As Filed With the Securities and Exchange Commission on December 5, 2008
Registration No. 333-______
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PaperWorks Inc.
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation)
5943
(Primary Standard Industrial Classification Code Number)
35-2340897
(IRS Employer Identification No.)
2963 E. Rose Lane
Phoenix, AZ 85016
Telephone & Facsimile 1-800-854-0654
(Address and telephone number of registrant's principal executive offices)
Rhoda Rizkalla
2963 E. Rose Lane
Phoenix, AZ 85016
Telephone & Facsimile 1-800-854-0654
(Name, address and telephone number 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 the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act Registration Statement number of the earlier effective
Registration Statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
Registration Statement number of the earlier effective Registration Statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
Registration Statement number of the earlier effective Registration Statement
for the same offering. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company.
Large accelerated filer [ ] Accelerated Filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price offering registration
registered registered per share(2) price fee(1)
- --------------------------------------------------------------------------------
Common Stock 3,000,000 $.015 $45,000 $1.77
================================================================================
(1) This is an initial offering and no current trading market exists for our
common stock. The price paid for the currently issued and outstanding
common stock was valued at $.005 per share.
(2) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457.
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to such section 8(a), may determine.
================================================================================
PROSPECTUS
PAPERWORKS INC.
3,000,000 SHARES OF COMMON STOCK
$.015 PER SHARE
This is the initial offering of Common stock of PaperWorks Inc. and no public
market exists for the securities being offered. PaperWorks Inc. is offering for
sale a total of 3,000,000 shares of its Common Stock on a "self-underwritten",
best effort, all-or-none basis. The shares will be offered at a fixed price of
$.015 per share for a period not to exceed 180 days from the date of this
prospectus, unless extended by our Board of Directors for an additional 90 days.
There is no minimum number of shares required to be purchased. We intend to open
a standard bank checking account to be used only for the deposit of funds
received from the sale of shares in this offering. This offering is on a best
effort, all-or-none basis, meaning if all shares are not sold and the total
offering amount is not deposited by the expiration date of the offering, all
monies will be returned to investors, without interest or deduction, however
there is no assurance we will be able to do so. See "Use of Proceeds" and "Plan
of Distribution".
PaperWorks, Inc. is a development stage, start-up company and currently has no
operations. Any investment in the shares offered herein involves a high degree
of risk. You should only purchase shares if you can afford a complete loss of
your investment.
BEFORE INVESTING, YOU SHOULD CAREFULLY READ THIS PROSPECTUS AND, PARTICULARLY,
THE RISK FACTORS SECTION, BEGINNING ON PAGE 4.
Neither the U.S. Securities and Exchange Commission nor any state securities
division has approved or disapproved these securities, or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
Offering Total
Price Amount of Underwriting Proceeds
Per Share Offering Commissions To Us
--------- -------- ----------- -----
Common Stock $.015 $45,000 $0 $45,000
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE U.S.
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Subject to Completion, Dated __________, 200__
TABLE OF CONTENTS
Page No.
--------
SUMMARY OF PROSPECTUS 3
General Information about Our Company 3
The Offering 3
RISK FACTORS 4
Risks Associated With Our Company 4
Risks Associated With This Offering 6
USE OF PROCEEDS 8
DETERMINATION OF OFFERING PRICE 9
DILUTION OF THE PRICE YOU PAY FOR YOUR SHARES 9
PLAN OF DISTRIBUTION 10
Offering will be Sold by Our Officer and Director 10
Terms of the Offering 11
Deposit of Offering Proceeds 11
Procedures for and Requirements for Subscribing 11
DESCRIPTION OF SECURITIES 11
INTEREST OF NAMED EXPERTS AND COUNSEL 12
DESCRIPTION OF OUR BUSINESS 12
DESCRIPTION OF PROPERTY 16
LEGAL PROCEEDINGS 16
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 16
FINANCIAL STATEMENTS 17
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 18
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE 19
DIRECTOR, EXECUTIVE OFFICER, PROMOTER AND CONTROL PERSON 19
EXECUTIVE COMPENSATION 20
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNER AND MANAGEMENT 22
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 22
INDEMNIFICATION 23
AVAILABLE INFORMATION 23
2
PAPERWORKS INC.
2963 E. Rose Lane
Phoenix, AZ 85016
SUMMARY OF PROSPECTUS
You should read the following summary together with the more detailed business
information, financial statements and related notes that appear elsewhere in
this prospectus. In this prospectus, unless the context otherwise denotes,
references to "we," "us," "our" and "PaperWorks" are to PaperWorks Inc.
GENERAL INFORMATION ABOUT OUR COMPANY
PaperWorks Inc. was incorporated in the State of Nevada on April 30, 2008. Our
primary business is online sales of custom printed stationery. Customers can
view various styles, formats and designs at the company web site
(www.everythingpaper.com) and order from a catalogue of ready-made and
personalized greeting cards for all occasions.
We are a development stage company and have not yet launched our business or
generated any revenues. Our limited start-up operations have consisted of the
formation of our business plan and identification of our target market. Per our
business plan we anticipate sales to begin in March 2009. Currently our
President devotes approximately 10 hours a week to the company. We will require
the funds from this offering in order to fully implement our business plan as
discussed in the "Plan of Operation" section of this prospectus. We have been
issued a "substantial doubt" going concern opinion from our auditors and our
only asset is our cash balance of $14,490.
Our administrative office of the company is currently located at the premises of
our President, Rhoda Rizkalla, which she provides to us on a rent free basis at
2963 E. Rose Lane, Phoenix, AZ 85016. We plan to use these offices until we
require larger space. Our fiscal year end is August 31.
THE OFFERING
Following is a brief summary of this offering. Please see the Plan of
Distribution section for a more detailed description of the terms of the
offering.
ecurities Being Offered: 3,000,000 shares of common stock, par value
$.001.
Offering Price per Share: $.015
Offering Period: The shares are being offered for a period not
to exceed 180 days, unless extended by our
Board of Directors for an additional 90 days.
In the event we do not sell all of the shares
before the expiration date of the offering, all
funds raised will be promptly returned to the
investors, without interest or deduction.
Net Proceeds to Our Company: $45,000
3
Use of Proceeds: We intend to use the proceeds to expand our
business operations.
Number of Shares Outstanding
Before the Offering: 3,000,000
Number of Shares Outstanding
After the Offering: 6,000,000
Our officer, director, control person and/or affiliates do not intend to
purchase any shares in this offering.
RISK FACTORS
An investment in these securities involves an exceptionally high degree of risk
and is extremely speculative in nature. Following are what we believe are all of
the material risks involved if you decide to purchase shares in this offering.
RISKS ASSOCIATED WITH OUR COMPANY:
RHODA RIZKALLA, THE SOLE OFFICER AND DIRECTOR OF THE COMPANY, CURRENTLY DEVOTES
APPROXIMATELY 10 HOURS PER WEEK TO COMPANY MATTERS. SHE DOES NOT HAVE ANY PUBLIC
COMPANY EXPERIENCE AND IS INVOLVED IN OTHER BUSINESS ACTIVITIES. THE COMPANY'S
NEEDS COULD EXCEED THE AMOUNT OF TIME OR LEVEL OF EXPERIENCE SHE MAY HAVE. THIS
COULD RESULT IN HER INABILITY TO PROPERLY MANAGE COMPANY AFFAIRS, RESULTING IN
OUR REMAINING A START-UP COMPANY WITH NO REVENUES OR PROFITS.
Our business plan does not provide for the hiring of any additional employees
until sales will support the expense, which is estimated to be March 2009. Until
that time the responsibility of developing the company's business, the offering
and selling of the shares through this prospectus and fulfilling the reporting
requirements of a public company all fall upon Ms. Rizkalla. While her has
business experience includes management and marketing, she does not have
experience in a public company setting, including serving as a principal
accounting officer or principal financial officer. We have not formulated a plan
to resolve any possible conflict of interest with her other business activities.
In the event she is unable to fulfill any aspect of her duties to the company we
may experience a shortfall or complete lack of sales resulting in little or no
profits and eventual closure of the business.
SINCE WE ARE A DEVELOPMENT STAGE COMPANY, HAVE GENERATED NO REVENUES AND LACK AN
OPERATING HISTORY, AN INVESTMENT IN THE SHARES OFFERED HEREIN IS HIGHLY RISKY
AND COULD RESULT IN A COMPLETE LOSS OF YOUR INVESTMENT IF WE ARE UNSUCCESSFUL IN
OUR BUSINESS PLANS.
Our company was incorporated in April 2008; we have not yet commenced our
business operations; and we have not yet realized any revenues. We have no
operating history upon which an evaluation of our future prospects can be made.
Based upon current plans, we expect to incur operating losses in future periods
as we incur significant expenses associated with the initial startup of our
business. Further, we cannot guarantee that we will be successful in realizing
revenues or in achieving or sustaining positive cash flow at any time in the
future. Any such failure could result in the possible closure of our business or
force us to seek additional capital through loans or additional sales of our
equity securities to continue business operations, which would dilute the value
of any shares you purchase in this offering.
4
WE DO NOT YET HAVE ANY SUBSTANTIAL ASSETS AND ARE TOTALLY DEPENDENT UPON THE
PROCEEDS OF THIS OFFERING TO FULLY FUND OUR BUSINESS. IF WE DO NOT SELL ALL OF
THE SHARES IN THIS OFFERING AND RECEIVE ALL OF THE PROCEEDS, WE WILL HAVE TO
SEEK ALTERNATIVE FINANCING TO COMPLETE OUR BUSINESS PLANS OR ABANDON THEM.
The only cash currently available is the cash paid by our founder for the
acquisition of her shares. In the event we do not sell all of the shares and
raise the total offering proceeds, there can be no assurance that we would be
able to raise the additional funding needed to implement our business plans or
that unanticipated costs will not increase our projected expenses for the year
following completion of this offering. Our auditors have expressed substantial
doubt as to our ability to continue as a going concern.
WE CANNOT PREDICT WHEN OR IF WE WILL PRODUCE REVENUES, WHICH COULD RESULT IN A
TOTAL LOSS OF YOUR INVESTMENT IF WE ARE UNSUCCESSFUL IN OUR BUSINESS PLANS.
We have not yet generated any revenues from operations. In order for us to
continue with our plans and open our business, we must raise our initial capital
to do so through this offering. The timing of the completion of the milestones
needed to commence operations and generate revenues is contingent on the success
of this offering. There can be no assurance that we will generate revenues or
that revenues will be sufficient to maintain our business. As a result, you
could lose all of your investment if you decide to purchase shares in this
offering and we are not successful in our proposed business plans.
OUR CONTINUED OPERATIONS DEPEND ON THE PUBLIC'S ACCEPTANCE OF OUR CUSTOM PRINTED
STATIONERY AND GREETING CARDS. IF THE PUBLIC DOESN'T FIND OUR PRODUCTS DESIRABLE
AND SUITABLE FOR PURCHASE AND WE CANNOT ESTABLISH A CUSTOMER BASE, WE MAY NOT BE
ABLE TO GENERATE ANY REVENUES, WHICH WOULD RESULT IN A FAILURE OF OUR BUSINESS
AND A LOSS OF ANY INVESTMENT YOU MAKE IN OUR SHARES.
The ability to develop custom printed stationery and greeting cards that the
public finds desirable and willing to purchase is critically important to our
success. We cannot be certain that the products that we will be offering will be
appealing to public and as a result there may not be any demand for these
products and our sales could be limited and we may never realize any revenues.
In addition, there are no assurances that if we alter or change our products in
the future that the public's demand for these new offering will develop and this
could adversely affect our business and any possible revenues.
THE LOSS OF THE SERVICES OF RHODA RIZKALLA COULD SEVERELY IMPACT OUR BUSINESS
OPERATIONS AND FUTURE DEVELOPMENT OF OUR PRODUCTS, WHICH COULD RESULT IN A LOSS
OF REVENUES AND YOUR ABILITY TO EVER SELL ANY SHARES YOU PURCHASE IN THIS
OFFERING.
Our performance is substantially dependent upon the professional expertise of
our President, Rhoda Rizkalla. Ms. Rizkalla has extensive marketing expertise
and we are dependent on her abilities to develop and market our products. If she
were unable to perform her duties, this could have an adverse effect on our
business operations, financial condition and operating results if we are unable
to replace her with another individual qualified to develop and market our
products. The loss of her services could result in a loss of revenues, which
could result in a reduction of the value of any shares you purchase in this
offering.
THE STATIONERY AND GREETING CARD INDUSTRY IS HIGHLY COMPETITIVE. IF WE CAN NOT
DEVELOP AND MARKET A DESIRABLE OFFERING OF PRODUCTS THAT THE PUBLIC IS WILLING
PURCHASE, WE WILL NOT BE ABLE TO COMPETE SUCCESSFULLY, OUR BUSINESS MAY BE
ADVERSELY AFFECTED AND WE MAY NEVER BE ABLE TO GENERATE ANY REVENUES.
5
The stationery and greeting card industry is intensely competitive. We will
compete against a number of large well-established companies with greater name
recognition, a more comprehensive offering of products, and with substantially
larger resources than ours; including financial and marketing. In addition to
these large competitors there are numerous smaller operations that have
developed and are marketing custom products. Our competitors include, by way of
example, Hallmark, American Greetings, FineStationery.com, iomoi.com. There can
be no assurance that we can compete successfully in this complex and changing
market. If we cannot successfully compete in this highly competitive industry,
we may never be able to generate revenues or become profitable. As a result, you
may never be able to liquidate or sell any shares you purchase in this offering.
THERE ARE NO SUBSTANTIAL BARRIERS TO ENTRY INTO THE INDUSTRY AND BECAUSE WE DO
NOT CURRENTLY HAVE ANY COPYRIGHT PROTECTION FOR OUR PROPOSED PRODUCTS, THERE IS
NO GUARANTEE SOMEONE ELSE WILL NOT DUPLICATE OUR IDEAS AND BRING THEM TO MARKET
BEFORE WE DO, WHICH COULD SEVERELY LIMIT OUR PROPOSED SALES AND REVENUES.
We believe our ideas for our stationery and greeting cards are unique and
desirable; however, we currently have no copyright for our products or brand
name. As business operations become established, we may seek such protection;
however, we currently have no plans to do so. Since we have no copyright
protection unauthorized persons may attempt to copy aspects of our business,
including our web site design or functionality, products or marketing materials.
Any encroachment upon our corporate information, including the unauthorized use
of our brand name, the use of a similar name by a competing company or a lawsuit
initiated against us for infringement upon another company's proprietary
information or improper use of their copyright, may affect our ability to create
brand name recognition, cause customer confusion and/or have a detrimental
effect on our business. Litigation or proceedings before the U.S. or
International Patent and Trademark Offices may be necessary in the future to
enforce our intellectual property rights, to protect our trade secrets and
domain name and/or to determine the validity and scope of the proprietary rights
of others. Any such infringement, litigation or adverse proceeding could result
in substantial costs and diversion of resources and could seriously harm our
business operations and/or results of operations.
RISKS ASSOCIATED WITH THIS OFFERING:
THE TRADING IN OUR SHARES WILL BE REGULATED BY SECURITIES AND EXCHANGE
COMMISSION RULE 15G-9 WHICH ESTABLISHED THE DEFINITION OF A "PENNY STOCK." THE
EFFECTIVE RESULT BEING FEWER PURCHASERS QUALIFIED BY THEIR BROKERS TO PURCHASE
OUR SHARES, AND THEREFORE A LESS LIQUID MARKET FOR OUR INVESTORS TO SELL THEIR
SHARES.
The shares being offered are defined as a penny stock under the Securities and
Exchange Act of 1934, and rules of the Commission. The Exchange Act and such
penny stock rules generally impose additional sales practice and disclosure
requirements on broker-dealers who sell our securities to persons other than
certain accredited investors who are, generally, institutions with assets in
excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or
annual income exceeding $200,000, or $300,000 jointly with spouse), or in
transactions not recommended by the broker-dealer. For transactions covered by
the penny stock rules, a broker-dealer must make a suitability determination for
each purchaser and receive the purchaser's written agreement prior to the sale.
In addition, the broker-dealer must make certain mandated disclosures in penny
stock transactions, including the actual sale or purchase price and actual bid
and offer quotations, the compensation to be received by the broker-dealer and
certain associated persons, and deliver certain disclosures required by the
Commission. Consequently, the penny stock rules may make it difficult for you to
resell any shares you may purchase, if at all.
6
WE ARE SELLING THIS OFFERING WITHOUT AN UNDERWRITER AND MAY BE UNABLE TO SELL
ANY SHARES. UNLESS WE ARE SUCCESSFUL IN SELLING ALL OF THE SHARES AND RECEIVING
ALL OF THE PROCEEDS FROM THIS OFFERING, WE MAY HAVE TO SEEK ALTERNATIVE
FINANCING TO IMPLEMENT OUR BUSINESS PLANS AND YOU WOULD RECEIVE A RETURN OF YOUR
ENTIRE INVESTMENT.
This offering is self-underwritten, that is, we are not going to engage the
services of an underwriter to sell the shares; we intend to sell them through
our officer and director, who will receive no commissions. She will offer the
shares to friends, relatives, acquaintances and business associates, however,
there is no guarantee that she will be able to sell any of the shares. In the
event we do not sell all of the shares before the expiration date of the
offering, all funds raised will be promptly returned to the investors, without
interest or deduction.
DUE TO THE LACK OF A TRADING MARKET FOR OUR SECURITIES, YOU MAY HAVE DIFFICULTY
SELLING ANY SHARES YOU PURCHASE IN THIS OFFERING.
There is presently no demand for our common stock and no public market exists
for the shares being offered in this prospectus. We plan to contact a market
maker immediately following the effectiveness of this Registration Statement and
apply to have the shares quoted on the OTC Electronic Bulletin Board (OTCBB).
The OTCBB is a regulated quotation service that displays real-time quotes, last
sale prices and volume information in over-the-counter (OTC) securities. The
OTCBB is not an issuer listing service, market or exchange. Although the OTCBB
does not have any listing requirements per se, to be eligible for quotation on
the OTCBB, issuers must remain current in their filings with the SEC or
applicable regulatory authority. Market Makers are not permitted to begin
quotation of a security whose issuer does not meet this filing requirement.
Securities already quoted on the OTCBB that become delinquent in their required
filings will be removed following a 30 or 60 day grace period if they do not
make their required filing during that time. We cannot guarantee that our
application will be accepted or approved and our stock listed and quoted for
sale. As of the date of this filing, there have been no discussions or
understandings between PaperWorks or anyone acting on our behalf with any market
maker regarding participation in a future trading market for our securities. If
no market is ever developed for our common stock, it will be difficult for you
to sell any shares you purchase in this offering. In such a case, you may find
that you are unable to achieve any benefit from your investment or liquidate
your shares without considerable delay, if at all. In addition, if we fail to
have our common stock quoted on a public trading market, your common stock will
not have a quantifiable value and it may be difficult, if not impossible, to
ever resell your shares, resulting in an inability to realize any value from
your investment.
YOU WILL INCUR IMMEDIATE AND SUBSTANTIAL DILUTION OF THE PRICE YOU PAY FOR YOUR
SHARES.
Our existing stockholder acquired her shares at a cost of $.005 per share, a
cost per share substantially less than that which you will pay for the shares
you purchase in this offering. Accordingly, any investment you make in these
shares will result in the immediate and substantial dilution of the net tangible
book value of those shares from the $.015 you pay for them. Upon completion of
the offering, the net tangible book value of your shares will be $.01 per share,
$.005 less than what you paid for them.
WE WILL BE HOLDING ALL PROCEEDS FROM THE OFFERING IN A STANDARD BANK CHECKING
ACCOUNT UNTIL ALL SHARES ARE SOLD HOWEVER THERE IS NO GUARANTEE ALL OF THE FUNDS
WILL BE USED AS OUTLINED IN THIS PROSPECTUS.
All funds received from the sale of shares in this offering will be deposited
into a standard bank checking account until all shares are sold and the offering
is closed, at which time, the proceeds will be transferred to our business
7
operating account. We have committed to use the proceeds raised in this offering
for the uses set forth in the proceeds table. However, certain factors beyond
our control, such as increases in certain costs, could result in the company
being forced to reduce the proceeds allocated for other uses in order to
accommodate these unforeseen changes. The failure of our management to use these
funds effectively could result in unfavorable returns. This could have a
significant adverse effect on our financial condition and could cause the price
of our common stock to decline.
OUR DIRECTOR WILL CONTINUE TO EXERCISE SIGNIFICANT CONTROL OVER OUR OPERATIONS,
WHICH MEANS AS A MINORITY SHAREHOLDER, YOU WOULD HAVE NO CONTROL OVER CERTAIN
MATTERS REQUIRING STOCKHOLDER APPROVAL THAT COULD AFFECT YOUR ABILITY TO EVER
RESELL ANY SHARES YOU PURCHASE IN THIS OFFERING.
After the completion of this offering, our executive officer and director will
own 50% of our common stock. She will have a significant influence in
determining the outcome of all corporate transactions, including the election of
directors, approval of significant corporate transactions, changes in control of
the company or other matters that could affect your ability to ever resell your
shares. Her interests may differ from the interests of the other stockholders
and thus result in corporate decisions that are disadvantageous to other
shareholders.
WE WILL INCUR ONGOING COSTS AND EXPENSES FOR SEC REPORTING AND COMPLIANCE,
WITHOUT REVENUE WE MAY NOT BE ABLE TO REMAIN IN COMPLIANCE, MAKING IT DIFFICULT
FOR INVESTORS TO SELL THEIR SHARES, IF AT ALL.
Our business plan allows for the estimated cost of this Registration Statement
to be paid from our cash on hand. We plan to contact a market maker immediately
following the effectiveness of this Registration Statement and apply to have the
shares quoted on the OTC Electronic Bulletin Board. To be eligible for quotation
on the OTCBB, issuers must remain current in their filings with the SEC. Market
Makers are not permitted to begin quotation of a security whose issuer does not
meet this filing requirement. Securities already quoted on the OTCBB that become
delinquent in their required filings will be removed following a 30 or 60 day
grace period if they do not make their required filing during that time. In
order for us to remain in compliance we will require future revenues to cover
the cost of these filings, which could comprise a substantial portion of our
available cash resources. If we are unable to generate sufficient revenues to
remain in compliance it may be difficult for you to resell any shares you may
purchase, if at all.
USE OF PROCEEDS
When all the shares are sold the gross proceeds from this offering will be
$45,000. We expect to disburse the proceeds from this offering in the priority
set forth below, within the first 12 months after successful completion of this
offering:
Proceeds to Us: $45,000
-------
Advertising and Marketing $13,450
Website design $ 6,000
Equipment $ 5,000
Accounting, Auditing and Legal $ 7,450
Office and Administration $ 5,000
Working Capital $ 8,100
-------
Total Net Proceeds $45,000
=======
8
DETERMINATION OF OFFERING PRICE
The offering price of the shares has been determined arbitrarily by us. The
price does not bear any relationship to our assets, book value, earnings, or
other established criteria for valuing a privately held company. In determining
the number of shares to be offered and the offering price we took into
consideration our capital structure and the amount of money we would need to
implement our business plans. Accordingly, the offering price should not be
considered an indication of the actual value of our securities.
DILUTION OF THE PRICE YOU PAY FOR YOUR SHARES
Dilution represents the difference between the offering price and the net
tangible book value per share immediately after completion of this offering.
Net tangible book value is the amount that results from subtracting total
liabilities and intangible assets from total assets. Dilution arises mainly as a
result of our arbitrary determination of the offering price of the shares being
offered. Dilution of the value of the shares you purchase is also a result of
the lower book value of the shares held by our existing stockholders.
As of August 31, 2008, the net tangible book value of our shares was $13,629 or
approximately $.005 per share, based upon 3,000,000 shares outstanding.
Upon completion of this offering, but without taking into account any change in
the net tangible book value after completion of this offering other than that
resulting from the sale of the shares and receipt of the total proceeds of
$45,000, the net tangible book value of the 6,000,000 shares to be outstanding
will be $58,629, or approximately $.01 per Share. Accordingly, the net tangible
book value of the shares held by our existing stockholder (3,000,000 shares)
will be increased by $.005 per share without any additional investment on her
part. The purchasers of shares in this offering will incur immediate dilution (a
reduction in the net tangible book value per share from the offering price of
$.015 per Share) of $.005 per share. As a result, after completion of the
offering, the net tangible book value of the shares held by purchasers in this
offering would be $.01 per share, reflecting an immediate reduction in the $.015
price per share they paid for their shares.
After completion of the offering, the existing shareholder will own 50% of the
total number of shares then outstanding, for which she will have made a cash
investment of $15,000, or $.005 per Share. Upon completion of the offering, the
purchasers of the shares offered hereby will own 50% of the total number of
shares then outstanding, for which they will have made a cash investment of
$45,000, or $.015 per Share.
The following table illustrates the per share dilution to the new investors and
does not give any effect to the results of any operations subsequent to August
31, 2008:
Price Paid per Share by Existing Shareholder $ .005
Public Offering Price per Share $ .015
Net Tangible Book Value Prior to this Offering $ .005
Net Tangible Book Value After this Offering $ .01
Increase in Net Tangible Book Value per Share Attributable
to cash payments from purchasers of the shares offered $ .005
Immediate Dilution per Share to New Investors $ .005
9
The following table summarizes the number and percentage of shares purchased,
the amount and percentage of consideration paid and the average price per Share
paid by our existing stockholder and by new investors in this offering:
Total
Price Number of Percent of Consideration
Per Share Shares Held Ownership Paid
--------- ----------- --------- ----
Existing
Stockholder $ .005 3,000,000 50% $15,000
Investors in
This Offering $ .015 3,000,000 50% $45,000
PLAN OF DISTRIBUTION
OFFERING WILL BE SOLD BY OUR OFFICER AND DIRECTOR
This is a self-underwritten offering. This Prospectus is part of a Prospectus
that permits our officer and director to sell the Shares directly to the public,
with no commission or other remuneration payable to her for any Shares he sells.
There are no plans or arrangements to enter into any contracts or agreements to
sell the Shares with a broker or dealer. Rhoda Rizkalla, our officer and
director, will sell the shares and intends to offer them to friends, family
members and business acquaintances. In offering the securities on our behalf,
she will rely on the safe harbor from broker dealer registration set out in Rule
3a4-1 under the Securities Exchange Act of 1934.
She will not register as a broker-dealer pursuant to Section 15 of the
Securities Exchange Act of 1934, in reliance upon Rule 3a4-1, which sets forth
those conditions under which a person associated with an Issuer may participate
in the offering of the Issuer's securities and not be deemed to be a
broker-dealer.
a. Our officer and director is not subject to a statutory
disqualification, as that term is defined in Section 3(a)(39)of the
Act, at the time of her participation; and
b. Our officer and director will not be compensated in connection with
her participation by the payment of commissions or other remuneration
based either directly or indirectly on transactions in securities; and
c. Our officer and director is not, nor will she be at the time of her
participation in the offering, an associated person of a
broker-dealer; and
d. Our officer and our director meets the conditions of paragraph
(a)(4)(ii) of Rule 3a4-1 of the Exchange Act, in that she (A)
primarily performs, or is intended primarily to perform at the end of
the offering, substantial duties for or on behalf of our company,
other than in connection with transactions in securities; and (B) is
not a broker or dealer, or been associated person of a broker or
dealer, within the preceding twelve months; and (C) has not
participated in selling and offering securities for any Issuer more
than once every twelve months other than in reliance on Paragraphs
(a)(4)(i) (a)(4)(iii).
10
Our officer, director, control person and affiliates of same do not intend to
purchase any shares in this offering.
TERMS OF THE OFFERING
The shares will be sold at the fixed price of $.015 per share until the
completion of this offering. There is no minimum amount of subscription required
per investor, and subscriptions, once received, are irrevocable.
This offering will commence on the date of this prospectus and continue for a
period not to exceed 180 days (the "Expiration Date"), unless extended by our
Board of Directors for an additional 90 days.
DEPOSIT OF OFFERING PROCEEDS
This is a "best effort", "all or none" offering and, as such, we will not be
able to spend any of the proceeds unless and until all shares are sold and all
proceeds are received. We intend to hold all funds collected for subscriptions
in a separate bank account until the total amount of $45,000 has been received.
At that time, the funds will be transferred to our business account for use in
the implementation of our business plans. In the event the offering is not sold
out prior to the Expiration Date, all funds will be returned to investors,
without interest or deduction.
PROCEDURES AND REQUIREMENTS FOR SUBSCRIPTION
If you decide to subscribe for any shares in this offering, you will be required
to execute a Subscription Agreement and tender it, together with a check or
certified funds to us. Subscriptions, once received by the company, are
irrevocable. All checks for subscriptions should be made payable to PaperWorks
Inc.
DESCRIPTION OF SECURITIES
COMMON STOCK
Our authorized capital stock consists of 75,000,000 shares of common stock, par
value $.001 per share. The holders of our common stock (i) have equal ratable
rights to dividends from funds legally available therefore, when, as and if
declared by our Board of Directors; (ii) are entitled to share in all of our
assets available for distribution to holders of common stock upon liquidation,
dissolution or winding up of our affairs; (iii) do not have preemptive,
subscription or conversion rights and there are no redemption or sinking fund
provisions or rights; and (iv) are entitled to one non-cumulative vote per share
on all matters on which stockholders may vote.
NON-CUMULATIVE VOTING
Holders of shares of our common stock do not have cumulative voting rights,
which means that the holders of more than 50% of the outstanding shares, voting
for the election of directors, can elect all of the directors to be elected, if
they so choose, and, in such event, the holders of the remaining shares will not
be able to elect any of our directors. After this offering is completed, the
present stockholder will own 50% of our outstanding shares and the purchasers in
this offering will own 50%.
11
CASH DIVIDENDS
As of the date of this prospectus, we have not paid any cash dividends to
stockholders. The declaration of any future cash dividend will be at the
discretion of our Board of Directors and will depend upon our earnings, if any,
our capital requirements and financial position, our general economic
conditions, and other pertinent conditions. It is our present intention not to
pay any cash dividends in the foreseeable future, but rather to reinvest
earnings, if any, in our business operations.
INTEREST OF NAMED EXPERTS AND COUNSEL
None of the below described experts or counsel have been hired on a contingent
basis and none of them will receive a direct or indirect interest in the
Company.
Our audited financial statement for the period from inception to August 31,
2008, included in this prospectus has been audited by Ronald R. Chadwick, P.C.
We include the financial statements in reliance on their report, given upon
their authority as experts in accounting and auditing.
The Law Offices of Gary L. Blum, has passed upon the validity of the shares
being offered and certain other legal matters and is representing us in
connection with this offering.
DESCRIPTION OF OUR BUSINESS
GENERAL INFORMATION
PaperWorks Inc. was incorporated in the State of Nevada on April 30, 2008. We
were formed to market our custom stationery and greeting cards. The company was
incorporated by our director.
We are still in the development stage; have not yet commenced business
operations; and we have generated no revenues. In August 2008, we were issued an
opinion by our auditors that raised substantial doubt about our ability to
continue as a going concern based on our current financial position.
PRINCIPAL PRODUCTS AND SERVICES AND THEIR MARKETS
Sales of personalized stationery has grown exponentially in North America over
the past five years. PaperWorks Inc is an online store that provides a catalogue
of designs for any occasions. Consumers can choose ready-made cards or can
create personalized cards in varying formats (fold over card, panel cards,
calling cards and the like for any occasion Engagement, Wedding Shower, Wedding,
Thank You Cards, Birth Announcements, Birthday, Anniversary, Bar Mitzvah,
Retirement, etc. and Personalized offerings: Stationery, Thank you cards, note
cards, calling cards, notepad, address labels, gift tags, gift wrap, ribbon,
invitations).
We plan to initially sell these cards in North America and through our online
Internet store.
We are going to launch a public relations campaign to get our web site exposure
which will direct consumers directly to the website.
Retail information will be available at our proposed website
www.everythingpaper.com. We have secured an extensive library of design for our
card orders as well as have the resources for select custom work if a consumer
so desires. Additionally to increase awareness we will be attending two
12
of the major consumer stationery shows in North America as well as one trade
show to procure additional designs and stationery content for our web site.
We will be dedicated to making ordering invitations, birth announcements,
wedding invitations and holiday cards on-line an easy and painless experience.
Access to frequently asked questions; a design suggestion link and etiquette
section will make ordering easy and convenient.
With the convenience of the web, online shopping has become not only secure but
perhaps the most convenient to peruse custom website in the comfort of one's
home or place of business. Customers will be able to log in and save their work
in case they are pressed for time or want to verify some copy that is required
to complete their order.
Once the site is fully operational we will quickly move on to building a
customer service team, choosing the best vendors to work with and developing the
interactive web experience that has come to define the company's dedication to
customer ease and convenience.
The depth of product offered on the site will be without rival. Every order has
a personal relationship attached to it - making it a truly pleasurable
experience. We will build on a referral program to retain and expand our
customer database.
Our Design Center will be one of the reasons why we will be the premier online
stationery store. The Design center will allow Consumers to enter text line by
line, and allows complete customization of each line of text entered. Everything
from the size, alignment, color and even the typestyle may be changed in our
Design Center.
Once a Consumer has customized the text the way she or he wants it, click the
button that says "Update Preview to Show Your Changes" and he or she will see a
preview of their selections. It is easy to continue making changes, just select
the size, alignment, color or typestyle you want to change and click the "Update
Preview to Show Your Changes" button. The preview image shown with your text on
it is just for you to be able to preview your size, alignment, typestyle and
color choices. A professional typesetter will make all the necessary adjustments
for layout, sizing and spacing.
If a Consumer is not sure of the day or date of your special event falls on, we
will have provided a convenient international calendar for Consumers to confirm
the correct day and date of your event. (Canada and USA holidays only to begin
with).
Our "Save for Later" feature will allow Consumers to save the item he or she
found as well as save any of the customization work he or she has already
completed. Simply, click the "Save for Later" button and your item will be
available to the Consumer anytime. Each Consumer will be asked to set up an
account. A monthly newsletter with new designs or features will be sent out to
the database we have collected.
We plan to update our product offerings quarterly and by Special Occasion.
We are confident in the quality of our products and for any damaged goods while
in transit. Orders of misspelling will be verified by the online orders received
and archived.
13
DISTRIBUTION METHODS
We initially plan to market and promote to a variety of targeted North America
media outlets (print and online) and through our online Internet store. We have
a supplier who is secured to design a propriety line for us and will also give
us access to post her most popular designs and products on our web site. Our
website will list in its press room various publications which have featured our
cards, stationery and custom made personalized products. We will build on this
aspect of word of mouth referrals.
All orders will be fulfilled from our website and Consumers will have a choice
of delivery methods. Delivery time is currently estimated to be within five to
seven business days from the date of the receipt of the order for domestic
orders and ten to fifteen business days for international orders. We will charge
each customer in advance for the shipping costs associated with the order.
As well we will have in place a program of Internet marketing so that key words
relating to customized/personalized stationery so that our web site comes up in
the top three sites available to provide this service.
We believe that a high level of customer service and support is critical to
retaining and expanding a reliable, repeat customer base and for establishing
and maintaining a trusted brand name. Accordingly, while we currently do not
have the financial resources, or the need to employ any customer service
personnel, we do intend to develop a stringent customer service policy. Our
website will automatically notify Consumers of completed orders that are now in
transit. We are dedicated to providing superior customer satisfaction to secure
repeat customers.
Our vision is become one of the leading suppliers of personalized stationery
made with superior quality. We believe Consumers love to see their names on
items.
STATUS OF ANY PUBLICLY ANNOUNCED NEW PRODUCTS
We have not publicly announced any new products.
COMPETITION
We believe that our competitive strengths will consist of the detailing of the
design, the quality of the materials and most importantly, the uniqueness of our
products. Although there are many companies that produce personalized
stationery, most of their products are geared towards functionality and not
elegant or modern designs. Our products can easily cross over from personal to
corporate because of the quality and design. Our target market expands to men,
women, children, families, and corporations.
SOURCES AND AVAILABILITY OF PRODUCTS
We will be contracting with Paperqueen Fine Stationery to provide the majority
of our personalized products, which will be selling on the Internet. Paperqueen
has agreed for a fee to provide access to some of her 3rd party vendors who
specialize in personalized items such as guest towels, gift bags and candles to
name a few.
We plan to outsource all of our manufacturing to a Paperqueen Fine Stationery.
All completed product will be sent out from our offices to ensure quality and
speed of service. We recognize that, as we grow, we will require additional
contractors for manufacturing our products.
14
DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS
We feel that, because of the potential wide base of customers for our services,
we will not rely on one or few major customers.
PATENTS AND TRADEMARKS
We believe our products to be unique. We currently have no patents or trademarks
for our products or brand name; however, as business is established and
operations expand, we may seek such protection. Despite efforts to protect our
proprietary rights, such as our brand and product line names, since we have no
patent or trademark rights unauthorized persons may attempt to copy aspects of
our business, including our web site design, products, product information and
sales mechanics or to obtain and use information that we regard as proprietary,
such as the technology used to operate our web site and content. Any
encroachment upon our proprietary information, including the unauthorized use of
our brand name, the use of a similar name by a competing company or a lawsuit
initiated against us for infringement upon another company's proprietary
information or improper use of their trademark, may affect our ability to create
brand name recognition, cause customer confusion and/or have a detrimental
effect on our business. Litigation or proceedings before the U.S. or
International Patent and Trademark Offices may be necessary in the future to
enforce our intellectual property rights, to protect our trade secrets and
domain name and/or to determine the validity and scope of the proprietary rights
of others. Any such litigation or adverse proceeding could result in substantial
costs and diversion of resources and could seriously harm our business
operations and/or results of operations.
NEED FOR ANY GOVERNMENT APPROVAL OF PRINCIPAL PRODUCTS
We do not require any government approval for our services.
GOVERNMENT AND INDUSTRY REGULATION
We will be subject to federal laws and regulations that relate directly or
indirectly to our operations including securities laws. We will also be subject
to common business and tax rules and regulations pertaining to the operation of
our business.
RESEARCH AND DEVELOPMENT ACTIVITIES
Other than time spent researching our proposed business we have not spent any
funds on research and development activities to date. We do not currently plan
to spend any funds on research and development activities in the future.
ENVIRONMENTAL LAWS
Our operations are not subject to any Environmental Laws.
EMPLOYEES AND EMPLOYMENT AGREEMENTS
We currently have two employees, one of which acts as our executive officer,
namely, Rhoda Rizkalla. Rhoda is devoted to our business and currently is
responsible for sourcing suppliers for materials and contract manufacturers to
15
produce our cards. We need to hire a full time (part-time initially to assist in
the monitoring and fulfillment of order).
DESCRIPTION OF PROPERTY
We do not currently own any property. Our operations are currently being
conducted out of the premises of our President, Rhoda Rizkella on a rent free
basis during our development stage. The office is at 2963 E. Rose Lane, Phoenix,
AZ. We consider our current principal office space arrangement adequate and will
reassess our needs based upon the future growth of the company.
LEGAL PROCEEDINGS
We are not involved in any pending legal proceeding nor are we aware of any
pending or threatened litigation against us.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
No public market currently exists for shares of our common stock. Following
completion of this offering, we intend to apply to have our common stock listed
for quotation on the Over-the-Counter Bulletin Board.
PENNY STOCK RULES
The Securities and Exchange Commission has also adopted rules that regulate
broker-dealer practices in connection with transactions in penny stocks. Penny
stocks are generally equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the Nasdaq system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system).
A purchaser is purchasing penny stock which limits the ability to sell the
stock. The shares offered by this prospectus constitute penny stock under the
Securities and Exchange Act. The shares will remain penny stocks for the
foreseeable future. The classification of penny stock makes it more difficult
for a broker-dealer to sell the stock into a secondary market, which makes it
more difficult for a purchaser to liquidate his/her investment. Any
broker-dealer engaged by the purchaser for the purpose of selling his or her
shares in us will be subject to Rules 15g-1 through 15g-10 of the Securities and
Exchange Act. Rather than creating a need to comply with those rules, some
broker-dealers will refuse to attempt to sell penny stock.
The penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from those rules, to deliver a standardized risk
disclosure document, which:
- contains a description of the nature and level of risk in the market
for penny stock in both public offerings and secondary trading;
- contains a description of the broker's or dealer's duties to the
customer and of the rights and remedies available to the customer with
respect to a violation of such duties or other requirements of the
Securities Act of 1934, as amended;
- contains a brief, clear, narrative description of a dealer market,
including "bid" and "ask" price for the penny stock and the
significance of the spread between the bid and ask price;
16
- contains a toll-free telephone number for inquiries on disciplinary
actions;
- defines significant terms in the disclosure document or in the conduct
of trading penny stocks; and
- contains such other information and is in such form (including
language, type, size and format) as the Securities and Exchange
Commission shall require by rule or regulation;
The broker-dealer also must provide, prior to effecting any transaction in a
penny stock, to the customer:
- the bid and offer quotations for the penny stock;
- the compensation of the broker-dealer and its salesperson in the
transaction;
- the number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the
market for such stock; and
- monthly account statements showing the market value of each penny
stock held in the customer's account.
In addition, the penny stock rules require that prior to a transaction in a
penny stock not otherwise exempt from those rules; the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements will have the effect of reducing the trading
activity in the secondary market for our stock because it will be subject to
these penny stock rules. Therefore, stockholders may have difficulty selling
their securities.
REGULATION M
Our officer and director, who will offer and sell the Shares, is aware that she
is required to comply with the provisions of Regulation M promulgated under the
Securities Exchange Act of 1934, as amended. With certain exceptions, Regulation
M precludes the officers and directors, sales agents, any broker-dealer or other
person who participate in the distribution of shares in this offering from
bidding for or purchasing, or attempting to induce any person to bid for or
purchase any security which is the subject of the distribution until the entire
distribution is complete.
REPORTS
We are subject to certain reporting requirements and will furnish annual
financial reports to our stockholders, certified by our independent accountants,
and will furnish un-audited quarterly financial reports in our quarterly reports
filed electronically with the SEC. All reports and information filed by us can
be found at the SEC website, www.sec.gov.
STOCK TRANSFER AGENT
We do not have a stock transfer agent at this time.
FINANCIAL STATEMENTS
Our fiscal year end is August 31. We intend to provide financial statements
audited by an Independent Registered Public Accounting Firm to our shareholders
in our annual reports. The audited financial statements for the period from
inception, April 30, 2008, to August 31, 2008 begin on page F-1.
17
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
We have generated no revenue since inception and have incurred $921 in
miscellaneous expenses through August 31, 2008.
The following table provides selected financial data about our company for the
period from the date of incorporation through August 31, 2008. For detailed
financial information, see the financial statements included in this prospectus.
Balance Sheet Data: 08/31/2008
------------------- ----------
Cash $14,940
Total assets $14,940
Total liabilities $ 861
Shareholders' equity $14,079
Other than the shares offered by this prospectus, no other source of capital has
been has been identified or sought. If we experience a shortfall in operating
capital prior to funding from the proceeds of this offering, our director has
verbally agreed to advance the company funds to complete the registration
process.
PLAN OF OPERATION
GOING CONCERN
In our audited financial statements as of August 31, 2008 we were issued an
opinion by our auditors that raised substantial doubt about our ability to
continue as a going concern based on our current financial position.
PROPOSED MILESTONES TO IMPLEMENT BUSINESS OPERATIONS
The following milestones are estimates only. The working capital requirements
and the projected milestones are approximations only and subject to adjustment
based on costs and needs. Our 12 month budget is based on minimum operations
which will be completely funded by the $45,000 raised through this offering. If
we begin to generate profits we will increase our sales activity accordingly. We
estimate sales to begin in March 2009 and reach a level to sustain daily
operations by December 2009. Because our business is client-driven, our revenue
requirements will be reviewed and adjusted based on sales. The costs associated
with operating as a public company are included in our budget. Management will
be responsible for the preparation of the required documents to keep the costs
to a minimum. We plan to complete our milestones as follows:
JAN-FEB, 2009
Management will concentrate on the completion of the Registration Statement and
utilize this time to also begin putting together a database of potential
customers. We will hire a website designer to develop a preliminary website at
www.everythingpaper.com that we will be able to provide a brief summary of our
company and supply potential clients with basic information and contact numbers
(estimated cost is $3,000).
18
MARCH 2009
Complete our offering. Hire the website designer to expand the preliminary
website at www.everythingpaper.com as well as provide search engine optimization
for our website domain (estimated cost $3,000). Contact all wholesale stationery
outlets to see if they would like to have their product featured on the website.
Paperqueen Stationery which is personalized will be our key featured stationery
line.
APRIL - JUNE 2009
We will be attending both a trade and consumer show to build our customer base
and online shopping business. (Estimated Cost $5,000)
JULY-SEPT 2009
We plan to start marketing seasonal holiday items on the website for holiday
2009.
NOV - DEC 2009
Coordinating bookings and packages for upcoming peak season; inclusive of
January through April.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Directors of the corporation are elected by the stockholders to a term of one
year and serve until a successor is elected and qualified. Officers of the
corporation are appointed by the Board of Directors to a term of one year and
serves until a successor is duly appointed and qualified, or until he or she is
removed from office. The Board of Directors has no nominating, auditing or
compensation committees.
The name, address, age and position of our officer and director is set forth
below:
Name and Address Age Position(s)
---------------- --- -----------
Rhoda Rizkalla 42 President, Secretary,
2963 E. Rose Lane Chief Financial Officer,
Phoenix, AZ 85016 Chief Executive Officer,
Sole Director
The person named above has held his offices/positions since the inception of our
Company and is expected to hold said offices/positions until the next annual
meeting of our stockholders. The officer and director is our only officer,
director, promoter and control person.
19
BACKGROUND INFORMATION ABOUT OUR OFFICER AND DIRECTOR
Rhoda Rizkalla has been president and CEO and Chairman of the Board of Directors
of the company since inception. She is the President/Owner of The Marquis Group,
LLC which she founded in October 1989, a boutique public relations firm
specializing in consumer media relations, marketing and special event management
for lifestyle-oriented clients in Canada and the United States. Among them
Dermalogica, Better Life Brands, Brian Jessel BMW, Vida Wellness Spas, and
Genuine Health. The Marquis Group opened its second office in Scottsdale,
Arizona in May 2000 and currently has on its roster various national accounts.
Prior to forming Marquis she attended The University of British Columbia's
Bachelor of Arts Program from 1984 through to 1989. Rhoda is very involved in
her community and is active resident of Phoenix, Arizona. She sits on various
charitable committees in both Canada and the United States.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our directors and
executive officers, and persons who own more than ten percent of our common
stock, to file with the Securities and Exchange Commission initial reports of
ownership and reports of changes of ownership of our common stock. Officers,
directors and greater than ten percent stockholders are required by SEC
regulation to furnish us with copies of all Section 16(a) forms they file.
We intend to ensure to the best of our ability that all Section 16(a) filing
requirements applicable to our officers, directors and greater than ten percent
beneficial owners are complied with in a timely fashion.
EXECUTIVE COMPENSATION
Currently, our officer and director receives no compensation for her services
during the development stage of our business operations. She is reimbursed for
any out-of-pocket expenses that she incurs on our behalf. In the future, we may
approve payment of salaries for officers and directors, but currently, no such
plans have been approved. We also do not currently have any benefits, such as
health or life insurance, available to our employees.
SUMMARY COMPENSATION TABLE
Change in
Pension
Value and
Non-Equity Nonqualified
Incentive Deferred All
Name and Plan Compen- Other
Principal Stock Option Compen- sation Compen-
Position Year Salary Bonus Awards Awards sation Earnings sation Totals
- ------------ ---- ------ ----- ------ ------ ------ -------- ------ ------
Rhoda Rizkalla, 2008 0 0 0 0 0 0 0 0
President,
CEO, CFO
and Director
20
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
Option Awards Stock Awards
----------------------------------------------------------------- ----------------------------------------------
Equity
Incentive
Equity Plan
Incentive Awards:
Plan Market or
Awards: Payout
Equity Number of Value of
Incentive Number Unearned Unearned
Plan Awards; of Market Shares, Shares,
Number of Number of Number of Shares Value of Units or Units or
Securities Securities Securities or Units Shares or Other Other
Underlying Underlying Underlying of Stock Units of Rights Rights
Unexercised Unexercised Unexercised Option Option That Stock That That That
Options (#) Options (#) Unearned Exercise Expiration Have Not Have Not Have Not Have Not
Name Exercisable Unexercisable Options (#) Price Date Vested(#) Vested Vested Vested
- ---- ----------- ------------- ----------- ----- ---- --------- ------ ------ ------
Rhoda 0 0 0 0 0 0 0 0 0
Rizkalla
DIRECTOR COMPENSATION
Change in
Pension
Value and
Fees Non-Equity Nonqualified
Earned Incentive Deferred
Paid in Stock Option Plan Compensation All Other
Name Cash Awards Awards Compensation Earnings Compensation Total
---- ---- ------ ------ ------------ -------- ------------ -----
Rhoda Rizkalla 0 0 0 0 0 0 0
OPTION GRANTS. There have been no individual grants of stock options to purchase
our common stock made to the executive officer named in the Summary Compensation
Table.
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUE. There have been no
stock options exercised by the executive officer named in the Summary
Compensation Table.
LONG-TERM INCENTIVE PLAN ("LTIP") AWARDS. There have been no awards made to a
named executive officer in the last completed fiscal year under any LTIP.
COMPENSATION OF DIRECTORS
Directors are permitted to receive fixed fees and other compensation for their
services as directors. The Board of Directors has the authority to fix the
compensation of directors. No amounts have been paid to, or accrued to, our
director in such capacity.
EMPLOYMENT AGREEMENTS
We do not have any employment agreements in place with our sole officer and
director.
21
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the date of this prospectus, the total
number of shares owned beneficially by our director, officers and key employees,
individually and as a group, and the present owners of 5% or more of our total
outstanding shares. The table also reflects what the percentage of ownership
will be assuming completion of the sale of all shares in this offering, which we
can't guarantee. The stockholder listed below has direct ownership of her shares
and possesses sole voting and dispositive power with respect to the shares.
No. of No. of
Shares Shares Percentage of Ownership
Name and Address of Before After Before After
Beneficial Owner Offering Offering Offering Offering
---------------- -------- -------- -------- --------
Rhoda Rizkalla 3,000,000 3,000,000 100% 50%
2963 E. Rose Lane
Phoenix, AZ 85016
All Officers and
Directors as a Group 3,000,000 3,000,000 100% 50%
FUTURE SALES BY EXISTING STOCKHOLDERS
A total of 3,000,000 shares have been issued to the existing stockholder, all of
which are held by our sole officer and director and are restricted securities,
as that term is defined in Rule 144 of the Rules and Regulations of the SEC
promulgated under the Act. Under Rule 144, such shares can be publicly sold,
subject to volume restrictions and certain restrictions on the manner of sale,
commencing one year after their acquisition. Any sale of shares held by the
existing stockholder (after applicable restrictions expire) and/or the sale of
shares purchased in this offering (which would be immediately resalable after
the offering), may have a depressive effect on the price of our common stock in
any market that may develop, of which there can be no assurance.
Our principal shareholder does not have any plans to sell her shares at any time
after this offering is complete.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Rhoda Rizkalla is our sole officer and director. We are currently operating out
of the premises of Ms. Rizkalla, the officer and director of our Company, on a
rent-free basis for administrative purposes. There is no written agreement or
other material terms or arrangements relating to said arrangement.
On April 30, 2008 the Company issued a total of 3,000,000 shares of common stock
to Ms. Rizkalla for cash at $0.005 per share for a total of $15,000.
We do not currently have any conflicts of interest by or among our current
officer, director, key employee or advisors. We have not yet formulated a policy
for handling conflicts of interest; however, we intend to do so upon completion
of this offering and, in any event, prior to hiring any additional employees.
22
INDEMNIFICATION
Pursuant to the Articles of Incorporation and By-Laws of the corporation, we may
indemnify an officer or director who is made a party to any proceeding,
including a law suit, because of his position, if she acted in good faith and in
a manner she reasonably believed to be in our best interest. In certain cases,
we may advance expenses incurred in defending any such proceeding. To the extent
that the officer or director is successful on the merits in any such proceeding
as to which such person is to be indemnified, we must indemnify her against all
expenses incurred, including attorney's fees. With respect to a derivative
action, indemnity may be made only for expenses actually and reasonably incurred
in defending the proceeding, and if the officer or director is judged liable,
only by a court order. The indemnification is intended to be to the fullest
extent permitted by the laws of the State of Nevada.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to our directors, officers and controlling persons pursuant to the
provisions above, or otherwise, we have 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 us of expenses incurred or paid by one of our directors,
officers, or controlling persons in the successful defense of any action, suit
or proceeding, is asserted by one of our directors, officers, or controlling
persons in connection with the securities being registered, we will, unless in
the opinion of our counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification is against public policy as expressed in the Securities Act, and
we will be governed by the final adjudication of such issue.
AVAILABLE INFORMATION
We have filed a registration statement on Form S-1, of which this prospectus is
a part, with the U.S. Securities and Exchange Commission. Upon completion of the
registration, we will be subject to the informational requirements of the
Exchange Act and, in accordance therewith, will file all requisite reports, such
as Forms 10-K, 10-Q and 8-K, proxy statements, under Sec.14 of the Exchange Act,
and other information with the Commission. Such reports, proxy statements, this
registration statement and other information, may be inspected and copied at the
public reference facilities maintained by the Commission at 100 Fifth Street NE,
Washington, D.C. 20549. Copies of all materials may be obtained from the Public
Reference Section of the Commission's Washington, D.C. office at prescribed
rates. You may obtain information regarding the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. The Commission also
maintains a Web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission at http://www.sec.gov.
23
RONALD R. CHADWICK, P.C.
Certified Public Accountant
2851 South Parker Road, Suite 720
Aurora, Colorado 80014
Telephone (303)306-1967
Fax (303)306-1944
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
Paperworks, Inc.
Phoenix, Arizona
I have audited the accompanying balance sheet of Paperworks, Inc. (a development
stage company) as of August 31, 2008 and the related statements of operations,
stockholders' equity and cash flows for the period from April 30, 2008
(inception) through August 31, 2008. These financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted my audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audit provides a reasonable
basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Paperworks, Inc. as of August 31,
2008 and the related statements of operations, stockholders' equity and cash
flows for the period from April 30, 2008 (inception) through August 31, 2008 in
conformity with accounting principles generally accepted in the United States of
America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements the Company has suffered losses from operations that raise
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 1. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/ Ronald R. Chadwick, P.C.
Aurora, Colorado ----------------------------------
October 29, 2008 RONALD R. CHADWICK, P.C.
F-1
PAPERWORKS INC.
Balance Sheets
(A Development Stage Company)
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
August 31,
2008
--------
ASSETS
CURRENT ASSETS
Cash $ 14,940
--------
TOTAL ASSTS $ 14,940
========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 861
--------
TOTAL CURRENT LIABILITIES 861
--------
STOCKHOLDERS' EQUITY
Capital stock
Authorized 75,000,000 ordinary voting shares at $0.001 per share
Issued and outstanding:
3,000,000 common shares at par value 3,000
Additional paid in capital 12,000
--------
15,000
Deficit accumulated during the development stage (921)
--------
TOTAL STOCKHOLDERS' EQUITY 14,079
--------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 14,940
========
Approved on behalf of the board
Rhoda Rizkalla, Director
F-2
PAPERWORKS INC.
Statements of Income
(A Development Stage Company)
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
Accumulated From
Inception Date of
April 30, 2008 to
August 31,
2008
----------
GENERAL AND ADMINISTRATIVE EXPENSES
Bank charges and interest $ 60
Office expenses 861
----------
Total general and administrative expenses 921
----------
Net loss $ (921)
==========
Earnings per share - Basic and diluted $ (0.00)
==========
Weighted average outstanding shares 3,000,000
==========
F-3
PAPERWORKS INC.
Statement of Stockholders' Equity
(A Development Stage Company)
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
Deficit
Accumulated Total
Price Number of Additional Total During the Stock-
Per Common Par Paid-in Capital Exploration holders'
Share Shares Value Capital Stock Stage Equity
----- ------ ----- ------- ----- ----- ------
Balance, April 30, 2008 -- $ -- $ -- $ -- $ -- $ --
August 31, 2008
Subscribed for cash $0.005 3,000,000 3,000 12,000 15,000 -- 15,000
Net loss (921) (921)
--------- ------ ------- ------- ------ -------
Balance, August 31, 2008 3,000,000 $3,000 $12,000 $15,000 $ (921) $14,079
========= ====== ======= ======= ====== =======
F-4
PAPERWORKS INC.
Statements of Cash Flows
(A Development Stage Company)
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
Accumulated From
Inception Date of
April 30, 2008 to
August 31,
2008
--------
CASH DERIVED FROM (USED FOR) OPERATING ACTIVITIES
Net loss for the period $ (921)
Adjustments to reconcile net loss to net cash
Provided by (used in) operating activities
Changes in operating assets and liabilities
Accounts payable 861
--------
Net cash (used in) operating activities (60)
--------
FINANCING ACTIVITIES
Shares subscribed for cash 15,000
--------
Net cash provided by financing activities 15,000
--------
INVESTING ACTIVITIES --
--------
Net cash used for investing activities --
--------
Cash increase during the period 14,940
Cash beginning of the period --
--------
Cash end of the period $ 14,940
========
F-5
PAPERWORKS INC.
Notes to Financial Statements
August 31, 2008
(A Development Stage Company)
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
1. NATURE AND CONTINUANCE OF OPERATIONS
PaperWorks Inc. ("the Company") was incorporated under the laws of State of
Nevada, U.S. on April 30, 2008, with an authorized capital of 75,000,000
common shares with a par value of $0.001. The Company's year end is the end
of August. The Company is in the development stage of its business. During
the period ended August 31, 2008, the Company commenced operations by
issuing shares.
These financial statements have been prepared on a going concern basis
which assumes the Company will be able to realize its assets and discharge
its liabilities in the normal course of business for the foreseeable
future. The Company has incurred losses since inception resulting in an
accumulated deficit of $921 as at August 31, 2008 and further losses are
anticipated in the development of its business raising substantial doubt
about the Company's ability to continue as a going concern. The ability to
continue as a going concern is dependent upon the Company generating
profitable operations in the future and/or to obtain the necessary
financing to meet its obligations and repay its liabilities arising from
normal business operations when they come due. Management intends to
finance operating costs over the next twelve months with existing cash on
hand and loans from directors and or private placement of common stock.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements of the Company have been prepared in accordance
with generally accepted accounting principles in the United States of
America and are presented in US dollars.
DEVELOPMENT STAGE COMPANY
The Company complies with the Financial Accounting Standards Board
Statement No. 7, its characterization of the Company as a development stage
enterprise.
USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the period. Actual results could differ from those estimates.
The carrying value of cash and accounts payable and accrued liabilities
approximates their fair value because of the short maturity of these
instruments. Unless otherwise noted, it is management's opinion the Company
is not exposed to significant interest, currency or credit risks arising
from these financial instruments.
INCOME TAXES
The Company follows the liability method of accounting for income taxes.
Under this method, deferred income tax assets and liabilities are
recognized for the estimated tax consequences attributable to differences
between the financial statement carrying values and their respective income
tax basis (temporary differences). The effect on deferred income tax assets
and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
At August 31, 2008, a full deferred tax asset valuation allowance has been
provided and no deferred tax asset has been recorded.
F-6
PAPERWORKS INC.
Notes to Financial Statements
August 31, 2008
(A Development Stage Company)
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
EARNING PER SHARE
The Company computes loss per share in accordance with SFAS No. 128,
"Earnings per Share" which requires presentation of both basic and diluted
earnings per share on the face of the statement of operations. Basic loss
per share is computed by dividing net loss available to common shareholders
by the weighted average number of outstanding common shares during the
period. Diluted loss per share gives effect to all dilutive potential
common shares outstanding during the period. Dilutive loss per share
excludes all potential common shares if their effect is anti-dilutive.
The Company has no potential dilutive instruments and accordingly basic
loss and diluted loss per share are equal.
STOCK-BASED COMPENSATION
In December 2004, the FASB issued SFAS No. 123R, "Share-Based Payment",
which replaced SFAS No. 123, "Accounting for Stock-Based Compensation" and
superseded APB Opinion No. 25, "Accounting for Stock Issued to Employees".
In January 2005, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin ("SAB") No. 107, "Share-Based Payment", which
provides supplemental implementation guidance for SFAS No. 123R. SFAS No.
123R requires all share-based payments to employees, including grants of
employee stock options, to be recognized in the financial statements based
on the grant date fair value of the award. SFAS No. 123R was to be
effective for interim or annual reporting periods beginning on or after
June 15, 2005, but in April 2005 the SEC issued a rule that will permit
most registrants to implement SFAS No. 123R at the beginning of their next
fiscal year, instead of the next reporting period as required by SFAS No.
123R. The pro-forma disclosures previously permitted under SFAS No. 123 no
longer will be an alternative to financial statement recognition. Under
SFAS No. 123R, the Company must determine the appropriate fair value model
to be used for valuing share-based payments, the amortization method for
compensation cost and the transition method to be used at date of adoption.
The transition methods include prospective and retroactive adoption
options. Under the retroactive options, prior periods may be restated
either as of the beginning of the year of adoption or for all periods
presented. The prospective method requires that compensation expense be
recorded for all unvested stock options and restricted stock at the
beginning of the first quarter of adoption of SFAS No. 123R, while the
retroactive methods would record compensation expense for all unvested
stock options and restricted stock beginning with the first period
restated. The Company adopted the modified prospective approach of SFAS No.
123R for the quarter beginning December 1, 2005. The Company did not record
any compensation expense for the period ended August 31, 2008 because there
were no stock options outstanding prior to the adoption or at August 31,
2008.
F-7
PAPERWORKS INC.
Notes to Financial Statements
August 31, 2008
(A Development Stage Company)
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
RECENT ACCOUNTING PRONOUNCEMENTS
In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain
Hybrid Financial Instruments-an amendment of FASB Statements No. 133 and
140", to simplify and make more consistent the accounting for certain
financial instruments. SFAS No. 155 amends SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities", to permit fair value
re-measurement for any hybrid financial instrument with an embedded
derivative that otherwise would require bifurcation, provided that the
whole instrument is accounted for on a fair value basis. SFAS No. 155
amends SFAS No. 140, "Accounting for the Impairment or Disposal of
Long-Lived Assets", to allow a qualifying special-purpose entity to hold a
derivative financial instrument that pertains to a beneficial interest
other than another derivative financial instrument. SFAS No. 155 applies to
all financial instruments acquired or issued after the beginning of an
entity's first fiscal year that begins after September 15, 2006, with
earlier application allowed. This standard is not expected to have a
significant effect on the Company's future reported financial position or
results of operations.
In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of
Financial Assets, an amendment of FASB Statement No. 140, Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities". This statement requires all separately recognized servicing
assets and servicing liabilities be initially measured at fair value, if
practicable, and permits for subsequent measurement using either fair value
measurement with changes in fair value reflected in earnings or the
amortization and impairment requirements of Statement No. 140. The
subsequent measurement of separately recognized servicing assets and
servicing liabilities at fair value eliminates the necessity for entities
that manage the risks inherent in servicing assets and servicing
liabilities with derivatives to qualify for hedge accounting treatment and
eliminates the characterization of declines in fair value as impairments or
direct write-downs. SFAS No. 156 is effective for an entity's first fiscal
year beginning after September 15, 2006. This adoption of this statement is
not expected to have a significant effect on the Company's future reported
financial position or results of operations.
3. COMMON STOCK
The total number of common shares authorized that may be issued by the
Company is 75,000,000 shares with a par value of one tenth of one cent
($0.001) per share and no other class of shares is authorized.
During the period ended August 31, 2005, the Company issued 3,000,000
shares of common stock for total cash proceeds of $15,000. At August 31,
2008 there were no outstanding stock options or warrants.
4. INCOME TAXES
As of August 31, 2008, the Company had net operating loss carry forwards of
approximately $921 that may be available to reduce future years' taxable
income through 2028. Future tax benefits which may arise as a result of
these losses have not been recognized in these financial statements, as
their realization is determined not likely to occur and accordingly, the
Company has recorded a valuation allowance for the deferred tax asset
relating to these tax loss carry-forwards.
F-8
DEALER PROSPECTUS DELIVERY OBLIGATION
"UNTIL ______________, ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE SECURITIES,
WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER A
PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS."
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Expenses incurred or (expected) relating to this Prospectus and distribution are
as follows:
SEC Fee $ 2
Legal and Professional Fees $ 1,500
Accounting and auditing $ 3,500
Transfer Agent fees $ 750
Printing of Prospectus $ 398
-------
TOTAL $ 6,150
=======
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pursuant to the Articles of Incorporation and By-Laws of the corporation, we may
indemnify an officer or director who is made a party to any proceeding,
including a law suit, because of her position, if she acted in good faith and in
a manner she reasonably believed to be in our best interest. In certain cases,
we may advance expenses incurred in defending any such proceeding. To the extent
that the officer or director is successful on the merits in any such proceeding
as to which such person is to be indemnified, we must indemnify her against all
expenses incurred, including attorney's fees. With respect to a derivative
action, indemnity may be made only for expenses actually and reasonably incurred
in defending the proceeding, and if the officer or director is judged liable,
only by a court order. The indemnification is intended to be to the fullest
extent permitted by the laws of the State of Nevada.
As to indemnification for liabilities arising under the Securities Act of 1933,
as amended, for directors, officers or controlling persons, we have been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy and is, therefore, unenforceable.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
Set forth below is information regarding the issuance and sales of securities
without registration since inception. No such sales involved the use of an
underwriter; no advertising or public solicitation was involved; the securities
bear a restrictive legend; and no commissions were paid in connection with the
sale of any securities.
On April 30, 2008 the Company issued a total of 3,000,000 shares of common stock
to Ms. Rizkalla for cash at $0.005 per share for a total of $15,000.
These securities were issued in reliance upon the exemption contained in Section
4(2) of the Securities Act of 1933. These securities were issued to a promoter
of the company, bear a restrictive legend and were issued to a non-US resident.
II-1
ITEM 16. EXHIBITS.
The following exhibits are included with this registration statement:
Exhibit
Number Description
------ -----------
3.1 Articles of Incorporation
3.2 Bylaws
5 Opinion re: Legality
23.1 Consent of Independent Auditor for 08/31/08 audit
23.3 Consent of Counsel (See Exhibit 5)
99 Subscription Agreement
ITEM 17. UNDERTAKINGS.
a. The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
i. To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
ii. To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20% change
in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement.
iii. To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
4. That, for the purpose of determining liability under the Securities
Act of 1933 to any purchaser:
i. If the registrant is relying on Rule 430B (230.430B of this
chapter):
A. Each prospectus filed by the registrant pursuant to Rule
424(b)(3)shall be deemed to be part of the registration
statement as of the date the filed prospectus was deemed
part of and included in the registration statement; and
II-2
B. Each prospectus required to be filed pursuant to Rule
424(b)(2), (b)(5), or (b)(7) as part of a registration
statement in reliance on Rule 430B relating to an offering
made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the
purpose of providing the information required by section
10(a) of the Securities Act of 1933 shall be deemed to be
part of and included in the registration statement as of the
earlier of the date such form of prospectus is first used
after effectiveness or the date of the first contract of
sale of securities in the offering described in the
prospectus. As provided in Rule 430B, for liability purposes
of the issuer and any person that is at that date an
underwriter, such date shall be deemed to be a new effective
date of the registration statement relating to the
securities in the registration statement to which that
prospectus relates, and the offering of such securities at
that time shall be deemed to be the initial bona fide
offering thereof. Provided, however, that no statement made
in a registration statement or prospectus that is part of
the registration statement or made in a document
incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time
of contract of sale prior to such effective date, supersede
or modify any statement that was made in the registration
statement or prospectus that was part of the registration
statement or made in any such document immediately prior to
such effective date; or
ii. If the registrant is subject to Rule 430C, each prospectus filed
pursuant to Rule 424(b) as part of a registration statement
relating to an offering, other than registration statements
relying on Rule 430B or other than prospectuses filed in reliance
on Rule 430A, shall be deemed to be part of and included in the
registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a
registration statement or prospectus that is part of the
registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement
or prospectus that is part of the registration statement will, as
to a purchaser with a time of contract of sale prior to such
first use, supersede or modify any statement that was made in the
registration statement or prospectus that was part of the
registration statement or made in any such document immediately
prior to such date of first use.
5. That, for the purpose of determining liability of the registrant under
the Securities Act of 1933 to any purchaser in the initial
distribution of the securities: The undersigned registrant undertakes
that in a primary offering of securities of the undersigned registrant
pursuant to this registration statement, regardless of the
underwriting method used to sell the securities to the purchaser, if
the securities are offered or sold to such purchaser by means of any
of the following communications, the undersigned registrant will be a
seller to the purchaser and will be considered to offer or sell such
securities to such purchaser:
i. Any preliminary prospectus or prospectus of the undersigned
registrant relating to the offering required to be filed pursuant
to Rule 424;
ii. Any free writing prospectus relating to the offering prepared by
or on behalf of the undersigned registrant or used or referred to
by the undersigned registrant;
II-3
iii. The portion of any other free writing prospectus relating to the
offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the
undersigned registrant; and
iv. Any other communication that is an offer in the offering made by
the undersigned registrant to the purchaser.
Insofar as indemnification for liabilities arising under the 1933 Act may be
permitted to our director, officer and controlling persons of the small business
issuer pursuant to the foregoing provisions, or otherwise, the small business
issuer has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the 1933 Act, and is,
therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the small business issuer of expenses incurred or paid by a
director, officer or controlling person of the small business issuer 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 small business issuer 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 1933 Act, and will be governed by the
final adjudication of such issue.
3. To remove from registration by means of a post-effective amendment any
of the securities being registered hereby which remain unsold at the
termination of the offering.
4. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors,
officers and controlling persons of the small business issuer pursuant
to the By-Laws of the company, or otherwise, we have been advised that
in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act, and
is, therefore unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment of expenses incurred or paid by a director,
officer or controlling person in the successful defense of any action,
suit or proceeding) is asserted by such director, officer, or other
control person in connection with the securities being registered, we
will, unless in the opinion of our legal 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.
II-4
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the city of Phoenix, AZ
on December 4, 2008.
PaperWorks Inc., Registrant
By: /s/ Rhoda Rizkalla
-------------------------------------
Rhoda Rizkalla, President, Secretary,
Treasurer, Chief Executive Officer,
Chief Financial Officer and
Principal Accounting Officer and
Sole Director
Pursuant to 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 indicated.
/s/ Rhoda Rizkalla Chief Executive Officer December 4, 2008
- ------------------------- ----------------------- ----------------
Rhoda Rizkalla Title Date
/s/ Rhoda Rizkalla Chief Financial Officer December 4, 2008
- ------------------------- ----------------------- ----------------
Rhoda Rizkalla Title Date
/s/ Rhoda Rizkalla Principal Accounting Officer December 4, 2008
- ------------------------- ----------------------- ----------------
Rhoda Rizkalla Title Date
II-5