As filed with the Securities and Exchange Commission on April 10, 2002
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM SB-2
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
(Amendment No 1)
Callingcard Industries, Inc.
(Exact name of small business issuer in its charter)
Nevada 4813 80-0032377
(State or other jurisdiction of (primary standard I.R.S. Employer
incorporation or organization) industrial code) Identification Number)
3550 National Avenue
San Diego, California 92113
(619) 234-2156, Fax (619) 234-5406
----------------------------------
(Address and telephone number of principal executive offices)
Agent for Service:
Daniel Najor, President
Callingcard Industries, Inc.
3550 National Avenue
San Diego, California 92113
(619) 234-2156, Fax (619) 234-5406
-----------------------------------
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
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 this box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) 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(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. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
CALCULATION OF REGISTRATION FEE
------------------------ ---------------------- ---------------------- ---------------------- ----------------------
Title of each Proposed Proposed
Class of Amount maximum Maximum Amount of
Securities to be To be offering price Aggregate registration
registered Registered per unit Offering price fee
------------------------ ---------------------- ---------------------- ---------------------- ----------------------
Maximum:
Common Stock 2,000,000 $1.00 $2,000,000.00 $478.00
Minimum:
20,000 $1.00 $20,000.00
------------------------ ---------------------- ---------------------- ---------------------- ----------------------
*This registration fee is calculated at $.000239 for the 2,000,000 shares
offered based on the maximum aggregate offering price of the securities being
registered in accordance with Rule 457 (o)."
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Note: Specific details relating to the fee calculation shall be furnished in
notes to the table, including references to provisions of Rule 457 (ss. 230.457
of this chapter) relied upon, if the basis of the calculation is not otherwise
evident from the information presented in the table. If the filing fee is
calculated pursuant to Rule 457(o) under the Securities Act, only the title of
the class of securities to be registered, the proposed maximum aggregate
offering price for that class of securities and the amount of registration fee
needed to appear in the Calculation of Registration Fee table. Any difference
between the dollar amount of securities registered for such offerings and the
dollar amount of securities sold may be carried forward on a future registration
statement pursuant to Rule 429 under the Securities Act.
The registration 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.
PROSPECTUS
April 10, 2002
CALLINGCARD INDUSTRIES, INC.
"Callingcard"
3550 National Avenue
San Diego, California 92113
(619) 234-2156, Fax (619) 234-5406
- --------------------- -------------------- ------------------ ------------------
Title of each Proposed Proposed
Class of Amount maximum Maximum
Securities to be To be offering price Aggregate
registered Registered per unit Offering price
- --------------------- -------------------- ------------------ ------------------
Maximum:
Common Stock 2,000,000 $1.00 $2,000,000.00
Minimum:
20,000 $1.00 $20,000.00
- --------------------- -------------------- ------------------ ------------------
This is a self underwritten, best efforts offering on a minimum/maximum
basis. This is not an underwritten offering. This offering will end on February
28, 2003. Funds derived from this offering will be escrowed in a Callingcard
Special Account, until the minimum of 20,000 shares at $1.00 per share ($20,000)
is sold. If only the minimum number of shares are sold (20,000), then the
Company will only have a surplus of $5,000 after the costs of this registration
statement are paid.
An investor is not limited to a minimum or maximum amount of shares allowed
to be purchased, pending availability. In the event that the minimum amount of
20,000 shares is not sold by the completion date of February 28, 2003, all funds
shall be returned to the investor(s) in its entirely, without interest, on or
before ten days after the completion date of February 28, 2003. No officer,
director, affiliates or any related party may purchase the securities offered to
meet the minimum of shares offered. Callingcard's stock is not listed on any
national securities exchange or the NASDAQ Stock Market. Callingcard intends to
apply to have its shares traded on a regional exchange and/or the OTC Bulletin
Board under the symbol:
"CALL"
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 8
Neither the SEC 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.
You should rely only on the information contained in this document.
Callingcard has not authorized anyone to provide you with information that is
different. This document may only be used where it is legal to sell these
securities.
TABLE OF CONTENTS
PART I - Prospectus Page
Prospectus Summary...................................................... 6
Risk Factors............................................................. 8
Callingcard Is In Its Earliest Stages Of Development, Has No
Operating History, And May Never Become Profitable Or
Continue As A "Going Concern"................................. 8
Callingcard Has Entered Into A "Non-Arms Length" Purchase And
Sale Agreement With A Seller Who Is An Officer And Director
of Callingcard Which Could Possibly Affect The Objectivity
Of The Management Of Callingcard.............................. 9
Callingcard's Dependence On National Telephone Companies For The
Purchase Of Long Distance Calling Time Could Cause
Callingcard Delays In Their Business Objectives............... 9
Callingcard's Dependence On Regional Distributors Could Cause
Delays In The Sales Of The Callingcard Product And
Callingcard May Not Be Able To Continue Its Business.......... 9
Callingcard's Dependence On Suitable Callingcard Unit
Manufacturers Could Cause Business Delays or Business
Failure.......................................................10
Callingcard's Heavy Dependence On Key Management Whose Lack Of
Time And Attention To Callingcard Could Result In Delays Or
Business Failure..............................................10
Callingcard's Heavy Dependence On Outside Sales Consultants And
Marketing Professionals.......................................10
Callingcard May Have Overestimated The Marketability Of The
Callingcard Concept And Has No Assurance Of Future
Industry Growth Which Could Result In Minimum Product
Sales Or Business Failure ....................................10
Callingcard's Potential Business Combinations Could Dilute
Stockholder Value.............................................11
Callingcard's Potential Business Combinations Could Be Difficult
To Integrate And May Disrupt Business Operations Resulting
In Delays Or Business Failure.................................11
Callingcard May Enter Into A New Line Of Business Which Investors
Could Not Evaluate............................................11
Callingcard May Need Additional Financing Which May Not Be
Available Or Which May Dilute The Ownership Interests Of
Investors.....................................................12
Callingcard's Common Stock Has No Prior Market And Prices May
Decline After The Offering And Could Cause The Investor To
Lose All Or Part Of The Investment............................12
Callingcard's Investors May Face Significant Restrictions On The
Resale Of Callingcard's Stock Due To State And Federal Blue
Sky Laws And Could Cause The Investor To Lose All Or Part Of
The Investment................................................12
Callingcard's Investors May Face Significant Restrictions On
The Resale Of Callingcard's Stock Due To Federal Penny Stock
Regulations ..................................................13
Callingcard's Offering Is That Of A Direct Participation, Self
Underwritten And On A Minimum/Maximum, Best Efforts Basis
And If The Minimum Amount Is Not Achieved, The Investor's
Funds May Be Held, Without Interest, Until Ten Days After
The Offering Completion Date..................................13
Callingcard's Board of Directors Has The Ability To Designate The
Rights, Preferences And Privileges Of The Authorized
Preferred Shares Which Could Cause Significant Common Share
Dilution To The Investor......................................13
Use Of Proceeds..........................................................13
Dilution.................................................................14
Determination Of Offering Price..........................................17
Plan Of Distribution.....................................................17
Legal Proceedings........................................................18
Directors, Executive Officers, Promoters And Control Persons.............18
Security Ownership Of Certain Beneficial Owners And Management...........20
Description Of Securities................................................20
Interest Of Named Experts And Counsel....................................21
Disclosure Of Commission Position On Indemnification For
Securities Act Liabilities.............................................21
Description Of Business..................................................21
Management's Discussion And Analysis Or Plan Of Operation................24
Description Of Property..................................................26
Certain Relationships And Related Transactions...........................26
Market For Common Equity And Related Stockholder Matters.................27
Executive Compensation...................................................28
Financial Statements.....................................................29
PART II - Information Not Required in Prospectus
Indemnification Of Directors And Officers................................29
Other Expenses Of Issuance And Distribution..............................29
Recent Sales Of Unregistered Securities..................................30
Exhibits ................................................................31
Undertakings.............................................................31
Part I - Prospectus
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PROSPECTUS SUMMARY
------------------
The following summary of Callingcard is qualified in its entirety by and
should be read in conjunction with the more detailed information and the
Callingcard and the predecessor company, Tver Acquisition Corp.'s Financial
Statements and notes appearing elsewhere in this Prospectus.
The common shares of stock are offered for sale at $1.00 per share of
stock. All funds received will be paid in its entirety to Callingcard Special
Account. There is no commission charged for the sale of shares in this offering.
This offering is self-underwritten and only the officers and directors, Mr.
Daniel Najor and Mr. Nazar Najor are allowed to sell these shares of stock.
There will be no commission paid on the sale of the common shares of stock in
this offering.
An investor is not limited to a minimum or maximum amount of shares allowed
to be purchased, pending availability. There is a maximum amount of 2,000,000
shares and a minimum amount of 20,000 shares to be offered and all funds will be
escrowed, in the Callingcard Special Account, until the minimum amount of 20,000
shares of common stock has been sold. In the event that the minimum amount of
20,000 shares is not sold by the completion date of February 28, 2003, all funds
shall be returned to the investor in its entirety, without interest, on or
before ten days after the completion date of February 28, 2003.
There will be no affiliates of Callingcard allowed to purchase shares to
achieve the minimum amount of the offering.
The net proceeds to Callingcard from the sale of the maximum amount of
2,000,000 shares of common stock offered by Callingcard is $2,000,000, less the
$15,000 in costs to register this offering or $1,985,000. The use of proceeds
from this offering shall be dedicated to the implementation of Callingcard's
business plan which is further defined in the "Use of Proceeds". In the event
that only the minimum amount of 20,000 shares is sold, then $15,000 shall be
used to pay for the offering expenses, only leaving a surplus of $5,000 toward
general corporate expense . If Callingcard is only able to sell a minimum or
portion of the common shares of stock offered, there is no assurance that
Callingcard will be able to obtain further financing which could possibly make
Callingcard's shares of common stock decrease substantially or to become
worthless. All investors are subject to the provisions of the Subscription
Agreement and completion of the Prospective Purchaser Questionnaire, which
includes the amount of shares purchased, the price of the shares, the provisions
of receiving the share certificate(s), and representations and warranties that
the purchaser is a qualified investor who must have a minimum net worth of
$250,000 and annual individual income of $100,000 for each of the two
predecessor years or a combined household income with spouse of $150,000 per
year for the two predecessor years, or other substantial "sophisticated
investor" indicators. The purchaser must complete a Prospective Purchaser
Questionnaire and must comply with the minimum income and net worth provisions
to be a qualified investor.
Investment Risks
An investment in this offering involves a high degree of risk. Callingcard,
and its predecessor company, Tver Acquisition Corp. is a development stage
company. The coupon market for Callingcard's products is highly competitive, and
the "Callingcard" concept is not well known. Callingcard has not developed its
potential market and, as such, has no market acceptance. Callingcard, and its
predecessor company, Tver Acquisition Corp., has a limited operating history and
a history of operating losses. Callingcard's predecessor corporation, Tver
Acquisition Corp., loss for the 12 months period ending December 31, 2001 was
$0.00. Callingcard's loss for the period ending January 31, 2002 was $300. Since
inception as a development stage company on April 21, 1998, Callingcard has
accumulated a deficit of $1480. Callingcard may continue to incur net losses in
the future and there is no assurance that Callingcard will ever be profitable.
6
Callingcard Industries, Inc.
Callingcard, formerly known as Tver Acquisition Corp., is a development
stage company which was incorporated in the State of Delaware on April 21, 1998,
under the name of Tver Acquisition Corp. Tver Acquisition Corp. then implemented
an agreement of merger and plan of reorganization with Callingcard Industries,
Inc., organized in Nevada on January 23, 2002, to effect a change of domicile to
the State of Nevada and a name change to Callingcard Industries, Inc. The date
of the merger between Tver Acquisition Corp. and Callingcard Industries, Inc.
was January 25, 2002. Callingcard has a share capitalization of 100,000,000
common shares of stock, at a par value of $.001 and 20,000,000 preferred shares
of stock, at a par value of $.001. Callingcard's executive offices are located
at 3550 National Avenue, San Diego, California 92113, telephone (619) 234-2156
and fax (619) 234-5406. Callingcard does not pay rent or other office expense
and is not expected or required to pay rent or office expenses until significant
sales have been achieved. These 2002 rent and other office expenses have been
prepaid to December 31, 2002, by a share distribution of 300,000 common shares
of stock to its officers and directors in January, 2002. Callingcard's offices
are within Daniel Najor's Food Palace grocery business at 3550 National Avenue,
San Diego, California 92113.
On December 10, 1998, Tver Acquisition Corp., now known as Callingcard
Industries, Inc., entered into a purchase and sale agreement with Daniel Najor,
Callingcard's President and Board Chairman, to develop a technology for
telephone calling cards units,suitable to patent protection, for use in the
United States and elsewhere. Callingcard issued 3,000,000 of its common shares
of stock to Daniel Najor (or his designees) who were instrumental in the
development of the calling card unit technology. On December 18, 1998,
Callingcard issued 965,000 shares of its common stock to Daniel Najor (or his
designees) for management services pertaining to the development and marketing
of the Callingcard concept and system. On February 6, 2001, patent # 6,183,917
was issued for this telephone calling card technology to Daniel Najor.
On February 8, 2001, Daniel Najor irrevocably assigned this patent to
CallingCard. It is the intention of Callingcard to implement its business by
having major national telephone services, such as AT&T, Sprint and MCI provide
the long distance service for the calling card units and Callingcard will market
these unique calling card units to consumers along with national product brands
such as beverage companies and other nationally known product corporations.
Callingcard's unique technology provides that the calling card unit can be used
as a coupon to purchase other products, such as beverages, after the life of the
calling card unit has expired. When the calling card unit user calls the "800"
number to give the PIN, the caller will hear an advertisement from the
advertising sponsor of that card. The calling card unit can be saved as a coupon
to be redeemed for merchandise goods and discount on merchandise of the
advertising sponsor, much in the same manner as a grocery coupon. Callingcard
could joint venture with other corporations for various advertising promotions
and combinations with national telephone companies and national brands to create
consumer purchases. Callingcard could place the calling card unit as a "free
standing insert" as a "gift with purchase" or "purchase with purchase" promotion
by various manufacturers. The calling card units could also be sold directly to
consumers by way of retail locations, direct mail and over the Internet. The
calling card unit sales can also be achieved through distributors of advertising
promotions or other territorial distributors. Callingcard received the patent
rights to the Callingcard technology, US Patent #6,183,017 from Daniel Najor on
February 8, 2001, after the patent was issued to Daniel Najor on February 6,
2001 as agreed to in the purchase and sale agreement
Market Opportunity
Management of Callingcard believes that the patented technology and unique
design of the calling card unit makes it a practical and unique marketing tool
to be used by national telephone companies, national product advertisers and
other advertising sources. As Callingcard is solely dependent upon this offering
to commence and sustain their business operations, it is highly unlikely that
Callingcard will be able to commence and sustain operations unless the maximum
amount, or close to the maximum amount of shares, is sold to investors by way of
this offering by February 28, 2003. Further, it is hereby stated that time is of
the essence in the obtaining of financing to enable Callingcard to commence and
sustain their business objectives.
Callingcard intends to implement its business plan by entering into a
number of advertising agreements with nationally and regionally known product
companies and distributors and nationally and regionally known telephone long
distance providers, such as AT&T, Sprint and MCI. The Callingcard "free standing
unit" (fsi) is placed within a product as a "gift with purchase" or "purchase
7
with purchase". It could also be sold directly to the consumer, via direct sales
locations, or on the Internet. The calling card unit would contain a
pre-determined advertising message, such as "Drink XYZ Cola, enter your PIN"
when the user calls the "800" access number for long distance service. The
expired calling card unit is now an advertising coupon which could be redeemed
at a later date for goods and services. Instead of a calling card unit being
thrown away after its life has expired, this calling card unit will be saved as
a merchandise coupon.
The telephone calling card system is well established and profitable for a
number of competitors. Callingcard management has developed a number of programs
for national telephone companies as long distance carriers and possible
advertising customers and national product corporations for the promotional
possibilities of the calling card unit. At the present time, Callingcard has not
entered into any agreements with national telephone companies or any national
product corporations and has no agreements in progress. Callingcard owns a
patented telephone calling card technology and a marketing concept and a system
for the implementation of these cards into main stream advertising. In the event
that only the minimum amount of the offering is achieved, or if only a small
portion of the offering is achieved, then Callingcard will only be able to
develop the Callingcard program as permitted by the funds available.
Name, Address, and Telephone Number of Registrant
Callingcard Industries, Inc.
3550 National Avenue
San Diego, California 92113
(619) 234-2156 phone; (619) 234-5406 fax
The Offering
Callingcard is offering up to 2,000,000 shares of its common stock at
$1.00 per share. Callingcard intends to have a licensed broker/dealer apply to
the OTC Bulletin Board and/or a regional stock exchange, such as the Boston
Stock Exchange (BSE), providing that Callingcard meets the listing criteria of
the BSE, following the clearance of this filing with the Securities and Exchange
Commission.
RISK FACTORS
You should carefully consider the following risk factors and all other
information contained in this prospectus before purchasing the common stock of
Callingcard. Investing in Callingcard's common stock involves a high degree of
risk. Any of the following risks could adversely affect the business of
Callingcard, it's financial condition and operating results. These risks factors
could result in a complete loss of your investment.
Investment Risks
An investment in this offering involves a high degree of risk. Callingcard
is a development stage company. The market for its products and services is not
yet established, and Callingcard has not achieved market exposure and therefore,
there is no market acceptance. Callingcard has a limited operating history and a
history of operating losses. Callingcard's loss for the twelve months ended
December 31, 2001 was $0.00. Callingcard's loss as of January 31, 2002, was
$300. Callingcard incurred losses of $1,480. since their development stage
inception period commencing April 21, 1998 until January 31, 2002. Callingcard
may continue to and is most likely to incur net losses in the future.
Risks Related to Callingcard Industries, Inc.'s Business:
Callingcard Is In Its Earliest Stages Of Development, Has No Operating History,
- -------------------------------------------------------------------------------
And May Never Become Profitable Or Continue As A "Going Concern.
- ----------------------------------------------------------------
Callingcard is in the early stages of development, with unproven management
8
in a public company, and the "Callingcard" concept is not yet known in the
marketplace. The "Callingcard" concept and business requires further exposure
and development before it can be a marketable and recognized alternative to
coupon promotions. Further, even if the "Callingcard" concept and business
become fully developed and marketable, Callingcard could fail before
implementing its business plan. It is a "start up" venture, which may incur net
losses for the foreseeable future. Callingcard has no financial operating
history, and it may face unforeseen costs, expenses, and problems that will
prevent it from becoming profitable. Callingcard's success is dependent on a
number of factors, which should be considered by prospective investors.
Callingcard has only recently commenced its business. There is no assurance that
Callingcard will ever operate profitably in the future and that it will be able
to implement its business plan of creating a viable calling card unit which is
also a coupon to be redeemed at a later date for good and services. Even if
Callingcard is successful in the implementation of its business plan by
obtaining the necessary financing to commence operations, there is no assurance
that Callingcard will be able to continue as a going concern and Callingcard's
auditor, Andersen, Andersen and Strong have stated: "The Company intends to
further develop its interest in the patent outline in Note 3, however, the
Company does not have the working capital necessary to be successful in this
effort. Continuation of the Company as a going concern is dependent upon
obtaining additional working capital and the management of the Company has
developed a strategy, which it believes will accomplish this objective through
additional equity funding and long term financing which will enable the Company
to operate for the coming year."
Callingcard Has Entered Into A "Non Arms Length" Purchase And Sale Agreement
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With A Seller Who Is An Officer And Director Of Callingcard Which Could Possibly
- --------------------------------------------------------------------------------
Affect The Objectivity Of The Callingcard Management Which Could Cause Possibly
- -------------------------------------------------------------------------------
Affect The Objectivity Of The Management Of Callingcard.
- --------------------------------------------------------
Callingcard's President, Daniel Najor is the Seller of the telephone
calling card technology to Callingcard. Even though the telephone calling card
technology is now owned outright by Callingcard, it is possible that Daniel
Najor as the inventor and founder of the calling card technology may not be as
objective about its business potential and merits as someone who is not as
closely involved with its development. Such potential lack of objectivity could
be a determining factor in corporate decisions pertaining to the corporate
development of the calling card units in the marketplace. Even though
Callingcard plans to employ various advertising consultants and other marketing
experts, it is conceivable that the Board of Directors of Callingcard would not
adhere to the advice of outside consultants and experts. The "Callingcard" name
remains the property of Callingcard pursuant to the Purchase And Sale Agreement
with Daniel Najor, however there is no tradename associated with this calling
card unit system and there is no tradename registered.
Callingcard's Dependence On National Telephone Companies For The Purchase Of
- ----------------------------------------------------------------------------
Long Distance Calling Time Could Cause Callingcard Delays In Their Business
- ---------------------------------------------------------------------------
Objectives.
- -----------
Callingcard is dependent upon the national telephone companies, such as AT
& T, Sprint and MCI, or their spur providers, to create the calling card unit
credit to be placed on the calling card unit. If Callingcard is unable to
purchase the long distance time, then the Callingcard system could not be
implemented. Also, these national telephone companies have divisions which
co-venture advertising promotions with other national brand product distributors
and their coupon programs are already in effect. Callingcard needs to be able to
purchase long distance calling time to be able to have a product to sell.and if
Callingcard encounters resistance to the selling of this long distance calling
time to Callingcard, then Callingcard would encounter significant delays or
business failure.
Callingcard's Dependence On Regional Distributors Could Cause Delays In The
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Sales Of The Callingcard Product And Callingcard May Not Be Able To Continue Its
- --------------------------------------------------------------------------------
Business.
- ---------
Callingcard heavily relies upon its ability to enter into a number of
advertising agreements, both nationally and regionally. Management of
Callingcard believes that to commence and to sustain its business, it is
imperative to establish a viable regional distribution program for the calling
card unit purchaser. If Callingcard is not able to establish a successful and
practicable regional distribution program, then Callingcard may encounter delays
and not be able to continue its business. Further, if Callingcard experiences
disruptions, regional distributor difficulties of any sort, there may be no
means of rectifying the problems on a timely basis or at all.
9
Callingcard's Dependence On Suitable Callingcard Unit Manufacturers Could Cause
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Business Delays Or Business Failure.
- ------------------------------------
The inability or unwillingness of any third-party to provide the
"Callingcard" business with suitable calling card unit manufacturers could
significantly limit Callingcard's ability to service and expand to new markets.
This may have a material adverse effect on its business, financial condition and
operating results and could cause the investor to lose all or part of the
investment.
Callingcard's Heavy Dependence On Key Management Whose Time And Attention To
- ----------------------------------------------------------------------------
Callingcard Could Result In Delays Or Business Failure.
- -------------------------------------------------------
Mr. Daniel Najor is serving as Callingcard's President and Board Chairman,
and Mr. Nazar Najor is serving as Callingcard's Secretary/Treasurer and Director
with no set compensation. Mr. Daniel Najor has received 250,000 shares of
Callingcard's common shares of stock as incentive to organize and implement
Callingcard's business plan. Mr. Nazar Najor has received 250,000 shares of
Callingcard's common stock as incentive to help organize and implement
Callingcard's business plan. The loss of Mr. Daniel Najor's services and Mr.
Nazar Najor's services may hamper Callingcard's ability to implement its
business plan, and could cause Callingcard's shares of stock to be devalued.
Callingcard is also dependent upon Mr. Daniel Najor's and Mr. Nazar Najor's
entrepreneurial skills and experience to implement the business plan and his
services would be difficult to replace. Both Daniel and Nazar Najor's time is
not solely dedicated to Callingcard and this fact may result in delay(s) in the
completion of potential market development and implementation of the business
plan. Callingcard has no employment agreements with management, and there is no
assurance these individuals will continue to manage Callingcard's affairs in the
future. Callingcard has not obtained key man life insurance on Mr. Daniel Najor
or Mr. Nazar Najor. Investors will not have any financial indicators to evaluate
the merits of Callingcard's business activity, therefore, investors should
carefully and critically assess the background of Mr. Daniel Najor and Mr. Nazar
Najor. Daniel and Nazar Najor are brothers and have been in various businesses
both together and solely prior to this offering. The possible lack of time and
attention to Callingcard could cause the investor to lose all or part of the
investment. See "Directors and Executive Officers".
Callingcard's Heavy Dependence On Outside Sales Consultants Marketing
- ---------------------------------------------------------------------
Professionals.
- --------------
Mr. Daniel Najor, Chairman and CEO of Callingcard, and the senior officer
group, have had no direct experience in the sales of calling card units or
co-advertising ventures with calling card units. However, both Daniel and Nazar
Najor, Callingcard's officers and directors are in the retail grocery business
and are familiar with the coupon segment of the advertising industry. These two
officers and directors of Callingcard do not have direct experience in the
marketing and sales of calling card units and will rely solely on experienced
marketing and advertising consultants. Although Mr. Daniel Najor and Mr. Nazar
Najor have general sales and marketing experience, Callingcard must rely on
outside consultants and hired marketing professionals to assist in the
development, sales and marketing decisions of the "Callingcard" business.
Callingcard May Have Overestimated The Marketability Of The Callingcard Concept
- -------------------------------------------------------------------------------
And Has No Assurnce Of Future Industry Growth Which Could Result In Minimum
- ---------------------------------------------------------------------------
Product Sales Or Business Failure.
- ----------------------------------
There can be no assurance that unique advertising promotions and the
calling card unit industry growth will occur or continue. Callingcard has not
conducted a formal market study. Market information presented in this prospectus
are inherently uncertain, subject to change and often dated. In addition, the
underlying market conditions are subject to change based on economic conditions,
consumer preferences and other factors beyond Callingcard's control. An adverse
change in size or growth rate of the telephone calling card unit market is
likely to have an adverse effect on Callingcard's business, financial condition
and operating results, resulting in a significant decline of the value of
Callingcard's stock and could cause the investor to lose all or part of the
investment.
Callingcard's Potential Business Combinations Dilute Stockholder Value.
- -----------------------------------------------------------------------
Callingcard may not be successful in developing a viable market for the
"Callingcard" business even though every reasonable effort will be made to
implement Callingcard's business plan. In the event that Callingcard cannot
achieve reasonable sales after a significant and concerted effort, management
10
will need to devote a significant portion of time to the evaluation of other
business opportunities which may be available to Callingcard. In the event of a
business combination, the ownership interests of holders of existing shares of
Callingcard's stock will be diluted. Due to limited financial resources, should
the initial business plan falter, the only way that Callingcard will be able to
diversify its activities would be to enter into a business combination.
Any asset acquisition or business combination would likely include the
issuance of a significant amount of Callingcard's common shares of stock, which
would dilute the ownership interest of holders of existing shares, and may
result in a majority of the voting power being transferred to new investors.
Depending on the nature of the transaction, Callingcard's stockholders may not
have an opportunity to vote on the transaction. For example, Callingcard's Board
of Directors may decide to issue an amount of stock to effect a share exchange
with another company. Such a transaction does not require shareholder approval,
but Callingcard's officers and directors must exercise their powers in good
faith, with the best interests of the corporation in mind, however such business
combination could cause the investor to lose all or part of the investment.
Callingcard's Potential Business Combinations Could Be Difficult To Integrate
- -----------------------------------------------------------------------------
And May Disrupt Business Operations Resulting In Delays Or Business Failure.
- ----------------------------------------------------------------------------
Any acquisition or business combination could disrupt Callingcard's ongoing
business, distract management and employees and increase operating expenses. If
Callingcard acquires a company or joint venture partner on any of Callingcard's
business promotions, Callingcard could face difficulties in assimilating that
company's personnel and operations. In addition, the key personnel of the
acquired company may decide not to work for Callingcard. Acquisitions also
involve the need for integration of administration, services, marketing, and
support efforts. Any amortization of goodwill or other assets, or other charges
resulting from the costs of these acquisitions could limit Callingcard's
profitability and decrease the value of its stock. In addition, Callingcard's
liquidity and capital resources may be diminished prior to, or as a result of,
the consummation of a business combination and its capital may be further
depleted by the operating losses (if any) of the acquired business entity and
could cause the investor to lose all or part of the investment..
Callingcard May Enter Into A New Line Of Business Which Investors Could Not
- ---------------------------------------------------------------------------
Evaluate.
- ---------
In the event of a business combination, acquisition, or change in
shareholder control, Callingcard may enter in to a new line of business, which
an investor did not anticipate and in which that investor may not want to
participate. Callingcard may make investments in or acquire complementary
products, technologies and businesses, or businesses completely unrelated to its
current business plan. Similarly, an asset acquisition or business combination
would likely include the issuance of a significant amount of Callingcard's
common shares of stock, which may result in a majority of the voting power being
transferred to new investors. New investors may replace Callingcard's
management. This potential new management may decide not to continue to
implement Callingcard's current business plan, and may decide to enter into a
business completely unrelated business which an investor did not anticipate and
in which that investor may not want to participate. In such case, an investor
could lose part of the investment or their entire investment.
Financial Risks
Callingcard May Need Additional Financing Which May Not Be Available.
- ---------------------------------------------------------------------
Callingcard's ultimate success will depend on its ability to raise
investment capital and no commitments to provide additional funds have been made
by management or other shareholders. Callingcard has not investigated the
availability, source or terms that might govern the acquisition of additional
financing. When additional capital is needed, there is no assurance funds will
be available from any source or, if available, that they can be obtained on
terms acceptable to Callingcard. If additional capital is not available,
Callingcard's operations would be severely limited, and it would be unable to
implement its business plan and could cause the investor to lose all or part of
the investment.
11
Risks Related to the Securities Market
Callingcard's Common Stock Has No Prior Market, And Prices May Decline After The
- --------------------------------------------------------------------------------
Offering And Cause The Investor To Lose All Or Part Of The Investment.
- ----------------------------------------------------------------------
There is no public market for Callingcard's common stock and no assurance
can be given that a market will develop or that any shareholder will be able to
liquidate its investment without considerable delay, if at all. The trading
market price of Callingcard's common stock may decline below the offering price.
If a market should develop, the price may be highly volatile. In addition, an
active public market for Callingcard's common stock may not develop or be
sustained. Factors such as those discussed in this "Risk Factors" section may
have a significant impact on the market price of Callingcard's securities. Owing
to the low price of the securities, many brokerage firms may not be willing to
effect transactions in the securities. Even if a purchaser finds a broker
willing to effect a transaction in Callingcard's common shares of stock, the
combination of brokerage commissions, state transfer taxes, if any, and other
selling costs may exceed the selling price. Further, many lending institutions
will not permit the use of such securities as collateral for loans. Thus, a
purchaser may be unable to sell or otherwise realize the value invested in
Callingcard and could cause an investor to lose all or part of the investment.
Callingcard's Investors May Face Significant Restrictions On The Resale Of
- --------------------------------------------------------------------------
Callingcard's Stock Due To State Blue Sky Laws And Could Cause The Investor To
- ------------------------------------------------------------------------------
Lose All Or Part Of The Investment.
- -----------------------------------
Because Callingcard's securities have not been registered for resale under
the blue sky laws of any state, the holders of such shares and those persons
desiring to purchase them in any trading market that may develop in the future
should be aware that there may be significant state blue sky law restrictions on
the ability of investors to sell or purchasers to buy Callingcard's securities.
Each state has its own securities laws, often called "blue sky laws", which
limit sales of stock to a state's residents unless the stock is registered in
that state or qualifies for an exemption from registration. This governs the
reporting requirements for broker-dealers and stockbrokers doing business
directly or indirectly in the state. Before a security is sold in a state, there
must be a registration in place to cover the transaction, and the broker must be
registered in that state or otherwise be exempt from registration. Callingcard
does not know whether its stock will be registered under the laws of any states.
A determination regarding registration will be made by the broker-dealers, if
any, who agree to serve as the market-makers for Callingcard's shares of stock.
Accordingly, investors should consider the secondary market for
Callingcard's securities to be a limited one. Investors may be unable to resell
their stock, or may be unable to resell it without the significant expense of
state registration or qualification and could cause the investor to lose all or
part of the investment.
Callingcard's Investors May Face Significant Restrictions On The Resale of
- --------------------------------------------------------------------------
Callingcard's Shares Of Stock Due To Federal Penny Stock Regulations And Could
- ------------------------------------------------------------------------------
Cause The Investor To Lose All Or Part Of The Investment.
- ---------------------------------------------------------
In addition, the Securities and Exchange Commission has adopted a number of
rules to regulate "penny stocks." Such rules include Rules 3a51-1, 15g-1, 15g-2,
15g-3, 15g-4, 15g-5, 15g-6 and 15g-7 under the Securities and Exchange Act of
1934, as amended. Because Callingcard's securities may constitute "penny stock"
within the meaning of the rules, the rules would apply to Callingcard and its
securities. The rules may further affect the ability of owners of Callingcard's
shares to sell their securities in any market that may develop for them. There
may be a limited market for penny stocks, due to the regulatory burdens on
broker-dealers. The market among dealers may not be active. Investors in penny
stock often are unable to sell stock back to the dealer that sold them the
stock. The mark ups or commissions charged by the broker-dealers may be greater
than any profit a seller may make. Because of large dealer spreads, investors
may be unable to sell the stock immediately back to the dealer at the same price
the dealer sold the stock to the investor. In some cases, the stock may fall
quickly in value. Investors may be unable to reap any profit from any sale of
the stock, if they can sell it at all.
12
Callingcard's Offering Is A Direct Participation, Self Underwritten
- -------------------------------------------------------------------
Minimum/Maximum, Best Efforts Basis, And If The Minimum Amount Is Not Achieved,
- -------------------------------------------------------------------------------
The Investor's Funds May Be Held, Without Interest, Until Ten Days After The
- ----------------------------------------------------------------------------
Offering Completion Date.
- -------------------------
All funds derived from the sale of Callingcard's shares in this offering
shall be escrowed until the minimum amount of $20,000 representing 20,000 shares
@ $1.00 per share is achieved. If that amount is not achieved until the
completion date of February 28, 2003, the investor's funds may be held, without
interest, and not returned to the investor until 10 days after the completion
date or February 28, 2003. There will not be any funds withheld in the event
that the minimum amount is not achieved, however the investor will lose the
benefit of interest on the funds held.
Callingcard's Board Of Directors Has The Ability To Designate The Rights,
- -------------------------------------------------------------------------
Preferences And Privileges Of The Authorized Preferred Shares Which Could Cause
- -------------------------------------------------------------------------------
Significant Common Share Dilution To The Investor.
- --------------------------------------------------
Callingcard's Articles of Incorporation and Bylaws allow the Board of
Directors to issue Preferred Shares and to designate what those preferences are
as opposed to the common shareholders. Callingcard could issue preferred shares
for assets or financing and Callingcard's Board of Directors would have the sole
authority to designate the rights attached to those preferred shares. Those
preferred shares could convert into a pre-determined amount of common shares.
This conversion from preferred shares to common shares would cause dilution to
the investors shares. Every conversion from preferred shares to common shares
will carry the voting rights of one vote per common share and could affect the
control of the management of Callingcard. Additionally, in the case of a
corporate liquidation, preferred shareholders have preferred rights over common
shareholders. Such rights of preferred shareholders could substantially dilute
shareholder value.
USE OF PROCEEDS
The net proceeds to Callingcard from the sale of the 2,000,000 shares of
common stock offered by Callingcard, at the public offering price of $1.00. per
share, is $2,000,000, less the cost of the offering which is estimated to be
$15,000 or $1,985,000. This Offering is a self-underwriting and Daniel Najor,
President and Board Chairman and Nazar Najor, Secretary/Treasurer and Director
of Callingcard is solely responsible for the sale of the stock. There is no
commission being paid to management for the sale of the shares of stock and
Callingcard does not have commissioned sales people selling these shares of
stock. If only the minimum amount of 20,000 common shares of stock are sold,
then $15,000 shall be used to pay for the offering fees and Callingcard would
have a surplus of $5,000 for general corporate purposes. Investors should be
aware that if Callingcard is only able to sell the minimum amount of shares
registered for sale in this offering ,there is no assurance that Callingcard
will be able to obtain any additional financing which would possibly make
Callingcard's share of common stock decrease substantially or to become
worthless. If the maximum amount of common shares of stock are sold by way of
this offering, Callingcard expects to use the net proceeds in the following
manner:
Net Proceeds if all shares are sold by Callingcard: $2,000,000
$ 500,000 - Telephone Long Distance Service Purchase
250,000 - Calling Card Unit Manufacturing
250,000 - Advertising and Marketing
500,000 - Co-advertising Programs
485,000 - General Working Capital
15,000 - Offering Expense
Total Use of Proceeds: $2,000,000
Net Proceeds if 50% of the shares are sold by Callingcard: $1,000,000
$ 250,000 - Telephone Long Distance Service Purchase
250,000 - Calling Card Unit Manufacturing
250,000 - Advertising and Marketing
235,000 - Working Capital
15,000 - Offering Expense
Total Use of Proceeds: $1,000,000
13
Net Proceeds if 25% of the shares are sold by Callingcard: $500,000
$ 100,000 - Telephone Long Distance Service Purchase
100,000 - Calling Card Unit Manufacturing
200,000 - Advertising and Marketing
85,000 - Working Capital
15,000 - Offering Expense
Total Use of Proceeds: $500,000
Net Proceeds if the minimum amount of shares are sold by Callingcard: $20,000
These funds will be used for the expenses of the offering and general
corporate expenses.
The priorities in the use of proceeds is that to implement the marketing
program for Callingcard locations. The advertising and marketing expense is the
next priority to achieve a customer base for calling card unit sales. The amount
of the shares sold in the offering will determine how many markets (cities) the
Callingcard business plan will be implemented. If the maximum amount of shares
of stock are sold, then Callingcard will seek to implement its plan in the South
Western region of the United States; if less than the maximum is sold, then
Callingcard will implement its business plan accordingly.
In the event that only 25% or 500,000 common shares of stock are sold, then
Callincard would concentrate its business plan on a limited and local basis
only. In the event that 50% or 1,000,000 common shares of stock are sold, then
Callingcard would initiate its plan on a local basis and potentially expand
regionally and/or nationally if Callingcard is able to achieve sales. There is
no assurance that Callingcard will ever be able to initiate or sustain sales.
If Callingcard is not successful in their first sales and advertising
market, the second sales and advertising market or subsequent sales and
advertising markets, if any, and if Callingcard has exhausted all possibility of
continuing with the Callingcard concept, then Management will seek other
profitable business opportunities and will act accordingly with the funds
remaining. At this time, there is no plan to dedicate any funds to any other
business than the Callingcard concept. Callingcard will continually evaluate
other business opportunities that may be available to it, whether in the form of
assets acquisitions or business combinations. Callingcard may use a portion of
the proceeds for these purposes only if the Callingcard concept is proven to be
unsuccessful and there are no plans to spend any of the proceeds on other
business. Callingcard is not currently a party to any contracts pertaining to
the acquisition of store locations or any real estate. Callingcard is not a
party to any letters of intent, commitments or agreements and is not currently
engaged in active negotiations with respect to any acquisitions other than that
as described herein. Callingcard has not investigated any other business
opportunity at this time and does not plan to do so unless the Callingcard
concept is not a viable business.
Callingcard has not yet determined the specific amounts of "net proceeds"
to be used specifically in the general categories as described herein.
Accordingly, Callingcard's management will have significant flexibility in
applying the net proceeds of the Offering.
DILUTION
Callingcard is authorized to issue a substantial number of shares of common
stock, up to the authorized share capital of 100,000,000 common shares of stock
and 10,000,000 preferred shares of stock, in addition to the shares comprising
the shares in this offering. The preferred stock can be issued in such series
and with such designating rights and preferences as may be determined by the
Board of Directors at its sole discretion. In the event that Callingcard does
not achieve the maximum by way of this offering, Callingcard will require
significant additional financing to fully implement its business plan, and such
funding could entail the issuance of a substantial number of additional shares
of stock which could cause a material dilution to investors in this offering.
As of January 31, 2002, Callingcard had a net tangible book value of $0.00.
The following table sets forth the dilution to persons purchasing shares in this
offering without taking into account any changes in Callingcard's net tangible
book value, except for the sale of the shares in this offering at a price of
$1.00 per share. The net tangible book value per share is determined by
subtracting the total liabilities from the tangible assets, divided by the total
number of shares of common stock outstanding. The following tables reflect the
14
dilution if (1) the minimum amount of 20,000 shares are sold in this offering;
(2) the midpoint amount of 1,000,000 shares are sold in this offering; and (3)
the maximum amount of 2,000,000 shares are sold in this offering.
- -------------------------------------------------------------- ----------------------------------------------------------
Prior to After Prior to After Sale of
Sale Sale of Sale 1,000,000
(Jan.31, 2002) 20,000 Shares (Jan. 31, 2002) Shares
- -------------------------------------------------------------- ----------------------------------------------------------
Number of Shares 4,480,000 4,500,000 Number of Shares 4,480,000 5,480,000
- -------------------------------------------------------------- ----------------------------------------------------------
Public offering price n/a 1.00 Public offering price n/a 1.00
per share per share
- -------------------------------------------------------------- ----------------------------------------------------------
Net tangible book Net tangible book
value per share of value per share of
common stock before 0 0 common stock before 0 0
the offering the offering
- -------------------------------------------------------------- ----------------------------------------------------------
Pro forma net tangible Pro forma net tangible
book value per share book value per share
of common stock after 0 .00044 of common stock after 0 .182
the offering the offering
- -------------------------------------------------------------- ----------------------------------------------------------
Increase to net tangible Increase to net tangible
book value per share book value per share
attributable to purchase attributable to purchase
of common stock by 0 .00044 of common stock by 0 .182
new investors new investors
- -------------------------------------------------------------- ----------------------------------------------------------
Dilution to new investors n/a .999 Dilution to new investors n/a .818
- -------------------------------------------------------------- ----------------------------------------------------------
15
- ---------------------------------------------------------
After Sale
Prior to of
Sale 2,000,000
(Jan. 31, 2002) Shares
- ---------------------------------------------------------
Number of Shares 4,480,000 6,480,000
- ---------------------------------------------------------
Public offering price n/a 1.00
per share
- ---------------------------------------------------------
Net tangible book
value per share of
common stock before 0 0
the offering
- ---------------------------------------------------------
Pro forma net tangible
book value per share
of common stock after 0 .3086
the offering
- ---------------------------------------------------------
Increase to net tangible
book value per share
attributable to purchase 0 .3086
of common stock by
new investors
- ---------------------------------------------------------
Dilution to new investors n/a .691
- ---------------------------------------------------------
16
Callingcard's net tangible book value per share is determined by dividing
the number of shares of common stock outstanding into the net tangible book
value.
On May 3, 1998, 200,000 restricted common shares of stock were issued to
the officers and directors of Callingcard; 100,000 to Daniel Najor and 100,000
to Nazar Najor for organizational and management services from April 21, 1998 to
December 31, 2001. On January 24, 2002, 300,000 restricted common shares of
stock were issued to the officers and directors of Callingcard; 100,000 to
Daniel Najor and 100,000 to Nazar Najor for management services from January 1,
2002 to December 31, 2002. There is no plan to further compensate the officers
and directors until the business is implemented and sales are achieved. At that
time, the officers and directors services will be assessed.
On December 10, 1998, 3,000,000 restricted common shares of stock were
issued to Daniel Najor, the President and Board Chairman of Callingcard (or
designees) in exchange for the "Callingcard" telephone technology. On December
18, 1998, 965,000 restricted common shares of stock were issued to Daniel Najor,
the President and Board Chairman of Callingcard (or designees), in exchange for
management services pertaining to the purchase and sale agreement pursuant to
the development of the "Callingcard" concept. These issuances are to be
considered as a "non-arms length" transaction.
This offering itself involves immediate and substantial dilution to
investors. Any common shares of stock issued or preferred shares of stock issued
in the future, including issuances to management, could reduce the proportionate
ownership, economic interests and voting rights of any holders of common shares
of stock purchased in this offering.
DETERMINATION OF OFFERING PRICE
Callingcard arbitrarily determined the price of the common shares of stock
in this Offering. The offering price is not an indication of and is not based
upon the actual value of Callingcard. The offering price bears no relationship
to the book value, assets or earnings of Callingcard or any other recognized
criteria of value. The offering price should not be regarded as an indicator of
the future market price of the securities.
PLAN OF DISTRIBUTION
Callingcard intends to sell a minimum of 20,000 shares of common stock and
a maximum of 2,000,000 shares of its common stock to the public on a
self-underwriting "best efforts" basis. There can be no assurance that any of
these common shares of stock will be sold. This Offering may only be sold by
Daniel Najor, Callingcard's President and Board Chairman, and Nazar Najor,
Secretary/Treasurer and Director. There is no commission being charged to
Callingcard. The gross proceeds to Callingcard will be $2,000,000, less the
$15,000 in offering costs, netting Callingcard $1,985,000, if all the common
shares of stock offered are sold by Callingcard. The gross proceeds to
Callingcard will be $20,000 if only the minimum amount of common shares of stock
offered is sold by Callingcard and in that event, Callingcard will be able to
pay the offering costs of $15,000 and obtain a surplus of $5,000 which will be
used for general corporate expense. No public market currently exists for the
common shares of Callingcard's common stock. Callingcard intends to have a
licensed broker/dealer apply to have its shares traded on a regional stock
exchange and/or the OTC bulletin board under the symbol "CALL". All prospective
purchasers will be subject to the provisions of the Subscription Agreement,
Exhibit 4.2, and Prospective Purchaser Questionnaire. The Subscription Agreement
will have the amount of shares to be purchased, the price of the shares, how to
17
send funds and other provisions and information of the purchaser. In the
Prospective Purchaser Questionnaire, the prospective purchaser of common shares
of stock of this offering needs to meet the minimum income and net worth
requirements in order to be deemed as a qualified investor. If the prospective
purchaser of common shares of stock in this offering does not meet the income
and net worth requirement, then Callingcard will reject such Subscription
Agreement and return all funds, if received.
LEGAL PROCEEDINGS
Callingcard is not a party to any pending legal proceeding or litigation
and none of its property is the subject of a pending legal proceeding. Further,
the officers and directors know of no legal proceedings threatened or
anticipated against Callingcard or its property by any entity or individual or
any legal proceedings contemplated by any governmental authority.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, SIGNIFICANT
EMPLOYEES AND CONTROL PERSONS
The following table sets forth the name, age and position of each director
and executive officer and control person of Callingcard.
----------------------------- ---------- ------------------------------------
NAME AGE POSITION
----------------------------- ---------- ------------------------------------
Daniel Najor 48 President, Board Chairman
Nazar Najor 57 Secretary/Treasurer and Director
----------------------------- ---------- ------------------------------------
On April 24,1998, the Board of Directors was elected and installed. Nazar
Najor was President and Board Chairman and Daniel Najor was Secretary/Treasurer
and Director. In January, 2002 when the predecessor corporation, Tver
Acquisition Corp., a Delaware corporation, facilitated a merger and change of
domicile and name to the state of Nevada. At that time, Mr. Daniel Najor became
President and Board Chairman and Mr. Nazar Najor became Secretary/Treasurer and
Director. Callingcard's Bylaws provide for their officers and directors to serve
for a term of 2 years, Unless otherwise notified by way of a Board of Directors
Meeting. Shareholders can elect new directors at an annual general shareholders
meeting or extraordinary or special shareholders meeting which would take
precedence over the 2 year term provision in the Callingcard Bylaws. Therefore,
the officers and directors will be elected for one-year terms at the annual
shareholders' meeting. The officers will hold their positions at the pleasure of
the Board of Directors.
Daniel Najor, President and Board Chairman:
- -------------------------------------------
Originally from Detroit, Michigan, Daniel Najor started his business career
in the grocery business. In 1974, at the age of 21, purchased his first
supermarket, Great Scott Supermarket in Lakeside, California, with his brothers.
Great Scott Supermarket was over 14,000 square feet and had gross sales of
approximately $7,000,000 per annum. Mr. Daniel Najor owned 25% of that store and
sold it two years later. Mr. Najor has over 25 years of experience in the
grocery business and has experience in food retailing, food manufacturing, cost
controls, and all facets of grocery and fresh food preparations. Mr. Daniel
Najor is the Co-Founder, President and Director of Contexual Trading Company,
Inc. Mr. Najor presently operates the day to day activity of the "Food Palace
Supermarket" grocery store, owned by Contexual Trading Company, Inc. Mr. Najor
also has a substantial interest in the development of new technology and
developed the Callingcard concept and system due to his experience in selling
calling cards and redeeming coupons in the normal course of business of
operating a grocery business.
18
Mr. Najor has been involved in the financing business since 1984 and has
completed over $200 million dollars in Finaning pertaining to real estate and
corporate finance. Daniel Najor is President of DLN Financial, Inc. since its
inception in 1986. Mr. Najor also served as a director of Cypress Financial
Services, Inc., a publicly held company from 1996 to 1997; Cypress Financial
Services, Inc.was in the financial services and financial collection industry.
Mr. Najor is an experienced business executive and is the co-founder of
Callingcard and the co-inventor of the patent of the calling card unit which is
now the asset of Callingcard. Daniel Najor is the founder and former Board
Chairman of Virtual Gaming Technologies, Inc. "VGTI", a publicly held company
which developed gaming software for the gaming industry. Mr. Najor is also the
founder, President and Board Chairman of Food Palace International, Inc., which
is the franchisor for a specialty grocery market and the founder and Board
Chairman of Tierra Telecom, Inc.
Summary of Professional Experience of Daniel Najor within the last five
years:
Current positions:
President/Board Chairman -January, 2002 to present - Callingcard
Industries, Inc. Duties include setting policy for the implementation
of the Callingcard business plan, the financing of the business plan
and all other aspects of day to day activity.
Secretary/Treasurer/Director - April, 1998 to January, 2002 - Tver
Acquisition Corp., predecessor company to Callingcard Industries, Inc.
Duties included the development of the Callingcard technology and
system and all other secretary /treasurer and director duties.
Board Chairman - 1996 to present - Virtural Gaming Technologies, Inc., a
public company which developed gaming software. Duties include setting
policy for management and other board related responsibilities.
President/Director - 1986 to present - DLN Financial, Inc., mortgage
brokerage firm and mortgage loan originators. Duties include setting
policy for management and other board related responsibilities.
Founder/ Board Chairman - 1999 to present - Tierra Telecom, Inc., a company
which manufactures telephone Switches. Duties include setting policy
for management and other board related responsibilities
President/ Board Chairman - 1998 to present - Food Palace International,
Inc.
Co-Founder, President/Director - 1976 to present - Contexual Trading
Company, owner of Food Palace grocery store and related Food Palace
fresh food and grocery products. Duties include overseeing day to day
activity of the retail grocery business and its related services and
other board related responsibilities.
Daniel Najor has been married for 19 years with 3 children, ages 17, 15 and
4. Daniel Najor is a licensed pilot, enjoys business and travel, founding
technology and other business projects and golf.
Nazar Najor, Secretary/Treasurer & Director:
--------------------------------------------
Mr. Nazar Najor is a multi-faceted experienced business executive, with an
extensive retail grocery, restaurant and real estate development background. Mr.
Najor is currently the Chief Executive Officer of Live Oak Springs Resort in
Boulevard, California. Mr. Najor developed the entire resort and oversees the
day to day operation of all departments of the resort, including the restaurant,
market, lodging facilities, mobile home park, recreational vehicle part and PUC
water company.
In addition to Mr. Najor's development and overseeing the operations of the
Live Oak Springs Resort, Mr. Najor also acts as an integral members of the Board
of Directors of Contexual Trading Company, Inc., owner of the Food Palace
Supermarket, San Diego, California. Mr. Najor has owned and managed the
Lakeshort Farms Market in Lakeside, California and owned and managed the
Rackhouse Restaurant in Lakeside, California.
Mr. Najor has a diverse educational background in business, law and
communications for a period of over 20 years, including 5 years of Philosophy
and Science. Even though Mr. Najor has not obtained a degree in any one subject,
he acts as a communications coach due to his education and training in Advanced
Communications.
Summary of Professional Experience of Nazar Najor within the last five
years:
Secretary/Treasurer/Director - January, 2002 to present - Callingcard
Industries, Inc. Duties include all secretary/ treasurer and director
duties. Mr. Nazar Najor is not responsible for the day to day activity
of the company.
19
President/Board Chairman - April, 1998 to January, 2002 - Tver Acquisition
Corp., predecessor of Callingcard Industries, Inc. Duties included the
acquisition and the development of the Callingcard technology.
Chief Executive Officer/Director - 1984 to Present -Live Oak Springs
Resort. Duties include all phases of the resort's operation and all
day to day activity
Director - 1996 to present - Contexual Trading Co. - Duties include setting
policy for management and all other director responsibilities.
Secretary/Treasurer/Director - Food Palace International, Inc. - Duties
include developing the Food Palace franchise and marketing concept and
all other secretary and treasurer and director duties.
Daniel Najor and Nazar Najor have been the only two officers and directors
since the inception of Callingcard on April 21, 1998. Mr. Nazar Najor was
President and Board Chairman of the predecessor company, Tver Acquisition Corp.;
Mr. Daniel Najor was Secretary/Treasurer and Director of the predecessor
company, Tver Acquisition Corp.
Mr. Daniel Najor anticipates spending at least 8 hours per week on this
project after completion of adequate financing and Mr. Nazar Najor anticipates
spending 5 hours per month on company duties. Mr. Daniel Najor and Mr. Nazar
Najor are brothers.
ADVISORY BOARD
Mr. Daniel Najor, will act as Advisory Board Chairman for a term of two
years. Mr. Daniel Najor is actively recruiting Callingcard's first advisors. All
advisors shall be compensated with restricted common shares of Callingcard's
stock commensurate with their services.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of January 31, 2001, Callingcard's
outstanding common stock owned of record or beneficially by each Executive
Officer and Director and by each person who owned of record, or was known by
Callingcard to own beneficially, more than 5% of its common stock, and the share
holdings of all Executive Officers and Directors and Significant Employees as a
group. Each person has sole voting and investment power with respect to the
shares shown.
Percentage of
Name Shares Owned Shares Owned
- --------------------------------------------------------------------------------
Daniel Najor, President and Board Chairman 250,000 5.58%
3550 National Avenue
San Diego, California 92113
Nazar Najor, Secretary/Treasurer & Director 250,000 5.58%
3550 National Avenue
San Diego, California 92113
Other Najor family members As a Group 1,100,000 24.55%
Each family member owns less than 5%
- --------------------------------------------------------------------------------
ALL EXECUTIVE OFFICERS & DIRECTORS
AND SIGNIFICANT EMPLOYEES, AND 37.71%
BENEFICIAL OWNERS AS A GROUP
- --------------------------------------------------------------------------------
DESCRIPTION OF SECURITIES
The following description of Callingcard's capital stock is a summary of
the material terms of its capital stock. This summary is subject to and
qualified in its entirety by Callingcard's Articles of Incorporation and Bylaws,
which are included as exhibits to the registration statement of which this
prospectus forms a part, and by the applicable provisions of Nevada law.
The authorized capital stock of Callingcard consists of 100,000,000 shares:
100,000,000 shares of Common Stock having a par value of $0.001 per share and
10,000,000 shares of Preferred Stock having a par value of $0.01 per share. The
Articles of Incorporation do not permit cumulative voting for the election of
directors, and shareholders do not have any preemptive rights to purchase shares
in any future issuance of Callingcard's common stock.
The holders of shares of common stock of Callingcard do not have cumulative
voting rights in connection with the election of the Board of Directors, which
means that the holders of more than 50% of such outstanding shares, voting for
the election of directors, can elect all of the directors to be elected, if they
so choose, and, in such event, the holders of the remaining shares will not be
able to elect any of Callingcard's directors.
The holders of shares of common stock are entitled to dividends, out of
funds legally available therefore, when and as declared by the Board of
Directors. The Board of Directors has never declared a dividend and does not
anticipate declaring a dividend in the near future. Each outstanding share of
common stock entitles the holder thereof to one vote per share on all matters.
The holders of the shares of common stock have no preemptive or subscription
rights. In the event of liquidation, dissolution or winding up of the affairs of
the corporation, Callingcard's shareholders are entitled to receive, ratably,
the net assets of Callingcard available to shareholders after payment of all
creditors. Article IV in Callingcard's Articles of Incorporation states that:
"The holders of the preferred shares and common shares are entitled to receive
the net assets of the corporation upon dissolution. The Board of Directors can
restructure the issued and outstanding shares with respect to a forward or
reverse split, without a shareholders meeting, general or special meeting,
providing that 50% of the shareholders agree to the share reorganization within
the limits of the share capitalization of 100,000,000 shares of common stock and
or 10,000,000 preferred stock. Article V of Callingcard's Articles of
Incorporation states that "Any such change of the Bylaws must be agreed to by
the majority of the shareholders. The Board of Directors shall not make or alter
any By-laws fixing their qualifications, classifications, terms of office or
extraordinary powers without first securing the approval of the majority (50% or
more) of the shareholders. Such majority approval may be obtained by the Board
of Directors without the necessity of a Special or Extraordinary General Meeting
of the corporation's shareholders. Such majority shareholder approval may be
obtained by written proxy statement or a polling of the shareholders by
telephone or telefax". Callingcard's Bylaws, Article II provides for an annual
shareholders meeting to be held on or before June 30th of each year at 11:00 AM,
at which time the shareholders shall elect a Board of Directors (every two years
or otherwise appropriate) and transact any other appropriate business. The
shareholders have the right to effect a change of control at the annual meeting.
Special meetings of the shareholders may be called by the Board of Directors or
such additional persons as may be deemed authorized by the Board of Directors
provided in the Articles and Bylaws and amendments.
As of the date of this Registration Statement, there are 4,480,000 common
shares of stock issued and outstanding and 174 shareholders. There are no
warrants or options issued as of this date. There are no stock option plans in
effect for officers, directors and significant employees. Callingcard's officers
and directors have been issued a total of 500,000 restricted shares each,
representing 250,000 shares for each of the 2 officers/directors, Daniel Najor
and Nazar Najor. To the extent that additional shares of Callingcard's common
stock are issued, the relative interests of existing shareholders may be
diluted.
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INTEREST OF NAMED EXPERTS AND COUNSEL
These experts have been retained in connection with the registration or
this offering of Callingcard's common shares of stock. Mr. Tolan Furusho,
Attorney at Law, 12729 Northup Way, Bellevue, Washington 98005, (425) 452-8639,
was retained to provide the legal opinion regarding the corporation in
connection with this offering. Mr. Furusho does not own shares of stock of
Callingcard. Andersen, Andersen & Strong, 941 East 3300 South, Salt Lake City,
Utah 84106, has been engaged to provide the audited financial statements in
connection with this offering.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Callingcard's Bylaws, filed herewith as Exhibit 3.2, provide in ByLaw VII
that it will indemnify and hold harmless each "corporate officer, director and
agent" who is or is threatened to be made a party to or is otherwise involved in
any threatened proceedings by reason of the fact that he or she is or was a
director or officer of Callingcard or is or was serving at the request of
Callingcard as a director, officer, partner, trustee, employee, or agent of
another entity, against all losses, claims, damages, liabilities and expenses
actually and reasonably incurred or suffered in connection with such proceeding.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
Callingcard pursuant to the foregoing provisions or otherwise, Callingcard has
been advised that, in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in that Act and is,
therefore, unenforceable.
DESCRIPTION OF BUSINESS
Background
----------
Callingcard was formed as Tver Acquisition Corp. under the laws of the
State of Delaware on April 21, 1998. On January 23, 2002, Callingcard
Industries, Inc was incorporated in the State of Nevada. The Delaware
corporation entered into a merger agreement with the Nevada Corporation,
pursuant to an Agreement and Plan of Merger and Reorganization adopted by the
Board of Directors of each corporation. The effective date was January 25, 2002
and the State of Nevada effected the merger as of July 7, 1998, when the
documents were filed with the State of Nevada. The Nevada corporation issued its
shares on a one for one basis with the Delaware corporation. Callingcard is in
its early developmental and promotional stages. To date, Callingcard's
activities have been to evaluate certain business opportunities commencing with
the potential market of a proprietary bicycle lock product in the United States.
That project was abandoned when the opportunity of the "Callingcard" concept was
presented. Callingcard's efforts have been organizational, directed at the
development of the "Callingcard" distribution business and the raising of its
initial capital. Callingcard has not commenced commercial operations.
Callingcard has only two part time employees, that being Callingcards's officers
and directors, Daniel Najor and Nazar Najor. Callingcard has no full time
employees and owns no real estate. Callingcard's business plan is to enter the
market with the "Callingcard" concept and system on the most cost effective
basis known to management, i.e. to present the Callingcard concept to national
product manufacturers, such as soft drink companies, and include their soft
drink advertising on the back of the Callingcard unit which will be used by the
consumer for long distance calling and when the long distance telephone credit
is used, then the Callingcard unit will become a coupon for the advertisers
goods and services. The Callingcard unit can be a free promotion with a product,
such as a $10. Callingcard unit can be included in a 24 package of soft drinks
and the consumer will have $10 in free telephone long distance time with the
purchase of soft drinks. In this case, the soft drink manufacturer will pay
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Callingcard for the Callingcard units. In another circumstance, the Callingcard
units can be purchased from convenience, grocery and drug stores. The purchaser
is usually a long distance telephone called who purchased the long distance
telephone time cards from competitors. The difference with the Callingcard
concept is that when the long distance telephone time has been used, the
consumer gets a coupon on the back of the card to be redeemed for goods and
services, as opposed to an empty card with no further value. The co-advertising
of national products with the calling card units is the first projected business
which will initially implemented upon financing.
There are both common and preferred shares authorized by Callingcard.
Callingcard's has a share capitalization of 100,000,000 common shares at a par
value of $.001 per share and 10,000,000 preferred shares authorized, at a par
value of $.001. There were 10,000,000 preferred shares of stock authorized in
the predecessor Delaware corporation. Callingcard's principal executive offices
are in San Diego, California within the offices of the telephone calling card
technology, Mr. Daniel Najor, who is also the President and Board Chairman of
Callingcard. The offices are located at 3550 National Avenue, San Diego,
California 92113. Callingcard does not pay rent or other office expense and is
not expected to pay rent or office expenses until significant sales have been
completed.
General
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In addition to the "Callingcard" calling card unit concept of direct long
distance telephone time sales in regional or national retailers, such as 7-11
and other convenience and grocery and drug stores, Callingcard intends to
implement their main business strategy on joint venture advertising concepts
with regional and national advertisers who will get several opportunities to
advertise their products with the Callingcard concept and system: (1) when the
consumer acquired the card as the advertiser's name and logo are displayed one
side of the card; (2) when the consumer calls the 800 number provided by the
long distance carrier, the consumer will reach a recording which will say, for
example, "Drink XYZ Cola, enter your PIN and your call will be connected; (3)
when the calling card unit is expired then the consumer can use the calling card
unit for a coupon to exchange for goods and/or services, much in the same manner
as a grocery coupon. Local and regional distributors will distribute and service
the convenience store, grocery and drug store accounts to keep the Callingcard
units in stock. These distributors usually charge a fee conducive with the
retail price of the product. The "Callingcard" concept is adaptable to all major
telephone company long distance providers throughout the world. This calling
card unit can be as an advertising tool, coupon and long distance calling card
throughout the world with many applicable uses and potential co-advertising
partners.
The primary objective of the business of Callingcard is to create a market
for the "Callingcard" calling card units within the United States with the
"roll-out" of product conducive with the available funds to sustain the
business. The proceeds from this offering shall be dedicated to implement the
initial business plan of Callingcard. If the maximum amount of common shares are
sold by way of this offering, then the more comprehensive marketing program of
Callingcard will be implemented . See "Use of Proceeds". There is no assurance
that Callingcard will ever be able to sell the "Callingcard" concept to the
potential advertising purchasers or that the "Callingcard" concept will be
accepted by the consumer. Additionally, if Callingcard cannot obtain the
necessary working capital, it is doubtful that Callingcard will be able to
continue to operate as a going concern. Callingcard will only continue to
operate its business as long as it is able to obtain financing.
Marketing Approach
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Upon financing and commencement of business, Callingcard will then attempt
to advertise the "Callingcard" concept to the general public and to present the
Callingcard concept to potential advertisers. Callingcard will also build a
website for direct Internet and related sales. This marketing strategy, pursuant
to Callingcard's initial market research, is the least costly and most
comprehensive method to advertise at this initial stage of corporate sales
development. Callingcard has not conducted a formal market study in connection
with the implementation of Callingcard's business plan.
The business approach used by many companies marketing new products or, in
this case, a relatively unique calling card unit, is to establish as many joint
advertising sales agreement as possible. Callingcard, is limited by working
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capital so the management of Callingcard elects to utilize its limited capital
to test the market and use those results to expand the market. Callingcard
relies heavily on the knowledge of its officers and directors and other experts
who may from time to time be hired by Callingcard in their designated target
markets.
Competition
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Callingcard has not conducted a market study to specifically define the
competition, however there are large dominant leaders in the advertising
industry, which include newspapers, radio, television. These advertisers have a
large market share of the total advertising sector. These companies are usually
profitable, heavily financed and have resources to establish many facilities and
can providing advertising on a local and national basis. Management believes
that Callingcard may be able to work on various potential joint advertising
campaigns, or at least a segment of advertising projects with these dominate
leaders in the advertising industry. Regional and national advertising agencies
are competition to Callingcard, but could also be the agent for the Callingcard
concept and system for their advertising clients.
Government Regulations Regarding Telecommunications Systems.
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All long distance service and telephone companies in the United States of
America are regulated by the Federal Communications Commission. Management of
Callingcard does not perceive to be subjected to these government regulations as
the long distance provider is the subject of any and all government
telecommunication regulations. However, at the time of this offering,
Callingcard has not sought legal counsel to research the marketing laws nor has
Callingcard applied for clearance from any regulator regarding the proposed
marketing program. Callingcard is not aware of any additional governmental
regulations or pending regulations pertaining to Callingcard's business plan.
Employees
- ---------
Callingcard is a development stage company and currently has 2 part time
employees, that of Callingcard's officers and directors, Daniel and Nazar Najor.
Callingcard has no full time, paid employees. Callingcard is currently managed
by Daniel Najor, its President and Board Chairman, and Nazar Najor,
Secretary/Treasurer and Director, and the Board of Directors. Callingcard looks
to the Board of Directors and Officers for their entrepreneurial skills and
talents. For a complete discussion of the Officers and Directors and Significant
Employees experience, see "Directors, Executive Officers, Promoters, Significant
Employees And Control Persons." Management plans to use consultants, attorneys
and accountants as necessary and does not plan to engage any full-time employees
in the near future. Marketing consultants are estimated to cost $25,000 to
$50,000 per year plus a percentage of sales, estimated to be between 3% and 10%
of the sales achieved by the marketing consultants or marketing group.
Callingcard may hire marketing employees based on the projected size of the
market and the compensation necessary to retain qualified sales employees.
Marketing employees are estimated to require a salary of $40,000 to $50,000 per
year with a percentage of direct sales, estimated to be between 3% and 10% of
sales achieved. A portion of any employee compensation is likely to include the
right to acquire shares of stock in Callingcard, which would dilute the
ownership interest of holders of existing shares of its common stock. At this
time, there is no plan for any amount of shares to be issued to prospective
employees and the prospective employees would have to work for Callingcard for a
minimum of two years to be able to earn the right to acquire common shares of
stock from Callingcard.
Available Information and Reports to Securities Holders
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Callingcard has filed with the Securities and Exchange Commission a Form
SB-2 Registration Statement with respect to the common stock offered by this
prospectus. This prospectus, which constitutes a part of the registration
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statement, does not contain all of the information set forth in the registration
statement or the exhibits and schedules which are part of the registration
statement. For further information with respect to Callingcard and its common
stock, see the Registration Statement and the exhibits and schedules.
Callingcard's filings with the Commission are available to the public from the
Commission's website at http://www.sec.gov.
Upon completion of this offering, Callingcard will become subject to the
information and periodic reporting requirements of the Securities Exchange Act
and, accordingly, will file periodic reports, proxy statements and other
information with the Commission. Such periodic reports, proxy statements and
other information will be available for inspection and copying at the website of
the Commission referred to above.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion and analysis of Callingcard's financial condition
and results of operations should be read in conjunction with the Financial
Statements and accompanying notes and the other financial information appearing
elsewhere in this prospectus.
This prospectus contains forward-looking statements, the accuracy of which
involves risks and uncertainties. Words such as "anticipates," "believes,"
"plans," "expects," "future," "intends" and similar expressions are used to
identify forward-looking statements. This prospectus also contains
forward-looking statements attributed to certain third parties relating to their
estimates regarding the potential markets for "Callingcard" concept and system.
Prospective investors should not place undue reliance on these forward-looking
statements, which apply only as of the date of this prospectus. Callingcard's
actual results could differ materially from those anticipated in these
forward-looking statements for many reasons, including the risks faced by
Callingcard described in "Risk Factors" and elsewhere in this prospectus. The
following discussion and analysis should be read in conjunction with
Callingcard's Financial Statements and Notes thereto and other financial
information included elsewhere in this prospectus.
Plan Of Operation
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It is the intention of Callingcard to commence business when the offering
is completed or partially completed. Callingcard does not presently have any
revenues and must implement a marketing program from inception. Management of
Callingcard will dedicate sufficient time in order to initiate its business plan
once the funds become available. Callingcard intends to expand the business by
advertising and marketing the Callingcard concept once it is practicable. There
is no assurance that Callingcard will be able to attract distributors or
co-advertisers market the "Callingcard" program.
Callingcard needs sufficient capital to commence their business plan.
Callingcard is relying upon this offering to provide the capital needed to
implement their business plan to the extent that the offering is sold. If a
minimum of 25% of the offering is sold, Callingcard shall have a minimum of
$500,000 which is a sufficient amount of capital to commence business and
sustain that business for the first twelve months without the necessity of
further financing. This $500,000, less the $15,000 to pay for this offering
expense, would be partially spent on the purchase of telephone long distance
calling time from a major telephone service provider. This amount is estimated
to be $100,000. Once the telephone long distance calling time is purchased, then
Callingcard will direct its efforts to the national products manufacturers to
find a joint venture participant who wants to place their advertising on the
back of the Callingcard unit. This marketing and the advertising of the
Callingcard unit to the potential national advertisers is estimated to cost
$150,000, leaving another $50,000 to advertising the Callingcard unit to
potential retailers, distributors and consumers. A portion of the $150,000
budgeted for advertising and marketing to potential national advertisers will be
dedicated to the employing of 2 full time advertising employees for this time
period estimated to be $50,000 per employee or marketing professional for a
total of $100,000 out of the $150,000 dedicated to this category. Callingcard
believes that once an advertising sale is made then the cost of manufacturing
the Callingcard units will probably be carried by the advertiser. However,
Callingcard has budgeted $100,000 for Callingcard unit manufacturing in the
event that Callingcard may need to provide the Callingcard units to the
advertiser where Callingcard initially pays for the Callingcard units, providing
there is a bona fide purchase order and advertising contract from a national
product company. In that event, Callingcard would receive payment on the
purchase order and/or contract once the Callingcard units are delivered to
either the national product company or the national product company's
distributor. Callingcard would have a surplus for general working capital needs
of $85,000 for the first twelve months.
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Results of Operations
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During the period from April 21, 1998 through January 31, 2002, Callingcard
has engaged in no significant operations other than organizational activities to
market the "Callingcard" concept and system, raise initial capital and the
preparation for registration of its securities under the Securities Act of 1933,
as amended. No revenues were received by Callingcard during this period.
For the current fiscal year, Callingcard anticipates incurring a loss as a
result of organizational expenses, expenses associated with registration under
the Securities Act of 1933, and expenses associated with setting up a company
structure to begin implementing its business plan. Callingcard anticipates that
until these procedures are completed, it will not generate revenues, and may
continue to operate at a loss thereafter, depending upon the performance of the
business.
Callingcard's business plan is to complete the development stage marketing
strategy for the "Callingcard" concept and system. Callingcard will then
determine the feasibility of marketing the "Callingcard" concept and system in
various market segments on the most cost effective basis known to management.
Liquidity and Capital Resources
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Callingcard remains in the development stage and, since inception, has
experienced no significant change in liquidity or capital resources or
shareholders' equity. Consequently, Callingcard's balance sheet as of January
31, 2002, reflects total assets of $0.00.
Callingcard expects to carry out its plan of business as discussed above.
Callingcard has no immediate expenses. Mr. Daniel Najor and the Officers and
Board of Directors will serve in their capacities without compensation until a
market is developed for the "Callingcard" concept and system. There will be
compensation for Officers and Directors once Callingcard commences sales and can
afford to pay its management.
Callingcard is only able to implement its business plan as Callingcard is
able to finance the business plan. If a minimum of 25% of the offering or
500,000 shares are sold, then Callingcard will have a minimum of $500,000 to
commence its business plan. That amount of funds will allow Callingcard to
implement its business plan on a local basis and will be able to sustain
operations for the next twelve months without further financing. In the event
that Callingcard is able to achieve the sale of 50% of the offering or 1,000,000
shares, then Callingcard can implement its business plan on a more expanded
basis and will be able to sustain operations for the next eighteen months. If
Callingcard is able to sell the maximum amount of the offering or 2,000,000
shares, Callingcard can implement its business plan and be able to sustain its
operations for 24 months or longer without the need for further financing.
In addition, Callingcard may engage in a combination with another
business. Callingcard does not have any specific business combination targeted,
but there may be a business which would lend itself to some sort of combination
as Callingcard begins to implement its business plan. Callingcard cannot predict
the extent to which its liquidity and capital resources will be diminished prior
to the consummation of a potential business combination or whether its capital
will be further depleted by the operating losses (if any) of the business entity
with which Callingcard may eventually combine, if ever. Callingcard has engaged
in discussions concerning potential business combinations concepts, but has not
identified any potential business combination or entered into negotiations or
any agreement for such a combination.
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Callingcard will need additional capital to carry out its business plan or
to engage in a potential business combination if the majority of the shares
offered by way of this prospectus are not sold. No commitments to provide
additional funds have been made by management or other shareholders.
Accordingly, there can be no assurance that any additional funds will be
available on terms acceptable to Callingcard or at all.
DESCRIPTION OF PROPERTY
Callingcard currently maintains its office at the office of Callingcard's
President and Board Chairman, Daniel Najor, at 3550 National Avenue, San Diego,
California 92113. Callingcard does not pay rent or other office expense at this
time and does not intend to until this offering is completed and sales commence
and these expenses have been prepaid to December 31, 2002, by a 300,000 common
share of stock share distribution to Callingcard's officers and directors in
January, 2002.
Callingcard's management does not believe that it will need to obtain
additional office space at any time in the foreseeable future until its business
plan is more fully implemented.
Callingcard does not intend to rent or purchase separate office
facilities. Callingcard intends to operate its offices from its current
facility, at no charge, until the business becomes profitable or when the
proposed marketing program requires another office location outside the original
"Callingcard" executive office. At the present time, there is no such office
space identified or rented or contemplated being rented.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
No director, executive officer or nominee for election as a director of
Callingcard, or the owner of five percent or more of Callingcard's outstanding
shares of stock or any member of their immediate family has entered into or
proposed any transaction, other than that as described herein, in which the
amount involved exceeds $1,000. There are no stock options offered to any
officer, director or significant employee or any other remuneration contracts.
The officers and directors have received a total of 500,000 restricted common
shares of stock representing 250,000 for each of the two officers/directors.
Callingcard does not intend to have stock options offered to its officers,
directors of significant employees.
There are 4,180,000 restricted, common shares of stock issued over two
years ago which could be possibly sold into the marketplace under Rule 144.
These shares were issued in reliance upon the exemption provided in Section 4(2)
of the Securities Act of 1933, as amended. Of these 4,180,000 common shares of
stock, 200,000 common shares of stock are owned by the officers and directors,
Daniel Najor and Nazar Najor (100,000 common share of stock each). Out of the
4,180,000 restricted common shares of stock which could possibly be sold into
the marketplace under Rule 144K, management of Callingcard does not know of any
shareholder or been notified of any shareholder who will sell their shares prior
to Callingcard fully implementing its business plan, however management does not
have any assurance that eligible shares pursuant to Rule 144 will not be sold
and Callingcard has no control over the sale of those shares. The shareholders
which could possibly sell shares and the amount of shares are:
FSI Financial Shelter, Inc. - 200,000 shares+;
493-525 BC, Ltd - 200,000 shares+;
Tidewater Property Management, Ltd. - 200,000 shares+;
Coleman Communications, Ltd. - 200,000 shares+;
Peru Imports, LLC - 200,000 shares+;
Moshiko Investment Group - 200,000 shares+;
Mandarin Gardens Hotels, LLP - 200,000 shares+;
Hong Kong Trading Company - 100,000 shares+;
Noah Najor* - 200,000 shares;
Donna Najor* - 200,000 shares;
Mary Ann Heidenreich* - 200,000 shares;
Ramsey Najor* - 200,000 shares;
Gloria Najor* - 200,000 shares;
Spenser Food Group - 200,000 shares+;
Asia Pacific Pulp Distributors - 200,000 shares+;
Randy Heidenreich - 100,000 shares*;
Alder Properties, Ltd. - 200,000 shares+;
Shelter Estates, Ltd. - 200,000 shares+;
Belevedere Estates, Ltd. - 82,500 shares+;
Jamil Kiryakoza - 200,000 shares;
Raad Audo - 200,000 shares;
Daniel Najor - 100,000 shares; and
Nazar Najor - 100,000 shares.
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*These shareholders are related to the officers and directors of
Callingcard in the following manner: Noah Najor is the son of Nazar Najor and
nephew of Daniel Najor; Donna Najor is the sister of Daniel and Nazar Najor;
Mary Ann Heidenreich is the sister of Daniel and Nazar Najor; Ramsey Najor is
the brother of Daniel and Nazar Najor; Gloria Najor is the sister of Daniel and
Nazar Najor; Randy Heidenreich is the brother-in-law of Daniel and Nazar Najor.
None of the Najor family members are officers, directors, shareholders or
affiliates of the other shareholders other than as described in this
registration statement. Both Daniel Najor and Nazar Najor disavow any beneficial
ownership in any of the shares issued to family members.
+Neither Daniel Najor nor Nazar Najor are officers, directors, shareholders
or affiliates of these other shareholders.
Of the 4,180,000 restricted, common shares of stock issued over two years
ago, 3,000,000 were issued to Daniel Najor and his designees for the development
of the Callingcard technology and concept which was later patented. The cost to
develop the Callingcard technology and system was approximately $30,000. These
shares were issued by Callingcard at a price of $.01 per share to equal
3,000,000 shares. The price of $.01 per share of stock was determined by
Callingcard's predecessor company, Tver Acquisition Corp.'s Board of Directors,
Nazar Najor, President and Board Chairman and Daniel Najor, Secretary/Treasurer
and Director. This is a non " arms length" transaction as the seller of the
Callingcard technology and system is Daniel Najor, Callingcard's former
Secretary/Treasurer and Director and Callingcard's current President and Board
Chairman. However, the Callingcard financial statements do not place any value
on the License on Callingcard's financial statements.
There are no parent companies to Callingcard and no other control persons
or entities other than as described in the Prospectus.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
No established public trading market exists for Callingcard's securities.
Callingcard has no common stock equity subject to outstanding purchase options
or warrants. Callingcard has no securities convertible into its common stock
equity. There are 4,480,000 issued and outstanding common shares that could be
sold pursuant to Rule 144 under the Securities Act. Callingcard has not agreed
to register any existing securities under the Securities Act for sale by
shareholders. Except for this offering, there is no common stock equity that is
being, or has been publicly proposed to be publicly offered by Callingcard.
As of January 31, 2002, there were 4,480,000 shares of common stock
outstanding, held by 174 shareholders of record. Upon effectiveness of the
registration statement that includes this prospectus, a portion of Callingcard's
authorized shares will be eligible for sale.
There are no common shares of stock subject to any stock option contract.
There are no stock option contracts for any officer, director or significant
employees and there are no stock option contracts contemplated.
The amount of stock available for sale under the Rule 144 of the Securities
Act is 4,180,000, which includes 2 00,000 shares of stock issued to the officers
and directors.
There are no shares of Callingcard which are subject to registration
rights. There are no other share agreements that are subject to registration.
To date, Callingcard has not paid any dividends on its common stock and
does not expect to declare or pay any dividends on its common stock in the
foreseeable future. Payment of any dividends will depend upon Callingcard's
future earnings, if any, its financial condition, and other factors as deemed
relevant by the Board of Directors.
Investors should be aware that, according to the Securities and Exchange
Commission Release No. 34-29093, the market for penny stocks has suffered in
recent years from patterns of fraud and abuse. Such patterns include:
o control of the market for the security by one or a few broker-dealers
that are often related to the promoter or to the company;
o manipulation of prices through prearranged matching of purchases and
sales and false and misleading press releases;
27
o "boiler room" practices involving high pressure sales tactics and
unrealistic price projections by inexperienced sales persons;
o excessive and undisclosed bid-ask differentials and markups by selling
broker-dealers; and
o the wholesale dumping of the same securities by promoters and
broker-dealers after prices have been manipulated toa desired level,
along with the inevitable collapse of those prices with consequent
investor losses.
One or more of the above could cause the investor to lose all or part of
his investment.
EXECUTIVE COMPENSATION
No officer or director has received any cash remuneration from Callingcard.
The two officers and directors have received a total of 500,000 (250,000 each)
restricted common shares of stock in exchange for their services and expenses.
The following table sets forth the executive compensation:
SUMMARY COMPENSATION TABLE ISSUED FOR EXPENSES:
Name & Issued
Principal For
Position Year Salary Bonus Expenses
----------------------------------------------------------------------------
Daniel Najor 1998 None None $100*
Board Chairman, CEO
2002 None None $150*
Nazar Najor 1998 None None $100*
Sec./Treas.,
Director 2002 None None $150*
* These amounts represent 100,000 common shares of restricted shares of stock
issued to each of the above, valued at the par value price of $.001 for
accounting purposes.
All of the above officers who each received 250,000 restricted shares of
stock have no other remuneration, or stock options, promised or agreed upon for
expenses.
Callingcard has not implemented any employment stock option contracts for
officers and directors and key management. It is possible that Callingcard will
adopt a plan to pay or accrue compensation to its officers and directors and key
management for services related to the implementation of Callingcard's business
plan commensurate with Callingcard's overall sales and projected profits.
Callingcard has no formalized stock option contracts, no retirement, incentive,
defined benefit, actuarial, pension or profit-sharing programs for the benefit
of directors, officers or other employees, but the Board of Directors may
recommend adoption of one or more such programs in the future once Callingcard
has achieved a profitable level of sales. Callingcard has no employment stock
option contracts with key personnel and has no other incentive compensatory plan
or arrangement with any executive officer or director of Callingcard. The
Officers and Directors currently do not receive any cash compensation from
Callingcard and for their services as members of the Board of Directors. There
is no compensation committee, and no compensation policies have been adopted.
See "Certain Relationships And Related Transactions."
28
FINANCIAL STATEMENTS
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
ANDERSEN ANDERSEN & STRONG, L.C.
- --------------------------------
Certified Public Accountants and Business Consultants
Member SEC Practice Section of the AICPA 941 East 3300 South, Suite 202
Salt Lake City, Utah 84106
Telephone 801 486-0096
Fax 801 486-0098
Board of Directors
Callingcard Industries, Inc.
San Diego, California
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have audited the accompanying balance sheets of Callingcard Industries, Inc.
(development stage company) at January 31, 2002 and December 31, 2001, and the
statements of operations, stockholders' equity, and cash flows for the one month
ended January 31, 2002 and the years ended December 31, 2001 and 2000 and the
period April 21, 1998 (date of inception ) to January 31, 2002. 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 conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the over all
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 Callingcard Industries, Inc. at
January 31, 2002 and December 31, 2001, and the statements of operations, and
cash flows for the one month ended January 31, 2002 and the years ended December
31, 2001 and 2000 and the period April 21, 1998 (date of inception) to January
31, 2002 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. The Company will need additional
working capital for its planned activity, which raises substantial doubt about
its ability to continue as a going concern. Management's plans in regard to
these matters are described in Note 4. These financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
Salt Lake City, Utah
February 7, 2002 s\Andersen Andersen & Strong LC
F-1
CALLINGCARD INDUSTRIES, INC.
(Development Stage Company)
BALANCE SHEETS
January 31, 2002 and December 31, 2001
- -----------------------------------------------------------------------------------
Jan 31 Dec 31
2001 2000
------- -------
ASSETS
CURRENT ASSETS
Cash $ -- $ --
------- -------
Total Current Assets -- --
------- -------
PATENT - Note 3 -- --
------- -------
$ -- $ --
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ -- $ --
------- -------
Total Current Liabilities -- --
------- -------
STOCKHOLDERS' EQUITY
Preferred stock
10,000,000 shares authorized at $0.001 par value;
no shares outstanding -- --
Common stock
100,000,000 shares authorized at $0.001 par value;
4,480,000 shares issued and outstanding on January 31;
4,180,000 shares on December 31 4,480 4,180
Capital in excess of par value (3,000) (3,000)
Deficit accumulated during development stage (1,480) (1,180)
------- -------
Total Stockholders' Equity
-- --
------- -------
$ -- $ --
======= =======
The accompanying notes are an integral part of these financial statements
F-2
CALLINGCARD INDUSTRIES, INC.
(Development Stage Company)
STATEMENTS OF OPERATIONS
For the One Month Ended January 31, 2002 and the
Years Ended December 31, 2001 and 2000 and the Period
April 21, 1998 (date of inception ) to January 31, 2002
- --------------------------------------------------------------------------------
Jan 31, Dec 31, Dec 31, Apr 21, 1998
2002 2001 2000 to Jan 31, 2002
-------- ------- ------- ---------------
REVENUES $ -- $ -- $ -- $ --
EXPENSES 300 -- -- 1,480
-------- ------- ------- -------
NET LOSS $ (300) $ -- $ -- $(1,480)
======== ======= ======= =======
NET LOSS PER COMMON SHARE
Basic $ -- $ -- $ --
------- ------- -------
WEIGHTED AVERAGE
OUTSTANDING SHARES
Basic - (stated in 1,000's) 4,480 4,180 4,180
------- ------- -------
The accompanying notes are an integral part of these financial statements.
F-3
CALLINGCARD INDUSTRIES , INC.
(Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Period April 21, 1998 (date of inception ) to January 31, 2002
- -------------------------------------------------------------------------------------------
Common Stock Capital in
----------------------- Excess of Accumulated
Shares Amount Par Value Deficit
---------- ---------- --------- -------------
Balance April 21, 1998 -- -- -- --
Issuance of common stock for
expenses at $.001 - 1998 1,180,000 1,180 -- --
Issuance of common stock for
patent - 1998 - Note 3 3,000,000 3,000 (3,000)
Net operating loss for the year ended
December 31, 1998 -- -- -- (1,180)
Net operating loss for the year ended
December 31, 1999 -- -- -- --
Net operating loss for the year ended
December 31, 2000 -- -- -- --
Net operating loss for the year ended
December 31, 2001 -- -- -- --
---------- ---------- --------- -------------
Balance December 31, 2001 4,180,000 4,180 (3,000) (1,180)
Issuance of common stock for
expenses at $.001 - January 2002 300,000 300 -- --
Net operating loss for the one month
ended January 31, 2002 -- -- -- (300)
---------- ---------- --------- -------------
Balance January 31, 2002 4,480,000 $ 4,480 $ (3,000) $ (1,480)
========= ========= ========= ==========
The accompanying notes are an integral part of these financial statements.
F-4
CALLINGCARD INDUSTRIES, INC.
(Development Stage Company)
STATEMENT OF CASH FLOWS
For the One Month Ended January 31, 2002 and the Years Ended December 31, 2001
and 2000 and the Period April 21, 1998 (date of inception ) to January 31, 2002
- -------------------------------------------------------------------------------------------------
Jan 31, Dec 31, Dec 31, Apr 21, 1998 to
2002 2001 2000 Jan 31, 2002
------- ------- ------- ---------------
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss $ (300) $ -- $ -- $(1,480)
Adjustments to reconcile net loss to
net cash provided by operating activities
Issuance common stock for expenses 300 -- -- 1,480
Net Change in Cash from Operations -- -- -- --
------- ------- ------- -------
CASH FLOWS FROM INVESTING
ACTIVITIES
-- -- -- --
------- ------- ------- -------
CASH FLOWS FROM FINANCING
ACTIVITIES
-- -- -- --
------- ------- ------- -------
Net Increase (Decrease) in Cash -- -- -- --
Cash at Beginning of Period -- -- -- --
------- ------- ------- -------
Cash at End of Period $ -- $ -- $ -- $ --
======= ======= ======= =======
The accompanying notes are an integral part of these financial statements
F-5
CALLINGCARD INDUSTRIES, INC.
( Development Stage Company)
STATEMENTS OF CASH FLOWS (Continued)
Period April 21, 1998 (Date of Inception ) to January 31, 2002
- --------------------------------------------------------------------------------
SCHEDULE OF NONCASH OPERATING ACTIVITIES
Issuance of 1,180,000 common shares for expenses - related parties - 1998 $ 1,180
-------
Issuance of 3,000,000 common shares for patent - related parties - 1998 -
-------
Issuance of 300,000 common shares for expenses - related parties - 2002 300
-------
The accompanying notes are an integral part of these financial statements.
F-6
CALLINGCARD INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. ORGANIZATION
The Company was incorporated under the laws of the state of Delaware on April
21, 1998 with authorized common stock of 20,000,000 shares at a par value of
$0.001 and preferred stock of 10,000,000 at a par value of $0.001 with the name
"Tver Acquisition Corp.". On January 25, 2002 the domicile was changed to the
state of Nevada with an increase in the authorized common stock to 100,000,000
with the same par value and a name change to "Callingcard Industries, Inc." No
terms or conditions have been determined for the preferred stock.
The Company is engaged in the activity of the development and establishment of a
telephone callingcard system and is currently seeking financing to market the
system. The Company is in the development stage.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
- ------------------
The Company recognizes income and expenses based on the accrual method of
accounting.
Dividend Policy
- ---------------
The Company has not yet adopted a policy regarding payment of dividends.
Income Taxes
- ------------
On January 31, 2002, the Company had a net operating loss available for carry
forward of $1,480. The income tax benefit of approximately $444 from the loss
carry forward has been fully offset by a valuation reserve because the use of
the future tax benefit is undeterminable since the Company has no operations.
The loss carryover will expire in 2022.
Basic and Diluted Net Income (Loss) Per Share
- ---------------------------------------------
Basic net income (loss) per share amounts are computed based on the weighted
average number of shares actually outstanding. Diluted net income (loss) per
share amounts are computed using the weighted average number of common shares
and common equivalent shares outstanding as if shares had been issued on the
exercise of the preferred share rights unless the exercise becomes antidilutive
and then only the basic per share amounts are shown in the report.
F-7
CALLINGCARD INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Financial Instruments
- ---------------------
The carrying amounts of financial instruments are considered by management to be
their estimated fair values.
Estimates and Assumptions
- -------------------------
Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of the assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses. Actual results could vary from the estimates that were assumed in
preparing these financial statements.
Comprehensive Income
- --------------------
The Company adopted Statement of Financial Accounting Standards No. 130. The
adoption of this standard had no impact on the total stockholder's equity.
Recent Accounting Pronouncements
- --------------------------------
The Company does not expect that the adoption of other recent accounting
pronouncements will have a material impact on its financial statements.
3. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
On December 10, 1998 the Company acquired a patent, # 6,183,017, from a related
party, by the issuance of 3,000,000 common shares of the Company. The patent
covers a telephone calling card to be purchased by the user to make pre-paid
telephone calls. No value was recorded for the patent because a predecessor cost
was undeterminable.
29% of the outstanding common capital stock of the Company has been acquired by
Daniel Najor (president and board chairman) and Nazar Najor (secretary treasure
and director) and their families.
The Company has issued common capital stock to the related parties above as
follows:
1,180,000 common shares for expenses - 1998 $ 1,180
-------
3,000,000 common shares for a patent - 1998 -
-------
300,000 common shares for expenses - 2002 300
-------
F-8
CALLINGCARD INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
4. GOING CONCERN
The Company intends to further develop its interest in the patent outlined in
Note 3, however, the Company does not have the working capital necessary to be
successful in this effort.
Continuation of the Company as a going concern is dependent upon obtaining
additional working capital and the management of the Company has developed a
strategy, which it believes will accomplish this objective through additional
equity funding and long term financing which will enable the Company to operate
for the coming year.
F-9
Part II - Information Not Required in Prospectus
- ------------------------------------------------
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Callingcard's Bylaws provide that it indemnify its agents which includes
its directors and officers to the fullest extent permitted under Nevada law
against all liabilities incurred by reason of the fact that the person is or was
a director or officer of Callingcard or a fiduciary of an employee benefit plan,
or is or was serving at the request of Callingcard as a director or officer, or
fiduciary of an employee benefit plan, of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise.
Liability insurance will be purchased following Callingcard's proposed
financing. The effect of these provisions is potentially to indemnify
Callingcard's Directors and Officers from all costs and expenses of liability
incurred by them in connection with any action, suit or proceeding in which they
are involved by reason of their affiliation with Callingcard. Pursuant to Nevada
law, a corporation may indemnify a director, provided that such indemnity shall
not apply on account of: (a) acts or omissions of the director finally adjudged
to be intentional misconduct or a knowing violation of law; (b) unlawful
distributions; or (c) any transaction with respect to which it was finally
adjudged that such director personally received a benefit in money, property, or
services to which the director was not legally entitled.
The Bylaws of Callingcard filed as Exhibit 1.2, provide that it will
indemnify its agents, i.e. officers and directors for costs and expenses
incurred in connection with the defense of actions, suits, or proceedings
against them on account of their being or having been directors or officers of
Callingcard, absent a finding of negligence or misconduct in office.
Callingcard's Bylaws also permit it to maintain insurance on behalf of its
officers, directors, employees and agents against any liability asserted against
and incurred by that person whether or not Callingcard has the power to
indemnify such person against liability for any of those acts.
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Callingcard estimates the expense of this offering is as follows:
SEC registration fee...........................................$ 478.
Printing and engraving expenses................................. 1,250.
Attorneys' fees and expenses.................................... 5,000.
Accountants' fees and expenses.................................. 5,000.
Transfer agent's and registrar's fees and expenses ............. 500.
Miscellaneous................................................... 2,772.
Total..........................................................$15,000.
========
The Registrant will bear all expenses shown above.
29
RECENT SALES OF UNREGISTERED SECURITIES
During the past three years, Callingcard has sold or issued the following
common shares of restricted stock under Section 4(2) of the Securities Act of
1933, as amended.
May 3, 1998 - 200,000 restricted common shares of stock were issued in
exchange for officers and directors services. These common shares of
stock were issued to:
100,000 to Daniel Najor, President and Board Chairman
100,000 to Nazar Najor, Secretary/Treasurer and Director
June 22, 1998 - 15,000 restricted common shares were issued to
shareholders of Hargate Holdings Group for the marketing rights to a
proprietary design bicycle lock product.
December 10, 1998 - 3,000,000 restricted common shares of stock were
issued to Daniel Najor (or designees) for the purchase of the
Callingcard concept and system which was later patented. These
3,000,000 common shares of stock were issued to the following:
Compensation for
Shareholder Amount of Shares Issuance
- --------------------------------------------------------------------------------
FSI Financial Shelter, Inc.** 200,000 shares Consulting Fees
493-525 B.C., Ltd** 200,000 shares Consulting Fees
Tidewater Property Management, Ltd.** 200,000 shares Consulting Fees
Coleman Communications, Ltd.** 200,000 shares Consulting Fees
Peru Imports LLC** 200,000 shares Consulting Fees
Moshiko Investment Group** 200,000 shares Consulting Fees
Mandarin Gardens Hotels, LLP** 200,000 shares Consulting Fees
Hong Kong Trading Company** 100,000 shares Consulting Fees
Noah Najor* 200,000 shares Consulting Fees*+
Donna Najor* 200,000 shares Consulting Fees*+
Mary Ann Heidenreich* 200,000 shares Consulting Fees*+
Ramsey Najor* 200,000 shares Consulting Fees*+
Gloria Najor* 200,000 shares Consulting Fees*+
Spencer Food Group** 200,000 shares Consulting Fees
Asia Pacific Pulp Distributors** 200,000 shares Consulting Fees
Randy Heidenreich* 100,000 shares Consulting Fees
* These shareholders are related to the officers and directors of Callingcard in
the following manner: Noah Najor is the son of Nazar Najor and nephew of Daniel
Najor; Donna Najor is the sister of Daniel and Nazar Najor; Mary Ann Heidenreich
is the sister of Daniel and Nazar Najor; Ramsey Najor is the brother of Daniel
and Nazar Najor; Gloria Najor is the sister of Daniel and Nazar Najor; and Randy
Heidenreich is the brother-in-law of Daniel and Nazar Najor.
*+These shareholders derived their shares as a result of Daniel Najor's
consulting services to Callingcard and Daniel Najor gifted these common shares
of stock to family members. Daniel Najor and Nazar Najor disavows any beneficial
ownership of the shares issued to family members.
**Neither Daniel Najor nor Nazar Najor are officers, directors, shareholders or
affiliates of these business entities.
December 22, 1998 - 965,000 restricted common shares of stock were
issued to Daniel Najor (or designees) for the development and
marketing services pertaining to the Callingcard technology and
systems. These 965,000 common shares of stock were issued to the
following:
Alder Properties, Ltd** 200,000 shares Consulting Fees
Shelter Estates, Ltd.** 200,000 shares Consulting Fees
Belvedere Estates, Ltd.** 82,500 shares Consulting Fees
Jamil Kiryakoza 200,000 shares Consulting Fees
Raad Audo 200,000 shares Consulting Fees
**Neither Daniel Najor nor Nazar Najor are officers, directors, shareholders or
affiliates of these business entities.
30
January 24, 2002, - 300,000 restricted common shares of stock were
issued in exchange for officers and directors services, as well as
rent and general office expense. These common shares of stock were
issued to:
150,000 to Daniel Najor
150,000 to Nazar Najor
Exhibits
The following exhibits are filed as part of this Registration Statement:
Exhibit
Number Description
------ ----------------------------------------------------------------
2.1 Articles of Merger & Plan of Reorganization & Change of Domicile
3.1 Articles of Incorporation
3.2 Bylaws
4.1 Specimen Stock Certificate
4.2 Stock Subscription
5.1 Opinion Re: Legality
10.1 License Agreement
10.2 Purchase Agreement
23.1 Consent of Auditors
99.1 U.S. Patent
UNDERTAKINGS
The Registrant hereby undertakes that it will:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by section 10(a)(3) of the Securities
Act;
(ii) Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in the
registration statement; and
(iii)Include any additional or changed material information on the plan of
distribution.
31
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the Offering of the securities of the securities at that time to be
the initial bona fide Offering.
(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the Offering.
Insofar as indemnification for liabilities arising under the Securities Act
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 Securities 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 Securities Act and will be governed by the final adjudication
of such issue.
32
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Diego, California, on April 10, 2002.
CALLINGCARD INDUSTRIES, INC.
By: /s/ Daniel Najor
------------------------
Daniel Najor, President
In accordance with the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates stated.
- -----------------------------------------------------------------------------
/s/ Daniel Najor April 10, 2002
------------------------
Daniel Najor President, Board Chairman,
Principal Executive Officer,
/s/ Nazar Najor April 10, 2002
-------------------------
Nazar Najor Secretary/Treasurer & Director and
Principal Financial and Accounting Officer
- -----------------------------------------------------------------------------
33