UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
TALLY-HO VENTURES, INC.
(Name of small business issuer in its charter)
Delaware 43-1988542
(State or jurisdication of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
518 Oak Street #2, Glendale, California, 91204, 818-550-7886
(Address and telephone number of principal executive offices)
518 Oak Street #2, Glendale, California, 91204
(Address of principal place of business or intended principal place of business)
SAMUEL WIERDLOW, INC.
3422 Old Capitol Trail #584, Wilmington, Delaware, 19808, 302-777-1642
(Name, address and telephone number of agent for service)
Approximate date of proposed sale to the public
As soon as practicable after this registration statement becomes effective
________________________________________________________________________________
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 offfering. [ ]
________________________________________________________________________________
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 offfering. [ ]
________________________________________________________________________________
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [ ]
________________________________________________________________________________
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CALCULATION OF REGISTRATION FEE
____________________ ____________________ ____________________ ____________________ ____________________
Title of each Dollar Proposed Proposed
class of securities amount to maximum offering maximum aggregate Amount of
to be registered be registered price per unit offering price registration fee
____________________ ____________________ ____________________ ____________________ ____________________
Common Stock $0.01 $250,000.00 $20.23
____________________ ____________________ ____________________ ____________________ ____________________
PART I - INFORMATION REQUIRED IN PROSPECTUS
Item 1. Front of Registration Statement and Outside Front Cover of Prospectus.
TALLY-HO VENTURES, INC.
is offering
25,000,000 shares of its Common Stock
These are common shares with a par value of $0.001 per share
Please be advised that no national securities exchanges list these shares being
offerred. And the Nasdaq Stock Market does not list these shares being offerred
either.
IMPORTANT NOTE: INVESTING IN OUR COMPANY, TALLY-HO VENTURES, INC., INVOLVES A
GREAT DEAL OF RISK, FOR MANY DIFFERENT REASONS. PLEASE SEE A LIST OF THE RISK
FACTORS INVOLVED IN INVESTING IN OUR COMPANY, BEGINNING ON PAGE 5 OF THIS
PROSPECTUS.
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA DOES NOT RECOMMEND
OR ENDORSE THE PURCHASE OF THESE SECURITIES.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
We are offering these shares on a best efforts basis (which means we have no
underwriting agreements at all). This offering will end 90 days from the
effective date of this registration statement. There are no minimum purchase
requirements; if you choose to purchase shares, you may purchase as few as only
one share if you wish. You, the prospective investor, should note that we have
no plans to put the funds from this offering in any escrow, trust, or similar
account.
We are offering these securities for $0.01 cash per share. Since we are offering
25,000,000 shares, the total amount of the offering is $250,000.00. There are no
underwriting discounts or commissions; there are no underwriters involved with
this offering at all, and we are not paying any commissions at all as part of
this offering. All proceeds from the sale of shares in this offering will go to
the registrant, Tally-Ho Ventures, Inc., and will not go to any other person(s).
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Item 2. Inside Front and Outside Back Cover Pages of Prospectus.
TABLE OF CONTENTS
Summary Information............................................................3
Risk Factors...................................................................5
Use of Proceeds...............................................................12
Determination of Offering Price...............................................15
Dilution......................................................................16
Plan of Distribution..........................................................16
Directors, Executive Officers, Promoters and Control Persons..................16
Security Ownership of Certain Beneficial Owners and Management................17
Description of Securities.....................................................18
Disclosure of Commission Position of Indemnification for Securities
Act Liabilities............................................................19
Organization Within Last Five Years...........................................19
Description of Business.......................................................20
Management's Discussion and Analysis or Plan of Operation.....................26
Description of Property.......................................................27
Certain Relationships and Related Transactions................................27
Market for Common Equity and Related Stockholder Matters......................27
Financial Statements........................................................F-1
Indemnification of Directors and Officers.....................................28
Other Expenses of Issuance and Distribution...................................28
Recent Sales of Unregistered Securities.......................................28
Exhibits......................................................................29
Signatures....................................................................29
Item 3. Summary Information and Risk Factors
SUMMARY INFORMATION
Our company, Tally-Ho Ventures, Inc., is a start-up entertainment company. Our
goal is to produce both a) television programs for distribution via broadcast,
cable or satellite television channels, as well as b) films for distribution to
movie theatres or directly to video outlets.
Our plan for operations is as follows:
Phase I (over the next 3 years):
- Further develop our website www.tallyhoventures.com and use it as a
marketing tool for the Company by continually creating entertaining
content available for free to the public.
- Attempt to drive up traffic for the website through, e.g., targeted
web advertising.
- As funds allow, produce short and feature-length films, television
pilots and web-exclusive video skits and vignettes.
- Distribute web-exclusive video skits and vignettes via our website
and other relevant websites as examples of our work.
- In order to generate interest in our work and have our products
purchased for distribution, submit our short and feature-length
films to film festivals and markets, as well as to appropriate
television channels, and also distribute these films via our website
and other relevant websites, and finally, send out copies of our
films to members of the entertainment industry who might be
interested in the content.
- Attempt to show and/or submit our television pilots to executives at
he appropriate television channels for the purpose of having our
television programs air on their channels; or, in the alternative,
generate interest in our television pilots by distributing them over
our website, as well as circulating them among members of the
entertainment industry.
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Phase II (3-10 years from now):
- As funding is available, significantly expand operations to include
regular, consistent production of television programs, short and
feature-length films and music videos.
- Maintain and update website entertainment content.
- Move towards normal, industry-standard marketing and advertising
channels for our products, and larger-budget productions.
Phase III (10+ years from now):
- Consider business combinations with other entertainment companies,
especially TV and film production companies; or, in the alternative,
consider either remaining an independent television and film
production company or expanding into becoming a major studio (such
as Viacom's Paramount Pictures, Vivendi Universal's Universal
Pictures and AOL Time Warner's Warner Brothers Studios) or
"mini-major" studio (such as AOL Time Warner's New Line Cinema or
Walt Disney Co.'s Miramax).
Phase I of our plan begins with maintaining the website we have already started,
www.tallyhoventures.com, and continually updating it with entertaining material,
including comedic essays and other written prose, as well as make available for
viewing all of the film and video projects that we do (including our first
project, a short film parody which we have just finished shooting entitled "The
G! True Tinseltown Tale: Dude, Where's My Car?", which spoofs the television
series "The E! True Hollywood Story" as well as the film "Dude, Where's My Car?"
released in 2000 by Twentieth Century Fox). We wish to maintain this website as
free to the public, solely as demonstrations of the kind of artistic work of
which we are capable. We hope in time that this website will in and of itself
gain us exposure in the entertainment industry and lead to professional
production opportunities.
Another part of Phase I is the completion of our first project, the short film
parody "The G! True Tinseltown Tale: Dude, Where's My Car?" All photography has
been completed and we are currently in post-production, adding graphics,
narration and music, and editing the film.
Once this first film is complete, we shall upload it onto our website and make
it available for viewing by the public for free. The film will also be submitted
to other websites which make similar short films available for viewing. We shall
also try a new form of marketing scheme: make VHS and DVD copies of the film and
send them directly to the very people and entities in the entertainment industry
we are parodying. We think this is a clever way to get our filmed parodies
recognized in the entertainment industry. For example, in our first short film
parody, we do send-ups of, inter alia, the television series "The E! True
Hollywood Story" and the film "Dude, Where's My Car?" We want to send copies of
the film to executives at both the television program offices as well as the
film production offices, hope that these executives have good senses of humor
and either pass along or make copies of the tapes for others in the
entertainment industry to see. We hope in this way to gain exposure for our
products, leading eventually to our goal of getting a budget to produce a
television show or film.
Other parts of our marketing plan include submitting our work unsolicited to
certain channels - including HBO, Showtime, Independent Film Channel and
Sundance Channel - which regularly air short films by lesser-known suppliers, as
well as submission of our work for inclusion in various film festivals.
This marketing plan is intended to be replicated for most of the films we
produce.
We can continue to operate without the additional funding provided by this
offering. Current operations will not be hindered if this offering is
unsuccessful. We believe that with the website and its initial content already
in place and our first short film nearly complete, the Company's business plan
and operations can continue and will not be placed in jeopardy if this offering
is not successful. Further, Management of the Company has committed to
personally maintaining, if necessary, the financial resources for the Company to
meet its administrative responsibilities over the coming year, in order that our
marketing plan as described above can be pursued. However, selling all $250,000
worth of stock in this offering will not only allow us to keep up our
administrative responsibilities over the next year, including applying for a
priced quotation on the OTC Pink Sheets, it will also allow us to frequently
update our website and increase operations considerably, including producing 1
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television pilot and between 10 and 15 short and super-short films over the next
year, which would present to us a good number of opportunities to try and market
our entertainment products. The fewer number of shares of stock we sell, the
more limited our future operations will be (see Use of Proceeds, below). Selling
fewer than $12,700 worth of stock in this offering (about 5.1% of our offering
amount) will require Management to personally loan the Company funds in order
for our administrative responsibilities for the next year to be met, including
the application for a listing on the OTC Pink Sheets later this year. We may
also try to obtain a loan from a benefactor or a lending institution, or conduct
a future money raise, such as a private placement offering, although none of
these are currently planned.
We have never had a profit, are in poor financial condition and we anticipate no
profits for the first few years, as we build our brand name and recognition
factor among members of the entertainment industry by making a continuous stream
of short films and other entertainment products and marketing them as described
above. And competition in this industry, particularly in the low-budget,
independent film production niche of the industry, is extremely intense. Major
film studios such as Warner Bros. and Sony Corp's Columbia-Tri Star dominate the
industry; "mini-major" film studios such as Miramax and New Line Cinema compete
fiercely to produce and/or distribute low- and mid-budgeted films; smaller
independent production companies such as Shooting Gallery Films, Vivendi
Universal's October Films, Lion's Gate Films and Regent Entertainment are
well-established and use their recognition and track record as leverage to
compete favorably for financing and other resources used to make films; and
there are literally hundreds of web-based producers of films - with varied
levels of quality - virtually all of which compete for recognition, attention
and, ultimately, financing for future productions, in this crowded marketplace.
The mailing address of our principal executive offices is: 518 Oak St. #2,
Glendale, CA 91204. The telephone number of our principal executive offices is:
(818) 550-7886.
RISK FACTORS
You should carefully consider the following risk factors and all other
information in this prospectus before investing in our common stock. Investing
in our company involves a high degree of risk. Any of the following risks makes
this offering speculative or risky, and could adversely affect our business,
financial condition and results of our operations and could result in a complete
loss of your investment. Though we have tried to outline the risks and
uncertainties that we may face, there may be other risks or uncertainties as
well.
People In The Entertainment Industry To Whom We Send Our Products Could Not Like
Them. As we wrap up post-production on our first entertainment product - a short
film parody entitled "The G! True Tinseltown Tale: Dude, Where's My Car?" - we
plan to send it to the subjects of the parody as a clever way of getting our
products seen. We hope the people in the entertainment industry to whom we send
this tape will like the short film parody, but they may very well not, and be
really angry with us, and possibly even get their lawyers to write "cease and
desist" notices to us, and threaten us with lawsuits if we were to release it.
And if the people in the entertainment industry who we are spoofing and to whom
we are sending copies of the tapes don't like our parody of them, they
definitely will not bootleg copy it and distribute it to their friends in the
entertainment industry like we hoped. This will have a strongly negative effect
on our business plan. We may be forced to hire lawyers to protect us from
lawsuits. It will have a strong chilling effect on any future parody projects we
may wish to do. It will certainly have a negative effect on the website, because
our main attraction - filmed parodies - will not be allowed to be shown, and we
will be left only with comedic writings and other material.
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The People To Whom We Send Our Products May Like Them, But Not Distribute Them.
Even if the people in the entertainment industry who are the subjects of our
parodies and to whom we send the tapes like our work, they may just sit on the
tapes and not make bootleg copies of it. This is very possible. There is no
guarantee that just because someone in the entertainment industry to whom we
send a copy of our tape likes what we sent them, that that automatically means
they make copies of the tape or distribute it in any way on our behalf. They
could just do nothing, in which case we would have some increased recognition in
the entertainment industry, but probably not nearly the amount we would need to
make our business plan work. We need a lot of people in the entertainment
industry to see our work, in order to have the best possible chance of being
offerred funding for future projects.
Our Products May Get Distributed, But Nothing May Come Of It. Even if the people
in the entertainment industry to whom we send the tapes like our products, and
distribute them to others, we may get greater recognition, but nothing concrete
may come of it; in other words, we may get no one who is willing to give us any
funding for future projects, let alone offer us contracts to produce any
television pilots or specials, or any short or feature-length films or any
internet-based films. In order to keep us going in the long run, we are going to
need a contract to produce such products as television shows or films, and it is
entirely possible, even likely given the nature of the entertainment industry as
one where entertainment product supply far outstrips demand, that a lot of
recognition in the industry may produce no such contracts.
Satellite, Broadcast and Cable Outlets May Not Want to Show Our Products. We
mentioned that one way to market our products is to submit them unsolicited to
those entities which typically air comedic parody short films and other similar
products from less well-known suppliers. We really have no idea whether any of
these outlets - including HBO, Showtime, Cinemax, The Movie Channel, IFC and
Sundance Channel - would at all be receptive to our unsolicited product. We
don't know for sure if anyone at any of these outlets would even look at what we
sent them, let alone air it. If none of these outlets airs our work, then that
means a large part of our marketing plan is shut down, making us more reliant on
other parts of our marketing plan.
No Film Festival and/or Competition May Want to Exhibit Any of Our Products.
Many film festivals (which often include competitions of the films they exhibit)
often are overwhelmed with film submissions, and simply do not have enough slots
for all the films which are submitted for consideration. Therefore, it is a
competitive process just to get one's film accepted as an entrant in one of
these film festivals, and there is no guarantee any film festival - whether it
is a large and famous one like Sundance Film Festival in Park City, Utah or
Toronto International Film Festival in Toronto, Ontario, or even a small and
niche one like Giggleshorts Comedy Festival - will want to accept any of our
filmed products for exhibition. If no film festival accepts any of our work,
that means a large part of our marketing plan is shut down, and it also means
much fewer people seeing our products, making it much tougher for us to get the
exposure our products need in order for us to get a paid gig from a film and/or
television distribution company or television network to produce a TV show or
film.
We Are A Start Up Company. We expect to encounter risks and difficulties
frequently faced by start up companies in new and rapidly changing markets. If
you invest in our shares you must consider the risks and difficulties frequently
encountered by new businesses, such as:
o The need to establish our brand name awareness;
o The need for sufficient funds;
o The dependence on our website;
o The need to manage changing and expanding operations;
o The need to effectively compete in the entertainment industry;
o The need to establish ourselves as an important contender in the
evolving film industry.
Although we feel we have substantial understanding of what products people might
enjoy, based on our years of experience and expertise, we may have a limited
insight into other trends that may affect our business. We can't be certain that
we will be successful or that we will successfully address these risks. If we
fail to do so, we would seriously harm our business and operating results.
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We Have No History of Operations. Our operations have consisted mainly of
producing one short film parody, and developing our business model and otherwise
organizing our operations. We incorporated in Delaware on November 21, 2002. We
might suffer big losses in the future as we devote time and money to
development, promotions, marketing, and establishing our marketing staff. To be
profitable we must develop, promote, and market our services, so they are
accepted on a broad, commercial basis.
New Companies Historically Fail. As a new company, we have no significant
operating history for you to base an evaluation of our performance. We are a new
business, and the failure rate for new businesses has been high. Our future
success has to be weighed against our expenses, difficulties and delays that we
expect to encounter with the operation of our new business.
We Have No Recent Profits From Operations and We Have Never Had Profits.
Although we have completed all photography on our first film, this film has not
been sold, and will likely never be sold. In fact, we have not sold a single
thing since we began operations, and so have no profits, recent or otherwise,
and will likely not have any profits for the foreseeable future, as we continue
to produce entertainment products without likelihood that any will be sold.
We Are In A Poor Financial Position. We have no sales and no revenues and do not
anticipate any revenues for the foreseeable future. Current operations may
continue if this offering is not successful; however, future planned operations
over the next year will be quite limited if this offering is not successful,
although Management has committed to personally maintaining, if necessary, the
financial resources for the Company to meet its administrative responsibilities
over the coming year, as well as produce a small number of short and
"super-short" (under 10 minutes) films in order that our marketing plan as
described above can be pursued.
We Do Not Have Sufficient Funds and This May Lead to More-Diluted Stock. Future
events, including the problems, delays, unexpected expenses and other
difficulties frequently encountered by movie production companies may lead to
cost increases that could make the net proceeds of this offering insufficient to
fund our proposed operations. We may require additional financing. This may not
be available on a timely basis, in sufficient amounts or on acceptable terms.
This financing may also dilute existing shareholders' equity. Any debt financing
or other financing of securities senior to common stock will likely include
financial and other covenants that will restrict our flexibility. If we need to
obtain additional financing, there's no assurance that financing will be
available.
We Will Not Be Profitable Anytime Soon. We will not be profitable in the near
future. Our plan does not project profitability anytime soon. Even with a great
deal more funding, either through debt or future equity sales, we can not assure
any profitability of the Company in the near future, certainly not in the next
year or more.
The Economy or Other General Conditions. Our financial position could be further
negatively impacted indirectly by economic or other conditions outside our
control, including:
o recession or inflation;
o job layoffs;
o increase in the unemployment rate;
o war;
o taxes being raised.
Our Business, the Entertainment Industry, Typically Has Far More Supply of
Product Than Demand. Although now with the internet there are literally almost
an inifinite number of ways one may show one's entertainment products to the
public, there are still, nevertheless, only a very few ways to show one's
entertainment product to the public in exchange for money. There's broadcast
network programming, which includes NBC, CBS, ABC, FOX, WB and UPN, and several
basic cable "network" channels which have original entertainment programming,
including USA Network, Comedy Central, Lifetime, E! Entertainment Television,
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the PAX network, ABC Family, and MTV Networks. There's also a limited amount of
original programming funded by premium pay cable outlets, including HBO,
Showtime, Cinemax and Encore! But there are not many other venues for exhibiting
one's work for money, and this huge amount of supply, combined with relatively
few outlets for the supply, creates a "bottleneck" effect for entertainment
products, where there is a great deal of competition among suppliers of
entertainment content, such as the Company, and outlets which air them, such as
broadcast, basic cable and premium cable channels.
Our Business Has Fierce Competition. Our chosen market is highly competitive and
we only expect the competition to intensify in the future. Our competitors -
including Lion's Gate Films, Miramax (a division of Walt Disney Corp.)
Fox Searchlight (a division of News Corp.) and Sony Pictures Classics
(a division of Sony Corp.) - have more funds, technical and marketing know-how
and other advantages than we have. Those companies that have already established
a presence in the entertainment industry, have begun to make a name for
themselves, have existed for a longer period, have more money and have
established strong business relationships. Some of them may expand their presence
on the Internet. We believe that there are numerous smaller companies that are
focused on developing web sites to advertise their films and will compete with
us directly. We can't give you any assurances that these competitors won't
completely dominate our segment of the industry. We also are aware that
competition in film production is also very strong and are relying on our
experience to overcome that competition.
The competition comes from both companies within the same business and companies
in other entertainment media which create alternative forms of leisure
entertainment. The Company may compete with several "major" film studios which
are dominant in the film industry, as well as with numerous independent film and
television production companies, television networks, and pay television systems
for the services of performing artists, directors, producers, and other creative
and technical personnel, and production financing. Many of the organization with
which the Company competes have significantly greater financial and other
resources than does the Company. The majors are typically large, diversified
entertainment concerns or subsidiaries of diversified corporations which have
strong relationships with creative talent, exhibitors, and others involved in
the entertainment industry, and whose non-motion picture operations provide
stable sources of earnings that offset variations in the financial performance
of their motion picture operations.
In addition, there are other sites on the web which have filmed entertainment
products which members of the public may view, including atomfilms.com and
kinemafilms.com, both of which are far more established in the entertainment
industry than we are.
We will have no control over how successful our competitors will be in
addressing these points. Also, increased competition could result in price
reductions, fewer orders, less sales, lower profits and loss of market share.
Our Business, the Entertainment Business, Is Risky. Distributing entertainment
products is a highly risky business. Success of any product depends on its
appeal to public taste, which changes on a whim and can't be predicted. Another
factor is the popularity of other products being distributed at the same time.
How a film will do in the industry is impossible to predict. And, the
entertainment industry, in particular, is going through big changes, due to
technological developments. There is no way we can predict accurately how the
new technological developments will affect the various markets for our products.
Significant Changes in Our Business Could Affect Our Ability to Expand. The
entertainment business, and the film and video industry as it relates to the
internet in particular, may undergo significant changes in the way content is
being chosen, acquired and distributed. We are not familiar with the specifics
of these changes, and as a result, we feel it will be even more difficult for us
to get our products seen if the manner by which outlets choose ther content
changes from the way it is today.
There is No Market For Our Common Equity Securities. Our common shares are not
listed on any stock market or exchange, making the selling and trading of our
shares exceedingly difficult. Without a secondary market, one is not easily able
to sell or trade our shares after purchasing them, and therefore may be stuck
with their shares, rendering them rather unliquid. We do plan to apply for a
priced quotation on the OTC Pink Sheets, but there is no guarantee that our
application will be approved.
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We May Never Develop A Market For Our Stock. After closing, we intend to apply
for a listing of our Common Stock on the OTC Pink Sheets. We don't know if we
will be accepted for listing on this stock exchange. Even if we are accepted,
quotation on the OTC Pink Sheets doesn't assure that a meaningful market will be
created and sustained. In fact, the OTC Pink Sheets are notorious for having
inconsistent or non-existent trading volumes on a day-to-day basis.
We Have Not Done A Feasibility Study. Our business and marketing plans are only
based on our own experience. We can't promise we have made a good judgment of
the workability of this project.
If We Fail, Investors Will Lose Their Money. Tally-Ho Ventures, Inc. is a new
company with an unusual marketing plan and we don't own significant assets or
other securities. Therefore, if we fail to execute our business model
successfully and fail to create a demand for our products we will not achieve
profitability. In that case, you could lose your investment.
We May Not Be Able to Produce Successful Films. Our business is dependent on our
ability to produce quality films, which will be commercially successful.
Furthermore, because each film is an individual artistic work, with its
commercial success primarily determined by an unpredictable audience reaction,
and because costs involved with a film may be greater than its economic return,
there's no assurance as to the economic success of any motion picture.
Therefore, the failure of one or two films could have a material adverse impact
on our financial condition.
We Have Broad Discretion Over Allocation of Funds. If you purchase our stock you
are entrusting the allocation of your investment to our judgment and, outside of
the information supplied in this offering (see Use of Proceeds below) you will
have only limited information about how your funds are applied, particularly
with respect to the budgeting of individual films and other entertainment
products.
Concentration of Share Ownership. Assuming that the maximum number of shares
have been sold, and on the basis of the number of shares of Common Stock that
will be outstanding upon the completion of this offering, the officers and
directors of the Company, as a group, will own or control approximately 60.2%
(percent) of the outstanding common stock. The officers and directors will be
able to control the Company and direct its affairs and business.
We Are Dependent On the Senior Management Team. Our management team is Tal
Kapelner, President and Chairman of the Board of Directors, Cheney Shapiro,
Vice-President, Secretary and a Director and Ariella Kapelner, Treasurer. If we
lost any of these key people it would hinder our progress a great deal. Because
we operate in a competitive market, we are very dependent on being able to
attract qualified people to work with us. So, we must restrict hiring to key
executives and a small administrative staff and invest in marketing and other
activities wisely. Additionally, there is intense competition for the kind of
personnel we need. Our success depends on our ability to attract and hire such
personnel. We can't assure you that we will be able to attract and retain the
kind of staff we need to be successful.
We Could Be Wrongly Speculating On Our Success. We have made an unsurveyed
assumption that the public will want our products. No formal survey has been
done, so we could be wrongly speculating on our success.
We Have No Plans To Pay Dividends. We do not expect to pay dividends now or in
the foreseeable future. We intend to use any future earnings for upkeep of our
website and more entertainment products, such as films. Should we decide to pay
dividends at any time in the future, there is no guarantee that they will be
paid on a timely basis. If in buying our stock you anticipate income from
dividends, you should not buy our stock.
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Unforeseen Events. Catastrophes, either natural or man-made, could greatly delay
operations, or make it impossible for us to operate. Our systems and our
operations would be vulnerable to damage or interruption from fire, flood, power
loss, telecommunications failure, earthquakes and other such events.
Additionally, the servers for our websites could become vulnerable to computer
viruses, physical or electronic break-ins and similar disruptions. This could
lead to interruptions, delays or loss of data.
Our Marketing Strategies Are Unusual. As described above, our marketing
strategies will be done through the internet, distribution of VHS tapes to
members of the entertainment industry, submission of tapes unsolicited to
satellite, cable and broadcast channels, and submission to film festivals. There
is no known track record of campaigns like this being successful. We will also
be finding as many online venues for online advertising, web listings and web
page links to make the consumer aware of our products and us. There is no
empirical data on how successful this marketing approach is or will be.
No One Has Made Any Firm Commitment To Purchase All Or Any Part Of The Shares
We're Offering.We have no underwriting agreement, so we can't promise that all
or any shares will be sold.
We May Have System Interruptions And Capacity Restraints On Our Website. The
satisfactory performance, reliability and availability of our website will be
critical to our reputation. From time to time, we may have temporary system
interruptions for a variety of reasons, including power failures and software
bugs. We may not be able to correct any problem quickly as the reason for the
interruption may be outside of our control, or we might not have sufficient
control to remedy the problem quickly or at all. Any system failure that results
in the unavailability of our web site can result in negative publicity and
reduce the attractiveness of our site.
We May Face Liability. Content on our web site may bring liability to the
Company. We will post product information and other content on our web site and
could possibly face potential liability for negligence, copyright, patent,
trademark, defamation, indecency and other claims based on the nature and
content of the materials we post. Such claims have been brought and sometimes
successfully pressed against Internet content distributors. We could also be
exposed to liability with respect to unauthorized duplication of content or
unauthorized use of other parties' proprietary technology. Although we may
obtain general liability insurance, it may not cover potential claims of this
type or may not be adequate to protect us from all liability that may be
imposed. Therefore any imposition of liability could hurt our business.
Limited Protection of Intellectual Property Rights. The Company regards its
entertainment products, as well as the scripts for all scripted entertainment
products, as proprietary and relies primarily on a combination of copyright,
trademark, trade secret and confidential information laws, and will rely on
employee and third-party non-disclosure agreements and other methods, to protect
its proprietary rights. There can be no assurance that these protections will be
adequate to protect the Company's intellectual property rights or that the
Company's competitors will not independently develop technologies that are
substantially equivalent or superior to the Company's technologies. The Company
believes that its products, trademarks and other proprietary rights do not
infringe on the proprietary rights of third parties. There can be no assurance
that third parties will not assert infringement claims against the Company in
the future with respect to current or future products, trademarks or other
Company works or that such assertion may not require the Company to enter into
royalty arrangements or result in costly litigation.
The Price Of Our Stock Is Arbitrary. The price of our stock has been determined
arbitrarily by Tally-Ho Ventures, Inc. and has no bearing on our assets, book
value, revenues, prospects or other established criteria of valuation. Since our
common stock has never been traded on a secondary market, prices for the common
stock may decline after the offering. There is no public market for our stock
and we can't promise a market will develop or that any shareholder will be able
to liquidate his investment quickly, if at all. We have no underwriter in
connection with this offering.
If a market does develop, the price could be very volatile. Also, an active
trading market for our common stock might not develop or be sustained. Factors
such as the ones discussed here in the Risk Factors section could have
significant impact on the market price of our stock. Even if a purchaser does
10
find a broker who will to do a transaction in our common stock, the combination
of brokerage commissions, state transfer taxes (if any) and other selling costs
may exceed the selling price.
You may also face large restrictions on the resale of our common stock because
of state and federal laws and regulations.
The Market For Penny Stocks Has Suffered. In recent years, the penny stock
(under $5) secondary markets have sufferred from patterns of fraud and abuse.
Such patterns include:
o control of the market for the security by one or a few broker-
dealers who are often related to the promoter or issuer;
o manipulation of prices through pre-arranged matching of purchases,
sales and false and misleading press releases;
o boiler room practices involving high pressure sales persons;
o excessive and undisclosed bid-ask differentials and mark-ups selling
broker-dealers;
o the wholesale dumping of the same securities by promoters and
broker-dealers after prices have been manipulated to a level, along
with the inevitable collapse of those prices consequent to investor
losses.
We are aware of the abuses that have occurred historically in the penny stock
market. Though we aren't in a position to dictate the behavior of the market, we
will strive (within practical limits) to prevent the above patterns from being
established as it relates to our stock.
We Have A Limitation Of Liability Against Our Directors. As permitted by
Delaware law, there are limits of liability of our directors for monetary
damages for breach of director's fiduciary duty except for liability in certain
instances. As a result you as a stockholder will have limited rights to recover
against directors for breach of fiduciary duty.
Forward Looking Statements Can't Be Relied Upon. The information and discussion
in this Prospectus contains both historical and forward-looking statements. The
forward-looking statements regarding our financial condition, operating results,
business prospects or any other aspect of our company, can be quite different
from our actual financial condition, operating results and business performance
in the end, once we have become operational.
We have tried to identify factors that would cause results to differ from our
expectations. The factors we have isolated are:
o bad economic conditions;
o intense competition;
o entry of new competitors with similar marketing plans;
o increased and more stringent federal, state and local government
regulation;
o under-funding;
o unexpected costs;
o price increases for supplies;
o inability to raise prices;
o failure to get more people to view our site;
o risk of litigation and administrative proceedings against our
Company and our employees;
o fluctuation of our operating results and financial condition;
o bad publicity and news coverage;
o unsuccessful marketing and sales plans;
o loss of key executives;
o inflation factors;
o failure to win a slot in a film festival;
o failure to get any of our work aired on a broadcast, satellite or
cable outlet.
11
Item 4. Use of Proceeds
The net proceeds of the offering will be used as follows:
If all 25,000,000 shares in the offering are sold, net proceeds will be
$250,000, used as follows:
(all figures are approximate)
Priority Number 1:
o Conducting Offering Pursuant to This Registration Statement
Repay loans from Management for costs as follows:
- SEC and Blue Sky State Registration Fees: 300
- Copying and Printing Prospectus: 250
- Mailing and Couriering Prospectus: 1,500
-----
Sub-Total (priority #1) 2,050
Priority Number 2:
o Other Administrative Duties and Functions
- Transfer Agent Fees; Share Certificates: 600
- Accounting Fees (through 2003): 6,000
- Bank Account Fees (through 2003): 150
- Legal Fees (for quarterly reports through 2003): 1,500
- EDGARizing (for quarterly reports through 2003): 800
- Misc. Office and Computer Supplies/Phone/Fax: 3,600
- Reserve Account: 2,000
-----
Sub-Total (priority #2) 14,650
Priority Number 3:
o Marketing Expenses
- Continued Web Hosting and Design (through 2003): 5,000
- Making VHS/DVD Copies of Our Work: 900
- Mailing VHS/DVD Copies of Our Work: 1,400
-----
Sub-Total (priority #3) 7,300
Priority Number 4:
o Entertainment Products
- 1 television pilot (in 2003): 100,000
- 7 short films (in 2003): 91,000
- 7 super-short (under 10 minutes) films (in 2003): 35,000
------
Sub-Total (priority #4) 226,000
Total (all priorities) 250,000
If we sell only 12,500,000 shares in the offering (50% of the maximum), we will
get $125,000 net proceeds and use the money as follows:
(all figures are approximate)
Priority Number 1:
o Conducting Offering Pursuant to This Registration Statement
Repay loans from Management for costs as follows:
- SEC and Blue Sky State Registration Fees: 300
- Copying and Printing Prospectus: 250
- Mailing and Couriering Prospectus: 1,500
-----
Sub-Total (priority #1) 2,050
12
Priority Number 2:
o Other Administrative Duties and Functions
- Transfer Agent Fees; Share Certificates: 600
- Accounting Fees (through 2003): 6,000
- Bank Account Fees (through 2003): 150
- Legal Fees (for quarterly reports through 2003): 1,500
- EDGARizing (for quarterly reports through 2003): 800
- Misc. Office and Computer Supplies/Phone/Fax: 3,600
- Reserve Account: 3,000
-----
Sub-Total (priority #2) 15,650
Priority Number 3:
o Marketing Expenses
- Continued Web Hosting and Design (through 2003): 5,000
- Making VHS/DVD Copies of Our Work: 900
- Mailing VHS/DVD Copies of Our Work: 1,400
-----
Sub-Total (priority #3) 7,300
Priority Number 4:
o Entertainment Products
- 5 short films (in 2003): 65,000
- 7 super-short (under 10 minutes) films (in 2003): 35,000
------
Sub-Total (priority #4) 100,000
Total (all priorities) 125,000
If we sell only 6,250,000 shares in the offering (25% of the maximum), we will
get $62,500 net proceeds and use the money as follows:
(all figures are approximate)
Priority Number 1:
o Conducting Offering Pursuant to This Registration Statement
Repay loans from Management for costs as follows:
- SEC and Blue Sky State Registration Fees: 300
- Copying and Printing Prospectus: 250
- Mailing and Couriering Prospectus: 1,500
------
Sub-Total (priority #1) 2,050
Priority Number 2:
o Other Administrative Duties and Functions
- Transfer Agent Fees; Share Certificates: 600
- Accounting Fees (through 2003): 6,000
- Bank Account Fees (through 2003): 150
- Legal Fees (for quarterly reports through 2003): 1,500
- EDGARizing (for quarterly reports through 2003): 800
- Misc. Office and Computer Supplies/Phone/Fax: 3,600
- Reserve Account: 300
-----
Sub-Total (priority #2) 12,950
13
Priority Number 3:
o Marketing Expenses
- Continued Web Hosting and Design (through 2003): 5,000
- Making VHS/DVD Copies of Our Work: 600
- Mailing VHS/DVD Copies of Our Work: 900
-----
Sub-Total (priority #3) 6,500
Priority Number 4:
o Entertainment Products
- 2 short films (in 2003): 26,000
- 3 super-short (under 10 minutes)films (in 2003): 15,000
------
Sub-Total (priority #4) 41,000
Total (all priorities) 62,500
If we sell only 2,500,000 shares in the offering (10% of the maximum), we will
get $25,000 net proceeds and use the money as follows:
(all figures are approximate)
Priority Number 1:
o Conducting Offering Pursuant to This Registration Statement
Repay loans from Management for costs as follows:
- Blue Sky State Registration Fees: 300
- Copying and Printing Prospectus: 250
- Mailing and Couriering Prospectus: 1,500
------
Sub-Total (priority #1) 2,050
Priority Number 2:
o Other Administrative Duties and Functions
- Transfer Agent Fees; Share Certificates: 600
- Accounting Fees (through 2003): 3,000
- Bank Account Fees (through 2003): 150
- Legal Fees (for quarterly reports through 2003): 1,500
- EDGARizing (for quarterly reports through 2003): 800
- Misc. Office and Computer Supplies/Phone/Fax: 3,600
- Reserve Account: 2,700
-----
Sub-Total (priority #2) 12,350
Priority Number 3:
o Marketing Expenses
- Continued Web Hosting and Design (through 2003): 5,000
- Making VHS/DVD Copies of Our Work: 200
- Mailing VHS/DVD Copies of Our Work: 400
-----
Sub-Total (priority #3) 5,600
Priority Number 4:
o Entertainment Products
- 1 super-short (under 10 minutes) film (in 2003): 5,000
-----
Sub-Total (priority #4) 5,000
14
Total (all priorities) 25,000 If we sell only 1,270,000 shares in the offering
(5.1% of the maximum), we will get $12,700 net proceeds and use the money as
follows:
(all figures are approximate)
Priority Number 1:
o Conducting Offering Pursuant to This Registration Statement
Repay loans from Management for costs as follows:
- SEC and Blue Sky State Registration Fees: 300
- Copying and Printing Prospectus: 250
- Mailing and Couriering Prospectus: 1,500
-----
Sub-Total (priority #1) 2,050
Priority Number 2:
o Other Administrative Duties and Functions
- Transfer Agent Fees; Share Certificates: 600
- Accounting Fees (through 2003): 3,000
- Bank Account Fees (through 2003): 150
- Legal Fees (for quarterly reports through 2003): 1,500
- EDGARizing (for quarterly reports through 2003): 800
- Misc. Office and Computer Supplies/Phone/Fax: 3,600
-----
Sub-Total (priority #2) 10,650
Total (all priorities) 12,700
Below this level of only $12,700 worth of shares sold in this offering,
Management will be required to honor their commitment to personally loan the
Company funds in order for our administrative responsibilities for the next year
to be met, including the application for a listing on the OTC Pink Sheets later
this year. We may also try to obtain a loan from a benefactor or a lending
institution, or conduct a future money raise, such as a private placement
offering, although none of these are currently planned. (Please see Risk
Factors, above.)
Item 5. Determination of Offering Price.
Our offering price was set arbitrarily by our management, and the price chosen
has no bearing on our assets, book value, revenues, prospects or other
established criteria of valuation (see Risk Factors, above). Despite the
offering price being arbitrary, there were certain nebulous and subjective
factors that were considered by management in determining the offering price,
and these factors were
a) the fact that our company is just over four months old, with no real
operating history, except for one short film which has completed shooting and is
currently in post-production;
b) the fact that we have not had profits nor revenues, and expect no revenues
for the near future and no profits for the foreseeable future;
c) the fact that our business is extremely risky and speculative;
d) the fact that we do not have experience running a reporting company;
e) the fact that at $0.01 per share, the public would be buying our shares at
ten times the price that the officers and directors of the Company paid when
they bought our shares at the Company's inception;
f) our attempt to set a price that could offset the risks involved in a
potential investor's mind; and
g) our attempt to start small, not risk more investors' money than we have to,
and then, if we begin meeting the goals in our business plan, to do future money
raises as needed and set the price higher.
15
Item 6. Dilution.
The price per share paid by the officers and directors of the Company was $0.001
per share (equivalent to the par value of the shares). They got their shares at
the Company's inception.
The price per share we are asking the public to pay in this offering is $0.01
per share, which is ten times what the officers and directors paid for their
shares.
The net tangible book value per share before the distribution is $0.000.
Assuming all shares in the offering are sold, the net tangible book value per
share after the distribution will be $0.003.
Assuming all shares in the offering are sold, the amount of the increase in such
net tangible book value per share attributable to the cash payments made by
purchasers of the shares being offered is $0.003 (100%).
Assuming all shares in the offering are sold, the amount of the immediate
dilution from the public offering price which will be absorbed by such
purchasers is 70%.
Item 8. Plan of Distribution.
Our plan of distribution is to offer for sale 25,000,000 shares of our common
stock for cash at a price of $0.01 per share and/or in exchange for services
rendered at the same value of $0.01 per share or to cancel debt at the same
value of $0.01 per share. We have registered the shares for sale to provide us
with freely tradeable securities. The Company will receive any net proceeds from
the sale of these shares and we will use the proceeds at our discretion (please
see Use of Proceeds, above). If we fail to raise the maximum offering, the
Company will keep whatever funds are raised in order to offset the costs of this
offering.
We do not intend to allow any of our officers or directors to purchase shares in
this offering.
We will use our subscription agreement, which can be found in the Exhibit
Section of this statement, to determine each purchaser's qualifications to
invest. Each potential investor will be required to complete a subscription
agreement, because the purchase of our stock involves substantial risks, which
will outline his or her financial status and capabilities for purchasing a high
risk investment.
The Company will not be using any broker-dealers or underwriters in the selling
of shares in this offering, and will not pay any commissions to anyone,
including members of management, in connection with this offering. Members of
management will attempt to sell the 25,000,000 shares being offerred on a
best-efforts basis.
Item 10. Directors, Executive Officers, Promoters and Control Persons.
The following are the names and ages of all directors and executive officers,
their positions and offices, and brief descriptions of their business experience
during the past five years:
Name Age Position(s) Held Business Experience During
With the Company Past Five Years
Tal Kapelner 28 President and Sole officer and director of
Chairman of the his own California subchapter
Board of Directors S corporation, which sells
technical writing and .
administrative services,
16
Cheney Shapiro 20 Vice-President, Executive Assistant to Chairman of
Secretary and David Morse and Associates, an
a Director insurance adjusting firm in
Glendale, California, 2000-2002.
Currently offers her administrative
services to business consultants.
Ariella Kapelner 56 Treasurer Currently serves as Executive
Director of Living and Education,
Inc., a non-profit production company
producing educational television shows,
videos and motion pictures. A licensed
postsecondary school director, Ms.
Kapelner has also served as its CFO
for three years. Ms. Kapelner is also
Executive Director of the Federal
Commission on Educational Rights, Inc.
and is overseeing its financial matters.
The following are all the directors of the Company, their terms of office and
periods in which they served, and identification of any other directorships held
in reporting companies, with names of those companies:
Director's Name Term of Office as Director and Other Directorships Held in
Period During Which Served Reporting Companies
Tal Kapelner 4 months None
Served November 21, 2002 - present
Cheney Shapiro 4 months None
Served November 21, 2002 - present
Ariella Kapelner, treasurer, is the mother of president and Chairman of the
Board, Tal Kapelner.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
The following information is for any person (including any group of two or more
persons acting as a partnership, syndicate or other similar group) who is known
to us to be the beneficial owner of more than five percent of any class of our
voting securities:
Title of Class Name and Address of Beneficial Owner Amount and Nature Percent
of Beneficial Owner of Class
Common Tal Kapelner 20,000,000 shares(1) 46.3
Stock c/o Tally-Ho Ventures, Inc. President and
518 Oak Street #2 Chairman of the
Board of Directors
Common Cheney Shapiro 20,000,000 shares(2) 46.3
Stock c/o Tally-Ho Ventures, Inc. Vice-President,
518 Oak Street #2 Secretary and a
Director
(1) Tal Kapelner owns 20,000,000 shares of the Company, no part of which are
options, warrants, or via any other rights, and he has no rights to
acquire beneficial ownership of any other shares, whether through option,
warrant, conversion privilege or any other right, within sixty days.
(2) Cheney Shapiro owns 20,000,000 shares of the Company, no part of which are
options, warrants, or via any other rights, and she has no rights to
acquire beneficial ownership of any other shares, whether through option,
warrant, conversion privilege or any other right, within sixty days.
17
We only have one class of equity securities, and that is our Common Stock, and
we have no parents or subsidiaries. For our Common Stock, we present the
following information regarding the security ownership of our management, as of
December 31, 2002:
Title of Class Name and Address of Beneficial Owner Amount and Nature Percent
of Beneficial Owner of Class
Common Tal Kapelner 20,000,000 shares(1) 46.3
Stock c/o Tally-Ho Ventures, Inc. President and
518 Oak Street #2 Chairman of the
Board of Directors
Common Cheney Shapiro 20,000,000 shares(2) 46.3
Stock c/o Tally-Ho Ventures, Inc. Vice-President,
518 Oak Street #2 Secretary and a
Director
Common Ariella Kapelner 1,000,000 shares(3) 2.3
Stock c/o Tally-Ho Ventures, Inc. Treasurer
518 Oak Street #2
Common All Directors and Executive 41,000,000 shares(4) 95.0
Stock Officers as a Group.
c/o Tally-Ho Ventures, Inc
518 Oak Street #2
(1) Tal Kapelner owns 20,000,000 shares of the Company, no part of which are
options, warrants, or via any other rights, and he has no rights to
acquire beneficial ownership of any other shares, whether through option,
warrant, conversion prvilege or any other right, within sixty days.
(2) Cheney Shapiro owns 20,000,000 shares of the Company, no part of which are
options, warrants, or via any other rights, and she has no rights to
acquire beneficial ownership of any other shares, whether through option,
warrant, conversion privilege or any other right, within sixty days.
(3) Ariella Kapelner owns 1,000,000 shares of the Company, no part of which
are options, warrants, or via any other rights, and she has no rights to
acquire beneficial ownership of any other shares, whether through option,
warrant, conversion privilege or any other right, within sixty days.
(4) All Directors and Executive Officers as a Group own 41,000,000 shares of
the Company, no part of which are options, warrants, or via any other
rights, and they have no rights to acquire beneficial ownership of any
other shares, whether through option, warrant, conversion privilege or any
other right, within sixty days.
Item 12. Description of Securities.
Dividend Rights - Holders of record of shares of Common Stock are entitled to
receive dividends when and if declared by the Board of Directors out of funds of
the Company legally available therefore.
Voting Rights - Holders of shares of Common Stock are entitled to one vote for
each share held of record on all matters submitted to a vote of the
stockholders, including the election of directors. Shares of Common Stock do not
have cumulative voting rights, which means that the holders of the majority of
the share votes eligible to vote and voting for the election of the Board of
Directors can elect all members of the Board of Directors.
Preemption Rights - Holders of our common stock have no preemptive or conversion
rights or other rights to subscribe for or to purchase any stock, obligations or
other securities of the Company.
18
Liquidation Rights - In the case of liquidation, dissolution or winding up of
Tally-Ho Ventures, Inc., the holders of shares of our Common Stock will be
entitled to share ratably in the net assets of the Company legally available for
distribution to shareholders after payment of all our liabilities and any
preferred stock then outstanding (although none is currently outstanding).
Other Material Rights - There are no redemption or sinking fund provisions
applicable to our Common Stock. The rights, preferences and privileges of
holders of our Common Stock are subject to the rights of the holders of shares
of any series of preferred stock that we may designate and issue in the future,
although our Certificate of Incorporation does not currently authorize any
preferred stock at all.
Item 14. Disclosure of Commission Position of Indemnification for Securities Act
Liabilities.
Section 145 of the Delaware General Corporation law makes provision for the
indemnification of officers and directors under certain circumstances from
liabilities, including reimbursement for expenses incurred, arising under the
Securities Act. Section 145 of the Delaware General Corporation law empowers a
corporation to indemnify its directors and officers and to purchase insurance
with respect to liability arising out of their capacity or status as directors
and officers, provided that this provision shall not eliminate or limit the
liability of a director:
a) for any breach of the director's duty of loyalty to the corporation
or its stockholders;
b) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
c) arising under Section 174 of the Delaware General Corporation law;
or
d) for any transaction from which the director derived an improper
personal benefit.
The Delaware General Corporation law provides further that the indemnification
permitted thereunder shall not be deemed exclusive of any other rights to which
the directors and officers may be entitled under the corporation's bylaws, any
agreement, a vote of stockholders or otherwise.
However, currently, Tally-Ho Ventures, Inc. has no charter provisions, by laws,
contracts or other arrangements that insures or indemnifies directors, officers
or controlling persons of the Company against liability under the Securities
Act.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and controlling persons
of the small business issuer pursuant to the foregoing provisions, or otherwise,
the small business issuer 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.
We provide the undertaking that 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 Company 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, we will, unless in the opinion of our counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
Item 15. Organization Within Last Five Years.
The Company does not have any parents.
We have no promoters.
19
Item 16. Description of Business.
Business Development.
Tally-Ho Ventures, Inc., a Delaware corporation, was incorporated on November
21, 2002.
Before we incorporated, we had the idea of setting up a website which had
entertaining (generally comedic) material on it, including comedic essays and
free-form prose "musings", as well as video and film parodies of varying lengths
(though generally no more than 15-20 minutes each at the most).
Our purpose in having this website is to have people in the entertainment
industry see what kind of work we are capable of, and then give us paid work as
producers of television and film projects.
We then decided that we should start up a corporation as the vehicle by which to
operate this venture, and have the corporation be a television and film
production company, where eventually, after our work would hopefully become
recognized by those people in the entertainment industry who are able to make
the decision to fund a film or television project, we would be given a budget by
a television network or film studio to produce television "pilots", and other
television programs and specials, as well as short- and feature-length films,
for theatrical release or release directly to vide outlets.
We incorporated on November 21, 2002 in the state of Delaware, and since that
time have set up the website described above (located at
www.tallyhoventures.com) as well as begun very rudimentary promotion of the
website, such as submitting our web address to ten or so of the more popular web
search engines and web directories, including Google, HotBot, Lycos, Netscape
Search and DMOZ (which provides search results to many serch engines such as
Alta Vista and AOL search).
We have also worked with the Screen Actors Guild actors union ("SAG") to make
sure our production company complied with all SAG rules for working with
professional acting talent, and to that end we have signed the Experimental Film
Agreement with the Screen Actors Guild (see copy of executed Agreement, attached
as an Exhibit).
Finally, we have recently completed final photography on our first short film
parody, entitled "The G! True Tinseltown Tale: Dude, Where's My Car?" a parody
of both the television series "The E! True Hollywood Story" and the 2000 film
"Dude, Where's My Car?" released by Twentieth Century Fox. The film is now near
completion of post-production, with most editing and graphics completed and
awaiting narration and music, before being marketed and distributed (see
Business of Issuer below for more detail on our distribution and marketing
methods).
Business of Issuer.
Principal products or services and their markets. We are a development-stage
company in the business of producing entertainment products, principally short
films, web-exclusive videos vignettes and skits, and "pilot" (one full-episode
test) television programs. We also are currently engaged in producing
entertaining written material - such as comedic essays and free-form prose - and
posting these and our other products to our website www.tallyhoventures.com.
The market for our products is principally members of the entertainment
industry, particularly those in charge of programming and finances. We
ultimately are seeking professional production opportunities in television and
film, and in order for us to be retained for such producing services we seek for
the Company, we must make our work recognizable among members of the
entertainment industry who are in the position to offer the Company such
professional producing opportunities.
20
A lesser market for our products would be the public at large. We feel that if
we got the attention of enough people, regardless of whether they worked in the
entertainment industry or not, there would be enough positive word of mouth
about our work to generate the kind of producing opportunities described above.
The short- and long-term overall financial plan. We have used no-interest loans
from members of our management for our initial administrative costs, including
accountant's fees, as well as the initial development of the Company's website
and the production of our first major entertainment product, a short film
parody. We are hoping that we are able to sell enough shares in this offering to
allow us to a) maintain our administrative responsibilities, b) maintain and
periodically update our website, and c) continue to market our products and d)
make more products, over the next 12 months (see Management's Discussion and
Analysis or Plan of Operation below). If we do not sell enough shares to do
this, Management will be required to meet its commitment and personally loan the
Company funds in order for our administrative responsibilities for the next year
to be met, including the application for a listing on the OTC Pink Sheets later
this year. We may also try to obtain a loan from a benefactor or a lending
institution, or conduct a future money raise, such as a private placement
offering, although none of these are currently planned. Within three years, we
hope to be offered a budget from a film and/or television distribution company
or television network to produce a film or television program.
We intend to initially apply for a priced quotation on the OTC Pink Sheets
within the coming year.
Distribution and marketing. The first way we intend to market and distribute our
entertainment products is to post them on our website, www.tallyhoventures.com,
and make them available for viewing for free to the public. Initially, we will
not have any resources - except word of mouth - to actively advertise the
website, and so we anticipate very little traffic initially for our website.
However, our website is up and operating properly already, and GraphicPark.net,
the website design and marketing firm we are using, has already submitted our
URL - http://www.tallyhoventures.com - to more than ten popular search engines
and web directories, including Google, HotBot, Lycos, Netscape Search and DMOZ
(which provides search results to many serch engines such as Alta Vista and AOL
search). This will allow the general public to become aware of our site through
web searches they conduct on their own into the areas with which our website
deals, and we anticipate that some growth in site traffic will occur through
this means.
Although our website will have available for viewing all of our products for
free, and therefore not be income-producing, our plan nevertheless calls for us
to concentrate on increasing website traffic, as we view traffic as a way to
increase the positive word of mouth about our products, thus hopefully getting
the attention of executives of a film and/or television distribution company or
television network, who might offer the Company a professional production
opportunity, such as producing a television pilot or special, or short or
feature-length film, and it is the steady producing of television shows and
films which is the ultimate goal of the Company. For that reason, our busines
plan also calls for future funds (funds we receive after this offering is
completed) to be used to advertise on other websites which might have a
demographic that would appreciate our work, including off-beat political
"me-zines" (individualized web sites featuring a definite personality) such as
andrewsullivan.com, or other off-beat humor websites such as bobanddavid.com or
atomfilms.com.
The second way we intend to market and distribute our products is to distribute
recordings of our films via VHS tape and/or DVD to members of the entertainment
community. For example, management's first entertainment product is a short film
entitled: "The G! True Tinseltown Tale: Dude, Where's My Car?" This short film
is a parody of both the television series "The E! True Hollywood Story" as well
as the 2000 film "Dude, Where"s My Car?" released by Twentieth Century Fox. All
photography of the short film was completed in January of 2003 and is now near
completion of post-production. As mentioned above, we intend to market this
product after post-production is completed by uploading it onto the
tallyhoventures.com website. However, we will also send VHS and/or DVD copies of
the film to the subjects that were parodied in the film as a way of enhancing
recognition of the film.
21
This second marketing and distribution method also dovetails with our first
marketing and distribution method (the website), because at the end of the tape
containing the parody, the audience watching the parody will be directed to our
website for more free entertainment products. Future filmed parodies produced by
Management will likely be distributed in a similar fashion.
Although unusual, this marketing maneuver of distributing tapes to members of
the entertainment community as a way of increasing exposure for one's work is
not without precedent. The president of our company, Tal Kapelner, recalls when
he was a writers' assistant and assistant to an executive producer on a network
television sitcom in 1997-1998. During that time, VHS recordings containing
bootleg copies (copies produced without the express permission of its authors)
of a 10-minute video cartoon produced as a "video Christmas Card" were
circulating throughout the entertainment industry. Tal Kapelner himself was
shown a bootleg copy of this 10-minute video Christmas card in the offices of
one of the producers of the television sitcom he was working on at the time. He
recalls that it wasn't long after that time that the creators of this video
Christmas card - who had done no prior work in the entertainment industry - were
offered their own show on Comedy Central, a basic cable television channel
jointly owned by AOL Time Warner and Viacom. The show was entitled "South Park"
and became one of Comedy Central's biggest hits and resulted in millions of
dollars in merchandise sales and, in 1999, box office film revenue.
According to Indiana University Southeast's newspaper "The Horizon" and
internet-based South Park chronicler Scott Hemmings, the story of how the
television show "South Park" came about begins with the producers Matt Stone and
Trey Parker, who met while attending college in Colorado. They worked together
in making film shorts for school, one of which was a short film about 4
foul-mouthed boys trying to kill Frosty the Snowman. The video was sent
unsolicited to an executive at News Corp's 20th Century Fox, who enjoyed it and
offered Parker and Stone $2000 to make a video Christmas card. Stone and Parker
took the idea from the "Frosty" skit they had done and improved the animation a
little. The finished product turned out to be the 10-minute video Christmas
card, entitled "The Spirit of Christmas", wherein the 4 foul-mouthed boys were
involved in a fight between Santa Claus and Jesus. They gave it to the Fox
executive, who enjoyed it so much that he sent it out to his friends, who then
sent it to others, and so on until actor George Clooney got a hold of a copy. He
watched it and liked it so much he sent out between 300 and 700 copies to
everyone he knew. Eventually top executives for various networks saw the skit
and the calls started pouring into Messrs. Stone and Parker with offers to sign
them on to make a series.
We envision our film and video entertainment products, at least initially, to be
distributed in a similar "underground" fashion. We believe that sending our film
and video parodies to the subjects of the parodies themselves is a clever way to
have our products seen, and we hope that our products will be enjoyed by those
to whom we send them, and distributed in the same underground, "guerilla"
fashion as the original video Christmas card produced by Trey Parker and Matt
Stone, with bootleg copies of our products being made by those who view it,
eventually gaining greater recognition in the entertainment industry and perhaps
eventually funding for future entertainment products, including television
series and specials, short and feature-length films and internet-based films.
The third way in which we anticipate marketing and distributing our filmed
entertainment products is to simply submit DVD copies of our film and video
products to those satellite, cable and broadcast entities who air such products.
For example, a DVD copy of our first short film parody, "The G! True Tinseltown
Tale: Dude, Where's My Car?" may be submitted to HBO and/or Cinemax (both owned
by AOL Time Warner), Showtime and/or The Movie Channel (both owned by Viacom),
IFC (Independent Film Channel - owned jointly by Cablevision, General Electric
and MGM) and the Sundance channel (joint venture between Viacom, PolyGram and
Robert Redford). All of these cable and satellite channels air short films
regularly and presumably would be willing to at least look at unsolicited
submissions to see if they would like to air them, although we have no personal
knowledge that it is that easy (see Risk Factors, above). It is true, however,
that Alexandra Pelosi, the producer and director of the feature-length
documentary "Journeys With George" - a documentary featuring an intimate look at
President George W. Bush as he campaigned for President in the year 2000 - did
nothing more than submit her final edit of "Journeys With George" to HBO with a
handwritten note asking them to air it, and HBO executives watched it, liked it
and did, indeed, air it. We will try this plan and hope that something similar
to what transpired for "Journeys With George" occurs for one of our film
products.
22
The fourth manner by which we intend to market and distribute our film and video
products is by submitting them as entries in various film festivals and
competitions across the continent. The largest and most famous film festivals
(which often include competitions of the films they exhibit) in North America
include Sundance and Slamdance, both in Park City, Utah, Telluride in Telluride,
Colorado and the Toronto International Film Festival in Toronto, Ontario. Given
the asymmetric amount of supply of films to the slots allowed in these
festivals, we believe it is not realistic that our films will be shown at any of
these most famous film festivals, although we will certainly try to submit our
films as entrants into them, beginning with our first film parody "The G! True
Hollywood Story: Dude, Where's My Car?" which is currently in post-production.
More realistic, we feel, is successfully entering our films in smaller film
festivals, including Toronto Giggleshorts Comedy Film Festival and World of
Comedy International Film Festival, both held in Toronto, Ontario; Firstglance
Los Angeles Film Festival in Los Angeles; and the Anchorage Film Festival in
Anchorage, Alaska. Exhibiting any of our film products at film festivals
increases the exposure our work receives, increasing the chance that an
executive of a film and/or television distribution company or television network
might see our work, and then might help the Company achieve its goals by
offering the Company a profesional production opportunity, such as producing a
television pilot or special, or short or feature-length film.
The plan for growth. Once the Company begins to generate fees from the
production of films and sees profits being derived from the release of completed
films, which we believe may occur within the next 1-3 years, we are confident
that the Company will be able to meet its minimum operating requirements. We
then anticipate having funds available for the needs of our development, making
it possible to expand in both quality and quantity. (Please see Management's
Discussion and Analysis or Plan of Operation below).
Competition. Initially, in order to make the business, marketing and
distribution plans we described above work, we need to have our entertainment
products competitive in three places: 1) at film festivals, 2) on the Internet,
and 3) within the actual offices of members of the entertainment community. And
business conditions in all three places are extremely competitive.
First, at film festivals, our work will be submitted to the various film
festivals across the continent, and then, prior to each festival, judged against
thousands of other short film submissions. If our work is selected by the
respective festival's judging panel, our work then is exhibited at the festival
along with one hundred or more other films, all presumably of similar quality.
These conditions combine to create a very poor business environment for our
work, in that the likelihood of being offered professional production
opportunities as a result solely of these exhibitions is small.
Second, on the Internet, there is an overwhelming supply of entertainment
products, including short- and feature-length films and videos, and entertaining
written material such as essays, screenplays, teleplays, columns, short stories,
etc., and most of the suppliers of these entertainment products are actively
trying to get their products seen by the broad public, and many want to be
offered paid jobs in the entertainment industry to write, direct, produce or act
in television, music videos and/or film projects, which is similar to our plan.
With the advent of the Internet, the amateur entertainment suppliers have
multiplied geometrically. There are literally thousands upon thousands of
websites such as ours which feature the creative and artistic work of one or
more people in the fields of film, video and creative writing. Websites which
make available entertainment products similar to ours include atomfilms.com,
kinemafilms.com, shockwave.com, pitch-prods.com, cyanpictures.com,
paperbarkfilms.com, and alldaybreakfast.ca. These websites containing
entertainment products similar to ours - and many thousands more - are virtually
all more established than we are, and carry more material than we do currently,
and are more well-known than our website is.
Getting one's product noticed on the Internet in this environment of
overwhelming supply is extremely difficult. And with only a website which so far
contains little content, and only one short film in post-production which cannot
be uploaded onto our site until it is finished, and almost no promotion of the
site, our competitive position in this industry is very weak currently.
23
The third area in which we need our products to be competitive initially is
within the actual work offices of the members of the entertainment community. As
we described above, our plan calls for sending copies of our products to the
very people and/or entities we make fun of in our parodies. This is because the
number of submissions - both solicited and unsolicited - which members of the
entertainment community receive is huge. Often agents, producers, studio heads
and others involved in programming in the entertainment industry will receive
hundreds of submissions every month, including script submissions, video
submissions and so on. Even with our unusual marketing and distribution method,
we face a daunting uphill battle to get our work noticed. And with our
relatively unknown status, our competitive position in this arena is, again,
very weak.
Our position is further weakened because price is not a method of competition in
this segment of the industry. Virtually no low-budget web-based supplier of
entertainment products charges for their products, making it impossible to
"undercut" the competition through price. And of course no supplier charges
members of the entertainment industry a fee when they send submissions because
suppliers are often desperate for members of the entertainment industry to view
their work. Quality of product is certainly a method of competition; however,
there, too, the sheer amount of entertainment products available make it close
to impossible to "rise above the rest" in terms of quality.
Another competitive method is "who you know", meaning that any personal and/or
business relationships cultivated with members of the entertainment community by
each supplier are utilized to get the respective supplier's work seen by those
members of the entertainment community. Here again, although our president and
Chairman worked for one season as a writers' assistant and assistant to the
executive producer on a sitcom which aired on the WB Network, and our
vice-president and secretary has worked as both a personal and business
assistant for several celebrities in the past, we nevertheless cannot say that
we are in a competitive advantage in this method of competition. Our "contacts"
in the entertainment industry do not go deep and wide, and while we certainly
will try to utilize whatever relationships with members of the entertainment
community we have to our advantage, we cannot say that we are in a necessarily
more competitive position in this method of competition than other suppliers,
many of whom are more closely associated with the entertainment industry.
Finally, if we were to be successful to the point where we would be asked to be
the production company of any kind of television programming or film of any
length, our competition would be significantly broadened to include some of the
largest and most well-established multi-national corporations in the world,
including Walt Disney Company, Sony Corp., Viacom, News Corp. and AOL Time
Warner (please see Risk Factors above).
Dependence On a Few Major Customers. Although now with the Internet there are
literally almost an inifinite number of ways one may show one's entertainment
products to the public, there are still, nevertheless, only a very few ways to
show one's entertainment product to the public in exchange for money. There's
broadcast network programming, which includes NBC, CBS, ABC, FOX, WB and UPN,
and several basic cable "network" channels which have original entertainment
programming, including USA Network, Comedy Central, Lifetime, E! Entertainment
Television, the PAX network, ABC Family, and MTV Networks. There's also a
limited amount of original programming funded by premium pay cable outlets,
including HBO, Showtime, Cinemax and Encore! But there are not many other venues
for exhibiting one's work for money, and this huge amount of supply, combined
with relatively few customers for the supply, creates a "bottleneck" effect for
entertainment products, where there is a great deal of competition among
suppliers of entertainment content, such as the Company, and outlets which air
them, such as broadcast, basic cable and premium cable channels. (Please see
Risk Factors above.)
Right now we have no customers, and we anticipate no customers for the near
future. If our business plan was quite successful, then in the foreseeable
future we would likely be reliant on the very few customers delineated above for
all of our work.
24
Intellectual Property and Labor Agreements. Our success and ability to compete
will be dependent in part upon our ability to obtain and maintain protection for
our current and future literary properties, to defend our intellectual property
rights and to operate without infringing on the proprietary rights of others.
While we will attempt to rely, as needed, on a combination of copyrights and
trademarks to establish and protect our intellectual property rights - including
use of the U.S. Patent and Trademark Office's Form PA and the Writers Guild of
America's Intellectual Property Registry - we believe that factors such as the
technical and creative skills of our personnel are more essential to our success
and ability to compete. Despite use of the federal Form PA and the Writers
Guild's Intellectual Property Registry, there can be no assurance that any of
our intellectual property rights will provide competitive advantages or will not
be challenged, invalidated or circumvented by competitors. There can be no
assurance that disputes will not arise concerning the ownership of intellectual
property. Furthermore, there can be no assurance that intellectual properties
will not become known or be independently developed by competitors or that we
will be able to maintain the confidentiality of information relating to our
literary properties.
Conversely, content on our website may bring liability to the Company. Our
website could possibly face potential liability for negligence, copyright,
patent, trademark, defamation, indecency and other claims based on the nature
and content of the materials we post. Such claims have been brought and
sometimes successfully pressed against Internet content distributors. We could
also be exposed to liability with respect to unauthorized duplication of content
or unauthorized use of other parties' proprietary technology. Although, we
intend to obtain general liability insurance, it may not cover potential claims
of this type or may not be adequate to protect us from all liability that may be
imposed. Therefore any imposition of liability could hurt our business. (Please
see Risk Factors above.)
The only labor contract we have currently is the Experimental Film Agreement
with the Screen Actors Guild (see copy of executed Agreement, attached as an
Exhibit), which discusses the rules involved with hiring, paying and working
with the actors we use on our film and television shoots. We do not believe this
agreement with SAG will negatively affect our business, as it specifically
stipulates that we have the right as Producers to negotiate pay directly with
the performers we wish to hire, rather than be bound by SAG's normal minimum pay
structure. There are, however, other rules we are bound by because of this
Agreement with SAG, including actors' pension and health contributions, which we
feel do increase our costs somewhat. However, importantly, our Experimental Film
Agreement with SAG allows us to hire non-SAG actors as well, greatly broadening
our ability to search for the best and most cost-effective talent for our
productions.
Employees. The total number of employees, including full- and part-time, which
we have is currently zero (0). We rely on the services of our President and
Chairman, Tal Kapelner, our Vice-President, Secretary and Director, Cheney
Shapiro, and our Treasurer, Ariella Kapelner, to devote as much time as they can
to the Company and its projects, and to spend time overseeing our administrative
responsibilities as well, but at this time we have no employees, not even our
three management personnel. In the event we are successful in generating revenue
and making our company profitable, employment contracts will be offered to
members of our management personnel, and if in the mid-future (1-3 years from
now) we are successful enough to have the resources for and need to hire
additional management or administrative or other personnel, we will do so.
With respect to our filmed entertainment products, those are worked on by
independent contractors who work on each shoot on a project basis. For example,
a director of photography and a script supervisor were retained for "The G! True
Tinseltown Tale: Dude, Where's My Car?" and then paid by the shoot day as
independent contractors. Currently the film is in post-production getting edited
by an editor who is paid by the hour and is also not an employee. The only
exception to this are the actors. Pursuant to the contract we signed with the
Screen Actors Guild, we are required to consider the actors we hire on each film
employees, even if they are hired for only one day. However, the typical length
of employment for actors on a short film shoot is 1-2 days (such as it was with
"The G! True Tinseltown Tale: Dude, Where's My Car?"). This is typical of our
industry and we will likely continue to produce film entertainment products
without hiring employees, except for the actors on very short-term bases.
25
Reports to Security Holders.
We will not voluntarily send an annual report to security holders. However, upon
the effective date of this registration statement, we shall become subject to
the requirement to prepare a 10-KSB (annual report) every year, and once each
10-KSB has been prepared and approved by our counsel for filing with the SEC, we
will provide this report to any security holder who requests one, and these
reports will include audited financial statements.
We do not currently file reports with the Securities and Exchange Commission.
However, upon the effective date of this registration statement, we shall become
subject to the following filing requirements under Section 12 of the Securities
and Exchange Act of 1934:
- The requirement to file periodic reports under Section 13(a);
- The proxy rules under Section 14(a) and (c);
- Section 16 (including the requirement to file forms 3, 4 and 5); and
- The Williams Act, including:
o the beneficial ownership reporting rules under Section 13(d)
and 13(g);
o the issuer tender offer and going private transaction rules
under Section 13(e);
o the third-party tender offer rules under Section 14(e);
o the institutional investment manager reporting rules under
Section 13(f); and
o the basic disclosure, procedural and anti-fraud requirements
for all tender offers under Section 14(e).
The public may read and copy any materials we file with the SEC at the SEC's
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The
public may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that
contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC. The address of that
site is http://www.sec.gov. Our Internet address is http://www.tallyhoventures.com.
Item 17. Management's Discussion and Analysis or Plan of Operation.
We can continue to operate, albeit in a limited capacity, without the additional
funding provided by this offering. We believe that with the website and its
initial content already in place and our first short film nearly complete, the
Company's business plan and operations can continue and will not be placed in
jeopardy if this offering is not successful. And Management has committed to
personally maintaining, if necessary, the financial resources for the Company to
meet its administrative responsibilities over the coming year, in order that our
marketing plan can be pursued. However, we have never had any revenues and do
not anticipate any in the next 12 months; we have subsisted so far in loans from
Management. And in order to maintain our administrative responsibilities over
the next 12 months, and also apply for a priced quotation on the OTC Pink Sheets
in the coming year, without personal financial support from Management, we need
to sell at least $12,700 worth of our stock in this offering.
If we can sell at least 10% of the shares in this offering - $25,000 worth -
then we will be able to maintain our administrative responsibilities for the
next 12 months, apply for listing on the OTC Pink Sheets as planned in the next
12 months, and also produce enough new entertainment products in the next 12
months to keep our business plan viable, all without personal financial support
from Management.
Over the next 12 months, we plan to produce a minimum of 1 television pilot, 7
super-short (under ten minutes long) films and 7 short films (10-40 minutes
long).
Our idea for the television pilot is a "behind-the-scenes" reality-based
television show which will feature edited footage of three writing partners
coming together at a table to write a comedy sketch of their choosing. The first
two-thirds of the show will contain this footage showing the writers attempting
to put funny material down on paper in the form of a five-minute comedy skit.
The final 5-10 minutes of the program will feature professional actors actually
performing the skit the writers just completed writing, as well as bonus
behind-the-scenes footage showing the actors first reading their lines and
rehearsing.
26
We have many ideas in development for our short and super short films, including
a spoof of Viacom's basic cable channel MTV, tentatively titled "20 Things You
Won't See on MTV (Like Dignity)"; a parody of the television series "Inside the
Actor"s Studio"; a parody of the Carl's Jr. commercials (Carl's Jr. is a
fast-food restaurant chain owned by CKE, which also owns Hardee's restaurants);
and a web-exclusive video vignette featuring two sets of teams, each with their
own car, attepting to garner the most number of parking tickets in one day in
the Greater Los Angeles Area.
We have no purchases or sales of plant and/or significant equipment planned in
the next 12 months.
We do not anticipate any significant changes in the number of employees. We
currently have zero and anticipate having zero employees in the next 12 months.
Item 18. Description of Property.
We have our offices at 518 Oak Street #2 in Glendale, California. We do not own
this property - which is in good, working condition, in a modern apartment
building - but rather it is provided to us for free as a work space by our
president and Chairman, Tal Kapelner, who himself rents the apartment of which
we use a portion. It contains sufficient space and materiel for us to do our
administrative work for the Company; however, it is the opinion of management of
the Company that this property is not adequately covered by insurance;
specifically, there is no renter's insurance for this apartment.
Currently, and for the foreseeable future (over the next 12 months), it is our
policy to not engage in any investments in real estate or interests in real
estate, or any investments in real estate mortgages, or any securities of or
interests in persons primarily engaged in real estate activity; however, we do
not have in place specific, written limitations on the percentage of assets
which may be invested in any one investment, or type of investment. This policy
we have described may be changed without a vote of our security holders.
Currently, it is not our policy to acquire assets either primarily for possible
capital gain or primarily for income.
Item 19. Certain Relationships and Related Transactions.
The Company does not have any parents.
We have no promoters.
Item 20. Market for Common Equity and Related Stockholder Matters.
There is no public trading market where our common equity is traded.
There is zero common equity for the Company which is subject to outstanding
options or warrants to purchase, or securities convertible into our common
equity.
There is zero common equity which could be sold pursuant to Rule 144 under the
Securities Act or that we have agreed to register under the Securities Act for
sale by security holders.
There is zero common equity which is being or has been proposed to be publicly
offered by the Company, the offering of which could have a material effect on
the market price of our common equity.
We have only one authorized class of common equity, and that is our Common
Stock. There are seven holders of record of this class of common equity.
27
INDEPENDENT AUDITORS REPORT
To the Board of Directors
Tally-Ho Ventures, Inc.
(A Development Stage Company)
Glendale, California
We have audited the accompanying balance sheet of Tally-Ho Ventures, Inc. as of
December 31, 2002, and the related statements of expenses, stockholders'
deficit, and cash flows for the period from November 21, 2002 (Inception)
through December 31, 2002. These financial statements are the responsibility of
Tally-Ho's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. 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 statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Tally-Ho Ventures, Inc., as of
December 31, 2002, and the results of its operations and its cash flows for the
period described in conformity with accounting principles generally accepted in
the United States of America.
MALONE & BAILEY, PLLC
www.malone-bailey.com
Houston, Texas
March 30, 2003
F-1
TALLY-HO VENTURES, INC.
(A Development Stage Company)
BALANCE SHEET
As of December 31, 2002
ASSETS
Current Assets
Cash $ 2,450
========
LIABILITIES AND STOCKHOLDERS' DEFICIT
LIABILITIES
Current Liabilities
Notes payable to shareholders $ 2,524
--------
Commitments
STOCKHOLDERS' DEFICIT
Common stock, $.001 par, 75,000,000 shares
authorized, 43,150,000 shares issued and outstanding 43,150
Paid in capital 21,052
Deficit accumulated during the development stage (64,276)
--------
Total Stockholders' Deficit (74)
--------
Total Liabilities and Stockholders' Deficit $ 2,450
========
See accompanying summary of accounting policies
and notes to financial statements.
F-2
TALLY-HO VENTURES, INC.
(A Development Stage Company)
STATEMENT OF EXPENSES
For the Period from November 21, 2002 (Inception)
Through December 31, 2002
Administrative expenses
- paid in cash $ 74
- paid in stock 64,200
- imputed interest 2
--------
Net loss $(64,276)
========
See accompanying summary of accounting policies
and notes to financial statements.
F-3
TALLY-HO VENTURES, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
For the Period from November 21, 2002 (Inception)
Through December 31, 2002
Deficit
Accumulated
During
Common Stock Development
Shares Amount Stage Totals
----------- ----------- ----------- -----------
Shares issued to founder
in November 2002 at
par $.001 41,050,000 $ 41,050 $ 41,050
Shares issued for services
in November 2002 at
par $.001 2,100,000 2,100 2,100
Shares canceled (21,050,000)
Shares issued for services
In November 2002 at
par $.001 21,050,000 21,050 21,050
Imputed interest on notes
payable to shareholders 2 2
Net loss $ (64,276) (64,276)
----------- ----------- ----------- -----------
Balances, December 31, 2002 43,150,000 64,202 $ (64,276) $ (74)
=========== =========== =========== ===========
Less: par value 43,150
-----------
Paid in capital $ 21,052
===========
See accompanying summary of accounting policies
and notes to financial statements.
F-4
TALLY-HO VENTURES, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the Period from November 21, 2002 (Inception)
Through December 31, 2002
CASH FLOWS FROM OPERATING ACTIVITIES
Net deficit accumulated during the
development stage $ (64,276)
Adjustments to reconcile net deficit
to cash used in operating activities:
Stock issued to founder 41,050
Stock issued for services 23,150
Imputed interest on notes payable to shareholders 2
----------
NET CASH USED IN OPERATING ACTIVITIES (74)
----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable to shareholders 2,524
----------
NET CHANGE IN CASH 2,450
Cash balance, beginning
----------
Cash balance, ending $ 2,450
==========
Supplemental Disclosures:
Interest paid in cash $ 0
Income taxes paid in cash 0
See accompanying summary of accounting policies
and notes to financial statements.
F-5
TALLY-HO VENTURES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business. Tally-Ho Ventures, Inc., was incorporated in Delaware on
November 21, 2002 to produce films and television programs.
Fiscal Year End. Tally-Ho's fiscal year ends on December 31.
Use of Estimates. In preparing financial statements, management makes estimates
and assumptions that affect the reported amounts of assets and liabilities in
the balance sheet and revenue and expenses in the income statement. Actual
results could differ from those estimates.
Cash and Cash Equivalents. For purposes of the statement of cash flows, Tally-Ho
considers all highly liquid investments purchased with an original maturity of
three months or less to be cash equivalents. There were no cash equivalents as
of December 31, 2002.
Revenue recognition. Tally-Ho has no revenue recognition policy because it has
no revenues.
Income taxes. Tally-Ho recognizes deferred tax assets and liabilities based on
differences between the financial reporting and tax bases of assets and
liabilities using the enacted tax rates and laws that are expected to be in
effect when the differences are expected to be recovered. Tally-Ho provides a
valuation allowance for deferred tax assets for which it does not consider
realization of such assets to be more likely than not.
Recently issued accounting pronouncements. Tally-Ho does not expect the adoption
of recently issued accounting pronouncements to have a significant impact on
their results of operations, financial position or cash flow.
NOTE 2 - NOTES PAYABLE TO SHAREHOLDERS
In November & December 2002, the majority shareholders loaned Tally-Ho $2,524.
The notes mature 12 months from issuance, bear no interest and have no
collateral. Interest expense is being imputed at 8 percent and is recorded as
paid in capital.
NOTE 3 - COMMON STOCK
In November 2002, Tally-Ho's founder was issued 41,050,000 shares of common
stock valued at par or $41,050.
In November 2002, Tally-Ho issued 2,100,000 shares of common stock valued at par
or $2,100 for services rendered.
In November 2002, the founder gifted 21,050,000 shares of common stock to five
ndividuals for services performed for Tally-Ho. The shares were accounted for
as canceled and reissued by Tally-Ho for services. The shares were valued at
par or $21,050 and have been expensed.
F-6
TALLY-HO VENTURES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - INCOME TAXES
Deferred tax assets $ 10
Less: valuation allowance (10)
-------
Net deferred taxes $ 0
=======
Tally-Ho has a net operating loss of approximately $75 at December 31, 2002
which expires in 2022.
NOTE 5 - COMMITMETS
Tally-Ho's principal office is in the home of Tally-Ho's president pursuant to
an oral agreement on a rent-free month-to-month basis.
F-7
TALLY-HO VENTURES, INC.
(A Development Stage Company)
BALANCE SHEET
As of March 31, 2003
(Unaudited)
ASSETS
Current Assets
Cash $ 230
Loans to a related party 1,300
--------
$ 1,530
========
LIABILITIES AND STOCKHOLDERS' DEFICIT
LIABILITIES
Current Liabilities
Notes payable to shareholders $ 2,676
--------
STOCKHOLDERS' DEFICIT
Common stock, $.001 par, 75,000,000 shares
authorized, 43,150,000 shares issued and outstanding 43,150
Additional paid in capital 21,104
Deficit accumulated during the development stage (65,400)
--------
Total Stockholders' Deficit (1,146)
--------
Total Liabilities & Stockholders' Deficit $ 1,530
========
F-8
TALLY-HO VENTURES, INC.
(A Development Stage Company)
STATEMENTS OF EXPENSES
For the Three Months ended March 31, 2003 and the Period
from November 21, 2002 (Inception) Through March 31, 2003
(Unaudited)
3 Months Inception
Ended Through
March 31, March 31,
2003 2003
--------- ---------
Administrative expenses
- paid in cash $ 1,072 $ 1,146
- paid in stock 64,200
- imputed interest 52 54
--------- ---------
Net loss $ (1,124) $ (65,400)
========= =========
Basic and diluted loss per
common share $ (.00)
Weighted average common
shares outstanding 43,150,000
F-9
TALLY-HO VENTURES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
For the Three Months ended March 31, 2003 and the Period
from November 21, 2002 (Inception) Through March 31, 2003
(Unaudited)
3 Months Inception
Ended Through
March 31, March 31,
2003 2003
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net deficit accumulated during the
development stage $ (1,124) $ (65,400)
Adjustments to reconcile net loss
to cash used in operating activities:
Stock issued to founders 41,050
Stock issued for services 23,150
Imputed interest on notes payable
to shareholders 52 54
--------- ---------
NET CASH USED IN OPERATING ACTIVITIES (1,072) (1,146)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds of loan to related party (1,300) (1,300)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable to shareholders 152 2,676
--------- ---------
NET CHANGE IN CASH (2,220) 230
Cash balance, beginning 2,450
--------- ---------
Cash balance, ending $ 230 $ 230
========= =========
F-10
TALLY-HO VENTURES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of Tally-Ho Ventures,
Inc. ("Tally-Ho") have been prepared in accordance with accounting principles
generally accepted in the United States of America and the rules of the
Securities and Exchange Commission ("SEC"), and should be read in conjunction
with the audited financial statements and notes thereto contained in Tally-Ho's
Registration Statement filed with the SEC on Form SB-2. In the opinion of
management, all adjustments, consisting of normal recurring adjustments,
necessary for a fair presentation of financial position and the results of
operations for the interim periods presented have been reflected herein. The
results of operations for interim periods are not necessarily indicative of the
results to be expected for the full year. Notes to the financial statements
which would substantially duplicate the disclosures contained in the audited
financial statements for fiscal year 2002 as reported in the SB-2 have been
omitted.
NOTE 2 - LOANS FROM SHAREHOLDERS
In March 2003, Tally-Ho loaned $1,300 to a company controlled by a Tally-Ho
majority shareholder. The loan is short-term, bears no interest, and has no
collateral. The $1,300 was paid back to Tally-Ho in early April 2003.
F-11
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers.
There are no charter provisions, by-laws, contracts or other arrangements that
insures or indemnifies a controlling person, director or officer of the Company
which affects his or her liability in their capacity as controlling person,
director or officer.
However, Section 145 of the Delaware General Corporation law makes provision for
the indemnification of officers and directors under certain circumstances from
liabilities, including reimbursement for expenses incurred, arising under the
Securities Act. Section 145 of the Delaware General Corporation law empowers a
corporation to indemnify its directors and officers and to purchase insurance
with respect to liability arising out of their capacity or status as directors
and officers, provided that this provision shall not eliminate or limit the
liability of a director:
- for any breach of the director's duty of loyalty to the corporation
or its stockholders;
- for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
- arising under Section 174 of the Delaware General Corporation law;
or
- for any transaction from which the director derived an improper
personal benefit.
The Delaware General Corporation law provides further that the indemnification
permitted thereunder shall not be deemed exclusive of any other rights to which
the directors and officers may be entitled under the corporation's bylaws, any
agreement, a vote of stockholders or otherwise.
Item 25. Other Expenses of Issuance and Distribution.
The following is an itemized statement of all expenses of the offering:
SEC Registration Fee: 20
EDGARizing Fees: 500*
State Blue Sky Registration Fees: 275*
Transfer Agent Fees and Certificate Printing: 600*
Copying and Printing Prospectus: 250*
Mailing and Couriering Prospectus: 1,500*
Accounting: 2,000*
----------
Total: 5,145*
* estimate
Item 26. Recent Sales of Unregistered Securities.
On November 21, 2002, we sold 100,000 shares of our Common Stock to Valerie
Hanna, in exchange for $100 worth of legal services rendered, at a price of
$0.001 per share. The section of the Securities Act under which we claim
exemption from registration is Section 4(2). The facts we relied upon to make
the exemption available include the fact that the shares were issued only to one
person and not as part of any public offering, but instead simply as exchange
for legal services rendered.
On November 21, 2002, we sold 41,050,000 shares of our Common Stock to Tal
Kapelner and/or assigns, in exchange for the business plan for Tally-Ho
Ventures, Inc. worth $41,050 (see Financial Statements), at a price of $0.001
per share. The section of the Securities Act under which we claim exemption from
registration is Section 4(2). The facts we relied upon to make the exemption
available include the fact that the shares were issued only to one person and
not as part of any public offering, but instead simply as exchange for business
plan provided.
Later on November 21, 2002, Tal Kapelner instructed the Company's transfer agent
to assign 20,000,000 of his 41,050,000 shares to himself, 20,000,000 of his
shares to Cheney Shapiro, and 1,000,000 of his shares to Ariella Kapelner as
gifts made on the Company's behalf to the members of management. Tal Kapelner
instructed the transfer agent to issue the remaining 50,000 shares to two
individuals who are not part of the Company - Anita M. Rodgers and Anne S. Rody
- - which were gifts made on the Company's behalf.
28
On November 21, 2002, we sold 2,000,000 shares of our Common Stock to FMCOCO,
Inc., a Colorado corporation, in exchange for $2,000 worth of business
consulting services rendered, at a price of $0.001 per share. The section of the
Securities Act under which we claim exemption from registration is Section 4(2).
The facts we relied upon to make the exemption available include the fact that
the shares were issued only to one entity and not as part of any public
offering, but instead simply as exchange for business consulting services
rendered.
Item 27. Exhibits.
Index of Exhibits
Certificate of Incorporation page EX-1
By-laws page EX-2
Instruments defining the rights of holders,
incl. indentures (see By-laws exhibit)
Opinion re: legality page EX-8
Web design and maintenance contract page EX-9
Experimental Film Agreement with the Screen Actors Guild page EX-10
Consent of Independent Certified Public Accountants page EX-19
Consent of Counsel page EX-20
29
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of
Glendale, State of California on April 10, 2003
TALLY-HO VENTURES, INC.
________________________________________________________________________________
By: /s/ Tal L. Kapelner President
________________________________________________________________________________
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated:
/s/ Tal L. Kapelner
________________________________________________________________________________
President and Chairman of the Board of Directors
________________________________________________________________________________
April 10, 2003
________________________________________________________________________________
/s/ Cheney Shapiro
________________________________________________________________________________
Vice-President and Director
________________________________________________________________________________
April 10, 2003
________________________________________________________________________________
/s/ Ariella Kapelner
________________________________________________________________________________
Treasurer
________________________________________________________________________________
April 10, 2003
________________________________________________________________________________
