As
filed
with the Securities and Exchange Commission on December 21, 2007
Registration
No. __________
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
SB-2
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
Utalk
Communications Inc.
----------------------------------------------------------------
(Exact
name of Registrant as specified in its charter)
|
Nevada
----------------------------------
|
4899
-----------------------------
|
98-0530295
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|
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(State
or other jurisdiction of incorporation or organization)
|
(Primary
Standard Industrial Classification Code)
|
(I.R.S.
Employer Identification No.)
|
Mazen
Hleiss, President
999
–
3
rd
Avenue
#3800
Seattle,
Washington 98104
Tel:
(206) 224-4108
--------------------------------------------------------------------------------------
(Address
and telephone number of Registrant's principal executive offices)
Mazen
Hleiss, President
999
–
3
rd
Avenue
#3800
Seattle,
Washington 98104
Tel:
(206) 224-4108
---------------------------------------------------------------------------------------------------------
(Name,
address, including zip code, and telephone number, including area code, of
agent
for service)
Copies
of
all Correspondence to:
|
David
Lubin & Associates, PLLC
26
East Hawthorne Avenue
Valley
Stream, NY 11580
Telephone:
(516) 887-8200
Facsimile:
(516) 887-8250
|
Approximate
date of commencement of proposed sale to the public: From time to time after
the
effective date of this registration statement.
If
any of
the securities being registered on this form are to be offered on a delayed
or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, please
check the following box: [X]
If
this
form is filed to register additional securities for an offering pursuant to
Rule
462(b) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If
this
form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. [ ]
If
this
form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. [ ]
If
delivery of the prospectus is expected to be made pursuant to Rule 434, please
check the following box: [ ]
Calculation
of Registration
Fee
|
Title
of Class of Securities to be Registered
|
Amount
to be Registered
|
|
Proposed
Maximum Aggregate Price Per Share
|
|
|
Proposed
Maximum Aggregate Offering Price
|
|
|
Amount
of Registration Fee
|
|
|
Common
Stock, $0.001 per share
(1)
|
595,800
|
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$
|
0.10
(2)
|
|
$
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59,580
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|
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$
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1.83
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|
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Total
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595,800
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$
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0.10
(2)
|
|
$
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59,580
|
|
|
$
|
1.83
|
|
|
|
(1)
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Represents
at least a minimum of 437,900 and up to a maximum of 595,800 shares
of
common stock, par value $0.001 per share, to be offered and sold
by the
registrant.
|
|
|
(2)
|
There
is no current market for the securities. Although the
Registrant’s common stock has a par value of $0.001, the Registrant
believes that the calculations offered pursuant to Rule 457(f)(2)
are not
applicable and, as such, the Registrant has valued the common stock,
in
good faith and for purposes of the registration fee, based on $0.10
per
share. In the event of a stock split, stock dividend or similar
transaction involving our common stock, the number of shares registered
shall automatically be increased to cover the additional shares of
common
stock issuable pursuant to Rule 416 under the Securities Act of 1933,
as
amended.
|
THE
INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT
SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL
THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN
ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PRELIMINARY
PROSPECTUS SUBJECT TO
COMPLETION DATED ______ __, 2008
Utalk
Communications
Inc.
At
Least a Minimum of 437,900 and Up
to a Maximum of 595,800
Shares
of Common
Stock
This
prospectus relates to the offering and sale by Utalk Communications Inc. of
a
minimum of 437,900 and up to a maximum of 595,800 shares of the Company’s common
stock, par value $0.001 per share, at $0.10 per share. The shares
will be offered and sold on a “best efforts all or none basis” as to the first
437,900 shares and "on a best efforts basis" as to the remaining 157,900 shares.
The shares will be sold by our sole director and officer on our behalf who
will
not be paid any commissions for the sale of such shares, and no underwriters
or
broker-dealers will be involved in such offering. We will pay all
expenses incurred in this offering. The offering will commence as soon as
practicable after the effective date of the registration statement relating
to
this prospectus. It will terminate 180 calendar days after such
effective date, but such termination date may be extended for up to an
additional 90 calendar days in our sole discretion. We reserve the
right to terminate the offering at an earlier date, in our sole discretion,
even
if no shares are sold.
There
are
no minimum purchase requirements, and there are no arrangements to place the
funds in an escrow, trust, or similar account or arrangement. Funds received
by
us for the payment of shares subscribed for in the offering will be deposited
into a bank account maintained by us and under our control and be immediately
available for our use once 437,900 shares are sold. If a minimum of 437,900
shares are not sold prior to the termination of the offering, all funds remitted
to us as payment for shares subscribed for in the offering will be promptly
returned to the subscribers thereof without interest or deduction of any
kind. If 437,900 shares are sold prior to the termination of the
offering, all funds received by us will be retained by us for our use and will
not be refunded.
There
has
been no market for our securities and a public market may not develop, or,
if
any market does develop, it may not be sustained. Our common stock is
not traded on any exchange or on the over-the-counter market. After the
effective date of the registration statement relating to this prospectus, we
hope to have a market maker file an application with the National Association
of
Securities Dealers, Inc. for our common
stock
to
be eligible for trading on the Over The Counter Bulletin Board. We do not yet
have a market maker who has agreed to file such application.
Investing
in our securities involves significant risks. See “Risk Factors” beginning on
page 9.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION
HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS
IS
TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The
information in this prospectus is not complete and may be changed. This
prospectus is included in the registration statement that was filed by us with
the Securities and Exchange Commission. The Company may not sell these
securities until the registration statement becomes effective. This prospectus
is not an offer to sell these securities and is not soliciting an offer to
buy
these securities in any state where the offer or sale is not
permitted.
The
date
of this prospectus is ____, 2008
Table
of Contents
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Page
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Prospectus
Summary
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7
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Forward
Looking Statements
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7
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Risk
Factors
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9
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Risk
Factors Relating to Our Company
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9
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Risk
Factors Relating to Our Common Shares
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15
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The
Offering
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17
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Use
of Proceeds
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17
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Determination
of Offering Price
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20
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Dilution
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20
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Description
of Business
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21
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Management’s
Discussion and Analysis or Plan of Operations
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32
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Legal
Proceedings
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37
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Directors,
Executive Officers, Promoters, and Control Persons
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37
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Executive
Compensation
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38
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Security
Ownership of Certain Beneficial Owners and Management
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39
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Certain
Relationships and Related Transactions
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40
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Expenses
of Issuance and Distribution
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40
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Plan
of Distribution
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40
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Dividend
Policy
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44
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Share
Capital
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45
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Legal
Matters
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45
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Experts
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46
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Interest
of Named Experts and Counsel
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46
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Indemnification
for Securities Act Liabilities
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46
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Changes
in and Disagreements with Accountants
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47
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Where
You Can Find More Information
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46
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Financial
Statements
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47
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Information
not Required in Prospectus
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54
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Signatures
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57
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A
Cautionary Note Regarding
Forward-Looking Statements
This
prospectus contains forward-looking statements which relate to future events
or
our future financial performance. In some cases, you can identify
forward-looking statements by terminology such as “may”, “should”, “expects”,
“plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or
“continue” or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in
the
section entitled “Risk Factors,” that may cause our or our industry’s actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking
statements.
While
these forward-looking statements, and any assumptions upon which they are based,
are made in good faith and reflect our current judgment regarding the direction
of our business, actual results will almost always vary, sometimes materially,
from any estimates, predictions, projections, assumptions or other future
performance suggested herein. Except as required by applicable law, including
the securities laws of the United States, we do not intend to update any of
the
forward-looking statements to conform these statements to actual
results.
PROSPECTUS
SUMMARY
As
used
in this prospectus, references to the “Company,” “we,” “our” or “us” refer to
Utalk Communications Inc., unless the context otherwise indicates.
The
following summary highlights selected information contained in this prospectus.
Before making an investment decision, you should read the entire prospectus
carefully, including the “Risk Factors” section, the financial statements and
the notes to the financial statements.
Corporate
Background
Utalk
Communications Inc was incorporated under the laws of the State of Nevada on
January 30, 2007. We intend to engage in the development and
marketing of call-back services. A call-back service enables a user to call
a
telephone number and disconnect. The system will then call the person and
provide the user with a dial-tone to place a call. The purpose of this service
is to enable customers to realize a cost savings when there is a substantial
variance in rates between outgoing and incoming calls.
We
are a
development stage company. We have not generated any revenue to date
and our operations have been limited to organizational, start-up, and fund
raising activities. We currently have no employees other than our
sole officer, who is also our sole director. This offering will
provide us with the funds needed to develop an infrastructure platform to
commence our business plan.
Our
current principal executive office is located at 999 – 3
rd
Avenue #3800,
Seattle, Washington 98104. Our telephone number is (206) 224-4108. However,
on
December 12, 2007, we signed an agreement with Regus Group, LLC and, on January
1, 2008, will relocate our office to Seaford Fifth Avenue Plaza, 800 5th
Avenue,
Suite
4100, Seattle, WA 98104. Our telephone number will remain the same. We do not
currently have a website.
The
Offering
|
Securities
offered:
|
At
least a minimum of 437,900 and up to a maximum of 595,800 shares
of common
stock.
|
|
|
|
|
Offering
price:
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$0.10
per share until a market develops and thereafter at market prices
or
prices negotiated in private transactions.
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Shares
outstanding prior to offering:
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4,000,000
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Shares
outstanding after offering:
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4,437,900,
if the minimum of 437,900 shares of common stock is sold in this
offering;
or
4,595,800,
if the maximum of 595,800 shares of common stock is sold in this
offering.
Our
sole officer and director currently holds 100% of our shares, and,
as a
result, will exercise control over our direction. After the offering,
our
sole officer and director will hold approximately 87% if we are successful
at selling the maximum amount of shares offered.
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Market
for the common shares:
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There
has been no market for our securities. Our common stock is not traded
on
any exchange or on the over-the-counter market. After the effective
date
of the registration statement relating to this prospectus, we hope
to have
a market maker file an application with the National Association
of
Securities Dealers, Inc. for our common stock to be eligible for
trading
on the Over The Counter Bulletin Board. We do not yet have a
market maker who has agreed to file such application.
There
is no assurance that a trading market will develop, or, if developed,
that
it will be sustained. Consequently, a purchaser of our common stock
may
find it difficult to resell the securities offered herein should
the
purchaser desire to do so when eligible for public
resale.
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|
Use
of proceeds:
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The
offering will commence when the Securities and Exchange Commission
declares this prospectus effective. The offering will terminate upon
the
earlier of the sale of all the 595,800 shares of common stock being
offered or 180 calendar days. The termination date of the offering
may be
extended, in our discretion, for up to an additional 90 calendar
days.
If
we are successful at selling the maximum of 595,800 shares of common
stock
we are offering, our proceeds from this offering will be
$59,580. We intend to use these proceeds for the purchase of
equipment, advertising, professional fees, and various other
expenses. See the section below entitled “Use of
Proceeds.”
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Summary
Financial
Information
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As
of September 30,
2007
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Statement
of Operations
Data:
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Revenue
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$
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-
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Net
loss
|
|
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(10,988
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)
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Net
loss per share
|
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0.00
|
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Balance
Sheet
Data:
|
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Total
Assets
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9,028
|
|
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Total
Current Liabilities
|
|
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16
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|
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Total
Long Term Obligations
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$
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-
|
|
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Total
Stockholders' Equity (deficit)
|
|
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(9,012
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)
|
RISK
FACTORS
Investing
in us entails a high degree of risk. Factors that could cause or contribute
to
differences in our actual results include those discussed in the following
section. You should consider carefully the following risk factors, together with
all of the other information included in this prospectus. Each of these risk
factors could adversely affect our business, operating results and financial
condition, as well as adversely affect the value of our common stock, which
could result in the loss of all or part of your investment.
Risk
Factors Relating to Our
Company
1.
We
are a development
stage company and may never be able to effectuate our business plan or achieve
any revenues or profitability; at this stage of our business, even with our
good
faith efforts, potential investors have a high probability of losing their
entire investment.
We
were
established on January 30, 2007 and have no operating history. We are
in the development stage and are subject to all of the risks inherent in the
establishment of a new business enterprise. We have had no revenue to
date. Our operations to date have been focused on organizational,
start-up, preliminary market research, and fund raising activities. As a
development stage company, the Company is a highly speculative venture involving
significant financial risk. It is uncertain as to when we will become
profitable, if ever.
There
is
nothing at this time on which to base an assumption that our business operations
will prove to be successful or that we will ever be able to operate profitably.
We may not be able to successfully effectuate our business plan. There can
be no
assurance that we will ever achieve any revenues or profitability. The revenue
and income potential of our proposed business and operations is unproven as
the
lack of operating history makes it difficult to evaluate the future prospects
of
our business. Accordingly, our prospects must be considered in light of the
risks, expenses and difficulties frequently encountered in establishing a new
business.
2.
We
expect losses
in the future and as a result, we may not be able to continue operations. Unless
we are able to generate revenues and make a profit, our stockholders may lose
their entire investment in us.
We
expect
to incur losses over the next twelve months because we do not yet have any
revenues to offset the expenses associated with the development and the
marketing of our of our call-back service. We cannot guarantee that we will
ever
be successful in generating revenues in the future. We recognize that if we
are
unable to generate revenues, we will not be able to earn profits or continue
operations and as a result our stockholders may lose their entire investment
in
us. There is no history upon which to base any assumption as to the
likelihood that we will prove successful, and we can provide investors with
no
assurance that we will generate any operating revenues or ever achieve
profitable operations.
3.
If
our business
strategy is not successful, we may not be able to continue operations as a
going
concern and our stockholders may lose their entire investment in
us.
As
discussed in the Notes to Financial Statements included in this registration
statement, we incurred a net loss of $10,988 for the period January 30, 2007
(inception) to September 30, 2007. This factor raises substantial doubt that
we
will be able to continue operations as a going concern, and our independent
auditors included an explanatory paragraph regarding this uncertainty in their
report on our financial statements for this period. Our ability to
continue as a going concern is dependent upon our generating
cash
flow
sufficient to fund operations and reduce operating expenses. If we cannot
continue as a going concern, our stockholders may lose their entire investment
in us.
4.
We
will not be able to
generate revenue unless and until we successfully develop our call-back
system.
The
Company expects to incur operating losses over the next twelve months because
we
have no plan to generate revenue unless and until we are successful in
developing our call-back system. We anticipate relying upon third parties to
develop such call-back system. We cannot guarantee that we will ever be
successful in developing the call-back system or in generating revenues in
the
future. We recognize that if we are unable to generate revenues, we will not
be
able to earn profits or continue operations. We can provide investors
with no assurance that we will generate any operating revenues or ever achieve
profitable operations.
5.
We
are heavily
dependent upon Mr. Mazen Hleiss, our sole officer and director. The
loss of Mr. Hleiss, or the inability to contract with qualified third
parties, whose knowledge, leadership and technical expertise upon which we
rely,
would harm our ability to execute our business plan.
We
are
dependent on the continued contributions of Mazen Hleiss, our sole officer,
whose knowledge, leadership and experience would be difficult to
replace. We do not maintain any key person insurance on our officer.
If we were to lose his services, our ability to execute our business plan would
be harmed, and we may be forced to cease operations until such time as we can
hire suitable replacements. As we anticipate relying upon third-parties to
develop our call-back system, if we are unable to contract with such
qualified third-parties we will not be able to develop our system. As such,
we
will not be able to generate revenues or continue operations.
6.
Since
our sole officer
and director works for other companies, his other activities could slow down
our
operations and we may not be able to successfully effectuate our business
plan.
Mazen
Hleiss, our sole officer does not work exclusively for us and does not devote
all of his time to our operations. Therefore, it is possible that a
conflict of interest with regard to his time may arise based upon his employment
with other companies. His other activities may prevent him from
devoting his full-time to our operations which could slow our operations and
consequently may reduce our financial results. It is expected that
Mr. Hleiss will only be available to the Company on a part-time basis and may
devote approximately twenty hours per week to our operations on an ongoing
basis. Mr. Hleiss has other part-time employment obligations which do
not preclude him from devoting up to 20 hours per week to Company business.
If
our sole officer and director does not devote sufficient time towards our
business, we may never be able to effectuate our business plan.
7.
We
expect to
rely heavily on resellers and distributors of our call-back system in order
to
generate revenues. If we fail to contract with resellers and distributors,
we
may
not be able to generate
sufficient revenues to continue operations. As a result, our stockholders may
lose their entire investment in us.
Our
Company expects to rely heavily on a network of resellers and distributors
of
our call-back system and services as a primary source of revenues. We have
no
contracts or agreements with any resellers or distributors to resell our
call-back services. We cannot provide any assurances that we will be able to
successfully contract with any such resellers and distributors. If we fail
to do
so, we may not be able to generate sufficient revenues to continue operations.
Accordingly, our stockholders may lose their entire investment in
us.
8.
If
we are unable to
obtain additional funding in the future, our business operations will be harmed.
Even if we do obtain additional financing, our then existing shareholders may
suffer substantial dilution.
We
expect
that the net proceeds of the offering to which this prospectus relates, even
if
only the minimum number of shares are sold, will be sufficient to fund the
operating expenses associated with the development of our call-back system
and
our proposed marketing and distribution program for the next twelve months.
If
our expenses over the next twelve months exceed our budgeted expenses, we may
need to raise additional funds to pay for such additional expenses. Such
additional funds may come from the sale of equity and/or debt securities and/or
loans. It is possible that additional capital will be required to effectively
support our operations and to otherwise implement the Company’s overall business
strategy. The inability to raise the required capital will restrict our ability
to grow and may reduce our ability to continue to conduct business operations.
If we are unable to obtain necessary financing, we will likely be required
to
curtail our development plans which could cause the Company to become dormant.
We currently do not have any arrangements or agreements to raise additional
capital. Any additional equity financing may involve substantial dilution to
our
then existing shareholders.
9.
We
may not be able to compete with
current and potential competitors, some of whom have greater resources and
experience than we do
.
The
call-back services market in which we operate is subject to rapid technological
changes. We may not have the resources to compete with our existing competitors
or with any new competitors. Our competitors have significantly greater
personnel, financial, managerial, and technical resources than we do. This
competition from other companies with greater resources and reputations may
result in our failure to maintain or expand our business as we may never be
able
to develop customers for our products and services.
10.
Our
lack of business
diversification could have a negative impact on our financial performance if
we
do not generate revenue from our products or such revenues
decrease.
We
expect
that our business will consist solely of the development of a call-back system
and sale of call-back services. We currently have no other planned lines of
business or other sources of revenue. Our lack of business diversification
could
cause us to be unable to generate revenues since we do not have any other lines
of business or alternative revenue sources other than the sale of our all-back
platform and service.
11.
If
we fail to develop
and maintain an effective system of internal controls, we may not be able to
accurately report our financial results or prevent fraud; as a result, current
and potential shareholders could lose confidence in our financial reports,
which
could harm our business and the trading price of our common
stock.
Effective
internal controls are necessary for us to provide reliable financial reports
and
effectively prevent fraud. Section 404 of the Sarbanes-Oxley Act of 2002
requires us to evaluate and report on our internal controls over financial
reporting and have our independent registered public accounting firm annually
attest to our evaluation, as well as issue their own opinion on our internal
controls over financial reporting, beginning with our Annual Report on Form
10-KSB for the fiscal year ended December 31, 2008. We plan to prepare for
compliance with Section 404 by strengthening, assessing and testing our system
of internal controls to provide the basis for our report. The process of
strengthening our internal controls and complying with Section 404 is expensive
and time consuming, and requires significant management attention. We cannot
be
certain that the measures we will undertake will ensure that we will maintain
adequate controls over our financial processes and reporting in the future.
Furthermore, if we are able to rapidly grow our business, the internal controls
that we will need will become more complex, and significantly more resources
will be required to ensure our internal controls remain effective. Failure
to
implement required controls, or difficulties encountered in their
implementation, could harm our operating results or cause us to fail to meet
our
reporting obligations. If we or our auditors discover a material weakness in
our
internal controls, the disclosure of that fact, even if the weakness is quickly
remedied, could diminish investors’ confidence in our financial statements and
harm our stock price. In addition, non-compliance with Section 404 could subject
us to a variety of administrative sanctions, including the suspension of
trading, ineligibility for listing on one of the Nasdaq Stock Markets or
national securities exchanges, and the inability of registered broker-dealers
to
make a market in our common stock, which would further reduce our stock
price.
12.
Because
we do not
have an audit or compensation committee, shareholders will have to rely on
our
sole director, who is not independent, to perform these
functions.
We
do not
have an audit or compensation committee comprised of independent directors.
Indeed, we do not have any audit or compensation committee. These functions
are
performed by, Mazen Hleiss, our sole director and officer. Thus,
there is a potential conflict of interest in that our sole director and officer
has the authority to determine issues concerning management compensation and
audit issues that may affect management decisions.
13.
Our
principal stockholder,
who is also our sole officer and director, owns a controlling interest in our
voting stock. Therefore, investors will not have any voice in our management,
which could result in decisions adverse to our general
shareholders.
Mazen
Hleiss, our sole officer and director beneficially owns 100% of our outstanding
common stock. Assuming all shares in this offering are sold, Mr. Hleiss will
own
87% of our outstanding common stock. As a result, Mr. Hleiss will have the
ability to control substantially all matters submitted to our stockholders
for
approval including:
• election
of our board of directors;
• removal
of any of our directors;
• amendment
of our Articles of
Incorporation or bylaws; and
|
•
|
adoption
of measures that could delay or prevent a change in control or impede
a
merger, takeover or other business combination involving
us.
|
As
a
result of his ownership and positions, our director and executive officer will
be able to influence all matters requiring shareholder approval, including
the
election of directors and approval of significant corporate transactions. In
addition, the future prospect of sales of significant amounts of shares held
by
our director and executive officer, could affect the market price of our common
stock if the marketplace does not orderly adjust to the increase in shares
in
the market and the value of your investment in the Company may decrease.
Management’s stock ownership may discourage a potential acquirer from making a
tender offer or otherwise attempting to obtain control of us, which in turn
could reduce our stock price or prevent our stockholders from realizing a
premium over our stock price.
14.
We
will rely on a Voice over Internet Protocol (“VoIP”) provider for our
telephone connections; any delay, interruption or financial difficulties by
our
VoIP provider would result in delayed or reduced rate of service to our future
customers and may harm our business.
We
anticipate relying upon a third-party VoIP services provider to provide
telephone connectivity for our call-back services. We do not have any contracts
or agreements with any such VoIP provider. We do not anticipate having any
control over the operations of our VoIP provider, and as result, any delay,
interruption or financial difficulties by such provider would result in delayed,
interrupted or reduced rates of service to our future customers which may harm
our business.
When
operating in foreign countries, such as Canada, we expect to incur a certain
amount of our expenses from our operations in foreign currency and translate
these amounts into United States dollars for purposes of reporting operating
results. As a result, fluctuations in foreign currency exchange rates may
adversely affect our expenses and results of
operations,
as well as the value of our assets and liabilities. Fluctuations may adversely
affect the comparability of period-to-period results. In addition, we anticipate
holding foreign currency balances, which will create foreign exchange gains
or
losses, depending upon the relative values of the foreign currency at the
beginning and end of the reporting period, which may affect our net income
and
earnings per share. Although we may use hedging techniques in the future (which
we currently do not use), we may not be able to eliminate the effects of
currency fluctuations. Thus, exchange rate fluctuations could have a material
adverse impact on our operating results and stock price.
16.
Future
legislation or
regulation of the internet and/or internet commerce services, could restrict
our
business, prevent us from offering service or increase our cost of doing
business, which could result in a loss of revenue.
At
present there are few laws, regulations, or rulings that specifically address
access to or commerce on the internet. We are unable to predict the impact,
if
any, that future legislation, legal decisions, or regulations concerning the
Internet may have on our business, financial condition, and results of
operations. Regulation may be targeted towards, among other things, assessing
access
or settlement charges, imposing taxes related
to internet commerce,
imposing tariffs or regulations based on encryption concerns or the
characteristics and quality of products and services. Any such
regulation could restrict our business or increase our cost of doing business
and consequently a loss of future revenue.
Risks
Relating To Our Common
Shares
17.
We
may, in the
future, issue additional common shares, which would reduce investors' percent
of
ownership and may dilute our share value.
Our
Articles of Incorporation authorize the issuance of 50,000,000 shares of common
stock, of which 4,000,000 shares are issued and outstanding. The
future issuance of common stock may result in substantial dilution in the
percentage of our common stock held by our then existing shareholders. We may
value any common stock issued in the future on an arbitrary basis. The issuance
of common stock for future services or acquisitions or other corporate actions
may have the effect of diluting the value of the shares held by our investors,
and might have an adverse effect on any trading market for our common
stock.
18.
Our
common shares are
subject to the "Penny Stock" Rules of the SEC and the trading market in our
securities is limited, which makes transactions in our stock cumbersome and
may
reduce the value of an investment in our stock.
The
Securities and Exchange Commission has adopted Rule 15g-9 which establishes
the
definition of a "penny stock," for the purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions.
For
any transaction involving a penny stock, unless exempt, the rules
require:
|
·
|
that
a broker or dealer approve a person's account for transactions in
penny
stocks; and
|
|
·
|
the
broker or dealer receive from the investor a written agreement to
the
transaction, setting forth the identity and quantity of the penny
stock to
be purchased.
|
In
order
to approve a person's account for transactions in penny stocks, the broker
or
dealer must:
|
·
|
obtain
financial information and investment experience objectives of the
person;
and
|
|
·
|
make
a reasonable determination that the transactions in penny stocks
are
suitable for that person and the person has sufficient knowledge
and
experience in financial matters to be capable of evaluating the risks
of
transactions in penny stocks.
|
The
broker or dealer must also deliver, prior to any transaction in a penny stock,
a
disclosure schedule prescribed by the Commission relating to the penny stock
market, which, in highlight form:
|
·
|
sets
forth the basis on which the broker or dealer made the
suitability determination;
and
|
|
·
|
that
the broker or dealer received a signed, written agreement from the
investor prior to the transaction.
|
Generally,
brokers may be less willing to execute transactions in securities subject to
the
“penny stock” rules. This may make it more difficult for investors to dispose of
our Common shares and cause a decline in the market value of our
stock.
Disclosure
also has to be made about the risks of investing in penny stocks in both public
offerings and in secondary trading and about the commissions payable to both
the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in the account
and
information on the limited market in penny stocks.
19.
There is no current trading
market for our securities and if a trading market does not develop, purchasers
of our securities may have difficulty selling their shares.
There
is
currently no established public trading market for our securities and an active
trading market in our securities may not develop or, if developed, may not
be
sustained. We intend to have a market maker apply for admission to quotation
of
our securities on the NASD Over The Counter Bulletin Board after the
registration statement relating to this prospectus is declared effective by
the
SEC. We do not yet have a market maker who has agreed to file such
application. If for any reason our common stock is not quoted on the
Over The Counter Bulletin Board or a public trading market does not otherwise
develop, purchasers of the shares may have difficulty selling their common
stock
should
they
desire to do so. No market makers have committed to becoming market makers
for
our common stock and none may do so.
20.
Because we do not intend to pay
any cash dividends on our common stock, our stockholders will not be able to
receive a return on their shares unless they sell them.
We
intend
to retain any future earnings to finance the development and expansion of our
business. We do not anticipate paying any cash dividends on our common stock
in
the foreseeable future. Unless we pay dividends, our stockholders will not
be
able to receive a return on their shares unless the value of such shares
appreciates and they sell them. There is no assurance that stockholders will
be
able to sell shares when desired.
THE
OFFERING
This
prospectus relates to the offering and sale by our Company of at least an
aggregate of 437,900, and up to an aggregate of 595,800 shares of the Company’s
common stock. The shares will be offered on a “best efforts all or none basis”
as to the first 437,900, shares and on a “best efforts basis” as to the
remaining 157,900 shares. The shares will be sold by our sole director and
officer on our behalf, and no underwriters or broker-dealers will be involved
in
such offering. Our sole director and officer will not receive any compensation,
directly or indirectly, in connection with the offer and sale of the shares
offered under this prospectus. We will pay all expenses incurred in this
offering. The offering will commence as soon as practicable after the effective
date of the registration statement relating to this prospectus. It
will terminate 180 calendar days after such effective date, but such termination
date may be extended for up to an additional 90 calendar days in our
discretion. We reserve the right to terminate the offering at an
earlier date, in our sole discretion, even if no shares are sold.
USE
OF PROCEEDS
We
will
receive proceeds from the sale of the shares of common stock being offered
by
our Company. The table below and the discussion which follows sets forth the
use
of proceeds depending upon whether a minimum of 437,900 shares, 516,850 shares,
or the maximum of 595,800 shares of common stock are sold.
|
|
|
Minimum
437,900 shares are
sold
|
|
|
516,850
shares are
sold
|
|
|
Maximum
595,800 shares are
sold
|
|
|
Servers
|
|
$
|
2,000.00
|
|
|
$
|
2,750.00
|
|
|
$
|
3,500.00
|
|
|
Server
hosting
|
|
$
|
2,400.00
|
|
|
$
|
2,400.00
|
|
|
$
|
2,400.00
|
|
|
Voice
over IP Connectivity
|
|
$
|
1,200.00
|
|
|
$
|
2,350.00
|
|
|
$
|
3,500.00
|
|
|
Software
Development and Customization
|
|
$
|
12,500.00
|
|
|
$
|
14,100.00
|
|
|
$
|
14,100.00
|
|
|
Telephone
|
|
$
|
1,200.00
|
|
|
$
|
1,400.00
|
|
|
$
|
1,600.00
|
|
|
Web
hosting
|
|
$
|
240.00
|
|
|
$
|
360.00
|
|
|
$
|
480.00
|
|
|
Corporate
and marketing collateral
|
|
$
|
2,600.00
|
|
|
$
|
3,000.00
|
|
|
$
|
3,000.00
|
|
|
Advertising
|
|
$
|
2,500.00
|
|
|
$
|
5,820.00
|
|
|
$
|
9,500.00
|
|
|
Sales
Assistant
|
|
$
|
2,800.00
|
|
|
$
|
2,800.00
|
|
|
$
|
2,800.00
|
|
|
Office
Equipment
|
|
$
|
820.00
|
|
|
$
|
950.00
|
|
|
$
|
1,500.00
|
|
|
Office
Rental
|
|
$
|
2,280.00
|
|
|
$
|
2,280.00
|
|
|
$
|
2,280.00
|
|
|
Office
Supplies
|
|
$
|
950.00
|
|
|
$
|
1,075.00
|
|
|
$
|
2,200.00
|
|
|
Misc.
Expenditure
|
|
$
|
800.00
|
|
|
$
|
900.00
|
|
|
$
|
1,220.00
|
|
|
Transfer
Agent
|
|
$
|
2,500.00
|
|
|
$
|
2,500.00
|
|
|
$
|
2,500.00
|
|
|
Accountant,
Auditor and Legal
|
|
$
|
9,000.00
|
|
|
$
|
9,000.00
|
|
|
$
|
9,000.00
|
|
|
Total
|
|
$
|
43,790.00
|
|
|
$
|
51,685.00
|
|
|
$
|
59,580.00
|
|
If
the minimum offering is
sold:
We will still be able to execute our business plan. However, we
will have less money to spend on advertising, and our software will have less
functionality.
If
516,850 shares are
sold:
We intend to use the additional proceeds to develop additional
functionality for our call-back software as well as purchase more reliable
and
powerful computer servers. We will also spend more money on advertising which
will result in more customers and hence higher Voice over IP Connectivity
Cost.
If
the maximum offering is
sold:
We will be able to spend more money on advertising, which may
attract a higher number of customers, which would result in more Voice over
IP
Connectivity cost. We would also invest in more powerful computer servers to
be
able to handle the additional number of customers. We believe that this sum
will
enable us to most effectively execute on our business plan.
Servers:
We anticipate
purchasing two computer servers to host the Call-back software and associated
elements. Depending on the sum raised, we will purchase more powerful servers
-
the more powerful servers being more expensive.
Server
hosting:
The
above-mentioned servers will be hosted in a data center. Typically, a monthly
fee of $100 per server is charged. We have budgeted $2,400 for the full first
year.
Voice
over IP Connectivity:
Refers to the cost of the connecting our service to a VoIP provider that will
provide us with both local and long distance connectivity. It is expected that
until we have established our customer base, this cost will be
minimal.
Software
Development and
Customization:
This is the fee paid to the software consultant for the
development and customization of the call-back solution.
Telephone:
This refers to
internal telephone cost such as a phone and fax lines for the Company as well
as
long distance.
Web
hosting:
We anticipate
that we will host our corporate web site and email with an external web hosting
provider.
Corporate
and Marketing
Collateral:
These include the design of a logo, web site, stationary and
brochures, as well as the printing of a limited amount of stationary and
brochures.
Advertising:
Our advertising
will be targeted toward web sites that attract resellers of our product. We
also
intend to advertise on Google’s website (www.google.com) using its Adwords
program. AdWords is Google's flagship advertising product which displays
advertising when the user of the Google search engine searches for specific
terms. Using this product, we are able to define which terms we want our
advertising to show for, how much money to spend every time a user clicks on
our
advertising (referred to as “Cost per Click” or “CPC”), the total daily budget
and the geographical area of the user.
Office
Rental:
We have rented
office space in Seattle, Washington for a monthly fee of $190.
Office
equipment:
We
anticipate that will need to purchase a file cabinet and a laptop computer
with
Microsoft Windows and Office (Professional Edition) software.
Office
supplies:
This refers
to general office supplies including, but not limited to, printer cartridges,
envelopes, stamps, scissors, staples, etc.
Misc.
Expenditures:
This
refers to miscellaneous items that have not been accounted for or that is
difficult to predict such as bank fees, entertainment, software,
etc.
Transfer
Agent:
While we do
not currently have any agreement with a Transfer Agent, this charge refers
to
any fees associated with retaining a Transfer Agent.
Legal
and Accounting:
We will
be incurring accounting, auditing and legal fees associated with being a public
company.
We
intend
to use the proceeds of this offering in the manner and in order of priority
set
forth above. We do not intend to use the proceeds to acquire assets or finance
the acquisition of other businesses. At present, no material changes are
contemplated. Should there be any material changes in the projected use of
proceeds in connection with this offering, we will issue an amended prospectus
reflecting the new uses.
In
all
instances, after the effectiveness of this registration statement, the Company
will need some amount of working capital to maintain its general existence
and
comply with its public reporting obligations. In addition to changing
allocations due to the amount of proceeds received, we may change the uses
of
proceeds because of required changes in our business plan. Investors should
understand that we have wide discretion over the use of proceeds. Therefore,
management decisions may not be in line with the initial objectives of investors
who will have little ability to influence these decisions.
DETERMINATION
OF OFFERING
PRICE
Our
common stock is presently not traded on any market or securities exchange and
we
have not applied for listing or quotation on any public market. Our
Company will be offering the shares of common stock being covered by this
prospectus at a price of $0.10 per share until a market develops and thereafter
at prevailing market prices or privately negotiated prices. Such
offering price does not have any relationship to any established criteria of
value, such as book value or earnings per share. As we have no
significant operating history and have not generated any revenues to date,
the
price of our common stock is not based on past earnings, nor is the price of
our
common stock indicative of the current market value of the assets owned by
us.
No valuation or appraisal has been prepared for our business and potential
business expansion.
The
offering price was determined arbitrarily based on a determination of the Board
of Directors of the price at which it was believed investors would be willing
to
purchase the shares. Additional factors that were included in
determining the offering price are the lack of liquidity resulting from the
fact
that there is no present market for our stock and the high level of risk
considering our lack of operating history.
DILUTION
“Dilution”
represents the difference between the offering price and the net tangible book
value per share immediately after completion of this offering. “Net tangible
book value” is the amount that results from subtracting the total liabilities
and intangible assets in the Company from its total assets. Dilution arises
mainly from the arbitrary decision by the Company as to the offering price
per
share of the shares offered hereunder. Dilution of the value of the shares
purchased by the investors in this offering will also be due to the lower book
value of the shares presently outstanding.
As
of
September 30, 2007, our net tangible book value was $9,028. Such
number was calculated by subtracting the total liabilities, excluding contingent
liabilities, less any immediate expenses from the total assets, excluding
intangible assets.
If
all
595,800 shares offered in the offering are sold (but without taking into account
any change in such net tangible book value after completion of this offering,
other than that resulting from the sale of the shares offered hereby) the net
tangible book value of the 4,595,800 shares to be outstanding will increase
by
the net proceeds of $59,580 to $67,739 or approximately $0.01 per share.
Accordingly, the net tangible book value of the shares held by the existing
stockholders of the Company (i.e., 4,000,000 shares) will increase by
approximately $0.01 per share without any additional investment on their part,
and the purchasers of the shares offered hereby will incur immediate dilution
(a
reduction in net tangible book value per share from the offering price of $0.10
per share) of approximately $0.09 per share or 90%. The purchasers of
the shares offered hereby will own approximately 13% of the total number of
shares then outstanding, for which they will have made cash investment of
$59,580, at $0.10 per share. The existing stockholder of the Company will own
approximately 87% of the total number of shares then
outstanding,
for which they have made cash investments of $20,000 or approximately $0.005
per
share.
If
the
minimum of 437,900 shares offered hereby are sold, but without taking into
account any change in such net tangible book value after completion of this
offering, other than that resulting from the sale of the shares offered hereby,
the net tangible book value of the 4,437,900 shares to be outstanding will
increase by the net proceeds of $43,790 to $52,802 or approximately $0.01 per
share. Accordingly, the net tangible book value of the shares held by the
existing stockholders of the Company (i.e. 4,000,000 shares) will increase
by
approximately $0.01 per share without any additional investment on their part,
and the purchasers of the shares offered hereby will incur immediate dilution
(a
reduction in net tangible book value per share from the offering price of $0.10
per share) of approximately $0.09 per share or 90%. The purchasers of
the shares offered hereby will own approximately 10% of the total number of
shares then outstanding, for which they will have made cash investments of
$43,790, at $0.10 per share. The existing stockholders of the Company will
own
approximately 90% of the total number of shares then outstanding, for which
they
have made an investment of cash of $20,000, or approximately $0.005 per
share.
DESCRIPTION
OF
BUSINESS
We
were
incorporated in the State of Nevada on January 30, 2007, and are a development
stage company. From our inception to date, we have not generated any
revenues, and our operations have been limited to organizational, start-up,
and
capital formation activities. We currently have no employees other
than our sole officer, who is also our sole director.
Our
principal executive offices are currently located at 999 – 3
rd
Avenue #3800,
Seattle, Washington 98104. Our telephone number is (206) 224-4108. However,
on
December 12, 2007, we signed an agreement with Regus Group, LLC and, on January
1, 2008, will relocate our office to Seaford Fifth Avenue Plaza, 800 5th
Avenue,
Suite
4100, Seattle, WA 98104. Our telephone number will remain the same.
We
intend
to engage in the development and marketing of call-back services using a
call-back platform. Generally, our anticipated call-back service will enable
a
customer to call a designated telephone number and disconnect. The system will
automatically identify the caller as a customer, call the user back and provide
the customer with a dial-tone to place an outbound call. In doing so, our
service will enable our customers to realize cost savings when there is a
substantial differential between the cost of placing and receiving
calls.
As
an
example of how our call-back services may be utilized, some cellular providers
allow their customers to receive many minutes for free (some offer unlimited
free incoming minutes) but allow only a limited number of outgoing minutes
for
free and charge a substantial amount for minutes exceeding the number of free
minutes. If such customer also subscribes to our service, they will be able
to
initiate a call from our system to their phone which will appear as an incoming
call rather than an outbound one, potentially providing the customer with cost
savings.
A
sample
call flow would occur as follows: A customer dials a telephone number that
is
owned by us which automatically forwards the call to our call-back switch.
The
customer hangs up after three rings. Our system does not answer the call (so
that the customer is not charged for a call by their phone company) but rather
detects the customer’s phone number. The system automatically checks our
customer database and identifies whether the phone number belongs to a customer.
If the answer is no, then the system takes no action. If the caller is a
customer and has sufficient funds on balance with us, our system will place
a
call to the customer (we intend that such call will be through a Voice over
IP
company) and prompts the customer to enter the number they would like to call.
The customer enters the destination number and our system will send the call
to
the VoIP carrier’s network. Our system will then track the duration and cost of
the call and deduct the appropriate funds from the customer account. If the
balance reaches zero, customers will receive a voice prompt notifying them
that
their funds are running low and the call will be terminated.
The
callback system is a software program that resides on a computer server that
is
connected to the public Internet. It will be connected with a VoIP provider
across the Internet (if our system is not located in the same facility as the
VoIP service provider) or directly to their equipment (if we are located in
the
same facility). The VoIP company will provide us with phone numbers that
customers can call to initiate a call back. They will also provide us with
the
ability to place calls in North America and internationally.
The
callback system will also have a database of all of our customers and their
particular information such as name, email, address, phone numbers, account
balance and call history. The system will also have telephony software that
is
able to receive calls, initiate calls, play prompts (messages) and connect
to
outside parties during a call.
We
have
not yet developed our call-back system. As discussed below, our
initial focus will be to engage in the development of our call-back
system. This is described below in our “Products and Services”
section. Management intends to outsource the development of this product
offshore to reduce costs. However, the intellectual property rights
over our software will be retained by the Company. We except that this will
be
completed within approximately eight months following the termination of this
offering, after which we intend to begin marketing our services. All our
services will be based on a pre-paid model where a customer must pre-pay for
services. We will be marketing our services primarily through a network of
regional resellers and distributors in Canada. We also plan to hire a
sales/support assistant in approximately eleven months from development of
our
service to help our executive officer provide support to our end-users and
resellers.
Industry
Background
There
are
instances when a phone call placed in one direction is considerably cheaper
than
a phone call placed in the opposite direction. For example, if a person in
one
region places a call to someone in a different region, the cost may be several
times lower than if the call originated from the opposite location. This
difference provides an opportunity to
offer
what is referred to as a call-back service. Call-back services have been used
in
the international long distance market to bypass expensive long distance charges
in certain countries (such as the Philippines, Lebanon, United Arab Emirates,
and numerous others). A more recent development is the use of call-back services
in conjunction with cellular phone plans. This allow customers to take advantage
of the proliferation of unlimited incoming cellular plans in certain countries,
such as Canada, and use call-back systems to initiate free or low cost outgoing
calls. We plan to focus on the provision of call-back services for
cellular phones. We anticipate that our initial focus will be directed to the
Canadian market.
Call-back
services:
A
call-back system enables a user to call in a number and hang up. The system
will
then call the person and provide him (or her) with a dial-tone to place a
call.
Some
cellular companies offer plans where the customer receives an unlimited or
a
large quantity of incoming minutes for free, while only is able to make a
limited numbers of free outgoing minutes. After customers exhaust the free
outgoing minutes, they are charged a high rate per minute, depending on the
carrier and whether a call is placed locally or long distance in the USA and
Canada. A call-back system allows the customer to initiate a call-back from
our
system. This makes it an incoming call for the customer and therefore,
free.
The
Market
Cellular
market:
The
cellular market is immensely large worldwide with 2.5 billion cellular
connections as of September 2006 (GSM Association and Ovum – a market research
company as quoted by IDG News Service on September 7, 2006). Cellular
connections do not represent the number of cellular users, since many
subscribers have more than one cellular connection. In addition, these figures
include prepaid accounts that may no longer be active. EtForcast, another market
research company, provides similar figures at just over 2 billion subscribers
in
2005 (http://www.etforecasts.com/). EtForcast figures refer to cellular
subscribers rather than cellular connections.
It
is
impossible to verify the number of subscriptions to specific plans as cellular
companies do not disclose this information and provide only total numbers of
subscribers. “Unlimited” (or a very large number of) incoming minute plans are
popular with plans being offered by nearly every major cellular service
provider.
We
intend
to pursue the Canadian cellular market through a series of regional distributors
and resellers. We do not plan on allocating any resources at this point to
penetrate the U.S. market and will instead focus exclusively on the Canadian
market.
Our
Products and
Services
We
have
reviewed available call-back solutions currently in the market in order to
determine how best to develop, deploy and offer our services, and have narrowed
our options to two solutions:
|
·
|
The
first is to purchase licenses for a commercial call-back package
such as
that offered by VoipSwitch (
www
.VoipSwitch.com).
|
|
·
|
The
second is to use an open source product such as Asterisk2billing
(www.asterisk2billing.org). The software includes call-back functionality.
However, it will require a significant level of customization (See
below
under Product Development) and does not include a multi-level reseller
module.
|
We
decided that the second option presents the best and most cost effect
opportunity for the Company to develop our service for the following
reasons:
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·
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We
will have license-free software to deploy on as many servers as we
need,
whereas choosing the first option will force us to buy software licenses
for every server we deploy.
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·
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We
have the ability to customize the second product and continuously
introduce new products.
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·
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Asterisk2billing
runs over the Linux operating system while VoipSwitch runs over the
Microsoft Windows operating system. Our management belives that
Windows systems are more expensive and require more powerful, and
therefore more expensive, servers as compare to the Linux operating
system. As of April 4, 2007, a single CPU license for Microsoft Server
2003 (Datacenter Server Edition) costs $2,999. Linux operating systems
are
free.
|
What
is
Asterisk2Billing?
Asterisk2Billing
is an open source project (available for download and use for free) with a
web
site at www.asterisk2billing.org. Asterisk2billing is a fully featured calling
card platform running on an Asterisk server (Asterisk is an open source free
telephone software available at www.asterisk.org) providing a complete solution
for both prepaid (a customer must pre-pay for service which means that they
must
have a positive balance in their account to place a call) and post-paid (a
customer typically pays for services at the end of the month) calling card
services. Its main disadvantage is that it does not have a multiple reseller
module.
We
will
be making substantial modifications and additions to the software to meet our
needs as described in our Platform Development section below.
Utalk’s
Call-Back
Packages:
We
anticipate that our pricing packages will be either flat-fee, usage-based,
or a
combination of the two:
·
Flat-fee
packages: A user is charged a flat monthly fee for the service. We anticipate
offering several local and national packages.
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·
|
Usage-based
package: A user is charged by the minute based upon a specified
rate.
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·
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Hybrid
Packages: Hybrid packages combine the above two options. A customer
may
have a local or national package which makes his calls to these areas
free. However, he is charged by the minute based upon a specified
rate for
calls outside the free calling area of his
plan.
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All
packages will be pre-paid, meaning that a customer must pre-pay for all of
the
services used on our web site. All payments will be converted received on our
web site by Paypal (our payment processor) into US funds at the prevailing
rate
which will in turn be deposited in our US bank account.
Utalk’s
Call-Back Platform
Development:
We
must
customize the Asterisk2billing software in order to meet our needs. Our software
development will be primarily conducted by outside contractors supervised
closely by our sole officer and director. The development of our product will
commence as soon as the minimum funding has been secured. Our development tasks
and the approximate durations of these tasks are described below:
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·
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Selection
of Software Development Contractor: Mr. Hleiss will lead the selection
of
one or more contractors in order to install and modify the software
to fit
our needs. Mr. Hleiss will develop a request for quotations that
will be
sent to several contractors. The selection will be based on price,
experience and track record. We expect the selection process to take
1
month following the offering.
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·
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Specifications
and high-level design: We expect that we will complete specifications
for
the product and finish high-level design 2 months after the selection
of a
software contractor. This will include the development of specifications
for new software elements (referred to as modules) to be developed
and
those to be modified. This will be an interactive process between
our
management and the software
contractor.
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·
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Development
Infrastructure deployment: This will include the purchase of two
servers.
One server will be used for development while the other one is used
for
the deployment of the product. The installation of the
operating system, Asterisk software and the Asterisk2 billing software
is
believed to take two weeks. This task will be performed by the software
contractor.
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Reseller
Portals: We will be designing a reseller portal (a portal is a web site where
resellers can track their sales, customers and balances) which does not
currently exist in Asterisk2Billing. We will be supporting up to 3 levels of
resellers. Our software will also support affiliates. Affiliates are those
who
simply refer customers to our service. These can be individuals, web sites
or
companies who do not want to directly sell the service.
Rather,
affiliates simply refer customers to a reseller and the affiliate earns a
commission from reseller. Resellers can build their own affiliate program and
use our software to track sales and to compensate affiliates
accordingly.
Administrative
Portal: The system shall have an administrative portal. While there exists
currently an administrative portal in Asterisk2billing, it does not have any
tools to manage resellers. Therefore, we will modify the administrative portal
in order add support for reseller administration. We expect that this task
will
take one month to complete.
Customer
Portal or web page: We will be modifying the existing customer portal to make
it
more aesthetically appealing to our customers and to increase its utility and
functionality. We will also enable the customer to add funds to their account
from the customer portal using credit card or through Paypal. We have chosen
Paypal
(http
://www
.
paypal
.com)
to act as our
credit card merchant. Paypal is a financial company that accepts and clears
all
customer credit card payments on behalf of participating merchants, such as
our
Company.
There
are
no short or long term contracts or obligations associated with the use of
PayPal. Each reseller wishing to accept credit card or Paypal payment must
establish a Paypal merchant account. We expect that the customer portal will
take 30 days to finish.
We
intend
to deploy a trial system in approximately eight months and will subsequently
conduct a trial period lasting one month. We expect that it will take 1-2 months
to remedy any issue arising out of this trial.
Utalk’s
Call-Back Platform
Deployment:
The
production system will consist of a high-end server. We will also have a lower
end server to serve as a backup in case of failure in the primary
server.
The
system will be located in a data center. A data center is a facility used to
house mission critical computer systems and associated components. The data
center will include environmental controls (air conditioning, fire suppression,
etc.), redundant/backup power supplies, redundant data communications
connections and high security.
In
order
for our system to be able to place and receive calls, it is necessary to connect
to phone service providers. We will avoid the larger carriers since they
generally impose large monthly fees and minimum revenue commitments. There
are
many VoIP companies on the market that supply VoIP phone connectivity at a
low
cost with low commitment levels. Some also provide space, for a fee, in which
to
house our servers. This will allow us to directly connect to their equipment
which will increase reliability and quality of the calls and reduce the Internet
traffic cost. We have not entered into any agreements or contracts with any
such
VoIP companies.
Our
selection of the VoIP company will depend on:
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·
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Quality
of both national and international
connectivity
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·
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Location
of the data center where the VoIP company is
located.
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Sales
and
distribution
We
anticipate offering our services through distributors and resellers. We do
not
currently have any agreements or contracts with any distributors or
resellers.
Resellers
We
expect
to be able to support three levels of resellers. We refer to them as Levels
I,
II and III resellers.
Level
I
resellers are typically substantial organizations with strong distribution
networks (for example a calling card company or a company involved in the resale
of long distance services). Level I resellers can opt to have their own brand
name (in which case, they may set their own prices) or sell under one of Utalk’s
brand names. They will have the ability to add, suspend and manage Level II
and
III resellers.
Level
II
resellers typically recruit and manage multiple Level III resellers. They will
also have the ability to add, suspend and manage Level III
resellers.
Level
III
resellers are the individuals, stores and web sites that sell directly to the
end user. They have the ability to create end user accounts as well as add
credit to them.
Exclusive
Regional
Resellers
We
may
grant Level I resellers regional exclusivity. In such a case, we will set
revenue targets for the reseller as a requirement to maintaining its
exclusivity. This target will depend on the market size of the territory. If
the
reseller fails to meet the revenue target, we will retain the right to revoke
the exclusivity. The exclusive reseller will be responsible for recruiting
other
resellers within the territory. The grant of exclusivity will be based on,
in
addition to other factors, the following:
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Strength
of organization in the region.
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Track
record in this industry
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Commitment
to spend advertising dollars
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The
size of the region and its market
potential.
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The
territory of the exclusive reseller will depend on the size of the market and
the sale volume produced by said reseller.
We
believe our strategy of focusing on offering the Company’s services through
resellers rather than directly to the end user will allow us to capture a larger
market share at a significantly lower cost. If this strategy ultimately proves
to be successful, we will have ready access to the potentially large customer
bases serviced by resellers.
The
advantage for the reseller is immediate access to lucrative services without
the
need to invest in building and maintaining such systems as well as continuously
updating their service offering. It will also enable them to focus on core
competencies and up-selling services to their customer base.
Revenue
model
Our
revenue will be earned from direct and wholesale sales. Direct sales will be
revenue from brands that we own. These brands are marketed to the end users
directly by Utalk or through a network of resellers. Wholesale sales are
revenues earned by enabling other service providers to utilize the Company’s
call-back services.
Direct
sales:
In
this
case, the Company will collect revenue from the end users through credit card
payment using Paypal. When paying through Paypal, we will reserve a portion
of
the money for the resellers and affiliates and keep the rest. Our system will
automatically calculate the revenue sharing between Utalk and the different
levels of resellers. Any such revenue sharing arrangement will be determined
based upon prevailing market conditions and will be re-evaluated on a regular
basis.
Wholesale:
In
this
model, a Level I reseller will brand our solution under their name. They will
wholesale services at a rate agreed upon with the Company, and then resell
them
at prices of their choosing. The wholesaler must pre-pay for services and their
clients will not be able to place calls if the wholesaler balance with us is
negative. The wholesaler is set as a reseller Level I in our system and will
be
able to have two levels of resellers working for them in addition to
affiliates.
Marketing
strategy
We
plan
on using “Cost per Click” (“CPC”) web based advertising to gain traffic to our
website. Under this program, we will design our own ads, target locations (ie.
countries or regions) and keywords. A “keyword” is another term for “search
term”. When someone is searching for information on the internet, they will
usually visit a search engine such as Yahoo or Google and type in some words
describing what they are looking for. The search engine then returns results
based upon the words submitted. Search engines such as Google have their own
CPC
advertising programs. We will be focusing on Google (Adwords) for primary
campaigns. Google is the most popular search
engine
and we believe it will provide us with the greatest potential amount of traffic
exposure.
With
CPC
advertising, we only pay for actual clicks on the ad, which will then be
directed through to our
website
. CPC-based advertising
allows businesses to pay only for the leads they receive. According to
www.businessnation.com, over 80% of people start their search through a search
engine when they need to find specific information online. In addition,
businessnation.com reports that consumers are 5 times more likely to purchase
from search listings, 7 times more likely to view search listings and 20 times
more likely to click on search listings, when compared to banner.
We
believe this is the most cost effective and targeted audience advertising we
can
obtain with our limited resources. This method will enable us to control our
advertising costs with respect to our target market through control over the
search terms, titles and description for each listing. Furthermore, we can
control the amount to pay for each listing and the maximum amount we wish to
spend on a daily basis. It also allows us to pause or alter the advertising.
The
keywords will focus on search results, which we believe will be most related
to
our product.
We
also
plan on selling our product through an Affiliate Marketing Program (“APM”). An
APM is a form of profit sharing program that is widely accepted and utilized
in
internet commerce. We will implement our website based APM program, which will
effectively track and account for affiliate activity. Under the APM, we pay
other website owners commission for referring customers who make a
purchase. Participating website owners provide links, such as
banners, to our products on their own websites. We are planning to
payout commissions of 10-20% of the product purchase price as an incentive
to
sell our products for each referred customer who uses or services.
Our
APM
management tools will also be available to our resellers who may choose to
develop their own APM program. Our advertising will be largely targeted to
recruiting resellers and service providers to adopt and resell our
service.
In
addition to Google advertising, we intend to advertise on websites such as
Linkshare.com, Commissiongroup.com, Affiliateprograms.com, and in periodicals
such as Revenue Today magazine (www.revenuetoday.com) - all of which are
targeted to affiliate marketing prospects and products. Affiliates will signup
directly on our website, or through one of the affiliate marketing sites listed
above. We believe the benefits of affiliate marketing far outweigh the
commission costs, given our current position as a startup with no revenue.
Affiliate marketers provide increased exposure to our product, incur the cost
of
generating traffic and save us the cost of hiring a sales and marketing force,
until we have the resources to do so.
Our
business model anticipates the creation of a network of established multi-level
reseller partners in our target market areas to reach our potential end
users. We believe we offer reseller partners certain advantages,
including:
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Fast
Time to Market - By taking advantage of our existing infrastructure
and
software solution, a distributor's service can be up and running within
days.
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Operational
Freedom - By outsourcing application management to us, resellers
can focus
on critical resources, revenue generation and business development
functions.
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Customization
- Our resellers are able to customize our solution to suit the needs
of
their end user client base.
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24/7
Access - Resellers or end users have access to applications via the
Internet on a 24/7 basis.
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Private
Label Solution - Our branded solutions offer distributors and agents
the
ability to build their own branded services in their territory. Our
services are designed to be privately labeled and can be customized
to
meet the reseller's "look and feel" in addition to business
processes.
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Branding:
Utalk
expects to introduce multiple service brands into the market with different
price points. While this may dilute the value of the Utalk brand, it is a common
practice by calling-cards companies. It may be necessary to create a specific
brand for a marketing agency who wants to be exclusively marketing this
brand.
Intellectual
Property
We
do not
have any patents or patent-pending applications. We currently have no
plans to seek patent protection, although we do not exclude that this may become
a possibility in the future. We will maintain ownership of the software
developed and do not intend to release the source code to anyone. Resellers will
have rights to use the software to sell our services but will not own the
software or have any ownership rights to it. They will also not be allowed
to
modify the software in any fashion.
Competition
While
there are many companies that focus on the international market for call-back
services, we intend to focus solely on the delivery of call-back services in
Canada. We are aware of only three companies that are focused on cellular phone
subscribers in Canada. Notwithstanding, other such companies may in fact exist
and it is very likely that they do. One company which we are aware of is
Globalive Communications Corp. (http://www.globalive.com), a private company
based in Toronto, Canada and offer services through Yak Communications (Canada)
Corp. (http://www.yak.com/). Its call-back product is named YakCallback.
However, they charge by the minute and do not offer flat fee monthly rates.
Another such company is IMC Telecom (http://www.imctelecom.com/) which offers
service in cities in Canada such as Montreal,
Ottawa,
Toronto, Calgary and Vancouver. The third company, a private company based
in
Vancouver, Canada, is Packetera Communications Inc. which is in the beta stage
of their call-back service. Packetera advertises its service under the “itokk”
brand name (http://www.itokk.com/).
We
believe that we have the following competitive advantages:
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We
expect to enable other service providers to deliver the same service
over
our platform but with that service provider’s own
branding
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We
will be one of the first companies to focus on the Canadian cellular
market We are currently aware of two competitors on the market. The
first
is Yak.com and they charge over 3.5 cents per minute. We expect to
match
this rate for usage based plans but will also offer flat monthly
plans
($10 for local calling, $15 for national calling and $20 for free
calling
in Canada and USA). The other competitor, Evoiphone charges $10 for
unlimited calling, but limits its service to a few
markets.
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We
will have reduced operational costs since we anticipate that such
costs
can be spread over multiple resellers and other service
providers.
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Our
resellers and service providers will be able to focus on marketing
and
sales, without the need to expend resources on support and operational
issues.
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Government
Regulation
The
telecommunications sector in Canada is regulated by the Canadian
Radio-television and Telecommunications Commission (CRTC). However, we are
not
aware of any ruling, prohibition, or restriction on the use of callback services
in Canada.
Privacy
Regulations
Since
we
will be collecting confidential information about our customers including
personal information (name, address, and telephone numbers), payment information
(credit card, bank details, etc.) and phone calling history, we will be enacting
measures to ensure the privacy of the customer data. Such measures will include
strong encryption of the data and strong access control to the data where only
authorized persons are able to do so. We do not intend to share our customer
data with anyone except if mandated by a government regulation (e.g., Patriot
Act).
As
of
2006, Canadian business and private sector organizations are subject to federal
or provincial privacy protection legislation governing both customer and, with
some exceptions, employee information.
Effective
as of January 1, 2001, the Canadian federal government enacted the Personal
Information Protection and Electronic Documents Act (PIPEDA). PIPEDA applies
to
federally-regulated private sector organizations (i.e., organizations in the
transportation, communications, broadcasting, federal banking and offshore
sectors, as well as in Canada’s three territories), and to other private sector
organizations in provinces that
have
not
enacted “substantially similar” legislation. It applies to personal information
and health information that is collected, used or disclosed in the course of
commercial activity that takes place across the Canadian border, between
provinces, and within a Canadian province that has not enacted “substantially
similar” legislation.
To
date,
Alberta and British Columbia have joined Québec in enacting their own private
sector privacy legislation. Each of the Québec, British
Columbia and Alberta statutes has been recognized as “substantially similar” by
the Canadian federal government.
(http://www.osler.com/resources.aspx?id=8686).
Employees
We
have
no employees other than our sole officer and director, Mazen
Hleiss. As such, Mr. Hleiss has been responsible for all business
planning, and operational duties, and will continue to perform these duties
throughout the early stages of our growth. During this time, Mr. Hleiss will
supervise the development and deployment of our software. However, much of
the
software development will be outsourced to a private contractor. Mazen will
spend a minimum of 20 hours per week on the business of the
Company.
We
anticipate that within the next eleventh months after the development of our
product, we will need to hire a sales and support assistant who will be
responsible for answering customer and reseller inquiries and providing basic
support.
DESCRIPTION
OF
PROPERTY
The
Company’s office is currently located at 999 – 3
rd
Avenue #3800,
Seattle, Washington 98104. Our telephone number is (206) 224-4108. However,
on
December 12, 2007, we signed an agreement with Regus Group, LLC and will
relocate our office to Seaford Fifth Avenue Plaza, 800 5th
Avenue,
Suite
4100, Seattle, WA 98104. We currently pay $190 per month for this space. The
lease agreement is for a twelve month period commencing August 1, 2007, and
is
automatically renewed for successive one year periods, unless terminated by
either party. We anticipate hiring at least one additional employee who will
be
working from his home, but believe that this space will be sufficient until
we
start generating revenues and need to hire additional employees. The December
12, 2007 agreement bears the same terms as our current agreement, however,
the
lease term begins on January 1, 2008. Our telephone number will remain the
same.
MANAGEMENT'S
DISCUSSION AND ANALYSIS
OR
PLAN
OF OPERATION
You
should read the following plan of operation together with our audited financial
statements and related notes appearing elsewhere in this prospectus. This plan
of operation contains forward-looking statements that involve risks,
uncertainties, and assumptions. The actual results may differ materially from
those anticipated in these
forward-looking
statements as a result of certain factors, including, but not limited to, those
presented under "Risk Factors" elsewhere in this prospectus.
History
Utalk
Communications Inc. was incorporated under the laws of the State of Nevada
on
January 30, 2007. We intend to engage in the development and
marketing of call-back services.
We
are a
development stage company. We have not generated any revenue to date
and our operations have been limited to organizational, start-up, and fund
raising activities. We currently have no employees other than our
sole officer, who is also our sole director.
Plan
of Operation
We
have
not generated any revenues since our inception. To date, we have
engaged in the following activities:
Our
sole
officer and director has conducted preliminary market research relating to
call-back services, as well as the software to be used in connection with our
anticipated service. In addition, we have reserved a domain name,
www.utalklive.com, for our Company at a cost of approximately $30 per year.
We
have also acquired web and email hosting (up to 4 emails) for $240 per
year.
During
the next twelve months following the termination of our offering, we intend
to
engage in the following activities:
First
Three
Months
During
the first three months, we plan to:
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Hire
a third-party software contractor to develop our
software;
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Initiate
our software development activities
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Initiate
the development of our corporate and marketing
collateral
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Software
Development:
We plan
to retain the services of a software contractor by the end of the first
month. We will also retain the services of a software specialist with
expertise in Asterisk software and have budgeted $2,500 for this task. Asterisk
software is specialized and our software developer may not have the necessary
skills to work with Asterisk. During the second and third months, we will work
with the software contractor on the development of the software specifications
and on a high level design. We have not yet purchased any software or entered
into any contracts for third-party software development services.
In
addition, we expect that will sign an agreement with a VoIP provider for local
and long distance connectivity.
Marketing
activities:
By the
end of the first month, we plan to hire a graphic and web design contractor.
We
expect that the contractor will finish developing our corporate collateral
as
well as a professionally looking web site. During month 3, we will also proceed
with the printing of business cards, letterheads and envelopes.
Miscellaneous
activities:
During the first month of operation, we will also purchase one phone and one
fax
line at a cost $60 per month.
Fourth
through Sixth
Months
During
the fourth through the sixth months, we expect to focus on the development
of
our product. This includes the set-up of the development environment, design
of
the main database and the customization of the call-back software.
Seventh
through Ninth
Months
During
the seventh through ninth months, we expect to achieve the
following:
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Complete
the development of the software
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·
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Complete
the formulation of a marketing and sales
strategy
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·
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Complete
the development of our marketing
collateral
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Purchase
and configuration of computer servers to deploy our call-back
services
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Initiate
sales activities
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We
expect
that our contractor will finish the modification and testing of our product
by
the end of the eighth month if we raise the minimum amount of
funding.
However,
if we raise the average amount of funding or greater, we will direct our
software developer to modify the software to allow payment by entering credit
card information by telephone. This will take an additional two months and
will
continue into the fourth quarter.
In
the
ninth month, we will start limited advertising using Google Adwords. The
advertising will target resellers and service providers.
Tenth
through Twelfth
Month
During
the tenth through twelfth months, we expect to achieve the
following:
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Launch
our advertising campaign to attract
resellers
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Launch
our service in Canada
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Make
our service available to resellers
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·
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If
we have enough funding, continue the development of our
product
|
If
only
the minimum amount is raised, we do not expect to be able to develop additional
features to the product. We intend to retain the software contractor on a
maintenance contract at a rate of approximately $400 per month.
We
will
be advertising with Google’s Adwords targeting both resellers and end users.
Google advertising will funnel potential end users and resellers to our web
site. The users will have the option to subscribe to our service packages and
pre-pay for service using Paypal. Interested resellers will be able to fill-out
and submit information and contact request form. We will then contact the
interested reseller and evaluate their suitability to resell our product. If
we
raise the maximum level of funding, we intend to allocate more money on
advertising with Google.
In
the
eleventh and twelfth months, we anticipate needing to hire one sale and support
assistant that will be responsible for answering customers and reseller queries
and provide basic support. We plan to hire this person in a developing country
to keep cost down. We have budgeted $1,400 per month for the sales
assistant.
Going
Concern
Consideration
Our
independent auditors included an explanatory paragraph in their report on the
accompanying financial statements regarding concerns about our ability to
continue as a going concern. Our financial statements contain additional note
disclosures describing the circumstances that lead to this disclosure by our
independent auditors. Our financial statements do not include any adjustments
related to the recoverability or classification of asset-carrying amounts or
the
amounts and classifications of liabilities that may result should the Company
be
unable to continue as a going concern.
Liquidity
and Capital
Resources
We
believe that if we are able to raise even the minimum amount of this offering,
$43,790, we will have sufficient proceeds for the next 12 months to proceed
with
developing our call-back service. However, should we need additional funds,
we
would attempt to raise these funds through additional private placements or
by
borrowing money. We do not have any arrangements with potential investors or
lenders to provide such funds and there is no assurance that such additional
financing will be available when required in order to proceed with the business
plan or that our ability to respond to competition or changes in the market
place or to exploit opportunities will not be limited by lack of available
capital financing. If we are unsuccessful in securing the additional capital
needed to continue operations within the time required, we may not be in a
position to continue operations.
We
can
offer no assurance that we will raise any funds in this offering. As disclosed
above, we have no revenues and, as such, if we do not raise at least the minimum
amount from our offering we will not have sufficient funds to develop our
business. If we are unable to raise funds, we may attempt to sell the Company
or
file for bankruptcy. We do not have any current intentions, negotiations or
arrangements to merge or sell the Company.
We
are
not aware of any material trend, event or capital commitment, which would
potentially adversely affect liquidity. In the event such a trend develops,
we
believe that
we
will
have sufficient funds available to satisfy working capital needs through lines
of credit and the funds expected from equity sales.
Recently
issued accounting
pronouncements
In
September 2006, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value
Measurements.” This statement defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles, and expands
disclosure about fair value measurements. This statement applies under other
accounting pronouncements that require or permit fair value measurement, the
FASB having previously concluded in those accounting pronouncements that fair
value is the relevant measurement attribute. This statement does not require
any
new fair value measurements. However, for some entities, the application of
the
statement will change current practice. This statement is effective for
financial statements issued for fiscal years beginning after November 15, 2007,
and interim periods within those fiscal years. The management of the Company
does not believe that this new pronouncement will have a material impact on
its
financial statements.
In
September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined
Benefit Pension and Other Postretirement Plans - an amendment of FASB Statements
No. 87, 88, 106 and 132(R).” This statement improves financial reporting by
requiring an employer to recognize the overfunded or underfunded status of
a
defined benefit postretirement plan (other than a multi-employer plan) as an
asset or liability in its statement of financial position and to recognize
changes in that funded status in the year in which the changes occur through
comprehensive income of a business entity or changes in unrestricted net assets
for a not-for-profit organization. This statement also improves financial
reporting by requiring an employer to measure the funded status of a plan as
of
the date of its year-end statement of financial position, with limited
exceptions. The management of the Company does not believe that this new
pronouncement will have a material impact on its financial
statements.
In
February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities - Including An Amendment of FASB
Statement No. 115," which permits entities to measure many financial instruments
and certain other items at fair value that are not currently required to be
measured at fair value. An entity would report unrealized gains and losses
on
items for which the fair value option has been elected in earnings at each
subsequent reporting date. The objective is to improve financial reporting
by
providing entities with the opportunity to mitigate volatility in reported
earnings caused by measuring related assets and liabilities differently without
having to apply complex hedge accounting provisions. The decision about whether
to elect the fair value option is applied instrument by instrument, with a
few
exceptions; the decision is irrevocable; and it is applied only to entire
instruments and not to portions of instruments. SFAS No. 159 requires
disclosures that facilitate comparisons (a) between entities that choose
different measurement attributes for similar assets and liabilities and (b)
between assets and liabilities in the financial statements of an entity that
selects
different
measurement attributes for similar assets and liabilities. SFAS No. 159 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007. Early adoption is permitted as of the beginning of a fiscal
year provided the entity also elects to apply the provisions of SFAS No. 157.
Upon implementation, an entity shall report the effect of the first
re-measurement to fair value as a cumulative-effect adjustment to the opening
balance of retained earnings. Since the provisions of SFAS No. 159 are applied
prospectively, any potential impact will depend on the instruments selected
for
fair value measurement at the time of implementation. The management of the
Company does not believe that this new pronouncement will have a material impact
on its financial statements.
Off-Balance
Sheet
Arrangements
We
have
no off-balance sheet arrangements.
LEGAL
PROCEEDINGS
There
are
no pending legal proceedings to which the Company is a party or in which any
director, officer or affiliate of the Company, any owner of record or
beneficially of more than 5% of any class of voting securities of the Company,
or security holder is a party adverse to the Company or has a material interest
adverse to the Company. The Company’s property is not the subject of
any pending legal proceedings.
DIRECTORS,
EXECUTIVE OFFICERS,
PROMOTERS AND CONTROL PERSONS
Directors
and Executive
Officers
Each
director of the Company serves for a term of one year or until the successor
is
elected at the Company's annual shareholders' meeting and is qualified, subject
to removal by the Company's shareholders. Each officer serves, at the
pleasure of the board of directors, for a term of one year and until the
successor is elected at the annual meeting of the board of directors and is
qualified.
Set
forth
below is the name, age and present principal occupations or employment, and
material occupations, positions, offices or employments for the past five years
of our sole director and executive officer.
|
Name
and Business Address
|
|
Age
|
|
Position
|
|
|
|
|
|
|
|
Mazen
Hleiss
c/o
Utalk Communications Inc.
999
– 3
rd
Avenue
#3800, Seattle, Washington 98104
|
|
35
|
|
President,
Treasurer, Secretary and Director
|
Mr.
Mazen
Hleiss has been our sole officer and director since our inception. Since
November 1996, Mr. Hleiss has been the general manager and 50% owner of SCIS
(Servicing & Consulting for Information Systems), based in Lebanon. Mr.
Hleiss received his degree in Electrical and Electronic Engineering (Computer
specialization) from Lebanese University in 1993. Since 1994, he has been
a
member of the Engineering Order in Lebanon.
Mr.
Hleiss is not a director in any other reporting companies. He has not
been affiliated with any company that has filed for bankruptcy within the last
five years. The Company is not aware of any proceedings to which Mr.
Hleiss, or any associate of Mr. Hleiss, is a party adverse to the Company or
any
of the Company’s subsidiaries or has a material interest adverse to it or any of
its subsidiaries.
Auditors;
Code of Ethics; Financial
Expert
Malone
& Bailey, PC., an independent registered public accounting firm, is our
auditor.
We
do not
currently have a Code of Ethics applicable to our principal executive, financial
and accounting officers. The Board of Directors has not established an audit
committee and does not have an audit committee financial expert. The
Board is of the opinion that an audit committee is not necessary since the
Company has only one director, and such director has been performing the
functions of an audit committee.
Potential
Conflicts of
Interest
Since
we
do not have an audit or compensation committee comprised of independent
directors, the functions that would have been performed by such committees
are
performed by our sole director, who is also our sole officer. Thus,
there is a potential conflict of interest in that our sole director and officer
has the authority to determine issues concerning management compensation and
audit issues that may affect management decisions. We are not aware
of any other conflicts of interest with our sole director and
officer.
Involvement
in Certain Legal
Proceedings
There
are
no legal proceedings that have occurred within the past five years concerning
our directors, or control persons which involved a criminal conviction, a
criminal proceeding, an administrative or civil proceeding limiting one's
participation in the securities or banking industries, or a finding of
securities or commodities law violations.
EXECUTIVE
COMPENSATION
Summary
Compensation
Since
our
incorporation on January 30, 2007, we have not paid any compensation to our
sole
officer and director, Mr. Hleiss, in consideration for his services rendered
to
our
Company
in his capacity as Principal Executive and Financial Officer. We have no
employment agreements with Mr. Hleiss. We have no pension, health,
annuity, bonus, insurance, stock options, profit sharing or similar benefit
plans.
Since
our
incorporation on January 30, 2007, no stock options or stock appreciation rights
were granted to Mr. Hleiss. We have no equity incentive
plans.
Outstanding
Equity
Awards
Since
our
incorporation on January 30, 2007, our sole director and officer has not held
any unexercised options, stock that had not vested, or equity incentive plan
awards.
Compensation
of
Directors
Since
our
incorporation on January 30, 2007, no compensation has been paid to our director
in consideration for services rendered in his capacity as director. Our Board
of
Directors may in the future determine to pay directors’ fees and reimburse
directors for expenses related to their activities.
Employment
Contracts
There
are
no employment agreements between the Company and our sole officer and
director.
SECURITY
OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND
MANAGEMENT
The
following table lists, as of December 12, 2007, the number of shares of common
stock of our Company that are beneficially owned by (i) each person or entity
known to our Company to be the beneficial owner of more than 5% of the
outstanding common stock; (ii) each officer and director of our Company; and
(iii) all officers and directors as a group. Information relating to beneficial
ownership of common stock by our principal shareholders and management is based
upon information furnished by each person using “beneficial ownership” concepts
under the rules of the Securities and Exchange Commission. Under these rules,
a
person is deemed to be a beneficial owner of a security if that person has
or
shares voting power, which includes the power to vote or direct the voting
of
the security, or investment power, which includes the power to vote or direct
the voting of the security. The person is also deemed to be a beneficial owner
of any security of which that person has a right to acquire beneficial ownership
within 60 days. Under the Securities and Exchange Commission rules, more than
one person may be deemed to be a beneficial owner of the same securities, and
a
person may be deemed to be a beneficial owner of securities as to which he
or
she may not have any pecuniary beneficial interest. Except as noted below,
each
person has sole voting and investment power.
The
percentages below are calculated based on 4,000,000 shares of our common stock
issued and outstanding as of December 12, 2007. We do not have any outstanding
options, warrants or other securities exercisable for or convertible into shares
of our common stock. The address of the person listed below is c/o
Utalk Communications Inc., 999 – 3
rd
Avenue #3800,
Seattle, Washington 98104.
|
Name
of Beneficial Owner
|
Title
Of Class
|
Amount
and Nature of Beneficial Ownership
|
Percent
of Class
|
|
|
|
|
|
|
Mazen
Hleiss
(1)
|
Common
Stock
|
4,000,000
|
100%
|
|
|
|
|
|
|
Directors
and Officers as a Group (1 person)
|
Common
Stock
|
4,000,000
|
100%
|
(1)
Mr.
Hleiss is our President, Treasurer, Secretary, and sole Director.
DIRECTOR
INDEPENDENCE
We
are
not subject to listing requirements of any national securities exchange or
national securities association and, as a result, we are not at this time
required to have our board comprised of a majority of “independent directors.”
We do not believe that Mazen Hleiss, our sole director currently meets the
definition of “independent” as promulgated by the rules and regulations of the
American Stock Exchange.
CERTAIN
RELATIONSHIPS AND RELATED
TRANSACTIONS
On
March
22, 2007, we issued 4,000,000 shares of common stock to Mazen Hleiss, our
President, Treasurer, Secretary and Director. The shares were issued in
consideration for the payment of a purchase price of $0.005 per share, which
amounted in the aggregate to $20,000. This transaction was conducted
in reliance upon an exemption from registration provided under Section 4(2)
of
the Securities Act of 1933, as amended.
PLAN
OF
DISTRIBUTION
There
has
been no market for our securities. Our common stock is not traded on
any exchange or on the over-the-counter market. After the effective date of
the
registration statement relating to this prospectus, we hope to have a market
maker file an application with the National Association of Securities Dealers,
Inc. for our common stock to eligible for trading on the OTCBB. We do not yet
have a market maker who has agreed to file such application.
We
are
offering a minimum of 437,900 and up to a maximum of 595,800 shares of our
common stock by direct public offering on a "best efforts all or none basis"
as
to the first 437,900 shares and on a "best efforts basis" as to the remaining
157,900 shares. The
offering
price is $0.10 per share. The shares will be sold on our behalf by
our sole officer and director. Our sole officer and director will not
receive any commissions or proceeds from the offering for selling shares on
our
behalf. No brokers, dealers or finders or agent for commission is involved
in
this offering. We will pay all expenses incurred in this offering.
The
offering will commence as soon as practicable after the effective date of the
registration statement relating to this prospectus. It will terminate
180 calendar days after such effective date, but such termination date may
be
extended for up to an additional 90 calendar days in our
discretion. We reserve the right to terminate the offering at an
earlier date, in our sole discretion, even if no shares are sold.
In
the
event that 437,900 shares are not sold within 180 calendar days after the
effective date, all money received by us will be promptly returned to you
without interest or deduction of any kind. The offering may be discontinued
or
declared to be completed at any time by us. In the event that an action by
a
creditor were taken against us, even though we had not reached the minimum
sales
level of 437,900 shares, such action could delay or even preclude us from
refunding your money. If at least 437,900 shares are sold within 180 days,
all
money received by us will be retained by us and there will be no refund. In
the
event that less than 437,900 shares were to be sold within 180 days but our
Board of Directors were to feel that it were more likely than not that an
extension of time would result in achieving the minimum subscription threshold
then by majority vote they may extend the offering for 90 calendar days, one
time only. Sold securities are deemed securities which have been paid
for with collected funds prior to expiration of 180 calendar days (or 270
calendar days if the offering is extended.) Collected funds are deemed to be
funds that have been paid through the drawee bank.
There
are
no other minimum purchase requirements, and there are no arrangements to place
the funds in an escrow, trust, or similar account. Funds received by
us for the payment of shares subscribed for in the offering will be deposited
into a bank account maintained by us and under our control and be immediately
available for our use as soon as 437,900 shares are sold. Such funds
will not be placed into escrow, trust or any other similar
arrangement.
Because
the foregoing account is not an escrow, trust or similar account, and is an
account under our control where we have placed your funds, such funds may be
attached by our creditors, should we be sued for any reason. As a
result, if we are sued for any reason and a judgment is rendered against us,
your subscription could be seized in a garnishment proceeding and you could
lose
your investment, even if we fail to raise the minimum amount in this offering.
As a result, there is no assurance that your funds will be returned to you
if
the minimum offering is not reached.
If
we do
not receive the minimum amount of $43,790 within 180 calendar days (or 270
calendar days if the offering is extended) of the effective date of our
registration statement, all funds will be promptly returned to you without
a
deduction of any kind. During the 180 day period (or 270 day period, if the
offering is extended) no funds will
be
returned to you. You will only receive a refund of your subscription if we
do
not raise a minimum of $43,790 within the 180 day period (or 270 day period,
if
the offering is extended) referred to above. You will not have the right to
withdraw your funds during the offering. You will only have the right to have
your funds returned if we do not raise the minimum amount of the offering,
or if
there is a change in any significant material terms of the offering or the
disclosures therein; such disclosures would be contained in a post-effective
amendment to this offering and filing, and you would be contacted and offered
the opportunity to receive a refund of funds and cancellation of the share
subscription.
As
noted
above, we will sell the shares in this offering through our sole officer and
director. Our sole officer and director will not receive any
commission from the sale of any shares. Our officer and director will not
register as a broker-dealer under section 15 of the Securities Exchange Act
of
1934, in reliance upon Rule 3a4-1. Rule 3a4-1 sets forth those conditions under
which a person associated with an issuer may participate in the offering of
the
issuer's securities and not be deemed to be a broker/dealer. The conditions
are
namely: (1) The person is not statutorily disqualified, as that term
is defined in Section 3(a)(39) of the Act, at the time of his participation;
(2)
The person is not compensated in connection with his participation by the
payment of commissions or other remuneration based either directly or indirectly
on transactions in securities; (3) The person is not at the time of their
participation, an associated person of a broker/dealer; and (4) The person
meets
the conditions of Paragraph (a)(4)(ii) of Rule 3a4-1 of the Exchange Act, in
that he (A) primarily performs, or is intended primarily to perform at the
end
of the offering, substantial duties for or on behalf of the issuer otherwise
than in connection with transactions in securities; and (B) is not a broker
or
dealer, or an associated person of a broker or dealer, within the preceding
twelve (12) months; and (C) does not participate in selling and offering of
securities for any issuer more than once every twelve (12) months other than
in
reliance on Paragraphs (a)(4)(i) or (a)(4)(iii).
Procedures
for
Subscribing
We
will
not accept any money until this registration statement is declared effective
by
the SEC. Once the registration statement is declared effective by the SEC,
if
you decide to subscribe for any shares in this offering, you must:
1.
execute and deliver a subscription agreement, a copy of which is included with
the prospectus.
2.
deliver a check, money order or certified funds to us for acceptance or
rejection.
All
checks for subscriptions must be made payable to "Utalk Communications
Inc."
Right
to Reject
Subscriptions
We
have
the right to accept or reject subscriptions in whole or in part, for any reason
or for no reason. All monies from rejected subscriptions will be returned
immediately by us
to
the
subscriber, without interest or deductions. Subscriptions for securities will
be
accepted or rejected within 48 hours after we receive them. We will also reject
subscription if the minimum is not met.
Underwriters
We
have
no underwriter and do not intend to have one. In the event that we sell or
intend to sell by means of any arrangement with an underwriter, then we will
file a post-effective amendment to this registration statement to accurately
reflect the changes to us and our financial affairs and any new risk factors,
and in particular to disclose such material relevant to this Plan of
Distribution.
Regulation
M
We
are
subject to Regulation M of the Securities Exchange Act of 1934. Regulation
M
governs activities of underwriters, issuers, selling security holders, and
others in connection with offerings of securities. Regulation M prohibits
distribution participants and their affiliated purchasers from bidding for
purchasing or attempting to induce any person to bid for or purchase the
securities being distribute.
Penny
Stock
Regulations
You
should note that our stock is a penny stock. The Securities and Exchange
Commission has adopted Rule 15g-9 which generally defines "penny stock" to
be
any equity security that has a market price (as defined) less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and "accredited investors". The term
"accredited investor" refers generally to institutions with assets in excess
of
$5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. The penny
stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form prepared by the SEC which provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customer's account. The bid and offer
quotations, and the broker-dealer and salesperson compensation information,
must
be given to the customer orally or in writing prior to effecting the transaction
and must be given to the customer in writing before or with the customer's
confirmation. In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from these rules, the
broker-dealer must make a special written determination that the penny stock
is
a suitable investment for the purchaser and receive the purchaser's written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the level of trading activity in the secondary market for
the
stock
that is subject to these penny stock rules. Consequently, these penny stock
rules may affect the ability of broker-dealers to trade our securities. We
believe that the penny stock rules discourage investor interest in and limit
the
marketability of our common stock.
MARKET
FOR COMMON
EQUITY
AND
RELATED STOCKHOLDER
MATTERS
Market
Information
There
has
been no market for our securities. Our common stock is not traded on any
exchange or on the over-the-counter market. Consequently, a purchaser of our
common stock may find it difficult to resell the securities offered herein
should the purchaser desire to do so when eligible for public
resale.
Security
Holders
As
of
December 12, 2007, there were 4,000,000 common shares issued and outstanding,
which were held by 1 stockholder of record.
Dividend
Policy
We
have
not declared or paid dividends on our common stock since our formation, and
we
do not anticipate paying dividends in the foreseeable future. Declaration or
payment of dividends, if any, in the future, will be at the discretion of our
Board of Directors and will depend on our then current financial
condition, results of operations, capital requirements and other
factors deemed relevant by the Board of Directors. There are no
contractual restrictions on our ability to declare or pay
dividends.
Securities
Authorized Under Equity
Compensation Plans
We
have
no equity compensation plans.
Transfer
Agent
We
have
not retained a transfer agent to serve as transfer agent for shares of our
common stock. Until we engage such a transfer agent, we will be
responsible for all record-keeping and administrative functions in connection
with the shares of our common stock.
Admission
to Quotation on the OTC
Bulletin Board
After
the
effective date of the registration statement relating to this prospectus, we
intend to have a market maker file an application with the National Association
of Securities Dealers, Inc. for our common stock to be quoted on the OTC
Bulletin Board. However, we do not have a market maker that has agreed to file
such application. If our securities are not quoted on the OTC
Bulletin Board, a security holder may find it more difficult to
dispose
of, or to obtain accurate quotations as to the market value of our securities.
The OTC Bulletin Board differs from national and regional stock exchanges in
that it
(1)
is
not situated in a single location but operates through communication of bids,
offers and confirmations between broker-dealers, and
(2)
securities admitted to quotation are offered by one or more Broker-dealers
rather than the "specialist" common to stock exchanges.
To
qualify for quotation on the OTC Bulletin Board, an equity security must have
one registered broker-dealer, known as the market maker, willing to list bid
or
sale quotations and to sponsor the company listing. If it meets the
qualifications for trading securities on the OTC Bulletin Board our securities
will trade on the OTC Bulletin Board. We may not now or ever qualify for
quotation on the OTC Bulletin Board. We currently have no market maker who
is
willing to list quotations for our securities.
DESCRIPTION
OF
SECURITIES
The
following description of our capital stock is a summary and is qualified in
its
entirety by the provisions of our Articles of Incorporation which has been
filed
as an exhibit to our registration statement of which this prospectus is a
part.
Common
Stock
We
are
authorized to issue 50,000,000 shares of common stock, par value $0.001, of
which 4,000,000 shares are issued and outstanding as of December 12,
2007. Each holder of shares of our common stock is entitled to one
vote for each share held of record on all matters submitted to the vote of
stockholders, including the election of directors. The holders of
shares of common stock have no preemptive, conversion, subscription or
cumulative voting rights.
There
is no provision in our Articles of Incorporation or Bylaws that would delay,
defer or prevent a change in control of our Company.
Preferred
Stock
We
are
not authorized to issue shares of preferred stock.
Warrants
and
Options
Currently,
there are no warrants, options or other convertible securities
outstanding.
LEGAL
MATTERS
David
Lubin & Associates, PLLC has opined on the validity of the shares of common
stock being offered hereby.
EXPERTS
The
financial statements included in this prospectus and in the registration
statement have been audited by Malone & Bailey, PC an independent registered
public accounting firm, to the extent and for the period set forth in their
report appearing elsewhere herein and in the registration statement, and are
included in reliance upon such report given upon the authority of said firm
as
experts in auditing and accounting.
INTEREST
OF NAMED EXPERTS AND
COUNSEL
No
expert
or counsel named in this prospectus as having prepared or certified any part
of
this prospectus or having given an opinion upon the validity of the securities
being registered or upon other legal matters in connection with the registration
or offering of the common stock was employed on a contingency basis or had,
or
is to receive, in connection with the offering, a substantial interest, directly
or indirectly, in the registrant or any of its parents or subsidiaries. Nor
was
any such person connected with the registrant or any of its parents,
subsidiaries as a promoter, managing or principal underwriter, voting trustee,
director, officer or employee.
INDEMNIFICATION
FOR SECURITIES ACT
LIABILITIES
Our
bylaws provide to the fullest extent permitted by law, our directors or
officers, former directors and officers, and persons who act at our request
as a
director or officer of a body corporate of which we are a shareholder or
creditor shall be indemnified by us. We believe that the indemnification
provisions in our bylaws are necessary to attract and retain qualified persons
as directors and officers.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933
(the
"Act" or "Securities Act") may be permitted to directors, officers or persons
controlling us pursuant to the foregoing provisions, or otherwise, we have
been
advised that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
WHERE
YOU CAN FIND MORE
INFORMATION
We
have
filed a registration statement on Form SB-2 under the Securities Act with the
SEC for the securities offered hereby. This prospectus, which constitutes a
part
of the registration statement, does not contain all of the information set
forth
in the registration statement or the exhibits and schedules which are part
of
the registration statement. For additional information about us and our
securities, we refer you to the registration statement and the accompanying
exhibits and schedules. Statements contained in this prospectus regarding the
contents of any contract or any other documents to which we refer are not
necessarily complete. In each instance, reference is made to the copy of the
contract or document filed as an exhibit to the registration statement, and
each
statement is qualified in all respects by that reference. Copies of the
registration statement and the accompanying exhibits and schedules may be
inspected without charge (and copies may
be
obtained at prescribed rates) at the public reference facility of the SEC at
Room 1024, 100 F Street, N.E. Washington, D.C. 20549.
You
can
request copies of these documents upon payment of a duplicating fee by writing
to the SEC. You may call the SEC at 1-800-SEC-0330 for further information
on
the operation of its public reference rooms. Our filings, including the
registration statement, will also be available to you on the Internet web site
maintained by the SEC at http://www.sec.gov.
CHANGES
IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Malone
& Bailey, PC is our registered independent auditor. There have not been any
changes in or disagreements with accountants on accounting and financial
disclosure or any other matter.
FINANCIAL
STATEMENTS
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the
Board of Directors
Utalk
Communications Inc.
(A
Development Stage Company)
Vancouver BC Canada
We
have
audited the accompanying balance sheet of Utalk Communications Inc. (a
development stage company) as of September 30,2007, and the related statements
of expenses, changes in stockholders’ equity and cash flows for the period
from January 30, 2007 (Inception) through September 30, 2007. These financial
statements are the responsibility of Utalk’s management. Our responsibility is
to express an opinion on these financial statements based on our
audit.
We
conducted our audit in accordance with 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. An audit 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 Utalk for the period
described in conformity with accounting principles generally accepted
in the United States of America.
The
accompanying financial statements have been prepared assuming that Utalk
Communications Inc. will continue as a going concern. As discussed in Note
2 to
the financial statements, Utalk has no operations, which raises substantial
doubt about its ability to continue as a going concern. Management’s plans
regarding those matters are also described in Note 2. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
Malone
& Bailey, PC
www.malone-bailey.com
Houston,
Texas
October
30, 2007
|
Utalk
Communications Inc.
|
|
(A
Development Stage Company)
|
|
Balance
Sheet
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
|
|
|
2007
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
Cash
|
|
$
|
8,159
|
|
|
Prepaid
Expenses
|
|
|
869
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
9,028
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
Accounts
Payable
|
|
|
16
|
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
Equity
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock, 50,000,000 shares authorized, $0.001 par
value
|
|
|
|
|
|
4,000,000
shares issued and outstanding
|
|
|
4,000
|
|
|
|
|
|
|
|
|
Additional
paid in capital
|
|
|
16,000
|
|
|
|
|
|
|
|
|
Deficit
accumulated during the development stage
|
|
|
(10,988
|
)
|
|
|
|
|
|
|
|
Total
Stockholders’ Deficit
|
|
|
9,012
|
|
|
|
|
|
|
|
|
Total
Liabilities and Stockholders’ Deficit
|
|
$
|
9,028
|
|
See
summary of accounting policies and notes to financial statements.
|
Utalk
Communications Inc.
|
|
(A
Development Stage Company)
|
|
Statement
of Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January
30, 2007(Inception)
|
|
|
|
|
Through
|
|
|
|
|
September
30, 2007
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
Legal and accounting
|
|
$
|
10,061
|
|
|
General and
administrative
|
|
|
927
|
|
|
|
|
Net
Loss
|
|
$
|
(10,988
|
)
|
|
|
|
Net
Loss Per Common Share – Basic and Diluted
|
|
$
|
(0.00
|
)
|
|
|
|
Weighted
Average Number of Common Shares Outstanding - Basic and
Diluted
|
|
|
2,649,007
|
|
See
summary of accounting policies and notes to financial statements
|
Utalk
Communications Inc.
|
|
(A
Development Stage Company)
|
|
Statement
of Changes in Stockholders’ Equity
|
|
From
January 30, 2007 (Inception) through September 30, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
During
|
|
|
|
|
|
|
|
Common
Stock
|
|
|
Paid
In
|
|
|
Exploration
|
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Stage
|
|
|
Total
|
|
|
|
|
Common
shares issued for cash on March 22, 2007 @ $0.005 per
share
|
|
|
4,000,000
|
|
|
$
|
4,000
|
|
|
$
|
16,000
|
|
|
$
|
–
|
|
|
$
|
20,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
(10,988
|
)
|
|
|
(10,988
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at September 30, 2007
|
|
|
4,000,000
|
|
|
$
|
4,000
|
|
|
$
|
16,000
|
|
|
$
|
(10,988
|
)
|
|
$
|
(9,012
|
)
|
See
summary of accounting policies and notes to financial statements
|
Utalk
Communications Inc.
|
|
|
(A
Development Stage Company)
|
|
|
Statement
of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January
30, 2007 (Inception)
|
|
|
|
|
|
Through
|
|
|
|
|
|
September
30,
|
|
|
|
|
|
2007
|
|
|
|
|
|
|
|
|
Cash
Flows From Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(10,988
|
)
|
|
|
|
|
|
|
|
|
Change in:
|
|
|
|
|
|
|
Increase in
accounts payable
|
|
|
|
16
|
|
|
Increase
in prepaid expenses
|
|
|
|
(869
|
)
|
|
Net
Cash Used in Operating Activities
|
|
|
|
(11,841
|
)
|
|
|
|
|
|
|
|
|
Net
Cash Provided by Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from the sale of common
shares
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Increase in Cash
|
|
|
|
8,159
|
|
|
|
|
|
|
|
|
|
Cash
- Beginning of Period
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
Cash
- End of Period
|
|
|
$
|
8,159
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Disclosure of Cash Flow Information
|
|
|
|
|
|
|
Cash paid for:
|
|
|
|
|
|
|
Interest
|
|
|
$
|
-
|
|
|
Income taxes
|
|
|
$
|
-
|
|
See
summary of accounting policies and notes to financial statements
Utalk
Communications Inc.
(A
Development Stage Company)
Notes
to the Financial Statements
NOTE
1 - Summary of Significant Accounting Policies
Organization
and Business Operation
Utalk
Communications Inc. was organized on January 30, 2007 as a Nevada
corporation. Utalk is a development stage company whose purpose is to
engage in the development and marketing of telephone services using a call-back
platform. Utalk has elected December 31as its Fiscal Year
End.
Basis
of
Presentation
The
accompanying audited financial statements of Utalk have been prepared in
accordance with accounting principles generally accepted in the United States
of
America and the rules of the Securities and Exchange Commission.
Cash
and
Cash Equivalents
Utalk
considers deposits that can be redeemed on demand and investments that have
original maturities of less than three months, when purchased, to be cash
equivalents.
Income
Taxes
Utalk
recognizes deferred tax assets and liabilities based on differences between
the
financial reporting and tax bases of assets and liabilities using the enacted
tax rates and laws that are expected to be in effect when the differences
are
expected to be recovered. Utalk provides a valuation allowance for
deferred tax assets for which it does not consider realization of such assets
to
be more likely than not.
Basic
and
Diluted Net Loss per Share
Basic
and
diluted net loss per share calculations are presented in accordance with
Financial Accounting Standards Statement 128, and are calculated on the basis
of
the weighted average number of common shares outstanding during the year.
They
include the dilutive effect of common stock equivalents in years with net
income. Basic and diluted loss per share are the same due to the absence
of
common stock equivalents and Utalk’s net loss incurred for the period
presented.
Use
of
Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to
make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Recently
Issued Accounting Pronouncements
Utalk
does not expect the adoption of any recently issued accounting pronouncements
to
have a significant impact on their financial position, results of operations
or
cash flows.
NOTE
2 - Going Concern
These
financial statements have been prepared on a going concern basis.. As at
September 30, 2007, Utalk has net working capital of $9,012, has not generated
any revenue since inception and has accumulated losses of
$10,988. The continuation of Utalk as a going concern is dependent
upon the continued financial support from its shareholders, the ability of
Utalk
to obtain necessary equity financing to continue operations, and the attainment
of profitable operations. These factors raise substantial doubt regarding
Utalk
Communications Inc’s ability to continue as a going concern.
NOTE
3
- Income Taxes
Utalk
uses the liability method
,
where deferred tax assets and liabilities are determined based on
the
expected future tax consequences of temporary differences between the carrying
amounts of assets and liabilities for financial and income tax reporting
purposes. During fiscal 2007, Utalk incurred net
losses and, therefore, has no tax liability. The net deferred tax
asset generated by the loss carry-forward has been fully
reserved. The cumulative net operating loss carry-forward is $10,988
at September 30, 2007, and will expire in the year 2027.
At
September 30, 2007, deferred tax assets consisted of the following:
|
Deferred
tax assets
|
|
$
|
1,648
|
|
|
Net
Operating Loss
|
|
$
|
(1,648
|
)
|
|
Less:
Valuation Allowance
|
|
|
0
|
|
|
|
|
|
|
|
|
Net
deferred tax asset
|
|
$
|
0
|
|
PART
II - INFORMATION NOT REQUIRED IN
PROSPECTUS
INDEMNIFICATION
OF DIRECTORS,
OFFICERS, EMPLOYEES AND AGENTS
Our
officers and directors are indemnified as provided by the Nevada Revised
Statutes and our bylaws.
Under
the
Nevada Revised Statutes, director immunity from liability to a company or its
shareholders for monetary liabilities applies automatically unless it is
specifically limited by a company's Articles of Incorporation. Our Articles
of
Incorporation do not specifically limit our directors' immunity. Excepted from
that immunity are: (a) a willful failure to deal fairly with the company or
its
stockholders in connection with a matter in which the director has a material
conflict of interest; (b) a violation of criminal law, unless the director
had
reasonable cause to believe that his or her conduct was lawful or no reasonable
cause to believe that his or her conduct was unlawful; (c) a transaction from
which the director derived an improper personal profit; and (d) willful
misconduct.
Our
bylaws provide that we will indemnify our directors and officers to the fullest
extent not prohibited by Nevada law; provided, however, that we may modify
the
extent of such indemnification by individual contracts with our directors and
officers; and, provided, further, that we shall not be required to indemnify
any
director or officer in connection with any proceeding, or part thereof,
initiated by such person unless such indemnification: (a) is expressly required
to be made by law, (b) the proceeding was authorized by our board of directors,
(c) is provided by us, in our sole discretion, pursuant to the powers vested
in
us under Nevada law or (d) is required to be made pursuant to
the
bylaws.
Our
bylaws also provide that we may indemnify a director or former director of
a
subsidiary corporation and we may indemnify our officers, employees or agents,
or the officers, employees or agents of a subsidiary corporation and the heirs
and personal representatives of any such person, against all expenses incurred
by the person relating to a judgment, criminal charge, administrative action
or
other proceeding to which he or she is a party by reason of being or having
been
one of our directors, officers or employees.
Our
directors may cause us to purchase and maintain insurance for the benefit
of a person who is or was serving as our director, officer, employee or agent,
or as a director, officer, employee or agent or our subsidiaries, and his or
her
heirs or personal representatives against a liability incurred by him as a
director, officer, employee or agent.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to our directors, officers and control persons pursuant to the
foregoing provisions or otherwise, we have been advised that, in the opinion
of
the Securities and Exchange Commission, such indemnification is against public
policy, and is, therefore, unenforceable.
OTHER
EXPENSES OF ISSUANCE AND
DISTRIBUTION
We
have
agreed to pay all expenses incident to the offering and sale to the public
of
the shares being registered other than any commissions and discounts of
underwriters, dealers or agents and any transfer taxes. The expenses which
we
are paying are set forth in the following table. All of the amounts shown are
estimates except the SEC registration fee.
|
Securities
and Exchange
|
|
|
|
|
Commission
registration fee
|
|
$
|
1.83
|
|
|
Legal
fees and miscellaneous expenses (1)
|
|
$
|
15,000.00
|
|
|
Accounting
fees and expenses (1)
|
|
$
|
2,500.00
|
|
|
Total
(1)
|
|
$
|
17,501.83
|
|
|
(1)
Estimated.
|
|
|
|
|
RECENT
SALES OF UNREGISTERED
SECURITIES
On
March
22, 2007, we issued 4,000,000 shares of common stock to Mazen Hleiss, our and
Director. The shares were issued in consideration for the payment of a purchase
price of $0.005 per share, which amounted in the aggregate to $20,000. This
transaction was conducted in reliance upon an exemption from registration
provided under Section 4(2) of the Securities Act of 1933, as amended. Mr.
Hleiss was our officer and director and had access to all of the information
which would be required to be included in a registration statement, and the
transaction did not involve a public offering.
EXHIBITS
The
following exhibits are filed as part of this registration
statement:
|
Exhibit
|
Description
|
|
3.1
|
Certificate
of Incorporation of Registrant*
|
|
3.2
|
Bylaws
of Registrant*
|
|
4.1
|
Specimen
Common Stock Certificate*
|
|
5.1
|
Opinion
of David Lubin & Associates, PLLC regarding the legality of the
securities being registered*
|
|
10.1
|
HQ
Agreement, dated July 16, 2007, between Utalk Communications, Inc.
and
Regus Management Group, LLC*
|
|
10.2
|
Regus
Agreement, dated December 12, 2007, between Utalk Communications,
Inc. and
Regus Management Group, LLC*
|
|
10.3
|
Form
of Subscription Agreement*
|
|
23.1
|
Consent
of Malone & Bailey, PC*
|
|
23.2
|
Consent
of David Lubin & Associates, PLLC (included in Exhibit
5.1)
|
*
Filed
herewith
UNDERTAKINGS
(A)
The
undersigned Registrant hereby undertakes:
(1) To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to:
(i) Include
any prospectus required by Section 10(a)(3) of the Securities Act of
1933;
(ii)
Reflect in the prospectus any facts or events which, individually or together,
represent a fundamental change in the information set forth in the registration
statement; and
(iii)
Include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement.
(2) That,
for the purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
For
the
purposes of determining liability of the Registrant under the Securities Act
to
any purchaser in the initial distribution of the securities, the undersigned
Registrant undertakes that in a primary offering of securities of the
undersigned Registrant pursuant to this registration statement, regardless
of
the underwriting method used to sell the securities to the purchaser, if the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned Registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such
purchaser:
(1)
Any
preliminary prospectus or prospectus of the undersigned Registrant relating
to
the offering required to be filed pursuant to Rule 424;
(4)
Any
other communication that is an offer in the offering made by the undersigned
Registrant to the purchaser.
(C)
Undertaking Required by Regulation S-B, Item 512(e).
Insofar
as indemnification for liabilities arising under the Securities Act of 1933
may
be permitted to directors, officers or controlling persons pursuant to the
foregoing provisions, or otherwise, the Registrant has been advised that in
the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel that
the
matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act of
1933 and will be governed by the final adjudication of such
issue.
SIGNATURES
In
accordance with the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing this Form SB-2 and has authorized this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Tripoli, North Lebanon, Lebanon, on December 17,
2007.
UTALK
COMMUNICATIONS
INC.
By:
/s/
Mazen
Hleiss
Name:
Mazen Hleiss
Title: President,
Treasurer, andSecretary
(Principal
Executive, Financial,
and
Accounting
Officer)
Pursuant
to the requirements of the Securities Act of 1933, this registration statement
has been signed by the following persons in the capacities and on the dates
indicated.
|
Date:
|
Signature:
|
Name:
|
Title:
|
|
|
|
|
|
|
December
17, 2007
|
/s/
Mazen
Hleiss
|
Mazen
Hleiss
|
President,
Treasurer, Secretary and Director
|
BY-LAWS
OF
UTALK
COMMUNICATIONS INC
(the
“Corporation”)
*
* * * *
* * * * * *
ARTICLE
I
Offices
The
Corporation may have offices at
such other places, both within and without the State of Nevada, as the
Board of Directors may determine and designate from time to time or the business
of the Corporation requires.
ARTICLE
II
Books
The
books and records of the
Corporation may be kept (except as otherwise provided by the laws of the State
of Nevada) outside of the State of Nevada and at such place or places as may
be
designated by the Board of Directors.
ARTICLE
III
Stockholders
Section
1.
Place of Meetings,
etc.
Except as otherwise provided in these Bylaws, all
meetings of the stockholders shall be held at such dates, times and places,
within or without the State of Nevada, as shall be determined by the Board
of
Directors or the President of the Corporation and as shall be stated in the
notice of the meeting or in waivers of notice thereof. If the place
of any meeting is not so fixed, it shall be held at the registered office of
the
Corporation in the State of Nevada.
Section
2.
Annual
Meetings
. The Annual Meeting of stockholders of the
Corporation for the election of Directors and the transaction of such other
business as may properly come before said meeting shall be held at the principal
business office of the Corporation or at such other place or places either
within or without the State of Nevada as may be designated by the Board of
Directors and stated in the notice of the meeting, on a date not later than
120
days following the close of the fiscal year of the Corporation as designated
by
the Board of Directors.
Section
3.
Special
Meetings
. Special meetings of the stockholders of the
Corporation shall be held whenever called in the manner required by the laws
of
the State of Nevada for purposes as to which there are special statutory
provisions, and for other purposes whenever called by resolution of the Board
of
Directors, or by the President, or by the holders of a majority of the
outstanding shares of capital stock of the Corporation the holders of which
are
entitled to vote on matters that are to be voted on at such
meeting. Any such Special Meetings of stockholders may be held at the
principal business office of the Corporation or at such other place or places,
either within or without the State of Nevada, as
may
be
specified in the notice thereof. Business transacted at any Special
Meeting of stockholders of the Corporation shall be limited to the purposes
stated in the notice thereof. The notice shall state the date, time,
place and purpose or purposes of the proposed meeting.
Section
4.
Notice of
Meetings
. Except as otherwise required or permitted by
law, whenever the stockholders of the Corporation are required or permitted
to take any action at a meeting, written notice thereof shall be given, stating
the place, date and time of the meeting and, unless it is the annual meeting,
by
or at whose direction it is being issued. The notice also shall
designate the place where the stockholders’ list is available for
examination, unless the list is kept at the place where the meeting is to be
held. Notice of a Special Meeting also shall state the purpose or
purposes for which the meeting is called. A copy of the notice of any
meeting shall be delivered personally or shall be mailed, not less than ten
(10)
nor more than sixty (60) days before the date of the meeting, to each
stockholder of record entitled to vote at the meeting. If mailed, the
notice shall be given when deposited in the United States mail, postage prepaid
and shall be directed to each stockholder at his or her address as it
appears on the record of stockholders, unless he or she shall have filed with
the Secretary of the Corporation a written request that notices to him or her
be
mailed to some other address, in which case it shall be directed to him or
her
at the other address. Notice of any meeting of stockholders shall not
be required to be given to any stockholder who shall attend the meeting, except
for the express purpose of objecting at the beginning thereof to the
transaction of any business because the meeting is not lawfully called or
convened, or who shall submit, either before or after the meeting, a signed
waiver of notice. Unless the Board of Directors, after the
adjournment of such meeting, shall fix a new record date for an adjourned
meeting or unless the adjournment is for more than thirty (30) days, notice
of
an adjourned meeting need not be given if the place, date and time to which
the
meeting shall be adjourned is announced at the meeting at which the adjournment
is taken.
Section
5.
List of
Stockholders
. The officer of the Corporation who shall have
charge of the stock ledger of the Corporation shall prepare and make, at least
ten (10) days before every meeting of stockholders, a complete list of the
stockholders entitled to vote at said meeting, arranged in alphabetical order
and showing the address and the number of shares registered in the name of
each
stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours for a period of at least ten (10) days prior to the meeting, either at
a
place specified in the notice of the meeting or at the place where the meeting
is to be held. The list shall also be produced and kept at the time
and place of the meeting during the whole time thereof, and may be inspected
by
any stockholder present at the meeting.
Section
6.
Quorum
. Except
as otherwise expressly provided by the laws of the State of Nevada, or by the
Certificate of Incorporation of the Corporation, or by these Bylaws, at any
and
all meetings of the stockholders of the Corporation there must be present,
either in person or by proxy, stockholders owning a majority of the issued
and
outstanding shares of the capital stock of the
Corporation
entitled to vote at said meeting. At any meeting of stockholders at
which a quorum is not present, the holders of, or proxies for, a majority of
the
stock which is represented at such meeting, may adjourn the meeting from time
to
time, without notice other than announcement at the meeting, until a quorum
shall be present or represented. At such adjourned meeting at which a
quorum shall be present or represented any business may be transacted which
might have been transacted at the meeting as originally noticed. If
the adjournment is for more than thirty (30) days, or if after adjournment
a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
meeting.
Section
7.
Organization
. The
President shall call to order meetings of the stockholders and shall act as
Chairman of such meetings. The Board of Directors or the stockholders
may appoint any stockholder or any Director or officer of the Corporation to
act
as Chairman at any meeting in the absence of the President. The
Secretary of the Corporation shall act as secretary of all meetings of the
stockholders, but in the absence of the Secretary, the presiding officer may
appoint any other person to act as secretary of the meeting.
Section
8.
Voting
. Except
as otherwise provided by the Certificate of Incorporation of the Corporation
or
these Bylaws, at any meeting of the stockholders each stockholder of record
of
the Corporation having the right to vote thereat shall be entitled to one (1)
vote for each share of stock outstanding in his or her name on the books of
the
Corporation as of the record date and entitling him or her to so
vote. A stockholder may vote in person or by proxy. Except
as otherwise provided by the law of the State of Nevada or by the Certificate
of
Incorporation of the Corporation, any corporate action to be taken by
a vote of the stockholders, other than the election of directors, shall be
authorized by not less than a majority of the votes cast at a meeting by the
stockholders present in person or by proxy and entitled to vote
thereon. Directors shall be elected as provided in Section 1 of
Article IV of these Bylaws. Written ballots shall not be required for
voting on any matter unless ordered by the Chairman of the meeting.
Section
9.
Proxies
. Every
proxy shall be executed in writing by the stockholder or by his or her
attorney-in-fact.
Section
10.
Consent of Stockholders
in
Lieu of Meeting
. Unless otherwise provided in the Certificate
of Incorporation of the Corporation, whenever the vote of the stockholders
at a
meeting thereof is required or permitted to be taken in connection with any
corporate action by any provisions of the laws of the state of Nevada or of
the
Certificate of Incorporation, such corporate action may be taken without a
meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed, in person or by proxy,
by
the holders of outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting
at
which all shares entitled to vote thereon were present and voted in person
or by proxy. Prompt notice of the taking of the corporate action
without a meeting by less than unanimous written consent shall
be
given
to
those stockholders who have not consented in writing, but who were entitled
to
vote on the matter.
ARTICLE
IV
Directors
Section
1.
Number, Election
and Term of
Office
. The business and affairs of the Corporation shall be
managed by the Board of Directors. The number of Directors which
shall constitute the whole Board shall be not less than one (1) nor more than
nine (9). Within such limits, the number of Directors may be fixed
from time to time by vote of the stockholders or of the Board of Directors,
at
any regular or special meeting, subject to the provisions of the Certificate
of
Incorporation. The initial board shall consist of one (1)
Director. Directors need not be stockholders. Directors
shall be elected at the Annual Meeting of the stockholders of the Corporation,
except as provided in Section 2 of this Article IV, to serve until their
respective successors are duly elected and qualified. When used in
these Bylaws, the phrase "entire Board" means the total number of directors
which the Corporation would have if there were no vacancies.
Section
2.
Vacancies and Newly
Created
Directorships
. Except as hereinafter provided, any vacancy in
the office of a Director occurring for any reason other than the removal of
a
Director pursuant to Section 3 of this Article, and any newly created
Directorship resulting from any increase in the authorized number of Directors,
may be filled by a majority of the Directors then in office. In the
event that any vacancy in the office of a Director occurs as a result of the
removal of a Director pursuant to Section 3 of this Article, or in the event
that vacancies occur contemporaneously in the offices of all of the Directors,
such vacancy or vacancies shall be filled by the stockholders of the Corporation
at a meeting of stockholders called for that purpose. Directors
chosen or elected as aforesaid shall hold office until their respective
successors are duly elected and qualified.
Section
3.
Removals
. At
any meeting of stockholders of the Corporation called for that purpose, the
holders of a majority of the shares of capital stock of the Corporation entitled
to vote at such meeting may remove from office any or all of the Directors,
with
or without cause.
Section
4.
Resignations
. Any
director may resign at any time by giving written notice of his or her
resignation to the Corporation. A resignation shall take effect at
the time specified therein or, if the time when it shall become effective
shall not be specified therein, immediately upon its receipt, and, unless
otherwise specified therein, the acceptance of a resignation shall not be
necessary to make it effective.
Section
5.
Place of
Meetings
. Except as otherwise provided in these Bylaws, all
meetings of the Board of Directors shall be held at the principal business
office of the Corporation or at such other place, within or without the State
of
Nevada, as the Board determines from time to time.
Section
6.
Annual
Meetings
. The annual meeting of the Board of Directors shall
be held either (a) without notice immediately after the annual meeting of
stockholders and in the same place, or (b) as soon as practicable after the
annual meeting of stockholders on such date and at such time and place as the
Board determines.
Section
7.
Regular
Meetings
. Regular meetings of the Board of Directors shall be
held on such dates and at the principal business office of the Corporation
or at
such other place, either within or without the State of Nevada, as the Board
determines. Notice of regular meetings need not be given, except as
otherwise required by law.
Section
8.
Special
Meetings
. Special meetings of the Board of Directors may be
called by the President or any two Directors on notice given to each Director,
and such meetings shall be held at the principal business office of the
Corporation or at such other place, either within or without the State of
Nevada, as shall be specified in the notices thereof. The request
shall state the date, time, place and purpose or purposes of the proposed
meeting.
Section
9.
Notice of
Meetings
. Notice of each special meeting of the Board of
Directors (and of each annual meeting held pursuant to subdivision (b) of
Section 6 of this Article IV) shall be given, not later than 24 hours before
the
meeting is scheduled to commence, by the President or the Secretary and shall
state the place, date and time of the meeting. Notice of each meeting
may be delivered to a Director by hand or given to a director orally (whether
by
telephone or in person) or mailed or telegraphed to a Director at his or
her residence or usual place of business, provided, however, that if notice
of
less than 72 hours is given it may not be mailed. If mailed, the
notice shall be deemed to have been given when deposited in the United States
mail, postage prepaid, and if telegraphed, the notice shall be deemed to
have been given when the contents of the telegram are transmitted to the
telegraph service with instructions that the telegram immediately be
dispatched. Notice of any meeting need not be given to any Director
who shall submit, either before or after the meeting, a signed waiver of notice
or who shall attend the meeting, except if such Director shall attend for the
express purpose of objecting at the beginning thereof to the transaction of
any business because the meeting is not lawfully called or
convened. Notice of any adjourned meeting, including the place,
date and time of the new meeting, shall be given to all Directors not present
at
the time of the adjournment, as well as to the other Directors unless the
place, date and time of the new meeting is announced at the adjourned
meeting.
Section
10.
Quorum
. Except
as otherwise provided by the laws of the State of Nevada or in these Bylaws,
at
all meetings of the Board of Directors of the Corporation a majority of the
entire Board shall constitute a quorum for the transaction of business, and
the vote of a majority of the Directors present at a meeting at which a quorum
is present shall be the act of the Board of Directors. A majority of
the Directors present, whether or not a quorum is present, may adjourn any
meeting to another place, date and time.
Section
11.
Conduct of
Meetings
. At each meeting of the Board of Directors of the
Corporation, the President or, in his or her absence, a Director chosen by
a
majority of the Directors present shall act as Chairman of the
meeting. The Secretary or, in his or her absence, any person
appointed by the Chairman of the meeting shall act as Secretary of the meeting
and keep the minutes thereof. The order of business at all meetings
of the Board shall be as determined by the Chairman of the meeting.
Section
12.
Committees of the
Board
. The Board of Directors, by resolution adopted by a
majority of the entire Board of Directors, may designate an executive committee
and other committees, each consisting of one (1) or more
Directors. Each committee (including the members thereof) shall
serve at the pleasure of the Board of Directors and shall keep minutes of its
meetings and report the same to the Board of Directors. The Board of
Directors may designate one or more Directors as alternate members of any
committee. Alternate members may replace any absent or disqualified
member or members at any meeting of a committee. In addition, in
the absence or disqualification of a member of a committee, if no alternate
member has been designated by the Board of Directors, the members present
at any meeting and not disqualified from voting, whether or not they constitute
a quorum, may unanimously appoint another member of the Board of Directors
to act at the meeting in the place of the absent or disqualified
member.
Except
as limited by the laws of the State of Nevada, each committee, to the extent
provided in the resolution establishing it, shall have and may exercise all
the
powers and authority of the Board of Directors with respect to all
matters.
Section
13.
Operation of
Committees
. A majority of all the members of a committee shall
constitute a quorum for the transaction of business, and the vote of a majority
of all the members of a committee present at a meeting at which a quorum is
present shall be the act of the committee. Each committee shall adopt
whatever other rules of procedure it determines for the conduct of its
activities.
Section
14.
Consent to
Action
. Any action required or permitted to be taken at any
meeting of the Board of Directors or of any committee may be taken without
a
meeting if all members of the Board of Directors or committee, as the case
may
be, consent thereto in writing, and the writing or writings are filed with
the minutes of proceedings of the Board of Directors or committee.
Section
15.
Meetings Held Other
Than in
Person
. Unless otherwise restricted by the Certificate of Incorporation
or these Bylaws, members of the Board of Directors or any committee may
participate in a meeting of the Board of Directors or committee, as the case
may
be, by means of conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each
other, and such participation shall constitute presence in person at the
meeting.
Section
16.
Compensation of
Directors
. Directors, as such, shall not receive any stated
salary for their services, but, by resolution of the Board, a fixed sum and
expenses of attendance,
if
any,
may
be
allowed for the attendance at each regular or special meeting of the Board;
however nothing herein contained shall be construed to preclude any Director
from serving the Corporation in any other capacity and receiving compensation
therefore.
ARTICLE
V
Officers
Section
1.
Number, Election
and Term of
Office
. The officers of the Corporation shall be a President,
a Secretary, and a Treasurer, and may at the discretion of the Board of
Directors include a Chief Executive Officer, a Chief Financial Officer, Chairman
of the Board and one or more Vice Presidents, Director of Corporate Development,
General Managers, Assistant Financial Officers and Assistant
Secretaries. The officers of the Corporation shall be elected
annually by the Board of Directors at its meeting held immediately after the
Annual Meeting of the stockholders, and shall hold their respective offices
until their successors are duly elected and qualified. Any two (2) or
more offices may be held by the same person. The Board of Directors
may from time to time appoint such other officers and agents as the interests
of
the Corporation may require and may fix their duties and terms of
office. Any officer may devote less than one hundred percent (100%)
of his or her working time to his or her activities as such.
Section
2.
The
President
. The President shall be the chief executive and
operating officer of the Corporation, and shall preside at all meetings of
the stockholders and of the Board of Directors. The President shall
have general and active management of the business and affairs of the
Corporation, subject to the control of the Board, shall see that all orders
and
resolutions of the Board are effectuated, and shall have such other powers
and
duties as the Board assigns to him. He shall ensure that the books,
reports, statements, certificates and other records of the Corporation are
kept,
made or filed in accordance with the laws of the State of Nevada. He
shall cause to be called regular and special meetings of the stockholders and
of
the Board of Directors in accordance with these Bylaws. He may sign,
execute and deliver in the name of the Corporation all deeds, mortgages, bonds,
contracts or other instruments authorized by the Board of Directors, except
in
cases where the signing, execution or delivery thereof shall be expressly
delegated by the Board of Directors or by these Bylaws to some other officer
or
agent of the Corporation or where required by law to be otherwise signed,
executed or delivered. He may sign, jointly with the Secretary, an
Assistant Secretary, the Treasurer, or an Assistant Financial Officer,
certificates of stock of the Corporation. He shall appoint and
remove, employ and discharge, and fix the compensation of all servants, agents,
employees and clerks of the Corporation other than the duly elected or appointed
officers, subject to the approval of the Board of Directors. In
addition to the powers and duties expressly conferred upon him by these Bylaws,
he shall, except as otherwise specifically provided by the laws of the State
of
Nevada, have such other powers and duties as shall from time to time be assigned
to him by the Board of Directors.
Section
3.
The Vice
President
. There may be such Vice Presidents as the Board
of Directors shall determine from time to time, with duties determined by the
Board of Directors. If there is only one Vice President appointed by
the Board, he shall perform, in the absence or disability of the President,
the duties and exercise the powers of the President and shall have such other
powers and duties as the Board or the President assigns to him.
Section
4.
The
Secretary
. The Secretary may sign all certificates of stock of
the Corporation jointly with the President. He shall record all the
proceedings of the meetings of the stockholders and the Board of Directors
of
the Corporation in the books to be kept for that purpose. He shall
have safe custody of the seal of the Corporation and, when authorized by
the Board, he shall affix the same to any corporate instrument, and when so
affixed he may attest the same by his signature. He shall keep the
transfer books, in which all transfers of the capital stock of the Corporation
shall be registered, and the stock books, which shall contain the names and
addresses of all holders of the capital stock of the Corporation and the number
of shares held by each. He shall keep the stock and transfer books
available during business hours for inspection by any stockholder and for the
transfer of stock. He shall notify the Directors and stockholders of
the respective meetings as required by law or by these Bylaws of the
Corporation. He shall have and perform such other powers and
duties as may be required by law or the Bylaws of the Corporation, or which
the
Board or the President may assign to him from time to
time.
Section
5.
Assistant
Secretaries
. The Assistant Secretaries shall, during the
absence or incapacity of the Secretary, assume and perform all functions and
duties which the Secretary might lawfully do if present and not under any
incapacity.
Section
6.
The
Treasurer
. Subject to the control of the Board, the
Treasurer shall have the care and custody of the corporate funds and the
books relating thereto. He shall perform all other duties incident to
the office of the Treasurer. He shall have such other powers and
duties as the Board or the President assigns to him from time to
time. He shall keep full and accurate accounts of all receipts and
disbursements of the Corporation in books belonging to the Corporation and
shall
deposit all monies and other valuable effects in the name and to the credit
of
the Corporation in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the Corporation as may be
ordered by the Board, and shall render to the President or the Directors,
whenever they may require it, an account of all his transactions as Treasurer
and an account of the business and financial position of the
Corporation.
Section
7.
Assistant Financial
Officers
. The Assistant Financial Officers shall, during the
absence or incapacity of the Treasurer, assume and perform all functions and
duties which the Treasurer might lawfully do if present and not under any
incapacity.
Section
8.
Transfer of
Duties
. The Board of Directors may transfer the power and
duties, in whole or in part, of any officer to any other officer, or other
persons, notwithstanding the provisions of these Bylaws, except as otherwise
provided by the laws of the State of Nevada.
Section
9.
Removals
. Subject
to his or her earlier death, resignation or removal as hereinafter provided,
each officer shall hold his or her office until his or her successor shall
have
been duly elected and shall have qualified. Any officer or agent of
the Corporation may be removed from office at any time, with or without cause,
by the affirmative vote of a majority of the entire Board, at a meeting of
the
Board of Directors called for that purpose.
Section
10.
Resignations
. Any
officer or agent of the Corporation may resign at any time by giving written
notice of his or her resignation to the Board of Directors or to the President
or Secretary of the Corporation. Any such resignation shall take
effect at the time specified therein or, if the time when it shall become
effective shall not be specified therein, immediately upon its
receipt, and, unless otherwise specified therein, the acceptance of a
resignation shall not be necessary to make it effective.
Section
11.
Vacancies
. If
the office of President, Secretary or Treasurer becomes vacant for any reason,
the Board of Directors shall choose a successor to hold such office for the
unexpired term. If any other officer or agent becomes vacant for any
reason, the Board of Directors may fill the vacancy, and each officer so elected
shall serve for the remainder of his or her predecessor's
term.
Section
12.
Compensation of
Officers
. The officers shall receive such salary or
compensation as may be determined by the Board of Directors.
ARTICLE
VI
Contracts,
Checks and
Notes
Section
1.
Contracts
. Unless
the Board of Directors shall otherwise specifically direct, all contracts of
the
Corporation shall be executed in the name of the Corporation by the President
or
a Vice President.
Section
2.
Checks and
Notes
. All negotiable instruments of the Corporation shall be
signed by such officers or agents of the Corporation as may be designated by
the
Board of Directors.
ARTICLE
VII
Provisions
Relating to Stock
Certificates
and
Stockholders
Section
1.
Certificates of
Stock
. Certificates for the Corporation's capital stock
shall be in such form as required by law and as approved by the
Board. Each certificate shall be signed in the name of the
Corporation by the President or any Vice President and by the Secretary, the
Treasurer or any Assistant Secretary or any Assistant Financial Officer and
shall bear the seal of the Corporation or a facsimile thereof. If any
certificate is countersigned by a transfer agent or registered by a
registrar, other than the Corporation or its employees, the signature of
any officer of the Corporation may be a facsimile signature. In
case any officer, transfer agent or registrar who shall have signed or
whose facsimile signature was placed on any certificate shall have ceased
to be such officer, transfer agent or registrar before the certificate
shall be issued, it may nevertheless be issued by the Corporation with the
same effect as if he or she were such officer, transfer agent or registrar
at
the date of issue.
Section
2.
Lost Certificates,
etc
. The Corporation may issue a new certificate for
shares in place of any certificate theretofore issued by it, alleged to
have been lost, mutilated, stolen or destroyed, and the Board may require
the owner of the lost, mutilated, stolen or destroyed certificate, or his legal
representatives, to make an affidavit of that fact and to give the
Corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the Corporation on account of the alleged loss,
mutilation, theft or destruction of the certificate or the issuance of a new
certificate.
Section
3.
Transfer of
Stock
. Upon surrender to the Corporation or the transfer agent
of the Corporation of a certificate for shares duly endorsed or accompanied
by
proper evidence of succession, assignment or authority to transfer, the
Corporation shall issue a new certificate to the person entitled thereto, cancel
the old certificate and record the transaction upon its books.
Section
4.
Record
Date
. For the purpose of determining the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or to express consent to or dissent from any proposal
without a meeting, or for the purpose of determining stockholders
entitled to receive payment of any dividend or other distribution
or the allotment of any rights, or for the purpose of any other action, the
Board may fix in advance, a record date, which shall be not more than sixty
(60)
nor less than ten (10) days before the date of any such meeting, nor more than
sixty (60) days prior to any other action.
Section
5.
Registered
Stockholders
. The Corporation shall be entitled to treat the
holder of record of any share or shares of stock as the holder in fact thereof
and, accordingly, shall not be bound to recognize any equitable or other claim
to, or interest in, such share or shares by any other person, whether or not
it
shall have notice thereof, except as expressly provided by the laws of the
State
of Nevada.
ARTICLE
VIII
General
Provisions
Section
1.
Dividends
. To
the extent permitted by law, the Board shall have full power and
discretion, subject to the provisions of the Certificate of Incorporation
of the Corporation and the terms of any other corporate document or
instrument binding upon the Corporation, to determine what, if any, dividends
or
distributions shall be declared and paid or made. Dividends may be
paid in cash, in property, or in shares of capital stock, subject to the
provisions of the Certificate of Incorporation. Before payment of any
dividend, there may be set aside out of any funds of the Corporation available
for dividends such sums as the Directors think proper as a reserve or reserves
to meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation, or for such other purpose as the
Directors think conducive to the interests of the Corporation. The
Directors may modify or abolish any such reserve in the manner in which it
was
created.
Section
2.
Seal
. The
corporate seal of the Corporation shall have inscribed thereon the name of
the
Corporation, the year of its organization and the words “Corporate Seal,
Nevada.”
Section
3.
Fiscal
Year
. The fiscal year of the Corporation shall be end on
December 31.
Section
4.
Voting Shares in
Other
Corporations
. Unless otherwise directed by the Board, shares in other
corporations which are held by the Corporation shall be represented
and voted only by the President or by a proxy or proxies appointed by him or
her.
Section
5.
Indemnification
.
(a) The
Corporation shall
indemnify any person who was, or is threatened to be made, a party to a
proceeding (as hereinafter defined) by reason of the fact that he or she (i)
is
or was a director, officer, employee or agent of the Corporation, or (ii) while
a director, officer, employee or agent of the Corporation, is or was serving
at
the request of the Corporation as a director, officer, employee, agent or
similar functionary of another corporation, partnership, joint venture, trust
or
other enterprise, to the fullest extent permitted under the Revised Statutes
of
the State of Nevada, as the same exists or may hereafter be amended. Such right
shall be a contract right and as such shall run to the benefit of any director
or officer who is elected and accepts the position of director or officer of
the
Corporation or elects to continue to serve as a director or officer of
the Corporation while this Article VII is in effect. The rights
conferred above shall not be exclusive of any other right which any person
may
have or hereafter acquire under any statute, bylaw, resolution of stockholders
or directors, agreement or otherwise.
(b) As
used herein, the
term "proceeding" means any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, any appeal
in such an action, suit or proceeding and any inquiry or investigation that
could lead to such an action, suit or proceeding.
(c) A
director or officer
of the Corporation shall not be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director
or
officer, except for liability (i) for acts or omissions which involve
intentional misconduct, fraud or a knowing violation of law; or (ii) for the
payment of distributions in violation of the Revised Statutes of the State
of
Nevada. Any repeal or amendment of this Article VII by the shareholders of
the
Corporation shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director or officer of the Corporation
arising from an act or omission occurring prior to the time of such repeal
or
amendment. In addition to the circumstances in which a director or officer
of
the Corporation is not personally liable as set forth in the foregoing
provisions of this Article VII, a director or officer shall not be liable to
the
Corporation or its stockholders to such further extent as permitted by any
law
hereafter enacted, including, without limitation, any subsequent amendment
to
the Revised Statutes of the State of Nevada.
ARTICLE
IX
Amendments
These
Bylaws may be adopted, altered,
amended or repealed or new Bylaws may be adopted by the stockholders, or by
the
Board of Directors by the Certificate or Incorporation, at any regular meeting
of the stockholders or of the Board of Directors or at any special meeting
of
the stockholders or of the Board of Directors if notice of such alteration,
amendment, repeal or adoption of new Bylaws be contained in the notice of such
special meeting. If the power to adopt, amend or repeal Bylaws is
conferred upon the Board of Directors by the Certificate of Incorporation it
shall not divest or limit the power of the stockholders to adopt, amend or
repeal Bylaws.
