Attached files

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EX-5.1 - EXHIBIT 5.1 LEGAL OPINION - Gulf West Security Network, Inc.legalopinion5_1.htm
EX-3.2 - EXHIBIT 3.2 BY-LAWS - Gulf West Security Network, Inc.bylaws3_2.htm
EX-10.1 - EXHIBIT 10.1 FORM NOTE - Gulf West Security Network, Inc.formnote10_1.htm
EX-14.1 - EXHIBIT 14.1 CODE OF ETHICS - Gulf West Security Network, Inc.codeofethics14_1.htm
EX-23.1 - EXHIBIT 23.1 CONSENT OF TAAD, LLP - Gulf West Security Network, Inc.consentofauditor23_1.htm
EX-99.1 - EXHIBIT 99.1 SUBSCRIPTION AGREEMENT - Gulf West Security Network, Inc.subscriptionagreement99_1.htm
EX-3.1 - EXHIBIT 3.1 ARTICLES OF INCORPORATION - Gulf West Security Network, Inc.articlesofincorporation3_1.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
   
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
 

SmooFi, Inc.

(Exact name of registrant as specified in its charter)
   
NEVADA
(State or other jurisdiction of incorporation or organization)
   
7310
(Primary Standard Industrial Classification Code Number)
   
46-3876675
(I.R.S. Employer Identification Number)
   
1031 Calle Recodo, Suite B, San Clemente, CA 92673, (949) 973-0684
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
 
Incorp Services, Inc.,  2360 CORPORATE CIRCLE STE 400, HENDERSON, NV, 89074
Telephone Number 1-702-866-2500
(Name, address, including zip code, and telephone number, including area code, of agent of service)
 
 
 
 
From time to time after the effective date of this Registration Statement
(Approximate date of commencement of proposed sale to the public)

 

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.  [ ]    .

 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  [ ]    .

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   [ ]    .

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer," "accelerated filer,” and "smaller reporting company" in Rule 12b-2 of the Exchange Act (Check One):

 

         
Large accelerated filer       .   Accelerated filer       .
Non-accelerated filer        . (Do not check if a smaller reporting company) Smaller reporting company   X .

 

 

 

 

CALCULATION OF REGISTRATION FEE

 

                 

 

Title of Each Class Of Securities To Be Registered

 

 

 

Amount To Be Registered

  Proposed Maximum Offering Price Per Share 1  

 

Proposed Maximum Aggregate Offering Price 1

 

 

Amount of Registration Fee

                 

Common stock, $ .001

par value per share

  2,000,000 shares   $0.125   $ 250,000   $ 32.20

 

 

1

 Estimated solely for purposed of calculating the registration fee under Rule 457(a) and (o) of the Securities Act. This registration statement shall also cover any additional shares of common stock which become issuable by reason of any stock split, stock dividend, anti-dilution provisions or similar transaction effected without the receipt of consideration which results in an increase in the number of the outstanding shares of common stock of the registrant.

 

 

 

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING, PURSUANT TO SECTION 8(a), MAY DETERMINE.

 

 

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The information contained in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

SUBJECT TO COMPLETION

PRELIMINARY PROSPECTUS DATED _____, 2014

 

2,000,000 SHARES

COMMON STOCK

SmooFi, INC.

 

SmooFi, Inc. (“SmooFi” or the “Company”) is offering for sale a maximum of 2,000,000 shares of its common stock at a fixed price of $0.125 per share. There is no minimum number of shares that must be sold by us for the offering to close, and we will retain the proceeds from the sale of any of the offered shares that are sold. The offering is being conducted on a self-underwritten, best efforts basis, which means our president and chief executive officer Mr. Sean Clarke, will attempt to sell the shares. This prospectus will permit our president and chief executive officer to sell the shares directly to the public, with no commission or other remuneration payable to him for any shares he may sell. Mr. Clarke will sell the shares and intends to offer them to friends, family members and business acquaintances. In offering the securities on our behalf, he will rely on the safe harbor from broker-dealer registration set out in Rule 3a4-1 under the Securities and Exchange Act of 1934. The intended methods of communication include, without limitations, telephone and personal contact. For more information, see the section of this prospectus entitled "Plan of Distribution".

 

The proceeds from the sale of the shares in this offering will be payable to the Company. All subscribed funds will be held in a noninterest-bearing account pending the completion of the offering of which there is no minimum number of shares that must be sold. The offering will be completed 180 days from the effective date of this prospectus, unless extended by our board of directors for an additional 180 days. All subscription agreements and checks for payment of shares are irrevocable (except as to any states that require a statutory cooling-off period or rescission right). For more information, see the section of this prospectus entitled "Plan of Distribution".

 

The Company is an development stage company with no financial resources or known source of equity or debt financing, and our independent registered auditors included an explanatory paragraph in their opinion on our financial statements as of and for the period ended December 31, 2013 that states that Company losses from operations raise substantial doubt about our ability to continue as a going concern. Because this offering is self-underwritten and there is no minimum amount of shares that must be sold, the Company may lose money from this offering if the proposed proceeds of this offering are substantially less than the estimated costs of this offering. There is currently no public or established market for our shares. Consequently, our shareholders will not be able to sell their shares in any organized market place and may be limited to selling their shares privately. Accordingly, an investment in our Company is an illiquid investment.

-3-
 

 

 

         
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE ONLY IF YOU CAN AFFORD A COMPLETE LOSS OF YOUR INVESTMENT. SEE "RISK FACTORS" BEGINNING ON PAGE 9

Number of

Shares

Offering

Price

Underwriting

Discounts &

Commissions

Proceeds to

the Company

         
Per Share 1 $0.125 $0.00 $0.125
Total 2,000,000 $250,000 $0.00 $250,000

 

This prospectus is not an offer to sell these securities, and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

 

INVESTING IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK.  YOU SHOULD PURCHASE OUR SECURITIES ONLY IF YOU CAN AFFORD A COMPLETE LOSS OF YOUR INVESTMENT.  SEE "RISK FACTORS" BEGINNING AT PAGE 9.

 

We are selling the shares without an underwriter and may not be able to sell all or any of the shares offered herein.

 

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.  THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES, AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

The date of this prospectus is ____________, 2014.

 

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PROSPECTUS SUMMARY

 

About SmooFi, Inc.

 

SmooFi, Inc. was incorporated under the laws of the State of Nevada on October 15, 2013, at which time it acquired a business plan and website from Mr. Derek Cahill. As of January 7, 2014, we had one employee, our president and chief executive officer Mr. Clarke. During the period October 15, 2013 (date of inception) through December 31, 2013, Mr. Clarke devoted between five (5) hours per week to over thirty (30) hours per week as necessary for the business. For calendar year 2014, Mr. Clarke has committed to devote at least twenty (20) hours a week to us but may increase that number as necessary to further develop the business. As of this date and through calendar year 2013, Mr. Clarke will continue to provide these services at no cost to the Company. In addition to his relationship with the Company, Mr. Clarke provides his services to an unrelated business upon which he is compensated by as an employee.

 

The Company issued 500,000 shares of its common stock to Mr. Clarke as founder’s shares. Following our formation, we issued an additional 7,250,000 shares of our common stock to Mr. Cahill, in exchange for a business plan along with a website. The cost incurred by Mr. Cahill for the business plan and professional services in preparing it was approximately $72,500 which is the value placed upon the shares issued to pay Mr. Cahill.

 

We are an early stage company (“development stage”) and have no financial resources. We have not established or attempted to establish a source of equity or debt financing, however, we intend to have discussions with a number of financial advisors and smaller investment banks regarding obtaining financing. Our auditors included an explanatory paragraph in their report on our financial statements that states that “the Company’s losses from operations raise substantial doubt about its ability to continue as a going concern.” We are at the very earliest of stages in development of our business plan. We have a significant amount of work that needs to be done and funds that need to be raised in order to compete within the marketplace. We believe that we may have an advantage with our president and chief executive officer’s industry relationships and soliciting the help of these relationships in growing our business model.

 

The Company has no current intentions, plans, arrangements, commitments or understandings to engage in a merger or acquisition with another company nor does the Company or any of its shareholders have any plans to enter into a change of control or similar type of transaction.

 

SmooFi focuses on an online market and community connecting local resources with local need. The goal is to provide a market value for basic services by aggregating these low cost services within each local market. This will maximize value for both the person or company requesting the service and for the person or company providing the service. For example, even a “stay at home mom” or “retired baby boomer” could earn an extra $5 to $100 a day by simply dropping off meals for seniors, walking a pet or home based technical support. A service provider, such as a gardener or pet caretaker can now see the exact people requesting service within a specific ZIP Code or address and what day and time they want the service. This allows the gardener or pet caretaker to optimize their work schedule and earn more income by mowing more lawns or walking more pets in the same day and allows the service requestor to receive the service on the exact day and time they want.

 

SmooFi will target busy individuals or families or for people who need tasks completed at odd hours of the day. SmooFi will work for any type of service from technical services (HDTV to computers), auto services (dings & windshields), home services (meals to pets to babysitting), real-estate services (notaries to gardening), transportation services (packages to people), personal services (exercise to haircuts), and much more. SmooFi will also target for non-profit organizations, institutions, city services and corporate services such as city parades, corporate events, non-profit activities (beach cleanup, meals on wheels, etc.) and others.

 

Customers will simply list their service on Smoofi.com by location, date, time, price, service type, service ranking and provider history. The first person who can provide that service on that date, at that time and meets the service ranking and history requirements will get the project. No bidding, no waiting a week for an auction to close, no shifting through 10 people to try to determine the best person. SmooFi creates an online service community where members track service provider history, including rankings, reliability, on time, etc. and creates an automated service request around this ranking and history.

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SmooFi will provide an online webspace (Web 2.0 features) for each user. This allows the service requestor to track and manage all their services in one place, on one website. For example, keep grocery lists, medication lists, kid and family schedules, pick up places, and more all on your own SmooFi site. You determine who can see what information or log into your account. SmooFi keeps a complete audit trail of current and future service requests, costs and will allow you to make payment to service providers via credit card or directly from your bank account. Service providers can now receive credit card payment for services they use to have to get cash for. Plus these funds will be automatically transferred into their bank account.

 

SmooFi also will allow you to receive mobile alerts when your service provider (such as a pet walker) arrives at your house and when they leave your house. SmooFi will also keep an audit trail of all your services, such as every time a meal is dropped off at your Grandpa’s house or Grandpa’s diabetes medication is delivered or when you pet is picked up and dropped off at the house.

 

SmooFi works for both service requestors and service providers. Service providers benefit by having online access to view service requests in their community by location, date, time and service request type. This allows service providers to group or aggregate their services and maximize their revenue opportunities. SmooFi also provides each service provider their own website to track and manage service requests and bids. SmooFi will also notify each service provider by email or mobile alert of new service requests within their saved search request and via mobile text messaging let the Service Requestor know when they arrived and when they completed a service. SmooFi will also allow service providers to accept credit card payments both via Smoofi and via their own website, eliminating the problem of tracking down payment for services at a later time.

 

SmooFi solves a number of market problems:

 

1) Matching local resources with local need.

2) Ability to aggregate small services and small transaction fees for basic services.

3) Provides funds and job opportunities for people with mixed schedules.

4) Provides online community to rank and compare service providers.

5) Provides Service Requestors online space for to track and manage service requests, receive mobile alerts of completed services, list services by data & time, and more.

6) Provides Service Providers online space to track service requests and accept credit card payments.

 

Our executive offices are located at 1031 Calle Recodo, Suite B, San Clemente, CA 92673, and our telephone number is 949-973-0684. We may refer to ourselves in this prospectus as "SmooFi,” the “Company,” "we," or "us.”

 

The Offering

 

SmooFi is offering for sale a maximum of 2,000,000 shares of common stock at a fixed price of $0.125 per share. There is no minimum number of shares that must be sold by us for the offering to close, and we will retain the proceeds from the sale of any of the offered shares that are sold. The offering is being conducted on a self-underwritten, best efforts basis, which means our president and chief executive officer, Mr. Clarke, will attempt to sell the shares himself. This prospectus will permit our president and chief executive officer to sell the shares directly to the public, with no commission or other remuneration payable to him for any shares he may sell. Mr. Clarke will sell the shares himself and intends to offer them to friends, family members and business acquaintances. In offering the securities on our behalf, he will rely on the safe harbor from broker-dealer registration set out in Rule 3a4-1 under the Securities and Exchange Act of 1934 (the "Exchange Act"). The intended methods of communication include, without limitation, telephone and personal contacts.

 

The proceeds from the sale of the shares in this offering will be payable to the Company.   All subscription agreements and checks are irrevocable and should be delivered to the Company at the address provided in the Subscription Agreement (see Exhibit 99.1a).

 

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All subscription funds will be held in a noninterest-bearing account subject to the completion of the offering. The offering will be completed 180 days from the effective date of this prospectus, unless extended by our board of directors for an additional 180 days. There is no minimum number of shares that must be sold. All subscription agreements and checks for payment of shares are irrevocable (except as to any states that require a statutory cooling-off period or rescission right).

 

We will deliver stock certificates attributable to shares of common stock purchased directly to the purchasers approximately 30 days after the close of the offering or as soon thereafter as practicable.

 

The offering price of the common stock has been determined arbitrarily and bears no relationship to any objective criterion of value. The price does not bear any relationship to our assets, book value, historical earnings, if any, or net worth.

 

   
Shares of common stock offered by us A maximum of 2,000,000 shares. There is no minimum number of shares that must be sold by us for the offering to close.
   
Use of proceeds SmooFi will use the proceeds from the offering to pay for professional fees and other general expenses. The total estimated costs of the offering ($55,000) may exceed the amount of offering proceeds.
   
Termination of the offering The offering will conclude when all 2,000,000 shares of common stock have been sold, or 180 days after this registration statement becomes effective with the Securities and Exchange Commission. We may at our discretion extend the offering for an additional 180 days.
   
Risk factors The purchase of our common stock involves a high degree of risk. The common stock offered in this prospectus is for investment purposes only and currently no market for our common stock exists. Please refer to the sections entitled "Risk Factors" and "Dilution" before making an investment in this stock.
   
Trading market

None. While we plan to find a market maker to file a Rule 211 application with the Financial Industry Regulatory Authority (“FINRA”) in order to apply for the inclusion of our common stock in the Over-the-Counter Bulletin Board (“OTCBB”), such efforts may not be successful and our shares may never be quoted and owners of our common stock may not have a market in which to sell the shares. Also, no estimate may be given as to the time that this application process will require.

 

Even if SmooFi's common stock is quoted or granted a listing, a market for the common shares may not develop.

 

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SUMMARY FINANCIAL DATA

 

The following summary financial data should be read in conjunction with the financial statements and the notes thereto included elsewhere in this prospectus.

 

         
Balance Sheet Data:        
    As of December 31, 2013    
    (Audited)    
         
Current assets $ 212,570    
         
Other Assets $ 72,500    
         
Current liabilities $ 227,214    
         
Stockholders’ equity $ 57,856    

 

 

         
Operating Statement Data:       For the Period October 15, 2013 (inception) to December 31, 2013
        (Audited)
Net revenues     $ -
Operating expenses     $ 31,986
Interest expense     $ 658
Net (loss)     $ (32,644)
Net (loss) per common share basic and diluted     $ (0.00)
Weighted average number of shares outstanding – basic and diluted       9,222,727

 

-8-
 

 

RISK FACTORS

 

You should be aware that there are various risks to an investment in our common stock. You should carefully consider these risk factors, together with all of the other information included in this prospectus, before you decide to invest in shares of our common stock.

 

If any of the following risk were to occur, then our business, financial condition, results of operations and/or prospects could be materially adversely affected. If that happens, the market price of our common stock, if any, could decline, and investors may lose all or part of their investment.

 

Risks Related to the Business

 

1.SmooFi has virtually no financial resources. Our independent registered auditors’ report includes an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern.

 

SmooFi is an early stage company and has virtually no financial resources. We had a cash balance of $212,570 as of December 31, 2013. We have working capital deficit of $14,644 and a stockholders’ equity of $57,856 at December 31, 2013. Our independent registered auditors included an explanatory paragraph in their opinion on our financial statements as of and for the period ended December 31, 2013 that states that Company losses from operations raise substantial doubt about its ability to continue as a going concern. We will seek additional financing beyond the amounts that may be received from this offering. The financing sought may be in the form of equity or debt financing from various sources as yet unidentified. Until we have completed our offering most if not all of our efforts will be spent in our registration efforts with some efforts in further developing our business plan, however pending the successful completion of the offering, we will seek the necessary additional financing to further pursue our business plan. No assurances can be given that we will generate sufficient revenue or obtain the necessary financing to continue as a going concern.

 

Our current resources and source of funds, which primarily consist of friends and family equity investments from unaffiliated third parties, are sufficient to keep our business operations functioning for the next three to four months. We do not have a formal agreement with our president and chief executive officer to fund the Company’s working capital needs; however our president and chief executive officer’s current plan is to do almost of the work on his own without cash compensation while he seeks other sources of funding. The Company has started the development of an initial design and framework of its proposed portal platform through Mr. Clarke’s efforts, as well as through the efforts of a software development firm which the Company has been working with on an as “needed basis.”  We currently spend between $5,000 and $10,000 per month in operational expenses not related to this offering. We have not generated any revenues from our business, and our expenses will be accrued and deferred until sufficient financing is obtained or our president and chief executive officer or others who know our president and chief executive officer loans the necessary funds to pay for these expenses. No assurances can be given that we will be able to receive funds from our president and chief executive officer or others to continue our operations beyond a month-to-month basis.

 

2. SmooFi is and will continue to be completely dependent on the services of our president and chief executive officer, Sean Clarke, the loss of whose services may cause our business operations to cease, and we will need to engage and retain qualified employees and consultants to further implement our strategy.

 

SmooFi’s operations and business strategy are completely dependent upon the knowledge and business connections of Mr. Clarke our president and chief executive officer. He is under no contractual obligation to remain employed by us. If he should choose to leave us for any reason or if he becomes ill and is unable to work for an extended period of time before we have hired additional personnel, our operations will likely fail. Even if we are able to find additional personnel, it is uncertain whether we could find someone who could develop our business along the lines described in this prospectus. We will fail without the services of Mr. Clarke or an appropriate replacement(s).

 

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We intend to acquire key-man life insurance on the life of Mr. Clarke naming us as the beneficiary when and if we obtain the resources to do so and if he is insurable. We have not yet procured such insurance, and there is no guarantee that we will be able to obtain such insurance in the future. Accordingly, it is important that we are able to attract, motivate and retain highly qualified and talented personnel and independent contractors.

 

Mr. Clarke’s current employment does not limit or restrict him from being involved with our Company, and his employment allows him the flexibility to provide at least 20 hours per week to our Company.

 

3. Because we have only recently commenced business operations, we face a high risk of business failure.

 

We were formed in October 2013. All of our efforts to date have related to developing our business plan and beginning business activities. Through December 31, 2013, we had no operating revenues. We face a high risk of business failure. The likelihood of the success of the Company must be considered in light of the expenses, complications and delays frequently encountered in connection with the establishment and expansion of new businesses and the competitive environment in which the Company will operate. There can be no assurance that future revenues from sales of the Company’s products and services will occur or be significant enough or that we will be able to sell its products and services at a profit, if at all. Future revenues and/or profits, if any, will depend on many various factors, including, but not limited to both initial and continued market acceptance of the Company’s products and services and the successful implementation of its planned growth strategy.

 

The Company has acquired and commenced internally developing our website products. We may not be able to acquire or internally develop additional products in the future because of a lack of available funds or financing to do so. In order for us to develop or acquire additional products, we must be able to secure the necessary financing, beyond just the proceeds of this offering. In the early stages of our operations, we will continue to keep costs to a minimum. The cost to develop our business plan as currently outlined will be in excess of $100,000. We have no established current sources of funds to undertake the business plan as outlined. Until we obtain funding, if ever, we will keep our operating costs as low as possible with our president and chief executive officer providing almost all of the work on his own without any cash compensation. We are using the services of a software development firm with which the Company has been working with on an as “needed basis.” They perform their services on a deferral basis not requiring us to pay them immediately. This methodology would result in our development stage extending for at least two to three years. We however believe that our services division (once developed, if at all) may begin to generate revenues earlier than the software division (once developed, if at all). If we are unable to obtain adequate funding or financing, the Company faces the ultimate likelihood of business failure. There are no assurances that we will be able to raise any funds or establish any financing program for the Company’s growth.

 

 In addition, the Company’s future profitability, if any, could be materially and adversely impacted if any one or more of its acquired or developed technological products were to experience poor operating results. The Company’s ability to achieve profitability will be dependent on the ability of its future products or services to generate sufficient operating cash flow to fund future growth and/or acquisitions. There can be no assurance that the Company’s future results of operations will be profitable or that its business strategy will be successful or even begin to generate any revenues.

 

4. We may not have or ever have the resources or ability to implement and manage growth strategy.

 

Although the Company expects to experience growth based on being able to implement its business plan, actual operations may never occur because the business plan may never be implemented because of lack of funds to do so. If the Company’s business plan and growth strategy are implemented, of which no assurances can be given, a significant strain on the Company’s management, operating systems and/or financial resources will be imposed. Failure by the Company’s management to manage this growth, if it occurs, or unexpected difficulties encountered during growth, could have a material adverse impact on the Company’s results of operations or financial condition.

 

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The Company’s ability to operate profitable product lines (if we are able to establish any product or product lines at all) will depend upon a number of factors, including (i) identifying distribution channels, (ii) generating sufficient funds from our then existing operations or obtaining third-party financing or additional capital to develop new product lines, (iii) the Company’s management team and its financial and accounting controls and (iv) staffing, training and retaining of skilled personnel, if any at all. Certain of these factors will be beyond the Company’s control and may be adversely affected by the economy or actions taken by competing companies. Moreover, potential products that may meet the Company’s product focus and other criteria for developing new products or services, if we are able to develop or acquire at all, are believed to be limited. There can be no assurance that the Company will be able to execute and manage a growth strategy effectively or at all.

 

5. We may not be successful in hiring technical personnel because of the competitive market for qualified technical people.

 

The Company's future success depends largely on its ability to attract, hire, train and retain highly qualified technical personnel to provide the Company's services. Competition for such personnel is intense. There can be no assurance that the Company will be successful in attracting and retaining the technical personnel it requires to conduct and expand its operations successfully and to differentiate itself from its competition. The Company's results of operations and growth prospects could be materially adversely affected if the Company were unable to attract, hire, train and retain such qualified technical personnel.

 

6. Our reliance on referrals from outside contacts to develop business may not be effective.

 

The Company initially will rely on our president and chief executive officer, Mr. Clarke, for a majority of its leads and believes that independent outside sales reps will also be an important source of sales referrals in the foreseeable future. However, as is typical within the industry, there are no contractual requirements that an outside sales person use or recommend the Company's professional services in connection with product sales. We currently have no contracts or agreements in place with any outside sales professional. No assurances can be given that using independent outside sales reps will result in any meaningful numbers of sales leads or referrals.

 

7. Fluctuations in our financial results make quarterly comparisons and financial forecasting difficult.

 

The Company's future or projected quarterly operating results may vary and reduced levels of earnings or losses may be experienced in one or more quarters. Fluctuations in the Company's quarterly operating results could result from a variety of factors, including changes in the levels of revenues derived from internetworking, applications development, and managed services, the size and timing of significant project orders, changes in the mix of employee and subcontractor technicians on projects, the timing of new service offerings by the Company or its competitors, new office openings by the Company, changes in pricing policies by the Company or its competitors, market acceptance of new and enhanced services offered by the Company or its competitors, changes in operating expenses, availability of qualified technical personnel, disruptions in sources of related products and services, the effect of potential acquisitions and industry and general economic factors. The Company will have limited or no control over many of these factors. The Company's expense levels we believe will be based upon, in part, on its expectations as to future or projected revenues. If revenue levels are below expectations, operating results are likely to be adversely affected.

 

Because of these fluctuations and uncertainties, our future operating results may fail to meet the expectations of investors. If this happens, any trading price of our common stock would almost certainly be materially adversely affected.

 

-11-
 

 

 

8. We will face competition from companies with significantly greater resources and name recognition.

 

The markets in which the Company will operate are characterized by intense competition from several types of solution and technical service providers. The Company expects to face further competition from new market entrants and possible alliances among competitors in the future as the convergence of information processing and telecommunications continues. Many of the Company's current and potential competitors have significantly greater financial, technical, marketing and other resources than the Company. As a result, they may be better able to respond or adapt to new or emerging technologies and changes in client requirements or to devote greater resources to the development, marketing and sales of their services than the Company. There can be no assurance that the Company will be able to compete successfully. The Company expects to encounter intense competition in the Internet/software industry. The Company will also compete for revenues with other Internet software providers. In addition, the Company will be faced with numerous competitors, both strategic and financial, in attempting to obtain competitive products. Many actual and potential competitors we believe are part of much larger companies with substantially greater financial, marketing and other resources than the Company, and there can be no assurance that the Company will be able to compete effectively against any of its future competitors.

 

9. There are significant potential conflicts of interest.

 

Our personnel will be required to commit substantial time to our affairs and, accordingly, these individual(s) (particularly our president and chief executive officer) may have conflicts of interest in allocating management time among various business activities. In the course of other business activities, certain key personnel (particularly our president and chief executive officer) may become aware of business opportunities which may be appropriate for presentation to us, as well as other entities with which they are affiliated. As such, there may be conflicts of interest in determining to which entity a particular business opportunity should be presented.

 

We cannot provide assurances that our efforts to eliminate the potential impact of conflicts of interest will be effective.

 

10. Following the effective date of our Registration Statement, of which this prospectus is a part, we will be subject to the periodic reporting requirements of Section 15(d) of the Exchange Act that will require us to incur audit fees and legal fees in connection with the preparation of such reports. These additional costs could reduce or eliminate our ability to earn a profit.

 

Following the effective date of our registration statement of which this prospectus is a part, we will be required to file periodic reports with the SEC pursuant to the Exchange Act and the rules and regulations promulgated thereunder. In order to comply with these requirements, our independent registered public accounting firm will have to review our financial statements on a quarterly basis and audit our financial statements on an annual basis. Moreover, our legal counsel will have to review and assist in the preparation of such reports. The costs charged by these professionals for such services cannot be accurately predicted at this time because factors such as the number and type of transactions that we engage in and the complexity of our reports cannot be determined at this time and will have a major affect on the amount of time to be spent by our auditors and attorneys. However, the incurrence of such costs will obviously be an expense to our operations and thus have a negative effect on our ability to meet our overhead requirements and earn a profit. We may be exposed to potential risks resulting from any new requirements under Section 404 of the Sarbanes-Oxley Act of 2002. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock, if a market ever develops, could drop significantly.

 

-12-
 

 

11. Our internal controls may be inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.

 

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

 

-pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
-provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and/or directors of the Company; and
-provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

 

Our internal controls may be inadequate or ineffective, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public. Investors relying upon this misinformation may make an uninformed investment decision.

 

12. The costs of being a public company could result in us being unable to continue as a going concern.

 

As a public company, we will have to comply with numerous financial reporting and legal requirements, including those pertaining to audits, quarterly reporting and internal controls. The costs of this compliance could be significant. If our revenues are insufficient, and/or we cannot satisfy many of these costs through the issuance of our shares, we may be unable to satisfy these costs through the normal course of business which would result in our being unable to continue as a going concern.

 

13. Having only one director limits our ability to establish effective independent corporate governance procedures and increases the control of our president and chief executive officer.

 

We have only one director who also serves as our president and chief executive officer. Accordingly, we cannot establish board committees comprised of independent members to oversee functions like compensation or audit issues. In addition, currently a vote of board members is decided in favor of the chairman (who is our president, and chief executive officer), which gives him complete control over all corporate issues.

 

Until we have a larger board of directors that would include some independent members, if ever, there will be limited oversight of our president and chief executive officer’s decisions and activities and little ability for minority shareholders to challenge or reverse those activities and decisions, even if they are not in the best interests of minority shareholders.

 

Risks Related to Our Common Stock

 

14. The Company is selling the shares offered in this prospectus without an underwriter and may not be able to sell all or any of the shares offered herein.

 

The common shares are being offered on our behalf by Mr. Clarke, our president and chief executive officer, on a best-effort basis. No broker-dealer has been retained as an underwriter and no broker-dealer is under any obligation to purchase any common shares. There are no firm commitments to purchase any of the shares in this offering. Consequently, there is no guarantee that the Company, through its president and chief executive officer, is capable of selling all, or any, of the common shares offered hereby. The sale of only a small number of shares increases the likelihood of no market ever developing for our shares.

-13-
 

 

 

15. Since there is no minimum for our offering, if only a few persons purchase shares they will lose their money without us being even able to develop a market for our shares.

 

Since there is no minimum with respect to the number of shares to be sold directly by the Company in its offering, if only a few shares are sold, we will be unable to even attempt to create a public market of any kind for our shares. In such an event, it is highly likely that the entire investment of shareowners would be lost. Even if all of the shares are purchased, we could have the same result.

 

16. The offering price of our common stock has been determined arbitrarily.

 

The price of our common stock in this offering has not been determined by any independent financial evaluation, market mechanism or by our auditors, and is therefore, to a large extent, arbitrary. Our audit firm has not reviewed management's valuation and, therefore, expresses no opinion as to the fairness of the offering price as determined by our management. As a result, the price of the common stock in this offering may not reflect the value perceived by the market. There can be no assurance that the shares offered hereby are worth the price for which they are offered and investors may, therefore, lose a portion or all of their investment.

 

17. Shareholders may be diluted significantly through our efforts to obtain financing and satisfy obligations through 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 (200,000,000) shares but unissued (188,450,000) shares assuming the sale of 2,000,000 shares in this offering. 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, further dilute common stock book value, and that dilution may be material.

 

18. The proposed aggregate proceeds of the offering are less than the estimated cost of the offering, so the Company will receive no economic benefits from the completion of the offering.

 

The proposed maximum aggregate proceeds of the offering ($250,000) are substantially more than the proposed costs to complete the offering ($55,000). However, if less than $55,000 is received there will be no financial benefit from the completion of the offering and will have to pay for some of the costs of the offering from the proceeds of operations or from other sources such as loans from officer(s) or from related and unrelated parties.

 

19. The interests of shareholders may be hurt because we can issue shares of our common stock to individuals or entities that support existing management with such issuances serving to enhance existing management’s ability to maintain control of our company.

 

Our board of directors has authority, without action or vote of the shareholders, to issue all or part of the authorized but unissued common shares. Such issuances may be issued to parties or entities committed to supporting existing management and the interests of existing management which may not be the same as the interests of other shareholders. Our ability to issue shares without shareholder approval serves to enhance existing management’s ability to maintain control of our company.

 

-14-
 

 

20. Our articles of incorporation provide for indemnification of officers and directors at our expense and limit their liability that may result in a major cost to us and hurt the interests of our shareholders because corporate resources may be expended for the benefit of officers and/or directors.

 

Our Articles of Incorporation at Article X provide for indemnification as follows: "No director or officer of the Corporation shall be personally liable to the Corporation or any of its stockholders for damages for breach of fiduciary duty as a director or officer; provided, however, that the foregoing provision shall not eliminate or limit the liability of a director or officer: (i) for acts or omissions which involve intentional misconduct, fraud or knowing violation of law; or (ii) the payment of dividends in violation of Section 78.300 of the Nevada Revised Statutes. Any repeal or modification of an Article by the stockholders of the Corporation shall be prospective only, and shall not adversely affect any limitation of the personal liability of a director or officer of the Corporation for acts or omissions prior to such repeal or modification."

 

We have been advised that, in the opinion of the SEC, indemnification for liabilities arising under federal securities laws is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification for liabilities arising under federal securities laws, other than the payment by us of expenses incurred or paid by a director, officer or controlling person in the successful defense of any action, suit or proceeding, is asserted by a director, officer or controlling person in connection with our activities, 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 indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The legal process relating to this matter if it were to occur is likely to be very costly and may result in us receiving negative publicity, either of which factors is likely to materially reduce the market and price for our shares, if such a market ever develops.

 

21. Currently, there is no established public market for our securities, and there can be no assurances that any established public market will ever develop or that our common stock will be quoted for trading and, even if quoted, it is likely to be subject to significant price fluctuations.

 

Prior to the date of this prospectus, there has not been any established trading market for our common stock, and there is currently no established public market whatsoever for our securities. A market maker has agreed to file an application with FINRA on our behalf so as to be able to quote the shares of our common stock on the OTCBB maintained by FINRA commencing upon the effectiveness of our registration statement of which this prospectus is a part and the subsequent closing of this offering. There can be no assurance that the market maker’s application will be accepted by FINRA nor can we estimate as to the time period that the application will require. We are not permitted to file such application on our own behalf. If the application is accepted, there can be no assurances as to whether

 

(i)any market for our shares will develop;
(ii)the prices at which our common stock will trade; or
(iii)the extent to which investor interest in us will lead to the development of an active, liquid trading market. Active trading markets generally result in lower price volatility and more efficient execution of buy and sell orders for investors.

 

If we become able to have our shares of common stock quoted on the OTCBB, we will then try, through a broker-dealer and its clearing firm, to become eligible with the Depository Trust Company ("DTC") to permit our shares to trade electronically. If an issuer is not “DTC-eligible,” then its shares cannot be electronically transferred between brokerage accounts, which, based on the realities of the marketplace as it exists today (especially the OTCBB), means that shares of a company will not be traded (technically the shares can be traded manually between accounts, but this takes days and is not a realistic option for companies relying on broker dealers for stock transactions - like all companies on the OTCBB. What this boils down to is that while DTC-eligibility is not a requirement to trade on the OTCBB, it is a necessity to process trades on the OTCBB if a company’s stock is going to trade with any volume. There are no assurances that our shares will ever become DTC-eligible or, if they do, how long it will take.

 

-15-
 

 

In addition, our common stock is unlikely to be followed by any market analysts, and there may be few institutions acting as market makers for our common stock. Either of these factors could adversely affect the liquidity and trading price of our common stock. Until our common stock is fully distributed and an orderly market develops in our common stock, if ever, the price at which it trades is likely to fluctuate significantly. Prices for our common stock will be determined in the marketplace and may be influenced by many factors, including the depth and liquidity of the market for shares of our common stock, developments affecting our business, including the impact of the factors referred to elsewhere in these Risk Factors, investor perception of the Company and general economic and market conditions. No assurances can be given that an orderly or liquid market will ever develop for the shares of our common stock.

 

Because of the anticipated low price of the securities being registered, many brokerage firms may not be willing to effect transactions in these securities. Purchasers of our securities should be aware that any market that develops in our stock will be subject to the penny stock restrictions. See “Plan of Distribution” and Risk Factor #22 below.

 

22. Any market that develops in shares of our common stock will be subject to the penny stock regulations and restrictions pertaining to low priced stocks that will create a lack of liquidity and make trading difficult or impossible.

 

The trading of our securities, if any, will be in the over-the-counter market which is commonly referred to as the OTCBB as maintained by FINRA. As a result, an investor may find it difficult to dispose of, or to obtain accurate quotations as to the price of our securities.

 

Rule 3a51-1 of the Exchange Act establishes the definition of a "penny stock," for purposes relevant to us, as any equity security that has a minimum bid price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to a limited number of exceptions which are not available to us. It is likely that our shares will be considered to be penny stocks for the immediately foreseeable future. This classification severely and adversely affects any market liquidity for our common stock.

 

For any transaction involving a penny stock, unless exempt, the penny stock rules require that a broker or dealer approve a person's account for transactions in penny stocks and the broker or dealer receive from the investor a written agreement to the transaction setting forth the identity and quantity of the penny stock to be purchased. In order to approve a person's account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience and objectives of the person and make a reasonable determination that the transactions in penny stocks are suitable for that person and that that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

 

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, which, in highlight form, sets forth:

 

-the basis on which the broker or dealer made the suitability determination, and
-that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

 

Disclosure also has to be made about the risks of investing in penny stock in both public offerings and in secondary trading and commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Additionally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

 

-16-
 

 

Because of these regulations, broker-dealers may not wish to engage in the above-referenced necessary paperwork and disclosures and/or may encounter difficulties in their attempt to sell shares of our common stock, which may affect the ability of selling shareholders or other holders to sell their shares in any secondary market and have the effect of reducing the level of trading activity in any secondary market. These additional sales practice and disclosure requirements could impede the sale of our securities, if and when our securities become publicly traded. In addition, the liquidity for our securities may decrease, with a corresponding decrease in the price of our securities. Our shares, in all probability, will be subject to such penny stock rules for the foreseeable future and our shareholders will, in all likelihood, find it difficult to sell their securities.

 

23. The market for penny stocks has experienced numerous frauds and abuses that could adversely impact investors in our stock.

 

Company management believes that the market for penny stocks has suffered from patterns of fraud and abuse. Such patterns include:

 

-Control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;
-Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;
-"Boiler room" practices involving high pressure sales tactics and unrealistic price projections by sales persons;
-Excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and
-Wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses.

 

24. Any trading market that may develop may be restricted by virtue of state securities “Blue Sky” laws that prohibit trading absent compliance with individual state laws. These restrictions may make it difficult or impossible to sell shares in those states.

 

There is currently no established public market for our common stock, and there can be no assurance that any established public market will develop in the foreseeable future. Transfer of our common stock may also be restricted under the securities or securities regulations laws promulgated by various states and foreign jurisdictions, commonly referred to as “Blue Sky” laws. Absent compliance with such individual state laws, our common stock may not be traded in such jurisdictions. Because the securities registered hereunder have not been registered for resale under the blue sky laws of any state, the holders of such shares and persons who desire to purchase them in any trading market that might develop in the future, should be aware that there may be significant state blue sky law restrictions upon the ability of investors to sell the securities and of purchasers to purchase the securities. These restrictions prohibit the secondary trading of our common stock. We currently do not intend to and may not be able to qualify securities for resale in at least 17 states which do not offer manual exemptions (or may offer manual exemptions but may not to offer one to us if we are considered to be a shell company at the time of application) and require shares to be qualified before they can be resold by our shareholders. Accordingly, investors should consider the secondary market for our securities to be a limited one. See also “Plan of Distribution-State Securities-Blue Sky Laws.”

 

-17-
 

 

25. Our board of directors (consisting of one person, our president and chief executive officer) has the authority, without stockholder approval, to issue preferred stock with terms that may not be beneficial to common stockholders and with the ability to affect adversely stockholder voting power and perpetuate their control over us.

 

Our articles of incorporation allow us to issue shares of preferred stock without any vote or further action by our stockholders. Our board of directors has the authority to fix and determine the relative rights and preferences of preferred stock. Our board of directors also has the authority to issue preferred stock without further stockholder approval, including large blocks of preferred stock. As a result, our board of directors could authorize the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stock and the right to the redemption of the shares, together with a premium, prior to the redemption of our common stock.

 

26. The ability of our founder, president, and chief executive officer to control our business may limit or eliminate minority shareholders’ ability to influence corporate affairs.

 

Upon the completion of this offering, our founder, Mr. Cahill, and our president, and chief executive officer, Mr. Clarke will beneficially own an aggregate of 67% of our outstanding common stock assuming the sale of all shares being registered. Because of their beneficial stock ownership, our founder and president, and chief executive officer will be in a position to continue to elect our board of directors, decide all matters requiring stockholder approval and determine our policies. The interests of our founder and president, and chief executive officer may differ from the interests of other shareholders with respect to the issuance of shares, business transactions with or sales to other companies, selection of officers and directors and other business decisions. The minority shareholders would have no way of overriding decisions made by our president and chief executive officer. This level of control may also have an adverse impact on the market value of our shares because our president and chief executive officer may institute or undertake transactions, policies or programs that may result in losses, may not take any steps to increase our visibility in the financial community and/or may sell sufficient numbers of shares to significantly decrease our price per share.

 

27. All of our presently issued and outstanding common shares are restricted under Rule 144 of the Securities Act, as amended. When the restriction on any or all of these shares is lifted, and the shares are sold in the open market, the price of our common stock could be adversely affected.

 

All of the presently outstanding shares of common stock (9,550,000 shares) 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. Rule 144 provides in essence that a person who is not an affiliate and has held restricted securities for a prescribed period of at least six (6) months if purchased from a reporting issuer or twelve (12) months (as is the case herein) if purchased from a non-reporting Company, may, under certain conditions, sell all or any of his shares without volume limitation, in brokerage transactions. Affiliates, however, may not sell shares in excess of 1% of the Company’s outstanding common stock every three months. As a result of revisions to Rule 144 which became effective on February 15, 2008, there is no limit on the amount of restricted securities that may be sold by a non-affiliate (i.e., a stockholder who has not been an officer, director or control person for at least 90 consecutive days) after the restricted securities have been held by the owner for the aforementioned prescribed period of time. A sale under Rule 144 or under any other exemption from the Act, if available, or pursuant to registration of shares of common stock of present stockholders, may have a depressive effect upon the price of the common stock in any market that may develop.

 

28. We do not expect to pay cash dividends in the foreseeable future.

 

We have never paid cash dividends on our common stock. We do not expect to pay cash dividends on our common stock at any time in the foreseeable future. The future payment of dividends directly depends upon our future earnings, capital requirements, financial requirements and other factors that our board of directors will consider. Since we do not anticipate paying cash dividends on our common stock, return on your investment, if any, will depend solely on an increase, if any, in the market value of our common stock.

-18-
 

 

 

29. Because we are not subject to compliance with rules requiring the adoption of certain corporate governance measures, our stockholders have limited protection against interested director transactions, conflicts of interest and similar matters.

 

The Sarbanes-Oxley Act of 2002, as well as rule changes proposed and enacted by the SEC, the New York and American Stock Exchanges and the Nasdaq Stock Market, as a result of Sarbanes-Oxley, require the implementation of various measures relating to corporate governance. These measures are designed to enhance the integrity of corporate management and the securities markets and apply to securities that are listed on those exchanges or the Nasdaq Stock Market. Because we are not presently required to comply with many of the corporate governance provisions and because we chose to avoid incurring the substantial additional costs associated with such compliance any sooner than legally required, we have not yet adopted these measures.

 

Because none of our directors (currently one person) are independent directors, we do not currently have independent audit or compensation committees. As a result, these directors have the ability, among other things, to determine their own level of compensation. Until we comply with such corporate governance measures, regardless of whether such compliance is required, the absence of such standards of corporate governance may leave our stockholders without protections against interested director transactions, conflicts of interest, if any, and similar matters and investors may be reluctant to provide us with funds necessary to expand our operations.

 

We intend to comply with all corporate governance measures relating to director independence as and when required. However, we may find it very difficult or be unable to attract and retain qualified officers, directors and members of board committees required to provide for our effective management as a result of Sarbanes-Oxley Act of 2002. The enactment of the Sarbanes-Oxley Act of 2002 has resulted in a series of rules and regulations by the SEC that increase responsibilities and liabilities of directors and executive officers. The perceived increased personal risk associated with these recent changes may make it more costly or deter qualified individuals from accepting these roles.

 

30. You may have limited access to information regarding our business because our obligations to file periodic reports with the SEC could be automatically suspended under certain circumstances.

 

As of the effective date of our registration statement of which this prospectus is a part, we will become subject to certain informational requirements of the Exchange Act, as amended and we will be required to file periodic reports (i.e., annual, quarterly and material events) with the SEC which will be immediately available to the public for inspection and copying. In the event during the year that our registration statement becomes effective, these reporting obligations may be automatically suspended under Section 15(d) of the Exchange Act if we have less than 300 shareholders and do not file a registration statement on Form 8-A (of which we have no current plans to file). If this occurs after the year in which our registration statement becomes effective, we will no longer be obligated to file such periodic reports with the SEC and access to our business information would then be even more restricted. After this registration statement on Form S-1 becomes effective, we may be required to deliver periodic reports to security holders as proscribed by the Exchange Act, as amended.  However, we will not be required to furnish proxy statements to security holders and our directors, officers and principal beneficial owners will not be required to report their beneficial ownership of securities to the SEC pursuant to Section 16 of the Exchange Act until we have both 500 or more security holders and greater than $10 million in assets. This means that access to information regarding our business and operations will be limited.

 

For all of the foregoing reasons and others set forth herein, an investment in our securities in any market that may develop in the future involves a high degree of risk.

 

-19-
 

 

USE OF PROCEEDS

 

SmooFi will apply the proceeds from the offering to pay for accounting fees, legal and professional fees associated with the offering. The total estimated costs of the offering ($55,000) do not exceed the maximum amount of offering proceeds ($250,000). The estimated costs of the offering, which principally relate to professional costs, are estimated to consist of:

 

     
SEC Registration fee $ 32.20
NASD filing fee   100.00
Accounting fees and expenses   5,000.00
Legal fees and expenses (relating to the preparation of our registration statement from inception to effective date and related documents)   40,000.00
Transfer agent fees   2,500.00
Blue Sky fees and expenses   5,000.00
Miscellaneous expenses   2,367.80
     
Total $ 55,000.00

 

SmooFi will pay all costs related to this offering. If the amount of offering costs exceed the amount raised, this amount in excess of the offering proceeds will be paid when necessary or otherwise accrued on the books and records of SmooFi until we are able to pay the full amounts due either from revenues or loans from our president and chief executive officer, related or unrelated parties that we may approach. A significant portion of the estimated costs of the offering ($55,000) are legal fees and expenses ($40,000). Absent sufficient revenues to pay these amounts, we will seek financial assistance either from our president and chief executive officer, or shareholders or possibly third party business associates of our president and chief executive officer who may agree to loan us the funds necessary to cover the balance of outstanding professional and related fees related to our prospectus to the extent that such liabilities cannot be extended or satisfied in other ways and the professional service providers insist upon payment. Absent the above, Mr. Clarke will attempt to seek sufficient funding personally for the amounts due and, if successful in obtaining these funds, to lend it to the Company on an interest-free basis. No formal written arrangement exists, with respect to Mr. Clarke or anyone’s commitment outside of the Company, to loan funds for this purpose.

 

Our plans will not change regardless of whether the maximum proceeds are raised, except to the extent indicated in MD&A “Liquidity” section, first paragraph.

 

THE OFFERING

 

We will spend substantially amount in costs on this offering. We will also incur ongoing continuous costs to meet the reporting requirements of a public company. These costs may very well exceed our current or anticipated revenues, significantly. However, the Company believes that the risks are worth taking because management believes, based on its own observations which are not based on any formal studies, that potential future vendors, consultants and manufacturers will have a higher regard in providing services for a public company than a small, privately-held startup company. Management’s belief is based solely on the advice and informal consultation with various business and legal professionals who are known to us and have public company experience. These discussions have led us to believe that being a public company may afford the business (management and its shareholders) with a higher degree of recognition than would be typically attained as a small private (or non-public) company and may increase its ability and/or options to obtain financing for its growth. In addition, by being a public company we believe increases the visibility of our future opportunities to raise funds or to pay vendors by issuing restricted common stock rather than cash. We cannot predict the likelihood that our observations and conclusions about the benefits of being a public company will prove accurate or beneficial to us.

 

-20-
 

 

We are offering for sale a maximum of 2,000,000 shares of common stock at a fixed price of $0.125 per share. There is no minimum number of shares that must be sold by us for the offering to close, and we will retain the proceeds from the sale of any of the offered shares that are sold. The offering is being conducted on a self-underwritten, best efforts basis, which means our president, and chief executive officer, Mr. Clarke, will attempt to sell the shares. This prospectus will permit our president and chief executive officer to sell the shares directly to the public, with no commission or other remuneration payable to him for any shares that he may sell. Mr. Clarke will sell the shares and intends to offer them to friends, family members and business acquaintances. In offering the securities on our behalf, Mr. Clarke will rely primarily on the safe harbor from broker-dealer registration set out in Rule 3a4-1 under the Securities and Exchange Act of 1934. The intended methods of communication include, without limitation, telephone and personal contacts.

 

As discussed above in connection with SmooFi’s selling efforts in the offering, Mr. Clarke will not register as a broker-dealer pursuant to Section 15 of the Exchange Act, as amended, but rather will rely upon the “safe harbor” provisions of Rule 3a4-1, promulgated under the Exchange Act, as amended. Generally speaking, Rule 3a4-1 provides an exemption from the broker-dealer registration requirements of the Exchange Act for persons associated with an issuer that participate in an offering of the issuer’s securities. Mr. Clarke is not subject to any statutory disqualification, as that term is defined in Section 3(a)(39) of the Exchange Act. Mr. Clarke will not be compensated in connection with his participation in the offering by the payment of commissions or other remuneration based either directly or indirectly on transactions in our securities. Mr. Clarke is not, nor has he been within the past 12 months, a broker or dealer, and he is not, nor has he been within the past 12 months, an associated person of a broker or dealer. At the end of the offering, Mr. Clarke will continue to primarily perform duties for the Company or on its behalf otherwise than in connection with transactions in securities. Mr. Clarke will not participate in selling an offering of securities for any issuer more than once every 12 months other than in reliance on Exchange Act Rule 3a4-1(a)(4)(i) or (iii).

 

The proceeds from the sale of the shares in this offering will be made payable to the Company. All subscription agreements and checks are irrevocable and should be delivered to the Company at the address provided on the Subscription Agreement.

 

We will receive all proceeds from the sale of up to 2,000,000 shares being offered. No proceeds will be received by any other entity other than the Company. The price per share is fixed at $0.125 for the duration of this offering.

 

All subscribed funds will be held in a noninterest-bearing account pending the completion of the offering. The offering will be completed 180 days from the effective date of this prospectus (or such earlier date when all 2,000,000 shares are sold), unless extended by our board of directors for an additional 180 days. There is no minimum number of shares that must be sold in this offering. All subscription agreements and checks for payment of shares are irrevocable (except as to any states that require a statutory cooling-off period or rescission right).

 

The Company will deliver stock certificates attributable to shares of common stock purchased directly by the purchasers within 30 days of the close of this offering or as soon thereafter as practicable.

 

We have the right to accept or reject subscriptions in whole or in part, for any reason or for no reason. All monies from rejected subscriptions will be returned immediately by us to the subscriber, without interest or deductions. Subscriptions for securities will be accepted or rejected within 48 hours after we receive them.

 

The offering may terminate on the earlier of:

 

   
i. the date when the sale of all 2,000,000 shares is completed, or
   
ii. 180 days from the effective date of this document or any extension thereto.

 

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The offering price of the common stock has been determined arbitrarily and bears no relationship to any objective criterion of value. The price does not bear any relationship to our assets, book value, historical earnings or net worth.

 

The purchase of the common stock in this offering involves a high degree of risk. The common stock offered in this prospectus is for investment purposes only, and currently no market for our common stock exists. While a market maker has agreed to file a Rule 211 application with FINRA in order to apply for the inclusion of our common stock in the OTCBB, such efforts may not be successful, and our shares may never be quoted and owners of our common stock may not have a market in which to sell their shares. Also, no estimate may be given as to the time that this application process may require.

 

If we become able to have our shares of common stock quoted on the OTCBB, we will then try, through a broker-dealer and its’ clearing firm, to become eligible with the DTC to permit our shares to be traded electronically. If an issuer is not “DTC-eligible,” its shares cannot be electronically transferred between brokerage accounts, which, based on the realities of the marketplace as it exists today (especially the OTCBB), means that shares of a issuer will not be able to be traded (technically the shares can be traded manually between accounts, but this may take days and is not a realistic option for issuers relying on broker-dealers for stock transactions - like all the companies on the OTCBB). What this boils down to is that while DTC-eligibility is not a requirement to trade on the OTCBB, it is however a necessity to efficiently process trades on the OTCBB if a company’s stock is going to trade with any volume. There are no assurances that our shares will ever become DTC-eligible or, if they do, how long it may take.

 

Please refer to the sections of this prospectus entitled "Risk Factors" and "Dilution" before making an investment in the common stock of the Company.

 

DETERMINATION OF OFFERING PRICE

 

The offering price of the common stock has been arbitrarily determined and bears no relationship to any objective criterion of value. The price does not bear any relationship to our assets, book value, any historical earnings or net worth. In determining the offering price, management considered such factors as the prospects, if any, for similar companies, anticipated results of operations, present financial resources and the likelihood of acceptance of this offering. No valuation or appraisal has been prepared for our business. We cannot assure you that a public market for our securities will develop or continue or that the securities will ever trade at a price higher than the offering price.

 

DILUTION

 

“Dilution” represents the difference between the offering price of the shares of common stock hereby being offered and the net book value per share of common stock immediately after completion of this offering. "Net book value" is the amount that results from subtracting total liabilities from total assets. In this offering, the level of dilution is increased as a result of the relatively low net book value of our issued and outstanding common stock and because the proceeds of the offering are substantially less than our estimated costs. Assuming all of the shares of common stock offered herein are sold, the purchasers in this offering may lose the entire value of their shares purchased in that each purchased share may have a negative net book value if raise less proceeds than the cost of during the offering. Net book value of existing shareholders’ shares will also decrease if the costs exceed the proceeds received from this offering.

 

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The following table illustrates the dilution to the purchasers of the common stock in this offering (as of December 31, 2013):

 

     
  Assuming the sale of:
  1,000,000 shares 2,000,000 shares
     
Offering Price Per Share $ 0.125 $ 0.125
     
Book Value Per Share Before the Offering $0.00 $0.00
     
Book Value Per Share After the Offering $0.0118 $0.0216
     
Net Increase to Original Shareholders $0.0118 $0.0216
     
Decrease in Investment to New Shareholders $ (0.1132) $ (0.1034)
     
Dilution to New Shareholders (%) 90.5% 82.7%

 

The following table summarizes the number and percentage of shares purchased the amount and percentage of consideration paid and the average price per Share paid by our existing stockholders and by new investors in this offering:

 

         
  Price Per Share Number of Shares Held Percentage of Ownership Consideration Paid
2,000,000 shares sold        
Existing shareholders $0.01 9,550,000 82.68% $18,000
Investors in this offering $0.125 2,000,000 17.32% $250,000
         
1,000,000 shares sold        
Existing shareholders $0.001 9,550,000 91.52% $18,000
Investors in this offering $0.125 1,000,000 9.48% $125,000

 

DIVIDEND POLICY

 

We have never paid cash or any other form of dividend on our common stock, and we do not anticipate paying cash dividends in the foreseeable future. Moreover, any future credit facilities might contain restrictions on our ability to declare and pay dividends on our common stock. We plan to retain all earnings, if any, for the foreseeable future for use in the operation of our business and to fund the pursuit of future growth. Future dividends, if any, will depend on, among other things, our results of operations, capital requirements and on such other factors as our board of directors, in its discretion, may consider relevant.

 

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MARKET FOR SECURITIES

 

There is no established public market for our common stock, and a public market may never develop. A market maker has agreed to file an application with FINRA so as to be able to quote the shares of our common stock on the OTCBB maintained by FINRA commencing upon the effectiveness of our registration statement of which this prospectus is a part and the subsequent closing of this offering. There can be no assurance as to whether such market maker’s application will be accepted by FINRA nor can we estimate the time period that will be required for the application process. Even if our common stock were quoted in a market, there may never be substantial activity in such market. If there is substantial activity, such activity may not be maintained, and no prediction can be made as to what prices may prevail in such market.

 

If we become able to have our shares of common stock quoted on the OTCBB, we will then try, through a broker-dealer and its’ clearing firm, to become eligible with the DTC to permit our shares to be traded electronically. If an issuer is not “DTC-eligible,” its shares cannot be electronically transferred between brokerage accounts, which, based on the realities of the marketplace as it exists today (especially the OTCBB), means that shares of a issuer will not be able to be traded (technically the shares can be traded manually between accounts, but this may take days and is not a realistic option for issuers relying on broker-dealers for stock transactions - like all the companies on the OTCBB). What this boils down to is that while DTC-eligibility is not a requirement to trade on the OTCBB, it is however a necessity to efficiently process trades on the OTCBB if a company’s stock is going to trade with any volume. There are no assurances that our shares will ever become DTC-eligible or, if they do, how long it may take.

 

We do not have common stock or equity subject to outstanding options or warrants to purchase or securities convertible into our common stock or equity. Also, 81.15% of our outstanding common stock are held by Mr. Cahill, our founder (7,250,000), and Mr. Clarke, our president, and chief executive officer, (500,000 shares). In general, under Rule 144, a holder of restricted common shares who is an affiliate at the time of the sale or any time during the three months preceding the sale can resell shares, subject to the restrictions described below.

 

If we become a public reporting company under the Exchange Act for at least 90 days immediately before the sale, then at least six months must have elapsed since those shares were acquired from us or an affiliate, and we must remain current in our filings for an additional period of six months; in all other cases, at least one year must have elapsed since the shares were acquired from us or an affiliate.

 

The number of shares sold by such person within any three-month period cannot exceed the greater of:

 

-1% of the total number of our common shares then outstanding; or

 

-The average weekly trading volume of our common shares during the four calendar weeks preceding the date on which notice on Form 144 with respect to the sale is filed with the SEC (or, if Form 144 is not required to be filed, then four calendar weeks preceding the date the selling broker receives the sell order) (This condition is not currently available to the Company because its securities do not trade on a recognized exchange).

 

Conditions relating to the manner of sale, notice requirements (filing of Form 144 with the SEC) and the availability of public information about us must also be satisfied.

 

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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 have become effective on February 15, 2008. Pursuant to the new 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 a Form 8-K addressing Item 5.06 with such information as may be required in a Form 10 Registration Statement with the SEC, before a restricted shareholder can resell their holdings in reliance on Rule 144. The Form 10 information or disclosure is equivalent to the 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 amended 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 not classified as a “shell company” under Rule 405 of the Securities Act Rule 12b-2 of the Exchange Act.

 

Current Public Information

 

In general, for sales by affiliates and non-affiliates, the satisfaction of the current public information requirement depends on whether we are a public reporting company under the Exchange Act:

-If we have been a public reporting company for at least 90 days immediately before the sale, then the current public information requirement is satisfied if we have filed all periodic reports (other than Form 8-K) required to be filed under the Exchange Act during the 12 months immediately before the sale (or such shorter period as we have been required to file those reports).
-If we have not been a public reporting company for at least 90 days immediately before the sale, then the requirement is satisfied if specified types of basic information about us (including our business, management and our financial condition and results of operations) are publicly available.

 

However, no assurance can be given as to:

 

-the likelihood of a market for our common shares developing,
-the liquidity of any such market,
-the ability of the shareholders to sell the shares, or
-the prices that shareholders may obtain for any of the shares.

 

No prediction can be made as to the effect, if any, that future sales of shares or the availability of shares for future sale will have on the market price prevailing from time to time. Sales of substantial amounts of our common shares, or the perception that such sales could occur, may adversely affect prevailing market prices of the common shares.

 

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NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

Certain matters discussed herein are forward-looking statements. Such forward-looking statements contained in this prospectus which is a part of our registration statement involve risks and uncertainties, including statements as to:

 

-our future operating results;
-our business prospects;
-any contractual arrangements and relationships with third parties;
-the dependence of our future success on the general economy;
-any possible financings; and
-the adequacy of our cash resources and working capital.

 

These forward-looking statements can generally be identified as such because the context of the statement will include words such as we “believe," “anticipate,” “expect,” “estimate” or words of similar meaning. Similarly, statements that describe our future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which are described in close proximity to such statements and which could cause actual results to differ materially from those anticipated as of the date of this prospectus. Shareholders, potential investors and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included herein are only made as of the date of this prospectus, and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

 

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MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

 

Operations

 

SmooFi, Inc., a Nevada corporation, (“SmooFi” “Company” “we,” “us,” or “our”) was incorporated on October 15, 2013. Most of the activity through December 31, 2013 involved incorporation efforts, development of our internet portal and mobile append preparation for this Offering.

 

We are a development stage company and have extremely limited financial resources. We have not established a source of equity or debt financing. Our financial statements include a note emphasizing the uncertainty of our ability to remain as a going concern.

 

Company Overview

SmooFi plans to be an online marketplace for services that includes service requestors and service providers. Service requestors (people requesting a service) name their own price, date and time for any service. A service requestor can also select qualifying criteria such as number of reviews or review rankings of a service provider. The first service provider who can provide that service, on that date, at that time and meets the service ranking requirements will get the project. No bidding, no waiting a week for an auction to close, no shifting through bidders.

SmooFi plans to match up daily job requests and fills market demand for service requests throughout their local city. SmooFi combines an online marketplace and online community that connects local resources with local need. The goal is to create jobs and provide a market value for basic services by aggregating these low cost services within each local market. This will maximize value for both the person or company requesting the service and for the person or company providing the service.

As an example, a service requestor may place a listing on SmooFi to walk their dog at 7pm on Saturday October 14th AND service provider must have at least 10 reviews (jobs) completed by SmooFi. The first service provider who has 10 reviews that accepts this service to walk the dog wins the job. If the service provider doesn’t show for the service, their service review will be lowered, if they do a good job, they will get a higher service review by the service requestor.

SmooFi can be used for hundreds of types of services including:

·Pet walking
·Car washes
·House cleaning
·Grocery and other delivery services
·Education, Music or other lessons
·Lawn mowing
·Data input
·Moving services
·And much more..

 

Additionally, SmooFi creates an online service community where members track service provider history, including rankings, reliability, on time, etc. and creates an automated service request around this ranking and history.

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SmooFi keeps a complete audit trail of current and future service requests, costs and allows you to make payment to service providers via credit card or directly from your bank account through third party payment providers such as PayPal. Service providers can now receive credit card payment for services they use to have to get cash for. Plus these funds will be automatically transferred into their bank account.

Business Model

SmooFi has two revenue models: Transaction Fees and Advertising Fees.

Transaction Revenue Model

SmooFi will receive $1 to $10 for each transaction from the service requestor after payment is received from the service provider. The transaction fee will vary based on the amount of the service.

Advertising Revenue Model

SmooFi also sends email and mobile text messages to the service provider and the service requestor reminding them about the service request. SmooFi mobile app will allow service requestors to check in and check out at each service and provide an audit trail of date and time spent on each project. These email or mobile text notifications will go back and forth between the service requestor and the service provider and include the following notifications:

·Reminder notifications (day before and day of service)
·Service provider has checked-in at the site (notification to service requestor)
·Service provider has checked-out and left the site (notification to service requestor)
·Service payment reminder sent to both parties
·Service review notification sent to both parties
·Service payment and review verification

 

For each email or mobile text that gets sent, an advertisement will be placed on the email or mobile text message. The advertisement will be based on the service provider and service requesters’ profile. For example, if a service requester submits Dog Walking services on SmooFi, they are going to receive dog related advertisements such as a coupon for dog food or a coupon for a local pet supply store. Advertisers will pay SmooFi to be part of the advertisements both on the messaging service and on SmooFi website.

Economic Issues & Government Shutdown

SmooFi looks to solve local and regional issues related to unemployment with available daily or weekly job opportunities.

According to Bloomberg News, October 10, 2013, claims for U.S. jobless benefits jumped last week to the highest level in six months, providing the first statistical warning that the damage from the partial federal shutdown is starting to ripple through the economy and the U.S. unemployment rate drops to 7.3% amid sluggish economic recovery. At 7%, that’s one in every 14 people who are unemployed.

As the U.S. economy continues to recover, there will be increase in the demand for local services that can be provided on a daily basis. SmooFi also sees a demand for families needing help with services around the house. According to the U.S. Department of Labor, six in ten women are in the labor force putting increase demand on family time and family life.

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Marketing & Growth Strategy

SmooFi will grow their online social media and through local and regional target markets. Initially, SmooFi will focus on Southern California market between San Diego, Orange, Los Angeles, Riverside and San Bernardino Counties. These counties represent over 20 million people but many utilize many of the same resources and are exposed to the same advertising media.

Each time SmooFi completes a request, the service requestor and service provider will be prompted to display the request on their Facebook, Google+ or Twitter page. By doing so, SmooFi will offer one free transaction fee for each social media push. SmooFi will also build case studies and publish these case studies online, on social media and with local newspapers.

Market Overview

The local services market is large, highly fragmented and inefficient. According to ESRI Business Informations Solutions, consumers spent more than $400 billion on local service providers in 2012. Despite the size of this market, consumers and local service providers have historically lacked an efficient way to connect. Consumers traditionally have been forced to rely on a variety of inefficient sources to find service providers such as turning to friends and neighbors for recommendations of companies to hire. These referrals are usually based on a single interaction, and it can be difficult or impossible for a consumer to confirm a word-of-mouth recommendation before making a purchase decision.

Similarly, local service providers find it difficult to find service opportunities or even service requests on day or times they are available.

While the Internet has transformed the way that information is accessed and shared, profoundly impacting the local services marketplace, it has not by itself solved these problems for either the consumer or the local service provider. Information on the Internet is inherently susceptible to fraud and bias. For example, a single nefarious competitor can embellish its own reputation or tarnish the reputations of its competitors. This can result in consumer uncertainty and doubt, particularly when searching for information regarding high cost of failure services.

We believe that solving these inefficiencies of the local services marketplace requires a trusted intermediary to compile, organize and make available reliable information on local service providers. We offer an efficient way for consumers and reputable service providers to find each other.

Competition

SmooFi doesn’t know of any service provider website where you name your own price, date and time for a service request, but there are many websites where you can place your service request online.

Craigslist – an open classified website where anyone can posts requests. Craiglist has tens of millions of users worldwide. Craigslist does not provide reviews of service providers and no ability to view service requests on a map or views service requests available that day or week and no ability to manage payments.

Care.com – focused on services for finding care for your pets, loved ones or your home. Very specialized marketplace with over 8 million members worldwide.

AngiesList – list of qualified and highly reviewed service providers. As a service requestor, it costs you money to join AngiesList and service providers are mainly related to home improvement, repair or specialized labor. AngiesList is a public company (ANGI) with over $150M in revenue.

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SmooFi Product Advantages

SmooFi’s target market are low-priced, high-volume service requests that are easy to view on a map or can be sorted and filtered in a table by type of service request, date, time and amount. SmooFi creates an online community for users to review each other and provides integrated mobile and email notifications making it easy for everyone to communicate and track their service requests.

Our Plan

Our plan to continue as a going concern is to reach the point where we begin generating sufficient revenues from our product(s) or services to meet our obligations on a timely basis. We may not be able to finish the development of any products in the future because of a lack of available funds or financing to do so. In order for us to develop or acquire any products, we must be able to secure the necessary financing, beyond just the proceeds of this offering. In the early stages of our operations, we will continue to keep costs to a minimum. The cost to develop our business plan as currently outlined will be in excess of $100,000. We have no established current sources of funds to undertake the business plan as outlined. Until we obtain funding, if ever, we will keep our operating costs as low as possible with our president and chief executive officer providing substantially all of the work on his own without any cash compensation. This methodology would result in our development stage extending for at least two to three years. If we are unable to obtain adequate funding or financing, the Company faces the ultimate likelihood of business failure. There are no assurances that we will be able to raise any funds or establish any financing program for the Company’s growth.

 

Despite the aforementioned in order to execute on our business plan, we must complete our offering. If and when we obtain the required financing, we should be able to undertake the first steps necessary in our business plan. We will seek to engage or hire additional programmers or outside consultants to enhance the abilities of our president and chief executive officer in the development and execution of our business plan steps. As mentioned above these (initial) costs could very well be in excess of $100,000 and needed as payment for services to be performed over the next 12 months as we move forward with our business plan.

 

The following outlines the steps or stages that we expect to encounter and necessary funding needed for each stage. Within each stage we have outlined the metrics or performance that we must accomplish as we move forward with our business plan. This should enable the Company to continue as a going concern as long as we are able to seek additional financing on acceptable terms.

 

Stage One (Months 1 – 3) ($15,000 est. costs)

 

·outline the scope of work and framework to initiate the development of our mobile software application
·setup development and production servers and define database architecture and APIs
·setup coding platform and coding of our software based upon the initial scope of work and development framework  
·finish building our Company web site to provide our identity and service offering to promote our software development and integration service
·create relationships with existing software development companies, software integration firms, application developers, and internet connectivity providers to establish reseller and JV opportunities which we in turn offer to potential clients

 

Stage Two (Months 3 – 5) ($15,000 est. costs)

 

·begin website and mobile app development based on scope of work and framework defined in stage one.
·initiate testing of our mobile software application to improve and refine components of our system to uphold quality and application usability
·analyze and test software for integration capabilities with other 3rd party software applications
-30-
 

 

 

Stage Three (Months 6 – 8) ($30,000 est. costs)

 

·initiate a multi-faceted marketing campaign to attract new customers for software integration services and the services/products of our reseller/JV partners
·research and refine our target market of potential customers by using geographic, demographic, and business needs analysis of specific industries
·finalize application development and software integration components of our software and commence alpha testing with select target customers and partners
·refine and improve the software based on simple feedback, bugs, fixes, and needs of our alpha testing group
·Submit app to app store(s) and online marketplaces for testing and to build awareness

 

Stage Four (Month 9 - 12) ($40,000 est. costs)

 

·release software to the marketplace in a controlled marketing campaign to specific target market as a beta release
·refine and release new versions of software based upon feedback and bug fixes, as well as meet the needs of specific industry sectors  
·increase sales and marketing oriented activities to gain new sales for the Company’s software products and software integration services, as well as the services/products of our reseller/JV partners

 

As mentioned above the time-line estimate (stages) are predicated upon the Company obtaining the necessary financing either through our offering or additional equity or debt financing. If we are not able to obtain the necessary levels of financing as determined by the above stages, we will not be able to meet or achieve any of the time-line objectives. If we complete 75%, 50%, 25% or even 10% of our additional financing objectives, we will not be able to pursue any of our time-line goals or action steps. In that case the Company will be forced to proceed on a piecemeal basis using primarily the services of our president and chief executive officer and limited use of outside contractors when and if limited funds are obtained. Our president and chief executive officer devotes in excess of twenty (20) hours a week to our continued business efforts. There is no realistic way to predict the timing or completion in that scenario.

 

Without additional financing to the offering proceeds we will not be able to pursue our business plan or its time-line objectives, and the Company may fail entirely.

 

Company’s management has, through relationships and strategic partnerships, begun work on some of the intended software products for the Internet and/or Intranet applications we believe will be desired in the marketplace. Our founder and President have primarily provided these services through the date of this prospectus. Our business plan requires further completion of these tasks which will require the hiring of employees and/or outside contractors. With the level of sophistication and expertise of our president and chief executive officer, as well as other various industry professionals that he knows, the Company should make further progress in its development of the intended products and services for its planned divisions, but currently no specific timeframe can be provided. Most if not all of these actions will be predicated on the Company obtaining the necessary financing to accomplish these steps. If financing is not available on terms reasonable to the Company and its shareholders, then the progression steps of this business plan will not occur as planned and may never occur.

 

We currently have no additional sources of financing and no commitments for financing. There are no assurances that we will obtain sufficient financing or the necessary resources to enter into contractual agreements with outside developers or sales/marketing firms. We currently do not have any cash or other resources to commence the use of outside contractors or industry service providers. If we do not receive any funding or financing, our business is likely to be maintained with limited operations for at least the next 12 months because our president and chief executive officer, will continue providing his professional services without current compensation. We do not currently have a formal agreement in place with our president and chief executive officer covering this period; however, our president and chief executive officer’s current plan is to do substantially all administrative and planning work as well as basic programming and marketing work on his own without cash compensation while he seeks other sources of funding for the Company.

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Other

As a corporate policy, we will not incur any cash obligations that we cannot satisfy with known resources, of which there are currently none except as described in “Liquidity” below and/or elsewhere in this prospectus. We believe that the perception that many people have of a public company make it more likely that they will accept restricted securities from a public company as consideration for indebtedness to them than they would from a private company. We have not performed any studies of this matter. Our conclusion is based on our own observations. However, there can be no assurances that we will be successful in any of those efforts even if we become a public entity. Additionally, the issuance of restricted shares will dilute the percentage of ownership interest of our stockholders.

 

Results from Operations

 

Development, General and Administrative Expenses

 

Development, general and administrative expenses were $31,986 for October 15, 2013 to December 31, 2013.  The expenses consisted primarily of development and professional fees.

 

Interest Expense and Other

 

Interest expense was $658 for October 15, 2013 to December 31, 2013 which related to interest accrued on borrowings

 

Liquidity

 

We will pay all costs relating to this offering estimated at $55,000. This amount will be paid as and when necessary and required or otherwise accrued on the books and records of SmooFi until we are able to pay the full amount due either from revenues or loans from a related or unrelated third party. Absent sufficient revenues to pay these amounts within six months from the date of this prospectus, we will seek financial assistance from our shareholders or a third party who may agree to loan us the funds to cover the balance of outstanding professional and related fees relating to our prospectus to the extent that such liabilities cannot be extended or satisfied in other ways and our professionals insist upon payment. If and when loaned, the loans will be evidenced by a noninterest-bearing unsecured corporate note to be treated as a loan until repaid, if and when SmooFi has the financial resources to do so. No formal written arrangement exists with respect to anyone’s commitment to loan funds for this purpose.

 

Since acquiring the business plan and website, most of our resources and work have been devoted to planning our business, web site development, mobile application development, implementing systems and controls, and completing our registration statement. When those procedures are done, which we believe will occur over the next few months, we will primarily work on our intended service offerings as well further internal development of software for which we have developed our initial framework of and completed some coding of this software. We believe that the work needed to initiate and complete our software development, attract developers, and initiate our marketing plans, including the development of a saleable product suite, will range between $80,000 and $100,000 if outside contractors and experts are used. If we are able to secure funding to outsource these procedures, of which there are no assurances, we can commence the launch of our intended services and software products to the public. If we are only able to use internal resources only (primarily consisting of the services of our president and chief executive officer), the process will take much longer and our initial launch may be limited to a much smaller target market. If we are unable to raise any funds, the development costs would have to be provided by our president and chief executive officer to the extent that he is capable and willing to provide such funds. While we have engaged the services of an established software development firm which we use on an as “needed basis” their function and assistance is limited by our availability of financing.  Our goal would be to have software product available, services available, multiple sales channels and a comprehensive corporate website up and running within one year, but there is no way of estimating what the likelihood of achieving that goal would be.

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Private capital, if sought, we believe will be sought from former business associates of our president and chief executive officer or through private investors referred to us by those same business associates. To date, we have sold 1,800,000 shares of our common stock for $18,000 through a private placement.

 

If a market for our shares ever develops, of which there can be no assurances, we may use restricted shares of our common stock to compensate employees/consultants and independent contractors wherever possible. We cannot predict the likelihood or source of raising capital or funds that may be needed to complete the development of our business plan and its stages as outlined above.

 

We have embarked upon an effort to become a public company and, by doing so, have incurred and will continue to incur additional significant expenses for legal, accounting and related services. Once we become a public entity, subject to the reporting requirements of the Exchange Act of 1934, we will incur ongoing expenses associated with professional fees for accounting, legal and a host of other expenses including annual reports and proxy statements, if required. We estimate that these costs will range up to $50,000 per year over the next few years and may be significantly higher if our business volume and transactional activity increases but should be lower during our first year of being public because our overall business volume (and financial transactions) will be lower, and we will not yet be subject to the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 until we exceed $75 million in market capitalization (if ever). These obligations will certainly reduce our ability and resources to expand our business plan and activities. We hope to be able to use our status as a public company to increase our ability to use noncash means of settling outstanding obligations (i.e. issuance of restricted shares of our common stock) and compensate independent contractors who provide professional services to us, although there can be no assurances that we will be successful in any of these efforts. We will also reduce compensation levels paid to management (if we attract or retain outside personnel to perform this function) if there is insufficient cash generated from operations to satisfy these costs.

 

There are no current plans to seek private investment. We do not have any current plans to raise funds through the sale of securities except as set forth herein. We hope to be able to use our status as a public company to enable us to use non-cash means of settling obligations and compensate persons and/or firms providing services to us, although there can be no assurances that we will be successful in any of those efforts. However, these actions, if successful, 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 SmooFi because the shares may be issued to parties or entities committed to supporting existing management. SmooFi may offer shares of its common stock to settle a portion of the professional fees incurred in connection with its registration statement. No negotiations have taken place with any professional and no assurances can be made as to the likelihood that any professional will accept shares in settlement of obligations due them.

 

As of December 31, 2013, we owed $26,556 in connection with organizational costs, professional services related to this offering, business and framework development costs incurred. We have not entered into any formal agreements, written or oral, with any vendors or other providers for payment of services or expenses and to our as “needed basis” software development firm as further described below. There are no other significant liabilities at December 31, 2013.

 

As of December 31, 2013, we received $200,000 in connection with twelve percent interest per year loans due on December 31, 2014. The proceeds are being used for basic working capital purposes and costs associated with this offering.

 

Recently Issued 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.

 

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Critical Accounting Policies

 

The preparation of financial statements and related notes requires us to make judgments, estimates, and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities.

 

An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the financial statements.

 

Financial Reporting Release No. 60 requires all companies to include a discussion of critical accounting policies or methods used in the preparation of financial statements. There are no critical policies or decisions that rely on judgments that are based on assumptions about matters that are highly uncertain at the time the estimate is made. Note 2 to the financial statements, included elsewhere in this prospectus, includes a summary of the significant accounting policies and methods used in the preparation of our financial statements.

 

Seasonality

 

We have not noted a significant seasonal impact in our business (or businesses like ours) although having just commenced operations it is too early to tell.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K, obligations under any guarantee contracts or contingent obligations. We also have no other commitments, other than the costs of being a public company that will increase our operating costs or cash requirements in the future.

 

BUSINESS

 

The Company

SmooFi plans to focus on an online market and community connecting local resources with local need. The goal is to provide a market value for basic services by aggregating these low cost services within each local market. This will maximize value for both the person or company requesting the service and for the person or company providing the service. For example, even a “stay at home mom” or “retired baby boomer” could earn an extra $5 to $100 a day by simply dropping off meals for seniors, walking a pet or home based technical support. A service provider, such as a gardener or pet caretaker can now see the exact people requesting service within a specific ZIP Code or address and what day and time they want the service. This allows the gardener or pet caretaker to optimize their work schedule and earn more income by mowing more lawns or walking more pets in the same daywhich allows the service requestor to receive the service on the exact day and time they want.

 

SmooFi is targeted for busy individuals, families and for people who need tasks completed at odd hours of the day. SmooFi also works great for any type of service from technical services (HDTV to computers), auto services (dings & windshields), home services (meals to pets to babysitting), real-estate services (notaries to gardening), transportation services (packages to people), personal services (exercise to haircuts), and much more. SmooFi also works great for non-profit organizations, institutions, city services and corporate services such as city parades, corporate events, non-profit activities (beach cleanup, meals on wheels, etc.) and others.

 

SmooFi works by simply listing your service on Smoofi.com by location, date, time, price, service type, service ranking and provider history. The first person who can provide that service on that date, at that time and meets the service ranking and history requirements will get the project. No bidding, no waiting a week for an auction to close, no shifting through 10 people to try to determine the best person. SmooFi creates an online service community where members track service provider history, including rankings, reliability, on time, etc. and creates an automated service request around this ranking and history.

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SmooFi also provides an online webspace (Web 2.0 features) for each user. This allows the Service Requestor to track and manage all their services in one place, on one website. For example, keep grocery lists, medication lists, kid and family schedules, pick up places, and more all on your own SmooFi site. You determine who can see what information or log into your account. SmooFi keeps a complete audit trail of current and future service requests, costs and allows you to make payment to service providers via credit card or directly from your bank account. Service providers can now receive credit card payment for services they use to have to get cash for. Plus these funds will be automatically transferred into their bank account.

 

SmooFi also allows you to receive mobile alerts when your service provider (such as a pet walker) arrives at your house and when they leave your house. SmooFi will also keep an audit trail of all your services, such as every time a meal is dropped off at your Grandpa’s house or Grandpa’s diabetes medication is delivered or when you pet is picked up and dropped off at the house.

 

SmooFi is a great tool for both service requestors and service providers. Service providers benefit by having online access to view service requests in their community by location, date, time and service request type. This allows service providers to group or aggregate their services and maximize their revenue opportunities. SmooFi also provides each service provider their own website to track and manage service requests and bids. SmooFi will also notify each service provider by email or mobile alert of new service requests within their saved search request and via mobile text messaging let the Service Requestor know when they arrived and when they completed a service. SmooFi will also allow service providers to accept credit card payments both via Smoofi and via their own website, eliminating the problem of tracking down payment for services at a later time.

 

SmooFi solves a number of market problems:

 

1) Matching local resources with local need.

2) Ability to aggregate small services and small transaction fees for basic services.

3) Provides funds and job opportunities for people with mixed schedules.

4) Provides online community to rank and compare service providers.

5) Provides Service Requestors online space for to track and manage service requests, receive mobile alerts of completed services, list services by data & time, and more.

6) Provides Service Providers online space to track service requests and accept credit card payments.

 

Aging Demographics – Market Pressure on Service Industry

 

SmooFi also recognizes that as the baby boomer population grows older there will be increased pressure on local communities and family members to provide basic services at all hours of the day.. This can have a tremendous impact on personal goals, family life, community funds, environmental impacts (multiple/un-needed trips) or even employee productivity.

 

SmooFi GeoCalendar

 

SmooFi technology is based both on geographic location services (GIS) and mobile technology. A service request or service provider has the ability to list, search, track and manage services by geographic location, day & time and service type. SmooFi calls this technology GeoCalendar.

 

SmooFi will have all the basic online community features for the family or individual who needs help including a dedicated website for each family or individual to list and track their schedules, medication, transportation requirements, service requests, etc. By listing this information, a demand is created in the market place for these services. Helpers can quickly match their availability via innovative Geographic Information Calendar or (GeoCalender). The site will also connect users via mobile phone, sending text message reminders, alerts, arrival and departure times, grocery lists, etc. (via text message back to the system) and integrated services to rank and track service requests and service providers.

 

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SmooFi will also have all the basic online community features for the service provider, including a detailed online profile (gender, availability, rate, ZIP Code), pictures, videos, and more. But the service provider will also have access to online website to view, track and manage the family or individual they are helping. For example, they could view the family or individual website to see class schedules, grocery list, pet pictures, etc. The service provider could also text back to the website and alert others (such as family members) on arrival time, departure time, confirm medication has been taken, etc. The text will also become part of the individual or family member website creating an online audit trail of the persons care or service, even though the service maybe provided by 1 or even one hundred different service providers throughout the years.

 

Later versions of SmooFi also create a push model for Non-Profit Organizations, City Organizations or Athletic Organizations to push requests out to the community for support. SmooFi GeoCalendar will differentiate between paying activities and non-profit activities. But in some cases non-profit or even city events may pay minimum wage for basic services (security, crowd control, parade clean-up, etc.). City organizations and non-profits currently find it hard to find basic resources to help within the community and often end up paying for these services. This later version of SmooFi will also allow people to participate in non-profit events and get the word out about special events in the local community. Services that can be Aggregated and Pushed by Location, Organization, Community, Service Type, or Date & Time.

 

·Meal Delivery (seniors / special needs)
·At Home Care
·Baby Sitting
·Non-Profit
·Organizations
·City Events (parades, conferences, etc.)
·Clean-Up / Waste
·Management
·Gardening
·Corporate Events Youth Groups
·Pickup / Drop-off Services (library books, videos, etc.)
·Athletic Organizations / Events
·Medications Grocery List
·Pet Services (dog walking, pet cleaning)
·Real Estate Services (loan documents, notary, house management)
·House Sitting
·Transportation Services Copy & Printing Services
·Laundry Services (dry cleaning, uniforms)
·Personal Organizers
·Court Services (notary, legal documents)
·Ticket and Event Services (ticket pickup/drop-off, parking, etc)
·Exercise, Diet, Nutrition
·Events / Activities
·Technology Services (HDTV Support / Repair, computer repair)
·Shipping Services (cars, boxes, people)
·Home Repairs / Home Hair Cuts
·Auto Repairs (dings, windshields, etc.)
·Lessons (Piano, 2nd language, tutoring, etc.)

 

SmooFi Revenue Model – Online & Mobile Advertising

 

SmooFi maximizes the utilization of the web portal to push local advertisements both on the website and on mobile text messages and email alerts. These advertisements will be geared both to the service provider and the service requester and towards the service that is being provided and the ZIP Code they live in.

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For example, a service request for someone to wash my dog will result in an online service request on SmooFi. When the service requestor submits the request, they may see an advertisement for dog food. When the service provider logs in and views the requested service, they may see an advertisement for dog shampoo or local pet store.

 

Also, the service requestor will receive a mobile alert when the service provider shows up at the house to walk the dog and when they leave. This mobile alert will have a mobile text advertisement such as information on a local pet store. When I approve payment online, the service provider will receive a mobile alert that the payment is made, the service provider advertisement maybe a local supply shop or additional pet walking requests from the website.

 

SmooFi technology combines online market, community and geographic information services with mobile text messaging, advertising and mobile geographic information services. Even local coupons or coupon codes can also be sent to mobile phones and integrated with each service request. Advertisers can also narrow down their advertisement by ZIP Code, service type, or day and time.

 

SmooFi target market is to tap into urban communities where many people have mixed schedules and/or want to earn extra income for weekend or general expenses. For example, many people are involved in multi-tiered marketing programs such as Juice Plus, Pampered Chef, Avon and others. Many people just want extra income to offset personal expenses. In other cases baby boomers are working at Macy’s, Crate & Barrel, as kindergarten teachers, pet walkers and many other jobs. There’s an underlying market and demand for these services. In many cases, people are necessarily happy with products such as Juice Plus or Pampered Chef, but it’s a means to an end. With SmooFi, people could find paid services they enjoy such as basic gardening, meal delivery, pet care, home computer / HDTV repair services and more. Whatever their interest, there’s a way to make additional revenue.

 

SmooFi “Get & Share” – Viral Marketing

An existing open source technology is “Get & Share”, an easy way to right click on any SmooFi service request and paste it on your MySpace, YouTube, FaceBook, iGoogle or other web community site. This technology allows SmooFi to let users grab SmooFi service requests and paste them on their most popular site. In doing so, if a Service Provider clicks on the link and accepts the Service Request from the SmooFi site, a credit will be provided back to this user. This will create a Viral Marketing program for SmooFi and extend their MySpace and FaceBook accounts allowing them to book and manage basic services both for income OR for personal or family use.

 

SmooFi Payment Engine

Similar to Google Checkout or PayPal, Smoofi payment engine will allow service providers to accept credit card transactions, either on the Smoofi website, on their own website or via email. Initially Smoofi may utilize Google’s Checkout API or PayPal’s API to handle financial transactions brining security and name brand to Smoofi’s services. Over time there is a great opportunity to create a customized payment transaction engine dedicated to the service industry.

 

Smoofi Revenue Model

 

Smoofi has the following revenue models, each will morph into a different revenue model as the site gains traction.

 

1) Transaction Fees – similar to eBay, Smoofi will charge a very small fee of $1.00 per closed listing. Users can pay fees via credit card once the transaction fee reaches $5.00 or more.

a. Viral Marketing – A $.25 credit will be provided back to those users who place SmooFi “Get & Share” ads on their Facebook pages and/or other community websites when a Service Provider clicks their link and accepts the service terms.

 

2) Keyword Advertising – using Google Adwords or Yahoo Marketing, Smoofi can provide online advertisements and mobile text message advertisements.

a. SmooFi Advertising Engine – Over time Smoofi will develop its own advertising engine where advertisers can bid on key terms at the ZIP Code level and determine if they want online or mobile text messages or both.

b. The advantage of SmooFi advertising engine is I know the exact address and interest of the service requestor. I can provide targeted ads, such as an advertisement for PetCo to all people requesting dog walks.

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3) Credit Card Transactions – using Google Checkout and/or PayPal, Smoofi will be able to generate revenue via credit card transactions.

a. Credit Card Transaction Engine – developing a custom transaction engine with a major bank or partnering with Google Checkout, Smoofi intends to have their own proprietary credit card transaction engine for service providers.

 

4) Mobile Text Messaging Services – using mobile text messaging (or emails) to notify the user of arrival and departure times of service providers will allow for targeted advertising by service type and ZIP Code.

 

5) Membership Fees – there will be no membership fees in the first version of Smoofi, but over time service providers may be charged an annual membership fee ($25 to $100) to join Smoofi. The benefits are more business, online and mobile alerts, online and mobile directions, online payment gateway to accept credit card transactions.

 

Plan of Operations

 

SmooFi will leverage two major marketing, branding and PR programs. First, SmooFi will focus on key markets such as California to launch the product. Secondly SmooFi will expand to other markets as the product is proven and tested. SmooFi will use both AM Radio advertising to target people in traffic during peak times who have limited time and need basic services completed at specific dates and time and are willing to pay a $1.00 for this service. SmooFi will also leverage Web 2.0 services to create viral marketing program throughout the web integrating SmooFi services with other major community websites such as MySpace and FaceBook.

 

Target Market

Consumer Target Market

Activities transcend markets: in-home visits, transportation, meals, store runs, (baby) sitting, tutoring, pet care, tutoring, chaperon, and more. Target market applies to individuals or families with someone that is:

• Senior or Elderly

• Special Needs – autistic kids (autism on the rise), mental / brain injuries (brain injuries on the rise),

• School Kids (K-12)

• Pets

• Babies (0 to 5)

• Etc.

 

PR PR PR is the way to get the word out!

Helper Target Market

The consumer target market needs to match the helpers:

• Job seekers

• Care givers

• Pet sitters

• Baby sitters

• Stay at home moms

• Part time employees

• Non-profit organizations

MySpace, YouTube, Monster, HotJobs, Career Builder, etc. advertise for thousands of part time jobs!

 

Competitive Conditions

There are many similar online and offline technologies similar to SMOOFI such as Craig’s List, Kudzu, eBay Auctions, Penny Saver, and others. But there are no online websites that focus only on the service industry as an eCommerce / classifieds / auction marketplace. Craig’s List does not have an eCommerce or credit card system and there is no member feedback or rating system.

 

SMOOFI targets the underlining service industry, setting up a system for online services by ZIP Code that service providers can quickly qualify and identify leads by price, location and service type. Service requestors can quickly list services and find qualified candidates based on feedback rating, length of membership, and pay via credit card. Smoofi is safe, secure, easy to use, and self-regulating community based on an eBay type rating system.

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Market Demand

Demographics - A Growing Problem for the Service Industry The historical trend of the older population growing at a faster pace than the total population will continue well into the 21st Century. Projections indicate an 18 percent increase of the total population between 2010 and 2030, but a 78 percent increase of the older population. This differential growth will result in nearly 1 in 5 Americans being aged 65and older in 2030, compared with about 1 in 8 in 2010

 

Intellectual Property

 

We have no patents or trademarks.

 

Government Regulation and Industry Standards

 

There are an increasing number of laws and regulations in the United States and abroad pertaining to communications and commerce on the Internet. In addition, a number of legislative and regulatory proposals are under consideration by federal, state, local and foreign governments. Laws or regulations may be adopted with respect to the Internet relating to liability for information retrieved from or transmitted over the Internet, user privacy, taxation and the quality of products and services. Moreover, the application to the Internet of existing laws governing issues such as intellectual property ownership and infringement, pornography, obscenity, libel, gaming, employment and personal privacy is uncertain and developing. Any such legislation or regulation, or the application or interpretation of existing laws, may decrease the growth in the use of the Internet in general, prevent us from delivering our content in different parts of the world and increase our costs of selling products or otherwise operating our business.

 

Furthermore, legislation regulating online content could limit the growth in use of the Internet generally and decrease the overwhelming acceptance of the Internet as an advertising and e-commerce medium.

 

Websites typically place identifying data, or cookies, on a user's hard drive without the user's knowledge or consent. We and many other Internet companies will use cookies for a variety of different reasons, including the collection of data derived from the user's Internet activity. Any reduction or limitation in the use of cookies could limit the effectiveness of our sales and marketing efforts. Most currently available Web browsers allow users to remove cookies at any time or to prevent cookies from being stored on their hard drive.

 

Some privacy advocates and governmental bodies have suggested limiting or eliminating the use of cookies. In addition, the European Union and many countries within the EU have adopted privacy directives or laws that strictly regulate the collection and use of information regarding Internet users that is identifiable to particular individuals. Privacy legislation has been proposed in the US as well, and the US Federal Trade Commission has taken action against website operators that do not comply with state privacy policies. These and other governmental efforts may limit our ability to target advertising or collect and use information regarding the use of our websites. Fears relating to a lack of privacy could also result in a reduction in the number of our users and subscribers which could harm our business and financial results.

 

Employees

 

As of January 7, 2014, we had one employee which serves as our president, and chief executive officer, Mr. Clarke. During calendar year ending December 31, 2014 (dependent on financing and available working capital), Mr. Clarke will devote at least twenty (20) hours a week to us and may increase the number of hours as necessary. Mr. Clarke is allowed to devote this time to our Company as he is not limited or restricted from being involved with us by his current employer.  Mr. Clarke is under no contractual agreement with the Company. However, our president, and chief executive officer’s current plan is to provide all administrative and planning work as well as perform the basic coding for software and initial marketing efforts on his own without any cash compensation while he seeks other sources of funding for the Company and its business plan.

 

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Mr. Clarke has been initially compensated through the form of common stock or equity in the Company, and will continue to forego cash payments for his services until the Company is profitable. It is his belief that these actions are in the best interest of the Company and its prospective investors who may invest in this offering. Beyond Mr. Clarke’s services, we have currently been working with an independent software development firm, which has been utilized on an “as needed” basis, and we may in the future use other independent contractors and consultants to assist in many aspects of our business on an “as needed” or per project basis pending adequate financial resources being available or their ability to defer payment for their services.

 

There is no written employment contract or agreement in place with our president, and chief executive officer.

 

Property

 

Our office and mailing address is 1031 Calle Recodo, Suite B, San Clemente, CA 92673. The space is provided to us by Mr. Clarke. Mr. Clarke incurs no incremental costs as a result of our using the space. Therefore, he does not charge us for its use. There is no written lease agreement.

 

Litigation

 

We are not party to any pending, or to our knowledge, threatened litigation of any type.

 

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DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

 

Our management consists of:

 

     
Name Age Title
Sean Clarke 36 President, CEO, principal executive officer, treasurer, chairman, principal financial officer and principal accounting officer

 

Sean Clarke – Mr. Clarke is our President and CEO since October 2013. He oversees operations, accounting and financial aspects of the company to accomplish strategic, marketing and visionary actions. In 2013, he was CEO of an e-commerce based public company E-PUNK. Mr. Clarke has an extensive accounting, and IT background at Omega Accounting Solutions were he functioned as a Controller and IT manager from 2009 to 2011. Mr. Clarke was assistant manager for a $15M division (Ticker YELL.L) from 2000 to2006. Mr. Clarke is a provost’s scholarship winner from Chapman University 2000 to 2002, and was the first member of his cohort to complete a masters degree from University San Diego 2007. Mr. Clarke is currently a member of Net Impact, an organization for corporate social responsibility, and corporate to community relations.

 

Possible Potential Conflicts

 

The OTCBB on which we plan to have our shares of common stock quoted does not currently have any director independence requirements.

 

No member of management will be required by us to work on a full time basis. Accordingly, certain conflicts of interest may arise between us and our officer(s) and director(s) in that they may have other business interests in the future to which they devote their attention, and they may be expected to continue to do so although management time must also be devoted to our business. As a result, conflicts of interest may arise that can be resolved only through their exercise of such judgment as is consistent with each officer's understanding of his/her fiduciary duties to us.

 

Currently we have only one officer and one director (both of whom are the same person), and will seek to add additional officer(s) and/or director(s) as and when the proper personnel are located and terms of employment are mutually negotiated and agreed, and we have sufficient capital resources and cash flow to make such offers.

 

We cannot provide assurances that our efforts to eliminate the potential impact of conflicts of interest will be effective.

 

Code of Business Conduct and Ethics

 

In October 2013, we adopted a Code of Ethics and Business Conduct which is applicable to our future employees and which also includes a Code of Ethics for our founder, president, chief executive officer, and principal financial officers and any persons performing similar functions. A code of ethics is a written standard designed to deter wrongdoing and to promote:

 

·honest and ethical conduct,
·full, fair, accurate, timely and understandable disclosure in regulatory filings and public statements,
·compliance with applicable laws, rules and regulations,
·the prompt reporting violation of the code, and
·accountability for adherence to the code.

 

A copy of our Code of Business Conduct and Ethics has been filed with the Securities and Exchange Commission as Exhibit 14.1 to our Registration Statement of which this prospectus is a part.

 

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Board of Directors

 

All directors will hold office until the completion of their term of office, which is not longer than one year, or until their successors have been elected. Our current directors’ term of office expires on October 15, 2014. All officers are appointed annually by the board of directors subject to existing employment agreements (of which there are currently none) and will serve at the discretion of the board. Currently, directors receive no compensation for their role as directors but may receive compensation for their role as officers.

 

As long as we have no additional directors besides our founder, president, chief executive officer, and Chairman, all votes on issues are resolved in favor of the Chairman’s vote.

 

Involvement in Certain Legal Proceedings

 

Except as described below, during the past ten years, no present director, executive officer or person nominated to become a director or an executive officer of SmooFi:

 

1.had a petition under the federal bankruptcy laws or any state insolvency law filed by or against, or a receiver, fiscal agent or similar officer appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;

 

2.was convicted in a criminal proceeding or subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

 

3.was subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining his from or otherwise limiting his involvement in any of the following activities:

 

i.acting as a futures commission merchant, introducing broker, commodity trading advisor commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;
ii.engaging in any type of business practice; or
iii.engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws; or

 

4.was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of an federal or state authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (3) (i), above, or to be associated with persons engaged in any such activity; or

 

5.was found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and for which the judgment has not been reversed, suspended or vacated.

 

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Committees of the Board of Directors

 

Concurrent with having sufficient members and resources, the SmooFi board of directors will establish an audit committee and a compensation committee. We believe that we will need a minimum of five directors to have effective committee systems. The audit committee will review the results and scope of the audit and other services provided by the independent auditors and review and evaluate the system of internal controls. The compensation committee will manage any stock option plan we may establish and review and recommend compensation arrangements for the officers. No final determination has yet been made as to the memberships of these committees or when we will have sufficient members to establish committees. See “Executive Compensation” hereinafter.

 

All directors will be reimbursed by SmooFi for any expenses incurred in attending directors' meetings provided that SmooFi has the resources to pay these fees. SmooFi will consider applying for officers and directors liability insurance at such time when it has the resources to do so.

 

Summary Executive Compensation Table

 

The following table shows, for the period from October 15, 2013 (inception) to December 31, 2013, compensation awarded to or paid to, or earned by, our Chief Executive Officer (the “Named Executive Officer”).

                   
SUMMARY COMPENSATION TABLE
Name
and 
principal
position 
(a)
Year 
(b)
Salary
($) 
(c)
Bonus
($)
(d)
Stock
Awards
($)
(e)
Option
Awards
($)
(f)
Non-Equity
Incentive
Plan
Compensation
($)
(g)
Nonqualified
Deferred
Compensation
Earnings
($) 
(h)
All Other
Compensation
($)
(i)

Total

($) 
(j)

1 Sean Clarke

CEO, CFO and Director

 2013 - - - - - - - -

 

There is no formal employment arrangement with Mr. Clarke at this time. Mr. Clarke’s compensation has not been fixed or based on any percentage calculations. He will make all decisions determining the amount and timing of his compensation and, for the immediate future, has elected not to receive any compensation which permits us to meet our financial obligations. Mr. Clarke’s compensation amount may be formalized if and when the Company completes this offering and obtains any future financing beyond the offering.

 

1Mr. Clarke received 500,000 shares of common stock of the Company as founder shares. The Company does not intend on issuing any additional shares to Mr. Clarke for organizational services or for his activities as an officer or director for the foreseeable future.

 

Grants of Plan-Based Awards Table

 

None of our named executive officers received any grants of stock, option awards or other plan-based awards during the period ended December 31, 2013 except as stated above. The Company has no activity with respect to these awards.

 

Options Exercised and Stock Vested Table

 

None of our named executive officers exercised any stock options, and no restricted stock units, if any, held by our named executive officers vested during the period ended December 31, 2013. The Company has no activity with respect to these awards.

 

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Outstanding Equity Awards at Fiscal Year-End Table

 

None of our named executive officers had any outstanding stock or option awards as of December 31, 2013 that would be compensatory to the officer. The Company has not issued any awards to its named executive officers. The Company and its Board of Directors may grant awards as it sees fit to its employees as well as key consultants.

 

PRINCIPAL SHAREHOLDERS

 

As of December 31, 2013, we had 9,550,000 shares of common stock outstanding which are held by six shareholders. The chart below sets forth the ownership, or claimed ownership, of certain individuals and entities. This chart discloses those persons known by the board of directors to have, or claim to have, beneficial ownership of more than 5% of the outstanding shares of our common stock as of December 31, 2013; of all directors and executive officers of SmooFi; and of our directors and officers as a group.

 

 

   

Percent of Common Stock Owned

 

Name

Number

of Shares(1)

Prior to

Offering(1)

Assuming

1,000,000 Shares

Are Sold(1)

Assuming

Maximum

Offering

is Sold(1)

         
Derek Cahill 7,250,000 75.9% 68.72% 62.8%
         
Sean Clarke(2) 500,000 5.24% 4.74% 4.3%

All officers and directors

as a group (one person)

500,000 5.24% 4.74% 4.3%

 

(1)The percent of common stock owned is calculated using the sum of (A) the number of shares of common stock owned and (B) the number of warrants and options of the Beneficial Owner that are exercisable within 60 days, as the numerator, and the sum of (Y) the total number of shares of common stock outstanding (and the number of warrants and options of the Beneficial Owner that are exercisable within 60 days, as the denominator.
(2)Officer and director of the Company. Mr. Clarke received 500,000 founder’s shares of the Company on October 15, 2013.

 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

The only promoters of SmooFi would be Mr. Clarke, president, and chief executive officer, and principal financial officer.  

 

Our office and mailing address is 1031 Calle Recodo, Suite B, San Clemente, CA 92673. The space is provided to us by Mr. Clarke. Mr. Clarke incurs no incremental costs as a result of our using the space. Therefore, he does not charge us for its use. There is no written lease agreement.

 

The Company issued 500,000 shares of its common stock to its president, and chief executive officer, Mr. Clarke, and chief financial officer for founder’s shares.

 

 

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DESCRIPTION OF CAPITAL STOCK

 

Introduction

 

We were incorporated under the laws of the State of Nevada on October 15, 2013. SmooFi is authorized to issue 200,000,000 shares of common stock and 5,000,000 shares of preferred stock.

 

Preferred Stock

 

Our certificate of incorporation authorizes the issuance of 5,000,000 shares of preferred stock with designations, rights and preferences determined from time to time by our board of directors. No shares of preferred stock have been designated, issued or were outstanding as of December 31, 2013. Accordingly, our board of directors is empowered, without stockholder approval, to issue up to 5,000,000 shares of preferred stock with voting, liquidation, conversion, or other rights that could adversely affect the rights of the holders of the common stock. Although we have no present intention to issue any shares of preferred stock, there can be no assurance that we will not do so in the future.

 

Among other rights, our board of directors may determine, without further vote or action by our stockholders:

 

·the number of shares and the designation of the series;
·whether to pay dividends on the series and, if so, the dividend rate, whether dividends will be cumulative and, if so, from which date or dates, and the relative rights of priority of payment of dividends on shares of the series;
·whether the series will have voting rights in addition to the voting rights provided by law and, if so, the terms of the voting rights;
·whether the series will be convertible into or exchangeable for shares of any other class or series of stock and, if so, the terms and conditions of conversion or exchange;
·whether or not the shares of the series will be redeemable and, if so, the dates, terms and conditions of redemption and whether there will be a sinking fund for the redemption of that series and, if so, the terms and amount of the sinking fund; and
·the rights of the shares of the series in the event of our voluntary or involuntary liquidation, dissolution or winding up and the relative rights or priority, if any, of payment of shares of the series.

 

We presently do not have plans to issue any shares of preferred stock. However, preferred stock could be used to dilute a potential hostile acquirer. Accordingly, any future issuance of preferred stock or any rights to purchase preferred shares may have the effect of making it more difficult for a third party to acquire control of us. This may delay, defer or prevent a change of control in our Company or an unsolicited acquisition proposal. The issuance of preferred stock also could decrease the amount of earnings attributable to, and assets available for distribution to, the holders of our common stock and could adversely affect the rights and powers, including voting rights, of the holders of our common stock.

 

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Common Stock

 

Our certificate of incorporation authorizes the issuance of 200,000,000 shares of common stock. There are 9,550,000 shares of our common stock issued and outstanding at December 31, 2013 that is held by six shareholders. The holders of our common stock:

 

·have equal ratable rights to dividends from funds legally available for payment of dividends when, as and if declared by the board of directors;
·are entitled to share ratably in all of the assets available for distribution to holders of common stock upon liquidation, dissolution or winding up of our affairs;
·do not have preemptive, subscription or conversion rights, or redemption or access to any sinking fund; and
·are entitled to one non-cumulative vote per share on all matters submitted to stockholders for a vote at any meeting of stockholders

 

See also Plan of Distribution regarding negative implications of being classified as a “Penny Stock.”

 

Authorized but Un-issued Capital Stock

 

Nevada law does not require stockholder approval for any issuance of authorized shares. These additional shares may be used for a variety of corporate purposes, including future public offerings to raise additional capital or to facilitate corporate acquisitions.

 

One of the effects of the existence of un-issued and unreserved common stock (and/or preferred stock) may be to enable our board of directors to issue shares to persons friendly to current management, which issuance could render more difficult or discourage an attempt to obtain control of our board by means of a merger, tender offer, proxy contest or otherwise, and thereby protect the continuity of our management and possibly deprive the stockholders of opportunities to sell their shares of our common stock at prices higher than prevailing market prices.

 

Shareholder Matters

 

As an issuer of "penny stock" the protection provided by the federal securities laws relating to forward looking statements does not apply to us if our shares are considered to be penny stocks which they currently are and probably will be for the foreseeable future. Although the federal securities law provide a safe harbor for forward-looking statements made by a public company that files reports under the federal securities laws, this safe harbor is not available to issuers of penny stocks. As a result, we will not have the benefit of this safe harbor protection in the event of any claim that the material provided by us, including this prospectus, contained a material misstatement of fact or was misleading in any material respect because of our failure to include any statements necessary to make the statements not misleading.

 

As a Nevada corporation, we are subject to the Nevada Revised Statutes ("NRS" or "Nevada law"). Certain provisions of Nevada law described below create rights that might be deemed material to our shareholders. Other provisions might delay or make more difficult acquisitions of our stock or changes in our control or might also have the effect of preventing changes in our management or might make it more difficult to accomplish transactions that some of our shareholders may believe to be in their best interests.

 

Directors' Duties. Section 78.138 of the Nevada law allows our directors and officers, in exercising their powers to further our interests, to consider the interests of our employees, suppliers, creditors and customers. They can also consider the economy of the state and the nation, the interests of the community and of society and our long-term and short-term interests and shareholders, including the possibility that these interests may be best served by our continued independence. Our directors may resist a change or potential change in control if they, by a majority vote of a quorum, determine that the change or potential change is opposed to or not in our best interest. Our board of directors may consider these interests or have reasonable grounds to believe that, within a reasonable time, any debt which might be created as a result of the change in control would cause our assets to be less than our liabilities, render us insolvent, or cause us to file for bankruptcy protection

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Dissenters' Rights. Among the rights granted under Nevada law which might be considered material is the right for shareholders to dissent from certain corporate actions and obtain payment for their shares (see Nevada Revised Statutes ("NRS") 92A.380-390). This right is subject to exceptions, summarized below, and arises in the event of mergers or plans of exchange. This right normally applies if shareholder approval of the corporate action is required either by Nevada law or by the terms of the articles of incorporation.

 

A shareholder does not have the right to dissent with respect to any plan of merger or exchange, if the shares held by the shareholder are part of a class of shares which are:

 

·listed on a national securities exchange,
·included in the national market system by the Financial Industry Regulatory Authority (“FINRA”), or
·held of record by not less than 2,000 holders.

 

This exception notwithstanding, a shareholder will still have a right of dissent if it is provided for in the articles of incorporation or if the shareholders are required under the plan of merger or exchange to accept anything but cash or owner's interests, or a combination of the two, in the surviving or acquiring entity, or in any other entity falling in any of the three categories described above in this paragraph.

 

Inspection Rights. Nevada law also specifies that shareholders are to have the right to inspect company records (see NRS 78.105). This right extends to any person who has been a shareholder of record for at least six months immediately preceding his demand. It also extends to any person holding, or authorized in writing by the holders of, at least 5% of outstanding shares. Shareholders having this right are to be granted inspection rights upon five days' written notice. The records covered by this right include official copies of:

 

i.the articles of incorporation, and all amendments thereto,

 

ii.bylaws and all amendments thereto; and

 

iii.a stock ledger or a duplicate stock ledger, revised annually, containing the names, alphabetically arranged, of all persons who are stockholders of the corporation, showing their places of residence, if known, and the number of shares held by them, respectively.

 

In lieu of the stock ledger or duplicate stock ledger, Nevada law provides that the corporation may keep a statement setting out the name of the custodian of the stock ledger or duplicate stock ledger, and the present and complete post office address, including street and number, if any, where the stock ledger or duplicate stock ledger specified in this section is kept.

 

Control Share Acquisitions. Sections 78.378 to 78.3793 of Nevada law contain provisions that may prevent any person acquiring a controlling interest in a Nevada-registered company from exercising voting rights. To the extent that these rights support the voting power of minority shareholders, these rights may also be deemed material. These provisions will be applicable to us as soon as we have 200 shareholders of record with at least 100 of these having addresses in Nevada as reflected on our stock ledger. While we do not yet have the required number of shareholders in Nevada or elsewhere, it is possible that at some future point we will reach these numbers and, accordingly, these provisions will become applicable. We do not intend to notify shareholders when we have reached the number of shareholders specified under these provisions of Nevada law. Shareholders can learn this information pursuant to the inspection rights described above and can see the approximate number of our shareholders by checking under Item 5 of our annual reports on Form 10-K. This form is filed with the Securities and Exchange Commission within 90 days after the close of each fiscal year hereafter. You can view these and our other filings at www.sec.gov in the "EDGAR" database.

 

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Under NRS Sections 78.378 to 78.3793, an acquiring person who acquires a controlling interest in company shares may not exercise voting rights on any of these shares unless these voting rights are granted by a majority vote of our disinterested shareholders at a special shareholders' meeting held upon the request and at the expense of the acquiring person. If the acquiring person's shares are accorded full voting rights and the acquiring person acquires control shares with a majority or more of all the voting power, any shareholder, other than the acquiring person, who does not vote for authorizing voting rights for the control shares, is entitled to demand payment for the fair value of their shares, and we must comply with the demand. An "acquiring person" means any person who, individually or acting with others, acquires or offers to acquire, directly or indirectly, a controlling interest in our shares. "Controlling interest" means the ownership of our outstanding voting shares sufficient to enable the acquiring person, individually or acting with others, directly or indirectly, to exercise one-fifth or more but less than one-third, one-third or more but less than a majority, or a majority or more of the voting power of our shares in the election of our directors. Voting rights must be given by a majority of our disinterested shareholders as each threshold is reached or exceeded. "Control shares" means the company's outstanding voting shares that an acquiring person acquires or offers to acquire in an acquisition or within 90 days immediately preceding the date when the acquiring person becomes an acquiring person.

 

These Nevada statutes do not apply if a company's articles of incorporation or bylaws in effect on the tenth day following the acquisition of a controlling interest by an acquiring person provide that these provisions do not apply.

 

According to NRS 78.378, the provisions referred to above will not restrict our directors from taking action to protect the interests of our Company and its shareholders, including without limitation, adopting or executing plans, arrangements or instruments that deny rights, privileges, power or authority to a holder of a specified number of shares or percentage of share ownership or voting power. Likewise, these provisions do not prevent directors or shareholders from including stricter requirements in our articles of incorporation or bylaws relating to the acquisition of a controlling interest in the Company.

 

Our articles of incorporation and bylaws do not exclude us from the restrictions imposed by NRS 78.378 to 78.3793, nor do they impose any more stringent requirements.

 

Certain Business Combinations. Sections 78.411 to 78.444 of the Nevada law may restrict our ability to engage in a wide variety of transactions with an "interested shareholder." As was discussed above in connection with NRS 78.378 to 78.3793, these provisions could be considered material to our shareholders, particularly to minority shareholders. They might also have the effect of delaying or making more difficult acquisitions of our stock or changes in our control. These sections of NRS are applicable to any Nevada company with 200 or more stockholders of record and that has a class of securities registered under Section 12 of the 1934 Securities Exchange Act, unless the company's articles of incorporation provide otherwise. By this registration statement, we are not registering our common stock under Section 12(g) of the Exchange Act. Accordingly, upon the effectiveness of this registration statement on Form S-1 we not will be subject to these statutes.

 

These provisions of Nevada law prohibit us from engaging in any "combination" with an interested stockholder for three years after the interested stockholder acquired the shares that cause him/her to become an interested shareholder, unless he had prior approval of our board of directors. The term "combination" is described in NRS 78.416 and includes, among other things, mergers, sales or purchases of assets, and issuances or reclassifications of securities. If the combination did not have prior approval, the interested shareholder may proceed after the three-year period only if the shareholder receives approval from a majority of our disinterested shares or the offer meets the requirements for fairness that are specified in NRS 78.441-42. For the above provisions, "resident domestic corporation" means a Nevada corporation that has 200 or more shareholders. An "interested stockholder" is defined in NSR 78.423 as someone who is either:

 

·the beneficial owner, directly or indirectly, of 10% or more of the voting power of our outstanding voting shares; or
·our affiliate or associate and who within three years immediately before the date in question, was the beneficial owner, directly or indirectly, of 10% or more of the voting power of our outstanding shares at that time.
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Amendments to Bylaws - Our articles of incorporation provide that the power to adopt, alter, amend, or repeal our bylaws is vested exclusively with the board of directors. In exercising this discretion, our board of directors could conceivably alter our bylaws in ways that would affect the rights of our shareholders and the ability of any shareholder or group to effect a change in our control; however, the board would not have the right to do so in a way that would violate law or the applicable terms of our articles of incorporation.

 

Transfer Agent

 

The Transfer Agent for our common stock is Issuer Direct Corporation, 500 Perimeter Park Dr, Suite D

Morrisville, NC 27560. Its telephone number is 919-481-4000.

 

PLAN OF DISTRIBUTION

 

There is no public market for our common stock. Our common stock is currently held by one shareholder. Therefore, the current and potential market for our common stock is limited and the liquidity of our shares may be severely limited. A market maker has agreed to file an application with FINRA so as to be able to quote the shares of our common stock on the OTCBB maintained by FINRA commencing upon the effectiveness of our registration statement of which this prospectus is a part and the subsequent closing of this offering. There can be no assurance as to whether such market maker’s application will be accepted by FINRA nor can we estimate the time period that will be required for the application process. In the absence of quotation or listing, no market is available for investors in our common stock to sell their shares. We cannot provide any assurance that a meaningful trading market will ever develop or that our common stock will ever be quoted or listed for trading.

 

If the shares of our common stock ever become tradable, the trading price of our common stock could be subject to wide fluctuations in response to various events or factors, many of which are beyond our control. As a result, investors may be unable to sell their shares at or greater than the price at which they are being offered.

 

This offering will be conducted on a best-efforts basis utilizing the efforts of Mr. Clarke, president, and chief executive officer of the Company. Potential investors include, but are not limited to, family, friends and acquaintances of Mr. Clarke. The intended methods of communication include, without limitation, telephone calls and personal contact. In his endeavors to sell this offering, Mr. Clarke will not use any mass advertising methods such as the internet or print media.

 

Funds received in connection with the sale of our securities will be transmitted immediately into an escrow account. There can be no assurance that all, or any, of the shares will be sold.

 

Mr. Clarke will not receive commissions for any sales originated on our behalf. We believe that Mr. Clarke is exempt from registration as a broker under the provisions of Rule 3a4-1 promulgated under the Exchange Act. In particular, Mr. Clarke:

 

1.Is not subject to a statutory disqualification, as that term is defined in Section 3(a)39 of the Act, at the time of his participation;

 

a.Is not to be compensated in connection with his participation by the payment of commissions or other remuneration based either directly or indirectly on transactions in securities;

b. Is not an associated person of a broker or dealer; and

c. Meets the conditions of the following:

 

i.Primarily performs, or is intended primarily to perform at the end of the offering, substantial duties for or on behalf of the issuer otherwise than in connection with transactions in securities;
ii.Was not a broker or dealer, or associated persons of a broker or dealer, within the preceding 12 months; and
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iii.Did not participate in selling an offering of securities for any issuer more than once every 12 months other than in reliance on paragraphs within this section, except that for securities issued pursuant to Rule 415 under the Securities Act of 1933, the 12 months shall begin with the last sale of any security included within a Rule 415 registration

 

No officers or directors of the Company may purchase any securities in this offering.

 

There can be no assurance that all, or any, of the shares will be sold. As of this date, we have not entered into any agreements or arrangements for the sale of the shares with any broker/dealer or sales agent. However, if we were to enter into such arrangements, we will file a post-effective amendment to disclose those arrangements because any broker/dealer participating in the offering would be acting as an underwriter and would have to be so named herein. In order to comply with the applicable securities laws of certain states, the securities may not be offered or sold unless they have been registered or qualified for sale in such states or an exemption from such registration or qualification requirement is available and with which we have complied. The purchasers in this offering and in any subsequent trading market must be residents of such states where the shares have been registered or qualified for sale or an exemption from such registration or qualification requirement is available. As of this date, we have not identified the specific states where the offering will be sold.

 

The proceeds from the sale of the shares in this offering will be payable to the Company, and will be deposited in a noninterest-bearing bank account until the subscription agreements are accepted by the Company. Failure to do so will result in checks being returned to the investor who submitted the check. No interest will be paid to any shareholder or the Company. All subscription agreements and checks are irrevocable (except as to any states that require a statutory cooling-off period or rescission right). All subscription funds will be held in the Escrow Account pending acceptance of the subscriptions by SmooFi, and funds will be released to SmooFi as received, until the maximum offering has been subscribed.

 

Investors can purchase common stock in this offering by completing a Subscription Agreement, a copy of which is filed as Exhibit 99.1a to the registration statement of which this prospectus is a part, and sending it together with payment in full. All payments must be made in U.S. currency either by personal check, bank draft, or cashier check. There is no minimum subscription requirement. All subscription agreements and checks are irrevocable (except as to any states that require a statutory cooling-off period or rescission right). The Company expressly reserves the right to either accept or reject any subscription. Any subscription rejected will be returned to the subscriber within five business days of the rejection date. Furthermore, once a subscription agreement is accepted, it will be executed without reconfirmation to or from the subscriber. Once we accept a subscription, the subscriber cannot withdraw it.

 

Any purchasers of our securities should be aware that any market that develops in our common stock will be subject to “penny stock” restrictions.

 

We will pay all expenses incident to the registration, offering and sale of the shares other than commissions or discounts of underwriters, broker-dealers or agents.

 

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons, 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.

 

Any purchasers of our securities should be aware that any market that develops in our stock will be subject to the penny stock restrictions.

 

The trading of our securities, if any, will be in the over-the-counter markets which are commonly referred to as the OTCBB as maintained by FINRA (once and if and when quoting thereon has occurred). As a result, an investor may find it difficult to dispose of, or to obtain accurate quotations as to the price of, our securities.

 

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OTCBB Considerations

 

OTCBB securities are not listed and traded on the floor of an organized national or regional stock exchange. Instead, OTCBB securities transactions are conducted through a telephone and computer network connecting dealers in stocks. OTCBB stocks are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.

 

To be quoted on the OTCBB, a market maker must file an application on our behalf in order to make a market for our common stock. We are not permitted to file such application on our own behalf. A market maker has agreed to file an application with FINRA on our behalf so as to be able to quote the shares of our common stock on the OTCBB maintained by FINRA commencing upon the effectiveness of our registration statement of which this prospectus is a part. There can be no assurance that the market maker’s application will be accepted by FINRA, nor can we estimate as to the time period that the application will require.

 

The OTCBB is separate and distinct from the NASDAQ stock market. NASDAQ has no business relationship with issuers of securities quoted on the OTCBB. The SEC’s order handling rules, which apply to NASDAQ-listed securities, do not apply to securities quoted on the OTCBB.

 

Although the NASDAQ stock market has rigorous listing standards to ensure the high quality of its issuers, and can delist issuers for not meeting those standards, the OTCBB has no listing standards. Rather, it is the market maker who chooses to quote a security on the system, files the application, and is obligated to comply with keeping information about the issuer in its files. FINRA cannot deny an application by a market maker to quote the stock of a company assuming all FINRA questions relating to its Rule 211 process are answered accurately and satisfactorily. The only requirement for ongoing inclusion in the OTCBB is that the issuer be current in its reporting requirements with the SEC.

 

Although we anticipate that quotation on the OTCBB will increase liquidity for our stock, investors may have difficulty in getting orders filled because trading activity on the OTCBB in general is not conducted as efficiently and effectively as with NASDAQ-listed securities. As a result, investors’ orders may be filled at a price much different than expected when an order is placed.

 

Investors must contact a broker-dealer to trade OTCBB securities. Investors do not have direct access to the bulletin board service. For bulletin board securities, there only has to be one market maker.

 

OTCBB transactions are conducted almost entirely manually. Because there are no automated systems for negotiating trades on the OTCBB, they are conducted via telephone. In times of heavy market volume, the limitations of this process may result in a significant increase in the time it takes to execute investor orders. Therefore, when investors place market orders - an order to buy or sell a specific number of shares at the current market price - it is possible for the price of a stock to go up or down significantly during the lapse of time between placing a market order and getting execution.

 

If we become able to have our shares of common stock quoted on the OTCBB, we will then try, through a broker-dealer and its clearing firm, to become eligible with the DTC to permit our shares to trade electronically. If an issuer is not “DTC-eligible,” then its shares cannot be electronically transferred between brokerage accounts, which, based on the realities of the marketplace as it exists today (especially the OTCBB), means that shares of a company will not be traded (technically the shares can be traded manually between accounts, but this takes days and is not a realistic option for companies relying on broker dealers for stock transactions - like all the companies on the OTCBB). What this boils down to is that while DTC-eligibility is not a requirement to trade on the OTCBB, it is a necessity to process trades on the OTCBB if a company’s stock is going to trade with any volume. There are no assurances that our shares will ever become DTC-eligible or, if they do, how long it will take.

 

Because OTCBB stocks are usually not followed by analysts, there may be lower trading volume than for NASDAQ-listed securities.

 

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Section 15(g) of the Exchange Act

 

Our shares will be covered by Section 15(g) of the Exchange Act, and Rules 15g-1 through 15g-6 promulgated thereunder. They impose additional sales practice requirements on broker-dealers who sell our securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 excluding revenue or annual income exceeding $200,000 or $300,000 jointly with their spouses).

 

Rule 15g-1 exempts a number of specific transactions from the scope of the penny stock rules (but is not applicable to us).

 

Rule 15g-2 declares unlawful broker-dealer transactions in penny stocks unless the broker-dealer has first provided to the customer a standardized disclosure document.

 

Rule 15g-3 provides that it is unlawful for a broker-dealer to engage in a penny stock transaction unless the broker-dealer first discloses and subsequently confirms to the customer current quotation prices or similar market information concerning the penny stock in question.

 

Rule 15g-4 prohibits broker-dealers from completing penny stock transactions for a customer unless the broker-dealer first discloses to the customer the amount of compensation or other remuneration received as a result of the penny stock transaction.

 

Rule 15g-5 requires that a broker-dealer executing a penny stock transaction, other than one exempt under Rule 15g-1, disclose to its customer, at the time of or prior to the transaction, information about the sales persons compensation.

 

Rule 15g-6 requires broker-dealers selling penny stocks to provide their customers with monthly account statements.

 

Rule 3a51-1 of the Exchange Act establishes the definition of a "penny stock," for purposes relevant to us, as any equity security that has a minimum bid price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to a limited number of exceptions. It is likely that our shares will be considered to be penny stocks for the immediately foreseeable future. For any transaction involving a penny stock, unless exempt, the penny stock rules require that a broker or dealer approve a person's account for transactions in penny stocks and the broker or dealer receive from the investor a written agreement to the transaction setting forth the identity and quantity of the penny stock to be purchased.

 

In order to approve a person's account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience and objectives of the person and make a reasonable determination that the transactions in penny stocks are suitable for that person and that that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

 

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, which, in highlight form, sets forth:

 

·the basis on which the broker or dealer made the suitability determination, and
·that the broker or dealer received a signed, written agreement from the investor prior to the transaction

 

Disclosure also has to be made about the risks of investing in penny stock in both public offerings and in secondary trading and commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Additionally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

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Many brokers have decided not to trade penny stocks because of the requirements of the penny stock rules and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited. If the Company remains subject to the penny stock rules for any significant period, which is likely, it could have an adverse effect on the market, if any, for the Company’s securities. If the Company’s securities are subject to the penny stock rules, investors will find it difficult to dispose of the Company’s securities.

 

State Securities – Blue Sky Laws

 

There is no established public market for our common stock, and there can be no assurance that any market will develop in the foreseeable future. Transfer of our common stock may also be restricted under the securities or securities regulations laws promulgated by various states and foreign jurisdictions, commonly referred to as "Blue Sky" laws. Absent compliance with such individual state laws, our common stock may not be traded in such jurisdictions. Because the securities registered hereunder have not been registered for resale under the blue sky laws of any state, the holders of such shares and persons who desire to purchase them in any trading market that might develop in the future, should be aware that there may be significant state blue-sky law restrictions upon the ability of investors to sell the securities and of purchasers to purchase the securities. Accordingly, investors may not be able to liquidate their investments and should be prepared to hold the common stock for an indefinite period of time.

 

We will consider applying for listing in Mergent, Inc., a leading provider of business and financial information on publicly listed companies, which, once published, will provide SmooFi with “manual” exemptions in approximately 33 states as indicated in CCH Blue Sky Law Desk Reference at Section 6301 entitled “Standard Manuals Exemptions.” However, we may not be accepted for listing in Mergent or similar services designed to obtain manual exemptions if we are considered to be a "shell company" at the time of application.

 

Thirty-three states have what is commonly referred to as a "manual exemption" for secondary trading of securities such as those to be resold by selling stockholders under this registration statement. In these states, so long as we obtain and maintain a listing in Mergent, Inc. or Standard and Poor's Corporate Manual, secondary trading of our common stock can occur without any filing, review or approval by state regulatory authorities in these states. These states are: Alaska, Arizona, Arkansas, Colorado, Connecticut, District of Columbia, Florida, Hawaii, Idaho, Indiana, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Nebraska, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, Texas, Utah, Washington, West Virginia and Wyoming. We cannot secure this listing, and thus this qualification, until after our registration statement is declared effective. Once we secure this listing (assuming that being a development stage and shell company is not a bar to such listing), secondary trading can occur in these states without further action.

 

Upon effectiveness of this Prospectus, the Company intends to consider (but may not) becoming a “reporting issuer” under Section 12(g) of the Exchange Act, as amended, by way of filing a Form 8-A with the SEC. A Form 8-A is a “short form” of registration whereby information about the Company will be incorporated by reference to the Registration Statement on Form S-1, of which this prospectus is a part. Upon filing of the Form 8-A, if done, the Company’s shares of common stock will become “covered securities,” or “federally covered securities” as described in some states’ laws, which means that unless you are an “underwriter” or “dealer,” you will have a “secondary trading” exemption under the laws of most states (and the District of Columbia, Guam, the Virgin Islands and Puerto Rico) to resell the shares of common stock you purchase in this offering. However, four states do impose filing requirements on the Company: Michigan, New Hampshire, Texas and Vermont. The Company may, at its own cost, make the required notice filings in Michigan, New Hampshire, Texas and Vermont immediately after filing its Form 8-A with the SEC.

 

We currently do not intend to and may not be able to qualify securities for resale in other states which require shares to be qualified before they can be resold by our shareholders.

 

Limitations Imposed by Regulation M

 

Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the shares may not simultaneously engage in market making activities with respect to our common stock for a period of two business days prior to the commencement of such distribution.

-53-
 

 

EXPERTS

 

The financial statements of the Company as of December 31, 2013 and for the period October 15, 2013 (inception) to December 31, 2013 included in this prospectus have been audited by independent registered public accountants and have been so included in reliance upon the report of TAAD, LLP, a professional corporation given on the authority of such firm as experts in accounting and auditing.

 

WHERE YOU CAN FIND MORE INFORMATION

 

We have filed with the Securities and Exchange Commission a registration statement on Form S-1, including exhibits, schedules and amendments, under the Securities Act with respect to the shares of common stock to be sold in this offering. This prospectus does not contain all the information included in the registration statement. For further information about us and the shares of our common stock to be sold in this offering, please refer to our registration statement.

 

As of the effective date of our registration statement of which this prospectus is a part, we will become subject to certain informational requirements of the Exchange Act, as amended and we will be required to file periodic reports (i.e., annual, quarterly and material events) with the SEC which will be immediately available to the public for inspection and copying. In the event during the year that our registration statement becomes effective, these reporting obligations may be automatically suspended under Section 15(d) of the Exchange Act if we have less than 300 shareholders and do not file a registration statement on Form 8-A (of which we have no current plans to file). If this occurs after the year in which our registration statement becomes effective, we will no longer be obligated to file such periodic reports with the SEC and access to our business information would then be even more restricted. After this registration statement on Form S-1 becomes effective, we may be required to deliver periodic reports to security holders as proscribed by the Exchange Act, as amended. However, we will not be required to furnish proxy statements to security holders and our directors, officers and principal beneficial owners will not be required to report their beneficial ownership of securities to the SEC pursuant to Section 16 of the Exchange Act until we have both 500 or more security holders and greater than $10 million in assets. This means that access to information regarding our business and operations will be limited.

 

You may read and copy any document we file at the SEC's public reference room at 100 F Street, N. E., Washington, D.C. 20549. You should call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC filings will also be available to the public at the SEC's web site at "http:/www.sec.gov."

 

You may request, and we will voluntarily provide, a copy of our filings, including our annual report which will contain audited financial statements, at no cost to you, by writing or telephoning us at the following address:

 

SmooFi, Inc.

1031 Calle Recodo, Suite B

San Clemente, CA 92673

949-973-0684

 

-54-
 

 

SmooFi, INC.

(a Development Stage Company)

 

INDEX TO FINANCIAL STATEMENTS

 

 

 

   
Contents
  Page
   
Report of Independent Registered Public Accounting Firm 56
   
Balance Sheet at December 31, 2013 57
   
Statement of Operations for the Period October 15, 2013 (inception) to December 31, 2013 58
   
Statement of Stockholders’ Equity for the Period October 15, 2013 (inception) to December 31, 2013 59
   
Statement of Cash Flows for the Period October 15, 2013 (inception) to December 31, 2013 60
   
Notes to the Financial Statements 61
   

 

 

 

-55-
 

 

 

Report of Independent Registered Public Accounting Firm

 

To the Board of Directors and Stockholders

SmooFi, Inc.

 

We have audited the accompanying balance sheet of SmooFi, Inc. (A Development Stage “Company”) as of December 31, 2013 and the related statement of operations, changes in stockholders’ equity and cash flows for the period from October 15, 2013 (inception) to December 31, 2013. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

 

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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 statements 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 SmooFi, Inc. as of December 31, 2013, and the result of its operations and its cash flows for the period from October 15, 2013 (inception) to December 31, 2013 in conformity with U.S. generally accepted accounting principles.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has had no revenues and earnings since inception. These conditions, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management's plans concerning these matters are also described in Note 3, which includes achieving profitable operations and raising additional funds through financing. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

 

/s/ TAAD, LLP

January 7, 2014

Walnut, CA. 91789

 

 

-56-
 

 

SmooFi, Inc.

(a Development Stage Company)

Balance Sheet

December 31, 2013

 

 

 

ASSETS     
      
CURRENT ASSETS:     
Cash  $212,570 
      
OTHER ASSETS:     
Intangible asset   72,500 
TOTAL ASSETS  $285,070 
      
LIABILITIES AND STOCKHOLDERS’ EQUITY     
      
CURRENT LIABILITIES:     
Accrued expenses   $26,556 
Note payable   150,493 
Note payable – related party   50,165 
TOTAL LIABILITIES   227,214 
      
      
STOCKHOLDERS’ EQUITY:     
Preferred stock, $0.001 par value; 5,000,000 shares authorized; none issued or outstanding   —   
Common stock, $0.001 par value; 200,000,000 shares authorized; 9,550,000 shares issued and outstanding   9,550 
Additional paid in capital   80,950 
Deficit accumulated during development stage   (32,644)
TOTAL STOCKHOLDERS’ EQUITY   57,856 
      
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $285,070 

 

 

See notes to the financial statements.

 

-57-
 

 

SmooFi, Inc.

(a Development Stage Company)

Statement of Operations

For the Period October 15, 2013 (inception) through December 31, 2013

 

 

 

    
    
Revenue  $- 
      
Expenses:     
Selling, general and administration   31,986 
      
Operating loss   31,986 
      
Interest expense   658 
      
Net loss  $(32,644)
      
Basic and diluted loss per share  $(0.00)
      
Weighted average common shares outstanding - basic and diluted   9,222,727 

 

 

See notes to the financial statements.

 

 

-58-
 

 

SmooFi, Inc.

(a Development Stage Company)

Statement of Changes in Stockholders’ Equity

For the Period October 15, 2013 (inception) through December 31, 2013

 

 

 

                         
 

Common

Stock

  Common Stock Amount   Additional Paid-in-capital   Accumulated Deficit   Total
Balance - October 15, 2013 (date of inception) - $ - $ - $ - $ -
Shares issued for business plan and website on October 15, 2013 7,250,000   7,250   65,250   -   72,500
Shares issued for founder’s shares 500,000   500   (500)   -   -
Shares issued in private placement completed on October 29, 2013 1,800,000   1,800   16,200   -   18,000
Net loss -   -   -   (32,644)   (32,644)
Balance - December 31, 2013 9,550,000 $ 9,550 $ 80,950 $ (32,644) $ 57,856

 

 

See notes to the financial statements.

 

-59-
 

 

SmooFi, Inc.

(a Development Stage Company)

Statement of Cash Flows

For the Period October 15, 2013 (inception) through December 31, 2013

 

 

 

CASH FLOW FROM OPERATING ACTIVITIES:     
Net loss  $(32,644)
Accrued expenses, increase in   26,556 
Accrued interest expense   658 
      
Net Cash Used in Operating Activities   (5,430)
      
 CASH FLOW FROM INVESTING ACTIVITIES     
Net Cash Used in Investing Activities   —   
      
CASH FLOW FROM FINANCING ACTIVITIES     
Proceeds from the issuance of debt   200,000 
Issuance of common stock for cash   18,000 
Net Cash Provided by Financing Activities   218,000 
      
CHANGE IN CASH   212,570 
CASH AT BEGINNING OF PERIOD   —   
CASH AT END OF PERIOD  $212,570 
      
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION     
      
Cash paid for:     
Interest  $—   
Income taxes  $—   
      
Non-cash investing and financing activities:     
Intangibles acquired  $72,500 

 

 

See notes to the financial statements.

 

-60-
 

 

SmooFi, Inc.

(a Development Stage Company)

Notes to the Financial Statements

December 31, 2013

 

NOTE 1 – ORGANIZATION

 

SmooFi, Inc. (the Company) was incorporated under the laws of the State of Nevada on October 15, 2013. The Company issued 7,250,000 shares of its common stock to our founder, Derek Cahill, as consideration for the purchase of a business plan along with website.

 

The Company has not generated revenues from its planned principal operations and is considered a development stage company as that term is defined by Financial Accounting Standard Board ("FASB") Accounting Standards Codification ("ASC") 915, Development Stage Entities.

 

The Company will acquire and/or develop and market software and services that will significantly enhance the performance and functionality of the Internet services used by small to medium sized businesses. The Company’s products and services will use proprietary technology that will enable users to work collaboratively to obtain substantial improvements in performance, reliability and usability.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

a. Basis of Accounting

 

The Company’s financial statements are prepared using the accrual method of accounting. The Company has elected a September 30, fiscal year-end.

 

b. Cash Equivalents

 

For purposes of the balance sheet and statement of cash flows, the Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

 

c. Stock-based Compensation

 

The Company follows ASC 718-10, Stock Compensation, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized. The Company has not adopted a stock option plan and has not granted any stock options.

 

d. Use of Estimates and Assumptions

 

Preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. The Company has adopted the provisions of ASC 260.

-61-
 

 

 

e. Loss per Share

 

The basic loss per share is calculated by dividing the Company’s net loss available to common shareholders by the weighted average number of common shares during the year. The diluted loss per share is calculated by dividing the Company’s net loss available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. Diluted earnings (loss) per share are the same as basic earnings (loss) per share due to the lack of dilutive items in the Company.

 

f. Fair Value Measurements and Disclosures

 

ASC Topic 820 defines fair value, establishes a framework for measuring fair value, establishes a three-level valuation hierarchy for disclosure of fair value measurement and enhances disclosure requirements for fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:

 

Level 1 - Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

 

Level 2 - Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

 

Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

The Company’s adoption of fair value measurements and disclosures did not have a material impact on the financial statements and financial statement disclosures

 

g. Income Taxes

 

Income taxes are provided in accordance with ASC 740, Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.

 

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

No provision was made for Federal or State income taxes.

 

h. Advertising

 

Advertising will be expensed in the period in which it is incurred. There have been no advertising expenses for the reporting period presented.

 

 

i. Intangible Assets

 

Intangible assets with finite lives are amortized over their estimated useful life. The Company monitors conditions related to these assets to determine whether events and circumstances warrant a revision to the remaining amortization period. The Company tests its intangible assets with finite lives for potential impairment whenever management concludes events or changes in circumstances indicate that the carrying amount may not be recoverable. The original estimate of an asset's useful life and the impact of an event or circumstance on either an asset's useful life or carrying value involve significant judgment.

-62-
 

 

 

j. Recently Issued Accounting Pronouncements

 

The Company reviewed all recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC and they did not or are not believed by management to have a material impact on the Company's present or future financial statements.

 

NOTE 3 – GOING CONCERN

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As reflected in the accompanying financial statements, the Company had a negative working capital of $14,644 and a deficit accumulated during the development stage of $32,644 at December 31, 2013. As of December 31, 2013, the Company had not generated any revenue and had no committed sources of capital or financing.

 

While the Company is attempting to generate revenues from services or software products, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management believes that the actions presently being taken to further implement its business plan and generate additional products and revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to realize revenues and in its ability to raise additional funds, there can be no assurances to that effect. The Company’s ability to continue as a going concern is dependent upon its ability to achieve profitable operations or obtain adequate financing.

 

The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

NOTE 4 – NOTES PAYABLE

 

As of December 31, 2013, the Company had a total of three notes payable issued and outstanding with a total principle of $200,000 and accrued interest of $658. The notes are due on December 31, 2014 and have an interest rate of 12%. $50,000 of the principle and $165 of the accrued interest was to payable to a related party, our CEO, Sean Clarke.

 

NOTE 5 – SHARE CAPITAL

 

The Company is authorized to issue 200,000,000 shares of common stock and 5,000,000 shares of preferred stock. The Company issued 500,000 shares of its common stock to its president, and chief executive officer as founder shares. The Company issued 7,250,000 shares of our common stock to Derek Cahill as consideration for the purchase of a business plan along with a website. The acquisition of the business plan and website was valued at $72,500.

 

On October 29, 2013, the Company completed a private placement where it issued 1,800,000 shares of its common stock to accredited investors for $18,000.

 

At December 31, 2013, there are 9,550,000 shares of common stock issued and outstanding.

 

NOTE 6 – COMMITMENTS

 

The Company is obligated to certain professionals for $5,000 per month for a year related to the building of its website and mobile applications. The Company in its capacity is solely obligated for these fees.

 

NOTE 7 – INCOME TAXES

 

As of December 31, 2013, the Company had net operating loss carry forwards of $32,644 that may be available to reduce future years’ taxable income through 2033.

-63-
 

 

 

    
   As of December 31, 2013
      
Deferred tax assets:     
Net operating tax carryforwards  $12,731 
Other   —   
Gross deferred tax assets   12,731 
Valuation allowance   (12,731)
      
Net deferred tax assets  $—   

 

Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carryforwards are expected to be available to reduce taxable income. As the achievement of required future taxable income is uncertain, the Company recorded a 100% valuation allowance due to the management determined that it is more likely than not that the U.S. federal and state deferred tax assets as of December 31, 2013 will not be realized.

 

Reconciliation between the provision for income taxes and the expected tax benefit using the federal statutory rate of 34% and state statutory rate of 5.0% for 2013 is as follows:

 

    2013
Income tax benefit at federal statutory rate     -34.00 %
State income tax benefit, net of effect on federal taxes     -5.00 %
Increase in valuation allowance     39.00 %
Income tax expense     —    
         

 

-64-
 

 

   

This prospectus is part of a registration statement we filed with the SEC. You should rely only on the information or representations provided in this prospectus. We have authorized no one to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information in this prospectus is accurate as of any date other than the date on the front of the document.

 

No one (including any salesman or broker) is authorized to provide oral or written information about this offering that is not included in this prospectus.

 

The information contained in this prospectus is correct only as of the date set forth on the cover page, regardless of the time of the delivery of this prospectus.

 

Until ________, 2014 (90 days after the commencement of the offering), 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.

 

2,000,000 Shares

SmooFi, Inc.

Common Stock

 

PROSPECTUS

 

__, 2014

 

 

-65-
 

 

 

TABLE OF CONTENTS

 

 

 

    Page 
SUMMARY FINANCIAL DATA   8 
RISK FACTORS   9 
USE OF PROCEEDS   20 
THE OFFERING   20 
DETERMINATION OF OFFERING PRICE   22 
DILUTION   22 
DIVIDEND POLICY   23 
MARKET FOR SECURITIES   24 
NOTE REGARDING FORWARD-LOOKING STATEMENTS   26 
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION   27 
BUSINESS   34 
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS   41 
PRINCIPAL SHAREHOLDERS   44 
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS   44 
DESCRIPTION OF CAPITAL STOCK   45 
PLAN OF DISTRIBUTION   49 
LEGAL MATTERS   53 
EXPERTS   53 
      
WHERE YOU CAN FIND MORE INFORMATION   53 

 

 

-66-
 

 

 

Part II

 

INFORMATION NOT REQUIRED IN PROSPECTUS

 

ITEM 13

OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

 

The Registrant is bearing all expenses in connection with this registration statement other than sales commissions, underwriting discounts and underwriter's expense allowances designated as such. Estimated expenses payable by the Registrant in connection with the registration and distribution of the Common Stock registered hereby are as follows:

 

SEC Registration fee  $29.13 
NASD filing fee   100.00 
*Accounting fees and expenses   5,000.00 
*Legal fees and expenses   40,000.00 
*Transfer agent fees   2,500.00 
*Blue Sky fees and expenses   5,000.00 
*Miscellaneous expenses   2,370.87 
      
Total  $55,000.00 

 

*Indicates expenses that have been estimated for filing purposes.

 

ITEM 14

INDEMNIFICATION OF DIRECTORS AND OFFICERS

 

The Company has a provision in its Certificate of Incorporation at Article XI thereof providing for indemnification of its officers and directors as follows.

 

Our Articles of Incorporation at Article X provide for indemnification as follows: "No director or officer of the Corporation shall be personally liable to the Corporation or any of its stockholders for damages for breach of fiduciary duty as a director or officer; provided, however, that the foregoing provision shall not eliminate or limit the liability of a director or officer: (i) for acts or omissions which involve intentional misconduct, fraud or knowing violation of law; or (ii) the payment of dividends in violation of Section 78.300 of the Nevada Revised Statutes. Any repeal or modification of an Article by the stockholders of the Corporation shall be prospective only, and shall not adversely affect any limitation of the personal liability of a director or officer of the Corporation for acts or omissions prior to such repeal or modification."

 

 Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any such action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

 

-67-
 

 

ITEM 15

RECENT SALES OF UNREGISTERED SECURITIES

 

During the three years preceding the filing of this Form S-1, Registrant has issued securities without registration under the Securities Act on the terms and circumstances described in the following paragraphs.

 

The Company issued 7,250,000 shares of its common stock to Mr. Cahill, as consideration for a business plan and website.

 

500,000 were issued to Mr. Clarke, the Company’s president, and chief executive officer upon our incorporation in Nevada in October 2013 for founder shares.

 

On October 29, 2013, the Company completed a private placement and issued 1,800,000 shares of its common stock to various accredited investors for $18,000.

 

The foregoing issuances of securities were affected in reliance upon the exemption from registration provided by section 4(2) under the Securities Act of 1933, (the “Act”) as amended.

 

Notwithstanding being accredited all security holders were provided with a final pre-filing copy of the Company’s Registration Statement and acknowledged having read and reviewed same and having no further questions with respect to their respective investments.

 

ITEM 16

EXHIBITS

 

      
 3.1   Articles of Incorporation
 3.2   By-Laws
 5.1   Opinion of Law Offices of Eric Stoppenhagen
 10.1   Form Note Agreement
 14.1   Code of Ethics
 23.1d  Consent of TAAD, LLP, a professional corporation
 23.2d  Consent of Law Offices of Eric Stoppenhagen (included in Exhibit 5.1a)
 99.1   Copy of Subscription Agreement

 

 

Exhibits are not part of the prospectus and will not be distributed with the prospectus.

 

-68-
 

 

ITEM 17

UNDERTAKINGS

 

a.The undersigned registrant hereby undertakes:

 

1.To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

 

i.To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
ii.To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement.
iii.To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

 

2.That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

3.To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

4.That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

 

i.If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, 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.

 

5.That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
-69-
 

 

 

i)Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
ii)Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
iii)The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
iv)Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

 

b.Request for Acceleration of Effective Date or Filing of Registration Statement Becoming Effective Upon Filing.

 

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue

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SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of San Clemente, State of California on January 7, 2014.

 

 

SmooFi, Inc.

 

 
/s/ Sean Clarke             
By: Sean Clarke, President, CEO, Principal Executive Officer, Treasurer, Chairman, Principal Financial Officer and Principal Accounting Officer

 

 

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the date indicated.

 

 

     
Signature(s) Title(s) Date
     
/s/ Sean Clarke       January 7, 2014

By: Sean Clarke

Chief Executive Officer

President, CEO, Principal Executive Officer, Treasurer, Chairman, Principal Financial Officer and Principal Accounting Officer