As filed with the United States Securities and Exchange Commission
on March 12, 2010
Registration No. 333-153308
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
to
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
NETVENTORY SOLUTIONS, INC.
(Exact Name of Registrant as Specified in our Charter)
Nevada 7389 98-0573252
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer I.D No.)
incorporation or organization) Classification Code Number)
Ronald C. Dela Cruz
NetVentory Solutions, Inc.
8th Floor-200 South Virginia Street
Reno, NV 89501
775-562-0504
(Name, address, Including Zip Code and Telephone Number,
Including Area Code, of Agent for Service)
Copies to:
Gersten Savage LLP
David E. Danovitch, Esq.
Jaclyn Amsel, Esq.
600 Lexington Avenue, 9th Floor
New York, NY 10022-6018
Approximate date of proposed sale to the public: As soon as practicable after
the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering.[ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated Filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a Smaller reporting company)
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
================================================================================
EXPLANATORY NOTE
This Post-Effective Amendment No. 1 (this "Post-Effective Amendment") relates to
the registration statement on Form S-1 of NetVentory Solutions, Inc. (the
"Company," "we," "us," or "our") pertaining to 640,000 shares of common stock,
par value $0.001 per share, which was filed with the Securities and Exchange
Commission on September 3, 2008 (Registration No. 333-153308), as amended and
supplemented, and was declared effective by the Securities and Exchange
Commission on September 11, 2008 (the "Registration Statement"). This
Post-Effective Amendment is being filed to update certain financial and other
information contained in the prospectus in accordance with Section 10(a)(3) of
the Securities Act of 1933, as amended (the "Securities Act"), and includes the
financial statements and the notes thereto included in our Annual Report on Form
10-K, for the fiscal year ended July 31, 2009, the financial statements and the
notes thereto included in our Quarterly Report on Form 10-Q for the three and
six month periods ended January 31, 2010, and certain other updated information.
No additional securities are being registered under this Post-Effective
Amendment. All applicable registration fees were paid at the time of the
original filing of the Registration Statement.
PROSPECTUS
NETVENTORY SOLUTIONS, INC.
640,000 SHARES
OF
COMMON STOCK
This prospectus relates to the resale by certain selling shareholders of up to
640,000 shares of our common stock, par value $0.001 per share.
The selling shareholders named in this prospectus are offering all of the shares
of common stock offered through this prospectus. Our Common Stock is quoted on
the over-the-counter market and prices are reported on the OTC Bulletin Board
under the symbol "NTVS." On March 9, 2010, a closing price was not available on
the OTC Bulletin Board because there have been no reported trades.
The selling shareholders will sell our shares at prevailing market prices or
privately negotiated prices. The expenses of the offering are estimated at
$25,301.26 and will be paid by us.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. CONSIDER CAREFULLY
THE "RISK FACTORS" DETAILED ON PAGE 4 OF THIS PROSPECTUS BEFORE INVESTING.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
You should rely only on the information contained in this Prospectus and the
information we have referred you to. We have not authorized any person to
provide you with any information about this offering, NetVentory Solutions,
Inc., or the shares of our Common Stock offered hereby that is different from
the information included in this prospectus. If anyone provides you with
different information, you should not rely on it.
The date of this prospectus is _______, 2010
TABLE OF CONTENTS
Page
----
GLOSSARY OF TERMS 1
GENERAL 2
PROSPECTUS SUMMARY 2
RISK FACTORS 4
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS 9
TAX CONSIDERATIONS 9
USE OF PROCEEDS 9
DETERMINATION OF OFFERING PRICE 9
DILUTION 10
SHARES ELIGIBLE FOR RESALE 10
SELLING SHAREHOLDERS 10
PLAN OF DISTRIBUTION 13
DESCRIPTION OF SECURITIES 14
INTERESTS OF NAMED EXPERTS AND COUNSEL 14
LEGAL REPRESENTATION 14
EXPERTS 14
TRANSFER AGENT 14
DESCRIPTION OF BUSINESS 15
FINANCIAL STATEMENTS F-1
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS 19
MANAGEMENT'S DISCUSSION AND PLAN OF OPERATION 19
RESULTS OF OPERATIONS 21
LIQUIDITY AND CAPITAL RESOURCES 22
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE 22
DIRECTORS AND EXECUTIVE OFFICERS 23
EXECUTIVE COMPENSATION 24
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 25
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 25
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES 26
WHERE YOU CAN FIND ADDITIONAL INFORMATION 26
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO WHICH
WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL
TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE
ON THE DATE OF THIS DOCUMENT.
i
GLOSSARY OF TERMS AND ABBREVIATIONS
Within this document, the following terms and abbreviations have specific
meanings:
ASP stands for Application Service Provider, an organization that hosts
software applications on its own servers within its own facilities.
CRM stands for Customer Relationship Management, an integrated information
system that is used to schedule, plan and control the pre-sales and post-sales
activities within an organization. CRM embraces all aspects of dealing with
prospects and customers, including call centers, sales force, marketing,
technical support and field service.
C++ is an object-oriented programming language widely used to develop
enterprise and commercial applications
ERP stands for Enterprise Resource Planning, an integrated information
system that serves all departments within an enterprise. It implies the use of
packaged software rather than proprietary software written by or for one
customer.
JAVA refers to a programming language expressly designed for use in the
distributed environment of the Internet. It can be used to create complete
applications that run on a single computer or may be distributed among servers
and clients in a single network.
MYSLQ refers to a relational database management system based on based on
Structured Query Language.
PHP refers to a computer scripting language designed for producing web
pages.
POSTGRESQL is a full featured, open source database management system.
SMB stands for Small and Medium Businesses.
1
GENERAL
As used in this Prospectus, references to the "NetVentory," "Company," "we,"
"our," "ours" and "us" refer to NetVentory Solutions, Inc., unless the context
otherwise requires. In addition, references to our "financial statements" are to
our financial statements except as the context otherwise requires and any
references to "fiscal year" refers to our fiscal year ending July 31. Unless
otherwise indicated, the term "common stock" refers to shares of the Company's
common stock.
PROSPECTUS SUMMARY
The following summary highlights some of the information in this prospectus. It
may not contain all of the information that is important to you. To understand
this offering fully, you should read the entire prospectus carefully, including
the risk factors and our financial statements and the notes accompanying the
financial statements appearing elsewhere in this prospectus.
THE COMPANY
WHERE YOU CAN FIND US
Our principal executive offices are located at 8th Floor-200 South Virginia
Street, Reno, NV 89501. Our telephone number is (775) 562-0504. Our website
address is http://www.net-ventory.com.
The information on our website is not a part of this prospectus.
CORPORATE BACKGROUND
We were incorporated in the state of Nevada in February 8, 2008 under the name
NetVentory Solutions, Inc. and are engaged in providing online inventory
services to small and medium sized companies. Our goal is to offer comprehensive
inventory management and product fulfillment services to our customers. Our
target clientele will include small to medium sized business owners who demand
convenient and cost effective ways to monitor and control their company's
inventory.
In order to satisfy global demand for online inventory services, we plan to
develop a network of international and domestic resellers, and also retain a
foreign sales force that manages various call centers, which develop client
networks and contact potential customers.
As the popularity of the Internet continues to surge, we plan to capitalize on
the continually maturing marketplace for online inventory management services.
Automated inventory services are becoming an increasingly necessary tool to
reduce costs and increase productivity. From scanning the bar codes on products
stored in warehouses and storage bins, to tracking the cost of goods sold to
customers, inventory management is becoming an essential part of everyday life
for many businesses.
We believe that our company has a strategic advantage over our competition
because our customers have access to a protected local copy of their inventory
at their premises to which they can refer to in the event of a failure in
Internet connectivity. By granting our customers a local copy of their inventory
that is readily available, our customers have the ability to continue with a
project such as an inventory count (despite the lack of internet service),
without disruptions. In addition, once Internet connection is restored, the
local copy will automatically synch with the client's online inventory system,
updating any changes that may have occurred during the interruption. We believe
our unique technology will find a comfortable niche in the online inventory
system business, and will continue to refine our product and related services in
order to meet the needs of small and medium size businesses.
THE OFFERING
Securities Being Offered Up to 640,000 shares of common stock.
Offering Price The selling shareholders will sell our shares
at prevailing market prices or privately
negotiated prices.
Terms of the Offering The selling shareholders will determine when
and how they will sell the common stock
offered in this prospectus.
Termination of the Offering The offering will conclude when all of the
640,000 shares of common stock have been sold
or we, in our sole discretion, decide to
terminate the registration of the shares. We
may decide to terminate the registration if it
is no longer necessary due to the operation of
the resale provisions of Rule 144 promulgated
under the Securities Act of 1933. We also may
terminate the offering for no reason
whatsoever.
2
Risk Factors The securities offered hereby involve a high
degree of risk and should not be purchased by
investors who cannot afford the loss of their
entire investment. See "Risk Factors"
beginning on page 4.
Common Stock Issued and
Outstanding Before Offering 2,140,000 shares of our common stock are
issued and outstanding as of the date of this
prospectus. All of the common stock to be sold
under this prospectus will be sold by our
existing shareholders.
Common Stock Issued and
Outstanding After Offering 2,140,000 shares.
Use of Proceeds We will not receive any proceeds from the sale
of the common stock by the selling
shareholders.
SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA
The following table presents summary financial and other data and has been
derived from our audited financial statements for the period from inception to
July 31, 2009 and our unaudited financial statements from the period from
inception to January 31, 2010. The information below should be read in
conjunction with "Selected Historical Financial and Other Data," "Management's
Discussion and Plan of Operations" and our financial statements and the notes to
our financial statements, each of which is included in another section of this
prospectus.
July 31, January 31,
(US Dollars) 2009 2010
-------- --------
STATEMENT OF OPERATIONS DATA:
Revenues $ -- $ --
Total Operating Expenses $ 40,901 $ 50,448
-------- --------
Net (loss) $(40,901) $(50,448)
CONSOLIDATED BALANCE SHEET DATA:
Cash and Cash Equivalents $ 15,366 $ 3,437
-------- --------
Total Assets $ 24,366 $ 12,437
Total Liabilities $ 15,534 $ 15,885
-------- --------
Total Stockholders' Equity (Deficit) $ 8,832 $ (3,448)
3
RISK FACTORS
The securities offered hereby involve a substantial risk of loss. Prospective
investors should carefully consider the risks and uncertainties described below
before making an investment in our securities. The risks and uncertainties
described below are those which management currently believes may significantly
affect us.
RISKS RELATED TO OUR BUSINESS
WE INCURRED HISTORICAL LOSSES AS A RESULT, WE MAY NOT BE ABLE TO GENERATE
PROFITS, SUPPORT OUR OPERATIONS, OR ESTABLISH A RETURN ON INVESTED CAPITAL.
We incurred net losses from our inception, February 8, 2008, to our fiscal year
ended July 31, 2009 in the amount of $40,901 and from inception to our fiscal
quarter ended January 31, 2010 in the amount of $50,448. In addition, we expect
to increase our operating expenses to fund our anticipated growth. We cannot
assure you that any of our business strategies will be successful or that
significant revenues or profitability will ever be achieved or, if they are
achieved, that they can be consistently sustained or increased on a quarterly or
annual basis.
WE EXPECT OUR OPERATING LOSSES TO CONTINUE
We expect to incur increased operating expenses during the next year. The amount
of net losses and the time required for us to reach and sustain profitability
are uncertain. The likelihood of our success must be considered in light of the
problems, expenses, difficulties, and delays frequently encountered in
connection with our business, including, but not limited to the increase in
costs to be incurred for research and development, protection of our
intellectual property and the marketing and delivery of our product. There can
be no assurance that we will ever generate revenue or achieve profitability at
all or on any substantial basis.
BECAUSE WE PROVIDE A SUITE OF ON-DEMAND APPLICATIONS THAT MANY OF OUR CUSTOMERS
USE TO MANAGE THEIR CRITICAL BUSINESS PROCESSES, THE MARKET FOR OUR SERVICE MAY
DEVELOP MORE SLOWLY THAN WE EXPECT.
Our success will depend, to a large extent, on the willingness of SMBs to accept
on-demand services for applications that they view as critical to the success of
their business. Many companies have invested substantial effort and financial
resources to integrate traditional enterprise software into their businesses and
may be reluctant or unwilling to switch to a different application or to migrate
these applications to on-demand services. Other factors that may affect market
acceptance of our application include:
* the security capabilities, reliability and availability of on-demand
services;
* customer concerns with entrusting a third party to store and manage
their data, especially confidential or sensitive data;
* our ability to minimize the time and resources required to implement
our suite;
* our ability to maintain high levels of customer satisfaction;
* our ability to implement upgrades and other changes to our software
without disrupting our service;
* the level of customization or configuration we offer;
* our ability to provide rapid response time during periods of intense
activity on customer websites; and
* the price, performance and availability of competing products and
services.
The market for these services may not develop further, or it may develop more
slowly than we expect, either of which would harm our business.
OUR CUSTOMERS ARE SMALL AND MEDIUM-SIZED BUSINESSES, WHICH CAN BE CHALLENGING TO
COST-EFFECTIVELY REACH, ACQUIRE AND RETAIN.
We plan to market and sell our application suite to SMBs. To grow our revenue
quickly, we must add new customers, sell additional services to existing
customers and encourage existing customers to renew their subscriptions.
However, selling to and retaining SMBs can be more difficult than selling to and
retaining large enterprises because SMB customers:
* are more price sensitive;
* are more difficult to reach with traditional marketing campaigns;
4
* have high churn rates in part because of the nature of their
businesses;
* may lack the staffing to benefit fully from our application suite's
rich feature set;
* often require higher sales, marketing and support expenditures by
vendors that sell to them per revenue dollar; and
* are more vulnerable to negative changes in the general economic
environment that may disrupt continued business operations.
If we are unable to cost-effectively market and sell our service to our target
customers, our ability to grow our revenue quickly and become profitable will be
harmed.
OUR LIMITED OPERATING HISTORY MAKES IT DIFFICULT TO EVALUATE OUR CURRENT
BUSINESS AND FUTURE PROSPECTS, AND MAY INCREASE THE RISK OF YOUR INVESTMENT.
Our company has been in existence only since early 2008. Our limited operating
history will make it difficult to evaluate our current business and our future
prospects. We have encountered and will continue to encounter risks and
difficulties frequently experienced by growing companies in rapidly changing
industries. If we do not address these risks successfully, our business will be
harmed, which may increase the risk to an investment in our securities.
OUR BUSINESS DEPENDS SUBSTANTIALLY ON CUSTOMERS RENEWING, UPGRADING AND
EXPANDING THEIR SUBSCRIPTIONS FOR OUR SERVICES. ANY DECLINE IN OUR CUSTOMER
RENEWALS, UPGRADES AND EXPANSIONS WOULD HARM OUR FUTURE OPERATING RESULTS.
We will sell our application suite pursuant to service agreements that have a
specific term and are not automatically renewable. Our ability to grow will be
dependent in part on customers purchasing additional subscriptions after the
term of their initial subscriptions. Our customers' renewal rates may decline or
fluctuate because of several factors, including their satisfaction or
dissatisfaction with our services, the prices of our services, the prices of
services offered by our competitors or reductions in our customers' spending
levels. If our customers do not renew their subscriptions for our services,
renew on less favorable terms, or do not purchase additional functionality or
subscriptions, our revenue may grow more slowly than expected or decline and our
profitability and gross margins may be harmed.
IF OUR SECURITY MEASURES ARE BREACHED AND UNAUTHORIZED ACCESS IS OBTAINED TO A
CUSTOMER'S DATA, WE MAY INCUR SIGNIFICANT LIABILITIES, OUR SERVICE MAY BE
PERCEIVED AS NOT BEING SECURE AND CUSTOMERS MAY CURTAIL OR STOP USING OUR SUITE.
The services we plan to offer will involve the storage of large amounts of our
customers' sensitive and proprietary information. If our security measures are
breached as a result of third-party action, employee error, malfeasance or
otherwise, and someone obtains unauthorized access to our customers' data, we
could incur significant liability to our customers and to individuals or
businesses whose information was being stored by our customers, our business may
suffer and our reputation will be damaged. Because techniques used to obtain
unauthorized access to, or to sabotage, systems change frequently and generally
are not recognized until launched against a target, we may be unable to
anticipate these techniques or to implement adequate preventive measures. If an
actual or perceived breach of our security occurs, the market perception of the
effectiveness of our security measures could be harmed and we could lose sales
and customers. We do not have, and are likely not to have for the foreseeable
future, insurance that will adequately cover any liability to a customer under
these circumstances.
THE MARKET FOR OUR SERVICES IS INTENSELY COMPETITIVE, AND IF WE DO NOT COMPETE
EFFECTIVELY, OUR OPERATING RESULTS MAY BE HARMED.
The markets for online inventory solutions are intensely competitive and rapidly
changing with relatively low barriers to entry. With the introduction of new
technologies and market entrants, we expect competition to intensify in the
future. In addition, pricing pressures and increased competition generally could
result in reduced sales, reduced margins or the failure of our service to
achieve or maintain more widespread market acceptance. We expect to compete to
sell our application suite against existing systems that our potential customers
have already made significant expenditures to install. Competition in our market
is based principally upon service breadth and functionality; service
performance, security and reliability; ability to tailor and customize services
for a specific company, vertical or industry; ease of use of the service; speed
and ease of deployment, integration and configuration; total cost of ownership,
including price and implementation and support costs; professional services
implementation; and financial resources of the vendor.
Many of our actual and potential competitors enjoy substantial competitive
advantages over us, such as greater name recognition, longer operating
histories, more varied products and services and larger marketing budgets, as
well as substantially greater financial, technical and other resources. In
addition, many of our competitors have established marketing relationships and
access to larger customer bases, and have major distribution agreements with
consultants, system integrators and resellers. If we are not able to compete
effectively, our operating results will be harmed.
5
THE MARKET FOR OUR SERVICES IS PRICE SENSITIVE, AND IF THE PRICES WE CHARGE FOR
OUR SERVICES ARE UNACCEPTABLE TO OUR CUSTOMERS, OUR OPERATING RESULTS WILL
SUFFER.
Many of our potential customers are price sensitive, and we have limited
experience with respect to determining the appropriate prices for our services.
As the market for our services matures, or as new competitors introduce new
products or services that compete with ours, we may be unable to renew our
agreements with existing customers or attract new customers at the same price or
based on the same pricing model that we may have previously used. As a result,
it is possible that competitive dynamics in our market may require us to change
our pricing model or reduce our prices, which could negatively impact our
revenue, gross margin and operating results.
IF WE DO NOT EFFECTIVELY BUILD AND TRAIN OUR DIRECT SALES FORCE AND OUR SERVICES
AND SUPPORT TEAMS, OUR FUTURE OPERATING RESULTS WILL SUFFER.
We plan to build our direct sales force and our services and support teams both
domestically and internationally to increase our customer base and revenue. We
believe that there is significant competition for direct sales, service and
support personnel with the skills and technical knowledge that we require. Our
ability to achieve significant revenue growth will depend, in large part, on our
success in recruiting, training and retaining sufficient numbers of personnel to
support our growth. New hires require significant training and, in most cases,
take significant time before they achieve full productivity. Our recent hires
and planned hires may not become as productive as we expect, and we may be
unable to hire or retain sufficient numbers of qualified individuals in the
markets where we do business. If our efforts to build a direct sales force are
not successful or do not generate a corresponding increase in revenue, our
business will be harmed.
IF WE ARE UNABLE TO DEVELOP NEW SERVICES OR SELL OUR SERVICES INTO NEW MARKETS,
OUR REVENUE WILL NOT GROW AS EXPECTED.
Our ability to attract new customers and increase revenue from existing
customers will depend in large part on our ability to enhance and improve our
existing application suite and to introduce new services and sell into new
markets. The success of any enhancement or new service depends on several
factors, including the timely completion, introduction and market acceptance of
the enhancement or service. Any new service we develop or acquire may not be
introduced in a timely or cost-effective manner and may not achieve the broad
market acceptance necessary to generate significant revenue. Any new markets,
into which we attempt to sell our application, including new vertical markets
and new countries or regions, may not be receptive. If we are unable to
successfully develop or acquire new services, enhance our existing services to
meet customer requirements or sell our services into new markets, our revenue
will not grow as expected.
BECAUSE WE PLAN TO DEVELOP A GLOBAL ORGANIZATION AND OUR LONG-TERM SUCCESS
DEPENDS, IN PART, ON OUR ABILITY TO EXPAND THE SALES OF OUR SERVICES TO
CUSTOMERS LOCATED OUTSIDE OF THE UNITED STATES, OUR BUSINESS IS SUSCEPTIBLE TO
RISKS ASSOCIATED WITH INTERNATIONAL SALES AND OPERATIONS.
We currently maintain offices outside of the United States and plan to have
sales personnel or independent consultants in several countries throughout the
world. Managing a global organization will be difficult, time consuming and
expensive. In addition, conducting international operations subjects us to risks
that not generally faced in the United States. These risks include:
* localization of our services, including translation into foreign
languages and adaptation for local practices and regulatory
requirements;
* lack of familiarity with and unexpected changes in foreign regulatory
requirements;
* longer accounts receivable payment cycles and difficulties in
collecting accounts; receivable;
* difficulties in managing and staffing international operations;
* fluctuations in currency exchange rates;
* potentially adverse tax consequences, including the complexities of
foreign value added tax systems and restrictions on the repatriation
of earnings;
* dependence on certain third parties, including channel partners with
whom we do not have extensive experience;
* the burdens of complying with a wide variety of foreign laws and legal
standards;
* increased financial accounting and reporting burdens and complexities;
* political, social and economic instability abroad, terrorist related
risks and security concerns in general; and
6
* reduced or varied protection for intellectual property rights in some
countries.
Operating in international markets also requires significant management
attention and financial resources. The investment and additional resources
required to establish operations and manage growth in other countries may not
produce desired levels of revenue or profitability.
ASSERTIONS BY A THIRD PARTY THAT WE INFRINGE ITS INTELLECTUAL PROPERTY, WHETHER
SUCCESSFUL OR NOT, COULD SUBJECT US TO COSTLY AND TIME-CONSUMING LITIGATION OR
EXPENSIVE LICENSES.
The software and technology industries are characterized by the existence of a
large number of patents, copyrights, trademarks and trade secrets and by
frequent litigation based on allegations of infringement or other violations of
intellectual property rights. As we face increasing competition and become a
publicly traded company, the possibility of intellectual property rights claims
against us may grow. Our technologies may not be able to withstand any
third-party claims or rights against their use. Additionally, although we have
licensed from other parties proprietary technology covered by patents, we cannot
be certain that any such patents will not be challenged, invalidated or
circumvented. Furthermore, many of our service agreements require us to
indemnify our customers for certain third-party intellectual property
infringement claims, which could increase our costs as a result of defending
such claims and may require that we pay damages if there were an adverse ruling
related to any such claims. These types of claims could harm our relationships
with our customers, may deter future customers from subscribing to our services
or could expose us to litigation for these claims. Even if we are not a party to
any litigation between a customer and a third party, an adverse outcome in any
such litigation could make it more difficult for us to defend our intellectual
property in any subsequent litigation in which we are a named party.
Any intellectual property rights claim against us or our customers, with or
without merit, could be time-consuming, expensive to litigate or settle and
could divert management attention and financial resources. An adverse
determination also could prevent us from offering our suite to our customers and
may require that we procure or develop substitute services that do not infringe.
For any intellectual property rights claim against us or our customers, we may
have to pay damages or stop using technology found to be in violation of a third
party's rights. We may have to seek a license for the technology, which may not
be available on reasonable terms, if at all, may significantly increase our
operating expenses or may require us to restrict our business activities in one
or more respects. As a result, we may also be required to develop alternative
non-infringing technology, which could require significant effort and expense.
MATERIAL DEFECTS OR ERRORS IN THE SOFTWARE WE USE TO DELIVER OUR SERVICES COULD
HARM OUR REPUTATION, MAY CAUSE US TO BECOME LIABLE TO OUR CUSTOMERS, MAY RESULT
IN THE LOSS OF EXISTING CUSTOMERS, OR MAY RESULT IN A SIGNIFICANT COSTS TO US
AND IMPAIR OUR ABILITY TO SELL OUR SERVICES.
The software applications underlying our services are inherently complex and may
contain material defects or errors, particularly when first introduced or when
new versions or enhancements are released. We have from time to time found
defects in our service, and new errors in our existing service may be detected
in the future. Any defects that cause interruptions to the availability of our
services could result in:
* a reduction in sales or delay in market acceptance of our services;
* sales credits or refunds to our customers;
* loss of existing customers and difficulty in attracting new customers;
* diversion of development resources;
* harm to our reputation; and
* increased warranty and insurance costs.
Since customers that will use our suite will do so to manage critical aspects of
their business, any errors, defects, disruptions in service or other performance
problems with our suite, whether in connection with the day-to-day operation of
our suite, upgrades or otherwise, could damage our customers' businesses. Any
errors, defects, disruptions in service or other performance related issues
regarding our suite may result in customers electing to terminate or to not
renew any existing subscriptions, or delay or withhold payment to us which may
result in a significant loss for the Company. Customers may also make warranty
claims against us, which could result in an increase in our provision for
doubtful accounts, an increase in collection cycles for accounts receivable or
costly litigation. We do not maintain and do not expect to maintain in the
foreseeable future, insurance to adequately cover these risks.
7
GOVERNMENT REGULATION OF THE INTERNET AND E-COMMERCE IS EVOLVING, AND
UNFAVORABLE CHANGES OR OUR FAILURE TO COMPLY WITH REGULATIONS COULD HARM OUR
BUSINESS AND OPERATING RESULTS.
As Internet commerce continues to evolve, increasing regulation by federal,
state or foreign agencies may become more likely. For example, the need for
increased regulation in the area of data privacy, and laws and regulations
applying to the solicitation, collection, processing or use of personal or
consumer information has been suggested by a number of politicians and if
enacted could affect our customers' ability to use and share data, potentially
reducing demand for ERP, CRM and e-commerce solutions and restricting our
ability to store, process and share our customers' data. Any regulation imposing
greater fees for Internet use or restricting information exchange over the
Internet could result in a decline in the use of the Internet and the viability
of Internet-based services, which could harm our business and operating results.
WE RELY ON OUR MANAGEMENT TEAM AND NEED ADDITIONAL PERSONNEL TO GROW OUR
BUSINESS, AND THE LOSS OF ONE OR MORE KEY EMPLOYEES OR OUR INABILITY TO ATTRACT
AND RETAIN QUALIFIED PERSONNEL COULD HARM OUR BUSINESS.
Our success and future growth depends to a significant degree on the skills and
continued services of our management team, especially Ronald C. Dela Cruz, our
President. Our future success also depends on our ability to attract, retain and
motivate highly skilled technical, managerial, sales, marketing and service and
support personnel, including members of our management team. Competition for
sales, marketing and technology development personnel is particularly intense in
the software and technology industries. As a result, we may be unable to
successfully attract or retain qualified personnel. Our inability to attract and
retain the necessary personnel could harm our business. We have no employment
agreement or insurance policy insuring the life of our president and thus we are
at risk should he become incapacitated, die, or otherwise voluntarily leave our
employ.
RISKS RELATING TO OUR COMMON STOCK
BECAUSE OUR DIRECTORS AND OFFICERS OWN 70% OF OUR OUTSTANDING COMMON STOCK, THEY
CAN EXERT SIGNIFICANT INFLUENCE OVER CORPORATE DECISIONS THAT MAY BE
DISADVANTAGEOUS TO MINORITY SHAREHOLDERS.
Our directors and officer collectively own approximately 70% of the outstanding
shares of our common stock. Accordingly, they can exert significant influence in
determining the outcome of all corporate transactions or other matters,
including the election of directors, mergers, consolidations, the sale of all or
substantially all of our assets, and a change in control. The interests of our
directors and officers may differ from the interests of our other shareholders
and thus result in corporate decisions that are disadvantageous to our other
shareholders.
OUR COMMON STOCK IS QUOTED ON THE OVER THE COUNTER BULLETIN BOARD BUT HAS NOT
TRADED, AND THERE IS NO ASSURANCE THAT A VIABLE, LIQUID MARKET WITH LOW
VOLATILITY WILL EVER DEVELOP.
Our common stock is quoted on the Over the Counter Bulletin Board (the "OTC
Bulletin Board") under the symbol "NTVS," however, our shares have not yet
traded. A viable public market has not and may never materialize. Even if we are
successful in developing a public market, there may not be enough liquidity in
such market to enable shareholders to sell their stock. If a viable public
market for our common stock does not develop, investors may not be able to
re-sell the shares of our common stock that they have purchased, rendering their
shares effectively worthless and resulting in a complete loss of their
investment.
In addition, our common stock is unlikely to be followed by any market analysts,
and there may be few institutions acting as market makers for the common stock.
Either of these factors could adversely affect the liquidity and trading price
of our common stock. Until our common stock is fully distributed and an orderly
market develops in our common stock, if ever, the price at which it trades is
likely to fluctuate significantly. Prices for our common stock will be
determined in the marketplace and may be influenced by many factors, including
the depth and liquidity of the market for shares of our common stock,
developments affecting our business, including the impact of the factors
referred to elsewhere in these Risk Factors, investor perception of the Company,
and general economic and market conditions. No assurances can be given that an
orderly or liquid market will ever develop for the shares of our common stock.
BECAUSE WE ARE SUBJECT TO "PENNY STOCK" RULES, THE LEVEL OF TRADING ACTIVITY IN
OUR STOCK MAY BE REDUCED.
Broker-dealer practices in connection with transactions in "penny stocks" are
regulated by penny stock rules adopted by the Securities and Exchange
Commission. Penny stocks generally are equity securities with a price of less
than $5.00 (other than securities registered on some national securities
exchanges or quoted on NASDAQ). The penny stock rules require a broker-dealer,
prior to a transaction in a penny stock not otherwise exempt from the rules, to
deliver a standardized risk disclosure document that provides information about
penny stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction, and, if the broker-dealer is the sole market
maker, the broker-dealer must disclose this fact and the broker-dealer's
presumed control over the market, and monthly account statements showing the
market value of each penny stock held in the customer's account. In addition,
broker-dealers who sell these securities to persons other than established
8
customers and "accredited investors" must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. Consequently, these
requirements may have the effect of reducing the level of trading activity, if
any, in the secondary market for a security subject to the penny stock rules,
and investors in our common stock may find it difficult to sell their shares.
WE MAY BE EXPOSED TO POTENTIAL RISKS RESULTING FROM REQUIREMENTS UNDER SECTION
404 OF THE SARBANES-OXLEY ACT OF 2002.
Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we were required,
beginning with our fiscal year ending July 31, 2009, to include in our annual
report our assessment of the effectiveness of our internal control over
financial reporting as of the end of fiscal 2009. Furthermore, our independent
registered public accounting firm will be required to attest to whether our
assessment of the effectiveness of our internal control over financial reporting
is fairly stated in all material respects and separately report on whether it
believes we have maintained, in all material respects, effective internal
control over financial reporting. We have incurred and expect to incur
additional expenses and diversion of management's time as a result of performing
the system and process evaluation, testing and remediation required in order to
comply with the management certification and auditor attestation requirements.
Further, during the course of our testing, we identified deficiencies that
existed in the design or option of our internal control over financial reporting
that may be considered to be material weaknesses. If we fail to remediate these
deficiencies, or fail to maintain the adequacy of our internal controls, as such
standards are modified, supplemented or amended from time to time, we may not be
able to ensure that we can conclude on an ongoing basis that we have effective
internal controls over financial reporting in accordance with Section 404 of the
Sarbanes-Oxley Act. Moreover, effective internal controls, particularly those
related to revenue recognition, are necessary for us to produce reliable
financial reports and are important to help prevent financial fraud. If we
cannot provide reliable financial reports or prevent fraud, our business and
operating results could be harmed, investors could lose confidence in our
reported financial information, and the trading price of our common stock, if a
market ever develops, could drop significantly.
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
THIS PROSPECTUS CONTAINS "FORWARD-LOOKING STATEMENTS" AND INFORMATION RELATING
TO OUR BUSINESS THAT ARE BASED ON OUR BELIEFS AS WELL AS ASSUMPTIONS MADE BY US
OR BASED UPON INFORMATION CURRENTLY AVAILABLE TO US. WHEN USED IN THIS
PROSPECTUS, THE WORDS "ANTICIPATE," "BELIEVE," "ESTIMATE," "EXPECT," "INTEND,"
"MAY," "PLAN," "PROJECT," "SHOULD" AND SIMILAR EXPRESSIONS ARE INTENDED TO
IDENTIFY FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKING STATEMENTS INCLUDE,
BUT ARE NOT LIMITED TO, STATEMENTS RELATING TO OUR PERFORMANCE IN "BUSINESS" AND
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS." THESE STATEMENTS REFLECT OUR CURRENT VIEWS AND ASSUMPTIONS WITH
RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES. ACTUAL AND
FUTURE RESULTS AND TRENDS COULD DIFFER MATERIALLY FROM THOSE SET FORTH IN SUCH
STATEMENTS DUE TO VARIOUS FACTORS. SUCH FACTORS INCLUDE, AMONG OTHERS: GENERAL
ECONOMIC AND BUSINESS CONDITIONS; INDUSTRY CAPACITY; INDUSTRY TRENDS;
COMPETITION; CHANGES IN BUSINESS STRATEGY OR DEVELOPMENT PLANS; PROJECT
PERFORMANCE; AVAILABILITY, TERMS, AND DEPLOYMENT OF CAPITAL; AND AVAILABILITY OF
QUALIFIED PERSONNEL. THESE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE
OF THIS PROSPECTUS. SUBJECT AT ALL TIMES TO RELEVANT SECURITIES LAW DISCLOSURE
REQUIREMENTS, WE EXPRESSLY DISCLAIM ANY OBLIGATION OR UNDERTAKING TO DISSEMINATE
ANY UPDATE OR REVISIONS TO ANY FORWARD-LOOKING STATEMENT CONTAINED HEREIN TO
REFLECT ANY CHANGE IN OUR EXPECTATIONS WITH REGARD THERETO OR ANY CHANGES IN
EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH ANY SUCH STATEMENT IS BASED. IN
ADDITION, WE CANNOT ASSESS THE IMPACT OF EACH FACTOR ON OUR BUSINESS OR THE
EXTENT TO WHICH ANY FACTOR, OR COMBINATION OF FACTORS, MAY CAUSE ACTUAL RESULTS
TO DIFFER MATERIALLY FROM THOSE CONTAINED IN ANY FORWARD-LOOKING STATEMENTS.
TAX CONSIDERATIONS
We are not providing any tax advice as to the acquisition, holding or
disposition of the securities offered herein. In making an investment decision,
investors are strongly encouraged to consult their own tax advisor to determine
the U.S. federal, state and any applicable foreign tax consequences relating to
their investment in our securities.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock offered
through this prospectus by the selling shareholders.
DETERMINATION OF OFFERING PRICE
The selling shareholders will sell our shares at prevailing market prices or
privately negotiated prices.
Since becoming eligible for quotation on the OTC Bulletin Board, there have been
no reported trades of our common stock.
9
DILUTION
The common stock to be sold by the selling shareholders in this Offering is
common stock that is currently issued and outstanding. Accordingly, there will
be no dilution to our existing shareholders.
SHARES ELIGIBLE FOR RESALE
The shares of our common stock sold by the selling shareholder in this offering
will generally be freely transferable without restriction or further
registration under the Securities Act, except that any shares of our common
stock held by an "affiliate" of ours may not be resold publicly except in
compliance with the registration requirements of the Securities Act or under an
exemption under Rule 144 or otherwise. Rule 144 generally provides that a person
who is an affiliate of ours, or has been an affiliate of ours at any time during
the three months preceding a sale, who has beneficially owned restricted shares
of common stock for at least six months would be entitled to sell their
securities provided that they sell only a number of securities that does not
exceed the greater of either of the following:
* 1.0% of the number of shares of our common stock then outstanding; and
* if the shares of common stock are listed on a national securities
exchange, the average weekly trading volume of the shares during the
four calendar weeks preceding the filing of a notice on Form 144 with
respect to the sale.
Sales under Rule 144 are also limited by manner of sale provisions and notice
requirements and to the availability of current public information about us.
Rule 144 also provides that a person who is not deemed to have been an affiliate
of ours at any time during the three months preceding a sale, and who has for at
least six months beneficially owned shares of our common stock that are
restricted securities, will be entitled to freely sell such shares of our common
stock subject only to the availability of current public information regarding
us. A person who is not deemed to have been an affiliate of ours at any time
during the three months preceding a sale, and who has beneficially owned for at
least one year shares of our common stock that are restricted securities, will
be entitled to freely sell such shares of our common stock under Rule 144
without regard to the current public information requirements of Rule 144.
SELLING SHAREHOLDERS
The table below sets forth certain information regarding the beneficial
ownership of the common stock by the selling shareholders and as adjusted to
give effect to the sale of the shares offered in this prospectus. The holders
listed below all acquired or were granted the shares in the ordinary course of
business. They were issued either as part of our financings or for services
provided to the Company either financially or otherwise.
Ownership after Offering
----------------------------------
Number of Percentage of
Shares to Shares to Be Shares to Be
be Sold Beneficially Beneficially
Shares in this Owned after Owned after
Name(1) Owned Offering the Offering the Offering
------- ----- -------- ------------ ------------
Rommel Navida 20,000 20,000 0 --
0857 MRB 8 PH Pilot Drive Brgy
Commonwealth, Quezon City
Philippines
Samuel Centeno 20,000 20,000 0 --
3 Road 5 Manggahan St
Tanong, Marikina City
Philippines
Eimerson Santos 20,000 20,000 0 --
6 Anonas St. Brgy. San Juan
Taytay, Rizal
Philippines
Ferdinand Gatapia 20,000 20,000 0 --
75 Rosario St. Brgy. San Juan,
Taytay, Rizal
Philippines
10
Ownership after Offering
----------------------------------
Number of Percentage of
Shares to Shares to Be Shares to Be
be Sold Beneficially Beneficially
Shares in this Owned after Owned after
Name(1) Owned Offering the Offering the Offering
------- ----- -------- ------------ ------------
Rosabel Carreos 20,000 20,000 0 --
124 Cinco De Junio St
Pasay City
Philippines
Mariequeta Domingo 20,000 20,000 0 --
39 Col. S. Cruz St. Balite
Rodriguez Rizal
Philippines
Candelaria Carreon 20,000 20,000 0 --
745 F. Gatmaitan St
Tondo, Manila
Philippines
Gloria Carreon 20,000 20,000 0 --
745 F. Gatmaitan St
Tondo, Manila
Philippines
Dolores Negrite 20,000 20,000 0 --
2482 A. Crisolita St
San Andres Bukid, Manila
Philippines
Gerald Aligada 20,000 20,000 0 --
606 G, Manalo St
Pateros, Metro Manila
Philippines
Maria Teresa Garcia 20,000 20,000 0 --
126 Brgy. Lucap
Alaminos, Pangasinan
Philippines
Winelyn Binas 20,000 20,000 0 --
Saint Jupiter St. Wilfareville Cmpd
Bgy Addistion, Mandaluyong City
Philippines
Shiela Escorel 20,000 20,000 0 --
2486 Arellano St
Sta. Ana, Manila
Philippines
Maria Bituin Preclaro 20,000 20,000 0 --
44 Matatag St
Pinyahan, Quezon City
Philippines
Eleanor Gonzales 20,000 20,000 0 --
301D Ampil Extension
Sta Mesa, Manila
Philippines
Rollicys Balasbas 20,000 20,000 0 --
4210 Dunlangan San Luis
Batangas City
Philippines
Sherrymer De Lara 20,000 20,000 0 --
2529 Ony St. PH 4 B5-F
San Andres Bukid, Manila
Philippines
Rowena Cruz 20,000 20,000 0 --
2692 Arellano St
Sta. Ana, Manila
Philippines
Vicente Antonio 20,000 20,000 0 --
E. Rodriguez St
San Juan, Morong Rizal
Philippines
11
Ownership after Offering
----------------------------------
Number of Percentage of
Shares to Shares to Be Shares to Be
be Sold Beneficially Beneficially
Shares in this Owned after Owned after
Name(1) Owned Offering the Offering the Offering
------- ----- -------- ------------ ------------
Gildebrando Dolar 20,000 20,000 0 --
1227 Santillan St
BGY Pio Del Pilar, Makati City
Philippines
Guillerma Cortez 20,000 20,000 0 --
598 Pambuan
Gapan City
Philippines
Lucena Cabeguin 20,000 20,000 0 --
60 E Mateo St
Barangay Sta. Ana, Taytay, Rizal
Philippines
Susan Alberto 20,000 20,000 0 --
56 E. Mateo St
Sta Ana, Taytay, Rizal
Philippines
Fernando Isidro 20,000 20,000 0 --
49 MA. Clara St. BGY. Sta Ana
Taytay Riza,
Philippines
Alvin Calderon 20,000 20,000 0 --
B34 Floodway
BGY San Juan, Taytay, Rizal
Philippines
Julieto Austria 20,000 20,000 0 --
02317 B34 Bangus St
Floodway, Taytay, Rizal
Philippines
Fe Marin 20,000 20,000 0 --
609 GSIS ST
BGY Malanday, San Mateo, Rizal
Philippines
Elizabeth Cristobal 20,000 20,000 0 --
622 GSIS St
BGY. Malanday, San Mateo, Rizal
Philippines
Joselito Busano 20,000 20,000 0 --
STA. Cecilia St
Ibayo Maly, San Mateo, Rizal
Philippines
Noel Tagarino 20,000 20,000 0 --
69 Mabini St
Burgos Montalban, Rizal
Philippines
Dominador Sarmiento
L17 B10 Opal St 20,000 20,000 0 --
Goldriverville Subd. Burgos
Rodriguez, Rizal,
Philippines
Raymund Hescil Baga 20,000 20,000 0 --
B34 L28 Moonwalk Subd
Talon Singko, Las Pinas City
Philippines
----------
(1) Unless otherwise indicated, the selling shareholders have sole voting and
investment power with respect to their shares of common stock. The
inclusion of any shares in this table does not constitute an admission of
beneficial ownership for the selling shareholders.
To our knowledge, none of the selling shareholders:
a. has had a material relationship with the Company (other than as a
shareholder) at any time within the past three years; or
b. has ever been an officer or director of the Company, except as noted
above; or
12
c. are related to our sole officer and director, except as noted above.
In recognition of the fact that the selling shareholders may wish to be legally
permitted to sell their shares of common stock when they deem appropriate, we
agreed with the selling shareholders to file with the SEC, under the Securities
Act, a registration statement on Form S-1, of which this prospectus is a part,
with respect to the resale of the shares of common stock, and have agreed to
prepare and file such amendments and supplements to the registration statement
as may be necessary to keep the registration statement in effect until the
shares of common stock are no longer required to be registered for the sale
thereof by the selling shareholders. In accordance with the Securities Act,
certain of the selling shareholders may not use the shares of our common stock
sold under this registration statement to cover short positions taken since this
registration statement was filed.
PLAN OF DISTRIBUTION
The selling shareholders may sell some or all of their common stock in one or
more transactions, including block transactions.
Our common stock is quoted on the Over the Counter Bulletin Board (the "OTC
Bulletin Board") under the symbol "NTVS." Now that our shares are quoted on the
OTC Bulletin Board, the selling shareholders may sell their shares directly into
such market.
The selling shareholders will sell our shares at prevailing market prices or
privately negotiated prices.
We cannot predict the price at which shares may be sold or whether the common
stock will ever trade on any market. The shares may be sold by the selling
shareholders, as the case may be, from time to time, in one or more
transactions. We do not intend to enter into any arrangements with any
securities dealers concerning solicitation of offers to purchase the shares.
The shares may also be sold in compliance with Rule 144 of the Securities Act.
The selling shareholders may also sell their shares directly to market makers
acting as principals or brokers or dealers, who may act as agent or acquire the
common stock as a principal. Any broker or dealer participating in such
transactions as agent may receive a commission from the selling shareholders, or
if they act as agent for the purchaser of such common stock, from such
purchaser. The selling shareholders will likely pay the usual and customary
brokerage fees for such services. Brokers or dealers may agree with the selling
shareholders to sell a specified number of shares at a stipulated price per
share and, to the extent such broker or dealer is unable to do so acting as
agent for the selling shareholders, to purchase, as principal, any unsold shares
at the price required to fulfill the respective broker's or dealer's commitment
to the selling shareholders. Brokers or dealers who acquire shares as principals
may thereafter resell such shares from time to time in transactions in a market
or on an exchange, in negotiated transactions or otherwise, at market prices
prevailing at the time of sale or at negotiated prices, and in connection with
such re-sales may pay or receive commissions to or from the purchasers of such
shares. These transactions may involve cross and block transactions that may
involve sales to and through other brokers or dealers. If applicable, the
selling shareholders may distribute shares to one or more of their partners who
are unaffiliated with us. Such partners may, in turn, distribute such shares as
described above. We can provide no assurance that all or any of the common stock
offered will be sold by the selling shareholders.
We are bearing all costs relating to the registration of the common stock. The
selling shareholders, however, will pay any commissions or other fees payable to
brokers or dealers in connection with any sale of the common stock.
The selling shareholders must comply with the requirements of the Securities Act
of 1933 and the Securities Exchange Act of 1934 in the offer and sale of the
common stock. In particular, during such times as the selling shareholders may
be deemed to be engaged in a distribution of the common stock, and therefore be
considered to be an underwriter, they must comply with applicable law and we
have informed them that they may not, among other things:
1. engage in any stabilization activities in connection with the shares;
2. effect any sale or distribution of the shares until after the
prospectus shall have been appropriately amended or supplemented, if
required, to describe the terms of the sale or distribution; and
3. bid for or purchase any of the shares or rights to acquire the shares
or attempt to induce any person to purchase any of the shares or
rights to acquire the shares, other than as permitted under the
Securities Exchange Act of 1934.
13
DESCRIPTION OF SECURITIES
GENERAL
Our total authorized capital stock consists of 100,000,000 shares of common
stock, par value $0.001 per share.
COMMON STOCK
The holders of common stock are entitled to one vote for each share held of
record on all matters submitted to a vote of stockholders. Holders of common
stock are entitled to share ratably in dividends, as may be declared by our
Board of Directors out of funds legally available therefore. In the event we are
liquidated, dissolved or wound up, holders of the common stock shall be entitled
to share ratably in all assets remaining, if any, after payment of liabilities,
subject to the rights of the holders of preferred stock. Holders of common stock
have no preemptive rights and have no rights to convert their shares of common
stock into any other securities.
We are authorized to issue up to 100,000,000 shares of common stock, par value
$0.001 per share. As of each of July 31, 2009 and March 9, 2010, there are
2,140,000 common shares outstanding.
PREFERRED STOCK
We do not have an authorized class of preferred stock.
WARRANTS
We have not issued and do not have outstanding any warrants to purchase shares
of our common stock.
OPTIONS
We have not issued and do not have outstanding any options to purchase shares of
our common stock.
CONVERTIBLE SECURITIES
We have not issued and do not have outstanding any securities convertible into
shares of our common stock or any rights convertible or exchangeable into shares
of our common stock.
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus as having prepared or certified
any part of this prospectus or having given an opinion upon the validity of the
securities being registered or upon other legal matters in connection with the
registration or offering of the common stock was employed on a contingency
basis, or had, or is to receive, in connection with the offering, a substantial
interest, direct or indirect, in the registrant. Nor was any such person
connected with the registrant as a promoter, managing or principal underwriter,
voting trustee, director, officer, or employee.
LEGAL REPRESENTATION
The validity of the issuance of the common stock offered hereby will be passed
upon for us by Gersten Savage LLP, at 600 Lexington Avenue, New York, New York
10022.
EXPERTS
The financial statements included in this prospectus and the registration
statement have been audited by Maddox Ungar Silberstein, PLLC, now known as
Silberstein Ungar, PLLC, to the extent and for the periods set forth in their
report appearing elsewhere in this document and in the registration statement
filed with the SEC, and are included in reliance upon such report given upon the
authority of said firm as experts in auditing and accounting.
TRANSFER AGENT
The transfer agent and registrar for our common stock is Island Stock Transfer,
100 2nd Ave S 705S, St Petersburg FL 33701. Their telephone number is (727)
289-0010.
14
DESCRIPTION OF BUSINESS
GENERAL
We were incorporated in the state of Nevada in February 8, 2008 under the name
NetVentory Solutions, Inc. and are engaged in providing online inventory
services to small and medium sized companies. Our goal is to offer comprehensive
inventory management and product fulfillment services to our customers. Our
target clientele will include small to medium sized business owners who demand
convenient and cost effective ways to monitor and control their company's
inventory.
In order to satisfy global demand for online inventory services, we plan to
develop a network of international and domestic resellers, and also retain a
foreign sales force that manages various call centers, which develop client
networks and contact potential customers.
As the popularity of the Internet continues to surge, we plan to capitalize on
the continually maturing marketplace for online inventory management services.
Automated inventory services are becoming an increasingly necessary tool to
reduce costs and increase productivity. From scanning the bar codes on products
stored in warehouses and storage bins, to tracking the cost of goods sold to
customers, inventory management is becoming an essential part of everyday life
for many businesses.
We believe that our company has a strategic advantage over our competition
because our customers have access to a protected local copy of their inventory
at their premises to which they can refer to in the event of a failure in
Internet connectivity. By granting our customers a local copy of their inventory
that is readily available, our customers have the ability to continue with a
project such as an inventory count (despite the lack of internet service),
without disruptions. In addition, once Internet connection is restored, the
local copy will automatically synch with the client's online inventory system,
updating any changes that may have occurred during the interruption. We believe
our unique technology will find a comfortable niche in the online inventory
system business, and will continue to refine our product and related services in
order to meet the needs of small and medium size businesses.
PRODUCTION
Registered subscribers will be able to log into our web site using the access
codes they set up during the registration process. After entering their user
name and password the person will be redirected to a designated secure folder
that contains their customized inventory management system. The infrastructure
of the web site will allow a subscriber to have multiple users online
simultaneously with no limitations on the number of hours of use. The
subscriber's staff will be able to access the same or different elements of
their online inventory management system at the same time if they like. An
access code hierarchy will be available to allow an administrator from the
subscriber firm, to limit or restrict the rights of users within their own
group. In this way sensitive information will be restricted to predetermined
members of the subscriber group.
A prominent feature of our online inventory management system will be to the
ease of access to a client's information. We plan to design an online system
that will be able to harness the growing ubiquity of Internet access. The
portability of the user name and password will allow subscribers to access our
company's web site from anywhere that they have Internet access. Our subscribers
are able to access the inventory via any web-compliant browser on a PC, Laptop
or a PDA.
Our product will enable our clients to manage their inventory and related
logistics. For example, when a shipment of materials arrives at the loading dock
of a client company, the client's staff person can log into the site and enter
the incoming items by product description, quantity and include notes such as
damaged goods for return. The entry will immediately update the existing
inventory for the goods already on hand, change the re-order status and advise
the production department that the goods have been received and are now
available. In another example, a client's sales representative that is visiting
a customer at the customer's office and needs to check the status of a customer
order, can check from a remote location to see if an item the customer wants is
in stock or to modify an existing order that has not yet shipped. The sales rep
will be able to use a wireless device to access the Internet, log in and
complete any one of these or other tasks thereby help to increase the level of
service the sales rep can give to the customer.
Our online inventory management services will feature a relational database that
will be developed using the open source MYSQL, a relational database management
system, and the PhP programming language, which is a computer scripting language
designed for producing web pages. By using these software development tools we
will be able to keep our costs down and still produce a high quality product.
The customer may opt for a local copy of their inventory hosted on a server at
their premises. If the Internet fails, the local copy is still available for the
customer to use. When the problem is remedied, the local copy will synch with
the online inventory system. This option will be available at an additional fee.
15
SALES AND MARKETING STRATEGY
The marketing expense will be directed at developing an international and
domestic reseller network. To accomplish this we plan to outsource the task to
an offshore call center. We anticipate spending 75% of the marketing budget in
this manner. The remaining 25% will go towards an online advertising campaign
using the Google Adwords cost-per-click advertising program. Our online ads will
try to drive traffic to our web site.
COMPETITION
The competition to provide customers with online inventory management systems
exists in companies that appear to be at various stages of development and
growth. In the section below we highlight some of the firms that have a presence
on the internet already and are currently marketing their versions of this type
of service.
We believe that there are several categories of software companies offering
online inventory management systems. We have divided our industry segment and
competition into two distinct categories: one where the software company
includes inventory management as part of the larger software product offering;
and the second where the software company specializes in offering this type of
service. Our firm will be in the second category as an inventory management
system specialist.
There are a number of firms that already offer various types of inventory
management services through their web sites. No one company appears to have been
able to establish a dominant position and become the market leader. When we
consider the growth of the internet and the suitability of inventory management
systems to relational database structures we feel that we will be coming to a
market that remains fractured and offers potential for long-term success.
None of these solutions appear to offer the customer the ability to have a local
copy of their inventory on an on-site server. If the customer loses access to
the internet, it is likely that the company will not be able to fulfill orders -
resulting in a loss of business. In addition, there is a significant loss of
productivity. Our system offers this functionality as an add-on service and we
believe that this is a key differentiator between our service and those of our
competition.
EMPLOYEES
As of the date of this Prospectus, we do not have any employees.
RESEARCH AND DEVELOPMENT EXPENDITURES
We anticipate research and development expenditures to range from $10,000 to
$15,000 during fiscal 2010.
SUBSIDIARIES
None.
PATENTS AND TRADEMARKS
None.
DESCRIPTION OF PROPERTY
We currently maintain our corporate office at 8th Floor-200 South Virginia
Street, Reno, NV, 89501. The Company has not entered into a formal lease
agreement with the lessor. We pay a monthly rent of $100 for this space, and
payment for such rent has been advanced by the Company's President.
LEGAL PROCEEDINGS
There are no pending, nor to our knowledge threatened, legal proceedings against
us.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Our Common Stock is quoted on the OTCBB under the symbol "NTVS." On January 31,
2010, the closing price for our Common Stock as reported on the OTCBB was
unavailable, as there have been no reported trades of our Common Stock.
The high and the low bid prices for our Common Stock is based on inter-dealer
prices, without retail mark-up, markdown or commission, and may not represent
actual transactions.
16
The table below sets forth the range of high and low bid information for our
Common Shares as quoted on the OTCBB for each of the quarters during the fiscal
year ended July 31, 2009 (no quotes are available for the fiscal year ended July
31, 2008, as our stock was not yet quoted on the OTC Bulletin Board at such
time) and for the quarters ended October 31, 2009 and January 31, 2010.
For the Quarter ended: High Low
---------------------- ---- ---
October 31, 2008 N/A N/A
January 31, 2009 N/A N/A
April 30, 2009 N/A N/A
July 31, 2009 N/A N/A
October 31, 2009 N/A N/A
January 31, 2010 N/A N/A
We cannot assure you that a public market will materialize or if a market
materializes, it will be sustained.
The Securities and Exchange Commission has adopted rules that regulate
broker-dealer practices in connection with transactions in penny stocks. Penny
stocks are generally equity securities with a price of less than $5.00, other
than securities registered on certain national securities exchanges or quoted on
the NASDAQ system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
quotation system. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock, to deliver a standardized risk disclosure document
prepared by the Securities and Exchange Commission, that:
(a) contains a description of the nature and level of risk in the market
for penny stocks in both public offerings and secondary trading;
(b) contains a description of the broker's or dealer's duties to the
customer and of the rights and remedies available to the customer with
respect to a violation of such duties or other requirements of the
securities laws;
(c) contains a brief, clear, narrative description of a dealer market,
including bid and ask prices for penny stocks and the significance of
the spread between the bid and ask price;
(d) contains a toll-free telephone number for inquiries on disciplinary
actions;
(e) defines significant terms in the disclosure document or in the conduct
of trading in penny stocks; and
(f) contains such other information and is in such form, including
language, type, size and format, as the Securities and Exchange
Commission shall require by rule or regulation.
The broker or dealer also must provide, prior to effecting any transaction in a
penny stock, the customer with:
(a) bid and offer quotations for the penny stock;
(b) the compensation of the broker-dealer and its salesperson in the
transaction;
(c) the number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the
market for such stock; and
(d) a monthly account statement showing the market value of each penny
stock held in the customer's account.
In addition, the penny stock rules require that prior to a transaction in a
penny stock not otherwise exempt from those rules; the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a suitably written statement.
These disclosure requirements may have the effect of reducing the trading
activity in the secondary market for our stock. Therefore, if our common stock
becomes subject to the penny stock rules, stockholders may have difficulty
selling those securities.
17
HOLDERS OF OUR COMMON STOCK
On March 9, 2010, we had 34 registered shareholders and 2,140,000 shares
outstanding.
DIVIDEND POLICY
We have not paid any cash dividends on our common stock and have no present
intention of paying any dividends on the shares of our common stock. Our future
dividend policy will be determined from time to time by our board of directors.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
As of July 31, 2009, we had not adopted an equity compensation plan and had not
granted any stock options.
RECENT SALES OF UNREGISTERED SECURITIES
During the fiscal year ended July 31, 2009 and during the six months ended
January 31, 2010, we did not sell any equity securities not registered under the
Securities Act.
RULE 144 SHARES
There are currently no outstanding warrants for the purchase of shares of common
stock and no shares of common stock reserved under any employee stock option
plans. As of the date of this prospectus, 2,140,000 shares of common stock are
issued and outstanding, including the 640,000 shares of common stock which have
been registered for resale in this prospectus. There currently are no shares of
common stock or common stock equivalents which can be resold in the public
market in reliance upon the safe harbor provisions of Rule 144, as promulgated
under the Securities Act of 1933.
As of the date of this prospectus, persons who are our affiliates hold 1,500,000
shares of our outstanding common stock. In general, under Rule 144, as currently
in effect, a person who is an affiliate of ours, or has been an affiliate of
ours at any time during the three months preceding a sale, and who has
beneficially owned shares of our common stock for at least six months would be
entitled to sell their securities provided that they sell only a number of
securities that does not exceed the greater of either of the following:
(a) 1% of the number of shares of the company's common stock then
outstanding which, in our case, will equal 21,400 shares as of the
date of this prospectus; or
(b) If our shares are listed on a national securities exchange (which
listing is not currently contemplated), the average weekly trading
volume of our common stock during the four calendar weeks preceding
the filing of a notice on Form 144 with respect to the sale.
These sales under Rule 144 are also subject to the continued availability of
current public information about us, compliance with certain manner of sale
provisions, and the filing of a Form 144 notice of sale if the sale is for an
amount in excess of 5,000 shares or for an aggregate sale price of more than
$50,000 in a three-month period. In addition, Rule 144 is not available for
re-sales of restricted securities of shell companies or former shell companies
until one year elapses from the time that such company is no longer considered a
shell company.
18
FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm F-2
Balance Sheet as of July 31, 2009 and 2008 F-3
Statement of Operations for the Period from Inception (February 8, 2008)
to July 31, 2009 and 2008 F-4
Statement of Stockholders' Equity as of July 31, 2009 and 2008 F-5
Statement of Cash Flows for the Period from Inception (February 8, 2008)
to July 31, 2009 and 2008 F-6
Notes to Financial Statements F-7
Balance Sheets as of January 31, 2010 (unaudited) and
July 31, 2009 (audited) F-13
Statements of Operations for the three and six months ended
January 31, 2010 and 2009 and the period from inception to
January 31, 2010 (unaudited) F-14
Statement of Stockholders' Equity for the period from inception to
January 31, 2010 (unaudited) F-15
Statements of Cash Flows for the six months ended January 31, 2010
and 2009 and the period from inception to January 31, 2010
(unaudited) F-16
Notes to Financial Statements F-17
F-1
Maddox Ungar Silberstein, PLLC CPAs and Business Advisors
Phone (248) 203-0080
Fax (248) 281-0940
30600 Telegraph Road, Suite 2175
Bingham Farms, MI 48025-4586
www.maddoxungar.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Netventory Solutions, Inc.
Reno, Nevada
We have audited the accompanying balance sheets of Netventory Solutions, Inc., a
Nevada Corporation, as of July 31, 2009 and 2008 and the related statements of
operations, stockholders' equity, and cash flows for the periods then ended and
for the period from February 8, 2008 (date of inception) through July 31, 2009.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audis to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company has determined that it
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 the Company's internal control
over financial reporting. Accordingly, we express no such opinion. An audit
includes examining on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
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 Netventory Solutions, Inc., as
of July 31, 2009 and 2008 and the results of its operations and cash flows for
the periods then ended and from February 8, 2008 (date of inception) through
July 31, 2009, in conformity with accounting principles generally accepted in
the United States of America.
The accompanying financial statements have been prepared assuming that
Netventory Solutions, Inc. will continue as a going concern. As discussed in
Note 7 to the financial statements, the Company has incurred losses from
operations, has negative working capital, and is in need of additional capital
to grow its operations so that it can become profitable. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans with regard to these matters are described in Note 7. The
accompanying financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/ Maddox Ungar Silberstein, PLLC
------------------------------------------
Bingham Farms, Michigan
November 11, 2009
F-2
NETVENTORY SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
AS OF JULY 31, 2009 AND 2008
July 31, July 31,
2009 2008
-------- --------
ASSETS
Current Assets
Cash $ 9,756 $ 40,763
Prepaid expenses 5,610 --
-------- --------
Total Current Assets 15,366 40,763
-------- --------
Other Assets
Website 9,000 --
-------- --------
Total Assets $ 24,366 $ 40,763
======== ========
LIABILITIES
Current Liabilities
Accounts payable and accrued expenses $ 6,233 $ --
Due to stockholder 12,034 950
-------- --------
Total Liabilities 18,267 950
-------- --------
STOCKHOLDERS` EQUITY
Common stock: 100,000,000 shares authorized, par value $0.001;
2,140,000 shares issued and outstanding 2,140 2,140
Additional paid in capital 44,860 44,860
Deficit accumulated during the development stage (40,901) (7,187)
-------- --------
Total Stockholders' Equity 6,099 39,813
-------- --------
Total Liabilities and Stockholders' Equity $ 24,366 $ 40,763
======== ========
The accompanying notes are an integral part of these financial statements
F-3
NETVENTORY SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JULY 31, 2009 AND 2008
FOR THE PERIOD FROM FEBRUARY 8, 2008 (INCEPTION) TO JULY 31, 2009
Period from
February 8, 2008
Year Ended Year Ended (Inception) to
July 31, July 31, July 31,
2009 2008 2009
----------- ----------- -----------
REVENUES $ -- $ -- $ --
----------- ----------- -----------
OPERATING EXPENSES
Professional fees 19,904 6,300 26,204
Consulting fees 1,000 -- 1,000
Filing fees 12,261 -- 12,261
General and administrative 549 887 1,436
----------- ----------- -----------
TOTAL OPERATING EXPENSES 33,714 7,187 40,901
----------- ----------- -----------
NET LOSS PRIOR TO PROVISION FOR INCOME TAXES (33,714) (7,187) (40,901)
PROVISION FOR INCOME TAXES -- -- --
----------- ----------- -----------
NET LOSS $ (33,714) $ (7,187) $ (40,901)
=========== =========== ===========
NET LOSS PER SHARE: BASIC AND DILUTED $ (0.00) $ (0.00) $ (0.00)
=========== =========== ===========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 2,140,000 2,140,000 2,140,000
=========== =========== ===========
The accompanying notes are an integral part of these financial statements
F-4
NETVENTORY SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
AS OF JULY 31, 2009
Deficit
Accumulated
Common Shares Additional During
Issued Paid-in Development Total
Shares Amount Capital Stage Equity
------ ------ ------- ----- ------
Balance, February 8, 2008 (date of inception) -- $ -- $ -- $ -- $ --
Shares issued to founder on Feb 8, 2008
@ $0.01 per share 1,500,000 1,500 13,500 -- 15,000
Private placement at $0.05 per share on
June 30, 2008 640,000 640 31,360 -- 32,000
Net (loss) -- -- -- (7,187) (7,187)
--------- ------ ------- -------- --------
Balance, July 31, 2008 2,140,000 2,140 44,860 (7,187) 39,813
Net loss -- -- -- (33,714) (33,714)
--------- ------ ------- -------- --------
Balance, July 31, 2009 2,140,000 $2,140 $44,860 $(40,901) $ 6,099
========= ====== ======= ======== ========
The accompanying notes are an integral part of these financial statements
F-5
NETVENTORY SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JULY 31, 2009 AND 2008
FOR THE PERIOD FROM FEBRUARY 8, 2008 (INCEPTION) TO JULY 31, 2009
Period from
February 8, 2008
Year Ended Year Ended (Inception) to
July 31, July 31, July 31,
2009 2008 2009
-------- -------- --------
OPERATING ACTIVITIES
Net loss $(33,714) $ (7,187) $(40,901)
(Increase) in prepaid expenses (5,610) -- (5,610)
Increase in accounts payable 6,233 -- 6,233
-------- -------- --------
Cash used in operating activities (33,091) (7,187) (40,278)
-------- -------- --------
FINANCING ACTIVITIES
Sale of common stock -- 47,000 47,000
Increase in due to stockholder 11,084 950 12,034
-------- -------- --------
Cash from financing activities 11,084 47,950 59,034
-------- -------- --------
INVESTING ACTIVITY
Website development (9,000) -- (9,000)
-------- -------- --------
Cash used in investing activity (9,000) -- (9,000)
-------- -------- --------
Increase (Decrease) in cash (31,007) 40,763 9,756
Cash, opening 40,763 -- --
-------- -------- --------
Cash, closing $ 9,756 $ 40,763 $ 9,756
======== ======== ========
Supplemental disclosure of cash flow information:
Cash paid for interest $ -- $ -- $ --
======== ======== ========
Cash paid for income taxes $ -- $ -- $ --
======== ======== ========
The accompanying notes are an integral part of these financial statements
F-6
NETVENTORY SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 2009
NOTE 1 - NATURE OF OPERATIONS
Netventory Solutions Inc. ("the Company"), incorporated in the state of Nevada
on February 8, 2008, has business activities in inventory management solutions.
The company has limited operations and is considered to be in the development
stage.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Accounting Basis
These financial statements are prepared on the accrual basis of accounting in
conformity with accounting principles generally accepted in the United States of
America.
Financial Instruments
The Company's financial instruments consist of cash, prepaid expenses, accounts
payable and an amunt due to stockholder. The amount due to stockholder is non
interest-bearing. It is management's opinion that the Company is not exposed to
significant interest, currency or credit risks arising from its other financial
instruments and that their fair values approximate their carrying values except
where separately disclosed.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles of the United States 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 year.
The more significant areas requiring the use of estimates include asset
impairment, stock-based compensation, and future income tax amounts. Management
bases its estimates on historical experience and on other assumptions considered
to be reasonable under the circumstances. However, actual results may differ
from the estimates.
Dividends
The Company has not adopted any policy regarding payment of dividends. No
dividends have been paid during the period shown.
Loss Per Share
Net loss per common share is computed based on the weighted average number of
common shares outstanding and common stock equivalents, if not anti-dilutive.
The Company has not issued any potentially dilutive common shares.
Basic loss per share is calculated using the weighted average number of common
shares outstanding and the treasury stock method is used to calculate diluted
earnings per share. For the years presented, this calculation proved to be
anti-dilutive.
F-7
NETVENTORY SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 2009
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes
The Company provides for income taxes uisng an asset and liability approach.
Deferred tax assets are reduced by a valuation allowance if, based on the weight
of available evidence, it is more likely than not that some or all of the
deferred tax assets will not be realized. No provision for income taxes is
included in the statement due to its immaterial amount, net of the allowance
account, based on the likelihood of the Company to utilize the loss
carry-forward.
NOTE 3 - DUE TO STOCKHOLDER
The amount owing to stockholder is unsecured, non-interest bearing and has no
specific terms of repayment.
NOTE 4 - STOCKHOLDERS' EQUITY
The company has 100,000,000 common shares authorized at a par value of $0.001
per share. During the period ended July 31, 2008, the company issued 2,140,000
common shares for total proceeds of $47,000. As of July 31, 2009, the company
has no warrants or options outstanding. There were no additional shares issued
during the year ended July 31, 2009. Total shares outstanding as of July 31,
2009 were 2,140,000.
NOTE 5 - INCOME TAXES
In the Company's opinion, it is uncertain whether it will generate sufficient
taxable income in the future to fully utilize the net deferred tax asset.
Accordingly, a valuation allowance equal to the deferred tax asset has been
recorded. The total deferred tax asset is $8,998, which is calculated by
multiplying a 22% estimated tax rate by the cumulative NOL of $40,901.
NOTE 6 - RELATED PARTY TRANSACTION
As at July 31, 2009, there is a balance owing to a stockholder of the Company in
the amount of $12,034.
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities that become available. They may face a conflict in selecting
between the Company and other business interests. The Company has not formulated
a policy for the resolution of such conflicts.
NOTE 7 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. As discussed in the notes to the
financial statements, the Company has no established source of revenue. This
raises substantial doubt about the Company's ability to continue as a going
concern. Without realization of additional capital, it would be unlikely for the
Company to continue as a going concern. The financial statements do not include
any adjustments that might result from this uncertainty.
F-8
NETVENTORY SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 2009
NOTE 7 - GOING CONCERN (CONTINUED)
The Company's activities to date have been supported by equity financing. It has
sustained losses in all previous reporting periods with an inception to date
loss of $40,901 as of July 31, 2009. Management continues to seek funding from
its shareholders and other qualified investors to pursue its business plan. In
the alternative, the Company may be amenable to a sale, merger or other
acquisition in the event such transaction is deemed by management to be in the
best interests of the shareholders.
NOTE 8 - RECENT ACCOUNTING PRONOUNCEMENTS
Below is a listing of the most recent accounting standards and their effect on
the Company.
STATEMENT NO. 150 - ACCOUNTING FOR CERTAIN FINANCIAL INSTRUMENTS WITH
CHARACTERISTICS OF BOTH LIABILITIES AND EQUITY (ISSUED 5/03)
This Statement establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity.
STATEMENT NO. 151- INVENTORY COSTS-AN AMENDMENT OF ARB NO. 43, CHAPTER 4 (ISSUED
11/04)
This statement amends the guidance in ARB No. 43, Chapter 4, INVENTORY PRICING,
to clarify the accounting for abnormal amounts of idle facility expense,
freight, handling costs, and wasted material (spoilage). Paragraph 5 of ARB 43,
Chapter 4, previously stated that "...under some circumstances, items such as
idle facility expense, excessive spoilage, double freight and re-handling costs
may be so abnormal ass to require treatment as current period charges...." This
Statement requires that those items be recognized as current-period charges
regardless of whether they meet the criterion of "so abnormal." In addition,
this Statement requires that allocation of fixed production overheads to the
costs of conversion be based on the normal capacity of the production
facilities.
STATEMENT NO. 152 - ACCOUNTING FOR REAL ESTATE TIME-SHARING TRANSACTIONS (AN
AMENDMENT OF FASB STATEMENTS NO. 66 AND 67)
This Statement amends FASB Statement No. 66, ACCOUNTING FOR SALES OF REAL
ESTATE, to reference the financial accounting and reporting guidance for real
estate time-sharing transactions that is provided in AICPA Statement of Position
(SOP) 04-2, ACCOUNTING FOR REAL ESTATE TIME-SHARING TRANSACTIONS.
This Statement also amends FASB Statement No. 67, Accounting FOR COSTS AND
INITIAL RENTAL OPERATIONS OF REAL ESTATE PROJECTS, states that the guidance for
(a) incidental operations and (b) costs incurred to sell real estate projects
does not apply to real estate time-sharing transactions. The accounting for
those operations and costs is subject to the guidance in SOP 04-2.
F-9
NETVENTORY SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 2009
NOTE 8 - RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)
STATEMENT NO. 153- EXCHANGES OF NON-MONETARY ASSETS (AN AMENDMENT OF APB OPINION
NO. 29)
The guidance in APB Opinion No. 29, ACCOUNTING FOR NON-MONETARY TRANSACTIONS, is
based on the principle that exchanges of non-monetary assets should be measured
based on the fair value of the assets exchanged. The guidance in that Opinion,
however, includes certain exceptions to the principle. This Statement amends
Opinion 29 to eliminate the exception for non-monetary exchanges of similar
productive assts and replaces it with a general exception for exchanges of
non-monetary assets that do not have commercial substance. A non-monetary
exchange has commercial substance if the future cash flows of the entity are
expected to change significantly as a result of the exchange.
STATEMENT NO. 154 - ACCOUNTING CHANGES AND ERROR CORRECTIONS (A REPLACEMENT OF
APB OPINION NO. 20 AND FASB STATEMENT NO. 3)
This Statement replaces APB Opinion No. 20, ACCOUNTING CHANGES, and FASB
Statement No. 3, REPORTING ACCOUNTING CHANGES IN INTERIM FINANCIAL STATEMENTS,
and changes the requirements for the accounting for and reporting of a change in
accounting principle. This Statement applies to all voluntary changes in
accounting principle. It also applies to changes required by an accounting
pronouncement in the unusual instance that the pronouncement does not include
specific transition provisions. When a pronouncement includes specific
transition provisions, those provisions should be followed.
SFAS NO. 155 ACCOUNTING FOR CERTAIN HYBRID FINANCIAL INSTRUMENTS-AN AMENDMENT OF
FASB STATEMENTS NO. 133 AND 140
This statement amends FASB Statements No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities. This statement
resolves issues addressed in Statement 133 Implementation Issue No. D1,
Application of Statement 133 to Beneficial Interests in Securitized Financial
Assets. This statement is effective for all financial instruments acquired or
issued after the beginning of an entity's first fiscal year that begins after
September 15, 2006.
SFAS NO. 156 ACCOUNTING FOR SERVICING OF FINANCIAL ASSETS-AN AMENDMENT OF FASB
STATEMENT NO. 140
This statement amends FASB Statement No. 140 with respect to the accounting for
separately recognized servicing liabilities. An entity should adopt this
statement as of the beginning of its first fiscal year that begins after
September 15, 2006.
SFAS NO. 157 FAIR VALUE MEASUREMENTS
In September 2006, the FASB issued SFAS No. 157, FAIR VALUE MEASUREMENTS, which
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles, and expands disclosures about fair
value measurements. SFAS No. 157 does not require any new fair value
measurements, but provides guidance on how to measure fair value by providing a
fair value hierarchy used to classify the source of the information. This
statement is effective for us beginning May 1, 2008.
F-10
NETVENTORY SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 2009
NOTE 8 - RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)
SFAS NO. 158 EMPLOYERS' ACCOUNTING FOR DEFINED BENEFIT PENSION AND OTHER
POSTRETIREMENT PLANS-AN AMENDMENT OF FASB STATEMENTS NO. 87, 88, 106, AND
132(R))
This statement improves the financial reporting by requiring an employer to
recognize the overfunded or underfunded status of a defined benefit
postretirement plan (other than a multiemployer plan) as an asset or liabilities
in its statement of financial positions and to recognize changes in that funded
status in the year in which the changes occur through comprehensive income of a
business entity. This statement also improves financial reporting by requiring
an employer to measure the funded status of a plan as of the date of its
year-end statement of financial position, with limited exceptions.
SFAS NO. 159 THE FAIR VALUE OPTION FOR FINANCIAL ASSETS AND FINANCIAL
LIABILITIES-INCLUDING AN AMENDMENT OF FASB STATEMENT NO. 115
This statement permits entities to choose to measure many financial instruments
and certain items at fair value. The objective is to improve the financial
reporting by providing entities with the opportunity to mitigate volatility in
reported earnings caused by measuring related assets and liabilities differently
without having to apply complex hedge accounting provisions. This statement is
expected to expand the use of fair value measurement objectives for accounting
for financial instruments. This statement is effective as of the beginning of an
entity's first fiscal year that begins after November 15, 2007.
SFAS NO. 160 NON-CONTROLLING INTEREST IN CONSOLIDATED FINANCIAL STATEMENTS-AN
AMENDMENT OF ARB NO. 51
This statement amends ARB 51 to establish accounting and reporting standards for
the non-controlling interest in a subsidiary and for the deconsolidation of a
subsidiary. It also changes the way the consolidated income statement is
presented for non-controlling interest. This statement improves comparability by
eliminating diversity of methods. This statement also requires expanded
disclosure.
SFAS NO. 161
This statement is intended to enhance the disclosure requirements for derivative
instruments and hedging activities as required by SFAS 133.
SFAS 162
This statement indentifies the sources of accounting principles and the
framework for selecting the principles to by used in the preparation of
financial statements for entities that are presented in conformity with
generally accepted accounting principles in the United States, (the GAAP
hierarchy).
F-11
NETVENTORY SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 2009
NOTE 8 - RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)
FIN NO. 48
In June 2006, the FASB issued Interpretation No. 48 ("FIN No. 48"), ACCOUNTING
FOR UNCERTAINTY IN INCOME TAXES--AN INTERPRETATION OF FASB STATEMENT NO. 109,
which clarifies the accounting for uncertainty in income taxes recognized in an
enterprise's financial statements in accordance with SFAS No. 109, ACCOUNTING
FOR INCOME TAXES. The Interpretation provides a recognition threshold and
measurement attribute for the financial statement recognition and measurement of
a tax position taken or expected to be taken in a tax return. Under FIN No. 48,
the Company may recognize the tax benefit from an uncertain tax position only if
it is more likely than not that the tax position will be sustained on
examination by the taxing authorities, based on the technical merits of the
position. The tax benefits recognized in the financial statements from such a
position should be measured based on the largest benefit that has a greater than
50% likelihood of being realized upon ultimate settlement. FIN No. 48 also
provides guidance on de-recognition, classification, interest and penalties,
accounting in interim periods, disclosure, and transition. FIN No. 48 is
effective for us beginning July 1, 2007.
In June 2006, the FASB ratified the Emerging Issues Task Force ("EITF")
consensus on EITF Issue No. 06-2, "Accounting for Sabbatical Leave and Other
Similar Benefits Pursuant to FASB Statement No. 43." EITF Issue No. 06-2
requires companies to accrue the costs of compensated absences under a
sabbatical or similar benefit arrangement over the requisite service period.
EITF Issue No. 06-2 is effective for us beginning July 1, 2007. The cumulative
effect of the application of this consensus on prior period results should be
recognized through a cumulative-effect adjustment to retained earnings as of the
beginning of the year of adoption. Elective retrospective application is also
permitted.
Staff Accounting Bulletin ("SAB") No. 108, Considering the Effects of Prior Year
Misstatements when Quantifying Current Year Misstatements. SAB No. 108 requires
companies to quantify misstatements using both a balance sheet (iron curtain)
and an income statement (rollover) approach to evaluate whether either approach
results in an error that is material in light of relevant quantitative and
qualitative factors, and provides for a one-time cumulative effect transition
adjustment. SAB No. 108.
The FASB has replaced SFAS No. 141 with a new statement on Business Combinations
that changes the way that minority interest is recorded and modified as a
parent's interest in a subsidiary changes. The adoption of these and other new
Statements is not expected to have a material effect on the Company's current
financial position, results or operations, or cash flows.
NOTE 9 - SUBSEQUENT EVENTS
The Company has analyzed its operations subsequent to July 31, 2009 through
November 13, 2009 and has determined that it does not have any material
subsequent events to disclose in these financial statements.
F-12
Netventory Solutions Inc.
(A Development Stage Company)
Balance Sheets
As of January 31, 2010 and July 31, 2009
January 31, July 31,
2010 2009
-------- --------
(unaudited) (audited)
ASSETS
CURRENT ASSETS
Cash $ 2,827 $ 9,756
Prepaid expenses 610 5,610
-------- --------
Total current assets 3,437 15,366
-------- --------
OTHER ASSET
Website 9,000 9,000
-------- --------
Total other asset 9,000 9,000
-------- --------
Total Assets $ 12,437 $ 24,366
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 3,851 $ 3,500
Due to stockholder 12,034 12,034
-------- --------
Total Liabilities 15,885 15,534
-------- --------
STOCKHOLDERS` EQUITY (DEFICIT) (NOTE 4)
Common stock authorized -
100,000,000 common shares with a par value of $0.001
Common stock issued and outstanding -
2,140,000 common shares 2,140 2,140
Additional paid in capital 44,860 44,860
Deficit accumulated during the development stage (50,448) (38,168)
-------- --------
Total Stockholders' Equity (Deficit) (3,448) 8,832
-------- --------
Total Liabilities and Stockholders' Equity (Deficit) $ 12,437 $ 24,366
======== ========
The accompanying notes are an integral part of these financial statements
F-13
Netventory Solutions Inc.
(A Development Stage Company)
Statements of Operations (unaudited)
For the Three and Six Months ended January 31, 2010 and 2009 and
the period from Inception (February 8, 2008) to January 31, 2010
Period from
Three Months Three Months Six Months Six Months Inception
ended ended ended ended (February 8, 2008) to
January 31, January 31, January 31, January 31, January 31,
2010 2009 2010 2009 2010
---------- ---------- ---------- ---------- ----------
Revenue $ -- $ -- $ -- $ -- $ --
---------- ---------- ---------- ---------- ----------
Expenses:
Professional 450 350 3,750 14,171 27,221
Consulting 750 -- 1,750 -- 2,750
Filing fees 3,431 333 6,631 5,923 18,892
General and administrative -- 30 149 259 1,585
---------- ---------- ---------- ---------- ----------
Net (loss) before income taxes (4,630) (713) (12,280) (20,353) (50,448)
Provision for income taxes -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Net (loss) $ (4,630) $ (713) $ (12,280) $ (20,353) $ (50,448)
========== ========== ========== ========== ==========
Basic and diluted (loss) per
common share $ (0.00) $ (0.00) $ (0.01) $ (0.01)
========== ========== ========== ==========
Weighted average number of common
shares outstanding 2,140,000 2,140,000 2,140,000 2,140,000
========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements
F-14
Netventory Solutions Inc.
(A Development Stage Company)
Statement of Stockholders' Equity (unaudited)
For the period from Inception (February 8, 2008) to January 31, 2010
Deficit
Accumulated
Common Shares Additional During
Issued Paid-in Development Total
Shares Amount Capital Stage Equity
------ ------ ------- ----- ------
Balance, February 8, 2008 -- $ -- $ -- $ -- $ --
Shares issued to founder on Feb 8, 2008
@ $0.01 per share 1,500,000 1,500 13,500 -- 15,000
Private placement at $0.05 per share on
June 30, 2008 640,000 640 31,360 -- 32,000
Net (loss) -- -- -- (7,187) (7,187)
--------- ------- -------- --------- --------
Balance, July 31, 2008 2,140,000 2,140 44,860 (7,187) 39,813
Net (loss) -- -- -- (30,981) (30,981)
--------- ------- -------- --------- --------
Balance, July 31, 2009 2,140,000 2,140 44,860 (38,168) 8,832
Net (loss) -- -- -- (12,280) (12,280)
--------- ------- -------- --------- --------
Balance, January 31, 2010 2,140,000 $ 2,140 $ 44,860 $ (50,448) $ (3,448)
========= ======= ======== ========= ========
The accompanying notes are an integral part of these financial statements
F-15
Netventory Solutions Inc.
(A Development Stage Company)
Statements of Cash Flows (unaudited)
For the Six Months ended January 31, 2010 and 2009 and for
the period from Inception (February 8, 2008) to January 31, 2010
Period from
Six Months Six Months Inception
ended ended (February 8, 2008) to
January 31, January 31, January 31,
2010 2009 2010
-------- -------- --------
OPERATING ACTIVITIES
Net (loss) $(12,280) $(20,353) $(50,448)
(Increase) decrease in prepaid expenses 5,000 -- (610)
(Increase) in accounts payable 351 1,400 3,851
-------- -------- --------
Cash used in operating activities (6,929) (18,953) (47,207)
-------- -------- --------
INVESTING ACTIVITY
Website development -- (9,000) (9,000)
-------- -------- --------
Cash used in investing activity -- (9,000) (9,000)
-------- -------- --------
FINANCING ACTIVITIES
Sale of stock -- -- 47,000
Increase in due to stockholder -- -- 12,034
-------- -------- --------
Cash from financing activities -- -- 59,034
-------- -------- --------
Increase (Decrease) in cash (6,929) (27,593) 2,827
Cash, opening 9,756 40,763 --
-------- -------- --------
Cash, closing $ 2,827 $ 12,810 $ 2,827
======== ======== ========
The accompanying notes are an integral part of these financial statements
F-16
Netventory Solutions Inc.
(A Development Stage Company)
Notes to Financial Statements
January 31, 2010
NOTE 1 - NATURE OF OPERATIONS
Netventory Solutions Inc. ("the Company"), incorporated in the state of Nevada
on February 8, 2008, and is planning to have business activities in inventory
management solutions.
The company has limited operations and is considered to be in the development
stage.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTING BASIS
These financial statements are prepared on the accrual basis of accounting in
conformity with accounting principles generally accepted in the United States of
America.
BASIS OF PRESENTATION
Certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. We believe that the disclosures are
adequate to make the financial information presented not misleading. These
condensed financial statements should be read in conjunction with the audited
consolidated financial statements and the notes thereto for the year ended July
31, 2009. All adjustments were of a normal recurring nature unless otherwise
disclosed. In the opinion of management, all adjustments necessary for a fair
statement of the results of operations for the interim period have been
included. The results of operations for such interim periods are not necessarily
indicative of the results for the full year.
FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash, prepaid expenses, accounts
payable and an amount due to stockholder. The amount due to stockholder is non
interest-bearing. It is management's opinion that the Company is not exposed to
significant interest, currency or credit risks arising from its other financial
instruments and that their fair values approximate their carrying values except
where separately disclosed.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles of the United States 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 year.
The more significant areas requiring the use of estimates include asset
impairment, stock-based compensation, and future income tax amounts. Management
bases its estimates on historical experience and on other assumptions considered
to be reasonable under the circumstances. However, actual results may differ
from the estimates.
F-17
Netventory Solutions Inc.
(A Development Stage Company)
Notes to Financial Statements
January 31, 2010
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
LOSS PER SHARE
Net income (loss) per common share is computed based on the weighted average
number of common shares outstanding and common stock equivalents, if not
anti-dilutive. The Company has not issued any potentially dilutive common
shares.
Basic loss per share is calculated using the weighted average number of common
shares outstanding and the treasury stock method is used to calculate diluted
earnings per share. For the years presented, this calculation proved to be
anti-dilutive.
DIVIDENDS
The Company has not adopted any policy regarding payment of dividends. No
dividends have been paid during the period shown.
INCOME TAXES
The Company provides for income taxes using an asset and liability approach.
Deferred tax assets are reduced by a valuation allowance if, based on the weight
of available evidence, it is more likely than not that some or all of the
deferred tax assets will not be realized. No provision for income taxes is
included in the statement due to its immaterial amount, net of the allowance
account, based on the likelihood of the Company to utilize the loss
carry-forward.
NOTE 3 - DUE TO STOCKHOLDER
The amount owing to stockholder is unsecured, non-interest bearing and has no
specific terms of repayment.
NOTE 4 - STOCKHOLDERS' EQUITY
Common Shares - Authorized
The company has 100,000,000 common shares authorized at a par value of $0.001
per share.
Common Shares - Issued and Outstanding
During the period ended July 31, 2008, the company issued 2,140,000 common
shares for total proceeds of $47,000.
As at January 31, 2010, the company has no warrants or options outstanding.
F-18
Netventory Solutions Inc.
(A Development Stage Company)
Notes to Financial Statements
January 31, 2010
NOTE 5 - INCOME TAXES
The Company provides for income taxes using an asset and liability
approach.Deferred tax assets and liabilities are recorded based on the
differences between the financial statement and tax bases of assets and
liabilities and the tax rates in effect currently.
Deferred tax assets are reduced by a valuation allowance if, based on the weight
of available evidence, it is more likely than not that some or all of the
deferred tax assets will not be realized. In the Company's opinion, it is
uncertain whether they will generate sufficient taxable income in the future to
fully utilize the net deferred tax asset. Accordingly, a valuation allowance
equal to the deferred tax asset has been recorded. The total deferred tax asset
is $11,098, which is calculated by multiplying a 22% estimated tax rate by the
cumulative NOL of $50,448.
NOTE 6 - RELATED PARTY TRANSACTION
As at January 31, 2010, there is a balance owing to a stockholder of the Company
in the amount of $12,034.
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities that become available. They may face a conflict in selecting
between the Company and other business interests. The Company has not formulated
a policy for the resolution of such conflicts.
NOTE 7 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. As discussed in the notes to the
financial statements, the Company has no established source of revenue. This
raises substantial doubt about the Company's ability to continue as a going
concern. Without realization of additional capital, it would be unlikely for the
Company to continue as a going concern. The financial statements do not include
any adjustments that might result from this uncertainty.
F-19
Netventory Solutions Inc.
(A Development Stage Company)
Notes to Financial Statements
January 31, 2010
NOTE 7 - GOING CONCERN (CONTINUED)
The Company's activities to date have been supported by equity financing. It has
sustained losses in all previous reporting periods with an inception to date
loss of $50,448 as of January 31, 2010. Management continues to seek funding
from its shareholders and other qualified investors to pursue its business plan.
In the alternative, the Company may be amenable to a sale, merger or other
acquisition in the event such transaction is deemed by management to be in the
best interests of the shareholders.
NOTE 8 - RECENT ACCOUNTING PRONOUNCEMENTS
The adoption of new accounitng pronouncements is not expected to have a material
effect on the Company's current financial position, results or operations, or
cash flows.
NOTE 9 - SUBSEQUENT EVENTS
The Company has analyzed its operations subsequent to January 31, 2010 to the
date these financial statements were submitted to the Securities and Exchange
Commission and has determined that it does not have any material subsequent
events to disclose in these in financial statements.
F-20
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
THIS PROSPECTUS CONTAINS "FORWARD-LOOKING STATEMENTS" AND INFORMATION RELATING
TO OUR BUSINESS THAT ARE BASED ON OUR BELIEFS AS WELL AS ASSUMPTIONS MADE BY US
OR BASED UPON INFORMATION CURRENTLY AVAILABLE TO US. WHEN USED IN THIS
PROSPECTUS, THE WORDS "ANTICIPATE," "BELIEVE," "ESTIMATE," "EXPECT," "INTEND,"
"MAY," "PLAN," "PROJECT," "SHOULD" AND SIMILAR EXPRESSIONS ARE INTENDED TO
IDENTIFY FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKING STATEMENTS INCLUDE,
BUT ARE NOT LIMITED TO, STATEMENTS RELATING TO OUR PERFORMANCE IN "BUSINESS" AND
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS." THESE STATEMENTS REFLECT OUR CURRENT VIEWS AND ASSUMPTIONS WITH
RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES. ACTUAL AND
FUTURE RESULTS AND TRENDS COULD DIFFER MATERIALLY FROM THOSE SET FORTH IN SUCH
STATEMENTS DUE TO VARIOUS FACTORS. SUCH FACTORS INCLUDE, AMONG OTHERS: GENERAL
ECONOMIC AND BUSINESS CONDITIONS; INDUSTRY CAPACITY; INDUSTRY TRENDS;
COMPETITION; CHANGES IN BUSINESS STRATEGY OR DEVELOPMENT PLANS; PROJECT
PERFORMANCE; AVAILABILITY, TERMS, AND DEPLOYMENT OF CAPITAL; AND AVAILABILITY OF
QUALIFIED PERSONNEL. THESE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE
OF THIS PROSPECTUS. SUBJECT AT ALL TIMES TO RELEVANT SECURITIES LAW DISCLOSURE
REQUIREMENTS, WE EXPRESSLY DISCLAIM ANY OBLIGATION OR UNDERTAKING TO DISSEMINATE
ANY UPDATE OR REVISIONS TO ANY FORWARD-LOOKING STATEMENT CONTAINED HEREIN TO
REFLECT ANY CHANGE IN OUR EXPECTATIONS WITH REGARD THERETO OR ANY CHANGES IN
EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH ANY SUCH STATEMENT IS BASED. IN
ADDITION, WE CANNOT ASSESS THE IMPACT OF EACH FACTOR ON OUR BUSINESS OR THE
EXTENT TO WHICH ANY FACTOR, OR COMBINATION OF FACTORS, MAY CAUSE ACTUAL RESULTS
TO DIFFER MATERIALLY FROM THOSE CONTAINED IN ANY FORWARD-LOOKING STATEMENTS.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION
The following discussion should be read in conjunction with our audited and
unaudited financial statements and the related notes that appear elsewhere in
this prospectus. 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 those discussed below and
elsewhere in this prospectus.
Our financial statements are stated in United States dollars and are prepared in
accordance with United States generally accepted accounting principles.
APPLICATION OF CRITICAL ACCOUNTING ESTIMATES
The preparation of financial statements in conformity with United States
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the year.
The more significant areas requiring the use of estimates include asset
impairment, stock-based compensation, and future income tax amounts. Management
bases its estimates on historical experience and on other assumptions considered
to be reasonable under the circumstances. However, actual results may differ
from the estimates.
ACCOUNTING BASIS
These financial statements are prepared on the accrual basis of accounting in
conformity with accounting principles generally accepted in the United States of
America.
BASIS OF PRESENTATION
Certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. We believe that the disclosures are
adequate to make the financial information presented not misleading. These
condensed financial statements for the period ended January 31, 2010 should be
read in conjunction with the audited consolidated financial statements and the
notes thereto for the year ended July 31, 2009. All adjustments were of a normal
recurring nature unless otherwise disclosed. In the opinion of management, all
adjustments necessary for a fair statement of the results of operations for the
interim period have been included. The results of operations for such interim
periods are not necessarily indicative of the results for the full year.
FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash, prepaid expenses, accounts
payable and due to stockholder. The amount due to stockholder is non
interest-bearing. It is management's opinion that the Company is not exposed to
significant interest, currency or credit risks arising from its other financial
instruments and that their fair values approximate their carrying values except
where separately disclosed.
19
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles of the United States 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 year.
The more significant areas requiring the use of estimates include asset
impairment, stock-based compensation, and future income tax amounts. Management
bases its estimates on historical experience and on other assumptions considered
to be reasonable under the circumstances. However, actual results may differ
from the estimates.
LOSS PER SHARE
Net income (loss) per common share is computed based on the weighted average
number of common shares outstanding and common stock equivalents, if not
anti-dilutive. The Company has not issued any potentially dilutive common
shares. Basic loss per share is calculated using the weighted average number of
common shares outstanding and the treasury stock method is used to calculate
diluted earnings per share. For the years presented, this calculation proved to
be anti-dilutive.
DIVIDENDS
The Company has not adopted any policy regarding payment of dividends. No
dividends have been paid during the period shown.
INCOME TAXES
The Company provides for income taxes using of an asset and liability approach.
Deferred tax assets are reduced by a valuation allowance if, based on the weight
of available evidence, it is more likely than not that some or all of the
deferred tax assets will not be realized. No provision for income taxes is
included in the statement due to its immaterial amount, net of the allowance
account, based on the likelihood of the Company to utilize the loss
carry-forward.
EXECUTIVE OVERVIEW
We are a development stage company with limited operations and no revenues from
our business operations. Our auditors have issued a going concern opinion. This
means that our auditors believe there is substantial doubt that we can continue
as an on-going business for the next twelve months. We do not anticipate that we
will generate significant revenues until we have completed our development of
our software and marketing plan to generate customers. Accordingly, we must
raise cash from sources other than our operations in order to implement our
marketing plan.
In our management's opinion, there is a need for wireless network services
enabling the creation of wireless communities. We are focused on developing an
authentication and billing software product, and offering a wireless networking
service for the creation of wireless communities. We intend to enable service
providers, organizations, and individuals to deploy wireless networks, and to
sell subscriptions to end-users to access such wireless networks. Our goal is to
provide users with the ability to roam across Quuibus-powered wireless networks.
A user with a Quuibus account will be able to connect through and roam across
any of our partner wireless networks, similar to the way cellular phone
companies allow their customers to roam across different networks.
To meet a portion of our need for cash, we raised money from the sale of
2,140,000 shares of our common stock, which generated $47,000 in gross proceeds.
We believe that this will allow us to begin our product development, market our
website, and remain in business for twelve months. If we are unable to generate
revenues after the twelve months for any reason, or if we are unable to make a
reasonable profit after twelve months, we may have to suspend or cease
operations. At the present time, we have not made any arrangements to raise
additional cash, other than through this offering. Because we raised less than
the maximum amount and need additional funds, we may seek to obtain additional
funds through a second public offering, private placement of securities, or
loans.
GENERAL
We were incorporated in the state of Nevada in February 8, 2008, under the name
NetVentory Solutions, Inc. and are engaged in the provision of online inventory
services to small and medium sized companies. Our goal is to offer comprehensive
inventory management and product fulfillment services to our customers. Our
target clientele will include small to medium sized business owners who demand
convenient and cost effective ways to monitor and control their company's
inventory.
In order to satisfy global demand for online inventory services, we plan to
develop a network of international and domestic resellers, and also retain a
foreign sales force that manages various call centers, which develop client
networks and contact potential customers.
As the popularity of the Internet continues to surge, we plan to capitalize on
the continually maturing marketplace for online inventory management services.
Automated inventory services are becoming an increasingly necessary tool to
reduce costs and increase productivity. From scanning the bar codes on products
stored in warehouses and storage bins, to tracking the cost of goods sold to
customers, inventory management is becoming an essential part of everyday life
for many businesses.
We believe that our company has a strategic advantage over our competition
because our customers will have access to a protected local copy of their
inventory at their premises to which they can refer to in the event of a failure
in Internet connectivity. By granting our customers a local copy of their
20
inventory that will be readily available, our customers will have the ability to
continue with a project such as an inventory count (despite the lack of internet
service), without disruptions. In addition, once Internet connection is
restored, the local copy will automatically synch with the client's online
inventory system, updating any changes that may have occurred during the
interruption. We believe our unique technology will find a comfortable niche in
the online inventory system business, and will continue to refine our product
and related services in order to meet the needs of small and medium sized
businesses.
PRODUCTION
Registered subscribers will be able to log into our web site using the access
codes they set up during the registration process. After entering their user
name and password the person will be redirected to a designated secure folder
that contains their customized inventory management system. The infrastructure
of the web site will allow a subscriber to have multiple users online
simultaneously with no limitations on the number of hours of use. The
subscriber's staff will be able to access the same or different elements of
their online inventory management system at the same time if they like. An
access code hierarchy will be available to allow an administrator from the
subscriber firm, to limit or restrict the rights of users within their own
group. In this way sensitive information will be restricted to predetermined
members of the subscriber group.
A prominent feature of our online inventory management system will be to the
ease of access to a client's information. We plan to design an online system
that will be able to harness the growing ubiquity of Internet access. The
portability of the user name and password will allow subscribers to access our
company's web site from anywhere that they have Internet access. Our subscribers
are will be able to access the inventory via any web-compliant browser on a PC,
Laptop or a PDA.
Our product will enable our clients to manage their inventory and related
logistics. For example, when a shipment of materials arrives at the loading dock
of a client company, the client's staff person can log into the site and enter
the incoming items by product description, quantity and include notes such as
damaged goods for return. The entry will immediately update the existing
inventory for the goods already on hand, change the re-order status and advise
the production department that the goods have been received and are now
available. In another example, a client's sales representative that is visiting
a customer at the customer's office and needs to check the status of a customer
order, can check from a remote location to see if an item the customer wants is
in stock or to modify an existing order that has not yet shipped. The sales rep
will be able to use a wireless device to access the Internet, log in and
complete any one of these or other tasks thereby help to increase the level of
service the sales rep can give to the customer.
Our online inventory management services will feature a relational database that
will be developed using the open source MYSQL and the PhP programming language.
By using these software development tools we will be able to keep our costs down
and still produce a high quality product. The customer may opt for a local copy
of their inventory hosted on a server at their premises. If the Internet fails,
the local copy is still available for the customer to use. When the problem is
remedied, the local copy will synch with the online inventory system. This
option will be available at an additional fee.
PLAN OF OPERATION
Our plan of operation for the 12 months following the date of this prospectus is
to focus on developing a strong network of international and domestic resellers
who will offer our online inventory management services to small and medium
sized companies. Initially, the majority of our revenue will come from the sales
contracts made by the international and domestic resellers. We anticipate that a
portion of our revenue will also come from sales to direct subscribers of our
software. We feel that our marketing strategy of developing an international and
domestic network of resellers will bring us long term profitability and allow us
to grow the business over time.
Over the next 12 months, we anticipate spending approximately $20,000 for
business operations. The budget includes all anticipated costs associated with
technological requirements, professional fees-which include the filing of this
registration statement and future compliance with reporting obligations,
marketing expenses, and also various expenses related to maintaining an office
space.
In addition, our management team will contribute to the long-term growth and
success of the business by donating their time without charge to the business.
Directors will spend at least 25 to 30 hours per week on company business.
RESULTS OF OPERATIONS
REVENUES
We had no revenues for the periods from February 8, 2008 (date of inception) to
July 31, 2009 or to January 31, 2010.
EXPENSES
Our expenses for the twelve month periods ended July 31, 2009 and 2008, were
$33,714 and $7,187, respectively. During the period from February 8, 2008 (date
of inception), through July 31, 2009, we incurred expenses of $40,901. These
expenses were comprised primarily of office rent, legal expenses, accounting
expenses, SEC filing fees, transfer agent fees, as well as bank fees.
Our expenses for the three month periods ended January 31, 2010 and 2009, were
$4,630 and $713, respectively. Our expenses for the six month periods ended
January 31, 2010 and 2009, were $12,280 and $20,353, respectively. During the
21
period from February 8, 2008 (date of inception), through January 31, 2010, we
incurred expenses of $50,448. These expenses were comprised primarily of legal,
accounting, administration, and web site development fees.
NET INCOME (LOSS)
Our net loss for the twelve-month periods ended July 31, 2009, and 2008, were
$33,714 and $7,187, respectively. During the period from February 8, 2008 (date
of inception), through July 31, 2009, we incurred a net loss of $40,901. This
loss consisted of office rent, legal expenses, accounting expenses, SEC filing
fees, transfer agent fees, as well as bank fees.
Our net loss for the three month periods ended January 31, 2010 and 2009 were
$4,630 and $713, respectively. Our net loss for the six month periods ended
January 31, 2010 and 2009 were $12,280 and $20,353, respectively. During the
period from February 8, 2008 (date of inception) through January 31, 2010, we
incurred a net loss of $50,448. This loss consisted primarily of incorporation
costs, professional fees and filing fees.
Since inception, we have sold 2,140,000 shares of common stock.
PURCHASE OR SALE OF EQUIPMENT
We do not expect to purchase or sell any plant or significant equipment. We have
leased web hosting space needed for hosting our website at a cost of $240
annually.
LIQUIDITY AND CAPITAL RESOURCES
Our balance sheet as of July 31, 2009, reflects assets of $24,366 in the form of
cash, prepaid expenses and a website. Our balance sheet as of January 31, 2010,
reflects assets of $12,437. Since inception, we have sold 2,140,000 shares of
common stock with gross proceeds of $47,000. Cash and cash equivalents from
inception to date have been insufficient to provide the working capital
necessary to operate to date.
We anticipate generating losses and, therefore, may be unable to continue
operations in the future. If we require additional capital, we would have to
issue debt or equity or enter into a strategic arrangement with a third party.
There can be no assurance that additional capital will be available to us. We
currently have no agreements, arrangements or understandings with any person to
obtain funds through bank loans, lines of credit or any other sources.
GOING CONCERN CONSIDERATION
Our registered independent auditors included an explanatory paragraph in their
report on the accompanying financial statements 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 registered independent auditors.
In the past, we have been able to raise a limited amount of capital through
private placements of our equity stock, but we are uncertain about our continued
ability to raise funds privately. If we are unable to secure adequate capital to
implement our current business plan, our business may fail and our stockholders
may lose some or all of their investment.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
We have not had changes in or disagreements with accountants on accounting and
financial disclosure.
22
DIRECTORS AND EXECUTIVE OFFICERS
Our executive officers and directors and their respective ages as of the date of
this prospectus are as follows:
DIRECTORS:
Name of Director Age
---------------- ---
Ronald C. Dela Cruz 33
David Marby 28
EXECUTIVE OFFICER:
Name of Officer Age Position
--------------- --- --------
Ronald C. Dela Cruz 33 President
BIOGRAPHICAL INFORMATION
Set forth below is a brief description of the background and business experience
of our executive officer and director for the past five years.
RONALD C. DELA CRUZ, PRESIDENT AND BOARD MEMBER. Mr. Dela Cruz is currently
employed as a PhP software developer for CitizensSoft Inc. in the Philippines
where he has worked since February of 2007. Prior to that he held a similar
position as a PhP software developer at the Institute for Popular Democracy
where he worked on web based database management software products beginning in
2005. In this role, Mr. Dela Cruz was involved in both the software development
and the migration to a web-based platform for users. Prior to that, from 2002 to
2005, he worked as an independent software developer on projects related to
wireless, multimedia, web development and artificial intelligence. Mr. Dela Cruz
has worked extensively with Java, ASP, PhP, MySQL, PostgreSQL and C++. Prior to
working as a freelance developer he worked for UP Diliman as a Graduate Research
Assistant from June 2000 to April 2002 and at Software Brewers Inc. in the
Philippines from July 1997 to April 1999.
He graduated with a Bachelor's degree in Computer Science / Information
Technology from the Polytechnic University of the Philippines in April 1997.
Since then he has completed 30 units of credit towards his Masters degree in
Computer Science.
DAVID MARBY, BOARD MEMBER. Mr. Marby is currently employed as a Senior Account
Manager for Pixel Pro Design Studio in the Philippines, a position he held since
October 2006. His responsibilities include all aspects of sales and marketing
account management activities. Between January 2005 and September 2006, Mr.
Marby was employed as the Customer Service Representative (CSR) Supervisor at
Wi-Max Business Innovations Inc. His job responsibilities included handling all
customer requests as well as sales enquiries. He assisted the sales staff in
resolving problems brought forth by the company's customers and handled various
aspects of staff operations.
Mr. Marby attended the Technological Institute of the Philippines from 1997 to
1998 with a focus on Civil Engineering. From 1998 to 2000, he attended AMA
Computer Learning Center where he focused on computer system design and
programming courses.
TERM OF OFFICE
Our directors are appointed for a one-year term to hold office until the next
annual meeting of our shareholders or until removed from office in accordance
with our bylaws. Our officers are appointed by our board of directors and hold
office until removed by the board.
BOARD COMMITTEES
To date, our Board of Directors has not established a nominating and governance
committee, a compensation committee, nor an audit committee.
CODE OF ETHICS
We currently do not have a Code of Ethics.
23
EXECUTIVE COMPENSATION
The particulars of compensation paid to the following persons during the fiscal
period ended July 31, 2009 are set out in the summary compensation table below:
* our Chief Executive Officer (Principal Executive Officer);
* our Chief Financial Officer (Principal Financial Officer);
* each of our three most highly compensated executive officers, other
than the Principal Executive Officer and the Principal Financial
Officer, who were serving as executive officers at the end of the
fiscal year ended July 31, 2009; 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 July 31, 2009 (collectively, the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
Fiscal Non-Equity Nonqualified
Name and Year Incentive Deferred
Principal Ended Stock Option Plan Compensation All Other
Position July 31, Salary($) Bonus($) Awards($) Awards($) Compensation($) Earnings($) Compensation($) Totals($)
-------- -------- --------- -------- --------- --------- --------------- ----------- --------------- ---------
Ronald Dela 2009 0 0 0 0 0 0 0 0
Cruz (1) 2008 0 0 0 0 0 0 0 0
President/Board
Member
----------
(1) Mr. Dela Cruz has been our President and a Director since we were
incorporated on February 8, 2008.
OUTSTANDING EQUITY AWARDS AT 2009 FISCAL YEAR END
Option Awards Stock Awards
---------------------------------------------------------------- ------------------------------------------------
Equity
Incentive
Equity Plan
Incentive Awards:
Plan Market or
Awards: Payout
Equity Number of Value of
Incentive Number Unearned Unearned
Plan Awards; of Market Shares, Shares,
Number of Number of Number of Shares Value of Units or Units or
Securities Securities Securities or Units Shares or Other Other
Underlying Underlying Underlying of Stock Units of Rights Rights
Unexercised Unexercised Unexercised Option Option That Stock That That That
Options Options Unearned Exercise Expiration Have Not Have Not Have Not Have Not
Name Exercisable(#) Unexercisable(#) Options(#) Price($) Date Vested(#) Vested($) Vested(#) Vested(#)
---- -------------- ---------------- ---------- ----- ---- --------- --------- --------- ---------
Ronald -- -- -- -- -- -- -- -- --
Dela Cruz
OPTION GRANTS AND EXERCISES
There were no option grants or exercises by any of the executive officers named
in the Summary Compensation Table above.
EMPLOYMENT AGREEMENTS
We have not entered into employment and/or consultant agreements with our
Directors and officers.
COMPENSATION OF DIRECTORS
All directors receive reimbursement for reasonable out-of-pocket expenses in
attending board of directors meetings and for promoting our business. From time
to time we may engage certain members of the board of directors to perform
24
services on our behalf. In such cases, we compensate the members for their
services at rates no more favorable than could be obtained from unaffiliated
parties. Our directors have not received any compensation for the fiscal year
ended July 31, 2009.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table below sets forth the number and percentage of shares of our common
stock owned as of March 9, 2010, by the following persons: (i) stockholders
known to us who own 5% or more of our outstanding shares, (ii) each of our
Directors, and (iii) our officers and Directors as a group. Unless otherwise
indicated, each of the stockholders has sole voting and investment power with
respect to the shares beneficially owned.
Our total authorized capital stock consists of 100,000,000 shares of common
stock, par value $0.001 per share. As of March 9, 2010, there were 2,140,000
shares of our common stock outstanding, all of which were fully paid,
non-assessable and entitled to vote. Each share of our common stock entitles its
holder to one vote on each matter submitted to our stockholders. As of the date
of this prospectus, there were no shares of preferred stock issued and
outstanding.
Amount and
Nature of
Beneficial Percentage
Title of Class Name and Address of Beneficial Owner Ownership (1) of Class (2)
-------------- ------------------------------------ ------------- ------------
Common Stock Ronald Dela Cruz 750,000 35.09%
Common Stock David Marby 750,000 35.09%
All directors and officers as a group (2 persons) 1,500,000 70.09%
----------
(1) Pursuant to the rules and regulations of the Securities and Exchange
Commission, shares of common stock that an individual or group has a right
to acquire within 60 days pursuant to the exercise of options or warrants
are deemed to be outstanding for the purposes of computing the percentage
ownership of such individual or group, but are not deemed to be outstanding
for the purposes of computing the percentage ownership of any other person
shown in the table.
(2) Based on 2,140,000 shares of our common stock outstanding.
CHANGES IN CONTROL
There are no existing arrangements that may result in a change in control of the
Company.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS.
The following table sets forth information regarding our equity compensation
plans.
Number of Number of
Securities to be Securities
Issued upon Weighted Average Remaining
Exercise of Exercise Price of Available for
Outstanding Outstanding Future Issuance
Options, Warrants Options, Warrants under Equity
Plan category and Rights and Rights Compensation Plans
------------- ---------- ---------- ------------------
(a) (b) (c)
Equity compensation plans approved by security holders -- -- --
Equity compensation plans not approved by security holders -- -- --
Total -- -- --
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Other than the transactions discussed below, we have not entered into any
transaction nor are there any proposed transactions in which any of our
Directors, executive officers, stockholders or any member of the immediate
family of any of the foregoing had or is to have a direct or indirect material
interest.
25
As at July 31, 2009, there is a balance owing to a stockholder of the Company in
the amount of $12,034.
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities that become available. They may face a conflict in selecting
between the Company and other business interests. The Company has not formulated
a policy for the resolution of such conflicts.
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and controlling persons
of the small business issuer pursuant to the foregoing provisions, or otherwise,
the Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the
Securities Act with respect to the shares of common stock described herein. This
prospectus, which constitutes part of the registration statement, does not
include all of the information contained in the registration statement. You
should refer to the registration statement and its exhibits for additional
information. Whenever we make reference in this prospectus to any of our
contracts, agreements or other documents, the references are not necessarily
complete and you should refer to the exhibits attached to the registration
statement or incorporated by referenced therein for copies of the actual
contract, agreement or other document. We are currently required to file annual,
quarterly and special reports, proxy statements and other information with the
SEC. We anticipate making these documents publicly available, free of charge, on
our website at www.solmaya.net as soon as reasonably practicable after filing
such documents with the SEC. The information on our website is not incorporated
by reference into this prospectus and should not be considered to be a part of
this prospectus. We have included our website address as an inactive textual
reference only.
You can read the registration statement and our future filings with the SEC,
over the Internet at the SEC's web site at http://www.sec.gov. You may also read
and copy any document that we file with the SEC at its public reference room at
100 F Street, N.E., Washington, DC 20549.
You may also obtain copies of the documents at prescribed rates by writing to
the Public Reference Section of the SEC at 100 F Street, N.E., Washington, DC
20549. Please call the SEC at 1-800-SEC-0330 for further information on the
operation of the public reference room.
26
NETVENTORY SOLUTIONS, INC.
640,000 SHARES
OF
COMMON STOCK
PROSPECTUS
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR THAT WE
HAVE REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS PROSPECTUS IS NOT AN OFFER TO SELL COMMON
STOCK AND IS NOT SOLICITING AN OFFER TO BUY COMMON STOCK IN ANY STATE WHERE THE
OFFER OR SALE IS NOT PERMITTED.
UNTIL _________________, 2010, ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE
SECURITIES, WHETHER OR NOT PARTICIPATING IN THE OFFERING, MAY BE REQUIRED TO
DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER
A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.
______________, 2010
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth estimated expenses expected to be incurred in
connection with the issuance and distribution of the securities being
registered. All such expenses will be paid by us. The amounts listed below are
estimates subject to future contingencies.
Expenses: Dollar amount
--------- -------------
Securities and Exchange Commission Registration Fee $ 1.26
Edgarization, Printing and Engraving $ 1,000.00
Accounting Fees and Expenses $ 4,300.00
Legal Fees and Expenses $15,000.00
Miscellaneous $ 5,000.00
----------
TOTAL $25,301.26
==========
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
(a) Indemnification of Directors and Officers.
(i) For purposes of this Article, (A) "Indemnitee" shall mean each
director or officer who was or is a party to, or is threatened to be
made a party to, or is otherwise involved in, any Proceeding (as
hereinafter defined), by reason of the fact that he or she is or was a
director or officer of the corporation or member, manager or managing
member of a predecessor limited liability company or affiliate of such
limited liability company or is or was serving in any capacity at the
request of the corporation as a director, officer, employee, agent,
partner, member, manager or fiduciary of, or in any other capacity
for, another corporation or any partnership, joint venture, limited
liability company, trust, or other enterprise; and (B) "Proceeding"
shall mean any threatened, pending, or completed action, suit or
proceeding (including, without limitation, an action, suit or
proceeding by or in the right of the corporation), whether civil,
criminal, administrative, or investigative.
(ii) Each Indemnitee shall be indemnified and held harmless by the
corporation to the fullest extent permitted by Nevada law, against all
expense, liability and loss (including, without limitation, attorneys'
fees, judgments, fines, taxes, penalties, and amounts paid or to be
paid in settlement) reasonably incurred or suffered by the Indemnitee
in connection with any Proceeding; provided that such Indemnitee
either is not liable pursuant to NRS 78.138 or acted in good faith and
in a manner such Indemnitee reasonably believed to be in or not
opposed to the best interests of the corporation and, with respect to
any Proceeding that is criminal in nature, had no reasonable cause to
believe that his or her conduct was unlawful. The termination of any
Proceeding by judgment, order, settlement, conviction or upon a plea
of nolo contendere or its equivalent, does not, of itself, create a
presumption that the Indemnitee is liable pursuant to NRS 78.138 or
did not act in good faith and in a manner in which he or she
reasonably believed to be in or not opposed to the best interests of
the corporation, or that, with respect to any criminal proceeding he
or she had reasonable cause to believe that his or her conduct was
unlawful. The corporation shall not indemnify an Indemnitee for any
claim, issue or matter as to which the Indemnitee has been adjudged by
a court of competent jurisdiction, after exhaustion of all appeals
therefrom, to be liable to the corporation or for any amounts paid in
settlement to the corporation, unless and only to the extent that the
court in which the Proceeding was brought or other court of competent
jurisdiction determines upon application that in view of all the
circumstances of the case, the Indemnitee is fairly and reasonably
entitled to indemnity for such amounts as the court deems proper.
Except as so ordered by a court and for advancement of expenses
pursuant to this Section, indemnification may not be made to or on
behalf of an Indemnitee if a final adjudication establishes that his
or her acts or omissions involved intentional misconduct, fraud or a
knowing violation of law and was material to the cause of action.
(iii) Indemnification pursuant to this Section shall continue as to an
Indemnitee who has ceased to be a director or officer of the
corporation or member, manager or managing member of a predecessor
limited liability company or affiliate of such limited liability
company or a director, officer, employee, agent, partner, member,
manager or fiduciary of, or to serve in any other capacity for,
another corporation or any partnership, joint venture, limited
liability company, trust, or other enterprise and shall inure to the
benefit of his or her heirs, executors and administrators.
(iv) The expenses of Indemnitees must be paid by the corporation or through
insurance purchased and maintained by the corporation or through other
financial arrangements made by the corporation, as they are incurred
II-1
and in advance of the final disposition of the Proceeding, upon
receipt of an undertaking by or on behalf of the director or officer
to repay the amount if it is ultimately determined by a court of
competent jurisdiction that he or she is not entitled to be
indemnified by the corporation. To the extent that a director or
officer of the corporation is successful on the merits or otherwise in
defense of any Proceeding, or in the defense of any claim, issue or
matter therein, the corporation shall indemnify him or her against
expenses, including attorneys' fees, actually and reasonably incurred
in by him or her in connection with the defense.
(b) Indemnification of Employees and Other Persons. The corporation may, by
action of its Board of Directors and to the extent provided in such action,
indemnify employees and other persons as though they were Indemnitees.
(c) Non-Exclusivity of Rights. The rights to indemnification provided in this
Article shall not be exclusive of any other rights that any person may have or
hereafter acquire under any statute, provision of the Articles of Incorporation
or these Bylaws, agreement, vote of stockholders or directors, or otherwise.
(d) Insurance. The corporation may purchase and maintain insurance or make other
financial arrangements on behalf of any Indemnitee for any liability asserted
against him or her and liability and expenses incurred by him or her in his or
her capacity as a director, officer, employee, member, managing member or agent,
or arising out of his or her status as such, whether or not the corporation has
the authority to indemnify him or her against such liability and expenses.
(e) Other Financial Arrangements. The other financial arrangements which may be
made by the corporation may include the following (i) the creation of a trust
fund; (ii) the establishment of a program of self-insurance; (iii) the securing
of its obligation of indemnification by granting a security interest or other
lien on any assets of the corporation; (iv) the establishment of a letter of
credit, guarantee or surety. No financial arrangement made pursuant to this
subsection may provide protection for a person adjudged by a court of competent
jurisdiction, after exhaustion of all appeals therefrom, to be liable for
intentional misconduct, fraud, or a knowing violation of law, except with
respect to advancement of expenses or indemnification ordered by a court.
(f) Other Matters Relating to Insurance or Financial Arrangements. Any insurance
or other financial arrangement made on behalf of a person pursuant to this
Section may be provided by the corporation or any other person approved by the
Board of Directors, even if all or part of the other person's stock or other
securities is owned by the corporation. In the absence of fraud (i) the decision
of the Board of Directors as to the propriety of the terms and conditions of any
insurance or other financial arrangement made pursuant to this Section and the
choice of the person to provide the insurance or other financial arrangement is
conclusive; and (ii) the insurance or other financial arrangement is not void or
voidable and does not subject any director approving it to personal liability
for his action; even if a director approving the insurance or other financial
arrangement is a beneficiary of the insurance or other financial arrangement.
(g) Amendment. The provisions of this Article relating to indemnification shall
constitute a contract between the corporation and each of its directors and
officers which may be modified as to any director or officer only with that
person's consent or as specifically provided in this Section. Notwithstanding
any other provision of these Bylaws relating to their amendment generally, any
repeal or amendment of this Article which is adverse to any director or officer
shall apply to such director or officer only on a prospective basis, and shall
not limit the rights of an Indemnitee to indemnification with respect to any
action or failure to act occurring prior to the time of such repeal or
amendment. Notwithstanding any other provision of these Bylaws, no repeal or
amendment of these Bylaws shall affect any or all of this Article so as to limit
or reduce the indemnification in any manner unless adopted by the unanimous vote
of the directors of the corporation then serving; provided that no such
amendment shall have a retroactive effect inconsistent with the preceding
sentence.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
During the past three years, we sold unregistered securities as described below.
We believe that the issuances of the following securities were considered to be
exempt from registration under Section 4(2) of the Securities Act and/or Rule
506 of Regulation D promulgated there under. The purchasers of the securities in
such transactions represented their intention to acquire the securities for
investment purposes only and not with a view to or for sales in connection with
any distribution thereof and appropriate legends were affixed to the
certificates for the securities issued in such transactions. The purchasers of
the securities in the transactions below were each sophisticated investors who
were provided information about us and were able to bear the risk of loss of
their entire investment.
1. On February 8 2008, we issued 750,000 shares of our common stock to each
of Ronald C. Dela Crus, our President and director, and David Marby, our
director, for a purchase price of $0.01 per share, or aggregate proceeds of
$15,000 for an aggregate of 1,500,000 shares.
2. On June 30, 2008, we sold and issued an aggregate of 640,000 shares of
common stock to 32 individuals at a price of $0.05 per share, in one offering
for total proceeds of $32,000.
II-2
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits:
The following exhibits are filed as part of this registration statement:
Exhibit Description of Exhibit
------- ----------------------
3.1 Certificate of Incorporation of NetVentory Solutions, Inc. (Attached
as Exhibit 3.1 to our Registration Statement on Form S-1 originally
filed with the SEC on September 3, 2008 and incorporated herein by
reference.)
3.2 Bylaws of NetVentory Solutions, Inc. (Attached as an Exhibit 3.2 to
our Registration Statement on Form S-1 originally filed with the SEC
on September 3, 2008 and incorporated herein by reference.)
5.1 Opinion of Gersten Savage LLP. (Attached as an Exhibit 5.1 to our
Registration Statement on Form S-1 originally filed with the SEC on
September 3, 2008 and incorporated herein by reference.)
23.1 Consent of Silberstein Ungar, PLLC (formerly known as Maddox Ungar
Silberstein, PLLC).
23.2 Consent of Gersten Savage LLP (included in Exhibit 5.1).
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Act");
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most-recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
(5) That, for the purpose of determining liability under the Act to any
purchaser, each prospectus filed pursuant to Rule 424(b) as part of a
registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectuses filed in reliance on
Rule 430A, shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness. Provided,
however, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such first use, supersede or modify any statement
that was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to such
date of first use.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has
duly caused this Post-Effective Amendment No. 1 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized in the
City of Mandaluyong, Philippines on March 9, 2010.
NETVENTORY SOLUTIONS, INC.
By: /s/ Ronald C. Dela Cruz
-------------------------------------------
Ronald C. Dela Cruz
President (Principal Executive Officer,
Principal Financial Officer and
Principal Accounting Officer)
In accordance with the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement was signed by the
following persons in the capacities and on the dates stated.
Signature Capacity in Which Signed Date
--------- ------------------------ ----
/s/ Ronald C. Dela Cruz President and Director March 9, 2010
---------------------------------
Ronald C. Dela Cruz
/s/ David Marby Director March 9, 2010
---------------------------------
David Marby
II-5
EXHIBITS
Exhibit Description of Exhibit
------- ----------------------
3.1 Certificate of Incorporation of NetVentory Solutions, Inc. (Attached
as Exhibit 3.1 to our Registration Statement on Form S-1 originally
filed with the SEC on September 3, 2008 and incorporated herein by
reference.)
3.2 Bylaws of NetVentory Solutions, Inc. (Attached as an Exhibit 3.2 to
our Registration Statement on Form S-1 originally filed with the SEC
on September 3, 2008 and incorporated herein by reference.)
5.1 Opinion of Gersten Savage LLP. (Attached as an Exhibit 5.1 to our
Registration Statement on Form S-1 originally filed with the SEC on
September 3, 2008 and incorporated herein by reference.)
23.1 Consent of Silberstein Ungar, PLLC (formerly known as Maddox Ungar
Silberstein, PLLC).
23.2 Consent of Gersten Savage LLP (included in Exhibit 5.1).