Lithium Corp - Annual Report: 2008 (Form 10-K)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
| (Mark One) | |
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x
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ANNUAL REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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| For the fiscal year ended December 31, 2008 | |
| r | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the
transition period from_________to ___________
Commission
file number 333-148266
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UTALK
COMMUNICATIONS INC.
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(Name
of small business issuer in its
charter)
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Nevada
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98-0530295
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(State
or other jurisdiction of incorporation or organization)
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(I.R.S.
Employer Identification No.)
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9121
Atlanta Ave #314
Huntington
Beach, CA
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92646
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(Address
of principal executive offices)
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(Zip
Code)
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Issuer's telephone number (714) 475-3512
Securities
registered under Section 12(b) of the Exchange Act:
None.
Securities
registered under Section 12(g) of the Exchange Act:
Common
Stock, $0.001 par value per share
(Title of
Class)
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes r No x
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Act: Yes r No x
Indicate
by check mark whether the registrant(1) has filed all reports required by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 day. Yes x No r
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulations S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. r
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 if the Exchange Act.
Large
Accelerated filer r
Accelerated filer r
Non-accelerated
filer r
Smaller reporting company x
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act). Yes r No x
State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked price of such common equity, as of December
31, 2008: There no bids or ask.
State
issuer’s revenues for its most recent fiscal year. $NIL
State the
number of shares outstanding of each of the issuer’s classes of equity stock, as
of the latest practicable date.
4,470,000 shares of common
stock issued and outstanding as of March 31, 2009.
Table of
Contents
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Part
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PART
I
Item 1. Description of Business.
This
annual report contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. These statements relate to future events or
our future financial performance. In some cases, you can identify
forward-looking statements by terminology such as “may”, “will”, “should”,
“expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”,
“potential” or “continue” or the negative of these terms or other comparable
terminology. These statements are only predictions and may involve known and
unknown risks, uncertainties and other factors, including the risks in the
section entitled “Risk Factors”, that may cause our or our industry’s actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking
statements.
Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.
Our
financial statements are stated in United States dollars and are prepared in
accordance with generally accepted accounting principles in the United States of
America.
In this
annual report, unless otherwise specified, all dollar amounts are expressed in
United States dollars.
As used
in this annual report, the terms “we”, “us”, “our”, and “Utalk” means Utalk
Communications, Inc. unless otherwise indicated.
Business
Development
We were
incorporated in the State of Nevada on January 30, 2007 and have limited
history.
The
address of our principal executive office is 9121 Atlanta Ave #314,
Huntington Beach, CA 92646. Our telephone number is 714-475-3512.
Our
Current Business
We were
incorporated in the State of Nevada on January 30, 2007, and are a development
stage company. From our inception to date, we have not generated any
revenues, and our operations have been limited to organizational, start-up, and
capital formation activities. We currently have no employees other
than our sole officer, who is also our sole director.
We intend
to engage in the development and marketing of call-back services using a
call-back platform. Generally, our anticipated call-back service will enable a
customer to call a designated telephone number and disconnect. The system will
automatically identify the caller as a customer, call the user back and provide
the customer with a dial-tone to place an outbound call. In doing so, our
service will enable our customers to realize cost savings when there is a
substantial differential between the cost of placing and receiving
calls.
As an
example of how our call-back services may be utilized, some cellular providers
allow their customers to receive many minutes for free (some offer unlimited
free incoming minutes) but allow only a limited number of outgoing minutes for
free and charge a substantial amount for minutes exceeding the number of free
minutes. If such customer also subscribes to our service, they will be able to
initiate a call from our system to their phone which will appear as an incoming
call rather than an outbound one, potentially providing the customer with cost
savings.
A sample
call flow would occur as follows: A customer dials a telephone number that is
owned by us which automatically forwards the call to our call-back switch. The
customer hangs up after three rings. Our system does not answer the call (so
that the customer is not charged for a call by their phone company) but rather
detects the customer’s phone number. The system automatically checks our
customer database and identifies whether the phone number belongs to a customer.
If the answer is no, then the system takes no action. If the caller is a
customer and has sufficient funds on balance with us, our system will place a
call to the customer (we intend that such call will be through a Voice over IP
company) and prompts the customer to enter the number they would like to call.
The customer enters the destination number and our system will send the call to
the VoIP carrier’s network. Our system will then track the duration and cost of
the call and deduct the appropriate funds from the customer account. If the
balance reaches zero, customers will receive a voice prompt notifying them that
their funds are running low and the call will be terminated.
The
callback system is a software program that resides on a computer server that is
connected to the public Internet. It will be connected with a VoIP provider
across the Internet (if our system is not located in the same facility as the
VoIP service provider) or directly to their equipment (if we are located in the
same facility). The VoIP company will provide us with phone numbers that
customers can call to initiate a call back. They will also provide us with the
ability to place calls in North America and internationally.
The
callback system will also have a database of all of our customers and their
particular information such as name, email, address, phone numbers, account
balance and call history. The system will also have telephony software that is
able to receive calls, initiate calls, play prompts (messages) and connect to
outside parties during a call.
We have
not yet developed our call-back system. As discussed below, our
initial focus will be to engage in the development of our call-back
system. This is described below in our “Products and Services”
section. Management intends to outsource the development of this product
offshore to reduce costs. However, the intellectual property rights
over our software will be retained by the Company. We except that this will be
completed within approximately eight months following the termination of this
offering, after which we intend to begin marketing our services. All our
services will be based on a pre-paid model where a customer must pre-pay for
services. We will be marketing our services primarily through a network of
regional resellers and distributors in Canada. We also plan to hire a
sales/support assistant in approximately eleven months from development of our
service to help our executive officer provide support to our end-users and
resellers.
We have
outsourced the development and deployment of our Call-back service to Netfone
Inc. We have paid Netfone Inc. USD $12,000 to perform these tasks. The delivery
of the product has been postponed from the fourth quarter of 2008 to the second
quarter of 2009. We may opt to use Netfone Inc. to host and maintain the service
on our behalf, we will pay them USD $200 per month.
We have
retained the services of Island Capital Management, LLC dba as Island Stock
Transfer to act as our transfer agent on April 25, 2008.
Industry
Background
There are
instances when a phone call placed in one direction is considerably cheaper than
a phone call placed in the opposite direction. For example, if a person in one
region places a call to someone in a different region, the cost may be several
times lower than if the call originated from the opposite location. This
difference provides an opportunity to offer what is referred to as a call-back
service. Call-back services have been used in the international long distance
market to bypass expensive long distance charges in certain countries (such as
the Philippines, Lebanon, United Arab Emirates, and numerous others). A more
recent development is the use of call-back services in conjunction with cellular
phone plans. This allow customers to take advantage of the proliferation of
unlimited incoming cellular plans in certain countries, such as Canada, and use
call-back systems to initiate free or low cost outgoing calls. We
plan to focus on the provision of call-back services for cellular phones. We
anticipate that our initial focus will be directed to the Canadian
market.
Call-back
services:
A
call-back system enables a user to call in a number and hang up. The system will
then call the person and provide him (or her) with a dial-tone to place a
call.
Some
cellular companies offer plans where the customer receives an unlimited or a
large quantity of incoming minutes for free, while only is able to make a
limited numbers of free outgoing minutes. After customers exhaust the free
outgoing minutes, they are charged a high rate per minute, depending on the
carrier and whether a call is placed locally or long distance in the USA and
Canada. A call-back system allows the customer to initiate a call-back from our
system. This makes it an incoming call for the customer and therefore,
free.
The
Market
Cellular
market:
The
cellular market is immensely large worldwide with 2.5 billion cellular
connections as of September 2006 (GSM Association and Ovum – a market research
company as quoted by IDG News Service on September 7, 2006). Cellular
connections do not represent the number of cellular users, since many
subscribers have more than one cellular connection. In addition, these figures
include prepaid accounts that may no longer be active. EtForcast, another market
research company, provides similar figures at just over 2 billion subscribers in
2005 (http://www.etforecasts.com/). EtForcast figures refer to cellular
subscribers rather than cellular connections.
It is
impossible to verify the number of subscriptions to specific plans as cellular
companies do not disclose this information and provide only total numbers of
subscribers. “Unlimited” (or a very large number of) incoming minute plans are
popular with plans being offered by nearly every major cellular service
provider. We intend to pursue the Canadian cellular market through a series of
regional distributors and resellers. We do not plan on allocating any resources
at this point to penetrate the U.S. market and will instead focus exclusively on
the Canadian market.
Our
Products and Services
Utalk’s Call-Back
Packages:
We
anticipate that our pricing packages will be either flat-fee, usage-based, or a
combination of the two:
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Flat-fee
packages: A user is charged a flat monthly fee for the service. We
anticipate offering several local and national
packages.
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Usage-based
package: A user is charged by the minute based upon a specified
rate.
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Hybrid
Packages: Hybrid packages combine the above two options. A customer may
have a local or national package which makes his calls to these areas
free. However, he is charged by the minute based upon a specified rate for
calls outside the free calling area of his
plan.
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All
packages will be pre-paid, meaning that a customer must pre-pay for all of the
services used on our web site. All payments will be converted received on our
web site by Paypal (our payment processor) into US funds at the prevailing rate
which will in turn be deposited in our US bank account.
Utalk’s Call-Back Platform
Development:
We have
reviewed available call-back solutions currently in the market in order to
determine how best to develop, deploy and offer our services. We decided that
the best option open to us, considering our limited resources, is to find a
low-cost vendor to provide us with a turn-key solution that meets our need. The
selection process for the vendor was led by our sole officer and director. This
led to the selection of Nefone inc to develop our product for the
company.
We have
outsourced the development and deployment of our Call-back service to Netfone
Inc. We have paid Netfone Inc. USD $12,000 to perform these tasks. We anticipate
the delivery of the product in the second quarter of 2009. We may opt to use
Netfone Inc. to host and maintain the service on our behalf, we will pay them
USD $200 per month.
Netfone Inc. has deployed a trial
system and provided us with a demonstration of the software and we agreed that
further enhancements were needed. Based upon the presentation they provided to
us, we are confident that they will be able to meet the above mentioned
timeline.
Utalk’s Call-Back Platform
Deployment:
The
production system will consist of a high-end server. We will also have a lower
end server to serve as a backup in case of failure in the primary
server.
The
system will be located in a data center. A data center is a facility used to
house mission critical computer systems and associated components. The data
center will include environmental controls (air conditioning, fire suppression,
etc.), redundant/backup power supplies, redundant data communications
connections and high security.
In order
for our system to be able to place and receive calls, it is necessary to connect
to phone service providers. We will avoid the larger carriers since they
generally impose large monthly fees and minimum revenue commitments. There are
many VoIP companies on the market that supply VoIP phone connectivity at a low
cost with low commitment levels. Some also provide space, for a fee, in which to
house our servers. This will allow us to directly connect to their equipment
which will increase reliability and quality of the calls and reduce the Internet
traffic cost. We have not entered into any agreements or contracts with any such
VoIP companies.
Our
selection of the VoIP company will depend on:
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Price
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Quality
of both national and international
connectivity
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Location
of the data center where the VoIP company is
located.
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Sales
and distribution
We
anticipate offering our services through distributors and resellers. We do not
currently have any agreements or contracts with any distributors or
resellers.
Resellers
We expect
to be able to support three levels of resellers. We refer to them as Levels I,
II and III resellers.
Level I
resellers are typically substantial organizations with strong distribution
networks (for example a calling card company or a company involved in the resale
of long distance services). Level I resellers can opt to have their own brand
name (in which case, they may set their own prices) or sell under one of Utalk’s
brand names. They will have the ability to add, suspend and manage Level II and
III resellers.
Level II
resellers typically recruit and manage multiple Level III resellers. They will
also have the ability to add, suspend and manage Level III
resellers.
Level III
resellers are the individuals, stores and web sites that sell directly to the
end user. They have the ability to create end user accounts as well as add
credit to them.
Exclusive Regional
Resellers
We may
grant Level I resellers regional exclusivity. In such a case, we will set
revenue targets for the reseller as a requirement to maintaining its
exclusivity. This target will depend on the market size of the territory. If the
reseller fails to meet the revenue target, we will retain the right to revoke
the exclusivity. The exclusive reseller will be responsible for recruiting other
resellers within the territory. The grant of exclusivity will be based on, in
addition to other factors, the following:
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Strength of organization in the region.
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Track record in this industry
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Commitment to spend advertising dollars
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The size of the region and its market potential.
The
territory of the exclusive reseller will depend on the size of the market and
the sale volume produced by said reseller.
We
believe our strategy of focusing on offering the Company’s services through
resellers rather than directly to the end user will allow us to capture a larger
market share at a significantly lower cost. If this strategy ultimately proves
to be successful, we will have ready access to the potentially large customer
bases serviced by resellers.
The
advantage for the reseller is immediate access to lucrative services without the
need to invest in building and maintaining such systems as well as continuously
updating their service offering. It will also enable them to focus on core
competencies and up-selling services to their customer base.
Revenue
model
Our
revenue will be earned from direct and wholesale sales. Direct sales will be
revenue from brands that we own. These brands are marketed to the end users
directly by Utalk or through a network of resellers. Wholesale sales are
revenues earned by enabling other service providers to utilize the Company’s
call-back services.
Direct
sales:
In this
case, the Company will collect revenue from the end users through credit card
payment using Paypal. When paying through Paypal, we will reserve a portion of
the money for the resellers and affiliates and keep the rest. Our system will
automatically calculate the revenue sharing between Utalk and the different
levels of resellers. Any such revenue sharing arrangement will be determined
based upon prevailing market conditions and will be re-evaluated on a regular
basis.
Wholesale:
In this
model, a Level I reseller will brand our solution under their name. They will
wholesale services at a rate agreed upon with the Company, and then resell them
at prices of their choosing. The wholesaler must pre-pay for services and their
clients will not be able to place calls if the wholesaler balance with us is
negative. The wholesaler is set as a reseller Level I in our system and will be
able to have two levels of resellers working for them in addition to
affiliates.
Marketing
strategy
We plan
on using “Cost per Click” (“CPC”) web based advertising to gain traffic to our
website. Under this program, we will design our own ads, target locations (ie.
countries or regions) and keywords. A “keyword” is another term for “search
term”. When someone is searching for information on the internet, they will
usually visit a search engine such as Yahoo or Google and type in some words
describing what they are looking for. The search engine then returns results
based upon the words submitted. Search engines such as Google have their own CPC
advertising programs. We will be focusing on Google (Adwords) for primary
campaigns. Google is the most popular search engine and we believe it will
provide us with the greatest potential amount of traffic exposure.
With CPC
advertising, we only pay for actual clicks on the ad, which will then be
directed through to our website. CPC-based advertising allows businesses to pay
only for the leads they receive. According to www.businessnation.com, over 80%
of people start their search through a search engine when they need to find
specific information online. In addition, businessnation.com reports that
consumers are 5 times more likely to purchase from search listings, 7 times more
likely to view search listings and 20 times more likely to click on search
listings, when compared to banner.
We
believe this is the most cost effective and targeted audience advertising we can
obtain with our limited resources. This method will enable us to control our
advertising costs with respect to our target market through control over the
search terms, titles and description for each listing. Furthermore, we can
control the amount to pay for each listing and the maximum amount we wish to
spend on a daily basis. It also allows us to pause or alter the advertising. The
keywords will focus on search results, which we believe will be most related to
our product.
We also
plan on selling our product through an Affiliate Marketing Program (“APM”). An
APM is a form of profit sharing program that is widely accepted and utilized in
internet commerce. We will implement our website based APM program, which will
effectively track and account for affiliate activity. Under the APM, we pay
other website owners commission for referring customers who make a
purchase. Participating website owners provide links, such as
banners, to our products on their own websites. We are planning to
payout commissions of 10-20% of the product purchase price as an incentive to
sell our products for each referred customer who uses or services.
Our APM
management tools will also be available to our resellers who may choose to
develop their own APM program. Our advertising will be largely targeted to
recruiting resellers and service providers to adopt and resell our
service.
In
addition to Google advertising, we intend to advertise on websites such as
Linkshare.com, Commissiongroup.com, Affiliateprograms.com, and in periodicals
such as Revenue Today magazine (www.revenuetoday.com) - all of which are
targeted to affiliate marketing prospects and products. Affiliates will signup
directly on our website, or through one of the affiliate marketing sites listed
above. We believe the benefits of affiliate marketing far outweigh the
commission costs, given our current position as a startup with no revenue.
Affiliate marketers provide increased exposure to our product, incur the cost of
generating traffic and save us the cost of hiring a sales and marketing force,
until we have the resources to do so.
Our
business model anticipates the creation of a network of established multi-level
reseller partners in our target market areas to reach our potential end
users. We believe we offer reseller partners certain advantages,
including:
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Fast
Time to Market - By taking advantage of our existing infrastructure and
software solution, a distributor's service can be up and running within
days.
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Operational
Freedom - By outsourcing application management to us, resellers can focus
on critical resources, revenue generation and business development
functions.
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Customization
- Our resellers are able to customize our solution to suit the needs of
their end user client base.
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24/7
Access - Resellers or end users have access to applications via the
Internet on a 24/7 basis.
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Private
Label Solution - Our branded solutions offer distributors and agents the
ability to build their own branded services in their territory. Our
services are designed to be privately labeled and can be customized to
meet the reseller's "look and feel" in addition to business
processes.
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Branding:
Utalk
expects to introduce multiple service brands into the market with different
price points. While this may dilute the value of the Utalk brand, it is a common
practice by calling-cards companies. It may be necessary to create a specific
brand for a marketing agency who wants to be exclusively marketing this
brand.
Intellectual
Property
We do not
have any patents or patent-pending applications. We currently have no
plans to seek patent protection, although we do not exclude that this may become
a possibility in the future. We will maintain ownership of the software
developed and do not intend to release the source code to anyone. Resellers will
have rights to use the software to sell our services but will not own the
software or have any ownership rights to it. They will also not be allowed to
modify the software in any fashion.
Competition
While
there are many companies that focus on the international market for call-back
services, we intend to focus solely on the delivery of call-back services in
Canada. We are aware of only three companies that are focused on cellular phone
subscribers in Canada. Notwithstanding, other such companies may in fact exist
and it is very likely that they do. One company which we are aware of is
Globalive Communications Corp. (http://www.globalive.com), a private company
based in Toronto, Canada and offer services through Yak Communications (Canada)
Corp. (http://www.yak.com/). Its call-back product is named YakCallback.
However, they charge by the minute and do not offer flat fee monthly rates.
Another such company is IMC Telecom (http://www.imctelecom.com/) which offers
service in cities in Canada such as Montreal, Ottawa, Toronto, Calgary and
Vancouver. The third company, a private company based in Vancouver, Canada, is
Packetera Communications Inc. which is in the beta stage of their call-back
service. Packetera advertises its service under the “itokk” brand name
(http://www.itokk.com/).
We
believe that we have the following competitive advantages:
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We
expect to enable other service providers to deliver the same service over
our platform but with that service provider’s own
branding
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We
will be one of the first companies to focus on the Canadian cellular
market We are currently aware of two competitors on the market. The first
is Yak.com and they charge over 3.5 cents per minute. We expect to match
this rate for usage based plans but will also offer flat monthly plans
($10 for local calling, $15 for national calling and $20 for free calling
in Canada and USA). The other competitor, Evoiphone charges $10 for
unlimited calling, but limits its service to a few
markets.
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We
will have reduced operational costs since we anticipate that such costs
can be spread over multiple resellers and other service
providers.
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Our
resellers and service providers will be able to focus on marketing and
sales, without the need to expend resources on support and operational
issues.
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Government
Regulation
The
telecommunications sector in Canada is regulated by the Canadian
Radio-television and Telecommunications Commission (CRTC). However, we are not
aware of any ruling, prohibition, or restriction on the use of callback services
in Canada.
Privacy
Regulations
Since we
will be collecting confidential information about our customers including
personal information (name, address, and telephone numbers), payment information
(credit card, bank details, etc.) and phone calling history, we will be enacting
measures to ensure the privacy of the customer data. Such measures will include
strong encryption of the data and strong access control to the data where only
authorized persons are able to do so. We do not intend to share our customer
data with anyone except if mandated by a government regulation (e.g., Patriot
Act).
As of
2006, Canadian business and private sector organizations are subject to federal
or provincial privacy protection legislation governing both customer and, with
some exceptions, employee information.
Effective
as of January 1, 2001, the Canadian federal government enacted the Personal
Information Protection and Electronic Documents Act (PIPEDA). PIPEDA applies to
federally-regulated private sector organizations (i.e., organizations in the
transportation, communications, broadcasting, federal banking and offshore
sectors, as well as in Canada’s three territories), and to other private sector
organizations in provinces that have not enacted “substantially similar”
legislation. It applies to personal information and health information that is
collected, used or disclosed in the course of commercial activity that takes
place across the Canadian border, between provinces, and within a Canadian
province that has not enacted “substantially similar” legislation.
To date,
Alberta and British Columbia have joined Québec in enacting their own private
sector privacy legislation. Each of the Québec, British
Columbia and Alberta statutes has been recognized as “substantially similar” by
the Canadian federal government.
(http://www.osler.com/resources.aspx?id=8686).
Employees
We have
no employees other than our sole officer and director, Mazen
Hleiss. As such, Mr. Hleiss has been responsible for all business
planning, and operational duties, and will continue to perform these duties
throughout the early stages of our growth. During this time, Mr. Hleiss will
supervise the development and deployment of our software. However, much of the
software development will be outsourced to a private contractor. Mazen will
spend a minimum of 20 hours per week on the business of the
Company.
We
anticipate that within the next eleventh months after the development of our
product, we will need to hire a sales and support assistant who will be
responsible for answering customer and reseller inquiries and providing basic
support.
Research
and Development
We have
outsourced the development and deployment of our Call-back service to Netfone
Inc. We have paid Netfone Inc. USD $12,000 to perform these tasks. The delivery
of the product has been postponed from the fourth quarter of 2008 to the second
quarter of 2009.
RISK
FACTORS
Much of
the information included in this quarterly report includes or is based upon
estimates, projections or other “forward-looking statements.” Such
forward-looking statements include any projections or estimates made by us and
our management in connection with our business operations. While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect our current judgment regarding the direction of
our business, actual results will almost always vary, sometimes materially, from
any estimates, predictions, projections, assumptions, or other future
performance suggested herein. We undertake no obligation to update
forward-looking statements to reflect events or circumstances occurring after
the date of such statements.
Such
estimates, projections or other “forward-looking statements” involve various
risks and uncertainties as outlined below. We caution readers of this quarterly
report that important factors in some cases have affected and, in the future,
could materially affect actual results and cause actual results to differ
materially from the results expressed in any such estimates, projections or
other “forward-looking statements”. In evaluating us, our business and any
investment in our business, readers should carefully consider the following
factors.
Risks
Associated With Our Business
We
are a development stage company and may never be able to effectuate our business
plan or achieve any revenues or profitability; at this stage of our business,
even with our good faith efforts, potential investors have a high probability of
losing their entire investment.
We were
established on January 30, 2007 and have no operating history. We are
in the development stage and are subject to all of the risks inherent in the
establishment of a new business enterprise. We have had no revenue to
date. Our operations to date have been focused on organizational,
start-up, preliminary market research, and fund raising activities. As a
development stage company, the Company is a highly speculative venture involving
significant financial risk. It is uncertain as to when we will become
profitable, if ever.
There is
nothing at this time on which to base an assumption that our business operations
will prove to be successful or that we will ever be able to operate profitably.
We may not be able to successfully effectuate our business plan. There can be no
assurance that we will ever achieve any revenues or profitability. The revenue
and income potential of our proposed business and operations is unproven as the
lack of operating history makes it difficult to evaluate the future prospects of
our business. Accordingly, our prospects must be considered in light of the
risks, expenses and difficulties frequently encountered in establishing a new
business.
We
expect losses in the future and as a result, we may not be able to continue
operations. Unless we are able to generate revenues and make a profit, our
stockholders may lose their entire investment in us.
We expect
to incur losses over the next twelve months because we do not yet have any
revenues to offset the expenses associated with the development and the
marketing of our of our call-back service. We cannot guarantee that we will ever
be successful in generating revenues in the future. We recognize that if we are
unable to generate revenues, we will not be able to earn profits or continue
operations and as a result our stockholders may lose their entire investment in
us. There is no history upon which to base any assumption as to the
likelihood that we will prove successful, and we can provide investors with no
assurance that we will generate any operating revenues or ever achieve
profitable operations.
If
our business strategy is not successful, we may not be able to continue
operations as a going concern and our stockholders may lose their entire
investment in us.
We have
incurred a net loss of $50,316 for the period January 30, 2007 (inception) to
December 31, 2008. This factor raises substantial doubt that we will be able to
continue operations as a going concern, and our independent auditors included an
explanatory paragraph regarding this uncertainty in their report on our
financial statements for this period. Our ability to continue as a
going concern is dependent upon our generating cash flow sufficient to fund
operations and reduce operating expenses. If we cannot continue as a going
concern, our stockholders may lose their entire investment in us.
We
will not be able to generate revenue unless and until we successfully develop
our call-back system.
The
Company expects to incur operating losses over the next twelve months because we
have no plan to generate revenue unless and until we are successful in
developing our call-back system. We anticipate relying upon third parties to
develop such call-back system. We cannot guarantee that we will ever be
successful in developing the call-back system or in generating revenues in the
future. We recognize that if we are unable to generate revenues, we will not be
able to earn profits or continue operations. We can provide investors
with no assurance that we will generate any operating revenues or ever achieve
profitable operations.
We
are heavily dependent upon Mr. Mazen Hleiss, our sole officer and
director. The loss of Mr. Hleiss, or the inability to contract with
qualified third parties, whose knowledge, leadership and technical expertise
upon which we rely, would harm our ability to execute our business
plan.
We are
dependent on the continued contributions of Mazen Hleiss, our sole officer,
whose knowledge, leadership and experience would be difficult to
replace. We do not maintain any key person insurance on our officer.
If we were to lose his services, our ability to execute our business plan would
be harmed, and we may be forced to cease operations until such time as we can
hire suitable replacements. As we anticipate relying upon third-parties to
develop our call-back system, if we are unable to contract with such qualified
third-parties we will not be able to develop our system. As such, we will not be
able to generate revenues or continue operations.
Since
our sole officer and director works for other companies, his other activities
could slow down our operations and we may not be able to successfully effectuate
our business plan.
Mazen
Hleiss, our sole officer does not work exclusively for us and does not devote
all of his time to our operations. Therefore, it is possible that a
conflict of interest with regard to his time may arise based upon his employment
with other companies. His other activities may prevent him from
devoting his full-time to our operations which could slow our operations and
consequently may reduce our financial results. It is expected that
Mr. Hleiss will only be available to the Company on a part-time basis and may
devote approximately twenty hours per week to our operations on an ongoing
basis. Mr. Hleiss has other part-time employment obligations which do
not preclude him from devoting up to 20 hours per week to Company business. If
our sole officer and director does not devote sufficient time towards our
business, we may never be able to effectuate our business plan.
We
expect to rely heavily on resellers and distributors of our call-back system in
order to generate revenues. If we fail to contract with resellers and
distributors, we may not be able to generate sufficient revenues to continue
operations. As a result, our stockholders may lose their entire investment in
us.
Our
Company expects to rely heavily on a network of resellers and distributors of
our call-back system and services as a primary source of revenues. We have no
contracts or agreements with any resellers or distributors to resell our
call-back services. We cannot provide any assurances that we will be able to
successfully contract with any such resellers and distributors. If we fail to do
so, we may not be able to generate sufficient revenues to continue operations.
Accordingly, our stockholders may lose their entire investment in
us.
If
we are unable to obtain additional funding in the future, our business
operations will be harmed. Even if we do obtain additional financing, our then
existing shareholders may suffer substantial dilution.
If our
expenses over the next twelve months exceed our budgeted expenses, we may need
to raise additional funds to pay for such additional expenses. Such additional
funds may come from the sale of equity and/or debt securities and/or loans. It
is possible that additional capital will be required to effectively support our
operations and to otherwise implement the Company’s overall business strategy.
The inability to raise the required capital will restrict our ability to grow
and may reduce our ability to continue to conduct business operations. If we are
unable to obtain necessary financing, we will likely be required to curtail our
development plans which could cause the Company to become dormant. We currently
do not have any arrangements or agreements to raise additional capital. Any
additional equity financing may involve substantial dilution to our then
existing shareholders.
We
may not be able to compete with current and potential competitors, some of whom
have greater resources and experience than we do.
The
call-back services market in which we operate is subject to rapid technological
changes. We may not have the resources to compete with our existing competitors
or with any new competitors. Our competitors have significantly greater
personnel, financial, managerial, and technical resources than we do. This
competition from other companies with greater resources and reputations may
result in our failure to maintain or expand our business as we may never be able
to develop customers for our products and services.
Our
lack of business diversification could have a negative impact on our financial
performance if we do not generate revenue from our products or such revenues
decrease.
We expect
that our business will consist solely of the development of a call-back system
and sale of call-back services. We currently have no other planned lines of
business or other sources of revenue. Our lack of business diversification could
cause us to be unable to generate revenues since we do not have any other lines
of business or alternative revenue sources other than the sale of our all-back
platform and service.
If
we fail to develop and maintain an effective system of internal controls, we may
not be able to accurately report our financial results or prevent fraud; as a
result, current and potential shareholders could lose confidence in our
financial reports, which could harm our business and the trading price of our
common stock.
Effective
internal controls are necessary for us to provide reliable financial reports and
effectively prevent fraud. Section 404 of the Sarbanes-Oxley Act of 2002
requires us to evaluate and report on our internal controls over financial
reporting and have our independent registered public accounting firm annually
attest to our evaluation, as well as issue their own opinion on our internal
controls over financial reporting, beginning with our Annual Report on Form 10-K
for the fiscal year ended December 31, 2008. We plan to prepare for compliance
with Section 404 by strengthening, assessing and testing our system of internal
controls to provide the basis for our report. The process of strengthening our
internal controls and complying with Section 404 is expensive and time
consuming, and requires significant management attention. We cannot be certain
that the measures we will undertake will ensure that we will maintain adequate
controls over our financial processes and reporting in the future. Furthermore,
if we are able to rapidly grow our business, the internal controls that we will
need will become more complex, and significantly more resources will be required
to ensure our internal controls remain effective. Failure to implement required
controls, or difficulties encountered in their implementation, could harm our
operating results or cause us to fail to meet our reporting obligations. If we
or our auditors discover a material weakness in our internal controls, the
disclosure of that fact, even if the weakness is quickly remedied, could
diminish investors’ confidence in our financial statements and harm our stock
price. In addition, non-compliance with Section 404 could subject us to a
variety of administrative sanctions, including the suspension of trading,
ineligibility for listing on one of the Nasdaq Stock Markets or national
securities exchanges, and the inability of registered broker-dealers to make a
market in our common stock, which would further reduce our stock
price.
Because
we do not have an audit or compensation committee, shareholders will have to
rely on our sole director, who is not independent, to perform these
functions.
We do not
have an audit or compensation committee comprised of independent directors.
Indeed, we do not have any audit or compensation committee. These functions are
performed by, Mazen Hleiss, our sole director and officer. Thus,
there is a potential conflict of interest in that our sole director and officer
has the authority to determine issues concerning management compensation and
audit issues that may affect management decisions.
Our
principal stockholder, who is also our sole officer and director, owns a
controlling interest in our voting stock. Therefore, investors will not have any
voice in our management, which could result in decisions adverse to our general
shareholders.
Mazen
Hleiss, our sole officer and director beneficially owns 100% of our outstanding
common stock. Assuming all shares in this offering are sold, Mr. Hleiss will own
87% of our outstanding common stock. As a result, Mr. Hleiss will have the
ability to control substantially all matters submitted to our stockholders for
approval including:
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election
of our board of directors;
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removal
of any of our directors;
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amendment
of our Articles of
Incorporation or bylaws; and
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adoption
of measures that could delay or prevent a change in control or impede a
merger, takeover or other business combination involving
us.
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As a
result of his ownership and positions, our director and executive officer will
be able to influence all matters requiring shareholder approval, including the
election of directors and approval of significant corporate transactions. In
addition, the future prospect of sales of significant amounts of shares held by
our director and executive officer, could affect the market price of our common
stock if the marketplace does not orderly adjust to the increase in shares in
the market and the value of your investment in the Company may decrease.
Management’s stock ownership may discourage a potential acquirer from making a
tender offer or otherwise attempting to obtain control of us, which in turn
could reduce our stock price or prevent our stockholders from realizing a
premium over our stock price.
We
will rely on a Voice over Internet Protocol (“VoIP”) provider for our telephone
connections; any delay, interruption or financial difficulties by our VoIP
provider would result in delayed or reduced rate of service to our future
customers and may harm our business.
We
anticipate relying upon a third-party VoIP services provider to provide
telephone connectivity for our call-back services. We do not have any contracts
or agreements with any such VoIP provider. We do not anticipate having any
control over the operations of our VoIP provider, and as result, any delay,
interruption or financial difficulties by such provider would result in delayed,
interrupted or reduced rates of service to our future customers which may harm
our business.
Changes
in the exchange rates between the United States dollar and foreign currencies
may be volatile and may negatively impact our costs which could adversely affect
our operating results.
When
operating in foreign countries, such as Canada, we expect to incur a certain
amount of our expenses from our operations in foreign currency and translate
these amounts into United States dollars for purposes of reporting operating
results. As a result, fluctuations in foreign currency exchange rates may
adversely affect our expenses and results of operations, as well as the value of
our assets and liabilities. Fluctuations may adversely affect the comparability
of period-to-period results. In addition, we anticipate holding foreign currency
balances, which will create foreign exchange gains or losses, depending upon the
relative values of the foreign currency at the beginning and end of the
reporting period, which may affect our net income and earnings per share.
Although we may use hedging techniques in the future (which we currently do not
use), we may not be able to eliminate the effects of currency fluctuations.
Thus, exchange rate fluctuations could have a material adverse impact on our
operating results and stock price.
Future
legislation or regulation of the internet and/or internet commerce services,
could restrict our business, prevent us from offering service or increase our
cost of doing business, which could result in a loss of revenue.
At
present there are few laws, regulations, or rulings that specifically address
access to or commerce on the internet. We are unable to predict the impact, if
any, that future legislation, legal decisions, or regulations concerning the
Internet may have on our business, financial condition, and results of
operations. Regulation may be targeted towards, among other things, assessing
access
or settlement charges, imposing taxes related
to internet commerce, imposing tariffs
or regulations based on encryption concerns or the
characteristics and quality of products and services. Any such
regulation could restrict our business or increase our cost of doing business
and consequently a loss of future revenue.
Risks
Associated with Our Common Stock
We
may, in the future, issue additional common shares, which would reduce
investors' percent of ownership and may dilute our share value.
Our
Articles of Incorporation authorize the issuance of 50,000,000 shares of common
stock, of which 4,470,000 shares are issued and outstanding. The
future issuance of common stock may result in substantial dilution in the
percentage of our common stock held by our then existing shareholders. We may
value any common stock issued in the future on an arbitrary basis. The issuance
of common stock for future services or acquisitions or other corporate actions
may have the effect of diluting the value of the shares held by our investors,
and might have an adverse effect on any trading market for our common
stock.
Our
common shares are subject to the "Penny Stock" Rules of the SEC and the trading
market in our securities is limited, which makes transactions in our stock
cumbersome and may reduce the value of an investment in our stock.
The
Securities and Exchange Commission has adopted Rule 15g-9 which establishes the
definition of a "penny stock," for the purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions. For
any transaction involving a penny stock, unless exempt, the rules
require:
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that
a broker or dealer approve a person's account for transactions in penny
stocks; and
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the
broker or dealer receive from the investor a written agreement to the
transaction, setting forth the identity and quantity of the penny stock to
be purchased.
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In order
to approve a person's account for transactions in penny stocks, the broker or
dealer must:
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obtain
financial information and investment experience objectives of the person;
and
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make
a reasonable determination that the transactions in penny stocks are
suitable for that person and the person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks.
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The
broker or dealer must also deliver, prior to any transaction in a penny stock, a
disclosure schedule prescribed by the Commission relating to the penny stock
market, which, in highlight form:
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sets
forth the basis on which the broker or dealer made the suitability
determination; and
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that
the broker or dealer received a signed, written agreement from the
investor prior to the transaction.
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Generally,
brokers may be less willing to execute transactions in securities subject to the
“penny stock” rules. This may make it more difficult for investors to dispose of
our Common shares and cause a decline in the market value of our
stock.
Disclosure
also has to be made about the risks of investing in penny stocks in both public
offerings and in secondary trading and about the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks.
There
is no current trading market for our securities and if a trading market does not
develop, purchasers of our securities may have difficulty selling their
shares.
There is
currently no established public trading market for our securities and an active
trading market in our securities may not develop or, if developed, may not be
sustained. We intend to have a market maker apply for admission to quotation of
our securities on the NASD Over The Counter Bulletin Board after the
registration statement relating to this prospectus is declared effective by the
SEC. We do not yet have a market maker who has agreed to file such
application. If for any reason our common stock is not quoted on the
Over The Counter Bulletin Board or a public trading market does not otherwise
develop, purchasers of the shares may have difficulty selling their common stock
should they desire to do so. No market makers have committed to becoming market
makers for our common stock and none may do so.
Because
we do not intend to pay any cash dividends on our common stock, our stockholders
will not be able to receive a return on their shares unless they sell
them.
We intend
to retain any future earnings to finance the development and expansion of our
business. We do not anticipate paying any cash dividends on our common stock in
the foreseeable future. Unless we pay dividends, our stockholders will not be
able to receive a return on their shares unless the value of such shares
appreciates and they sell them. There is no assurance that stockholders will be
able to sell shares when desired.
Item 2. Description of Property.
Our
principal executive offices for the year 2008 were located at Seaford Fifth
Avenue Plaza, 800 5th Avenue, Suite 4100, Seattle, WA, 98104. The lease was
terminated January 31, 2009.
Item 3. Legal Proceedings.
We know
of no material, active or pending legal proceedings against our company, nor are
we involved as a plaintiff in any material proceeding or pending litigation.
There are no proceedings in which any of our directors, officers or affiliates,
or any registered or beneficial shareholder, is an adverse party or has a
material interest adverse to our interest.
Item 4. Submissions of Matters to a Vote of Security
Holders.
None.
PART
II
Item 5. Market for Common Equity and Related Stockholder
Matters.
In the
United States, our common shares are traded on the
National Association
of Securities Dealers Inc.
OTC Bulletin Board under the symbol "UTAK." The
following quotations obtained from Stockwatch reflect the high and
low bids for
our common shares based on inter-dealer prices, without retail mark-up,
mark-down or commission an may not represent actual transactions.
Our common shares are issued in
registered form. Nevada Agency & Trust Company, Suite 880 - Bank
of America Plaza, 50 West
Liberty Street, Reno, Nevada 8950
(Telephone: (775) 322-0626; Facsimile: (775) 322-5623)
is the registrar and transfer agent for our common
shares.
On
February 19, 2009 the shareholders' list of our common shares showed 38
shareholder and 4,470,000 shares outstanding. The shareholder is our sole
Director and president of the company Mazen Hleiss.
Dividends
We have
not declared any dividends since incorporation and does not anticipate that we
will do so in the foreseeable future. Although there are no restrictions that
limit the ability to pay dividends on our common shares, our intention is to
retain future earnings for use in our operations and the expansion of our
business.
Equity
Compensation Plan Information
We have
not adopted any equity compensation plans.
Purchases
of Equity Securities by the Issuer and Affiliated Purchasers
We did
not purchase any of our shares of common stock or other securities for the year
ended December 31, 2008.
Item
6. Selected Financial Data.
As a
“smaller reporting company” as defined by Item 10 of Regulation S-K, the Company
is not required to provide this information.
Item 7. Management Discussion and Analysis and Plan of
Operation.
The
following discussion should be read in conjunction with our
audited financial statements and the related notes for the years
ended December 31, 2008 and 2007 which appear elsewhere in this annual report.
The following discussion contains forward-looking statements that reflect our
plans, estimates and beliefs. Our actual results could differ materially from
those discussed in the forward looking statements. Factors that could cause or
contribute to such differences include, but are not limited to, those discussed
below and elsewhere in this annual report, particularly in the section entitled
"Risk Factors" beginning on page 11 of this annual report.
Plan
of Operations
From the
date of our incorporation on January 30, 2007 to December 31, 2008, we have been
a start-up company that has not generated revenues.
For the
years ended December 31, 2008 and 2007, we recorded net losses of $26,868 and
$23,448, respectively. The principal components of the losses for the years
ended December 31, 2008 and 2007 were accounting and legal fees of $11,524 and
$21,355, respectively, and general and administrative fees of $11,844 and
$2,093, respectively. For the period from inception (January 30,
2007) to December 31, 2008 we recorded net loss of $50,316 which consisted
primarily of accounting and legal fees of $32,879 and general and administrative
fees of $13,937.
We have
not generated any revenues since our inception. To date, we have
engaged in the following activities:
Our sole
officer and director has conducted preliminary market research relating to
call-back services, as well as the software to be used in connection with our
anticipated service. In addition, we have reserved a domain name,
www.utalklive.com, for our Company at a cost of approximately $30 per year. We
have also acquired web and email hosting (up to 4 emails) for $240 per
year.
We have
retained a contractor for the development of our web site and marketing and
corporate collateral for $3500. The services has already has been
delivered.
We have
retained a company for the development and deployment of call-back services. A
payment of $12,000 was made for the development of our product and we expect
that the product will be delivered in the second quarter of 2009. Our Director
will be working closely on the development of the services.
During
the next twelve months, we intend to engage in the following
activities:
January
through June, 2009
During
this period, we expect to achieve the following:
• Complete
the development of the software
• Complete
the formulation of a marketing and sales strategy
• Complete
the development of our marketing collateral
• Purchase
and configuration of computer servers to deploy our call-back
services
• Initiate
sales activities
July
through September, 2009
During
this period, we expect to achieve the following:
• Launch
our advertising campaign to attract resellers
• Launch
our service in Canada
October
through December, 2009
• Make
our service available to resellers
• If
we have enough funding, continue the development of our product
January
2010 and thereafter
During
this period, we plan to focus on our marketing and sales effort.
Employees
As of
December 31, 2008, we have no employees.
Personnel
Plan
We do not
currently plan to add more personnel to our company until the product
development is completed when we expect to hire a sales assistant. As we start
offering service, we will consider outsourcing customer support or hiring
additional personnel.
Financial
Condition, Liquidity and Capital Resources
Our
principal capital resources have been through the issuance of common stock to
the sole Director Mazen Hleiss and loans from Mazen Hleiss..
At
December 31, 2008 and 2007 we had working capital (deficit) of $4,684 and
($3,448), respectively.
At
December 31, 2008 and 2007, our total assets were $26,384 and $7,851,
respectively, which consisted primarily of cash of $7,084 and $7,552,
respectively.
At
December 31, 2008 and 2007, our total liabilities were $9,700 and $11,299,
respectively.
Cash
Requirements
Presently,
we currently are not generating revenues. Management projects that we will
require additional funding to maintain our current operations and to enable us
to address our current and ongoing expenses and continue with the marketing and
promotion activity connected with the development of the call-back
service.
There is
doubt about our ability to continue as a going concern as the continuation of
our business is dependent upon the development of call-back, profitable
commercialization of the service, and obtaining additional financing. The
issuance of additional equity securities by us will result in a dilution in the
equity interests of our current stockholder. Obtaining commercial loans,
assuming those loans would be available, will increase our liabilities and
future cash commitments.
We have
incurred operating losses since inception of $50,316. As we had cash on hand of
$7,084 as at December 31, 2008, management projects that we may require an
additional $38,500 to fund our ongoing operating expenditures, offering expenses
and working capital requirements for the twelve month period ending December 31,
2009.
Due to
the uncertainty of our ability to meet our current operating and capital
expenses, in their report on the annual financial statements for year ended
December 31, 2008, our independent auditors included an explanatory paragraph
regarding concerns about our ability to continue as a going concern. Our
financial statements contain additional note disclosures describing the
circumstances that lead to this disclosure by our independent
auditors.
There are
no assurances that we will be able to obtain further funds as may be required
for our continued operations. If required, we will pursue various financing
alternatives to meet our immediate and long-term financial requirements, which
we anticipate will consist of further private placements of equity securities,
advances from related parties or shareholder loans. We have not entered into any
definitive agreements with any shareholders or related parties for the provision
of loans or advances. There can be no assurance that additional financing will
be available to us when needed or, if available, that it can be obtained on
commercially reasonable terms. If we are not able to obtain the additional
financing on a timely basis, we will not be able to meet our other obligations
as they become due and we will be forced to scale down or perhaps even cease our
operations.
Purchase
of Significant Equipment
We do not
anticipate that we will expend any significant amount on equipment for our
present or future operations.
Going
Concern
Due to
our being a development stage company and not having generated substantial
revenues, in their report on our financial statements for the year ended
December 31, 2008, our independent auditors included an explanatory paragraph
regarding concerns about our ability to continue as a going concern. Our
financial statements contain additional note disclosures describing the
circumstances that lead to this disclosure.
We have
historically incurred losses, and through December 31, 2008 have incurred losses
of $50,316 from our inception. Because of these historical losses, we will
require additional working capital to develop our business operations. We intend
to raise additional working capital through private placements, public
offerings, bank financing and/or advances from related parties or shareholder
loans.
The
continuation of our business is dependent upon obtaining further financing and
achieving a break even or profitable level of operations. The issuance of
additional equity securities by us could result in a significant dilution in the
equity interests of our current or future stockholders. Obtaining commercial
loans, assuming those loans would be available, will increase our liabilities
and future cash commitments.
There are
no assurances that we will be able to either (1) achieve a level of revenues
adequate to generate sufficient cash flow from operations; or (2) obtain
additional financing through either private placements, public offerings and/or
bank financing necessary to support our working capital requirements. To the
extent that funds generated from operations and any private placements, public
offerings and/or bank financing are insufficient, we will have to raise
additional working capital. No assurance can be given that additional financing
will be available, or if available, will be on terms acceptable to us. If
adequate working capital is not available we may not increase our
operations.
These
conditions raise substantial doubt about our ability to continue as a going
concern. The financial statements do not include any adjustments relating to the
recoverability and classification of asset carrying amounts or the amount and
classification of liabilities that might be necessary should we be unable to
continue as a going concern.
APPLICATION
OF CRITICAL ACCOUNTING POLICIES
We
consider the following to be our critical accounting policies:
Capitalized
Software Costs
Utalk follows AICPA Statement of
Position 98-1: “Accounting for the Costs of Computer Software Developed
or Obtained for Internal Use” In accordance with SOP 98-1, internal costs
incurred to develop a computer software to be used for commercial purposes are
charged to expense when incurred until technological feasibility has been
established for the software. Technological feasibility is established upon
completion of a detailed program design or, in its absence, completion of a
working model. After technological feasibility is established, the costs of
coding and testing and other costs of producing product masters are capitalized.
Cost capitalization ceases when the product is available for general release to
customers.
Capitalized
software costs are amortized using the straight line method over the software’s
estimated useful life once it is available for use.
Income
Taxes
Utalk
recognizes deferred tax assets and liabilities based on differences between the
financial reporting and tax bases of assets and liabilities using the enacted
tax rates and laws that are expected to be in effect when the differences are
expected to be recovered. The Company provides a valuation allowance
for deferred tax assets for which it does not consider realization of such
assets to be more likely than not.
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Recent
Accounting Pronouncements
Management
does not believe that any recently issued, but not yet effective accounting
standards if currently adopted could have a material effect on the accompanying
financial statements.
Item 8. Financial Statements.
Our
financial statements are stated in United States dollars and are prepared in
accordance with United States Generally Accepted Accounting
Principles.
The
Report of Independent Registered Public Accounting Firm for the audited
financial statements for the period ended December 31, 2008 is included herein
immediately preceding the audited financial statements.
Utalk
Communications, Inc.:
Index
to Financial Statements
| Page | |
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16
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17
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|
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18
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|
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19
|
|
|
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|
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20
|
|
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21
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the
Stockholders and Board of Directors
Utalk
Communications, Inc.
(a
development stage company)
Huntington
Beach, California
We have
audited the accompanying balance sheets of Utalk Communications Inc. at December
31, 2008 and 2007 and the related statements of expenses, changes in
stockholders’ equity (deficit), and cash flows for the year ended December 31,
2008, for the period ended December 31, 2007 and for the period from
inception (January 30, 2007) through December 31, 2008. These financial
statements are the responsibility of Utalk's management. Our responsibility is
to express an opinion on these financial statements based on our
audit.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform an audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. Utalk is not required to have, nor
were we engaged to perform, an audit of its internal control over financial
reporting. Our audits included 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 Utalk’s internal control over financial reporting. Accordingly,
we express no such opinion. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Utalk Communications Inc. at
December 31, 2008 and 2007 and the results of operations, stockholders’ equity
(deficit) and its cash flows for the year ended December 31, 2008, for the
period ended December 31, 2007, and for the period from inception (January 30,
2007) through December 31, 2008, in conformity with accounting principles
generally accepted in the United States of America.
The
accompanying financial statements have been prepared assuming that Utalk will
continue as a going concern. As discussed in Note 3 to the financial statements,
Utalk suffered losses from operations and has inadequate cash to fund planned
operations in 2009, which raises substantial doubt about its ability to continue
as a going concern. Management’s plans regarding those matters also are
described in Note 3. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ Malone &Bailey,
PC
MALONE
& BAILEY, PC
www.malone-bailey.com
Houston,
Texas
April 6,
2009
|
December
31,
|
December
31,
|
|||||||
|
2008
|
2007
|
|||||||
|
Assets
|
||||||||
|
Current:
|
||||||||
|
Cash
|
$ | 7,084 | $ | 7,552 | ||||
|
Prepaid
expenses
|
7,300 | 299 | ||||||
|
Total
Current Assets
|
14,384 | 7,851 | ||||||
|
Software
development
|
12,000 | - | ||||||
|
Total
Assets
|
$ | 26,384 | $ | 7,851 | ||||
|
Liabilities
|
||||||||
|
Current:
|
||||||||
|
Accounts
payable and accrued liabilities
|
$ | 4,200 | $ | 11,299 | ||||
|
Due
to stockholder
|
5,500 | - | ||||||
|
Total
Liabilities
|
9,700 | 11,299 | ||||||
|
Stockholders`
Equity (Deficit)
|
||||||||
|
Common
stock authorized –
|
||||||||
|
50,000,000
common shares, par value $0.001, 4,470,000 and 4,000,000 shares issued and
outstanding at
December 31, 2008 and 2007, respectively |
4,470 | 4,000 | ||||||
|
Additional
paid in capital
|
62,530 | 16,000 | ||||||
|
Deficit
accumulated during the development stage
|
(50,316 | ) | (23,448 | ) | ||||
|
Total
Stockholders’ Equity (Deficit)
|
16,684 | (3,448 | ) | |||||
|
Total
Liabilities and Stockholders’ Equity (Deficit)
|
$ | 26,384 | $ | 7,851 | ||||
The
accompanying notes are an integral part of these financial
statements
Utalk Communications Inc.
(A
Development Stage Company)
Statements
of Expenses
|
|
Period
from
|
Period
from
|
||||||||||
|
|
Inception
|
Inception
|
||||||||||
|
Year
|
(Jan.
30, 2007)
|
(Jan.
30, 2007)
|
||||||||||
|
Ended
|
to
|
to
|
||||||||||
|
Dec.
31, 2008
|
Dec.
31, 2007
|
Dec.
31, 2008
|
||||||||||
|
Operating
expenses:
|
||||||||||||
|
Accounting
fees
|
$ | 11,524 | $ | 5,073 | $ | 16,597 | ||||||
|
Legal
fees
|
- | 16,282 | 16,282 | |||||||||
|
Website
development fees
|
3,500 | - | 3,500 | |||||||||
|
General
and administrative
|
11,844 | 2,093 | 13,937 | |||||||||
|
Net
loss
|
$ | (26,868 | ) | $ | (23,448 | ) | $ | (50,316 | ) | |||
|
Basic
and diluted (loss) per common share
|
$ | (0.01 | ) | $ | (0.01 | ) | ||||||
|
Weighted
average number of common shares
|
||||||||||||
|
outstanding
– Basic and Diluted
|
4,400,479 | 4,000,000 | ||||||||||
The
accompanying notes are an integral part of these financial
statements
Utalk Communications Inc.
(A
Development Stage Company)
Statements
of Changes in Stockholders’ Equity (Deficit)
For
the period from Inception (January 30, 2007) to December 31, 2008
|
Additional
|
||||||||||||||||||||
|
Common
Shares
|
Paid-in
|
Accumulated
|
Total
|
|||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Deficit
|
Equity
|
||||||||||||||||
|
Shares
issued to founder at inception
|
4,000,000 | $ | 4,000 | $ | 16,000 | $ | - | $ | 20,000 | |||||||||||
|
Net
loss
|
- | - | - | (23,448 | ) | ( 23,448 | ) | |||||||||||||
|
Balance,
December 31, 2007
|
4,000,000 | 4,000 | 16,000 | (23,448 | ) | (3,448 | ) | |||||||||||||
|
Common
stock issued for cash
|
470,000 | 470 | 46,530 | - | 47,000 | |||||||||||||||
|
Net
loss
|
- | - | - | (26,868 | ) | (26,868 | ) | |||||||||||||
|
Balance,
December 31, 2008
|
4,470,000 | $ | 4,470 | $ | 62,530 | $ | (50,316 | ) | $ | 16,684 | ||||||||||
The accompanying notes are an
integral part of these financial statements
Utalk Communications Inc.
(A
Development Stage Company)
Statements
of Cash Flows
|
Period
from
|
Period
from
|
|||||||||||
|
Inception
|
Inception
|
|||||||||||
|
Year
|
(Jan.
30, 2007)
|
(Jan.
30, 2007)
|
||||||||||
|
Ended
|
to
|
to
|
||||||||||
|
Dec.
31, 2008
|
Dec.
31, 2007
|
Dec.
31, 2008
|
||||||||||
|
Cash
Flows from Operating Activities
|
||||||||||||
|
Net
loss
|
$ | (26,868 | ) | $ | (23,448 | ) | $ | (50,316 | ) | |||
|
Changes
in assets and liabilities:
|
||||||||||||
|
Prepaid
expenses
|
(7,001 | ) | (299 | ) | (7,300 | ) | ||||||
|
Accounts
payable
|
(7,099 | ) | 11,299 | 4,200 | ||||||||
|
Net
cash (used in) operating activities
|
(40,968 | ) | (12,448 | ) | (53,416 | ) | ||||||
|
Cash
Flows from Investing Activities
|
||||||||||||
|
Purchase
of software development
|
(12,000 | ) | - | (12,000 | ) | |||||||
|
Cash
Flows from Financing Activities
|
||||||||||||
|
Advances
from stockholder - net
|
5,500 | - | 5,500 | |||||||||
|
Common
stock issued for cash
|
47,000 | 20,000 | 67,000 | |||||||||
|
Net
cash provided by financing activities
|
52,500 | 20,000 | 72,500 | |||||||||
|
Increase
(Decrease) in cash
|
(468 | ) | 7,552 | 7,084 | ||||||||
|
Cash,
beginning of period
|
7,552 | - | - | |||||||||
|
Cash,
end of period
|
$ | 7,084 | $ | 7,552 | $ | 7,084 | ||||||
|
Supplemental
disclosure of cash flow information:
|
||||||||||||
|
Taxes
paid
|
$ | - | $ | - | ||||||||
|
Interest
paid
|
$ | - | $ | - | ||||||||
The accompanying notes are an
integral part of these financial statements
Utalk Communications Inc.
(A
Development Stage Company)
Notes
to Financial Statements
December
31, 2008
Note
1 – Nature of Operations
Utalk
Communications Inc., incorporated in on January 30, 2007, is a development stage
company whose purpose is to engage in the development and marketing of telephone
services using a call-back platform. Utalk has elected December 31as
its fiscal year-end.
Utalk has
no operations and in accordance with SFAS#7 is considered to be in the
development stage.
Note
2 – Significant Accounting Policies
Basis
of Presentation
The
accompanying audited financial statements of the Company have been prepared in
accordance with accounting principles generally accepted in the United States of
America and the rules of the Securities and Exchange Commission.
Cash
and Cash Equivalents
The
Company considers deposits that can be redeemed on demand and investments that
have original maturities of less than three months, when purchased, to be cash
equivalents.
Capitalized
Software Costs
Utalk follows AICPA Statement of
Position 98-1: “Accounting for the Costs of Computer Software Developed
or Obtained for Internal Use” In accordance with SOP 98-1, internal costs
incurred to develop a computer software to be used for commercial purposes are
charged to expense when incurred until technological feasibility has been
established for the software. Technological feasibility is established upon
completion of a detailed program design or, in its absence, completion of a
working model. After technological feasibility is established, the costs of
coding and testing and other costs of producing product masters are capitalized.
Cost capitalization ceases when the product is available for general release to
customers.
Capitalized
software costs are amortized using the straight line method over the software’s
estimated useful life once it is available for use.
Income
Taxes
Utalk
recognizes deferred tax assets and liabilities based on differences between the
financial reporting and tax bases of assets and liabilities using the enacted
tax rates and laws that are expected to be in effect when the differences are
expected to be recovered. The Company provides a valuation allowance
for deferred tax assets for which it does not consider realization of such
assets to be more likely than not.
Basic
and Diluted Net Loss per Share
Basic and
diluted net loss per share calculations are presented in accordance with
Financial Accounting Standards Statement 128, and are calculated on the basis of
the weighted average number of common shares outstanding during the year. They
include the dilutive effect of common stock equivalents in years with net
income. Basic and diluted loss per share are the same due to the absence of
common stock equivalents and the Company`s net loss incurred for the period
presented.
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Recently
Issued Accounting Pronouncements
Utalk
does not expect the adoption of any recently issued accounting pronouncements to
have a significant impact on their financial position, results of operations or
cash flows.
Note
3 – Going Concern
These
financial statements have been prepared on a going concern basis. As at December
31, 2008, Utalk has not generated any revenue since inception and has
accumulated losses of $50,316. The continuation of Utalk as a going
concern is dependent upon the continued financial support from its stockholders,
the ability to obtain necessary equity financing to continue operations, and the
attainment of profitable operations. These factors raise substantial doubt
regarding Utalk’s ability to continue as a going concern.
Note
4 – Software Development
During
2008, the Company invested $12,000 for a call-back platform
software. All of which were accounted for under SOP 98-1. No
amortization has been recognized for the year ending December 31, 2008 as the
platform is not available for general use by customers as of Decembr 31,
2008.
Note
5 – Income Taxes
Utalk
uses the liability method, where deferred tax assets and liabilities are
determined based on the expected future tax consequences of temporary
differences between the carrying amounts of assets and liabilities for financial
and income tax reporting purposes. During fiscal 2008 and 2007,
Utalk incurred net losses and, therefore, has no tax
liability. The net deferred tax asset generated by the loss
carry-forward has been fully reserved. The cumulative net operating
loss carry-forward is $50,316 and $23,448 at December 31, 2008 and 2007,
respectively, and will expire in the year 2027 and 2028.
Deferred
tax assets consisted of the following:
|
December
31,
|
||||||||
|
2008
|
2007
|
|||||||
|
Net
operating loss
|
$ | 7,547 | $ | 3,517 | ||||
|
Less:
valuation allowance
|
(7,547 | ) | (3,517 | ) | ||||
|
Net
deferred tax asset
|
$ | - | $ | - | ||||
Note
6 – Equity
During
2007, Utalk issued 4,000,000 founders common shares to the Chief Executive
Officer of the company for $20,000 in cash.
During
2008, Utalk sold 470,000 shares of common stock through private placements for
$47,000.
Note
7 – Related Party Transactions
During
2008 Utalk’s Chief Executive Officer advanced the company $7,000 of which $5,500
is remains unpaid as of December 31, 2008.
Note
8 – Operating Lease
The
Company entered a lease agreement on August 1, 2007 with one year term and due
to office relocation the lease was reset to start on January 1, 2008 with one
year term expiring December 31, 2008. The lease has a one-year renewal option.
Total annual lease payment is $2,589 and $950 for the year ended December 31,
2008 and 2007, respectively. The lease was terminated on
January 31, 2009.
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.
There are
not and have not been any disagreements between the Company and its accountants
on any matter of accounting principles, practices or financial statement
disclosure.
Item 9T. Controls and Procedures.
Evaluation of Disclosure
Controls and Procedures
The
Company’s management is responsible for establishing and maintaining a system of
disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e)
under the Exchange Act) that is designed to ensure that information required to
be disclosed by the Company in the reports that the Company files or submits
under the Exchange Act is recorded, processed, summarized and reported, within
the time periods specified in the Commission’s rules and forms. Disclosure
controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed by an issuer in the
reports that it files or submits under the Exchange Act is accumulated and
communicated to the issuer’s management, including its principal executive
officer or officers and principal financial officer or officers, or persons
performing similar functions, as appropriate to allow timely decisions regarding
required disclosure.
In
accordance with Exchange Act Rules 13a-15 and 15d-15, an evaluation was
completed under the supervision and with the participation of the Company’s
management, including the Company’s President, Principal Financial Officer and
Secretary, of the effectiveness of the design and operation of the Company’s
disclosure controls and procedures as of the end of the period covered by this
Annual Report. Based on that evaluation, the Company’s management including the
President, Principal Financial Officer and Secretary, concluded that the
Company’s disclosure controls and procedures were effective in providing
reasonable assurance that information required to be disclosed in the Company’s
reports filed or submitted under the Exchange Act was recorded, processed,
summarized, and reported within the time periods specified in the Commission’s
rules and forms.
Evaluation of Internal
Controls over Financial Reporting
Our
management is also responsible for establishing and maintaining adequate
internal control over financial reporting. The Company’s internal control over
financial reporting is designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles.
Our
internal control over financial reporting includes those policies and procedures
that:
|
•
|
Pertain
to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the
Company;
|
|
•
|
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 the Company’s management
and directors; and
|
|
•
|
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.
|
As of
December 31, 2008, we carried out an evaluation of the effectiveness of our
internal control over financial reporting based on the framework in “Internal
Control-Integrated Framework” issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on our evaluation, our
management concluded that our internal control over financial reporting was
effective as of December 31, 2008.
Item 9B. Other Information
None
PART
III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS,
CONTROL PERSONSAND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OFTHE
EXCHANGE ACT
Directors,
Executive Officers, Promoters and Control Persons
As at the
date hereof, names and ages of our directors and executive officers, their
positions with our company and term of offices thereof and any directorships at
other reporting companies are as follows:
|
Name
|
Age
|
Position
Held with our Company
|
Date
First Elected or Appointed
|
Other
Reporting Company Directorships
|
|||||||
|
Mazen
Hleiss
|
36
|
Director
President
Treasurer
Secretary
|
January
30, 2007
January
30, 2007
January
30, 2007
January
30, 2007
|
N/A
|
|||||||
Family
Relationships
There are
no family relationships among our directors or executive officers.
Involvement
in Certain Legal Proceedings
During
the past five years, our directors, executive officers, promoters and control
persons have not been involved in any of the following events that are material
to an evaluation of the ability or integrity of any one of them:
|
·
|
any
bankruptcy petition filed by or against any business of which such person
was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that
time;
|
|
·
|
any
conviction in a criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor
offenses);
|
|
·
|
being
subject to any order, judgment, or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining, barring, suspending or otherwise limiting his
involvement in any type of business, securities or banking activities;
or
|
|
·
|
being
found by a court of competent jurisdiction (in a civil action), the SEC or
the Commodity Futures Trading Commission to have violated a federal or
state securities or commodities law, and the judgment has not been
reversed, suspended, or vacated.
|
Committees
of the Board of Directors
At
present, we do not have any committees of the board of directors.
Code
of Ethics
At
present, we have not adopted any code of ethics.
Compliance
with Section 16(a) of the Securities Exchange Act
Section
16(a) of the Exchange Act requires our directors, executive officers and persons
who own more than 10% of a registered class of our equity securities to file
with the SEC initial statements of beneficial ownership, reports of changes in
ownership and annual reports concerning their ownership of our Common Shares and
other equity securities, on Forms 3, 4 and 5 respectively. Directors, executive
officers and persons who own more than 10% of a registered class of our equity
securities are required by the SEC regulations to furnish us with copies of all
Section 16(a) reports that they file.
ITEM 11. EXECUTIVE COMPENSATION
The
particulars of compensation paid to the following persons during the fiscal
period ended December 31, 2008 are set out in the summary compensation table
below:
|
·
|
our
Chief Executive Officer (Principal Executive
Officer);
|
|
·
|
each
of our two most highly compensated executive officers, other than the
Chief Executive Officer (Principal Executive officer), who were serving as
executive officers at the end of the fiscal year ended December 31, 2008;
and
|
|
·
|
up
to two additional individuals for whom disclosure would have been provided
under the item above but for the fact that the individual was not serving
as our executive officer at the end of the fiscal year ended December 31,
2008;
|
(collectively,
the “Named Executive
Officers”):
|
SUMMARY
COMPENSATION TABLE
|
|||||||||
|
Name
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
(3)
|
Non-Equity
Incentive Plan Compensa-tion
($)
|
Nonqualified
Deferred Compensation Earnings
($)
|
All
Other Compen-sation
($)
|
Total
($)
|
|
Mazen
Hleiss
|
2008
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
We have
not entered into any employment agreement or consulting agreement with our
executive officers. There are no arrangements or plans in which we provide
pension, retirement or similar benefits for directors or executive officers. We
do not have any material bonus or profit sharing plans pursuant to which cash or
non-cash compensation is or may be paid to our directors or executive officers,
except that stock options may be granted at the discretion of our board of
directors from time to time. We have no plans or arrangements in respect of
remuneration received or that may be received by our executive officers to
compensate such officers in the event of termination of employment (as a result
of resignation, retirement or change of control) or a change of responsibilities
following a change of control.
Outstanding
Equity Awards at Fiscal Year-End
As at
December 31, 2008, we had not adopted any equity award/compensation plan and no
stock, options, or other equity securities were awarded to our executive
officers.
Director
Compensation
We have
not reimbursed our directors for expenses incurred in connection with attending
board meetings nor have we paid any directors fees or other cash compensation
for services rendered as a director in the period ended December 31,
2008.
We have
no formal plan for compensating our directors for their services in their
capacity as directors. In the future we may grant options to our directors to
purchase Common Shares as determined by our board of directors or a compensation
committee that may be established. Directors are entitled to reimbursement for
reasonable travel and other out-of-pocket expenses incurred in connection with
attendance at meetings of our board of directors. The board of directors may
award special remuneration to any director undertaking any special services on
behalf of our company other than services ordinarily required of a director.
Other than as indicated herein, no director received and/or accrued any
compensation for his or her services as a director, including committee
participation and/or special assignments.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
ANDMANAGEMENT AND RELATED STOCKHOLDER MATTERS
As of
March 30, 2009, there were 4,470,000 Common Shares issued and outstanding. The
following table sets forth certain information known to us with respect to the
beneficial ownership of our Common Shares as of that date by: (a) each of our
directors, (b) each of our executive officers, and (c) all of our directors and
executive officers as a group.
Except as
set forth in the table below, there is no person known to us who beneficially
owns more than 5% of our Common Shares. The number of Common Shares beneficially
owned is determined under rules of the SEC and the information is not
necessarily indicative of beneficial ownership for any other purpose. Unless
otherwise noted, we believe that each person has sole investment and voting
power (or shares such powers with his or her spouse) with respect to the Common
Shares set forth in the following table:
|
Name
and Address of Beneficial Owner
|
Amount
and Nature of Beneficial Ownership
|
Percentage
of Class(1)
|
||||||
|
Mazen
Hleiss
|
4,000,000 |
Direct
|
89.49 | % | ||||
|
Holders
of More than 5% of our Common Shares
|
Nil
|
N/A
|
0.00 | % | ||||
Changes
in Control
We are
unaware of any contract or other arrangement the operation of which may at a
subsequent date result in a change of control of our company.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
ANDDIRECTOR INDEPENDENCE.
None of
the following parties has, since our date of incorporation, had any material
interest, direct or indirect, in any transaction with us or in any presently
proposed transaction that has or will materially affect us:
|
·
|
any
of our directors or officers;
|
|
·
|
any
person proposed as a nominee for election as a
director;
|
|
·
|
any
person who beneficially owns, directly or indirectly, shares carrying more
than 5% of the voting rights attached to our outstanding shares of common
stock;
|
|
·
|
any
of our promoters; and
|
|
·
|
any
member of the immediate family (including spouse, parents, children,
siblings and in- laws) of any of the foregoing
persons.
|
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit
Fees
The
aggregate fees billed for each of the last two fiscal years for professional
services rendered by the principal account for the audit of our financial
statements and review of financial statements included in our quarterly Reports
on Form 10-Q and services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for these fiscal
periods were as follows:
|
2007
|
2008
|
||
|
Audit
Fees
|
$5,000
|
$11,524
|
|
|
Audit
Related Fees
|
$Nil
|
$Nil
|
|
|
Tax
Fees
|
$Nil
|
$Nil
|
|
|
All
Other Fees
|
$Nil
|
$Nil
|
|
|
Total
|
$Nil
|
$Nil
|
In the
last two fiscal period ended December 31, 2008 and 2007, there were no fees
billed for assurance and related services by the principal accountant that are
reasonably related to the performance of the audit or review of our financial
statements and are not reported under Item 9(e)(1) of Schedule 14A, for
professional services rendered by the principal account for tax compliance, tax
advice, and tax planning, for products and services provided by the principal
accountant, other than the services reported in Item 9(e)(1) through 9(d)(3) of
Schedule 14A.
Policy
on Pre-Approval by Audit Committee of Services Performed by Independent
Auditors
We do not
use Malone Bailey, PC for financial information system design and
implementation. These services, which include designing or implementing a system
that aggregates source data underlying the financial statements or generates
information that is significant to our financial statements, are provided
internally or by other service providers. We do not engage Malone Bailey, PC to
provide compliance outsourcing services.
Effective
May 6, 2003, the SEC adopted rules that require that before Malone Bailey, PC is
engaged by us to render any auditing or permitted non-audit related service, the
engagement be:
|
·
|
approved
by our audit committee (which consists of our entire board of directors);
or
|
|
·
|
entered
into pursuant to pre-approval policies and procedures established by the
board of directors, provided the policies and procedures are detailed as
to the particular service, the board of directors is informed of each
service, and such policies and procedures do not include delegation of the
board of directors' responsibilities to
management.
|
The board
of directors pre-approves all services provided by our independent auditors. All
of the above services and fees were reviewed and approved by the board of
directors either before or after the respective services were
rendered.
The board
of directors has considered the nature and amount of fees billed by Malone
Bailey, PC and believes that the provision of services for activities unrelated
to the audit is compatible with maintaining Malone Bailey, PC’s
independence.
PART
IV
ITEM 15. EXHIBITS
Exhibits
required by Item 601 of Regulation S-B
|
Exhibit
|
Description
|
|
|
3.1
|
Certificate
of Incorporation*
|
|
|
3.2
|
Bylaws
of Registrant*
|
|
|
4.1
|
Specimen
Common Stock Certificate*
|
|
|
10.1
|
HQ
Agreement, dated July 16, 2007, between Utalk Communications, Inc. and
Regus Management Group, LLC*
|
|
|
10.2
|
Regus
Agreement, dated December 12, 2007, between Utalk Communications, Inc. and
Regus Management Group, LLC*
|
|
|
10.3
|
Form
of Subscription Agreement*
|
|
|
31
|
||
|
32
|
||
|
_____________
|
___________
|
|
|
*
|
Previously
filed as an exhibit to the Registration Statement on Form SB-2 (File No.
333-148266) filed with the Securities and Exchange Commission on December
21, 2007
|
In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
|
Utalk
Communications Inc.
|
||||
|
By:
|
/s/Mazen
Hleiss
|
|||
|
Name:
Mazen Hleiss
|
||||
|
Title:
President, Chief Executive Officer
(Principal
Executive Officer) and Director
|
||||
|
Dated:
April 9, 2009
|
||||
In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
|
By:
|
/s/Mazen
Hleiss
|
|
|
Name:
Mazen Hleiss
|
||
|
Title:
President, Chief Executive Officer
(Principal
Executive Officer) and Director
|
||
|
Dated:
April 9, 2009
|
||