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EXCEL - IDEA: XBRL DOCUMENT - Ener-Core, Inc. | Financial_Report.xls |
EX-5.1 - Ener-Core, Inc. | ex_5-1.htm |
EX-23.1 - Ener-Core, Inc. | ex_23-1.htm |
As filed with the Securities and Exchange Commission on November
9, 2011
Registration No.
333-173040
UNITED
STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington,
D.C. 20549
FORM
S-1/A
Amendment No. 3
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
INVENTTECH INC.
|
(Exact
name of registrant as specified in its
charter)
|
Nevada
|
7380
|
46-0525350
|
|
(State
or other jurisdiction of incorporation or organization)
|
(Primary
Standard Industrial Classification Code Number)
|
(I.R.S.
Employer
Identification
No.)
|
1736
Angel Falls Street
Las
Vegas, NV, 89142-1230
Tel: 1-209-694-4885
|
(Address
and telephone number of registrant's principal executive
offices)
|
EastBiz.com,
Inc.
5348
Vegas Drive Suite 662
Las
Vegas Nevada 89108
Tel: 1-888-284-3821
|
(Name,
address and telephone number of agent for
service)
|
Copies
to:
David
M. Loev
|
John
S. Gillies
|
|
The
Loev Law Firm, PC
|
The
Loev Law Firm, PC
|
|
6300
West Loop South, Suite 280
|
&
|
6300
West Loop South, Suite 280
|
Bellaire,
Texas 77401
|
Bellaire,
Texas 77401
|
|
Phone:
(713) 524-4110
|
Phone:
(713) 524-4110
|
|
Fax:
(713) 524-4122
|
Fax:
(713) 456-7908
|
Approximate date of proposed
sale to the public: As soon as practicable after this Registration
Statement becomes effective.
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 check the following
box: x
If this Form is filed to
register additional securities for an offering pursuant to Rule 462(b) under the
Securities Act, please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. o
If this Form is a
post-effective amendment filed pursuant to Rule 462(c) under the Securities Act,
check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. o
If this Form is a
post-effective amendment filed pursuant to Rule 462(d) under the Securities Act,
check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. o
Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See the definitions of
"large accelerated filer," "accelerated filer" and "smaller reporting company"
in Rule 12b-2 of the Exchange Act. (Check one):
Large
Accelerated Filer o
|
Accelerated
Filer o
|
Non-accelerated
Filer o
|
Smaller
reporting company x
|
(Do
not check if a Smaller reporting company)
|
Calculation of Registration
Fee
Title
of Class of Securities to be Registered
|
Amount
to be Registered
|
Proposed
Maximum Aggregate Price Per Share(¹)
|
Proposed
Maximum Aggregate Offering Price(²)
|
Amount
of Registration Fee
|
||||
Common
Stock, $0.0001 per share
|
850,000
|
$0.05
|
$42.500
|
$4.93
|
(¹)The price of $0.05 is a
fixed price, arbitrarily determined by Inventtech Inc., at which the selling
stockholders may sell their shares until our common stock is quoted on the OTC
Bulletin Board at which time the shares may be sold at prevailing market prices
or privately negotiated prices.
(²) Estimated solely for the
purpose of computing the amount of the registration fee in accordance with Rule
457(a) under the Securities Act of 1933, as amended (the "Securities
Act").
THE REGISTRANT HEREBY AMENDS
THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY
ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME
EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT, OR UNTIL THIS
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND
EXCHANGE COMMISSION (THE “SEC”), ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
SUBJECT TO COMPLETION,
DATED NOVEMBER
9 ,
2011
PROSPECTUS
INVENTTECH
INC.
RESALE OF 850,000 SHARES OF
COMMON STOCK
Initial Public
Offering
The selling shareholders
named in this prospectus are offering 850,000 shares of common stock offered
through this prospectus. We will not receive any proceeds from this
offering and have not made any arrangements for the sale of these
securities. We have, however, set an offering price for these
securities of $0.05 per share.
Offering
Price
|
Underwriting
Discounts and Commissions
|
Proceeds
to Selling Shareholders
|
||||
Per
Share
|
$0.05
|
None
|
$0.05
|
|||
Total
|
$42,500
|
None
|
$42,500
|
Our common stock is presently
not traded on any market or securities exchange. The sales price to
the public is fixed at $0.05 per share until such time as the shares of our
common stock are traded on the Over-The-Counter Bulletin
Board. Although we are in the process of applying for quotation of
our common stock on the Over-The-Counter Bulletin Board through a market maker,
public trading of our common stock may never materialize, and FINRA will not
approve the quotation of our common stock on the Over-The-Counter Bulletin Board
until the Registration Statement of which this prospectus is a part is declared
effective. If our common stock becomes traded on the Over-The-Counter
Bulletin Board, then the sale price to the public will vary according to
prevailing market prices or privately negotiated prices by the selling
shareholders.
The purchase of the
securities offered through this prospectus involves a high degree of
risk. See section entitled “Risk Factors” starting on page
7.
Neither the Securities and
Exchange Commission nor any state securities commission has approved or
disapproved of these securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
The 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. The 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.
INVENTTECH
INC.
Prospectus
______________________________________
850,000 SHARES OF COMMON
STOCK
OFFERING PRICE $0.05 PER
SHARE
______________________________________
TABLE OF
CONTENTS
PAGE
|
|
PROSPECTUS
SUMMARY
|
4 |
RISK
FACTORS
|
7 |
FORWARD-LOOKING
STATEMENTS
|
17 |
USE
OF PROCEEDS
|
17 |
DETERMINATION
OF OFFERING PRICE
|
17 |
DILUTION
|
17 |
SELLING
STOCKHOLDERS
|
17 |
PLAN
OF DISTRIBUTION
|
19 |
INTEREST
OF NAMED EXPERTS AND COUNSEL
|
20 |
DESCRIPTION
OF BUSINESS
|
21 |
DESCRIPTION
OF PROPERTY
|
24 |
DESCRIPTION
OF SECURITIES
|
25 |
LEGAL
PROCEEDINGS
|
26 |
MARKET
FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
|
26 |
MANAGEMENT'S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
|
28 |
LIQUIDITY
AND CAPITAL RESOURCES
|
29 |
GOING
CONCERN
|
30 |
PURCHASE
OF SIGNIFICANT EQUIPMENT
|
30 |
OFF-BALANCE
SHEET ARRANGEMENTS
|
30 |
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
|
30 |
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
|
31 |
EXECUTIVE
COMPENSATION
|
33 |
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
34 |
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
|
34 |
DISCLOSURE
OF SEC POSITION OF INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES
|
35 |
EXPERTS
|
35 |
WHERE
YOU CAN FIND MORE INFORMATION
|
35 |
FINANCIAL
STATEMENTS INDEX
|
F-1
|
PROSPECTUS
SUMMARY
Inventtech Inc. (“we,” “us,”
“Inventtech”, the “Company,” and words of similar meaning) was incorporated in
the state of Nevada on April 29, 2010. We are focused on the development and
marketing of a web based school peer-to-peer chat software. Our
office is currently located at 1736 Angel Falls Street, Las Vegas,
Nevada 89142-1230. Our telephone number is (209) 694-4885. We have
secured a domain name www.inventtech.com, which is under construction as of the
date of this prospectus, and which contains information we do not desire to be
incorporated by reference herein.
We are in the business of
developing a web-based peer-to-peer (i.e., person to person) chat software for
use by Schools (the “School Chat Software”). This software is planned
to allow students to stay connected to their school friends and teachers in a
secure and controlled environment, free from outside influences. The
software is planned to allow the students to chat in one or more school
chat rooms and share content, such as pictures, videos and music. The
School Chat Software is also planned to act as a database, or yearbook, so that
students will be able to access their treasured memories in the future, and we
believe will help teachers and students build and maintain relationships over
time.
For the school, the web-based
software is planned to provide the services described above for the students,
while also providing an option for the school to track the students and their
activities. This will allow schools to keep tabs on students, and to monitor
their experiences. Teachers will be able to post homework, tutorials,
and provide a place where students can get information about events and
plans.
Once we set up our website
and complete our School Chat Software development, which
we hope to complete by the beginning of March
201 2 , schools will be able to
utilize our School Chat Software directly from our website. The School Chat
Software, which requires students to identify themselves, is planned to offer
school tutoring rooms, and database rooms for storing and accessing articles and
homework. We plan to offer schools the use of the School Chat
Software at a cost of $69 per month, or a discounted yearly rate of $600 per
year, which we anticipate will be the primary source of our revenues, if any, in
the future. We estimate that the completion of our website, database program,
and School Chat software will cost approximately $12,000.
To date, we have not had any
customers or generated any revenues and there can be no assurance that we will
ever achieve any profitability or revenues. We
estimate that our current cash balances will be extinguished by December
2011 provided we
do not have any unanticipated expenses. We anticipate the need for approximately
$80,000 to support our operations over the next twelve months (which includes
approximately $12,000 to complete the development of our website and software,
approximately $23,000 of costs related with the preparation, filing and related
costs of the Registration Statement, of which this Prospectus is a part,
approximately $30,000 of expenses which we anticipate incurring in connection
with the preparation and filing of our periodic and current reports and various
transfer agent fees, and an additional $15,000 of other various administrative
fees during the twelve months following the effectiveness of our Registration
Statement, as described in greater detail below under “Estimated Expenses for
the Next Twelve Months”). Although there can be no assurance at
present, we
hope to be in a position to generate revenues by April
201 2 ; however, we will still need
to raise additional funding to support our operations and pay the expenses
described above (as described in greater detail below under “Liquidity and
Capital Resources”).
We are a development stage
company that has not generated any revenue to date. As of
September
30 , 2011,
we had $ 686 in current assets,
$ 1,798 in liabilities and
a working capital deficit
of $1,112 . Our current working capital
is not sufficient to enable us to implement our business plan as set forth in
this prospectus. Our inability to generate revenues and accumulated
deficit since inception raises substantial doubt regarding our ability to
continue as a going concern.
A current prospectus must be
in effect at the time of the sale of the shares of common stock registered
herein. The selling stockholders will be responsible for any commissions or
discounts due to brokers or dealers. We will pay any and all other offering
expenses.
Each selling stockholder or
dealer selling the common stock is required to deliver a current prospectus upon
the sale. In addition, for the purposes of the Securities Act of 1933, as
amended, selling stockholders may be deemed underwriters.
4
Summary of the
Offering
Securities
Being Offered:
|
850,000
shares of our common stock, which includes all issued and outstanding
shares with the exception of those shares held by our President and
Director, Mr. Mohammad Abdel Hadi, and our Treasurer and Director, Ms.
Eiman Saleh.
|
|
Offering
Price, Lack of Market:
|
The
offering price of the common stock is $0.05 per share. There is
no public market for our common stock. We cannot give any
assurance that the shares offered will have a market value, or that they
can be resold at the offered price if and when an active secondary market
might develop, or that a public market for our securities may be sustained
even if developed. The absence of a public market for our stock
will make it difficult to sell your shares of our stock.
We
are in the process of applying to the Over-The-Counter Bulletin Board,
through a market maker that is a licensed broker dealer, to allow the
trading of our common stock upon our becoming a reporting company. If our
common stock becomes traded and a market for the stock develops, the
actual price of stock will be determined by prevailing market prices at
the time of sale or by private transactions negotiated by the selling
shareholders. The offering price would thus be determined by
market factors and the independent decisions of the selling
shareholders.
|
|
Minimum
Number of Shares To Be Sold in This Offering:
|
None.
|
|
Securities:
|
4,850,000
shares of our common stock are issued and outstanding as of the date of
this prospectus. Our President and Director, Mr. Mohamad Abdel Hadi, and
our Treasurer and Director, Ms. Eiman Saleh, own an aggregate of 82.5% of
the common stock shares of our company and therefore have majority voting
control. All of the common stock to be sold under this
prospectus will be sold by existing shareholders. There will be
no increase in our issued and outstanding shares as a result of this
offering.
|
|
Need
for Additional Financing:
|
We
have not generated any revenues to date and will require additional
funding to complete our program and website and conduct our planned
marketing activities. We anticipate the need for approximately
$80,000 to support our operations over the next twelve months (which
includes approximately $12,000 to complete the development of our website
and software, approximately $23,000 of costs related with the preparation,
filing and related costs of the Registration Statement, of which this
Prospectus is a part, approximately $30,000 of expenses which we
anticipate incurring in connection with the preparation and filing of our
periodic and current reports and various transfer agent fees, and an
additional $15,000 of other various administrative fees during the twelve
months following the effectiveness of our Registration Statement, as
described in greater detail below under “Estimated Expenses for the Next
Twelve Months”). We anticipate raising this funding through the
sale of debt or equity securities (subsequent to the effectiveness of this
registration statement) and/or through traditional bank funding. If we are
unable to raise the additional funding, the value of our securities, if
any, would likely become worthless and we may be forced to abandon our
business plan. Even assuming we raise the additional capital we
require to implement our business plan, we will require substantial fees
and expenses associated with this offering, and we anticipate incurring
net losses for the foreseeable
future.
|
Use
of Proceeds:
|
We
will not receive any proceeds from the sale of shares by the selling
stockholders. We will incur all costs associated with this registration
statement and prospectus.
|
|
Risk
Factors:
|
See
“Risk Factors” and the other information in this prospectus for a
discussion of the factors you should consider before deciding to invest in
shares of our common stock.
|
5
Summary of
Financial Data
The following summary
financial information for the period from April 29, 2010 (inception) through
September
30 , 2011
includes balance sheet and statement of operations data derived from our
unaudited and audited financial statements. The information contained in this
table should be read in conjunction with "Management's Discussion and Analysis
of Financial Condition or Plan of Operation" and are derived from the financial
statements and accompanying notes included in this
prospectus.
Balance
Sheet Information
|
As
of
September 30,
2011
|
As
of
December
31, 2010
|
||||||
Cash
|
$ | 686 | $ | 25,280 | ||||
Prepaid
expenses
|
$ | - | $ | 350 | ||||
Total
Assets
|
$ | 686 | $ | 25,630 | ||||
Total
Liabilities
|
$ | 1,798 | $ | - | ||||
Total Stockholders’
Equity (Deficit)
|
$ | (1,112 | ) | $ | 25,630 |
Statement of Operations
Information
|
For the
nine months ended September 30, 2011 |
For the period April 29, 2010 (inception) through December
31, 2010
|
||||||
Revenue
|
$ | - | $ | - | ||||
Total
costs and Expenses
|
$ | 26,742 | $ | 17,270 | ||||
Net
Loss
|
$ | (26,742 | ) | $ | (17,270 | ) |
6
RISK
FACTORS
An investment in our common
stock involves a high degree of risk. You should carefully consider the
following factors and other information in this prospectus before deciding to
invest in our Company. If any of the following risks actually occur, our
business, financial condition, results of operations and prospects for growth
would likely suffer. As a result, you could lose all or part of your
investment.
RISKS RELATED TO OUR
BUSINESS
Because we have not generated
any revenues and incurred losses for the period from April 29, 2010 (inception)
through September
30, 2011,
there is an uncertainty about whether we will be able to continue as a going
concern and, as a result, a possibility that shareholders may lose some or all
of their investment in our company.
The Company has incurred net
losses in the amount of $ 44,012 for the period from April
29, 2010 (inception) through September
30 , 2011.
As of September
30 ,
2011, we had a
working
capital deficit of $1 ,112 . We anticipate generating
losses for a minimum of the next 12 months. These factors raise substantial
doubt regarding our ability to continue as a going concern. We
anticipate the need for approximately $80,000 to support our operations over the
next twelve months (which includes approximately $12,000 to complete the
development of our website and software, approximately $23,000 of costs related
with the preparation, filing and related costs of the Registration Statement, of
which this Prospectus is a part, approximately $30,000 of expenses which we
anticipate incurring in connection with the preparation and filing of our
periodic and current reports and various transfer agent fees, and an additional
$15,000 of other various administrative fees during the twelve months following
the effectiveness of our Registration Statement, as described in greater detail
below under “Estimated Expenses for the Next Twelve
Months”). If financing is available, it may involve issuing
securities senior to our common stock. In addition, in the event we
do not raise additional capital from conventional sources, such as our existing
investors or commercial banks, there is every likelihood that our growth will be
restricted and we may be forced to scale back or curtail implementing our
business plan.
No adjustment has been made
in the accompanying financial statements to the amounts and classification of
assets and liabilities, which adjustment may have to be made, should we be
unable to continue as a going concern. If we cannot continue as a viable entity,
our shareholders may lose some or all of their investment in the
Company.
Because we are a development
stage company that faces many obstacles as a start up venture, we may never be
able to execute our business plan.
We were incorporated on April
29, 2010. We are in the business of developing a web-based peer-to-peer chat
software program for schools and students (“School Chat
Software”). Although we have begun the development of our School Chat
Software, we may not be able to execute our business plan unless and until we
are successful in raising additional funds.
We may not be able to obtain
additional necessary funding. To date we have never had any customers
or revenues and there can be no assurance that we will ever achieve any
profitability or revenues. The revenue and income potential of our proposed
business and operations are unproven, and the lack of an operating history makes
it difficult to evaluate the future prospects of our
business.
Because our business plan may
be unsuccessful, we may not be able to continue operations as a going
concern.
Our ability to continue as a
going concern is dependent upon our generating cash flow sufficient to fund
operations and reduce operating expenses. Our business plan may not be
successful in addressing these issues.
The success of our business
plan is dependent on our further developing and marketing of the web-based
School Chat Software. Our ability to develop such program is unproven, and the
lack of an operating history makes it difficult to validate our business
plan.
If we cannot continue as a
going concern, our stockholders may lose their entire investment in our
Company.
Because we expect to incur
losses over the next 12 months, our stockholders may lose their entire
investment in us.
We expect to incur losses
over the next 12 months because we do not yet have any revenues to offset the
expenses associated with the development, and the marketing of, our proposed
program.
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.
7
Our ability to continue as a
going concern is dependent upon our generating cash flow sufficient to fund
operations and reduce operating expenses. Our business plan may not be
successful in addressing these issues.
The success of our business
plan is dependent on our developing and marketing the web-based School Chat
Software. Our ability to develop such a program is unproven, and the lack of an
operating history makes it difficult to validate our business plan. If we cannot
continue as a going concern, our stockholders may lose their entire investment
in our company.
Because we have no operating
history, there is no assurance that our future operations will result in
profitable operations.
There is no operating history
upon which to base any assumption as to the likelihood that we will prove
successful, and we cannot provide investors with assurances that we will
generate any operating revenues or ever achieve profitable operations. If we are
unsuccessful in addressing these risks, our business will most likely
fail.
We were incorporated on April
29, 2010, and are in the development stage. While we have not
realized any revenues to date, we
expect that our software will be ready for commercial sale by approximately
April
2012 . We have no operating history
at all upon which an evaluation of our future success or failure can be made. We
have incurred net losses for the period from inception (April 29, 2010) through
September
30 , 2011
and expect to have net losses over the next 12 months. These losses will come
due to substantial costs and expenses associated with the further development
and marketing of our software and web site.
In the future, our success
will be dependent upon the success of the finalization of our software and our
efforts to gain market acceptance of our software. If we cannot attract a
significant number of customers due to the target market not being as responsive
as we anticipate, we cannot guarantee that we will ever be successful in
generating revenues in the future to ensure our
continuation.
Because we have not generated
any revenue from our business and we will need to raise funds in the near
future, which may be difficult to obtain when required, we might be forced to
discontinue our business.
We had a
working
capital deficit of $1,112
as of
September
30, 2011.
To date, we have never had any customers and there can be no assurance that we
will ever achieve any profitability or revenues. We
estimate that our current cash balances will be extinguished by December
2011 provided we
do not have any unanticipated expenses. We anticipate the need for approximately
$80,000 to support our operations over the next twelve months (which includes
approximately $12,000 to complete the development of our website and software,
approximately $23,000 of costs related with the preparation, filing and related
costs of the Registration Statement, of which this Prospectus is a part,
approximately $30,000 of expenses which we anticipate incurring in connection
with the preparation and filing of our periodic and current reports and various
transfer agent fees, and an additional $15,000 of other various administrative
fees during the twelve months following the effectiveness of our Registration
Statement, as described in greater detail below under “Estimated Expenses for
the Next Twelve Months”). Although
there can be no assurance at present, we hope to be in a position to generate
revenues by April
201 2 ;
however, we will still need to raise additional funding to support our
operations, which we hope to raise through the sale of debt or equity securities
(subsequent to the effectiveness of this registration statement) and/or through
traditional bank funding.
Because we have not generated
any revenue from our business, we will need to raise additional funds for the
future development of our business and to be able to respond to unanticipated
requirements or expenses. We do not currently have any arrangements for
financing and we can provide no assurance to investors that we will be able to
find such financing if required. The most likely source of future funds
presently available to us will be through the sale of equity capital. Any sale
of share capital will result in dilution to existing shareholders. Furthermore,
there is no assurance that we will not incur debt in the future, that we will
have sufficient funds to repay our future indebtedness or that we will not
default on our future debts, jeopardizing our business
viability.
We may not be able to borrow
or raise additional capital in the future to meet our needs or to otherwise
provide the capital necessary to conduct business, which might result in the
loss of some or all of your investment in our common stock. There can be no
assurance that additional financing will be available to us on terms that are
acceptable. Consequently, we may not be able to proceed with our intended
business plans. Substantial additional funds will still be required if we are to
reach our goals that are outlined in this Registration Statement. Without
additional funding, we may not continue our planned business
operations.
Because we will be dependent
on contracting with third party firm(s) to develop and maintain our software for
us, our operations and financial stability may be adversely
affected.
We intend to hire a program
development firm(s) to develop and maintain our School Chat Software. If we
are unable to contract qualified program development firm(s) to develop and
maintain our software, whether because we cannot find them, cannot attract them
to our Company, or cannot afford them, we will not be able to continue our
planned business operations.
8
If we are not able to
finalize the further development and marketing of our web-based school chat
software or if the developed website contains defects, we may not be able to
generate revenues and shareholders will lose their
investment.
The success of our business
in part will depend on the development, completion and acceptance of our School
Chat Software by our target audience of schools. Achieving such acceptance will
require significant marketing investment. We have estimated the costs for the
further development of our web-based School Chat Software and database (which is
included in the software) of approximately $12,000.
Our website may contain
undetected design faults and software errors that are discovered only after it
has been viewed and used by customers. Any such default or error could cause
delays and further expenses and could adversely affect our competitive position
and cause us to lose potential customers or opportunities. If this is the case,
we may not generate revenues at sufficient levels to support our operations and
build our business and our business will likely fail.
Because we
will rely on subcontractors for the programming and maintenance of critical
elements of our website, the loss of these services will adversely affect our
operations and ability to generate revenues.
We plan to rely on
subcontractors for the programming and maintenance of critical elements of our
website, including integrating the billing process, tracking of the online sales
and the basic maintenance and backup of our servers. If one of these
subcontractors fails to provide services to us or there is a delay in their
services, our business may be harmed. We plan to rely on subcontractors for the
maintenance and ongoing upgrades of the School Chat Software and website. We
also plan to rely on subcontractors for tasks such as firewall protection,
application of security patches and regular backup of our servers'
data.
After contracting with these
subcontractors in the future, there is no assurance that they will continue to
reliably deliver the above services. Should we be unable to contract with such
subcontractors, or a subcontractor ceases to provide their services to us, our
operations will be terminated until such time as we can locate and retain a
replacement subcontractor. During such time our business will
suffer.
The market for School Chat
Software and services might not grow, and schools might not adopt our School
Chat Software and services.
Many schools have not used a
chat program and services for their school needs. We cannot be certain that
the market for such software and services will continue to develop and grow or
that schools will elect to adopt our planned software and services, rely upon
legacy chat program systems, or use generalized program solutions not
specifically designed for the school market. Schools that have already invested
substantial resources in other chat program solutions might be reluctant to
adopt our planned software and services to supplement or replace their existing
systems or methods. If demand for and market acceptance of our software and
services does not increase, we might not grow our business.
If our future customers do
not pay for and/or renew their subscriptions for our management software, or if
they do not renew them on terms that are favorable to us, our business might
suffer.
It is anticipated that our
School Chat Software will be sold for a term of one year. As the end of the
annual period approaches, we plan to pursue the renewal of the license with the
customer. We anticipate license renewals to represent a significant portion of
our total revenue. Because of this characteristic of our business, if
our future customers choose not to renew their agreements with us on beneficial
terms, our business, operating results and financial condition could be
harmed.
Risks Related to our
Company
Our executive officers
control a majority of our voting securities and therefore they have the ability
to influence matters affecting our shareholders.
Our executive officers
beneficially own approximately 82.5% of the issued and outstanding shares of our
common stock. As a result, they have the ability to influence matters affecting
our shareholders and will therefore exercise control in determining the outcome
of all corporate transactions or other matters, including the election of
Directors, mergers, consolidations, the sale of all or substantially all of our
assets, and also the power to prevent or cause a change in control. Any investor
who purchases shares will be a minority shareholder and as such will have little
to no say in the direction of the Company and the election of Directors.
Additionally, it will be difficult if not impossible for investors to remove our
current Directors, which will mean they will remain in control of who serves as
officers of the Company as well as whether any changes are made in the Board of
Directors. As a potential investor in the Company, you should keep in mind that
even if you own shares of the Company's common stock and wish to vote them at
annual or special shareholder meetings, your shares will likely have little
effect on the outcome of corporate decisions. Because our executive officers
control such shares, investors may find it difficult to replace our management
if they disagree with the way our business is being
operated.
9
Because our executive
officers and Directors live outside of the United States, you may have no
effective recourse against them for misconduct and may not be able to enforce
judgment and civil liabilities against them. Investors may not be able to
receive compensation for damages to the value of their investment caused by
wrongful actions by our Directors and officers.
Both of our Directors and
officers live outside of the United States.
Mr. Mohamad Abdel Hadi, our
President and Director, is a citizen and a resident of Israel, and all or a
substantial portion of his assets are located outside of the United
States.
Ms. Eiman Saleh, our
Treasurer and Director, is a citizen and a resident of Israel, and all or a
substantial portion of her assets are located outside of the United
States.
As a result, it may be
difficult for investors to enforce within the United States any judgments
obtained against our Directors or officers, or obtain judgments against them
outside of the United States that are predicated upon the civil liability
provisions of the securities laws of the United States or any state thereof.
Investors may not be able to receive compensation for damages to the value of
their investment caused by wrongful actions by our Directors and
officers.
Our officers and Directors
lack experience in and with publicly-traded companies.
While we rely heavily on our
President and Director, Mr. Mohamad Abdel Hadi, and our Treasurer and Director
Mr. Eiman Saleh, they have no experience serving as an officer or Director of a
publicly-traded company, or experience with the reporting requirements which
public companies are subject to. Additionally, neither Mohamad Abdel
Hadi nor Eiman Saleh have any experience with the financial accounting and
preparation requirements of financial statements which we will be required to
file on a quarterly and annual basis under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), once our Registration Statement, of which this
prospectus is a part is declared effective. We plan to initially rely
on our outside accountants and bookkeepers, as well as the consultants we have
engaged (including Ms. Ruthy Navon, our former Secretary, who we have entered
into a consulting agreement with as described below) to help us create a system
of accounting controls and procedures to maintain the Company’s accounting
records, until such time, if ever, as we generate the revenues required to
engage a separate Chief Accounting Officer, with accounting experience with
publicly reporting companies. Consequently, our operations, earnings
and ultimate financial success could suffer irreparable harm due to our
executives’ ultimate lack of experience with publicly-traded companies in
general and especially in connection with their lack of experience with the
financial accounting and preparation requirements of the Exchange
Act.
Because we have two
Directors, deadlocks may occur in our board’s decision-making process, which may
delay or prevent critical decisions from being made.
Since we currently have an
even number of Directors, deadlocks may occur when such Directors disagree on a
particular decision or course of action. Our Articles of Incorporation and
By-Laws do not contain any mechanisms for resolving potential
deadlocks. While our Directors are under a duty to act in the best
interest of our Company, any deadlocks may impede the further development of our
business in that such deadlocks may delay or prevent critical decisions
regarding our development.
Because our executive
officers are unable to devote their services to our Company on a full-time
basis, the performance of our business may suffer, our business could fail and
investors could lose their entire investment.
Mr. Mohamad Abdel Hadi, our
President and a Director, currently devotes approximately 20 hours per week to
our Company.
Ms. Eiman Saleh, our
Treasurer and a Director, currently devotes 20 hours per week to our
Company.
We depend heavily on the
services of our executive officers and Directors. As a result, the
management of our Company could under-perform, our business could fail and
investors could lose their entire investment.
10
Shareholders who hold
unregistered shares of our common stock are subject to resale restrictions
pursuant to Rule 144, due to our status as a “shell
company.”
Pursuant to Rule 144 of the
Securities Act of 1933, as amended (“Rule 144”), a “shell company” is defined as
a company that has no or nominal operations; and, either no or nominal assets;
assets consisting solely of cash and cash equivalents; or assets consisting of
any amount of cash and cash equivalents and nominal other assets. As
such, we are a “shell company” pursuant to Rule 144, and as such, sales of our
securities pursuant to Rule 144 are not able to be made until 1) we have ceased
to be a “shell company; 2) we are subject to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, and have filed all of our required
periodic reports for at least the previous one year period prior to any sale
pursuant to Rule 144; and a period of at least twelve months has elapsed from
the date “Form 10 information” has been filed with the Commission reflecting the
Company’s status as a non-“shell company.” Because none of our
non-registered securities can be sold pursuant to Rule 144, until at least a
year after we cease to be a “shell company”, any non-registered securities we
sell in the future or issue to consultants or employees, in consideration for
services rendered or for any other purpose will have no liquidity until and
unless such securities are registered with the Commission and/or until a year
after we cease to be a “shell company” and have complied with the other
requirements of Rule 144, as described above. As a result, it may be
harder for us to fund our operations and pay our consultants with our securities
instead of cash. Furthermore, it will be harder or us to raise
funding through the sale of debt or equity securities unless we agree to
register such securities with the Commission, which could cause us to expend
additional resources in the future. Our status as a “shell company”
could prevent us from raising additional funds, engaging consultants, and using
our securities to pay for any acquisitions (although none are currently
planned), which could cause the value of our securities, if any, to decline in
value or become worthless.
Because our executive
officers have little experience or technical training in the development,
maintenance and marketing of internet websites or in operating businesses that
license programs or services over the internet, we may make inexperienced or
uninformed decisions that will have bad results for us.
Our executive officers have
limited experience in the development, maintenance and marketing of internet
websites or in operating businesses that market programs or services over the
internet. Due to their lack of experience in these areas, our
executive officers could make the wrong decisions regarding the development,
operation and marketing of our website and the operation of our business, which
could lead to irreparable damage to our business. Consequently, our
operations could suffer irreparable harm from mistakes made by our executive
officers and we may have to suspend or cease operations, which could cause
investors to lose their entire investment.
Because we depend heavily on
our executive officers, the loss of either person will have a substantial
negative effect on our business and may cause our business to
fail.
We depend entirely on our
executive officers for all of our operations. The loss of either person will
have a substantial negative effect on us and may cause our business to fail. Our
executive officers did not receive any compensation for their services and it is
highly unlikely that they will receive any compensation unless and until we
generate substantial revenues.
We do not currently have any
employment agreements or maintain key person life insurance policies on our
executive officers. If our executive officers do not devote sufficient time
towards our business, we may never be able to effectuate our business
plan.
Shareholders may be diluted
significantly through our efforts to obtain financing and satisfy obligations
through the issuance of additional shares of our common
stock.
We have no committed source
of financing. Wherever possible, our Board of Directors will attempt to use
non-cash consideration to satisfy obligations. In many instances, we believe
that the non-cash consideration will consist of restricted shares of our common
stock. Our Board of Directors has authority, without action or vote of the
shareholders, to issue all or part of the authorized but unissued shares of
common stock. In addition, if a trading market develops for our common stock, we
may attempt to raise capital by selling shares of our common stock, possibly at
a discount to market. These actions will result in dilution of the
ownership interests of existing shareholders, may further dilute common stock
book value, and that dilution may be material. Such issuances may also serve to
enhance existing management’s ability to maintain control of the Company because
the shares may be issued to parties or entities committed to supporting existing
management.
Nevada law and our articles
of incorporation authorize us to issue shares of stock, which shares may cause
substantial dilution to our existing shareholders.
We have authorized capital
stock consisting of 100,000,000 shares of common stock, $0.0001 par value per
share and 50,000,000 shares of preferred stock, $0.0001 par value per
share. As of the date of this prospectus, we have 4,850,000 shares of
common stock issued and outstanding and – 0 – shares of Preferred Stock issued
and outstanding. As a result, our Board of Directors has the ability
to issue a large number of additional shares of common stock without shareholder
approval, which if issued could cause substantial dilution to our then
shareholders. Additionally, shares of Preferred Stock may be issued
by our Board of Directors without shareholder approval with voting powers, and
such preferences and relative, participating, optional or other special rights
and powers as determined by our Board of Directors, which may be greater than
the shares of common stock currently outstanding. As a result, shares
of Preferred Stock may be issued by our Board of Directors which cause the
holders to have super majority voting power over our shares, provide the holders
of the Preferred Stock the right to convert the shares of Preferred Stock they
hold into shares of our common stock, which may cause substantial dilution to
our then common stock shareholders and/or have other rights and preferences
greater than those of our common stock shareholders. Investors should keep in
mind that the Board of Directors has the authority to issue additional shares of
common stock and Preferred Stock, which could cause substantial dilution to our
existing shareholders. Additionally, the dilutive effect of any
Preferred Stock, which we may issue may be exacerbated given the fact that such
Preferred Stock may have super majority voting rights and/or other rights or
preferences which could provide the preferred shareholders with voting control
over us subsequent to this offering and/or give those holders the power to
prevent or cause a change in control. As a result, the issuance of
shares of common stock and/or Preferred Stock may cause the value of our
securities to decrease and/or become worthless.
11
Risks
Related to Developing our Software
Schools might not use our
web-based School Chat Software in a manner sufficient to allow us to generate a
profit.
The market for online school
chat software is new and emerging. Schools have not generally used
the Internet or web-based program solutions for chat purposes to date. We cannot
be certain that the market will continue to develop and grow or that schools
will elect to use any of our web-based school chat software rather than continue
to use pre-existing chat software in Facebook and other social media programs,
or otherwise attempt to develop program solutions internally or use standardized
solutions. Schools that have already invested substantial resources in other
chat methods may be reluctant to use the internet to supplement their existing
systems or methods. In addition, increasing concerns about fraud, privacy,
reliability and other issues might cause schools not to adopt the internet as a
method for communication. If demand for and market acceptance of internet-based
products for schools does not occur we might not recapture our investment in
this area or grow our business as we expect. On the other hand, even if schools
increasingly use the internet for chat and communication functions, if we fail
to develop and offer products that meet customer needs in this area, we could
lose market share.
Because we may not be
successful in further developing a software program that will achieve market
acceptance, we may not be able to achieve profitable
operations.
The success or failure of
developing and marketing the web-based School Chat Software depends in large
part on its desirability and ease of application in the target market. We cannot
be sure that our development efforts will produce a software program that will
fulfill the needs of and appeal to our planned customers and
clients.
This industry is
characterized by technological change, frequent product introductions and
evolving industry standards. Our success will depend, to a significant extent,
on our ability to introduce upgrades or new programs to satisfy an expanding
range of customer needs and achieve market acceptance.
Because we
may never be able to achieve sales revenues sufficient to become profitable, we
could experience continual losses and eventually fail in our business
plan.
There can be no assurance
that our program will achieve a level of market acceptance that will make us
profitable. We believe that the acceptance of our program will depend on our
ability to:
·
|
Develop
a user-friendly software program that appeals to our potential clients and
customers.
|
|
·
|
Effectively
market our software program through our website as well as
catalogues.
|
|
·
|
Price
and license the software program (and other products we may plan to make
available in the future through our web site) in a manner that is
appealing to potential customers.
|
|
·
|
Develop
and maintain a favorable reputation among our potential clients and
customers.
|
|
·
|
Develop
brand recognition.
|
|
·
|
Have
the financial ability to withstand downturns in the general economic
environment or conditions that would slow the licensing of our software
program.
|
Commerce over the internet is
an emerging market that is characterized by rapid changes in customer
requirements, frequent introductions of new and enhanced products and services,
and continuing and rapid technological advancement.
To compete successfully in
this emerging market, we must continue to design, develop, and sell new and
enhanced program and services that provide increasingly higher levels of
performance and reliability at an acceptable and reasonable
cost.
The planned software program
and services must take advantage of technological advancements and changes, and
respond accordingly to new and changing customer requirements. Our success in
designing, developing, and selling such program and services will depend on a
variety of factors, including:
12
·
|
Success
of promotional and marketing efforts;
|
|
·
|
The
identification of market demands for new or upgraded software programs and
services;
|
|
·
|
Timely
implementation of software program and services
offerings;
|
|
·
|
Software
program and service performance; and
|
|
·
|
Cost-effective
software programs and services.
|
Protecting our Proprietary
Technology and Other Intellectual Property Rights
If we are unable to protect
our proprietary technology and other intellectual property rights, our ability
to compete in the marketplace may be substantially reduced.
If we are unable to protect
our intellectual property, our competitors could use our intellectual property
to market a software program similar to ours, which could decrease demand for
our software program, thus decreasing our revenues, if any. We plan to rely on a
combination of copyright, trademark and trade secret laws to protect our
intellectual property rights. These protections may not be adequate to prevent
our competitors from copying or reverse-engineering our planned web-based
communication program.
In addition, our competitors
may independently develop technologies that are substantially equivalent or
superior to our technology in the future. To protect our trade secrets and other
proprietary information, we plan to require employees, consultants, advisors and
collaborators to enter into confidentiality agreements. These agreements may not
provide meaningful protection for our trade secrets, know-how or other
proprietary information in the event of any unauthorized use, misappropriation
or disclosure of such trade secrets, know-how or other proprietary information.
Existing copyright laws afford only limited protection for our intellectual
property rights and may not protect such rights in the event competitors
independently develop similar programs. Policing unauthorized use of our
products is very difficult, and litigation could become necessary in the future
to enforce our intellectual property rights. Any policing or litigation could be
time consuming and expensive to resolve or prosecute, result in substantial
diversion of management attention and resources, and materially harm our
business or financial condition.
If a third party asserts that
we infringed upon its proprietary rights, we could be required to redesign our
planned program, pay significant royalties or enter into license
agreements.
Although presently we are not
aware of any such claims, a third party may assert that our planned technology
or technologies of entities we may acquire in the future violates its
intellectual property rights. As the number of programs in our market increases
and the functionality of those programs further overlap, we believe that
infringement claims will become more common. Any claims against us, regardless
of their merit, could:
Be
expensive and time consuming to defend;
|
|
···
|
Result
in negative publicity;
|
··
|
Force
us to stop licensing our planned program that incorporates the challenged
intellectual property;
|
·
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Require
us to redesign our planned program; and
|
·
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Require
us to enter into royalty or licensing agreements in order to obtain the
right to use necessary technologies, which may not be available on terms
acceptable to us, if at all.
|
We believe that any
successful challenge to our use of a trademark or domain name could
substantially diminish our ability to conduct business in a particular market or
jurisdiction and thus decrease any revenues and result in possible losses to our
business.
Regulatory and Legal
Risks
Because marketing and making
our software program available on the internet may expose us to regulatory and
legal issues, we may be forced out of business.
A range of exposures may
exist due to how we intend to market our software program. If we create and
utilize a web site and sell through the retail industry, as we plan to do,
online access through a company-operated web site and retail regulations
requires careful consideration of legal and regulatory compliance requirements
and issues. This may require extensive legal services that may become an
increased cost component when considering the development of our software
program and technologies.
13
Risks Related To
Competition
We face competition from
other businesses that currently market school chat and communication
software.
We face competition from
internet development companies for the products and software we plan to market
in the future. These competitors will possibly have longer operating histories,
superior brand recognition, greater marketing budgets, as well as existing
clients. Additionally, our competition may be able to employ full-time sales
personnel assigned to various markets and customers, which we will not have the
resources or funding to provide. Also, our competition may be able to invest
greater resources in the areas of technology development and research which will
allow them to be proactive in market changes, which could put us at a
disadvantage in the market place and prohibit us from generating
revenues.
Some of our competitors may
have significantly more financial resources, which could allow them to develop
programs that could render our software program inferior.
Our competition may have
programs or may develop programs that will render our planned software program
inferior. We will likely need to obtain and maintain certain advantages over our
competitors in order to be competitive, which require resources. There can be no
assurance that we will have sufficient financial resources to maintain our
research and development, marketing, sales and customer support efforts on a
competitive basis, or that we will be able to make the improvements necessary to
maintain a competitive advantage with respect to our
program.
Risks Related to the
Offering
The Securities and Exchange
Commission ("SEC") adopted Rule 405 of the Securities Act and Exchange Act Rule
12b-2 which defines a shell company as a registrant that has no or nominal
operations, and either (a) no or nominal assets; (b) assets consisting solely of
cash and cash equivalents; or (c) assets consisting of any amount of cash and
cash equivalents and nominal other assets. Our balance sheet states
that we have cash as our only asset, therefore we are defined as a shell
company. The new rules prohibit shell companies from using a Form S-8
to register securities pursuant to employee compensation
plans. However, the new rules do not prevent us from registering
securities pursuant to registration statements. Additionally, the new
rule regarding Form 8-K requires shell companies to provide more detailed
disclosure upon completion of a transaction that causes it to cease being a
shell company. We must file a current report on Form 8-K containing
the information required pursuant to Regulation S-K and in a registration
statement on Form 10, within four business days following completion of a
transaction together with financial information of the private operating company
acquired or that we merge with. In order to assist the SEC in the
identification of shell companies, we are also required to check a box on Form
10-Q and Form 10-K indicating that we are a shell company. To the
extent that we are required to comply with additional disclosure because we are
a shell company, we may be delayed in executing any mergers or acquiring other
assets that would cause us to cease being a shell company. The SEC
adopted a new Rule 144 effective February 15, 2008, which makes resales of
restricted securities by shareholders of a shell company more difficult. See
discussion under heading "Rule 144" below and the risk factor titled
Shareholders who hold unregistered shares of our common stock are subject to
resale restrictions pursuant to Rule 144, due to our status as a “shell
company.”
Because our stock price after
the offering could be below the offering price, our investors may never realize
any gain on their investments in our Company.
The offering price of our
common stock was arbitrarily determined by us and does not necessarily bear any
relationship to our book value, assets, financial condition, or to any other
established criteria of value. Our common stock price after the
offering could be below the offering price.
Because there is no public
market for our common stock, our stockholders may not be able to resell their
shares at or above the price at which they purchased their shares, or
at all.
There is currently no market
for our common stock and we can provide no assurance that a market will develop.
We are in the process of applying to the Over-The-Counter Bulletin Board,
through a market maker that is a licensed broker dealer, to allow the trading of
our common stock upon our becoming a reporting company. If for any
reason our common stock is not quoted on the OTC 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.
Even if a trading market
develops, we cannot predict how liquid that market might become. The initial
public offering price may not be indicative of prices that will prevail in the
trading market. The initial public offering price of the common stock
was determined by us arbitrarily. The price is not based on our
financial condition and prospects, market prices of similar securities of
comparable publicly-traded companies, certain financial and operating
information of companies engaged in similar activities to ours, or general
conditions of the securities market. The price may not be indicative
of the market price, if any, for the common stock in the trading market after
this offering. The market price of the securities offered herein, if
any, may decline below the initial public offering price. The trading
price of our common stock following the offering is therefore likely to be
highly volatile and could be subject to wide fluctuations in price in response
to various factors, some of which are beyond our control.
14
These factors
include:
·
|
Quarterly
variations in our results of operations (if any) or those of our
competitors;
|
|
·
|
Announcements
by us or our competitors of acquisitions, new programs, significant
contracts, commercial relationships or capital
commitments;
|
|
·
|
Disruption
to our operations;
|
|
·
|
Commencement
of, or our involvement in, litigation;
|
|
·
|
Any
major change in our board or management;
|
|
·
|
Changes
in governmental regulations or in the status of our regulatory approvals;
and
|
|
·
|
General
market conditions and other factors, including factors unrelated to our
own operating performance.
|
In addition, the stock market
in general has experienced extreme price and volume fluctuations that have often
been unrelated or disproportionate to the operating performance of such public
companies. Such fluctuations may be even more pronounced in the trading market
shortly following this offering. These broad market and industry factors may
seriously harm the market price of our common stock, regardless of our actual
operating performance. In addition, in the past, following periods of volatility
in the overall market and the market price of a company’s securities, securities
class action litigation has often been instituted against these
companies. This type of litigation, if instituted against us, could
result in substantial costs and a diversion of our management’s attention and
resources.
Because future sales by our
stockholders could cause our stock price to decline, our investors may lose
money on the purchase of our stock.
No predictions can be made of
the effect, if any, that market sales of shares of our common stock or the
availability of such shares for sale will have on the market price prevailing
from time to time. Nevertheless, sales of significant amounts of our common
stock could adversely affect the prevailing market price of the common stock, as
well as impair our ability to raise capital through the issuance of additional
equity securities.
State securities laws may
limit secondary trading, which may restrict the states in which you can sell the
shares offered by this prospectus.
If you purchase shares of our
common stock sold in this offering, you may not be able to resell the shares in
any state unless and until the shares of our common stock are qualified for
secondary trading under the applicable securities laws of such state, or there
is confirmation that an exemption, such as listing in certain recognized
securities manuals, is available for secondary trading in such state. There can
be no assurance that we will be successful in registering or qualifying our
common stock for secondary trading, or identifying an available exemption for
secondary trading in our common stock in every state. If we fail to register or
qualify, or to obtain or verify an exemption for the secondary trading of our
common stock in any particular state, the shares of common stock could not be
offered or sold to, or purchased by, a resident of that state. In the event that
a significant number of states refuse to permit secondary trading in our common
stock, the market for the common stock will be limited which could drive down
the market price of our common stock and reduce the liquidity of the shares of
our common stock and limit a stockholder's ability to resell shares of our
common stock at all or at current market prices, which could increase a
stockholder's risk of losing some or all of their
investment.
The initial offering price of
this offering has been arbitrarily determined by our
management.
The initial offering price of
the shares registered in this Registration Statement has been arbitrarily
determined by us. The offering price of the shares bears no
relationship to our assets, earnings or book value, or any other objective
standard of value. Because of this, the actual value of our
securities may be significantly less than the offering price of $0.05 per share,
which selling shareholders will be required to sell their shares at prior to us
obtaining a market for our common stock. As a result, if you purchase
shares of our common stock at the fixed offering price of $0.05 per share, the
value of your securities may decline in value or have significantly less value
when you attempt to sell such shares.
15
Because we will be subject to
the “Penny Stock” rules once our shares are quoted on the over-the-counter
bulletin board, the level of trading activity in our stock may be
reduced.
If a trading market does
develop for our stock, it is likely we will be subject to the regulations
applicable to "Penny Stocks." The regulations of the SEC promulgated under the
Exchange Act require additional disclosure relating to the market for penny
stocks in connection with trades in any stock defined as a penny stock. The SEC
regulations define penny stocks to be any non-NASDAQ equity security that has a
market price of less than $5.00 per share, subject to certain exceptions. Unless
an exception is available, those regulations require the broker-dealer to
deliver, prior to any transaction involving a penny stock, a standardized risk
disclosure schedule prepared by the SEC, to 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, monthly account statements
showing the market value of each penny stock held in the purchaser’s account, to
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, if any, in the secondary market for a stock that
becomes subject to the 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 market investor interest in and limit the
marketability of our common stock.
In addition to the "penny
stock" rules promulgated by the Securities and Exchange Commission, FINRA has
adopted rules that require that in recommending an investment to a customer, a
broker-dealer must have reasonable grounds for believing that the investment is
suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customer's financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, FINRA believes that there is a high probability that speculative
low priced securities will not be suitable for at least some customers. The
FINRA requirements make it more difficult for broker-dealers to recommend that
their customers buy our common stock, which may limit your ability to buy and
sell our stock.
If the registration
statement, of which this prospectus is a part becomes effective, we will become
a public reporting company, and will incur significant increased costs in
connection with compliance with Section 404 of the Sarbanes Oxley Act, and our
management will be required to devote substantial time to new compliance
initiatives.
If the Registration
Statement, of which this prospectus is a part, becomes effective, we will become
subject to among other things, the periodic reporting requirements of Section
15(d) of the Securities Exchange Act of 1934, as amended, and will incur
significant legal, accounting and other expenses in connection with such
requirements. The Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley
Act") and new rules subsequently implemented by the SEC have imposed various new
requirements on public companies, including requiring changes in corporate
governance practices. As such, our management and other personnel will need to
devote a substantial amount of time to these new compliance initiatives.
Moreover, these rules and regulations will increase our legal and financial
compliance costs and will make some activities more time-consuming and costly.
In addition, the Sarbanes-Oxley Act requires, among other things, that we
maintain effective internal controls for financial reporting and disclosure of
controls and procedures. Our compliance with Section 404 will require that we
incur substantial accounting expense and expend significant management efforts.
We currently do not have an internal audit group, and we will need to hire
additional accounting and financial staff with appropriate public company
experience and technical accounting knowledge. Moreover, if we are not able to
comply with the requirements of Section 404 in a timely manner, or if we or our
independent registered public accounting firm identifies deficiencies in our
internal controls over financial reporting that are deemed to be material
weaknesses, the market price of our stock could decline, and we could be subject
to sanctions or investigations by the SEC or other regulatory authorities, which
would require additional financial and management resources.
Please read this prospectus
carefully. You should rely only on the information contained in this
prospectus. We have not authorized anyone to provide you with
different information. You should not assume that the information
provided by the prospectus is accurate as of any date other than the date on the
front of this prospectus.
16
FORWARD-LOOKING
STATEMENTS
This prospectus contains
forward-looking statements that involve risks and uncertainties. We
use words such as anticipate, believe, plan, expect, future, intend and similar
expressions to identify such forward-looking statements. The actual
results could differ materially from our forward-looking
statements. Our actual results are most likely to differ materially
from those anticipated in these forward-looking statements for many reasons,
including the risks faced by us described in this Risk Factors section and
elsewhere in this prospectus.
USE OF
PROCEEDS
The selling stockholders are
selling shares of common stock covered by this prospectus for their own
account. We will not receive any of the proceeds from the resale of
these shares. We have agreed to bear the expenses relating to the
registration of the shares for the selling stockholders.
DETERMINATION OF OFFERING
PRICE
There has been no public
market for our common shares. The price of the shares was arbitrarily determined
at $0.05 per share. We believe that this price reflects the
appropriate price that a potential investor would be willing to invest in us at
this initial stage of our development.
The price we arbitrarily
determined bears no relationship whatsoever to our business plan, the price paid
for our shares by our founders, our assets, earnings, book value or any other
criteria of value. The offering price should not be regarded as an indicator of
the future market price of the securities, which is likely to
fluctuate.
DILUTION
The common stock to be sold
by the selling stockholders is common stock that is currently issued and
outstanding. Accordingly, there will be no dilution to our existing
stockholders.
SELLING
STOCKHOLDERS
The selling stockholders
named in this prospectus are offering all of the 850,000 shares of common
stock offered through this prospectus. The selling stockholders are all non-U.S.
persons who acquired the 850,000 shares of common stock from us in a series of
Regulation S private placement transactions in July 2010.
The following table provides
as of November 4 , 2011 information regarding the
beneficial ownership of our common stock held by each of the selling
stockholders, including:
·
|
The
number of shares beneficially owned by each selling stockholder prior to
this offering;
|
|
·
|
The
total number of shares to be offered by each selling
stockholder;
|
|
·
|
The
total number of shares beneficially owned by each selling stockholder upon
completion of the offering; and
|
|
·
|
The
percentage owned by each upon completion of the
offering.
|
17
Name
of Beneficial Owner(1)
|
Shares
Owned Prior to This Offering
|
Total
Number of Shares to be Offered for Selling Shareholder
Account
|
Total
Shares to be Owned Upon Completion of this Offering
|
Percent
Owned Upon Completion of this Offering(2)
|
||||
Abd
El Hadi Behal
|
20,000
|
20,000
|
0
|
0%
|
||||
Abd
El Hadi Chitan
|
20,000
|
20,000
|
0
|
0%
|
||||
Abd
El Hadi Gehan
|
20,000
|
20,000
|
0
|
0%
|
||||
Abd
El Hadi Siham
|
20,000
|
20,000
|
0
|
0%
|
||||
Abo
Arisha Eklas
|
30,000
|
30,000
|
0
|
0%
|
||||
Abo
Slah Laila
|
30,000
|
30,000
|
0
|
0%
|
||||
Abo
Salah Mohmad
|
30,000
|
30,000
|
0
|
0%
|
||||
Bader
Mahmud
|
30,000
|
30,000
|
0
|
0%
|
||||
Bader
Muhamad
|
30,000
|
30,000
|
0
|
0%
|
||||
Dahood
Asmahan
|
20,000
|
20,000
|
0
|
0%
|
||||
Dasoka
Malki
|
20,000
|
20,000
|
0
|
0%
|
||||
Dasuka
Fouad
|
40,000
|
40,000
|
0
|
0%
|
||||
Dasuka
Yousef
|
40,000
|
40,000
|
0
|
0%
|
||||
El
Anabosi haleima
|
20,000
|
20,000
|
0
|
0%
|
||||
El
Anabosi Omar
|
20,000
|
20,000
|
0
|
0%
|
||||
El
Khatib Kamal
|
20,000
|
20,000
|
0
|
0%
|
||||
El
Khatib Shduan
|
20,000
|
20,000
|
0
|
0%
|
||||
Hasadia
Sameer
|
30,000
|
30,000
|
0
|
0%
|
||||
Husein
Emad
|
20,000
|
20,000
|
0
|
0%
|
Hussein
Fatema
|
20,000
|
20,000
|
0
|
0%
|
||||
Ibrahim
Wahid Mohd Merai
|
20,000
|
20,000
|
0
|
0%
|
||||
Marei
Fatma
|
20,000
|
20,000
|
0
|
0%
|
||||
Marei
Muneir
|
20,000
|
20,000
|
0
|
0%
|
||||
Maree
Abere
|
20,000
|
20,000
|
0
|
0%
|
||||
Salah
Ataf
|
20,000
|
20,000
|
0
|
0%
|
||||
Salah
Bilal
|
20,000
|
20,000
|
0
|
0%
|
||||
Salah
Fardos
|
20,000
|
20,000
|
0
|
0%
|
||||
Salah
Haydar
|
20,000
|
20,000
|
0
|
0%
|
||||
Salah
Hosam
|
20,000
|
20,000
|
0
|
0%
|
||||
Salah
Mirvut
|
20,000
|
20,000
|
0
|
0%
|
||||
Salah
Osama
|
20,000
|
20,000
|
0
|
0%
|
||||
Saleh
Hamoda
|
20,000
|
20,000
|
0
|
0%
|
||||
Shtroba
Dawaby
|
30,000
|
30,000
|
0
|
0%
|
||||
Tayser
M.H yasin
|
20,000
|
20,000
|
0
|
0%
|
||||
Zeid
Ahmed
|
30,000
|
30,000
|
0
|
0%
|
||||
Zeid,
Mahira
|
30,000
|
30,000
|
0
|
0%
|
||||
TOTAL
|
850,000
|
NIL
|
Notes
(1)
|
The
named party beneficially owns and has sole voting and investment power
over all shares or rights to these shares, unless otherwise shown in the
table. The numbers in this table assume that none of the selling
stockholders sells shares of common stock not being offered in this
prospectus or purchases additional shares of common
stock.
|
(2)
|
Assumes
all shares offered herein are sold.
|
None of the selling
shareholders; (1) has had a material relationship with us other than as a
shareholder at any time within the past three years; (2) has been one of our
officers or Directors; or (3) are broker-dealers or affiliates of
broker-dealers.
The selling shareholders and
any broker or dealers who act in connection with the sale of the shares may be
deemed to be “underwriters” within the meaning of the Securities Act of 1933, as
amended, and any commissions received by them and any profit on any resale of
the shares as a principal might be deemed to be underwriting discounts and
commissions under the Securities Act.
18
PLAN OF
DISTRIBUTION
This prospectus relates to
the registration of 850,000 common shares on behalf of the selling
stockholders.
No Current Market for our
Shares
There is currently no market
for our securities. Our common stock is not traded on any exchange or on the
over-the-counter market. We are in the process of applying to the
Over-The-Counter Bulletin Board, through a market maker that is a licensed
broker dealer, to allow the trading of our common stock upon our becoming a
reporting company. We cannot give you any assurance that the shares you purchase
will ever have a market value or that if a market for our shares ever develops,
that you actually will be able to sell your shares in this
market. Further, it could take several months before the market
maker’s listing application for our shares is approved, if such approval is
obtained. In addition, even if a public market for our shares develops, there is
no assurance that a secondary public market will be
sustained.
The OTC Bulletin Board is
maintained by the Financial Industry Regulatory Authority (FINRA). The
securities traded on the Bulletin Board are not listed or traded on the floor of
an organized national or regional stock exchange. Instead, these securities
transactions are conducted through a telephone and computer network connecting
dealers in stocks. Over-the-counter stocks are traditionally stocks of smaller
companies that do not meet the financial and other listing requirements of a
regional or national stock exchange.
Even if our shares are quoted
on the OTC Bulletin Board, a purchaser of our shares may not be able to resell
the shares. Broker-dealers may be discouraged from effecting transactions in our
shares because they will be considered penny stocks and will be subject to the
penny stock rules. Rules 15g-1 through 15g-9 promulgated under the Securities
Exchange Act of 1934, as amended, impose sales practice and disclosure
requirements on FINRA brokers-dealers who make a market in a "penny stock." A
penny stock generally includes any non-NASDAQ equity security that has a market
price of less than $5.00 per share. Under the penny stock regulations, a
broker-dealer selling a penny stock to anyone other than an established customer
or "accredited investor" (generally, an individual with net worth in excess of
$1,000,000 or an annual income exceeding $200,000, or $300,000 together with his
or her spouse) must make a special suitability determination for the purchaser
and must receive the purchaser's written consent to the transaction prior to
sale, unless the broker-dealer or the transaction is otherwise exempt. In
addition, the penny stock regulations require the broker-dealer to deliver,
prior to any transaction involving a penny stock, a disclosure schedule relating
to the penny stock market, unless the broker-dealer or the transaction is
otherwise exempt. A broker-dealer is also required to disclose commissions
payable to the broker-dealer and the registered representative and current
quotations for the securities. Finally, a broker-dealer is required to send
monthly statements disclosing recent price information with respect to the penny
stock held in a customer's account and information with respect to the limited
market in penny stocks.
The additional sales practice
and disclosure requirements imposed upon broker-dealers may discourage
broker-dealers from effecting transactions in our shares, which could severely
limit the market liquidity of the shares and impede the sale of our shares in
the secondary market, assuming one develops.
The selling stockholders may
sell some or all of their shares at a fixed price of $0.05 per share until our
shares are quoted on the OTC Bulletin Board and thereafter at prevailing market
prices or privately negotiated prices. Sales by selling stockholders
must be made at the fixed price of $0.05 until a market develops for the
stock.
The shares may be sold or
distributed from time to time by the selling stockholders or by pledgees, donees
or transferees of, or successors in interest to, the selling stockholders,
directly to one or more purchasers (including pledgees) or through brokers or
dealers who act solely as agents. The distribution of the shares may be effected
in one or more of the following methods:
o
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits the purchaser;
|
o
|
block
trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
o
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for its
account;
|
o
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
o
|
privately-negotiated
transactions;
|
o
|
broker-dealers
may agree with the Selling Security Holders to sell a specified number of
such shares at a stipulated price per share;
|
o
|
a
combination of any such methods of sale; and
|
o
|
Any
other method permitted pursuant to applicable
law.
|
19
The selling stockholders may
also sell shares under Rule 144 under the Securities Act of 1933, as amended
(the “Securities Act”), if available, rather than under this
prospectus.
In addition, the selling
stockholders may enter into hedging transactions with broker-dealers who may
engage in sales in the course of hedging the positions they assume with the
selling stockholders. The selling stockholders may also enter into option or
other transactions with broker-dealers that require the delivery by such
broker-dealers of the shares, which shares may be resold thereafter pursuant to
this prospectus.
Brokers, dealers, or agents
participating in the distribution of the shares may receive compensation in the
form of discounts, concessions or commissions from the selling stockholders or
the purchasers of shares for whom such broker-dealers may act as agent (which
compensation as to a particular broker-dealer may be in excess of customary
commissions). Neither the selling stockholders nor we can presently estimate the
amount of such compensation. We know of no existing arrangements between the
selling stockholders and any other stockholder, broker, dealer or agent relating
to the sale or distribution of the shares. We do not anticipate that either our
stockholders or we will engage an underwriter in the selling or distribution of
our shares.
We will not receive any
proceeds from the sale of the shares of the selling stockholders pursuant to
this prospectus. We have agreed to bear the expenses of the registration of the
shares, including legal and accounting fees.
The selling stockholders
named in this prospectus must comply with the requirements of the Securities Act
and the Exchange Act in the offer and sale of the common stock being offered by
them. The selling stockholders and any broker-dealers who execute sales for the
selling stockholders may be deemed to be an “underwriter” within the meaning of
the Securities Act in connection with such sales. In particular, during such
times as the selling stockholders may be deemed to be engaged in a distribution
of the common stock, and therefore be considered to be an underwriter, they must
comply with applicable laws and may among other things:
·
|
Not
engage in any stabilization activities in connection with our common
stock;
|
|
·
|
Furnish
each broker or dealer through which common stock may be offered, such
copies of this prospectus from time to time, as may be required by such
broker or dealer; and
|
|
·
|
Not
bid for or purchase any of our securities or attempt to induce any person
to purchase any of our securities permitted under the Exchange
Act.
|
Any commissions received by
broker-dealers and any profit on the resale of shares sold by them while acting
as principals might be deemed to be underwriting discounts or commissions under
the Securities Act.
Broker-dealers engaged by the
selling stockholders may arrange for other broker-dealers to participate in
sales. Broker-dealers may receive commissions or discounts from the selling
stockholders (or, if any broker-dealer acts as agent for the purchaser of
shares, from the purchaser) in amounts to be negotiated. It is not expected that
these commissions and discounts will exceed what is customary in the types of
transactions involved.
The selling stockholders may
be deemed to be an "underwriter" within the meaning of the Securities Act in
connection with such sales. Therefore, any commissions received by such
broker-dealers or agents and any profit on the resale of the shares purchased by
them may be deemed to be underwriting commissions or discounts under the
Securities Act.
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, direct or indirect, in the
registrant or any of its parents or subsidiaries. Nor was any such person
connected with the registrant or any of its parents or subsidiaries as a
promoter, managing or principal underwriter, voting trustee, Director, officer,
or employee.
Certain legal matters with
respect to the issuance of shares of common stock offered hereby will be passed
upon by The Loev Law Firm, PC, Bellaire, Texas.
The financial statements of
Inventtech Inc. included in this registration statement have been audited by GBH
CPAs, PC, of 6002 Rogerdale, Suite 500, Houston, Texas 77072, for the
period set forth in their report (which contains an explanatory paragraph
regarding our Company's ability to continue as a going concern) appearing
elsewhere 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.
20
DESCRIPTION OF
BUSINESS
We are in the business of
developing a web-based peer-to-peer (i.e., person to person) chat software for
use by Schools (the “School Chat Software”). This software is planned
to allow students to stay connected to their school friends and teachers in a
secure and controlled environment, free from outside influences. The
software is planned to allow the students to chat in one or more school
chat rooms and share content, such as pictures, videos and music. The
School Chat Software is also planned to act as a database, or yearbook, so that
students will be able to access their treasured memories in the future, and we
believe will help teachers and students build and maintain relationships over
time.
For the school, the web-based
software is planned to provide the services described above for the students,
while also providing an option for the school to track the students and their
activities. This will allow schools to keep tabs on students, and to monitor
their experiences. Teachers will be able to post homework, tutorials,
and provide a place where students can get information about events and
plans.
Once we set up our website
and complete our School Chat Software development, which
we hope to complete by the beginning of March
201 2 , schools will be able to
utilize our School Chat Software directly from our website. The School Chat
Software, which requires students to identify themselves, is planned to offer
school tutoring rooms, and database rooms for storing and accessing articles and
homework. We also plan to offer schools web-based database management
software (which is included in the software), to manage student’s activities
using the School Chat Software. The anticipated cost of the School
Chat Software will be $69 per month, or a discounted yearly rate of $600 per
year, which we anticipate will be the primary source of our revenues in the
future. We estimate that the completion of our website, database program, and
School Chat software will cost approximately $12,000.
To date, we have never had
any customers or revenues and there can be no assurance that we will ever
achieve any profitability or revenues. We
estimate that our current cash balances will be extinguished by December
2011 provided we
do not have any unanticipated expenses. We anticipate the need for approximately
$80,000 to support our operations over the next twelve months (which includes
approximately $12,000 to complete the development of our website and software,
approximately $23,000 of costs related with the preparation, filing and related
costs of the Registration Statement, of which this Prospectus is a part,
approximately $30,000 of expenses which we anticipate incurring in connection
with the preparation and filing of our periodic and current reports and various
transfer agent fees, and an additional $15,000 of other various administrative
fees during the twelve months following the effectiveness of our Registration
Statement, as described in greater detail below under “Estimated Expenses for
the Next Twelve Months”). Although there can be no assurance at
present, we
hope to be in a position to generate revenues by
December 2011;
however, we will still need to raise additional funding to support our
operations and pay expenses (as described in greater detail below under
“Liquidity and Capital Resources”).
STATUS OF SOFTWARE
DEVELOPMENT
We are currently developing a
database and software marketing School Chat Software for use by educational
institutions and schools. The Company hopes to have the website, database
and software active and running by March
201 2 .
Steps
Required For Commercial Sale of School Chat Software
|
Percent
Accomplished As of Filing
|
Estimated
Remaining Cost
|
Estimated
Completion Date
|
Design
Website Layout
|
80%
|
$1,000
|
March
2012
|
Design
Marketing Materials , News Pages, Blog, Digital Shopping
Cart
|
50%
|
$4,000
|
March
2012
|
Finalize
School Chat Software, Chat Templates, Web Access
Capabilities
|
70%
|
$2,000
|
March
2012
|
Complete
Coding of Databases
|
50%
|
$5,000
|
March
2012
|
$12,000
|
21
Industry
Background
Internet-based interaction
has grown rapidly in recent years. Our School Chat Software plans to take
advantage of the increasingly advanced broadband technology to allow
peer-to-peer chat and communication between students at educational
institutions.
Industry Estimates of the
Growing Internet Population and Internet Penetration Levels
Based on a research report
prepared by Morgan Stanley:
- We believe that the
internet is still in the early stages of becoming a central communications,
information, commerce, and entertainment medium. We estimate there are over 750+
million internet users worldwide using the internet an estimated average of
30-45 minutes per day.
- We expect the number
of internet users to grow at 10-15% annually for the next several years, with
stronger growth in non-US markets.
Source: Mary
Meeker, Brian Pitz, and Brian Fitzgerald, "Internet Trends," (April 2004) a
Morgan Stanley Research Report.
Growth of Electronic
Commerce
Forrester Research believes
that electronic commerce activity in the United States, fuelled by a steady
stream of new online shoppers and new product category sales, will grow at a
compounded annual growth rate of approximately 10% from 2009 to
2014.
US online retail reached
$155.2 billion in 2009 and is projected to grow to $248.7 billion by
2014.
(Source: Forrester Research,
US Online Retail Forecast: 2009 to 2014, “Executive
Summary”, March
5, 2010, Forrester Research, Inc., last reviewed July 27,
2010).
Marketing
Strategy
Once completed, we plan to
market our School Chat Software with a web-based marketing
campaign. We have budgeted $4,000 for this web-based campaign, which
will include the following:
E-mail
Marketing
We have budgeted $2,000 from
our marketing budget for an e-mail campaign. Emails will be sent only to those
which have asked for or shown an interest in receiving information about our
program.
Catalogue
Advertising
One of our planned sources
for advertising our School Chat Software is anticipated to be placing ads in
software catalogues. These catalogues are distributed to schools across the
United States and Canada.
We budgeted $2,000 from our
marketing budget for program distributor catalogue advertising. We
intend to place ads in catalogues that specifically target the non-profit
sector.
Submission to Directories and
Search Engines
We plan to submit our website
to directories and search engines in order to increase our presence on the
internet, as well as to get better rankings on search results. There are many
directories to which we plan to submit our website for free, such as
Google, Yahoo, AltaVista, and Excite. We also believe that there are numerous
directories where we can list our program at no cost to the
Company.
Distribution of
Program
Moving forward, we plan to
price our School Chat Software at a monthly price of $69 and a discounted annual
price of $600, which would include the use and maintenance of our planned
web-based database. According to our business model, the majority of our
revenues should come from online sales of our School Chat
Software.
22
When our program is ready for
commercial sale, we plan to enter into an agreement with PayPal 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. PayPal accepts all major credit cards (Visa, MasterCard,
Discover, American Express, ECheque, and transfer of funds to and from bank
accounts).
Sources and Availability of
Products and Supplies
We are developing our own
program and the distribution of the program and services will be primarily over
the internet. Our constraints are consistent with our ability to successfully
develop our software and maintain our database.
Dependence on One or a Few
Major Customers
We plan on selling our
program and services directly to our target school market over the internet. Our
program will be priced for mass market consumption. Therefore, we do not
anticipate dependence on one or a few major customers for at least the next 12
months or the foreseeable future.
Our Target
Market
We plan to market our
interactive software program to schools and educational institutions
worldwide.
According to the following
surveys in the United States, our target market in the United States alone is
very large:
According to the National
Center for Education Statistics, there were 98,916 operating public elementary
or secondary schools in the 2007–08 school year (National Center for Education
Statistics, “Number and Percentage Distribution of Public Elementary and
Secondary Schools and Enrollment, by Type and Enrollment Size of School:
2005-06, 2006-07, and 2007-2008”).
Additionally, the National
Center for Education Statistics reports there were 4,409 degree granting
postsecondary education facilities in the 2008–09 school year (National Center
for Education Statistics, “Degree-granting institutions, by control and type of
institution: Selected years, 1949-50 through 2008-09”).
The Council for American
Private Education cites that there are 33,740 operating private schools in the
United States. (Counsel for American Private Education, “Facts and
Studies”, Private Schools Statistics at a Glance, # of Schools
(2007-2008).
Based on the foregoing
information, we believe that if we are able to make our products attractive to
only a small percentage of our target market in North America we will be able to
generate the revenues we believe we require to sustain our operations. There can
be no assurance, however, that our products will appeal to our target
market.
Competition
Our competition derives
mainly from social networking companies such as Facebook, Google (which has a
built in chat program), AOL instant messenger, Yahoo messenger, ICQ messenger
and twitter. However, we believe we will be in a position to compete with these
pre-existing chat program companies as we plan to market our software directly
to schools and other educational institutions and because we do not believe that
any of our competitors offer the security and controlled environment that the
School Chat Software will offer. Additionally, the customer database is a unique
feature that will focus on smaller schools as well as large universities and
allow the monitoring of user accounts.
Intellectual
Property
The Company does not have any
patents, trademarks, licenses, or franchises. We are however, in the
process of developing a website, www.inventtech.com, which is under construction
as of the date of this prospectus, and which contains information we do not
desire to be incorporated by reference herein.
It is our intention, in due
course, subject to legal advice, and available funding, to apply for trademark
protection and/or copyright protection in the United States and other
jurisdictions.
We intend to aggressively
assert our trademark rights and copyright laws, if any, moving forward, to
protect our intellectual property, including product design, product research
and concepts and recognized trademarks. These rights are protected through the
acquisition of trademark registrations, the maintenance of copyrights, and,
where appropriate, litigation against those who are, in our opinion, infringing
these rights.
23
While there can be no
assurance that registered trademarks and copyrights we plan to apply for in the
future, will protect our proprietary information, we intend to assert our
intellectual property rights against any infringer. Although any assertion of
our rights can result in a substantial cost to, and diversion of effort by, our
Company, management believes that the protection of our intellectual property
rights is a key component of our operating strategy.
Regulatory
Matters
We are unaware of and do not
anticipate having to expend significant resources to comply with any
governmental regulations of our program. We are subject to the laws and
regulations of those jurisdictions in which we plan to sell our product, which
are generally applicable to business operations, such as business licensing
requirements, income taxes and payroll taxes. In general, the development and
operation of our website is not subject to special regulatory or supervisory
requirements.
Employees and Independent
Contractors
Currently our only employees
are our two Directors and two officers (as described below under “Directors,
Executive Officers, Promoters and Control Persons”). We do not expect any other
material changes in the number of employees over the next 12
months.
Additionally, the Company
entered into an independent contractor agreement in February 2011 with Darryl
Francis, who has agreed to assist with bookkeeping and accounting duties. The
Company has agreed to pay Mr. Francis $20 USD per hour until March 2011 and then
$23 USD per hour for services rendered after that date.
We have an independent
contractor agreement (which we entered into in June 2010) in place with NR
Consulting Services, which is controlled by our former Secretary, Ruthy Navon,
who has agreed to assist the Company in connection with the steps required for
the Company to become a fully reporting company in the United States and to
obtain a listing on the Over-The-Counter-Bulletin Board, pursuant to which we
have agreed to pay her a flat fee of $5,000. Ms. Navon currently
assists various companies which have operations, assets and officers and
Directors located in Israel who desire to go public and become reporting
companies in the United States. She previously lived in Israel and was
referred to the Company’s management by her pre-existing relationships in
Israel. Ms. Navon assisted the Company in connection with engaging United
States legal counsel, independent auditors, the opening of bank accounts and
with obtaining a principal office location in the United States. Ms. Navon
also serves as a liaison between the Company’s officers and Directors in Israel
and the Company’s attorneys and auditors located in the United States. Ms.
Navon has also assisted and advised the Company’s officers and Directors with
information from her prior experience with publicly reporting companies in the
United States, and the steps, timing and process to become publicly traded in
the United States, as well as providing suggestions to the Company’s management
(based on her prior public company experience) on the terms of the Company’s
prior private placement offering and the capital structure of the Company.
Ms. Navon also served as the Company’s Secretary until June 2010, so that she
could enter into agreements for and open a bank account for the Company, as its
other officers and Directors are residents of and reside in Israel. Ms.
Navon does not own any interest, contingent or otherwise in the
Company. Ms. Navon’s biographical information is disclosed below
under “Directors, Executive Officers, Promoters and Control
Persons.”
Environmental
Laws
We have not incurred and do
not anticipate incurring any expenses associated with environmental
laws.
DESCRIPTION OF
PROPERTY
Our executive and principal
office is located at 1736 Angel Falls Street, Las Vegas,
Nevada 89142-1230. We lease the space pursuant to a Lease Agreement
which is in effect from May 1, 2010 to May
31, 201 2
(the
“Term”), subject to renewal with the mutual consent of the
parties. Total rent due under the lease for the Term was
$200. Pursuant to the Lease Agreement, we are provided the shared use
of the landlord’s residence for our principal office
location.
This location will serve as
our primary executive offices for the foreseeable future. We believe that our
office space and facilities are sufficient to meet our present needs and do not
anticipate any difficulty securing alternative or additional space, as needed,
on terms acceptable to us.
24
DESCRIPTION
OF SECURITIES
Common
Stock
We are authorized to issue
100,000,000 common shares with a par value of $0.0001 per share. As of
November 4 , 2011, there were 4,850,000
shares of our common stock issued and outstanding.
Upon liquidation, dissolution
or winding up of the corporation, the holders of common stock are entitled to
share rateably in all net assets available for distribution to shareholders
after payment to creditors. The common stock is not convertible or redeemable
and has no pre-emptive, subscription or conversion rights. There are no
conversion, redemption, sinking fund or similar provisions regarding the common
stock. Each outstanding share of common stock is entitled to one vote on all
matters submitted to a vote of shareholders. There are no cumulative voting
rights.
Each shareholder is entitled
to receive the dividends as may be declared by our Directors out of funds
legally available for dividends and, in the event of liquidation, to share pro
rata in any distribution of our assets after payment of liabilities. Our
Directors are not obligated to declare a dividend. Any future dividends will be
subject to the discretion of our Directors and will depend upon, among other
things, future earnings, the operating and financial condition of our Company,
our capital requirements, general business conditions and other pertinent
factors. It is not anticipated that dividends will be paid in the foreseeable
future.
There are no provisions in
our articles of incorporation or our bylaws that would delay, defer or prevent a
change in control of our Company.
Preferred
Stock
We are authorized to issue
50,000,000 shares of preferred stock with a par value of $0.0001 per
share. As of November 4 , 2011, there were no
preferred shares issued and outstanding. Our board of Directors is
authorized by the Nevada Revised Statutes to divide the authorized shares of our
preferred stock into one or more series, each of which must be so designated as
to distinguish the shares of each series of preferred stock from the shares of
all other series and classes. Our board of Directors is authorized, within any
limitations prescribed by law and our articles of incorporation, to fix and
determine the designations, rights, qualifications, preferences, limitations and
terms of the shares of any series of preferred stock including, but not limited
to, the following:
1.
|
The
number of shares constituting that series and the distinctive designation
of that series, which may be by distinguishing number, letter or
title;
|
2.
|
The
dividend rate on the shares of that series, whether dividends will be
cumulative, and if so, from which date(s), and the relative rights of
priority, if any, of payment of dividends on shares of that
series;
|
3.
|
Whether
that series will have voting rights, in addition to the voting rights
provided by law, and, if so, the terms of such voting
rights;
|
4.
|
Whether
that series will have conversion privileges, and, if so, the terms and
conditions of such conversion, including provision for adjustment of the
conversion rate in such events as the Board of Directors
determines;
|
5.
|
Whether
or not the shares of that series will be redeemable, and, if so, the terms
and conditions of such redemption, including the date or date upon or
after which they are redeemable, and the amount per share payable in case
of redemption, which amount may vary under different conditions and at
different redemption dates;
|
6.
|
Whether
that series will have a sinking fund for the redemption or purchase of
shares of that series, and, if so, the terms and amount of such sinking
fund;
|
7.
|
The
rights of the shares of that series in the event of voluntary or
involuntary liquidation, dissolution or winding up of the corporation, and
the relative rights of priority, if any, of payment of shares of that
series; and
|
8.
|
Any
other relative rights, preferences and limitations of that
series.
|
Warrants
There are no outstanding
warrants to purchase our securities.
Stock
Options
We have not granted any stock
options. There are no options to purchase our outstanding securities. We may in
the future establish an incentive stock option plan for our Directors, employees
and consultants.
25
Registration
Rights
We have not granted
registration rights to the selling shareholders or to any other
persons.
Transfer Agent and
Registrar
We have appointed the
following transfer agent for our shares of common stock: EMPIRE STOCK TRANSFER
INC., 1859 Whitney Mesa Dr., Henderson, NV, 89014, Telephone 702.818.5898 Fax
702.974.1444. The transfer agent is responsible for all record-keeping and
administrative functions in connection with the common
shares.
LEGAL
PROCEEDINGS
We know of no material,
existing or pending legal proceedings against our company, nor are we involved
as a plaintiff in any material proceeding or pending
litigation. There are no proceedings in which any of our Directors,
officers or affiliates, or any registered or beneficial shareholder, is an
adverse party or has a material interest adverse to our
interest.
MARKET FOR COMMON
EQUITY
AND RELATED SHAREHOLDER
MATTERS
No Public Market for Common
Stock
There is presently no public
market for our common stock. We are in the process of applying to the
Over-The-Counter Bulletin Board, through a market maker that is a licensed
broker dealer, to allow the trading of our common stock upon our becoming a
reporting company. However, we can provide no assurance that our
shares will be traded on the bulletin board or, if traded, that a public market
will materialize.
Rule 144
All of the presently
outstanding shares of our common stock are "restricted securities" as defined
under Rule 144 promulgated under the Securities Act and may only be sold
pursuant to an effective registration statement or an exemption from
registration, if available. The SEC has adopted final rules amending
Rule 144 which became effective on February 15, 2008. Pursuant to Rule 144, one
year must elapse from the time a “shell company”, as defined in Rule 405 of the
Securities Act and Rule 12b-2 of the Exchange Act, ceases to be a “shell
company” and files Form 10 information with the SEC, during which time the
issuer must remain current in its filing obligations, before a restricted
shareholder can resell their holdings in reliance on Rule 144. Form 10
information is equivalent to information that a company would be required to
file if it were registering a class of securities on Form 10 under the Exchange
Act. Under Rule 144, restricted or unrestricted securities, that were initially
issued by a reporting or non-reporting shell company or a company that was at
anytime previously a reporting or non-reporting shell company, can only be
resold in reliance on Rule 144 if the following conditions are met: (1) the
issuer of the securities that was formerly a reporting or non-reporting shell
company has ceased to be a shell company; (2) the issuer of the securities is
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act; (3) the issuer of the securities has filed all reports and material
required to be filed under Section 13 or 15(d) of the Exchange Act, as
applicable, during the preceding twelve months (or shorter period that the
Issuer was required to file such reports and materials), other than Form 8-K
reports; and (4) at least one year has elapsed from the time the issuer filed
the current Form 10 type information with the SEC reflecting its status as an
entity that is not a shell company.
At the present time, we are
classified as a “shell company” under Rule 405 of the Securities Act and Rule
12b-2 of the Exchange Act. As such, all restricted securities presently held by
the founders of our company may not be resold in reliance on Rule 144 until: (1)
we file Form 10 information with the SEC when we cease to be a “shell company”;
(2) we have filed all reports as required by Section 13 and 15(d) of the
Securities Act for twelve consecutive months; and (3) one year has elapsed from
the time we file the current Form 10 type information with the SEC reflecting
our status as an entity that is not a shell company. See also the
risk factor entitled Shareholders who hold unregistered shares of our common
stock are subject to resale restrictions pursuant to Rule 144, due to our status
as a “shell company,” above.
26
Holders of Our Common
Stock
As of November 4 , 2011, we had approximately
38 registered shareholders.
Dividends
Since inception we have not
paid any dividends on our common stock. We currently do not
anticipate paying any cash dividends in the foreseeable future on our common
stock. Although we intend to retain our earnings, if any, to finance
the expansion and growth of our business, our Board of Directors will have the
discretion to declare and pay dividends in the future.
Payment of dividends in the
future will depend upon our earnings, capital requirements, and other factors
that our Board of Directors may deem relevant.
There are no restrictions in
our articles of incorporation or bylaws that prevent us from declaring
dividends. The Nevada Revised Statutes, however, do prohibit us from
declaring dividends where after giving effect to the distribution of the
dividend:
1.
|
We
would not be able to pay our debts as they become due in the usual course
of business, or;
|
2.
|
Our
total assets would be less than the sum of our total liabilities plus the
amount that would be needed to satisfy the rights of shareholders who have
preferential rights superior to those receiving the
distribution.
|
Securities Authorized for
Issuance under Equity Compensation Plans
None.
27
MANAGEMENT'S DISCUSSION AND
ANALYSIS OR PLAN OF OPERATION
The following discussion of
our plan of operation should be read in conjunction with the financial
statements and related notes that appear elsewhere in this prospectus. This
discussion contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from those anticipated
in these forward-looking statements as a result of various factors, including
those discussed in “Risk Factors” beginning on page 7 of this prospectus. All
forward-looking statements speak only as of the date on which they are made. We
undertake no obligation to update such statements to reflect events that occur
or circumstances that exist after the date on which they are
made.
Overview
We are a development stage
company with limited operations and no revenues from our business
operations. There is an uncertainty regarding our ability to continue
as a going concern. This means that there is substantial doubt that we can
continue as an on-going business for the next twelve months. We do not
anticipate that we will generate any revenues until we complete the development
of our interactive fundraising software and website. Accordingly, we must raise
cash from sources other than our operations in order to implement our marketing
plan. We currently anticipate that such required funding will come
from sales of debt or equity securities (subsequent to the effectiveness of this
registration statement) and/or traditional bank funding.
Our plan of
operation
To establish ourselves as a
company that will produce and distribute an interactive web-based School Chat
Software. Distribution is planned to be made via the internet directly to our
future clients.
Our target
market
As disclosed above in greater
detail under “Description of Business – Our Target Market”, we plan to begin
marketing our product (once commercially available) to schools and educational
institutions located in the United States and Canada. Assuming we are
successful in such marketing efforts and begin to generate revenues, we plan to
offer our products to schools and educational institutions located throughout
the world, where English is the primary language spoken. The Company
has no definitive plans for marketing efforts outside of North America at this
time and will revisit its marketing plans in the future, once it has a better
idea of its marketing budget and potential North American market for its
products. The Company plans to market its products to all educational
institutions in North America including elementary schools, secondary schools,
high school, universities and colleges.
Our
mission
To offer a user-friendly
peer-to-peer School Chat Software which captures the school experience. This
software will allow students to stay connected to their school friends and
teachers in a secure and controlled environment, free from outside
influences. The software will allow the students to chat in one or
more School Chat rooms and share content, such as pictures, videos and
music. The School Chat Software will also act as a database, or
yearbook, so that students will be able to access their treasured memories in
the future, and will help teachers and students build and maintain relationships
over time.
Our business objectives
are
·
|
To
further develop an interactive web-based program that enhances the
student’s experiences, and provides a safe and secure
service.
|
·
|
To
execute our web-based marketing campaign and to create interest in our
services and products.
|
·
|
To
establish a brand name that will be associated with a user-friendly
interactive program and database
management.
|
During the first stages of
our growth, our officers and Directors will provide all of the labor required to
execute our business plan at no charge, except we intend to hire a website
programmer and software developer on a contract basis at an estimated cost of
$12,000. Additionally, we plan to undertake marketing efforts once our software
is developed, which we anticipate costing approximately
$4,000.
Finally, we anticipate having
contract administration support expenses at an estimated cost of
$10,000.
We plan to pay these costs
through our working capital and through funds raised through the sale of debt or
equity securities (subsequent to the effectiveness of this registration
statement) and/or traditional bank funding.
28
Estimated Expenses for the
Next Twelve Month Period
The following provides an
overview of our expenses to fund our plan of operation over the next twelve
months:
Fees
Associated With This Offering
|
$
|
23,000
|
||
Legal,
Accounting and Transfer Agent Fees*
|
$
|
30,000
|
||
Website
Development
|
$
|
12,000
|
||
Marketing
and Advertising
|
$
|
4,000
|
||
Office
Rent
|
$
|
1,000
|
||
Administration
|
$
|
10,000
|
||
Total
|
$
|
80,000
|
* Includes additional legal,
accounting and filing costs which we will incur moving forward after we become a
fully reporting company and fees and expenses associated with our ongoing
periodic and current report filing obligations. All of the estimates
above are approximate.
Results of Operations for the
nine months ended September
30 ,
2011 and
2010
We generated no revenue for
the nine months ended September
30 ,
2011 and 2010 . We do not
anticipate earning revenues until we are able to successfully complete and
market our interactive School Chat Software.
Our operating expenses for
the nine months ended September
30 , 2011,
consisting solely of general and administrative expenses, were $ 26,742 . We, therefore,
recorded a net loss of $ 26,742 for the nine months ended September
30 ,
2011. We had operating
expenses of $16,965 for the nine months ended September 30, 2010, and therefore
recorded a net loss of $16,965 for the nine months ended September 30,
2010.
We anticipate our operating
expenses will increase as we implement our business plan. The increase will be
attributable to expenses to implement our business plan, and the professional
fees to be incurred in connection with the filing of this registration statement
with the Securities and Exchange Commission under the Securities Act of 1933. We
anticipate our ongoing operating expenses will also increase once we become a
reporting company under the Securities Exchange Act of 1934.
Results of Operations from
April 29, 2010 (Inception) Through September
30 ,
2011
We generated no revenue for
the period from April 29, 2010 (Inception) through September , 2011. We do not
anticipate earning revenues until we are able to successfully complete and
market our interactive School Chat Software.
Our operating expenses for
the period from April 29, 2010 (Inception) through September , 2011 were $ 44, 012 , and consisted solely of
general and administrative expenses, mainly representing legal and accounting
fees. We, therefore, recorded a net loss of $ 44,012 for the period from April
29, 2010 (Inception) through September
30 ,
2011.
We anticipate our operating
expenses will increase as we implement our business plan. The increase will be
attributable to expenses to implement our business plan, and the professional
fees to be incurred in connection with the filing of this registration statement
with the Securities and Exchange Commission under the Securities Act of 1933. We
anticipate our ongoing operating expenses will also increase once we become a
reporting company under the Securities Exchange Act of 1934.
LIQUIDITY AND CAPITAL
RESOURCES
We have raised $400 from the
sale of stock to our officers and Directors and $42,500 through a private
placement to 36 non-affiliated off-shore investors.
At September
30 , 2011,
we had total assets, which consist ed solely of cash of
$ 686 .
At September
30 , 2011,
we had liabilities of $ 1,798 , which were solely current
liabilities associated with amounts owed in connection with legal and accounting
fees.
At September
30 , 2011,
we had a working capital deficit
of
$1 ,112 .
29
We
estimate that our current cash balances will be extinguished by December
2011
provided we do not have any unanticipated expenses. Although there can be no
assurance at present, we
hope to be in a position to generate revenues by April
2012 .
However, we will still need to raise additional funding to support our
operations and pay the expenses described above, as discussed in greater detail
below.
We had $ 24,594 of net cash used in
operating activities for the nine months ended September
30 , 2011,
which included $ 26,742 of net loss offset by $350
of decrease in prepaid expenses and $ 1,798 of increase in accounts
payable.
In February 2011, we entered
into a Promissory Note with Ruthy Navon, our former Secretary (and the owner of
NR Consulting Services, with which we have entered into a Consulting Agreement
(as described above))(the “Note”). The Note memorialized $2,916 which
Ms. Navon had previously advanced to the Company and was repaid prior to March
22, 2011.
We have never had any income
from operations. We anticipate the need for approximately $80,000 to support our
operations over the next twelve months (which includes approximately $12,000 to
complete the development of our website and software, approximately $23,000 of
costs related with the preparation, filing and related costs of the Registration
Statement, of which this Prospectus is a part, approximately $30,000 of expenses
which we anticipate incurring in connection with the preparation and filing of
our periodic and current reports and various transfer agent fees, and an
additional $15,000 of other various administrative fees during the twelve months
following the effectiveness of our Registration Statement, as described in
greater detail above under “Estimated Expenses for the Next Twelve
Months”). These funds may be raised through equity financing, debt
financing, or other sources, which may result in the dilution in the equity
ownership of our shares. We will also need more funds if the costs of the
development of our website are greater than we have budgeted. We will also
require additional financing to sustain our business operations if we are not
successful in earning revenues. We currently do not have any arrangements for
further financing and we may not be able to obtain financing when required. Our
future is dependent upon our ability to obtain financing.
Our continuation is dependent
upon us raising additional capital. In this regard we have raised additional
capital through the private placements noted above but we will still require
additional funds to continue our operations and plans.
The continuation of our
business is dependent upon us obtaining further financing, development of our
program and website, a successful marketing and promotion program, and in the
future, achieving a profitable level of operations. The issuance of additional
equity securities by us could result in a significant dilution in the equity
interests of our current stockholders. Obtaining commercial loans, assuming
those loans would be available, will increase our liabilities and future cash
commitments.
There are no assurances that
we will be able to obtain further funds required for our continued operations.
We will pursue various financing alternatives to meet our immediate and
long-term financial requirements. There can be no assurance that additional
financing will be available to us when needed or, if available, that it can be
obtained on commercially reasonable terms. If we are not able to obtain the
additional financing on a timely basis, we will be unable to conduct our
operations as planned, and we will not be able to meet our other obligations as
they become due. In such event, we will be forced to scale down or perhaps even
cease our operations.
GOING
CONCERN
Our independent registered
public accounting firm included an explanatory paragraph in their audit report
on the accompanying financial statements regarding substantial doubt about our
ability to continue as a going concern. Our financial statements
contain additional disclosures describing the circumstances that led to this
disclosure by our independent registered public accounting
firm.
Purchase of Significant
Equipment
We do not expect to purchase
any significant equipment over the next twelve months.
Off-Balance Sheet
Arrangements
Our company does not have any
off-balance sheet arrangements, including any outstanding derivative financial
instruments, off-balance sheet guarantees, interest rate swap transactions or
foreign currency contracts. Our Company does not engage in trading
activities involving non-exchange traded contracts.
CHANGES IN AND DISAGREEMENTS
WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
We have had no changes in or
disagreements with our accountants.
30
DIRECTORS, EXECUTIVE
OFFICERS, PROMOTERS AND CONTROL PERSONS
All Directors of our company
hold office until the next annual meeting of the shareholders or until their
successors have been elected and qualified. The executive officers of
our Company are appointed by our board of Directors and hold office until their
death, resignation or removal from office. Our Directors and
executive officers, their ages, positions held, and duration as such, are as
follows:
Name
|
Position
Held with the Company
|
Age
|
Date
First Elected
or
Appointed
|
Mr.
Mohamad Abdel Hadi
|
President
and Director
|
59
|
April
29, 2010
|
Ms.
Eiman Saleh
|
Treasurer
and Director
|
36
|
April
29, 2010
|
Business
Experience:
The following is a brief
account of the education and business experience of each director and executive
officer, indicating each person's business experience, and the name and
principal business of the organization by which they were
employed.
Mr. Mohamad Abdel
Hadi
Mr. Hadi has been our
President and Director since we were incorporated on April 29,
2010. Since January 2005, Mr. Hadi has worked as a Senior Software
Developer for Edinburgh Secure UK. Additionally, Mr. Hadi works as a market
leading provider of world-class information security services with over 2,700
clients worldwide. Moreover, the regions he serves span North America, Latin
America, Europe, the Middle East and certain countries located in the Pacific
Rim (i.e., those countries which are located around the edge of the Pacific
ocean). Mr. Hadi has previously been responsible for designing, developing, and
testing software in a multi-platform environment using cutting-edge technology.
Mr. Hadi also has experience working with system administrators, security
analysts, product management and clients to ensure high quality products that
exceed expectations.
Qualifications:
Mr. Hadi is qualified to
serve as a Director of the Company due to the fact that he has expertise in
software designing, developing, and testing. Additionally, he has been working
to develop the School Chat Software since the Company’s inception. Mt Hadi is
very knowledgeable regarding the technology and multi-platform environments that
are needed for the School Chat Software to be successful.
Ms. Eiman
Saleh
Ms. Saleh has been our
Treasurer and Director since we were incorporated on April 29,
2010. Since September 2001 Ms. Eiman has worked as a teacher in
Elementary Umm Al Fahm School in Umm Al Fahm Village teaching
grades one through eight. Additionally, her key responsibilities are to plan,
organize, and deliver creative quality programs within a safe environment, as
well as to maintain a safe and comfortable environment for children and parents,
administer program equipment, and complete all necessary daily participant
documents and reports.
Qualifications:
Ms. Saleh is qualified to
serve as a Director of the Company due to the fact that she has served as a
teacher since 2001. Additionally, Ms. Saleh came up with the idea of the School
Chat Software. The concept of the School Chat Software has been well researched
as Ms. Saleh developed informal surveys of schools thereby testing the market
niche and concluding in her opinion that there is in fact a market for the
Company’s proposed School Chat Software.
While we rely heavily on our
President and Director Mr. Mohamad Abdel Hadi, and our Treasurer and Director
Ms. Eiman Saleh, they have no experience serving as an officer or Director of a
publicly-traded company, or experience with the reporting requirements which
public companies are subject to.
Additionally, neither Mr.
Hadi nor Ms. Saleh have any experience with the financial accounting and
preparation requirements of financial statements which we will be required to be
filed on a quarterly and annual basis under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), once our Registration Statement, of which this
prospectus is a part is declared effective. We plan to initially rely
on our outside accountants and bookkeepers, as well as the consultants we have
engaged (including Ms. Ruthy Navon, our former Secretary, who we have entered
into a consulting agreement with as described below) to help us create a system
of accounting controls and procedures to maintain the Company’s accounting
records, until such time, if ever, as we generate the revenues required to
engage a separate Chief Accounting Officer, with accounting experience with
publicly reporting companies.
31
Promoters:
Ruthy Navon, because of her
relationship to the Company and as a result of the Independent Contractor
Agreement she entered into with the Company, through the entity which she
controls, is considered a “control person” of the Company. Ms. Navon’s
biographical information is described below:
Ruthy
Navon
Ms. Navon received a Bachelor
of Arts in Economics, Business and Communications in 2003 from the Israel
English College. Ms. Navon currently operates a consulting company,
which she helped form in 1999, pursuant to which she consults with Israeli
companies desiring to go public in the United States, and provides such
companies management consulting, planning and organizational and development
services. Ms. Navon also owns and operates Yearbook Alive Software Company an
online seller of yearbook software.
Family
Relationships
There are no family
relationships among our Directors or executive officers.
Involvement in Certain Legal
Proceedings
Our Directors, executive
officers and control persons have not been involved in any of the following
events during the past ten years:
1.
|
any
bankruptcy petition filed by or against any business of which such person
was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that
time;
|
2.
|
any
conviction in a criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor
offenses);
|
3.
|
being
subject to any order, judgment, or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining, barring, suspending or otherwise limiting his
involvement in any type of business, securities or banking activities;
or
|
4.
|
being
found by a court of competent jurisdiction (in a civil action), the
Commission or the Commodity Futures Trading Commission to have violated a
federal or state securities or commodities law, and the judgment has not
been reversed, suspended, or
vacated.
|
Committees of the
Board
Our Company currently does
not have nominating, compensation or audit committees or committees performing
similar functions nor does our company have a written nominating, compensation
or audit committee charter. Our Directors believe that it is not necessary to
have such committees, at this time, because the functions of such committees can
be adequately performed by the board of Directors.
Our Company does not have any
defined policy or procedural requirements for shareholders to submit
recommendations or nominations for Directors. The board of Directors believes
that, given the stage of our development, a specific nominating policy would be
premature and of little assistance until our business operations develop to a
more advanced level. Our Company does not currently have any specific or minimum
criteria for the election of nominees to the board of Directors and we do not
have any specific process or procedure for evaluating such nominees. The board
of Directors will assess all candidates, whether submitted by management or
shareholders, and make recommendations for election or
appointment.
A shareholder who wishes to
communicate with our board of Directors may do so by directing a written request
addressed to our President and Director, Mr. Mohamad Abdel Hadi, at the address
appearing on the first page of this prospectus.
32
Audit Committee Financial
Expert
Our board of Directors has
determined that we do not have a board member that qualifies as an "audit
committee financial expert" as defined in Item 407(D)(5) of Regulation S-K, nor
do we have a Board member that qualifies as "independent" as the term is used in
Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934,
as amended, and as defined by Rule 4200(a)(14) of the FINRA
Rules.
We believe that our board of
Directors is capable of analyzing and evaluating our financial statements and
understanding internal controls and procedures for financial reporting. The
board of Directors of our company does not believe that it is necessary to have
an audit committee because management believes that the functions of an audit
committee can be adequately performed by the board of Directors. In addition, we
believe that retaining an independent Director who would qualify as an "audit
committee financial expert" would be overly costly and burdensome and is not
warranted in our circumstances given the stage of our development and the fact
that we have not generated any positive cash flows from operations to
date.
EXECUTIVE
COMPENSATION
We have not paid, nor do we
owe, any compensation to our executive officers. We have not paid any
compensation to our officers since inception.
We have no employment
agreements with any of our executive officers or employees.
SUMMARY
COMPENSATION TABLE
|
|||||||||
Name
and
Principal
Position
|
Year
(3)
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive Plan Compensation
($)
|
Nonqualified
Deferred Compensation Earnings
($)
|
All
Other
Compensation
($)
|
Total
($)
|
Mohamad
Abdel Hadi
President
and Director
(1)
|
2010
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Eiman
Saleh
Treasurer
and Director
(2)
|
2010
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
(1) Mohammad
Abdel Hadi became President and Director of the Company on April 29,
2010.
(2) Eiman
Saleh became Treasurer and Director of the Company on April 29,
2010.
(3) We
were incorporated on April 29, 2010.
Options/SAR
Grants
Since April 29, 2010
(inception) we have not granted any stock options or stock appreciation rights
to any of our Directors or executive officers.
Compensation of
Directors
There are no arrangements
pursuant to which Directors are or will be compensated in the future for any
services provided as a Director.
Long-Term Incentive Plans and
Awards
We do not have any long-term
incentive plans that provide compensation intended to serve as incentive for
performance. No individual grants or agreements regarding future payouts under
non-stock price-based plans have been made to any executive officer or any
Director or any employee or consultant since our inception; accordingly, no
future payouts under non-stock price-based plans or agreements have been granted
or entered into or exercised by any of the officers or Directors or employees or
consultants since we were founded.
33
SECURITY OWNERSHIP
OF
CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets
forth, as of November
4, 2011,
certain information with respect to the beneficial ownership of our common stock
by each shareholder known by us to be the beneficial owner of more than 5% of
our common stock and by our current Directors and executive
officers. The shareholders have sole voting and investment power with
respect to the shares of common stock, except as otherwise
indicated. Beneficial ownership consists of a direct interest in the
shares of common stock, except as otherwise indicated.
Title
of Class
|
Name
and Address of Beneficial Owner
|
Amount
and Nature
of
Beneficial Ownership
|
Percentage
of Class (1)
|
|||
Common
Stock
|
Mr.
Mohammad Abdel Hadi
President
and Director
|
2,000,000
|
41.2%
|
|||
Common
Stock
|
Ms.
Eiman Saleh
Treasurer
and Director
|
2,000,000
|
41.2%
|
|||
All
officers and Directors as a Group
(2
persons)
|
4,000,000
|
82.5%
|
||||
(¹)
|
Based
on 4,850,000 shares of our common stock outstanding.
|
Changes in
Control
We are unaware of any
contract, or other arrangement or provision of our Articles of Incorporation or
Bylaws, the operation of which may at a subsequent date result in a change of
control of our company.
CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
In April 2010, Mohamad Abdel
Hadi and Eiman Saleh were appointed as Directors of the
Company.
In April 2010, Mohamad Abdel
Hadi was appointed the President of the Company, Eiman Saleh was appointed as
the Treasurer of the Company, and Ruthy Navon was appointed as Secretary of the
Company.
In June 2010, we sold
2,000,000 shares of common stock to each of Mohamad Abdel Hadi and Eiman Saleh
(4,000,000 shares total), our President and Director and Treasurer and Director,
respectively, in consideration for $200 each ($400 total) or $0.0001 per
share.
In June 2010, we entered into
an independent contractor agreement with an entity owned and controlled by our
then Secretary, Ruthy Navon, who has agreed to assist the Company in connection
with the steps required for the Company to obtain a listing on the
Over-The-Counter-Bulletin Board, pursuant to which we have agreed to pay her a
flat fee of $5,000.
In June 2010, Ruthy Navon
resigned as the Secretary of the Company.
In February 2011, we entered
into a Promissory Note with Ruthy Navon, our former Secretary (and the owner of
NR Consulting Services, with which we have entered into a Consulting Agreement
(as described above))(the “Note”). The Note memorialized $2,916 which
Ms. Navon had previously advanced to the Company and was repaid prior to March
22, 2011.
34
Other than as provided above,
we have not entered into any transaction nor are there any proposed transactions
in which any of our Directors, executive officers, shareholders or any member of
the immediate family of any of the foregoing had or is to have a direct or
indirect material interest.
DISCLOSURE OF SEC POSITION OF
INDEMNIFICATION FOR
SECURITIES ACT
LIABILITIES
Our Bylaws provide that we
will indemnify an officer, Director, or former officer or Director, to the full
extent permitted by law. Insofar as indemnification for liabilities arising
under the Securities Act of 1933, as amended (the “Securities Act”) may be
permitted to our Directors, officers and controlling persons pursuant to the
foregoing provisions, or otherwise, we have been advised that in the opinion of
the SEC such indemnification is against public policy as expressed in the
Securities Act, and is, therefore, unenforceable.
In the event that a claim for
indemnification against such liabilities, other than the payment by us of
expenses incurred or paid by one of our Directors, officers, or controlling
persons in the successful defense of any action, suit or proceeding, is asserted
by one of our Directors, officers, or controlling persons in connection with the
securities being registered, we will, unless in the opinion of our counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification is against
public policy as expressed in the Securities Act, and we will be governed by the
final adjudication of such issue.
EXPERTS
The financial statements of
Inventtech in this registration statement have been audited by GBH CPAs, PC, of
6002 Rogerdale, Suite 500, Houston, Texas 77072, for the period set forth
in their report (which contains an explanatory paragraph regarding our Company's
ability to continue as a going concern) appearing elsewhere in the registration
statement, and is included in reliance upon such report given upon the authority
of said firm as experts in auditing and accounting.
Certain legal matters with
respect to the issuance of shares of common stock offered hereby will be passed
upon by The Loev Law Firm, PC, of 6300 West Loop South, Suite 280, Bellaire,
Texas, 77401.
WHERE YOU CAN FIND MORE
INFORMATION
We have filed with the SEC a
registration statement on Form S-1 under the Securities Act with respect to
the shares of common stock we are offering by this prospectus. This prospectus
does not contain all of the information included in the registration statement.
For further information pertaining to us and our common stock, you should refer
to the registration statement and to its exhibits. Whenever we make reference in
this prospectus to any of our contracts, agreements or other documents, the
references are not necessarily complete, and you should refer to the exhibits
attached to the registration statement for copies of the actual contract,
agreement or other document.
Our fiscal year ends on
December 31. We plan to furnish our shareholders annual reports containing
audited financial statements and other appropriate reports, where applicable. In
addition, the effectiveness of the Registration Statement of which this
prospectus is a part will trigger the Company’s obligation to file current and
periodic reports with the Commission under Section 15(d) of the Securities Act
of 1934, as amended. You may read and copy any reports, statements, or other
information we file at the SEC's public reference room at 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. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the public reference
rooms. Our SEC filings are also available to the public on the SEC's Internet
site at http\\www.sec.gov.
You should read this
prospectus and any prospectus supplement together with the registration
statement and the exhibits filed with or incorporated by reference into the
registration statement. The information contained in this prospectus speaks only
as of its date unless the information specifically indicates that another date
applies.
35
We have not authorized any
person to give any information or to make any representations that differ from,
or add to, the information discussed in this prospectus. Therefore, if anyone
gives you different or additional information, you should not rely on
it.
We plan on maintaining a
website on the internet at www.inventtech.com. Our website and the
information included on our website is not part of this
prospectus.
No finder, dealer, sales
person or other person has been authorized to give any information or to make
any representation in connection with this offering other than those contained
in this prospectus and, if given or made, such information or representation
must not be relied upon as having been authorized by our company. This
prospectus does not constitute an offer to sell or a solicitation of an offer to
buy any of the securities offered hereby by anyone in any jurisdiction in which
such offer or solicitation is not authorized or in which the person making such
offer or solicitation is not qualified to do so or to any person to whom it is
unlawful to make such offer or solicitation.
36
Table of Contents to
Financial Statements
Unaudited
Financial Statements
|
|||
Balance sheets as of September 30 , 2011 and December 31,
2010
|
F-2
|
||
Statements of Operations for the three months ended
September 30, 2010 and 2011, the nine months ended September 30 , 2010 and
2011, the period from April 29, 2010 (inception) through September 30,
2010 and the period from April 29, 2010 (inception) through September 30 ,
2011
|
F-3
|
||
Statement of Stockholders’ Equity
for the period from April 29, 2010 (inception) through September 30 , 2011
|
F- 4
|
||
Statements of Cash Flows
for the nine months ended September 30 , 2011, the
period from April 29, 2010 (inception) through September 30,
2010 and the period from April 29, 2010 (inception)
through September 30 ,
2011
|
F- 5
|
||
Notes
to Financial Statements
|
F-6
|
||
Audited
Financial Statements
|
|||
Report
of Independent Registered Public Accounting Firm
|
F-8
|
||
Balance
sheet as of December 31, 2010
|
F-9
|
Statement
of Operations for the period from April 29, 2010 (inception) through
December 31, 2010
|
F-10
|
Statement
of Stockholders’ Equity for the period from April 29, 2010 (inception)
through December 31, 2010
|
F-11
|
Statement
of Cash Flows for the period from April 29, 2010 (inception) through
December 31, 2010
|
F-12
|
Notes
to Financial Statements
|
F-13
|
F-1
INVENTTECH INC.
(A
Development Stage Company)
Balance
Sheets
(Unaudited)
ASSETS
|
|||||||
September
30,
2011
|
December
31,
2010
|
||||||
|
|||||||
CURRENT
ASSETS
|
|||||||
Cash
and cash equivalents
|
$
|
686
|
$
|
25,280
|
|||
Prepaid
expenses
|
—
|
350
|
|||||
Total
Current Assets
|
686
|
25,630
|
|||||
TOTAL
ASSETS
|
$
|
686
|
$
|
25,630
|
|||
LIABILITIES AND STOCKHOLDERS’ EQUITY
(DEFICIT)
|
|||||||
CURRENT
LIABILITIES
|
|||||||
Accounts
payable
|
$
|
1,798
|
$
|
—
|
|||
Total
Current Liabilities
|
1,798
|
—
|
|||||
STOCKHOLDERS’
EQUITY (DEFICIT)
|
|||||||
Preferred
stock, 50,000,000 shares authorized at par value of $0.0001, no shares
issued and outstanding
|
—
|
—
|
|||||
Common
stock, 100,000,000 shares authorized at par value of $0.0001, 4,850,000
issued and outstanding
|
485
|
485
|
|||||
Additional
paid-in capital
|
42,415
|
42,415
|
|||||
Deficit
accumulated during the development stage
|
(44,012
|
)
|
(17,270
|
)
|
|||
Total
Stockholders’ Equity (Deficit)
|
(1,112
|
)
|
25,630
|
||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
$
|
686
|
$
|
25,630
|
The accompanying notes are an integral part of these financial
statements.
F-2
INVENTTECH
INC.
(A
Development Stage Company)
Statements
of Operations
(Unaudited)
(Unaudited)
For
the Three Months Ended September 30,
|
|
|
||||||||||||||||||
2011
|
2010
|
For
the Nine Months Ended September 30, 2011 |
From
Inception on April 29, 2010 through September 30, 2010 |
From Inception on April 29, 2010 through
September 30, 2011 |
||||||||||||||||
|
|
|
||||||||||||||||||
REVENUES
|
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
COST
OF SALES
|
— | — | — | — | — | |||||||||||||||
GROSS
MARGIN
|
— | — | — | — | — | |||||||||||||||
OPERATING
EXPENSES
|
||||||||||||||||||||
General
and administrative
|
508 | 14,049 | 26,742 | 16,965 | 44,012 | |||||||||||||||
Total
Operating Expenses
|
508 | 14,049 | 26,742 | 16,965 | 44,012 | |||||||||||||||
LOSS
FROM OPERATIONS
|
(508 | ) | (14,049 | ) | (26,742 | ) | (16,965 | ) | (44,012 | ) | ||||||||||
PROVISION
FOR INCOME TAXES
|
— | — | — | — | — | |||||||||||||||
NET
LOSS
|
$ | (508 | ) | $ | (14,049 | ) | $ | (26,742 | ) | $ | (16,965 | ) | $ | (44,012 | ) | |||||
BASIC
AND DILUTED LOSS PER SHARE
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.00 | ) | ||||||||
WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED
|
4,850,000 | 4,850,000 | 4,850,000 | 4,504,516 |
The
accompanying notes are an integral part of these financial
statements.
F-3
INVENTTECH
INC.
(A
Development Stage Company)
Statements
of Stockholders’ Equity
(Unaudited)
Common
Stock
|
Additional
Paid-in
|
Deficit
Accumulated During the Development
|
Total
Stockholders’ Equity
|
|||||||||||||
Shares
|
Amount
|
Capital
|
Stage
|
(Deficit)
|
||||||||||||
Balance,
April 29, 2010
|
—
|
—
|
—
|
—
|
—
|
|||||||||||
Stock
issued for cash at $0.0001 per share
|
4,000,000
|
400
|
400
|
|||||||||||||
Stock
issued for cash at $0.05 per share
|
850,000
|
85
|
42,415
|
42,500
|
||||||||||||
Loss
for the year ended
|
||||||||||||||||
December
31, 2010
|
—
|
—
|
—
|
(17,270
|
)
|
(17,270
|
)
|
|||||||||
Balance,
December 31, 2010
|
4,850,000
|
485
|
42,415
|
(17,270
|
)
|
25,630
|
||||||||||
Loss
for the nine months ended
|
||||||||||||||||
September
30, 2011
|
—
|
—
|
—
|
(26,742
|
)
|
(26,742
|
)
|
|||||||||
Balance,
September 30, 2011
|
4,850,000
|
$
|
485
|
$
|
42,415
|
$
|
(44,012
|
)
|
$
|
(1,112
|
)
|
The
accompanying notes are an integral part of these financial
statements.
F-4
INVENTTECH INC.
(A
Development Stage Company)
Statements
of Cash Flows
(Unaudited)
For
the Nine Months Ended September 30, 2011 |
From
Inception on April 29, 2010 through September 30, 2010 |
From
Inception on April 29, 2010 through
September
30,
2011
|
||||||||
OPERATING
ACTIVITIES
|
||||||||||
Net
loss
|
$
|
(26,742
|
)
|
$
|
(16,965
|
)
|
$
|
(44,012
|
)
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||||
Changes
in operating assets and liabilities:
|
||||||||||
Prepaid
expenses
|
350
|
—
|
—
|
|||||||
Accounts
payable
|
1,798
|
—
|
1,798
|
|||||||
Net
Cash Used in Operating Activities
|
(24,594
|
)
|
(16,965
|
)
|
(42,214
|
)
|
||||
INVESTING
ACTIVITIES
|
—
|
—
|
—
|
|||||||
FINANCING
ACTIVITIES
|
||||||||||
Proceeds
from private placements
|
—
|
42,900
|
42,900
|
|||||||
Net
Cash Provided by Financing Activities
|
—
|
42,900
|
42,900
|
|||||||
NET
INCREASE (DECREASE) IN CASH
|
(24,594
|
)
|
25,935
|
686
|
||||||
CASH
AT BEGINNING OF PERIOD
|
25,280
|
—
|
—
|
|||||||
CASH
AT END OF PERIOD
|
$
|
686
|
25,935 |
$
|
686
|
|||||
SUPPLEMENTAL
DISCLOSURES OF
|
||||||||||
CASH
FLOW INFORMATION
|
||||||||||
CASH
PAID FOR:
|
||||||||||
Interest
|
$
|
—
|
$
|
—
|
$
|
—
|
||||
Income
taxes
|
$
|
—
|
$
|
—
|
$
|
—
|
The
accompanying notes are an integral part of these financial
statements.
F-5
INVENTTECH
INC.
(A Development Stage
Company)
Notes to the Unaudited
Financial Statements
NOTE
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of
Business
Inventtech
Inc. (the “Company”) was incorporated in the State of Nevada on April 29, 2010.
The Company is engaged in offering an interactive web-based Social media program
designed for schools, and solely to be used by members of a particular school.
The Company has no revenues and limited operations. The Company is classified as
a development stage company since it has not earned any revenue from its planned
operations and is devoting most of its efforts to developing its website,
finalizing the design and development of its software, and raising
capital.
Basis of
Presentation
The accompanying
unaudited interim financial statements
as of September 30 , 2011 and for the nine months ended
September 30 ,
2011 and 2010 have been prepared in accordance with accounting
principles generally accepted in the United States for interim financial
information in accordance with Securities and Exchange
Commission (SEC) Regulation S-X rule 8-03. In the opinion of
management, the unaudited financial statements have been prepared on the same
basis as the annual financial statements and reflect all adjustments, which
include only normal recurring adjustments, necessary to present fairly the
financial position as of September 30 , 2011 and the results of operations and cash flows for
the periods then ended. The financial data and other information disclosed in
these notes to the interim financial statements related to the period are
unaudited. The results for the nine- month period ended September 30 , 2011, are not
necessarily indicative of the results to be expected for any subsequent quarters
or for the entire year ending December 31, 2011. The balance sheet at December
31, 2010 has been derived from the audited financial statements at that
date.
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 at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual results could differ
from those estimates.
Cash and Cash
Equivalents
For
purposes of the Statement of Cash Flows, the Company considers all highly liquid
instruments purchased with a maturity of three months or less to be cash
equivalents to the extent the funds are not being held for investment
purposes.
Subsequent
Events
The Company’s management reviewed all material events through the
date these financial statements were issued and there are no material subsequent
events to report.
Recent Accounting
Pronouncements
Management
has considered all recent accounting pronouncements issued since the last audit
of our financial statements. The Company’s management believes that these recent
pronouncements will not have a material effect on the Company’s financial
statements.
F-6
NOTE
2 - GOING CONCERN
The accompanying financial statements have been prepared
in conformity with accounting principles generally accepted in the United
States, which contemplate continuation of the Company as a going
concern. However, the Company has not generated revenue since its
inception and has an accumulated deficit of $ 44,012 at September 30 ,
2011. The Company currently has limited liquidity and has not
completed its efforts to establish a stabilized source of revenues sufficient to
cover operating costs over an extended period of time. These factors
raise substantial doubt about the Company’s ability to continue as a going
concern.
Management
anticipates that the Company will be dependent, for the near future, on
additional investment capital, primarily from its shareholders, to fund
operating expenses. The Company intends to position itself so that it may be
able to raise additional funds through the capital markets. In light of
management’s efforts, there are no assurances that the Company will be
successful in this or any of its endeavors or become financially viable and
continue as a going concern.
F-7
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Shareholders
Inventtech
Inc.
(A Development Stage
Company)
Las Vegas,
Nevada
We have audited the
accompanying balance sheet of Inventtech Inc. (the “Company”) (a development
stage company) as of December 31, 2010, and the related statements of
operations, stockholders’ equity, and cash flows for the period from April 29,
2010 (inception) through December 31, 2010. These financial statements are the
responsibility of the Company’s management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance whether the financial statements are free of
material misstatement. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. Our audit
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly, we express no
such opinion. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
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 Inventtech Inc. as of December 31, 2010, and the results
of its operations and its cash flows for the period from April 29, 2010
(inception) through December 31, 2010, in conformity with accounting
principles generally accepted in the United States of
America.
The accompanying financial
statements have been prepared assuming that Inventtech Inc. will continue as a
going concern. As discussed in Note 2 to the financial statements, Inventtech
Inc. has not generated revenues since inception and has an accumulated deficit.
These factors raise substantial doubt about the Company’s ability to continue as
a going concern. Management’s plans in regard to these matters are also
discussed in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/
GBH CPAs, PC
www.gbhcpas.com
Houston,
Texas
March 22,
2011
F-8
Inventtech
Inc.
(A
Development Stage Company)
Balance
Sheet
|
||||
ASSETS
|
December
31, 2010
|
|||
Current
assets
|
||||
Cash
|
$
|
25,280
|
||
Prepaid
assets
|
350
|
|||
Total
Current Assets
|
25,630
|
|||
TOTAL
ASSETS
|
$
|
25,630
|
||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||
CURRENT
LIABILITIES
|
||||
Accounts
payable
|
$
|
0
|
||
Total
Liabilities
|
0
|
|||
STOCKHOLDERS'
EQUITY
|
||||
Preferred
stock, $0.0001 par value, 50,000,000 shared authorized,
|
||||
none issued and outstanding
|
-
|
|||
Common
stock , $0.0001 par value, 100,000,000 shares authorized,
|
||||
4,850,000 shares issued and outstanding, respectively
|
485
|
|||
Additional
Paid-in Capital
|
42,415
|
|||
Deficit
accumulated during the development stage
|
(17,270
|
)
|
||
Total
Stockholders' Equity
|
25,630
|
|||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
25,630
|
The accompanying notes are an
integral part of these financial statements.
F-9
Inventtech
Inc.
(A
Development Stage Company)
Statement
of Operations
|
||||
For
the period from inception (April 29, 2010) through December 31,
2010
|
||||
COSTS
AND EXPENSES
|
||||
General
and administrative
|
$
|
17,270
|
||
Total
costs and expenses
|
$
|
17,270
|
||
NET
LOSS
|
$
|
(17,270
|
)
|
|
BASIC
AND DILUTED LOSS PER SHARE
|
$
|
(0.00)
|
||
WEIGHTED
AVERAGE NUMBER OF SHARES
OUTSTANDING, BASIC AND DILUTED
|
4,632,317
|
The accompanying notes are an
integral part of these financial statements.
F-10
Inventtech
Inc.
(A
Development Stage Company)
Statement
of Stockholders' Equity
For
the period from inception (April 29, 2010) through December 31,
2010
|
||||||||||||||||||||
Common
Stock
|
Additional
Paid-In
|
Deficit
Accumulated During the Development
|
Total Stockholders' | |||||||||||||||||
Shares
|
Amount
|
Capital
|
Stage
|
Equity
|
||||||||||||||||
Balance,
April 29, 2010
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||
Stock
issued for cash at $0.0001 per share
|
4,000,000
|
400
|
-
|
-
|
400
|
|||||||||||||||
Stock
issued for cash at $0.05 per share
|
850,000
|
85
|
42,415
|
-
|
42,500
|
|||||||||||||||
Net
loss
|
-
|
-
|
-
|
(17,270
|
)
|
(17,270
|
)
|
|||||||||||||
Balance,
December 31, 2010
|
4,850,000
|
$
|
485
|
$
|
42,415
|
$
|
(17,270
|
)
|
$
|
25,630
|
The accompanying notes are an
integral part of these financial statements.
F-11
Inventtech
Inc.
(A
Development Stage Company)
Statement
of Cash Flows
|
||||
For
the period from inception (April 29, 2010) through December 31,
2010
|
||||
OPERATING
ACTIVITIES
|
||||
Net
loss
|
$
|
(17,270
|
)
|
|
Adjustments
to Reconcile Net Loss to
|
||||
net
cash used in operating activities:
|
||||
Changes
in operating assets and liabilities:
|
||||
Prepaid
expenses
|
(350)
|
|||
Net
Cash Used in Operating Activities
|
(17,620
|
)
|
||
FINANCING
ACTIVITIES
|
||||
Proceeds
from stock issuances
|
42,900
|
|||
Net
Cash Provided by Financing Activities
|
42,900
|
|||
NET
INCREASE IN CASH
|
25,280
|
|||
CASH
AT BEGINNING OF PERIOD
|
-
|
|||
CASH
AT END OF PERIOD
|
$
|
25,280
|
||
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION
|
||||
CASH
PAID FOR
|
||||
Interest
|
$
|
-
|
||
Income
Taxes
|
$
|
-
|
The accompanying notes
are an integral part of these financial statements.
F-12
Inventtech
Inc.
|
(A
Development Stage Company)
|
Notes
to Financial Statements
|
1.
|
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
|
Nature
of Business
Inventtech Inc. (the
“Company”) was incorporated in the State of Nevada on April 29, 2010. The
Company is engaged in offering an interactive web-based Social media program
designed for schools, and solely to be used by members of a particular school.
The Company has no revenues and limited operations. The Company is classified as
a development stage company since it has not earned any revenue from its planned
operations and is devoting most of its efforts to developing its website,
finalizing the design and development of its software, and raising
capital.
Basis
of Presentation
These financial statements
and related notes are presented in accordance with accounting principles
generally accepted in the United States, and are expressed in US dollars. The
Company’s fiscal year-end is December 31.
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 at the date of the
financial statements and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those
estimates.
Revenue
Recognition
The Company recognizes
revenue when products are fully delivered or services have been provided and
collection is reasonably assured.
Advertising
Costs
The Company’s policy
regarding advertising is to expense advertising when incurred. The Company did
not incur any advertising expenses for the period ended December 31,
2010.
Cash
and Cash Equivalents
The Company considers all
highly liquid instruments purchased with a maturity of three months or less to
be cash equivalents to the extent the funds are not being held for investment
purposes.
Income
Taxes
The Company provides for
income taxes using an asset and liability approach. Deferred tax assets and
liabilities are recorded based on the differences between the financial
statement and tax bases of assets and liabilities and the tax rates in effect
when these differences are expected to reverse. Deferred tax assets are reduced
by a valuation allowance if, based on the weight of available evidence, it is
more likely than not that some or all of the deferred tax assets will not be
realized.
F-13
The provision for income
taxes differs from the amounts which would be provided by applying the statutory
federal income tax rate of 15% to the net loss before provision for income taxes
as follows:
From
inception through
December
31, 2010
|
||||
Income
tax expense (benefit) at statutory rate
|
$
|
(2,591)
|
||
Change in valuation allowance
|
2,591
|
|||
Income
tax expense
|
$
|
0
|
Net deferred tax assets
consist of the following components as of:
December
31, 2010
|
||||
NOL
Carryover
|
$
|
2,591
|
||
Valuation allowance
|
(2,591)
|
|||
Net
deferred tax asset
|
$
|
0
|
Due to the change in
ownership provisions of the Tax Reform Act of 1986, net operating loss carry
forwards of approximately $17,000 for federal income tax reporting purposes
could be subject to annual limitations should a change in ownership occur. The
net operating loss carry forwards began to expire in 2030.
Recent
Accounting Pronouncements
The Company has implemented
all new accounting pronouncements that are in effect and that may impact its
financial statements and does not believe that there are any other new
accounting pronouncements that have been issued that might have a material
impact on its financial position or results of operations.
2. GOING
CONCERN
The accompanying financial
statements have been prepared in conformity with accounting principles generally
accepted in the United States, which contemplate continuation of the Company as
a going concern. However, the Company has not generated revenues
since inception and has an accumulated deficit of $17,270 as of December 31,
2010. The Company currently has limited liquidity and has not
completed its efforts to establish a stabilized source of revenues sufficient to
cover operating costs over an extended period of time. These factors
raise substantial doubt about the Company’s ability to continue as a going
concern.
Management anticipates that
the Company will be dependent, for the near future, on additional investment
capital, primarily from its shareholders, to fund operating expenses. The
Company intends to position itself so that it may be able to raise additional
funds through the capital markets. In light of management’s efforts, there are
no assurances that the Company will be successful in this or any of its
endeavors or become financially viable and continue as a going
concern.
F-14
3. STOCKHOLDERS’
EQUITY
On April 29, 2010
(inception), the Company issued 4,000,000 shares of its common stock to its
founders for cash of $400.
During July 2010, the Company
closed a private placement for 850,000 common shares at a price of $0.05 per
share. The Company received $42,500 of proceeds.
Common
Stock
The Company is authorized to
issue 100,000,000 common shares with a par value of $0.0001. As of December 31,
2010, there were 4,850,000 shares of common stock issued and outstanding. Upon
liquidation, dissolution or winding up of the corporation, the holders of common
stock are entitled to share ratably in all net assets available for distribution
to shareholders after payment to creditors. The common stock is not convertible
or redeemable and has no pre-emptive, subscription or conversion rights. There
are no conversion, redemption, sinking fund or similar provisions regarding the
common stock. Each outstanding share of common stock is entitled to one vote on
all matters submitted to a vote of shareholders. There are no cumulative voting
rights. Each shareholder is entitled to receive the dividends as may be declared
by the Company’s Directors out of funds legally available for dividends and, in
the event of liquidation, to share pro rata in any distribution of our assets
after payment of liabilities. The Company’s Directors are not obligated to
declare a dividend. Any future dividends will be subject to the discretion of
the Company’s Directors and will depend upon, among other things, future
earnings, the operating and financial condition of the Company, the Company’s
capital requirements, general business conditions and other pertinent factors.
It is not anticipated that dividends will be paid in the foreseeable
future.
Preferred
Stock
The Company is authorized to
issue 50,000,000 shares of preferred stock with a par value of
$0.0001. As of December 31, 2010, there were no preferred shares
issued and outstanding. The Company’s board of Directors is
authorized by the articles of incorporation to divide the authorized shares of
the Company’s preferred stock into one or more series, each of which must be so
designated as to distinguish the shares of each series of preferred stock from
the shares of all other series and classes. The Company’s board of Directors is
authorized, within any limitations prescribed by law and the Company’s articles
of incorporation, to fix and determine the designations, rights, qualifications,
preferences, limitations and terms of the shares of any series of preferred
stock.
Warrants
There are no outstanding
warrants to purchase the Company’s securities.
Stock
Options
The Company has not granted
any stock options. There are no options to purchase the
Company’s securities outstanding. The Company may in the future establish
an incentive stock option plan for its Directors, employees and
consultants.
Registration
Rights
The Company has not granted
registration rights to the selling shareholders or to any other
persons.
F-15
4. SUBSEQUENT
EVENTS
The Company evaluated
subsequent events through, March 22, 2011, the date these financial statements
were available to be issued. There were no material subsequent events that
required recognition or additional disclosure in these financial statements,
except as follows:
In February 2011, the Company
entered into a promissory note with Ruthy Navon, the Company's former Secretary.
The promissory note was to repay $2,916 of advances from Ruthy Navon for working
capital and operating expenses. The promissory note bore interest at the rate of
12% per annum and the principal and any accrued and unpaid interest was due and
payable on August 15, 2011. The promissory note was repaid prior to March 22,
2011.
In February 2011, the Company
entered into an independent contractor agreement with an unrelated third party,
who has agreed to assist with bookkeeping and accounting duties. The Company has
agreed to pay the contractor $20 USD per hour until March 2011 and then $23 USD
per hour for services rendered after that date.
F-16
DEALER PROSPECTUS DELIVERY
OBLIGATION
Until ninety (90) Days after
the later of (1) the effective date of the registration statement or (2) the
first date on which the securities are offered publicly, all dealers that effect
transactions in these securities, whether or not participating in this offering,
may be required to deliver a prospectus. This is in addition to the
dealers’ obligation to deliver a prospectus when acting as underwriters and with
respect to their unsold allotments or subscriptions.
PART II - INFORMATION NOT
REQUIRED IN PROSPECTUS
Item 13. OTHER EXPENSES OF
ISSUANCE AND DISTRIBUTION
The following table sets
forth the costs and expenses payable by us in connection with the issuance and
distribution of the securities being registered hereunder. No
expenses shall be borne by the selling shareholder. All of the
amounts shown are estimates.
SEC
registration fees
|
$
|
5
|
(1)
|
|
Legal
and accounting fees
|
$
|
20,000
|
(1)
|
|
Miscellaneous
|
$
|
20,000
|
(1)
|
|
Total
|
$
|
40,005
|
(1)
|
(1) We have
estimated these amounts.
Item
14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our officers and Directors
are indemnified as provided by the Nevada Revised Statutes (the “NRS”), our
Articles of Incorporation and our Bylaws.
Indemnification
Chapter 78 of the NRS,
pertaining to private corporations, provides that we are required to indemnify
our officers and Directors to the extent that they are successful in defending
any actions or claims brought against them as a result of serving in that
position, including criminal, civil, administrative or investigative actions and
actions brought by or on behalf of Inventtech Inc.
Chapter 78 of the NRS further
provides that we are permitted to indemnify our officers and Directors for
criminal, civil, administrative or investigative actions brought against them by
third parties and for actions brought by or on behalf of Inventtech Inc., even
if they are unsuccessful in defending that action, unless the officer or
Director’s:
(a)
|
action
or inaction constituted a breach of his fiduciary duties as a Director or
officer; and
|
|
(b)
|
the
breach of those duties involved intentional misconduct, fraud, or a
knowing violation of law.
|
However, with respect to
actions brought by or on behalf of Inventtech Inc. against our officers or
Directors, we are not permitted to indemnify our officers or Directors where
they are adjudged by a court, after the exhaustion of all appeals, to be liable
to us or for amounts paid in settlement to Inventtech Inc., unless, and only to
the extent that, a court determines that the officers or Directors are entitled
to be indemnified.
Our Articles and Bylaws
provide that we will indemnify our Directors and officers to the fullest extent
not prohibited by Nevada law; provided, however, 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: (a) such indemnification is expressly
required to be made by law; (b) the proceeding was authorized by our Board of
Directors; (c) such indemnification is provided by us, in our sole discretion,
pursuant to the powers vested in us under Nevada law; or (d) such
indemnification is required to be made pursuant to the
bylaws.
Item
15. RECENT SALES OF UNREGISTERED SECURITIES
In June 2010, we sold
2,000,000 shares of common stock each to Mohamad Abdel Habi and Eiman Saleh
(4,000,000 shares total), our President and Director, and Treasurer and
Director, respectively, in consideration for $200 or $0.0001 per share each
($400 in aggregate). The shares were valued at $400 or $0.0001 per share, the
par value of the common stock.
We claim an exemption from
registration afforded by Section 4(2) of the Securities Act of 1933, as amended
(the “Act”) since the foregoing issuances did not involve a public offering, the
recipients took the shares for investment and not resale and we took appropriate
measures to restrict transfer. No underwriters or agents were involved in the
foregoing issuance and we paid no underwriting discounts or
commissions.
In July 2010, we sold an
aggregate of 850,000 shares of our common stock for aggregate consideration of
$42,500 ($0.05 per share) to 36 offshore investors in connection with an
offshore private placement. We claim an exemption from registration
afforded by Regulation S of the Securities Act of 1933, as amended ("Regulation
S") for the above issuances since the issuances were made to non-U.S. persons
(as defined under Rule 902 section (k)(2)(i) of Regulation S), pursuant to
offshore transactions, and no directed selling efforts were made in the United
States by the issuer, a distributor, any of their respective affiliates, or any
person acting on behalf of any of the foregoing.
Item
16. EXHIBITS
The following Exhibits are
filed with this prospectus:
Exhibit Number
|
Description
|
3.1(1)
|
Articles
of Incorporation
|
3.2(1)
|
Bylaws
|
5.1*
|
Opinion
of The Loev Law Firm, PC regarding the legality of the securities being
registered
|
10.1(1)
|
Independent
Contractor Agreement with NR Consulting Services
|
10.2(1)
|
Promissory
Note with Ruthy Navon
|
23.1*
|
Consent
of GBH CPAs, PC
|
23.2*
|
Consent
of The Loev Law Firm, PC (Included in Exhibit
5.1)
|
* Filed
herewith.
(1) Filed as Exhibits to our
Registration Statement on Form S-1, filed with the Securities and Exchange
Commission on March 24, 2011 and incorporated herein by
reference.
Item
17. UNDERTAKINGS
The undersigned company
hereby undertakes:
(1) to
file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i)
|
to
include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933, as amended (the “Securities
Act”).
|
(ii)
|
to
reflect in the prospectus any facts or events arising after the effective
date of the Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering range may be
reflected in the form of a prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the change in volume and price
represents no more than a 20 percent change in the maximum aggregate
offering price set forth in the “Calculation of Registration Fee” table in
the effective registration
statement.
|
(iii)
|
To
include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material
change to such information in the registration
statement.
|
(2) that,
for the purpose of determining any liability under the Securities Act, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at the time shall be deemed to be the initial bona fide offering
thereof.
(3) to
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(4) Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to Directors, executive officers, and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
(5) 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,
executive officer, or controlling person of the registrant in the successful
defense of any action, suit, or proceeding) is asserted by such director,
executive officer, or controlling person connected with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(6) Each
prospectus filed pursuant to Rule 424(b) as part of a registration statement
relating to an offering, other than registration statements relying on 430B or
other than prospectuses filed in reliance on Rule 430A shall be deemed to be
part of and included in the registration statement as of the date it is first
used after effectiveness. Provided, however, that no statement made in a
registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the registration statement
will, as to a purchaser with a time of contract of sale prior to such first use,
supersede or modify any statement that was made in the registration statement or
prospectus that was part of the registration statement or made in any such
document immediately prior to such date of first use.
SIGNATURES
Pursuant to the requirements
of the Securities Act 1933, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the city of Fureidis, Israel.
Inventtech
Inc.
/s/
Mohammad Abdel Hadi
Mohammad Abdel Hadi,
President and Director
(Principal Executive Officer,
Principal Financial Officer and Principal Accounting
Officer)
Dated: November 9 ,
2011
POWER OF
ATTORNEY
KNOW ALL PERSONS BY THESE
PRESENTS, that each person who signature appears below constitutes and appoints
(Mohamad Abdel Hadi) as his/her true and lawful attorney-in-fact and agent, with
full power of substitution and re-substitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this registration statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or any of them, or of their
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements
of the Securities Act, this registration statement has been signed by the
following persons in the capacities and on the dates stated.
Signatures
/s/
Mohamad Abdel Hadi
Mohamad Abdel Hadi President
and Director
(Principal Executive Officer,
Principal Financial Officer and Principal Accounting
Officer)
Dated: November 9 , 2011
/s/
Eiman Saleh
Eiman Saleh, Treasurer and
Director
Dated: November 9 , 2011