U. S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-12G
GENERAL FORM FOR REGISTRATION OF
SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(b) or 12(g) of the Securities
Exchange Act of 1934
Fona Inc.
(Name of Small Business Issuer in its charter)
Nevada 41-1683548
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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Registrants telephone number: (303) 499-6000
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on
to be so registered which each class is to be registered
Not Applicable
Securities to be registered under Section 12(g) of the Act:
Common Stock
(Title of class)
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of "large accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller Reporting Company [ ] (Do not check if a smaller reporting company)
ITEM 1. DESCRIPTION OF BUSINESS
Fona, Inc. (the "registrant" or "Company") was incorporated under the laws of the state of Minnesota in November 1990 under the name Fonahome Corporation. On March 24, 2009, the Company reincorporated in the state of Nevada and merged with its wholly-owned subsidiary, Fona, Inc., adopting the surviving company's name, Fona, Inc. The Company was originally formed to develop and market an interactive information and advertising service.
The Company made a registered public offering of its common stock on May 8, 1992 to provide working capital to the Company. The offering was made pursuant to a registration statement under the Securities Act of 1933 filed with the Securities and Exchange Commission, the SEC, on April, 29, 1992.
Since December 1999, the Company has had no significant business operations other than normal expenses incurred to keep the Company in good standing with the State of Minnesota and minimal revenues and administrative and professional fees.
The Company has opted to become a "blank check" company and to further engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions.
On March 3, 2009, the Company held a shareholder meeting approving the Stock Purchase Agreement and an Agreement and Plan of Merger effectively changing the name of the Company to Fona Inc., a Nevada corporation ("Re-incorporation Merger") and simultaneously adopting the capital structure of Fona Inc., which includes total authorized capital stock of 800,000,000 shares, of which 780,000,000 are common stock and 20,000,000 are blank check preferred stock.
On March 3, 2009, the shareholders also approved and ratified an Assignment Agreement under which the Company assigned its worldwide copyrights, trademarks and other assets to The Boosalis Group, Inc. and various issuances of common stock by the Company in exchange for forgiveness of debt and other considerations.
On March 24, 2009, the Articles of Merger of Fonahome Corporation, a Minnesota Corporation, into Fona, Inc., A Nevada Corporation, were filed with the Nevada Secretary of State.
On April 1, 2009, the Board of Directors approved the issuance of 3,954,950 shares of our common stock to two individuals, (Sanford Schwartz and Michael Friess), for a $10,000 cash payment and a note for an additional $10,000. The note was satisfied in May, 2009.
On April 22, 2009, the Board of Directors accepted the resignation of Nick T Boosalis and appointed Michael Friess as President, CEO, and Chairman of the Board, Sanford Schwartz as Vice President, and Chloe DiVita as Secretary, Treasurer and CFO of the Company.
Since December 1999, the Company has had insignificant operations. As such, the Company may presently be defined as a "shell" company, whose sole purpose at this time is to locate and consummate a merger or acquisition with a private entity.
The Company has opted to register its common stock pursuant to section 12(g) of the Securities Exchange Act of 1934 in an effort to maximize shareholder value. The best use and primary attraction of the Company as a merger partner or acquisition vehicle will be its status as a reporting public company. Any business combination or transaction is expected to result in a significant issuance of shares and substantial dilution to present stockholders of the Company.
The proposed business activities described herein classify the Company as a "blank check" company. Many states have enacted statutes, rules and regulations limiting the sale of securities of "blank check" companies in their respective jurisdictions. Management does not intend to undertake any additional offerings of the Company's securities, either debt or equity, until such time as the Company has successfully implemented its business plan described herein.
The Company maintains headquarters at the office of its President. The Company's website is www.fonainc.com. The Company is not required to deliver an annual report to security holders and at this time does not anticipate the distribution of such a report. The Company will file reports with the SEC.
The public may read and copy any materials the Company files with the SEC in the SEC's Public Reference Section, Room 1580, 100 F Street N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Section by calling the SEC at 1-800-SEC-0330. Additionally, the SEC maintains an Internet site that contains reports, proxy, and information statements, and other information regarding issuers that file electronically with the SEC, which can be found at http://www.sec.gov.
Employees
We currently have no employees. Michael Friess, Sanford Schwartz and Chloe DiVita each devote approximately 5-10% of their time to the Company's business. Our management expects to use consultants, attorneys and accountants as necessary, and does not anticipate a need to engage any full-time employees so long as we are seeking and evaluating business opportunities. The need for employees and their availability will be addressed in connection with the decision whether or not to acquire or participate in specific business opportunities.
ITEM 1A. RISK FACTORS
A. Conflicts of Interest. There are certain conflicts of interest between us and our officers and directors. They have other business interests to which they currently devote attention, and are expected to continue to do so. As a result, conflicts of interest may arise that can be resolved only through their exercise of judgment in a manner which is consistent with their fiduciary duties to the Company.
It is anticipated that our principal shareholders may actively negotiate or otherwise consent to the purchase of all or a portion of their common stock as a condition to, or in connection with, a proposed merger or acquisition transaction. In this process, our principal shareholders may consider their own personal pecuniary benefit rather than the best interests of our other shareholders, and the other shareholders are not expected to be afforded the opportunity to approve or consent to any particular stock buy-out transaction.
B. Need for Additional Financing. We have very limited funds, and such funds are unlikely to be adequate to take advantage of any available business opportunities. Even if our funds prove to be sufficient to acquire an interest in, or complete a transaction with, a business opportunity, we may not have enough capital to exploit the opportunity. Our ultimate success may depend upon our ability to raise additional capital. We have not investigated the availability, source, or terms that might govern the acquisition of additional capital and will not do so until we determine a need for additional financing.
If additional capital is needed, there is no assurance that funds will be available from any source or, if available, that they can be obtained on terms acceptable to us. If such funds are not available, our operations will be limited to those that can be financed with our modest capital.
C. Regulation of Penny Stocks. Our securities, when available for trading, will be subject to a Securities and Exchange Commission rule that imposes special sales practice requirements upon broker-dealers who sell such securities to persons other than established customers or accredited investors. For purposes of the rule, the phrase "accredited investors" means, in general terms, institutions with assets in excess of $5,000,000, or individuals having a net worth in excess of $1,000,000 or having an annual income that exceeds $200,000 (or that, when combined with a spouse's income, exceeds $300,000). For transactions covered by the rule, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser's written agreement to the transaction prior to the sale. Consequently, the rule may affect the ability of broker-dealers to sell our securities and also may affect the ability of our shareholders in this offering to sell their securities in any market that might develop.
Shareholders should be aware that, according to Securities and Exchange Commission Release No. 34-29093, the market for penny stocks has suffered from patterns of fraud and abuse. Such patterns include (i) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (iii) "boiler room" practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (iv) excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and (v) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses. The Company's management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities.
D. No Operating History or Revenue and Minimal Assets. The Company has had no operating history nor any revenues or earnings from operations since 1999. The Company has no significant assets or significant financial resources. The Company will, in all likelihood, sustain operating expenses without corresponding revenues, at least until the consummation of a business combination. This may result in the Company incurring a net operating loss which will increase continuously until the Company can consummate a business combination with a profitable business opportunity. There is no assurance that the Company can identify such a business opportunity and consummate such a business combination.
E. No Assurance of Success or Profitability. There is no assurance that we will acquire a business opportunity. Even if we should become involved in a business opportunity, there is no assurance that it will generate revenues or profits, or that the market price of our common stock will be increased thereby.
F. Possible Business - Not Identified and Highly Risky. We have not identified and have no commitments to enter into or acquire a specific business opportunity. Therefore we can disclose the risks and hazards of a business or opportunity that we may enter into in only a general manner, and cannot disclose the risks and hazards of any specific business or opportunity. An investor can expect a potential business opportunity to be quite risky. Our acquisition of or participation in a business opportunity will likely be highly illiquid and could result in a total loss to us and our shareholders if the business or opportunity proves to be unsuccessful.
G. Type of Business Acquired. The type of business to be acquired may be one that desires to avoid affecting its own public offering and the accompanying expense, delays, uncertainties, and federal and state requirements which purport to protect investors. Because of our limited capital, it is more likely than not that any acquisition will involve other parties whose primary interest is the acquisition of control of a publicly traded company. Moreover, any business opportunity acquired may be currently unprofitable or present other negative factors.
H. Impracticability of Exhaustive Investigation. Our limited funds and the lack of full-time management will likely make it impracticable to conduct a complete and exhaustive investigation and analysis of a business opportunity before we commit to such opportunity. Management decisions, therefore, will likely be made without detailed feasibility studies, independent analysis, market surveys and the like, which, if we had more funds, would be desirable. We will be particularly dependent in making decisions upon information provided by the promoter, owner, sponsor, or others associated with the business opportunity seeking our participation. A significant portion of our available funds may be expended for investigative expenses and other expenses related to preliminary aspects of completing an acquisition transaction, whether or not any business opportunity investigated is eventually acquired.
I. Lack of Diversification. Because of our limited financial resources, it is unlikely that we will be able to diversify our acquisitions or operations. This probable inability to diversify our activities into more than one area will subject us to economic fluctuations within a particular business or industry and therefore increase the risks associated with our operations.
J. Requirement of Audited Financial Statements May Disqualify Business Opportunities. Management of the Company believes that any potential business opportunity must provide audited financial statements for review, and for the protection of all parties to the business combination. One or more attractive business opportunities may choose to forego the possibility of a business combination with the Company, rather than incur the expenses associated with preparing audited financial statements.
K. Other Regulation. An acquisition we make may be of a business that is subject to regulation or licensing by federal, state, or local authorities. Compliance with such regulations and licensing can be expected to be a time-consuming, expensive process and may limit our other investment opportunities.
L. Dependence Upon Management; Limited Participation of Management. We will be heavily dependent upon the skills, talents, and abilities of our officers and directors to implement our business plan, and may, from time to time, find that the inability of such persons to devote their full-time attention to our business results in a delay in progress toward implementing our business plan. Furthermore, we will be entirely dependent upon the experience of our officers and directors in seeking, investigating, and acquiring a business and in making decisions regarding our operations. Because investors will not be able to evaluate the merits of our possible business acquisitions, they should critically assess the information concerning our officers and directors.
M. Lack of Continuity in Management. The Company does not have an employment agreement with any of its officers or directors, and as a result, there is no assurance that they will continue to manage the Company in the future. In connection with the acquisition of a business opportunity, it is likely the current officers and directors of the Company will resign. A decision to resign will be based upon the identity of the business opportunity and the nature of the transaction, and is likely to occur without the vote or consent of the shareholders of the Company.
N. Indemnification of Officers and Directors. Our Articles of Incorporation provide that we may indemnify our directors, officers, employees, and agents to the fullest extent permitted by Minnesota law. We will also bear the expenses of such litigation for any of our directors, officers, employees, or agents, upon such person's promise to repay us if it is ultimately determined that any such person shall not have been entitled to indemnification. This indemnification policy could result in substantial expenditures which we may be unable to recoup.
O. Dependence Upon Outside Advisors. To supplement the business experience of our officers and directors, we may be required to employ accountants, technical experts, appraisers, attorneys, or other consultants or advisors. The selection of any such advisors will be made by our officers without any input from shareholders. Furthermore, it is anticipated that such persons may be engaged on an "as needed" basis without a continuing fiduciary or other obligation to the Company. In the event management considers it necessary to hire outside advisors, they may elect to hire persons who are affiliates, if they are able to provide the required services.
P. Leveraged Transactions. There is a possibility that any acquisition of a business opportunity we make may be leveraged, i.e., we may finance the acquisition of the business opportunity by borrowing against the assets of the business opportunity to be acquired, or against the projected future revenues or profits of the business opportunity. This could increase our exposure to losses. A business opportunity acquired through a leveraged transaction is profitable only if it generates enough revenues to cover the related debt and expenses. Failure to make payments on the debt incurred to purchase the business opportunity could result in the loss of a portion or all of the assets acquired. There is no assurance that any business opportunity acquired through a leveraged transaction will generate sufficient revenues to cover the related debt and expenses.
Q. Competition. The search for potentially profitable business opportunities is intensely competitive. We expect to be at a disadvantage when competing with many firms that have substantially greater financial and management resources and capabilities than we do. These competitive conditions will exist in any industry in which we may become interested.
R. No Foreseeable Dividends. We have not paid cash dividends on our common stock and do not anticipate paying such dividends in the foreseeable future.
S. Loss of Control by Present Management and Shareholders. We may consider an acquisition in which we would issue as consideration for the business opportunity to be acquired, an amount of our authorized but unissued common stock that would, upon issuance, represent the great majority of the voting power and equity of the Company. The result of such an acquisition would be that the acquired company's shareholders and management would control the Company, and our management could be replaced by persons unknown at this time. Such a merger would result in a greatly reduced percentage of ownership by our current shareholders.
T. No Public Market Exists. There is no public market for our common stock, and no assurance can be given that a market will develop or that a shareholder ever will be able to liquidate his investment without considerable delay, if at all. If a market should develop, the price may be highly volatile. Factors such as those discussed in this "Risk Factors" section may have a significant impact upon the market price of the securities. Because of the low price of the securities, many brokerage firms may not be willing to effect transactions in the securities. Even if a purchaser finds a broker willing to effect a transaction in these securities, the combination of brokerage commissions, state transfer taxes, if any, and any other selling costs may exceed the selling price. Further, many lending institutions will not permit the use of such securities as collateral for any loans.
U. Government Regulations. Although we will be subject to the reporting requirements under the Exchange Act, management believes we will not be subject to regulation under the Investment Company Act of 1940, as amended (the "Investment Company Act"), since we will not be engaged in the business of investing or trading in securities. If we engage in business combinations which result in our holding passive investment interests in a number of entities, we could be subject to regulation under the Investment Company Act. If so, we would be required to register as an investment company and could be expected to incur significant registration and compliance costs. We have obtained no formal determination from the SEC as to our status under the Investment Company Act and, consequently, violation of the Investment Company Act could subject us to material adverse consequences.
V. Potential Acquisitions. If we enter into a business combination with a foreign company, we will be subject to risks inherent in business operations outside of the United States. These risks include, for example, currency fluctuations, regulatory problems, punitive tariffs, unstable local tax policies, trade embargoes, risks related to shipment of raw materials and finished goods across national borders and cultural and language differences. Foreign economies may differ favorably or unfavorably from the United States economy in growth of gross national product, rate of inflation, market development, rate of savings, and capital investment, resource self-sufficiency and balance of payment positions, and in other respects.
ITEM 2. FINANCIAL INFORMATION
General Business Plan
At this time, the Company's purpose is to seek, investigate and, if such investigation warrants, acquire an interest in business opportunities presented to it by persons or firms who or which desire to seek the perceived advantages of an Exchange Act registered corporation. The Company will not restrict its search to any specific business, industry, or geographical location and the Company may participate in a business venture of virtually any kind or nature. This discussion of the proposed business is intentionally general and is not meant to be restrictive of the Company's virtually unlimited discretion to search for and enter into potential business opportunities. Management anticipates that it may be able to participate in only one potential business venture because the Company has nominal assets and limited financial resources. See "FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA." This lack of diversification should be considered a substantial risk to shareholders of the Company because it will not permit the Company to offset potential losses from one venture against gains from another.
The Company may seek a business opportunity with entities which have recently commenced operations, or which wish to utilize the public marketplace in order to raise additional capital in order to expand into new products or markets, to develop a new product or service, or for other corporate purposes. The Company may acquire assets and establish wholly-owned subsidiaries in various businesses or acquire existing businesses as subsidiaries.
The Company intends to advertise and promote the Company privately. The Company has not yet prepared any notices or advertisements.
The Company anticipates that the selection of a business opportunity in which to participate will be complex and extremely risky. Due to general economic conditions, rapid technological advances being made in some industries and shortages of available capital, management believes that there are numerous firms seeking the perceived benefits of a publicly registered corporation. Such perceived benefits may include facilitating or improving the terms on which additional equity financing may be sought, providing liquidity for incentive stock options or similar benefits to key employees, providing liquidity (subject to restrictions of applicable statutes), for all shareholders and other factors.
The Company has, and will continue to have, little or no capital with which to provide the owners of business opportunities with any significant cash or other assets. However, management believes the Company will be able to offer owners of acquisition candidates the opportunity to acquire a controlling ownership interest in a publicly registered company without incurring the cost and time required to conduct an initial public offering. The owners of the business opportunities will, however, incur significant legal and accounting costs in connection with the acquisition of a business opportunity, including the costs of preparing Form 8-K's, 10-K's and 10-Q's, agreements and related reports and documents. The Securities Exchange Act of 1934 (the "Exchange Act"), specifically requires that any merger or acquisition candidate comply with all applicable reporting requirements, which include providing audited financial statements to be included within the numerous filings relevant to complying with the Exchange Act. The officers and directors of the Company have not conducted market research and are not aware of statistical data which would support the perceived benefits of a merger or acquisition transaction for the owners of a business opportunity.
The analysis of new business opportunities will be undertaken by, or under the supervision of, the officers and directors of the Company. Management intends to concentrate on identifying preliminary prospective business opportunities, which may be brought to its attention through present associations of the Company's officers and directors. In analyzing prospective business opportunities, management will consider such matters as the available technical, financial and managerial resources; working capital and other financial requirements; history of operations, if any; prospects for the future; nature of present and expected competition; the quality and experience of management services which may be available and the depth of that management; the potential for further research, development, or exploration; specific risk factors not now foreseeable but which then may be anticipated to impact the proposed activities of the Company; the potential for growth or expansion; the potential for profit; the perceived public recognition of acceptance of products, services, or trades; name identification; and other relevant factors The Company will not acquire or merge with any company for which audited financial statements cannot be obtained prior to the closing of the proposed transaction.
The officers of the Company have limited experience in managing companies similar to the Company and shall rely upon their own efforts, in accomplishing the business purposes of the Company. The Company may from time to time utilize outside consultants or advisors to effectuate its business purposes described herein. No policies have been adopted regarding use of such consultants or advisors, the criteria to be used in selecting such consultants or advisors, the services to be provided, the term of service, or regarding the total amount of fees that may be paid. However, because of the limited resources of the Company, it is likely that any such fee the Company agrees to pay would be paid in stock and not in cash.
The Company will not restrict its search for any specific kind of firms, but may acquire a venture which is in its preliminary or development stage, which is already in operation, or in essentially any stage of its corporate life. It is impossible to predict at this time the status of any business in which the Company may become engaged, in that such business may need to seek additional capital, may desire to have its shares publicly traded, or may seek other perceived advantages which the Company may offer. However, the Company does not intend to obtain funds in one or more private placements to finance the operation of any acquired business opportunity until such time as the Company has successfully consummated such a merger or acquisition.
It is anticipated that the Company will incur nominal expenses in the implementation of its business plan described herein. The Company has limited capital with which to pay these anticipated expenses.
ACQUISITION OF OPPORTUNITIES
In implementing a structure for a particular business acquisition, the Company may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another corporation or entity. It may also acquire stock or assets of an existing business. On the consummation of a transaction, it is probable that the present management and shareholders of the Company will no longer be in control of the Company. In addition, the Company's directors may, as part of the terms of the acquisition transaction, resign and be replaced by new directors without a vote of the Company's shareholders or may sell their stock in the Company. Any and all such sales will only be made in compliance with the securities laws of the United States and any applicable state.
It is anticipated that any securities issued in any such reorganization would be issued in reliance upon exemption from registration under applicable federal and state securities laws. In some circumstances, however, as a negotiated element of its transaction, the Company may agree to register all or a part of such securities immediately after the transaction is consummated or at specified times thereafter. If such registration occurs, of which there can be no assurance, it will be undertaken by the surviving entity after the Company has successfully consummated a merger or acquisition and the Company is no longer considered a "shell" company. The issuance of substantial additional securities and their potential sale into any trading market which may develop in the Company's securities may have a depressive effect on the value of the Company's securities in the future, if such a market develops, of which there is no assurance.
With respect to any merger or acquisition, the negotiations with target company management is expected to focus on the percentage of the Company which the target company shareholders would acquire in exchange for all of their shareholdings in the target company. Depending upon, among other things, the target company's assets and liabilities, the Company's shareholders will in all likelihood hold a substantially lesser percentage ownership interest in the Company following any merger or acquisition. The percentage ownership may be subject to significant reduction in the event the Company acquires a target company with substantial assets. Any merger or acquisition effected by the Company can be expected to have a significant dilutive effect on the percentage of shares held by the Company's then shareholders.
The Company will participate in a business opportunity only after the negotiation and execution of appropriate written agreements. Although the terms of such agreements cannot be predicted, generally such agreements will require some specific representations and warranties by all of the parties thereto, will specify certain events of default, will detail the terms of closing and the conditions which must be satisfied by each of the parties prior to and after such closing, will outline the manner of bearing costs, including costs associated with the Company's attorneys and accountants, will set forth remedies on default and will include miscellaneous other terms.
As stated hereinabove, the Company will not acquire or merge with any entity which cannot provide independent audited financial statements prior to the closing of the proposed transaction. Upon the effective date of this registration statement, the Company is subject to all of the reporting requirements included in the Exchange Act. Included in these requirements is the affirmative duty of the Company to file independent audited financial statements as part of its Form 8-K to be filed with the Securities and Exchange Commission upon consummation of a merger or acquisition, as well as the Company's audited financial statements included in its annual report on Form 10-K. The Company does not intend to provide the Company's security holders with any disclosure documents, including audited financial statements, concerning an acquisition or merger candidate and its business prior to the consummation of any acquisition or merger transaction.
The Company will remain an insignificant participant among the firms which engage in the acquisition of business opportunities. There are many established venture capital and financial concerns which have significantly greater financial and personnel resources and technical expertise than the Company. In view of the Company's extremely limited financial resources and limited management availability, the Company will continue to be at a significant competitive disadvantage compared to the Company's competitors.
ITEM 3. PROPERTIES
The Company has no properties and at this time has no agreements to acquire any properties. The Company currently maintains a mailing address at 5353 Manhattan Circle, Suite 101, Boulder, CO 80303, which is the address of its President. The Company pays no rent for the use of this mailing address. The Company does not believe that it will need to maintain an office at any time in the foreseeable future in order to carry out its plan of operations described herein.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANGEMENT
Principal Stockholders
The following table sets forth certain information as of August 31, 2010 regarding the beneficial ownership of the Company's common stock by (i) each stockholder known by the Company to be the beneficial owner of more than 5% of the Company's common stock, (ii) by each director and executive officer of the Company and (iii) by all executive officer's and directors of the Company as a group. Each of the persons named in the table has sole voting and investment power with respect to common stock beneficially owned.
NAME AND ADDRESS NUMBER OF PERCENTAGE
SHARES OWNED OF SHARES
OR CONTROLLED OWNED
Michael Friess 1,977,475 25.05%
5353 Manhattan Circle Ste 101
Boulder, Colorado 80303
Sanford Schwartz 1,977,475 25.05%
5353 Manhattan Circle Ste 101
Boulder, Colorado 80303
Nick T Boosalis 538,194 6.82%
212 2nd St SE Suite 224
Minneapolis, MN 55414
The Boosalis Group 618,039 7.83%
212 2nd St SE Suite 224
Minneapolis, MN 55414
Desfaire 1,100,000 13.93%
212 2nd St SE Suite 224
Minneapolis, MN 55414
Richard Dillon 576,571 7.30%
703 Oakland Ave
St. Paul, MN 55102
All Officers and Directors 3,954,950 50.10%
as a Group
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ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS
Officers and Directors
The following table sets forth certain information concerning each of the Company's directors and executive officers:
NAME AGE POSITION
Michael Friess 60 Chairman of the Board
President and CEO
Sanford Schwartz 59 Vice President, Director
Chloe DiVita 33 Treasurer, Secretary,
Director and CFO
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There are no agreements or understandings for any officer or director to resign at the request of another person and none of the above named officers and directors are acting on behalf of or will act at the direction of any other person.
There is no family relationship between any director or executive officer of the Company.
The Board of Directors presently has no committees.
Set forth below are the names of all directors and executive officers of the Company, all positions and offices with the Company held by each such person, the period during which he has served as such, and the business experience of such persons during at least the last five years:
Michael Friess is a self-employed attorney licensed to practice law in the State of Colorado. He was a partner from January 1983 to December 1993 in the New York City law firm of Schulte, Roth & Zabel, where his practice emphasized taxation. Mr. Friess has served as a Director and Officer of the Company since April 2009. Mr. Friess served on the Board of Directors of Oralabs Holding Corporation (NASDAQ: OLAB) from September 1997 until December 2006.
Chloe DiVita joined the Company as an Officer and Director in April 2009. For the past eight years, Mrs. DiVita has been a self-employed accountant and business development consultant partnering on many projects with Creative Business Strategies, LLC, a business consulting firm.
Sanford Schwartz has been a director of the Company since April 2009. Mr. Schwartz is the Chairman of Creative Business Strategies, LLC, a business consulting firm in Boulder, Colorado co-founded by Mr. Schwartz in 1985.
Previous Blank-Check Experience
Mr. Michael Friess, President and a director and executive officer of the Company, Mr. Sanford Schwartz a director of the Company, and Mrs. Chloe DiVita, CFO and director of the Company, have all been involved either as an officer or director, or both, with other blank-check companies, which have completed some form of corporate reorganization. The officers and directors of the Company intend to work on developing additional registered blank check companies. The following is a list of the blank-check companies with which the Company's officers and directors have previously been involved during the last five years:
Hemcure, Inc. (HMCU), Commission File #000-51543, was initially registered in May of 1987. The registrant was organized to provide administrative and marketing services to physicians or physician groups who emphasize outpatient non-surgical treatment for hemorrhoids. During June 2006, majority ownership and control of HMCU changed and became Aurasound, Inc. listed on the OTCBB symbol (ARAU). Current officers and directors of Fona, Inc. are not currently officers, directors or employees of ARAU and, therefore, have no direct knowledge of the business operations or possible pending acquisition, business combinations or mergers of ARAU. ARAU appears to be current in all of its filings with the Securities and Exchange Commission.
Implant Technologies, Inc. (IMLT), Commission File #000-17064, initially registered in 1980 was formed for the purpose of developing and marketing medical products. From April 2006 to July, 2007, Michael Friess served as Secretary and Treasurer, and Sanford Schwartz served as a Director of IMLT. During July 2007, majority ownership and control of IMLT changed and became Oasis Online Technologies Corp listed on the OTCBB symbol (OOLN), a company that is planning acquisitions in the online security and authentication market. Current officers and directors of Fona, Inc. are not currently officers, directors or employees of OOLN and, therefore, have no direct knowledge of the business operations or possible pending acquisition, business combinations or mergers of OOLN. OOLN appeared to be current in its filings with the Securities and Exchange Commission through May 2009.
Discovery Technologies, Inc. (DSVY), Commission File #000-18606, initially registered in 1987 was formed to design, manufacture and market video products that transmit pictures over standard voice-grade telephone lines. In June 2006, the sole remaining director, appointed Michael Friess as President and CEO of the company, and Sanford Schwartz as Director. During December 2007, majority ownership and control of DSVY changed and became China Green Agriculture listed on the OTCBB symbol (CGAG). Current officers and directors of the Company are not currently officers or directors or employees of CGAG and, therefore, have no direct knowledge of the business operations or possible pending acquisitions, business combinations or mergers of CGAG. CGAG appears to be current in its filings with the Securities and Exchange Commission.
Certified Technologies Corporation (CFDT), Commission File #000-52786, initially registered in 1984 was formed to market a fire retardant chemical formulation to the commercial aviation and business furniture industries. In February 2007, the sole remaining director, appointed Michael Friess as President and CEO, Sanford Schwartz as Director, and Chloe DiVita as Secretary and Treasurer of Certified Technologies Corporation. During May 2008, majority ownership and control of CFDT changed and became Zhaoheng Hydropower CO listed on the OTCBB symbol (ZHYP). Current officers and directors of the Company are not currently officers or directors or employees of ZHYP and, therefore, have no direct knowledge of the business operations or possible pending acquisitions, business combinations or merger of ZHYP. ZHYP appeared to be current in all of its filings with the Securities and Exchange Commission through May, 2009, and has since moved the Company from the United States and filed a Form 15-12G terminating its filing requirements with the SEC.
Henry County Plywood Corporation (HRYC), Commission File #000-53208, initially registered in 1948 was formed to purchase, lease, sell, manufacture and deal in lumber, and other wood products. In August 2006, the remaining board appointed Michael Friess as President and CEO of the company, and Sanford Schwartz as Director. In October 2007, Messrs Friess and Schwartz resigned as officers and directors of the Company, and in May 2008 Mr. Friess was reappointed to the Board. In January 2009, majority ownership and control of HRYC changed and became Sino Green land Corp listed on the OTCBB symbol (SGLA). Current officers and directors of the Company are not currently officers or directors or employees of SGLA and, therefore, have no direct knowledge of the business operations or possible pending acquisitions, business combinations or merger of SGLA. SGLA appears to be current in all of its filings with the Securities and Exchange Commission.
P I Services, Inc. (PISV), Commission File #000-53263, had its initial public offering in September 1988. The company was formed as Sweet Little Deal. In August 2007, the remaining board appointed certain officers and directors of Fona, Inc. as the new officers and directors of Physicians. In January 2009, Physicians merged with P I Services, Inc., a Nevada Corporation. In March 2010, majority ownership and control of PISV changed and became China Lithium Technologies Inc. listed on the OTCBB symbol (CLTT). Current officers and directors of the Company are not currently officers or directors or employees of CLTT and, therefore, have no direct knowledge of the business operations or possible pending acquisitions, business combinations or merger of CLTT. CLTT appears to be current in all of its filing with the Securities and Exchange Commission.
Conflicts of Interest
The Company's officers and directors have in the past and may in the future be officers and directors of other companies of a similar nature and with a similar purpose as the Company. Consequently, there are potential inherent conflicts of interest in Mr. Friess, Mr. Schwartz and Mrs. DiVita serving as officers and directors of the Company. Insofar as the officers and directors are engaged in other business activities, management anticipates it will devote only a minor amount of time to the Company's affairs. The officers and directors of the Company may in the future become shareholders, officers or directors of other companies which may be formed for the purpose of engaging in business activities similar to those conducted by the Company. The Company does not currently have a right of first refusal pertaining to opportunities that come to management's attention even if the opportunities relate to the Company's proposed business operations.
The officers and directors are, so long as they are officers or directors of the Company, subject to the restriction that all opportunities contemplated by the Company's plan of operation which come to their attention in the performance of their duties as officers and directors of the Company will be considered opportunities of, and be made available to the Company. However, they are under no obligation to make any opportunities that come to their attention in the performance of their duties for any other companies or in any other manner available to the Company. Except as set forth above, the Company has not adopted any other conflict of interest policy with respect to such transactions.
Investment Company Act of 1940
Management believes the Company is not subject to regulation under the Investment Company Act of 1940, insofar as the Company will not be engaged in the business of investing or trading in securities. In the event the Company engages in business combinations, which result in the Company holding passive investment interests in a number of entities, the Company could be subject to regulation under the Investment Company Act of 1940. In such event, the Company would be required to register as an investment company and could be expected to incur significant registration and compliance costs. The Company has obtained no formal determination from the Securities and Exchange Commission as to the status of the Company under the Investment Company Act of 1940. Any violation of such Act would subject the Company to material adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION
None of the Company's officers or directors receives any compensation for their respective services rendered to the Company, nor have they received such compensation. They have agreed to act without compensation until authorized by the Board of Directors, which is not expected to occur until the Company has generated revenues from operations after consummation of a merger or acquisition. As of the date of this registration statement, the Company has minimal funds available to pay officers or directors. Further, none of the officers or directors are accruing any compensation pursuant to any agreement with the Company.
It is possible that, after the Company successfully consummates a merger or acquisition with an unaffiliated entity, that entity may desire to employ or retain one or more members of the Company's management for the purposes of providing services to the surviving entity, or otherwise provide other compensation to such persons. However, the Company has adopted a policy whereby the offer of any post-transaction remuneration to members of management will not be a consideration in the Company's decision to undertake any proposed transaction. Each member of management has agreed to disclose to the Company's Board of Directors any discussions concerning possible compensation to be paid to them by any entity which proposes to undertake a transaction with the Company and further, to abstain from voting on such transaction. Therefore, as a practical matter, if each member of the Company's Board of Directors is offered compensation in any form from any prospective merger or acquisition candidate, the proposed transaction will not be approved by the Company's Board of Directors as a result of the inability of the Board to affirmatively approve such a transaction.
It is possible that persons associated with management may refer a prospective merger or acquisition candidate to the Company. In the event the Company consummates a transaction with any entity referred by associates of management, it is possible that such an associate will be compensated for their referral. It is anticipated that this fee will be either in the form of restricted common stock issued by the Company as part of the terms of the proposed transaction, or will be in the form of cash consideration. However, if such compensation is in the form of cash, such payment will be tendered by the acquisition or merger candidate, because the Company has minimal cash available. The amount of such compensation, if any, cannot be determined as of the date of this registration statement.
No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by the Registrant for the benefit of its employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
No officer, director, promoter, or affiliate of the Company has or proposes to have any direct or indirect material interest in any asset that we propose to acquire through security holdings, contracts, options, or otherwise.
We may pay any consulting or finder's fee for consulting services to assist management in evaluating a prospective business opportunity in stock or in cash. Any such issuance of stock would be made on an ad hoc basis. Accordingly, we are unable to predict whether or in what amount such compensation might be made.
We currently do not anticipate that we will pay any salary, consulting fee, or finder's fee to any of our directors or executive officers, or to any other affiliate except as described under "Executive Compensation" above.
We maintain our offices at the offices of our president, for which we pay no rent. We anticipate that following the consummation of a business combination with an acquisition candidate, our office will be moved, but cannot predict future office or facility arrangements with our officers, directors or affiliates.
Although we have no current plans to do so, it is possible that we may enter into an agreement with an acquisition candidate requiring the sale of all or a portion of the common stock held by our largest shareholders to the acquisition candidate or principals thereof, or to other individuals or business entities, or requiring some other form of payment to our current shareholders, or requiring the future employment of specified officers and payment of salaries to them. It is more likely than not that any sale of securities by our current shareholders to an acquisition candidate would be at a price substantially higher than that originally paid by such shareholders. Any payment to current shareholders in the context of an acquisition in which we are involved would be determined entirely by the largely unforeseeable terms of a future agreement with an unidentified business entity.
On April 1, 2009, the Board of Directors approved the issuance of 3,954,950 shares of our common stock to two individuals, (Sanford Schwartz and Michael Friess), for a $10,000 cash payment and a note for an additional $10,000. The note was satisfied in May, 2009. This resulted in a change in control in the Company.
During the six months ended June 30, 2010, Nick Boosalis, a director at the time, and affiliates, paid for expenses of the Company totaling $4,680. Additionally, affiliates of Sanford Schwartz and Michael Friess, officers and directors of the Company, paid for expenses of the Company from August 2008 to Dec 2009 totaling $9,666.
Securities issued by blank check companies cannot be resold under Rule 144, but must be registered under the Securities Act of 1933. The Company has no obligation to register these or any other shares under the Securities Act of 1933.
The proposed business activities described herein classify the Company as a "blank check" company. Many states have enacted statutes, rules and regulations limiting the sale of securities of "blank check" companies in their respective jurisdictions. Management does not intend at this time to undertake any efforts to cause a market to develop in the Company's securities until such time as the Company has successfully implemented its business plan described herein.
ITEM 8. LEGAL PROCEEDINGS
Currently, there are no legal proceedings.
ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(a) Market Information.
There is not a market for the Company's securities. There are no outstanding options or warrants to purchase shares of common stock or securities convertible into shares of the Company's common stock. The Company has no obligations to register any of its shares of common stock under the Securities Act of 1933. As of July 26, 2010, 873,191 of the Company's outstanding shares Securities Act of 1933 are eligible for transfer without registration under the Act.
(b) Holders.
As of September 20, 2010, there were approximately 272 holders of the Company's Common Stock.
(c) Dividends.
No dividends have been paid by the Company on any of its securities since the renewal of its charter and such dividends are not contemplated in the foreseeable future.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES
On December 31, 2007, the Board of Directors approved the issuance of 498,237
shares of the Company's common stock to Nick T. Boosalis in exchange for
forgiveness of approximately $74,736 of loans to the Company. The shares were
issued without registration under the Securities Act of 1933 in reliance upon
Section 4(2) of the Act. No underwriters were involved and no commissions or
other consideration was paid in connection with the exchange.
On December 31, 2007, the Board of Directors approved the issuance of 322,047
shares of the Company's common stock to Richard Dillon in exchange for
forgiveness of approximately $48,307 of loans to the Company. The shares were
issued without registration under the Securities Act of 1933 in reliance upon
Section 4(2) of the Act. No underwriters were involved and no commissions or
other consideration was paid in connection with the exchange.
On December 31, 2007, the Board of Directors approved the issuance of 1,100,000 shares of the Company's common stock to Desfaire in exchange for consideration of $11,000 cash previously paid to the Company in 2002 and 2003 and for payment by Desfaire in prior years of more than $125,000 of software development costs on behalf of the company. The shares were issued without registration under the Securities Act of 1933 in reliance upon Section 4(2) of the Act. No underwriters were involved and no commissions or other consideration was paid in connection with the exchange.
On December 31, 2008, the Board of Directors approved the issuance of 39,957
share of the Company's common stock to Nick T. Boosalis in exchange for
forgiveness of approximately $5,993 of loans to the Company. The shares were
issued without registration under the Securities Act of 1933 in reliance upon
Section 4(2) of the Act. No underwriters were involved and no commissions or
other consideration was paid in connection with the exchange.
On April 1, 2009, the Board of Directors approved the issuance of 3,954,950 shares of its common stock representing 50.1% of its common stock outstanding to two individuals, (Sanford Schwartz and Michael Friess), for a $10,000 cash payment and a note for an additional $10,000. The note was settled for cash in on May 1, 2009. The capital will be used to pay for the preparation of documents necessary to register the Company's common stock pursuant to Section 12 (g) of the Securities Exchange Act of 1934. This transaction resulted in a change in control of the Company. The shares were issued without registration under the Securities Act of 1933 in reliance upon Section 4(2) of the Act. No underwriters were involved and no commissions or other consideration was paid in connection with the exchange.
ITEM 11. DESCRIPTION OF REGISTRANT'S SECURITIES
Common Stock
Our Articles of Incorporation authorize the issuance of 780,000,000 shares of common stock with a par value of $0.001 per share. As of August 31, 2010 there were 7,894,111 shares of common stock issued and outstanding. Each record holder of common stock is entitled to one vote for each share held on all matters properly submitted to the shareholders for their vote. Cumulative voting for the election of directors is not permitted by the Articles of Incorporation.
Holders of outstanding shares of common stock are entitled to such dividends as may be declared from time to time by the Board of Directors out of legally available funds; and, in the event of liquidation, dissolution or winding up of our affairs, holders are entitled to receive, ratably, the net assets of the Company available to stockholders. All of the issued and outstanding shares of common stock are, and all unissued shares when offered and sold will be, duly authorized, validly issued, fully paid, and nonassessable. To the extent we issue additional shares of our common stock, the relative interests of then existing shareholders may be diluted.
Preferred Stock
The Company's Articles of Incorporation authorize 20,000,000 shares of "blank check" preferred stock.
Transfer Agent
As of the date hereof, the company transfer agent is Corporate Stock Transfer, Inc. in Cherry Creek Colorado.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Articles of Incorporation of the Company provide that the Company shall indemnify its officers and directors to the fullest extent permitted by Nevada law as provided within NRS 78.7502 and NRS 78.784. In addition, a director of the Company shall not be personally liable to the Company or its shareholders for monetary damages for breach of fiduciary duty as a director provided such person acted in good faith and in a manner which he reasonable believed to be in or not opposed to the best interest of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
INDEX TO FINANCIAL STATEMENTS
FONA INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
with
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Report of Independent Registered Public Accounting Firm F-2
Financial Statements:
Balance Sheets F-3
Statements of Operations F-4, F-5
Statement of Changes in Stockholders' (Deficit) F-6
Statements of Cash Flows F-7, F-8
Notes to Financial Statements F-9
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
Fona, Inc.
We have audited the accompanying balance sheets of Fona, Inc. (A Development Stage Company) as of December 31, 2009 and 2008, and the related statements of operations, stockholders' (deficit), and cash flows for the two years ended December 31, 2009 and 2008. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Fona Inc. (A Development Stage Company) as of December 31, 2009 and 2008, and the results of its operations, stockholders' (deficit), and its cash flows for the two years ended December 31, 2009 and 2008, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 1, the Company has no business operations and has negative working capital and stockholders' (deficits), which raise substantial doubts about its ability to continue as a going concern. Management's plan in regard to this matter is also discussed in Note 1. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.
/s/ Schumacher & Associates, Inc. Schumacher & Associates, Inc. Certified Public Accountants 7931 S. Broadway #314 Littleton, Colorado 80122 September 21, 2010 |
FONA, INC.
(A Development Stage Company)
BALANCE SHEETS
ASSETS
June 30, December 31, December 31,
2010 2009 2008
----------- ----------- -----------
(Unaudited)
Current Assets:
Cash $ 12,605 $ 18,600 $ 14
Prepaid Expenses 175 350 350
----------- ----------- -----------
Total Current Assets 12,780 18,950 364
----------- ----------- -----------
TOTAL ASSETS $ 12,780 $ 18,950 $ 364
=========== =========== ===========
|
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current Liabilities:
Accounts payable $ 8,473 $ 12,079 $ 6,052
Accounts payable, related parties 15,165 14,502 5,922
----------- ----------- -----------
Total Current Liabilities 23,638 26,581 11,975
----------- ----------- -----------
TOTAL LIABILITIES 23,638 26,581 11,975
----------- ----------- -----------
Commitments and contingencies
(Notes 3 and 4)
Stockholders' (DEFICIT)
Preferred stock, $.001 par value
20,000,000 shares authorized,
no shares issued and outstanding -- -- --
Common stock, $.001 par value
780,000,000 shares authorized,
7,894,111 issued and outstanding
at March 31, 2010 and December 31,
2009 and 3,939,161 issued and
outstanding at December 31, 2008 7,894 7,894 3,939
Additional paid-in capital 1,214,066 1,214,066 1,198,021
Accumulated (Deficit) (1,200,940) (1,200,940) (1,200,940)
Accumulated (Deficit) during the
Development stage (31,878) (28,651) (12,631)
----------- ----------- -----------
TOTAL STOCKHOLDERS' (DEFICIT) (10,858) (7,631) (11,611)
----------- ----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' (DEFICIT) $ 12,780 $ 18,950 $ 364
=========== =========== ===========
|
The accompanying notes are an integral part of the financial statements.
FONA, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
Period From
August 1,
2008
(date of
Six Months Six Months development
Ended Ended stage) to
June 30, June 30, June 30,
2010 2009 2010
----------- ----------- -----------
Revenues $ -- $ -- $ --
----------- ----------- -----------
Expenses:
Accounting fees -- 355 1,004
Attorney fees 1,619 10,178 22,979
Corporate fees 870 1,162 2,032
Printing and mailing costs -- 1,056 1,056
Transfer agent fees 704 1,825 3,998
Other 34 772 809
----------- ----------- -----------
Total Expenses 3,227 15,348 31,878
----------- ----------- -----------
Net Operating (Loss) (3,227) (15,348) (31,878)
----------- ----------- -----------
Net Income (Loss) $ (3,227) $ (15,348) $ (31,878)
=========== =========== ===========
Per Share Nil Nil (.01)
=========== =========== ===========
Weighted Average Shares
Outstanding 7,894,111 6,092,412 6,554,387
=========== =========== ===========
|
The accompanying notes are an integral part of the financial statements.
FONA, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
For the
Period from
August 1,
2008
(date of
development
Year Year stage)
Ended Ended through
December 31, December 31, December 31,
2009 2008 2009
------------ ------------ ------------
Revenues $ -- $ -- $ --
------------ ------------ ------------
Operating Expenses:
Accounting fees 355 649 1,004
Attorney fees 10,225 16,012 21,360
Corporate fees 1,162 300 1,162
Printing and mailing costs 1,056 -- 1,056
Transfer agent fees 2,450 1,377 3,294
Other 772 33 775
------------ ------------ ------------
Total Expenses 16,020 18,371 28,651
Net Operating (Loss) (16,020) (18,371) (28,651)
------------ ------------ ------------
Net (Loss) from continuing
Operations (16,020) (18,371) (28,651)
------------ ------------ ------------
Discontinued Operations:
(Loss) from discontinued
operations -- (198) --
Gain from sale of asset -- 36,032 --
------------ ------------ ------------
Net (Loss) $ (16,020) $ 17,463 $ (28,651)
============ ============ ============
Per Share
Continuing Operations $ Nil (.01) Nil
Discontinued Operations Nil .01 Nil
------------ ------------ ------------
Total $ Nil $ Nil $ Nil
============ ============ ============
Weighted Average Shares
Outstanding 6,994,766 3,900,187 6,085,355
============ ============ ============
|
The accompanying notes are an integral part of the financial statements.
FONA, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' (DEFICIT)
For the Period from January 1, 2007 through June 30, 2010
(Period from January 1, 2010 to June 30, 2010 is unaudited)
Accumulated
(Deficit)
Additional During
Preferred Common Stock Paid In Accumulated Development
Stock Shares Amount Capital (Deficit) Stage Total
--------- --------- ----------- ----------- ----------- ----------- -----------
Balance at
January 1,
2008 -- 3,899,204 3,900 1,192,066 (1,231,033) -- (35,067)
Debt converted
to equity
at $.15 -- 39,957 39 5,955 -- -- 5,994
(Note 3)
Net loss-
year ended
December 31,
2008 -- -- -- -- 30,093 (12,631) 17,462
--------- --------- ----------- ----------- ----------- ----------- -----------
Balance at
December
31, 2008 -- 3,939,161 3,939 1,198,021 (1,200,940) (12,631) (11,611)
Issuance of
stock for cash
at .005 -- 3,954,950 3,955 16,045 -- -- 20,000
(Note 3)
Net loss-
period ended
December 31,
2009 -- -- -- -- -- (16,020) (16,020)
--------- --------- ----------- ----------- ----------- ----------- -----------
Balance at
December 31,
2009 -- 7,894,111 7,894 1,214,066 (1,200,940) (28,651) (7,631)
Net loss-
period ended
June 30, 2010
(unaudited) -- -- -- -- -- (3,227) (3,227)
--------- --------- ----------- ----------- ----------- ----------- -----------
Balance at
June 30, 2010
(unaudited) -- 7,894,111 $ 7,894 $ 1,214,066 $(1,200,940) $ (31,878) $ (10,858)
========= ========= =========== =========== =========== =========== ===========
|
The accompanying notes are an integral part of the financial statements.
FONA, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Period From
August 1,
2008
(Date of
Development
For the Year Ended Stage) to
December 31, December 31,
2009 2008 2009
------------ ------------ ------------
Cash Flows from Operating
Activities of Continued Operations:
Net income(loss) $ (16,020) $ 17,463 $ (28,651)
Less: Net (loss) from Discontinued
Operations -- (35,834) --
------------ ------------ ------------
Net (loss) from Continuing Operations (16,020) (18,371) (28,651)
------------ ------------ ------------
Adjustments to reconcile net loss
To net cash (used in) operating activities:
Increase in accounts payable 6,026 6,470 12,738
------------ ------------ ------------
Net Cash (Used in) Operating
Activities (9,994) (11,901) (15,913)
------------ ------------ ------------
Cash Flows from Investing Activities:
Net Cash Provided by
Investing Activities -- -- --
------------ ------------ ------------
Cash Flows from Financing Activities:
Sale of common stock 20,000 -- 20,000
Advances from related party 8,580 11,915 14,502
------------ ------------ ------------
Net Cash Provided by
Financing Activities 28,580 11,915 34,502
------------ ------------ ------------
Increase (Decrease) in Cash 18,586 14 18,589
------------ ------------ ------------
Cash, Beginning of Period 14 -- 11
------------ ------------ ------------
Cash, End of Period $ 18,600 $ 14 $ 18,600
============ ============ ============
Interest Paid $ -- $ -- $ --
============ ============ ============
Income Taxes Paid $ -- $ -- $ --
============ ============ ============
Supplemental Disclosure of Non-Cash Transactions:
Conversion of debt for stock and
debt forgiveness $ -- $ 5,993 $ 5,993
The accompanying notes are an integral part of the financial statements.
F-7
|
FONA, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
Period From
August 1,
2008
(Date of
Development
For the Six Months Ended Stage) to
June 30, June 30,
2010 2009 2010
------------ ------------ ------------
Cash Flows from Operating
Activities of Continued Operations:
Net (loss) $ (3,227) $ (15,348) $ (31,878)
------------ ------------ ------------
Adjustments to reconcile net loss
to net cash (used in) operating activities:
Increase (Decrease) in accounts payable (3,606) 5,678 9,132
Decrease in prepaid expenses 175 175 175
------------ ------------ ------------
Net Cash (Used in) Operating
Activities (6,658) (9,495) (22,571)
------------ ------------ ------------
Cash Flows from Investing Activities:
Net Cash Provided by
Investing Activities -- -- --
------------ ------------ ------------
Cash Flows from Financing Activities:
Sale of common stock -- 20,000 20,000
Advances from related party 663 8,580 15,165
------------ ------------ ------------
Net Cash Provided by
Financing Activities 663 28,580 35,165
------------ ------------ ------------
Cash Flows from (Used In):
Discontinued Operations -- -- --
------------ ------------ ------------
Net cash provided by (used in)
Discontinued Operations -- -- --
------------ ------------ ------------
Increase (Decrease) in Cash (5,995) 19,085 12,594
------------ ------------ ------------
Cash, Beginning of Period 18,600 14 11
------------ ------------ ------------
Cash, End of Period $ 12,605 $ 19,098 $ 12,605
============ ============ ============
Interest Paid $ -- $ -- $ --
============ ============ ============
Income Taxes Paid $ -- $ -- $ --
============ ============ ============
|
The accompanying notes are an integral part of the financial statements.
FONA INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2009 and 2008
(References to the periods ended June 30, 2010 and 2009 are unaudited)
(1) Summary of Accounting Policies, and Description of Business
This summary of significant accounting policies of Fona Inc. (the "Company"), a "Development Stage Company", is presented to assist in understanding the Company's financial statements. The financial statements and notes are representations of the Company's management who is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles in the United States of America and have been consistently applied in the preparation of the financial statements.
(a) Organization and Description of Business
The Company was incorporated in November 1990 under the laws of the State of Minnesota. In March 2009, the Company held a shareholder meeting approving a migratory merger to Nevada and a name change to Fona, Inc., which became effective March 24, 2010.
The Company initially developed and marketed an interactive information and advertising service, but ceased all major operations in December, 1999. Currently the Company is a Development Stage Company with plans to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions.
(b) Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
(c) Per Share Information
Earnings (loss) per share of common stock is computed by dividing the net earnings (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings per share is not shown for periods in which the Company incurs a loss because it would be anti-dilutive.
(d) Basis of Presentation - Going Concern
The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplates continuation of the Company as a going concern. However, the Company has no business operations and has negative working capital and stockholders' (deficits), which raise substantial doubt about its ability to continue as a going concern.
In view of these matters, continuation as a going concern is dependent upon continued operations of the Company, which in turn is dependent upon the Company's ability to meet its financial requirements, raise additional capital, and the success of its future operations.
Management has opted to resume the filing of Securities and Exchange Commission (SEC) reporting documentation and then to seek a business combination. Management believes that this plan provides an opportunity for the Company to continue as a going concern.
(e) Recent Accounting Pronouncements
There were various accounting standards and interpretations issued during 2010, 2009 and 2008, none of which are expected to a have a material impact on the Company's consolidated financial position, operations or cash flows.
FONA INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2009 and 2008
(References to the periods ended June 30, 2010 and 2009 are unaudited)
(1) Summary of Accounting Policies, Continued
(f) Risks and Uncertainties
The Company is subject to substantial business risks and uncertainties inherent in starting a new business. There is no assurance that the Company will be able to complete a business combination.
(g) Revenue Recognition
It is the Company's policy that revenue is recognized in accordance with SEC Staff Accounting Bulletin (SAB) No. 104, "Revenue Recognition." Under SAB 104, product revenues (or service revenues) are recognized when persuasive evidence of an arrangement exists, delivery has occurred (or service has been performed), the sales price is fixed and determinable and collectability is reasonably assured.
(h) Cash and Cash Equivalents
The Company considers cash and cash equivalents to consist of cash on hand and demand deposits in banks with an initial maturity of 90 days or less.
(i) Fair Value of Financial Instruments
Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ASC Subtopic 825-10 ("ASC 825-10"), "Disclosures About Fair Value of Financial Instruments." ASC 825-10 requires disclosure of fair value information about financial instruments when it is practicable to estimate that value. The carrying amount of the Company's cash, cash equivalents, accounts payable, and accounts payable-related party approximate their estimated fair values due to their short-term maturities.
(j) Income Taxes
The Company records deferred taxes in accordance with Statement of Financial Accounting Standards (SFAS) ASC 740, "Accounting for Income Taxes." The statement requires recognition of deferred tax assets and liabilities for temporary differences between the tax bases of assets and liabilities and the amounts at which they are carried in the financial statements, the effect of net operating losses, based upon the enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized.
(k) Development stage
Based upon the Company's business plan, it is a development stage enterprise since planned principal operations have not yet commenced. Accordingly, the Company presents its financial statements in conformity with the accounting principals generally accepted in the United States of America that apply in establishing operating enterprises. As a development stage enterprise, the Company discloses the deficit accumulated during the development stage and the cumulative statements of operations and cash flows from commencement of development stage to the current balance sheet date. The development stage began August 1, 2008 when the Company commenced the process to become a publicly reporting company.
(l) Concentrations
Financial instruments that potentially subject the company to concentrations of credit risk consist principally of cash and cash equivalents. At June 30, 2010, December 31, 2009 and 2008, the Company had no amounts of cash or cash equivalents in financial institutions in excess of amounts insured by agencies of the U.S. Government.
FONA INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2009 and 2008
(References to the periods ended June 30, 2010 and 2009 are unaudited)
(1) Summary of Accounting Policies, Continued
(m) Unaudited Financial Statements
The balance sheet as of June 30, 2010, the statements of operations and cash flows for the six month periods ended June 30, 2010 and 2009, and the statement of stockholders' (deficit) for the six month period ended June 30, 2010, have been prepared by the Company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures, normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been condensed or omitted as allowed by such rules and regulations, and the Company believes that the disclosures are adequate to make the information presented not misleading. The results of operations for the six months ended June 30, 2010 are not necessarily indicative of results expected for the full year ending December 31, 2010. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and changes in financial position at June 30, 2010 and for all periods presented, have been made.
(n) Other
The Company has selected December 31 as its fiscal year end.
The Company has paid no dividends.
No advertising expense has been incurred.
The Company consists of one reportable business segment.
The Company has not entered into any leases.
(2) Income Taxes
Deferred income taxes arise from temporary timing differences in the recognition of income and expenses for financial reporting and tax purposes. The Company's deferred tax assets consist entirely of the benefit from net operating loss (NOL) carry forwards. The net operating loss carry forward if not used, will expire in various years through 2025, and is severely restricted as per the Internal Revenue code due to the change in ownership. The Company's deferred tax assets are offset by a valuation allowance due to the uncertainty of the realization of the net operating loss carry forwards. Net operating loss carry forwards may be further limited by other provisions of the tax laws.
The Company's deferred tax assets, valuation allowance, and change in valuation allowance are as follows:
Estimated Estimated
NOL Tax Change in
Carry- NOL Benefit Valuation Valuation Net Tax
Year Ending forward Expires from NOL Allowance Allowance Benefit
----------------- --------- ------- --------- --------- --------- -------
December 31, 2009 931,514 2025 107,077 (107,077) (-) --
December 31, 2008 915,494 2025 107,077 (107,077) (-) --
|
Income taxes at the statutory rate are reconciled to the Company's actual income taxes as follows:
Income tax benefit at statutory rate resulting from
net operating loss carryforward (15.0)%
State tax (benefit) net of Federal benefit (3.5)%
Deferred income tax valuation allowance 18.5%
-----------
Actual tax rate --
===========
|
FONA INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2009 and 2008
(References to the periods ended June 30, 2010 and 2009 are unaudited)
(3) Common Stock and Migratory Merger
Pursuant to the Articles of Incorporation of Fona, Inc., the Company is authorized to issue 780,000,000 common shares with $.001 par value. There were 7,894,111 shares of common stock issued and outstanding at December 31, 2009. In April 2009, the Company issued a total of 3,954,950 shares of common stock to two directors for $10,000 cash and a note for an additional $10,000. The note was satisfied in May 2009. This resulted in a change in control of the Company.
On March 3, 2009, the Board of Directors unanimously approved an Agreement and Plan of Merger effectively changing the name of the Company to Fona Inc., a Nevada corporation ("Re-incorporation Merger") and simultaneously adopting the capital structure of Fona Inc., which includes total authorized capital stock of 800,000,000, of which 780,000,000 are common stock and 20,000,000 are blank check preferred stock. There were no preferred shares outstanding as of December 31, 2009.
In accordance with the Agreement and Plan of Merger, effective March 24, 2009, Fonahome Corporation adopted the capital structure of Fona, Inc., which includes total authorized capital stock of 800,000,000 shares, of which 780,000,000 are common stock, with a par value of $.001 per share (the "Fona Common Stock") and 20,000,000 shares are blank check preferred stock, with a par value of $.001 per share (the "Preferred Stock"). In addition, on March 24, 2009, the issued and outstanding shares of our common stock automatically converted into shares of Fona Common Stock at a ratio of one (1) share of our currently outstanding common stock for one (1) share of Fona Common Stock.
All references in the accompanying financial statements to the number of shares authorized and outstanding have been retroactively adjusted to reflect the new capital structure and par values effective March 24, 2009.
On December 31, 2007, the Board of Directors approved the cancellation of 522,230 shares of common stock previously issued to PH Acquisition, Inc. in accordance with an assignment agreement dated March 1, 1999. The Board also authorized the issuance of 498,237 shares of common stock to Nick T. Boosalis for forgiveness of debt totaling $74,736 and 322,047 shares of common stock to Richard Dillon for forgiveness of debt totaling $48,307. At the same time, the Board approved the sale of 1,100,000 shares of common stock to Desfaire, Inc. for $11,000 previously paid to the company in 2002 and 2003 and for payment by Desfaire in prior years of more than $125,000 of software development costs on behalf of the Company.
On December 22, 2008, the Board of Directors approved the issuance of 39,957 shares of common stock to Nick T. Boosalis for forgiveness of debt totaling $5,993.
(4) Related Party Transactions
The Company uses the offices of its President for its minimal office facility needs for no consideration. No provision for these costs has been provided since it has been determined that they are immaterial.
At December 31, 2009 and 2008, the Company owed two separate related parties for expenses paid on behalf of the Company totaling $14,502 and $5,922, respectively. The advances are uncollateralized, bear no interest and are due on demand.
During the period from January 1, 2008 through January 22, 2008, the Company and one or more other entities were under common control and the existence of that control could result in operating results or financial position of the entity significantly different from those that would have been obtained if the entities were autonomous. In addition, during the period from January 1, 2008 through January 22, 2008, the Company received license revenues totaling approximately $1,900 (which are included in discontinued operations) from an entity controlled by a director.
FONA INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2009 and 2008
(References to the periods ended June 30, 2010 and 2009 are unaudited)
(5) Discontinued Operations
Since December 1999 the Company has had minimal operations. During December 1999 the Company stopped marketing its product due to lack of sales and potential profits. Following the Assignment Agreement effective on January 22, 2008 all assets and liabilities related to previous operations were assumed by a former director. The Company recognized a gain on the disposal of its assets, which had a net book value of $0, and liabilities of $36,032. During the period ended December 31, 2008 the company recognized a loss of ($198) related to the discontinued operations.
(6) Subsequent Events
The Company has evaluated events subsequent to December 31, 2009 and through the date the financial statements were available to be issued, to assess the need for potential recognition or disclosure in this report. No events were noted that require recognition or disclosure in the financial statements.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
There are no disagreements with the accountants on accounting and financial disclosures.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Index to Financial Statements
Balance Sheets F-3
Statements of Operations F-4, F-5
Statement of Changes in Stockholders' Equity F-6
Statements of Cash Flows F-7, F-8
Notes to Financial Statements F-9
(b) Index to Exhibits.
3.1 Articles of Incorporation of Fona, Inc.
3.2 Bylaws of Fona Inc.
3.3 Stock Purchase Agreement
4.1 Specimen Stock certificate
19.1 Assignment Agreement
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SIGNATURES
In accordance with Section 12 of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
REGISTRANT FONA INC.
(Date) September 16 , 2010
BY(Signature) /s/ Michael Friess
(Name and Title) Michael Friess
President, Chief Executive Officer and Director
(Date) September 16 , 2010
BY(Signature) /s/ Sanford Schwartz
(Name and Title) Sanford Schwartz
Vice President and Director
(Date) September 16 , 2010
BY(Signature) /s/ Chloe DiVita
(Name and Title) Chloe DiVita
Treasurer, Secretary and Chief
Financial Officer and Director
|
EXHIBIT INDEX
Exhibit No. Description of Exhibit
----------- ----------------------
3.1 Articles of Incorporation of Fona, Inc.
3.2 Bylaws of Fona Inc.
3.3 Stock Purchase Agreement
4.1 Specimen Stock certificate
19.1 Assignment Agreement
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Exhibit 3.1
ARTICLES OF INCORPORATION
OF
FONA, INC.
KNOW ALL BY THESE PRESENTS, that the undersigned, desiring to be incorporated as a Corporation in accordance with the laws of the State of Nevada, hereby certifies and adopts the following Articles of Incorporation, the terms whereof have been agreed upon to be equally obligatory upon the party signing this instrument and all others who may from time to time hereafter become members of this Corporation and who may hold stock therein.
ARTICLE I
The name of the Corporation is: FONA, INC.
ARTICLE II
The name and address of the registered agent of the Corporation in the State of Nevada is:
National Registered Agents, Inc. of NV
1000 East William, Suite 204
Carson City, NV 89701
Principal and branch offices may hereinafter be established at such place or places, either within or without the State of Nevada as may from time to time be determined by the Board of Directors.
ARTICLE III
The nature and purpose of this business shall be to conduct any lawful activity as governed by the laws of the State of Nevada.
ARTICLE IV
The authorized capital stock of this Corporation is 800,000,000 shares of capital stock, consisting of 780,000,000 shares of common stock with full voting rights and with a par value of $0.001 per share, and 20,000,000 shares of preferred stock, with a par value of $0.001 per share (the "Preferred Stock").
The Preferred Stock may be issued from time to time in one or more series with such designations, preferences and relative participating, optional or other special rights and qualifications, limitations or restrictions thereof, as shall be stated in the resolutions adopted by the Corporation's Board providing for the issuance of such Preferred Stock or series thereof; and the Board is hereby vested with authority to fix such designations, preferences and relative participating, optional or other special rights or qualifications, limitations, or restrictions for each series, including, but not by way of]imitation, the power to fix the redemption and liquidation preferences, the rate of dividends payable and the time for and the priority of payment thereof
and to determine whether such dividends shall be cumulative or not and to provide for and fix the terms of conversion of such Preferred Stock or any series thereof into Common Stock of the Corporation and fix the voting power, if any, of shares of Preferred Stock or any series thereof.
Pursuant to NRS 78.385 and NRS 78.390, and any successor statutory provisions, the Board is authorized to adopt a resolution to increase, decrease, add, remove or otherwise after any current or additional classes or series of this Corporation's capital stock by a board resolution amending these Articles, in the Board's sole discretion for increases or decreases of any class or series of authorized stock where applicable pursuant to NRS 78.207 and any successor statutory provision, or otherwise subject to the approval of the holders of at least a majority of shares having voting rights, either in a special meeting or the next annual meeting of shareholders. Pursuant to NRS 78.2055 and any successor statutory provisions, the Board is authorized to adopt a resolution to decrease the number of issued and outstanding shares of a class or series without correspondingly decreasing the number of authorized shares of the same class or series and without the approval of the stockholders. Notwithstanding the foregoing, where any shares of any class or series would be materially and adversely affected by a change as described in either of the two preceding sentences, shareholder approval by the holders of at least a majority of such adversely affected shares must also be obtained before filing an amendment with the Office of the Secretary of State of Nevada. The capital stock of this Corporation shall be non-assessable and shall not be subject to assessment to pay the debts of the Corporation.
ARTICLE V
Members of the Board shall be known and styled as "Directors" and the number thereof shall be one (1) and may be increased or decreased from time to time pursuant to the Bylaws. The name and address of the first Board of Directors is as follows:
Michael Freiss 5353 Manhattan Circle, Suite 201 Boulder, CO 80303
Sanford Schwartz 5353 Manhattan Circle, Suite 201 Boulder, CO 80303
Chloe DeVita 5353 Manhattan Circle, Suite 201 Boulder, CO 80303
The number of members of the Board shall not be less than one (1) or more than nine (9). The officers of the Corporation shall be a President, Secretary and Treasurer. The Corporation may have such additional officers as may be determined from time to time in accordance with the Bylaws. The officers shall have the powers, perform the duties, and be appointed as may be determined in accordance with the Bylaws and laws of the State of Nevada. Any person may hold two (2) or more offices in this Corporation.
ARTICLE VI
The Corporation shall have perpetual succession by its corporate name and shall have all the powers herein enumerated or implied herefrom and the powers now provided or which may hereafter be provided by law for corporations in the State of Nevada.
ARTICLE VII
No shareholder shall be liable for the debts of the Corporation beyond the amount that may be due or unpaid upon any share or shares of stock of this Corporation owned by that person.
ARTICLE VIII
Each shareholder entitled to vote at any election for Directors shall have the right to vote, in person or by proxy, the number of shares owned by such shareholder for each Director to be elected. Shareholders shall not be entitled to cumulative voting rights.
ARTICLE IX
The Directors shall have the powers to make and alter the Bylaws of the Corporation. Bylaws made by the Board under the powers so conferred may be altered, amended, or repealed by the Board or by the shareholders at any meeting called and held for that purpose.
ARTICLE X
The Corporation specifically elects not to be governed by NRS 78.411 to NRS 78.444, inclusive, and successor statutory provisions.
ARTICLE XI
The Corporation shall indemnify all Directors, officers, employees, and agents to the fullest extent permitted by Nevada law as provided within NRS 78.7502 and NRS 78.751 or any other law then in effect or as it may hereafter be amended. The Corporation shall indemnify each present and future Director, officer, employee or agent of the Corporation who becomes a party or is threatened to be made a party to any suit or proceeding, whether pending, completed or merely threatened, and whether said suit or proceeding is civil, criminal, administrative, investigative, or otherwise, except an action by or in the right of the Corporation, by reason of the fact that he is or was a Director, officer, employee, or agent of the Corporation, or is or was serving at the request of the Corporation as a Director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, against expenses, including, but not limited to, attorneys' fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit, proceeding or settlement, provided such person acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interest of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
The expenses of Directors, officers, employees or agents of the Corporation incurred in defending a civil or criminal action, suit, or proceeding may be paid by the Corporation as they are incurred and in advance of the final disposition of the action, suit, or proceeding, if and only if the Director, officer, employee or agent undertakes to repay said expenses to the Corporation if it is ultimately determined by a court of competent jurisdiction, after exhaustion of all appeals therefrom, that he is not entitled to be indemnified by the Corporation. No indemnification shall be applied, and any advancement of expenses to or on behalf of any Director, officer, employee or agent must be returned to the Corporation, if a final adjudication establishes that the person's acts or omissions involved a breach of any fiduciary duties, where applicable, intentional misconduct, fraud or a knowing violation of the law which was material to the cause of action.
ARTICLE XII
The name and address of the incorporator of this Corporation is:
Raymond W. Faricy, III Lindquist & Vennum P.L.L.P.
80 South 8th Street, #4200 IDS Center
Minneapolis, MN 55402
IN WITNESS WHEREOF, the undersigned incorporator has executed these Articles of Incorporation of FONA, INC. on February 4,2009.
/s/ Raymond W. Faricy, III ------------------------------------ Raymond W. Faricy, III, Incorporator |
Exhibit 3.2
BYLAWS OF
FONA,INC.
ARTICLE I: OFFICES
1.1 REGISTERED OFFICE
The registered office shall be in the City of Carson City, County of Carson City, State of Nevada.
1.2 ADDIT10NAL OFFICES
The corporation may also have offices at such other places both within and without the State of Nevada as the Board of Directors may from time to time determine or the business of the corporation may require.
ARTICLE II: SHAREHOLDERS' MEETINGS
2.1 ANNUAL MEETINGS
Regular meetings of the shareholders of this corporation may be held at the
discretion of the Board of Directors on an annual or less frequent periodic
basis on such date and at such time and place as may be designated by the Board
of Directors in the notice of meeting. At regular meetings the shareholders
shall elect a Board of Directors and transact such other business as may be
appropriate for action by shareholders. If a regular meeting of shareholders has
not been held for a period of fifteen (15) months, one or more shareholders
entitled to vote may call a regular meeting of shareholders by delivering to the
President or Treasurer a written demand for a regular meeting. Within thirty
(30) days after the receipt of such written demand by the President or
Treasurer, the Board of Directors shall cause a regular meeting of shareholders
to be called and held on notice no later than ninety (90) days after the receipt
of written demand, all at the expense of the corporation.
2.2 SPECIAL MEETINGS
Special meetings of the shareholders for any purpose may be called at any time by the President, or by the Board of Directors, or by any two or more members thereof, or by one or more shareholders holding not less than twenty percent (20%) of the voting power of the Corporation. Such meetings shall be held at the principal office of the Corporation or at such other place within or without the State of Nevada as may be designated in the notice of meeting. No business shall be transacted at any special meeting of the shareholders except as is specified in the notice calling for such special meeting.
2.3 NOTICE OF MEETINGS
2.3.1 Notices of meetings, annual or special, to shareholders entitled to vote shall be given in writing and signed by the President or a Vice-President or the Secretary or the Assistant Secretary, or by any other natural person designated by the Board of Directors.
2.3.2 Such notices shall be sent to the shareholder's address appearing on the books of the Corporation, or supplied by him to the Corporation for the purpose of notice, not less than ten (10) nor more than sixty (60) days before such meeting. Such notice shall be deemed delivered, and the time of the notice shall begin to run, upon being deposited in the mail.
2.3.3 Notice of any meeting of shareholders shall specify the place, the day and the hour of the meeting, and in case of a special meeting shall state the purpose(s) for which the meeting is called.
2.3.4 When a meeting is adjourned to another time, date or place, notice of the adjourned meeting need not be given if announced at the meeting at which the adjournment is given.
2.3.5 Any shareholder may waive notice of any meeting by a writing signed by him, or his duly authorized attorney, either before or after the meeting.
2.3.6 No notice is required for matters handled by the consent of the shareholders pursuant to NRS 78.320.
2.3.7 No notice is required of the annual shareholders meeting, or other notices, if two annual shareholder notices are returned to the corporation undelivered pursuant to NRS 78.370(7).
2.4 CONSENT TO SHAREHOLDER MEETINGS AND ACTION WITHOUT MEETING
2.4.1 Any meeting is valid wherever held by the mitten consent of all persons entitled to vote thereat, given either before or after the meeting.
2.4.2 The transactions of any meeting of shareholders, however called and
noticed, shall be valid as though if taken at a meeting duly held after regular
call and notice if a quorum be present either in person or by proxy, and if:
either before or after the meeting, each of the shareholders entitled to vote,
not present in person or by proxy, signs a written waiver of notice, or consent
to the holding of such meeting, or an approval of the minutes thereof.
2.4.3 Any action that could be taken by the vote of shareholders at a meeting, may be taken without a meeting if authorized by the written consent of shareholders holding at least a majority of the voting power (NRS 78.320), and any actions at meetings not regularly called shall be effective subject to the ratification and approval provisions of NRS 78.325.
2.4.4 All such waivers, consents or approvals shall be filed with the corporate records, or made a part of the minutes of the meeting.
2.5 QUORUM
The holders of a majority of the shares entitled to vote thereat, present in person or by proxy, shall constitute a quorum for the transaction of business.
2.6 VOTING RIGHTS
Except as may be otherwise provided in the Corporation's Articles of Incorporation, Bylaws or by the Laws of the State of Nevada, each shareholder shall be entitled to one (1) vote for each share of voting stock registered in his name on the books of the Corporation, and the affirmative vote of a majority of voting shares represented at a meeting and entit1ed to vote thereat shall be necessary for the adoption of a motion or for the determination of all questions and business which shall come before the meeting.
2.7 PROXIES
Subject to the limitation of NRS 78.355, every person entitled to vote or to execute consents may do so either in person or by proxy executed by the person or by his duly authorized agent.
ARTICLE III: DIRECTORS - MANAGEMENT
3.1 POWERS
Subject to the limitation of the Articles of Incorporation, of the Bylaws and of the Laws of the State of Nevada as to action to be authorized or approved by the shareholders, all corporate powers shall be exercised by or under authority of; and the business and affairs of this Corporation shall be controlled by, a Board of at least one (1) Director.
3.2 ELECTION AND TENURE OF OFFICE
The number of Directors which shall constitute the whole board shall be one
The number of Directors may from time to time be increased to not less than one (1) nor more than nine (9) by action of the Board of Directors. The Directors shall be elected at the annual meeting of shareholders and except as provided in Section 3.3 of this Article, each Director elected shall hold office until his successor is elected and qualified. Directors need not be shareholders. A Director need not be a resident of the State of Nevada.
3.3 REMOVAL AND RESIGNATION
3.3.1 Any Director may be removed either with or without cause, as provided by NRS 78.335.
3.3.2 Any Director may resign at any time by giving written notice to the Board of Directors or to the President, or to the Secretary of the Corporation. Any such
resignation shall take effect at the date of the receipt of such notice or any later time specified therein; and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
3.4 VACANCIES
Vacancies in the Board of Directors may be filled by a majority of the remaining Directors, though such action by less than a quorum or by a sale remaining Director shall be adequate, and each Director so elected shall hold office until his successor is elected at an annual meeting of shareholders or at a special meeting called for that purpose. The shareholders may at any time elect a Director to fill any vacancy not filed by the directors.
3.5 PLACE OF MEETINGS AND MEETINGS BY TELEPHONE
Meetings of the Board of Directors may be held at any place within or without the State of Nevada that has been designated by the Board of Directors. In the absence of such designation, meetings shall be held at the principal office of the Corporation. Any meeting, regular or special, may be held by conference telephone or similar communication equipment, and all such Directors shall be deemed to be present in person at the meeting, so long as all Directors participating in the meeting can hear one another.
3.6 ANNUAL ORGANIZATIONAL MEETINGS
The annual organizational meetings of the Board of Directors shall be held immediately following the adjournment of the annual meetings of the shareholders. No notice of such meetings need be given.
3.7 OTHER REGULAR MEETINGS
There shall be no requirement for the Board of Directors to hold regular meetings, other than the annual organizational meeting.
3.8 SPECIAL MEETINGS - NOTICES
3.8.1 Special meetings of the Board of Directors for any purpose shall be called at any time by the President or if he is absent or unable or refuses to act, by any Vice President or by any two Directors.
3.8.2 Written notice of the time and place of special meetings of the Board
of Directors shall be delivered personally to each Director or sent to each
Director by mail or other form of written communication at least forty-eight
(48) hours before the meeting. Notice of the time and place of holding an
adjourned meeting need not be given to absent Directors if the time and place
are fixed at the meeting adjourned.
3.9 CONSENT TO DIRECTORS MEETINGS AND ACTION WITHOUT MEETING
3.9.1 Any meeting is valid wherever held by the written consent of all persons entitled to vote thereat, given either before or after the meeting.
3.9.2 The transactions of any meetings of the Board of Directors, however called and noticed or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice if all the Directors are present, or if a quorum is present and either before or after the meeting, each of the Directors not present signs a written waiver of notice, a consent to the holding of the meeting, or an approval of the minutes thereof.
3.9.3 Any action required or permitted to be taken by the Board of Directors may be taken without a meeting, if all members of the Board shall individually or collectively consent in writing to such action. Such action by written consent shall have the same force and effect as a unanimous vote of the Board of Directors.
3.9.4 Al1 such waivers, consents, or approvals shal1 be filed with the Corporate records or made part of the minutes of the meeting.
3.10 QUORUM AND VOTING RIGHTS
So long as the Board of Directors is composed of one or two Directors, one of the authorized Directors constitutes a quorum for the transaction of business. If there are three or more Directors, a majority thereof shal1 constitute a quorum. Except as may be otherwise provided in the Corporation's Articles of Incorporation, Bylaws or by the Laws of the State of Nevada, the affirmative vote of a majority of Directors represented at a meeting and entitled to vote thereat shall be necessary for the adoption of a motion or resolution or for the determination of al1 questions and business which shall come before the meeting.
3.11 COMPENSATION
Directors may receive such reasonable compensation for their services as Directors and such reimbursement for expenses incurred in attending meetings as may be fixed from time to time by resolution of the Board of Directors. No such payment shall preclude a Director from serving in any other capacity and receiving compensation therefor.
ARTICLE IV: OFFICERS
4.1 OFFICERS
The Board of Directors shall appoint a President, a Secretary and a Treasurer. The Board of Directors, in their discretion, may also appoint a Chair of the Board, a Chief Executive Officer, a Chief Financial Officer, one or more Vice Presidents and such other oft1cers and assistant officers as they shall from time to time deem proper. Any two
or more offices may be held by the same person. The Board may choose not to fill any of the other officer positions for any period.
4.2 APPOINTMENT AND TERM OF OFFICE
The officers of the corporation shall be appointed by the Board of Directors at the first meeting of the Directors. If the appointment of officers shall not be held at such meeting, such appointment shall be held as soon thereafter as conveniently may be. Each officer shall hold office until a successor shall have been duly appointed and qualified or until the officer's death or until the officer resigns or is removed in the manner hereinafter provided.
4.3 REMOVAL
Any officer or agent appointed by the Board of Directors may be removed by the Board of Directors at any time with or without cause, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.
4.4 VACANCIES
A vacancy in any office because of death, resignation, removal, disqualification, or otherwise, may be filled by the Board of Directors.
4.5 CHAIR OF THE BOARD
The Chair of the Board, if there be such an office, shall, if present, preside at all meetings of the Board of Directors and meetings of the shareholders, and exercise and perform such other powers and duties as may be from time to time assigned to the Chair by the Board of Directors. In the event that there is no Chair of the Board designated or present, the Secretary of the Board of Directors shall preside over the meeting, or if there is no Secretary of the Board of Directors designated or present at the meeting, the Directors present at any meeting of the Board of Directors shall designate a Director of their choosing to serve as temporary chair to preside over the meeting.
4.6 CHIEF EXECUTIVE OFFICER
Subject to the control of the Board of Directors and such supervisory powers, if any, as may be given by the Board of Directors to another person or persons, the powers and duties of the Chief Executive Officer shall be: To act as the general manager and, subject to the control of the Board of Directors, to have general supervision, direction and control of the business and affairs of the Corporation; To see that all orders and resolutions of the Board of Directors are carried into effect; To maintain records of and, whenever necessary, certify all proceedings of the Board of Directors and the shareholders; and To affix the signature of the Corporation to all deeds, conveyances, mortgages, guarantees, leases, obligations, bonds, certificates and other papers and instruments in writing which have been authorized by the Board of Directors or which, in the judgment of the Chief Executive Officer, should be executed on behalf of the Corporation; to sign certificates for the Corporation's shares; and, subject to the direction
of the Board of Directors, to have general charge of the property of the Corporation and to supervise and control all officers, agents and employees of the corporation.
4.7 CHIEF FINANCIAL OFFICER OR TREASURER
Subject to the control of the Board of Directors and such supervisory powers, if any, as may be given by the Board of Directors to another person or persons, the powers and duties of the Chief Financial Officer or Treasurer shall be to: keep accurate financial records for the Corporation; deposit all money, drafts and checks in the name of and to the credit of the Corporation in the banks and depositories designated by the board of directors; endorse for deposit all notes, checks, drafts received by the Corporation as ordered by the Board of Directors, making proper vouchers therefore; disburse corporate funds and issue checks and drafts in the name of the Corporation, as ordered by the Board of Directors; render to the Chief Executive Officer and the Board of Directors, whenever requested, an account of all transactions by the Chief Financial Officer and the financial condition of the Corporation; and perform all other duties prescribed by the Board of Directors or the Chief Executive Officer.
4.8 PRESIDENT
Unless otherwise determined by the Board of Directors, the President shall be the Chief Executive Officer of the Corporation. If an officer other than the President is designated as the Chief Executive Officer, the President shall perform such duties as may from time to time be assigned by the Board of Directors. The President shall have the duty to call meetings of the shareholders or Board of Directors, as set forth in Section 3.8.1, above, to be held at such times and, subject to the limitations prescribed by law or by these Bylaws, at such places as the President shall deem proper.
4.9 VICE PRESIDENTS
In the absence of the President or in the event of the President's death, inability or refusal to act, the Vice President (or in the event there shall be more than one Vice President, the Vice Presidents in the order designated at the time of their appointment, or in the absence of any designation then in the order of their appointment) shall perform the duties of the President, and when so acting shall have all the powers of and be subject to all the restrictions upon the President; and shall perform such other duties as from time to time may be assigned to the Vice President by the President or by the Board of Directors. In the event there are no Vice Presidents, the Board of Directors may designate a member of the Board of Directors or another officer of the Corporation to serve in such capacity until a new President is appointed.
4.10 SECRETARY
The Secretary shall: (a) prepare the minutes of the shareholders' and Board of Directors' meetings and keep them in one or more books provided for that purpose; (b) authenticate such records of the Corporation as shall from time to time be required; (c) see that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; (d) be custodian of the corporate records and of the corporate seal, if
any, and see that the seal of the Corporation, if any, is affixed to all documents the execution of which on behalf of the Corporation under its seal is duly authorized; (e) keep a register of the post office address of each shareholder; (f) if requested, sign with the President certificates for shares of the Corporation, the issuance of which shall have been authorized by resolution of the Board of Directors; (g) have general charge of the stock transfer books of the Corporation; and (h) in general perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to the Secretary by the Chief Executive Officer or the Board of Directors.
4.11 DELEGATION OF AUTHORITY
The Board of Directors may from time to time delegate the powers of any officer to any other officer or agent, notwithstanding any provision hereof, except as may be prohibited by law.
4.12 COMPENSATION
Officers shall be awarded such reasonable compensation for their services and provisions made for their expenses incurred in attending to and promoting the business of the Corporation as may be fixed from time to time by resolution of the Board of Directors.
ARTICLE V: COMMITTEES
The Board of Directors may appoint and prescribe the duties of an executive committee and such other committees, as it may from time to time deem appropriate. Such committees shall hold office at the pleasure of the Board.
ARTICLE VI: RECORDS AND REPORTS - INSPECTION
6.1 INSPECTION OF BOOKS AND RECORDS
All books and records provided for by Nevada Revised Statutes shall be open to inspection of the directors and shareholders to the extent provided by such statutes. (NRS 78.105)
6.2 CERTIFICATION AND INSPECTION OF BYLAWS
The original or a copy of these Bylaws, as amended or otherwise altered to date, certified by the Secretary, shall be open to inspection by the shareholders of the company in the manner provided by law.
6.3 CHECKS, DRAFTS, ETC.
All checks, drafts or other orders for payment of money, notes or other evidences of indebtedness, issued in the name of or payable to the Corporation, shall be signed or endorsed by such person or persons and in such manner as shall be determined from time to time by resolution of the Board of Directors.
6.4 ANNUAL REPORT
No annual report to shareholders shall be required; but the Board of Directors may cause to be sent to the shareholders annual or other reports in such form as may be deemed appropriate by the Board of Directors.
ARTICLE VII: AMENDMENTS TO BYLAWS
New Bylaws may be adopted or these Bylaws may be repealed or amended by a vote or the written assent of either shareholders entitled to exercise a majority of the voting power of the Corporation, or by a majority of the number of Directors authorized to conduct the business of the Corporation.
ARTICLE VIII: CORPORATE SEAL
This Corporation shall have the power to adopt and use a common seal or stamp, and to alter the same, at the pleasure of the Board of Directors. The use or nonuse of a seal or stamp, whether or not adopted, shall not be necessary to, nor shall it in any way effect, the legality, validity or enforceability of any corporate action or document (NRS 78.065)
ARTICLE IX: CERTIFICATES OF STOCK
9.1 FORM
Certificates for shares shall be of such form and device as the Board of Directors may designate and shall state the name of the record holder of the shares represented thereby, its number; date of issuance; the number of shares for which it is issued; a statement of the rights, privileges, preferences and restrictions, if any; and statement of liens or restrictions upon transfer or voting, if any; and, if the shares be assessable, or, if assessments are collectible by personal action, a plain statement of such facts.
9.2 EXECUTION
Every certificate for shares must be signed by the President or the Secretary or must be authenticated by facsimile of the signature of the President or Secretary. Before it becomes effective, every certificate for shares authenticated by a facsimile of a signature must be countersigned by an incorporated bank or trust company, either domestic or foreign as registrar of transfers.
9.3 TRANSFER
Upon surrender to the Secretary or transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by a proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate, and record the transaction upon its books.
9.4 LOST OR DESTROYED CERTIFICATES
Any person claiming a certificate of stock to be lost or destroyed shall make an affidavit or affirmation of that fact and advertise the same in such manner as the Board of Directors may require and shall, if the Directors so require, give the Corporation a bond of indemnity, in form and with one or more sureties satisfactory to the Board, in at least double the value of the stock represented by said certificate, whereupon a new certificate may be issued of the same tenor and for the same number of shares as the one alleged to be lost or destroyed.
9.5 TRANSFER AGENTS AND REGISTRARS
The Board of Directors may appoint one or more transfer agents or transfer clerks, and one or more registrars, which shall be an incorporated bank or trust company, either domestic or foreign, who shall be appointed at such times and places as the requirements of the Corporation may necessitate and the Board of Directors may designate.
9.6 CLOSING STOCK TRANSFER BOOKS
The Board of Directors may close the transfer books in their discretion for a period not exceeding the sixty (60) days preceding any meeting, annual or special, of the shareholders, or the date appointed for the payment of a dividend.
CERTIFICATE OF SECRETARY
I, _________, the undersigned, the duly elected and acting Secretary of FONA, Inc., do hereby certify that the above and foregoing Bylaws were adopted as the Bylaws of said Corporation as of the ___ day of _________, 2009 by the Directors of said Corporation.
______________, Secretary
Exhibit 3.3
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT ("Agreement") is entered into on December 22, 2008, by and between Michael Friess and Sanford Schwartz, Colorado residents ("Buyers"), and Fonahome Corporation, a Minnesota corporation (the "Company").
RECITALS
A. The Company has determined that it is in the Company and its shareholders' best interest to sell 1,957,416 shares of the Company's common stock (the "Shares") to each of the Buyers for a purchase price of $10,000 each (3,914,832 shares and $20,000 in the aggregate), such proceeds to be used to complete an audit of the Company's financial statements and the cost of registering the Company's common stock pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") in order to make the Company a suitable candidate for the acquisition of an operating business through a so-called "reverse merger" (the event in which the Company becomes an operating company being referred to herein as the "Transaction").
B. The Company desires to sell and Buyers desire to purchase the Shares, all subject to the terms and conditions contained in this Agreement.
AGREEMENT
In consideration of the above recitals and the promises set forth in this Agreement, the parties agree as follows:
1. Purchase and Sale. Upon the reincorporation of the Company in the State of Nevada and the increase in the Company's authorized capital stock as set forth in Section 4.4 of this Agreement, each Buyer will deliver to the Company the sum of $10,000 payable by check or any other form of payment acceptable to the Company and the Company will deliver to each Buyer a certificate for the Shares being purchased. Upon completion of the sale of the Shares, the current members of the Company's Board of Directors will resign and the Buyers and Chloe DiVita, a business associate of the Buyers, will be elected to the Board of Directors.
2. Buyers' Representations. Buyers represent and warrant that they will use
their respective best efforts to resurrect and rehabi1iate the Company as a
"blank check" company with a class of securities registered pursuant to
Section 12(g) of the Exchange Act and to complete the Transaction. In the
event that either (i) the Buyers determine that in their opinion the effort
to complete the foregoing outweighs the benefits or (ii) the Transaction is
not completed on or before December 22, 2011, each Buyer will contribute to
the capital of the Company 1,904,785 shares of the common stock he has
purchased in accordance with Section 1 of this Agreement and will convert
any loans he has made to the Company into shares of the Company's common
stock or forgive such loans, as described below. If as of December 22, 2011
the Buyers have completed the audit of the Company's financial statements
amd registered the Company's common stock pursuant to
Section 12(g) of the Exchange Act, then the loans from Buyers, up to an aggregate maximum of $80,000, will be converted at a conversion rate of $0.19 per share of common stock, and any loans in excess of such $80,000 will be forgiven. If as of December 22, 2011 the Buyers have not completed the audit of the Company's financial statements and registered the Company's common stock pursuant to Section 12(g) of the Exchange Act, then all the loans from Buyers will be forgiven and Buyers will contribute to the capital of the Company all remaining shares of the Company that Buyers acquired under this Agreement. While the cost of completing the foregoing activities likely will exceed $20,000, the Buyers agree and warrant that no additional shares of the Company's common or preferred stock will be issued to the Buyers or any affiliate of the Buyers to raise additional working capital for the Company prior to the Transaction without the prior approval of shareholders owning at least 75% of the Company's then outstanding shares of common stock.
3. Transaction Terms. Buyers contemplate that the terms of the Transaction likely will consist of the purchase of all or substantially all of the Buyers' Shares (at least a portion of which is expected to be paid in cash) and the retention by the Company's remaining shareholders (possibly including the Buyers) of a small percentage of the ownership of the Company following the Transaction. Buyers agree that the economic benefit of a Transaction as between the Buyers and the other shareholders of the Company after deduction of Buyers' expenses in connection with the activities contemplated in this Agreement is to be in accordance with their relative ownership of the Company, that is, 50.1% for the Buyers and 49.9% for the other shareholders. It is understood that Buyers' expenses include their direct costs in connection with the Transaction, fees, if any, paid to unrelated parties in connection with activities contemplated in this Agreement, the cost of their investment in the Company, expenses of the Company paid by Buyers and a reasonable allocation of the Buyers' related general overhead expenses. In addition to Buyers' expenses, expenses of up to $15,000 incurred by the Company for legal and accounting fees and the cost of a fairness opinion obtained in preparation for the investment by Buyers and paid by Nick T. Boosalis ("Boosalis"), will be included in the expenses of the transaction and reimbursed out of the cash portion of the proceeds. The value of any stock received and/or retained in the Transaction will be based on the value attributed to shares of the Company's common stock by a contemporaneous financing by the Company, if any, or, in the absence of such a financing, as reasonably determined by the Buyers in their sole discretion without an independent appraisal.
4. Company's Representations and Warranties.
4.1 The Company has full right and authority to sell the Shares to Buyers;
4.2 The Company's current capitalization consists solely of 5,000,000 shares of authorized common stock, 3,899,204 of which are currently issued and outstanding and the Company has no outstanding options Of commitments to sell any additional shares of capital stock and has no outstanding indebtedness other than as set forth on Schedule 1 of this Agreement;
4.3 Upon issuance of the Shares, each Buyer will own 25.05% of the Company's then issued and outstanding shares of common stock; and
4.4 Upon execution and delivery of this Agreement, the Company will use
its best efforts to notice and convene a special meeting of the
Company's shareholders as soon as practicable to consider and act upon
the following: (i) approve and ratify the recent sale of the Company's
assets to Boosalis and other actions by the Company's Board of
Directors; (ii) the reincorporation of the Company in the State of
Nevada; (iii) an increase in the Company's authorized capital stock to
include 780,000,000 shares of common stock, $.001 par value, and
20,000,000 shares of blank-check preferred stock, $.001 par value; and
(iv) to authorize the Company's Board of Directors to effect a
four-for-one reverse stock split of the Company's outstanding shares
of common stock, subject to the registration of the Company's common
stock pursuant to Section 12(g) of the Exchange Act and the approval
of the Company's common stock for trading on the Nasdaq Bulletin Board
(all of the share numbers and the conversion price set forth is
Section 2 in this Agreement other than the increase in the Company's
authorized capital stock set forth in this Section 4.4 are before the
foregoing reverse stock split and shall, upon the effective date of
this reverse stock split, be adjusted to account for the reverse stock
split and any other change in the Company's capitalization after the
date of this Agreement).
4.5 The Company acknowledges that: (i) the Buyers are engaged in other similar and potentially competing activities; (ii) the Company has been given a list of prior similar activities in which the Buyers have been involved, including the terms of the transactions; (iii) neither the Company nor any of its shareholder are or will be entitled to any compensation with respect to such activities; (iv) the Buyers have no duty or responsibility to the Company or its shareholders with respect to these other/potentially competing activities; and (v) the Buyers have made no representations or warranties regarding the potential value of the Transaction.
5. Investment Representation. Each of the Buyers acknowledges and represents as follows:
5.1 He has been given access to full and complete information regarding the Company and has utilized such access to his satisfaction for the purpose of obtaining information regarding the Company, and, particularly, he has met with or been given reasonable opportunity to meet with representatives of the Company for the purpose of obtaining all information concerning the Company that he deems necessary to make an informed investment decision.
5.2 He is in a financial position to hold the Shares (for purposes of this
Section 5. "Shares" includes any shares of the Company's common stock
issued upon the conversion of loans in accordance with the provisions
of Section 2 above) for an
indefinite period of time and is able to bear the economic risk and withstand a complete loss of his investment in the Shares.
5.3 He has such knowledge and experience in financial and business matters that he is capable of reading and interpreting financial statements and evaluating the merits and risks of the prospective investment in the Shares.
5.4 He has obtained, to the extent he deems necessary, professional investment advice with respect to the risks inherent in an investment in the Shares, and the suitability of an investment in the Shares in light of his financial condition and investment needs.
5.5 He believes that the investment in the Shares is suitable for him based upon the his investment objectives and financial needs, and he has adequate means for providing for his current financial needs and personal contingencies and has no need for liquidity of investment with respect to the Shares.
5.6 He recognizes that an investment in the Shares is highly speculative and involves a high degree of risk, including, but not limited to, the risk of economic losses from operations of the Company and the loss of his entire investment in the Company.
5.7 He understands that the Company makes no assurances whatsoever concerning the present or prospective value of the Shares.
5.8. He understands that there are substantial restrictions on the transfer of the Shares and, accordingly, he may not be able to liquidate an investment in the Shares for an indefinite period.
5.9 The Shares are being acquired for his own account and for investment, he has made no agreement with others regarding the Shares, and his financial condition is such that it is not likely that it will be necessary to dispose of the Shares in the foreseeable future.
5.10 He is an accredited investor as defined in the rules under the Act (defined below) and a bona fide resident of, and is domiciled in and received the offer and made the decision to invest in the Shares in the state of Colorado.
6. No Registration Under the Securities Laws. Buyers have been advised that the Shares are not being registered under the Securities Act of 1933, as amended (the "Act") or state securities laws pursuant to exemptions from the Act and such laws, and that the Company's reliance upon such exemptions is predicated in part on the representations of Buyers contained herein.
7. Miscellaneous. No amendment to this Agreement or waiver of the rights or obligations of the parties shall be effective unless in writing signed by the parties and approved by at least 75% of the outstanding shares of the Company's common stock. This Agreement is
governed by the laws of the State of Minnesota without regard to conflicts of laws principles. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable. This Agreement: (i) contains the entire agreement and understanding of the parties concerning the subject matter of this Agreement; (ii) supersedes any prior agreements or representations, whether oral or written; (iii) may be signed by facsimile and in counterparts; and (iv) terminates at the time of the Transaction.
The parties have executed this Agreement as of the date first written above.
THE COMPANY:
FONAHOME CORPORATION
By /s/ Michael Friess Its CEO BUYERS: /s/ Michael Friess ------------------------------ Michael Friess 5353 Manhattan Circle Suite 201 Boulder, CO 80303 /s/ Sanford Schwartz ------------------------------ Sanford Schwartz 5353 Manhattan Circle Suite 201 Boulder, CO 80303 |
The undersigned agrees to vote his shares of the Company's common stock to approve the items to be acted upon by the Company's shareholders in accordance with Section 4.4 above.
/s/ Nick T. Boosalis Dated: 01/08/09 Nick T. Boosalis |
SCHEDULE 1
None, other than the indebtedness to Boosalis described in Section 3 of this Agreement.
Exhibit 4.1
FONA, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA
AUTHORIZED: 780,000,000 COMMON SHARES,
$0.001 PAR VALUE PER SHARE
NUMBER SHARES
+-----------------+
| CUSIP 34434 10 5|
+-----------------+
This Certifies That SEE REVERSE FOR
SPECIMEN CERTAIN DEFINITIONS
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is the owner of
Fully Paid and Non-Assessable Common Stock, $0.001 Par Value of
FONA, INC.
transferable on the books of this Corporation in person or by attorney upon surrender of this Certificate duly endorsed or assigned. This Certificate and the shares represented hereby are subject to the laws of the State of Nevada, and to the Articles of Incorporation and Bylaws of the Corporation, as now or hereafter amended. This Certificate is not valid until countersigned by the Transfer Agent.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be signed by the facsimile signatures of its duly authorized officers and to be sealed with the facsimile seal of the Corporation.
Dated:
FONA, INC.
[CORPORATE SEAL OMITTED]
/s/ Michael Friess NEVADA /s/ Chloe DiVita
---------------------- ----------------------
PRESIDENT SECRETARY
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Countersigned:
CORPORATE STOCK TRANSFER, INC.
3200 Cherry Creek South Drive, Suite 430
Denver, CO 80209
By _______________________________________________________
Transfer Agent and Registrar Authorized Officer
FONA, INC.
Corporate Stock Transfer, Inc.
Transfer Fee: As Required
SPECIMEN
--------------------------------------------------------------------------------
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common UNIF GIFT MIN ACT- .............. Custodian for ..............
(Cust.) (Minor)
TEN ENT -- as tenants by the entireties under Uniform Gifts to Minors
JT TEN -- as joint tenants with right of Act of ...........................................
survivorship and not as (State)
tenants in common
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Additional abbreviations may also be used though not in the above list.
For value received .......................hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
+-----------------------------------------------------+
| |
| |
+-----------------------------------------------------+
Please print or type name and address of assignee
................................................................................
................................................................................
................................................................................
..........................................................................Shares
|
of the Common Stock represented by the within Certificate and do hereby irrevocably constitute and appoint
................................................................................
................................................................................ Attorney to transfer the said stock on the books of the within-named Corporation, with full power of substitution in the premises.
Dated ................20........
SIGNATURE GUARANTEED: X_______________________________
X_______________________________
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THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON
THE FACE OF THIS CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER. THE SIGNATURE(S) MUST BE GUARANTEED BY AN
ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan
Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM.
Exhibit 19.1
ASSIGNMENT
FONAHOME Corporation ("Assignor") makes this complete and irrevocable Assignment
of worldwide copyright rights, trademarks, and other assets to The Boosalis
Group. Inc. ("Assignee") effective as of January 22, 2008. Assignor is the owner
of (i) the computer software program known as the "FONAHOME or RENT411" system,
(ii) the computer software used to operate the RENT411.com website, (iii) all
content incorporated in and displayed on the RENT411.com website and FONAHOME
system, (iv) the trademarks described in Exhibit A to this Assignment,(v) the
current right to use the domain names and vanity phone numbers described in
Exhibit A to this Assignment, and (Vii and all intellectual property rights
therein, including but not limited to all copyrights therein. Assignor desires
to assign and quitclaim to the foregoing (the "RENT 411 Software and Content")
throughout the world, including the domain names relating to the RENT411.com
website. Except as indicated on Exhibit A, none of the RENT411 Software and
Content has been registered with the Copyright Office of the Library of
Congress. Assignor acknowledges that Assignor shall have no right to receive any
royalty payment from Assignee or any third party related to the assets assigned
hereunder.
In consideration of Assignee's assumption of, and agreement to pay when and as due, those certain categories of liabilities of Assignor identified in highlight on Schedule A to this Assignment, which in aggregate equal $32,117.43, and for other good and valuable consideration received, the sufficiency and receipt of which are hereby acknowledged. Assignor hereby irrevocable sells, grants, conveys, bargains, and assigns to Assignee and its successors and assigns, all right, title and interest, property, claim and demand of every kind and nature whatsoever in and to the RENT411 Software and Content that is available in the United States of elsewhere, including the right to register the copyrights in the RENT411 Software and Content in any nation, the right to sue for past or future infringement, and all profits, benefits and advantages that arise by or from the sale or reproduction or vending of the same, to have and to hold the same to Assignee and its assigns forever. Assignor also conveys to Assignee all rights of Assignor to the domain names and vanity phone numbers relating to the RENT411.com website.
Assignor warrants and represents that Assignor has not anywhere in the world assigned or in any manner encumbered or impaired the rights granted herein, that there is no outstanding claim or lien against the copyright therein; that Assignor has not given to any person, firm or corporation throughout the world any license or privilege of any kind, nature or by description in the works inconsistent with the rights hereby granted and transferred or by which the same could be diminished or impaired; and that Assignor has the sole and exclusive right to dispose of the rights ad privileges hereby granted and transferred. Assignor will execute any necessary instruments to convey and assign the copyright herein intended to be conveyed.
[Signature page follows]
IN WITNESS WHEREOF, the undersigned have executed this instrument effective as of the 19 day of August, 2008.
Dated: 8/19/08 FONAHOME CORPORATION
By:
Its:
Subscribed and sworn to before me this 19 day of August, 2008
-------------------------------- [Notary Public Seal]
Notary Public
Acknowledged and Agreed
Dated: 8/19/08 THE BOOSALIS GROUP, INC.
By:
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Its:
Exhibit A
Trademarks and Domain Names
FONAHOME
RENT411
ADWIZARD
The 411 for Renters
The 411 for Owners
RENTREADY
ISIGN
Rentopia
1-800-222-SELL.COM
1-800-222-SELL.NET
1800222SELL.COM
2SELLBUYOWNER.BIZ
2SELLBUYOWNER.COM
2SELLBUYOWNER.INFO
2SELLBUYOWNER.NAME
2SELLBUYOWNER.NET
2SELLBUYOWNER.ORG
2SELLBUYOWNER.TV
2SELLBUYOWNER.US
2SELLBUYOWNER.WS
2SELLBYOWNER.BIZ
2SELLBYOWNER.INFO
2SELLBYOWNER.NAME
2SELLBYOWNER.NET
2SELLBYOWNER.ORG
2SELLBYOWNER.TV
2SELLBYOWNER.US
2SELLBYOWNER.WS
ADWIZARD.INFO
ADWIZARD.NET
APARTMENTYELLOWPAGES.COM
APARTMENTYELLOWPAGES.NET
APTSBYPREMA.COM
APTYELLOWPAGES.COM
CONNECT411.INFO
CONNECT411.NET
CONNECT411.US
FINDAREALTOR.BIZ
FINDAREALTOR.COM
FINDAREALTOR.INFO
FONAHOME.COM
FONAHOME.NET
FOR-RENT-SIGN.COM
FOR-RENT-SIGNS.COM
GETFREECUSTOMERS.COM
HOLMES-GREENWAY.COM
ISIGN.BIZ
ISIGN.INFO
ISIGN.NAME
ISIGN.NET
ISIGN.TV
ISIGN.WS
LOOKLEASE.COM
MOVE411.NET
NOVACANCY.BIZ
NOVACANCY.INFO
NOVACANCY.NAME
NOVACANCY.NET
NOVACANCY.TV
NOVACANCY.US
NOVACANCY.WS
RENT411.BIZ
RENT411.CO.UK
RENT411.COM
RENT411.IN
RENT411.INFO
RENT411.ME
RENT411.MOBI
RENT411.NAME
RENT411.NET
RENT411.0RG
RENT411.TV
RENT411.US
RENT411.WS
RENTEROPINION.BIZ
RENTEROPINION.COM
RENTEROPINION.INFO
RENTEROPINION.NAME
RENTEROPINION.NET
RENTEROPINION.ORG
RENTEROPINION.TV
RENTEROPINION.WS
RENTEROPINIONS.COM
RENTEROPINIONS.ORG
RENTERSOPINION.COM
RENTERSOPINION.ORG
RENTOPIA.BIZ
RENTOPIA.COM
RENTOPIA.INFO
RENTOPIA.NET
RIVERFRONTAPTS.COM
STMARYSFUTURE.ORG
STONEHOUSESQUARE.COM
1-800-RENT411
1-888-RENT411
1-877-RENT411
1-866-RENT411
1-800-222-SELL
651-222-7355
1-866 ADWI2ARD
1-888-FONAHOME
SCHEDULE A
Fonahome Corporation
A/P Aging Summary
As of January 22, 2008
Current 1 - 30 31 - 60 61 - 90 >90 TOTAL
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1-800-222-SELL Corporation 0.00 0.00 0.00 0.00 48.94 48.94
Adjusting Balance 0.00 0.00 0.00 0.00 0.00 0.00
Chief Ingredient Inc 0.00 2,568.75 0.00 0.00 0.00 2,568.75
CMG Corporation 0.00 0.00 0.00 0.00 14,933.04 14,933.04
Desfaire Inc 0.00 76.22 92.46 63.94 13,850.34 14,082.96
Dick Dillon 0.00 0.00 0.00 0.00 36,747.27 36,747.27
Dillon & Partners. 0.00 0.00 0.00 0.00 7,735.69 7,735.69
OX-Electronic Production Studio 0.00 0.00 0.00 0.00 3,824.12 3,824.12
InterNetwork Services 0.00 0.00 0.00 0.00 508.95 508.95
Jo Marshall Inc. 0.00 0.00 0.00 0.00 400.00 400.00
Jurrens & Associates, Inc. 0.00 1,881.50 1,562.00 1,401.75 17,136.00 21,981.25
Kinney & Lange 0.00 0.00 0.00 0.00 1,719.60 1,719.60
Lindquist & Vennum P.L.L.P. 450.00 0.00 0.00 0.00 0.00 450.00
Nick T Boosalis 0.00 0.00 0.00 0.00 13,035.59 13,035.59
Oculismedia 0.00 0.00 0.00 0.00 435.00 435.00
Onsite Support 0.00 0.00 0.00 0.00 4,053.88 4,053.88
Wash Me Corporation 0.00 0.00 0.00 0.00 5,661.01 5,661.01
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TOTAL 450.00 4,526.47 1,654.46 1,465.69 120,089.43 128,186.05
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