CALCULATION OF REGISTRATION FEE
Title of each class of securities to be registered | | Amount to be registered [3] | | | Proposed maximum offering price per unit | | | Proposed maximum aggregate offering price | | | Amount of registration fee | |
| | | | | | | | | | | | |
Common | | | 4,000,000 | | | $ | 0.05 [1] | | | $ | 200,000 | | | $ | 23.24 [2] | |
[1] No exchange or over-the-counter market exists for My Cloudz, Inc. common stock. The offering price has been arbitrarily determined 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] Fee calculated in accordance with Rule 457(o) of the Securities Act of 1933, as amended “Securities Act” (Estimated for the sole purpose of calculating the registration fee).
[3] Pursuant to Rule 416 under the Securities Act of 1933, as amended, the securities being registered hereunder include such indeterminate number of additional shares of common stock as may be issued after the date hereof as a result of stock splits, stock dividends or similar transactions.
The Registrant hereby amends this Registration Statement on such date as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that the 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.
We are an “Emerging Growth Company” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”), and will therefore be subject to reduced public company reporting requirements. Investing in our securities involves a high degree of risk. See Risk Factors, beginning on page 7.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE SELLING STOCKHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING OFFERS TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE OF THESE SECURITIES IS NOT PERMITTED.
SUBJECT TO COMPLETION DATED ______________________, 2015
PRELIMINARY PROSPECTUS
My Cloudz, Inc.
Up to 4,000,000 Share of Common Stock
We are selling up to 4,000,000 shares of our common stock, par value $0.001 per share. Prior to this Offering, no public market has existed for the common stock of My Cloudz, Inc. Upon completion of this Offering, we will attempt to have the shares quoted on the Over the Counter-Bulletin Board ("OTCBB"), operated by FINRA (Financial Industry Regulatory Authority). There is no assurance that the Shares will ever be quoted on the OTCBB. To be quoted on the OTCBB, a market maker must apply to make a market in our common stock. As of the date of this Prospectus, we have not made any arrangement with any market makers to quote our shares.
The offering is being made on a self-underwritten, “best efforts” basis. The shares will be sold on our behalf by our President, Sommay Vongsa. He will not receive any commissions or proceeds for selling the shares on our behalf. There is no minimum number of shares required to be purchased by each investor.
All of the shares being registered for sale hereby will be sold at a price per share of $0.05 for the duration of the offering. Assuming all shares being offered are sold, we will receive $200,000 in gross proceeds. There is no minimum amount we are required to raise from this offering and any funds received will be immediately available to us; the funds raised under this offering will not be held in trust or in any escrow or similar account.
There is no guarantee that this offering will successfully raise enough funds to institute our business plan. Additionally, there is no guarantee that a public market will ever develop and you may be unable to sell your shares.
Shares Offered by the Company | | Price to the Public | | Selling Agent Commissions | | Proceeds to the Company | |
Per Share | | $ | 0.05 | | Not applicable | | $ | 0.05 | |
Minimum Purchase | | | None | | Not applicable | | | Not applicable | |
Total (4,000,000 shares) | | $ | 200,000 | | Not applicable | | $ | 200,000 | |
| | If 25% of | | | | If 50% of | | | | If 75% of | | | | If 100% of | |
| | Shares Sold | | | | Shares Sold | | | | Shares Sold | | | | Shares Sold | |
| | | | | | | | | | | | | | | |
GROSS PROCEEDS FROM THIS OFFERING | | $ | 50,000 | | | | $ | 100,000 | | | | $ | 150,000 | | | | $ | 200,000 | |
You should rely only on the information contained in this prospectus. We have not authorized anyone to provide information different from that contained in this prospectus. The information in this prospectus is not complete and may be changed. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. The shares being offered by this prospectus will be offered for a period not to exceed twelve months from the original effective date of this prospectus.
The Company is an emerging growth company, but the company has irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to section 107(B) of the Jump Start Business Act of 2012. An emerging growth company could be capable of taking advantage of several exceptions. See page 6 for a discussion of these exceptions.
The Company is a shell company as defined in Rule 405, because it is a company with nominal operations and it has assets consisting solely of cash and cash equivalents.
An investment in our common stock involves a high degree of risk. We urge you to read carefully the “Risk Factors” section beginning on page 7, where we describe specific risks associated with an investment in My Cloudz, Inc. and these securities, before you make your investment decision.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is _______, 2015.
TABLE OF CONTENTS
PROSPECTUS SUMMARY | | | 5 | |
FORWARD-LOOKING STATEMENTS | | | 5 | |
RISK FACTORS | | | 9 | |
USE OF PROCEEDS | | | 15 | |
DETERMINATION OF OFFERING PRICE | | | 16 | |
DILUTION | | | 16 | |
PLAN OF DISTRIBUTION | | | 19 | |
DESCRIPTION OF SECURITIES | | | 22 | |
INTERESTS OF NAMED EXPERTS AND COUNSEL | | | 21 | |
DESCRIPTION OF BUSINESS | | | 22 | |
AVAILABLE INFORMATION | | | 26 | |
LEGAL PROCEEDINGS | | | 26 | |
EXECUTIVE COMPENSATION | | | 29 | |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | | | 31 | |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS | | | 32 | |
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES | | | 32 | |
INDEX TO THE FINANCIAL STATEMENTS | | | F-1 | |
PROSPECTUS SUMMARY
This summary provides a brief overview of the key aspects of this offering. Because it is only a summary, it does not contain all of the detailed information contained elsewhere in this prospectus or in the documents incorporated by reference into this prospectus or included as exhibits to the registration statement that contains this prospectus. This summary may not contain all of the information that may be important to you. We urge you to read this entire prospectus carefully, including the risks of investing in our common stock discussed under “Risk Factors” and the financial statements and other information attached to this prospectus, before making an investment decision.
All references in this prospectus to “MCI,” “we,” “us,” “our,” “the Company” or “our Company” refer to My Cloudz, Inc.
Our Company
My Cloudz, Inc. was incorporated in the State of Nevada as a for-profit Company on July 31, 2014. We intend to provide an on-line interface service for consumers to efficiently and effectively maintain, store and retrieve personal records and information through cloud computing. The Company has not yet implemented its business model and to date has generated no revenues. Neither the Company’s management nor any affiliates of the Company or its management have previously been involved in the management or ownership of a development stage company.
Since becoming incorporated, My Cloudz, Inc. has not made any significant purchase or sale of assets, nor has it been involved in any mergers, acquisitions or consolidations nor has the Company any plans nor does any of its stockholders have any plans to merge into an operating company, to enter into a change of control or similar transaction or to change our management. Neither management nor the Company’s shareholders have plans or intentions to be acquired. My Cloudz, Inc. is not a blank check registrant as that term is defined in Rule 419(a)(2) of Regulation C of the Securities Act of 1933, since it has a specific business plan or purpose.
Risks and Uncertainties Facing the Company
The Company has a limited operating history and may experience losses in the near term. We are dependent on sales of our equity securities to meet our cash requirements for the future proposed expansion of our business operations. As of February 28, 2015, we had an accumulated deficit of $11,358. Management of the Company must continually develop and refine its strategies and goals in order to execute the business plan of the Company on a broad scale and expand the business. One of the biggest challenges facing the Company will be in securing adequate capital to continue to expand its business and increase operations. Secondarily, an ongoing challenge remains the maintenance of an efficient operating structure and business model. The Company must keep its expenses and the costs of employees at a minimum in order to generate a profit from the revenues that it anticipates from its clients. Third, in order to expand, the Company will need to continue implementing effective sales and marketing strategies to reach and forge new business relationships. The Company has devised its initial sales, marketing and advertising strategies, however, the Company will need to continue refinement of these strategies and also skillfully implement these plans in order to achieve ongoing and long-term success in its business. Moreover, the above assumes that the Company’s services are consistently met with client satisfaction in the marketplace and exhibit steady success amongst the potential customer base, neither of which is reasonably predictable or guaranteed.
Risk Factors
An investment in the shares of our common stock involves a high degree of risk and may not be an appropriate investment for persons who cannot afford to lose their entire investment. For a discussion of some of the risks you should consider before purchasing shares of our common stock, you are urged to carefully review and consider the section entitled “Risk Factors” beginning on page 3 of this prospectus.
Being an Emerging Growth Company
MCI is a shell company as defined in Rule 405, because it is a company with nominal operations and it has assets consisting solely of cash and cash equivalents. We have no plans or intention to be acquired or to merge with an operating company. Additionally, there are no plans to enter into a change of control or similar transaction or change the management of the company. The Company is an emerging growth company, but the company has irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to section 107(B) of the Jump Start Business Act of 2012.
An issuer remains an emerging growth company until the earliest of:
The last day of the fiscal year during which it had total annual gross revenues of $1 billion or more;
The last day of the fiscal year following the fifth anniversary of its initial public offering date;
The date on which it has, during the previous three-year period, issued more than $1 billion in non-convertible debt; or
The date on which it is deemed to be a “large accelerated filer”, as defined in section 240.12b–2 of title 17, Code of Federal Regulations, or any successor thereto.
An emerging growth company could be capable of taking advantage of several exceptions, such as:
Say-On-Pay. Section 14A(e) of the Exchange Act has been amended to exempt emerging growth companies from the “say-on-pay”, “say-on-pay frequency” and “say-on-golden parachute” requirements that were enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. After cessation of emerging growth company status, if an issuer was an emerging growth company for less than two years after its initial public offering date, it must hold a say-on-pay vote no later than the end of the three-year period beginning on the date it is no longer an emerging growth company. Any other company that has ceased to be an emerging growth company must hold a say-on-pay vote no later than the end of the one-year period beginning on the date it is no longer an emerging growth company. In addition, following cessation of emerging growth company status, a company will become subject to the say-on-pay-frequency and say-on-golden parachute provisions of Rule 14a-21 promulgated under the Exchange Act.
Pay-versus-Performance. Section 14(i) of the Exchange Act has been amended to exempt emerging growth companies from the pay versus-performance requirements that were enacted as part of the Dodd-Frank Act. The SEC has not yet finalized the regulations implementing the pay-versus-performance requirements of the Dodd-Frank Act.
CEO Pay Ratio Disclosure. Section 953(b)(1) of the Dodd-Frank Act has been amended to exempt emerging growth companies from the requirement to compare CEO compensation to the median of the annual total compensation of all employees of the issuer other than the CEO. The SEC has not yet finalized the regulations implementing the pay ratio disclosure requirements of the Dodd-Frank Act.
Compensation Disclosures. Emerging growth companies may comply with the less burdensome executive compensation disclosure requirements applicable to any issuer with a market value of less than $75 million of outstanding voting and nonvoting common equity held by non-affiliates. Currently these provisions are set forth in Item 402(l) through (r) of Regulation S-K as applicable to smaller reporting companies.
Financial Statement Requirements. Section 7 of the Securities Act has been revised to require that two years, rather than three years, of audited financial statements be included in any registration statement filed with the SEC by an emerging growth company. Similarly, an emerging growth company need only present its Management’s Discussion and Analysis of Financial Condition and Results of Operations for each period for which financial statements are presented rather than the periods required by Item 303 of Regulation S-K. Furthermore, an emerging growth company need not present selected financial data for any period prior to the earliest audited period presented in connection with its initial public offering. In addition, an emerging growth company need not comply with any new or revised financial accounting standard until such date that a company that is not an “issuer”, as defined in Section 2 of the Sarbanes Oxley Act of 2002 (generally, a nonpublic company), is required to comply with such new or revised accounting standard. Similar changes were also made to Section 13(a) of the Exchange Act.
Internal Control over Financial Reporting. Section 404(b) of Sarbanes-Oxley has been amended to exempt emerging growth companies from the requirement to obtain an attestation report on internal control over financial reporting from the issuer’s registered public accounting firm. Currently, this requirement is only applicable to “accelerated filers” and “large accelerated filers” as defined in Rule 12b-2 promulgated under the Exchange Act.
PCAOB Rules. The Public Company Accounting Oversight Board must exclude emerging growth companies from any rules it might adopt addressing mandatory audit firm rotation or requiring a supplement to the auditor’s report in which the auditor would provide additional information about the audit and the financial statements of the issuer (a so-called auditor discussion and analysis). No PCAOB rules adopted after the date of enactment of the JOBS Act will apply to an emerging growth company unless the SEC determines that the application of such rules is necessary or appropriate in the public interest, after considering the protection of investors and whether the action will promote efficiency, competition and capital formation.
The exemptions listed above could be available to the Company, but we have irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to section 107(B) of the Jump Start Business Act of 2012.
The Company intends to file, in a period up to 90 days after the termination of this offering, a Form 8A making the Company a mandatory reporting issuer under the Securities and Exchange Act of 1934 as Amended.
The Company intends to offer its stock for sale in all jurisdictions that its prospectus is valid in and is not limited to any region or country.
The Offering
We are offering a total of up to 4,000,000 shares of our common stock. For a complete description of the terms and conditions of our common stock, you are referred to the section in this prospectus entitled “Description of Securities.”
Shares of Common Stock offered | | | 4,000,000 | |
| | | | |
Shares of Common Stock outstanding before the offering(1) | | | 5,000,000 | |
| | | | |
Shares of Common Stock outstanding after the offering(2)(3) | | | 9,000,000 | |
| (1) | Prior to this offering, the Company’s sole officer and director owns 100% of the outstanding shares of the Company and if all 4,000,000 shares are sold, he will own over 55.5% after this offering is completed. As a result, he will have control of the Company. |
| | |
| (2) | The shares being offered by this prospectus will be offered for a period not to exceed twelve months from the original effective date of this prospectus. |
| | |
| (3) | There is no public market for the common shares. The price per share is $0.05. My Cloudz, Inc. may not be able to meet the requirement for a public listing or quotation of its common stock. Further, even if My Cloudz, Inc. common stock is quoted or granted listing, a market for the common shares may not develop |
Use of Proceeds
We expect to use the proceeds that we receive from the sale of securities offered hereby to cover the costs associated with this offering estimated at $11,400 and for the initial funding of our business development and for general working capital purposes. See the section herein entitled “Use of Proceeds” for more information. As of the date of this prospectus, we have generated no revenues from our business operations.
Our officer and director has committed to lend funds (up to $12,500) to the company for the next twelve months to cover expenses to maintain the reporting status current with the SEC, if necessary. Mr. Vongsa is willing to lend the full amount of these funds to the Company as the expenses are incurred, if no other proceeds are available to the Company and if the amount raised through this offering is not enough to cover such expenses. However, there is no contract in place or written agreement with Mr. Vongsa and the funds expressed in the above verbal commitment, would be in the form of a non-secured loan and would have no interest and no fixed repayment date.
Principal Office, Telephone Number and Internet Address
Our business office is located at 430/23 Moo 12 Nongprue, Banglamung Chonburi 20150 Thailand- Phone 66-090-124-4220. Our website is currently under development.
Summary Financial Information
To date the Company has generated no revenues from its business operations and has incurred accumulated operating losses since inception of $11,358. As of February 28, 2015, the Company had a working capital deficit of $6,357. As of February 28, 2015, the Company has received $13,677. The amounts due to the related party are expected to be repaid and considered a current liability.
The Company’s capitalization is 200,000,000 common shares with a par value of $0.001 per share. No preferred shares have been authorized or issued. As of February 28, 2015, the Company has not granted any stock options and has not recorded any stock-based compensation. On November 10, 2014, the Company issued 5,000,000 common shares at $0.001 per share to the sole director and President of the Company for cash proceeds of $5,000.
RISK FACTORS
The purchase of shares of our common stock is very speculative and involves a very high degree of risk. An investment in our Company is suitable only for the persons who can afford the loss of their entire investment. Accordingly, investors should carefully consider the following risk factors, as well as other information set forth herein, in making an investment decision with respect to our securities.
Risks Relating to Our Business
We are a development stage company and have a limited history of operations, making an evaluation of us extremely difficult. At this stage, even with our good faith efforts, there is nothing on which to base an assumption that we will become profitable or generate any significant amount of revenues.
We have only a limited operating history on which you can evaluate our business, financial condition and operating results. We have not yet recognized revenues from our operations, and since our inception we have incurred significant operating losses and negative cash flows. We have been focused on organizational, start-up activities and business plan development since we incorporated. There is nothing at this time on which to base an assumption that our business operations will prove to be successful or that we will ever be able to operate profitably. Our future operating results will depend on many factors, including our ability to raise adequate working capital, demand for our product, the level of our competition and our ability to attract and maintain key management and employees. If we cannot achieve operating profitability, we may not be able to meet our working capital requirements, which will have a material adverse effect on our operating results and financial condition.
Our independent auditors have expressed substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain future financing.
The report of our independent auditors dated April 13, 2015 on our financial statements for the period ended August 31, 2014 included an explanatory paragraph indicating that there is substantial doubt about our ability to continue as a going concern. Our auditors’ doubts are based on our incurring significant losses from operations and our working capital deficit position. Our ability to continue as a going concern will be determined by our ability to obtain additional funding in the short term to enable us to realize the commercialization of our planned business operations. Our financial statements do not include any adjustments that might result from the outcome of this uncertain.
The Company intends to develop its business by using “free cloud storage” accounts from third party providers; however, the Company cannot provide any guarantee or assurance that the use of these accounts will not violate the terms of service agreements with the related cloud storage providers.
The Company cannot provide any guarantee or assurance that the proposed use of third party free cloud storage accounts will not violate the terms of service agreements with the cloud storage providers. If the Company is unable to use these accounts the business would fail and any investment made into the Company would be lost in its entirety. Moreover, the Company may be subject to legal claims by the third party cloud provider(s) in the future based upon the use of the third party accounts by the Company, any such legal claim could materially impact the Company and cause business failure.
We are an “emerging growth company” under the JOBS Act, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.
We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are choosing to take advantage of the extended transition period for complying with new or revised accounting standards. As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates.
We will remain an “emerging growth company” for up to five years, although we will lose that status sooner if our revenues exceed $1 billion, if we issue more than $1 billion in non-convertible debt in a three year period, or if the market value of our common stock that is held by non-affiliates exceeds $700 million.
If less than 25% of the shares offered in this registration statement are sold, we will need further investments in order to develop our business
We believe we will need proceeds from the sale of at least 25 % of the shares offered in order to implement our plan of operation and file SEC reports. If less than 25% of the shares offered in this registration statement are sold, we will most likely need further funding in order to develop our business. There are no guarantees that we will be able to sell enough shares or if we will find other source of funding for our operations. Investors are at risk of losing all their investment.
We anticipate operating expenses will increase prior to earning revenue and we may never achieve profits.
The Company anticipates increases in its operating expenses, without realizing any revenues from its business activities. Within the next 12 months, the Company will have costs related to: (i) market research (ii) website development cost, (iii) marketing, (iv) administrative expenses and (v) the expenses of this offering.
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 product will attract customers; generate any operating revenue or ever achieve profitable operations. If we are unable to address these costs, there is a high probability that our business can fail, which will result in the loss of your entire investment.
We will require additional financing in order to implement our business plan. In the event we are unable to acquire additional financing, we may not be able to implement our business plan resulting in a loss of revenues and ultimately the loss of your investment.
To fully implement our business plan, we will require substantial additional funding following this offering. We plan to raise additional funds through private placements, registered offerings, debt financing or other sources to maintain and expand our operations. Adequate funds for this purpose on terms favorable to us may not be available, and if available, on terms significantly more adverse to us than are manageable. Without new funding, we may be only partially successful or completely unsuccessful in implementing our business plan, and our stockholders will lose part or all of their investment.
The loss or unavailability to the Company of Mr. Vongsa’s services would have an adverse effect on our business, operations and prospects in that we may not be able to obtain new management under the same financial arrangements, which could result in a loss of your investment.
Our business plan is significantly dependent upon the abilities and continued participation of Mr. Vongsa, our President and sole Director. It would be difficult to replace Mr. Vongsa at such an early stage of development. The loss by or unavailability to us of Mr. Vongsa’s services would have an adverse effect on our business, operations and prospects. In the event that we are unable to locate or employ personnel to replace Mr. Vongsa, we would be required to cease pursuing our business opportunity, which would result in a loss of your investment.
Current management’s lack of experience in operating a public company could impact your return on investment, if any.
As a result of our reliance on Mr. Vongsa, and his lack of experience in operating a public company, our investors are at risk in losing their entire investment. Mr. Vongsa intends to hire personnel in the future, when sufficiently capitalized, who would have the experience required to manage our Company. Such management is not anticipated until the occurrence of future financing. Until such a future offering occurs, and until such management is in place, we are reliant upon Mr. Vongsa to make the appropriate management decisions.
Legal issues may arise relating to trademark infringement, security concerns and sharing of proprietary data resources, which may prevent us from developing our anticipated business and negatively impact our future profits.
Cloud computing is a relatively new marketplace as such certain legal issues may arise in the future that may have a material impact on the our anticipated business such as trademark infringement, security concerns relating to the storage of individual’s data and sharing of proprietary data resources to name a few. Unforeseen legal issues may impact us in the future and may limit or prevent us from making a profit, which in turn may result in a complete loss of any investment made into the Company.
Our officers and directors are entitled to indemnification and limitation of liability under Nevada law.
Our officer(s) and director(s) are required to exercise good faith and high integrity in the management of our affairs. Nevada law allows that our officer(s) and director(s) to have no personal liability to us or our stockholders for damages for any breach of duty owed to us or our stockholders, unless they breached their duty of loyalty, did not act in good faith, knowingly violated a law, or received an improper personal benefit.
Because we do not have an escrow account or trust account for our investor’s subscriptions, if we file for bankruptcy protection or are forced into bankruptcy protection, investors will lose their entire investment.
Invested funds for this offering will not be placed in an escrow or trust account. Accordingly, 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, you will lose your investment and your funds will be used to pay creditors and will not be used for the sourcing and sale of promotional products.
These risk factors, individually or occurring together, would have a substantially negative effect on our business and would likely cause it to fail.
We may be unable to comply with disclosure controls and procedures necessary to make required public filings.
We currently have no full-time employees other than our President, although we intend to add personnel following this offering. Given our limited personnel, we may be unable to maintain effective controls to insure that we are able to make all required public filings in a timely manner. If we are successful in having our common stock listed on a stock exchange or quotation service, and if we do not make all public filings in a timely manner, our shares of common stock may be delisted and we could also be subject to regulatory action and/or lawsuits by stockholders.
Reporting requirements under the Exchange Act and compliance with the Sarbanes-Oxley Act Of 2002, including establishing and maintaining acceptable internal controls over financial reporting, are costly and may increase substantially.
The rules and regulations of the SEC require a public company to prepare and file periodic reports under the Exchange Act, which will require that the Company engage legal, accounting, auditing and other professional services. The engagement of such services is costly. Additionally, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) requires, among other things, that we design, implement and maintain adequate internal controls and procedures over financial reporting. The costs of complying with the Sarbanes-Oxley Act and the limited technically qualified personnel we have may make it difficult for us to design, implement and maintain adequate internal controls over financial reporting. We expect these costs to be approximately $12,500 per year. In the event that we fail to maintain an effective system of internal controls or discover material weaknesses in our internal controls, we may not be able to produce reliable financial reports or report fraud, which would materially impact our overall business and result in loss of investor confidence. If the Company is unable to maintain its status as a reporting company it would materially impact the ability of the Company to raise funds and would likely result in a complete loss of any investment made into the Company.
Our officer and director has committed to lend funds (up to $12,500) to the company for the next twelve months to cover expenses to maintain the reporting status current with the SEC, if necessary. Mr. Vongsa is willing to lend the full amount of these funds to the Company as the expenses are incurred, if no other proceeds are available to the Company and if the amount raised through this offering is not enough to cover such expenses. However, there is no contract in place or written agreement with Mr. Vongsa and the funds expressed in the above verbal commitment, would be in the form of a non-secured loan and would have no interest and no fixed repayment date.
Because our sole officer and director resides abroad, shareholders may have difficulties enforcing their legal rights under United States securities laws.
Since our sole officer and director resides in Thailand, shareholders may have difficulties enforcing their legal rights under United States securities laws. Therefore, if any event which would request his personal presence in the United States, including judgment or legal matters concerning him for instance, it may be difficult to get him at the needed time. This may lead to delays, unforeseen situations and lack of investors’ trust in our sole officer and director. Such matters could have a significant negative effect on the success of our business.
Because our management has no technical training and no experience in the cloud computing industry our business activities, earnings and ultimate financial success could be irreparably harmed.
Our management has no technical training and experience with cloud computing. With no direct training or experience in these areas, management may not be fully aware of many of the specific requirements related to working within the industry. Management's decisions and choices may not take into account standard engineering or managerial approaches to cloud computing companies commonly use. Consequently, our activities, earnings and ultimate financial success could suffer irreparable harm due to management's lack of experience in the industry.
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.
There is currently no public trading market for our common stock. Therefore there is no central place, such as 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 in compliance with applicable federal and state securities laws.
Because the Securities and Exchange Commission imposes additional sales practice requirements on brokers who deal in shares that are penny stocks, some brokers may be unwilling to trade them. This means that you may have difficulty reselling your shares and this may cause the price of the shares to decline.
Our shares would be classified as penny stocks and are covered by Section 15(g) of the Securities Exchange Act of 1934 and the rules promulgated thereunder which impose additional sales practice requirements on brokers/dealers who sell our securities in this offering or in the aftermarket. For sales of our securities, the broker or dealer must make a special suitability determination and receive from you a written agreement prior to making a sale for you. Because of the imposition of the foregoing additional sales practices, it is possible that brokers will not want to make a market in our shares. This could prevent you from reselling your shares and may cause the price of the shares to decline.
Because our Company is a shell company there are restrictions imposed upon the transferability of unregistered shares.
MCI is a shell company as defined in Rule 405, because it is a company with nominal operations and it has assets consisting solely of cash and cash equivalents. Accordingly, there will be illiquidity of any future trading market until the company is no longer considered a shell company, as well as restrictions imposed upon the transferability of unregistered shares outlined in Rule 144(i).
NASD sales practice requirements may limit a stockholder's ability to buy and sell our stock.
The NASD has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, the NASD believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The NASD requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may have the effect of reducing the level of trading activity and liquidity of our common stock. Further, many brokers charge higher transactional fees for penny stock transactions. As a result, fewer broker-dealers may be willing to make a market in our common stock, reducing a stockholder's ability to resell shares of our common stock.
Our company has a concentration of stock ownership and control, which may have the effect of delaying, preventing, or deterring a change of control.
At present, the company’s President owns 100% of our total outstanding shares of common stock before this offering. As a result of the concentrated ownership of the stock, our President will be able to control all matters requiring stockholder approval, including the election of directors and approval of mergers and other significant corporate transactions. This concentration of ownership may have the effect of delaying, preventing or deterring a change in control of our company. It could also deprive our stockholders of an opportunity to receive a premium for their shares as part sale of our company and it may affect the market price of our common stock.
The Company is not fully reporting under the Exchange Act and thus information about the company may be limited.
Until our common stock is registered under the Exchange Act, we will not be a fully reporting company but only subject to the reporting obligations imposed by Section 15(d) of the Exchange Act. This severely limits the information and regulatory oversight to which we will be subject. For example, we will not be subject to the proxy rules under Section 14 of the Exchange Act, prohibition of short-swing profits under Section 16 of the Exchange Act, and beneficial ownership reporting requirements of Section 13(d) & (g) of the Exchange Act. Additionally, given the number of shareholders in our company, there are statutory provisions that may result in the automatic termination of any periodic reporting responsibilities in the event that we have less than 300 shareholders after the year that our registration statement becomes effective.
Risks Related to the Company’s Market and Strategy
The Market For Cloud Computing Services is Evolving and may Not Continue to Develop or Grow Rapidly Enough for us to Become Consistently Profitable.
The cloud computing commerce market is still evolving and currently growing at a rapid rate. We believe future growth in the electronic commerce market will be driven by the cost, ease-of-use and quality of products and services offered to consumers and businesses. In order to consistently increase and maintain our profitability, consumers and businesses must continue to adopt our services.
The Company’s anticipated services would be new, which may fail to find public acceptance.
The services to be provided by the Company are newly developed and have just begun to be offered on a commercial basis. It is possible that once released, the Company’s services will not find acceptance among its potential users of the product, third parties intending to distribute or resell the Company’s services, or the customers of such third parties.
Competition in the cloud computing industry is intense, and we have limited financial and personnel resources with which to compete.
Competition in the cloud computing industry is intense. Numerous companies headquartered throughout the world compete for consumer and users on a global basis. We are an insignificant participant in the cloud computing industry due to our limited financial and personnel resources. We presently operate with a sole employee, and anticipate that we will compete with other companies in our industry to hire additional qualified personnel which will be required to successfully operate our Company. We may be unable to attract the necessary investment capital or personnel to fully develop our marketing and business plan. Consequently, our revenues, operations and financial condition could be materially adversely affected.
Security and privacy breaches in our electronic information storage system may damage customer relations and inhibit our growth.
The secure transmission of confidential information over public networks is a critical element of the Company’s operations. Advances in computer capabilities, new discoveries in the field of cryptography or other events or developments could result in a compromise of the technology or other algorithms used to protect client transaction and other data, which could materially adversely affect our business, financial condition and results of operations. If we are unable to protect, or consumers perceive that we are unable to protect, the security and privacy of our electronic transactions, our growth and the growth of the electronic commerce market in general could be materially adversely affected. A security or privacy breach may cause our customers to lose confidence in our services, deter consumers from using our services, harm our reputation, expose us to liability, increase our expenses from potential remediation costs; and decrease market acceptance of electronic commerce transactions.
While we believe that we utilize designs with appropriate data security and integrity, there can be no assurance that our use of these applications will be sufficient to address changing market conditions or the security and privacy concerns of existing and potential subscribers.
Our proposed business depends substantially on customers signing-up, renewing, upgrading and expanding their subscriptions for our services.
Lack of subscribers and any decline in our customer renewals, upgrades and expansions would harm our future operating results. We plan to sell our application pursuant to service agreements that are generally one year in length. Our customers will have no obligation to renew their subscriptions after their subscription period expires, and they may not renew their subscriptions at the same or higher levels. Moreover, under specific circumstances, our customers have the right to cancel their service agreements before they expire. Our customers’ renewal rates may decline or fluctuate because of several factors, including their satisfaction or dissatisfaction with our services, the prices of our services, the prices of services offered by our competitors or reductions in our customers’ spending levels due to the macroeconomic environment or other factors. If we cannot get customers and if our customers do not renew their subscriptions for our services, renew on less favorable terms, or do not purchase additional functionality or subscriptions, our revenue may grow more slowly than expected or decline and our profitability and gross margin may be harmed.
We may become liable to our customers and lose customers if we have defects or disruptions in our service or if we provide poor service.
Because we plan to deliver our application as a service, errors or defects in software applications underlying our service, or a failure of our hosting infrastructure, may make our service unavailable to our potential customers. Since our customers will use our service to manage and store critical aspects of their personal records and business documents, any errors, defects, disruptions in service or other performance problems with our service, whether in connection with the day-to-day operations, upgrades or otherwise, could damage our customers’. If we have any errors, defects, disruptions in service or other performance problems with our suite, customers could elect not to renew, or delay or withhold payment to us, we could lose future sales or customers may make warranty claims against us and create costly litigation circumstances.
A Cautionary Note on Forward-Looking Statements
This Prospectus contains forward-looking statements, which relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors," that may cause our industry's actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements.
While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
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 $0.05. The offering is being conducted on a “best efforts’ basis and the offering scenarios that follow are for illustrative purposes only. The actual amount of proceeds, if any, may differ. 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 | |
| | | | | | | | | | | | | |
GROSS PROCEEDS FROM THIS OFFERING | | $ | 50,000 | | | $ | 100,000 | | | $ | 150,000 | | | $ | 200,000 | |
Less: OFFERING EXPENSES | | | | | | | | | | | | | | | | |
Legal & Accounting | | $ | 8,000 | | | $ | 8,000 | | | $ | 8,000 | | | $ | 8,000 | |
Printing | | $ | 400 | | | $ | 400 | | | $ | 400 | | | $ | 400 | |
Transfer Agent | | $ | 3,000 | | | $ | 3,000 | | | $ | 3,000 | | | $ | 3,000 | |
TOTAL OFFERING EXPENSES: | | $ | 11,400 | | | $ | 11,400 | | | $ | 11,400 | | | $ | 11,400 | |
NET PROCEEDS | | $ | 38,600 | | | $ | 88,600 | | | $ | 138,600 | | | $ | 188,600 | |
Less: GENERAL BUSINESS DEVELOPMENT | | | | | | | | | | | | | | | | |
Business travel expenses | | $ | 3,000 | | | $ | 5,000 | | | $ | 8,000 | | | $ | 10,000 | |
Office supplies and expenses | | $ | 550 | | | $ | 1,300 | | | $ | 3,050 | | | $ | 4,300 | |
Market research | | $ | 2,500 | | | $ | 7,000 | | | $ | 9,000 | | | $ | 10,000 | |
Computer hardware | | $ | 4,000 | | | $ | 8,000 | | | $ | 9,000 | | | $ | 10,000 | |
Server Farm Rental | | $ | 3,000 | | | $ | 3,500 | | | $ | 5,000 | | | $ | 6,000 | |
TOTAL REMAINING PROCEEDS: | | $ | 13,050 | | | $ | 24,800 | | | $ | 34,050 | | | $ | 40,300 | |
| | | | | | | | | | | | | | | | |
Less: SOFTWARE DEVELOPMENT | | | | | | | | | | | | | | | | |
Software Development | | $ | 13,550 | | | $ | 35,500 | | | $ | 71,250 | | | $ | 110,000 | |
| | | | | | | | | | | | | | | | |
TOTAL REMAINING PROCEEDS: | | $ | 13,550 | | | $ | 35,500 | | | $ | 71,250 | | | $ | 110,000 | |
| | | | | | | | | | | | | | | | |
Less: SALES & MARKETING | | | | | | | | | | | | | | | | |
Logo development: | | $ | 3,000 | | | $ | 5,500 | | | $ | 7,000 | | | $ | 10,000 | |
Website Development | | $ | 2,500 | | | $ | 5,000 | | | $ | 5,000 | | | $ | 5,000 | |
Web hosting | | $ | 500 | | | $ | 500 | | | $ | 500 | | | $ | 500 | |
Online Advertising | | $ | 6,000 | | | $ | 17,300 | | | $ | 20,800 | | | $ | 22,800 | |
| | | | | | | | | | | | | | | | |
TOTAL REMAINING PROCEEDS: | | $ | 12,000 | | | $ | 28,300 | | | $ | 33,300 | | | $ | 38,300 | |
| | | | | | | | | | | | | | | | |
TOTAL REMAINING PROCEEDS: | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | |
TOTAL USE OF PROCEEDS: | | $ | 50,000 | | | $ | 100,000 | | | $ | 150,000 | | | $ | 200,000 | |
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 MCI 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 Among the factors considered were:
| ü | Our cash requirements; |
| ü | The proceeds to be raised by the offering; |
| ü | Our lack of operating history; and |
| ü | The amount of capital to be contributed by purchasers in this Offering in proportion to the amount of stock to be retained by our existing shareholder. |
Our common stock is not listed on a public exchange. We intend to apply for quotation on the OTCBB. We cannot provide any assurance or guarantee that the Company will ever achieve a listing on the OTCBB or obtain any listing at all. If we are unable to get a listing investors in our common stock would likely not be able to ever sell their stock.
DILUTION
The price of the current offering is fixed at $0.05 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 July 31, 2014. The Company’s sole officer and director paid $0.001 per share, a difference of $0.049 per share lower than the share price in this offering. Anyone investing in the Company’s common stock through this Offering will immediately have significant dilution of their common stock. 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.
Existing Stockholders if all of the Shares are Sold | | | | |
Price per share | | $ | 0.05 | |
Post offering net tangible book value | | $ | 182,243 | |
Potential gain to existing shareholders | | $ | 200,000 | |
Net tangible book value per share after offering | | $ | 0.0202 | |
Increase to present stockholders in net tangible book value per share after offering | | $ | 0.0190 | |
Capital contributions by purchasers of shares | | $ | 200,000 | |
Capital Contributions by existing stockholders | | $ | 5,000 | |
Number of shares outstanding before the offering | | | 5,000,000 | |
Number of shares after offering held by existing stockholders | | | 5,000,000 | |
Existing Stockholders Percentage of ownership after offering | | | 55.56 | % |
Purchasers of Shares in this Offering if all Shares Sold | | | |
Price per share | | $ | 0.05 | |
Post offering net tangible book value | | $ | 182,243 | |
Increase in net tangible book value per share after offering | | $ | 0.0215 | |
Dilution per share | | $ | 0.0298 | |
Capital contributions by purchasers of shares | | $ | 200,000 | |
Capital contributions by existing stock holders | | $ | 5,000 | |
Percentage capital contributions by purchasers of shares | | | 98 | % |
Percentage capital contributions by existing stockholders | | | 3 | % |
Anticipated net offering proceeds | | $ | 182,243 | |
Number of shares after offering held by public investors | | | 4,000,000 | |
Total shares issued and outstanding | | | 9,000,000 | |
Purchasers of shares percentage of ownership after offering | | | 44.44 | % |
Existing stockholders percentage of owner ship after offering | | | 55.56 | % |
Purchasers of Shares in this Offering if 75% of Shares Sold | | | | |
Price per share | | $ | 0.05 | |
Post offering net tangible book value | | $ | 132,243 | |
Post offering net tangible book value per share | | $ | 0.0165 | |
Pre-offering net tangible book value per share | | $ | (0.0013 | ) |
Increase in net tangible book value per share after offering | | $ | 0.0153 | |
Dilution per share | | $ | 0.0335 | |
Capital contributions by purchasers of shares | | $ | 150,000 | |
Capital contributions by existing stock holders | | $ | 5,000 | |
Percentage capital contributions by purchasers of shares | | | 97 | % |
Percentage capital contributions by existing stockholders | | | 3 | % |
Anticipated net offering proceeds | | $ | 138,600 | |
Number of shares after offering held by public investors | | | 3,000,000 | |
Total shares issued and outstanding | | | 8,000,000 | |
Purchasers of shares percentage of ownership after offering | | | 38 | % |
Existing stockholders percentage of ownership after offering | | | 63 | % |
Purchasers of Shares in this Offering if 50% of Shares Sold | | | | |
Price per share | | $ | 0.05 | |
Post offering net tangible book value | | $ | 82,243 | |
Post offering net tangible book value per share | | $ | 0.0117 | |
Pre-offering net tangible book value per share | | $ | (0.0013 | ) |
Increase in net tangible book value per share after offering | | $ | 0.0105 | |
Dilution per share | | $ | 0.0383 | |
Capital contributions by purchasers of shares | | $ | 100,000 | |
Capital contributions by existing share holders | | $ | 5,000 | |
Percentage capital contributions by purchasers of shares | | | 95 | % |
Percentage capital contributions by existing stock holders | | | 5 | % |
Anticipated net offering proceeds | | $ | 88,600 | |
Number of shares after offering held by public investors | | | 2,000,000 | |
Total shares issued and outstanding | | | 7,000,000 | |
Purchasers of shares percentage of ownership after offering | | | 28.57 | % |
Existing stockholders percentage of ownership after offering | | | 71.43 | % |
Purchasers of Shares in this Offering if 25% of Shares Sold | | | | |
Price per share | | $ | 0.05 | |
Post offering net tangible book value | | $ | 32,243 | |
Post offering net tangible book value per share | | $ | 0.0054 | |
Pre-offering net tangible book value per share | | $ | (0.0013 | ) |
Increase in net tangible book value per share after offering | | $ | 0.0041 | |
Dilution per share | | $ | 0.0446 | |
Capital contributions by purchasers of shares | | $ | 50,000 | |
Capital contributions by existing share holders | | $ | 5,000 | |
Percentage capital contributions by purchasers of shares | | | 91 | % |
Percentage capital contributions by existing stock holders | | | 9 | % |
Anticipated net offering proceeds | | $ | 38,600 | |
Number of shares after offering held by public investors | | | 1,000,000 | |
Total shares issued and outstanding | | | 6,000,000 | |
Purchasers of shares percentage of ownership after offering | | | 16.67 | % |
Existing stockholders percentage of ownership after offering | | | 83.33 | % |
Plan of Distribution
5,000,000 common shares are issued and outstanding as of the date of this prospectus to our sole officer and director. The Company is registering an additional 4,000,000 shares of its common stock at the price of $0.05 per share. There is no arrangement to address the possible effect of the offering on the price of the stock.
The Company will receive all proceeds from the sale of those shares. The price per share is fixed at $0.05 for the duration of this offering. Although our common stock is not listed on a public exchange, we intend to apply for quotation on the Over-the-Counter Bulletin Board (OTCBB). In order to be quoted on the OTCBB, a market maker must file an application on our behalf in order to make a market for our common stock. There can be no assurance that a market maker will agree to file the necessary documents with FINRA, who, generally speaking, must approve the first quotation of a security by a market maker on the OTCBB, nor can there be any assurance that such an application for quotation will be approved. However, sales by the Company must be made at the fixed price of $0.05 for the duration of this offering.
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 its shares for sale through underwriters, dealers, 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 occasionally sold in one or more transactions; all shares sold under this prospectus will be sold at a fixed price of $0.05 per share
Mr. Vongsa, resides in Thailand and plans to make offers for the sale of the commons stock in Thailand, Laos, and the United States.
The offering will conclude on the earlier of; (1) when all 5,000,000 shares of common stock have been sold, or (2) 12 months after this registration statement becomes effective with the Securities and Exchange Commission. There is no minimum number of common shares that we have to sell. There are no minimum purchase requirements.
In order to comply with the applicable securities laws of certain states, the securities will be offered or sold in those only if they have been registered or qualified for sale; an exemption from such registration or if qualification requirement is available and with which MCI has complied.
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.
In connection with the Company’s selling efforts in the offering, Sommay Vongsa our sole officer and director will be selling shares on the Company’s behalf. Our sole officer and director will not register as a 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 Securities Exchange Act of 1934, as amended (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. Mr. Vongsa is not subject to any statutory disqualification, as that term is defined in Section 3(a)(39) of the Exchange Act. Mr. Vongsa will not be compensated in connection with her participation in the offering by the payment of commissions or other remuneration based either directly or indirectly on transactions in our securities. Mr. Vongsa is not, nor has she been within the past 12 months, a broker or dealer, and he is not, nor has she been within the past 12 months, an associated person of a broker or dealer. At the end of the offering, Mr. Vongsa will continue to primarily perform substantial duties for the Company or on its behalf otherwise than in connection with transactions in securities. Mr. Vongsa will not participate in selling an offering of securities for any issuer more than once every 12 months other than in reliance on Exchange Act Rule 3a4-1(a)(4)(i) or (iii). MCI will pay all expenses incidental to the registration of the shares (including registration pursuant to the securities laws of certain states).
Description of Securities to be Registered
Common Stock
Our authorized capital stock consists of 200,000,000 shares of common stock, par value $0.001 per share. The holders of our common stock:
| * | 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 Nevada 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 44.44% of our outstanding shares.
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 in our business operations.
Anti-Takeover Provisions
Though not now, we may be or in the future we may become subject to Nevada's control share law. A corporation is subject to Nevada's control share law if it has more than 200 stockholders, at least 100 of whom are stockholders of record and residents of Nevada, and it does business in Nevada or through an affiliated corporation. The law focuses on the acquisition of a "controlling interest" which means the ownership of outstanding voting shares sufficient, but for the control share law, to enable the acquiring person to exercise the following proportions of the voting power of the corporation in the election of directors:
(i) one-fifth or more but less than one-third, (ii) one-third or more but less than a majority, or (iii) a majority or more. The ability to exercise such voting power may be direct or indirect, as well as individual or in association with others.
The effect of the control share law is that the acquiring person, and those acting in association with it, obtains only such voting rights in the control shares as are conferred by a resolution of the stockholders of the corporation, approved at a special or annual meeting of stockholders. The control share law contemplates that voting rights will be considered only once by the other stockholders. Thus, there is no authority to strip voting rights from the control shares of an acquiring person once those rights have been approved. If the stockholders do not grant voting rights to the control shares acquired by an acquiring person, those shares do not become permanent non-voting shares. The acquiring person is free to sell its shares to others. If the buyers of those shares themselves do not acquire a controlling interest, their shares do not become governed by the control share law.
If control shares are accorded full voting rights and the acquiring person has acquired control shares with a majority or more of the voting power, any stockholder of record, other than an acquiring person, who has not voted in favor of approval of voting rights, is entitled to demand fair value for such stockholder's shares.
Nevada's control share law may have the effect of discouraging takeovers of the corporation.
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, MCI will act as its own transfer agent.
Interests of Named Experts and Counsel
No expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the common stock was employed on a contingency basis, or had, or is to receive, in connection with the offering, a substantial interest, direct or indirect, in the registrant or any of its parents or subsidiaries. Nor was any such person connected with the registrant or any of its parents or subsidiaries as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.
The financial statements included in this prospectus and the registration statements have been audited by Anton and Chia LLP, 3501 Jamboree Road, Suite 540 Newport Beach, CA 92660, to the extent and for the periods set forth in their report appearing elsewhere herein and in the registration statement. The financial statements are included in reliance on such report given upon the authority of said firm as experts in auditing and accounting.
The Law Office of Timothy S. Orr, PLLC, has rendered an opinion with respect to the validity of the shares of common stock covered by this prospectus.
Information with Respect to the Registrant
DESCRIPTION OF BUSINESS
Business Development
On July 31, 2014 Mr. Sommay Vongsa, president and sole director incorporated the Company in the State of Nevada and established a fiscal year end of August 31. MCI intends to market and sell its planed secure online data storage through its intended website.
The Company has not yet implemented its business model and to date has generated no revenues. It is the Company’s intention to provide its customers with a software program to management and aggregate individual cloud storage services that will appear and act as one large drive to the user. The user need know or care where or how their data is distributed across multiple storage platforms, but can rest assured there data will be safe and secure. Other features the MCI program will have is it will encrypt all data prior to uploading to the cloud and it will not have a file size restriction as many current providers do.
Currently MCI has identified 5 service providers whose aggregated free cloud storage could provide a MCI user with 57 gigabytes of free cloud storage to be managed by your application available for $9.99.
MCI intends to develop and deliver a computer software program for Windows, MAC, OSI and Android systems that will allow its customers to aggregate and managed multiple Cloud Storage accounts as one. Using the application the user may sign up for multiple free or paid for Cloud Storage accounts from Cloud Storage providers such as Microsoft, Apple, Dropbox and others. Users of our application could sign up for as much as 57 gigabytes of free cloud storage using multiple services but have them treated as one single drive on their desktop or mobile device. Our application sells for $9.99 and be available from our website, the Apps Store and Google’s store. Not only will our application manage and consolidate multiple Cloud Storage accounts but it will also offer a higher level of security currently available, most Cloud Storage provider encrypt a users files once they reach the cloud but transfer those files across the Internet unencrypted. The MCI application will encrypt a user’s file on the local device prior to uploading them to the Cloud.
We intend to market our services on the Internet. We have three planned phases to our operations over the next twelve months. The business activities and related expenses in each phase will be affected by the proceeds from sales of shares in this offering received by the Company as discussed below.
Plan of Operation
Over the 12-month period starting upon the effective date of this registration statement, our company must raise capital to introduce its planned products and start its sales. We intend to raise the capital by investors investing in our startup company. We intend to market our services on the Internet. We have three planned phases to our operations over the next twelve months. The business activities and related expenses in each phase will be affected by the proceeds from sales of shares in this offering received by the Company as discussed below.
The Company has not yet implemented its business model and to date has generated no revenues.
It is the Company’s intention to provide its customers with a large amount (50 plus gigabytes) of free cloud storage and security features available in the market today.
Over the next twelve months, the Company plans to introduce software with several different features:
| 1) | A software application that will manage and amalgamate multiple cloud storage services so they appear and act like a single drive on your desktop or mobile device. |
| | |
| 2) | A secure data backup service using the highest levels of encryption algorithms that will encrypt data on the local device before it is storage; and |
| | |
| 3) | Eliminate any file size restriction for upload to the web as long as the user has enough total cloud storage available for the file. |
Within the first quarter the company will hire a company or individual to create MCI’s website, the Company anticipate the website will be complete 180 days after this prospectus becomes effective. The Company anticipates the cost of website development to be $5,000.
Within the first quarter the company will apply for the free licenses to use the identified Cloud Storage providers API (Applied programming Interface). The API provided for free by Companies such as Microsoft, Google and other Cloud Service Providers allows My Cloudz application to upload storage and download files onto their cloud servers. Other than the president’s time to fill out the API software developers request forms and submit them there are no hard cost associated with this step.
Within 180 days of this prospectus being approved the company intends to hire a third party company or individual to begin writing the company’s application, the development work will happen in four phases with 4 product releases. (MCI is considering contract programmers in India, Russia, China and Serbia; however, as of the date of this prospectus has not engaged any programmers).
The first anticipated product will be for a Windows compatible machine that will allow the encryption and storage of users files across multiple cloud storage services provider with a capability of over 50 gigabytes of cloud storage. The initial product will only allow for the manual uploading and restoring of files and will be used as an emergency backup system. MCI anticipates the product will be released with 360 days of this prospectus being approved and should cost $30,000.00.
The next product to be released will be the Cloudz application for Apple desktops, MCI anticipates this development to start within 30 days of the Windows development and to be completed within 360 to 390 days after this prospectus becomes effective. MCI anticipates it will cost approximately 25,000 for development.
The next development project will be for the Ipad and Iphone OSI systems. The Company anticipates these applications to be developed within 270 days of this prospectus being approved and have budgeted $20,000 for these applications. With the large number of applications developers and the vast amount of developer tools available the cost to develop applications has dropped dramatically in the past 3 years.
The last product development to commence development will be the Android application the company anticipates this application development will begin 360 days after this prospectus becomes effective and will cost approximately $20,000.00.
Once the Company has written applications for the 4 major operating systems that allow manual file backup and retrieval the Company intends to add additional features to each platform. These additional features would include automatic backup syncing, as soon as a user modifies a file in the MyCloudz folder it will automatically be encrypted and sent to the Cloud. File sharing, allowing a user to share specific Cloud stored files with other users.
In the event the Company sells 25% of the shares offered, the Company intends to scale back its planned software development to providing a secure data backup service only thereby reducing its anticipated software development expense to $13,550. In addition, the Company will reduce its planned business travel expense to $3,000; scale back the purchase of its computer hardware to $4,000 and reduce planned market research expense to $2,500. Office supplies expense will be reduced to $550 and the required server farm rental will be reduced to $3,000. Logo development expense will be reduced to $3,000; website development will be reduced to $2,500; online advertising expense will be reduced to $6,000 thereby reducing total sales and marketing expenses to $12,000 (see Use of Proceeds, page 14).
In the event the Company sells 50% of the shares offered, the Company intends to scale back its planned software development to providing a secure data backup service and multiple layers of passwords allowing various layers of access to limited amounts of data only thereby reducing its anticipated software development expense to $35,500. In addition, the Company will reduce its planned business travel expense to $5,000; scale back the purchase of its computer hardware to $8,000 and reduce planned market research expense to $7,000. Office supplies expense will be reduced to $1,300 and the required server farm rental will be reduced to $3,500. Logo development expense will be reduced to $5,500; website development will be reduced to $5,000; online advertising expense will be reduced to $17,300 thereby reducing total sales and marketing expenses to $28,300 (see Use of Proceeds, page 14).
In the event the Company sells 75% of the shares offered, the Company intends to scale back its planned software development to providing a secure data backup service, multiple layers of passwords allowing various layers of access to a limited amounts of data and a military grade data purge of all data associated with that password thereby reducing its anticipated software development expense to $71,250. In addition, the Company will reduce its planned business travel expense to $8,000; scale back the purchase of its computer hardware to $9,000 and reduce planned market research expense to $9,000. Office supplies expense will be reduced to $3,050 and the required server farm rental will be reduced to $5,000. Logo development expense will be reduced to $7,000; online advertising expense will be reduced to $20,800 thereby reducing total sales and marketing expenses to $33,300 (see Use of Proceeds, page 14).
The Market Opportunity
The Company’s management believes that the established Cloud Storage providers in the short term will offer more and more free storage and soon a user will be able to aggregate over 100 gigabytes of free storage. Moreover, management believes the High School, College and University Students who are generally thrifty and tech savvy will make up the Company’s initial target market.
Description of our Product
MCI intends to provide secure online storage in the cloud. We intend to have our first feature of our intended software to be online backup services that is protected by highest levels of encryption algorithms as well as ghosting and spoofing techniques of Intent IP addresses making it virtually impossible to track.
Our second feature will be to have multiple layers of passwords allowing various layers of access to a limited amount of data.
Our third feature we intend to have in our software is if you used the same login with another password it would cause a military grade data purge of all data associated with that password.
Our fourth planned feature’s may include the opportunity to dispatch help such as the local police should someone be forced to reveal sensitive data against their will. For example a password could give access to non-critical data but at the same time that password could cause the system to dispatch police to a specific location.
Marketing
Our marketing strategy will be strictly using electronic media for both product delivery and marketing. Our products for the Mac Computer and Windows Computer will be available for download from our website while the applications for the Iphone and Ipad will be available for download from Apple’s App Store and our product supporting Android devices will be available from Google Play.
We use traditional e-marketing techniques such as Cloud Chat Rooms and contacting people who blog about Cloud Storage. Non-spam email campaigns, purchasing Google Ad words, utilizing twitter, messaging and other social media outlets.
The Company feels that students in high school and universities would be our first target group; they are generally tech savvy, budget conscious and can be a major influence in a product going viral.
The Company once it has its product offering being desktop and mobile would begin a messaging and email campaign directed at students
In addition, we will offer prospective customers a referral incentive whereby they can earn 3 additional free months if they refer a customer that signs up for online storage. We do not intend to profit from the first phase of our marketing strategy. We intend only to drive traffic and make people aware of our online presence.
In the third phase of our Marketing campaign intend to engage an online marketing company that we would pay to drive traffic to our site; this will last for 90 days after which we believe we will be well enough known to start getting in subscriptions for our services. We do not intend to profit from our initial marketing campaign to generate initial web site traffic. Once we have obtained steady sales traffic on our site (estimated to take 120 days following the closing of this offering), we will initiate the second stage of our strategy. The combined cost of logo development and website development is approximately $62,000. The Company anticipates that within 150 days of this offering the Company’s BETA web site and initial product offering will be launched
For the second phase of our marketing strategy, we intend to enhance and improve our website by making it both easier to use and to introduce additional services. Total cost of web site development is estimated at $5,000, we intend to increase our planed logo development to $7,000 for the year. We plan to further develop name awareness by submitting our website to search engines at an estimated cost of $20,800.
The third phase of our strategy is to extend our brand awareness by expanding our marketing efforts we intend to increase our logo development to $10,000 and increase our estimated online advertising cost to $22,800.
Competitive Advantages
Software development contractors from South Africa, India or China will be contracted to design our intended software and we will utilize the most cost effective one. Utilizing contractors means that we can offer a finished software product for a better cost to value ratio.
Intellectual Property
We intend, in due course, subject to legal advice, to apply for trademark protection and/or copyright protection in the United States, Canada, and other jurisdictions.
We intend to aggressively assert our rights under trademark and copyright laws to protect our intellectual property, including product design, product research and concepts and recognized trademarks. These rights are protected through the acquisition of trademark registrations, the maintenance of copyrights, and, where appropriate, litigation against those who are, in our opinion, infringing these rights.
While there can be no assurance that registered trademarks and copyrights will protect our proprietary information, we intend to assert our intellectual property rights against any infringer. Although any assertion of our rights can result in a substantial cost to, and diversion of effort by, our company, management believes that the protection of our intellectual property rights is a key component of our operating strategy.
Regulatory Matters
We are unaware of and do not anticipate having to expend significant resources to comply with any governmental regulations of data storage. In general, the development and operation of our business is not subject to special regulatory and/or supervisory requirements.
Environmental Laws
We have not incurred and do not anticipate incurring any expenses associated with environmental laws.
Employees and Employment Agreements
As the date of this prospectus, MCI has no permanent staff other than its sole officer and director, Mr. Sommay Vongsa, who is the President and director of the Company. Mr. Sommay Vongsa has the flexibility to work on MCI up to 20 hours per week. He is prepared to devote more time to our operations as may be required. He is not being paid at present.
There are no employment agreements in existence. The Company presently does not have pension, health, annuity, insurance, stock options, profit sharing or similar benefit plans; however, the Company may adopt plans in the future. Management does not plan to hire additional employees at this time. Our sole officer and director will be responsible for the initial servicing. Once the Company begins building its Internet website, the Company will hire an independent consultant to build the site.
AVAILABLE INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the common stock offered hereby. This prospectus, which constitutes part of the registration statement, does not contain all of the information set forth in the registration statement and the exhibits and schedule thereto, certain parts of which are omitted in accordance with the rules and regulations of the SEC. For further information regarding our common stock and our company, please review the registration statement, including exhibits, schedules and reports filed as a part there of.
Upon effectiveness of this Prospectus, we will be subject to the reporting and other requirements of the Exchange Act and we intend to furnish our shareholders annual reports containing financial statements audited by our registered independent auditors and to make available quarterly reports containing unaudited financial statements for each of the first three quarters of each year. Such reports and other information along with the registration statement, including the exhibits and schedules thereto, may be inspected at public reference facilities of the SEC at 100 F Street N.E, Washington D.C. 20549. Copies of such material can be obtained from the Public Reference Section of the SEC at prescribed rates. You may call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference room. Because we file documents electronically with the SEC, you may also obtain this information by visiting the SEC’s Internet website at http://www.sec.gov.
Reports to security holders
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 13 (a) or 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 or visiting the SEC’s Internet website (see “Available Information” above).
LEGAL PROCEEDINGS
There are no legal proceedings pending or threatening.
MY CLOUDZ, INC.
FINANCIAL STATEMENTS
(Unaudited)
February 28, 2015