UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
InTake Communications, Inc.
---------------------------
(Exact name of registrant as specified in its charter)
Florida
-------
(State or other jurisdiction of incorporation or organization)
7372
----
(Primary Standard Industrial Classification Code Number)
27-1551007
----------
(I.R.S. Employer Identification Number)
Ron Warren
4655 Gran River Glen, Duluth GA 30096
678-516-5910
---------------------------------------
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
As soon as practicable after the effective date of this registration statement
------------------------------------------------------------------------------
(Approximate date of commencement of proposed sale to the public)
This is the initial public offering of the Company's common stock.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box: [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting Company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting Company" in Rule 12b-2 of the Exchange Act. (Check one)
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting Company [X]
CALCULATION OF REGISTRATION FEE
Title of Each Proposed Proposed
Class of Amount Maximum Maximum Amount of
Securities to to be Offering Price Aggregate Registration
be Registered Registered Per Unit(1) Offering Price Fee(2)
- ------------- ---------- -------------- -------------- ------------
Common Stock
by Company 3,000,000 $0.01 $30,000 $1.57
(1) The offering price has been arbitrarily determined by the Company and bears
no relationship to assets, earnings, or any other valuation criteria. No
assurance can be given that the shares offered hereby will have a market value
or that they may be sold at this, or at any price.
(2) Estimated solely for the purpose of calculating the registration fee based
on Rule 457 (o).
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
InTake Communications, Inc.
3,000,000 SHARES OF COMMON STOCK
This registration statement constitutes the initial public offering of InTake
Communications' common stock. InTake Communications is registering 3,000,000
shares of common stock at an offering price of $0.01 per share for a total
amount of $30,000. The Company will sell the securities in $500 increments.
There are no underwritings or broker dealers involved with the offering.
The Company's CEO, Ron Warren will be responsible to market and sell these
securities. The Company will offer the securities on a best efforts basis and
there will be no minimum amount required to close the transaction. If all the
shares are not sold, there is the possibility that the amount raised may be
minimal and might not even cover the costs of the offering which the Company
estimates at $5,000. The offering price of $0.01 per share may not reflect the
market price of the shares after the offering.
The proceeds from the sale of the securities will be placed directly into the
Company's account and there will not be an escrow account. All proceeds from the
sale of the securities are non-refundable, except as may be required by
applicable laws. The Company will pay all expenses incurred in this offering.
There has been no public trading market for the common stock of InTake
Communications.
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE SHARES ONLY
IF YOU CAN AFFORD A COMPLETE LOSS. SEE "RISK FACTORS" BEGINNING ON PAGE 7.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of the prospectus. Any representation to the contrary is a
criminal offense.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
The date of this prospectus is _______________, 2010
TABLE OF CONTENTS
Page No.
--------
Part I
- ------
SUMMARY OF OUR OFFERING................................................. 3
SUMMARY OF FINANCIAL INFORMATION........................................ 5
DESCRIPTION OF PROPERTY................................................. 5
RISK FACTORS............................................................ 5
USE OF PROCEEDS......................................................... 23
DETERMINATION OF OFFERING PRICE......................................... 23
DILUTION OF THE PRICE YOU PAY FOR YOUR SHARES........................... 24
THE OFFERING BY THE COMPANY............................................. 24
PLAN OF DISTRIBUTION.................................................... 25
LEGAL PROCEEDINGS....................................................... 26
BUSINESS................................................................ 26
MANAGEMENT.............................................................. 36
SALES AND MARKETING..................................................... 36
COMPETITION............................................................. 36
STAFFING................................................................ 36
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION............... 37
LIMITED OPERATING HISTORY; NEED FOR ADDITIONAL CAPITAL.................. 37
CODE OF BUSINESS CONDUCT AND ETHICS..................................... 41
BACKGROUND OF OFFICERS AND DIRECTORS.................................... 42
EXECUTIVE COMPENSATION.................................................. 42
PRINCIPAL STOCKHOLDERS.................................................. 44
DESCRIPTION OF SECURITIES............................................... 45
REPORTING............................................................... 46
STOCK TRANSFER AGENT.................................................... 46
STOCK OPTION PLAN....................................................... 46
LITIGATION.............................................................. 46
LEGAL MATTERS........................................................... 46
EXPERTS................................................................. 46
FINANCIAL STATEMENTS.................................................... F-1
Part II
- -------
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION ............................ II-1
RECENT SALES OF UNREGISTERED SECURITIES ................................ II-1
EXHIBITS ............................................................... II-1
UNDERTAKINGS ........................................................... II-2
SIGNATURES ............................................................. II-4
DEALER PROSPECTUS DELIVERY OBLIGATION
Until _______________, (90 days after the effective date of this prospectus) all
dealers that effect transactions in these securities, whether or not
participating in this offering, may be required to deliver a prospectus. This is
in addition to the dealers' obligation to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or subscriptions.
2
SUMMARY OF OUR OFFERING
InTake Communications, Inc. has 9,000,000 shares of common stock issued and
outstanding and is registering an additional 3,000,000 shares of common stock
for offering to the public. The company may endeavor to sell all 3,000,000
shares of common stock after this registration becomes effective. The price at
which the company offers these shares is fixed at $0.01 per share for the
duration of the offering. There is no arrangement to address the possible effect
of the offering on the price of the stock. InTake Communications will receive
all proceeds from the sale of the common stock.
3,000,000 shares of common stock are offered by the company.
Offering price per share by the The price, if and when the company sells
company the shares of common stock is set at
$0.01.
Number of shares outstanding before 9,000,000 common shares are currently
the offering of common shares issued and outstanding.
Number of shares outstanding after 12,000,000 common shares will be issued
the offering of common shares and outstanding after this offering is
completed if all shares are sold. If the
offering is not fully subscribed, less
than 12,000,000 will be outstanding
after the offering. For example, if the
Company sells 50% of the total offering,
the Company will sell 1.5 million shares
and there will be 10.5 million shares
outstanding after the offering under
these circumstances.
The minimum number of shares to be None.
sold in this offering
Market for the common shares There is no public market for the common
shares. The shares are being offered at
$0.01 per share. InTake Communications
may not be able to meet the requirement
for a public listing or quotation of its
common stock. Further, even if InTake
Communications, Inc. common stock is
quoted or granted listing, a market for
the common shares may not develop. If a
market develops, the price of the shares
in the market may not be greater than or
equal to the price in this offering.
Use of proceeds The Company intends to use the proceeds
this offering to develop and complete
the business and marketing plan, and for
other general corporate and working
capital purposes. The expenses of this
offering, including the preparation of
this prospectus and the filing of this
registration statement, estimated at
3
$5,000 are being paid for by InTake
Communications. The net proceeds will be
the gross proceeds from the offering
less the expenses of $5,000. Therefore,
if the all shares are sold in the
offering, the net proceeds will be
$25,000 ($30,000 Gross proceeds - $5,000
expenses). If all shares are not sold,
the gross proceeds will be less and may
not cover the expenses of the offering.
For example, if the Company sells 50% of
the securities, the Company will sell
1.5 million shares and there will be
10.5 million shares outstanding after
the offering under these circumstances.
Termination of the offering The offering will conclude when all
3,000,000 shares of common stock have
been sold, or 90 days after this
registration statement becomes effective
with the Securities and Exchange
Commission. InTake Communications, Inc.
may at its discretion extend the
offering at its discretion for an
additional 90 days.
Terms of the offering The Company's president and sole
director will sell the common stock upon
effectiveness of this registration
statement.
You should rely only upon the information contained in this prospectus. InTake
Communications has not authorized anyone to provide you with information
different from that which is contained in this prospectus. InTake Communications
is offering to sell shares of common stock and seeking offers to buy shares of
common stock only in jurisdictions where offers and sales are permitted. The
information contained in this prospectus is accurate only as of the date of this
prospectus, regardless of the time of delivery of this prospectus, or of any
sale of the common stock.
This summary provides an overview of selected information contained in this
prospectus. It does not contain all the information that you should consider
before making a decision to purchase the shares offered by InTake
Communications. You should very carefully and thoroughly read the more detailed
information in this prospectus and review our financial statements.
SUMMARY INFORMATION ABOUT INTAKE COMMUNICATIONS
InTake Communications (the "Company") is in business to provide software to
companies to help them market and sell their music and entertainment content to
consumers. The music and entertainment content is audio and video clips of
concerts, music, videos, and artist interviews. Based on the customer request,
the software will extract the music and entertainment content from the music and
entertainment company's library and stream that content to the customer. This
content is referred to as "digital assets". The customer can request the content
from any internet device such as a computer, laptop or mobile device.
4
InTake Communications is primarily focusing the company's business model in the
music and entertainment marketplace for growth in mobile devices, PCs the
Internet, and digital storefront like Websites. The Company has identified the
product requirements; however the product development has not started. At this
time, the Company estimates a 12-15 month timeframe to complete the first
version of the software. Today, there is no prototype and until we create our
first version of the software, the Company will not be able to market the
software or generate any revenues. See BUSINESS Section on page 21 for more
details.
Our business and registered office is located at 4655 Gran River Glen., Duluth
GA 30096. Our contact number is 678-516-5910.
As of December 31, 2009, InTake Communications, had raised $6,000 through the
sale of its common stock and has a $3,000 in a subscription receivable. There is
$6,000 of cash on hand in the corporate bank account. The Company currently has
liabilities of $0. The Company anticipates incurring costs associated with this
offering totaling approximately $5,000. As of the date of this prospectus, we
have not generated any revenue from our business operations. The following
financial information summarizes the more complete historical financial
information found in the audited financial statements of the Company filed with
this prospectus.
SUMMARY OF FINANCIAL INFORMATION
The following summary financial information for the period stated summarizes
certain information from our financial statements included elsewhere in this
prospectus. You should read this information in conjunction with Management's
Plan of Operations, the financial statements and the related notes thereto
included elsewhere in this prospectus.
BALANCE SHEET AS OF DECEMBER 31, 2009
------------- --------------------
Total Assets ........................... $ 6,000
Total Liabilities ...................... $ 3,579
Shareholder's Equity ................... $ 2,421
OPERATING DATA DECEMBER 24, 2009 THROUGH DECEMBER 31, 2009
-------------- -------------------------------------------
Revenue ................................ $ 0.00
Net Loss ............................... $ 3,579
Net Loss Per Share ..................... $ 0.00
As indicated in the financial statements accompanying this prospectus, InTake
communications has had no revenue to date and has incurred only losses since its
inception. The Company has had no operations and has been issued a "going
concern" opinion from their auditors, based upon the Company's reliance upon the
sale of our common stock as the sole source of funds for our future operations.
DESCRIPTION OF PROPERTY
The company does not own any real estate or other properties. The company's
office is located at 4655 Gran River Glen, Duluth GA 30096. The business office
is located at the office of Ron Warren, the CEO, of the company at no charge.
RISK FACTORS
Please consider the following risk factors and other information in this
prospectus relating to our business and prospects before deciding to invest in
our common stock.
5
This offering and any investment in our common stock involves a high degree of
risk. You should carefully consider the risks described below and all of the
information contained in this prospectus before deciding whether to purchase our
common stock. If any of the following risks actually occur, our business,
financial condition and results of operations could be harmed.
The Company considers the following to be the material risks for an investor
regarding this offering. InTake Communications should be viewed as a high-risk
investment and speculative in nature. An investment in our common stock may
result in a complete loss of the invested amount. Please consider the following
risk factors before deciding to invest in our common stock.
AUDITOR'S GOING CONCERN
- -----------------------
THERE IS SUBSTANTIAL UNCERTAINTY ABOUT THE ABILITY OF INTAKE COMMUNICATIONS,
INC. TO CONTINUE ITS OPERATIONS AS A GOING CONCERN
In their audit report for the period ending December 31, 2009 and dated January
14, 2010; our auditors have expressed an opinion that substantial doubt exists
as to whether we can continue as an ongoing business. Because our officers may
be unwilling or unable to loan or advance any additional capital to InTake
Communications, Inc. we believe that if we do not raise additional capital
within 12 months of the effective date of this registration statement, we may be
required to suspend or cease the implementation of our business plans. Due to
the fact that there is no minimum investment and no refunds on sold shares, you
may be investing in a Company that will not have the funds necessary to develop
its business strategies. As such we may have to cease operations and you could
lose your entire investment. See the December 31, 2009 Audited Financial
Statements - Audit Report". Because the Company has been issued an opinion by
its auditors that substantial doubt exists as to whether it can continue as a
going concern it may be more difficult to attract investors.
RISKS RELATED TO OUR FINANCIAL CONDITION
- ----------------------------------------
SINCE INTAKE COMMUNICATIONS ANTICIPATES OPERATING EXPENSES WILL INCREASE PRIOR
TO EARNING REVENUE, IT MAY NEVER ACHIEVE PROFITABILITY AND IF THE COMPANY CAN
NOT ACHIEVE PROFITABILITY OR RAISE ADDITIONAL CAPITAL, IT MAY FAIL RESULTING IN
A COMPLETE LOSS OF YOUR INVESTMENT
The Company anticipates an increase in its operating expenses, without realizing
any revenues from the sale of its products. Within the next 12 months, the
Company will have costs of at least $175,000 related to (i) the development of
products, (ii) administrative expenses and (iii) the completion of the business
plan.
There is no history upon which to base any assumption as to the likelihood that
the Company will prove successful. We cannot provide investors with any
assurance that our products will attract customers; generate any operating
revenue or ever achieve profitable operations. If we are unable to address these
risks, there is a high probability that our business can fail, which will result
in the loss of your entire investment.
OUR BUSINESS WILL FAIL IF WE DO NOT OBTAIN ADEQUATE FINANCING, RESULTING IN THE
COMPLETE LOSS OF YOUR INVESTMENT
6
If we are not successful in earning revenue once we have started our sale
activities, we may require additional financing to sustain our business
operations. Over the next 12 months, we anticipate needing at least $175,000 to
complete the business plan, development of products and other operating
expenses. Currently, we do not have any arrangements for financing and can
provide no assurances to investors that we will be able to obtain any when
required. Obtaining additional financing would be subject to a number of
factors, including the Company's sales results. These factors may have an effect
on the timing, amount, terms or conditions of additional financing and make such
additional financing unavailable to us. See "Description of Business."
No assurance can be given that the Company will obtain access to capital markets
in the future or that adequate financing to satisfy the cash requirements of
implementing our business strategies will be available on acceptable terms. The
inability of the Company to gain access to capital markets or obtain acceptable
financing could have a material adverse effect upon the results of its
operations and its financial conditions.
RISKS RELATED TO THIS OFFERING
- ------------------------------
BECAUSE THERE IS NO PUBLIC TRADING MARKET FOR OUR COMMON STOCK, YOU MAY NOT BE
ABLE TO RESELL YOUR STOCK AND NOT BE ABLE TO TURN YOUR INVESTMENT INTO CASH
There is currently no public trading market for our common stock. Therefore,
there is no central place, such as a stock exchange or electronic trading
system, to resell your shares. If you do want to resell your shares, you will
have to locate a buyer and negotiate your own sale. The offering price and other
terms and conditions relative to the Company's shares have been arbitrarily
determined by the Company and do not bear any relationship to assets, earnings,
book value or any other objective criteria of value. Additionally, as the
Company was formed recently and has only a limited operating history and no
earnings, the price of the offered shares is not based on its past earnings and
no investment banker, appraiser or other independent third party has been
consulted concerning the offering price for the shares or the fairness of the
offering price used for the shares.
INVESTING IN THE COMPANY IS HIGHLY SPECULATIVE AND COULD RESULT IN THE ENTIRE
LOSS OF YOUR INVESTMENT
Purchasing the offered shares is highly speculative and involves significant
risk. The offered shares should not be purchased by any person who cannot afford
to lose their entire investment. The business objectives of the Company are also
speculative, and it is possible that we would be unable to accomplish them. The
Company's shareholders may be unable to realize a substantial or any return on
their purchase of the offered shares and may lose their entire investment. For
this reason, each prospective purchaser of the offered shares should read this
prospectus and all of its exhibits carefully and consult with their attorney,
business and/or investment advisor.
INVESTING IN OUR COMPANY MAY RESULT IN AN IMMEDIATE LOSS BECAUSE BUYERS WILL PAY
MORE FOR OUR COMMON STOCK THAN THE PRO RATA PORTION OF THE ASSETS ARE WORTH
The Company has only been recently formed and has only a limited operating
history and no earnings, therefore, the price of the offered shares is not based
on any data. The offering price and other terms and conditions regarding the
Company's shares have been arbitrarily determined and do not bear any
7
relationship to assets, earnings, book value or any other objective criteria of
value. No investment banker, appraiser or other independent third party has been
consulted concerning the offering price for the shares or the fairness of the
offering price used for the shares.
The arbitrary offering price of $0.01 per common share as determined herein is
substantially higher than the net tangible book value per share of the Company's
common stock. InTake Communications' assets do not substantiate a share price of
$0.01. This premium in share price applies to the terms of this offering and
does not attempt to reflect any forward looking share price subsequent to the
Company obtaining a listing on any exchange, or becoming quoted on the OTC
Bulletin Board.
BECAUSE THE COMPANY HAS 250,000,000 AUTHORIZED SHARES, MANAGEMENT COULD ISSUE
ADDITIONAL SHARES, DILUTING THE CURRENT SHAREHOLDERS' EQUITY
The Company has 250,000,000 authorized shares, of which only 9,000,000 are
currently issued and outstanding and a maximum amount of 12,000,000 will be
issued and outstanding after this offering terminates. The Company's management
could, without the consent of the existing shareholders, issue substantially
more shares, causing a large dilution in the equity position of the Company's
current shareholders. Additionally, large share issuances would generally have a
negative impact on the Company's share price. It is possible that, due to
additional share issuance, you could lose a substantial amount, or all, of your
investment.
WE DO NOT HAVE AN ESCROW OR TRUST ACCOUNT WITH SUBSCRIPTIONS FOR INVESTORS, IF
WE FILE FOR OR ARE FORCED INTO BANKRUPTCY PROTECTION, THEY WILL LOSE THE ENTIRE
INVESTMENT
Invested funds for this offering will not be placed in an escrow or trust
account and if we file for bankruptcy protection or a petition for involuntary
bankruptcy is filed by creditors against us, your funds will become part of the
bankruptcy estate and administered according to the bankruptcy laws. As such,
your funds will be used to pay creditors, and if there are not sufficient funds
to pay all creditors, you will lose your investment.
THE COMPANY DOES NOT ANTICIPATE PAYING DIVIDENDS IN THE FORESEEABLE FUTURE, SO
THERE WILL BE FEWER WAYS IN WHICH YOU CAN MAKE A GAIN ON ANY INVESTMENT IN THIS
COMPANY
We do not anticipate paying dividends on our common stock in the foreseeable
future, but plan rather to retain earnings, if any, for the operation growth and
expansion of our business. Therefore, the only way to liquidate your investment
is to sell your stock.
AS WE MAY BE UNABLE TO CREATE OR SUSTAIN A MARKET FOR OUR SHARES, THEY MAY BE
EXTREMELY ILLIQUID AND YOU MAY NOT BE ABLE TO LIQUIDATE YOUR INVESTMENT
If no market develops, the holders of our common stock may find it difficult or
impossible to sell their shares. Further, even if a market develops, our common
stock will be subject to fluctuations and volatility and the Company cannot
apply directly to be quoted on the NASD Over-The-Counter Bulletin Board (OTC).
Additionally, the stock may be listed or traded only to the extent that there is
interest by broker-dealers in acting as a market maker in the Company's stock.
Despite the Company's efforts, it may not be able to convince any broker/dealers
to act as market-makers and make quotations on the OTC Bulletin Board. The
Company may consider pursuing a listing on the OTCBB after this registration
becomes effective and the Company has completed its offering.
8
IN THE EVENT THAT THE COMPANY'S SHARES ARE TRADED, THEY MAY TRADE UNDER $5.00
PER SHARE AND THUS WILL BE A PENNY STOCK. TRADING IN PENNY STOCKS HAS MANY
RESTRICTIONS AND THESE RESTRICTIONS COULD ADVERSELY AFFECT THE PRICE AND
LIQUIDITY OF THE COMPANY'S SHARES CREATING A POTENTIAL LOSS OF INVESTMENT
In the event that our shares are traded, and our stock trades below $5.00 per
share, our stock would be known as a "penny stock", which is subject to various
regulations involving disclosures to be given to you prior to the purchase of
any penny stock. The U.S. Securities and Exchange Commission (the "SEC") has
adopted regulations which generally define a "penny stock" to be any equity
security that has a market price of less than $5.00 per share, subject to
certain exceptions. Depending on market fluctuations, our common stock could be
considered to be a "penny stock". A penny stock is subject to rules that impose
additional sales practice requirements on broker/dealers who sell these
securities to persons other than established customers and accredited investors.
For transactions covered by these rules, the broker/dealer must make a special
suitability determination for the purchase of these securities. In addition, he
must receive the purchaser's written consent to the transaction prior to the
purchase. He must also provide certain written disclosures to the purchaser.
Consequently, the "penny stock" rules may restrict the ability of broker/dealers
to sell our securities, and may negatively affect the ability of holders of
shares of our common stock to resell them. These disclosures require you to
acknowledge that you understand the risks associated with buying penny stocks
and that you can absorb the loss of your entire investment. Penny stocks are low
priced securities that do not have a very high trading volume. Consequently, the
price of the stock is often volatile and you may not be able to buy or sell the
stock when you want to.
SINCE OUR SOLE OFFICER AND DIRECTOR CURRENTLY OWNS 100% OF THE OUTSTANDING
COMMON STOCK, INVESTORS MAY FEEL THAT HIS DECISIONS ARE CONTRARY TO THEIR
INTERESTS
The Company's sole officer, Ron Warren, and director owns 100% of the
outstanding shares and will own no less than 75% after this offering is
completed. For example, if 50% of the offering is sold, Mr. Warren will retain
87.5% of the shares outstanding. As a result, he will maintain control of the
Company and be able to choose all of our directors. His interests may differ
from those of other stockholders. Factors that could cause his interests to
differ from the other stockholders include the impact of corporate transactions
on the timing of business operations and his ability to continue to manage the
business given the amount of time he is able to devote to the Company.
All decisions regarding the management of the Company's affairs will be made
exclusively by him. Purchasers of the offered shares may not participate in the
management of the Company and, therefore, are dependent upon his management
abilities. The only assurance that the shareholders of the Company, including
purchasers of the offered shares, have that the Company's sole officer and
director will not abuse his discretion in executing the Company's business
affairs, is his fiduciary obligation and business integrity. Such discretionary
powers include, but are not limited to, decisions regarding all aspects of
business operations, corporate transactions and financing. Accordingly, no
person should purchase the offered shares unless willing to entrust all aspects
of management to the sole officer and director, or his successors. Potential
purchasers of the offered shares must carefully evaluate the personal experience
and business performance of the Company's management.
9
RISKS RELATED TO INVESTING IN OUR COMPANY
- -----------------------------------------
OUR LACK OF AN OPERATING HISTORY GIVES NO ASSURANCE THAT OUR FUTURE OPERATIONS
WILL RESULT IN PROFITABLE REVENUES, WHICH COULD RESULT IN THE SUSPENSION OR
TERMINATION OF OUR OPERATIONS AND INVESTORS MAY LOOSE THEIR ENTIRE INVESTMENT
We were incorporated on December 24, 2009 and we have not realized any revenues
to date. We are an early stage company in a very competitive market. We have
very little operating history upon which an evaluation of our future success or
failure can be made. Our ability to achieve and maintain profitability and
positive cash flow is dependent upon the completion of this offering and our
ability to generate revenues through sales of our products.
Based upon current plans, we expect to incur operating losses in future periods
because we will be incurring expenses and not generating revenues. We cannot
guarantee that we will be successful in generating revenues in the future.
Failure to generate revenues will cause us to go out of business.
OUR OPERATING RESULTS MAY PROVE UNPREDICTABLE WHICH MAY IMPACT THE COMPANY AND
THE VALUE OF THE INVESTMENT
Our operating results are likely to fluctuate significantly in the future due to
a variety of factors, many of which we have no control over. Currently, we don't
have a product or prototype. Factors that may cause our operating results to
fluctuate significantly include: our inability to generate enough working
capital from future equity sales; and after we create a commercial product, the
factors include: the level of commercial acceptance by the music and
entertainment market of our products; fluctuations in the demand for our product
and capital expenditures relating to expansion of our future business,
operations and infrastructure and general economic conditions. If realized, any
of these risks could have a materially adverse effect on our business, financial
condition and operating results.
BECAUSE WE ARE SMALL AND DO NOT HAVE MUCH CAPITAL, WE MUST LIMIT OUR MARKETING
ACTIVITIES. AS A RESULT, OUR SALES MAY NOT BE ENOUGH TO OPERATE PROFITABLY. IF
WE DO NOT MAKE A PROFIT, WE MAY HAVE TO SUSPEND OR CEASE OPERATIONS.
Due to the fact we are small and do not have much capital, we must limit our
marketing activities to potential customers having the likelihood of purchasing
our products. We intend to generate revenue through the sale of our products.
Because we will be limiting the scope of our marketing activities, we may not be
able to generate enough sales to operate profitably. If we cannot operate
profitably, we may have to suspend or cease operations.
THE COMPANY'S SOLE OFFICER AND DIRECTOR MAY NOT BE IN A POSITION TO DEVOTE A
MAJORITY OF HIS TIME TO THE COMPANY, WHICH MAY RESULT IN PERIODIC INTERRUPTIONS
AND EVEN BUSINESS FAILURE.
Mr. Warren, our sole officer and director, has other business interests and
currently devotes approximately 20 to 25 hours per week to our operations. Our
operations may be sporadic and occur at times which are not convenient to Mr.
Warren, which may result in periodic interruptions or suspensions of our
business plan. If the demands of the Company's business require the full
business time of our sole officer and director, he is prepared to adjust his
timetable to devote more time to the Company. However, he may not be able to
devote sufficient time to the management of the business, which may result in
periodic interruptions in implementing the Company's plans in a timely manner.
Such delays could have a significant negative effect on the success of the
business.
10
KEY MANAGEMENT PERSONNEL MAY LEAVE THE COMPANY WHICH COULD ADVERSELY AFFECT THE
ABILITY OF THE COMPANY TO CONTINUE OPERATIONS. IF THE COMPANY CEASES OPERATIONS,
YOU WILL LOOSE YOUR INVESTMENT
Because the Company is entirely dependent on the efforts of its sole officer and
director, his departure or the loss of other key personnel in the future, could
have a materially adverse effect on the business. He has other outside business
activities and is devoting only approximately 20-25 hours per week to our
operations. His expertise in the music and entertainment industry as well as his
technical expertise are critical to the success of the business. The loss of
this resource would have a significant impact on our business. In addition, our
operations may be sporadic and occur at times which are not convenient to Ron
Warren, which may result in periodic interruptions or suspensions of our
business plan. If the demands of the company's business require the full time of
our executive officer, he is prepared to adjust his timetable in order to devote
more time to conducting our business operations. However, our executive officer
may be unable to devote sufficient time to the management of the company's
business, which may result in periodic interruptions in the implementation of
the company's business plans and operations. Such delays could have a
significant negative effect on the success of our business. The Company believes
that all commercially reasonable efforts have been made to minimize the risks
associated with the departure by key personnel from service. However, there is
no guarantee that replacement personnel with the specific industry and technical
expertise in the music and entertainment industry, if any, will help the Company
to operate profitably. The Company does not maintain key person life insurance
on its sole officer and director.
IF THE COMPANY IS DISSOLVED, IT IS UNLIKELY THAT THERE WILL BE SUFFICIENT ASSETS
REMAINING TO DISTRIBUTE TO THE SHAREHOLDERS RESULTING IN UP TO A COMPLETE LOSS
OF YOUR INVESTMENT.
In the event of the dissolution of the Company, the proceeds realized from the
liquidation of its assets, if any, will be used primarily to pay the claims of
the Company's creditors, if any, before there can be any distribution to the
shareholders. In that case, the ability of purchasers of the offered shares to
recover all or any portion of the purchase price for the offered shares will
depend on the amount of funds realized and the claims to be satisfied there
from.
RISKS RELATED TO THE COMPANY'S MARKET AND STRATEGY
- --------------------------------------------------
THE MUSIC AND ENTERTAINMENT DIGITAL RIGHTS MARKET IS VERY COMPETITIVE AND
OBTAINING THOSE RIGHTS EITHER DIRECTLY OR INDIRECTLY IS NECESSARY TO BROADCAST
THE MEDIA. WITHOUT THOSE RIGHTS, THE COMPANY CAN NOT BROADCAST THE MEDIA AND
WILL FAIL. IF THE COMPANY FAILS, YOU WILL LOOSE YOUR INVESTMENT
The market to obtain the digital rights for music and entertainment content is
very competitive. There are several industry leaders that obtain these exclusive
rights over a multiple year period. The Company must partner with these rights
holders to broadcast the media or obtain those rights directly from the rights
holder. If the Company cannot obtain the rights, the Company cannot broadcast
the media and without these rights, the Company will have difficulty generating
revenues.
11
MARKET FACTORS LIKE COMPETITION AND HIRING QUALIFIED RESOURCES ARE DIFFICULT TO
MANAGE. IF WE CAN NOT MANAGE THESE MARKET FACTORS SUCCESSFULLY, WE FACE A HIGH
RISK OF BUSINESS FAILURE WHICH WOULD RESULT IN THE LOSS OF YOUR INVESTMENT.
The Company expects that its results of operations may also fluctuate
significantly in the future as a result of a variety of market factors
including, among others, the competitive nature of the music and entertainment
market, the entry of new competitors offering a similar product; the
availability of motivated and qualified personnel; the initiation, renewal or
expiration of our customer base; pricing changes by the Company or its
competitors, specific economic conditions in the financial markets. Accordingly,
our future sales and operating results are difficult to forecast.
As of the date of this prospectus, we have earned no revenue. Failure to
generate revenue will cause us to go out of business, which could result in the
complete loss of your investment.
WE MAY BE UNABLE TO GAIN ANY SIGNIFICANT MARKET ACCEPTANCE FOR OUR PRODUCTS OR
ESTABLISH A SIGNIFICANT MARKET PRESENCE. IF WE CAN NOT GAIN MARKET ACCEPTANCE,
WE WILL NOT BE ABLE TO GENERATE REVENUE AND OUR BUSINESS WILL FAIL.
The Company's growth strategy is substantially dependent upon its ability to
market its products successfully to prospective music and entertainment clients.
However, its planned services may not achieve significant acceptance. Such
acceptance, if achieved, may not be sustained for any significant period of
time. In addition, there is no guarantee that any acceptance by a client will
remain especially in the music and entertainment market. Failure of the
Company's services to achieve or sustain market acceptance could have a
materially adverse effect on our business, financial conditions and the results
of our operations.
MANAGEMENT'S ABILITY TO IMPLEMENT THE BUSINESS STRATEGY SUCCESSFULLY IS CRITICAL
TO THE BUSINESS SUCCESS. IF THE MANAGEMENT FAILS TO IMPLEMENT THE BUSINESS
STRATEGY, THE COMPANY WILL FAIL AND INVESTORS WILL LOOSE THEIR INVESTMENT
Although the Company intends to pursue a strategy of marketing its products
throughout North America, our business success depends on a number of factors.
These include: our ability to establish a significant music and entertainment
customer base and maintain favorable relationships with customers and partners
in the music and entertainment industry; obtain adequate business financing on
favorable terms in order to buy all the necessary equipment and materials;
development and maintenance of appropriate operating procedures, policies and
systems; hire, train and retain skilled employees knowledgeable in the music and
entertainment industry. The inability of the Company to manage any or all of
these factors could impair its ability to implement its business strategy
successfully, which could have a materially adverse effect on the results of its
operations and its financial condition.
INTAKE COMMUNICATIONS, INC. MAY BE UNABLE TO MANAGE ITS FUTURE GROWTH. IF THE
COMPANY CAN NOT SUCCESSFULLY MANAGE THE GROWTH, THE COMPANY MAY RUN OUT OF MONEY
AND FAIL.
Any extraordinary growth may place a significant strain on management,
financial, operating and technical resources. Failure to manage this growth
effectively could have a materially adverse effect on the Company's financial
condition or the results of its operations.
12
RISKS RELATED TO INVESTING IN OUR BUSINESS
- ------------------------------------------
THE COMPANY MAY BE UNABLE TO MAKE NECESSARY ARRANGEMENTS AT ACCEPTABLE COSTS
WHICH WILL IMPACT PROFITABILITY AND MAY CAUSE US TO CEASE OPERATIONS IF WE RUN
OUT OF CAPITAL
Because we are a small business, with limited assets, we are not in a position
to assume unanticipated costs and expenses. If we have to make changes in the
Company structure or are faced with circumstances that are beyond our ability to
afford, we may have to suspend operations or cease operations entirely which
could result in a total loss of your investment.
BECAUSE WE HAVEN'T BUILT A PROTOTYPE, OUR PRODUCTS MAY NOT WORK PROPERLY AND/OR
THE PRODUCTION COST CAN EXCEED EXPECTATIONS. IF OUR PROTOTYPE IS NOT SUCCESSFUL
AND WE DON'T RAISE ANY ADDITIONAL CAPITAL, WE WILL HAVE TO CEASE OPERATIONS
We have not built a prototype of our software yet; therefore, we don't know the
exact cost of production. In the case of a higher than expected cost of
production, we won't be able to offer our products at a reasonable price.
Furthermore, we may find problems in the development process and/or product
functionality. If we are unable to develop our products, we will have to cease
our operations, resulting in the complete loss of your investment.
GENERAL COMPETITION
The Company has identified a market opportunity for our products. The music and
entertainment market is very competitive and aggressive. Competitors may enter
this sector with superior products, services, financial resources, conditions
and/or benefits. This would infringe on our customer base, lengthen our sales
cycle, increase marketing costs, which in turn will have an adverse affect upon
our business and the results of our operations.
The mobile software industry is a highly competitive market. We will compete
with both large and small corporations. Most of these companies have greater
financial and personnel resources than we do.
COMPETITION MAY DECREASE OUR MARKET SHARE, REVENUES, AND GROSS MARGINS.
We face intense and increasing competition in the multimedia broadcast market.
If we do not compete effectively or if we experience reduced market share from
increased competition, our business will be harmed. In addition, the more
successful we are in the emerging market for multimedia broadcast services, the
more competitors are likely to emerge. We believe that the principal competitive
factors in our market include:
o service functionality, quality and performance;
o ease of use, reliability and security of services;
o establishing a significant base of customers and distribution partners;
o ability to introduce new services to the market in a timely manner;
o customer service and support; and
o pricing.
13
Although we do not currently compete against any one entity with respect to all
aspects of multimedia broadcast products and services, there are various
competitors that provide various products and services in the following
categories:
o collaboration, which provides for document and application sharing as well
as user interactivity,
o live video and streaming multimedia,
o hosted services,
o training, which provides e-learning applications, and
o on-premise software.
There are a number of companies, such as Verizon, Sprint and MobiTV, among
others, that provide outsourced digital media services. As the multimedia
broadcast market continues to develop, we expect to see increased competition
from traditional telecommunication service providers or resellers of those
services. We also face competition from the in-house encoding services,
streaming networks and content management systems and encoding services.
All of our competitors have substantially more capital, longer operating
histories, greater brand recognition, larger customer bases and significantly
greater financial, technical and marketing resources than we do. These
competitors may also engage in more extensive development of their technologies,
adopt more aggressive pricing policies and establish more comprehensive
marketing and advertising campaigns than we can. Our competitors may develop
products and service offerings that we do not offer or that are more
sophisticated or more cost effective than our own. For these and other reasons,
our competitors' products and services may achieve greater acceptance in the
marketplace than our own, limiting our ability to gain market share and customer
loyalty and to generate sufficient revenues to achieve a profitable level of
operations. Our failure to adequately address any of the above factors could
harm our business and operating results.
OUR INDUSTRY IS EXPERIENCING CONSOLIDATION THAT MAY INTENSIFY COMPETITION.
The multimedia broadcast services industries are undergoing substantial change
that has resulted in increasing consolidation and a proliferation of strategic
transactions. Many companies in these industries have been going out of business
or are being acquired by larger entities. As a result, we are increasingly
competing with larger competitors that have substantially greater resources than
we do. We expect this consolidation and strategic partnering to continue.
Acquisitions or strategic relationships could harm us in a number of ways. For
example:
o competitors could acquire or enter into relationships with companies with
which we have strategic relationships and discontinue our relationship,
resulting in the loss of distribution opportunities for our products and
services or the loss of certain enhancements or value-added features to
our products and services;
o competitors could obtain exclusive access to desirable multimedia content
and prevent that content from being available in certain formats, thus
decreasing the use of our products and services to distribute and
experience the content that audiences most desire, and hurting our ability
to attract customers;
14
o a competitor could be acquired by a party with significant resources and
experience that could increase the ability of the competitor to compete
with our products and services; and
o other companies with related interests could combine to form new,
formidable competition, which could preclude us from obtaining access to
certain markets or content, or which could dramatically change the market
for our products and services.
Any of these results could put us at a competitive disadvantage that could cause
us to lose customers, revenue and market share. They could also force us to
expend greater resources to meet the competitive threat, which could also harm
our operating results.
IF WE CANNOT PRODUCE SOFTWARE THAT MEETS PRICE AND/OR PERFORMANCE CRITERIA, THE
BUSINESS WILL FAIL.
The software market is very competitive, especially in the music and
entertainment market. Customers require specific functional and technical
requirements as well as competitive prices for the software. Each customer has
different functional and technical requirements and the Company cannot guarantee
that the software will meet each customer's requirements. If the Company cannot
develop software that meets the customer requirements and/or the software is not
competitively priced, the business will fail.
IF, AFTER DEMONSTRATING PROOF-OF-CONCEPT, WE ARE UNABLE TO ESTABLISH
RELATIONSHIPS WITH DEVELOPMENT PARTNERS AND/OR CUSTOMERS, THE BUSINESS WILL
FAIL.
Because there may be a substantial delay between the completion of this offering
and the execution of the business plan, our expenses may be increased and it may
take us longer to generate revenues. We have no way to predict when we will
begin our service. In addition, it takes time, money, and resources to build
relationships with customers and partners. If these efforts are unsuccessful or
take longer than anticipated, the Company may run out of capital and the
business will fail.
THERE IS NO MINIMUM AMOUNT REQUIRED TO BE RAISED IN THIS OFFERING, AND IF WE
CANNOT GENERATE SUFFICIENT FUNDS FROM THIS OFFERING, THE BUSINESS WILL FAIL.
There is not a minimum amount of shares that need to be sold in this Offering
for the Company to access the funds. Therefore, this Offering will be
immediately available for use by us and we don't have to wait until a minimum
number of Shares have been sold to keep the proceeds from any sales. We can't
assure you that subscriptions for the entire Offering will be obtained. We have
the right to terminate the offering of the Shares at any time, regardless of the
number of Shares we have sold since there is no minimum subscription
requirement. Our ability to meet our financial obligations, cash needs, and to
achieve our objectives, could be adversely affected if the entire offering of
Shares is not fully subscribed for.
BLUE SKY LAWS MAY LIMIT YOUR ABILITY TO SELL YOUR SHARES. IF THE STATE LAWS ARE
NOT FOLLOWED, YOU WILL NOT BE ABLE TO SELL YOUR SHARES AND YOU MAY LOOSE YOUR
INVESTMENT
State Blue Sky laws may limit resale of the Shares. The holders of our shares of
common stock and persons who desire to purchase them in any trading market that
might develop in the future should be aware that there may be significant state
law restrictions upon the ability of investors to resell our shares.
15
Accordingly, even if we are successful in having the Shares available for
trading on the OTCBB, investors should consider any secondary market for the
Company's securities to be a limited one. We intend to seek coverage and
publication of information regarding the Company in an accepted publication
which permits a "manual exemption". This manual exemption permits a security to
be distributed in a particular state without being registered if the company
issuing the security has a listing for that security in a securities manual
recognized by the state. However, it is not enough for the security to be listed
in a recognized manual. The listing entry must contain (1) the names of issuers,
officers, and directors, (2) an issuer's balance sheet, and (3) a profit and
loss statement for either the fiscal year preceding the balance sheet or for the
most recent fiscal year of operations. Furthermore, the manual exemption is a
non issuer exemption restricted to secondary trading transactions, making it
unavailable for issuers selling newly issued securities. Most of the accepted
manuals are those published in Standard and Poor's, Moody's Investor Service,
Fitch's Investment Service, and Best's Insurance Reports, and many states
expressly recognize these manuals. A smaller number of states declare that they
recognize securities manuals' but do not specify the recognized manuals. The
following states do not have any provisions and therefore do not expressly
recognize the manual exemption: Alabama, Georgia, Illinois, Kentucky, Louisiana,
Montana, South Dakota, Tennessee, Vermont and Wisconsin. If we do not execute
our business plan on schedule or within budget, our ability to generate revenue
may be diminished or delayed. Our ability to adhere to our schedule and budget
face many uncertainties.
WE DO NOT MAINTAIN PRODUCT LIABILITY COVERAGE. WE COULD BECOME LIABLE FOR
UNINSURED PRODUCT LIABILITY CLAIMS WHICH WOULD ADVERSELY AFFECT OUR ABILITY TO
CONTINUE AS A GOING CONCERN, AND COULD CAUSE OUR BUSINESS TO FAIL.
The company does not maintain any product liability insurance at this time. Once
the product is released, the Company will evaluate the need for product
liability insurance. If no product liability insurance is obtained, product
claims against the company could have a material effect and potentially cause
the business to fail.
THE COMPANY'S SOLE OFFICER AND DIRECTOR HAVE COMPLETE CONTROL OF ALL COMPANY
DECISIONS AND INVESTORS DON'T HAVE THE ABILITY TO PARTICIPATE IN THE BUSINESS.
IF MANAGEMENT MAKES POOR DECISIONS, WE MAY BE UNABLE TO CONTINUE OUR OPERATIONS
AND OUR BUSINESS MAY FAIL
All decisions regarding the management of the company's affairs will be made
exclusively by its sole officer and director. Purchasers of the offered shares
may not participate in the management of the company and, therefore, are
dependent upon the management abilities of the company's sole officer and
director. The only assurance that the shareholders of the company (including
purchasers of the offered shares) have that the company's sole officer and
director will not abuse his discretion in making decisions, with respect to its
affairs and other business decisions, is his fiduciary obligations and business
integrity. Accordingly, no person should purchase offered shares unless that
person is willing to entrust all aspects of management to the company's sole
officer and director, or his successors. Potential purchasers of the offered
shares must carefully evaluate the personal experience and business performance
of the company's management.
THE COMPANY MAY RETAIN INDEPENDENT RESOURCES OR CONSULTANTS TO HELP GROW THE
BUSINESS. IF THESE RESOURCES DO NOT PERFORM, THE COMPANY MAY HAVE TO CEASE
OPERATIONS AND YOU MAY LOOSE YOUR INVESTMENT
16
The company's management may retain independent contractors to provide services
to the company. Those independent individuals and organizations have no
fiduciary duty to the shareholders of the company and may not perform as
expected.
RISKS RELATING TO OUR BUSINESS
OUR FAILURE TO RESPOND TO RAPID CHANGES IN TECHNOLOGY AND ITS APPLICATION, AND
INTENSE COMPETITION IN THE MOBILE ENTERTAINMENT SERVICES INDUSTRY COULD MAKE OUR
SERVICES OBSOLETE
The mobile entertainment services industry is subject to rapid and substantial
technological development and product innovations. To be successful, we must
respond to new developments in technology, new applications of existing
technology and new treatment methods. Our response may be stymied if we require,
but cannot secure, rights to essential third-party intellectual property. We
compete against numerous companies offering alternative systems to ours, some of
which have greater financial, marketing and technical resources to utilize in
pursuing technological development. Our financial condition and operating
results could be adversely affected if our mobile entertainment services fail to
compete favorably with these technological developments, or if we fail to be
responsive in a timely and effective manner to competitors' new services or
price strategies.
OUR MOBILE ENTERTAINMENT SERVICES AND ANY OF OUR FUTURE SERVICES MAY FAIL TO
GAIN MARKET ACCEPTANCE, WHICH WOULD ADVERSELY AFFECT OUR COMPETITIVE POSITION.
We have not conducted any independent studies with regard to the feasibility of
our proposed business plan, present and future business prospects and capital
requirements. We have generated limited commercial distribution for our mobile
entertainment services. Our services may fail to gain market acceptance and our
infrastructure to enable such expansion is still limited. Even if adequate
financing is available and our services are ready for market, we cannot be
certain that our services will find sufficient acceptance in the marketplace to
fulfill our long and short-term goals. Failure of our services to achieve market
acceptance would have a material adverse effect on our business, financial
condition and results of operations.
AVERAGE SELLING PRICES OF OUR PRODUCTS AND SERVICES MAY DECREASE, WHICH MAY HARM
OUR GROSS MARGINS.
The average selling prices of our products and services may be lower than
expected as a result of competitive pricing pressures and promotional programs.
We expect to experience pricing pressure and anticipate that the average selling
prices and gross margins for our products may decrease over product life cycles.
We may not be successful in developing and introducing on a timely basis new
products with enhanced features and services that can be sold at higher gross
margins.
AVERAGE SELLING PRICES OF OUR PRODUCTS AND SERVICES MAY DECREASE, WHICH MAY HARM
OUR GROSS MARGINS.
The average selling prices of our products and services may be lower than
expected as a result of competitive pricing pressures and promotional programs.
We expect to experience pricing pressure and anticipate that the average selling
prices and gross margins for our products may decrease over product life cycles.
We may not be successful in developing and introducing on a timely basis new
products with enhanced features and services that can be sold at higher gross
margins.
17
WE MAY FACE THIRD-PARTY INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS AND OTHER
RELATED CLAIMS THAT COULD SEVERELY IMPACT OUR BUSINESS.
It may be alleged that we are liable to third-parties for certain legal matters
relating to video, music, software, and other content that we encode,
distribute, or make available to our customers if, among other things:
o the content or the performance of our services violates third-party
copyright, trademark, or other intellectual property rights;
o our customers violate the intellectual property rights of others by
providing content to us or by having us perform digital media services; or
o content that we encode or otherwise handle for our customers is deemed
obscene, indecent, or defamatory.
Any alleged liability could damage our business by damaging our reputation,
requiring us to incur legal costs in defense, exposing us to awards of damages
and costs and diverting management's attention, all which could have an adverse
effect on our business, results of operations and financial condition. Our
customers generally agree to hold us harmless from claims arising from their
failure to have the right to encode or distribute multimedia software and other
content given to us for that purpose. However, in some cases we may not be able
to obtain such agreements or customers may contest this responsibility or not
have sufficient resources to defend claims. In addition, we have limited
insurance coverage for claims of this nature and may not be able to cover losses
above our insurance coverage limits.
Because we host, stream and deploy audio and video content on or from our
websites for customers and provide services related to digital media content, we
face potential liability or alleged liability for negligence, infringement of
copyright, patent, or trademark rights, defamation, indecency and other claims
based on the nature and content of the materials. Claims of this nature have
been brought and sometimes successfully made against content distributors. In
addition, we could be exposed to liability with respect to the unauthorized
duplication of content or unauthorized use of other parties' proprietary
technology. Any imposition of liability that is not covered by insurance or is
in excess of insurance coverage or any alleged liability could harm our
business.
We cannot be certain that third-parties will not claim infringement by us with
respect to past, current, or future technologies. We expect that participants in
our markets will be increasingly subject to infringement claims as the number of
services and competitors in our industry segment grows. In addition, these risks
are difficult to quantify in light of the continuously evolving nature of laws
and regulations governing the Internet. Any claim relating to proprietary
rights, whether meritorious or not, could be time-consuming, result in costly
litigation, cause service upgrade delays or require us to enter into royalty or
licensing agreements, and we cannot be sure that we will have adequate insurance
coverage or that royalty or licensing agreements will be made available on terms
acceptable to us or at all.
WE CANNOT BE CERTAIN THAT WE WILL BE ABLE TO PROTECT OUR INTELLECTUAL PROPERTY,
WHICH COULD HARM OUR BUSINESS.
18
Our intellectual property is critical to our business, and we seek to protect
our intellectual property through copyrights, trademarks, patents, trade
secrets, confidentiality provisions in our customer, supplier, potential
investors, and strategic relationship agreements, nondisclosure agreements with
third-parties, and invention assignment agreements with our employees and
contractors. We cannot be certain that measures we take to protect our
intellectual property will be successful or that third-parties will not develop
alternative solutions that do not infringe upon our intellectual property.
Further, we plan to offer our mobile entertainment services and applications to
customers worldwide including customers in foreign countries that may offer less
protection for our intellectual property than the United States. Our failure to
protect against misappropriation of our intellectual property, or claims that we
are infringing the intellectual property of third-parties could have a negative
effect on our business, results of operations and financial condition.
WE WILL RELY ON STRATEGIC RELATIONSHIPS TO PROMOTE OUR SERVICES AND FOR ACCESS
TO LICENSED TECHNOLOGY; IF WE FAIL TO DEVELOP, MAINTAIN OR ENHANCE THESE
RELATIONSHIPS, OUR ABILITY TO SERVE OUR CUSTOMERS AND DEVELOP NEW SERVICES AND
APPLICATIONS COULD BE HARMED.
Our ability to provide our services to users of multiple technologies and
platforms depends significantly on our ability to develop, maintain or enhance
our strategic relationships with wireless carriers, handset distributors, key
streaming media technology companies and content providers. We will rely on
these relationships for licensed technology and content. Obtaining comprehensive
multimedia content licenses is challenging, as doing so may require us to obtain
copyright licenses with various third-parties in the fragmented multimedia
recording and publishing industries. These copyrights often address differing
activities related to the delivery of digital media, including reproduction and
performance, some of which may require separate licensing arrangements from
various rights holders such as publishers, content providers, artists and record
labels. The effort to obtain the necessary rights by such third-parties is often
significant, and could disrupt, delay, or prevent us from executing our business
plans. Because of the large number of potential parties from which we must
obtain licenses, we may never be able to obtain a sufficient number of licenses
to allow us to provide services that will meet our customers' expectations.
Due to the evolving nature of our industry, we will need to develop additional
relationships to adapt to changing technologies and standards and to work with
newly emerging companies with whom we do not have pre-existing relationships. We
cannot be certain that we will be successful in developing new relationships or
that our partners will view these relationships as significant to their own
business, or that our partners will continue their commitment to us in the
future. If we are unable to maintain or enhance these relationships, we may have
difficulty strengthening our technology development and increasing the adoption
of our brand and services.
IF WE CANNOT EFFECTIVELY PROMOTE OUR PRODUCTS, WE WILL NOT ATTRACT CUSTOMERS AND
AS A RESULT, OUR BUSINESS MAY FAIL.
We must partner with established players in the industry to generate enough
revenues to succeed. If we cannot partner with a distribution business partner
(ex. a carrier like AT&T) of mobile software products, we will not have the
ability to attract customers. A failure to achieve partners would have a
material and adverse effect on our business, operating results and financial
condition.
19
IF WE CANNOT ESTABLISH AND MAINTAIN QUALIFICATIONS AS A QUALITY SUPPLIER TO
MUSIC AND ENTERTAINMENT CUSTOMERS AND PARTNERS, THE BUSINESS WILL BE ADVERSELY
AFFECTED AND OUR BUSINESS MAY FAIL.
If we cannot achieve and maintain the necessary qualifications for our business,
our customers and partners may elect to seek solutions from other companies.
These qualifications traditionally include music and entertainment oriented
content, attractive look and feel of the product offering, customer service and
technical support requirements (ex. 7x24x365 support). If the Company is
successful in raising additional capital and able to hire and retain qualified
resources for the qualifications noted above, the Company believes it will be
successful in achieving and maintaining the necessary qualifications for the
customers. If the Company cannot achieve or maintain these types of customer
qualifications for customers, our business will be impacted in an adverse way.
THE TECHNOLOGY UNDERLYING OUR SERVICES AND APPLICATIONS IS COMPLEX AND MAY
CONTAIN UNKNOWN DEFECTS THAT COULD HARM OUR REPUTATION, RESULT IN PRODUCT
LIABILITY OR DECREASE MARKET ACCEPTANCE OF OUR SERVICES AND APPLICATIONS.
The technology underlying our multimedia broadcast services and applications is
complex and includes software that is internally developed and software licensed
from third-parties. These software products may contain errors or defects,
particularly when first introduced or when new versions or enhancements are
released. We may not discover software defects that affect our current or new
services and applications or enhancements until after they are sold.
Furthermore, because our digital media services are designed to work in
conjunction with various platforms and applications, we are susceptible to
errors or defects in third-party applications that can result in a lower quality
product for our customers. Because our customers depend on us for digital media
management, any interruptions could:
o damage our reputation;
o cause our customers to initiate product liability suits against us;
o decrease our product development resources;
o cause us to lose revenues; and
o delay market acceptance of our digital media services and applications.
OUR BUSINESS WILL SUFFER IF OUR SYSTEMS FAIL OR OUR THIRD-PARTY FACILITIES
BECOME UNAVAILABLE.
A reduction in the performance, reliability and availability of our systems and
network infrastructure may harm our ability to distribute our products and
services to our customers and other users, as well as harm our reputation and
ability to attract and retain customers and content providers. Our systems and
operations are susceptible to, and could be damaged or interrupted by, outages
caused by fire, flood, power loss, telecommunications failure, Internet
breakdown, earthquake and similar events. We may not have any redundancy in our
Internet multimedia broadcasting facilities and therefore any damage or
destruction to these would significantly harm our multimedia broadcasting
business. Our systems are also subject to human error, security breaches, power
losses, computer viruses, break-ins, "denial of service" attacks, sabotage,
intentional acts of vandalism and tampering designed to disrupt our computer
systems, Websites and network communications. This could lead to slower response
times or system failures.
20
Our operations also depend on receipt of timely feeds from our content
providers, and any failure or delay in the transmission or receipt of such feeds
could disrupt our operations. We also depend on Web browsers, ISPs and online
service providers to provide access over the Internet to our product and service
offerings. Many of these providers have experienced significant outages or
interruptions in the past, and could experience outages, delays and other
difficulties due to system failures unrelated to our systems. These types of
interruptions could continue or increase in the future.
Our digital distribution activities are managed by sophisticated software and
computer systems. We must continually develop and update these systems over time
as our business and business needs grow and change, these systems may not
adequately reflect the current needs of our business. We may encounter delays in
developing these systems, and the systems may contain undetected errors that
could cause system failures. Any system error or failure that causes
interruption in availability of products or content or an increase in response
time could result in a loss of potential or existing business services,
customers, users, advertisers or content providers. If we suffer sustained or
repeated interruptions, our products, services and Websites could be less
attractive to such entities or individuals and our business could be harmed.
Significant portions of our business are dependent on providing customers with
efficient and reliable services to enable customers to broadcast content to
large audiences on a live or on-demand basis. Our operations are dependent in
part upon transmission capacity provided by third-party telecommunications
network providers. Any failure of such network providers to provide the capacity
we require may result in a reduction in, or interruption of, service to our
customers. If we do not have access to third-party transmission capacity, we
could lose customers and, if we are unable to obtain such capacity on terms
commercially acceptable to us our business and operating results could suffer.
Our computer and communications infrastructure is located at a single leased
facility in Atlanta, Georgia. We do not have fully redundant systems, and we may
not have adequate business interruption insurance to compensate us for losses
that may occur from a system outage. Despite our efforts, our network
infrastructure and systems could be subject to service interruptions or damage
and any resulting interruption of services could harm our business, operating
results and reputation.
GOVERNMENT REGULATION COULD ADVERSELY AFFECT OUR BUSINESS PROSPECTS.
We do not know with certainty how existing laws governing issues such as
property ownership, copyright and other intellectual property issues, taxation,
illegal or obscene content, and retransmission of media, personal privacy and
data protection will apply to the Internet or to the distribution of multimedia
and other proprietary content over the Internet. Most of these laws were adopted
before the advent of the Internet and related technologies and therefore do not
address the unique issues associated with the Internet and related technologies.
Depending on how these laws are developed and are interpreted by the judicial
system, they could have the effect of:
o increasing our costs due to new or changes in tax legislation;
o limiting the growth of the Internet;
o creating uncertainty in the marketplace that could reduce demand for our
products and services;
o limiting our access to new markets which may include countries and
technology platforms;
21
o increasing our cost of doing business;
o exposing us to significant liabilities associated with content distributed
or accessed through our products or services; or
o leading to increased product and applications development costs, or
otherwise harming our business.
Specifically with respect to one aspect of copyright law, on October 28, 1998,
the Digital Millennium Copyright Act (or "DMCA") was enacted. The DMCA includes
statutory licenses for the performance of sound recordings and for the making of
recordings to facilitate transmissions. Under these statutory licenses,
depending on our future business activities, we and our customers may be
required to pay licensing fees in connection with digital sound recordings we
deliver or our customers provide on their Website and through retransmissions of
radio broadcasts and/or other audio content.
Because of this rapidly evolving and uncertain regulatory environment, both
domestically and internationally, we cannot predict how existing or proposed
laws and regulations might affect our business. In addition, these uncertainties
make it difficult to ensure compliance with the laws and regulations governing
digital music. These laws and regulations could harm us by subjecting us to
liability or forcing us to change our business.
FORWARD-LOOKING STATEMENTS
This prospectus contains certain forward-looking statements regarding
management's plans and objectives for future operations, including plans and
objectives relating to our planned entry into our service business. The
forward-looking statements and associated risks set forth in this prospectus
include or relate to, among other things, (a) our projected profitability, (b)
our growth strategies, (c) anticipated trends in our industry, (d) our ability
to obtain and retain sufficient capital for future operations, and (e) our
anticipated needs for working capital. These statements may be found under
"Management's Discussion and Analysis or Plan of Operation" and "Description of
Business," as well as in this prospectus generally. Actual events or results may
differ materially from those discussed in these forward-looking statements as a
result of various factors, including, without limitation, the risks outlined
under "Risk Factors" and matters described in this prospectus generally. In
light of these risks and uncertainties, the forward-looking statements contained
in this prospectus may not in fact occur.
The forward-looking statements herein are based on current expectations that
involve a number of risks and uncertainties. Such forward-looking statements are
based on the assumptions that we will be able to continue our business
strategies on a timely basis, that we will attract customers, that there will be
no materially adverse competitive conditions under which our business operates,
that our sole officer and director will remain employed as such, and that our
forecasts accurately anticipate market demand. The foregoing assumptions are
based on judgments with respect to, among other things, future economic,
competitive and market conditions, and future business decisions, all of which
are difficult or impossible to predict accurately and many of which are beyond
our control. Accordingly, although we believe that the assumptions underlying
the forward-looking statements are reasonable, any such assumption could prove
to be inaccurate and therefore there can be no assurance that the results
contemplated in forward-looking statements will be realized. In addition, as
disclosed elsewhere in this "Risk Factors" section of this prospectus, there are
22
a number of other risks inherent in our business and operations, which could
cause our operating results to vary markedly and adversely from prior results or
the results contemplated by the forward-looking statements. Increases in the
cost of our services, or in our general or administrative expenses, or the
occurrence of extraordinary events, could cause actual results to vary
materially from the results contemplated by these forward-looking statements.
Management decisions, including budgeting, are subjective in many respects and
subject to periodic revisions in order to reflect actual business conditions and
developments. The impact of such conditions and developments could lead us to
alter our marketing, capital investment or other expenditures and may adversely
affect the results of our operations. In light of the significant uncertainties
inherent in the forward-looking information included in this prospectus, the
inclusion of such information should not be regarded as a representation by us
or any other person that our objectives or plans will be achieved.
USE OF PROCEEDS
Our offering is being made on a self-underwritten basis: no minimum number of
shares must be sold in order for the offering to proceed. The offering price per
share is $0.01. The following table sets forth the uses of proceeds assuming the
sale of 25%, 50%, 75% and 100%, respectively, of the securities offered for sale
by the Company.
IF 25% OF IF 50% OF IF 75% OF IF 100% OF
SHARES SOLD SHARES SOLD SHARES SOLD SHARES SOLD
----------- ----------- ----------- -----------
NET PROCEEDS FROM
THIS OFFERING $2,500 $10,000 $17,500 $25,000
Our offering is being made on a self-underwritten basis: no minimum number of
shares must be sold in order for the offering to proceed. The offering price per
share is $0.01. The net proceeds in the table above assume $5,000 in costs
associated with this offering.
The funds raised through this offering will be used to develop and complete the
business and marketing plan, which we anticipate will cost approximately
$15,000. If less than the maximum offering funds are raised, the proceeds will
first be used for essential business operations such as SEC filings with the
remaining amount allocated to completing the business and marketing plan. The
company does not anticipate using any of the offering proceeds for product
development.
DETERMINATION OF OFFERING PRICE
As there is no established public market for our shares, the offering price and
other terms and conditions relative to our shares have been arbitrarily
determined by InTake Communications, Inc. and do not bear any relationship to
assets, earnings, book value, or any other objective criteria of value. In
addition, no investment banker, appraiser, or other independent third party has
been consulted concerning the offering price for the shares or the fairness of
the offering price used for the shares.
The price of the current offering is fixed at $0.01 per share. This price is
significantly greater than the price paid by the company's sole officer and
director for common equity since the company's inception on December 24, 2009.
The company's sole officer and director paid $0.001 per share, a difference of
$0.009 per share lower than the share price in this offering.
23
DILUTION OF THE PRICE YOU PAY FOR YOUR SHARES
Dilution represents the difference between the offering price and the net
tangible book value per share immediately after completion of this offering. Net
tangible book value is the amount that results from subtracting total
liabilities and intangible assets from total assets. Dilution arises mainly as a
result of our arbitrary determination of the offering price of the shares being
offered. Dilution of the value of the shares you purchase is also a result of
the lower book value of the shares held by our existing stockholders. The
following tables compare the differences of your investment in our shares with
the investment of our existing stockholders.
COMPANY IF ALL OF THE SHARES ARE SOLD
- -------------------------------------
Price per share ............................................... $0.01
Net tangible book value per share before offering ............. $0.001
Potential gain to existing shareholders ....................... $0
Net tangible book value per share after offering .............. $0.0033
Increase to present stockholders in net tangible book value
per share after offering ................................... $0.002775
Capital contributions ......................................... $9,000
Number of shares outstanding before the offering .............. 9,000,000
Number of shares after offering held by existing stockholders . 9,000,000
Percentage of ownership after offering ........................ 75%
PURCHASERS OF SHARES IN THIS OFFERING IF ALL SHARES SOLD
- --------------------------------------------------------
Price per share ............................................... $0.01
Dilution per share ............................................ $0.0025
Capital contributions ......................................... $30,000
Percentage of capital contributions ........................... 77%
Number of shares after offering held by public investors ...... 3,000,000
Percentage of ownership after offering ........................ 25%
THE OFFERING BY THE COMPANY
InTake Communications is registering 3,000,000 shares of its common stock for
offer and sale.
There is currently no active trading market for our common stock, and such a
market may not develop or be sustained. We currently plan to have our common
stock listing on the OTC Bulletin Board, subject to the effectiveness of this
Registration Statement. In addition, a market maker will be required to file a
Form 211 with the National Association of Securities Dealers Inc. before the
market maker will be able to make a market in our shares of common stock. At the
date hereof, we are not aware that any market maker has any such intention.
All of the shares registered herein will become tradable on the effective date
of this registration statement. The company will not offer the shares through a
broker-dealer or anyone affiliated with a broker-dealer.
NOTE: As of the date of this prospectus, our sole officer and director, Ron
Warren, owns 9,000,000 common shares, which are subject to Rule 144
restrictions. There is currently one (1) shareholder of our common stock.
The company is hereby registering 3,000,000 common shares. The price per share
is $0.01.
24
In the event the company receives payment for the sale of their shares, InTake
Communications will receive all of the proceeds from such sales. InTake
Communications is bearing all expenses in connection with the registration of
the shares of the company.
PLAN OF DISTRIBUTION
We are offering the shares on a "self-underwritten" basis directly through Ron
Warren our executive officer and director named herein, who will not receive any
commissions or other remuneration of any kind for selling shares in this
offering, except for the reimbursement of actual out-of-pocket expenses incurred
in connection with the sale of the common stock. The offering will conclude when
all 3,000,000 shares of common stock have been sold, or 90 days after this
registration statement becomes effective with the Securities and Exchange
Commission. InTake Communications may at its discretion extend the offering for
an additional 90 days.
This offering is a self-underwritten offering, which means that it does not
involve the participation of an underwriter to market, distribute or sell the
shares offered under this prospectus. We will sell shares on a continuous basis.
We reasonably expect the amount of securities registered pursuant to this
offering to be offered and sold within two years from this initial effective
date of this registration.
In connection with his selling efforts in the offering, Ron Warren will not
register as broker-dealer pursuant to Section 15 of the Exchange Act, but rather
will rely upon the "safe harbor" provisions of Rule 3a4-1 under the Exchange
Act. Generally speaking, Rule 3a4-1 provides an exemption from the broker-dealer
registration requirements of the Exchange Act for persons associated with an
issuer that participate in an offering of the issuer's securities. Ron Warren is
not subject to any statutory disqualification, as that term is defined in
Section 3(a)(39) of the Exchange Act. Ron Warren will not be compensated in
connection with his participation in the offering by the payment of commissions
or other remuneration based either directly or indirectly on transactions in our
securities. Ron Warren is not and has not been within the past 12 months, a
broker or dealer, and is not within the past 12 months, an associated person of
a broker or dealer. At the end of the offering, Ron Warren will continue to
primarily perform substantial duties for us or on our behalf otherwise than in
connection with transactions in securities. Ron Warren has not participated in
selling an offering of securities for any issuer more than once every 12 months
other than in reliance on Exchange Act Rule 3a4-1(a)(4)(i) or (iii).
9,000,000 common shares are issued and outstanding as of the date of this
prospectus. The company is registering an additional 3,000,000 shares of its
common stock for possible resale at the price of $0.01 per share. There is no
arrangement to address the possible effect of the offerings on the price of the
stock.
InTake Communications, Inc. will receive all proceeds from the sale of the
shares by the company. The price per share is $0.01. However, InTake
Communications common stock may never be quoted on the OTC Bulletin Board or
listed on any exchange.
The company's shares may be sold to purchasers from time to time directly by,
and subject to, the discretion of the company. Further, the company will not
offer their shares for sale through underwriters, dealers, or agents or anyone
who may receive compensation in the form of underwriting discounts, concessions
or commissions from the company and/or the purchasers of the shares for whom
they may act as agents. The shares sold by the company may be sold occasionally
25
in one or more transactions, either at an offering price that is fixed or that
may vary from transaction to transaction depending upon the time of sale, or at
prices otherwise negotiated at the time of sale. Such prices will be determined
by the company or by agreement between the company and any purchasers of our
common stock.
The shares may not be offered or sold in certain jurisdictions unless they are
registered or otherwise comply with the applicable securities laws of such
jurisdictions by exemption, qualification or otherwise. We intend to sell the
shares only in the states in which this offering has been qualified or an
exemption from the registration requirements is available, and purchases of
shares may be made only in those states.
In addition and without limiting the foregoing, the company will be subject to
applicable provisions, rules and regulations under the Exchange Act with regard
to security transactions during the period of time when this Registration
Statement is effective.
InTake Communications will pay all expenses incidental to the registration of
the shares (including registration pursuant to the securities laws of certain
states).
LEGAL PROCEEDINGS
We are not a party to any material legal proceedings and to our knowledge; no
such proceedings are threatened or contemplated by any party.
BUSINESS
INTRODUCTION
Intake Communications is a mobile video services provider with plans to develop
a powerful video services platform for mobile and online applications. This
platform will be unique in its ability to enable simultaneous video delivery to
mobile devices. In addition, the platform will have the ability to securely
deliver these video streams based on a monetary transaction (either
bill-to-a-credit-card or bill-to-a-phone).
There is a tremendous convergence taking place today between digital computing
platforms (mobile, desktop or entertainment) and the Internet (via wired or
wireless networks). Intake intends to lead the market with regards to
distribution and monetization of video content to digital devices. Given its
planned technological advantages, the Company believes it will be uniquely
qualified to do so.
Intake plans to be the first Web and mobile-based global streaming service
specifically designed for music concerts. The Company's planned robust
development platform will combine the streaming of video to the desktop, mobile
phones, and other internet connected devices with a powerful e-Commerce
platform.
The Intake concept is to offer consumers a high quality event that can be viewed
either live or on-demand through the desktop or mobile phone. It will offer
artists the opportunity to generate additional revenue from their music events
and through Intake's planned targeted syndication opportunities including
revenue generated through iTunes, Amazon.com, numerous mobile carriers such as
AT&T Wireless and other channels worldwide. With the decline of revenue
royalties through standard music sales, artists increasingly rely on the revenue
they generate through their concert performances - which they control from a
"digital rights" perspective.
26
In addition to revenue generated through the purchase of tickets for the
streamed concert, revenue (as well as cost offsets) will be generated through
sponsors.
Intake will also utilize social media channels developed by the artists
(Facebook, MySpace, and Twitter) to reach their extensive fan base and to draw
them back to the Intake site. In addition, these marketing campaigns also will
introduce fans to Intake's platform where they can purchase tickets to other
artist's concert events.
Intake will execute on this strategy based on a mixture of video distribution,
advertising, subscription and mobile development services.
The Company
Intake Communications is developing powerful technologies that will enable the
aggregation and distribution of streaming video content and other media for
consumers connected to the Internet through land line as well as wireless
devices. Intake's products and services will include a mobile video hosting
service that supports content management, encoding, hosting, streaming, and
reporting services for live, simulated live and video-on-demand applications.
Intake services will include multiple billing options, advertising support,
client application development and other content-related services. The Intake
interactive platform and digital media solution also will integrate local,
syndicated terrestrial and Internet radio programming with IP communications and
the rich media features of today's mobile devices.
Intake will provide solutions for a variety of multimedia mobile application
features including photos, music, movies and interactive text messaging.
Intake's platform will also support ecommerce applications for mobile shopping,
location based services and cross-promotional marketing. Intake's platform will
offer interactive communications capabilities including mobile IM and mobile
email. In addition, Intake will offer managed services for Internet network
operators, content owners, producers and distributors.
Intake's objective is to capitalize on the ever increasing demand by consumers
for personalized and interactive entertainment in the mobile technology
industry. To support this goal Intake provides its clients with high-quality,
interactive media solutions to mobilize their content. Intake's target market
includes media and entertainment companies, consumer and retail brands, portals
and user-oriented communities. Intake will continue to expand its market
opportunities by delivering video services to all devices that receive the
Internet Protocol (IP) data streams and rendering those data streams into
visible images on displays.
Intake will developed a core technology platform (ViewStream Pro) that is
optimized for the efficient utilization of Internet and wireless bandwidth in
conjunction with streaming video. The technology will be built around a
proprietary compression algorithm that allows smooth delivery of high quality
video streams over a variety of connection types. Its platform will be
compatible with the Microsoft Windows Mobile operating system, Symbian, J2ME and
Palm wireless handsets. Together these platforms represent nearly 40% of the
U.S. market today. The Intake technology will be also compatible with all
Windows O/S Personal Digital Assistants (PDA) devices, which comprise about 85%
of all PDA handsets. Intake is growing its market opportunity by expanding the
compatibility of its products and services with additional handset types and
operating systems. Intake is focused on becoming a leader in converged media
technology.
27
The mobile entertainment industry is still in its very early stages, with many
competitors offering unique services and a variety of business models. Intake's
competition includes companies offering video, audio, interactive programming,
telephony, data and other entertainment services, including cable television,
wireless companies, direct-to-home companies, Regional Bell Operating Companies
(RBOCs) and companies developing similar technologies and platforms.
Currently, Intake's service component is not subject to any governmental
regulation. However, in the future these services may be subject to U.S.
government regulation, mainly by the FCC or possibly by Congress, other federal
agencies, state and local authorities or the International Telecommunications
Union (ITU).
Intake's business is characterized by the following product offerings: Mobile
Video Hosting Services, ConcertView and Mobile Media Solutions. Intake provides
video streaming services to the corporate, educational, and government sectors
using its proprietary technology. Intake's products include: mobile video
hosting services, mobile marketing solutions, social networking and mobile media
solutions.
With its Mobile Video Hosting Services Intake plans to operate a mobile content
delivery network (CDN) in the digital media delivery services space. These
services are used by mobile content aggregators, developers and content
providers, media and entertainment companies, broadcasters and video
infrastructure providers, wireless carriers and MVNOS, advertisers, marketers,
ad agencies and corporate brands.
These mobile hosting and streaming solutions enable content owners to publish
their content to mobile users on all major carrier networks. Through its planned
proprietary video streaming process, Intake will extend programming via wireless
IP broadcast to data-enabled cell phones using the wireless operator networks.
Intake's audio and video content will be distributed across the wireless
networks of twelve U.S. carriers today, including the four largest operators:
AT&T Wireless, Verizon Wireless, Sprint-Nextel and T-Mobile. Other operators
include Alltel, Virgin Wireless, MetroPCS, Midwest Wireless, Cricket, nTelos,
U.S. Cellular, Centennial, Cellular South, and others.
Intake believes its mobile distribution relationships will expand, particularly
with its Mobile Video Hosting Services and ConcertView applications.
Additionally Intake will offer value-added services such as multiple billing
options including: credit card, carrier direct billing, carrier SMS and third
party billing capabilities. With its mobile marketing solutions Intake will
provide a wide range services including SMS campaigns and mobile marketing.
Intake will provide short code procurement through the cross-carrier short code
administration, campaign support for all tier one and two US carriers,
application design, password-protected real-time reporting, sweepstakes design
and campaign execution.
Intake's planned unique Mobile Media Solutions will provide a wide choice of
turnkey applications for delivering client and browser-based applications across
all mobile platforms including J2ME, BREW, Windows Mobile, Palm and WAP/xHTML.
Intake's applications will integrate the feature sets of all multimedia content
including: photos, music, movies, interactive text messaging, e-Commerce
functions such as mobile shopping, location based services, social networking,
cross-promotional marketing and communications including mobile IM and email.
28
Intake's planned unique platforms will be well-positioned to capture a leading share of emerging user-generated content segment of the mobile market. Intake plans to develop an application that enables users to upload photos, videos, music and blogs via PCs, handsets and set-top boxes (STBs). Customers will interact with social networking applications like MySpace and Facebook through the Intake Mobile Media Solutions platform. THE MARKET The music industry is extremely broad and diverse and is a global business. With the exception of sports, very few things stir the emotions and passions like music. Music is also one of the only things that can be traced back to the beginning of time. Throughout the centuries music has brought us joy, made us to cry, filled us with national pride and caused us to sing out loud when we thought no one was listening. Music is a multi-billion dollar industry and is extremely diverse. The worldwide music industry is expected to generate $66.4 billion in 2010 and $67.6 billion in 2011. Live music concerts represent approximately $20.8 billion of the industry's total revenue and are estimated to grow to $23.5 billion in 2011. Of these estimates, streaming audio will account for worldwide mobile music revenues of nearly $562 million with music downloads contribution approximately $1.6 billion. ComScore, Inc., a leader in measuring the digital world, reported that 6.5 million Americans tuned into mobile video in August 2008. According to the study, on-demand video was the most popular format, with 3.6 million viewers. With 1.3 million viewers, amateur videos, such as those on YouTube, represent the most popular type of content, followed by music video and comedy videos. Music videos are the top choice for programmed mobile broadcast video users, followed closely by full television shows or films and movie trailers.
The music industry is diverse and complex incorporating ticket sales, live
concerts, recorded music, digital music, ringtones, ringback tones, music
downloads, music videos, music broadcast, publishing, CD sales, licensed
produces, music related advertising, collectables, streaming audio, etc. Because
of this diversity, it is difficult to put an all-encompassing figure on annual
revenue.
29
However, the media used to deliver music and its related market segments is evolving quickly. Music related genres are one of the most widely view categories online. At the same time, digital downloads are enabling consumers to view and or listen to music and videos at their leisure. Finally, the rapid emergence of music and video delivered via the state-of-the-art cell phone is having a major impact on the industry. Monetizing digital music assets will come in a variety of ways. One of the most promising ways to monetize digital music is the use of advertising which accounted for approximately $285.1 billion in the U.S. last year. Among the best growth areas in advertising in recent years has been advertising on mobile devices, advertising on movie screens and advertising online. Ad agencies said that they will spend more money on mobile advertising in 2010 than they did in 2009, with strong increases on big ad spends (>$1 million), based on the "State of the Industry Mobile Advertising" report jointly published by Millennial Media, the largest and fastest growing mobile advertising network in the U.S. and DM2PRO.COM, a knowledge base for digital media and marketing professionals.
Source: Fierce Mobile
30
Their finding also concluded that the CPG, Retail, Entertainment, Travel and Restaurant categories are expected to lead mobile spending; which is somewhat consistent with who is spending the most in mobile advertising today. Engagement leads the number one sought return for an investment in mobile marketing, though "opt-in", or list building, was cited as the most likely goal for Q4 campaigns.
Source: Fierce Mobile
The largest cohorts replied that they will spend less than $100K in mobile
advertising in 2009; however, that number jumps significantly in 2010. With 60%
of non-mobile marketers planning to employ mobile advertising in 2010, the
increase in mobile spend is among the leading highlights:
o Mobile spending is expected to increase next year, with 31% of agency
respondents stating that they will invest between $100K and $249K.
o More than 15% plan to invest more than $1M and 2.6% projected spending of
greater than $5M.
o More than 1/2 of Q4 mobile campaigns will represent between 1% and 10% of
their clients' total spending, but, for a few, that number will be
40%-50%.
o Nearly 75% of the 100 leading agency respondents stated that they have
developed mobile campaigns for themselves or a client.
o As an average value, brand respondents forecasted at least a 15% increase
in spend in 2010.
31
Mobile advertising performance meets expectations and remains valuable. Among
those who have executed mobile campaigns:
o 78% of respondents said the medium met their campaign goals, and an
additional 9% said mobile performed "beyond our wildest expectations."
o For 89% of agencies, the mobile facet of a campaign is just one portion of
a multi-platform buy.
o Nearly a third (30%) of agency respondents said mobile has become an
"indispensable" part of the media mix. Another 67% ranked mobile as
"somewhat valuable" and only 2% said it was not valuable in their overall
media mix.
Source: Fierce Mobile
More than 80% of agencies who have participated in mobile campaigns have hired
or developed internal resources to support them. Nearly 90% stated they are
typically the ones to suggest that a client employ mobile as part of their
campaign strategy. Still, it often involves multiple partners to expertly
execute on the promise of mobile media. Partners include technology, metrics,
mobile ad network, and app developer resources, among others. Approximately 80%
of mobile campaigns employed a mobile ad network of some kind, and about half of
those have a single favorite provider.
32
To help fuel the growth in mobile advertising the Coda Research Consultancy forecasts that mobile broadband video users will grow from just 15 million in 2009 to more than 74 million by 2015. Mobile video use via netbooks and notebooks also will see growth from a current 4 million users to more than 24 million users in 2015.
Source: Fierce Mobile
For advertisers willing to adapt to today's rapidly evolving environment, there
is good news. Effective advertising targets consumers based on their passions
rather than simply their age or socio-economic demographic. That is, the
increasing range of niche media now available enables carefully crafted messages
to be designed for and delivered to specific consumer "passionate interest
groups." Blogs, podcasting, cable TV programming, on-demand, mobile phone-based
news and entertainment programming, satellite radio and online social media
networks are booming. Never in history have there been so many unique
opportunities for targeted marketing based on consumer's tastes, interests,
special needs and passions.
33
      
According to Screen Digest, revenues from digital music downloads to mobile
phones are expected to double in terms of revenue over the next five years.
Revenue generated by content programming for so-called "smart" mobile phones
will increase 17% in 2009 as companies such as Walt Disney's ESPN and MobiTV
make more mobile videos available, according to one report released late last
week.
U.S. mobile-video revenue will grow to about $350 million this year, up from
$300 million in 2008, and will likely accelerate to a 25% annual growth rate
over the next few years as more people buy Apple's iPhones, Palm's Pre and
updated versions of Research In Motion's BlackBerry, research firm SNL Kagan
said.
Such spending growth would build on recent mobile-video trends, as about 50
million Americans used the Internet through their mobile devices in February, up
from about 29 million two years earlier, Nielsen said in a report released last
month.
With more people using the Internet from their cell phones, mobile-video viewing
has surged, prompting companies such as AT&T and Verizon Communications to
invest more in mobile applications. The number of people who watched mobile
video in the fourth quarter jumped 9% from the third quarter, to about 11
million, Nielsen said in February.
SNL Kagan said that such revenue will increase as more people subscribe to
mobile-video services. Smart phone subscribers will more than double to 114
million, or about 40% of all mobile-phone customers, in 2010, from 50 million,
or 19% in 2008. By the end of 2014, 60% of mobile-phone customers will be
smartphone subscribers, according to SNL Kagan.
Data recently issued by Pyramid Research, estimates that the number of users
paying for mobile video services subscriptions directly delivered to their
handsets will grow five-fold by 2014, surpassing 534 million subscribers at the
end of the period. That is equivalent to 8.5% of all mobile subscriptions, up
from the current 2.5% level.
34
STRATEGY & POSITIONING
Business Model:
Intake Communications' business model is based on the market advantages its
planned delivery platform will incorporate. The platform's intelligence will
dynamically identify the network, the type of cell phone and the best format for
delivery to that phone. Given the sheer number and vast complexity of carrier
networks, given the number and complexity of the multiple handsets designed to
operate on each network and given the number of media players, the Company will
be a one-stop-shop solutions provider for content. Furthermore, the platform
will deliver content through the carrier networks as well as independently of
the carrier networks. Those competitive advantages form the foundation of our
business plan.
Advertising:
Intake believes that cell phones currently lend themselves best to multimedia
"snacks" - short, snippets of targeted entertainment and information. Management
further believes that this new medium is unlikely to be full-length television
programming on a small screen. Rather it will lend itself to special content to
targeted interest groups in "bite size" (1 to 5 minute video clips) - which
appeal mostly to a younger demographic. Further, the cell phone lends itself
extremely well to sponsored content and the Company believes that this will be
the most important segment of this new industry.
The power behind the Company's business model is that customers drive the
advertising. They market and sell the advertising across various mediums
including TV, print, radio, and now they have the ability to offer broadband and
mobile. This will increase revenue for the Company and more importantly allow it
to focus on technology and the execution vs. advertising which is not its core
competency.
Subscriptions:
The Company believes that there are substantial revenue growth opportunities in
mobile video subscriptions with the adoption of mobile video services, which
include paid video clips, music videos, live streaming concerts, encore
performances, music videos, TV episodes, TV programming, and movies.
Developments related to 3G and 4G networks, mobile TV broadcasting, downloading,
streaming, side-loading, content, data usage, smartphones, and other devices are
opportunities for The Company to capitalize on the continued adoption by
consumers in the mobile space across developed and emerging markets. The
availability of improved devices and networks are contributing to a higher level
of adoption and spending on mobile video services.
Partnerships:
The ability to simultaneously deliver multimedia content independent of and in
conjunction with the carriers is another important cornerstone of the Company's
business model. This will be done via the Partner's and Company's WAP site
initially and ultimately through the carrier's deck or when the content is
sponsored it will be given away free directly to the end-user.
35
Monetizing the Mobile Users:
On-Demand Clips
o Pre Roll and Post-Roll Sponsorship of Video
o Dynamic Ad Serving
o Target Ads/Sponsorships (via opt-in database)
o Links to Merchandise
o Links to pay-per-view, special events, social media sites
MANAGEMENT
We intend to employ and use consultants to build the corporate infrastructure in
FINANCE, ACCOUNTING, MARKETING, SALES, SOFTWARE, PURCHASING and other
administrative functions.
SALES AND MARKETING
InTake Communications intends to use the proceeds from this offering to develop
a detailed marketing plan. At the present time, we anticipate creating a limited
direct sales force dedicated to marketing and selling services to clients
seeking music and entertainment oriented mobile transactional solutions. These
clients are broad and diverse. Since the Company has limited financial
resources, the Company will not use traditional marketing efforts like TV,
radio, and other printing media. Instead, the Company will focus its efforts by
identifying and working with industry experts to develop the marketing plan.
InTake Communications expects to build a limited sale force in the south east.
With the variety of music and entertainment companies, the sales team will
identify and work closely with the top prospects, develop opportunities, close
sales, and manage those one-on-one client relationships.
In conjunction with the direct sales efforts, the Company intends to leverage
the indirect sales channel by identifying and working with other companies (ex.
channel partners) that service the music and entertainment industry that are
complementary to InTake Communications' efforts. The Company will identify these
other channel partners and develop marketing plans that are mutually beneficial
both on the business and financial side. At this time, these companies have not
been identified.
InTake Communications' strategy is to quickly establish relationships with the
market leaders in the music and entertainment industry as they position
themselves to respond to their customer's mobile and wireless needs.
STAFFING
As of December 31, 2009, InTake Communications has no permanent staff other than
its sole officer and director, Ron Warren, who is the President and Chairman of
the company. Ron Warren has the flexibility to work on InTake Communications up
to 20 to 25 hours per week. He is prepared to devote more time to our operations
as may be required. He is not being paid at present.
36
EMPLOYEES AND EMPLOYMENT AGREEMENTS
At present, InTake Communications has no employees other than its current sole
officer and director, Ron Warren, who has not been compensated. There are no
employment agreements in existence. The company presently does not have any
pension, health, annuity, insurance, stock options, profit sharing, or similar
benefit plans; however, the company may adopt plans in the future. There are
presently no personal benefits available to the company's director.
During the initial implementation of our development strategy, the company
intends to hire independent consultants, and contractors to develop, prototype,
various components of technology platform. The Company will need to raise
additional capital over the next twelve (12) months to hire and/or retain these
resources.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This section of the prospectus includes a number of forward-looking statements
that reflect our current views with respect to future events and financial
performance. Forward-looking statements are often identified by words like:
"believe", "expect", "estimate", "anticipate", "intend", "project" and similar
expressions, or words which, by their nature, refer to future events. You should
not place undue certainty on these forward-looking statements, which apply only
as of the date of this prospectus. These forward-looking statements are subject
to certain risks and uncertainties that could cause actual results to differ
materially from historical results or our predictions.
WE ARE A DEVELOPMENT STAGE COMPANY ORGANIZED TO DEVELOP
We have not yet generated or realized any revenues from business operations. Our
auditors have issued a going concern opinion. This means there is substantial
doubt that we can continue as an on-going business for the next twelve (12)
months unless we obtain additional capital to pay our bills. This is because we
have not generated any revenues and no revenues are anticipated until we begin
marketing our service to customers. Accordingly, we must raise cash from sources
other than revenues generated from the proceeds of loans we undertake.
From inception to December 31, 2009, the company's business operations have
primarily been focused on developing our business plan and market research.
LIMITED OPERATING HISTORY; NEED FOR ADDITIONAL CAPITAL
THERE IS NO HISTORICAL FINANCIAL INFORMATION ABOUT US UPON WHICH TO BASE AN
EVALUATION OF OUR PERFORMANCE. INTAKE COMMUNICATIONS, INC. WAS INCORPORATED IN
THE STATE OF FLORIDA ON December 24, 2009; WE ARE A DEVELOPMENT STAGE COMPANY
ATTEMPTING TO ENTER INTO THE ADVERTISING AND SUBSCRIPTION SUPPORTED CONTENT
MANAGEMENT SOLUTIONS TO DELIVER VIDEO, AUDIO AND RELATED ADVANCED MULTIMEDIA
PROGRAMMING TO BROADBAND, IPTV AND A WIDE VARIETY OF WIRELESS MOBILE DEVICES.
OUR INTENDED PRIMARY MARKETING BUSINESS APPROACH SHOULD BE TO PARTNER WITH
ESTABLISHED MUSIC AND ENTERTAINMENT CONTENT PROVIDERS TO MARKET AND SUPPORT THE
PRODUCT OFFERING. WE HAVE NOT GENERATED ANY REVENUES FROM OUR OPERATIONS. WE
CANNOT GUARANTEE WE WILL BE SUCCESSFUL IN OUR BUSINESS OPERATIONS. OUR BUSINESS
IS SUBJECT TO RISKS INHERENT IN THE ESTABLISHMENT OF A NEW BUSINESS ENTERPRISE,
INCLUDING THE FINANCIAL RISKS ASSOCIATED WITH THE LIMITED CAPITAL RESOURCES
CURRENTLY AVAILABLE TO US FOR THE IMPLEMENTATION OF OUR BUSINESS STRATEGIES (SEE
"RISK FACTORS"). TO BECOME PROFITABLE AND COMPETITIVE, WE MUST DEVELOP THE
BUSINESS AND MARKETING PLAN, EXECUTE THE PLAN AND ESTABLISH SALES AND
CO-DEVELOPMENT RELATIONSHIPS WITH CUSTOMERS AND PARTNERS.
37
Our sole officer and director undertakes to provide us with initial operating
and loan capital to sustain our business plan over the next twelve (12) month
period partially through this offering and will seek alternative financing
through means such as borrowings from institutions or private individuals.
PLAN OF OPERATION
Over the 12 month period starting upon the effective date of this registration
statement, the Company must raise capital in order to complete the Business and
Marketing Plan and to commence its execution. The Company anticipates that the
business and marketing plan will be completed within 180 days after the offering
is completed. After the business and marketing plan are completed, the company
plans on using consultants and contractors to commence the product development
strategy. During the initial implementation of our development strategy, the
Company intends to hire independent consultants, and contractors to develop,
prototype, various components of product. The Company expects product
development to last between eighteen (18) and twenty four (24) months.
Since inception to December 24, 2009, InTake Communications has spent a total of
$3,579 on start-up costs. The Company has not generated any revenue from
business operations. All proceeds currently held by the company are the result
of the sale of common stock to its officers. The Company does not have any
contractual arrangement with our CEO, Ron Warren to fund the Company on an
on-going basis for either operating capital or a loan. The CEO may elect to fund
the Company as he did initially, however there are no assurances that he will in
the future.
The Company incurred expenditures of $3,500 for audit services. The Company also
had expenditures of $79 for general administrative costs. Since inception, the
majority of the company's time has been spent refining its business plan and
conducting industry research, and preparing for a primary financial offering.
LIQUIDITY AND CAPITAL RESOURCES
As of the date of this registration statement, we have yet to generate any
revenues from our business operations. For the period ended December 31, 2009,
InTake Communications, Inc. issued 9,000,000 shares of common stock to our sole
officer and director for cash proceeds of $9,000 at $0.001 per share.
We anticipate needing a $175,000 in order to execute our business plan over the
next twelve (12) months, which includes completing the business plan, completing
the prototype plans, and identifying the necessary resources to implement our
plan. We anticipate the work will require three part time resources for
technical work that will cost approximately $35,000 each. In addition, we will
require one marketing resource that will require $40,000 and the balance of
$30,000 for general working capital purposes. However, the available cash is not
sufficient to allow us to commence full execution of our business plan. Based on
our success of raising additional capital over the next twelve (12) months, we
anticipate employing various consultants and contractors to commence the
development strategy for the product prototypes. Until the Business and
Marketing plan are completed, we are not able to quantify with any certainty any
planned capital expenditures including the hiring of consultants and
contractors. The only planned capital expenditure is the public company costs.
As of December 31, 2009, the Company has no firm commitments for any capital
expenditures.
38
Our business expansion will require significant capital resources that may be
funded through the issuance of common stock or of notes payable or other debt
arrangements that may affect our debt structure. Despite our current financial
status we believe that we may be able to issue notes payable or debt instruments
in order to start executing our Business and Marketing Plan. We anticipate that
receipt of such financing may require granting a security interest in the
service offering, and are willing to grant such interest to secure the necessary
funding.
Through December 31, 2009, we have spent a total of $3,579. $79 in General &
Administration expenses and $3,500 in professional fees.
To date, we have managed to keep our monthly cash flow requirement low for two
reasons. First, our sole officer has agreed not to draw a salary until a minimum
of $250,000 in funding is obtained or until we have achieved $500,000 in gross
revenues. Second, we have been able to keep our operating expenses to a minimum
by operating in space owned by our sole officer and are only paying the direct
expenses associated with our business operations.
In the early stages of our company, we will need cash for completing the
business and marketing plan. We anticipate that during the first year, in order
to execute our business plan to any meaningful degree, we would need to spend a
minimum of $175,000 on such endeavors. If we are unable to raise the funds
partially through this offering we will seek alternative financing through means
such as borrowings from institutions or private individuals. There can be no
assurance that we will be able to keep costs from being more than these
estimated amounts or that we will be able to raise such funds. Even if we sell
all shares offered through this registration statement, we expect that we will
seek additional financing in the future. However, we may not be able to obtain
additional capital or generate sufficient revenues to fund our operations. If we
are unsuccessful at raising sufficient funds, for whatever reason, to fund our
operations, we may be forced to seek a buyer for our business or another entity
with which we could create a joint venture. If all of these alternatives fail,
we expect that we will be required to seek protection from creditors under
applicable bankruptcy laws.
Our independent auditor has expressed substantial doubt about our ability to
continue as a going concern and believes that our ability is dependent on our
ability to implement our business plan, raise capital and generate revenues. See
Note 6 of our financial statements.
MANAGEMENT
OFFICERS AND DIRECTORS
Our sole officer and director will serve until his successor is elected and
qualified. Our officers will be elected by the board of directors to a term of
one (1) year and serve until their successor is duly elected and qualified, or
until they are removed from office. The board of directors has no nominating,
auditing or compensation committees.
39
The name, address, age and position of our president, secretary/treasurer, and
director and vice president is set forth below:
Name and Address Age Position(s)
- ---------------- --- -----------
Ron Warren 55 President, Secretary/Treasurer, Principal
Executive Officer Principal Financial Officer,
and sole member of the Board of Directors
The person named above has held his offices/positions since the inception of our
company and is expected to hold his offices/positions until the next annual
meeting of our stockholders.
COMMITTEES OF THE BOARD OF DIRECTORS
Our Board of Directors has not established any committees, including an Audit
Committee, a Compensation Committee, a Nominating Committee or any committee
performing a similar function. The functions of those committees are being
undertaken by the entire board as a whole. Because we do not have any
independent directors, our Board of Directors believes that the establishment of
committees of the Board would not provide any benefits to our company and could
be considered more form than substance.
We do not have a policy regarding the consideration of any director candidates
which may be recommended by our stockholders, including the minimum
qualifications for director candidates, nor has our Board of Directors
established a process for identifying and evaluating director nominees. We have
not adopted a policy regarding the handling of any potential recommendation of
director candidates by our stockholders, including the procedures to be
followed. Our Board has not considered or adopted any of these policies as we
have never received a recommendation from any stockholder for any candidate to
serve on our Board of Directors. Given our relative size and lack of directors
and officers insurance coverage, we do not anticipate that any of our
stockholders will make such a recommendation in the near future. While there
have been no nominations of additional directors proposed, in the event such a
proposal is made, all members of our Board will participate in the consideration
of director nominees. Our director is not an "audit committee financial expert"
within the meaning of Item 401(e) of Regulation S-K. In general, an "audit
committee financial expert" is an individual member of the audit committee or
Board of Directors who:
o understands generally accepted accounting principles and financial
statements,
o is able to assess the general application of such principles in connection
with accounting for estimates, accruals and reserves,
o has experience preparing, auditing, analyzing or evaluating financial
statements comparable to the breadth and complexity to our financial
statements,
o understands internal controls over financial reporting, and
o understands audit committee functions.
Our Board of Directors is comprised of an individual who was integral to our
formation and who is involved in our day to day operations. While we would
prefer our director be an audit committee financial expert, the individual who
has been key to our development has professional background in finance or
accounting. As with most small, early stage companies, until such time as our
40
company further develops its business, achieves a stronger revenue base and has
sufficient working capital to purchase directors and officers insurance, we do
not have any immediate prospects to attract independent directors. When we are
able to expand our Board of Directors to include one or more independent
directors, we intend to establish an Audit Committee of our Board of Directors.
It is our intention that one or more of these independent directors will also
qualify as an audit committee financial expert. Our securities are not quoted on
an exchange that has requirements that a majority of our Board members be
independent and we are not currently otherwise subject to any law, rule or
regulation requiring that all or any portion of our Board of Directors include
"independent" directors, nor are we required to establish or maintain an Audit
Committee or other committee of our Board of Directors.
WE DO NOT HAVE ANY INDEPENDENT DIRECTORS AND WE HAVE NOT VOLUNTARILY IMPLEMENTED
VARIOUS CORPORATE GOVERNANCE MEASURES, IN THE ABSENCE OF WHICH, STOCKHOLDERS MAY
HAVE MORE LIMITED PROTECTIONS AGAINST INTERESTED DIRECTOR TRANSACTIONS,
CONFLICTS OF INTEREST AND SIMILAR MATTERS.
Recent Federal legislation, including the Sarbanes-Oxley Act of 2002, has
resulted in the adoption of various corporate governance measures designed to
promote the integrity of the corporate management and the securities markets.
Some of these measures have been adopted in response to legal requirements.
Others have been adopted by companies in response to the requirements of
national securities exchanges, such as the NYSE or The NASDAQ Stock Market, on
which their securities are listed. Among the corporate governance measures that
are required under the rules of national securities exchanges are those that
address board of directors' independence, audit committee oversight, and the
adoption of a code of ethics. Our Board of Directors is comprised of one
individual who is also our executive officer. Our executive officer makes
decisions on all significant corporate matters such as the approval of terms of
the compensation of our executive officer and the oversight of the accounting
functions.
Although we have adopted a Code of Ethics and Business Conduct, we have not yet
adopted any of these other corporate governance measures and, since our
securities are not yet listed on a national securities exchange, we are not
required to do so. We have not adopted corporate governance measures such as an
audit or other independent committees of our board of directors as we presently
do not have any independent directors. If we expand our board membership in
future periods to include additional independent directors, we may seek to
establish an audit and other committees of our board of directors. It is
possible that if our Board of Directors included independent directors and if we
were to adopt some or all of these corporate governance measures, stockholders
would benefit from somewhat greater assurances that internal corporate decisions
were being made by disinterested directors and that policies had been
implemented to define responsible conduct. For example, in the absence of audit,
nominating and compensation committees comprised of at least a majority of
independent directors, decisions concerning matters such as compensation
packages to our senior officers and recommendations for director nominees may be
made by a majority of directors who have an interest in the outcome of the
matters being decided. Prospective investors should bear in mind our current
lack of corporate governance measures in formulating their investment decisions.
CODE OF BUSINESS CONDUCT AND ETHICS
In December 2009 we adopted a Code of Ethics and Business Conduct which is
applicable to our future employees and which also includes a Code of Ethics for
our CEO and principal financial officers and persons performing similar
functions. A code of ethics is a written standard designed to deter wrongdoing
and to promote
41
o honest and ethical conduct,
o full, fair, accurate, timely and understandable disclosure in regulatory
filings and public statements,
o compliance with applicable laws, rules and regulations,
o the prompt reporting violation of the code, and
o accountability for adherence to the code.
A copy of our Code of Business Conduct and Ethics has been filed with the
Securities and Exchange Commission as an exhibit to our S-1 filing. Any person
desiring a copy of the Code of Business Conduct and Ethics, can obtain one by
going to Edgar and looking at the attachments to our S-1.
BACKGROUND OF OFFICERS AND DIRECTORS
Ron Warren, President, CEO, Director, Secretary/treasurer
RESUME
Ron Warren has over 20 years of experience in senior level positions with
publicly traded companies listed on the NYSE, Nasdaq and OTCBB. Prior to joining
Intake Communications, Mr. Warren was Vice President of Investor Relations,
Corporate Communications and Secretary of uVuMobile, Inc. in starting in
December 2003. In May 2008, Warren was appointed Chief Financial Officer of the
uVuMobile. Mr. Warren is a senior level communications professional with a broad
background in financial, technical and regulatory issues. His experience
includes communications for high growth publicly held companies, national and
multicultural audiences. Prior to joining uVuMobile, Mr. Warren held various
Investor Relations and Corporate Communications positions at Beazer Homes,
Theragenics Corp., Rollins, Inc., and Advanced Telecommunications. Mr. Warren is
an active member of the National Investor Relations Institute (NIRI) and served
as the Atlanta Chapter President from 2002 to 2003.
CONFLICTS OF INTEREST
At the present time, we do not foresee a direct conflict of interest with our
sole officer and director. The only conflict that we foresee is Ron Warren's
devotion of time to projects that do not involve us. Currently, Mr. Warren is
working as a consultant with one other wireless company providing technical
support. In the event that Ron Warren ceases devoting time to our operations, he
has agreed to resign as an officer and director.
EXECUTIVE COMPENSATION
Ron Warren will not be taking any compensation until the Company has raised
$250,000 in working capital or has sales in excess of $500,000.
SUMMARY OF COMPENSATION
We did not pay any salaries in 2009. We do not anticipate beginning to pay
salaries until we have adequate funds to do so. There are no stock option plans,
retirement, pension, or profit sharing plans for the benefit of our officers and
director other than as described herein.
42
SUMMARY COMPENSATION TABLE
The following table provides certain summary information concerning cash and
certain other compensation we paid to our Chief Executive Officer for the fiscal
year ending December 31, 2009.
Non-Equity Non-
Incentive Qualified
Stock Option Plan Deferred All Other
Name & Fiscal Salary Bonus Award(s) Award(s) Compensation Compensation Compensation Total
Principal Position Year ($) ($) ($) ($) ($) Earnings ($) ($) ($)
- ------------------ ------ ------ ----- -------- -------- ------------ ------------ ------------ -----
Ron Warren 2009 $0 - - - - - - 0
Chief Executive Officer
Number of Percentage
Title of Class Name Shares Owned of Shares(1)
- -------------- ---- ------------ ------------
Shares of Common Stock Ron Warren (2) 9,000,000 100%
4655 Gran River Glen
Duluth, GA 30096
__________________
(1) Based on 9,000,000 shares outstanding as of December 31, 2009.
(2) The person named above may be deemed to be a "parent" and "promoter" of our
company, within the meaning of such terms under the Securities Act of 1933, as
amended, by virtue of his direct and indirect stock holdings. Ron Warren is the
only "promoter" of our company.
We have no employment agreements with our sole Executive Officer and Director.
DIRECTOR COMPENSATION
Mr. Ron Warren a member of our Board of Directors is also our executive officer.
We do not pay fees to directors for attendance at meetings of the Board of
Directors or of committees; however, we may adopt a policy of making such
payments in the future. We will reimburse out-of-pocket expenses incurred by
directors in attending board and committee meetings.
LONG-TERM INCENTIVE PLAN AWARDS
We do not have any long-term incentive plans including options and SARs that
provide compensation intended to serve as incentive for performance.
EMPLOYMENT AGREEMENTS
At this time, InTake Communications has not entered into any employment
agreements with our sole officer and director. If there is sufficient cash flow
available from our future operations, the Company may in the future enter into
employment agreements with our sole officer and director, or future key staff
members.
43
INDEMNIFICATION
Under our Articles of Incorporation and Bylaws of the corporation, we may
indemnify an officer or director who is made a party to any proceeding,
including a lawsuit, because of his position, if he acted in good faith and in a
manner he reasonably believed to be in our best interest. We may advance
expenses incurred in defending a proceeding. To the extent that the officer or
director is successful on the merits in a proceeding as to which he is to be
indemnified, we must indemnify him against all expenses incurred, including
attorney's fees. With respect to a derivative action, indemnity may be made only
for expenses actually and reasonably incurred in defending the proceeding, and
if the officer or director is judged liable, only by a court order. The
indemnification is intended to be to the fullest extent permitted by the laws of
the State of Florida
Regarding indemnification for liabilities arising under the Securities Act of
1933, which may be permitted to directors or officers under Florida law, we are
informed that, in the opinion of the Securities and Exchange Commission,
indemnification is against public policy, as expressed in the Act and is,
therefore, unenforceable.
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of the date of this prospectus, the total
number of shares owned beneficially by our sole officer and director, and key
employees, individually and as a group, and the present owners of 5% or more of
our total outstanding shares. The stockholder listed below has direct ownership
of his shares and possesses sole voting and dispositive power with respect to
the shares.
Number of Percentage
Title of Class Name Shares Owned of Shares(1)
- -------------- ---- ------------ ------------
Shares of Common Stock Ron Warren (2) 9,000,000 100%
4655 Gran River Glen
Duluth, GA 30096
__________________
(1) Based on 9,000,000 shares outstanding as of December 31, 2009.
(2) The person named above may be deemed to be a "parent" and "promoter" of our
company, within the meaning of such terms under the Securities Act of 1933, Ron
Warren is the only "promoter" of our company.
For the period ended December 31, 2009, a total of 9,000,000 shares of common
stock were issued to our sole officer and director, all of which are restricted
securities, as defined in Rule 144 of the Rules and Regulations of the SEC
promulgated under the Securities Act. Under Rule 144, the shares can be publicly
sold, subject to volume restrictions and restrictions on the manner of sale,
commencing one year after their acquisition. Under Rule 144, a shareholder can
sell up to 1% of total outstanding shares every three months in brokers'
transactions. Shares purchased in this offering, which will be immediately
resalable, and sales of all of our other shares after applicable restrictions
expire, could have a depressive effect on the market price, if any, of our
common stock and the shares we are offering.
44
Our sole officer and director will continue to own the majority of our common
stock after the offering, regardless of the number of shares sold. Since he will
continue control our company after the offering, investors in this offering will
be unable to change the course of our operations. Thus, the shares we are
offering lack the value normally attributable to voting rights. This could
result in a reduction in value of the shares you own because of their
ineffective voting power. None of our common stock is subject to outstanding
options, warrants, or securities convertible into common stock.
The company is hereby registering 3,000,000 of its common shares, in addition to
the 9,000,000 shares currently issued and outstanding. The price per share is
$0.01 (please see "Plan of Distribution" below).
The 9,000,000 shares currently issued and outstanding were acquired by our sole
officer and director for the period ended, December 31, 2009. We issued a total
of 9,000,000 common shares for consideration of $9,000, which was accounted for
as a purchase of common stock. The Company received $6,000 cash and a $3,000
subscription receivable. The Company received the cash from the subscription
receivable on January 4th, 2010.
DESCRIPTION OF SECURITIES
In the event the company receives payment for the sale of their shares, InTake
Communications will receive all of the proceeds from such sales. InTake
Communications is bearing all expenses in connection with the registration of
the shares of the Company.
COMMON STOCK
The authorized common stock is two hundred and fifty million (250,000,000)
shares with a par value of $.0001 for an aggregate par value of twenty five
thousand dollars ($25,000).
* have equal ratable rights to dividends from funds legally available if and
when declared by our Board of Directors;
* are entitled to share ratably in all of our assets available for
distribution to holders of common stock upon liquidation, dissolution or winding
up of our affairs;
* do not have preemptive, subscription or conversion rights and there are no
redemption or sinking fund provisions or rights;
* and are entitled to one non-cumulative vote per share on all matters on
which stockholders may vote.
We refer you to the Bylaws of our Articles of Incorporation and the applicable
statutes of the State of Florida for a more complete description of the rights
and liabilities of holders of our securities.
NON-CUMULATIVE VOTING
Holders of shares of our common stock do not have cumulative voting rights,
which means that the holders of more than 50% of the outstanding shares, voting
for the election of directors, can elect all of the directors to be elected, if
they so choose, and, in that event, the holders of the remaining shares will not
be able to elect any of our directors. After this offering is completed, present
stockholders will own approximately 75% of our outstanding shares.
45
CASH DIVIDENDS
As of the date of this prospectus, we have not declared or paid any cash
dividends to stockholders. The declaration of any future cash dividend will be
at the discretion of our Board of Directors and will depend upon our earnings,
if any, our capital requirements and financial position, our general economic
conditions, and other pertinent conditions. It is our present intention not to
pay any cash dividends in the foreseeable future, but rather to reinvest
earnings, if any, in our business operations.
REPORTING
After we complete this offering, we will not be required to furnish you with an
annual report. Further, we will not voluntarily send you an annual report. We
will be required to file reports with the SEC under section 15(d) of the
Securities Act. The reports will be filed electronically. The reports we will be
required to file are Forms 10-K, 10-Q, and 8-K. You may read copies of any
materials we file with the SEC at the SEC's Public Reference Room at 100 F
Street, N.E., Washington, D.C. 20549. You may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The
SEC also maintains an Internet site that will contain copies of the reports we
file electronically. The address for the Internet site is www.sec.gov.
STOCK TRANSFER AGENT
We have not engaged the services of a transfer agent at this time. However,
within the next twelve months we anticipate doing so. Until such a time a
transfer agent is retained, InTake Communications will act as its own transfer
agent.
STOCK OPTION PLAN
The Board of Directors of InTake Communications has not adopted a stock option
plan ("Stock Option Plan"). The company has no plans to adopt a stock option
plan but may choose to do so in the future. If such a plan is adopted, this plan
may be administered by the board or a committee appointed by the board (the
"Committee"). The committee would have the power to modify, extend or renew
outstanding options and to authorize the grant of new options in substitution
therefore, provided that any such action may not, without the written consent of
the optionee, impair any rights under any option previously granted. InTake
Communications may develop an incentive based stock option plan for its officers
and directors and may reserve up to 10% of its outstanding shares of common
stock for that purpose.
LITIGATION
We are not a party to any pending litigation and none is contemplated or
threatened.
LEGAL MATTERS
The validity of the securities offered by this prospectus will be passed upon
for us by Schneider Weinberger & Beilly LLP.
EXPERTS
Our financial statements have been audited for the period ending December 31,
2009 by Seale and Beers, as set forth in their report included in this
prospectus. Their report is given upon their authority as experts in accounting
and auditing.
46
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS December 31, 2009
Auditors' Report .......................................................... F-2
Balance Sheet ............................................................. F-3
Statement of Operations ................................................... F-4
Statement of Stockholders' Equity (Deficit) ............................... F-5
Statement of Cash Flows ................................................... F-6
Notes to the Financial Statements ......................................... F-7
F-1
SEALE AND BEERS, CPAs
PCAOB & CPAB REGISTERED AUDITORS
- --------------------------------
www.sealebeers.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-------------------------------------------------------
TO THE BOARD OF DIRECTORS
INTAKE COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
We have audited the accompanying balance sheets of InTake Communications, Inc.
(A Development Stage Company) as of December 31, 2009, and the related
statements of operations, stockholders' equity (deficit) and cash flows for the
period from inception on December 24, 2009 through December 31, 2009. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conduct our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits 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
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of InTake Communications, Inc. (A
Development Stage Company) as of December 31, 2009, and the related statements
of operations, stockholders' equity (deficit) and cash flows for the period from
inception on December 24, 2009 through December 31, 2009, in conformity with
accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 6 to the
financial statements, the Company has an accumulated deficit of $3,579, which
raises substantial doubt about its ability to continue as a going concern.
Management's plans concerning these matters are also described in Note 6. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/S/ SEALE AND BEERS, CPAS
Seale and Beers, CPAs
Las Vegas, Nevada
January 14, 2010
50 S. Jones Blvd. Ste 202 Las Vegas, NV 89107 (888) 727-8251 Fax: (888) 782-2351
- --------------------------------------------------------------------------------
F-2
InTake Communications, Inc.
(A Development Stage Company)
Balance Sheet
ASSETS
------
AS OF
DECEMBER 31,
2009
------------
CURRENT ASSETS
Cash and cash equivalents ..................................... $ 6,000
-----------
Total current assets ........................................ 6,000
-----------
-----------
TOTAL ASSETS .................................................... $ 6,000
===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
-------------------------------------------------
CURRENT LIABILITIES
Accounts Payable & Accrued Liabilities ........................ 3,579
-----------
Total liabilities ........................................... 3,579
===========
STOCKHOLDERS' EQUITY (DEFICIENCY)
Capital Stock (Note 4)
Authorized:
250,000,000 common shares, $0.0001 par value
Issued and outstanding shares:
9,000,000 ................................................. $ 900
Additional paid-in capital .................................. 8,100
Stock subscriptions receivable .............................. (3,000)
Deficit accumulated during the development stage ............ (3,579)
-----------
Total Stockholders' Equity (Deficiency) ..................... 2,421
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ...................... $ 6,000
===========
The accompanying notes are an integral part of these financial statements.
F-3
InTake Communications, Inc.
(A Development Stage Company)
Statement of Operations
FOR THE PERIOD
FROM INCEPTION
DECEMBER 24,
2009 TO
DECEMBER 31,
2009
--------------
REVENUES ..................................................... $ 0
--------------
EXPENSES
General & Administrative ................................... $ 79
Professional Fees .......................................... $ 3,500
--------------
Loss Before Income Taxes ..................................... $ (3,579)
--------------
Provision for Income Taxes ................................... -
--------------
Net Loss ..................................................... $ (3,579)
==============
PER SHARE DATA:
Basic and diluted loss per common share .................... $ -
==============
Basic and diluted weighted average common shares outstanding 9,000,000
==============
The accompanying notes are an integral part of these financial statements.
F-4
InTake Communications, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity (Deficiency)
Deficit
Accumulated
Common Stock Additional Stock During the
------------------ Paid-in Subscriptions Development
Shares Amount Capital Receivable Stage Total
--------- ------ ---------- ------------- ----------- -------
Inception - December 24, 2009 - $ - $ - $ - $ - $ -
Common shares issued to
Founder for cash at
$0.001 per share
(par value $0.0001) on
December 24, 2009 ........ 9,000,000 900 8,100 (3,000) - 6,000
Loss for the period
from inception on
December 24, 2009 to
December 31, 2009 ........ - - - - (3,579) (3,579)
--------- ------ ---------- ---------- ----------- -------
Balance - December 31, 2009 . 9,000,000 900 8,100 3,000 (3,579) 2,421
========= ====== ========== ========== =========== =======
The accompanying notes are an integral part of these financial statements.
F-5
InTake Communications, Inc.
(A Development Stage Company)
Statement of Cash Flows
FOR THE PERIOD
FROM INCEPTION
DECEMBER 24,
2009 TO
DECEMBER 31,
2009
--------------
OPERATING ACTIVITIES
Loss for the period ........................................ $ (3,579)
-------------
Changes in Operating Assets and Liabilities:
(Increase) decrease in prepaid expenses .................. -
Increase (decrease) in accounts payable .................. 3,579
Increase (decrease) in accrued liabilities ............... -
-------------
Net cash used in operating activities ...................... -
-------------
INVESTING ACTIVITIES
-------------
Net cash provide by Investing activities ................... -
-------------
FINANCING ACTIVITIES
Common stock issued for cash ............................... 6,000
-------------
Net cash provided by financing activities .................. 6,000
-------------
INCREASE IN CASH AND CASH EQUIVALENTS ........................ 6,000
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ............. 0
-------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ................... $ 6,000
=============
Supplemental Cash Flow Disclosures:
Cash paid for:
Interest expense ......................................... $ -
=============
Income taxes ............................................. $ -
=============
The accompanying notes are an integral part of these financial statements.
F-6
INTAKE COMMUNICATIONS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(DECEMBER 31, 2009)
NOTE 1. GENERAL ORGANIZATION AND BUSINESS
Intake Communications, Inc. ("Intake Communications, Inc.") is a development
stage company, incorporated in the State of Florida on December 24, 2009 to
provide software to companies to help them market and sell their music and
entertainment content to consumers. The music and entertainment content is audio
and video clips of concerts, artist interviews, and highlights. Based on the
customer request, the software will extract the music and entertainment content
from the customer's music and entertainment library and stream that content to
the customer. This content is referred to as "digital assets". The customer can
request the content from any internet device such as a computer, laptop or
mobile device.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
Accounting Basis
- ----------------
The Company is currently a development stage enterprise reporting under the
provisions of FASB ASC 915, Development Stage Entity. These financial statements
are prepared on the accrual basis of accounting in conformity with accounting
principles generally accepted in the United States of America.
Cash and Cash Equivalents
- -------------------------
Cash and cash equivalents are reported in the balance sheet at cost, which
approximates fair value. For the purpose of the financial statements cash
equivalents include all highly liquid investments with an original maturity of
three months or less when purchased.
Earnings (Loss) per Share
- -------------------------
The Company adopted FASB ASC 260, Earnings per Share. Basic earnings (loss) per
share is calculated by dividing the Company's net income available to common
shareholders by the weighted average number of common shares outstanding during
the year. Diluted earnings (loss) per share is calculated by dividing the
Company's net income (loss) available to common shareholders by the diluted
weighted average number of shares outstanding during the year. The diluted
weighted average number of shares outstanding is the basic weighted number of
shares adjusted as of the first of the year for any potentially dilutive debt or
equity. There were no diluted or potentially diluted shares outstanding for all
periods presented.
Dividends
- ---------
The Company has not adopted any policy regarding payment of dividends. No
dividends have been paid during the period shown, and none are contemplated in
the near future.
F-7
INTAKE COMMUNICATIONS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(DECEMBER 31, 2009)
Income Taxes
- ------------
The Company adopted FASB ASC 740, Income Taxes, at its inception. Deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred tax
assets, including tax loss and credit carry forwards, and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date.
Deferred income tax expense represents the change during the period in the
deferred tax assets and deferred tax liabilities. The components of the deferred
tax assets and liabilities are individually classified as current and
non-current based on their characteristics. Deferred tax assets are reduced by a
valuation allowance when, in the opinion of management, it is more likely than
not that some portion or all of the deferred tax assets will not be realized. No
deferred tax assets or liabilities were recognized as of December 31, 2009.
Advertising
- -----------
The Company will expense advertising as incurred. Since inception, the
advertising dollars spent have been $0.00.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
Revenue and Cost Recognition
- ----------------------------
The Company has no current source of revenue; therefore the Company has not yet
adopted any policy regarding the recognition of revenue or cost.
Property
- --------
The Company does not own any real estate or other properties. The Company's
office is located 4655 Gran River Glen, Duluth GA 30096. Our contact number is
678.516.5910. The business office is located at the home of Ron Warren, the CEO
of the Company, at no charge to the Company.
F-8
INTAKE COMMUNICATIONS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(DECEMBER 31, 2009)
NOTE 3. INCOME TAXES:
The Company provides for income taxes under the provisions of FASB ASC 740,
Income Taxes. FASB ASC Topic 740 requires the use of an asset and liability
approach in accounting for income taxes. Deferred tax assets and liabilities are
recorded based on the differences between the financial statement and tax bases
of assets and liabilities and the tax rates in effect currently.
ASC Topic 718 requires the reduction of deferred tax assets by a valuation
allowance if, based on the weight of available evidence, it is more likely than
not that some or all of the deferred tax assets will not be realized. In the
Company's opinion, it is uncertain whether they will generate sufficient taxable
income in the future to fully utilize the net deferred tax asset.
The components of the Company's income tax expenses at December 31, 2009 are as
follows:
Year Ended December 31, 2009
----------------------------
Deferred Tax Asset ............... $ -
Valuation Allowance .............. -
Current Taxes Payable ............ -
Income Tax Expense ............... -
------
The Company has filed no income tax returns since inception.
At December 31, 2009, the Company had estimated net loss carry forwards of
approximately $3,000 which expires through its tax year ending 2029. Utilization
of these net operating loss card forwards may be limited in accordance with IRCD
Section 3.82 in the event of certain shifts in ownership.
NOTE 4. STOCKHOLDERS' EQUITY
Common Stock
- ------------
On December 24, 2009, the Company issued 9,000,000 of its $0.0001 par value
common stock at $0.001 per share for $6,000 cash and $3,000 in a subscription
receivable to the founder of the Company. The issuance of the shares was made to
the sole officer and director of the Company and an individual who is a
sophisticated and accredited investor, therefore, the issuance was exempt from
registration of the Securities Act of 1933 by reason of Section 4 (2) of that
Act.
There are 250,000,000 Common Shares at $0.0001 par value authorized with
9,000,000 shares issued and outstanding at December 31, 2009.
F-9
INTAKE COMMUNICATIONS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(DECEMBER 31, 2009)
NOTE 5. RELATED PARTY TRANSACTIONS
An officer and director of the Company are involved in business activities
outside of the company and may, in the future, become involved in other business
opportunities that become available. They may face a conflict in selecting
between the Company and other business interests. The Company has not formulated
a policy for the resolution of such conflicts.
NOTE 6. GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. For the period December 24, 2009 (date
of inception) through December 31, 2009 the Company has had a net loss of
$3,579. As of December 31, 2009, the Company has not emerged from the
development stage. In view of these matters, recoverability of any asset amounts
shown in the accompanying financial statements is dependent upon the Company's
ability to begin operations and to achieve a level of profitability. Since
inception, the Company has financed its activities from the sale of equity
securities. The Company intends on financing its future development activities
and its working capital needs largely from loans and the sale of public equity
securities with some additional funding from other traditional financing
sources, including term notes, until such time that funds provided by
operations, if ever, are sufficient to fund working capital requirements.
NOTE 7. THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS
Below is a listing of the most recent accounting standards and their effect on
the Company.
Recent Accounting Pronouncements
- --------------------------------
In January 2010, the FASB issued Accounting Standards Update 2010-02,
Consolidation (Topic 810): Accounting and Reporting for Decreases in Ownership
of a Subsidiary. This amendment to Topic 810 clarifies, but does not change, the
scope of current US GAAP. It clarifies the decrease in ownership provisions of
Subtopic 810-10 and removes the potential conflict between guidance in that
Subtopic and asset derecognition and gain or loss recognition guidance that may
exist in other US GAAP. An entity will be required to follow the amended
guidance beginning in the period that it first adopts FAS 160 (now included in
Subtopic 810-10). For those entities that have already adopted FAS 160, the
amendments are effective at the beginning of the first interim or annual
reporting period ending on or after December 15, 2009. The amendments should be
applied retrospectively to the first period that an entity adopted FAS 160. The
Company does not expect the provisions of ASU 2010-02 to have a material effect
on the financial position, results of operations or cash flows of the Company.
F-10
INTAKE COMMUNICATIONS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(DECEMBER 31, 2009)
In January 2010, the FASB issued Accounting Standards Update 2010-01, Equity
(Topic 505): Accounting for Distributions to Shareholders with Components of
Stock and Cash (A Consensus of the FASB Emerging Issues Task Force). This
amendment to Topic 505 clarifies the stock portion of a distribution to
shareholders that allows them to elect to receive cash or stock with a limit on
the amount of cash that will be distributed is not a stock dividend for purposes
of applying Topics 505 and 260. Effective for interim and annual periods ending
on or after December 15, 2009, and would be applied on a retrospective basis.
The Company does not expect the provisions of ASU 2010-01 to have a material
effect on the financial position, results of operations or cash flows of the
Company.
In December 2009, the FASB issued Accounting Standards Update 2009-17,
Consolidations (Topic 810): Improvements to Financial Reporting by Enterprises
Involved with Variable Interest Entities. This Accounting Standards Update
amends the FASB Accounting Standards Codification for Statement 167. (See FAS
167 effective date below)
In December 2009, the FASB issued Accounting Standards Update 2009-16, Transfers
and Servicing (Topic 860): Accounting for Transfers of Financial Assets. This
Accounting Standards Update amends the FASB Accounting Standards Codification
for Statement 166. (See FAS 166 effective date below)
In October 2009, the FASB issued Accounting Standards Update 2009-15, Accounting
for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance
or Other Financing. This Accounting Standards Update amends the FASB Accounting
Standard Codification for EITF 09-1. (See EITF 09-1 effective date below) In
October 2009, the FASB issued Accounting Standards Update 2009-14, Software
(Topic 985): Certain Revenue Arrangements That Include Software Elements. This
update changed the accounting model for revenue arrangements that include both
tangible products and software elements. Effective prospectively for revenue
arrangements entered into or materially modified in fiscal years beginning on or
after June 15, 2010. Early adoption is permitted. The Company does not expect
the provisions of ASU 2009-14 to have a material effect on the financial
position, results of operations or cash flows of the Company.
In October 2009, the FASB issued Accounting Standards Update 2009-13, Revenue
Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements. This update
addressed the accounting for multiple-deliverable arrangements to enable vendors
to account for products or services (deliverables) separately rather than a
combined unit and will be separated in more circumstances that under existing US
GAAP. This amendment has eliminated that residual method of allocation.
Effective prospectively for revenue arrangements entered into or materially
modified in fiscal years beginning on or after June 15, 2010. Early adoption is
permitted. The Company does not expect the provisions of ASU 2009-13 to have a
material effect on the financial position, results of operations or cash flows
of the Company.
F-11
INTAKE COMMUNICATIONS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(DECEMBER 31, 2009)
In September 2009, the FASB issued Accounting Standards Update 2009-12, Fair
Value Measurements and Disclosures (Topic 820): Investments in Certain Entities
That Calculate Net Asset Value per Share (or Its Equivalent). This update
provides amendments to Topic 820 for the fair value measurement of investments
in certain entities that calculate net asset value per share (or its
equivalent). It is effective for interim and annual periods ending after
December 15, 2009. Early application is permitted in financial statements for
earlier interim and annual periods that have not been issued. The Company does
not expect the provisions of ASU 2009-12 to have a material effect on the
financial position, results of operations or cash flows of the Company.
In June 2009, the FASB issued SFAS No. 168 (ASC Topic 105), "The FASB Accounting
Standards Codification and the Hierarchy of Generally Accepted Accounting
Principles - a replacement of FASB Statement No. 162" ("SFAS No. 168"). Under
SFAS No. 168 the "FASB Accounting Standards Codification" ("Codification")
became the source of authoritative US GAAP to be applied by nongovernmental
entities. Rules and interpretive releases of the Securities and Exchange
Commission ("SEC") under authority of federal securities laws are also sources
of authoritative GAAP for SEC registrants. SFAS No. 168 was effective for
financial statements issued for interim and annual periods ending after
September 15, 2009. On the effective date, the Codification superseded all
then-existing non-SEC accounting and reporting standards. All other
non-grandfathered non-SEC accounting literature not included in the Codification
became non-authoritative. SFAS No. 168 was effective for the Company's interim
quarterly period beginning July 1, 2009. The Company does not expect the
adoption of SFAS No. 168 to have an impact on the financial statements other
than current references to BAAP.
In June 2009, the FASB issued SFAS No. 167 (ASC Topic 810), "Amendments to FASB
Interpretation No. 46(R) ("SFAS 167"). SFAS 167 amends the consolidation
guidance applicable to variable interest entities. The provisions of SFAS 167
significantly affect the overall consolidation analysis under FASB
Interpretation No. 46(R). SFAS 167 is effective as of the beginning of the first
fiscal year that begins after November 15, 2009. SFAS 167 was effective for the
Company beginning in 2010. The Company does not expect the provisions of SFAS
167 to have a material effect on the financial position, results of operations
or cash flows of the Company.
In June 2009, the FASB issued SFAS No. 166, (ASC Topic 860) "Accounting for
Transfers of Financial Assets--an amendment of FASB Statement No. 140" ("SFAS
166"). The provisions of SFAS 166, in part, amend the derecognition guidance in
FASB Statement No. 140, eliminate the exemption from consolidation for
qualifying special-purpose entities and require additional disclosures. SFAS 166
is effective for financial asset transfers occurring after the beginning of an
entity's first fiscal year that begins after November 15, 2009. The Company does
not expect the provisions of SFAS 166 to have a material effect on the financial
position, results of operations or cash flows of the Company.
F-12
INTAKE COMMUNICATIONS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(DECEMBER 31, 2009)
NOTE 8. CONCENTRATIONS OF RISKS
Cash Balances
- -------------
The Company maintains its cash in institutions insured by the Federal Deposit
Insurance Corporation (FDIC). All other deposit accounts at FDIC-insured
institutions were insured up to at least $250,000 per depositor until December
31, 2009. On January 1, 2010, FDIC deposit insurance for all deposit accounts,
except for certain retirement accounts, returned to $100,000 per depositor. Our
cash balance at December 31, 2009 was below the FDIC insurance threshold.
NOTE 9. SUBSEQUENT EVENTS
None.
The Company has evaluated subsequent events through January 14, 2010, the date
which the financial statements were available to be issued, and no such events
have occurred.
F-13
PART II. INFORMATION NOT REQUIRED IN THE PROSPECTUS
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The registrant will pay for all expenses incurred by this offering. Whether or
not all of the offered shares are sold, these expenses are estimated as follows:
SEC Filing Fee and Printing .. $ 1,000 *
Transfer Agent ............... 0
-------
TOTAL ................... $ 1,000
-------
* estimate
RECENT SALES OF UNREGISTERED SECURITIES
(a) Prior sales of common shares
InTake Communications, Inc. is authorized to issue up to 250,000,000 shares of
common stock with a par value of $0.0001. For the period ended December 31,
2009, we had issued 9,000,000 common shares to our sole officer and director for
a total consideration of $9,000. The consideration was $6,000 in cash and a
subscription receivable for $3,000. The issuance of the shares was made to the
sole officer and director of the Company and an individual who is a
sophisticated and accredited investor, therefore, the issuance was exempt from
registration of the Securities Act of 1933 by reason of Section 4 (2) of that
Act.
InTake Communications, Inc. is not listed for trading on any securities exchange
in the United States, and there has been no active market in the United States
or elsewhere for the common shares.
During the past year, InTake Communications, Inc. has sold the following
securities which were not registered under the Securities Act of 1933, as
amended:
For the period ended December 31, 2009, InTake Communications, Inc. issued
9,000,000 shares of common stock to the sole officer and director for cash
proceeds of $6,000 and a subscription receivable of $3,000 at 0.001 per share.
EXHIBITS
The following exhibits are filed as part of this registration statement,
pursuant to Item 601 of Regulation S-K. All exhibits have been previously filed
unless otherwise noted.
EXHIBIT NO. DOCUMENT DESCRIPTION
- ----------- --------------------
3.1 Articles of Incorporation of InTake Communications, Inc.*
3.2 Bylaws of InTake Communications, Inc.*
4.1 Specimen Stock Certificate of InTake Communications, Inc.*
5.1 Opinion of Counsel (to be supplied by amendment).
14.1 Code of Business Conduct and Ethics.*
23.1 Consent of Auditors.*
23.2 Consent of Counsel (to be supplied by amendment).
99.1 Subscription Documents and Procedure of InTake Communications,
Inc.*
_________________
* Filed herewith
II-1
(B) DESCRIPTION OF EXHIBITS
EXHIBIT 3.1 Articles of Incorporation of InTake Communications, Inc.
EXHIBIT 3.2 Bylaws of InTake Communications, Inc.
EXHIBIT 4.1 Specimen Stock Certificate of InTake Communications, Inc.
EXHIBIT 5.1
EXHIBIT 14.1 Code of Business Conduct and Ethics.
EXHIBIT 23.1 Consent of Auditors
EXHIBIT 23.2
EXHIBIT 99.1 Subscription Documents and Procedure of InTake Communications,
Inc.
UNDERTAKINGS
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
i. To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
ii. To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in the volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more
than 20% change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement.
iii. To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
2. That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any of
the securities being registered that remain unsold at the termination of
the offering.
II-2
4. That, for the purpose of determining liability under the Securities Act of
1933 to any purchaser:
i. If the registrant is subject to Rule 430C, each prospectus filed
pursuant to Rule 424(b) as part of a registration statement relating
to an offering, other than registration statements relying on Rule
430B or other than prospectuses filed in reliance on Rule 430A,
shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness.
Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part
of the registration statement will, as to a purchaser with a time of
contract of sale prior to such first use, supersede or modify any
statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any such
document immediately prior to such date of first use.
5. That, for the purpose of determining liability of the registrant under the
Securities Act of 1933 to any purchaser in the initial distribution of the
securities: The undersigned registrant undertakes that in a primary
offering of securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell
the securities to the purchaser, if the securities are offered or sold to
such purchaser by means of any of the following communications, the
undersigned registrant will be a seller to the purchaser and will be
considered to offer or sell such securities to such purchaser:
i. Any preliminary prospectus or prospectus of the undersigned
registrant relating to the offering required to be filed pursuant to
Rule 424;
ii. Any free writing prospectus relating to the offering prepared by or
on behalf of the undersigned registrant or used or referred to by
the undersigned registrant;
iii. The portion of any other free writing prospectus relating to the
offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the
undersigned registrant; and
iv. Any other communication that is an offer in the offering made by the
undersigned registrant to the purchaser.
Insofar as indemnification for liabilities arising under the Securities Act of
1933, may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-3
SIGNATURES
Pursuant to 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 this Form S-1. Furthermore, the registrant has
authorized this registration statement and has duly caused this Form S-1
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Duluth GA 30096, on this 2nd day of February, 2010.
InTake Communications, Inc.
/s/ Ron Warren
----------
Ron Warren
President and Director
Principal Executive Officer
Principal Financial Officer
Principal Accounting Officer
Know all men by these present, that each person whose signature appears below
constitutes and appoints Ron Warren, as agent, with full power of substitution,
for his and in his name, place and stead, in any and all capacities, to sign any
and all amendments, including post-effective amendments, to this registration
statement, and to file the same, therewith, with the Securities and Exchange
Commission, and to make any and all state securities law filings, granting unto
said attorney-in-fact and agent, full power and authority to do and perform each
and every act and thing requisite or necessary to be done in about the premises,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying the confirming all that said attorney-in-fact and agent, or any
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Form S-1
registration statement has been signed by the following persons in the
capacities and on the dates indicated:
/s/ Ron Warren February 2, 2010
----------
Ron Warren
President and Director
Principal Executive Officer
Principal Financial Officer
Principal Accounting Officer
II-4