0001269678-11-000196.txt : 20110330
0001269678-11-000196.hdr.sgml : 20110330
20110330164439
ACCESSION NUMBER: 0001269678-11-000196
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 10
CONFORMED PERIOD OF REPORT: 20101231
FILED AS OF DATE: 20110330
DATE AS OF CHANGE: 20110330
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: Fona, Inc.
CENTRAL INDEX KEY: 0000884363
STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770]
IRS NUMBER: 264369698
STATE OF INCORPORATION: NV
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 000-54129
FILM NUMBER: 11722621
BUSINESS ADDRESS:
STREET 1: 5353 MANHATTAN CIRCLE
STREET 2: #101
CITY: BOULDER
STATE: CO
ZIP: 80303
BUSINESS PHONE: 303.499.6000
MAIL ADDRESS:
STREET 1: 5353 MANHATTAN CIRCLE
STREET 2: #101
CITY: BOULDER
STATE: CO
ZIP: 80303
FORMER COMPANY:
FORMER CONFORMED NAME: PHONE A HOME CORP
DATE OF NAME CHANGE: 19930708
FORMER COMPANY:
FORMER CONFORMED NAME: FONAHOME CORP
DATE OF NAME CHANGE: 19930328
10-K
1
fona10k123110.txt
FORM 10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 2010
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ___________ to ___________
Commission file number: 000-53263
FONA, INC.
(Exact name of registrant as specified in its charter)
Nevada 41-1683548
------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5353 Manhattan Circle, Suite 101
Boulder, Colorado 80303
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (303) 499-6000
Securities registered pursuant to Section 12(b) of the Act:
Indicate by check mark if the registrant is a well-known seasonal issuer, as
defined in Rule 405 of the Securities Act. Yes |_| No |X|
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Act. Yes |_|No |X|
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days: Yes |X| No |_|
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulations S-T during the
preceding 12 months (or for such a shorter period that the registrant was
required to submit and post such files). Yes |X| No |_|
1
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein , and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of the Form 10-K or any amendment to the
Form 10-K. |X|
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large Accelerated |_| Non-accelerated Filer |_|
Accelerated Filer |_| Smaller Reporting Company |X|
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes |X| No |_|
The aggregate market value of the voting and non-voting common equity held by
non-affiliate computed by reference to the price at which the common equity was
last sold on the average bid and asked price of such common equity, as of the
last business day of the registrant's most recently completed fiscal quarter:
There is no quoted market for registrant's common stock.
Shares outstanding as of March 11, 2011 was approximately 7,894,111 shares of
common stock, $.001 par value.
DOCUMENTS INCORPORATED BY REFERENCE: None
2
PART I
ITEM 1. BUSINESS
Fona, Inc. (the "registrant" or "Company") was incorporated under the laws of
the state of Minnesota in November 1990 under the name Fonahome Corporation. On
March 24, 2009, the Company reincorporated in the state of Nevada and merged
with its wholly-owned subsidiary, Fona, Inc., adopting the surviving company's
name, Fona, Inc. The Company was originally formed to develop and market an
interactive information and advertising service.
Since December 1999, the Company has had no significant business operations
other than licensing its internet-based Rent411 services to Desfaire, Inc. a
company controlled by Nick T. Boosalis, a former officer and director of the
Company. During the nine-year period ended December 31, 2007, the Company's
aggregate revenues were approximately $409,000 consisting of license fees paid
by Desfaire, Inc. and its aggregate operating losses were approximately
$200,000. Approximately $454,000 of the Company's expenses during the nine-year
period related to fees paid to third parties to provide the Rent411 services.
The Company has opted to become a "blank check" company and to further engage in
any lawful corporate undertaking, including, but not limited to, selected
mergers and acquisitions.
On March 3, 2009, the Company held a shareholder meeting approving the Stock
Purchase Agreement and an Agreement and Plan of Merger effectively changing the
name of the Company to Fona Inc., a Nevada corporation ("Re-incorporation
Merger") and simultaneously adopting the capital structure of Fona Inc., which
includes total authorized capital stock of 800,000,000 shares, of which
780,000,000 are common stock and 20,000,000 are blank check preferred stock. The
preferred stock may be issued from time to time in one or more series with such
designations, preferences and relative participating, optional or other special
rights and qualifications, limitations or restrictions there of, as shall be
stated in the resolutions adopted by the Corporation's Board providing for the
issuance of such preferred stock or series thereof.
On March 3, 2009, the shareholders also approved and ratified a January 22, 2008
Assignment Agreement under which the Company assigned the software and other
rights relating to its Rent411 services, including the license with Desfaire,
Inc. and substantially all of its worldwide copyrights, trademarks and other
assets, consisting of fully depreciated office equipment and furniture with
nominal market value, to The Boosalis Group, Inc., a company owned by Nick T.
Boosalis, in consideration for which The Boosalis Group, Inc. assumed
outstanding indebtedness of the Company totaling $34,714 and the issuance of a
total of 1,980,834 shares of the Company's common stock, including: 498,237
shares approved in December 2007 and 39,957 in December 2008 to Nick T. Boosalis
for forgiveness of loans to the Company totaling $80,729; 322,047 shares
approved in December 2007 to Richard Dillion, a former officer and director of
the Company, for forgiveness of loans to the Company totaling $48,307; and
1,100,000 shares approved in December 2007 to Desfaire, Inc. for a cash payment
of $11,000 and the payment on behalf of the Company of software development
costs of more than $125,000.
On March 24, 2009, the Articles of Merger of Fonahome Corporation, a Minnesota
Corporation, into Fona, Inc., a Nevada Corporation, were filed with the Nevada
Secretary of State.
3
On April 1, 2009, the Board of Directors approved the issuance of 3,954,950
shares of our common stock (representing 50.1% of our outstanding shares of
common stock following the issuance of such stock) , including 1,977,475 shares
issued to each of Sanford Schwartz and Michael Friess, each subsequently elected
an officer and director of the Company, in consideration for the payment by each
of $10,000, $5,000 paid in cash and $5,000 paid by the issuance to the Company
of a promissory note. The notes were paid in May, 2009. On April 1, 2009,
following the stock issuances to Mr. Schwartz and Mr. Friess, there were
7,894,111 outstanding shares of our common stock.
On April 22, 2009, the Board of Directors accepted the resignation of Nick T
Boosalis and appointed Michael Friess as President, CEO, and Chairman of the
Board, Sanford Schwartz as Vice President and a director, and Chloe DiVita as
Secretary, Treasurer, CFO and a director of the Company.
Since December 2007, the Company has had insignificant operations. As such, the
Company may presently be defined as a "shell" company, whose sole purpose at
this time is to locate and consummate a merger or acquisition with a private
entity.
The Company has opted to register its common stock pursuant to section 12(g) of
the Securities Exchange Act of 1934 in an effort to maximize shareholder value.
The best use and primary attraction of the Company as a merger partner or
acquisition vehicle will be its status as a reporting public company. Any
business combination or transaction is expected to result in a significant
issuance of shares and substantial dilution to present stockholders of the
Company.
The proposed business activities described herein classify the
Company as a "blank check" company. Many states have enacted statutes, rules and
regulations limiting the sale of securities of "blank check" companies in their
respective jurisdictions. Management does not intend to undertake any additional
offerings of the Company's securities, either debt or equity, until such time as
the Company has successfully implemented its business plan described herein.
The Company maintains headquarters at the office of its President. The Company's
Web site is www.fonainc.com. The Company is not required to deliver an annual
report to security holders and at this time does not anticipate the distribution
of such a report. The Company will file reports with the SEC.
The public may read and copy any materials the Company files with the SEC in the
SEC's Public Reference Section, Room 1580, 100 F Street N.E., Washington, D.C.
20549. The public may obtain information on the operation of the Public
Reference Section by calling the SEC at 1-800-SEC-0330. Additionally, the SEC
maintains an Internet site that contains reports, proxy, and information
statements, and other information regarding issuers that file electronically
with the SEC, which can be found at http://www.sec.gov.
GENERAL BUSINESS PLAN
At this time, the Company's purpose is to seek, investigate and, if such
investigation warrants, acquire an interest in business opportunities presented
to it by persons or firms who seek or which desire to seek the perceived
advantages of an Exchange Act registered corporation. The Company will not
restrict its search to any specific business, industry, or geographical location
and the Company may participate in a business venture of virtually any kind or
nature. This discussion of the proposed business is intentionally general and is
not meant to be restrictive of the Company's virtually unlimited discretion to
search for and enter into potential business opportunities. Management
anticipates that it may be able to participate in only one potential business
venture because the Company has nominal assets and limited financial resources.
See "FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA." This lack of diversification
should be considered a substantial risk to shareholders of the Company because
it will not permit the Company to offset potential losses from one venture
against gains from another.
4
The Company may seek a business opportunity with entities which have recently
commenced operations, or which wish to utilize the public marketplace in order
to raise additional capital in order to expand into new products or markets, to
develop a new product or service, or for other corporate purposes. The Company
may acquire assets and establish wholly-owned subsidiaries in various businesses
or acquire existing businesses as subsidiaries.
The Company intends to advertise and promote the Company privately. The Company
has not yet prepared any notices or advertisements.
The Company anticipates that the selection of a business opportunity in which to
participate will be complex and extremely risky. Due to general economic
conditions, rapid technological advances being made in some industries and
shortages of available capital, management believes that there are numerous
firms seeking the perceived benefits of a publicly registered corporation. Such
perceived benefits may include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity for incentive
stock options or similar benefits to key employees, providing liquidity (subject
to restrictions of applicable statutes), for all shareholders and other factors.
The Company has, and will continue to have, little or no capital with which to
provide the owners of business opportunities with any significant cash or other
assets. However, management believes the Company will be able to offer owners of
acquisition candidates the opportunity to acquire a controlling ownership
interest in a publicly registered company without incurring the cost and time
required to conduct an initial public offering. The owners of the business
opportunities will, however, incur significant legal and accounting costs in
connection with the acquisition of a business opportunity, including the costs
of preparing Form 8-K's, 10-K's and 10-Q's, agreements and related reports and
documents. The Securities Exchange Act of 1934 (the "Exchange Act"),
specifically requires that any merger or acquisition candidate comply with all
applicable reporting requirements, which include providing audited financial
statements to be included within the numerous filings relevant to complying with
the Exchange Act. The officers and directors of the Company have not conducted
market research and are not aware of statistical data which would support the
perceived benefits of a merger or acquisition transaction for the owners of a
business opportunity.
The analysis of new business opportunities will be undertaken by, or under the
supervision of, the officers and directors of the Company. Management intends to
concentrate on identifying preliminary prospective business opportunities, which
may be brought to its attention through present associations of the Company's
officers and directors. In analyzing prospective business opportunities,
management will consider such matters as the available technical, financial and
managerial resources; working capital and other financial requirements; history
of operations, if any; prospects for the future; nature of present and expected
competition; the quality and experience of management services which may be
available and the depth of that management; the potential for further research,
development, or exploration; specific risk factors not now foreseeable but which
then may be anticipated to impact the proposed activities of the Company; the
potential for growth or expansion; the potential for profit; the perceived
public recognition of acceptance of products, services, or trades; name
identification; and other relevant factors. The Company will not acquire or
merge with any company for which audited financial statements cannot be obtained
prior to the closing of the proposed transaction.
The officers of the Company have limited experience in managing companies
similar to the Company and shall rely upon their own efforts, in accomplishing
the business purposes of the Company. The Company may from time to time utilize
outside consultants or advisors to effectuate its business purposes described
herein. No policies have been adopted regarding use of such consultants or
advisors, the criteria to be used in selecting such consultants or advisors, the
services to be provided, the term of service, or regarding the total amount of
fees that may be paid. However, because of the limited resources of the Company,
it is likely that any such fee the Company agrees to pay would be paid in stock
and not in cash.
5
The Company will not restrict its search for any specific kind of firms, but may
acquire a venture which is in its preliminary or development stage, which is
already in operation, or in essentially any stage of its corporate life. It is
impossible to predict at this time the status of any business in which the
Company may become engaged, in that such business may need to seek additional
capital, may desire to have its shares publicly traded, or may seek other
perceived advantages which the Company may offer. However, the Company does not
intend to obtain funds in one or more private placements to finance the
operation of any acquired business opportunity until such time as the Company
has successfully consummated such a merger or acquisition.
It is anticipated that the Company will require approximately $40,000 during the
next 12 months to implement its business plan described herein. The Company has
limited capital with which to pay these anticipated expenses. It is the intent
of management to provide the working capital necessary to support and preserve
the integrity of the Company but there is no legal obligation for management to
provide any additional funding to the Company. The Company has not identified
any alternative sources and there is substantial doubt about the Company's
ability to continue as a going concern.
COMPETITION
The Company will remain an insignificant participant among the firms which
engage in the acquisition of business opportunities. There are many established
venture capital and financial concerns which have significantly greater
financial and personnel resources and technical expertise than the Company. In
view of the Company's extremely limited financial resources and limited
management availability, the Company will continue to be at a significant
competitive disadvantage compared to the Company's competitors.
ITEM 1A. RISK FACTORS
A. Conflicts of Interest. There are certain conflicts of interest between us and
our officers and directors. They have other business interests to which they
currently devote attention, and are expected to continue to do so. As a result,
conflicts of interest may arise that can be resolved only through their exercise
of judgment in a manner which is consistent with their fiduciary duties to the
Company.
It is anticipated that our principal shareholders may actively negotiate or
otherwise consent to the purchase of all or a portion of their common stock as a
condition to, or in connection with, a proposed merger or acquisition
transaction. In this process, our principal shareholders may consider their own
personal pecuniary benefit rather than the best interests of our other
shareholders, and the other shareholders are not expected to be afforded the
opportunity to approve or consent to any particular stock buy-out transaction.
B. Need for Additional Financing. We have very limited funds, and such funds are
unlikely to be adequate to take advantage of any available business
opportunities. Even if our funds prove to be sufficient to acquire an interest
in, or complete a transaction with, a business opportunity, we may not have
enough capital to exploit the opportunity. Our ultimate success may depend upon
our ability to raise additional capital. We have not investigated the
availability, source, or terms that might govern the acquisition of additional
capital and will not do so until we determine a need for additional financing.
6
If additional capital is needed, there is no assurance that funds will be
available from any source or, if available, that they can be obtained on terms
acceptable to us. If such funds are not available, our operations will be
limited to those that can be financed with our modest capital.
C. Regulation of Penny Stocks. Our securities, when available for trading, will
be subject to a Securities and Exchange Commission rule that imposes special
sales practice requirements upon broker-dealers who sell such securities to
persons other than established customers or accredited investors. For purposes
of the rule, the phrase "accredited investors" means, in general terms,
institutions with assets in excess of $5,000,000, or individuals having a net
worth in excess of $1,000,000 or having an annual income that exceeds $200,000
(or that, when combined with a spouse's income, exceeds $300,000). For
transactions covered by the rule, the broker-dealer must make a special
suitability determination for the purchaser and receive the purchaser's written
agreement to the transaction prior to the sale. Consequently, the rule may
affect the ability of broker-dealers to sell our securities and also may affect
the ability of our shareholders in this offering to sell their securities in any
market that might develop.
Shareholders should be aware that, according to Securities and Exchange
Commission Release No. 34-29093, the market for penny stocks has suffered from
patterns of fraud and abuse. Such patterns include (i) control of the market for
the security by one or a few broker-dealers that are often related to the
promoter or issuer; (ii) manipulation of prices through prearranged matching of
purchases and sales and false and misleading press releases; (iii) "boiler room"
practices involving high-pressure sales tactics and unrealistic price
projections by inexperienced sales persons; (iv) excessive and undisclosed
bid-ask differentials and markups by selling broker-dealers; and (v) the
wholesale dumping of the same securities by promoters and broker-dealers after
prices have been manipulated to a desired level, along with the resulting
inevitable collapse of those prices and with consequent investor losses. The
Company's management is aware of the abuses that have occurred historically in
the penny stock market. Although we do not expect to be in a position to dictate
the behavior of the market or of broker-dealers who participate in the market,
management will strive within the confines of practical limitations to prevent
the described patterns from being established with respect to our securities.
D. No Operating History or Revenue and Minimal Assets. The Company has had no
operating history nor any revenues or earnings from operations since 1999. The
Company has no significant assets or significant financial resources. The
Company will, in all likelihood, sustain operating expenses without
corresponding revenues, at least until the consummation of a business
combination. This may result in the Company incurring a net operating loss which
will increase continuously until the Company can consummate a business
combination with a profitable business opportunity. There is no assurance that
the Company can identify such a business opportunity and consummate such a
business combination.
E. No Assurance of Success or Profitability. There is no assurance that we will
acquire a business opportunity. Even if we should become involved in a business
opportunity, there is no assurance that it will generate revenues or profits, or
that the market price of our common stock will be increased thereby.
F. Possible Business - Not Identified and Highly Risky. We have not identified
and have no commitments to enter into or acquire a specific business
opportunity. Therefore we can disclose the risks and hazards of a business or
opportunity that we may enter into in only a general manner, and cannot disclose
the risks and hazards of any specific business or opportunity. An investor can
expect a potential business opportunity to be quite risky. Our acquisition of or
participation in a business opportunity will likely be highly illiquid and could
result in a total loss to us and our shareholders if the business or opportunity
proves to be unsuccessful.
7
G. Type of Business Acquired. The type of business to be acquired may be one
that desires to avoid affecting its own public offering and the accompanying
expense, delays, uncertainties, and federal and state requirements which purport
to protect investors. Because of our limited capital, it is more likely than not
that any acquisition will involve other parties whose primary interest is the
acquisition of control of a publicly traded company. Moreover, any business
opportunity acquired may be currently unprofitable or present other negative
factors.
H. Impracticability of Exhaustive Investigation. Our limited funds and the lack
of full-time management will likely make it impracticable to conduct a complete
and exhaustive investigation and analysis of a business opportunity before we
commit to such opportunity. Management decisions, therefore, will likely be made
without detailed feasibility studies, independent analysis, market surveys and
the like, which, if we had more funds, would be desirable. We will be
particularly dependent in making decisions upon information provided by the
promoter, owner, sponsor, or others associated with the business opportunity
seeking our participation. A significant portion of our available funds may be
expended for investigative expenses and other expenses related to preliminary
aspects of completing an acquisition transaction, whether or not any business
opportunity investigated is eventually acquired.
I. Lack of Diversification. Because of our limited financial resources, it is
unlikely that we will be able to diversify our acquisitions or operations. This
probable inability to diversify our activities into more than one area will
subject us to economic fluctuations within a particular business or industry and
therefore increase the risks associated with our operations.
J. Requirement of Audited Financial Statements May Disqualify Business
Opportunities. Management of the Company believes that any potential business
opportunity must provide audited financial statements for review, and for the
protection of all parties to the business combination. One or more attractive
business opportunities may choose to forego the possibility of a business
combination with the Company, rather than incur the expenses associated with
preparing audited financial statements.
K. Other Regulation. An acquisition we make may be of a business that is subject
to regulation or licensing by federal, state, or local authorities. Compliance
with such regulations and licensing can be expected to be a time-consuming,
expensive process and may limit our other investment opportunities.
L. Dependence Upon Management; Limited Participation of Management. We will be
heavily dependent upon the skills, talents, and abilities of our officers and
directors to implement our business plan, and may, from time to time, find that
the inability of such persons to devote their full-time attention to our
business results in a delay in progress toward implementing our business plan.
Furthermore, we will be entirely dependent upon the experience of our officers
and directors in seeking, investigating, and acquiring a business and in making
decisions regarding our operations. Because investors will not be able to
evaluate the merits of our possible business acquisitions, they should
critically assess the information concerning our officers and directors.
M. Lack of Continuity in Management. The Company does not have an employment
agreement with any of its officers or directors, and as a result, there is no
assurance that they will continue to manage the Company in the future. In
connection with the acquisition of a business opportunity, it is likely the
current officers and directors of the Company will resign. A decision to resign
will be based upon the identity of the business opportunity and the nature of
the transaction, and is likely to occur without the vote or consent of the
shareholders of the Company.
8
N. Indemnification of Officers and Directors. Our Articles of Incorporation
provide that we will indemnify our directors, officers, employees, and agents to
the fullest extent permitted by Nevada law. We will also bear the expenses of
such litigation for any of our directors, officers, employees, or agents, upon
such person's promise to repay us if it is ultimately determined that any such
person shall not have been entitled to indemnification. This indemnification
policy could result in substantial expenditures which we may be unable to
recoup.
O. Dependence Upon Outside Advisors. To supplement the business experience of
our officers and directors, we may be required to employ accountants, technical
experts, appraisers, attorneys, or other consultants or advisors. The selection
of any such advisors will be made by our officers without any input from
shareholders. Furthermore, it is anticipated that such persons may be engaged on
an "as needed" basis without a continuing fiduciary or other obligation to the
Company. In the event management considers it necessary to hire outside
advisors, they may elect to hire persons who are affiliates, if they are able to
provide the required services.
P. Leveraged Transactions. There is a possibility that any acquisition of a
business opportunity we make may be leveraged, i.e., we may finance the
acquisition of the business opportunity by borrowing against the assets of the
business opportunity to be acquired, or against the projected future revenues or
profits of the business opportunity. This could increase our exposure to losses.
A business opportunity acquired through a leveraged transaction is profitable
only if it generates enough revenues to cover the related debt and expenses.
Failure to make payments on the debt incurred to purchase the business
opportunity could result in the loss of a portion or all of the assets acquired.
There is no assurance that any business opportunity acquired through a leveraged
transaction will generate sufficient revenues to cover the related debt and
expenses.
Q. Competition. The search for potentially profitable business opportunities is
intensely competitive. We expect to be at a disadvantage when competing with
many firms that have substantially greater financial and management resources
and capabilities than we do. These competitive conditions will exist in any
industry in which we may become interested.
R. No Foreseeable Dividends. We have not paid cash dividends on our common stock
and do not anticipate paying such dividends in the foreseeable future.
S. Loss of Control by Present Management and Shareholders. We may consider an
acquisition in which we would issue as consideration for the business
opportunity to be acquired, an amount of our authorized but unissued common
stock that would, upon issuance, represent the great majority of the voting
power and equity of the Company. The result of such an acquisition would be that
the acquired company's shareholders and management would control the Company,
and our management could be replaced by persons unknown at this time. Such a
merger would result in a greatly reduced percentage of ownership by our current
shareholders.
T. Limited Public Market Exists. There is only a very limited public market for
our common stock, and no assurance can be given that an active market will
develop or that a shareholder ever will be able to liquidate his investment
without considerable delay, if at all. If a market should develop, the price may
be highly volatile. Factors such as those discussed in this "Risk Factors"
section may have a significant impact upon the market price of our securities.
Because of the low price of the securities, many brokerage firms may not be
willing to effect transactions in the securities. Even if a purchaser finds a
broker willing to effect a transaction in our securities, the combination of
brokerage commissions, state transfer taxes, if any, and any other selling costs
may exceed the selling price. Further, many lending institutions will not permit
the use of such securities as collateral for any loans.
9
U. Concerns regarding the current economic situation. The United States and the
global business community is experiencing severe instability in the commercial
and investment banking systems which is likely to continue to have far-reaching
effects on the economic activity in the country for an indeterminable period.
The long-term impact on the United States economy and the Company's operating
activities and ability to raise capital cannot be predicted at this time, but
may be substantial.
V. Potential Acquisitions. If we enter into a business combination with a
foreign company, we will be subject to risks inherent in business operations
outside of the United States. These risks include, for example, currency
fluctuations, regulatory problems, punitive tariffs, unstable local tax
policies, trade embargoes, risks related to shipment of raw materials and
finished goods across national borders and cultural and language differences.
Foreign economies may differ favorably or unfavorably from the United States
economy in growth of gross national product, rate of inflation, market
development, rate of savings, and capital investment, resource self-sufficiency
and balance of payment positions, and in other respects.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 2. PROPERTIES
The Company has no properties and at this time has no agreements to acquire any
properties. The Company currently maintains a mailing address at 5353 Manhattan
Circle, Suite 101, Boulder, CO 80303, which is the address of its President. The
Company pays no rent for the use of this mailing address. The Company does not
believe that it will need to maintain an office at any time in the foreseeable
future in order to carry out its plan of operations described herein.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a part to any pending legal proceedings, and no such
proceedings are known to be contemplated.
ITEM 4. REMOVED AND RESERVED
10
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND
ISSUER PURCHASES OF EQUITY SECURITIES
There is only a very limited market for the Company's securities. As of March
11, 2011 the Company's securities were included on the bulletin board under the
symbol FNAM. During the past two years, there have been no transactions in the
Company's common stock reported in the so-called "Grey Sheets". There are no
outstanding options or warrants to purchase shares of common stock or securities
convertible into shares of the Company's common stock. The Company has no
obligations to register any of its shares of common stock under the Securities
Act of 1933. As of March 30, 2011, 873,191 of the Company's outstanding shares
were eligible for transfer without registration under the Securities Act.
As of March 30, 2011, there were approximately 272 holders of the Company's
Common Stock.
No dividends have been paid by the Company on any of its securities since the
renewal of its charter and such dividends are not contemplated in the
foreseeable future.
ITEM 6. SELECTED FINANCIAL DATA
Years Ended Period From
December 31, December 31, August 1, 2008 to
2010 2009 December 31, 2010
----------------- ----------------- -----------------
Revenues $ -- $ --
Expenses (23,527) (16,020) (52,178)
Net loss (23,527) (16,020) (52,178)
Assets 365 18,950 365
Liabilities 31,523 26,581 31,523
Shareholder
Deficit (31,158) (7,631) (31,158)
ITEM 7. MANAGEMENTS DICUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF
OPERATIONS
Overview
The Company generated no revenues during the year ended December 31, 2010, and
management does not anticipate any revenues until following the conclusion of a
merger or acquisition, if any, as contemplated by the Company's business plan.
The Company has limited capital. The Company anticipates operational costs will
be limited until the conclusion of a merger or acquisition, if any.
At December 31, 2010, the Company had no material commitments for capital
expenditures.
General
Our principal business objective for the next 12 months and beyond such time
will be to achieve long-term growth potential through a combination with a
business rather than immediate, short-term earnings. The Company will not
restrict our potential candidate target companies to any specific business,
industry or geographical location and, thus, may acquire any type of business.
The Company does not currently engage in any business activities that provide
cash flow. The Company may consider a business which has recently commenced
operations, is a developing company in need of additional funds for expansion
into new products or markets, is seeking to develop a new product or service, or
is an established business which may be experiencing financial or operating
difficulties and is in need of additional capital. In the alternative, a
business combination may involve the acquisition of, or merger with, a company
which does not need substantial additional capital, but which desires to
establish a public trading market for its shares, while avoiding, among other
things, the time delays, significant expense, and loss of voting control which
may occur in a public offering.
11
None of our officers or our directors has had any direct and/or preliminary
contact or discussions with any representative of any other entity regarding a
business combination with us. Any target business that is selected may be a
financially unstable company or an entity in its early stages of development or
growth, including entities without established records of sales or earnings. In
that event, we will be subject to numerous risks inherent in the business and
operations of financially unstable and early stage or potential emerging growth
companies. In addition, we may effect a business combination with an entity in
an industry characterized by a high level of risk, and, although our management
will endeavor to evaluate the risks inherent in a particular target business,
there can be no assurance that we will properly ascertain or assess all
significant risks.
The Company anticipates that the selection of a business combination will be
complex and extremely risky. Because of general economic conditions, rapid
technological advances being made in some industries and shortages of available
capital, our management believes that there are numerous firms seeking the
perceived benefits of becoming a publicly traded corporation. Such perceived
benefits of becoming a publicly traded corporation include, among other things,
facilitating or improving the terms on which additional equity financing may be
obtained, providing liquidity for the principals of and investors in a business,
creating a means for providing incentive stock options or similar benefits to
key employees, and offering greater flexibility in structuring acquisitions,
joint ventures and the like through the issuance of stock. Potentially available
business combinations may occur in many different industries and at various
stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities extremely difficult
and complex.
Liquidity and Capital Resources.
The Company has no operating history as a "blank check" company and no material
assets. At December 31, 2010 the Company had an accumulated deficit (including
accumulated deficit during the development stage) of ($1,253,118) and a working
capital deficit ($31,158). The report of the Company's registered public
accountants for the financial statements for the year ended December 31, 2010
included a going concern qualification.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Not required by smaller reporting companies.
12
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
INDEX TO FINANCIAL STATEMENTS
FONA, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
with
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Report of Independent Registered Public Accounting Firm F-2
Financial Statements:
Balance Sheets F-3
Statements of Operations F-4
Statement of Changes in Stockholders' (Deficit) F-5
Statements of Cash Flows F-6
Notes to Financial Statements F-7
F-1
13
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
Fona, Inc.
We have audited the accompanying balance sheets of Fona, Inc. (a Development
Stage Company) as of December 31, 2010 and 2009, and the related statements of
operations, stockholders' (deficit), and cash flows for the two years ended
December 31, 2010 and 2009, and for the period from August 1, 2008 (date of
commencement of development stage) through December 31, 2010. 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 audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit 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 also includes
examining on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Fona, Inc. (a Development Stage
Company) as of December 31, 2010 and 2009, and the results of its operations and
its cash flows for the two years ended December 31, 2010 and 2009, and for the
period from August 1, 2008 (date of commencement of development stage) through
December 31, 2010, in conformity with accounting principles generally accepted
in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As described in Note 1, the Company
has no business operations and has negative working capital and stockholders'
deficits, which raise substantial doubt about its ability to continue as a going
concern. Management's plan in regard to this matter is also discussed in Note 1.
The financial statements do not include any adjustments that might result from
the outcome of these uncertainties.
/s/ Schumacher & Associates, Inc.
Schumacher & Associates, Inc.
Certified Public Accountants
2525 Fifteenth Street, Suite 3H
Denver, Colorado 80211
March 30, 2011
F-2
14
FONA, INC.
(A Development Stage Company)
BALANCE SHEETS
ASSETS
December 31, December 31,
2010 2009
------------ ------------
Current Assets:
Cash $ 15 $ 18,600
Prepaid Expenses 350 350
------------ ------------
Total Current Assets 365 18,950
------------ ------------
TOTAL ASSETS $ 365 $ 18,950
============ ============
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current Liabilities:
Accounts payable $ 7,554 $ 12,079
Accounts payable, related parties 21,665 14,502
Accrued expenses 2,304 --
------------ ------------
Total Current Liabilities 31,523 26,581
------------ ------------
TOTAL LIABILITIES 31,523 26,581
------------ ------------
Commitments and contingencies
(Notes 3 and 4)
Stockholders' (DEFICIT)
Preferred stock, $.001 par value
20,000,000 shares authorized,
no shares issued and outstanding -- --
Common stock, $.001 par value
780,000,000 shares authorized,
7,894,111 issued and outstanding 7,894 7,894
Additional paid-in capital 1,214,066 1,214,066
Accumulated (Deficit) (1,200,940) (1,200,940)
Accumulated (Deficit) during the
Development stage (52,178) (28,651)
------------ ------------
TOTAL STOCKHOLDERS' (DEFICIT) (31,158) (7,631)
------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' (DEFICIT) $ 365 $ 18,950
============ ============
The accompanying notes are an integral part of the financial statements.
F-3
15
FONA, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
For the
Period from
August 1,
2008 (date of
development
Year Year stage)
Ended Ended through
December 31, December 31, December 31,
2010 2009 2010
------------ ------------ ------------
Revenues $ -- $ -- $ --
------------ ------------ ------------
Operating Expenses:
Accounting and audit fees 9,200 355 10,204
Attorney fees 10,501 10,225 32,162
Corporate fees 2,410 1,162 3,272
Printing and mailing costs -- 1,056 1,056
Transfer agent fees 1,380 2,450 4,674
Other 36 772 810
------------ ------------ ------------
Total Expenses 23,527 16,020 52,178
Net Operating (Loss) (23,527) (16,020) (52,178)
------------ ------------ ------------
Net (Loss) (23,527) (16,020) (52,178)
------------ ------------ ------------
Per Share $ Nil $ Nil $ (.01)
============ ============ ============
Weighted Average Shares
Outstanding 7,894,111 6,994,766 6,883,876
============ ============ ============
The accompanying notes are an integral part of the financial statements.
F-4
16
FONA, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' (DEFICIT)
For the Period from January 1, 2008 through December 31, 2010
Accumulated
(Deficit)
Additional During
Preferred Common Stock Paid In Accumulated Development
Stock Shares Amount Capital (Deficit) Stage Total
---------- ----------- ----------- ----------- ----------- ----------- -----------
Balance at
January 1, 2008 $ -- 3,899,204 $ 3,900 $ 1,192,066 $(1,231,033) $ -- $ (35,067)
Debt converted
to equity
at $.15 (Note 3) -- 39,957 39 5,955 -- -- 5,994
Net loss-
Year ended
December 31, 2008 -- -- -- -- 30,093 (12,631) 17,462
---------- ----------- ----------- ----------- ----------- ----------- -----------
Balance at
December 31, 2009 -- 3,939,161 3,939 1,198,021 (1,200,940) (12,631) (11,611)
Issuance of
stock for cash
at .005 (Note 3) -- 3,954,950 3,955 16,045 -- -- 20,000
Net loss-
period ended
December 31, 2009 -- -- -- -- -- (16,020) (16,020)
---------- ----------- ----------- ----------- ----------- ----------- -----------
Balance at
December 31, 2009 -- 7,894,111 7,894 1,214,066 (1,200,940) (28,651) (7,631)
Net loss-
period ended
December 31, 2010 -- -- -- -- -- (23,527) (23,527)
---------- ----------- ----------- ----------- ----------- ----------- -----------
Balance at
December 31, 2010 $ -- 7,894,111 $ 7,894 $ 1,214,066 $(1,200,940) $ (52,178) $ (31,158)
========== =========== =========== =========== =========== =========== ===========
The accompanying notes are an integral part of the financial statements.
F-5
17
FONA, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
For the
Period from
August 1,
2008 (date of
development
Year Year stage)
Ended Ended through
December 31, December 31, December 31,
2010 2009 2010
------------ ------------ ------------
Cash Flows from Operating Activities
Net (loss) $ (23,527) $ (16,020) $ (52,178)
------------ ------------ ------------
Adjustments to reconcile net loss
To net cash (used in) operating activities:
Increase (decrease) in accounts
Payable and accrued expenses (2,221) 6,026 10,517
------------ ------------ ------------
Net Cash (Used in) Operating
Activities (25,748) (9,994) (41,661)
------------ ------------ ------------
Cash Flows from Investing Activities:
Net Cash Provided by
Investing Activities -- -- --
------------ ------------ ------------
Cash Flows from Financing Activities:
Sale of common stock -- 20,000 20,000
Advances from related party 7,163 8,580 21,665
------------ ------------ ------------
Net Cash Provided by
Financing Activities 7,163 28,580 41,665
------------ ------------ ------------
Increase (Decrease) in Cash (18,585) 18,586 4
------------ ------------ ------------
Cash, Beginning of Period 18,600 14 11
------------ ------------ ------------
Cash, End of Period $ 15 $ 18,600 $ 15
============ ============ ============
Interest Paid $ -- $ -- $ --
============ ============ ============
Income Taxes Paid $ -- $ -- $ --
============ ============ ============
Supplemental Disclosure of Non-Cash Transactions:
Conversion of debt for stock and
debt forgiveness $ -- $ -- $ 5,993
The accompanying notes are an integral part of the financial statements.
F-6
18
FONA, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2010 and 2009
(1) Summary of Accounting Policies, and Description of Business
This summary of significant accounting policies of Fona, Inc. (Company), a
"Development Stage Company", is presented to assist in understanding the
Company's financial statements. The financial statements and notes are
representations of the Company's management who is responsible for their
integrity and objectivity. These accounting policies conform to generally
accepted accounting principles in the United States of America and have been
consistently applied in the preparation of the financial statements.
(a) Organization and Description of Business
The Company was incorporated as Fonahome Corporation in 1990 under the laws of
the State of Minnesota. On March 3, 2009, the Company held a shareholder meeting
approving a migratory merger to Nevada and a name change to Fona, Inc., which
became effective March 24, 2010.
The Company initially developed and marketed an interactive information and
advertising service, but ceased all major operations in December, 1999.
Currently the Company is a Development Stage Company with plans to engage in any
lawful corporate undertaking, including, but not limited to, selected mergers
and acquisitions.
Effective August 1, 2008, the Company commenced activities to become a reporting
company with the Securities and Exchange Commission ("SEC") with the intention
to become a publicly trading company.
(b) Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
(c) Per Share Information
Earnings (loss) per share of common stock is computed by dividing the net
earnings (loss) by the weighted average number of common shares outstanding
during the period. Diluted earnings per share is not shown for periods in which
the Company incurs a loss because it would be anti-dilutive.
(d) Basis of Presentation - Going Concern
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles in the United States of America, which
contemplates continuation of the Company as a going concern. However, the
Company has no business operations and has negative working capital and
stockholders' deficits, which raise substantial doubt about its ability to
continue as a going concern.
In view of these matters, continuation as a going concern is dependent upon
continued operations of the Company, which in turn is dependent upon the
Company's ability to meet its financial requirements, raise additional capital,
and the success of its future operations.
Management has opted to resume the filing of Securities and Exchange Commission
(SEC) reporting documentation and then to seek a business combination.
Management believes that this plan provides an opportunity for the Company to
continue as a going concern.
F-7
19
FONA, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2010 and 2009
(1) Summary of Accounting Policies, Continued
(e) Recent Accounting Pronouncements
There were various accounting standards and interpretations issued during 2010
and 2009, none of which are expected to a have a material impact on the
Company's consolidated financial position, operations or cash flows.
(f) Risks and Uncertainties
The Company is subject to substantial business risks and uncertainties inherent
in starting a new business. There is no assurance that the Company will be able
to complete a business combination.
(g) Revenue Recognition
It is the Company's policy that revenue is recognized in accordance with SEC
Staff Accounting Bulletin (SAB) No. 104, "Revenue Recognition." Under SAB 104,
product revenues (or service revenues) are recognized when persuasive evidence
of an arrangement exists, delivery has occurred (or service has been performed),
the sales price is fixed and determinable and collectability is reasonably
assured.
(h) Cash and Cash Equivalents
The Company considers cash and cash equivalents to consist of cash on hand and
demand deposits in banks with an initial maturity of 90 days or less.
(i) Fair Value of Financial Instruments
Financial Accounting Standards Board ("FASB") issued Statement of Financial
Accounting Standards ASC Subtopic 825-10 ("ASC 825-10"), "Disclosures About Fair
Value of Financial Instruments." ASC 825-10 requires disclosure of fair value
information about financial instruments when it is practicable to estimate that
value. The carrying amount of the Company's cash, cash equivalents, accounts
payable, accrued expenses, and accounts payable-related party approximate their
estimated fair values due to their short-term maturities.
(j) Income Taxes
The Company records deferred taxes in accordance with Statement of Financial
Accounting Standards (SFAS) ASC 740, "Accounting for Income Taxes." The
statement requires recognition of deferred tax assets and liabilities for
temporary differences between the tax bases of assets and liabilities and the
amounts at which they are carried in the financial statements, the effect of net
operating losses, based upon the enacted tax rates in effect for the year in
which the differences are expected to reverse. A valuation allowance is
established when necessary to reduce deferred tax assets to the amount expected
to be realized.
(k) Development stage
Based upon the Company's business plan, it is a development stage enterprise
since planned principal operations have not yet commenced. Accordingly, the
Company presents its financial statements in conformity with the accounting
principals generally accepted in the United States of America that apply in
establishing operating enterprises. As a development stage enterprise, the
Company discloses the deficit accumulated during the development stage and the
cumulative statements of operations and cash flows from commencement of
development stage to the current balance sheet date. The development stage began
August 1, 2008 when the Company commenced the process to become a publicly
reporting company.
F-8
20
FONA, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2010 and 2009
(1) Summary of Accounting Policies, Continued
(l) Concentrations
Financial instruments that potentially subject the company to concentrations of
credit risk consist principally of cash and cash equivalents. At December 31,
2010 and December 31, 2009, the Company had no amounts of cash or cash
equivalents in financial institutions in excess of amounts insured by agencies
of the U.S. Government.
(m) Other
The Company has selected December 31 as its fiscal year end.
The Company has paid no dividends.
No advertising expense has been incurred.
The Company consists of one reportable business segment.
The Company has not entered into any leases.
(2) Income Taxes
Deferred income taxes arise from temporary timing differences in the recognition
of income and expenses for financial reporting and tax purposes. The Company's
deferred tax assets consist entirely of the benefit from net operating loss
(NOL) carry forwards, limited by the value of the shell. The net operating loss
carry forward if not used, will expire in various years through 2030, and is
severely restricted as per the Internal Revenue code if there is a change in
ownership. The Company's deferred tax assets are offset by a valuation allowance
due to the uncertainty of the realization of the net operating loss carry
forwards. Net operating loss carry forwards may be further limited by other
provisions of the tax laws.
The Company's deferred tax assets, valuation allowance, and change in valuation
allowance are as follows:
Estimated Estimated
NOL Tax Change in
Carry- NOL Benefit Valuation Valuation Net Tax
Period Ending forward Expires from NOL Allowance Allowance Benefit
December 31, 2009 552,178 Various 102,153 (102,153) (4,353) --
December 31, 2010 528,651 Various 97,800 (97,800) (2,964) --
Income taxes at the statutory rate are reconciled to the Company's
actual income taxes as follows:
Income tax benefit at statutory rate resulting from
net operating loss carry forward (15.0%)
State tax (benefit) net of Federal benefit (3.5)%
Deferred income tax valuation allowance 18.5%
-------------
Actual tax rate -
=============
F-9
21
FONA, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2010 and 2009
(3) Common Stock and Migratory Merger
Pursuant to the Articles of Incorporation of Fona, Inc., the Company is
authorized to issue 780,000,000 common shares with $.001 par value. There were
7,894,111 shares of common stock issued and outstanding at December 31, 2010. In
April 2009, the Company issued a total of 3,954,950 shares of common stock to
two directors for $10,000 cash and a note for an additional $10,000. The note
was satisfied in May 2009. This resulted in a change in control of the Company.
On March 3, 2009, the Board of Directors unanimously approved an Agreement and
Plan of Merger effectively changing the name of the Company to Fona Inc., a
Nevada corporation ("Re-incorporation Merger") and simultaneously adopting the
capital structure of Fona Inc., which includes total authorized capital stock of
800,000,000, of which 780,000,000 are common stock and 20,000,000 are blank
check preferred stock. There were no preferred shares outstanding as of December
31, 2010.
In accordance with the Agreement and Plan of Merger, effective March 24, 2009,
Fonahome Corporation adopted the capital structure of Fona, Inc., which includes
total authorized capital stock of 800,000,000 shares, of which 780,000,000 are
common stock, with a par value of $.001 per share (the "Fona Common Stock") and
20,000,000 shares are blank check preferred stock, with a par value of $.001 per
share (the "Preferred Stock"). In addition, on March 24, 2009, the issued and
outstanding shares of our common stock automatically converted into shares of
Fona Common Stock at a ratio of one (1) share of our currently outstanding
common stock for one (1) share of Fona Common Stock.
All references in the accompanying financial statements to the number of shares
authorized and outstanding have been retroactively adjusted to reflect the new
capital structure and par values effective March 24, 2009.
On December 22, 2008, the Board of Directors approved the issuance of 39,957
shares of common stock to Nick T. Boosalis for forgiveness of debt totaling
$5,993.
(4) Related Party Transactions
The Company uses the offices of its President for its minimal office facility
needs for no consideration. No provision for these costs has been provided since
it has been determined that they are immaterial.
At December 31, 2010 and 2009, the Company owed two separate related parties for
expenses paid on behalf of the Company totaling $21,665 and $14,502,
respectively. The advances are uncollateralized, bear no interest and are due on
demand.
(6) Subsequent Events
The Company has evaluated events subsequent to December 31, 2010 and through the
date the financial statements were available to be issued, to assess the need
for potential recognition or disclosure in this report. No events were noted
that require recognition or disclosure in the financial statements.
F-10
22
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DATA
There are no disagreements with the accountants on accounting and financial
disclosures.
ITEM 9A. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures.
Under the supervision and with the participation of the Company's management,
including the principal executive officer and principal financial officer, as of
the end of the period covered by this report, the Company conducted an
evaluation of the effectiveness of the design and operation of the Company's
disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e)
under the Exchange Act. The Company's disclosure controls and procedures are
designed to provide reasonable assurance that the information required to be
included in the Company's reports to the Commission is recorded, processed,
summarized and reported within the time periods specified in Commission rules
and forms and to provide reasonable assurance that such information is
accumulated and communicated to our management, including our principal
executive officer and principal financial officer, as appropriate to allow
timely decisions regarding required disclosure. Based on this evaluation, the
Company's principal executive officer and principal financial officer concluded
that, as of the period covered by this report, the Company's disclosure controls
and procedures are effective at these reasonable assurance levels.
Our internal control system is designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with accounting
principles generally accepted in the United States. There is no assurance that
our disclosure controls or our internal controls over financial reporting can
prevent all errors. An internal control system, no matter how well designed and
operated, has inherent limitations, including the possibility of human error.
Because of the inherent limitations in a cost-effective control system,
misstatements due to error may occur and not be detected. We monitor our
disclosure controls and internal controls and make modifications as necessary.
Our intent in this regard is that our disclosure controls and our internal
controls will improve as systems change and conditions warrant.
Management's Annual Report on Internal Control over Financial Reporting.
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting (as defined in Rule 13a-15(f) under the
Exchange Act). Our internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with accounting principles generally accepted in the United States.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Therefore, even those systems
determined to be effective can provide only reasonable assurance of achieving
their control objectives. Furthermore, smaller reporting companies face
additional limitations. Smaller reporting companies employ fewer individuals and
find it difficult to properly segregate duties. Often, one or two individuals
control every aspect of the Company's operation and are in a position to
override any system of internal control. Additionally, smaller reporting
companies tend to utilize general accounting software packages that lack a
rigorous set of software controls.
23
Our management, with the participation of the President, evaluated the
effectiveness of the Company's internal control over financial reporting as of
December 31, 2010. In making this assessment, our management used the criteria
set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control -- Integrated Framework. Based on this
evaluation, our management, with the participation of the President, concluded
that, as of December 31, 2010, our internal control over financial reporting was
not effective due to material weaknesses in the system of internal control.
Specifically, management identified the following control deficiencies. (1) The
Company has not properly segregated duties as one or two individuals initiate,
authorize, and complete all transactions. The Company has not implemented
measures that would prevent the individuals from overriding the internal control
system. The Company does not believe that this control deficiency has resulted
in deficient financial reporting because the Chief Financial Officer is aware of
her responsibilities under the SEC's reporting requirements and personally
certifies the financial reports. (2) The Company has installed accounting
software that does not prevent erroneous or unauthorized changes to previous
reporting periods and does not provide an adequate audit trail of entries made
in the accounting software.
Accordingly, while the Company has identified certain material weaknesses in its
system of internal control over financial reporting, it believes that it has
taken reasonable steps to ascertain that the financial information contained in
this report is in accordance with generally accepted accounting principles.
Management has determined that current resources would be appropriately applied
elsewhere and when resources permit, they will alleviate material weaknesses
through various steps.
(b) Changes in internal controls.
Our Certifying Officers have indicated that there were no changes in our
internal controls over financial reporting or other factors that could
significantly affect such controls subsequent to the date of his evaluation, and
there were no such control actions with regard to significant deficiencies and
material weaknesses.
ITEM 9B. OTHER INFORMATION
None.
24
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Officers and Directors
The following table sets forth certain information concerning each of the
Company's directors and executive officers:
NAME AGE POSITION
Michael Friess 60 Chairman of the Board
President and CEO
Sanford Schwartz 60 Vice President, Director
Chloe DiVita 33 Treasurer, Secretary,
Director and CFO
There are no agreements or understandings forany officer or director to resign
at the request of another person and none of the above named officers and
directors are acting on behalf of or will act at the direction of any other
person.
There is no family relationship between any director or executive officer of the
Company.
The Board of Directors presently has no committees.
Set forth below are the names of all directors and executive officers of the
Company, all positions and offices with the Company held by each such person,
the period during which he has served as such, and the business experience of
such persons during at least the last five years:
Michael Friess is currently a self-employed attorney licensed to practice law in
the State of Colorado. As a sole practioner, Mr. Friess operates under his own
name, Michael Friess, Attorney, and has been practicing law in Colorado for 17
years. He was a partner from January 1983 to December 1993 in the New York City
law firm of Schulte, Roth & Zabel, where his practice emphasized taxation. Mr.
Friess has served as Chairman of the Board and President of the Company from
April 2009 to the present. Mr. Friess served on the Board of Directors of
Oralabs Holding Corporation (NASDAQ: OLAB) from September 1997 until December
2006. In an average week Mr. Friess spends approximately 5 hours on Company
matters. Mr. Friess was appointed a director because of his extensive legal and
business acquisitions experience, including working with public blank check
companies interested in merging with a private operating company.
Chloe DiVita has served as Secretary, Treasurer, CFO and a director of the
Company from April 2009 to the present. For the past eight years, Mrs. DiVita
has been a self-employed accountant in Colorado operating under DiVita &
Associates, Inc. She has also been a business development consultant partnering
on many projects with Creative Business Strategies, LLC, a business consulting
firm. In an average week Mrs. DiVita spends approximately 15 hours on Company
matters. Mrs. DiVita was appointed a director because of her financial
background and experience working with public blank check companies interested
in merging with private operating companies.
Sanford Schwartz has been a director of the Company since April 2009. Mr.
Schwartz is the Chairman of Creative Business Strategies, LLC, a business
consulting firm in Boulder, Colorado co-founded by Mr. Schwartz in 1985 that
provides business development, management and restructuring services to business
owners and companies, including companies engaged in real estate management and
development and various sectors of the healthcare industry. In an average week
Mr. Schwartz spends approximately 5 hours on Company matters. Mr. Schwartz was
appointed a director because of his over 25 years of business acquisition and
development experience, including working with public blank check companies
interested in merging with a private operating company.
25
Previous Blank-Check Experience
Mr. Michael Friess, President and a director and executive officer of the
Company, Mr. Sanford Schwartz a director of the Company, and Mrs. Chloe DiVita,
CFO and director of the Company, have all been involved either as an officer or
director, or both, with other blank-check companies, which have completed some
form of corporate reorganization. To date, Mr. Friess and Mr. Schwartz have
acquired a majority interest in six companies, in addition to the Company, that
had no significant assets or business operations, obtained the management,
accounting and legal services and provided the funds required to register the
common stock of each of the companies pursuant to Section 12(g) of the
Securities Exchange Act of 1934 and, if necessary, to satisfy outstanding
obligations of the company and found private investors or private operating
companies interested in merging an operating company with the company.
Typically, Mr. Friess and Mr. Schwartz have then sold all or substantially all
of their interests in the company to the parties interested in merging a private
operating company with the company. Mrs. DiVita has served as Secretary, CFO and
a director of three of the six companies. The officers and directors of the
Company intend to work on developing additional registered blank check
companies. The following is a list of the blank-check companies with which the
Company's officers and directors have previously been involved during the last
five years:
Hemcure, Inc. (HMCU), Commission File #000-51543, initially registered with the
Securities and Exchange Commission in May of 1987, was organized to provide
administrative and marketing services to physicians or physician groups who
emphasized outpatient non-surgical treatment for hemorrhoids. Mr. Friess and Mr.
Schwartz acquired ownership of 46% of HMCU's then outstanding shares during
April, 2005 and during June 2006, sold all of their shares of HMCU to private
investors for $525,000, following which HMCU became Aurasound, Inc. listed on
the OTCBB symbol (ARAU). Current officers and directors of Fona, Inc. are not
currently officers, directors or employees of ARAU and, therefore, have no
direct knowledge of the business operations or possible pending acquisition,
business combinations or mergers of ARAU. ARAU appears to be current in all of
its filings with the Securities and Exchange Commission.
Implant Technologies, Inc. (IMLT), Commission File #000-17064, initially
registered in 1980, was formed for the purpose of developing and marketing
medical products. During April 2006, Mr. Friess and Mr. Schwartz acquired
ownership of 80% of IMLT's then outstanding shares of common stock and from
April 2006 to July, 2007, Mr. Friess served as Secretary, Treasurer and a
director and Mr. Schwartz served as a director of IMLT. During July 2007, they
sold all of their shares of IMLT to private investors for $582,500 and IMLT
became Oasis Online Technologies Corp listed on the OTCBB symbol (OOLN), a
company seeking acquisitions in the online security and authentication market.
Current officers and directors of Fona, Inc. are not currently officers,
directors or employees of OOLN and, therefore, have no direct knowledge of the
business operations or possible pending acquisition, business combinations or
mergers of OOLN. OOLN appeared to be current in its filings with the Securities
and Exchange Commission through May 2009.
Discovery Technologies, Inc. (DSVY), Commission File #000-18606, initially
registered in 1987, was formed to design, manufacture and market video products
that transmit pictures over standard voice-grade telephone lines. In June 2006,
the sole remaining director, appointed Michael Friess as President CEO and a
director of the company, and Sanford Schwartz as a director of the company and
Mr. Friess and Mr. Schwartz acquired ownership of 80% of DSVY's then outstanding
shares of common stock. During December 2007, Mr. Friess and Mr. Schwartz sold
their shares of DSVY for $550,000 and DSVY became China Green Agriculture listed
on the OTCBB symbol (CGAG). Immediately following the transaction, Mr. Friess
and Mr. Schwartz owned 111,386 shares of CGAG's common stock (representing
approximately 1% of CGAG's then outstanding shares of common stock). Current
officers and directors of the Company are not currently officers or directors or
employees of CGAG and, therefore, have no direct knowledge of the business
operations or possible pending acquisitions, business combinations or mergers of
CGAG. CGAG appears to be current in its filings with the Securities and Exchange
Commission.
26
Certified Technologies Corporation (CFDT), Commission File #000-52786, initially
registered in 1984, was formed to market a fire retardant chemical formulation
to the commercial aviation and business furniture industries. In February 2007,
Michael Friess and Sanford Schwartz acquired 51% of CFDT's then outstanding
shares of common stock and Mr. Friess was appointed President, CEO and a
director and Mr. Schwartz was appointed a director, and Chloe DiVita was
appointed Secretary, Treasurer and a director of CFTD. During May 2008, Mr.
Friess and Mr. Schwartz sold substantially all of their shares of CFTD for
$740,000 ande CFDT became Zhaoheng Hydropower CO listed on the OTCBB symbol
(ZHYP). Immediately following the transaction, Mr. Friess and Mr. Schwartz owned
444,498 shares of ZHYP's common stock (representing approximately 1% of ZHYP's
then outstanding shares of common stock). Current officers and directors of the
Company are not currently officers or directors or employees of ZHYP and,
therefore, have no direct knowledge of the business operations or possible
pending acquisitions, business combinations or merger of ZHYP. ZHYP appeared to
be current in all of its filings with the Securities and Exchange Commission
through May, 2009, and has since moved the Company from the United States and
filed a Form 15-12G terminating its filing requirements with the Securities and
Exchange Commission.
Henry County Plywood Corporation (HRYC), Commission File #000-53208, initially
registered in 1948, was formed to purchase, lease, sell, manufacture and deal in
lumber, and other wood products. In August 2006, Michael Friess and Sanford
Schwartz acquired 80% of HRYC's then outstanding shares of common stock and Mr.
Friess was appointed President, CEO and a director of the company, Sanford
Schwartz was appointed a director of the company and Chloe DiVita was appointed
Secretary, CFO and a director of the company. In October 2007, Messrs Friess and
Schwartz resigned as officers and directors of the Company, and in May 2008 Mr.
Friess was reappointed to the Board. In January 2009, Mr. Friess and Mr.
Schwartz sold most of their shares of HRYC for $500,000 and HRYC became Sino
Green land Corp listed on the OTCBB symbol (SGLA). Immediately following the
transaction, Mr. Friess and Mr. Schwartz owned a total of 999,778 shares of
SGLA's common stock (representing approximately 1% of SGLA's then outstanding
shares of common stock). Current officers and directors of the Company are not
currently officers or directors or employees of SGLA and, therefore, have no
direct knowledge of the business operations or possible pending acquisitions,
business combinations or merger of SGLA. SGLA appears to be current in all of
its filings with the Securities and Exchange Commission.
P I Services, Inc. (PISV), Commission File #000-53263, had its initial public
offering in September 1988. The company was formed as Sweet Little Deal. In
August 2007, Michael Friess and Sanford Schwartz acquired 80% of PISV's then
outstanding shares of common stock and Mr. Friess was appointed President and
Chairman of the Board of the company, Mr. Schwartz was appointed a director of
the company and Chloe DiVita was appointed Secretary, CFO and a director of the
Company. In January 2009, Physicians was reincorporated in the State of Nevada
through a merger with P I Services, Inc. In March 2010, Mr. Friess and Mr.
Schwartz sold most of their shares of PISV for $275,000 and PISV became China
Lithium Technologies Inc. listed on the OTCBB symbol (CLTT). Immediately
following the transaction, Mr. Friess and Mr. Schwartz owned a total of
1,330,468 shares of CLTT's common stock (approximately 3% of CLTT's then
outstanding shares of common stock). Current officers and directors of the
Company are not currently officers or directors or employees of CLTT and,
therefore, have no direct knowledge of the business operations or possible
pending acquisitions, business combinations or merger of CLTT. CLTT appears to
be current in all of its filing with the Securities and Exchange Commission.
27
Conflicts of Interest
The Company's officers and directors have in the past and may in the future be
officers and directors of other companies of a similar nature and with a similar
purpose as the Company. Consequently, there are potential inherent conflicts of
interest in Messrs Friess and Schwartz and Mrs. DiVita serving as officers and
directors of the Company. Insofar as the officers and directors are engaged in
other business activities, management anticipates it will devote only a minor
amount of time to the Company's affairs. The officers and directors of the
Company may in the future become shareholders, officers or directors of other
companies which may be formed for the purpose of engaging in business activities
similar to those conducted by the Company. The Company does not currently have a
right of first refusal pertaining to opportunities that come to management's
attention even if the opportunities relate to the Company's proposed business
operations.
The officers and directors are, so long as they are officers or directors of the
Company, subject to the restriction that all opportunities contemplated by the
Company's plan of operation which come to their attention in the performance of
their duties as officers and directors of the Company will be considered
opportunities of, and be made available to the Company. However, they are under
no obligation to make any opportunities that come to their attention in the
performance of their duties for any other companies or in any other manner
available to the Company. Except as set forth above, the Company has not adopted
any other conflict of interest policy with respect to such transactions.
ITEM 11. EXECUTIVE COMPENSATION
None of the Company's officers and/or directors receives any compensation for
their respective services rendered to the Company, nor have they received such
compensation since the renewal of the Company's charter. They have agreed to act
without compensation until authorized by the Board of Directors, which is not
expected to occur until the Company has generated revenues from operations after
consummation of a merger or acquisition. As of the date of this registration
statement, the Company has minimal funds available to pay directors. Further,
none of the directors are accruing any compensation pursuant to any agreement
with the Company.
It is possible that, after the Company successfully consummates a merger or
acquisition with an unaffiliated entity, that entity may desire to employ or
retain one or more members of the Company's management for the purposes of
providing services to the surviving entity, or otherwise provide other
compensation to such persons. However, the Company has adopted a policy whereby
the offer of any post-transaction remuneration to members of management will not
be a consideration in the Company's decision to undertake any proposed
transaction. Each member of management has agreed to disclose to the Company's
Board of Directors any discussions concerning possible compensation to be paid
to them by any entity which proposes to undertake a transaction with the Company
and further, to abstain from voting on such transaction. Therefore, as a
practical matter, if each member of the Company's Board of Directors is offered
compensation in any form from any prospective merger or acquisition candidate,
the proposed transaction will not be approved by the Company's Board of
Directors as a result of the inability of the Board to affirmatively approve
such a transaction.
It is possible that persons associated with management may refer a prospective
merger or acquisition candidate to the Company. In the event the Company
consummates a transaction with any entity referred by associates of management,
it is possible that such an associate will be compensated for their referral. It
is anticipated that this compensation would be either in the form of restricted
common stock issued by the Company as part of the terms of the proposed
transaction, or will be in the form of cash consideration. However, if such
compensation is in the form of cash, such payment will be tendered by the
acquisition or merger candidate, because the Company has minimal cash available.
The amount of such compensation, if any, cannot be determined as of the date of
this registration statement.
No retirement, pension, profit sharing, stock option or insurance programs or
other similar programs have been adopted by the Registrant for the benefit of
its employees.
28
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
Principal Stockholders
The following table sets forth certain information as of March 29, 2011
regarding the beneficial ownership of the Company's common stock by (i) each
stockholder known by the Company to be the beneficial owner of more than 5% of
the Company's common stock, (ii) by each director and executive officer of the
Company and (iii) by all executive officer's and directors of the Company as a
group. Each of the persons named in the table has sole voting and investment
power with respect to common stock beneficially owned.
NAME AND ADDRESS NUMBER OF PERCENTAGE
SHARES OWNED OF SHARES
OR CONTROLLED OWNED
Michael Friess 1,977,475 25.05%
5353 Manhattan Circle Ste 101
Boulder, Colorado 80303
Sanford Schwartz 1,977,475 25.05%
5353 Manhattan Circle Ste 101
Boulder, Colorado 80303
Nick T Boosalis (1) 2,252,233 28.58%
212 2nd St SE Suite 224
Minneapolis, MN 55414
Richard Dillon 576,571 7.30%
703 Oakland Ave
St. Paul, MN 55102
Chloe DiVita 0 --
All Officers and Directors 3,954,950 50.10%
as a Group (3 persons)
-------------------
(1) Includes 618,039 shares owned by The Boosalis Group, the sole shareholder of
which is Mr. Boosalis and 1,100,000 shares owned by Desfaire, Inc., 99% of the
common stock of which is owned by Mr. Boosalis.
ITEM 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
No officer, director, promoter, or affiliate of the Company has or proposes to
have any direct or indirect material interest in any asset that we propose to
acquire through security holdings, contracts, options, or otherwise.
We may pay any consulting or finder's fee for consulting services to assist
management in evaluating a prospective business opportunity in stock or in cash.
Any such issuance of stock would be made on an ad hoc basis. Accordingly, we are
unable to predict whether or in what amount such a stock issuance might be made.
29
We maintain a mailing address at the offices of our president, Michael Friess,
located at 5353 Manhattan Circle, Suite 101, Boulder, CO, 80303 for which we pay
no rent. We anticipate that following the consummation of a business combination
with an acquisition candidate, our office will be moved, but cannot predict
future office or facility arrangements with our officers, directors or
affiliates.
Nick T. Boosalis, and companies he control, own together 28.58% of the Company's
outstanding shares of common stock and Michael Friess and Sanford Schwartz each
own 25.05 % of the Company's outstanding shares of common stock. Prior to Mr.
Friess and Mr. Schwartz's purchases of the Company's common stock in April 2009,
Mr. Boosalis owned approximately 57% of the Company's then outstanding common
stock. Since the purchase of their shares, Mr. Friess and Mr. Schwartz own
approximately 50.1% of the Company's current outstanding common stock.
Although we have no current plans to do so, it is possible that we may enter
into an agreement with an acquisition candidate requiring the sale of all or a
portion of the common stock held by our largest shareholders and their
affiliates to the acquisition candidate or principals thereof, or to other
individuals or business entities, or requiring some other form of payment to our
current shareholders, or requiring the future employment of specified officers
and payment of salaries to them. It is more likely than not that any sale of
securities by our current shareholders to an acquisition candidate would be at a
price substantially higher than that originally paid by such shareholders. Any
payment to current shareholders in the context of an acquisition in which we are
involved would be determined entirely by the largely unforeseeable terms of a
future agreement with an unidentified business entity. On April 1, 2009, the
Board of Directors approved the issuance of 3,954,950 shares of our common stock
to two individuals, (Sanford Schwartz and Michael Friess), who subsequently were
appointed officers and directors of the Company for a $10,000 cash payment and a
note for an additional $10,000. The note was satisfied in May, 2009. This
resulted in a change in control in the Company.
Since December 2008 Nick Boosalis, a former director, and The Boosalis Group and
Desfaire, Inc., affiliates of Mr. Boosalis, loaned the Company a total of $5,488
to pay general working capital expenses of the Company. Additionally, since
August 2008, Creative Business Strategies, LLC an affiliate of Sanford Schwartz,
an officer and director of the Company, has loaned the Company a total of
$16,177 to pay general working capital expenses of the Company, including costs
associated with the filing of this registration statement with the Securities
and Exchange Commission. The loans are non-interest bearing and are payable on
demand.
On March 3, 2009, the shareholders of the company approved the issuance of
1,980,834 shares of our common stock to officers and directors of the Company,
including 538,194 shares to Nick t. Boosalis (of which 498,237 were approved by
the Board in December 2007 and 39,957 were approved by the Board in December
2008), then a director and officer of the Company, for forgiveness of loans to
the Company in the aggregate principal amount of $74,736 and $5,993
respectively; 322,047 shares to Richard Dillion (which were approved by the
Board in December 2007), then an officer and director of the Company, for
forgiveness of loans to the Company in the aggregate principal amount of
$48,307; and 1,100,000 shares to Desfaire, Inc. (which were approved by the
Board in December 2007), a company 99% of the common stock of which is owned by
Mr. Boosalis, for a cash payment of $11,000 and the payment by Desfaire on
behalf of the Company of software development costs of more than $125,000. No
payments of interest or principal or interest were made by the Company since
January 1, 2008.
On March 3, 2009, the shareholders of the Company approved and ratified a
January 22, 2008, Assignment Agreement pursuant to which the Company assigned
the software and other rights relating to the Rent411 services offered by the
Company, including a license to Desfaire, Inc., an affiliate of Nick T.
Boosalis, then an officer and director of the Company, and substantially all of
the worldwide copyrights, trademarks and other assets of the Company to the
Boosalis Group, a company owned by Mr.. Boosalis, in consideration for which The
Boosalis Group assumed outstanding indebtedness of the Company totaling $34,714.
30
Securities issued by blank check companies cannot be resold under Rule 144, but
must be registered under the Securities Act of 1933. The Company has no
obligation to register these or any other shares under the Securities Act of
1933.
The proposed business activities described herein classify the Company as a
"blank check" company. Many states have enacted statutes, rules and regulations
limiting the sale of securities of "blank check" companies in their respective
jurisdictions. Management does not intend at this time to undertake any efforts
to cause a market to develop in the Company's securities until such time as the
Company has successfully implemented its business plan described herein.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees
The aggregate fees billed during the years ended December 31, 2010 and 2009 for
professional services rendered by our principal accountant for the audit of our
annual financial statements were $8,700.
Audit Related Fees
The Company incurred no fees for the year ended December 31, 2010 and 2009 for
audit related services by our principal accountant that were reasonably related
to the performance of the audit or review of our financial statements, and not
reported under Audit Fees above.
Tax Fees
The Company incurred no fees for professional services rendered by our principal
accountant for tax compliance, tax advice, and tax planning for the year ended
December 31, 2010 and 2009.
All Other Fees
We did not incur any fees for other professional services rendered by our
independent auditors during the fiscal year ended December 31, 2010 and 2009.
31
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES
Exhibit Index
3.1 Articles of Incorporation with Amendments
3.2 Bylaws of the Company
4.1 Specimen Stock Certificate
31.1 Section 302 Certification of Chief Executive Officer
31.2 Section 302 Certification of Chief Financial Officer
31.3 Section 302 Certification of Vice President
32.1 Section 906 Certification of Chief Executive Officer
32.2 Section 906 Certification of Chief Financial Officer
31.3 Section 906 Certification of Vice President
32
SIGNATURES
In accordance with Section 12 of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
REGISTRANT FONA, INC.
(Date) March current at time of filing, 2011
BY(Signature) /s/ Michael Friess
(Name and Title) Michael Friess
President, Chief Executive Officer and a director
(Date) March current at time of filing, 2011
BY(Signature) /s/ Chloe DiVita
(Name and Title) Chloe DiVita
Treasurer, Secretary and Chief
Financial Officer and a director
(Date) March current at time of filing, 2011
BY(Signature) /s/ Sanford Schwartz
(Name and Title) Sanford Schwartz
Vice President and a director
33
EX-3.1
2
fona1012gex31.txt
ARTICLES OF INCORPORATION
Exhibit 3.1
ARTICLES OF INCORPORATION
OF
FONA, INC.
KNOW ALL BY THESE PRESENTS, that the undersigned, desiring to be
incorporated as a Corporation in accordance with the laws of the State of
Nevada, hereby certifies and adopts the following Articles of Incorporation, the
terms whereof have been agreed upon to be equally obligatory upon the party
signing this instrument and all others who may from time to time hereafter
become members of this Corporation and who may hold stock therein.
ARTICLE I
The name of the Corporation is: FONA, INC.
ARTICLE II
The name and address of the registered agent of the Corporation in the
State of Nevada is:
National Registered Agents, Inc. of NV
1000 East William, Suite 204
Carson City, NV 89701
Principal and branch offices may hereinafter be established at such place or
places, either within or without the State of Nevada as may from time to time be
determined by the Board of Directors.
ARTICLE III
The nature and purpose of this business shall be to conduct any lawful
activity as governed by the laws of the State of Nevada.
ARTICLE IV
The authorized capital stock of this Corporation is 800,000,000 shares of
capital stock, consisting of 780,000,000 shares of common stock with full voting
rights and with a par value of $0.001 per share, and 20,000,000 shares of
preferred stock, with a par value of $0.001 per share (the "Preferred Stock").
The Preferred Stock may be issued from time to time in one or more series
with such designations, preferences and relative participating, optional or
other special rights and qualifications, limitations or restrictions thereof, as
shall be stated in the resolutions adopted by the Corporation's Board providing
for the issuance of such Preferred Stock or series thereof; and the Board is
hereby vested with authority to fix such designations, preferences and relative
participating, optional or other special rights or qualifications, limitations,
or restrictions for each series, including, but not by way of]imitation, the
power to fix the redemption and liquidation preferences, the rate of dividends
payable and the time for and the priority of payment thereof
and to determine whether such dividends shall be cumulative or not and to
provide for and fix the terms of conversion of such Preferred Stock or any
series thereof into Common Stock of the Corporation and fix the voting power, if
any, of shares of Preferred Stock or any series thereof.
Pursuant to NRS 78.385 and NRS 78.390, and any successor statutory
provisions, the Board is authorized to adopt a resolution to increase, decrease,
add, remove or otherwise after any current or additional classes or series of
this Corporation's capital stock by a board resolution amending these Articles,
in the Board's sole discretion for increases or decreases of any class or series
of authorized stock where applicable pursuant to NRS 78.207 and any successor
statutory provision, or otherwise subject to the approval of the holders of at
least a majority of shares having voting rights, either in a special meeting or
the next annual meeting of shareholders. Pursuant to NRS 78.2055 and any
successor statutory provisions, the Board is authorized to adopt a resolution to
decrease the number of issued and outstanding shares of a class or series
without correspondingly decreasing the number of authorized shares of the same
class or series and without the approval of the stockholders. Notwithstanding
the foregoing, where any shares of any class or series would be materially and
adversely affected by a change as described in either of the two preceding
sentences, shareholder approval by the holders of at least a majority of such
adversely affected shares must also be obtained before filing an amendment with
the Office of the Secretary of State of Nevada. The capital stock of this
Corporation shall be non-assessable and shall not be subject to assessment to
pay the debts of the Corporation.
ARTICLE V
Members of the Board shall be known and styled as "Directors" and the
number thereof shall be one (1) and may be increased or decreased from time to
time pursuant to the Bylaws. The name and address of the first Board of
Directors is as follows:
Michael Freiss
5353 Manhattan Circle, Suite 201
Boulder, CO 80303
Sanford Schwartz
5353 Manhattan Circle, Suite 201
Boulder, CO 80303
Chloe DeVita
5353 Manhattan Circle, Suite 201
Boulder, CO 80303
The number of members of the Board shall not be less than one (1) or more
than nine (9). The officers of the Corporation shall be a President, Secretary
and Treasurer. The Corporation may have such additional officers as may be
determined from time to time in accordance with the Bylaws. The officers shall
have the powers, perform the duties, and be appointed as may be determined in
accordance with the Bylaws and laws of the State of Nevada. Any person may hold
two (2) or more offices in this Corporation.
-2-
ARTICLE VI
The Corporation shall have perpetual succession by its corporate name and
shall have all the powers herein enumerated or implied herefrom and the powers
now provided or which may hereafter be provided by law for corporations in the
State of Nevada.
ARTICLE VII
No shareholder shall be liable for the debts of the Corporation beyond the
amount that may be due or unpaid upon any share or shares of stock of this
Corporation owned by that person.
ARTICLE VIII
Each shareholder entitled to vote at any election for Directors shall have
the right to vote, in person or by proxy, the number of shares owned by such
shareholder for each Director to be elected. Shareholders shall not be entitled
to cumulative voting rights.
ARTICLE IX
The Directors shall have the powers to make and alter the Bylaws of the
Corporation. Bylaws made by the Board under the powers so conferred may be
altered, amended, or repealed by the Board or by the shareholders at any meeting
called and held for that purpose.
ARTICLE X
The Corporation specifically elects not to be governed by NRS 78.411 to NRS
78.444, inclusive, and successor statutory provisions.
ARTICLE XI
The Corporation shall indemnify all Directors, officers, employees, and
agents to the fullest extent permitted by Nevada law as provided within NRS
78.7502 and NRS 78.751 or any other law then in effect or as it may hereafter be
amended. The Corporation shall indemnify each present and future Director,
officer, employee or agent of the Corporation who becomes a party or is
threatened to be made a party to any suit or proceeding, whether pending,
completed or merely threatened, and whether said suit or proceeding is civil,
criminal, administrative, investigative, or otherwise, except an action by or in
the right of the Corporation, by reason of the fact that he is or was a
Director, officer, employee, or agent of the Corporation, or is or was serving
at the request of the Corporation as a Director, officer, employee, or agent of
another corporation, partnership, joint venture, trust, or other enterprise,
against expenses, including, but not limited to, attorneys' fees, judgments,
fines, and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit, proceeding or settlement, provided such person
acted in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interest of the Corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful.
-3-
The expenses of Directors, officers, employees or agents of the Corporation
incurred in defending a civil or criminal action, suit, or proceeding may be
paid by the Corporation as they are incurred and in advance of the final
disposition of the action, suit, or proceeding, if and only if the Director,
officer, employee or agent undertakes to repay said expenses to the Corporation
if it is ultimately determined by a court of competent jurisdiction, after
exhaustion of all appeals therefrom, that he is not entitled to be indemnified
by the Corporation. No indemnification shall be applied, and any advancement of
expenses to or on behalf of any Director, officer, employee or agent must be
returned to the Corporation, if a final adjudication establishes that the
person's acts or omissions involved a breach of any fiduciary duties, where
applicable, intentional misconduct, fraud or a knowing violation of the law
which was material to the cause of action.
ARTICLE XII
The name and address of the incorporator of this Corporation is:
Raymond W. Faricy, III
Lindquist & Vennum P.L.L.P.
80 South 8th Street, #4200 IDS Center
Minneapolis, MN 55402
IN WITNESS WHEREOF, the undersigned incorporator has executed these
Articles of Incorporation of FONA, INC. on February 4,2009.
/s/ Raymond W. Faricy, III
------------------------------------
Raymond W. Faricy, III, Incorporator
-4-
EX-3.2
3
fona1012gex32.txt
BYLAWS
Exhibit 3.2
BYLAWS OF
FONA,INC.
ARTICLE I: OFFICES
1.1 REGISTERED OFFICE
The registered office shall be in the City of Carson City, County of Carson
City, State of Nevada.
1.2 ADDIT10NAL OFFICES
The corporation may also have offices at such other places both within and
without the State of Nevada as the Board of Directors may from time to time
determine or the business of the corporation may require.
ARTICLE II: SHAREHOLDERS' MEETINGS
2.1 ANNUAL MEETINGS
Regular meetings of the shareholders of this corporation may be held at the
discretion of the Board of Directors on an annual or less frequent periodic
basis on such date and at such time and place as may be designated by the Board
of Directors in the notice of meeting. At regular meetings the shareholders
shall elect a Board of Directors and transact such other business as may be
appropriate for action by shareholders. If a regular meeting of shareholders has
not been held for a period of fifteen (15) months, one or more shareholders
entitled to vote may call a regular meeting of shareholders by delivering to the
President or Treasurer a written demand for a regular meeting. Within thirty
(30) days after the receipt of such written demand by the President or
Treasurer, the Board of Directors shall cause a regular meeting of shareholders
to be called and held on notice no later than ninety (90) days after the receipt
of written demand, all at the expense of the corporation.
2.2 SPECIAL MEETINGS
Special meetings of the shareholders for any purpose may be called at any
time by the President, or by the Board of Directors, or by any two or more
members thereof, or by one or more shareholders holding not less than twenty
percent (20%) of the voting power of the Corporation. Such meetings shall be
held at the principal office of the Corporation or at such other place within or
without the State of Nevada as may be designated in the notice of meeting. No
business shall be transacted at any special meeting of the shareholders except
as is specified in the notice calling for such special meeting.
2.3 NOTICE OF MEETINGS
2.3.1 Notices of meetings, annual or special, to shareholders entitled to
vote shall be given in writing and signed by the President or a Vice-President
or the Secretary or the Assistant Secretary, or by any other natural person
designated by the Board of Directors.
2.3.2 Such notices shall be sent to the shareholder's address appearing on
the books of the Corporation, or supplied by him to the Corporation for the
purpose of notice, not less than ten (10) nor more than sixty (60) days before
such meeting. Such notice shall be deemed delivered, and the time of the notice
shall begin to run, upon being deposited in the mail.
2.3.3 Notice of any meeting of shareholders shall specify the place, the
day and the hour of the meeting, and in case of a special meeting shall state
the purpose(s) for which the meeting is called.
2.3.4 When a meeting is adjourned to another time, date or place, notice of
the adjourned meeting need not be given if announced at the meeting at which the
adjournment is given.
2.3.5 Any shareholder may waive notice of any meeting by a writing signed
by him, or his duly authorized attorney, either before or after the meeting.
2.3.6 No notice is required for matters handled by the consent of the
shareholders pursuant to NRS 78.320.
2.3.7 No notice is required of the annual shareholders meeting, or other
notices, if two annual shareholder notices are returned to the corporation
undelivered pursuant to NRS 78.370(7).
2.4 CONSENT TO SHAREHOLDER MEETINGS AND ACTION WITHOUT MEETING
2.4.1 Any meeting is valid wherever held by the mitten consent of all
persons entitled to vote thereat, given either before or after the meeting.
2.4.2 The transactions of any meeting of shareholders, however called and
noticed, shall be valid as though if taken at a meeting duly held after regular
call and notice if a quorum be present either in person or by proxy, and if:
either before or after the meeting, each of the shareholders entitled to vote,
not present in person or by proxy, signs a written waiver of notice, or consent
to the holding of such meeting, or an approval of the minutes thereof.
2.4.3 Any action that could be taken by the vote of shareholders at a
meeting, may be taken without a meeting if authorized by the written consent of
shareholders holding at least a majority of the voting power (NRS 78.320), and
any actions at meetings not regularly called shall be effective subject to the
ratification and approval provisions of NRS 78.325.
2.4.4 All such waivers, consents or approvals shall be filed with the
corporate records, or made a part of the minutes of the meeting.
2
2.5 QUORUM
The holders of a majority of the shares entitled to vote thereat, present
in person or by proxy, shall constitute a quorum for the transaction of
business.
2.6 VOTING RIGHTS
Except as may be otherwise provided in the Corporation's Articles of
Incorporation, Bylaws or by the Laws of the State of Nevada, each shareholder
shall be entitled to one (1) vote for each share of voting stock registered in
his name on the books of the Corporation, and the affirmative vote of a majority
of voting shares represented at a meeting and entit1ed to vote thereat shall be
necessary for the adoption of a motion or for the determination of all questions
and business which shall come before the meeting.
2.7 PROXIES
Subject to the limitation of NRS 78.355, every person entitled to vote or
to execute consents may do so either in person or by proxy executed by the
person or by his duly authorized agent.
ARTICLE III: DIRECTORS - MANAGEMENT
3.1 POWERS
Subject to the limitation of the Articles of Incorporation, of the Bylaws
and of the Laws of the State of Nevada as to action to be authorized or approved
by the shareholders, all corporate powers shall be exercised by or under
authority of; and the business and affairs of this Corporation shall be
controlled by, a Board of at least one (1) Director.
3.2 ELECTION AND TENURE OF OFFICE
The number of Directors which shall constitute the whole board shall be one
(1)
The number of Directors may from time to time be increased to not less than
one (1) nor more than nine (9) by action of the Board of Directors. The
Directors shall be elected at the annual meeting of shareholders and except as
provided in Section 3.3 of this Article, each Director elected shall hold office
until his successor is elected and qualified. Directors need not be
shareholders. A Director need not be a resident of the State of Nevada.
3.3 REMOVAL AND RESIGNATION
3.3.1 Any Director may be removed either with or without cause, as provided
by NRS 78.335.
3.3.2 Any Director may resign at any time by giving written notice to the
Board of Directors or to the President, or to the Secretary of the Corporation.
Any such
3
resignation shall take effect at the date of the receipt of such notice or any
later time specified therein; and unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
3.4 VACANCIES
Vacancies in the Board of Directors may be filled by a majority of the
remaining Directors, though such action by less than a quorum or by a sale
remaining Director shall be adequate, and each Director so elected shall hold
office until his successor is elected at an annual meeting of shareholders or at
a special meeting called for that purpose. The shareholders may at any time
elect a Director to fill any vacancy not filed by the directors.
3.5 PLACE OF MEETINGS AND MEETINGS BY TELEPHONE
Meetings of the Board of Directors may be held at any place within or
without the State of Nevada that has been designated by the Board of Directors.
In the absence of such designation, meetings shall be held at the principal
office of the Corporation. Any meeting, regular or special, may be held by
conference telephone or similar communication equipment, and all such Directors
shall be deemed to be present in person at the meeting, so long as all Directors
participating in the meeting can hear one another.
3.6 ANNUAL ORGANIZATIONAL MEETINGS
The annual organizational meetings of the Board of Directors shall be held
immediately following the adjournment of the annual meetings of the
shareholders. No notice of such meetings need be given.
3.7 OTHER REGULAR MEETINGS
There shall be no requirement for the Board of Directors to hold regular
meetings, other than the annual organizational meeting.
3.8 SPECIAL MEETINGS - NOTICES
3.8.1 Special meetings of the Board of Directors for any purpose shall be
called at any time by the President or if he is absent or unable or refuses to
act, by any Vice President or by any two Directors.
3.8.2 Written notice of the time and place of special meetings of the Board
of Directors shall be delivered personally to each Director or sent to each
Director by mail or other form of written communication at least forty-eight
(48) hours before the meeting. Notice of the time and place of holding an
adjourned meeting need not be given to absent Directors if the time and place
are fixed at the meeting adjourned.
4
3.9 CONSENT TO DIRECTORS MEETINGS AND ACTION WITHOUT MEETING
3.9.1 Any meeting is valid wherever held by the written consent of all
persons entitled to vote thereat, given either before or after the meeting.
3.9.2 The transactions of any meetings of the Board of Directors, however
called and noticed or wherever held, shall be as valid as though had at a
meeting duly held after regular call and notice if all the Directors are
present, or if a quorum is present and either before or after the meeting, each
of the Directors not present signs a written waiver of notice, a consent to the
holding of the meeting, or an approval of the minutes thereof.
3.9.3 Any action required or permitted to be taken by the Board of
Directors may be taken without a meeting, if all members of the Board shall
individually or collectively consent in writing to such action. Such action by
written consent shall have the same force and effect as a unanimous vote of the
Board of Directors.
3.9.4 Al1 such waivers, consents, or approvals shal1 be filed with the
Corporate records or made part of the minutes of the meeting.
3.10 QUORUM AND VOTING RIGHTS
So long as the Board of Directors is composed of one or two Directors, one
of the authorized Directors constitutes a quorum for the transaction of
business. If there are three or more Directors, a majority thereof shal1
constitute a quorum. Except as may be otherwise provided in the Corporation's
Articles of Incorporation, Bylaws or by the Laws of the State of Nevada, the
affirmative vote of a majority of Directors represented at a meeting and
entitled to vote thereat shall be necessary for the adoption of a motion or
resolution or for the determination of al1 questions and business which shall
come before the meeting.
3.11 COMPENSATION
Directors may receive such reasonable compensation for their services as
Directors and such reimbursement for expenses incurred in attending meetings as
may be fixed from time to time by resolution of the Board of Directors. No such
payment shall preclude a Director from serving in any other capacity and
receiving compensation therefor.
ARTICLE IV: OFFICERS
4.1 OFFICERS
The Board of Directors shall appoint a President, a Secretary and a
Treasurer. The Board of Directors, in their discretion, may also appoint a Chair
of the Board, a Chief Executive Officer, a Chief Financial Officer, one or more
Vice Presidents and such other oft1cers and assistant officers as they shall
from time to time deem proper. Any two
5
or more offices may be held by the same person. The Board may choose not to fill
any of the other officer positions for any period.
4.2 APPOINTMENT AND TERM OF OFFICE
The officers of the corporation shall be appointed by the Board of
Directors at the first meeting of the Directors. If the appointment of officers
shall not be held at such meeting, such appointment shall be held as soon
thereafter as conveniently may be. Each officer shall hold office until a
successor shall have been duly appointed and qualified or until the officer's
death or until the officer resigns or is removed in the manner hereinafter
provided.
4.3 REMOVAL
Any officer or agent appointed by the Board of Directors may be removed by
the Board of Directors at any time with or without cause, but such removal shall
be without prejudice to the contract rights, if any, of the person so removed.
4.4 VACANCIES
A vacancy in any office because of death, resignation, removal,
disqualification, or otherwise, may be filled by the Board of Directors.
4.5 CHAIR OF THE BOARD
The Chair of the Board, if there be such an office, shall, if present,
preside at all meetings of the Board of Directors and meetings of the
shareholders, and exercise and perform such other powers and duties as may be
from time to time assigned to the Chair by the Board of Directors. In the event
that there is no Chair of the Board designated or present, the Secretary of the
Board of Directors shall preside over the meeting, or if there is no Secretary
of the Board of Directors designated or present at the meeting, the Directors
present at any meeting of the Board of Directors shall designate a Director of
their choosing to serve as temporary chair to preside over the meeting.
4.6 CHIEF EXECUTIVE OFFICER
Subject to the control of the Board of Directors and such supervisory
powers, if any, as may be given by the Board of Directors to another person or
persons, the powers and duties of the Chief Executive Officer shall be: To act
as the general manager and, subject to the control of the Board of Directors, to
have general supervision, direction and control of the business and affairs of
the Corporation; To see that all orders and resolutions of the Board of
Directors are carried into effect; To maintain records of and, whenever
necessary, certify all proceedings of the Board of Directors and the
shareholders; and To affix the signature of the Corporation to all deeds,
conveyances, mortgages, guarantees, leases, obligations, bonds, certificates and
other papers and instruments in writing which have been authorized by the Board
of Directors or which, in the judgment of the Chief Executive Officer, should be
executed on behalf of the Corporation; to sign certificates for the
Corporation's shares; and, subject to the direction
6
of the Board of Directors, to have general charge of the property of the
Corporation and to supervise and control all officers, agents and employees of
the corporation.
4.7 CHIEF FINANCIAL OFFICER OR TREASURER
Subject to the control of the Board of Directors and such supervisory
powers, if any, as may be given by the Board of Directors to another person or
persons, the powers and duties of the Chief Financial Officer or Treasurer shall
be to: keep accurate financial records for the Corporation; deposit all money,
drafts and checks in the name of and to the credit of the Corporation in the
banks and depositories designated by the board of directors; endorse for deposit
all notes, checks, drafts received by the Corporation as ordered by the Board of
Directors, making proper vouchers therefore; disburse corporate funds and issue
checks and drafts in the name of the Corporation, as ordered by the Board of
Directors; render to the Chief Executive Officer and the Board of Directors,
whenever requested, an account of all transactions by the Chief Financial
Officer and the financial condition of the Corporation; and perform all other
duties prescribed by the Board of Directors or the Chief Executive Officer.
4.8 PRESIDENT
Unless otherwise determined by the Board of Directors, the President shall
be the Chief Executive Officer of the Corporation. If an officer other than the
President is designated as the Chief Executive Officer, the President shall
perform such duties as may from time to time be assigned by the Board of
Directors. The President shall have the duty to call meetings of the
shareholders or Board of Directors, as set forth in Section 3.8.1, above, to be
held at such times and, subject to the limitations prescribed by law or by these
Bylaws, at such places as the President shall deem proper.
4.9 VICE PRESIDENTS
In the absence of the President or in the event of the President's death,
inability or refusal to act, the Vice President (or in the event there shall be
more than one Vice President, the Vice Presidents in the order designated at the
time of their appointment, or in the absence of any designation then in the
order of their appointment) shall perform the duties of the President, and when
so acting shall have all the powers of and be subject to all the restrictions
upon the President; and shall perform such other duties as from time to time may
be assigned to the Vice President by the President or by the Board of Directors.
In the event there are no Vice Presidents, the Board of Directors may designate
a member of the Board of Directors or another officer of the Corporation to
serve in such capacity until a new President is appointed.
4.10 SECRETARY
The Secretary shall: (a) prepare the minutes of the shareholders' and Board
of Directors' meetings and keep them in one or more books provided for that
purpose; (b) authenticate such records of the Corporation as shall from time to
time be required; (c) see that all notices are duly given in accordance with the
provisions of these Bylaws or as required by law; (d) be custodian of the
corporate records and of the corporate seal, if
7
any, and see that the seal of the Corporation, if any, is affixed to all
documents the execution of which on behalf of the Corporation under its seal is
duly authorized; (e) keep a register of the post office address of each
shareholder; (f) if requested, sign with the President certificates for shares
of the Corporation, the issuance of which shall have been authorized by
resolution of the Board of Directors; (g) have general charge of the stock
transfer books of the Corporation; and (h) in general perform all duties
incident to the office of Secretary and such other duties as from time to time
may be assigned to the Secretary by the Chief Executive Officer or the Board of
Directors.
4.11 DELEGATION OF AUTHORITY
The Board of Directors may from time to time delegate the powers of any
officer to any other officer or agent, notwithstanding any provision hereof,
except as may be prohibited by law.
4.12 COMPENSATION
Officers shall be awarded such reasonable compensation for their services
and provisions made for their expenses incurred in attending to and promoting
the business of the Corporation as may be fixed from time to time by resolution
of the Board of Directors.
ARTICLE V: COMMITTEES
The Board of Directors may appoint and prescribe the duties of an executive
committee and such other committees, as it may from time to time deem
appropriate. Such committees shall hold office at the pleasure of the Board.
ARTICLE VI: RECORDS AND REPORTS - INSPECTION
6.1 INSPECTION OF BOOKS AND RECORDS
All books and records provided for by Nevada Revised Statutes shall be open
to inspection of the directors and shareholders to the extent provided by such
statutes. (NRS 78.105)
6.2 CERTIFICATION AND INSPECTION OF BYLAWS
The original or a copy of these Bylaws, as amended or otherwise altered to
date, certified by the Secretary, shall be open to inspection by the
shareholders of the company in the manner provided by law.
6.3 CHECKS, DRAFTS, ETC.
All checks, drafts or other orders for payment of money, notes or other
evidences of indebtedness, issued in the name of or payable to the Corporation,
shall be signed or endorsed by such person or persons and in such manner as
shall be determined from time to time by resolution of the Board of Directors.
8
6.4 ANNUAL REPORT
No annual report to shareholders shall be required; but the Board of
Directors may cause to be sent to the shareholders annual or other reports in
such form as may be deemed appropriate by the Board of Directors.
ARTICLE VII: AMENDMENTS TO BYLAWS
New Bylaws may be adopted or these Bylaws may be repealed or amended by a
vote or the written assent of either shareholders entitled to exercise a
majority of the voting power of the Corporation, or by a majority of the number
of Directors authorized to conduct the business of the Corporation.
ARTICLE VIII: CORPORATE SEAL
This Corporation shall have the power to adopt and use a common seal or
stamp, and to alter the same, at the pleasure of the Board of Directors. The use
or nonuse of a seal or stamp, whether or not adopted, shall not be necessary to,
nor shall it in any way effect, the legality, validity or enforceability of any
corporate action or document (NRS 78.065)
ARTICLE IX: CERTIFICATES OF STOCK
9.1 FORM
Certificates for shares shall be of such form and device as the Board of
Directors may designate and shall state the name of the record holder of the
shares represented thereby, its number; date of issuance; the number of shares
for which it is issued; a statement of the rights, privileges, preferences and
restrictions, if any; and statement of liens or restrictions upon transfer or
voting, if any; and, if the shares be assessable, or, if assessments are
collectible by personal action, a plain statement of such facts.
9.2 EXECUTION
Every certificate for shares must be signed by the President or the
Secretary or must be authenticated by facsimile of the signature of the
President or Secretary. Before it becomes effective, every certificate for
shares authenticated by a facsimile of a signature must be countersigned by an
incorporated bank or trust company, either domestic or foreign as registrar of
transfers.
9.3 TRANSFER
Upon surrender to the Secretary or transfer agent of the Corporation of a
certificate for shares duly endorsed or accompanied by a proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
Corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate, and record the transaction upon its books.
9
9.4 LOST OR DESTROYED CERTIFICATES
Any person claiming a certificate of stock to be lost or destroyed shall
make an affidavit or affirmation of that fact and advertise the same in such
manner as the Board of Directors may require and shall, if the Directors so
require, give the Corporation a bond of indemnity, in form and with one or more
sureties satisfactory to the Board, in at least double the value of the stock
represented by said certificate, whereupon a new certificate may be issued of
the same tenor and for the same number of shares as the one alleged to be lost
or destroyed.
9.5 TRANSFER AGENTS AND REGISTRARS
The Board of Directors may appoint one or more transfer agents or transfer
clerks, and one or more registrars, which shall be an incorporated bank or trust
company, either domestic or foreign, who shall be appointed at such times and
places as the requirements of the Corporation may necessitate and the Board of
Directors may designate.
9.6 CLOSING STOCK TRANSFER BOOKS
The Board of Directors may close the transfer books in their discretion for
a period not exceeding the sixty (60) days preceding any meeting, annual or
special, of the shareholders, or the date appointed for the payment of a
dividend.
CERTIFICATE OF SECRETARY
I, _________, the undersigned, the duly elected and acting Secretary of FONA,
Inc., do hereby certify that the above and foregoing Bylaws were adopted as the
Bylaws of said Corporation as of the ___ day of _________, 2009 by the Directors
of said Corporation.
______________, Secretary
10
EX-4.1
4
fona1012gex41.txt
SPECIMEN STOCK CERTIFICATE
Exhibit 4.1
FONA, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA
AUTHORIZED: 780,000,000 COMMON SHARES,
$0.001 PAR VALUE PER SHARE
NUMBER SHARES
+-----------------+
| CUSIP 34434 10 5|
+-----------------+
This Certifies That SEE REVERSE FOR
SPECIMEN CERTAIN DEFINITIONS
is the owner of
Fully Paid and Non-Assessable Common Stock, $0.001 Par Value of
FONA, INC.
transferable on the books of this Corporation in person or by attorney upon
surrender of this Certificate duly endorsed or assigned. This Certificate and
the shares represented hereby are subject to the laws of the State of Nevada,
and to the Articles of Incorporation and Bylaws of the Corporation, as now or
hereafter amended. This Certificate is not valid until countersigned by the
Transfer Agent.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by the facsimile signatures of its duly authorized officers and to be
sealed with the facsimile seal of the Corporation.
Dated:
FONA, INC.
[CORPORATE SEAL OMITTED]
/s/ Michael Friess NEVADA /s/ Chloe DiVita
---------------------- ----------------------
PRESIDENT SECRETARY
Countersigned:
CORPORATE STOCK TRANSFER, INC.
3200 Cherry Creek South Drive, Suite 430
Denver, CO 80209
By _______________________________________________________
Transfer Agent and Registrar Authorized Officer
FONA, INC.
Corporate Stock Transfer, Inc.
Transfer Fee: As Required
SPECIMEN
--------------------------------------------------------------------------------
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common UNIF GIFT MIN ACT- .............. Custodian for ..............
(Cust.) (Minor)
TEN ENT -- as tenants by the entireties under Uniform Gifts to Minors
JT TEN -- as joint tenants with right of Act of ...........................................
survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
For value received .......................hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
+-----------------------------------------------------+
| |
| |
+-----------------------------------------------------+
Please print or type name and address of assignee
.................................................................................
.................................................................................
.................................................................................
...........................................................................Shares
of the Common Stock represented by the within Certificate and do hereby
irrevocably constitute and appoint
.................................................................................
.................................................................................
Attorney to transfer the said stock on the books of the within-named
Corporation, with full power of substitution in the premises.
Dated ................20........
SIGNATURE GUARANTEED: X_______________________________
X_______________________________
THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON
THE FACE OF THIS CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER. THE SIGNATURE(S) MUST BE GUARANTEED BY AN
ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan
Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM.
EX-31.1
5
fona10k123110ex311.txt
SECTION 302 CERTIFICATION OF CHIEF EXECUTIVE OFFICER
Exhibit 31.1
Certification
I, Michael Friess, certify that:
1. I have reviewed this annual report on Form 10-K of Fona, Inc.;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect
to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in
this report;
4. The registrant's other certifying officer(s) and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this annual report is being prepared;
b) Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report
based on such evaluation; and
d) Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect,
the registrant's internal control over financial reporting;
5. The registrant's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing
the equivalent functions):
a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial
information; and
b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: March current at time of filing, 2011 /s/ Michael Friess
----------------------------
Michael Friess
President,
Chief Executive Officer
EX-31.2
6
fona10k123110ex312.txt
SECTION 302 CERTIFICATION OF CHIEF FINANCIAL OFFICER
Exhibit 31.2
Certification
I, Chloe DiVita, certify that:
1. I have reviewed this annual report on Form 10-K of Fona, Inc.;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect
to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in
this report;
4. The registrant's other certifying officer(s) and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this annual report is being prepared;
b) Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report
based on such evaluation; and
d) Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect,
the registrant's internal control over financial reporting;
5. The registrant's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing
the equivalent functions):
a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial
information; and
b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: March current at time of filing, 2011 /s/ Chloe DiVita
----------------------------
Chloe DiVita
Treasurer, Secretary, and
Chief Financial Officer
EX-31.3
7
fona10k123110ex313.txt
SECTION 302 CERTIFICATION OF VICE PRESIDENT
Exhibit 31.3
Certification
I, Sanford Schwartz, certify that:
1. I have reviewed this annual report on Form 10-K of Fona, Inc.;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect
to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in
this report;
4. The registrant's other certifying officer(s) and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this annual report is being prepared;
b) Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report
based on such evaluation; and
d) Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect,
the registrant's internal control over financial reporting;
5. The registrant's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing
the equivalent functions):
a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial
information; and
b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: March current at time of filing, 2011 /s/ Sanford Schwartz
--------------------------
Sanford Schwartz
Vice President
EX-32.1
8
fona10k123110ex321.txt
SECTION 906 CERTIFICATION OF CHIEF EXECUTIVE OFFICER
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Fona, Inc. (the "Company") on Form 10-K
for the year ended December 31,2010, as filed with the Securities and Exchange
Commission on the date hereof (the "Report"), the undersigned hereby certify
that to the best of my knowledge:
1. The Report fully complies with the requirements of Section 13(a) of the
Securities Exchange Act of 1934; and
2. Information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
IN WITNESS WHEREOF, the undersigned has executed this statement this March
current at time of filing, 2011.
/s/ Michael Friess
-----------------------------
Michael Friess
President,
Chief Executive Officer
A signed original of this written statement required by Section 906 has been
provided to Fona, Inc. and will be retained by Fona, Inc. and furnished to the
Securities and Exchange Commission or its staff upon request.
The forgoing certification is being furnished to the Securities and Exchange
Commission pursuant to ss.18 U.S.C. Section 1350. It is not being filed for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and
is not to be incorporated by reference into any filing of the Company, whether
made before or after the date hereof, regardless of any general incorporation
language in such filing.
EX-32.2
9
fona10k123110ex322.txt
SECTION 906 CERTIFICATION OF CHIEF FINANCIAL OFFICER
Exhibit 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Fona, Inc. (the "Company") on Form 10-K
for the year ended December 31,2010, as filed with the Securities and Exchange
Commission on the date hereof (the "Report"), the undersigned hereby certify
that to the best of my knowledge:
1. The Report fully complies with the requirements of Section 13(a) of the
Securities Exchange Act of 1934; and
2. Information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
IN WITNESS WHEREOF, the undersigned has executed this statement this March
current at time of filing, 2011.
/s/ Chloe DiVita
------------------------------
Chloe DiVita
Treasurer, Secretary, and
Chief Financial Officer
A signed original of this written statement required by Section 906 has been
provided to Fona, Inc. and will be retained by Fona, Inc. and furnished to the
Securities and Exchange Commission or its staff upon request.
The forgoing certification is being furnished to the Securities and Exchange
Commission pursuant to ss.18 U.S.C. Section 1350. It is not being filed for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and
is not to be incorporated by reference into any filing of the Company, whether
made before or after the date hereof, regardless of any general incorporation
language in such filing.
EX-32.3
10
fona10k123110ex323.txt
SECTION 906 CERTIFICATION OF VICE PRESIDENT
Exhibit 32.3
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Fona, Inc. (the "Company") on Form 10-K
for the year ended December 31,2010, as filed with the Securities and Exchange
Commission on the date hereof (the "Report"), the undersigned hereby certify
that to the best of my knowledge:
1. The Report fully complies with the requirements of Section 13(a) of the
Securities Exchange Act of 1934; and
2. Information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
IN WITNESS WHEREOF, the undersigned has executed this statement this March
current at time of filing, 2011.
/s/ Sanford Schwartz
----------------------------
Sanford Schwartz
Vice President
A signed original of this written statement required by Section 906 has been
provided to Fona, Inc. and will be retained by Fona, Inc. and furnished to the
Securities and Exchange Commission or its staff upon request.
The forgoing certification is being furnished to the Securities and Exchange
Commission pursuant to ss.18 U.S.C. Section 1350. It is not being filed for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and
is not to be incorporated by reference into any filing of the Company, whether
made before or after the date hereof, regardless of any general incorporation
language in such filing.