As filed with the Securities and Exchange Commission on February 5, 2013
Registration No. 333-182970
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-1/A
Amendment #3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
WEBFOLIO INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
7372
(Primary Standard Industrial Classification Code Number)
99-0370768
(IRS Employer Identification No.)
1129 8 Street S.E. Calgary AB Canada T2G 2Z6
web.folio@yahoo.com
Telephone (403)863-6225 Fax (810)963-0278
(Address and telephone number of registrant's principal executive offices)
Robin Thompson, President
Webfolio Inc.
1129 8 Street S.E. Calgary AB Canada T2G 2Z6
web.folio@yahoo.com
Telephone (403)863-6225 Fax (810)963-0278
(Name, address and telephone number of agent for service)
Copies of all communications to:
Kevin M. Murphy, Attorney at Law
6402 Scott Lane
Pearland, TX 77581
info@kevinmurphylaw.com
Telephone: (281)804-1174
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 Offering Aggregate Amount of
to be Amount to be Price Per Offering Registration
Registered Registered Share (2) Price Fee (1)
--------------------------------------------------------------------------------
Common Stock 5,000,000 $0.01 $50,000 $5.73
================================================================================
(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 $.002 per share.
(2) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457.
There is no current market for the securities. Although the registrant's common
stock has a par value of $0.0001, the registrant has valued the common stock in
good faith and for the purposes of the registration fee, based on $0.01 per
share. In the event of a stock split, stock dividend or similar transaction
involving our common stock, the number of shares registered shall automatically
be increased to cover the additional shares of common stock issuable pursuant to
Rule 416 under the Securities Act of 1933, as amended.
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.
================================================================================
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES, AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION, DATED ______, 2013
PROSPECTUS
WEBFOLIO INC.
5,000,000 SHARES OF COMMON STOCK
$0.01 PER SHARE
This is the initial offering of Common Stock of Webfolio Inc. (the "Company")
and no public market exists for the securities being offered. The Company is
offering for sale a total of 5,000,000 shares of its Common Stock on a
"self-underwritten", best efforts basis. The shares will be offered at a fixed
price of $0.01 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. This
offering is on a best efforts basis, meaning that the Company is not required to
sell any specific number or dollar amount of securities but will use its best
efforts to sell the securities offered. The Company has made no arrangements to
place subscription funds in an escrow, trust or similar account which means that
funds from the sale of the shares will be immediately available to the Company
for use in its business plan. See "Use of Proceeds" and "Plan of Distribution".
Subscriptions, once received by the company, are irrevocable. The offering will
end on ______________ (date to be added upon effectiveness).
Webfolio Inc. is a development stage, start-up company with limited operations.
The Company qualifies as an "emerging growth company" as defined in the
Jumpstart our Business Startups Act (the "JOBS Act"). Any investment in the
shares offered herein involves a high degree of risk. You should purchase shares
only 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 7.
Neither the U.S. Securities and Exchange Commission nor any state securities
division has approved or disapproved these securities, or passed upon the
accuracy or adequacy of the disclosures in the prospectus. Any representation to
the contrary is a criminal offense.
Offering Total
Price Amount of Underwriting Proceeds
Per Share Offering Commissions To Us
--------- -------- ----------- -----
Common Stock $0.01 $50,000 $0 $50,000
SUBSCRIPTION INFORMATION
Subscribers purchasing the shares should make checks payable to Webfolio Inc.
Subscribers should also complete a Subscription Agreement, the form of which is
attached as Exhibit 10.1 to this prospectus. Additional copies of the
Subscription Agreement may be obtained by writing or calling the Company at its
office telephone number (403) 863-6225.
TABLE OF CONTENTS
Page No.
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SUMMARY OF PROSPECTUS 3
FORWARD LOOKING STATEMENTS 6
RISK FACTORS 7
USE OF PROCEEDS 14
DETERMINATION OF OFFERING PRICE 15
DILUTION OF THE PRICE YOU PAY FOR YOUR SHARES 15
PLAN OF DISTRIBUTION 16
DESCRIPTION OF SECURITIES 18
INTEREST OF NAMED EXPERTS AND COUNSEL 18
DESCRIPTION OF OUR BUSINESS 18
DESCRIPTION OF PROPERTY 27
LEGAL PROCEEDINGS 27
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 27
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 29
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE 32
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS 32
EXECUTIVE COMPENSATION 33
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 35
TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS 35
INDEMNIFICATION 36
AVAILABLE INFORMATION 36
FINANCIAL STATEMENTS 36
2
WEBFOLIO INC.
1129 8 Street S.E. Calgary AB Canada T2G 2Z6
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," the "Company" and "Webfolio" refer to Webfolio
Inc.
GENERAL INFORMATION ABOUT OUR COMPANY
Webfolio Inc. was incorporated in the State of Deleware on May 16, 2011. The
company plans to develop, market and sell a web-based real estate buyer
management service that will assist real estate investors in selling their
properties. Our target market is professional real estate investors whom we
define as someone who spends at least 25% of their time working on their real
estate investment business. We anticipate the company's web-based application
will include the following features: a user profile, as well as a property
listing feature, to assist the real estate investor in managing his time and
property listings; a buyer manager feature to allow the investor to list and
profile his buyers and then match those buyers to properties the investor has
for sale; an email/letter feature to generate text flyers and property
presentations to the investor's buyers with status follow up; and a
template/form feature to manage a variety of real estate related agreements and
documents. It will cover the lifecycle of selling the real estate investor's
properties from managing initial buyer information to generating agreements
which clarifies the purchase terms and conditions. When the design and
programming of the buyer management service is completed and tested, we will
offer it for sale through an initial annual subscription.
Potential buyers are the life blood of a professional real estate investor's
operation and, as such, investors spend a significant portion of their time
finding people, then building and maintaining relationships with them. An
investor's buyers list is a hard-won asset that requires constant attention to
maintain its value to the investor. Our application is a CRM (customer
relationship management) service specifically designed to assist the real estate
investor in building and maintaining relationships by providing services
particular to each potential buyer. Our service will profile each buyer by the
property characteristics the buyer is seeking, including location, price range,
size, number of rooms, style (single family, condo) and nearby amenities, and
automatically matching to properties the real estate investor owns, with
automatic notifications to those buyers in the form of email or text messages
with details of the properties that are available. Our platform will also
generate the necessary paperwork, based on templates set up by the subscriber to
provide closing documents necessary to close the real estate transaction. The
company will not provide potential buyers or generate buyer leads for investors.
Our application is to provide an effective platform for real estate investors to
maintain their own list of buyers, maintain their own list of properties for
sale and to provide services to streamline the steps from initial buyer contact
through to the sale of the property.
During this time while we are awaiting funding from our proposed offering,
Management has focused, and will continue to focus, on development of the
web-based application that can be achieved without substantial cash flow. We
have:
- Secured our URL and website address: mylistsonline.com; The company
also has secured the following associated URLs: www.mylistsonline.ca,
www.mylistsonline.us, www.mylistsonline.biz and www.mylistsonline.net.
- Sought cost estimates for design and programming of web-based
application;
- Mapped out preliminary flow chart and layout of the application's
navigation pages that will include Home Page, User Profile, My Tasks,
My Calendar, Buyers List, Properties List, Buyer/PropertyActivity,
Target Emails/Letters, Reports/Templates, Help and Contact Us;
- Selected Google App Engine and its database services offered through
the Google App Engine platform as the company's deployment target;
(Google App Engine is a unique hosting platform that allows you to
build applications and run them in Google's data centers using its
global infrastructure);
3
- Installed an open source code editor that will help simplify our
integration and deployment activities (Open source refers to a program
in which the source code is available to the general public for use
and/or modified from its original design);
- Developed website subscriber agreement including terms of service
ownership, document storage, links to 3rd party websites, conduct of
use;
- Developed Privacy Policy for subscribers to safeguard customer
information and communications;
- Researched ad server sites that will allow partner/banner ads to be
included on website for added revenue including Google Adsense as an
affiliate partner to bring more traffic to the site;
- Developed one page description of company's buyer management service
and contact information to begin building database of potential real
estate investors who will participate in test marketing service;
- Contacted several real estate investor associations including the
Canada Real Estate Investment Club and various Calgary, Alberta real
estate investment clubs to participate in test marketing service;
- Developed a revenue generating strategy by offering subscriptions to
real estate investors for using company's service.
In order to reach the revenue generation stage, we need to do the following:
- Contract design and programming of company's web-based service;
- Finalize setup of our development and testing environments;
- Continue to develop marketing content that describes the service and
costs for purpose of collecting names and email addresses of potential
real estate investors who are willing to serve as beta testers of the
application;
- Construction of mobile app that can be used for beta testing;
- Testing web-based application and seeking testimonials for marketing;
- Refine and finalize services in responses to feedback from testers;
- Implement credit card processing for payment of subscription fees;
- Continue building database of potential customers and marketing
service to part-time and full-time real estate investors, real estate
investor clubs, real estate investing coaching services and real
estate associations through email, seminars and conventions;
- Regularly generating new content via blogs, articles, magazines,
videos to describe company's buyer management service and improve
rankings in the major search engines (Google, Bing, Yahoo and Ask
Jeeves)
Currently, our sole officer and director, Robin Thompson, devotes approximately
8-10 hours a week to the business of the Company. We will require the funds from
this offering in order to implement our business plan as discussed in the "Plan
of Operation" section of this prospectus.
The administrative office of the Company is currently located at 1129 8 Street
S.E. Calgary AB Canada T2G 2Z6. We plan to use these offices until we require a
larger space. Our fiscal year end is May 31st.
Webfolio Inc. is a development stage, start-up company with limited operations.
The Company qualifies as an "emerging growth company" as defined in the
Jumpstart our Business Startups Act (the "JOBS Act"). We intend to take
advantage of certain exemptions from various reporting requirements that are
applicable to other public companies that are not emerging growth companies
including, but not limited to, not being required to comply with the auditor
attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced
disclosure obligations regarding executive compensation in our periodic reports
and proxy statements, and exemptions from the requirements of holding a
nonbinding advisory vote on executive compensation and shareholder approval of
any golden parachute payments not previously approved. As well, our election
allows us to delay the adoption of new or revised accounting standards that have
different effective dates for public and private companies until they apply to
private companies. Therefore, as a result of our election, our financial
statements may not be comparable to companies that comply with public company
effective dates.
4
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.
Securities Being Offered: Up to 5,000,000 shares of common stock, par
value $.001
Offering Price per Share: $0.01
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
Net Proceeds to Our Company: $50,000
Use of Proceeds: We intend to use the proceeds to commence our
business operations.
Number of Shares Outstanding
Before the Offering: 5,000,000
Number of Shares Outstanding
After the Offering: 10,000,000
Our current officer and director does not intend to purchase any shares in this
offering.
SELECTED FINANCIAL DATA
The following financial information summarizes the more complete historical
financial information at the end of this prospectus. Total Expenses are composed
of incorporation and banking costs.
As of November 30, 2012
-----------------------
BALANCE SHEET
Total Assets $ 5,055
Total Liabilities $ 89
Stockholder's Equity $ 4,966
Period from May 16, 2011
(date of inception) to
November 30, 2012
-----------------
INCOME STATEMENT
Revenue $ 0
Total Expenses $ 5,034
Net Loss $ (5,034)
5
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
The information contained in this prospectus, including in the documents
incorporated by reference into this prospectus, includes some statements that
are not purely historical and that are "forward-looking statements." Such
forward-looking statements include, but are not limited to, statements regarding
our Company and management's expectations, hopes, beliefs, intentions or
strategies regarding the future, including our financial condition, results of
operations, and the expected impact of the offering on the parties' individual
and combined financial performance. In addition, any statements that refer to
projections, forecasts or other characterizations of future events or
circumstances, including any underlying assumptions, are forward-looking
statements. The words "anticipates," "believes," "continue," "could,"
"estimates," "expects," "intends," "may," "might," "plans," "possible,"
"potential," "predicts," "projects," "seeks," "should," "will," "would" and
similar expressions, or the negatives of such terms, may identify
forward-looking statements, but the absence of these words does not mean that a
statement is not forward-looking.
The forward-looking statements contained in this prospectus are based on current
expectations and beliefs concerning future developments and the potential
effects on the parties and the transaction. There can be no assurance that
future developments actually affecting us will be those anticipated. These
forward-looking statements involve a number of risks, uncertainties (some of
which are beyond the parties' control) or other assumptions that may cause
actual results or performance to be materially different from those expressed or
implied by these forward-looking statements.
6
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 RELATED TO OUR BUSINESS AND INDUSTRY
WE ARE A DEVELOPMENT-STAGE COMPANY IN AN EMERGING MARKET WITH AN UNPROVEN
BUSINESS MODEL AND A SHORT OPERATING HISTORY, WHICH MAKES IT DIFFICULT TO
EVALUATE OUR CURRENT BUSINESS AND FUTURE PROSPECTS AND MAY INCREASE THE RISK OF
YOUR INVESTMENT.
We have only a limited operating history and our current business and future
prospects are difficult to evaluate. We were founded in May 2011 and have not
yet begun to offer our service. You must consider our business and prospects in
light of the risks and difficulties we encounter as a development-stage company
in the new and rapidly evolving market of on-demand application services. These
risks and difficulties include the following:
* our new and unproven business and technology models;
* a limited number of service offerings and risks associated with
developing new service offerings; and
* the difficulties we face in managing future growth in personnel and
operations.
We may not be able to successfully address any of these risks or others,
including the other risks related to our business and industry described below.
Failure to adequately do so could seriously harm our business and cause our
operating results to suffer.
WE HAVE GENERATED NO REVENUE AND MAY INCUR SIGNIFICANT OPERATING LOSSES IN THE
FUTURE.
Our business does not have an established record of profitability and we may
never be profitable. In addition, we expect our operating expenses to increase
in the future as we expand our operations. If future revenue is not generated to
offset these expenses, we will not be profitable. Operating expenses may exceed
our expectations and our financial performance will be adversely affected.
WE DO NOT YET HAVE ANY SUBSTANTIAL ASSETS OR OPERATIONS AND ARE TOTALLY
DEPENDENT UPON THE PROCEEDS OF THIS OFFERING TO FUND OUR BUSINESS. IF WE DO NOT
SELL THE SHARES IN THIS OFFERING, WE WILL HAVE TO SEEK ALTERNATIVE FINANCING OR
RAISE ADDITIONAL CAPITAL TO COMPLETE OUR BUSINESS PLANS OR ABANDON THEM.
The only cash currently available is the cash paid by our founder for the
acquisition of his shares. In the event we do not sell all of the shares, there
can be no assurance that we would be able to raise the additional funding needed
to implement our business plans. If we sell only a portion of the shares, the
implementation of our business plan will be significantly delayed until we
obtain other sources of funding. We have no plans in place to raise additional
funds.
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 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.
BECAUSE OUR CURRENT OFFICER AND DIRECTOR HAS OTHER BUSINESS INTERESTS, HE MAY
NOT BE ABLE OR WILLING TO DEVOTE A SUFFICIENT AMOUNT OF TIME TO OUR BUSINESS
OPERATIONS, CAUSING OUR BUSINESS TO FAIL.
7
Mr. Thompson, our sole officer and director, currently devotes approximately
8-10 hours per week providing management services to us. While he presently
possesses adequate time to attend to our interest, it is possible that the
demands on him from other obligations could increase, with the result that he
would no longer be able to devote sufficient time to the management of our
business. This could negatively impact our business development.
THE LOSS OF MR. THOMPSON COULD SEVERELY IMPACT OUR BUSINESS OPERATIONS AND
FUTURE DEVELOPMENT OF OUR SERVICES, 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, Mr. Thompson. We are dependent on his ability to develop and
market our proposed services. If he were unable to fulfill his responsibilities,
this loss could have an adverse effect on our business operations, financial
condition and operating results if we are unable to replace him with another
individual qualified to develop and market our service. The loss of his 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.
BECAUSE WE ARE SMALL WE DO NOT HAVE AN AUDIT COMMITTEE AND WE DO NOT HAVE
ADEQUATE DISCLOSURE CONTROLS AND PROCEDURES (AS DEFINED IN RULES 13A-15(E) AND
15D-15(E) UNDER THE EXCHANGE ACT).
Because our Board of Directors is comprised solely of Mr. Thompson, who does not
have a professional background in finance or accounting, we do not have an audit
committee financial expert on our board of directors to evaluate the
effectiveness of the Company's adequate disclosure controls and procedures. Mr.
Thompson, acting as sole Director on the Board of Directors, conducted an
evaluation of the effectiveness of the design and operation of our disclosure
controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities and Exchange Act of 1934. Based on this evaluation, he concluded as
that our current disclosure controls and procedures were not effective.
Internal control over financial reporting includes those policies and procedures
that: (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of our assets;
(2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that our receipts and expenditures are being made
only in accordance with authorizations of its management and directors; and (3)
provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of our assets that could have a
material effect on the financial statements.
Management recognizes that there are inherent limitations in the effectiveness
of any system of internal control, and accordingly, even effective internal
control can provide only reasonable assurance with respect to financial
statement preparation and may not prevent or detect material misstatements. In
addition, effective internal control at a point in time may become ineffective
in future periods because of changes in conditions or due to deterioration in
the degree of compliance with our established policies and procedures.
A material weakness is a significant deficiency, or combination of significant
deficiencies, that results in there being a more than remote likelihood that a
material misstatement of the annual or interim financial statements will not be
prevented or detected. Management assessed the effectiveness of the Company's
internal control over financial reporting and identified the following material
weaknesses:
- Lack of proper segregation of duties due to limited personnel
- Lack of a formal review process that includes multiple levels of
review from adequate personnel with requisite expertise
Management is committed to improving its internal controls and will (1) continue
to use third party specialists to address shortfalls in staffing and to assist
the Company with accounting and finance responsibilities, (2) increase the
frequency of independent reconciliations of significant accounts which will
8
mitigate the lack of segregation of duties until there are sufficient personnel
and (3) may consider appointing outside directors and audit committee members in
the future.
BECAUSE WE ARE SMALL AND DO NOT HAVE MUCH CAPITAL, WE MUST LIMIT OUR MARKETING
ACTIVITIES. AS A RESULT, OUR SALES MAY NOT BE ENOUGH TO OPERATE PROFITABLY. IF
WE DO NOT MAKE A PROFIT, WE MAY HAVE TO SUSPEND OR CEASE OPERATIONS.
Due to the fact we are small and do not have much capital, we must limit our
marketing activities to potential customers having the likelihood of purchasing
our software services. We intend to generate revenue through the sale of our
software services. Because we will be limiting the scope of our marketing
activities, we may not be able to generate enough sales to operate profitably.
If we cannot operate profitably, we may have to suspend or cease operations.
FAILURE OF THIRD-PARTY SYSTEMS OR THIRD-PARTY SERVICE AND SOFTWARE PROVIDERS
WHICH WE MAY RELY UPON IN THE FUTURE COULD ADVERSELY AFFECT OUR BUSINESS.
If we are successful in implementing our business plans, we will rely on certain
third-party computer systems or third-party service and software providers,
including data centers, technology platforms, back-office systems, Internet
service providers and communications facilities. Any interruption in these
third-party services, or deterioration in their performance or quality, could
adversely affect our business. If our arrangement with any third party is
terminated, we may not be able to find alternative systems or service providers
on a timely basis or on commercially reasonable terms. This could have a
material adverse effect on our business, financial condition, results of
operations and cash flows.
A DISRUPTION IN ONLINE SERVICE WOULD CEASE OR SUSPEND SERVICE
If we are successful in implementing our business plans, we could not guarantee
that our website would operate without interruption or error. We would be bound
only by a best efforts obligation as regards the operation and continuity of
service. Although we would not be liable for the alteration or fraudulent access
to data and/or accidental transmission through viruses or other harmful conduct
in connection with the use of our website, future disruption of our proposed
online service would adversely affect our business, financial conditions,
results of operations and cash flows.
IF OUR ON-DEMAND APPLICATION SERVICE IS NOT WIDELY ACCEPTED, FUTURE OPERATING
RESULTS WILL BE HARMED. All of our revenue will be generated by our on-demand
application service. As a result, widespread acceptance of our service is
critical to our future success. Factors that may affect market acceptance of our
service include:
* the price and performance of our service;
* the level of customization we can offer;
* the availability, performance and price of competing products and
services; and
* potential reluctance by enterprises to trust third parties to store
and manage their proprietory data.
Many of these factors are beyond our control. The inability of our service to
achieve widespread market acceptance would harm our business.
THE MARKET IN WHICH WE PLAN TO PARTICIPATE IS INTENSELY COMPETITIVE, AND IF WE
DO NOT COMPETE EFFECTIVELY, OUR OPERATING RESULTS COULD BE HARMED.
While management believes we will serve a niche market the larger market for CRM
applications is intensely competitive and rapidly changing, barriers to entry
are relatively low, many of our potential competitors are larger and have more
resources than we do, and with the introduction of new technologies and market
entrants, we expect competition to intensify in the future. If we fail to
compete effectively, our operating results will be harmed. Some of our potential
principal competitors may offer their products at a lower price, which would
result in pricing pressures. If we are unable to maintain competitive pricing,
our future operating results could be negatively impacted.
9
Our potential principal competitors include salesforce.com, zoho.com,
freeCRM.com, sugarCRM.com and base.com. Our potential competitors enjoy
substantial competitive advantages, such as greater name recognition, longer
operating histories and larger marketing budgets, as well as substantially
greater financial, technical and other resources. In addition, many have
established marketing relationships and access to larger customer bases.
As a result, these potential competitors may be able to respond more quickly and
effectively than we will be able to new or changing opportunities, technologies,
standards or customer requirements. Furthermore, because of these advantages,
even if our service is more effective than the products that our competitors
offer, potential customers might accept competitive products and services in
lieu of purchasing our service. For all of these reasons, we may not be able to
compete successfully.
WE MAY NOT BE ABLE TO DEVELOP ENHANCEMENTS AND NEW FEATURES TO OUR SERVICE OR
ACCEPTABLE NEW SERVICES THAT KEEP PACE WITH TECHNOLOGICAL DEVELOPMENTS.
In the future, if we are unable to develop enhancements to and new features for
our service or acceptable new services that keep pace with rapid technological
developments, our business will be harmed. The success of enhancements, new
features and services depends on several factors, including the timely
completion, introduction and market acceptance of the feature or edition.
Failure in this regard may significantly impair our revenue growth.
THE SUCCESS OF OUR BUSINESS DEPENDS ON THE CONTINUED GROWTH AND ACCEPTANCE OF
THE INTERNET AS A BUSINESS TOOL.
Our proposed service depends on the continued acceptance of the Internet as a
communications and commerce platform for enterprises. The Internet could lose
its viability as a business tool due to delays in the development or adoption of
new standards and protocols to handle increased demands of Internet activity,
security, reliability, cost, ease-of-use, accessibility and quality-of-service.
The performance of the Internet and its acceptance as a business tool has been
harmed by "viruses," "worms" and similar malicious programs, and the Internet
has experienced a variety of outages and other delays as a result of damage to
portions of its infrastructure. If for any reason the Internet does not remain a
widespread communications medium and commercial platform, the demand for our
service would be significantly reduced, which would harm our business.
OUR REPORTED FINANCIAL RESULTS MAY BE ADVERSELY AFFECTED BY CHANGES IN
ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES.
Generally accepted accounting principles in the United States are subject to
interpretation by the Financial Accounting Standards Board, or FASB, the
American Institute of Certified Public Accountants, the Securities and Exchange
Commission, or SEC, and various bodies formed to promulgate and interpret
appropriate accounting principles. A change in these principles or
interpretations could have a significant effect on our reported financial
results, and could affect the reporting of transactions completed before the
announcement of a change.
WE ARE AN "EMERGING GROWTH COMPANY" AND WE INTEND TO TAKE ADVANTAGE OF REDUCED
DISCLOSURE AND GOVERNANCE REQUIREMENTS APPLICABLE TO EMERGING GROWTH COMPANIES,
WHICH COULD RESULT IN OUR COMMON STOCK BEING LESS ATTRACTIVE TO INVESTORS.
We are an "emerging growth company," as defined in the Jumpstart Our Business
Startups Act of 2012 and we intend to take advantage of certain exemptions from
various reporting requirements that are applicable to other public companies
that are not emerging growth companies including, but not limited to, not being
required to comply with the auditor attestation requirements of Section 404 of
the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive
compensation in our periodic reports and proxy statements, and exemptions from
the requirements of holding a nonbinding advisory vote on executive compensation
and shareholder approval of any golden parachute payments not previously
approved. As well, our election allows us to delay the adoption of new or
revised accounting standards that have different effective dates for public and
private companies until they apply to private companies. Therefore, as a result
of our election, our financial statements may not be comparable to companies
that comply with public company effective dates.
10
We cannot predict if investors will find our common stock less attractive
because we will rely on these exemptions. If some investors find our common
stock less attractive as a result, there may be a less active trading market for
our common stock and our stock price may be more volatile. We may take advantage
of these reporting exemptions until we are no longer an emerging growth company,
which in certain circumstances could be for up to five years.
RISKS RELATED TO OUR FINANCIAL CONDITION
THERE IS UNCERTAINTY ABOUT OUR ABILITY TO CONTINUE OUR OPERATIONS AS A GOING
CONCERN.
In their audit report dated July 11, 2012, our auditors have expressed an
opinion that doubt exists as to whether we can continue as an ongoing business.
This means that there is substantial doubt that we can continue as an ongoing
business for the next twelve months. As such we may have to cease activities and
you could lose your investment. Because we have been issued an opinion by our
auditor that doubt exists as to whether we can continue as a going concern it
may be more difficult to attract investors.
IF WE ARE UNABLE TO MANAGE OUR FUTURE GROWTH OUR BUSINESS COULD BE HARMED.
If the Company experiences significant growth in the foreseeable future, our
growth may place a significant strain on management, financial, operating and
technical resources. Failure to manage growth effectively could have a material
adverse effect on the Company's financial condition or the results of our
operations.
Since inception on May 16, 2011 to November 30, 2012, we have spent a total of
$5,034 on start-up expenses. We have generated no revenue from business
operations. All proceeds currently held by us are the result of sales of common
stock to a related party.
IF WE ARE FORCED TO INCUR UNANTICIPATED COSTS OR EXPENSES, WE MAY HAVE TO
SUSPEND OR CEASE OPERATIONS ENTIRELY WHICH COULD RESULT IN A TOTAL LOSS OF YOUR
INVESTMENT.
Because we are a small business, with limited assets, we are not in a position
to assume unanticipated costs and expenses. If we have to make changes in our
structure or are faced with circumstances that are beyond our ability to afford,
we may have to suspend operations or cease operations entirely which could
result in a total loss of your investment.
IF OUR COMPANY IS DISSOLVED, IT IS UNLIKELY THAT THERE WILL BE SUFFICIENT ASSETS
REMAINING TO DISTRIBUTE TO OUR SHAREHOLDERS.
In the event of the dissolution of our company, the proceeds realized from the
liquidation of our assets, if any, will be used primarily to pay the claims of
our creditors, if any, before there can be any distribution to the shareholders.
In that case, the ability of purchasers of the offered shares to recover all or
any portion of the purchase price for the offered shares will depend on the
amount of funds realized and the claims to be satisfied there from.
RISKS RELATED TO THIS OFFERING
BECAUSE THERE IS NO PUBLIC TRADING MARKET FOR OUR COMMON STOCK, YOU MAY NOT BE
ABLE TO RESELL YOUR STOCK.
We intend to apply to have our common stock quoted on the OTC Bulletin Board.
This process takes at least 60 days and the application must be made on our
behalf by a market maker. Our stock may be quoted or traded only to the extent
that there is interest by broker-dealers in acting as a market maker. Despite
11
our best efforts, it may not be able to convince any broker/dealers to act as
market-makers and make quotations on the OTC Bulletin Board. We may consider
pursuing a quotation on the OTCBB after this registration becomes effective and
we have completed our offering.
If our common stock becomes quoted and a market for the stock develops, the
actual price of our shares will be determined by prevailing market prices at the
time of the sale.
We cannot assure you that there will be a market in the future for our common
stock. The trading of securities on the OTC Bulletin Board is often sporadic and
investors may have difficulty buying and selling our shares or obtaining market
quotations for them, which may have a negative effect on the market price of our
common stock. You may not be able to sell your shares at their purchase price or
at any price at all. Accordingly, you may have difficulty reselling any shares
you purchase from the selling security holders.
UNTIL WE REGISTER A CLASS OF OUR SECURITIES UNDER SECTION 12 OF THE SECURITIES
EXCHANGE ACT OF 1934 ("EXCHANGE ACT"), WE WILL ONLY BE SUBJECT TO THE PERIODIC
REPORTING OBLIGATIONS IMPOSED BY SECTION 15(D) OF THE EXCHANGE ACT.
Until such time as we register a class of our securities under Section 12 of the
Exchange Act, we will only be subject to the periodic reporting obligations
imposed by Section 15(d) of the Exchange Act. Accordingly, we will not be
subject to the proxy rules, Section 16 short-swing profit provisions, beneficial
ownership reporting, and the bulk of the tender offer rules and the reporting
requirements of Section 13 of the Exchange Act.
WE WILL INCUR ONGOING COSTS AND EXPENSES FOR U.S. SECURITIES AND EXCHANGE
COMMISSION 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.
To be eligible for quotation on the OTCBB, issuers must remain current in their
filings with the U.S. Securities and Exchange Commission. 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.
INVESTING IN OUR COMPANY IS HIGHLY SPECULATIVE AND COULD RESULT IN THE ENTIRE
LOSS OF YOUR INVESTMENT.
Purchasing the offered shares is highly speculative and involves significant
risk. The offered shares should not be purchased by any person who cannot afford
to lose their entire investment. Our business objectives are also speculative,
and it is possible that we would be unable to accomplish them. Our shareholders
may be unable to realize a substantial or any return on their purchase of the
offered shares and may lose their entire investment. For this reason, each
prospective purchaser of the offered shares should read this prospectus and all
of its exhibits carefully and consult with their attorney, business and/or
investment advisor.
WE ARE SELLING THIS OFFERING WITHOUT AN UNDERWRITER AND MAY BE UNABLE TO SELL
ANY SHARES.
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 commission on the sales. He will
offer the shares to friends, relatives, acquaintances and business associates,
however; there is no guarantee that he will be able to sell any of the shares.
Unless he is successful in selling all of the shares and we receive the proceeds
from this offering, we may have to seek alternative financing to implement our
business plans, however, no alternative financing sources have been identified
at this time.
OUR DIRECTOR WILL CONTINUE TO EXERCISE SIGNIFICANT CONTROL OVER OUR OPERATIONS,
WHICH MEANS AS A MINORITY STOCKHOLDER, 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.
12
After the completion of this offering, if we are able to sell all of the shares
being offered, our executive officer and director will own 50% of our common
stock. He 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. His interests
may differ from the interests of the other stockholders and thus result in
corporate decisions that are disadvantageous to other stockholders.
BECAUSE WE CAN ISSUE ADDITIONAL SHARES OF COMMON STOCK, PURCHASERS OF OUR COMMON
STOCK MAY INCUR IMMEDIATE DILUTION AND MAY EXPERIENCE FURTHER DILUTION.
We are authorized to issue up to 130,000,000 shares of common stock. At present,
there are 5,000,000 issued and outstanding shares of common stock, and if we are
successful in completing the Maximum Offering there will be 10,000,000 shares
outstanding. Our Board of Directors has the authority to cause us to issue
additional shares of common stock without consent of any of our stockholders.
Consequently, our stockholders may experience more dilution in their ownership
of our Company in the future, which could have an adverse effect on the trading
market for our shares of common stock.
YOU WILL INCUR IMMEDIATE AND SUBSTANTIAL DILUTION OF THE PRICE YOU PAY FOR YOUR
SHARES.
Our existing stockholder acquired his shares at a cost of $0.0001 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 $0.01 you pay for them. Upon completion of
the offering, assuming all 5,000,000 shares are sold, the net tangible book
value of your shares will be $0.0055 per share, $0.0045 less than what you paid
for them.
IN THE EVENT THAT OUR SHARES ARE TRADED, THEY MAY TRADE UNDER $5.00 PER SHARE
AND THUS WILL BE A PENNY STOCK. TRADING IN PENNY STOCKS HAS MANY RESTRICTIONS
AND THESE RESTRICTIONS COULD SEVERELY AFFECT THE PRICE AND LIQUIDITY OF OUR
SHARES.
In the event that our shares are traded, and our stock trades below $5.00 per
share, our stock would be known as a "penny stock", which is subject to various
regulations involving disclosures to be given to you prior to the purchase of
any penny stock. The U.S. Securities and Exchange Commission (the "SEC") has
adopted regulations which generally define a "penny stock" to be any equity
security that has a market price of less than $5.00 per share, subject to
certain exceptions. Depending on market fluctuations, our common stock could be
considered to be a "penny stock". A penny stock is subject to rules that impose
additional sales practice requirements on broker/dealers who sell these
securities to persons other than established customers and accredited investors.
For transactions covered by these rules, the broker/dealer must make a special
suitability determination for the purchase of these securities. In addition, he
must receive the purchaser's written consent to the transaction prior to the
purchase. He must also provide certain written disclosures to the purchaser.
Consequently, the "penny stock" rules may restrict the ability of broker/dealers
to sell our securities, and may negatively affect the ability of holders of
shares of our common stock to resell them. These disclosures require you to
acknowledge that you understand the risks associated with buying penny stocks
and that you can absorb the loss of your entire investment. Penny stocks are low
priced securities that do not have a very high trading volume. Consequently, the
price of the stock is often volatile and you may not be able to buy or sell the
stock when you want to.
FINANCIAL INDUSTRY REGULATORY AUTHORITY ("FINRA") SALES PRACTICE REQUIREMENTS
MAY ALSO LIMIT YOUR ABILITY TO BUY AND SELL OUR COMMON STOCK, WHICH COULD
DEPRESS THE PRICE OF OUR SHARES.
FINRA rules require broker-dealers to have reasonable grounds for believing that
an investment is suitable for a customer before recommending that investment to
the customer. Prior to recommending speculative low-priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to
obtain information about the customer's financial status, tax status and
investment objectives, among other things. Under interpretations of these rules,
FINRA believes that there is a high probability such speculative low-priced
13
securities will not be suitable for at least some customers. Thus, FINRA
requirements make it more difficult for broker-dealers to recommend that their
customers buy our common stock, which may limit your ability to buy and sell our
shares, have an adverse effect on the market for our shares, and thereby depress
our share price.
THERE IS NO GUARANTEE ALL OF THE FUNDS RAISED IN THE OFFERING WILL BE USED AS
OUTLINED IN THIS PROSPECTUS.
We have committed to use the proceeds raised in this offering for the uses set
forth in the "Use of Proceeds"section. 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.
USE OF PROCEEDS
Our offering is being made on a self-underwritten basis: no minimum number of
shares must be sold in order for the offering to proceed. The offering price per
share is $0.01. The following table sets forth the uses of proceeds assuming the
sale of 10%, 40%, 70% and 100%, respectively, of the securities being offered
for sale by the Company.
Percentage of Offering 10% 40% 70% 100%
---------------------- ------- ------- ------- -------
Proceeds to the Company $ 5,000 $20,000 $35,000 $50,000
Programming $ 500 $ 2,000 $ 7,000 $12,500
Online Project Management $ 0 $ 600 $ 1,250 $ 1,250
Telecommunications & Internet $ 250 $ 1,500 $ 1,500 $ 1,500
Marketing $ 0 $ 5,200 $ 9,100 $13,000
Accounting, Auditing & Legal $ 4,250 $ 9,000 $ 9,000 $ 9,000
Working Capital $ 0 $ 1,700 $ 7,150 $12,750
In the circumstances where we are unable obtain full funding we will be forced
to extend our target dates, reduce planned functionality and spend more time
dealing with the development and maintenance of marketing content and processes.
10% FUNDING SCENARIO
We will keep all of our marketing efforts confined within the company. This will
necessitate that Mr. Thompson split his time between generating marketing
content and developing the system. This will reduce the quality of the marketing
effort because Mr. Thompson is not a marketing expert. We will be restricted to
the amount of time we can obtain from internet marketing experts. This will also
slow the development schedule and reduce the scope of services offered again
because Mr. Thompson has a limited amount of time available to focus on this
project. Project management fees (overseeing the step-by-step monitoring and
completion of the application) will be -0- at this funding level. Accounting
costs include $1,750 for audit, $1,500 for financial reviews, and $1,000 for
legal and EDGAR filing fees. Additional legal, bookkeeping fees and filing
preparation fees are not included. Telecommunications and internet fees
(telephone, internet service provider, hosting, fax fees) will only cover the
cost of the annual internet URLs currently held. The 10% funding scenario will
start initial programming of the Home and Buyers List navigation pages, which
includes actual programming instructions in developing content pages for use,
but may not be completed.
We believe we will be able to operate at a minimal level for the next 12
months at 10% funding, to cover corporate and filing expenses, but the
application's functionality will be delayed and there will be no product
available for beta testing to real estate investors.
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40% FUNDING SCENARIO
We will be able to outsource a portion of marketing content generation to
qualified professionals leaving us to focus our development efforts on
completing all primary system functionality for all navigation pages including
payment collection capabilities. Our accounting, audit, legal fees will be
increased to $9,000 to include $4,750 bookkeeping, filing preparation, and
additional legal and EDGAR expenses. At 40% funding scenario, we believe we will
be able to operate for the next 12 months with our web-based application
available for limited beta testing without the buyer/listing functionality. This
buyer/listing feature will match the buyer's property specifications profiled on
the Buyers List with the properties owned by the investor on the Property List.
The programming of this feature will be delayed until such times as additional
capital is made available.
70% FUNDING SCENARIO
We will be able to outsource the bulk of marketing content generation to
qualified professionals. We will be able to bring on an additional resource for
at least 2 months to carry a large portion of the development efforts. At 70%
funding scenario, we believe we will be able to operate for the next 12 months
and expect to successfully complete a beta release for subscription sales of our
primary functionality and move forward with the development of our planned
secondary functionality though its successful release is dependent on the amount
and quality of feedback from our beta testers, and any problems that arise once
the system is operating under load. It is unlikely we would be able to complete
our plans to make the service available on handheld and mobile devices like
smartphones and tablets until such time as additional capital is made available.
100% FUNDING SCENARIO
We believe will be able to execute our plans as intended. At 100% funding
scenario, we believe we will be able to operate for the next 12 months, as there
will be sufficient capital to retain an additional development resource to see
us through to a complete production release, including making our service
available on handheld and mobile devices.
Additional expenses related to this offering will be paid using current assets
of the Company. The cash balance at November 30, 2012 is $5,055. Costs
associated with this offering are estimated as follows: Legal $250,
Audit/Accounting $2,250, EDGAR $1,500 and SEC Registration Fee $6.
There is no guarantee we will be able to sell the shares being offered in this
prospectus. If we do not close the offering upon the sale of all the shares we
may be unable to complete our plan of operations our business could fail.
DETERMINATION OF OFFERING PRICE
The offering price of $0.01 per share 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 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.
15
As of November 30, 2012, the net tangible book value of our shares was $4,966 or
approximately $.001 per share, based upon 5,000,000 shares outstanding.
Upon 100% 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 all the shares and receipt of the total
proceeds of $50,000, the net tangible book value of the 10,000,000 shares to be
outstanding will be $54,966, or approximately $.0055 per Share. Accordingly, the
net tangible book value of the shares held by our existing stockholder
(5,000,000 shares) will be increased by $.005 per share without any additional
investment on his 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 $.01 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 $.005 per share, reflecting an immediate
reduction in the $.01 price per share they paid for their shares.
After 100% completion of the offering, the existing stockholder will own 50% of
the total number of shares then outstanding, for which he will have made a cash
investment of $10,000, or $.002 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
$50,000, or $.01 per Share.
The following table illustrates the per share dilution to the new investors in
the event only a percentage of the shares are sold, and if all the shares are
sold, and does not give any effect to the results of any operations subsequent
to November 30, 2012:
Percentage of Offering 10% 40% 70% 100%
---------------------- ---------- ---------- ---------- ----------
Proceeds to the Company $ 5,000 $ 20,000 $ 35,000 $ 50,000
Number of Shares 500,000 2,000,000 3,500,000 5,000,000
Price Paid per Share by Existing Stockholder $ .002 $ .002 $ .002 $ .002
Public Offering Price per Share $ .01 $ .01 $ .01 $ .01
Net Tangible Book Value Prior to this Offering $ .001 $ .001 $ .001 $ .001
Net Tangible Book Value After this Offering $ .0018 $ .0036 $ .0047 $ .0055
Increase in Net Tangible Book Value per Share
Attributable to cash payments from purchasers
of the shares offered $ .001 $ .003 $ .004 $ .005
Immediate Dilution per Share to New Investors $ .008 $ .006 $ .005 $ .005
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 $ .002 5,000,000 50% $10,000
Investors in This
Offering $ .01 5,000,000 50% $50,000
PLAN OF DISTRIBUTION
SHARES IN THE 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 him for any shares he may
sell. There are no plans or arrangements to enter into any contracts or
agreements to sell the shares with a broker or dealer. Robin Thompson, our
officer and director, will sell the shares and intends to offer them to friends,
16
family members and business acquaintances. In offering the securities on our
behalf, he will rely on the safe harbor from broker dealer registration set out
in Rule 3a4-1 under the Securities Exchange Act of 1934.
Any investor who wishes to subscribe for shares in this offering, should execute
a Subscription Agreement and tender it, together with a check, bank draft, money
order or cashier's check in US funds payable to Webfolio Inc.
at 1129 8 Street S.E. Calgary AB Canada T2G 2Z6.
Mr. Thompson 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. Mr. Thompson is not subject to a statutory disqualification, as that
term is defined in Section 3(a)(39) of the Act, at the time of his
participation; and,
b. Mr. Thompson will not be compensated in connection with his
participation by the payment of commissions or other remuneration
based either directly or indirectly on transactions in securities; and
c. Mr. Thompson is not, nor will he be at the time of his participation
in the offering, an associated person of a broker-dealer; and
d. Mr. Thompson meets the conditions of paragraph (a)(4)(ii) of Rule
3a4-1 of the Exchange Act, in that he (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
an 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) or (a)(4)(iii).
Our officer, director, control person and affiliates do not intend to purchase
any shares in this offering.
TERMS OF THE OFFERING
The shares will be sold at the fixed price of $.01 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 of 180 days (the "Expiration Date"), unless extended by our Board of
Directors for an additional 90 days. If the board of directors votes to extend
the offering for the additional 90 days, a post-effective amendment to the
registration statement will be filed to notify subscribers and potential
subscribers of the extended offering period.
DEPOSIT OF OFFERING PROCEEDS
The proceeds from the sale of the shares in this offering will be payable to
Webfolio Inc. and will be deposited in the Company's bank account at Bank of
Montreal, 6100 Macleod Trail S.W., Calgary, Alberta T2H 0K5. Proceeds will be
immediately available to the Company for use in implementing our business plan.
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, bank
draft, money order or cashier's check in US funds payable to Webfolio Inc. at
1129 8 Street S.E. Calgary AB Canada T2G 2Z6. Subscriptions, once received by
the company, are irrevocable.
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DESCRIPTION OF SECURITIES
COMMON STOCK
Our authorized capital stock consists of 130,000,000 shares of common stock, par
value $0.0001 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.
VOTING RIGHTS
Directors of the Company are elected at the annual meeting of stockholders by a
plurality of the votes cast at the election. 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 complete and presuming all the shares are
sold, the present stockholder will own 50% of our outstanding shares and the
purchasers in this offering will own, in the aggregate, 50% of our outstanding
shares. Stockholders have no pre-emptive rights.
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 statements for the period from inception to May 31, 2012,
included in this prospectus, have been audited by Stan J.H. Lee, CPA. We include
the financial statements in reliance on their report, given upon their authority
as experts in accounting and auditing.
Kevin M. Murphy, Attorney at Law, 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
OVERVIEW
Webfolio Inc. was incorporated in the State of Delaware on May 16, 2011. The
company plans to develop, market and sell a web-based real estate buyer
management service that will assist real estate investors in selling their
properties. Our target market is professional real estate investors whom we
define as someone who spends at least 25% of their time working on their real
estate investment business. We anticipate the company's web-based application
will include the following features: a user profile, as well as a property
listing feature, to assist the real estate investor in managing his time and
property listings; a buyer manager feature to allow the investor to list and
profile his buyers and then match those buyers to properties the investor has
for sale; an email/letter feature to generate text flyers and property
18
presentations to the investor's buyers with status follow up; and a
template/form feature to manage a variety of real estate related agreements and
documents. It will cover the lifecycle of selling the real estate investor's
properties from managing initial buyer information to generating agreements
which clarifies the purchase terms and conditions. When the design and
programming of the buyer management service is completed and tested, we will
offer it for sale through an initial annual subscription.
Potential buyers are the life blood of a professional real estate investor's
operation and, as such, investors spend a significant portion of their time
finding people, then building and maintaining relationships with them. An
investor's buyers list is a hard-won asset that requires constant attention to
maintain its value to the investor. Our application is a CRM (customer
relationship management) service specifically designed to assist the real estate
investor in building and maintaining relationships by providing services
particular to each potential buyer. Our service will profile each buyer by the
property characteristics the buyer is seeking, including location, price range,
size, number of rooms, style (single family, condo) and nearby amenities, and
automatically matching to properties the real estate investor owns, with
automatic notifications to those buyers in the form of email or text messages
with details of the properties that are available. Our platform will also
generate the necessary paperwork, based on templates set up by the subscriber to
provide closing documents necessary to close the real estate transaction. The
company will not provide potential buyers or generate buyer leads for investors.
Our application is to provide an effective platform for real estate investors to
maintain their own list of buyers, maintain their own list of properties for
sale and to provide services to streamline the steps from initial buyer contact
through to the sale of the property.
During this time while we are awaiting funding from our proposed offering,
Management has focused, and will continue to focus, on development of the
web-based application that can be achieved without substantial cash flow. We
have:
- Secured our URL and website address: mylistsonline.com; The company
also has secured the following associated URLs: www.mylistsonline.ca,
www.mylistsonline.us, www.mylistsonline.biz and www.mylistsonline.net.
- Sought cost estimates for design and programming of web-based
application;
- Mapped out preliminary flow chart and layout of the application's
navigation pages that will include Home Page, User Profile, My Tasks,
My Calendar, Buyers List, Properties List, Buyer/PropertyActivity,
Target Emails/Letters, Reports/Templates, Help and Contact Us;
- Selected Google App Engine and its database services offered through
the Google App Engine platform as the company's deployment target;
(Google App Engine is a unique hosting platform that allows you to
build applications and run them in Google's data centers using its
global infrastructure);
- Installed an open source code editor that will help simplify our
integration and deployment activities (Open source refers to a program
in which the source code is available to the general public for use
and/or modified from its original design);
- Developed website subscriber agreement including terms of service
ownership, document storage, links to 3rd party websites, conduct of
use;
- Developed Privacy Policy for subscribers to safeguard customer
information and communications;
- Researched ad server sites that will allow partner/banner ads to be
included on website for added revenue including Google Adsense as an
affiliate partner to bring more traffic to the site;
- Developed one page description of company's buyer management service
and contact information to begin building database of potential real
estate investors who will participate in test marketing service;
- Contacted several real estate investor associations including the
Canada Real Estate Investment Club and various Calgary, Alberta real
estate investment clubs to participate in test marketing service;
- Developed a revenue generating strategy by offering subscriptions to
real estate investors for using company's service.
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In order to reach the revenue generation stage, we need to do the following:
- Contract design and programming of company's web-based service;
- Finalize setup of our development and testing environments;
- Continue to develop marketing content that describes the service and
costs for purpose of collecting names and email addresses of potential
real estate investors who are willing to serve as beta testers of the
application;
- Construction of mobile app that can be used for beta testing;
- Testing web-based application and seeking testimonials for marketing;
- Refine and finalize services in responses to feedback from testers;
- Implement credit card processing for payment of subscription fees;
- Continue building database of potential customers and marketing
service to part-time and full-time real estate investors, real estate
investor clubs, real estate investing coaching services and real
estate associations through email, seminars and conventions;
- Regularly generating new content via blogs, articles, magazines,
videos to describe company's buyer management service and improve
rankings in the major search engines (Google, Bing, Yahoo and Ask
Jeeves)
We have been 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.
Our 12-month budget for the different funding scenarios is dependent on being
completely funded by the $50,000 we intend to raise through this offering. The
costs associated with operating as a public company are included in our budget.
We cannot however guarantee that we will have sales and the amount raised in
this offering may not be enough to meet the operating expenditures of the
Company. We may be required to raise additional funding or apply for loans in
the next 12 months, however we have no plans to do so at this time.
The following chart details the costs included in our 12 month budget for
operations and how the budget will be effected if not all the shares are sold:
Percentage of Offering 10% 40% 70% 100%
---------------------- ------- ------- ------- -------
Proceeds to the Company $ 5,000 $20,000 $35,000 $50,000
Programming $ 500 $ 2,000 $ 7,000 $12,500
Online Project Management $ 0 $ 600 $ 1,250 $ 1,250
Telecommunications & Internet $ 250 $ 1,500 $ 1,500 $ 1,500
Marketing $ 0 $ 5,200 $ 9,100 $13,000
Accounting, Auditing & Legal $ 4,250 $ 9,000 $ 9,000 $ 9,000
Working Capital $ 0 $ 1,700 $ 7,150 $12,750
Management estimates that we can operate in our current limited operations
scenario for approximately 4-6 months with the cash currently available to the
company. Without funding, we are unable to develop our web-based application. We
believe we have enough cash currently to cover minimal operating expense for 4 -
6 months which include accounting, legal and filing expenses. After that time,
our officer and director has verbally agreed to loan the company funds to allow
us to pay professional fees and operating expenses until we are funded, and can
begin work on the web-based application, however, he has no formal commitment,
arrangement or legal obligation to advance or loan funds to the company. Along
with cash currently available, we will require at least 10% funding ($5,000) to
operate for the next 12 months to cover minimal operating expenses which include
accounting, legal and filing expenses. We will require at least 40% funding
($20,000) to operate for the next 12 months in order to implement our web-based
application so it can be available for limited beta testing. We will require at
least 70% funding ($35,000) to successfully complete a beta release for
subscription sales, and finally we will require at least 100% funding ($50,000)
to successfully complete the mobile application for release to hand-held devices
and notepads.
During this time while we are awaiting funding from our proposed offering
Management has focused, and will continue to focus, on development that can be
achieved without substantial cash flow.
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EMERGING GROWTH COMPANY STATUS UNDER THE JOBS ACT
Webfolio Inc. qualifies as an "emerging growth company" as defined in the
Jumpstart our Business Startups Act (the "JOBS Act").
The JOBS Act creates a new category of issuers known as "emerging growth
companies." Emerging growth companies are those with annual gross revenues of
less than $1 billion (as indexed for inflation) during their most recently
completed fiscal year. The JOBS Act is intended to facilitate public offerings
by emerging growth companies by exempting them from several provisions of the
Securities Act of 1933 and its regulations. An emerging growth company will
retain that status until the earliest of:
* The first fiscal year after its annual revenues exceed $1 billion;
* The first fiscal year after the fifth anniversary of its IPO;
* The date on which the company has issued more than $1 billion in
non-convertible debt during the previous three-year period; and
* The first fiscal year in which the company has a public float of at
least $700 million.
FINANCIAL AND AUDIT REQUIREMENTS
Under the JOBS Act, emerging growth companies are subject to scaled financial
disclosure requirements. Pursuant to these scaled requirements, emerging growth
companies may:
* Provide only two rather than three years of audited financial
statements in their IPO Registration Statement;
* Provide selected financial data only for periods no earlier than those
included in the IPO Registration Statement in all SEC filings, rather
than the five years of selected financial data normally required;
* Delay compliance with new or revised accounting standards until they
are made applicable to private companies; and
* Be exempted from compliance with Section 404(b) of the Sarbanes-Oxley
Act, which requires companies to receive an outside auditor's
attestation regarding the issuer's internal controls.
OFFERING REQUIREMENTS
In addition, during the IPO offering process, emerging growth companies are
exempt from:
* Restrictions on analyst research prior to and immediately after the
IPO, even from an investment bank that is underwriting the IPO;
* Certain restrictions on communications to institutional investors
before filing the IPO registration statement; and
* The requirement initially to publicly file IPO Registration
Statements. Emerging growth companies can confidentially file draft
Registration Statements and any amendments with the SEC. Public
filings of the draft documents must be made at least 21 days prior to
commencement of the IPO "road show."
OTHER PUBLIC COMPANY REQUIREMENTS
Emerging growth companies are also exempt from other ongoing obligations of most
public companies, such as:
* The requirements under Section 14(i) of the Exchange Act and Section
953(b)(1) of the Dodd-Frank Act to disclose executive compensation
information on pay-for-performance and the ratio of CEO to median
employee compensation;
* Certain other executive compensation disclosure requirements, such as
the compensation discussion and analysis, under Item 402 of Regulation
S-K; and
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* The requirements under Sections 14A(a) and (b) of the Exchange Act to
hold advisory votes on executive compensation and golden parachute
payments.
INDUSTRY BACKGROUND
HOSTED SERVICES MARKET
Over the past couple of years virtualization technologies have reached a
critical penetration in server farms which has allowed providers to maximize the
utilization of their hardware while minimizing their costs. This, combined with
widespread broadband internet access, has lead to an industry of service
providers offering practically all layers in the computing stack as hosted,
utility services. This includes things like storage at pennies per GB and
computing cycles at pennies per hour of CPU time to services that will host and
manage client virtual servers to services that offer complete server application
environments including databases, web servers, email servers, etc., all billed
by the amount of time and/or storage consumed. The term `cloud' is also used
because subscribers to these services do not necessarily control which CPU or
virtual machine or whatever services their requests.
The explosive growth of mobile computing lead by devices such as Apple's iPhone
and iPad along with the wide variety of Android devices has created
opportunities for developers to create applications where these devices provide
the user interface but offload the heavy lifting, data storage, etc. to cloud
services. The net effect of this is that people have gotten very comfortable
with the idea of having, not only their email, but a lot of their data residing
somewhere in the cloud without necessarily having a local copy on their machine
or device.
SPECIALIZED BUSINESS SERVICES
The ability to access entire server stacks for next to no cost, combined with
users who have developed a comfort level with their data living in the cloud,
has created a fertile environment for small groups of developers to create and
operate high quality online services that tend to provide focused solutions to
specific problems. There is also a growing movement amongst these services to
also offer APIs (Application Programming Interface) based on standard Internet
protocols which allow other services to programmatically interact with their
service. The net result is a collection of independently developed services that
can be aggregated on the fly to create value for the user that is potentially
greater than the sum of the individual services.
The current state of cloud based services and tools is a perfect storm which
allows providers of business services to reach a global market with high quality
services that offer tremendous value to their users while still generating
sufficient revenue to make the effort worthwhile.
We believe that we can capitalize on this perfect storm to serve active real
estate investors, a market segment that has a high concentration of participants
that understand ROI and value for money, to remove mundane activities and allow
them to accelerate their businesses.
PRINCIPAL PRODUCTS OR SERVICES AND THEIR MARKETS
We intend to market and sell our internet-based real estate buyer management
service to real estate investors to help them streamline the processes of
keeping track of buyers, what those buyers are interested in, and what
properties they have available for their buyers. We intend to design and create
a service that includes easy-to-use online tools that will enable investors to
* create and manage lists of potential buyers along with their property
criteria,
* create and manage lists of properties they have purchased or have
under contract, including the type of deal they have in mind for the
property,
* specify the contents and format of communications, forms, etc. the
system will use to shepherd a property through its life cycle from
listing to sold.
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The service will benefit both investors and potential buyers by streaming
communications and automatically handling the mundane steps in the process so
investors can focus their time on the parts of their businesses that have the
most impact, namely building relationships and finding properties.
We intend to leverage management's relationships with experienced, full-time
real estate investors who also dedicate some of their time teaching courses to
less experienced and novice real estate investors to help these students improve
their skills at investing in real estate for the purposes of making a profit. We
will do this by, firstly having the full-time investors use the services to help
fine-tune the online services, secondly obtaining credible testimonials from
these full time investors, and thirdly, have them highlight how Webfolio's
services have made their businesses run more smoothly to other in their networks
including the students in the courses they teach and other real estate investors
they may be affiliated with or do business with. In return for this marketing
assistance we expect to compensate our professional investors with
* free access to our Premium service (outlined below) and/or,
* through payments for referrals of new users who sign up for either our
Standard or Premium service
We also plan to utilize our concentration of users interested in real estate
investing to offer other businesses that provide services such as renovation,
landscaping, staging, etc. to investors a platform through which they can
advertise their products and services to a motivated market. We believe we will
be able to charge a premium for access to our users who are inclined to avail
themselves of the services these businesses offer.
The pricing and sales structure for Webfolio, Inc. is to maximize monthly
revenue generated from subscription fees and advertisement sales. We expect a
large majority of investors will subscribe to the free version of the service
initially however we believe that by requiring at least a Standard subscription
to access the system through a mobile version of the site, after the free trial
period has elapsed, and providing outstanding service we will be able to convert
a portion of those users into paying customers.
Potential buyers may access our site at no charge. We intend to offer the
following pricing plans to investors under the following subscription packages:
FREE (FOREVER)
This service provides subscribers the option to have up to 10 buyers, and send
10 property listing emails and 10 welcome emails per month. The subscriber will
have limited ability to customize the contents of emails sent by the system.
They will be able to send property listing emails manually and can only send
them to one buyer at a time though the system will provide the list of matching
buyers for each property. Welcome emails will be sent to new buyers
automatically. There is no access to the mobile site. We believe these service
levels will benefit new investors by simplifying a number of basic tasks for
them while still whetting their appetite for a paid subscription.
STANDARD ($10/MONTH - DISCOUNTED TO $100/YEAR IF PAID ANNUALLY)
This service provides subscribers the option to have up to 25 active buyers, and
send up to 25 property listing emails and 25 welcome emails per month. Welcome
emails are all sent automatically. Property listing emails are also
automatically sent to all buyers whose criteria match those of the newly listed
property. Investor subscribers can send email with any content, not just
property listings, to their buyers however the investor will only be able to
initiate these emails through a manual process on the web site. We refer to
these general content emails as `keeping-in-touch' emails because they allow the
investor to keep the (potential) buyer updated with things like how the search
for a property that matches their criteria is progressing, or happenings in the
real estate market, or other potential opportunities the buyer may be interested
in but not recorded in the system, or birthday greetings, etc. All emails can be
fully customized by the subscriber. They have access to the service from the
mobile site we provide. Advances in browser technology, both on the desk top and
in mobile tools such as phones and tablets, allow the creation of rich user
interfaces without the need for `apps' specific to various platforms. This
development makes it feasible to build a single service that can be easily used
from any browser without any significant overhead to maintain separate code
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bases for each target device or operating system. We believe this level of
service will benefit investors as they grow their business and provide a
significant value over the free version.
PREMIUM ($20/MONTH - DISCOUNTED TO $200/YEAR IF PAID ANNUALLY)
This service offers subscribers everything the Standard service has except they
are allowed an unlimited number of active buyers and can have the system send an
unlimited number of welcome emails along with an unlimited number of property
listings and general content emails. The service also includes functionality to
allow subscribers to create an unlimited number of custom email templates which
allows subscribers to do things like targeting communications at a subset of
buyers, etc. In addition to being able to send general content emails manually
subscribers to this service will also have the option of creating schedules of
date and time for the system to send emails of any type to their buyers. They
will also be able to specify that certain emails go only to buyers that meet
certain conditions, for example only buyers who have not visited the site in say
30 days, or those looking for properties in certain areas, etc. We believe this
service will benefit full time real estate investors, whose business operations
regularly generate one or more deals per day, as they seek to grow their real
estate portfolios yet offer enough value to encourage Standard subscribers to
consider upgrading to accelerate their progress.
Although there are numerous options investors have for listing their properties,
we believe we will offer the only service specifically designed to meet the
specific needs of the real estate investor to manage their buyers and allow them
to focus on high-return activities in their businesses. We plan to achieve all
of our business plan goals, however, there is no guarantee we will be successful
in implementing our business plan.
Although Webfolio intends to implement its business plan through the foreseeable
future and will do its best to mitigate the risks associated with its business
plan, there can be no assurance that such efforts will be successful. If we are
incapable of executing our business plan we would then investigate reasonable
business options available to retain value for our shareholders. This could
possibly be achieved by offering the leads generated on our web site or through
other efforts to other firms. We could continue making progress on our business
plan by developing alternatives such as limiting the scope of the services we
offer clients to reduce costs, adjusting or reducing our in-house marketing
costs, or reducing the costs for the development of our web site, and adjusting
our timeline for the delivery of our services. If only partial funding is
received we intend to follow our twelve month time frame, but in a reduced
capacity. The level or reduction of our business operations could be
commensurate with any given level of funding. We could decrease the number of
services we offer, number of clients we handle, reduce in-house marketing
efforts, and adjust our general overhead to any partial funding conditions
including looking for open source libraries in place of licensed libraries and
using lower capacity options for the services we will use or eliminating their
use altogether. We could postpone furniture purchases, and reduce the number of
computers purchased.
Our intention is to produce a working system that is sufficiently marketable to
generate revenue. With this in mind our priorities are as follows:
1. Required (primary) system functionality
2. Marketing
3. Optional (secondary) system functionality
Central to our service offering, our primary functionality, is the capability to
allow investors to build and maintain their potential buyer lists and to
facilitate communications from investors to the buyers on their lists. In order
to collect payments from subscribers we also need to integrate payment
collection functionality into the system. Secondary functionality is the
maintenance of investors' property lists and the matching of an investor's
buyers to the properties the investor has available on their lists. Additional
secondary functionality is the capability of the system to operate easily on
mobile devices such as smartphones and tablets. Mobile devices tend to have
smaller screens, less memory and processing power that laptops and full-sized
computers. These differences necessitate the need for alternative page layouts
and workflows to those possible on more traditional computers.
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In the circumstances where we are unable obtain full funding we will be forced
to extend our target dates, reduce planned functionality and spend more time
dealing with the development and maintenance of marketing content and processes.
10% FUNDING SCENARIO
We will keep all of our marketing efforts confined within the company. This will
necessitate that Mr. Thompson split his time between generating marketing
content and developing the system. This will reduce the quality of the marketing
effort because Mr. Thompson is not a marketing expert. We will be restricted to
the amount of time we can obtain from internet marketing experts. This will also
slow the development schedule and reduce the scope of services offered again
because Mr. Thompson has a limited amount of time available to focus on this
project. Project management fees (overseeing the step-by-step monitoring and
completion of the application) will be -0- at this funding level. Accounting
costs include $1,750 for audit, $1,500 for financial reviews, and $1,000 for
legal and EDGAR filing fees. Additional legal, bookkeeping fees and filing
preparation fees are not included. Telecommunications and internet fees
(telephone, internet service provider, hosting, fax fees) will only cover the
cost of the annual internet URLs currently held. The 10% funding scenario will
start initial programming of the Home and Buyers List navigation pages, which
includes actual programming instructions in developing content pages for use,
but may not be completed.
We believe we will be able to operate at a minimal level for the next 12
months at 10% funding, to cover corporate and filing expenses, but the
application's functionality will be delayed and there will be no product
available for beta testing to real estate investors.
40% FUNDING SCENARIO
We will be able to outsource a portion of marketing content generation to
qualified professionals leaving us to focus our development efforts on
completing all primary system functionality for all navigation pages including
payment collection capabilities. Our accounting, audit, legal fees will be
increased to $9,000 to include $4,750 bookkeeping, filing preparation, and
additional legal and EDGAR expenses. At 40% funding scenario, we believe we will
be able to operate for the next 12 months with our web-based application
available for limited beta testing without the buyer/listing functionality. This
buyer/listing feature will match the buyer's property specifications profiled on
the Buyers List with the properties owned by the investor on the Property List.
The programming of this feature will be delayed until such times as additional
capital is made available.
70% FUNDING SCENARIO
We will be able to outsource the bulk of marketing content generation to
qualified professionals. We will be able to bring on an additional resource for
at least 2 months to carry a large portion of the development efforts. At 70%
funding scenario, we believe we will be able to operate for the next 12 months
and expect to successfully complete a beta release for subscription sales of our
primary functionality and move forward with the development of our planned
secondary functionality though its successful release is dependent on the amount
and quality of feedback from our beta testers, and any problems that arise once
the system is operating under load. It is unlikely we would be able to complete
our plans to make the service available on handheld and mobile devices like
smartphones and tablets until such time as additional capital is made available.
100% FUNDING SCENARIO
We believe will be able to execute our plans as intended. At 100% funding
scenario, we believe we will be able to operate for the next 12 months, as there
will be sufficient capital to retain an additional development resource to see
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us through to a complete production release, including making our service
available on handheld and mobile devices.
Additional expenses related to this offering will be paid using current assets
of the Company. The cash balance at November 30, 2012 is $5,055. Costs
associated with this offering are estimated as follows: Legal $250,
Audit/Accounting $2,250, EDGAR $1,500 and SEC Registration Fee $6.
COMPETITION
While management believes we serve a niche market, the larger market for CRM
applications is intensely competitive and rapidly changing. Barriers to entry
are relatively low, many of our potential competitors are larger and have more
resources than we do, and with the introduction of new technologies and market
entrants, we expect competition to intensify in the future. If we fail to
compete effectively, our operating results will be harmed. Some of our principal
competitors may offer their products at a lower price, which would result in
pricing pressures. If we are unable to maintain competitive pricing, our future
operating results could be negatively impacted.
Our current principal competitors include salesforce.com, zoho.com, freeCRM.com,
sugarCRM.com and base.com, a new online deal management service.
Our potential competitors enjoy substantial competitive advantages, such as
greater name recognition, longer operating histories and larger marketing
budgets, as well as substantially greater financial, technical and other
resources. In addition, many have established marketing relationships and access
to larger customer bases.
As a result, our competitors may be able to respond more quickly and effectively
than we can to new or changing opportunities, technologies, standards or
customer requirements. Furthermore, because of these advantages, even if our
service is more effective than the products that our competitors offer,
potential customers might accept competitive products and services in lieu of
purchasing our service. For all of these reasons, we may not be able to compete
successfully.
SOURCES AND AVAILABILITY OF RAW MATERIALS AND THE NAMES OF PRINCIPAL SUPPLIERS
We do not rely on any "real" raw materials to speak of as the marketable part of
our services will be online.
PATENTS AND TRADEMARKS
We currently have no patents or trademarks for our service or brand name;
however, as business is established and operations expand, we may seek such
protection. Since the service will be entirely web-based no one outside the
Company will have access to the source code or the internal processes. The
source code produced will have the normal copyright headers.
Litigation may be necessary to enforce the Company's copyright and other
intellectual property rights. Litigation could result in substantial costs and
diversion of resources which could harm the Company's business and the Company
could ultimately be unsuccessful in protecting its intellectual property rights.
Further, the Company's intellectual property protection controls across global
operations may not be adequate to fully protect them from the theft or
misappropriation of the Company's intellectual property, which could adversely
harm its business.
GOVERNMENT APPROVAL
We do not require any government approval for our services. As an online
business, our business will not be subject to any environmental laws.
GOVERNMENT AND INDUSTRY REGULATION
We will be subject to local and international laws and regulations that relate
directly or indirectly to our operations. We will also be subject to common
business and tax rules and regulations pertaining to the operation of our
business.
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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 plan to spend funds on
research and development activities in the future development of our software,
integration and services.
EMPLOYEES AND EMPLOYMENT AGREEMENTS
We currently have one employee, Robin Thompson, who devotes 8 - 10 hours per
week to our business. There is no employment agreement with Mr. Thompson.
DESCRIPTION OF PROPERTY
We do not currently own any property. We are currently operating out of the
premises of our President on a rent free basis while we are in the
organizational stage. 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 quoted
on the Over-the-Counter Bulletin Board.
PENNY STOCK RULES
The Securities and Exchange Commission has 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:
a. contains a description of the nature and level of risk in the market
for penny stock in both public offerings and secondary trading;
b. 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;
c. 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;
d. contains a toll-free telephone number for inquiries on disciplinary
actions;
e. defines significant terms in the disclosure document or in the conduct
of trading penny stocks; and
f. 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;
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The broker-dealer also must provide, prior to effecting any transaction in a
penny stock, to the customer:
a. the bid and offer quotations for the penny stock;
b. the compensation of the broker-dealer and its salesperson in the
transaction;
c. 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
d. 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.
SHARES AVAILABLE FOR FUTURE SALE
Upon 100% completion of this Offering, based on our outstanding shares as of the
date of this Prospectus, we will have outstanding an aggregate of 10,000,000
shares of our common stock. Of these shares, upon effectiveness of the
registration statement of which this prospectus forms a part, the 5,000,000
shares covered hereby will be freely transferable without restriction or further
registration under the Securities Act.
The remaining 5,000,000 restricted shares of common stock then outstanding are
owned by Robin Thompson, an officer and director, known as our "affiliate," and
may not be resold in the public market except in compliance with the
registration requirements of the Securities Act or under an exemption under Rule
144 under the Securities Act, if available, or otherwise.
The outstanding shares of our common stock not included in this prospectus will
be available for sale in the public market as follows:
PUBLIC FLOAT
Of our outstanding shares, 5,000,000 shares are beneficially owned by an officer
and director.
RULE 144
In general, under Rule 144, as currently in effect, a person, other than an
affiliate, who has beneficially owned securities for at least six months,
including the holding period of prior owners is entitled to sell his or her
shares without any volume limitations; an affiliate, however, can sell such
number of shares within any three-month period as does not exceed the greater
of:
* 1% of the number of shares of common stock then outstanding, or
* the average weekly trading volume of common stock on the OTC Bulletin
Board during the four calendar weeks preceding the filing of a notice
on Form 144 with respect to that sale.
Sales under Rule 144 are also subject to manner-of-sale provisions, notice
requirements and the availability of current public information about an issuer.
In order to effect a Rule 144 sale of common stock, the transfer agent requires
an opinion from legal counsel. Further, the six month holding period is
applicable only to issuers who have been subject to the reporting requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934 for at least 90
days.
As of the date of this Prospectus, no shares of our common stock are available
for sale under Rule 144.
28
HOLDERS OF OUR COMMON STOCK
As of the date of this Prospectus, we have one stockholder of record.
REPORTS
Upon the effectiveness of the Registration Statement of which this Prospectus is
a part, we will be subject to certain reporting requirements and will file with
the SEC annual reports including annual financial statements, certified by our
independent accountants, and un-audited quarterly financial statements 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
Our stock transfer agent is VStock Transfer, LLC, 77 Spruce Street, Suite 201,
Cedarhurst, NY 11516.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
OVERVIEW
Webfolio Inc. was incorporated in the State of Delaware on May 16, 2011. We
intend to market and sell our internet-based real estate buyer management
service to real estate investors to help them streamline the processes of
keeping track of buyers, what those buyers are interested in, and what
properties they have available for their buyers. Webfolio's objective is to
allow our users, professional real estate investors, to create a database of
potential buyers interested in properties with certain characteristics then
automatically match up those buyers with properties uploaded by those users.
Webfolio's systems will provide real estate listings (whether buying or selling)
to real estate investors. Our services include generating professional-looking
property presentation sheets with projected returns, marking properties as
conditionally sold, and generating purchase agreements. Management has extensive
experience in developing online commercial web sites along with experience
investing in real estate and connections with successful investors who teach
others their craft.
We have been 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.
Our 12-month budget is based on minimum operations which will be completely
funded by the $50,000 we intend to raise through this offering. 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 cannot however guarantee that we will have sales
and the amount raised in this offering may not be enough to meet the operating
expenditures of the Company. We may be required to raise additional funding or
apply for loans in the next 12 months, however we have no plans to do so at this
time.
The administrative office of the Company is currently located at 1129 8 Street
S.E. Calgary AB Canada T2G 2Z6. We plan to use these offices until we require a
larger space. Our fiscal year end is May 31st.
RESULTS OF OPERATIONS
We have generated no revenues and incurred $5,034 in miscellaneous expenses from
inception through November 30, 2012. These expenses primarily consisted of costs
related to organizational fees, i.e. forming the Delaware Company and filing the
extra provincial license documents to operate in Alberta, costs related to the
preparation of the Registration Statement, including the audit, SEC fees and
EDGAR filing.
The following table provides selected financial data about our Company for the
period from the date of incorporation through November 30, 2012. For detailed
financial information, see the financial statements included in this prospectus.
29
Balance Sheet Data: 11/30/2012
------------------- ----------
Cash $5,055
Total assets $5,055
Total liabilities $ 89
Stockholder's equity $4,966
During this time while we are awaiting funding from our proposed offering
Management has focused, and will continue to focus, on development that can be
achieved without substantial cash flow. At this point we have mapped out the
primary areas of functionality the service will offer including basic
high-level, wire frame sketches of screens. We have reviewed hosting services
and selected the Google App Engine as our deployment target. This decision also
led us to decide to use the database services offered through the Google App
Engine platform. We've generated initial domain, service and controller class
designs that will be easily supported by our selected platform and installed an
open-source code editor that will help simplify our integration and deployment
activities. We reviewed freely available open-source libraries that supply
functionality we intend to use. Additionally we've also determined where and how
we will keep our code repositories. On the marketing front, we have vetted our
concept and planned functionality through a number of part time and full time
real estate investors to further refine the planned service offering.
Other than the shares offered by this prospectus, no other source of capital 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.
GOING CONCERN
In our audited financial statements as of May 31, 2012 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 proceeds from this offering.
PLAN OF OPERATION
At present management will concentrate on the completion of the Registration
Statement and utilize this time to also begin putting together a database of
potential customers as well as the continuation of the development of the
software and services for the purpose of the integration of customers into the
Webfolio service.
COMPLETE OUR PUBLIC OFFERING:
We expect to complete our public offering within 180 days after our Registration
Statement is declared effective by the Securities and Exchange Commission. We
intend to concentrate all our efforts on raising capital during this period.
Once we have completed our offering, our specific business plan for the twelve
months thereafter is as follows:
SOFTWARE DEVELOPMENT
Complete Alpha Prototype (1st quarter after funding)
* Establish the development environment and secure hosting arrangements
on Google App Engine
* Implement sign up and authentication logic
* Design and implement database objects required to support intended
functionality
30
* Implement intended workflows
* Implement property matching engine
* Push out limited early release to selected testers
Complete Beta Version (2nd and 3rd quarter after funding)
* Integrate feedback from early testers
* Fix any problems
* Integrate with payment processor
* Implement document customization tools
* Implement mobile browser-friendly version
* Push out limited release to selected testers
Release `Beta' to Public (3rd and 4th quarter after funding)
* Operate as the free version only during beta testing including access
to the mobile site
* Tune up marketing pages
* Get full time instructors who teach real estate investing to include
the service as part of their course offerings
* Enhance user support and communication
Release Production Version (4th quarter after funding)
After we're comfortable we've got the service operating as intended we will
offer early adopters incentives to sign up for a paid version. We enforce
service level offerings now. We will continue to enhance the service offering,
improve responsiveness and stability based on user feedback.
MARKETING AND SALES
Once we're close to the full production release, we focus on marketing through
blogs, SEO, articles, and a social media presence. We also leverage our
relationships with full -time real estate investors to spread the word about the
service.
Once we've obtained our first 100 users we will start signing up partners whose
target markets include real estate investors. We'll arrange for our users to
obtain discounts from our partners and, in return, we will get a referral fee
for each relationship we help establish. We will also offer space for paid
advertisements on the site for businesses who do not necessarily want a full
partnership arrangement.
Based on raising funding from our offering, we have budgeted the following
amounts over the 12 months following the successful completion of this offering,
these amounts may be adjusted based upon sales and revenue:
Percentage of Offering 10% 40% 70% 100%
---------------------- ------- ------- ------- -------
Proceeds to the Company $ 5,000 $20,000 $35,000 $50,000
Programming $ 500 $ 2,000 $ 7,000 $12,500
Online Project Management $ 0 $ 600 $ 1,250 $ 1,250
Telecommunications & Internet $ 250 $ 1,500 $ 1,500 $ 1,500
Marketing $ 0 $ 5,200 $ 9,100 $13,000
Accounting, Auditing & Legal $ 4,250 $ 9,000 $ 9,000 $ 9,000
Working Capital $ 0 $ 1,700 $ 7,150 $12,750
31
RESULTS OF OPERATIONS
FROM INCEPTION ON MAY 16, 2011 TO NOVEMBER 30, 2012
As of November 30, 2012 we have had limited operations, generated no revenues
from our business operations and incurred losses of $5,034 since inception.
LIQUIDITY AND CAPITAL RESOURCES
Since inception, we sold 5,000,000 shares of common stock to our officer and
director for $10,000. As of November 30, 2012, our total assets were $5,055 and
our total liabilities were $89.
LIMITED OPERATING HISTORY; NEED FOR ADDITIONAL CAPITAL
There is no historical financial information about us upon which to base an
evaluation of our performance. We are in start-up stage operations and have
generated no revenues. We cannot guarantee we will be successful in our business
operations. Our business is subject to risks inherent in the establishment of a
new business enterprise, including limited financial and managerial resources
and possible cost overruns due to price and cost increases in services and
products.
We have no assurance that future financing will be available to us on acceptable
terms or at all. If financing is not available on satisfactory terms, we may be
unable to continue, develop or expand our operations. Equity financing could
result in additional dilution to existing stockholders.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to investors.
REVENUE RECOGNITION
The Company records revenue on the accrual basis when all goods and services
have been performed and delivered, the amounts are readily determinable, and
collection is reasonably assured. The Company has not generated any revenue
since its inception.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Directors of the Company are elected by the stockholders to a term of one year
and serve until their successors are elected and qualified. Officers of the
Company are appointed by the Board of Directors to a term of one year and serve
until their successors are duly appointed and qualified, or until the officer 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)
---------------- --- -----------
Robin Thompson 47 President, Secretary, Chief Executive Officer,
1129 8 Street S.E. Chief Financial Officer and Director
Calgary, AB
T2G 2Z6 Canada
32
Mr. Thompson has held his office/position since the inception of our Company. He
is expected to hold said office/position until the next annual meeting of our
stockholders. The officer and director named above is our only officer,
director, promoter and control person.
BACKGROUND INFORMATION ABOUT OUR OFFICER AND DIRECTOR
ROBIN THOMPSON has been President, CEO, CFO, Secretary and Director of Webfolio
Inc. from May 2011 to the present. From April 2012 to the present Mr. Thompson
has been Director of Information and Business Services at Alberta Insurance
Council. From November 2010 to March 2012 he served as a Senior Developer for
Alberta Insurance Council. From February 2000 to the present he has been
Principal Systems Architect at LPD Enterprises Inc., a software consulting firm
based in Calgary, Alberta. Mr. Thompson is a certified Professional Engineer
with APEGGA and received his BSc in Electrical Engineering from the University
of Alberta.
During the past ten years, Mr. Thompson has not been the subject of the
following events:
1. Any bankruptcy petition filed by or against any business of which Mr.
Thompson was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time.
2. Any conviction in a criminal proceeding or being subject to a pending
criminal proceeding.
3. An order, judgment, or decree, not subsequently reversed, suspended or
vacated, or any court of competent jurisdiction, permanently or temporarily
enjoining, barring, suspending or otherwise limiting Mr. Thompson's involvement
in any type of business, securities or banking activities.
4. Found by a court of competent jurisdiction (in a civil action), the
Securities and Exchange Commission or the Commodity Future Trading Commission to
have violated a federal or state securities or commodities law, and the judgment
has not been reversed, suspended or vacated.
CORPORATE GOVERNANCE
We do not have a compensation committee and we do not have an audit committee
financial expert. We do not have a compensation committee because our Board of
Directors consists of one director and we do not pay any compensation at this
time. We do not have an audit committee financial expert because we believe the
cost related to retaining a financial expert at this time is prohibitive in the
circumstances of our Company. Further, because we have no operations, at the
present time, we believe the services of a financial expert are not warranted.
CONFLICTS OF INTEREST
We are not aware of any conflicts of interest.
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 his services
during the development stage of our business operations. They may be reimbursed
for any out-of-pocket expenses that they incur on our behalf. In the future, we
may approve payment of salaries for officers and directors. We also do not
currently have any benefits, such as health or life insurance, currently
available to our employee.
33
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
------------ ---- ------ ----- ------ ------ ------ -------- ------ ------
Robin Thompson, 2012 0 0 0 0 0 0 0 0
President, CEO, 2011 0 0 0 0 0 0 0 0
CFO and Director
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
---- ----------- ------------- ----------- ----- ---- --------- ------ ------ ------
Robin 0 0 0 0 0 0 0 0 0
Thompson
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
---- ---- ------ ------ ------------ -------- ------------ -----
Robin Thompson 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.
34
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 an employment agreement in place with Mr. Thompson.
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 the shares in the percentages noted,
which we can't guarantee. The stockholder listed below has direct ownership of
his shares and possesses sole voting and dispositive power with respect to the
shares.
Name and No. of No. of Percentage
Address of Shares Shares of Ownership
Beneficial Before After Before After Completion of Offering at
Owner Offering Offering Offering 100% 70% 40% 10%
----- -------- -------- -------- -------- -------- -------- --------
Robin Thompson 5,000,000 5,000,000 100% 50% 59% 72% 91%
1129 8 Street S.E.
Calgary, AB T2G 2Z6
Canada
All Officers and
Directors as a Group 5,000,000 5,000,000 100% 50% 59% 72% 91%
FUTURE SALES BY EXISTING STOCKHOLDERS
A total of 5,000,000 shares have been issued to the existing stockholder, all of
which are held by Robin Thompson, an 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) 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.
TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS
On December 1, 2011 the Company issued a total of 5,000,000 shares of common
stock to Mr. Thompson for cash at $0.002 per share for a total of $10,000.
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.
35
INDEMNIFICATION
The Articles and By-Laws of Webfolio Inc. have no specific provisions to allow
for the indemnification of the officer and director in regard to his carrying
out the duties of his offices. Indemnification of directors and officers is as
provided by the General Corporate Law of the State of Delaware. We have been
advised that in the opinion of the Securities and Exchange Commission
indemnification for liabilities arising under the Securities Act 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 is asserted by our director, officer, or other controlling person in
connection with the securities registered, we will, unless in the opinion of our
legal counsel the matter has been settled by controlling precedent, submit the
question of whether such indemnification is against public policy to a court of
appropriate jurisdiction. We will then be governed by the court's decision.
AVAILABLE INFORMATION
We intend to file annual, quarterly and special reports, and other information
with the SEC, as required. You may read or obtain a copy of the registration
statement to be filed or any other information we file with the SEC at the SEC's
Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Copies of
all materials may be obtained from the Public Reference Section of the SEC'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 SEC also maintains an internet site that contains reports,
information statements and other information regarding registrants that file
electronically with the SEC at http://www.sec.gov. The Company will voluntarily
provide electronic or paper copies of its filings with the SEC free of charge
upon request.
FINANCIAL STATEMENTS
Our fiscal year end is May 31, 2012. We will provide audited financial
statements to our stockholders on an annual basis; the statements will be
prepared and then will be audited by the independent PCAOB registered CPA firm
of Stan J.H. Lee.
36
Stan Jeong-Ha Lee, CPA
2160 North Central Rd. Suite 209 * Fort Lee * NJ 07024
P.O. Box 436402 * San Diego * CA 92143-9402
619-623-7799 * Fax 619-564-3408 * E-mail stan2u@gmail.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
WEBFOLIO INC.
We have audited the accompanying balance sheets of WEBFOLIO INC. (the "Company")
as of May 31, 2012 and 2011 and the related consolidated statements of
operation, shareholders' equity and cash flows for the period beginning May 16,
2011 ( date of inception) to May 31, 2011 and for the fiscal year ended May 31,
2012 and for the cumulative period from May 16, 2011 (date of inception) to May
31, 2012. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. An audit includes consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of WEBFOLIO INC. as of May 31,
2012 and 2011, and the results of its operation and its cash flows for the
periods aforementioned in conformity with U.S. generally accepted accounting
principles.
The financial statements have been prepared assuming that the Company will
continue as a going concern. As discussed in the note to the financial
statements, the Company lacks liquidity and has accumulated losses from
operations which raises substantial doubt about its ability to continue as a
going concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
/s/ Stan Jeong-Ha Lee, CPA
----------------------------------
Stan Jeong-Ha Lee, CPA
July 11, 2012
Fort Lee, NJ, 07024
F-1
WEBFOLIO INC.
(A Development Stage Company)
Balance Sheets
--------------------------------------------------------------------------------
May 31, 2012 May 31, 2011
------------ ------------
ASSETS
CURRENT ASSETS
Cash $ 8,916 $ --
Other current assets 11 --
-------- --------
TOTAL CURRENT ASSETS 8,927 --
-------- --------
TOTAL ASSETS $ 8,927 $ --
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Officer advances $ 89 $ 163
-------- --------
TOTAL CURRENT LIABILITIES 89 163
TOTAL LIABILITIES 89 163
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, ($0.0001 par value, 130,000,000 shares
authorized; 5,000,000 shares issued and outstanding
as of May 31, 2012 and 2011 500 --
Additional paid-in capital 9,500 --
Deficit accumulated during development stage (1,162) (163)
-------- --------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) 8,838 (163)
-------- --------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT) $ 8,927 $ --
======== ========
See Notes to Financial Statements
F-2
WEBFOLIO INC.
(A Development Stage Company)
Statements of Operations
--------------------------------------------------------------------------------
Cumulative from
Period from May 16, 2011
May 16, 2011 (inception)
Year Ended (inception) to through
May 31, 2012 May 31, 2011 May 31, 2012
------------ ------------ ------------
REVENUES
Revenues $ -- $ -- $ --
---------- ---------- ----------
TOTAL REVENUES -- -- --
OPERATING COSTS
Administrative expenses 594 -- 594
Taxes and licences 405 163 568
---------- ---------- ----------
TOTAL OPERATING COSTS 999 163 1,162
---------- ---------- ----------
NET INCOME (LOSS) $ (999) $ (163) $ (1,162)
========== ========== ==========
BASIC EARNINGS PER SHARE $ (0.00) $ (0.00) $ (0.00)
========== ========== ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 5,000,000 5,000,000 $5,000,000
========== ========== ==========
See Notes to Financial Statements
F-3
WEBFOLIO INC.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
From May 16, 2011 (inception) through May 31, 2012
--------------------------------------------------------------------------------
Deficit
Accumulated
Common Additional During
Common Stock Paid-in Development
Stock Amount Capital Stage Total
----- ------ ------- ----- -----
Balance May 16, 2011 (Inception) -- $ -- $ -- $ -- $ --
Net Loss, May 31, 2011 (163) (163)
---------- ------- -------- -------- --------
BALANCE, MAY 31, 2011 -- -- -- (163) (163)
Stock issued for cash on
December 1, 2011 @ $.002
per share 5,000,000 500 9,500 10,000
Net Loss, May 31, 2012 (999) (999)
---------- ------- -------- -------- --------
BALANCE, MAY 31, 2012 5,000,000 $ 500 $ 9,500 $ (1,162) $ 8,838
========== ======= ======== ======== ========
See Notes to Financial Statements
F-4
WEBFOLIO INC.
(A Development Stage Company)
Statements of Cash Flow
--------------------------------------------------------------------------------
Cumulative from
Period from May 16, 2011
May 16, 2011 (inception)
Year Ended (inception) to through
May 31, 2012 May 31, 2011 May 31, 2012
------------ ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (999) $ (163) $ (1,162)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Increase in other current asset (11) -- (11)
Changes in operating assets and liabilities:
Increase (decrease) in accrued expenses -- -- --
-------- -------- --------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (1,010) (163) (1,173)
CASH FLOWS FROM INVESTING ACTIVITIES
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES -- -- --
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in officer advances (74) 163 89
Issuance of common stock 500 -- 500
Additional paid-in capital 9,500 -- 9,500
-------- -------- --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 9,926 163 10,089
-------- -------- --------
NET INCREASE (DECREASE) IN CASH 8,916 -- 8,916
CASH AT BEGINNING OF PERIOD -- -- --
-------- -------- --------
CASH AT END OF PERIOD $ 8,916 $ -- $ 8,916
======== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during year for:
Interest $ -- $ -- $ --
======== ======== ========
Income Taxes $ -- $ -- $ --
======== ======== ========
See Notes to Financial Statements
F-5
WEBFOLIO INC.
(A Development Stage Company)
Notes to Financial Statements
May 31, 2012 and 2011
--------------------------------------------------------------------------------
1. NATURE OF OPERATIONS
WEBFOLIO INC. ("The Company") was incorporated in the State of Delaware on May
16, 2011 to engage in the creation and development of an online service
primarily to help real estate investors more effectively manage their properties
and potential buyers. The Company is in the development stage with no revenues
and a limited operating history.
GOING CONCERN CONSIDERATION
These financial statements have been prepared assuming that the Company will
continue as a going concern, which contemplates, among other things, the
realization of assets and the satisfaction of liabilities in the normal course
of business. The Company has incurred cumulative net losses of $1,162 since its
inception and requires capital for its contemplated operation and marketing
activities to take place. The Company's ability to raise additional capital
through the future issuances of common stock is unknown. The obtainment of
additional financing, the successful development of the Company's contemplated
plan of operations, and its transition, ultimately, to the attainment of
profitable operations are necessary for the Company to continue operations. The
ability to successfully resolve these factors raise substantial doubt about the
Company's ability to continue as a going concern.
Future issuances of the Company's equity or debt securities will be required in
order for the Company to continue to finance its operations and continue as a
going concern. The Company's present revenues are insufficient to meet operating
expenses. The Company has filed a Registration Statement with the Securities and
Exchange Commission in an effort to sell 5,000,000 shares of common stock for
proceeds of $50,000. Other than the shares to be offered under the Registration
Statement, no other source of capital has been identified or sought. If the
Company experiences a shortfall in operating capital prior to funding from the
proceeds of the offering, the Company's director has verbally agreed to advance
the Company funds to complete the registration process. Management estimates
that the Company can operate in the current limited operations scenario for
approximately 4-6 months with the cash currently available to the Company.
The financial statements do not include any adjustments that may result from the
outcome of these aforementioned uncertainties.
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. The Company's year -end is May 31.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with original maturity of
three months or less to be cash equivalents.
USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with generally accepted
accounting principles requires that management makes 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.
F-6
FOREIGN CURRENCY TRANSLATION
The financial statements are presented in United States dollars. In accordance
with ASC 830, "Foreign Currency Matters", foreign denominated monetary assets
and liabilities are translated into their United States dollar equivalents using
foreign exchange rates which prevailed at the balance sheet date. Revenue and
expenses are translated at average rates of exchange during the year. Gains or
losses resulting from foreign currency transactions are included in results of
operations.
DEVELOPMENT STAGE COMPANY
The Company complies with Financial Accounting Standards Codification ("ASC")
915 and Securities and Exchange Commission Act Guide 7 for its characterization
of the Company as development stage enterprise.
FINANCIAL INSTRUMENT
Fair value measurements are determined based on the assumptions that market
participants would use in pricing an asset or liability. ASC 820-10 establishes
a hierarchy for inputs used in measuring fair value that maximizes the use of
observable inputs and minimizes the use of unobservable inputs by requiring that
the most observable inputs be used when available. FASB ASC 820 establishes a
fair value hierarchy that prioritizes the use of inputs used in valuation
methodologies into the following three levels:
Level 1: Quoted prices (unadjusted) for identical assets or liabilities in
active markets. A quoted price in an active market provides the most
reliable evidence of fair value and must be used to measure fair value
whenever available.
Level 2: Significant other observable inputs other than Level 1 prices such
as quoted prices for similar assets or liabilities; quoted prices in
markets that are not active; or other inputs that are observable or can be
corroborated by observable market data.
Level 3: Significant unobservable inputs that reflect a reporting entity's
own assumptions about the assumptions that market participants would use in
pricing an asset or liability. For example, level 3 inputs would relate to
forecasts of future earnings and cash flows used in a discounted future
cash flows method.
The recorded amounts of financial instruments, including cash equivalents and
accounts payable, approximate their market values as of May 31, 2012 and 2011.
INCOME TAXES
The Company follows the accrual 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 the 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 May 31, 2012, a full deferred tax asset valuation allowance
has been provided and no deferred tax asset has been recorded.
BASIC AND DILUTED NET INCOME (LOSS) PER SHARE
The Company computes net income (loss) per share in accordance with ASC 260,
"Earnings per Share" which requires presentation of both basic and diluted
earnings per share (EPS) on the face of the income statement. Basic EPS is
computed by dividing net income (loss) available to common shareholders
(numerator) by the weighted average number of common shares outstanding
(denominator) during the period. Diluted EPS gives effect to all dilutive
potential common shares outstanding during the period including stock options,
using the treasury stock method, and convertible preferred stock, using the
if-converted method. In computing diluted EPS, the average stock price for the
period is used in determining the number of shares assumed to be purchased from
the exercise of stock options or warrants. Diluted EPS excludes all dilutive
potential common shares if their effect is anti-dilutive.
RECENT ACCOUNTING PRONOUNCEMENTS
In February 2010, the FASB issued ASU No. 2010-09, which is included in the
Codification under ASC 855, SUBSEQUENT EVENTS ("ASC 855"). This update removes
the requirement for an SEC filer to disclose the date through which subsequent
events have been evaluated and become effective for interim and annual reporting
periods beginning January 1, 2010. The adoption of this guidance did not have a
material impact on the Company's financial statements.
F-7
In January 2010, the FASB issued ASU No. 2010-06, which is included in the
Codification under ASC 820, FAIR VALUE MEASUREMENTS AND DISCLOSURES ("ASC 820").
This update requires the disclosure of transfers between the observable input
categories and activity in the unobservable input category for fair value
measurements. The guidance also requires disclosures about the inputs and
valuation techniques used to measure fair value and become effective for interim
and annual reporting periods beginning January 1, 2010. The adoption of this
guidance did not have a material impact on the Company's financial statements.
The Company does not expect the adoption of recently issued accounting
pronouncements to have any significant impact on the Company's results of
operations, financial position or cash flow.As new accounting pronouncements are
issued, the Company will adopt those that are applicable under the
circumstances.
3. RELATED PARTY TRANSACTIONS
The President of the Company provides management and office premises to the
Company for no compensation.
4. COMMON SHARES
In December , 2011, the Company authorized the issue of 5,000,000 common shares
of the company at par value of $.002 to Robin Thompson, Director and President,
for net cash proceeds of $10,000.
At May 31, 2012 there are total of 5,000,000 common shares of the Company issued
and outstanding.
5. INCOME TAXES
The Company follows ASC 740. Deferred income taxes reflect the net effect of (a)
temporary difference between carrying amounts of assets and liabilities for
financial purposes and the amounts used for income tax reporting purposes, and
(b) net operating loss carry-forwards. No net provision for refundable Federal
income tax has been made in the accompanying statement of loss because no
recoverable taxes were paid previously. Similarly, no deferred tax asset
attributable to the net operating loss carry-forward has been recognized, as it
is not deemed likely to be realized.
The cumulative tax effect at the expected rate of 34% of significant items
comprising our net deferred tax amount is as follows:
May 31, 2012 May 31, 2011
------------ ------------
Deferred tax attributed:
Net operating loss carryover $ (1,162) $ (163)
Less change in valuation allowance (1,162) (163)
-------- --------
Net deferred tax asset $ 0 $ 0
======== ========
At May 31, 2012, the Company had an unused net operating loss carry-forward
approximating $1,162 that is available to offset future taxable income; the loss
carry-forward will start to expire in 2030.
6. SUBSEQUENT EVENTS
In accordance with ASC 855, SUBSEQUENT EVENTS, the Company has evaluated
subsequent events through July 11, 2012, the date of available issuance of these
audited financial statements. During this period, the Company did not have any
material recognizable subsequent events.
F-8
Stan J.H. Lee, CPA
2160 North Central Rd. Suite 209* Fort Lee * NJ 07024
P.O. Box 436402 * San Diego * CA 92143
619-623-7799 * Fax 619-564-3408 * E-mail) stan2u@gmail.com
--------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and management of Webfolio Inc.
We have reviewed the accompanying consolidated balance sheet of Webfolio Inc. as
of November 30, 2012, and the related statements of operations, changes in
stockholders' equity and cash flows for the six- months then ended. These
financial statements are the representation of the management .
We conducted our review in accordance with the standards of the Public Company
Accounting Oversight Board (United States). A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with the standards of the Public Company Accounting Oversight Board (United
States) , the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying consolidated financial statements for them to be in
conformity with accounting principles generally accepted in the United States of
America.
/s/ Stan J.H. Lee, CPA
--------------------------------
Stan J.H. Lee, CPA
December 6, 2012
Fort Lee, NJ 07024
F-9
WEBFOLIO INC.
(A Development Stage Company)
Balance Sheets
--------------------------------------------------------------------------------
November 30, May 31,
2012 2012
-------- --------
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS
Cash $ 5,055 $ 8,916
Other current assets -- 11
-------- --------
TOTAL CURRENT ASSETS 5,055 8,927
-------- --------
TOTAL ASSETS $ 5,055 $ 8,927
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Officer advances $ 89 $ 89
-------- --------
TOTAL CURRENT LIABILITIES 89 89
-------- --------
TOTAL LIABILITIES 89 89
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, ($0.0001 par value, 130,000,000 shares
authorized; 5,000,000 shares issued and outstanding
as of November 30, 2012 and May 31, 2012 500 500
Additional paid-in capital 9,500 9,500
Deficit accumulated during development stage (5,034) (1,162)
-------- --------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) 4,966 8,838
-------- --------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT) $ 5,055 $ 8,927
======== ========
See Notes to Financial Statements
F-10
WEBFOLIO INC.
(A Development Stage Company)
Statements of Operations
(Unaudited)
--------------------------------------------------------------------------------
Cumulative from
May 16, 2011
Six Months (inception)
Period Ended Year Ended through
November 30, May 31, November 30,
2012 2012 2012
---------- ---------- ----------
REVENUES
Revenues $ -- $ -- $ --
---------- ---------- ----------
TOTAL REVENUES -- -- --
OPERATING COSTS
Professional expenses 1,750 -- 1,750
Administrative expenses 2,112 594 2,879
Taxes and licences -- 568 405
---------- ---------- ----------
TOTAL OPERATING COSTS 3,862 1,162 5,034
---------- ---------- ----------
NET INCOME (LOSS) $ (3,862) $ (1,162) $ (5,034)
========== ========== ==========
BASIC EARNINGS PER SHARE $ (0.00) $ (0.00) $ (0)
========== ========== ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 5,000,000 5,000,000 5,000,000
========== ========== ==========
See Notes to Financial Statements
F-11
WEBFOLIO INC.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
From May 16, 2011 (inception) through November 30, 2012
--------------------------------------------------------------------------------
Deficit
Accumulated
Common Additional During
Common Stock Paid-in Development
Stock Amount Capital Stage Total
----- ------ ------- ----- -----
Balance May 16, 2011 (Inception) -- $ -- $ -- $ -- $ --
Net Loss, May 31, 2011 (11) (11)
--------- ------- -------- -------- --------
BALANCE, MAY 31, 2011 (AUDITED) -- -- -- (11) (11)
--------- ------- -------- -------- --------
Stock issued for cash
on December 1, 2011
@ $.002 per share 5,000,000 500 9,500 10,000
Net Loss, May 31, 2012 (1,162) (1,162)
--------- ------- -------- -------- --------
BALANCE, MAY 31, 2012 (AUDITED) 5,000,000 500 9,500 (1,173) 8,828
--------- ------- -------- -------- --------
Net Income (Loss), Six Months
Period Ended November 30, 2012 (3,862) (3,862)
--------- ------- -------- -------- --------
BALANCE, NOVEMBER 30, 2012 (UNAUDITED) 5,000,000 $ 500 $ 9,500 $ (5,034) $ 4,966
========= ======= ======== ======== ========
See Notes to Financial Statements
F-12
WEBFOLIO INC.
(A Development Stage Company)
Statements of Cash Flow
--------------------------------------------------------------------------------
Cumulative from
May 16, 2011
Six Months (inception)
Period Ended Year Ended through
November 30, May 31, November 30,
2012 2012 2012
-------- -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (3,862) $ (1,162) $ (5,034)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Changes in operating assets and liabilities:
Increase in other current asset -- (12) --
Increase (decrease) in officer advances -- 89 89
-------- -------- --------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (3,862) (1,085) (4,945)
CASH FLOWS FROM INVESTING ACTIVITIES
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES -- -- --
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock -- 500 500
Additional paid-in capital -- 9,500 9,500
-------- -------- --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES -- 10,000 10,000
-------- -------- --------
NET INCREASE (DECREASE) IN CASH (3,862) 8,916 5,055
CASH AT BEGINNING OF PERIOD 8,916 -- --
-------- -------- --------
CASH AT END OF PERIOD $ 5,055 $ 8,916 $ 5,055
======== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during year for:
Interest $ -- $ -- $ --
======== ======== ========
Income Taxes $ -- $ -- $ --
======== ======== ========
See Notes to Financial Statements
F-13
WEBFOLIO INC.
Notes to Financial Statements (Unaudited)
(A Development Stage Company)
November 30,2012
--------------------------------------------------------------------------------
1. NATURE OF OPERATIONS
WEBFOLIO INC. ("The Company") was incorporated in the State of Delaware on May
16, 2011 to engage in the creation and development of an online service
primarily to help real estate investors more effectively manage their properties
and potential buyers. The Company is in the development stage with no revenues
and a limited operating history.
GOING CONCERN CONSIDERATION
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 anticipates future losses 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, loans from
directors and/or issuance of common shares.
Future issuances of the Company's equity or debt securities will be required in
order for the Company to continue to finance its operations and continue as a
going concern. The Company's present revenues are insufficient to meet operating
expenses. The Company has filed a Registration Statement with the Securities and
Exchange Commission in an effort to sell 5,000,000 shares of common stock for
proceeds of $50,000. Other than the shares to be offered under the Registration
Statement, no other source of capital has been identified or sought. If the
Company experiences a shortfall in operating capital prior to funding from the
proceeds of the offering, the Company's director has verbally agreed to advance
the Company funds to complete the registration process. Management estimates
that the Company can operate in the current limited operations scenario for
approximately 4-6 months with the cash currently available to the Company.
The financial statements do not include any adjustments that might be necessary
if the Company is unable to continue as a going concern.
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. The Company's year-end is May 31.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with original maturity of
three months or less to be cash equivalents.
USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with generally accepted
accounting principles requires that management makes 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.
F-14
WEBFOLIO INC.
Notes to Financial Statements (Unaudited)
(A Development Stage Company)
November 30,2012
--------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION
The financial statements are presented in United States dollars. In accordance
with ASC 830, "Foreign Currency Matters", foreign denominated monetary assets
and liabilities are translated into their United States dollar equivalents using
foreign exchange rates which prevailed at the balance sheet date. Revenue and
expenses are translated at average rates of exchange during the year. Gains or
losses resulting from foreign currency transactions are included in results of
operations.
DEVELOPMENT STAGE COMPANY
The Company complies with Financial Accounting Standards Codification ("ASC")
915 and Securities and Exchange Commission Act Guide 7 for its characterization
of the Company as development stage enterprise.
FINANCIAL INSTRUMENT
Fair value measurements are determined based on the assumptions that market
participants would use in pricing an asset or liability. ASC 820-10 establishes
a hierarchy for inputs used in measuring fair value that maximizes the use of
observable inputs and minimizes the use of unobservable inputs by requiring that
the most observable inputs be used when available. FASB ASC 820 establishes a
fair value hierarchy that prioritizes the use of inputs used in valuation
methodologies into the following three levels:
Level 1: Quoted prices (unadjusted) for identical assets or liabilities in
active markets. A quoted price in an active market provides the most
reliable evidence of fair value and must be used to measure fair value
whenever available.
Level 2: Significant other observable inputs other than Level 1 prices such
as quoted prices for similar assets or liabilities; quoted prices in
markets that are not active; or other inputs that are observable or can be
corroborated by observable market data.
Level 3: Significant unobservable inputs that reflect a reporting entity's
own assumptions about the assumptions that market participants would use in
pricing an asset or liability. For example, level 3 inputs would relate to
forecasts of future earnings and cash flows used in a discounted future
cash flows method.
The recorded amounts of financial instruments, including cash equivalents and
accounts payable, approximate their market values as of November 30, 2012.
INCOME TAXES
The Company follows the accrual 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 the 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 November 30, 2012, a full deferred tax asset valuation
allowance has been provided and no deferred tax asset has been recorded.
BASIC AND DILUTED NET INCOME (LOSS) PER SHARE
The Company computes net income (loss) per share in accordance with ASC 260,
"Earnings per Share" which requires presentation of both basic and diluted
earnings per share (EPS) on the face of the income statement. Basic EPS is
computed by dividing net income (loss) available to common shareholders
(numerator) by the weighted average number of common shares outstanding
(denominator) during the period. Diluted EPS gives effect to all dilutive
F-15
WEBFOLIO INC.
Notes to Financial Statements (Unaudited)
(A Development Stage Company)
November 30,2012
--------------------------------------------------------------------------------
potential common shares outstanding during the period including stock options,
using the treasury stock method, and convertible preferred stock, using the
if-converted method. In computing diluted EPS, the average stock price for the
period is used in determining the number of shares assumed to be purchased from
the exercise of stock options or warrants. Diluted EPS excludes all dilutive
potential common shares if their effect is anti-dilutive.
RECENT ACCOUNTING PRONOUNCEMENTS
In February 2010, the FASB issued ASU No. 2010-09, which is included in the
Codification under ASC 855, SUBSEQUENT EVENTS ("ASC 855"). This update removes
the requirement for an SEC filer to disclose the date through which subsequent
events have been evaluated and become effective for interim and annual reporting
periods beginning January 1, 2010. The adoption of this guidance did not have a
material impact on the Company's financial statements.
In January 2010, the FASB issued ASU No. 2010-06, which is included in the
Codification under ASC 820, FAIR VALUE MEASUREMENTS AND DISCLOSURES ("ASC 820").
This update requires the disclosure of transfers between the observable input
categories and activity in the unobservable input category for fair value
measurements. The guidance also requires disclosures about the inputs and
valuation techniques used to measure fair value and become effective for interim
and annual reporting periods beginning January 1, 2010. The adoption of this
guidance did not have a material impact on the Company's financial statements.
The Company does not expect the adoption of recently issued accounting
pronouncements to have any significant impact on the Company's results of
operations, financial position or cash flow.As new accounting pronouncements are
issued, the Company will adopt those that are applicable under the
circumstances.
3. RELATED PARTY TRANSACTIONS
The President of the Company provides management and office premises to the
Company for no compensation.
4. COMMON SHARES
In December, 2011, the Company authorized the issue of 5,000,000 common shares
of the company at par value of $.002 per share to Robin Thompson, Director and
President, for net cash proceeds of $10,000.
At November 30, 2012, there are total of 5,000,000 common shares of the Company
issued and outstanding.
5. INCOME TAXES
The Company follows ASC 740. Deferred income taxes reflect the net effect of (a)
temporary difference between carrying amounts of assets and liabilities for
financial purposes and the amounts used for income tax reporting purposes, and
(b) net operating loss carry-forwards. No net provision for refundable Federal
income tax has been made in the accompanying statement of loss because no
recoverable taxes were paid previously. Similarly, no deferred tax asset
attributable to the net operating loss carry-forward has been recognized, as it
is not deemed likely to be realized.
F-16
WEBFOLIO INC.
Notes to Financial Statements (Unaudited)
(A Development Stage Company)
November 30,2012
--------------------------------------------------------------------------------
The cumulative tax effect at the expected rate of 34% of significant items
comprising our net deferred tax amount is as follows:
November 30, May 31,
2012 2012
-------- --------
Deferred tax attributed:
Net operating loss carryover $ (1,762) $ (1,162)
Less: change in valuation allowance (1,762) (1,162)
-------- --------
Net deferred tax asset $ 0 $ 0
======== ========
At November 30, 2012, the Company had an unused net operating loss carry-forward
approximating $1,762 that is available to offset future taxable income; the loss
carry-forward will start to expire in 2030.
6. SUBSEQUENT EVENTS
In accordance with ASC 855, SUBSEQUENT EVENTS, the Company has evaluated
subsequent events through the date of available issuance of these unaudited
financial statements. During this period, the Company did not have any material
recognizable subsequent events.
F-17
DEALER PROSPECTUS DELIVERY OBLIGATION
"UNTIL ______________ (90 DAYS AFTER THE EFFECTIVE DATE OF THIS PROSPECTUS), ALL
DEALERS THAT EFFECT TRANSACTIONS IN THESE SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS
IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS."
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 $ 6
Legal and Professional Fees $ 250
Accounting and auditing $ 2,250
EDGAR Fees $ 1,500
--------
TOTAL $ 4,006
========
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Articles and By-Laws of Webfolio Inc. have no specific provisions to allow
for the indemnification of the officer and director in regard to his carrying
out the duties of his offices. Indemnification of directors and officers is as
provided by the General Corporate Law of the State of Delaware. We have been
advised that in the opinion of the Securities and Exchange Commission
indemnification for liabilities arising under the Securities Act 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 is asserted by our director, officer, or other controlling person in
connection with the securities registered, we will, unless in the opinion of our
legal counsel the matter has been settled by controlling precedent, submit the
question of whether such indemnification is against public policy to a court of
appropriate jurisdiction. We will then be governed by the court's decision.
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 December 1, 2011 the Company issued a total of 5,000,000 shares of common
stock to Mr. Thompson for cash at $0.002 per share for a total of $10,000.
These securities were issued in reliance upon an exemption provided by
Regulation S promulgated under the Securities Act of 1933. The certificate for
these securities was issued to a non-US resident and bears a restrictive legend.
Exhibit
Number Description
------ -----------
3.1 Articles of Incorporation (filed previously)
3.2 Bylaws (filed previously)
5.1 Opinion of Kevin M. Murphy, Attorney at Law (filed previously)
10.1 Form of Subscription Agreement (filed previously)
23.1 Consent of Stan J. H. Lee, CPA for use of his report
23.2 Consent of Kevin M. Murphy (See Exhibit 5.1)
II-1
ITEM 17. UNDERTAKINGS.
a. The undersigned registrant hereby undertakes: b.
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
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
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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;
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.
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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 Calgary, AB
on February 5, 2013.
Webfolio Inc., Registrant
By: /s/ Robin Thompson
-------------------------------------
Robin Thompson, President, Secretary,
Chief Executive Officer, Chief
Financial Officer and 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/ Robin Thompson Chief Executive Officer February 5, 2013
------------------------ ----------------------- ----------------
Robin Thompson Title Date
/s/ Robin Thompson Chief Financial Officer February 5, 2013
------------------------ ----------------------- ----------------
Robin Thompson Title Date
/s/ Robin Thompson Principal Accounting Officer February 5, 2013
------------------------ ---------------------------- ----------------
Robin Thompson Title Date
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