Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
The aggregate market value of the voting common stock held by non-affiliates of the registrant as of June 30, 2009 (the last business day of the registrant’s most recently completed second fiscal quarter) was not determinable because the common stock does not trade on any market.
| Item Number and Caption | Page |
| | | | |
| PART I | |
| | | | |
| 1. | | Business | 2 |
| | | | |
| 1A. | | Risk Factors | 5 |
| | | | |
| 1B. | | Unresolved Staff Comments | 6 |
| | | | |
| 2. | | Properties | 6 |
| | | | |
| 3. | | Legal Proceedings | 6 |
| | | | |
| 4. | | Reserved | 6 |
| | | | |
| | | | |
| PART II | |
| | | | |
| 5. | | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 7 |
| | | | |
| 6. | | Selected Financial Data | 7 |
| | | | |
| 7. | | Management's Discussion and Analysis of Financial Condition and Results of Operations | 7 |
| | | | |
| 7A. | | Quantitative and Qualitative Disclosures About Market Risk | 9 |
| | | | |
| 8. | | Financial Statements and Supplementary Data | 9 |
| | | | |
| 9. | | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure | 9 |
| | | | |
| 9A(T). | | Controls and Procedures | 9 |
| | | | |
| 9B. | | Other Information | 10 |
| | | | |
| | | | |
| PART III | |
| | | | |
| 10. | | Directors, Executive Officers and Corporate Governance | 11 |
| | | | |
| 11. | | Executive Compensation | 13 |
| | | | |
| 12. | | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 13 |
| | | | |
| 13. | | Certain Relationships and Related Transactions, and Director Independence | 13 |
| | | | |
| 14. | | Principal Accounting Fees and Services | 14 |
| | | | |
| | | | |
| PART IV | |
| | | | |
| 15. | | Exhibits, Financial Statement Schedules | 15 |
| | | | |
| SIGNATURES | 16 |
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Report, including any documents which may be incorporated by reference into this Report, contains “Forward-Looking Statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are “Forward-Looking Statements” for purposes of these provisions, including our plans regarding a merger or acquisition. All Forward-Looking Statements included in this document are made as of the date hereof and are based on information available to us as of such date. We assume no obligation to update any Forward-Looking Statement. In some cases, Forward-Looking Statements can be identified by the use of terminology such as “may,” “will,” “expects,” “plans,” “anticipates,” “intends,” “believes,” “estimates,” “potential,” or “continue,” or the negative thereof or other comparable terminology. Although we believe that the expectations reflected in the Forward-Looking Statements contained herein are reasonable, there can be no assurance that such expectations or any of the Forward-Looking Statements will prove to be correct, and actual results could differ materially from those projected or assumed in the Forward-Looking Statements. Future financial condition and results of operations, as well as any Forward-Looking Statements are subject to inherent risks and uncertainties, including any other factors referred to in our press releases and reports filed with the Securities and Exchange Commission. All subsequent Forward-Looking Statements attributable to the company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Additional factors that may have a direct bearing on our operating results are described under Item 1A Risk Factors and elsewhere in this report.
Introductory Comment
Throughout this Annual Report on Form 10-K, the terms “we,” “us,” and “our,” refer to Ameralink, Inc., a Utah corporation.
PART I
Ameralink, Inc., or Ameralink was incorporated in the State of Nevada on December 31, 1998, to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. We have been in the development stage since inception without active business operations and at this time we are considered a “Blank Check” company.
We registered our common stock on a Form 10-SB registration statement filed pursuant to the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 12(g) thereof. We intend to file with the Securities and Exchange Commission periodic and episodic reports under Rule 13(a) of the Exchange Act, including quarterly reports on Form 10-Q and annual reports on Form 10-K.
We will attempt to locate and negotiate with a business entity for the merger of that target business into Ameralink. In certain instances, a target business may wish to become a subsidiary of Ameralink or may wish to contribute assets to Ameralink rather than merge. No assurances can be given that we will be successful in locating or negotiating with any target business.
Management believes that there are perceived benefits to being a reporting company with a class of registered securities. These are commonly thought to include (1) the ability to use registered securities to make acquisition of assets or businesses; (2) increased visibility in the financial community; (3) the facilitation of borrowing from financial institutions; (4) improved trading efficiency; (5) stockholder liquidity; (6) greater ease in subsequently raising capital; (7) compensation of key employees through stock options; (8) enhanced corporate image; and (9) a presence in the United States capital market.
A business entity, if any, which may be interested in a business combination with us may include (1) a company for which a primary purpose of becoming public is the use of its securities for the acquisition of assets or businesses; (2) a company which is unable to find an underwriter of its securities or is unable to find an underwriter of securities on terms acceptable to it; (3) a company which wishes to become public with less dilution of its common stock than would occur normally upon an underwriting; (4) a company which believes that it will be able to obtain investment capital on more favorable terms after it has become public; (5) a foreign company which may wish to gain an initial entry into the United States securities market; (6) a special situation company, such as a company seeking a public market to satisfy redemption requirements under a qualified Employee Stock Option Plan; or (7) a company seeking one or more of the other perceived benefits of becoming a public company.
Management is actively engaged in seeking a qualified company as a candidate for a business combination. We are authorized to enter into a definitive agreement with a wide variety of businesses without limitation as to their industry or revenues. It is not possible at this time to predict which company, if any, we will enter into a definitive agreement or what will be the industry, operating history, revenues, future prospects or other characteristics of that company.
We may seek a business opportunity with entities which have recently commenced operations, or wish to utilize the public marketplace in order to raise additional capital in order to expand into new products or markets, to develop a new product or service, or for other corporate purposes. We may acquire assets and establish wholly-owned subsidiaries in various businesses or acquire existing businesses as subsidiaries.
Our management, which in all likelihood will not be experienced in matters relating to the business of a target business, will rely upon its own efforts in accomplishing our business purposes.
The analysis of new business opportunities will be undertaken by, or under the supervision of our Chief Executive Officer, who is not a professional business analyst. In analyzing prospective business opportunities, management may consider such matters as:
a) available technical, financial and managerial resources;
b) working capital and other financial requirements; history of operations, if any;
c) prospects for the future;
d) nature of present and expected competition;
e) the quality and experience of management services which may be available and the depth of that management;
f) the potential for further research, development, or exploration;
g) specific risk factors not now foreseeable but which then may be anticipated to impact our proposed activities;
h) the potential for growth or expansion;
i) the potential for profit;
j) the perceived public recognition or acceptance of products, services, or trades; name identification and;
k) other relevant factors.
Management does not have the capacity to conduct as extensive an investigation of a target business as might be undertaken by a venture capital fund or similar institution. As a result, management may elect to merge with a target business which has one or more undiscovered shortcomings and may, if given the choice to select among target businesses, fail to enter into an agreement with the most investment-worthy target business.
Following a business combination we may benefit from the services of others in regard to accounting, legal services, underwritings and corporate public relations. If requested by a target business, management may recommend one or more underwriters, financial advisors, accountants, public relations firms or other consultants to provide such services.
A potential target business may have an agreement with a consultant or advisor providing that services of the consultant or advisor be continued after any business combination. Additionally, a target business may be presented to us only on the condition that the services of a consultant or advisor be continued after a merger or acquisition. Such preexisting agreements of target businesses for the continuation of the services of attorneys, accountants, advisors or consultants could be a factor in the selection of a target business.
In implementing a structure for a particular business acquisition, we may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another corporation or entity. We may also acquire stock or assets of an existing business. On the consummation of a transaction, it is likely that our present management and stockholders will no longer be in our control. In addition, it is likely that our officers and directors will, as part of the terms of the acquisition transaction, resign and be replaced by one or more new officers and directors.
It is anticipated that any securities issued in any such reorganization would be issued in reliance upon exemption from registration under applicable federal and state securities laws. In some circumstances however, as a negotiated element of its transaction, we may agree to register all or a part of such securities immediately after the transaction is consummated or at specified times thereafter. If such registration occurs, of which there can be no assurance, it will be undertaken by the surviving entity after we have entered into an agreement for a business combination or have consummated a business combination and we are no longer considered a blank check company. The issuance of additional securities and their potential sale into any trading market which may develop in our securities may depress the market value of our securities in the future if such a market develops, of which there is no assurance.
While the terms of a business transaction to which we may be a party cannot be predicted, it is expected that the parties to the business transaction will desire to avoid the creation of a taxable event and thereby structure the acquisition in a tax-free reorganization under Sections 351 or 368 of the Internal Revenue Code of 1986, as amended.
With respect to any merger or acquisition negotiations with a target business, management expects to focus on the percentage of Ameralink which target business stockholders would acquire in exchange for their shareholdings in the target business. Depending upon, among other things, the target business's assets and liabilities, our stockholders will in all likelihood hold a substantially lesser percentage ownership interest in Ameralink following any merger or acquisition. Any merger or acquisition effected by us can be expected to have a significant dilutive effect on the percentage of shares held by our stockholders at such time.
No assurances can be given that we will be able to enter into a business combination, as to the terms of a business combination, or as to the nature of the target business.
As of the date hereof, management has not made any final decision concerning or entered into any written agreements for a business combination. When any such agreement is reached or other material fact occurs, we will file notice of such agreement or fact with the Securities and Exchange Commission on Form 8-K. Persons reading this Form 10-K are advised to determine if we have subsequently filed a Form 8-K.
We anticipate that the selection of a business opportunity in which to participate will be complex and without certainty of success. Management believes (but has not conducted any research to confirm) that there are numerous firms seeking the perceived benefits of a publicly registered corporation. Such perceived benefits may include facilitating or improving the terms on which additional equity financing may be sought, providing liquidity for incentive stock options or similar benefits to key employees, increasing the opportunity to use securities for acquisitions, and providing liquidity for stockholder and other factors. Business opportunities may be available in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.
The material risks that we believe are faced by Ameralink as of the date of this report are set forth below. This discussion of risks is not intended to be exhaustive. The risks set forth below and other risks not currently anticipated or fully appreciated by the management could adversely affect the business and prospects of Ameralink. These risks include:
Development Stage Company
We have no current operations, revenues, or significant assets. We face all of the risks inherent in the start-up of a new business and do not have a historical basis on which to evaluate whether or not our proposed business can be successful, including whether we can implement a business model and pricing strategy that will permit us to operate profitably; hire and retain management and employees with the necessary skills to successfully implement our business strategy; and successfully develop and implement administrative and support systems such as personnel management, accounting records and controls, service and support, record keeping and office administration.
Dependence on Management
We are heavily dependent upon the skill, talents, and abilities of our president, Robert Freiheit. Mr. Freiheit will be primarily responsible for the decisions concerning the implementation of a business model. Mr. Freiheit will not devote his full business time to Ameralink and will continue to be engaged in outside business activities. We will be dependent upon the business acumen and expertise of management and the applicability of their backgrounds to the business decisions required to be made on our behalf.
No Trading Market for the Common Stock
There is no existing trading market for the Common Stock and it is unlikely that one will develop in the foreseeable future. The shares of Common Stock may be subject to the Penny Market Reform Act of 1990 (the “Reform Act”). In October 1990, Congress enacted the Reform Act to counter fraudulent practices common in penny stock transactions. If the shares are determined to be subject to the Reform Act, this may also adversely affect the ability to sell shares in the future.
Lack of Dividends
It is anticipated that we will invest any profits generated from our operations, and therefore, it is unlikely that we will pay dividends on our common stock in the foreseeable future.
Control of Ameralink by Management
The two directors of Ameralink currently hold voting and dispositive power over an aggregate of 6,973,600 shares of our common stock, which represents 93.9% of the currently issued and outstanding common stock. Since action by the stockholders on most matters, including the election of directors, only requires approval by a vote of the majority of shares voted on the mater, the current directors and executive officers of Ameralink will be able to significantly influence, if not control, the election of directors of Ameralink and the outcome of other matters submitted to the stockholders for consideration.
Unforeseen Risks
In addition to the above risks, the future business of Ameralink will be subject to risks not currently foreseen or fully appreciated by our management.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
We have no properties at this time. We currently use the offices of management at no cost to us. Management has agreed to continue this arrangement until we complete an acquisition or merger.
ITEM 3. LEGAL PROCEEDINGS
There is no litigation pending or threatened by or against us.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES
There are approximately 43 stockholders currently of our outstanding common stock. We have not paid dividends on our common stock in the past and do not currently anticipate that we will do so in the immediate future. We intend to retain earnings, if any, to support the growth of our business. Any future cash dividends would depend on future earnings, capital requirements, and our financial position and other factors deemed relevant by the board of directors.
There is currently no public market for our securities. We do not intend to trade our securities in the secondary market until completion of a business combination or acquisition. It is anticipated that following such occurrence we will cause our common stock to be listed or admitted to quotation on the NASD OTC Bulletin Board or, if we then meet the financial and other requirements thereof, on the Nasdaq SmallCap Market, National Market System or regional or national exchange.
The current business activities described herein classify us as a "blank check" company. The Securities and Exchange Commission and many states have enacted statutes, rules and regulations limiting the sale of securities of blank check companies in their respective jurisdictions. Management does not intend to undertake any efforts to cause a market to develop in our securities until such time as we have successfully implemented our business plan described herein.
We did not repurchase any of its shares during the fourth quarter of the fiscal year covered by this report.
ITEM 6. SELECTED FINANCIAL DATA
This item is not applicable to a “smaller reporting company” as defined in Item 10(f)(1) of SEC Regulation S-K.
ITEM 7. MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
We were formed to engage in a merger with or acquisition of an unidentified foreign or domestic company which desires to become a reporting ("public") company whose securities are qualified for trading in the United States secondary market. We meet the definition of a "blank check" company under the Securities Act of 1933, as amended. We have been in the developmental stage since inception and have no operations to date. We have considered certain acquisition candidates, but have not yet consummated any of these transactions.
We will not acquire or merge with any entity which cannot provide audited financial statements at or within a reasonable period of time after closing of the proposed transaction. We are subject to all the reporting requirements included in the Exchange Act. Included in these requirements is our duty to file audited financial statements as part of our Form 8-K to be filed with the Securities and Exchange Commission upon consummation of a merger or acquisition, as well as our audited financial statements included in our annual report on Form 10-K. If such audited financial statements are not available at closing, or within time parameters necessary to insure our compliance with the requirements of the Exchange Act, or if the audited financial statements provided do not conform to the representations made by the target business, the closing documents may provide that the proposed transaction will be voidable at the discretion of our present management.
We will not restrict our search for any specific kind of businesses, but may acquire a business which is in its preliminary or development stage, which is already in operation, or in essentially any stage of its business life. It is impossible to predict at this time the status of any business in which we may become engaged, in that such business may need to seek additional capital, may desire to have its shares publicly traded, or may seek other perceived advantages which we may offer.
A business combination with a target business will normally involve the transfer to the target business of the majority of our common stock, and the substitution by the target business of its own management and board of directors.
We have, and will continue to have, no capital with which to provide the owners of business opportunities with any cash or other assets. However, management believes we will be able to offer owners of acquisition candidates the opportunity to acquire a controlling ownership interest in a publicly registered company without incurring the cost and time required to conduct an initial public offering. Our Chief Executive Officer has not conducted market research and is not aware of statistical data to support the perceived benefits of a merger or acquisition transaction for the owners of a business opportunity.
Results of Operations
We are still a development-stage company and have not had revenues from our operations or reached the level of our planned operations. Our general and administrative expenses were $10,301 and $9,675 for the years ended December 31, 2009 and 2008, respectively. General and administrative expenses principally consist of those costs required to maintain our corporate existence, and to meet our statutory requirements as a small public reporting company. Such costs include legal fees, accounting fees, auditing fees, transfer agent costs, and other fees for filing our reports with the Securities and Exchange Commission.
Liquidity and Capital Resources
Our majority stockholders have agreed that they will advance additional funds which are needed for operating capital and for costs in connection with searching for or completing an acquisition or merger. Such advances will be made without expectation of repayment unless the owners of the business which we acquire or merge with agree to repay all or a portion of such advances. There is no minimum or maximum amount such stockholder will advance to us. We will not borrow any funds for the purpose of repaying advances made by such stockholder, and we will not borrow any funds to make any payments to our promoters, management or their affiliates or associates.
Our audit reflects the fact that we have no current source of income. Further, that without realization of additional capital, it would be unlikely for us to continue as a going concern.
We have no off-balance sheet arrangements as defined in Item 303(a) of Regulation S-K.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
This item is not applicable to a “smaller reporting company” as defined in Item 10(f)(1) of SEC Regulation S-K.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements are set forth immediately following the signature page beginning on page F-1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A(T). CONTROLS AND PROCEDURES
Evaluation Of Disclosure Controls.
Our management evaluated the effectiveness of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 (Exchange Act) Rules 13a-15(e) or 15d-15(e)) as of the end of the period covered by this annual report, as required by paragraph (b) of Exchange Act Rules 13a-15 or 15d-15.
Based on that evaluation, we have concluded that as of the end of the period covered by this annual report, our disclosure controls and procedures are effective at a reasonable assurance level in ensuring that information required to be disclosed by us in our reports is recorded, processed, summarized and reported within the required time periods. The foregoing conclusion is based, in part, on the fact that we are a small public company in the development stage, with no current revenues and no employees. In addition, we outsource all of our accounting and bookkeeping functions to a third-party accounting firm.
Management's Annual Report On Internal Control Over Financial Reporting.
Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes policies and procedures that: (i) pertain to maintaining records that in reasonable detail accurately and fairly reflect our transactions; (ii) provide reasonable assurance that transactions are recorded as necessary for preparation of our financial statements and that receipts and expenditures of company assets are made in accordance with management authorization; and (iii) provide reasonable assurance that unauthorized acquisition, use or disposition of company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected.
As of the end of the period covered by this annual report, our disclosure controls and procedures are effective at a reasonable assurance level in ensuring that information required to be disclosed by us in our reports is recorded, processed, summarized and reported within the required time periods. The evaluation of our internal controls over financial reporting was based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Limitations on the Effectiveness of Internal Controls. Our management does not expect that our internal control over financial reporting will necessarily prevent all fraud and material error. Our internal controls over financial reporting are designed to provide reasonable assurance of achieving our objectives. We have concluded that our internal controls over financial reporting are effective at that reasonable assurance level. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.
Changes in Internal Controls. There have been no changes in our internal controls over financial reporting that occurred during the fourth quarter ended December 31, 2009 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permits us to provide only management’s report in this annual report.
ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Set forth below is the name and age of each executive officer and director of Ameralink, together with all positions and offices held by each, the term of office, and the period during which each has served:
Name | | Age | | Position and Office Held | | Director and/or Executive Officer Since |
| Robert Freiheit | | 56 | | Chairman, Board of Directors, Chief Executive Officer, Chief Financial Officer | | April 1, 2004 |
| | | | | | | |
| Thomas J. Manz | | 60 | | Member, Board of Directors, Secretary/Treasurer | | April 1, 2004 |
Mr. Freiheit and Mr. Manz were appointed to serve as directors until the next meeting of stockholders or until replaced by a vote of the stockholders.
There is no family relationship among the current directors and executive officers. The following sets forth brief biographical information for each director and executive officer of Ameralink.
Robert Freiheit, Chairman, Board of Directors, Chief Executive Officer, Chief Financial Officer
Mr. Freiheit, age 56, has served as a board member for a number of private and public companies. He has also held the position of Chief Executive Officer and President for private and public entities. Mr. Freiheit is currently President of a private held real estate development firm with over 2 million square feet of industrial space under management. In 1986, he founded Liberty Associates LLC, a privately held construction, land entitlement and finance company focused on advancing growth in the industrial and warehouse sector. Mr. Freiheit is managing member of Auto Village LLC, an independent auto dealership with over $10 million in sales. A member in good standing of the National Association of Independent Auto Dealers, he is committed to enhancing the image of independent auto dealers with the public and California legislators. He also serves as Chairman of the Board and Co-CEO of Accredited Adjusters, Inc., which provides vehicle management services to banks and credit unions in the Western States. Mr. Freiheit is a graduate of Ohio State University in finance and chemistry.
Thomas J. Manz, Member, Board of Directors, Secretary/Treasurer
Thomas J. Manz, age 60, has been an owner, director, or managing member of various businesses related to real estate development and financial services for more than twenty years. Mr. Manz has been involved in numerous construction and development projects encompassing millions of square feet, ranging from residential homes to commercial centers. In addition, he has served as an operating officer and Founding Director of M.L. Oates Insurance Co., which was sold in 1993; Director of United Way of Sacramento from 1989 to 1992; a Founding Director of Roseville First National Bank from 1990; and Chairman of the Board of the Roseville First National Bank from 1993 to 2000. When the Roseville First National Bank merged with Western Sierra Bancorp in 2000, Mr. Manz continued to serve as a Director until May 2005. In addition, Mr. Manz served as the Co-Chairman of Western Sierra Bank, which is wholly owned by Western Sierra Bancorp. Mr. Manz has also held the position of Founding Director of Pacific Coast Banker's Bank from 1995 until April 2005. Mr. Manz holds a Bachelor of Science degree from Iowa State University.
Other than those mentioned above, we have no employees and do not anticipate hiring any in the future until we successfully implemented our business plan. None of our directors, executive officers, promoters or control persons has been involved in any legal proceedings material to the evaluation of the ability or integrity of any of the aforementioned persons.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors and other persons who own more than 10% of a registered class of our equity securities, to file with the Securities and Exchange Commission (hereinafter referred to as the "Commission") initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership, of common stock and other equity securities of Ameralink on Forms 3, 4, and 5, respectively. Executive officers, directors and greater than 10% shareholders are required by Commission regulations to furnish us with copies of all Section 16(a) reports they file. The reports of Robert Freiheit and Thomas Manz for the year ended December 31, 2009 were not filed. Other than the foregoing, we believe that all reports required by section 16(a) for transactions in the year ended December 31, 2009, were timely filed.
Audit Committee and Financial Expert
We do not have an Audit Committee. The members of the Board of Directors perform some of the same functions of an Audit Committee, such as recommending a firm of independent certified public accountants to audit the annual financial statements; reviewing the independent auditor’s independence, the financial statements and their audit report; and reviewing management's administration of the system of internal accounting controls. We do not currently have a written audit committee charter or similar document.
We have no financial expert. We believe the cost related to retaining a financial expert at this time is prohibitive. Further, because we are currently a blank check company, we believe the services of a financial expert are not warranted.
Code of Ethics
A code of ethics relates to written standards that are reasonably designed to deter wrongdoing and to promote:
* Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
* Full, fair, accurate, timely and understandable disclosure in reports and documents that are filed with, or submitted to, the Commission and in other public communications made by an issuer;
* Compliance with applicable governmental laws, rules and regulations;
* The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and
* Accountability for adherence to the code.
We have not adopted a corporate code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions in that our two officers and directors serve in the above capacities.
ITEM 11. EXECUTIVE COMPENSATION
Robert Freiheit became Chief Executive Officer of Ameralink on April 1, 2004. Mr. Freiheit has not received any compensation for his services rendered, and has not accrued any compensation pursuant to any agreement with us. However, our Chief Executive Officer anticipates receiving benefits as a beneficial stockholder and, possibly, in other ways.
Furthermore, our directors have not received any compensation for their services rendered, and has not earned any compensation pursuant to any agreement with us.
No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by us for the benefit of our employees.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The table below sets forth information as to each person owning of record or who was known by us to own beneficially more than 5% of the 7,425,000 shares of common stock outstanding as of March 31, 2010, and by the directors and executive officers as a group. Except as otherwise indicated, all shares are owned directly, and the persons named in the table have sole voting and investment power with respect to shares shown as beneficially owned by them.
Name and Address of Beneficial Owners | | Number of Shares of Common Stock Held | | Percent of Ownership |
Robert Freiheit 1940 Zinfandel Drive, Suite R Rancho Cordova, CA 95670 | | 4,184,000 | | 56.3% |
| | | | | |
Thomas J. Manz 4210 East Lane Sacramento, California 95864 | | 2,789,600 | | 37.6% |
| | | | | |
All Officers and Directors as a Group (2) | | 6,973,600 | | 93.9% |
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Since the inception of Ameralink through the date of the change of control described above, the operating expenses of Ameralink were paid by our former principal shareholder (with the exception of expenses paid by the initial proceeds from the sale of common stock). The total amount paid by the former principal shareholder was $16,525 through the date of the change of control. In connection with the change of control, the former principal shareholder contributed the amount owed to him by Ameralink totaling $16,525 back to the capital of Ameralink. Since March 31, 2004, new officers and shareholders have advanced Ameralink $55,953 for the payment of expenses through December 31, 2009.
Ameralink neither owns nor leases any real or personal property. Office services are provided without charge by an officer and director. Such costs are not significant to the financial statements and accordingly, have not been reflected therein.
Our directors are not independent under independent standards applicable to us.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Our financial statements for the years ended December 31, 2009 and 2008 have been audited by our principal accountant, Hansen, Barnett & Maxwell, P.C.,who have also provided all income tax return preparation services during those years. The Chief Executive Officer pre-approves all audit and non-audit services prior to the performance of services by our independent accountants. The percentage of hours expended on the audit by persons other than full time, permanent employees of each accounting firm was zero.
Audit Fees
Aggregate fees billed to us during years ended December 31, 2009 and 2008 for professional services by our principal accountants, for the audit of our annual financial statements and the review of quarterly financial statements were $4,939 and $4,901, respectively.
Audit-Related Fees
There were no fees billed to us in the previous two fiscal years for assurance and related services our principal accountants that are reasonably related to the performance of the audit or review of our financial statements and that are not reported in the previous paragraph.
Tax Fees
Aggregate fees billed to us during the years ended December 31, 2009 and 2008 for professional services by our principal accountants for tax compliance, tax advice, and tax planning were $215 and $568, respectively.
All Other Fees
Aggregate fees billed during the years ended December 31, 2009 and 2008 for products or other services by our principal accountants that are not reported in the previous three paragraphs were $0 and $0, respectively.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Exhibit Number | | SEC Reference Number | | Title of Document | | Location |
| | | | | | | |
| 1 | | (3) | | Articles of Incorporation | | Incorporated by reference(1) |
| | | | | | | |
| 2 | | (3) | | Bylaws | | Incorporated by reference(1) |
| | | | | | | |
| 3 | | (10) | | Letter of Intent dated October 7, 2004 between Ameralink, Inc. and Global Sports Entertainment Group | | Incorporated by reference(2) |
| | | | | | | |
| 4 | | (10) | | Letter of Intent dated February 22, 2006 between Ameralink, Inc. and 518 Media, Inc. | | Incorporated by reference(3) |
| | | | | | | |
| 5 | | (10) | | Agreement and Plan of Merger dated August 11, 2006 among Ameralink, Inc., AMLK Sub Corp., 518 Media, Inc., and the shareholders of 518 Media, Inc. | | Incorporated by reference(4) |
| | | | | | | |
| 6 | | (31) | | Rule 13(a) – 14(a)/15(d) – 14(a) Certification | | This filing |
| | | | | | | |
| 7 | | (32) | | Section 1350 Certification | | This filing |
_________________________
| (1) | Incorporated by reference from Ameralink's registration statement on Form 10-SB filed with the Commission on February 7, 2001, and amended March 13, 2001. |
| (2) | Incorporated by reference from Ameralink’s report on Form 8-K, dated as of October 7, 2004. |
| (3) | Incorporated by reference from Ameralink’s report on Form 8-K, dated as of February 22, 2006. |
| (4) | Incorporated by reference from Ameralink’s quarterly report on Form 10-QSB for the quarter ended June 30, 2006. |
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| | | | |
| | AMERALINK, INC. | |
| | | | |
| | | | |
| Dated: April 13, 2010 | By | /s/ Robert Freiheit | |
| | Robert Freiheit, Chief Executive Officer and Chief Financial Officer (Principal Executive, Financial and Accounting Officer) | |
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| | | | |
| Dated: April 13, 2010 | By | /s/ Robert Freiheit | |
| | | Robert Freiheit, Director | |
| | | | |
| | | | |
| Dated: April 13, 2010 | By | /s/ Thomas J. Manz | |
| | | Thomas J. Manz, Director | |
AMERALINK, INC.
(A Development Stage Company)
INDEX TO FINANCIAL STATEMENTS
| | | Page |
| | | |
| Report of Independent Registered Public Accounting Firm | | F-2 |
| | | |
| Balance Sheets – December 31, 2009 and 2008 | | F-3 |
| | | |
| Statements of Operations for the Years Ended December 31, 2009 and 2008 and for the Period from December 31, 1998 (Date of Inception) through December 31, 2009 | | F-4 |
| | | |
| Statements of Stockholders’ Deficit for the Period from December 31, 1998 (Date of Inception) through December 31, 2007 and for the Years Ended December 31, 2008 and 2009 | | F-5 |
| | | |
| Statements of Cash Flows for the Years Ended December 31, 2009 and 2008 and for the Period from December 31, 1998 (Date of Inception) through December 31, 2009 | | F-6 |
| | | |
| Notes to Financial Statements | | F-7 |
HANSEN, BARNETT & MAXWELL, P.C. | | |
| A Professional Corporation | | Registered with the Public Company |
| CERTIFIED PUBLIC ACCOUNTANTS | | Accounting Oversight Board |
| 5 Triad Center, Suite 750 | | |
| Salt Lake City, UT 84180-1128 | | |
Phone: (801) 532-2200 Fax: (801) 532-7944 | | |
| www.hbmcpas.com | | |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and the Shareholders
Ameralink, Inc.
We have audited the accompanying balance sheets of Ameralink, Inc. (a development stage company) as of December 31, 2009 and 2008, and the related statements of operations, stockholders’ deficit and cash flows for the years ended December 31, 2009 and 2008 and for the period from December 31, 1998 (date of inception) through December 31, 2009. These financial statements are the responsibility of the Company's management.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide 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 Ameralink, Inc. as of December 31, 2009 and 2008 and the results of its operations and its cash flows for the years ended December 31, 2009 and 2008 and for the period from December 31, 1998 (date of inception) through December 31, 2009 in accordance with U.S. generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company’s accumulated deficit and operating losses raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
| | HANSEN, BARNETT & MAXWELL, P.C. |
April 13, 2010
Salt Lake City, Utah
| AMERALINK, INC. |
| (A Development Stage Company) |
| BALANCE SHEETS |
| | | | | | | |
| | | December 31, | | | December 31, | |
| | | 2009 | | | 2008 | |
| ASSETS |
| | | | | | | |
| Current Assets | | | | | | |
| Receivable from attorney's trust account | | $ | 2 | | | $ | 2 | |
| | | | | | | | | |
| Total Assets | | $ | 2 | | | $ | 2 | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' DEFICIT |
| | | | | | | | | |
| Current Liabilities | | | | | | | | |
| Accounts payable | | $ | 14,076 | | | $ | 13,232 | |
| Payable to officers/shareholders | | | 55,953 | | | | 46,496 | |
| Total Current Liabilities | | | 70,029 | | | | 59,728 | |
| | | | | | | | | |
| Stockholders' Deficit | | | | | | | | |
Common stock, $0.001 par value; 25,000,000 shares authorized; 7,425,000 shares issued and outstanding | | | 7,425 | | | | 7,425 | |
| Additional paid-in capital | | | 36,100 | | | | 36,100 | |
| Deficit accumulated during the development stage | | | (113,552 | ) | | | (103,251 | ) |
| Total Stockholders' Deficit | | | (70,027 | ) | | | (59,726 | ) |
| | | | | | | | | |
| Total Liabilities and Stockholders' Deficit | | $ | 2 | | | $ | 2 | |
The accompanying notes are an integral part of these financial statements.
| AMERALINK, INC. | |
| (A Development Stage Company) | |
| STATEMENTS OF OPERATIONS | |
| | | | | | | | | | |
| | | | | | | | For the period from | |
| | | | | | | | December 31, 1998 | |
| | | For the Years Ended | | (date of inception) | |
| | | December 31, | | through | |
| | | 2009 | | | 2008 | | December 31, 2009 | |
| | | | | | | | | | |
| General and administrative expense | | $ | 10,301 | | | $ | 9,675 | | | $ | 113,552 | |
| | | | | | | | | | | | | |
| Net Loss | | $ | (10,301 | ) | | $ | (9,675 | ) | | $ | (113,552 | ) |
| | | | | | | | | | | | | |
Basic and Diluted Loss Per Common Share | | $ | - | | | $ | - | | | | | |
| | | | | | | | | | | | | |
Weighted-Average Common Shares Outstanding | | | 7,425,000 | | | | 7,425,000 | | | | | |
The accompanying notes are an integral part of these financial statements.
| AMERALINK, INC. |
| (A Development Stage Company) |
| Statements of Stockholders' Deficit |
| For the Period from December 31, 1998 (Date of Inception) through December 31, 2007, |
| and for the Years Ended December 31, 2008 and 2009 |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | Deficit | | | | |
| | | | | | | | | | | | Accumulated | | | | |
| | | | | | | | | Additional | | | During the | | | Total | |
| | | Common Stock | | | Paid-In | | | Development | | | Stockholders' | |
| | | Shares | | | Amount | | | Capital | | | Stage | | | Deficit | |
| | | | | | | | | | | | | | | | |
| December 31, 1998 (date of inception) | | | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | | | | | | | | | |
Issuance of stock for cash on January 12, 1999 at $0.001 per share | | | 7,000,000 | | | | 7,000 | | | | - | | | | - | | | | 7,000 | |
| | | | | | | | | | | | | | | | | | | | | |
Issuance of stock on March 22, 2007 in satisfaction of obligations to 518 Media | | | 425,000 | | | | 425 | | | | 19,575 | | | | - | | | | 20,000 | |
| | | | | | | | | | | | | | | | | | | | | |
Contribution of payable to officers/ shareholders to additional paid-in capital | | | - | | | | - | | | | 16,525 | | | | - | | | | 16,525 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net loss | | | - | | | | - | | | | - | | | | (93,576 | ) | | | (93,576 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Balance - December 31, 2007 | | | 7,425,000 | | | | 7,425 | | | | 36,100 | | | | (93,576 | ) | | | (50,051 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Net loss | | | - | | | | - | | | | - | | | | (9,675 | ) | | | (9,675 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Balance - December 31, 2008 | | | 7,425,000 | | | | 7,425 | | | | 36,100 | | | | (103,251 | ) | | | (59,726 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Net loss | | | - | | | | - | | | | - | | | | (10,301 | ) | | | (10,301 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Balance - December 31, 2009 | | | 7,425,000 | | | $ | 7,425 | | | $ | 36,100 | | | $ | (113,552 | ) | | $ | (70,027 | ) |
The accompanying notes are an integral part of these financial statements.
| AMERALINK, INC. |
| (A Development Stage Company) |
| STATEMENTS OF CASH FLOWS |
| | | | | | | | | For the period from | |
| | | | | | | | | December 31, 1998 | |
| | | For the Years Ended | | | (date of inception) | |
| | | December 31, | | | through | |
| | | 2009 | | | 2008 | | | December 31, 2009 | |
| Cash Flows From Operating Activities | | | | | | | | | |
| Net loss | | $ | (10,301 | ) | | $ | (9,675 | ) | | $ | (113,552 | ) |
Adjustments to reconcile net loss to net cash used in operating activities | | | | | | | | | | | | |
| Changes in assets and liabilities: | | | | | | | | | | | | |
| Receivable from attorney's trust account | | | - | | | | - | | | | (2 | ) |
| Accounts payable | | | 10,301 | | | | 9,675 | | | | 86,554 | |
| Net Cash Used In Operating Activities | | | - | | | | - | | | | (27,000 | ) |
| | | | | | | | | | | | | |
| Cash Flows From Investing Activities | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | |
| Cash Flows From Financing Activities | | | | | | | | | | | | |
| Proceeds from the sale of common stock | | | - | | | | - | | | | 7,000 | |
| Advance received from 518 Media, Inc. | | | - | | | | - | | | | 20,000 | |
| Net Cash Provided By Financing Activities | | | - | | | | - | | | | 27,000 | |
| Net Increase In Cash And Cash Equivalents | | | - | | | | - | | | | - | |
| Cash At Beginning Of Period | | | - | | | | - | | | | - | |
| Cash At End Of Period | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | |
| Supplemental disclosure of noncash investing and financing activities: | | | | | | | | | | | | |
| Accounts payable paid by increase in payable to officers/shareholders | | $ | 9,457 | | | $ | 10,610 | | | | | |
| | | | | | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
AMERALINK, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2009 and 2008
NOTE 1 – ORGANIZATION, NATURE OF OPERATIONS, CHANGE IN CONTROL, AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization, Nature of Operations, and Change in Control — Ameralink, Inc. ("the Company") was incorporated in the State of Nevada on December 31, 1998, organized to engage in any lawful corporate business, including but not limited to, participating in mergers with, and the acquisitions of, other companies. The Company is in the development stage and has not yet commenced any formal business operations other than organizational matters. On March 31, 2004, two individuals acquired 99.6% of the stock of the Company from shareholders of the Company for $225,000. At that time, control of the Company was transferred to a new board of directors. The change of control did not constitute a business combination or reorganization, and consequently, the assets and liabilities of the Company continued to be recorded at historical cost. The Company continues to seek merger and/or acquisition candidates.
Use of Estimates — The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. Those standards require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements. They may also affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Income Taxes — Deferred tax assets and liabilities are determined based on temporary differences between financial reporting and tax bases of assets and liabilities and on the amount of operating loss carryforwards, and are measured using the enacted tax rates and laws that will be in effect when the temporary differences and carryforwards are expected to reverse. An allowance against deferred tax assets is recorded when it is more likely than not that such tax benefits will not be realized. Assets and liabilities are established for uncertain tax positions taken or positions expected to be taken in income tax returns when such positions are judged to not meet the “more-likely-than-not” threshold based on the technical merits of the positions. Estimated interest and penalties related to uncertain tax positions are included as a component of selling, general and administrative expense.
Business Condition – The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles, which contemplate continuation of the Company as a going concern. However, the Company has incurred losses since its inception and has not yet established profitable operations. These factors raise substantial doubt about the ability of the Company to continue as a going concern. In this regard, management’s plans include merging with an operating company and raising additional funds to meet its ongoing expenses through shareholder loans or private placement of its equity securities. There is no assurance that the Company will be successful in merging with an operating company or raising additional capital or loans, and if so, on terms favorable to the Company. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.
Loss Per Share – Loss per share amounts are computed by dividing net loss by the weighted-average number of common shares outstanding during each period. At December 31, 2009 and 2008, there were no potentially dilutive common stock equivalents.
AMERALINK, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2009 and 2008
Fair Values of Financial Instruments – Due to their near-term nature, the amounts reported as receivable from attorney’s trust account, accounts payable, and payable to officers/shareholders are considered to be reasonable approximations of their fair values.
Subsequent Events – The Company has evaluated subsequent events through April 13, 2010, the date these financial statements were issued and have determined that there were no subsequent events that require disclosure.
Recently Issued Accounting Statements – In June 2009, the Financial Accounting Standards Board (FASB) issued changes to the accounting for variable interest entities. These changes require a qualitative approach to identifying a controlling financial interest in a variable interest entity (VIE), and requires ongoing assessment of whether an entity is a VIE and whether an interest in a VIE makes the holder the primary beneficiary of the VIE. These changes are effective for annual reporting periods beginning after November 15, 2009. These changes will not have a material impact on the Company’s current financial statements. However, these changes would impact the accounting for controlling financial interests in a VIE that the Company may acquire in the future.
In October 2009, the FASB issued a new accounting standard which amends guidance on accounting for revenue arrangements involving the delivery of more than one element of goods and/or services. This standard addresses the unit of accounting for arrangements involving multiple deliverables and removes the previous separation criteria that objective and reliable evidence of fair value of any undelivered item must exist for the delivered item to be considered a separate unit of accounting. This standard also addresses how the arrangement consideration should be allocated to each deliverable. Finally, this standard expands disclosures related to multiple element revenue arrangements. This standard is effective for the Company beginning January 1, 2011. The adoption of this standard is not expected to have a material impact on the Company’s financial statements.
NOTE 2 – RELATED PARTY TRANSACTIONS
Since the inception of the Company through the date of the change of control described above, the operating expenses of the Company were paid by the former principal shareholder of the Company (with the exception of expenses paid by the initial proceeds from the sale of common stock). The total amount paid by the former principal shareholder was $16,525 through the date of the change of control. In connection with the change of control, the former principal shareholder contributed the amount owed to him by the Company totaling $16,525 back to the capital of the Company. Since March 31, 2004, new officers and shareholders have advanced the Company $55,953 for the payment of expenses incurred since March 31, 2004.
The Company neither owns nor leases any real or personal property. Office services are provided without charge by an officer and director of the Company. Such costs are not significant to the financial statements and accordingly, have not been reflected therein.
AMERALINK, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2009 and 2008
NOTE 3 – INCOME TAXES
At December 31, 2009, the Company has net operating losses available for carry forward in the approximate amount of $113,000. These net operating losses expire starting in 2019 through 2029. The utilization of the net operating loss carry forward is dependent upon the tax laws in effect at the time the net operating loss carry forwards can be utilized. No income tax benefit or deferred tax asset has been recorded in the financial statements because it has not yet been determined to be more likely than not that such tax benefits will be realized. The components of net deferred tax assets and liabilities were as follows at December 31, 2009 and 2008:
| Deferred tax asset - Operating loss carry forwards | | $ | (38,607 | ) | | $ | (35,105 | ) |
| Valuation allowance | | | 38,607 | | | | 35,105 | |
| Net deferred tax asset | | $ | - | | | $ | - | |
The valuation allowance increased $3,502 and $3,290 during the years ended December 31, 2009 and 2008, respectively. The following is a reconciliation of the income tax benefit computed at the statutory federal rate of 34% to income tax expense included in the accompanying financial statements for the years ended December 31, 2009 and 2008:
| | | 2009 | | | 2008 | |
| Income tax benefit at statutory rate (34%) | | $ | (3,502 | ) | | $ | (3,290 | ) |
| Change in valuation allowance | | | 3,502 | | | | 3,290 | |
| Net income tax benefit | | $ | - | | | $ | - | |
The Company files tax returns in the U.S. Federal jurisdiction, but is not required to file with any states. The Company is no longer subject to U.S. federal tax examinations for tax years before and including December 31, 2006. During the years ended December 31, 2009 and 2008, the Company did not recognize interest or penalties.
