2015. On April 7, 2015, concluded a transaction whereby we sold 2,000,000 shares of our Series A Cumulative Convertible Preferred Stock in exchange for the sum of $50,000 and the transfer of a portfolio of Apps comprising all of the Apps we now offer for purchase and download. We currently manage and operate our business through our two employees and independent contractors.
We maintain our corporate offices at 1225 Franklin Avenue, Suite 325, Garden City, New York, where our telephone number is (516) 224-7717. We maintain a corporate website at www.appsofttechnologies.com .
Emerging Growth Company and Smaller Reporting Company Status
Emerging Growth Company
We are an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We intend to take advantage of all of these exemptions.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards, and delay compliance with new or revised accounting standards until those standards are applicable to private companies. We have elected to take advantage of the benefits of this extended transition period.
We could be an emerging growth company until the last day of the first fiscal year following the fifth anniversary of our first common equity offering, although circumstances could cause us to lose that status earlier if our annual revenues exceed $1.0 billion, if we issue more than $1.0 billion in non-convertible debt in any three-year period or if we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act.
2 |
Smaller Reporting Company
We also qualify as a “smaller reporting company” under Rule 12b-2 of the Exchange Act, which is defined as a company with a public equity float of less than $75 million. To the extent that we remain a smaller reporting company at such time as we are no longer an emerging growth company, we will still have reduced disclosure requirements for our public filings some of which are similar to those of an emerging growth company, including having to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and the reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.
Summary of the Offering
Common stock outstanding before the Offering: | 4,110,000 Shares | |
Common stock offered by the Company: | 1,000,000 Shares | |
Common stock to be outstanding after the Offering: | 5,110,000 Shares | |
Market for the Shares: | No public market currently exists for the Shares and a public market may not develop, or, if any market does develop, it may not be sustained. There cannot be any assurance that a market maker will agree to file the necessary documents with FINRA for our common stock to be eligible for quotation on the OTC Markets, nor can there be any assurance that such an application for quotation will be approved. | |
Offering price per Share: | We will sell the Shares at a price of $0.50 per share upon effectiveness of the registration statement of which this prospectus is a part on a direct primary “self-underwritten” basis. There is no minimum number of Shares required to be purchased, and subscriptions, once received and accepted, are irrevocable. Our transfer agent, VStock Transfer, LLC, will issue common stock subscribed for in this Offering promptly after we accept subscriptions from investors. Shares purchased by investors in this Offering will remain outstanding upon its termination regardless of the number of Shares subscribed for. | |
No Minimum Offering: | There is no minimum amount required for us to close the Offering and we may raise substantially less than the $500,000 in Shares offered hereby. Because there is no minimum offering amount required as a condition to closing in the Offering, the actual public offering amount and proceeds to us, if any, are not presently determinable and may be substantially less than all of the Shares offered hereby. | |
Duration of Offering | The offering will close on [________], 2015, 60 days after the effectiveness of the registration statement of which this prospectus is a part, unless all the securities are sold before that date, we extend the offering another 30 days or we otherwise decide to close the offering early or cancel it, in each case in our sole discretion. If we extend the offering, we will provide that information in an amendment to this prospectus. If we close the offering early or cancel it, including during any extended offering period, we may do so without notice to investors, although if we cancel the offering we will promptly return any funds investors may already have paid. |
3 |
Use of proceeds | We intend to use the proceeds of this Offering to (i) develop and acquire new mobile apps, (ii) update our existing mobile apps, (iii) market our portfolio of mobile apps, (iv) pay for the expenses of public company reporting requirements, (v) hire staff, and (vi) for general working capital. See “Use of Proceeds.” | |
Risk factors | Investment in the Shares involves substantial risk. You should read the “Risk Factors” section of this prospectus for a discussion of factors that you should consider carefully before deciding to invest in the Shares. | |
Termination of the Offering | The Offering will conclude upon the earlier of (i) the date on which all of the Shares have been sold, (ii) 60 days after the date on which the registration statement of which this prospectus forms a part is declared effective by the SEC or (iii) at such time as management deems appropriate, which will not be more than 60 days after date on which the registration statement of which this prospectus is a part is declared effective by the SEC We may extend the Offering for an additional 30 days at our discretion. |
Investing in the Shares involves a high degree of risk. You should carefully consider the risks described below, as well as other information provided to you in this prospectus, including information in the section of this prospectus entitled “Forward Looking Statements.” The risks and uncertainties described below are not the only ones facing the Company. Additional risks and uncertainties not presently known to the Company or that the Company currently believes are immaterial may also impair the Company’s business operations. If any of the following risks actually occur, the Company’s business, financial condition or results of operations could be materially adversely affected, the value of the Shares could decline, and you may lose all or part of your investment.
Risks Related to Our Operating History and Financial Condition
We have a limited operating history and are subject to the risks encountered by early-stage companies. Moreover, because we have a limited operating history, you may not be able to accurately evaluate our operations.
AppSoft was incorporated in March 2015 and we have been actively marketing our Apps for only a short period of time, which will make it difficult for you to evaluate the merits of investing in our Company. Because our Company has a limited operating history, you should consider and evaluate our operating prospects in light of the risks and uncertainties frequently encountered by early-stage companies in rapidly evolving markets. For us, these risks include:
· | risks that we may not have sufficient capital to achieve our growth strategy; | |
· | risks that we may not develop our product offerings in a manner that enables us to be profitable and satisfy consumer preferences; | |
· | risks that our growth strategy may not be successful; and | |
· | risks that fluctuations in our operating results will be significant relative to our revenues. |
These risks are described in more detail below. Our future growth will depend substantially on our ability to address these and the other risks described in this section. If we do not successfully address these risks, our business would be significantly harmed.
4 |
Our minimal operations and lack of established sources of revenues raises substantial doubt about our ability to continue as a going concern.
The report of our independent auditor and Note B to the financial statements filed with this registration statement indicate that the Company’s minimal operations to date and lack of fully established sources of revenue such financial statements raise substantial doubt about the Company’s ability to continue as a going concern. For these reasons, our financial statements have been prepared assuming the Company will continue as a going concern, which assumes we will realize our assets and discharge our liabilities in the normal course of business. If we are unable to achieve these ends, we cannot assure you that we will be able to generate revenue to support our operations and continue operations.
We cannot predict our future capital needs and we may not be able to secure additional financing.
We believe that cash on hand and internally generated revenue from downloads of our Apps will be sufficient to meet our presently anticipated working capital and capital expenditure requirements for the next 18 months. This belief is based on our operating plan which in turn is based on assumptions, which may prove to be incorrect. In addition, we may need to raise significant additional funds sooner in order to support our growth, develop new or enhanced services and products, respond to competitive pressures, acquire or invest in new portfolios of Apps, or take advantage of unanticipated opportunities. If our financial resources are insufficient, we will require additional financing in order to meet our plans for expansion. We cannot be sure that this additional financing, if needed, will be available on acceptable terms or at all. Furthermore, any debt financing, if available, may involve restrictive covenants, which may limit our operating flexibility with respect to business matters. If additional funds are raised through the issuance of equity securities, the percentage ownership of our existing stockholders will be reduced, our stockholders may experience additional dilution in net book value, and such equity securities may have rights, preferences, or privileges senior to those of our existing stockholders. If adequate funds are not available on acceptable terms or at all, we may be unable to develop or enhance our services and products, take advantage of future opportunities, repay debt obligations as they become due, or respond to competitive pressures, any of which would have a material adverse effect on our business, prospects, financial condition, and results of operations.
Risks Related to Our Business and Industry
Our portfolio of Apps includes over 250 legal-related titles, many of which are out of date and, therefore, are not useful to consumers.
Of the approximately 400 titles comprising our Apps portfolio, approximately 250 are legal related Apps that publish compilations of laws and regulations promulgated by governmental agencies and offices or decisions that courts have rendered on cases. When we purchased the portfolio, none of these titles had been updated in several years. Prospective users of these titles, including lawyers, require that these titles provide the most recent compilations of laws and regulations or court decisions, as the case may be, in order to effectively and competently discharge their duties. Over the last three months, we have been updating our legal titles and as of the date of the registration statement of which this prospectus forms a part, have completed updates to a number of our most popular legal titles. A significant number of the downloads of our legal-related titles that have not been updated continue to be returned soon after purchase because the title is of no benefit to the user. In order for our legal related Apps to be attractive product options for prospective users and minimize returns, we must update them and keep them current through dates considered reasonable by users. Updating our legal-related titles may be expensive and time consuming. A failure to maintain our legal related Apps current and up to date will materially and adversely affect our business and results of operations.
5 |
If we fail to develop or acquire and publish new Apps that achieve market acceptance or we do not continue to enhance our existing Apps, our revenues would suffer.
Our business depends on developing or acquiring and publishing mobile Apps that consumers will purchase and download. We expect to invest resources in research and development, analytics and marketing to introduce new Apps and continue to update our existing Apps, and we often must make decisions about these matters well in advance of product release to timely implement them. In addition, we may acquire new developed Apps from others that we believe will be well received by consumers. Our success depends, in part, on unpredictable and volatile factors beyond our control, including consumer preferences, competing Apps, new mobile platforms and the availability of alternative products. If our Apps do not meet consumer expectations, or they are not brought to market in a timely and effective manner, our business, operating results and financial condition would be harmed. Even if our Apps are successfully introduced and well received by consumers, a failure to continue to update them, a subsequent shift in the consumer preferences or a reduction in their usefulness to consumers could cause a decline in our Apps popularity that could materially reduce our revenues and harm our business, operating results and financial condition. Furthermore, we compete for the discretionary spending of consumers, who face a vast array of Apps and other business or entertainment product choices. If we are unable to generate and sustain sufficient interest in our Apps and games compared to available alternatives, our business and financial results would be seriously harmed.
If we are unable to maintain a good relationship with the markets where our Apps are distributed, our business will suffer.
Apple’s “App Store” and Google’s “Google Play” are the sole distribution and payment media for our mobile Apps. We generate and expect to generate for the foreseeable future all of our revenue from the sale of mobile Apps through these platforms and any deterioration in our relationship with Apple or Google would harm our business and adversely affect the value of our stock.
We are subject to Apple’s and Google’s standard terms and conditions for application developers, which govern the promotion, distribution and operation of mobile Apps on their platforms. Each of Apple and Google can unilaterally change its standard terms and conditions with no prior notice to us. In addition, the agreement terms can be vague and subject to changing interpretations by the storefront operator. Further, these storefront operators typically have the right to prohibit a developer from distributing its applications on its storefront if the developer violates its standard terms and conditions.
Our business would be harmed if:
· | Apple or Google discontinues or limits access to its platform by us and other App developers; | |
· | Apple or Google modifies its terms of service or other policies, including fees charged to, or other restrictions on, us or other application developers, or Apple or Google changes how the personal information of its users is made available to application developers on their respective platforms or shared by users; | |
· | Apple or Google establishes more favorable relationships with one or more of our competitors; or | |
· | Apple or Google develops its own competitive offerings. |
If Apple or Google loses its market position or otherwise falls out of favor with mobile users, we would need to identify alternative channels for marketing, promoting and distributing our Apps, which would consume substantial resources and may not be effective. In addition, Apple and Google have broad discretion to change their terms of service and other policies with respect to us and other developers, and those changes may be unfavorable to us. Any such changes in the future could significantly alter how our App users experience our Apps or interact within our Apps, which may harm our business.
6 |
The mobile Apps industry is subject to rapid technological change and, to compete, we must continually enhance our mobile Apps and adapt to changing technologies and market conditions.
We must continue to enhance and improve the performance, functionality and reliability of our mobile Apps. The mobile application industry is characterized by rapid technological change, changes in user requirements and preferences, frequent new product and services introductions embodying new technologies and the emergence of new industry standards and practices that could render our products and services obsolete. We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customer requirements or emerging industry standards. If we are unable to adapt to changing market conditions, customer requirements or emerging industry standards, we may not be able to increase our revenue and expand our business .
The markets in which we operate are highly competitive, and many of our competitors have significantly greater resources than we do.
Developing, distributing and selling mobile Apps is a highly competitive business, characterized by frequent product introductions and rapidly emerging new platforms, technologies and storefronts. Our competitors that develop Apps vary in size and include publicly-traded and privately-held companies. These companies may already have an established market in our industry. Most of these companies have significantly greater financial and other resources than us and have been developing their products and services longer than we have been developing ours.
In addition, given the open nature of the development and distribution for smartphones and tablets and the relatively low barriers to entry, we also compete or will compete with a vast number of small companies and individuals who are able to create and launch games and other content for these devices using relatively limited resources and with relatively limited start-up time or expertise.
Most of our competitors and our potential competitors have one or more advantages over us, either globally or in particular geographic markets, which include:
· | significantly greater financial and personnel resources; | |
· | stronger brand and consumer recognition; | |
· | lower labor and development costs and better overall economies of scale; | |
· | greater experience and expertise; and | |
· | broader distribution and presence. |
If we are unable to compete effectively or we are not as successful as our competitors in our target markets, our sales could decline and our margins could decline, which would materially harm our business, operating results and financial condition.
Our financial results could vary significantly from quarter to quarter and are difficult to predict, which in turn could cause volatility in our stock price.
Our revenues and operating results could vary significantly from quarter to quarter due to a variety of factors, many of which are outside of our control. As a result, comparing our operating results on a period-to-period basis may not be meaningful. In addition, we may not be able to accurately predict our future revenues or results of operations. We base our current and future expense levels on our internal operating plans and sales forecasts, and our operating costs are to a large extent fixed. As a result, we may not be able to reduce our costs sufficiently to compensate for an unexpected shortfall in revenues, and even a small shortfall in revenues could disproportionately and adversely affect financial results for that quarter.
7 |
In addition to other risk factors discussed in this section, factors that may contribute to the variability of our quarterly results include:
· | our ability to increase the number of consumers using our Apps; | |
· | the number and timing of new Apps released by us and our competitors, particularly in the games sector, which may represent a significant portion of revenues in a quarter, which timing can be impacted by internal development delays, shifts in product strategy and how quickly digital storefront operators review and approve our games for commercial release; | |
· | the loss of, or changes to, one of our distribution platforms; | |
· | changes to the Apple iOS platform or the Google Android platform that we are not able to adapt to our product offerings; | |
· | fluctuations in the size and rate of growth of overall consumer demand for smartphones, tablets, games and related content; | |
· | decisions by us to incur additional expenses, such as increases in research and development, or unanticipated increases in vendor-related costs, such as hosting fees; | |
· | the timing of successful mobile device launches; | |
· | the seasonality of our industry; | |
· | macro-economic fluctuations in the United States and global economies, including those that impact discretionary consumer spending. |
Major network failures could have an adverse effect on our business.
Our technology infrastructure is critical to the performance of our Apps and customer satisfaction. Our Apps run on a complex distribution system, or what is commonly known as cloud computing. These systems are operated by third parties that we do not control and which would require significant time to replace. We expect this dependence on third parties to continue. Major equipment failures, natural disasters, including severe weather, terrorist acts, acts of war, cyber attacks or other breaches of network or information technology security that affect third-party networks, communications switches, routers, microwave links, cell sites or other third-party equipment on which we rely, could cause major network failures and/or unusually high network traffic demands that could have a material adverse effect on our operations or our ability to provide service to our customers. These events could disrupt our operations, require significant resources to resolve, result in a loss of customers or impair our ability to attract new customers, which in turn could have a material adverse effect on our business, prospects, results of operations and financial condition.
If we experience significant service interruptions, which could require significant resources to resolve, it could result in a loss of customers or impair our ability to attract new customers, which in turn could have a material adverse effect on our business, prospects, results of operations and financial condition.
In addition, with the growth of wireless data services, enterprise data interfaces and Internet-based or Internet Protocol-enabled applications, wireless networks and devices are exposed to a greater degree to third-party data or applications over which we have less direct control. As a result, the network infrastructure and information systems on which we rely, as well as our customers’ wireless devices, may be subject to a wider array of potential security risks, including viruses and other types of computer-based attacks, which could cause lapses in our service or adversely affect the ability of our customers to access our service. Such lapses could have a material adverse effect on our business, prospects, results of operations and financial condition.
8 |
Defects in our Apps and the technology powering our custom development services may adversely affect our business.
Tools, code, subroutines and processes contained within our Apps may contain defects when introduced and also when updates and new versions are released. Our introduction of Apps with defects or quality problems may result in adverse publicity, product returns, reduced orders, uncollectible or delayed accounts receivable, product redevelopment costs, loss of or delay in market acceptance of our products or claims by customers or others against us. Such problems or claims may have a material and adverse effect on our business, prospects, financial condition and results of operations.
If the use of smartphones and tablet devices as game platforms and the proliferation of mobile devices generally do not increase, our business could be adversely affected.
While the number of people using mobile Internet-enabled devices, such as smartphones and tablet devices, has increased dramatically in the past few years, the mobile market, particularly the market for mobile games, is still emerging, and it may not grow as we anticipate. Our future success is substantially dependent upon the continued growth of use of mobile devices for games. The proliferation of mobile devices may not continue to develop at historical rates and consumers may not continue to use mobile Internet-enabled devices as a platform for games. In addition, new and emerging technologies could make the mobile devices on which our Apps are currently released obsolete, requiring us to transition our business model to develop games for other next-generation platforms.
Concerns about health risks associated with wireless equipment may reduce the demand for our services.
Mobile communications devices have been alleged to pose health risks, including cancer, due to radio frequency emissions from these devices. Given that our Apps operate on mobile communications devices, the actual or perceived health risk resulting from the use of mobile communications devices could adversely affect us through a reduction in mobile communication devise users, thereby reducing potential users of our products and services.
If third parties claim that we infringe their intellectual property, it may result in costly litigation.
We cannot assure you that third parties will not claim our current or future products infringe their intellectual property rights. Any such claims, with or without merit, could cause costly litigation that could consume significant management time. As the number of product offerings in the mobile application market increases and functionalities increasingly overlap, companies such as ours may become increasingly subject to infringement claims. Such claims also might require us to enter into royalty or license agreements. If required, we may not be able to obtain such royalty or license agreements, or obtain them on terms acceptable to us.
We may not be able to adequately protect our proprietary technology, and our competitors may be able to offer similar products which would harm our competitive position.
Our success depends upon our proprietary technology. We rely or may rely primarily on copyright, service mark and trade secret laws, confidentiality procedures and contractual provisions to establish and protect our proprietary rights. As part of our confidentiality procedures, we enter into non-disclosure agreements with our employees and consultants. Despite these precautions, third parties could copy or otherwise obtain and use our technology without authorization, or develop similar technology independently. We also pursue the registration of our domain names, trademarks, and service marks in the United States. We cannot assure you that the protection of our proprietary rights will be adequate or that our competitors will not independently develop similar technology, duplicate our products and services or design around any intellectual property rights we hold.
9 |
We may become subject to government regulation and legal uncertainties that could reduce demand for our products and services or increase the cost of doing business, thereby adversely affecting our financial results.
We are not currently subject to direct regulation by any domestic or foreign governmental agency, other than regulations applicable to businesses generally and laws or regulations directly applicable to Internet commerce. However, due to the increasing popularity and use of mobile applications, it is possible that a number of laws and regulations may become applicable to us or may be adopted in the future with respect to mobile applications covering issues such as:
· | user privacy; | |
· | taxation; | |
· | right to access personal data; | |
· | copyrights; | |
· | distribution; and | |
· | characteristics and quality of services. |
The applicability of existing laws governing issues such as property ownership, copyrights and other intellectual property issues, encryption, taxation, libel, export or import matters and personal privacy to mobile applications is uncertain. For example, laws relating to the liability of providers of online services for activities of their users and other third parties are currently being tested by a number of claims, including actions based on invasion of privacy and other torts, unfair competition, copyright and trademark infringement, and other theories based on the nature and content of the materials searched, the ads posted or the content provided by users. It is difficult to predict how existing laws will be applied to our business and the new laws to which we may become subject.
If we are not able to comply with these laws or regulations or if we become liable under these laws or regulations, we could be directly harmed, and we may be forced to implement new measures to reduce our exposure to this liability. This may require us to expend substantial resources or to modify our Apps, which would harm our business, financial condition and results of operations. In addition, the increased attention focused upon liability issues as a result of lawsuits and legislative proposals could harm our reputation or otherwise impact the growth of our business. Any costs incurred as a result of this potential liability could harm our business and operating results.
It is possible that a number of laws and regulations may be adopted or construed to apply to us in the United States and elsewhere that could restrict the mobile industry, including user privacy, advertising, taxation, content suitability, copyright, distribution and antitrust. Furthermore, the growth and development of electronic commerce and virtual goods may prompt calls for more stringent consumer protection laws that may impose additional burdens on companies such as ours conducting business through mobile devices. We anticipate that scrutiny and regulation of our industry will increase and we will be required to devote legal and other resources to addressing such regulation. Changes to these laws intended to address these issues, including some recently proposed changes, could create uncertainty in the marketplace. Such uncertainty could reduce demand for our services or increase the cost of doing business due to increased costs of litigation or increased service delivery costs.
10 |
The laws and regulations concerning data privacy and data security are continually evolving, and our actual or perceived failure to comply with these laws and regulations could harm our business.
We are subject to federal, state and foreign laws regarding privacy and the protection of the information that we collect regarding our users, which laws are currently in a state of flux and likely to remain so for the foreseeable future. The U.S. government, including the Federal Trade Commission and the Department of Commerce, is continuing to review the need for greater regulation over collecting information concerning consumer behavior on the Internet and on mobile devices. For example, in December 2012, the Federal Trade Commission adopted amendments to the Children’s Online Privacy Protection Act to strengthen privacy protections for children under age 13, which amendments became effective in July 2013. Various government and consumer agencies have also called for new regulation and changes in industry practices. For example, in February 2012, the California Attorney General announced a deal with Amazon, Apple, Google and others, to strengthen privacy protection for users that download third-party Apps to smartphones and tablet devices. If we do not follow existing laws and regulations, as well as the rules of the smartphone platform operators, with respect to privacy-related matters, or if consumers raise any concerns about our privacy practices, even if unfounded, it could damage our reputation and operating results.
All of our Apps are subject to our privacy policy and our terms of service located on our corporate website. If we fail to comply with our posted privacy policy, terms of service or privacy-related laws and regulations, including with respect to the information we collect from users of our Apps, it could result in proceedings against us by governmental authorities or others, which could harm our business. In addition, interpreting and applying data protection laws to the mobile App industry is often unclear. These laws may be interpreted and applied in conflicting ways from state to state, country to country, or region to region, and in a manner that is not consistent with our current data protection practices. Complying with these varying requirements could cause us to incur additional costs and change our business practices. Further, if we fail to adequately protect our users’ privacy and data, it could result in a loss of player confidence in our services and ultimately in a loss of users, which could adversely affect our business.
In the area of information security and data protection, many states have passed laws requiring notification to users when there is a security breach for personal data, such as the 2002 amendment to California’s Information Practices Act, or requiring the adoption of minimum information security standards that are often vaguely defined and difficult to implement. Costs to comply with these laws may increase as a result of changes in interpretation. Furthermore, any failure on our part to comply with these laws may subject us to significant liabilities. The security measures we have in place to protect our data and the personal information of our employees, customers and partners could be breached due to cyber-attacks initiated by third party hackers, employee error, malfeasance, or otherwise. Because the techniques used to obtain unauthorized access, disable or degrade service or sabotage systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. Any breach or unauthorized access could materially interfere with our operations or our ability to offer our services or result in significant legal and financial exposure, damage to our reputation and a loss of confidence in the security of our data, which could have an adverse effect on our business and operating results.
11 |
Risks Relating to our Organization and our Common Stock
Our officers and directors apportion their time to other businesses which may cause conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to achieve our business goals and operate successfully.
Our officers and directors engage in other businesses and are not required to devote their full time or any specific number of hours to our affairs, which could create a conflict of interest when allocating their time between our operations and their other commitments. If our officers’ other business affairs require them to devote more substantial additional time to such affairs, it could limit their ability to devote time to our affairs and could have a negative impact on our ability to achieve our business goals and operate successfully.
We are conducting a direct primary offering with no minimum amount required to be raised and as a result we can accept your investment funds at any time without any other investment funds being raised and may not raise sufficient funds to operate our business beyond the next twelve months.
There is no minimum offering amount that must be raised and as result we may close on significantly less than the maximum offering amount. Investment funds will not be placed in an escrow account pending the attainment of a minimum amount of proceeds and will be transmitted directly to the Company for its immediate use. Thus, you may be one of only a few investors in this Offering. In the event that we close on less than the maximum offering amount, we may not have sufficient capital to execute on our business strategy the way we have intended. Our ability to obtain additional financing thereafter may have a materially adverse effect on our ability to execute our overall plan and your investment may be lost. All investor funds for subscriptions are.
If you purchase the Shares, you will experience immediate dilution.
If you purchase the Shares sold in this Offering, you will experience immediate dilution because the price that you pay for our common stock will be greater than the net tangible book value per share of our shares of common stock.
The price of the Shares offered has been arbitrarily established by us.
The price of the Shares was arbitrarily established considering such matters as the state of our business development and the general condition of the industry in which we operate. The Offering price bears little relationship to the assets, net worth, or any other objective criteria of value applicable to us.
There is currently no trading market for our common stock.
There currently is no trading market for our stock. While we seek to identify a marker maker to apply for the Shares to be admitted to quotation on the OTC Markets prior to the effectiveness of the registration statement of which this prospectus forms a part, we cannot assure you that we will indentify a market maker that will files such application or that, if the Shares are admitted to quotation, that a public market will ever develop. There is no guarantee that the Shares will ever be quoted on the OTC Markets or any exchange. Furthermore, you will likely not be able to sell your securities if a regular trading market for our securities does not develop and we cannot predict the extent, if any, to which investor interest will lead to the development of a viable trading market in our Shares. We expect the initial market for our stock to be limited, if a market develops at all. Even if a limited trading market does develop, there is a risk that the absence of potential buyers will prevent you from selling your Shares if you determine to reduce or liquidate your investment. Additionally, the initial public offering price of $0.50 per share may not reflect the current value of our Shares after the Offering. This lack of a trading market and a lack of an adequate number of potential buyers may result in the inability to sell your Shares when desired or result in your receiving a lower price for your Shares upon their sale than you paid in this Offering.
12 |
We do not expect to pay dividends in the future; any return on investment may be limited to the value of our common stock.
We do not currently anticipate paying cash dividends in the foreseeable future. The payment of dividends on our common stock will depend on earnings, financial condition and other business and economic factors affecting it at such time as our Board of Directors may consider relevant. Our current intention is to apply net earnings, if any, in the foreseeable future to the development of our business and to increase our working capital. There can be no assurance that we will ever have sufficient earnings to declare and pay cash dividends to the holders of our common stock, and in any event, a decision to declare and pay dividends is at the sole discretion of our Board. If we do not pay dividends, our common stock may be less valuable because a return on your investment will only occur if its stock price appreciates.
Shares eligible for future sale under Rule 144 may adversely affect the market value of our common stock.
From time to time, certain of our stockholders who hold restricted securities may be eligible to sell all or some of their shares of common stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144, promulgated under the Securities Act, subject to certain limitations. Any substantial sales by holders of our common stock in the future pursuant to Rule 144 may have a material adverse effect on the market price of our securities.
Outstanding shares of preferred stock are convertible into shares of common stock and also carry dividend rights that are payable in shares of common stock, the issuance of which will dilute your percentage of ownership.
As of the date of this prospectus, we have outstanding 2,000,000 shares of Series A Cumulative Convertible Preferred Stock that are convertible into shares of common stock. The holder is may not convert these shares to the extent that after giving effect to such conversion, the holder would beneficially own in excess of 4.99% of the outstanding shartes of common stock (except that, upon prior notice, the holder may increase the percentage to up to 9.99% of the outstanding shares of common stock). These shares are issuable without the payment of any additional consideration. In addition, the Series A Preferred Stock is entitled to receive a quarterly dividend payable in shares of common stock. The issuance of common stock upon the conversion and the payment of dividends on these securities will dilute the percentage ownership of our other stockholders. The holder of these securities may be expected to exercise or convert them when we would be able to obtain additional equity capital on terms more favorable than these securities. The dilutive effect of the exercise or conversion of these securities may adversely affect our ability to obtain additional capital.
Our management will be able to exert significant influence over us to the detriment of minority stockholders.
Our current officers and directors will hold approximately 88.28% of the outstanding shares of common stock immediately after this Offering, assuming all of the Shares offered are sold. These stockholders, if they act together, will continue, following this offering, to be able to exert significant influence on our management and affairs and all matters requiring stockholder approval, including significant corporate transactions and the election of directors. This concentration of ownership may have the effect of delaying or preventing our change in control and might affect the market price of our common stock.
Difficulties we may encounter managing our growth could adversely affect our results of operations.
If we experience rapid and substantial growth, it will place a strain on our administrative infrastructure and our managerial and financial resources. To manage substantial growth of our operations, we will be required to:
· | improve existing, and implement new, operational, financial and management controls, reporting systems and procedures; | |
· | install enhanced management information systems; and |
13 |
· | hire, train, motivate, manage and retain our employees. |
We may not be able to install adequate management information and control systems in an efficient and timely manner, and our current or planned personnel, systems, procedures and controls may not be adequate to support our future operations. If we are unable to manage growth effectively, our business would be seriously harmed.
If we lose key personnel or are unable to attract and retain additional qualified personnel we may not be able to successfully manage our business and achieve our objectives.
We believe our future success will depend upon our ability to retain our management, including Brian Kupchik, our Chief Executive Officer, and Seth Ingram, our Treasurer, both of whom are integral to the implementation of our business plan. Should either of these individuals leave our Company, it may be difficult to replace them. We may not be successful in attracting, assimilating and retaining our employees in the future.
Our future success and our ability to expand our operations will also depend in large part on our ability to attract and retain additional qualified technical, sales and marketing and senior management personnel. Competition for these types of employees is intense due to the high demand for them, particularly in the New York metropolitan area, where our office is located. Failure to attract, assimilate and retain personnel, particularly tech and sales and marketing personnel, would have a material adverse effect on our business and potential growth.
Our management’s lack of public company experience could put us at greater risk of incurring fines or regulatory actions for failure to comply with federal securities laws and could put us at a competitive disadvantage.
Neither of our officers, who also are our directors, has any experience managing or operating a public company. Any failure to adequately comply with federal securities laws, rules or regulations could subject us to fines or regulatory actions, which may materially adversely affect our business, prospects, results of operations and financial condition. Further, our Company may have to spend more time and money to comply with legally mandated corporate governance policies than our competitors whose management teams have public company experience.
We have no independent audit committee. Our full board of directors functions as our audit committee and none of our directors is considered independent. This may hinder our board of directors’ effectiveness in fulfilling the functions of the audit committee.
We are not required to have an audit committee and have not established one. Our full board of directors functions as our audit committee and is comprised of our two directors, neither of whom is considered to be “independent” in accordance with the requirements of Rule 10A-3 under the Exchange Act. An independent audit committee plays a crucial role in the corporate governance process, assessing a company’s processes relating to its risks and control environment, overseeing financial reporting and evaluating internal and independent audit processes. The lack of an independent audit committee may prevent our board of directors from being independent from management in its judgments and decisions and its ability to pursue the committee’s responsibilities without undue influence. We may have difficulty attracting and retaining directors with the requisite qualifications. If we are unable to attract and retain qualified, independent directors, the management of our business could be compromised.
14 |
The designation of our common stock as a "penny stock" would limit the liquidity of the Shares.
Our common stock may be deemed a “penny stock” (as that term is defined under Rule 3a51-1 of the Exchange Act) in any market that may develop in the future. Generally, a "penny stock" is a common stock that is not listed on a securities exchange and trades for less than $5.00 a share. Prices often are not available to buyers and sellers and the market may be very limited. Penny stocks in start-up companies are among the riskiest equity investments. Broker-dealers who sell penny stocks must provide purchasers of these stocks with a standardized risk-disclosure document prepared by the SEC. The document provides information about penny stocks and the nature and level of risks involved in investing in the penny stock market. A broker must also provide purchasers with bid and offer quotations and information regarding broker and salesperson compensation, make a written determination that the penny stock is a suitable investment for the purchaser and obtain the purchaser's written agreement to the purchase. Many brokers choose not to participate in penny stock transactions. Because of the penny stock rules, there may be less trading activity in penny stocks in any market that develops for our common stock in the future and stockholders are likely to have difficulty selling their shares.
FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.
In addition to the “penny stock” rules described above, the Financial Industry Regulatory Authority (“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, the FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock stocks in any market that develops for our common stock in the future, which may limit the ability to buy and sell our stock and which will have an adverse effect on any market that develops for our shares.
Our stock price may be volatile.
The stock market in general, and the stock prices of technology-based and wireless communications companies in particular, have experienced volatility that often has been unrelated to the operating performance of any specific public company. If our common stock is approved for trading or quotation, the market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following:
· | changes in our industry; | |
· | competitive pricing pressures; | |
· | our ability to obtain working capital financing; | |
· | additions or departures of key personnel; | |
· | limited "public float" in the hands of a small number of persons whose sales or lack of sales could result in positive or negative pricing pressure on the market prices of our common stock; | |
· | sales of our common stock; | |
· | our ability to execute our business plan; | |
· | operating results that fall below expectations; | |
· | loss of any strategic relationship; | |
· | regulatory developments; | |
· | economic and other external factors; and |
15 |
· | period-to-period fluctuations in our financial results. |
In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.
Limitations on liability and indemnification matters.
As permitted by the corporate laws of the State of Nevada, we have included in our articles of incorporation a provision to eliminate the personal liability of our directors for monetary damages for breach or alleged breach of their fiduciary duties as directors, subject to certain exceptions. In addition, our bylaws provide that we are required to indemnify our officers and directors under certain circumstances, including those circumstances in which indemnification would otherwise be discretionary, and we will be required to advance expenses to our officers and directors as incurred in connection with proceedings against them for which they may be indemnified. If we are required to indemnify, both for the costs of their defense in any action or to pay monetary damages upon a finding of a court or in any settlement, our business and financial condition could be materially and adversely affected.
Because we will have broad discretion over the use of the net proceeds from this Offering, you may not agree with how we use them and the proceeds may not be invested successfully.
We will have broad discretion on the use of the Offering proceeds. While we currently anticipate that we will use the net proceeds of this Offering for to (i) develop and acquire new mobile apps, (ii) update our existing mobile Apps, (iii) advertising and marketing, (iv) expenses associated with public company reporting requirements, (v) staffing, and (v) working capital, our management may allocate the net proceeds among these purposes as it deems necessary. In addition, market or other factors may require our management to allocate portions of the net proceeds for other purposes. Accordingly, you will be relying on the judgment of our management with regard to the use of the net proceeds from this Offering, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. It is possible that the proceeds will be invested in a way that does not yield a favorable, or any, return for us.
Issuance of stock to fund our operations may dilute your investment and reduce your equity interest.
We may need to raise capital in the future to fund the growth of our Company. Any equity financing may have significant dilutive effect to stockholders and a material decrease in our stockholders’ equity interest in us. Equity financing, if obtained, could result in substantial dilution to our existing stockholders. At its sole discretion, our board of directors may issue additional securities without seeking stockholder approval, and we do not know when we will need additional capital or, if we do, whether it will be available to us.
Our board of directors is authorized to issue preferred stock without obtaining shareholder approval.
Our articles of incorporation authorizes the issuance of up to 10,000,000 shares of preferred stock with designations, rights and preferences that may be determined from time to time by the board of directors. As of the date of this prospectus, there are 2,000,000 shares of Series Preferred Stock designated and outstanding. Our board of directors is empowered, without stockholder approval but subject to the rights of existing the holders of Series A Preferred Stock, to create and issue additional series of preferred stock with dividend, liquidation, conversion, voting, or other rights which could adversely affect the voting power or other rights of the holders of the common stock. In the event of issuance, the preferred stock could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of the Company. Although we have no present intention to issue any additional shares of preferred stock, there can be no assurance that the Company will not do so in the future.
16 |
We will incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could harm our operating results.
As a public company, we will incur significant legal, accounting and other expenses, including costs associated with public company reporting requirements. We will also incur costs associated with current corporate governance requirements, including requirements under Section 404 and other provisions of the Sarbanes-Oxley Act, as well as rules implemented by the SEC or any stock exchange or inter-dealer quotations system on which our common stock may be listed in the future. The expenses incurred by public companies for reporting and corporate governance purposes have increased dramatically in recent years. We expect these rules and regulations to substantially increase our legal and financial compliance costs and to make some activities more time-consuming and costly. We are unable to currently estimate these costs with any degree of certainty. We also expect that these new rules and regulations may make it difficult and expensive for us to obtain director and officer liability insurance, and if we are able to obtain such insurance, we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage available to privately-held companies. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as our executive officers.
If we fail to maintain proper and effective internal controls, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating results, our ability to operate our business and investors’ views of us.
We will be required to comply with Section 404 of the Sarbanes-Oxley Act which requires public companies to conduct an annual review and evaluation of their internal controls and attestations of the effectiveness of internal controls by independent auditors. Ensuring that we have adequate internal financial and accounting controls and procedures in place so that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort that will need to be evaluated frequently. Our failure to maintain the effectiveness of our internal controls in accordance with the requirements of the Sarbanes-Oxley Act could have a material adverse effect on our business. We could lose investor confidence in the accuracy and completeness of our financial reports, which could have an adverse effect on the price of our common stock. In addition, if our efforts to comply with new or changed laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against us and our business may be harmed.
As an “emerging growth company” under the JOBS Act, we are permitted to rely on exemptions from certain disclosure requirements.
We qualify as an “emerging growth company” under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:
· | have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; | |
· | comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis); |
17 |
· | submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay” and “say-on-frequency”; and | |
· | disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation. |
In addition, Section 102 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
We will remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.
Until such time, however, we cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this prospectus that are forward-looking in nature are based on the current beliefs of our management as well as assumptions made by and information currently available to management, including statements concerning our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our business operations and financial performance and condition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “could,” “should,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “predict,” ”contemplate,’ continue,” “potential” and similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology, may identify forward-looking statements. These statements reflect our judgment as of the date of this prospectus with respect to future events, the outcome of which is subject to risks, which may have a significant impact on our business, operating results or financial condition. You are cautioned that these forward-looking statements are inherently uncertain. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described herein. Except as required by law, we undertake no obligation to update forward-looking statements. The risks identified in the “Risk Factors” section of this prospectus, among others, may impact forward-looking statements contained in this prospectus.
You should also refer to the section of this prospectus entitled “Risk Factors” for a discussion of factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this prospectus will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may prove to be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time-frame, or at all.
18 |
All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements. You should evaluate all forward-looking statements made in this prospectus in the context of these risks and uncertainties.
We caution you that the important factors referenced above may not contain all of the factors that are important to you.
We estimate that our proceeds from this Offering, assuming all Shares are sold, will be $500,000 (based on an assumed offering price of $0.50 per share). The following table sets forth the uses of proceeds assuming the sale of 25%, 50%, 75%, and 100%, respectively, of the securities offered for sale by us.
If 25% of
Sold |
If 50% of
Sold |
If 75% of
Sold |
If 100% of
Sold |
|||||||||||||
Net Proceeds | $ | 125,000 | $ | 250,000 | $ | 375,000 | $ | 500,000 | ||||||||
Develop and Acquisition of Apps | $ | 25,000 | $ | 80,000 | $ | 150,000 | $ | 215,000 | ||||||||
Update Existing App Portfolio | $ | 25,000 | $ | 25,000 | $ | 25,000 | $ | 25,000 | ||||||||
Advertising and Marketing | $ | 10,000 | $ | 30,000 | $ | 45,000 | $ | 67,500 | ||||||||
Fees for Public Company Reporting Requirements | $ | 25,000 | $ | 25,000 | $ | 25,000 | $ | 25,000 | ||||||||
Staffing | $ | 10,000 | $ | 30,000 | $ | 45,000 | $ | 67,500 | ||||||||
General Working Capital | $ | 30,000 | $ | 60,000 | $ | 85,000 | $ | 100,000 | ||||||||
TOTAL | $ | 125,000 | $ | 250,000 | $ | 375,000 | $ | 500,000 |
We will receive all proceeds from the sale of the common stock and intend to use the proceeds from this Offering, to continue implementing the business and marketing plan. The expenses of this Offering, including the preparation of this prospectus and the filing of this registration statement, estimated at $16,000 are being paid for by us. Our budgetary allocations may vary, however, depending upon the percentage of proceeds that we obtain from the Offering. For example, we may determine that it is more beneficial to allocate funds toward securing potential financing and business opportunities in the short terms rather than to conserve funds to satisfy continuous disclosure requirements for a longer period.
DETERMINATION OF OFFERING PRICE
The offering price for the Shares in this Offering was arbitrarily determined. In determining the initial public offering price of the Shares, we considered several factors including the following:
· | Our business structure and operations; | |
· | Prevailing market conditions, including the history and prospects for our industry; |
19 |
· | Our future prospects and the experience of our management; and | |
· | Our capital structure. |
Therefore, the public offering price of the Shares does not necessarily bear any relationship to established valuation criteria and may not be indicative of prices that may prevail at any time or from time to time in the public market for the common stock. You cannot be sure that a public market for any of our securities will develop and continue or that the securities will ever trade at a price at or higher than the offering price in this Offering.
If you invest in our common stock, your interest will be diluted to the extent of the difference between the initial public offering price per share and the pro forma net tangible book value per share after the offering. Dilution results from the fact that the per share offering price is substantially in excess of the book value per share attributable to the existing shareholders for our presently outstanding shares of common stock. Dilution arises mainly as a result of our arbitrary determination of the offering price of the Shares being offered. Dilution of the value of the Shares you purchase is also a result of the lower book value of the Shares held by our existing stockholders.
Our historical net tangible book value (deficit) at May 31, 2015 was $(16,720), or $(0.0042) per share of common stock. Net tangible book value is the amount that results from subtracting total liabilities and intangible assets from total assets.
The following tables compare the differences of your investment in our Shares with the investment of our existing stockholders based on the percentage of Shares sold of the 1,000,000 Shares available to be purchased:
Dilution to New Stockholders | 25 | % | 50 | % | 75 | % | 100 | % | ||||||||
Per share offering price | $ | 0.50 | $ | 0.50 | $ | 0.50 | $ | 0.50 | ||||||||
Net tangible book value per share before Offering (1) | $ | (0.0042 | ) | $ | (0.0042 | ) | $ | (0.0042 | ) | $ | (0.0042 | ) | ||||
Net tangible book value per share after Offering (2) | $ | (0.0039 | ) | $ | (0.0037 | ) | $ | (0.0035 | ) | $ | (0.0033 | ) | ||||
Decrease in investment to new stockholders | $ | (0.0002 | ) | $ | (0.0005 | ) | $ | (0.0007 | ) | $ | (0.0008 | ) | ||||
Dilution to new stockholders | $ | 0.4961 | $ | 0.4963 | $ | 0.4965 | $ | 0.4967 |
(1) | Before Offering: |
25 | % | 50 | % | 75 | % | 100 | % | |||||||||
Pro Forma Stockholders’ Equity (Deficit) | $ | (16,720 | ) | $ | (16,720 | ) | $ | (16,720 | ) | $ | (16,720 | ) | ||||
Divided by: | ||||||||||||||||
Shares outstanding before Offering | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | ||||||||||||
Equals: | ||||||||||||||||
Net tangible book value per share | (0.0042 | ) | (0.0042 | ) | (0.0042 | ) | (0.0042 | ) |
(2) | After Offering: |
25 | % | 50 | % | 75 | % | 100 | % | |||||||||
Pro Forma Stockholders’ Equity (Deficit) | $ | (16,720 | ) | (16,720 | ) | (16,720 | ) | (16,720 | ) | |||||||
Divided by: | ||||||||||||||||
Shares outstanding before Offering | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | ||||||||||||
Shares issued in Offering | 250,000 | 500,000 | 750,000 | 1,000,000 | ||||||||||||
Total shares outstanding after Offering | 4,250,000 | 4,500,000 | 4,750,000 | 5,000,000 | ||||||||||||
Equals: | ||||||||||||||||
Net tangible book value per share | (0.0039 | ) | (0.0037 | ) | (0.0035 | ) | (0.0033 | ) |
20 |
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
There is currently no public trading market for our common stock and no such market may ever develop. While we intend to seek and obtain quotation of our common stock for trading on the OTC Markets, there is no assurance that our application will be approved. An application for quotation on the OTC Markets must be submitted by one or more market makers who:
· | are approved by FINRA; | |
· | who agree to sponsor the security; and | |
· | who demonstrate compliance with SEC Rule 15(c)2-11 before initiating a quote in a security on the OTC Markets. |
In order for a security to be eligible for quotation by a market maker on the OTC Markets, the Company will be required to meet a ($0.01) bid price test, provide information based upon their reporting standard (SEC Reporting, Bank Reporting or International Reporting), and submit an annual OTC Markets Certification signed by our Chief Executive Officer or Chief Financial Officer. Currently, Mr. Kupchik, our President and Chief Executive Officer acts as our principal financial and accounting officer.
Prior to the effectiveness of this registration statement, we will seek to cause a market maker to submit an application for quotation to the OTC Markets, though we have not yet indentified a market maker to file such application. We can provide no assurance that we will be able to identify a market maker to submit an application to the OTC Markets, that our common stock will be traded on the OTC Markets or, if traded, that a public market will materialize.
Holders
As of the date of this prospectus, there were four (4) holders of record of our common stock and one holder of record of our Series A Preferred Stock.
Reports
Upon the effectiveness of the registration statement of which this prospectus is a part, the Company will be subject to certain reporting requirements and will file with the SEC annual reports including annual financial statements, certified by our independent accountants, and unaudited quarterly financial statements in our quarterly reports filed electronically with the SEC. All reports and information filed by the Company can be found at the SEC’s website, www.sec.gov.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is VStock Transfer, LLC. Its telephone number is (212) 828-8436.
Financial Statements
Our financial statements are included in this prospectus, beginning on page F-1.
21 |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations together with the section entitled “Selected Financial Data” and our financial statements and related notes included elsewhere in this prospectus. This discussion and other parts of this prospectus contain forward-looking statements that involve risks and uncertainties, such as our plans, objectives, expectations, intentions and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section entitled “Risk Factors” included elsewhere in this prospectus.
Overview
We were organized in March 2015. In April 2015, we concluded a transaction in which we issued 2,000,000 shares of our Series A Preferred Stock in exchange for the sum of $50,000 and a portfolio comprising over 400 Apps titles. Our Apps titles include games designed to appeal to a broad cross section of consumers and legal-related Apps that provide compilations of federal and state laws and regulations across a variety of legal disciplines and digests of court decisions rendered by federal courts. We are in the process of migrating the game programs into our corporate structure which may take some time in view of the fact that, in some cases, our contract programmers must rewrite certain lines of code in the game. We also are updating our legal Apps titles that had been neglected over several years.
We offer all of our game titles in both a free advertisement-supported version and a paid version that does not display ads. We believe that the ad supported versions allow for wider dissemination of our titles to consumers who might not otherwise spend money for an App without first playing the game.
Consumers download our Apps through direct-to-consumer digital storefronts, such as the Apple App Store and Google Play Store. We currently generate revenue from sales, or downloads, or of Apps and from advertisements published on our ad supported game titles.
Growth Strategies and Outlook
Our principal growth strategy entails developing and acquiring new Apps to supplement our existing Apps portfolio. Our primary focus will be to release new game titles. We are developing a pipeline of independent game designers, developers and programmers who provide us with new ideas and titles to publish. We also are soliciting new games and concepts that we may acquire from third parties. We also will seek to develop and publish free-to-play games. Free-to-play games are games that a player can download and play for free, but which allow players to access a variety of additional content and features for a fee, through “in-app purchases” utilizing virtual currency they may be purchased through digital storefronts, and to engage with various advertisements and offers that generate revenues for us. We may seek to acquire franchises around which we develop games, including movies, television programs, toys and other cultural phenomena that lend themselves to gamification.
Our ability to pursue and achieve our objectives are predicated on our receipt of meaningful revenue from sales of our existing Apps and those we may release in the future and from our ability to raise capital from outside sources.
Our revenues will depend significantly on growth in the mobile games market and our ability to develop or acquire and publish mobile Apps that are well received by consumers. We expect to invest resources in research and development, analytics and marketing to introduce new Apps and continue to update our existing Apps, and to the extent that Apps behind which we have invested significant capital are not successful, our business and financial condition could be harmed. We operate in an extremely competitive environment for consumers against a continually increasing number of developers, many of which are significantly larger than us and have other competitive advantages, and the overall strength of the economy in the United States. We expect to allocate a material portion of our operating revenue and capital that we receive to spending on sales and marketing initiatives in connection with the launch and promotion of our games in an effort to drive sales.
22 |
Our revenues also will depend on maintaining our continued good relationship with the digital storefront operators, primarily Apple and Google, each of which could unilaterally alter their terms of service in ways that could harm our business.
Our ability to achieve and sustain profitability will depend not only on our ability to grow our revenues, but also on our ability to manage our operating expenses. Currently, we have two employees, neither of whom receives a salary but who may seek to be compensated in the future. For the foreseeable further, we expect to utilize the services of independent contractors and consultants, who we believe are readily available for our purposes, in order to manage our personnel costs. We also will continue to maintain a virtual office as long as our operations permit to keep our office space overhead within reason.
We acquired our Apps portfolio in April 2015 and our management has operated these assets only for a very limited period of time. Thus far, we have initiated new marketing and sales strategies with respect to our exiting titles and have seen an increase in sales of our game related Apps. We also commenced the process of bringing up to date our legal related titles that had not been updated in several years and have experienced increased sales and decreased returns by consumers of these titles. Management believes that it can bring considerable industry experience to the marketing of our Apps and that positive sales results, in small increments, at first, will be evident in the near term and pick up as time progresses. Moreover, as management supplements our Apps portfolio with new games and launches free-to-play games with multiple potential revenue streams, it expects revenues to grow rapidly. Management will seek to leverage to our benefit its strong industry contacts built over many years across a range of Internet related sales and marketing ventures.
Results of Operations for the period March 24, 2105 (inception) through May 31, 2015
Revenue
For the period from inception through May 31, 2015, our revenue was $518, comprised exclusively of sales or our Apps through direct-to-consumer digital storefronts.
Depreciation and Amortization Costs
For the period from inception through May 31, 2015, our amortization costs were $1,667, which represents amortization of our App portfolio, which we acquired for a cash price of $50,000, based on a five year useful life of the Apps.
Selling, General and Administrative Expenses
For the period from inception through May 31, 2015, our selling, general and administrative costs were $6,528. These costs comprise principally licensing and filing fees and office administrative expenses.
Professional Fees
For the period from inception through May 31, 2015, our professional costs were $9,000 representing the amount we paid for professional services since our organization and in connection with the preparation of the registration statement of which this prospectus forms a part.
23 |
Net Loss
For the period from inception through May 31, 2015, we recorded a net loss of $16,677 because our expenses during the period exceeds our income as we migrated our Apps portfolio into our Company and recently began implementing marketing initiatives.
Liquidity and Capital Resources
Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity include funds generated by operations, the availability of credit facilities, levels of accounts receivable and accounts payable and capital expenditures.
As of May 31, 2015, we had working capital of $35,398, comprising $35,119 of cash and $279 of accounts receivable.
Since our inception, we have financed our operations through the sale of equity securities and from internally generated revenue from operations. Our primary requirements for liquidity and capital are the development or acquisition of new Apps, updating our legal related Apps titles, sales and marketing initiatives we will undertake in connection with the launch and promotion of our games, and working capital and general corporate needs. Our working capital requirements are not significant, since our customers pay for their purchases by credit or debit card at the time of sale. Neither inventories nor receivables are relevant to our business.
We require additional capital to achieve our objectives of developing and acquiring new Apps. We are working with independent game designers, developers and programmers who provide us with new ideas and titles to publish. We also are soliciting new games and concepts that we may acquire from third parties. When we receive an idea for a new App, we research the commercial viability of the concept, undertaking an analysis of the cost to develop the App against its potential economic return. If we determine that the App is commercially viable, we may fund the cost of development, publication and marketing. Upon completion of development we will own the App title. Developing and publishing free-to-play games will require considerable capital to develop, maintain and update, particularly games we may seek to develop around popular movie, television, toy other cultural phenomena that lend themselves to gamification.
Our cash on hand and cash flow from existing operations will allow us to operate at current levels but will not be sufficient to fund our desired development and acquisition strategy or the cash required in connection with launching, marketing and promoting our games, and we are dependent on the proceeds from the sale of the Shares in this Offering to fund these endeavors. If we do not receive sufficient funds from the sale of Shares in this offering, we may seek to raise such funds by way of equity or debt financings in the future. Any debt financing secured by us in the future could involve restrictive covenants relating to our capital-raising activities and other financial and operational matters, which might make it more difficult for us to obtain additional capital and to pursue business opportunities, including opening new restaurants. We might not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to develop and acquire new Apps and adequately promote them and to respond to business challenges could be significantly limited. Furthermore, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. The inability to obtain additional capital may restrict our ability to grow and may reduce our ability to continue to conduct business operations. If we are unable to obtain additional financing, we may have to curtail our marketing and development plans and possibly cease our operations.
24 |
Cash Flows:
The following table presents summary cash flow information for the periods indicated.
For the period March 24, 2014 (inception) | ||||
Through May 31, 2015 | ||||
Net cash used in operating activities | $ | (15,289 | ) | |
Net cash used in investing activities | (50,000 | ) | ||
Net cash provided by financing activities | 104,408 | |||
Net increase in cash | $ | 35,119 |
Operating Activities
Since our inception through May 31, 2015, we have used $15,289 for operating activities, comprising the payment of professional fees and for selling, general and administrative expenses.
Investing Activities
Since our inception through May 31, 2015, we have used $50,000 in investing activities, comprising the purchase of our portfolio of Apps.
Financing Activities
Since our inception through May 31, 2015, net cash used provided by financing activities was $104,408, comprising capital contributions and proceeds from the sale of 2,000,000 shares at $.05 per share.
Contractual Commitments as of May 31, 2015
As of the date of this prospectus, the Company has no contractual obligations, commercial commitments, long-term debt or lease obligations.
Off-Balance Sheet and Other Arrangements
As of the date of this prospectus, the Company has not had any off-balance sheet or similar arrangements since its inception.
Inflation
We do not believe that inflation has had a material effect on our business, financial condition or results of operations. If our costs were to become subject to significant inflationary pressures, we might not be able to fully offset these higher costs through price increases. Our inability or failure to do so could harm our business, operating results and financial condition.
Critical Accounting Policies and Use of Estimates
The preparation of our consolidated financial statements in accordance with United States Generally Accepted Accounting Principles, of GAAP, requires us to make estimates and judgments that affect our reported amounts of assets, liabilities, revenue, and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under current circumstances in making judgments about the carrying value of assets and liabilities that are not readily available from other sources. We evaluate our estimates on an on-going basis. Actual results may differ from these estimates under different assumptions or conditions.
Accounting policies are an integral part of our financial statements. A thorough understanding of these accounting policies is essential when reviewing our reported results of operations and our financial position. Management believes that the critical accounting policies and estimates discussed below involve the most difficult management judgments, due to the sensitivity of the methods and assumptions used. Our significant accounting policies are described in Note 1 to our consolidated financial statements included elsewhere in this report.
25 |
We believe the following accounting policies and estimates are the most critical. Some of them involve significant judgments and uncertainties and could potentially result in materially different results under different assumptions and conditions.
Revenue Recognition - The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned less estimated future doubtful accounts. The Company considers revenue realized or realizable and earned when all of the following criteria are met:
(i) |
persuasive evidence of an arrangement exists, |
(ii) | the services have been rendered and all required milestones achieved, |
(iii) | the sales price is fixed or determinable, and |
(iv) | collectability is reasonably assured. |
Recent Accounting Pronouncements
Emerging Growth Company Critical Accounting Policy Disclosure: We qualify as an "emerging growth company" under the 2012 JOBS Act. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. As an emerging growth company, we can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period.
There are no recent accounting pronouncements published after April 5, 2012 that have a material effect on the financial statements presented herein.
Overview
AppSoft Technologies, Inc. (“we,” “us,” or the “Company”) develops, publishes and markets mobile software applications for smartphones and tablet devices (“Apps”). We currently own a portfolio comprising over 400 Apps titles including games designed to appeal to a broad cross section of consumers and legal-related Apps that provide compilations of federal and state laws and regulations across a variety of legal disciplines and digests of court decisions rendered by federal courts. Consumers download our Apps through direct-to-consumer digital storefronts, such as the Apple App Store and Google Play Store.
We currently generate revenue from sales, or downloads, of our Apps and from advertisements published on our ad supported game titles.
We plan to update our current titles, to develop new Apps and to acquire third party Apps.
Each member of our senior management team has accumulated a wealth of experience, knowledge and contacts across the key disciplines in the digital and mobile industries. Their backgrounds encompass digital and social media sales, advertising, operations, and technology and product development and deployment. We expect to leverage management’s industry experience and contacts to our advantage.
26 |
Industry Background and Trends
An App is a type of application software designed to run on a mobile device, such as a smartphone or tablet device. Mobile Apps frequently serve to provide users with similar services to those accessed on personal computers. Typically, Apps provide limited and isolated functionality, such as a game, calculator or mobile Web browsing, necessitated by the limited hardware resources of the early mobile devices. However, techopedia.com suggests that their specificity is now part of their desirability because they allow consumers to hand-pick what their devices are able to do without cluttering memory and impeding performance with functionality they do not use.
Over the last several years, mobile devices, including smartphones and tablets, have proliferated extensively around the world across a wide range of demographic groups, which is demonstrated in the following statistics published by the noted sources:
· | 80% of all online adults now own a smartphone. TechCrunch, January 12, 2015 |
· | Mobile app use grew by 115% in 2013 – Flurry 2014 |
· | Apple has sold 591 million iPhones since its launch in 2007. – Statista.com 2015 |
· | Mobile search will comprise an estimated 26.7% of Google’s total ad revenues this year, up from 19.4% in 2013. – eMarketer 2014 |
· | 1.2 billion people worldwide were using mobile apps at the end of 2012. This is forecast to grow at a 29.8 percent each year, to reach 4.4 billion users by the end of 2017.– Portio Research 2013 |
· | In Q1 2013, there were 13.4 billion app downloads, up 11 percent from Q4 2012, creating revenue of US$2.2 billion. – Canalys 2013 |
· | Global mobile traffic now accounts for 15% of all Internet traffic. – Internet Trends 2013 |
· | 85% of people prefer mobile apps to mobile websites - WebDAM 2014 |
As mobile devices have become more prevalent, the mobile Apps industry has experienced corresponding growth in the number of Apps published and the niches they serve, as well as the revenues they generate. We believe that there will continue to be an increase in the number of smartphones and tablets sold. In addition, Apple, Samsung and other mobile device manufacturers have introduced new, larger and more powerful smartphones and tablets that enable more complex Apps and that allow game developers to create games that are optimized for larger screen sizes and designed to take advantage of these devices’ advanced capabilities and functionality. We believe that the proliferation of and technological developments to mobile devices will continue to drive growth in our industry for the foreseeable future.
Our App Portfolio
In March 2015, we acquired a portfolio comprising over 400 App titles. Our Apps are divided among game titles and Apps that provide compilations of federal and state laws and regulations across a variety of legal disciplines and digests of court decisions rendered by federal courts.
27 |
Some of our most popular titles include:
Our game titles designed to appeal to a variety of age groups ranging from younger teens to adults. We offer our games in both a free advertisement-supported version and a paid version that does not display ads. We believe that by offering free ad supported versions we can build a significantly larger customer base more quickly than we could if we charged users an up-front fee to download our games since they may be reluctant to purchasing a game without first playing it. If a consumer enjoys a title, they may purchase the game and play without interruption from pop-up ads. When we purchased our Apps portfolio, the advertisement component of our ad-supported games we offered through the iOs network was not activated and we were not generating any revenue from ads published on these games. We recently completed ad enabling the iOs game apps and are now realizing revenue from these products. Further, code embedded in the Apps by developer directs revenue generated from ad sales on the Apps to be paid to a specific account owned by the developer. We have engaged a new ad service company to serve ads to our Apps and are re-writing code to provide that all revenue is paid to an account we control.
When we acquired our portfolio of Apps, the content of all of our legal-related titles was out of date, in some cases by several years, and did not include laws and regulations adopted or legal decisions rendered during the period between the last update and the date we acquired them. As a result, purchasers returned an exceedingly high percentage of these Apps after purchase. We are working with an independent code writer / IT specialist who has developed a proprietary code to maintain our legal titles on a continuous basis. We have started the process of updating the content and are focusing our initial efforts on titles that we believe have the greatest revenue generating potential. For example, we already have brought current legal titles on which we publish laws enacted by the States of Texas, Florida and Arizona, and we will methodically work our way through all of the states through completion. In order to generate consumer interest in our legal-related titles and increase downloads and avoid returns, we will be have to update the content and maintain them on a continuous basis.
Product Development
We are constantly seeking to develop and acquire new Apps to supplement our portfolio. Our primary focus will be to release new game titles. We are developing a pipeline of independent game designers, developers and programmers who provide us with new ideas and titles to publish. We also are soliciting new games and concepts that we may acquire from third parties.
When we receive an idea for a new App, we research the commercial viability of the concept, undertaking an analysis of the cost to develop the App against its potential economic return. If we determine that the App is commercially viable, we may fund the cost of development, publication and marketing. Upon completion of development we will own the App title.
28 |
We also will seek to develop and publish free-to-play games. Free-to-play games are games that a player can download and play for free, but which allow players to access a variety of additional content and features for a fee, through “in-app purchases” utilizing virtual currency they may be purchased through digital storefronts, and to engage with various advertisements and offers that generate revenues for us. Several large game publishers are successfully employing this business model. In order for us to achieve success using this model, we must develop and publish games that are widely accepted and commercially successful, which will provide us with the largest base from which to monetize our in app sales. In addition to building strong core gameplay, successful monetization will require that we continually create new content within games and otherwise find ways to retain players and incentivize them to make in-app purchases. As these games gain wider acceptance and mature in the market, we may seek to improve monetization and increase awareness of our games by building social media communities around our tiles and by delivering additional features, such as tournaments, live events and more frequent content updates.
We may seek to acquire franchises around which we develop games. Franchises may include movies, television programs, toys and other cultural phenomena that lend themselves to gamification. We will have to obtain a license from the owner of the franchise for each App we publish that is based on a third party franchise and we likely will be required to pay ongoing royalties to the franchise owner.
In August 2013, our officers organized and they currently are the principals of Primo Media, Inc., a Latin focused, m ulti-channel network that connects brands with millions of Hispanic Millennials through integrated digital and mobile advertising opportunities across our network. We expect to use the knowledge and experience gained by our officers to market our games to the Hispanic population. We may seek to publish Spanish language versions of our games and develop games and Apps that are geared specifically toward the Spanish speaking market segment.
The markets for our products are characterized by rapid technological change, particularly in the technical capabilities of mobile phones and tablets, and changing end-user preferences. Therefore, we will be required to continuously invest capital to innovate and publish new games, regularly update our games, and modify existing games for distribution on evolving platforms. We cannot assure that we will have the capital to develop new and update existing game, that we will be successful in selecting new games to bring to market or that our updates to successful games will allow us to retain market share.
Sales, Marketing and Distribution
We market, sell and distribute our Apps exclusively through Apple’s App Store and the Google Play Store, the largest direct-to-consumer digital storefronts. We expect that a majority of our revenues will be derived from sales on the Apple App Store.
We currently generate revenue from downloads of our paid Apps and from advertisements published on our ad supported game titles. We have begun the process of migrating the Apps into our corporate structure. We recently retained a new ad network that we believe employs a more effective technology platform and a more aggressive direct sales team. We also are integrating into our existing games and will incorporate into our new games lucrative ad models and in-game purchasing.
We may partner with other App publishers to develop and market new titles. These types of arrangements will allow us to defray development and marketing costs among a wider range of titles and increase our chances of publishing a successful title.
We employ advanced analytics, a means of analyzing data we collect about users of our Apps, to develop and publish more appealing titles and features in our games.
29 |
Our ability to market our Apps successfully on direct-to-consumer digital storefronts will depend on a number of factors, including our ability to build relationships with storefront owners and educate them about our title roadmap so that they feature or otherwise prominently place them within the storefront. If we are able to achieve these ends, we believe that consumers are more likely to find our Apps, which may result in greater downloads and more revenue. We believe that a number of factors may influence the featuring or placement of an App, including:
· | the perceived attractiveness of the title; |
· | the level of critical or commercial success of the App or of other Apps previously introduced by a publisher; |
· | incorporation of the storefront owner’s latest technology in the publisher’s title; |
· | how strong the consumer experience is on all of the devices that discover titles using any given digital storefront; |
· | the publisher’s relationship with the applicable storefront owner and future pipeline of quality titles for it; and |
· | the current market share of the publisher. |
We also expect to undertake a number of marketing initiatives designed to attract consumers to download our Apps, including:
· | using social networking websites, such as Facebook and Twitter, focused directly at the target users of our Apps; |
· | paying third parties to advertise or incentivize consumers to download our Apps through offers or recommendations; |
· | using “push” notifications to alert existing and prospective users of updates to our Apps and new product offerings; |
· | cross-promoting our Apps through banner advertisements in our other Apps, as well as advertising our Apps in our competitors’ product offerings; and |
· | undertaking outreach efforts with video game websites and related media outlets, such as providing reviewers with access to our games prior to launch. |
Competition
Developing, distributing and selling Apps is a highly competitive business, characterized by frequent product introductions and rapidly emerging new platforms, technologies and storefronts. With respect to competing for consumers of our game related Apps, we will compete primarily on the basis of game quality, brand and customer reviews. We will compete for promotional and digital storefront placement based on these factors, as well as our relationship with the storefront owner, historical performance, perception of sales potential and relationships with licensors of brands, properties and other content. With respect to our legal Apps, we will compete on the basis of providing the most up to date content, the App’s ease of use (navigation and readability) and its price as compared to similar product offerings. We also will compete for experienced and talented employees and independent contractors.
We believe that our small size will allow provide us a competitive edge for the time being and allow us to make quick decisions as to product development to take advantage of consumer preferences at a particular point in time.
With respect to our game Apps, we compete with a continually increasing number of companies, including industry leaders such as Activision, DeNA, Disney, Electronic Arts (EA Mobile), Gameloft, GREE, GungHo Online Entertainment, King Digital Entertainment, Nexon, Warner Brothers and Zynga and many well-funded private companies, including Kabam, Machine Zone, Rovio, Storm 8/Team Lava and Supercell. We could also face increased competition if large companies with significant online presences such as Apple, Google, Amazon, Facebook or Yahoo, choose to enter or expand in the games space or develop competing games.
30 |
In addition, given the open nature of the development and distribution for smartphones and tablets, we also compete or will compete with a vast number of small companies and individuals in all of our segments who are able to create and launch Apps and other content for these devices using relatively limited resources and with relatively limited start-up time or expertise. As an example of the competition that we face, it has been estimated that more than 1.4 million applications, including more than 300,000 active games, were available on Apple’s U.S. App Store as of December 31, 2014. The proliferation of titles in these open developer channels makes it difficult for us to differentiate ourselves from other developers and to compete for players and users who purchase content for their devices without substantially increasing marketing or development costs.
With respect to our legal-related Apps, we compete with a number of well established companies that offer similar Apps, including LexisNexis, WestLaw, CCH, BNA and Bloomberg Law Reports. We may face increased competition from established or newly organized entities and from the governmental offices and agencies that promulgate the laws and regulations that are the subject of our Apps, should they decide to make versions of such laws and regulations available to consumers.
Most of our competitors and our potential competitors have one or more advantages over us, including:
· | significantly greater financial and personnel resources; | |
· | stronger brand and consumer recognition; | |
· | the capacity to leverage their marketing expenditures across a broader portfolio of mobile and non-mobile products; | |
· | more substantial intellectual property of their own; | |
· | lower labor and development costs and better overall economies of scale; and | |
· | broader distribution and presence. |
Intellectual Property
Our intellectual property is an essential element of our business. We currently use a combination of trade secret and other intellectual property laws, confidentiality agreements and license agreements to protect our intellectual property. We may seek to file copyrights with respect to one or more of our titles in the future. Our employees and independent contractors are required to sign agreements acknowledging that all inventions, trade secrets, works of authorship, developments and other processes generated by them on our behalf are our property, and assigning to us any ownership that they may claim in those works. Despite our precautions, it may be possible for third parties to obtain and use without our consent intellectual property that we own or license. Unauthorized use of our intellectual property by third parties, including piracy, and the expenses incurred in protecting our intellectual property rights, may adversely affect our business.
We may, from time to time, encounter disputes over rights and obligations concerning intellectual property. If we do not prevail in these disputes, we may lose some or all of our intellectual property protection, be enjoined from further sales of our Apps or other applications determined to infringe the rights of others, and/or be forced to pay substantial royalties to a third party, any of which would have a material adverse effect on our business, financial condition and results of operations.
31 |
Government Regulation
We are subject to various federal, state and international laws and regulations that affect our business, including those relating to the privacy and security of customer and employee personal information and those relating to the Internet, behavioral tracking, mobile applications, advertising and marketing activities, and sweepstakes and contests. Additional laws in all of these areas are likely to be passed in the future, which could result in significant limitations on or changes to the ways in which we can collect, use, host, store or transmit the personal information and data of our customers or employees, communicate with our customers, and deliver products and services, or may significantly increase our compliance costs. As our business expands to include new uses or collection of data that are subject to privacy or security regulations, our compliance requirements and costs will increase and we may be subject to increased regulatory scrutiny.
Employees
As of the date of this prospectus, we had two employees, comprising our executive officers, each of whom has other business interests and who are not obligated to devote any specific number of hours to our affairs. Our officers’ attention to their other business commitments may detract from their ability to devote time to our business and this may result in conflicts of interest that could harm our business.
We rely on independent game designers, developers, programmers and other IT specialists to develop new titles and update and maintain existing ones and from time to time we may have several contractors rendering services to us.
None of our employees is represented by a collective bargaining agreement. We consider our relations with our employees to be very good.
Properties
We currently maintain a virtual office at 1225 Franklin Avenue, Suite 325, Garden City, New York at a cost of $149 per month. We believe that this space is adequate for our current and foreseeable requirements but that we could establish a permanent presence on acceptable terms, if necessary.
We are not involved in any pending legal proceeding nor is it aware of any pending or threatened litigation against us.
MANAGEMENT
Members of our Board of Directors are elected by the stockholders to a term of one year and serve until their successors are elected and qualified. Our officers are appointed by our Board to a term of one year and serve until their successors are duly appointed and qualified, or until the officer is removed from office. Our Board has no nominating, audit or compensation committees.
Name | Age | Position | ||
Brian Kupchik | 40 | President, Secretary and Director | ||
Seth Ingram | 38 | Treasurer and Director |
32 |
Background Information about our Officers and Directors
Brian Kupchik has been our President, Secretary and a member of our board of directors since the Company’s inception. In January 2015, he co-founded Primo Media Inc. with Mr. Ingram, our Treasurer and a director, a business development concern based in Yorktown Heights, New York, for which he serves as the chief operating officer. Primo is a Latin-focused multi-channel network that connects brands with millions of Hispanic Millennials through integrated digital and mobile advertising opportunities across its network. Since January 2012, Mr. Kupchik has been a partner in 47 Media, an outsourced business development and consulting firm, where he is responsible for acquiring new business, negotiating contracts, establishing project plans and consulting regarding strategy, business development, management and other outsourced digital media services. From October 2011 to May 2012, he was a portfolio manager at Black Ocean, digital platform that has created a new generation business model that combines entrepreneurship, incubation, venture capital and investment banking practices. From October 2009 to August 2011, Mr. Kupchik was vice president of business development at MediaBrix/Smartclip, a social media focus company offering a foundation of social products including, Pulse for Facebook, Guaranteed Video View, Social Apps / Games, and Mobile, where he participated in sales, strategy, product development with a heavy focus on mobile. Mr. Kupchik is a member of OMMA, a digital media marketing organization, and the Interactive Advertising Bureau. Mr. Kupchik is involved with several children’s charitable organizations. Mr. Kupchik has been selected as a director of our Company because of his experience and background in business development in Internet based businesses.
Seth Ingram has been our Treasurer and a member of our board of directors since the Company’s inception. In January 2015, he co-founded Primo Media Inc. with Mr. Kupchik, a business development concern based in Yorktown Heights, New York, for which he serves as the head of sales and chief risk officer. Primo is a Latin-focused multi-channel network that connects brands with millions of Hispanic Millennials through integrated digital and mobile advertising opportunities across its network. From July 2012 through December 2013, he was vice president- sales, Technorati Media, an integrated online media company with an ad network, three owned web properties, and an ad technology platform with an audience of over 130 million unique visitors a month on over 500 professionally run sites with over a billion monthly page views. At Technorati, Mr. Ingram was in charge of managing salespeople, achieving revenue goals, business development strategy and overall company direction. From November 2011 to June 2012, he was a national sales director of integrated media sales at COMPLEX.com, COMPLEX Magazine, COMPLEX Media Network, COMPLEX Mobile, COMPLEX Consumer Events, COMPLEX Custom Content Development, +ME, where he oversaw 17 sales professionals, served as a liason between ad operations, sales and product development. From November 2009 to September 2011, Mr. Ingram was a vice president-sales at MediaBrix/Smartclip, a social media focus company offering a solid foundation of social products including, Pulse for Facebook, Guaranteed Video View, Social Apps / Games, and Mobile, where he participated in sales, strategy, product development with a heavy focus on mobile. Mr. Ingram is a member of OMMA, a digital media marketing organization, and the Interactive Advertising Bureau. Mr. Ingram is involved with several children’s charitable organizations. Mr. Ingram has been selected as a director of our Company because of his experience and background in business development in Internet based businesses.
Mr. Kupchik and Mr. Ingram are first cousins.
Involvement in Certain Legal Proceedings
No director, executive officer, significant employee or control person of the Company has been involved in any legal proceeding listed in Item 401(f) of Regulation S-K in the past 10 years.
33 |
Corporate Governance
Our Board has not established any committees, including an audit committee, a compensation committee or a nominating committee, or any committee performing a similar function. The functions of those committees are being undertaken by our Board. Because we do not have any independent directors, our Board believes that the establishment of committees of our Board would not provide any benefits to our Company and could be considered more form than substance.
We do not have a policy regarding the consideration of any director candidates that may be recommended by our stockholders, including the minimum qualifications for director candidates, nor have our officers and directors established a process for identifying and evaluating director nominees. We have not adopted a policy regarding the handling of any potential recommendation of director candidates by our stockholders, including the procedures to be followed. Our officers and directors have not considered or adopted any of these policies as we have never received a recommendation from any stockholder for any candidate to serve on our Board of Directors.
Given our relative size and lack of directors’ and officers’ insurance coverage, we do not anticipate that any of our stockholders will make such a recommendation in the near future. While there have been no nominations of additional directors proposed, in the event such a proposal is made, all current members of our Board will participate in the consideration of director nominees.
As with most small, early stage companies until such time as our Company further develops our business, achieves a revenue base and has sufficient working capital to purchase directors’ and officers’ insurance, we do not have any immediate prospects to attract independent directors. When we are able to expand our Board to include one or more independent directors, we intend to establish an audit committee of our Board of Directors. It is our intention that one or more of these independent directors will also qualify as an audit committee financial expert. Our securities are not quoted on an exchange that has requirements that a majority of our Board members be independent and we are not currently otherwise subject to any law, rule or regulation requiring that all or any portion of our Board of Directors include “independent” directors, nor are we required to establish or maintain an audit committee or other committee of our Board.
Code of Ethics
Upon the closing of this Offering, we will adopt a code of business conduct and ethics that applies to all of our employees, officers and directors, including those officers responsible for financial reporting. Following the closing of this Offering, the code of business conduct and ethics will be available on our website at www.appsofttechnologies.com. We intend to post any amendments to the code, or any waivers of its requirements, on our website.
EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE
Compensation
The Company has not paid any compensation to any person since its inception. We do not expect to pay compensation to our officers until such time as we commence generating revenues sufficient to sustain our operations. Thereafter, we may enter into employment agreements with our officers and pay them an annual salary.
There are no compensatory plans or arrangements, including payments to be received from the Company with respect to any executive officer, that would result in payments to such person because of his or her resignation, retirement or other termination of employment with the Company, or our subsidiaries, any change in control, or a change in the person’s responsibilities following a change in control of the Company.
34 |
Employment Agreements
There are no current employment agreements between the Company and our executive officers or understandings regarding future compensation.
Outstanding Equity Awards at Fiscal Year-End
No executive officer has received any equity awards, nor have they been granted any options since our inception.
Long-Term Incentive Plans
There are no arrangements or plans in which the Company would provide pension, retirement or similar benefits for directors or executive officers.
Compensation Committee
We currently do not have a compensation committee of our Board of Directors. The Board as a whole determines executive compensation.
Compensation Committee Interlocks and Insider Participation
Our Board does not have, and has not had, a compensation committee. Our executive officers do not serve as a member of the board of directors or compensation committee of any entity which has one or more executive officers serving as a member of our Board.
Compensation of Directors
Our current directors do not receive separate compensation for their service on our Board of Directors. Our Board has the authority to fix the compensation of directors. We do not intend to pay employee directors a separate fee for their services.
No compensation has been paid to our directors for their services as directors since our inception.
Director Independence
Our Board of Directors is currently composed of two members, neither of whom qualifies as an independent director in accordance with the published listing requirements of the NASDAQ Global Market. The NASDAQ independence definition includes a series of objective tests, such as that the director is not, and has not been for at least three years, one of our employees and that neither the director, nor any of his family members has engaged in various types of business dealings with us. In addition, our Board has not made a subjective determination as to each director that no relationships exist which, in the opinion of our Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, though such subjective determination is required by the NASDAQ rules. Had our Board of Directors made these determinations, our Board would have reviewed and discussed information provided by the directors and us with regard to each director’s business and personal activities and relationships as they may relate to us and our management.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial ownership of our common stock as of September 4, 2015, by (i) each person known by us to be the beneficial owner of more than 5% of our outstanding common stock, (ii) each director and each of our executive officers and (iii) all executive officers and directors as a group. As of September 4, 2015, there were 4,110,000 shares of our common stock outstanding.
35 |
The number of shares of common stock beneficially owned by each person is determined under the rules of the Commission and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which such person has sole or shared voting power or investment power and also any shares which the individual has the right to acquire within 60 days after the date hereof, through the exercise of any stock option, warrant or other right. Unless otherwise indicated, each person has sole investment and voting power (or shares such power with his or her spouse) with respect to the shares set forth in the following table. The inclusion herein of any shares deemed beneficially owned does not constitute an admission of beneficial ownership of those shares.
Shares Beneficially Owned
Prior to this Offering |
Shares Beneficially
Owned After this Offering |
|||||||||||||||
Name | Number | Percent | Number | Percent | ||||||||||||
Brian Kupchik | 2,000,000 | 48.66 | % | 2,000,000 | 39.14 | % | ||||||||||
Seth Ingram | 2,000,000 | 48.66 | % | 2,000,000 | 39.14 | |||||||||||
All directors and executive officers as a group (2 persons) | 4,000,000 | 97.32 | % | 4,000,000 | 88.28 | % |
SHARES ELIGIBLE FOR FUTURE SALE
Prior to this Offering, there has been no public market for our common stock, and we cannot predict what effect, if any, market sales of shares of common stock or the availability of shares of common stock for sale will have on the market price of our common stock. Future sales of substantial amounts of our common stock in the public market, or the perception that substantial sales may occur, could materially and adversely affect the prevailing market price of our common stock and could impair our future ability to raise capital through the sale of our equity at a time and price we deem appropriate.
Upon completion of this Offering, assuming that all of the shares are sold, we will have 5,110,000 shares of common stock outstanding. Of these shares of common stock, the 1,000,000 Shares being sold in this Offering will be freely tradable without restriction under the Securities Act, except for any such shares which may be held or acquired by an “affiliate” of ours, as that term is defined in Rule 144 promulgated under the Securities Act, which shares will be subject to the volume limitations and other restrictions of Rule 144 described below. Of the remaining 4,110,000 outstanding shares of common stock are “restricted securities,” as that phrase is defined in Rule 144, and may be resold only after registration under the Securities Act or pursuant to an exemption from such registration, including, among others, the exemptions provided by Rule 144 of the Securities Act, which is summarized below
Rule 144
The availability of Rule 144 will vary depending on whether shares of our common stock are restricted and whether they are held by an affiliate or a non-affiliate. For purposes of Rule 144, a non-affiliate is any person or entity that is not our affiliate at the time of sale and has not been our affiliate during the preceding three months.
In general, under Rule 144, once we have been a reporting company subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act for at least 90 days, an affiliate who has beneficially owned shares of our restricted common stock for at least six months would be entitled to sell within any three-month period any number of such shares that does not exceed the greater of:
· | 1% of the number of shares of our common stock then outstanding, which will equal approximately 51,100 shares immediately after consummation of this offering; or |
36 |
· | the average weekly trading volume of our common stock on the open market during the four calendar weeks preceding the filing of a notice on Form 144 with respect to that sale. |
In addition, any sales by our affiliates under Rule 144 are subject to manner of sale provisions and notice requirements and to the availability of current public information about us. Our affiliates must comply with all the provisions of Rule 144 (other than the six-month holding period requirement) in order to sell shares of our common stock that are not restricted securities, such as shares acquired by our affiliates either in this offering or through purchases in the open market following this offering. An “affiliate” is a person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, an issuer.
Similarly, once we have been a reporting company for at least 90 days, a non-affiliate who has beneficially owned shares of our restricted common stock for at least six months would be entitled to sell those shares without complying with the volume limitation, manner of sale and notice provisions of Rule 144, provided that certain public information is available. Furthermore, a non-affiliate who has beneficially owned our shares of restricted common stock for at least one year will not be subject to any restrictions under Rule 144 with respect to such shares, regardless of how long we have been a reporting company.
We are unable to estimate the number of shares that will be sold under Rule 144 since this will depend on numerous factors out of our control, including, for example, the market price for our common stock and the personal circumstances of the stockholder.
We are registering 1,000,000 shares of our common stock which will be sold by our officers and directors.
There is No Current Market for Our Shares of Common Stock
There is currently no market for our securities. 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. We will seek to have a market maker file an application with the Financial Industry Regulatory Authority, or FINRA, for our common stock to be eligible for trading on the OTC Markets before this registration statement is declared effective by the SEC. As of the date of this registration statement, we do not have a market maker who has agreed to file such application. There can be no assurance that a market maker will agree to file the necessary documents with FINRA, which operates the OTC Markets, nor can there be any assurance that such an application for quotation will be approved.
The OTC Markets is maintained by OTC Market Group, Inc. The securities traded on the OTC Markets are not listed or traded on the floor of an organized national or regional stock exchange. Instead, these securities transactions are conducted by telephone and through a 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.
37 |
Even if our Shares are quoted on the OTC Markets, 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 Exchange Act impose sales practice and disclosure requirements on FINRA brokers-dealers who make a market in a “penny stock.” A penny stock generally includes any non-NASDAQ equity security 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 transactions 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 Commission 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 brokers-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 Sold by Our Officers and Directors
We are offering up to a total of 1,000,000 Shares of common stock. The offering price is $0.50 per share. The Offering will be for 60 days unless closed sooner by a sale of all of the Shares offered. In our sole discretion, we have the right to terminate the Offering at any time, even before we have sold the 1,000,000 Shares. There are no specific events which might trigger our decision to terminate the Offering.
The Shares are being offered by us on a direct primary, self-underwritten basis (that is, without the use of a broker-dealer) and there can be no assurance that all or any of the Shares offered will be subscribed. If less than the maximum proceeds are available to us, our development and prospects could be adversely affected. There is no minimum offering required for this Offering to close. All funds received as a result of this Offering will be immediately available to us for our general business purposes.
We cannot assure you that all or any of the Shares offered under this prospectus will be sold. No one has committed to purchase any of the Shares offered. Therefore, we may sell only a nominal number of Shares, in which case our ability to execute our business plan might be negatively impacted. We reserve the right to withdraw or cancel this Offering and to accept or reject any subscription in whole or in part, for any reason or for no reason. Subscriptions will be accepted or rejected promptly. All monies from rejected subscriptions will be returned immediately by us to the subscriber, without interest or deductions. 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.
We will sell the Shares in this Offering through our officers and directors, who intend to offer them to friends, family members and business acquaintances using this prospectus and a subscription agreement as the only materials to offer potential investors. The officers and directors that offer Shares on our behalf may be deemed to be underwriters of this Offering within the meaning of Section 2(11) of the Securities Act. We reserve the right to use licensed broker/dealers and pay the brokers a cash commission of up to 10% of the proceeds raised by that broker. The officers and directors engaged in the sale of the securities will receive no commission from the sale of the Shares nor will they register as broker-dealers pursuant to Section 15 of the Exchange Act 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. Our officers and directors satisfy the requirements of Rule 3(a) 4-1 in that:
38 |
· |
They are not subject to a statutory disqualification, as that term is defined in Section 3(a)(39) of the Securities Act, at the time of his or her participation; |
· | They are not compensated in connection with their participation by the payment of commissions or other remuneration based either directly or indirectly on transactions in securities; |
· | They are not, at the time of their participation, an associated person of a broker- dealer; and |
· | They meet the conditions of Paragraph (a)(4)(ii) of Rule 3(a)4-1 of the Exchange Act, in that they (A) primarily perform, or are 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) are not brokers or dealers, or an associated person of a broker or dealer, within the preceding 12 months; and (C) do not participate in selling and offering of securities for any issuer more than once every 12 months other than in reliance on Paragraphs (a)(4)(i) or (a)(4)(iii). |
As long as we satisfy all of these conditions, we believe that we satisfy the requirements of Rule 3(a)4-1 of the Exchange Act.
In view of the fact that our officers and directors will sell the Shares being offered pursuant to this Offering, Regulation M prohibits us and our officers and directors from certain types of trading activities during the time of distribution of our securities. Specifically, Regulation M prohibits our officers and directors 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.
Terms of the Offering
The Shares being offered by the Company will be sold at the fixed price of $0.50 per share until the completion of this Offering. There is no minimum amount of subscription required per investor, and subscriptions, once received and accepted, are irrevocable. This Offering will commence promptly on the date upon which the registration statement is declared effective and will close on [_______], 2015, 60 days after the effectiveness of the registration statement of which this prospectus is a part, unless all the securities are sold before that date, we extend the offering another 30 days or we otherwise decide to close the offering early or cancel it, in each case in our sole discretion. If we extend the offering, we will provide that information in a post-effective amendment to this prospectus. If we close the offering early or cancel it, including during any extended offering period, we may do so without notice to investors, although if we cancel the offering we will promptly return any funds investors may already have paid.
Deposit of Offering Proceeds
This is a direct primary, self-underwritten basis Offering, so we are not required to sell any specific number or dollar amount of securities, but will use our best efforts to sell the securities offered. We have made no arrangements to place subscription funds in an escrow, trust or similar account, which means that all funds collected for subscriptions will be immediately available to us for use in the implementation of our business plan.
Procedures and Requirements for Subscription
If you decide to subscribe for any Shares being sold by us in this Offering, you will be required to execute a Subscription Agreement and tender it, together with a check, bank draft or cashier’s check payable to AppSoft Technologies, Inc. Subscriptions, once received and accepted by us, are irrevocable. Our transfer agent, VStock Transfer, LLC, will issue common stock subscribed for in this Offering promptly after we accept subscriptions from investors. Securities purchased by investors in this Offering will remain outstanding upon its termination regardless of the number of Shares subscribed for.
39 |
ERISA Considerations
Special considerations apply when contemplating the purchase of shares of our common stock on behalf of employee benefit plans that are subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), plans, individual retirement accounts (“IRAs”) and other arrangements that are subject to Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”), or provisions under any federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of the Code or ERISA, and entities who underlying assets are considered to include “plan assets” of any such plan, account or arrangement (each, a “Plan”). A person considering the purchase of our shares on behalf of a Plan is urged to consult with tax and ERISA counsel regarding the effect of such purchase and, further, to determine that such a purchase will not result in a prohibited transaction under ERISA, the Code or a violation of some other provision of ERISA, the Code or other applicable law. We will rely on such determination made by such persons, although no shares of our common stock will be sold to any Plans if management believes that such sale will result in a prohibited transaction under ERISA or the Code.
General
Pursuant to our Articles of Incorporation filed with the Nevada Secretary of State on March 24, 2015, our authorized capital stock consists of 1,010,000,000 Shares of capital stock, $0.0001 par value per share, of which 1,000,000,000 shares are common stock and 10,000,000 shares are preferred stock. As of the date of this prospectus, we had 4,110,000 shares of common stock issued and outstanding and 2,000,000 shares of preferred stock, designated, issued and outstanding.
Common Stock
Holders of the Company’s common stock are entitled to one vote for each share on all matters submitted to a stockholder vote. Holders of common stock do not have cumulative voting rights. Therefore, holders of a majority of the shares of common stock voting for the election of directors can elect all of the directors. Holders of the Company’s common stock representing a majority of the voting power of the Company’s capital stock issued, outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of stockholders. A vote by the holders of a majority of the Company’s outstanding shares is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to the Company’s articles of incorporation.
Subject to the rights of holders of the preferred stock, holders of the Company’s common stock are entitled to share in all dividends that our Board of Directors, in its discretion, declares from legally available funds. In the event of a liquidation, dissolution or winding up of our Company, each outstanding share entitles its holder to participate pro rata in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over the common stock. The Company’s common stock has no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to the Company’s common stock.
40 |
Preferred Stock
Of the 10,000,000 shares of authorized preferred stock, 2,000,000 shares have been designated Series A Cumulative Convertible Preferred Stock, the rights, designations, preferences and limitations of which are described below.. The remaining shares of preferred stock are blank check preferred stock that can be designated and issued by the board of directors at any time without stockholder approval.
Series A Cumulative Convertible Preferred Stock
Liquidation Preference and Ranking
Upon a liquidation event, the Company shall first pay to the holders of the Series A Preferred Stock an amount per share equal to the Original Issue Price (i.e., $ $0.05 per share of Series A Preferred Stock), plus all accrued and unpaid dividends on each share of Series A Preferred Stock (the “Series A Preference Amount”). After full payment of the liquidation preference amount to the holders of the Series A Preferred Stock, the Company will then distribute the remaining assets to holders of common stock, other junior preferred shares (if any) and the Series A Preferred Stock on an as-if-converted-basis.
The Series A Preferred Stock ranks senior to the Company’s common stock and senior to any other shares of preferred stock the Company may issue in the future.
Dividends
The Series A Preferred Stock carries an annual 8% per share cumulative dividend, payable when and if declared by the Board of Directors and prior and in preference to payment of any dividends on the common stock. Dividends are payable in shares of common stock equal to the amount of interest payable divided by the conversion price of the Series A Preferred Stock then in effect. We may not declare, pay or set aside any dividends on shares of any other class or series of our capital stock (other than dividends on shares of Common Stock payable in shares of Common Stock) unless the holders of the Series A Preferred Stock then outstanding shall first receive, or simultaneously receive, a dividend on each outstanding share of Series A Preferred Stock in accordance with the provisions of the designation of the Series A Preferred Stock.
Optional Conversion
The holders of Series A Preferred Shares will, at any time, be entitled to convert each share of Series A Preferred Stock into shares of common stock at a conversion price of $0.005 per share. The holders of Series A Preferred Stock shall not have the right to convert any portion of the Series A Preferred Stock to the extent that after giving effect to such conversion, the holder (together with the holder’s affiliates) would beneficially own in excess of 4.99%, except that the holder may, by written notice to the Company, increase or decrease this percentage up to a maximum of 9.99%. The Series A Preferred Stock is subject to provisions that protect the holders against dilution by adjustment of the conversion price and/or number of shares of common stock issuable upon conversion in certain events such as stock dividends, stock splits, mergers, recapitalizations and other similar events.
Voting Rights
The Series A Preferred Stock votes together with the Common Stock on an as-converted basis, and not as a separate class, except with respect to the protective provisions described below.”
41 |
Protective Provisions
For so long as at least 50% of the shares of Series A Preferred Stock originally issued remain outstanding, in addition to any other vote or approval required under the Company’s Articles of Incorporation or Bylaws, the Company will not, without the written consent of the holders of at least a majority of the shares of Series A Preferred Stock, (i) liquidate, dissolve or wind-up the affairs of the Company or effect any merger or consolidation or any deemed liquidation event unless, as a result, the holders of shares of Series A Preferred Stock receive their full liquidation preference, (ii) amend, alter or repeal any provision of the Articles of Incorporation or Bylaws of the Company in a manner that adversely affects the powers, preferences or rights of the shares of Series A Preferred Stock , (iii) create, or authorize the creation of, or issue or obligate itself to issue shares of, any additional class or series of capital stock other than shares of common stock, (iv) enter into, create, incur, assume any indebtedness in excess of $200,000, (v) enter into, create, incur, assume or suffer to exist any liens of any kind, on or with respect to any of its property or assets now owned or hereafter acquired, (vi) enter into any transaction that would result in the issuance of in excess of 10% of the Company’s then issued and outstanding shares of common stock, (vii) enter into any transaction resulting in the sale of any material assets of the Company, or (viii) enter into any agreement with respect to any of the foregoing.
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, the general economic conditions, and other pertinent conditions. It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
None.
The validity of the securities offered hereby will be passed upon for us by Ruffa & Ruffa, P.C., New York, New York. William P. Ruffa, a principal of Ruffa & Ruffa, P.C., is the beneficial owner of 100,000 shares of the common stock of the Company.
The financial statements of AppSoft Technologies, Inc. as of May 31, 2015 included in this prospectus, have been included herein in reliance on the report by George Stewart, CPA, our independent registered public accounting firm, given on the authority that the firm are experts in accounting and auditing.
DISCLOSURE OF COMMISSION’S POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Our directors and officers are indemnified as provided by the Nevada Statutes and our bylaws. We have agreed to indemnify each of our directors and certain officers against certain liabilities, including liabilities under the Securities Act. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the provisions described above, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than our payment of expenses incurred or paid by our director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
42 |
WHERE YOU CAN FIND MORE INFORMATION
After the effective date of the registration statement of which this prospectus forms a part, we will be subject to informational filing requirements of the Exchange Act and its rules and regulations. This means that we will file reports and other information with the SEC. You can inspect and copy this information at the Public Reference Facility maintained by the SEC at Judiciary Plaza, 100 F Street, N.E. Washington D.C. 20549. You can receive additional information about the operation of the SEC’s Public Reference Facilities by calling the SEC at 1-800-SEC-0330. The SEC maintains a website that will contain the reports and other information that we file electronically with the Commission and the address of that website is www.sec.gov. Statements contained in this prospectus as to the intent of any contract or other document referred to are not necessarily complete, and, in each instance, reference is made to the copy of the particular contract or other document filed as an exhibit to this registration statement, each statement being qualified in all respects by this reference.
This prospectus is part of a registration statement we filed with the SEC. You should rely only on the information or representations provided in this prospectus. We have not authorized anyone to provide you with any information other than that provided in this prospectus. We have not authorized anyone to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information in this prospectus is accurate as of any date other than the date on the front of the document.
43 |
INDEX TO FINANCIAL STATEMENTS
Table of Contents
44 |
GEORGE STEWART, CPA
316 17 TH AVENUE SOUTH
SEATTLE, WASHINGTON 98144
(206) 328-8554 FAX(206) 328-0383
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Appsoft Technologies Inc.
I have audited the accompanying balance sheets of Appsoft Technologies Inc. (A Development Stage Company) as of May 31, 2015, and the related statements of operations, stockholders’ equity and cash flows for the years ended May 31, 2015. These financial statements are the responsibility of the Company’s management. My responsibility is to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Appsoft Technologies Inc., (A Development Stage Company) as of May 31, 2015, and the results of its operations and cash flows for the years ended May 31, 2015 in conformity with generally accepted accounting principles in the United States of America.
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note # B to the financial statements, the Company has had minimal operations to date and has not fully established sources of revenue. This raises substantial doubt about its ability to continue as a going concern. Management’s plan in regard to these matters is also described in Note # B. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/S/ George Stewart
Seattle, Washington
July 30, 2015
F- 1
Balance Sheet as of May 31, 2015
As of | ||||
May 31, 2015 | ||||
CURRENT ASSETS | ||||
Cash | $ | 35,119 | ||
Accounts Receivable | $ | 279 | ||
TOTAL CURRENT ASSETS | 35,398 | |||
OTHER ASSETS | ||||
Phone Apps | 50,000 | |||
Accumulated Amortization for Phone Apps | (1,667 | ) | ||
TOTAL OTHER ASSETS | 48,333 | |||
TOTAL ASSETS | $ | 83,731 | ||
LIABILITIES | ||||
TOTAL LIABILITIES | - | |||
STOCKHOLDER'S EQUITY | ||||
Series A Cumulative, Convertible Preferred stock ($0.0001 par value; 10,000,000 shares authorized; 2,000,000 shares issued and outstanding at May 31, 2015) | 200 | |||
Common stock ($0.0001 par value; 1,000,000,000 shares authorized; 4,000,000 shares issued and outstanding at May 31, 2015 | 400 | |||
Stock Subscription Receivable | (400 | ) | ||
Additional Paid in Capital | 100,208 | |||
Accumulated Deficit | (16,677 | ) | ||
TOTAL STOCKHOLDER'S EQUITY (DEFICIT) | 83,731 | |||
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY/(DEFICIT) | $ | 83,731 |
The accompanying notes are an integral part of these financial statements.
F- 2
Statement of Operations and Income (Loss) for the Period Ended May 31, 2015
For the period ended | ||||
May 31, | ||||
2015 | ||||
Sales | $ | 518 | ||
Total Revenue | $ | 518 | ||
EXPENSES: | ||||
Selling, General and Administrative | 6,528 | |||
Amortization Expense | 1,667 | |||
Professional Fees | 9,000 | |||
Total Expense | 17,195 | |||
Loss from operations | (16,677 | ) | ||
NET LOSS | (16,677 | ) | ||
Basic and fully diluted net loss per common share: | 4,000,000 | |||
Weighted average common shares outstanding | (0.004 | ) |
The accompanying notes are an integral part of these financial statements.
F- 3
Statement of Changes in Stockholder’s Deficit for the Period Ended May 31, 2015
Additional | ||||||||||||||||||||||||||||||||
Common Stock | Preferred Stock | Stock Subscription | Paid-in | Accumulated | Total | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Receivable | Capital | Deficit | Equity | |||||||||||||||||||||||||
Balances, March 24, 2015 | - | $ | - | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||
Net loss | - | - | - | - | - | - | (16,677 | ) | (16,677 | ) | ||||||||||||||||||||||
Capital Contribution | - | - | - | - | - | 408 | - | 408 | ||||||||||||||||||||||||
Issuance of Preferred Shares | - | - | 2,000,000 | 200 | - | 99,800 | - | 100,000 | ||||||||||||||||||||||||
Issuance of Common Shares | 4,000,000 | 400 | (400 | ) | - | |||||||||||||||||||||||||||
Balances, May 31, 2015 | 4,000,000 | $ | 400 | 2,000,000 | $ | 200 | $ | (400 | ) | $ | 100,208 | $ | (16,677 | ) | $ | 83,731 |
The accompanying notes are an integral part of these financial statements.
F- 4
Statements of Cash Flow for the Period Ended May 31, 2015
The accompanying notes are an integral part of these financial statements.
F- 5
APPSOFT TECHNOLOGIES
AS OF MAY 31, 2015
NOTE A—BUSINESS ACTIVITY
AppSoft Technologies (the "Company”) was organized under the laws of the State of Nevada March 24, 2015. The Company develops, publishes and markets mobile software applications for smartphones and tablet devices (“Apps”). We currently own a portfolio comprising over 400 Apps titles including games designed to appeal to a broad cross section of consumers and legal-related Apps that provide compilations of federal and state laws and regulations across a variety of legal disciplines and digests of court decisions rendered by federal courts. Consumers download our Apps through direct-to-consumer digital storefronts, such as the Apple App Store and Google Play Store.
We currently generate revenue from sales, or downloads, of our Apps and from advertisements published on our ad supported game titles.
NOTE B—GOING CONCERN
The accompanying financial statements have been prepared on a going concern basis, which assumes the Company will realize its assets and discharge its liabilities in the normal course of business. As reflected in the accompanying financial statements, the Company has a deficit accumulated of $16,720 and cash used in operations of $15,289 at May 31, 2015.
The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might arise as a result of this uncertainty.
NOTE C—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation- The financial statements included herein were prepared under the accrual basis of accounting.
Cash and Cash Equivalents- For purposes of the Statement of Cash Flows, the Company considers liquid investments with an original maturity of three months or less to be cash equivalents.
Management’s Use of Estimates- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The financial statements above reflect all of the costs of doing business.
Revenue Recognition- The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned less estimated future doubtful accounts. The Company considers revenue realized or realizable and earned when all of the following criteria are met:
(i) | persuasive evidence of an arrangement exists, | |
(ii) | the services have been rendered and all required milestones achieved, | |
(iii) | the sales price is fixed or determinable, and | |
(iv) | collectability is reasonably assured. |
Comprehensive Income (Loss) - The Company reports Comprehensive income and its components following guidance set forth by section 220-10 of the FASB Accounting Standards Codification which establishes standards for the reporting and display of comprehensive income and its components in the financial statements. There were no items of comprehensive income (loss) applicable to the Company during the period covered in the financial statements.
Net Income per Common Share- Net loss per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period. There were no potentially dilutive shares outstanding as of May 31, 2015.
F- 6
APPSOFT TECHNOLOGIES
NOTES TO FINANCIAL STATEMENTS
AS OF MAY 31, 2015
NOTE C—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONT’D
Deferred Taxes- The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.
Fair Value of Financial Instruments- The carrying amounts reported in the balance sheet for cash, accounts receivable and payable approximate fair value based on the short-term maturity of these instruments.
Accounts Receivable- Accounts deemed uncollectible are written off in the year they become uncollectible. As of May 31, 2015, the balance in Accounts Receivable was $236.
Impairment of Long-Lived Assets- The Company evaluates the recoverability of its fixed assets and other assets in accordance with section 360-10-15 of the FASB Accounting Standards Codification for disclosures about Impairment or Disposal of Long-Lived Assets. Disclosure requires recognition of impairment of long-lived assets in the event the net book value of such assets exceeds its expected cash flows. If so, it is considered to be impaired and is written down to fair value, which is determined based on either discounted future cash flows or appraised values. The Company adopted the statement on inception. No impairments of these types of assets were recognized during the period ended May 31, 2015.
Stock-Based Compensation- The Company accounts for stock-based compensation using the fair value method following the guidance set forth in section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service.
Fair Value for Financial Assets and Financial Liabilities- The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
Level 1 | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. |
Level 2 | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. |
Level 3 | Pricing inputs that are generally observable inputs and not corroborated by market data. |
The carrying amounts of the Company’s financial assets and liabilities, such as cash and accrued expenses, approximate their fair values because of the short maturity of these instruments. The Company’s note payable approximates the fair value of such instrument based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangement at May 31, 2015.
F- 7
APPSOFT TECHNOLOGIES
NOTES TO FINANCIAL STATEMENTS
AS OF MAY 31, 2015
NOTE C—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONT’D
The Company does not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis, consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at April 30, 2015, nor gains or losses are reported in the statement of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the period ended May 31, 2015.
Recently Issued Accounting Pronouncements
In February 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income , to improve the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in the ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. The new amendments will require an organization to:
- | Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income - but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period; and |
- | Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense. |
The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). The amendments are effective for reporting periods beginning after December 15, 2012, for public companies. Early adoption is permitted. The adoption of ASU No. 2013-02 is not expected to have a material impact on our financial position or results of operations.
In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities , which clarifies which instruments and transactions are subject to the offsetting disclosure requirements originally established by ASU 2011-11. The new ASU addresses preparer concerns that the scope of the disclosure requirements under ASU 2011-11 was overly broad and imposed unintended costs that were not commensurate with estimated benefits to financial statement users. In choosing to narrow the scope of the offsetting disclosures, the Board determined that it could make them more operable and cost effective for preparers while still giving financial statement users sufficient information to analyze the most significant presentation differences between financial statements prepared in accordance with U.S. GAAP and those prepared under IFRSs. Like ASU 2011-11, the amendments in this update will be effective for fiscal periods beginning on, or after January 1, 2013. The adoption of ASU 2013-01 is not expected to have a material impact on our financial position or results of operations.
In October 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations.
In August 2012, the FASB issued ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial position or results of operations.
F- 8
APPSOFT TECHNOLOGIES
NOTES TO FINANCIAL STATEMENTS
AS OF MAY 31, 2015
NOTE C—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONT’D
Recently Issued Accounting Pronouncements – Cont’d
In July 2012, the FASB issued ASU 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” in Accounting Standards Update No. 2012-02. This update amends ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles - Goodwill and Other - General Intangibles Other than Goodwill . The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU 2012-02 has not had a material impact on our financial position or results of operations.
In December 2011, the FASB issued ASU 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items out of Accumulated Other Comprehensive Income” in Accounting Standards Update No. 2011-05. This update defers the requirement to present items that are reclassified from accumulated other comprehensive income to net income in both the statement of income where net income is presented and the statement where other comprehensive income is presented. The adoption of ASU 2011-12 has not had a material impact on our financial position or results of operations.
In December 2011, the FASB issued ASU No. 2011-11 “Balance Sheet: Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). This Update requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS. The amended guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Company is currently evaluating the impact, if any, that the adoption of this pronouncement may have on its results of operations or financial position.
NOTE D-SEGMENT REPORTING
The Company follows the guidance set forth by section 280-10 of the FASB Accounting Standards Codification for reporting and disclosure on operating segments of the Company. It also requires segment disclosures about products and services, geographic areas, and major customers. The Company determined that it did not have any separately reportable operating segments as of May 31, 2015.
NOTE E-CAPITAL STOCK
The Company is authorized to issue 1,000,000,000 Common Shares at $.0001 par value per share.
In March 2015, the Company issued the following shares:
2,000,000 shares were issued to Seth Ingram, Chief Operating Officer and Treasurer, for $200.
2,000,000 shares were issued to Brian Kuchik, President, CEO and Secretary, for $200.
Total issued and outstanding shares as of May 31, 2015 were 4,000,000.
The Company is authorized to issue 10,000,000 Series A Cumulative, Convertible Preferred Shares at $.0001 par value per share. During the period from inception (March 24, 2015) through May 31, 2015, the Company issued 2,000,000 shares of preferred stock at $.05 per share to Ventureo, LLC in exchange for $50,000 in cash and Phone Apps with a fair market value of $50,000 for a total of $100,000.
Ventureo. LLC also paid $408 in expense incurred on behalf of AppSoft, Inc. and this amount is considered an additional capital contribution.
F- 9
APPSOFT TECHNOLOGIES
NOTES TO FINANCIAL STATEMENTS
AS OF MAY 31, 2015
NOTE F-RELATED PARTY NOTE PAYABLE AND NOTE PAYABLE
The Company does not have any related party or non-related party Note Payables as of May 31, 2015.
NOTE G – OTHER ASSET/PHONE APPS
As a part of the Preferred Stock transaction (refer to Note E above), the Company acquired Phone Apps valued at $50,000. These Phone Apps are generating Sales Revenue. The Company will amortize the Phone Apps over 5 years. Per SOP 98-1 the amortization period for the Phone Apps should be relatively short. Management has determined that 5 years is a relatively short period. Monthly amortization is $833.34. Accumulated Amortization as of May 31, 2015 is $1,667.
NOTE H – INCOME TAX
The Company provides for income taxes under (now included under Accounting Standards Codification (ASC), 740), Accounting for Income Taxes. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse.
ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. For Federal and New York income tax purposes, the Company has net operating loss carry forwards that expire through 2030. The net operating loss as of May 31, 2015, is approximately $16,720. No tax benefit has been reported in the financial statements because after evaluating our own potential tax uncertainties, the Company has determined that there are no material uncertain tax positions that have a greater than 50% likelihood of reversal if the Company were to be audited. The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 34% to the net loss before provision for income taxes for the following reasons:
May 31, 2015 | ||||
Deferred tax asset: | ||||
NOL Carry forward | $ | 16,720 | ||
Valuation allowances | (16,720 | ) | ||
Deferred Tax Asset | $ | 0 |
F- 10
APPSOFT TECHNOLOGIES, INC.
1,000,000 Shares of
Common Stock
PROSPECTUS
____________, 2015
Until ____________, 2015, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
45 |
PART II - INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Expenses incurred or expected relating to this prospectus and distribution are as follows:
Amount to be
Paid |
||||
Securities and Exchange Commission registration fee | $ | 58.10 | ||
Transfer agent fees | * | |||
Accounting fees and expenses | 3,200.00 | |||
Legal fees and expenses | 9,000.00 | |||
Printing Expenses | * | |||
Miscellaneous | * | |||
Total | $ | 12,258.10 |
* Estimated expenses are not presently known. The foregoing sets forth the general categories of expenses that the registrant anticipates it will incur in connection with the offering of securities under this Registration Statement. An estimate of the aggregate expenses in connection with the issuance and distribution of the securities being offered will be included in an amendment to this registration Statement as such costs become known.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our articles of incorporation provide for the indemnification of our directors, officers, employees and agents to the fullest extent permitted by the laws of the State of Nevada. Section 78.7502 of the Nevada Revised Statutes permits a corporation to indemnify any of its directors, officers, employees or agents against expenses actually and reasonably incurred by such person in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (except for an action by or in right of the corporation), by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, provided that it is determined that such person acted in good faith and in a manner which he reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
Section 78.751 of the Nevada Revised Statutes requires that the determination that indemnification is proper in a specific case must be made by (a) the stockholders, (b) the board of directors by majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding or (c) independent legal counsel in a written opinion (i) if a majority vote of a quorum consisting of disinterested directors is not possible or (ii) if such an opinion is requested by a quorum consisting of disinterested directors.
Article VII of our By-laws provides that:
· | no director shall be liable to the Company or any of its stockholders for monetary damages for breach of fiduciary duty as a director except with respect to (i) a breach of the director’s loyalty to the Company or its stockholders, (ii) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) liability which may be specifically defined by law or (iv) a transaction from the director derived an improper personal benefit; and |
· | the Company shall indemnify to the fullest extent permitted by law each person that such law grants to the Company power to indemnify. |
46 |
Any amendment to or repeal of our Articles of Incorporation or by-laws shall not adversely affect any right or protection of any of our directors or officers for or with respect to any acts or omissions of such director or officer occurring prior to such amendment or repeal.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, 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 Securities Act and is, therefore, unenforceable.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
On March 30, 2015, we issued an aggregate of 4,000,000 shares of common stock, including 2,000,000 shares to Brian Kupchik and 2,000,000 shares to Seth Ingram, our incorporators and our current officers and directors in consideration of the payment by each them of $200. These shares were issued in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), under Section 4(2) of the Securities Act.
On April 8, 2015, we issued 2,000,000 shares of Series A Cumulative Convertible Preferred Stock to Ventureo, LLC. in consideration of the payment of $50,000 and the sale and transfer to us of assets comprising a portfolio of over 400 mobile applications. These shares were issued in a transaction exempt from the registration requirements of the Securities Act.
On June 6, 2015, we issued 10,000 shares of common stock to Peter Nein in consideration for services rendered pursuant to a consulting agreement between us and Mr. Nein. We issued these shares pursuant to Rule 701 promulgated under the Securities Act.
On June 6, 2015, we issued 100,000 shares of common stock to William P. Ruffa as partial consideration for legal services rendered pursuant to the engagement letter between us and Ruffa & Ruffa, P.C. We issued these shares pursuant to Rule 701 promulgated under the Securities Act.
ITEM 16. EXHIBITS.
|
(a) | Exhibits. |
See the Exhibit Index on the page immediately preceding the exhibits for a list of exhibits filed as part of this registration statement on Form S-1, which Exhibit Index is incorporated herein by reference.
(b) | Financial Statement Schedules. |
None.
ITEM 17. 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; |
47 |
(ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information 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) (§ 230.424(b) of this chapter) if, in the aggregate, the changes in volume and price represent no more than 20% 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; |
Provided, however, that:
(A) | Paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply if the registration statement is on Form S-8 (§ 239.16b of this chapter), and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) that are incorporated by reference in the registration statement; and | |
(B) | Paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the registration statement is on Form S-3 (§ 239.13 of this chapter) or Form F-3 (§ 239.33 of this chapter) and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) (§ 230.424(b) of this chapter) that is part of the registration statement. | |
(C) | Provided further, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is for an offering of asset-backed securities on Form S-1 (§ 239.11 of this chapter) or Form S-3 (§ 239.13 of this chapter), and the information required to be included in a post-effective amendment is provided pursuant to Item 1100(c) of Regulation AB (§ 229.1100(c)). |
(2) | That, for the purpose of determining any liability under the Securities Act of 1933, 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) | If the registrant is a foreign private issuer, to file a post-effective amendment to the registration statement to include any financial statements required by “Item 8.A. of Form 20-F (17 CFR 249.220f)” at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3 (§ 239.33 of this chapter), a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Act or § 210.3-19 of this chapter if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3. |
48 |
(5) | That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser: |
(i) | If the registrant is relying on Rule 430B (§ 230.430B of this chapter): |
(A) | Each prospectus filed by the registrant pursuant to Rule 424(b)(3) (§ 230.424(b)(3) of this chapter) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and | |
(B) | Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) (§ 230.424(b)(2), (b)(5), or (b)(7) of this chapter) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) (§ 230.415(a)(1)(i), (vii), or (x) of this chapter) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or |
(ii) | If the registrant is subject to Rule 430C (§ 230.430C of this chapter), each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A (§ 230.430A of this chapter), shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
49 |
(6) | 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 (§ 230.424 of this chapter); | |
(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) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons pursuant to the provisions described in Item 14 above, or otherwise, it is the opinion of the Securities and Exchange Commission that such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or paid by a director, officer or controlling person of us in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
We hereby undertake that:
(1) | for purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective; and | |
(2) | for purposes of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
50 |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-1 and has caused this registration statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in Garden City, New York on September 4, 2015.
AppSoft Technologies, Inc. | ||
By: | /s/ Brian Kupchik | |
Brian Kupchik | ||
President and Chief Executive Officer |
Each person whose signature appears below on this registration statement hereby constitutes and appoints Brian Kupchik, and any successor or successors to such offices held by him, his true and lawful attorney-in-fact and agent, 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 to this registration statement (including, without limitation, post-effective amendments), and any registration statement or amendment under Rule 462(b) under the Securities Act of 1933, as amended, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that such attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on September 4, 2015.
Signature | Title | |
/s/ Brian Kupchik | President, Chief Executive Officer and Director | |
Brian Kupchik | (principal executive officer, principal financial and accounting officer) | |
/s/ Seth Ingram | Secretary and Director | |
Seth Ingram |
51 |
EXHIBIT INDEX
Exhibit Number | Description of Exhibit | |
3.1* | Articles of Incorporation of AppSoft Technologies, Inc. | |
3.1.1* | Amendment to Articles of Incorporation of AppSoft Technologies, Inc. | |
3.2* | Bylaws of AppSoft Technologies, Inc. | |
4.1** | Specimen Common Stock Certificate | |
4.2** | Specimen Series A Cumulative Convertible Preferred Stock Certificate | |
5.1** | Form of Opinion of Ruffa & Ruffa, P.C. | |
10.1* | Agreement dated April 8, 2015 by and between Ventureo, LLC and AppSoft Technologies, Inc. | |
10.2* | Consulting Agreement dated June 6, 2015, by and between AppSoft Technologies, Inc. and Peter Nein. | |
23.1* | Consent of Independent Registered Public Accounting Firm. | |
23.2** | Consent of the Ruffa & Ruffa, P.C. (included in Exhibit 5.1). |
* | Filed herewith. | |
** | To be filed by amendment. |
52 |
Exhibit 3.1
ARTICLES OF INCORPORATION
OF
APPSOFT TECHNOLOGIES, INC.
(A Nevada corporation)
ARTICLE I
NAME
The name of the corporation shall be AppSoft Technologies, Inc. (hereinafter, the “ Corporation ”).
ARTICLE II
REGISTERED OFFICE
The name and street address of the Corporation’s registered agent in the State of Nevada is Nevada Processing Center, Inc., 6490 W. Desert Inn Rd., Las Vegas, NV 89146.
ARTICLE III
NATURE OF BUSINESS
The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the Nevada Revised Statues, as the same may be amended and supplemented or any successor thereto (hereinafter, the “ NRS ”).
ARTICLE IV
CAPITAL STOCK
Section 1. Authorized Shares . The aggregate number of shares which the Corporation shall have authority to issue is One Billion Ten Million (1,010,000,000) shares, consisting of two classes to be designated, respectively, "Common Stock" and "Preferred Stock," with all of such shares having a par value of $0.0001 per share. The total number of shares of Common Stock that the Corporation shall have authority to issue is One Billion (1,000,000,000) shares. The total number of shares of Preferred Stock that the Corporation shall have authority to issue is Ten Million (10,000,000) shares. The Preferred Stock may be issued in one or more series, each series to be appropriately designated by a distinguishing letter or title, prior to the issuance of any shares thereof. The voting powers, designations, preferences, limitations, restrictions, and relative, participating, optional and other rights of the Preferred Stock and the qualifications, limitations, or restrictions relating thereto, shall hereinafter be prescribed by resolution of the board of directors pursuant to Section 3 of this Article IV .
Section 2. Common Stock.
2.1. Dividend Rights . Subject to the rights of holders of any Preferred Stock having preference as to dividends and except as otherwise provided by these Articles of Incorporation, as amended from time to time (hereinafter, the " Articles ") or the NRS, the holders of Common Stock shall be entitled to receive dividends when, as and if declared by the board of directors out of assets legally available therefor.
2.2. Voting Rights . Except as otherwise provided by the NRS, the holders of the issued and outstanding shares of Common Stock shall be entitled to one vote for each share of Common Stock. No holder of shares of Common Stock shall have the right to cumulate votes.
2.3. Liquidation Rights . In the event of liquidation, dissolution, or winding up of the affairs of the Corporation, whether voluntary or involuntary, subject to the prior rights of holders of Preferred Stock to share in the Corporation's assets, the Common Stock and any shares of Preferred Stock which are not entitled to any preference in liquidation shall share equally and ratably in the Corporation's assets available for distribution after giving effect to any liquidation preference of any shares of Preferred Stock then outstanding.
2.4. No Conversion, Redemption or Preemptive Rights . The holders of Common Stock shall not have any conversion, redemption, or preemptive rights.
2.5. Consideration for Shares . The Common Stock authorized by this Article shall be issued for such consideration as shall be fixed, from time to time, by the board of directors.
Section 3. Preferred Stock.
3.1. Designation . The board of directors is hereby vested with the authority from time to time to provide by resolution for the issuance of shares of Preferred Stock in one or more series not exceeding the aggregate number of shares of Preferred Stock authorized by these Articles, and to prescribe with respect to each such series the voting powers, if any, designations, preferences, and relative, participating, optional, or other special rights, and the qualifications, limitations, or restrictions relating thereto, including, without limiting the generality of the foregoing: the voting rights relating to the shares of Preferred Stock of any series (which voting rights, if any, may be full or limited, may vary over time, and may be applicable generally or only upon any stated fact or event); the rate of dividends (which may be cumulative or noncumulative), the condition or time for payment of dividends and the preference or relation of such dividends to dividends payable on any other class or series of capital stock; the rights of holders of Preferred Stock of any series in the event of liquidation, dissolution, or winding up of the affairs of the Corporation; the rights, if any, of holders of Preferred Stock of any series to convert or exchange such shares of Preferred Stock for shares of any other class or series of capital stock or for any other securities, property, or assets of the Corporation or any subsidiary (including the determination of the price or prices or the rate or rates applicable to such rights to convert or exchange and the adjustment thereof, the time or times during which the right to convert or exchange shall be applicable, and the time or times during which a particular price or rate shall be applicable); whether the shares of any series of Preferred Stock shall be subject to redemption by the Corporation and if subject to redemption, the times, prices, rates, adjustments and other terms and conditions of such redemption. The board of directors is further authorized to increase or decrease (but not below the number of such shares of such series then outstanding) the number of shares of any series subsequent to the issuance of shares of that series. In case the number of shares of any series is so decreased, the shares constituting such decrease shall resume the status that they had before the adoption of the resolution originally fixing the number of shares of such series. Unless the board of directors provides to the contrary in the resolution which fixes the designation of a series of Preferred Stock, neither the consent by series, or otherwise, of the holders of any outstanding Preferred Stock nor the consent of the holders of any outstanding Common Stock shall be required for the issuance of any new series of Preferred Stock regardless of whether the rights and preferences of the new series of Preferred Stock are senior or superior, in any way, to the outstanding series of Preferred Stock or the Common Stock.
2 |
3.2. Certificate . Before the Corporation shall issue any shares of Preferred Stock of any series, a certificate of designation setting forth a copy of the resolution or resolutions of the board of directors, and establishing the voting powers, designations, preferences, the relative, participating, optional, or other rights, if any, and the qualifications, limitations, and restrictions, if any, relating to the shares of Preferred Stock of such series, and the number of shares of Preferred Stock of such series authorized by the board of directors to be issued shall be made and signed by an officer of the corporation and filed in the manner prescribed by the NRS.
Section 4. Series A Cumulative Convertible Preferred Stock
4.1. Designation, Amount, Original Issue Price and Par Value . This series of Preferred Stock shall be designated as the Corporation’s Series A Cumulative Convertible Preferred Stock (the “ Series A Preferred Stock ”) and the number of shares so designated shall be 2,000,000 (which shall not be subject to increase without the consent of a majority of the holders of the Series A Preferred Stock). Each share of Series A Preferred Stock shall have an original issue price of $0.10 per share (the “ Original Issue Price ”).
4.2. Ranking .
4.2.1. Senior Preferred . The Series A Preferred Stock shall rank senior to the Corporation’s Common Stock, any other shares of Preferred Stock the Corporation may issue in the future with respect to the right to receive dividends, distributions or proceeds in a liquidation, dissolution or winding up of the Corporation. In the event of a liquidation, dissolution or winding up of the Corporation subject to Section 4.3 hereof, and the assets of the Corporation are insufficient to satisfy the Corporation’s obligations of the holders of the Series A Preferred Stock, all payments shall be made to the holders of the Series A Preferred Stock on a pro rata basis.
4.2.2. Junior Preferred . The Corporation is authorized to issue other series of preferred stock that rank junior to the Series A Preferred Stock with respect to dividend rights and rights upon liquidation, winding-up or dissolution (the “ Junior Preferred Stock ”). The Series A Preferred Stock and any other series of Senior Preferred Stock shall rank senior to the Corporation’s Common Stock and the Junior Preferred Stock with respect to dividend rights and rights upon liquidation, winding-up or dissolution.
3 |
4.3. Dividends and Other Distributions .
4.3.1. Accruing Dividends and Dividend Rate . From and after the date of the issuance of any shares of Series A Preferred Stock, dividends at the rate per annum of $0.01 per share shall accrue on such shares of Series A Preferred Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A Preferred Stock) (the “ Accruing Dividends ”). Accruing Dividends shall accrue from day to day and shall be cumulative. Such Accruing Dividends shall be payable quarterly in shares of the Corporation’s Common Stock (the “ Dividend Shares ”). Dividends paid in Dividend Shares shall be paid in a number of fully paid and non-assessable shares (rounded up to the nearest whole share) of Common Stock equal to the amount of interest payable divided by the Conversion Price then in effect. Under and subject to the last sentence of this Section, the Corporation shall not declare, pay or set aside any dividends on shares of any other class or series of capital stock of the Corporation (other than dividends on shares of Common Stock payable in shares of Common Stock) unless (in addition to obtaining any consents required elsewhere in these Articles) the holders of the Series A Preferred Stock then outstanding shall first receive, or simultaneously receive, a dividend on each outstanding share of Series A Preferred Stock in an amount at least equal to the greater of (i) the amount of the aggregate Accruing Dividends then accrued on such share of Series A Preferred Stock and not previously paid and (ii) (A) in the case of a dividend on Common Stock or any class or series that is convertible into Common Stock, that dividend per share of Series A Preferred Stock as would equal the product of (1) the dividend payable on each share of such class or series determined, if applicable, as if all shares of such class or series had been converted into Common Stock and (2) the number of shares of Common Stock issuable upon conversion of a share of Series A Preferred Stock, in each case calculated on the record date for determination of holders entitled to receive such dividend or (B) in the case of a dividend on any class or series that is not convertible into Common Stock, at a rate per share of Series A Preferred Stock determined by (1) dividing the amount of the dividend payable on each share of such class or series of capital stock by the original issuance price of such class or series of capital stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to such class or series) and (2) multiplying such fraction by an amount equal to the Series A Original Issue Price; provided that if the Corporation declares, pays or sets aside, on the same date, a dividend on shares of more than one class or series of capital stock of the Corporation, the dividend payable to the holders of Series A Preferred Stock pursuant to this Section 4.3 shall be calculated based upon the dividend on the class or series of capital stock that would result in the highest Series A Preferred Stock dividend.
4.4. Liquidation, Dissolution or Winding Up; Certain Mergers, Consolidations and Asset Sales .
4.4.1. Preferential Payments to Holders of Series A Preferred Stock . In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, as defined in Section 4.4.3, below, the holders of shares of Series A Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders before any payment shall be made to the holders of Common Stock or Junior Preferred Stock by reason of their ownership thereof, an amount per share equal the Series A Original Issue Price (the “ Series A Preference Amount ”). If upon any such liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, the assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of shares of Series A Preferred Stock the full amount to which they shall be entitled under this Subsection 4.4.1, the holders of shares of Series A Preferred Stock shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.
4.4.2. Distribution of Remaining Assets . In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, after the payment of all preferential amounts required to be paid to the holders of shares of Series A Preferred Stock, the remaining assets of the Corporation available for distribution to its stockholders shall be distributed among the holders of the shares of Junior Preferred Stock, if any, to the extent of their preference and thereafter among the holders of the shares of Common Stock, Series A Preferred Stock and any series of Preferred Stock entitled to participation rights, pro rata based on the number of shares held by each such holder, treating for this purpose all such securities as if they had been converted to Common Stock pursuant to the terms of these Articles immediately prior to such liquidation, dissolution or winding up of the Corporation. The aggregate amount which a holder of a share of Series A Preferred Stock is entitled to receive under Subsections 4.4.1 and 4.4.2 is hereinafter referred to as the “ Series A Liquidation Amount .”
4 |
4.4.3. Deemed Liquidation Events .
(a) Definition . Each of the following events shall be considered a “ Deemed Liquidation Event ” unless the holders of at least a majority of the outstanding shares of Series A Preferred Stock elect otherwise by written notice sent to the Corporation at least five (5) days prior to the effective date of any such event:
(1) a merger or consolidation in which
(A) the Corporation is a constituent party or
(B) a subsidiary of the Corporation is a constituent party and the Corporation issues shares of its capital stock pursuant to such merger or consolidation, except any such merger or consolidation involving the Corporation or a subsidiary in which the shares of capital stock of the Corporation outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for shares of capital stock that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the capital stock of (x) the surviving or resulting corporation; or (y) if the surviving or resulting corporation is a wholly owned subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation; or
(2) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Corporation or any subsidiary of the Corporation of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole, or the sale or disposition (whether by merger, consolidation or otherwise) of one or more subsidiaries of the Corporation if substantially all of the assets of the Corporation and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned subsidiary of the Corporation.
(b) Effecting a Deemed Liquidation Event .
(1) The Corporation shall not have the power to effect a Deemed Liquidation Event referred to in Subsection 4.4.3(a)(1) unless the agreement or plan of merger or consolidation for such transaction (the “ Merger Agreement ”) provides that the consideration payable to the stockholders of the Corporation shall be allocated among the holders of capital stock of the Corporation in accordance with Subsections 4.4.1 and 4.4.2., unless the holders of at least a majority of the outstanding shares of Series A Preferred Stock elect otherwise by written notice sent to the Corporation.
5 |
(2) In the event of a Deemed Liquidation Event referred to in Subsection 4.4.3(a)(2) or 4.4.3.(b), if the Corporation does not effect a dissolution of the Corporation under the NRS within ninety (90) days after such Deemed Liquidation Event, then (i) the Corporation shall send a written notice to each holder of Series A Preferred Stock no later than the ninetieth (90th) day after the Deemed Liquidation Event advising such holders of their right (and the requirements to be met to secure such right) pursuant to the terms of the following clause; (ii) to require the redemption of such shares of Series A Preferred Stock, and (iii) if the holders of at least a majority of the then outstanding shares of Series A Preferred Stock so request in a written instrument delivered to the Corporation not later than one hundred twenty (120) days after such Deemed Liquidation Event, the Corporation shall use the consideration received by the Corporation for such Deemed Liquidation Event (net of any retained liabilities associated with the assets sold or technology licensed, as determined in good faith by the Board of Directors of the Corporation), together with any other assets of the Corporation available for distribution to its stockholders, all to the extent permitted by Nevada law governing distributions to stockholders (the “ Available Proceeds ”), on the one hundred fiftieth (150th) day after such Deemed Liquidation Event, to redeem all outstanding shares of Series A Preferred Stock at a price per share equal to the Series A Liquidation Amount. Notwithstanding the foregoing, in the event of a redemption pursuant to the preceding sentence, if the Available Proceeds are not sufficient to redeem all outstanding shares of Series A Preferred Stock, the Corporation shall ratably redeem each holder’s shares of Series A Preferred Stock to the fullest extent of such Available Proceeds, and shall redeem the remaining shares as soon as it may lawfully do so under Nevada law governing distributions to stockholders. Prior to the distribution or redemption provided for in this Subsection 4.4.3.(b)(2), the Corporation shall not expend or dissipate the consideration received for such Deemed Liquidation Event, except to discharge expenses incurred in connection with such Deemed Liquidation Event or in the ordinary course of business.
(c) Amount Deemed Paid or Distributed . If the amount deemed paid or distributed under this Subsection 4.4.3 is made in property other than in cash, the value of such distribution shall be the fair market value of such property, determined as follows:
(1) For securities not subject to investment letters or other similar restrictions on free marketability,
(A) if traded on a securities exchange, the value shall be deemed to be the average of the closing prices of the securities on such exchange or market over the thirty (30) day period ending three (3) days prior to the closing of such transaction;
(B) if actively traded over-the-counter, the value shall be deemed to be the average of the closing bid prices over the thirty (30) day period ending three (3) days prior to the closing of such transaction; or
(C) if there is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Board of Directors of the Corporation.
(2) The method of valuation of securities subject to investment letters or other similar restrictions on free marketability (other than restrictions arising solely by virtue of a stockholder’s status as an affiliate or former affiliate) shall take into account an appropriate discount (as determined in good faith by the Board of Directors of the Corporation) from the market value as determined pursuant to clause (a) above so as to reflect the approximate fair market value thereof.
6 |
4.5. Voting .
4.5.1. General . On any matter presented to the stockholders of the Corporation for their action or consideration at any meeting of stockholders of the Corporation (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Series A Preferred Stock shall be entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Series A Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Except as provided by law or by the other provisions of the Articles, holders of Series A Preferred Stock shall vote together with the holders of Common Stock as a single class.
4.5.2. Series A Preferred Stock Protective Provisions . For so long as at least fifty percent (50%) of the number of shares of Series A Preferred Stock originally issued (subject to appropriate adjustment in the event of any stock dividend, stock split, combination, or other similar recapitalization with respect to the Series A Preferred Stock) remain outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Articles) the written consent or affirmative vote of the holders of at least a majority of the then outstanding shares of Series A Preferred Stock, given in writing or by vote at a meeting, consenting or voting (as the case may be) separately as a class, and any such act or transaction entered into without such consent or vote shall be null and void ab initio, and of no force or effect.
(a) liquidate, dissolve or wind-up the business and affairs of the Corporation, effect any merger or consolidation or any other Deemed Liquidation Event, or consent to any of the foregoing, unless as a result of any Deemed Liquidation Event, the holders of the Series A Preferred Shares receive their full Series A Preference Amount, in which case no such consent shall be necessary;
(b) Amend, alter or repeal any provision of the Articles or Bylaws of the Corporation in a manner that adversely affects the powers, preferences or rights of the Series A Preferred Stock;
(c) create, or authorize the creation of, or issue or obligate itself to issue shares of, any additional class or series of capital stock other than shares of Common Stock or as otherwise permitted in Section 4.2 hereof, or increase the authorized number of shares of Series A Preferred Stock or increase the authorized number of shares of any additional class or series of capital stock other than as permitted in Section 4.2 hereof;
(d) enter into, create, incur, assume or suffer to exist any lien of any indebtedness for borrowed money of any kind in excess of $200,000, including but not limited to, a guarantee of indebtedness for borrowed money without first obtaining the approval of the holders of a majority of the Series A Preferred Stock;
(e) enter into, create, incur, assume or suffer to exist any liens of any kind, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom without first obtaining the approval of the holders of a majority of the Series A Preferred Stock;
7 |
(f) enter into any transaction that would result in the issuance of in excess of 10% of the Company’s then issued and outstanding shares of common stock without first obtaining the approval of the holders of a majority of the Series A Preferred Stock;
(g) enter into any transaction resulting in the sale of any material assets of the Company; or
(h) enter into any agreement with respect to any of the foregoing.
4.6. Optional Conversion . The holders of the Series A Preferred Stock shall have conversion rights as follows (the “ Conversion Rights ”):
4.6.1. Right to Convert .
(a) Conversion Ratio . Each share of Series A Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and non-assessable shares of Common Stock as is determined by dividing the Series A Original Issue Price by the Series A Conversion Price (as defined below) in effect at the time of conversion. The “Series A Conversion Price” shall initially be equal to $0.0005. Such initial Series A Conversion Price, and the rate at which shares of Series A Preferred Stock may be converted into shares of Common Stock, shall be subject to adjustment as provided in Section 4.6.4 hereof and shall be subject to the limitation set forth in Section 4.6.1(c) hereof.
(b) Termination of Conversion Rights . In the event of a liquidation, dissolution or winding up of the Corporation or a Deemed Liquidation Event, the Conversion Rights shall terminate at the close of business on the last full day preceding the date fixed for the payment of any such amounts distributable on such event to the holders of Series A Preferred Stock.
(c) Limitation on Conversion . Each holder of Series A Preferred Stock shall not have the right to convert any portion of the Series A Preferred Stock pursuant to Section 4.6 hereof, to the extent that after giving effect to such conversion, the holder (together with the holder’s affiliates) would beneficially own in excess of 4.99% (the “ Maximum Percentage ”) of the number of shares of Common Stock outstanding immediately after giving effect to such conversion. For purposes of this Section 4.6.1(c), in determining the number of outstanding shares of Common Stock, the holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Corporation’s most recent Form 10-K, Form 10-Q or Form 8-K, as the case may be (y) a more recent public announcement by the Corporation or (z) any other notice by the Corporation or the transfer agent of the Corporation setting forth the number of shares of Common Stock outstanding. For any reason at any time, upon the written or oral request of the holder, the Corporation shall within one business day confirm orally and in writing to the holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Corporation, including the Series A Preferred Stock, by the holder or its affiliates since the date as of which such number of outstanding shares of Common Stock was reported. By written notice to the Corporation, the holder may increase or decrease the Maximum Percentage to a maximum of 9.99%; provided that (i) any such increase will not be effective until the sixty-first (61st) day after such notice is delivered to the Corporation (unless such notice is provided prior to the initial issuance of such Series A Preferred Stock), and (ii) any such increase or decrease will apply only to the holder and not to any other holder of Series A Preferred Stock.
8 |
4.6.2. Fractional Shares . No fractional shares of Common Stock shall be issued upon conversion of the Series A Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the fair market value of a share of Common Stock as determined in good faith by the Board of Directors of the Corporation. Whether or not fractional shares would be issuable upon such conversion shall be determined on the basis of the total number of shares of Series A Preferred Stock the holder is at the time converting into Common Stock and the aggregate number of shares of Common Stock issuable upon such conversion.
4.6.3. Mechanics of Conversion .
(a) Notice of Conversion . In order for a holder of Series A Preferred Stock to voluntarily convert shares of Series A Preferred Stock into shares of Common Stock, such holder shall (a) provide written notice to the Corporation’s transfer agent at the office of the transfer agent for the Series A Preferred Stock (or at the principal office of the Corporation if the Corporation serves as its own transfer agent for the Series A Preferred Stock) that such holder elects to convert all or any number of such holder’s shares of Series A Preferred Stock and, if applicable, any event on which such conversion is contingent and (b), if such holder’s shares are certificated, surrender the certificate or certificates for such shares of Series A Preferred Stock (or, if such registered holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate), at the office of the transfer agent for the Series A Preferred Stock (or at the principal office of the Corporation if the Corporation serves as its own transfer agent for the Series A Preferred Stock). Such notice shall state such holder’s name or the names of the nominees in which such holder wishes the shares of Common Stock to be issued. If required by the Corporation, any certificates surrendered for conversion shall be endorsed or accompanied by a written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the registered holder or his, her or its attorney duly authorized in writing. The close of business on the date of receipt by the transfer agent (or by the Corporation if the Corporation serves as its own transfer agent for the Series A Preferred Stock) of such notice and, if applicable, certificates (or lost certificate affidavit and agreement) shall be the time of conversion (the “ Conversion Time ”), and the shares of Common Stock issuable upon conversion of the specified shares shall be deemed to be outstanding of record as of such date. The Corporation shall, as soon as practicable after the Conversion Time (i) issue and deliver to such holder of Series A Preferred Stock, or to his, her or its nominees, a certificate or certificates for the number of full shares of Common Stock issuable upon such conversion in accordance with the provisions hereof and a certificate for the number (if any) of the shares of Series A Preferred Stock represented by the surrendered certificate that were not converted into Common Stock, (ii) pay in cash such amount as provided in Subsection 4.6.2 in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion and (iii) pay all declared but unpaid dividends on the shares of Series A Preferred Stock converted.
9 |
(b) Reservation of Shares . Prior to, or as promptly following the issuance of the Series A Preferred Stock as it may do so, the Corporation shall amend its certificate of incorporation to increase the number of authorized shares of Common Stock and reserve a number of shares of Common Stock equal to at least 110% of the number of shares of Common Stock into which the issued Series A Preferred Stock are convertible at issuance. At all times when the Series A Preferred Stock shall be outstanding, the Corporation shall take such corporate action as may be necessary to reserve and keep such number of shares available out of its authorized but unissued capital stock, for the purpose of effecting the conversion of the Series A Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Series A Preferred Stock, the Corporation shall take such corporate action as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to the Articles of Incorporation. Before taking any action which would cause an adjustment reducing the Series A Conversion Price below the then par value of the shares of Common Stock issuable upon conversion of the Series A Preferred Stock, the Corporation will take any corporate action which may, in the opinion of its counsel, be necessary in order that the Corporation may validly and legally issue fully paid and non-assessable shares of Common Stock at such adjusted Series A Conversion Price.
(c) Effect of Conversion . All shares of Series A Preferred Stock which shall have been surrendered for conversion as herein provided shall no longer be deemed to be outstanding and all rights with respect to such shares shall immediately cease and terminate at the Conversion Time, except only the right of the holders thereof to receive shares of Common Stock in exchange therefor, to receive payment in lieu of any fraction of a share otherwise issuable upon such conversion as provided in Subsection 4.6.2 and to receive payment of any dividends declared but unpaid thereon. Any shares of Series A Preferred Stock so converted shall be retired and cancelled and may not be reissued as shares of such series, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the authorized number of shares of Series A Preferred Stock accordingly.
(d) Taxes . The Corporation shall pay any and all issue and other similar taxes that may be payable in respect of any issuance or delivery of shares of Common Stock upon conversion of shares of Series A Preferred Stock pursuant to this Section 4.6. The Corporation shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of shares of Common Stock in a name other than that in which the shares of Series A Preferred Stock so converted were registered, and no such issuance or delivery shall be made unless and until the person or entity requesting such issuance has paid to the Corporation the amount of any such tax or has established, to the satisfaction of the Corporation, that such tax has been paid.
10 |
4.6.4. Adjustment for Stock Splits and Combinations . If the Corporation shall at any time or from time to time after the Series A Original Issue Date effect a subdivision of the outstanding Common Stock, the Series A Conversion Price in effect immediately before that subdivision shall be proportionately decreased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be increased in proportion to such increase in the aggregate number of shares of Common Stock outstanding. If the Corporation shall at any time or from time to time after the Series A Original Issue Date combine the outstanding shares of Common Stock, the Series A Conversion Price in effect immediately before the combination shall be proportionately increased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be decreased in proportion to such decrease in the aggregate number of shares of Common Stock outstanding. Any adjustment under this subsection shall become effective at the close of business on the date the subdivision or combination becomes effective.
4.6.5. Adjustment for Certain Dividends and Distributions . In the event the Corporation at any time or from time to time after the Series A Original Issue Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable on the Common Stock in additional shares of Common Stock, then and in each such event the Series A Conversion Price in effect immediately before such event shall be decreased as of the time of such issuance or, in the event such a record date shall have been fixed, as of the close of business on such record date, by multiplying the Series A Conversion Price then in effect by a fraction:
(a) the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and
(b) the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution.
Notwithstanding the foregoing (x) if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Series A Conversion Price shall be recomputed accordingly as of the close of business on such record date and thereafter the Series A Conversion Price shall be adjusted pursuant to this subsection as of the time of actual payment of such dividends or distributions; and (y) that no such adjustment shall be made if the holders of Series A Preferred Stock simultaneously receive a dividend or other distribution of shares of Common Stock in a number equal to the number of shares of Common Stock as they would have received if all outstanding shares of Series A Preferred Stock had been converted into Common Stock on the date of such event.
4.6.6. Adjustments for Other Dividends and Distributions . In the event the Corporation at any time or from time to time after the Series A Original Issue Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Corporation (other than a distribution of shares of Common Stock in respect of outstanding shares of Common Stock) or in other property, then and in each such event the holders of Series A Preferred Stock shall receive, simultaneously with the distribution to the holders of Common Stock, a dividend or other distribution of such securities or other property in an amount equal to the amount of such securities or other property as they would have received if all outstanding shares of Series A Preferred Stock had been converted into Common Stock on the date of such event.
11 |
4.6.7. Adjustment for Merger or Reorganization, etc . Subject to the provisions of Subsection 4.4.3, if there shall occur any reorganization, recapitalization, reclassification, consolidation or merger involving the Corporation in which the Common Stock (but not the Series A Preferred Stock) is converted into or exchanged for securities, cash or other property (other than a transaction covered by Subsections 4.6.5 or 4.6.6), then, following any such reorganization, recapitalization, reclassification, consolidation or merger, each share of Series A Preferred Stock shall thereafter be convertible in lieu of the Common Stock into which it was convertible prior to such event into the kind and amount of securities, cash or other property which a holder of the number of shares of Common Stock of the Corporation issuable upon conversion of one share of Series A Preferred Stock immediately prior to such reorganization, recapitalization, reclassification, consolidation or merger would have been entitled to receive pursuant to such transaction; and, in such case, appropriate adjustment (as determined in good faith by the Board of Directors of the Corporation) shall be made in the application of the provisions in this Section 4.6 with respect to the rights and interests thereafter of the holders of the Series A Preferred Stock, to the end that the provisions set forth in this Section 4.6.7 (including provisions with respect to changes in and other adjustments of the Series A Conversion Price) shall thereafter be applicable, as nearly as reasonably may be, in relation to any securities or other property thereafter deliverable upon the conversion of the Series A Preferred Stock. For the avoidance of doubt, nothing in this Subsection 4.6.7 shall be construed as preventing the holders of Series A Preferred Stock from seeking any appraisal rights to which they are otherwise entitled under the Nevada Revised Statutes in connection with a merger triggering an adjustment hereunder, nor shall this Subsection 4.6.7 be deemed conclusive evidence of the fair value of the shares of Series A Preferred Stock in any such appraisal proceeding.
4.6.8. Certificate as to Adjustments . Upon the occurrence of each adjustment or readjustment of the Series A Conversion Price pursuant to this Section 4.6.8, the Corporation at its expense shall, as promptly as reasonably practicable but in any event not later than ten (10) days thereafter, compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Series A Preferred Stock a certificate setting forth such adjustment or readjustment (including the kind and amount of securities, cash or other property into which the Series A Preferred Stock is convertible) and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, as promptly as reasonably practicable after the written request at any time of any holder of Series A Preferred Stock (but in any event not later than ten (10) days thereafter), furnish or cause to be furnished to such holder a certificate setting forth (i) the Series A Conversion Price then in effect, and (ii) the number of shares of Common Stock and the amount, if any, of other securities, cash or property which then would be received upon the conversion of Series A Preferred Stock.
4.6.9. Notice of Record Date . In the event:
(a) the Corporation shall take a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon conversion of the Series A Preferred Stock) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other security; or
(b) of any capital reorganization of the Corporation, any reclassification of the Common Stock of the Corporation, or any Deemed Liquidation Event; or
12 |
(c) of the voluntary or involuntary dissolution, liquidation or winding-up of the Corporation,
then, and in each such case, the Corporation will send or cause to be sent to the holders of the Series A Preferred Stock a notice specifying, as the case may be, (i) the record date for such dividend, distribution or right, and the amount and character of such dividend, distribution or right, or (ii) the effective date on which such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up is proposed to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such other capital stock or securities at the time issuable upon the conversion of the Series A Preferred Stock) shall be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up, and the amount per share and character of such exchange applicable to the Series A Preferred Stock and the Common Stock. Such notice shall be sent at least ten (10) days prior to the record date or effective date for the event specified in such notice.
4.7. Amendments and Waiver . No provision of this designation of the Series A Preferred Stock may be amended, modified or waived except by an instrument in writing executed by the Corporation and the written consent or affirmative vote of the holders of at least a majority of the then outstanding shares of Series A Preferred Stock, given in writing or by vote at a meeting, consenting or voting (as the case may be) separately as a class, and any such act or transaction entered into without such consent or vote shall be null and void ab initio, and of no force or effect. Any such written amendment, modification or waiver will be binding upon the Corporation and each holder of Series A Preferred Stock; provided, that no amendment, modification or waiver of the terms or relative priorities of the Series A Preferred Stock may be accomplished by the merger, consolidation or other transaction of the Corporation with another corporation or entity unless the Corporation has obtained the prior written consent of the holders in accordance with this Section 4.7.
4.8. Notices . Any notice required or permitted by the provisions of this designation of Series A Preferred Stock to be given to a holder of shares of Series A Preferred Stock shall be mailed, postage prepaid, to the post office address last shown on the records of the Corporation, or given by electronic communication in compliance with the provisions of the Nevada Revised Statutes, and shall be deemed sent upon such mailing or electronic transmission.
Section 5. Non-Assessment of Stock. The capital stock of the Corporation, after the amount of the subscription price has been fully paid, shall not be assessable for any purpose, and no stock issued as fully paid shall ever be assessable or assessed, and the Articles shall not be amended in this particular. No stockholder of the Corporation is individually liable for the debts or liabilities of the Corporation.
ARTICLE V
OTHER SECURITIES
The Board of Directors is authorized, from time to time, to create and issue, whether or not in connection with the issuance and sale of any of the stock or other securities or property of the Corporation, rights entitling the holders thereof to purchase from the Corporation shares of stock or other securities of the Corporation or any other corporation. The times at which and the terms upon which such rights are to be issued will be determined by the Board of Directors and set forth in the contracts or instruments that evidence such rights. The authority of the Board of Directors with respect to such rights shall include, but not be limited to, determination of the following:
13 |
(a) The initial purchase price per share or other unit of the stock or other securities or property to be purchased upon exercise of such rights.
(b) Provisions relating to the times at which and the circumstances under which such rights may be exercised or sold or otherwise transferred, either together with or separately from any other stock or other securities of the Corporation.
(c) Provisions that adjust the number or exercise price of such rights or amount or nature of the stock or other securities or property receivable upon exercise of such rights in the event of a combination, split or recapitalization of any stock of the Corporation, a change in ownership of the Corporation’s stock or other securities or a reorganization, merger, consolidation, sale of assets or other occurrence relating to the Corporation or any stock of the Corporation, and provisions restricting the ability of the Corporation to enter into any such transaction absent an assumption by the other party or parties thereto of the obligations of the Corporation under such rights.
(d) Provisions that deny the holder of a specified percentage of the outstanding stock or other securities of the Corporation the right to exercise such rights and/or cause the rights held by such holder to become void.
(e) Provisions that permit the Corporation to redeem or exchange such rights.
(f) The appointment of a rights agent with respect to such rights.
ARTICLE VI
DIRECTORS
Section 1. Number of Directors. The board of directors shall consist of at least one (1) individual and not more than eleven (11) individuals. The number of directors may be changed from time to time in such manner as shall be provided in the bylaws of the Corporation. The board of directors of the Corporation shall be elected in such manner as shall be provided in the bylaws of the Corporation.
Section 2. Initial Directors. The name and street address of the director:
Brian Kupchik
Seth Ingram |
1225 Franklin Ave., Suite 325 Garden City, NY 11530
1225 Franklin Ave., Suite 325 Garden City, NY 11530 |
14 |
Section 3. Vacancies. All vacancies, including vacancies caused by an increase in the number of directors and including vacancies resulting from the removal of directors by the stockholders entitled to vote that are not filled by such stockholders, may be filled by the remaining directors, though less than a quorum. Notwithstanding the foregoing, whenever the holders of any one or more series of shares of Preferred Stock issued by the Corporation have the right, voting separately by series, to elect directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of these Articles of Incorporation or the resolution or resolutions adopted by the Board of Directors
ARTICLE VII
LIMITATION OF LIABILITY
The personal liability of directors and officers of the Corporation shall be eliminated to the fullest extent permitted by the NRS, as the same exists or hereafter may be amended. No director or officer of the Corporation will be liable to the Corporation or its stockholders for damages for breach of fiduciary duty as a director or officer, excepting only (i) acts or omissions that involve intentional misconduct, fraud or a knowing violation of law or (ii) the payment of dividends in violation of NRS Section 78.300. No amendment, modification or repeal of this Article V applies to or has any effect on the liability or alleged liability of any director or officer of the Corporation for or with respect to any act or omission of such director or officer having occurred before such amendment, modification or repeal, except as otherwise required by law. If the NRS is amended to further eliminate or limit or authorize corporate action to further eliminate or limit the liability of directors or officers, the liability of directors and officers of the Corporation shall be eliminated or limited to the fullest extent permitted by the NRS, as so amended from time to time.
ARTICLE VIII
INDEMNIFICATION
The Corporation shall, to the fullest extent permitted by the laws of the State of Nevada, as the same exist or hereafter may be amended (but in the case of such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such laws permitted the Corporation to provide before such amendment), indemnify and hold harmless each person who was or is a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding” ), by reason of the fact that such person or a person for whom such person is the legal representative is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, manager or trustee of another corporation or of a partnership, limited liability company, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such Proceeding is alleged action or inaction in an official capacity or in any other capacity while serving as a director or officer of the Corporation or at the request of the Corporation as a director, officer, manager or trustee of another corporation or of a partnership, limited liability company, joint venture, trust or other enterprise, against and from all costs, charges, expenses, liabilities and losses (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement and amounts expended in seeking indemnification granted to such person under applicable law, this Article VIII or any agreement with the Corporation) reasonably incurred or suffered by such person in connection therewith. The Corporation may, by action of the Board of Directors or through the adoption of bylaws, provide indemnification to employees and agents of the Corporation, and to persons who are serving or did serve at the request of the Corporation as an employee or agent of another corporation or of a partnership, limited liability company, joint venture, trust or other enterprise, with the same scope and effect as provided to the directors and officers of the Corporation pursuant to the foregoing provisions of this Article VIII.
15 |
The indemnification provided for herein shall not be deemed exclusive of any other right to which a person indemnified may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to actions of such person in such person’s official capacity and as to actions of such person in another capacity while holding such office. The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, manager, trustee, employee or agent of another corporation or of a partnership, limited liability company, joint venture, trust or other enterprise, against any liability asserted against such person in any such capacity or arising out of such person’s status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of NRS, Chapter 78. The expenses of any director or officer, current or past, incurred in defending a civil or criminal action, suit or proceeding shall be paid by the Corporation as incurred and in advance of the final disposition of such action, suit or proceeding upon the Corporation’s receipt of an undertaking by or on behalf of such current or past director or officer to repay the Corporation for all of such expenses if it ultimately is determined by a court of competent jurisdiction that such current or past director or officer is not entitled to be indemnified by the Corporation. The indemnification provided for herein shall continue as to a person who has ceased to be a director, officer, employee or agent of the Corporation, or who has ceased to serve at the request of the Corporation as a director, officer, manager, trustee, employee or agent of another corporation or of a partnership, limited liability company, joint venture, trust or other enterprise, and shall inure to the benefit of such person’s heirs, executors and administrators. No amendment, modification or repeal of this Article VIII applies to or has any effect on any right or protection of any director, officer, employee or agent of the Corporation, or any person who is or was serving at the request of the Corporation as a director, officer, manager, trustee, employee or agent of another corporation or of a partnership, limited liability company, joint venture, trust or other enterprise, existing at the time of such amendment, modification or repeal.
ARTICLE IX
BYLAWS
In furtherance and not in limitation of the rights, powers, privileges and discretionary authority granted or conferred by NRS, Chapter 78 or other statutes or laws of the State of Nevada, the Board of Directors is expressly authorized: (i) to make, adopt, amend, alter or repeal the Bylaws of the Corporation, except as and to the extent otherwise provided in such Bylaws; (ii) from time to time to adopt Bylaw provisions with respect to indemnification of directors, officers, employees, agents and other persons as the Board of Directors deems expedient and in the best interests of the Corporation and to the extent permitted by law; and (iii) to fix and determine designations, preferences, privileges, rights and powers, and relative, participating, optional or other special rights, qualifications, limitations or restrictions, on the capital stock of the Corporation as provided by NRS Section 78.195, unless otherwise provided herein.
16 |
ARTICLE X
FORUM AND JURISDICTION
Unless the Corporation consents in writing to the selection of an alternative forum, the District Courts of the State of Nevada shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or other agent of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of Title 7 of the NRS or (iv) any action asserting a claim governed by the internal affairs doctrine, in each case subject to such District Courts having personal jurisdiction over the indispensable parties named as defendants therein.
ARTICLE XI
AMENDMENT OF ARTICLES
The Corporation reserves the right to amend, alter, change or repeal any provision contained in these Articles of Incorporation in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.
ARTICLE XII
INCORPORATOR
The name and address of the incorporator signing these Articles of Incorporation are as follows:
1225 Franklin Ave., Suite 325 | |
Brian Kupchik | Garden City, NY 11530 |
IN WITNESS WHEREOF, I hereunder set my hand on March 24, 2015, hereby declaring and certifying that the facts stated hereinabove are true.
Brian Kupchik, Incorporator |
17 |
Exhibit 3.1.1
Certificate of Amendment to Articles of Incorporation
For Nevada Profit Corporations
(Pursuant to NRS 78.385 and 78.390 - After Issuance of Stock)
1. Name of corporation: AppSoft Technologies, Inc.
2. The articles have been amended as follows: (provide article numbers, if available):
Section 4.1 of the Articles of Incorporation, titled “Designation, Amount, Original Issue Price and Par Value,” is deleted and replaced with the following:
4.1. Designation, Amount, Original Issue Price and Par Value . This series of Preferred Stock shall be designated as the Corporation’s Series A Cumulative Convertible Preferred Stock (the “ Series A Preferred Stock ”) and the number of shares so designated shall be 2,000,000 (which shall not be subject to increase without the consent of a majority of the holders of the Series A Preferred Stock). Each share of Series A Preferred Stock shall have an original issue price of $0.05 per share (the “ Original Issue Price ”).
Section 4.4.2 of the Articles of Incorporation, titled “Distribution of Remaining Assets,” is deleted and replaced with the following:
4.4.2. Distribution of Remaining Assets . In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, after the payment of all preferential amounts required to be paid to the holders of shares of Series A Preferred Stock, the remaining assets of the Corporation available for distribution to its stockholders shall be distributed among the holders of the shares of Junior Preferred Stock, if any, to the extent of their preference and thereafter among the holders of the shares of Common Stock, Series A Preferred Stock and any series of Preferred Stock entitled to participation rights, pro rata based on the number of shares held by each such holder, treating for this purpose all such securities as if they had been converted to Common Stock pursuant to the terms of these Articles immediately prior to such liquidation, dissolution or winding up of the Corporation. The aggregate amount which a holder of a share of Series A Preferred Stock is entitled to receive under Subsections 4.4.1 and 4.4.2 is hereinafter referred to as the “ Series A Liquidation Amount .”
Section 4.6.1(a) of the Articles of Incorporation, titled “Conversion Ratio,” is deleted and replaced with the following:
(a) Conversion Ratio . Each share of Series A Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and non-assessable shares of Common Stock as is determined by dividing the Series A Original Issue Price by the Series A Conversion Price (as defined below) in effect at the time of conversion. The “Series A Conversion Price” shall initially be equal to $0.005. Such initial Series A Conversion Price, and the rate at which shares of Series A Preferred Stock may be converted into shares of Common Stock, shall be subject to adjustment as provided in Section 4.6.4 hereof and shall be subject to the limitation set forth in Section 4.6.1(c) hereof.
3. The vote by which the stockholders holding shares in the corporation entitling them to exercise at least a majority of the voting power, or such greater proportion of the voting power as may be required in the case of a vote by classes or series, or as may be required by the provisions of the articles of incorporation* have voted in favor of the amendment is:
100% of common shares and 100% of preferred shares
4. Signature:
May 18, 2015 | |
Brian Kupchik, President |
2 |
Exhibit 3.2
BYLAWS
of
APPSOFT TECHNOLOGIES, INC.
(a Nevada corporation)
(Effective March 25, 2015)
ARTICLE I
OFFICES
Section 1.1. Principal Office. The principal office and place of business of AppSoft Technologies, Inc., a Nevada corporation (the “Corporation”), shall be established from time to time by resolution of the board of directors of the Corporation (the “Board of Directors”).
Section 1.2. Other Offices. Other offices and places of business either within or without the State of Nevada may be established from time to time by resolution of the Board of Directors or as the business of the Corporation may require. The street address of the Corporation’s registered agent is the registered office of the Corporation in Nevada.
ARTICLE II
STOCKHOLDERS
Section 2.1. Annual Meeting. The annual meeting of the stockholders of the Corporation shall be held on such date and at such time as may be designated from time to time by the Board of Directors. At the annual meeting, directors shall be elected and any other business may be transacted as may be properly brought before the meeting pursuant to these Bylaws (as may be amended from time to time, these “Bylaws”). Except as otherwise restricted by the Articles of Incorporation of the Corporation (as may be amended from time to time, the “Articles of Incorporation”) or applicable law, the Board of Directors may postpone, reschedule or cancel any annual meeting of stockholders.
Section 2.2. Special Meetings.
(a) Special meetings of the stockholders of the Corporation may be called only by the Board of Directors pursuant to a resolution adopted by a majority of the Whole Board. For the purposes of these Restated Bylaws, the term “Whole Board” shall mean the total number of authorized directors whether or not there exist any vacancies in previously authorized directorships. Special meetings of the stockholders may be held at such place within or without the State of Nevada as may be stated in such resolution. Except as otherwise restricted by the Articles of Incorporation or applicable law, the Board of Directors may postpone, reschedule or cancel any special meeting of stockholders.
(b) No business shall be acted upon at a special meeting of stockholders except as set forth in the notice of the meeting.
Section 2.3. Place of Meetings. Any meeting of the stockholders of the Corporation may be held at the Corporation’s registered office in the State of Nevada or at such other place in or out of the State of Nevada and the United States as may be designated in the notice of meeting. The Board of Directors may, in its sole discretion, determine that any meeting of the stockholders shall be held using, or shall be held solely by means of, electronic communications or other available technology in accordance with Section 2.14.
Section 2.4. Notice of Meetings; Waiver of Notice.
(a) The chief executive officer, if any, the president, any vice president, the secretary, any assistant secretary or any other individual designated by the Board of Directors shall sign and deliver or cause to be delivered written notice of any stockholders’ meeting to the stockholders entitled to vote at such meeting (unless applicable law requires notice be given to all stockholders of record, in which case such notice shall be given in accordance with such law) not less than ten days, but not more than sixty days, before the date of such meeting. The notice shall state the place, date and time of the meeting, the means of electronic communication, if any, by which the stockholders entitled to vote or the proxies thereof shall be deemed to be present and vote and, in the case of a special meeting, the purpose or purposes for which the meeting is called. The notice shall be delivered in accordance with, and shall contain or be accompanied by such additional information as may be required by, the Nevada Revised Statutes (as amended from time to time, the “ NRS ”), including, without limitation, NRS 78.370, 92A.120 or 92A.410.
(b) In the case of an annual meeting, subject to Section 2.13, any proper business may be presented for action, except that (i) if a proposed plan of merger, conversion or exchange is submitted to a vote, the notice of the meeting must state that the purpose, or one of the purposes, of the meeting is to consider the plan of merger, conversion or exchange and must contain or be accompanied by a copy or summary of the plan; and (ii) if a proposed action creating dissenter’s rights is to be submitted to a vote, the notice of the meeting must state that the stockholders are or may be entitled to assert dissenter’s rights under NRS 92A.300 to 92A.500, inclusive, and be accompanied by a copy of those sections.
(c) A copy of the notice of any meeting of stockholders shall be personally delivered or mailed postage prepaid to each stockholder of record entitled to vote at such meeting (unless applicable law requires notice be given to all stockholders of record, in which case such notice shall be given in accordance with such law), at the address appearing on the records of the Corporation. Upon mailing, service of the notice is complete, and the time of the notice begins to run from the date upon which the notice is deposited in the mail. If the address of any stockholder does not appear upon the records of the Corporation or is incomplete, it will be sufficient to address any notice to such stockholder at the registered office of the Corporation. Notwithstanding the foregoing and in addition thereto, any notice to stockholders given by the Corporation pursuant to Chapters 78 or 92A of the NRS, the Articles of Incorporation or these Bylaws may be given pursuant to the forms of electronic transmission listed herein, if such forms of transmission are consented to in writing by the stockholder receiving such electronically transmitted notice and such consent is filed by the secretary in the corporate records. Notice shall be deemed given (i) by facsimile when directed to a number consented to by the stockholder to receive notice, (ii) by e-mail when directed to an e-mail address consented to by the stockholder to receive notice, (iii) by posting on an electronic network together with a separate notice to the stockholder of the specific posting on the later of the specific posting or the giving of the separate notice or (iv) by any other electronic transmission as consented to by and when directed to the stockholder. The stockholder consent necessary to permit electronic transmission to such stockholder shall be deemed revoked and of no force and effect if (A) the Corporation is unable to deliver by electronic transmission two consecutive notices given by the Corporation in accordance with the stockholder’s consent and (B) the inability to deliver by electronic transmission becomes known to the secretary, assistant secretary, transfer agent or other agent of the Corporation responsible for the giving of notice.
(d) The written certificate of an individual signing a notice of meeting, setting forth the substance of the notice or having a copy thereof attached thereto, the date the notice was mailed or personally delivered to the requisite stockholders and the addresses to which the notice was mailed, shall be prima facie evidence of the manner and fact of giving such notice and, in the absence of fraud, an affidavit of the individual signing a notice of a meeting on behalf of the Corporation that the notice thereof has been given by a form of electronic transmission shall be prima facie evidence of the facts stated in the affidavit.
(e) Any stockholder may waive notice of any meeting by a signed writing or by transmission of an electronic record, either before or after the meeting. Such waiver of notice shall be deemed the equivalent of the giving of such notice.
2 |
Section 2.5. Determination of Stockholders of Record.
(a) For the purpose of determining the stockholders entitled to (i) notice of and to vote at any meeting of stockholders or any adjournment thereof, (ii) receive payment of any distribution or the allotment of any rights, or (iii) exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty days nor less than ten days before the date of such meeting, if applicable.
(b) If stockholder action by written consent is permitted under the Articles of Incorporation and these Bylaws, the Board of Directors may adopt a resolution prescribing a date upon which the stockholders of record entitled to give written consent must be determined. The date set by the Board of Directors must not precede or be more than ten days after the date the resolution setting such date is adopted by the Board of Directors. If the Board of Directors does not adopt a resolution setting a date upon which the stockholders of record entitled to give written consent must be determined, and (i) no prior action by the Board of Directors is required by the NRS, then the date shall be the first date on which a valid written consent is delivered to the Corporation in accordance with the NRS, the Articles of Incorporation and these Bylaws; or (ii) prior action by the Board of Directors is required by the NRS, then the date shall be the close of business on the date that the Board of Directors adopts the resolution.
(c) If no record date is fixed, the record date for determining stockholders: (i) entitled to notice of and to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; and (ii) for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at any meeting of stockholders shall apply to any postponement of any meeting of stockholders to a date not more than sixty days after the record date or to any adjournment of the meeting; provided that the Board of Directors may fix a new record date for the adjourned meeting and must fix a new record date if the meeting is adjourned to a date more than sixty days later than the meeting date set for the original meeting.
Section 2.6. Quorum; Adjourned Meetings.
(a) At any meeting of the stockholders, and unless the Articles of Incorporation provide for a different proportion, stockholders holding at least a majority of the voting power of the Corporation’s capital stock entitled to vote at such meeting, represented in person or by proxy (regardless of whether the proxy has authority to vote on all matters), are necessary to constitute a quorum for the transaction of business at such meeting. If, on any issue, voting by classes or series is required by the laws of the State of Nevada, the Articles of Incorporation or these Bylaws, at least a majority of the voting power, represented in person or by proxy (regardless of whether the proxy has authority to vote on all matters), within each such class or series is necessary to constitute a quorum of each such class or series.
(b) If a quorum is not represented, a majority of the voting power represented or the person presiding at the meeting may adjourn the meeting from time to time until a quorum shall be represented. At any such adjourned meeting at which a quorum shall be represented, any business may be transacted which might otherwise have been transacted at the adjourned meeting as originally called. When a stockholders’ meeting is adjourned to another time or place hereunder, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. However, if a new record date is fixed for the adjourned meeting, notice of the adjourned meeting must be given to each stockholder of record as of the new record date. The stockholders present at a duly convened meeting at which a quorum is present may continue to transact business until adjournment, notwithstanding the departure of enough stockholders to leave less than a quorum of the voting power.
Section 2.7. Voting.
(a) Unless otherwise provided in the Articles of Incorporation, or in the resolution providing for the issuance of preferred stock (or any series of preferred stock) adopted by the Board of Directors pursuant to authority expressly vested in it by the provisions of the Articles of Incorporation (including any certificate of designation relating to any series of preferred stock) if such authority is so vested, each stockholder of record, or such stockholder’s duly authorized proxy, shall be entitled to one (1) vote for each share of voting stock standing registered in such stockholder’s name at the close of business on the record date or the date established by the Board of Directors in connection with stockholder action by written consent, as applicable.
3 |
(b) Except as otherwise provided in these Bylaws, all votes with respect to shares (including pledged shares, unless in the pledge the pledgor has expressly empowered the pledgee to vote the stock) standing in the name of an individual at the close of business on the record date (or the date established by the Board of Directors in connection with stockholder action by written consent) shall be cast only by that individual or such individual’s duly authorized proxy. With respect to shares held by a representative of the estate of a deceased stockholder, or a guardian, conservator, custodian or trustee, even though the shares do not stand in the name of such holder, votes may be cast by such holder upon proof of such representative capacity. In the case of shares under the control of a receiver , the receiver may vote such shares even though the shares do not stand of record in the name of the receiver but only if and to the extent that the order of a court of competent jurisdiction which appoints the receiver contains the authority to vote such shares. If shares stand of record in the name of a minor, votes may be cast by the duly appointed guardian of the estate of such minor only if such guardian has provided the Corporation with written proof of such appointment.
(c) With respect to shares standing of record in the name of another corporation, partnership, limited liability company or other legal entity on the record date, votes may be cast: (i) in the case of a corporation, by such individual as the bylaws of such other corporation prescribe, by such individual as may be appointed by resolution of the board of directors of such other corporation or by such individual (including, without limitation, the officer making the authorization) authorized in writing to do so by the chairman of the Board of Directors, if any, the chief executive officer, if any, the president or any vice president of such corporation; and (ii) in the case of a partnership, limited liability company or other legal entity, by an individual representing such stockholder upon presentation to the Corporation of satisfactory evidence of his or her authority to do so.
(d) Notwithstanding anything to the contrary contained in these Bylaws and except for the Corporation’s shares held in a fiduciary capacity, the Corporation shall not vote, directly or indirectly, shares of its own stock owned or held by it, and such shares shall not be counted in determining the total number of outstanding shares entitled to vote.
(e) Any holder of shares entitled to vote on any matter may cast a portion of the votes in favor of such matter and refrain from casting the remaining votes or cast the same against the proposal. If such holder entitled to vote does vote any of such stockholder’s shares affirmatively and fails to specify the number of affirmative votes, it will be conclusively presumed that the holder is casting affirmative votes with respect to all shares held.
(f) With respect to shares standing of record in the name of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, spouses as community property, tenants by the entirety, voting trustees or otherwise and shares held by two or more persons (including proxy holders) having the same fiduciary relationship in respect to the same shares, votes may be cast in the following manner:
(i) If only one person votes, the vote of such person binds all.
(ii) If more than one person casts votes, the act of the majority so voting binds all.
(iii) If more than one person casts votes, but the vote is evenly split on a particular matter, the votes shall be deemed cast proportionately, as split.
(g) If a quorum is present, unless the Articles of Incorporation, these Bylaws, the NRS or other applicable law provide for a different proportion, action by the stockholders entitled to vote on a matter, other than the election of directors, is approved by and is the act of the stockholders if the number of votes cast in favor of the action exceeds the number of votes cast in opposition to the action, unless voting by classes or series is required for any action of the stockholders by the laws of the State of Nevada, the Articles of Incorporation or these Bylaws, in which case the number of votes cast in favor of the action by the voting power of each such class or series must exceed the number of votes cast in opposition to the action by the voting power of each such class or series.
4 |
(h) If a quorum is present, directors shall be elected by a plurality of the votes cast.
Section 2.8. Proxies. At any meeting of the stockholders, every stockholder entitled to vote may vote (i) in person or (ii) by proxy authorized by an instrument, in writing or by a transmission, as permitted by law and the Articles of Incorporation and filed in accordance with the procedure established for the meeting by the chairman of the meeting. Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission may be substituted or used in lieu of the original writing or transmission for any and all purposes under this Section 2.8 for which the original writing or transmission could be used, provided, however, that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.
Section 2.9. Stockholder Action Without A Meeting. Any action required or permitted to be taken at any annual or special meeting of stockholders of the Corporation may be taken without a meeting if, before or after the action, a written consent thereto is (a) signed by stockholders holding at least a majority of the voting power of the outstanding capital stock of the Corporation entitled to vote on such action (except that if a greater proportion of the voting power would be required for such an action at a meeting, then that proportion of written consents is required), and (b) delivered to the Corporation by delivery to its registered office in the State of Nevada, its principal place of business, or an officer or agent of the Corporation having custody of the books in which proceedings of meetings of stockholders are recorded. Any such delivery made to the Corporation’s registered office shall be made by hand, overnight courier or by certified or registered mail, return receipt requested. In no instance where action is duly and properly authorized by written consent need a meeting of stockholders be called or, unless otherwise required by applicable law or any certificate of designation relating to any series of preferred stock, notice given.
Section 2.10. Organization.
(a) Meetings of stockholders shall be presided over by the chairman of the Board of Directors, or, in the absence of the chairman of the Board of Directors, by the vice chairman of the Board of Directors, if any, or if there be no vice chairman or in the absence of the vice chairman, by the chief executive officer, if any, or if there be no chief executive officer or in the absence of the chief executive officer, by the president, or, in the absence of the president, or, in the absence of any of the foregoing persons, by a chairman designated by the Board of Directors, or by a chairman chosen at the meeting by the stockholders entitled to cast a majority of the votes which all stockholders present in person or by proxy are entitled to cast. The person acting as chairman of the meeting may delegate any or all of his or her authority and responsibilities as such to any director or officer of the Corporation present in person at the meeting. The secretary, or in the absence of the secretary an assistant secretary, shall act as secretary of the meeting, but in the absence of the secretary and any assistant secretary the chairman of the meeting may appoint any person to act as secretary of the meeting. The order of business at each such meeting shall be as determined by the chairman of the meeting. The chairman of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts and things as are necessary or desirable for the proper conduct of the meeting, including, without limitation, (i) the establishment of procedures for the maintenance of order and safety, (ii) limitation on the time allotted for consideration of each agenda item and for questions or comments by meeting participants, (iii) restrictions on entry to such meeting after the time prescribed for the commencement thereof and (iv) the opening and closing of the voting polls. The Board of Directors, in its discretion, or the chairman of the meeting, in his or her discretion, may require that any votes cast at such meeting shall be cast by written ballot.
(b) The chairman of the meeting may appoint one or more inspectors of elections. The inspector or inspectors may (i) ascertain the number of shares outstanding and the voting power of each; (ii) determine the number of shares represented at a meeting and the validity of proxies or ballots; (iii) count all votes and ballots; (iv) determine any challenges made to any determination made by the inspector(s); and (v) certify the determination of the number of shares represented at the meeting and the count of all votes and ballots.
6 |
(c) Only such persons who are nominated in accordance with the procedures set forth in Section 2.12 shall be eligible to be elected at any meeting of stockholders of the Corporation to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in Section 2.12. If any proposed nomination or business was not made or proposed in compliance with Section 2.12 (including proper notice under Section 2.13 and including whether the stockholder or beneficial owner, if any, on whose behalf the nomination or proposal is made solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies in compliance with such stockholder’s representation pursuant to clause (a)(iv)(D) of Section 2.13), then, unless otherwise provided in the Articles of Incorporation, the chairman of the meeting shall have the power to declare that such nomination shall be disregarded or that such proposed business shall not be transacted. If the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or proposed business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 2.10, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or authorized by a writing executed by such stockholder (or a reliable reproduction or electronic transmission of the writing) delivered to the Corporation prior to the making of such nomination or proposal at such meeting by such stockholder stating that such person is authorized to act for such stockholder as proxy at the meeting of stockholders.
Section 2.11. Consent to Meetings. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person objects at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called, noticed or convened and except that attendance at a meeting is not a waiver of any right to object to the consideration of matters not included in the notice, to the extent such notice is required, if such objection is expressly made at the time any such matters are presented at the meeting. Neither the business to be transacted at nor the purpose of any regular or special meeting of stockholders need be specified in any written waiver of notice or consent, except as otherwise provided in these Bylaws.
Section 2.12. Director Nominations and Business Conducted at Meetings of Stockholders.
(a) Except as otherwise provided in the Articles of Incorporation, nominations of persons for election to the Board of Directors and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders only (i) by or at the direction of the Board of Directors or the chairman of the Board of Directors, or (ii) by any stockholder of the Corporation who is entitled to vote on such matter at the meeting and who (A) has complied with the notice procedures set forth in Section 2.13 and (B) was a stockholder of record at the time such notice is delivered to the secretary of the Corporation.
(b) Except as otherwise provided in the Articles of Incorporation, nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (i) by or at the direction of the Board of Directors or the chairman of the Board of Directors, or (ii) by any stockholder of the Corporation who is entitled to vote on such matter at the meeting and who (A) has complied with the notice procedures set forth in Section 2.13 and (B) was a stockholder of record at the time such notice is delivered to the secretary of the Corporation.
7 |
Section 2.13 Advance Notice of Director Nominations and Stockholder Proposals by Stockholders.
(a) For nominations or other business to be properly brought before an annual meeting by a stockholder and for nominations to be properly brought before a special meeting by a stockholder in each case pursuant to Section 2.12, the stockholder of record must have given timely notice thereof in writing to the secretary of the Corporation, and, in the case of business other than nominations, such other business must be a proper matter for stockholder action. To be timely, a stockholder’s notice shall be delivered to the secretary at the principal executive offices of the Corporation not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of the preceding year’s annual meeting; provided that in the event that the date of the annual meeting is more than 30 days before or more than 70 days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which public announcement (as defined below) of the date of such meeting is first made by the Corporation. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. The notice must be provided by a stockholder of record and must set forth:
(i) as to each person whom the stockholder proposes to nominate for election or re-election as a director all information relating to such person that is (i) required by paragraphs (a), (e) and (f) of Item 401 of Regulation S-K adopted by the Securities and Exchange Commission, and (ii) required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected;
(ii) as to any other business that the stockholder proposes to bring before an annual meeting, a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the Bylaws, the language of the proposed amendment), the reasons for conducting such business at the meeting and any substantial interest (within the meaning of Item 5 of Schedule 14A under the Exchange Act) in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made;
(iii) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is made or the business is proposed: (A) the name and address of such stockholder, as they appear on the Corporation’s books, and the name and address of such beneficial owner, (B) the class and number of shares of stock of the Corporation which are owned of record by such stockholder and such beneficial owner as of the date of the notice, and a representation that the stockholder will notify the Corporation in writing within five business days after the record date for such meeting of the class and number of shares of stock of the Corporation owned of record by the stockholder and such beneficial owner as of the record date for the meeting, and (C) a representation that the stockholder intends to appear in person or by proxy at the meeting to propose such nomination or business;
8 |
(iv) as to the stockholder giving the notice or, if the notice is given on behalf of a beneficial owner on whose behalf the nomination is made or the business is proposed, as to such beneficial owner, and if such stockholder or beneficial owner is an entity, as to each director, executive, managing member or control person of such entity (any such person, a “control person”): (A) the class and number of shares of stock of the Corporation which are beneficially owned (as defined below) by such stockholder or beneficial owner and by any control person as of the date of the notice, and a representation that the stockholder will notify the Corporation in writing within five business days after the record date for such meeting of the class and number of shares of stock of the Corporation beneficially owned by such stockholder or beneficial owner and by any control person as of the record date for the meeting, (B) a description of any agreement, arrangement or understanding with respect to the nomination or other business between or among such stockholder or beneficial owner or control person and any other person, including without limitation any agreements that would be required to be disclosed pursuant to Item 5 or Item 6 of Exchange Act Schedule 13D (regardless of whether the requirement to file a Schedule 13D is applicable to the stockholder, beneficial owner or control person) and a representation that the stockholder will notify the Corporation in writing within five business days after the record date for such meeting of any such agreement, arrangement or understanding in effect as of the record date for the meeting, (C) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of the stockholder’s notice by, or on behalf of, such stockholder or beneficial owner and by any control person or any other person acting in concert with any of the foregoing, the effect or intent of which is to mitigate loss, manage risk or benefit from changes in the share price of any class of the Corporation’s stock, or maintain, increase or decrease the voting power of the stockholder or beneficial owner with respect to shares of stock of the Corporation, and a representation that the stockholder will notify the Corporation in writing within five business days after the record date for such meeting of any such agreement, arrangement or understanding in effect as of the record date for the meeting, (D) a representation whether the stockholder or the beneficial owner, if any, and any control person will engage in a solicitation with respect to the nomination or business and, if so, the name of each participant (as defined in Item 4 of Schedule 14A under the Exchange Act) in such solicitation and whether such person intends or is part of a group which intends to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding stock required to approve or adopt the business to be proposed (in person or by proxy) by the stockholder; and
(v) a certification that the stockholder giving the notice and the beneficial owner(s), if any, on whose behalf the nomination is made or the business is proposed, has or have complied with all applicable federal, state and other legal requirements in connection with such stockholder’s and/or each such beneficial owner’s acquisition of shares of capital stock or other securities of the Corporation and/or such stockholder’s and/or each such beneficial owner’s acts or omissions as a stockholder of the Corporation, including, without limitation, in connection with such nomination or proposal.
(b) The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as a director of the Corporation, including information relevant to a determination whether such proposed nominee can be considered an independent director.
(c) For purposes of Section 2.13(a), a “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or a comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act. For purposes of clause (a)(iv)(A) of this Section 2.13, shares shall be treated as “beneficially owned” by a person if the person beneficially owns such shares, directly or indirectly, for purposes of Section 13(d) of the Exchange Act and Regulations 13D and 13G thereunder or has or shares pursuant to any agreement, arrangement or understanding (whether or not in writing): (i) the right to acquire such shares (whether such right is exercisable immediately or only after the passage of time or the fulfillment of a condition or both), (ii) the right to vote such shares, alone or in concert with others and/or (iii) investment power with respect to such shares, including the power to dispose of, or to direct the disposition of, such shares.
(d) This Section 2.13 shall not apply to notice of a proposal to be made by a stockholder if the stockholder has notified the Corporation of his or her intention to present the proposal at an annual or special meeting only pursuant to and in compliance with Rule 14a-8 under the Exchange Act and such proposal has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for such meeting.
(e) If the stockholder does not provide the information required under clause (a)(iii)(B) and clauses (a)(iv)(A)-(C) of this Section 2.13 to the Corporation within the time frames specified, or if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or proposed business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. The chairman of the meeting shall have the power to determine whether notice of a nomination or of any business proposed to be brought before the meeting was properly made in accordance with the procedures set forth in this Section 2.13. Notwithstanding the foregoing provisions hereof, a stockholder shall also comply with all applicable requirements of the Act, and the rules and regulations thereunder with respect to the matters set forth herein.
9 |
Section 2.14. Meetings Through Electronic Communications. Stockholders may participate in a meeting of the stockholders by any means of electronic communications, videoconferencing, teleconferencing or other available technology permitted under the NRS (including, without limitation, a telephone conference or similar method of communication by which all individuals participating in the meeting can hear each other). If any such means are utilized, the Corporation shall, to the extent required under the NRS, implement reasonable measures to (a) verify the identity of each person participating through such means as a stockholder and (b) provide the stockholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to communicate, and to read or hear the proceedings of the meeting in a substantially concurrent manner with such proceedings. Participation in a meeting pursuant to this Section 2.14 constitutes presence in person at the meeting.
Section 2.15 Stock List. A complete list of stockholders entitled to vote at any meeting of the stockholders, arranged in alphabetical order for each class or series of the shares of capital stock of the Corporation and showing the address of each such stockholder and the number of shares registered in his or her name, shall be open to the examination of any such stockholder for a period of at least ten (10) days prior to the meeting in the manner provided by law.
The stock list shall also be open to the examination of any stockholder during the whole time of the meeting as provided by law. Such list shall presumptively determine the identity of the stockholders entitled to examine such stock list and to vote at the meeting and the number of shares held by each of them. Any alleged mistake in such list will be examined by the Corporation within thirty (30) days after being notified thereof and any mistake discovered will be corrected by the Corporation in due course, without affecting the aforementioned presumption.
ARTICLE III
DIRECTORS
Section 3.1. General Powers; Performance of Duties. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors, except as otherwise provided in Chapter 78 of the NRS or the Articles of Incorporation.
Section 3.2. Number, Tenure, and Qualifications. Except as otherwise provided in the Articles of Incorporation, the Board of Directors shall consist of at least one individual and not more than fifteen individuals, with the number of directors within the foregoing fixed minimum and maximum established and changed from time to time as provided by resolutions adopted by the Board of Directors. Each director shall hold office until his or her successor shall be elected or appointed and qualified or until his or her earlier death, retirement, disqualification, resignation or removal. No reduction of the number of directors shall have the effect of removing any director prior to the expiration of his or her term of office. No provision of this Section 3.2 shall restrict the right of the Board of Directors (or, to the extent permitted under the Articles of Incorporation, the stockholders) to fill vacancies or the right of the stockholders entitled to vote thereon to remove directors, each as provided in the Articles of Incorporation or these Bylaws.
Section 3.3. Chairman of the Board. The Board of Directors shall elect a chairman of the Board of Directors from the members of the Board of Directors, who shall preside at all meetings of the Board of Directors and stockholders at which he or she shall be present and shall have and may exercise such powers as may, from time to time, be assigned to him or her by the Board of Directors, these Bylaws or as provided by law.
Section 3.4. Vice Chairman of the Board. The Board of Directors may elect a vice chairman of the Board of Directors from the members of the Board of Directors who shall preside at all meetings of the Board of Directors and stockholders at which he or she shall be present and the chairman is not present and shall have and may exercise such powers as may, from time to time, be assigned to him or her by the Board of Directors, these Bylaws or as provided by law.
Section 3.5. Elections. The directors shall be elected in accordance with the Articles of Incorporation, these Bylaws and the NRS.
10 |
Section 3.6. Resignation and Removal of Directors. Any director may resign at any time upon notice given in writing or by electronic transmission to the Corporation at its principal executive office or to the Chairman of the Board, Chief Executive Officer, President or Secretary. Such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some other event. Subject to the rights of the holders of any series of Preferred Stock then outstanding, any director, or the entire Board of Directors, may be removed from office at any time only for cause and only by the affirmative vote of the holders of at least eighty percent (80%) of the voting power of all of the then outstanding shares of capital stock of the Corporation entitled to vote at an election of directors, voting together as a single class.
Section 3.7. Vacancies; Newly Created Directorships. Subject to the rights of the holders of any series of preferred stock then outstanding, newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause shall, unless otherwise required by law, by the Articles of Incorporation or by resolution of the Board of Directors, be filled only by a majority vote of the directors then in office even though less than a quorum, or by a sole remaining director, and not by the stockholders of the Corporation, and directors so chosen shall serve for a term expiring at the annual meeting of the stockholders at which the term of office of the class to which they have been chosen expires and until such director’s successor shall have been duly elected and qualified. No decrease in the authorized number of directors shall shorten the term of any incumbent director. In the event of a vacancy in the Board of Directors, the remaining directors, except as otherwise provided by law, the Articles of Incorporation or these Bylaws, may exercise the powers of the full Board of Directors until the vacancy is filled.
Section 3.8. Annual and Regular Meetings. Within five business days after the conclusion of the annual meeting of the stockholders or any special meeting of the stockholders at which directors are elected, the Board of Directors, including directors newly elected, shall hold its annual meeting without call or notice, other than this provision, to transact such business as may be necessary or appropriate. The Board of Directors may provide by resolution the place, date, and hour for holding regular meetings between annual meetings, and if the Board of Directors so provides with respect to a regular meeting, notice of such regular meeting shall not be required.
Section 3.9. Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board of Directors or the Chief Executive Officer, and shall be called by the Secretary if requested by a majority of the Whole Board, and shall be held at such place, or via the means of remote communications, if any, on such date, and at such time as the Secretary shall reasonably fix. Notice of the place, date, and time of each such special meeting shall be given to each director by whom it is not waived by mailing written notice not less than five (5) days before the meeting or orally, by telegraph, telex, cable, telecopy or electronic transmission given not less than twenty-four (24) hours before the meeting. Unless otherwise indicated in the notice thereof, any and all business may be transacted at a special meeting.
Section 3.10. Place of Meetings. Any regular or special meeting of the Board of Directors may be held at such place as the Board of Directors, or in the absence of such designation, as the notice calling such meeting, may designate. A waiver of notice signed by the directors may designate any place for the holding of such meeting.
Section 3.11. Notice of Meetings. Except as otherwise provided in Section 3.8, there shall be delivered to each director at the address appearing for him or her on the records of the Corporation, at least twenty-four hours before the time of such meeting, a copy of a written notice of any meeting (i) by delivery of such notice personally, (ii) by mailing such notice postage prepaid, (iii) by facsimile, (iv) by overnight courier or (v) by electronic transmission or electronic writing, including, without limitation, e-mail. If mailed to an address inside the United States, the notice shall be deemed delivered five business days following the date the same is deposited in the United States mail, postage prepaid. If mailed to an address outside the United States, the notice shall be deemed delivered seven business days following the date the same is deposited in the United States mail, postage prepaid. If sent via overnight courier, the notice shall be deemed delivered the business day following the delivery of such notice to the courier. If sent via facsimile, the notice shall be deemed delivered upon sender’s receipt of confirmation of the successful transmission. If sent by electronic transmission (including, without limitation, e-mail), the notice shall be deemed delivered when directed to the e-mail address of the director appearing on the records of the Corporation, and otherwise pursuant to the applicable provisions of NRS Chapter 75. If the address of any director is incomplete or does not appear upon the records of the Corporation it will be sufficient to address any notice to such director at the registered office of the Corporation. Any director may waive notice of any meeting, and the attendance of a director at a meeting and oral consent entered on the minutes of such meeting shall constitute waiver of notice of the meeting unless such director objects, prior to the transaction of any business, that the meeting was not lawfully called, noticed or convened. Attendance for the express purpose of objecting to the transaction of business thereat because the meeting was not properly called or convened shall not constitute presence or a waiver of notice for purposes hereof.
11 |
Section 3.12. Quorum; Adjourned Meetings.
(a) A majority of the directors in office is necessary to constitute a quorum for the transaction of business at any meeting of the Board of Directors.
(b) At any meeting of the Board of Directors where a quorum is not present, a majority of those present may adjourn, from time to time, until a quorum is present, and no notice of such adjournment shall be required. At any adjourned meeting where a quorum is present, any business may be transacted which could have been transacted at the meeting originally called.
Section 3.13. Manner of Acting. The affirmative vote of a majority of the directors present at a meeting at which a quorum is present is the act of the Board of Directors.
Section 3.14. Meetings Through Electronic Communications. Members of the Board of Directors or of any committee designated by the Board of Directors may participate in a meeting of the Board of Directors or such committee by any means of electronic communications, videoconferencing, teleconferencing or other available technology permitted under the NRS (including, without limitation, a telephone conference or similar method of communication by which all individuals participating in the meeting can hear each other). If any such means are utilized, the Corporation shall, to the extent required under the NRS, implement reasonable measures to (a) verify the identity of each person participating through such means as a director or member of the committee, as the case may be, and (b) provide the directors or members of the committee a reasonable opportunity to participate in the meeting and to vote on matters submitted to the directors or members of the committee, including an opportunity to communicate, and to read or hear the proceedings of the meeting in a substantially concurrent manner with such proceedings. Participation in a meeting pursuant to this Section 3.14 constitutes presence in person at the meeting.
Section 3.15. Action Without Meeting. Any action required or permitted to be taken at a meeting of the Board of Directors or of a committee thereof may be taken without a meeting if, before or after the action, a written consent thereto is signed by all of the members of the Board of Directors or the committee, except that such consent need not be signed by any director who is not required to sign pursuant to NRS 78.315(2). The written consent may be signed manually or electronically (or by any other means then permitted under the NRS), and may be so signed in counterparts, including, without limitation, facsimile or email counterparts, and shall be filed with the minutes of the proceedings of the Board of Directors or committee.
Section 3.16. Powers and Duties.
(a) Except as otherwise restricted by Chapter 78 of the NRS or the Articles of Incorporation, the Board of Directors has full control over the business and affairs of the Corporation. The Board of Directors may delegate any of its authority to manage, control or conduct the business of the Corporation to any standing or special committee, or to any officer or agent, and to appoint any persons to be agents of the Corporation with such powers, including the power to subdelegate, and upon such terms as it deems fit.
12 |
(b) The Board of Directors, in its discretion, or the chairman presiding at a meeting of stockholders, in his or her discretion, may submit any contract or act for approval or ratification at any annual meeting of the stockholders or any special meeting properly called and noticed for the purpose of considering any such contract or act, provided a quorum is present.
(c) The Board of Directors may, by resolution passed by a majority of the Board of Directors, designate one or more committees, each committee to consist of one or more of the directors of the Corporation, provided that the Board of Directors may also appoint additional natural persons who are not directors to serve on any committee. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Subject to applicable law and to the extent provided in the resolution of the Board of Directors, any such committee shall have and may exercise all the powers of the Board of Directors in the management of the business and affairs of the Corporation. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. The committees shall keep regular minutes of their proceedings and report the same to the Board of Directors when required.
Section 3.17. Compensation. The Board of Directors, without regard to personal interest, may establish the compensation of directors for services in any capacity. If the Board of Directors establishes the compensation of directors pursuant to this Section 3.17, such compensation is presumed to be fair to the Corporation unless proven unfair by a preponderance of the evidence.
Section 3.18. Organization. Meetings of the Board of Directors shall be presided over by the chairman of the Board of Directors, or in the absence of the chairman of the Board of Directors by the vice chairman, if any, or in his or her absence by a chairman chosen at the meeting. The secretary, or in the absence, of the secretary an assistant secretary, shall act as secretary of the meeting, but in the absence of the secretary and any assistant secretary, the chairman of the meeting may appoint any person to act as secretary of the meeting. The order of business at each such meeting shall be as determined by the chairman of the meeting.
ARTICLE IV
OFFICERS
Section 4.1. Election. The Board of Directors shall elect or appoint a president, a secretary and a treasurer or the equivalents of such officers. Such officers shall serve until their respective successors are elected and appointed and shall qualify or until their earlier resignation or removal. The Board of Directors may from time to time, by resolution, elect or appoint such other officers and agents as it may deem advisable, who shall hold office at the pleasure of the Board of Directors, and shall have such powers and duties and be paid such compensation as may be directed by the Board of Directors. Any individual may hold two or more offices.
Section 4.2. Removal; Resignation. Any officer or agent elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause. Any officer may resign at any time upon written notice to the Corporation. Any such removal or resignation shall be subject to the rights, if any, of the respective parties under any contract between the Corporation and such officer or agent.
Section 4.3. Vacancies. Any vacancy in any office because of death, resignation, removal or otherwise may be filled by the Board of Directors for the unexpired portion of the term of such office.
Section 4.4. Chief Executive Officer. The Board of Directors may elect a chief executive officer who, subject to the supervision and control of the Board of Directors, shall have the ultimate responsibility for the management and control of the business and affairs of the Corporation and perform such other duties and have such other powers which are delegated to him or her by the Board of Directors, these Bylaws or as provided by law.
13 |
Section 4.5. President. The president, subject to the supervision and control of the Board of Directors, shall in general actively supervise and control the business and affairs of the Corporation. The president shall keep the Board of Directors fully informed as the Board of Directors may request and shall consult the Board of Directors concerning the business of the Corporation. The president shall perform such other duties and have such other powers which are delegated and assigned to him or her by the Board of Directors, the chief executive officer, if any, these Bylaws or as provided by law. The president shall be the chief executive officer of the Corporation unless the Board of Directors shall elect or appoint different individuals to hold such positions.
Section 4.6. Vice Presidents. The Board of Directors may elect one or more vice presidents. In the absence or disability of the president, or at the president’s request, the vice president or vice presidents, in order of their rank as fixed by the Board of Directors, and if not ranked, the vice presidents in the order designated by the Board of Directors, or in the absence of such designation, in the order designated by the president, shall perform all of the duties of the president, and when so acting, shall have all the powers of, and be subject to all the restrictions on the president. Each vice president shall perform such other duties and have such other powers which are delegated and assigned to him or her by the Board of Directors, the president, these Bylaws or as provided by law.
Section 4.7. Secretary. The secretary shall attend all meetings of the stockholders, the Board of Directors and any committees thereof, and shall keep, or cause to be kept, the minutes of proceedings thereof in books provided for that purpose. He or she shall keep, or cause to be kept, a register of the stockholders of the Corporation and shall be responsible for the giving of notice of meetings of the stockholders, the Board of Directors and any committees, and shall see that all notices are duly given in accordance with the provisions of these Bylaws or as required by law. The secretary shall be custodian of the corporate seal, if any, the records of the Corporation, the stock certificate books, transfer books and stock ledgers, and such other books and papers as the Board of Directors or any appropriate committee may direct. The secretary shall perform all other duties commonly incident to his or her office and shall perform such other duties which are assigned to him or her by the Board of Directors, the chief executive officer, if any, the president, these Bylaws or as provided by law.
Section 4.8. Assistant Secretaries. An assistant secretary shall, at the request of the secretary, or in the absence or disability of the secretary, perform all the duties of the secretary. He or she shall perform such other duties as are assigned to him or her by the Board of Directors, the chief executive officer, if any, the president, these Bylaws or as provided by law.
Section 4.9. Treasurer. The treasurer, subject to the order of the Board of Directors, shall have the care and custody of, and be responsible for, all of the money, funds, securities, receipts and valuable papers, documents and instruments of the Corporation, and all books and records relating thereto. The treasurer shall keep, or cause to be kept, full and accurate books of accounts of the Corporation’s transactions, which shall be the property of the Corporation, and shall render financial reports and statements of condition of the Corporation when so requested by the Board of Directors, the chairman of the Board of Directors, if any, the chief executive officer, if any, or the president. The treasurer shall perform all other duties commonly incident to his or her office and such other duties as may, from time to time, be assigned to him or her by the Board of Directors, the chief executive officer, if any, the president, these Bylaws or as provided by law. The treasurer shall, if required by the Board of Directors, give bond to the Corporation in such sum and with such security as shall be approved by the Board of Directors for the faithful performance of all the duties of the treasurer and for restoration to the Corporation, in the event of the treasurer’s death, resignation, retirement or removal from office, of all books, records, papers, vouchers, money and other property in the treasurer’s custody or control and belonging to the Corporation. The expense of such bond shall be borne by the Corporation. If a chief financial officer of the Corporation has not been appointed, the treasurer may be deemed the chief financial officer of the Corporation.
14 |
Section 4.10. Assistant Treasurers. An assistant treasurer shall, at the request of the treasurer, or in the absence or disability of the treasurer, perform all the duties of the treasurer. He or she shall perform such other duties which are assigned to him or her by the Board of Directors, the chief executive officer, if any, the president, the treasurer, these Bylaws or as provided by law. The Board of Directors may require an assistant treasurer to give a bond to the Corporation in such sum and with such security as it may approve, for the faithful performance of the duties of the assistant treasurer, and for restoration to the Corporation, in the event of the assistant treasurer’s death, resignation, retirement or removal from office, of all books, records, papers, vouchers, money and other property in the assistant treasurer’s custody or control and belonging to the Corporation. The expense of such bond shall be borne by the Corporation.
Section 4.11. Execution of Negotiable Instruments, Deeds and Contracts. All (i) checks, drafts, notes, bonds, bills of exchange, and orders for the payment of money of the Corporation, (ii) deeds, mortgages, proxies, powers of attorney and other written contracts, documents, instruments and agreements to which the Corporation shall be a party and (iii) assignments or endorsements of stock certificates, registered bonds or other securities owned by the Corporation shall be signed in the name of the Corporation by such officers or other persons as the Board of Directors may from time to time designate. The Board of Directors may authorize the use of the facsimile signatures of any such persons. Any officer of the Corporation shall be authorized to attend, act and vote, or designate another officer or an agent of the Corporation to attend, act and vote, at any meeting of the owners of any entity in which the Corporation may own an interest or to take action by written consent in lieu thereof. Such officer or agent, at any such meeting or by such written action, shall possess and may exercise on behalf of the Corporation any and all rights and powers incident to the ownership of such interest.
ARTICLE V
CAPITAL STOCK
Section 5.1. Issuance. Shares of the Corporation’s authorized capital stock shall, subject to any provisions or limitations of the laws of the State of Nevada, the Articles of Incorporation or any contracts or agreements to which the Corporation may be a party, be issued in such manner, at such times, upon such conditions and for such consideration as shall be prescribed by the Board of Directors.
Section 5.2. Stock Certificates and Uncertificated Shares.
(a) Every holder of stock in the Corporation shall be entitled to have a certificate signed by or in the name of the Corporation by (i) the chief executive officer, if any, the president, or a vice president, and (ii) the secretary, an assistant secretary, the treasurer or the chief financial officer, if any, of the Corporation (or any other two officers or agents so authorized by the Board of Directors), certifying the number of shares of stock owned by him, her or it in the Corporation; provided that the Board of Directors may authorize the issuance of uncertificated shares of some or all of any or all classes or series of the Corporation’s stock. Any such issuance of uncertificated shares shall have no effect on existing certificates for shares until such certificates are surrendered to the Corporation, or on the respective rights and obligations of the stockholders. Whenever any such certificate is countersigned or otherwise authenticated by a transfer agent or a transfer clerk and by a registrar (other than the Corporation), then a facsimile of the signatures of any corporate officers or agents, the transfer agent, transfer clerk or the registrar of the Corporation may be printed or lithographed upon the certificate in lieu of the actual signatures. In the event that any officer or officers who have signed, or whose facsimile signatures have been used on any certificate or certificates for stock cease to be an officer or officers because of death, resignation or other reason, before the certificate or certificates for stock have been delivered by the Corporation, the certificate or certificates may nevertheless be adopted by the Corporation and be issued and delivered as though the person or persons who signed the certificate or certificates, or whose facsimile signature or signatures have been used thereon, had not ceased to be an officer or officers of the Corporation.
(b) Within a reasonable time after the issuance or transfer of uncertificated shares, the Corporation shall send to the registered owner thereof a written statement certifying the number and class (and the designation of the series, if any) of the shares owned by such stockholder in the Corporation and any restrictions on the transfer or registration of such shares imposed by the Articles of Incorporation, these Bylaws, any agreement among stockholders or any agreement between the stockholders and the Corporation, and, at least annually thereafter, the Corporation shall provide to such stockholders of record holding uncertificated shares, a written statement confirming the information contained in such written statement previously sent. Except as otherwise expressly provided by the NRS, the rights and obligations of the stockholders of the Corporation shall be identical whether or not their shares of stock are represented by certificates.
15 |
(c) Each certificate representing shares shall state the following upon the face thereof: the name of the state of the Corporation’s organization; the name of the person to whom issued; the number and class of shares and the designation of the series, if any, which such certificate represents; the par value of each share, if any, represented by such certificate or a statement that the shares are without par value. Certificates of stock shall be in such form consistent with law as shall be prescribed by the Board of Directors. No certificate shall be issued until the shares represented thereby are fully paid. In addition to the foregoing, all certificates evidencing shares of the Corporation’s stock or other securities issued by the Corporation shall contain such legend or legends as may from time to time be required by the NRS or such other federal, state or local laws or regulations then in effect.
Section 5.3. Surrendered; Lost or Destroyed Certificates. All certificates surrendered to the Corporation, except those representing shares of treasury stock, shall be canceled and no new certificate shall be issued until the former certificate for a like number of shares shall have been canceled, except that in case of a lost, stolen, destroyed or mutilated certificate, a new one may be issued therefor. However, any stockholder applying for the issuance of a stock certificate in lieu of one alleged to have been lost, stolen, destroyed or mutilated shall, prior to the issuance of a replacement, provide the Corporation with his, her or its affidavit of the facts surrounding the loss, theft, destruction or mutilation and, if required by the Board of Directors, an indemnity bond in an amount not less than twice the current market value of the stock, and upon such terms as the treasurer or the Board of Directors shall require which shall indemnify the Corporation against any loss, damage, cost or inconvenience arising as a consequence of the issuance of a replacement certificate.
Section 5.4. Replacement Certificate. When the Articles of Incorporation are amended in any way affecting the statements contained in the certificates for outstanding shares of capital stock of the Corporation or it becomes desirable for any reason, in the discretion of the Board of Directors, including, without limitation, the merger of the Corporation with another Corporation or the conversion or reorganization of the Corporation, to cancel any outstanding certificate for shares and issue a new certificate therefor conforming to the rights of the holder, the Board of Directors may order any holders of outstanding certificates for shares to surrender and exchange the same for new certificates within a reasonable time to be fixed by the Board of Directors. The order may provide that a holder of any certificate(s) ordered to be surrendered shall not be entitled to vote, receive distributions or exercise any other rights of stockholders of record until the holder has complied with the order, but the order operates to suspend such rights only after notice and until compliance.
Section 5.5. Transfer of Shares. No transfer of stock shall be valid as against the Corporation except on surrender and cancellation of any certificate(s) therefor accompanied by an assignment or transfer by the registered owner made either in person or under assignment. Whenever any transfer shall be expressly made for collateral security and not absolutely, the collateral nature of the transfer shall be reflected in the entry of transfer in the records of the Corporation.
Section 5.6. Transfer Agent; Registrars. The Board of Directors may appoint one or more transfer agents, transfer clerks and registrars of transfer and may require all certificates for shares of stock to bear the signature of such transfer agents, transfer clerks and/or registrars of transfer.
Section 5.7. Miscellaneous. The Board of Directors shall have the power and authority to make such rules and regulations not inconsistent herewith as it may deem expedient concerning the issue, transfer, and registration of certificates for shares of the Corporation’s stock.
Section 5.8. Inapplicability of Controlling Interest Statutes. Notwithstanding any other provision in the Articles of Incorporation or these Bylaws to the contrary, and in accordance with the provisions of NRS 78.378, the provisions of NRS 78.378 to 78.3793, inclusive, or any successor statutes, relating to acquisitions of controlling interests in the Corporation, shall not apply to the Corporation or to any acquisition of any shares of the Corporation’s capital stock.
16 |
ARTICLE VI
DISTRIBUTIONS
Distributions may be declared, subject to the provisions of the laws of the State of Nevada and the Articles of Incorporation, by the Board of Directors and may be paid in money, shares of corporate stock. property or any other medium not prohibited under applicable law. The Board of Directors may fix in advance a record date, in accordance with and as provided in Section 2.5, prior to the distribution for the purpose of determining stockholders entitled to receive any distribution.
ARTICLE VII
RECORDS AND REPORTS; CORPORATE SEAL; FISCAL YEAR
Section 7.1. Records. All original records of the Corporation, shall be kept at the principal office of the Corporation by or under the direction of the secretary or at such other place or by such other person as may be prescribed by these Bylaws or the Board of Directors.
Section 7.2. Corporate Seal. The Board of Directors may, by resolution, authorize a seal, and the seal may be used by causing it, or a facsimile, to be impressed or affixed or reproduced or otherwise. Except when otherwise specifically provided in these Bylaws, any officer of the Corporation shall have the authority to affix the seal to any document requiring it.
Section 7.3. Fiscal Year-End. The fiscal year-end of the Corporation shall be such date as may be fixed from time to time by resolution of the Board of Directors.
ARTICLE VIII
INDEMNIFICATION
Section 8.1. Indemnification and Insurance.
(a) Indemnification of Directors and Officers.
(i) For purposes of this Article, (A) “Indemnitee” shall mean each director or officer who was or is a party to, or is threatened to be made a party to, or is otherwise involved in, any Proceeding (as hereinafter defined), by reason of the fact that he or she is or was a director, officer, employee or agent (including, without limitation, as a trustee, fiduciary, administrator or manager) of the Corporation or any predecessor entity thereof, or is or was serving in any capacity at the request of the Corporation as a director, officer, employee or agent (including, without limitation, as a trustee, fiduciary, administrator, partner, member or manager) of, or in any other capacity for, another corporation or any partnership, joint venture, limited liability company, trust, or other enterprise; and (B) “Proceeding” shall mean any threatened, pending, or completed action, suit or proceeding (including, without limitation, an action, suit or proceeding by or in the right of the Corporation), whether civil, criminal, administrative, or investigative.
(ii) Each Indemnitee shall be indemnified and held harmless by the Corporation to the fullest extent permitted by the laws of the State of Nevada, against all expense, liability and loss (including, without limitation, attorneys’ fees, judgments, fines, taxes, penalties, and amounts paid or to be paid in settlement) reasonably incurred or suffered by the Indemnitee in connection with any Proceeding; provided that such Indemnitee either is not liable pursuant to NRS 78.138 or acted in good faith and in a manner such Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to any Proceeding that is criminal in nature, had no reasonable cause to believe that his or her conduct was unlawful. The termination of any Proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, does not, of itself, create a presumption that the Indemnitee is liable pursuant to NRS 78.138 or did not act in good faith and in a manner in which he or she reasonably believed to be in or not opposed to the best interests of the Corporation, or that, with respect to any criminal proceeding he or she had reasonable cause to believe that his or her conduct was unlawful. The Corporation shall not indemnify an Indemnitee for any claim, issue or matter as to which the Indemnitee has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the Corporation or for any amounts paid in settlement to the Corporation, unless and only to the extent that the court in which the Proceeding was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the Indemnitee is fairly and reasonably entitled to indemnity for such amounts as the court deems proper. Except as so ordered by a court and for advancement of expenses pursuant to this Section, indemnification may not be made to or on behalf of an Indemnitee if a final adjudication establishes that his or her acts or omissions involved intentional misconduct, fraud or a knowing violation of law and was material to the cause of action. Notwithstanding anything to the contrary contained in these Bylaws, no director or officer may be indemnified for expenses incurred in defending any threatened, pending, or completed action, suit or proceeding (including without limitation, an action, suit or proceeding by or in the right of the Corporation), whether civil, criminal, administrative or investigative, that such director or officer incurred in his or her capacity as a stockholder.
17 |
(iii) Indemnification pursuant to this Section shall continue as to an Indemnitee who has ceased to be a director or officer of the Corporation or who has ceased to serve, at the request of the Corporation, as a director, officer, employee, agent, trustee, fiduciary, administrator, partner, member or manager of, or in any other capacity for, another corporation or any partnership, joint venture, limited liability company, trust, or other enterprise, and such indemnification shall inure to the benefit of such Indemnitee’s heirs, executors and administrators.
(iv) The expenses of Indemnitees must be paid by the Corporation or through insurance purchased and maintained by the Corporation or through other financial arrangements made by the Corporation, as such expenses are incurred and in advance of the final disposition of the Proceeding, upon receipt of an undertaking by or on behalf of such Indemnitee to repay the amount if it is ultimately determined by a court of competent jurisdiction that he or she is not entitled to be indemnified by the Corporation. To the extent that an Indemnitee is successful on the merits or otherwise in defense of any Proceeding, or in the defense of any claim, issue or matter therein, the Corporation shall indemnify him or her against expenses, including attorneys’ fees, actually and reasonably incurred in by him or her in connection with the defense.
(b) Indemnification of Employees and Other Persons. The Corporation may, by action of its Board of Directors and to the extent provided in such action, indemnify employees and other persons as though they were Indemnitees.
(c) Non-Exclusivity of Rights. The rights to indemnification provided in this Article VIII shall not be exclusive of any other rights that any person may have or hereafter acquire under any statute, provision of the Articles of Incorporation or these Bylaws, agreement, vote of stockholders or directors, or otherwise.
(d) Insurance. The Corporation may purchase and maintain insurance or make other financial arrangements on behalf of any Indemnitee for any liability asserted against him or her and liability and expenses incurred by him or her in his or her capacity as a director, officer, employee, member, managing member or agent, or arising out of his or her status as such, whether or not the Corporation has the authority to indemnify him or her against such liability and expenses.
(e) Other Financial Arrangements. The other financial arrangements which may be made by the Corporation may include the following (i) the creation of a trust fund; (ii) the establishment of a program of self-insurance; (iii) the securing of its obligation of indemnification by granting a security interest or other lien on any assets of the Corporation; and (iv) the establishment of a letter of credit, guarantee or surety. No financial arrangement made pursuant to this subsection may provide protection for a person adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable for intentional misconduct, fraud, or a knowing violation of law, except with respect to advancement of expenses or indemnification ordered by a court.
(f) Other Matters Relating to Insurance or Financial Arrangements. Any insurance or other financial arrangement made on behalf of a person pursuant to this Section 8.1 may be provided by the Corporation or any other person approved by the Board of Directors, even if all or part of the other person’s stock or other securities is owned by the Corporation. In the absence of fraud, (i) the decision of the Board of Directors as to the propriety of the terms and conditions of any insurance or other financial arrangement made pursuant to this Section 8.1 and the choice of the person to provide the insurance or other financial arrangement is conclusive; and (ii) the insurance or other financial arrangement is not void or voidable and does not subject any director approving it to personal liability for his action; even if a director approving the insurance or other financial arrangement is a beneficiary of the insurance or other financial arrangement.
18 |
Section 8.2. Amendment. The provisions of this Article VIII relating to indemnification shall constitute a contract between the Corporation and each of its directors and officers which may be modified as to any director or officer only with that person’s consent or as specifically provided in this Section 8.2. Notwithstanding any other provision of these Bylaws relating to their amendment generally, any repeal or amendment of this Article VIII which is adverse to any director or officer shall apply to such director or officer only on a prospective basis, and shall not limit the rights of an Indemnitee to indemnification with respect to any action or failure to act occurring prior to the time of such repeal or amendment. Notwithstanding any other provision of these Bylaws (including, without limitation, Article X), no repeal or amendment of these Bylaws shall affect any or all of this Article VIII so as to limit or reduce the indemnification in any manner unless adopted by (i) the unanimous vote of the directors of the Corporation then serving, or (ii) the stockholders as set forth in Article X; provided that no such amendment shall have a retroactive effect inconsistent with the preceding sentence.
ARTICLE IX
CHANGES IN NEVADA LAW
References in these Bylaws to the laws of the State of Nevada or the NRS or to any provision thereof shall be to such law as it existed on the date these Bylaws were adopted or as such law thereafter may be changed; provided that (i) in the case of any change which expands the liability of directors or officers or limits the indemnification rights or the rights to advancement of expenses which the Corporation may provide in Article VIII, the rights to limited liability, to indemnification and to the advancement of expenses provided in the Articles of Incorporation and/or these Bylaws shall, to the extent permitted by law, continue as in effect prior to such change; and (ii) if such change permits the Corporation, without the requirement of any further action by stockholders or directors, to limit further the liability of directors or limit further the liability of officers or to provide broader indemnification rights or rights to the advancement of expenses than the Corporation was permitted to provide prior to such change, then liability thereupon shall be so limited and the rights to indemnification and the advancement of expenses shall be so broadened to the extent permitted by law.
ARTICLE X
MISCELLANEOUS
Section 10.1. Facsimile Signatures. In addition to the provisions specifically authorizing use of facsimile signatures in these Bylaws, facsimile signatures of any officer or officers of the Corporation may be used whenever and as authorized by the Board of Directors or a committee thereof.
Section 10.2. Reliance upon Books, Reports and Records. Without limitation of any provision of the NRS (including NRS 78.138), each director of the Corporation, each member of any committee designated by the Board of Directors, and each officer of the Corporation shall, in the performance of his or her duties, be entitled to rely, and be fully protected in relying upon the books of account or other records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of its agents, officers or employees, or committees of the Board of Directors, or by any other person as to matters which such director, committee member or officer reasonably believes are within such other person’s professional or expert competence, but a director or officer is not entitled to rely on such information, opinions, reports, books of account or statements if the director or officer has knowledge concerning the matter in question that would cause reliance thereon to be unwarranted.
Section 10.3. Time Periods. In applying any provision of these Bylaws which requires that an act be done or not be done during a period of a specified number of days prior and/or following an event, calendar days shall be used, the day of the doing of the act shall be excluded, and the day of the event shall be included.
19 |
Section10.4. Pronouns. Whenever the context may require, any pronouns used in these Bylaws shall include the corresponding masculine, feminine or neuter forms.
Section 10.5. Interpretation. The Board of Directors shall have the power to interpret all of the terms and provisions of these Bylaws, which interpretation shall be conclusive.
ARTICLE II
AMENDMENT OR REPEAL
Except as otherwise provided in the Articles of Incorporation: (a) the Board of Directors is expressly authorized (in furtherance and not in limitation of the powers conferred by statute) to amend, repeal or rescind any provision of these Bylaws or to adopt new bylaws; and/or (b) the affirmative vote of the holders of at least a majority of the outstanding voting power of the Class A Common Stock (as defined in the Articles of Incorporation) shall be required in order for the stockholders of the Corporation to amend, repeal or rescind, in whole or in part, any provision of these Bylaws (including, without limitation, this Article X) or to adopt any new provision of these Bylaws.
20 |
Exhibit 10.1
AGREEMENT
This Agreement (this “ Agreement ”) is made and entered into this 7 day of April, 2015 by and between Ventureo, LLC, a New York limited liability company (“ Ventureo ”), and AppSoft Technologies, Inc., a Nevada corporation (the “ Company ”).
RECITALS:
WHEREAS, Ventureo desires to acquire 2,000,000 shares of the Company’s Series A Cumulative Convertible Preferred Stock (the “ Shares ”) in consideration of the payment of $50,000.00 and the transfer and assignment of a portfolio of mobile applications comprising the titles identified on Schedule A hereto (the “ Portfolio ”); and
WHEREAS, the Company desires to sell the Shares to Ventureo in consideration of the cash payment and transfer and assignment of the Portfolio; and
WHEREAS, as of the date of the date of this Agreement, Ventureo has furnished the Company with an aggregate of $10,292.47, which sum shall be credited against the cash portion of the purchase price to be paid by Ventureo for the Shares.
NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement, and intending to be legally bound hereby, the parties agree as follows:
ARTICLE 1
PURCHASE AND SALE
1.1. Purchase and Sale; Consideration.
(a) Upon the terms and subject to the conditions set forth in this Agreement the Company hereby sells and issues to Ventureo the Shares and Ventureo hereby (i) tenders the sum $39,707.53 ($50,000.00 less $10,292.47 being the sum delivered to the Company or on the Company’s behalf prior to the date of this Agreement and (ii) sells, transfers, assigns and delivers, to the fullest extent permitted by applicable law, to the Company all of its rights, title, and interest in and to the Portfolio free and clear of any Encumbrance (as defined in Section 2.3 , below).
(b) Upon the terms and subject to the conditions of this Agreement, and in full consideration of the sale of the Portfolio and the payment of the cash, the Company hereby issues to Ventureo 2,000,000 shares of Series A Cumulative Convertible Preferred Stock; having the voting powers, designations, preferences, and relative, participating, optional, and other special rights, and the qualifications, limitations, or restrictions rights, set forth in the Company’s Articles of Incorporation, a copy of which is attached as Exhibit A hereto (“ Articles of Incorporation ”).
1.2. Additional Actions. If, at any time after the date of this Agreement, the Company shall consider in its reasonable judgment that any further bill of sale, assignment, agreement, document, instrument or assurance in law or any other things are necessary or desirable to carry out the provisions of this Agreement, then Ventureo shall execute and deliver, upon request, any instruments or assurances, and do all other things necessary or proper to carry out the provisions of this Agreement.
ARTICLE 2
REPRESENTATIONS, WARRANTIES AND COVENANTS OF VENTUREO
Ventureo hereby represents, warrants and covenants to the Company as follows:
2.1. Organization; Existence. Ventureo is a limited liability company duly organized, validly existing and in good standing under the Laws (as hereafter defined) of the State of New York, with all requisite limited liability company power and authority to own its properties and assets and to conduct its business as presently conducted.
2.2. Authorization, Enforcement; Validity. Ventureo (i) has all necessary limited liability company power and authority to execute and deliver this Agreement and to consummate the transactions described herein, (ii) has duly authorized by all necessary action the execution, delivery and performance of this Agreement and the consummation of the transactions described herein and (iii) warrants that no other action is necessary by it to authorize the execution and delivery of this Agreement and the consummation of the transactions described in this Agreement. This Agreement has been duly executed and delivered by Ventureo and is the valid and binding obligation of Ventureo enforceable against it in accordance with its terms, except as such enforcement is limited by general equitable principles, or by bankruptcy, insolvency and other similar Laws affecting the enforcement of creditors rights generally.
2.3. No Conflicts. The execution, delivery and performance by Ventureo of this Agreement will not, directly or indirectly, conflict with or result in any violation of or constitute a breach of any of the terms or provisions of, or result in the acceleration of any obligation under, or constitute a default under any provisions of: (a) the certificate of formation or limited liability company operating agreement of Ventureo, (b) any lien, encumbrance, security interest, pledge, mortgage, charge, other claim, bond, indenture, agreement, contract, franchise license, permit or other instrument or obligation (“ Encumbrances ”) to which Ventureo is a party or is subject or by which any of its assets or properties may be bound; (c) any applicable laws, statutes, ordinances, rules or regulations promulgated by a governmental authority, orders of a governmental authority, judicial decisions, decisions of arbitrators or determinations of any governmental authority or court (“ Laws ”); or (d) any material provision of any material contract to which Ventureo is a party or by which its assets are bound.
2.4. Consents. Ventureo is not required to obtain any consent, approval, authorization, declaration of permit of, action by, filing with, notification to or order of any governmental entity or any other Person (as hereafter defined) in order for it to execute, deliver or perform any of its obligations under or contemplated by this Agreement. For purposes of this Agreement, the term “ Person ” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
2 |
2.5. Title to the Portfolio. Ventureo: (i) is the sole owner of all right, title, and interest in and to the Portfolio free and clear of any Encumbrances; (ii) has not assigned, transferred, licensed, pledged, or otherwise encumbered any portion of the Portfolio or agreed to do so; and (iii) is not aware of any violation, infringement, or misappropriation of any third party’s rights (or any claim thereof) of any mobile application included in the Portfolio. Upon the consummation of the transactions described in this Agreement, the Company will acquire good and marketable title in and to the Portfolio and each mobile application title comprising the Portfolio free and clear of any Encumbrances.
2.6. Exemption from Registration. Ventureo acknowledges and understands that the offer and sale of the Shares issuable to the Ventureo under this Agreement are intended to be exempt from registration under the Securities Act and applicable state securities laws in reliance on exemptions from registration provided under the Securities Act of 1933, as amended (the “ Securities Act ”) and exemptions under applicable state securities laws.
2.7. Accredited Investor. Ventureo confirms that all of its members are “accredited investors” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act and each such member shall submit to the Company such further assurances of such status as may be reasonably requested by the Company.
2.8. Own Account. Ventureo is acquiring the Shares for its own account and not with a view to or for distributing or reselling such Shares or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Shares in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other Persons to distribute or regarding the distribution of such Shares (this representation and warranty not limiting such Ventureo’s right to sell the Shares in compliance with applicable federal and state securities laws) in violation of the Securities Act or any applicable state securities law.
2.9. Experience of Ventureo. Ventureo, through its manager, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment. Ventureo is able to bear the economic risk of an investment in the Shares and, at the present time, is able to afford a complete loss of such investment.
2.10. Information. The manager of Ventureo has been granted the opportunity to ask questions of and receive answers from representatives of the Company concerning the terms and conditions of this Agreement and the business of the Company and to obtain any additional information concerning the Company or the Shares as the manager of Ventureo deemed necessary in connection with Ventureo’s decision to purchase the Shares.
2.11. Acknowledgment of Non-Registration of Shares; Restricted Securities. Ventureo acknowledges and agrees that (i) the Shares have not been registered under the Securities Act or the securities laws of any state and that the issuance of the Shares is being effected in reliance upon an exemption from registration afforded under Section 4(2) of the Securities Act for transactions by an issuer not involving a public offering and (ii) the Shares are “restricted securities” under the Securities Act because the Shares are being acquired in a transaction not involving a public offering and, accordingly, such Shares may not be resold without registration under the Securities Act or applicable state securities laws or the existence of an exemption therefrom. Ventureo represents that it is familiar with Rule 144 promulgated under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.
3 |
2.12. Legends; Transfer Restrictions.
(a) Ventureo acknowledges and agrees that the certificates evidencing the Shares and any shares of common stock of the Company issuable upon conversion of the Shares (“ Conversion Shares ”) will bear the following legend or one that is substantially similar to the following legend:
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
(b) Ventureo will not transfer any or all of the Shares or the Conversion Shares absent an effective registration statement under the Securities Act and applicable state securities law covering the disposition of such securities, without first providing the Company with an opinion of counsel to the effect that such transfer will be exempt from the registration and the prospectus delivery requirements of the Securities Act and the registration or qualification requirements of any applicable state securities laws.
2.13. No Public Market. Ventureo understands and acknowledges that no public market now exists for any of the securities issued by the Company and that the Company has made no assurances that a public market will ever exist for the Company’s securities.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Ventureo:
3.1. Organization and Qualification. The Company is duly incorporated, validly existing and in good standing under the laws of the State of Nevada, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. The Company is not in violation or default of any of the provisions of its articles of incorporation or bylaws. The Company is duly qualified to do business as a foreign corporation and is in good standing under the laws of each state or other jurisdiction in which either the ownership or use of the properties owned or used by it, or the nature of the activities conducted by it, requires such qualification and the failure to be so qualified would have a material adverse effect on the business or financial condition of the Company..
4 |
3.2. Authorization; Enforcement; Validity. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of each of this Agreement by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Company and no further corporate action is required by the Company or the Company’s Board of Directors in connection therewith. This Agreement has been duly executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforcement is limited by general equitable principles, or by bankruptcy, insolvency and other similar Laws affecting the enforcement of creditors rights generally.
3.3. No Conflicts. The execution, delivery and performance by the Company of this Agreement, the issuance and sale of the Shares and the consummation by it of the transactions contemplated hereby do not and will not (i) conflict with or violate any provision of the Company’s articles of incorporation or bylaws, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Encumbrance upon any of the properties or assets of the Company or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, debt or other instrument to which the Company is a party or by which any property or asset of the Company is bound or affected, or (iii) conflict with or result in a violation of any applicable Law to which the Company is subject, or by which any property or asset of the Company is bound or affected.
3.4. Capitalization. The authorized capital stock of the Company consists of One Billion Ten Million (1,010,000,000) shares, with all of such shares having a par value of $0.0001 per share, comprising One Billion (1,000,000,000) shares of common stock (“ Common Stock ”) and Ten Million (10,000,000) shares of preferred stock (“ Preferred Stock ”). As of the date of this Agreement, there are 4,000,000 shares of Common Stock outstanding and no shares of Preferred Stock outstanding. As of the date of this Agreement, 2,000,000 shares of Preferred Stock have been designated as Series A Cumulative Convertible Preferred Stock. All shares of Common Stock currently outstanding have been duly authorized, validly issued and are fully paid and non-assessable. There are no preemptive rights, or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, calls, agreements or commitments of any character obligating the Company to issue any shares of its capital stock or any security representing the right to acquire, purchase or otherwise receive any such stock.
3.5. Acknowledgement of Receipt of Cash; Valuation of Portfolio. The Company acknowledges and confirms that (i) as of the date of this Agreement, it has received the sum of $10,242.97 from Ventureo (or its designees), in the form of direct payments to third parties, which sum is being applied to the cash portion of the purchase price for the Shares, and (ii) its board of directors has adopted resolutions accepting and approving the payment of the cash and the transfer of the Portfolio in full consideration for the Shares, that the board of directors acted in good faith in setting a value for the Portfolio and that the resolutions adopted by the board of directors are final and unassailable by the Company’s stockholders.
3.6. Consents. The Company is not required to obtain any consent, approval, authorization, declaration of permit of, action by, filing with, notification to or order of any governmental entity or any other Person in order for it to execute, deliver or perform any of its obligations under or contemplated by this Agreement.
5 |
3.7. Operational and Financial Status. The Company has not (i) engaged in substantive business operations other than business and activity related to its organization and the transactions described in this Agreement, (ii) generated any revenues from operations, (iii) entered into any agreements or contracts, whether written or oral, except for its agreements under this Agreement, or (iv) incurred, directly or indirectly, any material obligations or material liabilities.
3.8. Issuance of the Shares. The Shares, when issued and paid for in accordance with the terms hereof, will be duly authorized and validly issued, fully paid and nonassessable, free and clear of all Encumbrances imposed by the Company other than restrictions on transfer provided for in this Agreement. The Conversion Shares, when issued in accordance with the terms of this Agreement and the Articles of Incorporation, will be validly issued, fully paid and nonassessable, free and clear of all Encumbrances imposed by the Company. The Company has reserved from its duly authorized capital stock a number of shares of Common Stock for issuance of the Underlying Shares equal to the number of shares issuable upon conversion of the Shares.
3.9. Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “ Action ”) which (i) adversely affects or challenges the legality, validity or enforceability of any of this Agreement or the Shares or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a material adverse effect on the business or financial condition of the Company as now conducted or contemplated to be conducted after the date hereof. Neither the Company nor, to the best of the knowledge of the Company, any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty.
ARTICLE 4
MISCELLANEOUS
4.1. Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on any Business Day (as defined below), (ii) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Business Day or later than 5:30 p.m. (New York City time) on any Business Day, (c) the second (2nd) Business Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on Schedule B hereto. For purposes of this Agreement, the term “ Business Day ” means any day other than (i) a Saturday or Sunday or (ii) any other day on which banks in New York, New York are permitted or required to be closed.
6 |
4.2. Entire Agreement. This Agreement, including all Exhibits and Schedules attached hereto, contain the entire agreement of the parties and supersede any and all prior or contemporaneous agreements between the parties, written or oral, with respect to the transactions contemplated hereby.
4.3. Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and Ventureo or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.
4.4. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of Ventureo. Ventureo may assign any or all of its rights under this Agreement to any Person to whom Ventureo assigns or transfers any Shares, provided such transferee agrees in writing to be bound, with respect to the transferred Shares, to all of the provisions of this Agreement.
4.5. No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.
4.6. Survival. The representations, warranties, covenants and other agreements contained herein shall survive the date of this Agreement and the delivery, exercise and/or conversion of the Shares, as applicable for a period of two (2) years from the date of this Agreement.
4.7. Governing Law; Jurisdiction. This Agreement and the rights of the parties hereto shall be interpreted in accordance with the laws of the State of New York, excluding that State’s choice-of-law principles, and all claims relating to or arising out of this Agreement, or the breach hereof, whether sounding in contract, tort or otherwise, shall likewise be governed by the laws of New York, excluding that State’s choice-of-law principles. Each Party hereby irrevocably submits to the jurisdiction of the federal and state courts located in the Borough of Manhattan, City and State of New York (the “ New York Courts ”). Each party hereto irrevocably consents to service of process in any manner permitted by the New York Courts in any such action or proceeding by the mailing of such documents by registered United States mail, postage prepaid, to the respective address set forth on Schedule B to this Agreement.
4.8. Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.
7 |
4.9. Execution and Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
4.10. Captions. The captions or headings in this Agreement are made for convenience and general reference only and shall not be construed to describe, define or limit the scope or intent of the provisions of this Agreement.
Signature page follows.
8 |
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
APPSOFT TECHNOLOGIES, INC.
|
VENTUREO, LLC | |||
By: | /s/ Brian Kupchik | By: | /s/ Bryan Glass | |
Name: Brian Kupchik | Name: Bryan Glass | |||
Title: President | Title: President of Bryan Glass Securities, Inc., the manager of Ventureo, LLC |
9 |
SCHEDULE A
MOBILE APPLICATION TITLES INCLUDED IN THE PORTFOLIO
Title: Front-line Gun Master PRO - Contract killer of the underworld empire.
Candy Smasher - Mega tap-ping game! Fly-smart! Don't let the angry monster tube squish you.
Naval Battleship War PRO - Be a captain of your own ship. Sail, aim, boom and raid the pirates in the pacific sea.
Urban Ninja Quest PRO - Jump-ing karate master in a kung-fu blade journey
Zombie Fast-Lane - The Impossible Apocalypse Road
Bike Race Tunnel Riders PRO
Tim Rocket
Roper Bravo PRO
Moto Dirt Trials
Kick-start MC Madness PRO - Show your mad skill,speed and strength in a turbo bike sprint.
Monster Apocalypse
Tsunami Road-kill Run - A Zombie Outbreak Survival.
Axe the Brave Pro - Dragon Slayer
IronShorts
Avro Avenger PRO
Mighty Frontier
Stick-Man Dracula Runner PRO
Skater Boy 2 PRO - End-less Hipster Sub-way explorer!
Monster Dirtbike Mountain Hill Climb - A Fearless and Xtreme drifting sport!
Crazy Goat Jump 2 - Top action mega funny game!
Soccer Ball Dodging - Run between soccer balls
F-16 Madness PRO
10 |
Vengeance of the mighty soul PRO
Kick-start MC Madness - Show your mad skill,speed and strength in a turbo bike sprint.
Attack Chopper 2 Pro - Air-striker warrior against a black-hawk guild. Fly an Apache, dodge to avoid hordes of war-zone chaos.
Stick-Man Shooter - Clear Evil Assassins as a Runner by Best Fun Games For Free
Trigger Beard
Strikeout Baseball Pro
Doodle Reflex 2 - A Brainteaser Game that will measure your speed,accuracy and agility! Let's see how ready you are for this challenge.
Doodle Reflex
Hawker Fury PRO
Legends of Dragons - Rise of the epic mighty hero.
Pop-star: Justin Bieber Edition PRO - Win fan's love while leaving a concert, smile and blow kisses with this beauty
Prepare for Submission
Crazy Goat Jump Pro
Mighty Frontier PRO
Bike Race Tunnel Riders 2 PRO - Real Xtreme Bmx Trek! Pedal through obstacles, avoid danger and drive to infinity.
Attack Choppers PRO - Fighter pilot at war in a hel-icopter builder game
Redneck Attack PRO - Revenge of the bully monster alligator! Throw a dump of snowball and dynamite on angry fly and ridiculous zombie.
Pop-star: Justin Bieber Edition - Win fan's love while leaving a concert, smile and blow kisses with this beauty
Castle Guardians PRO - Legendary warrior against barbarian empire.
Meadow Drive
Candy Smasher PRO - Mega tap-ping game! Fly-smart! Don't let the angry monster tube squish you.
Navy SEAL Zombie Takeover
11 |
Urban Ninja Quest - Jump-ing karate master in a kung-fu blade journey
Attack Chopper 2 - Air-striker warrior against a black-hawk guild. Fly an Apache, dodge to avoid hordes of war-zone chaos.
Plane Warrior PRO
Monster Apocalypse PRO
Fairyland Jumper Delight PRO
Space Alien Escape
Rooftop Monster Dodger
Summoners Combat PRO - Reign of the fallen Nation.
Mad guerilla
Plane Warrior
Tiny Flyers on Flappy Planes
Bravo Force Soldier - Last man standing in a battle-field city.
Monster Dirtbike Mountain Hill Climb PRO - A Fearless and Xtreme drifting sport!
Bloody Mary Shooter 2 PRO - Target, kill and destroy horde of darkness.
A Jumping Chicken Raid PRO — Fred the Invader flying chick.
Rooftop Monster Dodger PRO
Nerd-y Biker Mania - Moto madness on a xtreme trial Rally
Soldier at war PRO!
Alien Big-head invasion - Extreme Combat and Super Laser All in one! Probe and attack the human nation
Apocalypse Jump! Free
Potato Smash
Robot Soldier Dash
Naval Battleship War - Be a captain of your own ship. Sail, aim, boom and raid the pirates in the pacific sea.
Cool Skater Dude
12 |
Attack Choppers - Fighter pilot at war in a hel-icopter builder game
Tim Rocket PRO
Crusty Pitchforks Challenge
Bravo Force Soldier PRO - Last man standing in a battle-field city.
Crazy Zombie Adventure
Axe the Brave - Dragon Slayer
Knights Legendary King PRO - Roman Empire Medieval Age.
Mad guerrilla PRO
Granpa's Sky-line Hoverboard Adventure PRO
FREEWAY NITRO DRAG RACING - Be a fast and expert driver and drifter on a fast-lane street.
Hey! It's Slaying Day Brother
FREEWAY NITRO DRAG RACING PRO - Be a fast and expert driver and drifter on a fast-lane street.
Flying Wrestler - Flappy Style Game
Off-road Rush PRO
Battle Zone 101 PRO
Ancient man warrior PRO - Infinite master jump-er
Tiny Ninja Pixel Jump - Climb the impossible tower while dodging shurikens
Plane Strike
Meadow Drive PRO
Battle-field soldier
Air Rivals
Navy SEALs vs Ninja Kiwi Throwers - A mini tactical assault shooter game
Real Steel Gladiator PRO
Justice Infinite Warrior
BadAss Viking PRO
13 |
Dark king-dom warrior
Trigger Beard PRO
Bloody Mary Shooter 2 - Target, kill and destroy horde of darkness.
Flappy Parrot - Super Wings Flyer
Bike Race Tunnel Riders 2 - Real Xtreme Bmx Trek! Pedal through obstacles, avoid danger and drive to infinity.
Cartoon little war Game - Chop chop kungfu gunner master.
Legally blonde dash PRO - The adventure of Justin the explorer
Infinite Highway - Drive down this impossible road
Alien Big-head invasion PRO - Extreme Combat and Super Laser All in one! Probe and attack the human nation
Doodle Reflex Pro
Tiny Soldier Siege PRO
Nerd-y Biker Mania PRO - Moto madness on a xtreme trial Rally
Off-road Rush
Bike Race Tunnel Riders
Legends of Dragons PRO - Rise of the epic mighty hero.
Vengeance of the mighty soul
Enchanted fairy flyer - Forest adventure with Tinker and friends. Let the magic begins.
Crazy Goat Jump 2 PRO - Top action mega funny game!
F-16 Madness
Fairyland Jumper Delight
Castle Guardians - Legendary warrior against barbarian empire.
Dirt Drive PRO
Soldier at war!
Doodle Reflex 2 PRO - A Brainteaser Game that will measure your speed,accuracy and agility! Let's see how ready you are for this challenge.
14 |
Don't Kick The White Tile Pro - Step Over It
Gravity Elf Flyer PRO
Cool Skater Dude PRO
Stick-man Dracula Jumper PRO - Lost in dark ground. An evolution of of monster stuntman force.
Hilarious Dumb Zombies PRO - Road trip jumping game.
Skater Boy 2 - End-less Hipster Sub-way explorer!
Clumsy Kitty's Voyage PRO
Stick-Man Stuntman Dash PRO - A running, jumping & sprinter game with impossible platform geometry
Stick-Man Shooter PRO - Clear Evil Assassins as a Runner by Best Fun Games For Free
Stick-Man Dracula Runner - The free impossible running, sprinter endless jumping game
Ninja Kung-fu Hustle PRO - Run and jump through the infinity quest, Use your Swift blade and slash the stupid zombies.
Knights Legendary King - Roman Empire Medieval Age
Bloody Mary Shooter Pro
Granpa's Sky-line Hoverboard Adventure
Enchanted fairy flyer PRO - Forest adventure with Tinker and friends. Let the magic begins.
Apocalypse Jump! PRO
Cartoon little war game PRO - Chop chop kungfu gunner master.
Real Steel Gladiator
Don't Kick The White Tile - Step Over It
Motocross Stunt-man Hero PRO
Prepare for Submission
Clumsy Kitty's Voyage
Crazy Goat Jump
15 |
Ninja Kung-fu Hustle - Run and jump through the infinity quest, Use your Swift blade and slash the stupid zombies.
Bloody Mary Shooter
Dark Avenger Rider PRO
Justice Infinite Warrior PRO
Potato Smash PRO
Flappy Goat Rampage
Front-line Gun Master - Contract killer of the underworld empire
Infinite Highway Pro - Drive down this impossible road
Tiny Soldier Siege
Xtreme Biker Mania PRO - A dirt bike challenge filled with hard-core and free-style stunts that will rush your adrenaline.
Pyro Bird Jump - Fly an 8bit jumping birdie!
Pork Dead Belly
Dirt Drive
Lights Out - A World Of Dark-ness
Dark king-dom warrior PRO
Stick-Man Spaceman Sniper PRO - An angry astronaut and his jetpack hunt aliens on a spacewalk
Crusty Pitchforks Challenge PRO
Gravity Elf Flyer
Stickman Sprinter Dash PRO - Impossible platform geometry while running a marathon as a doodle runner
Stick-man Dracula Jumper - Lost in dark ground. An evolution of of monster stuntman force.
Ancient man warrior - Infinite master jump-er.
Flappy Flyer: Justin Bieber & Miley Cyrus Edition - HD
Apocalypse Jump 2 Pro - Test your agility as a mini chubby jumping blob. Your a cartoon like kanga-roo in a tilt avoidance skysafari
16 |
Plane Strike PRO
Motocross Stunt-man Hero
Legally blonde dash - The adventure of Justin the explorer
Commando War Zone PRO
Skater Boy Pro - the fun free jumping, diving, fast paced skateboard game
Tsunami Road-kill Run PRO - A Zombie Outbreak Survival.
Stick-Man Stuntman Dash 2 PRO - A running jumping sprinter game with impossible platform
A Jumping Chicken Raid — Fred the Invader flying chick
Summoners Combat - Reign of the fallen Nation
Jungle Chopper - Fighter pilot at war in a helicopter builder game
Flappy Flying Pop Star - Justin Bieber & Miley Cyrus edition
Hilarious Dumb Zombies - Road trip jumping game.
BadAss Viking
17 |
2010 Federal Register 1.2
2011 Federal Register 1.1
AK - Court Procedure Practice 1.0
AL Code of Criminal Procedure 1.2
Alabama Criminal Code 1.2
Alabama Marriage Law 1.2
Alabama State Code - DroidLaw 1.0
Alabama's Motor Vehicle Code 1.2
Arizona Marriage Laws 1.0
Arizona Transportation Code 1.0
Arizona's Criminal Code 1.0
Arkansas Code - DroidLaw 1.0
Arkansas Criminal Offenses 1.0
Arkansas Family Law 1.0
Arkansas Transportation Code 1.0
AZ - Courts and Civil Proc. 1.0
AZ Revised Statutes - dLaw 1.0
Bankruptcy Code - DroidLaw 1.2
CA Bus. & Professions Code 1.0
CA Civil Code - DroidLaw 1.0
CA Code of Civil Procedure 1.0
CA Penal Code - DroidLaw 1.0
CA Vehicle Code - DroidLaw 1.0
California Civil Code 1.0
California Commercial Code 1.0
California Corporations Code 1.0
California Evidence Code 1.0
California Family Code 1.0
California Penal Code 1.0
California State Code - dLaw 1.0
California Vehicle Code 1.0
CFR - Title 1 1.0
CFR - Title 10 1.0
18 |
CFR - Title 11 1.0
CFR - Title 12 1.0
CFR - Title 13 1.0
CFR - Title 14 1.0
CFR - Title 15 1.0
CFR - Title 16 1.0
CFR - Title 17 1.0
CFR - Title 18 1.0
CFR - Title 19 1.0
CFR - Title 2 1.0
CFR - TItle 20 1.0
CFR - Title 21 1.0
CFR - Title 22 1.0
CFR - Title 23 1.0
CFR - Title 24 1.0
CFR - Title 25 1.0
CFR - Title 26 1.0
CFR - Title 27 1.0
CFR - Title 28 1.0
CFR - Title 29 1.0
CFR - TItle 3 1.0
CFR - Title 30 1.0
CFR - Title 31 1.0
CFR - Title 32 1.0
CFR - Title 33 1.0
CFR - Title 34 1.0
CFR - Title 36 1.0
CFR - TItle 37 1.0
CFR - Title 38 1.0
CFR - Title 39 1.0
CFR - Title 4 1.0
CFR - Title 40 1.0
CFR - Title 41 1.0
19 |
CFR - Title 42 1.0
CFR - Title 43 1.0
CFR - Title 44 1.0
CFR - Title 45 1.0
CFR - Title 46 1.0
CFR - Title 47 1.0
CFR - Title 48 1.0
CFR - TItle 49 1.0
CFR - Title 5 1.0
CFR - Title 50 1.0
CFR - Title 6 1.0
CFR - Title 7 1.0
CFR - Title 8 1.0
CFR - Title 9 1.0
CO Criminal Proceedings 1.0
CO Revised Statutes - DroidLaw 1.0
CO Revised Statutes - Title 13 1.0
CO Rules of Criminal Procedure 1.0
Code of Federal Regulations 1.0
Colorado Criminal Code 1.0
Colorado Rules Civil Procedure 1.0
Colorado Rules of Evidence 1.0
Colorado Transportation Code 1.0
Connecticut Crimes Code 1.0
Connecticut Criminal Procedure 1.0
Connecticut Family Law 1.0
Connecticut Penal Code 1.0
Connecticut Statutes -DroidLaw 1.0
Connecticut Transportation Law 1.0
Delaware Corporations Code 1.0
Delaware Crimes & Procedure 1.0
Delaware Judicial Procedures 1.0
Delaware State Code - DroidLaw 1.0
20 |
Delaware Transportation Code 1.0
District of Columbia Code 1.0
dLaw - State and Federal Laws 3.0.6
DroidLaw 2.2.4
Florida Civil Procedure 1.0
Florida Criminal Procedure 1.0
Florida Domestic Relations Law 1.0
Florida Motor Vehicle Code 1.0
Florida Statutes 1.1
Florida Statutes - Crimes 1.0
GA Motor Vehicles and Traffic 1.0
Georgia Crimes and Offenses 1.0
Georgia Criminal Procedure 1.0
Georgia Domestic Relations Law 1.0
Georgia State Code - DroidLaw 1.0
Idaho Crimes and Punishments 1.0
Idaho Criminal Procedure 1.0
Idaho Domestic Relations Law 1.0
Idaho Motor Vehicles Code 1.0
Idaho Statutes for DroidLaw 1.0
Illinois Compiled Statutes 1.0
Illinois Criminal Offenses 1.0
Illinois Criminal Procedure 1.0
Illinois Family Law 1.0
Illinois Transportation Code 1.0
IN Criminal Law & Procedure 1.0
Indiana Civil Law & Procedure 1.0
Indiana Family & Juvenile Code 1.0
Indiana State Code - DroidLaw 1.0
Internal Revenue Code 1.1
Iowa Criminal Law & Procedure 1.0
Iowa Judicial Procedure 1.0
Iowa State Code 1.0
21 |
Iowa Transportation Code 1.0
Kansas Civil Procedure 1.0
Kansas Criminal Law Procedure 1.0
Kansas Criminal Procedure 1.0
Kansas Statutes for DroidLaw 1.0
Kentucky Crimes / Punishment 1.0
Kentucky Marriage Law 1.0
Kentucky Penal Code 1.0
Kentucky Revised Statutes 1.0
LA Motor Vehicles / Traffic 1.0
Legal Dictionary for DroidLaw 1.0
Louisiana Criminal Law 1.0
Louisiana Criminal Procedure 1.0
Louisiana Judicial Procedure 1.0
Louisiana Revised Statutes 1.0
MA -Title IV - Criminal Cases 1.0
MA Crime and Punishments 1.0
MA Proceeding in Criminal Case
MA State Code - DroidLaw
Maine Civil Court Procedure
Maine Court Rules of Evidence
Maine Crimes
Maine Criminal Court Procedure
Maine Revised Statutes
Maine's Criminal Code
Maine's Motor Vehicle Code
Manual of Patent Examining
Maryland Criminal Law
Maryland Criminal Procedure
Maryland Family Law
Maryland State Code - DroidLaw
Maryland Transportation Code
Massachusetts Family Law
22 |
Michigan Compiled Laws
Michigan Divorce Laws
Michigan Family Law
Michigan's Constitution
Michigan's Crimes and Offenses
Michigan's Criminal Procedure
Michigan's Penal Code
Minnesota Statutes
Minnesota Transportation Code
Mississippi State Code
Missouri Revised Statutes
Montana Code for DroidLaw
Montana's Vehicle Code
NC - Liabilities of Marriage
NC Child Custody Act
NC Criminal Procedure
NC Criminal Procedure Act
NC Divorce Law
NC Evidence Code
NC General Statutes - DroidLaw
NC Motor Vehicle Law
NC Rules of Civil Procedure
NC Transportation Law
Nebraska Civil Procedure Rules
Nebraska Crime & Punishments
Nebraska Criminal Procedure
Nebraska Motor Vehicle Code
Nebraska Revised Statutes
Nebraska's Rules of Evidence
Nevada State Code - DroidLaw
New Hampshire Criminal Code
New Jersey Marriage Law
New Jersey Statutes - DroidLaw
23 |
New Mexico Administrative Code
New York LLC Law
New York Penal Code
New York Penal Code - DroidLaw
New York State Code - DroidLaw
New York Transportation Code
NH Domestic Relations Law
NH Motor Vehicles Law
NH Revised Statutes - DroidLaw
NH Statutes - Title 1
NH Transportation Code
NJ Code of Criminal Justice
NJ Court and Civil Code
NJ Motor Vehicle / Traffic Law
NJ State Code T53 State Police
NM Transportation and Highways
North Carolina Criminal Law
North Carolina Evidence
North Carolina Marriage Law
North Dakota Century Code
NY Civil Practice Law and Rule
NY Domestic Relations Law
NY Vehicle and Traffic Law
NY Vehicle Code - DroidLaw
OBSOLETE
OBSOLETE
Ohio Revised Code - DroidLaw
Oklahoma Statutes for DroidLaw
Oregon Revised Statutes
PA State Code - DroidLaw
PA Transportation Code
Patent Law - DroidLaw
Rhode Island General Laws
24 |
Send To...
South Carolina Code of Laws
South Dakota Codified Laws
Tennessee State Code
TEST APP - OBJECTION LIST
Texas Business & Commerce Code
Texas Civil Rules of Procedure
Texas Penal Code - DroidLaw
Texas State Code - DroidLaw
Texas Transportation Code
Title 22 of NMAC
TX Civil Practice And Remedies
TX Code Of Criminal Procedure
U.S. Constitution plus more
U.S. Copyright Act - DroidLaw
U.S. Tax Court Cases
Uniform Commercial Code
United States Code - DroidLaw
US Supreme Court Cases 1.0
Utah Code - DroidLaw 1.0
VA Civil Remedies & Procedure 1.0
Vermont Statutes - DroidLaw 1.0
Virginia Crimes and Offenses 1.0
Virginia Criminal Procedure 1.0
Virginia Motor Vehicle Code 1.0
Virginia State Code 1.0
Washington State Code 1.1
Wisconsin Statutes - DroidLaw 1.0
Wyoming Statutes - DroidLaw 1.0
25 |
SCHEDULE B
NOTICE COORDINATES
APPSOFT TECHNOLOGIES, INC. | VENTUREO, LLC |
1225 Franklin Avenue | 20 West Park Avenue |
Suite 325 | Suite 207 |
Garden City, NY 11530 | Long Beach NY 11561 |
Attn.: Brian Kupchik, President | Attn.: Bryan Glass |
Email: bkupchik@appsofttechnologies.com | Email: bglass@esfi.com |
EXHIBIT A
ARTICLES OF INCORPORATION OF APPSOFT TECHNOLOGIES, INC.
Exhibit 10.2
CONSULTING AGREEMENT
This Consulting Agreement (this “ Agreement ”) is made as of __________, 2015, by and between AppSoft Technologies, Inc., a Nevada corporation (the “ Company ”), and Peter Nein (“ Consultant ”).
1. Consulting Relationship. During the term of this Agreement, Consultant will provide consulting services to the Company as described on Exhibit A hereto (the “ Services ”). Consultant represents that Consultant is duly licensed (if applicable) and has the qualifications, the experience and the ability to properly perform the Services. Consultant shall use Consultant’s best efforts to perform the Services such that the results are satisfactory to the Company. Consultant shall devote at least 4 hours per week to performance of the Services.
2. Fees. As consideration for the Services to be provided by Consultant and other obligations, the Company shall pay to Consultant the amounts specified in Exhibit B hereto at the times specified therein.
3. Expenses. Consultant shall not be authorized to incur on behalf of the Company any expenses and will be responsible for all expenses incurred while performing the Services unless otherwise agreed to by the Company’s President, which consent shall be evidenced in writing for any expenses in excess of $200. As a condition to receipt of reimbursement, Consultant shall be required to submit to the Company reasonable evidence that the amount involved was both reasonable and necessary to the Services provided under this Agreement.
4. Term and Termination. Consultant shall serve as a consultant to the Company for a period commencing on June 1, 2015 and terminating on the earlier of (a) the date Consultant completes the provision of the Services to the Company under this Agreement, or (b) the date Consultant shall have been paid the maximum amount of consulting fees as provided in Exhibit B hereto.
Notwithstanding the above, either party may terminate this Agreement at any time upon three (3) business days’ written notice. In the event of such termination, Consultant shall be paid for any portion of the Services that have been performed prior to the termination.
Should either party default in the performance of this Agreement or materially breach any of its obligations under this Agreement, including but not limited to Consultant’s obligations under the Confidential Information and Invention Assignment Agreement between the Company and Consultant referenced below, the non-breaching party may terminate this Agreement immediately if the breaching party fails to cure the breach within ten (10) business days after having received written notice by the non-breaching party of the breach or default.
5. Independent Contractor. Consultant’s relationship with the Company will be that of an independent contractor and not that of an employee.
6. Method of Provision of Services. Consultant shall be solely responsible for determining the method, details and means of performing the Services. Consultant may, at Consultant’s own expense, employ or engage the services of such employees, subcontractors, partners or agents, as Consultant deems necessary to perform the Services (collectively, the “ Assistants ”). The Assistants are not and shall not be employees of the Company, and Consultant shall be wholly responsible for the professional performance of the Services by the Assistants such that the results are satisfactory to the Company. Consultant shall expressly advise the Assistants of the terms of this Agreement, and shall require each Assistant to execute and deliver to the Company a Confidential Information and Invention Assignment Agreement substantially in the form attached to this Agreement as Exhibit D hereto (the “ Confidentiality Agreement ”).
(a) No Authority to Bind Company. Consultant acknowledges and agrees that Consultant and its Assistants have no authority to enter into contracts that bind the Company or create obligations on the part of the Company without the prior written authorization of the Company.
(b) No Benefits. Consultant acknowledges and agrees that Consultant and its Assistants shall not be eligible for any Company employee benefits and, to the extent Consultant otherwise would be eligible for any Company employee benefits but for the express terms of this Agreement, Consultant (on behalf of itself and its employees) hereby expressly declines to participate in such Company employee benefits.
(c) Withholding; Indemnification. Consultant shall have full responsibility for applicable withholding taxes for all compensation paid to Consultant or its Assistants under this Agreement, and for compliance with all applicable labor and employment requirements with respect to Consultant’s self-employment, sole proprietorship or other form of business organization, and with respect to the Assistants, including state worker’s compensation insurance coverage requirements and any U.S. immigration visa requirements. Consultant agrees to indemnify, defend and hold the Company harmless from any liability for, or assessment of, any claims or penalties with respect to such withholding taxes, labor or employment requirements, including any liability for, or assessment of, withholding taxes imposed on the Company by the relevant taxing authorities with respect to any compensation paid to Consultant or its Assistants.
7. Supervision of Consultant’s Services. All of the services to be performed by Consultant, including but not limited to the Services, will be as agreed between Consultant and the Company’s [Supervisor’s Title]. Consultant will be required to report to the [Supervisor’s Title] concerning the Services performed under this Agreement. The nature and frequency of these reports will be left to the discretion of the [Supervisor’s Title].
8. Consulting or Other Services for Competitors. Consultant represents and warrants that Consultant does not presently perform or intend to perform, during the term of the Agreement, consulting or other services for, or engage in or intend to engage in an employment relationship with, companies who businesses or proposed businesses in any way involve products or services which would be competitive with the Company’s products or services, or those products or services proposed or in development by the Company during the term of the Agreement (except for those companies, if any, listed on Exhibit E hereto). If, however, Consultant decides to do so, Consultant agrees that, in advance of accepting such work, Consultant will promptly notify the Company in writing, specifying the organization with which Consultant proposes to consult, provide services, or become employed by and to provide information sufficient to allow the Company to determine if such work would conflict with the terms of this Agreement, including the terms of the Confidentiality Agreement, the interests of the Company or further services which the Company might request of Consultant. If the Company determines that such work conflicts with the terms of this Agreement, the Company reserves the right to terminate this Agreement immediately. In no event shall any of the Services be performed for the Company at the facilities of a third party or using the resources of a third party.
9. Confidentiality Agreement. Consultant shall sign, or has signed, a Confidentiality Agreement, on or before the date Consultant begins providing the Services.
10. Conflicts with this Agreement. Consultant represents and warrants that neither Consultant nor any of the Assistants is under any pre-existing obligation in conflict or in any way inconsistent with the provisions of this Agreement. Consultant represents and warrants that Consultant’s performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by Consultant in confidence or in trust prior to commencement of this Agreement. Consultant warrants that Consultant has the right to disclose and/or or use all ideas, processes, techniques and other information, if any, which Consultant has gained from third parties, and which Consultant discloses to the Company or uses in the course of performance of this Agreement, without liability to such third parties. Notwithstanding the foregoing, Consultant agrees that Consultant shall not bundle with or incorporate into any deliveries provided to the Company herewith any third party products, ideas, processes, or other techniques, without the express, written prior approval of the Company. Consultant represents and warrants that Consultant has not granted and will not grant any rights or licenses to any intellectual property or technology that would conflict with Consultant’s obligations under this Agreement. Consultant will not knowingly infringe upon any copyright, patent, trade secret or other property right of any former client, employer or third party in the performance of the Services.
11. Miscellaneous.
(a) Amendments and Waivers. Any term of this Agreement may be amended or waived only with the written consent of the Company.
(b) Sole Agreement. This Agreement, including the Exhibits hereto, constitutes the sole agreement of the parties and supersedes all oral negotiations and prior writings with respect to the subject matter hereof.
(c) Notices. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon delivery, when delivered personally or by overnight courier or sent by email or fax (upon customary confirmation of receipt), or forty-eight (48) hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, addressed to the party to be notified at such party’s address or fax number as set forth on the signature page or as subsequently modified by written notice.
(d) Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of [California], without giving effect to the principles of conflict of laws.
(e) Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.
(f) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.
(g) Advice of Counsel. EACH PARTY ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT, SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.
[Signature Page Follows]
The parties have executed this Agreement as of the date first written above.
the company: | |
[Company Name] | |
By: | |
(Signature) | |
Name: | |
Title: | |
Address: | |
____________________ | |
__________, __________ ______ | |
Attn: Chief Executive Officer | |
Fax: ________________ | |
email: ________________ | |
CONSULTANT: | |
(Print Name) | |
(Signature) | |
Address: | |
Fax: | |
email: |
EXHIBIT A
DESCRIPTION OF CONSULTING SERVICES
Description of Services | Schedule/Deadline | |
1. | ||
2. |
EXHIBIT B
COMPENSATION
Check applicable payment terms:
x | For Services rendered by Consultant under this Agreement, the Company shall pay Consultant at the rate of $____ per hour, payable _______________. Unless otherwise agreed upon in writing by Company, Company’s maximum liability for all Services performed during the term of this Agreement shall not exceed $500 per month. |
¨ | Consultant shall be paid $____________ upon the execution of this Agreement and $____________ upon completion of the Services specified on Exhibit A to this Agreement. |
x | The Company will recommend that the Board grant a non-qualified option to purchase 10,000 shares of the Company’s Common Stock, at an exercise price equal to the fair market value (as determined by the Company’s Board of Directors) on the date of grant, and which will vest and become exercisable as follows: |
x | Consultant is authorized to incur the following expenses: |
Software subscriptions or licenses | |
App or in app purchases | |
Trade conference attendance |
x | Other: |
Consultant will also be granted a commission of 30% on revenue from Droidlaw and Dlaw app purchases. |
EXHIBIT C
ALLOWABLE Expenses
EXHIBIT D
CONFIDENTIAL INFORMATION AND
INVENTION ASSIGNMENT AGREEMENT
(See Attached)
EXHIBIT E
LIST OF COMPANIES
EXCLUDED UNDER SECTION 7
___ No conflicts
___ Additional Sheets Attached
Signature of Consultant:
Print Name of Consultant:
Date:
Exhibit 23.1
GEORGE STEWART, CPA
316 17 TH AVENUE SOUTH
SEATTLE, WASHINGTON 98144
(206) 328-8554 FAX(206) 328-0383
To Whom It May Concern:
The firm of George Stewart, Certified Public Accountant consents to the inclusion of our report on the Financial Statements of Appsoft Technologies Inc. as of May 31, 2015, in any filings that are necessary now or in the near future with the U. S. Securities and Exchange Commission.
Very Truly Yours,
/S/ George Stewart
George Stewart, CPA
July 30, 2015